Dear Fellow Stockholders:

You are cordially invited to attend the 2024 annual meeting of stockholders of Franklin BSP Realty Trust, Inc., a Maryland corporation (“FBRT” or “the Company”), which will be held on Wednesday, May 29, 2024, at 11:00 A.M. Eastern time. The meeting will be held in virtual meeting format.

FBRT posted strong results in 2023, covering our common stock dividend while strategically positioning our portfolio going into 2024. Our diversified portfolio of senior floating rate loans and our conservative and flexible balance sheet continue to allow for sector leading results.

We operate with a focus on long-term performance and stability through a conservative and selective approach. Our focus remains on originating newer vintage, high quality multifamily loans with approximately 77% of our portfolio collateralized by multifamily properties. This portfolio makeup differentiates us from our commercial mortgage REIT peer group and provides us with a competitive advantage. Our rigorous underwriting process ensures stable performance and a low risk profile. Our current dividend rate is approximately 9% based on year-end book value with full year distributable earnings coverage of 135%.

We are pleased with our strong performance in 2023, and anticipate that our earnings power will strengthen as we grow our portfolio in 2024. As of the end of 2023, our portfolio stood at $5 billion spread across 144 loans with an average size of $35 million. We originated $818 million of new loan commitments throughout the year. Our earnings covered our dividend of $0.355 and produced a competitive risk adjusted return. We closed the year with ample liquidity of $1.5 billion. We are actively seeking to deploy capital and we are originating investments that we anticipate will be meaningfully accretive to our earnings. However, we will continue to be selective, looking for the best credits at the best terms. Looking ahead, we are confident in the resilience of our strategy and we believe our portfolio will leave us well positioned, notwithstanding the headwinds persisting in our industry.

FBRT’s thoughtful and prudent approach to portfolio construction is overseen by a highly engaged and independent Board of Directors that is committed to enhancing long-term stockholder value. We have nominated all seven of our current directors for re-election at the Annual Meeting, of which 86% are independent. Out of our six independent director nominees, 50% are gender diverse or racially diverse. We make a concerted effort to regularly assess and enhance our governance practices, a process that is guided by actively engaging with our stockholders and being responsive to feedback that we receive.

In 2023, we included a proposal on our ballot to eliminate the supermajority vote standard to amend certain provisions of our charter. Although 98% of the stockholders who voted on the proposal voted in favor, the requisite number of affirmative votes to pass the proposal was not obtained. Given favorable stockholder feedback on the proposal and our commitment to represent their interests, we are including the charter amendment on our ballot again this year. We are also proud to have made progress on our Environmental, Social, and Governance (“ESG”) strategy, publishing our inaugural ESG report aligned with the Sustainability Accounting Standards Board (“SASB”) framework. We intend to publish annual reports going forward.

On behalf of the Board of Directors, I would like to express our sincere appreciation for your investment in FBRT. We value your input and continued support.

FRANKLIN BSP REALTY TRUST, INC.

1345 Avenue of the Americas, Suite 32A

New York, New York 10105

Notice of Annual Meeting of Stockholders

Proxy Statement Notice Information

		Wednesday, May 29, 2024 at 11:00 A.M.				Virtual format only				Record Date   Close of business   April 8, 2024

To the Stockholders of Franklin BSP Realty Trust, Inc.:

We hereby notify you that Franklin BSP Realty Trust, Inc., a Maryland corporation (the “Company”) is holding its 2024 Annual Meeting of Stockholders (the “Annual Meeting”) on Wednesday, May 29, 2024, at 11:00 A.M. Eastern time. The Annual Meeting will be held in virtual format only. You can attend the Annual Meeting online, vote your shares electronically and submit your questions during the Annual Meeting, by visiting www.virtualshareholdermeeting.com/FBRT2024. You will need to have your control number included on your proxy card or the instructions that accompanied your proxy materials in order to join the Annual Meeting.

At the Annual Meeting, you will be asked to consider and vote upon (i) the election of seven members to the Board of Directors, (ii) an amendment to the Articles of Amendment and Restatement of the Company to eliminate supermajority voting requirements; (iii) the ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the year ending December 31, 2024, and (iv) an advisory vote on the compensation of the Company’s named executive officers. The Company will also transact any other business that may properly come before the Annual Meeting and any adjournment thereof.

Our Board of Directors has fixed the close of business on April 8, 2024, as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. Record holders of shares of our common stock, par value $0.01 per share, and our Series H Convertible Preferred Stock, par value $0.01 per share, at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting.

Stockholders, whether or not they expect to attend the meeting, are requested to authorize a proxy to vote their shares electronically via the Internet, by telephone or by completing and returning the proxy card if you requested paper copies of the Company’s proxy materials. Voting instructions are provided in the Notice of Internet Availability of Proxy Materials, or, if you requested paper copies, the instructions are printed on your proxy card and included in the accompanying proxy statement. Any person giving a proxy has the power to revoke it at any time prior to the meeting and stockholders who attend the meeting and who are eligible to vote may withdraw their proxies and vote in person.

This summary contains highlights about the Company and the Annual Meeting. This summary does not contain all information that you should consider in advance of the Annual Meeting, and the Company encourages you to read the entire Proxy Statement and the Company’s 2023 Annual Report on Form 10-K carefully before voting.

2024 Annual Meeting of Stockholders

 

		Date and Time: Wednesday, May 29, 2024 at 11:00 a.m. Eastern Time
		Place: Virtual Format Only www.virtualshareholdermeeting.com/FBRT2024
		Record Date: Close of Business April 8, 2024
☑		Voting: Stockholders of record date are able to vote by internet at www.proxyvote.com/FBRT; telephone at 1-800-690-6903; mail by completing and returning their proxy card; and online at the Annual Meeting.

Voting Matters

 

		Board Recommendation		Page Number
Proposal 1: Election of Directors		FOR each nominee			9
Proposal 2: Amendment to the Articles of Amendment and Restatement of the Company (the “Charter”) to eliminate supermajority voting requirements		FOR			46
Proposal 3: Ratification of the appointment of PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the year ending December 31, 2024		FOR			48
Proposal 4: Advisory vote on the compensation of the Company’s named executive officers		FOR			50

Participating in the Annual Meeting

The virtual meeting will be available to stockholders across the globe via any Internet-connected device and has been designed to provide the same rights to participate as you would have at an in-person meeting, including providing opportunities to vote and ask questions.

You are entitled to participate, vote and ask questions at the Annual Meeting by visiting www.virtualshareholdermeeting.com/FBRT2024.

Voting   Stockholders may vote by:
Internet www.proxyvote.com/FBRT
Telephone 1-800-690-6903
Mail complete, sign and return proxy card

Online attend Annual Meeting virtually   Information www.virtualshareholdermeeting.com /FBRT2024

2023 Financial Highlights¹

Corporate Governance Highlights

Corporate Social Responsibility Highlights

¹Please refer to the Appendix to this proxy statement for a reconciliation of non-GAAP financial measures to our results as reported under GAAP

FRANKLIN BSP REALTY TRUST, INC.

