Other definitive proxy statements



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UNITED STATES




SECURITIES AND EXCHANGE COMMISSION




Washington, D.C. 20549








SCHEDULE 14A




(RULE 14a-101)




INFORMATION REQUIRED IN PROXY STATEMENT




SCHEDULE 14A INFORMATION




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Securities Exchange Act of 1934




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Definitive Proxy Statement










Definitive Additional Materials










Soliciting Material under §240.14a-12




LOGO




Mr. Cooper Group Inc.




(Name of Registrant as Specified In Its Charter)










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March 30, 2021





Dear Stockholders,





On behalf of your Board of Directors, I want to invite you to attend our 2021 Annual Meeting of Stockholders. The meeting will be held on Thursday, May 13, 2021, at 9:00 a.m., central
time, at the Four Points by Sheraton – Dallas/Fort Worth Airport North, 1580 Point West Blvd., Coppell, TX 75019. Please RSVP at

secretary@mrcooper.com

by 5:00 p.m. central time on May 12, 2021, if you plan to attend the meeting in person.
Details regarding the business to be conducted at the annual meeting are more fully described in the accompanying materials.





I would like to personally thank you for your continued investment in Mr. Cooper Group. We look forward to welcoming you to our annual meeting. Your vote is important to us – even if
you do not plan to attend the meeting in person, we hope that you vote your proxy promptly, so your shares are represented.





We are furnishing proxy materials to our stockholders primarily over the Internet. As a result, we are mailing to many of our stockholders a notice instead of a paper copy of our Proxy
Statement and our 2020 Form 10-K. The notice contains instructions on how to access those documents over the Internet. The notice also contains instructions on how each of those stockholders can receive a paper copy of our proxy materials, including
our Proxy Statement, our 2020 Form 10-K and a proxy card or voting instruction form. Stockholders who do not receive a notice will receive a paper copy of the proxy materials by mail.
























Sincerely,









Jay Bray




Chairman, President & Chief Executive Officer









































REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:










VIA THE INTERNET



Visit

www.proxyvote.com

.









BY MAIL



Sign, date, and return the enclosed proxy card or voting instruction form.












BY TELEPHONE



Call the telephone number on your


proxy card or voting instruction form.









IN PERSON



Attend the annual meeting in person. Please RSVP at

secretary@mrcooper.com


.





































8950 Cypress Waters Blvd.


Coppell, Texas 75019









March 30, 2021






NOTICE OF THE 2021 ANNUAL MEETING OF STOCKHOLDERS



























































9:00 a.m., central time, Thursday, May 13, 2021







Four Points by Sheraton – Dallas/Fort Worth Airport North


1580 Point West Blvd,


Coppell, TX 75019







(1)       Election of Directors;





(2)       Advisory vote on executive compensation (Say on Pay);





(3)       Ratification of Ernst & Young LLP as independent auditors;





(4)       Any other business that may properly come before the meeting.










Holders of our common stock and our Series A Convertible Preferred Stock at the close of business on March 16, 2021 are
entitled to vote at the annual meeting.







Please complete, sign, date and return your proxy card or submit your proxy by following the instructions contained in
this Proxy Statement and on your proxy card. Even if you plan on attending in person and voting, you are encouraged to submit your proxy to ensure your vote is counted if you are unable to attend. You may revoke your proxy and vote in person at
the annual meeting if you choose to do so.







If you plan to attend the meeting in person, please RSVP at

secretary@mrcooper.com

by 5:00 p.m. central time on
May 12, 2021.






































By order of the Board of Directors,









Elisabeth Gormley




Vice President, Associate General Counsel & Corporate Secretary












Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to Be Held on May 13, 2021: This Proxy Statement is available free of charge on the Investors
section of our website (

investors.mrcoopergroup.com

). In addition, you may access the Proxy Statement free of charge at

www.proxyvote.com

, a site that does not have “cookies” that identify visitors to the site.






























TABLE OF CONTENTS

































































































EXECUTIVE SUMMARY




1



2021 Annual Meeting Information


1


Matters to be Voted on at our 2021 Annual Meeting


1


Performance Highlights


2


Compensation Highlights


3


Corporate Governance Highlights


5


Director Nominees


7




2021 PROXY STATEMENT





9




CORPORATE GOVERNANCE




9




ENVIRONMENTAL, SOCIAL & GOVERNANCE (ESG)




15




BOARD OF DIRECTORS




18




PROPOSAL 1: ELECTION OF DIRECTORS




22




EXECUTIVE OFFICERS




28




COMPENSATION DISCUSSION AND ANALYSIS




30



Compensation Committee Report


42



HISTORICAL EXECUTIVE COMPENSATION INFORMATION




43



Summary Compensation Table


43


Grants of Plan Based Awards for 2020


44


Outstanding Equity Awards at Year End


45


Stock Vested for 2020


46


Potential Payments upon Termination or


Change of Control


47


Pay Ratio


49











































PROPOSAL 2: ADVISORY VOTE ON SAY ON PAY




50




AUDIT FUNCTION




52




Report of the Audit & Risk Committee




52




PROPOSAL 3: RATIFICATION OF APPOINTMENT OF


INDEPENDENT AUDITORS




53




CERTAIN RELATIONSHIPS AND RELATED-PARTY


TRANSACTIONS




55




BENEFICIAL OWNERSHIP




57




OTHER MATTERS




59




STOCKHOLDER PROPOSALS




59




GENERAL INFORMATION ABOUT THE ANNUAL


MEETING AND VOTING




60





























EXECUTIVE SUMMARY





This proxy statement and the accompanying materials are being made available to Mr. Cooper Group Inc. stockholders beginning on or about March 30, 2021. You should read the entire proxy
statement carefully before voting. For additional information about the 2021 Annual Meeting, please see “General Information About the Annual Meeting and Voting” at the end of the proxy statement. This executive summary highlights selected information
throughout this proxy statement.








2021 ANNUAL MEETING INFORMATION


























DATE AND TIME






PLACE






RECORD DATE






ADMISSION




9:00 a.m., central time


Thursday, May 13, 2021




Four Points by Sheraton –


Dallas Fort Worth Airport North





1580 Point West Blvd.


Coppell, TX 75019







March 16, 2021




Photo identification and proof of ownership as of the record date are
required to attend the meeting








MATTERS TO BE VOTED ON AT OUR 2021 ANNUAL MEETING






























Board


Recommendation




Proposal 1:



Election of Directors



FOR each director



Proposal 2:



Advisory Vote on Executive Compensation (Say on Pay)



FOR



Proposal 3:



Ratification of the Appointment of Ernst & Young LLP as our Independent Auditors for 2021



FOR












1














PERFORMANCE HIGHLIGHTS





Following the financial crisis in 2008, the servicing market shifted to non-banks as the government agencies and large banks recognized the importance of servicers with specialized
expertise. From a start of $21 billion Unpaid Principal Balance (UPB) in 2008, we’ve grown our portfolio to $626 billion, making us the leader among nonbank servicers and #3 servicer overall. In 2020, we reacted to the pandemic by moving over 95% of
our team members to work-from-home status within a matter of days. We demonstrated our commitment to our customers by helping approximately 364,000 homeowners go on forbearance. Our customer-oriented culture is transforming the experience for both team
members and customers, resulting in the highest team member satisfaction rates in our history including receipt of the Great Place to Work certification for the second consecutive year. Our innovative use of technology has driven our servicing costs
below peers, improved our customer experience, and allowed us to scale originations to record volumes and margins. Provided below are 2020 highlights.











COMPANY









Reported $307 million net income or $3.20 per diluted share







Generated an operating return on tangible common equity of 42.5%







Grew tangible book value to $26.27 per share, an increase of 17% from a year ago







Servicing portfolio UPB ended the year at $626 billion, roughly flat with the prior year







Achieved record funded volume of $63.2 billion, 57% higher than 2019







Achieved Great Place to Work certification for the second consecutive year







Redeemed $300 million in senior notes prior to maturity and refinanced $2.1 billion in senior notes, which significantly lowered funding costs and improved the company’s liquidity







Repurchased 2.6 million shares of common stock for $58 million
















SERVICING









Boarded approximately $219 billion loans, including $159 billion in subservicing







Helped 364,000 homeowners go on forbearance, and helped 186,000 customers resolve or exit forbearance, with many benefitting from the use of our innovative digital self-service tools
















ORIGINATIONS









Funded 235,184 loans totaling $63.2 billion







Produced record pretax income of $1.5 billion, 206% higher than 2019







Our direct-to-consumer channel funded $35 billion in new loans and achieved a refinance recapture rate of 33%, which was close to double the industry average







We expanded our Correspondent channel, funding $28 billion, and becoming a top 10 Correspondent lender
















XOME









Produced $433 million in revenues, which consisted of 51.1% third-party revenues







Sold 4,942 properties and completed 905,115 title orders and 2.3 million solutions orders















2














COMPENSATION HIGHLIGHTS





This past year was one of unprecedented challenges – a pandemic, an economic crisis and a call for social justice. It was also a year that provided significant economic opportunity for our
business.


























$307 Million






Net Income





($3.20 per diluted share)




42.5%






Operating Return on Tangible


Common Equity





+17%






Tangible Book Value



(to $26.27 per share)








We responded to the pandemic and navigated unprecedented market volatility, which is testament to our people, our culture of customer advocacy, and our scalable, digital and highly
efficient platform. We worked with customers impacted by the pandemic and helped 364,000 homeowners enter into forbearance plans, which are designed to keep them in their homes, and by year-end we helped 186,000 customers exit forbearance and resume
their monthly payments. We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism, which we participated in during 2020 and will continue to participate in 2021. We
recognize that as a company, we have an impact on the world in which we live and the people we interact with, and we want to ensure we are contributing to progress in diversity and inclusion.





Last year we made a commitment to you, our stockholders, to re-design our executive compensation program to more closely align pay with performance. In 2020, the re-designed compensation
program complements our strategy, the critical driver of stockholder value. Our strategy also forms the basis for a performance management system which includes how we define and measure success as well as the characteristics of the reward system – how
management shares in the wealth they create for investors. As such, we rely heavily on an annual cash-based incentive program tied to our annual financial and strategic objectives, and we rely on performance-based equity tied to Total Shareholder
Return (TSR) to align the interests of management and stockholders in growing the share price.






Corporate Objective and Executive Compensation





Our overall corporate objective is to deliver, at a minimum, a fair return to stockholders that is commensurate with the risk of our business. Our critical measure of success is TSR. Our
compensation program for senior executives aligns the interests of management and stockholders in growing the value of our company without taking undo risks. At the same time, we recognize the competitive market for executive talent. Therefore, our
compensation program is designed to balance three, at times competing, objectives – motivate and reward management for creating and executing a strategy that drives TSR, retains our talent and ensures that the cost of the program is reasonable.





Our approach is to provide our executives with a competitive compensation program that is commensurate with the market for executive talent in our sector, and the size and complexity of
our businesses. Our program consists of three components – salary, annual cash incentive and long-term equity. In combination, the three components should hold a significant portion of the total compensation opportunity at risk in that actual
compensation earned is tied to achieving annual financial and business objectives and stockholder returns over time.












3











Below are some highlights of our compensation program:























What We Do








What We Don’t Do










Align our executive pay with performance








Annual “say on pay” advisory vote








Set multiple challenging performance objectives








Stock ownership guidelines for executive officers and directors








Caps on director equity awards and fees








Independent compensation consultant engaged by the Compensation Committee








Annual review and approval of our compensation strategy








Significant portion of executive compensation at risk based on corporate performance and TSR








Double trigger equity acceleration default provision upon change of control








Minimum equity award vesting periods for time-based restricted stock units








Clawback of equity awards under specified circumstances










Tax gross-ups for change of control benefits








Permit short sales, hedging, or pledging of stock ownership positions








Strict benchmarking of compensation to a specific percentile of our peer group








Excessive perquisites















4














CORPORATE GOVERNANCE HIGHLIGHTS





We believe that good corporate governance promotes the long-term interests of our stockholders, strengthens our Board and management accountability and leads to better business
performance. We are committed to maintaining strong corporate governance practices and will continually evaluate these practices. Additionally, we value our stockholders’ continued interest and feedback and are committed to maintaining an active
dialogue to understand the priorities and concerns of our stockholders on a variety of topics, as well as to understand stockholders’ perspectives on our executive compensation program, our decision-making processes, our disclosure and recent trends
and events. This outreach program ensures that the Committee and Board consider the issues that matter most to our stockholders so we can address them effectively. Below are some highlights of our corporate governance practices:
















































































































Unclassified Board




Stockholder



Right to Call Special Meetings and Act by Written Consent of Majority






Majority
Independent Director Nominees




Year-Round Stockholder


Engagement Process






Independent
Lead Director




Board Risk Oversight






Majority
Voting for Directors


with Resignation Policy




Stock Ownership Guidelines


for Officers and Directors






Director
Attendance


at >75% Of Meetings




Executive Succession Planning Process






100% Board
Attendance at


2020 Annual Meeting




Anti-Hedging/Pledging Policy






Independent
Directors Meet without Management Present




Annual Review of Committee Charters


and Governance Guidelines






Annual
Say-on-Pay Vote




Annual Board and


Committee Evaluations






CEO Evaluation
Process




Demonstrated Board Refreshment






Board
Continuing Education Program




Office of Diversity and Inclusion






Code of
Conduct for Directors,


Officers and Employees




Appointed Diverse Directors


in 2019 and 2020












5












Key Areas of Board Oversight





Our Board is responsible for, and committed to, the oversight of the business and affairs of our company. In carrying out this responsibility, our Board advises our senior management to
help drive success for us and for long-term value creation for our stockholders. Our Board discusses and receives regular updates on a wide variety of matters affecting us. Our Board met 14 times in 2020.











Stockholder Engagement





We believe that effective corporate governance includes regular, active dialogue with analysts, investors in our equity and senior notes, and other market participants, and we take into
account their feedback on our executive compensation program as well as the Company’s strategy, financial results and disclosures, and industry and market trends. Stockholder dialogue is a year-round practice through our investor relations team. We are
working to further improve our engagement by increasing our participation in investor conferences and non-deal roadshows, revising selected disclosures to increase clarity, and improving the consistency and effectiveness of our communications.





During 2020, we had over 450 separate meetings and calls with equity investors and analysts, in addition to participation in earnings conference calls. Feedback that we received from
stockholders was taken into account in the re-design of our compensation program for 2020. The Compensation Committee believes the compensation program changes implemented in 2020 are directly responsive to feedback we heard from our stockholders and
reflect the right incentive structure for our business and for our stockholders. We are committed to maintaining an active dialogue with stockholders to understand stockholders’ perspectives on our executive compensation program, and we plan to
continue this dialogue. Stockholders are always welcome to communicate their views as described under “Communications with the Board” in this proxy statement.












6














DIRECTOR NOMINEES





Our director nominees are:
































































































































Name





Director Since





Committees
















Jay Bray



2018










Busy Burr



2019



Compensation






Robert Gidel



2018



Nominating & Corporate Governance (Chair)





Audit & Risk






Roy Guthrie



2018



Audit & Risk (Chair)






Michael Malone



2018



Audit & Risk





Compensation






Shveta Mujumdar



2019



Nominating & Corporate Governance






Tagar Olson



2015



Compensation (Chair)






Christopher Harrington



2017










Steven Scheiwe



2012



Audit & Risk





Nominating & Corporate Governance

















7












Our Directors’ Experience, Independence, Tenure and Diversity





The following charts set forth information regarding our director nominees, illustrating the high level of experience each brings to the Board, as well as the Board’s independence, tenure
and diversity in the aggregate:


















































































































































Senior Leadership



ü



ü



ü



ü




ü



ü



ü



ü



Financial Services Industry



ü



ü



ü



ü



ü



ü



ü



ü




Accounting and Finance



ü




ü



ü




ü




ü



ü



Risk Management



ü




ü



ü




ü





ü



Technology



ü



ü



ü






ü





Mergers and Acquisitions



ü



ü



ü



ü



ü



ü



ü



ü



ü



Public Company Board and Corporate Governance



ü




ü



ü



ü



ü




ü



ü



Government Relations, Regulatory or Legal



ü



ü



ü



ü



ü



ü




ü



ü



Compensation and Human Resources



ü




ü



ü




ü




ü



ü

















8














2021 PROXY STATEMENT





In this proxy statement, “Mr. Cooper Group,” “Company,” “we,” “us,” or “our” refers to Mr. Cooper Group Inc. or to it and one or more of its subsidiaries. This proxy statement contains
information on the matters to be presented at our 2021 Annual Meeting of Stockholders to be held on May 13, 2021, to assist you in voting your shares.








CORPORATE GOVERNANCE






Governing Documents





The following primary documents make up our corporate governance framework:















Corporate Governance Guidelines















Audit & Risk Committee Charter















Compensation Committee Charter















Nominating & Corporate Governance Committee Charter















Code of Business Conduct and Ethics















Code of Ethics for our CEO and Senior Financial Officers





These documents are accessible on our website at

www.mrcoopergroup.com

by clicking on “Corporate Governance” under the “Investor” tab. You may also obtain a free copy of any of
these documents by sending a written request to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. Any substantive amendment to or grant of a waiver from a provision of our codes of ethics
requiring disclosure under applicable Securities and Exchange Commission (SEC) or National Association of Securities Dealers Automatic Quotations (NASDAQ) rules will be posted on our website.












