DEF 14A of Welltower Inc.
Filed Apr 12, 2023 · FY20220001193125-23-098475
SUMMARY OF BOARD SKILLS AND DIVERSITY
SUMMARY OF BOARD SKILLS AND DIVERSITY We believe our directors have an effective mix of backgrounds, diversity, experience, knowledge, and skills. The table below provides a summary of certain collective competencies and attributes of the director nominees. We look to each director to be knowledgeable in all of these areas, and the absence of an indicator for a particular item does not mean a director is less able to contribute to the Board’s decision-making process or that the director does not possess that skill or experience. Rather, the indicator represents that the item is a core competency that the director brings to the Board. The table does not encompass all of any director’s skills or experience.
SUMMARY OF BOARD SKILLS AND DIVERSITY
| Category | Profile / Skills | | Kenneth J. Bacon | Karen B. DeSalvo | Philip L. Hawkins | Dennis G. Lopez | Shankh Mitra | Ade J. Patton | Diana W. Reid | Sergio D. Rivera | Johnese M. Spisso | Kathryn M. Sullivan | | | Male | | ● | | ● | ● | ● | ● | | ● | | | | | Female | | | ● | | | | | ● | | ● | ● | | | Asian | | | | | | ● | | | | | | | | Black or African American | | ● | | | | | ● | | | | | | | Hispanic or Latino | | | | | ● | | | | ● | | | | | Native Hawaiian or Other Pacific Islander | | | | | | | | | | | | | | Two or more Races | | | | | | | | | | | | | | White | | | ● | ● | | | | ● | | ● | ● | | | Banking / Finance / Accounting | | ● | | ● | ● | ● | ● | ● | ● | | ● | | | Financial Expert | | ● | | ● | ● | ● | ● | ● | ● | ● | ● | | | Health Systems | | | ● | | | ● | | | | ● | ● | | | Large Cap Public Companies | | ● | | ● | ● | ● | ● | ● | ● | | | | | Operations | | | | ● | ● | | ● | | ● | ● | ● | | | Outpatient Medical | | | ● | | | ● | | | | ● | | | | REITs | | ● | | ● | ● | ● | | ● | ● | ● | | | | Real Estate | | ● | | ● | ● | ● | | ● | ● | ● | | | | Seniors Housing | | | | | ● | ● | | ● | | | | | | New or Existing Markets | | | | ● | ● | ● | ● | ● | ● | | | | | Cybersecurity / Information Technology | | | ● | | | | ● | ● | ● | ● | ● | | | Enterprise Risk Management | | ● | ● | | ● | ● | ● | ● | | ● | ● | | | Government / Public Policy | | ● | ● | | | | | ● | | ● | | | | Innovation Technology / Data | | | ● | | | ● | ● | | | ● | | | | International | | ● | | ● | ● | | ● | | ● | | | | | Leadership Development / Succession | | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | | | Retail / Institutional Investor Relations | | ● | | ● | ● | ● | ● | ● | ● | | | | | Strategy, Marketing, PR, Branding | | ● | | ● | ● | | ● | | ● | ● | ● | | | | Environmental | | ● | | | ● | | ● | ● | ● | | | | | Social | ● | ● | | | | | ● | ● | ● | ● | | | | Governance | ● | ● | ● | | | ● | ● | ● | ● | ● |
SUMMARY OF BOARD SKILLS AND DIVERSITY
| SHANKH MITRA, Chief Executive Officer | | | | Age 42 Director since: 2020 Welltower Committees: • Executive | EDUCATION: • BA – Engineering, Jadavpur University • MBA – Columbia Business School | | | | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Public Storage | | | | KEY SKILLS AND EXPERIENCE: Mr. Mitra has served as Welltower’s Chief Executive Officer since October 2020. He served as Welltower’s Chief Investment Officer from August 2018 to January 2023 and Vice Chair – Chief Operating Officer and Chief Investment Officer from April 2020 to October 2020. From January 2018 to August 2018, he served as Welltower’s Senior Vice President – Investments and, from January 2016 to January 2018, Mr. Mitra served as Welltower’s Senior Vice President – Finance & Investments. Prior to joining Welltower, Mr. Mitra served as Portfolio Manager, Real Estate Securities at Millennium Management, LLC from July 2013 to October 2015, as a Senior Analyst at Citadel Investment Group from April 2012 to June 2013, and as a Senior Analyst at Fidelity Investments from 2009 to 2012. Among other qualifications, Mr. Mitra has extensive knowledge of and experience in the real estate industry and capital markets. His day-to-day leadership as Chief Executive Officer provides him with intimate knowledge of all aspects of the Company, including real estate operations, investment activity, and balance sheet management. In addition, Mr. Mitra sets the long-term strategic direction for the Company under the direction of the Board of Directors. He is also responsible for attracting and retaining top talent and for the professional development and advancement of team members. | | | KENNETH J. BACON, Chair & Independent Director | | | | Age 68 Director since: 2016 Welltower Committees: • Executive (Chair) | EDUCATION: • BA – Anthropology, Stanford University • MSc – International Relations, London School of Economics • MBA – Finance & Strategy, Harvard Business School | | | | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Ally Financial Inc. (Risk Committee Chair) • Arbor Realty Trust • Comcast Corporation (Governance and Directors Nominating Committee Chair) | FORMER PUBLIC COMPANY DIRECTORSHIPS: • Forest City Realty Trust, Inc. | | | KEY SKILLS AND EXPERIENCE: Mr. Bacon has served as Welltower’s Chair of the Board since October 2020. Mr. Bacon is a co-founder of RailField Realty Partners (a financial advisory and asset management firm) and has served as RailField’s managing partner since 2012. Prior to launching RailField, Mr. Bacon spent 19 years at Fannie Mae, most recently serving as Executive Vice President of the multifamily mortgage business from July 2005 to March 2012. Among other qualifications, Mr. Bacon’s extensive experience in financial services, real estate investment, government affairs and housing make him a valuable asset to the Board. | |
SUMMARY OF BOARD SKILLS AND DIVERSITY
| KAREN B. DESALVO, Independent Director | | | | Age 57 Director since: 2018 Welltower Committees: • Investment • Nominating/ Corporate Governance | EDUCATION: • BA – Biology and Political Science, Suffolk University • MD – Tulane University School of Medicine • MPH – Tulane University School of Public Health • MSc – Harvard T.H. Chan School of Public Health | | | | | FORMER PUBLIC COMPANY DIRECTORSHIPS: • Humana Inc. | | | KEY SKILLS AND EXPERIENCE: Dr. DeSalvo is a physician executive who has served as the Chief Health Officer of Google since December 2019. She is on the Council of the National Academy of Medicine. From 2018-2019, she served as professor of medicine and population health at the University of Texas at Austin Dell Medical School and co-lead of the National Alliance to Impact the Social Determinants of Health with former HHS Secretary Michael O. Leavitt. From 2014 to 2017, she served as Acting Assistant Secretary for Health at the U.S. Department of Health and Human Services and as National Coordinator for Health Information Technology. From 2011 to 2014, she was Health Commissioner for the City of New Orleans. Prior to that she was Vice Dean for Community Affairs and Health Policy at the Tulane University School of Medicine, where she practiced medicine and led the medical school’s community health programs. She was formerly on the Medicare Payment Advisory Commission and the Board of Directors of Humana. Among other qualifications, Dr. DeSalvo’s experience in medical and public health leadership, health care technology, health care delivery and health care policy make her an important addition to the Board. | | | PHILIP L. HAWKINS, Independent Director | | | | Age 67 Director since: 2020 Welltower Committees: • Compensation (Chair) • Executive • Investment | EDUCATION: • BA – Hamilton College • MBA – University of Chicago | | | | OTHER CURRENT PUBLIC COMPANY DIRECTORSHIPS: • Corporate Office Properties Trust (Investment Committee Chair) | FORMER PUBLIC COMPANY DIRECTORSHIPS: • Prologis, Inc. • DCT Industrial Trust Inc. | | | KEY SKILLS AND EXPERIENCE: Mr. Hawkins has served as a member of the Board of Trustees of Corporate Office Properties Trust (a real estate investment trust that invests in office buildings) since 2014. He also serves as a board member of the following private companies: Link Logistics Real Estate as the Executive Chairman since January 2020, Washington Prime Group Inc. as the Chairman since February 2022, and Pure Industrial since February 2022. He served as a member of the Board of Directors of Prologis, Inc. from August 2018 to January 2020. From October 2006 to August 2018, he served as Chief Executive Officer, President and a member of the Board of Directors of DCT Industrial Trust Inc. (an industrial REIT that owned, acquired, operated and developed logistics related properties) until it merged into Prologis. From 2002 to 2006, Mr. Hawkins served as President and Chief Operating Officer and a member of the Board of Directors of CarrAmerica Realty Corporation. Earlier in his career at CarrAmerica, he served as Chief Operating Officer for four years and Managing Director of Asset Management for two years. Before that, Mr. Hawkins held a series of senior executive positions in real estate investment, development, leasing and management with LaSalle Partners, Ltd. and served on LaSalle’s Board of Directors. Among other qualifications, Mr. Hawkins’ extensive experience in real estate investment, development and operations in both public and private markets make him an important addition to the Board. | |
SUMMARY OF BOARD SKILLS AND DIVERSITY
| DENNIS G. LOPEZ, Independent Director | | | Age 68 Director since: 2021 Welltower Committees: • Compensation • Investment | EDUCATION: • BA – California State University, Long Beach • MBA – Finance and Accounting, University of California | | | KEY SKILLS AND EXPERIENCE: Mr. Lopez has served as the Chief Executive Officer of QuadReal Property Group Ltd. (a global real estate investment, operating and development company) since June 2017. He was Chief Investment Officer of AXA Real Estate Investment Managers (a global real estate investment manager) from 2009 to 2017, and Chief Executive Officer of SUN Real Estate Group (a private equity firm with real estate activities in India and Russia) from 2007 to 2009. Mr. Lopez has had a career of over 30 years in investment banking and real estate investment management, including serving as Global Head of Real Estate at Cambridge Place Investment Management (a London-based hedge fund) for two years and a Managing Director/Head of European Real Estate at JP Morgan in London for seven years. Among other qualifications, Mr. Lopez’s extensive experience in financial investment and services, real estate investment, and international business and investment make him a valuable asset to the Board. | | ADE J. PATTON, Independent Director | | | Age 44 Director since: 2021 Welltower Committees: • Audit • Nominating/ Corporate Governance | EDUCATION: • BA – Government, University of Virginia • MBA – Harvard Business School • JD – Harvard Law School | | | KEY SKILLS AND EXPERIENCE: Mr. Patton has served as Executive Vice President and Chief Financial Officer of HBO/HBO Max/Global DTC at WarnerMedia, LLC (WBD) since August 2020, and previously served as Chief Financial Officer of Turner Sports and Head of Planning and Development at WM News & Sports from April 2019 to August 2020. Before assuming that role, Mr. Patton served as Senior Vice President – Corporate Finance, M&A and GTO of Turner Broadcasting System, Inc. from February 2017 to April 2019, Senior Portfolio Manager at Millennium Management, LLC (an investment management firm) from January 2015 to February 2017, Senior Research Analyst at Citadel LLC (a multinational hedge fund and financial services company) from June 2009 to March 2014, and Research Analyst at Magnetar Capital LLC (a hedge fund) from June 2007 to June 2009. Among other qualifications, Mr. Patton’s extensive experience in financial and investment management and operations make him a valuable asset to the Board. | | DIANA W. REID, Independent Director | | | Age 67 Director since: 2020 Welltower Committees: • Audit • Executive • Nominating/ Corporate Governance (Chair) | EDUCATION: • BS – California State University, Chico • MBA – University of Virginia Darden School of Business | | | KEY SKILLS AND EXPERIENCE: Ms. Reid served as Executive Vice President of The PNC Financial Services Group, Inc. (a bank holding company) and the executive in its commercial real estate business from 2007 to 2019. She was Founding Partner of Beekman Advisors from 2003 to 2007, providing owners of privately-held real estate finance companies with strategic advice and sell-side representation. Earlier in her career, she held various roles in bond trading, capital markets, and financial institutions advisory for 19 years at the global investment bank now known as Credit Suisse. Among other qualifications, Ms. Reid’s extensive experience in real estate banking and capital markets make her an important addition to the Board. |
SUMMARY OF BOARD SKILLS AND DIVERSITY
| SERGIO D. RIVERA, Independent Director | | | Age 60 Director since: 2014 Welltower Committees: • Audit • Executive • Investment (Chair) | EDUCATION: • BA – Finance and International Business, Florida International University • MBA – Florida International University | | | FORMER PUBLIC COMPANY DIRECTORSHIPS: • SeaWorld Entertainment, Inc. • ILG, Inc. | | | KEY SKILLS AND EXPERIENCE: Mr. Rivera served as Chief Executive Officer of SeaWorld Entertainment, Inc. (a leading theme park and entertainment company) from November 2019 to April 2020. He served as President of the Ocean Reef Club (a leading private residential club) from February 2019 to May 2019. Mr. Rivera also served as Chief Executive Officer and President of the Vacation Ownership segment of ILG, Inc. (a hospitality and leisure services company) from 2016 to September 2018. From 1998 to 2016, Mr. Rivera served in a variety of capacities with Starwood Hotels & Resorts Worldwide, Inc., including President of The Americas from 2012 to 2016, and Chief Executive Officer and President of Starwood Vacation Ownership, Inc., formerly a wholly-owned subsidiary of Starwood Hotels & Resorts Worldwide, Inc., from 2007 to 2016. Among other qualifications, Mr. Rivera’s extensive experience in real estate development and investment strategy, corporate finance and accounting, and operating matters relevant to management of complex global businesses with one of the leading hotel and leisure companies in the world provides valuable insight to the Board. | | JOHNESE M. SPISSO, Independent Director | | | Age 62 Director since: 2018 Welltower Committees: • Compensation • Nominating/ Corporate Governance | EDUCATION: • BS – Health Science, Chapman College • MPA – University of San Francisco | | | FORMER PUBLIC COMPANY DIRECTORSHIPS: • Douglas Emmett, Inc. | | | KEY SKILLS AND EXPERIENCE: Ms. Spisso has served as the President of UCLA Health (an academic medical center), Chief Executive Officer of the UCLA Hospital System and Associate Vice Chancellor of UCLA Health Sciences since 2016. Before assuming her positions at UCLA, she worked for 22 years at the University of Washington School of Medicine, including serving as Chief Health System Officer and Vice President, Medical Affairs for nine years. Among other qualifications, Ms. Spisso brings to the Board over 30 years of experience in large academic health system management and has demonstrated tremendous strategic and operational leadership during that time. | | KATHRYN M. SULLIVAN, Independent Director | | | Age 67 Director since: 2019 Welltower Committees: • Audit (Chair) • Compensation • Executive | EDUCATION: • BA – Accounting, University of Louisiana at Monroe • MBA – Louisiana State University | | | FORMER PUBLIC COMPANY DIRECTORSHIPS: • Hanger, Inc. | | | KEY SKILLS AND EXPERIENCE: Ms. Sullivan served as Chief Executive Officer of UnitedHealthcare Employer and Individual, Local Markets (a diversified health care company), which is an operating division of UnitedHealth Group, from March 2015 to 2018. From 2008 to 2015, she served as Chief Executive Officer of UnitedHealthcare, Central Region. Among other qualifications, Ms. Sullivan’s experience in the health care industry, especially with respect to health plan payors, is extremely valuable to the Board. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The table below summarizes the compensation paid in 2022 to Welltower’s non-employee directors.
