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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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W. P. Carey Inc. | ||||
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Date Filed: |
Notice of Annual Meeting of Stockholders |
April 4, 2019
Date and Time |
Thursday, June 13, 2019 1:30 p.m. |
Location DLA Piper LLP (US) |
1251 Avenue of the Americas, 27th Floor New York, NY 10020 |
Items of Business Elect ten Directors for 2019; Consider an advisory vote on executive compensation; Ratify the appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm for 2019; and Transact such other business as may properly come before the meeting and any adjournment or postponement thereof. Only shareholders who owned stock at the close of business on April 2, 2019 are entitled to vote at the meeting. W. P. Carey Inc. mailed the attached Proxy Statement, proxy card and its Annual Report to shareholders on or about April 9, 2019. By Order of the Board of Directors
Susan C. Hyde Chief Administrative Officer and |
How to Vote |
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INTERNET | PHONE | IN PERSON | |||||||
Whether or not you attend, it is important that your shares be represented and voted at the Annual Meeting. |
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You may vote your shares by using the telephone or through the Internet, as described on the enclosed proxy card. You may also vote your shares by marking your votes on the enclosed proxy card, signing and dating it and mailing it in the business reply envelope provided. If you attend the Annual Meeting, you may withdraw your previously submitted proxy and vote in person. |
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Additional questions are answered in the Users' Guide on page 61. |
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Important Notice Regarding Availability of Proxy Materials For the 2019 Annual Meeting of Stockholders to Be Held on June 13, 2019: |
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This Proxy Statement and the Annual Report to Shareholders are available at www.proxyvote.com. |
Proxy Statement and Notice of 2019 Annual Meeting | 1
Letter from Our Chairman and Chief Executive Officer |
Dear Fellow Shareholders, | ||||
Jason E. Fox |
On behalf of the W. P. Carey Inc. Board of Directors, we are pleased to present you with our 2019 Proxy Statement. We are proud of our achievements over the past year, most notably our merger with CPA:17, which was a shared accomplishment throughout our organization and essentially completed our evolution to a pure-play net-lease REIT. Today, W. P. Carey is an even stronger company with a well-defined strategy of owning a diversified portfolio of high-quality net lease assets supported by proactive asset management and a strong and flexible balance sheet. We also now rank as one of the largest REITs in the MSCI US REIT Index, with increased prominence, additional liquidity in our stock and an improved cost of capital. We take a long-term view with respect to both investing and our performance, and we were pleased to have outperformed the MSCI US REIT Index over the most recent 1-, 3- and 10-year periods. We have also generated higher AFFO and Real Estate AFFO per share, enabling us to provide our investors with stable and increasing dividends over time. Although we will no longer earn fees from managing CPA:17, we believe the strategic benefits of the merger have better positioned us for long-term growth in AFFO per share. Our Board is actively engaged in W. P. Carey's strategy and is comprised of Directors who have the diverse skillset and extensive experience necessary to support our business over the long-term. We believe that having a mix of tenured and newer directors, men and women, each with different backgrounds, provides the varied viewpoints and robust discussion that result in better outcomes. Our governance continues to reflect today's best practices, and we regularly evaluate ways to further enhance our policies and disclosures to insure that our investors are familiar with our corporate culture and what we believe is our best-in-class governance profile. Our new annual cash bonus plan, described later in this Proxy Statement, is an example of a change over the last year and is designed to provide greater transparency to investors and employees alike regarding our compensation practices and decisions. We recognize that our most important assets are our employees, and we believe our culture reflects that view. Our ability to attract the best and the brightest at all levels of our organization is supported by our culture, as well as by our compensation philosophy, our comprehensive benefits program and our career development opportunities. We invest in the financial, physical and overall well-being of our employees to enhance their lives in and out of the office as they progress and grow with the company. In that regard, we are pleased to report a diverse employee base in which women represent 46% of our global workforce and 43% of management. We believe that our success over the long run has been the result of the diverse backgrounds and perspectives of our employees and our directors alike. Being a good corporate citizen has been part of the fabric of W. P. Carey since our founding in 1973. Our culture was built on the concept of Doing Good While Doing Well and challenges the company and our employees to consider the impact of our business on society and to give back to our communities. Our Carey Forward volunteer program has enabled our employees to support many organizations with both time and funding that creates a positive impact. As always, we would like to take this opportunity to highlight that we value your input and welcome an open dialogue with our investors. We provide information in this Proxy Statement on how you can contact us at any time. We are proud of our performance and believe that our current Board and management team will build on our more than 45-year heritage, focused on providing our fellow shareholders with stable growth of both dividends and Real Estate AFFO over the long-term. We value your investment in W. P. Carey, your input and your support. On behalf of the entire Board of Directors, we thank you for your continued confidence in us. |
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Benjamin H. Griswold, IV Non-Executive Chairman Board of Directors |
Jason E. Fox Chief Executive Officer Board of Directors |
Proxy Statement and Notice of 2019 Annual Meeting | 2
Table of Contents |
3 | Proxy Statement and Notice of 2019 Annual Meeting
Proxy Summary |
This summary highlights information contained in this proxy statement. The summary does not contain all of the information
you should consider, and you should read the entire proxy statement carefully before voting.
2019 Annual Meeting of Stockholders |
Date and Time |
Thursday, June 13, 2019, 1:30 p.m.
Location |
DLA Piper LLP US, 1251 Avenue of the Americas, 27th Floor, New York, NY 10020
Voting |
Stockholders as of the record date, April 2, 2019, are entitled to vote; each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals.
Voting Matters and Board Recommendations |
Proposal |
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Board Recommendation |
Page |
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1 |
Election of ten Directors named in this proxy statement for 2019 |
FOR each Nominee |
8 |
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2 |
Consideration of an advisory vote on executive compensation on executive compensation |
FOR |
33 |
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3 |
Ratification of the appointment of PricewaterhouseCoopers LLP as Independent Registered Public Accounting Firm for 2019 |
FOR |
56 |
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Performance Highlights |
We are proud of our accomplishments over the past year, most notably our merger with CPA:17, which essentially completed our evolution to a pure-play net-lease REIT. We take a long-term view with respect to both investing and our performance, and we were pleased to have executed well on behalf of our shareholders.
Proxy Statement and Notice of 2019 Annual Meeting | 4
Proxy Summary |
Governance and Board Highlights |
Because we believe that a company's tone is set at the top, we are proud to report on our Corporate and Board-level governance provisions, many of which are recognized as best practices. Critical components of our governance profile include:
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Director Independence and Compliance |
All directors, other than our CEO, are independent No related-party transactions Our Board reviews the independence of its members annually Led by an Independent Chairman, separate from our CEO All directors attended 75% or more of the Board or Board Committee meetings in 2018 All directors are in compliance with our stock ownership guidelines (5x annual cash retainer) A limitation on over-boarding by our directors |
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Strong Shareholder Rights |
Shareholder proxy access with a "3/3/20/20" market standard Irrevocably opted out of Maryland staggered board provisions; All directors elected annually Majority voting for directors Shareholders can amend bylaws with a majority vote No poison pill |
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Our Approach to Compensation |
In 2018, we introduced annual cash bonus plan for all employees designed to provide greater transparency We design our compensation plans within a set of strong compensation governance provisions. These include:
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What We Do | What We Don't Do | |||||||||||
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✓ | Deliver a significant percentage of annual compensation in the form of variable compensation tied to multi-year performance through our new annual cash incentive plan | ✗ | Do not provide excise tax gross-ups | |||||||||
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✓ | Deliver half of the long-term incentive plan value at grant through PSUs measuring 3-year performance | ✗ | Do not have employment agreements | |||||||||
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✓ | Provide total compensation opportunities that approximates the market median | ✗ | Do not have executive perquisites | |||||||||
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✓ | Compare executive compensation levels and practices against a relevant peer group of similarly-sized REITs | ✗ | Do not have excessive severance benefits | |||||||||
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✓ | Engage an independent compensation consultant that reports directly to the Compensation Committee and provides no other services to the Company | ✗ | Do not allow current dividends to be paid on unearned PSUs or unvested RSUs. | |||||||||
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✓ | Require meaningful levels of stock ownership among our executive officers and non-employee directors | ✗ | Do not allow hedging or short sales of our securities, and have meaningful limits on pledging | |||||||||
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✓ | Maintain a clawback policy | ✗ | Do not provide enhanced retirement benefits or other supplemental executive retirement plans, known as SERPs | |||||||||
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✓ | Conduct annual compensation risk review | ✗ | Do not allow for any single-trigger cash severance benefits upon a change-in-control | |||||||||
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5 | Proxy Statement and Notice of 2019 Annual Meeting
Proxy Summary |
Director Nominees and Diversity |
Our Board comprises our CEO and nine independent directors, and benefits from a mix of tenured and newer directors, men and women, each with different backgrounds. We believe this diversity provides the varied viewpoints and robust discussion that result in better outcomes for our shareholders.
Committee Memberships | ||||||||||||||||||
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Name | Age | Director Since |
Primary Occupation | Independent | Audit | Compensation | Executive | Investment | Nominating & Corporate Governance |
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Mark A. Alexander | 60 | 2016 | Managing Member Landmark Property Group LLC | |||||||||||||||
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Peter J. Farrell | 58 | 2016 | Partner and Co-founder CityInterests, LLC and PADC Realty Investors | |||||||||||||||
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Robert J. Flanagan | 62 | 2018 | President, Clark Enterprises, Inc. and Trustee, A. James & Alice B. Clark Foundation | |||||||||||||||
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Jason E. Fox | 46 | 2018 | Chief Executive Officer, W. P. Carey Inc. | |||||||||||||||
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Benjamin H. Griswold, IV Non-Executive Chairman of the Board |
78 | 2006 | Partner and Chairman, Brown Advisory, Inc. | |||||||||||||||
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Axel K.A. Hansing | 76 | 2011 | Senior Partner Coller Capital, Ltd. | |||||||||||||||
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Jean Hoysradt | 68 | 2014 | Former Chief Investment Officer, Mousse Partners Limited | |||||||||||||||
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Margaret G. Lewis | 64 | 2017 | Deputy Chair, Federal Reserve Bank of Richmond | |||||||||||||||
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Christopher J. Niehaus Non-Executive Vice Chairman of the Board |
60 | 2016 | Partner, Member of the Global Investment Committees, GreenOak Real Estate | |||||||||||||||
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Nick J.M. van Ommen | 72 | 2011 | Former CEO, European Public Real Estate Association | |||||||||||||||
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Committee Chair Financial Expert
Skills |
Tenure |
Independence |
Diversity |
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Proxy Statement and Notice of 2019 Annual Meeting | 6
Proxy Summary |
Environmental, Social and Governance Initiatives |
Since our founding in 1973, we have followed two core principles: Investing for the Long Run and Doing Good While Doing Well. Our founder, Wm. Polk Carey, believedas we do todaythat our business by its very nature promotes prosperity and that our responsibility does not end there. He understood that good corporate citizenship was fundamental to good business and to creating long-term value for our investors. Today his vision and values live on through our corporate responsibility initiatives, focused on our environmental, social and governance objectives.
7 | Proxy Statement and Notice of 2019 Annual Meeting
Proposal One: Election of Ten Directors |
We first ask that you vote to re-elect each of the current members of our Board of Directors standing for re-election. We lead with this vote because we, the Board of Directors, oversee W. P. Carey as stewards for all of our stakeholders, including you, our shareholders. |
We also lead with this vote because we are proud of all of the actions our Board took over the past year, including:
We believe these provisions and actions demonstrate our commitment to protecting your interests as shareholders. As we ask for your vote, we should note that our directors are elected annually, subject to a majority voting requirement, and are led by an independent Non-Executive Chairman separate from our Chief Executive Officer ("CEO"). Aside from our CEO, our Board members are independent, and all Directors are committed to enhancing shareholder value.
Proxy Statement and Notice of 2019 Annual Meeting | 8
Proposal One: Election of Ten Directors |
The Board recommends a vote FOR each of the nominees |
Nominees for the Board of Directors |
Our Board members are diverse in talents, experiences and backgrounds but share track records of successful management and oversight of public and private companies. The Board recommends a vote FOR each of the nominees set forth on the following pages so we can continue along the path we have been actively pursuing.
Unless otherwise specified, proxies will be voted FOR the election of the named nominees, each of whom was recommended by the Nominating and Corporate Governance Committee and approved by the Board. Assuming the presence of a quorum at the meeting of stockholders to be held on June 13, 2019 (the "Annual Meeting"), the affirmative vote of a majority of the votes cast for a nominee by the stockholders present, in person or by proxy, is required to elect each nominee.
9 | Proxy Statement and Notice of 2019 Annual Meeting
Nominees for the Board of Directors |
Mark A. Alexander |
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Chair of the Director |
| Mr. Alexander brings to the Board over 30 years of international business experience in operations, mergers & acquisitions and accounting. He has developed expertise in strategic planning, operational management, public & private capital markets, financial analysis, accounting and investor relations. Mr. Alexander's experience as a chief executive officer, certified public accountant, and public company board member make him qualified to be a W. P. Carey Board member and to be Chairman of the Audit Committee. | |
CURRENTLY Managing Member Landmark Property Group, LLC: 2009 Present PREVIOUSLY SVP, Corporate Development Senior Accountant & CPA PUBLIC BOARDS Kaydon Corp. (NYSE-listed): 2007 2013 EDUCATION |
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Peter J. Farrell |
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Chair of
the Director |
| Mr. Farrell brings to the Board 35 years of experience in real estate investment, finance, leasing and development as well as public, private and international fund raising. His broad industry exposure and diverse skill set, along with his operating and board experience in the REIT industry, adds a valuable perspective to the W. P. Carey Board and provides a significant source of industry knowledge and expertise to the Company's committees on which he serves. | |
CURRENTLY Partner and Co-founder CityInterests, LLC and PADC Realty Investors: 2004 Present PREVIOUSLY PUBLIC BOARDS EDUCATION |
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Proxy Statement and Notice of 2019 Annual Meeting | 10
Nominees for the Board of Directors |
Robert J. Flanagan |
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Director |
| Mr. Flanagan has served as President of Clark Enterprises, Inc. since 2015 and was its Executive Vice President from 1989 to 2015. At Clark Enterprises, Mr. Flanagan oversees the acquisition, management and development of new investment opportunities. As a result of these and other professional experiences, Mr. Flanagan has a deep understanding and knowledge of a broad variety of subject areas, including accounting, finance and capital structure; strategic planning and leadership of complex organizations; people management; board governance; and board practices of other entities. | |
CURRENTLY President Clark Enterprises, Inc.: 1989 Present Trustee, A. James & Alice B. Clark PREVIOUSLY PUBLIC BOARDS Martek Biosciences Corporation (NASDAQ-listed): OTHER BOARDS Chairman of the Board, Federal City Council, Svelte Medical Systems Vascular Therapies, Inc. EDUCATION MS in Taxation, American CPA |
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11 | Proxy Statement and Notice of 2019 Annual Meeting
Nominees for the Board of Directors |
Jason E. Fox |
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Director |
| Mr. Fox brings to the Board over 17 years of business and investment experience, having been responsible, most recently as Head of Global Investments, for sourcing, negotiating, and structuring acquisitions on behalf of W. P. Carey and the various programs it managed since joining the Company in 2002. He has a deep understanding of W. P. Carey's business and its investment strategies. Further, Mr. Fox's role as CEO and previous service as W. P. Carey's President, overseeing both the investment and asset management activities of the Company, make information and insight about the Company's business directly available to the Board in its deliberations. He also serves as a Trustee of the W. P. Carey Foundation. | |
CURRENTLY CEO W. P. Carey Inc.: 2018 Present PREVIOUSLY PUBLIC BOARDS EDUCATION MBA, Harvard Business School |
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Benjamin H. Griswold, IV |
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Non-Executive Chair of the Director |
| Mr. Griswold brings to the Board almost 50 years of experience in the investment business, first as an investment banker and then as an investment advisor. He has extensive experience with, and understanding of, capital markets as well as security analysis and valuation. His board experience and his past experience as a director of the New York Stock Exchange, give him a detailed understanding of corporate governance in general and audit, compensation, governance, and finance functions in particular. | |
CURRENTLY Partner and Chairman, Brown Advisory, Inc.: 2005 Present PREVIOUSLY PUBLIC BOARDS Stanley Black & Decker (NYSE-listed): New York Stock Exchange: 1993 1999 EDUCATION MBA, Harvard University |
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Proxy Statement and Notice of 2019 Annual Meeting | 12
Nominees for the Board of Directors |
Axel K.A. Hansing |
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Director |
| Mr. Hansing brings to the Board over 40 years of experience in international corporate and investment banking, real estate financing, asset management, and private equity investing, both as a General and a Limited Partner. In his current role as Senior Partner at Coller Capital, Mr. Hansing is responsible for the origination, execution, and monitoring of investments. Prior to founding Hansing Associates, he served as Managing Director of Equitable Capital Management in London and New York, Head of the International Division of Bayerische Hypothekenund Wechselbank AG (now part of UniCredit SpA) in Munich and New York and held roles with Merrill Lynch International Banking in Hong Kong and London as well as with Marine Midland Bank (now part of HSBC) in London and New York. | |
CURRENTLY Senior Partner Coller Capital, Ltd.: 2000 Present PREVIOUSLY Managing Director EDUCATION Advanced Management Program, |
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Jean Hoysradt |
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Director |
| Ms. Hoysradt brings to the Board over 40 years of investment and financial expertise in real estate, debt and equity. Her former role as Chief Investment Officer of Mousse Partners, a prominent private family investment office, required both domestic and international business expertise. Prior to her position as head of the Investment Department and Treasury for New York Life Insurance Company, she held positions in investment banking and investment management at Manufacturers Hanover, First Boston and Equitable Life. Ms. Hoysradt served as director of the Duke University Management Company from August 2005 to August 2018, including acting as chair of its audit committee. She also served as a director of The Swiss Helvetia Fund (a closed end investment company) from July 2017 to September 2018. | |
PREVIOUSLY Chief Investment Officer Mousse Partners Limited: 2001 2015 SVP and head of the PUBLIC BOARDS EDUCATION MBA, Columbia University |
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13 | Proxy Statement and Notice of 2019 Annual Meeting
Nominees for the Board of Directors |
Margaret G. Lewis |
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Director |
| Ms. Lewis is the former president of Hospital Corporation of America's ("HCA's") Capital Division, which includes facilities in northern, central and southwestern Virginia, New Hampshire, Indiana and Kentucky. She began her career with HCA in 1978 and held several positions in nursing management and quality management before becoming chief nursing officer of HCA's Richmond Division in 1997. Ms. Lewis became chief operating officer of CJW Medical Center in 1998 and chief executive officer in 2001. She is a registered nurse and a fellow of the American College of Healthcare Executives. Ms. Lewis brings extensive leadership experience and management skills to the board. Her variety of senior management roles provides expertise in executive decision-making and strategic planning. | |
CURRENTLY Deputy Chairman Federal Reserve Bank of Richmond: 2019; 2014 2016 PREVIOUSLY PUBLIC BOARDS Federal Reserve Bank of Richmond: Smithfield Foods (NYSE-listed): 2011 2013 EDUCATION BS in Nursing, Medical College of Virginia MBA, Averett University Fellow of the American College of |
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Christopher J. Niehaus |
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Non-Executive Chair of the Director |
| Mr. Niehaus serves as a Partner and member of the global investment committees of GreenOak Real Estate, a global real estate investment management firm. He brings to the Board over 36 years of experience in the real estate industry and a broad range and depth of experience in finance, real estate investment banking, portfolio management and private equity, as well as public, private and international fund raising and fund management. Mr. Niehaus spent 28 years at Morgan Stanley, where he helped build and run one of the leading global real estate banking, lending and investing businesses. His skill set and exposure to a variety of industries add valuable perspective to the W. P. Carey Board. Mr. Niehaus serves on the Executive Board of the International Council of Shopping Centers and previously has served on the boards of private equity real estate companies in the U.S., Europe and Asia. | |
CURRENTLY Partner, Member of the Global Investment Committee GreenOak Real Estate: 2011 Present PREVIOUSLY Co-Head of Global Real Estate EDUCATION |
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Proxy Statement and Notice of 2019 Annual Meeting | 14
Nominees for the Board of Directors |
Nick J.M. van Ommen |
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Director |
| Mr. van Ommen has served in various roles across the banking, venture capital, and asset management sectors through his career and brings to the Board over 35 years of financial and real estate experience, particularly in Europe. In his almost ten years serving as CEO of the European Public Real Estate Association, Mr. van Ommen was responsible for promoting, developing and representing the European public real estate sector. In addition to his public boards, Mr. van Ommen currently serves on the supervisory board and as chairman of the audit committee of Allianz Benelux SA, a private company that offers insurance products in Belgium, The Netherlands and Luxembourg, and as chairman of the audit committee of Allianz Netherlands Group NV, a life insurance company wholly owned by Allianz Benelux SA in Belgium. He is also a member of the advisory board of BNP Paribas Real Estate Advisory Netherlands BV. | |
PREVIOUSLY Chief Executive Officer European Public Real Estate Association: 2000 2008 PUBLIC BOARDS IMMOFINANZ AG (Austria-listed VASTNED Retail (Belgium-listed Intervest Offices & Warehouses EDUCATION |
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15 | Proxy Statement and Notice of 2019 Annual Meeting
Our Board brings a strong mix of real estate expertise, international insights, and public company board and management experience. We believe our director nominees have the skills and expertise necessary to fulfill the Board's responsibilities for strategic oversight, succession planning, risk management and other fiduciary duties. We added one new independent director in 2018 and one director did not stand for re-election at the 2018 Annual Meeting. We believe that the Board and each Committee now have an excellent balance of experienced directors and those who bring a fresh perspective. |
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Tenure |
Independence |
Diversity |
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Proxy Statement and Notice of 2019 Annual Meeting | 16
Committees of the Board of Directors |
Members of our Board of Directors serve on one or more of our Board's standing committees, which are our Compensation, Audit, and Nominating and Corporate Governance Committees. As required by the regulations of the Securities and Exchange Commission ("SEC"), the written charters for each of these standing committees can be viewed on our website, www.wpcarey.com, under the heading "Governance" in our "Investors" section. In addition to our standing committees, we have an Investment Committee. The table below reflects the membership of these committees as of the date of this Proxy Statement. From time to time, the Board may also establish certain ad hoc committees for specific purposes. |
Membership and Functions of the Committees of the Board
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Members Number of Meetings |
setting compensation programs that apply generally to our employees; reviewing compensation with respect to directors; reviewing and making recommendations to the Board regarding the compensation structure for all current named executive officers ("NEOs") and other key employees, including salaries, cash incentive plans and equity-based plans; reviewing goals and objectives relevant to our NEOs and key employees, evaluating their performance, and approving their compensation levels for both annual and long-term incentive awards; and reviewing and approving the terms and conditions of stock grants. There were five regular meetings and one special meeting of the Compensation Committee held during 2018. |
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Members Number of Meetings |
assisting the Board in monitoring the integrity of the financial statements and management's report of internal controls over financial reporting of the Company, the compliance with legal and regulatory requirements, and the independence, qualifications, and performance of our internal audit function and Independent Registered Public Accounting Firm; engaging an Independent Registered Public Accounting Firm, reviewing with the Independent Registered Public Accounting Firm the plans and results of the audit engagement, approving professional services provided by the Independent Registered Public Accounting Firm, and considering the range of audit and non-audit fees; reviewing the internal audit charter and scope of the internal audit plan; and reviewing and discussing the Company's internal controls with management, the internal auditors and the Independent Registered Public Accounting Firm and reviewing the results of the internal audit program. There were eight regular meetings of the Audit Committee held during 2018. |
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17 | Proxy Statement and Notice of 2019 Annual Meeting
Committees of the Board of Directors |
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Members Number of Meetings |
developing and implementing policies and practices relating to corporate governance, including monitoring implementation of our corporate governance policies; oversight of the Company's ESG initiatives; and developing and reviewing background information of candidates for the Board of Directors, including those recommended by shareholders, and making recommendations to the Board regarding such candidates. There were four regular meetings of the Nominating and Corporate Governance Committee held during 2018. |
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Members Number of Meetings |
approving W. P. Carey's investments greater than $100 million to ensure that they satisfy our relevant investment criteria; reviewing all of W. P. Carey's investments on a quarterly basis; and reviewing and approving investments made on behalf of CPA:18 Global and Carey European Student Housing Fund I, L.P. ("CESH"). There were ten meetings of the Investment Committee held during 2018. |
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Proxy Statement and Notice of 2019 Annual Meeting | 18
Board Governance |
Our directors each hold office until the next annual meeting of stockholders except in the event of death, resignation, or removal. If a nominee is unavailable for election, the Board may reduce its size or designate a substitute. If a substitute is designated, proxies voting on the original nominee will be cast with regard to the substituted nominee. Currently, the Board is unaware of any circumstances that would result in a nominee being unavailable.
