Jack Ross
About Jack Ross
Jack J. Ross is President of Ready Capital and a director since October 2016; he is age 67 and a co‑founder and Manager of Waterfall Asset Management, RC’s external manager. He holds an MBA in Finance with distinction from Wharton and a BS in Accounting, cum laude, from SUNY Buffalo, with prior leadership of Merrill Lynch’s real estate finance and ABS groups and earlier roles at Drexel Burnham Lambert and Laventhol & Horwath . Company performance context during his tenure: in 2024 RC reported net loss of $(430.4) million and Distributable ROE of 0.9%, with a company TSR index value of 130.5 versus peer group 194.8 in the pay‑versus‑performance table .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Waterfall Asset Management (RC’s Manager) | Manager and co‑founder | 2005 | Built external management platform that earns management fees and incentive distributions, aligning executive incentives to manager profits . |
| Merrill Lynch | Managed real estate finance and ABS groups | 1987–1999 | Led securitization and ABS activities; deep structuring expertise . |
| Licent Capital | Founder | — | Specialty broker/dealer for IP securitization . |
| Drexel Burnham Lambert | Early ABS transactions | — | Pioneered ABS transactions; capital markets experience . |
| Laventhol & Horwath | Senior auditor | — | Audit and accounting foundation . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Feinstein Institutes for Medical Research | Vice Chairman of the Board | — |
Fixed Compensation
- RC is externally managed; RC does not pay or reimburse cash compensation for Mr. Ross (or the CEO). Mr. Ross is compensated by Waterfall and affiliates; RC cites no cash salary/bonus paid by the company to him .
- Manager estimate for 2024: total compensation of Messrs. Capasse and Ross associated with RC was $2.5 million (~10% of RC’s $24.9 million management fees in 2024), split ~40% fixed ($1.0 million) and ~60% variable ($1.5 million) via profit allocation tied to equity ownership in the Manager and affiliates .
| Component | 2024 Amount |
|---|---|
| Estimated fixed compensation (portion associated with RC) | $1.0 million |
| Estimated variable (profit allocation associated with RC) | $1.5 million |
| RC management fees paid to Manager | $24.9 million |
Note: These amounts are Manager estimates of compensation associated with supporting RC; RC does not directly disclose Ross’s total compensation and does not pay him cash compensation .
Performance Compensation
- RC historically does not grant equity awards to the CEO or President; instead, the Manager receives 50% of incentive distributions in RC common stock, and Messrs. Capasse and Ross participate through their equity ownership in the Manager and affiliates .
- Incentive distribution formula: 15% of core earnings over an 8% hurdle on a rolling 12‑quarter basis; paid 50% cash and 50% RC shares/OP units, with a three‑year sale restriction on equity paid to the Manager, aligning manager economics with RC performance .
| Metric/Mechanism | Structure | Vesting/Restrictions |
|---|---|---|
| Manager incentive distribution | 15% of core earnings over 8% hurdle (12‑quarter test) | 50% paid in RC equity; Manager generally restricted from selling for three years . |
| CEO/President company equity grants | Not part of RC compensation program | N/A (no RC PSUs/RSUs disclosed for Ross) . |
Equity Ownership & Alignment
| Ownership Element | Amount | Notes |
|---|---|---|
| Total beneficial ownership | 351,025 shares | Less than 1% of outstanding . |
| Breakdown | 155,264 shares via Robin J. Ross 2009 Trust; 160,264 shares via Jack J. Ross & Robin J. Ross JTWROS; 35,497 shares proportionate to Waterfall entities holdings; disclaims beneficial ownership except economic interest | Trust voting/investment power resides with trustee; Waterfall general partner role noted; disclaimers on beneficial ownership . |
| Shares outstanding used for % | 172,286,090 shares (incl. 1,792,258 unvested restricted) | Table reflects “<1%” for Ross . |
| Hedging/Pledging | Prohibited for directors/executive officers | No hedging or pledging of company securities permitted under policy . |
| Ownership guidelines | Independent directors: 5× cash retainer; certain executives (CFO/COO/CCO): 3× base salary | Unvested RS/RSUs excluded; five‑year compliance window . |
Employment Terms
- Employment relationship: Mr. Ross is an employee of the Manager; RC has no obligation to pay him any compensation upon termination from RC .
