DEF 14A of Sun Communities Inc
Filed Apr 1, 2024 · FY20230000912593-24-000160
NOMINEE BIOGRAPHICAL SUMMARY
NOMINEE BIOGRAPHICAL SUMMARY
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Gary A. Shiffman Chairman, President and CEO, Sun Communities, Inc. Age: 69 Director since: 1993 Committee: Executive | | Directorship Experience | | | •Director, Sun Communities, Inc. | | | Career Highlights and Qualifications | | | •Actively involved in the management, acquisition, rezoning, expansion, marketing, construction and development of MH and RV communities for over 30 years •Extensive network of industry relationships developed over the past 30+ years •Significant direct holdings through family-related interests in various real estate asset classes (office, multi-family, industrial, residential and retail) | |
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Tonya Allen Director, Sun Communities, Inc. President of the McKnight Foundation Age: 51 Director since: 2021 Committee: NCG | | Directorship Experience | | | •Chair Emeritus of the Board of Directors at Oakland University •Chair Emeritus of the Council on Foundations •Board Member, Alumni Association of the University of Michigan •Board Member, Detroit Children's Fund •Board Member, Greater MSP •Board Member, Sagiliti | | | Career Highlights and Qualifications | | | •Institutional investment experience with public and private endowments, with large public and private equity holdings •ESG leadership in climate and energy, diversity and inclusion, and education and workforce development •Current Member of the General Motors Inclusion Advisory Board and serves or served as an advisor to Quicken Loans, CMS Energy, Huntington and PNC Banks, and DTE Energy regarding inclusion efforts •Demonstrated track record of devising corporate responsibility strategies that have received national accolades and regulatory approvals •Former President and CEO of The Skillman Foundation •Fellowships with the German Marshall Fund, Aspen Institute and American Enterprise Institute •Strategic impact lauded by Detroit News (Michiganian of the Year), Crain's Detroit Business (News Makers of the Year & 100 Most Influential Women), Chronicles of Philosophy (Five Innovators to Watch) and Twin Cities Business (Top 100) •Masters in Public Health, Masters in Social Work and Bachelor’s in Sociology from the University of Michigan | |
NOMINEE BIOGRAPHICAL SUMMARY
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NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Meghan G. Baivier Director, Sun Communities, Inc. President and COO of Easterly Government Properties, Inc. Age: 44 Director since: 2017 Committees: NCG Chair, Audit | | Directorship Experience | | | •Sun Communities, Inc. | | | Career Highlights and Qualifications | | | •Served as Chief Financial Officer of Easterly Government Properties, Inc. from 2016 - 2023 •Financial advisory and capital markets transaction experience as former Vice President of Citigroup’s Real Estate and Lodging Investment Banking group •Former Equity Research Associate with Chilton Investment Company and High Yield Research Associate at Fidelity Management •MBA from Columbia Business School, awarded the prestigious Feldberg Fellowship and BA from Wellesley College | |
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Stephanie W. Bergeron, CPA Director, Sun Communities, Inc. President and CEO of Bluepoint Partners, LLC Age: 70 Director since: 2007 Committees: Audit Chair, NCG | | Directorship Experience | | | •Served on Henry Ford Health System Board of Trustees as member of the Finance and Audit Committees •Served on Audit Committees of several publicly traded companies (including as chair) and a number of not-for-profit organizations | | | Career Highlights and Qualifications | | | •Financial consulting, accounting, treasury, investor relations and tax matters experience •Former President and CEO of Walsh College and named President Emerita •Former Senior Vice President - Corporate Financial Operations of The Goodyear Tire & Rubber Company •Former Vice President and Assistant Treasurer of DaimlerChrysler Corporation •Named one of Crain’s Detroit Business’ “Most Influential Women” in 1997 and in 2007 •BBA from the University of Michigan, MBA from the University of Detroit, licensed CPA in the state of Michigan | |
NOMINEE BIOGRAPHICAL SUMMARY
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NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Jeff T. Blau Director, Sun Communities, Inc. CEO and Partner of Related Companies L.P. Age: 55 Director since: 2023 Committee: Capital Allocation Chair | | Directorship Experience | | | •Serves on the Board of Directors of Equinox Holdings, Inc. •Chair of the Equity, Diversity and Inclusion Committee of the Board of the Real Estate Roundtable •Chairman of energyRe, a clean energy development company •Serves on the Board of multiple non-profit organizations, including Central Park Conservancy, the New York Partnership Fund, Robin Hood Foundation, Trinity School, Lincoln Center and The Mount Sinai Medical center | | | Career Highlights and Qualifications | | | •CEO of Related Companies, responsible for strategic direction, acquisitions, new development opportunities, and financing activities across all business platforms •MBA from the Wharton School of the University of Pennsylvania, BBA from the University of Michigan •Named to Crains New York’s New Influential list of 25 leaders reshaping New York | |
