LADR DEF 14A Report ended June 9, 2020

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

o	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

(3)	Filing Party:

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•	FOR the election of the nominees for director in Proposal 1 ; and

•	FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm in Proposal 2.

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1.	Election of the following two members of the Board of Directors: Brian Harris and Mark Alexander ; and

2.	Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020 .

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•	The Notice of 2020 Annual Meeting of Stockholders;

•	This Proxy Statement for the 2020 Annual Meeting; and

•	The Company’s Annual Report on Form 10-K for the year ended December 31, 2019 , as filed with the SEC on February 28, 2020 (the “Annual Report”).

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1.	Election to the Board of the nominees named in this Proxy Statement (“Proposal 1”); and

2.	Ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020 (“Proposal 2”).

•	FOR the election of the nominees for director in Proposal 1 ; and

•	FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020 in Proposal 2.

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•	View the Company’s proxy materials for the Annual Meeting; and

•	Instruct the Company to send future proxy materials to you by email.

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•	Via the Internet. You may vote by proxy via the Internet by following the instructions provided in the Notice.

•	By Telephone. If you request printed copies of the proxy materials by mail, you may vote by proxy by calling the toll-free number found on the proxy card.

•	By Mail. If you request printed copies of the proxy materials by mail, you will receive a proxy card and you may vote by proxy by filling out the proxy card and returning it in the envelope provided.

•	At the Virtual Annual Meeting. You may also vote at the Annual Meeting. For more information, see “What do I need to attend the Annual Meeting?”

•	Via the Internet . You may vote by proxy via the Internet by visiting www.proxyvote.com and entering the control number found in your Notice. The availability of Internet voting may depend on the voting process of the organization that holds your shares.

•	By Telephone . If you request printed copies of the proxy materials by mail, you may vote by proxy by calling the toll-free number found on the voting instruction form. The availability of telephone voting may depend on the voting process of the organization that holds your shares.

•	By Mail . If you request printed copies of the proxy materials by mail, you will receive a voting instruction form and you may vote by proxy by filling out the voting instruction form and returning it in the envelope provided.

•	At the Virtual Annual Meeting. You may also vote at the Annual Meeting if you obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that will authorize you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy.

•	Instructions on how to attend and participate via the Internet, including how to demonstrate proof of stock ownership, are posted at www.proxyvote.com.

•	We encourage you to access the Annual Meeting online prior to its start time.

•	The webcast will start at 1:00 p.m. , Eastern Time.

•	You will need your 16-Digit Control Number to enter the Annual Meeting.

•	A webcast replay of the Annual Meeting will be available at www.virtualshareholdermeeting.com/LADR2020 until 11:59 p.m. , Eastern Time, on June 9, 2021 .

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•	Indicate when voting on the Internet or by telephone that you wish to vote as recommended by the Board; or

•	Sign and return a proxy card without giving specific voting instructions,

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•	As necessary to meet applicable legal requirements;

•	To allow for the tabulation and certification of votes; and

•	To facilitate a successful proxy solicitation.

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•	our Class I directors are Messrs. Durst and Steiner;

•	our Class II directors are Messrs. Fishman and Weiner and Ms. McCormack; and

•	our Class III directors are Messrs. Harris and Alexander.

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•	the independence, judgment, strength of character, reputation in the business community, ethics and integrity of the individual;

•	the business or other relevant experience, skills and knowledge that the individual may have that will enable him or her to provide effective oversight of the Company’s business;

•	the fit of the individual’s skill set and personality with those of the other directors so as to build a Board that works together effectively and constructively; and

•	the individual’s ability to devote sufficient time to carry out his or her responsibilities as a director in light of his or her occupation and the number of boards of directors of other public companies on which he or she serves.

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•	each beneficial owner of more than 5% of any class of our outstanding shares;

•	each of our named executive officers;

•	each of our directors; and

•	all of our executive officers and directors as a group.

