Stephen G. Kasnet

About Stephen G. Kasnet

Stephen G. Kasnet, age 79, is the independent Chairman of the Board at Two Harbors Investment Corp. (TWO) and has served as a director since the October 2009 merger with Capitol Acquisition Corp. . He is designated independent under NYSE standards, serves on the Audit Committee and Risk Oversight Committee, and has been determined by the Board to qualify as an “audit committee financial expert,” reflecting deep finance and accounting experience . In 2024, the Board met five times and each director (including Kasnet) attended at least 75% of Board and committee meetings; directors also attended the May 2024 annual meeting .

Past Roles

External Roles

Board Governance

• Independence: Independent Chairman; Board majority independent; all committees composed solely of independent directors .
• Committees: Audit; Risk Oversight; designated audit committee financial expert; Board oversees cybersecurity with semi-annual briefings to directors .
• Meetings/attendance: Board (5), Audit (6), Compensation (3), Nominating & Governance (2), Risk Oversight (1) in 2024; each director attended ≥75% and attended the virtual annual meeting .
• Executive sessions: Independent directors meet regularly without management .

Fixed Compensation

• Structure (independent directors, 2024):
  • Annual fee: $216,000 ($98,000 cash; $118,000 RSUs) .
  • Independent Chair additional fee: $150,000 (50% cash; 50% RSUs) .
  • Committee chair fees: Audit $20,000; Compensation/Risk/Nominating $15,000 (cash) .
  • RSUs granted under the 2021 Plan; number determined at grant using NYSE closing price; vest fully at the next annual meeting; pro-rata vesting on mid-term departure; accelerated vesting on death/disability; change-of-control: double-trigger acceleration if terminated within 24 months (or pre-COC if award not assumed) .

• Grant mechanics: 2024 independent director RSUs granted May 15, 2024; grant date fair value based on $12.96 closing price (determines units); vest at the May 2025 annual meeting .

Performance Compensation

• Directors do not receive performance-based (PSU) or option awards; equity is time-based RSUs tied to service. No bonus, options, or performance conditions for directors; no tax gross-ups; anti-hedging/pledging applies .

Other Directorships & Interlocks

• Related-party transactions: None disclosed for 2024; Audit Committee oversees related party reviews .

Expertise & Qualifications

• Financial sophistication; designated “audit committee financial expert” by the Board .
• Extensive public company board leadership across REITs and financial services; current Chairman at GPMT .
• Risk oversight and audit committee experience aligned with TWO’s MSR/RMBS risk profile .

Equity Ownership

Governance Assessment

• Positives:

  • Independent Chair with audit committee financial expert designation; strong board independence and committee-only independence .
  • Robust director equity alignment via RSUs and stock ownership guidelines; anti-hedging/pledging restrictions .
  • Board and committee activity with documented meeting cadence; director attendance ≥75% .
  • No related-party transactions reported for 2024; Audit Committee oversight .
  • High investor support for pay practices (2024 say-on-pay approval ≈95.6%) .

• Watch items / RED FLAGS:

  • Shared directorship with Granite Point Mortgage Trust (Chair at GPMT while Chair at TWO) can create perceived information-flow interlocks; monitor for any transactions or overlapping strategic decisions (none disclosed for 2024) .
  • Elevated Chair-specific equity (transitional RSUs of $200,000 annually through 2024) increased total director equity; transitional program ended after 2024 but was a non-standard add-on—investors should monitor any future extras beyond disclosed fee structure .

• Compensation structure signals:

  • Director pay is a balanced cash/RSU mix; no options or PSUs; change-of-control protections are double-trigger, which is shareholder-friendly versus single-trigger .
  • 2024 RSU grants determined via grant date market price; one-year vesting aligns with annual service and simplifies forfeiture/transition mechanics .

• Board effectiveness:

  • Committee placements (Audit, Risk Oversight) leverage Kasnet’s finance background in areas material to TWO’s MSR/RMBS investment and servicing model; Board oversees cybersecurity via structured briefings .

• Shareholder alignment:

  • Ownership present in common and preferred; RSU holdings vesting imminently; restrictive policies deter misalignment behaviors (hedging/pledging) .