Michael Chiao
About Michael W. Chiao
Independent director since April 2021; Executive Vice President and portfolio manager at PIMCO focused on residential loan investments; prior roles at Fortress Investment Group (non-agency RMBS and structured products), PIMCO (portfolio management associate), and Countrywide Capital Markets (whole loan trading/securitization). He has 18 years of investment experience and holds an undergraduate degree from California State Polytechnic University, Pomona . The Board affirmed his independence after reviewing relationships with major shareholders, including his officer role at PIMCO, determining they were not material under NYSE rules .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Pacific Investment Management Company LLC (PIMCO) | Executive Vice President, Portfolio Manager (residential loan investments) | 2017–present | Structured credit/residential loans; large institutional investor oversight |
| Fortress Investment Group | Investment professional (non-agency RMBS, structured products) | Prior to 2017 | Structured products investing |
| PIMCO | Portfolio Management Associate | Earlier career | Portfolio support and analysis |
| Countrywide Capital Markets | Analyst (whole loan trading and securitization) | Career start | Securitization/whole loan trading |
External Roles
| Organization | Role | Public Company Board? | Notes |
|---|---|---|---|
| PIMCO | Executive Vice President & Portfolio Manager | No other public boards disclosed | Officer at PIMCO, a major VEL shareholder (33.1% including warrants) |
Board Governance
- Committee assignments: Member, Compensation Committee; not a chair .
- Independence: Board affirmatively determined all non-employee nominees (including Chiao) are independent; considered PIMCO/Snow Phipps relationships and found not material under NYSE and Rule 10A-3 standards .
- Attendance and engagement: Board met 7 times in 2024; Compensation Committee met 2 times; all directors attended at least 75% of Board and committee meetings .
- Board leadership: Board Chair Alan H. Mantel; Lead Independent Director Joy L. Schaefer (female chair/lead requirement implemented) .
- Executive sessions: Independent directors and each committee can meet in executive session without management; presided by Chair/LID/Committee Chair .
- Nomination rights/interlocks: PIMCO has rights to nominate two directors; nominated Michael W. Chiao and Omar M. Maasarani; Snow Phipps nominated two; CEO has one nominee right .
- ESG oversight: Governance Committee oversees ESG policy and sustainability practices .
Fixed Compensation
| Component | Amount (USD) | Notes |
|---|---|---|
| Annual cash retainer | $0 | PIMCO/Snow Phipps designee directors (incl. Chiao) do not receive director compensation from VEL |
| Committee membership fee | $0 | Not paid to PIMCO/Snow Phipps designees |
| Committee chair fee | $0 | Not applicable; Chiao is not a chair |
| Meeting fees | $0 | Not disclosed/none; directors are compensated via retainers |
| Equity grant (restricted stock) | $0 | PIMCO/Snow Phipps designees do not receive equity compensation from VEL |
Context for non-designee directors: $75,000 annual cash retainer; $10,000 per committee membership; $10,000 per committee chair; $95,000 annual restricted stock grant upon re-election .
Performance Compensation
| Element | Metrics | Amount/Mechanics |
|---|---|---|
| Director performance-based pay | None disclosed | VEL does not tie director pay to performance metrics; Chiao receives no director compensation or equity from VEL |
Other Directorships & Interlocks
| Entity | Type | Relationship | Potential Interlock/Conflict Note |
|---|---|---|---|
| PIMCO | Institutional investor | Officer (EVP & PM) | PIMCO beneficially owns 12,637,764 shares and warrants (33.1% of class incl. warrants); holds two Board nomination rights |
| VEL Board | Public company | Director (Independent) | Board determined independence despite officer role at major shareholder |
Expertise & Qualifications
- Structured credit/residential loan investing; RMBS and whole loan securitization experience .
- Institutional asset management perspective from PIMCO; portfolio management and risk oversight background .
- Undergraduate degree from California State Polytechnic University, Pomona .
Equity Ownership
| Category | Amount | Detail |
|---|---|---|
| Beneficial ownership (shares) | 0 | “—” in director ownership table; disclaims beneficial ownership of PIMCO-held shares |
| Ownership % of outstanding | <0.1% | Asterisk indicates less than 0.1% |
| Vested options | 0 | Not listed with options; only certain directors/executives hold options |
| Unvested restricted shares | 0 | Not eligible; PIMCO designee directors do not receive equity |
| Shares pledged as collateral | Prohibited | Company policy prohibits pledging and hedging by directors/executives/employees |
| Ownership guidelines compliance | Exempt | Directors who are PIMCO/Snow Phipps designees are prohibited by internal policies from personally holding VEL shares; not subject to director stock ownership requirement |
Governance Assessment
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Strengths:
- Independent director designation affirmed despite major shareholder affiliation; formal annual independence review .
- Active Compensation Committee member; committee uses independent consultant Mercer and maintains clawback provisions; no tax gross-ups; no single-trigger CIC vesting in plan .
- Robust related-person transaction policy overseen by Audit Committee; no related-party transactions involving directors in 2024 .
- Anti-hedging and anti-pledging policy enhances alignment and risk control .
-
RED FLAGS / Watch items:
- Major shareholder influence: PIMCO holds 33.1% (incl. warrants) and nominates two directors (including Chiao), which can concentrate governance power and create perceived conflicts; Board deemed relationships not material, but investors should monitor decision-making independence .
- Skin-in-the-game: Chiao is exempt from stock ownership guidelines and cannot personally hold VEL shares due to PIMCO policies; while PIMCO’s large stake aligns institutional interests, lack of personal ownership may reduce direct individual alignment .
- Committee mix: As a Compensation Committee member from a major shareholder, scrutiny of pay and equity share reserve increases is warranted; the Board proposed a 1,750,000 share increase to the 2020 Plan (total potential dilution 9.9%)—evaluate voting stance and rationale closely .
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Overall implication: Chiao brings deep structured credit expertise and institutional investor perspective valuable to VEL’s lending business, but his affiliation with a controlling shareholder and exemption from ownership/compensation create optics risks that merit ongoing monitoring of independence, voting on equity plans, and Compensation Committee decisions .