DEF 14A of Chatham Lodging Trust, Apr 2, 2024

DEF 14A of Chatham Lodging Trust

Filed Apr 2, 2024 · FY20230001476045-24-000025

Open on EDGAR

  1. Nominees for Election at the Annual Meeting

    Nominees for Election at the Annual Meeting The terms of office for our trustees, Edwin B. Brewer, Jr., Jeffrey H. Fisher, David Grissen, Mary Beth Higgins, Robert Perlmutter, Rolf E. Ruhfus and Ethel Isaacs Williams will expire at the Annual Meeting. The Nominating and Corporate Governance Committee recommended for nomination, and the Board has nominated Ms. Higgins, Ms. Williams and each of Messrs. Brewer, Grissen, Fisher, Perlmutter and Ruhfus to serve as trustees of our Company for one-year terms expiring at our 2025 annual meeting of shareholders and until their successors are duly elected and qualified. Unless a shareholder specifies otherwise, or does not return the enclosed proxy, each shareholder’s common shares represented by the enclosed proxy will be voted FOR the election of the nominees to serve as trustees until the 2025 annual meeting and until their successors are elected and qualified. Each nominee has indicated his or her willingness to serve if elected. While not anticipated, if any nominee shall become unavailable or unwilling to serve as a trustee for any reason, the persons named as proxies on the proxy card may vote for any substitute nominee proposed by the Board of Trustees. The Board of Trustees unanimously recommends that you vote FOR each of the trustee nominees described in this Proposal 1. The following table and biographical descriptions set forth information with respect to the seven trustee nominees for election at the Annual Meeting whose terms of office will expire at the Annual Meeting, and the continuing trustees, whose terms of office will expire at our 2025 annual meeting of shareholders.

  2. Nominees for Election at the Annual Meeting

    | Trustee Nominees for Election at the Annual Meeting (If Elected, Term will Expire at the 2025 Annual Meeting of Shareholders) | | | | Name | Age | Position | | Edwin B. Brewer, Jr. | 61 | Trustee | | Jeffrey H. Fisher | 68 | Chairman, President and Chief Executive Officer | | David Grissen | 67 | Trustee | | Mary Beth Higgins | 66 | Trustee | | Robert Perlmutter | 62 | Trustee | | Rolf E. Ruhfus | 79 | Trustee | | Ethel Isaacs Williams | 61 | Trustee |

  3. Nominees for Election at the Annual Meeting

    The Board does not have a policy with respect to trustees’ attendance at annual meetings of shareholders, and, because of the routine nature of the annual meetings and historical and anticipated low levels of in-person shareholder participation at the annual meetings, trustees are not expected to attend the Annual Meeting in person. All of the trustees attended our annual meeting of shareholders either in person or telephonically in 2023.

  4. NOMINEES FOR ELECTION AT THE ANNUAL MEETING

    NOMINEES FOR ELECTION AT THE ANNUAL MEETING Edwin B. Brewer, Jr. Mr. Brewer has been a trustee of the Company since January 2017. Prior to March 2019, he was an Executive Director – US Student Housing with Greystar Real Estate Partners. He served as Executive Vice President, Chief Financial Officer and Treasurer of Educational Realty Trust, Inc. (NYSE: EDR) from August 2014 to September 2018. From 2007 through 2012, Mr. Brewer served as Executive Vice President and Chief Financial Officer for Sedgwick Claims Management Services, Inc., the leading provider of technology-enabled claims and productivity management solutions. He was responsible for internal and external financial reporting, income taxes, real estate, budgeting, treasury and internal auditing. From 1983 to 2007, Mr. Brewer worked at PricewaterhouseCoopers where he rose to the position of partner with a client base focused on public and private real estate investment trusts ("REITs", and each a "REIT"). A certified public accountant (inactive), Mr. Brewer has a bachelor’s degree in commerce and business administration from the University of Alabama. The Board of Trustees, upon the recommendation of the Nominating and Corporate Governance Committee, has determined that Mr. Brewer should serve as a trustee due to his financial expertise and extensive experience with REITs as a Chief Financial Officer of a formerly NYSE-listed REIT and that he should serve on the Audit Committee and the Nominating and Corporate Governance Committee due to his former role as Chief Financial Officer of a publicly traded REIT.

  5. Trustee Compensation

    | Name(1) | Fees Earned or Paid in Cash | Share Awards (2) | Total | | Edwin B. Brewer, Jr. | $75,000 | $70,000 | $145,000 | | Thomas J. Crocker(3) | $12,500 | $0 | $12,500 | | David Grissen | $62,500 | $70,000 | $132,500 | | Mary Beth Higgins | $62,500 | $70,000 | $132,500 | | Robert Perlmutter | $25,000 | $120,000 | $145,000 | | Rolf E. Ruhfus | $50,000 | $70,000 | $120,000 | | Ethel Isaacs Williams | $60,000 | $70,000 | $130,000 |

  6. 2023 Business Highlights

    2023 Business Highlights •Produced RevPAR growth of 6.1%, exceeding industry RevPAR performance by approximately 25% •Highest RevPAR of all select-service lodging REITs •Repaid approximately $150 million of maturing debt using available liquidity and new debt issuance •Successfully issued approximately $83 million of fixed-rate CMBS debt •Reduced overall leverage ratio from 27% at January 1, 2023 to 25% at December 31, 2023 •Reduced net debt by $26 million in 2023 •Entered into contract to sell the 24-year-old Hilton Garden Inn Denver Tech Center for $18 million ($24 million including foregone renovation) at an approximate 4% capitalization rate on 2023 net operating income (sold in January 2024) •Committed to increase the percentage of women on the Board to at least 30% by the end of 2025 •We participated in the Global Real Estate Sustainability Benchmark (“GRESB”) for the second time and our overall score increased 9% from 75/100 to 82/100, ranking 31st out of 115 listed companies in the Americas region, and 2nd out of 6 in its peer group (related to 2022 performance) •Chatham earned four of five GRESB Stars •Chatham earned 27 of 30 available points on the Management and Performance components •Chatham was awarded GRESB’s “Green Star” for achieving a score higher than 50% of the points allocated to the Management and Performance components

  7. 2023 Compensation Highlights

    2023 Compensation Highlights •Base Salaries - No increases to NEO base salaries for 2023 and 2024 (base salary levels were last increased for 2022) •Cash Bonuses – No increases to cash bonus targets ◦The portion of the cash bonus program allocated to objective financial performance was increased to 60% for 2023 (from 50% in 2022) and the performance metrics were diversified to include RevPAR Growth and Gross Operating Profit ◦2023 bonuses were achieved below target and reflect a year-over-year decrease of 26% to 31% for our NEOs •Equity Awards – No increases to the target value of 2023 equity awards (granted in 2024) ◦Annual equity awards are granted 60% in performance-based awards and 40% in time-based shares ◦An absolute TSR modifier was added to the 2023 performance-based awards that reduces payouts by 25% if absolute TSR is negative over the performance period •LTIP Units – Unearned performance-based units are not entitled to distributions equivalent to common stock dividends While time-based LTIP units, whether vested or not, receive distributions equivalent to common stock dividends performance-based LTIP units receive a partial 10% tax-related distribution until the performance period ends and then a 90% catch-up on any earned award amount.

