DEF 14A of Brandywine Realty Trust, Apr 4, 2025

DEF 14A of Brandywine Realty Trust

Filed Apr 4, 2025 · FY20240000950170-25-050902

Open on EDGAR

  1. Trustee Compensation

    | Trustee Name | Fees Earned or Paid in Cash ($) (1) | Share Awards ($) (2) | All Other Compensation | Total ($) | | James Diggs | $168,000 | $115,000 | 0 | $283,000 | | Reginald DesRoches | $79,500 | $115,000 | 0 | $194,500 | | H. Richard Haverstick, Jr. | $107,000 | $115,000 | 0 | $222,000 | | Terri A. Herubin (3) | $16,500 | $— | 0 | $16,500 | | Joan Lau | $99,000 | $115,000 | 0 | $214,000 | | Charles P. Pizzi | $96,000 | $115,000 | 0 | $211,000 |

  2. Key 2024 Executive Compensation Actions

    Key 2024 Executive Compensation Actions Annual Incentives. Consistent with prior years, the corporate scorecard used for our 2024 annual incentive plan was tied to goals relating to our operations and leasing (50%) and capital investments and balance sheet strength (50%). Performance goals for the 2024 scorecard were established in the first quarter of 2024. Performance against the scorecard was achieved at 130 % of the target. After review of the formulaic outcome, and in consideration of the macro conditions that continue to impact the broader office sector, the Compensation Committee established 100% of target as the default payout and applied its discretion under the program to approve individual payouts to NEOs ranging from 90% to 100% of target. Long-Term Incentives. Our long-term incentive plan is designed to align management and shareholder interests, drive long-term value creation, and attract and retain key executive talent. For 2024, half of an NEO’s annual long-term incentive opportunity was delivered in the form of restricted share units (RSUs) that vest in equal proportions over three years. These 2024 RSUs also have an outperformance feature attached that could increase the original award up to 275% based on Brandywine’s achievement of superior results for average funds from operations (FFO) growth and total capital market activity during the three-year period ending December 31, 2026, with FFO growth weighted 25% and total capital market activity weighted 75%. The increase from 225% to 275% in the maximum payout of the outperformance feature is aimed at driving long-term outperformance with respect to operating metrics that management can influence and enhances the retention aspects of the long-term incentive program. The outperformance operating metrics emphasize the importance of balance sheet management in the current market environment, coupled with a continued focus on generating long-term earnings and cash flow growth as a drive of long-term value. Half of an NEO’s annual long-term incentive opportunity was delivered in the form of performance share units (“PSUs”) that may be earned based 75% on our leasing activity during each of 2024, 2025 and 2026, and 25% on our same-store net operating income growth during each of 2024, 2025 and 2026, with final payout subject to an additional 20% increase or decrease based on our three-year total shareholder return (TSR) versus the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index. Prior to 2024, two-thirds of an NEO's long-term incentive opportunity was delivered via PSUs and one-third was delivered via PSUs. The adoption of a fifty-fifty split is intended to enhance the retention features of the award while maintaining strong alignment with long-term value creation. CEO Compensation. Mr. Sweeney’s base salary remained unchanged from 2024 at $800,000. Mr. Sweeney’s target annual incentive as a percentage of base salary remained 200% and his target long-term incentive opportunities as a percentage of base salary remained 465%. As a result, Mr. Sweeney’s target total compensation again remained equal to $6,120,000. 2024 Say on Pay Vote. The Company values shareholder perspectives on our executive compensation program. As part of the Compensation Committee’s annual review of the program, it considers the outcome of the Company’s annual shareholder advisory vote (“say-on-pay”) on the compensation of the Company’s NEOs. Approximately 90% of the advisory votes cast in 2024 were in favor of our executive compensation program. The Compensation Committee believes that this vote is indicative of our shareholders’ support of our executive compensation program. The Compensation Committee will continue to consider shareholder feedback and the outcome of the Company’s say-on-pay votes when making future NEO compensation decisions. Our Compensation Committee oversees and administers the Company’s executive compensation program. Our executive compensation program is designed to support our performance-based culture and the creation of value for our shareholders. The Compensation Committee is guided by the following key principles when making compensation-related decisions:

  3. Key 2024 Executive Compensation Actions

    |  | Encourage the achievement of annual and long-term business and human resource objectives that support the creation of shareholder value; | |  | Attract, retain, and motivate top caliber talent; | |  | Enhance retention; and | |  | Encourage executives to achieve superior performance without excessive risk taking. |

  4. Key 2024 Executive Compensation Actions

    | Pay Element | Form | Philosophy | Performance Alignment | | Base Salary | Cash |  Fixed pay to recognize an individual’s role and responsibilities |  Reviewed annually and set based on competitiveness versus the external market, individual performance, and internal equity | | Annual Incentive | Cash |  Achieve annual goals measured in terms of financial, strategic, and individual performance linked to the creation of shareholder value |  Rewards and recognizes annual accomplishment of key financial objectives  Payout based primarily on Corporate performance (as measured against objective Operational, Leasing, and Capital goals)  Regional, divisional and individual performance also taken into account to ensure strong line of sight between executive pay and performance | | Long-Term Incentives | PSUs (Half of Target Award in 2024) |  Align NEOs’ interests with shareholders |  Shareholder value creation | | | RSUs with Outperformance Feature (Half of Target Award in 2024) |  Retain executive talent  Align NEOs’ interests with shareholders |  Rewards increase in share price  Encourages the achievement of ambitious multi-year strategic business objectives |

