DEF 14A of BRT Apartments Corp.
Filed Apr 22, 2024 · FY20230001140361-24-020910
Compensation of Directors
Compensation of Directors The following table sets forth the cash compensation paid in 2023 to the directors for service on the board and its committees, all of whom, except as indicated in footnote 1 below, are non-management directors (i.e., directors who are not employees or officers of ours or our affiliates):
Compensation of Directors
| | | Committee | | | | | Board | Audit | Compensation | Nominating | | Annual retainer | $23,000 | $5,750 | $4,600 | $3,450 | | Presence in-person at meeting | 1,450 | 1,150 | 1,150 | 1,150 | | Presence by telephone at meeting | 875 | 875 | 875 | 875 | | Chairman’s annual retainer | 282,225(1) | 14,500(2) | 14,500(2) | 4,600(2) | | Independent lead director’s annual retainer | 10,000(3) | | | |
Compensation of Directors
| (1) Reflects the compensation paid to Israel Rosenzweig, a management director, for his service as chairman of our board. See “Executive Compensation—Chairman of the Board’s Compensation” and “Certain Relationships and Related Transactions.” |
Compensation of Directors
| (2) The committee chairman receives the annual retainer and the annual retainer for serving as chairman of such committee. |
Compensation of Directors
| (3) Commenced September 2023. |
Compensation of Directors
In addition, on an annual basis, non-management directors are awarded shares of restricted stock. The restricted stock has a five-year vesting period, subject to acceleration upon the occurrence of specified events, during which the holder is entitled to vote and receive distributions, if any, on such shares. In each of 2023 and 2024, each non-management director was issued 4,100 shares of restricted stock. Non-management directors who reside outside of the local area in which our executive office is located are reimbursed for travel expenses incurred in attending Board and committee meetings. The following table sets forth the cash and non-cash compensation paid to our directors for their service in such capacity in 2023, all of whom, except for Israel Rosenzweig, are non-management directors:
Compensation of Directors
| | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2) | Total ($) | | Carol Cicero | 28,225 | 78,638 | 106,863 | | Alan Ginsburg | 32,850 | 78,638 | 111,488 | | Louis C. Grassi | 54,675 | 78,638 | 133,313 | | Gary Hurand | 45,550 | 78,638 | 124,188 | | Israel Rosenzweig | 282,225(3) | 205,481(4) | 487,700 | | Jeffrey Rubin | 44,675 | 78,638 | 123,313 | | Jonathan H. Simon | 37,775 | 78,638 | 116,413 | | Elie Y. Weiss | 42,375 | 78,638 | 121,013 |
Compensation of Directors
| (1) This table does not reflect: (a) the compensation we paid Jeffrey A. Gould, our President, Chief Executive Officer and a director; Fredric H. Gould, a director; and Matthew J. Gould, an executive officer and director; and (b) compensation paid to Fredric H. Gould, Matthew J. Gould and Israel Rosenzweig by Majestic Property Management Corp. (“Majestic Property”), which is wholly-owned by Fredric H. Gould. See “Executive Compensation—Summary Compensation Table” and “Certain Relationships and Related Transactions” for information regarding the compensation paid these individuals. |
Compensation of Directors
| (2) Represents the aggregate grant date fair value computed in accordance with Accounting Standards Codification Topic 718 – Stock Compensation, which we refer to as “ASC Topic 718”. These amounts reflect our accounting expense and do not correspond to the actual value that will be realized by these directors. |
Compensation of Directors
| (3) Reflects the retainer paid for serving as Chairman of the Board. Excludes fees for Services of $53,840 for 2023. See “Executive Compensation—General” and “Certain Relationships and Related Transactions.” |
Compensation of Directors
| (4) Reflects the grant date fair value of 2,581 shares of restricted stock and 10,500 shares subject to restricted stock units, which we refer to as RSUs (excluding the peer group adjustment as described in “Executive Compensation – Grant of Plan Based Awards”) that vest in three-years subject to the satisfaction of performance and/or market conditions. |
Compensation of Directors
The table below shows the aggregate number of unvested stock awards held by the named directors and the value thereof as of December 31, 2023:
Compensation of Directors
| Name | Unvested Stock Awards (#) | Market Value of Unvested Stock Awards ($)(1) | | Carol Cicero | 4,100 | 76,219 | | Alan H. Ginsburg(2) | 20,300 | 377,377 | | Louis C. Grassi(2) | 20,300 | 377,377 | | Gary Hurand(2) | 20,300 | 377,377 | | Israel Rosenzweig(3) | 57,683 | 1,072,308 | | Jeffrey Rubin(2) | 20,300 | 377,377 | | Jonathan H. Simon(2) | 20,300 | 377,377 | | Elie Y. Weiss(2) | 20,300 | 377,377 |
Compensation of Directors
| (1) The closing price on the NYSE on December 29, 2023 for a share of our common stock was $18.59. |
Compensation of Directors
| (2) In January 2024, 2025, 2026, 2027 and 2028, 3,900 shares, 4,200 shares, 4,000 shares, 4,100 shares, and 4,100 shares are scheduled to vest, respectively. |
Compensation of Directors
| (3) Mr. Rosenzweig is the Chairman of our Board. In January 2024, 2025 and 2026, June 2026, and January 2027 and 2028, the following shares of restricted stock are scheduled to vest: 3,185 shares, 3,055 shares, 2,803 shares, 12,000 shares, 2,734 shares and 2,581 shares, respectively. In March 2024, June 2025 and June 2026, 10,412 shares, 10,412 shares and 10,500 shares (excluding the peer group adjustment), respectively, underlying RSUs are scheduled to vest, subject to the satisfaction of market and/or performance conditions. RSUs include dividend equivalents rights. See “Executive Compensation – Components of Executive Compensation—Long-Term Equity and Long-Term Equity Incentive Awards”, “Executive Compensation–Outstanding Equity Awards at Fiscal Year-End” and note 9 of our consolidated financial statements included in our Annual Report. |
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS The board is divided into three classes, each of which is elected for a staggered term of three years. Our Articles of Incorporation provides for ten directors, subject to increase or decrease as determined by the board. The board may, following the annual meeting, increase the size of the board and fill any resulting newly created directorships. At the annual meeting of stockholders, three Class I Directors will be elected to our board. Each nominee identified below has been recommended to our board by the nominating and corporate governance committee for election at the annual meeting and each nominee has been nominated by our board to stand for election at the annual meeting, to hold office until our 2027 annual meeting and until his or her successor is elected and qualified. Class II Directors and Class III Directors will continue to serve as directors until our 2025 and 2026 annual meetings, respectively, and until their respective successors are duly elected and qualify. Proxies will not be voted for a greater number of persons than the number of nominees named in the proxy statement. It is contemplated that all the nominees will stand for election. Should any nominee become unavailable for election, all proxies (except proxies marked to the contrary) will be voted for the election of a substitute nominee recommended by the board of directors. In an uncontested election, each nominee for director will be elected only if he or she receives the affirmative vote of a majority of the total votes cast “for” and “against” for such nominee. As set forth in our corporate governance guidelines, any nominee for director who is an incumbent director but who is not elected by the vote required in the Bylaws, and with respect to whom no successor has been elected, is required to promptly tender his offer to resign to the board for its consideration. The nominating committee will recommend to the board whether to accept the offer to resign. No later than the next regularly scheduled board meeting to be held at least ten days after the date of the election, the board will decide whether to accept such offer and promptly and publicly disclose its decision. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. If the resignation is accepted, the board will either leave such position vacant, reduce the size of the board or elect another individual to serve in place of the resigning director. The nominating committee and the board may consider any factors they deem relevant in deciding whether to accept a director’s resignation. The following table sets forth information concerning the directors who (i) are nominees for election at this year’s annual meeting of stockholders and (ii) whose terms are not expiring.