2022 Director Compensation Table
2022 Director Compensation Table
2022 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(12) ($) | Total ($) | | Kenneth J. Bacon | 361,500(2) | 175,009 | 536,509 | | Karen B. DeSalvo | 103,500(3) | 175,009 | 278,509 | | Jeffrey H. Donahue(1) | 50,440(4) | 68,562 | 119,002 | | Philip L. Hawkins | 126,882(5) | 175,009 | 301,891 | | Dennis G. Lopez | 105,683(6) | 175,009 | 280,692 | | Ade J. Patton | 104,500(7) | 175,009 | 279,509 | | Diana W. Reid | 133,500(8) | 175,009 | 308,509 | | Sergio D. Rivera | 138,000(9) | 175,009 | 313,009 | | Johnese M. Spisso | 106,000(10) | 175,009 | 281,009 | | Kathryn M. Sullivan | 143,000(11) | 175,009 | 318,009 |
2022 Director Compensation Table
| Mr. Donahue did not stand for election as a member of the Board at the 2022 Annual Meeting held on May 23, 2022 and therefore retired from the Board on that date.(1) |
2022 Director Compensation Table
| Includes $250,000 additional fee for serving as Chair of the Board and $7,500 additional fee for serving on the Executive Committee. Also includes $9,000 for attending more than four Board meetings.(2) |
2022 Director Compensation Table
| Includes $7,500 for attending more than four Board meetings and $1,000 for attending more than four Investment Committee meetings. Dr. DeSalvo deferred 100% of her annual retainer and fees pursuant to the terms of the Welltower Inc. 2019 Nonqualified Deferred Compensation Plan.(3) |
2022 Director Compensation Table
| Mr. Donahue retired from the Board on May 23, 2022 and he received a pro rata portion of his annual retainer and fees based on the time he served as a director.(4) |
2022 Director Compensation Table
| Includes $15,179 additional fee for serving as Chair of the Compensation Committee and $4,554 additional fee for serving on the Executive Committee. Also, includes $9,000 for attending more than four Board meetings, $2,000 for attending more than four Compensation Committee meetings, and $1,000 for attending more than four Investment Committee meetings. Mr. Hawkins, in lieu of cash, elected to receive his annual retainer and fees in the form of deferred stock units.(5) |
2022 Director Compensation Table
| Includes $7,500 for attending more than four Board meetings, $2,000 for attending more than four Compensation Committee meetings, and $1,000 for attending more than four Investment Committee meetings. Mr. Lopez, in lieu of cash, elected to receive his annual retainer and fees in the form of deferred stock units.(6) |
2022 Director Compensation Table
| Includes $7,500 for attending more than four Board meetings and $2,000 for attending more than four Audit Committee meetings.(7) |
2022 Director Compensation Table
| Includes $20,000 additional fee for serving as Chair of the Nominating/Corporate Governance Committee and $7,500 additional fee for serving on the Executive Committee. Also, includes $9,000 for attending more than four Board meetings and $2,000 for attending more than four Audit Committee meetings.(8) |
2022 Director Compensation Table
| Includes $25,000 additional fee for serving as Chair of the Investment Committee and $7,500 additional fee for serving on the Executive Committee. Also includes $7,500 for attending more than four Board meetings, $1,000 for attending more than four Investment Committee meetings and $2,000 for attending more than four Audit Committee meetings.(9) |
2022 Director Compensation Table
| Includes $9,000 for attending more than four Board meetings and $2,000 for attending more than four Compensation Committee meetings.(10) |
2022 Director Compensation Table
| Includes $30,000 additional fee for serving as Chair of the Audit Committee and $7,500 additional fee for serving on the Executive Committee. Also includes $7,500 for attending more than four Board meetings, $2,000 for attending more than four Audit Committee meetings, $1,000 for attending more than four Compensation Committee meetings.(11) |
2022 Director Compensation Table
| Amounts set forth in this column represent the grant date fair value calculated in accordance with FASB ASC Topic 718 for the annual grant of deferred stock units granted to the non-employee directors on March 3, 2022 based on the closing price of $85.37. For Messrs. Hawkins and Lopez, who each elected to receive their cash fees in the form of deferred stock units, the grant date fair value for such deferred stock units granted in lieu of cash was calculated in accordance with FASB ASC Topic 718 on each of March 31, 2022 based on the closing price of $96.14, June 30, 2022 based on the closing price of $82.35, September 30, 2022 based on the closing price of $64.32, and December 30, 2022 based on the closing price of $65.55. Consistent with SEC rules, such amounts have not been reported in this column. As of December 31, 2022, (a) each non-employee director (other than Messrs. Hawkins and Lopez) held an aggregate of 2,050 deferred stock units that had not yet been converted into shares of common stock, (b) Mr. Hawkins held an aggregate of 6,368 deferred stock units that had not yet been converted into shares of common stock, and (c) Mr. Lopez held an aggregate of 4,888 deferred stock units that had not yet been converted into shares of common stock.(12) |
2022 Director Compensation Table
The form and amount of non-employee director compensation is determined by the Board upon the recommendation of the Compensation Committee. The Board’s overarching policy is to pay its non-employee directors appropriate and competitive compensation to ensure Welltower’s ability to attract and retain highly-qualified directors in a manner consistent with recognized corporate governance best practices. Directors who are also employees do not receive additional compensation for their Board service. The Compensation Committee generally reviews non-employee director compensation on a bi-annual basis, most recently in November 2022, with its independent compensation consultant, which advises the Compensation Committee on the design and amount of compensation for non-employee directors. Any changes to the non-employee director compensation program are then recommended to the full Board for approval. The compensation program for non-employee directors for the 2022 calendar year consisted of:
Compensation Principles
| • | Align management and shareholder interests by establishing rigorous goals that balance and measure value creation over both the short and long term. |
Strongly align pay and performance, utilizing absolute and relative goals across annual and multi-year performance periods
| • | Payouts vary based upon the degree to which performance targets are achieved. |
Strongly align pay and performance, utilizing absolute and relative goals across annual and multi-year performance periods
| • | Multiple performance measures are used to ensure a focus on overall Welltower performance. |
Strongly align pay and performance, utilizing absolute and relative goals across annual and multi-year performance periods
| • | Variable reward payouts are designed to provide competitive compensation for achieving expected performance and enhanced compensation for making business decisions that lead to performance that exceeds expectations. |
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
| • | A majority of each NEO’s total direct compensation opportunity is in the form of annual and long-term incentive compensation. |
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
| • | Participation in performance-based programs is intended to drive long-term performance that exceeds peers. |
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
| • | Performance measures are selected based on a careful assessment of measures that will encourage profitable growth and increase shareholder value. |
Link compensation realized to the achievement of Welltower’s short- and long-term financial and strategic goals
| • | Actual compensation may be above or below the targeted level, depending on achievement relative to pre-established performance goals that reflect Welltower’s short- and long-term business plans. |
Align management and shareholder interests by rewarding for long-term shareholder value creation
Align management and shareholder interests by rewarding for long-term shareholder value creation
Align management and shareholder interests by rewarding for long-term shareholder value creation
| • | Long-term incentives are granted in the form of equity awards that vest based on performance and continued employment over multiple years, which aligns management’s interests with those of Welltower’s shareholders. |
Align management and shareholder interests by rewarding for long-term shareholder value creation
| • | The current incentive programs include an annual cash bonus component and an equity component with successive three-year performance periods to emphasize both short- and long-term shareholder value creation. |
Align management and shareholder interests by rewarding for long-term shareholder value creation
| • | Stock ownership guidelines require Board members and executives to maintain significant levels of stock ownership, further emphasizing the focus on long-term shareholder return and alignment with shareholder interests. |
Attract and retain top management talent
| • | The Compensation Committee considers the market compensation levels when setting target compensation for the NEOs, with actual payout levels aligning with company performance. |
Attract and retain top management talent
| • | As a key element of our incentive program, individual performance metrics motivate executives to perform at the highest levels and determine actual payouts of annual cash bonuses. |
Policies and Procedures
| What Welltower Does | | What Welltower Doesn’t Do | | | | Pays for performance. A significant portion of executive pay is not guaranteed, but rather is at-risk and tied to key financial and value-creation metrics that are disclosed to shareholders. Performance awards are only earned if certain performance hurdles are achieved. | | Guarantee salary increases, bonuses or equity grants. Welltower does not guarantee annual salary increases, bonuses or equity grants. We currently have no guaranteed commitments to grant any bonuses or equity-based awards. | | | Balances short- and long-term incentives. The incentive programs provide an appropriate balance of annual and longer-term incentives. | | Provide excise tax gross-up payments. Welltower does not have any employment agreements that require excise tax gross-up payments and does not intend to enter into agreements that provide for such payments in the future. | | | Caps award payouts. Amounts or shares that can be earned under the annual incentive program and the long-term incentive program are capped. There are no guaranteed minimum amounts or awards. | | Reprice options; no cash buyout. Since the initial public offering in 1978, Welltower has not repriced or otherwise reduced the per-share exercise price of any outstanding stock options. Repricing of stock options without shareholder approval is not permitted under the 2022 Long-Term Incentive Plan. Welltower has also never bought out options or SARs with cash. |
Policies and Procedures
| What Welltower Does | | What Welltower Doesn’t Do | | | | Maintains stock ownership guidelines. The CEO and other executive officers must own shares with a fair market value of six times base salary and three times base salary, respectively. The non-employee directors must own shares with a fair market value of five times the annual cash retainer. | | Hedging. Directors and executive officers are prohibited from entering into hedging or monetization transactions with respect to Welltower’s securities. | | | Utilizes an independent compensation consulting firm. The Compensation Committee has engaged an independent compensation consulting firm that specializes in the REIT industry. | | Dividends or dividend equivalents on unearned performance shares. Performance share award agreements do not provide for the payment of dividends until the underlying shares are earned. | | | Maintains a clawback policy. The clawback policy allows Welltower to require repayment of incentive compensation paid or awarded to officers in certain cases if there is misconduct that contributes to a financial restatement or material financial or reputational harm to Welltower. | | No automatic single-trigger vesting. Awards under Welltower’s various long-term incentive programs do not automatically accelerate upon a change in control of Welltower. | | | Conducts a risk assessment. The Compensation Committee annually conducts a compensation risk assessment to determine whether our compensation policies and practices, or components thereof, create risks that are reasonably likely to have a material adverse effect on Welltower. | | | | | Responsible share recycling. The 2022 Long-Term Incentive Plan does not include liberal share recycling provisions that could otherwise dilute Welltower’s shareholders. | | |
Role of the Compensation Consultant
Role of the Compensation Consultant The Compensation Committee has engaged Ferguson Partners Consulting (“FPC”) as its independent compensation consultant to provide advice about compensation program design, the components of Welltower’s executive compensation programs, and the amounts Welltower should pay its executive officers. FPC performs no services for management unless requested by and on behalf of the Chair of the Compensation Committee. The consultant generally attends meetings of the Compensation Committee, and the Chair of the Compensation Committee frequently interacts with the consultant between meetings to define the nature of work to be conducted, review materials to be presented at meetings, and obtain the consultant’s opinion and perspective on proposals prepared by management. During 2022, FPC performed the following specific services:
Role of the Compensation Consultant
| • | Re-evaluated the peer group; |
Role of the Compensation Consultant
| • | Conducted a comprehensive review of Welltower’s compensation programs as compared to market data; |
Role of the Compensation Consultant
| • | Performed a risk assessment of Welltower’s compensation programs; |
Role of the Compensation Consultant
| • | Assisted with the development of key incentive performance metrics to align with the business; and |
Role of the Compensation Consultant
| • | Kept the Compensation Committee apprised throughout the year on key legislative developments impacting compensation and emerging best practices. |
Role of the Compensation Consultant
Who Makes Compensation Decisions? FPC’s independence was assessed by the Compensation Committee in early 2023, and no conflicts of interest were found.
