DEF 14A of Highwoods Properties, Inc., Mar 28, 2025

DEF 14A of Highwoods Properties, Inc.

Filed Mar 28, 2025 · FY20240000921082-25-000012

Open on EDGAR

  1. Compensation of Directors

    Compensation of Directors In 2024, the annual base cash retainer for non-employee directors was $60,000. Our board chair received an additional annual cash retainer of $40,000. Members of the audit, executive and compensation and governance committees received additional annual cash retainers of $7,500 for each committee, except that the additional annual cash retainer was $10,000 for the chair of the compensation and governance committee and $22,500 for the chair of the audit committee. Non-employee directors on the investment committee received additional annual cash retainers of $10,000. Non-employee directors do not receive additional fees for attendance at meetings or participation in conference calls of the board or its committees. On March 1, 2024, non-employee directors received a grant of time-based restricted stock with a value of approximately $90,000 based on the 10-day trailing average prior to the grant date. Such shares vest on the first anniversary of the grant date. The following table provides information regarding non-employee director compensation during 2024:

  2. Compensation of Directors

    | Name | Fees Earned or Paid in Cash | Stock Awards (1) | All Other Compensation (2) | Total | | Charles A. Anderson | $70,000 | $92,568 | $7,285 | $169,853 | | Gene H. Anderson | $77,500 | $92,568 | $7,285 | $177,353 | | Thomas P. Anderson | $70,000 | $92,568 | $7,285 | $169,853 | | Carlos E. Evans | $115,000 | $92,568 | $7,285 | $214,853 | | David L. Gadis | $67,500 | $92,568 | $7,285 | $167,353 | | David J. Hartzell | $77,500 | $92,568 | $7,285 | $177,353 | | Anne H. Lloyd | $97,500 | $92,568 | $7,285 | $197,353 | | Candice W. Todd (3) | $61,876 | $92,568 | $5,679 | $160,123 |

  3. Compensation of Directors

    __________ (1)Reflects the grant date fair value. As of December 31, 2024, each person then serving as a non-employee director held 3,786 unvested shares of time-based restricted stock. (2)Consists of dividends declared in 2024 on outstanding time-based restricted stock. (3)Ms. Todd was elected as a director effective January 30, 2024.

  4. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS __________________________________________________________________________________________________________________________________________________________________________ At this annual meeting, the terms of office for all of our directors will expire and the number of directors will be reduced from nine to seven. The seven persons listed below have been nominated as directors to hold office until the 2026 annual meeting and until any successors are elected and qualified. The board recommends a vote FOR each of the nominees. Should any one or more of these nominees become unable to serve for any reason, the board may designate substitute nominees, in which event the person named in the enclosed proxy will vote for the election of such substitute nominee or nominees, or reduce the number of directors on the board. Even though our charter provides for a plurality voting standard for election of directors, our corporate governance guidelines provide that, in uncontested elections such as at this meeting, any director nominee who receives a greater number of votes WITHHELD from their election than votes FOR such election must promptly offer to resign following certification of the vote. The compensation and governance committee would then make a recommendation to the board as to whether the resignation should be accepted. The board would then decide whether to accept the resignation and disclose its decision-making process. In a contested election, the required vote would be a plurality of votes cast.