Board Meetings and Director Attendance
There were six regular meetings and three special meetings of the Board held in 2018, and each director attended at least seventy-five percent of the aggregate of such meetings and of the meetings held during the year by the Committees of which he or she was a member. Under the Corporate Governance Guidelines adopted by our Board (the "Guidelines"), the directors are required to make every effort to attend each Board meeting and applicable Committee meetings, except in unavoidable circumstances. Although there is no specific policy regarding director attendance at meetings of stockholders, directors are invited and encouraged to attend. All of the current directors attended the Company's 2018 Annual Meeting. In addition to Board and Committee meetings, our directors also engage in informal group communications and discussions with the Non-Executive Chairman of the Board and the CEO, as well as with members of senior management regarding matters of interest.
Board Leadership Structure and Risk Oversight
Mr. Griswold has served as Non-Executive Chairman of the Board since January 2012. The primary responsibility of the Non-Executive Chairman is to preside over meetings of the Board of Directors as well as to preside over periodic executive sessions of the Board in which the CEO and/or other members of management do not participate. In January 2018, the Board determined, upon the recommendation of the Nominating and Corporate Governance Committee, to appoint Mr. Niehaus as Non-Executive Vice Chairman of the Board. The primary responsibility of the Vice Chairman is to preside over meetings of the Board in the absence of the Chairman. The Chairman and Vice Chairman are also responsible, together with members of our senior management team, for establishing Board agendas and for working closely with our CEO on the overall direction of the Company to enhance long-term shareholder value. The Board believes that, as a former Chairman of the Board of Alex. Brown & Sons, Mr. Griswold is well-suited to preside over both full and executive sessions of the Board and to fulfill the other duties of the Chairman. The Board also believes that Mr. Niehaus
is well-qualified for the role of Vice Chairman given the depth of his experience and his previous role as Vice Chairman of Morgan Stanley Real Estate.
Our CEO, Mr. Fox, is also a member of the Board of Directors. The Board considers the CEO's participation to be important in order to make information and insight about the Company's business and its operations directly available to the directors in their deliberations.
Our Board of Directors has overall responsibility for risk oversight. The Board of Directors reviews and oversees our Enterprise Risk Management ("ERM") program, which is a company-wide initiative that involves our senior management and other personnel acting in an integrated effort to identify, assess and manage risks that may affect our ability to execute our corporate strategy and fulfill our business objectives. These activities involve the identification, prioritization and assessment of a broad range of risks, including operational, financial, strategic, and compliance risks, and the formulation of plans to manage these risks and mitigate their effects.
As part of our ERM program, management provides periodic updates to our Board of Directors with respect to key risks and discusses appropriate risk response strategies. Throughout the year, the Board, and the Committees to which it has delegated responsibility, dedicates a portion of their meetings to discuss specific risk topics in greater detail. Strategic and operational risks are presented and discussed in the context of the CEO's report on operations to the Board of Directors at regularly scheduled meetings and at presentations to the Board of Directors and its Committees by management. Additionally, at least annually, our Audit Committee discusses with management and the Director of Internal Audit our significant financial risk exposures, including cybersecurity risks, and steps that have been taken to monitor and control such exposures.
Our Compensation Committee reviews the risks related to our compensation policies and practices and assesses the impact to our risk profile, at least on an annual basis. Management, with the Compensation Committee, regularly reviews our compensation programs, including incentives that may create, and factors that may reduce, the likelihood of excessive risk taking in order to determine whether such programs present a significant risk to the Company.
Our Corporate Governance Guidelines establish rules
19 | Proxy Statement and Notice of 2019 Annual Meeting
Board Governance |
regarding the independence of our directors. The Guidelines, which we believe meet or exceed the Listing Standards of the New York Stock Exchange (the "NYSE") and the rules of the SEC, include the Company's definition of Independent Director and can be found under the heading "Governance" in the "Investors" section of the W. P. Carey website, www.wpcarey.com. Pursuant to the Guidelines, the Board undertook its annual review of Director Independence in March 2019. During this review, the Board considered any transactions and relationships between each director and nominee, or any member of his or her immediate family, and W. P. Carey and its subsidiaries and affiliates, including those reported under Certain Relationships and Related Transactions below. The Board also examined any transactions and relationships between each director and nominee or their affiliates and members of our senior management or their affiliates. As provided in the Guidelines, the purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that the director is independent.
The NYSE also requires that the Board of Directors determine whether a director is "independent" for purposes of the NYSE Listing Standards. The Nominating and Corporate Governance Committee has asked each director and nominee to specify in writing the nature of any relevant relationships such individual may have with the Company, including, but not limited to, any relationships that would specifically preclude a finding of "independence" under those Listing Standards. Upon review of these disclosures, the Board has affirmatively determined that none of the directors or nominees noted as "independent" in this Proxy Statement has a material relationship with W. P. Carey that would interfere with his or her independence from the Company and its management.
As a result, the Board has affirmatively determined that director nominees Alexander, Farrell, Flanagan, Griswold, Hansing, Hoysradt, Lewis, Niehaus and van Ommen are independent of the Company and its management under the standards set forth in the Guidelines, applicable federal laws, the rules of the SEC and the NYSE's Listing Standards and for the purpose of serving on the relevant Board committees, where applicable. Mr. Fox is not considered to be an independent director because of his current employment as CEO of W. P. Carey.
The Board has determined that none of the directors who currently serve on the Compensation, Audit or Nominating and Corporate Governance Committees, or who served at any time during 2018 on such committees, has or had a relationship to W. P. Carey that may interfere with his or her independence from W. P. Carey and its management, and
therefore, as required by applicable regulations, all such directors were or are, as applicable, "independent" as defined in the NYSE Listing Standards and by the rules of the SEC.
The Board does not mandate director retirement at a specified age, but instead remains committed to actively refreshing the Board based on annual performance reviews and an evaluation of the skills and experience necessary to fulfill the Board's responsibilities to shareholders. Currently, the average tenure of our directors is less than five years. We believe that we have demonstrated our commitment to actively refreshing our Board, with six new directors joining since 2016. Most recently, Robert J. Flanagan joined the Board in March 2018, while one director did not stand for re-election at the 2018 Annual Meeting.
The Nominating and Corporate Governance Committee considers candidates for Board membership suggested by Board members, management, shareholders and outside advisors. A shareholder who wishes to recommend a prospective nominee for the Board should notify our Corporate Secretary or the Nominating and Corporate Governance Committee in writing with the information and in the time period required by our Bylaws, which is set forth in more detail in "Shareholder Proposals" and "Other Communications with the Board" in the Corporate Governance section of this Proxy Statement.
Once a candidate has been recommended to the Corporate Secretary or Nominating and Corporate Governance Committee, there are a number of actions undertaken to complete a full evaluation of the candidate, including the following:
Proxy Statement and Notice of 2019 Annual Meeting | 20
Board Governance |
Existing Board members are considered for nomination on an annual basis, by undertaking the following actions:
In considering new candidates and existing Board members for nomination to the Board, this year the Nominating and Corporate Governance Committee and the Board evaluated the following:
Our Board feels confident that each of the ten individuals we have nominated has the experience and skill sets necessary to fulfill all Board and Committee responsibilities. We encourage you to review our Board accomplishments and biographies and to vote for all ten Board nominees.
We have what we believe to be the most prevalent proxy access model, the "3/3/20/20" structure. The following is a summary of the provisions related to our proxy access bylaw and is qualified in its entirety by reference to a complete set of our Bylaws:
Shareholders' Eligibility to Nominate
Our Bylaws generally permit any shareholder or group of up to 20 shareholders who have maintained continuous qualifying ownership of at least 3% or more of our outstanding Common Stock for at least the previous 3 years to include a specified number of director nominees in the Company's proxy materials for our annual meeting of stockholders, as described below.
Number of Shareholder-Nominated Candidates
The maximum number of shareholder-nominated candidates will be equal to the greater of: (a) two candidates or (b) 20% of the directors in office at the time of nomination. If the 20% calculation does not result in a whole number, the maximum number of shareholder-nominated candidates would be the closest whole number below 20%. Shareholder-nominated candidates that the Board of Directors determines to include in the proxy materials as Board-nominated candidates will be counted against the 20% maximum.
Calculation of Qualifying Ownership
As more fully described in our Bylaws, a nominating shareholder will be considered to own only the shares for which the shareholder possesses the full voting and investment rights and the full economic interest (including the opportunity for profit and risk of loss). Under this provision, borrowed or hedged shares do not count as "owned" shares. A shareholder will be deemed to "own" shares that have been loaned by or on behalf of the shareholder to another person if the shareholder has the right to recall such loaned shares, undertakes to recall, and does recall such loaned shares prior to the record date for the annual meeting and maintains qualifying ownership of such loaned shares through the date of the meeting.
21 | Proxy Statement and Notice of 2019 Annual Meeting
Board Governance |
Procedure for Selecting Candidates in the Event the Number of Nominees Exceeds 20%
If the number of shareholder-nominated candidates exceeds 20% of the directors in office, each nominating shareholder will select one shareholder-nominated candidate, beginning with the nominating shareholder with the largest qualifying ownership and proceeding through the list of nominating shareholders in descending order of qualifying ownership until the permitted number of shareholder-nominated candidates is reached.
Nominating Procedure
In order to provide adequate time to assess shareholder-nominated candidates, requests to include shareholder-nominated candidates in proxy materials must be received no earlier than 150 days and no later than 120 days before the anniversary of the date that we mailed the proxy statement for the previous year's annual meeting of stockholders.
Information Required of All Nominating Shareholders
As more fully described in our Bylaws, each shareholder seeking to include a director nominee in the proxy materials is required to provide certain information, including:
Nominating shareholders are also required to make certain representations and agreements, including with regard to:
Information Required of All Shareholder Nominees
Each shareholder nominee is required to provide the representations and agreements required of all nominees for election as director, including certain items noted in our Bylaws that we believe are consistent with current market practice.
Disqualification of Shareholder Nominees
A shareholder nominee would not be eligible for inclusion in the proxy statement under certain circumstances enumerated in our Bylaws, which we believe to be consistent with current market practice.
Supporting Statement
Nominating shareholders are permitted to include in the proxy statement a 500-word statement in support of their nominee(s). We may omit any information or statement that we believe would violate any applicable law or regulation.
Shareholder Amendment of Bylaws
Our Board of Directors has the power to adopt, alter or repeal any provision of our Bylaws and to make new Bylaws. Our shareholders also have the power to alter or repeal any provision of our Bylaws and adopt new Bylaws with the approval of at least a majority of all votes entitled to be cast on the matter.
