DEF 14A of Agree Realty Corp
Filed Apr 4, 2025 · FY20240001558370-25-004475
THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS The Board has general oversight responsibility for our affairs, and the directors, in exercising their duties, represent and act on behalf of the stockholders. Although the Board does not have responsibility for our day-to-day management, it stays regularly informed about our business and provides guidance to management through periodic meetings and other informal communications. The Board is significantly involved in, among other things, the strategic and financial planning process, leadership development and succession planning, as well as other functions carried out through the Board committees as described below. Board Leadership Structure. The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide independent oversight of management. The Board understands that there is no single, generally accepted approach to providing board leadership and the right board leadership structure may vary as circumstances warrant. Richard Agree served as our Chairman of the Board and Chief Executive Officer from December 1993 to January 2013 and has served as our Executive Chairman of the Board since January 2013. Joel Agree served as our President and Chief Operating Officer until his promotion to Chief Executive Officer in January 2013 and has served as a director since June 2009. Subject to the direction of the Board, including the Executive Chairman, Joel Agree has general responsibility and ultimate authority for the implementation of our policies. Based on a review of the Board leadership structure in 2019, the Board created the Lead Independent Director position to further promote independence and to demonstrate our commitment to strong corporate governance. Mr. Lehmkuhl has served as the Lead Independent Director since December 2020. The Board, which consists of a majority of independent directors, exercises a strong, independent oversight function. This oversight function is enhanced by the fact that the Audit Committee, the Compensation Committee and the Nominating and Governance Committee are comprised entirely of independent directors and by oversight by the Lead Independent Director. Under our Bylaws and Corporate Governance Guidelines, the Board has the ability to change its structure, should that be deemed appropriate and in the best interest of our Company and our stockholders. The Board believes that these factors provide the appropriate balance between the authority of those who oversee our Company and those who manage it on a day-to-day basis. Risk Management. The Board takes an active and informed role in our risk management policies and strategies. Our executive officers, who are responsible for our day-to-day risk management practices, present to the Board on the material risks to our Company, including capital markets risk, interest rate risk, operational risk, and risk related to information technology and cybersecurity. At that time, the management team also reviews with the Board our risk mitigation policies and strategies specific to each risk that is identified. Our Compensation Committee reviews and determines whether any of our compensation policies or practices subject the Company to inappropriate risk. Our Audit Committee assists the Board in fulfilling its responsibilities related to the oversight of major financial risk exposures; guidelines and policies governing the process by which management assesses and manages such risk exposures; accounting and reporting processes; our system of internal accounting and financial controls; and our technology security policies and internal cybersecurity and privacy controls. Our Audit Committee reviews and determines cybersecurity, privacy, information security and financial risk exposures and the steps our management has taken to monitor and control these exposures. Throughout the year, management monitors our risk profile and updates the Board as new material risks are identified or the aspects of a risk previously presented to the Board materially change. Meetings. The Board and its committees meet throughout the year at regularly scheduled meetings and also hold special meetings and act by written consent as appropriate. The Board met four times during 2024. During 2024, each director attended, virtually or in person, 75% or more in aggregate of (i) the number of meetings of the Board and (ii) the number of meetings held by all committees of the Board on which such director served. It has been and is the policy of the Board that directors attend annual meetings of stockholders except where the failure to attend is due to unavoidable circumstances or conflicts discussed in advance by the director with the Chairman of the Board. Each director serving on the Board at the time of the 2024 annual meeting attended our 2024 annual meeting of stockholders. Lead Independent Director. Our independent directors meet in executive sessions quarterly without management. As Lead Independent Director, Mr. Lehmkuhl presides at executive sessions of our independent directors and Board meetings at which the Executive Chairman is not present; serves as liaison between the Executive Chairman and management as needed; reviews and approves Board meeting agendas, topics and schedules; communicates as appropriate with the Executive Chairman and management regarding matters discussed by the independent directors; and performs other duties as the Board may from time to time delegate to assist the Board in fulfilling its responsibilities. Director Independence. The NYSE listing standards set forth objective requirements for a director to satisfy, at a minimum, in order to be determined to be independent by the Board. In addition, in order to conclude a director is independent in accordance with the NYSE listing standards, the Board must also consider all relevant facts and circumstances, including commercial, industrial, banking, consulting, legal, accounting, charitable and familial relationships. Pursuant to our Corporate Governance Guidelines and the NYSE listing standards, which require that a majority of our directors be independent within the meaning of the NYSE listing standards, the Board undertook a review of the independence of all non-management directors. Based upon information requested from and provided by each director and director nominee concerning his or her background, employment and affiliations, including family relationships, the Board has affirmatively determined that the following eight of our ten directors are independent under NYSE listing standards and our Corporate Governance Guidelines and do not have a relationship with us that would interfere with such person’s ability to exercise independent judgment as a member of the Board: Ms. Dearing, Ms. Frankel, Ms. He, Mr. Hollman, Mr. Judlowe, Mr. Lehmkuhl, Mr. Rakolta, and Mr. Rossi. In making this determination, the Board has considered the relationships described below under “Related Person Transactions,” and determined they do not affect independence. The Board’s director independence standards outlined in our Corporate Governance Guidelines can be found on our website at www.agreerealty.com in the Policies and Charters section. Stock Ownership Requirements. To further align the interests of certain of our executive officers and directors with the interest of our stockholders, and to promote our commitment to sound corporate governance, the Board has adopted stock ownership guidelines. The stock ownership guidelines apply to the Executive Chairman, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Growth Officer, General Counsel and non-employee directors. A summary of those guidelines is set forth in “Compensation Discussion and Analysis — Stock Ownership Guidelines.”
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION The Compensation Committee establishes and oversees our director compensation program. Director compensation is established with a view to attract highly qualified non-management directors and fairly compensate non-management directors for their time and effort on behalf of stockholders. In consultation with Meridian, our Compensation Committee regularly benchmarks our director compensation to that of our peers to ensure that it remains competitive to attract and retain non-employee directors.
COMPENSATION OBJECTIVES AND PHILOSOPHY
| ➢ | Align executives’ long-term interests with those of our stockholders. The Company seeks to align these interests by providing a significant portion of executive officer compensation in the form of common stock. Through stock ownership guidelines for named executive officers and grants of restricted common stock with time-based vesting provisions and performance unit awards, the amount of which are based on total shareholder return, the value of the executive officers’ total compensation should increase as total returns to stockholders increase. The Company expects the value of these elements as a percentage of each executive officer’s annual base salary to motivate executive officers to continually improve their performance and create value for the Company over the long-term. In 2025, the Company’s executive compensation program will continue to be designed to reward favorable execution of specific Company performance goals that in turn drive stockholder value. |
COMPENSATION OBJECTIVES AND PHILOSOPHY
| ➢ | Reward superior individual and Company performance on both a short-term and long-term basis. Performance-based pay aligns the interests of management with the interests of our stockholders. Performance-based compensation motivates and rewards individual efforts and company success. |
DETERMINING COMPENSATION FOR NAMED EXECUTIVE OFFICERS
DETERMINING COMPENSATION FOR NAMED EXECUTIVE OFFICERS The Committee meets without management present to determine the compensation of the named executive officers. Prior to such meeting, the Committee receives compensation recommendations from Joel Agree, our President and Chief Executive Officer. We believe that because of his experience with our Company and his involvement in setting and executing the Company’s business goals, strategies, and performance, he is able to provide valuable input regarding the overall effectiveness of the management team and each individual’s contribution to our performance. Joel Agree’s recommendations are supported by formal performance reviews for each named executive officer which include an evaluation of the individual’s performance against pre-determined performance metrics. The Committee retains the authority to modify his recommendations and reviews such recommendations for their reasonableness based on Company performance, market information, and the Committee’s compensation philosophy and related considerations. Joel Agree does not provide input with respect to his own compensation. In 2024, the Company and the Committee utilized Meridian to assist the Committee with structuring the executive compensation program, evaluating the Company’s compensation peer group, and the accounting for and benchmarking of the Company’s executive compensation program.
COMPENSATION COMMITTEE CONSIDERATION OF THE 2024 VOTE ON EXECUTIVE COMPENSATION
| | ✓ | Enhanced disclosure by providing MBO metrics and actual results for 2021, and have continued that practice in subsequent proxy filings | | | ✓ | Updated LTI awards to be 55% performance-based and 45% time-based for all NEOs starting in 2023 | | 2022 | ✓ | Improved disclosure by providing the Company-defined Peer Group used for performance units, and have continued that practice in subsequent proxy filings | | | ✓ | Introduced a payout cap on performance units at 100% if absolute total shareholder return (“TSR”) is negative, starting with 2023 awards | | | ✓ | Augmented disclosure by adding our prior period performance unit results to the proxy statement (previously only disclosed in Form 10-K), and have continued that practice | | | ✓ | Determined a new compensation peer group that better aligns with the proxy advisory firms and is comprised of companies of comparable size and performance | | 2023 | ✓ | Enhanced our CEO’s target LTI awards to be 60% performance-based and 40% time- based starting with 2024 awards | | | ✓ | Determined it was appropriate to limit maximum bonus amounts to 200% of target for all NEOs | | | ✓ | Incorporated ESG into the Committee's assessment of performance for NEOs |
COMPENSATION COMMITTEE CONSIDERATION OF THE 2024 VOTE ON EXECUTIVE COMPENSATION
| 2024 | ✓ | Further enhanced our CEO’s target LTI awards to be 70% performance-based and 30% time- based starting with 2025 awards | | | ✓ | Expanded our Company-defined Peer Group for performance units to include two additional net lease peers, Broadstone Net Lease, Inc. and NETSTREIT Corporation | | | ✓ | Increased the weighting for quantitative management business objectives for the Chief Operating Officer, Chief Growth Officer, and General Counsel, while decreasing or maintaining the weighting for the qualitative assessment of business goals or objectives. | | 2025 | ✓ | Expanded and enhanced our compensation peer group by adding six peers while removing four peers. The peers added include Brixmor Property Group Inc., Federal Realty Investment Trust, Kimco Realty Corporation, Phillips Edison & Company, Inc., Regency Centers Corporation, and W. P. Carey Inc. The peers removed include Acadia Realty Trust, Retail Opportunity Investment Corp., SITE Centers Corp., and Spirit Realty Capital, Inc. |
ELEMENTS AND CRITERIA OF COMPENSATION IN 2024 FOR NAMED EXECUTIVE OFFICERS
In consultation with Meridian, the Committee assesses the competitiveness of the Company’s current compensation levels for the named executive officers on an annual basis, considering the objectives above. This assessment compares the Company’s compensation of certain named executive officers to the same officer levels of a peer group. For the purpose of 2024 compensation decisions, the Committee utilized 13 publicly traded REITs, considering factors including enterprise value, market capitalization, funds from operations, total assets and alignment with peer groups selected by proxy advisory firms. The members of the peer group were:
THE EXECUTIVE INCENTIVE PLAN
THE EXECUTIVE INCENTIVE PLAN The Company maintains an Executive Incentive Plan under which the Committee granted annual cash and long-term equity incentive awards for 2024 to all named executive officers. Equity Awards. In 2024, the Committee continued its practice of awarding annual cash awards and long-term equity incentive awards under the Executive Incentive Plan. In February 2020, following a review of the Company’s long-term equity incentive award program against that of its peer group, the Committee amended its Executive Incentive Plan through the establishment of fixed equity awards for each named executive officer. The Committee continued this practice in February 2024, granting to our officers long-term equity incentive awards comprised of restricted common stock and performance units. The restricted common stock awards are subject to time-based vesting conditions, and the restricted performance unit awards are subject to performance-based vesting conditions, which were established at the time of grant. A detailed summary of the awards and the vesting conditions are set forth below under “Long-Term Equity Incentive Compensation.” Annual Cash Incentive Awards. The Committee believes that annual cash incentive awards provide a meaningful incentive for the achievement of short-term Company and individual goals, while assisting us in retaining, attracting and motivating employees in the near term. In 2024, the Committee determined it was appropriate to limit maximum bonus amounts to 200% of target for all NEOs, including our Chief Executive Officer. The 2024 objectives were approved by the Committee in February 2024. The Committee established the incentive targets for the annual awards in recognition of the higher interest rate environment and the potential for continued capital markets volatility and related challenges. AFFO per share growth reached near record levels in 2021 and 2022. This growth was driven by the lack of competition for acquiring assets during the COVID-19 pandemic as well as historically low interest rates which helped drive larger investment spreads. In 2023, while the Company still anticipated positive AFFO per share growth, it reduced its target for the rate of growth year-over-year driven by a rise in short-term interest rates as well as the 10-year U.S. Treasury yield, resulting in a highly restrictive rate environment. In 2024, the Company anticipated an acceleration in AFFO per share growth as compared to the prior year, though its target for the rate of growth still reflected the higher interest rate environment. Higher interest rates can increase the Company’s cost of capital and have the potential to reduce investment spreads, dependent on market conditions. In addition, the increase in interest rates and other factors continued to contribute to a slowdown in transaction activity in the real estate markets. The Committee recognizes that the acquisition volume targets established for the Company in 2024 were lower than 2023. However, the Committee believes the lower targets were prudent as the Company emphasized achieving appropriate investment spreads to drive AFFO per share growth for stockholders. In addition, the Company continued to achieve acquisition volume that was above pre-pandemic levels despite the higher interest rate environment. The Committee did not make any adjustments to pre-established targets during the year. The 2024 threshold, target, and maximum cash incentive award opportunity, as well as the 2024 actual award as a percentage of base salary, are included below.
THE EXECUTIVE INCENTIVE PLAN
| | 2024 Annual Cash Incentive Bonus Opportunity | | | | | | (as % of Base Salary) | | | | | Position | Threshold | Target | Maximum | 2024 Actual | | Chief Executive Officer | 75% | 175% | 350% | 314% | | Chief Financial Officer | 50% | 100% | 150% | 133% | | Chief Operating Officer | 50% | 75% | 150% | 125% | | Chief Growth Officer | 50% | 75% | 150% | 111% | | General Counsel | 25% | 50% | 100% | 89% |
THE EXECUTIVE INCENTIVE PLAN
The annual cash incentive opportunities were awarded to the extent the Company attained certain threshold, target or maximum-level achievements for the following performance goals during 2024, as certified by the Committee in February 2025: AFFO Growth Goal: The Committee believes that AFFO per share, a non-GAAP financial measure, is an appropriate performance metric because it is a widely accepted measure of operating performance in the REIT industry that is used by analysts and investors to evaluate and compare different companies. AFFO per share adjusts for amortization and depreciation, impairment, and other items, which allows industry analysts and investors to compare the ongoing operating performance of different REITs without having to adjust for those items. Given the importance of AFFO per share growth in driving long-term stockholder value, the Committee assigned a 50% weighting to this metric for the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer and General Counsel. The Committee assigned a 20% weighting to this metric for the Chief Growth Officer given the position is more focused on driving investment activity across all three of the Company’s external growth platforms. The 2024 threshold, target, and maximum- level achievements and 2024 actual performance are included below:
THE EXECUTIVE INCENTIVE PLAN
| | Threshold | Target | Maximum | 2024 Actual | | AFFO Growth | 2.5% | 3.5% | 5.0% | 4.6% |
THE EXECUTIVE INCENTIVE PLAN
| Cash Award Summary | Threshold | Target | Maximum | 2024 Actual | Award % of Target | | Chief Executive Officer | $337,500 | $787,500 | $1,575,000 | $1,368,228 | 174% | | Chief Financial Officer | $108,150 | $216,300 | $324,450 | $296,053 | 137% | | Chief Operating Officer | $108,150 | $162,225 | $324,450 | $281,855 | 174% | | Chief Growth Officer | $43,260 | $64,890 | $129,780 | $112,742 | 174% | | General Counsel | $49,730 | $99,459 | $198,919 | $172,804 | 174% |
THE EXECUTIVE INCENTIVE PLAN
Management Business Objectives: For the named executive officers, a portion of the award was based upon the achievement of specific operating and management business objectives. The Committee believes that the targets set for each objective are rigorous and aligned with creating long-term stockholder value. In response to stockholder feedback and to further enhance the transparency of our annual incentive disclosure, we have included the weighting for each objective for our CEO. The weighting for each measure may vary from year to year and is determined based on each named executive officer’s contribution to an objective or overall priority. The Committee believes that the operating and management business objectives outlined below are critical to the Company’s external growth, balance sheet management, and portfolio quality, all of which drive long-term stockholder value. Given the importance of external growth in driving AFFO per share growth, the metrics related to acquisitions and development received the highest weighting for the Company’s CEO. The metrics related to balance sheet management and portfolio quality ensure that the CEO is motivated to drive external growth and AFFO per share growth in a responsible and prudent manner. The specific operating and management business objectives are detailed below:
THE EXECUTIVE INCENTIVE PLAN
| Management Business Objectives | Weighting | Threshold | Target | Maximum | Actual | | Acquisition Volume | 15.0% | $200.0 | $400.0 | $800.0 | $866.6 | | Development & Development Funding Platform Commenced | 5.0% | $75.0 | $125.0 | $200.0 | $120.0 | | Fixed Charge Coverage Ratio at Year-End | 5.0% | 4.00x | 4.25x | 4.50x | 4.38x | | Net Debt to Recurring EBITDA at Year-End(1) | 5.0% | 5.5x | 5.0x | 4.5x | 3.3x | | Investment Grade Tenants as % of Annualized Base Rent | 2.5% | 62.5% | 65.0% | 67.5% | 68.2% | | Portfolio Occupancy | 2.5% | 98.5% | 99.0% | 99.5% | 99.6% |
THE EXECUTIVE INCENTIVE PLAN
$ in millions.
THE EXECUTIVE INCENTIVE PLAN
| (1) Proforma for the settlement of any outstanding forward equity at year-end. |
THE EXECUTIVE INCENTIVE PLAN
The table below includes the total weighting attributable to management business objectives for each named executive officer. In addition, threshold, target, and maximum-level achievements and 2024 actual performance are included below:
THE EXECUTIVE INCENTIVE PLAN
| Cash Award Summary | Weighting | Threshold | Target | Maximum | 2024 Actual | Award % of Target | | Chief Executive Officer | 35% | $236,250 | $551,250 | $1,102,500 | $981,066 | 178% | | Chief Financial Officer | 35% | $75,705 | $151,410 | $227,115 | $216,464 | 143% | | Chief Operating Officer | 30% | $64,890 | $97,335 | $194,670 | $129,780 | 133% | | Chief Growth Officer | 70% | $151,410 | $227,115 | $454,230 | $336,407 | 148% | | General Counsel | 25% | $24,865 | $49,730 | $99,459 | $83,303 | 168% |
THE EXECUTIVE INCENTIVE PLAN
Achievement of Business Goals: The Company uses the Korn Ferry Leadership Architect for evaluation of its executive officers. Six specific competencies have been identified as Core Competencies (“Competencies”): 1) Drives Results, 2) Action Oriented, 3) Business Insight, 4) Communicates Effectively, 5) Collaborates and 6) Being Resilient. The Competencies are used to measure each executive’s performance against key business goals on a quarterly and annual basis. For the Chief Executive Officer and Chief Financial Officer, 15% of the award was based upon the Committee’s qualitative assessment of their achievement of business goals or objectives. For the Chief Operating Officer, Chief Growth Officer and General Counsel, 20%, 10%, and 25%, respectively, of the award was based upon the Committee’s qualitative assessment of their achievement of business goals or objectives. While the Committee takes the Chief Executive Officer’s recommendations under advisement in determining each named executive officer’s individual performance, the Committee retains the authority and responsibility to make the final compensation decision. The Committee evaluates each named executive officer’s performance through reports by these executives to the Board and other interactions with these executives concerning the Company’s strategy, operations, and performance. For 2024, the Committee’s assessment included the following individual goals and contributions:
Danielle Spehar — General Counsel
The Committee determined Ms. Spehar’s individual achievements met the maximum payout level and awarded her $99,459 for this portion of her annual incentive. Long-Term Equity Incentive Compensation. The Committee believes that share-based incentive awards, with multi-year vesting, provide a strong incentive for employees to focus on our long-term fundamentals and thereby create long-term stockholder value. These awards also assist us in maintaining a stable, continuous management team in a competitive market. The Committee historically has issued restricted stock for purposes of long-term incentive compensation, which provides significant upside incentive and aligns our officers’ interests with our stockholders, while also maintaining some down- market protection. For awards granted during fiscal year 2024, the Committee decided to grant long-term equity grants consisting of 55% performance units and 45% restricted common stock for most executives. However, for the Chief Executive Officer, the Committee determined a structure of 60% performance units and 40% restricted common stock. After the review of benchmarking provided by Meridian, the Committee determined to further increase this weighting for the Chief Executive Officer to 70% performance units and 30% restricted common stock for the award granted during fiscal year 2025 to better align with the peer group and promote additional long-term alignment with stockholders. Awards of Restricted Common Stock. The shares of restricted common stock granted to the individuals in February 2024 vest ratably over a three-year period with one-third (1/3rd) of the shares vesting on each of the first, second, and third anniversaries of the grant date. The Committee awarded an aggregate of 55,556 shares of restricted common stock in February 2024 for a total value of $3,195,026 to the named executive officers. The grant date fair value of each share was $57.51 based on the closing sales price of our common stock on February 23, 2024. The grants were as follows: Joel Agree, 31,299 shares; Peter Coughenour, 7,825 shares; Nicole Witteveen, 3,912 shares; Craig Erlich, 7,825 shares; and Danielle Spehar, 4,695 shares. Awards of Performance Units. The Committee granted an aggregate of 76,596 performance units for a total value of $4,531,196 to the participating named executive officers on February 23, 2024. The number of units awarded were calculated based on the closing sales price of our common stock on the grant date of February 23, 2024, which was $57.51. The grants were as follows: Joel Agree, 46,948 units; Peter Coughenour, 9,564 units; Nicole Witteveen, 4,782 units; Craig Erlich, 9,564 units; and Danielle Spehar, 5,738 units. The awards are subject to forfeiture in the event that the performance level is below threshold, as defined in the table below. The actual number of units to eventually be earned by the individuals will be calculated based on a three-year performance period beginning on January 1, 2024 and will be based on the achievement of the following performance goals:
Danielle Spehar — General Counsel
| ● | Position within the Company-defined Peer Group: 50% of the award is based upon TSR percentile rank versus a specified net lease peer group for the three-year performance period. The net lease peer group is defined as: |
Danielle Spehar — General Counsel
The Committee structured this design to reward executives for performance relative to companies facing similar market forces and align the interests of management with stockholders by incentivizing performance that drives returns exceeding our peers. Following the three-year performance period, shares of restricted common stock will be issued correlating to the levels of achievement on the performance units: 50% at Threshold, 100% at Target, 150% at Above Target and 200% at Maximum. Achievement percentages between the threshold and target and between the target and maximum levels will be interpolated based on actual results in each category. The payout will be capped at 100% if the Company’s absolute total shareholder return is negative for the performance period. Following the performance period, all shares earned will vest on the third anniversary of the grant date. Performance levels and corresponding award funding levels for 2024 performance units are summarized in the below table:
Danielle Spehar — General Counsel
| Performance Level | 3-Year Relative TSR Positioning | % of Target Award Funded | | Below Threshold | Below 25th Percentile | 0% | | Threshold | 25th Percentile | 50% | | Target | 50th Percentile | 100% | | Above Target | 75th Percentile | 150% | | Maximum | 90th Percentile | 200% |
PERQUISITES AND OTHER BENEFITS
PERQUISITES AND OTHER BENEFITS We have historically maintained a conservative approach to providing perquisites to executive officers. We provide certain named executive officers with perquisites and other personal benefits that the Committee believes are reasonable and consistent with the overall executive compensation program and will better enable us to attract and retain superior employees for key positions. These perquisites have been carefully selected to ensure that the value provided to employees is not adverse to the interests of stockholders. The Committee periodically reviews the levels of perquisites and other personal benefits provided to the named executive officers. In 2024, certain of our officers were provided with an annual car allowance, associated car maintenance and fuel allowance. The Committee may revise, amend or add to each named executive officer’s perquisites and personal benefits if it deems it advisable. Severance Payments. We currently have employment agreements with Joel Agree, Peter Coughenour and Craig Erlich that provide for severance payments under specified conditions. The Committee believes these agreements help to retain executives who are essential to our long-term success. See “Executive Compensation Tables — Potential Payments Upon Termination or Change-in- Control” for a description of potential payments and benefits received by our named executive officers under our compensation plans and arrangements upon termination of employment or a change in control of our Company.
