The Compensation Committee also serves as the administrator of the Company’s 2004 Stock Plan.
The Company’s executive compensation programs and philosophy are described in greater detail under the section entitled “Compensation Discussion and Analysis.”
The Board of Directors, upon the unanimous recommendation of the Nominating and Corporate Governance Committee, has determined that all current members of the Compensation Committee are “independent directors,” as defined in the NYSE listing standards.
Independence and Composition. The Exchange Act and the NYSE listing standards do not require that the Executive Committee consist of any independent directors. Messrs. Caraci and B. Francis Saul II currently are the serving members of the Executive Committee, with Mr. B. Francis Saul II serving as Chairman.
Meetings. The Executive Committee did not meet during the year ended December 31, 2019.2021.
Ethical Conduct Policy and Senior Financial Officer Code of Ethics
The directors, officers and employees of the Company are governed by the Company’s Ethical Conduct Policy. The Company’s Chairman and Chief Executive Officer, and President, ExecutiveSenior Vice President-Chief Financial Officer, and Treasurer, Senior Vice President-Chief Accounting Officer and Treasurer, and Senior Vice President-Controller are also governed by the Code of Ethics for senior financial officers. The Ethical Conduct Policy and the Code of Ethics are available both on the Company’s website at www.saulcenters.com and in print free of charge to any stockholder who requests them. Amendments to, or waivers from, a provision of the Ethical Conduct Policy or the Code of Ethics will be posted to the Company’s website within four business days following the date of the amendment or waiver.
Compensation Committee Interlocks and Insider Participation
Mr. Philip D. Caraci was an officer of the Company from 1993 until his retirement in 2003. None of the other current members of our Compensation Committee serves,serve, or has in the past served, as one of the Company'sCompany’s employees or officers. Two of the Company's executive officers, Mr. B. Francis Saul II and Ms. Christine N. Kearns, and one of the Company's directors, Mr. H. Gregory Platts, currently serve, and in the past year have served, as members of the Compensation Committee of Chevy Chase Trust Company, where Mr. B. Francis Saul II is Chairman and Ms. Kearns is thea Vice Chairman of the Board of Directors.
Compensation of Directors
Directors of the Company are currently paid an annual retainer of $20,000 and a fee of $1,200 for each Board or Committee meeting attended and are annually awarded 200 shares of the Company’s Common Stock. The shares are issued on the date of each annual meeting of stockholders to each director serving on the Board of Directors as of the record date of such meeting. In 2004, the Compensation Committee approved the automatic grant of options to purchase 2,500 shares of Common Stock to each of the directors of the Company, as of the date of each annual meeting of the Company’s stockholders beginning with the 2004 annual meeting. The options are immediately exercisable with an exercise price determined using the closing market price of the Company’s Common Stock on the date of award.exercisable. In 2019,2021, each director was awarded options to purchase 2,500 shares of Common Stock at an exercise price of $55.71$43.89 per share, representing the fair market value of the Company’s Common Stock on May 3, 2019.7, 2021. Directors from outside the Washington, D.C. area also are reimbursed for out-of-pocket expenses in connection with their attendance at meetings.
In addition, directors may elect to participate in the Deferred Compensation Plan discussed below. For the period March 1, 20192021 through March 1, 2020, 6,0092022, 7,294 shares were credited to the directors’ deferred fee accounts and 1,0091,132 and 7,090 shares of Common Stock were issued.
issued to current and retired directors, respectively.
Director Compensation Table for 20192021
The following table sets forth the compensation received by directors, other than directors who are named executive officers, for the year ended December 31, 2019.2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash | | Stock Awards | | Option Awards | | Non-Equity Incentive Plan Compensation | | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | | All Other Compensation | | Total |
| | | (1) | | (2) | | (3) | | | | | | | | |
| Philip D. Caraci | | $ | 53,700 | | | $ | 8,778 | | | $ | 15,800 | | | $ | — | | | $ | — | | | $ | — | | | $ | 78,278 | |
| John E. Chapoton | | 28,400 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 52,978 | |
| George P. Clancy, Jr. | | 45,400 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 69,978 | |
| | | | | | | | | | | | | | | |
| J. Page Lansdale | | 26,000 | | | 8,778 | | | 15,800 | | | — | | | — | | | 100,000 | | (4) | | 150,578 | |
| Willoughby B. Laycock | | 26,000 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 50,578 | |
| | | | | | | | | | | | | | | |
| H. Gregory Platts | | 45,300 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 69,878 | |
| Earl A. Powell III | | 27,200 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 51,778 | |
| Andrew M. Saul II | | 26,000 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 50,578 | |
| Mark Sullivan III | | 28,400 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 52,978 | |
| John R. Whitmore | | 26,000 | | | 8,778 | | | 15,800 | | | — | | | — | | | — | | | 50,578 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Name | | Fees Earned or Paid in Cash | | Stock Awards | | Option Awards | | Non-Equity Incentive Plan Compensation | | Change in Pension Value and Non-Qualified Deferred Compensation Earnings | | All Other Compensation | | Total |
| | | (1) | | (2) | | (3) | | | | | | | | |
| Philip D. Caraci | | $ | 68,100 |
| | $ | 11,142 |
| | $ | 20,600 |
| | $ | — |
| | $ | — |
| | $ | 50,000 |
| (4 | ) | $ | 149,842 |
|
| John E. Chapoton | | 32,000 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 63,742 |
|
| George P. Clancy, Jr. | | 65,800 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 97,542 |
|
| Willoughby B. Laycock | | 22,200 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 53,942 |
|
| H. Gregory Platts | | 47,700 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 79,442 |
|
| Earl A. Powell III | | 32,000 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 63,742 |
|
| Andrew M. Saul II | | 28,400 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 60,142 |
|
| Mark Sullivan III | | 32,000 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 63,742 |
|
| John R. Whitmore | | 28,400 |
| | 11,142 |
| | 20,600 |
| | — |
| | — |
| | — |
| | 60,142 |
|
(1)During 2021, fees earned of $125,800 by five Directors were deferred into shares of Common Stock pursuant to the Directors Plan described below. All other fees were paid in cash. | |
(1) | With the exception of fees earned or paid in cash of $265,000 to seven Directors in 2019, all fees were deferred into shares of Common Stock pursuant to the Directors Plan described below. |
| |
(2) | The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. 200 shares of common stock were awarded, without restriction, on May 3, 2019 at a value of $55.71 per share. |
| |
(3) | The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. 2,500 non-qualified stock options were awarded on May 3, 2019 valued at $8.24 per option. See note 10 to the consolidated financial statements in the Company's 2019 annual report to stockholders for the assumptions used to value these awards. |
| |
(4) | Upon his resignation as President in March 2003, Mr. Caraci entered into a consulting arrangement with the Company. The arrangement provided that Mr. Caraci shall receive $100,000 per annum for consulting services provided to the Company. The arrangement was terminated on July 1, 2019. |
(2)The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. 200 shares of Common Stock were awarded, without restriction, on May 7, 2021 at a value of $43.89 per share.
(3)The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. 2,500 non-qualified stock options were awarded on May 7, 2021 valued at $6.32 per option. See note 10 to the consolidated financial statements in the Company's 2021 annual report to stockholders for the assumptions used to value these awards.
(4)Upon his retirement, Mr. Lansdale entered into a consulting arrangement with the Company. The arrangement, which is terminable by either party at any time, provides that Mr. Lansdale shall receive $100,000 per annum for consulting services provided to the Company.
Deferred Compensation Plan
A Deferred Compensation and Stock Plan for Directors, which we refer to as the Directors Plan, was established by the Company, for the benefit of its directors and their beneficiaries. Before the beginning of any calendar year, a director may elect to defer all or part of his or her director’s fees to be earned in that year and the following years. At the option of the director, the fees will be deferred into a cash account, a share account or both. If the director elects to defer fees into the share account, fees earned during a calendar quarter are aggregated and divided by the Common Stock’s closing market price on the first trading day of the following quarter to determine the number of shares to be allocated to the director. When the director is eligible to receive payments from the deferred fee accounts, amounts credited to the cash account shall be paid in cash and amounts credited to the share account shall be paid by the delivery by the Company of certificates representing a like number of shares of Common Stock. For financial reporting purposes, the deferred fee shares are included in the calculation of outstanding Common Stock; however, Directorsdirectors are not eligible to vote the shares until they are issued. Through March 1, 2020, of the 570,000 shares the Company has authorized under the Directors Plan,2022, including shares issued to and reserved for future issuance to former directors of the Company, 249,471265,449 shares have been issued and 110,814115,578 shares are reserved for issuance and have been credited to the directors’ deferred fee accounts. Of the 110,814115,578 shares reserved for future issuance, 81,82897,237 shares have been credited to the accounts of current directors and 28,98618,341 shares have been credited to the accounts of retired directors.
The following table sets forth fees deferred into shares of Common Stock by current directors under the Directors Plan.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Balance March 1, 2021 | | Shares Credited to Stock Deferred Fee Account in 2021/22 | | Shares Issued By Operation of Plan Terms | | Balance March 1, 2022 |
Philip D. Caraci | | 28,456 | | | 1,422 | | | — | | | 29,878 | |
John E. Chapoton | | 18,007 | | | 1,537 | | | — | | | 19,544 | |
George P. Clancy, Jr. | | 5,929 | | | 1,243 | | | 1,132 | | | 6,040 | |
| | | | | | | | |
J. Page Lansdale | | — | | | — | | | — | | | — | |
Willoughby B. Laycock | | 1,462 | | | 652 | | | — | | | 2,114 | |
| | | | | | | | |
H. Gregory Platts | | — | | | — | | | — | | | — | |
Earl A. Powell III | | — | | | — | | | — | | | — | |
Andrew M. Saul II | | — | | | — | | | — | | | — | |
B. Francis Saul II | | 37,221 | | | 2,440 | | | — | | | 39,661 | |
Mark Sullivan III | | — | | | — | | | — | | | — | |
John R. Whitmore | | — | | | — | | | — | | | — | |
Totals | | 91,075 | | | 7,294 | | | 1,132 | | | 97,237 | |
|
| | | | | | | | | | | | |
Name | | Balance March 1, 2019 | | Shares Credited to Stock Deferred Fee Account in 2019/20 | | Shares Issued By Operation of Plan Terms | | Balance March 1, 2020 |
Philip D. Caraci | | 25,366 |
| | 1,060 |
| | — |
| | 26,426 |
|
John E. Chapoton | | 14,676 |
| | 1,157 |
| | — |
| | 15,833 |
|
George P. Clancy, Jr. | | 4,881 |
| | 1,415 |
| | 1,009 |
| | 5,287 |
|
J. Page Lansdale | | — |
| | — |
| | — |
| | — |
|
Willoughby B. Laycock | | — |
| | 519 |
| | — |
| | 519 |
|
H. Gregory Platts | | — |
| | — |
| | — |
| | — |
|
Earl A. Powell III | | — |
| | — |
| | — |
| | — |
|
Andrew M. Saul II | | — |
| | — |
| | — |
| | — |
|
B. Francis Saul II | | 31,905 |
| | 1,858 |
| | — |
| | 33,763 |
|
Mark Sullivan III | | — |
| | — |
| | — |
| | — |
|
John R. Whitmore | | — |
| | — |
| | — |
| | — |
|
Totals | | 76,828 |
| | 6,009 |
| | 1,009 |
| | 81,828 |
|
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG") INITIATIVES
The Company is dedicated to responsible environmental, social and community stewardship as an essential part of our mission to build a successful business and to shape the communities we serve throughout our portfolio, in addition to our workplace community. Below are some highlights of our commitment to ESG principles.
|
| |
Environmental |
LEED Certification - Since 2010, all of the Mixed-use properties we developed, comprising approximately 1.25 million square feet of space, are Leadership in Energy and Environment Design (“LEED”) certified. |
Environmental Practices and Impact - We launched an energy reduction program in 2016 at select properties by embracing LED lighting technology and smart lighting control systems for parking lots, common areas, walkways, signage and façade lighting. New developments are designed with this reduced energy consumption criteria in mind where applicable, and many of our existing properties are in the process of being converted to this energy reducing technology. |
Transit-Centric Development - Our recently-developed Mixed-use properties, as well as the majority of our development pipeline, have primarily residential use and are located within walking distance of Metro RailWashington Metropolitan Area Transit Authority (Metro) rail stations. |
Trip Reduction Program - We participate in the Metro Smart Benefits Program to encourage the use of public transit by our employees. We offer bike storage and electric vehicle charging stations at our corporate headquarters to encourage low emission transport. |
Water Conservation - We have installed sub-meter monitoring systems at several properties to be alerted of excessive use due to leaks. |
Climate Preparedness - We manage the impact of natural disasters, including flooding and severe storms, by monitoring vulnerabilities and responding as necessary. |
Social |
Diverse Hiring Practices - The Company has a commitment to equal employment opportunities and does not discriminate against any person based on race, color, religion, gender, national origin, age, disability, sexual orientation or gender preference. |
Community Involvement - The Company received the Outstanding Donor Award in 2018 from the County Executive of Montgomery County, Maryland for the significant contributions to support student learning, strong families and healthy communities through our partnership with Linkages to Learning. |
Employee Wellness and Satisfaction - The Company encourages employee wellness in every aspect of life, including physical fitness, mental well-being and social connectedness. |
Center for Professional Development - We annually hold several in-house training programs that focus on communication, self-awareness, delegation, feedback, accountability, team dynamics and other skills that provide our employees with personal growth opportunities. |
Employee Education - We support the continuing education of our employees through (a) reimbursement of the cost of seeking undergraduate and graduate degrees at colleges and universities and (b) reimbursement of costs related to seminars, conferences and workshops. |
Leadership, Exposure and Development (“LEAD”) - We recentlypreviously launched a program that we call LEAD which enhances our other training and education programs by providing our talented employees with the tools necessary to effectively lead and manage. |
Industry Growth - We manage an internship program to support the development of future real estate professionals. |
Governance |
Oversight and Commitment - Our Board of Directors has an active role in overseeing the management of risks applicable to our business and is committed to strong corporate governance. Our governance framework is designed to promote the long-term interests of our stockholders. |
Ethics and Integrity - We are a dynamic organization, where the highest level of professionalism is at the core of all our interactions. We have adopted a robust Code of Ethics and Ethical Conduct Policy, which are reviewed annually and are publicly available on our website. |
EXECUTIVE OFFICERS WHO ARE NOT DIRECTORS
The following list sets forth the name, age, position with the Company, present principal occupation or employment and material occupations, positions, offices or employment during the past 10 years of each executive officer who is not a director of the Company. With the exception of Joel A. Friedman and Christine N. Kearns, who joined the Company in 2009 and 2014, respectively, each listed individual has held an office with the Company since its inception in June 1993.
