Richard Thornberry
RADIAN GROUPAbout Richard Thornberry
Richard G. “Rick” Thornberry, age 66, has served as Radian Group Inc.’s Chief Executive Officer since March 2017 and as a director since March 2017. He began his career as a certified public accountant at Deloitte and later held senior roles across mortgage and real estate finance, including CEO posts at NexSpring Group and Nexstar Financial, bringing deep operating, financial management, and risk expertise to Radian . Under his leadership in 2024, Radian delivered total revenues of $1.3 billion (up from $1.2 billion), net income of $604 million, adjusted diluted net operating EPS of $4.11, ROAE of 13.4%, and a 14.5% TSR, while book value per share rose to $31.33 and primary IIF hit an all-time high of $275.1 billion . The Board maintains strong independent oversight with a separate Non-executive Chairman, and all directors other than the CEO are independent .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NexSpring Group, LLC | Chairman & CEO; co-founder | 2006–2017 | Advisory/technology services to mortgage lenders and investors; fintech initiatives to improve residential mortgage origination value proposition . |
| NexSpring Financial, LLC | Chairman & CEO; co-founder | 2006–2017 | Fintech focused on improving value across mortgage origination transactions . |
| Nexstar Financial Corporation | President & CEO; co-founder | 1999–2005 | Built end-to-end mortgage BPO platform; sale to MBNA Home Finance in 2005 . |
| MBNA Home Finance | Executive roles | 2005–2006 | Post-merger integration and mortgage operations leadership . |
| Citicorp Mortgage Inc. | Executive roles | 1996–1998 | Mortgage operations leadership at major financial institution . |
| Residential Services Corp. of America / Prudential Home Mortgage | Executive roles | 1987–1996 | Senior mortgage and real estate services operations experience . |
| Deloitte | Certified Public Accountant | Early career | Financial services audit and advisory foundation; CPA credential . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Housing Policy Council | Executive Council Member | Current | Industry policy engagement; supports navigation of regulatory landscape . |
| MBA Open Doors Foundation | Director | Current | Non-profit providing mortgage/rent assistance to families with critically ill or injured children . |
Fixed Compensation
Multi-year CEO compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 1,000,000 | 1,000,000 | 1,000,000 |
| Stock Awards – Grant Date FV ($) | 5,000,140 | 9,080,151 | 6,000,252 |
| Non-Equity Incentive (STI) ($) | 2,300,000 | 2,600,000 | 3,020,000 |
| All Other Compensation ($) | 86,580 | 108,189 | 83,687 |
| Total ($) | 8,386,720 | 12,788,340 | 10,103,939 |
2024 STI mechanics for CEO:
- Target STI: $2,000,000; Maximum STI: $4,000,000; Actual payout: $3,020,000 (151% of target) .
Ownership guidelines and fixed-pay mix:
- CEO stock ownership guideline: 7.0x base salary; NEOs: 2.5x; all NEOs in compliance as of Dec 31, 2024 .
- 2024 target pay mix for CEO: 11% base salary and 89% variable incentives (STI/LTI) .
Performance Compensation
2024 Short-Term Incentive (STI)
STI is 100% performance-based, tied to quantitative financial metrics and strategic objectives; corporate funding level determined by weighted metric achievement .
| Metric (Weight) | Target | Actual | Payout vs Target | Notes |
|---|---|---|---|---|
| Adjusted diluted net operating EPS (35%) | $3.12 | $4.11 | 200% | Non-GAAP; see 10-K reconciliations . |
| Adjusted pretax operating income (35%) | $608M | $803M | 200% | Non-GAAP; see 10-K reconciliations . |
| New Insurance Written (30%) | $51B | $52B | 101% | Market-based target setting . |
| Strategic Execution (40% of strategic category) | Qualitative | Achieved | 100% | Growth in IIF; two prime jumbo securitizations; expense actions . |
| Capital & Liquidity (20%) | Qualitative | Achieved | 125% | IG notes; debt-to-capital down to 18.7%; ratings upgrades . |
| Portfolio & Risk Mgmt (20%) | Qualitative | Achieved | 100% | Pricing, credit, claims discipline; reinsurance . |
| Human Capital (20%) | Qualitative | Achieved | 100% | Engagement, low turnover, succession . |
- Financial objectives achievement: 170% (weighted 70%) → 119% contribution .
- Strategic objectives achievement: 105% (weighted 30%) → 32% contribution .
- Total corporate funding level: 151% of target .
CEO-specific highlights:
- Award at corporate funding level (151%) reflecting delivery on financial, capital/liquidity, MI growth, conduit expansion, and ERM/culture strengthening .
Long-Term Incentive (LTI)
Structure: 60% performance-based RSUs (BV RSUs with relative TSR modifier) + 40% time-based RSUs; one-year post-vesting hold for performance awards .
