UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
SecuritiesExchange Act of 1934
(Amendment No.)
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MID-AMERICA APARTMENT COMMUNITIES, INC.
2023
2024 ANNUAL MEETING OF SHAREHOLDERS
www.virtualshareholdermeeting.com/MAA2023MAA2024
Tuesday, May 16, 202321, 2024
12:30 p.m. CDT
PROXY STATEMENT
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
INTRODUCTION
TO MY FELLOW SHAREHOLDERS
As we celebrate 30 years as a public company, I am pleased to invite you to attend the 20232024 Annual Meeting of Shareholders of Mid-America Apartment Communities, Inc. The meeting will be held at 12:30 p.m., Central Daylight Time, on Tuesday, May 16, 2023.21, 2024. We will be conducting the meeting online in order to provide all of our shareholders the same opportunity to participate as they would have at an in-person meeting, including the right to vote and the ability to ask questions through the virtual meeting platform. We believe a virtual-only format allows equal access to our shareholders as it eliminates both the time and cost associated with physically attending the meeting for our geographically dispersed shareholders and any health concerns or other limitations of our shareholders, associates and Directors.
The Notice of Annual Meeting of Shareholders and Proxy Statement, both of which accompany this letter, provide details regarding the business to be conducted during the meeting. Your vote on the proposals to be voted upon during the 20232024 Annual Meeting of Shareholders is important to us, and I encourage you to vote in advance, regardless of whether you plan to virtually attend the meeting or not.
On behalf of the Board of Directors and my fellow associates, I would like to recognize both Philip W. NorwoodToni Jennings for her nearly seven and Monica McGurk for theira half years of service to MAA andas a member of our Board of Directors (15 and 5 years, respectively). Mr. Norwood andDirectors. Ms. McGurk are not standingJennings is ineligible to be nominated for re-election at the 20232024 Annual Meeting of Shareholders. TheirShareholders under our mandatory retirement policy. Ms. Jennings joined the MAA Board of Directors as part of our merger with Post Properties, Inc. in December 2016, after having served on the Post Properties, Inc. board of directors for five years. Her prior service to Post Properties, Inc. helped ensure a smooth and successful integration of our companies and her knowledge, experience and dedicated service over the years have providedcontinued to provide valuable guidance to MAA and helped shapeafter the company wemerger. We are today. I thank them bothgrateful for Ms. Jennings’ years of enthusiastic representation of our shareholders and wish themher the best with her future endeavors.
In anticipation of Ms. Jenning’s departure, as well in theiras future endeavors.
You will findplanned retirements, we asked shareholders to appoint three new director nominees listed for your approvaldirectors at theour 2023 Annual Meeting of Shareholders -as part of our long-term proactive director succession efforts, and shareholders elected Deborah H. Caplan, John P. Case and Tamara Fischer. Information on their skills, background and expertise can be found in the attached Proxy Statement. We continue to revise and execute both our short and long-term director succession plans and we are excited about the contributions and guidance these nominees will provide. I hope you will support their additionFischer to our Board of Directors. This temporarily increased the size of our Board of Directors with a FOR vote.to thirteen members. Mses. Caplan and Fischer and Mr. Case have all been re-nominated for election by shareholders at the 2024 Annual Meeting of Shareholders. Should all director nominees be elected at the 2024 Annual Meeting of Shareholders, the size of the Board of Directors will reduce to twelve members. As we continue to execute our long-term succession plans, we anticipate the size of the Board of Directors will further reduce.
Along with the other members of the Board of Directors and my fellow MAA associates, I thank you for your support and interest in MAA and I look forward to hosting you at the 20232024 Annual Meeting of Shareholders.
Sincerely, | ||
H. Eric Bolton, Jr. | ||
Chairman of the Board of Directors and | ||
Chief Executive Officer | ||
April | ||
2024 PROXY STATEMENT | 1 |
TABLE OF CONTENTSINTRODUCTION
DEFINED TERMS, ACRONYMS AND ABBREVIATIONS
Below are the definitions of various defined terms, acronyms and abbreviations used throughout the Proxy Statement.
Beneficial Shareholder | A Beneficial Shareholder is a shareholder whose shares are held by a bank, brokerage firm or other nominee. Such shares are often referred to as being held in Street Name. | |
MAA, we, us, our | Mid-America Apartment Communities, Inc. | |
Notice of Internet Availability Availability | Notice Regarding Internet Availability of Proxy Materials | |
Proxy Statement | This Proxy Statement | |
Shareholder of Record or Registered Shareholder | A Shareholder of Record, also referred to as a Registered Shareholder, is a shareholder who owns their shares directly through MAA’s transfer agent, Broadridge Corporate Issuer Solutions, Inc. | |
Voter Instruction Form | Instructions included with proxy materials provided to Beneficial Shareholders by a bank, brokerage firm or other nominee. | |
EXECUTIVE AND DIRECTOR COMPENSATION | ||
401(K) Plan | MAA 401(K) Savings Plan | |
2023 Omnibus | Mid-America Apartment Communities, Inc. 2023 Omnibus Incentive Plan | |
AIP | Annual Incentive Plan | |
CAP | Compensation Actually Paid | |
Code | Internal Revenue Code of 1986, as amended | |
Director Deferred Compensation Plan | Non-Qualified Deferred Compensation Plan for Outside Company Directors | |
Executive Deferred Compensation Plan | Non-Qualified Executive Deferred Compensation Plan | |
FAD | Funds Available for Distribution | |
FFO | Funds From Operations | |
FFO per Share | Funds From Operations per Diluted Common Share and Unit | |
GOI | Gross Operating Income | |
LTIP | Long-Term Incentive Program | |
NEO | Named Executive Officer | |
NOI | Net Operating Income | |
Pearl Meyer | Pearl Meyer & Partners, LLC | |
SS | Same Store | |
TSR | Total Shareholder Return | |
ACCOUNTING AND AUDITING | ||
ASC | Accounting Standards Codification | |
FASB | Financial Accounting Standards Board | |
GAAP | Generally Accepted Accounting Principles | |
Financial Expert | Audit committee financial expert as defined under Item 401(h) of Regulation S-K | |
GENERAL TERMS AND COMMON ABBREVIATIONS | ||
Board | Refers to the Board of Directors of Mid-America Apartment Communities, Inc. | |
CAO | Chief Administrative Officer | |
CEO | Chief Executive Officer | |
CFO | Chief Financial Officer | |
CIO | Chief Investment Officer | |
CSAO | Chief Strategy & Analysis Officer | |
Director | A current member of the Board Board of Directors of Mid-America Apartment Communities, Inc. | |
Director Nominees | The individuals being presented for shareholder approval at the Annual Meeting to serve as directors of MAA until the 2025 annual meeting of shareholders | |
EVP | Executive Vice President | |
GC | General Counsel | |
NYSE | New York Stock Exchange | |
REIT | Real Estate Investment Trust | |
SEC | Securities and Exchange Commission |
2024 PROXY STATEMENT | 2 |
INTRODUCTION
TABLE OF CONTENTS
INTRODUCTION
NEW AND NOTABLE
DIRECTORS
EXECUTIVE COMPENSATION
The new plan:
ESG NOTES
Because our ESG initiatives impact all areas of our company, you will not find a dedicated ESG section in this Proxy Statement. Rather, to assist shareholders in evaluating the matters being presented for approval at the Annual Meeting, this document primarily incorporates ESG concepts that are directly related to the meeting proposals.
For a better understanding of our entire ESG program, we encourage you to read our Corporate Responsibility Reports that provide enhanced discussions and more detailed information regarding our progress and commitments towards all of our environmental, social and governance objectives. Disclosures in the 2021 Corporate Responsibility Report (report published in 2022 based on 2021 data) were prepared in accordance with GLOBAL REPORTING INITIATIVE standards (Core), the SUSTAINABILITY ACCOUNTING STANDARDS BOARD standards and the TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES recommendations and outlines our key sustainability targets, programs, strategies and initiatives. The report can be found on the Sustainability page of our website at ir.maac.com along with our Human Rights Statement, Vendor Code of Conduct and Policy on Political Contributions. You can also find additional disclosures related to our human capital in the Item 1. Business section of our Form 10-K filed with the SEC on February 14, 2023.
INTRODUCTION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To ensure that all of our shareholders are afforded the same rights and opportunities to participate, the 2023 MAA Annual Meeting of Shareholders will be held as a virtual meeting via the internet. Shareholders will be able to view the shareholder list, ask questions related to the items of business being considered and vote during the meeting through the virtual meeting platform.
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ITEMS OF BUSINESS | In addition to the below matters, shareholders will also consider any other business as may properly come before the meeting or adjournment or postponement thereof. | |||
BOARD RECOMMENDATIONS | Pages | |||
1 | Elect the 13 Director Nominees named in the Proxy Statement to serve until the 2024 Annual Meeting of Shareholders, and until their successors have been duly elected and qualified. | ✓ FOR each Director Nominee | 10-41 | |
2 | Advisory (non-binding) vote to approve NEO compensation. | ✓ FOR | 42-71 | |
3 | Advisory (non-binding) vote on the frequency of the advisory (non-binding) vote to approve NEO compensation. | ✓ 1 YEAR | 76 | |
4 | Ratify the appointment of Ernst & Young LLP as MAA’s independent registered public accounting firm for fiscal year 2023. | ✓ FOR | 77-80 | |
5 | Approve the 2023 OMNIBUS Incentive Plan | ✓ FOR | 81-86 | |
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INTRODUCTION
HOW TO QUICK REFERENCE
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INTRODUCTION
See pages 10-40 for additional details and discussions.