  8. Key Features of Our Executive Compensation Program

    Key Features of Our Executive Compensation Program Our executive compensation program is designed to (i) attract and retain executives capable of managing our hotel operations and assets, (ii) motivate management to successfully execute our business plan, and (iii) align management’s interests with its shareholders. We believe our compensation program demonstrates a strong pay-for-performance alignment, including: •Pay-for-Performance Alignment – Our incentive programs are based on challenging goals and are subject to meaningful changes in payout levels depending on our annual and long-term performance results. Since 2015, our CEO’s annual cash incentives have paid out between 80% to 142% of target and is aligned with our short-term performance. Since 2015, our performance-based long-term incentives have been earned between 0% and 135% of target shares/units granted and is directly tied to our three-year TSR performance (both on an absolute and relative basis). •Significant Alignment with Shareholders – Most of the compensation paid to our executives is in the form of equity awards (including approximately 60% of our CEO’s target compensation) resulting in the majority of executive pay tied to the Company’s long-term TSR performance. Additionally, 60% of the equity awards are in the form of performance-based equity that may be forfeited if certain goals are not satisfied. •Commitment to Strong Governance – We are committed to maintaining strong governance features that effectively provide risk oversight of our compensation structure including: •Share ownership requirements, including 6x base salary for our CEO •Anti-hedging and anti-pledging policies •Majority of equity granted is in performance-based awards •Caps on annual cash awards and equity award payouts •Equity award payouts reduced if TSR is negative over the performance period •Multiple performance factors tied to our overall business strategy •Range of payouts (not all-or-nothing) •Double-trigger requirement for vesting of equity awards •Clawback policy for executive officers •Calibrate Pay Relative to Our Size – We compete primarily with companies that own and invest in hotel properties in terms of talent, investment dollars and strategic business opportunities. Most of these companies are larger than us but reflect our most direct competitors. To recognize this fact, we use peer group data to understand incentive plan structures at comparable organizations. We also use this competitor set to understand the cost of talent, while recognizing that our pay needs to be calibrated relative to our size. Accordingly, peer group benchmarking results are size-adjusted and significantly discounted relative to the absolute dollar amounts paid to our competitors, and those reduced amounts are used to evaluate our compensation elements and levels.

  9. Best Practices

    | What We Do | What We Don't Do | | ✓ Maintain a short-term incentive program that is performance oriented and is typically based on Company performance metrics and individual performance objectives | X No guaranteed minimum short-term incentive or long-term incentive payouts or annual salary increases | | ✓ Use total stockholder return (“TSR”) as the sole performance metric for our performance share units that are tied to multi-year performance | X No tax gross-ups upon a change in control | | ✓ Tie a majority of equity awards to performance-based awards | X No pledging or hedging activities permitted by our executives and trustees | | ✓ Limit the maximum payments on annual cash and equity awards. | X No plan design features that encourage excessive or imprudent risk taking | | ✓ Maintain meaningful executive and independent trustee stock ownership policy: | X No dividends on unearned performance stock units | | • 6x for our Chief Executive Officer | X No grants of stock options | | • 3x for COO; 2x for CFO | X No supplemental executive retirement plans | | • 4x annual retainer for independent trustees (increased from 3x to 4x by Board in 2023) | X No grants of one-time retention awards during the worst era in the history of lodging REITs and when share prices were meaningfully depressed | | ✓ Engage an independent compensation consultant | | | ✓ Conduct an annual peer group review to ensure total compensation is properly benchmarked | | | ✓ Offer limited perquisites | | | ✓ Maintain an incentive compensation clawback policy, allowing the Company to recover annual and/or long-term incentive compensation in certain situations (amended in 2023 to comply with new SEC requirements) | | | ✓ Annual advisory vote on executive compensation | | | ✓ Compensation Committee comprised solely of independent trustees | | | ✓ Executive severance policies require double trigger for change in control payments | | | ✓ Diversified financial metrics for calculating 60% of annual cash bonus by including RevPAR Growth and Gross Operating Profit in addition to AFFO | |

  10. Role of the Compensation Consultant

    Role of the Compensation Consultant For 2022 and 2023, the Compensation Committee engaged an independent compensation consultant, Ferguson Partners Consulting L.P. (the “Compensation Consultant”), to assist the Compensation Committee in evaluating the compensation program, determining appropriate pay levels, providing market-based compensation data, and advising on industry trends and best practices. The Compensation Committee has determined that the Compensation Consultant meets the criteria for an independent consultant in accordance with SEC guidelines for such services.

  11. Peer Group Data

    Peer Group Data For 2023, the Compensation Consultant prepared benchmark compensation based on a peer group of 11 hotel/lodging REITs with similar strategies and potential investors. The companies comprising our peer group are:

  12. Executive Compensation Peer Group

    Executive Compensation Peer Group

  13. Executive Compensation Peer Group

    | | Ticker Symbol | | Apple Hospitality REIT, Inc. | APLE | | Ashford, Inc. | AINC | | DiamondRock Hospitality Company | DRH | | Hersha Hospitality Trust(1) | HT | | Park Hotels & Resorts Inc. | PK | | Pebblebrook Hotel Trust | PEB | | RLJ Lodging Trust | RLJ | | Ryman Hospitality Properties Inc. | RHP | | Summit Hotel Properties, Inc. | INN | | Sunstone Hotel Investors, Inc. | SHO | | Xenia Hotels & Resorts, Inc. | XHR |

  14. Executive Compensation Peer Group

    (1) Hersha Hospitality Trust was acquired and delisted by KSL Capital Partners in August 2023. It will be removed from the peer group for 2024. The 2023 peer group remained the same as the 2022 peer group. A key point about the use of this peer group is that because the Company’s equity market capitalization is on the lower end, the Compensation Consultant provides size-adjusted benchmark data to ensure the pay levels are appropriately calibrated relative to our size by reducing absolute peer compensation..

  15. Elements of Executive Compensation and Key Factors in Setting Pay

    Elements of Executive Compensation and Key Factors in Setting Pay Our compensation program for our NEOs consists of four key elements: •Cash compensation, in the form of base salaries and annual cash bonus awards; •Long-term incentives, in the form of time-based and performance-based restricted common share and LTIP unit awards; •Health and welfare benefits; and •Severance arrangement under the executives’ employment agreements. Historically, the Compensation Committee has reviewed compensation levels for our executive officers near the beginning of each calendar year in determining base salaries and budgeted amounts for total compensation for that, and then meets again near the end of each year to review the actual performance of our company and executive officers, at which time it typically makes determinations with respect to annual cash bonuses and long-term equity incentive compensation in the form of time-based and performance-based restricted common shares and/or LTIP units. Awards under our Equity Incentive Plan are granted to provide performance and retention incentives to these individuals based on factors such as the desire to retain such officers’ services over the long-term, aligning such officers’ interest with those of our shareholders, incentivizing such officers over the near-, medium- and long-term, and rewarding such officers for exceptional performance. In addition, the Compensation Committee may determine to make awards to new executive officers to help attract them to the Company. As part of its annual review of the compensation paid to our executive officers, the Compensation Committee typically considers a number of factors in determining or structuring compensation, including, but not limited to: •the nature of the executive’s job and the responsibilities related thereto, the executive’s job performance; •the executive’s performance with respect to specified individual goals; •the experience level of the executive in his or her current position, unique skills, and future potential; •internal pay equity; •the compensation levels of competitive jobs within our peer group (further explained below); •our financial performance and financial condition; •the execution of our business strategies; and •the impact of compensation determinations on our fiscal budgets. These factors described above may vary from year to year in importance to, and usage by, the Compensation Committee, depending upon the compensation element, market conditions, corporate priorities and individual circumstances.

  16. Annual base salary

    Additionally, the Compensation Committee did not increase base salaries for 2024 (the third year of no changes) and will consider any increase until its annual review of pay levels for 2025. According to the Compensation Consultant, our NEOs’ base salaries continue to be below the median of the size-adjusted peer group (and below the 25th percentile of our peer group prior to the discount).

