Company: RWT-PA
Filing Date: 2025-04-01
Form Type: DEF 14A
Source: 0000930236-25-000012
Chunk: 127

Company: REDWOOD TRUST INC
Filing Date: 2025-04-01
Form: DEF 14A
Chunk 127
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Adjusted ROE – Methodology for Determining Annual Bonus Realization . As noted above, for 2024, the Committee determined that 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2024 Adjusted ROE relative to a 11.5% target level of Adjusted ROE performance established by the Committee in the first quarter of 2024.

• Target-Level Performance : If 2024 Adjusted ROE equaled 11.5%, then 100% of the target amount of annual bonus for this sub-component of annual bonus would be realized by each NEO.

• Below Target-Level Performance : If 2024 Adjusted ROE was between 2.875% and 11.5%, then between 25% and 100% of the target amount of annual bonus for this sub-component of annual bonus would be realized by each NEO (based on a straight-line, mathematical interpolation).

• Above Target-Level Performance : If 2024 Adjusted ROE was above 11.5%, then above-target bonus for this sub-component of annual bonus would be realized by each NEO based on the following (using straight-line, mathematical interpolation): for each incremental percentage point of Adjusted ROE performance above 11.5%, an additional 27.75% of target bonus for this sub-component of annual bonus would be realized.

• Maximum Annual Bonus . As described in CD&A section of this Proxy Statement, each NEO was subject to a maximum annual bonus cap for 2024, such that the sum of the individual performance component of annual bonus, together with the realization of the company financial performance component of annual bonus (which is realized based on an equal weighting of Adjusted ROE and Adjusted EAD ROE performance), could not exceed 3.0x of such NEO’s target annual bonus.

Adjusted EAD ROE – Description . Adjusted EAD ROE is a non-GAAP financial performance metric derived from Redwood’s ROE based on GAAP financial results, but which differs in key respects. Adjusted EAD ROE is calculated by first deriving non-GAAP Adjusted Earnings Available for Distribution (“Adjusted EAD”) from GAAP net income (loss) available (related) to common stockholders and then dividing Adjusted EAD by average common equity capital adjusted to exclude certain unrealized mark-to-market gains and losses.

Because Adjusted EAD ROE is a ratio of earnings to equity capital