Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K/A

Amendment No. 1 to Form 10-K

OR

Commission File No. 1-7797

PHH CORPORATION

(Exact name of registrant as specified in its charter)

856-917-1744

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o  No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities Act.  Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ  No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes þ   No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

(Check one): Large accelerated filer þ   Accelerated filer o  Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes o   No þ

The aggregate market value of our Common stock held by non-affiliates of the registrant as of June 30, 2017 was $639 million.

As of April 18, 2018, 32,557,494 shares of PHH Common stock were outstanding.

Table of Contents

EXPLANATORY NOTE

This Amendment No. 1 (this “Amendment”) on Form 10-K/A is being filed with respect to PHH Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 filed with the Securities and Exchange Commission (the “SEC”) on March 1, 2018 (the “Form 10-K”).  This Amendment is filed solely for the purpose of including the information required by Part III of Form 10-K.

As required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with this Amendment, our Chief Executive Officer and Chief Financial Officer are providing Exchange Act Rule 13a-14(a) certifications as included herein. Accordingly, Item 15(a)(3) and (b) of Part IV has also been amended to reflect the filing of these new certifications.

Except for the changes to Part III and the filing of related certifications in Part IV, Item 15(b), this Amendment makes no changes to the Form 10-K.   For purposes of this Amendment, and in accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we have amended and restated Items 10 through 14 of the Form 10-K in their entirety.  This Amendment does not does not change any previously reported financial results, nor does it reflect events occurring after the filing of the Form 10-K or modify disclosures affected by subsequent events.  Information not affected by this Amendment remains unchanged and reflects the disclosures made at the time the Form 10-K was filed.

Except as expressly indicated or unless the context otherwise requires, the “Company,” “PHH,” “we,” “our” or “us” means PHH Corporation, a Maryland corporation, and its subsidiaries.

TABLE OF CONTENTS

Table of Contents

Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Amendment are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward-looking statements are not based on historical facts but instead represent only our current beliefs regarding future events. All forward-looking statements are, by their nature, subject to risks, uncertainties and other factors. Investors are cautioned not to place undue reliance on these forward-looking statements.  Such statements may be identified by words such as “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.”

You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature.  Actual results, performance or achievements may differ materially from those expressed or implied in forward-looking statements due to a variety of factors, including but not limited to the factors and additional risks listed and discussed in our periodic reports filed with the U.S. Securities and Exchange Commission, including our Form 10-K under the heading “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements”.  The Form 10-K is available in the “Investors-SEC Reports” section of our website at http://www.phh.com and is also available at http://www.sec.gov.

1

Table of Contents

PART III

BOARD OF DIRECTORS

Our Board of Directors (the “Board”) is currently comprised of seven directors. Each director will hold office until our next annual meeting of shareholders and until his or her successor has been duly elected and qualified, or until the director’s earlier resignation, death or removal.

During the past ten years, none of PHH or its current directors has (i) been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or (ii) been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.  In addition, during the past ten years (i) no petition has been filed under federal bankruptcy laws or any state insolvency laws by or against any of our current directors, (ii) no receiver, fiscal agent or similar officer was appointed by a court for the business or property of any of our current directors and (iii) none of our current directors was an executive officer of any business entity or a general partner of any partnership at or within two years before the filing of a petition under the federal bankruptcy laws or any state insolvency laws by or against such entity.  All of the directors of PHH listed below are U.S. citizens.

Our directors as of April 18, 2018, and the ages of such directors at such date, were as follows:

Jane Carlin, age 62, director since September 2012.  Ms. Carlin currently serves as President of Jane Carlin Consulting, LLC and as a director of The Hanover Insurance Group, iShares Inc. and iShares Trust.  Ms. Carlin served as a director of Astoria Financial Corporation and its wholly owned subsidiary, Astoria Bank, from January 2014 until February 2015.  Ms. Carlin previously served as a Managing Director and Global Head of Operational Risk, Business Continuity Planning, Information Security and New Product Approvals of the Morgan Stanley Group from 2006 until 2012. Ms. Carlin also served as Chairperson of the Financial Services Sector Coordinating Counsel for Critical Infrastructure Protection and Homeland Security from 2010 until 2012 and as Vice Chair from 2009 until 2010. From 2003 to 2006, she was with Credit Suisse Group as Managing Director and Global Head of Credit Suisse’s Operational Risk Oversight Department. From 1987 until 2003, Ms. Carlin held a series of progressively responsible positions at the Morgan Stanley Group, including Managing Director, Deputy General Counsel and Head of Legal for Global Sales and Trading.

Committees: Ms. Carlin is the chair of the Corporate Governance Committee and a member of the Audit Committee.

Robert B. Crowl, age 54, President and Chief Executive Officer, since June 2017.  Mr. Crowl served as the Executive Vice President and Chief Financial Officer of the Company from May 3, 2012 until March 29, 2017, at which time he was appointed Executive Vice President and Chief Operating Officer. Mr. Crowl assumed the role of President and Chief Executive Officer of the Company at the 2017 Annual Meeting of Stockholders. Prior to joining the Company, Mr. Crowl served as Executive Vice President and Chief Financial Officer at Sun Bancorp, Inc. and its wholly owned subsidiary, Sun National Bank, since 2010. From 2009 to 2010, Mr. Crowl performed consulting services for small banks and private equity firms through RBC Solutions, LLC. From 1998 to 2009, Mr. Crowl served in various capacities at National City Corporation, including Executive Vice President and Chief Operating Officer of National City Mortgage from 2007 to 2009, Senior Vice President and Corporate Comptroller from 2004 to 2007, and Senior Vice President of Asset/Liability and Securitization Manager from 1998 to 2004. From 1986 to 1998, Mr. Crowl served in various capacities at Crestar Bank.

James O. Egan, age 69, Non-Executive Chairman of the Board; director since March 2009.  Mr. Egan served as a Managing Director of Investcorp International, Inc., an alternative asset management firm specializing in private equity, hedge fund offerings, real estate and technology investments, from 1998 through 2008. Mr. Egan was the partner-in-charge, M&A Practice, U.S. Northeast Region for KPMG LLP from 1997 to 1998 and served as the Senior Vice President and Chief Financial Officer of Riverwood International, Inc. from 1996 to 1997. Mr. Egan began his career with PricewaterhouseCoopers (formerly Coopers & Lybrand) in 1971 and served as partner from 1982 to 1996 and a member of the Board of Partners from 1995 to 1996. Mr. Egan possesses over forty years of business experience involving companies of varying sizes from start-ups to Fortune 500 public companies operating across numerous industries, including twenty-five years of public accounting experience having served as lead audit partner involved in the audits of annual financial statements of numerous public companies. He also has ten years of private equity experience working with portfolio companies in the US and Europe to create shareholder value. Mr. Egan currently serves as a director, chair of the audit committee and member of the nominating and governance committee of New York & Company, Inc.

Committees:  Mr. Egan is a member of the Audit Committee.

2

Table of Contents

James C. Neuhauser, age 59, director since June 2017.  Mr. Neuhauser serves as a senior managing director in the private capital group of Stifel Nicolas & Company’s investment banking practice.  He has also served as a managing member of Turtlerock Capital, LLC, a real estate fund investing in luxury homes in Los Angeles, since 2009.  From 2011 to 2016, Mr. Neuhauser was the Chief Investment Officer at FBR Capital Markets & Co., managing a proprietary investment portfolio that averaged $80 million over the five year period. At FBR Capital Markets & Co., Mr. Neuhauser also served as Head of the Commitment Committee for ten years and Head of Investment Banking for five years. From 1986 to 1993, he was employed by Trident Financial Group, where he provided financial and mergers and acquisitions advisory services to financial institutions. Mr. Neuhauser has been a CFA Charterholder since 1990.  Mr. Neuhauser is a director of FAT Brands, Inc., a multi-brand restaurant franchising company.

Committees:  Mr. Neuhauser is a member of the Audit Committee and the Human Capital and Compensation Committee.

Charles P. Pizzi, age 67, director since January 2012.  Mr. Pizzi was a member of the Board of Directors of the Federal Reserve Bank of Philadelphia from 2006 through 2011 and served as its Chairman from 2010 through 2011. He served as the President and Chief Executive Officer of Tasty Baking Company from 2002 until its merger with Flowers Foods, Inc. in 2011. From 1989 to 2002, Mr. Pizzi was the President and Chief Executive Officer of the Greater Philadelphia Chamber of Commerce. Mr. Pizzi currently serves on the boards of Brandywine Realty Trust, Pennsylvania Real Estate Investment Trust, FS Energy & Power Fund and FS Global Credit Opportunities Fund.

Committees:  Mr. Pizzi is the chair of the Human Capital and Compensation Committee and a member of the Corporate Governance Committee.

Kevin Stein, age 56, director since June 2017.  Mr. Stein is Chief Executive Officer of Resolution Analytica Corp., a buyer of commercial judgments, and an operating adviser of KCK-US, Inc., a private equity firm. Mr. Stein was previously a Managing Director in the Financial Institutions Group of Barclays advising banks, specialty finance companies and financial sponsors until 2016. Prior to joining Barclays in 2011, Mr. Stein was a Partner at FBR Capital Markets & Co. advising banks and specialty finance companies and was Group Head of the Depository Practice. From 1994 to 2004, Mr. Stein was an executive of GreenPoint Financial Corporation, a $25 billion bank holding company based in New York City.  Mr. Stein is a board member of Dime Community Bancshares, Inc., a Brooklyn, New York-based commercial community bank.

Committees:  Mr. Stein is a member of the Corporate Governance Committee and the Human Capital and Compensation Committee.

Carroll R. Wetzel, Jr., age 74, director since January 2010.  Mr. Wetzel previously served as Vice Chairman and lead director at Arch Wireless from 2001 through 2002; as non-executive Chairman of the Board of Directors of Safety Components International from 2000 to 2005; as a director of Laidlaw International, Inc. from 2004 to 2007; as a director of Brink’s Home Security Holdings, Inc. from 2008 to 2010; as a director of The Brink’s Company during 2008; and as director of Exide Technologies, Inc. from 2004 to 2015. Before that, he spent approximately 20 years working in investment banking and corporate finance. From 1988 to 1996, Mr. Wetzel served as head of the Merger and Acquisition Group at Chemical Bank and following its merger with Chase Manhattan Bank, as co-head of the Merger and Acquisition Group.  He also previously served as a corporate finance officer at Dillon Read & Co., Inc. and Smith Barney.

Committees: Mr. Wetzel is the chair of the Audit Committee and a member of the Human Capital and Compensation Committee.

