DEF 14A of Extra Space Storage Inc.
Filed Apr 3, 2024 · FY20230001628280-24-014598
Nominees for Directors
Nominees for Directors
Nominees for Directors
| | KENNETH M. WOOLLEY AGE: 77 NON-EXECUTIVE CHAIRMAN OF THE BOARD | | JOSEPH D. MARGOLIS AGE: 63 CEO AND DIRECTOR | | Experience: Kenneth M. Woolley is the founder of our Company, served as our Executive Chairman and CEO from our formation through March 2009, and Chief Investment Officer from July 2012 to July 2013. Since July 2012, Mr. Woolley has served as Executive Chairman (July 2012 - May 2018) and Chairman (May 2018 - present) of the board of directors. Mr. Woolley resigned from his position as Chairman and CEO of the Company effective April 1, 2009, to serve a voluntary three-year mission for his church, during which time he remained a director. Mr. Woolley has been involved in the self-storage industry since 1977. He has been directly responsible for developing over 185 properties and acquiring over 800 self-storage properties throughout the United States. Early in his career he was a management consultant with the Boston Consulting Group. From 1979 to 1998, he was an Associate Professor, and later an Adjunct Associate Professor of Business Administration at Brigham Young University, where he taught undergraduate and M.B.A. classes in Corporate Strategy and Real Estate. Mr. Woolley has also developed more than 17,000 apartment units through his Las Vegas entity, Nevada West Partners. He is also a partner in New York based Gaia Real Estate, which owns 3,000 apartment units. He has also founded several companies in the retail, electronics, food manufacturing and natural resources industries. Mr. Woolley holds a B.A. in physics from Brigham Young University and an M.B.A. and Ph.D. in business administration from the Stanford Graduate School of Business. Mr. Woolley has been a member of our board of directors since August 2004. Qualifications: Mr. Woolley was selected to serve as Chairman based on his experience and knowledge of our Company and his extensive experience in the real estate and self-storage industry. | | Experience: Joseph D. Margolis has served as our Chief Executive Officer since January 1, 2017. Previously, he served as our Executive Vice President and Chief Investment Officer from July 2015 until December 31, 2016. From 2011 until July 2015, he also was Senior Managing Director and Partner at Penzance Properties, a vertically integrated owner, operator and developer of office and other properties in the Washington, D.C. metro area. Previously, Mr. Margolis was a co-founding partner of Arsenal Real Estate Funds, a private real estate investment management firm, from 2004 through 2011. Before forming Arsenal in 2004, Mr. Margolis held senior positions from 1992 to 2004 at Prudential Real Estate Investors in portfolio management, capital markets and as General Counsel. Before that, Mr. Margolis worked for The Prudential Insurance Company of America as in-house real estate counsel from 1988 through 1992, and as a real estate associate at the law firm of Nutter, McClennen & Fish from 1986 through 1988. Mr. Margolis currently serves as a director for Invitation Homes, a publicly traded REIT. Mr. Margolis is a graduate of Harvard College and Columbia University School of Law. Mr. Margolis served as a member of our board of directors from February 2005 until July 2015 and rejoined our board on May 18, 2017 after his appointment as Chief Executive Officer. Qualifications: Mr. Margolis was selected to serve as a member on our board based on his knowledge of our Company and his extensive finance and real estate experience. | |
Nominees for Directors
| 2024 Proxy Statement | 7 |
Nominees for Directors
| | MARK G. BARBERIO AGE: 61 DIRECTOR | | JOSEPH J. BONNER AGE: 68 DIRECTOR COMMITTEES: Compensation, Nominating, Governance & Corporate Responsibility | | Experience: Mark G. Barberio has served as a Principal at Markapital, LLC, a business and M&A consulting firm, since 2013. From 2009-2013, Mr. Barberio served as the Co-Chief Executive Officer of Mark IV, LLC (now Dayco, LLC), a global diversified manufacturing company. Mr. Barberio also served as the Chief Financial Officer of Mark IV, LLC from 2004-2013. Mr. Barberio served as the Non-executive Chair of Life Storage, Inc. from 2015 until its acquisition by the Company in 2023. He currently serves as a director of Gibraltar Industries, Inc. and as the Non-executive Chair of Endo International plc. He is a trustee serving on the board of Rochester Institute of Technology. Mr. Barberio is a member of National Association of Corporate Directors ("NACD"). Mr. Barberio previously served as a director of Exide Technologies and Paragon Offshore Limited. Mr. Barberio holds a B.S. in Business-accounting from Rochester Institute of Technology, and an M.B.A. from the State University of New York at Buffalo. Mr. Barberio has been a member of our board of directors since July 2023. Qualifications: Mr. Barberio was selected to serve as a member of our board based on his experience with finance and capital markets as well as his years of leadership experience on several major public company boards. | | Experience: Joseph J. Bonner is the President & CEO of Solana Beach Capital LLC, where he is responsible for advising Owner/Operator/Developer clients on finding solutions for their real estate capital needs. He was previously the Chief Investment Officer of the UAE based company Mubadala Pramerica Real Estate Investors from 2010 to 2014. Mr. Bonner was responsible for executing the investment strategy of the company regionally as well as globally. From 1989 to 2010, Mr. Bonner held senior positions at Prudential Real Estate Investors in asset management and transactions where he was responsible for all real estate acquisitions in the Mid-Atlantic and Northeast Regions of the United States and the Eastern and Mid-Western Regions of Canada. From 1981 to 1987, Mr. Bonner was a senior engineer at Exxon Chemical Company, responsible for providing project management service to Exxon’s worldwide affiliates. Prior to joining Exxon, Mr. Bonner served as a Project Manager for IBM, where he was responsible for the design and construction of corporate office facilities. Mr. Bonner served as a Director at USAA Real Estate Company through June 2018. He is currently an Independent Director for three mutual funds managed by The Capital Group. Mr. Bonner is a member of the NACD. Mr. Bonner also serves on the Investment Committee of Rethink Community, a social impact community development firm. Mr. Bonner holds a B.A. in architecture from The Cooper Union, an M.S. in civil engineering from MIT, and an M.B.A. from Harvard University. Mr. Bonner has been a member of our board of directors since May 2019. Qualifications: Mr. Bonner was selected to serve as a member on our board based on his extensive experience in real estate investing, global capital markets, acquisitions and finance. | |
Nominees for Directors
| 8 | Extra Space Storage |
Nominees for Directors