THE BOARD RECOMMENDS SHAREHOLDERS VOTE “FOR” THE ELECTION OF THE 13 DIRECTOR NOMINEES
DIRECTOR NOMINEES | AGE | GENDER | RACE | TENURE | OTHER PUBLIC BOARDS | POSITION | COMMITTEES (Pending Election) | |||
A | C | NCG | REI | |||||||
H. Eric Bolton, Jr. Chairman | 66 | M | W | 1997 | 1 | CEO of MAA | CHAIR | |||
Deborah H. Caplan INDEPENDENT | 60 | F | W | 2023 | None | EVP, Human Resources and Corporate Services of NextEra Energy, Inc. | ✓ | ✓ | ||
John P. Case INDEPENDENT | 59 | M | W | 2023 If Elected | 1 | Past CEO of Realty Income Corp. | ✓ | ✓ | ||
Tamara Fischer INDEPENDENT | 67 | F | W | 2023 If Elected | 1 | Executive Chairman of National Storage Affiliates Trust | ✓ | ✓ | ||
Alan B. Graf, Jr. LEAD INDEPENDENT SEC Financial Expert | 69 | M | W | 2002 | 1 | Past EVP and CFO of FedEx Corporation | CHAIR | |||
Toni Jennings INDEPENDENT | 73 | F | W | 2016 | 2 | Chairman of the Board of Directors of Jack Jennings & Sons, Inc. Former Lieutenant Governor, State of Florida | CHAIR | ✓ | ||
Edith Kelly-Green INDEPENDENT SEC Financial Expert | 70 | F | B | 2020 | None | Founding Partner of JKG Properties LLC and The KGR Group Past VP and Chief Sourcing Officer of FedEx Express | ✓ | ✓ | ||
James K. Lowder INDEPENDENT | 73 | M | W | 2013 | None | Chairman of the Board of Directors and President of The Colonial Company | ✓ | ✓ | ||
Thomas H. Lowder INDEPENDENT | 73 | M | W | 2013 | None | Past Chairman of the Board of Trustees and CEO of Colonial Properties Trust | ✓ | ✓ | ||
Claude B. Nielsen INDEPENDENT | 72 | M | W | 2013 | None | Chairman of the Board of Directors and Past CEO of Coca-Cola Bottling Company United, Inc. | ✓ | CHAIR | ||
W. Reid Sanders INDEPENDENT | 73 | M | W | 2010 | 2 | President of Sanders Properties, LLC Past EVP of Southeastern Asset Management and President of Longleaf Partners Funds | ✓ | |||
Gary S. Shorb INDEPENDENT | 72 | M | W | 2012 | None | Executive Director of the Urban Child Institute Past President and CEO of Methodist Le Bonheur Healthcare | ✓ | ✓ | ||
David P. Stockert INDEPENDENT | 61 | M | W | 2016 | 1 | Past CEO and President of Post Properties, Inc. | ✓ | ✓ |
A = Audit, C = Compensation, NCG = Nominating and Corporate Governance, REI = Real Estate Investment
B = Black, W = White
Age is as of May 16, 2023, the meeting date for the Annual Meeting.
AGGREGATE DIRECTOR NOMINEE DEMOGRAPHICS
The Board considers diversity of its membership to be a key component of long-term success and the Nominating and Corporate Governance Committee has identified gender, racial and ethnic diversity as critical criteria for potential director candidates in order to proactively work towards expanded diverse representation within its membership.
INTRODUCTION
See pages 10-40 for additional details and discussions.
CORPORATE GOVERNANCE
The Board has established numerous policies and practices to foster a culture of integrity, align the interests of leadership with stakeholders and help ensure MAA’s operations and performance are sustainable over the long term. The below highlights some of MAA’s corporate governance standards.
SHAREHOLDERS RIGHTS
DIRECTOR REFRESHMENT AND NOMINEE SELECTION
The Nominating and Corporate Governance Committee maintains robust processes related to both CEO and director succession planning. Generally, the committee will discuss various facets of both short and long-term succession plans at each committee meeting, reviewing and updating the Board on developments quarterly. Some of the considerations incorporated into director succession and director nominee analysis are provided below.
KEY KNOWLEDGE AND EXPERIENCE
While there are many considerations in identifying individual director candidates, in terms of expertise, the Nominating and Corporate Governance Committee believes there are key areas of knowledge and experience that are of particular relevance to MAA and are therefore critical to be represented on the Board as a whole in order for the Board to provide quality oversight and risk management to MAA and our shareholders. Below are the number of Director Nominees that possess each of these key areas of knowledge and experience.
See the individual Director Nominee details on pages 24-37 for the full qualifications of each Director Nominee and the additional contributions each makes to the Board as a whole.
INTRODUCTION
See pages 42-71 for additional details and discussions.
THE BOARD RECOMMENDS SHAREHOLDERS VOTE “FOR” EXECUTIVE OFFICER COMPENSATION
NEO COMPENSATION PHILOSOPHY
The Compensation Committee believes that the compensation programs for our executive officers should drive key business and strategic goals over various time frames in support of sustainable long-term shareholder value creation. To do that, the Compensation Committee believes the program must balance the following objectives. See page 22-23 for more details.
OTHER CONSIDERATIONS AND SAY ON PAY
In addition to the concepts represented in our executive compensation philosophy, the Compensation Committee considers various other factors when determining executive compensation, including those listed below.
The Compensation Committee also considers input from our shareholders on executive compensation.
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NEO COMPENSATION PRACTICES AND GOVERNANCE
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INTRODUCTION
See pages 42-71 for additional details and discussions.
2022 TARGET COMPENSATION
ACTUAL INCENTIVE PLAN METRIC PERFORMANCE
The below charts compare the actual performance results for metrics with performance periods ending on December 31, 2022, against the performance ranges within their respective plans, as calculated per the plans.
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DIRECT COMPENSATION REALIZED IN 2022
TOTAL | TOTALS AS AWARDED | ||||||||||
2022 | 2022 AIP (1) | DIRECT | SHARES OF | ||||||||
SALARY | CORE FFO | SS NOI | FUNCTIONAL | 2022 LTIP (2) | 2020 LTIP (2) | COMPENSATION | RESTRICTED | ||||
RECEIVED | PER SHARE | GROWTH | GOALS | SERVICE | FAD | 3-YR TSR | REALIZED (3) | TARGET | CASH | STOCK | |
Bolton CEO | $879,857 | $2,312,216 | $770,739 | N/A | $608,022 | $1,368,168 | $2,838,536 | $8,777,538 | $6,196,469 | $3,962,812 | 30,669 |
Campbell CFO | $544,236 | $ 708,300 | $354,150 | $ 164,680 | $206,756 | $ 465,475 | $1,287,004 | $3,730,601 | $2,715,392 | $1,771,366 | 12,480 |
Grimes Former COO | $557,748 | $ 725,885 | $362,942 | $ 145,177 | $211,937 | $ 476,936 | $1,391,030 | $3,799,654 | $2,782,805 | $1,791,752 | 12,790 |
DelPriore GC | $540,645 | $ 704,128 | $352,064 | $ 167,230 | $205,657 | $ 462,650 | $1,255,135 | $3,687,508 | $2,685,895 | $1,764,067 | 12,252 |
Hill CIO | $413,067 | $ 539,695 | N/A | $ 248,260 | $114,603 | $ 257,935 | $ 468,458 | $2,042,017 | $1,627,084 | $1,201,022 | 5,357 |
INTRODUCTION
See pages 76 for additional details and discussions.
THE BOARD RECOMMENDS SHAREHOLDERS VOTE TO HOLD THE ADVISORY VOTE ON
EXECUTIVE COMPENSATION ON A “ONE YEAR” FREQUENCY
In setting executive compensation packages, the Compensation Committee takes into account various factors including changing employment market dynamics, promotions and changes in executive scope of responsibilities, leadership development, and succession planning, amongst other factors. The Compensation Committee also values shareholder feedback regarding the Company’s executive pay design and practices and believes that annual Say on Pay votes aligns with sound corporate governance practice.
See pages 77-80 for additional details and discussions.
THE BOARD RECOMMENDS SHAREHOLDERS VOTE “FOR” ERNST & YOUNG LLP
TO SERVE AS MAA’s INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2023
PRACTICES RELATED TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AUDIT COMMITTEE PRACTICES
MAA PRACTICES
AUDIT AND NON-AUDIT FEES
2022 | 2021 | |||||||
Audit Fees | $ | 1,898,245 | $ | 2,194,023 | ||||
Audit-Related Fees | - | - | ||||||
Tax Fees | 542,222 | 773,098 | ||||||
All Other Fees | 2,390 | 1,825 | ||||||
Total Fees | $ | 2,442,857 | $ | 2,968,946 |
The Audit Committee has pre-approved all audit and non-audit services provided by our independent registered public accounting firm since 2002 and has determined that the nature and level of non-audit related services that Ernst & Young LLP provides us is compatible with maintaining the independence of Ernst & Young LLP. See page 78 for more information regarding audit and non-audit fees.
2022 RATIFICATION BY SHAREHOLDERS
Shareholders ratified the selection of Ernst & Young LLP to be our independent registered public accounting firm for 2022 by 97.2% at the 2022 Annual Meeting of Shareholders. Annual ratification by shareholders of the Audit Committee’s appointment of Ernst & Young LLP to serve as our independent registered public accounting firm has averaged 98.8% over the last 10 years.
REPRESENTATION AT ANNUAL MEETING
A representative of Ernst & Young LLP will attend the Annual Meeting to make a statement if they so desire and to answer any appropriate questions presented by shareholders.
INTRODUCTION
See pages 81-86 for additional details and discussions.
THE BOARD RECOMMENDS SHAREHOLDERS APPROVE THE 2023 OMNIBUS INCENTIVE PLAN
PURPOSE
The 2023 OMNIBUS Incentive Plan will dedicate shares of common stock for issuance under MAA’s Annual Incentive Plan, Long-Term Incentive Plan or other equity incentive programs that may be established by the Compensation Committee from time to time. If approved by shareholders, it will replace the Amended and Restated 2013 Stock Incentive Plan, which will expire later this year. Shareholder approval of the 2023 OMNIBUS will allow us to continue to attract, retain and motivate key associates by providing various forms of incentive compensation in support of long-term value creation.
The Compensation Committee feels that substantive ownership of MAA stock by executive officers aligns their interests with shareholders by allowing them to share in long-term value creation.
Cautionary information and forward-looking statements
This document may include forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are intended to enjoy the protection of the safe harbor for forward-looking statements provided by the Exchange Act as well as protections afforded by other federal securities laws. All statements other than statements of historical or current facts, including statements regarding our environmental and other sustainability plans and goals, made in this document are forward-looking. We use words such as “anticipates,” “believes,” “expects,” “future,” “intends,” “plans,” “seeks,” “estimates,” “forecasts,” “projects,” “assumes,” “will,” “may,” “could,” “should,” “budget,” “target,” “outlook,” “proforma,” “opportunity,” “guidance” and variations of such words and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’smanagement's current expectations and are inherently uncertain. The forward-looking statements in this document are subject to certain known and unknown risks, uncertainties and other factors including the risks relating to the company’s strategy, operations and performance and the financial, legal, tax, regulatory, compliance, reputational, and other factors discussed in “Risk Factors” in the company’scompany's Annual Report on Form 10- K for fiscal 2022year 2023 and subsequent filings with the SEC, which are available at http://www.sec.gov. Although we believe that the assumptions underlying any forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements may not prove to be accurate. In light of the significant uncertainties inherent in any forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Website references throughout this document are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this document.
2024 PROXY STATEMENT | 3 |
INTRODUCTION
2024 PROXY STATEMENT | 4 |
INTRODUCTION
2024 PROXY STATEMENT | 5 |
INTRODUCTION
ADDITIONAL INFORMATION AND RESOURCES
Information in this Proxy Statement focuses on the business to be brought before the 2024 Annual Meeting of Shareholders. As a result, it may not include all information of interest to each of our shareholders or other interested parties. Below, we have listed resources that provide expanded discussions on several topics that may be of interest. Please note that any websites, materials or documents listed below are not incorporated by reference in to this Proxy Statement.
