Leonard M. Tannenbaum
About Leonard M. Tannenbaum
Leonard M. Tannenbaum, age 53, is Executive Chairman of Sunrise Realty Trust, Inc. (SUNS) and has served as a director since February 2024; he became Executive Chairman at the July 2024 spin-off and leads the Manager’s Investment Committee overseeing origination, underwriting, risk analysis and approvals . He holds a B.S. and MBA in Finance from The Wharton School via submatriculation, is a CFA charterholder, and serves on The Wharton Graduate Executive Board . SUNS is externally managed; executive compensation is primarily via the Manager with SUNS awarding equity under the 2024 Stock Incentive Plan—no explicit TSR, revenue, or EBITDA targets are disclosed for his awards . Mr. Tannenbaum is married to SUNS’ President, Robyn Tannenbaum .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Advanced Flower Capital Inc. (AFC Gamma, Inc.) | Founder; CEO (Jul 2020–Sep 2023); CIO (Nov 2023–Oct 2024); Chairman since Oct 2024 | 2020–present (various) | Led credit investing platform; senior leadership and capital markets execution; ongoing board leadership . |
| Fifth Street Asset Management, Inc. | Founder & CEO | 1998–2017 | Managed ~$5B across vehicles/BDCs; issued public equity/private capital/debt; sold assets to Oaktree in 2017; entity dissolved in 2022 . |
| Tannenbaum Capital Group | Founder | 2017–present | Affiliated investment managers allocating across credit and commercial real estate strategies . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Advanced Flower Capital Inc. (AFC) | Director; Chairman since Oct 2024 | 2024–present | Board oversight; finance/credit expertise . |
| Southern Realty Trust, Inc. (SRT) | Director | 2023–present | Co-investor across multiple SUNS deals; CRE lending expertise . |
| Wharton Graduate Executive Board | Member | n/a | Advisory and alumni leadership for Wharton . |
Fixed Compensation
SUNS is externally managed; executives are compensated by the Manager/affiliates, and SUNS may grant equity under its 2024 Stock Incentive Plan. SUNS did not reimburse the Manager for Mr. Tannenbaum’s compensation in 2024; he takes no salary from SUNS .
| Executive | Year | Salary ($) | Bonus ($) | Stock Awards ($) |
|---|---|---|---|---|
| Leonard M. Tannenbaum (Executive Chairman) | 2024 | - | - | 800,007 |
Notes: Stock award values reflect grant-date fair value under ASC 718 .
Performance Compensation
No performance-based metrics (e.g., revenue, EBITDA, TSR) are disclosed for Mr. Tannenbaum’s awards; equity grants are time-based restricted stock with 3-year vesting post spin-off and annual grants .
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Time-based restricted stock | n/a | n/a | n/a | n/a | 33% each year over 3 years, various grant dates (Jan 3, 2023; Jan 2, 2024 via spin-off; Dec 19, 2024 annual grant) subject to early termination/adjustments per grant agreements . |
| Options/PSUs | 0% | n/a | n/a | n/a | No options or PSUs disclosed . |
Clawback: SUNS adopted a clawback policy compliant with SEC/Nasdaq, requiring recovery of erroneously awarded incentive comp upon restatements (3-year lookback) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 3,191,461 shares; 23.8% of outstanding (13,421,494 as of Apr 1, 2025) . |
| Sole voting/dispositive power | 2,712,322 shares, including 91,238 unvested restricted shares and 1,000 shares in a UTMA account for his son . |
| Shared voting/dispositive power | 479,139 shares: 420,181 via Tannenbaum Family Foundation (he is President; disclaims beneficial ownership except pecuniary interest) and 58,958 via Tannenbaum Family 2012 Trust (disclaims except pecuniary interest) . |
| Spousal holdings (not included) | Robyn Tannenbaum beneficially owns 34,132 shares; excluded from Leonard’s totals . |
| Hedging/Pledging | Prohibited for insiders; margining/pledging Company securities barred . |
| Ownership guidelines | Not disclosed . |
Outstanding equity awards (as of Dec 31, 2024):
| Award Type | Unvested Shares | Market Value ($) | Vesting Schedule |
|---|---|---|---|
| Restricted stock (Dec 19, 2024 grant) | 60,837 | 856,585 | 33% on each anniversary of Dec 19, 2024 (3 years), subject to early termination/adjustments . |
| Restricted stock (spin-off related; Jan 2, 2024) | 37,037 | 521,481 | 33% on each anniversary of Jan 2, 2024 (3 years) . |
| Restricted stock (spin-off related; Jan 3, 2023) | 11,418 | 160,765 | 33% on each anniversary of Jan 3, 2023 (3 years) . |
| Options | None disclosed | n/a | n/a . |
Other alignment signals:
- Purchased 1,000,000 shares in SUNS’ January 2025 offering at $12.00 per share .
- The Manager agreed to fee waivers tied to January 2025 offering proceeds and an additional $1.0 million, supporting capital deployment alignment .
Employment Terms
| Topic | Details |
|---|---|
| Employment status | SUNS has no direct employees; executives are employed by the Manager/affiliates under the Management Agreement; SUNS awards equity under the 2024 Stock Incentive Plan . |
| Reimbursement | SUNS reimburses the Manager/affiliates for allocable compensation of certain personnel; in 2024, the Manager did not seek reimbursement for Mr. Tannenbaum’s compensation . |
| Management fees | Base Management Fee = 0.375% of “Equity” quarterly in arrears (subject to adjustments and offset for certain Outside Fees); Incentive Fees based on “Core Earnings” as defined . |
| 2024 fees | ~$0.8 million Base Management Fee incurred; no Incentive Compensation in 2024; ~$1.1 million reimbursed for out-of-pocket Manager costs . |
| Termination fee (Manager) | If Management Agreement terminates under certain circumstances, termination fee = 3x (annual Base Management Fee + annual Incentive Compensation) from the prior 12 months . |
| Change-of-control | Individual executive severance/change-of-control terms not disclosed; Manager termination economics apply at the agreement level . |
| Non-compete / non-solicit | Not disclosed . |
| Clawback | Company clawback policy compliant with SEC/Nasdaq rules . |
Board Governance
- Role: Executive Chairman (non-independent); serves alongside a Lead Independent Director (Alexander C. Frank) .