2024 LTI grants (CEO):
- Time-Based RSUs: 76,630 units; grant-date FV $2,400,052; vests May 15 of 2025/2026/2027 .
- BV RSUs (target): 126,190 units; max 252,380; grant-date FV $3,600,201; performance period 4/1/2024–3/31/2027; vest 5/15/2027; one-year post-vesting hold .
BV RSUs performance grid:
| Cumulative LTI BVPS Growth | Payout (% of target) |
|---|---|
| ≤15% | 0% |
| 30% | 100% |
| ≥45% | 200% |
Relative TSR modifier (vs simple average TSR of MI peers: Enact, Essent, MGIC, NMI):
| Relative TSR | Modifier |
|---|---|
| ≥10.5% | +25.0% |
| 0.5% | 0.0% |
| ≤–9.5% | –25.0% |
| Note: No positive adjustment if absolute TSR is negative . |
2021 BV RSUs (context): 60% cumulative LTI BVPS growth over 3-year period; vested at 200% on May 15, 2024; converts to shares on May 15, 2025 (post-vesting hold) .
Change-of-control and termination:
- Double-trigger vesting on Qualifying Termination near CoC, using projected performance as of quarter-end prior to CoC .
- Involuntary termination (no CoC): prorated BV RSUs (unless within 6 months of grant or within 6 months of vest date, per award terms); time-based RSUs partially/full vest depending on timing .
Equity Ownership & Alignment
| Item | Value | Notes |
|---|---|---|
| Beneficial ownership (CEO) | 1,292,478 shares | Includes shares deliverable within 60 days from RSUs per proxy methodology . |
| Shares outstanding (record date) | 141,220,430 | As of March 24, 2025 record date . |
| Ownership % of outstanding | ~0.92% | Computed: 1,292,478 / 141,220,430; inputs: . |
| RSUs convertible within 60 days (CEO) | 443,026 shares | Includes May 2025 conversions (e.g., 2021 PB RSUs post-hold) . |
| Options (CEO) | None disclosed | No CEO options shown in outstanding awards table . |
| 2024 RSUs vested (CEO) | 374,698 shares; $11,743,035 value | Includes 271,999 performance RSUs with one-year hold to May 15, 2025 . |
| Ownership guidelines | 7.0x base salary (CEO); 2.5x (other NEOs) | Performance RSUs excluded until end of performance period . |
| Hedging/pledging | Prohibited company-wide | Insider Trading Policy bans hedging and pledging; options puts/calls also prohibited . |
| Clawback | SEC/Dodd-Frank compliant plus broader discretionary clawbacks | Applies to execs; recovers erroneously awarded incentive comp; discretionary recovery for overstatements/misconduct . |
Implications:
- Near-term supply risk: sizable May 15, 2025 conversions from 2021 PB RSUs (subject to one-year hold ending), plus 2022 PB RSUs vests on May 15, 2025; monitor insider Form 4s around these windows .
Employment Terms
CEO Amended and Restated Employment Agreement (effective 7/1/2023; term through 12/31/2026):
- Minimum total annual target compensation: $9,000,000 (base + STI target + LTI target) for each full fiscal year of the term .
- Base salary: $1,000,000; STI eligibility; annual LTI eligibility determined by independent directors .
- Severance (no CoC): 2x base salary; 2x greater of current-year STI target or 2023 STI target; prorated STI target for year of termination; COBRA reimbursement less active premium; retirement-eligible equity vesting per plan; Outperformance RSUs treated per award; BRP vesting; accrued obligations .
- Change-of-control: No incremental severance multiples; equity treated per award with double-trigger on Qualifying Termination .
- Tax gross-up: None for excise taxes; payments may be reduced to avoid 4999 excise if net after-tax is greater .
- Restrictive covenants: 18-month non-compete; non-solicit of employees/customers; other covenants per agreement .
- Clawback and policies: Agreement subject to code of conduct, clawbacks, stock ownership guidelines .
Reference severance values at 12/31/2024 (illustrative from proxy):
- Termination without cause/good reason (no CoC): Cash severance $8.0M (base + bonus), STI $3.02M, equity values per performance/time awards, COBRA reimbursement; total illustrative $36.83M .
- Retirement scenario: Equity/time awards as per retirement eligibility; total illustrative $34.65M .
Board Governance
- Role: Director since March 2017; not independent; serves alongside a majority independent Board .
- Leadership: Separate Non-executive Chairman (Howard B. Culang) and CEO roles; enhances independent oversight of CEO performance and strategy .
- Committees: CEO is not listed as serving on standing committees; Board committees (Audit, Compensation & Human Capital, Finance & Investment, Governance, Risk) are fully independent .