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Jerome W. Ehlinger Director, Sun Communities, Inc. Retired real estate business manager, portfolio manager and Chief Investment Officer Age: 52 Director since: 2024 | | Directorship Experience | | | •Serves as an Advisory Board Member and Principal, VP, and Treasurer for AQ Acquisitions LLC | | | Career Highlights and Qualifications | | | •Served as Global Head and Chief Investment Officer of Public Real Estate Securities at Heitman Real Estate Investment Management •Served as Managing Director and Head of Real Estate Securities, Americas, and U.S. Portfolio Manager for RREEF •Served in various REIT research and investment management roles at Morgan Stanley Dean Witter •Undergraduate degree from University of Wisconsin – Whitewater •Master of Science in Finance, Investment, and Banking from the University of Wisconsin – Madison •Chartered Financial Analyst | |
NOMINEE BIOGRAPHICAL SUMMARY
| 2024 Proxy Statement | 23 |
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Brian M. Hermelin Director, Sun Communities, Inc. Co-founder and Managing Partner of Rockbridge Growth Equity Management LP Co-founder and General Partner of Detroit Venture Partners, LLC Age: 58 Director since: 2014 Committees: Compensation Chair, Audit, Capital Allocation | | Directorship Experience | | | •Serves as Board Member, Compensation Committee member, and Chair of numerous private portfolio companies of Rockbridge Growth Equity Management LP •Member of the Compensation Committee of Intersection Holdings •Member of Audit Committee of Cranbrook Educational Community •Former Audit Committee chair of a regional gaming company •Former Chairman of Active Aero Group / USA Jet Airlines Inc. | | | Career Highlights and Qualifications | | | •Private equity and venture capital experience focusing on companies in the business services, financial services, sports, media and entertainment and consumer direct marketing industries •Former CEO of Active Aero Group / USA Jet Airlines Inc. •MBA from the Wharton School at the University of Pennsylvania, BBA from the University of Michigan | |
NOMINEE BIOGRAPHICAL SUMMARY
| | Craig A. Leupold Director, Sun Communities, Inc. CEO, GSI Capital Advisors. Age: 61 Director since: 2024 Committee: Capital Allocation | | Directorship Experience | | | •Served on the Board of Directors of American Campus Communities Inc. | | | Career Highlights and Qualifications | | | •CEO of GSI Capital Advisors, an investment manager with expertise in publicly traded real estate securities •Spent 27 years at Green Street Advisors, the last twelve of which as the firm's CEO, guiding its strategic direction and overseeing its client relationships and interactions •Undergraduate degree from the University of California – San Diego •MBA in Finance and Real Estate from Columbia University | |
NOMINEE BIOGRAPHICAL SUMMARY
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NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Clunet R. Lewis Lead Independent Director, Sun Communities, Inc. Retired attorney and businessman Age: 77 Director since: 1993 Committees: Audit, Compensation | | Directorship Experience | | | •Served as a Board Member, General Counsel, CFO, President and Managing Director of other public and private companies | | | Career Highlights and Qualifications | | | •Retired commercial lawyer specializing in mergers and acquisitions, debt financings, issuances of equity and debt securities and corporate governance and control issues •Former CFO and General Counsel at Eltrax Systems, Inc. •Extensive experience working with independent auditors and the SEC | |
NOMINEE BIOGRAPHICAL SUMMARY
| | | | | Arthur A. Weiss Director, Sun Communities, Inc. Partner and member of Executive Committee, Taft Stettinius & Hollister LLP Age: 75 Director since: 1996 Committee: Executive | | Directorship Experience | | | •Former Director of TCF Financial Corporation (Chairman of the Compensation Committee, member of the Credit Administration Committee and TCF Strategic Committee) •Director of several closely held companies in the real estate, technology and banking industries •Director and officer of a number of closely held public and private nonprofit corporations, including the Detroit Symphony Orchestra (Executive Committee Member, Treasurer and Board Member) •Jewish Federation & United Jewish Foundation of Metropolitan Detroit Financial and Best Business Practice Committees member | | | Career Highlights and Qualifications | | | •Practices law in the areas of business planning, mergers and acquisitions, taxation, estate planning and real estate •MBA in Finance and a post graduate LLM degree from New York University in Taxation •Previously recognized as one of the nation’s Top 100 Attorneys by Worth magazine and has been chosen over the last ten years as one of the Super Lawyers •Former Adjunct Professor of Law at Wayne State University and the University of Detroit | | | Relationship to Aaron Weiss | | | Aaron Weiss, our Executive Vice President of Corporate Strategy and Business Development, is Arthur A. Weiss' son. | |
NOMINEE BIOGRAPHICAL SUMMARY
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BOARD COMPOSITION AND REFRESHMENT
BOARD COMPOSITION AND REFRESHMENT Thoughtful consideration is continuously given to the composition of our Board in order to maintain an appropriate mix of qualifications, experience and skills, introduce fresh perspectives, and broaden and diversify the view and expertise represented on the Board. As a result of our refreshment, Mr. Ronald A. Klein is not standing for re-election, the Company appointed two new directors to the Board in early 2024, and one of the ten nominees, other than Mr. Ehlinger and Mr. Leupold, will resign or retire from the Board no later than December 31, 2024.