Nominees for Election as Directors
Nominees for Election as Directors
Nominees for Election as Directors
| Name | Class | Term to Expire at Annual Meeting in | | Alan Ginsburg | I | 2027 | | Jeffrey A. Gould | I | 2027 | | Jonathan H. Simon | I | 2027 |
Directors Whose Terms are not Expiring
Directors Whose Terms are not Expiring
Directors Whose Terms are not Expiring
| Name | Class | Term to Expire at Annual Meeting in | | Matthew J. Gould | II | 2025 | | Louis C. Grassi | II | 2025 | | Israel Rosenzweig | II | 2025 | | Jeffrey Rubin | II | 2025 | | Carol Cicero | III | 2026 | | Fredric H. Gould | III | 2026 | | Gary Hurand | III | 2026 | | Elie Y. Weiss | III | 2026 |
Directors Whose Terms are not Expiring
Nominees for Election as Directors
Directors Whose Terms are not Expiring
| Name and Age | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations | | Alan H. Ginsburg 85 Years | Director since 2006; since 1987, Chief Executive Officer of The CED Companies, a private company which develops, builds and manages multi-family apartment communities. His expertise and in-depth knowledge of the multi-family property industry garnered through more than 35 years as chief executive officer of a multi-family real estate developer/manager, led our nominating committee to conclude that he should continue to serve on our board. | | Jeffrey A. Gould 58 years | Director since 1997, Chief Executive Officer since 2002, President from 1996 and Chief Operating Officer from 1996 to 2001; since 1999, Senior Vice President and director of One Liberty Properties, Inc. an NYSE listed real estate investment trust focused on net lease commercial properties; since 1996, Senior Vice President of and since 2013, Director/ Manager of Georgetown Partners, the managing general partner of Gould Investors. He is the son of Fredric H. Gould and brother of Matthew J. Gould. His broad range of real experience, including experience with respect to real estate lending, management, acquisitions and dispositions, and his 22 years and 28 years of service as our Chief Executive Officer and President, respectively, led our nominating committee to conclude that he should continue to serve on our board. | | Jonathan H. Simon 58 years | Director since 2006; since 1994, President and Chief Executive Officer of The Simon Development Group and predecessors, a private company which develops, owns and manages a diverse portfolio of residential, retail and commercial real estate, primarily in New York City. His more than 30 years of experience in the real estate industry led our nominating committee to conclude that he should continue to serve on our board. |
Directors Whose Terms are not Expiring
THE BOARD RECOMMENDS A VOTE FOR THE ELECTION OF ALAN H. GINSBURG, JEFFREY A. GOULD AND JONATHAN H. SIMON. Continuing Directors
Directors Whose Terms are not Expiring
| Name and Age | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations | | Carol Cicero 64 years | Director since January 2022; From 2014 through 2021, Group Vice President and from 2000 through 2013, Area Vice President of RAM Partners, LLC, a full service real estate management firm that provides property management services (including services for several of our multi-family properties); from 2013 through 2014, director of asset management at Arenda Capital Management, a real estate focused private investment firm. Ms. Cicero’s more than 30 years of multi-family property management experience provides our board with an in-depth understanding of the day-to-day challenges in operating multi-family properties. | | Fredric H. Gould 89 Years | Director since 1983 and Chairman of our Board from 1984 through 2013; Chairman of the Board of Directors from 1989 to 2013, Vice Chairman of the Board since 2013, Chief Executive Officer from 2005 to 2007, and President from 2005 to 2006 of One Liberty Properties; Chairman of the Board of Georgetown Partners from 1997 to 2012 and director from 2013 through 2021; Director of EastGroup Properties, Inc., from 1998 through 2019. Mr. Gould brings to our board his knowledge of our company and his knowledge and experience in business, finance, real estate, tax, and accounting matters gained from his more than 50 years of experience in the real estate and finance industries, as the chief executive officer of publicly traded real estate companies, as a director of four REITs, and as a director and a member of the loan committee of two savings and loan associations. | | Matthew J. Gould 64 years | Director since 2001 and Senior Vice President since 1993; from 1999 through 2011, Director and Senior Vice President, from 1989 through 1999, President, from 2011 through 2013, Vice Chairman and since 2013, Chairman of the Board of Directors of One Liberty Properties; from 1996 through 2012, President, and since 2013, Chairman of the Board/Manager of Georgetown Partners. Since 2019, Chief Executive Officer of Rainbow MJ Advisors, which manages real estate loans and investments in the cannabis industry, since 2021, a Director of Halsa Holdings LLC, which is engaged in commercial activities in such industry, and since 2022, a Director of MJ Real Estate Investment Trust, a private REIT that acquires interests in, or originates loans secured by, real estate assets operated by state licensed cannabis operators. He brings to the board his more than 35 years of real estate experience as an executive in the real estate industry with expertise in evaluating, managing, financing, acquiring and selling various types of properties. | | Louis C. Grassi 68 years | Director since 2003; Since 2023, CEO and Managing Director of Grassi Advisory Group, Inc, a firm engaged in providing consulting services to businesses and individuals; From 1980 through 2023, Managing Partner of Grassi & Co. CPAs, P.C., a national firm providing tax and accounting services; Director of Flushing Financial Corp. since 1998 and serves as chairman of its audit committee. Mr. Grassi has been involved for more than 28 years in accounting and auditing issues and has extensive management and leadership in the private and public company environment. His knowledge of financial and accounting matters and his experience as a director and member of the audit committee of a publicly traded financial institution provides him with the accounting and governance background and the skill needed to serve as the chairman and financial expert of our audit committee and as a member of our nominating committee. |
Directors Whose Terms are not Expiring
Continuing Directors
Directors Whose Terms are not Expiring
| Name and Age | Principal Occupation for the past Five Years and other Directorships or Significant Affiliations | | Gary Hurand 77 Years | Director since 1990; since 1987 President of Management Diversified, Inc., a real property management and development company; Director of Citizens Republic Bancorp Inc. and predecessor from 1990 through 2013. He is the father-in-law of Elie Y. Weiss. Mr. Hurand’s extensive experience in commercial real estate and in business operations, and as a former director and member of the audit committee of a publicly traded financial institution, provides our board with a knowledgeable and experienced chair of its nominating committee and member of the audit committee. | | Israel Rosenzweig 76 years | Chairman of the Board since 2013, Director and Vice Chairman of the Board from 2012 through 2013, and Senior Vice President from 1998 through 2012; Vice President of Georgetown Partners since 1997; Senior Vice President of One Liberty Properties since 1989. His experience as a lending officer at a major financial institution, his knowledge and experience in business, finance and accounting matters and his more than 34 years of experience in the real estate industry provides our board with an experienced and knowledgeable chairman. | | Jeffrey Rubin 56 years | Director since 2004 and independent lead director since 2023; since 2009, President and CEO of The JR Group, which provides consulting services to the electronic payment processing industry; since 2023, CEO of Excel Payments, a provider of credit card processing services to merchants throughout the United States; since 2008, Chief Executive Officer of Summit Processing Group LLC and since 2023, Partner at Finance ERC LLC, both of which provide financial products to businesses; President and Chief Executive Officer of Premier Payments, a provider of credit card processing services for merchants throughout the United States, from 2012 until its sale in 2015; President and director of Newtek Business Services, Inc., a provider of business services and financial products to small and medium sized businesses, from 1999 to 2008. Mr. Rubin’s experiences as the president and director of a public company and in business and financial matters contribute to his ability to serve as the chairman of our compensation committee and as our independent lead director. | | Elie Y. Weiss 51 years | Director since 2007; engaged in real estate development since 1997; since 2007, Mr. Weiss has served as CEO of Five Forty Real Estate, a family office that manages various investments, and since 2017, he has been a principal at Ponsky Capital Partners, a real estate private equity sponsor at which he is chair of the investment committee; from 1997 to 2007, Executive Vice President of Robert Stark Enterprises, Inc., a company engaged in the development and management of retail, office and multi-family residential properties; President of Real Estate for American Greetings from 2013 to 2017. Mr. Weiss brings to our board his real estate and entrepreneurial business experiences. |
HIGHLIGHTS OF OUR COMPENSATION PROGRAM AND GOVERNANCE PRACTICES
