DEF 14A of DiamondRock Hospitality Co, Mar 28, 2024

DEF 14A of DiamondRock Hospitality Co

Filed Mar 28, 2024 · FY20230001298946-24-000042

Open on EDGAR

  1. Nominees

    Nominees

  2. Nominees

    | | William W. McCarten has served as our Chairman of the Board of Directors and has been a member of our Board of Directors since our formation in 2004. Mr. McCarten was a co-founder of the Company and our Chief Executive Officer from our formation in 2004 until September 2008, when he became Executive Chairman. He retired as Executive Chairman in December 2009. Mr. McCarten also serves on the Board of Directors of Marriott Vacations Worldwide Corporation (NYSE: VAC) and previously served on the Board of Directors of Cracker Barrel Old Country Store (Nasdaq: CBRL) from August 2011 until November 2023. Mr. McCarten’s prior work experience includes roles with the Marriott Corporation, or Marriott International, Inc. (Nasdaq: MAR), and its related entities for over 25 years until January 2004. Among his many positions during those 25 years, Mr. McCarten served as the Chief Executive Officer of HMSHost Corporation, formerly Host Marriott Services Corporation, a publicly-held developer and operator of restaurant and retail concessions in travel and entertainment venues listed on the NYSE from 1995 to 2000. In addition, he served as non-executive Chairman of HMSHost Corporation from 2000 to 2001. Mr. McCarten also served as President of Marriott International's Services Group from 2001 to 2003, which include Marriott's senior living and distribution businesses. Our Board of Directors has determined that Mr. McCarten’s qualifications to serve on our Board of Directors include his extensive experience in the lodging industry with over 25 years of experience with the Marriott organization, a leading worldwide hotel brand, franchise and management company. Mr. McCarten has developed a broad network of hotel industry participants. Prior to joining Marriott, Mr. McCarten was an accountant with Arthur Andersen & Co. from 1970 to 1979. Mr. McCarten received his B.S. in Accounting from the McIntire School of Commerce at the University of Virginia in 1970. He served on the Advisory Board of the McIntire School from 1981 to 1996. | | William W. McCarten Age: 75 Director Since: 2004 | |

  3. Nominees

    | DiamondRock Hospitality | 7 | 2024 Proxy Statement |

  4. Nominees

    | | Mark W. Brugger has served as our Chief Executive Officer since September 1, 2008 and is a member of our Board of Directors. Mr. Brugger was a co-founder of the Company having served as Executive Vice President, Chief Financial Officer and Treasurer prior to being promoted to Chief Executive Officer. He has received recognition for his work at DiamondRock, including being named to Forbes' list of America’s Most Powerful CEOs 40 and Under. Mr. Brugger also served as a member of the Board of Directors of Chambers Street Properties from 2013 to 2015, resigning shortly before it merged with another publicly-traded company. Mr. Brugger serves on the Board of Directors of the American Hotel & Lodging Association. Mr. Brugger’s prior work experience includes several roles at Marriott International, Inc. from 2000 to 2004, including the Chief Executive Officer of their synthetic fuels company and Vice President of Project Finance. From 1997 to 2000, Mr. Brugger served as Vice President of Investment Sales of Transwestern Commercial Services, formerly the Carey Winston Company. From 1995 to 1997, Mr. Brugger was the Land Development Director for Brookfield Residential Properties, Inc. (formerly Coscan Washington, Inc.). Mr. Brugger received a Juris Doctorate cum laude from American University Washington College School of Law in 1995 and a B.A. from the University of Maryland at College Park in 1992. Our Board of Directors has determined that Mr. Brugger’s qualifications to serve on our Board of Directors include his extensive experience in real estate and finance with over 25 years of experience. His experience includes serving as the Chief Financial Officer of DiamondRock for four years, as well as several billion dollars of real estate and finance transactional experience, including structured finance transactions, acquisitions, dispositions and financings of investment properties. | | Mark W. Brugger Age: 54 Director Since: 2008 | |

  5. Nominees

    | | Timothy R. Chi has been a member of our Board of Directors since June 2015. Mr. Chi is the co-founder and Chief Executive Officer of The Knot Worldwide, Inc. (formerly WeddingWire Inc.), a leading global marketplace serving the wedding and events industry worldwide. Previously, Mr. Chi co-founded Blackboard Inc. in 1998, where he pioneered many of Blackboard’s product and strategic initiatives and played a critical role in the success of the company through its public offering in 2004. Mr. Chi holds a B.S. degree in Operations Research/Industrial Engineering from Cornell University and a Master’s of Science degree in Engineering Management from Tufts University. Our Board of Directors has determined that Mr. Chi’s qualifications to serve on our Board of Directors include his experience as a CEO of a major corporation, co-founder of Blackboard, Inc., and his depth of knowledge of social media and the technology industry. | | Timothy R. Chi Age: 47 Director Since: 2015 | |

  6. Nominees

    | DiamondRock Hospitality | 8 | 2024 Proxy Statement |

  7. Nominees

    | | Michael A. Hartmeier has been a member of our Board of Directors since October 2020. Mr. Hartmeier is the former Group Head of Lodging, Gaming and Leisure Investment Banking at Lehman Brothers, and its successor Barclays, which he led from 2000 to 2020. Prior to this role, he served as Group Head of the Gaming Investment Group of Credit Suisse First Boston from 1995 to 2000. Mr. Hartmeier has extensive experience identifying, analyzing and evaluating strategic and financial transactions for brands, management companies and real estate owners in the lodging sector. In the lodging real estate investment trust (“REIT”) sector, he served as advisor on numerous high profile mergers and acquisitions. Mr. Hartmeier received a Masters in Business Administration from Harvard Business School and a B.A. in Economics-Business from the University of California at Los Angeles. While at UCLA, he was awarded the Pacific-10 Conference Medal. He is a CPA (non-practicing) and began his career as an auditor at Price Waterhouse. Mr. Hartmeier is a member of the board of directors of Full House Resorts, Inc. (Nasdaq: FLL). Our Board of Directors has determined that Mr. Hartmeier’s qualifications to serve on our Board of Directors include his extensive experience in finance and advising companies in the lodging sector, including REITs, and his experience advising companies throughout his more than 25-year career in investment banking. | | Michael A. Hartmeier Age: 61 Director Since: 2020 | |