BOARD COMPOSITION AND REFRESHMENT
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QUALIFICATIONS, EXPERTISE AND ATTRIBUTES
QUALIFICATIONS, EXPERTISE AND ATTRIBUTES In addition to each director’s qualifications, experience and skills outlined above and the minimum Board qualifications set forth below under “Consideration of Director Nominees,” our NCG Committee looked for certain attributes in each director and based on these attributes, and the mix of attributes of the other incumbent directors, determined that each director should serve on our Board. The NCG Committee does not require that each director possess all of these attributes but rather that the Board is comprised of directors that, taken together, provide us with a variety and depth of knowledge, judgment and experience necessary to provide effective oversight and vision. These attributes include: (a) significant leadership skills as a CEO and / or relevant Board Member experience, (b) real estate industry experience, (c) transactional experience, especially within the real estate industry, (d) relevant experience in property operations, (e) financial expertise, (f) legal or regulatory experience, (g) capital markets experience, (h) marketing and / or investor relations experience, (i) executive leadership and talent development experience, (j) corporate governance experience and (k) experience in ESG initiatives and implementation.
QUALIFICATIONS, EXPERTISE AND ATTRIBUTES
| Skills and Qualifications | | Shiffman | Allen | Baivier | Bergeron | Blau | Ehlinger | Hermelin | Leupold | Lewis | Weiss | | | Board and Executive Experience is critical to our Board’s role in overseeing the risks facing the Company, and provides essential comparison points for operations and governance | | | | | | | | | | | | | Real Estate Industry is helpful for understanding the Company’s strengths and challenges specific to the REIT and real estate industries | | | | | | | | | | | | | Mergers and Acquisitions is critical in overseeing and providing insights on the Company’s acquisition activities | | | | | | | | | | | | | Property Operations Is valuable in understanding and overseeing management of the Company’s properties | | | | | | | | | | | | | Financial Expertise and / or Literacy is valuable in understanding and overseeing the Company’s financial reporting and internal controls | | | | | | | | | | | | | Legal / Regulatory is relevant for ensuring oversight of management’s compliance with the SEC, the NYSE and other regulatory requirements | | | | | | | | | | | | | Capital Markets is valuable in understanding how capital markets work and overseeing the Company’s capital raising efforts | | | | | | | | | | | | | Marketing / Investor Relations is relevant in overseeing how the Company manages communication between corporate management and its investors | | | | | | | | | | |
QUALIFICATIONS, EXPERTISE AND ATTRIBUTES
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QUALIFICATIONS, EXPERTISE AND ATTRIBUTES
| Skills and Qualifications | | Shiffman | Allen | Baivier | Bergeron | Blau | Ehlinger | Hermelin | Leupold | Lewis | Weiss | | | Executive Leadership and Talent Development is valuable in helping the Company attract, motivate and retain high-performing employees | | | | | | | | | | | | | Corporate Governance Is critical in overseeing the structure of rules, practices and processes used to direct and manage our Company | | | | | | | | | | | | | ESG Is valuable in overseeing the Company's ESG initiatives | | | | | | | | | | | | Gender Racial and Ethnic Diversity | | Shiffman | Allen | Baivier | Bergeron | Blau | Ehlinger | Hermelin | Leupold | Lewis | Weiss | | | Gender Diversity | | | | | | | | | | | | | Racial / Ethnic Diversity | | | | | | | | | | |
QUALIFICATIONS, EXPERTISE AND ATTRIBUTES
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CONSIDERATION OF DIRECTOR NOMINEES
CONSIDERATION OF DIRECTOR NOMINEES
BOARD OF DIRECTORS
BOARD OF DIRECTORS Our current directors are Gary A. Shiffman, Tonya Allen, Meghan G. Baivier, Stephanie W. Bergeron, Jeff T. Blau, Jerome W. Ehlinger, Brian M. Hermelin, Ronald A. Klein, Craig A. Leupold, Clunet R. Lewis and Arthur A. Weiss. Under our charter, each of our directors serves for a one-year term and until his or her successor is duly elected and qualified, or until his or her earlier resignation or removal. Messrs. Ehlinger and Leupold were identified by the Company and appointed to the Board following constructive discussion the Company held with Land and Buildings Investment Management LLC, a shareholder of the Company, as part of a Board refreshment initiative. In addition, Ronald A. Klein will not stand for re-election. He will continue to serve on the Board of Directors until the date of the Annual Meeting, and one of the ten nominees, other than Mr. Ehlinger and Mr. Leupold, will resign or retire from the Board no later than December 31, 2024, as a result of the Board's focus on refreshment. The Board is elected by our shareholders to oversee and provide guidance on the Company’s business and affairs. It is the ultimate decision-making body of the Company except for those matters reserved for shareholders by law or pursuant to the Company’s governing documents. The Board oversees management’s activities in connection with proper safeguarding of the assets of the Company, maintenance of appropriate financial and other internal controls, compliance with applicable laws and regulations and proper governance. The Board is committed to sound corporate governance policies and practices that are designed and routinely assessed to enable the Company to operate its business responsibly, with integrity, and to position the Company to compete more effectively, sustain its success and build long-term shareholder value.