9














Corporate Governance Guidelines





This document sets forth the Company’s primary principles and policies regarding corporate governance. The Corporate Governance Guidelines are reviewed from time to time as deemed
appropriate by the Board. The matters covered by the Corporate Governance Guidelines include the following:
















































































































Board Leadership




Board and Committee Compensation






Size
of the Board




Board Self-Evaluation






Board



Membership Criteria




Strategic Direction of the Company






Other



Public Company Directorships




Board Access to Management






Independence



of Directors




Attendance of Management at Board
Meetings






Ethics



and Code of Conduct




Director Interaction with Outside
Constituencies






Conflicts



of Interest




Confidentiality






Director’s



Change of Job Responsibility




Board Orientation and Continuing
Education






Director



Retirement Age and Tenure




Director Attendance at Annual
Meetings of Stockholders






Director



Resignations




Succession Planning






Executive Sessions for Non-Management and Independent Directors







Leadership Development, including Evaluation of the Chief Executive Officer









Board Leadership Structure





We have a strong and active Board composed predominantly of independent directors who understand our business and who work closely with our Chairman, President & Chief Executive
Officer and other members of senior management. The Board has no fixed policy on whether to have an independent chairman. Currently, Jay Bray, our President & Chief Executive Officer, serves as Chairman of the Board. Our Board has determined that,
at this time, this current structure, with a combined Chairman & Chief Executive Officer role and an independent lead director, is in the best interests of the Company and its stockholders. The Board believes the combined role of Chairman of the
Board & Chief Executive Officer promotes unified leadership and execution of our strategic plan, facilitates information flow between management and the Board and enables Mr. Cooper Group to benefit from












10











Mr. Bray’s significant institutional and industry knowledge and experience. This combined role is both supplemented and enhanced by the effective oversight and independence of our Board
and the leadership provided by our independent lead director. As part of its regular refreshment process, in March 2021, our Board appointed Mike Malone to serve as independent lead director.





The independent lead director has broad responsibility and has authority to:















serve as chair during executive sessions of the Board;















call meetings of the independent directors when necessary;















preside at meetings of the Board when the Chairman is not present;















act as liaison between the Chairman, President & Chief Executive Officer and the Board;















manage intra-board relationships;















set meeting agendas; and















if requested by major stockholders, ensure that he is available for consultation and direct communication.





In general, our independent lead director serves as the liaison between our Chairman and our independent directors. He is available to consult with our Chairman about the concerns of the
Board and is available to consult with senior management regarding their concerns. Having an independent lead director fosters a Board culture of open discussion and deliberation, with a thoughtful evaluation of risk, to support sound decision-making.
It encourages communication among the directors, and between management and the Board, to facilitate productive working relationships. Working with our Chairman and other Board members, our independent lead director also ensures there is an appropriate
balance and focus among key Board responsibilities such as strategy development, review of operations, risk oversight and management succession planning. The Board believes it is important to maintain flexibility with the Board’s leadership structure.
The Board will continue to regularly review its leadership structure and exercise its discretion in recommending an appropriate and effective framework to assure effective governance and accountability, taking into consideration the needs of the Board
and the Company.






Board’s Role in Risk Oversight





Senior management has the responsibility to develop and implement our strategic plans and to identify, evaluate, manage, and mitigate the risks inherent in those plans. It is the
responsibility of the Board to understand and oversee our strategic plans, the associated risks, and the steps that our Chief Credit & Risk Officer and senior management are taking to manage and mitigate those risks. The Board takes an active
approach to its role in overseeing the development and execution of our business strategies as well as its risk oversight role. This approach is bolstered by the Board’s leadership and committee structure, which ensures proper consideration and
evaluation of potential enterprise risks by the full Board. In addition to receiving information from its committees, the Board also receives updates directly from Mr. Bray who due to his position as both Chairman of the Board and President & Chief
Executive Officer of the Company is particularly important in communicating with other members of management and keeping the Board updated on the important aspects of our operations. As part of its strategic risk management oversight, the full Board
conducts a number of reviews throughout the year to ensure that our strategy and risk management is appropriate and prudent, including:















A comprehensive annual review of our overall strategic plan with updates throughout the year.















Direct discussions with our Chairman, President and CEO in executive sessions held at our Board meetings about the state of the business.















Reviews of the strategic plans and results for our business segments, including the risks associated with these strategic plans, at Board meetings during the year.












11





















Reviews of other strategic focus areas for the Company, such as innovation, information, ESG initiatives and cybersecurity, and organizational management. The Board also
has overall responsibility for leadership succession for our most senior officers and reviews succession plans on an ongoing basis.















Annual review of the conclusions and recommendations generated by management’s enterprise risk management process. This process involves a cross-functional group of the
Company’s senior management and the Internal Audit team who identify on a continual basis current and future potential risks facing the Company on actions to appropriately manage and mitigate those potential risks. In conjunction with our
enterprise risk management process, management also analyzes emerging cybersecurity threats and data privacy laws, as well as our plans and strategies to address them.





The Board has delegated certain risk management oversight responsibilities to specific Board committees, each of which reports regularly to the full Board as follows:










Further, the Audit & Risk Committee has engaged certain third-party consultants to review and assess our compliance and risk management structure, programs and practices, including our
enterprise-wide compliance risk management system.






Independent Directors





We recognize the importance of having an independent Board that is accountable to Mr. Cooper Group and its stockholders. Accordingly, our Corporate Governance Guidelines provide that a
majority of our directors shall be independent in accordance with NASDAQ listing standards. Currently, nearly 90% of our Board is independent.






Board, Committee and Annual Meeting Attendance





The Board held 14 meetings during 2020. Each director attended at least 75% of the total number of meetings of the Board and committees held during the period he or she served. Directors
are invited and encouraged but are not required to attend our annual meeting of stockholders. In 2020, all of our directors attended our annual meeting of stockholders.






Presiding Non-Management Director and Executive Sessions





Our non-management and independent directors meet in executive session without management at least twice per year. Our independent lead director presides at each executive session.












12












Board and Committee Evaluations





Our Board is committed to continuous improvement and recognizes the importance of a robust evaluation process to enhance board performance and effectiveness. Our Nominating & Corporate
Governance Committee (the NCG Committee) oversees the annual performance evaluation of the Board and ensures that each of the Board’s committees conducts an annual self-evaluation. In general, covered areas include Board alignment, governance,
strategy, culture, composition, information, meetings and leadership. In 2020, the NCG Committee engaged a third-party provider to administer online assessment questionnaires for both the Board and its committees. After completing the questionnaire,
the Board and its committees received a full report with tailored analyses, summarized assessment results, including areas of concern for discussion, and highlights of effective practices and recommendations for ongoing development. The Board and its
committees met to discuss the results.





2020 Evaluations: A Multi-Step Process:



































NCG Committee reviews the design and format of the evaluation process









Ensures directors have opportunity to provide constructive feedback about board and director performance










Directors complete written questionnaire on various measures of the Board’s strengths, deficits, and areas of alignment














NCG Committee receives summarized director responses









NCG Committee receives tailored analysis and recommendations for ongoing development









Closed session discussion with the Board and its committees







Feedback informs changes to policies, practices and procedures, as appropriate









Results requiring further consideration are addressed at subsequent board or committee meetings









Communications with the Board





Any Mr. Cooper Group stockholder or other interested party who wishes to communicate with the Board or any of its members, including our independent lead director, may do so by writing to:
Board of Directors (or one or more named directors) c/o Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary. Relevant communications will be distributed to the Board, or to any individual director
or directors as appropriate, depending on the facts and circumstances outlined in the communication. Communications that are unrelated to the duties and responsibilities of the Board will not be forwarded, such as annual report requests, business
solicitations, advertisements and job inquiries. Any communication that is screened as described above will be made available to any director upon his or her request.






Communications with the Audit & Risk Committee






Complaints and concerns relating to our accounting, financial reporting, internal accounting controls or auditing
matters (together, Accounting Matters) should be communicated to the Audit & Risk Committee of the Board. Any such communications may be made on an anonymous basis. Employee concerns or complaints may be reported to the Audit &


Risk Committee through a third-party vendor, The Network, Inc., which has been retained by the Audit & Risk Committee for this purpose. The Network, Inc. may be contacted
toll-free at 866-919-3222 or via NAVEX Global’s website at

www.mrcooper.ethicspoint.com

. Outside parties, including stockholders, may bring issues regarding Accounting Matters to the attention of the Audit & Risk Committee by writing to:
Audit & Risk Committee c/o Executive Vice President & Chief Legal Officer, Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019.












13











All complaints and concerns will be reviewed under the direction of the Audit & Risk Committee and oversight by the Chief Legal Officer and other appropriate persons as determined by
the Audit & Risk Committee. The Chief Legal Officer reports to the Audit & Risk Committee on such communications.










Criteria and Procedures for Selection of Director Nominees and Board Diversity





Although the Board retains ultimate responsibility for nominating members for election to the Board, the NCG Committee conducts the initial screening and evaluation process. As provided in
our Corporate Governance Guidelines, director nominees, including those directors eligible to stand for re-election, are selected based upon requirements of applicable laws and NASDAQ listing standards and among other things, the following factors:

















Strength of


Character





Business


Experience


and Areas of


Expertise





Judgment





Composition


of the Board





Principles of


Diversity





Time


Availability


and


Dedication





Conflicts of


Interest






Although we do not have a formal policy on diversity, the NCG Committee appreciates the benefits that diversity, such as diversity of gender, race and national origin, education,
professional experience, and differences in viewpoints and skills, can bring to a board of directors and considers diversity in recruitment and nominations of directors.

In the past two years, the Board appointed
two female directors, representing 22% of our total Board members, who also have diverse backgrounds and experiences, which reflects the importance of diversity to the Board.





In conducting the screening and evaluation of potential director nominees, the NCG Committee considers candidates recommended by directors and our management, as well as recommendations
from our stockholders. To recommend a candidate for election to the Board, a stockholder must submit the information required by our Bylaws, including, among other things, the following information, to Mr. Cooper Group Inc., 8950 Cypress Waters
Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary, generally not less than 90 days nor more than 120 days in advance of the one-year anniversary of the date on which our proxy statement was released to stockholders in connection with the
previous year’s annual meeting of stockholders:















the name, age, business and residence address and the principal occupation and employment of the nominee;















a completed written questionnaire regarding the background and qualification of the nominee;















the nominee’s consent to being named in the proxy statement as a nominee and all information that would be required to be disclosed in a proxy statement or other filings
about the nominee;















a written representation and agreement regarding voting arrangements that have not been disclosed; compliance with applicable laws; intention to serve a full term if
elected and that the nominee will provide true, correct and non-misleading information in all material respects; and















a description of all monetary arrangements during the past three years and any other material relationships between the nominee and a stockholder.





In considering candidates recommended by stockholders, the NCG Committee will take into consideration the needs of the Board and the qualifications of the candidate. While a stockholder
may submit a director nominee pursuant to these criteria and procedures, the nomination would continue to remain subject to the rights of Kohlberg Kravis Roberts & Co. L.P. (KKR) as discussed below under the caption “Certain Relationships and
Related-Party Transactions—Our Relationship with KKR.”












14














ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)






Environmental Practice





We are committed to conducting operations and activities in a manner that provides and maintains safe and healthful working conditions, protects the environment and conserves natural
resources. We maintain practices so that our operations are managed and operated in compliance with applicable laws and regulations. As part of our green initiatives, we promote environment-friendly solutions within our buildings, including a recycling
program and a reduction in paper products. For example, we eliminated the availability of paper cups in our office buildings, converted lighting to more energy-efficient LED lights across approximately 360,000 square feet of our office buildings, and
our headquarters building was Energy Star Certified. Additionally, we regularly promote and encourage the use of technology for meetings and presentations as opposed to printing paper handouts. Last year, with the move of over 95% of our team to remote
work during the COVID-19 pandemic, we consolidated our office buildings by 305,700 total square feet, ultimately reducing the total energy use in our office buildings and greatly decreasing the amount of paper printing.





For our customers, we actively encourage electronic communications including campaigns tied to non-profit group donations as customers chose to go “paperless.” In 2020, we organized a
paperless campaign for customers and donated more than 750,000 meals to Feeding America. Our efforts to encourage digital communication have resulted in year-over-year increases in both customers who have a registered digital account with Mr. Cooper
(78%, up from 73% at the end of 2019) and customers who have signed up for paperless communications (45%, up from 40% at the end of 2019).






Social Responsibility





Social Responsibility plays an important role in our business as we aim to foster our company’s team culture, meet the evolving needs of our customers, and be good stewards of our
communities. As a company, we are grounded in a set of three intangible core values – being challengers of convention, champions for our customers and cheerleaders for our team.








For Our Team Members






We empower our more than 9,000 team members across the U.S. and India because we believe that a happy team leads to happy customers, and that is good for everyone. Our most
recent engagement survey, which led to our second Great Place to Work certification, shows how these intentional efforts are making a difference, with our overall Employee Engagement Index measuring 88% participation, and approximately 87% of team
members have said that Mr. Cooper Group is a great place to work.





Over the last few years, we transformed from the inside and cultivated a people-first culture, utilizing team member feedback to drive new initiatives and have focused on the following:















Talent Management: We invest in attracting, developing and retaining the best talent, and we know that focusing on holistic training, development and onboarding
experiences will continue to be key in our journey from better to best, so we operate an overarching Talent Management function, which combines our Training, Leadership Development and Talent Acquisition teams in one group. Over the past year,
we offered our employees approximately 437,000 hours of training across a broad range of categories, including leadership, inclusion, professional skills, and performance management.















Performance Management: To drive transparency in ratings and team member performance, our performance management process is based on a five-point scale, which simplifies
the review process and makes it easier for team members to evaluate themselves, while improving the process for managers in evaluating their teams. In the evaluation and goal setting processes, every team member has strategic goals that align
with the Company’s priorities. Additionally,












15











every team member is rated on our three core values, helping to ensure that all team members are striving to reflect our values every day through their work. Leaders are also
encouraged to have more frequent touchpoints to share feedback on performance and create an open dialogue on career goals.















Total Rewards: We are proud to offer team members competitive pay and a variety of benefits to attract and retain top talent. We abide by a pay for performance philosophy,
which is a model in which rewards are linked to a team member’s performance. Rewards are differentiated, which results in top performers receiving higher rewards, showing team members they are being compensated based on their individual
contributions. To ensure our compensation practices are fair and market competitive, we evaluate our pay ranges every year using data from several industry surveys. We are also committed to giving our team greater transparency and choice in the
benefits available to them. To provide more insight into the value of all benefits they receive, each team member has access to a personalized Total Rewards statement, which provides a simple, complete picture of a team member’s pay, medical
benefits, life insurance, retirement plan, tax-free spending accounts, family benefits, career development opportunities and more.















Attractive Benefits: We believe that our benefits help us to attract and retain top talent, including some of the following offerings – Healthcare Exchange, which provides
a choice of competitive insurance options; Team Member Mortgage Loan Program; Down Payment Assistance Program; Fertility and Adoption Benefits; and a Team Member Relief Fund, which is a company-funded program that provides cash grants to our
team members who may be experiencing catastrophic disasters or personal hardship.






Diversity and Inclusion Initiatives





Our success as a business is directly tied to our ongoing efforts to attract and retain diverse talent and maintain an inclusive and progressive environment where each team member can
thrive. To formalize our values of embracing and leveraging diversity, we established our internal Office of Diversity and Inclusion to serve as a driver and a resource for our team members. Since its inception, the Office of Diversity and Inclusion
has spearheaded numerous programs including the formation of nearly 20 Resource Teams comprised of team members who have similar interests and backgrounds. These teams are core to our culture and serve as a resource for their members and the Company by
fostering a diverse and inclusive workplace aligned with our mission, values, goals, business practices and objectives. In 2020, the Office of Diversity and Inclusion and the Resource Teams facilitated more than 500 team member events and trainings. In
addition, beginning in 2020, all people leaders and individual contributors in an equivalent leadership role have a diversity and inclusion performance action for each quarter included in their performance goals.





We know our work in Diversity and Inclusion is a journey, and in our ongoing commitment to advancing diversity and inclusion, we focus our efforts in four key areas:















Transparent Communications: By committing to open and accessible communications through information sharing and feedback, we believe we can cultivate an inclusive environment.















Inclusive Processes: To ensure our processes are equitable and impartial for every team member, we continuously review and enhance them.















Increased Opportunities: Through inclusive hiring practices and expanded development offerings, we create increased opportunities for potential and current team members.















Social Justice Activism: We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism. We recognize that as a company, we have an
impact on the world in which we live and the people we interact with, and we want to ensure we are contributing to progress in diversity and inclusion. In 2020, we contributed more than $350,000 to social justice organizations.












16












In Our Communities





Alongside government and non-profit housing organizations, in 2020, we regularly partnered with local communities to virtually connect with homeowners to assist with their housing
questions and provide helpful resources. Through these partnerships, we were able to help customers with more than 1,400 loans and apply over $11 million in funds to accounts in need. We also encourage team members to volunteer their time and efforts
to support their local communities through company initiatives.





As a company, we are a premier sponsor of local United Way and Habitat for Humanity events, earning the United Way Volunteer of the Year award in Dallas-Fort Worth in 2019. We also
encourage team members to volunteer with the non-profit organization of their choice by giving all team members paid time off each year for volunteer activities. Though over 95% of our team members worked remotely in 2020, due to the COVID-19 pandemic,
we came together to participate in nearly 20 virtual volunteer events.





As the largest non-bank servicer, we are committed to working alongside other industry leaders to ensure we keep the dream of homeownership alive. We have played a key leadership role in
the COVID-19 housing crisis. We strongly support the forbearance program included in the CARES Act, which has made it possible for servicers like us to continue to keep millions of people in their homes. Since the CARES Act was first signed, we’ve
helped approximately 364,000 homeowners go on forbearance, and we’ve helped 186,000 of them resolve and exit forbearance.





Additionally, at the request of the industry, we played a significant leadership role in the creation of a national consumer awareness campaign designed to reach homeowners who have missed
one or more mortgage payments as a result of the COVID-19 pandemic and may be eligible for forbearance assistance under the CARES Act. We led the discussion, and our brand marketing team created the campaign materials now being used by mortgage
companies, the Consumer Finance and Protection Bureau and organizations across the industry.





