Granite Point Mortgage Trust Inc. (GPMT) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. My name is Steve Kasnet, and I'm the Chairman of the Board of Directors of Granite Point Mortgage Trust. On behalf of the entire Board of Directors and the management team of Granite Point, it's my pleasure to welcome you to our 2020 Annual Meeting of Stockholders. We appreciate your taking the time to join the meeting, especially during the incredibly challenging times facing our nation and the world. During today's meeting, our common stockholders as of the record date for this meeting will be able to vote their shares and submit questions online at virtualshareholdermeeting.com/GPMT2020. The polls for voting on each of the items of business are currently open and will remain open until I announce their closure later in the meeting. If you have previously voted by proxy and do not wish to change your vote, your vote will be cast as you previously indicated and no further action is needed. If you are a record holder and wish to change your vote or have not already cast your vote using our electronic voting system, you may cast your vote online at the virtual meeting website. Access to the meeting website requires the control number listed on the notice of availability of proxy materials that you received prior to this meeting. If you do not indicate the number of shares you intend to vote on your electronic ballot, your electronic ballot will automatically represent all shares that you are entitled to vote at this meeting. Stockholders who are entitled to vote also have the ability to submit questions online. Our Board of Directors, executive officers and representatives from our registered public accounting firm, Ernst & Young, are attending today's virtual meeting and will be available to respond to questions after the formal meeting has been adjourned. I would now like to take a moment to introduce the members of our Board of Directors who are joining us on this webcast. Jack Taylor, who is also our Chief Executive Officer and President; Tanuja Dehne, Tino Kamarck; Reid Sanders, and Hope Woodhouse. Unfortunately, Tom Siering will not be able to join us today. As noted in our proxy materials, Tom previously informed the Board of Directors that he would not stand for reelection at today's meeting. On behalf of Granite Point's Board of Directors and management team, I'd like to extend our heartfelt thanks to Tom for his stewardship of and vital contributions to Granite Point over the years. We also have several members of the company's senior management team with us today, including Marcin Urbaszek, Chief Financial Officer; Steve Alpart, Chief Investment Officer; Steve Plust, Chief Operating Officer; Mike Karber, General Counsel; Rebecca Sandberg, Secretary; Peter Morral, Senior Managing Director; and Chris Petta, Investor Relations. We're also pleased to have with us today Reece Devlin and Jill Kretschmar, who are representing our independent registered public accounting firm, Ernst & Young. The Board of Directors has appointed Christine Sundberg, a representative of Broadridge Financial Solutions, to serve as the inspector of elections at this meeting. Ms. Sundberg executed the oath of her office prior to the start of this meeting. A detailed agenda and the rules of conduct for this meeting are available on the meeting website. In order to ensure an orderly meeting, today's proceedings will be conducted pursuant to the requirements set forth in the rules of conduct. I would now like to introduce Granite Point Secretary, Rebecca Sandberg, who will serve as Secretary of this meeting. Rebecca, you may proceed with the report of the Secretary.

Thank you, Steve. Today's meeting will take place as described in the agenda. After the formal meeting has been adjourned, we will then conduct a question-and-answer session to address appropriate stockholder questions regarding the business and operations of the company that have been submitted via the meeting website. I note for the record that the company has received an affidavit certifying that the notice of meeting, the accompanying proxy materials and our annual report on Form 10-K were mailed on/or about April 23, 2020, to stockholders of record at the close of business on April 3, 2020, which is the record date for this meeting. I also note for the record that copies of the notice of meeting, the proxy statement and the form of proxy were previously filed with the SEC and are available on our meeting website. In addition, I have been advised by the inspector of elections that at least the majority of the company's issued and outstanding shares entitled to vote are represented at today's meeting. Finally, some of our comments and responses to questions may include forward-looking statements that are based on certain assumptions and are subject to a number of risks and uncertainties. The risks, uncertainties and assumptions that could affect these forward-looking statements include risks that are described in Granite's SEC filings. I'd also like to point out that the information presented at this meeting may include references to amounts that are expressed on a non-GAAP basis. A reconciliation of such non-GAAP amounts to GAAP and other information related to these non-GAAP measures is available on our website at gpmtreit.com.