BOARD OF DIRECTORS
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Director Compensation
Director Compensation
DIRECTOR COMPENSATION – 2023
DIRECTOR COMPENSATION – 2023 During 2023, we paid non-employee directors the following annual fees:
Non-Employee Director
| | | Compensation | | | Aggregate number of restricted shares outstanding at December 31, 2023 | | | | Directors | Fees Earned | 2023 Restricted Stock Award(1) | Total | | | | | Tonya Allen | $97,500 | $296,240 | $393,740 | | 5,209 | | | Meghan G. Baivier | $127,500 | $296,240 | $423,740 | | 5,400 | | | Stephanie W. Bergeron | $127,500 | $296,240 | $423,740 | | 5,400 | | | Jeff T. Blau | $74,667 | $296,240 | $370,907 | | 2,000 | | | Brian M. Hermelin | $127,500 | $296,240 | $423,740 | | 5,400 | | | Ronald A. Klein | $132,500 | $296,240(2) | $428,740 | | 5,400(3) | | | Clunet R. Lewis | $147,500 | $296,240 | $443,740 | | 5,400 | | | Arthur A. Weiss | $97,500 | $296,240 | $393,740 | | 5,400 | | | | $932,167 | $2,369,920 | $3,302,087 | | 39,609 |
Director Compensation
Director Compensation
Annual Incentive Performance Metrics - Gary Shiffman, Fernando Castro-Caratini and Aaron Weiss
Annual Incentive Performance Metrics - Gary Shiffman, Fernando Castro-Caratini and Aaron Weiss
Annual Incentive Performance Metrics - Gary Shiffman, Fernando Castro-Caratini and Aaron Weiss
| | Target | Result | Payout Shiffman | Payout Castro-Caratini & Aaron Weiss | | Core FFO growth Did not meet threshold | ≥ 1.0% to < 2.0% | (3.4)% | —% | —% | | Same Property combined NOI growth - MH, RV and Marina Exceeded maximum | ≥ 5.25% to 5.75% | 7.3% | 200% | 130% | | Development and expansion activities Met threshold | > 950 to 1,150 Sites delivered | 802 | 100% | 75% | | ESG initiatives Exceeded maximum | Exceeded | Excelled | 200% | 130% |
Annual Incentive Performance Metrics - Bruce Thelen
Annual Incentive Performance Metrics - Bruce Thelen
Annual Incentive Performance Metrics - Bruce Thelen
| | Target | Result | Payout | | Core FFO growth Did not meet threshold | ≥ 1.0% to < 2.0% | (3.4)% | —% | | Same Property combined NOI growth - MH and RV Exceeded maximum | ≥ 4.75% to 5.25% | 6.2% | 130% | | Combined Operations / Sales CNOI Exceeded maximum | > Budget to Budget + 0.5% | Budget + 2.4% | 130% | | RPS Gains Exceeded maximum | ≥ 2,900 to < 3,200 | 3,268 | 130% | | Development and expansion activities Met threshold | > 950 to 1,150 Sites delivered | 802 | 75% | | ESG initiatives Exceeded maximum | Exceeded | Excelled | 130% |
Annual Incentive Performance Metrics - Bruce Thelen
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Annual Incentive Performance Metric - Marc Farrugia
Annual Incentive Performance Metric - Marc Farrugia Mr. Farrugia serves as the Executive Vice President and Chief Administrative Officer of the Company. For the year ended December 31, 2023, the CEO reviewed Mr. Farrugia's overall responsibilities, his individual performance during the year, the Company’s performance or other criteria deemed relevant to the Compensation Committee, and the annual incentives of the other executive officers and Mr. Farrugia's overall compensation, and made a recommendation of Mr. Farrugia's incentive compensation to the Compensation Committee. The Compensation Committee considered the CEO's recommendation and independently reviewed Mr. Farrugia's performance and exercised its sole discretion in awarding incentive compensation to Mr. Farrugia.
2021 - 2023 Market Equity Award - Grant Date Fair Value vs Realized Value
2021 - 2023 Market Equity Award - Grant Date Fair Value vs Realized Value Consistent with prior practices, we remain committed to a highly oriented pay-for-performance equity program in which a majority of share grants continue to be tied to rigorous shareholder return-based goals. In light of headwinds faced by the Company in 2022 and 2023, our TSR was negative in both of those years, the second time in Mr. Shiffman’s tenure with two consecutive years of negative returns (the first being 2007-2008 during the Great Recession). As a result, Mr. Shiffman’s performance-based equity incentive award, granted in 2021, did not vest at December 31, 2023 (see chart above) and his 2023 pay is at its lowest level since 2019 (see the below chart). These are deliberate and logical outcomes of our stated alignment between pay and performance. In addition, the realized value of his equity awards will ultimately be lower than is reflected in the Summary Compensation Table if performance hurdles are not met. His cash bonus payout is also at its lowest amount since 2016.
