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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION

 

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

 

 

Preliminary Proxy Statement
  Confidential, For Use of the Commission only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to ss.240.14a-12

 

OCWEN FINANCIAL CORPORATION

 

(Name of Registrant as Specified in its Charter)

 

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check all boxes that apply):

 

No Fee Required

☐ Fee paid previously with preliminary materials

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

 

 

 

 

 

 

April 12, 2024

 

Dear Fellow Shareholder:

 

On behalf of the Board of Directors, I cordially invite you to participate in the Annual Meeting of Shareholders of Ocwen Financial Corporation, which will be held on Tuesday, May 28, 2024, at 9:00 a.m., Eastern Daylight Time. Our experience continues to demonstrate that virtual-format shareholder meetings allow more shareholders to participate online than would be able to travel to the meeting to attend in person, so we will again be hosting this year’s Annual Meeting in a virtual format only via live audiocast on the Internet at www.virtualshareholdermeeting.com/OCN2024. To participate, vote or submit questions during the Annual Meeting via live audiocast, please review the detailed procedures included in our Notice of Annual Meeting. You will not be able to attend the Annual Meeting physically in person. For purposes of attendance at the Annual Meeting, all references herein to “present,” “participate,” or “in person,” shall mean virtually present at the Annual Meeting.

 

Details of the business to be conducted at the Annual Meeting and instructions for how to participate in the Annual Meeting are set forth in the accompanying Notice of 2024 Annual Meeting of Stockholders and Proxy Statement. Only stockholders of record and beneficial owners at the close of business on March 25, 2024 are entitled to notice of and to vote at the Annual Meeting and any adjournments or postponements thereof.

 

It is very important that you be represented at the Annual Meeting regardless of the number of shares you own or whether you are able to participate in our virtual Annual Meeting. We encourage you to complete your proxy card in one of the manners described in the accompanying materials even if you plan to participate in the Annual Meeting. This will not prevent you from voting during the Annual Meeting if you choose to participate and vote at that time, but will ensure that your vote is counted if you are unable to participate. If you are a beneficial owner holding shares through a brokerage firm, bank, broker-dealer, or similar organization you should follow the instructions on your voting instruction form to vote your shares. Please note that if you are a beneficial owner of our shares you may not be able to vote your shares at the Annual Meeting unless you have obtained a legal proxy from your brokerage firm, bank, broker-dealer, or similar organization. Please contact your brokerage firm, bank, broker-dealer or other similar organization for information about specific requirements if you would like to vote your shares at the meeting.

 

Your continued support of, and interest in, Ocwen Financial Corporation is sincerely appreciated.

 

Sincerely,

 

Glen A. Messina

Chair, Board of Directors

 

 

 

 

OCWEN FINANCIAL CORPORATION

 

1661 Worthington Road, Suite 100

West Palm Beach, Florida 33409

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS AND

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS

FOR THE SHAREHOLDER MEETING TO BE HELD ON MAY 28, 2024

 

NOTICE

 

Our Annual Meeting of Shareholders will be held:

 

  Date: Tuesday, May 28, 2024
  Time: 9:00 a.m., Eastern Daylight Time
  Location: Virtual Meeting Only via Live Audiocast

 

Please review the instructions contained in this Proxy Statement if you wish to participate in the virtual Annual Meeting.

 

PURPOSE

 

  To elect the seven directors listed in the accompanying proxy statement for one-year terms or until their successors are elected and qualified;
     
  To approve an amendment to our Articles of Incorporation, as amended, to change our name to “Onity Group Inc.”;
     
  To ratify the appointment by the Audit Committee of our Board of Directors of Deloitte & Touche LLP as the independent registered public accounting firm of Ocwen Financial Corporation for the fiscal year ending December 31, 2024;
     
  To approve, on an advisory basis, our named executive officer compensation (Say-on-Pay);
     
  To approve an amendment to the Ocwen Financial Corporation 2021 Equity Incentive Plan to increase the number of available shares; and
     
  To transact such other business as may properly come before the meeting and any postponement or adjournment of the meeting. Management is not aware of any such other business at this time.

 

PROCEDURES

 

  Our Board of Directors has fixed March 25, 2024 as the record date for the determination of shareholders entitled to notice of and to vote at the Annual Meeting. A list of shareholders entitled to vote at the Annual Meeting will be available for examination at our offices for ten days prior to the Annual Meeting. The list of shareholders may also be accessed during the virtual Annual Meeting at www.virtualshareholdermeeting.com/OCN2024 by using the control number on your proxy card or voting instruction form.
     
  Shareholders of record at the close of business on the record date will be entitled to vote and ask questions online at the Annual Meeting. Please note that if you do not have your control number, you will be able to access and listen to the Annual Meeting, but you will not be able to vote your shares or submit questions during the Annual Meeting.

 

  If you would like to attend the virtual meeting and you have your control number, please go to www.virtualshareholdermeeting.com/OCN2024 15 minutes prior to the start of the meeting to log in. For shareholders who hold shares in street name, if you came through your brokerage firm’s website and do not have your control number, you can gain access to the meeting by logging into your brokerage firm’s website 15 minutes prior to the meeting start, selecting the shareholder communications mailbox to link through to the meeting and the control number will automatically populate. For technical assistance when logging into Ocwen’s Annual Meeting, please call 800-586-1548 (US) or 303-562-9288 (International).
     
  If you wish to submit a question during the Annual Meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/OCN2024, type your question into the “Ask a Question” field, and click “Submit.”

 

This proxy statement for our 2024 Annual Meeting of Shareholders and our Annual Report to shareholders on Form 10-K for the year ended December 31, 2023 will be available on or about April 23, 2024 on our website at www.ocwen.com in the Financial Information section under the “Shareholders” tab. The approximate date on which this proxy statement, the proxy card and other accompanying materials are first being sent or given to shareholders is April 23, 2024. Additionally, and in accordance with Securities and Exchange Commission rules, you may access our annual report and proxy materials at http://shareholders.ocwen.com/sec.cfm, a website that does not identify or track visitors of the site.

 

If you have questions for Ocwen Financial Corporation regarding this virtual Annual Meeting, please contact our shareholder relations department at shareholderrelations@ocwen.com.

 

By Order of the Board of Directors,

 

Joseph J. Samarias

Secretary

April 12, 2024

 

1

 

 

OCWEN FINANCIAL CORPORATION

 

PROXY STATEMENT

 

ANNUAL MEETING OF SHAREHOLDERS

 

 

General Information

 

This proxy statement is being furnished to you in connection with the solicitation of proxies by the Board of Directors of Ocwen Financial Corporation (Ocwen, the Company, we, us, or our) for use at our 2024 Annual Meeting of Shareholders (the Annual Meeting) and at any postponement or adjournment of this meeting. The approximate date on which this proxy statement, the proxy card and other accompanying materials are first being sent or given to shareholders is April 23, 2024. The Annual Meeting will be held on Tuesday, May 28, 2024, at 9:00 a.m., Eastern Daylight Time, for the purposes listed in the Notice of Annual Meeting of Shareholders. We will be hosting this year’s Annual Meeting via live audiocast on the Internet at www.virtualshareholdermeeting.com/OCN2024. If you are interested in participating in the virtual meeting, voting or submitting questions at that time, please see “Annual Meeting Participation” below for further details. You will not be able to attend the Annual Meeting physically in person. For purposes of attendance at the Annual Meeting, all references herein to “present,” “participate,” or “in person,” shall mean virtually present at the Annual Meeting.

 

How a Proxy Works

 

The Board of Directors has appointed Glen A. Messina, Chair of the Board, President and Chief Executive Officer, and Joseph J. Samarias, Executive Vice President, Chief Legal Officer and Secretary, as the management proxy holders for the Annual Meeting. If you properly complete, sign and return your proxy card by mail, or submit your proxy by Internet or telephone, and do not revoke it prior to its use, your shares will be voted in accordance with your instructions. If you do not give contrary instructions, the management proxy holders will vote all shares represented by valid proxies as follows:

 

  Proposal One (Election of Directors) - “FOR ALL” of the seven nominees for Director listed herein;
     
  Proposal Two (Approval of Name Change) - “FOR” approval of an amendment to our Articles of Incorporation, as amended, to change our name to “Onity Group Inc.” (our Name Change);
     
  Proposal Three (Ratification of Appointment of Independent Registered Public Accounting Firm) - “FOR” ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024;
     
  Proposal Four (Advisory Resolution on Named Executive Officer Compensation, or Say-on-Pay) - “FOR” approval, on an advisory basis, of the compensation of Ocwen’s executive officers whose compensation is disclosed in this proxy statement (named executive officers);
     
  Proposal Five (Approval of the amendment to the Ocwen Financial Corporation 2021 Equity Incentive Plan (the 2021 Plan Amendment)) - “FOR” approval of an amendment to the Ocwen Financial Corporation 2021 Equity Incentive Plan to increase the number of shares available for awards; and
     
  with regard to any other business that properly comes before the meeting, in accordance with the best judgment of the management proxy holders. As of the date of this proxy statement, we do not know of any other business that may come before the Annual Meeting.

 

2

 

 

How to Revoke a Proxy

 

Your proxy may be used only at the Annual Meeting and any postponement or adjournment of this meeting and may not be used for any other meeting. You have the power to revoke your proxy at any time before it is exercised by:

 

  filing written notice of revocation with our Secretary at the following address:
    Joseph J. Samarias, Secretary
    c/o Ocwen Financial Corporation
    1661 Worthington Road, Suite 100
    West Palm Beach, Florida 33409
     
  submitting a properly executed proxy card bearing a later date or submitting another proxy using the Internet or by telephone (your latest Internet or telephone voting instructions will be followed), or
     
  participating in the virtual Annual Meeting and giving the Secretary notice of your intention to vote at that time.

 

If you are interested in participating in the virtual Annual Meeting, voting or submitting questions at that time, please see “Annual Meeting Participation” below for further details.

 

Who May Vote at the Annual Meeting

 

On all matters properly presented at the Annual Meeting, each share of our common stock is entitled to one vote. All shareholders who owned our common stock as of the close of business on March 25, 2024 (the Record Date) are cordially invited to participate in the 2024 Annual Meeting. Only shareholders of record or beneficial owners of shares of our common stock at the close of business on the Record Date are entitled to participate and vote at the Annual Meeting or any postponement or adjournment of this meeting. If your shares are registered directly in your name with Computershare, Ocwen’s stock transfer agent, you are the “shareholder of record” with respect to those shares. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or similar organization (collectively, Broker), then you are the “beneficial owner of shares held in street name.” As a beneficial owner, you have the right to instruct your Broker how to vote your shares. Most individual shareholders are beneficial owners of shares held in street name. At the close of business on the Record Date, there were 7,764,754 shares of common stock issued and outstanding.

 

How to Vote if you are a Shareholder of Record

 

If you are a shareholder of record and you have received a printed set of the proxy materials by mail, we encourage you to fill in, date and sign the enclosed proxy card and mail it promptly in the enclosed envelope to make sure that your shares are represented at the Annual Meeting. Shareholders of record also have the option of voting by using a toll-free telephone number or via the Internet. Instructions for using these services are included on the proxy card. If you are a shareholder of record and participate in the Annual Meeting, you may, if you desire, revoke your proxy in accordance with the procedures described in this Proxy Statement and vote your shares during the meeting. Please note that your presence (without further action) at the Annual Meeting will not constitute revocation of a previously given proxy.

 

How to Give Voting Instructions if you are a Beneficial Owner of Shares held in Street Name

 

If you are a beneficial owner of shares held in street name, you are considered the beneficial owner of the shares, and your shares may be voted at the Annual Meeting only by the Broker that holds your shares. To instruct your Broker how your shares are to be voted at the Annual Meeting, you will need to follow the instructions provided by the Broker that holds your shares. Many Brokers offer the option of submitting voting instructions over the Internet or by telephone. You are also welcome to participate in the Annual Meeting, but you will need to follow the instructions provided to you by your Broker. Please note that if you are a beneficial owner of our shares, you may not be able to vote your shares at the Annual Meeting unless you have obtained a legal proxy from your Broker. Please contact your Broker for further information. If you wish to revoke your proxy any time before the Annual Meeting you should contact your Broker to find out how to change or revoke your voting instructions.

 

3

 

 

If you hold your shares in street name through a brokerage account and you do not submit instructions to your Broker about how your shares are to be voted, one of two things can happen depending on the type of proposal. If the proposal involves a “routine” matter, such as approval of our Name Change or ratification of the appointment of the independent registered public accounting firm, then the rules of the New York Stock Exchange provide Brokers discretionary power to vote your shares even if you do not provide instructions. If, however, the proposal involves a “non-routine” matter, such as the proposals to elect directors, approve Say-on-Pay, and approve the 2021 Plan Amendment, then Brokers are not permitted to vote your shares without instruction from you. If you do not submit voting instructions to your Broker and your Broker exercises its discretion to vote your shares on Proposal Two to approve the Name Change and Proposal Three to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024, your shares will constitute broker “non-votes” on each of the other proposals at the Annual Meeting. Therefore, it is important that you provide instructions to your Broker if your shares are held by a Broker so that your votes with respect to election of directors, Say-on-Pay, and the 2021 Plan Amendment are counted.

 

Quorum and Voting Information

 

The presence at the Annual Meeting of a majority of the votes of our common stock entitled to vote, represented in person or by proxy, will constitute a quorum for the transaction of business at the Annual Meeting.

 

Assuming a quorum, the seven nominees for director receiving a plurality of the votes cast for director will be elected as directors of Ocwen. A plurality vote requirement means that the director nominees with the greatest number of votes cast, even if less than a majority, will be elected. There is no cumulative voting. You may vote in favor of or withhold authority to vote for one or more nominees for director. For Proposal Two to amend our Articles of Incorporation, as amended, to change our name to Onity Group Inc., Proposal Three to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024, Proposal Four to approve Say-on-Pay, and Proposal Five to approve the 2021 Plan Amendment, the proposal will be approved if the votes cast by the holders of the shares represented at the Annual Meeting and entitled to vote in favor of the action exceed the votes cast opposing the action. Because Proposal Three to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024 and Proposal Four to approve Say-on-Pay are advisory in nature, there is no specific requirement for approval for these proposals. It will be up to the Audit Committee with respect to Proposal Three and the Compensation and Human Capital Committee with respect to Proposal Four, as well as the Board of Directors, to determine whether and how to implement the advisory votes on the ratification of the appointment of our independent registered public accounting firm and Say-on-Pay.

 

Abstentions will be counted as present and entitled to vote for purposes of determining whether a quorum is present. For Proposal One on the election of directors, a “withhold vote” will not be counted in determining the vote’s outcome, because the candidates who receive the highest number of “for” votes are elected, and candidates only need a single “for” vote to be elected. Abstentions will not be counted as votes cast with respect to Proposal Two to approve the Name Change, Proposal Three to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2024, Proposal Four to approve Say-on-Pay, or Proposal Five to approve the 2021 Plan Amendment. If any broker “non-votes” occur at the meeting with respect to your shares, the broker “non-votes” will be counted as present and entitled to vote for purposes of determining whether a quorum is present, but will not be counted as votes cast with respect to Proposal One on the election of directors, Proposal Four to approve Say-on-Pay, or Proposal Five to approve the 2021 Plan Amendment and therefore will not be counted in determining the outcome of those proposals presented for your vote.

 

4

 

 

Annual Meeting Participation

 

Our experience conducting virtual-format shareholder meetings over the past three years has demonstrated that virtual meetings allow far more shareholders to participate online than would be able to travel to the meeting to attend in person. Accordingly, we will again be hosting our Annual Meeting via live audiocast on the Internet at www.virtualshareholdermeeting.com/OCN2024. You will not be able to attend the Annual Meeting physically in person. Our shareholders will be afforded the same opportunities to participate at the virtual Annual Meeting as they would at an in-person annual meeting of shareholders.

 

Shareholders of record will be able to vote and ask questions online during the meeting. If you would like to attend the virtual Annual Meeting and you have your control number, please go to www.virtualshareholdermeeting.com/OCN2024 15 minutes prior to the start of the meeting to log in. Please note that if you do not have your control number, you will be able to access and listen to the Annual Meeting but you will not be able to vote your shares or submit questions during the Annual Meeting. For shareholders who hold shares in street name, if you came through your brokerage firm’s website and do not have your control number, you can gain access to the meeting by logging into your brokerage firm’s website site 15 minutes prior to the meeting start, selecting the shareholder communications mailbox to link through to the meeting and the control number will automatically populate. Please note that if you are a beneficial owner of our shares you may not be able to vote your shares at the Annual Meeting unless you have obtained a legal proxy from your Broker. Please contact your Broker for further information.

 

After the Annual Meeting, we will spend up to 15 minutes answering shareholder questions that comply with the meeting rules of conduct, which will be posted on the website above prior to the Annual Meeting. To the extent time doesn’t allow us to answer all of the appropriately submitted questions, we will answer them in writing on our investor relations website, at http://www.ocwen.com in the Shareholder Relations section, soon after the meeting and the answers will remain available until one week after posting. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

 

For technical assistance when logging into the virtual Annual Meeting, please call 800-586-1548 (US) or 303-562-9288 (International).

 

5

 

 

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This proxy statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may be identified by a reference to a future period or by the use of forward-looking terminology and address matters that are, to different degrees, uncertain. Because forward-looking statements involve a number of assumptions, risks and uncertainties that could cause actual results to differ materially, readers should not place undue reliance on such statements. In the past, actual results have differed from those suggested by forward looking statements and this may happen again. Important factors that could cause actual results to differ materially from those suggested by the forward-looking statements include those described in Ocwen’s reports and filings with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 and any current and quarterly reports since such date. Anyone wishing to understand Ocwen’s business should review our SEC filings. Ocwen’s forward-looking statements speak only as of the date they are made and we disclaim any obligation to update or revise forward-looking statements whether as a result of new information, future events or otherwise. Ocwen may post information that is important to investors on our website.

 

Important factors that could cause actual results to differ include, but are not limited to, the risks discussed above and the following:

 

  the potential for ongoing disruption in the financial markets and in commercial activity generally related to changes in monetary and fiscal policy, United States (U.S.) political developments, geopolitical events and other sources of instability;
  the impacts of inflation, employment disruption, and other financial difficulties facing our borrowers;
  the impact of the recent failures and re-organization of banking institutions and continued uncertainty in the banking industry;
  our ability to timely reduce operating costs or generate offsetting revenue in proportion to the industry-wide decrease in originations activity, and the impact of cost-reduction initiatives on our business, operations, and financial performance;
  our ability to maintain and increase market share in our target markets, including in forward and reverse servicing;
  failure or perceived failure to comply with existing or future laws, regulations, contracts, self-regulatory schemes, standards, and other obligations related to data privacy and security, including any failure to protect customers’ data, could result in disruption to our operations, loss of income, reputational damage, costly litigation and regulatory penalties and otherwise negatively affect our business;
  our reliance on our technology vendors to adequately maintain and support our systems, including our servicing systems, loan originations and financial reporting systems, and uncertainty relating to our ability to transition to alternative vendors, if necessary, without incurring significant cost or disruption to our operations;
  our ability to interpret correctly and comply with current or future liquidity, net worth and other financial and other requirements of regulators, the Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac) (together, the GSEs), and the Government National Mortgage Association (Ginnie Mae), as well as those set forth in our debt and other agreements, including our ability to identify and implement a cost-effective response to Ginnie Mae’s risk-based capital requirements that take effect in late 2024;
  the amount of common stock or senior secured notes that we may repurchase under any future stock or debt repurchase programs, the timing of such repurchases, and the long-term impact, if any, of repurchases on the trading price of our stock or our financial condition;
  the extent to which our mortgage servicing rights (MSR) joint venture with Oaktree Capital Management L.P. and its affiliates (Oaktree), other transactions and our enterprise sales initiatives will generate additional subservicing volume and result in increased profitability;
  our ability, and the ability of MSR Asset Vehicle LLC (MAV), to bid competitively for, and close acquisitions of, MSRs on terms that will enable us to achieve our growth objectives and a favorable return on our investment in MAV;
  uncertainty related to the future of MAV, one of our largest subservicing clients as of December 31, 2023, MAV’s continued ownership of its MSR portfolio after May 3, 2024, and any impact on our servicing revenue and MSR valuation adjustments as a result of the sale of MAV’s MSRs;

 

6

 

 

  the extent to which our ownership stake in MAV’s holding company may be diluted, resulting in a reduced ability for us to participate in certain routine management decisions;
  uncertainty related to our long-term relationship with Rithm Capital Corp. (Rithm), one of our largest subservicing clients as of December 31, 2023;
  our ability to identify, enter into and close additional strategic transactions, including the ability to obtain regulatory approvals, enter into definitive financing arrangements, and satisfy closing conditions, and the timing for doing so;
  our ability to efficiently integrate the operations and assets of acquired businesses and to retain their employees and customers over time;
  the adequacy of our financial resources, including our sources of liquidity and ability to sell, fund and recover servicing advances, forward and reverse whole loans, future draws on existing reverse loans, and Home Equity Conversion Mortgage (HECM) and forward loan buyouts and put-backs;
  uncertainty related to the ability of third party obligors and financing sources to fund servicing advances on a timely basis on loans serviced by us;
  our ability to repay, renew and extend borrowings, borrow additional amounts as and when required, meet our MSR or other asset investment objectives and comply with our debt agreements, including the financial and other covenants contained in them;
  increased servicing costs and reduced or delayed servicing income due to rising borrower delinquency levels , forbearance plans, moratoria on evictions and delays in foreclosure proceedings;
  the characteristics of our servicing portfolio, including prepayment speeds along with delinquency and advance rates;
  our ability to continue to collect certain expedited payment or convenience fees and potential liability for charging such fees;
  an increase in severe weather or natural disaster events resulting in costly disruptions to our operations and increased servicing costs due to property damage;
  our ability to successfully modify delinquent loans, manage foreclosures and maintain and sell foreclosed properties;
  adverse effects on our business related to past, present or future claims, litigation, cease and desist orders and investigations relating to our business practices, including those brought by private parties and state regulators, the Consumer Financial Protection Bureau (CFPB), State Attorneys General, the Securities and Exchange Commission (SEC), the Department of Justice or the Department of Housing and Urban Development (HUD);
  scrutiny of our compliance with COVID-19-related rules and regulations, including requirements instituted by state governments, the GSEs, Ginnie Mae and regulators;
  the reactions of key counterparties, including lenders, the GSEs and Ginnie Mae, to our regulatory engagements and litigation matters;
  any adverse developments in existing legal proceedings or the initiation of new legal proceedings;
  our ability to efficiently manage our regulatory and contractual compliance obligations and fully comply with all applicable requirements, and the costs of doing so;
  uncertainty related to changes in legislation, regulations, government programs and policies, industry initiatives, best servicing and lending practices, and media scrutiny of our business and industry;
  the extent to which changes in, or in the interpretation of, laws or regulations may require us to modify our business practices and expose us to increased expense and litigation risk, including with respect to the collection of expedited payment, or convenience, fees;
  our ability to comply with our servicing agreements, including our ability to comply with our agreements with the GSEs and Ginnie Mae and maintain our seller/servicer and other statuses with them;
  our servicer and credit ratings as well as other actions from various rating agencies, including the impact of prior or future downgrades of our servicer and credit ratings;
  uncertainty related to the actions of loan owners and guarantors, including mortgage-backed securities investors, the GSEs, Ginnie Mae and trustees regarding loan put-backs, penalties and legal actions;
  uncertainty related to the GSEs substantially curtailing or ceasing to purchase our conforming loan originations or the Federal Housing Administration (FHA) of the HUD, Department of Veterans Affairs (VA) or United States Department of Agriculture (USDA) ceasing to provide insurance;
  our ability to recruit and retain senior managers and key employees;
  increased compensation and benefits expense as a result of rising inflation and labor market trends;
  uncertainty related to our reserves, valuations, provisions and anticipated realization of assets;
  our ability to effectively manage our exposure to interest rate changes and foreign exchange fluctuations;
  our ability to effectively transform our operations in response to changing business needs, including our ability to do so without unanticipated adverse tax consequences;
  the timing for completion of our proposed rebranding and its impact on our business and third parties’ perceptions of us; and
  our ability to maintain positive relationships with our large shareholders and obtain their support for management proposals requiring shareholder approval.