|
| | | | | | | | | | | | | |
Name | | Age | | Position and Background |
D. Todd Pearson | | 41 | | President and Chief Operating Officer since May 2021. Executive Vice President - Real Estate from October 2019 to April 2021. Senior Vice President - Acquisitions and Development from 2017 to September 2019. Vice President - Acquisitions and Development from 2011 to 2016. Vice President - Director of Internal Audit 2010. Director of Internal Audit from 2005 to 2009. |
Christine N. Kearns | | 5961 | | Executive Vice President - Chief Legal and Administrative Officer since April 2014. Ms. Kearns is thea Vice Chairman of the Board of Directors of Chevy Chase Trust Company and ASB Capital Management, LLC. Ms. Kearns is also Executive Vice President-Chief Legal and Administrative Officer of B. F. Saul Company and B. F. Saul Real Estate Investment Trust, a member of the Board of Directors of B. F. Saul Company and a Trustee of the B. F. Saul Real Estate Investment Trust. Prior to joining the Company, Ms. Kearns was a partner with the law firm Pillsbury Winthrop Shaw Pittman LLP for 20 years, most recently serving as the Managing Partner of the firm's Washington, DCD.C. office. |
Christopher H. Netter | | 6567 | | Executive Vice President - Leasing since October 2019. Senior Vice President - Leasing from 1998 to 2019. Vice President - Leasing of the Company from 1993 to 1998. Vice President of the B. F. Saul Company and B. F. Saul Property Company and Assistant Vice President of the B. F. Saul Real Estate Investment Trust from 1987 to 1993. |
Scott V. Schneider | | 62 | | Executive Vice President - Chief Financial Officer and Treasurer since October 2019. Senior Vice President - Chief Financial Officer, Treasurer and Secretary from 1998 to 2019. Vice President - Chief Financial Officer, Treasurer and Secretary of the Company from 1993 to 1998. Vice President of the B. F. Saul Company and B. F. Saul Property Company and Assistant Vice President of the B. F. Saul Real Estate Investment Trust from 1985 to 1993.
|
John F. Collich | | 6062 | | Senior Vice President - Chief Acquisitions and Development Officer since May 2019. Senior Vice President - Acquisitions and Development from 2011 to 2019. Senior Vice President - Retail Development from 2000 to 2011. Vice President - Retail Development of the Company from 1993 to 2000. Vice President of the B. F. Saul Company and B. F. Saul Property Company in 1993. |
Joel A. Friedman | | 6264 | | Senior Vice President - Chief Accounting Officer and Treasurer since April 2021. Senior Vice President - Chief Accounting Officer from September 2009.2009 to March 2021. Vice President, Treasurer and Chief Accounting Officer of the B. F. Saul Real Estate Investment Trust, Senior Vice President and Chief Accounting Officer of the B. F. Saul Company and B. F. Saul Property Company since September 2009. Chief Financial Officer of ASB Capital Management, LLC and Chevy Chase Trust Company. Previously served in a variety of accounting positions at Chevy Chase Bank, F.S.B.F. S. B., from June 1983 to July 2009, at which time he served as Senior Vice President and Controller, the bank'sbank’s chief accounting officer. |
Charles W. Sherren, Jr. | | 66 | | |
Carlos L. Heard | | 46 | | Senior Vice President - ManagementChief Financial Officer since 2000.April 2021. Senior Vice President, - Management of the Company from 1993 to 2000. Vice PresidentAcquisitions and Development of the B. F. Saul Company and B. F. Saul Property Company and AssistantAffiliates from 2019 to March 2021. Vice President, ofAcquisitions and Development from 2013 to 2018. Vice President, Acquisitions and Finance from 2010 to 2012. Prior to joining the B. F. Saul Company and Affiliates, Mr. Heard was Group Vice President of Capital Markets and Commercial Real Estate Investment Trustat Chevy Chase Bank, F. S. B., where he worked from 19811998 to 1993.2009. |
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
References in this Compensation Discussion and Analysis to “we,” “our,” “ours” and “us” refers to Saul Centers, Inc.
Compensation Philosophy. Our goal is to design and administer a compensation program to (i) attract and retain qualified officers, (ii) reward officers for superior performance in achieving our business objectives and enhancing stockholder
value and (iii) provide incentives for the creation of long-term stockholder value. Historically, the key elements of executive compensation have been base salary, annual bonuses and incentive stock options. The Compensation Committee reviews and approves our policies and practices regarding executive compensation, including (a) base salary levels, (b) annual bonuses, and (c) if applicable, long-term incentives, including awards of stock options. The Compensation Committee’s decisions regarding executive compensation are subjective and are based to a significant extent on the discretion and recommendations of the Company’s Chairman and Chief Executive Officer and President.Officer. The Compensation Committee does not attempt to establish a fixed numerical relationship between base salary, bonus and long-term incentives as components of overall compensation. We select and implement the elements of compensation for their ability to help us achieve the objectives of our compensation program, and this program is not based on any unique or preferential financial accounting or tax treatment.
Base Salary and Bonus Awards. As part of its review of base salary and bonus compensation, the Compensation Committee uses its discretion to make a subjective evaluation of the overall performance of each of the Company’s Chief Executive Officer, Chief Financial Officer and each of its three other most highly compensated executive officers (“named executive officersofficers”) based on its consideration of a variety of factors, including each individual’s tenure, level and scope of responsibility and performance and contribution to the achievement of our long-term goals, as well as factors relating to our overall performance and management’s recommendations regarding compensation. The Compensation Committee does not objectively measure any of the individual factors, nor does it make a determination of the actual performance of each of the named executive officers relating to each factor. No one factor is given precedence in the Compensation Committee’s analysis, although the Compensation Committee does take into account the recommendations of the Company’s Chairman and Chief Executive Officer and President.Officer. The Compensation Committee also considers whether the executive officers spend a portion of their time managing other related entities. A portion of the salary of each of Mr. Pearson and Mr. Collich is billed to one or more affiliated entities based on services rendered to those entities.
Most Recent Stockholder Advisory Vote on Executive Compensation. At our 2017 annual meeting of stockholders, our stockholders recommended, and our Board subsequently adopted, a triennial stockholder vote on executive compensation. In May 2017,April 2020, our stockholders cast an advisory vote on the Company’s executive compensation decisions and policies as disclosed in the proxy statement issued by the Company in March 2017.2020. Approximately 98.5 percent90.7% of the shares voted on the matter were cast in support of the compensation decisions and policies as disclosed. The Compensation Committee considered this result an endorsement of the Company’s compensation policies and practices and determined that it was not necessary at this time to make any material changes to those policies and practices in response to the advisory vote. In addition, at our 2017 annual meeting of stockholders, our stockholders recommended a triennial stockholder vote on executive compensation. The Board agreed withWe will hold the recommendation and, consequently, we are holding anext triennial stockholder advisory vote on the compensation of our named executive officers at this year'sthe 2023 annual meeting of stockholders.
Base salary determinations are generally made by the Compensation Committee annually effective as of May 1 of each year. During 2020, as a result of the changes in business environment due to COVID-19, we made temporary changes to reduce overhead expenses, including executive officer salary reductions, which were effective on May 1, 2020 and restored effective October 1, 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Base Salary Beginning May 1, 2021 | | Base Salary Beginning October 1, 2020 | | Base Salary Beginning May 1, 2020 | | Percentage Change (May 2020 to May 2021) |
B. Francis Saul II | | | | | | | | |
| Chairman and Chief Executive Officer | | $ | 125,000 | | | $ | 125,000 | | | $ | — | | | N/A |
D. Todd Pearson (1) | | | | | | | | |
| President and Chief Operating Officer | | 650,000 | | | 535,000 | | | 454,750 | | | 43 | % |
Christopher H. Netter | | | | | | | | |
| Executive Vice President - Leasing | | 610,000 | | | 592,000 | | | 503,200 | | | 21 | % |
John F. Collich | | | | | | | | |
| Senior Vice President - Chief Acquisitions and Development Officer | | 471,240 | | | 462,000 | | | 415,800 | | | 13 | % |
Carlos L. Heard (2) | | | | | | | | |
| Senior Vice President - Chief Financial Officer | | 375,000 | | | — | | | — | | | N/A |
Scott V. Schneider (3) | | | | | | | | |
| Former Executive Vice President - Chief Financial Officer | | — | | | 617,500 | | | 524,875 | | | N/A |
| | | | | | | | |
| | | | | | | | | |
| | | | | | | | |
| | | | | | | | | |
|
| | | | | | | | | | | | |
Name | | Base Salary Beginning May 1, 2019 | | Base Salary Beginning May 1, 2018 | | Percentage Change |
B. Francis Saul II | | | | | | |
| Chairman, Chief Executive Officer and President | | $ | 125,000 |
| (1) | $ | 125,000 |
| | — | % |
J. Page Lansdale | | | | | |
|
|
| President and Chief Operating Officer | | 750,000 |
| (2) | 700,000 |
| | 7.1 | % |
Scott V. Schneider | | | | | | |
| Executive Vice President - Chief Financial Officer | | 517,500 |
| (3) | 474,000 |
| | 9.2 | % |
Christopher H. Netter | | | | | |
|
|
| Executive Vice President - Leasing | | 492,500 |
| (4) | 474,000 |
| | 3.9 | % |
John F. Collich | | | | | | |
| Senior Vice President-Chief Acquisitions and Development Officer | | 462,000 |
| | 445,000 |
| | 3.8 | % |
Christine N. Kearns | | | | | | |
| Executive Vice President - Chief Legal and Administrative Officer | | 400,000 |
| | 375,000 |
| | 6.7 | % |
| |
(1) | Mr. B. Francis Saul II was appointed President of the Company effective October 1, 2019. |
| |
(2) | Mr. Lansdale retired from the Company effective September 30, 2019. |
(1) Mr. Pearson was appointed President and Chief Operating Officer effective May 7, 2021.
(2) Mr. Heard was appointed Senior Vice President - Chief Financial Officer effective April 1, 2021.
(3) Mr. Schneider retired effective March 31, 2021. Upon his retirement, Mr. Schneider entered into a three year consulting arrangement with the Company. The arrangement provides that Mr. Schneider shall receive $200,000 the first year, $150,000 the second year and $100,000 the third year for consulting services provided to the Company.
| |
(3) | Mr. Schneider was appointed Executive Vice President - Chief Financial Officer effective October 1, 2019, at which time his annual base salary was increased to $617,500. |
| |
(4) | Mr. Netter was appointed Executive Vice President - Leasing effective October 1, 2019, at which time his annual base salary was increased to $592,000. |
Bonus determinations are made by the Compensation Committee annually and are typically awarded in December of each year. Bonus awards are typically calculated as a percentage of the employee’s base salary and are determined on the basis of the recommendation of the Chairman and Chief Executive Officer and President and other subjective factors rather than the achievement by the executive officer of any pre-determined performance target. In December 2019,2021, the Compensation Committee approved bonuses for the named executive officers in amounts of either 15% or 20% of the named executive officer’s base salary as provided below.
| | Name | | Base Salary | | Bonus | | Bonus as a Percentage of Base Salary | Name | | Base Salary | | Bonus | | Bonus as a Percentage of Base Salary |
B. Francis Saul II | | $ | 125,000 |
| | $ | 25,000 |
| | 20% | B. Francis Saul II | | $ | 125,000 | | | $ | 25,000 | | | 20% |
J. Page Lansdale | | 750,000 |
| | 112,500 |
| | 15% | |
Scott V. Schneider | | 617,500 |
| | 92,625 |
| | 15% | |
D. Todd Pearson | | D. Todd Pearson | | 650,000 | | | 97,500 | | | 15% |
Christopher H. Netter | | 592,000 |
| | 88,800 |
| | 15% | Christopher H. Netter | | 610,000 | | | 91,500 | | | 15% |
John F. Collich | | 462,000 |
| | 69,300 |
| | 15% | John F. Collich | | 471,240 | | | 70,686 | | | 15% |
Christine N. Kearns | | 400,000 |
| | 60,000 |
| | 15% | |
Carlos L. Heard | | Carlos L. Heard | | 375,000 | | | 56,250 | | | 15% |
|
The base salary and bonus paid to the Chairman and Chief Executive Officer and President was less than the compensation paid to other executive officers because the Compensation Committee also considered that the Chairman and Chief Executive Officer and President devotes a portion of his time to managing other related entities. We believe that the current base salary levels and annual bonus awards of the Company’s officers take into account the unique talents and skills of its officers.