Agreement with EJF

On April 28, 2017, the Company entered into an agreement (the “EJF Agreement”) with EJF Capital LLC, EJF Debt Opportunities Master Fund, L.P. and EJF Debt Opportunities GP, LLC (collectively, “EJF”).   Based on EJF’s amended Schedule 13D filed March 17, 2017, EJF and its affiliates beneficially owned, at the time the EJF Agreement was entered into, an aggregate of approximately 9.9% of the Company’s common stock.  Under the terms of the EJF Agreement, the Company agreed to nominate Mr. Neuhauser and Mr. Stein for election to the Board at the 2017 Annual Stockholders Meeting.   The Company also agreed pursuant to the EJF Agreement to cause each of the Board’s committees to include at least one of Messrs. Neuhauser or Stein during the applicable commitment period.  Under the terms of the EJF Agreement, EJF agreed to vote the shares of the Company’s common stock that it beneficially owned in favor of the Company’s nominees for election at the 2017 Annual Stockholders Meeting.

Director Nominations

Any stockholder may nominate one or more persons for election as one of our directors at the annual meeting of stockholders or at any special meeting of stockholders called for the purpose of electing directors if the stockholder complies with the notice, information and consent provisions contained in our Amended and Restated By-Laws, as amended.

3

Table of Contents

EXECUTIVE OFFICERS

Our executive officers as of April 18, 2018, and the ages of such officers at such date, were as follows:

Robert B. Crowl, age 54, President and Chief Executive Officer since June 2017.  See “Board of Directors” above for Mr. Crowl’s biographical information.

Michael R. Bogansky, age 40, Senior Vice President and Chief Financial Officer since March 2017.  Prior to being appointed Senior Vice President and Chief Financial Officer, Mr. Bogansky served as the Senior Vice President and Controller of the Company since April 4, 2014 and since that time has served, and continues to serve, as the Company’s principal accounting officer.  Mr. Bogansky joined the Company’s subsidiary, PHH Mortgage Corporation (“PHH Mortgage”), in 2003 as Manager, Financial Reporting and has held roles of increasing responsibility in the accounting and finance functions of the Company and its subsidiaries, including serving as Vice President, Financial Reporting of PHH Mortgage from 2009 to 2010, as the Company’s Vice President and Assistant Controller from 2010 to 2012 and as the Company’s Vice President and Controller from to 2012 until 2014.  Prior to joining the Company in 2003, Mr. Bogansky served as a Senior Auditor with Deloitte & Touche LLP, which currently serves as the Company’s independent registered public accounting firm.

Alberino J. Celini, age 55, Senior Vice President, Chief Risk and Compliance Officer since January 2018.  Mr. Celini joined the Company in November 2017 as Senior Vice President, Risk and Compliance.  Prior to joining the Company, Mr. Celini was a Risk Management Consultant with Newbold Advisors LLC and Common Securitizations LLC.  He previously served as Executive Vice President and Chief Risk Officer of Sun National Bank, Vice President, Single Family Regulatory Affairs and Strategy at Freddie Mac, and spent nearly a decade at Ally Bank (formerly GMAC Bank) serving as its founding Chief Financial Officer, Chief Risk Officer and Director of Lending Development. Before joining Ally Bank, Mr. Celini spent 12 years at Citigroup as a Financial Controller and began his career at Arthur Andersen.

Madeline Flanagan, age 59, Senior Vice President and General Counsel since January 2018.  Ms. Flanagan joined PHH Mortgage in 2002 and was appointed its Senior Vice President and General Counsel in 2012. Prior to joining PHH Mortgage, Ms. Flanagan held legal roles at CoreStates Financial Corporation (now part of Wells Fargo) and Philadelphia Savings Fund Society.

Stephen Staid, age 48, Senior Vice President, Servicing since February 2017.  Prior to joining the Company, Mr. Staid served as the President of SEMS, LLC since 2015, where he advised financial services companies on a range of matters related to mortgage origination and servicing and driving operational efficiency. From 2012 to 2015, he served as Senior Vice President and Loan Servicing and Support Operations business executive at Bank of America where he was responsible for the company’s non-default related mortgage practices and a portfolio of over 5 million loans. Mr. Staid previously was Executive Vice President at Nationstar Mortgage; CEO of Saxon Mortgage Services; Managing Director, Servicing – Europe at Lehman Brothers; and Senior Vice President, Default Administration at Litton Loan Servicing LP.

Kathleen Williamson, age 57, Senior Vice President, Chief Human Resources Officer since June 2017.  Prior to joining PHH Mortgage in 2013, Ms. Williamson served as Principal at Williamson Performance Partners, LLC, a human resources consulting firm she founded. From 2002 to 2012, Ms. Williamson held roles of increasing responsibility at Campbell Soup Company, including Director, Human Resources Business Partner and Director, Organizational Change Management.  Prior to that, Ms. Williams led an organizational development team at Cigna Group Insurance and held a series of talent development roles at Continental Insurance (now CNA Insurance).

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors, and any persons that beneficially own more than ten percent of a registered class of our equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. To our knowledge, based solely upon our review of Forms 3 and 4 that have been filed with the SEC and written representations from our executive officers and directors that no Form 5s were required, we believe that all of our executive officers, directors and greater than ten percent beneficial owners complied with all Section 16(a) filing requirements applicable to them with respect to transactions during 2017.

CODE OF BUSINESS ETHICS & CONDUCT

We are committed to conducting business ethically and in compliance with applicable laws, rules and regulations. In furtherance of this commitment, we promote ethical behavior and have adopted a Code of Business Ethics & Conduct (the “Code of Conduct”) that is applicable to all of our directors, officers and employees. The Code of Conduct provides, among other things:

·                  guidelines for our directors, officers and employees with respect to ethical handling of conflicts of interest, including special procedures covering related party transactions between us and members of our management operating committee or directors and their families, examples of the most common types of conflicts of interest that require disclosure (e.g., personal or family relationships with suppliers, vendors or contractors or a directors’ service on other boards of directors) or that should be avoided altogether (e.g., receipt of improper personal benefits, having an

4

Table of Contents

ownership interest in other businesses that may compromise an officer’s loyalty to us, obtaining outside employment with a competitor of ours, etc.);

·                  restrictions on competition between us and our directors, officers and employees and the protection of all our proprietary and personal and confidential information in our possession;

·                  a set of standards to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by us, including, for example, a specific requirement that all financial records must be maintained accurately and in accordance with appropriate controls;

·                  a requirement to comply with all applicable laws, rules and regulations;

·                  restrictions on insider trading by our directors, officers and employees;

·                  guidance providing resources for compliance with the Code of Conduct and promoting prompt internal communication of any suspected violations of the Code of Conduct to the appropriate person or persons identified in the Code of Conduct, including information regarding our toll-free and anonymous Integrity hotline and secure website and our commitment to non-retaliation for reporting suspected violations of the Code of Conduct in good faith; and

·                  disciplinary measures for violations of the Code of Conduct and any other applicable rules and regulations.

The Code of Conduct is available on our corporate website at www.phh.com under the heading “Investors—Corporate Governance—Code of Business Ethics & Conduct.”  We will post any amendments to the Code of Conduct, or waivers of its provisions with respect to our directors or executive officers, to our corporate website under the heading “Investors—Corporate Governance”.  A copy of the Code of Conduct is also available to stockholders upon request, addressed to the Corporate Secretary at 3000 Leadenhall Road, Mt. Laurel, New Jersey, 08054.

CODE OF ETHICS FOR CHIEF EXECUTIVE OFFICER AND SENIOR FINANCIAL OFFICERS

Our Board has also adopted a Code of Ethics for the Chief Executive Officer and Senior Financial Officers (the “Financial Officers Code”) that is applicable to our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer and Controller and other persons performing similar functions (the “Covered Officers”). The Financial Officers Code provides, among other things:

·                  guidelines for our Covered Officers with respect to ethical handling of conflicts of interest, including procedures for handling any actual or apparent conflicts of interests;

·                  a set of standards to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by us, including, for example, a specific prohibition from misrepresenting, omitting or causing others to misrepresent or omit material facts about us in our financial reporting and disclosure process;

·                  a requirement to comply with all applicable laws, rules and regulations;

·                  guidance promoting prompt internal communication of any violations, whether actual or probable, of the Financial Officers Code to the Chief Risk and Compliance Officer; and

·                  disciplinary measures for violations of the Code of Conduct or failure to adhere to the Financial Officers Code.

The Financial Officers Code is available on our corporate website at www.phh.com under the heading “Investors—Corporate Governance—Code of Ethics for CEO and SFOs.” We will post any amendments to the Financial Officers Code, or waivers of its provisions for any of our executive officers, to our corporate website under the heading “Investors—Corporate Governance.” A copy of the Financial Officers Code is also available to stockholders upon request, addressed to the Corporate Secretary at 3000 Leadenhall Road, Mt. Laurel, New Jersey, 08054.

AUDIT COMMITTEE

The Audit Committee assists our Board in the oversight of the integrity of our financial statements, our independent registered public accounting firm’s qualifications and independence, the performance of our independent registered public accounting firm and our internal audit function, and our compliance with legal and regulatory requirements. The Audit Committee also assists our Board in fulfilling its oversight responsibilities with respect to the assessment of our overall capital structure and its impact on the generation of appropriate risk adjusted returns, and with the identification, review and reporting of significant issues with respect to our compliance management system, as well as the existence, operation and effectiveness of our risk management programs, policies and practices.  The Audit Committee is a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Audit Committee also oversees our corporate accounting and reporting practices by:

·                  meeting with our financial management and independent registered public accounting firm to review and discuss our financial statements, quarterly earnings releases and financial data, and internal controls over financial reporting;

5

Table of Contents

·                  appointing and pre-approving all services provided by the independent registered public accounting firm that will audit our financial statements;

·                  reviewing the internal audit plan; and

·                  reviewing the scope, procedures and results of our audits.

The Audit Committee is currently comprised of Ms. Carlin and Messrs. Egan, Neuhauser and Wetzel (Chair).  Our Board has determined that Mr. Egan qualifies as an “audit committee financial expert” within the meaning of applicable SEC rules and is an independent director under our categorical Independence Standards and the NYSE Listing Standards.

6

Table of Contents

COMPENSATION COMMITTEE REPORT

The Human Capital and Compensation Committee reviewed and discussed the Compensation Discussion and Analysis set forth below with management and, based on such review and discussion, recommended to the Board of Directors that the Compensation Discussion and Analysis set forth below be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017.

COMPENSATION DISCUSSION AND ANALYSIS

In this Compensation Discussion and Analysis (“CD&A”) section, we provide an overview of our performance and the business environment during 2017, followed by a description of the components of our executive compensation program for our Named Executive Officers, or “NEOs,” whose compensation is set forth in the Summary Compensation Table and other compensation tables contained in this CD&A. An overview of our executive compensation philosophy and our executive compensation program is included, as well as an explanation of how and why the Human Capital & Compensation Committee (the “HC&CC”) of our Board of Directors (the “Board”) arrived at specific compensation policies and its decisions involving the NEOs.  This CD&A also describes certain management transitions and changes to our executive compensation program in 2018.