  17. Annual cash bonus

    Annual cash bonus For 2023, the Compensation Committee and the Board approved an annual cash bonus program utilizing the following methodology: Annual Cash Bonus Opportunities Consistent with prior years, Threshold, Target, and Maximum payouts vary for each NEO as a percentage of salary, are presented below:

  18. Annual cash bonus

    | | Fisher | Craven | Wegner | | Threshold | 100% | 75% | 50% | | Target | 175% | 125% | 100% | | Maximum | 250% | 175% | 150% |

  19. Annual cash bonus

    In 2023, the Compensation Committee recommended, and the Board approved, a change to the formulaic bonus program so that now 60% of the annual cash bonus opportunity is based on financial metrics with 20% each based on the achievement of specified individual goals and the Compensation Committee's qualitative review of pre-established performance factors. In 2023, the Compensation Committee recommended, and the Board approved, a change to the 60% portion of the annual cash bonus based on financial metrics used for calculating by including RevPAR Growth and Gross Operating Profit in addition to the historical AFFO per share metric. Company Performance Scorecard The following table shows the metrics and weightings of the 2023 annual cash bonus program for the executive officers:

  20. Annual cash bonus

    | Performance Criteria | Weighting | Threshold | Target | Maximum | Calculated | | RevPAR Growth | 20% | 4.0% | 7.5% | 11.0% | 6.1% | | Gross Operating Profit | 20% | $131.70 | $137.70 | $143.70 | $134.40 | | Adjusted FFO per share | 20% | $1.08 | $1.20 | $1.32 | $1.19 | | Individual Performance | 20% | 1 | 3 | 5 | 3.5 | | Discretionary | 20% | 1 | 3 | 5 | varies per individual |

  21. Annual cash bonus

    In assessing Company performance, the Committee reviewed the following corporate scorecard, of which a score of 3.5 out of 5 was achieved based on the Compensation Committee's assessment (and the Board affirmed) that the Company’s overall performance was solid in 2023 and many accomplishments were achieved in order to preserve long-term shareholder value as summarized in the following table.

  22. Annual cash bonus

    | Performance Factor | Review of 2023 Performance | | Operational Achievements | • Produced RevPAR growth of 6.1%, exceeding industry RevPAR performance by approximately 25% • Highest RevPAR of all select-service Lodging REITs | | Balance Sheet Management | • Repaid approximately $150 million of maturing debt using available liquidity and new debt issuance • Successfully issued approximately $83 million of fixed-rate CMBS debt • Reduced overall leverage ratio from 27% at January 1, 2023 to 25% at December 31, 2023 • Reduced net debt by $26 million in 2023 • Entered into contact to sell the 24-year-old Hilton Garden Inn Denver Tech Center for $18 million ($24 million including foregone renovation) at an approximate 4% capitalization rate on 2023 net operating income (sold in January 2024) | | ESG/Governance Performance Factors | • Committed to increase the percentage of females on the Board to at least 30% by the end of 2025 • We participated in the Global Real Estate Sustainability Benchmark (“GRESB”) for the second time and our overall score increased 9% from 75/100 to 82/100, ranking 31st out of 115 listed companies in the Americas region, and 2nd out of 6 in its peer group (related to 2022 performance) • Chatham earned four of five GRESB Stars • Chatham received an overall score of 82/100, ranking 31st out of 115 listed companies in the Americas region, and 2nd out of 6 in its peer group • Chatham earned 27 of 30 available points on the Management and Performance components • Chatham was awarded GRESB’s “Green Star” for achieving a score higher than 50% of the points allocated to the Management and Performance components |

  23. Annual cash bonus

    Individual Performance For 2023, the Compensation Committee considered the achievement of individual goals established in early 2023. Each NEO has individual goals that were designed to be specific, measurable, relevant and time bound. These goals were set forth to enhance the execution of the Company’s strategic efforts in 2023 and each goal was given a weighting that took into consideration the significance of the goals. Based on a review of individual performance, each NEO received a score above target but less than maximum. 2023 Cash Bonus Payouts The following table shows the threshold, target and maximum incentive cash bonus opportunities that were available to each executive officer for 2023 as a percentage of their base salary, as well as the actual bonus earned and the actual bonus as a percentage of target for the year ended December 31, 2023. Whether any of the threshold, target or maximum bonus levels were attained was determined by the Compensation Committee based on achievement of the criteria described above.

  24. 2023 Annual Cash Bonus Payout Levels

    2023 Annual Cash Bonus Payout Levels

  25. 2023 Annual Cash Bonus Payout Levels

    | Executive | Threshold | Target | Maximum | Actual | Payout | | Jeffrey H. Fisher | 100% | 175% | 250% | 98% | $1,118,530 | | Dennis M. Craven | 75% | 125% | 175% | 98% | $521,387 | | Jeremy Wegner | 50% | 100% | 150% | 98% | $317,052 |

  26. Annual equity awards

    Annual equity awards We have provided restricted share and LTIP unit awards pursuant to our Equity Incentive Plan in the past (see “Share and LTIP Unit Awards”). Time-based equity awards are designed to foster equity ownership by our NEOs in the Company and to align their interests with the long-term interests of our shareholders while also attracting and retaining key talent. Performance-based equity awards are tied to the performance of the Company and are designed to provide these key executives, who are primarily responsible for our growth and operations, with incentives to focus on achieving long-term goals and enhancing shareholder value. Payouts at performance levels in between the hurdles will be calculated by straight-line interpolation. As described below under "--LTIP Units", only Class A Performance LTIP units are used for performance-based equity awards. The hurdles for the 2022 and 2023 grants (awarded in 2023 and 2024, respectively) use the Dow Jones U.S. Hotel & Lodging REIT Index which included these 16 companies (in addition to the Company):

  27. Annual equity awards

    | Name | Stock Symbol | | Apple Hospitality REIT, Inc. | APLE | | Ashford Hospitality Trust | AHT | | Braemar Hotels & Resorts Inc. | BHR | | DiamondRock Hospitality Company | DRH | | Hersha Hospitality Trust | HT | | Host Hotels & Resorts, Inc. | HST | | InnSuites Hospitality Trust | IHT | | Park Hotels & Resorts Inc. | PK | | Pebblebrook Hotel Trust | PEB | | RLJ Lodging Trust | RLJ | | Ryman Hospitality Properties Inc. | RHP | | Service Properties Trust | SVC | | Sotherly Hotels Inc. | SOHO | | Summit Hotel Properties, Inc. | INN | | Sunstone Hotel Investors, Inc. | SHO | | Xenia Hotels & Resorts, Inc. | XHR |

  28. Annual equity awards

    For 2024, the Dow Jones US Hotel & Lodging REIT Index changed to include gaming REITs so the Company, upon recommendation of its Compensation Consultant and approval of its Compensation Committee, switched to the NAREIT Lodging/Resorts Index which included the same group of companies except for the removal of Hersha Hospitality Trust on because that company was acquired and its stock was de-listed from the NYSE in August 2023. Addition of Absolute Negative TSR Modifier for 2022 Awards (Granted in 2023) For awards granted after 2022, based upon the recommendation of the Compensation Committee, the Board approved changes in the performance-based LTIP Unit Award Agreements to adopt a negative TSR modifier to reduce the payout if the Company's TSR is negative over an award's vesting period regardless of the Company’s relative percentile rank (“Absolute Negative TSR Modifier”). Specifically, if the LTIP Unit Award vests at a level greater than Relative Performance Target, but the Company's TSR is negative, then the number of performance-based LTIP units that vest shall be reduced by 25 percentage points (but will not be reduced to less than target). With respect to the 2023 compensation packages of the NEOs, the Compensation Committee, after consultation with the Compensation Consultant, recommended awarding the NEOs with a balanced equity compensation grant with (1) 40% of the award in the form of time-based LTIP units that will vest ratably over a three-year period and (2) 60% of the award in the form of performance-based LTIP units that may vest based on relative TSR performance for the three-year period beginning on March 1, 2024 and ending on February 28, 2027. The 2023 Performance-Based LTIP Unit Awards, if earned, will vest at between 50% and 200% of target value as follows:

  29. Annual equity awards

    | | Relative TSR Hurdles (Percentile) | Payout Percentage | | Threshold | 25th | 50% | | Target | 55th | 100% | | Maximum | 80th | 200% |

  30. Annual equity awards

    TSR will be calculated to include share price appreciation plus dividends (and assumes the reinvestment of dividends). The initial share price used for calculating the Company’s TSR for the 2023 grant is $10.20, which represents the closing price of our common shares the day prior to the grant date. Based upon the Compensation Consultant’s recommendations, which were based on the Company's overall performance in 2023, the Compensation Committee approved 2023 LTIP Unit Awards (i.e., time-based and performance-based) with grant date values for Messrs. Fisher, Craven and Wegner of $2,650,000, $1,300,000 and $800,000, respectively. These amounts represent no increase from the 2022 awards (granted in 2023). The following table sets forth the value of LTIP units that, based upon the Compensation Consultant's recommendations and approved by the Compensation Committee, were granted to each NEO under the 2023 LTIP Unit Awards. The number of 2023 Time-Based LTIP Unit Awards and target number of Performance-Based LTIP Unit Awards issued to each NEO were based on the grant date value shown below divided by $10.20, the closing price of our common shares on the NYSE on February 29, 2024, the day prior to the grant date:

  31. Annual equity awards

    | Name | Number of Time-Based LTIP Unit Awards | Grant Date Value of Time-Based LTIP Unit Awards(1) | Target Number of Performance-Based LTIP Unit Awards | Grant Date Value of Performance-Based LTIP Unit Awards(1) | Total Grant Date Value of All LTIP Unit Awards(1) | | Jeffrey H. Fisher | 103,923 | $1,060,000 | 155,883 | $1,590,000 | $2,650,000 | | Dennis M. Craven | 50,982 | $520,000 | 76,471 | $780,000 | $1,300,000 | | Jeremy Wegner | 31,374 | $320,000 | 47,059 | $480,000 | $800,000 |

  32. Annual equity awards

    The Company will estimate the aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, including the effect of estimated forfeitures, and will calculate the value at the grant date based on the probable outcome of the performance With respect to the 2022 compensation packages of the NEOs, the Compensation Committee, after consultation with the Compensation Consultant, recommended awarding the NEOs with a balanced equity compensation grant with (1) 40% of the award in the form of time-based LTIP units that will vest ratably over a three-year period and (2) 60% of the award in the form of performance-based LTIP units that may vest based on relative TSR performance for the three-year period beginning on March 1, 2023 and ending on February 28, 2026. The 2022 Performance-Based LTIP Unit Awards, if earned, will vest at between 50% and 200% of target value as follows:

  33. Annual equity awards

    | | Relative TSR Hurdles (Percentile) | Payout Percentage | | Threshold | 25th | 50% | | Target | 55th | 100% | | Maximum | 80th | 200% |

  34. Annual equity awards

    TSR will be calculated to include share price appreciation plus dividends (and assumes the reinvestment of dividends). The initial share price used for calculating the Company’s TSR for the 2022 grant is $12.21, which represents the closing price of our common shares the day prior to the grant date. Based upon the Compensation Consultant’s recommendations, which were based on the Company's overall performance in 2022, the Compensation Committee approved 2022 LTIP Unit Awards (i.e., time-based and performance-based) with grant date values for Messrs. Fisher, Craven and Wegner of $2,650,000, $1,300,000 and $800,000, respectively. These amounts represent no increase from the 2021 awards (granted in 2022). The following table sets forth the value of LTIP units that, based upon the Compensation Consultant's recommendations and approved by the Compensation Committee, were granted to each NEO under the 2022 LTIP Unit Awards. The number of 2022 Time-Based LTIP Unit Awards and target number of Performance-Based LTIP Unit Awards issued to each NEO were based on the grant date value shown below divided by $12.21, the closing price of our common shares on the NYSE on February 28, 2023, the day prior to the grant date:

  35. Annual equity awards

    | Name | Number of Time-Based LTIP Unit Awards | Grant Date Value of Time-Based LTIP Unit Awards(1) | Target Number of Performance-Based LTIP Unit Awards | Grant Date Value of Performance-Based LTIP Unit Awards(1) | Total Grant Date Value of All LTIP Unit Awards(1) | | Jeffrey H. Fisher | 86,814 | $1,060,000 | 130,221 | $1,590,000 | $2,650,000 | | Dennis M. Craven | 42,588 | $520,000 | 63,882 | $780,000 | $1,300,000 | | Jeremy Wegner | 26,208 | $320,000 | 39,312 | $480,000 | $800,000 |

  36. Annual equity awards

    (1) Estimated grant date value is based on $12.21, the closing price of our common shares on February 28, 2023. The Company will estimate the aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, including the effect of estimated forfeitures, and will calculate the value at the grant date based on the probable outcome of the performance 2021 Awards (Granted in 2022) With respect to the 2021 compensation packages of the NEOs, the Compensation Committee, in consultation with the Compensation Consultant, recommended awarding the NEOs with a balanced equity compensation grant with (1) 40% of the award in the form of time-based LTIP units that vest ratably over a three-year period and (2) 60% of the award in the form of performance-based LTIP units that may vest based on relative total shareholder return performance for the three-year period beginning on March 1, 2022 and ending on February 28, 2025. The 2021 Performance-Based LTIP Unit Awards, if earned, will be paid out between 50% and 200% of target value as follows:

  37. Annual equity awards

    | | Relative TSR Hurdles (Percentile) | Payout Percentage | | Threshold | 25th | 50% | | Target | 55th | 100% | | Maximum | 80th | 200% |

  38. Annual equity awards

    TSR will be calculated to include share price appreciation plus dividends (and assumes the reinvestment of dividends). The initial share price used for calculating the Company’s TSR for the 2021 grant is $13.75, which represents the closing price of our common shares the day prior to the grant date. Based upon the Compensation Consultant’s recommendations, which were based on the Company's overall performance in 2021, the Compensation Committee approved 2021 LTIP unit awards (i.e., time-based and performance-based) with grant date values for Messrs. Fisher, Craven and Wegner of $2,650,000, $1,300,000 and $800,000, respectively. he following table sets forth the value of LTIP units that, based upon the Compensation Consultant's recommendations and approved by the Compensation Committee, were granted to each NEO under the 2021 LTIP Unit Awards. The number of 2021 Time-Based LTIP Unit Awards and target number of Performance-Based LTIP Unit Awards issued to each NEO were based on the grant date value shown below divided by $13.75, the closing price of our on the NYSE on February 28, 2022, the day prior to the grant date:

  39. Annual equity awards

    | Name | Number of Time-Based LTIP Unit Awards | Grant Date Value of Time-Based LTIP Unit Awards(1) | Target Number of Performance-Based LTIP Unit Awards | Grant Date Value of Performance-Based LTIP Unit Awards(1) | Total Grant Date Value of All LTIP Unit Awards(1) | | Jeffrey H. Fisher | 77,091 | $1,060,000 | 115,636 | $1,590,000 | $2,650,000 | | Dennis M. Craven | 37,818 | $520,000 | 56,727 | $780,000 | $1,300,000 | | Jeremy Wegner | 23,274 | $320,000 | 34,909 | $480,000 | $800,000 |

  40. Annual equity awards

    (1) Estimated grant date value is based on $13.75, the closing price of our common shares on February 28, 2022. The Company will estimate the aggregate compensation cost to be recognized over the service period determined as of the grant date under FASB ASC Topic 718, including the effect of estimated forfeitures, and will calculate the value at the grant date based on the probable outcome of the performance conditions. Status of Outstanding Performance-Based Equity Awards Our executive compensation program includes performance-based shares or LTIP units in an effort to align the interests of our executive officers with those of our shareholders and to provide incentives for our executive officers to achieve both short-term and long-term business objectives. The Company’s long-term equity incentive plan is designed to correlate the incentives of our executive officers with total shareholder returns. Our executive officers’ actual long-term equity compensation earned over the relevant performance periods is dependent on the actual performance achieved for each multi-year performance award and may be substantially different from the values reflected in the Company’s summary compensation table. The following table shows the status of the performance-based awards granted for 2015 through 2023 and demonstrates our pay-for-performance alignment:

  41. Annual equity awards

    | Program | Performance Period | Performance Metric(1) | Current Status(2) | | 2022 Award | March 2023 – February 2026 | Relative TSR vs. Dow Jones U.S. Hotel & Lodging REIT(3) | Tracking to earn between Threshold and Target | | 2021 Award | March 2022 – February 2025 | Relative TSR vs. Dow Jones U.S. Hotel & Lodging REIT Index | Tracking to earn between Threshold and Target | | 2020 Award | March 2021 – February 2024 | Relative TSR vs. Dow Jones U.S. Hotel & Lodging REIT | Completed - 85.7% of Target earned | | 2019 Award | March 2020 – February 2023 | Relative TSR vs. Dow Jones U.S. Hotel & Lodging REIT Index | Completed - 120% of Target earned | | 2018 Award | March 2019 – February 2022 | Relative TSR vs. SNL U.S. REIT Hotel Index | Completed - 100% of Target earned | | 2017 Award | March 2018 – February 2021 | Relative TSR vs. SNL U.S. REIT Hotel Index | Completed - 87.5% of Target earned | | 2016 Award | March 2017 – February 2020 | Relative TSR vs. SNL U.S. REIT Hotel Index | Completed - 130% of Target earned | | 2015 Award | January 2016 – January 2019 | Absolute TSR | Completed - 100% earned | | 2015 Outperformance Plan | June 2015 – June 2018 | Absolute and Relative TSR | Completed - 0% earned | | (1) The SNL U.S. REIT Hotel Index was discontinued in 2021 and replaced with the Dow Jones U..S. Hotel & Lodging REIT Index. | | | | | (2) As of March 15, 2024 or as of actual settlement date | | | | | (3) 2022 Award is also subject to an Absolute TSR performance modifier | | | |

  42. Annual equity awards

    The historical results of the performance-based awards program have demonstrated the goal to align the interests of the Company’s management with that of shareholders. Performance-based equity awards earned are dependent on relative performance measures. The following table illustrates the value of the performance-based awards granted, earned or forfeited for all performance-based awards granted since 2012 for which the applicable measurement period has ended (as of December 31, 2023) for each NEO. Cumulative performance-based equity compensation earned for the NEOs was approximately 74% of the grant date target value; NEOs have forfeited 24% of the grant date target value of all performance-based awards granted since 2012. Performance-based equity awards granted in 2022 and 2023 have not yet been earned as the measurement periods for those grants have not concluded and awards may be earned in the future. The value of the grant date target value of forfeited LTIPs below includes LTIP units granted as part of the 2015 Outperformance Plan of which no thresholds were met and thus all units were forfeited. Because each NEO can earn more or less than target amounts granted, the total granted will not be equal to the value earned and the value forfeited.

  43. Annual equity awards

    | Name | Value of Potential Performance LTIPs Granted | Value of Target Performance LTIPs Earned | Value of Target Performance LTIPs Forfeited | Percentage Forfeited | | Jeffrey H. Fisher | $8,800,500 | $6,889,107 | $2,304,753 | 26% | | Dennis M. Craven | $4,017,750 | $3,034,624 | $1,161,926 | 29% | | Jeremy Wegner | $1,120,750 | $1,116,637 | $78,315 | 7% | | Totals: | $13,939,000 | $11,040,368 | $3,544,994 | 25% |

  44. LTIP Units

    LTIP Units LTIP units are a special class of partnership interests in Chatham Lodging, L.P. (“our operating partnership”). The vesting period for any LTIP units, if any, will be determined at the time of issuance. LTIP units, whether vested or not, will receive the same monthly per-unit profit distributions as common units of our operating partnership, which profit distribution will generally equal per - our restricted share awards, which will generally receive full dividends whether vested or not. Initially, LTIP units will not have full parity with common units of our operating partnership with respect to liquidating distributions. Under the terms of the LTIP units, our operating partnership will revalue its assets upon the occurrence of certain specified events, and any increase in valuation from the time of grant until such event will be allocated first to the holders of LTIP units to equalize the capital accounts of such holders with the capital accounts of holders of common unit. Upon equalization of the capital accounts of the holders of LTIP units with the holders of common units, the LTIP units will achieve full parity with common units of our operating partnership for all purposes, including with respect to liquidating distributions. If such parity is reached, vested LTIP units may be converted into an equal number of common units at any time, and thereafter enjoy all the rights of common units, including exchange rights. However, there are circumstances under which such parity would not be reached. Until and unless such parity is reached, the value that an executive officer will realize for a given number of vested LTIP units will be less than the value of an equal number of our common shares. Class A Performance LTIP units are a specific class of LTIP units used for performance-based incentive plans and these Class A Performance LTIP Units have different rights. The vesting period for any Class A Performance LTIP units will be determined at the time of issuance. Vested Class A Performance LTIP units enjoy all the rights of vested LTIP units, including with respect to distributions and conversions. Prior to vesting, the NEOs will (i) not be entitled to vote the Class A Performance LTIP units and (ii) will be paid an amount that is 10% of distributions made on the common units of our operating partnership as and when our operating partnership makes such distributions. To the extent any of the Class A Performance LTIP units become vested, our operating partnership will pay to the NEO owning such vested units a special distribution on the date of vesting in an amount equal to (x) the aggregate amount of distributions that would have been received on such vested Class A Performance LTIP unit had the limitation described in (ii) above not applied, minus (y) the aggregate amount of distributions previously received pursuant to (ii) above on all Class A Performance LTIP units that were issued to the NEO on the date thereof, including any Class A Performance LTIP units that did not vest as of the date thereof. Other than the distributions described above, no cash amount will be paid with respect to any of the Class A Performance LTIP units that do not become vested.

  45. Post-termination pay

    Post-termination pay As described more fully under “Employment Arrangements” and “Potential Payments upon Termination or Change in Control” below, we have entered into employment agreements with each of our NEOs that provide these officers with compensation if they are terminated without “cause,” they leave the Company with “good reason” (each as defined in the applicable employment agreement) or their employment terminates in certain circumstances following a change in control. We believe these common protections promote our ability to attract and retain management and assure us that our NEOs will continue to be dedicated and available to provide objective advice and counsel notwithstanding the possibility, threat or occurrence of a change in their circumstances or in the control of the Company.

  46. Summary Compensation Table

    Summary Compensation Table

  47. Summary Compensation Table

    | Name and Principal Position | Year | Base Salary | Bonus | Share Awards(1) | Non-Equity Incentive Plan Compensation(2) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation(3) | Total | | Jeffrey H. Fisher | 2023 | $650,000 | --- | $3,131,381(4) | $1,118,530 | --- | $355,017 | $5,254,928 | | Chairman, President & Chief Executive Officer | 2022 | $650,000 | --- | $3,099,049(4) | $1,535,000 | --- | $108,818 | $5,392,867 | | | 2021 | $625,000 | --- | $2,387,650(5) | $1,545,000 | --- | $180,251 | $4,737,901 | | Dennis M. Craven | 2023 | $425,000 | --- | $1,536,149(4) | $521,387 | --- | $166,869 | $2,649,405 | | Executive Vice President & Chief Operating Officer | 2022 | $425,000 | --- | $1,520,284(4) | $708,000 | --- | $69,275 | $2,722,559 | | | 2021 | $400,000 | --- | $1,171,300(5) | $691,000 | --- | $97,960 | $2,360,260 | | Jeremy Wegner | 2023 | $325,000 | --- | $945,323(4) | $317,052 | --- | $92,963 | $1,680,338 | | Senior Vice President & Chief Financial Officer | 2022 | $325,000 | --- | $935,578(4) | $462,000 | --- | $48,050 | $1,770,628 | | | 2021 | $300,000 | --- | $720,800(5) | $445,000 | --- | $57,523 | $1,523,323 |

  48. Summary Compensation Table

    | (1) For information regarding the Company’s assumptions made in the valuation of time-based and performance-based LTIP units, see Note 12 to the financial statements included in the Company’s Annual Report on Form 10 K for the year ended December 31, 2023. Reflects grant date value of time-based and the target number of performance-based LTIP units or restricted common share awards to the NEOs and calculated in accordance with ASC Topic 718. The table below shows the dollar value of performance-based equity awards for each NEO assuming that (i) on the grant date of the awards the highest level of performance was probable, (ii) the maximum value of the awards would be earned and (iii) the value per common share upon maximum vesting is the closing price per common share on the NYSE on the date of grant. The values of the performance-based equity awards are dependent on the Company's performance over a three-year period and there is no assurance that the maximum value of the awards will be earned. |

  49. Summary Compensation Table

    | | Maximum Value of Performance-Based Equity Awards Assuming Highest Performance Level | | | | Year | Fisher | Craven | Wegner | | 2023 | $4,333,755 | $2,125,993 | $1,308,303 | | 2022 | $4,297,034 | $2,107,975 | $1,297,218 | | 2021 | $3,180,000 | $1,560,000 | $960,000 |