  5. Nominees for Election to Term Expiring 2026

    Nominees for Election to Term Expiring 2026 Chuck Anderson co-founded Bandera Ventures, a private real estate development and investment firm, in 2003. Prior to founding Bandera Ventures, Chuck was with the Trammell Crow Company for 16 years, where he was senior executive director, responsible for the development and investment group for the western United States. He also served on Trammell Crow’s executive and operating committees. Chuck is a director, chair of the compensation committee and a member of the nominating and corporate governance committees of Triumph Financial, Inc. (NASDAQ:TFIN), a financial holding company. Chuck also serves on the board of directors of TBK Bank, SSB, the advisory board of directors for Portion Capital and the board of Alta Arbor Holdings and is active in the Watermark Community Church. The board recommends a vote FOR Chuck given his expertise in acquiring, developing and operating real estate assets, contacts throughout the real estate industry and experience serving on the board of directors of one other publicly-traded company. __________________________________________________________________________________________________________________________________________________________________________ Carlos Evans retired from Wells Fargo Bank in May 2014, where he served as executive vice president, group head of the eastern division of Wells Fargo commercial banking, had responsibility for the bank’s government and institutional banking group and served on Wells Fargo’s management committee. Carlos joined First Union National Bank in 2000 as the wholesale banking executive for the commercial segment prior to its merger with Wachovia Corporation in 2001. From 2006 until Wachovia’s merger with Wells Fargo in 2009, Carlos was the wholesale banking executive and an executive vice president for the Wachovia general banking group. Carlos is a director and member of the audit, compliance, compensation, contract review and governance and nominating committees of Goldman Sachs BDC, Inc. (NYSE:GSBD), a specialty finance company. Carlos is also chairman emeritus of the board of the Spoleto Festival USA and a director emeritus of Queens University of Charlotte. Carlos is a person of Latin American origin. The board recommends a vote FOR Carlos given his expertise in finance, capital markets and strategic transactions, experience serving on the board of directors of one other publicly-traded company and experience as an executive officer of a major financial institution. __________________________________________________________________________________________________________________________________________________________________________ David Gadis has served as chief executive officer and general manager of DC Water, one of the largest water utilities in the U.S., since May 2018, where he oversees a $1 billion annual budget and leads a workforce of approximately 1,100 employees. David is board chair of Blue Drop, DC Water’s nonprofit sales and marketing affiliate. Prior to joining DC Water, David served as chief executive officer and president of Veolia Water Indianapolis, a subsidiary of Veolia Group, the global leader in optimized resource management (listed on Paris Euronext:VIE), from December 1998 until January 2017. David serves on the board of directors of MN8 Energy, Inc., a renewable energy company. David is not a director of any other publicly-traded company. The board recommends a vote FOR David given his strategic leadership skills, experience as chief executive officer of a major capital-intensive utility and his expertise in finance, capital markets and strategic transactions. __________________________________________________________________________________________________________________________________________________________________________ Dave Hartzell is the Steven D. Bell and Leonard W. Wood Distinguished Professor in Real Estate at the University of North Carolina Kenan-Flagler Business School. Prior to joining the University of North Carolina in 1988, Dave was a vice president at Salomon Brothers Inc., a research associate for The Urban Institute and a financial economist for the U.S. Office of the Comptroller of Currency. He is a former president of the American Real Estate and Urban Economics Association. Dave is not a director of any other publicly-traded company. The board recommends a vote FOR Dave given his expertise related to real estate portfolios, real estate finance and mortgage-backed securities and experience in real estate investment banking. __________________________________________________________________________________________________________________________________________________________________________ Ted Klinck became our chief executive officer, director and chair of our investment committee in September 2019. Ted was our president and chief operating officer since November 2018, executive vice president and chief operating and investment officer from September 2015 to November 2018 and senior vice president and chief investment officer from March 2012 to August 2015. Before joining us in March 2012, Ted served as principal and chief investment officer with Goddard Investment Group, a privately-owned real estate investment firm. Previously, Ted had been a managing director at Morgan Stanley Real Estate Investments. Ted is chair of the First Tee – Triangle. He is also is a member of the Raleigh Chamber Board and NAREIT's Executive Board. Ted is not a director of any other publicly-traded company. The board recommends a vote FOR Ted given his strategic leadership skills, experience in acquiring, developing, selling and operating real estate assets and role as our chief executive officer. __________________________________________________________________________________________________________________________________________________________________________ Anne Lloyd is a certified public accountant and served as executive vice president and chief financial officer of Martin Marietta Materials, Inc. (NYSE:MLM), a leading supplier of building materials, from June 2005 until her retirement in August 2017. She joined Martin Marietta in 1998 as vice president and controller and was promoted to chief accounting officer in 1999. Anne is chair of James Hardie Industries, plc (ASX:JHX; NYSE:JHX), the world’s leading producer and marketer of high-performance fiber cement and fiber gypsum building solutions. She also served as interim chief financial officer of James Hardie Industries, plc from August 2019 until February 2020. Anne is also a director and member of the audit and executive compensation committees of Insteel Industries Inc. (NASDAQ:IIIN), the nation’s largest manufacturer of steel wire reinforcing products for concrete construction applications. The board recommends a vote FOR Anne given her experience as an executive officer of a major industrial company, background as a certified public accountant, experience serving on the board of directors of two other publicly-traded companies and risk assessment and financial reporting expertise. __________________________________________________________________________________________________________________________________________________________________________

  6. Nominees for Election to Term Expiring 2026

    Candice Todd served as Managing Director/Global Chief Financial Officer of Morgan Stanley Real Estate Investments from 2019 until her retirement in February 2023. Candice first joined a predecessor of Morgan Stanley in 1994 and served in a variety of real estate investment, finance and accounting roles, including Global Chief Financial Officer of Morgan Stanley’s open-end funds (Prime Property Fund U.S., Prime Property Fund Europe and Prime Property Fund Asia). Candice is a director and member of the audit committee of National Health Investors, Inc. (NYE:NHI), a real estate investment trust specializing in need-driven and discretionary senior housing and medical investments. Candice is also a director and past chair of the National Council of Real Estate Investment Fiduciaries. The board recommends a vote FOR Candice given her expertise in real estate, finance, capital markets and strategic transactions, contacts throughout the real estate industry, experience as an executive officer of a major commercial real estate company, experience serving on the board of directors of one other publicly-traded company, background as a certified public accountant and risk assessment and financial reporting expertise. __________________________________________________________________________________________________________________________________________________________________________

  7. Peer Group

    Peer Group A key factor in determining levels of compensation is the pay practices of our peer group, which consists of publicly-traded office REITs that our board and management believe to be most comparable to our company in terms of property type, class and condition of buildings, types of geographic markets, revenues and capital structure. The peer group typically changes from time to time due to factors such as industry consolidation, new market entrants and significant shifts in portfolio types. Publicly available data from the peer group was considered in determining the proportions of base salary, annual non-equity incentive compensation and equity incentive compensation, as well as targeted total compensation. Overall compensation is intended to be at, above or below competitive levels depending upon our performance relative to our targeted performance and the performance of our peer group. The following table provides key information for each peer company according to publicly available information as of December 31, 2024 ($ in millions):

  8. Peer Group

    | Name | Headquarters | Employees | Total Enterprise Value | 2024 Total Stockholder Return | | Highwoods Properties, Inc. | Raleigh, NC | 350 | $6,619 | 43.0% | | Brandywine Realty Trust | Philadelphia, PA | 285 | $3,225 | 17.2% | | City Office REIT, Inc. | Vancouver, BC | 20 | $970 | -2.7% | | COPT Defense Properties | Columbia, MD | 427 | $5,937 | 26.1% | | Cousins Properties Incorporated | Atlanta, GA | 306 | $7,795 | 32.6% | | Hudson Pacific Properties, Inc. | Los Angeles, CA | 740 | $5,654 | -66.9% | | Kilroy Realty Corporation | Los Angeles, CA | 229 | $9,508 | 7.7% | | Piedmont Office Realty Trust, Inc. | Atlanta, GA | 150 | $3,225 | 37.2% |