Discussions on Board and Audit Committee oversight of our cybersecurity platform can be found in this Proxy Statement on pages 17-18. For additional information and enhanced disclosures, including our cybersecurity risk management platform and cybersecurity risks we encourage you to read Item 1C. Cybersecurity and “Risk Factors – We rely on information technology systems in our operations, and any breach or security failure of those systems could materially adversely affect our business, financial condition, results of operations and reputation” in Item 1A. Risk Factors in our Form 10-K filed with the SEC on February 9, 2024 https://www.sec.gov | |||||||
HUMAN CAPITAL | You can find additional disclosures related to our human capital in the Item 1. Business section of our Form 10-K filed with the SEC on February 9, 2024. https://www.sec.gov In addition, our Human Rights Statement can be viewed on our website. ir.maac.com/overview/Sustainability | ||||||
CORPORATE RESPONSIBILITY | Because our corporate responsibility initiatives impact all areas of our company, you will not find a dedicated corporate responsibility section in this Proxy Statement. Rather, to assist shareholders in evaluating the matters being presented for approval at the Annual Meeting, the Proxy Statement primarily incorporates corporate responsibility concepts that are directly related to the meeting proposals. For a better understanding of our entire corporate responsibility program, we encourage you to read the documents below that provide enhanced discussions and more detailed information regarding our progress and commitments towards our people empowerment, portfolio resiliency, and stakeholder engagement objectives. They are available on our website. ir.maac.com/overview/Sustainability | ||||||
Corporate Responsibility Reports | Vendor Code of Conduct | ||||||
For copies of our Bylaws and Charter, visit the SEC website. https://www.sec.gov Bylaws: Exhibit 3.1 to the Form 8-K that was filed on December 13, 2023 Charter: Exhibit 3.1 to the Form 10-K which was filed on February 24, 2017 | |||||||
OTHER GOVERNANCE DOCUMENTS | ir.maac.com/overview/corporate-governance | ||||||
Corporate Governance Guidelines Code of Conduct Whistleblower Policy Communications with the Board | Committee Charters | ||||||
Audit Compensation | Nominating and Corporate Governance Real Estate Investment | ||||||
COMMUNICATE WITH THE BOARD | You can use the address to the right to contact the Board Please indicate the appropriate recipient. | MAA ATTN: [Board or Group Name] c/o Corporate Secretary 6815 Poplar Ave., Ste. 500 Germantown, TN 38138 | |||||
Board Committees | Independent Directors Non-Management Directors | ||||||
2024 PROXY STATEMENT | 6 |
INTRODUCTION
PROXY HIGHLIGHTS | ELECTION OF DIRECTORS |
Below are summary details of the director nominees being presented to shareholders for approval at the Annual Meeting. Pages 24-25 have an expanded schedule including key knowledge and experience. In alignment with the Board’s proactive long-term succession plans, the size of the Board will be reduced to twelve members.
AGGREGATE DIRECTOR NOMINEE DEMOGRAPHICS
The Board considers diversity of its membership to be a key component of long-term success and the Nominating and Corporate Governance Committee has identified gender, racial and ethnic diversity as critical criteria for potential director candidates in order to proactively work towards expanded diverse representation within its membership, reflective of our investors, associates and residents.
MORE INFORMATION
Additional detail and more information regarding the election of directors can be found on the following pages.
The Board of Director’s recommends a vote FOR The Election of Directors | ||||||
Board Structure and Composition | 12-16 | |||||
Additional Board Governance | 16-21 | |||||
Process for Identifying and Selecting Director Nominees | 22-23 | |||||
Director Nominees for Election | 24-37 | |||||
Non-Management Director Compensation | 37-39 | |||||
2024 PROXY STATEMENT | 7 |
INTRODUCTION
PROXY HIGHLIGHTS | EXECUTIVE OFFICER COMPENSATION |
Below are summary details of 2023 target and earned compensation presented to shareholders for approval at the Annual Meeting. The Compensation Discussion and Analysis section of the Proxy Statement can be found on pages 32-57.
2023 TARGET COMPENSATION
ACTUAL INCENTIVE PLAN METRIC PERFORMANCE
The below charts compare the actual performance results for metrics with performance periods ending on December 31, 2023, against the performance ranges within their respective plans, as calculated per the plans.
Regardless of performance, individual awards are capped at the maximum payout opportunity within the respective plan.
Reconciliations of net income available for MAA common shareholders to Core FFO per Share, SS NOI and FAD are set forth in the Non-GAAP Financial Measures section on pages 82-83.
DIRECT COMPENSATION EARNED IN 2023
TOTAL | TOTALS AS AWARDED | ||||||||||
2023 | 2023 AIP | DIRECT | SHARES OF | ||||||||
SALARY | CORE FFO | SS NOI | FUNCTIONAL | 2023 LTIP (1) | 2021 LTIP (1) | COMPENSATION | RESTRICTED | ||||
RECEIVED | PER SHARE | GROWTH | GOALS | SERVICE | FAD | 3-YR TSR | REALIZED (2) | TARGET | CASH | STOCK | |
Bolton CEO | $914,723 | $1,743,411 | $310,615 | N/A | $ 858,930 | $1,932,594 | $2,186,589 | $ 7,946,862 | $6,855,704 | $2,968,749 | 37,023 |
Campbell CFO | $565,802 | $ 534,058 | $142,731 | $ 172,740 | $ 265,559 | $ 597,675 | $ 875,066 | $ 3,153,630 | $2,809,745 | $1,415,331 | 12,928 |
DelPriore CAO | $562,469 | $ 530,912 | $141,890 | $ 176,904 | $ 264,079 | $ 594,179 | $ 853,418 | $ 3,123,851 | $2,779,421 | $1,412,175 | 12,730 |
Hill CIO | $496,743 | $ 471,257 | N/A | $ 258,704 | $ 212,985 | $ 479,484 | $ 315,443 | $ 2,234,616 | $2,037,256 | $1,226,704 | 7,496 |
Argo CSAO | $375,692 | $ 239,010 | $ 63,879 | $ 65,926 | $ 74,894 | $ 168,478 | $ 141,586 | $ 1,129,466 | $1,033,471 | $ 744,507 | 2,863 |
(1) | Represents shares of restricted stock granted or earned in 2023, valued at the closing stock price of $134.46 on December 29, 2023. |
(2) | Total direct compensation realized includes salary received during 2023, short-term bonuses earned under the 2023 AIP, the value (based on the December 29, 2023 closing stock price of $134.46) of service shares and awards earned in relation to the FAD metric (for which the performance period ended on December 31, 2023) under the 2023 LTIP, and awards earned under the 2021 LTIP for the 3-Year TSR metric (for which the performance period ended on December 31, 2023) based on the closing stock price on December 29, 2023 of $134.46. |
MORE INFORMATION
Additional detail and more information regarding executive compensation can be found on the following pages.
Compensation Approach and Governance | 43-47 | The Board of Director’s recommends a vote FOR Executive Compensation | ||
2023 Program Structure | 48-51 | |||
2023 NEO Compensation Realized | 52-56 | |||
Tax and Accounting Implications of Compensation | 56 | |||
Conclusion | 57 | |||
2024 PROXY STATEMENT | 8 |
INTRODUCTION
PROXY HIGHLIGHTS | RATIFY ERNST & YOUNG LLP |
PRACTICES RELATED TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
AUDIT AND NON-AUDIT FEES
2023 | 2022 | |
Audit Fees | $ 2,100,000 | $ 1,898,245 |
Audit-Related Fees | - | - |
Tax Fees | 396,764 | 542,222 |
All Other Fees | - | 2,390 |
Total Fees | $ 2,496,764 | $ 2,442,857 |
The Audit Committee has pre-approved all audit and non-audit services provided by our independent registered public accounting firm since 2002 and has determined that the nature and level of non-audit related services that Ernst & Young LLP provides us is compatible with maintaining the independence of Ernst & Young LLP. See page 71 for more information regarding audit and non-audit fees.
MORE INFORMATION
Additional detail and more information regarding the ratification of Ernst & Young LLP to serve as MAA’s independent registered accounting firm can be found on pages 70-73. A representative of Ernst & Young LLP will attend the Annual Meeting to make a statement if they so desire and to answer any appropriate questions presented by shareholders. | The Board recommends shareholders vote FOR Ernst & Young LLP to serve as MAA’s Independent Registered Public Accounting firm for 2024 |
2024 PROXY STATEMENT | 9 |
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: | ELECTION OF DIRECTORS | FOR | |||||||
MATTER TO BE VOTED Election of the 12 Director Nominees named herein to serve until the 2025 Annual Meeting of Shareholders, and until their successors have been duly elected and qualified. Our Board proposes that the following Director Nominees be elected for a term of one year. | |||||||||
H. Eric Bolton, Jr. Deborah H. Caplan John P. Case | Tamara Fischer Alan B. Graf, Jr. Edith Kelly-Green | James K. Lowder Thomas H. Lowder Claude B. Nielsen | W. Reid Sanders Gary S. Shorb David P. Stockert | ||||||
VOTE REQUIRED Each Director Nominee will be elected if there is a quorum at the Annual Meeting, either in person virtually or by proxy, and the votes cast “FOR” each Director Nominee exceed the votes cast “AGAINST” each Director Nominee. We have no reason to believe that any of the Director Nominees will not agree or be available to serve as a Director, if elected. However, should any Director Nominee become unable or unwilling to serve, the proxies may be voted for a substitute director nominee or to allow the vacancy to remain open until filled by our Board. | |||||||||
IMPACT OF ABSTENTIONS: Abstentions will have no legal effect on whether each Director Nominee is approved. | |||||||||
IMPACT OF BROKER NON-VOTES: Broker non-votes will have no legal effect on whether each Director Nominee is approved. | |||||||||
BOARD RECOMMENDATION | |||||||||
The Board recommends you vote “FOR” each Director Nominee | |||||||||
We believe that the slate of Director Nominees presented for election at the Annual Meeting possesses the range and depth of expertise and experience required to successfully perform the Board’s roles and responsibilities in overseeing our operations, risk management and development and execution of our long-term strategy. The list of Director Nominees also reflects execution of our proactive long-term succession plans to address director retirements, dynamic company needs and board refreshment.
To assist you with your consideration of the Director Nominees, the following pages provide discussions detailing the below concepts related to our BoardBoard’s roles and theresponsibilities, structure and composition, governance practices, process for identifying and selecting director nominees, director compensation and detailed qualification discussions for each Director NomineesNominee presented for your approval.
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PROPOSAL 1: ELECTION OF DIRECTORS
THE BOARD’S ROLES AND RESPONSIBILITIES
The Board is elected by shareholders to represent shareholder interests in the long-term success of MAA. Except for matters voted upon by shareholders, the Board acts as the ultimate decision maker of MAA. While management is responsible for the daily operations of MAA, the Board operates in an oversight capacity.
KEY BOARD RESPONSIBILITIES
STRATEGY
Strategic planning and oversight of management’s execution of MAA’s strategic vision is one of the primary areas of responsibility of the Board. Our short and long-term strategic plans encompass all aspects of our operations including market and portfolio investments, technology and cybersecurity investments, resident demographic trends and customer experience, human capital recruitment, retention and development, capital market access and balance sheet strength, financial statement integrity and performance expectations, environmental and community responsibilities, and our dividend policy, as well as many other areas.
