🧾 What This Document Is

This is a Definitive Proxy Statement (DEF 14A). Think of it as a formal invitation and information packet for a company's annual shareholder meeting. It explains what will be voted on, provides background on the company's leaders and pay, and gives shareholders the tools to cast their votes. NexPoint Residential Trust's annual meeting will be held virtually on Tuesday, June 2, 2026, at 10:00 a.m. Central Time.

🏢 What The Company Does

👉 In simple terms, NexPoint Residential Trust (NXRT) is a Real Estate Investment Trust (REIT) that owns and operates apartment buildings. It's externally managed, meaning a separate company (NexPoint Residential Trust Advisors, L.P.) runs the day-to-day operations for a fee. NXRT's business is buying, improving, and renting out multifamily housing properties, primarily in the southeastern and southwestern United States.

🗳️ What You're Voting On

Shareholders will vote on four main proposals at the meeting:

1. Elect seven directors to serve one-year terms.
2. Approve executive compensation (an advisory, non-binding "say-on-pay" vote).
3. Decide how often to vote on pay (the board recommends every year).
4. Ratify the appointment of KPMG LLP as the company's independent auditor for 2026.

👉 Key Logistics: The meeting is 100% virtual. To attend or vote, shareholders must register by emailing [email protected] by 2:00 p.m. CT on June 1, 2026. If your shares are held by a broker, you'll need a "legal proxy" from them to vote.

👥 Meet the Board Nominees

The company is electing a board of seven directors. Here’s a snapshot of the nominees and their key experience:

• James Dondero (President & Chairman): Over 30 years in credit and equity markets, deep REIT leadership experience.
• Brian Mitts: Former CFO with extensive experience across the NexPoint family of companies.
• Edward Constantino: Retired KPMG audit partner with 40+ years in accounting, specializing in real estate.
• Scott Kavanaugh: Former CEO of a financial services company, expertise in banking and investment management.
• Dr. Arthur Laffer: Famous economist ("Father of Supply-Side Economics"), long-time corporate director.
• Dr. Carol Swain: Author, political scientist, and former professor, bringing governance and policy perspective.
• Catherine Wood: CEO of ARK Invest, known for her focus on disruptive innovation and technology.

👉 Why it matters: The board oversees the company and hires the external manager. Their diverse backgrounds in finance, real estate, economics, and innovation are meant to provide strong strategic guidance.

💰 Executive Pay Highlights

Because NXRT is externally managed, its named executive officers (like President James Dondero) are employees of the advisor company, not NXRT itself.

• Cash Pay: NXRT does not pay its executives' salaries or bonuses. That's handled by the external advisor.
• Stock Pay: NXRT compensates its executives with Restricted Stock Units (RSUs) to align their interests with shareholders. In 2025, Mr. Dondero received a $3.33 million stock award.
• Pay Ratio: The filing reveals a stark ratio. The median employee (one of the company's only direct employees) earned $303,338, while Mr. Dondero's total compensation was $3.33 million, creating a 11:1 ratio.

💸 The Audit & Fees

KPMG LLP, the company's auditor since at least 2024, is up for ratification. The total fees paid to KPMG for 2025 were $1.47 million, which included:

• Audit Fees: $1.195 million (for the annual financial statement audit and other SEC-required work).
• Tax Fees: $279,295 (for tax compliance and advice).

⚖️ Governance & Key Policies

• Majority Voting Policy: Directors in an uncontested election who receive more "withhold" votes than "for" votes are expected to tender their resignation.
• Committee Structure: The board has three key committees: Audit, Compensation, and Nominating & Corporate Governance. Each has a charter outlining its duties.
• Risk Oversight: The Audit Committee oversees financial and cybersecurity risks, while the Nominating Committee handles ESG (Environmental, Social, and Governance) risks.

🔮 What's Next

After the June 2 meeting, the newly elected board will continue to oversee the external advisor's management of the apartment portfolio. Shareholders will get to voice their opinion on pay annually, per the board's recommendation. The company will continue to be audited by KPMG.

⚖️ Big Picture: Strengths & Risks

👍 Strengths:

• Experienced Board: Directors have deep REIT, financial, and economic expertise.
• Aligned Interests: Use of stock-based pay for executives ties their wealth to shareholder success.
• Clear Governance: Established policies for voting, board evaluations, and committee oversight.

⚠️ Risks & Considerations:

• External Management Conflict: The advisor (and its employees, who are NXRT's executives) earns fees from NXRT, which could create misaligned incentives.
• CEO Pay Ratio: The 11:1 ratio is relatively low for a large company, but the absolute compensation level and structure could be scrutinized.
• Operational Control: As an externally managed REIT, NXRT has limited day-to-day operational employees, relying heavily on its advisor.

🧠 The Analogy

Investing in NXRT is like being a limited partner in a partnership managed by a general partner. You own a piece of the properties (the apartment buildings), but you hire a specialized firm (the external advisor) to manage them. The annual meeting is your chance to review the managers, vote on the partnership's auditor, and approve how you're compensating the key people the manager has put in charge.

🧩 Final Takeaway

Your main job as a shareholder is to vote on the four proposals, especially electing the board that oversees your investment and the external manager running it. Pay close attention to the executive compensation structure (all stock, no cash from NXRT) and the governance policies that protect your interests as an owner of this apartment-building REIT.