  5. Key 2024 Executive Compensation Actions

    | What We Do | What We Don’t Do | | ➢ Pay for Performance: Majority of pay is performance based and not guaranteed ➢ Multiple Performance Metrics and Time Horizon: Use multiple performance metrics focusing on top line and bottom line growth and multi-year vesting and measurement periods for long term incentives ➢ Annual Compensation Risk Review: Annually assess risk in compensation programs ➢ Share Ownership Guidelines: NEOs must comply with share ownership requirements ➢ Clawback Policy: We maintain a clawback policy that provides for recovery of certain incentive compensation in the event of an accounting restatement due to material non-compliance with any financial reporting requirement under the federal securities laws and without regard to misconduct ➢ Challenging Performance Objectives: Set challenging performance objectives for Annual Incentives and PSUS, and stretch goals for the outperformance feature of RSUs ➢ Use of Independent Consultant: The Compensation Committee has retained an independent compensation consultant that performs no other consulting services for the Company and has no conflicts of interest | ➢ No Excise Tax Gross Ups: We will not enter into any new agreements, or materially amend any existing employment agreements with our executives that provide excise tax gross-ups in the event of a change in control of the Company ➢ No Repricing or Buyouts of Stock Options: Our equity plan prohibits repricing or buyouts of underwater stock options ➢ No Perquisites: We do not provide perquisites to our NEOs ➢ No Hedging or Pledging: NEOs are prohibited from hedging their ownership or pledging Company shares as collateral |

  6. Key 2024 Executive Compensation Actions

    Compensation Consultants Our Compensation Committee recognizes the importance of objective, independent expertise and advice in carrying out its responsibilities. The Compensation Committee continues to retain Pay Governance LLC as its consultant. Our Compensation Committee selected Pay Governance as its consultant because of its expertise and reputation. Neither we nor our Trustees or executive officers have any affiliation with Pay Governance or its executives and the engagement and direction of Pay Governance have been solely through our Compensation Committee. During 2024, Pay Governance advised our Compensation Committee on executive compensation matters, plan design, industry trends and practices, and our pay-for-performance alignment, including realizable pay as measured relative to peers and relative to our total shareholder returns. As directed by the Committee, the consultants prepared analyses for the Committee relating to all aspects of the compensation of our executives. They advised the Committee on market practices regarding executive compensation, including annual incentive awards and long-term incentive pay, and reviewed our peer group and the market positioning of the compensation provided to our current NEOs and other senior executives. The consultants meet privately with the Committee and individual Committee members from time to time to plan for Committee meetings and discuss executive compensation matters. Pay Governance does not provide other services to us. Our Compensation Committee received a letter from Pay Governance regarding its independence and assessed the independence of Pay Governance under New York Stock Exchange rules and concluded that Pay Governance’s work for the Committee does not raise any conflict of interest. Factors considered by the Committee include: (i) whether other services are provided to us by Pay Governance or its representatives; (ii) the amount of fees received by Pay Governance from us as a percentage of Pay Governance’s total revenue; (iii) policies of Pay Governance designed to prevent conflicts of interest; (iv) the absence of any business or personal relationship of representatives of Pay Governance or its representatives with a member of the Committee; (v) whether Pay Governance or its advisors to the Committee own any of our securities; and (vi) whether Pay Governance or its representatives have any business or personal relationship with any of our executive officers. Role of Executives Our Compensation Committee seeks the views of our President and Chief Executive Officer in setting and administering our executive compensation programs. In particular, at the beginning of each year, Mr. Sweeney oversees the development of proposed corporate goals for purposes of annual incentive compensation. These goals are derived from our corporate business plan and are selected to reinforce and enhance achievement of our operating and growth objectives. The Compensation Committee reviews these goals with Mr. Sweeney, adopts revisions it deems appropriate and determines the final goals for compensation. Following the end of each year, Mr. Sweeney reviews with the Compensation Committee, at several meetings, the achievement of corporate performance goals and the performance of each other current named executive officer and presents his evaluation of such executive officer’s performance to the Committee. Decisions about individual compensation elements and total compensation are made by the Committee, using its judgment, focusing primarily on each current named executive officer’s performance as well as our overall performance. With respect to the non-quantitative performance measures applicable to our executives, the Committee relies heavily on the views of Mr. Sweeney (other than as to himself). As President and Chief Executive Officer, Mr. Sweeney oversees the day-to-day performance of the other current named executive officers. As such, our Compensation Committee believes that he is well positioned to evaluate their performance and make recommendations as to their overall compensation. In addition to the role played by our President and Chief Executive Officer, our other executive officers furnish such industry data and legal and financial analyses as the Committee requests from time to time. IV. 2024 Executive Compensation Use of Peer Group Data Our Compensation Committee, in consultation with its compensation consultant, developed a peer group as a frame of reference for our executive compensation. Our Compensation Committee selects companies for inclusion in the peer group that primarily acquire, sell, develop, lease and manage sizeable office real estate portfolios. In selecting companies, the Committee also seeks to include companies with comparable equity and total capitalization, having a capitalization between one-third and two-times our capitalization, and considers geographic location as well as third party considerations (for example, where members of the financial community treat a particular company as being a Company peer). Our Compensation Committee has not selected or excluded companies from the peer group on account of their compensation practices. Our Compensation Committee believes that peer group data are an indicator of compensation opportunities at companies that might recruit our executives and the data therefore help the Committee set compensation at competitive levels. Our Compensation Committee also believes that peer group data provide perspective on performance measurement practices and linkages between pay and performance. The Committee does not set specific pay targets or otherwise engage in formal “benchmarking” of compensation of our executives against executives at peer group companies. The Committee does, however, attempt to set total compensation for each current named executive near the middle of the peer group data while allowing for the possibility of greater or lesser compensation based upon our corporate and individual performance. Our Compensation Committee reviews our peer group at least annually. For 2024, the Compensation Committee made no changes to the peer group used for competitive pay studies, which included:

  7. Key 2024 Executive Compensation Actions

    Base Salary Base salary represents the fixed portion of an executive’s compensation and provides a regular stream of income and financial security. In setting base salaries, our Compensation Committee considers the responsibilities, skills, experience and performance of the executives and relies heavily on the views of our President and Chief Executive Officer as to the impact, contribution and expertise of our executives (except in the case of himself and his compensation). In setting base salaries, our Compensation Committee also considers the linkage of base salaries to the elements of our compensation that are tied to base salaries (such as severance and change in control benefits and annual and long-term incentive targets that are computed as a multiple of base salary). As part of the annual compensation process, the Committee may adjust base salaries to reflect changes in market data or in an executive’s responsibilities, skills, experience and performance. For 2024, the base salary of one of our current NEOs was adjusted, and the base salaries of the remaining current NEOs were unchanged as reflected in the table below:

  8. Key 2024 Executive Compensation Actions

    Annual Incentive Awards Annual incentive awards are designed to reward executives for achievement of annual performance goals linked to the achievement of our annual company goals. Each year our Compensation Committee establishes a target amount for annual incentive awards for each executive, with the target amount expressed as a percentage of the executive’s base salary. The targeted amounts take into account all factors that the Committee deems relevant, including the input of Pay Governance as to competitive compensation levels, the recommendation of our President and Chief Executive Officer (except with respect to his own target), responsibilities of the executives and the Committee’s view of market conditions. 2024 target percentages for annual incentive awards for NEOs were as follows (which were unchanged from 2023 target percentages):

  9. Key 2024 Executive Compensation Actions

    2024 Annual Incentive Performance Goals and Outcomes Payouts under the 2024 annual incentive are determined primarily with reference to our achievement of corporate performance goals related to operations, leasing and capital management, which we believe are key drivers of value for our shareholders. We refer to this array of performance goals as our “corporate scorecard.” The scorecard is established by the Compensation Committee annually, in the first quarter of year. Performance goals are established based on the prevailing operating environment, our associated business plan, and external guidance provided to investors. Specifically, 2024 annual incentive performance goals reflected the unprecedented challenges in the Office REIT sector, both with respect to reduced tenant demand and increased cost of capital, and the broader macroeconomic environment that deeply impacted the real estate market. As such, for some metrics performance goals may be below prior year targets in recognition of the challenging office-market environment, increased interest rates, and projected transactional activity. In each case, however, 2024 performance goals were still ambitious in light of the then prevailing operating environment and were reflective of Company external guidance . The 2024 scorecard is shown below, including actual performance outcomes.

  10. Key 2024 Executive Compensation Actions

    | Payout Range | 85% | 100% | 175% | | | | | | Performance Measure | Minimum | Target | Maximum | Actual Performance | % of Target Achieved | % Weighting (of 100%) | Weighted Achievement | | OPERATIONS (20% WEIGHTING) | | | | | | | | | FFO (1) | $0.80 | $0.90 | $1.00 | $0.84 | 91% | 10.00% | 9.10% | | Cash Available for Distribution, as adjusted (CAD) (2) | $0.55 | $0.63 | $0.75 | $0.58 | 91% | 10.00% | 9.10% | | | | | | | | 20.00% | 18.20% | | LEASING (30% WEIGHTING) | | | | | | | | | Spec Revenue Achievement ($MM) | $23.5M | $24.0M | $25.0M | $26.4M | 175% | 10.00% | 17.50% | | Year-End Leased | 87.00% | 88.00% | 89.00% | 89.30% | 175% | 10.00% | 17.50% | | Revenue Maintaining Capital (% lease revenue) (3) | 14.00% | 12.00% | 10.00% | 12.10% | 99% | 10.00% | 9.90% | | | | | | | | 30.00% | 63.10% | | CAPITAL (50% WEIGHTING) (4) | | | | | | | | | Aggregate Investment/Financing Activity ($MM) | $350M | $400M | $450M | $711.2M | 175% | 12.50% | 21.88% | | Volume of Assets Sold (5) | $50M | $80M | $110M | $298.2M | 175% | 12.50% | 21.88% | | Net Debt / EBITDA (Core Portfolio)* (6) | 7.3x | 6.8x | 6.2x | 7.2x | 88% | 12.50% | 11.00% | | Interest Coverage Ratio* | 2.0x | 2.1x | 2.2x | 2.1x | 100% | 12.50% | 12.50% | | | | | | | | 50.00% | 67.26% | | * Represents annualized fourth quarter metric. | | | | | Formulaic Outcome: | | 130.00% |

  11. Key 2024 Executive Compensation Actions

    (1) Pursuant to the revised definition of FFO adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”), we calculate FFO by adjusting net income/(loss) attributable to common unit holders (computed in accordance with GAAP) for gains (or losses) from sales of properties, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures driven by a measurable decrease in the fair value of depreciable real estate held by the unconsolidated real estate ventures, real estate related depreciation and amortization, and after similar adjustments for unconsolidated real estate ventures. Our calculation of FFO includes gains from sale of undepreciated real estate and other assets, considered incidental to our main business, to third parties or unconsolidated real estate ventures. FFO is a non-GAAP financial measure. We believe that the use of FFO combined with the required GAAP presentations has been beneficial in improving the understanding of operating results of REITs among the investing public and making comparisons of REITs’ operating results more meaningful. We consider FFO to be a useful measure for reviewing comparative operating and financial performance because, by excluding property impairments, gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, FFO can help the investing public compare the operating performance of a company’s real estate between periods or as compared to other companies. Our computation of FFO may not be comparable to FFO reported by other REITs or real estate companies that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently. We consider net income, as defined by GAAP, to be the most comparable earnings measure to FFO. While FFO and FFO per unit are relevant and widely used measures of operating performance of REITs, FFO does not represent cash flow from operations or net income as defined by GAAP and should not be considered as alternatives to those measures in evaluating our liquidity or operating performance. We believe that to further understand our performance, FFO should be compared with our reported net income/(loss) attributable to common unit holders and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. (2) Cash available for distribution, or CAD, is a non-GAAP financial measure that is not intended as an alternative to cash flow from operating activities as determined under GAAP. CAD is presented in our investor presentations solely as a supplemental disclosure with respect to liquidity because we believe it provides useful information regarding our ability to fund our distributions. Because other companies do not necessarily calculate CAD the same way as we do, our presentation of CAD may not be comparable to similarly titled measures provided by other companies. For purposes of the scorecard, our Compensation Committee adjusts CAD to reflect intra-year capital markets and other transaction activity not taken into account in the initial scorecard metric. (3) Revenue maintaining capital expenditures are a component of our CAD calculation and represent the portion of capital expenditures required to maintain our current level of cash available for distribution. Revenue maintaining capital expenditures include current tenant improvement and allowance expenditures for all tenant spaces that have been owned for at least one year, and that were not vacant during the twelve-month period prior to the date that the tenant improvement or allowance expenditure was incurred. Revenue maintaining capital expenditures also include other expenditures intended to maintain our current revenue base. Accordingly, we exclude capital expenditures related to development and redevelopment projects, as well as certain projects at our core properties that are intended to attract prospective tenants in order to increase revenues and/or occupancy rates. (4) While the table above affords equal weighting to the four performance measures in the capital category, these weightings are not fixed. The Compensation Committee reserves discretion to vary the weight afforded to each of these measures, to appropriately emphasize the factors most important to the Company’s effective deployment of capital under prevailing conditions, as determined by the Compensation Committee from time to time. (5) The Committee removed “Development/Redevelopment Starts” from the scorecard and replaced it with this goal in 2023, to emphasize the importance of liquidity and the strengthening of the Company’s balance sheet. (6) Ratio of Net Debt to EBITDA excludes capital market transaction items. The foregoing include various non-GAAP measures. Please see Appendix A for reconciliation of those measures to our published financial statements. Our annual incentive program reserves to the Compensation Committee the right to adjust the overall corporate scorecard outcome upward or downward by 25% to reflect the Compensation Committee’s subject evaluation of our performance in matters such as strategic accomplishments or our performance relative to peer companies. The annual incentive program also reserves to the Compensation Committee the right to adjust any individual NEO’s annual incentive payout, based on the Compensation Committee’s subjective evaluation of that executive’s individual performance and/or the performance of any business unit, function or region managed by that executive. Mr. Sweeney’s performance is evaluated solely by the Compensation Committee. The Committee also evaluates the individual performance of other NEOs after receiving recommendations from Mr. Sweeney. The Compensation Committee views its discretionary authority as a tool to ensure individual accountability and maintain alignment between the interests of management and shareholders. 2024 Annual Incentive Payouts After reviewing the results of the corporate scorecard, the Compensation Committee noted the 130% formulaic outcome. However, our CEO consulted with the Compensation Committee on this point and, given the macro conditions that continue to impact the broader office sector, recommended that the corporate scorecard outcome be limited to the target amount. After its consultation with our CEO, the Compensation Committee approved a default scorecard outcome of 100%. Then, after considering our CEO’s individual performance evaluations, the Compensation Committee approved 2024 annual incentive payouts to each NEO in the amounts shown in the table below. The approved amounts were paid in cash to each NEO in the first quarter of 2025.

  12. Key 2024 Executive Compensation Actions

    | | 2024 ANNUAL INCENTIVE FINAL PAYOUT | | | | | Name | Target Amount ($) | Formulaic Outcome ($) | Actual Payout Approved ($) | Actual Payout Approved (% of Target) | | Gerard H. Sweeney | $800,000 | $2,080,000 | $1,600,000 | 100% | | Thomas E. Wirth | $469,000 | $609,700 | $469,000 | 100% | | H. Jeffrey DeVuono | $428,450 | $556,985 | $407,000 | 95% | | George D. Johnstone | $400,000 | $520,000 | $400,000 | 100% | | William D. Redd | $400,000 | $520,000 | $360,000 | 90% |

  13. Key 2024 Executive Compensation Actions

    Equity-Based Long-Term Incentive Compensation Consistent with our compensation objectives, our equity-based long-term incentive program is designed to assist us in attracting and retaining high quality executives, while tying a significant portion of compensation to our performance. For the awards made in March 2024, the Compensation Committee, after consultation with Pay Governance, determined target long-term incentive award values for each executive officer as set forth below. These percentages were unchanged from 2023.

  14. Key 2024 Executive Compensation Actions

    | Name | 2024 TARGET LTI AWARD AS A % OF BASE SALARY | | Gerard H. Sweeney | 465% | | Thomas E. Wirth | 265% | | H. Jeffrey DeVuono | 230% | | George D. Johnstone | 230% | | William D. Redd | 230% |

  15. Key 2024 Executive Compensation Actions

    | ➢ | Equity-based long-term incentive awards are delivered as a mix of one-half PSUs and one-half RSUs. The target number of PSUs and the number of RSUs for each executive are each determined by dividing the allocable portion of his target LTI value by the trailing average closing price of our common shares for the ten trading days immediately preceding the grant date. Prior to 2024, two-thirds of an NEO's long-term incentive opportunity was delivered via PSUs and one-third was delivered via PSUs. The adoption of a fifty-fifty split is intended to enhance the retention features of the award while maintaining strong alignment with long-term value creation. | | ➢ | PSUs which may be earned based 75% on our leasing activity during each of 2024, 2025 and 2026, and 25% on our same-store net operating income growth during each of 2024, 2025 and 2026, with final payout subject to an additional 20% increase or decrease based on our TSR relative to the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index for the period beginning on the grant date (February 26, 2024) and ending December 31, 2026. The modifications to the PSU program in 2024 is responsive to the current macroeconomic headwinds impacting the office-REIT sector and the challenges presented thereby in setting long-term targets, and accordingly, will be revisited by the Compensation Committee annually. the In revising the PSU program in 2024, the Compensation Committee is strengthening its emphasis on the achievement of key operating metrics. By retaining relative TSR as a "modifier," the Compensation Committee is continuing its emphasis on the importance of delivering competitive long-term returns to investors. The metrics selected emphasize key operating metrics within our business plan. Leasing Activity is foundational to our success and same-store net operating income growth ensures focus on earnings growth. | | ➢ | RSUs generally vest in equal proportions over three years subject to continued employment with the Company. Dividend equivalents are paid on the RSUs over the vesting period. |

  16. Key 2024 Executive Compensation Actions

    | ➢ | The RSUs also include an outperformance modifier that can increase the original award by up to 275% based on Brandywine’s achievement of superior results for two performance measures during the three-year period ending December 31, 2026. The increase from 225% to 275% in the maximum payout of the outperformance feature aims to drive long-term outperformance with respect to operating metrics that management can influence and enhances the retention aspects of the long-term incentive program. The outperformance operating metrics emphasize the importance of balance sheet management in the current market environment, coupled with a continued focus on generating long-term earnings and cash flow growth as a drive of long-term value. | | ➢ | Awards are subject to accelerated vesting or settlement upon death, disability, involuntary termination or qualifying retirement, as further described below under “Vesting and Forfeiture Provisions”. |

  17. Key 2024 Executive Compensation Actions

    2024 RSU Outperformance Modifier The RSU awards include an outperformance modifier that can increase the original award up to 275% based on Brandywine’s achievement of superior results for average funds from operations (FFO) growth and total capital market activity during the three-year period ending December 31, 2026, with FFO growth weighted 25% and total capital market activity weighted 75%. These goals are intentionally ambitious and their achievement was not considered probable on the date of grant. Half of any additional shares earned under this outperformance feature will vest based on continued service through each of January 1, 2027 and January 1, 2028, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement. In the case of death, disability or qualifying retirement prior to December 31, 2026, the opportunity to earn additional shares under the outperformance feature will remain in effect, but the number of additional shares earned at the conclusion of the performance period (if any) will be pro-rated to reflect the fraction of the performance period actually worked. Dividend equivalents on any additional shares earned under the outperformance feature will be credited in cash, but only with respect to dividends paid following the end of the applicable performance period and will be subject to the same vesting and payment terms as the shares to which they relate. 2024-2026 Performance Share Unit Award Terms Our PSUs may be earned based 75% on our leasing activity during each of 2024, 2025 and 2026, and 25% on our same-store net operating income growth during each of 2024, 2025 and 2026, with final payout subject to an additional 20% increase or decrease based on our three-year total shareholder return (TSR) versus the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index. The performance scale for leasing activity, on which 75% of the PSUs may be earned, and for same-store net operating income (SSNOI) growth, on which 25% of the PSUs may be earned, are set forth below:

  18. Key 2024 Executive Compensation Actions

    | Performance Level | 2024 Leasing Activity (1) | 2024 PSU Payout % (to be averaged with 2025 & 2026 results) | | Below Threshold | Below 900,000 square feet | 0% | | Threshold | 900,000 square feet | 37.50% | | Target | 1,000,000 square feet | 75% | | Maximum | More than 1,100,000 square feet | 150% |