TIMING AND PRICING OF SHARE-BASED GRANTS
TIMING AND PRICING OF SHARE-BASED GRANTS We do not coordinate the timing of share-based grants with the release of material non-public information. The Committee approves its annual grants of restricted stock to the named executive officers at its regularly scheduled executive compensation meeting which occurs at the beginning of the following fiscal year. The effective date for annual share-based grants is determined at each meeting and is generally the date of such meeting or shortly thereafter. The Committee generally establishes the date for its regularly scheduled meeting at least a year in advance. The Committee has not granted stock options in recent years.
Insider Trading Policy and Equity Grant Timing Practices
Insider Trading Policy and Equity Grant Timing Practices We maintain an Insider Trading Policy governing the purchase, sale, and other disposition of Company securities that is applicable to the Company, all of our directors, officers, and team members. We believe our Insider Trading Policy and procedures are reasonably designed to promote compliance with insider trading laws. A copy of our Insider Trading Policy is filed as an exhibit to our Annual Report on Form 10-K for 2024. Our Compensation Committee approves all equity award grants to our NEOs on or before the grant date. The Compensation Committee’s general practice is to complete its annual executive compensation review and determine performance goals and target compensation for our NEOs, following which they approve equity awards for NEOs. Accordingly, annual equity awards are typically granted to our NEOs in February each year. On occasion, the Compensation Committee may grant equity awards outside of our annual grant cycle for new hires, promotions, recognition, retention, or other purposes. While the Compensation Committee has discretionary authority to approve equity awards to our NEOs outside of the cycle described above, the Compensation Committee does not have a practice or policy of granting equity awards in anticipation of the release of material nonpublic information and, in any event, we do not time the release of material non-public information in coordination with grants of equity awards in a manner that intentionally benefits our NEOs or otherwise for the purpose of affecting the value of executive compensation. We did not grant stock options or SARs in 2024.
Summary Compensation Table
Summary Compensation Table The following table sets forth information concerning the total compensation paid or earned by each of the named executive officers in 2024, 2023 and 2022.
Summary Compensation Table
| | | | | Non-Equity | | | | | | | Stock | Incentive Plan | All Other | | | | | Salary | Awards | Compensation | Compensation | Total | | Name and Principal Position | Year | ($) | ($)(1) | ($)(2) | ($)(3) | ($) | | Joel Agree | 2024 | 900,000 | 4,577,312 | 2,821,794 | 52,590 | 8,351,696 | | President and Chief Executive Officer | 2023 | 895,481 | 4,212,330 | 3,063,015 | 55,277 | 8,226,103 | | | 2022 | 875,000 | 3,666,730 | 3,062,500 | 51,842 | 7,656,072 | | Peter Coughenour | 2024 | 423,446 | 1,015,794 | 577,408 | 29,559 | 2,046,207 | | Chief Financial Officer, Secretary | 2023 | 378,673 | 421,287 | 576,817 | 18,193 | 1,394,970 | | | 2022 | 350,000 | 89,985 | 525,000 | 15,657 | 980,641 | | Nicole Witteveen(4) | 2024 | 432,600 | 507,868 | 541,415 | 32,137 | 1,514,020 | | Chief Operating Officer | 2023 | 290,331 | 263,269 | 195,000 | 33,161 | 781,761 | | | 2022 | 234,054 | 149,975 | 177,000 | 24,694 | 585,722 | | Craig Erlich(5) | 2024 | 432,600 | 1,015,794 | 481,594 | 37,429 | 1,967,417 | | Chief Growth Officer | 2023 | 430,322 | 1,053,061 | 581,258 | 37,623 | 2,102,264 | | | 2022 | 416,462 | 471,429 | 598,500 | 44,868 | 1,531,259 | | Danielle Spehar | 2024 | 395,609 | 609,453 | 355,566 | 35,992 | 1,396,620 | | General Counsel | 2023 | 384,216 | 631,854 | 289,688 | 37,623 | 1,343,381 | | | 2022 | 367,039 | 314,242 | 375,000 | 39,140 | 1,095,421 |
Summary Compensation Table
| (1) The amounts reported represent the grant date fair value of restricted stock and performance-based units granted under the 2020 Plan. Regarding the performance-based units, the amounts reported reflect the grant date fair value determined in accordance with FASB ASC Topic 718. For a discussion of the assumptions used to calculate the value of performance share awards made to named executive officers, refer to Note 11 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2024. The amounts that would be earned at the maximum performance level are set forth below in the Grant of Plan-Based Awards Table. The grant date fair value of the restricted stock is calculated as the closing price of our common stock as quoted on the NYSE on the grant date multiplied by the number of shares subject to the award. |
Summary Compensation Table
| (2) The amounts reported represent annual cash incentive awards under the Executive Incentive Plan or pursuant to separate determination by the Compensation Committee. |
Summary Compensation Table
| (3) For Mr. Agree, the amounts reported in 2024 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $16,000; health insurance premiums, $16,137; and annual car allowance and associated car maintenance and fuel, $20,453. For Mr. Coughenour, the amounts reported in 2024 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $12,703; and health insurance premiums, $16,856. For Ms. Witteveen, the amounts reported in 2024 represent the aggregate incremental cost to the Company of her matching Simple IRA contribution, $16,000; and health insurance premiums, $16,137. For Mr. Erlich, the amounts reported in 2024 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $19,500; and health insurance premiums, $17,929. For Ms. Spehar, the amounts reported in 2024 represent the aggregate incremental cost to the Company of her matching Simple IRA contribution, $19,500; and health insurance premiums, $16,492. |
Summary Compensation Table
| (4) Ms. Witteveen was appointed Chief Operating Officer in September 2023. |
Summary Compensation Table
| (5) Mr. Erlich served as Chief Operating Officer from February 2021 to September 2023 and Chief Growth Officer beginning in September 2023. |
Grants of Plan-Based Awards for 2024
Grants of Plan-Based Awards for 2024 The following table sets forth information concerning equity and non-equity awards granted to the named executive officers in 2024:
Grants of Plan-Based Awards for 2024
| | | | | | | | | All | | | | | | | | | | | Other | | | | | | | | | | | Stock | Grant | | | | Estimated Future Payouts | | | Estimated Future Payouts | | | Awards; | Date Fair | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Number of | Value of | | | Grant | Plan Awards ($) | | | Plan Awards (#) | | | Shares of | Stock and | | Name | Date | Threshold | Target | Maximum | Threshold | Target | Maximum | Units (#)(1) | Awards ($)(2) | | Joel Agree(3) | 2/15/2024 | $675,000 | $1,575,000 | $3,150,000 | — | — | — | — | — | | Joel Agree | 2/23/2024 | $— | $— | $— | — | — | — | 31,299 | 1,800,005 | | Joel Agree | 2/23/2024 | $— | $— | $— | 23,474 | 46,948 | 93,896 | — | 2,777,307 | | Peter Coughenour(3) | 2/15/2024 | $216,300 | $432,600 | $648,900 | — | — | — | — | — | | Peter Coughenour | 2/23/2024 | $— | $— | $— | — | — | — | 7,825 | 450,016 | | Peter Coughenour | 2/23/2024 | $— | $— | $— | 4,782 | 9,564 | 19,128 | — | 565,778 | | Nicole Witteveen(3) | 2/15/2024 | $216,300 | $324,450 | $648,900 | — | — | — | — | — | | Nicole Witteveen | 2/23/2024 | $— | $— | $— | — | — | — | 3,912 | 224,979 | | Nicole Witteveen | 2/23/2024 | $— | $— | $— | 2,391 | 4,782 | 9,564 | — | 282,889 | | Craig Erlich(3) | 2/15/2024 | $216,300 | $324,450 | $648,900 | — | — | — | — | — | | Craig Erlich | 2/23/2024 | $— | $— | $— | — | — | — | 7,825 | 450,016 | | Craig Erlich | 2/23/2024 | $— | $— | $— | 4,782 | 9,564 | 19,128 | — | 565,778 | | Danielle Spehar(3) | 2/15/2024 | $99,459 | $198,919 | $397,838 | — | — | — | — | — | | Danielle Spehar | 2/23/2024 | $— | $— | $— | — | — | — | 4,695 | 270,010 | | Danielle Spehar | 2/23/2024 | $— | $— | $— | 2,869 | 5,738 | 11,476 | — | 339,443 |
Grants of Plan-Based Awards for 2024
| (1) The equity awards set forth in this column reflect restricted stock granted in 2024. Awards vest in equal annual installments over a three-year period from February 23, 2024, the date of the grant. Awards set forth in this column were granted under the 2020 Plan. Cash dividends are paid on the restricted stock during the vesting period. |
Grants of Plan-Based Awards for 2024
| (2) The amounts reported in this column represent the full value of the stock awards granted in 2024 and have been granted in accordance with the 2020 Plan. Mr. Agree’s award consists of 40% restricted common stock and 60% performance-based units. The awards for Mr. Coughenour, Ms. Witteveen, Mr. Erlich and Ms. Spehar consist of 45% restricted common stock and 55% performance-based units. The restricted common stock awards are subject to time-based vesting provisions over a three-year period. The performance-based units are subject to a performance-based measurement period of three years and all shares earned vest three years after the date of the grant. The amounts reported for the performance-based units assume the achievement of target performance levels. |
Grants of Plan-Based Awards for 2024
| (3) Represents possible payouts under the Company’s Executive Incentive Plan. Actual bonuses earned for 2024 are disclosed in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2024. |
Grants of Plan-Based Awards for 2024
Narrative Disclosure of Summary Compensation Table and Grants of Plan-Based Awards Table Ms. Spehar has served as General Counsel since February 2019. The compensation reflected in the Summary Compensation Table above is based on the Committee’s review of peer group benchmarking for similar positions on an annual basis. Ms. Witteveen was promoted to Chief Operating Officer in September 2023. Ms. Witteveen’s base salary was increased based on a review of executive officers of peer group companies in similar positions. The compensation reflected in the Summary Compensation Table above is based on the Committee’s review of peer group benchmarking on an annual basis. For a discussion of the material terms of the employment agreements of Joel Agree, Peter Coughenour, and Craig Erlich, see “Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control — Employment Agreements” discussion below.
Outstanding Equity Awards at December 31, 2024
Outstanding Equity Awards at December 31, 2024 The following table sets forth information on the holdings of unvested stock awards by the named executive officers as of December 31, 2024. No stock options are outstanding.
Outstanding Equity Awards at December 31, 2024
| | | Stock Awards | | | | | | | | | Equity Incentive | Equity Incentive Plan | | | | | | Plan Awards: | Awards: Market or | | | | | Market Value of | Number of | Payout Value of | | | | | Shares or | Unearned Shares, | Unearned Shares, | | | | Number of Shares or | Units of Stock | Units or Other Rights | Units or Other Rights | | | | Units of Stock That | That Have Not | That Have Not | That Have Not | | | | Have Not Vested | Vested | Vested | Vested | | Name | Grant Date | (#)(1) | ($)(2) | (#)(1) | ($)(2) | | Joel Agree | 2/23/2024 | 45,022 | 3,171,800 | 46,948 | 3,307,487 | | | 2/23/2023 | 27,368 | 1,928,076 | 30,026 | 2,115,332 | | | 2/23/2022 | 16,767 | 1,181,235 | 27,946 | 1,968,796 | | | 2/23/2021 | 10,844 | 763,960 | — | — | | | 2/23/2020 | 4,395 | 309,628 | — | — | | Peter Coughenour | 2/23/2024 | 7,825 | 551,271 | 9,564 | 673,784 | | | 2/23/2023 | 1,638 | 115,397 | 3,003 | 211,561 | | | 2/23/2022 | 863 | 60,798 | — | — | | | 2/23/2021 | 280 | 19,726 | — | — | | | 2/23/2020 | 95 | 6,693 | — | — | | Nicole Witteveen | 2/23/2024 | 3,912 | 275,600 | 4,782 | 336,892 | | | 2/23/2023 | 1,023 | 72,070 | 1,877 | 132,235 | | | 2/23/2022 | 2,784 | 196,133 | — | — | | | 2/23/2021 | 371 | 26,137 | — | — | | | 2/23/2020 | 76 | 5,354 | — | — | | Craig Erlich | 2/23/2024 | 8,266 | 582,340 | 9,564 | 673,784 | | | 2/23/2023 | 4,094 | 288,422 | 7,506 | 528,798 | | | 2/23/2022 | 2,155 | 151,820 | 3,593 | 253,127 | | | 2/23/2021 | 348 | 24,517 | — | — | | | 2/23/2020 | 908 | 63,969 | — | — | | Danielle Spehar | 2/23/2024 | 6,012 | 423,545 | 5,738 | 404,242 | | | 2/23/2023 | 2,456 | 173,025 | 4,504 | 317,307 | | | 2/23/2022 | 1,437 | 101,237 | 2,395 | 168,728 | | | 2/23/2021 | 928 | 65,378 | — | — | | | 2/23/2020 | 503 | 35,436 | — | — |
Outstanding Equity Awards at December 31, 2024
| (1) Shares of restricted stock and performance units vest in the following years. Performance units are subject to a performance-based measurement period of three years. For performance units granted in 2024 and 2023, following the performance period, all shares earned will vest three years after the grant date. For performance units granted prior to 2023, following the performance period, one third of the shares earned will vest each year for three years. Regarding the performance-based units, the amounts reported assume the achievement of target performance levels. In February 2025, the Compensation Committee certified that the 2022 performance unit awards were earned at 150% of target given the Company’s three-year total shareholder return performance was in the 76th percentile of the MSCI US REIT Index and in the 86th percentile of the Company-defined Peer Group. Shares of restricted stock granted in 2023 and 2024 vest in equal installments over a three-year period from the date of grant. Shares of restricted stock granted prior to 2023 vest in equal installments over a five-year period from the date of grant. |
Outstanding Equity Awards at December 31, 2024
| | 2025 | 2026 | 2027 | | Joel Agree | 61,195 | 75,836 | 72,285 | | Peter Coughenour | 3,950 | 6,858 | 12,460 | | Nicole Witteveen | 3,231 | 5,029 | 6,565 | | Craig Erlich | 7,875 | 14,472 | 14,087 | | Danielle Spehar | 5,767 | 9,626 | 8,580 |
Outstanding Equity Awards at December 31, 2024
| (2) Based upon the closing price of our common stock on the NYSE on December 31, 2024 of $70.45. |
OPTION EXERCISES AND STOCK VESTED IN 2024
OPTION EXERCISES AND STOCK VESTED IN 2024 The following table sets forth information on the shares of restricted stock and performance units or shares held by the named executive officers that vested during 2024. No stock options are outstanding.
OPTION EXERCISES AND STOCK VESTED IN 2024
| | Stock Awards | | | | Number of | | | | Shares Acquired | | | | on Vesting | Value Realized on | | Name | (#) | Vesting ($)(1) | | Joel Agree | 55,616 | 3,198,476 | | Peter Coughenour | 1,430 | 82,239 | | Nicole Witteveen | 2,068 | 130,920 | | Craig Erlich | 4,070 | 247,495 | | Danielle Spehar | 3,305 | 190,071 |
OPTION EXERCISES AND STOCK VESTED IN 2024
| (1) The value realized is based on the number of shares of stock that vested on the vesting date multiplied by the closing price of our common stock on the NYSE on the vesting date. |
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL The following section describes and quantifies potential payments and benefits to the named executive officers as of December 31, 2024, under our compensation and benefit plans and arrangements upon termination of employment or a change in control of our Company. Joel Agree, Peter Coughenour and Craig Erlich are subject to employment agreements with us that provide certain benefits in the event of the termination of their employment or a change in control. In addition, certain of our compensatory plans contain provisions applicable to all of our named executive officers, regarding the acceleration of vesting and payment upon specified termination events, including in connection with a change in control.