To execute this oversight responsibility, the Board annually meets with management to discuss planned changes from previous strategic positions, market and economic projections, peer performance benchmarking data, industry and regulatory trends, areas of focus for each functional area, expected financial statement and shareholder investment impacts, resource requirements, human capital needs and development as well as execution risks, among other topics. The result of this analysis is the setting of our annual and long-term strategy that includes stress test scenarios and becomes the basis for our annual guidance to the market. The Compensation Committee also incorporates both short and long-termlong- term aspects of the strategy in compensation packages for our NEOs to encourage thoughtful execution of the strategy by the leadership team.
The Board delegates oversight responsibility for the execution of certain aspects of our strategy to its committees to allow for more in-depth evaluation and oversight by those Directors with expertise and knowledge specifically related to the area.area, including mitigation of associated risks. The committees update the Board on their respective areas of oversight at each Board meeting.
2024 PROXY STATEMENT | 10 |
PROPOSAL 1: ELECTION OF DIRECTORS
Throughout the year, the Board and its committees receive updates from management and actively engage in further discussions regarding execution of the strategy, variables impacting results and potential changes to the strategic plan. These updates, at minimum, take the form of monthly reports from the CEO that include financial statement results, quarterly functional reports from management on developments in key areas, quarterly in-person updates to the Board by each committee on their areas of responsibility, and quarterly in-person discussions with executive management and the CEO during Board meetings. The Board and its committees also hold additional meetings, as required, to perform their respective duties.
From time to time, the Board will also invite third-party experts to meet with the Board or its committees or review third-party reports discussing developing trends and their views on MAA’s efforts on various topics, including, markets, sector and industry trends, cybersecurity, balance sheet opportunities, executive compensation, among other topics. This not only provides viewpoints beyond management’s, but also serves to add additional expertise and experience to Board discussions.
The Board generally holds one of its quarterly meetings in a different MAA market each year allowing the Board to visit several properties representing different aspects of MAA’s strategy. The Board believes these on-site visits offer additional insight into MAA’s markets, operations, resident base, human capital management, technology usage and allocation of capital investments, providing better insight and oversight of the company’s strategies.
RISK OVERSIGHT
While management is responsible for the day-to-day management of our risk exposures, both the Board as a whole and its respective committees serve active roles in overseeing the management of our risks. Our Board or its committees regularly review, with members of our executive and senior management teams and outside advisors, information regarding our strategy and key areas of the company including operations, transaction and development investments, finance and accounting, information technology and cybersecurity efforts, various aspects of human capital management, legal and regulatory requirements, environmental and community engagement, as well as the risks associated with each. In addition, the Board periodically reviews the results of our enterprise-wide risk management efforts and receives legal and operational updates from executive management at quarterly meetings and on a more frequent ad hoc basis, if necessary.
Senior management as well as outside advisors, from time to time, also periodically meet with the Board or committees to provide educational and best practice information related to oversight of various areas of risk or make representations associated with their respective risk oversight responsibilities. A summary list of the key areas of oversight responsibilities handled by each committee follows.
AUDIT COMMITTEE
COMPENSATION COMMITTEE
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
PROPOSAL 1: ELECTION OF DIRECTORS
The Board and its committees continuously evaluate their oversight of risk management and periodically enhance their procedures or direct the company to make enhancements or provide enhanced disclosures to shareholders regarding risk management as required by regulations or as they deem to be in the best interest of shareholders.
SUCCESSION PLANNING
2024 PROXY STATEMENT | 11 |
PROPOSAL 1: ELECTION OF DIRECTORS
SUCCESSION PLANNING
The Board is responsible for appointing our CEO and for ensuring that adequate succession plans are in place to address both planned CEO succession as well as potential unexpected or emergency succession needs. The Nominating and Corporate Governance Committee oversees and maintains succession planning for both the Board and CEO, routinely obtaining input from and updating the full Board on succession plan reviews and changes resulting from changes in strategy, and thedeveloping needs of the organization, changes in leadership and the results of human capital development activities. In addition to addressing the dynamic needs of the company, the Board’s proactive long-term succession plans, focus on ensuring that required expertise and experience are determined, and candidates are identified, developed and put in place, prior to planned departures in order to ensure a smooth transition and limit any distraction to the company.
The Nominating and Corporate Governance Committee assists the Board with succession responsibilities and also oversees succession planning and associate development of executive and senior management positions to ensure adequate bench strength is developed and available to meet the long-term needs of MAA. The CEO and other executive management periodically update the Nominating and Corporate Governance Committee and the Board on senior management succession plans including associate development plans and areas of risk. The Nominating and Corporate Governance Committee may, from time to time, engage external consultants to assist or advise with succession planning endeavors at its discretion and as it deems appropriate. You can find more details regarding Board succession planning and identification of potential director nominees on pages 22-23.
The Board has exposure to internal succession candidates on an ongoing basis, generally meeting with executives both inside and outside of Board meetings at least four times a year and also periodically meeting with key senior managers. The Board and its committees have direct access to all members of the leadership team.team with and without the CEO present.
The Compensation Committee considers succession planning input from the Board and the Nominating and Corporate Governance Committee when determining compensation packages for the Board and NEOs.
The Nominating and Corporate Governance Committee may, from time to time, engage external consultants to assist or advise with succession planning endeavors at its discretion and as it deems appropriate. You can find more details regarding Board succession planning and identification of potential director nominees on pages 22-23.
BOARD STRUCTURE AND COMPOSITION
We believe that our current Board leadership model combined with our corporate governance policies and documents, strikes an appropriate balance between informed and consistent leadership and independent oversight and perspective, allowing for efficiency and accountability, ultimately creating an environment for the effective execution of the Board’s responsibilities.
BOARD COMPOSITION FOLLOWING THE 20222023 ANNUAL MEETING OF SHAREHOLDERS
Other Public Company Boards | ||||||||||||
Name | Age (1) | Gender
| Director Since | MAA Committee Memberships | I
L F M B W A C NCG REI X XC SFE | Indicates that our Board has affirmatively determined the Director meets the independence standards of our Corporate Governance Guidelines, the listing standards of the NYSE and applicable SEC rules Lead Independent Director Female Male Black White Audit Compensation Nominating and Corporate Governance Real Estate Investment Committee Member Committee Chairman SEC Financial Expert | ||||||
Race | A | C | NCG | REI | ||||||||
H. Eric Bolton, Jr. Chairman | CEO | 66 | M | 1997 | W | XC | 1 | |||||
Alan B. Graf, Jr. | I, L | 69 | M | 2002 | W | XC, SFE | 1 | |||||
Toni Jennings | I | 73 | F | 2016 | W | X | X | 2 | ||||
Edith Kelly-Green | I | 70 | F | 2020 | B | X, SFE | 1 | |||||
James K. Lowder | I | 73 | M | 2013 | W | X | X | - | ||||
Thomas H. Lowder | I | 73 | M | 2013 | W | X | X | - | ||||
Monica McGurk (2) | I | 53 | F | 2016 | W | X | X | - | ||||
Claude B. Nielsen | I | 72 | M | 2013 | W | X | XC | - | ||||
Philip W. Norwood (3) | I | 75 | M | 2007 | W | XC | X | - | ||||
W. Reid Sanders | I | 73 | M | 2010 | W | X | 2 | |||||
Gary S. Shorb | I | 72 | M | 2012 | W | X | X | - | ||||
David P. Stockert | I | 61 | M | 2016 | W | X | X | 1 | ||||
(1) Age is as of May 16, 2023, the date for the Annual Meeting. | ||||||||||||
(2) Ms. McGurk resigned from our Board effective December 31, 2022, in order to pursue other public board service in her field of expertise and is, therefore not nominated for re-election at the Annual Meeting due to public board service limitations placed on her by her employer. | ||||||||||||
(3) Under our Age Limitation Policy, Mr. Norwood is ineligible to be nominated for re-election and has, therefore, not been nominated for election at the Annual Meeting. |
PROPOSAL 1: ELECTION OF DIRECTORS
Name | Age (1) | Gender | Director Since | MAA Committee Memberships | Other Public Company Boards | |||||
Race | Audit | Compensation | Nominating & Governance | Real Estate Investment | ||||||
H. Eric Bolton, Jr. Chairman | CEO | 67 | Male | 1997 | White | Chairman | 1 | |||
Deborah H. Caplan | Independent | 61 | Female | 2023 | White | X | X | - | ||
John P. Case | Independent | 60 | Male | 2023 | White | X | X | 1 | ||
Tamara Fischer | Independent | 68 | Female | 2023 | White | Financial Expert | X | 2 | ||
Alan B. Graf, Jr. | Lead Independent | 70 | Male | 2002 | White | Chairman Financial Expert | 1 | |||
Toni Jennings (2) | Independent | 75 | Female | 2016 | White | Chairman | X | - | ||
Edith Kelly-Green | Independent | 71 | Female | 2020 | Black | Financial Expert | X | - | ||
James K. Lowder | Independent | 74 | Male | 2013 | White | X | X | - | ||
Thomas H. Lowder | Independent | 74 | Male | 2013 | White | X | X | - | ||
Claude B. Nielsen | Independent | 73 | Male | 2013 | White | X | Chairman | - | ||
W. Reid Sanders | Independent | 74 | Male | 2010 | White | X | 2 | |||
Gary S. Shorb | Independent | 73 | Male | 2012 | White | X | X | - | ||
David P. Stockert | Independent | 62 | Male | 2016 | White | X | X | - | ||
(1) Age is as of May 21, 2024, the date for the Annual Meeting. | ||||||||||
(2) Under our mandatory retirement age policy, Ms. Jennings is ineligible to be nominated for re-election at the Annual Meeting |
COMBINED CEO AND CHAIRMAN
As the Director with the most experience specific to MAA, the Board believes, at this time, Mr. Bolton is best qualified to effectively identify strategic risks and priorities, lead strategy discussions and facilitate the flow of information between the Board and management to execute on our strategy. We do not feel having a combined CEO and Chairman position creates undue management influence over the boardBoard as all other directors are independent, each director has one vote and we have a heavilyhighly experienced and respected Lead Independent Director who oversees independent Director meetings on a regular basis without the CEO and Chairman present in order to encourage and support independent discussion and decision making by ensuring an open forum for discussion and expression of concerns.
INDEPENDENT DIRECTORS
2024 PROXY STATEMENT | 12 |
PROPOSAL 1: ELECTION OF DIRECTORS
INDEPENDENT DIRECTORS
A director is considered independent if our Board affirmatively determines that the director has no direct or indirect material relationship with us. Our Board consults with both internal and external counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent”, including those set forth in pertinent listing standards of the NYSE, as in effect from time-to-time. Consistent with the requirements of the SEC and the NYSE, our Board reviews all relevant transactions or relationships between each Director, or any of his or her family members, and us, our senior management and our independent auditors. Our Board has adopted the following categorical standards.