Thank you, Rebecca. A quorum is present, and the meeting is duly convened. The report of the Secretary on the presence of a quorum is accepted. I direct that the affidavit of distribution be made part of the minutes of this meeting. We may now proceed to transact the business for which this meeting has been called. Since there were no stockholder nominations or proposals filed in advance of this meeting, the only matters on which the stockholders at this meeting are voting are: one, the election of 6 directors; two, an advisory vote on executive compensation; and three, the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for our fiscal year ending December 31, 2020. I'll now address each of these proposals separately. As a reminder, the voting polls are currently open and will remain open until I announce their closure later in the meeting. The first proposal we will consider is the election of 6 directors. As indicated in the company's proxy statement, the Board of Directors has nominated each of the Director nominees to serve as Director until our 2021 Annual Meeting of Stockholders and until his or her successor is duly elected and qualified. A majority of all the votes cast at this meeting for a director nominee is sufficient to elect a director. The second proposal is an advisory vote on executive compensation. SEC rules require public companies to provide stockholders with periodic advisory or nonbinding votes on the executive compensation practices. As described in our proxy statement, Granite Point is currently externally managed by Pine River Capital Management L.P., pursuant to a management agreement and therefore, does not have any employees and does not pay any cash compensation directly to any of its executive officers. Each executive officer's compensation is currently comprised of cash compensation paid to them directly by our external manager and equity warrants granted by our Board of Directors pursuant to our equity incentive plan. We are required by SEC rules to seek an advisory vote from our stockholders to approve the compensation of the executive officers listed in our proxy statement. Similar to last year, we are asking stockholders to vote for the adoption of the following advisory resolution. Resolved that the stockholders of the company approve on a nonbinding advisory basis, the compensation paid to the company's executive officers, as disclosed in the company's proxy statement for the 2020 Annual Meeting of Stockholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis and related narrative discussions in the proxy statement. A majority of all votes cast at this meeting is sufficient to approve this proposal. However, the vote is advisory only and is not binding on our external manager or on Granite Point. The final proposal is the ratification of the appointment of Ernst & Young LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2020. Although ratification is not required by our bylaws or otherwise, we are submitting the selection of Ernst & Young to our stockholders for ratification as a matter of good corporate practice. Representatives from Ernst & Young are present and available to answer appropriate questions. A majority of all the votes cast at this meeting is sufficient to ratify the appointment of Ernst & Young to serve as our independent registered public accounting firm. Any stockholder who has not yet voted or wishes to change their vote should do so now by clicking on the voting button on the meeting website and following the instructions there. Stockholders who have sent in proxies or voted via telephone or the Internet and do not want to change their vote, do not need to take any further action. I'll pause now for a moment to allow you to finalize your votes. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls for the 2020 Granite Point Mortgage Trust Annual Meeting of Stockholders closed and direct the inspector of elections to tabulate the ballots. Please wait one moment while we confirm the preliminary results. I've been advised by the inspector of elections that based on preliminary count, each of the 6 Director nominees has been elected. The advisory resolution related to the compensation of our executive officers has been approved, and the appointment of Ernst & Young as our independent registered public accounting firm for the fiscal year ending December 31, 2020 has been ratified. The inspector of elections will furnish the secretary with a written report of the final vote count with respect to the matters voted on today, which shall be included in the minutes of this meeting. I will now turn the floor over to Chris Petta from our Investor Relations team to lead a question-and-answer session.

Thank you, Steve. We would now like to open the meeting for questions submitted by stockholders on the meeting website. As noted in the rules of conduct posted on the meeting website in the interest of time and efficiency, we reserve the right to group questions with familiar nature together. There being no questions, the question-and-answer session is now closed.

I'd like to thank you for your attendance and look forward to speaking with you at our next annual meeting. Thank you for your support.

This now concludes the meeting. Thank you for joining and have a pleasant day.