 

7

 

 

ELECTION OF DIRECTORS

(Proposal One)

 

Our Bylaws provide that our Board of Directors shall consist of no less than three and no more than eleven members with the exact number to be fixed by our Board of Directors. Effective April 1, 2024, concurrent with the appointment of Claudia J. Merkle as a director, our Board of Directors fixed the number of directors at eight. As Phyllis R. Caldwell has informed the Board of Directors that she does not intend to stand for re-election and is retiring from the Board of Directors immediately prior to the Annual Meeting, our Board of Directors has fixed the number of directors at seven, effective immediately prior to the commencement of the Annual Meeting.

 

As further described below under “Board of Directors and Corporate Governance” and, in particular, under “Annual Board Assessment” and “Director Nomination Process,” it is the responsibility of the Nomination/Governance Committee and the Board to periodically review Board size and composition and, if deemed appropriate, to make changes that the Board believes will best position the Board to enhance our ability to create value for shareholders and address changes in the market and business environment in which we operate.

 

Under the leadership of our Board, the Company demonstrated strong execution on our key strategic initiatives throughout 2023. Driven by our servicing segment, Ocwen produced strong 2023 results in terms of both adjusted pre-tax income and adjusted return on equity. The Company’s industry-leading servicing cost and operating performance, combined with special servicing capabilities, positioned us to execute on opportunistic asset management transactions that were accretive to earnings. Originations delivered year-over-year growth in average total servicing and subservicing portfolio unpaid principal balance (UPB) and responded to depressed industry volume levels by reducing expenses and increasing the volume mix of higher-margin products, while maintaining disciplined MSR investing. In an effort to address the impact of interest rate volatility on GAAP earnings, the Company increased our target MSR hedge coverage ratio throughout the year and management is working to continue to optimize our hedging strategy. Ocwen was again honored with Fannie Mae’s 2023 STARTM award for servicing excellence and achieved Housing and Urban Development (HUD) Tier 1 servicer ranking, demonstrating the strength and quality of our servicing platform. During 2023 Ocwen continued to benefit from our long-term strategic relationship with Oaktree, extending the investment period for our joint MSR acquisition vehicle through May 2025. In addition, we launched a debt retirement initiative for our senior corporate notes to strengthen the Company’s leverage profile ahead of future refinancing activity. Throughout, the Board provided management with the guidance and oversight as we concluded our litigation with the Consumer Financial Protection Bureau and continued to fulfil our regulatory commitments, work toward the resolution of remaining legacy matters, and respond with speed and agility to new regulatory frameworks and disruption in the financial markets.

 

To put the Company in the best position to execute on these initiatives, the Nomination/Governance Committee and the Board evaluate on an ongoing basis the skillsets and experiential perspectives of our directors as well as individuals recommended as potential nominees. Consistent with our Board Diversity Policy and our Corporate Governance Guidelines, the Board has identified a set of director nominees with individual backgrounds that, when combined, provide a portfolio of experience and knowledge that will best serve the Company’s strategic and governance needs.

 

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The following provides additional information about the attributes of our current Board of Directors:

 

Ocwen Financial Corporation

Board of Directors Skills and Experiences(1)

    Glen A. Messina   Alan J. Bowers   Jenne Britell   Jacques J. Busquet   Phyllis R. Caldwell(2)   Claudia J. Merkle   DeForest B. Soaries, Jr.   Kevin Stein
Public Company Board Experience                  
Served as a Chief Executive Officer or Head of Comparably Sized Organization                
Financial Services Industry Experience                
Audit Committee Financial Expert                    
Regulatory Compliance and Risk Management Experience                
Mortgage Servicing, Lending, or Community Housing Organization Experience                

 

(1) Includes outside managerial and director experience only (i.e., does not include Ocwen-based experience)
(2) Ms. Caldwell is not standing for re-election and intends to retire from the Board immediately prior to the Annual Meeting.

 

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Nominees for Director

 

Our Board of Directors, upon the recommendation of the Nomination/Governance Committee, is proposing the seven nominees listed below for election as directors at the Annual Meeting. All nominees currently serve as our directors. There are no arrangements or understandings between any nominee and any other person for selection as a nominee.

 

Each of the nominees listed below has consented to being named in this proxy statement and to serving as a director, if elected. If any nominee is unable to or will not stand for election at the time of the Annual Meeting, the person or persons appointed as proxies will nominate and vote for a replacement nominee recommended by our Board of Directors or the Board of Directors may reduce the number of directors constituting the Board. As of the date of this proxy statement, our Board of Directors knows of no reason why any of the nominees would not be able or willing to serve as a director if elected.

 

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The following sets forth certain information concerning our director nominees, including his or her principal occupation for at least the last five years, additional biographical information and specific qualifications of each director:

 

 

Glen A. Messina

 

Mr. Messina has served as Chair of the Board of Directors since January 2023 and as President and Chief Executive Officer and a director of Ocwen since October 2018. He previously served as the President and Chief Executive Officer of PHH Corporation (PHH Corp.) from January 2012 to June 2017 and Chief Operating Officer of PHH Corp. from July 2011 to December 2011. Mr. Messina also served as a director of PHH Corp. from January 2012 to June 2017 and as a consultant to PHH Corp. through March 2018. Prior to joining PHH Corp., Mr. Messina spent 17 years at General Electric Company (GE), most recently as Chief Executive Officer of GE Chemical and Monitoring Solutions, a global water and process specialty chemicals services business.

 

Mr. Messina was selected to serve on our Board of Directors because of his extensive operational and leadership experience, including his service as both our President and Chief Executive Officer and his service as a director and the President and Chief Executive Officer of PHH Corp.

     

 

Alan J. Bowers

 

Mr. Bowers has served as a director of Ocwen since May 2015. In March 2023, Mr. Bowers was appointed as a director of Selina Hospitality PLC (Nasdaq GS: SLNA) and serves as Chair of the Audit Committee and a member of the Finance & Capital Allocation Committee. In December 2021, Mr. Bowers was appointed as a Director, the Audit & Finance Committee Chair and a member of the Compensation Committee of CWT Travel Holdings, Inc., a private business-to-business-for-employees (B2B4E) travel management platform. Mr. Bowers also previously served as a Director of Walker & Dunlop, Inc. (NYSE:WD), a commercial real estate finance company, from December 2010 until May, 2022, served as its Lead Director, and served on its Nominating and Corporate Governance Committee and as Chair of its Audit Committee. Mr. Bowers also served on the board and as Audit Committee Chair of CorePoint Lodging Inc., a publicly traded lodging REIT, from April 2018 until March 2022, when the company became a privately held company in a merger transaction. From July 2013 to May 2018, Mr. Bowers served as a Director of hotel chain La Quinta Inns & Suites (NYSE:LQ). Mr. Bowers’ additional prior roles include serving as a Director of American Achievement Corp., a privately-held manufacturer and distributor of graduation products, President, Chief Executive Officer and a board member of Cape Success, LLC, a private equity-backed staffing service and information technology solutions business, President, Chief Executive Officer and a board member of MarketSource Corporation, a marketing and sales support service firm and President, Chief Executive Officer and a board member of MBL Life Assurance Corporation, a life insurance company. Mr. Bowers also previously served on the boards and as Audit Committee Chair of Refrigerated Holdings, Inc., Roadlink Inc., and Fastfrate Holdings, Inc., each a transportation and logistics firm. Mr. Bowers has been a Certified Public Accountant since 1978, with experience including 17 years at Coopers & Lybrand, L.L.P. Mr. Bowers received his Bachelor of Science in Accounting from Montclair State University and his Master of Business Administration from St. John’s University.

 

Mr. Bowers was selected to serve as a member of our Board of Directors because he brings to our Board over thirty years of experience in accounting and executive management, including experience on the audit committees of private companies and Securities and Exchange Commission registrants. Mr. Bowers’ accounting expertise and diverse corporate management experience are assets to our Board.

 

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Jenne K. Britell

 

Dr. Britell has served as a director of Ocwen since February 2019. Dr. Britell served as a director of United Rentals, Inc. (NYSE:URI) from 2006 to 2019, including as its non-executive Chair from 2008 to 2019. Dr. Britell also served as a director of Quest Diagnostics Inc. (NYSE:DGX), including as a member of its Audit and Finance Committee, from 2005 to 2019. From 2000 through 2017, Dr. Britell served as a director of Crown Holdings, Inc. (NYSE:CCK), including as Chair of the Audit Committee. Previously, Dr. Britell served as Chair and Chief Executive Officer of Structured Ventures, Inc., advisors to U.S. and multinational companies, and as a senior executive of GE Capital, including as the Executive Vice President of Global Consumer Finance and President of Global Commercial and Mortgage Banking. Before joining GE Capital, she held significant management positions with Dime Bancorp, Inc., HomePower, Inc., Citicorp and Republic New York Corporation. Earlier, she was the founding Chair and Chief Executive Officer of the Polish-American Mortgage Bank. Dr. Britell’s extensive prior board service also includes serving as Lead Director for Aames Investment Corp., as a trustee for the Teachers Insurance and Annuity Association (TIAA-CREF), and as a director for Lincoln National Corp., in addition to numerous civic and philanthropic boards. Dr. Britell received a Ph.D. and a master’s degree in business administration from Columbia University and received a master’s degree and an undergraduate degree from Harvard University.

 

Dr. Britell was selected to serve as a member of our Board of Directors due to her extensive executive and advisory experience, including in corporate governance, corporate finance, capital markets, international business and strategic planning, with multinational corporations operating in complex, regulated industries.

     

 

Jacques J. Busquet

 

Mr. Busquet has served as a director of Ocwen since January 2016. Mr. Busquet was formerly Chief Risk Officer and Managing Director of Natixis North America LLC and a member of the Executive Committee from April 2008 to February 2015. Prior to that, Mr. Busquet was Executive Vice President and member of the Executive Committee of Canyon Americas (formerly Credit Lyonnais Americas) in charge of Risks, Compliance, Legal, Regulatory Affairs and Asset Recovery. Since 2021, Mr. Busquet has served as a director of Mizuho Securities USA, the US broker dealer of the Mizuho Financial Group, and a director of Mizuho Bank USA, a FDIC-regulated bank 100% owned by the Mizuho Financial Group. Since July 2016, Mr. Busquet has served as a director of Mizuho Americas LLC, the US Bank Holding Company of Mizuho Financial Group, Inc. Since 2005, Mr. Busquet has served as a director of Prolitec Inc., a privately-held commercial air scenting company. Since September 2023, Mr. Busquet has served as a Trustee of Old Westbury Gardens, a not-for-profit organization, and is a Member of the Finance Committee. Mr. Busquet has previously served as a trustee of the Institute of International Bankers, and of the African Wildlife Foundation, which he also served as Audit Committee Chair. Mr. Busquet has a Master of Business Administration in Finance from each of The Wharton School of the University of Pennsylvania and Hautes Études Commercialese (HEC), Paris.

 

Mr. Busquet was selected to serve as a member of our Board of Directors because with his broad experience as an officer in charge of risks in his prior positions, Mr. Busquet brings to our Board valuable insight into risk management and compliance issues. His experience working in financial institutions provides him with a deep understanding of the financial services industry. We also benefit from his corporate management experience.

 

12

 

 

 

Claudia J. Merkle

 

Ms. Merkle is the former Chief Executive Officer of NMI Holdings, Inc. (Nasdaq:NMIH, “NMI”), a publicly traded private mortgage insurer and the parent company of National Mortgage Insurance Corporation. Ms. Merkle held the position of Chief Executive Officer from January 2019 through her retirement in December 2021. From 2019 through her departure in 2021, Ms. Merkle also served on NMI’s Board of Directors. Prior to serving as Chief Executive Officer, Ms. Merkle held multiple executive leadership positions at NMI after joining the company in May 2012, including President; Chief Operating Officer; Executive Vice President, Chief of Insurance Operations; and Senior Vice President, Underwriting Fulfillment and Risk Operations. Ms. Merkle also currently serves as an Advisory Board member of HomeLend Inc., a technology and operational platform that facilitates direct purchase and sale of mortgage loans.

 

Ms. Merkle was selected to serve as a member of our Board of Directors due to her deep public company experience and significant industry knowledge spanning risk management and technology innovation in sales and operations as well as emerging corporate governance issues.

     

 

DeForest B. Soaries, Jr.

 

Dr. Soaries has served as a director of Ocwen since January 2015. Dr. Soaries served as Pastor Emeritus at First Baptist Church of Lincoln Gardens until 2023 and Senior Pastor from 1990 through 2021. He formerly served as New Jersey Secretary of State from 1999 to 2002 and as Chair of the United States Election Assistance Commission from 2004 to 2005. He currently serves as an independent director at Independence Realty Trust, a publicly traded real estate investment trust, a position he has held since February 2011, and is Chair of the Compensation Committee. Dr. Soaries also served as an independent director of the Federal Home Loan Bank of New York from January 2009 through December 31, 2023, where he was the Vice Chair of the Compensation and Human Resources Committee and also served as a member of the Affordable Housing, Governance and Executive Committees. He also previously served as a director of New Era Bank. Dr. Soaries earned a Bachelor of Arts from Fordham University, a Master of Divinity from Princeton Theological Seminary and a Doctor of Ministry from United Theological Seminary.

 

Dr. Soaries was selected to serve as a member of our Board of Directors due to his experience in the financial services industry, including as a board member of a public financial services company. Dr. Soaries brings a unique perspective as a religious and community leader focused on the issues facing struggling borrowers and communities.

 

13

 

 

 

Kevin Stein

 

Mr. Stein has served as Lead Independent Director since January 2023 and as a director of Ocwen since February 2019. Since January 2024, Mr. Stein has been Managing Director of Klaros Capital, a division of advisory and investment firm Klaros Group. From June 2022 through December 2023, he served as an independent consultant. From December 2020 through its merger with Pagaya Technologies Ltd. in 2022, Mr. Stein served as Chief Executive Officer and a director of EJF Acquisition Corp. From July 2018 through July 2022, he also served as Senior Managing Director at EJF Capital, LLC. In addition, from March 2016 through December 2019, Mr. Stein served with KCK US, Inc., a family-controlled private equity firm. Mr. Stein was previously a Managing Director in the Financial Institutions Group of Barclays, a Partner and Group Head of Depository Investment Banking at FBR & Co., a member of the leadership team of GreenPoint Financial Corporation, a bank holding company, and an Associate Director of the Federal Deposit Insurance Corporation (FDIC). Mr. Stein is Audit Committee Chair of Dime Community Bancshares, Inc. (Nasdaq:DCOM), where he has served as a director since 2017. He also served as a director of Pagaya Technologies Ltd (Nasdaq:PGY) from August 2022 through September 2023 and as a director of PHH Corp. from June 2017 until its acquisition by Ocwen in October 2018. Mr. Stein received his undergraduate degree from Syracuse University and his Master of Business Administration from Carnegie Mellon University.

 

Mr. Stein was selected to serve as a member of our Board of Directors due to his knowledge regarding the financial services industry and his mortgage servicing experience, including his prior service as a director of PHH Corp.

 

Retiring Director

 

 

Phyllis R. Caldwell

 

Ms. Caldwell served as Chair of the Board of Directors from March 2016 until January 2023 and has served as a director of Ocwen since January 2015. In December 2021, Ms. Caldwell was appointed as a director of Oaktree Specialty Lending Corporation (Nasdaq:OCSL), a specialty finance business development company (BDC), and serves on its Audit Committee. In June 2021, Ms. Caldwell was appointed as a director of OneMain Holdings, Inc. (NYSE:OMF), a financial services holding company serving nonprime consumers. In March 2021, Ms. Caldwell was appointed as a member of the Board of Trustees of JBG SMITH Properties (NYSE:JBGS), an owner and developer of mixed-use properties in the Washington, D.C. market. From December 2020 through July 2021, Ms. Caldwell served on the Board of Directors of Revolution Acceleration Acquisition Corp (Nasdaq:RAAC), a special purpose acquisition company. Ms. Caldwell is founder and has served since 2012 as the managing member of Wroxton Civic Ventures, which provides advisory services on various financial, housing and economic development matters. Previously, Ms. Caldwell was Chief Homeownership Preservation Officer at the U.S. Department of the Treasury, responsible for oversight of the U.S. housing market stabilization, economic recovery and foreclosure prevention initiatives established through the Troubled Asset Relief Program. In addition, Ms. Caldwell held various leadership roles during eleven years at Bank of America, including serving as President of Community Development Banking. From January 2014 to March 2021, Ms. Caldwell served as a director of City First Bank, National Association (formerly City First Bank of D.C., National Association, now a subsidiary of Broadway Financial Corporation (Nasdaq: BYFC) since April 1, 2021). Ms. Caldwell also serves or has served on the boards of other public and private businesses and numerous non-profit organizations engaged in housing and community development finance. Ms. Caldwell received her Master of Business Administration from the Robert H. Smith School of Business at the University of Maryland, College Park and holds a Bachelor of Arts in Sociology, also from the University of Maryland.

 

Ms. Caldwell is not standing for re-election and intends to retire from the Board of Directors immediately prior to the Annual Meeting.

 

14

 

 

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS

THAT YOU VOTE “FOR ALL” OF THE NOMINEES FOR DIRECTOR.

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

 

Role of the Board of Directors

 

The Board of Directors plays an active role in overseeing management and representing the interests of the shareholders. Each director is expected to dedicate sufficient time, energy and attention to ensure diligent performance of his or her duties, including by attending annual meetings of the shareholders of the Company, and meetings of the Board and Committees of which he or she is a member.

 

Our Board of Directors held 13 meetings and acted by unanimous written consent three times in 2023. Each incumbent director who served as a director during 2023 attended at least 75% of the aggregate of these meetings and all meetings held by all committees of our Board of Directors on which he or she served during 2023. Directors are expected to attend the annual meeting of shareholders (including via electronic participation) and a director who is unable to attend is expected to notify the Company Secretary in advance of such meeting. Our virtual 2023 Annual Meeting of Shareholders was attended by seven directors.

 

Board Observers

 

In connection with the completion of a private placement of $199.5 million aggregate principal amount of Ocwen senior secured second lien notes (the Second Lien Notes) to funds managed by Oaktree Capital Management, L.P. (the Oaktree Investors) on March 4, 2021, Messrs. Jason Keller and Brian Laibow, serving in management roles with the Oaktree Investors, joined the Company in the role of non-voting observers to our Board of Directors. Under their agreement with the Company, the Oaktree Investors may designate two Board of Directors observers for as long as the aggregate outstanding principal amount of the Second Lien Notes is at least $100 million or the Oaktree Investors and their affiliates collectively own at least 15.0% of all issued and outstanding common stock of the Company (assuming the exercise of certain warrants held by them in full). Mr. Keller and Mr. Dante Quazzo presently serve as the Oaktree Investors’ designated Board observers. The observers are entitled to attend all meetings of the Board of Directors and its committees and review all information presented to them with limited exceptions, including discussions and presentations with respect to which the presence of the observers could jeopardize attorney-client privilege.

 

Director Independence

 

Our Corporate Governance Guidelines provide that a majority of our Board of Directors must be independent in accordance with the listing standards of the New York Stock Exchange.

 

Our Nomination/Governance Committee and the Board of Directors review independence upon appointment and annually review the direct and indirect relationships that each director has with Ocwen based in part on responses provided by our directors to a questionnaire that incorporates the independence standards established by the New York Stock Exchange. Only those directors who satisfy the independence standards and who are determined by our Board of Directors to have no material relationship with Ocwen (either directly or as a partner, shareholder or officer of an organization that has a relationship with Ocwen) are considered independent. Following the Nomination/Governance Committee’s review and findings, the Nomination/Governance Committee and our Board of Directors have affirmatively determined that Mses. Caldwell and Merkle, Messrs. Bowers, Busquet, and Stein, and Drs. Britell and Soaries are independent directors.

 

Annual Board Evaluation

 

Our Corporate Governance Guidelines and Nomination/Governance Committee Charter provide that the Nomination/Governance Committee will oversee an annual self-assessment of the performance of the Board of Directors as a whole and the performance of each committee of the Board of Directors. The evaluations are designed to assess whether the Board of Directors and its committees function effectively and make valuable contributions and to identify opportunities for improving their operations and procedures. Our 2023 performance self-assessments were conducted in the first quarter of 2024.

 

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Board Leadership Structure

 

Our Board of Directors does not believe that it is in the best interests of the Company and our shareholders to mandate the separation of the offices of Chair of the Board of Directors and Chief Executive Officer. Rather, our Board of Directors retains the discretion to make determinations on this matter from time to time as may be in the best interests of the Company and our shareholders.

 

In January 2023 as part of its regular self-evaluation and succession planning activities, the Board of Directors determined that combining the positions of Chief Executive Officer and Chair of the Board of Directors, together with the appointment of a Lead Independent Director, is the best structure to fit the Company’s needs at this time and helps provide strong and consistent leadership for the management team and the Board. The Board believes that Mr. Messina’s knowledge and background with the Company, deep industry experience, demonstrated leadership capability and track record of delivering results benefits Ocwen’s shareholders, customers and employees uniquely positions him to lead the Board and continue to oversee the Company’s strategic initiatives. As Chair of the Board, Mr. Messina leads the Board of Directors and oversees Board meetings and the delivery of information necessary for the Board’s informed decision-making. In his capacity as President and Chief Executive Officer, Mr. Messina continues to be responsible for our day-to-day operations and for formulating and executing our long-term strategies in collaboration with the Board.

 

In January 2023, the Board appointed Mr. Stein as Lead Independent Director. In this role, Mr. Stein is responsible for leading the Board’s independent oversight function and for addressing any corporate governance considerations arising from the service of the same individual as Chair and Chief Executive Officer. Mr. Stein presides at all executive sessions of the independent directors and serves as principal liaison between the Chair and the independent directors, meeting regularly with the Chair to exchange feedback and discuss critical issues. In addition, he works to optimize Board performance by fostering a climate of constructive candor in which diverse viewpoints are heard and frank and thoughtful discussion occurs.

 

The duties of the Lead Independent Director are further set forth in a charter approved by our Board of Directors, a copy of which is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” Following shareholder approval of our Name Change, we expect our primary website will be www.onitygroup.com and visitors to www.ocwen.com will be automatically re-directed to our new website.

 

Committees of the Board of Directors

 

Our Board of Directors has the following standing committees: an Audit Committee, a Compensation and Human Capital Committee, a Nomination/Governance Committee, a Risk and Compliance Committee, and an Executive Committee. The table below lists the current members of each of these committees. A brief description of each committee is provided below the table.