SHAREHOLDER OUTREACH INITIATIVES
| What We Heard from Shareholders | How We Responded | | Encouraged us to maintain our ESG leadership by continuing to adopt evolving ESG initiatives to increase operational efficiency and shareholder value | Continued to be an industry leader in ESG, with an expansion of initiatives encompassing sustainability, climate resilience, diversity and inclusion, health and wellness, social equity, and shareholder-friendly governance practices | | Favored enhanced transparency through quantitative measures to evaluate ESG performance | Enhanced the ESG measures in our 2022 annual incentive program by adding a quantitative scorecard that measures our progress on specific ESG initiatives and rigorous goals | | Expressed a preference for more disclosure about the goals used to evaluate individual performance | Included description of the goals used to evaluate individual NEO performance in our 2022 annual inventive program discussion | | Focused on at risk pay-for-performance | Increased the 2022 total target direct compensation at risk from a total of 93.5% of the CEO’s compensation in 2021 to 96.8% in 2022 and a total of 85.3%, on average, of the other NEOs’ compensation in 2021 to 94.3% in 2022 | | Conveyed continued support for the strong pay-for performance structure of our compensation program | Maintained a strong alignment of interest with investors by basing annual bonuses, LTIP awards, and 2022-2025 OPP awards fully on performance by NEOs, contributing to operations and financial performance | | Favored having a greater portion of the annual incentive plan tied to FFO per diluted share(1) for certain NEOs | Normalized FFO per diluted share weighting of 20% for all NEOs | | Appreciated our efforts to compete for and retain talent as reflected by high employee engagement scores and low voluntary turnover rate | Adopted the 2022-2025 OPP to award our NEOs and 25 other key employees only if rigorous performance objectives are achieved Continued to incorporate stock-based compensation across all levels of the organization to promote an “ownership” culture and maintain strong alignment of employee interests with those of our shareholders | | Favored maintaining a relevant peer group of comparable REITs in our compensation program | Continued to include only REITs in our peer group, including those with a similar size, business model, and geographic footprint, and exclude companies in the private equity or investment banking sectors despite competing with these sectors for talent |
COMPENSATION PEER GROUP
COMPENSATION PEER GROUP Every year the Compensation Committee conducts a comprehensive evaluation of Welltower’s executive compensation programs relative to a relevant peer group of comparable REITs. When evaluating the peers, the Compensation Committee examines companies similar in size, business model, geographic footprint, regulatory environment, competitive dynamics, and/or other considerations. This competitive review is one of the chief elements the Compensation Committee considers in making compensation decisions. While Welltower is a publicly-traded REIT and it generally selects other publicly-traded REITs to compose the peer group, it is important to acknowledge that it does not only compete for talent with peers in the REIT industry. For example, one of our most recent executive officer hires, Ayesha Menon, previously worked at Alphabet Inc. prior to joining Welltower. Welltower competes for talent beyond just the REIT industry, including investment banks and private equity firms, and the Compensation Committee considers the compensation practices in these other industries. Across the equity-based public REIT industry, Welltower was the ninth largest REIT measured by enterprise value and eighth largest by market capitalization as of December 31, 2022. The other companies in the peer group are similar in size to Welltower and share a similar business model, geographic footprint, regulatory environment and/or competitive dynamics. The peer group represents the industries with which Welltower currently competes most regularly for executive talent, and also includes our principal business competitors.
COMPENSATION PEER GROUP
| Market Capitalization ($B) vs. Peer Group | | | | Peer | Industry | Market Capitalization | | Prologis, Inc. (PLD) | Industrial | $106.7 | | American Tower Corp. (AMT) | Specialty | $98.6 | | Equinix (EQIX) | Specialty | $60.7 | | Public Storage (PSA) | Self-Storage | $49.4 | | Simon Property Group, Inc. (SPG) | Regional Mall | $44.0 | | Welltower Inc. (WELL) | Health Care | $32.3 | | Digital Realty Trust (DLR) | Specialty | $29.8 | | Equity Residential (EQR) | Multi-Family | $23.1 | | AvalonBay Communities, Inc. (AVB) | Multi-Family | $22.6 | | Ventas, Inc. (VTR) | Health Care | $18.2 | | Healthpeak Properties, Inc. (PEAK) | Health Care | $13.9 | | Boston Properties Inc. (BXP) | Office | $11.8 | | Vornado Realty Trust (VNO) | Diversified | $4.3 |
COMPENSATION PEER GROUP
Source: S&P Global, data as of December 31, 2022. Source: KeyBanc, data as of December 31, 2022. The Compensation Committee believes that market data plays an important role in the design and implementation of its compensation programs. The Compensation Committee considers multiple factors and types of internal and external data in making both individual and plan-level compensation decisions. The benchmarking data provides an important – but not dispositive – reference point when evaluating whether pay levels are appropriate. Although the Compensation Committee does not precisely benchmark to a specific market percentile, the market median typically is an initial focus and point of reference. The Compensation Committee reviewed the 2022 total target compensation (base salary, target cash bonus, and target equity awards) of our NEOs, including our CEO, Mr. Mitra, evaluated their performance, and adjusted their compensation to recognize their achievements and effectiveness as leaders and to better align their compensation with that of their peers. The Compensation Committee’s goal is to maintain the NEOs’ compensation at a competitive level with their peers who have substantially similar roles and responsibilities. The Compensation Committee will continue to evaluate and adjust target compensation and corresponding incentive opportunity levels over time to ensure Welltower’s compensation programs are competitive and consistent with our compensation philosophy.
COMPENSATION ELEMENTS AND RESULTS
| The charts include the Monte Carlo value of the performance-based restricted stock unit award received by Messrs. Mitra, McHugh, Burkart and McQueen and Ms. Menon on January 17, 2022. The likelihood of meeting the hurdle goal of 9% compounded annual growth rate for Normalized Funds From Operations per diluted share was improbable as of December 31, 2022, and, therefore, we have not recognized any related expense during 2022 and there is no value included for these awards in the Summary Compensation Table.(1) |
Annual Incentives
Annual Incentives Annual incentives reward the executives for achieving prescribed performance objectives tied to Welltower’s annual business plan, as well as achieving individual performance objectives. Under this program, a range of earning opportunities is established for each executive at the beginning of the performance period, expressed as percentages of base salary and corresponding to three levels of performance (threshold, target and high) on different performance metrics or categories. In each case, threshold performance will lead to a 50% payout, target performance will lead to a 100% payout, and high performance will lead to a 200% payout. The rigorous corporate performance measures and weightings adopted by the Compensation Committee for 2022 under the annual incentive program are described below.
