Redeemable Preferred Stock and Stockholders’ Equity |
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| Redeemable Preferred Stock and Stockholders' Equity | Note 20. Redeemable Preferred Stock and Stockholders’ Equity Common stock dividends The table below presents dividends declared by the Board on common stock during the last twelve months.
Stock incentive plans The Company currently maintains the Amended and Restated Ready Capital Corporation 2023 Equity Incentive Plan (the “2023 Equity Incentive Plan”)which authorizes the Compensation Committee of the Board to approve grants of equity-based awards to the Company’s directors, officers, advisors, consultants, key employees, and others expected to provide significant services to the Company and its subsidiaries, including the Manager and personnel, employees, officers and directors of certain participating companies. On July 17, 2026, the Company’s stockholders approved the 2023 Equity Incentive Plan which provided for grants of equity-based awards up to 20.5 million shares of the Company’s common stock. The Company currently settles stock-based incentive awards with newly issued shares. The fair value of the RSUs and RSAs granted, which is generally determined based upon the stock price on the grant date, is recorded as compensation expense on a straight-line basis over the vesting periods for the awards, with an offsetting increase in stockholders’ equity. In 2026, 2025, and 2024, the Company granted 2,185,687, 1,210,374, and 774,097, respectively, of time-based RSAs under the 2023 Equity Incentive Plan to certain key employees. These awards generally vest ratably in equal annual installments over a three-year period based solely on continued employment or service. In 2026, the Company also granted 2,550,000 time-based RSUs (the “Employee RSUs”) under the 2023 Equity Incentive Plan to certain key employees at a grant date fair value of $1.85 per Employee RSU. The Employee RSUs will vest, in full, on December 31, 2028, based solely upon continued employment or service. The Company also granted in 2026, 2025 and 2024 291,260, 89,285, and 126,930, respectively, time-based RSAs and RSUs to non-employee directors of the Company, which vest ratably in equal installments quarterly over a one-year period. Directors may elect to receive time-based RSAs or time-based RSUs that have a deferred settlement date of their choosing. Dividends or dividend equivalents are currently paid on all time-based RSAs and Employee RSUs, and dividend equivalents are paid on deferred RSU awards during their deferral period. The table below summarizes RSU and RSA activity, excluding Employee RSUs and performance-based equity awards. See above and below for further details on Employee RSUs and performance-based equity awards, respectively.
and $1.6 million and $3.4 million for the three and six months ended June 30, 2025, respectively, of non-cash compensation expense related to its stock-based incentive plan in the consolidated statements of operations. As of June 30, 2026 and December 31, 2025, approximately $10.8 million and $11.9 million, respectively, of non-cash compensation expense related to unvested awards had not yet been charged to net income. These costs are expected to be amortized into compensation expense ratably over the course of the remaining vesting periods. Performance-based equity awards under the 2023 Equity Incentive Plan2026 performance-based RSUs. In March of 2026, the Company granted, to certain key employees, 7,650,000 performance-based RSUs at a grant date fair value of $0.25 per performance-based RSU, based on an option pricing model. These performance-based RSUs were designed based on total stockholder return, and will vest if the Company’s common stock equals or exceeds certain milestones during the performance period commencing on March 1, 2026 and ending December 31, 2028. The performance-based RSUs may vest in up to ten, approximately equal parts, provided that the 30-day volume weighted average price of the Company’s common stock equals or exceeds ten, approximately equally spaced milestones between specified points, and further conditioned upon the key employee’s continued employment (with certain exceptions) with the Company or our Manager, as applicable. The actual number of shares that the key employees receive at the end of the performance period may range from 0% to 100% of the total award. The fair value of the performance-based RSUs is recorded as compensation expense over the performance period and will cliff vest at the end of the three-year performance period, with an offsetting increase in stockholders’ equity. Dividend equivalents are accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vest. 2025 performance-based RSUs. In February 2025, the Company granted, to certain key employees, 238,096 performance-based RSUs at a grant date fair value of $6.72 per performance-based RSU. The performance-based RSUs are allocated 50% to awards that may be earned based on achievement of performance goals related to distributable return on equity (“ROE”) for the three-year forward-looking period ending December 31, 2027 and 50% to awards that may be earned based on achievement of performance goals related to relative TSR for such three-year forward-looking performance period relative to the performance of a designated peer group. Subject to the distributable ROE metric and relative TSR achieved during the performance period, the actual number of shares that the key employees receive at the end of the performance