1345 Avenue of the Americas, Suite 32A

New York, New York 10105

PROXY STATEMENT FOR

2024 ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 29, 2024

Important Notice Regarding the Availability of Proxy Materials

for the Annual Stockholders Meeting to be Held on Wednesday, May 29, 2024

This Proxy Statement, the Notice of Annual Meeting and our 2023 Annual Report are available at:

www.ProxyVote.com/FBRT

In addition, any stockholder may request to receive proxy materials electronically by email on an ongoing basis. Choosing to receive proxy materials by email saves the Company the cost of printing and mailing documents to stockholders and will reduce the impact of annual meetings on the environment. A stockholder’s election to receive proxy materials by email will remain in effect until the stockholder terminates it.

***

Certain statements in our proxy statement, other than purely historical information, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on current expectations and assumptions of management that are subject to risks and uncertainties that may cause actual results to differ materially from our expectations. Our forward-looking statements are subject to various risks and uncertainties, including but not limited to the risks and important factors contained and identified in our filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, any of which could cause actual results to differ materially from the forward-looking statements. The forward-looking statements included in this proxy statement are made only as of the date hereof. Please see “Forward-Looking Statements” in the 2023 annual report for more information.

INFORMATION ABOUT THE MEETING AND VOTING

What is the date of the Annual Meeting and where will it be held?

The Annual Meeting will be held on Wednesday, May 29, 2024, commencing at 11:00 A.M. Eastern time. The Annual Meeting will be held in virtual format only.

Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a paper copy of proxy materials?

The United States Securities and Exchange Commission (the “SEC”) has approved “Notice and Access” rules relating to the delivery of proxy materials over the Internet. These rules permit us to furnish proxy materials, including this proxy statement and our annual report, to our stockholders by providing access to such documents on the Internet instead of mailing printed copies. Most stockholders will not receive paper copies of the proxy materials unless they request them. Instead, the Notice and Access Card, which will be mailed to our stockholders, provides instructions regarding how you may access and review all of the proxy materials on the Internet. The Notice and Access Card also instructs you as to how you may authorize your proxy via the Internet or by telephone. If you would like to receive a paper or email copy of our proxy materials, you should follow the instructions for requesting such materials printed on the Notice and Access Card.

Can I vote my shares by filling out and returning the Notice and Access Card?

No. The Notice and Access Card identifies the items to be voted on at the Annual Meeting, but you cannot vote by marking the Notice and Access Card and returning it. The Notice and Access Card provides instructions on how to authorize your proxy via the Internet or by telephone or vote in person at the Annual Meeting or to request a paper proxy card, which will contain instructions for authorizing a proxy by the Internet, by telephone or by returning a signed paper proxy card.

How can I participate at the virtual Annual Meeting?

The Annual Meeting will be conducted via live webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder as of the close of business on April 8, 2024, or if you hold a valid proxy for the Annual Meeting.

You may attend the annual meeting live online at www.virtualshareholdermeeting.com/FBRT2024. If you virtually attend the annual meeting you can vote your shares electronically, and submit your questions during the annual meeting. To participate in the Annual Meeting, you will need the 16-digit control number included on your proxy card or on the voter instruction form that accompanied your proxy materials.

The meeting webcast will begin promptly at 11:00 a.m. Eastern Time on May 29, 2024. Online access will begin at 10:45 a.m. Eastern Time, and we encourage you to access the meeting prior to the start time.

Will I be able to participate in the online annual meeting on the same basis I would be able to participate in a live annual meeting?

Yes. We designed the format of the online annual meeting to ensure that our stockholders who attend our annual meeting will be afforded the same rights and opportunities to participate as they would at an in-person meeting and to enhance stockholder access, participation and communication through online tools.

If you were a stockholder as of the close of business on April 8, 2024, and access the Annual Meeting using the 16-digit control number included on your proxy card or on the voter instruction form that accompanied your proxy materials, you can submit questions electronically at the Annual Meeting during the webcast. During the live Q&A session of the meeting, members of our executive leadership team and our Chairman of the Board will answer questions as they come in, as time

permits. To ensure the meeting is conducted in a manner that is fair to all stockholders, the Chairman (or such other person designated by our Board) may exercise broad discretion in recognizing stockholders who wish to participate, the order in which questions are asked and the amount of time devoted to any one question. We reserve the right to edit or reject questions we deem profane or otherwise inappropriate.

What will I be voting on at the Annual Meeting?

At the Annual Meeting, you will be asked to:

The Board of Directors does not know of any matters that may be considered at the Annual Meeting other than the matters set forth above.

Who can vote at the Annual Meeting?

How many votes do I have?

Each share of Common Stock entitles the holder to one vote on each matter considered at the Annual Meeting or any adjournment or postponement thereof. Each share of Series H Preferred Stock entitles the holder to 299.2 votes (rounded down to the nearest whole number) on each matter considered at the Annual Meeting or any adjournment or postponement thereof.

How may I vote?

You may vote electronically during the Annual Meeting on the virtual meeting website, or by proxy. The Notice and Access Card provides instructions on how to authorize your proxy via the Internet or by telephone or vote electronically at the annual meeting or to request a paper proxy card, which will contain instructions for authorizing a proxy by the Internet, by telephone or by returning a signed paper proxy card by mail.

Stockholders may vote during the Annual Meeting by following the instructions available on the meeting website during the meeting. Please see “How can I participate at the virtual Annual Meeting” above for instructions on how to participate in the virtual meeting. If they request paper copies of the proxy materials, stockholders may submit their votes by proxy by mail by completing, signing, dating and returning their proxy card in the enclosed envelope. Stockholders also have the following two options for authorizing a proxy to vote their shares:

Even if you plan to attend the virtual Annual Meeting, we encourage you to authorize a proxy to vote your shares via the Internet or telephone beforehand, a convenient means of authorizing a proxy that also provides cost savings to us that benefit you as a stockholder. In addition, when you authorize a proxy to vote your shares via the Internet or by telephone prior to the Annual Meeting date, your proxy authorization is recorded immediately, and there is no risk that postal delays will cause your vote by proxy to arrive late and, therefore, not be counted. For further instructions on authorizing a proxy to vote your shares, see your proxy card. If you attend the virtual Annual Meeting, you may submit your vote electronically, and any previous votes that you submitted by mail or authorized by Internet or telephone will be superseded by the vote that you cast at the Annual Meeting.

How will proxies be voted?

Shares represented by valid proxies will be voted at the Annual Meeting in accordance with the directions given. If your proxy card is signed and returned without any directions given, the shares will be voted “FOR” (i) the election of seven director nominees named in this proxy statement for a term of one year, until our 2025 annual meeting of stockholders and until their successors are duly elected and qualify; (ii) the amendment to the Charter to eliminate supermajority voting requirements; (iii) the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2024; and (iv) the advisory vote on the compensation of our named executive officers.

The Board does not intend to present, and has no information indicating that others will present, any business at the Annual Meeting other than as set forth in the attached Notice of Annual Meeting of Stockholders and this proxy statement. However, if other matters requiring the vote of our stockholders come before the Annual Meeting, it is the intention of the persons named in the proxy to vote the proxies held by them in their discretion.