(1)

The number of shares of our Class A common stock and percentage of beneficial ownership assumes that all the vested and unvested limited partnership units of Series REIT of Ladder Capital Finance Holdings LLLP (“Series REIT Units”) and limited partnership units of Series TRS of Ladder Capital Finance Holdings LLLP (“Series TRS LP Units”) (or, in lieu of Series TRS LP Units, limited liability company interests of LC TRS I LLC (“TRS I Shares”)) outstanding, except those held by Ladder, together with all outstanding Class B common stock, are exchanged into shares of our Class A common stock. We refer to each Series REIT Unit, when paired together with one Series TRS LP Unit (or one TRS I Share in lieu of such Series TRS LP Unit) as an “LP Unit.”

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(2)

In computing the number of shares of our Class A common stock beneficially owned by a stockholder and the percentage ownership of that stockholder, we deemed outstanding shares of Class A common stock subject to options held by such stockholder that are currently vested and exercisable, or that will become vested and exercisable within 60 days of April 13, 2020 , whether or not they would be deemed to have beneficial ownership of such shares as of the date hereof. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other stockholder.

(3)	There were 108,337,782 shares of our Class A common stock outstanding and 12,158,933 shares of our Class B common stock outstanding as of April 13, 2020 .

(4)	Unless otherwise indicated, the address of the beneficial holder is c/o Ladder Capital, 345 Park Avenue, 8th Floor, New York, NY 10154.

(5)	Based on information as of December 31, 2019 set forth in Schedule 13G/A filed with the SEC on February 5, 2020 by BlackRock, Inc., which has sole voting power with respect to 8,964,373 shares of Class A common stock and sole dispositive power with respect to 9,201,065 shares of Class A common stock. The address for BlackRock, Inc. is 55 East 52nd St, New York, NY 10055.

(6)

Based on information as of December 31, 2019 set forth in Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group, which has sole voting power with respect to 95,801 shares of Class A common stock, shared voting power with respect to 8,318 shares of Class A common stock, sole dispositive power with respect to 8,548,930 shares of Class A common stock and shared dispositive power with respect to 93,354 shares of Class A common stock. The address for The Vanguard Group is 100 Vanguard Blvd, Malvern, PA, 19355.

(7)	Includes 110,318 shares of Class A common stock and 1,101,029 shares of Class B common stock held by Alan Fishman.

(8)

Includes 278,995 shares of Class A common stock and 454,914 shares of Class A common stock that can be acquired upon the exercise of options held by Brian Harris, 400,540 shares of Class A common stock held by Harris Investment Associates LP (“Harris LP”), 1,020,084 shares of Class A common stock held by Harris Investment Associates LP II (“Harris LP II”), and 4,793,623 shares of Class B common stock held by Betsy A. Harris 2012 Family Trust. Mr. Harris serves as general partner of each of Harris LP and Harris LP II and is a trustee of the Betsy A. Harris 2012 Family Trust. Mr. Harris disclaims beneficial ownership of the shares held by each of the Betsy A. Harris 2012 Family Trust, Harris LP and Harris LP II.

(9)	Includes 86,975 shares of Class A common stock held by Mark Alexander.

(10)	Includes 3,537,349 shares of Class B common stock held by Seymour Holding Corporation and 32,122 shares of Class A common stock held by Douglas Durst. The natural persons having voting or dispositive control over the shares of Class B common stock beneficially owned by Seymour Holding Corporation include Douglas Durst, a member of our Board.

(11)	Includes 642,025 shares of Class A common stock (including 122,131 shares of Class A common stock that can be acquired upon the exercise of options) and 327,691 shares of Class B common stock held by Pamela McCormack.

(12)	Includes 13,156 shares of Class A common stock held by Jeffrey Steiner.

(13)	Includes 8,574 shares of Class A common stock held by David Weiner.

(14)	Includes 253,399 shares of Class A common stock (including 57,314 shares of Class A common stock that can be acquired upon the exercise of options) and 161,670 shares of Class B common stock held by Marc Fox.

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(15)	Includes 259,908 shares of Class A common stock (including 46,743 shares of Class A common stock that can be acquired upon the exercise of options) and 41,476 shares of Class B common stock held by Robert Perelman.

(16)	Includes 63,814 shares of Class A common stock held by Kelly Porcella.