2021 - 2023 Market Equity Award - Grant Date Fair Value vs Realized Value
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CEO # of Shares Granted
| Name and Principal Position | Year | Salary ($) | Non - Equity Incentive ($) | Stock Awards ($) | All Other Compensation ($) | Total ($) | | Gary A. Shiffman Chairman, President and CEO | 2024 | $900,000 | $0 - $1,800,000(1) | $557,985 | $16,086(2) | $1,474,071 - $3,274,071(3) | | | 2023 | $900,000 | $747,000 | $9,283,660 | $16,086 | $10,946,746 | | | 2022 | $900,000 | $1,665,000 | $12,395,450 | $6,132 | $14,966,582 |
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The following table includes information concerning compensation for our NEOs for the fiscal year ended December 31, 2023, 2022 and 2021:
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary | Non-Equity Incentive(1) | Stock Awards(2) | All Other Compensation | Total | | Gary A. Shiffman Chairman, President and CEO | 2023 | $900,000 | $747,000 | $9,283,660 | $16,086 | $10,946,746 | | | 2022 | $900,000 | $1,665,000 | $12,395,450 | $6,132 | $14,966,582 | | | 2021 | $851,957 | $1,800,000 | $11,171,661 | $4,670 | $13,828,288 | | Fernando Castro-Caratini Executive Vice President, CFO, Treasurer and Secretary | 2023 | $550,000 | $366,850 | $2,475,643 | $8,637 | $3,401,130 | | | 2022 | $474,868 | $669,625 | $1,533,655 | $7,205 | $2,685,353 | | | 2021 | $305,245 | $201,518 | $859,680 | $1,389 | $1,367,832 | | Bruce D. Thelen Executive Vice President, COO | 2023 | $500,000 | $508,250 | $2,104,296 | $7,560 | $3,120,106 | | | 2022 | $500,000 | $527,500 | $1,559,186 | $7,205 | $2,593,891 | | | 2021 | $441,506 | $650,000 | $992,134 | $7,153 | $2,090,793 | | Marc Farrugia Executive Vice President and Chief Administrative Officer | 2023 | $475,000 | $322,635 | $1,237,821 | $2,610 | $2,038,066 | | | 2022 | $412,310 | $439,375 | $1,082,580 | $3,246 | $1,937,511 | | | 2021 | $319,720 | $224,451 | $1,074,600 | $2,028 | $1,620,799 | | Aaron Weiss Executive Vice President of Corporate Strategy and Business Development | 2023 | $525,000 | $393,488 | $1,856,732 | $42,643(3) | $2,817,863 | | | 2022 | $525,000 | $789,188 | $1,039,457 | $35,938(3) | $2,389,583 | | | 2021 | $95,519(4) | $400,000 | $2,256,128(5) | $33 | $2,751,680 |
SUMMARY COMPENSATION TABLE
(1)Annual incentives earned for a year are paid in the subsequent year. This column includes annual incentives earned for the 2023, 2022 and 2021 performance years paid in 2024, 2023 and 2022, respectively. See "2023 Compensation Decisions" above for additional information. (2)This column includes restricted stock awards granted in 2023, 2022 and 2021 for the 2022, 2021 and 2020 performance years, respectively. Restricted stock awards for the 2023 performance year were granted in 2024. Amounts disclosed above represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions with respect to these grants, refer to Note 11, "Share-Based Compensation," in the Consolidated Financial Statements of our 2023 Annual Report on Form 10-K. (3)Includes £26,177 (or approximately $33,327) and £25,487 (or approximately $31,019) received as director fees for serving on the board of a UK subsidiary of the Company during the years ended December 31, 2023 and 2022, respectively. The director fees were paid in Pounds sterling and converted to U.S. Dollars at the USD/GBP spot rate of 1.2731 and 1.2171 at December 31, 2023 and 2022, respectively. (4)Aaron Weiss' employment with the Company began on October 18, 2021. (5)This represents the value of the 11,488 stock awards issued to Aaron Weiss upon the commencement of his employment at the Company.
SUMMARY COMPENSATION TABLE
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GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS The following table provides information on grants of awards under any plan received by our NEOs for the year ended December 31, 2023. Estimated future payouts under non-equity incentive plan awards represent cash incentive opportunities that would be paid in 2024 for 2023 performance. Estimated future payouts under equity incentive plan awards represent the estimated future payouts of equity awards granted in 2023 for 2022 performance.