How can I change my vote or revoke a proxy?

You have the unconditional right to revoke your proxy at any time prior to the voting thereof by (i) submitting a later-dated proxy either by telephone, via the Internet or in the mail to our proxy solicitor at the following address: Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717; or (ii) by voting electronically at the virtual Annual Meeting. No written revocation of your proxy shall be effective, however, unless and until it is received at or prior to the Annual Meeting.

What if I return my proxy card but do not mark it to show how I am voting?

If your proxy card is signed and returned without any direction given, your shares will be voted as recommended by the Board.

What vote is required to approve each item?

There is no cumulative voting in the election of our directors. Under our bylaws, a nominee for director in an uncontested election shall be elected to our Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Each share of our voting stock may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. Abstentions and broker non-votes will count toward the presence of a quorum but are not considered to be votes “cast” and will have no effect on the election of our directors.

For the proposal to amend the Charter to eliminate supermajority voting requirements, the affirmative vote of the holders of not less than two-thirds of the shares then outstanding and entitled to vote at the Annual Meeting is required to approve the proposal. Abstentions and broker non-votes will have the effect of a vote “against” the proposal.

The proposal to ratify the appointment of PwC as the Company’s independent registered public accounting firm requires the affirmative vote of at least a majority of all the votes cast on the proposal. Abstentions will count towards the presence of a quorum but will have no effect on the proposal. Because the proposal to ratify the appointment of PwC as the Company’s independent registered public accounting firm is considered to be a “routine” matter under New York Stock Exchange (“NYSE”) rules, we do not expect there to be any broker non-votes on that proposal.

The advisory vote to approve the compensation of the Company’s named executive officers requires the affirmative vote of at least a majority of all the votes cast on the proposal. Abstentions and broker non-votes will count toward the presence of a quorum but are not considered to be votes “cast” and will have no effect on the proposal.

For each of the proposals, holders of the Series H Preferred Stock and holders of the Common Stock shall be deemed to vote together as a single class.

What is a “broker non-vote”?

A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner. Brokerage firms have the authority under NYSE rules to cast votes on certain “routine” matters if they do not receive instructions from their customers. The ratification of the appointment of PwC as the Company’s independent registered public accounting firm is considered a “routine” matter for which brokerage firms may vote shares for which they did not receive instructions from beneficial owners. All other items on this year’s ballot are “non-routine” matters under the NYSE rules for which brokers may not vote absent voting instructions from the beneficial owner.

Are stockholders entitled to appraisal rights in connection with any of the proposals?

None of the proposals, if approved, entitle stockholders to appraisal rights under Maryland law or the Company’s Charter.

What constitutes a “quorum”?

The presence at the Annual Meeting, in person or represented by proxy, of stockholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting constitutes a quorum. Abstentions and broker non-votes will be counted as present for the purpose of establishing a quorum.

Will you incur expenses in soliciting proxies?

We will pay all of the costs of soliciting these proxies. We have engaged Broadridge Investor Communication Solutions, Inc. (“Broadridge”) to, among other things, assist us in distributing proxy materials and soliciting proxies. We expect to pay Broadridge aggregate fees of approximately $27,500 to distribute and solicit proxies plus other fees and expenses for other services related to this proxy solicitation, including distributing proxy materials; disseminating brokers’ search cards; distributing proxy materials; operating online and telephone voting systems; and receiving of executed proxies. In compliance with the regulations of the SEC, we will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses to the extent they forward proxy and solicitation materials to our stockholders. Our directors and officers and employees of affiliates of our advisor, Benefit Street Partners L.L.C. (the “Advisor”), may also solicit proxies on our behalf in person, via the Internet, by telephone or by any other electronic means of communication we deem appropriate, for which they will not receive any additional compensation.

Is this Proxy Statement the only way that proxies are being solicited?

No. In addition to our mailing proxy solicitation material, our directors and officers and employees of Broadridge and affiliates of the Advisor may also solicit proxies in person, via the Internet, by telephone or by any other electronic means of communication we deem appropriate.

What does it mean if I receive more than one proxy card or Notice of Internet Availability of Proxy Materials?

Some of your shares may be registered differently or held in a different account and/or you may hold shares of Common Stock and Preferred Stock. You should authorize a proxy to vote the shares in each of your accounts and all classes of securities held by mail, by telephone or via the Internet. If you mail proxy cards, please sign, date and return each proxy card to guarantee that all of your shares are voted. If you hold your shares in registered form and wish to combine your stockholder accounts in the future, you should call our Investor Relations department at (212) 588-6761. Combining accounts reduces excess printing and mailing costs, resulting in cost savings to us that benefit you as a stockholder.

What if I receive only one set of proxy materials although there are multiple stockholders at my address?

The SEC has adopted a rule concerning the delivery of documents filed by us with the SEC, including proxy statements and annual reports. The rule allows us and brokers to send a single set of proxy materials, including proxy statements and notices, to any household at which two or more stockholders reside if they share the same last name or we reasonably believe they are members of the same family. This procedure is referred to as “Householding.” This rule benefits both you and us. It reduces the volume of duplicate information received at your household and helps us reduce expenses.

We will promptly deliver, upon written or oral request, a copy of our 2023 annual report, this proxy statement or the Notice and Access Card, as applicable, to a stockholder at a shared address to which a single copy was previously delivered. If your household received a single set of disclosure documents for this year, but you would prefer to receive your own copy,

you may direct requests for separate copies by calling our Investor Relations department at (212) 588-6761 or by mailing a request to Franklin BSP Realty Trust, Inc., 1345 Avenue of the Americas, Suite 32A, New York, New York 10105, Attention: Investor Relations. Likewise, if your household currently receives multiple sets of notices or disclosure documents and you would like to receive one set, please contact us.

Where can I find more information?

You may access, read and print copies of the proxy materials for this year’s Annual Meeting, including this Proxy Statement, form of proxy card, and annual report to stockholders, at the following website: www.proxyvote.com/FBRT.

You can request a paper or electronic copy of the proxy materials, free of charge:

We also file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any reports, statements or other information we file with the SEC on the web site maintained by the SEC at www.sec.gov.

FBRT’s practices align with the Investor Stewardship Group’s (“ISG”) corporate governance framework for U.S. – listed companies, as described below.

The Board ultimately is responsible for the management and control of our business and operations. The Board, including our independent directors, is responsible for monitoring and supervising the performance of our day-to-day operations by our Advisor. Directors are elected annually by our stockholders, and there is no limit on the number of times a director may be elected to office. Each director serves for a term of one year until the next annual meeting of stockholders or (if longer) until his or her successor is duly elected and qualifies. The Company’s charter and bylaws provide that the number of directors may be fixed by a resolution of the Board; provided, however, that the number of directors shall never be less than three. The number of directors on the Board is currently fixed at seven.