Stock Option Grants. While not a key element in compensation, the Compensation Committee believes that the prudent use of equity incentives aligns the interests of officers with those of stockholders and promotes long-term stockholder value. The 2004 Stock Plan provides for grants of nonqualified and incentive stock options to employees, including officers. The Compensation Committee administers the plan and determines the participants who receive stock option grants, the terms of the grants, the schedule for exercisability or nonforfeitability, and the time and conditions for expiration of the grants. The Compensation Committee will continue to look at the total compensation package for each officer and the policies underlying
the Company’s long-term compensation goals when granting awards under the plan. At present, the Board of Directors does not prescribe any stock ownership guidelines for our executive officers.
We do not time, nor have we ever timed, the grant of stock options in coordination with the release of material non-public information, and we have never back-dated any awards of stock options. We expect that awards to executive officers in the future will be made at regularly scheduled Compensation Committee meetings. For corporate and accounting measurement purposes, the date of grant of an award to our executive officers under the 2004 Stock Plan is the date the Compensation Committee approves the award or such later date as the Compensation Committee specifies. In addition,The exercise price per share is determined by the fair market value for an award is established ascompensation committee and must be greater than or equal to the closing market price of the stockCommon Stock on the date of grant.award.
The Compensation Committee granted 232,500223,000 options to officers of the Company during 2019,2021, of which 115,00080,000 options were granted to named executive officers.
Benefits and Other Perquisites. We provide benefits to our executive officers under the B. F. Saul Company Employees 401(k) Retirement Plan (the “Tax Qualified Plan”). Our executive officers are eligible to receive, on the same basis as other employees, employer matching contributions under the Tax Qualified Plan. This allows our executive officers to save for their retirement on a tax-deferred basis through the Section 401(k) savings feature of the plan, with the Company-funded portion of these benefits based on matching the contributions of the executive officers. Additional information on these Company-funded retirement contributions can be found in the Summary Compensation Table below. We also provide benefits to our executive officers under the B. F. Saul Company Supplemental Executive Retirement Plan (the “SERP”). The SERP, which is not available to all employees, allows the executive officers and other highly compensated employees to receive benefits they would have received under the Tax Qualified Plans, but for statutory limits. We do not sponsor a defined benefit pension plan for our executive officers or any other employees. Matching contributions under the Tax Qualified Plan and the SERP made to the named executive officers for the years ended December 31, 2019, 20182021, 2020 and 20172019 are shown in the “Other
Compensation” column of the Summary Compensation Table below. Additional information on the SERP can be found in the Nonqualified Deferred Compensation Table below.
Our executive officers are also eligible to participate, on similar terms as employees who meet applicable eligibility criteria, in the other employee benefit and welfare plans that the Company maintains, subject to any legal limitations on the amounts that may be contributed or the benefits that may be payable under such plans.
We do not consider perquisites to be a principal component of our executive officers’ compensation. We believe that our executive officer benefit and perquisite programs are reasonable and competitive with benefits and perquisites provided to executive officers of other REITs, and are necessary to sustain a fully competitive executive compensation program.
Compensation Risks
The Compensation Committee believes that risks arising from our policies and practices for compensating employees are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee endeavors to put in place for management incentives that cultivate a level of risk-taking behavior consistent with our business strategies. Because the bonus and other variable components of compensation are determined in large part on subjective considerations rather than formulae or other objective criteria, the Compensation Committee believes that the Company’s compensation policies do not contribute significantly to inappropriate risk-taking.
Summary Compensation Table
The following Summary Compensation Table sets forth the compensation paid to or earned by the named executive officers, which includes the Company’s Chief Executive Officer, Chief Financial Officer and each of its three other most highly compensated executive officers who were serving as of December 31, 2019 (“named executive officers”)2021 for, or with respect to, the years ended December 31, 2019, 20182021, 2020 and 2017.2019.
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Name and Principal Position | | Year | | Salary | | Bonus | | Stock Awards | | Option Awards | | Non-Equity Incentive Plan Compen-sation | | Change in Pension Value and Non-Qualified Deferred Compen-sation Earnings | | All Other Compen-sation | | Total |
| | | | | | | | | | (1) | | | | (2) | | (7) | | |
B. Francis Saul II (3) | | 2019 | | $ | 125,000 |
| | $ | 25,000 |
| | — |
| | — |
| | — |
| | $ | 49,473 |
| | $ | 69,142 |
| | $ | 268,615 |
|
Chairman, Chief Executive Officer and President | | 2018 | | 125,000 |
| | 25,000 |
| | — |
| | — |
| | — |
| | 49,588 |
| | 60,292 |
| | 259,880 |
|
| 2017 | | 125,000 |
| | 25,000 |
| | — |
| | — |
| | — |
| | 39,555 |
| | 61,932 |
| | 251,487 |
|
J. Page Lansdale (4) | | 2019 | | 732,692 |
| | 112,500 |
| | — |
| | $ | 224,400 |
| | — |
| | 25,884 |
| | 110,853 |
| | 1,206,329 |
|
President and Chief Operating Officer | | 2018 | | 682,692 |
| | 105,000 |
| | — |
| | 181,200 |
| | — |
| | 22,386 |
| | 98,554 |
| | 1,089,832 |
|
| 2017 | | 632,692 |
| | 97,500 |
| | — |
| | 193,800 |
| | — |
| | 14,779 |
| | 96,744 |
| | 1,035,515 |
|
Scott V. Schneider (5) | | 2019 | | 525,519 |
| | 92,625 |
| | — |
| | 149,600 |
| | — |
| | 29,020 |
| | 51,153 |
| | 847,917 |
|
Executive Vice President- Chief Financial Officer | | 2018 | | 467,942 |
| | 71,100 |
| | — |
| | 120,800 |
| | — |
| | 28,174 |
| | 46,407 |
| | 734,423 |
|
| 2017 | | 450,442 |
| | 68,475 |
| | — |
| | 129,200 |
| | — |
| | 21,719 |
| | 46,075 |
| | 715,911 |
|
Christopher H. Netter (6) | | 2019 | | 509,057 |
| | 88,800 |
| | — |
| | 149,600 |
| | — |
| | 30,258 |
| | 49,935 |
| | 827,650 |
|
Executive Vice President-Leasing | | 2018 | | 467,942 |
| | 71,100 |
| | — |
| | 120,800 |
| | — |
| | 29,457 |
| | 46,407 |
| | 735,706 |
|
| 2017 | | 450,442 |
| | 68,475 |
| | — |
| | 129,200 |
| | — |
| | 22,760 |
| | 46,075 |
| | 716,952 |
|
John F. Collich | | 2019 | | 456,115 |
| | 69,300 |
| | — |
| | 149,600 |
| | — |
| | 21,478 |
| | 45,589 |
| | 742,082 |
|
Senior Vice President-Chief Acquisitions and Development Officer | | 2018 | | 439,462 |
| | 66,750 |
| | — |
| | 120,800 |
| | — |
| | 20,710 |
| | 44,437 |
| | 692,159 |
|
| 2017 | | 423,808 |
| | 64,350 |
| | — |
| | 129,200 |
| | — |
| | 15,805 |
| | 44,229 |
| | 677,392 |
|
| | | | | | | | | | | | | | | | | |
Christine N. Kearns | | 2019 | | 391,346 |
| | 60,000 |
| | — |
| | 187,000 |
| | — |
| | 2,505 |
| | 27,081 |
| | 667,932 |
|
Executive Vice President-Chief Legal and Administrative Officer | | 2018 | | 366,346 |
| | 56,250 |
| | — |
| | 151,000 |
| | — |
| | 1,806 |
| | 25,356 |
| | 600,758 |
|
| 2017 | | 341,346 |
| | 52,500 |
| | — |
| | 161,500 |
| | — |
| | 890 |
| | 23,631 |
| | 579,867 |
|
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Name and Principal Position | | Year | | Salary | | Bonus | | Stock Awards | | Option Awards | | Non-Equity Incentive Plan Compen-sation | | Change in Pension Value and Non-Qualified Deferred Compen-sation Earnings | | All Other Compen-sation | | Total |
| | | | | | | | | | (1) | | | | (2) | | (9) | | |
B. Francis Saul II | | 2021 | | $ | 125,000 | | | $ | 25,000 | | | $ | — | | | $ | — | | | $ | — | | | $ | 38,887 | | | $ | 59,578 | | | $ | 248,465 | |
Chairman and Chief Executive Officer | | 2020 | | 76,923 | | | 25,000 | | | — | | | — | | | — | | | 54,729 | | | 37,254 | | | 193,906 | |
| 2019 | | 125,000 | | | 25,000 | | | — | | | — | | | — | | | 49,473 | | | 69,142 | | | 268,615 | |
D. Todd Pearson (3) (4) | | 2021 | | 614,615 | | | 97,500 | | | — | | | 149,000 | | | — | | | 1,748 | | | 57,283 | | | 920,146 | |
President and Chief Operating Officer | | 2020 | | 521,625 | | | 80,250 | | | — | | | 13,800 | | | — | | | 1,054 | | | 41,843 | | | 658,572 | |
| 2019 | | 123,462 | | | 80,250 | | | — | | | 56,100 | | | — | | | 77 | | | 15,738 | | | 275,627 | |
Christopher H. Netter (5) | | 2021 | | 604,462 | | | 91,500 | | | — | | | 149,000 | | | — | | | 25,518 | | | 56,314 | | | 926,794 | |
Executive Vice President-Leasing | | 2020 | | 577,200 | | | 88,800 | | | — | | | 18,400 | | | — | | | 34,677 | | | 44,802 | | | 763,879 | |
| 2019 | | 509,057 | | | 88,800 | | | — | | | 149,600 | | | — | | | 30,258 | | | 49,935 | | | 827,650 | |
John F. Collich (6) | | 2021 | | 468,397 | | | 70,686 | | | — | | | 119,200 | | | — | | | 18,025 | | | 46,901 | | | 723,209 | |
Senior Vice President-Chief Acquisitions and Development Officer | | 2020 | | 460,223 | | | 69,300 | | | — | | | 18,400 | | | — | | | 24,640 | | | 38,443 | | | 611,006 | |
| 2019 | | 456,115 | | | 69,300 | | | — | | | 149,600 | | | — | | | 21,478 | | | 45,589 | | | 742,082 | |
Carlos L. Heard (7) | | 2021 | | 284,135 | | | 56,250 | | | — | | | 59,600 | | | — | | | 35 | | | 31,340 | | | 431,360 | |
Senior Vice President - Chief Financial Officer | | 2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| 2019 | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Scott V. Schneider (8) | | 2021 | | 211,973 | | | — | | | — | | | — | | | — | | | 24,364 | | | 166,357 | | | 402,694 | |
Former Executive Vice President- Chief Financial Officer | | 2020 | | 602,063 | | | 92,625 | | | — | | | 18,400 | | | — | | | 33,436 | | | 46,127 | | | 792,651 | |
| 2019 | | 525,519 | | | 92,625 | | | — | | | 149,600 | | | — | | | 29,020 | | | 51,153 | | | 847,917 | |
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(1) The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See note 10 to the consolidated financial statements in the Company's 2021 annual report to stockholders for the assumptions used to value these awards.
(2) Earnings are calculated at the last day of each month and credited to each account at an amount equal to the product of (i) one-twelfth of the current “yield to worst” reported for the U. S. Corporate High Yield Bond Index and (ii) the sum of (a) the deferred compensation account balance as of the last day of the preceding month and (b) amounts deferred for the current month.
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(1) | The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See note 10 to the consolidated financial statements in the Company's 2019 annual report to shareholders for the assumptions used to value these awards. |
| |
(2) | Earnings are calculated at the last day of each month and credited to each account at an amount equal to the product of (i) one-twelfth of the current “yield to worst” reported for the U. S. Corporate High Yield Bond Index and (ii) the sum of (a) the deferred compensation account balance as of the last day of the preceding month and (b) amounts deferred for the current month. |
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(3) | Mr. B. Francis Saul II was appointed President of the Company effective October 1, 2019. |
| |
(4) | Mr. Lansdale retired from the Company effective September 30, 2019. |
| |
(5) | Mr. Schneider was appointed Executive Vice President - Chief Financial Officer effective October 1, 2019, at which time his annual base salary was increased to $617,500. |
| |
(6) | Mr. Netter was appointed Executive Vice President - Leasing effective October 1, 2019, at which time his annual base salary was increased to $592,000. |
| |
(7) | The following table sets forth the components of “All Other Compensation” paid to the named executive officers for 2019, 2018 and 2017. |
(3) Mr. Pearson was appointed Executive Vice President - Real Estate effective October 1, 2019, at which time his annual base salary was increased to $535,000. Mr. Pearson was appointed President and Chief Operating Officer effective May 7, 2021. His annual base salary was increased to $650,000 effective May 1, 2021.
(4) Approximately 14%, 50% and 50% of total compensation in the table above for 2021, 2020 and 2019, respectively, related to services provided by Mr. Pearson to affiliates of Saul Centers, for which Saul Centers was reimbursed pursuant to the terms of the shared services agreement. See "Certain Relationships and Transactions" on page 27.
(5) Mr. Netter was appointed Executive Vice President - Leasing effective October 1, 2019, at which time his annual base salary was increased to $592,000.
(6) Approximately 51%, 51% and 50% of total compensation in the table above for 2021, 2020 and 2019, respectively, related to services provided by Mr. Collich to affiliates of Saul Centers, for which Saul Centers was reimbursed pursuant to the terms of the shared services agreement. See "Certain Relationships and Transactions" on page 27.
(7) Mr. Heard was appointed Senior Vice President - Chief Financial Officer effective April 1, 2021.