  9. Annual Non-Equity Incentive Program

    Annual Non-Equity Incentive Program Each year, named executives participate in our annual non-equity incentive program pursuant to which they are eligible to earn cash payments based on a percentage of their annual base salary as of the end of such year. Under this component of our executive compensation program, named executives are eligible to earn additional cash compensation to the extent specific performance-based metrics are achieved during the most recently completed year. The position held by each named executive has a target annual incentive percentage. In addition to considering the pay practices of our peer group in determining each named executive’s annual incentive percentage, the committee also considers the individual’s ability to influence our overall performance. The more senior the position, the greater the portion of compensation that varies with performance. For 2024, the target annual incentive percentage for the named executives was as follows:

  10. Annual Non-Equity Incentive Program

    | Name | Target Annual Non-Equity Incentive Percentage | | Theodore J. Klinck | 140% | | Brendan C. Maiorana | 90% | | Brian M. Leary | 90% | | Jeffrey D. Miller | 75% |

  11. Annual Non-Equity Incentive Program

    The percentage amount a named executive may earn under the annual non-equity incentive program is the product of the target annual incentive percentage times an “actual performance factor,” which can range from zero to 200%. The actual performance factor depends upon the relationship between actual performance in specific areas in each of our markets and predetermined goals. For our named executives, who serve as corporate executives, the actual performance factor was based on the goals and criteria applied to our performance as a whole in 2024. Named executives receive quarterly updates throughout the year that illustrate our projected performance, which is an important tool in keeping our employees focused on achieving our strategic and operating goals. The components and weighting of each year’s performance metrics are approved by the compensation and governance committee near the beginning of each year. These metrics are intended to closely match our company’s overall operating and financial goals and provide our named executives with direct “line of sight” to focus their individual and collective efforts on the achievement of the metrics. The performance metrics, which are equally weighted, are generally the following: •FFO per share (adjusted to exclude the dilutive or accretive impact of investment activity during the year); •net operating income (on a market-by-market basis, inclusive of other income, general and administrative expense and a capital charge/credit applied to net operating income derived from investment activity and excluding unusual charges or credits); and •average occupancy (on a market-by-market basis). The committee approves threshold, target and maximum levels with respect to each of the metrics. The following table provides information about the performance-based metrics under our annual non-equity incentive program for 2024:

  12. Annual Non-Equity Incentive Program

    | Factor | Threshold (50%) | Target (100%) | Maximum (200%) | Actual Performance | Actual Performance Factor | | FFO per Share | $3.48 | $3.55 | $3.69 | $3.62 | 150% | | Net Operating Income Growth | (2.50)% | (1.00)% | 2.50% | 0.67% | 148% | | Average Occupancy | 86.00% | 88.50% | 91.00% | 87.99% | 90% | | Average of the Factors | | | | | 129% |

  13. Annual Non-Equity Incentive Program

    If the threshold level is not satisfied with respect to a particular factor, the actual performance factor would be zero with respect to that factor. If performance exceeds the threshold level but does not satisfy the target level, the actual performance factor would range on a continuum between 50% and 100% with respect to that factor. If performance is between the target level and the maximum level, the actual performance factor would range on a continuum between 100% and 200% with respect to that factor. The performance factor used to determine the amount an executive could earn in 2024 under the annual non-equity incentive program was the average of the three factors. Notwithstanding the formulas described above, our compensation and governance committee retains the discretion and flexibility to increase or decrease the actual performance factor for the chief executive officer and, after receiving input from the chief executive officer, for our other named executives to more appropriately reflect actual performance, market conditions, unanticipated circumstances and other factors. The actual performance factor was not modified for any of our named executives in 2024. The following table provides information about the performance-based metrics under our annual non-equity incentive program for 2025:

  14. Annual Non-Equity Incentive Program

    | Factor | Threshold (50%) | Target (100%) | Maximum (200%) | | FFO per Share | $3.28 | $3.35 | $3.55 | | Net Operating Income Growth | (3.00)% | (1.50)% | 4.00% | | Average Occupancy | 85.00% | 87.00% | 90.00% |

  15. Annual Non-Equity Incentive Program

    For payouts, if any, under our annual non-equity incentive program for 2025 that will be made on about March 1, 2026, in lieu of receiving cash payments, named executives have been provided the option to receive all or a portion of their payout in the form of time-based restricted stock that vests ratably on an annual basis over a three-year term. If a named executive who makes such an election leaves our company, unvested shares would be immediately forfeited except in the event of death or disability. Messrs. Klinck and Maiorana have elected to receive all of their payout, if any, under our annual non-equity incentive program for 2025 in the form of time-based restricted stock.

