James A. Stern
About James A. Stern
Independent director of TWO since July 2018; age 74. Former Chairman and CEO of The Cypress Group and long-time Lehman Brothers executive (joined 1974; MD in 1982; joined management committee in 1988; Co‑Head of Investment Banking; Head of Merchant Banking). Currently serves on TWO’s Compensation Committee and Risk Oversight Committee. Background centers on investments, capital markets, and public company directorships, positioning him as a financially sophisticated, governance-focused director.
Past Roles
| Organization | Role | Tenure | Committees / Impact |
|---|---|---|---|
| The Cypress Group | Chairman & CEO | Not disclosed | Led the firm’s investing activities; deep PE/investing experience |
| Lehman Brothers | MD (1982), Management Committee (1988), Co‑Head of Investment Banking, Head of Merchant Banking | Joined 1974; senior leadership through late 1980s–1990s | Capital markets and transaction leadership; merchant banking oversight |
| CYS Investments, Inc. | Director | 2006–2018 (until merger with TWO) | Appointed to TWO board pursuant to CYS merger rights |
| Tufts University | Trustee; Chairman of Board of Trustees | Trustee 1982–2013; Chairman 2003–2013 | Governance/oversight experience at major academic institution |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Merchants National Properties, Inc. | Director | Since 2012 | Current directorship |
| OHA Investment Corp. | Director | 2014–2019 | Prior public directorship |
| Affinia Group; Infinity Broadcasting; WESCO International, Inc.; Lear Corporation; Cinemark USA, Inc. | Director | Not disclosed | Prior corporate boards |
| WNET; Jewish Museum; Cancer Research Foundation | Board member | Not disclosed | Non-profit boards |
Board Governance
- Independence: Board affirmed Stern is independent under NYSE rules. All committees are fully independent. Independent chair structure in place (Chair: Stephen G. Kasnet).
- Committees: Compensation Committee member; Risk Oversight Committee member. Compensation Committee signatory (with E. Spencer Abraham, Chair; and James J. Bender).
- Attendance & engagement: Board met 5x in 2024; Audit 6x; Compensation 3x; Nominating & Corporate Governance 2x; Risk Oversight 1x. Each director attended at least 75% of aggregate Board/committee meetings in 2024; all then‑current directors attended the May 2024 annual meeting.
- Executive sessions: Independent directors meet regularly without management.
- Related party oversight: Audit Committee reviews related party transactions; none required disclosure for 2024. No compensation committee interlocks or insider participation.
Fixed Compensation (Director)
| Year | Fees Paid in Cash ($) | Stock Awards ($) | Total ($) | Notes |
|---|---|---|---|---|
| 2024 | 98,000 | 117,988 | 215,988 | Standard independent director package (no chair fees) |
Key features:
- Standard annual package for independent directors: $98,000 cash + $118,000 in RSUs (granted under 2021 Plan), vesting fully at the next annual meeting; prorated on early departure (full vesting upon death/disability). Change‑of‑control: double‑trigger vesting if service ends within 24 months post‑CoC or immediate vesting if awards not assumed.
- Additional chair retainers paid in cash (Audit Chair $20k; Compensation/Risk/NCGC Chairs $15k); independent Board Chair receives extra $150k (half cash/half RSUs). Stern is not a chair.
Performance Compensation (Director)
| Component | Performance Metric(s) | Weighting | Payout Curve | Status for Stern |
|---|---|---|---|---|
| Director RSUs | None (time‑based vesting to next annual meeting) | N/A | N/A | Applies; no performance linkage |
Note: TWO does not grant stock options to directors; RSUs are time‑based. Clawback policy exists for executive incentive compensation; governance framework includes strong pay practices.
Other Directorships & Interlocks
| Company | Role | Overlap/Interlock Risk to TWO | Evidence |
|---|---|---|---|
| Merchants National Properties, Inc. | Director | No related party transactions disclosed with TWO in 2024 | |
| Prior: OHA Investment Corp.; Affinia; Infinity Broadcasting; WESCO; Lear; Cinemark | Former Director | No related party transactions disclosed with TWO in 2024 |
Expertise & Qualifications
- Investments and capital markets: PE leadership (Cypress Group); merchant banking/investment banking leadership at Lehman.
- Public board experience: Multiple prior public company boards; current director at Merchants National Properties.
- Mortgage/REIT context: Served on CYS board through merger; relevant sector familiarity.
- Governance: Compensation Committee member; involved in pay governance and oversight; independent.
Equity Ownership
| Item | Detail |
|---|---|
| Beneficially owned common shares | 53,537 shares as of March 19, 2025; less than 1% of class (104,022,948 shares outstanding) |
| RSUs scheduled to vest (within 60 days of 3/19/25) | 9,104 RSUs included in beneficial ownership; RSUs not entitled to vote until vested |
| Hedging/pledging | Prohibited for directors under Insider Trading Policy and governance policies |
| Director ownership guideline | Directors may not sell if post‑sale holdings < $300,000 market value; up to 40% of vested shares may be sold to cover taxes |
| Record date context | Beneficial ownership table as of March 19, 2025 |
Governance Assessment
Strengths
- Independent director with deep capital markets and PE experience; sits on Compensation and Risk Oversight Committees, supporting board effectiveness in key oversight areas.
- Strong governance framework: independent chair; executive sessions; anti‑hedging/pledging; director ownership guardrails; clawback policy; high 2024 say‑on‑pay support (~95.6%).
- Engagement and attendance: met the ≥75% meeting attendance requirement; all directors attended the 2024 annual meeting.
- Conflicts: No related party transactions disclosed for 2024; no compensation committee interlocks.
Watch items / potential red flags
- Appointed to TWO via CYS merger rights (not inherently negative; monitor for continuing independence and refreshment dynamics).
- Time commitments from multiple outside roles are not detailed; continue to monitor bandwidth and committee workload as a Compensation Committee member.
Overall implication: Stern’s profile and committee assignments align with investor expectations for independent oversight in compensation and risk, with no disclosed conflicts and solid attendance, supporting investor confidence in TWO’s board governance.