(8) Mr. Schneider was appointed Executive Vice President - Chief Financial Officer effective October 1, 2019, at which time his annual base salary was increased to $617,500. Mr. Schneider retired effective March 31, 2021. Upon his retirement, Mr. Schneider entered into a three year consulting arrangement with the Company. The arrangement provides that Mr. Schneider shall receive $200,000 the first year, $150,000 the second year and $100,000 the third year for consulting services provided to the Company.
(9) The following table sets forth the components of “All Other Compensation” paid to the named executive officers for 2021, 2020 and 2019.
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All Other Compensation | | | | | | | | | | | | |
Name | | Year | | Director's Compensation (a) | | Tax-Qualified Plan Contribution (b) | | SERP Contribution (c) | | Auto Allowance | | Group Term Life Insurance | | Total |
B. Francis Saul II | | 2019 | | $ | 60,142 |
| | — |
| | $ | 9,000 |
| (d) | — |
| | — |
| | $ | 69,142 |
|
| | 2018 | | 51,292 |
| | — |
| | 9,000 |
| (d) | — |
| | — |
| | 60,292 |
|
| | 2017 | | 52,932 |
| | — |
| | 9,000 |
| (d) | — |
| | — |
| | 61,932 |
|
J. Page Lansdale | | 2019 | | 60,142 |
| | — |
| | 50,711 |
| (d) | — |
| | — |
| | 110,853 |
|
| | 2018 | | 51,292 |
| | — |
| | 47,262 |
| (d) | — |
| | — |
| | 98,554 |
|
| | 2017 | | 52,932 |
| | — |
| | 43,812 |
| (d) | — |
| | — |
| | 96,744 |
|
Scott V. Schneider | | 2019 | | — |
| | $ | 16,800 |
| | 20,289 |
| | $ | 12,600 |
| | $ | 1,464 |
| | 51,153 |
|
| | 2018 | | — |
| | 16,500 |
| | 15,843 |
| | 12,600 |
| | 1,464 |
| | 46,407 |
|
| | 2017 | | — |
| | 16,200 |
| | 14,935 |
| | 12,600 |
| | 2,340 |
| | 46,075 |
|
Christopher H. Netter | | 2019 | | — |
| | 16,800 |
| | 19,071 |
| | 12,600 |
| | 1,464 |
| | 49,935 |
|
| | 2018 | | — |
| | 16,500 |
| | 15,843 |
| | 12,600 |
| | 1,464 |
| | 46,407 |
|
| | 2017 | | — |
| | 16,200 |
| | 14,935 |
| | 12,600 |
| | 2,340 |
| | 46,075 |
|
John F. Collich | | 2019 | | — |
| | 16,800 |
| | 14,725 |
| | 12,600 |
| | 1,464 |
| | 45,589 |
|
| | 2018 | | — |
| | 16,500 |
| | 13,873 |
| | 12,600 |
| | 1,464 |
| | 44,437 |
|
| | 2017 | | — |
| | 16,200 |
| | 13,089 |
| | 12,600 |
| | 2,340 |
| | 44,229 |
|
Christine N. Kearns | | 2019 | | — |
| | 16,800 |
| | 10,281 |
| | — |
| | — |
| | 27,081 |
|
| | 2018 | | — |
| | 16,500 |
| | 8,856 |
| | — |
| | — |
| | 25,356 |
|
| | 2017 | | — |
| | 16,200 |
| | 7,431 |
| | — |
| | — |
| | 23,631 |
|
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(a) | Director’s compensation for Mr. B. Francis Saul II for 2019, 2018 and 2017 includes fees of $28,400, $26,000, and $26,000, respectively, common stock awards of 200 shares in each year valued at $11,142, $9,892, and $11,882, respectively, and non-qualified stock option awards of 2,500 options in each year valued at $8.24, $6.16, and $6.02, per option, respectively. Director's compensation for Mr. Lansdale for 2019, 2018 and 2017 includes fees of $28,400, $26,000 and $26,000, respectively, a common stock award of 200 shares valued at $11,142, $9,892, and $11,882, respectively, and a non-qualified stock option award of 2,500 options in each year valued at $8.24, $6.16, and $6.02, per option, respectively. The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See note 10 to the consolidated financial statements in the Company’s 2019 annual report to stockholders for the assumptions used to value these awards. |
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(b) | Value of employer's contribution for 2019, 2018 and 2017 represents 6% of eligible compensation up to $280,000 for 2019, $275,000 for 2018, and $270,000 for 2017. |
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(c) | Value of employer's contribution for 2019, 2018 and 2017 represents 6% of eligible compensation in excess of $280,000 for 2019, $275,000 for 2018, and $270,000 for 2017. |
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(d) | Because Messrs. B. Francis Saul II and Lansdale receive compensation from other affiliated companies, all Saul Centers retirement plan contributions are made to the SERP. |
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All Other Compensation | | | | | | | | | | | | | | |
Name | | Year | | Director's Compensation (a) | | Tax-Qualified Plan Contribution (b) | | SERP Contribution (c) | | Auto Allowance | | Group Term Life Insurance | | Consulting | | Total |
B. Francis Saul II | | 2021 | | $ | 50,578 | | | $ | — | | | $ | 9,000 | | (d) | $ | — | | | $ | — | | | $ | — | | | $ | 59,578 | |
| | 2020 | | 32,504 | | | — | | | 4,750 | | (d) | — | | | — | | | — | | | 37,254 | |
| | 2019 | | 60,142 | | | — | | | 9,000 | | (d) | — | | | — | | | — | | | 69,142 | |
D. Todd Pearson | | 2021 | | — | | | 17,400 | | | 25,327 | | | 12,600 | | | 1,956 | | | — | | | 57,283 | |
| | 2020 | | — | | | 15,104 | | | 12,675 | | | 12,600 | | | 1,464 | | | — | | | 41,843 | |
| | 2019 | | — | | | 2,169 | | | 10,053 | | | 3,150 | | | 366 | | | — | | | 15,738 | |
Christopher H. Netter | | 2021 | | — | | | 17,400 | | | 24,358 | | | 12,600 | | | 1,956 | | | — | | | 56,314 | |
| | 2020 | | — | | | 15,498 | | | 15,240 | | | 12,600 | | | 1,464 | | | — | | | 44,802 | |
| | 2019 | | — | | | 16,800 | | | 19,071 | | | 12,600 | | | 1,464 | | | — | | | 49,935 | |
John F. Collich | | 2021 | | — | | | 17,400 | | | 14,945 | | | 12,600 | | | 1,956 | | | — | | | 46,901 | |
| | 2020 | | — | | | 14,598 | | | 9,781 | | | 12,600 | | | 1,464 | | | — | | | 38,443 | |
| | 2019 | | — | | | 16,800 | | | 14,725 | | | 12,600 | | | 1,464 | | | — | | | 45,589 | |
Carlos L. Heard | | 2021 | | — | | | 13,765 | | | 6,658 | | | 9,450 | | | 1,467 | | | — | | | 31,340 | |
| | 2020 | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
| | 2019 | | — | | | — | | | — | | | — | | | — | | | — | | | — | |
Scott V. Schneider | | 2021 | | — | | | 12,718 | | | — | | | 3,150 | | | 489 | | | 150,000 | | | 166,357 | |
| | 2020 | | — | | | 15,675 | | | 16,388 | | | 12,600 | | | 1,464 | | | — | | | 46,127 | |
| | 2019 | | — | | | 16,800 | | | 20,289 | | | 12,600 | | | 1,464 | | | — | | | 51,153 | |
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(a)Director’s compensation for Mr. B. Francis Saul II for 2021, 2020 and 2019 includes fees of $26,000, $24,800 and $28,400, respectively, Common Stock awards of 200 shares in each year valued at $8,778, $5,604 and $11,142, respectively, and non-qualified stock option awards of 2,500 options in each year valued at $6.32, $0.84 and $8.24, per option, respectively. The amounts in this column include the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. See note 10 to the consolidated financial statements in the Company’s 2021 annual report to stockholders for the assumptions used to value these awards.
(b)Value of employer's contribution for 2021, 2020 and 2019 represents up to 6% of eligible compensation up to $290,000 for 2021, $285,000 for 2020 and $280,000 for 2019.
(c)Value of employer's contribution for 2021, 2020 and 2019 represents up to 6% of eligible compensation in excess of $290,000 for 2021, $285,000 for 2020 and $280,000 for 2019.
(d)Because Mr. B. Francis Saul II receives compensation from other affiliated companies, all Saul Centers' retirement plan contributions are made to the SERP.
Grants of Plan-Based Awards
The following plan-based awards were awarded to named executive officers pursuant to our 2004 Stock Plan during 2019.2021.
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Name | | Grant Date | | Number of Shares of Common Stock Awarded | | Grant Date Fair Value | | All Other Option Awards: Number of Shares of Common Stock Underlying Options | | Exercise Price of Option Awards | | Grant Date Fair Value |
B. Francis Saul II (1) | | 5/7/2021 | | 200 | | | $ | 8,778 | | | 2,500 | | | $ | 43.89 | | | $ | 15,800 | |
D. Todd Pearson (2) | | 5/7/2021 | | — | | | — | | | 25,000 | | | 43.89 | | | 149,000 | |
Christopher H. Netter (2) | | 5/7/2021 | | — | | | — | | | 25,000 | | | 43.89 | | | 149,000 | |
John F. Collich (2) | | 5/7/2021 | | — | | | — | | | 20,000 | | | 43.89 | | | 119,200 | |
Carlos L. Heard (2) | | 5/7/2021 | | — | | | — | | | 10,000 | | | 43.89 | | | 59,600 | |
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Name | | Grant Date | | Number of Shares of Common Stock Awarded | | Grant Date Fair Value | | All Other Option Awards: Number of Shares of Common Stock Underlying Options | | Exercise Price of Option Awards | | Grant Date Fair Value |
B. Francis Saul II (1) | | 5/3/2019 | | 200 |
| | $ | 11,142 |
| | 2,500 |
| | $ | 55.71 |
| | $ | 20,600 |
|
J. Page Lansdale (2) | | 5/3/2019 | | 200 |
| | 11,142 |
| | 32,500 |
| | 55.71 |
| | 245,000 |
|
Scott V. Schneider (3) | | 5/3/2019 | | — |
| | — |
| | 20,000 |
| | 55.71 |
| | 149,600 |
|
Christopher H. Netter (3) | | 5/3/2019 | | — |
| | — |
| | 20,000 |
| | 55.71 |
| | 149,600 |
|
John F. Collich (3) | | 5/3/2019 | | — |
| | — |
| | 20,000 |
| | 55.71 |
| | 149,600 |
|
Christine N. Kearns (3) | | 5/3/2019 | | — |
| | — |
| | 25,000 |
| | 55.71 |
| | 187,000 |
|
| |
(1) | Awards granted to Mr. B. Francis Saul II in respect of his service as director. The grant of 2,500 options vested immediately upon grant. |
| |
(2) | Mr. Lansdale received 2,500 options, which vested immediately, as compensation for his service as a director. Mr. Lansdale also received 30,000 options for his service as an officer, which vest 25% on each of the first four anniversaries of the grant date. |
(3) Awards granted to Mr. B. Francis Saul II in respect of his service as director. The grant of 2,500 options vested immediately upon grant.
(2) Options awarded to officers vest 25% on each of the first four anniversaries of the grant date.
Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information with respect to option awards outstanding as of December 31, 2019,2021, for each of the named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Number of Securities Underlying Unexercised Options | | Exercise | | Expiration |
Name | | Grant Date | | Exercisable | | Unexercisable | | Price | | Date |
B. Francis Saul II | | 5/8/2015 | | 2,500 | | (1) | — | | | $ | 51.07 | | | 5/7/2025 |
| | 5/6/2016 | | 2,500 | | (1) | — | | | 57.74 | | | 5/5/2026 |
| | 5/5/2017 | | 2,500 | | (1) | — | | | 59.41 | | | 5/4/2027 |
| | 5/11/2018 | | 2,500 | | (1) | — | | | 49.46 | | | 5/10/2028 |
| | 5/3/2019 | | 2,500 | | (1) | — | | | 55.71 | | | 5/2/2029 |
| | 4/24/2020 | | 2,500 | | (1) | — | | | 50.00 | | | 4/23/2030 |
| | 5/7/2021 | | 2,500 | | (1) | — | | | 43.89 | | | 5/6/2031 |
| | | | | | | | | | |
D. Todd Pearson | | 5/5/2017 | | 5,000 | | (2) | — | | | 59.41 | | | 5/4/2027 |
| | 5/11/2018 | | 3,750 | | (2) | 1,250 | | (2) | 49.46 | | | 5/10/2028 |
| | 5/3/2019 | | 3,750 | | (2) | 3,750 | | (2) | 55.71 | | | 5/2/2029 |
| | 4/24/2020 | | 3,750 | | (2) | 11,250 | | (2) | 50.00 | | | 4/23/2030 |
| | 5/7/2021 | | — | | | 25,000 | | (2) | 43.89 | | | 5/6/2031 |
| | | | | | | | | | |
Christopher H. Netter | | 5/9/2014 | | 15,000 | | (2) | — | | | 47.03 | | | 5/8/2024 |
| | 5/8/2015 | | 20,000 | | (2) | — | | | 51.07 | | | 5/7/2025 |
| | 5/6/2016 | | 20,000 | | (2) | — | | | 57.74 | | | 5/5/2026 |
| | 5/5/2017 | | 20,000 | | (2) | — | | | 59.41 | | | 5/4/2027 |
| | 5/11/2018 | | 15,000 | | (2) | 5,000 | | (2) | 49.46 | | | 5/10/2028 |
| | 5/3/2019 | | 10,000 | | (2) | 10,000 | | (2) | 55.71 | | | 5/2/2029 |
| | 4/24/2020 | | 5,000 | | (2) | 15,000 | | (2) | 50.00 | | | 4/23/2030 |
| | 5/07/2021 | | — | | | 25,000 | | (2) | 43.89 | | | 5/06/2031 |
| | | | | | | | | | |
John F. Collich | | 5/10/2013 | | 5,000 | | (2) | — | | | 44.42 | | | 5/9/2023 |
| | 5/9/2014 | | 10,000 | | (2) | — | | | 47.03 | | | 5/8/2024 |
| | 5/8/2015 | | 20,000 | | (2) | — | | | 51.07 | | | 5/7/2025 |
| | 5/6/2016 | | 20,000 | | (2) | — | | | 57.74 | | | 5/5/2026 |
| | 5/5/2017 | | 20,000 | | (2) | — | | | 59.41 | | | 5/4/2027 |
| | 5/11/2018 | | 15,000 | | (2) | 5,000 | | (2) | 49.46 | | | 5/10/2028 |
| | 5/3/2019 | | 10,000 | | (2) | 10,000 | | (2) | 55.71 | | | 5/2/2029 |
| | 4/24/2020 | | 5,000 | | (2) | 15,000 | | (2) | 50.00 | | | 4/23/2030 |
| | 5/7/2021 | | — | | | 20,000 | | (2) | 43.89 | | | 5/6/2031 |
| | | | | | | | | | |
Carlos L. Heard | | 5/7/2021 | | — | | | 10,000 | | (2) | | 43.89 | | | 5/6/2031 |
| | | | | | | | | | |
Scott V. Schneider | | 5/9/2014 | | 20,000 | | (2) | — | | | 47.03 | | | 5/8/2024 |
| | 5/8/2015 | | 20,000 | | (2) | — | | | 51.07 | | | 5/7/2025 |
| | 5/6/2016 | | 20,000 | | (2) | — | | | 57.74 | | | 5/5/2026 |
| | 5/5/2017 | | 20,000 | | (2) | — | | | 59.41 | | | 5/4/2027 |
| | 5/11/2018 | | 15,000 | | (2) | 5,000 | | (2) | 49.46 | | | 5/10/2028 |
| | 5/3/2019 | | 10,000 | | (2) | 10,000 | | (2) | 55.71 | | | 5/2/2029 |
| | 4/24/2020 | | 5,000 | | (2) | 15,000 | | (2) | 50.00 | | | 4/23/2030 |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
(1) - Director option awards vest immediately upon grant. | | | | |
(2) - Executive officer option awards vest 25% on each of the first four anniversaries of the grant date. | | |
|
| | | | | | | | | | | | | |
| | | | Number of Securities Underlying Unexercised Options | | Exercise | | Expiration |
Name | | Grant Date | | Exercisable | | Unexercisable | | Price | | Date |
B. Francis Saul II | | 5/8/2015 | | 2,500 |
| (1) | — |
| | 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 2,500 |
| (1) | — |
| | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 2,500 |
| (1) | — |
| | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 2,500 |
| (1) | — |
| | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | 2,500 |
| (1) | — |
| | 55.71 |
| | 5/2/2029 |
| | | | | | | | | | |
J. Page Lansdale | | 5/4/2012 | | 2,500 |
| (2) | — |
|
| 39.29 |
| | 5/3/2022 |
| | 5/10/2013 | | 4,000 |
| (2) | — |
|
| 44.42 |
| | 5/9/2023 |
| | 5/9/2014 | | 30,000 |
| (2) | — |
|
| 47.03 |
| | 5/8/2024 |
| | 5/8/2015 | | 2,500 |
| (1) | — |
|
| 51.07 |
| | 5/7/2025 |
| | 5/8/2015 | | 30,000 |
| (2) | — |
|
| 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 2,500 |
| (1) | — |
|
| 57.74 |
| | 5/5/2026 |
| | 5/6/2016 | | 22,500 |
| (2) | 7,500 |
| (2) | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 2,500 |
| (1) | — |
| | 59.41 |
| | 5/4/2027 |
| | 5/5/2017 | | 15,000 |
| (2) | 15,000 |
| (2) | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 2,500 |
| (1) | — |
| | 49.46 |
| | 5/10/2028 |
| | 5/11/2018 | | 7,500 |
| (2) | 22,500 |
| (2) | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | 2,500 |
| (1) | — |
|
| 55.71 |
| | 5/2/2029 |
| | 5/3/2019 | | — |
|
| 30,000 |
| (2) | 55.71 |
| | 5/2/2029 |
| | | | | | | | | | |
Scott V. Schneider | | 5/10/2013 | | 3,500 |
| (2) | — |
| | 44.42 |
| | 5/9/2023 |
| | 5/9/2014 | | 20,000 |
| (2) | — |
| | 47.03 |
| | 5/8/2024 |
| | 5/8/2015 | | 20,000 |
| (2) | — |
| | 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 15,000 |
| (2) | 5,000 |
| (2) | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 10,000 |
| (2) | 10,000 |
| (2) | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 5,000 |
| (2) | 15,000 |
| (2) | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | — |
| | 20,000 |
| (2) | 55.71 |
| | 5/2/2029 |
|
| | | | | | | | | | | | | |
| | | | Number of Securities Underlying Unexercised Options | | Exercise | | Expiration |
Name | | Grant Date | | Exercisable | | Unexercisable | | Price | | Date |
Christopher H. Netter | | 5/9/2014 | | 15,000 |
| (2) | — |
|
| 47.03 |
| | 5/8/2024 |
| | 5/8/2015 | | 20,000 |
| (2) | — |
|
| 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 15,000 |
| (2) | 5,000 |
| (2) | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 10,000 |
| (2) | 10,000 |
| (2) | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 5,000 |
| (2) | 15,000 |
| (2) | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | — |
|
| 20,000 |
| (2) | 55.71 |
| | 5/2/2029 |
| | | | | | | | | | |
John F. Collich | | 5/4/2012 | | 2,545 |
| (2) | — |
| | 39.29 |
| | 5/3/2022 |
| | 5/10/2013 | | 5,000 |
| (2) | — |
| | 44.42 |
| | 5/9/2023 |
| | 5/9/2014 | | 10,000 |
| (2) | — |
| | 47.03 |
| | 5/8/2024 |
| | 5/8/2015 | | 20,000 |
| (2) | — |
| | 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 15,000 |
| (2) | 5,000 |
| (2) | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 10,000 |
| (2) | 10,000 |
| (2) | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 5,000 |
|
| 15,000 |
| (2) | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | — |
|
| 20,000 |
| (2) | 55.71 |
| | 5/2/2029 |
| | | | | | | | | | |
Christine N. Kearns | | 5/8/2015 | | 20,000 |
| (2) | — |
| | 51.07 |
| | 5/7/2025 |
| | 5/6/2016 | | 18,750 |
| (2) | 6,250 |
| (2) | 57.74 |
| | 5/5/2026 |
| | 5/5/2017 | | 12,500 |
| (2) | 12,500 |
| (2) | 59.41 |
| | 5/4/2027 |
| | 5/11/2018 | | 6,250 |
| (2) | 18,750 |
| (2) | 49.46 |
| | 5/10/2028 |
| | 5/3/2019 | | — |
| | 25,000 |
| (2) | 55.71 |
| | 5/2/2029 |
| | | | | | | | | | |
(1) - Director option awards vest immediately upon grant. | | | | |
(2) - Executive officer option awards vest 25% on each of the first four anniversaries of the grant date. | | |
Option Exercises and Stock Vested
The following table sets forth information concerning stock options exercised by the named executive officers during the year ended December 31, 2019.2021.
| | | | Option Awards | | Stock Awards | | Option Awards | |
Name | | Number of Shares Acquired on Exercise | | Value Realized on Exercise (1) | | Number of Shares Acquired on Vesting | | Value Realized on Vesting | Name | | Number of Shares Acquired on Exercise | | Value Realized on Exercise (1) | |
B. Francis Saul II | | — |
| | $ | — |
| | N/A | | — |
| B. Francis Saul II | | — | | | $ | — | | |
J. Page Lansdale | | — |
| | — |
| | N/A | | — |
| |
Scott V. Schneider | | 5,000 |
| | 65,280 |
| | N/A | | — |
| |
D. Todd Pearson | | D. Todd Pearson | | — | | | — | | |
Christopher H. Netter | | 5,000 |
| | 50,300 |
| | N/A | | — |
| Christopher H. Netter | | — | | | — | | |
John F. Collich | | — |
| | — |
| | N/A | | — |
| John F. Collich | | 2,545 | | | 31,991 | |
Christine N. Kearns | | — |
| | — |
| | N/A | | — |
| |
(1) The amounts in this column represent the difference between the market value of the shares of common stock acquired on exercise of the options based on the closing price of the common stock on the date of the exercise and the option exercise price. | |
Carlos L. Heard | | Carlos L. Heard | | — | | | — | | |
Scott V. Schneider | | Scott V. Schneider | | 3,500 | | | 33,005 | | |
| (1) The amounts in this column represent the difference between the market value of the shares of Common Stock acquired on exercise of the options based on the closing price of the Common Stock on the date of the exercise and the option exercise price. | | (1) The amounts in this column represent the difference between the market value of the shares of Common Stock acquired on exercise of the options based on the closing price of the Common Stock on the date of the exercise and the option exercise price. |
Equity Compensation Plan Information
The following table provides information as of December 31, 20192021 regarding equity compensation plans approved by the stockholders and equity compensation plans that were not approved by the stockholders.
| | | | | | | | | | | | | | | | | | | | | | | |
Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | Weighted average exercise price of outstanding options, warrants and rights (b) | | Number of securities remaining available for future issuance (excluding securities reflected in column (a)) (c) |
Equity compensation plans approved by security holders (1) | | 1,601,250 | | | $51.73 | | | 397,112 | |
Equity compensation plans not approved by security holders | — | | | — | | | — | |
| Total | | 1,601,250 | | | $51.73 | | | 397,112 | |
|
| | | | | | | | | | | |
Plan Category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | | Weighted average exercise price of outstanding options, warrants and rights (b) | | Number of securities remaining available for future issuance (excluding securities reflected in column (a)) (c) |
Equity compensation plans approved by security holders (1) | | 1,309,614 |
| |
| $53.38 |
| | 789,558 |
|
Equity compensation plans not approved by security holders | — |
| | — |
| | — |
|
| Total | | 1,309,614 |
| |
| $53.38 |
| | 789,558 |
|
| |
(1) | Consists entirely of common shares authorized for issuance under the Company’s 2004 Stock Plan. |
(1)Consists entirely of common shares authorized for issuance under the Company’s 2004 Stock Plan.
Nonqualified Deferred Compensation
The following table sets forth information concerning the participation by the named executive officers in the SERP during 2019.2021. See “Compensation Discussion and Analysis - Benefits and Other Perquisites” on page 1617 for a description of the SERP.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Executive Contributions in 2021 (1) | | Saul Centers, Inc. Contributions in 2021 (2) | | 2021 Earnings (3) (4) | | Aggregate Withdrawals / Distributions | | Aggregate Balance at December 31, 2021 |
B. Francis Saul II | | $ | 3,000 | | | $ | 9,000 | | | $ | 38,887 | | | — | | | $ | 968,830 | |
D. Todd Pearson | | 8,442 | | | 25,327 | | | 1,748 | | | — | | | 69,066 | |
Christopher H. Netter | 8,119 | | | 24,358 | | | 25,518 | | | — | | | 656,023 | |
John F. Collich | | 4,982 | | | 14,945 | | | 18,025 | | | — | | | 462,299 | |
Carlos L. Heard | | 2,219 | | | 6,658 | | | 35 | | | — | | | 8,912 | |
Scott V. Schneider | | — | | | — | | | 24,364 | | | — | | | 602,852 | |
| | | | | | | | | | |
(1)Executives contribute up to a maximum of 2% of eligible compensation.
(2)Saul Centers contributes up to three times the executive officer's retirement plan contribution.
(3)Earnings are calculated at the last day of each month and credited to each account at an amount equal to the product of (i) one-twelfth of the current “yield to worst” reported for the U. S. Corporate High Yield Bond Index and (ii) the sum of (a) the deferred compensation account balance as of the last day of the preceding month and (b) amounts deferred for the current month.
(4)No amounts in the 2021 Earnings column represent salary or bonus that was reported in the summary compensation tables in prior years.
|
| | | | | | | | | | | | | | | | | | | |
Name | | Executive Contributions in 2019 (1) | | Saul Centers, Inc. Contributions in 2019 (2) | | 2019 Earnings (3) (4) | | Aggregate Withdrawals / Distributions | | Aggregate Balance at December 31, 2019 |
B. Francis Saul II | | $ | 3,000 |
| | $ | 9,000 |
| | $ | 49,473 |
| | — |
| | $ | 856,426 |
|
J. Page Lansdale | | 16,904 |
| | 50,711 |
| | 25,884 |
| | — |
| | 481,496 |
|
Scott V. Schneider | | 6,763 |
| | 20,289 |
| | 29,020 |
| | — |
| | 520,470 |
|
Christopher H. Netter | 6,357 |
| | 19,071 |
| | 30,258 |
| | — |
| | 540,491 |
|
John F. Collich | | 4,908 |
| | 14,725 |
| | 21,478 |
| | — |
| | 385,036 |
|
Christine N. Kearns | | 3,427 |
| | 10,281 |
| | 2,505 |
| | — |
| | 54,865 |
|
| |
(1) | Executives contribute up to a maximum of 2% of eligible compensation. |
| |
(2) | Saul Centers' contribution is three times the executive officer's retirement plan contribution. |
| |
(3) | Earnings are calculated at the last day of each month and credited to each account at an amount equal to the product of (i) one-twelfth of the current “yield to worst” reported for the U. S. Corporate High Yield Bond Index and (ii) the sum of (a) the deferred compensation account balance as of the last day of the preceding month and (b) amounts deferred for the current month. |
| |
(4) | No amounts in the 2019 Earnings column represent salary or bonus that was reported in the summary compensation tables in prior years. |
CEO Pay Ratio
In accordance with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, set forth below is information about the relationship of the annual total compensation of Mr. B. Francis Saul II, our Chief Executive Officer, and the annual total compensation of our employees.
