DEF 14A of Farmland Partners Inc., Mar 15, 2024

DEF 14A of Farmland Partners Inc.

Filed Mar 15, 2024 · FY20230001104659-24-034728

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS The Board is currently comprised of eight directors, all of whom have terms expiring at the Annual Meeting. As previously disclosed, on February 27, the Board approved a reduction in the size of the Board from eight members to five members, to be effective immediately following the Annual Meeting. In connection with the Board’s action to reduce the size of the Board, the Board approved the slate of directors to be nominated for re-election at the Annual Meeting, which is set forth below. The nominees, all of whom are currently serving as directors of the Company, have been recommended by the Board for re-election to serve as directors for one-year terms until the 2025 Annual Meeting and until their successors are duly elected and qualify. Based on its review of the relationships between the director nominees and the Company, the Board has affirmatively determined that the following director nominees are “independent” directors under the listing rules of the NYSE and under applicable rules of the Securities and Exchange Commission (the “SEC”): John A. Good, Jennifer S. Grafton and Danny D. Moore. The Board knows of no reason why any nominee would be unable to serve as a director. If any nominee is unavailable for election or service, the Board may designate a substitute nominee and the persons designated as proxy holders on the proxy card will vote for the substitute nominee recommended by the Board. Under these circumstances, the Board may also, as permitted by our bylaws, decrease the size of the Board.

  2. Nominees for Election for a One-Year Term Expiring at the 2025 Annual Meeting

    Nominees for Election for a One-Year Term Expiring at the 2025 Annual Meeting The following table sets forth the name and age of each nominee for director, indicating all positions and offices with us currently held by the director.

  3. Nominees for Election for a One-Year Term Expiring at the 2025 Annual Meeting

    | Name | Age(1) | Title | Director Since | | Luca Fabbri | 55 | President and Chief Executive Officer | 2023 | | John A. Good | 66 | Independent Director | 2018 | | Jennifer S. Grafton | 47 | Independent Director | 2023 | | Danny D. Moore | 61 | Independent Director | 2021 | | Paul A. Pittman | 61 | Executive Chairman | 2014 |