 

Name   Age(1)  

Director

Since

 

Audit

Committee

 

Compensation and Human Capital

Committee

 

Nomination/

Governance

Committee

 

Risk and Compliance

Committee

 

Executive

Committee

Alan J. Bowers   69   2015   X(2)           X    
Jacques J. Busquet   75   2016   X   X(2)       X   X
Jenne K. Britell   81   2019   X       X        
Phyllis R. Caldwell   64   2015           X(2)        
Claudia J. Merkle   65   2024                    
Glen A. Messina   62   2018                   X(2)
DeForest B. Soaries, Jr.   72   2015       X   X        
Kevin Stein   62   2019       X       X(2)   X

 

(1) As of April 12, 2024
(2) Committee Chair

 

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Effective May 28, 2024, Dr. Soaries will replace Ms. Caldwell as Nomination/Governance Committee Chair and step down from the Compensation Committee, and Ms. Merkle will join the Nomination/Governance Committee and the Compensation Committee.

 

Audit Committee. The Audit Committee of our Board of Directors oversees the relationship with our independent registered public accounting firm, and reviews and advises our Board of Directors with respect to matters involving accounting, auditing, and financial reporting, among other things. Audit Committee oversight also includes the evaluation of significant matters relating to the financial reporting process and our system of internal accounting controls. The Audit Committee also provides oversight of the internal audit function and is responsible for ensuring the Company has appropriate procedures in place for the receipt and review of confidential and anonymous reports of questionable accounting or auditing matters. Additionally, the Audit Committee reviews the scope and results of the annual audit conducted by the independent registered public accounting firm.

 

The current members of the Audit Committee are Messrs. Bowers (Chair) and Busquet, and Dr. Britell. Each member of our Audit Committee (i) is independent as independence for audit committee members is defined in the listing standards of the New York Stock Exchange and applicable rules of the Securities and Exchange Commission, (ii) is financially literate, (iii) possesses accounting or related financial management expertise within the meaning of the listing standards of the New York Stock Exchange and (iv) qualifies as an audit committee financial expert, as such term is defined in the applicable rules of the Securities and Exchange Commission. No current member of the Audit Committee serves on the audit committee of more than three other public companies.

 

Our Audit Committee operates under a written charter approved by our Board of Directors, a copy of which is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” The Audit Committee generally reviews its charter annually and occasionally reviews it more frequently. When circumstances require, the charter is amended and the revised version posted on our website. This Committee met nine times in 2023.

 

Compensation and Human Capital Committee. The Compensation and Human Capital Committee (Compensation Committee) of our Board of Directors oversees our compensation and employee benefit plans and practices as well as the Company’s human capital initiatives and executive management development, evaluation, retention and succession planning. In furtherance thereof, the Compensation Committee reviews and approves corporate goals and objectives relevant to the compensation of our executive officers, including the President and Chief Executive Officer, evaluates our executive officers’ performance in light of those goals and objectives and approves our executive officers’ compensation based on their evaluations. In addition, the Compensation Committee oversees the review and approval of awards made to our non-executive officer employees that participate in our cash and equity incentive programs. The Compensation Committee is empowered to review and to administer awards under the 2007 Equity Incentive Plan, under which no new awards may be granted but previously granted awards remain outstanding, the 2017 Performance Incentive Plan, under which no new awards may be granted but previously granted awards remain outstanding, and the 2021 Equity Incentive Plan, as amended (the 2021 Plan). The Compensation Committee has the authority to retain, at the Company’s expense, compensation consultants, independent counsel or other advisers as it deems necessary in connection with its responsibilities. The Compensation Committee may form and delegate authority to subcommittees when it deems it to be appropriate. The role of the Compensation Committee and our processes and procedures for the consideration and determination of executive and director compensation are described in more detail below under “Board of Directors Compensation” and “Compensation Discussion and Analysis,” respectively.

 

The current members of the Compensation Committee are Mr. Busquet (Chair), Dr. Soaries and Mr. Stein. Effective May 28, 2024, the members of the Compensation Committee will be Mr. Busquet (Chair), Ms. Merkle and Mr. Stein. Each of these directors is independent as independence for Compensation Committee members is defined in the listing standards of the New York Stock Exchange. In addition, each member of the Compensation Committee also qualifies as a “non-employee” director as defined in Rule 16b-3 of the Securities and Exchange Commission and as an “outside” director within the meaning of Section 162(m) of the Internal Revenue Code (the Code).

 

Our Compensation Committee operates under a written charter approved by our Board of Directors, a copy of which is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” The Compensation Committee generally reviews its charter annually and occasionally reviews it more frequently. When circumstances require, the charter is amended and the revised version posted on our website. This Committee met eight times in 2023.

 

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Compensation Committee Interlocks and Insider Participation. Mr. Busquet, Dr. Soaries and Mr. Stein served as members of the Compensation Committee during 2023. None of such members were, at any time during the 2023 fiscal year or at any previous time, an officer or employee of the Company. None of our executive officers have served on the Board of Directors or Compensation Committee of any other entity that has or had one or more executive officers who served as a member of our Board of Directors or our Compensation Committee during the 2023 fiscal year. No member of the Compensation Committee had any relationship with us requiring disclosure under Item 404 of Securities and Exchange Commission Regulation S-K.

 

Nomination/Governance Committee. The Nomination/Governance Committee of our Board of Directors makes recommendations to our Board of Directors of candidates to serve as Directors and Committee members for our Board of Directors, advises our Board of Directors with respect to director composition, procedures and committees, recommends a set of corporate governance principles to our Board and oversees the evaluation of our Board of Directors and our management.

 

The current members of the Nomination/Governance Committee are Ms. Caldwell (Chair) and Drs. Britell and Soaries. Effective May 28, 2024, the members of the Nomination/Governance Committee will be Dr. Soaries (Chair), Dr. Britell and Ms. Merkle. Each of these directors is independent as defined in the listing standards of the New York Stock Exchange.

 

Our Nomination/Governance Committee operates under a written charter approved by our Board of Directors, a copy of which is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” The Nomination/Governance Committee generally reviews its charter annually and occasionally reviews it more frequently. When circumstances require, the charter is amended and the revised version posted on our website. This Committee met six times in 2023.

 

Risk and Compliance Committee. The Risk and Compliance Committee of our Board of Directors provides assistance to the Board of Directors with (i) review of risks that could affect the ability of the Company to achieve its strategies and preserve its assets, (ii) oversight of an enterprise risk management infrastructure to identify, measure, monitor and report on the risks the Company faces, (iii) oversight of our compliance function, including our compliance management system and information security/privacy programs, and (iv) oversight of our compliance with applicable laws, rules and regulations governing our consumer-oriented businesses, including Federal consumer financial laws and applicable state laws. The Risk and Compliance Committee also provides assistance to the Board of Directors with the review, approval and oversight of related party transactions pursuant to our Related Party Transactions Approval Policy.

 

The current members of the Risk and Compliance Committee are Messrs. Stein (Chair), Bowers and Busquet, all of whom are independent directors as defined in the listing standards of the New York Stock Exchange.

 

Our Risk and Compliance Committee operates under a written charter approved by our Board of Directors, a copy of which is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” The Risk and Compliance Committee generally reviews its charter annually and occasionally reviews it more frequently. When circumstances require, the charter will be amended and the revised version posted on our website. This Committee met seven times in 2023.

 

From time to time, when requested by the Board of Directors, the Risk and Compliance Committee provides oversight of the Company’s exploration of potential business combinations and other transformative transactions.

 

Executive Committee. Our Executive Committee is generally responsible to act on behalf of our Board of Directors during the intervals between meetings of our Board of Directors, if necessary. The current members of the Executive Committee are Mr. Messina (Chair) and Messrs. Busquet and Stein.

 

Other Committees. Our Board of Directors has the authority to form additional standing or temporary committees, and delegate appropriate authority to such committees if and when the Board determines that it is advisable to do so. In addition, the Board may, from time to time, determine that a standing committee should be dissolved or re-organized in order to more efficiently serve the Company’s corporate governance needs.

 

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Director Nomination Process

 

The Nomination/Governance Committee regularly assesses the appropriate size and composition of the Board of Directors, including whether any vacancies on the Board of Directors are anticipated. If vacancies are anticipated, various potential candidates for director are identified. Candidates may come to the attention of the Nomination/Governance Committee through current members of the Board of Directors, professional search firms, shareholders or industry sources.

 

Effective April 1, 2024, concurrent with the appointment of Ms. Merkle as a director, our Board of Directors fixed the number of directors at eight. Our Board of Directors has determined that, upon the retirement of Ms. Caldwell immediately prior to the Annual Meeting, the size of the Board of Directors will be reduced to seven directors.

 

In evaluating nominees for director, our Nomination/Governance Committee takes into account the applicable requirements for directors under the rules of the Securities and Exchange Commission and the listing standards of the New York Stock Exchange. In addition, our Nomination/Governance Committee takes into account such factors as experience, knowledge, skills, expertise, integrity, diversity, ability to make independent analytical inquiries, understanding of the Company’s business environment and willingness and ability to devote adequate time and effort to Board responsibilities and the interplay of the candidate’s qualifications and experience with the qualifications and experience of other members of our Board of Directors. We do not have a policy relating to the nomination or continued service of directors above a specific age, as we believe it is more beneficial to focus on the qualifications, experience, and performance of our directors and director nominees, and we consider Board refreshment from a broader perspective than the age of individual directors. We also consider the number of other boards on which a nominee sits. The Company’s general policy is to limit the number of other public company boards of directors upon which a director may sit to four, and presently no director sits on more than three other public company boards. The Board of Directors retains discretion to appoint or nominate for election by the shareholders individuals who sit on more than four other public company boards of directors if the Board of Directors considers the addition of such individual to the Board of Directors to be in the best interests of the Company and its shareholders. Our Nomination/Governance Committee evaluates all of the factors outlined above, as well as any other factors it deems to be appropriate, and recommends candidates that it believes will enhance our Board of Directors and benefit the Company and our shareholders. It is the policy of our Nomination/Governance Committee to consider candidates for director recommended by shareholders, but the Nomination/Governance Committee has no obligation to recommend such candidates. A copy of our Corporate Governance Guidelines is available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.”

 

Pursuant to the Board of Director’s Diversity Policy, the Nomination/Governance Committee considers diversity when it recommends director nominees to the Board of Directors. We view diversity in an expansive way to include differences in prior work experience, viewpoint, education and skill set. In particular, the Nomination/Governance Committee considers diversity in professional experience, skills, expertise, training, broad-based business knowledge and understanding of the Company’s business environment when recommending director nominees to the Board of Directors with the objective of achieving a Board with diverse business and educational backgrounds. In addition, the Board recognizes the value of including perspectives shaped by diverse ethnicities, geographic origins and genders in building an inclusive corporate culture that reflects and supports Ocwen’s diverse customer base and global workforce. Board members should have individual backgrounds that, when combined, provide a portfolio of experience and knowledge that will serve the Company’s strategic and governance needs. The Nomination/Governance Committee reviews the skills and attributes of Board members within the context of the current make-up of the full Board of Directors from time-to-time, as appropriate. The Nomination/Governance Committee does not discriminate against candidates for the Board of Directors based on race, color, religion, sex, sexual orientation or national origin.

 

In evaluating a particular candidate, the Nomination/Governance Committee will consider factors other than the candidate’s qualifications, including the current composition of the Board of Directors, the balance of management and independent directors, the need for Audit Committee and other expertise and the evaluations of other prospective nominees. In connection with this evaluation, the Nomination/Governance Committee determines whether to interview the prospective nominee, and if warranted, one or more members of the Nomination/Governance Committee, and others as appropriate, interview prospective nominees. After completing this evaluation and interview process, the Nomination/Governance Committee makes a recommendation to the full Board of Directors as to the persons who should be nominated by the Board of Directors. The Board of Directors determines the nominees after considering the recommendation of the Nomination/Governance Committee. Should a shareholder recommend a candidate for Director, our Nomination/Governance Committee would evaluate such candidate in the same manner that it evaluates any other nominee. To date, no shareholder or group of shareholders has put forth any director nominees for the Annual Meeting.

 

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If you wish to recommend persons for consideration by our Nomination/Governance Committee as nominees for election to our Board of Directors, you may do so by written notice to our Secretary at Ocwen Financial Corporation, 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. Such notice must contain all the information set forth in Section 2.2 of our Bylaws and comply with the procedures and deadline set forth therein. See “Submission of Shareholder Proposals for 2025 Annual Meeting,” below for additional information about this process.

 

Prohibition against Short Sales, Hedging and Margin Accounts

 

Our Insider Trading Prevention Policy prohibits any director, officer or employee from engaging in any short sale of the Company’s stock, establishing and using a margin account with a broker-dealer for the purpose of buying or selling Company stock, pledging Company securities as collateral for a loan, buying or selling puts or calls on the Company’s stock, or engaging in any other transaction that hedges the economic risk associated with ownership of the Company’s securities. This policy is designed to encourage investment in the Company’s stock for the long term, on a buy and hold basis, and to discourage active trading or short-term speculation and applies regardless of whether such Company securities were (i) granted to the director, officer or employee as part of their compensation or (ii) held directly or indirectly by the director, officer or employee.

 

Corporate Governance Guidelines

 

The Corporate Governance Guidelines adopted by our Board of Directors provide guidelines for us and our Board of Directors to help ensure effective corporate governance. The Corporate Governance Guidelines cover topics such as director qualifications, board of director and committee composition, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and annual performance appraisal of the Board of Directors. The Corporate Governance Guidelines also provide that within five years of their appointment, directors are generally expected to own shares in the Company worth at least five times the base annual cash retainer for service as a director.

 

Our Corporate Governance Guidelines are available on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” Our Nomination/Governance Committee reviews our Corporate Governance Guidelines annually and recommends amendments to the Board of Directors for approval.

 

The Board of Directors has also adopted a Clawback Policy as further described under “Clawback Policy” in the “Executive Compensation” section below.

 

Executive Sessions of Non-Management Directors

 

Mr. Messina chairs executive sessions of the full Board of Directors. Mr. Stein presides at the executive sessions of non-management directors, succeeding Ms. Caldwell, who presided prior to our January 2023 Board leadership transition. Our non-management directors met in executive sessions of the full Board without management during ten meetings in 2023. In addition, our Audit, Compensation and Human Capital, and Risk and Compliance Committees generally met in executive session at each regularly scheduled quarterly meeting and on other occasions when the members believed it was advisable to do so.

 

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Meetings with Management Independent of the Chief Executive Officer

 

Our Lead Independent Director, the chairs of our committees and our other directors meet with various members of management, without the Chief Executive Officer present, to discuss matters relevant to the business of the Company. For example, in addition to discussions with members of senior management, the chair of the Audit Committee meets independently with the Chief Audit Executive, our independent auditors and the Chief Legal Officer from time to time and the chair of the Risk and Compliance Committee meets independently with the Chief Risk and Compliance Officer and the Chief Legal Officer from time to time. In prior years, our directors have also visited various of our U.S. and international sites to meet generally with employees and senior management in those locations.

 

Communications with Directors

 

If you desire to communicate with our Board of Directors or any individual director regarding Ocwen, you may do so by writing to our Secretary at Ocwen Financial Corporation, 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409. You may communicate anonymously or confidentially and may also indicate whether you are a shareholder, customer, supplier, or other interested party. You may also write to our Board of Directors through our website at http://shareholders.ocwen.com/contactBoard.cfm.

 

Shareholders and other interested parties may communicate directly with the Audit Committee and the non-management directors of the Board of Directors by calling our hotline, which is administered by a third party, at 1-800-884-0953. The Chair of the Audit Committee has been designated to receive such communications.

 

Communications received in writing are distributed to our Board of Directors or to individual directors, as the Chief Legal Officer and Secretary deem appropriate, depending on the facts and circumstances outlined in the communication received. In that regard, the Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of the Board of Directors should be excluded, such as:

 

  Service or product complaints
  Service or product inquiries
  New service or product suggestions
  Resumes and other forms of job inquiries
  Surveys
  Business solicitations or advertisements

 

In addition, material that is unduly hostile, threatening, illegal, repetitive, irrelevant to the Board of Directors or similarly unsuitable will be excluded, provided that any communication that is filtered out will be made available to any non-management director upon request.

 

Code of Ethics

 

We have adopted a Code of Business Conduct and Ethics that applies to our directors, officers and employees as required by the New York Stock Exchange rules. We have also adopted a Code of Ethics for Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer. Any waivers from either the Code of Business Conduct and Ethics or the Code of Ethics for Senior Financial Officers must be approved by our Board of Directors or a Board Committee and must be promptly disclosed. The Code of Business Conduct and Ethics and the Code of Ethics for Senior Financial Officers are available on our web site at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” Any amendments to the Code of Business Conduct and Ethics or the Code of Ethics for Senior Financial Officers, as well as any waivers that are required to be disclosed under the rules of the Securities and Exchange Commission or the New York Stock Exchange, will be posted on our website.

 

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Risk Management and Oversight Process

 

One of our Board of Directors’ key responsibilities is the oversight of risk associated with the Company. Certain of these responsibilities have been delegated to specific committees, in which case the Board oversees the work of the committee.

 

Risk and Compliance Committee. As discussed above, this committee is responsible for monitoring the Company’s enterprise risk management framework, and regularly meets with the Chief Risk and Compliance Officer to discuss risk exposures and mitigation plans. This committee monitors the Company’s evaluation and management of risks, including, but not limited to, operational risk, regulatory compliance risks and cybersecurity risks, through reviews with management, including comprehensive reviews every quarter with additional updates as appropriate. This committee also reviews and approves related party transactions in accordance with our Related Party Transactions Approval Policy to monitor and prevent conflicts of interest in the operations of the Company and the activities of management and directors.

 

Audit Committee. The Audit Committee monitors the Company’s financial risks through regular reviews of the Company’s financial activities with management and internal and external auditors. This committee also receives reports from the management-level Disclosure Review Committee, which works to reduce the risk of inaccurate financial reporting through its review of the Company’s quarterly and annual financial reports and disclosure controls and procedures.

 

Nomination/Governance Committee. The Nomination/Governance Committee monitors the Company’s governance risk by regular reviews with management, including monitoring any circumstances that could potentially jeopardize the independence of directors or objectivity of management.

 

Compensation Committee. The Compensation Committee monitors potential risks created by the Company’s compensation policies and practices through regular reviews with management and through consulting regularly with an independent compensation consultant without management present. This committee also oversees human resources initiatives intended to reduce the risk of workplace discrimination and harassment incidents.

 

The Board of Directors’ role in risk oversight is consistent with the Company’s leadership structure with the President and Chief Executive Officer and other members of senior management, including our Chief Risk and Compliance Officer, having responsibility for assessing and managing the Company’s risk exposure, and the Board of Directors and its Committees providing oversight in connection with these efforts.

 

Environmental, Social and Corporate Governance (ESG) and Corporate Sustainability

 

Our Board of Directors and our management are committed to ensuring Ocwen has responsible practices to address the needs of its customers, employees and the communities it serves. While the Board has delegated oversight of management’s ESG initiatives to the Compensation Committee, the full Board is briefed regularly on the Company’s ESG-related activities and metrics. Our comprehensive approach to ESG and corporate sustainability is detailed in our report “Environmental, Social and Corporate Governance (ESG) and Corporate Sustainability” on our website at www.ocwen.com in the “Shareholders” section under “Corporate Governance.” Our approach is represented by the following policies and programs:

 

Policy on non-discrimination. Ocwen’s non-discrimination policy provides equal employment opportunities for all qualified individuals without discrimination based upon the following legally protected characteristics: race, religious creed, color, national origin, ancestry, physical or mental disability, medical condition, genetic information, marital status (including registered domestic partnership status), sex (including pregnancy, childbirth, lactation and related medical conditions), gender (including gender identity and expression), age (40 and over), sexual orientation, Civil Air Patrol status, military and veteran status and any other consideration protected by federal, state or local law (collectively referred to as “protected characteristics”). Underlying this policy is Ocwen’s culture and values, including employees’ rights to be free from unlawful discrimination, and its commitment to providing a safe, secure and productive work environment.

 

Ocwen’s hiring, salary administration, promotion and transfer policies are based solely on job requirements, job performance and job-related criteria. In addition, every effort is made to ensure that Ocwen’s personnel policies and practices (including those relating to compensation, benefits, transfer, retention, termination, training and self-development opportunities, as well as social and recreational programs) are administered without discrimination on the basis of any legally protected characteristic.

 

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Promoting equal opportunity and diversity. Ocwen is committed to providing equal opportunity in all areas of employment, compensation, training and promotion. Company policies prohibit discrimination of any form in all of the locations in which Ocwen operates. Ocwen strives to foster an environment in which all stakeholders can participate and contribute to the success of the organization’s enterprise, taking full advantage of the collective sum of individual differences, life experiences, inventiveness, self-expression and unique capabilities, knowledge and talent. Our Diversity, Equity and Inclusion Council, which was formed in 2015, is comprised of leaders from different areas of the Company including our Chief Diversity and Inclusion Officer and helps guide our approach in key areas including Leadership, Workforce, Vendor Diversity and Community Engagement. Diversity, Equity and Inclusion updates are provided to the Executive Leadership Team on a monthly basis and to the Board of Directors as necessary. Ocwen’s Global Diversity, Equity and Inclusion Policy is reviewed on an annual basis and diversity, equity and inclusion training is provided to all employees globally.

 

In 2023, several Ocwen women leaders were recognized for their contributions to the mortgage industry and furthering homeownership. Our Chief Risk and Compliance Officer was recognized in HousingWire’s 2023 “Women of Influence” list and five women employees were nominated for Five Star’s 2023 Women in Housing Leadership Awards. Additionally, our India team was recognized as one of the 2023 Top Employers for LGBTQ+ Inclusion by the India Workplace Equality Index, an honor that reflects our deep commitment to diversity, equity and inclusion.

 

Ocwen utilizes affinity groups, of which more than 2,200 employees are members, to help support employee development and drive inclusion, including 18 employee events globally:

 

  The Ocwen Global Women’s Network (OGWN) supports recruitment, development and retention initiatives for women across the organization, and serves as a sounding board for business insights, and supports the attainment of company goals in diversity, inclusion and talent development. Integrating Diversity, Equity and Inclusion into Ocwen’s culture is critical for our success and allows us to make the most of the full range of our talent.
     
  LEAP, which stands for Leading with Education Action and Purpose, has the mission to educate Ocwen employees globally about Black culture and the Black experience to increase inclusion across the organization. LEAP also enhances the professional development of Black employees through formal and informal mentoring, networking, learning opportunities and leadership development.
     
  The mission of FREE, which stands for Freedom, Respect, Expression and Equality, is to create a safe, inclusive and affirming office climate that fosters professional and personal growth for employees of all genders and sexualities through education, advocacy, outreach and support. FREE promotes a fully equitable environment that is free of judgment and strives for knowledge, challenges barriers, and seeks to help and empower LGBTQ+ employees and allies.

 

Commitment to Ethics. We have adopted a robust Code of Business Conduct and Ethics that applies to all employees and our Board of Directors, as well as an additional Code of Ethics for Senior Financial Officers that applies to our Chief Executive Officer, Chief Financial Officer, and Chief Accounting Officer. We provide multiple anonymous methods for any employee or other person to report a suspected ethical violation, including whistleblower complaints relating to accounting, internal controls, audit matters or securities law, and our policies prohibit retaliation against any person for making a good faith complaint. We also provide methods for interested individuals to contact the members of our Board of Directors and communicate directly with the Chair of our Audit Committee. Our General Counsel serves as our Chief Ethics Officer and works with members of our Internal Audit function to ensure every ethics complaint and communication to our Board is addressed in accordance with our company policies.