The proxy holder named on the proxy card intends to vote “FOR” the election of each of the seven nominees. If you do not wish your shares to be voted “FOR” particular nominees, you vote “AGAINST” the nominee or “ABSTAIN” from voting by selecting the applicable designated space provided on the proxy card or, if you are authorizing a proxy to vote your shares by telephone or the Internet, follow the instructions provided when you authorize a proxy. Under our bylaws, a nominee for director in an uncontested election shall be elected to our Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Each share of our voting stock may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. For purposes of the election of directors, abstentions and broker non-votes will count toward the presence of a quorum but are not considered to be votes “cast” and will have no effect on the election of our directors.

Our Corporate Governance Guidelines provide that if a nominee for election as a director who is already serving as a director is not elected pursuant to the majority voting standard set forth in the Company’s bylaws, the director shall tender his or her resignation to the Board. The Nominating and Corporate Governance Committee, or such other committee as designated by the Board, will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results.

We know of no reason why any nominee would be unable to serve if elected. If, at the time of the Annual Meeting, one or more of the nominees should become unable to serve, shares represented by proxies will be voted for the remaining nominees and for any substitute nominee or nominees designated by the Board. No proxy will be voted for a greater number of persons than the number of nominees described in this proxy statement.

Nominees

The table set forth below lists the name and age of each nominee as of the date of this Proxy Statement and the position and office that each nominee currently holds with the Company. Each is currently a director of the Company who was elected by the Company’s stockholders at the 2023 annual meeting.

Business Experience of Nominees

The name, principal occupation for the last five years, selected biographical information and the period of service as our director of each of the nominees are set forth below. Full biographical data is available on our website at www.fbrtreit.com under the “Governance” tab.

		Richard Byrne   Chairman of the Board and CEO Director Since: 2016 Age: 63		Committees None

		Pat Augustine   Independent Director Director Since: 2021 Age: 61		Committees Compensation, Nominating and Corporate Governance

		Buford H. Ortale   Independent Director Director Since: 2016 Age: 62		Committees Audit (Chair), Compensation, Nominating and Corporate Governance

		Elizabeth K. Tuppeny   Lead Independent Director Director Since: 2013 Age: 63		Committees Audit, Compensation, Nominating and Corporate Governance

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE, EACH TO SERVE UNTIL THE 2025 ANNUAL MEETING OF STOCKHOLDERS AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND QUALIFY.

The following table sets forth information regarding fees earned by our non-management directors during the fiscal year ended December 31, 2023. Mr. Byrne, our Chief Executive Officer, received no compensation for serving as a director.

The following table sets forth the terms of our current non-management director compensation program:

Information About the Board of Directors and its Committees

The Board ultimately is responsible for the management and control of our business and operations. We have no employees and have retained the Advisor to manage our day-to-day operations. The Advisor is a wholly-owned subsidiary of Franklin Resources, Inc., which, together with its various subsidiaries, operates as Franklin Templeton.

Our Board currently has seven members and is comprised of Messrs. Byrne, Augustine, Dumars, McDonough, and Ortale and Mses. Handwerker and Tuppeny. The Nominating and Corporate Governance Committee of the Board considers and makes recommendations to the Board concerning the appropriate size and needs of the Board and considers and recommends to the Board candidates to fill vacancies on the Board.

The Board held a total of five meetings during the fiscal year ended December 31, 2023. Each director attended at least 75% of the meetings of the Board and the Board committees on which he or she served during 2023. The Board does not have a formal policy relating to director attendance at our annual meetings of stockholders. Four of our seven directors attended the 2023 annual meeting of stockholders.

The Board currently has three standing committees: the Audit Committee, the Nominating and Corporate Governance Committee and the Compensation Committee, the members of which are all independent directors. The current written charters for each of the standing committees, as well as our Corporate Governance Guidelines, Code of Ethics and certain other corporate governance information are available on our website, www.fbrtreit.com, under the “Governance Documents” tab by selecting “Governance.”

How Directors are Selected, Elected and Evaluated

The Nominating and Corporate Governance Committee is responsible for reviewing, on an annual basis, the requisite skills and characteristics of individual Board members, as well as the organization, function and composition of the Board as a whole, in the context of the needs of the Company. The Nominating and Corporate Governance Committee reviews all nominees for director in accordance with criteria established by the Nominating and Corporate Governance Committee and the requirements and qualifications contained in the Company’s Corporate Governance Guidelines and will recommend that the Board nominate or elect those nominees whose attributes it believes would be most beneficial to the Company. The reviews involve an assessment of the personal qualities and characteristics, accomplishments and business reputation of each nominee. The Nominating and Corporate Governance Committee may consider such criteria as the committee shall deem appropriate, which may include, without limitation:

The Nominating and Corporate Governance Committee identifies potential nominees by seeking input from fellow directors, executive officers, professional recruitment firms and stockholders and stakeholders. The Nominating and Corporate Governance Committee’s evaluation process does not vary based on whether a candidate is recommended by a stockholder, although in addition to taking into consideration the needs of the Board and the qualifications of the candidate, the committee may also consider the number of shares held by the recommending stockholder and the length of time that such shares have been held by such stockholder.

The Board will consider candidates nominated by stockholders provided that the stockholder submitting a nomination has complied with procedures set forth in the bylaws. See “Stockholder Proposals for the 2025 Annual Meeting” for additional information regarding stockholder nominations of director candidates.

The Board believes that diversity is an important attribute of the members who comprise our Board and that the members should represent an array of backgrounds and experiences, including racial, ethnic and gender diversity.

The overall diversity of the Board is a significant consideration in the nomination process as well as our annual evaluation process of board effectiveness and composition with our Nominating and Corporate Governance Committee. Twenty-nine percent of our Board nominees identify as diverse in terms of gender identity, and 14% of our Board nominees identify as diverse in terms of race, bringing overall diversity of gender and racial diversity to 43%. We are pleased with the progress we have made on diversity and our Board and Nominating and Corporate Governance Committee continue to prioritize diversity and thoroughly integrate diversity into discussions on Board composition.

Director Independence

Under our Corporate Governance Guidelines and NYSE rules, a majority of our directors must be “independent.” A director is not independent unless the Board affirmatively determines that he or she does not have a “material relationship” with us and the director must meet the bright-line test for independence set forth by the NYSE rules. A relationship with the Advisor or an affiliate thereof (other than service as an independent director or trustee for another company managed by the Advisor) is treated as a relationship with the Company. Our Corporate Governance Guidelines also require all members of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee to be “independent” directors. Based upon its review, the Board has affirmatively determined that each of Messrs. Augustine, Dumars, McDonough and Ortale, and each of Mses. Handwerker and Tuppeny is independent under all applicable criteria for independence set forth in the listing standards of the NYSE, including with respect to committee service. In making its independence determinations, the Board considered and reviewed all information known to it, including information identified through directors’ questionnaires. There are no familial relationships between any of our directors and executive officers.

