Because matters relating to executive compensation can be challenging under even the best circumstances, REITs and their boards of directors must be thoughtful when designing and implementing executive compensation programs that create appropriate incentives for executives to achieve both short- and long-term financial and other objectives. When done correctly, a REIT’s executive compensation program can be a critical tool in recruiting, motivating and retaining executive talent and achieving corporate objectives, while at the same time encouraging behavior that generates long-term value for stockholders. In this 2024 Guide to REIT Executive Compensation (this “Guide”), we attempt to demystify REIT executive compensation by addressing a variety of topics, including, among others: ■ the various components of REIT executive compensation; ■ key compensation trends in the REIT industry; ■ the respective roles of the board of directors, the compensation committee, management and outside advisors; ■ governance matters relating to executive compensation, including best practices and provisions viewed as problematic by investors and proxy advisory firms; ■ increasing expectations for accountability and transparency relating to executive compensation; and ■ SEC reporting and other obligations relating to executive compensation, including the SEC’s rules relating to pay-versus-performance disclosures. We note that the topic of executive compensation is too complex and too nuanced to address comprehensively in this Guide. Rather, this Guide is intended to introduce and clarify executive compensation principles so that boards of directors, compensation committee members and senior management teams understand key concepts. This Guide also does not constitute securities law, accounting, tax or other advice, and readers are encouraged to seek appropriate counsel from their advisors before making executive compensation decisions. 2024 Guide to REIT Executive Compensation | 2
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