Company: RWT-PA
Filing Date: 2025-04-01
Form Type: DEF 14A
Source: 0000930236-25-000012
Chunk: 125

Company: REDWOOD TRUST INC
Filing Date: 2025-04-01
Form: DEF 14A
Chunk 125
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 (iv) exclude certain organization restructuring charges; and (v) adjust for the hypothetical income taxes associated with these adjustments.

EAD ROE is defined as: EAD divided by average common equity.

Management believes EAD and EAD ROE provide supplemental information to assist it and investors in analyzing the Company’s results of operations and help facilitate comparisons to industry peers. Management also believes that EAD and EAD ROE are metrics that can supplement its analysis of the Company’s ability to pay dividends, by providing an indication of the current income generating capacity of the Company's business operations as of the period being presented. EAD and EAD ROE should not be utilized in isolation, nor should they be considered as an alternative to GAAP net income (loss) available (related) to common stockholders, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income tax purposes.

<div align='center'>A-2</div>

#### Annex B

#### Additional Disclosure Regarding

#### Non-GAAP Adjusted ROE

#### and

#### Non-GAAP Adjusted EAD ROE
<div align='center'>B-1</div>

#### Additional Disclosure Regarding
<div align='center'>Non-GAAP Adjusted ROE and Non-GAAP Adjusted EAD ROE</div>

#### and

#### the Use of These Non-GAAP Metrics in
<div align='center'>Determining Realization of Performance-Based Annual Bonuses</div>

As described in the Compensation Discussion and Analysis section of this Proxy Statement, two different non-GAAP financial performance metrics were used in 2024 within the Compensation Committee’s methodology for determining realization of each NEO’s performance-based annual bonus for 2024. In particular, 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 and the other 50% of the target amount of the financial performance component of annual bonuses would be realized based on 2024 Adjusted EAD ROE.

Set forth within this Annex B is a detailed description of each of these non-GAAP financial performance metrics, as well as a review of the Compensation Committee’s methodology for determining annual bonus realization based on these metrics. Note : Adjusted ROE and Adjusted EAD ROE should not be considered as alternatives to GAAP net income, GAAP ROE or other measurements of results of operations computed in accordance with GAAP or for federal income