✓ | A director who is an employee or whose immediate family member is one of our executive officers is not independent until three years after the end of such employment relationship. |
✓ | A director who receives, or whose immediate family member receives, more than $120,000 in any given 12-month period in direct compensation from us, other than Director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is not independent until three years after he or she ceases to receive more than $120,000 in any given 12-month period of such compensation. |
✓ | A director who is affiliated with or employed by, or whose immediate family member is affiliated with or employed in a professional capacity by, any of our present or former internal or external auditors is not independent until three years after the end of the affiliation or the employment or auditing relationship. |
external auditors is not independent until three years after the end of the affiliation or the employment or auditing relationship.
✓ | A director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of our present executive officers serve on that company’s Compensation Committee is not independent until three years after the end of such service or the employment relationship. |
✓ | A director who is an executive officer or an employee, or whose immediate family member is an executive officer, of a company that makes payments to, or receives payments from, us for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues, is not independent until three years after falling below such threshold. |
The Board has determined that all the Director Nominees, except for Mr. Bolton, our CEO, meet the qualifications to be considered Independent Directors.
LEAD INDEPENDENT DIRECTOR
The Lead Independent Director provides a non-management contact for matters concerning the CEO and ensures that Board agendas and discussions cover all topics of interest or concern to the Independent Directors without being filtered by management. The Lead Independent Director also oversees the Independent and Non-Management meetings and has direct access to any member of the executive leadership team, the Board Secretary, the company’s independent registered accounting firm as well as other external experts.
SUPERMAJORITY OF INDEPENDENT DIRECTORS
Having a supermajority of Independent directors provides diverse viewpoints and perspectives for Board discussions and decisions as well as ensuring strong oversight of the CEO and executive management.
INDEPENDENT DIRECTOR EXECUTIVE SESSIONS
Led by the Lead Independent Director, these meetings provide a forum to ensure candid discussions are held and concerns can be identified and voiced. The Independent Directors can also share with the Lead Independent Director topics they would like management to bring to future meetings or for which to provide more in depth or additional materials.
100% INDEPENDENT AUDIT, COMPENSATION AND NOMINATING AND CORPORATE GOVERNANCE COMMITTEES
Having the Audit, Compensation and Nominating and Corporate Governance Committees comprised of only Independent directors provides for better controls and oversight of critical areas of Board responsibilities.
DIVERSITY
HavingThe Board and Nominating and Corporate Governance Committee believe that having diversity of backgrounds, experience, age, gender, race and ethnicity, among other factors, offers a breadth of expertise, perspectives, viewpoints and opinions to strategy discussions and oversight responsibilities. The Board strives to incorporate and maintain diversity through director succession efforts, not only to strengthen the Board, but to better reflect the associates, investors and residents of MAA.
EQUAL VOTES
Each Director’s vote holds the same weight to ensure all viewpoints are represented in decisions.
EXTERNAL CONSULTANTS
2024 PROXY STATEMENT | 13 |
PROPOSAL 1: ELECTION OF DIRECTORS
EXTERNAL CONSULTANTS
The ability to retain external consultants, experts and legal counsel without management approval, provides the Board with appropriate resources to perform their duties and protect the interests of shareholders. External consultants are paid for by MAA, but do not require MAA’s approval to engage.
PROPOSAL 1: ELECTION OF DIRECTORS
DIRECT COMMUNICATION WITH THE BOARD
The ability for shareholders and other interested parties to communicate directly with the Board, its committees, specific Independent Directors or the Lead Independent Director ensures stakeholders have unfiltered access and provides the Board with additional information to assist with its deliberations (see page 36 for how to contact the Board).
BOARD AND COMMITTEE MEETINGS
The Board and its committees hold both routine periodic meetings and ad hoc meetings from time to time as the respective groups deem necessary. Most meetings are held in person to allow for thorough discussions during which all directors can participate. For various reasons, the Board or its committees may hold a meeting telephonically or through a virtual platform that allows all directors and other participants to see and hear each other simultaneously.
NUMBER OF MEETINGS HELD IN 2022 2023
Board | 4 Non-Management | 4 Independent | |
8 | Audit Committee |
Compensation Committee | |
Nominating and Corporate Governance Committee | |
Real Estate Investment Committee | |
DIRECTOR ATTENDANCE
All directorsEach director attended more than 75% of the meetings of our Board and their respective committees during the calendar year 2022.2023.
98% | Average of |
REGULAR MEETINGS WITHOUT MANAGEMENT
We schedule Non-Management and Independent Director sessions following every routine Board meeting to provide the opportunity for these director groups to regularly meet without management present. As Lead Independent Director, Mr. Graf presides over these sessions.sessions and may adjourn additional meetings as he sees fit.
STANDING COMMITTEES
2024 PROXY STATEMENT | 14 |
PROPOSAL 1: ELECTION OF DIRECTORS
STANDING COMMITTEES
Our Board has four standing committees.committees that oversee key areas of the Board’s oversight responsibilities.
AUDIT COMMITTEE
100% Independent 8 Meetings in
| Generally, the Board has charged the Audit Committee with overseeing the integrity of MAA’s financial statements, MAA’s compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications and independence, the performance of MAA’s Internal Audit Department and independent registered public accounting firm,
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More specifically, the Audit Committee Charter requires the committee to:
✓ | Appoint, determine the compensation of, oversee and evaluate the work of the independent registered public accounting firm |
✓ | Review and discuss with management and the independent registered public accounting firm the annual audited and quarterly unaudited financial statements and our disclosure under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Form 10-Qs and Form 10-Ks |
✓ | Discuss earnings press releases, including the use of “pro forma” or “adjusted” non-GAAP information, and discuss generally the financial information and earnings guidance which has been or will be provided to analysts and rating agencies |
✓ | Review and discuss with management and the independent registered public accounting firm the adequacy and effectiveness of our systems of internal accounting and financial controls |
✓ | Establish procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters |
✓ | Review with management and the independent registered public accounting firm our compliance with the requirements for qualification as a REIT |
✓ | Meet with management responsible for oversight of the Company’s cybersecurity, crisis management and enterprise risk management programs at least annually to discuss the Company’s cybersecurity risks, including a review of the endeavors management has undergone to identify, assess, monitor and address those risks as well as response and recovery plans to address cybersecurity incidents |
✓ | Conduct prior reviews of related party transactions as described in NYSE Rule 314.00 and prohibit such transactions if determined to be inconsistent with the interests of MAA and its shareholders |
✓ | Meet with management at least annually regarding |
✓ | Review and reassess annually the Audit Committee Charter and submit any recommended changes to the Board for its consideration |
✓ | Issue a report annually as required by the SEC’s proxy solicitation rules |
PROPOSAL 1: ELECTION OF DIRECTORS
COMPENSATION COMMITTEE 5 Members during 100% Independent
| Generally, the Board has charged the Compensation Committee with establishing sustainable compensation policies and incentive award plans that attract, motivate and retain high quality leadership and compensate them in a manner consistent with the interests of MAA’s shareholders, overseeing MAA’s risk assessment and management relative to compensation structures, and ensuring compliance with the rules and regulations of the SEC in regards to certain disclosures required in this Proxy Statement. |
More specifically, the Compensation Committee Charter requires the committee to:
✓ | Review and approve our compensation objectives |
✓ | Annually review and recommend the compensation programs, plans, and awards for the CEO to the Board and review and approve the same for the other executive officers, after taking into consideration any past “Say-on-Pay” votes by our shareholders |
✓ | Review and approve any employment and severance arrangements and benefits of the CEO and other executive officers |
✓ | Recommend to the Board how often MAA should submit the “Say-on-Pay” vote to shareholders |
✓ | Recommend the compensation for non-employee directors to the Board |
✓ | Evaluate and oversee risks associated with the company’s compensation policies and practices |
✓ | Act as administrator, as may be required, for our equity-related incentive plans |
✓ | Review and discuss with management the information contained in the Compensation Discussion and Analysis section of the Proxy Statement |
✓ | Assess the independence of, retain and oversee compensation consultants, outside counsel and other advisors assisting the committee with the performance of its duties |
✓ | Review and reassess annually the Compensation Committee Charter and recommend any proposed changes to the Board for approval |
✓ | Issue a report annually related to executive compensation, as required by the SEC’s proxy solicitation rules |
✓ | Review and discuss with management information related to pay equity amongst associates |
2024 PROXY STATEMENT | 15 |
PROPOSAL 1: ELECTION OF DIRECTORS
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
100% Independent
| Generally, the Board has charged the Nominating and Corporate Governance Committee with identifying and recommending individuals qualified to serve as Directors of MAA, reviewing the composition, structure and functioning of the Board, recommending corporate governance policies for the Board and MAA, establishing and maintaining CEO and Director succession plans and procedures, and overseeing the annual evaluation of the Board, its committees and management. |
More specifically, the Nominating and Corporate Governance Committee Charter requires the committee to:
✓ | Provide assistance and oversight in identifying qualified individuals to serve as members of the Board and make recommendations to the Board regarding the selection and approval of the Director Nominees to be submitted for a shareholder vote at the annual meeting of shareholders |
✓ | Review the qualification and performance of incumbent Directors to determine whether to recommend them as Director Nominees for re-election |
✓ | Review and consider candidates for Directors who may be suggested by any Director or executive officer, or by any shareholder if made in accordance with our charter, bylaws and applicable law |
✓ | Provide assistance and oversight in recruiting and recommending qualified nominees for new or vacant positions on the Board |
✓ | Make committee membership recommendations to the Board |
✓ | Oversee the annual evaluation of the effectiveness of the current policies and practices of the Board and its committees |
✓ | Review considerations relating to Board composition and develop and recommend criteria for membership including diversity, independence, experience, expertise and skills to the Board for its approval |
✓ | Review potential Director conflicts of interest |
✓ | Review and recommend to the Board appropriate corporate governance principles that best serve the practices and objectives of the Board |
✓ | Review the orientation process and the continuing education program for all Directors, as may be required by applicable listing standards or other regulatory requirements |
✓ | Oversee succession planning for both the Board and CEO, and routinely obtain input from and update the full Board on succession plan reviews |
✓ | Annually review political contributions made by MAA |
✓ | Review and reassess annually the Nominating and Corporate Governance Committee Charter and submit any proposed changes to the Board for approval |
PROPOSAL 1: ELECTION OF DIRECTORS
REAL ESTATE INVESTMENT COMMITTEE
| Generally, the Board has charged the Real Estate Investment Committee with considering various investment opportunities presented by management and approving or disapproving specific acquisition, disposition or development investment projects for MAA that are in line with the Board approved strategy and within certain limits as established by the Board from time to time.
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More specifically, the Real Estate Investment Committee Charter requires the committee to:
✓ | Consider and approve or disapprove specific property acquisitions presented by management which fall within the individual and aggregate committee approval levels as periodically established by the Board |
✓ | Consider and approve or disapprove the acquisition of land and subsequent initiation of construction for development projects presented by management which fall within the individual and aggregate committee approval levels as periodically established by the Board |
✓ | Refer and make a recommendation to the Board regarding proposed transactions which fall outside of the individual or aggregate approval levels as periodically established by the Board |
✓ | Consider and approve or disapprove disposition of individual properties not listed as a potential disposition property in the annual strategic plan as reviewed and approved by the Board as well as any property for which the disposition would result in materially lower net proceeds than previously |
✓ | Review and reassess annually the Real Estate Investment Committee Charter and submit to the Board any recommended |
Our Board may, from time to time, form other committees as circumstances warrant. Such committees will have the authority and responsibility as delegated by the Board. Copies of the Audit, Compensation, Nominating and Corporate Governance and Real Estate Investment Committee Charters are available at no charge. See page 36 for information on how to request a copy or access the charters online.
ADDITIONAL BOARD GOVERNANCE
We believe that effective corporate governance is the foundation to our success and long-term sustainability and critical to our ability to create long-term value for our shareholders. The Board and its committees regularly review our corporate governance policies and benchmark them against other public companies, our peers and industry best practices. The Board also considers feedback we receive from investor engagements and other stakeholders of MAA. We will continue to monitor emerging developments in corporate governance and enhance our policies and procedures when required by regulation or when our Board determines that it would benefit our shareholders.
2024 PROXY STATEMENT | 16 |
PROPOSAL 1: ELECTION OF DIRECTORS
GOVERNANCE PRACTICES
PRACTICES RELATED TO DIRECTOR COMPENSATION
INDEPENDENT EXTERNAL DIRECTOR COMPENSATION CONSULTANT
The Board periodically engages an independent external compensation consultant to benchmark non-employee Director compensation and makes recommendations to the Compensation Committee on appropriate compensation packages. The consultant advises on both the size, form and mix of compensation components and provides no services to MAA outside of executive and non-employee Director compensation analysis and advice.
NO DIRECTOR COMPENSATION FOR EMPLOYEES
Directors who are also employees of MAA receive no compensation for serving on the Board.
CAPS ON NON-EMPLOYEE DIRECTOR COMPENSATION
Under the Second Amended and Restated MAA 2013 Stock2023 Omnibus Incentive Plan approved by shareholders at the 20182023 Annual Meeting of Shareholders, the total value of cash paid to a Director in one calendar year cannot exceed $250,000 and the total value of equity awards granted to a Director in one calendar year cannot exceed $400,000. Under the 2023 OMNIBUS that is being presented to shareholders for approval at the Annual Meeting (see Proposal 5), the total value of cash paid to a Director in one calendar year cannot exceed $300,000 and the total value of equity awards granted to a Director in one calendar year cannot exceed $500,000.
PRACTICES RELATED TO EXECUTIVE COMPENSATION | See Pages |
For details regarding governance practices in place specific to the compensation of our NEOs, please see the Compensation Approach and Governance section of this Proxy Statement.
PRACTICES RELATED TO FINANCIAL REPORTING, ACCOUNTING POLICIES AND AUDITING | See Pages |
For details regarding governance practices in place specific to our accounting policies and procedures, controls over financial reporting and auditing practices, please see the Audit Committee Policies section of this Proxy Statement.
PROPOSAL 1: ELECTION OF DIRECTORS
PRACTICES RELATED TO ESGCORPORATE RESPONSIBILITY
BOARD AND COMMITTEE OVERSIGHT
Societal and investor interests in matters related to ESGcorporate responsibility continue to grow and our Board recognizes that sustainability matters are critical to our ability to execute on our long-term strategic goals. The Board is directly responsible for setting MAA’s strategy, which includes long-term sustainability planning. As such, at its March 2022 meeting, the Board approved changes to the Audit Committee Charter to delegate oversight responsibility for our ESGcorporate responsibility strategies, programs, disclosures and controls to the Audit Committee. The Audit Committee will meetmeets with executive management responsible for the execution of our ESGcorporate responsibility programs on at least an annual basis to consider the adequacy and effectiveness of internal controls related to our ESGcorporate responsibility disclosures and will provideprovides a report to the Board on those discussions. Directors also participate in surveys, along with associates, residents and investors, from time to time to identify those areas most important to our constituents and help develop our corporate responsibility plans.
Other Board committees will assist the Board and Audit Committee with ESGcorporate responsibility oversight by continuing to evaluate management’s efforts related to each of their respective areas of oversight. In addition, the Board will continue to receive quarterly reports from management on ESGcorporate responsibility matters and discuss various aspects of ESGcorporate responsibility during its annual strategy session and throughout the year as deemed appropriate. Each committee also often discusses respective areas of ESGcorporate responsibility during their respective committee meetings.
For access to additional materials related to our corporate responsibility efforts see page 6.
PRACTICES RELATED TO CYBERSECURITY AND INFORMATION SECURITY
BOARD AND AUDIT COMMITTEE OVERSIGHT
The Audit Committee of our Board is responsible for oversight of risks from cybersecurity threats. The Audit Committee receives regular reports, including an annual cybersecurity maturity assessment and quarterly scorecards, from our Chief Technology and Innovation Officer. Those reports cover topics related to information security, privacy, and cyber risks and our risk management processes, including the status of any recent cybersecurity events, the emerging threat landscape, and the status of capital investments in our information security infrastructure. The Audit Committee provides regular reports to the full Board. In addition, the Audit Committee and the Board have authority to engage external consultants, including legal, accounting or other advisors, such as cybersecurity firms, in carrying out its oversight of our cybersecurity risk management program. Likewise, the Audit Committee or the Board may request members of management or others to attend meetings at which cybersecurity risk management is addressed.
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The protectionPROPOSAL 1: ELECTION OF DIRECTORS
As part of our cybersecurity risk management program, we have adopted an incident response plan which provides for controls and procedures upon the occurrence of a cybersecurity event. In connection with that plan, we have established a cross-functional critical response team, comprised of members of management under the direction of our Chief Technology and Innovation Officer and CAO and General Counsel, which is responsible for monitoring our cybersecurity incident response. In addition, this critical response team performs an impact assessment in the event of the information technology systemsoccurrence of a cybersecurity event meeting certain criteria, which is elevated for the team’s review and, if any such cybersecurity event is determined by the critical response team to have the potential to have a material impact on the Company, the cybersecurity event is elevated for further review and assessment by a senior management team, which we relyincludes all of the members of our standing crises control committee, and, under certain circumstances, the Audit Committee and/or the Board.
Cybersecurity risks are part of the broader ERM process overseen by our Board. ERM risk assessment results are presented to operate and to protect the personal information that our residents, prospects, associates and shareholders entrust with us is critically important to our Board, and us. Because of this,status updates are delivered quarterly to the Audit Committee.
CYBERSECURITY RISKS
For a full discussion on our Board has delegated oversight of management’s endeavors to identify, assess, monitor and addresscybersecurity risk management program please see Item 1C. Cybersecurity in our Form 10-K filed with the SEC on February 9, 2024. A discussion on risks we face associated with cybersecurity incidents as well as management’s responsesee “Risk Factors – We rely on information technology systems in our operations, and recovery plans associated with such events to the Audit Committee.
To perform these oversight responsibilities, the Audit Committee meets with executive management responsible for cybersecurity and enterprise risk-management on management’s endeavors and events related to cybersecurity and information security multiple times a year, receiving updates on a more frequent basis if needed. The Audit Committee provides quarterly updates on these discussions to the Board. In addition, executive management presents an annual update on cybersecurity endeavors to the full Board, provides the Board with quarterly update reports on cybersecurity developments and also participates in discussions surrounding cybersecurity during Board strategy sessions.
CYBERSECURITY RISKS
A detailed discussion of the risks surrounding aany breach or thesecurity failure of those systems could materially adversely affect our or our service providers’ security measures can be foundbusiness, financial condition, results of operations and reputation” in Item 1A. Risk Factors in our Form 10-K filed with the SEC on February 14, 2023.
DEDICATED RESOURCES9, 2024.
We have a dedicated cybersecurity team, including associates holding CISSM, CISSP and ISO certifications. The cybersecurity team partners with infrastructure resources, our Legal and Risk Management departments, Internal Audit, and our internal Risk Oversight and Crisis Response Committee to identify and mitigate, to a reasonable level, risks associated with cyber liability or potential liability for breaches of our or our service providers’ information technology systems and business operations disruptions. We also partner with external experts to assist in structuring, measuring and auditing our cybersecurity program.
STEPS TO PROTECT SYSTEMS AND DATA
We take steps, and generally require our service providers to take steps through onboarding due diligence and contractual obligations, to protect the security of the information processed, transmitted and stored in our and our service providers’ information technology systems. We utilize various procedures, systems, software and tools, including governance risk compliance tools to help manage and prioritize risks, in our efforts to maintain a strong security posture.
We participate in various industry and professional cybersecurity-focused groups and events, and also partner with the Federal Bureau of Investigation in order to stay up to date on developing risks, threat actor activities and mitigation capabilities as well as cybersecurity investigations.
We also have our cybersecurity program evaluated on an annual basis by an independent external consultant to assess the maturity of our cybersecurity program. Results of these assessments are reported to the Audit Committee and Board and recommendations for further improvements are evaluated for implementation.
ASSOCIATE AWARENESS AND TRAINING
We believe the first line of defense against cybersecurity attacks is our associates. As such, all associates participate in a robust training and awareness program that includes mandatory web-based training upon hire and annually thereafter, skill-escalating monthly phish testing with follow-up training and communications, periodic hot topic communications, educational videos and alerts to provide timely information and to alert associates on newly identified or recurring threats to both MAA and the business world in general.
To provide this information we partner with the Federal Bureau of investigation and various cybersecurity industry groups to be aware of new and developing threats, as well as to provide educational materials and videos.
PROPOSAL 1: ELECTION OF DIRECTORS
TESTING SYSTEM DEFENSES
We perform internal penetration testing encompassing our network and web applications on an annual basis and perform internal vulnerability scanning weekly, reviewing all incidents and resolutions with senior management. In addition, we also engage 24/7 external monitoring and remediation services to supplement our internal efforts.
Annually, Deloitte performs evaluations of our cybersecurity program, including analysis of our systems and security measures, processes and procedures, and documentation, among other matters, and proposes additional measures that could further strengthen our cybersecurity efforts. Deloitte also benchmarks the maturity of our program not only against our industry, but also other industries, including those with higher risk of cybersecurity attacks. These results are provided to the Audit Committee and Board to assist them with their oversight of our cybersecurity program.
BUSINESS CONTINUITY
Our ability to execute on our business strategy over the long-term is dependent on the use of technology. We maintain business disruption procedures, including system redundancies that allow us to operate should we not be able to access our network or service provider systems on a temporary basis. Enhancements we have made in this area are also often utilized to support seamless technology or vendor changes, minimizing any negative impact to our associates and residents of new service and technology offerings.