  16. Equity Incentive Compensation-Overview

    Equity Incentive Compensation-Overview Named executives are eligible to receive equity incentive compensation that promotes our long-term success by aligning their interests with those of our stockholders. The equity incentive awards provide named executives with an ownership interest in our company and a direct and demonstrable stake in our success to the extent of their position, responsibility, overall impact and contribution. We have adopted stock ownership guidelines for all of our officers, including named executives. For additional information, see “Corporate Governance and Board Matters - Stock Ownership Guidelines.” Such awards are typically granted during the first quarter of each year. Our compensation and governance committee authorizes a mix of long-term equity incentive awards to our named executives. For awards granted to named executives in 2024, the mix was 50% in time-based restricted stock and 50% in total return-based restricted stock. For 2024, the target annual equity incentive percentage for the named executives was as follows:

  17. Equity Incentive Compensation-Overview

    | Name | Target Annual Equity Incentive Percentage | | Theodore J. Klinck | 350% | | Brendan C. Maiorana | 180% | | Brian M. Leary | 180% | | Jeffrey D. Miller | 180% |

  18. Equity Incentive Compensation-Time-Based Restricted Stock

    Equity Incentive Compensation-Time-Based Restricted Stock The issuance of time-based restricted stock is an important retention tool and serves to deter our named executives from seeking other employment opportunities. Time-based restricted stock vests ratably on an annual basis generally over a four-year term. If a named executive leaves our company, unvested shares are immediately forfeited generally except in the event of death, disability or as otherwise provided under our retirement plan. If a named executive dies, unvested shares of time-based restricted stock will automatically vest. If a named executive becomes disabled, unvested shares of time-based restricted stock will become non-forfeitable and continue to vest according to the terms of their original grants. Dividends received on time-based restricted stock are non-forfeitable and are paid at the same rate and on the same date as on shares of our common stock.

  19. Equity Incentive Compensation-Total Return-Based Restricted Stock

    Equity Incentive Compensation-Total Return-Based Restricted Stock The issuance of total return-based restricted stock is an important retention tool that incentivizes our named executives to concentrate their efforts on generating and sustaining long-term stockholder value. One of our principal goals is to provide our stockholders with attractive risk-adjusted returns on their investment through the consistent payment of quarterly dividends and stock price appreciation. Total return is defined as the sum of stock price appreciation plus reinvested dividends over the stock value at the beginning of the applicable period. Each year, the compensation and governance committee sets payout levels based on the probable total return of our common stock over three years based, in part, on an analysis of historical three-year total return periods. In setting the minimum payout level, the committee considers, among other things, the expected dividend yield and volatility of our common stock during the applicable three-year period. If our absolute total return is less than the minimum threshold, all of the total return-based restricted stock will be forfeited at the end of the period, except as otherwise described below. The maximum payout level is determined such that the probability of achievement generally approximates 25%. In setting the target payout level, the committee considers an appropriate three-year compounded total return in light of then current economic conditions. The percentage of total return-based restricted stock that vests ranges between 50% and 100% to the extent our absolute total return ranges between the minimum level and the target level. All of the total-return based restricted stock will vest and we will issue an amount of additional shares up to 50% of the original award to the extent our absolute total return ranges between the target level and the maximum level. These additional shares, if any, would be fully vested when issued. The following table provides information about the total return-based restricted stock issued in 2024 and 2025:

  20. Equity Incentive Compensation-Total Return-Based Restricted Stock

    | Year | Starting Price (1) | Minimum (50%) | Target (100%) | Maximum (150%) | | 2024 | $24.45 | 12.5% Total Return | 25.0% Total Return | 37.5% Total Return | | 2025 | $29.13 | 12.5% Total Return | 25.0% Total Return | 37.5% Total Return |

  21. Equity Incentive Compensation-Total Return-Based Restricted Stock

    (1) Per share closing price as of the last trading day prior to the beginning of the applicable three-year period. Notwithstanding the foregoing, if our total return is in the 50th percentile or greater as compared to all of the companies included in the FTSE NAREIT Equity Office Index, at least 100% of such total return-based restricted stock will vest at the end of the applicable period. If a named executive leaves our company before the end of the three-year performance period, all of the total return-based restricted stock will be forfeited except in the event of death, disability or as otherwise provided under our retirement plan. If a named executive dies or becomes disabled, a pro rata portion of the total return-based restricted stock would become non-forfeitable and continue to vest according to the terms of their original grants. With respect to shares of total return-based restricted stock issued to our chief executive officer, dividends accumulate and are payable only if and to the extent the shares vest. Otherwise, dividends received on total return-based restricted stock are non-forfeitable and are paid at the same rate and on the same date as on shares of our common stock.

  22. Pay Versus Performance

    Pay Versus Performance The table set forth below provides information regarding the “compensation actually paid” to our chief executive officer and the average “compensation actually paid” to each of our other named executives along with certain performance metrics such as our total stockholder return and the total stockholder return of our peer group since December 31, 2019 and net income and core FFO per share for each of the years presented. Under SEC rules, “compensation actually paid” generally means the amounts reported under the “Total” column in the table under “-Summary Compensation,” but adjusted to reflect the change in actual value of outstanding equity awards during the applicable year. As a result, because we delivered absolute total stockholder return of 43.0% during 2024, “compensation actually paid” during the year as provided in the table set forth below was meaningfully higher than in prior years.