  8. Nominees

    | | Kathleen A. Merrill has been a member of our Board of Directors since February 2019. Mrs. Merrill currently serves as Executive Advisor of Southwest Airlines. Previously, she was the Senior Vice President and Chief Information Officer of Southwest Airlines, a position she held from 2017 to February 2023. In that position, she was responsible for leading all of the airline’s technology efforts to support strategic capabilities. She also served at Southwest Airlines as Vice President of Business Transformation, Corporate Delivery and Technology from 2012 to 2017, as well as Vice President of Strategic Planning and Implementation from 2008 to 2012 and in various technology positions prior to 2008. Prior to joining Southwest Airlines in 2004, Mrs. Merrill held roles at American Airlines and Capital One Auto Finance. Mrs. Merrill received a B.B.A. in marketing from the University of North Texas. Our Board of Directors has determined that Mrs. Merrill’s qualifications to serve on our Board of Directors include her executive experience in the travel industry and her expertise in the field of technology, both of which have become increasingly important in our industry. | | Kathleen A. Merrill Age: 64 Director Since: 2019 | |

  9. Nominees

    | DiamondRock Hospitality | 9 | 2024 Proxy Statement |

  10. Nominees

    | | William J. Shaw has been a member of our Board of Directors since October 2016. He has served as a director of Marriott Vacations Worldwide Corporation (NYSE: VAC) since July 2011 and as Chairman of the Board of Marriott Vacations Worldwide Corporation since November 2011. He served as Vice Chairman of Marriott International, Inc. (Nasdaq: MAR) from May 2009 until his retirement in March 2011. He previously served as President and Chief Operating Officer of Marriott International from 1997 until May 2009. He held several other roles at Marriott International since joining Marriott in 1974. Mr. Shaw serves on the Board of Directors of The Carlyle Group, Inc. He also serves on the Board of Trustees of the University of Notre Dame and J.W. Marriott Family Enterprises. Mr. Shaw previously served on the Board of Directors of Marriott International, Inc. and also served on the Board of Trustees of three funds in the American Family of Mutual Funds. Our Board of Directors has determined that Mr. Shaw's qualifications to serve on our Board of Directors include his extensive management experience with Marriott International, his prominent status in the hospitality industry and his wealth of knowledge in dealing with financial and accounting matters as a result of his prior service in financial and accounting positions at Marriott International, including as its Chief Financial Officer, and his experience as a board member of publicly-traded companies. | | William J. Shaw Age: 78 Director Since: 2016 | |

  11. Nominees

    | | Bruce D. Wardinski has been a member of our Board of Directors since January 2013. Mr. Wardinski is the founder and Chief Executive Officer of Playa Hotels & Resorts N.V. (Nasdaq: PLYA), an owner of all-inclusive resorts located in Mexico and the Caribbean. Prior to forming Playa, Mr. Wardinski served as CEO of Barceló Crestline Corporation (“BCC”) from June 2002 until December 2010. He also served as Chairman, President and CEO of Crestline Capital Corporation (NYSE: CLJ) prior to its acquisition by BCC in June 2002. In 2003, Mr. Wardinski formed and became Chairman of the Board of Highland Hospitality Company. He has also worked with Host Hotels & Resorts, Inc. (NYSE: HST) in the role of Senior Vice President and Treasurer. Mr. Wardinski graduated with honors from the University of Virginia and earned an MBA in Finance from the Wharton School of Business at the University of Pennsylvania. He currently serves as Chairman of ServiceSource Foundation, a non-profit advocacy group representing people with disabilities. Our Board of Directors has determined that Mr. Wardinski’s qualifications to serve on our Board of Directors include his extensive experience in the hospitality industry with both private and public companies. | | Bruce D. Wardinski Age: 63 Director Since: 2013 | |

  12. Nominees

    | DiamondRock Hospitality | 10 | 2024 Proxy Statement |

  13. Nominees

    | | Tabassum S. Zalotrawala has been a member of our Board of Directors since May 2021. Ms. Zalotrawala is Senior Vice President and Chief Development Officer for McDonald’s USA, LLC, a position she has held since April 2023. In this role, Ms. Zalotrawala leads the Restaurant Development team focused on accelerating the pace of McDonald’s restaurant openings, including the real estate, construction, facilities, architecture, strategy/analytics teams and Asset and Portfolio teams and oversees the expansion of McDonald’s in the US and manages the 13,000 US McDonald’s restaurant portfolio. Prior to holding this position, Ms. Zalotrawala was the Chief Development Officer for Chipotle Mexican Grill, a position she held from September 2018 until April 2023. In her role at Chipotle, she led the global execution of digital revenue generating initiatives, including the Chipotlane, which was named one of “The Most Innovative Architecture Projects of 2020” By Fast Company. Prior to joining Chipotle, Ms. Zalotrawala spent over seven years at Panda Restaurant Group as Chief Development Officer and Vice President of Development overseeing real estate, architecture and design, facilities, strategic sourcing and construction of Panda Restaurant Group concepts worldwide. Prior to joining Panda Restaurant Group Ms. Zalotrawala spent over ten years with Arby’s Restaurant Group, Wendy’s Arby’s Group and Triarc Companies in various leadership positions in development. Ms. Zalotrawala started her career in luxury hospitality, designing high profile palaces and mosques in Muscat, Sultanate of Oman. Ms. Zalotrawala has experience in brand development, expansion of restaurant concepts, and implementation of branding strategy and strategic growth. She holds a Bachelor of Fine Arts degree in interior design from the School of Planning & Architecture, American Intercontinental University. In 2018, Ms. Zalotrawala completed the Harvard Business School Advanced Management Program, an intensive program that creates transformational leaders capable of tackling an organization’s toughest challenges. Ms. Zalotrawala was honored with the Exceptional Women Awardee award in 2020. She serves as a member of the Board of Trustees of the International Council of Shopping Centers (ICSC) and is involved in non-profit work as a board member of GLEAM Network. GLEAM is a Global Leadership Enhancement and Mentorship Network serving underrepresented and underserved professionals in the food service industry. Ms. Zalotrawala is also an active member with The National Association of Corporate Directors (NACD), serves on the Pacific Southwest Chapter of NACD and is a certified board leadership fellow. Our Board of Directors has determined that Ms. Zalotrawala’s qualifications to serve on our Board of Directors includes her extensive experience in senior management positions with global responsibility for brand design, real estate development and digital revenue generating initiatives. | | Tabassum S. Zalotrawala Age: 49 Director Since: 2021 | |

  14. Nominees

    | DiamondRock Hospitality | 11 | 2024 Proxy Statement |

  15. Board of Directors

    Board of Directors We are managed under the direction of our Board of Directors. Our directors are: Mark W. Brugger, Timothy R. Chi, Michael A. Hartmeier, Kathleen A. Merrill, William W. McCarten, William J. Shaw, Bruce D. Wardinski and Tabassum S. Zalotrawala. Mr. McCarten is the Chairman of our Board of Directors and Mr. Wardinski is our lead independent director. Each of our directors stands for election annually.

