DEF 14A of Umh Properties, Inc.
Filed Apr 5, 2024 · FY20230001493152-24-013241
INFORMATION REGARDING DIRECTOR NOMINEES
INFORMATION REGARDING DIRECTOR NOMINEES The following information concerning the principal occupation, other affiliations and business experience of each of the four Class III Director nominees during the last five years has been furnished to the Company by such nominee:
Class III Directors with Terms Expiring in 2024
Class III Directors with Terms Expiring in 2024
Class III Directors with Terms Expiring in 2024
| Nominee | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | | Anna T. Chew | 65 | Executive Vice President, Chief Financial Officer and Treasurer (2022 to present), Vice President and Chief Financial Officer (1995 to 2022), Chief Accounting Officer (1991 to present), Treasurer (2004 to present), Controller (1991 to 1995) and Director. Certified Public Accountant; Ms. Chew’s extensive public accounting, finance and real estate industry experience are the primary reasons, among others, why Ms. Chew serves on our Board. | 1995 | | Eugene W. Landy | 90 | Founder (1968), Chairman of the Board (1985 to present), President and Chief Executive Officer (1968 to 1995), and Director. Attorney at Law; Founder, Chairman of the Board and Director (1968 to 2022), President and Chief Executive Officer (1968 to 2013) of Monmouth Real Estate Investment Corporation. As our founder and Chairman, Mr. Landy’s unparalleled experience in real estate investing is the primary reason, among others, why Mr. Landy serves on our Board. | 1968 |
Class III Directors with Terms Expiring in 2024
| Nominee | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | | Samuel A. Landy | 63 | President and Chief Executive Officer (1995 to present), Vice President (1991-1995) and Director. Attorney at Law; Director (1989 to 2022) of Monmouth Real Estate Investment Corporation. Mr. Landy’s role as our President and Chief Executive Officer and his extensive experience in real estate investment, operations management and REIT leadership are the primary reasons, among others, why Mr. Landy serves on our Board. | 1992 | | Stuart D. Levy | 54 | Independent Director. Vice President in the Real Estate Finance Group at Helaba-Landesbank Hessen-Thuringen (2006 to present). Mr. Levy’s extensive real estate background is the primary reason, among others, why Mr. Levy serves on our Board. | 2011 |
Class III Directors with Terms Expiring in 2024
At the Annual Meeting, the shareholders of the Company will be requested to elect four Class III Directors. A plurality of the votes cast in person or by proxy at the Annual Meeting, assuming a quorum is present, is required to elect a nominee.
THE COMPANY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE ELECTION OF THE FOUR NOMINEES NAMED ABOVE
THE COMPANY’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE ELECTION OF THE FOUR NOMINEES NAMED ABOVE
INFORMATION CONCERNING CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
INFORMATION CONCERNING CONTINUING DIRECTORS AND EXECUTIVE OFFICERS
Class I Directors with Terms Expiring in 2025
Class I Directors with Terms Expiring in 2025
Class I Directors with Terms Expiring in 2025
| Director | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | | Amy L. Butewicz | 40 | Independent Director. Realtor of Keller Williams Princeton Real Estate (2016 to present); Chair of the Millstone Township Agricultural Advisory Council (2020 to present); Council Member of the Millstone Township Open Space and Farmland Preservation Council (2019 to present); Chair Emeritus of the advisory board of the Rutgers University Equine Science Center (2017 to present). Dr. Butewicz’s extensive background in real estate development and sales as well as her experience working with local municipalities are the primary reasons, among others, why Dr. Butewicz serves on our Board. | 2020 | | Michael P. Landy | 62 | Director. Retired with the sale of Monmouth Real Estate Investment Corporation in March 2022. President and Chief Executive Officer (2013 to 2022) of Monmouth Real Estate Investment Corporation; Member of New York University’s REIT Center Board of Advisors (2013 to present), Member of Nareit’s Advisory Board of Governors (2018 to 2022). Mr. Landy’s extensive experience in real estate finance, investment, capital markets and operations management are the primary reasons, among others, why Mr. Landy serves on our Board. | 2011 | | William E. Mitchell | 57 | Independent Director. General Partner of Strategy Capital (2019 to present). General Partner of Mitchell Portfolio Management (2012 to 2019). Mr. Mitchell’s knowledge of investment analysis, cybersecurity and computer technology are the primary reasons, among others, why Mr. Mitchell serves on our Board. | 2019 | | Kiernan Conway | 61 | Independent Director. Founding Principal and Owner for KC-nomics, LLC (2023-present). Principal and Research Director for Red Shoe Economics, LLC (2020 to 2023). Chief Economist of the CCIM (Certified Commercial Investment Member) (2017 to 2023). Institute Instructor at Federal Financial Institutions Examination Council (FFIEC) (2008 to present). Director of Monmouth Real Estate Investment Corporation (2018 to 2022). Director of Research and Corporate Engagement of the Alabama Center for Real Estate (2017-2020). Prior affiliations with Federal Reserve in Atlanta, GA, South Trust Bank, Colliers International, Cushman and Wakefield, Equitable Real Estate, Wells Fargo Bank and Deloitte. Mr. Conway’s extensive experience as an economist with expertise in real estate, real estate finance and logistics are the primary reasons, among others, why Mr. Conway has been nominated to serve on our Board. | 2022 |
Class II Directors with Terms Expiring in 2026
Class II Directors with Terms Expiring in 2026
Class II Directors with Terms Expiring in 2026
| Director | Age | Present Position with the Company; Business Experience During Past Five Years; Other Directorships | Director Since | | Jeffrey A. Carus | 61 | Independent Director. Founder and Managing Partner of JAC Partners, LLC (2009 to present); Founder and Managing Member of JAC Management, LLC (1998 to present). Mr. Carus’ extensive experience in real estate finance and investment is the primary reason, among others, why Mr. Carus serves on our Board. | 2011 | | Matthew I. Hirsch | 64 | Presiding Independent Director. Attorney at Law (1985 to present) Law Office of Matthew I. Hirsch. Adjunct Professor of Law, Delaware Law School of Widener University (1993 to 2019); Director (2000 to 2022) of Monmouth Real Estate Investment Corporation. Mr. Hirsch’s experience with real estate transactions, legal issues relating to real estate and the real estate industry are the primary reasons, among others, why Mr. Hirsch serves on our Board. | 2013 | | Angela D. Pruitt-Marriott | 52 | Independent Director. Senior Executive and Crisis Communication Specialist at Sitrick and Company (2014 to present); Co-Chair of Communications at Junior League of Brooklyn (2017-2019). Ms. Pruitt-Marriott’s experience with media relations strategies, crisis management and strategic communications are the primary reasons, among others, why Ms. Pruitt-Marriott serves on our Board. | 2021 | | Kenneth K. Quigley, Jr. | 66 | Independent Director. Attorney at Law; President Emeritus of Curry College (2023 to present) and President of Curry College (1996 to 2023); Director of Abington Savings Bank (2022 to present); Director of Hometown Financial Group (2022 to present); Director of Randolph Bancorp (2013-2022); Director of Central Bancorp (2010 to 2011). Mr. Quigley’s management, governance, law, accounting, finance and REIT experience are the primary reasons, among others, why Mr. Quigley serves on our Board. | 2016 |
Compensation Philosophy and Objectives
| ● | establishing a plan that attracts, retains and motivates executives through compensation that is competitive with a peer group of other publicly-traded real estate investment trusts, or REITs; |
Role of Grants of Stock Options and Restricted Stock in Compensation Analysis
Role of Grants of Stock Options and Restricted Stock in Compensation Analysis The Committee views the grant of stock options and restricted stock awards as a form of long-term compensation. The Committee believes that such grants promote the Company’s goal of retaining key employees and align the key employee’s interests with those of the Company’s shareholders from a long-term perspective. The number of options or shares of restricted stock granted to each employee is determined by consideration of various factors including, but not limited to, the employee’s contribution, title, responsibilities and years of service. The Committee takes outstanding awards of stock options and restricted stock into account in making its compensation determinations.
Role of Employment Agreements in Determining Executive Compensation
Role of Employment Agreements in Determining Executive Compensation All of the Company’s currently employed Named Executive Officers are parties to employment agreements. These agreements provide for base salaries, bonuses and customary fringe benefits. The employment agreements also provide for certain severance benefits in the event the named executive officer’s employment is terminated by the Company other than for cause, by the employee for good reason or due to the employee’s death or disability. Such severance benefits are designed to alleviate the financial impact of termination of employment, with the intent of providing for a stable work environment. Other key elements of the Company’s compensation program for the Named Executive Officers are stock options, restricted stock awards and other benefits. Each of these is addressed separately below. In determining initial compensation, the Committee considers all elements of a named executive officer’s total compensation package in comparison to current market practices and other benefits. In reviewing and setting compensation for the Named Executive Officers, the Committee takes the terms of the employment agreements into consideration.
Bonuses
Bonuses
Short-Term Incentive Program (STIP)
Short-Term Incentive Program (STIP) In addition to the provisions for base salaries under the terms of their employment agreements and discretionary cash bonuses awarded by the Committee in recognition of individual accomplishments and achievements, the President and Chief Executive Officer, Executive Vice President, Chief Financial Officer and Treasurer, Executive Vice President and General Counsel and Executive Vice President and Chief Operating Officer are entitled to receive annual cash bonuses for each year during the terms of each respective agreement. Bonuses, as approved by management, are measured from the appropriate prior and current year-end audited financial statements. 75% of the cash bonus for these executive officers are based on the increase in Normalized Funds from Operations (“Normalized FFO”) per share, which does not include any gains or losses from the stock portfolio. The remaining 25% of the cash bonuses for these executive officers is at the Compensation Committee’s discretion based on but not limited to Normalized FFO growth; TSR; occupancy growth; same property NOI growth; sales growth; general and administrative expense management; growth of rental homes; acquisition targets; expansions and development of sites (including by the Company’s Joint Venture with Nuveen Real Estate); capital raising/refinancing; and ESG. The Company considers FFO and Normalized FFO to be an important measure of an equity REIT’s operating performance. We define FFO as net income (loss) attributable to common shareholders, as defined by accounting principles generally accepted in the U.S. (“U.S. GAAP”), excluding extraordinary items, as defined under U.S. GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, the change in the fair value of marketable securities and the gain or loss on the sale of marketable securities plus certain non-cash items such as real estate asset depreciation and amortization. We define Normalized FFO as FFO excluding one-time charges. FFO and Normalized FFO exclude historical cost depreciation as an expense and may facilitate the comparison of REITs which have a different cost basis. However, other REITs may use different methodologies to calculate FFO and Normalized FFO and, accordingly, our FFO and Normalized FFO may not be comparable to all other REITs. The Company considers FFO and Normalized FFO to be meaningful, additional measures of operating performance primarily because they exclude the assumption that the value of its real estate assets diminishes predictably over time and because industry analysts have accepted these as performance measures. In setting discretionary bonuses for 2023, the Committee also considered management’s report on the Company’s 2023 achievements in financial performance, strategic growth and financial position, and the role of each named executive officer in delivering these achievements. The factors that were considered included the progress that was made by the Company during 2023 due to the efforts of management, described in the Business Highlights section on page 5 of this proxy statement. After considering the Company’s 2023 achievements in financial performance, strategic growth and financial position, as outlined above, as well as the individual performance of the Named Executive Officers, the Committee established the individual discretionary cash bonuses for the Named Executive Officers based on the Company’s overall performance and the Named Executive Officers’ individual contributions to these accomplishments.
Long-Term Incentive Program (LTIP)
Long-Term Incentive Program (LTIP) Stock options and restricted stock awards granted to employees typically vest over five years, 20% per year, to encourage employee retention and ensure that their interests are aligned with those of the shareholders. As subsequently described in greater detail, the employment agreements for the President and Chief Executive Officer, Executive Vice President, Chief Financial Officer and Treasurer, Executive Vice President and General Counsel and Executive Vice President and Chief Operating Officer have three, equally-weighted components that comprise the LTIP: time-based, performance-based strategic milestones and performance-based total shareholder return. Annual stock option awards of up to 50,000 shares shall also be granted to Named Executive Officers for the achievement of any of the bonus categories and/or in combination with the Compensation Committee’s discretion based on, but not limited to, Normalized FFO growth; TSR; occupancy growth; same property NOI growth; sales growth; general and administrative expense management; growth of rental homes; acquisition targets; expansions and development of sites (including the Joint Venture); capital raising/refinancing; and ESG. The Committee determines the size of the restricted stock grants and option awards based upon the Committee’s decision as to the degree to which that the relevant performance metrics have been achieved and, in the case of executives other than the CEO, taking into consideration the recommendations of the CEO.
Payments upon Termination or Change in Control
Payments upon Termination or Change in Control In addition, the Named Executive Officers’ employment agreements each contain provisions relating to change in control events and severance upon termination. These change in control and severance terms are designed to promote stability and continuity of senior management. Information regarding these provisions is included in “Employment Agreements” provided below in this Proxy Statement. There are no other agreements or arrangements governing change in control payments.
Evaluation
Evaluation Mr. Eugene W. Landy is employed under an amended employment agreement with the Company. His base compensation under his amended contract has remained at $250,000 per year since 2014. Mr. Landy also received a bonus for 2023 of $119,615 and stock options to purchase 75,000 shares of the Company’s stock, primarily based on performance, including growth of the Company. This stock option has a grant date fair value of $3.10 per share, for a total grant date fair value of approximately $233,000. Additionally, during 2023, Mr. Landy was awarded $50,000 in lieu of a $50,000 retirement benefit to which he is entitled under his employment agreement. Due to the fact that he has continued to serve the Company, the Compensation Committee determined that it was appropriate to pay him an amount equivalent to the retirement benefit that he would have been entitled to had he retired. Mr. Samuel Landy is employed under an Amended and Restated Employment Agreement with the Company. His base compensation under this contract was $766,000 for 2023. Ms. Anna Chew is employed under an Amended and Restated Employment Agreement with the Company. Her base compensation under this contract was $591,000 for 2023. Mr. Craig Koster is employed under an employment agreement with the Company. His base compensation under this contract was $425,000 for 2023. Mr. Brett Taft is employed under an employment agreement with the Company. His base compensation under this contract was $390,000 for 2023. In evaluating Mr. Landy’s, Ms. Chew’s, Mr. Koster’s and Mr. Taft’s eligibility for a short-term cash bonus, long-term equity compensation and discretionary bonuses, as set forth in the below Summary Compensation Table, the Compensation Committee used a combination of corporate and financial metrics as well as time-based vesting requirements. The performance-based metrics include, but are not limited to, normalized FFO per share growth, total shareholder return, same property occupancy increase, NOI growth, sale increase, acquisitions, development of sites (including through any joint ventures), capital raising and ESG. Awarded equity compensation is also based in part upon the performance-based relative shareholder return of the Company as compared to the MSCI US REIT Index. All Named Executive Officers were awarded their respective compensation based on their respective employment agreements and the many contributions that they have made towards the Company’s achievements. In addition to its determination of the executive’s individual performance levels for 2023, the Committee compared the executive’s total compensation for 2023 to that of similarly-situated personnel in the REIT industry using the 2023 Nareit Compensation Survey as well as the total compensation of executives of the Comparable REITs. The Company’s salary and bonus amounts were compared to the ranges presented for reasonableness.
Summary Compensation Table
Summary Compensation Table The following Summary Compensation Table shows compensation paid by the Company for services rendered during 2023, 2022 and 2021 to the five Named Executive Officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary | Bonus (6) | Stock Awards (4) (7) | Option Awards (5) | Non-equity Incentive Plan Compensation (6) | Change in Pension Value and Nonqualified Deferred Compensation Earnings | All Other Compensation | Total | | Eugene W. | 2023 | $250,000 | $119,615 | $-0- | $232,500 | $-0- | $-0- | $50,000(1) | $652,115 | | Landy | 2022 | 250,000 | 109,615 | -0- | 433,000 | -0- | -0- | 50,000(1) | 842,615 | | Chairman of the Board | 2021 | 250,000 | 9,615 | 564,218 | 296,000 | -0- | -0- | 113,000(1) | 1,232,833 | | Samuel A. Landy | 2023 | 766,000 | 29,462 | 785,492 | 91,450 | 383,000 | -0- | 12,200(2) | 2,067,604 | | President and Chief Executive | 2022 | 766,000 | 29,462 | 1,030,973 | -0- | 1,177,000 | -0- | 11,600(2) | 3,015,035 | | Officer | 2021 | 649,000 | 24,962 | 3,059,606 | -0- | 1,412,000 | -0- | 74,400(2) | 5,219,968 | | Anna T. Chew | 2023 | 591,000 | 22,731 | 628,968 | 232,500 | 295,500 | -0- | 12,200(2) | 1,782,899 | | EVP and Chief | 2022 | 591,000 | 22,731 | 826,207 | 176,670 | 943,000 | -0- | 11,600(2) | 2,571,208 | | Financial Officer | 2021 | 493,000 | 18,962 | 2,225,213 | 148,000 | 1,131,000 | -0- | 74,400(2) | 4,090,575 | | Craig Koster | 2023 | 425,000 | 16,346 | 82,600 | 232,500 | 127,500 | -0- | 12,200(3) | 896,146 | | EVP, General Counsel and | 2022 | 425,000 | 116,346 | 122,500 | 176,670 | -0- | -0- | 11,600(3) | 852,116 | | Secretary | 2021 | 375,000 | 114,423 | 387,525 | 148,000 | -0- | -0- | 11,400(3) | 1,036,348 | | Brett Taft | 2023 | 390,000 | 15,000 | 82,600 | 232,500 | 117,000 | -0- | 12,200(3) | 849,300 | | EVP and Chief | 2022 | 390,000 | 115,000 | 122,500 | 176,670 | -0- | -0- | 11,600(3) | 815,770 | | Operating Officer | 2021 | 297,000 | 111,423 | 387,525 | 148,000 | -0- | -0- | 11,400(3) | 955,348 |
Summary Compensation Table
| (1) Represents Director’s annual board cash retainer of $45,000 for 2021, Director’s meeting fees of $18,000 for 2021 and additional retirement benefit of $50,000 in 2023, 2022 and 2021. As of 2022, Company employees who serve as directors on the board do not receive a cash retainer, meeting fees or any other form of compensation for serving on the board. | | (2) Represents Director’s annual board cash retainer of $45,000 for 2021, Director’s meeting fees of $18,000 for 2021 and discretionary contributions by the Company to the Company’s 401(k) Plan allocated to an account of the named executive officer. As of 2022, Company employees who serve as directors on the board do not receive a cash retainer, meeting fees or any other form of compensation for serving on the board. | | (3) Represents discretionary contributions by the Company to the Company’s 401(k) Plan allocated to an account of the named executive officer. | | (4) The grant date fair values were established based on the number of shares granted and the share prices as follows: 2023, 3/21/2023- $14.36, 2022, 3/28/2022- $23.81 and 9/9/2022- $18.52; 2021, 7/14/2021- $22.57 (see the Grants of Plan-Based Awards and Outstanding Equity Awards at Year-End tables below for details). Such shares vest over five years. | | (5) The fair value of the stock options granted was established using the Black-Scholes stock option valuation model. See Annual Report on Form 10-K, Note 8 of the Notes to the Consolidated Financial Statements, for assumptions used in the model. The actual value of the options will depend upon the performance of the Company during the period of time the options are outstanding and the price of the Company’s common stock on the date of exercise. |
Summary Compensation Table
| (6) Includes amounts paid in subsequent year based upon prior year’s performance. On January 10, 2024, the Compensation Committee granted the release of the initial 25% discretionary cash bonus under the Company’s Short Term Incentive Program (“STIP”) for Mr. Sam Landy, Ms. Anna Chew, Mr. Craig Koster and Mr. Brett Taft based upon the Company’s achievement of certain performance metrics. At its March 2024 meeting, based upon the audited 2023 financials, the Committee approved an award of additional non-equity incentive plan compensation to the NEOs (other than Mr. Eugene Landy) based upon the Company’s strong fourth quarter year over year increase in Normalized FFO per Share. That additional compensation is expected to be paid in cash in the second quarter of 2024 and consists of the following amounts not reflected in the above table: Mr. Samuel A. Landy - $383,000; Ms. Anna T. Chew - $295,500; Mr. Craig Koster - $127,500 and Mr. Brett Taft - $117,000. This total non-equity incentive plan compensation awarded to each NEO is for their achievement of the “Target” bonus criteria under the STIP. | | (7) Represents restricted stock awards granted in 2023, 2022 and 2021 for performance years 2022, 2021 and 2020. The actual value of these awards will depend upon the performance of the Company during the period of time the awards are outstanding. For 2021, includes an adjustment for a performance-based award which vested in 2023. |
Pay Versus Performance Table
Pay Versus Performance Table As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The following table discloses information on compensation actually paid (“CAP”) to our principal executive officer (“PEO”) and (on average) to our other NEOs (“non-PEO NEOs”) during the specified years alongside TSR and net income metrics, as well as a Company-selected measure of Normalized Funds from Operations (“Normalized FFO”). The Company selected this measure as the most important in linking compensation actually paid to our NEOs for 2023 to Company performance, as Normalized FFO was the predominant metric used in our 2020-2023 performance awards as described in more detail beginning on page 41.