Proxy Statement and Notice of 2019 Annual Meeting | 22
Compensation of the Board of Directors |
Our non-executive directors are paid in two principal ways: an annual cash retainer and an annual restricted share award ("RSA"). Prior to July 1, 2018, Directors were paid an annual cash retainer of $90,000 and an RSA with a grant date value of $80,000. In early 2018, the Compensation Committee requested that its independent compensation consultant, Frederic W. Cook & Co., Inc. ("FW Cook"), conduct a review of the compensation paid to Directors as part of the Committee's periodic review of such practices. Based on the results of that review and the advice of FW Cook, in June 2018 the Compensation Committee recommended, and the Board approved, an increase to both the annual cash retainer and the annual RSA value, which the Committee and Board noted had not been increased since 2013. As a result, beginning July 1, 2018, Directors are paid an annual cash retainer of $100,000 and an RSA with a grant date value of $100,000. These Director RSAs are granted on or about July 1 of each year (although directors may receive a pro-rated RSA if they commence service after July 1). Director RSAs, which are scheduled to vest in full one year after the date of grant (or in the case of any pro-rated grants made during the year, on the same date as the annual grants for that year) and have voting rights, are granted under the W. P. Carey Inc. 2017 Share Incentive Plan. Current dividends are not paid on unvested Director RSAs granted under that plan until the awards are vested. The annual fees as of the date of this Proxy Statement paid to Directors for all positions held are:
Cash |
|
|||
---|---|---|---|---|
| | | | |
All Independent Directors |
$ | 100,000 | ||
| | | | |
Additional Fees: |
||||
Non-Executive Chairman |
$ | 75,000 | ||
| | | | |
Non-Executive Vice Chairman |
$ | 40,000 | ||
| | | | |
Audit Committee Chair |
$ | 20,000 | ||
| | | | |
Compensation Committee Chair |
$ | 15,000 | ||
| | | | |
Nominating and Corporate Governance Chair |
$ | 10,000 | ||
| | | | |
Investment Committee Chair |
$ | 7,500 | ||
| | | | |
Stock |
|
|
---|---|---|
| | |
Form of payment: An RSA granted on or about July 1, with a grant date value of $100,000. | ||
Time of payment: Shares vest in full on the first anniversary of the grant. |
23 | Proxy Statement and Notice of 2019 Annual Meeting
Compensation of the Board of Directors |
2018 DIRECTOR COMPENSATION TABLE
The following table sets forth information concerning the total compensation of the individuals who served as Non-Employee Directors during 2018, including service on all committees of the Board, as described above:
Name |
Fees Earned or Paid in Cash(1) ($) |
Stock Awards(2) ($) |
Total(3) ($) |
|||||||
---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | |
Mark A. Alexander |
115,000 | 99,970 | 214,970 | |||||||
| | | | | | | | | | |
Peter J. Farrell |
110,000 | 99,970 | 209,970 | |||||||
| | | | | | | | | | |
Robert J. Flanagan(4) |
72,500 | 120,329 | 192,829 | |||||||
| | | | | | | | | | |
Benjamin H. Griswold, IV |
170,000 | 99,970 | 269,970 | |||||||
| | | | | | | | | | |
Axel K.A. Hansing |
95,000 | 99,970 | 194,970 | |||||||
| | | | | | | | | | |
Jean Hoysradt |
95,000 | 99,970 | 194,970 | |||||||
| | | | | | | | | | |
Margaret G. Lewis |
95,000 | 99,970 | 194,970 | |||||||
| | | | | | | | | | |
Dr. Richard C. Marston(5) |
45,000 | | 45,000 | |||||||
| | | | | | | | | | |
Christopher J. Niehaus(6) |
142,500 | 99,970 | 242,470 | |||||||
| | | | | | | | | | |
Nick J.M. van Ommen |
95,000 | 99,970 | 194,970 | |||||||
| | | | | | | | | | |
Proxy Statement and Notice of 2019 Annual Meeting | 24
Compensation of the Board of Directors |
DIRECTOR STOCK COMPENSATION TABLE
The following table reflects the Director RSAs, which were first granted in 2013, as well as any restricted stock units ("RSUs"), which were granted from 2008 until 2012 ("Director RSUs"), held by the individuals listed in the previous table, as of December 31, 2018, if any. Director RSUs were immediately vested when granted and pay current dividend equivalents but the payout of the underlying shares, on a one-for-one basis, was required to be deferred until the Director's service on the Board is complete.
|
Total RSU Awards (#) |
Total RSA Awards (#) |
|||||
---|---|---|---|---|---|---|---|
| | | | | | | |
Mark A. Alexander |
| 1,523 | |||||
| | | | | | | |
Peter J. Farrell |
| 1,523 | |||||
| | | | | | | |
Robert J. Flanagan |
| 1,523 | |||||
| | | | | | | |
Benjamin H. Griswold, IV |
8,521 | 1,523 | |||||
| | | | | | | |
Axel K.A. Hansing |
3,236 | 1,523 | |||||
| | | | | | | |
Jean Hoysradt |
| 1,523 | |||||
| | | | | | | |
Margaret G. Lewis |
| 1,523 | |||||
| | | | | | | |
Christopher J. Niehaus |
| 1,523 | |||||
| | | | | | | |
Nick J.M. van Ommen |
3,236 | 1,523 | |||||
| | | | | | | |
25 | Proxy Statement and Notice of 2019 Annual Meeting
Corporate Governance |
We believe that a company's tone is set at the top and are proud to report on our Board-level governance provisions, many of which are recognized as best practices. Critical components of our governance profile include:
These governance provisions are supplemented by our Code of Business Conduct and Ethics and provisions governing related party transactions, which are important elements of our overall approach to governance and are described below.
The date by which shareholder proposals must be received by W. P. Carey for inclusion in proxy materials relating to our annual meeting to be held in 2020 (the "2020 Annual Meeting") is December 11, 2019, and any such proposals must meet the other requirements of Rule 14a-8 under the Exchange Act.
In order for proposals submitted outside of Rule 14a-8 to be considered at the 2020 Annual Meeting, shareholder
proposals, including shareholder nominations for director, must comply with the advance notice and eligibility requirements contained in the Bylaws. The Bylaws provide that shareholders are required to give advance notice to W. P. Carey of any business to be brought by a shareholder before an annual stockholders' meeting. For business to be properly brought before an annual meeting by a shareholder, the shareholder must give timely written notice thereof to the Secretary of W. P. Carey at the principal executive offices of the Company. In order to be timely, a shareholder's notice must be delivered not later than 5:00 p.m. Eastern Time on the 120th day prior to the first anniversary of the date of mailing of the notice for the preceding year's annual meeting of shareholders nor earlier than the 150th day prior to the first anniversary of such mailing. Therefore, any shareholder proposals, including nominations for directors, submitted outside of Rule 14a-8 to be voted on at the 2020 Annual Meeting must be received by W. P. Carey not earlier than November 11, 2019 and not later than December 11, 2019. However, in the event that the date of the 2020 Annual Meeting is advanced or delayed by more than 30 days from the anniversary date of the Annual Meeting, for notice by the shareholder to be timely it must be delivered not earlier than the 150th day prior to the date of such annual meeting date and not later than 5:00 p.m. Eastern Time on the later of the 120th day prior to the date of such annual meeting or the tenth day following the day on which public announcement of the date of such annual meeting is first made by W. P. Carey. Such proposals and nominations must be made in accordance with, and include the information required to be set forth by, the Bylaws. An untimely or incomplete proposal or nomination may be excluded from consideration at the 2020 Annual Meeting.
A copy of our Bylaws is available upon request. Such requests and any shareholder proposals should be sent to Susan C. Hyde, Corporate Secretary, W. P. Carey Inc., 50 Rockefeller Plaza, New York, NY 10020. These procedures apply to any matter that a shareholder wishes to raise at any annual meeting, including those matters raised other than pursuant to Rule 14a-8. A shareholder proposal that does not meet the requirements summarized above or listed in the Bylaws will be considered untimely, and any proxy solicited by W. P. Carey may confer discretionary authority to vote on such proposal.
Other Communications with the Board
We value your input. Shareholders and other interested persons who wish to send communications on any topic to the Board, the Non-Executive Chairman of the Board, or the Independent Directors as a group may do so by writing to the Non-Executive Chairman of the Board, W. P. Carey Inc.,
Proxy Statement and Notice of 2019 Annual Meeting | 26
Corporate Governance |
50 Rockefeller Plaza, New York, NY 10020. The Nominating and Corporate Governance Committee has approved a process for handling communications to the Board in which, absent unusual circumstances or as contemplated by Committee charters, and subject to any required assistance or advice from legal counsel, Ms. Hyde is responsible for monitoring communications and for providing copies or summaries of such communications to the directors as she considers appropriate. The Board will give appropriate attention to written communications that are submitted and will respond if and as appropriate.
It is important that all of our business activities reflect our commitment to a culture of honesty and accountability. Our Code of Business Conduct and Ethics, which we refer to in this Proxy Statement as the Code of Ethics, sets forth the standards of business conduct and ethics applicable to all of our employees, including our executive officers and directors. Our Code of Ethics is available on our website, www.wpcarey.com, under the heading "Governance" in the "Investors" section. We also intend to post amendments to or waivers from the Code of Ethics, to the extent applicable to our principal executive officer, principal financial officer and principal accounting officer, at this location on the website; however, no such amendments or waivers have been granted to date.
Compliance with Anti-Bribery, Foreign Corrupt Practices Act, and Office of Foreign Assets Control Requirements
It is our policy to comply with all applicable laws and adhere to the highest level of ethical conduct, including international anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act, United Kingdom Bribery Act and similar laws in other jurisdictions. In that regard, we have adopted an Anti-Bribery and Foreign Corrupt Practices Act Policy that is posted on our employee portal and periodically distributed to appropriate personnel, and we ensure compliance with that policy by monitoring our activities abroad and through periodic employee training.
In addition, we have policies and procedures in place that promote and articulate our compliance with U.S. economic sanctions administered by the U.S. Department of Treasury, Office of Foreign Assets Control in all facets of our operations. We use a screening vendor with respect to all payments that we initiate. Our Economic Sanctions Compliance Policy is periodically distributed to appropriate personnel.
Other conflicts of interest, while not prohibited in all cases, may be harmful to W. P. Carey and therefore must be disclosed in accordance with the Code of Ethics. Our Chief Ethics Officer or, in his or her absence, our General Counsel, has primary authority and responsibility for the
administration of the Code of Ethics subject to the oversight of the Nominating and Corporate Governance Committee or, in the case of accounting, internal accounting controls or auditing matters, the Audit Committee.
Certain Relationships and Related Transactions
Policies and Procedures with Respect to Related Party Transactions
Our executive officers and directors are committed to upholding the highest legal and ethical conduct in fulfilling their responsibilities and recognize that related party transactions can present a heightened risk of potential or actual conflicts of interest. Employees, officers and directors have an obligation to act in the best interest of W. P. Carey and to put such interests at all times ahead of their own personal interests. In addition, all of our employees, officers and directors should seek to avoid any action or interest that conflicts with or gives the appearance of a conflict with the Company's interests. According to the Code of Ethics, a conflict of interest occurs when a person's private economic or other interest conflicts with, is reasonably expected to conflict with, or may give the appearance of conflicting with, any interest of W. P. Carey. The following conflicts of interest are prohibited, and each employee, officer and director must take all reasonable steps to detect, prevent, and eliminate such conflicts:
Transactions with Managed Programs
Through wholly-owned subsidiaries, we earn revenue as the advisor to the programs that we manage, which as of the date of this Proxy Statement are CPA:18 Global, CWI 1, CWI 2, and CESH (collectively, the "Managed Programs"). We have also entered into certain transactions with the Managed Programs, such as co-investments, loans, and the CPA:17 Merger. For more information regarding these transactions and the fees received by W. P. Carey from the Managed Programs, see Notes 3 and 4 to the consolidated financial statements in the 2018 Form 10-K.
27 | Proxy Statement and Notice of 2019 Annual Meeting
Corporate Responsibility Initiatives Supporting Environmental, Social and Governance Goals |
"By its nature, our work promotes jobs and prosperity. Doing Good While Doing Well means that when we are financing properties for companies, we are also helping the communities those companies serve. It is important to always ask, What is the impact of what we are doing? What is good for society? What is good for the country?" |
Wm. Polk Carey, Founder, W. P. Carey Inc.
2001
Environmental Practices |
Our commitment to sustainability is largely demonstrated by how we manage our day-to-day activities in our corporate offices. Over the last year, we:
Substantially all of our properties are net leased to our tenants on a triple-net basis, whereby they are responsible for maintaining the buildings and are in control of their energy usage and environmental sustainability practices.
We have taken steps to further involve our tenants in our sustainability initiatives and have an outreach program to educate and encourage them to employ responsible energy, water, and waste management practices and to introduce opportunities where W. P. Carey can help finance property-level sustainability solutions.
In evaluating new investments, we include an environmental assessment of the properties we underwrite as part of our analysis to understand sustainability practices and performance and to ensure the properties we acquire meet environmental standards.
Corporate Citizenship |
Wm. Polk Carey established the W. P. Carey Foundation in 1990 with a primary mission to support educational institutions and to promote business education, with the larger goal of improving America's competitiveness in the world. As a result of its support, thousands of young people around the country and abroad have seen increased educational opportunities.