  50. Summary Compensation Table

    | (2) Beginning in 2017, upon the recommendation of the Compensation Committee, the Board adopted a formulaic cash bonus program tied to the achievement of corporate strategic performance goals, individual objectives and also a portion at the discretion of the Compensation Committee and the Board. Amounts for each year were awarded early in the following year. | | (3) Amounts reported in this column include distributions paid on unvested LTIP units and vested LTIP units and also life, health and dental premiums paid by the Company on behalf of the NEOs, and matching contributions to the 401(k) accounts. In 2021, Messrs. Fisher and Craven each received a matching contribution of $11,600 and Mr. Wegner received a matching contribution of $11,279. In 2022, Messrs. Fisher and Craven each received a matching contribution of $12,200 and Mr. Wegner received a matching contribution of $11,846. In 2023, Messrs. Fisher and Craven each received a matching contribution of $13,200 and Mr. Wegner received a matching contribution of $13,000. In 2022, Messrs. Fisher, Craven and Wegner received distributions on unvested and vested LTIP units in the amounts of $78,849, $35,676, and $14,805, respectively. In 2023, Messrs. Fisher, Craven and Wegner received distributions on unvested and vested LTIP units in the amounts of $335,017, $166,869, and $92,963, respectively. | | (4) As part of our 2023 compensation, LTIP units were awarded to Messrs. Fisher, Craven, and Wegner with 40% of the award to be payable in time-based LTIP units and 60% of the award to be paid in the form of Class A Performance LTIP units. For the 2023 LTIP unit award grants, which were awarded in March 2023 and included in the table as 2022 compensation, Mr. Fisher was granted 103,923 time-based LTIP units, Mr. Craven was granted 50,982 time-based LTIP units, and Mr. Wegner was granted 31,374 time-based LTIP units. The 2022 LTIP unit awards also included performance-based LTIP units of 155,883 to Mr. Fisher, 76,471 to Mr. Craven, and 47,059 to Mr. Wegner. | | (5) As part of our 2022 compensation, LTIP units were awarded to Messrs. Fisher, Craven, and Wegner with 40% of the award to be payable in time-based LTIP units and 60% of the award to be paid in the form of Class A Performance LTIP units. For the 2022 LTIP unit award grants, which were awarded in March 2022 and included in the table as 2021 compensation, Mr. Fisher was granted 86,814 time-based LTIP units, Mr. Craven was granted 42,588 time-based LTIP units, and Mr. Wegner was granted 26,208 time-based LTIP units. The 2021 LTIP unit awards also included performance-based LTIP units of 130,221 to Mr. Fisher, 63,882 to Mr. Craven, and 39,312 to Mr. Wegner. | | (6) As part of our 2021 compensation, LTIP units were awarded to Messrs. Fisher, Craven, and Wegner with 40% of the award to be payable in time-based LTIP units and 60% of the award to be paid in the form of Class A performance-based LTIP units. For the 2021 LTIP unit award grants, which were awarded in March 2021 and included in the table as 2020 compensation, Mr. Fisher was granted 77,091 time-based LTIP units, Mr. Craven was granted 37,818 time-based LTIP units, and Mr. Wegner was granted 23,274 time-based LTIP units. The 2021 LTIP unit awards also included performance-based LTIP units of 115,636 to Mr. Fisher, 56,727 to Mr. Craven, and 34,909 to Mr. Wegner. The grant date target value for the performance-based awards has been discounted by 16.5% above to reflect the inherent risk of not attaining the necessary performance objectives for the shares to vest. See “Description of Vesting Provisions for Certain Performance-Based Equity Awards—2020 Performance-Based Restricted Share Awards” for a description of the vesting and performance conditions. For each performance-based equity award, the grant date target value for the performance-based awards has been discounted by 16.5% above to reflect the inherent risk of not attaining the necessary performance objectives for the shares to vest. |

  51. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information with respect to plan-based awards granted during 2023 to the NEOs. Each dollar amount indicated under “Grant Date Value” is the full value of each restricted LTIP unit award computed in accordance with ASC Topic 718, which, with respect to the value of time-based awards is based on the closing price per common share of the Company on the date prior to grant, and with respect to the value of performance-based restricted LTIP awards, is based on the probable outcome of the performance conditions as of the grant date of the award. All grants of plan-based awards set forth below have been issued pursuant to and from the Company’s Equity Incentive Plan.

  52. Grants of Plan-Based Awards

    | | | | Estimated Future Payout Under Equity Incentive Plan Awards (# of LTIPs)(2) | | | | | | Name | Grant Date | All Other Share Awards or Units(1) | Minimum(3) | Target(4) | Maximum(5) | Grant Date Fair Value | | | Jeffrey H. Fisher | March 1, 2023 | 86,814 | | | | $ | 964,504(6) | | | March 1, 2023 | | 65,111 | 130,221 | 260,442 | $ | 2,166,877(7) | | Dennis M. Craven | March 1, 2023 | 42,588 | | | | $ | 473,153(6) | | | March 1, 2023 | | 31,941 | 63,882 | 127,764 | $ | 1,062,996(7) | | Jeremy Wegner | March 1, 2023 | 26,208 | | | | $ | 291,171(6) | | | March 1, 2023 | | 19,656 | 39,312 | 78,624 | $ | 654,152(7) |

  53. Grants of Plan-Based Awards

    | (1) Reflects time-based restricted LTIP unit awards granted in 2023 as part of our 2022 compensation program based on a grant date value of $12.21, the closing price of our common shares on the NYSE on the day prior to the grant date. These restricted LTIP unit awards vest ratably over the first three anniversaries of the date of grant on March 1, 2024, 2024 and 2026. | | (2) Reflects performance-based restricted LTIP unit awards that may be earned based on the attainment of certain performance thresholds. See “Description of Vesting Provisions for Certain Performance-Based Equity Awards—2019 Class A Performance-Based LTIP Unit Awards” for a description of the vesting and performance conditions. | | (3) Represents the minimum number of performance-based LTIP units that would be earned in the event that performance meets the minimum level under the award. In the event the performance under these awards fail to meet or exceed the “target” level of performance required, none of the performance-based awards will be earned. | | (4) Represents the number of performance-based LTIP units that would be earned in the event that performance meets the target level under the award. | | (5) Represents the number of performance-based LTIP units that would be earned in the event that performance meets the maximum level under the award. | | (6) The grant date value for each time-based LTIP unit was $11.11, calculated in accordance with ASC Topic 718 using a Monte Carlo approach. Information regarding the assumptions used to value the time-based LTIP Unit Awards is provided in Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K filed for the year ended December 31, 2023. | | (7) The grant date value for each performance-based LTIP unit was $16.64, calculated in accordance with ASC Topic 718 using a Monte Carlo approach. Information regarding the assumptions used to value the performance-based LTIP Unit Awards is provided in Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K filed for the year ended December 31, 2023. |

  54. Discussion of Summary Compensation and Grants of Plan-Based Awards Tables

    Discussion of Summary Compensation and Grants of Plan-Based Awards Tables Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table was paid or awarded, are described above under “— Compensation Discussion and Analysis (“CD&A”).” The terms of employment agreements that we have entered into with our executives and the acceleration of vesting of equity awards under certain circumstances are described below under “— Employment Agreements” and “— Potential Payments upon Termination or Change in Control.”

  55. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table sets forth information with respect to outstanding equity awards held by the NEOs as of December 31, 2023.