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•	the timing of any subsequent exchanges of Series TRS LP Units—for instance, the increase in any tax deductions will vary depending on the fair value, which may fluctuate over time, of the depreciable or amortizable assets of LCFH at the time of each exchange;

•	the price of shares of our Class A common stock at or around the time of the exchange—the increase in any tax deductions, as well as the tax basis increase in other assets, of LCFH is affected by the price of shares of our Class A common stock at the time of the exchange;

•	the extent to which such exchanges are taxable—if an exchange is not taxable for any reason, increased deductions will not be available;

•	the amount and timing of our income—TRS I generally will be required to pay 85% of the deemed benefits as and when deemed realized; and

•	the allocation of basis increases among the assets of LCFH and certain tax elections affecting depreciation.

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•

We will record an increase in deferred tax assets for the estimated income tax effects of the increase in the tax basis of the assets owned by Ladder based on enacted federal, state and local income tax rates at the date of the transaction. To the extent we estimate that we will not realize the full benefit represented by the deferred tax asset, based on an analysis of expected future earnings, we will reduce the deferred tax asset with a valuation allowance;

•	We will record an increase in liabilities for 85% of the estimated realizable tax benefit resulting from (i) the increase in the tax basis of the purchased interests as noted above and (ii) certain other tax benefits related to entering into the Tax Receivable Agreement; and

•

We will record an increase to additional paid-in capital in an amount equal to the difference between the increase in deferred tax assets and the increase in liability due to the existing owners of LCFH under the Tax Receivable Agreement. The amounts to be recorded for both the deferred tax assets and the liability for our obligations under the Tax Receivable Agreement have been estimated. All of the effects of changes in any of our estimates after the date of the purchase will be included in our net income. Similarly, the effect of subsequent changes in the enacted tax rates will be included in net income.

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•	Brian Harris, Chief Executive Officer;

•	Pamela McCormack, President;

•	Marc Fox, Chief Financial Officer;

•	Robert Perelman, Head of Asset Management; and

•	Kelly Porcella, Chief Administrative Officer and General Counsel.

•	to reward our Named Executive Officers for sustained financial and operating performance and leadership excellence;

•	to align the interests of our Named Executive Officers with those of our stockholders; and

•	to encourage our Named Executive Officers to remain with us for the long-term.

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•	Our core EPS* for 2019 was $1.60 per share, as compared to $2.03 per share in 2018 .

•	Our core earnings* for 2019 was $190.6 million , as compared to $230.1 million in 2018 .

•	Our after-tax core return on average equity (“after-tax core ROAE”)* for the twelve months ended December 31, 2019 was 11.6% , which represented performance above the 90th percentile of the commercial finance REITs listed below (the “Business Comparables”).

•	Consideration of management’s continued emphasis to generate an attractive risk-adjusted after-tax core ROAE from primarily senior secured, moderately leveraged assets with a target adjusted leverage* ratio of 2x - 3x. During 2019 , our adjusted leverage* ratio ranged between 2.6 x and 3.0 x at the end of each quarter.

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•	Arbor Realty Trust, Inc.

•	Colony Capital, Inc.

•	iStar Inc.

•	Kennedy-Wilson Holdings, Inc.

•	MFA Financial, Inc.

•	PennyMac Financial Services, Inc.

•	Redwood Trust, Inc.

•	W.P. Carey Inc.

•	Walker & Dunlop Inc.

•	Apollo Commercial Real Estate Finance, Inc.

•	Arbor Realty Trust Inc.

•	Ares Commercial Real Estate Corp.

•	Blackstone Mortgage Trust, Inc.

•	Colony Credit Real Estate, Inc.

•	Granite Point Mortgage Trust Inc.

•	iStar Inc.

•	KKR Real Estate Finance Trust Inc.

•	Redwood Trust, Inc.

•	Resource Capital Corp.

•	Starwood Property Trust, Inc.

•	TPG RE Finance Trust Inc.

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•	health, dental and vision insurance;

•	vacation and sick days;

•	life insurance;

•	short-term and long-term disability insurance; and

•	401(k) plan.

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(1)

The values provided in this column represent the grant date fair value of restricted stock awards made to the Named Executive Officers with respect to the applicable fiscal years. For 2017, for Named Executive Officers other than Ms. Porcella, the values include Class A common and restricted stock granted on January 24, 2017 and February 18, 2017 that were intended to represent dividends in type and amount that the 2015 and 2016 stock option grants to management would have received had such options had dividend equivalent rights since grant. For a discussion of the assumptions made in the valuation of the restricted stock awards made with respect to fiscal year 2019 , see Note 15 to the notes to consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 for the assumptions made in determining ASC 718 grant date fair values.