We continue to consider good corporate governance to include being a good corporate citizen. We believe that it is our responsibility to give back to our communities and that our ability to recruit and retain top talent, to be welcomed in our communities, and to withstand whatever vicissitudes inevitably come our way depend on having established ourselves as being understanding of and responsive to the core values of the places in which we operate. As good stewards of our communities, W. P. Carey and the W. P. Carey Foundation continue to support educational programs as well as hospitals, museums and other community organizations. In addition, to continue Bill Carey's mission to encourage personal generosity, in the spirit of "Doing Good While Doing Well," the W. P. Carey Foundation supports the philanthropic activities of the W. P. Carey community by matching certain charitable contributions made by our employees and directors.
Carey Forward
Our Carey Forward program was established in 2012 shortly after the passing of Bill Carey and was inspired by his generosity. We have continued growing the Carey Forward program by demonstrating a sustained enthusiasm for building and fostering productive relationships between our company and our communities. The program is funded by the Company and encourages employees to become involved in philanthropic and charitable activities, devote their time and resources to meaningful causes and initiatives, and bring to philanthropic and community organizations the same level of skill and excellence they
Proxy Statement and Notice of 2019 Annual Meeting | 28
Corporate Responsibility Initiatives Supporting Environmental, Social and Governance Goals |
devote to their professional responsibilities. Although the organizations and activities we support can vary, our focus is on enhancing and further improving our communities through youth development and education, hunger relief, healthcare, and arts and restoration. Through the program, employees bring the same qualities to our community as they do to their professional work: excellence, commitment and, perhaps most important, Doing Good While Doing Well.
Investing in our Employees |
When we Invest for the Long Run, our employees are at the core of that philosophy. We strive to make W. P. Carey a great place to work and to attract and surround ourselves with the best and brightest; we want to enhance their lives in and out of the office as they progress and grow with the company. By engaging with our employees and investing in their careers through training and development, we are building a talent pool capable of executing our business strategies.
Diversity |
Diversity and inclusion is an organic part of who we are and is supported at all levels of the organization. W. P. Carey is an equal opportunity employer and considers qualified applicants regardless of race, color, religion, gender, sexual orientation, or national origin, age, disability, military or veteran status, genetic information, or other statuses protected by applicable federal, state, and local law. As of December 31, 2018, women represented 46% of our global workforce and 43% of our managers. We believe that our success over the long run has been the result of the diverse backgrounds and perspectives of our employees, as well as our directors.
Employee Wellness |
The health and wellness of our employees and their families are paramount and our comprehensive benefits package is designed to address the changing needs of employees and their dependents.
Health and Wellness
Our Carey Wellness program provides our employees with education and practical guidance on nutrition, stress management and general healthy living matters that they can apply both in and out of the office.
Financial
29 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Officers |
We believe that our corporate governance creates the framework that makes our performance sustainable over the long run. Our executive officers are critical to creating and executing on the strategies that make us who we are, and in 2018 they continued to focus on identifying value for our shareholders, with the following key undertakings during the year: |
Proxy Statement and Notice of 2019 Annual Meeting | 30
Executive Officers |
Executive Officers
The Company's executive officers are determined by our Board of Directors. The executive officers as of the date of this Proxy Statement are as follows:
Jason E. Fox, Chief Executive Officer, Age 46 Mr. Fox became CEO on January 1, 2018 and has been an executive officer since 2015. Since he is also a Board member, his biography appears on page 12 in Proposal One: Election of Ten Directors. |
||
John J. Park, President, Age 54 Mr. Park became President of W. P. Carey in January 2018 and most recently served as Director of Strategy and Capital Markets since March 2016, after serving in various capacities since joining the Company as an investment analyst in 1987. During his tenure, he has spearheaded the transactions that have transformed the company, including consolidation and listing of CPA:1-9 as Carey Diversified LLC in 1998, its merger with W. P. Carey & Co. Inc. in 2000, liquidity transactions of CPA:10, CIP, CPA:12 and CPA:14, W. P. Carey's merger with CPA:15 and REIT conversion in 2012, W. P. Carey's merger with CPA:16 in 2014 and W. P. Carey's merger with CPA:17 Global in October 2018. The Board designated him as an executive officer in March 2016. Mr. Park received a B.S. in Chemistry from the Massachusetts Institute of Technology and an M.B.A. in Finance from Stern School of Business at New York University. He also serves as a trustee of the W. P. Carey Foundation. |
||
ToniAnn Sanzone, Chief Financial Officer, Age 42 Ms. Sanzone was appointed Chief Financial Officer of W. P. Carey in January 2017, having served as Interim Chief Financial Officer since October 2016 and, prior to that, as Chief Accounting Officer since June 2015. She has been an executive officer since 2016. She also served as Chief Financial Officer of CPA:17 Global and CPA:18 Global from October 2016 to March 2017, having previously served as Chief Accounting Officer of each since August 2015. In addition, Ms. Sanzone served as Chief Financial Officer of CWI 1 and CWI 2 from October 2016 to March 2017. Prior to joining the Company as Controller in April 2013, Ms. Sanzone worked from 2006 to 2013 at iStar Inc., a publicly-traded REIT, where she served in various capacities, including most recently as Corporate Controller. From 2004 to 2006, Ms. Sanzone served in various accounting and financial reporting roles at Bed Bath and Beyond, Inc., a publicly traded company. Ms. Sanzone also held various positions in the assurance and advisory services practice of Deloitte LLP from 1998 to 2004. Ms. Sanzone is a Certified Public Accountant licensed in the states of New York and New Jersey. She graduated magna cum laude with a B.S. in Accounting from Long Island University, C.W. Post (now LIU Post). |
||
Gino M. Sabatini, Managing Director and Head of Investments, Age 50 Mr. Sabatini has served as Head of Investments of W. P. Carey since December 2016 and oversees the sourcing, negotiating and structuring of investments in North America and Europe on behalf of W. P. Carey and CPA:18 Global as well as CPA:17 Global, through the date of its merger with W. P. Carey in October 2018. Mr. Sabatini joined the Company in 2000, serving in various capacities with increasing responsibilities in the Investment Department, including most recently as Head of U.S. Net Lease Investments, and he has been a Managing Director since 2009. The Board designated him as an executive officer in January 2018. Mr. Sabatini is a graduate of the University of Pennsylvania, where he was enrolled in the Management and Technology program. He received a B.Sc. in Mechanical Engineering from the University of Pennsylvania's Engineering School and a B.Sc. in Economics from the University of Pennsylvania's Wharton School. He earned his M.B.A. from Harvard Business School. |
||
31 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Officers |
Brooks G. Gordon, Managing Director and Head of Asset Management, Age 35 Mr. Gordon has served as Head of Asset Management of W. P. Carey since April 2017 and oversees asset management activity across all property types in North America and Europe on behalf of W. P. Carey and CPA:18 Global as well as CPA:17 Global, through the date of its merger with W. P. Carey in October 2018. Since joining the Company in 2006, Mr. Gordon has served in various capacities with increasing responsibilities in the Asset Management Department, including most recently as the head of the North American Asset Management team, and he has been a Managing Director since 2014. The Board designated him as an executive officer in January 2018. Mr. Gordon earned his B.A. in Economics from Johns Hopkins University, with a concentration in finance and management. He also graduated from Groton School in Groton, MA, and currently serves on the board of directors of The Hinckley Company, a privately held company that manufactures, services, and sells luxury sail and power boats. |
Proxy Statement and Notice of 2019 Annual Meeting | 32
Proposal Two: Advisory Vote on Executive Compensation |
The Board and the Compensation Committee, which is responsible for designing and administering W. P. Carey's executive compensation program, value the opinions expressed by shareholders in their vote on this proposal and will review and consider the outcome of the vote when making future decisions on executive compensation.
At our annual meeting of stockholders held on June 19, 2014, the Board recommended, and stockholders voted, to hold this advisory vote, known as a "Say-on-Pay" vote, every year, with which the Board agreed. Accordingly, in this Proposal Two, shareholders are being asked to vote on the following resolution:
RESOLVED, that the shareholders of W. P. Carey approve, on an advisory basis, the compensation of the company's Named Executive Officers, as disclosed pursuant to Item 402 of SEC Regulation S-K, including the Compensation Discussion and Analysis and the related compensation tables and narrative discussion in this Proxy Statement.
Our goal is to maintain an executive compensation program that fosters the short- and long-term goals of the company and its shareholders. We seek to accomplish this goal by motivating our senior leadership group to achieve a high level of financial performance. We believe that our executive compensation program is designed to align executive pay with performance and to motivate management to make sound financial decisions that increase the value of the company.
Assuming the presence of a quorum at the Annual Meeting, the affirmative vote of a majority of the votes cast by the stockholders, in person or by proxy, is necessary for approval of Proposal Two. However, as an advisory vote, Proposal Two is not binding upon the Board, the Compensation Committee, or W. P. Carey.
The Board recommends a vote FOR the approval, on an advisory basis, of the foregoing resolution approving the Company's executive compensation. |
33 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
Compensation Discussion and Analysis |
The following pages discuss the process and philosophy guiding compensation decisions for the following NEOs during 2018:
Compensation Principles
The Company's executive compensation programs have evolved in structure but follow three basic principles, first established by the Company's late Founder, Mr. Wm. Polk Carey:
1 Compensation levels should be conservative and prudent | 2 Compensation should adequately reward those who create value for the Company and its shareholders |
3 Compensation should be tied to the financial performance of the Company |
||
The Compensation Committee annually reviews the pay levels of our NEOs against our peers and generally finds our base salaries to be conservative (e.g., aligned with the 25th percentile), and total compensation aligned with the median among our peers. |
Approximately half of each NEO's pay opportunity is provided through equity-based compensation tied to long-term performance and vesting. The Committee believes that senior management pay outcomes over time should be aligned with the shareholder experience. Further, each of our NEOs is subject to rigorous stock ownership guidelines. |
Approximately 80% of our average NEO pay opportunity is at risk and subject to Company and/or stock price performance. In order to promote greater transparency related to the calculation of the annual cash bonus payouts, the Committee implemented a new annual cash bonus plan for 2018, aligning cash bonuses directly with Company performance. The ultimate value of our current annual performance-based equity awards is tied to long-term RE AFFO per share growth and relative Total Shareholder Return ("TSR"), which reflects the Company's performance. |
Proxy Statement and Notice of 2019 Annual Meeting | 34
Executive Compensation |
2018 Business Highlights
In addition to the framework set by these principles, the Compensation Committee considered a number of factors in determining 2018 compensation levels for the NEOs to help ensure alignment with the Company's performance in 2018. Among these factors were:
Material quantitative performance factors that the Compensation Committee considered in making 2018 compensation decisions were:
W. P. Carey Rank Versus Companies in the MSCI US REIT Index
1-Year |
3-Year |
5-Year |
10-Year |
|||
---|---|---|---|---|---|---|
#41 of 144 | #43 of 139 | #58 of 122 | #11 of 88 |
35 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
The Committee also took into consideration the following accomplishments during the year:
COMPENSATION HIGHLIGHTS |
2018 Base Salaries:
For 2018, the Committee approved salary increases for four of the NEOs. These increases were based on market analyses, conducted by the Committee's independent compensation consultant, FW Cook, supported by the progress made toward achieving the Company's strategic goals, as well as to reflect the promotions of Mr. Fox and Mr. Park to CEO and President, respectively.
2018 Bonus Payments:
The Committee, with input from senior management and FW Cook, implemented a new annual cash bonus program for all employees, including the NEOs, for 2018. The Company-wide annual cash bonus plan was initially funded based on performance against pre-established RE AFFO goals. The initially funded pool was then subject to modification (up or down by 20%) based on the Committee's evaluation of certain strategic goals, including improving portfolio strength, TSR relative to the MSCI US REIT Index and furthering the Company's long-term strategic objectives, such as improving its cost of capital. The actual bonus allocations to eligible employees, including the NEOs, were then subject to further adjustment based on individual performance as determined by the Committee. On average, the resulting total bonus payments made to eligible employees were 110% of target, while bonuses to the NEOs were 109% of target, reflecting outperformance against the pre-established RE AFFO goals and upward pool modification based on the Committee's evaluation of the Company's performance against strategic goals, including the successful CPA:17 Merger, and strong TSR relative to the REIT industry in 2018.