 

Benefits. Ocwen’s benefits programs strive to keep employees productive and engaged at work by serving the total well-being of employees’ and their families’ physical, mental and financial health. In the U.S., our comprehensive benefits plan includes company-sponsored medical, dental and vision; company-paid basic life, accident and disability coverage; 401(k) with company match; and supplemental group coverage for critical illness, accident, auto, home, pet, legal, identity protection, childcare/eldercare and tutoring. The medical plans include 100% coverage for all preventive care services and all generic preventive medications.

 

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Our wellness programs offer incentives for completing preventive health screenings, participating in online and telephonic health coaching, improving or reaching targeted health scores, and increasing physical activity. Additionally, we provide employees with a comprehensive employee assistance program that includes virtual counseling, personalized health coaching for diabetes and other chronic conditions, stress management and financial planning workshops, online guided meditation and yoga, and more. Ocwen also provides a generous paid time off (PTO) program to support employees’ need to rest and recharge. Our medical and family leave programs offer paid disability absences and paid parental/adoption leave, in addition to FMLA-required schedule flexibility and job security. Outside the U.S., our employee benefit programs provide comparable and market appropriate benefits focused on supporting our employees well-being and retirement needs.

 

Training and development. Ocwen is committed to providing our employees with high-quality training and learning experiences targeted to increase industry knowledge levels, improve process efficiency and promote personal growth, which in turn helps improve customer experience, reduce foreclosures and contribute to our success as an organization. Ocwen facilitates professional development through the lifecycle of employees through functional business training, regulatory and compliance training, and skill and competency development programs. We also provide individualized one-on-one coaching to help customer-facing staff guide customers to positive experiences. In addition to learning programs designed to build functional and leadership competency for all levels of leadership throughout the organization, Ocwen offers a Leadership Development Training curriculum specifically designed to prepare employees at the Supervisor level and above with the competencies to make them successful in their roles as leaders. Training courses are housed in our continuously reviewed and updated learning management system.

 

Our training and development programs are important contributors to our ability to deliver industry-leading customer service. Over the past few years, Ocwen’s subsidiary PHH Mortgage Corporation (PHH) has been recognized for servicing excellence through Freddie Mac’s SHARPSM and Fannie Mae’s STARTM awards and HUD’s ranking.

 

Community development. At Ocwen, we believe homeownership is an important part of achieving financial independence, and our philosophy in this regard is “helping homeowners is what we do.” This philosophy is what guides us in our commitment to the communities we serve. We organize a variety of community outreach programs and events with local and national organizations around the country to assist homeowners, particularly in communities of color. Our outreach events began during the 2008 mortgage crisis and have continued since then. In 2023, we hosted 41 borrower outreach events across the country in partnership with the NAACP and seven HUD certified housing counseling agencies. In addition, Ocwen partners with several local municipalities around vacant and abandoned properties to mitigate blight in communities.

 

To better serve our stakeholders and communities, Ocwen created a Community Advisory Council in 2014, consisting of 15 leaders from a diverse group of national non-profit organizations, consumer advocacy groups and civil rights organizations, as a platform to collaborate and share ideas on how to help homeowners. Ocwen provides grants and sponsorship funding to local and national nonprofit organizations each year, in support of the work they do to help distressed communities and homeowners. Over the past four years, Ocwen has contributed over $6 million to these organizations, and nearly $28 million since 2012.

 

Additionally, Ocwen’s subsidiary PHH formed a community partnership with the National Association of Mortgage Brokers (NAMB) to develop and provide a new reverse mortgage certification program to NAMB’s members. The success of this training program resulted in PHH being named a 2023 Affiliate Company of the Year by NAMB.

 

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Charitable activity. Ocwen continues to find meaningful ways to give back to the communities where we live and work. The charitable events at our office locations around the globe included distributing meals and supporting local food banks, helping economically disadvantaged children and at-risk youth, helping schools for hearing-impaired children, holding toy drives and back-to-school supply drives, helping the homeless, supporting victims of crimes, providing financial assistance to families impacted by cancer, making donations to first responders, helping communities impacted by the pandemic with donations and medical equipment, hosting blood drives through the American Red Cross and making donations to the Mortgage Bankers Association’s (MBA) Opens Doors Foundation to help families with a critically ill or injured child.

 

Responsible information security management. Ocwen maintains a comprehensive information security program designed to safeguard the confidentiality, integrity and availability of its data and information systems. Ocwen’s Board of Directors is consistently updated on information security risks, which are managed through a strategic blend of policies, advanced tools and technologies, and continuous staff awareness initiatives. Ocwen’s cybersecurity controls are structured around a multi-layered defense-in-depth strategy designed to protect the integrity of the network against potential breaches.

 

Our workforce undergoes regular training to recognize, avert, and report cybersecurity risks and incidents. In parallel, Ocwen’s third-party risk management program assesses and supervises the information security practices of our vendors. It is mandatory for all third-party vendors who handle data processing on our behalf to uphold a well-documented information security program that aligns with our strict security standards.

 

Ocwen’s readiness for and responsiveness to cyber threats are regularly evaluated through various assessments. These include both internal and external vulnerability assessments, penetration testing, incident response table-top exercises, and breach readiness and response drills. For more detailed information regarding Ocwen’s approach to information security risk management, see “Item 1C. Cybersecurity” of the Annual Report included with these proxy materials.

 

Environmental Impact. In 2023, Ocwen continued its commitment to operate through a primarily remote working model, reducing the percentage of employees commuting daily to the office. Fewer associates in the offices afforded the opportunity to reduce our office footprint in several markets. As office space footprints were reduced, improvements were made to retrofit lighting and equipment to lower our use of natural resources. Recycling of office and paper products in all U.S. facilities continues to be a priority, which reduces our imprint on the local landfills. In addition, we continue to reduce paper mailings to customers through our digital mailing service, electronic notice delivery and process automations.

 

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BOARD OF DIRECTORS COMPENSATION

 

The following table discloses compensation received for fiscal year 2023 by each member of our Board of Directors who was not employed by us or one of our subsidiaries and who served as a director during fiscal year 2023 (our non-management directors).

 

Name 

Fees Earned

Or Paid in Cash

($)

  

Stock

Awards(1)(2)(3)

($)

  

 

Total

($)

 
Jenne K. Britell   98,000    120,000    218,000 
Alan J. Bowers   115,500    120,000    235,500 
Jacques J. Busquet   123,000    120,000    243,000 
Phyllis R. Caldwell   98,250    120,000    218,250 
DeForest B. Soaries, Jr.   154,522(4)   120,000    274,522 
Kevin Stein   157,833    120,000    277,833 

 

(1) Amounts reported for stock awards represent the aggregate grant date fair value of awards granted during fiscal year 2023 under the 2021 Equity Incentive Plan, as amended (the 2021 Plan) computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. We based the grant date fair value of stock awards on the closing price of our common stock on the New York Stock Exchange on the date of grant of the awards.
   
(2) On May 23, 2023, our non-management directors received equity awards under the 2021 Plan for their service for the 2023-2024 term. Each award had a grant date fair value totaling $120,000 (with immaterial incremental value resulting from rounding to the next whole share). Each director received 4,424 restricted stock units (RSUs) vesting May 23, 2024, in the event each director attends at least 75% of applicable Board and committee meetings.
   
(3) Our non-management directors have no shares subject to option awards or other equity awards outstanding as of December 31, 2023, other than the RSUs issued May 23, 2023, except the following issued in prior service years to directors deferring their equity compensation pursuant to the Deferral Plan for Directors: Dr. Soaries holds 4,981 RSUs deliverable six months following the termination of his service and Ms. Caldwell holds, 2,383 RSUs deliverable six months following the termination of her service.
   
(4) Dr. Soaries’ cash compensation included the payment of $60,022 deferred during the 2016-2017 service year pursuant to the Deferral Plan for Directors.

 

The Compensation Committee has the responsibility for determining the form and amount of compensation for our non-management directors. Mr. Messina, our management director, does not receive an annual retainer or any other compensation for his service on the Board of Directors. Non-management directors receive the following compensation for their services on the Board of Directors.

 

Cash Compensation

 

In support of the Company’s cost-cutting initiatives, the Board determined in 2022 to reduce the fees payable for Board service, including reductions in the retainers payable for service as Chair or member of the Board, the Chair or member of the Compensation Committee and member of the Nomination/Governance Committee. In keeping with our continued commitment to cost-cutting, we maintained our reduced fee structure in 2023 and our non-management directors received the following cash compensation, payable in quarterly installments (except as noted below):

 

  a retainer of $72,000;
  an additional $75,000 to the Lead Independent Director;
  an additional $25,000 to the Audit Committee Chair;
  an additional $20,000 to the Compensation Committee Chair;
  an additional $15,000 to the Nomination/Governance Committee Chair;

 

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  an additional $12,500 to all Audit Committee and Risk and Compliance Committee members (other than the Chairs);
  an additional $10,000 to all Compensation Committee members (other than the Chair); and
  an additional $7,500 to all Nomination/Governance Committee members (other than the Chair).

 

Mr. Stein, our Lead Independent Director, did not receive compensation for his service as Risk and Compliance Committee Chair in 2023. Effective for 2024, Lead Independent Director fees will be reduced to $50,000 and Mr. Stein will receive an additional $25,000 for service as Risk and Compliance Committee Chair.

 

In addition, our non-management directors other than the Lead Independent Director received fees of $1,000 per meeting for each meeting in excess of eight meetings of the Board of Directors and each applicable committee per year.

 

Mr. Messina does not receive additional compensation for service as either a director or as the Chair of our Board.

 

Equity Compensation

 

At our 2023 Annual Shareholder Meeting, our shareholders approved Amendment No. 2 to the 2021 Equity Incentive Plan (as amended, the 2021 Plan). Following the 2023 Annual Shareholder Meeting, each non-management member of the Board of Directors was granted an award of restricted stock units (RSUs) under the 2021 Plan with a grant date fair value of $120,000 (rounded to the next whole share). The RSUs vest on the one-year anniversary of grant if the director has attended an aggregate of at least 75% of all meetings of the Board of Directors and committees of which the director is a member during such period. Upon vesting, the shares of common stock underlying the RSUs will be issued to the director unless the director has elected to defer delivery in accordance with the Deferral Plan for Directors, as described below. In the event that the director has attended less than an aggregate of at least 75% of all such meetings, such director’s right to ownership will vest on a pro rata basis according to the director’s actual attendance percentage, with the remaining shares forfeited. RSUs are generally non-transferable, confer no voting rights in the underlying shares prior to delivery, and no adjustments will be made for dividends for which the record date is prior to the date of issuance of such shares.

 

Following our 2024 Annual Shareholder Meeting on May 28, 2024, each non-management member of the Board of Directors serving for the 2024-2025 Board term will be granted an equity award under the 2021 Plan with a grant date fair value of $120,000 (rounded to the next whole share), subject to their election to defer, as described further below. This grant is not dependent on approval of the 2021 Plan Amendment.

 

Director Compensation Alignment with Shareholder Value Creation

 

The equity component of our director compensation program aligns the compensation of our directors directly with long-term shareholder value creation. The table below reflects the strong incentive created by our director compensation program to ensure our directors’ compensation is aligned with shareholder value creation. The table below shows the total equity holdings, excluding stock options, of each of our directors as of March 31, 2024, including shares of common stock beneficially owned and vested and unvested restricted stock units. The table provides the value of those shares and restricted stock units based on the closing price of our stock on March 31, 2024 and an illustrative diluted book value per share based on our publicly reported book value as of December 31, 2023.

 

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Value of Total Equity Held by Non-Management Directors (1),(2)

 

Name 

Total Shares Vested(2) and Unvested (as of 3/31/24)

(#)

  

Value at $27.01 Share Price (closing price on 3/31/24)(3)

($)

  

Value at $46.80 Fully Diluted Book Value Per Share(4)

($)

 
Alan J. Bowers   31,385    847,709    1,468,818 
Jenne K. Britell   29,222    789,286    1,367,590 
Jacques J. Busquet   40,218    1,086,288    1,882,202 
Phyllis R. Caldwell   40,814    1,102,386    1,910,095 
DeForest B. Soaries, Jr.   36,607    988,755    1,713,208 
Kevin Stein   29,222    789,286    1,367,590 
TOTAL   207,468    5,603,710    9,709,503 

 

(1) Total equity includes shares of common stock beneficially owned by each director serving on the Board of Directors at March 31, 2024 plus unvested restricted stock units. As noted above, restricted stock units valued at $120,000 are granted each year to our directors following our annual meeting of shareholders and vest on the first anniversary of the grant date, unless the director attended less than 75% of all meetings of the Board of Directors during that year, in which case the restricted stock units will be pro-rated based on the director’s actual attendance percentage, with the remainder forfeited. Accordingly, it is possible that all of the restricted stock units shown in the table above may not fully vest.
(2) “Shares Vested” represents shares beneficially owned and shares underlying restricted stock units that have vested and are subject to deferred delivery under our Deferral Plan for Directors, described above. “Shares Unvested” represent restricted stock units granted to a director that have not vested as of March 31, 2024. As of March 31, 2024, each of our directors held 4,424 unvested restricted stock units.
(3) Calculations are based on share price as of March 28, 2024, the last closing price prior to March 31, 2024, and equity holdings as of March 31, 2024. Our future stock price may vary materially from the closing price shown in the table. The closing price per share of our common stock on April 11, 2024 was $24.40 per share.
(4) Calculations are based on March 31, 2024 equity holdings and fully diluted book value per share. Fully diluted book value per share is calculated based on the Company’s most recent publicly reported book value of $401.8 million at December 31, 2023 and 9,230,269 shares, comprised of 7,784,253 shares outstanding and 1,446,016 warrants held by Oaktree as of March 31, 2024. See “Business Relationships and Related Transactions – Relationship with Oaktree”, below. Assumes cashless exercise of Oaktree warrants using 10-day average of Volume Weighted Average Price (10 days ending on preceding day of exercise) on March 31, 2024 of $25.54. Does not give effect to issuance of shares underlying vested and unvested restricted stock units shown in table or stock options with strike prices above current trading prices.

 

The total shares owned and outstanding units granted to non-management directors as of March 31, 2024 represents 2.7% of the diluted weighted average number (7,635,584) of shares of the Company’s common stock issued and outstanding in the 2023 fiscal year.

 

Deferral Plan for Directors

 

The Ocwen Financial Corporation Deferral Plan for Directors provides non-management directors with the opportunity to defer the receipt of all or a portion of their equity compensation earned for their service as directors. The plan is administered by the Compensation Committee. Before the end of each calendar year (or, in the case of directors appointed between annual meetings, within 30 days of appointment), the non-management directors make an election to defer delivery of either all or a portion of the equity portion of their annual compensation for the following grant year. Directors electing to defer receipt of equity will become vested in the shares underlying a deferred equity award and will receive dividend equivalents to the same extent as they would if the original award had not been deferred.

 

Each director electing deferral must specify the payment date at the time of election for any shares underlying a deferred award as either (i) the six-month anniversary of the director’s termination date or (ii) any other date elected by the director which is at least two years after the last day of the year of service for which the compensation was awarded. At least thirty days prior to payment of deferred compensation, a director shall elect to receive such payment in the form of either (i) cash in an amount equal to the fair market value of the shares underlying the deferred equity award, or (ii) the shares of common stock underlying the deferred equity award.

 

Other Compensation Matters

 

Director compensation may be prorated for a director serving less than a full one-year term such as in the case of a director joining the Board of Directors after an annual meeting of shareholders. Directors are reimbursed for reasonable travel and other expenses incurred in connection with performing their duties, including attending meetings of the Board of Directors and its committees. Director compensation is subject to review and adjustment by the Compensation Committee from time to time.

 

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EXECUTIVE OFFICERS

 

The following table sets forth certain information with respect to each person who currently serves as one of our executive officers. Our executive officers are appointed by our Board of Directors and generally serve at the discretion of our Board of Directors. There are no arrangements or understandings between us and any person for the appointment of any person as an executive officer. None of our directors and/or executive officers is related to any other director and/or executive officer of Ocwen or any of its subsidiaries by blood, marriage or adoption.

 

Name   Age(1)   Position(1)
Glen A. Messina   62   President and Chief Executive Officer
Scott W. Anderson   55   Executive Vice President and Chief Servicing Officer
Jenna D. Evans   43   Executive Vice President and Chief Risk and Compliance Officer
Francois Grunenwald   53   Senior Vice President and Chief Accounting Officer
Sean O’Neil   58   Executive Vice President and Chief Financial Officer
J. Andrew Peach   58   Executive Vice President, Originations and Chief Lending Officer
Joseph J. Samarias   52   Executive Vice President, Chief Legal Officer and Company Secretary
Aaron D. Wade   53   Executive Vice President and Chief Investment Officer
Dennis Zeleny   68   Executive Vice President and Chief Administrative Officer

 

(1) All age and position information set forth herein is as of April 12, 2024.

 

The principal occupation for at least the last five years, as well as certain other biographical information, for each of our executive officers who is not a director is set forth below.

 

Scott W. Anderson. Mr. Anderson has served as Executive Vice President and Chief Servicing Officer since 2009, and his career with Ocwen has spanned over twenty years. Prior to his current role, he served as Senior Vice President, Residential Assets since November 2001. Prior to joining Ocwen in November 1993, Mr. Anderson was employed by CIGNA. He holds a Bachelor of Arts in Economics from Bowdoin College.

 

Jenna D. Evans. Ms. Evans has served as Executive Vice President and Chief Risk and Compliance Officer since October 2022. She also continues to serve as Deputy General Counsel in charge of Regulatory Affairs, a role she has held since October 2016. Prior to joining Ocwen in February 2013, Ms. Evans served as in-house regulatory compliance counsel at GMAC Mortgage, LLC. Earlier in her career, she spent six years in private practice, during which she represented regional banks and other financial services companies. Ms. Evans also serves as the Executive Sponsor of the Ocwen Global Women’s Network, an affinity group aimed at supporting the development of female employees. She holds a Bachelor of Arts degree in Public Relations from Pennsylvania State University, a Juris Doctor from Temple University, and is licensed to practice law in both Pennsylvania and New Jersey.

 

Francois Grunenwald. Mr. Grunenwald has served as our Senior Vice President and Chief Accounting Officer since August 2019. Prior to joining Ocwen, he spent the prior 20 years at PricewaterhouseCoopers, where he served in various accounting and financial advisory roles with a focus on financial services clients, including for the last 12 years as a Partner. Mr. Grunenwald is a Certified Public Accountant and holds a Master’s degree in Finance and Banking from the University of Paris II Panthéon-Assas.

 

Sean B. O’Neil. Mr. O’Neil has served as Executive Vice President and Chief Financial Officer since June 2022. From 2015 until joining Ocwen, Mr. O’Neil served as Chief Financial Officer of Bayview Asset Management, LLC. Prior to 2015, he held a number of senior positions at financial institutions, including serving as Group Financial Officer for Wells Fargo, Eastern Community Bank and as Chief Financial Officer for Wachovia’s Wealth Management Group. Mr. O’Neil began his career as a submarine officer in the U.S. Navy. He holds a Master of Business Administration degree from Harvard University and a Bachelor of Science degree in Mechanical Engineering from Pennsylvania State University.

 

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J. Andrew Peach. Mr. Peach has served as Executive Vice President, Originations and Chief Lending Officer since April 2024. From March 2021 through April 2024, he served as Senior Vice President, Correspondent Lending and Business-to-Business Lending, including serving as interim head of Originations from January 2024. Prior to joining Ocwen, Mr. Peach served as Senior Vice President, Correspondent Sales at Mr. Cooper Group from August 2020 through March 2021 and as President and Chief Executive Officer at Waterstone Mortgage Corporation from August 2019 through July 2020. Earlier, he held senior positions at Pacific Union Financial, JP Morgan Chase, Aurora Loan Services and Bank of America. He holds a Bachelor of Science degree in Finance and Marketing from the University of South Carolina.

 

Joseph J. Samarias. Mr. Samarias has served as Executive Vice President and Chief Legal Officer since April 2019. He previously served as Senior Vice President, Deputy General Counsel of Ocwen since 2013. He also serves as the Company’s Chief Ethics Officer, and was appointed Company Secretary in April 2020. Prior to joining Ocwen, from 2009 to 2013, Mr. Samarias was a senior attorney with the Treasury Department’s Office of Financial Stability (OFS). From 2012 to 2013, he served as Chief Counsel of OFS where he was responsible for directing all legal activities of the Troubled Asset Relief Program, and served as the chief legal advisor to the Assistant Secretary for Financial Stability. Prior to his government service, Mr. Samarias was a litigator with several international law firms from 1997 to 2009. He holds a Bachelor of Arts from Vanderbilt University, a Juris Doctor from Washington University School of Law, and is a member of the bars of the Commonwealth of Virginia and the District of Columbia, as well as a Florida Authorized House Counsel, and a New Jersey In-House Counsel.

 

Aaron D. Wade. Mr. Wade has served as Executive Vice President, Chief Investment Officer since December 2022. Previously he served as Ocwen’s Executive Vice President, Capital Markets since April 2022. From October 2018 until joining Ocwen, Mr. Wade served as Managing Director for various Blackstone portfolio companies, where he was responsible for business development, due diligence, transaction management and servicer oversight for the residential division of Blackstone’s real estate debt business. From 2009 through 2018, he served as Executive Vice President of Mortgage and SBA Lending and Capital Markets for OneWest Bank. Earlier, he managed the capital markets function for IndyMac Bank and LaSalle Bank. Mr. Wade holds a Bachelor’s degree in Business Economics from University of California, Los Angeles.

 

Dennis Zeleny. Mr. Zeleny has served as Executive Vice President and Chief Administrative Officer since August 2019. In that capacity, he oversees Ocwen’s human resources, communications, information technologies, international operations, facilities, sourcing, enterprise project management office and diversity and inclusion programs. From January through August 2019, Mr. Zeleny served Ocwen as a human resources consultant. From 2012 through 2019, Mr. Zeleny provided executive Human Capital consulting services including as co-CEO of Center on Executive Compensation. He previously held the role of Chief Administrative or Chief Human Resources Officer at Sunoco, Caremark, and DuPont, oversaw global human resources at Honeywell and served 17 years at PepsiCo. Mr. Zeleny also served on the Board of HRPA, Cornell ILR Advisory Board, SXL and SCX, NYSE publicly traded companies. He received a Bachelor of Science from Cornell University and a Master of Science from the Graduate School of Business at Columbia University.

 

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

AND RELATED SHAREHOLDER MATTERS

 

Beneficial Ownership of Equity Securities

 

The following table sets forth certain information regarding the beneficial ownership of our common stock as of April 12, 2024 by:

 

  each of our directors and director nominees;
  each named executive officer; and
  all of our directors and current executive officers as a group.

 

Each of Ocwen’s directors, director nominees and named executive officers may be reached through Ocwen Corporate Headquarters at 1661 Worthington Road, Suite 100, West Palm Beach, Florida 33409.

 

The following table also sets forth information with respect to each person known by Ocwen to beneficially own more than five percent of the outstanding shares of its common stock.

 

The table is based upon information supplied to us by directors and executive officers and filings under the Securities Exchange Act of 1934, as amended, except where noted. We have based our calculation of the percentage of beneficial ownership on 7,809,618 shares of our common stock outstanding as of April 12, 2024.