| | WHAT WE DO | | ✔ | Use rigorous performance goals. Only 24.4% of the RSUs awarded to our executive officers in 2021, 2022 and 2023, excluding the impact of the peer group adjustment, would have vested as of December 31, 2023, demonstrating the rigorous conditions established for our equity incentive awards. | | ✔ | Emphasize equity awards as a significant portion of the performance/incentive component of compensation. The grant date fair value of long-term equity awards (i.e., the restricted stock awarded in 2024 for 2023 performance) and equity incentive awards (i.e., the RSUs awarded in 2023; the long-term equity awards and equity incentive awards are referred to collectively as the “Equity Awards”) accounted for 32%, 45% and 38% of the performance/incentive-based comportment of compensation awarded to Jeffrey A. Gould, our CEO, Mitchell Gould, our Executive Vice President and George Zweier, our Chief Financial Officer, respectively, for 2023. | | ✔ | Equity awards as a significant component of annual base compensation. In 2023, the grant date fair value of Equity Awards, as a percentage of base annual compensation (i.e., salary, cash bonus and the grant date fair value of the Equity Awards), was 32%, 44% and 39% for Jeffrey A. Gould, Mitchell Gould and George Zweier, respectively. | | ✔ | Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of our executive officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of longer-term value. | | ✔ | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance between shorter and longer-term incentives. | | ✔ | Capped equity award payouts. The number of shares that can be earned under our long-term equity incentive program are capped. | | ✔ | Independent compensation committee. Our compensation committee is comprised entirely of independent directors and it oversees risks with respect to our compensation practices. | | ✔ | Clawback policy. We are entitled to recoup compensation or cause the forfeiture of compensation as more fully described under “—Clawbacks.” | | ✔ | Stock ownership guidelines. All of our named executive officers and non-management directors own a meaningful amount of our stock as required by these guidelines – see “– Stock Ownership Guidelines.” | | ✔ | Diversity; Responsiveness to Stockholders’ Corporate Governance Comments. We are responsive to comments and concerns raised by our stockholders. In response to comments raised by stockholders regarding (i) the appointment of an independent lead director, in 2023 we appointed Jeffrey Rubin to serve in such position and (ii) board diversity, in 2022 we appointed Carol Cicero, a highly-qualified woman, to serve as a director. |
HIGHLIGHTS OF OUR COMPENSATION PROGRAM AND GOVERNANCE PRACTICES
| WHAT WE DON’T DO | | | ✘ | No employment agreements. None of our officers have employment agreements. Employment of all of our full-time executive officers is “at will.” | | ✘ | No severance arrangements. There are no severance or similar arrangements for our executive officers, other than accelerated vesting of shares of restricted stock and RSUs upon the occurrence of specified events (e.g., death, disability, retirement or change of control). | | ✘ | No golden parachute tax gross-ups. There are no excise tax gross ups or similar arrangements for our executive officers. | | ✘ | No dividends on unearned equity incentive awards. No dividends are paid on the RSUs until the underlying shares are earned. | | ✘ | No hedging. We prohibit our directors, officers, employees and others from engaging in short sales involving our shares or hedging transactions — see “— Policy Prohibiting Hedging of our Securities.” | | ✘ | No multi-year or guaranteed bonuses or equity grants. We do not pay guaranteed bonuses to anyone and currently have no guaranteed commitments to grant any equity-based awards. This ensures that we are able to base all compensation awards to measurable performance factors and business results. | | ✘ | No costly defined benefit pension or supplemental retirement plans. We do not provide costly retirement benefits to our executive officers that reward longevity rather than contributions to our performance. |
EXECUTIVE COMPENSATION
| • | executive officers who devote their time to us on a part-time basis, whose basic annual compensation (base salary, bonus, if any, and perquisites) is allocated to us under a shared services agreement based upon the estimated time each devotes to our business activities compared to the estimated time each devotes to the other parties to the shared services agreement. These executive officers perform services for us related primarily to legal, accounting, insurance and tax matters, corporate governance, SEC and New York Stock Exchange reporting and other regulatory matters, and consult with our executives and employees in areas involving multi-family property acquisitions, dispositions and financings, property management, and capital raising. These executive officers are also compensated by us for their provision of the Services. See “Certain Relationships and Related Transactions.” David W. Kalish, Senior Vice President, Finance is the only named executive officer who fits into this category in 2023; and |
Compensation Consultant
Compensation Consultant Our compensation committee is authorized by its charter to retain independent counsel, compensation and benefits consultants, and other outside experts or advisors. In 2022, our compensation committee retained Ferguson Partners Consulting L.P., which we refer to as “Ferguson”, to analyze the competitiveness of our compensation practices in a benchmarking study. Ferguson, a nationally recognized compensation consulting firm specializing in the real estate industry, has no relationship with us or any of our affiliates. (Ferguson also serves as the independent compensation consultant for One Liberty Properties). As part of its benchmarking evaluation, Ferguson compared our compensation practices to the following REITs, which we refer to as the “Compensation Peer Group”: Armada Hoffler Properties, Inc., CatchMark Timber Trust, Centerspace, Community Healthcare Trust Incorporated, CTO Realty Growth, Inc., Farmland Partners, Inc., Hersha Hospitality Trust, INDUS Realty Trust, Inc., Postal Realty Trust, Inc., UMH Properties, Inc., and Urstadt Biddle Properties Inc. The Compensation Peer Group is comprised of the following types of REITs: three diversified, one healthcare, one hotel, one land, one manufactured home, one multi-family, one shopping center, one specialized and one timber. The Compensation Peer Group was selected by Ferguson using the peer group it previously used in preparing its last report for the compensation committee, as adjusted in 2022 in consultation with management and the compensation committee. These adjustments generally eliminated certain companies that were in the process of being acquired or were significantly larger than us, and added REITs that were similar in size or based in New York. Ferguson’s report, which was presented to the compensation committee in November 2022, analyzed BRT's executive team in a variety of ways, including benchmarking each individual compared to an appropriate benchmark (either by similar role and/or pay ranking level) as well as the executive team in the aggregate. The findings indicated that BRT's executive team, overall, was generally in line with the median of our Compensation Peer Group (in line defined as being +/ - 10% of the median). The compensation committee used the Ferguson Report as a “market check” to confirm its belief that on an overall basis, our compensation program and practices were not inappropriate.
Compensation Setting Process
Compensation Setting Process We determine compensation for our full-time named executive officers on a case-by-case basis and our compensation decisions include subjective determinations. We do not use formal quantitative performance targets to determine compensation, except with respect to RSUs which are equity based incentive awards that vest upon the satisfaction of market and/or performance based conditions. Base salaries are determined immediately preceding the year in which such salaries are to be paid, cash bonuses, which are paid after taking into account the Performance Criteria (as described in the following paragraph) are determined at the end of the year in which services are rendered and paid in the following year, restricted stock is awarded for service in a particular year and granted in the following the year and RSUs are granted in June/July of each year as an additional three-year performance incentive. In considering base compensation and bonuses, we assess an individual’s performance, which assessment is highly subjective, and our overall performance for the preceding year including, without limitation, the progress of our business in general, our multi-family property acquisition and disposition activities, our revenues, results of operations, funds from operations, adjusted funds from operations, total stockholder return, gains on property sales, the management of our real estate portfolio and subjective considerations (collectively, the “Performance Criteria”). The weight assigned to any particular element of the Performance Criteria changes over time, and varies based on, among other things, subjective factors and the officer’s specific responsibilities. Part-Time Executive Officers Shared Services Agreement The annual base compensation of our part-time executive officers to be paid in the aggregate by one or more of the entities which are parties to the shared services agreement is determined by the senior officers (including one or more of Fredric H. Gould, Jeffrey A. Gould and Matthew J. Gould) of the entities which are parties to such agreement. Our audit committee reviews the allocations made under the shared services agreement to determine that the allocations have been made in accordance with the terms of this agreement and its conclusions are reported to the board. See “Certain Relationships and Related Transactions.” Services Several of our part-time executive officers and a management director perform Services on our behalf. The term “Services” refers to the following: participating in our property analysis and approval process, property disposition consultation and review, developing and maintaining banking and financing relationships, providing investment advice, and long-term planning and consulting with our executives and employees in other aspects of our business, as required. Our Chief Executive Officer, in connection with other senior executive officers and a management director, recommends to the compensation and/or audit committee(s) and such committee determines the compensation to be paid for performing the Services.