  4. Nominees for Election for a One-Year Term Expiring at the 2025 Annual Meeting

    (1) Age as of March 15, 2024 Set forth below are descriptions of the backgrounds and principal occupations of each of our directors, and the period during which he has served as a director. Luca Fabbri. Mr. Fabbri has served as our Chief Executive Officer since February 2023 and as our President since October 2021 and served as our Chief Financial Officer and Treasurer from the founding of our Company until October 2021. From November 2011 until 2014, Mr. Fabbri served as the Senior Vice President and Chief Operating Officer of American Agriculture. Mr. Fabbri was a founder of Co3 Systems Inc., an enterprise software company in Cambridge, MA, and served as its Vice President of Engineering from January 2010 to October 2011. From January 2003 to September 2012, Mr. Fabbri was a consultant with Elk Creek Ventures Inc., providing consulting services in technology, finance and corporate development. From April 2000 to December 2002, Mr. Fabbri served as Head of Corporate Development for Jazz Technologies, Inc. Mr. Fabbri also founded Thejobsite.com, a software company, and served as its Senior Vice President and Chief Financial Officer from April 2000 to December 2002. From August 1997 to January 2000, Mr. Fabbri was an Associate in mergers and acquisitions in the London office of Merrill Lynch & Co. Mr. Fabbri began his career in Italy as a technology and operations consultant. Mr. Fabbri has a B.S. with Honors in Economics from the University of Naples (Italy) and a M.B.A. in Finance from the Massachusetts Institute of Technology. Based on his knowledge of the Company, its business and properties, his background in finance and his experience in the real estate industry, including acquiring and managing farmland, we have determined that Mr. Fabbri should serve as a director. John A. Good. Mr. Good has served as a director since his appointment to the Board on January 21, 2018. Since October 2018, Mr. Good has served as the Chief Executive Officer of NexPoint Storage Partners, Inc. (formerly, Jernigan Capital, Inc.), a REIT that provides capital to developers of self-storage facilities. Prior to serving as Chief Executive Officer of Jernigan Capital, Inc., Mr. Good served the President and Chief Operating Officer of Jernigan Capital, Inc. and as a director since June 2015. Prior to joining Jernigan Capital, Inc., Mr. Good was a partner and co-head of the REIT practice group of Morrison & Foerster LLP, a global law firm. From 1999 to 2013, Mr. Good was a partner, multi-term executive committee member and head of the REIT practice at the law firm of Bass, Berry & Sims PLC and prior to that was a stockholder and chair of the securities and M&A practice group at the law firm of Baker, Donelson, Bearman, Caldwell and Berkowitz P.C. Mr. Good has over 28 years’ experience working with senior management teams and boards of directors of public companies in the REIT and financial services industries on corporate finance, corporate governance, merger and acquisition, tax, executive compensation, joint venture and strategic planning projects. As a nationally recognized corporate and securities lawyer, he was lead counsel on over 200 securities offerings raising in excess of $25 billion over the past 25 years, with more than 125 of those deals being in the REIT industry. Mr. Good graduated from the University of Memphis with a B.B.A. in accounting, cum laude, in 1980, attained his CPA designation and practiced with a large regional CPA firm until entering University of Memphis School of Law, where he received his J.D with honors in 1987. He has been nationally ranked by Chambers USA as a leading lawyer to the REIT industry and has been active in NAREIT since 1994. Based on his extensive experience working with public companies in the REIT industry, we have determined that Mr. Good should serve as a director. Jennifer S. Grafton. Ms. Grafton has served as a director since her appointment to the Board in March 2023. Since March 1, 2023, Ms. Grafton has served as Executive Vice President, General Counsel and Corporate Secretary of E2open Parent Holdings, Inc., a supply chain software provider. Prior to serving as General Counsel, Ms. Grafton served as Deputy General Counsel and Assistant Secretary since January 2021. Prior to joining E2open, Ms. Grafton served as Chief Administrative Officer and Chief Legal Officer of Westmoreland Coal Company (“Westmoreland”), a Nasdaq-listed global mining and energy company from 2008 through 2019. Westmoreland filed for Chapter 11 bankruptcy protection in October 2018 due to challenging market conditions and emerged from bankruptcy in March 2019. Previous to Westmoreland, Ms. Grafton worked in the corporate governance and securities practices of various Denver-based law firms. In addition to various executive roles, in 2021 Ms. Grafton was appointed to serve as an independent director of Dakota Gold Corporation, a publicly-traded exploration stage gold mining company where she serves as Chair of the Compensation Committee and a member of the Audit and Nominating & Governance Committees. Ms. Grafton graduated from the University of Puget Sound with a B.A. in Politics & Government, from the University of Denver Sturm College of Law Order of the Coif with a J.D. and received her M.B.A. from the University of Michigan Ross School of Business with Highest Honors. Based on her extensive experience working with public companies and her legal and governance expertise, we have determined that Ms. Grafton should serve as a director. Danny D. Moore. Mr. Moore has served as a director since November 2021. Mr. Moore has served as the President of DeNOVO Solutions, LLC and Thornberry Consulting, LLC, which provide scientific, engineering, technical and operational support services to the United States Department of Defense, since 2012. Mr. Moore has served on the Board of Directors of the Leadership Program of the Rockies since 2019 and on the Board of Directors of the Colorado Business Roundtable since 2020 and previously served as a member of the Board of Advisors of the University of Denver’s Graduate School of Professional Psychology from 2018 to 2020. Prior to his retirement from service in 2005, Mr. Moore served 24 years in the United States Navy. Mr. Moore holds an undergraduate degree from Colorado Christian University and a Masters of Business Administration from the University of Phoenix. Based on his demonstrated operational expertise and leadership credentials, we have determined that Mr. Moore should serve as a director. Paul A. Pittman. Mr. Pittman has served as our Executive Chairman since our initial public offering in April 2014 and served as our Chief Executive Officer until February 2023 and as our President until November 2021. Mr. Pittman grew up in a farm family and has been buying and operating farms since the mid-1990s. Many of his farmland assets in Illinois, Nebraska, and Colorado were contributed to Farmland Partners Inc. at the time of its initial public offering in 2014. Before devoting full attention to his farming and farmland ownership businesses, Mr. Pittman was the CFO of Jazz Technologies, a publicly traded semiconductor foundry. Prior, he started TheJobsite.com, which merged into HomeSphere, an enterprise software company where Mr. Pittman served as President. Mr. Pittman has worked as an investment banker in London, New York and San Francisco specializing in mergers and acquisitions with Merrill Lynch, Wasserstein Perella & Co, and ThinkEquity. He began his career as an attorney with Sullivan & Cromwell. Mr. Pittman served in the United States Coast Guard. He earned a B.S. in Agriculture from the University of Illinois, a Master’s in Public Policy from Harvard University, and a J.D. with Honors from the University of Chicago Law School.