Pay versus Performance
Pay versus Performance
Pay versus Performance
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid to Non-PEO NEOs (4) | Total Shareholder Return (“TSR”) | FTSE Nareit All REIT TSR (5) | Net Income (Loss) to Common Shareholders (in thousands) | Normalized FFO (in thousands) | | 2023 | $2,067,604 | $1,524,425 | $1,045,115 | $18,149 | $116.79 | $109.95 | $(8,714) | $54,533 | | 2022 | 3,015,035 | 152,145 | 1,270,427 | 617,951 | 116.61 | 98.62 | (36,265) | 46,840 | | 2021 | 5,219,968 | 8,425,139 | 1,828,776 | 3,607,647 | 190.07 | 131.68 | 21,249 | 41,144 | | 2020 | 3,000,284 | 2,622,270 | 1,025,213 | 820,884 | 99.29 | 94.14 | (29,759) | 29,154 |
Pay versus Performance
| (1) Reflects the total compensation of Samuel A. Landy, President and Chief Executive Officer, who is our PEO. Amounts shown are as calculated in the Summary Compensation Table (SCT) for each of the years shown. | | (2) The dollar amounts shown in these columns reflect CAP to Mr. Samuel A. Landy, calculated in accordance with SEC rules. The CAP was calculated beginning with the PEO’s SCT total. The below amounts were deducted from and added to the applicable SCT total compensation: |
PEO Reconciliation of SCT to CAP
| | Summary Compensation Table Total for PEO | Minus Grant Date Fair Value of Awards Granted During Year (a) | Plus (Minus) Equity Award Adjustments (b) | Compensation Actually Paid to PEO | | 2023 | $2,067,604 | $(876,942) | $333,763 | $1,524,425 | | 2022 | 3,015,035 | (1,030,973) | (1,831,917) | 152,145 | | 2021 | 5,219,968 | (2,048,214) | 5,253,385 | 8,425,139 | | 2020 | 3,000,284 | (155,271) | (222,743) | 2,622,270 |
PEO Reconciliation of SCT to CAP
| (a) Represents the total of the amounts reported in the Grant of Plan-Based Awards section for the applicable year. The values of the shares underlying options were established using the Black-Scholes stock option valuation model. | | (b) The calculation of the Equity Award Adjustments is shown in the below table: |
Non-PEO NEO’s (Average) – Reconciliation of SCT to CAP
| (a) Represents the total of the amounts reported in the Grant of Plan-Based Awards section for the applicable year. The values of the shares underlying options were established using the Black-Scholes stock option valuation model. | | (b) The calculation of the Equity Award Adjustments is shown in the below table: |
Pay Ratio
Pay Ratio The following is a reasonable estimate, prepared under applicable SEC rules, of the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of our other employees. The median of the annual total compensation of all employees (other than our President and Chief Executive Officer) is $45,763 as of December 31, 2023. The President and Chief Executive Officer’s total compensation as an employee for 2023, which includes salary, bonus, stock awards, option awards, non-equity incentive plan compensation and all other compensation as disclosed in the summary compensation table above, was $2,067,604. We determined our median employee based on total compensation, which we calculated as annual base pay and the value of annual cash incentives, equity awards and all other compensation paid in 2023. We did not include the CEO, any seasonal employees, contractors or other non-employee workers in our employee population. All of our employees are located in the United States and, therefore, we did not make any cost-of-living adjustments in identifying the median employee. We annualized base pay for any full-time and part-time permanent employees who were employees of the Company as of December 31, 2023 and were employed for less than all of 2023. For 2023, the ratio of the annual total compensation of our President and Chief Executive Officer to the median of the annual total compensation of our other employees was 45 to 1. Given the different methodologies that various companies use to determine an estimate of their pay ratio, our estimated ratio should not be used as a basis for comparison between companies.