  23. Pay Versus Performance

    | | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO | Average Summary Compensation Table Total for Non-CEO NEOs | Average Compensation Actually Paid to Non-CEO NEOs | Value of Initial Fixed $100 Investment Based On: | | Net Income (in thousands) | Core FFO per Share (3) | | Year | | | | | Company Total Stockholder Return (1) | Peer Group Total Stockholder Return (1) (2) | | | | 2024 | $5,147,367 | $8,686,353 | $1,842,932 | $2,840,745 | $85.45 | $64.31 | $104,254 | $3.57 | | 2023 | $4,702,879 | $3,043,369 | $1,702,484 | $1,240,696 | $59.74 | $57.33 | $151,330 | $3.75 | | 2022 | $4,955,360 | $2,584,246 | $1,797,158 | $1,113,748 | $66.54 | $55.95 | $163,958 | $3.90 | | 2021 | $4,082,600 | $4,686,212 | $1,536,521 | $1,741,687 | $100.18 | $89.75 | $323,310 | $3.77 | | 2020 | $3,324,467 | $2,662,196 | $1,287,325 | $974,748 | $85.18 | $75.71 | $357,914 | $3.61 |

  24. Pay Versus Performance

    (1) The total stockholder return information assumes an investment on December 31, 2019 and further assumes the reinvestment of dividends. Total stockholder return performance is not necessarily indicative of future results. (2) For 2024, 2023 and 2022, our peer group consisted of Brandywine Realty Trust, City Office REIT, Inc., Corporate Office Properties Trust (now known as COPT Defense Properties), Cousins Properties Incorporated, Hudson Pacific Properties, Inc., Kilroy Realty Corporation and Piedmont Office Realty Trust, Inc. For 2021 and 2020, our peer group consisted of Brandywine Realty Trust, Inc., Columbia Property Trust, Corporate Office Properties Trust (now known as COPT Defense Properties), Cousins Properties Incorporated, Hudson Pacific Properties, Inc., Kilroy Realty Corporation, Mack-Cali Realty Corporation (now known as Veris Residential, Inc.) and Piedmont Office Realty Trust, Inc. The returns of each REIT have been weighted based on each company's stock market capitalization as of December 31, 2019. (3) "Core FFO per Share" is defined as FFO per share excluding one-time items such as land sale gains, impairments and debt extinguishment charges. The following table reconciles the information set forth in the "Compensation Actually Paid" columns in the table above to the "Summary Compensation Table Total" columns:

  25. Pay Versus Performance

    | | Year | Summary Compensation Table Total | (-) Stock Awards from Summary Compensation Table | (+) Fair value as of End of Year of All Awards Granted During the Year That Are Outstanding and Unvested as of the End of the Year | (+/-) Change as of the End of the Year (From the End of the Prior Year) in Fair Value of Any Awards Granted in Any Prior Year That Are Outstanding and Unvested as of the End of the Year | (+/-) Change as of the Vesting Date (From the End of the Prior Year) in Fair Value of Any Awards Granted in Any Prior Year That Were Scheduled to Vest During the Year | Compensation Actually Paid | | Theodore J. Klinck | 2024 | $5,147,367 | ($2,777,629) | $3,830,912 | $1,843,627 | $642,076 | $8,686,353 | | | 2023 | $4,702,879 | ($2,540,103) | $1,963,228 | ($1,033,502) | ($49,133) | $3,043,369 | | | 2022 | $4,955,360 | ($2,596,634) | $1,671,087 | ($1,404,870) | ($40,697) | $2,584,246 | | | 2021 | $4,082,600 | ($1,892,549) | $2,224,453 | $273,871 | ($2,163) | $4,686,212 | | | 2020 | $3,324,467 | ($1,669,699) | $1,538,355 | ($409,653) | ($121,274) | $2,662,196 | | Non-CEO NEO Average | 2024 | $1,842,932 | ($824,991) | $1,127,241 | $522,093 | $173,470 | $2,840,745 | | | 2023 | $1,702,484 | ($755,819) | $597,632 | ($289,007) | ($14,594) | $1,240,696 | | | 2022 | $1,797,158 | ($776,761) | $499,876 | ($390,020) | ($16,505) | $1,113,748 | | | 2021 | $1,536,521 | ($587,527) | $685,882 | $107,871 | ($1,060) | $1,741,687 | | | 2020 | $1,287,325 | ($519,584) | $471,862 | ($207,675) | ($57,180) | $974,748 |

  26. Pay Versus Performance

    The graphs below illustrate the relationship between the compensation actually paid to our chief executive officer and other named executives over the last five years and: (1) our cumulative total stockholder return on an absolute basis and relative to the cumulative total stockholder return of our peer group; (2) our net income; and (3) our core FFO per share: The compensation and governance committee considers the following to be the most important financial performance measures used to link compensation actually paid to company performance during the last fiscal year: •Our company’s absolute total stockholder return; •Our company’s total stockholder return relative to the total return of our peer group; •Core FFO per share; •FFO per share (adjusted to exclude the dilutive or accretive impact of investment activity during the year); •Net operating income (on a market-by-market basis, inclusive of other income, general and administrative expense and a capital charge/credit applied to net operating income derived from investment activity and excluding unusual charges or credits); and •Average occupancy (on a market-by-market basis).