  5. Nominees for Election for a One-Year Term Expiring at the 2025 Annual Meeting

    Based on his knowledge of the Company, its business and properties, his past public company experience, his background in finance and his experience in the real estate industry, including acquiring and managing farmland, we have determined that Mr. Pittman should serve as the Executive Chairman of the Board.

  6. Director Compensation

    Director Compensation As compensation for serving on the Board, each of our independent directors receives an annual fee of $37,500 and an additional $2,500 per year for committee service, regardless of the number of committees on which a director serves. The chair of each of the Audit, Compensation and Nominating and Corporate Governance Committees receives an additional annual fee of $7,500, $5,000 and $2,500, respectively, and the lead independent director receives an additional annual fee of $7,500; provided, however, if the lead independent director also serves as the Audit Committee Chair, he or she receives $2,500, and if he or she serves as both the Audit and Compensation Committee Chair, this amount is increased to $5,000. In addition, we reimburse our directors for their reasonable out-of-pocket expenses incurred in attending Board and committee meetings. Messrs. Pittman and Fabbri do not receive any additional compensation for their service on the Board, and prior to his resignation from the Board, Mr. Wise also did not receive any additional compensation for his service on the Board. The following provides compensation information pursuant to the scaled disclosure rules applicable to emerging growth companies under SEC rules and the JOBS Act.

  7. Director Compensation Table

    Director Compensation Table The following table provides information on the compensation of our directors for the fiscal year ended December 31, 2023, other than Messrs. Pittman and Fabbri, who received no separate compensation for their service as directors. For information related to the compensation of Messrs. Pittman and Fabbri, please refer to “Compensation of Executive Officers — Summary Compensation Table.”

  8. Director Compensation Table

    | Name | Fees Paid in Cash | Awards(1) | Stock Compensation(2) | Total | | Chris A. Downey | $52,488(3) | $48,800 | $960 | $102,248 | | Joseph W. Glauber | $40,000 | $48,800 | $960 | $89,760 | | John A. Good | $47,500 | $48,800 | $960 | $97,260 | | Jennifer S. Grafton | $39,375 | $40,680 | $720 | $80,775 | | Thomas P. Heneghan | $49,980(3) | $48,800 | $960 | $99,740 | | Danny D. Moore | $52,460(3) | $48,800 | $960 | $102,220 | | Murray R. Wise | — | — | — | $149,350(4) |

  9. Director Compensation Table

    (1) Represents the aggregate grant date fair value of restricted shares of Common Stock granted on February 22, 2022 computed in accordance with FASB ASC Topic 718. (2) Represents the dollar value of dividends paid on unvested restricted stock awards. (3) Amounts reported include $52,488, $49,980 and $52,460 in shares of unrestricted stock received by Messrs. Downey, Heneghan and Moore, respectively, in lieu of their quarterly cash retainers, for a total of 4,719, 4,394, and 4,617 unrestricted shares of stock, respectively. Represents compensation paid by the Company to Mr. Wise for his role as Chairman and Chief Executive Officer of MWA, a wholly owned subsidiary of FPI Agribusiness. Mr. Wise received no separate compensation for his service as a director.

  10. COMPENSATION OF NAMED EXECUTIVE OFFICERS

    | Name and Principal Position | Year | Salary | Non- Equity Incentive Comp(1) | Bonus(2) | Stock Awards(3) | All Other(4) | Total | | Paul A. Pittman(5) Executive Chairman | 2023 | $575,000 | $215,625 | $359,375 | $1,006,243 | $33,360 | $2,189,603 | | | 2022 | $575,000 | $0 | $718,000 | $749,998 | $23,605 | $2,066,603 | | Luca Fabbri(5) President and Chief Executive Officer | 2023 | $375,000 | $103,125 | $171,875 | $494,993 | $17,830 | $1,162,823 | | | 2022 | $330,000 | $0 | $215,000 | $377,494 | $14,703 | $937,197 | | James Gilligan Chief Financial Officer and Treasurer | 2023 | $325,000 | $61,875 | $92,813 | $249,991 | $8,174 | $737,853 | | | 2022 | $309,000 | $0 | $150,000 | $199,994 | $4,750 | $663,744 |

  11. Outstanding Equity Awards at Fiscal Year-End December 31, 2023

    Outstanding Equity Awards at Fiscal Year-End December 31, 2023 The following table presents information about our NEO’s outstanding equity awards as of December 31, 2023.