- Attendance and sessions: Board held five regular meetings plus one special in 2024; each director attended ≥75% of Board/committee meetings; independent directors meet in executive session with each regular Board meeting .
- Policies: Robust anti-hedging/anti-pledging, majority voting with conditional resignations, clawbacks, director overboarding limits, stockholder rights (e.g., special meeting calls) .
Compensation Committee & Peer Group
- Compensation Committee: Fully independent; uses Korn Ferry as independent consultant; assessed as conflict-free .
- Pay design: Heavy variable pay; LTI 60% performance-based with BVPS growth and relative TSR modifier; one-year post-vesting hold for performance awards .
- Peer group (for 2024 benchmarking): Arch Capital, Assured Guaranty, Enact, Essent, First American, MGIC, Mr. Cooper, NMI Holdings, Old Republic, PennyMac, RenaissanceRe, Stewart Information Services, Walker & Dunlop; peer medians vs Radian noted .
- Say-on-pay: 83% support at 2024 annual meeting; used to refine program (e.g., relative TSR modifier added beginning 2023) .
Performance & Track Record
| Measure (FY 2024) | Value |
|---|---|
| Total Revenues | $1.3 billion |
| Net Income | $604 million |
| Adjusted diluted net operating EPS | $4.11 |
| ROAE | 13.4% |
| Primary Insurance in Force | $275.1 billion |
| NIW | $52.0 billion |
| Book Value Per Share | $31.33 |
| Absolute TSR | 14.5% |
| Holding company debt-to-capital | 18.7% |
Selected achievements cited in STI strategic assessments:
- Grew MI IIF to all-time high; executed inaugural private-label securitization in conduit; added >50 sellers; initiated expense reductions targeting $20–$25M lower 2025 operating expenses .
- Enhanced pricing analytics; executed new quota-share reinsurance; improved credit selection and loss mitigation .
- Strengthened capital/liquidity: IG senior notes issuance; increased dividends upstream; more opportunistic buybacks (7.0M shares for $224M) and dividend increase; ratings upgrades (S&P IG in Jan 2024; Fitch upgrade in Jan 2025) .
Risk Indicators & Red Flags
- Hedging/pledging banned; short sales and derivatives forbidden .
- Clawbacks: mandatory for material restatement; broader discretionary recovery for overstatements/misconduct .
- No single-trigger CoC cash severance; double-trigger for equity vesting .
- No excise tax gross-ups; relocation gross-ups limited to specific cases (e.g., CFO relocation) .
- Related party transactions governed by policy requiring arm’s-length terms; Governance Committee oversight .
Equity Ownership & Alignment Details
| Category | Detail |
|---|---|
| Ownership guidelines compliance | CEO and NEOs compliant as of 12/31/2024 . |
| Post-vesting holding | One-year hold on performance-based RSUs; conversions tied to hold expiry (e.g., May 15, 2025 for 2021 BV RSUs) . |
| Deferred comp | CEO shows no officer DCP balances; participates in BRP with 2024 company credit $54,300; BRP balance $463,179 . |
Employment Terms (Severance/CoC Economics)
| Provision | CEO |
|---|---|
| Term end | 12/31/2026 |
| Min total target comp | $9,000,000 per full year |
| Severance (no CoC) | 2x base + 2x STI target (greater of current or 2023 target) + prorated STI target; COBRA net reimbursement; equity vesting per retirement eligibility; Outperformance RSUs per award . |
| CoC treatment | Equity double-trigger on Qualifying Termination; projected performance-based vesting at quarter-end prior to CoC . |
| Covenants | 18-month non-compete; non-solicit; adherence to clawback, ownership policies . |
| Tax gross-up | None; cutback to avoid 4999 excise if net after-tax greater . |
Investment Implications
- Strong pay-for-performance alignment: 89% of CEO target compensation is variable; LTI performance awards tied to BVPS growth with relative TSR modifier and one-year post-vesting hold, improving long-term alignment and reducing short-term sale pressure .
- Upcoming vesting/conversion windows: Significant conversion of 2021 BV RSUs on May 15, 2025 and 2022 PB RSUs vesting on May 15, 2025 could create transient insider selling pressure; monitor Form 4s and Rule 10b5-1 plans around these dates .
- Retention risk appears contained: Competitive severance design (2x base+bonus target; no single-trigger; robust non-compete/non-solicit) plus ownership guidelines and post-vesting holds reinforce retention and alignment .
- Governance strength offsets dual-role concerns: Separate Non-executive Chairman, majority independent Board, frequent executive sessions, and comprehensive policies (anti-hedging/pledging, clawbacks) support independent oversight of the CEO/director dual role .
- Shareholder sentiment constructive: 83% say-on-pay support in 2024; program refined with relative TSR modifier (starting 2023), maintaining external competitiveness while tightening strategic execution focus (elevated STI strategic weight) .