APOLLO COMMERCIAL REAL ESTATE FINANCE, INC.
COMPENSATION COMMITTEE CHARTER
Purpose of the Compensation Committee
The Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Apollo Commercial Real Estate
Finance, Inc. (the “Company”) will discharge the Board’s responsibilities relating to the compensation, if any, of the Company’s
directors and executive officers, and oversee plans and programs related to the compensation of ACREFI Management, LLC, the Company’s external manager
(the “Manager”), including reviewing the performance of and compensation payable to the Manager pursuant to the management agreement
(the “Management Agreement”), as amended from time to time, by and between the Company, ACREFI
Operating, LLC and the Manager. The Committee is also responsible for administering and implementing the Company’s equity-based plans. The Committee
will review and discuss with the management and recommend to the Board the Compensation Discussion and Analysis (“CD&A”) to be
included in the Company’s annual proxy statement and/or annual report on Form 10-K and prepare any report on or relating to executive compensation
required by the rules and regulations of the Securities and Exchange Commission (the “SEC”).
The Committee shall report to the Board on a regular basis and in any event not less than once a year. The Committee shall have the resources and
authority appropriate to discharge its responsibilities and duties. The Committee shall have the sole authority and discretion to select, retain and
terminate a compensation consultant and to approve such consultant’s fees and other retention terms in accordance with the requirements of this
Charter. The Committee shall also have the authority to obtain advice and assistance from internal or external legal, accounting or other advisors.
2. Composition of the Compensation Committee
The Committee shall be comprised of at least three directors as appointed by the Board, each of whom shall meet the independence requirements under the
rules and regulations of the New York Stock Exchange as in effect from time to time and shall be free from any relationship that would interfere with
the exercise of his or her independent judgment as a member of the Committee.
The members of the Committee shall be appointed annually by the Board on or prior to the date of the Company’s annual meeting of stockholders and shall
serve until their successors are duly appointed by the Board or until their earlier resignation or removal. In connection with the annual appointment
of the members of the Committee, the Board shall also select a member of the Committee to serve as its Chairman.
3. Meetings of the Compensation Committee
The Committee shall meet at such times and from time to time as it deems to be appropriate, but not less than three times each year. The Committee may
request members of the Company’s management or others to attend meetings and provide pertinent information as necessary. Minutes will be kept for each
meeting of the Committee and will be provided to each member of the Board.
4. Responsibilities and Duties of the Compensation Committee
The duties of the Committee shall include the following:
Manager Compensation and Evaluation
The Committee shall oversee the performance of the Manager and the management fees and other compensation payable to the Manager.
The Committee shall review and monitor the allocation of the Company’s share of the compensation, including without limitation, annual base salary,
bonus, any related withholding taxes and employee benefits, paid to (1) the Manager’s personnel serving as the Company’s chief financial officer
based on the percentage of his or her time spent managing the Company’s affairs and (2) other corporate finance, tax, accounting, internal audit,
legal, risk management, operations, compliance and other non-investment personnel of the Manager and its Affiliates who spend all or a portion of
their time managing the Company’s affairs.
Executive and Director Compensation
In consultation with senior management, establish the Company’s general compensation philosophy and oversee the development, implementation and
administration of compensation plans, policies and programs.
Review and approve corporate goals and objectives relevant to the compensation payable to the Company’s Chief Executive Officer (the “ CEO”) pursuant to the Company’s equity-based plans, evaluate the performance of the CEO in light of those goals and objectives,
and determine the level of compensation payable to the CEO pursuant to the Company’s equity-based plans based on (i) this evaluation, (ii) the
results of the most recent stockholder advisory vote on executive compensation (“Say on Pay Vote”) required by Section 14A of the
Securities Exchange Act of 1934, as amended, and (iii) any other factors which the Committee may, in its discretion, consider appropriate, which
may include the Company’s performance and relative stockholder return, the value of similar incentive awards to chief executive officers at
comparable companies and the awards given to the CEO in past years.
To the extent that the Company is responsible for paying all or any part of the compensation and/or any other employee benefits of any of its
executive officers (other than the CEO), in consultation with the CEO, consider, formulate and evaluate the corporate goals and objectives relevant
to the compensation of, and establish the compensation programs applicable to, all non-CEO executive officers of the Company, if any, and, together
with the CEO, determine the compensation levels of any such non- CEO executive officers.
Make recommendations to the Board with respect to the Company’s equity-based plans, oversee the activities of the individuals and committees responsible
for administering these plans, determine the level of compensation, in consultation with the executive officers of the Company, payable to the Manager and
personnel of the Manager pursuant to these plans, and discharge any responsibilities imposed on the Committee by any of these plans. In fulfilling these
duties, the Committee may, in its discretion, approve an aggregate amount of compensation payable to the Manager and personnel of the Manager with respect
to the Company’s equity-based plans to be allocated in the Manager’s discretion, other than such compensation payable to the Company’s executive officers,
which shall be approved by the Committee with specificity.
Other Committee Responsibilities
5. Outside Advisors; Resources and Authority of the Committee
The Committee shall have the resources and authority appropriate to discharge its responsibilities and duties, including the authority to retain
compensation consultants, legal counsel and other consultants or advisors (collectively, “consultants”), at the expense of the Company, to
advise the Committee about levels and types of compensation being given by companies similar to the Company to their chief executive officers, other senior
executives and external managers and any other matters the Committee deems appropriate. The Committee shall be directly responsible for the appointment,
compensation and oversight of the work of any consultant retained by the Committee. To the extent the Committee deems advisable, the Committee may consult
with legal counsel (which may be counsel to the Company) about any matters, including tax deductibility to the Company and tax effects that the Company
deems relevant with regard to particular compensation-related decisions. The Committee shall have the sole authority and discretion to select and retain
consultants, to terminate any consultant retained by it, and to approve the consultant’s fees and other retention terms. In retaining or seeking advice
from consultants (other than the Company’s or the Manager’s in-house counsel), the Committee shall take into consideration the following factors relating
to independence of such consultant:
No consideration of factors relating to independence of a consultant need be given if such consultant is in- house legal counsel or if such consultant’s
role is limited to:
6. Delegation to Subcommittee
consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors, and that
is available generally to all salaried employees; or
The Committee may, in its discretion, delegate all or a portion of its duties and responsibilities to a subcommittee of the Committee.
7. Performance Evaluation
The Committee shall produce and provide to the Board an annual performance evaluation of the Committee, which evaluation shall compare the performance of
the Committee with the requirements of this Charter and set forth the goals and objectives of the Committee for the upcoming year. The performance
evaluation shall also recommend to the Board any improvements to this Charter deemed necessary or desirable by the Committee. The performance evaluation by
the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the
Chairman of the Committee or any other member of the Committee designated by the Committee to make this report.
Approved by the Board: February 23, 2016