period may range from 0% to 200% of the target award. The fair value of the performance-based RSUs is recorded as compensation expense over the performance period and will cliff vest at the end of the three-year performance period, with an offsetting increase in stockholders’ equity. Dividend equivalents are accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vest. In connection with a previously announced mutual separation of a former officer and the Company (the “Separation”) on February 26, 2026 (the “Separation Date”), the former officer was entitled to the accelerated vesting, as of the Separation Date, of 89,286 performance-based RSUs (at target) that he held as of the Separation Date. 2024 performance-based RSUs. In February 2024, the Company granted, to certain key employees, 132,450 performance-based RSUs at a grant date fair value of $9.06 per performance-based RSU. The performance-based RSUs are allocated 50% to awards that may be earned based on achievement of performance goals related to distributable ROE for the three-year forward-looking period ending December 31, 2026 and 50% to awards that may be earned based on achievement of performance goals related to relative TSR for such three-year forward-looking performance period relative to the performance of a designated peer group. Subject to the distributable ROE metric and relative TSR achieved during the performance period, the actual number of shares that the key employees receive at the end of the performance period may range from 0% to 200% of the target award. The fair value of the performance-based RSUs is recorded as compensation expense over the performance period and will cliff vest at the end of the three-year performance period, with an offsetting increase in stockholders’ equity. Dividend equivalents are accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vest. In connection with the Separation, the former officer was entitled to the accelerated vesting, as of the Separation Date, of 44,150 performance-based RSUs (at target) that he held as of the Separation Date. Performance-based equity awards under the 2013 Equity Incentive Plan 2023 performance-based RSUs. In June 2023, the Company granted, to certain key employees, 222,552 performance- based RSUs at a grant date fair value of $10.11 per performance-based RSU, which could have been earned based on the achievement of performance goals by the end of 2024 in relation to the Broadmark Merger. The awards were allocated 30% to awards that may be earned based on cost savings in 2024 as a percentage of the pre-merger Broadmark expense run rate, 15% to awards that could have been earned based on the volume of Broadmark product originated from the time of the merger through the end of 2024, 30% to awards that could have been earned based on the generation of incremental liquidity from asset level financing, portfolio run-off, sales or corporate re-levering through the end of 2024, and 25% to awards that could have been earned based on distributable ROE for 2024. Subject to the level of achievement of these goals during the performance period, the actual number of shares that the key employees could have received ranged from 0% to 200% of the target award. The fair value of the performance-based RSUs granted was recorded as compensation expense over the performance period and vested 2/3rds on December 31, 2024, and 1/3rd on December 31, 2025, with an offsetting increase in stockholders’ equity. Awards earned on December 31, 2024 based on achievement of the applicable performance metrics but vesting on December 31, 2025 were converted into RSAs that were eligible to vest on December 31, 2025 based on the key employee’s continued employment or service through that date. Dividend equivalents were accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vested. Following the conclusion of the performance period on December 31, 2024, the Board determined that the cost savings, product origination volumes and incremental liquidity generation goals were achieved at maximum payout and the distributable ROE goal was not achieved. As such, on February 3, 2025, the Board approved the settlement of 333,828 performance-based RSUs. The fair value of the performance-based RSUs granted was recorded as compensation expense over the performance period with an offsetting increase in stockholders’ equity. In February 2023, the Company granted, to certain key employees, 92,451 performance-based RSUs at a grant date fair value of $12.98 per performance-based RSU. The performance-based RSUs were allocated 50% to awards that could have been earned based on achievement of performance goals related to distributable ROE for the three-year forward- looking period ending December 31, 2025 and 50% to awards that could have been earned based on achievement of performance goals related to relative TSR for such three-year forward-looking performance period relative to the performance of a designated peer group. Subject to the distributable ROE metric and relative TSR achieved during the performance period, the actual number of shares that the key employees received at the end of the performance period could have ranged from 0% to 200% of the target award. The fair value of the performance-based RSUs was recorded as compensation expense over the performance period and vested at the end of the three-year performance period, with an offsetting increase in stockholders’ equity. Dividend equivalents were accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vested. Following the conclusion of the performance period on December 31, 2025, the Board determined that the distributable ROE and relative TSR goals were not achieved and were therefore forfeited. 