- Independence: Board majority independent; Mr. Tannenbaum is not independent due to executive role .
- Committees: All-independent committees; Mr. Tannenbaum does not serve on committees. Chairs: Audit & Valuation—Alexander Frank; Compensation—James Fagan; Nominating & Corporate Governance—Jodi Hanson Bond .
- Attendance: Since July 2024, Board met 8 times; Audit & Valuation 9; Compensation 1; Nominating & Governance 1; each director attended ≥85% of meetings in 2024 .
- Director pay: Executive-officer directors receive no director compensation; independent director retainers/fees disclosed separately .
Committee chair table:
| Committee | Chair | Members |
|---|---|---|
| Audit & Valuation | Alexander Frank | Frank, Bond, Fagan; Frank is “financial expert” . |
| Compensation | James Fagan | Frank, Bond, Fagan . |
| Nominating & Corporate Governance | Jodi Hanson Bond | Frank, Bond, Fagan . |
Dual-role implications:
- Executive Chairman plus significant ownership and Manager control (Manager beneficially owned 63.1% by Mr. Tannenbaum, with additional family interests) may raise independence concerns; mitigated via Lead Independent Director and independent committees overseeing related-party transactions and Manager fees .
Director Compensation
If a director is also an executive officer, SUNS does not pay any director compensation to such person; independent director retainers were paid in 2024 (e.g., Lead Independent Director and committee chair adders), but none to Mr. Tannenbaum as an executive director .
Related Party Transactions
- Manager ownership: Sunrise Manager LLC beneficially owned 63.1% by Mr. Tannenbaum; 8.1% by Mrs. Tannenbaum; 9.3% by other Tannenbaum family/trusts; 7.0% by CEO Brian Sedrish .
- Administrative & Services Agreements: TCG Services LLC and SRT Group LLC—affiliated entities providing personnel and administrative support .
- SRTF Revolving Credit Facility: $75.0M commitment, 8.00% interest, 1.00% annual fee starting Jan 1, 2026; SRT Finance LLC is indirectly owned by Leonard and Robyn Tannenbaum; no amounts outstanding as of Apr 1, 2025 .
- Co-investments: Multiple loans with SRT and affiliates in 2024–2025 across Texas, Florida, and Louisiana; Mr. Tannenbaum holds ~23.8% of SUNS and ~25.6% of SRT as of Apr 1, 2025 .
- January 2025 offering: Mr. Tannenbaum purchased 1,000,000 shares at $12.00 per share .
- Agent services: SRT Agent LLC (affiliated with Leonard/Robyn Tannenbaum and Brian Sedrish) serves as administrative/collateral agent; SUNS pays no consideration to SRT Agent; certain borrower-paid fees are de minimis .
- Oversight: Audit & Valuation Committee reviews and approves related party transactions per policy; chair has delegated authority for urgent approvals .
Risk Indicators & Red Flags
- Dual-role and external management: Executive Chairman is non-independent; Manager is controlled by Mr. Tannenbaum; extensive related-party transactions and co-investments necessitate robust committee oversight .
- Family ties: Spouse is SUNS President; family trusts/foundation hold stock; disclosed with disclaimed beneficial ownership; governance controls in place but residual conflict risk remains .
- Hedging/pledging: Prohibited, reducing misalignment risk .
- Option repricing/tax gross-ups: Not disclosed; no options outstanding .
- Say-on-pay: Not disclosed; SUNS did not include an advisory vote in this proxy .
Compensation Committee Analysis
- Composition: Fully independent (Frank, Bond, Fagan); Chair: Fagan .
- Consultant usage: Committee has sole authority to retain/terminate compensation consultants and approve fees; consultant names not disclosed .
- Scope: Oversees executive/director compensation, Manager expense reimbursements, and equity plan administration .
Equity Award Vesting Schedule (Detail)
| Grant | Shares | Vesting Detail |
|---|---|---|
| Dec 19, 2024 restricted stock | 60,837 | 33% on each of the first, second, and third anniversaries of Dec 19, 2024; subject to early termination/adjustments per grant agreement . |
| Jan 2, 2024 restricted stock (spin-off related) | 37,037 | 33% on each of the first, second, and third anniversaries of Jan 2, 2024; subject to early termination/adjustments . |
| Jan 3, 2023 restricted stock (spin-off related) | 11,418 | 33% on each of the first, second, and third anniversaries of Jan 3, 2023; subject to early termination/adjustments . |
Investment Implications
- Alignment: High insider ownership (23.8%) and January 2025 share purchase signal alignment; hedging/pledging prohibitions reduce adverse incentive risks .
- Governance: Executive Chairman role, spouse as President, and Manager control create structural conflicts; independent committees and a Lead Independent Director provide oversight, but related-party financing/co-investments remain a key diligence area for investors .
- Compensation risk: No disclosed performance hurdles for equity awards; time-based vesting implies less direct pay-for-performance linkage; monitoring future equity grants and any introduction of performance-based metrics is warranted .
- Economic exposure: Manager fee structure and termination fee mechanics influence company-level economics in corporate events; investors should consider external management terms when assessing valuation and change-of-control scenarios .