(2)	The values provided in this column reflect the annual cash bonuses paid to our Named Executive Officers with respect to the applicable fiscal year and the actual achievement of performance goals. Annual cash bonuses are generally paid by February 28 of the calendar year following the calendar year to which such annual cash bonus relates.

(3)

For 2019 , 2018 and 2017 , the values provided in this column include group term life insurance coverage and long-term disability coverage that were imputed income to each of our Named Executive Officers. For 2019, it includes stock dividends accrued on unvested stock awards granted to our Named Executive Officers that were not factored into the grant date fair value of the stock awards at the time the respective awards were granted, valued as of the dividend payment date of January 24, 2019, as follows:

(4)	Ms. Porcella first became a Named Executive Officer for 2019.

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(1)	Reflects the annual cash bonuses awarded to the Named Executive Officers for their performance in 2019, which the Company has determined is representative of a target annual bonus.

(2)	There is no threshold target or maximum amount for annual cash bonuses and equity incentive plan awards.

(3)	Amounts reflect the performance-based portion of Annual Restricted Stock Awards granted pursuant to the 2014 Omnibus Plan to Named Executive Officers for their performance in 2019. For a description of the vesting conditions of performance-based awards, see “Executive Compensation—Elements of Compensation—Vesting.”

(4)	January 24, 2019 amount represents stock dividends accrued on unvested stock awards granted to our Named Executive Officers that were not factored into the grant date fair value of the stock awards at the time the respective awards were granted. February 18, 2020 amount represents the time-based portion of Annual Restricted Stock Awards granted pursuant to the 2014 Omnibus Plan.

(5)	No options were granted to the Named Executive Officers for fiscal year 2019.

(6)	Time-based shares for Ms. Porcella vest ratably on the first, second, and third year from the date of grant. The time-based stock granted to Ms. McCormack and Messrs. Harris, Fox, Harney, and Perelman were fully vested at grant following their respective Retirement Eligibility Dates in accordance with the terms of their respective Employment Agreements.

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(7)	Represents the grant date fair value of the award, which is also the fair market value of the shares on the date of grant. No assumptions were used in the calculation of grant date fair value.

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(1)	All share-based awards were granted pursuant to the 2014 Omnibus Incentive Plan.

(2)	As of December 31, 2019, all Annual Option Awards granted to the Named Executive Officers were fully vested.

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(3)

The 2014 Omnibus Incentive Plan provides for the equitable adjustment of outstanding awards upon the occurrence of certain events, including an extraordinary dividend, in order to preserve the intrinsic value of such awards. The Compensation Committee, which holds the authority to administer and interpret the Plan, determined it was necessary and appropriate, and in the best interests of the Company and its stockholders, to equitably adjust the outstanding stock option and restricted stock awards in respect of an extraordinary dividend paid in the fourth quarter of 2015 and to increase the number of shares available under the Plan to reflect the equitable adjustment of the stock options and restricted stock. The exercise price of the stock options was correspondingly equitably adjusted to reflect the additional shares. Such equitable adjustment is reflected in the table above. Also reflected in the table is an equitable adjustment made to outstanding options in the first quarter of 2019 in connection with the Company’s stock dividend paid on January 24, 2019.

(4)

This value represents the product of the closing market price of the Company’s Class A common stock on December 31, 2019 of $18.04 per share and the number of unvested Restricted Stock Awards held by each Named Executive Officer, assuming the vesting of shares subject to performance-based criteria. For a description of the vesting conditions of the performance-vesting portion of the Annual Restricted Stock Award, see “Executive Compensation—Elements of Compensation—Vesting.”

(5)	In connection with 2015 performance, certain Named Executive Officers were granted Annual Option Awards on February 18, 2016, which vested in three equal installments on February 18 of each of 2017, 2018 and 2019. These amounts include dividend equivalent rights and strike price adjustments made to prevent dilution of the value of the Option Award upon the distribution of special stock dividends.