  16. Consideration of Director Nominees

    Consideration of Director Nominees

  17. Environmental Stewardship, Social Responsibility and Governance (ESG)

    | Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards ($)(7) | All Other Compensation ($)(8) | Total ($) | | William W. McCarten(2) (Chairman) | 192,500 | 105,000 | 5,437 | 302,937 | | Bruce D. Wardinski(3) (Lead Director and Compensation Committee Chair) | 132,500 | 105,000 | — | 237,500 | | Timothy R. Chi(3) (Director and Nominating and Corporate Governance Committee Chair) | 102,500 | 105,000 | — | 207,500 | | Michael A. Hartmeier(4) (Director) | 92,500 | 105,000 | — | 197,500 | | Kathleen A. Merrill(5) (Director) | 92,500 | 105,000 | — | 197,500 | | William J. Shaw(3) (Director and Audit Committee Chair) | 107,500 | 105,000 | — | 212,500 | | Tabassum S. Zalotrawala(6) (Director) | 92,500 | 105,000 | 9,722 | 207,222 |

  18. Reasonableness of Non-Employee Director Compensation

    Reasonableness of Non-Employee Director Compensation Our philosophy on director compensation is to pay directors competitively and fairly for the work required. The design of our program is consistent with recognized best practice with the following provisions:

  19. Reasonableness of Non-Employee Director Compensation

    | DiamondRock Hospitality | 40 | 2024 Proxy Statement |

  20. Reasonableness of Non-Employee Director Compensation

    •Retainer-only cash compensation with no fees for attending meetings that is an expected part of board service. •Additional retainers for special roles such as Chairman of the Board, Lead Director and committee chairs to recognize their incremental time and effort. •Significant portion of total compensation in full-value equity shares, for alignment with stockholders, where annual grants are based on a competitive fixed-value formula and vest immediately to avoid director entrenchment. •Meaningful stock ownership requirements of five times the annual cash retainer. •Flexible voluntary deferral provisions and no material benefits or perquisites. •Our 2016 Equity Incentive Plan includes a $500,000 annual compensation limit on all forms of compensation for non-employee directors other than the chairman and vice chairman of our Board of Directors. The 2024 Plan includes a similar $750,000 annual compensation limit on all forms of compensation of non-employee directors other than the chairman and vice chairman. Our Compensation Committee periodically reviews the compensation of our non-employee directors. In 2023, our Compensation Committee engaged FW Cook to conduct a study of non-employee director compensation programs in place at comparable public companies. The comparable companies were the same REITs as were used in competitive comparisons of executive compensation (see Compensation Discussion and Analysis - Use of Competitive Set). Based on the recommendation of FW Cook in August 2023, the annual compensation was increased by $10,000, split equally between the annual cash retainer (increased from $90,000 to $95,000) and equity compensation (increased from $100,000 to $105,000).

  21. Cash Compensation

    | Name | Annual Fee for Board Membership (1) ($) | Annual Fee for Chairman of the Board, Committee Chairs & Lead Director ($) | Total Cash Fees Paid ($) | | William W. McCarten (Chairman) | 92,500 | 100,000 | 192,500 | | Bruce D. Wardinski(1) (Lead Director and Compensation Committee Chair) | 92,500 | 40,000 | 132,500 | | Timothy R. Chi (Director and Nominating and Corporate Governance Committee Chair) | 92,500 | 10,000 | 102,500 | | Michael A. Hartmeier (Director) | 92,500 | — | 92,500 | | Kathleen A. Merrill (Director) | 92,500 | — | 92,500 | | William J. Shaw (Director and Audit Committee Chair) | 92,500 | 15,000 | 107,500 | | Tabassum S. Zalotrawala (Director) | 92,500 | — | 92,500 |

  22. Equity Compensation

    Equity Compensation As part of their regular annual compensation, each of our non-employee directors receives a grant of fully-vested shares of common stock each year. The non-employee directors may elect to defer the receipt of the annual stock award. Those non-employee directors who elect to defer such awards will instead be granted an award of deferred stock units and the deferred stock units will be settled in shares of common stock in a lump sum six months after the director ceases to be a member of our Board of Directors. On May 10, 2023, we issued (i) 12,500 shares of common stock to each of those directors electing to receive the equity award and (ii) 12,500 deferred stock units to each of those directors electing to defer the equity award, both of which had a value of $105,000, based on the closing stock price for our common stock on that date. Mr. Hartmeier and Ms. Zalotrawala elected to defer the receipt of this unrestricted stock award.

  23. 2023 Compensation Program Overview

    | Compensation Component | Description and Purpose | Process/Highlights | | Base Salary | •Fixed compensation necessary to attract and retain executive talent. | •Executive base salaries are reviewed each year by the Compensation Committee with assistance from its compensation consultant. | | | •Based on competitive market, individual role, experience, performance and potential. | •Refer to the subsection entitled “Base Salary” under the discussion of “Compensation Elements” for a three-year history of base salaries for the named executive officers. | | Annual Cash Incentive Compensation | •Performance-based cash incentives that reward achievement of annual performance objectives. | •Based on performance against the joint objectives and the individual objectives, the actual cash incentive awards ranged from 88% to 94% of each executive's target opportunity. | | | •Tied to Company's business plan and strategic goals. | •Refer to the subsection entitled “Cash Incentive Compensation Program” under the discussion of “Compensation Elements” for more detail. | | | •Our 2023 annual cash incentive program for executives was based 90% on achievement of joint objectives common to all executives and 10% based on individual goals specific for each executive. The joint objectives included several financial and strategic objectives, the most heavily weighted of which were Hotel Adjusted EBITDA and Adjusted FFO per Share. | |

  24. 2023 Compensation Program Overview

    | Compensation Component | Description and Purpose | Process/Highlights | | Long-Term Equity Incentive Compensation | •Aligns executive compensation with total stockholder return and hotel market share improvement over multi-year performance and vesting periods. | •Grants are generally made in the first quarter each year. | | | •50% of long-term equity incentives vest subject to pre-established multi-year performance objectives. | •Grants made in 2023 were 50% in performance stock units (“PSUs”) and 50% in time-based restricted stock or LTIP units. | | | •Promotes retention of key talent. | •PSUs may be earned from 0% to 150% of a target number of PSUs. 50% of the PSUs are based on our total stockholder return (“TSR”) relative to a peer group over a three-year performance period and 50% of the PSUs are based on achieving improvement in the market share of our hotels over a three-year performance period. The number of PSUs earned based on relative TSR is subject to a “negative TSR cap” that limits the number of PSUs earned to no more than the target amount if absolute TSR is negative for the performance period. | | | | •Refer to the subsection entitled “Long-Term Incentive Compensation” under the discussion of “Compensation Elements” for more detail. | | Benefits and Limited Perquisites | •Designed to attract and retain high-performing employees. | •All employee plans are reviewed annually. | | | •Includes health and dental insurance, term life insurance, disability coverage and a 401(k) plan match. | •Named executive officers participate in the same benefits plans as all other employees, with the exception of a deferred compensation plan. | | | •Executive officers and certain senior-level employees can participate in a deferred compensation plan, in which participants may defer earned compensation. There is no Company match in effect for the deferred compensation plan. | •Mr. Brugger has never used the annual reimbursement perquisite for certain hotels stays. | | | •As a member of our Board of Directors, Mr. Brugger is entitled to annual reimbursement of up to $10,000 for certain hotel stays. | |

  25. Target Direct Compensation Mix

    Target Direct Compensation Mix The following charts illustrate the target mix between direct compensation elements (base salary, annual cash bonus and long-term equity incentives in the form of time-based restricted stock and PSUs) for our Chief Executive Officer and the average of our other named executive officers (“NEOs”) in 2023.

  26. Pay and Performance Alignment

    Pay and Performance Alignment As the pie graphs above illustrate, the majority of our CEO’s ongoing pay opportunity and approximately half of our other named executive officers’ pay opportunities are performance-based and in the form of long-term equity awards, which are aligned with stockholder interests. As a result, actual pay delivery for the CEO and other named executive officers are closely correlated with performance on both an absolute and relative basis. Our Compensation Committee believes that our long-term incentive program, particularly the PSU component, strongly aligns earned compensation with total stockholder return. As required under SEC rules, the values shown in the Summary Compensation Table and Grants of Plan-Based Awards table in this and prior proxy statements with respect to the PSUs are based on grant-date fair value not earned value.

  27. Compensation Best Practices

    Compensation Best Practices Our executive compensation program incorporates the following best practices: •Our executives’ total compensation opportunity is primarily based on performance, awarded through our annual and long-term incentive compensation programs. •No guarantees of minimum cash incentive payments are provided for executives after the year of hire. •The target pay opportunity for our Chief Executive Officer is approximately 60% and, on average, for our other named executive officers is approximately 50% in the form of long-term equity incentives. •One half of the long-term equity incentives are tied to the achievement of multi-year relative TSR and market share performance goals. •The payout under multi-year relative TSR performance awards may be reduced if our absolute TSR is negative for the performance period, regardless of our relative TSR performance.

  28. Compensation Best Practices

    •Our Compensation Committee requires the personal goal component of the annual cash incentive plan to be specific and measurable. •Our equity plan generally requires a minimum of one-year vesting on any equity awards issued to executives. •There are no stock options outstanding, and the Company has not issued stock options in over a decade. •Any change in control payments under severance agreements are subject to a “double-trigger.” •Named executive officers are required to accumulate and hold a meaningful amount of stock. The ownership target for the Chief Executive Officer is six times his base salary and for all other executive officers is three times their respective base salary. •No perquisites are provided to named executive officers that are not otherwise provided to all employees, except executive officers and certain senior-level employees may participate in our deferred compensation plan. There is no Company match in effect under our deferred compensation plan. •In his capacity as a member of our Board of Directors, Mr. Brugger is entitled to reimbursement up to $10,000 for lodging, meals and certain other expenses at hotels either owned by us or other hotels, which he has never used. •Our Compensation Committee retains and meets regularly with an independent compensation consultant who advises on executive and director compensation. •Our Compensation Committee regularly reviews the Company’s incentive compensation plans to ensure they are designed to create and maintain stockholder value and do not encourage excessive risk. •A clawback policy is in effect to excess compensation received by an executive officer in the event of a restatement of our financial statements. •An anti-hedging policy is in effect to prohibit short sales and the purchase or sale of puts, calls or other derivative securities of the Company. •Pledging of Company securities is prohibited. •Our programs are designed to be financially efficient from tax, accounting, cash flow and share dilution perspectives.

  29. Compensation Committee Procedures, Compensation Consultant and Input of Named Executive Officers

    Compensation Committee Procedures, Compensation Consultant and Input of Named Executive Officers Our Compensation Committee is responsible for determining the amount and composition of compensation paid to our Chief Executive Officer and reviews and approves or makes recommendations to our Board of Directors with respect to the compensation for all other executive officers. Our Compensation Committee exercises its independent judgment in reviewing and approving the executive compensation program as a whole, as well as specific compensation levels for each executive officer.

  30. Compensation Committee Procedures, Compensation Consultant and Input of Named Executive Officers

    | DiamondRock Hospitality | 47 | 2024 Proxy Statement |

  31. Use of Competitive Set

    | Executive (1) | Benchmark | Base Salary | Annual Cash Incentive | Equity | Total Target Direct Compensation | | Mr. Brugger | Chief Executive Officer | 6 of 13 | 6 of 13 | 4 of 13 | 5 of 13 | | Mr. Donnelly | Chief Financial Officer | 5 of 13 | 9 of 13 | 6 of 13 | 7 of 13 | | Mr. Leonard | Chief Operating Officer (1) | 4 of 6 | 5 of 6 | 5 of 6 | 4 of 6 | | Mr. Furbay | Chief Investment Officer (1) | 2 of 5 | 4 of 5 | 5 of 5 | 4 of 5 | | Mr. Tennis | General Counsel (1) | 1 of 8 | 3 of 8 | 2 of 8 | 2 of 8 |

  32. 2.Cash Incentive Compensation Program

    2.Cash Incentive Compensation Program We maintain an annual cash incentive compensation program pursuant to which our executive officers are eligible to earn cash bonuses based upon their achievement of certain objective corporate goals as well as certain individual goals set by our Compensation Committee at the beginning of that fiscal year.

  33. 2.Cash Incentive Compensation Program

    | DiamondRock Hospitality | 50 | 2024 Proxy Statement |

  34. 2.Cash Incentive Compensation Program

    For 2023, our annual cash incentive compensation program was based on two components: (i) joint objectives for all executive officers, weighted 90% and (ii) individual objectives for each officer, weighted 10%.