Components of Executive Compensation
| • | annual cash bonuses, which are available only to full-time executive officers and are provided in the form of a cash payment (and to the extent part-time executive officers are awarded cash bonuses by any of our affiliates that are party to the shared services agreement, our share of such bonuses is allocated to us pursuant to such agreement (see “Certain Relationships and Related Transactions—Related Party Transactions”); |
Components of Executive Compensation
| • | long-term equity in the form of restricted stock and long-term equity awards in the form of RSUs; and |
Components of Executive Compensation
| • | special benefits and perquisites (i.e., contributions to defined contribution plan, additional disability insurance, long term care insurance, payment of education benefits and an automobile allowance (including insurance, maintenance and repairs)). |
Components of Executive Compensation
In determining 2023 compensation, the compensation committee did not have a specific allocation goal between cash and equity-based compensation. Base Salary Base salary is the basic, least variable form of compensation for the job an executive officer performs and provides each full-time executive officer with a guaranteed annual income. Base salaries of executive officers compensated by us directly are generally targeted to be competitive with the salaries paid to executives performing substantially similar functions at other REITs with a market capitalization similar to ours, taking into consideration the region in which our executive officers are located. Any increase in base salary is determined on a case-by-case basis, is not based upon a structured formula and is based upon, among other considerations, (i) such executive’s current base salary, (ii) the recommendation of the Chief Executive Officer and other senior executive officers, (iii) our performance in the preceding year (e.g., acquisition, disposition and financing activities, revenues, net income, funds from operations, adjusted funds from operations, stock price performance, dividends and any one or more of the foregoing), (iv) the individual’s performance, (v) years of service, (vi) job responsibilities, and (vii) subjective factors. Part-Time Executive Officers Their annual base salaries are allocated to the entities which are parties to the shared services agreement, including us, based on the estimated time devoted by them to each entity that is a party to such agreement. Bonus Full-Time Executive Officers We provide the opportunity for our full-time executive officers to earn an annual cash bonus. We provide this opportunity both to reward these individuals for past performance and to motivate and retain talented people. We recognize that annual bonuses are almost universally provided by other companies with which we might compete for talent. Annual cash bonuses for our executive officers (including the three named executive officers who devote substantially all of their business time to our affairs) are determined on an individual basis taking into account the Performance Criteria. These determinations are highly subjective. Part-Time Executive Officers Their bonuses are allocated in the same manner as their base salaries are allocated as described above under “— Part-Time Executive Officers.” Services Our management directors and certain part-time executive officers, including two named executive officers (i.e., David W. Kalish and Matthew J. Gould), provide Services. The other individuals performing Services are: Fredric H. Gould, Isaac Kalish, Israel Rosenzweig, Steven Rosenzweig and Mark H. Lundy. See “Certain Relationships and Related Transactions.” Long-Term Equity and Long-Term Equity Incentive Awards We provide the opportunity for our full-time and part-time executive officers to receive long-term equity (i.e., restricted stock) and long-term equity incentive awards (i.e., RSUs). These compensation programs are designed to recognize responsibilities, reward performance, retain our executive officers, motivate future performance and align the interests of our executive officers with our stockholders’ interests. The compensation committee reviews annually management’s recommendations for long-term equity awards for all our officers, directors and employees and makes determinations with respect to the grant of such awards. In making these determinations, the compensation committee considers the factors it considers relevant, including our performance and an individual’s performance. Existing ownership levels are not a factor in award determinations. In 2023, we adopted a long-term pay-for-performance equity incentive program (the “2023 Performance Plan”) pursuant to which we issued to 17 individuals, including all our named executive officers, RSUs exchangeable for up to an aggregate of 214,990 shares of common stock. Generally, these RSUs vest if and to the extent pre-established market or performance conditions are met for the three-years ending June 30, 2026. Further, the awards tied to market performance are subject to increase or decrease, which we refer to as the “peer group adjustment”, based upon our market performance compared to the market performance of a peer group. Finally, recipients are entitled to an amount equal to the cumulative dividends that would have been paid on the shares underlying the RSUs that vest had the shares been outstanding during the performance cycle (the “RSU Dividend Equivalents”). See “ — Grant of Plan Based Awards” for further information. We use RSUs as an element of our long-term equity incentive compensation program with the expectation that in light of the three-year vesting period and the need to satisfy market and/or financial performance conditions, these awards will further align the interests of our executive officers with our stockholders and reward long-term market and financial performance. The conditions that must be satisfied to earn the performance-based compensation are tied to the achievement of rigorous, sustained performance and/or market goals – as further described below, 50% of the award is based on adjusted funds from operation (“AFFO”) and 50% on total stockholder return (“TSR”), in each case as calculated pursuant to the applicable award agreement. The specific goals and the other material terms and conditions of the 2023 Performance Plan are as follows:
Components of Executive Compensation
| Long–Term Equity Incentive Awards Performance Criteria | Weight | Minimum Performance Criteria | Target Performance Criteria | Maximum Performance Criteria | | Adjusted Funds from Operations (AFFO) | 50% | Compounded annual growth rate of 4% | Compounded annual growth rate of 6% | Compounded annual growth rate of 8% | | Total Stockholder Return (TSR) | 50%(1) | Compounded annual growth rate of 5% | Compounded annual growth rate of 8% | Compounded annual growth rate of 11% or greater |
Components of Executive Compensation
| (1) Does not give effect to the increase or decrease in the number of shares subject to the award as a result of the peer group adjustment. |
Components of Executive Compensation
The RSUs granted during the three years ended December 31, 2023 are, as of such date, at the 24.4% level (excluding the impact of the peer group adjustment), of the full payout of the objectives at which the RSUs vest. See Note 9 of our consolidated financial statements included in our Annual Report and “— Grant of Plan Based Awards During 2023” for a more extensive description of the metrics applicable to the 2023 Performance Plan. We do not have a formal policy with respect to whether equity compensation should be paid in the form of stock options, restricted stock or RSUs. We generally grant on an annual basis, restricted stock awards which vest after five years of service and RSUs that vest after three years subject to the satisfaction of market and/or performance conditions. The compensation committee generally believes restricted stock awards and RSUs are more effective than options in achieving our compensation objectives. Restricted stock has a greater retention value than options because of the five-year cliff vesting requirement and because before vesting, dividends are paid on restricted stock as an additional element of compensation. Executive officers also realize value upon the vesting of the restricted stock, with the value potentially increasing during the five-year vesting period if our stock price increases. RSUs provide an additional incentive component to equity based awards in that the units only vest if, and to the extent, performance or market conditions are satisfied. Restricted stock and RSUs align the interests of our officers with our stockholders and, because fewer shares are normally awarded than in connection with the grant of options, they are potentially less dilutive than option grants. Generally, our grants of restricted stock are made in January of each year in recognition of services provided for the prior year and the RSUs are granted in June/July of each year. We do not have a formal policy on timing these grants in connection with the release of material non-public information and in view of, among other things, the three-year and five-year cliff vesting requirements