Activist Urges Redwood Trust Sale, Threatens 2027 Proxy Fight

Activist investor Bradley L. Radoff is pressing Redwood Trust to hire an investment banker and initiate a sale process, threatening a proxy fight and board nominations at the 2027 annual meeting if the board refuses to act.

"We believe that multiple strategic parties would be interested in acquiring the company," said Bradley L. Radoff, activist investor, in an open letter to the board.

Criticism of Refinancing and Executive Pay

In the public letter, Radoff targeted management over recent financial moves, characterizing Redwood Trust's recent refinancing as either shareholder dilution or incompetence. The activist investor also highlighted executive remuneration, pointing out that named executive officers received $21.3 million in total compensation for fiscal year 2025, alongside a three-year average of $24.3 million.

According to SEC Form 4 filings cited in the letter, insider alignment remains low. Radoff noted that the only open market share purchase by an executive officer over the past four years was executed by CFO Brooke Carillo in 2024.

What Is at Stake for Redwood Trust

Pressure on specialty finance and mortgage REIT boards has mounted as activist shareholders increasingly scrutinize operational performance against executive pay structures. If Redwood Trust's board declines to explore strategic alternatives, Radoff intends to nominate an alternative slate of director candidates focused explicitly on a company sale for the 2027 ballot.