(6)	These are Annual Option Awards granted in 2015 based on 2014 performance. The description of the provisions for the 2015 Annual Option Award apply to the 2014 Annual Option Awards as well, with the vesting of the 2014 Annual Option Awards having occurred in 2016, 2017 and 2018.

(7)

These are Annual Restricted Stock Awards granted in 2019 based on 2018 performance. The description of the vesting provisions with respect to the 2017 Restricted Annual Stock Awards below applies to the 2018 Annual Stock Awards as well, with Mr. Harris’ Award fully vested upon grant and the time-based portions of Messrs. Fox and Perelman’s respective Awards fully vested upon grant in accordance with the terms of their respective Employment Agreements. The time-based portion of Ms. McCormack’s Award became fully vested upon her Retirement Eligibility Date in December of 2019, in accordance with her Employment Agreement.

(8)

These are Annual Restricted Stock Awards granted on December 21, 2017 based on 2017 performance. For Ms. Porcella, fifty percent of the Annual Restricted Stock Award was subject to time-based vesting criteria, and the remaining fifty percent of the Annual Restricted Stock Award is subject to performance-based criteria. The time-vesting portion of the Annual Restricted Stock Award vests in three equal installments on each of the first three anniversaries of the date of grant, subject to her continued employment on the applicable vesting date. For a description of the vesting conditions of the performance-vesting portion of the Annual Restricted Stock Award, see “Executive Compensation—Elements of Compensation—Vesting.” The stock granted to Mr. Harris was fully vested at grant following his Retirement Eligibility Date in early 2017 in accordance with the terms of the Harris Employment Agreement and is not depicted in this table. For Named Executive Officers other than Mr. Harris and Ms. Porcella, upon reaching their respective Retirement Eligibility Dates in 2019, the time-based portion of Ms. McCormack and Messrs. Fox and Perelman’s respective Awards became fully vested in accordance with their respective Employment Agreements, and thus are not reflected in the table. The vesting conditions of the performance-based portions of Ms. McCormack and Messrs. Fox and Perelman’s respective Awards, which remain outstanding and eligible to vest, are described in the same section listed above for Ms. Porcella.

(9)

These are Annual Restricted Stock Awards granted in 2017 based on 2016 performance. The description of the vesting and Retirement Eligibility provisions with respect to the 2017 Annual Restricted Stock Awards above applies to the 2016 Annual Stock Awards as well, except that the vesting of the restricted performance and time-based shares that would have vested in early 2018 were accelerated and vested on December 21, 2017.

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(1)	In accordance with the Harris Employment Agreement, Mr. Harris’ annual awards were fully vested at grant. All unvested time-based shares of Ms. McCormack and Messrs. Fox and Perelman’s respective Annual Restricted Stock Awards vested immediately upon their respective Retirement Eligibility Dates, all of which occurred in the fiscal year ended 2019.

(2)	Represents the fair market value on the vesting date (closing price of shares on the vesting date multiplied by the number of shares that vested on that date).

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(1)

The values in this row represent the cash severance payable to the Named Executive Officers pursuant to their employment agreements, where applicable, upon a termination without cause by us or a termination for good reason by the Named Executive Officers, assuming a termination date of December 31, 2019 , subject to an execution of a release of claims in favor of the Company. In the case of Ms. Porcella, per Company policy, severance may be paid in the Company’s sole discretion. The cash severance provided with respect to Messrs. Fox and Perelman assumes that they would each receive $1,000,000 of cash severance in connection with a qualifying termination and would receive an additional $112,500 and $75,000 respectively, upon the Company’s election to extend their non-competition restrictions for an additional ninety days following each of their qualifying terminations, respectively. For a description of the employment agreements generally, see the section captioned, “—Employment Agreements.” As further described in the section captioned, “—Potential Payments upon Termination or Change in Control,” certain Named Executive Officers are also entitled to receive a prorated portion of their target annual cash bonus for the year in which such termination occurs, payable at the same time that performance bonuses for such calendar year are paid to our other senior executives. In the case of Messrs. Fox and Perelman, such prorated bonus, together with each of their cash severances, cannot exceed $1,000,000, and for such prorated bonus to be payable, their severance cannot each exceed $1,000,000, not including the payment for the non-competition election. A termination on December 31, 2019 , would require payment of a full-year annual cash bonus to Mr. Harris and Ms. McCormack. The actual annual cash bonus amounts paid to Mr. Harris and Ms. McCormack for calendar year 2019 is detailed in the section captioned,  “—Summary Compensation Table,” under the column entitled Non-Equity Incentive Plan Compensation. Ms. McCormack is also entitled to a prorated portion of her target annual equity bonus for the year in which such termination occurs, and Mr. Harris is also entitled to a prorated portion of his minimum Annual Equity Incentive Grant.