with respect to RSUs and restricted stock awards, respectively, we do not believe such a formal policy is necessary. Executive Benefits and Perquisites We provide our executive officers and our employees with a competitive benefits and perquisites program. For 2023, the executive benefits and perquisites we provided to executive officers generally accounted for a small percentage of the compensation provided by, or allocated to, us for our executive officers. In addition to the benefits and perquisites provided to all our full-time employees, we provided to certain of our full-time executive officers an automobile allowance (including payments for automobile maintenance and repairs), the payment of college tuition expense and the payment of premiums for additional disability insurance and/or long-term care insurance. The cost of the executive benefits and perquisites provided to our part-time executive officers, which benefits are similar to those provided to our full-time executive officers, is allocated among us and the other entities pursuant to the shared services agreement. Employment and Severance Agreements; Post-Employment Benefits; Change of Control None of our named executive officers has employment or severance agreements with us. They are “at will” employees who serve at the pleasure of our Board. We do not provide for any post-employment benefits to our named executive officers other than their entitlement to the benefits payable pursuant to our defined contribution pension plan and, as described below and under “ — Potential Payments Upon Termination or Change-in-Control,” the accelerated vesting of our restricted stock awards and RSUs. Set forth below is a summary of the accelerated vesting provisions with respect to our RSUs and restricted stock awards: Accelerated Vesting of RSUs RSUs Granted in 2022 and 2023 Upon the occurrence of a:
Components of Executive Compensation
| • | DDR Event (as described below), these RSUs vest proportionally (i.e., if the participant retires one-year into the three-year performance cycle, they only get 1/3 of the award) if and to the extent the performance metrics are met at the end of the three-year cycle, and |
Components of Executive Compensation
| • | Change of control, these RSUs vest proportionately (based on the time elapsed) if the change takes place during the first half of the performance cycle and thereafter, vest in full. |
Components of Executive Compensation
| • | change of control, these RSUs will vest to the extent the applicable as adjusted market and/or performance conditions have been met. |
Policy Prohibiting Hedging of Our Securities
| • | engaging in any transaction in securities where a reasonable investor would conclude that such transaction is for short-term gain or is speculative, and |
Clawbacks
| • | if an executive officer’s relationship with us is terminated for cause (e.g., insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform such person’s duties and responsibilities and other misconduct of any kind, as determined by the compensation committee) then (i) all options (except to the extent exercised) immediately terminate and (ii) the officer’s rights to all restricted stock, RSUs and performance share awards (except to the extent such awards have vested) are forfeited immediately; and |
Analysis
Analysis Base Salary, Bonus and Equity Awards Full-Time Executive Officers In accordance with the compensation setting process described above, base salary, cash bonuses and equity awards were approved for our full-time named executive officers for the periods indicated:
Analysis
| | Base Salary | | | Cash Bonus | | | Equity Grants | | | | | 2023 ($) | 2022 ($) | % Change | 2023 ($)(2) | 2022 ($)(2) | % Change | 2023 ($)(3) | 2022 ($)(4) | Change | | Jeffrey A. Gould(1) | 931,109 | 886,471 | 5.0 | 300,000 | 300,000 | — | 576,106 | 641,607 | (10.2) | | Mitchell Gould(1) | 467,224 | 467,851 | — | 55,100 | 55,100 | — | 322,667 | 347,025 | (7.2) | | George Zweier(1) | 361,294 | 344,236 | 5.5 | 37,900 | 37,900 | — | 315,247 | 337,435 | (6.6) |
Analysis
| (2) Reflects the cash bonuses paid in recognition of performance for such year, which are paid in the following year. |
Analysis
| (3) Represents the aggregate grant date fair value of the (i) shares of restricted stock granted in 2024 for 2023 performance and (ii) RSUs granted in 2023. Messrs. J. Gould, M. Gould and G. Zweier were granted (i) in 2024, for 2023 performance, 14,068, 8,500 and 8,900 shares of restricted stock, respectively, and (ii) in 2023, without giving effect to the additional shares potentially issuable pursuant to the peer group adjustment, RSU’s to acquire 21,000, 10,500 and 10,500 shares of common stock, respectively. |
Analysis
| (4) Represents the aggregate grant date fair value of shares of the (i) restricted stock granted in 2023 for 2022 performance and (ii) RSUs granted in 2022. Messrs. J. Gould, M. Gould and G. Zweier’s were granted (i) in 2023, for 2022 performance, 14,206, 8,900 and 8,400 shares of restricted stock, respectively, and (ii) in 2022, without giving effect to the additional shares potentially issuable pursuant to the peer group adjustment, RSU’s to acquire 21,534, 10,286 and 10,286 shares of common stock, respectively. |
Analysis
In determining 2023 base salaries, the compensation committee determined in late 2022, which determination was subsequently ratified by the board, that increases in base salaries for Messrs. J. Gould and Zweier were appropriate in recognition of their performance in 2022 and as a general cost of living increase. In determining in late 2023, the cash bonuses to be paid in early 2024 to these executive officers (including Mr. Jeffrey A. Gould) for their 2023 performance, the Compensation Committee determined that increases in bonuses (from the bonuses that were provided for performance in 2022) were not needed to further incentivize or reward performance. Part-Time Named Executive Officers David W. Kalish, Senior Vice President, Finance, has overall responsibility for implementation and enforcement of our internal controls, performs oversight and guidance in connection with our annual audit and our quarterly reports, performs oversight and guidance related to tax matters, including REIT compliance, is involved in banking relationships, is a member of our investment and disclosure control and procedures committees and participates in the preparation and review of our press releases and our disclosures under the Exchange Act. Matthew J. Gould, Senior Vice President is a member of our investment committee and as such is involved in analyzing and reviewing operating results of each property in our portfolio and in analyzing, reviewing and approving each of our acquisition, disposition and financing transactions. Long-Term Equity and Equity Incentive Awards We believe that our long-term equity and equity incentive compensation programs, using RSUs that vest after three years subject to the satisfaction of market or performance-based conditions, and restricted stock awards with five-year cliff vesting, provide an appropriate incentive for our executive officers and are a beneficial retention tool. In determining the awards to be granted to the named executive officers, the compensation committee took into account our performance in 2022, the responsibilities and performance of each named executive officer and the committee’s desire to emphasize equity-based awards as a significant component of total compensation for our full-time named executive officers while minimizing stockholder dilution. We believe the cumulative effect of the restricted stock awards and RSUs is not overly dilutive and has created significant incentives for our officers and employees. We intend to continue to award restricted stock and RSUs as we believe such awards (i) align management’s interests and goals with stockholders’ interests and goals and (ii) are an excellent motivator and employee retention tool. Although we granted to our named executive officers approximately the same number of Equity Awards for 2023 as we had in 2022, the grant date fair value of the 2023 awards was less than the grant date fair value of the 2022 awards. However, this decrease did not impact our decision-making process because we place greater emphasis on the quantity of shares awarded rather than their grant date accounting value. We believe this is appropriate because the (i) grant date accounting value may never be realized as these shares vest after several years and with respect to RSUs, only vest to the extent that specified conditions are satisfied and (ii) anticipated dividends (including dividend equivalent rights), payable with respect to these awards are a more important retention feature than the unknown market value of the shares several years in the future. Perquisites The perquisites we provide to our executive officers, which are in addition to the benefits we provide to all our employees, generally account for a small percentage of the compensation paid by us to or allocated to us for our executive officers. We believe that such perquisites are appropriate. Fees for Services The aggregate fee paid to seven individuals for Services in 2023 was $1,541,188. See “Certain Relationships and Related Transactions.”