Annual Incentive Payments
Annual Incentive Payments The table below illustrates each executive’s total annual incentive earnings opportunity and the actual bonuses for 2022 corporate and individual performance that were approved at the Compensation Committee’s February 23, 2023 meeting. The performance on both corporate measures and individual NEO achievements resulted in the above-target payouts below.
Annual Incentive Payments
| | 2022 Annual Incentive Opportunity (as a % of Base Salary) | | | 2022 Annual Incentive Bonus Earned | | | | Threshold | Target | High | % Payout (as a % of Base Salary) | Amount ($) | | Shankh Mitra | 100% | 200% | 400% | 229% | 2,634,267 | | Timothy G. McHugh | 75% | 150% | 300% | 172% | 1,159,650 | | John F. Burkart | 75% | 150% | 300% | 168% | 1,010,550 | | Matthew G. McQueen | 50% | 100% | 200% | 115% | 658,567 | | Ayesha Menon | 50% | 100% | 200% | 111% | 625,926 |
Annual Incentive Payments
2022 bonus awards were the lowest awarded in 5+ years and 41% below 2021 bonus awards.
Long-Term Equity Incentive Compensation
Long-Term Equity Incentive Compensation
2022-2024 Long-Term Incentive Program
2022-2024 Long-Term Incentive Program The NEOs received long-term equity incentive awards under the 2022-2024 Long-Term Incentive Program (“2022-2024 LTIP”) in the form of performance stock units (“PSUs”) (70%) and a choice of restricted stock units (“RSUs”) or stock options (30%). All awards vest subject to continued service with Welltower, and the PSUs are also subject to the achievement of performance metrics established by the Compensation Committee at the beginning of the performance period.
Performance Stock Units
Performance Stock Units The Compensation Committee set two metrics for the 2022 PSUs: 80% of the performance grant (56% of each NEO’s total equity incentive grant) is subject to Welltower’s relative total shareholder return (“TSR”) for the 3-year forward-looking performance period ending December 31, 2024 (“TSR-Based LTIP”) and the remaining 20% (14% of each NEO’s total equity incentive grant) is subject to Welltower’s performance against the (Net Debt + Preferred)/Annualized Adjusted EBITDA measure. The Compensation Committee selected a relative TSR performance metric because it allows shareholders to evaluate Welltower’s performance in comparison to its peers —the companies that constitute two independent, widely-used REIT indexes:
Performance Stock Units
| • | 40% (28% of the total equity incentive grant) will be measured against the FTSE Nareit Equity Health Care Index, and |
Performance Stock Units
| • | 40% (28% of the total equity incentive grant) will be measured against the Morgan Stanley (MSCI) US REIT Index (the “MSCI US REIT Index”). |
Performance Stock Units
A relative metric also mitigates the impact of broad market trends that do not reflect Welltower’s actual performance. The Compensation Committee set the target performance goal for the 2022-2024 TSR-Based LTIP at the TSR of the relevant index, the threshold performance goal at 6% minus the TSR of the relevant index, and the high performance goal at 6% above the TSR of the relevant index. The (Net Debt + Preferred)/Annualized Adjusted EBITDA measure is included in the program to emphasize the importance of Welltower’s balance sheet and leverage strategy and to create an incentive to keep Welltower’s long-term indebtedness at a reasonable range of leverage. The Compensation Committee believes it is important that Welltower does not compromise the strength of its balance sheet to grow other areas of the business. For this measure, the Compensation Committee set the target in line with Welltower’s strategic goals. For relative TSR measures, reaching the threshold, target or high achievement levels would result in a payout of 25%, 100% or 300%, respectively, of the target award opportunity. For (Net Debt + Preferred)/Annualized Adjusted EBITDA measure, reaching the threshold, target or high achievement levels would result in a payout of 50%, 100% or 200%, respectively, of the target award opportunity. Payout amounts between levels will be interpolated, and there will be no payout for metrics with outcomes below the threshold achievement levels. For any performance-based awards earned, the NEOs have a required two-year holding period after the end of the performance period.
Restricted Stock Units or Stock Options
Restricted Stock Units or Stock Options The remaining 30% of each NEO’s 2022 equity incentive opportunity was granted in the form of a time-based award that vests and, if applicable, becomes exercisable over four years beginning on January 15, 2023. The NEOs were offered the opportunity to elect to receive their time-based awards in the form of either RSUs and/or nonqualified stock options. The table below shows the NEOs’ respective elections. Because the ultimate value of the RSUs and stock options is tied to Welltower’s stock price, the Compensation Committee believes that offering these time-based awards that vest independent of corporate performance promotes the retention of Welltower’s talented management team, while still incentivizing a focus on long-term results and the interests of Welltower’s shareholders.
Restricted Stock Units or Stock Options
| | Election of RSUs and Nonqualified Stock Options | | | Name | RSUs | Nonqualified Stock Options | | Shankh Mitra | 0% | 100% | | Timothy G. McHugh | 67% | 33% | | John F. Burkart | 0% | 100% | | Matthew G. McQueen | 100% | 0% | | Ayesha Menon | 50% | 50% |
2022-2024 LTIP Award Opportunities
2022-2024 LTIP Award Opportunities The Compensation Committee, in consultation with FPC, approved the target 2022-2024 LTIP opportunities for the NEOs as set forth in the table below in February 2022. These award opportunities reflect the Compensation Committee’s assessment of compensation data for peers with substantially similar roles and responsibilities provided by FPC, each NEO’s relative duties and responsibilities, each NEO’s impact on Welltower’s results, and the inherent risk by tying the majority of these award opportunities to rigorous performance objectives. The table below shows the grant date target value of the 2022 equity incentive awards, and the 2022 Grants of Plan Based Awards table shows the grant date fair value based on a Monte Carlo valuation model in accordance with FASB ASC Topic 718.
2022-2024 LTIP Award Opportunities
| Name | TSR vs FTSE Nareit Equity Health Care Index ($) | TSR vs MSCI Index ($) | Net Debt + Preferred/ Annualized Adjusted EBITDA Ratio ($) | Time- Based RSU ($) | Time- Based Options ($) | Total Opportunity ($) | | Shankh Mitra | 3,067,983 | 3,403,785 | 1,282,480 | — | 2,700,000 | 10,454,249 | | Timothy G. McHugh | 1,193,145 | 1,323,739 | 498,785 | 712,489 | 350,009 | 4,078,167 | | John F. Burkart | 1,022,695 | 1,134,633 | 427,493 | — | 900,000 | 3,484,822 | | Matthew G. McQueen | 477,279 | 529,518 | 199,549 | 427,493 | — | 1,633,839 | | Ayesha Menon | 392,106 | 435,023 | 163,903 | 175,641 | 172,519 | 1,339,191 |
2022-2024 LTIP Award Opportunities
NEOs who earn PSUs or RSUs also receive dividend equivalent rights entitling them to a cash payment from Welltower in an amount equal to any dividends paid on Welltower’s common stock as and when such shares vest.
Status of LTIP Award Programs
Status of LTIP Award Programs The graphic below summarizes the performance periods and outcome, or projected outcome, of Welltower’s LTIP awards granted from 2016 to 2022.
Status of LTIP Award Programs
| The performance period for these awards remains open and the payout percentage has not been determined. Welltower makes no prediction as to the future performance of Welltower’s stock.(1) |
2020-2022 LTIP Award Results
2020-2022 LTIP Award Results This forward-looking program covered the three-year performance period ended December 31, 2022. The Compensation Committee established goals in early 2020 for the three measures described below based on Welltower’s internal projections. The components of the three-year program were consistent with Welltower’s long-term strategic objectives. Based on the performance compared to these goals and the weightings of each goal, the payout of the 2020-2022 LTIP was at 132% (between target and high levels).
2020-2022 LTIP Award Payouts
2020-2022 LTIP Award Payouts The table below outlines the long-term incentive earnings opportunities for the 2020-2022 performance period and the payouts that were approved at the Compensation Committee’s February 23, 2023 meeting. These actual amounts are not included in the 2021 or 2022 portion of the “Summary Compensation Table” because the grant date fair value was included in the Summary Compensation Table reporting compensation awarded in 2020.