| | GARY L. CRITTENDEN AGE: 70 DIRECTOR COMMITTEES: Audit (Chair), Compensation | | SUSAN HARNETT AGE: 67 DIRECTOR | | Experience: Gary L. Crittenden has served as an Executive Director at HGGC, LLC, a private equity firm, since January 2017. Mr. Crittenden previously served as the Chairman and Managing Partner of HGGC, LLC from December 2013 to December 2016, as its Chief Executive Officer from April 2012 to December 2013, and as its Managing Partner from 2009 to April 2012. Mr. Crittenden previously served as chairman of Citi Holdings, and as Chief Financial Officer at Citigroup, American Express Company, Monsanto, Sears Roebuck, Melville Corporation, and Filene’s Basement. Mr. Crittenden is a director of Primerica, Inc. and Zions Bancorporation. Mr. Crittenden holds a B.S. in Management from Brigham Young University, and an M.B.A. from the Harvard Business School. Mr. Crittenden has been a member of our board of directors since February 2020. Qualifications: Mr. Crittenden was selected to serve as a member of our board and as our Audit Committee chair based on his public company operating experience, financial and accounting expertise and his leadership experience within large enterprises. | | Experience: Susan Harnett has served as a mentor to digital startups at the FinTech Innovation Lab since 2015. Ms. Harnett is a founding limited partner of How Women Invest and a co-founder of Juntos, a start-up shoe company. Previously, Ms. Harnett served as the Chief Operating Officer (North America) with QBE Insurance Group from 2012-2015. Ms. Harnett is a director of OFG Bancorp, GoalSetter, and Sphere 3D. Ms. Harnett previously served as a director of Life Storage, Inc., Wellabe Insurance and First Niagara Financial Group. Ms. Harnett is a Certified Director with the NACD and a DCRO Qualified Risk Director. Ms. Harnett holds an M.B.A. from Northwestern University and a Bachelor of Arts degree from Marquette University. Ms. Harnett has been a member of our board of directors since July 2023. Qualifications: Ms. Harnett was selected to serve as a member of our board based on her depth of experience with corporate finance and corporate governance as well as her years of experience working with various boards of publicly traded and private companies. | |
Nominees for Directors
| 2024 Proxy Statement | 9 |
Nominees for Directors
| | SPENCER F. KIRK AGE: 62 DIRECTOR | | DIANE OLMSTEAD AGE: 71 DIRECTOR COMMITTEES: Nominating, Governance and Corporate Responsibility (Chair), Audit | | Experience: Spencer F. Kirk served as the Company’s CEO from April 1, 2009 until his retirement on December 31, 2016. In addition, he has served as a director of the Company since its initial public offering in 2004, serving as the Company’s Chairman from April 1, 2009 until July 1, 2012. Previously, Mr. Kirk served as the Company’s President from September 2007 to April 2009 and as an Executive Vice President of the Company’s predecessor from 1998 to 2004. Mr. Kirk is the Company’s largest private individual stockholder. In addition to his contributions to the Company, Mr. Kirk founded Kirk Humanitarian with his wife, Kristen, in 2002, with the mission of improving global maternal health and birth outcomes. He currently serves full-time as Managing Director and, through his leadership, the family foundation has purchased and donated more than 6.6 billion UNIMMAP MMS prenatal vitamin doses to pregnant women in low-and middle-income countries worldwide. Before his involvement with the Company, Mr. Kirk co-founded Megahertz Corporation in 1985, which became the leading manufacturer of modems for laptop computers in the world. With Mr. Kirk serving as Chairman and CEO, Megahertz grew from a basement operation to the leading supplier of solution-oriented mobile data communications products. Megahertz went public in 1993 and in 1995 was acquired by US Robotics, which was later acquired by 3Com Corporation. Mr. Kirk holds a B.A. in finance and an M.B.A. from the University of Utah. Mr. Kirk has been a member of our board of directors since August 2004. Qualifications: Mr. Kirk was selected to serve as a member of our board based on his knowledge of our Company and the self-storage industry and his extensive experience in the management of public companies. | | Experience: Diane Olmstead has served as the Managing Director at Fillmore Capital Partners (FCP) since May 2018. Her key responsibilities include creating and managing the ESG policy and practices for FCP and its five owned real estate and health care operating companies; serving on the Board of Scioto (a company in which FCP has a majority control), and strategy development. Prior to FCP, Ms. Olmstead was Chief Investment Officer at Bridge Housing Corporation; prior to Bridge, Ms. Olmstead was the founder and Co-CEO of W3 Partners, from 2009 to 2016, and a principal to CIM Group from 2005 to 2009. Ms. Olmstead opened their San Francisco office where she headed acquisitions and development in Northern California and the Pacific Northwest and was a voting member of the investment committee. Prior to CIM Group, from 2000 to 2005, Ms. Olmstead was an Executive VP of iStar and responsible for all activities in iStar’s Western Region, including origination of structured finance transactions and acquisitions of triple net leases. From 1983 to 2000, Ms. Olmstead worked in positions of asset management, lending, acquisitions and equity raising with Arthur Andersen LLP, USF&G Corporation, Cigna Corporation and Aetna, Inc. Ms. Olmstead received an M.B.A. from Pepperdine University. She serves on the boards of Scioto and Mercy Housing. Ms. Olmstead is currently serving as a Planning Commissioner for Sonoma County, District 1. Ms. Olmstead is a member of the Policy Advisory Board of the Fisher Center for Real Estate and Urban Development (UC Berkeley), NAREIT, Women Corporate Directors (WCD) and NACD. Ms. Olmstead has been a member of our board of directors since December 2013. Qualifications: Ms. Olmstead was selected to serve as a member of our board and as our Nominating, Governance and Corporate Responsibility Committee chair based on her experience in real estate investing, acquisitions and corporate finance and her public company operating experience. | |
Nominees for Directors
| 10 | Extra Space Storage |
Nominees for Directors
| | JOSEPH V. SAFFIRE AGE: 54 DIRECTOR | | JULIA VANDER PLOEG AGE: 54 DIRECTOR COMMITTEES: Compensation (Chair), Audit | | Experience: Joseph V. Saffire served as the Chief Executive Officer for Life Storage, Inc. from March 2019 through July 2023. Mr. Saffire previously served as the Chief Investment Officer of Life Storage, Inc. Prior to joining Life Storage, Inc., Mr. Saffire served as the Executive Vice President and Head of Commercial Banking for First Niagara Bank. Mr. Saffire also served as the Executive Vice President and Head of Global Banking for Europe, the Middle East and Africa for Wells Fargo Bank from 2012 to 2014 and the Chief Operating Officer and Head of International Corporate and Commercial Banking in Germany for HSBC Bank from 2010 to 2012. Mr. Saffire previously served as a Director of Life Storage, Inc. Mr. Saffire received an M.B.A. from the University at Buffalo and a Bachelors of Science degree in Finance from Boston College. Mr. Saffire has been a member of our board of directors since July 2023. Qualifications: Mr. Saffire was selected to serve as a member of our board based on his deep self-storage operational strategy experience as well as his years of public company executive experience, including experience with investor relations. | | Experience: Julia Vander Ploeg has over 25 years of experience leading digital, e-commerce and technology operations for complex global businesses across diverse industries, including hospitality, automotive, entertainment, and retail. Ms. Vander Ploeg brings experience to our board on capital allocation, innovation, AI, data monetization and customer experience, as well as risk management, ranging from operations to cyber security. Ms. Vander Ploeg is an Adjunct Professor of Executive Education at the Kellogg School of Management at Northwestern University, and a Senior Advisor to McKinsey & Company. Ms. Vander Ploeg previously served as Senior Vice President and Global Head of Digital for Hyatt Hotels Corporation from 2018 to July 2022, where she led all e-commerce, digital and IT to advance Hyatt’s guest experience across 1200 hotels in 75 countries. Ms. Vander Ploeg also served as Vice President of Digital and Business Transformation for Volvo Car Group from 2017 through 2018, and as U.S. Vice President of Digital for McDonald’s Corporation from 2014 through 2017. Ms. Vander Ploeg currently sits on the supervisory board of Ahold Delhaize (Netherlands) and serves as a director for Neighborly Inc. Ms. Vander Ploeg previously served as a director on the Board of Radio Systems Corporation. Ms. Vander Ploeg received an M.B.A. from Northwestern University and a Bachelor of Arts degree in Marketing from Michigan State University. Ms. Vander Ploeg has been a member of our board since November 2020. Qualifications: Ms. Vander Ploeg was selected to serve as a member of our board and as our Compensation Committee chair based on her experience with digital marketing, e-commerce, technology, and cyber security. | |
Nominees for Directors
| 2024 Proxy Statement | 11 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION All non-employee directors receive compensation for their service. The board determines the form and amount of compensation for non-management directors after consideration of the recommendation of the Compensation Committee. The board has approved the mix of cash and equity compensation described below. Retainers are paid quarterly in cash and are prorated when a director joins the board. Below are the annual retainers that non-employee directors were entitled to receive beginning on May 25, 2023 for board service:
DIRECTOR COMPENSATION
| Compensation | Amount | | Chairman Cash Retainer | $340,000 | | Director Cash Retainer | $80,000 | | Lead Independent Director, supplemental | $20,000 | | Audit Committee Chair, supplemental | $30,000 | | Compensation Committee Chair, supplemental | $25,000 | | Nominating, Governance and Corporate Responsibility Committee, Chair, supplemental | $20,000 | | Non-Chair Committee Member, supplemental | $10,000 |
DIRECTOR COMPENSATION
In addition, all non-employee directors receive an award on the date of each annual meeting of shares of common stock equivalent in value to $160,000 (to the nearest share), with the number of shares determined by the closing price of our common stock on the date of the annual meeting. These shares vest on the first anniversary of the date of grant, subject to a director’s continued service through the vesting date. The following table presents the compensation paid to our non-employee directors in 2023:
DIRECTOR COMPENSATION
| Name | Fees earned or paid in cash | Stock awards (1) | Total | | Kenneth M. Woolley | $340,000 | $160,000 | $500,000 | | Roger B. Porter (2) | 127,500 | 160,000 | 287,500 | | Jennifer Blouin (3) | 54,148 | 160,000 | 214,148 | | Joseph J. Bonner | 100,000 | 160,000 | 260,000 | | Gary Crittenden | 115,000 | 160,000 | 275,000 | | Spencer F. Kirk | 80,000 | 160,000 | 240,000 | | Diane Olmstead | 105,000 | 160,000 | 265,000 | | Jefferson Shreve (4) | 80,000 | 160,000 | 240,000 | | Julia Vander Ploeg | 107,500 | 160,000 | 267,500 | | Mark Barberio (5) | — | — | — | | Susan Harnett (6) | — | — | — | | Joseph V. Saffire (7) | — | — | — | | Total | $1,109,148 | $1,440,000 | $2,549,148 |
DIRECTOR COMPENSATION
(1) Each non-employee director received 1,093 shares of common stock on May 25, 2023. Dollar amounts represent grant date fair value of such grants as determined in accordance with Accounting Standards Codification 718, "Stock Compensation" ("ASC 718") using the assumptions to value such awards reported in the notes to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 29, 2024. As of December 31, 2023, each of our non-employee directors listed in the table above (other than Mr. Barberio, Ms. Harnett and Mr. Saffire) held 1,093 shares of restricted stock. (2) Mr. Porter is not standing for re-election at the 2024 annual meeting. (3) Ms. Blouin is not standing for re-election at the 2024 annual meeting. (4) Mr. Shreve is not standing for re-election at the 2024 annual meeting. (5) Mr. Barberio was appointed to the board effective July 20, 2023, in connection with our acquisition of Life Storage, Inc. and did not receive compensation as a member of our board in 2023. (6) Ms. Harnett was appointed to the board effective July 20, 2023, in connection with our acquisition of Life Storage, Inc. and did not receive compensation as a member of our board in 2023. (7) Mr. Saffire was appointed to the board effective July 20, 2023, in connection with our acquisition of Life Storage, Inc. and did not receive compensation as a member of our board in 2023. During 2023, Mr. Margolis served as a director and was also our CEO. As an employee, he did not receive any additional compensation for his services as a director. In accordance with SEC rules, we have not included Mr. Margolis in the table above.
DIRECTOR COMPENSATION
| 2024 Proxy Statement | 25 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
GENERAL PHILOSOPHY
GENERAL PHILOSOPHY The Compensation Committee is made up of four independent directors, who determine our executive compensation policies in order to align management’s incentives with the long-term interests of stockholders and to be competitive with comparable employers. Accordingly, our compensation program reflects the following key features to ensure management's incentives are appropriately aligned with our stockholders: •Pay for performance; •A high percentage of executive total annual target compensation in the form of equity, including 75% of long-term incentive awards in the form of performance-based stock units which are "at risk" and subject to a three-year performance period to assess long-term performance; •A market-based approach for evaluating and reviewing executive pay; •Caps on annual and long-term incentives; •No employment agreements for executive officers; •Claw-back policy on compensation; •No excessive perquisites; •No tax gross ups; and •Robust stock ownership requirements for executives.
BASE SALARY
BASE SALARY Base salary is a critical element of executive compensation as it provides executives with assured monthly cash compensation. In determining base salaries, the Compensation Committee based its evaluation on a variety of factors, including: •the executive’s qualifications, experience and past performance; •the nature and responsibility of the position; and •the salaries paid to the position within the comparator peer group and other information about similarly-situated executives in the comparable company data. In making the decision on base salaries, the Compensation Committee reviewed changes in job responsibility and title, historical salary levels, performance and contributions made to the Company, the impact on total compensation, competitive conditions and the relationship of compensation to that of other of the Company’s officers and determined the compensation awarded was appropriate to reward performance, ensure retention and maintain appropriate compensation differentials among the Company’s officers. For 2023, the Compensation Committee approved base salary increases for certain of our NEOs as follows: Mr. Sondhi, an increase from $450,000 to $495,000; Mr. Springer, an increase from $410,000 to $460,000 and Mr. Dickens, an increase from $410,000 to $460,000. The other NEOs did not receive base salary increases for 2023.