We operate two locations in India, and those teams have worked to advance local CSR initiatives helping to further broaden our impact. The team coordinates regular volunteer efforts,
giving campaigns and partners with the city of Chennai to help develop critical government technologies. In response to the COVID-19 pandemic, we partnered with the Greater Chennai Corporation (GCC) to support the technology needs required to create a
positive impact on the community, by designing and developing the Corona Monitoring app. The Corona Monitoring app helps the GCC monitor the COVID-19 situation in the city, allowing government officials to complete contact tracing, monitor for
outbreaks and ensure the health of their community through social distancing efforts.












17














BOARD OF DIRECTORS





Our Amended and Restated Certificate of Incorporation provides that the Board consist of not more than 11 directors, or such greater number as may be determined by the Board. As of the
date of this proxy statement, the Board consists of nine members who are elected each year at the Annual Meeting of Stockholders to hold office until the next annual meeting. Our current Board is as follows:



























Jay Bray



Michael Malone



Busy Burr



Shveta Mujumdar



Robert Gidel



Tagar Olson



Roy Guthrie



Steven Scheiwe



Christopher Harrington






The Board has determined that each of the directors, other than Mr. Bray, satisfies our independence standards and further that each of them is independent of us and our management within
the meaning of NASDAQ’s listing standards.





Our Amended and Restated Certificate of Incorporation does not provide for cumulative voting in the election of directors, and our Bylaws provide that directors are elected by a majority
of the votes present in person or by proxy entitled to vote.






Committees of the Board





The Board currently has three principal standing committees – Audit & Risk, Compensation and NCG. The Board, upon recommendation from the NCG Committee, reviews committee assignments
and determines whether rotation of committee members and committee chairs is appropriate to introduce fresh perspectives and to broaden and diversify the views and experiences represented on the committees. In March 2021, the Board rotated the
membership of the Compensation and NCG Committees as reflected below. The Board has determined that each member of these committees is “independent,” as defined under NASDAQ’s listing standards and for the purpose of the committees upon which such
directors serve.










Nominating & Corporate Governance Committee



Rob Gidel, Chair





The current members of the NCG Committee are Rob Gidel, Shveta Mujumdar and Steve Scheiwe. Each member of our NCG Committee is independent, as defined under NASDAQ’s listing
standards. The NCG Committee met twice in 2020.





The NCG Committee’s purpose is to:









assist the Board in identifying individuals qualified to serve as members of the Board and its committees;









develop and recommend to the Board a set of corporate governance guidelines for the Company;









oversee the evaluation of the Board and its committees;









review, approve or ratify related-party transactions and other matters which may pose conflicts of interest; and









otherwise taking a leadership role in shaping our corporate governance.





A copy of the NCG Committee Charter is available on our website. For more information about the process for identifying and evaluating nominees for director, see the “Corporate
Governance – Criteria and Procedures for Selection of Director Nominees” section above.

















18
























Audit & Risk Committee



Roy Guthrie, Chair





The current members of the Audit & Risk Committee are Roy Guthrie, Rob Gidel, Mike Malone and Steve Scheiwe. The Board has determined that (a) each is “independent”; (b) each
is financially literate; and (c) Mr. Guthrie is an “audit committee financial expert,” as these terms are defined by the Securities Exchange Act of 1934 (the Exchange Act) and NASDAQ. The Audit & Risk Committee met five times in 2020.





The Audit & Risk Committee’s purpose is to assist the Board in its oversight of:









our accounting and financial reporting processes and the audits of our financial statements;









the qualifications, independence and performance of our independent registered public accounting firm;









our internal audit function, and the performance of our internal accounting and financial controls;









risk management, including information security and cyber risks; and









our compliance with legal, ethics and regulatory requirements.





A copy of the Audit & Risk Committee’s Charter is available on our website.







Compensation Committee



Tagar Olson, Chair





The current members of the Compensation Committee are Tagar Olson, Busy Burr and Mike Malone. Each member of our Compensation Committee is independent, as defined under NASDAQ’s
listing standards. All directors are also “non-employee” directors as defined in Rule 16b-3(b)(3) under the Exchange Act. The Compensation Committee met six times in 2020.





The Compensation Committee’s purpose is to:









discharge the Board’s responsibilities relating to the compensation of our Chairman, President & Chief Executive Officer and other executive officers;









oversee our compensation policies and programs for our executive officers and directors of the Board;









review and discuss with management our compensation discussion and analysis to be included in our annual proxy statement and annual report filed with the SEC;









develop a succession plan for our executive officers; and









prepare the Compensation Committee Report as required by the rules of the SEC.





A copy of the Compensation Committee Charter is available on our website. For additional information regarding the Compensation Committee’s processes and procedures for
consideration of director compensation and executive compensation see “Director Compensation” and “Compensation Discussion and Analysis,” respectively.









Incentive Awards Committee





The Compensation Committee has delegated to the Incentive Awards Committee, which consists of Jay Bray, our Chairman, President & Chief Executive Officer, the authority to make certain
awards under our incentive compensation plan to our employees who are not executive officers.












19












Compensation Advisor





The Compensation Committee has the authority, in its sole discretion, to retain and terminate compensation advisors, including approval of the terms and fees of any such arrangement. The
Compensation Committee retained Gressle & McGinley LLC (Gressle & McGinley) to serve as the Compensation Committee’s independent compensation advisor. Gressle & McGinley does not provide other services to Mr. Cooper Group. Additionally,
based on (a) standards promulgated by the SEC and NASDAQ to assess compensation advisor independence, which are identified in the Compensation Committee’s Charter and (b) the analysis conducted by Gressle & McGinley in its independence review, the
Compensation Committee concluded that Gressle & McGinley is an independent advisor to Mr. Cooper Group and that the work performed by Gressle & McGinley did not raise any conflicts of interest. For more information on the compensation advisor,
see “Role of Compensation Advisor” in the Compensation Discussion and Analysis section of this proxy statement.






Compensation Committee Interlocks and Insider Participation





There is not, nor was there during 2020, any compensation committee interlock or insider participation on the Compensation Committee.






Director Compensation





The Compensation Committee reviews and recommends to our Board the form and level of director compensation and seeks outside advice from its compensation advisor on market practices when
changes are contemplated. The independent director fees are payable in semi-annual installments in arrears, based on the following annual fees:




























Cash


Retainer





Lead


Director





Audit & Risk


Committee


Chair





Compensation


Committee


Chair





NCG


Committee


Chair





Audit & Risk


Committee


Member





Compensation


Committee


Member





NCG


Committee


Member




$125,000



$85,000



$85,000



$60,000



$45,000



$35,000



$25,000



$20,000





On May 17, 2018, Messrs. Gidel, Guthrie and Malone were granted restricted stock units from Nationstar with a fair market value of $330,000. Upon the merger with Nationstar in July 2018
(the Merger), these awards were converted to restricted stock unit awards for Mr. Cooper Group common stock that continued to vest on each of the first three anniversaries of the grant of the award. This award covered equity award grants for 2018, 2019
and 2020. In May 2020,


each of Messrs. Gidel, Guthrie and Malone received an equity award to match the number of shares received by the independent directors who received annual awards. All of our independent directors,
except for Mr. Harrington, will receive a grant of $110,000 of restricted stock units on the date of our 2021 annual stockholders meeting, which vest the earlier of (a) the first anniversary of the grant date or (b) the date of our 2022 annual
stockholders meeting following the grant date.





The independent directors have the option to defer the date that some or all vested restricted stock units are converted into shares of common stock and delivered to the director. Our 2019
Omnibus Incentive Plan places an aggregate yearly limit of $750,000 for the value of awards that can be granted together with cash fees paid to our non-employee directors.












20












The following table sets forth certain information regarding the compensation paid in 2020 to our independent directors. Mr. Harrington, as a member of KKR,
does not receive any compensation for his services on our Board:


































































































Name








Fees earned or paid


in cash ($)

(1)









Stock Awards




($)

(2)









Total ($)
























Busy Burr


132,158


110,000


242,158

Robert H. Gidel


240,000


47,991


287,991

Roy A. Guthrie


320,000


47,991


367,991

Christopher J. Harrington










Michael D. Malone


230,000


47,991


277,991

Shveta Mujumdar


44,740


128,500


173,240

Tagar C. Olson


75,000





75,000

Steven D. Scheiwe


180,000


110,000


290,000





















(1)




Represents fees actually paid in 2020.














(2)




Represents the aggregate grant date fair value, as computed in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Compensation—Stock Compensation
excluding the effect of estimated forfeitures during the applicable vesting periods of (a) restricted stock units granted to each of Ms. Burr, Ms. Mujumdar and Mr. Scheiwe and (b) an equity award received by Messrs. Gidel, Guthrie and Malone to
match the number of shares received by the independent directors who received annual awards. The aggregate number of stock awards outstanding at December 31, 2020 for our directors can be found in the “Security Ownership of Certain Beneficial
Owners and Management” section below.





Fees to independent directors may be made by issuance of Mr. Cooper Group common stock, based on the value of common stock at the date of grant, rather than in cash, provided that any such
issuance does not prevent a director from being independent and the shares are granted pursuant to a stockholder approved plan. Directors who are also our employees receive no additional compensation for their services on the Board. All members of the
Board are reimbursed for reasonable costs and expenses related to attending Board or committee meetings or other meetings with management and for expenses related to director education programs.






Director Stock Ownership Guidelines





Our stock ownership guidelines provide that non-employee directors are expected to accumulate, within five years of their election to the Board, shares of Mr. Cooper Group stock equal in
value to at least five times the amount of their annual cash retainer. Shares counted toward these guidelines include any shares held by the director directly or indirectly, including deferred vested awards, and unvested restricted stock units. Our
Board established this particular level of stock ownership for our non-employee directors to have the interests of our non-employee directors to be aligned with the investment interests of our stockholders.












21














PROPOSAL 1: ELECTION OF DIRECTORS





Our stockholders will be asked to consider nine nominees for election to our Board to serve for a one-year term until the next annual meeting of stockholders and until their successors
have been duly elected and qualified, subject to their earlier death, resignation or removal.





The names of the nominees for director and biographical information follow. All of the nominees, with the exception of Mr. Bray, have been determined by the Board to be independent under
NASDAQ listing standards. Our NCG Committee has reviewed the qualifications of each of the nominees and has recommended to the Board that each nominee be submitted to a vote at the 2021 Annual Meeting.





In determining whether to nominate our directors for another term, the Board considered the factors discussed above under “Corporate Governance – Criteria and Procedures for Selection of
Director Nominees” as well as each director’s qualifications as discussed below and concluded that each of the directors possess those talents, backgrounds, perspectives, attributes and skills that will enable him or her to continue to provide valuable
insights to our management and play an important role in helping us achieve our goals and objectives. The age, principal occupation and certain other information for our director nominees are set forth below. It is our general policy that no director
having obtained the age of 70 years will stand for re-election.





Directors are elected by a majority of the votes present in person or by proxy entitled to vote, meaning that each director nominee must receive more votes cast “for” than “against” his or
her election. If an incumbent director does not receive more votes cast “for” than “against” his or her election, then the director must tender his or her resignation to the Board. In that situation, the NCG Committee would make a recommendation to the
Board about whether to accept or reject the resignation, or whether to take other action. Within 90 days from the date the election results are certified, the Board would act on the NCG Committee’s recommendation and publicly disclose its decision and
rationale behind it.





The Board believes that the each of the director nominees will be able to stand for election.






THE BOARD RECOMMENDS A VOTE FOR THE NOMINEES NAMED BELOW.












22






















Jay Bray





BACKGROUND




Age 54





Director Since 2018 (Chair)





Committees



None








Mr. Bray has served as the Company’s Chairman of the Board, President & Chief Executive Officer since the Merger in July 2018. Mr. Bray has also served as a director of
Nationstar since 2012. He has also served as Nationstar’s President since June 2015 and as Chief Executive Officer since February 2012, prior to which he served as Nationstar’s Executive Vice President & Chief Financial Officer from May
2011 to February 2012. In addition, he has served as the President of Nationstar’s wholly-owned subsidiary, Nationstar Mortgage LLC, since July 2011, as the Chief Executive Officer of Nationstar Mortgage LLC since October 2011, as the Chief
Financial Officer of Nationstar Mortgage LLC from the time he joined Nationstar in May 2000 until September 2012, as a Manager of Nationstar Mortgage LLC since October 2011, as the Executive Chairman of Xome Holdings LLC since September 2015.
Mr. Bray has more than 30 years of experience in the mortgage servicing and originations industry. From 1988 to 1994, he worked with Arthur Andersen in Atlanta, Georgia, where he served as an audit manager from 1992 to 1994. From 1994 to 2000,
Mr. Bray held a variety of leadership roles at Bank of America and predecessor entities, where he managed the Asset Backed Securitization process for mortgage-related products, developed and implemented a secondary execution strategy and
profitability plan and managed investment banking relationships, secondary marketing operations and investor relations. Additionally, Mr. Bray led the portfolio acquisition, pricing and modeling group at Bank of America.






QUALIFICATIONS





Mr. Bray played a critical role in leading the servicing market shift to non-banks following the financial crisis and led the growth of our portfolio from a start of $21 billion
UPB in 2008 to $626 billion today, making us the largest nonbank servicer. Mr. Bray’s in-depth experience and understanding of financial services and Mr. Cooper’s business and operations qualify him to serve as a Mr. Cooper Group director.















23

































Busy Burr





BACKGROUND




Age 59





Independent Director Since 2019





Committees



Compensation








Ms. Burr has been President & Chief Commercial Officer of Carrot, Inc., a venture-backed digital health company, since November 2019. Prior to which Ms. Burr was at Humana,
Inc., a for-profit health insurance company, from March 2015 to September 2018, where she served as the Chief Innovation Officer and Vice President of Healthcare Trend. Prior that that, she was Managing Director of Citi Ventures and Global Head
of Business Incubation of Citigroup, Inc. from January 2011 to January 2015. Ms. Burr also served as an Entrepreneur-in-Residence at eBay, Inc. from January 2010 to January 2011. Prior to joining eBay, she co-founded and served as Chief
Executive Officer of Lucy & Lily (Alterdot) from March 2004 to June 2009. Ms. Burr has held various senior-leadership roles at Credit Suisse Group AG (formerly Credit Suisse First Boston), Homestead Technologies Inc. and Gap Inc., and was
an investment banker for Morgan Stanley. She has served on the Board of Directors of Satellite Healthcare Inc., a not-for-profit provider of kidney dialysis and related services, since December 2018 and has previously served as a board observer
for three healthcare companies, Omada Health, Inc. Aspire Health, Inc. and Livongo Health, Inc.






QUALIFICATIONS





Ms. Burr’s experience in innovation, marketing, product development and technology, including customer-centric platforms and the financial services industry qualify her to serve as
a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



Rite Aid Corporation





Past Five Years



None





























Robert Gidel





BACKGROUND





Age
69







Independent Director Since 2018





Committees



Audit & Risk


NCG (Chair)








Mr. Gidel served as an independent director of Nationstar from 2012 until the Merger in July 2018. Mr. Gidel has been a principal in Liberty Partners, LLC, a company that invests
in both private and publicly-traded real estate and finance focused operating companies, since 1998. Mr. Gidel has served on multiple private and publicly-held companies’ boards of directors, including American Industrial Properties, Brazos
Asset Management, certain registered investment companies of Fortress Investment Group, Global Signal Inc., LNR Property Holdings, Lone Star Funds, Meridian Point Realty Trust VIII, Paragon Group, Inc. and US Restaurant Properties.






QUALIFICATIONS



Mr. Gidel is a National Association of Corporate Directors Board Leadership Fellow, and his extensive experience in real estate finance and private equity, as well as wide-ranging
prior experience as a director qualify him to serve as a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



None





Past Five Years



Nationstar



DDR Corp. (now known as SITE Centers Corp.)
















24

































Roy Guthrie





BACKGROUND




Age 67





Independent Director Since 2018





Committees



Audit & Risk (Chair)








Mr. Guthrie served as an independent director of Nationstar from 2012 until the Merger in July 2018 and was its independent lead director from 2017 until the Merger. Mr. Guthrie
has been the Chairman of the Executive Committee of Renovate America, Inc. (a privately-held corporation), which provides an energy efficiency and renewable energy home improvement financing platform, since September 2018, and served as Chief
Executive Officer from October 2017 to September 2018. Prior to this Mr. Guthrie was the Executive Vice President of Discover Financial Services, a direct banking and payment services company, from 2005 to 2012; he previously served as Chief
Financial Officer from 2005 to 2011 and as Treasurer from 2009 to 2010. Mr. Guthrie was President & Chief Executive Officer of CitiFinancial International, LTD, a consumer finance business of Citigroup Inc., from 2000 to 2004, serving on
Citigroup’s Management Committee throughout this period. Mr. Guthrie was also Chief Financial Officer of Associates First Capital Corporation from 1996 to 2000, while it was a public company, and he served as a member of its board of directors
from 1998 to 2000.








QUALIFICATIONS



Mr. Guthrie’s valuable expertise in financial services as well as extensive experience as an executive officer and director of public companies qualify him to serve as a Mr. Cooper
Group director.






OTHER PUBLIC COMPANY BOARDS







Current



Cascade Acquisition Corp.


OneMain Holdings, Inc.


Synchrony Financial





Past Five Years



Nationstar


Garrison Capital, Inc.


Lifelock, Inc.





























Christopher Harrington





BACKGROUND




Age 39





Independent Director Since 2017





Committees



None








Mr. Harrington has served as a director since June 2017 and is a Member of KKR, a global asset manager working in private equity and fixed income. He joined KKR in 2008 and leads
the firm’s financial services industry team within the Americas Private Equity platform. Mr. Harrington has been involved with KKR’s investments in multiple companies, including Mr. Cooper Group. Mr. Harrington currently serves on the boards of
directors of several public and privately-held companies. Previously, Mr. Harrington was with Merrill Lynch & Co. in New York, where he was involved in a variety of acquisitions, divestitures, and other corporate advisory transactions.