(2)

The values in this row represent the value of stock-based awards that would be accelerated upon the specified events in the column headings, based on the closing market price of Class A common stock on December 31, 2019 of $ 18.04 per share. Upon a termination without cause or resignation for good reason or a termination due to death or disability, on December 31, 2019 , Ms. McCormack’s and each of Messrs. Fox and Perelman’s performance-based shares of the respective executive’s Annual Restricted Stock Awards would remain outstanding and eligible to vest upon the necessary return hurdles being met by the Company. The fair market values of the outstanding performance-based shares on December 31, 2019 for Ms. McCormack, Messrs. Fox and Perelman were $2,340,149, $1,006,397, and $696,055, respectively; these values are not included in the first two columns of the table. If, upon a change in control (or after the signing of definitive documentation related to the change in control but prior to its closing), Ms. McCormack’s or Messrs. Fox or Perelman’s employment is terminated without cause or due to death or disability or Ms. McCormack or Messrs. Fox or Perelman resigns for good reason, the terminated or resigned Named Executive Officer would have fully vested in his or her Annual Restricted Stock Awards. For Ms. Porcella, upon a termination without cause by the Company, on December 31, 2019 , the time-based shares that would have vested in the annual vesting cycle immediately following her termination would have accelerated and vested on her termination date. Any outstanding performance-based shares that were eligible to vest with respect to the performance year immediately prior to the February 18 following such termination would remain eligible to vest (and be forfeited) in accordance with the performance criteria described in “Executive Compensation—Elements of Compensation—Vesting.” All other unvested shares would be forfeited. Upon a termination due to death or disability, on December 31, 2019 , Ms. Porcella’s unvested stock would fully vest. If a termination without cause occurs within six months of a change in control, upon such termination, Ms. Porcella’s unvested time-based stock would fully vest and her unvested performance-based stock would remain outstanding and eligible to vest upon the necessary return hurdles being met by the Company. As of December 31, 2019 , all Annual Option Awards granted to the Named Executive Officers, other than Ms. Porcella who did not receive an Option Award, have vested and thus are not included in the table.

(3)

The values in this row represent the value of reimbursements for continued health benefits and life and disability insurance to which certain Named Executive Officers would be entitled pursuant to their employment agreements upon a termination without cause by us or a termination for good reason by the Named Executive Officers, assuming a termination date of December 31, 2019 : $79,497 represents reimbursements for continued health care for up to two years immediately following Mr. Harris’ termination; $50,708 represents reimbursements for continued health care for up to 18 months immediately following Ms.

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•	The median of the annual total compensation of all employees of the Company (other than our CEO), was $365,738; and the annual total compensation of Mr. Harris, our CEO, was $16,708,186 .

•	Based on this information, for 2019, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was 46 to 1.

•	As of December 31, 2019, our employee population consisted of 76 employees.

•

To find the median of the annual total compensation of our employees (other than our CEO), we used each employee’s annualized year end base salary, cash bonus earned for 2019, overtime payments, sign-on bonuses and the grant date fair value of equity compensation granted in 2020 for 2019 performance. In making this determination, we annualized base salaries for full-time permanent employees who were employed on December 31, 2019, but did not work for us the entire year.

•	We identified our median employee using this compensation measure and methodology, which was consistently applied to all our employees included in the calculation.

•

After identifying the median employee, we added together all of the elements of such employee’s compensation for 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $365,738, which includes group term life insurance coverage and long-term disability coverage imputed as income to all employees, to be consistent with the CEO annual total compensation described in the next sentence. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2019 Summary Compensation Table in this proxy statement, which is also in accordance with the requirements of Item 402(c)(2)(x).