EXECUTIVE SUMMARY

TRANSITIONAL BUSINESS ENVIRONMENT IN 2017

Strategic Decisions.  In late 2016 and early 2017, we announced certain strategic actions designed to maximize the opportunity of near-term capital returns to our stockholders, which decisions would have a material impact on our business.  These actions included exiting our Private Label services (“PLS”) business platform, selling our capitalized mortgage servicing rights (“MSRs”) portfolio and monetizing our interests in our PHH Home Loans joint venture.  These actions were decided upon in part because our broad-based process in 2016 to explore a sale of the Company or one or more of our principal businesses did not result in any offers to acquire the whole company.  In early 2017, we announced that after completing these strategic actions, we would fully transition to a capital-light business model comprised of subservicing and portfolio retention services. Throughout 2017, we focused on executing our objectives of maximizing excess cash and transitioning to our new business model, which we named PHH 2.0.  These efforts included closing our asset sale transactions, re-engineering the cost structure of the business and exiting business lines and restructuring operations, while maintaining strategic flexibility.  We communicated several times during 2017 that we expected to continue to incur operating losses as we complete the exits of our PLS business and restructuring activities, and that ultimately achieving profitability would be highly dependent upon reducing our shared services costs and growing our subservicing portfolio and portfolio retention volume to achieve appropriate scale.

Execution of Strategic Actions.  During 2017, we made significant progress on executing our strategic transactions, including: completing the delivery of $661 million of MSRs and advances under our sale agreements with New Residential Mortgage, LLC and Lakeview Loan Servicing LLC and pursuant to ordinary course sales to other third parties; completing the assets sales of the PHH Home Loans joint venture to Guaranteed Rate Affinity, LLC in a series of five closings, in which we recognized a pre-tax gain on sale of $35 million and an additional $34 million from monetizing the residual assets of the joint venture; and achieved, and in certain areas exceeded, our expected progress towards the timely exit of our PLS business and re-engineering of our shared services infrastructure.

Capital Returns and Debt Extinguishment.  These actions allowed us to return $301 million to our stockholders in 2017 through the repurchase of over 21 million shares of our common stock via open market repurchases and a modified Dutch auction tender offer.  We also extinguished $496 million of outstanding principal of unsecured debt for total cash consideration of $524 million, plus accrued interest.

7

Table of Contents

Resolution of Regulatory Matters.  We resolved several legacy regulatory matters in 2017, including through a settlement agreement and consent orders to resolve and close out findings from an examination by a multistate coalition of certain mortgage banking regulators of mortgage loan servicing practices occurring between January 1, 2009 and December 31, 2012, and settlement agreements with the U.S. Department of Justice (“DOJ”) on behalf of the Department of Housing and Urban Development and on behalf of the U.S. Department of Veteran Affairs and the Federal Housing Finance Agency to resolve certain matters regarding legacy mortgage origination and underwriting activities.

Merger Transaction.  The completion of the above-described actions allowed us to maintain strategic flexibility, and on February 27, 2018, we entered into a definitive Agreement and Plan of Merger with Ocwen Financial Corporation (“Ocwen”), and POMS Corp (“MergerSub”) pursuant to which, upon and subject to the closing of the transaction, all of our outstanding common stock will be acquired by Ocwen in a merger of MergerSub with and into PHH with PHH surviving in an all cash transaction valued at approximately $360 million, or $11.00 per share on a fully-diluted basis.

For a full discussion and overview of PHH’s business during 2017 and the anticipated transactions please refer to the Form 10-K.

NAMED EXECUTIVE OFFICERS

·      Robert B. Crowl, President and Chief Executive Officer, PHH Corporation and PHH Mortgage

·      Glen A. Messina, Former President and Chief Executive Officer, PHH Corporation and PHH Mortgage

·      Michael R. Bogansky, Senior Vice President and Chief Financial Officer, PHH Corporation

·      William F. Brown, Former Senior Vice President, General Counsel and Secretary, PHH Corporation

·      Stephen Staid, Senior Vice President, Servicing, PHH Corporation and PHH Mortgage

·      Leith W. Kaplan, Former Senior Vice President and Chief Risk and Compliance Officer, PHH Corporation

2017 EXECUTIVE TRANSITIONS

As part of our initiatives to re-engineer our cost structure to align with a significantly smaller company with a more narrowly-focused business model, the Board and senior management implemented a succession plan for senior management during 2017.

On March 30, 2017, we announced that our prior President and Chief Executive Officer, Mr. Messina, would step down from such position effective June 28, 2017, at which time Mr. Crowl would assume the role.  At the time of such announcement, Mr. Crowl, who had served as our Chief Financial Officer, was appointed as our Chief Operating Officer pending his appointment as Chief Executive Officer and entered into an employment agreement with us that, as subsequently amended, will remain in effect, unless terminated sooner by either party, through December 31, 2018.

Effective March 29, 2017, Mr. Bogansky was appointed to the role of Senior Vice President and Chief Financial Officer, assuming the position previously held by Mr. Crowl.  At the same time, Mr. Bogansky entered into an employment agreement with us that, as subsequently amended, will remain in effect, unless terminated sooner by either party, through December 31, 2018.

There were several other senior management transitions effected in 2017, including Mr. Staid replacing our prior Senior Vice President, Servicing effective at the end of March 2017 and a transition in the Chief Human Resources Officer effective at the end of June 2017.  Furthermore, Mr. Brown and Mr. Kaplan stepped down from their roles as Senior Vice President, General Counsel and Secretary and Senior Vice President and Chief Risk and Compliance Officer, respectively, effective December 31, 2017 and their replacements were appointed effective January 1, 2018.

In establishing Mr. Staid’s base salary and incentive compensation targets in connection with this hiring in February 2017, the HC&CC considered his qualifications and experience and market compensation data relative to his position.  Additionally, in determining the appropriate level of compensation, the HC&CC reviewed Mr. Staid’s total target compensation as compared to the existing executive management team, including other NEOs.  Furthermore, since Mr. Staid is not included in our Tier I Severance Plan (amended and restated effective May 19, 2016, the “Tier I Plan”) and given his critical importance in transitioning the servicing operations towards a subservicing-focused model, the HC&CC approved a $232,875 cash retention award that was granted to Mr. Staid (representing approximately 19% of his 2018 targeted compensation) on December 11, 2017 and which will vest in full on December 31, 2018 subject to his continued employment or prior termination without cause.

As a result of the above-described management transitions to align with the more narrowly-focused business model, the total annualized targeted compensation expense for the positions held by our 2017 NEOs was reduced by nearly $4.3 million, or 44%, for 2018 as compared to that in effect as of January 1, 2017, as follows:

8

Table of Contents

(1)   Reflects the 2017 annualized base salary and annualized incentive compensation target of the individual holding the applicable position, and in his or her capacity as such, on January 1, 2017.

(2)   Reflects the 2018 annualized base salary and annualized incentive compensation target, including retention awards, of the individual holding the applicable position, and in his or her capacity as such, on January 1, 2018.

2017 EXECUTIVE COMPENSATION SUMMARY

As discussed in “Transitional Business Environment in 2017” above, the majority of management’s time and resources in 2017 were devoted to re-engineering our cost structure, transitioning the business model and maximizing excess cash.  This transitional business environment resulted in the HC&CC tailoring our incentive compensation program design in a manner deemed necessary to ensure the continuity of the talent needed for a successful execution of our strategic plans.  Further, stockholder feedback regarding the importance of maximizing the opportunity for near-term capital returns to stockholders was continually in the forefront of our Board’s decision-making processes.  Thus, in light of the ongoing restructuring and transition of the business model and expected impact of those undertakings on near-term profitability, the HC&CC implemented an incentive compensation program designed to incentivize management to execute on initiatives that were aligned with actions critical to maximize stockholder value and maintain strategic flexibility – most notably, generating excess cash available for distribution to stockholders, efficiently winding down the PLS business, achieving cost reduction targets and achieving subservicing unit growth.

Management Incentive Plan.  In March 2017 the HC&CC approved the performance objectives used to determine funding for the 2017 management incentive plan (the “MIP”).  Overall, company-based performance objectives accounted for 75% of the weighting, with individual performance criteria accounting for the remaining 25%.   As detailed below, the MIP opportunity for each NEO was designed to include company-based performance objectives specifically applicable to such NEO’s job function.  These performance objectives consisted of, among other items, targets for: the generation of excess cash available for distribution to stockholders; subservicing unit growth; recapture rates in the Portfolio Retention business; executing on the MSR sales, PHH Home Loans asset sales and PLS wind-down; and cost reduction initiatives.  Particularly, the HC&CC established a threshold, target and maximum achievement level and corresponding funding percentages for each goal, with target levels established as a range +/-5% of the levels contained in the Board-approved 2017 business plan.

Cash Performance Incentive Award.  Also in March 2017, consistent with our publicly-announced intent to distribute excess cash to stockholders, the Board approved a new 2017-2018 cash performance incentive award program (the “CPIA”) in lieu of a 2017 grant under the equity-based long-term incentive program (the “LTIP”).  Particularly, the HC&CC determined the ongoing business transformation warranted a change from a typical equity-based LTIP award to an incentive award that was more aligned with our objective, and stockholders’ desire, to maximize the opportunity for near-term return of capital to stockholders.  In deviating from the long-term equity incentive award program, the CPIA instead provided NEOs with a cash-based award payable based upon the extent to which certain levels of excess cash are available for distribution to our stockholders on December 31, 2017.

Contractual Arrangements.  In light of the numerous executive transitions detailed above and the critical importance of ensuring the continuity of talent deemed necessary for a successful execution of our strategic plans, we entered into various contractual arrangements with our NEOs during 2017, providing certain incentives to our new or continuing NEOs and memorializing termination-related benefits to our exiting NEOs, including: in the case of Mssrs. Crowl  and Bogansky, employment agreements; in the case of Mssrs. Messina, Brown and Kaplan, severance letter agreements and separation and general release agreements; and in the case of Mr. Staid, a cash retention award.  The terms of these arrangements are described in greater detail later in this CD&A.

Non-Vesting of Performance-Based Long-Term Incentive Awards.  In 2017, the measurement periods closed for certain performance-based restricted stock units (“PRSUs”) previously granted to certain of our NEOs.  No PRSUs granted to NEOs vested in 2017, as the related awards required us to achieve certain total shareholder return (“TSR”) targets that were not met.   As a result, and as detailed further below, PRSUs with an aggregate grant date fair value of approximately $2.1 million did not vest in 2017, of which approximately $1.86 million had related to awards granted to Mr. Messina, our former President and CEO.  Additionally, PRSUs granted to Mr. Messina in 2016 with a grant date fair market value of $2.46 million are subject to reduction to the extent to which we do not deliver a 22.89% TSR (and are at risk entirely if we do not deliver positive TSR) over its May 19, 2016 starting point.