  35. Individual Strategic Objectives

    | | 2023 Cash Incentive Opportunity (as % of Base Salary) | | | 2023 Cash Incentive Earned | | | | Name | Threshold (%) | Target (%) | Maximum (%) | Target (%) | Base Salary (%) | Value ($) | | Mark W. Brugger | 75 | 150 | 300 | 88 | 131 | 1,092,120 | | Jeffrey J. Donnelly | 45 | 90 | 180 | 94 | 85 | 435,094 | | Justin L. Leonard | 45 | 90 | 180 | 94 | 85 | 435,094 | | Troy G. Furbay | 45 | 90 | 180 | 93 | 84 | 430,489 | | William J. Tennis | 45 | 90 | 180 | 94 | 85 | 386,457 |

  36. 3.Long-Term Incentive Compensation

    3.Long-Term Incentive Compensation Generally, we target providing approximately half of each executive’s target compensation opportunity in the form of long-term equity incentives. However, our Compensation Committee determines, in its sole discretion, the actual amount of equity to be awarded to our executive officers each year reflecting our performance in the prior year, individual performance and competitive levels of long-term incentive compensation among our competitive set. On this basis, our Compensation Committee determined that Mr. Brugger’s long-term equity incentive award should be approximately 60% of his total compensation in order to further align his compensation with the total stockholder return of the Company. We grant equity awards to align the interests of our executives with those of our stockholders, and to create incentives for our executives to protect and grow stockholder value, including through maintenance and growth of our dividend. Our executive officers

  37. 3.Long-Term Incentive Compensation

    | DiamondRock Hospitality | 52 | 2024 Proxy Statement |

  38. 3.Long-Term Incentive Compensation

    are not guaranteed any minimum number of shares of restricted stock or other equity grants. We generally grant equity awards annually in February.

  39. Types of Awards

    Types of Awards We grant an annual award to each executive officer, 50% of which consists of time-based vesting awards of restricted stock or long-term incentive plans units (“LTIP units”) and 50% of which consists of performance stock units, or PSUs, which are earned based on the achievement of specified performance criteria. Each of these types of awards is described in more detail below.

  40. Restricted Stock

    Restricted Stock Fifty percent of the target annual long-term incentive for each executive officer is granted in restricted stock to align the interests of these executive officers with those of our stockholders and to help retain the services of these executives through multi-year vesting schedules. Our restricted stock awards generally vest in three equal annual installments from the date of grant. All dividends on unvested shares accrue and are paid out only when the underlying restricted shares vest.

  41. LTIP Units

    LTIP Units Our Compensation Committee provides each executive officer with the opportunity to elect to receive LTIP units in lieu of restricted stock. LTIP units are designed to qualify as “profits interests” in DiamondRock Hospitality Limited Partnership, the Company's operating partnership, for federal income tax purposes, meaning that initially they are not economically equivalent in value to a share of our common stock, but over time can increase in value to one-for-one parity with common stock by operation of special tax rules applicable to profits interests. LTIP units are designed to offer executives a long-term incentive comparable to restricted stock, while allowing them to enjoy a more favorable income tax treatment. Each LTIP unit awarded is deemed equivalent to an award of one share of common stock reserved under our incentive equity plan. The key difference between LTIP units and restricted stock is that at the time of award, LTIP units do not have full economic parity with common stock, but can achieve such parity over time upon the occurrence of specified events in accordance with partnership tax rules. Until and unless such parity is reached, the value that an executive will realize for a given number of vested LTIP units is less than the value of an equal number of shares of our common stock. We believe that these full value awards provide alignment with our stockholders by fully reflecting the total return we provide to our stockholders, including dividends or other distributions as well as potential future increases or decreases in our stock price.

  42. Performance Stock Units

    Performance Stock Units PSUs entitle each executive officer to earn shares of common stock subject to the achievement of certain performance targets. 50% of the PSUs may be earned based on three-year relative stockholder return and 50% may be earned based on achieving improvement in the market share for each of the Company’s hotels over the three-year performance period. Each executive officer is granted a target number of PSUs. The actual number of PSUs earned will range from zero to 150% of the target number of PSUs. Earned shares, if any, vest at the end of the three-year performance period. Dividends are not paid currently on the common stock underlying the PSUs; instead, the dividends are treated as “re-invested” and are only earned to the extent the underlying PSU is also earned. PSUs are settled at the end of the three-year performance period by the issuance of a share of common stock for every PSU earned. The relative total stockholder return PSUs are based on the Company’s percentile rank relative to a peer group at the end of the three-year performance period. The peer group is the Lodging REIT subset referred to above, with the addition of Host Hotels & Resorts. The number of PSUs earned is calculated in accordance with the following:

  43. Performance Stock Units

    | DiamondRock Hospitality | 53 | 2024 Proxy Statement |

  44. Performance Stock Units

    | DiamondRock Hospitality Company Relative TSR Percentile Rank | Percent of Target PSUs Earned | | < 30th Percentile | 0% | | 30th Percentile | 50% | | 50th Percentile | 100% | | > or Equal to 75th Percentile | 150% |

  45. Performance Stock Units

    The number of PSUs earned is linearly interpolated for achievement in between each of the performance levels. The number of PSUs earned is subject to a negative TSR cap that limits the number of PSUs earned if absolute TSR is negative for any performance period. The Company's relative TSR for the three-year performance period ended February 2024 ranked at the 68th percentile, which would have resulted in 136% of the target number of relative total stockholder PSUs being earned. However, because our absolute TSR was negative for the performance period, the payout was capped at 100% of target. The hotel market share PSUs are based on improvement in market share for each of the Company’s hotels during the three-year performance period. This is determined by establishing a baseline for each hotel of how well it is performing against its competitive set in its market at the beginning of the performance period. This is based on a report prepared for each hotel by STR Global, a well-recognized and universally accepted benchmarking service for the hospitality industry (“STR Report”). Improving the market share of our hotels leads to stronger results for our entire portfolio. At the end of the three-year performance period, a STR Report is again generated for each of our hotels. If 50% of our hotels have shown improvement by capturing a larger share of the market from its competitors over that three-year period, then the target number of PSUs for this component has been earned. The number of PSUs earned is calculated in accordance with the following:

  46. Performance Stock Units

    | Percentage of Hotels with Market Share Improvement | Percent of Target PSUs Earned | | < 30% | 0% | | 30% | 50% | | 50% | 100% | | > or Equal to 75% | 150% |

  47. Performance Stock Units

    The number of PSUs earned is linearly interpolated for achievement in between each of the performance levels. For the hotel market share PSUs granted in 2021 and vested in February 2024, each executive officer earned 91.1% of the target hotel market share PSUs based on 46% of the Company's hotels improving market share over the performance period. The significant disruption to the travel industry as a result of the COVID-19 pandemic caused many hotels, both ours and those in our competitive sets, to close or operate with limited occupancy in 2020. As a result, the relevant data required to determine our market share performance for 2020, which was the intended baseline for the 2021 market share PSU award, was not available. Therefore, prior to the grant of PSUs in 2021, our Compensation Committee determined that the performance period should be two years, comparing the trailing 12-month market share of our hotels on December 31, 2021 to the trailing 12-month market share of our hotels on December 31, 2023. For the PSUs granted in 2022, the performance period reverted to three years. Our Compensation Committee has evaluated several long-term incentive alternatives over the years to determine a mix that best supports our objectives and is effective for us, given our REIT structure. Our Compensation Committee believes that the PSU program, as currently designed, aligns our interests with those of stockholders because it calibrates earned compensation to our performance, measured both on an absolute basis and relative to our peers, which are investment alternatives for our stockholders. Our Compensation Committee believes that our long-term incentive compensation program, particularly the PSU component, strongly aligns earned compensation with total stockholder return. As required under SEC rules, the values shown in the Summary

  48. Performance Stock Units

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  49. Performance Stock Units

    Compensation Table and Grants of Plan-Based Awards table in this and prior proxy statements with respect to the PSUs are based on grant-date fair value not earned value.