The 20192021 annual total compensation of the Company’s Chief Executive Officer was $268,615.$248,465. The 20192021 annual total compensation of the median employee (excluding the Chief Executive Officer) was $75,761.$64,717. The resulting ratio of our Chief Executive Officer’s total compensation to the total compensation of our median employee for 20192021 was 3.5:3.8:1.
We determined our median employee based on our employee population as of December 31, 2019.2021. To determine the median employee from our employee population, we compared the total cash compensation of all such employees who provided services to the Company in 2019.2021. The compensation for employees who commenced employment with us mid-year, and who therefore, were employed by the Company for less than a full year during 2019,2021, was annualized. Compensation provided to part-time employees was not annualized.
Certain of our employees are full-time employees of our non-subsidiary affiliates who spend a portion of their time working on Saul CentersCenters' matters, and certain full-time Saul CentersCenters' employees spend a portion of their time working for our non-subsidiary affiliates on non-Saul CentersCenters' matters. The salaries and benefits of these shared employees of these affiliates
are charged to Saul Centers and the affiliates based on the percentage of time spent working for each organization. See “Certain Relationships and Transactions” on page 27. For purposes of determining our median employee, we treated these shared employees as part-time employees of Saul Centers based on the portion of their compensation attributed to Saul Centers.
After identifying the median employee, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers, as set forth in the 20192021 Summary Compensation Table in this proxy statement, to compute the ratio of the Chief Executive Officer’s total pay to that of the median employee.
Executive Employment Contracts and Potential Payments upon Termination or Change in Control
The Company does not have employment or severance agreements with any of its executive officers. Therefore, the Company does not have a predetermined termination or change of control compensation plan in place for any of its named executive officers.
COMPENSATION COMMITTEE REPORT
The information contained in the report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company incorporates it by specific reference.
The Compensation Committee has reviewed the Compensation Discussion and Analysis and discussed that analysis with management. Based on its review and discussions with management, the Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for 20192021 and the Company’s 20202022 Proxy Statement. This report is provided by the following independent directors, who comprise the Committee.
|
| |
Members of the Compensation Committee |
H. Gregory Platts, Chairman |
Philip D. Caraci |
March 12, 20209, 2022
AUDIT COMMITTEE REPORT
The information contained in the report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information be incorporated by reference into any previous or future filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except to the extent that the Company incorporates it by specific reference.
Duties, Powers and Responsibilities. The Audit Committee is governed by a charter, a copy of which is available both on the Company’s website at www.saulcenters.com and in print free of charge to any stockholder who requests it. The Audit Committee charter is designed to assist the Audit Committee in complying with applicable provisions of the Exchange Act and the NYSE listing standards, all of which relate to corporate governance and many of which directly or indirectly affect the duties, powers and responsibilities of the Audit Committee. Among the duties, powers and responsibilities of the Audit Committee as provided in the Audit Committee charter, the Audit Committee:
•has sole power and authority concerning the engagement and fees of the independent registered public accounting firm;
•reviews with the independent registered public accounting firm the plans and results of the audit engagement;
•pre-approves audit and permitted non-audit services provided by the independent registered public accounting firm;
•reviews the independence of the independent registered public accounting firm;
•review and approve in advance the appointment and/or replacement of the chief internal audit executive;
•reviews the adequacy of the Company’s internal controls over financial reporting; and
•reviews accounting, auditing and financial reporting matters with the Company’s independent registered public accounting firm and management.
Review and Discussion with Management and Independent Registered Public Accounting Firm. The Audit Committee has reviewed and discussed with management the Company’s audited financial statements for the year ended December 31, 2019,2021, management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent registered public accounting firm’s attestation of the effectiveness of the Company’s internal control over financial reporting.
The Audit Committee has also discussed with the independent registered public accounting firm those items required by the Public Company Accounting Oversight Board ("PCAOB") and the SEC, which includes among other things, matters related to the conduct of the audit of the Company’s financial statements. The Audit Committee has received a written disclosure letter required by the PCAOB from the independent registered public accounting firm regarding their independence, and has discussed the independent registered public accounting firm's independence with them.
20192021 and 20182020 Independent Registered Public Accounting Firm Fee Summary. During 20192021 and 2018,2020, the Company retained Deloitte to provide services in the following categories and amounts:
| | | | | | | | | | | | | | |
| | 2021 | | 2020 |
Audit Fees (1) | | $ | 725,900 | | | $ | 724,600 | |
Audit Related Fees (2) | | — | | | — | |
Tax Fees | | 80,700 | | | 77,800 | |
All Other Fees | | — | | | — | |
Total Fees | | $ | 806,600 | | | $ | 802,400 | |
| | | | |
(1) Audit fees include the audit fee, fees incurred for attestation relating to the effectiveness of internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002, and fees for comfort letters, attest services, consents and assistance with and review of documents filed with the SEC. Audit fees for 2020 include $20,000 for additional procedures related to COVID-19 billed by Deloitte and $8,000 billed by Ernst & Young, the Company's former independent auditor.
(2) Audit related fees consist of fees incurred for audit procedures related to the acquisition of operating real estate properties, fees for consultation concerning financial accounting and reporting standards, performance of agreed-upon procedures, and other audit or attest services not required by statute or regulation.
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| | 2019 | | 2018 |
Audit Fees (1) | | $ | 793,500 |
| | $ | 729,500 |
|
Audit Related Fees (2) | | — |
| | — |
|
Tax Fees | | 88,500 |
| | 64,500 |
|
All Other Fees | | — |
| | — |
|
Total Fees | | $ | 882,000 |
| | $ | 794,000 |
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(1) | Audit fees include the audit fee, fees incurred for attestation relating to the effectiveness of internal control over financial reporting required by Section 404 of the Sarbanes-Oxley Act of 2002, and fees for comfort letters, attest services, consents and assistance with and review of documents filed with the SEC. |
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(2) | Audit related fees consist of fees incurred for audit procedures related to the acquisition of operating real estate properties, fees for consultation concerning financial accounting and reporting standards, performance of agreed-upon procedures, and other audit or attest services not required by statute or regulation. |
The Audit Committee has determined that the provision of audit related services by Deloitte during 20192021 is compatible with maintaining Deloitte’s independence.
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm. Consistent with SEC policies regarding registered public accounting firm independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of the independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by the independent registered public accounting firm.
Prior to engagement of the independent registered public accounting firm for the next year’s audit, management will submit to the Audit Committee for approval an aggregate of services expected to be rendered during that year for each of the categories of services listed in the table above.
Prior to engagement, the Audit Committee pre-approves these services by category of service. The fees are budgeted, and the Audit Committee requires the independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise necessitating engagement of the independent registered public accounting firm for additional services not contemplated in the original pre-approval. In those instances, the Audit Committee requires specific pre-approval before engaging the independent registered public accounting firm. For the fiscal years ended December 31, 20192021 and 2018,2020, the Audit Committee pre-approved 100% of services described above in the captions Audit Related Fees, Tax Fees and All Other Fees. For the fiscal year ended December 31, 2019, less than 50% of the2021, all hours expended on Deloitte’s engagement to audit our financial statements were attributed to work performed by persons other than full-time, permanent employees of Deloitte.
Conclusion. Based on the review and discussions referred to above, the Audit Committee recommended to the Board of Directors that the Company’s audited financial statements be included in the Annual Report of the Company on Form 10-K for the year ended December 31, 20192021 for filing with the SEC.
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George P. Clancy, Jr., Committee Chairman |
Philip D. Caraci |
H. Gregory Platts |
February 27, 202024, 2022
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) requires the Company’s officers and directors, and persons who own more than 10% of a registered class of the Company’s equity securities, to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and the NYSE. Officers, directors and persons holding more than 10% of the outstanding shares of Common Stock are required by SEC regulations to furnish the Company with copies of all Forms 3, 4 and 5 which they file.
To the best of the Company’s knowledge, based upon copies of forms furnished to it and written representations from officers, directors and 10% beneficial holders, no persons were late in filing SEC Forms 3, 4 or 5 during the year ended December 31, 2019.
Hedging Policy
The Company has not adopted a policy that prohibits employees, officers or directors, or any of their designees, from purchasing financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds), or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the Company's securities.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Unless otherwise indicated, the following table sets forth certain information as of March 2, 2020,2022, concerning shares of Common Stock beneficially owned by all persons (if any) known by the Company to own more than 5% of the Company’s outstanding Common Stock, by each director and nominee, by each named executive officer and by all directors and executive officers as a group, according to information provided to the Company by each such person. Unless otherwise noted, each person named has sole voting and sole investment power with respect to all shares beneficially owned by such person.
For purposes of this table, “beneficially owned” includes securities redeemable or exercisable for Common Stock that are currently redeemable or exercisable or that will become redeemable or exercisable within 60 days of March 2, 2020,2022, unless otherwise indicated.As a result, the number of shares set forth below includes (i) the number of shares of Common Stock the person holds, (ii) the number of shares of Common Stock the person could receive on exercise of options for shares held by the person that are exercisable within 60 days of March 2, 2020,2022, unless otherwise indicated, (iii) fees deferred into shares of Common Stock by directors under the Directors Plan, and (iv) solely for Mr. B. Francis Saul II,the number of shares of Common Stock Mr. B. Francis Saul II, immediate family members of Mr. B. Francis Saul II, entities and trusts controlled by Mr. B. Francis Saul II and other affiliates of Mr. B. Francis Saul II (collectively, the "Saul“Saul Organization”), could receive on conversion of certain units of limited partnership interest in the Operating Partnership. Saul Holdings Limited Partnership (the “Operating Partnership”).In general, these units are convertible into shares of Common Stock on a one-for-one basis provided that, in accordance with
the Company’s Articles of Incorporation, the rights may not be exercised at any time that the Saul Organization beneficially owns, directly or indirectly, in the aggregate more than 39.9% of the value of the Company’s outstanding Common Stock and Preferred Stock (the “Ownership Limit”).
| | | | | | | | | | | | | | | |
Name of Beneficial Owner (1) | | Aggregate Number of Shares Beneficially Owned (2) | | Percent of Class (2) | |
B. Francis Saul II | | 11,317,568 | | (3) | 46.2% | |
Philip D. Caraci | | 177,747 | | (4) | * | |
John E. Chapoton | | 49,309 | | (5) | * | |
George P. Clancy, Jr. | | 37,189 | | (6) | * | |
J. Page Lansdale | | 151,400 | | (7) | * | |
Willoughby B. Laycock | | 17,280 | | (8) | * | |
H. Gregory Platts | | 27,500 | | (9) | * | |
Earl A. Powell III | | 10,800 | | (10) | * | |
Andrew M. Saul II | | 18,900 | | (11) | * | |
Mark Sullivan III | | 37,273 | | (12) | * | |
John R. Whitmore | | 15,800 | | (13) | * | |
D. Todd Pearson | | 18,280 | | (14) | * | |
Christopher H. Netter | | 107,634 | | (15) | * | |
John F. Collich | | 142,852 | | (16) | * | |
Scott V. Schneider | | 129,122 | | (17) | * | |
| | | | | |
T. Rowe Price Associates, Inc. | | 2,115,653 | | (18) | 8.9% | |
100 E. Pratt Street, Baltimore, MD 21202 | | | | | |
The Vanguard Group, Inc. | | 2,108,988 | | (19) | 8.9% | |
100 Vanguard Blvd., Malvern, PA 19355 | | | | | |
Blackrock, Inc. | | 1,989,458 | | (20) | 8.4% | |
55 East 52nd Street, New York, NY 10055 | | | | | |
Principal Real Estate Investors, LLC | | 1,310,945 | | (21) | 5.5% | |
801 Grand Avenue, Des Moines, IA 50392 | | | | | |
All directors and executive officers as a group (22 persons) | | 12,764,552 | | (22) | 50.2% | |
(1)Except as otherwise indicated, the address of each beneficial owner listed is c/o Saul Centers, Inc., 7501 Wisconsin Avenue, Suite 1500E, Bethesda, MD 20814-6522.
(2)Beneficial ownership and percent of class are calculated pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended.* indicates ownership of less than 1%.
