Barry S. Sternlicht
About Barry S. Sternlicht
Barry S. Sternlicht, age 64, has served as Chairman and Chief Executive Officer of Starwood Property Trust, Inc. (STWD) since its inception in 2009 and chairs the Board’s Investment Committee . He holds a BA, magna cum laude, from Brown University and an MBA with distinction from Harvard Business School . STWD’s pay-versus-performance disclosure shows five-year total shareholder return rising from 88.36 in 2020 to 125.07 in 2024, with Net Income of $359.9 million and Distributable Earnings of $675.0 million in 2024, demonstrating resilient value creation through his tenure . He receives no direct compensation from STWD or its external manager for his CEO/Chairman service; alignment is primarily via significant equity ownership and influence over the external manager’s economics tied to Distributable Earnings .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Starwood Property Trust, Inc. | Chairman & CEO | 2009–present | Led growth into largest U.S. commercial mortgage REIT by market cap; multi-cylinder platform and $100B+ capital deployed |
| Starwood Capital Group | Chairman & CEO | 1991–present | Built ~$115B AUM global real estate investment platform; structured $250B+ transactions |
| Starwood Hotels & Resorts Worldwide, Inc. | Founder, Chairman & CEO | 1995–2005 | Created leading hospitality operator; significant brand and asset value creation |
| SH Group (Baccarat, 1 Hotels, Treehouse) | Founder, Chairman & CEO | Present | Developed lifestyle and luxury hotel brands; branding and operations synergies with real assets |
| Starwood Real Estate Income Trust, Inc. (SREIT) | Chairman of the Board | 2017–present | Oversight of non-listed REIT; related-party co-investments/transactions with STWD |
| Starwood Credit Real Estate Income Trust | Executive Chairman | Present | Leadership in credit-focused real estate investment vehicle |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Estée Lauder Companies | Director | Current | Public board service; governance and consumer sector insight |
| Jaws Mustang Acquisition Corporation (SPAC) | Founder & Chairman | Current | SPAC sponsor interlocks with certain STWD directors; minor sponsor interests noted |
| LOG Commercial Properties e Participacoes SA | Director | Current | Public board in Brazil; international real estate exposure |
| Prior public boards (selected) | Director/Chair | Various | Includes Invitation Homes, Restoration Hardware, TRI Pointe Group (Chairman), RH, multiple SPACs; broad governance experience |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | — | — | — |
| Bonus ($) | — | — | — |
| Stock Awards ($) | — | — | — |
| Director Fees ($) | Executive directors receive none | Executive directors receive none | Executive directors receive none |
Sternlicht does not receive direct compensation from STWD or the Manager for his CEO/Chairman role; STWD does not reimburse affiliates for compensation paid to him .
Performance Compensation
| Component | Metric | Target/Threshold | Actual/Payout | Vesting/Settlement | Notes |
|---|---|---|---|---|---|
| Manager Incentive Fee | Core Earnings/Distributable Earnings | 8% threshold; 20% participation above hurdle | $35.3M incurred in 2024; half paid in stock, half cash; $22.6M paid in 2024 and $12.7M paid Feb 2025 (half in stock) | Stock portion issued each quarter per formula; remaining cash | Sternlicht, as controlling equityholder of the Manager’s parent, has economic interest in these fees |
| Manager RSUs | RSU grants to Manager | Plan-based | 1.3M RSUs granted Mar 4, 2024; 1.35M RSUs granted Mar 6, 2025; distribution equivalents paid | 345,833 shares issuable upon RSU vest on Mar 31, 2025 | Vests per award agreements; settled in common stock; receives distribution equivalents |
| CEO Equity Awards | N/A | N/A | None | N/A | STWD has granted equity to other NEOs, not Sternlicht |
Key performance measures used by the Compensation Committee when determining NEO payouts include Net Income, Distributable Earnings, stock performance, investment activity, and completed transactions .
Equity Ownership & Alignment
| Item | Details |
|---|---|
| Total beneficial ownership | 17,012,928 shares; includes 2,837,150 held by entities controlled by Sternlicht; equals 5.0% of outstanding |
| Upcoming issuance (manager RSU vest) | 345,833 shares issuable upon vesting on March 31, 2025 of RSUs granted to the Manager |
| Ownership guidelines | Director ownership guideline equals ≥3x annual Board cash retainer (applies to non-executive directors) ; executive directors receive no director compensation |
| Hedging/pledging | Anti-hedging policy restricts derivative transactions by insiders; no pledging disclosure found |
| Insider filings | One Sternlicht Form 4 was filed late on January 5, 2024 |
Employment Terms
| Provision | Sternlicht |
|---|---|
| Employment start date | CEO/Chairman since 2009 |
| Employment agreement | None; STWD does not have employment or severance agreements with named executive officers |
| Severance | Not applicable; equity acceleration provisions apply to NEO equity awards (Sternlicht has no STWD equity awards) |
| Change-of-control | Equity awards (for NEOs) accelerate under specified cases; Change in Control excludes transactions effected with the Manager/affiliates or Board membership changes |
| Non-compete/solicit | Not disclosed |
Board Governance
- Roles: Chairman & CEO; Chair of the Investment Committee; not independent .