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth, for the Named Executive Officers in the Summary Compensation Table, information regarding individual grants of stock options and restricted stock awards made during the year ended December 31, 2023:
Grants of Plan-Based Awards
| Name | Grant Date | Number of Shares of Stock (1) | Number of Shares Underlying Options (2) | Exercise Price of Option Award or Fair Value Per Share at Grant Date of Stock Award | Grant Date Fair Value (3) | Non-Equity Incentive Plan Awards | | Eugene W. Landy | 3/21/2023 | -0- | 75,000 | $14.36 | $232,500 | $-0- | | Samuel A. Landy(4) | 3/21/2023 | -0- | 29,500 | 14.36 | 91,450 | 95,750 | | | 3/21/2023 | 54,700 | -0- | 14.36 | 785,492 | | | Anna T. Chew(4) | 3/21/2023 | -0- | 75,000 | 14.36 | 232,500 | 73,875 | | | 3/21/2023 | 43,800 | -0- | 14.36 | 628,968 | | | Craig Koster(4) | 3/21/2023 | -0- | 75,000 | 14.36 | 232,500 | 31,875 | | | 1/11/2023 | 5,000 | -0- | 16.52 | 82,600 | | | Brett Taft(4) | 3/21/2023 | -0- | 75,000 | 14.36 | 232,500 | 29,250 | | | 1/11/2023 | 5,000 | -0- | 16.52 | 82,600 | |
Grants of Plan-Based Awards
| (1) Restricted stock awards granted during fiscal year 2023 vest 20% per year over a five-year period, and all dividends earned are reinvested in restricted stock. | | (2) These options are exercisable and vest over 5 years, 20% per year, from the date of grant. | | (3) The values of the shares underlying options were established using the Black-Scholes stock option valuation model. The following assumptions were used in the model: 3/21/2023: expected volatility of 27.14%; risk-free interest rate of 3.59%; dividend yield of 3.94%; expected life of the options of ten years. The actual value of the options will depend upon the performance of the Company during the period of time the options are outstanding and the price of the Company’s common stock on the date of exercise. The value of the shares of restricted and unrestricted stock was based on the closing price of the shares on the grant date. | | (4) On January 10, 2024, the Compensation Committee granted the release of the initial 25% discretionary cash bonus under the Company’s Short Term Incentive Program (“STIP”) for Mr. Sam Landy, Ms. Anna Chew, Mr. Craig Koster and Mr. Brett Taft based upon the Company’s achievement of certain performance metrics. Those amounts are shown in the above table. At its March 2024 meeting, based upon the audited 2023 financials, the Committee approved, but has not yet awarded, additional non-equity incentive plan compensation based upon the Company’s strong fourth quarter year over year increase in Normalized FFO per Share and achievement of the “Target” bonus criteria under the STIP in 2023. The following additional compensation is expected to be awarded in the second quarter of 2024: Mr. Samuel A. Landy - $670,250; Ms. Anna T. Chew - $517,125; Mr. Craig Koster - $223,125 and Mr. Brett Taft - $204,750. |
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table 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 to our Named Executive Officers, are described above under “Compensation Discussion and Analysis” and below under “Employment Agreements.”
Outstanding Equity Awards at Year-End
Outstanding Equity Awards at Year-End The following table sets forth for the Named Executive Officers in the Summary Compensation Table, information regarding stock options and stock awards outstanding at December 31, 2023:
Outstanding Equity Awards at Year-End
| | Option Awards (1) | | | | Stock Awards (2) | | | Name | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price | Option Expiration Date | Number of Shares that have not Vested | Market Value of Shares that have not Vested | | Eugene W. Landy | | | | | -0- | $-0- | | Eugene W. Landy | 100,000 | -0- | $9.77 | 04/05/24 | | | | Eugene W. Landy | 100,000 | -0- | $15.04 | 04/04/27 | | | | Eugene W. Landy | 100,000 | -0- | $13.09 | 04/02/28 | | | | Eugene W. Landy | 100,000 | -0- | $13.90 | 04/02/29 | | | | Eugene W. Landy | 60,000 | 40,000 | $9.70 | 03/25/30 | | | | Eugene W. Landy | 40,000 | 60,000 | $22.57 | 07/14/31 | | | | Eugene W. Landy | 20,000 | 80,000 | $18.52 | 09/09/32 | | | | Eugene W. Landy | -0- | 75,000 | $14.36 | 03/21/33 | | | | Samuel A. Landy | | | | | 154,018 | $2,359,551 | | Samuel A. Landy | 50,000 | -0- | $14.25 | 01/19/27 | | | | Samuel A. Landy | 50,000 | -0- | $15.04 | 04/04/27 | | | | Samuel A. Landy | 50,000 | -0- | $13.09 | 04/02/28 | | | | Samuel A. Landy | -0- | 29,500 | $14.36 | 03/21/33 | | | | Anna T. Chew | | | | | 123,211 | $1,887,586 | | Anna T. Chew | 10,000 | -0- | $14.25 | 01/19/27 | | | | Anna T. Chew | 50,000 | -0- | $15.04 | 04/04/27 | | | | Anna T. Chew | 50,000 | -0- | $13.90 | 04/02/29 | | | | Anna T. Chew | -0- | 20,000 | $9.70 | 03/25/30 | | | | Anna T. Chew | 20,000 | 30,000 | $22.57 | 07/14/31 | | | | Anna T. Chew | 7,800 | 31,200 | $23.81 | 03/28/32 | | | | Anna T. Chew | -0- | 75,000 | $14.36 | 03/21/33 | | | | Craig Koster | | | | | 18,988 | $290,903 | | Craig Koster | 4,500 | -0- | $9.77 | 04/05/24 | | | | Craig Koster | 20,000 | -0- | $15.04 | 04/04/27 | | | | Craig Koster | 20,000 | -0- | $13.09 | 04/02/28 | | | | Craig Koster | 20,000 | -0- | $11.42 | 01/02/29 | | | | Craig Koster | 18,000 | 12,000 | $9.70 | 03/25/30 | | | | Craig Koster | 20,000 | 30,000 | $22.57 | 07/14/31 | | | | Craig Koster | 7,800 | 31,200 | $23.81 | 03/28/32 | | | | Craig Koster | -0- | 75,000 | $14.36 | 03/21/33 | | | | Brett Taft | | | | | 18,988 | $290,903 | | Brett Taft | 20,000 | -0- | $9.77 | 04/05/24 | | | | Brett Taft | 20,000 | -0- | $15.04 | 04/04/27 | | | | Brett Taft | 20,000 | -0- | $13.09 | 04/02/28 | | | | Brett Taft | 40,000 | -0- | $11.42 | 01/02/29 | | | | Brett Taft | 30,000 | 20,000 | $9.70 | 03/25/30 | | | | Brett Taft | 20,000 | 30,000 | $22.57 | 07/14/31 | | | | Brett Taft | 7,800 | 31,200 | $23.81 | 03/28/32 | | | | Brett Taft | -0- | 75,000 | $14.36 | 03/21/33 | | |