 

Shares Beneficially Owned(1) 
Name and Address of Beneficial Owner: 

Amount of Beneficial

Ownership

   Percent of Class 

Oaktree Holdings, LLC(2)

333 S. Grand Avenue, 28th Floor

Los Angeles, CA 90071

   858,105    9.9%

Long Focus Capital Management, LLC(3)

207 Calle Del Parque

A&M Tower, 8th Floor

San Juan, PR 00912

   652,088    8.3%

Howard Amster(4)

7681 Olympia Drive

West Palm Beach, FL 33411

   616,706    7.9%

Deer Park Road Management Company, LP(5)

1195 Bangtail Way

Steamboat Springs, CO 80487

   577,921    7.4%

BlackRock Inc.(6)

50 Hudson Yards

New York, NY 10001

   482,146    6.2%

Roberto Marco Sella(7)

2400 Market Street, Suite 3022

Philadelphia, PA 19103

   454,767    5.8%
          
Directors and Named Executive Officers:          
Scott W. Anderson(8)   29,598    * 
Alan J. Bowers(9)   31,385    * 
Jenne K. Britell(10)   29,222    * 
Jacques J. Busquet(11)   40,218    * 
Phyllis R. Caldwell(12)   34,007    * 
George T. Henley(13)   20,390    * 
Claudia J. Merkle(14)   642    * 
Glen A. Messina(15)   299,277    3.8%
Sean B. O’Neil(16)   12,765    * 
DeForest B. Soaries, Jr.(17)   31,626    * 
Kevin Stein(18)   29,222    * 
Dennis Zeleny(19)   13,646    * 
All Current Directors and Executive Officers as a Group (16 persons)(20)   571,820    7.6%
*Less than 1%

 

(1)For purposes of this table, an individual is considered the beneficial owner of shares of common stock if he or she has the right to acquire such common stock within 60 days of April 12, 2024 and directly or indirectly has or shares voting power or investment power, as defined in the rules promulgated under the Securities Exchange Act of 1934, as amended. Unless otherwise indicated, each person has sole voting power and sole investment power with respect to the reported shares. No shares have been pledged as security by the named executive officers or directors.

 

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(2)Oaktree Holdings, LLC (Oaktree): On March 4, 2021, the Company issued 1,184,768 warrants to affiliates of Oaktree, and on May 3, 2021, the Company issued an additional 261,248 warrants to affiliates of Oaktree, pursuant to agreements between the Company and affiliates of Oaktree which provide that the warrants cannot be exercised to the extent that affiliates of Oaktree would beneficially own in excess of 9.9% of the Company’s outstanding stock following such issuance (the Ownership Cap) without 61 days advance notice. Oaktree’s beneficial ownership is reported in the table above as the Ownership Cap as of April 12, 2024, which is based on an aggregate of 8,667,723 shares of the Company, consisting of (i) 7,809,618 of the Company’s shares outstanding as of April 12, 2024 and (ii) warrants to purchase 858,105 of the Company’s shares. Oaktree Holdings, LLC jointly filed a Schedule 13G/A with the Securities and Exchange Commission on February 14, 2024, reporting securities deemed to be beneficially owned as of December 31, 2023, representing the number of shares it would own under the Ownership Cap based on the number of shares of common stock of the Company outstanding as of December 31, 2023, with the following Reporting Persons: Opps OCW Holdings, LLC, a Delaware limited liability company (Opps OCW Holdings), in its capacity as the direct owner of an aggregate of shares and warrants exercisable to the extent of the Ownership Cap; ROF8 OCW MAV PT, LLC, a Delaware limited partnership (ROF8), in its capacity as the direct owner of an aggregate of shares and warrants exercisable to the extent of the Ownership Cap; Oaktree Fund GP, LLC, a Delaware limited liability company (Fund GP), in its capacity as the manager of Opps OCW Holdings and ROF8; Oaktree Fund GP I, L.P., a Delaware limited partnership (GP I), in its capacity as the managing member of Fund GP; Oaktree Capital I, L.P., a Delaware limited partnership (Capital I), in its capacity as the general partner of GP I; OCM Holdings I, LLC, a Delaware limited liability company (Holdings I), in its capacity as the general partner of Capital I; Oaktree Holdings, LLC, a Delaware limited liability company (Holdings) in its capacity as the managing member of Holdings I; Oaktree Capital Group, LLC, a Delaware limited liability company (OCG), in its capacity as the indirect manager of Opps OCW Holdings and ROF8; Oaktree Capital Group Holdings GP, LLC, a Delaware limited liability company (OCGH GP), in its capacity as the indirect owner of the class B units of OCG; Brookfield Corporation., an Ontario corporation (BAM), in its capacity as the indirect owner of the class A units of OCG; and BAM Partners Trust, a trust established under the laws of Ontario (BAM Partnership), in its capacity as the sole owner of Class B Limited Voting Shares of BAM. The principal business address of each of the Reporting Persons other than BAM, BAM Partnership and BAM Partners is 333 S. Grand Avenue, 28th Floor, Los Angeles, CA 90071. The principal business address of BAM, BAM Partnership and BAM Partners is Brookfield Place, Suite 300, 181 Bay Street, P.O. Box 762, Toronto, Ontario, Canada M5J 2T3.

 

(3)Long Focus Capital Management, LLC: Based solely on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2024 reporting securities beneficially owned as of December 31, 2023, by Long Focus Capital Management, LLC (LFCM LLC), a Delaware single member limited liability company; Long Focus Capital Master, LTD. (LFCM LTD), a Cayman Islands limited company; Condagua, LLC, a Delaware single member limited liability company; John B. Helmers, a United States citizen; and A. Glenn Helmers, a United States citizen, each of LFCM LLC and John B. Helmers reports shared voting and dispositive power of 652,088 shares, LFCM LTD reports shared voting and dispositive power of 309,964 shares, and each of Condagua, LLC and A. Glenn Helmers reports shared voting and dispositive power of 342,124 shares. LFCM LLC, John B. Helmers and A. Glenn Helmers directly own no common stock. Pursuant to an investment management agreement, LFCM LLC maintains investment and voting power with respect to the securities held by LFCM LTD. John B. Helmers controls LFCM, LLC, and has investment and voting power with respect to Condagua, LLC. A. Glenn Helmers controls Condagua, LLC.

 

(4)Mr. Amster: Based solely on information contained in a Schedule 13D/A filed with the Securities and Exchange Commission on January 25, 2023 reporting securities beneficially owned as of January 17, 2023, Mr. Amster reports sole voting and dispositive power of 282,920 shares and shared voting and dispositive power of 333,786 shares, Pleasant Lake Skoien Investments LLC reports sole voting and dispositive power of 8,818 shares and shared voting and dispositive power of 607,888 shares; Pleasant Lake Apts. Limited Partnership reports sole voting and dispositive power of 31,700 shares and shared voting and dispositive power of 585,006 shares; Howard Amster 2019 Charitable Remainder Unitrust #1 reports sole voting and dispositive power of 1,692 shares and shared voting and dispositive power of 615,014 shares; Howard Amster 2019 Charitable Remainder Unitrust #2 reports sole voting and dispositive power of 439 shares and shared voting and dispositive power of 616,267 shares; Howard Amster 2019 Charitable Remainder Unitrust #5 reports sole voting and dispositive power of 5,635 shares and shared voting and dispositive power of 611,071 shares; Amster Limited Partnership reports sole voting and dispositive power of 13,650 shares and shared voting and dispositive power of 603,056 shares; Laughlin Holdings LLC reports sole voting and dispositive power of 38,377 shares and shared voting and dispositive power of 578,329 shares; Ramat Securities Ltd. reports sole voting and dispositive power of 199,007 shares and shared voting and dispositive power of 417,699 shares; Pleasant Lakes Apartments Corp. reports sole voting and dispositive power of 157 shares and shared voting and dispositive power of 616,549 shares; Howard Amster 2019 Charitable Remainder Unitrust #3 reports sole voting and dispositive power of 34,262 shares and shared voting and dispositive power of 582,444 shares; and Howard Amster Charitable Remainder Unitrust U/A DTD 04/22/1998 reports sole voting and dispositive power of 49 shares and shared voting and dispositive power of 616,657 shares.

 

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(5)Deer Park Road Management Company, LP: Based solely on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 14, 2024, reporting securities deemed to be beneficially owned as of December 31, 2023, by Deer Park Road Management Company, LP (Deer Park); Deer Park Road Management GP, LLC (DPRM); Deer Park Road Corporation (DPRC); Michael Craig-Scheckman; AgateCreek LLC (AgateCreek); and Scott Edward Burg, each of which reports shared voting and dispositive power of 577,921 shares held for the account of STS Master Fund, Ltd. (STS Master Fund), which is an exempted company organized under the laws of the Cayman Islands. Deer Park serves as investment adviser to the STS Master Fund and, in such capacity, exercises voting and investment power over the shares held in the account for the STS Master Fund. DPRM is the general partner of Deer Park. Each of DPRC and AgateCreek is a member of DPRM. Mr. Craig-Scheckman is the Chief Executive Officer of each of Deer Park and DPRC and the majority owner of DPRC. Mr. Burg is the Chief Investment Officer of Deer Park and the sole member of AgateCreek.

 

(6)BlackRock, Inc.: Based solely on information contained in a Schedule 13G filed with the Securities and Exchange Commission on February 6, 2024, reporting securities deemed to be beneficially owned as of December 31, 2023, by BlackRock, Inc. Pursuant to the Schedule 13G, BlackRock, Inc. has sole voting power of 473,456 shares and sole dispositive power of 482,146 shares and is reporting beneficial ownership of the shares as the parent holding company or control person of Aperio Group, LLC, BlackRock Advisors, LLC, BlackRock Fund Advisors, BlackRock Institutional Trust Company, National Association, BlackRock Financial Management, Inc. and BlackRock Investment Management, LLC.

 

(7)Mr. Sella: Based solely on information contained in a Schedule 13G/A filed with the Securities and Exchange Commission on February 6, 2020 reporting securities beneficially owned as of December 31, 2019, Mr. Sella reports sole voting and dispositive power with respect to 432,028 shares, consisting of 409,289 shares held of record by Roberto Marco Sella and 22,739 shares held of record by LL Charitable Foundation, of which Mr. Sella serves as President. Mr. Sella reports shared voting and dispositive power with respect to 22,739 shares held of record by the Roberto Sella 2012 Family Trust (the Trust). Francine Sella, Mr. Sella’s spouse, and Mr. Sella’s minor children are beneficiaries of the Trust. Francine Sella is a co-trustee of the Trust and in such capacity, Francine Sella has voting power over and power to dispose of the 22,739 shares of Common Stock held by the Trust. Mr. Sella is not a beneficiary of the Trust.

 

(8)Mr. Anderson serves as Executive Vice President and Chief Servicing Officer. Includes shares underlying 3,685 options which are presently exercisable and 1,125 options which could become exercisable within 60 days of April 12, 2024.

 

(9)Mr. Bowers serves as a director. Includes shares underlying 4,424 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director.

 

(10)Dr. Britell serves as a director. Includes shares underlying 4,424 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director. Also includes 3,000 shares held by trust.

 

(11)Mr. Busquet serves as a director. Includes shares underlying 4,424 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director. Also includes 1,000 shares held jointly with spouse.

 

(12)Ms. Caldwell serves as a director. Does not include shares underlying 2,383 vested RSUs and 4,424 RSUs which will vest May 23, 2024 subject to certain conditions, in each case which are not settleable until the six-month anniversary of the director’s termination of service. Ms. Caldwell is not standing for re-election.

 

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(13)Mr. Henley served as Executive Vice President and Chief Growth Officer through December 31, 2023. All shares held jointly with spouse.

 

(14)Ms. Merkle serves as a director. Consists of shares underlying 642 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director. Ms. Merkle joined the Board April 1, 2024.

 

(15)Mr. Messina serves as Chair of the Board, President, and Chief Executive Officer. Includes shares underlying 17,799 options which are presently exercisable. Also includes 23,554 shares held jointly with spouse.

 

(16)Mr. O’Neil serves as Executive Vice President and Chief Financial Officer.

 

(17)Dr. Soaries serves as a director. Includes shares underlying 4,424 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director. Does not include 4,981 shares underlying vested RSUs which are not settleable until the six-month anniversary of the director’s termination of service.

 

(18)Mr. Stein serves as a director. Includes shares underlying 4,424 RSUs which will vest May 23, 2024 subject to certain conditions relating to the individual’s service as a director. Also includes 24,798 shares held by trust.

 

(19)Mr. Zeleny serves as Executive Vice President and Chief Administrative Officer.

 

(20)Includes 19,484 shares and shares underlying 728 stock options which are presently exercisable held by Jenna D. Evans, Francois Grunenwald, J. Andrew Peach, Joseph J. Samarias, and Aaron Wade who are current executive officers but not Named Executive Officers. Does not include shares held by Mr. Henley.

 

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Equity Compensation Plan Information

 

The following table sets forth information as of the end of the most recently completed fiscal year with respect to compensation plans under which our equity securities are authorized for issuance. As of the end of the most recently completed fiscal year, we did not maintain an equity compensation plan that had not previously been approved by security holders.

 

Plan Category 

Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

(#)(1)

  

Weighted average

exercise price of

outstanding options,

warrants and rights

($)(2)

  

Number of securities

remaining available for

future issuance under

equity compensation

plans(3)

(#)

 
Equity compensation plans approved by security holders   791,595    94.46    334,763 
Equity compensation plans not approved by security holders            
Total   791,595    94.46    334,763 

 

(1) Includes 34,657 shares subject to outstanding stock option awards and 756,938 shares subject to outstanding restricted stock unit awards (including outstanding performance-based restricted stock unit awards, which are presented at their target level of performance).
   
(2) Calculated exclusive of outstanding restricted stock unit awards, which do not have an exercise price.
   
(3) Represents shares available for new award grants under the 2021 Plan as of December 31, 2023. Each share issued under the 2021 Plan pursuant to an award other than a stock option or other purchase right in which the participant pays the fair market value for such share measured as of the grant date, or appreciation right which is based upon the fair market value of a share as of the grant date, shall reduce the number of available shares by 1.2. Pursuant to the 2021 Plan, any shares subject to (1) restricted stock and restricted stock unit awards or (2) stock options granted under our 2007 Equity Incentive Plan and 2017 Performance Incentive Plan that are presently outstanding which are subsequently forfeited, terminated, canceled, or otherwise reacquired by the Company will increase the pool of shares available for new awards under the 2021 Plan at the rate of 1.2 shares or 1.0 shares, respectively. Long-term incentive awards issued in the form of cash-settled restricted stock units do not reduce available shares under the 2021 Plan. This table does not reflect the 350,000 additional shares that will be available for issuance under the 2021 Plan if shareholders approve the 2021 Plan Amendment.

 

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LETTER FROM COMPENSATION COMMITTEE CHAIR

 

Dear Fellow Shareholders:

 

In the following Compensation Discussion and Analysis, we have provided the context and rationale that the Compensation and Human Capital Committee (Compensation Committee) used in crafting the framework for compensation analysis and determining the compensation for our named executive officers in 2023.

 

The mortgage environment in 2023 continued to be challenging due to elevated and volatile interest rates, turmoil in the financial sector and an uncertain economic climate, which required the management team and our entire employee population to respond to difficult market conditions with speed and agility. They have taken decisive action to further enhance our cost structure versus prior years while improving customer satisfaction and maintaining the highest standards of quality and service excellence. At the same time, they continue to drive capital-light growth in our servicing portfolio, expand capital partner relationships and create a strong foundation to accelerate growth.

 

Building a business model and demonstrating the operational excellence and capabilities which will allow Ocwen to achieve GAAP profitability on a sustained basis regardless of mortgage cycle is the most important priority we hear from shareholders and potential investors. Our business and operational plan are designed each year to drive this strategy of long-term profitability.

 

Specifically, in 2023, we set out to execute against our key objectives, each with appropriate metrics and targets as captured in our Corporate AIP scorecard:

 

  Profitability;
  Prudent growth;
  Increasing higher margin products;
  Improving our cost leadership position;
  Maintaining high-quality operational execution;
  Maintaining an engaged and productive workforce while continuing to make progress on diversity and inclusion; and
  Improving customer and client satisfaction.

 

Looking back, the strength of our balanced and diversified business model and management’s execution of our key objectives enabled us to deliver sequential quarter increases to adjusted pre-tax income in each quarter of 2023, excluding our asset recovery transaction in the second quarter. In 2023, we grew our average servicing portfolio to $292 billion, increased the number of MSR capital partners to five, doubled the UPB of MSR sales to our capital partners, built a robust subservicing opportunity pipeline, and increased the mix of higher-margin products to 39% of total originations volume. We continued to improve our servicing cost structure and built a significant cost advantage with a cost per loan favorable to large non-banks over twice our portfolio size, while delivering improved borrower and client satisfaction, all through investments in technology, process enhancements, and our global operating capability. Again, we were honored with Fannie Mae’s 2023 STARTM award for servicing excellence and achieved Housing and Urban Development (HUD) Tier 1 servicer ranking. We retired $15 million of corporate debt, consistent with our objective of de-levering the Company, and our total liquidity as of year-end increased 10.5% from 2022 to $242 billion, preserving capital for growth opportunities at high margin returns, as well as for additional opportunistic corporate debt retirement.

 

Looking ahead at what is expected to be a continued high interest rate environment, we have a solid foundation to create value through our broad originations capabilities and best-in-class servicing platform, which we believe positions us to deliver strong results in 2024 and beyond.

 

I invite you to read the following Compensation Discussion and Analysis for further details on our decisions relating to 2023 compensation, and we look forward to further shareholder engagement.

 

Sincerely,

Jacques Busquet

Chair, Compensation and Human Capital Committee

 

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EXECUTIVE COMPENSATION

 

Compensation Discussion and Analysis

 

Business Highlights

 

The design and the application of our executive compensation programs support organizational alignment around the achievement of Ocwen’s business plan and our performance against that plan. 2023 continued to be challenging year in which interest rates remained at historically high levels that significantly impacted mortgage originations. Our strong and scalable servicing platform delivered sustained income, including through our superior special servicing capabilities, while improving cost structure and customer satisfaction levels, delivering best-in-class operational performance, and maintaining robust risk and compliance metrics. Originations performed strongly despite continued market headwinds due to a focus on higher margin products and continued reduction in costs per loan despite lower volumes in both the consumer direct and reverse channels.

 

Important business highlights that the management team delivered against include:

 

  Despite GAAP net loss of $64 million driven by $89 million reduction in unrealized MSR value change due to rates and assumptions, net of hedge, delivered $49 million full year adjusted pre-tax income and 10.1% adjusted pre-tax return on equity.
  Grew FY 2023 average servicing UPB to $292 billion, an increase of over $10 billion from FY 2022. Built a strong and diverse network of MSR capital partner relationships from three to five to drive our capital light growth strategy and doubled the UPB of MSR sales to capital partners compared to 2022.
  Increased mix of higher-margin products, including consumer direct, reverse and correspondent GNMA, best efforts and non-delegated, from 21% in 2022 to 39% in 2023.
  Delivered best-in-class operating performance within our servicing segment, earning Fannie Mae’s STARTM recognition and HUD Tier 1 servicer ranking, both for the third consecutive year, and was named the Affiliate Company of the Year by the National Association of Mortgage Bankers.
  Maintained a highly competitive cost structure through technology enhancements, end-to-end process automation, leveraging our significant offshore workforce and a continuous focus on cost improvement, reducing operating expenses over $120 million, or 23%, from 2022, and consistently delivered lower delinquency levels than the industry average.
  Increased total liquidity, comprised of cash and borrowing capacity available under our debt facilities, by $23 million, or 10%, versus year-end 2022, even with $15 million senior corporate debt reduction, maintaining our agility to address market opportunities and risks, and retire additional debt.

 

For more information regarding our use of non-GAAP financial measures such as adjusted pre-tax income and their reconciliation to the most comparable GAAP metric, please see the press release included as an exhibit to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2024.

 

Compensation Highlights

 

The Compensation Committee designed the 2023 executive compensation program to align with the organization’s efforts to achieve key strategic and operational objectives and to adhere to evolving compensation and governance best practices, including ensuring a rigorous link between compensation and performance and shareholder value creation.

 

The key features of our 2023 executive compensation program relating to pay decisions, program design and shareholder engagement are highlighted below:

 

  Aligned the structure of our annual incentive plan (AIP) with key strategic objectives, including profitability, growth and operational execution, and continued to incorporate diversity, equity and inclusion (DE&I) metrics to reinforce our commitment to effective human capital management practices.

 

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  Incorporated a service excellence modifier to the AIP to adjust results based on how we deliver on our commitments to our customers and clients, further promoting one of our core values.
  Linked long-term equity awards to total shareholder return relative to a performance peer group to align with shareholder expectations, including special performance equity awards provided to recognize leadership and contributions as we navigate the volatile market, and provided for awards to settle in shares of common stock to build executive stock ownership in the Company.
  Adjusted certain executives’ target compensation in recognition of performance and criticality to delivering on strategic priorities and as a result of an evaluation of labor market conditions.

 

Our named executive officers (NEOs) for 2023, whose compensation we will discuss in detail below, are as follows:

 

Name   Position
Glen A. Messina   President and Chief Executive Officer
Sean B. O’Neil   Executive Vice President and Chief Financial Officer
Scott W. Anderson   Executive Vice President and Chief Servicing Officer
Dennis Zeleny   Executive Vice President and Chief Administrative Officer
George T. Henley(1)   Former Executive Vice President and Chief Growth Officer

 

(1)Mr. Henley departed this role as of December 31, 2023.

 

Philosophy and Objectives of Our Executive Compensation Program

 

The philosophy underlying our executive compensation program is to provide an attractive, flexible, and market-based total compensation program that aligns the interests of executives and shareholders by rewarding both short-term and long-term performance against specific financial and strategic objectives designed to improve long-term shareholder value.

 

Equally important, our compensation programs are designed to communicate our goals and reinforce our standards as they relate to risk, compliance and leadership, not only to our senior management team, but across our entire employee population. We employ a variety of cash and equity-based programs based on business objectives, including annual incentive grants towards the achievement of short- and long-term objectives, sign-on and retention awards to encourage employee commitment to the Company, and recognition programs for exceptional performance.

 

Within this context, we believe our executive compensation programs enable us to:

 

  Retain and hire top-caliber experienced executives: In a tight labor market and volatile industry, we believe it is critical that we offer compensation opportunities that allow us to attract and retain strong, proven executive talent.
     
  Pay for performance: A significant portion of our annual target executive compensation (the sum of base salary, annual target bonus, and target value of annual equity program awards) – 85% for the President and Chief Executive Officer (CEO) and 69% for other NEOs on average – was dependent on the Company’s business performance and our executive officers’ contribution to that performance, and the performance of our stock (described further below in Variable Pay and Incentive Programs).
     
  Align compensation with shareholder interests: A consequential portion of our annual target executive compensation – 62% for the CEO and 37% for other NEOs on average – was directly tied to total shareholder return or stock price. An additional portion of annual target executive compensation – 23% for the CEO and 31% for other NEOs on average – was tied to net income, return on equity, and other profitability and operating excellence objectives, emphasizing our focus on shareholder value creation (further described below under “Pay Measures”).
     
  Reinforce a commitment to serve all stakeholders: We believe that taking all stakeholders’ opinions into account leads to long-term shareholder value creation. As such, annual incentive compensation awards were subject to a 20% adjustment – positive or negative – based on customer satisfaction and process quality results, demonstrating our continued commitment to supporting our borrowers. Those awards are also determined by an assessment of performance in promoting a culture of appropriate risk management and compliance, as well as demonstrating strong leadership behaviors.