2018 EXECUTIVE COMPENSATION SUMMARY

Similar to 2017, in early 2018 the Board approved a cash performance incentive award (the “2018 CPIA”) in lieu of the typical equity-based LTIP award.  NEOs can earn payments under this award by timely closing our PLS originations pipeline and satisfying

9

Table of Contents

certain enumerated levels of available cash and net worth in 2018.  Furthermore, each NEO was provided with a time-vested cash retention award.  A NEO must remain employed through December 31, 2018 in order to receive payment under either award (to the extent earned in the case of the 2018 CPIA); provided that, subject to achievement of the applicable performance goals in the case of the 2018 CPIA, award recipients would be entitled to receive full vesting of the awards if terminated without cause, or in the event of death or disability, before December 31, 2018.  Upon a change in control, the performance metrics of the 2018 CPIA are deemed met.

The Board also approved in early 2018 the performance objectives for the awards granted pursuant to the 2018 Management Incentive Plan (the “2018 MIP”), of which 50% of the target award is directly tied to individual performance goals and the remaining 50% to financial, operational and strategic objectives aligned to applicable operating segment performance as compared to the Board-approved 2018 business plan.  The increase from 2017 to 2018 in the portion of the MIP award attributable to individual performance reflects the decision to give NEOs greater individual control over the achievement of incentive award targets given the uncertainty associated with establishing company-performance based metrics at a time when we were in discussions regarding our strategic direction.  In the event of a change in control, the MIP performance metrics are deemed met at target level.  The 2018 MIP award vests on a pro rata basis in the event of a termination without cause or a separation from service due to death or disability prior to the certification of the performance goals under the plan.

The targets under the 2018 CPIA, the retention award and the 2018 MIP award described herein are all reflected in the 2018 Annualized Base Salary and Incentive Target amounts presented in the “2017 Executive Transitions” discussion above.   More particularly, the aggregate target amount of the above-described 2018 CPIA, retention awards and 2018 MIP award for our current NEOs is 51% less than the aggregate annualized target amount of the CPIA and MIP for the corresponding officer positions as of January 1, 2017.

STOCKHOLDER OUTREACH AND CONSIDERATION OF 2017 SAY-ON-PAY VOTE

The HC&CC believed it would be beneficial to reach out to a number of our stockholders to better understand how we might increase stockholder satisfaction with our executive compensation program.  We thus increased our outreach efforts and proactively invited several of our institutional stockholders to engage with us on corporate governance, executive compensation, and other topics of interest to them.  In addition, following the 2017 Annual Stockholders meeting, the HC&CC refreshed its composition by appointing a new chairman and also appointing two newly-elected directors to serve on the committee.

In particular, we reached out to institutional investors and invited them to express any questions and concerns regarding our corporate governance and executive compensation practices.  These efforts included our largest institutional stockholders that we believed had voted “no” on our advisory Say-on-Pay proposal at our 2017 Annual Stockholders Meeting.  Together with our Investor Relations team, in early 2018 Mr. Pizzi, as chair of the HC&CC, and Mr. Egan, as our Non-Executive Chairman of the Board, participated in discussions with stockholders representing approximately 57% of our issued and outstanding common stock.

During the course of these discussions, many of the stockholders with whom we spoke informed us of their approach to the 2017 Say on Pay vote and how they evaluate the effectiveness of executive compensation and corporate governance practices.  While certain stockholders indicated a desire to see 2018 incentive-based compensation more directly tied to TSR, the HC&CC felt the structure described in “2018 Executive Compensation Summary” above was more appropriate given the uncertainty in our strategic direction at the time of compensation plan design. Stockholders also expressed appreciation for our unique circumstances and encouraged us to continue to provide maximum transparency in our CD&A regarding our philosophy on executive compensation.  Many of these stockholders also advised on specific areas in which they would like to see further discussion and disclosure. As a result of this feedback from our stockholders, we included in this CD&A: details of how our approach to executive compensation, including the objectives in our incentive programs, changed for 2018 in connection with the transition in both the business generally and in our executive management; further transparency on our peer benchmarking process; and further detailed disclosure regarding the extent to which the performance criteria with respect to performance-based compensation of our CEO were not achieved.

10

Table of Contents

COMPENSATION PHILOSOPHY AND STRUCTURE

Our total rewards philosophy is to pay for performance, and is intended to align our compensation opportunities with stockholder value creation. We structure our compensation to deliver on our philosophy as follows:

·                    Pay For Performance: More than half of our NEOs’ total direct compensation opportunity is in the form of variable pay linked to business and individual performance in the form of annual incentives.  Towards that end, we take a rigorous approach in establishing and reviewing performance objectives and related compensation to ensure we are operating within our risk framework, and that appropriate controls are in place to monitor and assess performance. At the beginning of the year, the HC&CC reviews the proposed performance objectives for our NEOs to ensure they are appropriate and align with short and long-term objectives, including those contained in the Board-approved business plan. After the end of the year, the HC&CC assesses the performance of the NEOs and the Company against the pre-established performance objectives to determine each NEO’s final performance achievement

·                    Perspectives of Key External Stakeholders: The HC&CC considers a number of perspectives to ensure our NEO compensation program continues to be market competitive, tax efficient and generally consistent with best practices, while remaining aligned with stockholder interests. The HC&CC carefully considers the opinions provided by ISS and Glass Lewis in response to our annual Advisory “Say on Pay” recommendation. In addition, as discussed in detail above, following the Say on Pay vote at our 2017 Annual Stockholders Meeting, the chair of the HC&CC and our Non-Executive Chairman of the Board spoke with several of our institutional stockholders to better understand how we might increase stockholder satisfaction with our executive compensation program.  The HC&CC believes that it is sound governance practice to consider the information gleaned from this engagement with stockholders and the input of stockholder advisory groups when formulating the design of our executive compensation programs.

·                    Clawback Features: All of our outstanding LTIP awards granted to NEOs, as well as the CPIA award, contain provisions permitting us to recoup payments under the award if the NEO violates any non-compete, non-solicit or other restrictive covenant agreement or, within three years of the grant date of the award, is terminated for cause, engages in conduct that causes material financial or reputational harm to us, provides materially inaccurate information related to publicly reported financial statements, improperly or with gross negligence fails to assess or report relevant material risks or violates our Code of Business Ethics & Conduct.

·                    Peer Benchmarking: The HC&CC used the following group of 19 publicly traded companies as the peer group (“2017 Peer Group”) to inform 2017 compensation decisions:

This 2017 Peer Group was revised from the prior year to better represent PHH’s anticipated operating scale and business model comprised of subservicing and portfolio retention services. Compared to our peer group, as of December 31, 2017 we ranked in the 46th percentile for revenue, the 40th percentile for market capitalization and the 50th percentile for number of employees.

Together with peer group benchmarking data, the HC&CC considers information and recommendations provided by its independent compensation consultant, Frederic W. Cook & Co., Inc. (“FW Cook”), and examines market compensation data from independent compensation surveys, including Mercer and McLagan, to ensure that compensation decisions are based on information representative of the type of companies with which we compete for key talent. In particular, the HC&CC evaluates base salary, incentives and actual and target total compensation levels against peer group and other applicable data and uses that peer group data, together with its own views on the performance of each NEO, his or her criticality to the Company and retention risk to inform individual NEO compensation decisions. This evaluation includes the median and percentile ranges for each compensation component and for all compensation in the aggregate.

We also use the peer group to benchmark the portion of NEO pay that is at-risk compared to comparable NEO positions in other companies in our peer group. As shown in the chart below, the target mix of pay for our NEOs in 2017 demonstrates our compensation programs are designed to emphasize variable compensation to a similar degree as those of our peer group.  Our lack of long-term incentive pay in the table below reflects the previously-mentioned transition from LTIP

11

Table of Contents

awards to the 2017 CPIA, which was designed to incentivize management to maximize the opportunity for near-term capital returns to stockholders.

·                    Annual Review of Compensation Components: The HC&CC annually examines each component of pay to ensure it remains relevant and appropriate.

·              2017 Base Salary. Base salary is the principal fixed component of the total direct compensation of our NEOs, and is determined by considering the relative importance of the position, the competitive marketplace and peer group compensation, and the individual’s performance and overall contributions.  In 2017, NEO base salaries were increased only for Mr. Crowl and Mr. Bogansky who assumed larger roles with greater accountability in response to executive management transitions.

·              2017 MIP. The annual MIP opportunity, including the target and maximum payout levels, is reviewed and approved by the HC&CC and includes an assessment of the scope and impact of each NEO’s position. The NEO’s total cash opportunity is also compared against peer group and other relevant market data. With the exception of Mr. Crowl and Mr. Bogansky, who assumed the roles of CEO and CFO, respectively, in 2017, MIP target opportunities were unchanged for NEOs in 2017.

·              2017 CPIA. In March 2017, the HC&CC replaced the annual LTIP with the CPIA, which was tied to the generation of certain levels of excess cash as of December 31, 2017.  The amount of cash available to be distributed to stockholders was dependent on management’s execution on a number of complex objectives, including completing multiple asset sales over 14 separate transactions, winding-down our PLS originations business, reducing our shared services infrastructure costs and operationalizing our new business model. In determining each NEO’s opportunity, the HC&CC examined numerous variables including retention concerns, business needs, and the NEO’s performance during the prior year, as well as the total direct compensation position compared to similar opportunities in the market peer group. Selection for an award was also determined by the HC&CC’s assessment of the NEO’s criticality to, and accountability for, realizing target levels of excess cash.

·              Aligning Target Compensation to Scale and Business Model: As discussed in detail in “2017 Executive Transitions” above, as the senior management transition plan was implemented throughout 2017, executive compensation was reduced to levels appropriate for our operating scale, informed by market and peer group data.

12

Table of Contents

KEY GOVERNANCE CONSIDERATIONS IN OUR EXECUTIVE COMPENSATION PROGRAMS

13

Table of Contents

PARTIES INVOLVED IN THE CORPORATE GOVERNANCE OF OUR EXECUTIVE COMPENSATION PROGRAMS

The governance of our executive compensation programs generally occurs through interaction of three groups: the HC&CC, management and the HC&CC’s independent compensation consultant, FW Cook. In 2017, on occasion and as appropriate, the HC&CC enlisted the advice of Latham & Watkins LLP, independent counsel to the Board, and engaged Bryan Cave LLP, independent counsel specializing in executive and non-employee director compensation matters.

ROLE OF THE HC&CC

The HC&CC, consisting of four independent directors, is responsible for overseeing the development and approval of our compensation and benefits policies and programs, including all aspects of our executive compensation program. Among its duties, the HC&CC formulates recommendations to the Board for CEO compensation, and reviews and approves all compensation recommendations for the other NEOs. The HC&CC’s review for NEOs also includes:

·                                            approval of corporate incentive goals and objectives relevant to compensation;

·                                            evaluation of individual performance results based on these goals and objectives;

·                                            evaluation of the market competitiveness of each NEO’s total compensation; and

·                                            approval of any changes to compensation, including, but not limited to, base salary, incentive award opportunities, severance payments and retention programs.