The Committee believes this design appropriately balances the need to provide greater transparency to shareholders and more information to participants regarding bonus calculations, while maintaining an appropriate level of flexibility allowing the Committee to evaluate holistic
Company performance and assess both management's accomplishments during the year and how those results were accomplished, including an assessment of the shareholder experience.
2016-2018 Performance Share Unit Award Payouts:
In early 2016, PSUs were granted contingent on three-year performance against pre-established metrics (AFFO per share growth and TSR relative to the MSCI US REIT Index). In early 2019, the Committee certified performance achievements and approved a payout for these "regular PSUs" equal to 195% of target to all holders of such awards. Of the NEOs, only Messrs. Fox, Gordon and Park held such regular 2016 PSUs.
Special 2016 Performance Share Unit Award Payouts:
In early 2016, PSUs were granted to key members of the Company's senior management team (other than the CEO at that time), in order to act as a retention device. These "retention PSUs" were contingent on three-year performance against TSR relative to the MSCI US REIT Index, commencing on the date of the grants. In early 2019, the Committee certified performance achievements and approved a payout equal to 300% of target to all holders of such awards. Of the NEOs, Mr. Fox, Mr. Gordon, Mr. Park and Ms. Sanzone held such 2016 retention PSUs. See page 43 for additional detail.
In early 2016, PSUs were also granted as a retention device to certain members of the Company's Investment Department, contingent on three-year performance against TSR relative to the MSCI US REIT Index commencing on January 1, 2016. In early 2019, the Committee certified performance achievements and approved a payout equal to 300% of target to all holders of such awards. Of the NEOs, only Mr. Sabatini held such 2016 Investment Department PSUs. See page 44 for additional detail.
Proxy Statement and Notice of 2019 Annual Meeting | 36
Executive Compensation |
2018 Long-Term Incentive Grants:
The Committee maintained a similar approach to long-term incentive grants as in prior years and tin early 2018 authorized grants to the NEOs consisting of PSUs and time-based RSUs. Both award types vest and/or measure performance over a three-year period (2018-2020). The 2018 PSUs measure TSR relative to the MSCI US REIT Index and, rather than AFFO per share growth as in past years, RE AFFO per share growth, which since 2017 has become a key focus for the Company. The PSUs and RSUs each continue to make up approximately 50% of the annual long-term incentive award to NEOs.
Results of 2018 Advisory Vote on Executive Compensation:
At our 2018 Annual Meeting, approximately 96.9% of the votes cast were in favor of our Say-on-Pay proposal. The Compensation Committee considered the outcome of that advisory vote to be an endorsement of the Committee's compensation philosophy and implementation. That said, the Compensation Committee will continue to consider the outcome of the Company's Say-on-Pay votes and any other shareholder feedback when making future compensation decisions for the NEOs. The change to the 2018 annual cash bonus program described above reflects the Committee's commitment to plan design changes to promote continued transparency in the pay determination process.
Compensation Philosophy and Decision Making Process:
The Company's compensation philosophy and its processes for compensating executive officers are overseen by the Compensation Committee. This Committee currently consists of four directors, each of whom is independent within the meaning of the Listing Standards of the NYSE. The Compensation Committee's responsibilities include setting the Company's executive compensation principles and objectives, setting and approving the compensation of executive officers, and monitoring and approving the Company's general compensation programs.
The Compensation Committee relies on input both from management and from its independent compensation consultant to assist the Committee in making its determinations. Although the Compensation Committee receives information and recommendations regarding the design of the compensation program and level of compensation for NEOs from these sources, the Compensation Committee retains the sole authority to make final decisions both as to the types of compensation awarded and compensation levels for these executives.
Compensation Philosophy
The Company's compensation programs are designed to align executive pay with Company performance and to motivate management to make sound financial decisions that increase the value of the Company. The Committee believes that a blend of incentive programs, based on both quantitative and qualitative performance objectives, is the most appropriate way to encourage not only the achievement of outstanding financial performance, but maintenance of consistent standards of teamwork, creativity, good judgment, and integrity. In determining the compensation of our NEOs, the Compensation Committee relies on a balance of formulaic and qualitative incentive programs, exercising its best judgment and taking into account the many aspects of performance that make up an individual's contribution to the Company's success.
For 2018 compensation, the Committee examined a broad range of information on financial performance, as described above. The Committee also reviewed information on the performance of and contributions made by individual executive officers (other than the CEO) and, in doing so, placed substantial reliance on information received from, and the judgment of, the CEO. The Committee's decisions with regard to CEO compensation are made in executive session in consultation with its independent compensation consultant. The Compensation Committee also periodically reviews independent survey data, other public filings, and peer group data provided by its independent compensation consultant as market reference points for all NEOs. The Committee strives to provide pay opportunities (including base, bonus and long-term incentives) that approximate the median of the market within 15%, but acknowledges that individual positioning may vary due to tenure, contribution, performance and uniqueness of role.
Role of the Independent Compensation Consultant
The Compensation Committee engages an independent consultant to provide guidance on a variety of compensation matters. Since September 2016, the Committee has engaged FW Cook, a leading compensation consulting firm, as its independent compensation consultant. FW Cook conducts independent studies and provides objective advice on executive and director compensation. FW Cook's role with the Company is as adviser to the Committee on executive compensation matters. Each year, the Committee conducts an assessment, as required by SEC rules, to determine if any conflicts of interest exist with regard to its engagement of FW Cook. In conducting that assessment for 2018, the Committee reviewed a variety of factors, including those required by SEC rules, and determined that no such conflict of interest existed.
37 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
Peer Comparison Group
When determining compensation levels for the NEOs, the Compensation Committee considers a number of external market reference points, including published survey data and the competitive pay levels of an established group of publicly traded peer companies. This peer comparison group consists of companies having similar characteristics to the Company, as noted below, and with whom the Company competes for executive talent. The Compensation Committee periodically reviews the peer group to determine what changes, if any, are appropriate.
In March 2017, with the assistance of FW Cook, the Compensation Committee reassessed the composition of the Company's peer group and determined to revise the companies in that peer group to better reflect the Company's current business and size. The resulting peer group, which was used for 2018, comprises 17 companies operating in the real estate investment and real estate asset management industries. The Committee, together with FW Cook, last reviewed the peer group in March 2018 and determined not to make any changes at that time.
Peer Group |
||
---|---|---|
| | |
Brixmor Property Group Inc. | Liberty Property Trust | |
| | |
Colony NorthStar, Inc. | Macerich Company | |
| | |
EPR Properties | National Retail Properties, Inc. | |
| | |
First Industrial Realty Trust | Prologis, Inc. | |
| | |
Gramercy Property Trust(1) | Realty Income Corporation | |
| | |
HCP, Inc. | Spirit Realty Capital, Inc. | |
| | |
Healthcare Realty Trust Incorporated | Tanger Factory Outlet Centers, Inc. | |
| | |
Kimco Realty Corporation | VEREIT, Inc. | |
| | |
Lexington Realty Trust | ||
| | |
The companies included in the peer group generally have the following characteristics:
Proxy Statement and Notice of 2019 Annual Meeting | 38
Executive Compensation |
Elements of Compensation |
The Company uses base salary, annual cash incentives, and long-term equity incentives, as well as a range of benefit plans, as tools to help achieve its compensation objectives. The Company's approach to the mix of compensation among these elements emphasizes variable
compensation, including bonuses and long-term incentives in the form of stock-based awards, over fixed compensation. The emphasis on stock-based awards vesting over time helps to promote a long-term perspective and further align management's interests with that of the Company's shareholders.
Element |
|
Compensation Objectives and Key Features |
||
---|---|---|---|---|
| | | | |
Base Salary | Fixed | Fixed compensation component that provides a minimum level of cash to compensate the executive officer for the scope and complexity of the position. |
||
|
Amounts based on an evaluation of the executive officer's experience, position, and responsibility; intended to be competitive in the marketplace to attract and retain executives. |
|||
| | | | |
Annual Cash Incentive Award | At risk | Variable cash compensation component that provides an incentive opportunity based on performance against a pre-established financial goal, RE AFFO for 2018, and progress against strategic priorities (improving portfolio strength, TSR relative to the MSCI US REIT Index and furthering the Company's long term strategic objectives, such as improving its cost of capital and completion of the CPA:17 Merger), and the Compensation Committee's assessment of individual performance. |
||
| | | | |
Long-Term Equity Incentives | At risk | Variable equity compensation designed to foster meaningful ownership of our Common Stock by management, to align the interests of our management with the creation of long-term shareholder value, and to motivate our management to achieve long-term growth for the Company. |
||
|
PSU awards under the long-term incentive plan ("LTIP") are predicated on three-year performance based on absolute RE AFFO per share growth and relative TSR versus the MSCI US REIT Index. |
|||
| | | | |
Although the Compensation Committee examines market data, it does not target a specific percentile for each executive. Rather, the Compensation Committee uses the market median (50th percentile) as an initial reference point for the executive team, in aggregate, and then, based on performance, including the various financial metrics as outlined herein as well as TSR performance, adjusts incentive compensation levels (both cash and equity) in a corresponding manner.
While the Compensation Committee does not utilize a specific formula, base salary has generally comprised a relatively small portion of our CEO and other NEO pay (15% and an average of 20% in 2018, respectively). The equity portion of pay has tended to represent approximately 50% of our CEO and other NEO total pay (54% and an average of 46%, respectively, in 2018), based on the Committee's philosophy of aligning executive compensation with Company performance.
39 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
For 2018, the mix for total compensation was:
Chief Executive Officer Pay Mix 2018 |
Other NEOs Pay Mix 2018 |
|
Base Salary
Base salary is intended to reflect job responsibilities and set a minimum baseline for compensation. The Company's overall philosophy is that, in most cases, base salaries for officers, including those for executive officers, are viewed as a significantly smaller component of their overall compensation than variable elements of compensation. When setting such salary levels, the Committee considered the following factors:
Base salaries for the executive officers are subject to annual review by the Compensation Committee, which considers competitive market data provided by the Committee's independent compensation consultant.
The Committee may determine to adjust NEO salaries, individually or overall, at any time. When considering potential changes to base salaries for executive officers, the Committee also takes into consideration the impact on total compensation. Based on current and historical market analyses, base salaries have aligned with the 25th percentile and total compensation has aligned with the 50th percentile
across the NEO group. After taking into consideration a recommendation from FW Cook, based on current market analyses, the Committee decided to adjust NEO salaries for 2018 for Mr. Fox, Mr. Park, Ms. Sanzone and Mr. Sabatini. In the Committee's view, these increases were supported by the individual executive experience and responsibilities and this progress made toward achieving the Company's strategic goals, as well as to reflect promotions for Messrs. Fox and Park to CEO and President, respectively.
Annual Cash Incentives
As discussed above, the 2018 annual cash bonus plan was redesigned to accomplish three key objectives:
The Committee and management believe the process described below satisfied these objectives.
Initial Bonus Pool Funding:
In early 2018, the Committee approved RE AFFO goals that would need to be achieved in order to fund the new Company-wide annual cash bonus plan for all eligible employees, including the NEOs. The table below outlines
Proxy Statement and Notice of 2019 Annual Meeting | 40
Executive Compensation |
the RE AFFO performance requirements and the corresponding level of bonus pool funding available.
Performance/Payout Level |
RE AFFO/Share |
Bonus Pool Funding (% of target) |
||
---|---|---|---|---|
| | | | |
Threshold | $3.94 | 75% | ||
| | | | |
Target | $4.38 | 100% | ||
| | | | |
Maximum | $4.82 | 125% | ||
| | | | |
For 2018, the Company achieved initial RE AFFO per share of $4.40, prior to the impact of the bonus payout in excess of the Target, resulting in an initial total pool funding for all eligible employees of 101.1% of Target.
