Brooke E. Carillo
About Brooke E. Carillo
Brooke E. Carillo, age 38, is Chief Financial Officer of Redwood Trust (RWT) since May 2021. She previously led Corporate Development & Strategy at Annaly Capital Management and worked in investment banking at Bank of America Merrill Lynch; she holds a B.S. in Economics from Duke University . Redwood’s 2024 performance metrics relevant to pay-for-performance included GAAP ROE of 4.1%, Non-GAAP EAD ROE of 6.4%, and book value TSR of 5.7%, with $0.67 per-share dividends paid; the dividend was raised to $0.18 in Q4 2024, +12.5% YoY . The compensation framework emphasizes ROE, EAD ROE, bvTSR, TSR, and rTSR in annual and long-term incentive design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Redwood Trust, Inc. | Chief Financial Officer | May 2021–present | Senior finance leadership for internally-managed mortgage REIT |
| Annaly Capital Management, Inc. | Head of Corporate Development and Strategy; led Corporate Strategy, Capital Markets, Investor Relations; Operating Committee member | 2010–2021 | Led capital markets and IR, shaping corporate strategy at large mortgage REIT |
| Bank of America Merrill Lynch | Investment Banking, Financial Institutions Group | Prior to 2010 | FI sector coverage and transaction experience |
External Roles
No public company directorships disclosed for Carillo; prior Operating Committee role at Annaly is internal (not a board) .
Fixed Compensation
Multi-year summary compensation for Brooke E. Carillo:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $700,000 | $800,000 | $825,000 |
| Non-Equity Incentive (Annual Bonus) ($) | $505,000 | $1,001,287 | $1,337,487 |
| Stock Awards (Grant Date Fair Value) ($) | $2,999,987 | $7,249,983 | $3,499,988 |
| All Other Compensation ($) | $42,000 | $48,000 | $84,500 |
| Total ($) | $4,246,987 | $9,099,270 | $5,746,975 |
Target bonus levels:
- 2022 target bonus $1,225,000 (175% of 2022 base salary) .
- 2024 target bonus $1,567,500 (target amount; equals ~190% of salary derived from $1,567,500/$825,000) .
- 2025 target bonus 205% of base salary; base salary increased to $860,000, target bonus $1,763,000 .
Performance Compensation
Annual Bonus Structure (2024)
| Component | Weighting | Target | Actual (Company Performance) | Payout Outcome |
|---|---|---|---|---|
| Adjusted ROE | 37.5% | 11.5% | GAAP ROE 4.1% (Committee uses Adjusted metrics; actual GAAP ROE shown) | Incorporated into Carillo’s total bonus $1,337,487 |
| Adjusted EAD ROE | 37.5% | 6.5% | Non-GAAP EAD ROE 6.4% | Incorporated into Carillo’s total bonus $1,337,487 |
| Individual Strategic/Operational Goals | 25% | Pre-established 2024 goals | Achievements summarized across Sequoia, CoreVest, portfolio actions | Incorporated into Carillo’s total bonus $1,337,487 |
Notes:
- Company-wide bonus design and targets shown; CEO’s realized split was disclosed; for Carillo only total bonus dollars are reported publicly .
2024 Year-End Long-Term Incentive Awards (Granted 12/19/2024)
| Instrument | Shares/Units Granted | Grant Date Fair Value ($) | Vesting/Performance Schedule |
|---|---|---|---|
| DSUs | 89,608 | $594,997 | Four-year vesting: 25% on 1/31/2026, then 6.25% quarterly; mandatory four-year holding; distribution in Dec 2028 |
| csRSUs (cash-settled) | 173,945 | $1,154,995 | Four-year vesting: 25% on 12/18/2025 and annually through 2028; cash-settled at each vest date |
| PSUs | 233,255 (target) | $1,749,996 | Three-year performance (1/1/2025–12/31/2027), vest on 1/1/2028; tranche structure below; deliver shares within 45 days after 4/1/2028 |
PSU performance mechanics:
- Tranche split: 66.7% bvTSR tranche; 33.3% rTSR tranche .
- bvTSR vesting table (three-year cumulative): 0% <12.5%; 50% at 12.5%; 100% at 25%; 250% at ≥37.5%; linear interpolation between points .