2022 performance-based RSUs. In February 2022, the Company granted, to certain key employees, 84,566 performance-based RSUs at a grant date fair value of $14.19 per performance-based RSU. During April 2024, 8,809 performance-based RSUs were forfeited. The performance-based RSUs were allocated 50% to awards that could have been earned based on achievement of performance goals related to distributable ROE for the three-year forward-looking period ending December 31, 2024 and 50% to awards that could have been earned based on achievement of performance goals related to relative TSR for such three-year forward-looking performance period relative to the performance of a designated peer group. Subject to the distributable ROE metric and relative TSR achieved during the vesting period, the actual number of shares that the key employees received at the end of the performance period could have ranged from 0% to 200% of the target award. The fair value of the performance-based RSUs was recorded as compensation expense over the performance period and vested at the end of a three-year performance period, with an offsetting increase in stockholders’ equity. Dividend equivalents were accrued by the Company during the performance period and paid to the holder if and when the performance-based RSUs vested. Following the conclusion of the performance period on December 31, 2024, the Board determined that the distributable ROE threshold goal was achieved and the relative TSR threshold goal was achieved. As such, on February 22, 2025, the Board approved the settlement of 57,029 performance- based RSUs. The fair value of the performance-based RSUs granted was recorded as compensation expense over the performance period with an offsetting increase in stockholders’ equity. Preferred Stock In the event of a liquidation or dissolution of the Company, any outstanding preferred stock ranks senior to the outstanding common stock with respect to payment of dividends and the distribution of assets. The Company classifies Series C Cumulative Convertible Preferred Stock, or Series C Preferred Stock, on the balance sheets using the guidance in ASC 480‑10‑S99. The Series C Preferred Stock contains certain fundamental change provisions that allow the holder to redeem the preferred stock for cash only if certain events occur, such as a change in control. As of June 30, 2026, the conversion rate was 1.8391 shares of common stock per $25 principal amount of the Series C Preferred Stock, which is equivalent to a conversion price of approximately $13.59 per share of common stock. As redemption under these circumstances is not solely within the Company’s control, the Series C Preferred Stock has been classified as temporary equity. The Company has analyzed whether the conversion features should be bifurcated under the guidance in ASC 815 and has determined that bifurcation is not necessary. The table below presents details on preferred equity by series.
In the table above, •Shareholders are entitled to receive dividends, when and as authorized by the Board, out of funds legally available for the payment of dividends. Dividends for Series C Preferred Stock are payable quarterly on the 15th day of January, April, July and October of each year or if not a business day, the next succeeding business day. Dividends for Series E preferred stock are payable quarterly on or about the last day of each January, April, July and October of each year. Any dividend payable on the preferred stock for any partial dividend period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends will be payable in arrears to holders of record as they appear on the Company’s records at the close of business on the last day of each of March, June, September and December, as the case may be, immediately preceding the applicable dividend payment date. •The Company declared dividends of $0.1 million and $1.9 million on its Series C Preferred Stock and Series E Preferred Stock, respectively, during the three months ended June 30, 2026. The dividends were paid on July 15, 2026 for Series C Preferred Stock and on July 31, 2026 for Series E Preferred Stock to the holders of record as of the close of business on June 30, 2026. •The Company may, at its option, redeem the Series E Preferred Stock, in whole or in part, at any time and from time to time, for cash at a redemption price equal to 100% of the liquidation preference of $25.00 per share, plus accrued and unpaid dividends, if any, to the redemption date. Series E Preferred Stock is not redeemable prior to June 10, 2026, except under certain conditions. Equity ATM Program On July 9, 2021, the Company, the operating partnership and the Manager entered into an Equity Distribution Agreement, as amended on March 8, 2022 (the “Equity Distribution Agreement”), with JMP Securities LLC (the “Sales Agent”), pursuant to which the Company may sell, from time to time, shares of the Company’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $150 million, through the Sales Agent either as agent or principal (the “Equity ATM Program”). The Company made no such sales through the Equity ATM Program during the three and six months ended June 30, 2026 or June 30, 2025. As of June 30, 2026, shares representing approximately $78.4 million remain available for sale under the Equity ATM Program. |
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