EXECUTIVE OFFICERS AND COMPENSATION
stockholders equity, subject to certain adjustments. In exchange for this fee, our Manager provided us with our executive officers and mortgage investment team and administered our business
activities and day-to-day operations. Our Manager paid our executive officers and others providing services to us from the fees collected pursuant to the management agreement and other sources. We did not pay any compensation to our executive
officers, nor did we make any grants of plan-based awards of any kind to them, during 2015 or prior periods. None of our executive officers received any options or stock directly from us, and we did not provide any of our executive officers with
pension benefits or nonqualified deferred compensation plans prior to December 31, 2015. Our Manager made all decisions regarding the compensation of our executive officers, and the allocation of the management fee to compensation for our officers
and other employee benefits was solely in the discretion of our Manager.
During this period, all of our executive officers were employees of ACAS or one
of its affiliates and did not provide their services exclusively to us. Each of our executive officers received compensation reflecting their aggregated services to us, ACAS and its other affiliates. AMM, as the corporate parent of our Manager, had
employment agreements with Messrs. Kain, Federico and Kuehl and an employment offer letter with Ms. Bell. The terms of these employment agreements provided for base salary, incentive cash bonus and long-term incentive compensation based on the
policies and objectives of our manager. We did not play a direct role in establishing or setting the level of compensation or the measures on which annual cash bonuses or long-term incentives would be based.
Following our Internalization
result of the Internalization and our ownership of AMM, we now employ and pay compensation directly to our executive officers, and we inherited the then-existing employment arrangements with Messrs. Kain, Federico and Kuehl and Ms. Bell. At the
closing of the Internalization, these employment arrangements were amended to address certain technical matters related to the Internalization. Specifically, the amendments clarified lines of reporting and the role of the Board of Directors and
Compensation Committee in employment-related decisions and provided for cash settlement of long-term equity incentives in the event that a long-term equity incentive plan was not approved by our stockholders.
In November 2016, we entered into new employment agreements with each of Messrs. Kain, Federico and Kuehl, which represent departures from the program
employed by our former external manager in some important respects, including the method by which incentive compensation would be determined and the frequency of payment of incentive compensation. As revised, these updated employment agreements
reflect key elements of our executive compensation program and more closely reflect our pay-for-performance philosophy on compensation. Thus, over time a majority of compensation for Messrs. Kain, Federico and Kuehl will be comprised of short-term
and long-term incentives, and these incentives will be based on performance goals established by our Compensation Committee.
We completed the
Internalization in part to reduce our overall cost of operations while ensuring the ongoing continuity of our business. Retention of our executive officers during this period of transition is an essential part of that effort. Thus, the present and
proposed compensation program for executive officers reflects a desire to keep and maintain our senior management team intact during this period. This objective has also resulted in our taking steps to adjust compensation practices implemented by
our former external manager over time to better align with our other compensation goals without creating disruption of the workforce. We have thus made a retention bonus award to Ms. Bell that is designed to retain her employment through March 1,
INVESTMENT CORP. Proxy Statement 23