GRANTS OF PLAN-BASED AWARDS
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards(1)(2) (#) | Grant Date Fair Value of Stock Awards(3) ($) | | Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Gary A. Shiffman | Annual incentive | | $900,000 | $1,350,000 | $1,800,000 | | | | | | | | Time | 2/24/2023 | | | | | | | 30,000 | $4,396,500 | | | Market | 2/24/2023 | | | | 27,000 | 36,000 | 45,000 | | $4,887,160 | | Fernando Castro-Caratini | Annual Incentive | | $412,500 | $550,000 | $715,000 | | | | | | | | Time | 2/24/2023 | | | | | | | 8,000 | $1,172,400 | | | Market | 2/24/2023 | | | | 7,200 | 9,600 | 12,000 | | $1,303,243 | | Bruce D. Thelen | Annual Incentive | | $375,000 | $500,000 | $650,000 | | | | | | | | Time | 2/24/2023 | | | | | | | 6,800 | $996,540 | | | Market | 2/24/2023 | | | | 6,120 | 8,160 | 10,200 | | $1,107,756 | | Marc Farrugia | Annual Incentive | | $237,500 | $356,250 | $475,000 | | | | | | | | Time | 2/24/2023 | | | | | | | 4,000 | $586,200 | | | Market | 2/24/2023 | | | | 3,600 | 4,800 | 6,000 | | $651,621 | | Aaron Weiss | Annual Incentive | | $393,750 | $525,000 | $682,500 | | | | | | | | Time | 2/24/2023 | | | | | | | 6,000 | $879,300 | | | Market | 2/24/2023 | | | | 5,400 | 7,200 | 9,000 | | $977,432 |
GRANTS OF PLAN-BASED AWARDS
(1)All market-based and time-based equity incentive awards were granted under the Sun Communities, Inc. 2015 Equity Incentive Plan. (2)There were no stock options granted to our NEOs in the year ended December 31, 2023. (3)Amounts disclosed above represent the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. For additional information on the valuation assumptions with respect to these grants, refer to Note 11, "Share-Based Compensation," in the Consolidated Financial Statements of our 2023 Annual Report on Form 10-K.
GRANTS OF PLAN-BASED AWARDS
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OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023 The following table provides certain information with respect to the value of all restricted share awards previously granted to our NEOs. None of the NEOs hold any unexercised options.
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
| | | | Share Awards | | | Name | Grant Date | Time Vested, Market or Performance(1) | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested(2) | | Gary A. Shiffman | 3/14/2017 | T1 | 3,750 | $501,188 | | | 3/20/2019 | T3 | 4,800 | $641,520 | | | 2/13/2020 | T3 | 10,400 | $1,389,960 | | | 3/17/2021 | T3 | 20,400 | $2,726,460 | | | 3/17/2021 | M1 | 51,000 | $—(3) | | | 3/17/2021 | T4 | 1,667 | $222,795 | | | 3/17/2021 | M1 | 5,000 | $—(3) | | | 2/23/2022 | T3 | 27,200 | $3,635,280 | | | 2/23/2022 | M1 | 51,000 | $2,186,260 | | | 2/24/2023 | T3 | 30,000 | $4,009,500 | | | 2/24/2023 | M1 | 45,000 | $3,551,509 | | Total | | | 250,217 | $18,864,472 | | Fernando Castro-Caratini | 2/22/2018 | T2 | 150 | $20,048 | | | 4/15/2019 | T3 | 400 | $53,460 | | | 4/15/2019 | T3 | 600 | $80,190 | | | 3/3/2020 | T3 | 800 | $106,920 | | | 3/3/2020 | T3 | 800 | $106,920 | | | 3/5/2021 | T3 | 1,200 | $160,380 | | | 3/5/2021 | T3 | 2,400 | $320,760 | | | 2/24/2022 | T3 | 6,800 | $908,820 | | | 2/24/2023 | T3 | 8,000 | $1,069,200 | | | 2/24/2023 | M1 | 12,000 | $947,069 | | Total | | | 33,150 | $3,773,767 | | Bruce D. Thelen | 4/15/2019 | T3 | 400 | $53,460 | | | 4/15/2019 | T3 | 800 | $106,920 | | | 3/3/2020 | T3 | 800 | $106,920 | | | 3/3/2020 | T3 | 1,200 | $160,380 | | | 2/11/2021 | T3 | 2,040 | $272,646 | | | 2/11/2021 | M1 | 5,100 | $—(3) | | | 2/24/2022 | T3 | 3,360 | $449,064 | | | 2/24/2022 | M1 | 6,300 | $270,067 | | | 2/24/2023 | T3 | 6,800 | $908,820 | | | 2/24/2023 | M1 | 10,200 | $805,009 | | Total | | | 37,000 | $3,133,286 | | Marc Farrugia | 4/15/2019 | T3 | 260 | $34,749 | | | 4/15/2019 | T3 | 260 | $34,749 | | | 3/3/2020 | T3 | 800 | $106,920 | | | 3/3/2020 | T3 | 800 | $106,920 | | | 3/5/2021 | T3 | 1,200 | $160,380 | | | 3/5/2021 | T3 | 3,300 | $441,045 | | | 2/24/2022 | T3 | 4,800 | $641,520 | | | 2/24/2023 | T3 | 4,000 | $534,600 | | | 2/24/2023 | M1 | 6,000 | $473,535 | | Total | | | 21,420 | $2,534,418 |
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
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OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
| | | | Share Awards | | | Name | Grant Date | Time Vested, Market or Performance(1) | Number of Shares or Units of Stock that Have Not Vested | Market Value of Shares or Units of Stock that Have Not Vested(2) | | Aaron Weiss | 10/18/2021 | T3 | 6,894 | $921,383 | | | 2/24/2022 | T3 | 2,240 | $299,376 | | | 2/24/2022 | M1 | 4,200 | $180,045 | | | 2/24/2023 | T3 | 6,000 | $801,900 | | | 2/24/2023 | M1 | 9,000 | $710,302 | | Total | | | 28,334 | $2,913,006 |
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
| (1) Time-vested anniversary year | T1 | T2 | T3 | T4 | | 1 | —% | —% | 20% | 33.3% | | 2 | —% | —% | 20% | 33.3% | | 3 | 20% | 35% | 20% | 33.4% | | 4 | 30% | 35% | 20% | —% | | 5 | 35% | 20% | 20% | —% | | 6 | 10% | 5% | —% | —% | | 7 | 5% | 5% | —% | —% |
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
| Market anniversary year | M1 | | 1 | —% | | 2 | —% | | 3 | 100% |
OUTSTANDING EQUITY AWARDS AT YEAR-END DECEMBER 31, 2023
(2)Time shares valued based on the closing price of our common stock on the NYSE of $133.65 as of December 31, 2023, Market shares valued using the valuation price of the respective market shares as of December 31, 2023. (3)Market shares were valued at zero as of December 31, 2023 as all shares were forfeited on 1/1/2024 as the vesting criteria was not met.