  27. CEO Pay Ratio

    CEO Pay Ratio Unlike some other REITs, which outsource the leasing, management, maintenance and/or customer service of their properties to third parties, we are a fully-integrated REIT that generally staffs the leasing, management, maintenance and customer service of our own portfolio. We believe being a fully-integrated REIT is in the best long-term interests of our stockholders for a number of reasons: •in-house services generally allow us to better anticipate and respond to the many real-time demands of our existing and potential customer base; •we are able to provide our customers with more cost-effective services such as build-to-suit construction and space modification, including tenant improvements and expansions; •the depth and breadth of our capabilities and resources provide us with market information not generally available; •operating efficiencies achieved through our fully-integrated organization provide a competitive advantage in servicing our properties, retaining existing customers and attracting new customers; •we can ensure the consistent deployment of a comprehensive preventative maintenance program; •our established detailed service request process creates chain of custody for a customer request and tracks status and response time, which enables proactive identification of any underperforming equipment and vital reconnaissance for process improvement and leverage when specifying all aspects of any new construction; and •our first-hand relationships with our customers lead to better experiences for our customers and their teammates and often result in customers seeking renewals and additional space. As reflected in the Summary Compensation Table included in this proxy statement, Mr. Klinck had 2024 annual total compensation of $5,147,367. Mr. Klinck’s 2024 annual total compensation was approximately 54 times that of our median employee determined using the criteria described in the next paragraph. If we had outsourced the leasing, management, maintenance and customer service of all of our properties to a third party, this ratio would have been significantly lower. In determining the median employee, we relied on gross wages earned during 2022 for all permanent employees (including part-time, temporary and seasonal employees) as of December 31, 2022 as derived from our tax and payroll records. Gross wages were annualized for employees who did not work the full year, such as employees who were newly hired, on family medical leave, called for active military duty or took an unpaid leave of absence. All of our employees reside in the United States. The employee determined to be our median employee in 2022 earned total compensation of $95,963 in 2024.

  28. Change in Control Arrangements

    Change in Control Arrangements The currently outstanding award agreements under our 2015 long-term equity incentive plan and our 2021 long-term equity incentive plan provide for the immediate vesting of all restricted stock upon a change in control unless they are assumed by the surviving entity (or its parent if the surviving entity has a parent) or replaced with a comparable award of substantially equal value granted by the surviving entity (or its parent if the surviving entity has a parent). Additionally, we have change in control arrangements with our named executives that provide benefits to such officers in the event of an involuntary termination of employment after a change in control. Our compensation and governance committee believes the benefits payable upon such a termination of employment following a change in control are reasonable relative to similar arrangements involving executive officers of our peer companies and are important to ensure the retention and focus of key employees in the event our board determines that pursuing a potential change in control is in our stockholders’ best interest. The change in control agreements provide that, if within three years from the date of a change in control, the employment of the executive officer is terminated without cause, or the officer resigns with “good reason” (i.e. because such officer’s responsibilities are changed, salary is reduced or responsibilities are diminished), all restricted stock will immediately vest and such officer will be entitled to receive a cash payment equal to 2.99 times a base amount. The base amount for these purposes is equal to 12 times the highest monthly salary paid to the executive officer during the 12-month period ending prior to a change in control plus the greater of (1) the average amount earned under our annual non-equity incentive program and any other cash bonuses for the preceding three years or (2) the amount earned under such program and any other cash bonuses during the prior year. Each officer would also be entitled upon any such termination to receive a stay bonus otherwise payable on the first anniversary of a change in control in an amount equal to the base amount referred to in the preceding sentence. The agreements do not provide for benefits if the officer voluntarily resigns without good reason or gross-up payments to pay for applicable excise taxes. The agreement for Mr. Klinck is currently scheduled to expire on September 1, 2027, the agreements for Messrs. Leary and Maiorana are currently scheduled to expire on July 19, 2027 and the agreement for Mr. Miller is currently scheduled to expire on February 12, 2028. Each agreement is automatically extended for one additional year on each anniversary date unless we give at least 60 days’ prior notice that the term will not be extended. For purposes of these arrangements, “change in control” generally means any of the following events: •the acquisition by a third party of 20% or more of our then-outstanding common stock in the case of our change in control agreements and the acquisition by a third party of 40% or more of our then-outstanding common stock in the case of our long-term equity incentive plans; •the individuals who currently constitute the board (or individuals who subsequently become directors whose elections or nominations were approved by at least a majority of the directors currently constituting the board) cease for any reason to constitute a majority of the board in the case of our change in control agreements and our 2009 long-term equity incentive plan; •a reorganization, merger or consolidation in which we are not the surviving entity; or •a complete liquidation or dissolution or the sale or other disposition of all or substantially all of our assets.

  29. Retirement Plan

    Retirement Plan We have a retirement plan for employees with at least 30 years of continuous service or who are at least 55 years old with at least 10 years of continuous service. Subject to advance written notice, a non-compete agreement and certain other conditions, eligible retirees would be entitled to receive a pro rata amount of the annual non-equity incentive compensation earned during the year of retirement and stock options and time-based restricted stock would be non-forfeitable and vest according to the terms of their original grants. Eligible retirees would also be entitled to retain any total return-based restricted stock that subsequently vests after the retirement date according to the terms of their original grants. Mr. Klinck is currently eligible to receive benefits under the retirement plan. Mr. Miller will become eligible in August 2025, Mr. Leary will become eligible in July 2029 and Mr. Maiorana will become eligible in August 2030.

  30. Summary Compensation

    | Name and Principal Position | Year | Salary | Stock Awards (1) | Non-Equity Incentive Plan Compensation | All Other Compensation | Total | | Theodore J. Klinck | 2024 | $757,500 | $2,777,629 | $1,369,848 | $242,390 | $5,147,367 | | President and Chief Executive Officer | 2023 | $755,769 | $2,540,103 | $1,215,545 | $191,462 | $4,702,879 | | | 2022 | $732,692 | $2,596,634 | $1,480,605 | $145,429 | $4,955,360 | | Brendan C. Maiorana | 2024 | $485,820 | $912,270 | $564,780 | $94,822 | $2,057,692 | | Executive Vice President and Chief Financial Officer | 2023 | $484,710 | $835,751 | $501,162 | $72,314 | $1,893,937 | | | 2022 | $477,777 | $858,958 | $610,445 | $50,250 | $1,997,430 | | Brian M. Leary | 2024 | $479,839 | $900,964 | $557,827 | $97,884 | $2,036,514 | | Executive Vice President and Chief Operating Officer | 2023 | $478,743 | $825,465 | $494,992 | $85,440 | $1,884,640 | | | 2022 | $471,895 | $848,341 | $602,929 | $72,726 | $1,995,891 | | Jeffrey D. Miller | 2024 | $352,393 | $661,739 | $341,390 | $79,069 | $1,434,591 | | Executive Vice President, General Counsel and Secretary | 2023 | $351,588 | $606,241 | $302,935 | $68,111 | $1,328,875 | | | 2022 | $346,559 | $622,985 | $368,992 | $59,617 | $1,398,153 |

  31. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information regarding plan-based awards granted in 2024 to our named executives:

  32. Grants of Plan-Based Awards

    | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards; Shares of Stock (#) | Grant Date Fair Value of Stock Awards ($) (3) | | Name / Type of Award | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Theodore J. Klinck (4) | | | | | | | | | | Annual Non-Equity Incentive | $530,250 | $1,060,500 | $2,121,000 | | | | | | | Total Return-Based Restricted Stock | | | | 27,886 | 55,772 | 83,658 | | $1,414,004 | | Time-Based Restricted Stock | | | | | | | 55,772 | $1,363,625 | | Brendan C. Maiorana (4) | | | | | | | | | | Annual Non-Equity Incentive | $218,619 | $437,238 | $874,476 | | | | | | | Total Return-Based Restricted Stock | | | | 9,198 | 18,396 | 27,594 | | $462,488 | | Time-Based Restricted Stock | | | | | | | 18,396 | $449,782 | | Brian M. Leary (4) | | | | | | | | | | Annual Non-Equity Incentive | $215,928 | $431,855 | $863,710 | | | | | | | Total Return-Based Restricted Stock | | | | 9,084 | 18,168 | 27,252 | | $456,756 | | Time-Based Restricted Stock | | | | | | | 18,168 | $444,208 | | Jeffrey D. Miller (4) | | | | | | | | | | Annual Non-Equity Incentive | $132,148 | $264,295 | $528,590 | | | | | | | Total Return-Based Restricted Stock | | | | 6,672 | 13,344 | 20,016 | | $335,478 | | Time-Based Restricted Stock | | | | | | | 13,344 | $326,261 |

  33. Grants of Plan-Based Awards

    (1)The “Estimated Possible Payouts Under Non-Equity Incentive Plan Awards” columns reflect the threshold, target and maximum cash amounts that our named executives were eligible to earn in 2024 under our annual non-equity incentive program. The “Non-Equity Incentive Plan Compensation” column in the table under “-Summary Compensation” includes actual cash amounts earned under this program for 2024. (2)The “Estimated Future Payouts Under Equity Incentive Plan Awards” columns reflect the number of shares of total return-based restricted stock that will vest in the future assuming threshold, target and maximum levels are satisfied. The number of shares of restricted stock set forth in the target column reflects the actual number of shares of restricted stock granted in 2024. (3)For a description of our accounting policies and information regarding the calculation of the fair value of awards of total return-based restricted stock and time-based restricted stock, see Note 11 to the consolidated financial statements in our 2024 annual report. (4)The grant date for all equity incentive awards was March 1, 2024.

  34. Outstanding Equity Awards

    Outstanding Equity Awards The following table provides information regarding outstanding equity awards held by our named executives as of December 31, 2024, which is based on our year-end stock price of $30.58 per share:

  35. Outstanding Equity Awards

    | | Option Awards | | | Stock Awards | | | | | Name | Number of Securities Underlying Unexercised Options - Exercisable | Option Exercise Price | Option Expiration Date | Number of Shares of Stock That Have Not Vested (1) | Market Value of Shares of Stock That Have Not Vested (1) | Equity Incentive Plan Awards: Number of Unearned Shares That Have Not Vested (2) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares That Have Not Vested (2) | | Theodore J. Klinck | 8,723 | $45.61 | 2/27/25 | | | | | | Theodore J. Klinck | 30,895 | $43.55 | 2/28/26 | | | | | | Theodore J. Klinck | 23,036 | $52.49 | 2/28/27 | | | | | | Theodore J. Klinck (3) | | | | 112,677 | $3,445,663 | 133,476 | $4,081,696 | | Brendan C. Maiorana (4) | | | | 35,781 | $1,094,183 | 44,028 | $1,346,376 | | Brian M. Leary (5) | | | | 37,232 | $1,138,555 | 43,484 | $1,329,741 | | Jeffrey D. Miller | 8,429 | $45.61 | 2/27/25 | | | | | | Jeffrey D. Miller | 17,485 | $43.55 | 2/28/26 | | | | | | Jeffrey D. Miller | 16,500 | $52.49 | 2/28/27 | | | | | | Jeffrey D. Miller (6) | | | | 27,345 | $836,210 | 31,936 | $976,603 |

  36. Outstanding Equity Awards

    (1) Consists of time-based restricted stock. (2) Consists of total return-based restricted stock at target levels. (3) With respect to shares of time-based restricted stock, 39,598 shares vested prior to the mailing of this proxy statement, 33,369 shares are scheduled to vest in March 2026, 25,767 shares are scheduled to vest in March 2027 and 13,943 shares are scheduled to vest in March 2028. With respect to shares of total return-based restricted stock, 30,408 shares vested prior to the mailing of this proxy statement. If and to the extent the vesting criteria is satisfied, 47,296 shares are scheduled to vest in March 2026 and 55,772 shares are scheduled to vest in March 2027. (4) With respect to shares of time-based restricted stock, 11,676 shares vested prior to the mailing of this proxy statement, 11,007 shares are scheduled to vest in March 2026, 8,499 shares are scheduled to vest in March 2027 and 4,599 shares are scheduled to vest in March 2028. With respect to shares of total return-based restricted stock, 10,032 shares vested prior to the mailing of this proxy statement. If and to the extent the vesting criteria is satisfied, 15,600 shares are scheduled to vest in March 2026 and 18,396 shares are scheduled to vest in March 2027. (5) With respect to shares of time-based restricted stock, 13,425 shares vested prior to the mailing of this proxy statement, 10,871 shares are scheduled to vest in March 2026, 8,394 shares are scheduled to vest in March 2027 and 4,542 shares are scheduled to vest in March 2028. With respect to shares of total return-based restricted stock, 9,908 shares vested prior to the mailing of this proxy statement. If and to the extent the vesting criteria is satisfied, 15,408 shares are scheduled to vest in March 2026 and 18,168 shares are scheduled to vest in March 2027. (6) With respect to shares of time-based restricted stock, 9,860 shares vested prior to the mailing of this proxy statement, 7,984 shares are scheduled to vest in March 2026, 6,165 shares are scheduled to vest in March 2027 and 3,336 shares are scheduled to vest in March 2028. With respect to shares of total return-based restricted stock, 7,276 shares vested prior to the mailing of this proxy statement. If and to the extent the vesting criteria is satisfied, 11,316 shares are scheduled to vest in March 2026 and 13,344 shares are scheduled to vest in March 2027.

  37. Stock Vested

    Stock Vested The following table provides information regarding the vesting of restricted stock by our named executives during 2024:

  38. Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Theodore J. Klinck | 55,622 | $1,359,958 | | Brendan C. Maiorana | 10,295 | $251,713 | | Brian M. Leary | 21,170 | $517,607 | | Jeffrey D. Miller | 15,549 | $380,173 |

  39. Estimated Payments Upon Termination or a Change in Control

    Estimated Payments Upon Termination or a Change in Control Under the currently outstanding award agreements under our long-term equity incentive plans, had the employment of any of our named executives been terminated as of December 31, 2024 due to their death or disability (except as set forth in the next sentence), all of their unvested time-based restricted stock would have vested immediately, a pro rata portion of their total return-based restricted stock would have been non-forfeitable and continue to vest according to the terms of their original grants and their stock options exercisable as of December 31, 2024 would have continued to be exercisable for a six-month period thereafter. In the event of a disability, unvested shares of time-based restricted stock would have become non-forfeitable and continue to vest according to the terms of their original grants. In the event of death or disability, each of our named executives (or their estates) would have been entitled to receive a cash payment equal to the amount earned under the 2024 annual non-equity incentive program. See “-Summary Compensation” for information regarding amounts earned under our 2024 annual non-equity incentive program and “-Outstanding Equity Awards” for information regarding outstanding restricted stock and stock options as of December 31, 2024. As described under “-Compensation Discussion and Analysis - Change in Control Arrangements,” each of our named executives would receive certain benefits in connection with a change of control. The following table provides estimated information regarding the benefits each such officer would have received assuming the employment of such officers had been involuntarily terminated in connection with a change in control as of December 31, 2024:

  40. Estimated Payments Upon Termination or a Change in Control

    | Name | Cash Payment | Value of Benefits | Value of Vesting of Time-Based Restricted Stock | Value of Vesting of Total Return-Based Restricted Stock | | Theodore J. Klinck (1) | $9,857,966 | $129,083 | $3,445,663 | $6,198,641 | | Brendan C. Maiorana | $4,900,382 | $129,635 | $1,094,183 | $1,866,175 | | Brian M. Leary | $4,841,717 | $128,312 | $1,138,555 | $1,843,118 | | Jeffrey D. Miller | $3,197,468 | $126,763 | $836,210 | $1,353,654 |

  41. Estimated Payments Upon Termination or a Change in Control

    (1) Amounts set forth under "Value of Vesting of Total Return-Based Restricted Stock" include any accumulated and unpaid dividends. The following table provides estimated information regarding the benefits each such officer would have received assuming the employment of such officers had not been involuntarily terminated in connection with a change in control as of December 31, 2024:

  42. Estimated Payments Upon Termination or a Change in Control

    | Name | Cash Payment | Value of Vesting of Time-Based Restricted Stock | Value of Vesting of Total Return-Based Restricted Stock | | Theodore J. Klinck (1) | $2,127,348 | $3,445,663 | $6,198,641 | | Brendan C. Maiorana | $1,079,399 | $1,094,183 | $1,866,175 | | Brian M. Leary | $1,066,444 | $1,138,555 | $1,843,118 | | Jeffrey D. Miller | $711,395 | $836,210 | $1,353,654 |

  43. Estimated Payments Upon Termination or a Change in Control

    (1) Amounts set forth under "Value of Vesting of Total Return-Based Restricted Stock" include any accumulated and unpaid dividends.