Karen Hammond
About Karen Hammond
Karen Hammond is an independent director of Two Harbors Investment Corp. (TWO), serving since July 2018 and currently chairs the Risk Oversight Committee while sitting on the Audit Committee . She is 68 years old and was initially appointed pursuant to CYS Investments’ contractual rights in the merger with TWO, bringing deep experience across investment management, fixed income and mortgage banking, private equity, corporate treasury and banking from senior roles at Fidelity and as CFO/Treasurer at Boston Five Cents Savings Bank .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| CYS Investments, Inc. | Director | Oct 2014 – Jul 2018 (until merger with TWO) | Served on board; appointment to TWO tied to merger rights |
| Devonshire Investors (Fidelity PE) | Managing Director | 2007 – 2013 | Led PE investments; broadened investment oversight experience |
| Fidelity Management & Research Co. | VP & Chief Administrative Officer, Equity Research; VP-Associate Group Leader, International Equities | 1993 – 2007 | Senior operating and investment roles; global equities leadership |
| Fidelity Investments Japan | Chief Operating Officer, Investments | 1993 – 2007 | COO responsibilities in Japan operations |
| FMR Corp. | Senior Vice President & Corporate Treasurer | 1993 – 2007 | Corporate treasury leadership |
| Fidelity Management & Research Co. | Senior Vice President, Investment Services | 1993 – 2007 | Oversaw investment services functions |
| Boston Five Cents Savings Bank | Treasurer & Chief Financial Officer | Prior to Fidelity | Financial leadership and banking experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Rhode Island State Investment Commission | Member | Current | State-level investment oversight |
| Rhode Island School of Design (RISD) | Trustee | Current | Governance of academic institution |
| RISD Museum | Board of Governors | Current | Cultural institution governance |
| Blue Cross Blue Shield of Rhode Island | Director | Current | Health insurer board role (non-public) |
| New York Life Insurance Group of Funds | Independent Board Member | Current | Mutual fund complex governance |
| Moses Brown School | Board Member | Prior | Community/education governance |
| Nellie Mae Education Foundation | Vice Chair | Prior | Non-profit leadership |
Board Governance
- Committee assignments: Audit Committee member; Chair of the Risk Oversight Committee (ROC) .
- Independence: Board affirmatively determined Hammond is independent under NYSE rules; all directors other than the CEO are independent .
- Audit expertise: Board determined Hammond qualifies as an SEC “audit committee financial expert” and is financially sophisticated .
- Attendance: In 2024, the Board met five times; Audit (6), Compensation (3), Nominating & Corporate Governance (2), Risk Oversight (1). Each director attended at least 75% of aggregate Board and committee meetings; all then-current directors attended the May 2024 annual meeting .
- Executive sessions: Independent directors meet regularly in executive session without management .
- Anti-hedging/pledging: Directors are prohibited from hedging or pledging company stock .
- Director stock ownership guideline: Directors may not sell if post-sale market value of holdings would be below $300,000; up to 40% of vesting shares can be sold for tax purposes .
- Related-party transactions: None requiring disclosure in 2024; Audit Committee reviews related-party policies .
- Compensation interlocks: None; no insider participation conflicts disclosed .
Fixed Compensation
| Component | Amount/Terms | Vesting/Timing | Notes |
|---|---|---|---|
| Annual director retainer (independent) | $216,000 total; $98,000 cash + $118,000 in RSUs (2024 term) | Cash paid quarterly; RSUs fully vest at next annual meeting, prorated if service ends early; full vest on death/disability | RSU count set by grant-date closing price; granted under 2021 Plan |
| Committee chair fee (ROC) | $15,000 cash (for ROC Chair) | Paid over term | Audit Chair $20,000; Board Chair additional $150,000 (not applicable to Hammond) |
| Hammond 2024 actual cash | $105,500 | Paid during 2024 term | Includes base and applicable chair fee per company schedule |
| Hammond 2024 RSU grant value | $117,988 (grant-date fair value) | Vests at 2025 annual meeting per director RSU terms | Valued using $12.96 closing price on May 15, 2024 |
| Total 2024 director compensation (Hammond) | $223,488 | N/A | Summary of cash + stock awards per proxy table |
Performance Compensation
| Equity Award Type | Grant Date | Grant Value | Vesting | Performance Metrics |
|---|---|---|---|---|
| Independent director RSUs (annual) | May 15, 2024 | $117,988 (fair value; price $12.96) | Fully vests at next annual meeting; prorated on early termination; full vest on death/disability | None; time-based vesting only (no performance conditions) |
Note: Director RSUs are time-vested; performance-based awards (PSUs) are used for executives, not independent directors .
Other Directorships & Interlocks
- Current public company boards: None disclosed; prior public board CYS Investments (ended at merger) .
- Committee interlocks: None; no reciprocal insider participation noted .
- Potential interlocks: External roles include RI State Investment Commission and Blue Cross Blue Shield RI; no related-party transactions disclosed for 2024 .
Expertise & Qualifications
- Recognized audit committee financial expert and financially sophisticated per SEC/NYSE criteria .
- Multi-decade leadership across investment management (Fidelity), private equity (Devonshire Investors), and banking/treasury (Boston Five Cents), aligned with TWO’s mortgage/servicing risk profile .
Equity Ownership
| Holder | Shares Beneficially Owned | RSUs scheduled to vest (≤60 days of 3/19/2025) | Ownership % of Common |
|---|---|---|---|
| Karen Hammond | 47,791 | 9,104 | Approx. 0.046% (47,791 / 104,022,948 outstanding) |
- Directors and NEOs are prohibited from hedging or pledging company stock; directors must maintain minimum $300,000 market value holdings before selling (subject to limited tax sales on vesting) .
- All directors listed with “*” indicating <1.0% of class; Hammond falls below 1% .
Insider Trades
| Date (Filed) | Transaction Date | Form | Security | Description |
|---|---|---|---|---|
| May 16, 2025 | May 14, 2025 | Form 4 | RSUs | RSUs granted under TWO’s 2021 Equity Incentive Plan to independent director; annual director RSUs vest at next annual meeting per plan terms |
Governance Assessment
- Strengths: Independent status; chairing Risk Oversight Committee central to TWO’s MSR/RMBS risk profile; audit financial expert designation; strong anti-hedging/pledging and clawback policies; robust director ownership guidelines; no related-party transactions; solid attendance/engagement; high say-on-pay support (95.6% in 2024), indicating alignment with investor expectations .
- Alignment: Annual director equity paid in RSUs with clear vesting, plus modest chair cash fees; Hammond’s beneficial holdings and ongoing RSU vesting support skin-in-the-game, though ownership remains <1% of shares outstanding (typical for REIT directors) .
- RED FLAGS: None disclosed—no related-party transactions, no hedging/pledging, attendance at or above threshold; compensation structure for directors is standard (cash + time-vested RSUs) without performance-linked director equity .