ANNUAL INCENTIVE BONUS
ANNUAL INCENTIVE BONUS We pay annual incentives to drive the achievement of key business results and to recognize individuals based on their contributions to those results. The Compensation Committee believes that this feature of compensation motivates executive officers to strive to attain our annual goals with 50% of these performance-based goals tied to the financial operating performance of the Company and 50% tied to the senior executive’s achievement of specific management goals, outlined below. The financial performance goals set for 2023 were based on the Company’s achievement of a specific target (the “Core FFO Target”) related to the Company’s core funds from operations ("Core FFO"). The Core FFO Target is defined and approved annually by the board of directors. The portion of bonus based on the Core FFO Target could incrementally increase or decrease based on meeting, exceeding, or failing to meet the Core FFO Target. The Core FFO Target is based on the Company’s Core FFO, with additional adjustments agreed to by the board of directors in order to consistently review the performance of management as it relates to Core FFO. Core FFO provides relevant and meaningful information about our performance and is the primary measure that we use to assess our operating performance. For 2023, Core FFO was defined as funds from operations ("FFO") excluding revenues and expenses not core to our operations. For annual bonus determination purposes for 2023, Core FFO was also adjusted to remove the impact of depreciation above or below a budgeted amount based on the Company’s projections. FFO and Core FFO are non-GAAP measures and a reconciliation of those measures to GAAP net income attributable to common stockholders is attached to this proxy statement as Appendix A. The annual incentive plan provides that the financial performance portion of executive officers’ bonuses will be determined based upon the percent of Core FFO Target earned, with a maximum bonus payout of 150% in the event that the Core FFO Target is greater than 105% and a minimum payout of 50% in the event that the Core FFO Target is less than 95% of the Core FFO Target. Notwithstanding the foregoing, the Compensation Committee may, in its sole discretion, exclude or adjust significant non-budgeted or non-controllable amounts, gains, or losses from actual financial results in order to properly measure the Company’s performance. In addition, the Compensation Committee may adjust the Company’s overall FFO targets and gradations used to determine the percentage of the Core FFO target to appropriately implement the intent of the annual incentive plan. The Core FFO Target established for 2023 was $8.47 of Core FFO per share. Due to the transformative nature of the LSI acquisition, the Board adjusted the Core FFO Target downward by $.15 to $8.32 to account for short-term dilution related to the acquisition. For annual bonus determination purposes for 2023, Core FFO was $8.10 per share, resulting in the payment of 79% of the portion of the bonus related to the achievement of the adjusted Core FFO Target pursuant to the annual incentive plan. The other portion of the annual bonuses are determined based on our executive officers' achievement of additional key corporate financial, operational and strategic goals. In February 2023, the Board established the senior executives corporate goals for 2023 for this portion of the annual bonus. However, in light of the scale and importance of the Life Storage acquisition in July 2023, several key goals were added later in 2023 by the Board relating to the integration of the Life Storage portfolio. Summarized below are the modified goals for the executive officers for 2023 for the 50% of their annual bonuses that are not tied to Core FFO per share:
ANNUAL INCENTIVE BONUS
| 2023 Goals | 2023 Achieved | | •Same Store NOI growth of 5.0% or higher | •Same Store NOI growth of 2.8% | | •Do not exceed Corporate G&A budget, unless caused by growth or market conditions (budget revised to $85 million after Life Storage acquisition) | •Corporate G&A was 3.8% under budget prior to the Life Storage acquisition and 7.8% under budget after the budget was modified to account for the Life Storage acquisition | | •Acquire $750 million in gross investments | •Closed $15 billion merger with Life Storage plus closed over $698 million in gross investments | | •Expand third party management platform by 120 stores (gross) and collect $121 million in fees and insurance revenue (excluding the Life Storage managed stores) | •Expanded third party management platform by 225 stores (gross) and collected $122 million in fees and revenue insurance, excluding fees collected from the Life Storage third party management platform | | •Close Life Storage acquisition, integrate systems, people and develop dual brand-strategy | •Closed the Life Storage acquisition on July 20, 2023 and successfully integrated the systems and people within 30 days after closing and implemented a dual-brand strategy within 90 days after closing. | | •Execute one to three long-term public bond offerings and seek to increase leverage | •Executed three long-term public bond deals, issuing $1.55 billion in bonds with 5-7 year maturities |
ANNUAL INCENTIVE BONUS
In addition to the corporate goals listed above, the executive officers each have additional qualitative goals relating to operational efficiencies, human capital management, technology, sustainability, growth and other company improvements. Mr. Margolis presented to the Compensation Committee his assessment of the achievement of the corporate goals listed above and the specific qualitative goals of each of our executive officers. The Compensation Committee reviewed the 2023 goals and achievements and weighed these against the outstanding Core FFO achieved for the year. Upon discussion and review, the Compensation Committee approved an achievement level of 98% of the portion of the bonus related to the corporate goals outlined above and the individual qualitative goals for the Chief Financial Officer, Chief Marketing Officer, Chief Strategy and Partnership Officer and Chief Investment Officer. In addition, the Compensation Committee conducted its own evaluation of Mr. Margolis’s performance relative to the above corporate goals and his
ANNUAL INCENTIVE BONUS
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ANNUAL INCENTIVE BONUS
individual qualitative goals and the Compensation Committee determined to approve an achievement level of 98% for Mr. Margolis for the portion of the bonus related to such goals. The annual bonuses paid to the named executive officers for 2023 are reflected in the “Summary Executive Compensation Table” below.
LONG-TERM INCENTIVES FOR 2023
LONG-TERM INCENTIVES FOR 2023 The Long-Term Incentive Program allows for grants of performance-based stock units ("PSU(s)") and restricted stock. The goals of the Company’s equity awards are to: (1) align the interests of each executive officer with those of our stockholders by providing each individual with a significant incentive to manage the Company from the perspective of a stockholder with an equity stake in the business, and (2) encourage long-term retention of key employees by virtue of vesting conditions imposed on typical equity awards. Employees must remain employed by the Company for a fixed period of time in order for the equity awards to vest fully. Unless otherwise determined by the Compensation Committee, vesting ceases upon termination of employment and unvested grants of restricted stock and PSUs are canceled upon termination of employment. During the vesting period, PSUs and restricted stock awards may not be sold, transferred or pledged.
LONG-TERM INCENTIVES GRANTED IN 2023
LONG-TERM INCENTIVES GRANTED IN 2023 For 2023, the NEOs of the Company received 25% of their long-term incentive awards in the form of restricted stock grants. Grants of restricted stock vest over a four-year period at the rate of 25% per year. The restricted stock grants may be voted and receive the payment of non-forfeitable dividends. The remaining 75% of the long-term incentive awards to the NEOs come in the form of PSUs that vest after a three-year performance period. For the awards granted in 2023, the three-year performance period will end on December 31, 2025. These awards have two performance components, each weighted 50%, that are measured at the end of the three-year performance period. At the end of the performance period and to the extent performance goals are achieved, the PSUs will then be converted into common shares and paid out after the end of the performance period. In addition, the award recipient will receive a cash payment equivalent to the dividends that would have been paid on such stock during the performance period on the vesting date. The first performance component of the PSUs measures our total stockholder return (measured by reference to the change in our share price plus dividends) as compared to the total stockholder return of a peer group consisting of all REITs tracked within the MSCI US REIT Index. If the Company achieves a total stockholder return at the 50th percentile of this index, then the PSUs will be paid out at 100% of the target units related to the total stockholder return metric. The second performance component of the PSUs measures the Company’s annual growth in Core FFO, per share. The Compensation Committee has set a three-year Core FFO per share target which, if achieved, will result in a payout of 100% of the target units related to the Core FFO metric. The NEOs have the ability to be paid out at a range of 0% to 200% of the target units depending on the Company’s performance with respect to both metrics. Performance above and below targeted levels will be determined by linear interpolation. Subject to the accelerated vesting described below, the NEOs must generally remain employed through the last day of the performance period in order to be eligible to vest in the performance-based stock units. Grants of restricted shares and PSUs are discussed and reviewed at regularly scheduled meetings of the Compensation Committee. By taking such actions at regularly scheduled meetings, the Compensation Committee seeks to avoid any possible appearance that the grant timing was manipulated to affect the value of the awards. We do not have any program, plan or practice to coordinate any equity awards with the release by us of material non-public information or any other investor relations activities. The Compensation Committee awarded both restricted stock grants and PSUs to all of the named executive officers in 2023, which are shown in the “Grants of Plan-Based Awards” table below. The values of the restricted stock grants and PSUs were determined by the Compensation Committee after careful review and discussion of compensation studies provided by Meridian and taking into consideration the total executive compensation at the comparator group of companies, the overall performance by the Company coupled with increased acquisitions and growth at the Company. The equity awards granted to the named executive officers are eligible for accelerated vesting under certain circumstances as described below under “Executive Compensation Tables—Severance and Change in Control Arrangements with Named Executive Officers.”