QUALIFICATIONS



Mr. Harrington’s extensive experience in corporate financings, mergers, acquisitions, investments and strategic transactions qualify him to serve as a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



Focus Financial Partners Inc.





Past Five Years



None
















25































Michael Malone





BACKGROUND




Age 67





Independent Director Since 2018


(Independent Lead Director)





Committees



Audit & Risk


Compensation








Mr. Malone served as an independent director of Nationstar from 2012 until the Merger in July 2018. Mr. Malone is the former Managing Director of Fortress Investment Group LLC, a
global investment management group, a position he held from February 2008 until February 2012, where he led the Charlotte, North Carolina office and was responsible for the business of the capital formation group in the southeast and southwest
regions of the United States. Mr. Malone retired from Bank of America in November 2007, after nearly 24 years of service as Senior Executive Banker and Managing Director. Over those years Mr. Malone worked in and ran a number of investment
banking businesses for the bank and its subsidiary, Banc of America Securities LLC, including real estate, gaming, lodging, leisure and the financial sponsors businesses.








QUALIFICATIONS



Mr. Malone’s extensive experience in financial services and real estate and service on other public companies’ boards qualify him to serve as a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



New Senior Investment Group


Walker & Dunlop, Inc.





Past Five Years



Nationstar





























Shveta Mujumdar





BACKGROUND




Age 42





Independent Director Since 2020





Committees



NCG








Ms. Mujumdar has served as Vice President, Corporate Development for Intuit, Inc., a business and financial software company, since September 2016. Prior to which she served as the
Vice President, Corporate Development for Lynda.com from February 2013 until its acquisition by LinkedIn in May 2015, after which she continued as a consultant for LinkedIn until August 2015. Ms. Mujumdar has held various senior-leadership
roles at QuinStreet, LiveNation/Ticketmaster, Goldman Sachs Group and Deloitte.








QUALIFICATIONS



Ms. Mujumdar’s experience in strategy, corporate development and data and technology qualify her to serve as a Mr. Cooper Group director.


























26































Tagar Olson





BACKGROUND




Age 43





Independent Director Since 2015





Committees



Compensation (Chair)








Mr. Olson has served as a director since May 2015 and was most recently a Member of KKR. He joined KKR in 2002 and prior to his departure in December 2019, served as head of KKR’s
financial services and hospitality and leisure industry teams. He served as a member of the Investment Committee and Portfolio Management Committees within the KKR America’s Private Equity platform and also served as a member of KKR’s Global
Investment, Markets and Distribution Committee. Mr. Olson played a significant role in many of KKR’s other investments in the financial services sector. Mr. Olson currently serves on the boards of directors of a number of privately-held
companies. Prior to joining KKR, Mr. Olson was with Evercore Partners Inc. He is also a member of the Board of Overseers at NYU Langone Medical Center.








QUALIFICATIONS



Mr. Olson’s extensive experience in corporate financings, mergers, acquisitions, investments and strategic transactions, his relationships in the investment banking and private
equity industries and his experience in identifying potential merger and acquisition candidates qualify him to serve as a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



None





Past Five Years



First Data Corporation (now known as Fiserv  Inc.)





























Steven Scheiwe





BACKGROUND




Age 60





Independent Director Since 2012





Committees



Audit & Risk


NCG









Mr. Scheiwe has been President of Ontrac Advisors, Inc., a privately-held company which offers analysis and management services to private equity groups, privately held companies
and funds managing distressed corporate debt issues, since 2001. Mr. Scheiwe has also served on the boards of directors of several public and privately-held companies in the last ten years.








QUALIFICATIONS



Mr. Scheiwe’s high level of financial literacy, broad experience serving as a board member of public and private companies, his experience in mergers, acquisitions and financing,
his legal acumen and his experience serving on audit committees qualify him to serve as a Mr. Cooper Group director.






OTHER PUBLIC COMPANY BOARDS







Current



None





Past Five Years



Alimco Financial Corporation


Hancock Fabrics, Inc.


Verso Corporation
















27
















EXECUTIVE OFFICERS





The following summarizes the business experience of our executive officers other than Mr. Bray:
















Eldridge




Burns




BACKGROUND



Age 52





Executive Vice President &


Chief Legal Officer








Mr. Burns has served as the Company’s Executive Vice President & Chief Legal Officer since August 2020. Prior to joining the Company, he served as General Counsel of Topgolf International, Inc. from 2016 to August
2020. Previously, Mr. Burns served as Chief Legal Officer & General Counsel of Santander Consumer USA Inc. for more than ten years and as Vice President & Senior Corporate Counsel for Blockbuster, Inc. for nine years. Prior to joining
Blockbuster, Mr. Burns was an associate at Vinson & Elkins LLP.






INDUSTRY EXPERIENCE





Mr. Burns has more than 25 years in the legal field and has extensive experience in financial services, regulatory compliance, capital markets as well as mergers and acquisitions



















Anthony




Ebers




BACKGROUND



Age 55





Executive Vice President &


Chief Operating Officer








Mr. Ebers has served as the Company’s Executive Vice President & Chief Operating Officer since July 31, 2018. He has held the same position at Nationstar and Nationstar Mortgage LLC since April 2018, prior to which he
served as Nationstar’s and Nationstar Mortgage LLC’s Executive Vice President, Originations from July 2015 to April 2018. Prior to joining the Company, Mr. Ebers served as the Division President, Originations for ServiceLink, a Black Knight
company and national provider of transaction services to the mortgage and finance industries, from April 2015 to July 2015. From March 2009 to April 2015 Mr. Ebers held various leadership roles at OneWest Bank, most recently serving as EVP,
Head of Mortgage Lending and Servicing. Prior to OneWest Bank, Mr. Ebers held various executive leadership roles at IndyMac Bancorp Inc.






INDUSTRY EXPERIENCE





Mr. Ebers has held key leadership positions in mortgage lending, servicing and real estate transaction related services for more than 25 years. Additionally, throughout his career, Mr. Ebers has been a member of the
Mortgage Bankers Association (MBA) Servicing Committee and served on multiple industry advisory boards.















28






















Christopher




Marshall




BACKGROUND



Age 61





Vice Chairman &


Chief Financial Officer








Mr. Marshall has served as the Company’s Vice Chairman since January 2019 and as Chief Financial Officer since March 11, 2019. Prior to joining the Company, he served as Executive Chairman at Tax Guard Inc., which is the
leading provider of federal tax payment data to banks and specialty lenders, prior to which he served as Co-Founder and Executive Vice President & Chief Financial Officer at Capital Bank Financial Corp. from October 2009 until its
acquisition by First Horizon National Capital Corporation in December 2017. Previously, Mr. Marshall served as Chief Restructuring Officer of GMAC, Inc., now Ally Financial, Inc., from May 2009 to October 2009; as an advisor to The Blackstone
Group, L.P. from July 2008 to March 2009; and as Executive Vice President & Chief Financial Officer of Fifth Third Bancorp from 2006 to 2008. Prior to joining Fifth Third Bancorp, Mr. Marshall held several senior executive roles at Bank of
America Corporation, including serving as Chief Financial Officer and Chief Operating Officer of the Global Consumer and Small Business Bank and was a member of that firm’s management operating committee. He also served in various
senior-leadership roles at Honeywell International Inc., AlliedSignal Technical Services Corporation and TRW, Inc.






INDUSTRY EXPERIENCE





Mr. Marshall has held key leadership positions in the banking and finance industry for the past 20 years.























Michael



Rawls




BACKGROUND



Age 51





Chief Executive Officer – Xome








Mr. Rawls has served as Chief Executive Officer of the Company’s indirect wholly-owned subsidiary Xome Holdings LLC since January 2020. He served as the Company’s Executive Vice President, Servicing from July 2018 to
January 2020, and held the same position at Nationstar and Nationstar’s wholly-owned subsidiary, Nationstar Mortgage LLC from June 2015 to January 2020. Prior to such time he served as the President of Champion Mortgage from 2014 to June 2015;
as Nationstar’s Executive Vice President, Default from 2013 to 2014; as Nationstar’s Senior Vice President, Loss Mitigation from 2008 to 2013; and has held other key positions since joining Nationstar in 2000.






INDUSTRY EXPERIENCE





Mr. Rawls has over 20 years of expertise in mortgage operations, with a concentration in loss mitigation, foreclosure, bankruptcy and real estate owned portfolios.















29
















COMPENSATION DISCUSSION AND ANALYSIS





This past year was one of unprecedented challenges – a pandemic, an economic crisis and a call for social justice. It was also a year that provided significant economic opportunity for our
business.


























$307 Million






Net Income





($3.20 per diluted share)




42.5%






Operating Return on Tangible


Common Equity





+17%






Tangible Book Value



(to $26.27 per share)








We responded to the pandemic and navigated unprecedented market volatility, which is a testament to our people, our culture of customer advocacy, and our scalable, digital and highly
efficient platform. We worked with customers impacted by the pandemic and helped 364,000 homeowners enter into forbearance plans, which are designed to keep them in their homes, and by year-end we helped 186,000 customers exit forbearance and resume
their monthly payments. We have an obligation to make a positive impact in our communities and focus on social justice activism through community giving and volunteerism, which we participated in during 2020 and will continue to participate in 2021. We
recognize that as a company, we have an impact on the world in which we live and the people we interact with, and we want to ensure we are contributing to progress in diversity and inclusion.





Last year we made a commitment to you, our stockholders, to re-design our executive compensation program to more closely align pay with performance. In 2020, the re-designed compensation
program complements our strategy, the critical driver of stockholder value. Our strategy also forms the basis for a performance management system which includes how we define and measure success as well as the characteristics of the reward system – how
management shares in the wealth they create for investors. As such, we rely heavily on an annual cash-based incentive program tied to our annual financial and strategic objectives, and we rely on performance-based equity tied to TSR to align the
interests of management and stockholders in growing the share price.






Corporate Objective and Executive Compensation





Our overall corporate objective is to deliver, at a minimum, a fair return to stockholders that is commensurate with the risk of our business. Our critical measure of success is TSR. Our
compensation program for senior executives aligns the interests of management and stockholders in growing the value of our company without taking undo risks. At the same time, we recognize the competitive market for executive talent. Therefore, our
compensation program is designed to balance three, at times competing, objectives – motivate and reward management for creating and executing a strategy that drives TSR, retains our talent and ensures that the cost of the program is reasonable.





Our approach is to provide our executives with a competitive compensation program that is commensurate with the market for executive talent in our sector, and the size and complexity of
our businesses. Our program consists of three components – salary, annual cash incentive and long-term equity. In combination, the three components should hold a significant portion of the total compensation opportunity at risk in that actual
compensation earned is tied to achieving annual financial and business objectives and stockholder returns over time.












30











Below are some highlights of our compensation program:




























What We Do






What We Don’t Do
















Align our executive pay with performance








Annual “say on pay” advisory vote








Set multiple challenging performance objectives








Stock ownership guidelines for executive officers and directors








Caps on director equity awards and fees








Independent compensation consultant engaged by the Compensation Committee








Annual review and approval of our compensation strategy








Significant portion of executive compensation at risk based on corporate performance and TSR








Double trigger equity acceleration default provision upon change of control








Minimum equity award vesting periods for time-based restricted stock units








Clawback of equity awards under specified circumstances










Tax gross-ups for change of control benefits








Permit short sales, hedging, or pledging of stock ownership positions








Strict benchmarking of compensation to a specific percentile of our peer group








Excessive perquisites












Overview of the 2020 Executive Compensation Program for our CEO, CFO and COO





The compensation program of our senior executive team has three components: salary, annual cash incentive award and performance equity award. Below is the total
compensation awarded to our senior executive team for 2020 performance. Approximately 90% of the total compensation is in the form of (a) at-risk cash incentive awards based on both financial performance and the execution of strategic objectives and
(b) performance-based equity of which the actual value ranges between 0% and 200% of the target grant based on TSR. The charts below illustrate the total direct compensation for our senior executive team in 2020.










In March 2021, the Committee awarded our senior executive team a special one-time award in recognition of the outstanding performance achieved in 2020 during the pandemic. The special
awards are over and above the awards that would be paid for the performance achieved in a year like 2020. The special awards are as follows: $2.5 million to our CEO,












31











Jay Bray; $2.75 million to our CFO, Chris Marshall; and $2.75 million to our COO, Tony Ebers. The award is split equally between cash and performance-based equity for our CEO and is split
between $1.25 million in cash and $1.5 million in performance-based equity for our CFO and COO. All the equity awarded to our senior executive team is in the form of performance-based equity as described later in the CD&A.





The purpose of the special one-time award is to recognize two significant achievements during the past year:













1.




Outstanding leadership in managing the effects of the COVID-19 pandemic in the workplace.



We put the safety and health of our employees first and
foremost. The senior executive team crafted and executed a plan to quickly move over 95% of our employees as practically as possible to work-from-home status within a matter of days. At the same time, the senior executive team was able to keep,
and in some cases improve, productivity, maintain an engaged workforce and hold turnover to acceptable levels in the face of significant demand for origination and servicing personnel. We also received re-certification as a Great Place to Work.












2.



Outstanding planning and execution of our strategy to manage the economic uncertainty caused by the pandemic.


The senior executive team delivered truly exceptional financial performance in 2020–actual
Adjusted EBT was more than three times the earnings budgeted for the year. We used $400 million in cash to redeem our senior notes, while at the same time refinanced the remaining $2.1 billion of senior notes, significantly lowering funding costs
and improving the Company’s liquidity profile, leaving no maturities until 2027. During 2020, we repurchased 2.6 million shares of our common stock. The senior executive team negotiated additional capacity on our advance facilities and entered
into a new financing facility for Ginnie Mae MSRs and advances, reducing the risk of a detrimental liquidity event and ensuring that Mr. Cooper Group would serve as a source of strength in the housing market even in an extremely severe downturn.





Stockholder Feedback and Last Year’s Say on Pay Vote





The re-design of the executive compensation program for 2020 takes into account the feedback we received from our stockholders as well as an extensive analysis of the compensation programs
employed by our peers with the assistance of the Compensation Committee’s independent compensation consultant. We received feedback from stockholders that: (a) our compensation structure was too heavily weighted toward cash, (b) we had no
performance-based equity and (c) our one-time equity retention bonuses in connection with the Merger and base salary increases were excessive relative to the Company’s weak share price performance. We announced our 2020 compensation program in last
year’s proxy statement, and at the 2020 Annual Meeting of Stockholders, approximately 72% of the votes cast on the advisory vote on executive compensation were in favor of our named executive officers’ compensation. The Compensation Committee will
continue to review the annual stockholder votes on our executive compensation program and determine whether to make any changes in light of the results. We are committed to maintaining an active dialogue with stockholders to understand their
perspectives on our executive compensation program, and we plan to continue this dialogue. Stockholders are always welcome to communicate their views as described under “Communications with the Board” in this proxy statement.






Process for Setting Executive Officer Compensation








Role of Compensation Committee











The Compensation Committee administers our compensation plans, programs and policies relating to our named executive officers. The Compensation Committee conducts periodic reviews, at least annually, and monitors our overall
compensation strategy to ensure that executive compensation supports our business objectives. It also conducts an annual evaluation of our Chairman, President & Chief Executive Officer’s performance. As part of this compensation setting process,
the Compensation Committee, with assistance from its compensation advisor, reviews the compensation (including base salary, annual cash incentives, long-term incentives and other benefits) of similarly-situated executive officers in our comparator
group.












32














Role of Named Executive Officers











Other than the Chairman, President & Chief Executive Officer and the Vice Chairman & Chief Financial Officer, our named executive officers do not, either individually or as a group, play a direct role in determining executive
compensation. The Chairman, President & Chief Executive Officer advises the Compensation Committee from time to time of his own evaluation of the job performance of the other named executive officers and, together with the Vice Chairman & Chief
Financial Officer, offers for consideration recommendations as to their compensation levels. The Compensation Committee considers these recommendations but makes all compensation decisions related to our executive officers.








Role of Compensation Advisor











The Compensation Committee has the authority under its charter, in its sole discretion, to engage the services of a compensation advisor or other advisors to assist the Compensation Committee in the performance of its duties. The
Compensation Committee retained Gressle & McGinley to serve as the Compensation Committee’s independent compensation advisor on matters related to executive and board of director compensation for 2020. The compensation advisor regularly attended
Compensation Committee meetings and reported directly to the Compensation Committee on matters relating to the compensation of our executive officers and directors.





The compensation advisor:















Reviews our comparator group;















Conducts an analysis of compensation for our executive officers and directors;















Assesses how compensation aligns with our philosophy and objectives;















Assists the Compensation Committee in the review of incentive plan design and related benefit programs; and















Provides the Compensation Committee with ongoing advice and counsel on market compensation and governance trends including their impact on
our executive and director compensation programs.





The Compensation Committee annually reviews and establishes the scope of the engagement of the compensation advisor, which is reflected in an engagement letter between the compensation
advisor and the Compensation Committee.






Compensation Peer Group





The Compensation Committee with assistance from its compensation advisor annually assesses market conditions through a review of compensation from a group of comparator companies (the
Comparator Group). The Compensation Committee reviewed the composition of the Comparator Group to be used to calibrate our executive compensation program for 2020 and did not make any changes from the previous year, except to remove Ellie Mae and add
Rocket Companies, Inc. The Compensation Committee also uses additional peer benchmarking for certain compensation decisions. The Compensation Committee used findings from the compensation review to assess our named executive officers’ pay position, our
overall program design and program leverage relative to peers. The Compensation Committee does not target any particular range of pay relative to pay of the Comparator Group.














































































Company Name





Ticker






Company Name





Ticker




Arbor Realty Trust



ABR




Rocket Companies, Inc.