- Board leadership: Combined CEO/Chair structure reviewed annually; mitigated by Lead Independent Director (Richard D. Bronson) with defined duties .
- Committees: Audit, Compensation, Nominating & Corporate Governance are fully independent; Investment Committee chaired by Sternlicht .
- Board attendance: Board met four times in 2024; each director attended at least 75% of meetings and attended the 2024 annual meeting .
- Executive sessions: Regular sessions of non-executive and independent directors; presided by Lead Independent Director .
- Outside boards: Sternlicht serves on three outside public company boards; one is a SPAC; Board satisfied with his dedication and availability .
Director Compensation (for Sternlicht as a director)
- Executive directors receive no Board compensation; non-executive directors receive cash retainers and annual restricted stock grants with one-year vesting .
Related Party Transactions and Interlocks
- Management Agreement: Externalized model; base fee equals 1.5% of shareholders’ equity; incentive fee formula based on Core Earnings; half of incentive paid in stock; $89.8M base fees incurred and $35.3M incentive fees incurred in 2024; reimbursements $5.6M .
- Office lease: Miami Beach office leased from entity controlled by Sternlicht; 64,424 sq ft; initial term 15 years; base rate $52/sq ft with 3% annual increases; $6.5M paid in 2024; approved by independent directors after third-party review .
- Loans to affiliates: Modifications to a loan where Sternlicht and another non-independent director own minority equity interests in the borrower; rate reduction, deferrals, and extension with subsequent repayment activity disclosed .
- SREIT interlocks: STWD acquired loan participation from SREIT (affiliated with Starwood Capital Group); Sternlicht chairs SREIT’s board .
- SPAC sponsor relationships: Certain independent directors had small sponsor interests in Jaws Mustang; Sternlicht is SPAC Founder/Chairman .
- ZMC fund ties: Sternlicht invested in ZMC-sponsored funds; Zelnick is founder/managing partner; independence assessed .
Pay Versus Performance (Company-level context during Sternlicht’s tenure)
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Total Shareholder Return (Base $100) | 88.36 | 120.03 | 99.48 | 125.95 | 125.07 |
| Peer Group TSR (FNMR-FTX) | 81.38 | 94.05 | 69.27 | 79.79 | 79.96 |
| Net Income ($000) | 331,689 | 447,739 | 871,475 | 339,213 | 359,933 |
| Distributable Earnings ($000) | 585,299 | 794,116 | 726,297 | 662,566 | 674,961 |
Compensation Peer Group (used for benchmarking other NEOs)
- Mortgage REITs: AGNC Investment Corp.; Annaly Capital Management, Inc.; Apollo Commercial Real Estate Finance, Inc.; Arbor Realty Trust, Inc.; Blackstone Mortgage Trust, Inc.; Chimera Investment Corporation; Ellington Financial Inc.; KKR Real Estate Finance, Inc.; Ladder Capital Corp; MFA Financial, Inc.; New York Mortgage Trust, Inc.; Redwood Trust, Inc.; Rithm Capital Corp.; TPG RE Finance Trust, Inc. .
- Other REITs/Real Estate: DigitalBridge Group, Inc.; Realty Income Corporation; Walker & Dunlop, Inc.; W. P. Carey Inc. .
Risk Indicators & Red Flags
- Dual role (CEO + Chairman): Not independent; mitigated by Lead Independent Director structure .
- Externalized manager economics: Incentive fee directly linked to Distributable Earnings could bias toward income maximization; Compensation Committee evaluates risk factors when granting equity to the Manager .
- Recurring related party transactions: Lease with entity controlled by Sternlicht; loan dealings with affiliated borrowers; interlocks with SREIT and SPACs .
- Share issuance overhang: Half of quarterly incentive fee paid in common stock; RSU vesting to Manager creates periodic supply (e.g., 345,833 shares vesting March 31, 2025) .
- Late insider filing: One Form 4 filed late (Jan 5, 2024) .
Investment Implications
- Alignment: Sternlicht’s 5.0% beneficial ownership ties him to shareholder outcomes; no direct salary/bonus from STWD reduces cash extraction risk, but strong economic linkage to Manager fees introduces potential performance-metric bias toward Distributable Earnings .
- Trading signals: Expect periodic stock issuance from Manager incentive fee settlements and RSU vesting to the Manager (e.g., March 31, 2025 vest), which can create short-term supply; monitor quarter-end incentive fee accruals and subsequent stock issuances .
- Governance/related party risk: Dual role and material related party transactions (lease, affiliate loan modifications, SREIT participation) warrant a governance discount until mitigated; independent director oversight and disclosed practices provide some safeguards .
- Performance focus: Company metrics prioritized by the Compensation Committee—Net Income, Distributable Earnings, stock performance, investment activity—align with income-oriented REIT investors; TSR outperformance vs FNMR-FTX peers in 2023–2024 supports confidence, but 2022 volatility underscores cycle sensitivity .