FINAL RESULTS OF THE 2021 PERFORMANCE BASED UNITS
FINAL RESULTS OF THE 2021 PERFORMANCE BASED UNITS In February 2021, the Company issued PSUs to our NEOs, which allowed each NEO to earn from 0% to 200% of the target number of awards based on two performance components, each weighted at 50%, measured at the end of the three-year performance period that ended December 31, 2023. The first performance component of the 2021 PSUs was our total stockholder return (measured by reference to the change in our share price plus dividends) as compared to the total stockholder return of a peer group consisting of all REITs tracked within the MSCI US REIT Index. If we achieved a total stockholder return at the 50th percentile of our peer group, then the PSUs would pay out at 100% of the target units related to the total stockholder return metric. The second performance component of the 2021 PSUs measured the Company’s cumulative Core FFO per share over the three-year performance period. The
FINAL RESULTS OF THE 2021 PERFORMANCE BASED UNITS
Compensation Committee set a three-year cumulative Core FFO per share target of $18.72 per share (representing cumulative Core FFO targets for the years 2021, 2022 and 2023), which, if achieved, would have resulted in a payout of 100% of the target units related to the Core FFO metric. In February 2024, the Compensation Committee determined our performance relative to the performance metrics for the 2021 PSUs and approved the vesting of such awards at 200% of target. The following tables show the performance metrics and ultimate 200% achievement for the 2021 PSUs at the completion of the three-year performance period from January 1, 2021 through December 31, 2023 and the resulting stock awards.
OTHER COMPENSATION ELEMENTS
OTHER COMPENSATION ELEMENTS We provide benefits and perquisites to our named executive officers and other employees, such as medical and life insurance, 401(k) plan, and severance pursuant to the terms of the Company’s change in control plan. •Medical Insurance. The Company makes available to each NEO and their spouses and children such health, dental and vision insurance coverage on the same basis as other employees. A portion of the insurance coverage is paid by the Company. •Life Insurance. The Company provides each named executive officer such life insurance on the same basis as other employees. •Retirement Benefits. Our executive officers are eligible to participate in our 401(k) defined contribution plan on the same basis as other eligible employees. The Company currently matches 100% of the first three percent of an employee’s cash compensation contributed by each employee, and 50% of the next two percent of an employee’s cash compensation contributed. A description of the severance arrangements we maintain with our named executive officers can be found under “Severance and Change in Control Arrangements with Named Executive Officers” below. We also limit the perquisites that we make available to our executive officers, particularly in light of the potential for abuse associated with such perquisites. Accordingly, our executives are entitled to few benefits that are not otherwise available to all of our employees.
SUMMARY EXECUTIVE COMPENSATION TABLE
| Name and principal position | Year | Salary | Bonus | Non-equity incentive plan compensation (1) | Stock awards (2) | All other compensation (3) | Total | | Joseph D. Margolis | 2023 | $900,000 | $— | $1,393,875 | $9,059,042 | $927,784 | $12,280,701 | | Chief Executive Officer | 2022 | 900,000 | — | 1,890,000 | 8,024,201 | 814,543 | 11,628,744 | | | 2021 | 850,000 | — | 1,434,375 | 4,278,669 | 752,938 | 7,315,982 | | Scott Stubbs | 2023 | $500,000 | $— | $553,125 | $2,399,700 | $266,974 | $3,719,799 | | Chief Financial Officer | 2022 | 500,000 | — | 750,000 | 2,125,761 | 235,539 | 3,611,300 | | | 2021 | 475,000 | — | 593,750 | 1,195,510 | 219,934 | 2,484,194 | | Zach Dickens | 2023 | $460,000 | $— | $407,100 | $2,519,836 | $108,265 | $3,495,201 | | Chief Investment Officer | | | | | | | | | Samrat Sondhi | 2023 | $495,000 | $— | $438,075 | $2,531,662 | $213,154 | $3,677,891 | | Chief Marketing Officer | 2022 | 450,000 | 140,625 | 562,500 | 1,554,432 | 182,985 | 2,890,542 | | | 2021 | 410,000 | — | 486,875 | 917,220 | 170,463 | 1,984,558 | | Noah Springer | 2023 | $460,000 | $— | $407,100 | $2,639,808 | $88,002 | $3,594,910 | | Chief Strategy and Partnership Officer | 2022 | 410,000 | 128,125 | 512,500 | 1,568,737 | 59,916 | 2,679,278 |
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
GRANTS OF PLAN-BASED AWARDS
| | | Estimated future payouts under non-equity incentive plan awards | | | Estimated future payouts under equity incentive plan awards | | | All other stock awards: number of shares of stock or units (4) | Grant date fair value of stock awards (5) | | Name | Grant date (1) | Threshold | Target (2) | Maximum (2) | Threshold (#) | Target (#) (3) | Maximum (#) (3) | | | | Joseph D. Margolis | | | | | | | | | | | Annual Incentive | | $393,750 | $1,575,000 | $1,968,750 | | | | — | $— | | Stock awards | 3/1/2023 | | | | | | | 11,533 | 1,887,491 | | PSU awards | 3/1/2023 | | | | — | 34,599 | 69,198 | — | 7,171,551 | | Scott Stubbs | | | | | | | | | | | Annual Incentive | | $156,250 | $625,000 | $781,250 | | | | — | $— | | Stock awards | 3/1/2023 | | | | | | | 3,055 | 499,981 | | PSU awards | 3/1/2023 | | | | — | 9,165 | 18,330 | — | 1,899,719 | | Zach Dickens | | | | | | | | | | | Annual Incentive | | $115,000 | $460,000 | $575,000 | | | | — | $— | | Stock awards | 3/1/2023 | | | | | | | 3,208 | 525,021 | | PSU awards | 3/1/2023 | | | | — | 9,624 | 19,248 | — | 1,994,815 | | Samrat Sondhi | | | | | | | | | | | Annual Incentive | | $123,750 | $495,000 | $618,750 | | | | — | $— | | Stock awards | 3/1/2023 | | | | | | | 3,223 | 527,476 | | PSU awards | 3/1/2023 | | | | — | 9,669 | 19,338 | — | 2,004,186 | | Noah Springer | | | | | | | | | | | Annual Incentive | | $115,000 | $460,000 | $575,000 | | | | — | $— | | Stock awards | 3/1/2023 | | | | | | | 3,361 | 550,061 | | PSU awards | 3/1/2023 | | | | — | 10,082 | 20,164 | — | 2,089,747 |
GRANTS OF PLAN-BASED AWARDS
(1) Approval date of the awards was February 15, 2023. (2) Amounts relate to the annual incentive bonus as described in the “Annual Incentive Bonus” section above. (3) Represents PSUs granted during 2023 under the 2015 Incentive Award Plan related to the 2023 total compensation package for the named executive officers found in the "Summary Executive Compensation Table" above. For a description of the vesting terms applicable to such awards, please see "Executive Compensation - Compensation Discussion and Analysis -- Long-Term Incentives Granted in 2023" above. The awards are eligible for accelerated vesting under certain circumstances as described below under “Executive Compensation Tables -- Severance and Change in Control Arrangements with Named Executive Officers.” (4) Grants of restricted stock awards under the 2015 Incentive Award Plan related to the 2023 total compensation package for the named executive officers. The shares have dividend and voting rights and vest ratably over four years following the grant date. The awards are eligible for accelerated vesting under certain circumstances as described below under “Executive Compensation Tables -- Severance and Change in Control Arrangements with Named Executive Officers.” (5) Dollar amounts represent the grant date fair value of the stock awards granted during the year computed in accordance with ASC 718, using the assumptions to value such awards reported in the notes to our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC. See footnote (2) to the “Summary Executive Compensation Table” above for more details regarding the grant date fair values of the 2023 equity awards.