RKT



Black Knight, Inc.



BKI




Walker & Dunlop



WD



Chimera Investment



CIM




Altisource Portfolio Solutions S.A.



ASPS



Ladder Capital Corp



LADR




CoreLogic



CLGX



LendingClub Corporation



LC




PennyMac Financial Services, Inc.



PFSI



LendingTree



TREE




Redwood Trust Inc.



RWT



MFA Financial



MFA




Ocwen



OCN



OneMain Holdings, Inc.



OMF




Zillow Group



Z



Radian Group



RDN















33












Elements of our Executive Compensation Program





Our program consists of three principal elements:















Base salary;















Annual cash incentives; and















Long-term incentive awards.






Base Salary





Base salaries are set depending on the scope of each named executive officer’s respective responsibilities and what is necessary to recruit and retain skilled executives. Base salaries are
reviewed annually in accordance with our named executive officer’s annual performance evaluation and may be modified from time to time in view of our named executive officer’s individual responsibilities, individual and company performance, and
experience. Periodic base salary adjustments are intended to ensure that the individual’s base salary, in conjunction with the other compensation elements, remains competitive for the position and responsibilities.





In determining base salary for our named executive officers for 2020, the Compensation Committee considered our pay-for-performance culture, our philosophy to have low fixed and high
performance-based compensation, and the performance of the given named executive officer. The Compensation Committee approved an increase in Mr. Marshall’s base salary based on a peer group analysis and an increase to Mr. Rawls’ base salary in
connection with his promotion to CEO of Xome. The following table sets forth information regarding our named executive officers’ annual base salaries for 2020:



















































Salary





Executive





2019





2020





% Increase




Jay Bray



$1,000,000



$1,000,000



0%



Chris Marshall



$700,000



$750,000

(1)




7%



Eldridge Burns



N/A



$500,000



N/A



Anthony Ebers



$750,000



$750,000



0%



Michael Rawls



$400,000



$450,000



12.5%























(1)


Salary adjusted in March 2020





Annual Cash Incentive Awards





The annual bonus opportunity for each named executive officer is linked to achieving financial, operating and strategic objectives of the Company and is equally split between financial
performance and qualitative factors that improve the customer experience, maintain regulatory compliance and risk management, strengthen employee commitment and support our analysts and investors. Individual performance and its impact on financial,
strategic, business unit or individual objectives may also be considered. The Compensation Committee approves the amount of the annual bonus paid to each named executive officer based on application of any objective or subjective criteria that the
Compensation Committee may select at any time prior to payment of the annual bonuses, including the corporate goals discussed below. The Compensation Committee may adjust awards in a non-uniform manner among the participants.







The 2020 corporate goals for our Named Executive Officers included goals related to:














1.





Financial Performance (50%) and















2.





Strategic Objectives (50%)














34













Financial Performance






Fifty percent of the annual cash incentive awards are based on actual financial performance against budgeted performance. For the CEO, CFO and COO, financial performance is measured by
Adjusted Earnings Before Taxes (Adjusted EBT). 2020 results are as follows:































Adjusted EBT

(1)








Performance:







Target




$327M



Results




$1,154M






















(1)




Adjusted EBT is a non-GAAP measure that begins with the GAAP pre-tax income of the total Company and excludes non-GAAP adjustment items.





Thirty percent of Mr. Burn’s financial performance metric is based on Adjusted EBT described above and 20% is on Legal Core Functional Expenses. Twenty-five present of Mr. Rawls’ financial
performance metric is based on Adjusted EBT and 25% is based on Xome Adjusted EBT. 2020 results for Xome Adjusted EBT and Legal Core Functional Expenses are as follows:








































Xome Adjusted EBT

(1)






Legal Core Functional Expense







Performance:





Performance:








Target




$57M



$32.3M



Results




$62M



$32.5M






















(1)




Adjusted Xome EBT is a non-GAAP measure that begins with the GAAP pre-tax income of Xome and excludes non-GAAP adjustment items.







Strategic Performance






The Compensation Committee believes that our named executive officers’ performance goals should support and help achieve the Company’s strategic objectives. Strategic performance is
weighted at 50% of the total payout. In assessing each named executive officer’s individual performance, the named executive officer’s annual performance goals, as well as challenges that the named executive officer faced over the course of the year,
are considered. For each of the CEO, CFO and COO, the Compensation Committee does not assign a specific weighting to the strategic initiatives discussed below, and instead performs a holistic review of performance in the aggregate. For Messrs. Rawls
and Ebers, the Compensation Committee does assign weightings for strategic initiatives.






Evaluating the CEO’s Strategic Performance





The CEO is responsible for the development and execution of our strategy, which is to improve and ultimately reinvent the customer experience in securing, re-financing and managing a home
mortgage. Successful execution of our strategy will enable us to increase the number of customers we serve, grow our operating profits and provide, at a minimum, a fair return to investors. The critical drivers of our strategy are:









continuous evolution of technology and product organizations to create a seamless
and efficient customer experience;









continuous improvement in the cost structure;









strengthening the balance sheet through deleveraging and building liquidity;









diligence in regulatory compliance; and









sustaining a high-performance culture.












35











The evaluation of the CEO’s performance as it relates to strategic performance includes the following components:







Board Survey

:

The Compensation Committee conducts an annual survey to assess the CEO’s performance. The survey was developed from a
review of academic and business literature on successful characteristics of CEOs as well as the Compensation Committee’s own knowledge and experience in managing a regulated financial services company. The survey covers six broad topics including:















Strategic Intent – the CEO’s performance in developing and executing a strategy to innovate, grow and create shareholder value and the CEO’s performance in developing the
skills, processes, technologies, values and assets required to execute the strategy.















Operational Excellence – the CEO’s performance in developing and executing short- and long-term initiatives to meet the strategic objectives and the CEO’s management of
the senior leadership team.















Risk Management – the CEO’s performance in developing effective oversight of business risks facing the Originations and Servicing segments and establishing processes to
adequately inform risk management activities.















Leadership – the CEO’s performance in building and maintaining a culture of high performance, effective decision-making processes and succession planning.















Management of Capital Resources and Expenses – the CEO’s performance in meeting expense targets and in effectively deploying capital to provide an adequate return to
stockholders.















Management of Key Constituents – effective engagement with other members of the Board and effective management of investors and analysts.





The survey results are shared with the CEO, serving as the basis for a constructive dialogue between the Board and CEO on both strategic and managerial issues. In 2020, the CEO
scored above average on all survey components.







CEO Self-Assessment

:

The CEO reviews his own performance in light of the topics that are covered in the Board Survey.







Strategic Initiatives

:

The CEO, along with the other named executive officers, is evaluated against specific objectives that are
agreed upon at the beginning of each year and described below.







Evaluating Other Named Executive Officers’ Strategic Performance






For each of the named executive officers other than the CEO, the CEO makes recommendations to the Compensation Committee, based on each named executive officer’s annual performance, and
the Compensation Committee confirms a payout. At the Compensation Committee’s February 2021 meeting, the CEO evaluated the performance of the other named executive officers and presented the results of those evaluations to the Compensation Committee
for consideration. The evaluations included an analysis of the named executives’ performance against their strategic and operational initiatives. The Committee concurred with the CEO’s recommendation for annual bonus payouts for Messrs. Marshall,
Ebers, Rawls and Burns. Strategic initiatives for 2020 included the following:







Employee Engagement:


(a) 20% weighting on becoming re-certified as a Great Place to Work (GPTW) with a survey target at 65-73% (actual
results were re-certification and above target 82% survey results), (b) 20% weighting on GPTW channel survey score with survey target at 68%-73% (actual results were above target 79% survey results), (c) 50% weighting on annual voluntary turnover rate
with a target of 17%-19% (actual results ranged between an 18%-20% turnover rate) and (d) 10% weighting on a diversity and inclusion GPTW survey score with survey target of same average score as last year (actual results were above target at improved
score by 2 or more points). The Employee Engagement metric is weighted at 20% for Messrs. Burns and Rawls.












36













Customer:


(a) 50% weighting was given to achieving a JD Powers quarterly ratings’ goal for our originations and servicing segments
with a target of 2 out of 4 (actual results were Originations at target: 2 out of 4 and Servicing above target: 4 out of 4), (b) 25% of the weighting given for improving our JD Powers annual ratings in our Originations and Servicing segments with a
target of improve ranking by 1 (actual results were Originations above target: improve ranking over 3 and Servicing at target: improved ranking by 2) and (c) 25% of the weighting on our digital presence to increase number of digital loans and paperless
adoption with a target score of 2 out of 4 (actual results were above target: 4 out of 4). The Customer metric is weighted at 20% for Messrs. Burns and Rawls.







Compliance:


(a) 70% weighting was given to federal and state regulatory compliance examination issue resolution with the target of no
repeat federal and state regulatory compliance findings and issue resolution at a 85% or greater validation rate by internal audit (actual results were no repeat findings and above target 95% validation rate) and (b) 30% weighting was given to internal
audit ratings with a target of no repeat findings and internal audit identified issues resolved at 85% or greater validation rate (actual results were no repeat findings and above target 100% validation rate). The Compliance metric is weighted at 10%
for Messrs. Burns and Rawls.







Approved Annual Bonus Payouts






In determining the amount payable to each named executive officer, the Compensation Committee may, in its sole discretion, adjust the amount of any bonus otherwise payable to any
participant based on a participant’s individual performance or any other objective or subjective factor that the Compensation Committee deems relevant. Following the completion of 2020, the Compensation Committee considered achievement under the 2020
corporate goals, the Company’s overall performance and the individual performance of each participant. In particular the Compensation Committee considered that the Company:














ü



generated $307 million in net income, or $3.20 per diluted share













ü



increased stock price by 150% and generated an incremental $1.6 billion in shareholder value













ü



produced an operating return on tangible common equity of 42.5%, and grew tangible book value by 17% to $26.27 per share













ü



moved more than 95% of team members to work-from-home status within a matter of days













ü



retained cash, bolstered liquidity, and negotiated additional capacity on advance and warehouse lines













ü



helped 364,000 homeowners enter into forbearance plans and helped 186,000 exit forbearance and resume their monthly payments













ü



created digital self-service tools, rolled out within weeks of the pandemic, that provided a streamlined and positive customer experience













ü



generated $1.5 billion in pretax income in the Originations segment on $63 billion in new loans, both of which were new records













ü



sustained Servicing segment’s position as the largest nonbank servicer and #3 overall with 3.5 million customers and $626 billion of unpaid principal balance













ü



produced $433 million in revenues at Xome













ü



used $400 million in cash to redeem senior notes and refinanced the remaining $2.1 billion, lowering funding costs and improving liquidity profile, with no maturities
until 2027













ü



repurchased 2.6 million shares of common stock













ü



significantly reduced corporate expenses













ü



achieved certification as a Great Place to Work for the second consecutive year













37











After consideration of the Company’s pay-for-performance culture and exceptional performance of the Company in 2020, the Compensation Committee approved the bonus amounts below. The
following table shows for each named executive officer: (a) his target bonus, (b) maximum bonus opportunity and (c) final 2020 bonus amount approved by the Compensation Committee and paid to the named executive officer. In addition, due to the
exceptional performance of the Company discussed above, the Committee approved an additional one-time special award for each of Messrs. Bray, Marshall and Ebers.









































































































































































Executive






Target ($)





Maximum ($)





Approved Bonus ($)



Jay Bray

Financial Metric Award

1,250,000

1,750,000

1,750,000


Strategic Award

1,250,000

1,750,000

1,750,000


Special One-time Award





1,250,000


Total

2,500,000

3,500,000

4,750,000






Chris Marshall

Financial Metric Award

750,000

1,125,000

1,125,000


Strategic Award

750,000

1,125,000

1,125,000


Special One-time Award





1,250,000


Total

1,500,000

2,250,000

3,500,000






Anthony Ebers

Financial Metric Award

750,000

1,125,000

1,125,000


Strategic Award

750,000

1,125,000

1,125,000


Special One-time Award





1,250,000


Total

1,500,000

2,250,000

3,500,000






Eldridge Burns

Financial Metric Award

225,000

375,000

118,050


Strategic Award

225,000

375,000

118,050


Total

450,000

750,000

236,100

(1)







Michael Rawls

Financial Metric Award

540,000

900,000

810,000


Strategic Award

540,000

900,000

810,000


Total

1,080,000

1,800,000

1,620,000




















(1)


Pro-rated amount based on start date of August 10, 2020.





Long-Term Incentive Awards








Incentive Plan











Our Omnibus Incentive Plan enables us to offer certain key employees, consultants and non-employee directors equity- and cash-based awards. It enhances our ability to attract, retain and reward these individuals, while strengthening
the mutuality of interests between those individuals and our stockholders.








PSUs:



Our performance equity program, which was developed for 2020, provides for an annual equity grant of performance shares. The number
of shares that vest is based on achieving pre-established one-year and three-year financial targets. For 2020, the financial target is based on TSR. If the one-year and/or three-year target is exceeded, additional shares may vest; if performance is
less than target, fewer shares vest; and, if performance is very weak, no shares vest.





There are two opportunities to vest in the shares. At the end of the first year following the grant, one-third of the total shares initially granted is set as the target. The actual number
of shares that vest is based on the one-year TSR and can range between no shares and 200% of the target shares. At the end of the third year, the equity grant is evaluated against the three-year TSR. Any shares that vested at the end of the first year
are deducted from the shares that vest at the end of the third year. However, if the shares that vested at the end of the first year exceeds the number that would have vested at the end of the third year, none of the shares that have vested are “clawed
back.”












38











The terms of the performance equity are presented below:












































































Performance Criteria





Total Shareholder Return






Initial Period






Cumulative Period



Below Threshold

Less than 5.5%


Less than 17.4%

Threshold

5.5%


17.4%

Target

10.0%


33.1%

Maximum

14.5%


50.1%







Award Opportunity







Shares awarded as a percent of Target shares



Below Threshold

0%


0%

Threshold

50%


50%

Target

100%


100%

Maximum

200%


200%










2020 PSU Awards






Our Compensation Committee grants PSU awards to our CEO, CFO and COO at its regularly-scheduled meeting during the first quarter of each year. In March 2020, the Compensation Committee
approved awards of performance stock units, as follows:











































Executive






Monetary Value of PSUs ($)



Jay Bray


3,500,000




Chris Marshall


1,500,000




Anthony Ebers


1,000,000





After the completion of the one-year performance period, the Compensation Committee certified that one-year TSR was at 125%, resulting in one third of the target shares vesting at 200%. As
a result, Mr. Bray earned 196,838 shares, Mr. Marshall earned 84,358 shares and Mr. Ebers earned 56,238 shares.







2021 PSU Awards






In March 2021, the Compensation Committee awarded PSUs to the senior executive team as follows:











































Executive






Monetary Value
of PSUs ($)




Jay Bray




4,750,000






Chris Marshall




2,500,000






Anthony Ebers




2,500,000











RSUs

:


Time-based awards of restricted stock units are granted to retain key talent and establish a common interest of the key executives
with our stockholders through stock ownership. Each restricted stock unit is equivalent in value to one share of our common stock and generally vests in one-third installments on each of the first three anniversaries of the award, provided the
participant remains continuously employed with us during that time. In addition, upon death, disability or a change in control of the Company, the unvested restricted stock units will vest. We believe that the time-based vesting requirements provide a
strong retention mechanism. The ultimate value of the award, however, depends on the market value of our common stock on the vesting date, and accordingly time-based equity awards effectively align the interests of the participants with our
stockholders. It is expected that time-based equity awards will continue to play a role in our compensation programs for our executive officers.












39














2020 RSU Awards









Our Compensation Committee grants RSU awards to our executive officers other than our CEO, CFO and COO at its regularly-scheduled meeting during the first quarter of each year. The Compensation Committee approved an award of restricted stock
units to Mike Rawls in March 2020 and to Eldridge Burns in September 2020 as a sign-on equity award, as follows:

































Executive






Monetary Value
of RSUs ($)




Eldridge Burns




250,000






Michael Rawls




1,000,000









2021 RSU Awards









In March 2021, the Compensation Committee awarded RSUs as follows:

































Executive






Monetary Value
of RSUs ($)




Eldridge Burns




450,000






Michael Rawls




1,000,000







Stock Ownership Guidelines





Under our stock ownership guidelines that were adopted by our Compensation Committee, each named executive officer must own common shares of Mr. Cooper Group common stock with an aggregate
market value of no less than the applicable multiple of the officer’s annual base salary for the immediately preceding year as follows:



































Multiple of Annual Salary




Chief Executive Officer




5x



Chief Financial Officer




3x



Chief Operating Officer




3x



All Other Executive Officers




2x





The Compensation Committee established these particular levels of stock ownership for our executive officers because we want to have the interests of our executive officers aligned with
the investment interests of our stockholders. The minimum share ownership requirement must be satisfied by no later than the fifth anniversary of March 1, 2019 or the date an officer receives his or her first grant as an executive officer. All
executive officers are currently in compliance with the stock ownership guidelines.






Anti-Hedging and Pledging Policy





Certain forms of hedging or monetization transactions allow a director or employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the
potential for upside appreciation in the stock. These transactions allow the director or employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the director or employee may no longer
have the same objectives as our other stockholders. Therefore, under our insider trading program, our officers, directors and employees may not engage in any hedging or monetization transactions with respect to our securities, including, but not
limited to, through the use of financial instruments such as exchange funds, prepaid variable forwards, equity swaps, puts, calls, collars, forwards and other derivative instruments, or through the establishment of a short position in the Company’s
securities. Additionally, our officers, directors and employees are prohibited from margining Company securities or pledging Company securities as collateral for a loan.