INSURANCE
We recognize that the risk of a data breach or security failure has generally increased due to the rise in new technologies and the increased sophistication and activities of the perpetrators of attempted attacks and intrusions. The security measures we and our service providers put in place cannot provide absolute security and we may suffer a cybersecurity or information security event. As such, we have insurance in place to help defray the cost should such an event occur.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
BOARD AND COMMITTEE OVERSIGHT
As part of the annual Director Nominee selection process, the Nominating and Corporate Governance Committee, as well as the full Board, reviews related party transactions and any potential conflicts of interest. Under its written charter, the Audit Committee is required to review and discuss with management and our independent registered public accounting firm material related party transactions as required by applicable accounting and regulatory pronouncements. The charter also requires the Audit Committee to conduct prior reviews of related party transactions as described in NYSE Rule 314.00 and prohibit such transactions if determined to be inconsistent with the interests of MAA and its shareholders. All transactions involving related parties must be approved by a majority of the disinterested members of our Board. Based on the information presented to it, the Board has determined that no
RELATED PARTY TRANSACTIONS
No potential related party transactions occurred or werehave been proposed since the beginning of 2022.2023.
CONFLICTS OF INTEREST
Under our Code of Conduct, an associate who becomes aware of a potential conflict of interest must report the conflict to a supervisor, or our Legal, Internal Audit or Human Resources department. If the potential conflict of interest involves our CEO, any of our executive officers, or a Director, our Board will determine whether to grant a waiver if a conflict of interest is determined to exist. No waivers were requested or granted in 2022.2023.
MATERIAL RELATIONSHIPS
None of our non-employee Directors had relationships with us during 20222023 that the Board determined were material.
INDEBTEDNESS OF MANAGEMENT
None of our NEOs nor Directors were indebted to us during 2022.2023.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Case, Norwood, (Chairman), T. Lowder and Nielsen, and Mses. JenningsCaplan and McGurkJennings served as members of the Compensation Committee at some point during 2022.2023. None of the members of the Compensation Committee is, nor have they ever been, an officer or associate of MAA, nor have any members of the Compensation Committee had any relationship requiring disclosure under Item 404 of Regulation S-K during 2022.2023. During 2022,2023, none of our NEOs served as a director or member of the Compensation Committee of any other entity whose executive officers served on our Board or Compensation Committee.
GOVERNANCE DOCUMENTS
Along with the elements of our Board structure and the oversight obligations contained in the committee charters, the following documents provide additional governance guidelines applicable to our Board and NEOs.
CORPORATE GOVERNANCE GUIDELINES
Copy available online and at no charge upon request. See page 36
APPLICATION
The Corporate Governance Guidelines reflect the principles by which the Board operates, ensuring the Board represents the best interests of shareholders.
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PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTOR INDEPENDENCE
1211 out of 1312 Director Nominees are Independent
At least a majority of Directors on the Board must be independent to provide appropriate oversight of management’s actions and contribute a variety of experiences and perspectives to strategy discussions.
OTHER PUBLIC BOARD SERVICE
Highest number of other public board service by any Director is 2
Directors can only serve on a total of three other public boards. In addition, Directors must notify the Nominating and Corporate Governance Committee before accepting any new directorship to a public board so that the Board can evaluate if a conflict of interest would exist and consider whether the Director will have sufficient time to continue to provide quality service to the Board and our shareholders.
RESIGNATION UPON EMPLOYMENT CHANGE
Directors who have a change in employer or significant change in job responsibilities must submit an offer of resignation from the Board and all committees for consideration. This allows the Board to evaluate the specific contributions of the Director and consider whether the change may impact the Director’s ability to continue to provide quality service to the Board and representation for our shareholders.
MANDATORY RETIREMENT AGE
Mandatory retirement at age 75 with no waivers allowed
Directors are ineligible for nomination for re-election once they reach the mandatory retirement age. Having a mandatory retirement age drives Board refreshment, allows for thoughtful succession planning over a longer period of time and acknowledges that a Director’s knowledge and contributions may become stale as he or she is further removed from active employment. Under the current Corporate Governance Guidelines, the Board does not have the authority to grant a waiver to the mandatory retirement age and there are no Directors or Director Nominees that are 75 or older.
Under the mandatory retirement age, Mr. NorwoodMs. Jennings is ineligible to be nominated by the Board for shareholder election at the Annual Meeting and has, therefore, not been listed as a Director Nominee in this Proxy Statement.
MAJORITY VOTE
Lowest Director approval of 88.8%90.5% of shares voted for in 20222023
Incumbent Directors must tender their resignation to the Board for consideration if they fail to receive a majority of the vote for re-election in an uncontested election.
FREQUENCY OF MEETINGS
74 Board meetings in 20222023
The Board is required to meet at least four times a year.
COMPLIANCE WITH ETHICS AND COMPLIANCE POLICIES
No waivers granted
Directors and NEOs are required to comply with all MAA ethics and compliance policies. Any waivers must be approved by disinterested members of the Board and publicly disclosed.
NON-MANAGEMENT AND INDEPENDENT DIRECTOR MEETINGS
Non-Management Directors are required to meet in executive session at regularly scheduled Board meetings and Independent Directors are required to meet at least once a year. The Board believes this provides a forum for open and candid discussion on matters or concerns involving management.
BOARD ACCESS TO MANAGEMENT AND INDEPENDENT ADVISORS
The Board and its committees have full and free access to all associates and the authority to engage independent advisors without notifying or receiving approval from MAA.
ATTENDANCE AT ANNUAL MEETING
Directors are encouraged to attend annual meetings of shareholders. All directors then in office attended the 20222023 Annual Meeting of Shareholders.
MINIMUM SHARE OWNERSHIP
100% compliance with share ownership requirements
Within five years of appointment, non-employee Directors must own 5 times the annual cash retainer fee in shares of MAA stock or the equivalent. The CEO must own 3three times his base salary and other NEOs must own 2two times their respective base salary within three years of appointment to their respective position. The Board believes share ownership in MAA better aligns the interests of Directors and management with those of our shareholders.
HOLDING PERIOD REQUIREMENT
100% compliance with holding period requirement
NEOs are required to retain ownership of at least 50% of the number of net shares, after the payment of taxes, acquired through equity incentive plans until they retire, otherwise terminate or are no longer serving as an NEO. The Board believes requiring equity ownership over time helps to ensure a focus on long-term results.
DIRECTOR EDUCATION
Directors are encouraged to attend accredited director education programs for which expenses are reimbursed by MAA. In addition, educational materials and presentations by external experts are periodically provided to the Board and its committees on various topics of interest and evolving areas.
ANONYMOUS ANNUAL PERFORMANCE EVALUATIONS
The Nominating and Corporate Governance Committee oversees the anonymous evaluation by Directors of the performance of the Board and each of their respective committees on an annual basis. Results are reviewed and discussed by each committee and the Board as a whole.
ANNUAL REVIEW
The Corporate Governance Guidelines are approved by the Board and required to be reviewed annually by the Nominating and Corporate Governance Committee.
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PROPOSAL 1: ELECTION OF DIRECTORS
CODE OF CONDUCT
Copy available online and at no charge upon request. See page 36
APPLICATION
MAA’s Code of Conduct reflects our commitment to achieving high standards of business, personal and ethical conduct. The Code of Conduct is applicable to our Board, executive officers and all other associates, including our CEO, CFO (Principal Financial Officer) and Principal Accounting Officer.
ATTESTATIONS
100% compliance
Each member of our Board and all of our executive officers annually review the requirements in the Code of Conduct, attest in writing to meet the standards therein and affirm their compliance with those standards.
WAIVERS
WAIVERS
No waivers have been granted
Amendments to or waivers from our Code of Conduct (to the extent applicable to our CEO, Principal Financial Officer or Principal Accounting Officer) are publicly disclosed on our website.
WHISTLEBLOWER POLICY
APPLICATION
APPLICATION
Copy available online and at no charge upon request. See page 6
The Whistleblower Policy sets forth the procedures established by the Audit Committee to allow for the receipt, retention and treatment of complaints received by MAA regarding accounting, internal accounting controls or auditing matters as well as the confidential, anonymous submission of concerns regarding questionable accounting and auditing matters.
ANNUAL REVIEW
The Whistleblower Policy and Procedures are required to be reviewed annually by the Audit Committee.
POLICY REGARDING THE ABILITY OF EMPLOYEES OR DIRECTORS TO ENGAGE IN HEDGING TRANSACTIONS OR PLEDGING OF SECURITIES
APPLICATION
APPLICATION
Directors, executive officers and certain designated employees who in the ordinary course of the performance of their duties have access to material, nonpublic information regarding MAA or any of MAA’s subsidiaries are prohibited from purchasing financial instruments, or otherwise engaging in transactions, that hedge or offset, or are designed to hedge or offset, any decrease in the market value of MAA equity securities granted as compensation, or held directly or indirectly by the individuals covered under the policy. These prohibitions also apply to any covered individual’s spouse, minor children, family members living within the same household and any other affiliates or affiliated entities.
PROHIBITED TRANSACTIONS
Specifically, the policy prohibits executing short sales (the selling of securities that are not owned at the time of sale), purchasing or selling derivative securities or hedging transactions (including the buying and selling of puts, calls, other derivative securities, derivative securities that provide the economic equivalent of owning securities, any opportunity to profit from the change in value of securities and any other hedging transaction), using securities as collateral on margin accounts and pledging securities as collateral for a loan.
These prohibitions relate to all MAA and MAA subsidiary securities including common stock, preferred stock, units in limited partnerships, options to purchase common stock, any other type of securities that MAA or MAA’s subsidiaries may issue (such as convertible debentures, warrants, exchange-traded options or other derivative securities), any derivative securities that provide the economic equivalent of ownership of any securities issued by MAA or MAA’s subsidiaries, and any opportunity to profit from any change in the value of any of the securities issued by MAA or MAA’s subsidiaries.
EXCEPTIONS
While MAA’s policy prohibits Directors, executive officers and other individuals, affiliates and affiliated entities (as outlined above) from pledging securities as collateral on a loan, at the time the prohibition was adopted, a one-time exception was made to grandfather an existing pledge amount which was already in place. The pledge was deemed to be of immaterial risk to shareholders and cannot be increased or expanded. No additional exceptions for pledges have been made, and the Nominating and Corporate Governance Committee has determined that no other exceptions for pledges will be granted.
BYLAWS AND CHARTER PROVISIONS
ANNUAL ELECTIONS OF DIRECTORS
MAA’s charter requires the annual election of all Directors. The Board believes that annual elections is an appropriate timeframe to ensure that Directors are being held accountable to shareholders.
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PROPOSAL 1: ELECTION OF DIRECTORS
SPECIAL MEETINGS OF SHAREHOLDERS
See page 36 for how to access a copy of our bylaws for more details.
MAA’s bylaws allow any of the following to call a special meeting of the shareholders.
✓ | CEO |
✓ | President |
✓ | Majority of the Board |
✓ | Majority of the Independent Directors |
✓ | Shareholders representing more than 10% of voting shares |
PROXY ACCESS AND OTHER METHODS FOR SHAREHOLDERS TO RECOMMEND A DIRECTOR NOMINEE
See pages 92-9380-81 for timing details regarding the 20242025 Annual Meeting of Shareholders
HAVE YOUR DIRECTOR CANDIDATE INCLUDED IN OUR PROXY MATERIALS
Pursuant to the proxy access provisions of our bylaws, a shareholder or a group of up to 20 shareholders that have collectively owned at least three percent of MAA’s common stock continually for a period of at least three years can nominate and include in our proxy materials, Director candidates constituting up to 20% of the Board, provided that the shareholder(s) and the candidates satisfy the requirements specified in our bylaws. See pages 20-21 for more information on shareholder nominations for director.