ROLE OF MANAGEMENT

Our CEO, in consultation with the Chief Human Resources Officer, makes recommendations to the HC&CC as it relates to the compensation of NEOs (other than himself and herself). Our CEO provides an annual performance self-assessment to the HC&CC, but otherwise is not involved in deliberations relating to his own compensation and abstains from any related Board action.

ROLE OF INDEPENDENT COMPENSATION CONSULTANT

The primary role of FW Cook is to assist the HC&CC and the Board with the evaluation of our executive compensation programs, both as to compensation levels and design. FW Cook serves as the independent compensation consultant to the HC&CC and does not provide any other services to PHH. During 2017, FW Cook performed a number of services for the HC&CC, including reviewing and providing guidance on:

·                    ISS and Glass-Lewis reports relating to the 2017 Proxy Statement;

·                    design of the NEO compensation program, including the 2017 and 2018 MIP and CPIA awards;

·                    market competitiveness of the 2017 and 2018 compensation opportunities for our NEOs;

·                    our peer group for purposes of informing compensation decisions;

·                    the Board’s compensation program, including the market competitiveness thereof;

·                    the HC&CC charter; and

·                    providing advice concerning stockholder outreach and inquiries regarding our executive compensation program.

BASE SALARIES

Base salaries are intended to provide a level of cash compensation that is competitive and appropriate in relation to the responsibilities of the executive’s position. The HC&CC adjusted the salaries of Mssrs. Crowl and Bogansky in March 2017 in recognition of their promotions to Chief Operating Officer (and eventually Chief Executive Officer) and Chief Financial Officer, respectively. Current base salaries represent relative market competitive positioning, experience, tenure, performance and contributions to our success.

14

Table of Contents

(1)    Mr. Crowl’s salary increase was effective with his promotion to Executive Vice President and Chief Operating Officer.  His salary did not increase further upon becoming CEO.

(2)    Mr. Messina resigned as our President and Chief Executive Officer after the June 28, 2017 Annual Meeting.

(3)    Mr. Bogansky’s salary increase was effective with his promotion to Senior Vice President and Chief Financial Officer.

(4)    Mr. Staid was hired February 20, 2017 as Senior Vice President, Servicing.

2017 MANAGEMENT INCENTIVE PLAN

The MIP provides NEOs with annual incentive compensation for the achievement of strategic, financial and operational performance objectives consistent with the Board-approved business plan, as well as for meeting certain individual performance objectives approved in advance by the HC&CC. 2017 MIP targets for NEOs were set at a level competitive to the market and appropriate for the executive’s role in achieving the performance goals. Due to the increase in base salaries for Mr. Crowl and Mr. Bogansky effective March 29, 2017, in recognition of their expanded accountabilities as Chief Operating Officer (and eventually Chief Executive Officer) and Chief Financial Officer, respectively, the HC&CC increased their MIP targets. Additionally, Mr. Messina’s MIP target was pro-rated based on the duration of his employment during 2017.

Our NEOs’ 2017 MIP awards were structured to be qualified performance-based compensation for purposes of preserving tax deductibility under Section 162(m) of the Internal Revenue Code (“Section 162(m)”). The awards contained a Section 162(m) “umbrella” performance goal of tangible book value per basic share on December 31, 2017 of at least $9.00, excluding the impact of distributions to stockholders.  This goal was set in March 2017 upon giving consideration to, among other things, forecasted losses, planned restructuring activities and capital distribution plans for 2017.  If the goal was not met, the NEOs would not be eligible for any payment under the 2017 MIP.  The Section 162(m) performance goal was achieved in that our tangible book value per basic share on December 31, 2017 was $16.99.

Each of our NEOs would become eligible to receive payment of up to 150% of the 2017 MIP target upon achievement of the Section 162(m) performance goal, which award amount would then be determined by the HC&CC after its exercise of negative discretion based on its evaluation of Company and individual NEO performance against several pre-established financial, operational and strategic objectives, as described in detail below. Consistent with historical practice, meeting the maximum prescribed achievement levels could result in a MIP award of up to 150% of the target amount.  The 150% maximum funding that could become payable based on the achievement of the Section 162(m) performance metric was designed to give the HC&CC discretion to reward NEOs for extraordinary individual performance while preserving tax deductibility under Section 162(m).

In March 2017, the HC&CC approved the performance objectives used to determine funding for the MIP.  Overall, company-based performance objectives accounted for 75% of the weighting, with individual performance criteria accounting for the remaining 25%.   In light of the strategic transactions and restructuring activities being taken across the business in 2017, the MIP opportunity for each NEO was designed to include company-based performance objectives specifically applicable to such NEO’s job function.  Particularly, the HC&CC established a threshold, target and maximum achievement level and corresponding funding percentages for each goal, with target levels established as a range +/-5% of the levels contained in the Board-approved 2017 business plan.  Payout percentage for a level of achievement between threshold and target, and between target and maximum, would be based on straight-line interpolation.

The company-based objectives included 25% weighting tied to generating excess cash available for distribution to stockholders and 50% weighting tied to financial and operational objectives related to the applicable NEO’s area of accountability and scope of influence, as follows:

·            Mssrs. Crowl and Messina’s operational objectives were evenly distributed across the goals in each of the four operating segments: Subservicing; Portfolio Retention; Discontinued Operations; and Enabling Functions.

·            Mssrs. Bogansky, Brown and Kaplan’s 50% weight was split 25% towards the achievement of cost management goals within their functions of Finance, Legal and Risk & Compliance, respectively, and 25% evenly distributed over the goals in the remaining three segments.

·          Mr. Staid’s 50% weight was evenly distributed between two Subservicing segment goals and the metric measuring Discontinued Operations direct operating margin associated only with the wind-down of the MSR.

Set forth below are the company-based financial, strategic and operational objectives and related weights that determine 75% of each NEO’s MIP opportunity, as well as the performance results and funding levels (shown as the achieved payout percentage of target weight).

15

Table of Contents

2017 MANAGEMENT INCENTIVE PLAN COMPANY PERFORMANCE OBJECTIVES AND FUNDING

*Adjusted for previously-disclosed notable and one-time items contemplated under the 2017 business plan; namely, restructuring costs, debt extinguishment and other costs related to the restructuring of our capital structure and business process re-engineering investments.

16

Table of Contents

The following table details the specific achievement objectives applicable to each company-based performance metric:

*As described in more detail in table above and discussion below.

Corporate Performance Criteria.  Twenty five percent (25%) of all NEOs’ 2017 MIP targets was dependent upon the amount of excess cash available for distribution to stockholders as of December 31, 2017. In 2018, the HC&CC certified that excess cash available as of December 31, 2017 was 115.1% of target.  The target was generally arrived at by calculating expected proceeds from our strategic asset sales (i.e., MSRs and assets of PHH Home Loans) and subtracting the planned costs of our wind-down and restructuring actions, including amounts paid to reduce our unsecured debt, while the achieved amount of excess cash was determined by calculating the actual proceeds and costs and accounting for distributions to stockholders during 2017.

Subservicing.  This segment included two goals: ending units of loans serviced on December 31, 2017 and direct operating margin versus the 2017 business plan.  Servicing unit volume was below threshold, resulting in no funding for that metric; whereas the direct operating margin goal exceeded target at 103.6%.

Portfolio Retention.  This segment included two goals: recapture rate (defined as portfolio closings units divided by total servicing portfolio payoffs) and direct operating margin versus the 2017 business plan.  Neither goal was met; therefore, funding was not provided for this segment.

Discontinued Operations.  This segment required meeting certain direct operating margin goals for our discontinued channels, and the execution of our MSR sales and closing the sale of PHH Home Loans, LLC to Guaranteed Rate Affinity, as defined below:

·      MSR Sales: Execute the MSR and advance sales with Lakeview Loan Servicing, LLC by September 30, 2017 and with New Residential Mortgage, LLC by December 31, 2017.

·      Joint Venture Sale: Complete the successful execution of all asset sale installments by December 31, 2017.

17

Table of Contents

Substantially all of the MSR sales were executed on time and we successfully completed the fifth and final sale of the assets of PHH Home Loans on December 18, 2017. These achievements warranted funding at 100% of target for that objective.

With regard to the Direct Operating Margin objective for our Discontinued Operations segment, combined results for the wind-down of our PLS, Correspondent Lending, MSR and Real Estate operations were below target because certain operating losses we expected to incur in 2018 were incurred in 2017 as a result of our ability to accelerate client exits from the PLS platform. The HC&CC approved funding of this metric at 98.5%, however, because this acceleration of PLS client exits will have the overall impact of reducing the cost to exit our PLS operations.

Mr. Staid had direct accountability only for the direct operating margin associated with the transition of our servicing portfolio away from MSR ownership and to subservicing units, results of which were above target and warranted funding of 139% of the goal weight.

Enabling Functions. The goals for this segment were based on meeting Shared Services cost and 4th quarter expense targets in the 2017 business plan.  Shared Services costs consist of overhead functions recognized within both our mortgage operations and centralized corporate platform to provide general and administrative functions to our reportable segments. These Shared Services include support associated with information technology, enterprise risk management, mortgage operations quality control and fulfillment support services, human resources, legal and accounting and finance, among other functions. The costs associated with these shared functions, in addition to the cost of managing the overall corporate function, are generally allocated to our reportable segments based on defined allocation rates for each function, as estimated based upon the actual and estimated usage by function or expense category.

As outlined above, NEO goals and targets varied based on their areas of accountability. Mssrs. Crowl and Messina were accountable for all of Shared Services, whereas Mssrs. Bogansky, Brown and Kaplan’s cost management goals were tied to their specific functions of Finance, Legal and Risk & Compliance, respectively. Cost management targets for both goals in each function, as well as all of Shared Services, were met or exceeded, resulting in funding at target or between target and maximum.

Individual Performance Objectives. The remaining 25% of NEOs’ 2017 MIP award opportunities were attributable to each NEO’s leadership competencies and performance against their individual objectives for 2017. In February 2018, the HC&CC reviewed each NEO’s full year performance to determine each NEO’s 2017 MIP payment attributable to the individual performance metrics and, together with the achievement of the Company performance metrics, the total 2017 MIP award.  As a result of this review, each NEO was awarded 100% of the funding with respect to the individual performance component of the MIP.  Summarized below is a description of the factors that determined the individual performance component of the MIP award for each NEO.

·        In approving Mr. Crowl’s MIP payment, the Board acknowledged the consistently strong leadership Mr. Crowl exhibited during the transition to the CEO role and thereafter, his strong performance in driving organizational restructuring changes, his role in improving governance, audit, business continuity, human capital and other initiatives relating to our information technology organization and systems, and his leadership in connection with the exploration of our strategic alternatives.