40












Risk Considerations





In developing and reviewing the Company’s executive incentive programs, the Compensation Committee considers the business risks inherent in the design of compensation arrangements to
ensure they do not induce executives to take unacceptable levels of business risk for the purpose of increasing their incentive plan awards. The Compensation Committee believes that the mix of compensation components used in the determination of our
named executive officers’ compensation reflects the performance of the Company and the performance of the individual employee and does not encourage our named executive officers to take unreasonable risks relating to the business. Our named executive
officers’ ownership interest in the Company aligns their interests with our long-term performance and discourages excessive risk taking. The Compensation Committee does not believe our compensation programs are reasonably likely to have a material
adverse effect on the Company.






Other Compensation Components





All of our named executive officers are eligible to participate in our employee benefit plans, including medical, dental, life insurance and 401(k) plans. These plans are available to all
employees and do not discriminate in favor of our named executive officers. While we do not view perquisites as a significant element of our compensation structure, we believe that limited perquisites facilitate the attraction and retention of superior
management talent. The value of these benefits to our named executive officers is set forth in the Summary Compensation Table under the column “All Other Compensation.” For 2019, these perquisites primarily related to contributions to a named executive
officer’s 401(k) plan account.






Employment Agreements and Offer Letters





We have not entered into employment agreements with our named executive officers. We have, however, entered into offer letters with certain of our named executive officers upon their hire
or promotion. In 2020, the following offer letters were in effect.








Mr. Burns.



Mr. Burns’ offer letter provides that upon termination of Mr. Burns’ employment by us without cause during the initial twelve
months of his employment, he will receive severance benefits of 12 months base salary plus 100% of his prior year’s bonus. Mr. Burns is also subject to non-competition and non-solicitation provisions for the 12-month period immediately following the
date of termination of his employment with us.








Mr. Ebers


.

Mr. Ebers’ offer letter provides that upon termination of Mr. Ebers’ employment by us without cause, he will receive severance
benefits of (a) 12 months base salary plus a pro rata portion of his target bonus amount and (b) continuation of medical benefits for up to 12 months. Mr. Ebers is also subject to non-competition and non-solicitation provisions for the 12-month period
immediately following the date of termination of his employment with us.








Mr. Marshall.



Mr. Marshall’s offer letter provides that upon termination of Mr. Marshall’s employment by us without cause, or if he
terminates his employment for good reason, during the initial twenty-four (24) months of his employment he will receive severance benefits of (a) 12 months base salary plus 100% of the higher of his target bonus or his prior year’s bonus,
(b) continuation of medical benefits for up to 12 months and (c) accelerated vesting of the next tranche of restricted stock units scheduled to vest for each grant awarded. Mr. Marshall is also subject to non-competition and non-solicitation provisions
for the 12-month period immediately following the date of termination of his employment with us.








Mr. Rawls


.

Mr. Rawls’ offer letter provides that if his employment is terminated by us without cause, or if he terminates his employment
for good reason, during the initial twenty-four (24) months of his employment as CEO of Xome, he will be entitled to severance benefits of (a) 24 months base salary plus 100% of the higher of his target bonus or his prior year’s bonus; (b) vesting of
the next tranche of restricted stock units scheduled to vest; and (c) continuation of medical benefits for up to 24 months. Mr. Rawls is also subject to non-competition and non-solicitation provisions for the 24-month period immediately following the
date of termination of his employment with us.












41
















COMPENSATION COMMITTEE REPORT






The Compensation Committee of the Board has reviewed and discussed the above “Compensation Discussion and Analysis” with the Company’s management. Based on this review and discussion,
the Compensation Committee recommended to the Board that the “Compensation Discussion and Analysis” be included in the Company’s 2021 Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.





This report was submitted by the Compensation Committee on March 25, 2021 and shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A
promulgated by the SEC or Section18 of the Exchange Act.









Members of the Compensation Committee


as of March 25, 2021:





Rob Gidel, Chair



Roy Guthrie



Michael Malone



Tagar Olson













42














HISTORICAL EXECUTIVE COMPENSATION INFORMATION








Summary Compensation Table





The following table sets forth the annual compensation for our named executive officers serving at the end of 2020:








































































































































































































































































































































Name and Principal


Position






Year






Salary


($)






Bonus


($)






Stock


Awards


($)

(1)







Non-Equity


Incentive Plan


Compensation


($)

(2)







All Other


Compensation


($)

(3)







Total


($)




















Jay Bray




2020


1,000,000





3,500,000


4,750,000


11,290


9,261,290

Chairman, President & Chief Executive Officer


2019


1,000,000


1,683,509


1,000,002


3,500,000


10,985


7,194,496


2018


672,116


1,683,509


18,502,451


4,250,000


11,000


25,119,076


















Christopher Marshall




2020


738,462





1,500,000


3,500,000


8,550


5,747,012

Vice Chairman & Chief Financial Officer


2019


681,154





5,624,675


2,625,000


196,928


9,127,757


















Eldridge Burns




2020


182,692

(4)






250,008


236,100





668,800

Executive Vice President  & Chief Legal Officer
































Anthony Ebers




2020


750,000





1,000,000


3,500,000


11,400


5,261,400

Executive Vice President  & Chief Operating Officer


2019


750,000


673,404


500,008


2,350,000


11,021


4,284,433


2018


570,000


673,404


8,501,226


1,500,000


9,583


11,254,213


















Michael Rawls




2020


448,077





1,000,009


1,620,000


11,725


3,079,811

Executive Vice President & CEO Xome


2019


400,000


577,203


500,008


1,200,000


11,417


2,688,628


2018


400,000


577,203


1,500,002


1,050,000


8,729


3,535,934




















(1)


The amounts reported in the Stock Awards column reflect the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718,

Compensation—Stock Compensation

excluding the effect of estimated forfeitures during the
applicable vesting periods, of RSUs or PSUs granted to our named executive officers. The amount of the PSUs that vest is subject to the achievement of certain performance criteria at the end of a one-year and three-year performance period.
Assumptions used for determining the value of the awards reported in these columns are set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 in Note 14 to the Consolidated Financial Statements, “Stockholders’ Equity and
Employee Benefit Plans.” See "Compensation Discussion and Analysis – Long-Term Incentive Awards” and the Grants of Plan based Awards for 2020 and the accompanying notes for information with respect to vesting of these awards.












(2)


These amounts represent non-equity payments for annual bonus awards which were paid in the first quarter of 2021 but represent awards with respect to the Company’s and individual performance in 2020.












(3)


Represents for 2020 (a) for Mr. Bray, a contribution to his 401(k) Plan account of $11,290, (b) for Mr. Marshall, a contribution to his 401(k) Plan account of $8,550, (c) for Mr. Ebers, a contribution to his 401(k) Plan account of $11,400, and
(d) for Mr. Rawls, a contribution to his 401(k) Plan account of $11,725.












(4)


Represents actual salary paid to Mr. Burns based on his start date of August 10, 2020.











43
















Grants of Plan Based Awards for 2020





The following table sets forth, for each of our named executive officers, the grants of awards under any plan during the year 2020, as described in further detail in the sections titled
“Annual Cash Incentive Awards” and “Long-Term Incentive Awards:”




























































































































































































































































































































































































Name






Grant Date






Date of


Compensation


Committee


Approval






Estimated Future Payouts Under


Non-Equity Incentive Plan


Awards

(1)







Estimated Future Payouts Under


Equity Incentive Plan Awards

(2)







All Other


Stock


Awards:


Number


of


Shares of


Stock or


Units (#)

(3)







Grant


Date Fair


Value of


Stock


Awards


($)

(4)






Threshold


($)






Target


($)






Maximum


($)





Threshold


($)






Target


($)






Maximum


($)





Jay Bray























Annual Bonus











2,500,000


3,500,000
















Incentive Plan-PSUs


3/13/2020














1,750,000


3,500,000


7,000,000





3,500,000



Christopher Marshall























Annual Bonus











1,500,000


2,250,000
















Incentive Plan-PSUs


3/13/2020














750,000


1,500,000


3,000,000





1,500,000



Eldridge Burns























Annual Bonus











450,000


750,000
















Incentive Plan-RSUs


9/1/2020


7/29/2020




















13,643


250,008



Anthony Ebers























Annual Bonus











1,500,000


2,250,000
















Incentive Plan-PSUs


3/13/2020














500,000


1,000,000


2,000,000





1,000,000



Michael Rawls























Annual Bonus











1,080,000


1,800,000
















Incentive Plan-RSUs


3/13/2020























77,943


1,000,009




















(1)


The amounts reported in the Estimated Future Payouts Under Non-Equity Incentive Plan Awards column represent the potential payouts of awards under our annual bonus plan subject to the achievement of certain performance measures. The actual
amount of the awards made to our named executive officers is included in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.












(2)


The amounts reported in the Estimated Future Payouts Under Equity Incentive Plan Awards column represent

the threshold, target, and maximum number of shares issuable with respect to performance share
units granted in March 2020. The performance share units are settled in shares of common stock, in an amount from 0% to 200% of the number of units awarded, based on the Company's total stockholder return over a one-year and a three-year period
commencing on March 1, 2020.

(see "Compensation Discussion and Analysis – Long-Term Incentive Awards”).












(3)


Represents awards of time-based restricted stock units to Messrs. Burns and Rawls that vest in one-third installments on each of the first three anniversaries of the grant date of the award.












(4)


Represents the aggregate grant date fair value as computed in accordance with FASB ASC Topic 718,

Compensation—Stock Compensation

excluding the effect of estimated forfeitures during the applicable vesting periods, of RSUs or PSUs
granted to our named executive officers. The March 13, 2020 RSU award was valued at $12.83 per share, and the September 1, 2020 RSU grant was valued at $18.325 per share. The RSUs are valued using the closing stock price of the last trading date
prior to the grant. Each of the PSU awards was valued at $11.85 per share. The PSUs are valued using the closing stock price of the last trading date prior to the grant and a Monte Carlo simulation model with a volatility of 35.1% and a risk-free
rate of 0.85%. Assumptions used for determining the value of the awards reported in these columns are set forth in our Annual Report on Form 10-K for the year ended December 31, 2020 in Note 14 to the Consolidated Financial Statements,
“Stockholders’ Equity and Employee Benefit Plans.”











44

















Outstanding Equity Awards at Fiscal
Year End






The following table sets forth, for each of our named executive officers, their outstanding equity awards as of December 31, 2020, as described in greater detail in the in the section
“Long-Term Incentive Awards:”






























































































































































































































































































































Stock Awards





Name






Grant


Date






Number of Shares or


Units of Stock that


Have Not Vested (#)






Market Value


of Shares


or Units of Stock


that


Have Not


Vested ($)

(1)







Equity
Incentive


Plan Awards:


Number of


Unearned


Shares, Units or


Other Rights


That Have Not


Vested (#)






Equity
Incentive


Plan Awards:


Market or Payout


Value of Unearned


Shares, Units or


other Rights That


Have Not


Vested ($)

(1)





Jay Bray




3/1/2018




20,669

(2)





641,359









12/1/2018




938,339

(3)





29,116,659









3/1/2019




48,492

(4)





1,504,707









3/13/2020








590,518

(5)





18,323,774

























Christopher Marshall




3/1/2019




48,492

(4)





1,504,707









5/1/2019




428,956

(6)





13,310,505




















3/13/2020








253,080

(5)





7,853,072














Eldridge Burns




9/1/2020




13,643

(7)





423,342


















Anthony Ebers




3/1/2018




10,334

(8)





320,664









12/1/2018




428,956

(6)





13,310,505









3/1/2019




24,247

(9)





752,384









3/13/2020








168,720

(5)





5,235,381














Michael Rawls




3/1/2018




10,334

(8)





320,664









12/1/2018




44,651

(10)





1,385,521









3/1/2019




24,247

(9)





752,384









3/13/2020




77,943

(11)





2,418,571

























(1)


Based on the closing market price of our common stock on December 31, 2020, which was $31.03.












(2)


This award of restricted stock units is subject to vesting. 20,669 units vested on March 1, 2021.












(3)


This award of restricted stock units is subject to vesting. 234,585 units vested on March 1, 2021; 234,584 units will vest on March 1, 2022; 234,585 units will vest on March 1, 2023 and 234,585 units will vest on March 1, 2024.












(4)


This award of restricted stock units is subject to vesting. 24,209 units vested on March 1, 2021 and 24,283 units will vest on March 1, 2022.












(5)


Because the actual performance achieved for the TSR performance condition was above the maximum performance level on December 31,2020, the number of shares underlying the awards is based on maximum financial performance. On March 1, 2021, the
Compensation Committee determined that one-year performance was above the maximum performance level, and Mr. Bray earned 196,838 shares, Mr. Marshall earned 84,358 shares and Mr. Ebers earned 56,238 shares.












(6)


This award of restricted stock units is subject to vesting. 107,239 units vested on March 1, 2021; 107,239 units will vest on March 1, 2022; 107,239 units will vest on March 1, 2023 and 107,239 units will vest on March 1, 2024.












(7)


This award of restricted stock units is subject to vesting. 4,543 units will vest on September 1, 2021, 4,543 units will vest on September 1, 2022 and 4,557 units will vest on September 1, 2023.












(8)


This award of restricted stock units is subject to vesting. 10,334 units vested on March 1, 2021.












(9)


This award of restricted stock units is subject to vesting. 12,105 units vested on March 1, 2021 and 12,142 units will vest on March 1, 2022.












(10)


This award of restricted stock units is subject to vesting. 22,292 units vested on March 1, 2021 and 22,359 units will vest on March 1, 2022.












(11)


This award of restricted stock units is subject to vesting. 25,981 units vested on March 13, 2021, 25,981 units will vest on March 13, 2022 and 25,981 units will vest on March 13, 2023.











45














Stock Vested for 2020





The following table provides information on the vesting of shares of Mr. Cooper Group common stock for our other named executive officers in 2020:

























































Stock Awards





Name






Number of Shares
Acquired on Vesting (#)






Value Realized on



Vesting ($)




Jay Bray




170,507




3,526,003



Christopher Marshall




82,810




1,658,861



Eldridge Burns













Anthony Ebers




79,154




1,636,120



Michael Rawls




27,635




564,101












46



















Potential Payments upon Termination or Change of Control









The following table sets forth the value of benefits that would have been payable to our named executive officers
upon the occurrence of various termination events assuming a termination of employment on December 31, 2020, given their compensation levels and, where applicable, Mr. Cooper Group’s closing stock price on that date. Also, the table reflects
potential payments related to a change-in-control and subsequent qualified termination within a specified window. The amounts shown in the table do not include payments and benefits, such as accrued salary and accrued vacation, to the extent that
they are provided on a non-discriminatory basis to salaried employees generally upon termination of employment. If the termination of employment was due to disability, all salaried employees, including our named executive officers, are entitled to
receive a monthly long-term benefit of up to $25,000, which would begin six months following the determination of disability and continue until the person reaches the age of 65 years. The actual amounts to be paid can only be determined at the time
of a named executive officer’s separation from the Company or a change in control and include the accelerated vesting of previously awarded but unvested equity awards.


































































































































































































































































































































































































































































Name








Death


($)








Disability


($)








Termination


Without Cause


($)








Change


in Control


($)
































Jay Bray




























Salary































Annual Bonus































Accelerated Vesting of RSUs






31,262,725

(1)







31,262,725

(1)














31,262,725

(1)




Accelerated Vesting of PSUs






1,630,988

(1)







1,630,98

(1)














12,215,890

(1)




Medical Coverage































Life Insurance






500,000

(2)

























Total






33,393,713






32,893,713













43,478,615




Christopher Marshall




























Salary




















750,000

(3)











Annual Bonus




















2,625,000

(4)











Accelerated Vesting of RSUs






14,815,211

(1)







14,815,211

(1)







4,078,800

(1)







14,815,211

(1)




Accelerated Vesting of PSUs






698,985

(1)







698,985

(1)














5,235,444

(1)




Medical Coverage




















15,238

(5)











Life Insurance






500,000

(2)

























Total






16,014,196






15,514,196






7,469,038






20,050,655




Eldridge Burns




























Salary




















500,000

(3)











Annual Bonus































Accelerated Vesting of RSUs






423,342

(1)







423,342

(1)














423,342

(1)




Medical Coverage































Life Insurance






500,000

(2)

























Total






923,342






423,342






500,000






423,342




Anthony Ebers




























Salary




















750,000

(3)











Annual Bonus




















1,500,000

(4)











Accelerated Vesting of RSUs






14,383,553

(1)







14,383,553

(1)














14,383,553

(1)




Accelerated Vesting of PSUs






465,985

(1)







465,985

(1)














3,490,316

(1)




Medical Coverage




















6,827

(5)











Life Insurance






500,000

(2)

























Total






15,349,538






14,849,538






2,256,827






17,873,869




Michael Rawls




























Salary




















900,000

(3)











Annual Bonus




















1,200,000

(4)











Accelerated Vesting of RSUs






4,877,140

(1)







4,877,140

(1)







2,193,387

(1)







4,877,140

(1)




Medical Coverage




















30,475

(5)











Life Insurance






500,000

(2)

























Total






5,377,140






4,877,140






4,323,862






4,877,140


















47
















































(1)




Pursuant to the award agreements granting each of Messrs. Bray, Marshall, Ebers, and Rawls RSUs under our 2012 Incentive
Compensation Plan, in the event our named executive officer’s employment terminates as a result of his death or disability or in the event of a change in control, all unvested RSU awards shall immediately vest. Pursuant to the RSU award
agreements granting each of Messrs. Bray, Marshall, Ebers, Burns and Rawls RSU awards under our 2019 Omnibus Incentive Plan, in the event our named executive officer’s employment terminates as a result of his death or disability or prior to the
first anniversary of a change in control, without cause or for good reason, all unvested RSU awards shall immediately vest. Pursuant to the PSU award agreements granting each of Messrs. Bray, Marshall and Ebers PSU awards under our 2019 Omnibus
Incentive Plan, in the event our named executive officer’s employment terminates (a) as a result of his death or disability, a pro-rated amount of PSUs shall immediately vest based on actual performance on the date of the death or disability
and (b) without cause or for good reason prior to the first anniversary of a change in control, all unvested PSUs shall immediately vest based on actual performance through the date the change in control. Pursuant to the offer letter described
above with Mr. Marshall upon termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to accelerated vesting of the
next tranche of restricted stock units scheduled to vest for each grant awarded. Pursuant to the offer letter described above with Mr. Rawls, upon termination of Mr. Rawls’ employment by us without cause, or if he terminates his employment for
good reason, during the initial twenty-four months of his employment as CEO of Xome, he is entitled to accelerated vesting of the next tranche of restricted stock units scheduled to vest for each grant awarded. This is based on the closing
market price of $31.03 on December 31, 2020.