CHANGE IN CONTROL/SEVERANCE PAYMENT TABLES
| | | | Early Vesting of | | | | Named Executive Officer | Base Salary | Bonus | Stock Awards | Other(3) | Total | | Joel Agree | | | | | | | Death or Disability | $150,000 | $1,575,000 | $7,354,698 | $16,137 | $9,095,835 | | Change in Control | 2,700,000 | 10,647,880 | 14,746,312(2) | 16,137 | 28,110,329 | | Other (except for cause) | 1,800,000 | 6,048,587 | 14,746,312 | 16,137 | 22,611,036 | | Peter Coughenour | | | | | | | Change in Control(1) | 432,600 | 1,576,817 | 1,639,231(2) | — | 3,648,648 | | Other (except for cause) | 432,600 | — | 40,509 | — | 473,109 | | Nicole Witteveen | | | | | | | Change in Control | — | — | 1,044,421(2) | — | 1,044,421 | | Craig Erlich | | | | | | | Change in Control(1) | 432,600 | 1,581,258 | 2,566,775(2) | — | 4,580,633 | | Danielle Spehar | | | | | | | Change in Control | — | — | 1,688,898(2) | — | 1,688,898 |
PAY RATIO
PAY RATIO As required by Section 953(b) of the Dodd-Frank Wall Street Reform Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Joel Agree, our President and Chief Executive Officer. The Company’s Chief Executive Officer to median employee pay ratio was calculated in accordance with SEC requirements. However, due to the flexibility afforded in calculating the pay ratio, the ratio presented herein is a reasonable estimate and may not be comparable to the pay ratio presented by other companies. The Company identified the median employee by examining 2024 compensation for all employees of the Company excluding the President and Chief Executive Officer. We determined our median employee compensation, based on total compensation including base salary, bonuses earned, incentive stock granted and health care premiums for each of our 74 employees, excluding Mr. Joel Agree, as of December 31, 2024, to be $135,756. As disclosed in the Summary Compensation Table, our current Chief Executive Officer’s annual total compensation for 2024 was $8,351,696. Based on the foregoing, our estimate of the ratio of the annual total compensation of our Chief Executive Officer and President to the median of the annual total compensation of all other employees was 62 to 1. The compensation measure described above was consistently applied to this entire employee population. The Company did not make any assumptions, adjustments or estimates with respect to the employee population or the compensation measure and did not annualize the compensation for any employees that were not employed by the Company for all of 2024.
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE The following table provides information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis.”
PAY VERSUS PERFORMANCE
| | | | Average | | Value of Initial Fixed $100 | | | AFFO | | | | | Summary | Average | Investment Based On: | | | (per diluted | | | Summary | | Compensation | Compensation | | Peer Group | | common | | | Compensation | Compensation | Table Total | Actually Paid | Total | Total | | share and | | | Table Total | Actually Paid | for Non-PEO | to Non-PEO | Shareholder | Shareholder | Net Income | partnership | | Year | for PEO(1) | to PEO(2) | NEOs(3) | NEOs(4) | Return(5) | Return(6) | (thousands)(7) | unit)(8) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | $8,351,696 | $13,525,810 | $1,731,066 | $2,358,517 | $123.48 | $123.47 | $189,832 | $4.14 | | 2023 | $8,226,103 | $5,888,290 | $1,405,594 | $1,234,150 | $105.37 | $113.54 | $170,547 | $3.95 | | 2022 | $7,656,072 | $9,778,145 | $1,048,261 | $1,110,318 | $113.42 | $99.82 | $153,035 | $3.83 | | 2021 | $7,341,625 | $8,465,147 | $825,199 | $508,644 | $109.60 | $132.23 | $122,876 | $3.51 | | 2020 | $7,517,366 | $7,975,373 | $761,782 | $764,191 | $98.51 | $92.43 | $91,972 | $3.20 |
PAY VERSUS PERFORMANCE
| (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Agree (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation Tables — Summary Compensation Table.” |
PAY VERSUS PERFORMANCE
| (2) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Agree, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Agree during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Agree’s total compensation for each year to determine the compensation actually paid: |
PAY VERSUS PERFORMANCE
| | Reported | | | | | | Summary | Reported | | | | | Compensation | Value of | | Compensation | | | Table Total | Equity | Equity Award | Actually Paid | | Year | for PEO | Awards(a) | Adjustments(b) | to PEO | | 2024 | $8,351,696 | $(4,577,312) | $9,751,426 | $13,525,810 | | 2023 | $8,226,103 | $(4,212,330) | $1,874,517 | $5,888,290 | | 2022 | $7,656,072 | $(3,666,730) | $5,788,803 | $9,778,145 | | 2021 | $7,341,625 | $(3,469,080) | $4,592,602 | $8,465,147 | | 2020 | $7,517,366 | $(3,731,809) | $4,189,816 | $7,975,373 |
PAY VERSUS PERFORMANCE
| (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year. |
PAY VERSUS PERFORMANCE
| (b) The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| | Year End Fair | | | Value of | | | | Value of | | | Dividends or | | | | Equity | | Year over | other Earnings | | | | Awards | | Year Change | Paid on Stock | | | | Granted | Year over | in Fair Value | or Option | | | | During the | Year Change | of Equity | Awards not | | | | Year That are | in Fair Value | Awards | Otherwise | | | | Outstanding | of Outstanding | Granted in | Reflected in | Total | | | and Unvested | and Unvested | Prior Years | Fair Value or | Equity | | | as of the End | Equity | that Vested in | Total | Award | | Year | of the Year | Awards | the Year | Compensation | Adjustments | | 2024 | $6,944,885 | $2,630,519 | $(302,551) | $478,573 | $9,751,426 | | 2023 | $3,152,283 | $(1,999,494) | $140,175 | $581,553 | $1,874,517 | | 2022 | $4,562,604 | $1,182,878 | $(468,543) | $511,864 | $5,788,803 | | 2021 | $3,963,450 | $124,045 | $(96,376) | $601,483 | $4,592,602 | | 2020 | $3,257,260 | $375,176 | $360,480 | $196,900 | $4,189,816 |
PAY VERSUS PERFORMANCE
| (3) The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Agree) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Agree) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2024, 2023, and 2022 Peter Coughenour, Craig Erlich, Danielle Spehar, and Nicole Witteveen; (ii) for 2021, Peter Coughenour, Craig Erlich, Simon Leopold, Danielle Spehar, Clayton Thelen and Nicole Witteveen; and (iii) for 2020, Clayton Thelen, Laith Hermiz, Craig Erlich and Danielle Spehar. |
PAY VERSUS PERFORMANCE
| (4) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Agree), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Agree) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Agree) for each year to determine the compensation actually paid, using the same methodology described above in Note 2: |
PAY VERSUS PERFORMANCE
| | Average | | | | | | Reported | | | | | | Summary | Average | | Average | | | Compensation | Reported | | Compensation | | | Table Total | Value of | Average | Actually Paid | | | for Non-PEO | Equity | Equity Award | to Non-PEO | | Year | NEOs | Awards | Adjustments(a) | NEOs | | 2024 | $1,731,066 | $(787,227) | $1,414,678 | $2,358,517 | | 2023 | $1,405,594 | $(592,368) | $420,924 | $1,234,150 | | 2022 | $1,048,261 | $(256,408) | $318,465 | $1,110,318 | | 2021 | $825,199 | $(343,954) | $27,399 | $508,644 | | 2020 | $761,782 | $(278,270) | $280,679 | $764,191 |
PAY VERSUS PERFORMANCE
| (a) The amounts deducted or added in calculating the total average equity award adjustments are as follows: |
PAY VERSUS PERFORMANCE
| | Average | | | | Average | | | | Year End | | Average | Average | Value of | | | | Fair Value | Average | Year over | Fair Value | Dividends or | | | | of Equity | Year over | Year | at the End | other | | | | Awards | Year | Change in | of the Prior | Earnings Paid | | | | Granted | Change in | Fair Value | Year of | on Stock or | | | | During the | Fair Value | of Equity | Equity | Option | | | | Year That | of | Awards | Awards | Awards not | | | | are | Outstanding | Granted in | that Failed | Otherwise | | | | Outstanding | and | Prior | to Meet | Reflected in | Average | | | and Unvested as | Unvested | Years that | Vesting | Fair Value or | Total Equity | | | of the End | Equity | Vested in | Conditions | Total | Award | | Year | of the Year | Awards | the Year | in the Year | Compensation | Adjustments | | 2024 | $1,175,542 | $209,822 | $(8,778) | $— | $38,092 | $1,414,678 | | 2023 | $487,138 | $(86,237) | $(1,612) | $— | $21,635 | $420,924 | | 2022 | $312,359 | $(589) | $(8,771) | $— | $15,466 | $318,465 | | 2021 | $108,261 | $6,572 | $(1,852) | $(95,249) | $9,667 | $27,399 | | 2020 | $250,810 | $11,216 | $7,286 | $— | $11,367 | $280,679 |
PAY VERSUS PERFORMANCE
| (5) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period. |
PAY VERSUS PERFORMANCE
| (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: MSCI US REIT (RMZ) Index. |
PAY VERSUS PERFORMANCE
| (7) The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year. |
PAY VERSUS PERFORMANCE