Strategic Modifiers:
To evaluate Company performance from a more holistic perspective, certain strategic objectives determined by the Committee and management to be critical indicators of overall performance were established at the beginning of 2018. Three categories of performance were established, with each category containing specific metrics and targets for the Committee to evaluate performance at year-end to determine whether to modify (up or down by 20%) the initially funded bonus pool, as determined by performance against RE AFFO goals. The strategic modifiers were as follows:
Strategic Goals |
Metric(s) |
|
---|---|---|
| | |
Improve portfolio strength | Extend the WALT; and execute successful acquisition and disposition strategy | |
| | |
Strong return to shareholders | Relative TSR as measured against the MSCI US REIT Index | |
| | |
Execution on long-term strategy |
Completion of CPA:17 Merger; Improve cost of capital relative to market yields |
|
| | |
Based on the Committee's evaluation of progress against these goals and metrics, it decided to increase the total bonus pool funding by 8.8%, which resulted in a total bonus payout of 110% on average for all eligible employees, other than the NEOs. Several key factors contributed to an upward adjustment in funding, including outperforming the pre-established goal to extend the WALT of the Company's portfolio; completion of $939.7 million in acquisitions, and $524.5 million in dispositions, which were well-aligned with the Company's objectives for the year; relative TSR exceeding the median of the MSCI US REIT Index; and the successful completion of the CPA:17 Merger.
Actual Bonuses Awarded to the NEOs:
As a starting point for the determination of the NEOs' 2018 bonus payouts, each executive's target bonus was adjusted by the RE AFFO performance factor (+1.1%). The Committee, with input from the CEO and FW Cook, decided to modify the bonus payouts for the other four NEOs, reflecting performance against the strategic modifiers, as discussed above, and individual performance, for an overall payout of 109% on average. A portion of the additional bonus for Ms. Sanzone reflects her significant contribution to the successful CPA:17 Merger. The Committee decided to align the CEO's total bonus with the calculated outcome based on RE AFFO (+1.1%) and respect his request to not provide additional funding based on the strategic modifier outcome. The resulting NEO cash incentive payouts for 2018 performance, which were paid in early 2019, are shown in the table below:
41 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
Executive |
Target Bonus |
RE AFFO (Target × 101.1%) |
Additional Strategic Modifier Funding |
Total 2018 Bonus |
|||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | |
Jason E. Fox |
$ | 1,400,000 | $ | 1,415,400 | | $ | 1,415,400 | ||||||
| | | | | | | | | | | | | |
John J. Park |
$ | 1,000,000 | $ | 1,011,000 | $ | 89,000 | $ | 1,100,000 | |||||
| | | | | | | | | | | | | |
ToniAnn Sanzone |
$ | 500,000 | $ | 505,500 | $ | 94,500 | $ | 600,000 | |||||
| | | | | | | | | | | | | |
Gino M. Sabatini |
$ | 1,000,000 | $ | 1,011,000 | $ | 39,000 | $ | 1,050,000 | |||||
| | | | | | | | | | | | | |
Brooks G. Gordon |
$ | 500,000 | $ | 505,500 | $ | 44,500 | $ | 550,000 | |||||
| | | | | | | | | | | | | |
For 2019, the Committee determined to keep the basic structure of the annual cash bonus plan in place since, in the Committee's view, the plan had appropriately rewarded employees, including the NEOs, for the Company's performance during 2018. As a result, the NEOs' bonus payments for 2019 will be subject to similar performance metrics and modifiers as the prior year. For Mr. Sabatini, however, a majority of his 2019 bonus target will be subject to the separate performance metrics established by the Committee for certain members of the Investment Department, which are tied to investment volume and quality, because the Committee felt that, as the Company's Head of Investments, tying a portion of his bonus to those goals would be a more appropriate incentive for him.
Long-Term Incentive Plan Awards
The LTIP is designed to reward key managers for high performance and to drive shareholder value. Awards for our NEOs are delivered at approximately 50% in the form of time-based RSUs that vest over a three-year period and 50% in the form of PSUs that are earned after a three-year performance period based on the achievement of specific performance goals determined at the beginning of the cycle. The Committee approves final goals for each performance cycle after evaluating goals proposed by management. Management's proposals are based on the Company's long-term financial plan, historical results, and expected results. The Compensation Committee considers
these recommendations in conjunction with the established long-term business plan of the Company in order to determine the final goals. From time to time, the Compensation Committee's independent compensation consultant assists the Compensation Committee with the goal-setting process by providing analyses of historical peer group performance and expected trends.
The Compensation Committee regularly reviews the Company's progress towards achieving each of the PSU goals and, after the end of each three-year PSU performance cycle, evaluates the Company's actual performance compared to the pre-set goals in order to determine the payout level achieved. PSUs may be earned between 0% and 300% of the target number of shares granted depending on performance against two equally weighted metrics: TSR relative to the MSCI US REIT Index; and AFFO (or, in recent years, RE AFFO) per share compound annual growth. These metrics were selected to align with the Company's goals of outperforming an established benchmark index for similar REITs, sustainably growing funds available for dividends, and managing shareholder dilution appropriately. Payment levels are determined on a linear scale between performance levels, which allows the Committee to recognize, reward, and incentivize incremental performance gains between the "stepped" performance levels.
Proxy Statement and Notice of 2019 Annual Meeting | 42
Executive Compensation |
For the 2016-2018 regular PSU payout, the Company achieved 90.1% with respect to the AFFO measure, which was between Threshold and Target performance levels, and 300% with respect to the TSR measure, which was the Maximum performance level. The resulting cumulative payout was equal to 195% of the Target payout amount, which was between the Target and Stretch levels, as shown below:
2016-2018 PSUs |
||||||
| | | | | | |
Performance Level |
AFFO per Share (Compound Growth Rate) |
Relative TSR (vs. MSCI US REIT Index) |
Payout as % Target |
|||
| | | | | | |
Below Threshold |
<1.0% | <-200 basis points | 0% | |||
| | | | | | |
Threshold |
1.0% | 200 basis points | 50% | |||
| | | | | | |
Target |
3.0% | 0 basis points | 100% | |||
| | | | | | |
Stretch |
4.0% | +250 basis points | 200% | |||
| | | | | | |
Maximum |
6.0% | +500 basis points | 300% | |||
| | | | | | |
Actual Results |
2.6% | +721 basis points | ||||
| | | | | | |
Payout |
90.1% | 300% | 195% | |||
| | | | | | |
Of the NEOs, only Messrs. Fox, Park and Gordon had been granted regular PSUs in 2016, and they received payouts of 20,721, 28,121 and 9,241 shares, respectively, including Dividend Equivalent shares, as defined in footnote (2) to the
2018 Grants of Plan-Based Awards Table shown later in this Proxy Statement (although 9,541, 12,005 and 3,589 of such shares were withheld to pay for taxes, respectively), in February 2019.
For the February 16, 2016-February 15, 2019 retention PSU payout, the Company's performance with respect to the relative TSR measure was above the Maximum level, as shown below:
February 2016-February 2019 Retention PSUs |
||||
| | | | |
Performance Level |
Relative TSR (vs. MSCI US REIT Index) |
Payout as % Target |
||
| | | | |
Below Threshold |
<-200 basis points | 0% | ||
| | | | |
Threshold |
200 basis points | 50% | ||
| | | | |
Target |
0 basis points | 100% | ||
| | | | |
Stretch |
+250 basis points | 200% | ||
| | | | |
Maximum |
+500 basis points | 300% | ||
| | | | |
Actual Results |
+860 basis points | |||
| | | | |
Payout |
300% | |||
| | | | |
Of the NEOs, Mr. Fox, Mr. Park, Ms. Sanzone and Mr. Gordon had been granted such 2016 retention PSUs, and they received payouts of 36,038, 36,038, 4,504 and 14,415 shares, respectively, including Dividend Equivalent
Shares (although 19,180, 17,648, 2,085 and 7,672 of such shares were withheld to pay for taxes, respectively), in February 2019.
43 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
For the 2016-2018 Investment Department PSU payout, the Company's performance with respect to the relative TSR measure was also above the Maximum performance level, as shown below:
2016-2018 Investment Department PSUs |
||||
| | | | |
Performance Level |
Relative TSR (vs. MSCI US REIT Index) |
Payout as % Target |
||
| | | | |
Below Threshold |
<-200 basis points | 0% | ||
| | | | |
Threshold |
200 basis points | 50% | ||
| | | | |
Target |
0 basis points | 100% | ||
| | | | |
Stretch |
+250 basis points | 200% | ||
| | | | |
Maximum |
+500 basis points | 300% | ||
| | | | |
Actual Results |
+721 basis points | |||
| | | | |
Payout |
300% | |||
| | | | |
Of the NEOs, only Mr. Sabatini had been granted such 2016 Investment Department PSUs, and he received a payout of 10,811 shares, including Dividend Equivalent Shares (although 2,696 of such shares were withheld to pay for taxes), in January 2019.
For the 2017-2019 performance cycle, the Compensation Committee determined to again maintain the same TSR and AFFO metrics. However, based on input from management regarding the key factors likely to affect the Company's results over that three-year cycle, the Committee determined that a lower AFFO growth rate for the Target, Stretch and
Maximum levels, compared to the same rate in prior cycles, would be a more appropriate goal. The Committee made this change because, in its view, the Company's ability to grow its earnings would be more challenging over the coming years due to changes in the Company's business model and its larger size. Additionally, the Compensation Committee determined to revise its measurement approach for relative TSR performance to compare the Company's percentile rank relative to the individual constituents of the MSCI US REIT Index. As a result, the following metrics apply for the 2017-2019 performance cycle:
2017-2019 PSU |
||||||
| | | | | | |
Performance Level |
AFFO per Share (Compound Growth Rate) |
Relative TSR (vs. MSCI US REIT Index) |
Payout as % Target |
|||
| | | | | | |
Below Threshold |
<1.0% | <25th percentile | 0% | |||
| | | | | | |
Threshold |
1.0% | 25th percentile | 50% | |||
| | | | | | |
Target |
2.0% | 50th percentile | 100% | |||
| | | | | | |
Stretch |
3.0% | 75th percentile | 200% | |||
| | | | | | |
Maximum |
5.0% | 90th percentile | 300% | |||
| | | | | | |
In 2018, the Committee believed that no changes to the program were warranted, except that the Committee determined that it would be preferable to focus management on RE AFFO per share, rather than the overall AFFO per share metric used in prior years, given the change in the Company's business model, announced in
June 2017, to exit the retail fundraising business and focus exclusively on net lease investing for its own portfolio. For 2019, the Committee felt that no changes were warranted for the 2019-2021 performance cycle. As a result, the following metrics apply for the 2018-2020 and 2019-2021 performance cycles:
Proxy Statement and Notice of 2019 Annual Meeting | 44
Executive Compensation |
2018-2020 PSU and 2019-2021 PSU |
||||||
| | | | | | |
Performance Level |
RE AFFO per Share (Compound Growth Rate) |
Relative TSR (vs. MSCI US REIT Index) |
Payout as % Target |
|||
| | | | | | |
Below Threshold |
<1.0% | <25th percentile | 0% | |||
| | | | | | |
Threshold |
1.0% | 25th percentile | 50% | |||
| | | | | | |
Target |
2.0% | 50th percentile | 100% | |||
| | | | | | |
Stretch |
3.0% | 75th percentile | 200% | |||
| | | | | | |
Maximum |
5.0% | 90th percentile | 300% | |||
| | | | | | |
Other Compensation and Benefits
Deferred Compensation Plans
Payment of the shares underlying LTIP awards may be deferred pursuant to the Company's Deferred Compensation Plan and are subject to the requirements of Section 409A of the Internal Revenue Code, which we refer to in this Proxy Statement as the Code. For awards of RSUs and PSUs to NEOs in 2018, Messrs. Fox, Park and Sabatini elected to defer receipt of all or a portion of the underlying shares through the Company's Deferred Compensation Plan.
Deferred awards under certain prior compensation plans are also maintained in the Deferred Compensation Plan. These partnership equity unit plans, or PEP Plans, were discontinued in 2007, and the PEP awards were converted to RSUs in 2009. These Rollover RSUs, which were required to be deferred for a minimum of two years, are payable in accordance with the employees' prior elections. Currently, of the NEOs, Messrs. Fox, Park and Sabatini hold Rollover RSUs.