 

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Variable Pay and Incentive Programs

 

To create a strong link between our incentive compensation opportunities and our short-term and long-term objectives, we use two specific programs: our Annual Incentive Plan (AIP) and the grant of long-term incentive awards (LTIP awards) under our 2021 Equity Incentive Plan.

 

The chart below illustrates the portions of our NEOs’ annual target executive compensation that are delivered through our incentive programs. The Committee determines target compensation amounts after consideration of multiple factors, including comparative data from our peer group and general survey data provided by its independent compensation consultant (described below).

 

Element of Annual Target Compensation(a)   Description   Percent of CEO Total Annual Target Compensation(b)   Average Percent of non-CEO NEO Total Annual Target Compensation(b)
Salary   Salaries are the only element of total target compensation that is not at risk based on short- or long-term performance.   15%   31.3%
AIP   Funding for our annual short-term incentive program is linked to performance against key priorities of the Company, which is adjusted according to customer satisfaction and quality scores. Individual awards are further modified by the executive’s overall performance.   23%   31.3%
LTIP Awards   Half of the award is in the form of Restricted Stock Units (RSUs) that vest annually over three years in equal tranches. The other half is in the form of Performance-Restricted Stock Units (PRSUs) that cliff vest at the end of three years provided minimum total shareholder return (TSR) level has been achieved relative to a performance peer group.   62%   37.4%

 

(a)Other compensation that is available to all of our U.S. employees includes medical, dental and life insurance benefit programs. 401(k) matching contributions account for less than 0.1% of our NEOs’ compensation.
(b)Total Annual Target Compensation percentages do not include special awards.

 

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Pay Measures

 

Our programs are designed to align the interests of our executives with the interests of our shareholders, and therefore link the drivers of short-term and long-term value creation with our executive compensation performance metrics. The performance metrics used in our incentive programs directly link Company performance to the compensation earned by each executive, with total shareholder return being the greatest link to compensation actually paid, as illustrated below.

 

Pay Measure   Description   Percent of CEO 2023 Total Target Compensation   Average Percent of non-CEO NEO 2023 Total Target Compensation
Absolute (and Relative) Total Shareholder Return   Our long-term incentive program grants equity-based awards with half of target value as time-vested restricted stock units and half as performance-based units determined by TSR performance relative to a peer group.   62% (31%)   37% (19%)
Net Income   Full-year GAAP net income and full-year adjusted pre-tax income combined accounted for 36.8% of the total weight of our AIP Scorecard.(1)   9%   12%
Return on Equity   Second-half after-tax return on equity (ROE), excluding notables, represented 21.1% of the total weight of our AIP Scorecard.   4%   6%
Growth   UPB growth and cash yields on owned servicing originations accounted for 26.3% of the total weight of our AIP Scorecard.   6%   8%
Productivity   Expenses as a percentage of either revenue or UPB accounted for 10.5% of the total weight of our 2022 AIP Scorecard.   2%   3%
Diversity, Equity & Inclusion   Executing objectives in our DE&I road map accounted for 5.3% of the total weight of our AIP Scorecard.   1%   2%

 

(1)For a discussion of how we measure pre-tax income before notable items and a reconciliation to financial measures prepared under GAAP, please see our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2024.

 

Pay Versus Performance

 

Our variable pay programs, particularly our LTIP awards, have created strong alignment between our NEOs’ total compensation and long-term shareholder value creation. As required by Item 402(v) of Regulation S-K, the table below illustrates the relationship between “Compensation Actually Paid” and certain financial performance measures of the Company.

 

Year 

Summary Compensation Table Total for CEO(1)

($)

  

Compensation Actually Paid to CEO(2)

($)

  

Compensation Table Total for non-CEO NEOs(1)

($)

   Average Compensation Actually Paid to non-CEO NEOs(2) ($)  

Total Shareholder Return(3)

($)

  

Peer Group Total Shareholder Return(4)

($)

  

Net Income(5)

($MM)

   Return On Equity (ROE), excluding notables(6) 
         Average Summary       Value of Initial Fixed $100 Investment Based On      After-Tax  
Year 

Summary Compensation Table Total for CEO(1)

($)

  

Compensation Actually Paid to CEO(2)

($)

  

Compensation Table Total for non-CEO NEOs(1)

($)

   Average Compensation Actually Paid to non-CEO NEOs(2) ($)  

Total Shareholder Return(3)

($)

  

Peer Group Total Shareholder Return(4)

($)

  

Net Income(5)

($MM)

   Return On Equity (ROE), excluding notables(6) 
2023   8,153,781    4,818,659    2,345,570    1,622,072    150    125    (63.7)   8.8%
2022   6,029,718    2,722,635    1,739,912    1,223,474    149    97    25.7    (11.1)%
2021   6,627,653    10,670,774    1,644,825    1,837,428    195    115    18.1    16.8%
2020   4,587,915    9,451,692    1,511,467    2,283,997    141    99    (40.2)   22.8%

 

(1)The dollar amounts reported are the amounts of total compensation reported for each corresponding year in the “Total” column of the Summary Compensation Table (below for 2023) for our CEO and non-CEO NEOs as a group. Our CEO was Glen Messina. Our NEOs for each applicable year were as follows: (i) for 2023, Scott W. Anderson, George T. Henley, Sean B. O’Neil, Dennis Zeleny,(ii) for 2022, Scott W. Anderson, George T. Henley, Sean B. O’Neil, Dennis Zeleny, June C. Campbell and Albert J. Celini; (iii) for 2021, Scott W. Anderson, June C. Campbell, George T. Henley, Dennis Zeleny and Timothy J. Yanoti; and (iv) for 2020, Scott W. Anderson, John V. Britti, June C. Campbell and Dennis Zeleny.
(2)The dollar amounts reported as “compensation actually paid” do not reflect the actual amount of compensation earned by or paid to our CEO and non-CEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total compensation for each year to determine the “compensation actually paid”:
(3) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.
(4) Cumulative TSR performance of our peer group is weighted by their respective market capitalization as of December 31, 2019. Our peer group is the same peer group described below in “Role of Compensation Committee”. Current peer group companies Guild Holdings Company, loanDepot and UWM Holdings are not included in the weighted average cumulative TSR calculation because they were publicly listed after the beginning of the four-year measurement period. Similarly, cumulative TSR performance of companies used in prior peer groups who have since been delisted are not included in the weighted average cumulative TSR calculation, including Black Knight, CenterState Bank, CoreLogic, Flagstar Bancorp, Home Point Capital and People’s United Financial. Peer Group Total Shareholder Return values for our peer group used in 2021-2023 would be $134, $105, $125, and $102 for 2023, 2022, 2021 and 2020, respectively; for our peer group used in 2020-2021 would be $109, $108, $125 and $112 for 2023, 2022, 2021 and 2020, respectively, and for our peer group used in 2019-2020 would be $97, $106, $141 and $110 for 2023, 2022, 2021 and 2020, respectively. We revise our peer group from time to time to accommodate mergers and acquisitions activity within the previous peer group and the evolution of our business model, and to better reflect peers subject to similar regulatory oversight for performance and business practice benchmarking.
(5) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year.
(6) After-Tax Return On Equity (ROE) is calculated as net income divided by average total equity, excluding notables. For a discussion of how we measure pre-tax income before notable items and a reconciliation to financial measures prepared under GAAP, please see our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2024.

 

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(2)The dollar amounts reported as “compensation actually paid” do not reflect the actual amount of compensation earned by or paid to our CEO and non-CEO NEOs as a group during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total compensation for each year to determine the “compensation actually paid”:

 

Executive(s)  Year  

Reported Summary Compensation Table Total

($)

  

Reported Value of Equity Awards

($)

  

Equity Award Adjustments(a)

($)

  

Compensation Actually Paid

($)

 
CEO   2023    8,153,781    (5,563,820)   2,228,698    4,818,659 
    2022    6,029,718    (4,233,065)   925,981    2,722,635 
    2021    6,627,653    (3,914,160)   7,957,281    10,670,774 
    2020    4,587,915    (1,316,250)   6,180,028    9,451,692 
Average of Non-CEO NEOs   2023    2,345,570    (1,034,798)   311,300    1,622,072 
    2022    1,739,912    (692,544)   176,106    1,223,474 
    2021    1,644,825    (406,315)   598,919    1,837,428 
    2020    1,511,467    (321,086)   1,093,616    2,283,997 

 

(a)The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in the same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; and (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, the amount equal to the fair value at the end of the prior fiscal year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant . The amounts deducted or added in calculating the equity award adjustments are as follows (adjustments for pension or dividend payments are not covered, as the Company does not have supplemental executive requirement plans and does not pay dividends on equity awards, and due to rounding, the calculated final value of the numbers shown in the following table may not be the precise values reported above):

 

Executive(s)  Year  

Year End Fair Value of Equity Awards Granted in the Year

($)

  

Year over Year Change in Fair Value of Prior Year Outstanding and Unvested Equity Awards

($)

  

Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year

($)

  

Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year

($)

  

Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year

($)

  

Total Equity Award Adjustments

($)

 
CEO   2023    4,955,391    (402,504)       (2,324,188)       2,228,698 
    2022    5,778,644    (2,581,410)       (864,643)   (1,406,610)   925,981 
    2021    5,873,834    2,146,897        (42,840)   (20,610)   7,957,281 
    2020    5,483,250    795,627        (93,059)   (5,790)   6,180,028 
Average of Non-CEO NEOs   2023    731,721    (257,444)   56,560    (134,341)   (85,196)   311,300 
    2022    783,097    (120,491)   6,852    (133,625)   (359,728)   176,106 
    2021    598,919    281,960        (6,938)   (275,022)   598,919 
    2020    1,027,903    81,250        (10,969)   (4,568)   1,093,616 

 

(3) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.

 

(4) Cumulative TSR performance of our peer group is weighted by their respective market capitalization as of December 31, 2019. Our peer group is the same peer group described below in “Role of Compensation Committee”. Current peer group companies Guild Holdings Company, loanDepot and UWM Holdings are not included in the weighted average cumulative TSR calculation because they were publicly listed after the beginning of the four-year measurement period. Similarly, cumulative TSR performance of companies used in prior peer groups who have since been delisted are not included in the weighted average cumulative TSR calculation, including Black Knight, CenterState Bank, CoreLogic, Flagstar Bancorp, Home Point Capital and People’s United Financial. Peer Group Total Shareholder Return values for our peer group used in 2021-2023 would be $134, $105, $125, and $102 for 2023, 2022, 2021 and 2020, respectively; for our peer group used in 2020-2021 would be $109, $108, $125 and $112 for 2023, 2022, 2021 and 2020, respectively, and for our peer group used in 2019-2020 would be $97, $106, $141 and $110 for 2023, 2022, 2021 and 2020, respectively. We revise our peer group from time to time to accommodate mergers and acquisitions activity within the previous peer group and the evolution of our business model, and to better reflect peers subject to similar regulatory oversight for performance and business practice benchmarking.

 

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(5) The dollar amounts reported represent the amount of net income (loss) reflected in the Company’s audited financial statements for the applicable year.

 

(6) After-Tax Return On Equity (ROE) is calculated as net income divided by average total equity, excluding notables. For a discussion of how we measure pre-tax income before notable items and a reconciliation to financial measures prepared under GAAP, please see our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2024.

 

With our focus on long-term performance, we do not specifically align our performance measures with “compensation actually paid”. Nonetheless, in accordance with Item 402(v) of Regulation S-K, below are the relationships between compensation actually paid to the financial measures presented above:

 

  Cumulative Company TSR and Compensation Actually Paid: In 2020 and 2021, increases to our share price contributed to higher compensation actually paid values versus the Summary Compensation Table value. In 2022, the 23% decrease to our year-end closing share price, plus the forfeiture of our 2019 performance-restricted stock units due to unattained metrics, resulted in a significant reduction compensation actually paid compared to 2021. In 2023, the above-target achievement of our 2020 performance-restricted stock units resulted in an increase to compensation actually paid compared to 2022.

 

  Cumulative Company TSR and Cumulative Peer Group TSR: Our cumulative total shareholder return has been at least 19% higher than our peer group average in each of the last three years, which has rewarded our executives, as described below in “Performance Results of Long-Term Incentive Awards”.

 

  Net Income and Compensation Actually Paid: Net Income was a metric included in our AIP scorecard each of the last four years. Performance was determined based on a percentage of target achieved in each respective year and reflected in final payout amounts.

 

  ROE and Compensation Actually Paid: Return on Equity was a metric included in our AIP scorecard in 2021, 2022 and 2023. Performance was determined based on a percentage of target achieved in each respective year and reflected in final payout amounts.

 

All information provided above under the “Pay versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference therein.

 

Equity-based Compensation Has Created Strong Alignment with Shareholder Value Creation

 

Our annual LTIP awards have created strong alignment between our NEOs’ total compensation and long-term shareholder value creation. These awards are a significant portion of total annual target pay for executives, and total outstanding award values place significant interest in long-term company share price performance.

 

The table below reflects each NEO’s annual target cash compensation and total equity holdings, excluding stock options, as of March 31, 2024, including shares of common stock beneficially owned and unvested restricted stock units. The table provides the value of those shares and restricted stock units based on the share price of our stock on March 31, 2024 and an illustrative diluted book value per share based on our publicly reported book value as of December 31, 2023. For example, the value of our CEO’s shares would increase over 70% (an additional $12.1 million) if our shares were trading at fully diluted book value compared to the March 31, 2024 share price.

 

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Value of Equity Held by Named Executive Officers(1)

 

               Value at $27.01 Share Price (price on 3/31/2024)   Value at $30.76 Share Price (price on 12/31/2023)   Value at $46.80 Fully Diluted Book Value Per Share(6) 
Name 

Total Annual Target Cash Compensation

($)

  

Unvested Stock Units(1)

(#)

  

Owned Shares(1)(3)

(#)

  

Value(2)(4)

($)

   % of Total Annual Target Cash Compensation  

Value(2)(5)

($)

   % of Total Annual Target Cash Compensation  

Value(2)(6)

($)

   % of Total Annual Target Cash Compensation 
Glen A. Messina   2,500,000    341,522    268,935    16,488,444    660%   18,777,657    751%   28,569,388    1143%
Sean B. O’Neil   1,100,000    97,932    10,462    2,927,722    266%   3,334,199    303%   5,072,839    461%
Scott W. Anderson   1,000,000    52,104    24,162    2,059,945    206%   2,345,942    235%   3,569,249    357%
Dennis Zeleny   1,000,000    49,712    11,520    1,653,876    165%   1,883,496    188%   2,865,658    287%
TOTAL   5,600,000    541,270    315,079    23,129,986    413%   26,341,295    470%   40,077,133    716%

 

  (1) Total equity includes shares of common stock beneficially owned plus unvested restricted stock units. For the vesting terms of our restricted stock units, see “Executive Compensation—Compensation Discussion and Analysis—2023 Long-Term Incentive (LTIP) Awards.”
  (2) Values reflect all outstanding stock units, including cash settled restricted stock units and excluding stock options, as of March 31, 2024, with performance-based units adjusted for interim performance as of March 31, 2024. There is no guarantee that time-based units or performance-based units will vest. Vesting of cash-settled stock units will reduce totals shown above. See “Compensation Discussion and Analysis - 2023 Long-Term Incentive (LTIP) Awards” and “Outstanding Equity Awards at Fiscal Year-End”, below, for additional detail on outstanding restricted stock units.
  (3) “Owned Shares” represents shares beneficially owned as of March 31, 2024. Includes shares held jointly, indirectly by spouse, and indirectly by trust.
  (4) Calculations are based on share price as of March 28, 2024, the last closing price prior March 31, 2024, and equity holdings as of March 31, 2024. Our future stock price may vary materially from the closing price shown in the table. The closing price per share of our common stock on April 11, 2024 was $24.40 per share.
  (5) Calculations are based on $30.76 closing price per share of our common stock on December 29, 2023, the last closing price prior to December 31, 2023, and March 31, 2024 equity holdings. Our future stock price may vary materially from the closing price shown in the table.
  (6) Calculations are based on March 31, 2024 equity holdings and fully diluted book value per share. Fully diluted book value per share is calculated based on the Company’s most recent publicly reported book value of $401.8 million at December 29, 2023 and 9,230,269 shares, comprised of 7,784,253 shares outstanding and 1,446,016 warrants held by Oaktree as of March 31, 2024. See “Business Relationships and Related Transactions – Relationship with Oaktree”, below. Assumes cashless exercise of Oaktree warrants using 10-day average of Volume Weighted Average Price (10 days ending on preceding day of exercise) on March 31, 2024 of $25.54. Does not give effect to issuance of shares underlying vested and unvested restricted stock units shown in table or stock options with strike prices above current trading prices.

 

The total shares owned and outstanding units granted to NEOs as of March 31, 2024 represent 11.2% of the diluted weighted average number (7,635,584) of shares of the Company’s common stock issued and outstanding in the 2023 fiscal year. When coupled with the holdings of non-management directors, as shown above, these groups collectively own shares and outstanding units representing 13.2% of the Company’s 2023 diluted weighted average shares outstanding.

 

As described further below, awards granted to NEOs in 2023 also applied a one-year holding requirement to shares acquired on vesting of newly-granted RSUs to continue to promote strong governance and risk management practices.

 

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Parties Involved in Compensation Decisions

 

The governance of our executive compensation programs generally occurs through interaction of three groups: the Compensation Committee, the Compensation Committee’s independent compensation consultant, and management. In 2023, on occasion and as it considered appropriate, the Compensation Committee enlisted the advice of outside counsel specializing in executive and non-employee director compensation matters to assist it in fulfilling its responsibilities under the Compensation Committee’s charter.

 

Role of the Compensation Committee

 

The Compensation Committee is responsible for overseeing the development and approval of our executive compensation and benefits policies and programs. The Compensation Committee, consisting of three independent directors, is responsible for the design, review and approval of all aspects of our executive compensation program. Among its duties, the Compensation Committee formulates recommendations to the Board of Directors for CEO compensation and reviews and approves all compensation recommendations for the other NEOs. Adjustments are made by the Compensation Committee in its judgment, taking into account compensation arrangements for comparable positions at peer group companies (discussed below), analysis prepared by WTW, the Compensation Committee’s independent compensation consultant, individual performance of the NEO, an assessment of the value of the individual’s performance going forward and compensation levels necessary to maintain and attract quality personnel. Compensation levels are also considered upon a promotion or other change in job responsibility. The Company considers feedback from shareholders, including feedback in the form of shareholder advisory votes on Ocwen’s executive compensation. Additionally, the Compensation Committee reviews an annual risk assessment prepared by the Chief Risk and Compliance Officer to evaluate the likelihood that NEO incentive compensation plans may induce management actions inconsistent with the Company’s risk appetite statement and core values.

 

The Compensation Committee’s review for NEOs also includes:

 

  approval of the AIP Corporate Scorecard, which drives the variable compensation for approximately 600 top managers of the company including the NEOs;
  evaluation of individual performance results to determine the AIP individual performance multiplier of each NEO;
  approval of any changes to compensation, including, but not limited to, base salary, short-term and long-term incentive award opportunities, severance payments and retention programs; and
  evaluation of the market competitiveness of each NEO’s total compensation (and principal elements of compensation) against relevant comparator groups, including broad-based industry survey data provided by the Compensation Committee’s independent compensation consultant (which is considered generally without focus on any particular company or group of companies in the survey other than the peer group companies noted below) as well as a peer group of companies that are recommended to the Compensation Committee by its independent compensation consultant based on a number of metrics, including industry classification, revenues, assets and number of employees. The peer group used to help inform compensation decisions from January through September 2023 is listed below.

 

Associated Banc-Corp Mr. Cooper Group Inc.
BankUnited, Inc. Navient Corporation
Finance of America Companies, Inc. PennyMac Financial Services, Inc.
Guild Holdings Company Radian Group Inc.
Home Point Capital Inc. South State Corporation
LendingTree, Inc. UWM Holdings Corporation
loanDepot, Inc. Walker & Dunlop, Inc.
MGIC Investment Corporation Webster Financial Corporation

 

In September 2023, the Compensation Committee revised the peer group to the list below to accommodate mergers and acquisitions activity within the previous peer group, and to ensure the constituent companies remain aligned with Ocwen’s business model and key metrics noted above.

 

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Associated Banc-Corp Mr. Cooper Group Inc.
Axos Financial, Inc. PennyMac Financial Services, Inc.
BankUnited, Inc. Radian Group Inc.
Finance of America Companies, Inc. South State Corporation
Guild Holdings Company UWM Holdings Corporation
LendingTree, Inc. Walker & Dunlop, Inc.
loanDepot, Inc. Webster Financial Corporation
MGIC Investment Corporation WSFS Financial Corporation

 

How We Make Compensation Decisions

 

Each year our executive and other compensation programs are developed and refined through a year’s worth of analysis and decision-making by the Compensation Committee. A typical year’s work is summarized below:

 

QUARTER 1   QUARTER 2   QUARTER 3   QUARTER 4

● Evaluate the Company’s prior year performance against the financial and strategic metrics set forth in the prior year’s AIP scorecard.

● Review and evaluate the individual performance of the CEO and each of our other NEOs and other executive officers.

● Determine the payouts to be made under the AIP based on prior year’s performance.

● Determine total target compensation levels for our NEOs and other executive officers, as informed by both market data and prior year’s performance.

● Establish the structure and targets for the current year’s AIP to align with the financial and strategic priorities for the Company.

● Establish the structure for the current year’s LTIP awards, including TSR or other performance objective.

 

● Prepare the Compensation Committee’s report and CD&A for the Proxy Statement.

● Review and discuss Say-on-Pay voting recommendations from proxy advisory firms.

● Review and discuss the results of the voting at the Annual Meeting.

● Review reports from the Compensation Committee’s independent compensation consultants on practices and trends in the industry.

 

 

● Undertake a review of the Company’s designated peer group to determine if any changes need to be made in order for it to remain appropriate.

● Commence shareholder engagement focused on the Say-on-Pay vote at the Annual Meeting to inform pay decisions and design compensation programs for the coming year.

● Review human capital initiatives to support growth.

 

 

● Continue shareholder engagement focused on Say-on-Pay vote at the Annual Meeting.

● Review the goals and objectives of the Company’s compensation programs.

● Conduct an assessment of executive compensation and independent director compensation against peer group and relevant general survey data provided by the Compensation Committee’s independent compensation consultant.

● Conduct comprehensive, risk-based review of the Company’s compensation policies and practices that is designed to ensure appropriate mitigation of undue risk.

 

 

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Roles of Executive Officers

 

The CEO is involved in the recommendation of certain compensation arrangements for approval by the Compensation Committee. The CEO, with the assistance of the Chief Administrative Officer, annually reviews the performance of the executive officers and is involved in formulating recommendations regarding equity compensation for the executive officers (other than himself, whose performance is reviewed and compensation determined by the Compensation Committee). The CEO presents his conclusions and recommendations regarding annual compensation and annual incentive opportunity amounts for the executive officers to the Compensation Committee for its consideration and approval. In formulating the conclusions and recommendations for the Chief Audit Executive, Chief Financial Officer, Chief Risk and Compliance Officer, and Chief Administrative Officer, the CEO consults with the Chairs of the Audit Committee, Risk and Compliance Committee and Compensation Committee to incorporate the views and perspectives of the relevant committee chair. The Compensation Committee can exercise its discretion in accepting, rejecting and/or modifying any such recommendations, subject to any applicable limits contained in any plan or agreements applicable to such awards. All compensation decisions with respect to the compensation of the CEO are made by the Compensation Committee, which consults with the other non-management directors and outside advisors to the extent it deems appropriate. The Chief Administrative Officer assists the CEO and the Compensation Committee by providing them with market data and other reference materials.