Outstanding Equity Awards at Year-End
| (1) Beginning in March 2020, all stock options awarded to employees vest 20% per year over a 5-year period. This applies to the options that expire starting in 2030. All other options that were previously awarded and expire prior to 2030, vest 1 year from the date of grant. | | (2) Restricted stock awards vest over 5 years, 20% per year, from the date of grant. Restricted stock awards granted on January 29, 2021, vest in June 2023. The following is the vesting schedule for the shares that have not yet vested: Mr. Samuel A. Landy – 52,421 shares, 35,915 shares, 33,377 shares, 20,897 shares, and 11,407 shares in 2024, 2025, 2026, 2027 and 2028, respectively; Ms. Anna T. Chew – 41,845 shares, 28,760 shares, 26,732 shares, 16,739 shares and 9,134 shares in 2024, 2025, 2026, 2027 and 2028, respectively; Mr. Craig Koster- 5,659 shares, 5,659 shares, 4,449 shares, 2,163 shares and 1,058 shares in 2024, 2025, 2026, 2027 and 2028, respectively; and Mr. Brett Taft – 5,659 shares, 5,659 shares, 4,449 shares, 2,163 shares and 1,058 shares in 2024, 2025, 2026, 2027 and 2028, respectively. Market value is based on the closing price of our common stock on December 29, 2023 of $15.32. |
Option Exercises and Stock Vested
Option Exercises and Stock Vested The following table sets forth summary information concerning option exercises and vesting of stock awards for each of the Named Executive Officers during the year ended December 31, 2023:
Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)* | | Eugene W. Landy | -0- | $-0- | 38,946 | $616,516 | | Samuel A. Landy | -0- | -0- | 187,686 | 2,909,102 | | Anna T. Chew | 10,000 | 63,100 | 133,694 | 2,066,882 | | Craig Koster | -0- | -0- | 19,921 | 317,127 | | Brett Taft | -0- | -0- | 19,921 | 317,127 |
Option Exercises and Stock Vested
* Value realized based on the closing price of the shares on the NYSE as of the date of exercise/vesting.
Potential Payments upon Termination of Employment or Change-in-Control under the Employment Agreements
Potential Payments upon Termination of Employment or Change-in-Control under the Employment Agreements Under the terms of the Agreements, the Named Executive Officers would receive payment upon termination of employment or change-in-control. The table below reflects the amount that could be payable under the Agreements. These disclosed amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the Named Executive Officers, which would only be known at the time that they become eligible for payment and would only be payable if a termination of employment, or voluntary resignation, were to occur.
Potential Payments upon Termination of Employment or Change-in-Control under the Employment Agreements
| | Voluntary Resignation on 12/31/23 | Termination Not for Cause or Voluntary Resignation for Good Reason on 12/31/23 | Termination for Cause on 12/31/23 | Termination Not for Cause or Voluntary Resignation for Good Reason (After a Change- in-Control) on 12/31/23 | Termination due to Disability on 12/31/23 | Termination due to Death on 12/31/23 | | Eugene W. Landy | $450,000(1) | $450,000(1) | $450,000(1) | $1,650,000(2) | $750,000(3) | $450,000(3) | | Samuel A. Landy | -0- | 8,806,551(4) | -0- | 8,806,551(5) | 4,763,884(6) | 4,763,884(6) | | Anna T. Chew | -0- | 6,973,086(4) | -0- | 6,973,086(5) | 3,779,753(6) | 3,779,753(6) | | Craig Koster | -0- | 2,020,903(4) | -0- | 2,020,903(5) | 952,570(6) | 952,570(6) | | Brett Taft | -0- | 1,894,903(4) | -0- | 1,894,903(5) | 903,570(6) | 903,570(6) |
Potential Payments upon Termination of Employment or Change-in-Control under the Employment Agreements
| (1) Consists of severance payments of $450,000, with $150,000 payable on the termination date and on each of the first two anniversaries of the termination date. | | (2) Mr. Landy shall receive a lump-sum payment of $1,200,000 in the event of a change in control, provided that the sale price of the Company is at least $16 per share of common stock. In addition, if Mr. Landy’s employment agreement is terminated, he receives severance payments of $450,000, with $150,000 payable on the termination date and on each of the first two anniversaries of the termination date. | | (3) In the event of a disability, as defined in the agreement, Mr. Landy shall receive disability payments equal to his base salary for a period of three years, payable in monthly installments. He has a death benefit of $450,000 payable to Mr. Landy’s beneficiary (with $100,000 payable thirty days after death and the balance one year after death). | | (4) Represents three (3) times the sum of (i) Employee’s base salary as in effect for the calendar year in which the termination occurs plus (ii) the average of the annual cash bonus amounts earned by Employee over the three (3) year period immediately preceding the year in which Employee’s termination occurs plus the market value of any unvested restricted stock grants as of December 29, 2023. The cash