·        In approving funding for Mr. Messina’s individual performance goals, the Board noted that Mr. Messina ensured that the project plans and oversight framework was in place to execute the asset sales transactions and to implement the planned business restructuring and human capital actions necessary for PHH 2.0, assisted in resolution of legacy legal and regulatory matters and commenced actions for the capital return program.

·        Mr. Bogansky’s award recognized his critical role with regard to the negotiation and closing of various asset sale transactions including contributions towards executing the MSR sales, proactive and effective actions taken towards achieving cost-savings targets, including the development of tax planning strategies (particularly those relating to tax law changes occurring in late 2017), his contributions in our exploration of strategic alternatives and his role in generating over $40 million in proceeds by directing the initiative to sell non-core loans and REO properties.

·        Mr. Brown’s award recognized his role in providing outstanding legal support to all business units and the Board in considering strategic alternatives, negotiating and closing various assets sales, implementing wind down activities, and negotiating and overseeing the FHA and MMC regulatory settlements, as well as his contributions in the improvement of our governance and other initiatives relating to our information technology organization and systems and his leadership in  reorganizing the legal department to meet anticipated future business needs.

·        Mr. Staid’s award recognized his subject matter expertise which resulted in: improved servicing operational results in various areas; increased lien release revenue; reduced corporate advances through improved processes which resulted in significant cost and interest expense savings; and reduced insurance tracking costs and loss draft recovery cost.  He also demonstrated strong leadership through upgrading senior leadership within the servicing business and effectively managing performance.

·        Mr. Kaplan’s award recognized Mr. Kaplan’s efforts in working closely with our business units to resolve legacy loan level issues related to the sale of our Ginnie Mae assets, restructuring the Risk and Compliance unit to support the future organization, achieving cost targets, building the net present value model for the sale of MSR to New Residential and his

18

Table of Contents

leadership in improving governance, business continuity and other initiatives relating to our information technology organization and systems.

In summary, in early 2018, the HC&CC and, with respect to our CEOs, the Board, approved the following MIP payments for 2017 performance:

(1) Mssrs. Crowl and Bogansky’s targets were pro-rated for salary levels before and after their promotions effective March 29, 2017.

(2) Mr. Messina’s target was pro-rated for time served from January 1, 2017 through June 28, 2017.

(3) Mr. Staid’s target was pro-rated for time served from February 20, 2017 through December 31, 2017.

CASH PERFORMANCE INCENTIVE AWARDS (CPIA) GRANTED IN 2017

The HC&CC determined the ongoing business transformation and leadership transitions created the need for a change in 2017 from a typical equity-based LTIP award (which based on past practice typically had a three-year performance cycle) to an incentive award that was more aligned with our objective, and stockholders’ desire, to maximize the opportunity for near-term return of capital to stockholders. Therefore, the HC&CC granted short-term performance cash awards that could be earned based solely on the level of excess cash available for distribution to our stockholders as of December 31, 2017 (which was the same performance metric as that used in the MIP), and the NEOs’ continued employment (or earlier termination by us without cause or separation from service due to death or disability) through the vesting date of March 31, 2018.  Additionally, settlement of vested awards is not accelerated from the original vesting schedule except in the event of death or disability and in all circumstances, the performance metric must be met for payment to be earned.

Specifically, the funding under the CPIA was dependent upon the HC&CC’s determination of our cash and cash equivalents, plus the amount of cash distributed to stockholders in 2017, minus any cash held in variable interest entities, plus the balance of any remaining sources realized, minus the balance of any uses expected to be incurred, as of December 31, 2017.  Specifically, funding under the above-described excess cash objective was measured as follows, with straight-line interpolation from threshold to target and target to maximum amounts:

Eligibility for the CPIA, the targeted amount of each individual award, and the terms and conditions of each award were determined by the HC&CC upon consultation with management and the HC&CC’s independent compensation consultant. In granting these awards, the HC&CC considered several factors, including, but not limited to, total compensation relative to our peer group, the mix of performance and time-vested compensation, the applicable NEO’s demonstrated performance and leadership and the criticality of the role.

2017 CPIA TARGETS AND AWARDS

The chart below shows the CPIA awards granted to our NEOs during 2017, all of which were granted under the PHH Corporation 2014 Equity and Incentive Plan (the “2014 EIP”) on March 29, 2017.  CPIA targets for Mssrs. Crowl, Bogansky, Brown and Kaplan were lower than their LTIP targets in 2016 in recognition of PHH’s shift to a smaller operating scale and new business model.  Mr. Messina was also provided with a lower award opportunity than 2016, further reduced on a pro-rata basis to account for his expected departure in June 2017.   His prorated award was granted in recognition of his role establishing the strategy to generate cash and return excess cash to stockholders and to implement cost savings and other restructuring initiatives, as well as his continuing engagement with us as CEO through the 2017 Annual Stockholders Meeting and to provide an appropriate and competitive total compensation opportunity for the portion of the year that he served as CEO.

19

Table of Contents

In early 2018, the HC&CC approved CPIA payments based on performance achievement outlined above.  Awards vested upon termination of employment on June 28, 2017 for Mr. Messina and on December 31, 2017 for Mssrs. Brown and Kaplan.  Consistent with the terms of the awards, Mssrs. Crowl, Bogansky and Staid fully vested in their awards on March 31, 2018.

PERFORMANCE-BASED LONG-TERM INCENTIVE AWARDS FOR WHICH PERFORMANCE CRITERIA WERE NOT MET IN 2017

In 2017, the performance measurement periods closed for certain PRSUs previously granted to our NEOs.  Specifically, the third and final tranche (representing one-third) of the PRSU awards granted on February 25, 2015 to all NEOs other than Mr. Messina and Mr. Staid, and on March 1, 2015 to Mr. Messina, failed to meet the performance conditions. These awards required our TSR to be both positive and to perform at or above the 33rd percentile of companies listed in the KBW Mortgage Finance Index for the performance periods beginning January 1, 2015 and ending December 31, 2015, 2016 or 2017, as applicable. Our TSR was negative for the all three performance periods.

Additionally, the PRSU awards granted to Mr. Messina on October 23, 2014 required that the average closing price of PHH stock over the 90 days leading up to the three-year anniversary of the grant date be no less than $28.00 in order for half of the PRSUs to vest and to be no less than $30.00 for all of the PRSUs to vest. These awards were not realized because our stock price for the applicable measurement period was below the $28.00 threshold.

PERFORMANCE AWARDS FOR WHICH PERFORMANCE CRITERIA WERE NOT MET IN 2017

(1)    Represents PRSUs granted under the 2014 EIP. The first two tranches of PRSUs (representing two-thirds of granted units) were previously not realized because of negative TSR for the performance period ending December 31, 2015 and December 31, 2016, respectively.

(2)    Represents PRSUs granted under the 2014 EIP.

TOTAL COMPENSATION OF OUR CHIEF EXECUTIVE OFFICER

We had two chief executive officers during 2017.  Glen A. Messina held the role from January 2012 until June 28, 2017, the date of the 2017 Annual Stockholders Meeting, at which point Robert B. Crowl was elected to the Board and assumed the role of President and CEO.

Mr. Messina. Mr. Messina served as our President and Chief Executive Officer until June 28, 2017.  Under Mr. Messina’s leadership, the framework was created to execute the asset sales transactions and to implement the planned business restructuring and human capital actions necessary for the transition to PHH 2.0. Furthermore, Mr. Messina commenced the actions necessary to maximize near-term capital returns to stockholders while maintaining strategic flexibility.

Based on Mr. Messina’s performance, the HC&CC recommended and the Board approved the following actions in connection with Mr. Messina’s 2017 compensation:

20

Table of Contents

·        In March 2017, the Board provided Mr. Messina with 2017 MIP and CPIA awards, as described above. The annualized MIP target level was the same as 2016; however, the final 2017 target awarded was pro-rated based on the duration of his employment in 2017.  The Board determined Mr. Messina’s CPIA opportunity as described in “Cash Performance Incentive Awards (CPIA) Granted in 2017—2017 CPIA Targets and Awards” above.

·        For the reasons detailed in “2017 Management Incentive Plan” above, in February 2018, the HC&CC recommended and the Board approved 100% funding in connection with Mr. Messina’s individual performance objectives, which constituted 25% of his MIP award opportunity.  The company-based performance objectives of Mr. Messina’s MIP award, which constituted 75% of the MIP award opportunity, were funded at 85.4% of target.  The Board also certified CPIA funding at 115% of target.

·        As discussed above, during 2017 the HC&CC certified that the performance metrics in Mr. Messina’s October 23, 2014 and March 1, 2015 PRSU awards were not met, which resulted in non-vesting of awards with a combined fair market value at time of grant of $1.86 million.  Additionally, PRSUs granted to Mr. Messina in 2016 with a grant date fair market value of $2.46 million are subject to reduction to the extent to which we do not deliver a 22.89% TSR (and are at risk entirely if we do not deliver positive TSR) over its May 19, 2016 starting point.

In anticipation of his termination of employment, Mr. Messina entered into a separation letter with us in March 2017 that describes the benefits to which he is entitled in connection with his departure to termination without cause benefits under our Tier I Plan, and full vesting of his outstanding equity awards, subject to all applicable performance and settlement provisions.  Mr. Messina will remain subject to his twenty-four (24) month restrictive covenant agreement, which contains non-compete and non-solicit provisions.

In addition, Mr. Messina entered into a consulting agreement with us on June 28, 2017 pursuant to which he agreed, as required by us from time to time, to (i) support Mr. Crowl as requested to prepare for meetings with the Board, clients, stockholders, and employees; (ii) review materials for earnings calls; (iii) support strategic planning efforts; and (iv) participate in internal meetings to ensure effective transition of IT oversight activities and oversight of on-going regulatory matters.  In 2017, Mr. Messina received $50,420 in fees under this consulting agreement.

Mr. Crowl. Mr. Crowl served as Chief Financial Officer from May 2012 to March 29, 2017, at which time he assumed the roles of Chief Operating Officer and subsequently, President and Chief Executive Officer effective June 28, 2017. Under Mr. Crowl’s leadership, significant cost savings and restructuring initiatives were achieved and strategic transactions were executed, while the business continued to move towards the PHH 2.0 model and maintained strategic flexibility.

The HC&CC recommended and the Board approved the following actions in connection with his 2017 compensation:

·        Under his  employment agreement, effective March 29, 2017, Mr. Crowl received a base salary of $575,000, a 2017 MIP and CPIA target award of 125% and 130% of the base salary, respectively, with the MIP target prorated for the difference in salaries prior to the effective date of his employment agreement.  The target compensation levels were informed by market and peer group data, as well as Mr. Crowl’s performance in the CFO role and expected contributions as both the COO and CEO for the balance of the year to lead PHH through the transition to a business model focused on subservicing and portfolio retention services and to return capital to stockholders.