  12. Outstanding Equity Awards at Fiscal Year-End December 31, 2023

    | Name | Grant Date | Market Value of Shares That Have Not Vested(1) | Number of Shares That Have Not Vested(2) | | Paul A. Pittman(3) Executive Chairman | 2/24/2023 | $1,188,071 | 95,198 | | | 3/3/2022 | $526,581 | 42,194 | | | 3/22/2021 | $160,830 | 12,887 | | Luca Fabbri(3) President and Chief Executive Officer | 2/24/2023 | $584,438 | 46,830 | | | 3/3/2022 | $265,038 | 21,237 | | | 3/22/2021 | $114,367 | 9,164 | | James Gilligan(4) Chief Financial Officer and Treasurer | 2/24/2023 | $295,164 | 23,651 | | | 3/3/2022 | $93,612 | 7,501 | | | 5/24/2021 | $65,570 | 5,254 |

  13. Outstanding Equity Awards at Fiscal Year-End December 31, 2023

    (1) Market value reflects the number of restricted shares multiplied by $12.48 per share, which was the closing price of our Common Stock on the NYSE on December 29, 2023. (2) Represents the unvested portion of shares of restricted stock granted under our Third Amended and Restated 2014 Equity Incentive Plan, all of which vest ratably on the first three anniversaries of the date of grant. (3) Mr. Fabbri was appointed Chief Executive Officer on February 23, 2023. Mr. Pittman, the Company’s previous Chief Executive Officer, continues to serve as Executive Chairman. (4) Mr. Gilligan received a restricted equity award totaling $200,000 upon joining the Company in May 2021.

  14. Pay versus Performance

    Pay versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance measures for the Company for each of the last two completed fiscal years The following provides pay versus performance information pursuant to the scaled disclosure rules applicable to smaller reporting companies. In determining the “compensation actually paid” (“CAP”) to our NEOs, we are required to make various adjustments to amounts that have been previously reported in the Summary Compensation Table (“SCT”) in previous years, as the SEC’s calculation methods for this section differ from those required in the SCT. The table below summarizes compensation values both previously reported in the SCT, as well as the adjusted amounts required to be reported in this section for the years ended December 31, 2021, 2022 and 2023. Pay versus Performance Table

  15. Pay versus Performance

    | Year | SCT Total for PEO(1) | Compensation Actually Paid to PEO(3) | Average SCT Total for non- PEO NEOs(2) | Average CAP for non- PEO NEOs(3) | Value of Initial Fixed $100 Investment based on Total Shareholder Return | Net Income | | 2023 | $1,162,823 | $1,171,621 | $1,463,728 | $1,517,090 | $154.12 | $31,681,000 | | 2022 | $2,066,603 | $2,206,851 | $800,471 | $819,576 | $148.25 | $11,960,000 | | 2021 | $1,725,252 | $2,399,855 | $600,934 | $740,070 | $139.70 | $10,259,000 |

  16. Pay versus Performance

    Our principal executive officer (“PEO”) for the years ended December 31, 2021 and 2022 was Mr. Pittman. Our PEO for the year ended December 31, 2023 was Mr. Fabbri. The dollar amounts reported in this column are the amounts of total compensation reported for our PEO for each corresponding year in the “Total” column of the SCT. See “Executive Compensation — Executive Compensation Tables — Summary Compensation Table.” (2) The non-PEO NEOs for the year ended December 31, 2021 were Mr. Fabbri, Mr. Gilligan and Erica Borenstein, our former General Counsel and Secretary. The non-PEO NEOs for the year ended December 31, 2022 were Messrs. Fabbri and Gilligan. The non-PEO NEOs for the year ended December 31, 2023 were Messrs. Pittman and Gilligan. The dollar amounts reported in this column are the amounts of total compensation reported for our non-PEO NEOs for each corresponding year in the “Total” column of the SCT. See “Executive Compensation — Executive Compensation Tables — Summary Compensation Table.” (3) The dollar amounts reported in these columns represent the amount of “compensation actually paid” to our PEO and our non-PEO NEOs, respectively, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to our PEO and our non-PEO NEOs during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to total compensation for each year to determine the compensation actually paid: PEO SCT Total Compensation to CAP Reconciliation