Director Skills

Effective as of the Annual Meeting, the Board will consist of seven directors. As described above, the Nominating and Corporate Governance Committee evaluates all director nominees in accordance with the criteria and qualifications contained in the committee’s charter as well as the Corporate Governance Guidelines. The Company is confident that its director nominees are well qualified and experienced, collectively possessing a strong mix of expertise to oversee the Company’s strategy and generate long-term value for stockholders. Listed below are core skills and experiences valuable for our Board to possess:

Skills Distribution

Leadership Structure of the Board of Directors

Richard J. Byrne currently serves as our Chairman of the Board and our Chief Executive Officer. As Chief Executive Officer, Mr. Byrne is responsible for implementing the Company’s business strategy. The Board believes that because the Chief Executive Officer is ultimately responsible for ensuring the successful operation of the Company and its business, which is also the main focus of the Board’s deliberations, the Chief Executive Officer is the most qualified director to act as chairman. The Board may modify this structure to best address the Company’s circumstances for the benefit of its stockholders when appropriate.

The Board has appointed Elizabeth K. Tuppeny as the lead independent director of the Company. The Board has appointed a lead independent director to provide an additional measure of balance, ensure the Board’s independence and enhance the Board’s ability to fulfill its management oversight responsibilities.

The lead independent director chairs meetings or executive sessions of the independent directors, reviews and comments on Board’s meeting agendas, represents the views of the independent directors to management, facilitates communication among the independent directors and between management and the independent directors, and acts as a liaison with service providers, officers, attorneys and other directors generally between meetings, has the authority to call meetings of the independent directors, and otherwise assumes such responsibilities as may be assigned to her by the Board. The Company compensates Ms. Tuppeny for acting as lead independent director.

The Company’s management believes that having a majority of independent, experienced directors, including a lead independent director with specified responsibilities on behalf of the Board, provides the right leadership structure for the Company and is best for the Company and its stockholders at this time.

Oversight of Risk Management

The Board has an active role in overseeing the management of risks applicable to the Company. While management is responsible for the day-to-day risk management processes, the Board’s role is:

Committee Membership

The following table summarizes the membership of the proposed Board and each of the Board’s standing committees as of the Annual Meeting.

Stock Ownership Guidelines

Our stock ownership guidelines, which are set forth in our Corporate Governance Guidelines, are applicable to the Company’s executive officers and non-management directors in order to further align the long-term interests of our executive officers and non-management directors with those of our stockholders. In each case, Common Stock owned directly and indirectly (if the participant has an economic interest in the shares), and shares underlying unvested time-based restricted stock and/or restricted stock units count towards satisfaction of the ownership requirements.

Non-Management Directors

Under the guidelines, each non-management director is expected to own a number of shares of the Company’s Common Stock equal to at least three times the average number of shares granted to such non-management director through annual equity awards over the prior three years. In each case, the grant amounts shall be reduced by the number of shares withheld or sold to cover withholding or other taxes associated with the award, and may be adjusted for stock splits, stock distributions, combinations, and similar events. These multiples must be achieved by five years from the date of appointment to the Board.

As of December 31, 2023, all non-management directors were in compliance with the stock ownership requirements or were on track to meet the ownership requirements within the requisite time period.

Executive Officers

Under the guidelines, the Chief Executive Officer of the Company is expected to own a number of shares of the Company’s Common Stock equal to at least three times the average number of shares granted to the Chief Executive Officer through annual equity awards over the prior three years, and the other executive officers of the Company should each have an ownership in the Company’s Common Stock equal to at least two times the average number of shares granted to such executive officer through annual equity awards over the prior three years. In each case, the grant amounts shall be reduced by the number of shares withheld or sold to cover withholding or other taxes associated with the award, and may be adjusted for stock splits, stock distributions, combinations, and similar events. These multiples must be achieved by the later of the third anniversary of the adoption of these guidelines or three years from the date of appointment.

As of December 31, 2023, all of the Company’s executive officers were in compliance with the stock ownership requirements or were on track to meet the ownership requirements within the requisite time period.

Environmental Sustainability

The Nominating and Corporate Governance Committee oversees the Company’s ESG policies and initiatives, including climate-related matters. In addition, the Company has in place a Corporate Environmental Policy in which the Company details its focus on minimizing its environmental impact and creating a company culture that heightens an awareness of the importance of preserving the environment and conserving energy and natural resources.

The Company is proud to conduct its commercial real estate lending and business practices in such a way that is aligned with the United Nations Principles for Responsible Investment (the “PRI”), demonstrating its commitment to expanded disclosure and an investment approach that integrates ESG factors into decisions.

Political and Charitable Contributions

Our Nominating and Corporate Governance Committee oversees the Company’s political and charitable contributions and other public policy matters. In order to facilitate accountability and informed decision-making with respect to the Company’s political contributions, the Nominating and Corporate Governance Committee has adopted Political and Charitable Contributions Guidelines that apply to contributions or expenditures of corporate funds to various political entities, charitable organizations, and certain causes. Any political or charitable contributions in excess of $10,000 must be approved by the Nominating and Corporate Governance Committee and all political and charitable contributions must be approved by the Chief Executive Officer. All contributions are required to be reported quarterly to the Nominating and Corporate Governance Committee.

The Company made no political contributions during the fiscal year ended December 31, 2023.

Legal Proceedings

Franklin BSP Realty Trust, Inc. takes great pride in its compliance program with respect to regulations related to its business, including its lending activities to both new and existing borrowers. The Company has not been party to any material legal or regulatory proceedings related to its business practices and has not sustained any monetary losses associated with anti-competitive behavior, malpractice, insider trading, market manipulation, fraud, anti-trust, marketing, or other related financial industry laws.

For additional information, please reference our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Director Continuing Education

Our Board recognizes the importance of continuing education for our directors and is committed to providing such education to improve the performance of our board and its committees. Our executive officers assist in identifying and advising our directors about opportunities for continuing education including trainings provided by independent third parties.

Director Time Commitments

The Company values the experience directors bring from other boards on which they serve and other activities in which they participate, but recognizes that those boards and activities may also present demands on a director’s time and availability and may present conflicts or legal issues, including independence issues. Our Corporate Governance Guidelines provide that directors should advise the Chair of the Nominating and Corporate Governance Committee and the Chief Executive Officer before accepting a nomination or appointment to membership on other boards of directors or any Audit Committee or other significant committee assignment on any other board of directors, or establishing other significant relationships with businesses, institutions, governmental units or regulatory entities, particularly those that may result in significant time commitments or a change in the director’s relationship to the Company. Other directorships and commitments should not interfere with a director’s obligations to the Board, and our Corporate Governance Guidelines provide that no director may simultaneously serve as a director of more than four additional publicly-traded companies. Members of the Audit Committee should not serve on more than two publicly-traded company Audit Committees (in addition to our Audit Committee) unless (i) the Board determines that such service will not impair the member’s ability to serve on the Audit Committee and (ii) the Company discloses such determination either on or through its website or in its annual proxy statement. In addition, directors who serve as Chief Executive Officer, or in equivalent positions, generally should not serve on more than two publicly-traded company boards in addition to the Company’s Board.

To facilitate our understanding of changes in director time commitments, our Corporate Governance Guidelines requires that every director must notify the Board of any change in employer, any other significant change in professional roles and responsibilities and any actual or potential conflict of interest. The Board shall determine the action, if any, to be taken given such change.

Majority Vote Standard and Director Resignation Policy

Under our bylaws, a nominee for director in an uncontested election shall be elected to our Board if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. In the case of a contested election, directors shall be elected by a plurality of the votes.