(3)Includes 8,401,273 shares owned by B. F. Saul Real Estate Investment Trust (the “Trust”), 533,756 shares owned by Dearborn, LLC, 146,218 shares owned by SHLP Unit Acquisition Corporation, 2,774 shares owned by Avenel Executive Park, Phase II, LLC, 395,478 shares owned by B. F. Saul Property Company, 353,947 shares owned by B. F. Saul Company, 403,726 shares owned by Westminster Investing LLC, 35,062 shares owned by Van Ness Square Corporation, 15,393 shares owned by various family trusts for which Mr. B. Francis Saul II is either the sole trustee or sole custodian for a child, and 144,198 shares owned by Mr. B. Francis Saul II’s spouse (138,841 shares owned directly and 5,358 shares owned in the Saul Centers stock fund of her 401(k) plan).Mr. B. Francis Saul II disclaims beneficial ownership of 144,198 shares owned by his spouse.Pursuant to Rule 13d-3, the Common Stock described above is considered to be beneficially owned by Mr. B. Francis Saul II because he has or may be deemed to have sole or shared voting and/or investment power in respect thereof. Includes 17,500 shares subject to options held by Mr. B. Francis Saul II which are currently exercisable.Includes 123,428 shares directly held by a trust and attributed to Mr. B. Francis Saul II and his spouse's 401(k) retirement accounts due to the interests they hold in the trust. Mr. B. Francis Saul II and his spouse have investment, but not voting, power over such shares.Includes 633,300 of 9,284,658 units of the Operating Partnership owned by the Trust, Dearborn LLC, SHLP Unit Acquisition Corp., B. F. Saul Property Company, Van Ness Square Corporation, Westminster Investing LLC, and Avenel
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Name of Beneficial Owner (1) | | Aggregate Number of Shares Beneficially Owned (2) | | Percent of Class (2) |
B. Francis Saul II | | 11,421,990 |
| (3) | 46.7% |
Philip D. Caraci | | 173,895 |
| (4) | * |
John E. Chapoton | | 40,199 |
| (5) | * |
George P. Clancy, Jr. | | 28,852 |
| (6) | * |
J. Page Lansdale | | 130,000 |
| (7) | * |
Willoughby B. Laycock | | 4,920 |
| (8) | * |
H. Gregory Platts | | 22,100 |
| (9) | * |
Earl A. Powell III | | 5,400 |
| (10) | * |
Andrew M. Saul II | | 13,500 |
| (11) | * |
Mark Sullivan III | | 39,373 |
| (12) | * |
John R. Whitmore | | 10,400 |
| (13) | * |
Scott V. Schneider | | 91,501 |
| (14) | * |
Christopher H. Netter | | 67,459 |
| (15) | * |
John F. Collich | | 104,937 |
| (16) | * |
Christine N. Kearns | | 57,500 |
| (17) | * |
Blackrock, Inc. | | 2,066,983 |
| (18) | 8.9% |
55 East 52nd Street, New York, NY 10055 | | | | |
The Vanguard Group, Inc. | | 2,014,887 |
| (19) | 8.7% |
100 Vanguard Blvd., Malvern, PA 19355 | | | | |
T. Rowe Price Associates, Inc. | | 1,204,638 |
| (20) | 5.2% |
100 E. Pratt Street, Baltimore, MD 21202 | | | | |
All directors and executive officers as a group (20 persons) | | 12,608,543 |
| (21) | 50.1% |
Executive Park Phase II, LLC.The remaining units owned by these entities cannot be converted because conversion would cause the Saul Organization to exceed the Ownership Limit.
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(1) | Except as otherwise indicated, the address of each beneficial owner listed is c/o Saul Centers, Inc., 7501 Wisconsin Avenue, Suite 1500E, Bethesda, MD 20814-6522. |
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(2) | Beneficial ownership and percent of class are calculated pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as amended. (See page 15, Deferred Compensation Plan). * indicates ownership of less than 1%. |
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(3) | Includes 8,071,679 shares owned by B.F. Saul Real Estate Investment Trust (the “Trust”), 533,756 shares owned by Dearborn, LLC, 146,218 shares owned by SHLP Unit Acquisition Corporation, 2,774 shares owned by Avenel Executive Park, Phase II, LLC, 362,027 shares owned by B.F. Saul Property Company, 324,009 shares owned by B.F. Saul Company, 403,726 shares owned by Westminster Investing LLC, 35,062 shares owned by Van Ness Square Corporation, 15,393 shares owned by various family trusts for which Mr. B. Francis Saul II is either the sole trustee or sole custodian for a child, and 117,875 shares owned by Mr. B. Francis Saul II’s spouse (113,134 shares owned directly and 4,741 shares owned in the Saul Centers stock fund of her 401(k) plan). Mr. B. Francis Saul II disclaims beneficial ownership of 117,875 shares owned by his spouse. Pursuant to Rule 13d-3, the Common Stock described above is considered to be beneficially owned by Mr. B. Francis Saul II because he has or may be deemed to have sole or shared voting and/or investment power in respect thereof. Includes 12,500 shares subject to options held by Mr. B. Francis Saul II which are currently exercisable. Includes 109,201 shares directly held by a trust and attributed to Mr. B. Francis Saul II and his spouse's 401(k) retirement accounts due to the interests they hold in the trust. Mr. B. Francis Saul II and his spouse have investment, but not voting, power over such shares. Includes 1,220,000 of 7,902,017 units of the Partnership owned by the Trust, Dearborn LLC, SHLP Unit Acquisition Corp., B.F. Saul Property Company, Van Ness Square Corporation, Westminster Investing LLC, and Avenel Executive Park Phase II, LLC. The remaining units owned by these entities cannot be converted because conversion would cause the Saul Organization to exceed the Ownership Limit. |
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(4) | Includes 23,166 shares owned by Mr. Caraci’s spouse. Mr. Caraci disclaims beneficial ownership of 23,166 shares owned by his spouse. Includes 22,500 shares subject to options held by Mr. Caraci which are currently exercisable. |
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(5) | Includes 17,500 shares subject to options held by Mr. Chapoton which are currently exercisable. |
(4)Includes 23,166 shares owned by Mr. Caraci’s spouse.Mr. Caraci disclaims beneficial ownership of 23,166 shares owned by his spouse.Includes 22,500 shares subject to options held by Mr. Caraci which are currently exercisable.
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(6) | Includes 3,565 shares subject to shared voting and/or dispositive power with Mr. Clancy's spouse. Includes 20,000 shares subject to options held by Mr. Clancy which are currently exercisable. |
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(7) | Includes 124,000 shares subject to options held by Mr. Lansdale which are currently exercisable. |
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(8) | Includes 406 shares held by a trust of which Ms. Laycock is the beneficiary. Includes 295 shares owned by Ms. Laycock's spouse. Ms. Laycock disclaims beneficial ownership of the 295 shares owned by her spouse. |
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(9) | Includes 20,000 shares subject to options held by Mr. Platts which are currently exercisable. |
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(10) | Includes 5,000 shares subject to options held by Mr. Powell which are currently exercisable. |
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(11) | Includes 12,500 shares subject to options held by Mr. A. M. Saul II which are currently exercisable. |
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(12) | Includes 800 shares held by a trust of which Mr. Sullivan is a co-trustee. The beneficiaries of this trust are Mr. Sullivan’s brother and his brother’s children. Mr. Sullivan disclaims beneficial ownership of the 800 shares held by this trust. Includes 25,000 shares subject to options held by Mr. Sullivan which are currently exercisable. |
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(13) | Includes 10,000 shares subject to options held by Mr. Whitmore which are currently exercisable. |
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(14) | Includes 73,500 shares subject to options which are currently exercisable and 1,264 shares owned by Mr. Schneider’s children. Includes 7,339 shares directly held by a trust and attributed to Mr. Schneider’s 401(k) retirement account due to the interest it holds in the trust. Mr. Schneider has investment, but not voting, power over such shares. Excludes 2,000 depositary shares each representing 1/100 of one share of 6.125% Series D Cumulative Redeemable Preferred Stock, representing less than 1.0% of the Series D depositary shares issued and outstanding. |
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(15) | Includes 608 shares owned by Mr. Netter’s spouse. Mr. Netter disclaims beneficial ownership of the 608 shares owned by his spouse. Includes 1,567 shares directly held by a trust and attributed to Mr. Netter’s 401(k) retirement account due to the interest it holds in the trust. Mr. Netter has investment, but not voting, power over such shares. Includes 65,000 shares subject to options which are currently exercisable. |
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(16) | Includes 1,964 shares owned by Mr. Collich's spouse. Mr. Collich disclaims beneficial ownership of the 1,964 shares owned by his spouse. Includes 67,545 shares subject to options which are currently exercisable. |
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(17) | Includes 57,500 shares subject to options held by Mrs. Kearns which are currently exercisable. |
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(18) | This information is based on a Schedule 13G/A filed with the SEC on February 6, 2020 in which it was reported that Blackrock, Inc., in its capacity as an investment advisor, had sole power to vote, and direct the voting of 2,041,324 shares and dispose of 2,066,983 shares. BlackRock, Inc. does not have the shared power to vote or direct the vote of or the the shared power to dispose or direct the disposition of any shares. |
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(19) | This information is based on a Schedule 13G/A filed with the SEC on February 10, 2020 in which it was reported that The Vanguard Group, Inc. ("Vanguard") has sole power to vote or direct the vote, and sole power to dispose or to direct the disposition of 36,788 and 1,973,735 shares, respectively, and shared power to vote or direct the vote and shared power to dispose or direct the disposition of 18,631 and 41,152 shares, respectively. Vanguard Fiduciary Trust Company ("VFTC"), a wholly-owned subsidiary of Vanguard, is the beneficial owner of 22,521 shares as a result of its serving as investment manager of collective trust accounts and directs the voting of these shares. Vanguard Investments Australia, Ltd. ("VIA"), a wholly-owned subsidiary of Vanguard, is the beneficial owner of 32,898 shares as a result of its serving as investment manager of Australian investment offerings and directs the voting of these shares. Vanguard is an investment adviser in accordance with Section 13d-1(b)(1)(ii)(E) of the Exchange Act. |
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(20) | This information is based on a Schedule 13G/A filed with the SEC on February 14, 2020, in which it was reported that T. Rowe Price Associates, Inc. ("T. Rowe Price"), in its capacity as an investment advisor, had sole power to vote or direct the voting of 380,232 shares, and the sole power to dispose or to direct the disposition of 1,204,638 shares. T. Rowe Price does not have the shared power to vote or direct the vote of or the shared power to dispose or direct the disposition of any shares. T. Rowe Price has advised the Company that (i) these securities are owned by various individual and institutional investors which T. Rowe Price serves as an investment advisor with power to direct investments and/or sole power to vote the securities and (ii) for the purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price is deemed to be a beneficial owner of such securities; however, T. Rowe Price expressly disclaims that it is, in fact, the beneficial owner of such securities. |
(5)Includes 22,500 shares subject to options held by Mr. Chapoton which are currently exercisable.
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(21) | Excludes 2,000 depositary shares, each representing 1/100 of one share of 6.125% Series D Cumulative Redeemable Preferred Stock, representing less than 1.0% of the Series D depositary shares issued and outstanding. Includes 377,566 shares in a 401(k) retirement plan for which an officer, as chairman of the committee that is the plan's fiduciary, has shared voting power. |
(6)Includes 25,000 shares subject to options held by Mr. Clancy which are currently exercisable.
(7)Includes 145,000 shares subject to options held by Mr. Lansdale which are currently exercisable. (8)Includes 459 shares held by a trust of which Ms. Laycock is the beneficiary.Includes 562 shares owned by Ms. Laycock’s spouse.Ms. Laycock disclaims beneficial ownership of the 562 shares owned by her spouse. Includes 12,500 shares subject to options held by Ms. Laycock which are currently exercisable.
(9)Includes 25,000 shares subject to options held by Mr. Platts which are currently exercisable.
(10)Includes 10,000 shares subject to options held by Mr. Powell which are currently exercisable.
(11)Includes 17,500 shares subject to options held by Mr. A. M. Saul II which are currently exercisable.
(12)Includes 800 shares held by a trust of which Mr. Sullivan is a co-trustee.The beneficiaries of this trust are Mr. Sullivan’s brother and his brother’s children.Mr. Sullivan disclaims beneficial ownership of the 800 shares held by this trust.Includes 22,500 shares subject to options held by Mr. Sullivan which are currently exercisable.
(13)Includes 15,000 shares subject to options held by Mr. Whitmore which are currently exercisable.
(14)Includes 16,250 shares subject to options held by Mr. Pearson which are currently exercisable. Includes 2,000 shares owned by Mr. Pearson's spouse.Mr. Pearson disclaims beneficial ownership of the 2,000 shares owned by Mr. Pearson's spouse.
(15)Includes 688 shares owned by Mr. Netter’s spouse. Mr. Netter disclaims beneficial ownership of the 688 shares owned by his spouse.Includes 1,625 shares directly held by a trust and attributed to Mr. Netter’s 401(k) retirement account due to the interest it holds in the trust.Mr. Netter has investment, but not voting, power over such shares.Includes 105,000 shares subject to options which are currently exercisable.
(16)Includes 2,218 shares owned by Mr. Collich’s spouse.Mr. Collich disclaims beneficial ownership of the 2,218 shares owned by his spouse.Includes 105,000 shares subject to options which are currently exercisable.
(17)Includes 110,000 shares subject to options which are currently exercisable and 1,429 shares owned by Mr. Schneider’s children.Includes 8,295 shares directly held by a trust and attributed to Mr. Schneider’s 401(k) retirement account due to the interest it holds in the trust. Mr. Schneider has investment, but not voting, power over such shares.Excludes 2,000 depositary shares each representing 1/100 of one share of 6.125% Series D Cumulative Redeemable Preferred Stock, representing less than 1.0% of the Series D depositary shares issued and outstanding.
(18)This information is based on a Schedule 13G/A filed with the SEC on February 14, 2022, in which it was reported that T. Rowe Price Associates, Inc. (“T. Rowe Price”), in its capacity as an investment advisor, had sole power to vote or direct the voting of 769,673 shares, and the sole power to dispose or to direct the disposition of 2,115,653 shares. T. Rowe Price does not have the shared power to vote or direct the vote of or the shared power to dispose or direct the disposition of any shares. T. Rowe Price has advised the Company that (i) these securities are owned by various individual and institutional investors which T. Rowe Price serves as an investment advisor with power to direct investments and/or sole power to vote the securities and (ii) for the purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price is deemed to be a beneficial owner of such securities; however, T. Rowe Price expressly disclaims that it is, in fact, the beneficial owner of such securities.