  50. Severance Agreements

    Severance Agreements We have entered into severance agreements with each of our named executive officers, which provide them with certain severance benefits if employment ends under certain circumstances. We believe that the severance agreements will benefit us by helping to attract and retain the executives and by allowing them to focus on their duties without the distraction of the concern for their personal situations in the event of a termination of their employment, especially in connection with a possible change in control of the Company. Further detail regarding the severance agreements is provided as part of the Executive Officer Compensation Summary below.

  51. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table sets forth the information required by Item 402 of Regulation S-K promulgated by the SEC. The amounts shown represent the compensation paid to our named executive officers for the years shown as consideration for services rendered to the Company. With respect to long-term equity incentive awards, the dollar amounts indicated in the table under “Stock Awards” are the aggregate grant date fair value of awards computed in accordance with FASB ASC Topic 718. Such aggregate grant date fair values do not take into account any estimated forfeitures related to service-vesting conditions. With respect to performance-based restricted share awards, the dollar value computed is based on the probable outcome of the performance conditions as of the grant date of the award.

  52. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | | Mark W. Brugger President and Chief Executive Officer | 2023 | 832,000 | — | 3,000,000 | 1,092,120 | 13,200 | 4,937,320 | | | 2022 | 800,000 | — | 3,000,000 | 2,112,443 | 12,200 | 5,924,643 | | | 2021 | 775,000 | — | 6,000,000 | 1,902,774 | 11,600 | 8,689,374 | | Jeffrey J. Donnelly Executive Vice President and Chief Financial Officer | 2023 | 511,700 | — | 1,100,000 | 435,094 | 13,200 | 2,059,994 | | | 2022 | 492,000 | — | 1,000,000 | 799,177 | 12,200 | 2,303,377 | | | 2021 | 464,000 | — | 1,900,000 | 694,738 | 11,600 | 3,070,338 | | Justin L. Leonard(1) Executive Vice President, Asset Management and Chief Operating Officer | 2023 | 511,700 | — | 900,000 | 435,094 | 13,200 | 1,859,994 | | | 2022 | 225,500 | — | 1,325,000 | 749,362 | 9,020 | 2,308,882 | | | 2021 | — | — | — | — | — | — | | Troy G. Furbay Executive Vice President and Chief Investment Officer | 2023 | 511,700 | — | 950,000 | 430,489 | 13,200 | 1,905,389 | | | 2022 | 492,000 | — | 900,000 | 777,922 | 12,200 | 2,182,122 | | | 2021 | 478,000 | — | 1,800,000 | 715,700 | 11,600 | 3,005,300 | | William J. Tennis Executive Vice President and General Counsel | 2023 | 454,500 | — | 650,000 | 386,457 | 13,200 | 1,504,157 | | | 2022 | 437,000 | — | 650,000 | 704,921 | 12,200 | 1,804,121 | | | 2021 | 424,000 | — | 1,050,000 | 615,767 | 11,600 | 2,101,367 |

  53. 2023 Summary Compensation Table

    (1)Mr. Leonard's employment with the Company commenced on July 18, 2022. (2)The amounts reported under this column include restricted stock, LTIP unit and PSU awards, which are described above under the heading “3. Long-Term Incentive Compensation.” The assumptions used in determining the grant date fair values of the equity awards are set forth in Note 7

  54. 2023 Summary Compensation Table

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  55. 2023 Summary Compensation Table

    to our consolidated financial statements, which are included in our Annual Report on Form 10-K for the year ended December 31, 2023. The amounts reported for 2021 include special retention awards granted to certain executives to ensure their retention in light of increased compensation for lodging industry talent. The table above shows the grant date fair value of the PSU awards based on probable outcome of the applicable performance conditions. The value of the PSU awards is dependent on the Company’s performance over a three-year period and there is no assurance that the awards will be earned. The maximum dollar value of the PSU awards granted in 2023 are as follows: Mr. Brugger - $2,250,000, Mr. Donnelly - $825,000, Mr. Leonard - $675,000, Mr. Furbay - $712,500 and Mr. Tennis - $487,500. (3)All Other Compensation represents the annual 401k match for each executive.

  56. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information with respect to plan-based incentive awards granted in 2023 to our named executive officers.

  57. Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Mark W. Brugger | | 624,000 | 1,248,000 | 2,496,000 | — | — | — | — | — | | | 2/23/2023 | — | — | — | — | — | — | 167,785 | 1,500,000 | | | 2/23/2023 | — | — | — | 82,619 | 165,238 | 247,857 | — | 1,500,000 | | Jeffrey J. Donnelly | | 230,265 | 460,530 | 921,060 | — | — | — | — | — | | | 2/23/2023 | — | — | — | — | — | — | 61,521 | 550,000 | | | 2/23/2023 | — | — | — | 30,294 | 60,587 | 90,881 | — | 550,000 | | Justin L. Leonard | | 230,265 | 460,530 | 921,060 | — | — | — | — | — | | | 2/23/2023 | — | — | — | — | — | — | 50,336 | 450,000 | | | 2/23/2023 | — | — | — | 24,786 | 49,571 | 74,357 | — | 450,000 | | Troy G. Furbay | | 230,265 | 460,530 | 921,060 | — | — | — | — | — | | | 2/23/2023 | — | — | — | — | — | — | 53,132 | 475,000 | | | 2/23/2023 | — | — | — | 26,163 | 52,325 | 78,488 | — | 475,000 | | William J. Tennis | | 204,525 | 409,050 | 818,100 | — | — | — | — | — | | | 2/23/2023 | — | — | — | — | — | — | 36,353 | 325,000 | | | 2/23/2023 | — | — | — | 17,901 | 35,802 | 53,703 | — | 325,000 |

  58. Grants of Plan-Based Awards

    (1)At a Compensation Committee meeting held on February 27, 2024, we awarded each of our named executive officers, pursuant to the 2023 cash incentive compensation program, the following amounts: Mr. Brugger - $1,092,120; Mr. Donnelly - $435,094; Mr. Leonard - $435,094; Mr. Furbay - $430,489 and Mr. Tennis - $386,457. These amounts are reported as “Non-Equity Incentive Plan Compensation” in the Summary Compensation Table. (2)Represents PSU awards. See “3. Long-Term Incentive Compensation” above for a description of the PSU awards. (3)Represents the grant date fair value of the restricted stock or LTIP unit awards as determined in accordance with FASB ASC Topic 718.