Our Corporate Governance Guidelines provide that if a nominee for election as a director who is already serving as a director is not elected pursuant to the majority voting standard set forth in the Company’s bylaws, the director shall tender his or her resignation to the Board. The Nominating and Corporate Governance Committee, or such other committee as designated by the Board, will make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The Nominating and Corporate Governance Committee, in making its recommendation, and the Board, in making its decision, each may consider any factors and other information that they consider appropriate and relevant. The director who tenders his or her resignation will not participate in the Board’s decision. If such director’s resignation is not accepted by the Board, such director shall continue to serve until his or her successor is duly elected, or until his or her earlier resignation or removal. If the Board accepts a director’s resignation pursuant to this policy, or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board may fill the resulting vacancy pursuant to the Company’s bylaws.

In addition, pursuant to our Corporate Governance Guidelines, every director must notify the Board of his or her retirement, any change in employer, any other significant change in professional roles and responsibilities and any actual or potential conflict of interest. The Board shall determine the action, if any, to be taken.

Board Evaluation Process

The Nominating and Corporate Governance Committee coordinates an annual self-evaluation of the Board’s performance as well as the performance of each committee of the Board. The full Board and each committee discuss the results. The self-evaluation includes having each director complete open-ended questionnaires designed to solicit candid feedback about the performance of the Board and each applicable committee, followed by an individual interview with each director conducted by the Lead Independent Director to discuss any additional feedback or perspectives. The Nominating and Corporate Governance Committee then reviews the results of the evaluations in private session with the Lead Independent Director, and reports the results to the full Board, including any areas in which the Board or management believes the Board can make a better contribution to the Company. The Nominating and Corporate Governance Committee also utilizes the results of this self-evaluation process in assessing and determining the characteristics and critical skills required of prospective candidates for election to the Board and making recommendations to the Board with respect to assignments of Board members to various committees.

Executive Sessions

At meetings of both the Board and the Board committees, the Company’s independent directors meet in regular executive sessions in which members of management do not participate. These sessions typically occur in conjunction with regularly scheduled Board or committee meetings. The Lead Independent Director chairs executive sessions of the Board.

Stockholder Engagement

In our stockholder engagement efforts in 2023 and in 2024 to date, stockholders have given us feedback on a number of topics, including:

Communications with the Board of Directors

Any interested parties, including stockholders of the Company, desiring to communicate with the Chairman, the Lead Independent Director, the other non-management directors or an individual director regarding the Company may directly contact such directors by delivering such correspondence to the Company in care of Franklin BSP Realty Trust, Inc., 1345 Avenue of the Americas, Suite 32A, New York, NY 10105, Attention: Micah Goodman, Secretary. The sender should indicate in the address whether it is intended for the entire Board, the Chairman, the Lead Independent Director, the non-management directors as a group or an individual director. Each communication received by the Secretary will be forwarded to the intended recipients subject to compliance with the existing instructions from the Board concerning the treatment of inappropriate communications. Such communications may be made confidentially or anonymously. The Company reserves the right to filter out improper or irrelevant communications such as solicitations, advertisements, spam, surveys, junk mail, mass mailings, resumes and other forms of job inquiries. If the Board modifies this process, the revised process will be posted on the Company’s website.

Code of Ethics

The Board of Directors maintains a Code of Ethics that is applicable to our directors, officers, our Advisor and employees of the Advisor performing substantial services for the Company. It covers topics including, but not limited to, conflicts of interest, confidentiality of information, full and fair disclosure, reporting of violations and compliance with laws and regulations.

The Code of Ethics is available on the Company’s website at www.fbrtreit.com by clicking on “Governance—Governance Documents.” We intend to disclose on this website any amendment to, or waiver of, any provision of this Code of Ethics applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC. You may also obtain a copy of the Code of Ethics by writing to our secretary at: Franklin BSP Realty Trust, Inc., 1345 Avenue of the Americas, Suite 32A, New York, New York 10105, Attention: Micah Goodman, Secretary. A waiver of the Code of Ethics for our Chief Executive Officer may be made only by the Board of Directors or the appropriate committee of the Board and will be promptly disclosed to the extent required by law. A waiver of the Code of Ethics for all other person may be made only by our Chief Executive Officer and shall be discussed with the Board or a committee of the Board as appropriate.

Hedging and Pledging Policy

Per our Insider Trading Policy, our directors and officers are prohibited from engaging in transactions in our securities that are inconsistent with a long-term investment in our Company. Our Insider Trading Policy prohibits the use of prepaid variable forward contracts, equity swaps, collars and exchange funds, put options, call options or other derivative securities, or other transactions which hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities. Directors and officers of the Company are also prohibited from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan, unless pre-approved by the Audit Committee.

The following table presents certain information as of the date of this proxy statement concerning each of our executive officers serving in such capacity:

Richard J. Byrne

Please see “Business Experience of Nominees” above for biographical information about Mr. Byrne.

Michael Comparato

Michael Comparato has served as President of the Company since March 2023. He is a Managing Director and Head of Commercial Real Estate for the Advisor. Since the Advisor took over the role of external manager of the Company, Mr. Comparato has played a leading role for the Advisor in fulfilling its duties under the Advisory Agreement, including overseeing loan originations and other investments. Prior to joining the Advisor in 2015, Mr. Comparato was Head of U.S. Equity Investments at Ladder Capital Corp., where he led Ladder’s largest team that actively originated CMBS loans, structured/balance sheet loans, mezzanine loans and acquired strategic assets for the firm. Prior to joining Ladder, Mr. Comparato was President of BankAtlantic Commercial Mortgage Capital (BACMC), the CMBS affiliate of BankAtlantic, where he was responsible for managing all day-to-day operations. Mr. Comparato also previously ran Compson Holding Corporation, which made various equity investments in multiple different commercial real estate assets and publicly traded REITs. Mr. Comparato received a Bachelor of Science, Summa Cum Laude, from Babson College.

Jerome S. Baglien

Jerome S. Baglien has served as Chief Financial Officer of the Company since September 2016, and as Chief Operating Officer of the Company since December 2021. Mr. Baglien is a Managing Director and Chief Financial Officer of Real Estate of the Advisor. Prior to joining the Advisor in 2016, Mr. Baglien was director of fund finance for GTIS Partners LP (“GTIS”), where he oversaw all finance and operations for GTIS funds. Previously, he was an accounting manager at iStar Inc. with oversight of loans and special investments. Mr. Baglien received a Masters of Business Administration from Kellstadt Graduate School of Business at DePaul University and a Bachelor of Science in Accounting from the University of Oregon.

The Compensation Committee has furnished the following report. The information contained in this “Compensation Committee Report” is not to be deemed “soliciting material” or “filed” with the SEC, nor is such information to be incorporated by reference into any future filings under the Securities Act of 1933, as amended, or the Exchange Act except to the extent that we specifically incorporate it by reference into such filings.

Our Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis” disclosed in this proxy statement as required by Item 402(b) of Regulation S-K of the Exchange Act.

