Thomas Capasse
About Thomas Capasse
Thomas E. Capasse is Chairman, Chief Executive Officer, and Chief Investment Officer of Ready Capital Corporation (RC). He has served as Chairman and CEO since October 2016 and as CIO since November 2022; age 68; BA in Economics from Bowdoin College . RC’s recent performance backdrop under his leadership includes 2024 negative GAAP net income of $(430.4) million, distributable ROE of 0.9%, and a five-year TSR path that ended 2024 at $130.5 on a $100 initial investment versus a $194.8 peer group, reflecting sector headwinds and transition efforts . In 2024, management highlighted strategic acquisitions (Madison One, Funding Circle, United Development Funding IV) and 1.7x origination growth in the Small Business Lending segment as key initiatives to position for recovery .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Merrill Lynch (ABS Group) | Founding member, mortgage/ABS securitization | 1983–1994 | Helped launch subprime mortgage and manufactured housing ABS; broad ABS expertise |
| Greenwich Capital | Head, principal finance group | 1995–1997 | Built principal finance capabilities |
| Nomura Securities | Head, principal finance group | 1997–2001 | Expanded securitization/principal finance platform |
| Macquarie Securities | Head, principal finance group | 2001–2004 | Led principal finance through early 2000s cycle |
| Dean Witter; Bank of Boston | Fixed income analyst (early career) | Not disclosed | Foundation in fixed income analytics |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Waterfall Asset Management, LLC | Manager and co‑founder | Not disclosed | External manager to RC; Capasse is a principal; creates indirect economic exposure to RC via management fee and incentive distribution |
Board Governance (Service, Roles, Independence)
- Director since 2016; Chairman of the Board; no committee assignments .
- Board structure: 7 directors; 5 independent; combined Chair/CEO role with a Lead Independent Director (J. Mitchell Reese, appointed April 2025). Board held 9 meetings in 2024, with 8 independent director executive sessions; board attendance was 90% .
- Independent director oversight is emphasized with regular executive sessions and lead director responsibilities to mitigate the combined Chair/CEO structure .
- Director compensation is paid only to independent directors; as an executive, Capasse does not receive director retainers/equity grants .
Fixed Compensation
RC is externally managed. RC does not pay or reimburse cash compensation for Mr. Capasse; he is compensated by Waterfall Asset Management (the Manager) . The Manager estimated that total compensation for Messrs. Capasse and Ross attributable to RC was $2.5 million in 2024 (about 10% of RC’s management fee), with ~40% fixed and ~60% variable, reflecting their equity interests in the Manager and affiliates; this is an estimate, not a company payment disclosure . In 2024, RC paid the Manager $24.9 million in management fees and no incentive distribution .
| Item | 2024 Amount/Terms | Source/Notes |
|---|---|---|
| Company-paid CEO salary/bonus | Not applicable (paid by external manager) | RC does not pay or reimburse Capasse’s cash compensation |
| Manager’s estimated comp tied to RC (Capasse + Ross combined) | $2.5 million; 40% fixed ($1.0m) / 60% variable ($1.5m) | Manager’s estimate contextualizing RC-related share of manager-level compensation |
| RC Management Fee to Manager | $24.9 million | Paid by RC to Manager in 2024 |
| RC Incentive Distribution to Manager | $0 | No incentive distribution in 2024 |
Performance Compensation (Structure and Linkage)
Because RC is externally managed, CEO pay-for-performance primarily flows through Manager economics rather than RC’s internal NEO bonus plan. Key RC-to-Manager linkages:
| Mechanism | Terms | Linkage to Performance |
|---|---|---|
| Management Fee | 1.5% per annum of stockholders’ equity up to $500m; 1.0% above $500m; paid quarterly in arrears | Tied to equity base, not operating performance |
| Incentive Distribution | 15% of core earnings over an 8% hurdle; cumulative 12-quarter test; paid 50% cash / 50% RC stock; Manager stock portion generally subject to 3-year hold | Directly linked to profitability/core earnings; aligns via stock and hold periods; $0 paid in 2024 |
Context on RC’s internal (reimbursed) NEO incentive design (CFO/COO/CCO) – useful for assessing company-wide performance signals even though CEO comp is external:
| Metric | Weighting | Targets and Actual 2024 | Payout Implications |
|---|---|---|---|
| Distributable ROE | 30% (each of CFO/COO/CCO) | Threshold 0.0%; Target 8.0%; Max 10.0%; Actual 3.7% | Below target on Distributable ROE |
| Adjusted Distributable ROE | 30% | Threshold 0.0%; Target 8.0%; Max 10.0%; Actual 10.6% | Above max on Adjusted Distributable ROE |
| Individual goals | 40% | Varies by executive | Actual bonuses: CFO $1,050,000; COO $766,000; CCO $1,001,000 |
Peer group and long-term equity (for internal NEOs): 50% time-based RS, 50% performance-based RSUs with 3-year performance on Distributable ROE and relative TSR vs a mortgage/finance peer basket (e.g., AGNC, Arbor, Dynex, New York Mortgage Trust, Two Harbors, Rithm, etc.), indicating relative and profitability orientation in equity incentives .