  19. Key 2024 Executive Compensation Actions

    | Performance Level | 2024 SSNOI Growth (2) | 2024 PSU Payout % (to be averaged with 2025 & 2026 results) | | Below Threshold | Less than -2.0% | 0% | | Threshold | -2.0% | 12.5% | | Target | 0.0% | 25% | | Maximum | 2.0% | 50% |

  20. Key 2024 Executive Compensation Actions

    In the case of disability or qualifying retirement prior to December 31, 2026, the PSUs will remain in effect, but the number of PSUs earned at the conclusion of the performance period (if any) will be pro-rated to reflect the fraction of the performance period actually worked. In the case of death prior to December 31, 2026, the PSUs will immediately vest based on actual operating performance for any calendar year completed during the three-year performance period, and based on target performance period for the remaining years of the three-year performance period. The target number of units subject to each PSU will be increased to reflect the value of dividends paid on our common shares during the three-year performance period (with the number of additional units determined in each case by dividing the dividend amount by the fair market value of our common shares on the dividend payment date). Any additional target units credited will be subject to the same terms and conditions, including the same performance conditions, as the original PSUs. The above-described PSU design was adopted in 2024 and reflects a shift from a three-year performance period to three one-year performance periods. This shift was motivated by the difficulty of establishing three-year performance goals given current macroeconomic conditions in our industry and is intended to allow the Compensation Committee to respond more rapidly to changes in those conditions during the life of each award. The resulting design is intended to encourage achievement of key operating metrics that management can influence and that support long-term value creation. By retaining relative TSR as a “modifier,” the Compensation Committee continued its emphasis on the importance of delivering competitive long-term returns to investors. 2022-2024 Performance Share Unit Award Outcomes For the 2022-2024 period, our -41.4% TSR ranked at the 37th percentile of the FTSE NAREIT Equity Office Index (excluding us), resulting in a payout of 2022-2024 PSUs at 74% of target, based on the following performance scale:

  21. Key 2024 Executive Compensation Actions

    | Name | PSUs Earned (#) | | Gerard H. Sweeney | 133,574 | | Thomas E. Wirth | 43,504 | | H. Jeffrey DeVuono | 34,974 | | George D. Johnstone | 31,590 | | William D. Redd | 32,651 |

  22. Key 2024 Executive Compensation Actions

    Investment activity, including capital markets activity, financing and dispositions, are central to achievement of a sound balance sheet and strong liquidity, each of which are of utmost importance in the context of the unstable environment forecasted for the office market. Our investment activity from 2022 through 2024, which included over $530 million of dispositions, enhanced our liquidity position and helped bolster our balance sheet. Vesting and Forfeiture Provisions Equity awards that remain unvested upon the holder’s termination of employment with us will vest or be forfeited depending on the reason for the termination. The table below summarizes these provisions:

  23. Key 2024 Executive Compensation Actions

    | Reason for Termination | Effect on Awards | | Voluntary Termination by Executive not eligible for Qualifying Retirement (1) | ● Forfeit | | Change in Control | ● Early measurement for outperformance component of restricted common share awards (“outperformance shares”), with earned outperformance shares remaining subject to time vesting requirements ● Early measurement and payout for PSUs, with measurement determined exclusively based on relative TSR ● RSUs (including any earned but unvested outperformance shares) vest and shares are delivered if an involuntary termination occurs within one year | | Death or Disability | ● Performance period for outperformance shares remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served) ● Early measurement and payout for pre-2024 PSUs. For 2024 and later PSUs: ♦ in the event of Disability, the performance period remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served) ♦ in the event of death, immediate vesting based on (i) actual operating performance for any calendar year completed during the three-year performance period, and (ii) target performance for the remaining years of the three-year performance period ● RSUs vest and shares are delivered (including any previously earned but unvested outperformance shares) | | Qualifying Retirement (1) | ● Performance period for outperformance shares remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served) ● Early measurement and pro-rata payout for pre-2024 PSUs. For 2024 and later PSUs, the performance period remains open, with payout at the end of performance period (pro-rated based on the portion of the period actually served) ● Shares underlying RSUs are delivered (including any previously earned but undelivered outperformance shares) |

  24. Key 2024 Executive Compensation Actions

    Qualifying Retirement means an executive’s voluntary termination of employment after reaching age 57 and accumulating at least 15 years of service with us. All of our current named executive officers have met the conditions to elect a qualifying retirement as of the date of this proxy statement. Deferred Compensation Plan We maintain a deferred compensation plan that enables our executives to defer a portion of their base salaries, annual incentive awards and equity awards. The amounts deferred are not included in the executive’s current taxable income and, therefore, are not currently deductible by us. The executives select from a limited number of mutual funds and investment alternatives which serve as measurement funds, and the deferred amounts are increased or decreased to correspond to the market return of the selected investments. We generally do not provide any matching contribution to any executive officer who participates in this plan, other than a limited amount to make up for any loss of matching contributions under our Section 401(k) plan due to Internal Revenue Code limits. However, an executive who defers more than 25% of his or her annual incentive award into the Company Share Fund under the deferred compensation plan will receive a 15% matching contribution on the excess amount, which matching contribution will itself be invested in the Company Share Fund. We maintain this plan to help ensure that our benefits are competitive. See “Compensation Tables and Related Information – Nonqualified Deferred Compensation.” Other Benefits Our executives participate in company-sponsored benefit programs available generally to all our salaried employees, including our shareholder-approved non-qualified employee share purchase plan and our Section 401(k) plan. For 2024, our 401(k) plan provided a company matching contribution of 50% of the first 6% of eligible compensation contributed to the plan, up to a maximum company matching contribution of $10,350. Other benefits, such as health and dental plans, group term life insurance and short- and long-term disability insurance, are also available generally to all our salaried employees. Perquisites We do not provide perquisites to our executive officers. Post-Termination Benefits; Qualifying Retirement We provide post-employment benefits to our executive officers that vary based on the executive and the circumstances of the executive’s termination. See “Employment and Other Agreements” and “Potential Payments upon Termination of Employment or Change-in-Control.” We have “change of control” severance agreements with our executive officers which condition (other than with respect to our President and Chief Executive Officer) the executive’s entitlement to severance following a change of control upon a so-called “double trigger.” Under a double-trigger, the executive is entitled to severance only if, within a specified period following the change of control, the terms of his or her employment are adversely changed or he or she is terminated without cause, except for our President and Chief Executive Officer, who would be entitled to severance if he were to resign within six months following the change of control or his employment were terminated without cause. Our Compensation Committee believes that the severance protection that we provide is important in enabling us to attract and retain high quality executives and that it is in our best interest to have agreements with our senior executives that maintain their focus on, and commitment to, us notwithstanding a potential merger or other change of control transaction. V. Key 2025 Executive Compensation Actions

  25. Key 2024 Executive Compensation Actions

    | ➢ | All of our named executive officers' 2025 base salaries, and target bonus opportunities as a percentage of the base salaries, are unchanged from 2024. | | ➢ | 2025 long-term incentive awards to named executive officers continue to be in the form of PSUs and RSUs. | | ➢ | The design for 2025 PSU awards is unchanged from the 2024 PSU design, and is based 75% on our leasing activity during each of 2025, 2026 and 2027, and 25% on our same-store net operating income growth during each of 2025, 2026 and 2027, with final payout subject to an additional 20% increase or decrease based on our TSR relative to the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index for the period beginning on the grant date and ending December 31, 2027. | | ➢ | The operational goals for the second tranche of the 2024 PSUs, and the first tranche of the 2025 PSUs are as shown below. The 2025 leasing activity target is 30% higher than the 2024 target and 18% higher than the 2024 actual level. |

  26. Key 2024 Executive Compensation Actions

    | Performance Level | 2025 Leasing Activity (1) | PSU Payout % (to be averaged with other tranches) | | Below Threshold | Below 1,200,000 square feet | 0% | | Threshold | 1,200,000 square feet | 37.5% | | Target | 1,300,000 square feet | 75% | | Maximum | More than 1,400,000 square feet | 150% |

  27. Key 2024 Executive Compensation Actions

    | Performance Level | 2025 SSNOI Growth (2) | PSU Payout % (to be averaged with other tranches) | | Below Threshold | Less than -2.0% | 0% | | Threshold | -2.0% | 12.5% | | Target | 0.0% | 25% | | Maximum | 2.0% | 50% |

  28. Key 2024 Executive Compensation Actions

    | ➢ | The design for 2025 RSU awards is unchanged from the 2024 RSU design, and again includes an outperformance modifier that can increase the number of shares payable under the award based on Brandywine’s achievement of superior performance results during the three-year period ending December 31, 2027. For 2025 awards, the outperformance modifiers are again 275% for Mr. Sweeney, 250% for Mr. Wirth, and 225% for other named executive officers. As we continue to emphasize the importance of balance sheet management in the current environment, the outperformance measure for the 2025 awards has been updated to include rating agency upgrades, the ratio of net debt to EBITDA, cumulative FFO and total capital market activity, each with a 25% weighing. The outperformance goals are intentionally ambitious and their achievement was not considered probable on the date of grant. |

  29. Key 2024 Executive Compensation Actions

    Each of our executive officers is in compliance with the share ownership requirements. If an executive officer were not to meet the requirements, the executive officer would be restricted from selling any common shares that have been or are thereafter awarded to him or her under any of our equity compensation programs until such executive officer meets the requirements, except as required by law or upon the approval of the Board or the Compensation Committee or (except as to himself) the President and Chief Executive Officer. Hedging Prohibition Our executives and Trustees are prohibited from hedging their ownership or offsetting any decline in the market value of our shares, including by trading in publicly-traded options, puts, calls or other derivative instruments related to our shares. Pledges and Transactions in Shares Our executives and Trustees are prohibited from pledging our shares as collateral for loans. Compensation and Risks Our Compensation Committee believes that the risks material to our business are those that derive from broad-based economic trends and specific trends related to the types of real estate we own and operate in our relevant markets. We do not believe that these risks are materially affected by, or materially arise from, our compensation policies and practices. We believe that our compensation policies and practices support achievement of competitive performance without unnecessary and excessive risk taking. Our annual incentive awards and equity-based long-term incentive awards are based on a variety of indicators of performance, thus diversifying the risk associated with any single indicator of performance. In addition, our share ownership requirements encourage our executives to focus on sustained share price appreciation rather than short-term results. Furthermore, compliance and ethical behavior are integral factors considered in all performance assessments. Accounting Considerations Prior to implementation of a compensation program and awards under the program, we evaluate the cost of the program and awards in light of our current budget and anticipated budget. We also review the design of compensation programs to assure that the recognition of expense for financial reporting purposes is consistent with our financial modeling. Tax Considerations Prior to implementation of a compensation program and awards under the program, we evaluate the federal income tax consequences, both to us and to our executives, of the program and awards. Before approving a program, our Compensation Committee receives an explanation from our outside professionals as to the expected tax treatment of the program and awards under the program. Consideration of Prior Year Compensation The primary focus of our Compensation Committee in setting executive compensation is the executive’s current level of compensation, including recent awards of long-term incentives, in the context of current levels of compensation for similarly situated executives at peer companies, taking into account the executive’s performance and our corporate performance. The Committee has not adopted a formulaic approach for considering amounts realized by an executive from prior equity-based awards. Compensation Committee Report The Committee has reviewed and discussed the Compensation Discussion and Analysis with our management, which has the responsibility for preparing the Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in our proxy statement for our 2025 annual meeting of shareholders. Submitted by:

  30. Pay Versus Performance

    Pay Versus Performance The following table provides specified executive compensation and financial performance measures for our four most recently completed fiscal years.

  31. Pay Versus Performance

    | | Summary Compensation | Compensation | Average Summary Compensation | Average Compensation Actually Paid | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) | CSM: Funds From Operations (FFO)4: | | Year | Table Total to PEO | Actually Paid (“CAP”) to PEO1 | Table Total for Non-PEO NEOs2 | to Non-PEO NEOs1, 2 | Company TSR | Peer Group TSR3 | (in thousands) | Company TSR | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | $4,929,748 | $8,367,720 | $1,530,008 | $2,467,939 | $56.87 | $76.95 | ($196,487) | $0.85 | | 2023 | $6,012,885 | $5,748,961 | $1,824,609 | $1,712,103 | $48.55 | $63.34 | ($197,403) | $1.15 | | 2022 | $6,355,107 | $817,805 | $1,897,202 | $288,428 | $47.73 | $62.07 | $53,992 | $1.38 | | 2021 | $6,089,044 | $7,917,000 | $1,797,719 | $2,302,582 | $96.72 | $99.51 | $12,366 | $1.37 |

  32. Pay Versus Performance

    Notes: 1. To calculate CAP to our Principal Executive Officer (“PEO”), Gerard H. Sweeney, the following amounts were deducted from and added to Summary Compensation Table (“SCT”) total compensation. PEO SCT Total to CAP Reconciliation:

  33. Pay Versus Performance

    | Year | SCT Total | Deductions from SCT Total (i) | Additions to SCT Total (ii) | CAP | | 2024 | $4,929,748 | -$2,615,235 | +$6,053,207 | $8,367,720 |

  34. Pay Versus Performance

    (i) Represents the grant date fair value of equity-based awards granted, as shown in the Share Awards column of the Summary Compensation Table. (ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The equity component of CAP for fiscal year 2024 is further detailed in the supplemental table below. PEO Equity Component of CAP:

  35. Pay Versus Performance

    | Year | Fair Value of Equity Awards Granted in the Year and Outstanding and Unvested as of Year End | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Outstanding and Unvested as of Year End | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Year | Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | $2,905,403 | $957,289 | $1,850,950 | -$105,062 | $0 | $339,565 | $5,948,145 |

  36. Pay Versus Performance

    2. The non-PEO named executive officers (“Non-PEO NEOs”) reflected in columns (d) and (e) consist of the following individuals for each of the years shown: Thomas E. Wirth, H. Jeffrey DeVuono, George D. Johnstone and William D. Redd. To calculate CAP to our Non-PEO NEOs, the following amounts were deducted from and added to SCT total compensation. Average Non-PEO NEOs SCT Total to CAP Reconciliation:

  37. Pay Versus Performance

    | Year | SCT Total | Deductions from SCT Total | Additions to SCT Total | CAP | | | | (i) | (ii) | | | 2024 | $1,530,008 | -$713,004 | +$1,650,936 | $2,467,939 |

  38. Pay Versus Performance

    (i) Represents the grant date fair value of equity-based awards granted each year, as shown in the Share Awards column of the Summary Compensation Table. (ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP for each year shown. The equity component of CAP for fiscal year 2024 is further detailed in the supplemental table below. Average Non-PEO NEOs Equity Component of CAP:

  39. Pay Versus Performance

    | Year | Fair Value of Equity Awards Granted in the Year and Outstanding and Unvested as of Year End | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years and Outstanding and Unvested as of Year End | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that were Forfeited in the Year | Value of Dividends or other Earnings Paid on Equity Awards not Otherwise Reflected in Fair Value or Total Compensation | Total Equity Award Adjustments | | 2024 | $794,355 | $257,788 | $506,061 | -$26,709 | $0 | $92,732 | $1,624,227 |

  40. Pay Versus Performance

    3. The Peer Group TSR set forth in this table utilizes the FTSE NAREIT Equity Office Index, which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K included in our Annual Report for the year ended December 31, 2024. We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT). See footnote 1 to the table in the portion of the CD&A entitled “2024 Annual Incentive Performance Goals and Outcomes” for an explanation of how we calculate FFO.