 

Role of Independent Compensation Consultant

 

The primary role of the Compensation Committee’s independent compensation consultant, WTW, is to provide advice to the Compensation Committee in connection with the development and approval of our compensation policies and programs. Except as otherwise noted in this Compensation Discussion and Analysis, the Compensation Committee’s decisions are the result of the Compensation Committee’s business judgment with respect to compensation matters, informed by the experiences of its members and analysis and input from independent compensation consultants, among other factors. The Compensation Committee has assessed the independence of WTW and has concluded that WTW’s engagement does not raise any conflict of interest with the Company or any of its directors or executive officers. WTW performed a number of services for the Compensation Committee, including but not limited to reviewing and providing guidance on:

 

  design of the annual AIP and LTIP awards;
  market competitiveness of compensation of our NEOs;
  Company’s peer group for purposes of informing compensation decisions;
  reports of proxy advisory firms, including ISS and Glass Lewis, relating to the proxy statement;
  market competitiveness of the compensation of our independent directors; and
  emerging best practices for executive and independent director compensation.

 

Shareholder Engagement and Consideration of Shareholder Advisors’ Input

 

The Compensation Committee and our Board of Directors value shareholder feedback and actively engage with our largest shareholders through outreach and direct meetings with active investors. The Committee also considers recommended best practices put forth by shareholder proxy advisory firms, such as ISS, to the extent these institutions’ recommendations are aligned with the interests of our shareholders. Shareholder input has helped shape our approach towards LTIP awards and related performance metrics and strengthened how we implement our pay-for-performance philosophy. We aspire to continued strong support for our executive pay decisions; in 2023, 85% of shareholder advisory votes were cast in favor of our Say-on-Pay proposal. We also intend to continue to hold an advisory Say-on-Pay vote at each annual meeting of shareholders.

 

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Key Governance Considerations in How We Design and Implement Our Compensation Programs

 

WHAT WE DO   WHAT WE DON’T DO

Pay for performance

Most of our NEOs’ pay is at-risk and not guaranteed. We set clear and transparent financial and strategic goals within our short- and long-term incentive awards which include performance-based vesting conditions.

 

No fixed term of employment agreements

We do not have employment agreements that provide for a fixed term of employment with any of our executive officers. Employment is at-will and provisions for separation and treatment of compensation is contained in applicable award documents or offer letters.

     

Discourage excessive risk taking

We operate within our risk management framework and include a balanced program design, multiple performance measures, claw-back and retention requirements. We also conduct an annual risk assessment of our NEO compensation plans to ensure they do not promote undue or excessive risk-taking.

 

No tax gross-ups

It is our policy to not provide tax gross-ups (other than for taxable relocation expenses for moves necessitated by our business), including tax gross-ups related to excess parachute payments as defined under section 280G of the Internal Revenue Code.

     

Retain an independent compensation consultant

The Compensation Committee has retained the services of WTW as an independent consultant that reports directly to the Chair of the Compensation Committee.

 

No option back-dating, re-pricing or reloading

We do not permit back-dating, re-pricing of stock options, or reloading of stock options. No stock options are granted with exercise prices that are below the closing price of Ocwen stock on the date of grant.

 

     

Caps on annual incentives

Our practice under the AIP provides for a maximum payout opportunity at 150% of the target incentive.

 

No hedging or pledging

We prohibit directors and all employees, including executive officers, from pledging shares of our stock as collateral for loans or for other reasons and from engaging in any activity that hedges the economic risk of an investment in our stock.

     

Introduced holding requirement for shares

Effective with equity granted to executives on or after March 31, 2022, shares acquired on vesting pursuant to those awards will be subject to a one-year holding period.

 

No “single-trigger” LTIP awards

Our LTIP awards do not automatically vest upon the occurrence of a change in control. Rather, these awards include double-trigger provisions such that following a change in control a NEO will only receive accelerated payouts if terminated without cause or upon voluntary resignation for good reason.

 

Base Salaries and Annual Incentive Targets for our NEOs

 

Base salaries and annual incentive targets are intended to provide a target level of cash compensation that is competitive and appropriate for the responsibilities of the executive’s position. The Compensation Committee determines each executive’s compensation levels based on its assessment of the nature and scope of each executive officer’s responsibilities, experience and performance, and an assessment of compensation levels necessary to maintain and attract quality personnel as informed by peer group and general industry survey data. As of December 31, 2023, the variable (AIP) proportion of total target cash compensation is 60% for the CEO and 50% for other NEOs.

 

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The table below reflects each NEO’s 2023 base salary and AIP target, which were unchanged from 2022 compensation levels.

 

Name 

Annual Salary

($)

  

Annual AIP Target

($ and % of Salary)

   Annual Total Target Cash Compensation ($) 
Glen A. Messina   1,000,000    1,500,000    150%   2,500,000 
Sean B. O’Neil   550,000    550,000    100%   1,100,000 
Scott W. Anderson   500,000    500,000    100%   1,000,000 
Dennis Zeleny   500,000    500,000    100%   1,000,000 
George T. Henley   500,000    500,000    100%   1,000,000 

 

2023 Annual Incentive Plan (AIP)

 

Ocwen’s annual incentive compensation opportunity for eligible employees, including our executive officers, is provided under the 1998 Annual Incentive Plan, as amended, which has been approved by our shareholders. The AIP award opportunity motivates executives to deliver against the Board-approved business plan and the key initiatives that the Compensation Committee, working with the CEO, management and the Compensation Committee’s independent advisor, believes will enhance Company performance and create a path for long-term shareholder value.

 

AIP award opportunities for each NEO were based on a combination of organization and individual performance, as summarized below and followed with additional detail further below:

 

  1. First, performance against the Corporate Scorecard objectives is used to calculate preliminary results.
  2. Scorecard results are then adjusted by a service excellence modifier to establish the baseline funding level for the entire plan.
  3. From there, organizational performance funding is allocated to each business unit and its managing NEO based on an assessment of the business unit’s achievement of its key priorities and the corresponding contributions to overall Corporate Scorecard results.
  4. Finally, each NEO’s award is adjusted based on an assessment of his or her individual performance against a number of key objectives unique to him or her, including demonstrated leadership in creating and sustaining a high-performing culture.

 

Corporate Scorecard

 

The Corporate Scorecard, which drives the overall funding for the AIP, is approved annually by the Compensation Committee. In determining whether to approve the Corporate Scorecard each year, the Compensation Committee considers a number of factors, including whether the goals are consistent with and likely to enhance corporate performance and long-term shareholder value and discourage executives from pursuing short-term goals that may not be consistent with achieving such long-term success, as well as the level of difficulty associated with attainment of each goal in the scorecard. The 2023 Corporate Scorecard objectives, shown below with final performance results, were directly aligned to the Board-approved 2023 business plan and our key business priorities, as follows:

 

  1. Profitability,
  2. Prudent growth,
  3. Expand higher margin products and services,
  4. Cost leadership,
  5. Operational excellence,
  6. Workforce engagement and diversity, and
  7. Service excellence.

 

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Financial performance, including net income and return on equity, constituted 58% of the overall scorecard weight as sustaining profitability was critical to delivering on shareholder expectations. Our other priorities were necessary to enable growth and improve efficiencies, and our focus on maintaining key employees in the midst of change is vital to our long-term success and our mission, values and operating principles. Additionally, because “helping homeowners is what we do”, the scorecard results are adjusted +/- 20% by a service excellence modifier that assesses how we deliver on our commitments to our customers and clients.

 

The Compensation Committee establishes the “target” performance of each goal at a level that it intends to be challenging to achieve, a “threshold” level for each goal that must be met in order for any portion of the incentive to be paid with respect to that goal, and an outstanding or “maximum” level for each goal that would result in payment of the maximum bonus opportunity with respect to that goal. The chart below depicts the level of achievement for a given objective on the scorecard and the corresponding incentive leverage that is applied to the target funding for the given objective.

 

Level of Achievement 

AIP Scorecard

% of Target Opportunity

  

Service Excellence Modifier

% of Target Opportunity

 
Maximum   150%   120%
Target   100%   100%
Threshold   50%   80%
Below Threshold   0%   80%

 

The Committee measured the level of performance achievement against scorecard and modifier objectives using quantitative assessments. The level of achievement was determined using straight-line interpolation between the “threshold”, “target” and “maximum” anchor posts, as applicable. Qualitative assessments were also applied to ensure achievement levels were consistent with expected broader strategic outcomes.

 

Prior to the Committee’s assessment of the level of performance achieved against scorecard and modifier objectives, the information on which the Committee based its assessment was first reviewed and verified by the Company’s internal audit, finance and risk management functions.

 

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Based on the Company’s final performance and the relative weightings assigned to each objective in both the Scorecard and modifier, the overall Corporate Scorecard funding was 86.2%, which was then multiplied by the 116.4% service excellence modifier for total results of 100.3%. Our Corporate Scorecard and service excellence modifier and corresponding achievement levels for each are detailed below:

 

Corporate Scorecard Objective  Objective Weight   Threshold   Target   Maximum   Performance Outcome   Performance Achievement   Weighted Performance Achievement 
Profitability(1)                                   
1a. Full-Year GAAP Net Income ($M)   15.8%  $-1   $12   $25   $-63.7   %   %
1b. Full-Year Adjusted Pre-Tax Net Income ($M)   21.1%  $4.3   $17.3   $30.3   $48.7    150%   31.6%
1c. Second Half After-Tax Return On Equity (ROE), excluding notables   21.1%   4.8%   7.3%   9.8%   9.6%   146%   30.8%
Operating Excellence                                   

2a. Prudent Growth: Originations Growth

Grow non-MAV-related subservicing additions ($B UPB)

   6.6%  $38   $43   $48   $19    %   —% 

2b. Prudent Growth: Originations Cash Yield

Owned servicing originated at cash yields higher than cost of capital

   6.6%   0.0%   0.5%   1.0%   0.48%   98%   6.4%

2c. Prudent Growth: Servicing

End of year total UPB ($B)

   13.2%  $334   $351   $369   $288    —%    —% 

3a. Productivity: Originations

Average operating expenses as a percent of Origination volume (bps)

   2.6%   43.5    41.4    39.3    35.9    150%   3.9%

3b. Productivity: Servicing

Average operating expenses as a percent of Servicing UPB (bps)

   6.3%   10.20    9.72    9.23    9.63    109%   6.9%

3c. Productivity: Corporate Functions

Average operating expenses as a percent of Servicing UPB (bps)

   1.6%   2.04    1.94    1.85    2.13    %   %

4. Diversity, Equity & Inclusion

Execute against the objectives contained in the four pillars of the DE&I Road Map (% of objectives met)

   5.3%   75%   83%   100%   92%   125%   6.6%
TOTAL   100%                          86.2%

 

(1) Full-Year GAAP Net Income and Adjusted Pre-Tax Income are inclusive of expense accrual for AIP. Second Half After-Tax Return On Equity (ROE) in Q3 and Q4 is calculated as Q3 and Q4 GAAP Net Income divided by Average of Q1 and Q2 Total Equity and Q3 and Q4 Total Equity. For a discussion of how we measure pre-tax income before notable items and a reconciliation to financial measures prepared under Generally Accepted Accounting Principles (GAAP), please see our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 27, 2024.

 

Employee Engagement

 

The Corporate Scorecard initially included an employee engagement metric weighted at 5%, measuring progress in employee survey results from Q2 2023 to Q4 2023. Management postponed the Q4 survey to allow for sufficient time to implement actions plans based on Q2 results in a visible and impactful manner.

 

Consequently, after considering the scores from the Q2 survey, which were strong and above external benchmarks despite significant expense and headcount reduction actions taken by management in response to the challenging business environment, the Compensation Committee determined that the 5% weight for that metric should be reallocated evenly among the remaining metrics (as shown above) so as not to favor any metric over another. In the Compensation Committee’s view, management remained focused on employee engagement throughout the year notwithstanding the absence of a Q4 Scorecard metric, including initiatives to improve communication, professional development, recognition and work-life balance.

 

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Diversity, Equity & Inclusion (see 4 above)

 

Diversity, equity, inclusiveness and respect are integral parts of our culture and work environment, and we are committed to being a globally diverse and inclusive workplace where every voice is heard. Our DE&I strategy, which we refer to as our “road map”, is built around the four pillars of our diversity program, with numerous initiatives and short-term actions to support each one. Our 2023 goals and key results are summarized below:

 

Pillar   Road Map Goals Key Results
Leadership   Strengthen the understanding and commitment of DE&I throughout all levels of the organization. Ensure all leaders fully understand the benefit of DE&I and can demonstrate inclusive work strategies.  

Implemented action plans in select areas to respond to employee feedback.

 

● Continued inclusive workplace efforts through affinity groups for women, African-Americans and LGBTQ+ employees.

         
Workforce   Increase our ability to attract and hire diverse talent and improve our DE&I brand.  

● Increased percentage of diverse representation in leadership and leadership candidate pools.

         
Community Engagement   Continue efforts to support external community engagement partnerships.  

Hosted borrower outreach events.

 

● Participated in external engagements with consumer advocacy and mortgage industry diversity councils.

         
Vendor Diversity   Strengthen partnerships with diverse supplier groups in the U.S. and expand or maintain supplier diversity efforts year over year.  

Maintained diverse vendor utilization rate.

● Promoted vendor diversity value proposition with key stakeholders.

 

Service Excellence Modifier

 

Corporate Scorecard results were adjusted based on how we performed in satisfying our customers and clients and meeting quality objectives. Our 2023 goals and key results are summarized below:

 

Customer & Client Segment and Service Excellence Metric  Metric Weight   Threshold   Target   Maximum   Performance Outcome   Performance Achievement   Weighted Performance Achievement 

1. Lending - Retail Customer

Average Quarterly Net Promoter Score (NPS) from Transactional Survey

   15%   55    60    65    78.8    120%   18.0%

2. Lending - Third Party Client - Forward

Average Quarterly NPS from CL Delegated Relationship Survey

   7.5%   40    55    70    73.0    120%   9.0%

3. Lending - Third Party Client - Reverse

Average Quarterly NPS from Reverse Wholesale/HCL Relationship Survey

   7.5%   65    80    95    83.3    104%   7.8%

4. Servicing - Customer

Q4 NPS, weighted by segment and contact format(1)

   15%   34    38    42    38.8    104%   15.6%

5. Servicing - Subserviced Clients

Tier 1-3 Subservicing Individual Client NPS (excludes Reverse)

   15%   32    35    38    63.6    120%   18.0%

6. Servicing

CFPB complaints per 1000 loans

   15%   1.00    0.94    0.88    0.78    120%   18.0%

7. Lending - Retail Originations

Final significant defect rates monthly ending average(2)

   10%   3.0%   2.0%   1.0%   0.0%   120%   12.0%

8. Servicing

Percentage of operating metrics within specifications(3)

   15%   93.60%   94.85%   96.10%   96.41%   120%   18.0%
TOTAL   100%                            116.4%

 

(1)NPS weighted 40% to forward contact, 40% to forward non-contact, and 20% to reverse contact.
  
(2)Final significant defect rates are calculated as the sum of all defects identified as a part of Quality Assurance (QA) reviews divided by the total sample size over the same period.
  
(3)Percentage of Servicing metrics within specifications is a meta-metric across the Servicing segment that is the sum of passing reviews from the Monthly Business Review and GSE QA in 2023 divided by the total reviews in 2023.

 

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Organizational Performance Funding Allocation by Business Unit

 

Upon approval of the Corporate Scorecard results, funding is allocated to each business unit based on the Compensation Committee’s assessment of the business unit’s contributions to scorecard achievement, which is informed by the CEO’s recommendation. The assessment is based on the business unit’s achievement of a unique set of financial and operating objectives required to support the key priorities reflected in the Corporate Scorecard and service excellence modifier.

 

Each NEO worked with the CEO to develop their unique set of key priorities in their respective area of responsibility, which included specific cost or profitability targets, and were weighted depending upon their relative importance to overall organization success. These priorities are outlined in the Performance Assessments section below.

 

Individual Performance Multiplier

 

The Compensation Committee is accountable for reviewing and approving the full-year performance evaluations and recommended performance appraisal ratings for each member of the executive leadership team, including the CEO. The Compensation Committee considers recommendations from the CEO in determining performance appraisal ratings of the other NEOs. The CEO’s performance appraisal rating is determined by the Compensation Committee in consultation with the other independent directors.

 

The documentation provided to the Compensation Committee includes the executives’ self-assessments capturing their views on their performance against each of the objectives they and the CEO agreed to at the start of the year, as well as those that may have been introduced as a result of emerging priorities during the year. The objectives for all employees, including NEOs, fell into three weighted categories:

 

Key business unit and functional priorities (50% weight) reflected individual goals required to meet the objectives contained in the Corporate Scorecard and service excellence modifier;

 

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Risk and compliance metrics (25% weight) assessed executive performance in promoting a culture of appropriate risk and compliance through training and policy review and adherence, remediating any identified issues, and lack of any material findings relating to audit protocols under the Sarbanes-Oxley Act or examination matters; and
   
Leadership expectations and behaviors (25% weight, described below).

 

Leadership expectations and behaviors for our executive team require them to:

 

  Behave as a leadership role model by self-identifying as an owner, maintaining a balanced perspective, demonstrating intellectual curiosity, being accountable for driving positive outcomes and operating as part of a larger team.
     
  Build strong working relationships in which they lead by example, demonstrate integrity, and solicit, consider and appropriately incorporate perspectives from others.
     
  Drive and deliver exceptional results by proactively anticipating situations that require a plan of action, identifying critical issues and assuming personal ownership for driving their resolution.
     
  Lead efforts on diversity, equity and inclusion by fostering an equitable, inclusive and safe work environment that allows for open discussion and understanding, encourages and values individual differences, and ensures employees have an equal opportunity for success.
     
  Build and motivate a high performing team by identifying and securing top talent to increase performance, convincing others of the need for change to support critical organizational objectives, and actively holding people accountable for results and behaviors.
     
  Embrace our service excellence philosophy by supporting its standards of delivering on commitments to customers, clients, investors and colleagues through caring service, integrity and creative solutions.

 

The Compensation Committee evaluates the proposed results and performance appraisal recommendations and determines the final incentive compensation awards for each executive. Each executive receives an individual performance appraisal rating against a 5-point scale with an “individual performance multiplier” that is applied to their funded annual incentive opportunity, as described above.

 

The value for the multiplier is determined by the Compensation Committee using a value from the range shown in the chart below.

 

Individual Performance Rating   Individual Performance Multiplier
Outstanding Performance   110-125%
Highly Effective Performance   105-110%
Effective Performance   90-105%
Inconsistent Performance   50-75%
Unsatisfactory Performance   0%

 

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Performance Assessments and Calculation of Total 2023 AIP Awards

 

After careful consideration, the Compensation Committee – and the full Board, in the case of the CEO – assessed each NEO’s performance leading their respective business unit’s achievement of its financial and operating objectives to determine organizational performance funding, and assigned individual performance multipliers reflective of risk and compliance objectives and leadership expectations and behaviors that further differentiated their performance, as described below.

 

Name 

Organizational Performance Funding

(%)

  

Individual Performance Multiplier

(%)

  

Final Award as a Percent of Target Value

(%)

 
Glen A. Messina   100.3%   105%   105.3%
Sean O’Neil   101.0%   103%   103.5%
Scott W. Anderson   104.5%   110%   115.0%
Dennis Zeleny   102.5%   110%   112.8%
George T. Henley   85.0%   100%   85.0%

 

The following summarizes the performance of each executive and his respective business unit:

 

Glen Messina

 

As CEO, Mr. Messina received organizational performance funding equivalent to the Corporate Scorecard results, or 100.3%, and he received an individual performance multiplier of 105%, with key accomplishments described below.

 

  Built and managed a balanced and diversified business model that drove profitability through a continued focus on servicing and acting with agility to re-size originations to a rapidly changing market.
     
  Drove prudent growth adapted for the current environment, including expanding our MSR capital partners and related subservicing opportunities and focusing on higher margin originations products.
     
  Maintained industry-leading servicing operations and cost performance by maintaining continuous cost improvement discipline and optimizing technology and global operations, and exceeded all customer satisfaction objectives through technology interfaces and proactive outreach.
     
  Allocated capital to deliver value for shareholders by optimizing liquidity, diversifying capital sources, including expanding the multi-investor partnership model to fund new MSR originations.
     
  Led an engaged and productive workforce despite reducing global headcount by approximately 15%, maintaining relatively flat attrition and meeting or exceeding commitments to support diversity and inclusion.

 

Sean O’Neil

 

Mr. O’Neil’s key priorities for the finance organization included financial reporting and forecasting, treasury and cash management, balance sheet optimization, and shareholder relations. Under his leadership, the finance business unit earned an organizational performance multiplier of 101%, and he received an individual performance multiplier of 102.5%, with key accomplishments described below.

 

  Led enterprise-wide budget planning and cost reduction initiatives that improved revenue, reduced operating expenses and improved financing costs.
     
  Managed liquidity to enable debt buyback, lowered lender risk and upsized capacity, improved financing spreads and facilitated securitizations that lowered interest expense.
     
  Developed and executed an investor relations strategy that included holding frequent sessions with existing and prospective shareholders and research analysts to communicate our long-term strategy to reduce corporate debt.
     
  Expanded reporting and analysis capabilities leading to faster and more effective decision-making evaluating budgets, debt management, operating unit performance and strategic transactions.

 

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Scott Anderson

 

Mr. Anderson’s key priorities for the servicing organization included delivering efficient and compliant operational performance and exceptional customer service, and improving portfolio cost to service. Under his leadership, the servicing business unit earned an 104.5% organizational performance multiplier, and he received an individual performance multiplier of 110%, with key accomplishments described below.

 

  Reduced expenses as a percent of UPB through automation initiatives, customer experience enhancements and increased borrower self-service acceptance rates.
     
  Improved borrower and client Net Promoter Scores from 2022 to 2023, and Consumer Financial Protection Bureau (CFPB) complaint volumes were at an all-time low.
     
  Drove strong operational performance with <1% defect rate through compliance management, self-identification in a culture of transparency, swift remediation, root cause analysis and preventive-action planning.
     
  Improved call center pitch and transfer rates through scripting, training and incentives to drive significant increase to loan recapture rates.

 

Dennis Zeleny

 

Mr. Zeleny’s key priorities as Chief Administrative Officer included overseeing the human resources, information technologies, enterprise project management office (EPMO), communication, procurement, corporate insurance, international operations and facilities functions. These groups enable the people, processes and technology associated with our growth, change and cost leadership initiatives. Mr. Zeleny received an organizational performance multiplier of 102.5%, and he received an individual performance multiplier of 110%, with key accomplishments described below.

 

  Developed and executed the human capital agenda, including staffing, talent, succession planning, employee engagement, DE&I, remuneration and learning programs efficiently.
     
  Executed our Asia-Pacific platform goals and objectives, exceeding cost reduction targets while ensuring a highly skilled, engaged and productive workforce.
     
  Led cybersecurity enhancements to protect the organization from potential cyber threats through technology-based prevention and employee training. Improved efficiency levering technology and AI tools.
     
