Redwood Trust IncRWT
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Radoff Urges Redwood Trust to Explore Sale, Threatens 2027 Board Slate
ManagementCorporate Action
Activist investor Bradley L. Radoff issued an open letter urging the board of Redwood Trust, Inc. to immediately hire a qualified investment banker and commence a sale process, arguing the company should not remain publicly traded given its strategic value and what he called the destruction of credibility by the board and management. Radoff, who described himself as a significant holder of Redwood Trust shares, said the company's recent refinancing indicated either a blatant attempt at entrenchment through permanent shareholder dilution or complete incompetence, and that the board and management team cannot regain credibility with investors. He pointed to named executive officer total compensation of $21.3 million for fiscal year 2025 and an average of $24.3 million over the past three years for all current named executive officers, noting the only open market purchase by an executive officer in the past four years was by CFO Brooke Carillo in 2024. Radoff said a sale is the only positive risk-adjusted outcome for shareholders given the company's persistent trading discount to intrinsic value and what he called absurd executive compensation. If the board refuses to initiate a review of strategic alternatives, Radoff said he intends to nominate an alternative slate of director candidates for election to the declassified board at the 2027 annual meeting on a platform of pursuing a value-maximizing sale.
Redwood Trust Inc