Equity Ownership & Alignment
| Category | Detail |
|---|---|
| Beneficial ownership (common) | 379,590 shares; less than 1% of shares outstanding as of April 21, 2025 |
| Preferred holdings | 20,000 shares of RC Series E Preferred Stock |
| Look-through stake history | Schedule 13D/A (Apr 17, 2024) reported 7,639,147 shares (4.4%) beneficially owned (includes shares held through Sutherland REIT Holdings, LP and Waterfall entities). SRH also redeemed LP units for RC shares in March–April 2024 (including 4,375,765 units on April 15, 2024), distributing shares to redeeming partners; thereafter, reporting persons ceased to be >5% holders as of April 15, 2024 . |
| Hedging and pledging | Hedging and pledging of company securities by officers and directors are prohibited . |
| Ownership guidelines | Mandatory stock ownership guidelines apply to independent directors (5x annual cash retainer) and to certain reimbursed executives (CFO/COO/CCO at 3x salary); the committee reported compliance or within allowed time window as of Dec 31, 2024 . |
Implications: Directly reported common ownership is modest (<1%) post-2024 SRH redemptions; however, ongoing economic alignment is maintained via interest in the Manager (including potential receipt of RC stock for incentive distributions when earned) and a strict no-hedge/pledge policy reduces misalignment risk .
Employment Terms
- Company employment/contract: RC has no obligation to pay severance to NEOs who are employees of the Manager; Capasse is compensated by the Manager, not RC .
- Change-in-control (equity plans): Upon change in control, the Compensation Committee has discretion to maintain proportionate rights in outstanding awards; historically, Capasse does not receive RC equity awards as part of compensation (Manager’s incentive distribution partially paid in RC stock with a three-year hold) .
- Management Agreement economics and termination: RC may terminate the Management Agreement annually (with supermajority independent director or stockholder vote), but termination without cause triggers a fee equal to 3x the average annual base management fee for prior 24 months, plus RC’s Operating Partnership must repurchase the Class A special unit for 3x the average incentive distribution for the prior 24 months; 180 days’ notice required (except upon internalization) .
- Clawback: RC maintains a clawback policy compliant with NYSE and Rule 10D‑1 .
Company Performance Under Tenure (Context)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 investment (TSR) | $147.0 | $206.5 | $165.3 | $173.0 | $130.5 |
| Peer group TSR | $160.7 | $203.5 | $165.4 | $204.0 | $194.8 |
| Net income (loss), $000s | $46,069 | $159,974 | $203,163 | $348,411 | $(430,398) |
| Distributable ROE | 12.3% | 15.4% | 12.8% | 8.6% | 0.9% |
Additional operational context: In 2024, management cited strategic acquisitions (Madison One, Funding Circle, United Development Funding IV) and 1.7x growth in Small Business Lending originations as steps toward recovery amid transitional CRE headwinds .
Say‑on‑Pay, Peer Group, and Shareholder Engagement
- Say‑on‑pay support: ~84% approval at the 2024 annual meeting .
- Compensation consultant: Farient Advisors engaged; peer group used for benchmarking and relative TSR includes AGNC, Arbor Realty Trust, Dynex, New York Mortgage Trust, Two Harbors, Rithm, Redwood Trust, Ladder Capital, Hannon Armstrong, Mr. Cooper, Radian, Walker & Dunlop, MFA, BrightSpire .
- Shareholder engagement: Ongoing outreach and feedback loop to board and compensation practices .
Related‑Party Transactions and Conflicts Controls
- RC is externally managed by Waterfall Asset Management under the Management Agreement; board maintains a Related Party Transactions Policy with independent oversight and fairness criteria; 2024 payments to Manager were $24.9 million in fees and $0 in incentive distribution .
- Conflict mitigants include majority‑independent board, lead independent director, independent committees, and no hedging/pledging policy for insiders .
Investment Implications
- Alignment and transparency: CEO compensation is externalized, limiting direct look‑through to salary/bonus and traditional equity grants; economic linkage instead flows via Manager fees and incentive distribution (50% paid in stock with 3‑year hold when earned), which ties realized pay more to RC profitability than to size alone—but the base management fee still scales with equity, not performance .
- Governance risk/mitigants: Combined Chair/CEO role with a robust Lead Independent Director structure and majority‑independent board; independent directors meet in executive session and oversee Manager evaluation and fees; director pay limited to independents enhances governance optics .
- Retention and selling pressure: Capasse has modest directly reported common share ownership (<1%); 2024 SRH redemptions exchanged LP units for RC shares, increasing float and reducing look‑through concentration; hedging/pledging prohibitions reduce alignment risk, but external‑manager structure remains a structural consideration for investors .
- Performance leverage: Incentive distribution only pays after clearing an 8% hurdle with a cumulative test (no payout in 2024), reinforcing a pathway to pay‑for‑performance as fundamentals recover; strategic M&A and SBL expansion are intended to rebuild earnings power post‑CRE headwinds .
Note: All executive compensation dollar amounts and policies are as disclosed by RC; CEO compensation amounts are Manager‑level estimates provided for context and are not RC payments .
Citations: