General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Abstract]

General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses

Components of our general and administrative expenses, loan acquisition costs, and other expenses for the years ended December 31, 2021, 2020 and 2019 are presented in the following table.

Table 21.1 – Components of General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses


	Years Ended December 31,
(In Thousands)	2021		2020		2019
General and Administrative Expenses
Fixed compensation expense	$	46,328	$	46,689	$	39,639
Annual variable compensation expense	58,569		14,116		21,728
Long-term incentive award expense (1)	19,938		12,439		13,402
Acquisition-related equity compensation expense (2)	3,813		4,848		1,010
Systems and consulting	14,445		11,728		10,746
Office costs	7,837		7,794		6,310
Accounting and legal	4,975		7,928		5,450
Corporate costs	3,388		2,829		2,351
Other	11,566		6,833		8,101
Total General and Administrative Expenses	170,859		115,204		108,737

Loan Acquisition Costs
Commissions	7,116		4,321		3,833
Underwriting costs	7,762		4,945		4,767
Transfer and holding costs	1,458		1,757		1,335

Total Loan Acquisition Costs	16,336		11,023		9,935

Other Expenses
Goodwill impairment expense	—		88,675		—
Amortization of purchase-related intangible assets	15,304		15,925		8,696
Contingent consideration expense (3)	—		—		3,218
Other	1,391		4,185		1,108
Total Other Expenses	16,695		108,785		13,022
Total General and Administrative Expenses, Loan Acquisition Costs, and Other Expenses	$	203,890	$	235,012	$	131,694

(1)For the years ended December 31, 2021 and 2020, long-term incentive award expense includes $14 million and $10 million, respectively, of expense for awards settleable in shares of our common stock and $6 million and $2 million, respectively, of expense for awards settleable in cash.

(2)Acquisition-related equity compensation expense relates to 588,260 shares of restricted stock that were issued to members of CoreVest management as a component of the consideration paid to them for our purchase of their interests in CoreVest in 2019. The grant date fair value of these restricted stock awards was $10 million, which was recognized as compensation expense over the two-year vesting period on a straight-line basis in accordance with GAAP.

(3)Contingent consideration expense relates to the acquisition of 5 Arches during 2019. Refer to Note 2 for additional detail.

Long Term Cash-Based Awards

During the years ended December 31, 2021 and 2020, $1 million and $8 million of long-term cash-based retention awards were granted to certain executive and non-executive employees that will vest and be paid over a three year period, subject to continued employment through the vesting periods from 2021 through 2024. Additionally, during 2020, Cash Performance Awards with an aggregate granted award value of $2 million, were granted to certain executive and non-executive employees that will vest between 0% to 400% of granted award value based on a relative total stockholder return measure, and are contingent on continued employment over a three-year service period.

The value of long-term cash-based awards is being amortized into expense on a straight-line basis over each award's respective vesting period. The Cash Performance Awards are amortized on a straight-line basis over three years; however, they are remeasured at fair value each quarter-end and the cumulative straight-line expense is trued-up in respect to their updated value. For the years ended December 31, 2021 and 2020, General and administrative expenses included $3 million and $5 million of aggregate expense, respectively, related to long-term cash-based awards and the Cash Performance awards.

Cash-Settled Deferred Stock Units

During the years ended December 31, 2021 and 2020, $4 million and $2 million of cash-settled deferred stock units were granted to certain executive officers and non-executive employees that will vest over the next four years through 2025 and 2024, respectively. These 2021 and 2020 awards will be fully vested and payable in cash with a vested award value based on the closing market price of our common stock on the final vesting date in December 2025 and December 2024, respectively. These awards are classified as a liability in Accrued expenses and other liabilities on our consolidated balance sheets, and will be amortized over the vesting period on a straight-line basis, adjusted for changes in the value of our common stock at the end of each reporting period. For the years ended December 31, 2021 and 2020, we recognized an expense of $2 million and less than $0.1 million, respectively, for cash-settled deferred stock units in "Long-term incentive award expense," as presented in Table 21.1 above.