(19)This information is based on a Schedule 13G/A filed with the SEC on February 10, 2022 in which it was reported that The Vanguard Group, Inc. (“Vanguard”) has sole power to vote or direct the vote, and sole power to dispose or to direct the disposition of zero and 2,075,399 shares, respectively, and shared power to vote or direct the vote and shared power to dispose or direct the disposition of 21,538 and 33,589 shares, respectively.Vanguard is an investment adviser in accordance with Section 13d-1(b)(1)(ii)(E) of the Exchange Act.
(20)This information is based on a Schedule 13G/A filed with the SEC on February 1, 2022 in which it was reported that Blackrock, Inc., in its capacity as an investment advisor, had sole power to vote, and direct the voting of 1,955,856
shares and dispose of 1,989,458 shares. BlackRock, Inc. does not have the shared power to vote or direct the vote of or the shared power to dispose or direct the disposition of any shares.
(21)This information is based on Schedule 13G filed with the SEC on February 15, 2022, in which it was reported that Principal Real Estate Investors, LLC, in its capacity as an investment advisor, had shared power to vote, and direct the voting of, and shared power to dispose, and direct the disposition of, 1,310,945 shares.
(22)Excludes 2,100 depositary shares, each representing 1/100 of one share of 6.125% Series D Cumulative Redeemable Preferred Stock, representing less than 1.0% of the Series D depositary shares issued and outstanding.Excludes 850 depositary shares, each representing 1/100 of one share of 6.0% Series E Cumulative Redeemable Preferred Stock, representing less than 1.0% of the Series E depositary shares issued and outstanding.Includes 388,958 shares in a 401(k) retirement plan for which an officer, as chairman of the committee that is the plan’s fiduciary, has shared voting power.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Certain relationships existing between (i) the Company and its subsidiaries, including the Operating Partnership and two subsidiary limited partnerships (the “Subsidiary Partnerships,” and collectively with the Operating Partnership, the “Partnerships”), and (ii) the Saul Organization are discussed below. Except as discussed below, the Company does not have any written policies or procedures for the review, approval or ratification of transactions with related persons.
Management of the Current Portfolio Properties. The Company and its subsidiaries entered into a Shared Services Agreement with the Saul Organization, that provides for the sharing of certain personnel and ancillary functions, such as computer hardware, software and support services, payroll services, benefits administration, in-house legal services and other direct and indirect administrative personnel. The method of determining the cost of the shared services is provided in the Shared Services Agreement and, depending on the service, is based upon head count, estimates of usage or estimates of time incurred, as applicable. The Saul Organization also subleases office space to the Company (see below for description of terms of corporate headquarters lease). The terms of all sharing arrangements, including payments related thereto, are deemed reasonable by management and are approved annually by the Audit Committee of the Company, which consists entirely of independent directors under the Company’s Articles and NYSE rules. Billings by the Saul Organization for the Company’s share of these ancillary costs and expenses, which included $806,500$799,500 of rental payments for the Company’s headquarters lease, for the year ended December 31, 2019,2021, totaled $8.4$8.0 million. At December 31, 2019, $918,7002021, $1.1 million was owed to the Saul Organization. Although the Company believes that the amounts allocated to it for such shared services represent a fair allocation between it and the Saul Organization, the Company has not obtained a third party appraisal of the value of these services.
Related Party Rents. The Company subleases space for its corporate headquarters from a member of the Saul Organization, the building of which is owned by another member of the Saul Organization. The lease commenced in March 2002 and expires in February 2022.2027. The Company and the Saul Organization entered into a Shared Services Agreementsublease whereby each party pays a portion of the total rental payments based on a percentage proportionate to the number of employees employed by each party. The Company’s rent payment for the year ended December 31, 20192021 was $806,500. The Audit Committee reviewed the terms of the sublease and believes it has terms comparable to what would have been obtained from a third party landlord, although bid proposals from independent third parties were not solicited when entering into the new corporate headquarters lease.$799,500.
Insurance Agency. B. F. Saul Insurance, Inc., a subsidiary of the B. F. Saul Company and a member of the Saul Organization, is a general insurance agency that receives commissions and counter-signature fees in connection with insurance policies related to the Company’s insurance program. Such commissions and fees amounted to approximately $399,600$397,900 for the year ended December 31, 2019.2021.
Management Personnel. The Company's Chairman, Chief Executive Officer, President and President, Executive Vice President of Real Estate,Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer and Treasurer are also officers of various entities of the Saul Organization. Although the Company believes that these officers spend sufficient management time to meet their responsibilities as ourthe other officers, the amount of management time devoted to the Company will depend on itsthe specific circumstances at any given point in time. As a result, in a given period, these officers may spend less than a majority of their management time on the Company's matters. Over extended periods of time, the Company believes that its Chairman,our Chief Executive Officer and President will spend less than a majority of his management time on Company matters, while the Company believes that its Executive Vice President of Real Estate,and Chief Operating Officer, Executive Vice President-Chief Legal and Administrative Officer and Senior Vice President-Chief Accounting Officer and Treasurer may or may not spend less than a majority of their time on the Company's matters.
Related Person Employment. Willoughby B. Laycock, an employee and member of the Board, received $286,000 in total compensation for her services as an employee of the Company, consisting of salary and bonus, for the year ended December 31, 2021. Ms. Laycock also receives other health and welfare benefits available to other employees of the Company.
Exclusivity and Right of First Refusal Agreements. The Company will acquire, develop, own and manage shopping center properties and will own and manage other commercial properties subject to certain exclusivity agreements and rights of first refusal to which it is a party. The Saul Organization will continue to develop, acquire, own and manage commercial properties and own land suitable for development as, among other things, shopping centers and other commercial properties. An agreement relating to exclusivity and the right of first refusal between the Company and the Saul Organization generally requires the Saul Organization to conduct its shopping center business exclusively through the Company and to grant the Company a right of first refusal to purchase commercial properties and development sites in certain market areas that become
available to the Saul Organization. The Saul Organization has granted the right of first refusal to the Company, acting through the Company’s independent directors, in order to minimize potential conflicts with respect to commercial properties and development sites. The Company and the Saul Organization have entered into this agreement in order to minimize conflicts with respect to shopping centers and certain of the Company’s commercial properties. The Company and a member of the Saul Organization have entered into an agreement, which expired on December 31, 2015, and was extended to December 31, 2016, to share, on a pro rata basis, third-party predevelopment costs related to the planning of the future development of adjacent sites in the Twinbrook area of Rockville, Maryland. On December 8, 2016, the Company entered into a replacement agreement with the Saul Trust which extended the expiration date to December 31, 2017 and provides for automatic twelve month renewals unless either party provides notice of termination.
Real Estate Purchases and Sales. From time to time, the Company may purchase from, or sell property to, members of the Saul Organization. In these instances, each party obtains independent third party appraisals of the property and the transactions are approved in advance by the Audit Committee, which is comprised solely of independent directors.
In May 2018,August 2016, the Company acquiredentered into an agreement (the “Ashbrook Contribution Agreement”) to acquire from the Saul Trust in exchange for 176,680 limited partnership units, approximately 13.7 acres of land located at the intersection of Ashburn Village Boulevard and Russell Branch Parkway in Ashburn, Virginia. The Company has substantially completed construction of Ashbrook Marketplace, an approximately 86,000 square foot neighborhood shopping center. A 29,000 square foot Lidl grocery store opened in November 2019,transaction closed on May 9, 2018, and the shopping center is 100% leased as of February 2020. Small shops are scheduled to begin opening for business by April 2020, with additional tenants opening throughout 2020. Upon stabilization in 2021, the Company may be obligated to issue additionalissued 176,680 limited partnership units to the Saul Trust. The Company constructed a shopping center, Ashbrook Marketplace. On June 30, 2021, the Company issued 93,674 additional limited partnership units as additional consideration to the Saul Trust in accordance with the Ashbrook Contribution Agreement, as amended.
On November 5, 2019, the Company entered into an agreement (the "Contribution Agreement"“Twinbrook Contribution Agreement”) to acquire from 1592 Rockville Pike LLC (“1592 Rockville Pike”), a wholly-owned subsidiary of the Saul Trust, approximately 6.8 acres of land and its leasehold interest in approximately 1.3 acres of contiguous land, together in each case with the improvements located thereon, located at the Twinbrook Metro Station in Rockville, Maryland (the “Contributed Property”). In in exchange for the Contributed Property, the Company will issue to the Saul Trust 1,416,071 limited partnership units in the Operating Partnership (“OP Units”) at an agreed upon value of $56.00 per OP Unit, representing an aggregate value of $79.3 million forPartnership. The Contributed Property is immediately adjacent to approximately 10.3 acres owned by the Contributed Property. DeedCompany. Title to the Contributed Property and the OP Units have beenunits were placed in escrow until certain conditions of the Twinbrook Contribution Agreement arewere satisfied.
On March 5, 2021, the Company entered into an amendment to the Twinbrook Contribution Agreement in which it and 1592 Rockville Pike agreed to release to the Company from escrow the deed and assignment of the leasehold interest of the Contributed Property, as of that date, and reimburse 1592 Rockville Pike for certain expenses pursuant to the Twinbrook Contribution Agreement. The units continued to remain in escrow pending satisfaction of the conditions of the Twinbrook Contribution Agreement, as amended. The Company acquired title to the Contributed Property earlier than originally contemplated in order to control the final aspects of predevelopment, project bidding, contractor selection and lender discussions in support of Phase I. This control will also assure the preservation of the Wegmans lease and its value to this site and, as importantly, to the Company’s adjacent holdings.
The remaining conditions of the Twinbrook Contribution Agreement were satisfied during the third quarter of 2021, and, effective October 18, 2021, 708,036 units were released from escrow to 1592 Rockville Pike. The remaining 708,035 units continue to be held in escrow and will be released to 1592 Rockville Pike on October 18, 2023.
On June 29, 2021, the third-party landlord under the ground lease contributed the fee simple interest in the land underlying the leasehold interest to the Company in exchange for 469,740 limited partnership units in the Operating Partnership, representing an aggregate value of $21.5 million. Acquisition costs were paid in cash and totaled $0.7 million.
As a result of the Company's acquisitions and the contributions described above, the Company owns the entire 18.4-acre site subject to certain dedications and easements. The full project plan for redevelopment of a major mixed-use project was finalized in 2019 and rights to develop the project extend for a thirty-year term to 2049.
A site plan allowing for development of the residential and retail portions of Twinbrook Quarter Phase I (“Phase I”), which will include an 80,000 square foot Wegmans, and approximately 25,000 square feet of adjacent small shop space, 450 apartments and a 230,000 square foot office building, was approved by the City of Rockville in August 2020. The approval of the site plan was unanimous, however, it was appealed by a local resident. The Circuit Court for Montgomery County issued a decision affirming the City's approval of the site plan and that decision is final and unappealable.
During 2021, the Company commenced development of Phase I. The office portion of Phase I will not be constructed at this time. Demolition of the existing improvements within Phase I has been completed and excavation of the site is approximately 90% complete. Below grade foundation work has begun and will continue during 2022. Initial delivery of Phase I is anticipated in late 2024. The development potential of all phases of the entire 18.4 acre Twinbrook Quarter site totals 1,865 residential units, 473,000 square feet of retail space, and 431,000 square feet of office space.
OTHER MATTERS
The Board of Directors does not know of any matters to be presented at the annual meeting other than those stated above. If any other business should come before the annual meeting, the persons named in the enclosed proxy will vote thereon as they determine to be in the best interests of the Company.
PROPOSALS FOR NEXT ANNUAL MEETING
It is presently contemplated that the 20212023 annual meeting of stockholders will be held in mid-May 2021.2023. Any stockholder proposal to be considered for inclusion in the Company’s proxy statement and form of proxy for the annual meeting of stockholders to be held in 2021,2023, including a proposal relating to director nominations, must be received at the Company’s office at 7501 Wisconsin Avenue, Suite 1500,1500E, Bethesda, Maryland 20814-6522, no later than November 13, 2020.21, 2022.
Please note that proposals must comply with all of the requirements of Rule 14a-8 under the Exchange Act, as well as the requirements of the Company’s Bylaws, which are described under the section captioned “Board of Directors - Corporate Governance - Nominating and Corporate Governance Committee - Selection of Director Nominees.” As a result, assuming that our 20212023 annual meeting of stockholders is held within 30 days of the anniversary of the Company’s 20202022 annual meeting of stockholders, the Company must receive any proposals, including a proposal relating to director nominations, for consideration at the 20212023 annual meeting of stockholders no earlier than January 24, 2021,February 12, 2023, and no later than February 23, 2021.March 14, 2023. In addition, the form of proxy that the Board of Directors will solicit in connection with the Company’s 20202022 annual meeting of stockholders will confer discretionary authority to vote on any proposal received between November 13, 202021, 2022 and January 24, 2021,February 12, 2023, or after February 23, 2021.March 14, 2023.
ANNUAL REPORT
A copy of the Company’s Annual Report to Stockholders for the year ended December 31, 20192021 accompanies this Proxy Statement.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
The Company makes available free of charge on its internet website, www.saulcenters.com,, this 20202022 Proxy Statement and the 20192021 Annual Report to Stockholders, as well as its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after the reports are electronically filed with, or furnished to, the Securities and Exchange Commission. Information contained on the Company’s internet website is not part of this proxy statement.
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By order of the Board of Directors |
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Bettina T. Guevara |
Senior Vice President, General Counsel and Secretary
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March 13, 202023, 2022
Bethesda, Maryland
7501 Wisconsin Avenue, Suite 1500E
Bethesda, Maryland 20814-6522