STOCK VESTED DURING 2023
STOCK VESTED DURING 2023 The following table sets forth certain information concerning shares held by our NEOs that vested during the year ended December 31, 2023:
STOCK VESTED DURING 2023
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Gary A. Shiffman | 76,572 | $10,901,752 | | Fernando Castro-Caratini | 5,250 | $765,333 | | Bruce Thelen | 5,120 | $754,913 | | Marc Farrugia | 4,505 | $655,406 | | Aaron Weiss | 2,857 | $325,688 |
CEO PAY RATIO
CEO PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. We consider the pay ratio specified below to be a reasonable estimate, calculated in a manner that is intended to be consistent with the requirements of Item 402(u) of Regulation S-K. Our pay ratio is provided to assist in evaluating our compensation practices and may not be meaningful when compared against other companies as impacts of varying organizational structures on employment bases and their respective compensation practices, as well as the methodology, assumptions and estimates each company uses in determining its median employee, may impact the pay ratios among and within industries.
CEO PAY RATIO
| 92 | Sun Communities, Inc. |
CEO PAY RATIO
As an owner and self-operator of the majority of our 667 properties, the Company employs significantly more on-site property-level employees than real estate companies in other sectors, such as office and retail, or those that hire outside property management companies to manage most or all of their properties. Rather than outsourcing property management, the Company’s strategy generally involves self-management of its assets, which aligns the long-term investment interests of our shareholders with our focused management of income, expense and capital expenditures. This alignment of interest allows our employees to act as owners, a strategy that has served our shareholders well in the long-term. For the year ended December 31, 2023, the annual total compensation of the employee who represents our median compensated employee (other than our CEO) was $38,263. The annual total compensation of our CEO, as reported in the Summary Compensation Table above, was $10,946,746. Based on this information, our CEO pay ratio for 2023 was 286:1. Over the last three years, shareholders have approved our executive compensation program by an average of 90% support of the votes cast. As set forth in the Compensation Discussion and Analysis, we believe our shareholders’ overwhelming support for the Company’s compensation program reflects the strong alignment between our CEO’s pay and performance. This information is being provided for compliance purposes. Neither the Compensation Committee nor the management of the Company used the pay ratio measure in making compensation decisions.
PAY VERSUS PERFORMANCE TABLE
PAY VERSUS PERFORMANCE TABLE The following table illustrates disclosed compensation from the Summary Compensation Table and compensation “actually paid” to our PEO and Non-PEO NEOs, as well as (i) our cumulative TSR performance, (ii) the TSR of the Dow Jones U.S. Real Estate Residential Index, (iii) our Net Income, and (iv) our Core FFO, our Company selected metric, for the years ended December 31, 2023, 2022, 2021 and 2020:
PAY VERSUS PERFORMANCE TABLE
| | | | | | Value of Initial Fixed $100 Investment(1) Based On: | | | | | Year | Summary Compensation Table Total for PEO | Compensation Actually Paid to PEO | Average Summary Compensation Table Total for Non-PEO NEOs | Average Compensation Actually Paid to Non-PEO NEOs | Total Shareholder Return | Dow Jones U.S. Real Estate Residential Index | Net Income / (loss)(2) | Core FFO/ Share | | 2023 | $10,946,746 | $(21,335) | $2,844,291 | $2,225,608 | $97.75 | $104.78 | $(213,300,000) | $7.10 | | 2022 | $14,966,582 | $(537,705) | $3,633,375 | $650,211 | $101.62 | $97.44 | $242,000,000 | $7.35 | | 2021 | $13,828,288 | $31,577,299 | $4,197,956 | $7,604,150 | $145.84 | $142.12 | $380,200,000 | $6.51 | | 2020 | $11,142,423 | $9,511,035 | $5,226,779 | $5,220,325 | $103.58 | $89.74 | $131,600,000 | $5.09 |
PAY VERSUS PERFORMANCE TABLE
(1)This calculation assumes a $100.00 investment on December 31, 2019, a reinvestment of distributions and actual increase of the market value of our common stock relative to an initial investment of $100.00. (2)Net Income / (loss) attributable to Sun Communities, Inc. common shareholders. Our PEO and Non-PEO NEOs included in the table above are as follows:
PAY VERSUS PERFORMANCE TABLE