  59. Grants of Plan-Based Awards

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  60. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table sets forth information with respect to outstanding equity awards held by the named executive officers as of December 31, 2023. The outstanding equity awards listed below may be subject to accelerated vesting as further discussed under "Severance Agreements" below. The aggregate dollar values indicated in the table below for equity incentive plan awards are the market or payout values and not the ASC 718 values or the compensation expense recognized by the Company on its financial statements for fiscal year 2023 with respect to its long-term equity incentive plan awards.

  61. Outstanding Equity Awards as of December 31, 2023

    | Name | Grant Date | Number of Shares or Units of Stock or LTIP Units That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested(2) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(3) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) ($) | | Mark W. Brugger | 3/2/2021 | 53,192(4) | 499,473 | 246,194 | 2,311,762 | | | 3/2/2021 | 319,149(5) | 2,996,809 | — | — | | | 2/22/2022 | 104,603(6) | 982,222 | 237,100 | 2,226,369 | | | 2/23/2023 | 167,785(7) | 1,575,501 | 250,616 | 2,353,284 | | Jeffrey J. Donnelly | 3/2/2021 | 16,844(4) | 158,165 | 77,963 | 732,073 | | | 3/2/2021 | 101,064(5) | 948,991 | — | — | | | 2/22/2022 | 34,867(6) | 327,401 | 79,034 | 742,129 | | | 2/23/2023 | 61,521(7) | 577,682 | 91,892 | 862,866 | | Justin L. Leonard | 8/9/2022 | 56,867(8) | 533,981 | 107,102 | 1,005,688 | | | 2/23/2023 | 50,336(7) | 472,655 | 75,185 | 705,987 | | Troy G. Furbay | 3/2/2021 | 15,958(4) | 149,846 | 73,859 | 693,536 | | | 3/2/2021 | 95,745(5) | 899,046 | — | — | | | 2/22/2022 | 31,381(6) | 294,668 | 71,129 | 667,901 | | | 2/23/2023 | 53,132(7) | 498,909 | 79,360 | 745,190 | | William J. Tennis | 3/2/2021 | 11,524(4) | 108,210 | 53,343 | 500,891 | | | 3/2/2021 | 42,553(5) | 399,573 | — | — | | | 2/22/2022 | 22,664(6) | 212,815 | 51,371 | 482,374 | | | 2/23/2023 | 36,353(7) | 341,355 | 54,303 | 509,905 |

  62. Outstanding Equity Awards as of December 31, 2023

    (1)Represents the number of unvested time-based restricted stock and LTIP unit awards as of December 31, 2023. (2)Based on the closing price of our common stock on December 29, 2023, which was $9.39. (3)Represents PSU awards, which are described at “3. Long-Term Incentive Compensation” above. In accordance with the SEC rules, the amounts shown represent the maximum number of units that may vest (and settle in the form of common stock) under this performance-based award. (4)Represents a restricted stock award that vests on February 27, 2024, subject to the executive's continued employment. (5)Represents a restricted stock award that vests as follows: 25% on February 27, 2024, 25% on February 27, 2025 and 50% on February 27, 2026, subject to the executive's continued employment, except for Mr. Tennis's award which vests 100% on February 27, 2024. (6)Represents a restricted stock award that vests ratably on February 27 of 2024 and 2025, subject to the executive's continued employment.

  63. Outstanding Equity Awards as of December 31, 2023

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  64. Outstanding Equity Awards as of December 31, 2023

    (7)Represents a restricted stock award, or with respect to Messrs. Brugger, Furbay and Tennis a LTIP unit award. Each award vests ratably on February 27 of 2024, 2025 and 2026, subject to the executive's continued employment. (8)Represents a LTIP unit award that vests ratably on August 9 of 2024, 2025, 2026 and 2027, subject to the executive's continued employment.

  65. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 The following table presents, for each of our named executive officers, the shares of common stock that were acquired upon vesting of restricted stock and PSU awards and the related value realized during the fiscal year ended December 31, 2023.

  66. Option Exercises and Stock Vested in 2023

    | Name | Number of Shares Acquired on Vesting of Restricted Stock (#) | Number of LTIP Units Acquired on Vesting of LTIP Unit Awards (#) | Number of Shares Acquired on Vesting of PSUs(1) (#) | Value Realized on Vesting(2) ($) | | Mark W. Brugger | 157,684 | — | 173,746 | 2,949,727 | | Jeffrey J. Donnelly | 112,172 | — | 46,332 | 1,410,686 | | Justin L. Leonard | — | 14,217 | — | 126,531 | | Troy G. Furbay | 31,647 | 15,657 | 52,123 | 884,900 | | William J. Tennis | 22,587 | 11,309 | 37,645 | 636,715 |

  67. Option Exercises and Stock Vested in 2023

    (1)The number of shares issued upon the vesting of PSU awards granted in 2020 equaled 103.4% of the target award. (2)Based on the closing price of our common stock on the vesting date, which was $8.90.

  68. Nonqualified Deferred Compensation Plan

    Nonqualified Deferred Compensation Plan In 2014, our Board of Directors approved the implementation of a deferred compensation plan that enables our named executive officers, as well as other senior management employees, to defer their cash and equity compensation. The amounts deferred are not included in the participant’s current taxable income and, therefore, are not currently deductible by us. With respect to deferred cash compensation, the participants select from a limited number of mutual funds which serve as measurement funds, and the deferred amounts are increased or decreased to correspond to the market value of the mutual fund investments. Because the measurement funds are publicly traded securities, we do not consider any of the earnings credited under the deferred compensation plan to be “above market.” We do not provide any matching contribution to any participant, although the plan does permit such contributions.

  69. Nonqualified Deferred Compensation Plan

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  70. Nonqualified Deferred Compensation Plan

    The following table shows the deferrals made by our named executive officers to the deferred compensation plan during the year ended December 31, 2023, the earnings (losses) and withdrawals/distributions during the year, and the aggregate account balance under the deferred compensation plan as of December 31, 2023.

