Apollo Commercial Real Estate Finance, Inc. (ARI): Key Shareholder Updates from 2025 10-K/A

Summary of Key Points for Investors

• Amended Annual Report Filed: ARI has filed Amendment No. 1 to its Annual Report for the fiscal year ended December 31, 2025, to include information previously omitted from the original filing. This focuses on Part III, including executive compensation, corporate governance, and related party transactions.
• Executive Compensation Structure: ARI’s executives, including CEO Stuart A. Rothstein and CFO Anastasia Mironova, are employees of Apollo Global Management and are compensated primarily by Apollo, not directly by ARI. Compensation includes base salary, bonus, and equity awards, with ARI reimbursing Apollo only for the CFO’s share of compensation.
• Management Agreement and Fees: ARI pays its external manager (Apollo) a base management fee of 1.5% of stockholders’ equity, with a tiered structure that can reduce the fee to 0.75% if ROE is below 7.5%, but reverts permanently to 1.5% if ROE is at or above 7.5% for two consecutive quarters. After certain return milestones, an incentive fee of 20% on core earnings above an 8% return on equity becomes effective.
• Share Ownership Structure: As of April 29, 2026, ARI has 132,849,702 shares outstanding. Key institutional shareholders include BlackRock (15.6%), Qatar Investment Authority (7.9%), and Vanguard (6.0%). All directors and executive officers as a group own less than 1% of shares.
• Corporate Governance and Board Independence: The majority of ARI’s board members are independent according to NYSE standards. The Audit Committee is fully independent and all members are financially literate, with at least one “audit committee financial expert” as defined by the SEC.
• Equity Incentive Plans: ARI maintains equity compensation plans with approximately 2.28 million securities outstanding under these plans and 5.15 million shares available for future issuance as of the reporting date.
• No Material Related Party Transactions: ARI confirms there have been no transactions or proposed transactions since the last fiscal year with related persons (including directors, officers, or shareholders owning more than 5%) involving sums exceeding \$120,000.
• Insider Trading Policy: The board has adopted robust insider trading policies prohibiting speculative trading, short selling, and derivative transactions by directors, executives, and employees of Apollo. Personal loans to executives are prohibited.
• Shareholder Engagement: ARI holds annual “say-on-pay” votes regarding executive compensation, reflecting shareholder input. In 2023, shareholders supported holding these votes annually.
• Compensation Philosophy: Apollo’s compensation for ARI’s named executives is designed to align interests with long-term shareholder value. Equity awards are a significant component, and no options or similar instruments are currently granted, minimizing risk of option-related dilution.

Potentially Price Sensitive Information

• Management Fee Structure & Incentive Fee:
  • The management fee structure includes a permanently higher cash fee (1.5%) if ROE crosses 7.5% for two quarters, and the introduction of a 20% incentive fee on core earnings above 8% return on equity. This change could affect future net income and cash flows, impacting distributions and potentially the share price depending on the company’s performance.
• Significant Institutional Ownership:
  • BlackRock, Qatar Investment Authority, and Vanguard together hold nearly 30% of shares. Any significant change in their holdings could materially impact ARI’s share price due to their substantial influence.
• Equity Incentive Dilution:
  • With over 5 million shares available for future equity compensation issuance, there is potential for dilution. While ARI does not issue options, the use of restricted stock units could still affect future share supply.
• Corporate Governance Strength:
  • The high level of board independence and the presence of a qualified audit committee may reassure investors regarding oversight and risk management, which can support share value.

Detailed Disclosures

1. Amended Filing Purpose and Scope

The 10-K/A was filed to supplement previously omitted Part III disclosures, including director and executive officer information, compensation, security ownership, and governance. This is a standard process when the original annual report references proxy statements not yet filed.

2. Management Compensation and Structure

ARI is externally managed by Apollo Global Management. CEO Stuart A. Rothstein and CFO Anastasia Mironova are employees of Apollo, not ARI. They receive their compensation from Apollo, and ARI reimburses Apollo for the CFO’s share but does not pay direct cash compensation to the CEO. Annual compensation for named executives includes base salary, bonus, and equity awards (mainly restricted stock units), with total compensation for the CEO and CFO disclosed in a summary table.

Key compensation figures for 2025:

• CEO Stuart A. Rothstein: \$1,000,261 total compensation, primarily from equity awards and other compensation (no direct salary or bonus paid by ARI).
• CFO Anastasia Mironova: Compensation is reimbursed to Apollo based on services rendered to ARI.

3. Management Fee and Incentive Structure

ARI pays Apollo a base management fee calculated as a percentage of stockholders’ equity, with a performance-based tier:

• 0.75% per annum if ROE for the quarter is less than 7.5% (payable in shares).
• 1.5% per annum if ROE is 7.5% or above for a quarter (payable in shares, or permanently in cash after two consecutive quarters above 7.5%).
• Incentive Fee: After passing the “ROE Milestone,” Apollo earns 20% of the core earnings above an 8% return on equity, which can lead to higher fees if performance targets are met.

This structure could have a significant effect on ARI’s future profitability, expense ratios, and shareholder returns.

4. Share Ownership and Institutional Holders

As of April 29, 2026, ARI had 132,849,702 shares outstanding. The largest shareholders are:

• BlackRock, Inc.: 20,790,277 shares (15.6%)
• Qatar Investment Authority: 10,493,529 shares (7.9%)
• Vanguard Portfolio Management: 8,023,638 shares (6.0%)

All directors and executive officers as a group own less than 1% of shares, indicating limited insider ownership.

5. Equity Incentive Plans and Potential Dilution

ARI’s equity compensation plans (approved by shareholders) have:

• 2,280,723 securities outstanding under the plans.
• 5,150,383 shares available for future issuance.

No equity compensation plans are outstanding that have not been approved by shareholders. The absence of options or similar instruments suggests limited dilution risk from derivatives.

6. Corporate Governance and Board Independence

The board is majority independent, with a fully independent Audit Committee, all members of which are financially literate. The Audit Committee and the board actively oversee risk management, compensation, and related party transactions. ARI’s governance policies include robust review and approval processes for related party transactions, and annual monitoring of such arrangements.

7. Insider Trading Policy and Anti-Speculation Measures

ARI maintains strict policies prohibiting:

• Directors, executives, and employees from engaging in speculative trading, short selling, or using derivatives (except under equity incentive plans).
• Personal loans to executives or directors, in full compliance with applicable regulations.

The company’s compliance environment is designed to protect against insider trading and conflicts of interest.

8. Shareholder Engagement and Say-on-Pay Policy

ARI conducts annual advisory votes on executive compensation. In 2023, shareholders supported annual votes, and the board has adopted this recommendation. The Compensation Committee oversees equity awards and consults with Apollo on compensation structures.

9. Related Party Transactions

Since the prior fiscal year, ARI has reported no material related party transactions (over \$120,000) involving directors, officers, or significant shareholders.

Conclusion

Investors should note the significant level of institutional ownership, the performance-based management fee structure (with potential future increases in cash outflows to Apollo if performance milestones are met), and the company’s strong governance and compliance policies. Any future changes in institutional holdings, management fee arrangements, or the issuance of additional equity could impact ARI’s share price.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should review the full 10-K/A filing and consult with their financial advisors before making investment decisions. The information herein is based on the company’s SEC filings as of the date indicated and may not reflect subsequent events or changes.

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