  56. Outstanding Equity Awards at Fiscal Year-End

    | Name | Grant Date | Number of Shares or LTIP Units That Have Not Vested (#) | Market Value of Shares or LTIP Units That Have Not Vested ($) (1) | Equity Incentive Plan Awards: Number of Unearned Shares or Other Rights That Have Not Vested (Unearned Performance-Based Shares or LTIP Units) (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Other Rights That Have Not Vested (Unearned Performance-Based Shares or LTIP Units) ($) (1) | | Jeffrey H. Fisher | March 1, 2021 | 22,972(2) | 246,260 | 103,374(3) | 1,108,169 | | | March 1, 2022 | 51,394(4) | 550,944 | 115,636(3) | 1,239,618 | | | March 1, 2023 | 86,814(5) | 930,646 | 130,221(3) | 1,395,969 | | Dennis M. Craven | March 1, 2021 | 10,386(2) | 111,338 | 46,734(3) | 500,988 | | | March 1, 2022 | 25,212(4) | 270,273 | 56,727(3) | 608,113 | | | March 1, 2023 | 42,588(5) | 456,543 | 63,882(3) | 684,815 | | Jeremy Wegner | March 1, 2021 | 6,222(2) | 66,700 | 27,997(3) | 300,128 | | | March 1, 2022 | 15,516(4) | 166,332 | 34,909(3) | 374,224 | | | March 1, 2023 | 26,208(5) | 280,950 | 39,312(3) | 421,425 |

  57. Outstanding Equity Awards at Fiscal Year-End

    | (1) For purposes of calculating the market value of restricted common shares or LTIP units that have not vested, the market value per restricted common share or LTIP unit is assumed to be $10.72, the closing sale price for our common shares on December 29, 2023. | | (2) This is the number of time-based LTIP units that have not vested from an initial award that vested or will vest ratably on March 1, 2022, 2023 and 2024. | | (3) This is the maximum number of performance-based LTIP units that may vest from this grant. | | (4) This is the number of time-based LTIP units that have not vested from an initial award that vested or will vest ratably on February 28, 2023, 2024 and 2025. | | (5) This is the number of time-based LTIP units that have not vested from an initial award that vested or will vest ratably on February 28, 2024, 2025 and 2026. |

  58. Option Exercises and Shares Vested Table

    Option Exercises and Shares Vested Table The following table summarizes vesting in 2023 of time-based and performance-based LTIP units previously granted to our NEOs. The Company has never granted option awards and has not granted restricted common shares to its NEOs since 2015. No restricted common shares vested in 2023.

  59. Option Exercises and Shares Vested Table

    | | Share/Unit Awards | | | | | Name | Number of Shares / Units Acquired on Vesting (1) (#) | | Value Realized on Vesting ($) (2) | | | Jeffrey H. Fisher | | 195,585 | | 2,435,033 | | Dennis M. Craven | | 89,410 | | 1,113,155 | | Jeremy Wegner | | 47,649 | | 593,230 |

  60. Option Exercises and Shares Vested Table

    | (1) Amounts include vested performance-based LTIP units. | | (2) For purposes of calculating the market value of the vested performance-based LTIP units that have vested, the market value per vested performance-based LTIP unit is assumed to be the closing sales price per share of our common shares on the vesting date. |

  61. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control The following table and accompanying footnotes reflect the estimated potential amounts payable to Messrs. Fisher, Craven and Wegner under their employment agreements and the Company’s compensation and benefit plans and arrangements in the event the executive’s employment is terminated under various scenarios, including involuntary termination without cause, voluntary or involuntary termination with cause, voluntary resignation with good reason, involuntary or good reason termination in connection with a change in control and termination due to death and disability. The amounts shown below are estimates of the amounts that would be paid to Messrs. Fisher, Craven and Wegner upon termination of their employment assuming that such termination was effective on December 31, 2023. For purposes of calculating the acceleration of equity awards, we have assumed that all performance conditions have been met at the targeted level and the related performance-based LTIP units have vested. Actual amounts payable will depend upon compensation levels at the time of termination, the amount of future equity awards and other factors, and will likely be greater than amounts shown in this table. In addition, if there is a change in control and a termination of employment, the performance-based LTIP units not already vested will vest at the greater of relative performance target levels and relative maximum target levels.

  62. Potential Payments upon Termination or Change of Control

    | | Cash Severance Payment | | Payment in Lieu of Medical/Welfare Benefits (present value) (4) | | Acceleration and Continuation of Vesting of Equity Awards (5) | | Excise Tax Gross-up Payment(6) | | Total Termination Benefits | | | Jeffrey H. Fisher(1)(3) | | | | | | | | | | | | Involuntary Termination Without Cause (2) | | $6,585,000 | | $16,716 | | $5,471,606 | | — | | $12,073,322 | | Voluntary Termination or Involuntary Termination with Cause | | — | | — | | — | | — | | — | | Involuntary or Good Reason Termination in Connection With Change In Control (2) | | $6,585,000 | | $50,148 | | $5,471,606 | | — | | $12,106,754 | | Death or Disability | | — | | — | | $5,471,606 | | — | | $5,471,606 | | Dennis M. Craven(1)(3) | | | | | | | | | | | | Involuntary Termination Without Cause (2) | | $3,399,000 | | $21,144 | | $2,632,070 | | — | | $6,052,214 | | Voluntary Termination or Involuntary Termination with Cause | | — | | — | | — | | — | | — | | Involuntary or Good Reason Termination in Connection With Change In Control (2) | | $3,399,000 | | $63,432 | | $2,632,070 | | — | | $6,094,502 | | Death or Disability | | — | | — | | $2,632,070 | | — | | $2,632,070 | | Jeremy Wegner(1)(3) | | | | | | | | | | | | Involuntary Termination Without Cause (2) | | $1,574,000 | | $21,144 | | $1,609,758 | | — | | $3,204,902 | | Voluntary Termination or Involuntary Termination with Cause | | — | | — | | — | | — | | — | | Involuntary or Good Reason Termination in Connection With Change In Control (2) | | $1,574,000 | | $42,288 | | $1,609,758 | | — | | $3,226,046 | | Death or Disability | | — | | — | | $1,609,758 | | — | | $1,609,758 |

  63. Potential Payments upon Termination or Change of Control

    | (1) The amounts shown in the table do not include accrued salary, earned but unpaid bonuses, accrued but unused vacation pay or the distribution of benefits from any tax-qualified retirement or 401(k) plan. Those amounts are payable to Messrs. Fisher, Craven, and Wegner upon any termination of employment, including an involuntary termination with cause and a resignation without good reason. | | (2) Amounts in this row are calculated in accordance with the applicable employment agreement as described more fully under “— Employment Agreements”. | | (3) A termination of employment due to death or disability entitles Messrs. Fisher, Craven and Wegner to benefits under the Company’s life insurance and disability insurance plans. In addition, outstanding unvested restricted share awards and unvested LTIP unit awards immediately vest upon a termination of employment due to death or disability. | | (4) The amounts shown in this column are estimates of the annual premiums payable by the Company for health care, insurance and other benefits expected to be provided to Messrs. Fisher, Craven and Wegner. | | (5) Pursuant to SEC rules, for purposes of this table, the market value per common share and LTIP unit is assumed to be $10.72, the closing market price per common share on December 29, 2023. For the LTIP unit award grant agreements issued on March 1, 2023 and later, accelerated vesting is double-triggered: it requires both a "change in control" and a termination of employment. | | (6) The employment agreements with Messrs. Fisher, Craven and Wegner do not provide an indemnification or gross-up payment for the parachute payment excise tax under Sections 280G and 4999 of the Code. The employment agreements instead provide that the severance and any other payments or benefits that are treated as parachute payments under the Code will be reduced to the maximum amount that can be paid without an excise tax liability. The parachute payments will not be reduced, however, if the executive will receive greater after-tax benefits by receiving the total or unreduced benefits (after taking into account any excise tax liability payable by the executive). The amounts shown in the table assume that Messrs. Fisher, Craven and Wegner will receive the total or unreduced benefits. |

  64. Pay Ratio Disclosure

    Pay Ratio Disclosure The annual total compensation of our CEO for fiscal year 2023, as reported in the Summary Compensation Table included in this Proxy Statement, was $5,235,398. The median of the annual total compensation of all employees, excluding our CEO, for fiscal year 2023 was $131,569. As a result, we estimate that the annual total compensation of our CEO was 39.8 times that of the annual total compensation of the median employee for fiscal year 2023. We identified the median employee by total annual compensation for all employees, excluding our CEO, as of December 31, 2023. After identifying the median employee, we calculated annual total compensation for such employee using the same methodology used for calculating the total compensation of our named executive officers as set forth in the Summary Compensation Table included in this Proxy Statement.