2020-2022 LTIP Award Payouts
| | 2020-2022 Long-Term Incentive Program Opportunities and Payouts(1) | | | | | | | | Threshold (#) | Target (#) | High (#) | Value of Earned Award ($)(2) | Restricted Shares (#) | DER Accrual Payout ($)(3) | | Shankh Mitra | 29,623 | 59,240 | 118,480 | 6,052,697 | 79,463 | 602,321 | | Timothy G. McHugh | 9,780 | 19,559 | 39,118 | 1,980,420 | 26,000 | 197,077 | | Matthew G. McQueen | 3,130 | 6,260 | 12,520 | 633,811 | 8,321 | 63,070 | | Ayesha Menon | 2,347 | 4,694 | 9,388 | 475,301 | 6,240 | 47,298 |
2020-2022 LTIP Award Payouts
| Mr. Burkart is not included in this table because he joined Welltower after the grant date.(1) |
2020-2022 LTIP Award Payouts
| Value reported is based on a per share closing price of $76.17 on February 23, 2023, the date the Compensation Committee certified the earned award. The shares issued in settlement of the award vested immediately.(2) |
2020-2022 LTIP Award Payouts
| Represents accrued dividend equivalent right payments for the shares actually earned.(3) |
2022-2025 Outperformance Program (“2022-2025 OPP”)
| Feature | Traditional LTIP | 2022-2025 OPP | | Performance-Component | 70% of Program | 100% of Program | | Performance Period | Rolling three-year periods | End-to-end four-year period | | Absolute Performance Component | None | Rigorous Normalized FFO growth and Absolute TSR Component (if Welltower delivers less than a 9% Normalized FFO compounded annual growth rate and less than ~$8.3 billion in shareholder value creation, the program does not “turn on”) | | Relative Component | Within a range of +/- 600 bps as compared to FTSE Nareit Equity Health Care Index and MSCI US REIT Index | Must outperform FTSE Nareit Equity Health Care Index and/or MSCI US REIT Index by a range of 1-1,000 bps over a four year period) | | Equity Denomination | Converted upfront into performance shares/units that may be earned upon conclusion of performance period | Dollar-based pool participation with a cap funded in shares/units at the end of the performance period |
Profits Interest Program
Profits Interest Program In January 2023, Welltower adopted a new program common among its peers and the broader REIT industry, providing for grants of equity incentive awards based on separate classes of units of membership interests in Welltower OP, referred to as “LTIP Units” and “Option Units.” LTIP Units are structured as “profits interests” for U.S. federal income tax purposes, which means that they cannot have any value on the date of grant were Welltower OP to be liquidated on that date. As profits interests, LTIP Units only have value, other than with respect to the right to receive distributions, if the value of the assets of Welltower OP increases between the time of issuance of LTIP Units and the date of a book-up event for partnership tax purposes. Option Units are also structured as “profits interests,” except that they also have an implied purchase price comparable to an option exercise price. At the time of a book-up event, asset gains are allocated to all outstanding units as provided under the governing documents of Welltower OP. Once Option Units have vested, they may be converted into LTIP Units, after taking into account the implied purchase price for the Option Units. As a result, the conversion ratio from Option Units to LTIP Units will always be less than 1 to 1. Once LTIP Units have been allocated value equivalent to the OP Class A common units of Welltower OP, the LTIP Units may be converted, subject to the satisfaction of all applicable vesting conditions, on a one-for-one basis into Class A common units. Class A common units are exchangeable by the holder for cash or, at Welltower’s election, on a one-for-one basis into shares of Welltower common stock. Neither Option Units nor LTIP Units may be exchanged for cash or Welltower common stock. LTIP Units and Option Units are intended to offer Welltower executives similar long-term incentives as RSUs (in the case of LTIP Units) and stock options (in the case of Option Units). This program is being offered to Welltower executives as an alternative to Welltower’s established annual long-term incentive programs and does not provide any additional equity awards. When Welltower adopted this profits interest program, executives (including our NEOs) were eligible to elect to exchange, on a one-for-one basis, certain of their then-outstanding PSUs or RSUs for awards of LTIP Units, and their then-outstanding stock options for awards of Option Units. All exchanged awards remained subject to the same vesting and other material terms and conditions as those that applied to the original awards. Other Compensation Information
SUMMARY COMPENSATION TABLE
SUMMARY COMPENSATION TABLE The table below presents the total compensation of the NEOs for each indicated year.
SUMMARY COMPENSATION TABLE
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(2)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(4) | Total Compensation ($) | | Shankh Mitra Chief Executive Officer | 2022 | 1,150,044 | 7,754,249 | 2,700,000 | 2,634,267 | 28,375 | 14,266,935 | | | 2021 | 1,000,039 | 5,999,991 | 1,500,088 | 3,920,000 | 333,592 | 12,753,710 | | | 2020 | 767,516 | 6,528,380 | — | 1,852,490 | 409,048 | 9,557,434 | | Timothy G. McHugh Executive Vice President - Chief Financial Officer | 2022 | 675,026 | 3,728,158 | 350,009 | 1,159,650 | 23,650 | 5,936,493 | | | 2021 | 600,000 | 2,703,156 | 297,002 | 1,764,000 | 14,250 | 5,378,408 | | | 2020 | 600,000 | 2,625,544 | — | 1,086,750 | 14,250 | 4,326,544 | | John F. Burkart(1) Executive Vice President - Chief Operating Officer | 2022 | 600,000 | 2,584,822 | 900,000 | 1,010,550 | 26,800 | 5,122,172 | | | 2021 | 273,076 | 903,391 | — | 634,438 | — | 1,810,905 | | Matthew G. McQueen Executive Vice President - General Counsel & Corporate Secretary | 2022 | 575,022 | 1,633,839 | — | 658,567 | 15,250 | 2,882,678 | | | 2021 | 550,021 | 850,158 | 150,001 | 1,045,000 | 14,250 | 2,609,430 | | | 2020 | 480,000 | 840,320 | — | 557,100 | 14,250 | 1,891,670 | | Ayesha Menon Executive Vice President - Wellness Housing & Development | 2022 | 565,022 | 1,166,672 | 172,519 | 625,926 | 15,250 | 2,545,389 | | | 2021 | 550,021 | 850,158 | 150,001 | 1,023,000 | 14,250 | 2,587,430 | | | 2020 | 425,000 | 630,135 | — | 493,266 | 3,542 | 1,551,943 |
SUMMARY COMPENSATION TABLE
| No 2020 compensation information is provided for Mr. Burkart because was not an NEO during that year.(1) |
SUMMARY COMPENSATION TABLE
| Amounts set forth in this column represent the grant date fair value calculated in accordance with FASB ASC Topic 718 for the performance-based and time-based stock awards.(2) |
SUMMARY COMPENSATION TABLE
| | 2020–2022 LTIP | | | 2021–2023 LTIP | | | 2022–2024 LTIP | | | | | | Performance-Based | | | Performance-Based | | | Performance-Based | | | Grant Date Fair Value for Stock Awards Name | Time- Based ($) | Target ($) | Maximum ($) | Time- Based ($) | Target ($) | Maximum ($) | Time- Based ($) | Target ($) | Maximum ($) | | Shankh Mitra | 1,705,739 | 4,822,641 | 9,645,283 | 749,953 | 5,250,038 | 7,875,057 | — | 7,754,249 | 21,980,265 | | Timothy G. McHugh | 696,607 | 1,928,937 | 3,857,873 | 603,052 | 2,100,104 | 3,150,156 | 712,489 | 3,015,669 | 8,548,221 | | John F. Burkart | n/a | n/a | n/a | 271,020 | 632,371 | 948,557 | — | 2,584,822 | 7,326,973 | | Matthew G. McQueen | 222,943 | 617,377 | 1,234,753 | 150,058 | 700,100 | 1,050,150 | 427,493 | 1,206,346 | 3,419,488 | | Ayesha Menon | 167,207 | 462,928 | 925,856 | 150,058 | 700,100 | 1,050,150 | 175,641 | 991,031 | 2,809,191 |
SUMMARY COMPENSATION TABLE
| For valuation assumptions, refer to note 15 to the consolidated financial statements in our annual report on Form 10-K for the fiscal year ended December 31, 2022. For the PSUs granted under the 2022-2024 LTIP, also refer to the relevant section of the Compensation Discussion and Analysis at pages 53-54. |
SUMMARY COMPENSATION TABLE
| Amounts set forth in this column represent the grant date fair value of stock options under the 2022-2024 LTIP calculated in accordance with FASB ASC Topic 718 (see below and pages 53-55 for additional information regarding this program). For additional information regarding valuation assumptions, refer to note 15 to the consolidated financial statement in our annual report on Form 10-K for the year ended December 31, 2022.(3) |
SUMMARY COMPENSATION TABLE
| In addition to the equity awards under the 2022-2024 LTIP granted on January 12, 2022, Messrs. Mitra, McHugh, Burkart and McQueen and Ms. Menon received 2022-2025 OPP performance-based restricted stock unit awards on January 17, 2022. The 2022-2025 OPP performance period is January 1, 2022 through December 31, 2025. If Welltower achieves at least a 9% compounded annual growth rate for Normalized FFO per share and a 5% TSR compounded annual growth rate during this four-year performance period, then the OPP award may be earned based on Welltower’s TSR performance for the period compared to the indices, as follows: (i) 50% of the award would be earned based on performance compared to the FTSE Nareit Equity Health Care Index and (ii) 50% of the award would be earned based on performance compared to the MSCI US REIT Index. To receive any payout, Welltower’s TSR at the end of the performance period must be at least 100% of at least one of the indices’ return. The maximum award is earned if Welltower’s TSR at the end of the performance period is at least 200% of both indices’ return. The likelihood of meeting this goal was improbable as of December 31, 2022, and, therefore, we have not recognized any related expense during 2022 and there is no value included for these awards in the Summary Compensation Table. If the performance condition is met, the grant date fair values of these awards are $7,637,886 (Mr. Mitra), $3,624,763 (Mr. McHugh), $3,624,763 (Mr. Burkart), $1,032,635 (Mr. McQueen), and $776,747 (Ms. Menon), respectively. |
SUMMARY COMPENSATION TABLE
Summary Compensation Table
SUMMARY COMPENSATION TABLE
| “All Other Compensation” includes the following:(4) |
SUMMARY COMPENSATION TABLE
| Name | Welltower Contribution to 401(k) Plan ($) | Executive Physical($)(a) | Total ($) | | Shankh Mitra | 15,250 | 13,125 | 28,375 | | Timothy G. McHugh | 15,250 | 8,400 | 23,650 | | John F. Burkart | 15,250 | 11,550 | 26,800 | | Matthew G. McQueen | 15,250 | — | 15,250 | | Ayesha Menon | 15,250 | — | 15,250 |
SUMMARY COMPENSATION TABLE
| See “Compensation Discussion and analysis – Benefits and Perquisites” for additional information regarding the executive physicals paid for by Welltower on behalf of Mr. Mitra, Mr. McHugh, and Mr. Burkart. All of the NEOs other than Ms. Menon participated in Welltower’s medical benefits program available to all other Welltower employees. Ms. Menon opted not to receive medical benefits from Welltower.(a) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
2022 GRANTS OF PLAN-BASED AWARDS TABLE The table below provides information regarding grants of awards to the NEOs under Welltower’s long-term incentive plans.
