NEW YORK (Reuters) – Fortress Investment Group (FIG.N), which on Sunday named Daniel Mudd as its new chief executive, will pay the former Fannie Mae chief a $1.9 million bonus for the final four-and-a-half months of this year.
Mudd, pushed out when the U.S. government nationalized nearly all of Fannie Mae last year, was named CEO to allow Wesley Edens and other top officers to focus more on their hedge fund and private equity investments.
Currently serving as a Fortress director, Mudd will receive a cash bonus of $1.3 million for this year on his Aug. 11 start date as CEO, according to a regulatory filing this week. Mudd is also guaranteed a cash bonus of “not less than” $1.8 million for 2010.
Mudd will receive an annual base salary of $200,000 for the rest of this year and for next year, according to his employment letter dated Sunday.
In addition, he will receive $25 million worth of Fortress restricted stock on Aug. 11, half of which will pay dividends. The stock will vest in annual installments over the next eight years.
Fortress also said Mudd will be granted $500,000 in restricted Class A stock, which will vest on Jan. 1, as well as 22,216 common shares currently worth $69,091.
The employment letter, submitted to the U.S. Securities and Exchange Commission, also dictates that Mudd and his family must move to the New York City area by the end of August 2010. (Reporting by Joseph A. Giannone; Editing by Tim Dobbyn)