Summary Compensation Table
Summary Compensation Table The following table discloses the compensation paid and accrued for services rendered in all capacities to us for our named executive officers for each of the three years ended December 31, 2023:
Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1)(2) | Bonus ($)(1)(3) | Stock Awards ($)(4) | All Other Compensation ($)(5)(6) | Total ($) | | Jeffrey A. Gould President and CEO | 2023 | 931,109 | 300,000 | 587,616 | 64,166(7) | 1,882,891 | | | 2022 | 886,471 | 300,000 | 672,629 | 65,134 | 1,924,234 | | | 2021 | 864,004 | 200,000 | 778,898 | 148,386 | 1,991,288 | | George Zweier Vice President and CFO | 2023 | 361,294 | 37,900 | 318,684 | 55,055(8) | 772,933 | | | 2022 | 344,236 | 37,900 | 354,823 | 51,305 | 788,264 | | | 2021 | 321,004 | 35,200 | 424,714 | 87,521 | 868,439 | | Mitchell Gould Executive Vice President | 2023 | 467,224 | 55,100 | 328,274 | 120,947(9) | 971,545 | | | 2022 | 467,851 | 55,100 | 365,448 | 115,275 | 1,003,674 | | | 2021 | 436,296 | 51,255 | 446,647 | 212,053 | 1,146,251 | | David W. Kalish Senior Vice President, Finance | 2023 | 272,629 | — | 388,982 | 261,473(10) | 923,084 | | | 2022 | 249,026 | — | 441,976 | 262,227 | 953,229 | | | 2021 | 256,827 | — | 600,212 | 323,215 | 1,180,254 | | Matthew J. Gould Senior Vice President | 2023 | — | — | 587,616 | 278,020(11) | 865,636 | | | 2022 | — | — | 672,629 | 255,256 | 927,885 | | | 2021 | — | — | 778,898 | 314,788 | 1,093,686 |
Summary Compensation Table
| (1) The salary and bonus for each of Jeffrey A. Gould, George Zweier and Mitchell Gould is paid directly by us. David W. Kalish and Matthew Gould do not receive salary or bonus directly from us but receive an annual salary and bonus from Gould Investors and related companies; a portion of Mr. Kalish’s salary and bonus are allocated to us pursuant to the shared services agreement. See “—Compensation Setting Process—Part-time Executive Officers.” The amount of salary and bonus that is allocated to us is set forth under the “Salary” column in the Summary Compensation Table. See “Certain Relationships and Related Transactions” for a discussion of additional compensation paid to Messrs. Jeffrey A. Gould, Kalish and Matthew J. Gould from other entities with which we are affiliated or for which there is common ownership. |
Summary Compensation Table
| (2) The annual base salaries in 2024 for each of Jeffrey A. Gould, George Zweier and Mitchell Gould are $970,169, $382,622 and $467,224, respectively. |
Summary Compensation Table
| (3) The table sets forth the year in which the bonus was earned, not the year it was paid. The bonus for 2023, 2022 and 2021 reflects our performance and the performance of our named executive officers for such years and was paid in January 2024, 2023 and 2022, respectively. |
Summary Compensation Table
| (4) Represents restricted stock and RSUs granted in 2023, 2022, and 2021 at the grant date fair value of such awards calculated in accordance with Item 402 of Regulation S-K and ASC Topic 718. Assumes that the maximum number of shares subject to RSUs will vest and does not give effect to the additional shares potentially issuable pursuant to the peer group adjustment. These amounts do not correspond to the actual values that will be realized by the named executives. Grant date fair value assumptions are consistent with those disclosed in Note 10 — Stockholders’ Equity, in the consolidated financial statements included in our Annual Report. See “— Grant of Plan Based Awards During 2023” for additional information. On January 5, 2024, we granted Jeffrey A. Gould, George Zweier, Mitchell Gould, David W. Kalish and Matthew J. Gould, 14,068, 8,900, 8,500, 8,619 and 14,068 shares of restricted stock, respectively, with a grant date fair value of $18.55 per share. |
Summary Compensation Table
| (5) We maintain a tax qualified defined contribution plan for all of our full-time officers and full and part-time employees, and entities which are parties with us to a shared services agreement (including Gould Investors) maintain substantially similar defined contribution plans for their officers and employees. We make an annual contribution to the plan for each officer and employee whose base salary is paid directly by us (and entities which are parties to the shared services agreement make annual contributions to their respective plans for their respective employees, which amounts are allocated to the parties to the shared service agreement in accordance with its terms) equal to 15% of such person’s annual earnings, not to exceed $49,500, for any person in 2023. The estimated amount payable as of December 31, 2023 to Jeffrey A. Gould, George Zweier and Mitchell Gould pursuant to this plan upon termination of their employment is $4.0 million, $1.7 million, and $2.0 million, respectively. The method of payment upon termination of employment is determined solely by the participant who may elect a lump sum payment, the purchase of an annuity or a rollover into an individual retirement account. |
Summary Compensation Table
| (6) Except with respect to dividend equivalents paid in 2021 upon the vesting of RSUs granted in 2016, excludes dividends and dividend equivalents paid or payable on stock and similar awards as such amounts are reflected in the grant date fair value of such awards. |
Summary Compensation Table
| (7) Includes our contribution of $49,500 paid for his benefit to our defined contribution plan and perquisites totaling $14,666, of which $3,110 represents an automobile allowance, $4,236 represents a premium paid for additional disability insurance, and $7,320 represents a premium paid for long-term care insurance. |
Summary Compensation Table
| (8) Includes our contribution of $49,500, paid for his benefit to our defined contribution plan and a $5,555, automobile allowance. |
Summary Compensation Table
| (9) Includes an education benefit of $63,730, our contribution of $49,500 paid for his benefit to our defined contribution plan and a $7,717 automobile allowance. |
Summary Compensation Table
| (10) Includes $243,100 for the Services, our contribution of $11,958 paid for his benefit to the Gould Investors defined contribution plan, |
Summary Compensation Table
and perquisites of $6,415, of which $1,921, and $4,494, represent our share of the amounts incurred by Gould Investors for insurance benefits and an automobile allowance, respectively. The amounts reflected as contributions to the defined contribution plan and as perquisites are allocated to us pursuant to the shared services agreement. In 2024 he is to be paid $257,687 for the Services.
Summary Compensation Table
| (11) Includes $278,020 for the Services. In 2024, he is to be paid $291,919 for the Services. |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The table below discloses the grants of plan-based awards during 2023 to our named executive officers. The restricted stock awards, which are referred to in such table as “RS”, and the restricted stock units, which are referred to in the table as “RSUs”, were issued pursuant to our 2022 Incentive Plan. Restricted Stock Vesting of the restricted stock occurs, with certain exceptions, subject to the continuation of an employment, consulting or similar relationship with us through 2028. Upon vesting, each restricted stock award entitles the recipient to one share of common stock. Holders of restricted stock are entitled to the dividends paid on, and to vote, their shares. RSUs Vesting of the RSUs occurs, with certain exceptions, subject to the continuation of an employment, consulting or similar relationship with us through 2026, upon the satisfaction of benchmarks related to the compounded annual growth rate from 2023 through 2026 in (i) total stockholder return (as calculated pursuant to the applicable award agreement), which awards are referred to in the table below as “RSU-TSR” and (ii) adjusted funds from operations (as presented in our filings with the SEC), which awards are referred to in the table below as “RSU-AFFO.” Generally, we compute adjusted funds from operations, or AFFO, by adjusting funds from operations, or FFO (as FFO is calculated in accordance with the “White Paper on Funds From Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT's related guidance), for loss on extinguishment of debt, our straight-line rent accruals, restricted stock and RSU compensation expense, fair value adjustment of mortgage debt, gain on insurance recovery, insurance recovery from casualty loss and deferred mortgage and debt costs (including, in each case as applicable, from our share from our unconsolidated joint ventures). The RSU – TSR awards are subject to an increase or decrease, which we refer to as the peer group adjustment, depending on our performance relative to a peer group (i.e., the FTSE Nareit Equity Apartment Index, excluding companies whose primary focus is the provision of housing for college/graduate students). Specifically, if the compounded annual growth rate in total stockholder return during the performance cycle is in the (i) top quartile of our peer group, the recipient is entitled to additional RSUs equal to 25% of the RSU-TSR awards that vest at the applicable threshold, target and maximum levels and (ii) in the bottom quartile of the peer group, the recipient will forfeit 25% of the RSU-TSR awards that vest at the applicable threshold, target and maximum levels. The additional shares potentially issuable pursuant to the peer group adjustment are not reflected in the table below. Each RSU is coupled with a dividend equivalent right entitling the holder to an amount in cash equal to the aggregate amount of cash dividends that would have been paid in respect of the shares underlying such RSUs, if and to the extent such RSU vest, had such shares been outstanding during the performance cycle applicable to such RSU.