| (8) The Company defines Adjusted Funds From Operations (“AFFO”) as net income computed in accordance with GAAP, excluding certain non-cash and infrequently occurring items, specifically, (i) depreciation of real-estate and non-real estate assets; (ii) amortization of acquisition related lease intangibles and leasing costs; (iii) provision for impairment; (iv) gains (or losses) from sales of real estate assets and/or changes in control; (v) loss on extinguishment of debt and settlement of related hedges; (vi) straight-line accrued rent; (vii) stock-based compensation expense; (viii) amortization of financing fees and original issue discounts; and (ix) certain other items that reduce or increase net income in accordance with GAAP. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined AFFO (per diluted common share and partnership unit) is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to Company performance. |
PAY VERSUS PERFORMANCE
Financial Performance Measures As described in greater detail in “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on the objective of incentivizing our NEOs to increase the value of our enterprise for our stockholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
PAY VERSUS PERFORMANCE
| ● | AFFO per share |
PAY VERSUS PERFORMANCE
| ● | Relative Total Shareholder Return |
PAY VERSUS PERFORMANCE
| ● | Net Debt to Annualized Recurring EBITDA |
PAY VERSUS PERFORMANCE
Analysis of the Information Presented in the Pay Versus Performance Table The Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table, including “compensation actually paid”, as required by Item 402(v) of Regulation S-K. The Compensation Committee has not previously used or considered “compensation actually paid” as computed in accordance with Item 402(v) of Regulation S-K to set NEO target pay or align our NEO compensation to Company performance. See “Compensation Discussion and Analysis” for a discussion of how the Compensation Committee designs our executive compensation program and sets NEO target pay. The charts below compare (i) the compensation actually paid to our PEO and the average of the compensation actually paid to our non-PEO NEOs, with (ii) our cumulative TSR, (iii) the MSCI US REIT Index TSR, and (iv) our AFFO Per Share in each case, for the fiscal years ended December 31, 2020, 2021, 2022, 2023 and 2024.
PROPOSAL 1 — ELECTION OF DIRECTORS
PROPOSAL 1 — ELECTION OF DIRECTORS Pursuant to the Bylaws, the directors are required to be divided into three classes serving three-year staggered terms. At the 2025 Annual Meeting, three directors will be elected to serve until the annual meeting of stockholders in 2028, or until such director’s earlier resignation, retirement or other termination of service, and, in the case of a holdover director, until his or her successor is duly elected and qualified. The Board has nominated Joel Agree, Michael Judlowe and Gregory Lehmkuhl whose terms expire at the 2025 Annual Meeting, to serve until the annual meeting of stockholders in 2028. The Board has affirmatively concluded that Michael Judlowe and Gregory Lehmkuhl are independent under the applicable rules of the NYSE. Each nominee has consented to serve his or her term until his or her successor has been duly elected and qualified, if elected by the stockholders. If any nominee becomes unable or unwilling to serve between the date of this proxy statement and the 2025 Annual Meeting, the Board may designate a new nominee and the persons named as proxies by the Board will vote for that substitute nominee. Alternatively, the Board may reduce the size of the Board. The Board recommends that you vote “FOR” the election of its director nominees. The following table sets forth the director nominees and continuing directors of the Board:
PROPOSAL 1 — ELECTION OF DIRECTORS
| Name | Age | Title | Term Ending | | Joel Agree(1) | 46 | Chief Executive Officer and Director | 2025 | | Michael Judlowe(1) | 59 | Independent Director | 2025 | | Gregory Lehmkuhl(1) | 52 | Independent Director | 2025 | | Jerome Rossi | 81 | Independent Director | 2026 | | Merrie Frankel | 70 | Independent Director | 2026 | | John Rakolta, Jr. | 77 | Independent Director | 2026 | | Richard Agree | 81 | Executive Chairman of the Board and Director | 2027 | | Karen Dearing | 60 | Independent Director | 2027 | | Michael Hollman | 44 | Independent Director | 2027 | | Linglong He | 60 | Independent Director | 2027 |
PROPOSAL 1 — ELECTION OF DIRECTORS
| (1) Standing for re-election to a three-year term. |
PROPOSAL 1 — ELECTION OF DIRECTORS
The biographical descriptions below set forth certain information with respect to the director nominees and continuing directors of the Board. The Board has identified specific attributes of each director that the Board has determined qualify that person for service on the Board. Joel Agree has been our President and a Director since June 2009. He was appointed as Chief Executive Officer in January 2013, and from June 2009 to that date he served as Chief Operating Officer. Prior to being promoted to President and Chief Operating Officer, from January 2006 to June 2009, Mr. Joel Agree served as our Executive Vice President. He is a member of the State Bar of Michigan and the International Council of Shopping Centers. He holds a Juris Doctor degree from Wayne State University Law School and a Bachelor of Arts degree in Political Science from the University of Michigan. Joel Agree is the son of Richard Agree, our Executive Chairman. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Joel Agree, in light of his day-to-day company-specific operational, management and market experience through his position as President and Chief Executive Officer of our Company, to continue to serve as a director of the Board. Michael Judlowe has been a Director of our Company since September 2021. Mr. Judlowe most recently served as Chairman of Jefferies’ US Real Estate, Gaming and Lodging investment banking practice from June 2019 to March 2021. Mr. Judlowe previously served as Co-Head of Equity Capital Markets Americas from 2013 to 2019. He joined Jefferies as a Managing Director in 2010 to establish the Real Estate Equity Capital Markets practice. Prior to his time at Jefferies, Mr. Judlowe spent 10 years in Equity Capital Markets at Citigroup. Over his career in banking, Mr. Judlowe has led a significant number of equity transactions and successful initial public offerings, including National Storage Affiliates Trust (NYSE: NSA), QTS Realty Trust, Inc. (NYSE: QTS), AmREIT, Inc. (formerly NYSE: AMRE) and ClubCorp Holdings, Inc. (formerly NYSE: MYCC). Mr. Judlowe earned his B.A. in Political Science from Tufts University and an M.B.A. in Marketing from NYU’s Stern School of Business. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Judlowe, in light of his significant experience in equity capital markets, investment banking and REITs, to continue to serve as a director of the Board. Gregory Lehmkuhl has been a Director of our Company since July 2018 and has served as our Lead Independent Director since December 2020. Mr. Lehmkuhl is the President and Chief Executive Officer of Lineage Logistics (“Lineage”) and oversees all facets of the company’s operations globally. Prior to joining Lineage, Mr. Lehmkuhl served as Corporate Executive Vice President for Con-Way and President of Con- Way Freight, where he was responsible for overall company operating and financial performance, strategic planning and business plan development, as well as direction of the company’s continuous improvement processes. Prior to Con-Way, he held senior management positions at Menlo Worldwide Logistics, Delphi Automotive Systems and Penske Logistics. Mr. Lehmkuhl holds a Bachelor’s Degree in Business from Michigan State University, as well as a Master of Business Administration from Oakland University. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Lehmkuhl, in light of his extensive operational and executive experience, to continue to serve as a director of the Board. Jerome Rossi has been a Director of our Company since January 2015. Mr. Rossi currently serves as the Chief Executive Officer of R&R Consulting and previously served as the Chairman of Gabe’s Stores, a private fashion discount retailer. Mr. Rossi was formerly Senior Executive Vice President and Group President of The TJX Companies from 2005 until January 2015. He served as Chief Operating Officer of HomeGoods from 2000 to 2005, Executive Vice President and Chief Operating Officer of The Marmaxx Group from 1995 to 2000 and President and Chief Executive Officer of Marshalls from 1990 to 1995. Mr. Rossi began his career in 1967 as a Certified Public Accountant with Arthur Young & Co. Mr. Rossi currently serves on the Board of Directors of Home Base, the Board of Advisors at Bentley College, the Board of Directors at Bethany Hill School, the Board of Overseers at Newton Wellesley Hospital, the Board of Overseers at Beth Israel Hospital and the Board of Directors of The National Domestic Violence Hotline. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Rossi, in light of his extensive career as a senior executive, deep knowledge of retail real estate and retail operations, strong leadership capabilities and public company experience, to continue to serve as a director of the Board. Merrie Frankel has been a Director of our Company since October 2016. Ms. Frankel is currently President of Minerva Realty Consultants, LLC (“Minerva”), an independent real estate and ratings advisory firm that also provides litigation support for REITs, public and private companies and funds. Prior to joining Minerva, Ms. Frankel spent 18 years at Moody’s Investors Service in the Commercial Real Estate Finance Group as Vice President and Senior Credit Officer, where she was responsible for rating REITs and real estate operating companies in the United States and Canada. Prior to her time at Moody’s, she was Senior Vice President and Director of Portfolio Management for the Argo Funds and also held numerous positions within the real estate industry at notable companies including Ernst & Young, Cushman & Wakefield, J.P. Morgan Securities and Salomon Brothers Inc. Ms. Frankel is currently an adjunct professor at Columbia University’s Graduate School of Architecture, Planning and Preservation and New York University’s Schack Institute of Real Estate where she teaches real estate capital markets. She holds J.D. and M.B.A. degrees from Hofstra University Law and Graduate Business School and graduated with a B.A. in English from the University of Pennsylvania with various honors and is admitted to the New York Bar. Among her industry affiliations, she is a Trustee and previously chaired the New York District Council for the Urban Land Institute. She recently served as a Treasurer of the New York Women Executives in Real Estate Charitable Fund; a board member of the Financial Women’s Association of New York overseeing its investment portfolio; a board member and chair of the Audit/Finance committee for the Martha Graham Dance Company; was a member of the Advisory Committee for Women in PropTech; and on the Nareit Editorial Advisory Board. She was cited as one of the “2020 Directors to Watch” by Board and Directors and one of 50 “Women of Influence” for “Real Estate New York” in 2008. The Board has determined that it is in the best interests of our Company and our stockholders for Ms. Frankel, in light of her experience as a senior executive in the real estate and financial services industries, as well as her significant expertise in capital markets, accounting and REITs, to continue to serve as a director of the Board.
PROPOSAL 1 — ELECTION OF DIRECTORS
Ambassador John Rakolta, Jr. (Ret.) was reappointed to the Board in February 2021. Mr. Rakolta currently serves as the chairman of Walbridge, on the Board of Directors of Business Leaders for Michigan, and he recently served as the United States Commissioner General of Expo Dubai 2020. He previously served on the Board from August 2011 until his confirmation as United States Ambassador to the United Arab Emirates in September 2019. Prior to such confirmation, Mr. Rakolta served as the long-time chairman and chief executive officer of Walbridge, a privately held construction/engineering company. Mr. Rakolta currently serves on the Board of Directors of the Richard Nixon Foundation and is a Trustee of the Washington Institute for Near East Policy. Mr. Rakolta was appointed chair of the Growing Michigan Together Council by Governor Gretchen Whitmer in June 2023. Mr. Rakolta was appointed Romania’s Honorary Consul General to the United States in 1998, a position that he resigned from upon his confirmation as United States Ambassador to the United Arab Emirates in September 2019. He received a Bachelor of Science degree in Civil Engineering from Marquette University in 1970. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Rakolta, in light of his strong executive background in business and construction and his leadership skills to continue to serve as a director of the Board. Richard Agree has been the Executive Chairman of the Board since January 2013. From December 1993 until January 2013, he was our Chief Executive Officer and Chairman of the Board. Prior thereto, he worked as managing partner of the general partnerships which held our properties prior to the formation of our Company and the initial public offering and was President of the predecessor company since 1971. Mr. Richard Agree has managed and overseen the development of over eight million square feet of retail real estate during the past 50 years. He is a graduate of the Detroit College of Law, a member of the State Bar of Michigan and the International Council of Shopping Centers. Mr. Richard Agree is the father of Mr. Joel Agree, our Chief Executive Officer and one of our Directors. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Richard Agree, in light of his extensive company-specific, operational, market and finance experience as the founder and former Chief Executive Officer of our Company, his leadership abilities and his expertise in the ownership, development, acquisition and management of retail real estate net leased to national tenants, to continue to serve as a director of the Board. Karen Dearing was appointed to the Board in December 2020. She served as Senior Advisor of Sun Communities Inc.’s (“Sun Communities”) investments in the United Kingdom, as well as advised on other strategic initiatives until her retirement in January 2025. Ms. Dearing served as Sun Communities’ Chief Financial Officer, Treasurer, and Secretary from 2008 — April 2022. In this role, she was responsible for the overall management of the information technology, accounting, tax and finance departments, and all internal and external financial reporting. Prior to becoming Chief Financial Officer and Executive Vice President, Ms. Dearing served as Senior Vice President of Sun Communities from 2006 to 2008, Corporate Controller from 2002 to 2006 and Director of Finance from 1998 to 2002. Ms. Dearing has worked extensively on Sun Communities’ accounting and finance matters related to its ground-up developments and expansions. Before joining Sun Communities, Inc., Ms. Dearing had over seven years of experience as the Financial Controller of a privately-owned automotive supplier and over four years of experience as a certified public accountant with Deloitte. Ms. Dearing holds a B.S. in accounting from Michigan State University. She is a Certified Public Accountant and a member of AICPA and MICPA. The Board has determined that it is in the best interests of our Company and our stockholders for Ms. Dearing, in light of her corporate accounting expertise and finance and real estate experience, to continue to serve as a director of the Board. Linglong He was appointed to the Board effective January 1, 2024. Ms. He has over 25 years of experience in technology and leadership. Ms. He currently serves as the Chief Leadership Advisor and the Interim Chief Data Officer of Rocket Companies, Inc. (NYSE: RKT), a financial technology and consulting company. Prior to serving as Chief Leadership Advisor, Ms. He served as Rocket Central’s President and Chief Operating Officer from March 2020 until February 2022. From June 2010 to March 2020, Ms. He served as the Chief Information Officer of Rocket Mortgage, one of the nation’s largest mortgage lenders. Ms. He earned her Master’s degree in Software Engineering from the University of St. Thomas and a Master’s degree in Civil Engineering from Wuhan University. She obtained an undergraduate degree from Hohai University. The Board has determined that it is in the best interests of our Company and our stockholders for Ms. He, in light of her technology and leadership expertise, to continue to serve as a director of the Board. Michael Hollman was appointed to the Board in August 2020. He currently serves as SVP, Treasurer and Head of Strategic Finance at Hilton, a position he has held since 2020. In this role, he oversees the Corporate Finance, Corporate Strategy and Global Treasury teams, and is responsible for a wide variety of activities and initiatives, including public market offerings, capital allocation, cash management, business development and Mergers & Acquisitions. Prior to becoming Treasurer, Mr. Hollman served as Vice President of Mergers & Acquisitions and Capital Markets from 2017 to 2020. Before joining Hilton, Mr. Hollman worked in investment banking, specializing in the real estate and lodging sectors. He most recently served as a Director of the Real Estate and Lodging Investment Banking Group at Citigroup from 2013 to 2017, and previously held similar roles at UBS Investment Bank from 2004 to 2013. Prior to banking, Mr. Hollman was a management consultant at Kurt Salmon Associates, now a part of Accenture Strategy, from 2004 to 2007, where he was responsible for the development and execution of strategic initiatives and supply chain-related projects for consumer product and retail companies. He currently serves on the Board of Directors and as the Treasurer on the executive committee of DC Central Kitchen. He received a B.S. in Industrial Engineering from the Georgia Institute of Technology with honors and an M.B.A. from Columbia Business School. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Hollman, in light of his corporate finance and investment banking experience, to continue to serve as a director of the Board.