(2)




All salaried employees are entitled to a death benefit of two times their annual salary up to $500,000. These payments would
be made pursuant to insurance policies maintained by us.












(3)




Represents an amount equal to his base salary as of December 31, 2020. Pursuant to the offer letter described above with Mr.
Marshall, upon termination of Mr. Marshall’s employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to 12 months of base salary; pursuant to
the offer letter described above with Mr. Burns upon termination of Mr. Burns’ employment by us without cause during the initial twelve months of his employment he is entitled to 12 months of base salary; pursuant to the offer letter described
above with Mr. Ebers, upon a termination without cause, Mr. Ebers is entitled to 12 months of base salary; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’ employment by us without cause, or if he
terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome, he is entitled to 24 months of base salary.












(4)




Pursuant to the offer letter described above with Mr. Marshall upon termination of Mr. Marshall’s employment by us without
cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to 100% of the higher of his target bonus or his prior year’s bonus; pursuant to the offer letter described above
with Mr. Burns upon termination of Mr. Burns’ employment by us without cause during the initial twelve months of his employment he is entitled to 100% of his prior year’s bonus, pursuant to the offer letter described above with Mr. Ebers, upon
a termination without cause, Mr. Ebers is entitled to a pro-rata bonus payment, at target, for the portion of the year he was employed by us; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’
employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome he is entitled to 100% of the higher of his target bonus or his prior year’s bonus.












(5)




Pursuant to the offer letter described above with Mr. Marshall upon termination of Mr. Marshall’s employment by us without
cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment, he is entitled to up to 12 months of continued coverage under our medical plan; pursuant to the offer letter described above
with respect to Mr. Ebers , upon a termination without cause, Mr. Ebers is entitled to up to 12 months of continued coverage under our medical plan; and pursuant to the offer letter described above with Mr. Rawls upon termination of Mr. Rawls’
employment by us without cause, or if he terminates his employment for good reason, during the initial twenty-four months of his employment as CEO of Xome, he is entitled to up to 24 months of continued coverage under our medical plan.














48























Pay Ratio









Under the SEC rules adopted pursuant to the Dodd-Frank Act of 2010, we calculated the total compensation paid to
our median employee, as well as the ratio of the total compensation paid to the median employee as compared to the total compensation paid to our Chairman, President & Chief Executive Officer.

The pay ratio
below is based on our Chairman, President & Chief Executive Officer’s 2020 total annual compensation.






















Median employee total annual compensation



$55,874



CEO total annual compensation



$9,261,290



Ratio of CEO to median employee compensation



166 to 1








We identified our median employee by examining the 2020 W-2 Box 3 social security reportable wages and foreign
equivalent taxable income amounts for all individuals, excluding the Chairman, President & Chief Executive Officer, who were employed by us on December 31, 2020. We included all employees, whether employed on a full-time, part-time, or seasonal
basis. Our employee population as of December 31, 2020 consisted of approximately 9,800 individuals.

We

did not make any assumptions, adjustments, or estimates with respect to compensation and did not annualize
the compensation for any full-time employees that were not employed by us for all of 2020. With respect to the annual total compensation of our Chairman, President & Chief Executive Officer, we used the amount reported in the “Total” column of
our Summary Compensation Table above.








This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and
employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of
methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as
other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.














49





















PROPOSAL 2: ADVISORY VOTE ON SAY ON PAY









In accordance with Section 14A of the Exchange Act, we are providing stockholders with an opportunity to vote to
approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the rules of the SEC.








The Compensation Committee regularly reviews the compensation programs for our named executive officers to ensure
that they achieve the desired goals of aligning the interests of executive management with stockholders, attracting, retaining and motivating high-quality executive officers and creating long-term value. We urge you to read the Compensation
Discussion and Analysis section of this proxy statement, which describes how the executive compensation program reflects our compensation philosophy and objectives and the decisions made by the Compensation Committee for 2020 in detail.








We are asking stockholders to indicate their support for the named executive officer compensation described in this
proxy statement. This proposal, commonly known as a “say on pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of
compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, the Board recommends that stockholders vote in favor of the following
resolution:








“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive
officers, as disclosed in this proxy statement, including the Compensation Discussion and Analysis, the executive compensation tables and the related narrative.”








Because your vote is advisory, it will not be binding upon the Board. However, the Board values stockholders’
opinions, and the Compensation Committee and the Board will take into account the outcome of the vote when considering future executive compensation decisions.









THE BOARD RECOMMENDS A VOTE FOR THE ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION.















50



















Equity Compensation Plan Information









The following table sets forth information as of December 31, 2020, with respect to shares of common stock that may
be issued under our Incentive Plan:














































Plan




Category








Number of Securities


to be Issued Upon


Exercise of


Outstanding Options,


Warrants, and Rights








Weighted Average


Exercise Price of


Outstanding Options,


Warrants and Rights








Number




of Securities


Available for Future


Issuance Under Equity


Compensation Plans




Equity Compensation Plans approved by stockholders

(1)





















17,906,422



Equity Compensation Plans not approved by stockholders
























Total




















17,906,422




























(1)




For additional information, please see Note 14 to the Consolidated Financial Statements, “Stockholders Equity and Employee
Benefit Plans” in our Annual Report on Form 10-K for the year ended December 31, 2020.














51





















AUDIT FUNCTION













Report of the Audit & Risk Committee









Management is responsible for our overall financial reporting process. Ernst & Young LLP is responsible for
expressing opinions on the conformity of our audited consolidated financial statements with U.S. generally accepted accounting principles. The Audit & Risk Committee’s responsibility is to monitor and oversee these processes. The Audit &
Risk Committee is also solely responsible for the selection and termination of our independent registered public accounting firm, including the approval of audit fees and any non-audit services provided by and fees paid to the independent
registered public accounting firm.








In this context, the Audit & Risk Committee:
















has met and held discussions with management of the Company, who represented to the Audit & Risk Committee that our audited consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles;


















has reviewed and discussed the audited consolidated financial statements and discussed with the independent registered
public accounting firm the matters required to be discussed under the applicable standards adopted by the Public Company Accounting Oversight Board;



















has received the written disclosures and the letter from the independent registered public accounting firm required by
the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit & Risk Committee concerning independence and discussed with the
independent registered public accounting firm its independence; and



















participated in the certification process relating to the filing of certain reports pursuant to the Exchange Act.








Based on the review and discussions referred to above, the Audit & Risk Committee recommended to the Board of
Directors that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020 for filing with the SEC.








This report was submitted by the Audit & Risk Committee and shall not be deemed to be “soliciting material”
or to be “filed” with the SEC or subject to Regulation 14A promulgated by the SEC or Section 18 of the Exchange Act.









































Members of the Audit & Risk Committee:






Roy Guthrie, Chair



Robert Gidel



Michael Malone



Steven Scheiwe















52























PROPOSAL 3: RATIFICATION OF APPOINTMENT


OF INDEPENDENT AUDITORS









The Audit & Risk Committee has appointed Ernst & Young LLP (E&Y) as the independent registered public
accounting firm to audit our consolidated financial statements for the year ending December 31, 2021. The Board is asking stockholders to ratify this appointment. Although SEC regulations and NASDAQ listing requirements require our independent
registered public accounting firm to be engaged, retained and supervised by the Audit & Risk Committee, the Board considers the selection of an independent registered public accounting firm to be an important matter to stockholders and a key
corporate governance issue. If the appointment of E&Y is not ratified, the matter of the appointment of the independent registered public accounting firm will be re-considered by the Audit & Risk Committee.








We anticipate that a representative of E&Y will attend the annual meeting, will be available to respond to
appropriate questions and will have an opportunity to make a statement.









THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS
OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.















53





















Independent Registered Public Accounting Firm Fees









The following table presents fees for professional services rendered by E&Y for each of the last two fiscal
years:
































































2020











2019




Audit Fees

(1)




$



6,052,785






$



6,382,050



Audit-Related Fees

(2)







615,000









695,000



Tax Fees

(3)







635,604









425,000



All Other Fees

(4)







4,325









7,200



Total Fees



$



7,307,714






$



7,509,250






























(1)




Audit fees include fees related to the annual integrated audits of our consolidated financial statements, including internal
control over financial reporting, the reviews of our interim consolidated financial statements related to our quarterly reports on Form 10-Q and other services that generally only the independent registered public accountant can provide such as
the issuance of comfort letters and consents.














(2)




Audit-related fees generally include fees related to the performance of other attest engagements under professional auditing
standards, including internal control-related engagements, Regulation AB and other servicer compliance-related engagements and the audit of an employee benefit plan.














(3)




Tax fees relate to the performance of tax compliance services in 2020, including the preparation, review and filing of tax
returns, and consulting services in 2020 and 2019 for various matters, including an assessment of certain capitalizable expenses in 2019.














(4)




This amount relates to the subscription to E&Y’s web-based accounting and auditing research library.









Audit & Risk Committee’s Pre-Approval Policies and Procedures









The Audit & Risk Committee must approve any service to be performed by our independent registered public
accounting firm in advance of the service being performed. The Audit & Risk Committee approved in advance the services performed in 2020 by our independent registered public accounting firms.














54





















CERTAIN RELATIONSHIPS AND RELATED-PARTY TRANSACTIONS










Relationship with KKR











Investment Agreement












On January 30, 2014, we entered into an Investment Agreement with KKR Fund Holdings L.P. (KKR Fund). Pursuant to the investment agreement, we sold to KKR Fund
1,000,000 shares of Series A Convertible Preferred Stock having the terms, rights, obligations and preferences contained in our certificate of incorporation for a purchase price equal to $11,072,192. On February 12, 2018, in connection with the
transactions contemplated by the Merger, we amended our agreement with KKR Fund, and immediately thereafter KKR Fund contributed the Series A Convertible Preferred Stock to KKR Wand Holdings Corporation (Wand Holdings), our largest stockholder and a
KKR affiliate.








The Series A Convertible Preferred Stock has rights substantially similar to those associated with our common
stock, with the exception of a liquidation preference, conversion rights and customary anti-dilution protections. The Series A Convertible Preferred Stock has a liquidation preference equal to the greater of (a) $10.00 per 1,000,000 shares of Series
A Convertible Preferred Stock plus declared but unpaid dividends on any such shares and (b) the amount that the holder of the Series A Convertible Preferred Stock would be entitled to if such holder participated with the holders of shares of our
common stock then outstanding, pro rata as a single class based on the number of outstanding shares of our common stock on an as-converted basis held by each holder as of immediately prior to a liquidation, in the distribution of all of our remaining
assets and funds available for distribution to our stockholders. The Series A Convertible Preferred Stock is convertible at a conversion price of $13.20 per share (subject to anti-dilution adjustment) into shares of our common stock either at the
option of the holder or automatically upon transfer by Wand Holdings to a non-affiliated party. Further, Wand Holdings, as the holder of the Series A Convertible Preferred Stock, has received other rights pursuant to the investor rights agreement
described below.










Investor Rights Agreement












On January 30, 2014, we entered into the investor rights agreement with KKR Fund. On February 12, 2018, KKR Fund assigned its rights under the investor rights
agreement to Wand Holdings. Wand Holdings’ rights as a holder of the Series A Convertible Preferred Stock, and the rights of any subsequent holder that is an affiliate of Wand Holdings, are governed by the investor rights agreement. Pursuant to the
investor rights agreement, for so long as Wand Holdings owns, in the aggregate, at least 50% of the Series A Convertible Preferred Stock issued as of January 30, 2014 (or the underlying common stock), Wand Holdings has the right to appoint two of the
nine directors that currently comprise our board. Currently, Messrs. Harrington and Olson are the Wand Holding designees to our Board.








In the event that any stockholder or group of stockholders other than Wand Holdings calls a stockholder meeting or
seeks to nominate nominees to our board of directors, then Wand Holdings shall not be restricted from calling a stockholder meeting in order to nominate directors as an alternative to the nominees nominated by such stockholder or group, provided that
Wand Holdings shall not nominate or propose a number of directors to our board of directors that is greater than the number of directors nominated or proposed by such stockholder or group.








The investor rights agreement also provides Wand Holdings with registration rights, including three long form
demand registration rights, unlimited short form demand registration rights and customary piggyback registration rights with respect to common stock (and common stock underlying the Series A Convertible Preferred Stock), subject to certain minimum
thresholds, customary blackout periods and lockups of 180 days. We filed a resale registration statement on Form S-3, as amended that was declared effective on November 25, 2015, which, among other things, registered for resale the common stock
underlying the Series A Convertible Preferred Stock.








The investor rights agreement also provides that to the extent that we undertake any capital markets issuances, we
will engage KKR Capital Markets LLC (KCM) to assist us in such issuances on customary commercial terms reasonably














55


















acceptable to us. In 2020, KCM participated in our three senior unsecured notes offerings and received fees and
expense reimbursements of $1,725,000 in the aggregate.








For as long as Wand Holdings beneficially owns any shares of our common stock or Series A Convertible Preferred
Stock, we have agreed to provide customary Rule 144A information rights, to provide Wand Holdings with regular audited and unaudited financial statements and to allow Wand Holdings or its representatives to inspect our books and records.









Related-Party Transaction Policy









The Board recognizes the importance of avoiding conflicts of interest between us and our employees, directors and
affiliates of our employees and directors, and any person who is the beneficial owner or more than 5% of Mr. Cooper Group voting securities (each, a related party). Our Code of Business Conduct and Ethics requires directors and executive officers,
including their affiliates, to avoid any activity, interest or relationship that would create, or might appear to others to create, a conflict of interest with us. Accordingly, our Board has adopted a written policy regarding the approval of any
related-party transaction, which is any transaction or series of transactions involving us or any of our consolidated subsidiaries and a related party where the aggregate amount involved will or may be expected to exceed $120,000 and the related
party has a direct or indirect material interest. In addition, under our policy, the provision of mortgage origination and mortgage servicing to our directors, executive offices and their immediate family members is not considered a related-party
transaction, provided that the transaction is (a) on substantially the same terms for comparable services provided to non-affiliates or (b) pursuant to company policy or programs.








Pursuant to this policy and our related procedures, directors (including director nominees), executive officers and
employees are required to report to our legal department any related-party transactions or circumstances that may create or appear to create a conflict between the personal interests of the individual and the interests of the Company. These
transactions are then reported to the NCG Committee. The disinterested members of the NCG Committee who do not have material direct or indirect interests evaluates each related-party transaction to determine if the transaction is fair, reasonable and
within Company policy and whether it should be ratified and approved. Additionally, the NCG Committee may determine that the Board should approve or ratify any related-party transaction. If the chairman of the NCG Committee determines that it is not
practicable or desirable for the Company to wait until the next regularly-scheduled meeting of the NCG Committee, the chairman may approve or ratify related-party transactions and report to the full NCG Committee at its next regularly-scheduled
committee meeting any approvals or ratifications made by the chairman. In addition, we also make inquiries of management personnel and, as appropriate, third parties and other resources for purposes of identifying related-party transactions. The NCG
Committee considers various factors, including the benefit of the transaction to the Company, the terms of the transaction and whether they are at arm’s-length and in the ordinary course of the Company’s business, the direct or indirect nature of the
related-person’s interest in the transaction, the size and expected term of the transaction, and other facts and circumstances that bear on the materiality of the related-party transaction under applicable law and listing standards.


















56





















BENEFICIAL OWNERSHIP










Security Ownership of Certain Beneficial Owners









The following table shows, as of March 16, 2021, the beneficial ownership of shares of Mr. Cooper Group common
stock by: (a) each director; (b) our named executive officers for 2020; (c) all of our directors and executive officers as a group and (d) each stockholder known to us to beneficially own more than 5% of Mr. Cooper Group common stock. Beneficial
ownership means that the individual has or shares voting power or investment power with respect to the shares of Mr. Cooper Group common stock or the individual has the right to acquire the shares within 60 days of March 16, 2021.























































































































































Name








Shares beneficially owned

(



1)








% of shares outstanding




















Named Executive Officers and Directors
















Jay Bray






910,493






1.0



Busy Burr

(3)







27,485






*



Robert Gidel

(2)







70,001






*



Roy Guthrie

(3)







54,096






*



Christopher Harrington













*



Michael Malone

(3)







101,486






*



Shveta Mujumdar

(3)







15,520






*



Tagar Olson

(3)







13,286






*



Steven Scheiwe

(3)(4)







71,379






*



Eldridge Burns













*



Anthony Ebers






201,414






*



Chris Marshall






387,549






*



Michael Rawls






111,053






*





All directors and executive officers as a
group









(13 persons)











1,963,762






2.17













































































5% Stockholders








Stock Class








Shares beneficially owned








% of Class Owned





BlackRock, Inc.








55 East 52nd Street








New York, NY 10055











Common






10,678,240

(5)







11.78

























Leon G. Cooperman








St. Andrews Country Club








7118 Melrose Castle Lane








Boca Raton, FL 33496











Common






5,054,000

(6)







5.58

(6)







KKR Fund Holdings L.P.


c/o Kohlberg Kravis & Roberts & Co. L.P.