  17. Pay versus Performance

    | Name | Year | PEO or Non- PEO NEO | SCT Total | To Calculate Executive CAP | | CAP | | | | | | Deducted(1) | Added(2) | | | Luca Fabbri | 2023 | PEO | $1,162,823 | $(494,993) | $503,791 | $1,171,621 | | Paul Pittman | 2023 | NEO | $2,189,603 | $(1,006,243) | $1,080,232 | $2,263,592 | | James Gilligan | 2023 | NEO | $737,853 | $(249,991) | $282,726 | $770,588 | | Paul Pittman | 2022 | PEO | $2,066,603 | $(749,998) | $890,246 | $2,206,851 | | Luca Fabbri | 2022 | NEO | $937,197 | $(377,494) | $456,600 | $1,016,303 | | James Gilligan | 2022 | NEO | $663,744 | $(199,994) | $159,099 | $622,849 | | Paul Pittman | 2021 | PEO | $1,725,252 | $(450,000) | $1,124,603 | $2,399,855 | | Luca Fabbri | 2021 | NEO | $807,379 | $(320,000) | $658,933 | $1,146,312 | | James Gilligan | 2021 | NEO | $434,900 | $(133,324) | $188,332 | $489,908 | | Erica Borenstein(3) | 2021 | NEO | $560,522 | $(160,000) | $183,467 | $583,989 |

  18. Pay versus Performance

    (1) Deducted the amount reported in the SCT “Stock Awards” column. (2) Added (or subtracted, as applicable) (i) the end of year fair value of stock awards granted during the year that were outstanding and unvested at the end of the year, (ii) the change from the end of the prior fiscal year to the end of the applicable year in the fair value of stock awards granted in any prior year that are outstanding and unvested at the end of the year, and (iii) the change in the fair value of stock awards from the end of the prior fiscal year to the vesting date for stock awards granted in any prior year that vested during the applicable year. All fair values were computed in accordance with FASB ASC Topic 718. (3) Ms. Borenstein retired from her positions as the General Counsel and Secretary of the Company effective December 31, 2021. Relationship Between CAP and Financial Measures There is an important timing difference to consider when comparing the SCT to the CAP. The SCT includes stock awards, generally granted in the first quarter, following the completion and filing of the Annual Report on Form 10-K for such year ended December 31st. The stock awards included in the SCT are based on performance of the executive and the Company in the previous year. The CAP includes stock award changes in fair value (as explained in the table above), driven by stock price performance in the current year. In 2021, the SCT included stock awards that were associated with performance in 2020 (the third NEO was a new hire). CAP included stock award changes in fair value driven by stock price performance in 2021, which was up over 37%. In 2021, the CAP included stock award changes in fair value driven by stock price performance in 2021, which increased over 37%. In 2022, the SCT included stock awards that were associated with performance in 2021. The CAP included stock award changes in fair value driven by stock price performance in 2022, which increased approximately 4%. In 2023, the SCT included stock awards that were associated with performance in 2022. The CAP included stock award changes in fair value driven by stock price performance in 2023, which was relatively flat. The following describes how each of the financial measures in the table above, across the period included, relate to the trends in the CAP to the PEO and the other NEOs (excluding NEOs that were hired, or retired, during the periods, making them non-comparable between the periods): • Total Shareholder Return (TSR): The Company’s TSR was greater in 2021 compared to 2022 and 2023, driven by greater stock price performance in 2021, compared to 2022 and 2023. The greater stock price performance in 2021 compared to 2022, contributed to larger CAP amounts in 2021, compared to 2022 and 2023. • Net Income: Net income increased over 16% during 2022, compared to 2021. The CAP amount decreased by approximately 8% for Mr. Pittman and 11% for Mr. Fabbri, but increased by approximately 27% for Mr. Gilligan, during 2022, compared to 2021. Net income increased over 200% during 2023, compared to 2022. The CAP amount increased by approximately 3% for Mr. Pittman, 24% for Mr. Gilligan and 15% for Mr. Fabbri during 2023, compared to 2022.