  Strengthened performance of the EPMO, strategic sourcing, and corporate insurance functions through the implementation of technology enhancements and process optimization.

 

George Henley

 

Mr. Henley’s key priorities for the originations organization included growing the loan portfolio, and integrating the forward and reverse originations channels. Under his leadership, the lending business unit earned an 85% organizational performance multiplier, with key accomplishments described below.

 

  Navigated through a difficult mortgage originations market, exceeding cost per loan targets by managing headcount against volume opportunity and reducing operating costs through operations optimization.
     
  Exceeded growth targets for “best efforts” and GNMA volumes, grew business-to-business clients and improved the digital customer experience.
     
  Exceeded both Net Promoter Score and quality targets across recapture and reverse retail channels.

 

2023 Long-Term Incentive (LTIP) Awards

 

The annual grant of LTIP awards is designed to promote actions and decisions aligned with our strategic objectives and reward our executives and other program participants for long-term value creation for our shareholders in a manner that is consistent with our pay-for-performance philosophy. The Compensation Committee periodically reviews the granting of equity awards to employees based on such factors as Company performance, market competitive conditions and advice from its independent compensation consultant.

 

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Ocwen’s long-term incentive opportunity for eligible employees, including executive officers, was provided through equity awards under the 2021 Equity Incentive Plan (the 2021 Plan) adopted by shareholders on May 25, 2021 and amended May 23, 2023. The 2021 Plan authorized the grant of restricted stock, restricted stock units, options, stock appreciation rights or other equity-based awards, including cash-settled awards, to our employees (including executive officers), directors, advisors and consultants. We have made grants under the 2021 Plan only to employees and directors. We implemented the 2021 Plan to motivate employees to make extraordinary efforts to achieve significant improvements to shareholder value, support retention of key employees and align the interests of our employees with the interests of our shareholders.

 

2023 LTIP awards include both a time-vesting component for retention purposes and a performance-based component to align with pay-for-performance objectives. Half of the target value is granted as RSUs vesting in equal thirds on the first, second and third anniversaries of the grant, and half is granted as PRSUs vesting on the third anniversary of the grant based on TSR compared to a performance peer group selected for the awards.

 

The Compensation Committee selected the following peer group as the comparator for relative TSR performance, including competitors in the mortgage finance industry and mortgage real estate investment trusts.

 

Annaly Capital Management, Inc.   New Residential Investment Corp.
Cherry Hill Mortgage Investment Corporation   PennyMac Financial Services, Inc.
Guild Holdings Company   Radian Group Inc.
Home Point Capital Inc.   Redwood Trust, Inc.
loanDepot, Inc.   Rocket Companies, Inc.
MGIC Investment Corporation   Two Harbors Investment Corp.
Mr. Cooper Group Inc.   UWM Holdings Corporation
Navient Corporation    

 

The PRSUs use four distinct weighted performance periods to measure overall performance, three annual periods and one three-year period, as shown below. This structure assigns a weight more than three times greater to the three-year period while also providing incentive for year-over-year improvements compared to the peer group.

 

Period #   Measurement Period  

% of Target PRSUs

Assigned to Measurement Period

1   April 3, 2023 - April 3, 2024   15%
2   April 3, 2024 - April 3, 2025   15%
3   April 3, 2025 - April 3, 2026   15%
4   April 3, 2023 - April 3, 2026   55%

 

If the Company achieves relative TSR at the (i) 25th percentile of its peer group for any measurement period (threshold level), 50% of the target PRSUs are eligible to vest, (ii) 50th percentile of its peer group for any measurement period (target level), 100% of the target PRSUs are eligible to vest, and (iii) 100th percentile, or ranked first overall, of its peer group for any measurement period (maximum level), 200% of the target PRSUs are eligible to vest. The number of target PRSUs that may be eligible to become vested based on relative TSR performance during each measurement period is interpolated between the applicable performance levels. No PRSUs will be earned for a specific measurement period if TSR is below threshold. Units credited based on TSR for any performance period are subject to continued service through the third anniversary of the grant.

 

The table below shows the annual target value opportunities for our NEOs, as approved by the Compensation Committee, granted in 2023, which will be settled in shares.

 

Name 

Annual Target Value Granted as Restricted Stock Units

($)

  

Annual Target Value Granted as Performance-Restricted Stock Units

($)

  

Total Annual Target Value

($)

 
Glen A. Messina   2,000,000    2,000,000    4,000,000 
Sean O’Neil   325,000    325,000    650,000 
Scott W. Anderson(1)   300,000    300,000    600,000 
Dennis Zeleny(1)   300,000    300,000    600,000 
George T. Henley(1)   300,000    300,000    600,000 

 

(1)Messrs. Anderson, Henley and Zeleny’s long-term equity targets were increased to 120% of salary (from 100% for Messrs. Anderson and Henley and from 80% for Mr. Zeleny) in recognition of significant contributions to the Company.

 

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To account for the volatility of the market at the time of grant and as approved by the Compensation Committee, target values set forth in the table above were converted into the target number of units granted based on the 30-trading-day average closing share price ending on the grant date rather than the closing share price on that date. Grants for all NEOs were made on April 3, 2023 using the 30-trading-day average closing share price of $28.52 rather than the $27.26 closing share price on that date, resulting in a 4% decrease in the number of units granted compared to the number of units that would have resulted using $27.26 as the denominator. However, when combined with the application of the Monte Carlo simulation to the performance-based restricted stock units, as discussed in footnote (2) to the Summary Compensation Table, accounting grant date fair values for the awards were 12.5% higher than the values reflected in the above table.

 

Special Performance Restricted Stock Awards

 

On July 31, 2023, our NEOs received equity-based awards (Special PRSUs) to strengthen their commitment to the Company during a period in which the Company was able to navigate the most disruptive business cycle in over twenty years while recognizing their exceptional performance in servicing our customers and clients, stabilizing the originations platform, keeping our workforce engaged and productive and maintaining GAAP profitability. These awards include total shareholder return metric to reinforce the expectation to create shareholder value.

 

The Compensation Committee, with the input of its independent consultant, considered a range of variables in determining the structure of these awards, including the retentive and motivational effect of the award and market prevalence of these type of awards. After reviewing these factors, the Committee determined that it was in the best interests of the Company to further incentivize leadership team retention with performance-based stock unit awards vesting twelve months from the grant date based on continued employment and subject to certain conditions through the vesting date.

 

The PRSUs will vest on the first anniversary of the grant based on TSR compared to the same performance peer group selected for the annual awards, outlined above. If the Company achieves relative TSR at the (i) 25th percentile of its peer group for any measurement period (threshold level), 50% of the target PRSUs are eligible to vest, (ii) 50th percentile of its peer group for any measurement period (target level), 100% of the target PRSUs are eligible to vest, and (iii) 100th percentile, or ranked first overall, of its peer group for any measurement period (maximum level), 150% of the target PRSUs are eligible to vest. The number of target PRSUs that may be eligible to vest based on relative TSR performance during the measurement period is interpolated between the applicable performance levels. 50% of target PRSUs will be earned if TSR is below threshold.

 

The table below outlines the value of these awards to our NEOs, which will be settled in shares.

 

Name 

Target Value of

Performance-Restricted

Stock Units

($)

 
Glen A. Messina   900,000 
Sean B. O’Neil   302,000 
Scott W. Anderson   320,000 
Dennis Zeleny   248,000 
George T. Henley   300,000 

 

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Performance Results of Long-Term Incentive Awards

 

Since the annual LTIP program was introduced March 29, 2019, half of all executives’ annual long-term equity targets have been granted as performance-based units based on TSR performance during applicable measurement periods to align with pay-for-performance objectives.

 

In 2020, we adopted a multi-period relative TSR performance measurement structure used through 2023, in which the final number of PRSUs that are eligible to vest is determined by Ocwen’s TSR rank relative to a performance peer group during each of four weighted performance periods – three annual periods and one three-year period – as described above. Each LTIP grant year uses a different performance peer group, and the performance periods are established based on the grant date and subsequent anniversaries. The Special PRSUs use only a one-year performance period. Following is an outline of performance for awards granted 2020-2023 as of March 31, 2024.

 

Performance Period  

1

(Year 1)

   

2

(Year 2)

   

3

(Year 3)

   

4

(Years 1-3)

    Total  
Weight     15 %     15 %     15 %     55 %     100 %
3/30/2020 LTIP PRSU Performance(1)
Relative TSR Percentile     70.7 %     26.9 %     97.6 %     80.3 %      
Achievement Level     141.4 %     53.8 %     195.2 %     160.6 %      
Weighted Achievement     21.2 %     8.1 %     29.3 %     88.3 %     146.9 %
3/2/2021 LTIP PRSU Performance(2)
Relative TSR Percentile     87.6 %     66.6 %     10.3 %     57.1 %      
Achievement Level     175.2 %     133.2 %     —%       114.2 %      
Weighted Achievement     26.3 %     20.0 %     —%       62.8 %     109.1 %
3/31/2022 LTIP PRSU Performance(3)
Relative TSR Percentile     90.9 %     6.1 %     50.0 %     33.8 %      
Achievement Level     181.8 %         100.0 %     67.6 %      
Weighted Achievement     27.3 %     %     15.0 %     37.2 %     79.5 %
4/3/2023 LTIP PRSU Performance(4)
Relative TSR Percentile     6.2 %     50.0 %     50.0 %     6.2 %      
Achievement Level     %     100.0 %     100.0 %     %      
Weighted Achievement     %     15.0 %     15.0 %     %     30.0 %
7/31/2023 Special PRSU Performance(5)
Relative TSR Percentile                             %
Achievement Level                             50 %

 

  (1) 2020: Final results as of March 30, 2023.
     
  (2) 2021: Final results as of March 2, 2024.
  (3) 2022: Results for Periods 1 and 2 are final. For illustrative purposes only, Period 3 is shown at target (50th percentile) and Period 4 reflects interim results.
     
  (4) 2023: For illustrative purposes only, Results for Periods 1 and 4 reflect interim results and Periods 2 and 3 are shown at target (50th percentile).
     
  (5) 2023 Special: Results for one-year performance period are interim.

 

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Other Compensation

 

Our policy with respect to employee benefit plans generally is to provide benefits to our employees, including our executive officers, which are comparable to benefits offered by companies of a similar size. We believe that a competitive comprehensive benefit program is essential to achieving the goal of attracting and retaining highly-qualified employees. Our NEOs participate in the benefit plans offered to our salaried employees, generally, including medical, dental, life and disability insurance plans, and a 401(k) plan.

 

In 2022, we introduced the Ocwen Executive Non-Qualified Deferred Compensation Plan (NQDC), a voluntary program that allows executives to defer portions of earned salary or AIP to be settled at a future date. The Company does not offer any additional contributions, matching or otherwise, to participating executives; however, they will be credited with earnings or losses on their deferred income at the elected time of distribution based on their elected “deemed” investment options.

 

Stock Ownership and Prohibition against Short Sales, Hedging and Margin Accounts

 

Although we do not have stock ownership requirements for our executives (other than Mr. Messina, who is subject as director to our Corporate Governance Guidelines regarding stock ownership and retention), our philosophy is that equity ownership by our executives is important to attract, motivate and retain executives, as well as to align their interests with those of our shareholders. The Compensation Committee believes that the Company’s equity plans are adequate to achieve this philosophy. Additionally, effective with equity granted to executives on or after March 31, 2022, shares acquired on vesting pursuant to those awards will be subject to a one-year holding period.

 

We maintain an Insider Trading Prevention Policy that governs the timing of transactions in securities of the Company by directors and executives. In addition, this policy prohibits any director, officer or employee from engaging in any short sale of the Company’s stock, establishing and using a margin account with a broker-dealer for the purpose of buying or selling Company stock, pledging Company securities as collateral for a loan, buying or selling puts or calls on the Company’s stock and engaging in any other transaction that hedges the economic risk associated with the ownership of the Company’s securities. This policy is designed to encourage investment in the Company’s stock for the long term and to discourage active trading or short-term speculation.

 

Clawback Policy

 

The Company adopted an incentive compensation clawback policy on November 10, 2023 that complies with the new SEC rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act and related stock exchange listing rules. The Company’s rights to recoupment under the clawback policy are in addition to any other rights of recoupment under the terms of any equity incentive plan or individual award.

 

Restrictive Covenants

 

All of our NEOs have executed an intellectual property and non-disclosure agreement. This agreement requires the NEO to hold all “confidential information” in trust for us and prohibits the NEO from using or disclosing such confidential information except as necessary in the regular course of our business or as otherwise required by law. In connection with the special cash awards granted in 2020, all of our NEOs (other than Mr. Messina and Mr. O’Neil, who were not provided such an award) agreed to (i) certain non-compete covenants during their term of employment and (ii) certain covenants relating to the non-solicitation of employees and non-interference with business relationships until September 10, 2023 (whether or not employed by the Company during such period). From time to time, we enter into separation agreements with executive officers that contain non-competition and non-solicitation provisions. In addition, certain of our equity award agreements contain provisions that provide that post-retirement vesting or exercise of the award, as applicable, is dependent on compliance with certain covenants.

 

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Tax Considerations

 

Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deduction for compensation in excess of $1,000,000 paid to its “covered employees.” Prior to federal tax reform enacted in December 2017, Section 162(m) included an exception to this limitation on deductibility for qualifying “performance-based compensation,” provided that certain performance and other requirements are met. Under the 2017 tax legislation, for taxable years beginning after December 31, 2017, there is no longer an exception to the deductibility limit for qualifying “performance-based compensation” unless the compensation qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017. Also under the 2017 legislation, the definition of “covered employees” has been expanded to include a company’s chief financial officer (in addition to the chief executive officer and three other most highly paid executive officers), plus any individual who has been a “covered employee” in any taxable year beginning after December 31, 2016. As one of the factors in its consideration of compensation matters, the Compensation Committee considers the anticipated tax treatment to the Company of various payments and benefits, including the impact of Section 162(m). However, we reserve the right to design programs that may not be deductible under Section 162(m) if we believe they are nevertheless appropriate to help achieve our executive compensation program objectives, and in any case, there can be no assurance that any compensation paid by the Company will be fully deductible.

 

CEO Pay-Ratio Disclosure

 

Pursuant to the Securities Exchange Act of 1934, as amended, we are required to disclose in this proxy statement the ratio of the total annual compensation of our CEO to the median of the total annual compensation of all of our employees (excluding our CEO). Based on Securities and Exchange Commission rules for this disclosure and applying the methodology described below, we have determined that Mr. Messina’s total compensation for 2023 was $8,153,781 and the median of the total 2023 compensation of all of our employees (including our India and Philippines operations and excluding our CEO) was $35,528 (after applying a cost-of-living adjustment and converting foreign currency to U.S. dollars, as described below). Accordingly, we estimate the cost-of-living-adjusted ratio of our CEO’s total compensation for 2023 to the median of the total 2023 compensation of all of our employees (excluding our CEO) to be 230 to 1.

 

If we only considered our U.S.-based employees (excluding our CEO) in identifying the median employee using the methodology otherwise described above, we determined that our median U.S.-based employee’s total compensation was $76,156. Accordingly, we estimate the resulting ratio of our CEO’s total compensation to the median of the total compensation of all our U.S.-based employees (excluding our CEO) to be 107 to 1.

 

We identified the median employee by taking into account the total compensation paid during 2023 to all individuals, excluding our CEO, who were employed by us or one of our subsidiaries on December 31, 2023. We included all employees, whether employed on a full-time, part-time, or seasonal basis. We did not annualize the compensation for any employees who were not employed by us for all of 2023. We applied a cost of living adjustment to employees employed outside of the United States as described below. Once the median employee was identified as described above, that employee’s total compensation was determined using the same rules that apply to reporting the compensation of our Named Executive Officers (including our CEO) in the “Total” column of the Summary Compensation Table. The total compensation amounts included in the first paragraph of this pay-ratio disclosure were determined based on that methodology (in the case of the median employee’s compensation, as adjusted for cost-of-living and currency conversion as described below).

 

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In calculating the compensation of our employees in the Philippines, we applied a currency conversion factor based on the U.S. dollar to Philippines Peso exchange rate as of December 31, 2023. In calculating the compensation of our employees in India, we applied a currency conversion factor based on the U.S. dollar to Indian Rupee exchange rate as of December 31, 2023. 1 As permitted under SEC rules, in identifying the median employee and in presenting the median employee’s total 2023 compensation above, we applied a cost-of-living adjustment to the compensation of employees outside the United States based on a purchasing power parity conversion factor published by The World Bank for 2022.2 Using this methodology, we determined that our median employee is employed in India. If we had determined the median employee and total compensation as described above but had not applied a cost-of-living adjustment to identify our median employee or calculate our median employee’s total compensation, the median of the total compensation of all of our employees (excluding our CEO) would have been $10,987 and we estimate the resulting ratio of our CEO’s total compensation to the median of the total compensation of all of our employees (excluding our CEO) would have been 742 to 1.

 

Report of the Compensation Committee

 

The Compensation Committee of the Board of Directors has reviewed and discussed the Compensation Discussion and Analysis of this proxy statement with management.

 

Based on the review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

 

April 12, 2024   Compensation Committee:
    Jacques J. Busquet, Chair
    DeForest B. Soaries, Jr., Director
    Kevin Stein, Director

 

 

1 As reported by the U.S. Bureau of the Fiscal Service Treasury Reporting Rates of Exchange as of December 31, 2023, the Indian Rupee to U.S. Dollar to conversion rate was 83.162:1 and the Philippines Peso to U.S. Dollar to conversion rate was 55.451:1.

 

2 The “price level ratio of PPP conversion factor (GDP) to market exchange rate” published by the World Bank indicates how many U.S. dollars are needed to buy one U.S. dollar’s worth of goods in a particular country. For 2022, the most recent data accessible, the ratios reported for India and the Philippines were both 0.3, meaning the local currency equivalent of $1 purchased $3.33 worth of goods in those countries. Accordingly, we multiplied the 2023 compensation of each employee based in India and in the Philippines by 3.33 prior to identifying the employee with the median of the total compensation and in presenting such employee’s total compensation in order to reflect a cost-of-living adjustment.

 

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Summary Compensation Table - 2021, 2022 and 2023

 

The following table provides information concerning the compensation of our named executive officers for the 2023, 2022 and 2021 fiscal years.

 

Name and Principal Position  Year  

Salary

($)

  

Bonus(1)

($)

  

Stock

Awards(2)

($)

  

Option

Awards(2)

($)

  

Non-Equity Incentive Plan Compensation(3)

($)

  

All Other Compensation(4)

($)

   Total ($) 
Glen A. Messina President and Chief Executive Officer   2023    1,000,000        5,563,820        1,580,061    9,900    8,153,781 
    2022    972,308        4,233,065        815,196    9,150    6,029,718 
    2021    900,000        3,914,160        1,804,793    8,700    6,627,653 
Sean B. O’Neil Executive Vice President and Chief Financial Officer(1)   2023    550,000    250,000    1,088,238        569,388        2,457,626 
    2022    285,577    125,000    2,010,228        278,586        2,699,391 
Scott W. Anderson Executive Vice President and Chief Servicing Officer   2023    500,000        1,053,239        574,750    9,900    2,137,889 
    2022    500,000    350,000    529,126        294,800    9,150    1,683,076 
    2021    500,000        465,974        631,651        1,599,355 

Dennis Zeleny

Executive Vice President and Chief Administrative Officer

   2023    500,000        1,053,239        563,750    9,900    2,103,239 
    2022    493,077    259,000    423,288        291,246    9,150    1,475,762 
    2021    470,096        472,159        661,296    8,700    1,612,251 

George T. Henley(5)

Former Executive Vice President and Chief Growth Officer

   2023    500,000        968,127        425,000    790,401    2,683,528 
    2022    500,000        529,126        228,638    9,150    1,266,913 
    2021    423,077    150,000    621,285        548,864        1,743,226 

 

(1)Mr. O’Neil assumed the role of Executive Vice President and Chief Financial Officer on June 13, 2022. In 2023, he received the second installment of his signing bonus, which is reported in the “Bonus” column.
(2)Represents the aggregate grant date fair value of stock awards computed in accordance with FASB ASC 718. These amounts do not represent the actual amounts paid to or realized by the executive. We based the grant date fair value of stock awards with a service condition on the closing prices of our common stock as reported on the New York Stock Exchange on the date of grant of the awards. The grant date fair value of stock unit awards with both a service condition and a market-based vesting condition is based on the output of a Monte Carlo simulation. Additional detail regarding the calculation of these values is included in Note 22 to our audited financial statements for the fiscal year ended December 31, 2023, which are included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2024. As to the stock awards granted in 2023 with market-based vesting conditions, the grant date fair value of each of these awards (calculated based on the output of a Monte Carlo simulation, which is the value of these awards included in the Summary Compensation Table above) is presented in the “Grants of Plan-Based Awards for 2023” table below, and the value of these awards assuming that the highest level of performance conditions will be achieved is $8,684,088 for Mr. Messina, $1,687,357 for Mr. O’Neil, $1,630,627 for Mr. Anderson, $1,595,151 for Mr. Zeleny, and $1,502,958 for Mr. Henley.
(3)Represents annual cash incentive compensation earned in the corresponding year and paid in the first quarter of the following year.
(4)Amounts shown in this column are set forth in the supplemental “All Other Compensation” table below.
(5)Effective as of December 31, 2023, Mr. Henley departed the Company as Executive Vice President and Chief Growth Officer in conjunction with a leadership transition initiated by Ocwen.

 

For more information about the elements of the compensation paid to our named executive officers, see “Compensation Discussion and Analysis” above.

 

All Other Compensation

 

The following table provides additional information about the amounts that appear in the “All Other Compensation” column in the Summary Compensation Table.

 

Executive Officer 

401(k) Matching Contributions(1)

($)

  

Other(2)

($)

  

Total

($)

 
Glen A. Messina   9,900        9,900 
Sean B. O’Neil            
Scott W. Anderson   9,900        9,900 
Dennis Zeleny   9,900        9,900 
George T. Henley       790,401    790,401 

 

(1)Reflects employer matching contributions made under the Ocwen Financial Corporation 401(k) Savings Plan.
  
(2)“Other” reflects the values of payments made to Mr. Henley in exchange for the general release of claims upon his departure from the Company and from his role as Executive Vice President and Chief Growth Officer effective December 31, 2023, in conjunction with a leadership transition initiated by Ocwen as outlined below, inclusive of (i) $750,000 pursuant to benefits entitled to him under the Company’s United States Basic Severance Plan, and (ii) $40,401 payout of accrued paid time off balances.

 

62

 

 

Grants of Plan-Based Awards for 2023

 

The following table provides information related to awards granted in 2023 under our 2021 Equity Incentive Plan and our 1998 Annual Incentive Plan, as amended.

 

          Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1)     Estimated Future Payouts Under Equity Incentive Plan Awards     All Other Stock Awards: Number of Shares of Stock or     All Other Option Awards: Number of Securities Underlying     Exercise or Base Price of Option     Grant Date Fair Value of Stock and Option  
Name   Grant Date    

Threshold

($)

   

Target

($)

   

Maximum

($)

   

 

Threshold

(#)

   

 

Target

(#)

   

Maximum

(#)

   

Units

(#)

   

Options

(#)

   

Awards

($)

   

Awards (2)

($)

 
      3/31/2023       750,000       1,500,000       2,250,000                                            
      4/3/2023 (3)                       35,063       70,126       140,252                         2,588,351  
Glen A. Messina     4/3/2023