·        For the reasons detailed in “2017 Management Incentive Plan” above, in February 2018, the HC&CC recommended and the Board approved 100% funding in connection with Mr. Crowl’s individual performance objectives, which constituted 25% of his MIP award opportunity.  The company-based performance objectives of Mr. Crowl’s MIP award, which constituted 75% of the MIP award opportunity, were funded at 85.4% of target.  The Board also certified CPIA funding at 115% of target.

CEO Target Compensation. The chart below summarizes how annualized CEO target compensation has been reduced 73% year-over-year from 2016 to 2017 as a result of the CEO transition.

COMPARISON OF ANNUAL TARGET COMPENSATION OF OUR CHIEF EXECUTIVE OFFICERS

21

Table of Contents

RETIREMENT BENEFITS

All of our NEOs are eligible to participate in the PHH Corporation Employee Savings Plan (the “401(k) Plan”) on the same basis as other employees. The 401(k) Plan is a tax-qualified retirement savings plan that provides for employee deferral and employer matching contributions on a pre-tax basis subject to statutory limits. We match four percent of the employee’s deferred compensation up to the statutory limit. See “—Summary Compensation Table—All Other Compensation” for more information regarding matching contributions to the 401(k) Plan made on behalf of each NEO.

Mr. Brown is the only NEO that participates in the PHH Corporation Pension Plan, which is a tax-qualified defined benefit pension plan. The PHH Corporation Pension Plan ceased benefit accruals for most participants, including Mr. Brown, as of October 31, 1999. See “Pension Benefits” below for more information regarding benefits available to Mr. Brown under this plan.

PERQUISITES AND OTHER COMPENSATION

The HC&CC reviews the appropriateness of perquisites each year. During 2017, the only perquisite we provided to our NEOs consisted of financial planning services. The provision of these services is treated as imputed income and is reflected in the “—Summary Compensation Table—All Other Compensation.”

CHANGE IN CONTROL AND OTHER SEVERANCE ARRANGEMENTS

All of our NEOs are eligible for severance benefits conditioned on execution of a general release agreement.  With the exception of Mr. Staid, our NEOs have contractual rights to certain severance benefits as discussed below, which are consistent with the benefits provided under the PHH Corporation Amended and Restated Tier I Severance Plan (“Tier I Plan”).  The Tier I Plan provides the following severance benefits, in the event of a qualifying separation from employment, including a termination without cause by us: (1) bi-weekly salary continuation for the one year duration of the participant’s restrictive covenant agreement; (2) 100% of the target amount of the cash incentive bonus award granted under the MIP (or if not yet granted, 100% of the prior year’s target amount of cash incentive bonus under the MIP), payable during the duration salary continuation; (3) outplacement assistance services not to exceed $18,000 (or $18,500 for Mssrs. Crowl and Bogansky, per their current employment agreements) to be used within 24 months of the separation from employment; and (4) a monthly payment equal to the cost of COBRA coverage during the duration of the restrictive covenants.

Pursuant to their employment agreements executed March 29, 2017 (and subsequently amended and restated on January 25, 2018), Mssrs. Crowl and Bogansky are eligible to receive severance benefits consistent with those set forth in the Tier I Plan in the event of a qualifying termination without cause or resignation for Good Reason, as defined in the employment agreements.   Each are required to execute a general release agreement as a condition to receiving benefits under the agreement and each are subject to a 12 month restrictive covenant.

On March 29, 2017, Mr. Brown and Mr. Kaplan entered into severance letter agreements which (subject to the execution of a separation and general release agreement that each of Mssrs. Brown and Kaplan subsequently entered into on January 1, 2018) provided each with the benefits offered under the Tier I Plan, as described above, provided that each agreed to waive his right to resign for good reason and remain employed through December 31, 2017. Both Mr. Brown and Mr. Kaplan are subject to one year restrictive covenants following their separation from employment.  Mr. Messina also entered into a severance letter agreement on March 29, 2017 which provided him with the benefits offered under the Tier I Plan, provided that he agreed to waive his right to resign for good reason and remain employed through the date of the 2017 Annual Stockholders Meeting. Mr. Messina was also entitled to full vesting of outstanding long term incentive awards upon his termination without cause, subject to vesting and settlement provisions in the award agreements.  Mr. Messina is subject to a 24 month restrictive covenant following his separation from employment, during which his Tier I severance benefits continue.

The Tier I Plan, and Mr. Crowl and Mr. Bogansky’s employment agreements also provide for reduction of the aggregate compensation due to an eligible participant to avoid triggering excise taxes on golden parachute payments under Section 4999 of the Internal Revenue Code and regulations thereunder if the reduction would result in the participant retaining a larger after-tax amount.

Mr. Staid is eligible to receive severance benefits pursuant to the PHH Corporation Tier II Severance Plan, as amended and restated effective November 30, 2017. As a Senior Vice President, Mr. Staid is eligible for 16 weeks of salary if employed less than one year, or if one year of service or more, the greater of 26 weeks of salary or two weeks of salary per year of service plus one week, subject to execution of a release, in the event of a qualifying separation from employment, including a termination resulting from a position elimination (provided he is not offered comparable employment) or workforce reduction.

All awards issued under the 2014 EIP are considered to be double trigger and therefore do not automatically vest upon the occurrence of a change in control (as defined in the 2014 EIP), unless otherwise provided in an award. See below for additional information regarding payments in the event of a change in control or other termination of employment for each NEO.

22

Table of Contents

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

Generally, Section 162(m) denies a deduction to any publicly held corporation for certain compensation exceeding $1,000,000 paid during each calendar year to each of the chief executive officer and the three other highest paid executive officers whose compensation must be reported to stockholders.  However, before the effective date of the 2017 tax reform legislation, amounts in excess of $1,000,000 were deductible if they qualified as “performance-based compensation.”

The 2017 MIP permits, but does not require, the granting of awards that are designed to qualify as performance-based compensation for purposes of satisfying the conditions of Section 162(m). Accordingly, where it is deemed appropriate and in our best interests, the HC&CC may approve compensation to executive officers that exceed the limits of deductibility imposed by Section 162(m) and do not result in favorable tax treatment.

The 2017 tax reform legislation removed the “performance-based compensation” exception from Section 162(m). Accordingly, awards made after 2017 generally are not eligible for the “performance-based compensation” exception and will not be deductible to the extent that they cause the compensation of the affected executive officers to exceed $1,000,000 in any year. Awards that were made and subject to binding written contracts in effect on November 2, 2017, are “grandfathered” under prior law and can still qualify as deductible “performance-based compensation,” even if paid in future years. The compensation paid to all of our NEOs in 2017 was fully tax deductible under Section 162(m).

COMPENSATION RISK ASSESSMENT

Our 2017 compensation programs were structured so that a considerable amount of executive compensation was tied to short term objectives that would help our transition to our new operating structure, maximize the opportunity for near-term return of capital to stockholders and maintain strategic flexibility. The focus on short-term objectives could encourage executives and other employees to take risks that may not be in our long-term interests; however, we maintain sound risk management practices that enable the organization to fully comprehend the potential risks and opportunities associated with executing strategic initiatives, accelerating the return of cash to stockholders, and transitioning to the new business model.

We considered risk management in the development of individual performance objectives for executives to align them with incentive payouts, and provided incentives to meet specific business goals. The HC&CC and the Board closely monitored and scrutinized how the “excess cash available for distribution to stockholders” goal contained in both the 2017 MIP and CPIA programs was being calculated on an on-going basis through regular reporting to the Board.  Additionally, the HC&CC may exercise discretion in reducing MIP awards based on factors it deems appropriate, including whether an executive has caused unnecessary or excessive risk in meeting achievement levels. The HC&CC believes this combination of factors encourages our executives and other employees to manage our businesses in a prudent manner.

In 2017 we conducted a risk assessment of our compensation programs which determined that our compensation programs do not encourage excessive or unnecessary risk-taking and are not reasonably likely to have a material adverse effect on us.  We have multi-level review and oversight of our business operations and compensation processes in order to mitigate the possibility of employees receiving rewards for engaging in conduct intended to promote only unsustainable short-term performance. Our compensation policies, which include claw-back provisions, avoid short-term rewards for management decisions that could pose long-term risks to us.

We have other compensation risk governance practices in place as well. Our Chief Risk and Compliance Officer is responsible for analyzing the risks our compensation programs may present in light of our operations and processes, including any mitigating factors. The HC&CC considers this input in the design of our compensation programs as they are being developed. Additionally, the HC&CC consults with the Board’s Audit Committee, as appropriate, regarding any risks presented by the compensation programs. The Audit Committee, consistent with its charter, also coordinates with the HC&CC to review the compensation risk assessment on an annual basis.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The HC&CC consists entirely of “outside directors” within the meaning of the regulations under Section 162(m), “non-employee directors” under SEC Rule 16b-3, and “independent” directors as affirmatively determined by the Board pursuant to the NYSE Listing Standards and our categorical Independence Standards. The current members of the HC&CC, all of whom have served on the committee since our 2017 Annual Stockholders Meeting held on June 28, 2017, are the individuals named as signatories to the Compensation Committee Report set forth above.  From January 1, 2017 until the 2017 Annual Stockholders Meeting, the HC&CC was chaired by Deborah M. Reif (who retired from the Board effective immediately prior to the 2017 Annual Stockholders Meeting) and included Mssrs. Egan, Pizzi and Wetzel.  None of the individuals that served on the HC&CC during 2017 are our current or former officers or employees or engaged in any transactions with us required to be disclosed as “related person transactions” under regulations of the SEC. There were no compensation committee “interlocks” during 2017, which generally means that none of our executive officers served as a director or member of the compensation committee of another entity, one of whose executive officers served as a member of the Board or as a member of the HC&CC.

23

Table of Contents

SUMMARY COMPENSATION TABLE

The information below sets forth the compensation awarded to, earned by, or paid to, our “Named Executive Officers” as defined in Item 402 of Regulation S-K. The form and amount of the compensation awarded to, earned by, or paid to, our NEOs for the year ended December 31, 2017, was determined by the HC&CC.

The amounts included in the “Stock Awards,” and “Total” columns reflect the aggregate grant date fair value of equity-based compensation awards made during a given year computed in accordance with FASB ASC Topic 718 in accordance with SEC rules, as opposed to the amount of value actually realized from equity-based compensation awards during such year by the particular NEO.  Accordingly, the amounts in the “Stock Awards” and “Total” columns do not necessarily reflect the value actually realized from equity based compensation awards by our NEOs for a given year, which may be substantially greater or less than the amounts included in such columns below. See the “Option Exercises and Stock Vested During 2017” table below for information concerning the amount of value actually realized during 2017 by our NEOs from equity-based compensation awards.

(1)          Mr. Staid received a $100,000 sign-on bonus on February 20, 2017, which vested in its entirety by year-end.