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(1)	Represents the grant date fair value of the award, which is also the fair market value of the shares on the date of grant. No assumptions were used in the calculation of grant date fair value.

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(1)	Proposal 1 requests the reelection of Brian Harris and Mark Alexander to the Board of Directors.

(2)	Proposal 2 requests the ratification of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for 2020 .

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(1)

Audit fees relate to professional services rendered in connection with the audit of the Company’s annual financial statements and internal control over financial reporting included in the Company’s Annual Reports on Form 10-K, quarterly review of financial statements included in the Company’s Quarterly Reports on Form 10-Q, issuance of a comfort letter and consents, review of proxy disclosures, and audit services provided in connection with other statutory and regulatory filings.

(2)	Audit-related fees comprise fees for professional services that are reasonably related to the performance of the audit or review of the Company’s financial statements.

(3)

Per the table below, tax fees relate to professional services rendered in connection with tax audits, tax compliance, and tax consulting and planning services. Below is a breakout of the tax compliance services and consulting and advisory services provided by PwC during 2019 and 2018 . Tax compliance services include the preparation of original and amended tax returns, refund claims, audit support, and tax payment planning. Consulting and advisory services include tax advice, planning, and consulting services. The evaluation, planning, and implementation of these tax-sensitive corporate strategies, and the development of an infrastructure to facilitate ongoing compliance with rules applicable to REITs, required substantial expertise.

(4)	Consists entirely of a subscription renewal for a license used for researching accounting guidance.

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(1)	Includes $31 thousand, $31 thousand, $32 thousand and $29 thousand of net income attributable to noncontrolling interest in consolidated joint ventures which are included in net (income) loss attributable to noncontrolling interest in operating partnership on the combined consolidated statements of income for the years ended December 31, 2019, 2018, 2017 and 2016, respectively.

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(2)	The following is a reconciliation of GAAP depreciation and amortization to our share of real estate depreciation, amortization and gain adjustments amounts presented in the computation of core earnings in the preceding table ($ in thousands):

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(3)	The following is a reconciliation of GAAP net results from derivative transactions to our hedging unrecognized result presented in the computation of core earnings in the preceding table ($ in thousands):

(4)

During the year ended December 31, 2018, the Company recorded an additional $3.3 million income tax expense for a tax settlement for pre-acquisition liabilities on certain corporate entities acquired at the time of its IPO. During the year ended December 31, 2018, the Company also recorded other income of $2.5 million, relating to the recovery of this amount pursuant to indemnification. While this item is presented on a gross basis, there was no impact to core earnings. Accordingly, given that pre-tax income for the year ended December 31, 2018 excludes the tax effect but includes the recovery of $2.5 million, pursuant to the indemnification, the recovery amount has been excluded from core earnings for the year ended December 31, 2018.

(5)

During the year ended December 31, 2016, the Company recorded an additional $3.3 million income tax expense for a tax settlement for pre-acquisition liabilities on certain corporate entities acquired at the time of its IPO. During the year ended December 31, 2016, the Company also recorded other income of $3.3 million, relating to the recovery of this amount pursuant to indemnification. While this item is presented on a gross basis, there was no impact to core earnings. Accordingly, given that pre-tax income for the year ended December 31, 2016 excludes the tax effect but includes the recovery of $3.3 million, pursuant to the indemnification, the recovery amount has been excluded from core earnings for the year ended December 31, 2016.

(6)	During the years ended December 31, 2015 and 2014, the Company made adjustments to core earnings for costs related to restructuring the Company for REIT related operations. All costs were expensed and accrued for in the period incurred.

(7)	Core estimated corporate tax benefit (expense) based on effective tax rate applied to core earnings generated by the activity within our taxable REIT subsidiaries.

(8)	Set forth below is an unaudited reconciliation of weighted average diluted shares outstanding to adjusted weighted average diluted shares outstanding (shares in thousands):

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(1)	We contributed over $888.4 million worth of balance sheet loans into two CLO securitizations that remain on our balance sheet at December 31, 2018, for accounting purposes, but are excluded from debt obligations for adjusted leverage calculation purposes. In October 2019, the Company redeemed all outstanding debt obligations related to the two CLO transactions.

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