| Year | PEO | Non-PEO NEOs | | 2023 | Gary A. Shiffman | Fernando Castro-Caratini, Bruce D. Thelen, Marc Farrugia, Aaron Weiss | | 2022 | Gary A. Shiffman | Fernando Castro-Caratini, Karen J. Dearing, John B. McLaren, Bruce D. Thelen, Aaron Weiss | | 2021 | Gary A. Shiffman | Karen J. Dearing, John B. McLaren, Bruce D. Thelen, Aaron Weiss | | 2020 | Gary A. Shiffman | Karen J. Dearing, John B. McLaren, Bruce D. Thelen, Baxter R. Underwood |
PAY VERSUS PERFORMANCE TABLE
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PAY VERSUS PERFORMANCE TABLE
Differences in our summary compensation table amounts and compensation actually paid reflect the following:
PAY VERSUS PERFORMANCE TABLE
| Year | 2023 | | 2022 | | 2021 | | 2020 | | | | PEO | Non-PEO NEOs | PEO | Non-PEO NEOs | PEO | Non-PEO NEOs | PEO | Non-PEO NEOs | | Deduction for amounts reported under the “Stock Awards” in the summary compensation table | $(9,283,660) | $(1,918,623) | $(12,395,450) | $(2,284,748) | $(11,171,661) | $(2,877,390) | $(9,208,679) | $(4,361,230) | | Increase based on ASC 718 fair value of awards granted during the year that remain unvested as of year end, determined as of year end | 7,561,009 | 1,562,608 | 9,536,728 | 1,757,757 | 17,581,362 | 4,169,907 | 8,972,498 | 4,533,145 | | Increase based on ASC 718 fair value of awards granted during the year that vested during the year, determined as of vesting date | — | — | — | — | — | — | — | — | | Increase / (deduction) for awards granted during prior year that were outstanding and unvested as of year end, determined based on change in ASC 718 fair value from prior year end to current year end | (8,671,507) | (356,644) | (10,955,590) | (2,231,046) | 11,147,435 | 1,988,939 | 86,515 | 43,861 | | Increase / (deduction) for awards granted during prior year that vested during the year, determined based on change in ASC 718 fair value from prior year end to vesting date | (773,054) | (8,584) | (2,602,551) | (389,594) | (414,809) | (22,465) | (2,576,195) | (404,974) | | Deduction of ASC 718 fair value of awards granted during prior year that were forfeited during current year, determined as of prior year end | (725,010) | — | — | — | (356,171) | (29,706) | — | — | | Addition of any dividends or other earnings paid on equity awards during the year, prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the year | 924,141 | 102,560 | 912,577 | 164,467 | 962,854 | 176,909 | 1,094,473 | 182,743 | | Total Adjustments | $(10,968,081) | $(618,683) | $(15,504,286) | $(2,983,164) | $17,749,010 | $3,406,194 | $(1,631,388) | $(6,455) |
PAY VERSUS PERFORMANCE TABLE
Our compensation "actually paid" is heavily influenced by the fair value of equity awards from year to year. As stock price volatility and fluctuations in the stock market impact the valuations of our awards, our resulting compensation “actually paid” to our PEO and our Non-PEO NEOs can be higher or lower (or even negative, as shown for 2022), than the figures disclosed in the summary compensation table. This is particularly true for our PEO, whose equity awards make up approximately 85% of total compensation for 2023 (83% for 2022, 81% for 2021 and 83% for 2020), and therefore have a significant impact on our overall "actually paid" compensation.
PAY VERSUS PERFORMANCE TABLE
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Description of the Relationship Between Pay Versus Performance
Description of the Relationship Between Pay Versus Performance The graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to Non-PEO NEOs, with (i) our cumulative TSR, (ii) the TSR of the Dow Jones U.S. Real Estate Residential Index, (iii) our Net Income, and (iv) our Core FFO, for the years ended December 31, 2020, 2021, 2022 and 2023. TSR amounts reported in the graph assume an initial fixed investment of $100 and that all dividends were reinvested. Our program is structured to pay for performance, with an annual incentive award that is largely tied to Core FFO Growth, Same Property Combined NOI Growth (of MH, RV and Marina), MH, RV and marina acquisitions, expansions and developments, and ESG initiatives, along with long-term incentives that are primarily performance-based and align with investor interests as performance is solely predicated on our TSR performance versus that of the MSCI U.S. REIT Index with an absolute TSR modifier that caps our payouts if our return is negative. As such, our compensation paid and performance are strongly aligned, as shown in the graphs below:
Description of the Relationship Between Pay Versus Performance
| 96 | Sun Communities, Inc. |