9 West 57

th

Street, Suite 4200


New York, NY 10019






Series A Convertible Preferred






1,000,000

(7)







100.00






Common






15,612,046

(7)




17.07



































*



Indicates less than one percent.












(1)




Includes with respect to each of the following named executive officers, directors, and all executive officers and directors
as a group, the following (a) shares of unvested restricted stock for which the indicated beneficial owners have voting but no investment power and (b) restricted stock units which vest within 60 days of March 16, 2021:


















57
































































































































Name








Restricted
Stock








Restricted Stock Units





Named Executive Officers and Directors
















Jay Bray

















Busy Burr













13,286



Robert Gidel













6,905



Roy Guthrie













6,905



Christopher Harrington

















Michael Malone













6,905



Shveta Mujumdar













15,520



Tagar Olson













13,286



Steven Scheiwe






2,073






13,286



Eldridge Burns

















Anthony Ebers

















Chris Marshall

















Michael Rawls



















All directors and executive officers as a group



(13 persons)









2,073






76,093










(2)




Shares are held in the name of Liberty Partners, LLC.














(3)




Total includes shares for which no voting or investment power currently exists, the receipt of which has been deferred by
(a) Ms. Burr in the amount of 13,286 shares, (b) Mr. Guthrie in the amount of 37,125 shares, (c) Mr. Malone in the amount of 37,125 shares, (d) Ms. Mujumdar in the amount of 15,520 shares, (e) Mr. Olson in the amount of 13,286 shares and
(f) Mr. Scheiwe in the amount of 13,286 shares, who could obtain their respective deferred shares within 60 days of March 16, 2021 under certain circumstances.














(4)




Includes 32,803 shares held in the name of the Scheiwe Family Living Trust, under which Mr. Scheiwe is a trustee.














(5)




Based on a Schedule 13G/A filed with the SEC on January 27, 2021 by BlackRock, Inc. According to the filing, the beneficial
owner has indicated that it has sole voting power to vote 10,531,815 shares and sole dispositive power with respect to 10,678,240 shares. These stockholders have indicated that the aggregate amount beneficially owned by each reporting person is
10,678,240 shares.














(6)




Based on a Schedule 13G filed with the SEC on March 5, 2021, by Leon G. Cooperman. According to the filing, the beneficial
owner has indicated that he has sole voting power and sole dispositive power in respect of 5,054,000 shares. Subsequent to the March 16, 2021 record date determination, Mr. Cooperman disposed of 805,000 shares and now holds 4.69% of our common
stock.






















(7)




Based on a Schedule 13D/A filed with the SEC on November 20, 2020 by KKR Wand Investors Corporation (KKR Wand Investors),
beneficial owner of 13,006,776 shares of the Company’s common stock, on behalf of itself and KKR Wand Holdings Corporation (KKR Wand Holdings) beneficial owner of 2,605,270 shares of the Company’s common stock, KKR Group Partnership L.P. (KKR
Group Partnership), KKR Wand Investors L.P. (KKR Wand LP), KKR Wand GP LLC (KKR Wand GP), KKR Fund Holdings L.P. (KKR Fund Holdings LP), KKR Group Holdings Corp. (KKR Group Holdings), KKR & Co. Inc. (KKR & Co.), KKR Management LLC (KKR
Management), Henry R. Kravis (Mr. Kravis), George R. Roberts (Mr. Roberts), Christopher J. Harrington (Mr. Harrington), Jeffrey Livingston (Mr. Livingston) and Simon Greene (Mr. Greene, and collectively with the other persons and entities
listed in this paragraph, the KKR Reporting Persons). On September 21, 2020, Mr. Livingston resigned as a director of KKR Wand Holdings and KKR Wand Investors and does not beneficially own any shares of the Company’s common stock, and on
November 18, 2020, Mr. Greene was appointed as a director of each of KKR Wand Holdings and KKR Wand Investors. According to the Schedule 13D/A, each of Mr. Harrington and Mr. Greene (as the sole directors and holders of voting stock of KKR Wand
Holdings and KKR Wand Investors) may be deemed to be the beneficial owner of the securities owned directly by KKR Wand Holdings and KKR Wand Investors. Messrs. Harrington and Greene are executives of KKR and/or one or more of its affiliates.
KKR Group Partnership, an affiliate of KKR, owns 100% of the economic interest in KKR Wand Holdings and may be deemed to have shared beneficial ownership over the securities held by KKR Wand Holdings. KKR Wand LP owns 100% of the economic
interest in KKR Wand Investors. KKR Wand GP is the general partner of KKR Wand LP and is a wholly owned subsidiary of KKR Group Partnership. KKR Group Partnership may be deemed to have shared beneficial ownership over the securities held by KKR
Wand Holdings and KKR Wand Investors.






KKR Group Holdings (as a general partner of KKR Group Partnership), KKR & Co. (as the sole shareholder of KKR Group Holdings), KKR Management (as the controlling
shareholder of KKR & Co.), and Messrs. Henry R. Kravis and George R. Roberts (as the designated members of KKR Management), may be deemed to have shared beneficial ownership of the securities beneficially owned directly by KKR Wand Holdings
and KKR Wand Investors, and each disclaims beneficial ownership of the securities. Each of Messrs. Joseph Y. Bae, William J. Janetschek, Scott C. Nuttall and David J. Sorkin is a director of KKR Group Holdings, and each of Messrs. Bae,
Janetschek, Kravis, Nuttall, Roberts and Sorkin is an executive officer of KKR Group Holdings and KKR & Co. The address of the principal business office of KKR Wand Holdings, KKR Wand Investors, KKR Wand LP, KKR Wand GP, KKR Group
Partnership, KKR Group Holdings, KKR & Co. Inc., KKR Management, Messrs. Harrington, Kravis, Livingston and Greene is c/o Kohlberg Kravis Roberts & Co. L.P., 9 West 57th Street, Suite 4200, New York, New York 10019. The address of the
principal business office of Mr. Roberts is c/o Kohlberg Kravis Roberts & Co. L.P., 2800 Sand Hill Road, Suite 200, Menlo Park, CA 94025. According to the Schedule 13D/A, the KKR Reporting Persons beneficially own an aggregate of 15,612,046
shares of the Company’s common stock, which represent, in the aggregate, approximately,17% of the outstanding shares of the Company’s common stock, and have shared voting power and shared dispositive power with respect to 15,612,046 shares of
the Company’s common stock. The 15,612,046 shares of the Company’s common stock consist of 1,000,000 shares of the Company’s Series A preferred stock held directly by Wand Holdings convertible into 838,802 shares of the Company’s common stock,
the foregoing being based on 90,622,806 shares of the Company’s common stock outstanding as of March 16, 2021 and assumes that all 838,802 shares underlying the Company’s Series A preferred stock have been converted or exercised, as applicable,
and are outstanding.
































58























OTHER MATTERS









The Board knows of no other matters to be brought before the 2021 Annual Meeting of Stockholders. If matters other
than the ones listed in this proxy statement properly come before the 2021 Annual Meeting of Stockholders or any adjournment or postponement thereof, the persons named in the proxy will vote the shares represented by the proxy according to their
judgment.











STOCKHOLDER PROPOSALS










Stockholder Proxy Proposal Deadline









Pursuant to Rule 14a-8 of the Exchange Act, stockholder proposals will need to be received by us not later than
November 30, 2021, in order to be eligible for inclusion in our proxy statement and form of proxy with respect to the 2022 Annual Meeting of Stockholders. Stockholder proposals must be sent to us at Mr. Cooper Group Inc., 8950 Cypress Waters
Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary.









Stockholder Business – Annual Meeting









Stockholders who wish to introduce an item of business at an annual meeting of stockholders may do so in accordance
with our Bylaw procedures. A stockholder desiring to bring a proper subject of business before the 2022 Annual Meeting of Stockholders, without inclusion of such proposal in the proxy statement, must provide a written notice timely received by us not
sooner than November 30, 2021, but not later than December 30, 2021, at our principal executive offices. Any notice of intent to introduce an item of business at an annual meeting of stockholders must, among other things, contain the name and address
of the stockholder, and a representation that the stockholder is a holder of record and that the stockholder intends to appear in person or by proxy at the meeting. A complete listing of the other requirements the advance notice must meet is found in
Section 2.13 of our Bylaws. A complete copy of our Bylaws may be found on our website at

www.mrcoopergroup.com

or by writing to Mr. Cooper Group Inc., 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary.








The chairman of the annual meeting may refuse to allow the transaction of any business not presented in compliance
with the foregoing procedures.














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GENERAL INFORMATION ABOUT


THE ANNUAL MEETING AND VOTING










What is the purpose of this proxy statement?









The purpose of this proxy statement is to provide information regarding matters to be voted on at our 2021 Annual
Meeting of Stockholders. Additionally, it contains certain information that the SEC and NASDAQ require us to provide to our stockholders. This proxy statement is also the document used by our Board to solicit proxies to be used at the annual meeting.
Proxies are solicited to give all stockholders of record an opportunity to vote on the matters to be presented at the annual meeting, even if they cannot attend the annual meeting.









When and where will the 2021 Annual Meeting of Stockholders be held?









The annual meeting will be held on May 13, 2021 at the Four Points by Sheraton – Dallas/Fort Worth Airport North,
1580 Point West Blvd., Coppell, TX 75019 at 9:00 a.m., central time.









What will be voted on and how many votes are required to elect directors and adopt other
proposals?

















































Proposal








Votes




Required




Election of Directors






Majority of the votes present in person or by proxy entitled to
vote












Say on Pay Vote






Affirmative vote of a majority of Mr. Cooper Group common stock
present in person or by proxy entitled to vote












Ratification of Ernst & Young LLP as our independent auditors
for 2021






Affirmative vote of a majority of Mr. Cooper Group common stock
present in person or by proxy entitled to vote








We also will consider any other business that may properly come before the annual meeting.









Who may vote at the annual meeting?









All stockholders who owned Mr. Cooper Group common stock and Series A Convertible Preferred Stock (collectively,
the Company Stock) at the close of business on the record date of March 16, 2021, may attend and vote at the annual meeting.









Are Proxy Materials available via the Internet?









Under rules adopted by the SEC, we primarily furnish proxy materials to our stockholders on the Internet, rather
than mailing paper copies of the materials (including our 2020 Annual Report to each stockholder. If you received a notice regarding the availability of proxy materials (the Notice) by mail or electronic mail, you will not receive a paper copy of
these proxy materials unless you request one. Instead, the Notice will instruct you on how you may vote your shares. The Notice will also instruct you on how you may access your proxy card to vote over the Internet. If you received a Notice by mail
or electronic mail and would like to receive a paper copy of our proxy materials, free of charge, please follow the instructions included in the Notice.









How do I vote?









You can vote either in person at the annual meeting or by proxy whether or not you attend the annual meeting. To
vote by proxy:














60





















By internet




















Go to the website

www.proxyvote.com

and follow the instructions, 24 hours a day, seven days a week.



















You will need the control number included on your proxy card to vote online.









By telephone




















From a touch-tone telephone, dial 1-800-690-6903 and follow the recorded instructions, 24 hours a day, seven days a week.



















You will need the 16-digit control number included on your proxy card in order to vote by telephone.









By mail




















Mark your selections on the proxy card that accompanies this proxy statement.



















Date and sign your name exactly as it appears on your proxy card.



















Mail the proxy card in the enclosed postage-paid envelope provided to you.








To vote by proxy, you must properly complete and return the enclosed proxy card in a timely manner. If you vote by
proxy, your shares will be voted as you indicate on the card. If you sign your proxy card but do not specify how you want your shares voted, they will be voted as the Board recommends.









Can I change my vote or revoke my proxy?









Yes. Whether you have voted by Internet, telephone or mail, if you are a stockholder of record, you may change your
vote and revoke your proxy by:



















sending a written statement to that effect to our Corporate Secretary, provided such statement is received no later than
May 12, 2021;



















voting again by Internet or telephone at a later time before the closing of those voting facilities at 11:59 p.m., Eastern
time, on May 12, 2021;

















submitting a properly signed proxy card with a later date that is received no later than May 12, 2021; or



















attending the annual meeting, revoking your proxy and voting.








If you hold shares in street name, you may submit new voting instructions by contacting your bank, broker or other
nominee. You may also change your vote or revoke your proxy at the annual meeting if you obtain a signed proxy from the record holder (broker, bank or other nominee) giving you the right to vote the shares.









How many votes do I have?









You will have one vote for each share of Mr. Cooper Group common stock which you owned at the close of business on
March 16, 2021, the record date for the annual meeting. Each share of Series A Convertible Preferred Stock outstanding as of the record date will be entitled to .838802424 votes.














61




















How many shares of Company Stock are eligible to vote at the annual meeting?










At the close of business on March 16, 2021, the record date of the annual meeting, there was a total of 90,622,806
shares of Mr. Cooper Group common stock and 1,000,000 shares of our Series A Convertible Preferred Stock outstanding and eligible to vote at the annual meeting.









How many shares must be present to hold the annual meeting?









The presence, in person or by proxy, of the holders of at least a majority in voting power of the outstanding
shares of the Company Stock, voting together as a single class, entitled to vote at the meeting is necessary to constitute a quorum. Shares are counted as present at the annual meeting if stockholders are present in person or a proxy card has been
properly submitted by or on behalf of stockholders. Votes to abstain, referred to as “abstentions,” and broker non-votes are counted for purposes of determining the presence of a quorum.









What if I hold my shares in a brokerage account?









If you hold your shares in a brokerage account, the shares are said to be held in “street name.” In this case your
broker will send you a package, including a voter instruction card which will ask you how you want your shares to be voted. If you give your broker instructions, the broker will vote your shares as you direct. If you do not give your broker
instructions (these shares are often referred to as broker non-votes) and the proposal involves a “routine” matter, then NASDAQ rules provide brokers with discretionary power to vote your shares. However, if a proposal involves a “non-routine”
matter, then brokers are not permitted to vote your shares without instructions from you.









What is a Broker Non-Vote?









A “broker non-vote” occurs when your broker submits a proxy for the meeting with respect to the ratification of the
appointment of independent registered public accounting firm but does not vote on non-discretionary matters because you did not provide voting instructions on these matters. Please instruct your broker so your vote can be counted.









If I abstain, what happens to my vote?









If you choose to abstain in voting on the Election of Directors, your abstention will have no effect, as the
required vote is calculated through the following calculation: votes FOR divided by the sum of votes FOR plus votes AGAINST.








If you choose to abstain in voting on any other matter, your abstention will be counted as a vote AGAINST the
proposal, as the required vote is calculated through the following calculation: votes FOR divided by the sum of votes FOR plus votes AGAINST plus votes ABSTAINING.









How do I attend the annual meeting?









If you plan to attend the meeting in person, please RSVP via email to

secretary@mrcooper.com

with RSVP as
the subject line no later than 5:00 p.m. central time on May 12, 2021. Admission to the annual meeting is limited to Mr. Cooper Group stockholders or their proxy holders. In order to be admitted to the annual meeting, each stockholder will be asked
to present proof of stock ownership and valid government-issued photo identification, such as a driver’s license. Proof of stock ownership may consist of the proxy card, or if shares are held in the name of a broker, bank or other nominee, an account
statement or letter from the nominee indicating that you beneficially owned shares of Mr. Cooper Group common stock at the close of business on March 16, 2021, the record date for the annual meeting.









Who will pay for the cost of this proxy solicitation?









We will pay the cost of soliciting proxies. Proxies may be solicited on our behalf by directors, officers or
employees (for no additional compensation) in person or by telephone, electronic transmission and facsimile transmission. Brokers and other nominees will be requested to solicit proxies or authorizations from beneficial owners and will be reimbursed
for their reasonable expenses.














62





















How do I obtain more information about Mr. Cooper Group









We file annual, quarterly and current reports, proxy statements and other information with the SEC which is
available on the website maintained by the SEC at

www.sec.gov

. Such information will also be furnished upon written request to Mr. Cooper Group Inc., at 8950 Cypress Waters Boulevard, Coppell, Texas 75019, Attention: Corporate Secretary, and
can also be accessed through our website. We will furnish without charge to each person whose proxy is being solicited, upon oral or written request of any such person, a copy of our Annual Report on Form 10-K for the year ended December 31, 2020, as
filed with the SEC, excluding the exhibits, by first class mail or other equally prompt means within one business day of receipt of such request. Request for copies of such report should be directed to our Corporate Secretary at the above address or
at 469-549-2000.









What is “householding”?









The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements
for proxy materials with respect to two or more stockholders sharing the same address. This process which is commonly referred to as “householding,” potentially provides extra convenience for stockholders and cost savings for companies. We and some
brokers household proxy materials, delivering a single copy of the proxy materials to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Stockholders who participate in
householding will continue to receive separate proxy or voting instruction cards.








Once a stockholder receives notice from his or her broker or us that they will be householding materials to his or
her address, householding will continue until the stockholder revokes the consent. If you are not eligible for householding, but you and other stockholders of record with whom you share an address currently receive multiple copies of the proxy
materials, or if you hold stock in more than one account, and in either case you wish to receive only a single copy of each of these documents for your household, please send your request to Mr. Cooper Group Inc. at 8950 Cypress Waters Boulevard,
Coppell, Texas 75019, Attention: Corporate Secretary. You may also make written or oral requests by contacting us at this address or calling 469-549-2000 if you participate in householding and wish to receive a separate copy of these documents (in
which case we will promptly deliver a separate copy to you), or if, at any time, you no longer wish to participate in householding. You should notify your broker if the shares are held in a brokerage account or us if you hold registered shares. We
can be notified by sending a written request to the above address.














63


































The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

WMIH Corp. director just disposed of 12,701 shares - May 21, 2021

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