GRANTS OF PLAN-BASED AWARDS
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OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | Option awards | | | | Stock awards | | | | | Name | Number of shares underlying unexercised options exercisable | Number of shares underlying unexercised options unexercisable | Option exercise price | Option expiration date | Number of shares that have not vested (1) | Market value of shares that have not vested (2) | Equity incentive plan awards; Number of unearned shares, units or other rights that have not vested (3) | Equity incentive plan awards; Market or payout value of unearned shares, units or other rights that have not vested (2) | | Joseph D. Margolis | — | — | $— | -- | 27,101 | $4,345,103 | 63,756 | $10,221,999 | | Scott Stubbs | — | — | — | -- | 7,299 | 1,170,249 | 16,889 | 2,707,813 | | Zach Dickens | — | — | — | -- | 6,046 | 969,355 | 14,374 | 2,304,583 | | Samrat Sondhi | 2,625 | — | 85.99 | 2/22/2026 | 6,409 | 1,027,555 | 15,317 | 2,455,775 | | Noah Springer | — | — | — | -- | 6,093 | 976,891 | 15,730 | 2,521,991 |
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
(1) Represents restricted stock awards granted to the named executive officers. The awards are eligible for accelerated vesting under certain circumstances as described below under “Executive Compensation Tables -- Severance and Change in Control Arrangements with Named Executive Officers.” Mr. Margolis' 27,101 shares vest as follows: 2,839 shares vested on February 12, 2024; 5,440 shares vest ratably over the remaining two years on February 16, 2024 and 2025; 7,289 shares vest ratably over the remaining three years on February 14, 2024, 2025 and 2026; and 11,533 shares vest ratably over the remaining four years on the anniversary of the date of grant of March 1, 2023. Mr. Stubbs' 7,299 shares vest as follows: 793 shares vested on February 12, 2024; 1,520 shares vest ratably over the remaining two years on February 16, 2024 and 2025; 1,931 shares vest ratably over the remaining three years on February 14, 2024, 2025 and 2026; and 3,055 shares vest ratably over four years on the anniversary date of grant of March 1, 2023. Mr. Dickens' 6,046 shares vest as follows: 156 shares vested February 12, 2024; 370 shares vest ratably over the remaining two years on February 16, 2024 and 2025; 2,312 shares vest ratably over the remaining three years on February 14, 2024, 2025 and 2026; and 3,208 shares vest ratably over four years on the anniversary date of grant of March 1, 2023. Mr. Sondhi's 6,409 shares vest as follows: 608 shares vested on February 12, 2024; 1,166 shares vest ratably over the remaining two years on February 16, 2024 and 2025; 1,412 shares vest ratably over the remaining three years on February 14, 2024, 2025 and 2026; and 3,223 shares vest ratably over four years on the anniversary date of grant of March 1, 2023. Mr. Springer's 6,093 shares vest as follows: 120 shares vested on February 12, 2024; 300 shares vest ratably over the remaining two years on February 16, 2024 and 2025, 1,187 shares vest ratably over the remaining three years on February 14, 2024, 2025 and 2026; 1,125 shares vest ratably over the remaining three years on July 1, 2024, 2025 and 2026; and 3,361 shares vest ratably over four years on the anniversary date of grant of March 1, 2023. (2) Market value at year-end is based on the closing trading price of our stock on December 29, 2023, which was $160.33 (the last trading day in 2023). (3) Represents the PSUs granted to the NEOs on March 1, 2023 and February 14, 2022 that vest after a three-year performance period ending December 31, 2025 and December 31, 2024, respectively, as follows: Mr. Margolis, 34,599 units granted in 2023 and 29,157 units granted in 2022; Mr. Stubbs, 9,165 units granted in 2023 and 7,724 units granted in 2022; Mr. Dickens, 9,624 units granted in 2023 and 4,750 units granted in 2022; Mr. Sondhi, 9,669 units granted in 2023 and 5,648 units granted in 2022; and Mr. Springer, 10,082 units granted in 2023 and 5,648 units granted in 2022. The maximum payout of the PSUs would be double the units awarded at grant date. The PSUs are included in the table above at target levels. The NEOs have the ability to be paid out at a range of 0% to 200% of the target units depending on the Company’s performance with respect to the performance metrics applicable to these awards. In addition, the award recipient will receive a cash payment equivalent to the dividends that would have been paid on such stock during the performance period on the vesting date of the PSUs. For a description of the vesting terms applicable to such awards, please see “Executive Compensation — Compensation Discussion and Analysis -- Long-Term Incentives Granted in 2023” above. The awards are eligible for accelerated vesting under certain circumstances as described below under “Executive Compensation Tables -- Severance and Change in Control Arrangements with Named Executive Officers.”
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
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OPTIONS EXERCISED, STOCK VESTED AND 2021 PSUs VESTED
OPTIONS EXERCISED, STOCK VESTED AND 2021 PSUs VESTED
OPTIONS EXERCISED, STOCK VESTED AND 2021 PSUs VESTED
| | Option Awards | | | Stock Awards | | | | Name | Number of shares acquired on exercise | Value realized on exercise | | Number of shares acquired on vesting (1) | Value realized on vesting | | | Joseph D. Margolis | — | | — | 54,765 | | 8,817,566 | | Scott Stubbs | — | — | | 15,266 | 2,457,839 | | | Zach Dickens | — | — | | 5,065 | 803,457 | | | Samrat Sondhi | — | — | | 11,691 | 1,882,204 | | | Noah Springer | — | — | | 3,706 | 591,846 | |
OPTIONS EXERCISED, STOCK VESTED AND 2021 PSUs VESTED
(1) Includes the 2021 PSUs granted on February 16, 2021 that were settled in March 2024 based on performance during the three-year performance period that ended December 31, 2023 and corresponding dividend equivalent payouts paid in cash on such 2021 PSUs, which cash dividend equivalent payouts occurred in February 2024, as follows: Mr. Margolis, 43,520 shares and $738,970, respectively; Mr. Stubbs, 12,160 shares and $206,477, respectively; Mr. Dickens, 2,958 shares and $50,227, respectively; Mr. Sondhi, 9,330 shares and $158,423, respectively; and Mr. Springer, 2,404 shares and $40,820, respectively.
