Operating Expenses

12 Months Ended

Dec. 31, 2017

Other Income and Expenses [Abstract]

Operating Expenses

Operating Expenses

Components of our operating expenses for the years ended December 31, 2017, 2016 and 2015 are presented in the following table.

Table 19.1 – Components of Operating Expenses

	Years Ended December 31,
(In Thousands)	2017		2016		2015
Fixed compensation expense	$	22,111	$	24,332	$	35,093
Variable compensation expense (1)	20,574		16,581		12,606
Equity compensation expense	10,141		9,093		11,921
Total compensation expense	52,826		50,006		59,620
Systems and consulting	7,073		9,037		10,212
Loan acquisition costs (2)	5,022		5,744		10,326
Office costs	4,248		4,550		5,270
Accounting and legal	2,842		3,658		4,837
Corporate costs	1,856		2,106		2,049
Other operating expenses	3,289		3,284		5,102
Operating expenses before restructuring charges	77,156		78,385		97,416
Restructuring charges (3)	—		10,401		—
Total Operating Expenses	$	77,156	$	88,786	$	97,416

(1) Variable compensation expense in 2017 includes $2 million of costs associated with the hiring of a new executive officer.

(2) Loan acquisition costs primarily includes underwriting and due diligence costs related to the acquisition of residential loans held-for-sale at fair value.

(3) For the year ended December 31, 2016, restructuring charges included $5 million of fixed compensation expense and $3 million of equity compensation expense related to one-time termination benefits, as well as $2 million of other contract termination costs, associated with the restructuring of our conforming and commercial mortgage banking operations and related charges associated with the departure of Redwood's President announced in the first quarter of 2016. See Note 10 for further discussion on restructuring charges.