Based on such review and discussions, our Compensation Committee recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this proxy statement.

Compensation Committee

Jamie Handwerker (Chair)

Pat Augustine

Peter J. McDonough

Buford H. Ortale

Elizabeth K. Tuppeny

Compensation Discussion and Analysis

This Compensation Discussion and Analysis describes our compensation program, objectives and policies for our “Named Executive Officers” or NEOs (as such term is defined in Item 402(a) of Regulation S-K of the Exchange Act) for the year ended December 31, 2023. Our NEOs for 2023 were: Richard J. Byrne, Chief Executive Officer, Michael Comparato, President (appointed in March 2023) and Jerome S. Baglien, Chief Financial Officer and Chief Operating Officer.

Compensation Philosophy

The Compensation Committee of the Board of Directors reviews and approves all compensation provided by FBRT to the CEO and other NEOs with the ultimate goal of creating and maintaining a culture that emphasizes integrity and accountability. The Compensation Committee is focused on developing a competitive compensation program that supports FBRT’s mission and values and encourages successful execution of our business goals. We believe our compensation program should support and reinforce our goals for growth, financial performance, and leadership development while aligning the interests of our executives and stockholders for long-term value creation. Below is a graphic demonstrating our stockholder engagement process as it relates to compensation:

Compensation-Related Stockholder Engagement

Key Compensation Governance Practices

The Compensation Committee independently governs the executive compensation program with the support of a third-party compensation consultant. Our compensation program demonstrates strong governance through the following key components:

Overview of FBRT’s Structure as an Externally Managed REIT

FBRT is an externally-managed REIT, which means we have no employees and instead pay our Advisor, Benefit Street Partners L.L.C., to manage our business. As our Advisor, Benefit Street Partners is responsible for identifying, originating, acquiring, and managing investments on FBRT’s behalf. In exchange, FBRT pays a fee of 1.5% of stockholders’ equity as well as an annual subordinated performance fee of 15% of Total Return over a 6% per annum hurdle. The Board of Directors oversees FBRT and its relationship with the Advisor in order to protect the interests of FBRT stockholders. Our non-employee executive officers in 2023, Messrs. Byrne, Comparato and Baglien, are each employees of our Advisor and are compensated by the Advisor. The following chart summarizes our structure and is important context to have when analyzing our Say-on-Pay:

The Company’s Compensation Practices

We do not pay any cash compensation to our NEOs or employees of the Advisor. As employees of the Advisor, they are compensated by the Advisor. Pursuant to our 2021 Equity Incentive Plan, the Compensation Committee may, from time to time, grant awards consisting of restricted shares of our Common Stock, restricted stock units and/or other equity-based awards to qualified directors, officers, advisors, consultants, and other personnel, including the NEOs. These equity-based awards are generally subject to time-based vesting requirements. Since 2022, our Compensation Committee has approved annual equity awards to certain employees of the Advisor and its affiliates, including our NEOs.

Our Compensation Committee believes that its equity compensation practices align the long-term interests of the NEOs with those of our stockholders and encourage the retention of our NEOs’ expertise and leadership, a benefit that is evidenced by the lengthy tenure and lack of turnover amongst our NEO population.

Role of Compensation Consultant

The Compensation Committee engaged F.W. Cook as its independent compensation consultant to assist the Compensation Committee in developing and evaluating the framework for issuing long-term equity-based awards to our NEOs and other personnel of our Advisor. At the time of F.W. Cook’s engagement, the Compensation Committee reviewed F.W. Cook’s independence and determined that F.W. Cook’s work for the Compensation Committee did not raise any conflict of interest pursuant to applicable SEC and NYSE rules. F.W. Cook met with the Compensation Committee on several occasions in 2023 to advise on pay methodologies, award terms, peer practices and other compensation considerations.

Role of Management

The Compensation Committee is responsible for approving compensation for our NEOs, which as noted above, is limited to annual equity awards. The Compensation Committee considers the recommendations of the Company’s Chief Executive Officer, Mr. Byrne, with respect to grants made to other NEOs and with respect to the size of the pool of awards allocated to the employees of the Advisor and its affiliates who provide services to the Company under the Advisory Agreement.

2023 Equity Grants

On January 27, 2023, the Compensation Committee approved the grant of an aggregate amount of 442,419 restricted stock units to employees of the Advisor and its affiliates who provide services to the Company under the Advisory Agreement. The aggregate amount approved included grants of 72,999, 68,427 and 53,090 restricted stock units to Messrs. Byrne, Comparato and Baglien, respectively. The restricted stock units, which were granted under the Company’s 2021 Equity Incentive Plan, vest in equal annual installments beginning on the anniversary of the date of grant over a period of three years subject to continuing service. To the extent that ordinary cash dividends are paid to holders of shares of our Common Stock, outstanding restricted stock units are entitled to a corresponding cash dividend equivalent payment.

In determining the equity-based awards for 2023, the Compensation Committee did not apply any fixed metrics. Rather, the Compensation Committee took into consideration a range of factors, including financial performance measures such as absolute and relative total shareholder return and economic return, operational performance measures such as our origination volumes, the credit quality of the portfolio and strategic decisions including underlying asset type, loan type and geographic focus, as well as the individual performance of each of our NEOs.

Stockholder Engagement

At our 2023 Annual Meeting, our Say on Pay proposal received slightly below 80% support. Upon analyzing the voting behavior of our stockholders, the Board noted that many of our largest institutional stockholders voted in favor of the proposal, but overall turnout was low (approximately half of our outstanding shares) given our large retail stockholder base. Given the generally low turnout, one proxy advisor’s recommendation that its subscribers vote “Against” the Say on Pay proposal may have had an outsize impact on the outcome. The Board believes that a combination of low voter turnout, paired with an ”Against” recommendation from a proxy advisor, may have partially drove FBRT’s inaugural Say-on-Pay to receive slightly below 80% support.

As a Board that values and proactively seeks stockholder feedback, we take the results of our Say-on-Pay vote very seriously. Voting results and stockholder feedback are crucial to our continual assessment of our compensation programs, decisions, and policies. Our Compensation Committee actively reviews and approves our compensation practices bearing in mind stockholder feedback and voting results.

Following the Annual Meeting, the Board and management team amplified our robust stockholder outreach efforts to better understand the result in more detail and to help determine if any changes should be made to the compensation program. In total, we reached out to stockholders representing approximately 46% of outstanding stock, or approximately 92% of the votes cast at our 2023 annual meeting. We ultimately met with stockholders representing approximately 17% of outstanding stock, or approximately 34% of the votes cast at our 2023 annual meeting. Our Chairman, Lead Independent Director, and Chair of the Compensation Committee participated in all of these meetings.

By the Numbers: Stockholder Engagement Effort After 2023 Annual Meeting

Responsiveness to Stockholder Feedback

FBRT’s Board makes a concerted effort not only to engage with stockholders, but also to apply feedback received into our compensation practices and related disclosure where practical. As such, we want to highlight the following actions the Board took to enhance FBRT’s compensation-related disclosures in direct response to the feedback we received during stockholder outreach efforts conducted during fall of 2023 into early 2024: 

2024 Equity Grants

On February 1, 2024, the Compensation Committee approved the grant of an aggregate amount of 766,665 restricted stock units to employees of the Advisor and its affiliates who provide services to the Company under the Advisory Agreement. The aggregate amount approved included grants of 119,063, 118,865 and 75,472 restricted stock units to Messrs. Byrne, Comparato and Baglien, respectively.