CEO PAY RATIO
CEO PAY RATIO We believe executive pay must be internally consistent and equitable to motivate our employees to create stockholder value. We are committed to internal pay equity, and the Compensation Committee monitors the relationship between the pay of our executive officers and the pay of our non-managerial employees. The Compensation Committee reviewed a comparison of CEO pay (base salary and incentive pay) to the pay of all our employees in 2023. Our CEO to median employee pay ratio set forth below is a reasonable estimate calculated as required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining the 2023 total cash compensation for all individuals, excluding our CEO, who were employed by us on December 31, 2023, the last day of our payroll year. In determining our median employee, we included all employees, whether employed on a full-time, part-time, or seasonal basis, except that we elected to exclude the approximately 1,516 employees who became our employees as a result of our acquisition of Life Storage, Inc. in July 2023. We did not make any assumptions, adjustments, or estimates with respect to total cash compensation, and we did not annualize the compensation for any full-time employees who were not employed by us for all of 2023. We believe the use of total cash compensation for all employees is a consistently applied compensation measure because we do not widely distribute annual equity awards to employees. Approximately 9% of our employees receive annual equity awards. For 2023: •the median of the annual total compensation of all employees of our Company (other than our CEO) was $49,954; and •the annual total compensation of our CEO, as reported in the Summary Executive Compensation Table included elsewhere in this proxy statement, was $12,280,701 Based on this information, for 2023, our CEO to median employee pay ratio was 246 to 1.
CEO PAY RATIO
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PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE As discussed in the CD&A above, our Compensation Committee has implemented an executive compensation program designed to link a substantial portion of our executives' compensation to the achievement of the Company's financial, operational and strategic objectives. The following table sets forth information concerning the compensation and compensation actually paid to our CEO and other NEOs, calculated in accordance with SEC regulations, for fiscal years 2023, 2022, 2021 and 2020, and our financial performance for each such fiscal year:
PAY VERSUS PERFORMANCE
| | | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | | | | Year | Summary Compensation Table Total for CEO | | Compensation Actually Paid to CEO (1) | | Average Summary Compensation Table Total for Non-CEO NEOs | | Average Compensation Actually Paid to Non-CEO NEOs (1) | | Total Stockholder Return | | Peer Group Total Stockholder Return (2) | | Net Income (in thousands) | | Core FFO per Share (3) | | | 2023 | | 12,280,701 | | 13,297,624 | | 3,621,950 | | 3,779,198 | | 174.45 | | 113.35 | | 850,453 | | 8.10 | | 2022 | | 11,628,744 | | 821,731 | | 2,946,484 | | 927,072 | | 153.35 | | 99.67 | | 921,156 | | 8.44 | | 2021 | | 7,315,982 | | 30,315,331 | | 1,823,862 | | 5,938,587 | | 228.23 | | 131.78 | | 877,758 | | 6.91 | | 2020 | | 6,782,212 | | 11,474,793 | | 1,694,401 | | 3,746,746 | | 113.57 | | 92.00 | | 517,582 | | 5.28 |
PAY VERSUS PERFORMANCE
(1) Amounts represent compensation actually paid to our CEO and the average compensation actually paid to our NEOs, as determined under SEC rules, which includes the individuals indicated in the table below for each fiscal year:
PAY VERSUS PERFORMANCE
| Year | CEO | Non-CEO NEOs | | 2023 | Joseph D. Margolis | Scott Stubbs, Samrat Sondhi, Noah Springer, Zach Dickens | | 2022 | Joseph D. Margolis | Scott Stubbs, Gwyn G. McNeal, Samrat Sondhi and Noah Springer | | 2021 | Joseph D. Margolis | Scott Stubbs, Matthew T. Herrington, Gwyn G. McNeal and Samrat Sondhi | | 2020 | Joseph D. Margolis | Scott Stubbs, Matthew T. Herrington, Gwyn G. McNeal, James Overturf and Samrat Sondhi |
PAY VERSUS PERFORMANCE
(2) For the relevant fiscal year, represents the cumulative TSR of the FTSE Nareit Equity REITs Index ("FNRE"), which is the peer group used by the Company for purposes of Item 201(e) of Regulation S-K under the Exchange Act in the Company's Annual Report for the year ended December 31, 2023. (3) Core FFO per Share represents FFO per share as adjusted. FFO is defined by the National Association of Real Estate Investment Trusts, Inc. (“NAREIT”) as net income computed in accordance with GAAP excluding gains or losses on sales of operating stores and impairment write downs of depreciable real estate assets, plus depreciation and amortization and after adjustments to record unconsolidated partnerships and joint ventures on the same basis. Core FFO is FFO excluding revenues and expenses not core to our operations. For a reconciliation of net income attributable to common stockholders on a GAAP basis to Core FFO and Core FFO per share, see Appendix A. The amounts reported in the “Compensation Actually Paid to CEO” and “Average Compensation Actually Paid to Non-CEO NEOs” columns do not reflect the actual compensation paid to or realized by our CEO or our non-CEO NEOs during each applicable year. The calculation of compensation actually paid for purposes of this table includes point-in-time fair values of stock awards and these values will fluctuate based on our stock price, various accounting valuation assumptions and projected performance related to our performance awards. See the Summary Compensation Table for certain other compensation of our CEO and our non-CEO NEOs for each applicable fiscal year and the Options Exercised, Stock Vested and 2021 PSUs Vested table for the value realized by each of them upon the vesting of stock awards during 2023. To calculate the amounts in the compensation actually paid to our CEO and the average for the other NEOs in the table above, the following amounts were deducted from and added to (as applicable) the "total" compensation as reported in the Summary Compensation Table:
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| | 2023 | | 2022 | | 2021 | | 2020 | | | Adjustments | CEO | Average for Non-CEO NEOs | CEO | Average for Non-CEO NEOs | CEO | Average for Non-CEO NEOs | CEO | Average for Non-CEO NEOs | | Deduction for Amounts Reported under the “Stock Awards” Column in the Summary Compensation Table | $(9,058,955) | $(2,522,752) | $(8,024,201) | $(1,691,600) | $(4,278,669) | $(805,726) | $(4,216,825) | $(763,020) | | Increase based on ASC 718 Fair Value of Awards Granted during Applicable FY that Remain Unvested as of Applicable FY End, determined as of Applicable FY End | $8,801,236 | $2,450,949 | $5,935,053 | $1,258,891 | $11,965,824 | $2,253,324 | $4,934,003 | $2,109,021 | | Increase/(Deduction) for Awards Granted during Prior FY that were Outstanding and Unvested as of Applicable FY End, determined based on change in ASC 718 Fair Value from Prior FY End to Applicable FY End | $1,090,112 | $191,883 | $(8,330,837) | $(1,512,653) | $15,273,519 | $2,663,506 | $3,879,905 | $684,932 | | Increase/(Deduction) for Awards Granted during Prior FY that Vested During Applicable FY, determined based on change in ASC 718 Fair Value from Prior FY End to Vesting Date | $184,530 | $37,168 | $(387,028) | $(74,050) | $38,676 | $3,620 | $95,498 | $21,412 | | Total Adjustments | $1,016,923 | $157,248 | $(10,807,013) | $(2,019,412) | $22,999,350 | $4,114,724 | $4,692,581 | $2,052,345 |
PAY VERSUS PERFORMANCE
Adjustments include the following assumptions used to calculate the fair value of the awards at each valuation date in accordance with ASC 718: For awards of restricted stock, adjustments reflected are based on the fair value of the awards as of the applicable valuation date calculated by multiplying the change in stock price at each fiscal year end presented by the number of shares of restricted stock outstanding on such valuation date. For the PSUs that are tied to Core FFO per Share, adjustments reflected are based on the fair value of the awards as of the applicable valuation date calculated by multiplying the stock price at each fiscal year end by the number of PSUs outstanding and by the estimated probability of achieving the performance target that was used to calculate our ASC 718 expense for each fiscal year. For the PSUs that are tied to relative total stockholder return and calculated in accordance with ASC718 using a Monte Carlo simulation, the adjustments reflected used the following valuation assumptions in order to calculate the fair value as of each fiscal year end (which is also the vesting date for those PSUs that vest based on the three-year period ending at such fiscal year end). Under the terms of the PSUs, dividends for the entire measurement period are paid in cash when the shares are released (and disclosed in the “All Other Compensation” column of the Summary Compensation Table for the year in which such dividends are paid), so the dividend yield was assumed to be 0%.
