Cherry Hill Mortgage Investment Corp 8-K

What Happened
Cherry Hill Mortgage Investment Corporation (CHMI) filed an 8-K reporting that on April 6, 2026 the Board approved and adopted a 2026 Executive Compensation Plan effective January 1, 2026. The Compensation Committee, with help from independent consultant Ferguson Partners, redesigned pay after the company’s November 2024 transition to an internal management structure to emphasize performance-based incentives. The Plan includes base salary, a short-term incentive program (STIP, cash bonuses) and a long-term incentive program (LTIP, equity awards).

Key Details

• Base salaries for 2026: Jay Lown (President & CEO) $900,000; Julian Evans (CIO) $550,000; Apeksha Patel (CFO) $400,000.
• STIP (annual cash bonus): 70% tied to company financial metrics (split 50% EAD ROE and 50% share price to tangible book vs. a peer group) and 30% to individual goals. Payouts are expressed as % of base salary with threshold/target/maximum ranges:
  • Lown: 20% / 40% / 60% ($180k / $360k / $540k)
  • Evans: 25% / 50% / 75% ($137.5k / $275k / $412.5k)
  • Patel: 25% / 50% / 75% ($100k / $200k / $300k)
• LTIP (rolling 3-year tranches starting 2026–2028): total LTIP dollar opportunities (threshold/target/max):
  • Lown: $675,000 / $900,000 / $1,350,000
  • Evans: $412,500 / $550,000 / $825,000
  • Patel: $300,000 / $400,000 / $600,000
  • LTIP split: 50% time‑based (fixed, vests one‑third annually over 3 years) and 50% performance‑based (0.5x/1x/2x based on relative TSR and absolute TSR goals).
• Total 2026 compensation opportunity (threshold/target/max):
  • Lown: $1,755,000 / $2,160,000 / $2,790,000
  • Evans: $1,100,000 / $1,375,000 / $1,787,500
  • Patel: $800,000 / $1,000,000 / $1,300,000
• Performance-based LTIP awards earn dividends retroactive to the start of the performance period only if earned; time‑based awards receive dividends currently.

Why It Matters
This filing shows CHMI moving pay toward performance‑based incentives to align executives’ pay with shareholder outcomes after internalizing management. Investors should note the mix of cash and equity, the peer‑relative and absolute stock performance metrics (which will drive up to half of the LTIP), and the disclosed compensation ranges for the CEO, CIO and CFO. The equity components and recurring LTIP tranches could affect future share issuance and shareholder dilution if awards vest and are settled in shares. Monitor CHMI’s reported EAD ROE, tangible book value and total shareholder return against peers to assess potential executive payouts.