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| | | Estimated Future Payments Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payments Under Equity Incentive Plan Awards | | | | | | | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | High (#) | Stock Awards: Number of Shares of Stock or Units (#) | Option Awards: Number of Shares of Stock Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(6) | | Shankh Mitra | — | 1,150,000 | 2,300,000 | 4,600,000 | | | | | | | | | | 1/12/2022(2) | | | | 22,290 | 74,293 | 208,020 | | | | 7,754,249 | | | 1/17/2022(3) | | | | — | 276,735 | — | | | | — | | | 1/12/2022(4) | | | | | | | — | 128,694 | 86.31 | 2,700,000 | | Timothy G. McHugh | — | 506,250 | 1,012,250 | 2,025,000 | | | | | | | | | | 1/12/2022(2) | | | | 8,670 | 28,893 | 80,900 | | | | 3,015,669 | | | 1/17/2022(3) | | | | — | 131,332 | — | | | | — | | | 1/12/2022(5) | | | | | | | 8,255 | — | — | 712,489 | | | 1/12/2022(4) | | | | | | | — | 16,683 | 86.31 | 350,009 | | John F. Burkart | — | 450,000 | 900,000 | 1,800,000 | | | | | | | | | | 1/12/2022(2) | | | | 7,431 | 24,765 | 69,342 | | | | 2,584,822 | | | 1/17/2022(3) | | | | — | 131,332 | — | | | | — | | | 1/12/2022(4) | | | | | | | — | 42,898 | 86.31 | 900,000 | | Matthew G. McQueen | — | 287,500 | 575,000 | 1,150,000 | | | | | | | | | | 1/12/2022(2) | | | | 3,468 | 11,558 | 32,362 | | | | 1,206,346 | | | 1/17/2022(3) | | | | — | 37,523 | — | | | | — | | | 1/12/2022(5) | | | | | | | 4,953 | — | — | 427,493 | | Ayesha Menon | — | 282,500 | 565,000 | 1,130,000 | | | | | | | | | | 1/12/2022(2) | | | | 2,850 | 9,495 | 26,586 | | | | 991,031 | | | 1/17/2022(3) | | | | — | 28,143 | — | | | | — | | | 1/12/2022(5) | | | | | | | 2,035 | — | — | 175,641 | | | 1/12/2022(4) | | | | | | | — | 8,223 | 86.31 | 172,519 |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Represents annual incentive program earnings opportunity for 2022. The actual amount earned by each of the NEOs under the annual incentive program in 2022 was paid in 2023 and is shown in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table.(1) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
2022 Grants of Plan-Based Awards Table
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Represents long-term incentive earnings opportunity for performance under the 2022-2024 LTIP. The performance measures under this program will be evaluated in early 2025 after the close of the performance period on December 31, 2024. Any performance award earned will be settled in shares following such evaluation (subject to earlier evaluation and vesting in connection with a change in corporate control or a qualified termination of employment). See pages 53-55 for additional information regarding the 2022-2024 LTIP.(2) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Represents long-term incentive earnings opportunity for performance under the 2022-2025 OPP. The performance measures under this program will be evaluated in early 2026 after the close of the performance period on December 31, 2025. Any performance award earned will be settled in shares following such evaluation (subject to earlier evaluation and vesting in connection with a change in corporate control or a qualified termination of employment). The likelihood of meeting this goal was improbable as of December 31, 2022, and, therefore, we have not recognized any related expense during 2022 and there is no value included for these awards. See pages 57-59 for additional information regarding the 2022-2025 OPP.(3) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Represents time-based stock options granted under the 2022-2024 LTIP on January 12, 2022 with an exercise price of $86.31, the closing price of Welltower’s common stock on the date of grant. The stock options vest and become exercisable in four equal installments on January 15, 2023, 2024, 2025 and 2026. The grant date fair value is based on the Black-Scholes value of $20.98 on the date of the grant. See pages 53-55 for additional information regarding the 2022-2024 LTIP.(4) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Represents time-based RSUs granted under the 2022-2024 LTIP on January 12, 2022. The units vest in four equal installments on January 15, 2023, 2024, 2025 and 2026. The grant date fair value is based on a per share grant price of $86.31, the closing price of Welltower’s common stock on January 12, 2022. See pages 53-55 for additional information regarding the 2022-2024 Long-Term Incentive Program.(5) |
2022 GRANTS OF PLAN-BASED AWARDS TABLE
| Amounts set forth in this column represent the grant date fair value calculated in accordance with FASB ASC Topic 718. For the assumptions and methodologies used to value the awards reported in this column, see notes 2 and 3 to the Summary Compensation Table.(6) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE The table below provides information regarding outstanding equity-based awards granted to the NEOs under Welltower’s long-term incentive plans that were outstanding as of December 31, 2022.