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE
| | Valuation Assumptions | | | | | As of December 31, | PSU-TSR Award Granted | Risk-free rate | Volatility | Expected term (in years) | | 2022 | February 2022 | 4.4% | 28.4% | 2 | | 2022 | February 2021 | 4.7% | 34.0% | 1 | | 2021 | February 2021 | 0.7% | 33.0% | 2 | | 2022 | February 2020 | N/A | N/A | 0 | | 2021 | February 2020 | 0.4% | 20.9% | 1 | | 2020 | February 2020 | 0.1% | 31.6% | 2 |
PAY VERSUS PERFORMANCE
For additional information about the assumptions used to value our equity awards, please see the notes to the our financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 28, 2023, and our Annual Report on Form 10-K for prior years.
DIRECTORS AND OFFICERS
DIRECTORS AND OFFICERS The address for each named person is c/o Extra Space Storage Inc., 2795 East Cottonwood Parkway, Suite 300, Salt Lake City, UT 84121. We are not aware of any pledge of our common stock that could result in a change in control of our Company. The following table presents the beneficial ownership of our common stock, as of the close of business on March 26, 2024 of: • each of our directors and nominees for director; • each named executive officer noted above; and • our directors and executive officers as a group.
DIRECTORS AND OFFICERS
| Name | Options (1) | Restricted Stock (2) | Number of Shares Beneficially Owned (3) | Percent of Class (4) | | Directors | | | | | | Kenneth M. Woolley (5) | 6,647 | 1,093 | 409,551 | * | | Joseph D. Margolis (6) | | 31,574 | 233,075 | * | | Mark Barberio | | — | 21,163 | * | | Jennifer Blouin | | 1,093 | 1,093 | * | | Joseph J. Bonner | | 1,093 | 4,504 | * | | Gary Crittenden | | 1,093 | 4,330 | * | | Susan Harnett | | — | 2,832 | * | | Spencer F. Kirk (7) | | 1,093 | 948,195 | * | | Diane Olmstead | | 1,093 | 7,556 | * | | Roger B. Porter (8) | | 1,093 | 231,886 | * | | Joseph Saffire | | — | 42,343 | * | | Jefferson Shreve (9) | | 1,093 | 620,958 | * | | Julia Vander Ploeg | | 1,093 | 3,413 | * | | Non-Director Named Executive Officers | | | | | | Scott Stubbs | | 8,698 | 164,805 | * | | Zachary Dickens (10) | | 8,562 | 19,472 | * | | Samrat Sondhi | | 8,057 | 94,126 | * | | Noah Springer (11) | | 8,946 | 15,235 | * | | All directors and executive officers as a group (19 persons) | | | 2,871,040 | 1.36% |
DIRECTORS AND OFFICERS
* Less than 1.0% (1) Consists of options to acquire shares of common stock that can be exercised within 60 days of March 26, 2024. (2) Consists of shares of our common stock that are subject to restrictions on transfers and forfeiture provisions. The forfeiture and transfer restrictions lapse over a four-year period beginning on the date of grant for executives and a one-year period beginning on the date of grant for members of the board of directors. (3) Beneficial ownership of shares is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power, or of which a person has the right to acquire ownership within 60 days after March 26, 2024. This includes any unvested restricted stock awards as reported under column header "Restricted Stock" and any stock options as reported under column header "Options" in the table above. (4) For each person included in the table, percent of class is calculated by dividing the number of shares of our common stock beneficially owned by that person by the sum of (a) 211,620,383 shares of our common stock outstanding as of March 26, 2024 plus (b) the number of options to acquire common stock beneficially owned by such person that can be exercised within 60 days of March 26, 2024. (5) Amounts also include 300,000 shares that were pledged as collateral on two loans. As of March 26, 2024, approximately $40 million was outstanding on the loans. (6) Includes 97,260 shares of common stock which are held by Cove Hollow Lane I, LLC, which is beneficially owned by The Margolis Family Delaware Trust I, and 39,190 shares of common stock which are held by Cove Hollow Lane II, LLC, which is beneficially owned by The Margolis Family Delaware Trust II. Mr. Margolis controls the investment decisions of The Margolis Family Delaware Trust I and Mr. Margolis’ spouse controls the investment decisions of The Margolis Family Delaware Trust II. As a result of the relationships describe in the prior sentence, Mr. Margolis may be deemed to have or share beneficial ownership of shares held by such entities. (7) Includes 644,366 shares of common stock which are held by Krispen Family Holdings, L.C., an entity in which Mr. Kirk has shared voting and investment power. Mr. Kirk has no pecuniary interest in 50.5% of such shares and disclaims beneficial ownership. Includes 161,215 shares of common stock which are held by The Kirk 101 Trust. Mr. Kirk has no pecuniary interest in any of these shares and disclaims beneficial ownership. Includes 17,500 shares of common stock held by the Spenco Irrevocable Trust. Mr. Kirk may be deemed to have or share beneficial ownership of shares held by such entity. (8) Includes 100,000 shares of common stock which are held by Roger Blaine Porter 2012 Trust, an entity in which Mr. Porter has shared voting and investment power and beneficial ownership.
DIRECTORS AND OFFICERS
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DIRECTORS AND OFFICERS
DIRECTORS AND OFFICERS (9) Includes 619,294 common operating partnership units ("OP units"), which are exchangeable into shares of our common stock. See Appendix A or the notes to the consolidated financial statements in the Company's Form 10-K for more details on OP units. (10) Includes 80 shares of common stock held in the Extra Space Management, Inc. 401(k) Plan. (11) Includes 1,177 shares of common stock held in the Extra Space Management, Inc. 401(k) Plan.
DIRECTORS AND OFFICERS
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Item 1. Election of Directors
Item 1. Election of Directors