Our Advisor’s Compensation of Our NEOs

As noted above, we currently have no employees and our Advisor, through its employees and employees of its affiliates, manages our affairs on a day-to-day basis and receives fees and expense reimbursements pursuant to the terms of the Advisory Agreement. As of December 31, 2023, the Advisor had 443 employees. Mr. Byrne, who serves as our Chief Executive Officer, also serves as President of the Advisor. Mr. Comparato, who serves as our President, also serves as a Managing Director and Head of Commercial Real Estate for the Advisor. Mr. Baglien, who serves as our Chief Operating Officer and Chief Financial Officer, also serves in the same capacity for the real estate division of the Advisor. Our Advisor is an investment advisor registered with the SEC that is a wholly-owned subsidiary of Franklin Resources, Inc.

There is no direct relationship between fees we pay the Advisor and compensation the Advisor pays our non-employee executive officers.

The Advisory Agreement does not require our non-employee executive officers to dedicate a specific amount of time to fulfilling our Advisor’s obligations to us under the Advisory Agreement and does not require a specified amount or percentage of the fees paid to the Advisor to be allocated to our NEOs. Our Advisor has informed us that it does not compensate its employees specifically for such services because these individuals also provide investment management and other services to other investment vehicles that are sponsored, managed or advised by the Advisor and its affiliates and that, therefore, it cannot quantify compensation to our NEOs specifically attributable to their services to us. The total compensation of our NEOs reflects the performance of all the Advisor’s investment vehicles for which these individuals provide services, including, but not limited to, us.

We do not have any influence over the amount of compensation the Advisor pays our NEOs.

Our independent compensation committee determines the annual equity grants we make to our NEOs and the pool of grants available for other Advisor employees that provide services to us, but we have no influence over the compensation the Advisor pays its employees. Our Advisor determines the compensation it pays and benefits it offers to its employees that also serve as our executive officers. We do not have employment agreements with our executive officers, we do not provide pension or retirement benefits, perquisites or other personal benefits to our executive officers and we do not have arrangements to make payments to our executive officers upon their termination or in the event of a change in control of the Company.

Our Advisor and its affiliates compensate their employees, including our NEOs, in accordance with the Advisor’s compensation policies and practices. The compensation of senior employees at the Advisor, including our NEOs, consists of all or substantially all of the following components: a fixed annual base salary and several variable performance-based compensation elements including: (i) an annual cash bonus payment based on the performance of the Advisor and of the NEO, (ii) an allocation of carried interest, the payment of which is based on the performance of investment funds managed by the Advisor, (iii) equity awards representing shares of Franklin Resources, Inc. common stock, and (iv) various employee benefit plans and programs.

For 2023, our NEOs’ compensation paid by the Advisor, in the aggregate, was apportioned 14% to fixed compensation and 86% to variable performance-based compensation. Our Advisor did not utilize any fixed performance metrics to determine the amount of variable compensation payable to our NEOs in 2023, but rather considered a range of various factors, including but not limited to the performance of the NEOs, the performance of the applicable business functions for which the NEOs are primarily responsible, the performance of our Common Stock, market conditions, growth in our business and the credit quality of our investment portfolio.

The Advisor has not disclosed to us the total amount of compensation the Advisor pays to our NEOs and we are not contractually entitled to such information. However, given we have no influence over the amount of such compensation and that such compensation relates to services unrelated to us, the Compensation Committee does not consider such information to be useful to the Board or our stockholders.

We annually assess the risks associated with the Advisor’s compensation policies and practices.

While, as discussed above, we do not influence the amount of compensation the Advisor pays its employees who provide services to us, our Compensation Committee does, on an annual basis, review and assess the risks of the Advisor’s compensation policies and practices to the Company. As part of this assessment, the Compensation Committee reviews with the Advisor such policies and practices, including the forms of compensation, the percentage of compensation that is variable and fixed and the structure of incentive compensation. The Compensation Committee also considers the effectiveness of the Advisor’s policies and practices in retaining key employees. Since taking over as the Advisor in 2016, the Company has not experienced any turnover in its executive officers. 

Executive Officer Stock Ownership Policy

In November 2022, the Nominating and Corporate Governance Committee adopted stock ownership guidelines applicable to the Company’s executive officers in order to further align the long-term interests of our executive officers with those of our stockholders. Further details on our executive stock ownership policy can be found on page 22.

Compensation Recovery Policy

The Compensation Committee adopted in 2023 a compensation recovery policy pursuant to which the Company must seek to recover incentive-based compensation from senior executives in the event the Company is required to prepare an accounting restatement due to material noncompliance of the Company with any financial reporting requirement under the securities laws (including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period).

The policy requires the Company to recover reasonably promptly the amount of incentive compensation received by senior officers that exceeds the incentive compensation that would have been received taking into account the accounting restatement, regardless of whether the restatement is due to any fault or misconduct on the part of the officer. The policy complies with, and will be interpreted and administered in a manner consistent with, all applicable laws and regulations, including without limitation, Section 303A.14 of the NYSE Listed Company Manual and Rule 10D-1 of the Exchange Act.

No Perquisites or Other Benefits

Because the Company does not pay the compensation of our NEOs (besides the annual equity award), the Company does not provide any perquisites or other employee benefits to our NEOs.

Summary Compensation Table

For the year ended December 31, 2023, we did not provide any of our NEOs with any cash compensation, bonuses, or any other compensation (such as perquisites or employee benefits) besides the restricted stock units granted under our 2021 Equity Incentive Plan. The following table sets forth the annual compensation of our NEOs for the years ended December 31, 2023 and 2022. We did not pay any compensation to our NEOs in 2021.

Grants of Plan-Based Awards in 2023

The following table provides information regarding restricted stock unit awards granted to our NEOs under the 2021 Equity Incentive Plan during the year ended December 31, 2023.

Outstanding Equity Awards at December 31, 2023

The following table provides information regarding outstanding equity awards held by each of our NEOs as of December 31, 2023.

Option Exercises and Stock Vested in 2023

The following table provides information regarding stock awards for our NEOs that vested in 2023.

Potential Payments Upon Termination or Change in Control

Since our NEOs are employees of our Advisor, we generally do not have any obligation to make any payments to any of our NEOs upon a termination of employment or upon a change in control. However, pursuant to the restricted stock unit award agreements that we entered into with our named executive officers in 2023 and 2022, our named executive officers are entitled to vest in such awards in the event of a qualifying termination pursuant to the NEOs’ death or disability, or in certain circumstances in connection with a change of control of the Company. The following table describes the restricted stock unit vesting values that would be received by our named executive officers under various scenarios upon termination of employment or a change in control of the Company, calculated as if the separation event occurred on December 31, 2023.