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | | Stock Awards | | | | | | | | | Name | Grant Date | # of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: # of Unearned Shares, Units or Other Rights That Have Not Yet Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Yet Vested ($) | # of Shares of Stock Underlying Unexercised Options Exercisable (#) | # of Shares of Stock Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($/Sh) | Option Expiration Date | | Shankh Mitra | 2/16/21 | 8,374 | 548,916(1) | | | | | | | | | 12/4/20 | 2,434 | 159,549(2) | | | | | | | | | 2/14/20 | 7,799 | 511,224(2) | | | | | | | | | 2/14/19 | 2,421 | 158,697(3) | | | | | | | | | 2/16/21 | | | 82,084 | 5,380,606(4) | | | | | | | 1/12/22 | | | 74,293 | 4,869,906(5) | | | | | | | 1/17/22 | | | 276,735 | 18,139,979(6) | | | | | | | 2/16/21 | | | | | 102,465 | —(7) | 67.17 | 2/16/2031 | | | 12/13/21 | | | | | 246,184 | —(8) | 83.44 | 12/13/2031 | | | 1/12/22 | | | | | 128,694 | —(9) | 86.31 | 1/12/2032 | | Timothy G. McHugh | 1/12/22 | 8,255 | 541,115(10) | | | | | | | | | 2/16/21 | 6,734 | 441,414(1) | | | | | | | | | 2/14/20 | 3,900 | 255,645(2) | | | | | | | | | 9/4/19 | 1,251 | 82,003(3) | | | | | | | | | 2/14/19 | 364 | 23,795(3) | | | | | | | | | 2/16/21 | | | 32,835 | 2,152,334(4) | | | | | | | 1/12/22 | | | 28,893 | 1,893,936(5) | | | | | | | 1/17/22 | | | 131,332 | 8,608,813(6) | | | | | | | 2/16/21 | | | | | 20,287 | —(7) | 67.17 | 2/16/2031 | | | 12/13/21 | | | | | 123,092 | —(8) | 83.44 | 12/13/2031 | | | 1/12/22 | | | | | 16,683 | —(9) | 86.31 | 1/12/2032 |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2022 Outstanding Equity Awards at Fiscal Year-end Table
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| | | Stock Awards | | | | | | | | | Name | Grant Date | # of Shares or Units of Stock That Have Not Vested | Market Value of Shares or Units of Stock That Have Not Vested ($) | Equity Incentive Plan Awards: # of Unearned Shares, Units or Other Rights That Have Not Yet Vested | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Yet Vested ($) | # of Shares of Stock Underlying Unexercised Options Exercisable (#) | # of Shares of Stock Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($/Sh) | Option Expiration Date | | John F. Burkart | 7/19/21 | 2,407 | 157,779(1) | | | | | | | | | 7/19/21 | | | 6,781 | 444,495(4) | | | | | | | 1/12/22 | | | 24,765 | 1,623,346(5) | | | | | | | 1/17/22 | | | 131,332 | 8,608,813(6) | | | | | | | 12/13/21 | | | | | 61,546 | —(8) | 83.44 | 12/13/2031 | | | 1/12/22 | | | | | 42,898 | —(9) | 86.31 | 1/12/2032 | | Matthew G. McQueen | 1/12/22 | 4,953 | 324,669(10) | | | | | | | | | 2/16/21 | 1,676 | 109,862(1) | | | | | | | | | 2/14/20 | 1,248 | 81,806(2) | | | | | | | | | 2/14/19 | 646 | 42,345(3) | | | | | | | | | 2/16/21 | | | 10,946 | 717,510(4) | | | | | | | 1/12/22 | | | 11,558 | 757,627(5) | | | | | | | 1/17/22 | | | 37,523 | 2,459,633(6) | | | | | | | 2/16/21 | | | | | 10,246 | —(7) | 67.17 | 2/16/2031 | | | 12/13/21 | | | | | 39,389 | —(8) | 83.44 | 12/13/2031 | | Ayesha Menon | 1/12/22 | 2,035 | 133,394(10) | | | | | | | | | 2/16/21 | 1,676 | 109,862(1) | | | | | | | | | 2/14/20 | 936 | 61,355(2) | | | | | | | | | 5/13/19 | 483 | 31,661(3) | | | | | | | | | 5/6/19 | 2,632 | 172,528(11) | | | | | | | | | 2/16/21 | | | 10,946 | 717,510(4) | | | | | | | 1/12/22 | | | 9,495 | 622,397(5) | | | | | | | 1/17/22 | | | 28,143 | 1,844,774(6) | | | | | | | 2/16/21 | | | | | 10,246 | —(7) | 67.17 | 2/16/2031 | | | 12/13/21 | | | | | 24,618 | —(8) | 83.44 | 12/13/2031 | | | 1/12/22 | | | | | 8,223 | —(9) | 86.31 | 1/12/2032 |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). On each of January 15, 2023, 2024 and 2025, one-third of the time-based RSUs granted under the 2021-2023 Long-Term Incentive Program will vest.(1) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). On each of January 15, 2023, and 2024, one-half of the remaining unvested time-based RSUs granted under the 2020-2022 Long-Term Incentive Program will vest.(2) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). These shares of restricted stock vested on January 15, 2023.(3) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). The number and market or payout value of the performance-based awards under the 2021-2023 Long-Term Incentive Program are based on threshold performance because corporate performance in the second year of the three-year performance period was below threshold. See page 55 for additional information regarding the 2021-2023 Long-Term Incentive Program.(4) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). The number and market or payout value of the performance-based awards under the 2022-2024 LTIP are based on threshold performance because corporate performance in the first year of the three-year performance period was below threshold. See pages 53-55 for additional information regarding the 2022-2024 LTIP.(5) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). This award under the 2022-2025 OPP only provides for a single payout amount.(6) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
2022 Option Exercises and Stock Vested Table
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). On each of January 15, 2023, 2024 and 2025, one-third of the stock options vest and become exercisable under the 2021-2023 Long-Term Incentive Program on February 16, 2021.(7) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Represents performance-based stock options granted on December 13, 2021. If we achieve a Normalized FFO compounded annual growth rate of 10.5% for the three-year performance period of January 1, 2022 to December 31, 2024, then the stock options vest 50% on February 1, 2025, 25% on December 13, 2025, and 25% on December 25, 2026. If the performance is not met, the stock options will not vest.(8) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Represents time-based stock options granted under the 2022-2024 LTIP on February 16, 2021. The stock options vest and become exercisable in four equal installments on January 15, 2023, 2024, 2025 and 2026.(9) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). On each of January 15, 2023, 2024, 2025 and 2026, one-fourth of the time-based RSUs granted under the 2022-2024 LTIP will vest.(10) |
2022 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
| Based on a share price of $65.55, the closing price of Welltower’s common stock on December 30, 2022 (the last trading day in 2022). These shares of restricted stock vested on January 15, 2024.(11) |
2022 OPTION EXERCISES AND STOCK VESTED TABLE
2022 OPTION EXERCISES AND STOCK VESTED TABLE The table below provides information regarding the dollar amounts realized pursuant to the vesting or exercise of equity-based awards during 2022 for the NEOs.
2022 OPTION EXERCISES AND STOCK VESTED TABLE
| | Option Awards | | Stock Awards | | | Name | # of Shares Acquired on Exercise | Value Realized Upon Exercise ($) | # of Shares Acquired on Vesting | Value Realized on Vesting ($) | | Shankh Mitra | — | — | 37,472 | 3,408,188 | | Timothy G. McHugh | — | — | 23,967 | 2,128,384 | | John F. Burkart | — | — | 803 | 71,250 | | Matthew G. McQueen | — | — | 10,208 | 927,063 | | Ayesha Menon | — | — | 7,179 | 637,632 |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CORPORATE CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CORPORATE CONTROL
Summary of Potential Payments for Named Executive Officers
Summary of Potential Payments for Named Executive Officers
What is the deadline to submit shareholder proposals or nominate a director for the 2024 Annual Meeting of Shareholders?
| Amounts represent compensation actually paid to our PEO(s) and the average compensation actually paid to our remaining NEOs for the relevant fiscal year, as determined in accordance with SEC rules, which includes the individuals listed in the table below for each fiscal year.(1) |
PAY RATIO
PAY RATIO In this section, we are providing a comparison of the annual total compensation of Welltower’s median compensated employee to the annual total compensation of our Chief Executive Officer, pursuant to the requirements of Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K. The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported below, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. The pay ratio reported below is a reasonable estimate calculated in a manner consistent with SEC rules based on the methodology described below. To identify Welltower’s median compensated employee, as well as to determine the annual total compensation of Welltower’s median employee and the Chief Executive Officer, we took the following steps:
PAY RATIO
| • | We considered all employees employed as of December 31, 2022. This population consisted of full-time and part-time employees located in the United States, the United Kingdom, Canada and Luxembourg. |
PAY RATIO
| • | To identify the median employee from Welltower’s employee population, we generated a list of all employees and calculated the amount of base salary determined as of December 31, 2022, wages, overtime and cash bonus amounts earned for performance in fiscal 2022 and the aggregate grant date fair value of equity awards granted in fiscal 2022. We used a GBP/USD rate of 1.210159 for employees in the United Kingdom, a CAD/USD rate of 0.738562 for employees in Canada and a EUR/USD rate of 1.073231 for employees in Luxembourg, each of which reflected the applicable exchange rate on December 31, 2022. |
PAY RATIO
| • | Once we identified the median employee, we calculated all elements of such employee’s compensation for 2022 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $108,351. |
PAY RATIO
| • | With respect to the annual total compensation for the Chief Executive Officer, we used the amount reported in the “Total Compensation” column of the Summary Compensation Table for 2022, $14,266,935. |
PAY RATIO
Based on this information, for 2022 the ratio of the annual total compensation of Mr. Mitra to the annual total compensation of Welltower’s median employee was 132 to 1.