Grants of Plan-Based Awards
| | Estimated Future Payouts under Equity Incentive Plan Awards:(1)(#) | | | | | | | | Name | Grant Date | Grant Type | Threshold(1) | Target(2) | Maximum(3) | All Other Stock Awards: Number of Shares of Stocks or Units (#) | Grant Date Fair Value of Stock Awards ($)(4) | | Jeffrey A. Gould | 1/5/23 | RS | — | — | — | 14,206 | 272,471 | | | 6/27/23 | RSU-TSR | 2,625 | 5,250 | 10,500 | — | 108,610 | | | 6/27/23 | RSU-AFFO | 2,625 | 5,250 | 10,500 | — | 206,535 |
Grants of Plan-Based Awards
| | Estimated Future Payouts under Equity Incentive Plan Awards:(1)(#) | | | | | | | | Name | Grant Date | Grant Type | Threshold(1) | Target(2) | Maximum(3) | All Other Stock Awards: Number of Shares of Stocks or Units (#) | Grant Date Fair Value of Stock Awards ($)(4) | | George Zweier | 1/5/23 | RS | — | — | — | 8,400 | 161,112 | | | 6/27/23 | RSU-TSR | 1,313 | 2,625 | 5,250 | — | 54,305 | | | 6/27/23 | RSU-AFFO | 1,313 | 2,625 | 5,250 | — | 103,268 | | Mitchell Gould | 1/5/23 | RS | — | — | — | 8,900 | 170,702 | | | 6/27/23 | RSU-TSR | 1,313 | 2,625 | 5,250 | — | 54,305 | | | 6/27/23 | RSU-AFFO | 1,313 | 2,625 | 5,250 | — | 113,268 | | David W. Kalish | 1/5/23 | RS | — | — | — | 8,153 | 156,375 | | | 6/27/23 | RSU-TSR | 1,938 | 3,875 | 7,750 | — | 80,164 | | | 6/27/23 | RSU-AFFO | 1,938 | 3,875 | 7,750 | — | 152,443 | | Matthew J. Gould | 1/5/23 | RS | — | — | — | 14,206 | 272,471 | | | 6/27/23 | RSU-TSR | 2,625 | 5,250 | 10,500 | — | 108,610 | | | 6/27/23 | RSU-AFFO | 2,625 | 5,250 | 10,500 | — | 206,535 |
Grants of Plan-Based Awards
| (1) To achieve the threshold award, a compounded annual growth rate of 5% and 4% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
Grants of Plan-Based Awards
| (2) To achieve the target award, a compounded annual growth rate of 8% and 6% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
Grants of Plan-Based Awards
| (3) To achieve the maximum award, a compounded annual growth rate of 11% and 8% is required during the Performance Cycle with respect to the RSU-TSR awards and RSU-AFFO awards, respectively. |
Grants of Plan-Based Awards
| (4) The per share grant date fair value of the: (a) restricted stock is $19.18, and (b) RSU – TSR and RSU – AFFO awards are $10.34 and $19.67, respectively. These amounts do not correspond to the actual values that will be realized by the executives. The aggregate grant date fair value for the RSU-AFFO awards gives effect to management’s assessment of the probable outcome as to whether, and the extent to which, the RSU-AFFOs will vest. The values for the RSUs assume that the maximum number of such units vest. |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table discloses the number and value (based on the closing price per common share of common stock of $18.59 on December 29, 2023) of the outstanding equity awards at December 31, 2023 for our named executive officers:
Outstanding Equity Awards at Fiscal Year-End
| | Stock Awards | | | | | Name | Number of Shares or Units of Stock that Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(1) | Equity Incentive Plan Awards: Market or Payout Value of Share, That Have Not Vested ($)(1) | | Jeffrey A. Gould(2) | 86,302 | 1,604,354 | 69,824 | 1,298,033 | | George Zweier(3) | 47,850 | 889,532 | 34,956 | 649,832 | | Mitchell Gould(4) | 56,150 | 1,043,829 | 34,956 | 649,832 | | David W. Kalish(5) | 51,809 | 963,129 | 53,215 | 989,262 | | Matthew J. Gould(6) | 86,302 | 1,604,354 | 69,824 | 1,298,033 |
Outstanding Equity Awards at Fiscal Year-End
| (1) Reflects the maximum number of shares subject to RSUs (including the additional shares potentially issuable as a result of the peer group adjustment) scheduled to vest in 2024, 2025 and 2026 upon the satisfaction of market and/or performance based conditions. |
Outstanding Equity Awards at Fiscal Year-End
| (2) In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 14,374, 14,320, 14,320, 14,800, 14,282 and 14,206 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 21,974 shares, 24,226 shares and 23,625 shares, respectively, subject to RSUs are scheduled to vest. |
Outstanding Equity Awards at Fiscal Year-End
| (3) In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 7,300, 7,500, 8,250, 8,000, 8,400 and 8,400 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares, 11,572 shares and 11,813 shares, respectively, subject to RSUs are scheduled to vest. |
Outstanding Equity Awards at Fiscal Year-End
| (4) In January 2024, 2025, 2026, June 2026, and January 2027 and 2028 restricted stock awards with respect to 10,800, 10,000, 8,750, 8,800 8,900 and 8,900 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 11,572 shares, 11,572 shares and 11,813 shares, respectively, subject to RSUs are scheduled to vest. |
Outstanding Equity Awards at Fiscal Year-End
| (5) In January 2024, 2025, 2026, June 2026, and January 2027 and 2028, restricted stock awards with respect to 7,000, 7,421, 7,864, 13,400, 7,971 and 8,153 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 17,888 shares, 17,890 shares and 17,438 shares, respectively, subject to RSUs are scheduled to vest. |
Outstanding Equity Awards at Fiscal Year-End
| (6) In January 2024, 2025, 2026, June 2026, and January 2027 and January 2028, restricted stock awards with respect to 14,474, 14,320, 14,320, 14,800, 14,282 and 14,206 shares, respectively, are scheduled to vest. In March 2024, June 2025 and June 2026, subject to the satisfaction of specified conditions, a maximum (including the peer group adjustment) of 21,974 shares, 24,226 shares and 23,625 shares, respectively, subject to RSUs are scheduled to vest. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table discloses information with respect to the shares of restricted stock that vested in 2023 ($18.78 per share on March 20, 2023):
Option Exercises and Stock Vested
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Jeffrey A. Gould | 13,225 | 248,365 | | George Zweier | 7,000 | 131,460 | | Mitchell Gould | 10,500 | 197,190 | | David W. Kalish | 7,163 | 134,521 | | Matthew J. Gould | 13,225 | 248,365 |
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination or Change-in-Control We do not provide for any post-employment benefits to our named executive officers other than their entitlement to the benefits payable pursuant to our defined contribution pension plan and the accelerated vesting of our restricted stock awards and RSUs as a result of death, disability, retirement, or a change of control. See “ — Employment and Severance Agreements; Post Employment Benefits; Change of Control.” The following table sets forth the value (based on the closing price of our stock on December 29, 2023 of $18.59 per share) of equity awards held by our named executive officers that would have vested upon a DDR Event or a change in control as of December 31:
Potential Payments Upon Termination or Change-in-Control
| | Upon Death, Disability or Retirement | | Upon a Change of Control | | | Name | Restricted Stock ($) | RSUs ($)(2) | Restricted Stock ($) | RSUs ($)(2) | | Jeffrey A. Gould | 1,604,354 | 266,536 | 1,604,354 | 314,199 | | George Zweier | 889,532 | 135,503 | 889,532 | 159,739 | | Mitchell Gould | 1,043,829 | 135,503 | 1,043,829 | 159,739 | | David W. Kalish(1) | 963,129 | 209,385 | 963,129 | 245,709 | | Matthew J. Gould | 1,604,354 | 266,536 | 1,604,354 | 314,199 |
Potential Payments Upon Termination or Change-in-Control
| (1) Because Mr. Kalish is over 65 and has satisfied the period of service requirement, upon his retirement (i) a pro rata portion of his RSUs (A) granted in 2021 would vest upon his retirement as and to the extent adjusted performance conditions were satisfied as of his retirement, (B) granted in 2022 and 2023 would vest in 2025 and 2026, respectively, as and to the extent the performance conditions are satisfied as of the end of the measurement period and (ii) all of the restricted stock would vest. The market value of his restricted stock and RSUs are reflected in the applicable column. |
Potential Payments Upon Termination or Change-in-Control
| (2) Assumes that the target performance criteria is achieved and that there is no peer group adjustment. See “—Components of Executive Compensation—Long-Term Equity and Long-Term Equity Incentive Awards” and “—Outstanding Equity Awards at Fiscal Year End” and note 9 of our consolidated financial statements included in the Annual Report. |
Potential Payments Upon Termination or Change-in-Control
Our incentive plans generally provide, among other things, that if any payment or benefit that a participant in such plan would otherwise receive from us constitutes a “parachute payment” within the meaning of Section 280G of the Code and as a result would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such payment will either (i) be reduced to an amount equal to the largest portion of such payment that would result in no portion of such payment (after reduction) being subject to the Excise Tax or (ii) not be reduced, whichever approach, after taking into account all applicable taxes (including the Excise Tax), results in such participant’s receipt, on an after-tax basis, of the greatest amount of such payment.