- Change‑in‑control: RC’s equity plans allow the Compensation Committee to adjust grantees’ awards; as RC historically does not grant awards to the President, these provisions are not applicable to Mr. Ross’s RC compensation .
- Management Agreement economics and termination: RC may terminate the Manager with supermajority independent director or stockholder vote; “without cause” termination requires payment of a termination fee equal to 3× average annual base management fee over prior 24 months and repurchase of the Class A special unit for 3× average annual incentive distribution over the prior 24 months—raising practical termination costs and impacting leadership/retention considerations given Ross’s role at the Manager .
Board Governance
- Role: Director since 2016; Committees: None (management director) .
- Independence: Board has a majority of independent directors (5 of 7 nominees). Lead Independent Director in place; independent director executive sessions held at least quarterly (8 sessions in 2024) .
- Meeting cadence: 9 total board meetings in 2024; board attendance highlighted at 90% in proxy key statistics .
- Combined roles: CEO also serves as Chairman; board maintains a Lead Independent Director to balance governance; Mr. Ross, as President and Manager co‑founder, represents a dual‑role management director, with independence considerations mitigated by board structure and policies .
Director Compensation
- RC pays director compensation only to independent directors. In 2024: $95,000 annual cash fee and $115,000 restricted stock grant (prorated), plus committee retainers (Audit Chair $25,000; Compensation Chair $20,000; Nominating Chair $15,000; non‑chair member retainers) .
- As a non‑independent management director, Mr. Ross does not receive these independent director retainers or equity grants from RC .
Compensation Committee Analysis
- Composition: Independent directors only; Chair Todd M. Sinai; members Meredith Marshall and Dominique Mielle .
- Consultant: Farient Advisors served as independent compensation consultant, benchmarking officer/director compensation and peer groups; committee evaluated conflicts and found none .
- Program orientation: Formulaic annual cash incentive and long‑term equity awards for reimbursed executives (CFO/COO/CCO), with performance metrics including Distributable ROE and relative TSR. Not applicable to Mr. Ross; he is compensated by the Manager .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay vote support: approximately 84% of votes cast supported RC’s NEO compensation program .
- Frequency: Board recommends annual advisory votes (“1 YEAR”) for say‑on‑pay frequency .
Related Party Transactions & Conflicts
- Management Agreement: Manager earns 1.5% per annum of stockholders’ equity up to $500 million and 1.0% above $500 million, payable quarterly; incentive distribution per formula, 50% in equity with sale restrictions, aligning Manager with RC shareholders .
- Governance: RC maintains a Related Party Transaction Policy; independent director oversight of Manager fees and conflicts, with termination rights subject to meaningful fees that can affect the practicality of internalization or manager changes .
Performance Context
| Measure | 2024 Result |
|---|---|
| Net Income (loss) | $(430,398) thousand |
| Distributable ROE | 0.9% |
| TSR index value of $100 investment | 130.5 (company) |
| Peer group TSR index value of $100 investment | 194.8 |
Investment Implications
- Alignment and selling pressure: RC historically does not grant company equity awards to Mr. Ross, reducing mechanical vesting‑related insider selling pressure; beneficial ownership is <1% with hedging and pledging prohibited, limiting misalignment risks through leverage or derivative strategies .
- External management economics: Mr. Ross’s variable compensation is tied to Manager profits, with RC paying sizable management fees and potential incentive distributions; this creates alignment to platform performance but introduces external manager conflict risks and termination costs that may entrench the structure and affect strategic flexibility .
- Governance mitigants: Majority‑independent board, Lead Independent Director, frequent executive sessions, and related‑party controls partially offset dual‑role independence concerns (CEO as Chairman; President as Manager principal), though investors should monitor say‑on‑pay outcomes and manager fee/incentive distribution economics over time .
- Performance backdrop: 2024 net loss and low Distributable ROE, alongside lagging TSR versus peers in the pay‑versus‑performance view, heighten execution risk for RC’s recovery and origination growth strategy, increasing scrutiny on management’s capital allocation and risk management under the external model .