  65. PAY VERSUS PERFORMANCE

    PAY VERSUS PERFORMANCE

  66. Pay Versus Performance Tables

    Pay Versus Performance Tables We are providing the following information about the relationship between “compensation actually paid” to our CEO and to our other NEOs and certain financial performance measures of Chatham Lodging Trust, including our company-selected measure, Adjusted FFO (funds from operations) per share. We believe that adjusting FFO to exclude certain recurring and non-recurring items provides useful supplemental information regarding our ongoing operating performance and that the presentation of AFFO, when combined with the primary GAAP presentation of net income (loss), more completely describes our operating performance. Compensation actually paid, as determined under SEC requirements, does not necessarily reflect the actual amount of compensation earned by or paid to our NEOs during a covered year or the way in which the Compensation Committee views compensation decisions. For further information regarding the Company's pay-for-performance philosophy, please refer to “Compensation Discussion and Analysis”.

  67. Pay Versus Performance Tables

    | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year (a) | Summary Compensation Table Total for CEO ($) (1) | Compensation Actually Paid to CEO (2,3) | Average Summary Compensation Table Total for Non-CEO NEOs ($) (4) | Average Compensation Actually Paid to Non-CEO NEOs ($) (2,4,5) | TSR ($) (6) | Peer Group TSR ($) (7) | Net Income (Loss) ($ millions) (h) | Adjusted FFO Per Share ($) (8) | | 2023 | 5,235,398 | 2,544,424 | 2,165,651 | 1,132,996 | 61.32 | 94.80 | 2.49 | 1.19 | | 2022 | 5,392,984 | 6,072,343 | 2,246,593 | 2,465,739 | 68.25 | 76.50 | 9.87 | 1.19 | | 2021 | 4,737,901 | 5,577,635 | 1,941,792 | 2,146,031 | 75.88 | 90.32 | (18.85) | N/A | | 2020 | 3,824,632 | 55,650 | 1,054,133 | 280,408 | 59.73 | 76.40 | (77.02) | N/A | | (1) | Amounts shown are as reported in the “Summary Compensation Table” for our CEO, Jeff Fisher, for the respective years shown. | | | | | | | | | (2) | The amounts reported represent the amount of "Compensation Actually Paid" as calculated in accordance with SEC rules. The dollar amounts do not reflect the actual amount of compensation earned by or paid during the applicable year. For information regarding the decisions made by our Board and the Compensation Committee in regards to the NEOs compensation for each fiscal year, please see the Compensation Discussion & Analysis sections of the proxy statements reporting pay for the applicable years. | | | | | | | | | (3) | The following table provides a reconciliation from the Summary Compensation Table Total for CEO to Compensation Actually Paid to CEO. | | | | | | | |

  68. Pay Versus Performance Tables

    | | 2020 | 2021 | 2022 | 2023 | | SCT Total for CEO ($) | $3,824,632 | $4,737,901 | $5,392,984 | $5,235,398 | | Less: Stock and Option Award Values Reported in SCT for the Covered Year | $(2,162,400) | $(2,387,650) | $(3,099,049) | $(3,131,381) | | Plus: Fair Value for Stock and Option Awards Granted in the Covered Year | $0 | $0 | $0 | $0 | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years | $1,674,850 | $2,615,707 | $3,005,384 | $2,205,944 | | Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year | $(2,012,967) | $58,163 | $424,650 | $(1,495,271) | | Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year | $(1,268,465) | $618,462 | $348,374 | $(270,266) | | Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | $0 | $(64,948) | $0 | $0 | | Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans | $0 | $0 | $0 | $0 | | Compensation Actually Paid to CEO | $55,650 | $5,577,635 | $6,072,343 | $2,544,424 |

  69. Pay Versus Performance Tables

    | Awards' grant date fair values were calculated based on the Black-Scholes option pricing model as of date of grant. Adjustments have been made using award fair values as of each measurement date using the common share price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. Performance-based restricted LTIP unit grant date fair values were calculated using the common share price as of date of grant assuming target performance. Adjustments have been made using the common share price and performance accrual modifier as of year end and as of the date of vest. Time-vested restricted LTIP unit grant date fair values were calculated using the common share price as of date of grant. Adjustments have been made using the common share price as of year end and as of each date of vest. |

  70. Pay Versus Performance Tables

    | (4) The amounts shown are the averages of the amounts of total compensation reported for the following individuals, who were our non-CEO NEOs for the years shown: | | 2020: Dennis Craven, Jeremy Wegner and Peter Willis. Mr. Willis's employment with the Company ended in March 2020 and all of his unvested shares and units accelerated and vested at such time. | | 2021: Dennis Craven and Jeremy Wegner. | | 2022: Dennis Craven and Jeremy Wegner. | | 2023: Dennis Craven and Jeremy Wegner. | | (5) The following table provides a recalculation from Average Summary Compensation Table Total for Non-CEO NEOs to Average Compensation Actually Paid to Non-CEO NEOs. |

  71. Pay Versus Performance Tables

    | | 2020 Average | 2021 Average | 2022 Average | 2023 Average | | Average SCT Total Compensation for Non-CEO NEOs | $1,054,133 | $1,941,792 | $2,246,593 | $2,165,651 | | Subtract: Stock and Option Award Values Reported in SCT for the Covered Year | $(521,078) | $(946,050) | $(1,227,931) | $(1,240,736) | | Add: Fair Value for Stock and Option Awards Granted in the Covered Year | $0 | $0 | $0 | $0 | | Add (subtract): Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years | $570,498 | $945,493 | $1,190,818 | $874,053 | | Add (subtract): Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year | $(425,123) | $24,781 | $143,851 | $(574,984) | | Add (subtract): Fair Value of Stock and Option Awards Forfeited during the Covered Year | $(398,022) | $200,901 | $112,408 | $(90,988) | | Add (subtract): Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans | $0 | $(20,886) | $0 | $0 | | Add (subtract): Aggregate Service Cost and Prior Service Cost for Pension Plans | $0 | $0 | $0 | $0 | | Average Compensation Actually Paid to Non-CEO NEOs | $280,408 | $2,146,031 | $2,465,739 | $1,132,996 | | Awards' grant date fair values were calculated based on the Black-Scholes option pricing model as of date of grant. Adjustments have been made using award fair values as of each measurement date using the common share price as of the measurement date and updated assumptions (i.e., term, volatility, dividend yield, risk free rates) as of the measurement date. Performance-based restricted LTIP unit grant date fair values were calculated using the common share price as of date of grant assuming target performance. Adjustments have been made using the common share price and performance accrual modifier as of year end and as of the date of vest. Time-vested restricted LTIP unit grant date fair values were calculated using the common share price as of date of grant. Adjustments have been made using the common share price as of year end and as of each date of vest. | | | | |

  72. Pay Versus Performance Tables

    | (6) In accordance with SEC rules, amounts in this column represent, as of December 31 of each year presented, the cumulative value of a $100 investment made on January 1, 2020 in our common shares. | | (7) In accordance with SEC rules, amounts in this column represent, as of December 31 of each year presented, the cumulative value of a $100 investment made on January 1, 2020 in the Dow Jones U.S. Hotel & Lodging REIT Index. | | (8) We have presented Adjusted FFO per Share because it is the only financial measure among the performance metrics used for determining compensation actually paid to our NEOs for 2023 and 2022, and for 2021 and 2020, the Compensation Committee and the Board determined not to employ any financial metric due to the uncertain financial impact of the pandemic. Adjusted FFO per Share, which is a non-GAAP financial measure, is calculated by dividing (a) adjusted funds from operations for the period presented (which is our net income or loss excluding items we believe do not represent costs related to hotel operations, including gains or losses from sales of real estate, impairment write-downs, the cumulative effect of changes in accounting principles, depreciation and amortization (excluding amortization of deferred financing costs), adjustments for unconsolidated partnerships and joint ventures, other charges, losses on the early extinguishment of debt) by (b) the weighted average number of our common shares outstanding for the period presented. We believe that Adjusted FFO per Share is a useful financial measure for evaluating the Company’s ongoing operating performance. |