(2)          Amounts shown in these columns reflect the aggregate grant date fair value calculated in accordance with FASB ASC Topic 718 (excluding the effect of estimated forfeitures (in accordance with SEC rules) for awards subject to time-based vesting and awards subject to performance conditions) of equity-based compensation awards granted to our NEOs.

(3)          Amounts shown in this column for 2017 represent awards paid under the MIP and CPIA in 2018 for performance in respect of 2017. See “Compensation Discussion & Analysis—2017 Management Incentive Plan and —2017 Cash Performance Incentive Award” for more information.

(4)          Amounts shown in this column for 2017 reflect the change in the actuarial present value of the accumulated benefit under the PHH Corporation Pension Plan. Benefit accruals under the PHH Corporation Pension Plan ceased for most participants, including Mr. Brown, as of October 31, 1999. See “Pension Benefits” for additional information regarding the benefits accrued for Mr. Brown and see Note 11, “Pension and Other Post-Employment Benefits” in the Notes to Consolidated Financial Statements included in the Form 10-K for more information regarding the calculation of our pension costs.

(5)          The actuarial present value of accumulated benefits under the PHH Corporation Pension Plan as of December 31, 2015 for Mr. Brown reflected a decrease of $3,473, as compared to the actuarial present value of accumulated benefits as of December 31, 2014.

(6)          Amounts shown in this column are set forth in the supplemental “All Other Compensation” table below.

(7)          Mr. Crowl became our President and Chief Executive Officer effective June 28, 2017.

(8)          Mr. Messina resigned as our President and Chief Executive Officer and as a member of our Board of Directors effective June 28, 2017. The Salary column reflects salary earned, and excludes any separation related payments which are captured in the All Other Compensation column.

(9)          Mr. Bogansky became our Chief Financial Officer effective March 29, 2017.

(10)    Mr. Brown resigned as SVP, General Counsel and Secretary effective December 31, 2017.

(11)    Mr. Staid was hired February 20, 2017 as Senior Vice President, Servicing.

(12)    Mr. Kaplan resigned as SVP and Chief Risk and Compliance Officer effective December 31, 2017.  The increase in Mr. Kaplan’s base salary amount from 2016 to 2017 is a result of an increase to his base salary effective March 2, 2016.

24

Table of Contents

All Other Compensation

The following table provides additional information about the amounts that appear in the “All Other Compensation” column in the Summary Compensation Table.

(1)          Reflects matching contributions made under the PHH Corporation Employee Savings Plan. Following the completion of one year of service, matching contributions are available to all of our employees. PHH will match employee contributions dollar-for-dollar up to the lesser of the first four percent of eligible compensation and the statutory limit of $10,800.

(2)          Reflects the value of financial planning services utilized by Mr. Brown.

(3)          Reflects the value of benefits paid to Mr. Messina under the Tier 1 Severance Letter Agreement effective March 29, 2017.  Particularly, Mr. Messina’s continued receipt of severance benefits thereunder is subject to, among other things, his compliance with the non-compete covenants contained therein.

(4)          Reflects the value of consulting fees paid to Mr. Messina for work performed for the Board of Directors under the consulting agreement entered into on June 28, 2017.

(5)          Reflects awards for achieving length of service milestones. Award values are the same for employees at all levels based on length of service.

GRANTS OF PLAN-BASED AWARDS FOR 2017

The following table reflects NEO incentive opportunities pursuant to the 2017 MIP and CPIA award grants. Actual amounts earned in 2017 by our NEOs are reflected in the Summary Compensation Table.  There were no equity incentive plan awards granted to our NEOs in 2017.

Additional Narrative re: Summary Compensation Table and Table of Grants of Plan-Based Awards for 2017

Pursuant to their employment agreements executed March 29, 2017 (and subsequently amended and restated on January 25, 2018), Mr. Crowl and Mr. Bogansky are contractually entitled to their base salaries and to receive certain non-equity incentive

25

Table of Contents

compensation targets.  Consistent with their employment agreements, Mr. Crowl and Mr. Bogansky were entitled to 2017 MIP awards with targets of 125% and 55%, respectively and 2017 CPIA Awards with targets of 130% and 75%, respectively, of their base salary.

Consistent with Mr. Messina’s March 29, 2017 severance letter agreement, he is entitled to receive severance benefits consistent with the Tier I Plan, as previously described.  Additionally, Mr. Messina is entitled to receive certain fees for services provided consistent with his consulting agreement, entered into on June 28, 2017, as reflected in the Summary Compensation Table.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2017

The following table sets forth the outstanding equity awards for each of our NEOs as of December 31, 2017. Equity awards granted prior to May 22, 2014 were granted under the PHH Corporation 2005 Equity and Incentive Plan, as amended and restated and awards granted thereafter were granted under the 2014 EIP.

(1)          Calculated using the closing price of PHH common stock on December 29, 2017 ($10.30 per share).

(2)          Represents non-qualified stock options to purchase PHH common stock (“NQSOs”) granted on June 6, 2012. This award vested on June 6, 2015, at which time these options became fully exercisable.

(3)          Represents NQSOs granted on September 27, 2012. This award vested on September 27, 2015, at which time these options became fully exercisable.

(4)          Represents NQSOs granted on March 29, 2013. This award vested on March 29, 2016, at which time these options became fully exercisable.

(5)          Represents remaining one-third of RSUs granted on February 25, 2015, which vested February 25, 2018.

26

Table of Contents

(6)          Represents remaining two-thirds of RSUs granted on May 22, 2016, which vest in equal halves on the second and third anniversaries of the grant, subject to continued employment and other plan provisions.

(7)          Represents PRSUs granted on May 22, 2016. These PRSUs are earned based on the achievement of a TSR performance metric over a measurement period that began on May 19, 2016 and ends on the earlier of May 19, 2019 or a change in control. PRSUs that are earned vest on May 22, 2019 subject to continued employment and other plan provisions. As of December 31, 2017, TSR during the performance period was negative, and PRSUs are displayed at “0” because the performance threshold was not met at December 31, 2017.

(8)          Represents NQSOs granted on February 19, 2012. This award vested on February 19, 2015, at which time these options became fully exercisable.

(9)          Represents stock options granted to Mr. Brown on November 14, 2011 which vested on December 31, 2013, at which time these options became fully exercisable.

(10)    Represents RSUs that vested January 1, 2018, to be settled in cash consistent with the terms of the award, as described below in “Potential Payments Upon Termination of Employment or Change in Control.”

(11)    Represents RSUs that vested January 1, 2018, to be settled in cash consistent with the terms of the award, as described below in “Potential Payments Upon Termination of Employment or Change in Control.”

OPTION EXERCISES AND STOCK VESTED DURING 2017

The following table sets forth information for our NEOs regarding the number and value of shares of our common stock that vested during 2017.  No stock options were exercised during 2017.

(1)          Includes (i) February 25, 2017 vesting of one-third of restricted stock units (“RSUs”) granted February 25, 2015 under the 2014 EIP, (ii) May 22, 2017 vesting of one-third of RSUs granted May 22, 2016 under the 2014 EIP, and (iii) September 23, 2017 vesting of 40% of RSUs granted September 23, 2014 under the 2014 EIP.

(2)          Includes (i) March 1, 2017 vesting of one-third of RSUs granted March 1, 2015 under the 2014 EIP, (ii) June 28, 2017 vesting of 50% of RSUs granted October 23, 2014 under the 2014 EIP, settled in cash, (iii)  June 28, 2017 vesting of one-third of RSUs granted March 1, 2015 under the 2014 EIP, settled in cash on March 1, 2018, (iv) June 28, 2017 vesting (as a result of Mr. Messina’s separation from the Company) of 215,311 RSUs granted May 22, 2016, whose “Value Realized on Vesting” is not included in the table because RSUs are to settle in cash pursuant to the original vesting schedule, 50% on each of the second and third anniversaries of the grant, with unit value determined on the applicable settlement date (if the settlement date had been December 31, 2017, the value realized on vesting would have been $2,217,703.30), and (v) June 28, 2017 vesting (as a result of Mr. Messina’s separation from the Company) of 215,311 PRSUs granted May 22, 2016, whose “Value Realized on Vesting” is not included in the table because PRSUs are to settle in cash (subject to the achievement of performance criteria as of the earlier of the date of a change in control or the last date of the vesting period pursuant to the original vesting schedule) pursuant to the original vesting schedule on the third anniversary of the grant, with unit value determined on the settlement date (if the settlement date had been December 31, 2017, no value would have been realized on vesting because performance thresholds were not met).

(3)          Includes (i) February 25, 2017 vesting of one-third of RSUs granted February 25, 2015 under the 2014 EIP, and (ii) May 22, 2017 vesting of one-third of RSUs granted May 22, 2016 under the 2014 EIP.

PENSION BENEFITS

The following table sets forth information relating to the PHH Corporation Pension Plan, which is a defined benefit plan adopted as of our spin-off from Cendant Corporation (now known as Avis Budget Group, Inc.) in 2005. The PHH Corporation Pension Plan has been frozen for all participants, and no further benefits are accruing under such plan. The only NEO eligible for pension benefits under the PHH Corporation Pension Plan is Mr. Brown. The PHH Corporation Pension Plan assumed all liabilities and obligations owed to participants that were actively employed by us at the time of the spin-off under the predecessor plan of Cendant Corporation (now known as Avis Budget Group, Inc.). Mssrs. Crowl, Messina, Bogansky, Staid and Kaplan were not participants in the predecessor plan and are thus not participants in the PHH Corporation Pension Plan.

(1)          The number of years of credited service shown in this column is calculated based on the actual years of service through October 31, 1999.

(2)          The valuation included in this column is calculated as of December 31, 2017 as described in Note 11, “Pension and Other Post-Employment Benefits” in the Notes to Consolidated Financial Statements included in the Form 10-K.

27

Table of Contents

POTENTIAL PAYMENTS UPON TERMINATION OF EMPLOYMENT OR CHANGE IN CONTROL

The following table sets forth the estimated payments and benefits payable to the NEOs, other than Mr. Messina, pursuant to the terms of any contract, agreement, plan or arrangement that existed as of December 31, 2017 (or June 28, 2017 for Mr. Messina), and that provided for payments and benefits following, or in connection with, a termination of the NEO’s employment, including by voluntary termination with or without good reason, involuntary termination not for cause, involuntary termination for cause, death, disability, or a change in control with or without a termination of the NEO’s employment. For purposes of calculating the amounts in the table below, we have assumed that the termination or change in control event took place on December 31, 2017 (or June 28, 2017 for Mr. Messina), as required by SEC rules. For purposes of calculating the value of any equity based awards in accordance with the SEC rules, we used the closing price of our common stock on December 29, 2017 of $10.30 per share, except where the value of Mr. Messina’s equity awards were determined upon his termination date. See the discussion that follows the table for additional information regarding these estimated payments and benefits.

28

Table of Contents