Rocket's Parting Gift For Jay Farner: A 491% Raise

CEO Jay Farner is retiring June 1 after nearly three decades with Rocket Companies, and the organization has rewarded him with quite a parting gift:

A nearly 491% raise.

According to the "Notice of The 2023 Annual Meeting and Proxy Statement" Rocket filed on Wednesday with the Securities and Exchange Commission, Farner received the big boost in compensation in 2022 after taking a dramatic cut a year earlier.

For 2022, Farner received a base salary of $800,000 (unchanged from a year earlier), plus a total of $8.66 million in stock awards and $11,957 in other compensation, for a total of $9.5 million. That was a $7.9 million, or 490.5%, raise from 2021, when he received total compensation of $1.6 million.

Farner's pay for last year was about 109 times more than the median salary for Rocket employees of $86,476, according to the filing.

It’s worth noting, however, that Farner’s compensation in 2021 was dramatically lower than what he received in 2020, when the company went public in August. That year, Farner’s compensation totaled $51.7 million — including a $30.5 million bonus, $15.3 million in stock awards, and $5.1 million in stock options.

Farner was not the only top Rocket executive to receive more than a 100% increase in compensation in 2022, which also saw some significant changes in the C-suite:

• Bob Walters, Rocket’s president and chief operating officer, received total compensation of $3.76 million in 2022, a 264% increase from $1.03 million a year earlier;
• Julie Booth, who retired as chief financial officer and treasurer in November 2022, was paid $2.6 million, a 198% increase from $878, 558 in 2021; and 
• Angelo Vitale, the former general counsel and secretary who transitioned into an “of counsel” role in October, received $1.99 million in total compensation in 2022, a 192% increase from $678, 954 in 2021.

Booth was succeeded as CFO and treasurer by Brian Brown, who previously served as chief accounting officer, while Vitale was succeeded by Tina V. John, the company’s previous deputy general counsel and assistant secretary. Brown was paid $3.8 million in 2022, while John was paid $309,621.

The large boosts in compensation came as Rocket Companies posted its first quarterly loss since going public. For the fourth quarter of 2022, the company reported a net loss of $493 million, or 14 cents per diluted share, compared to a net profit of $865 million, or 32 cents per diluted share, in the same quarter a year earlier. 

For all of 2022, Rocket reported net income of $700 million, or 28 cents per share, down 88% from $6.7 billion or $2.32 per diluted share, a year earlier.

The Detroit-based fintech also fell behind its Michigan neighbor, Pontiac-based United Wholesale Mortgage (UWM), which became the top overall mortgage originator in the United States.

The compensation boost also came as Rocket slashed its workforce. According to documents filed with the SEC, Rocket reduced its workforce from 26,000 people as of Dec. 31, 2021, to 18,500 by the end of 2022. That’s a reduction of 7,500 people, or 28.8% of its overall workforce.

Once Farner retires, he will be succeeded by Bill Emerson, vice chairman of Rocket Holdings, who will serve as interim CEO. The company's board of directors said in February that it has begun a search for a permanent CEO and retained an outside company to support its evaluation of internal and external candidates. The board did not identify the outside company assisting with the search.