PAY RATIO
PAY RATIO We provide below a reasonable estimate of the relationship of the annual total compensation of Jeffrey A. Gould, our Chief Executive Officer and President, to the median annual total compensation of our employees (other than the CEO). For 2023:
PAY RATIO
| • | the annual total compensation of our CEO, as reported in the Summary Compensation Table, was $1,882,891; |
PAY RATIO
| • | the median annual total compensation of all our employees (other than our CEO) was $466,816; and |
PAY RATIO
| • | our CEO’s annual total compensation was 4.03 times that of the median of the annual total compensation of all our employees (other than our CEO). |
PAY RATIO
In calculating this estimate, we included as our employees as of the December 31, 2023 measurement date, only those individuals to whom we are required by the Internal Revenue Code of 1986, as amended, to issue a Form W-2. We identified our median employee by calculating our employees’ total annual compensation in the same manner that the CEO’s total annual compensation is calculated for the Summary Compensation Table. Companies adopt a variety of methodologies and apply various assumptions in presenting this ratio. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio we report.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table sets forth information concerning the compensation of Jeffrey A. Gould, our principal executive officer (“PEO”), and our other named executive officers (i.e., Mitchell Gould, David W. Kalish, Matthew J. Gould and George Zweier, collectively referred to as the “NEOs”) and our financial and market performance for each indicated year:
PAY VERSUS PERFORMANCE
| Year | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO(1) ($) | Average Summary Compensation Table Total for NEOs ($) | Average Compensation Actually Paid to NEOs(2) ($) | Value of Initial Fixed $100 Investment Based On: | Net Income (millions) | | | | | | | Total Stockholder Return ($) | | | 2023 | 1,882,891 | 1,319,498 | 883,300 | 563,173 | 142.01 | 3.9 | | 2022 | 1,924,234 | 1,471,371 | 918,263 | 598,520 | 142.11 | 50.0 | | 2021 | 1,991,288 | 2,817,458 | 1,072,158 | 1,648,934 | 165.76 | 29.1 |
PAY VERSUS PERFORMANCE
| (1) See Note 6 to the Summary Compensation Table for information regarding the treatment of dividends and dividend equivalents payable on stock and similar awards. |
PAY VERSUS PERFORMANCE
| (2) Represents the amount of “compensation actually paid” to Jeffrey A. Gould, as computed in accordance with SEC requirements. Such amounts do not reflect the actual amount of compensation earned by or paid to Mr. Gould. See table immediately below for a reconciliation showing how “compensation actually paid” was calculated. |
PAY VERSUS PERFORMANCE
| (3) Represents the average amount of “compensation actually paid” to the NEOs as a group as computed in accordance with SEC requirements. Such amounts do not reflect the actual average amount of compensation earned by or paid to these NEOs as a group. See “– Compensation of NEOs.” |
PAY VERSUS PERFORMANCE
In accordance with SEC requirements, the following adjustments were made to Jeffrey A. Gould’s total compensation for the applicable year to determine the “compensation actually paid”:
PAY VERSUS PERFORMANCE
| Year | Reported Summary Compensation Table Total for PEO ($) | Reported Value of Equity Awards ($) | Equity Award Adjustments ($) | Compensation Actually Paid to PEO ($) | | 2023 | 1,882,891 | (587,616) | 24,223 | 1,319,498 | | 2022 | 1,924,234 | (672,629) | 219,766 | 1,471,371 | | 2021 | 1,991,288 | (778,898) | 1,605,068 | 2,817,458 |
PAY VERSUS PERFORMANCE
The table below sets forth the manner in which Equity Award Adjustments in the immediately preceding table were calculated (see footnotes (1) – (6) below for the assumptions made in the valuations that differ materially from those disclosed as of the grant date of such equity awards:
PAY VERSUS PERFORMANCE
| Year | Year End Fair Value of Equity Awards ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Total Equity Award Adjustments ($) | | 2023 | 386,940(1) | (351,343)(2) | (11,374) | 24,223 | | 2022 | 617,198(3) | (388,124)(4) | (9,308) | 219,766 | | 2021 | 1,148,488(5) | 483,705 | (27,125)(6) | 1,605,812 |
PAY VERSUS PERFORMANCE
| (1) With respect to the 2023 RSU-AFFO awards, assumes that none of such awards would have vested at year-end 2023. |
PAY VERSUS PERFORMANCE
| (2) With respect to the (A) 2022 RSU-AFFO awards, assumes that as of year-end (i) 2023, none of such awards would have vested and (ii) 2022, 99.65% of such awards would have vested and (B) the 2021 RSU-AFFO awards, assumes that 100% of such awards would have vested at the 2023 and 2022 year-end. |
PAY VERSUS PERFORMANCE
| (3) With respect to 2022 RSU-AFFO awards, assumes that 99.65 % of such awards will vest at year-end 2023. |
PAY VERSUS PERFORMANCE
| (4) With respect to the 2021 RSU-AFFO awards, assumes that 100% of such awards would vest at each of year-end 2023 and 2022. |
PAY VERSUS PERFORMANCE
| (5) With respect to 2021 RSU-AFFO awards, assumes that 100 % of such awards would vest at year-end 2023. |
PAY VERSUS PERFORMANCE
| (6) With respect to the 2016 RSU-AFFO awards, assumed that none of such awards would vest at year-end 2021 - none of such awards vested. |
PAY VERSUS PERFORMANCE
Compensation of NEOs In accordance with SEC requirements, the following adjustments were made to average total compensation for the NEOs for each year to determine the “compensation actually paid” to this group:
PAY VERSUS PERFORMANCE
| Year | Average Reported Summary Compensation Table Total for NEOs ($) | Average Reported Value of Equity Awards ($) | Total Average Equity Award Adjustments ($)(1) | Average Compensation Actually Paid to NEOs ($) | | 2023 | 883,300 | (341,054) | 20,927 | 563,173 | | 2022 | 918,263 | (458,719) | 138,976 | 598,520 | | 2021 | 1,072,158 | (562,618) | 1,139,394 | 1,648,934 |
PAY VERSUS PERFORMANCE
| (1) Although the vesting of David Kalish’s restricted stock would accelerate upon his retirement, as he has not retired, and consistent with the disclosure elsewhere in this proxy statement (except as otherwise indicated), we have not accelerated the vesting of such awards. |
PAY VERSUS PERFORMANCE
The table below sets forth the manner in which Average Equity Award Adjustments in the immediately preceding table were calculated:
PAY VERSUS PERFORMANCE
| Year | Average Year End Fair Value of Equity Awards ($) | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Total Average Equity Award Adjustments ($) | | 2023 | 268,410 | (239,337) | (8,146) | 20,927 | | 2022 | 420,955 | (275,059) | (6,920) | 138,976 | | 2021 | 818,041 | 341,905 | (20,551) | 1,139,394 |
PAY VERSUS PERFORMANCE
Relationship between TSR and Net Income to Compensation Actually Paid The following charts show the relationship of the compensation actually paid to our CEO and the average compensation actually paid to our NEOs to our cumulative TSR and net income for the periods indicated (TSR amounts reported in the graph assume an initial fixed investment of $100 and that all dividends, if any, were reinvested):