- rTSR vesting table (percentile vs Mortgage-Home Financing peers): 0% <27.5th; 50% at 27.5th; 100% at 55th; 250% at ≥82.5th; linear interpolation .
- Negative absolute TSR cap: if combined vesting >100% but absolute TSR negative over the period, vesting capped at 100% .
Equity Ownership & Alignment
| Ownership Metric | Value | Notes |
|---|---|---|
| Beneficial Ownership (shares) | 458,664 total; includes 56,772 common + 401,892 DSUs | SEC beneficial ownership includes DSUs that are vested or vest within 60 days |
| % of Class | <1% (asterisk denoted) | Based on 132,982,863 shares outstanding as of 3/27/2025 |
| Executive Stock Ownership Guideline | 3.0× current salary for “other executive officers” (CFO category) | Five years allowed to attain; includes common + vested/unvested DSUs; measured on acquisition/grant value |
| Compliance Status | Executives in compliance or within permitted period | Chart illustrating compliance included in proxy |
| Hedging/Pledging | Prohibited: short sales, options on RWT, hedging transactions, margin accounts, pledging RWT stock | Insider Trading Policy with blackout and pre-clearance |
Employment Terms
| Term | Detail |
|---|---|
| Role start date | CFO since May 2021 |
| Contract term | One-year term ending December 31, auto-renewal for one-year periods unless terminated by either party |
| Severance (No Change-of-Control) | Cash severance $3,960,000; accelerated vesting of DSUs/csDSUs/csRSUs valued at $6,990,694 (assumes $6.53 stock price 12/31/2024); benefits continuation $147,562; total ~$11,098,256 |
| Severance (After Change-of-Control with qualifying termination) | Cash severance $4,558,125; accelerated DSUs/csDSUs/csRSUs $6,990,694; accelerated PSUs $3,962,567; benefits $184,452; total ~$15,695,838; CoC cash severance capped at $5,000,000 |
| CoC vesting mechanics | If awards are not assumed/substituted, immediate vesting; if assumed/substituted, acceleration only on qualifying termination (double trigger); PSU acceleration determined by performance to CoC date and prorated |
| Death/Disability benefits | Cash $1,567,500; accelerated DSUs/csDSUs/csRSUs $6,990,694; total ~$8,558,194 |
| Clawback | Compensation clawback policy aligned with NYSE/Dodd-Frank; no excise tax gross-ups on CoC-related payments |
Compensation Structure Analysis
- Pay mix: Significant at-risk compensation via annual bonus and multi-year equity; 2024 stock awards $3.5M and bonus $1.34M vs salary $0.825M .
- Long-term alignment: 2024 PSUs emphasize bvTSR (66.7%) and rTSR (33.3%) with negative TSR cap; DSUs and csRSUs vest over four years with mandated holding for DSUs .
- Incentive rigor: Annual bonus weighted to Adjusted ROE and Adjusted EAD ROE with explicit targets (11.5% and 6.5%); maximum bonus caps set; Committee lowered max bonus multiples to 3.0x in recent design changes .
- Governance: No single-trigger CoC severance; hedging/pledging prohibited; robust stock ownership requirements; independent consultant (Semler Brossy) with no conflicts .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say-on-Pay support: 91.3% approval at May 2024 annual meeting .
- Outreach: Reached institutions holding 90% of institutional shares; directly engaged with holders of 46% of institutional shares; average Say-on-Pay support ~90% since inception excluding 2022 .
Investment Implications
- Alignment: Carillo’s substantial DSU holdings (401,892 units) and rigorous stock ownership requirements support alignment; pledging/hedging prohibitions reduce misalignment risks .
- Retention and overhang: Four-year DSU/csRSU schedules and three-year PSU performance create ongoing vesting; potential selling pressure could align with quarterly and annual vest dates (first csRSU vest 12/18/2025; DSU tranches begin 1/31/2026), though DSUs are subject to mandatory holding to 2028 .
- CoC economics: In a change‑of‑control, Carillo’s severance and accelerated equity value total ~$15.7M (capped cash component); equity awards can vest immediately if not assumed, otherwise require a double-trigger—mitigating windfall risk while preserving retention .
- Performance sensitivity: Annual bonus tied to return metrics; 2024 outcomes were below target given ROE/EAD ROE levels, indicating pay responsive to performance; PSU design with bvTSR and rTSR plus negative TSR cap further tightens pay-for-performance .