severance shall be made in thirty-six (36) consecutive and equal monthly installments. | | (5) Represents three (3) times the sum of (i) Employee’s base salary as in effect for the calendar year in which the termination occurs plus (ii) the average of the annual cash bonus amounts earned by Employee over the three (3) year period immediately preceding the year in which Employee’s termination occurs plus the market value of any unvested restricted stock grants as of December 29, 2023. The cash severance shall be a lump sum payment provided that it would not violate Section 409A of the Internal Revenue Code of 1986, as amended. | | (6) Represents one (1) times the sum of (i) Employee’s base salary as in effect for the calendar year in which the termination occurs plus (ii) the average of the annual cash bonus amounts earned by Employee over the three (3) year period immediately preceding the year in which Employee’s termination occurs plus the market value of any unvested restricted stock grants as of December 29, 2023. The cash severance shall be made in twelve (12) consecutive and equal monthly installments. |
Director Compensation
Director Compensation During 2023, non-employee directors received a fixed annual cash retainer of $55,000, an annual equity retainer to a fixed dollar amount of $55,000 and the Presiding Director was awarded an annual cash retainer of $11,000. Those retainer amounts were paid on a quarterly basis in arrears. Directors who also served as Named Executive Officers for UMH are not entitled to any compensation for serving on the Board. In addition, each non-employee director received an option to purchase 10,000 shares on March 21, 2023 that vest 20% per year over a 5-year period. The following compensation was paid to the directors for service during 2023:
Director Compensation
| ● | Audit committee chairperson: $22,000 |
Director Compensation
| ● | Compensation committee chairperson: $16,500 |
Director Compensation
| ● | Nominating and Corporate Responsibility committee chairperson: $11,000 |
Director Compensation
| ● | Cybersecurity subcommittee chairperson: $5,500 |
Director Compensation
| ● | Committee member retainer: $5,500 |
Director Compensation
| ● | Subcommittee member retainer: $2,750 |
Director Compensation
The table below sets forth a summary of compensation received by the Company’s non-employee directors for the year ended December 31, 2023:
Director Compensation
| Director | Annual Board Cash Retainer | Committee Member Retainer | Unrestricted Stock Awards (7) | Option Awards (8) | Total Fees | | Amy L. Butewicz (2) (5) (6) | $55,000 | $7,564 | $55,007 | $31,000 | $148,571 | | Jeffrey A. Carus (1) (3) | 55,000 | 11,000 | 55,007 | 31,000 | 152,007 | | Kiernan Conway (3) (6) | 55,000 | 6,188 | 55,007 | 31,000 | 147,195 | | Matthew I. Hirsch (2) (4) | 66,000 | 5,500 | 55,007 | 31,000 | 157,507 | | Michael P. Landy | 55,000 | -0- | 55,007 | 31,000 | 141,007 | | Stuart D. Levy (2) (3) (5) | 55,000 | 19,252 | 55,007 | 31,000 | 160,259 | | William E. Mitchell (1) (2) (5) | 55,000 | 27,500 | 55,007 | 31,000 | 168,507 | | Angela D. Pruitt-Marriott (1) (5) (6) | 55,000 | 8,251 | 55,007 | 31,000 | 149,258 | | Kenneth K. Quigley, Jr. (1) (3) | 55,000 | 27,500 | 55,007 | 31,000 | 168,507 | | | $506,000 | $112,755 | $495,063 | $279,000 | $1,392,818 |
Director Compensation
| (1) Mr. Carus, Mr. Mitchell (Chairman of the Compensation Committee), Ms. Pruitt-Marriott and Mr. Quigley, Jr. are the current members of the Compensation Committee. | | (2) Dr. Butewicz, Mr. Hirsch, Mr. Levy (Chairman of the Nominating and Corporate Responsibility Committee) and Mr. Mitchell are the current members of the Nominating and Corporate Responsibility Committee. | | (3) Mr. Carus, Mr. Conway, Mr. Levy and Mr. Quigley, Jr. (Chairman of the Audit Committee) are the current members of the Audit committee. | | (4) Mr. Hirsch is the Presiding Director whose role is to preside over the executive sessions of the non-management directors. | | (5) Dr. Butewicz, Mr. Levy, Mr. Mitchell (Chairperson) and Ms. Pruitt-Marriott also serve on the Cybersecurity Subcommittee of the Audit Committee. | | (6) Dr. Butewicz, Mr. Conway and Ms. Pruitt-Marriott (Chairperson) also serve on the ESG Subcommittee of the Nominating and Corporate Responsibility Subcommittee. | | (7) Represents a grant of 3,594 shares of unrestricted common stock for the annual equity retainer valued at $55,007. The value of the shares of unrestricted stock was based on the closing price of the shares on the grant date. | | (8) Represents a grant of 10,000 shares in stock options to each director valued at $31,000. The fair value of the stock options granted was established using the Black-Scholes stock option valuation model. See Annual Report on Form 10-K, Note 8 of the Notes to the Consolidated Financial Statements, for assumptions used in the model. These options were awarded on March 21, 2023 and vest over five years, 20% per year. |
Pension Benefits and Nonqualified Deferred Compensation Plans
Pension Benefits and Nonqualified Deferred Compensation Plans Except as provided in the specific agreements previously described, the Company has no pension or other post-retirement plans in effect for Officers, Directors or employees or a nonqualified deferred compensation plan. Payments made during 2023 for Mr. Eugene W. Landy amounted to $50,000. The Company’s employees may elect to participate in the Company’s 401(k) Plan.