  71. Nonqualified Deferred Compensation Plan

    | Name | Type of Compensation | Executive Contributions in 2023 ($)(1) | Company Contributions in 2023 ($) | Aggregate Earnings in 2023 ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at 12/31/2023 ($) | | Mark W. Brugger | Cash | — | — | 221,979 | — | 1,133,805 | | | Equity | — | — | 1,032,992 | — | 8,083,166 | | Jeffrey J. Donnelly | Cash | — | — | — | — | — | | | Equity | 536,225 | — | 62,926 | — | 827,128 | | Justin L. Leonard | Cash | — | — | — | — | — | | | Equity | — | — | — | — | — | | Troy G. Furbay | Cash | — | — | 259,000 | — | 1,562,880 | | | Equity | 463,895 | — | 438,980 | — | 3,724,600 | | William J. Tennis | Cash | — | — | 275,345 | — | 2,031,224 | | | Equity | 335,041 | — | 354,369 | — | 2,982,086 |

  72. Nonqualified Deferred Compensation Plan

    (1)Reflects the deferral of base salary, annual cash incentive compensation and/or long-term equity incentive compensation received in 2023 under the deferred compensation plan. Such amounts are reflected in the Summary Compensation Table. Benefits under the deferred compensation plan are generally paid in a lump sum upon the participant’s termination of employment prior to retirement, death or in a lump sum or annual installments for a period of up to ten years (as previously selected by the participant) upon the participant’s retirement. Payments will generally start or be made in January following the year of termination or retirement. Participants may also, at the time of deferral, elect a fixed distribution date, provided that such distribution date is at least five years after the end of the calendar year in which amounts are deferred.

  73. Pay Ratio Disclosure Rule

    Pay Ratio Disclosure Rule Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (“PEO”). The PEO of our Company is Mr. Brugger. We believe that our compensation philosophy must be consistent and internally equitable to motivate our employees to create stockholder value. The purpose of the new required disclosure is to provide a measure of the equability of pay within the organization. We are committed to internal pay equity, and our Compensation Committee monitors the relationship between the pay our PEO receives and the pay our non-executive employees receive. For 2023, the annual total compensation of Mr. Brugger of $4,937,320 as shown in the Summary Compensation Table above, was approximately 18.9 times the annual total compensation of $260,949 of a median employee calculated in the same manner. We identified the median employee using the annual base salary and target annual cash incentive compensation, as of December 31,

  74. Pay Ratio Disclosure Rule

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  75. Pay Ratio Disclosure Rule

    2023, plus the grant date fair value of any long-term equity incentive awards granted in 2023 for all individuals, who were employed by us on December 31, 2023, the last day of our payroll year (whether employed on a full-time, part-time, or seasonal basis).

  76. Pay Versus Performance Disclosure

    Pay Versus Performance Disclosure Provided below is the Company’s “pay versus performance” disclosure as required pursuant to Item 402(v) of Regulation S-K promulgated under the Exchange Act. As required by Item 402(v), we have included: •A list of the most important measures that our Compensation Committee used in 2023 to link a measure of pay calculated in accordance with Item 402(v) (referred to as “compensation actually paid,” or “CAP”) to Company performance; •A table that compares the total compensation of our named executive officers (“NEOs”) as presented in the Summary Compensation Table (“SCT”) to CAP and that compares CAP to specified performance measures; and •Graphs that describe: •the relationship between our total shareholder return (“TSR”) and the TSR of the Dow Jones U.S. Hotel & Lodging REITs Index (“Peer Group TSR”); and •the relationships between CAP and our cumulative TSR, GAAP net income and our Company selected measure, Hotel Adjusted EBITDA. This disclosure has been prepared in accordance with Item 402(v) and does not necessarily reflect value actually realized by the executives or how our Compensation Committee evaluates compensation decisions in light of Company or individual performance. In particular, our Compensation Committee has not used CAP as a basis for making compensation decisions, nor does it use GAAP net income for purposes of determining incentive compensation. Please refer to our Compensation Discussion and Analysis (“CD&A”) on pages 29 to 45 for a discussion of our executive compensation program objectives and the ways in which we align executive compensation pay with performance.

  77. Pay Versus Performance Table

    Pay Versus Performance Table Below is the disclosure for our Chief Executive Officer (“CEO”) and the average of our NEOs other than the CEO for 2023, 2022, 2021 and 2020.

  78. Pay Versus Performance Table

    | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | Year | Summary Compensation Table Total for CEO ($) | Compensation Actually Paid to CEO ($) | Average Summary Compensation Table Total for Non-CEO NEOs ($) | Average Compensation Actually Paid to Non-CEO NEOs ($) | Value of Initial Fixed $100 Investment Based on: | | GAAP Net Income (in millions) ($) | Hotel Adjusted EBITDA (in millions) ($) | | | | | | | Company Total Shareholder Return ($) | Peer Group Total Shareholder Return(1) ($) | | | | 2023 | 5,049,831 | 6,441,364 | 1,842,703 | 2,171,963 | 87 | 99 | 87 | 301 | | 2022 | 5,924,643 | 4,450,994 | 1,950,840 | 958,096 | 75 | 77 | 110 | 312 | | 2021 | 8,689,374 | 9,994,674 | 2,845,576 | 3,174,528 | 87 | 81 | (195) | 115 | | 2020 | 4,658,275 | 2,313,405 | 1,621,075 | 1,088,121 | 74 | 68 | (396) | (38) |

  79. Pay Versus Performance Table

    (1) "Peer Group" TSR is the Dow Jones U.S. Hotel & Lodging REITs Index. Column (b): Reflects the compensation amounts reported in the Summary Compensation Table for Mr. Brugger, our CEO, for each of the respective years shown. Column (c): CAP to our CEO is computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, reconciliation of the adjustments made from SCT total compensation to CAP for Mr. Brugger is set forth following the footnotes to this table. Column (d): For 2023, other NEOs are Messrs. Donnelly, Leonard, Furbay and Tennis. For 2022, other NEOs are Messrs. Donnelly, Healy, Furbay, Tennis, and Leonard. For 2021 and 2020, other NEOs are Messrs. Donnelly, Healy, Furbay, and Tennis. Column (e): Average CAP to our other NEOs is computed in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. In accordance with SEC rules, reconciliation of the adjustments made from SCT total compensation to CAP for the average of the other NEOs is set forth following the footnotes to this table. Column (f): Represents the cumulative TSR of the Company for an initial investment of $100 on December 31, 2019 through and including the end of the fiscal year for each row in the table. Column (g): Represents the cumulative TSR of the Dow Jones U.S. Hotel & Lodging REITs Index, which is an industry index reported in the performance graph included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for an initial investment of $100 on December 31, 2019 through and including the end of the fiscal year for each row in the table. Column (h): GAAP net income as reported in the Consolidated Statements of Income in the Company's Annual Report on Form 10-K for each fiscal year in the table. Column (i): The Company's Hotel Adjusted EBITDA, which is the Company-Selected Measure, as calculated for purposes of our annual incentive plan for 2023. Refer to "Non-GAAP Measures" in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2023 for a definition of Hotel Adjusted EBITDA, which is a non-GAAP financial measure, and a reconciliation of Hotel Adjusted EBITDA to GAAP net income.

  80. Pay Versus Performance Table

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