Benefits and Perquisites
Our NEOs are provided with limited perquisites and benefits that are generally consistent with those provided to the
Company's employees. The Company does not maintain any defined benefit pension plans. The Company does maintain a profit sharing plan, pursuant to which the Company contributed 10% of an employee's total cash compensation, up to legal limits, into the plan on their behalf during 2018, as well as the Company's Employee Stock Purchase Plan ("ESPP"), under which eligible employees in 2018 could purchase Company stock at a discount of 10% off the market price of the Common Stock on the last day of two semi-annual purchase periods, up to applicable limits, and must hold the shares purchased for at least one year. The Company also maintains an employee-funded 401(k) plan and a Roth 401(k) plan. These plans are generally available to all employees including the NEOs, as are certain perquisites. These perquisites are not deemed by the Company to constitute a material element of compensation.
Employment Agreements
The Company has from time to time entered into employment agreements when it has deemed it to be advantageous in order to attract or retain certain individuals. None of the NEOs have employment agreements as of the date of this Proxy Statement.
45 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
Compensation Governance |
We design our compensation plans within a set of strong compensation governance provisions. These include:
| | | | | | | | | | | | |
What We Do | What We Don't Do | |||||||||||
| | | | | | | | | | | | |
✓ | Deliver a significant percentage of annual compensation in the form of variable compensation tied to multi-year performance through our new annual cash incentive plan | ✗ | Do not provide excise tax gross-ups | |||||||||
| | | | | | | | | | | | |
✓ | Deliver half of the long-term incentive plan value at grant through PSUs measuring 3-year performance | ✗ | Do not have employment agreements | |||||||||
| | | | | | | | | | | | |
✓ | Provide total compensation opportunities that approximates the market median | ✗ | Do not have executive perquisites | |||||||||
| | | | | | | | | | | | |
✓ | Compare executive compensation levels and practices against a relevant peer group of similarly-sized REITs | ✗ | Do not have excessive severance benefits | |||||||||
| | | | | | | | | | | | |
✓ | Engage an independent compensation consultant that reports directly to the Compensation Committee and provides no other services to the Company | ✗ | Do not allow current dividends to be paid on unearned PSUs or unvested RSUs. | |||||||||
| | | | | | | | | | | | |
✓ | Require meaningful levels of stock ownership among our executive officers and non-employee directors | ✗ | Do not allow hedging or short sales of our securities, and have meaningful limits on pledging | |||||||||
| | | | | | | | | | | | |
✓ | Maintain a clawback policy | ✗ | Do not provide enhanced retirement benefits or other supplemental executive retirement plans, known as SERPs | |||||||||
| | | | | | | | | | | | |
✓ | Conduct annual compensation risk review | ✗ | Do not allow for any single-trigger cash severance benefits upon a change-in-control | |||||||||
| | | | | | | | | | | | |
Stock Ownership Guidelines
In January 2013, our Board adopted the W. P. Carey Stock Ownership Guidelines. The Stock Ownership Guidelines require the directors and the NEOs to maintain certain specified ownership levels of Common Stock, based on the
annual cash retainer for directors and a multiple of annual base salary, exclusive of bonuses or other forms of special compensation, for the NEOs. The applicable stock ownership requirements are presented below:
Position |
|
Ownership Requirement |
||
---|---|---|---|---|
| | | | |
CEO | 6x annual salary | |||
| | | | |
Other NEOs | 3x annual salary | |||
| | | | |
Non-Executive Directors | 5x annual cash retainer | |||
| | | | |
The Stock Ownership Guidelines provide that, with respect to each person subject to them, they will be phased in over a five-year period. For purposes of determining compliance with the Stock Ownership Guidelines, all Common Stock and securities based on the value of Common Stock acquired through participation in any of the Company's incentive or stock purchase plans are counted, excluding unvested RSUs and PSUs.
As of the date of the Proxy Statement, the five-year phase-in period had been reached for Directors Benjamin H. Griswold, IV, Axel K.A. Hansing, Jean Hoysradt and Nick J.M. van Ommen, each of whom has met the requirement. All
other non-executive directors and all of the NEOs are on track to comply with the requirement within the five-year period.
Clawback Policy
Our Board has approved a policy that gives the Board the sole and absolute discretion to make retroactive adjustments to any cash or equity-based incentive compensation paid to executive officers ("Covered Officers") where such payment was based upon the achievement of certain financial results that were subsequently the subject of a restatement or if a metric taken into account in computing such compensation has been materially incorrectly calculated and, in each case, the
Proxy Statement and Notice of 2019 Annual Meeting | 46
Executive Compensation |
Board determines that the Covered Officer received an excess incentive as a result and that the Covered Officer engaged in ethical misbehavior. The Board has discretion to seek recovery of any excess amount that it determines was received inappropriately by these individuals, but the Board may require the recoupment of up to the total amount of performance-based compensation, rather than the excess amount, for any Covered Officer who is convicted (including a plea of nolo contendere) of illegal acts connected to such restatement or recalculation.
Anti-Hedging Policy
The Company has adopted a policy that prohibits its employees and directors from entering into all forms of hedging transactions regarding the Company's stock, including covered calls, collars, "short sales," sales "against the box," "put" or "call" options, or other derivative transactions.
Pledging Policy
The Company has a robust policy that limits the pledging of shares of the Company's stock, whether in a margin account or as collateral for a loan. The policy states that, if Company stock is pledged in a margin account, no securities of other companies may be held in the same account in order to prevent declines in the value of those securities from causing the sale of the Company's stock due to a margin call. The policy also limits the value of any loan secured by Company stock, in a margin account or otherwise, to 40% of the value of such stock at all times. We believe that the pledging of nonmaterial amounts of equity does not disconnect the interests of employees with those of the shareholders when used reasonably and appropriately. Our compensation program provides for a significant portion of an executive's compensation to be paid in shares, with the intent of providing clear alignment of our executives with our shareholders. We believe that the pledging of shares, within the meaningful limits described, is a reasonable part of our compensation and governance programs and helps enable executives to maintain stock ownership levels in excess of the Company's robust Stock Ownership Guidelines.
Risk Assessment
The Compensation Committee, with the assistance of its independent compensation consultant, annually performs an
assessment of compensation related risks for the Company's primary compensation programs, as required by SEC rules. For 2018, the Committee determined that there were no elements of the Company's compensation programs that would be reasonably likely to have a material adverse impact on the Company.
Other Considerations
Section 162(m) of the Code currently imposes a $1 million limit on the amount that a public company may deduct for compensation paid to an employee who is chief executive officer, chief financial officer, or another "covered employee" (as defined by Section 162(m)), or was such an employee beginning in any year after 2017. Prior to 2018, the Compensation Committee designed certain payments and awards intended to be exempt from this deduction limit as qualified "performance-based" compensation and various plans, including the 2009 Share Incentive Plan, the 2017 Share Incentive Plan and the 2017 Cash Incentive Plan, were structured to comply with the Section 162(m) performance-based compensation requirements. The Tax Cuts and Jobs Act, however, eliminated the "performance-based compensation" exception under Section 162(m) effective January 1, 2018, subject to a special rule that "grandfathers" certain awards or arrangements that were in effect on or before November 2, 2017. There can be no assurance that compensation structured prior to 2018 with the intent of qualifying as performance-based compensation will be deductible under Section 162(m), depending on the application of the grandfather rule. Additionally, compensation awarded in 2018 and future years to covered employees in excess of $1 million also will generally not be deductible. The Compensation Committee retains the discretion to establish the compensation paid or intended to be paid or awarded to the NEOs as the Committee may determine is in the best interest of the Company and its shareholders, and without regard to any limitation provided in Code Section 162(m). This discretion is an important feature of the Committee's compensation practices because it provides the Committee with sufficient flexibility to respond to specific circumstances facing the Company.
47 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Committee recommended to the Board of Directors, and the Board approved, that the Compensation Discussion and Analysis be included in this Proxy Statement, and incorporated by reference in the Company's Annual Report on Form 10-K for the year ended December 31, 2018.
COMPENSATION COMMITTEE
Peter J.
Farrell, Chair
Mark A. Alexander
Benjamin H. Griswold, IV
Jean Hoysradt
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Each of the Compensation Committee members whose names appear under the heading Report of the Compensation Committee above were Compensation Committee members during all of 2018. No member of the Compensation Committee during 2018 is or has been an executive officer of the Company, and no member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC's rules requiring disclosure of certain relationships and related-party transactions. None of the Company's executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director of the Company or member of the Compensation Committee during 2018.
Proxy Statement and Notice of 2019 Annual Meeting | 48
Executive Compensation |
SUMMARY COMPENSATION TABLE
The following table summarizes the compensation of our NEOs for each of the fiscal years ended December 31, 2018, 2017, and 2016. For purposes of this table, our NEOs for 2018 were: our Chief Executive Officer, Chief Financial Officer and the three most highly compensated Executive Officers at December 31, 2018 as calculated in accordance with SEC rules. There were no other executive officers during 2018.
Name and Principal Position |
| Year |
| Salary ($) |
| Bonus(1) ($) |
| Non-Equity Incentive Plan Compensation(2) ($) |
| Stock Awards(3) ($) |
| All Other Compensation(4) ($) |
| Total ($) |
| |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | |||||||||||||||
Jason E. Fox(5) |
| 2018 | | 700,000 | | | 0 | | | | 1,415,400 | | | | 2,499,877 | | | | 36,165 | | | 4,651,442 | | |||||||
CEO |
| 2017 | | 400,000 | | | 0 | | | | 1,000,000 | | | | 1,429,897 | | | | 32,031 | | | 2,861,928 | | |||||||
|
| 2016 | | 400,000 | | | 795,000 | | | | 0 | | | | 1,870,620 | | | | 30,302 | | | 3,095,922 | | |||||||
| | | | | | | | | | | | | | | | |||||||||||||||
ToniAnn Sanzone(6) |
| 2018 | | 425,000 | | | 0 | | | | 600,000 | | | | 699,910 | | | | 36,165 | | | 1,761,075 | | |||||||
CFO |
| 2017 | | 391,923 | | | 0 | | | | 550,000 | | | | 599,946 | | | | 32,031 | | | 1,573,900 | | |||||||
|
| 2016 | | 262,346 | | | 350,000 | | | | 0 | | | | 263,203 | | | | 30,302 | | | 905,851 | | |||||||
| | | | | | | | | | | | | | | | |||||||||||||||
John J. Park(7) |
| 2018 | | 525,000 | | | 0 | | | | 1,100,000 | | | | 1,499,911 | | | | 36,165 | | | 3,161,076 | | |||||||
President |
| 2017 | | 357,000 | | | 0 | | | | 1,200,000 | | | | 1,472,908 | | | | 32,031 | | | 3,061,939 | | |||||||
|
| 2016 | | 357,000 | | | 930,000 | | | | 0 | | | | 2,258,082 | | | | 30,302 | | | 3,575,384 | | |||||||
| | | | | | | | | | | | | | | | |||||||||||||||
Gino M. Sabatini |
| 2018 | | 500,000 | | | 0 | | | | 1,050,000 | | | | 1,199,853 | | | | 36,165 | | | 2,786,018 | | |||||||
Head of Investments |
| | | | | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | | |||||||||||||||
Brooks G. Gordon |
| 2018 | | 300,000 | | | 0 | | | | 550,000 | | | | 599,894 | | | | 36,165 | | | 1,486,059 | | |||||||
Head of Asset Management |
| | | | | | | | | | | | | | | | ||||||||||||||
| | | | | | | | | | | | | | | |
49 | Proxy Statement and Notice of 2019 Annual Meeting
Executive Compensation |
2018 GRANTS OF PLAN-BASED AWARDS
The following table provides information on awards under our annual cash bonus plan and the LTIP to our NEOs in 2018.
|
|
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) |
All Other Stock Awards: Number of |
Grant Date Fair Value of Stock |
|||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name |
Grant Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
Units(3) ($) |
Awards(4) ($) |
|||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Jason E. Fox |
| 1,050,000 | 1,400,000 | 2,100,000 | ||||||||||||||||||||||||
|
1/18/18 | 8,051 | 16,102 | 48,306 | 1,249,939 | |||||||||||||||||||||||
|
1/18/18 | 19,415 | 1,249,938 | |||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ToniAnn Sanzone |
| 375,000 | 500,000 | 750,000 | ||||||||||||||||||||||||
|
1/18/18 | 2,254 | 4,508 | 13,524 | 349,940 | |||||||||||||||||||||||
|
1/18/18 | 5,436 | 349,970 | |||||||||||||||||||||||||
| | | |