DIRECTLY NOMINATE A CANDIDATE FOR ELECTION BY SHAREHOLDERS
Shareholders who meet the requirements provided in our bylaws can directly nominate a candidate for election by our shareholders at an annual meeting. To directly nominate a candidate for election by our shareholders, other than pursuant to the proxy access provision of our bylaws, you must provide the information and documents required in our bylaws at our corporate headquarters. In addition to satisfying the requirements under our bylaws, shareholders who intend to solicit proxies in support of Director nominees other than the Board’s nominees must also comply with the additional requirements of Rule 14a-19(b) under the Exchange Act. See pages 20-21 for more information on shareholder nominations for director.
RECOMMEND A CANDIDATE TO THE NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
Shareholders can recommend a Director candidate for consideration by our Nominating and Corporate Governance Committee. To recommend a candidate, the recommendation must be received at our corporate headquarters and include the required information specified in our bylaws. See pages 20-21 for more information on shareholder nominations for director.
SHAREHOLDER ENGAGEMENT
BOARD AND MANAGEMENT ENGAGEMENT
The Board’s primary role is to represent the long-term interests of our shareholders. MAA’s executive and senior management, led by associates solely-focused on investor relations, proactively engages with our shareholders through a year-round engagement program overseen by the Board. We utilize numerous vehicles to directly reach and listen to our investors. We also periodically participate in various investor round-table events hosted by industry or other associations that provide broader insight on developing investor interests and concerns. The Board is routinely updated with feedback received from investors and can be communicated with directly. See page 36 for information on how to reach the Board.
SHAREHOLDER DRIVEN GOVERNANCE
Collaborations with our shareholders have resulted in many enhancements through the years that we believe strengthen our corporate governance and contribute to the long-term sustainability and success of our company.
✓ | Moving from staggered to annual elections of Directors |
✓ | Amending our bylaws to encompass proxy access rights for shareholders |
✓ | Publishing annual Corporate Responsibility Reports |
✓ | Expanding Board diversity disclosures including racial makeup of the Board |
✓ | Expanding disclosures on the qualifications and contributions of individual Director Nominees |
✓ | Enhancing Board oversight of |
✓ | Adopting a Policy on Political Contributions |
20222023 SHAREHOLDER ENGAGEMENTS
In 2022,2023, we continued to engage with shareholders through various platforms. We held or participated in sixnine investor conferences, twoone non-deal roadshows, 19roadshow, 21 property tours, one in-person meeting at our headquarters, four quarterly earnings release calls, one shareholder meeting and numerousover 100 one-on-one calls with institutional investors, analysts and retail investors to stay connected, provide information regarding MAA and our strategy, and learn about matters that are important to our shareholders. As a result, we had approximately 500 contacts580 points of contact with shareholders and over 100 points of contact with analysts in 2022,2023, representing a majorityapproximately 67% of the outstanding shares of our common stock.
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PROPOSAL 1: ELECTION OF DIRECTORS
PROCESS FOR IDENTIFYING AND
The Board is responsible for recommending Director Nominees to our shareholders for election at our annual meetings and, from time to time, for appointing Directors to fill vacancies on the Board. Our Board has delegated the responsibility for evaluating Board needs and the process of identifying and recruiting Director candidates for Board consideration to the Nominating and Corporate Governance Committee. Following is the general process the Nominating and Corporate Governance Committee utilizes to identify and select Director Nominees.
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PROPOSAL 1: ELECTION OF DIRECTORS
SELECTING DIRECTOR NOMINEES
While the below table generally reflects the overall process utilized by the Nominating and Corporate Governance Committee to determine the needs of the Board, identify and select a candidate and make a recommendation to the Board, the committee may, from time to time, adapt the process, including the factors considered, utilize alternative sources to identify potential candidates or make other adjustments as the committee deems appropriate to address the priorities of any given situation.
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PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTOR NOMINEES FOR ELECTION
DIRECTOR NOMINEES AS A GROUP
The Board believes that each Director Nominee being presented for election has high ethical standards and has the time, ability and desire to execute their duties in representing the best interests of our shareholders. The Director Nominees are also geographically dispersed throughout our portfolio footprint and/or have MAA market experience offering critical market expertise to our portfolio strategy. Furthermore, the Board feels the unique skills of each Director Nominee collectively provides a strong foundation for the Board’s strategic oversight and risk management responsibilities and provides the necessary expertise for the responsibilities delegated to the Board committees.
The following table and graphs provide a summary overview of the Director Nominees as a group, including identification of the number of individual Director Nominees that satisfy each of the key knowledge and experience factors our Nominating and Corporate Governance Committee has identified as necessary for the effective oversight of our strategy and risk management. The additional contributions that each Director Nominee offers to the strength of our Board and its committees and the leadership and oversight of MAA are outlined in their individual write-ups preceding this summary. The Gender and Race/Ethnicity information provided in the table is as voluntarily disclosed by the respective Director Nominee. The Committee Service section represents committee assignments assuming all Director nominees are elected to serve by shareholders at the Annual Meeting.
Age is as of May 21, 2024, the meeting date for the Annual Meeting.
DEMOGRAPHICS | ||||||
DIRECTOR NOMINEE | INDEPENDENCE | AGE | TENURE | GENDER | RACE/ ETHNICITY | POSITION |
H. Eric Bolton, Jr. | Management | 67 | 1997 | Male | White | CEO of MAA and Chairman of the Board |
Deborah H. Caplan | Independent | 61 | 2023 | Female | White | Past EVP, Human Resources and Corporate Services, NextEra Energy, Inc. |
John P. Case | Independent | 60 | 2023 | Male | White | Principal, Bunker Hill Group Past CEO of Realty Income Corporation |
Tamara Fischer | Independent | 68 | 2023 | Female | White | Executive Chairman, National Storage Affiliates Trust |
Alan B. Graf, Jr. | Lead Independent | 70 | 2002 | Male | White | Past EVP and CFO of FedEx Corporation |
Edith Kelly-Green | Independent | 71 | 2020 | Female | Black | Founding Partner of JKG Properties LLC and The KGR Group Past VP and Chief Sourcing Officer of FedEx Express |
James K. Lowder | Independent | 74 | 2013 | Male | White | Chairman of the Board of Directors and President of The Colonial Company |
Thomas H. Lowder | Independent | 74 | 2013 | Male | White | Past Chairman of the Board of Trustees and CEO of Colonial Properties Trust |
Claude B. Nielsen | Independent | 73 | 2013 | Male | White | Past Chairman of the Board of Directors and Past CEO of Coca-Cola Bottling Company United, Inc. |
W. Reid Sanders | Independent | 74 | 2010 | Male | White | President of Sanders Properties, LLC Past EVP of Southeastern Asset Management, President of Longleaf Partners Funds |
Gary S. Shorb | Independent | 73 | 2012 | Male | White | Executive Director of the Urban Child Institute Past President and CEO of Methodist Le Bonheur Healthcare |
David P. Stockert | Independent | 62 | 2016 | Male | White | Past CEO and President of Post Properties, Inc. |
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PROPOSAL 1: ELECTION OF DIRECTORS
AGGREGATE DIRECTOR NOMINEE DEMOGRAPHIC
2024 PROXY STATEMENT
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PROPOSAL 1: ELECTION OF DIRECTORS
INDIVIDUAL DIRECTOR NOMINEE DETAILS
The following pages provide Individual information on each Director Nominee being presented for approval by shareholders at the 20232024 Annual Meeting. Each writeup includes work history experience, the key knowledge and experience factors the Director Nominee contributed to the Board as a whole, additional contributions the Director Nominee brings to the Board, the factors our Nominating and Corporate Governance Committee and Board considered in determining if the Director Nominee was qualified to serve on the Board and certain Board committees, along with current Board leadership positions and service on other public boards.
A summary of all of the contributions the Director Nominees bring to the Board as a whole, follows the individual writeups on pages 38-39. Nominee ages are given as of the date of the Annual Meeting.
Director Nominee ages reflect the age of the individual on the date of the 20232024 Annual Meeting (May 16, 2023)21, 2024).
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Bolton joined MAA in 1994 as VP of Development, was named COO in February 1996 and was subsequently promoted to President in December 1996. Mr. Bolton has served as our CEO since October 2001 and he became Chairman of the Board in September 2002. Prior to joining MAA, Mr. Bolton served as EVP and CFO of Trammell Crow Realty Advisors, for which he worked for more than five years. Prior to that, Mr. Bolton worked in the commercial banking industry for seven years.
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Mr. Bolton brings extensive multi-family real estate experience to the Board. His career in real estate has encompassed all aspects of the industry from investment, new development, acquisitions and dispositions, property repositioning and property operations. Mr. Bolton has served on the Executive Committee of the National Multi-Family Housing Council as well as the Advisory Board of Governors of NAREIT and currently serves as the Chairman of the Compensation Committee of EastGroup Properties, Inc., a mid-cap industrial REIT, having previously served as both Lead Director and a member of the Audit Committee. This service and his career experience, along with Mr. Bolton’s certifications as a Certified Public Accountant (inactive) and Associate of Risk Management, allows Mr. Bolton to contribute strong risk mitigation and oversight capabilities to our Board. In addition, Mr. Bolton offers long-term real estate market cycle acumen garnered over his 34-year35-year career in real estate, during which he successfully led MAA through the Great Recession (2007–2009) without discontinuing or reducing dividends to shareholders. Mr. Bolton also brings strong guidance to our ESGcorporate responsibility program, previously serving on the boards of the Memphis Botanical Garden and the Memphis Shelby Crime Commission, as well as being a past Partner Advisor to the Mid-South Minority Business Council.
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Ms. Caplan has served as EVP, Human Resources and Corporate Services for NextEra Energy, Inc. since 2013, previously serving as VP and COO for Florida Power & Light Company, a subsidiary of NextEra Energy, Inc. from 2011 to 2013 after serving as VP of Integrated Supply Chain. Prior to joining NextEra Energy, Inc., Ms. Caplan served as the SVP of Global Operations for Vendor Financial Services for GE Capital at General Electric Company, previously serving in various leadership roles for GE Aircraft Engines in manufacturing and new product development.
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Ms. Caplan’s experience with strategy and crisis management in not only a public company, but in a highly regulated industry offers valuable expertise to our Board. Her business operations and project management expertise, certification as a Six Sigma Master Black Belt and change and growth experience also provide important guidance as MAA continues to evolve to meet ever-changing customer expectations. The combination of Ms. Caplan’s workforce initiative experience, including recruiting, learning and development, health and well-being, diversity and inclusion and recognition, with her past experience serving as the Chairman of the Compensation Committee for another public board, and current service on the HR Policy Association and the International Women’s Forum makes her uniquely qualified to serve on our Compensation Committee. In addition, Ms. Caplan’s responsibilities over corporate real estate at NextEra Energy, Inc. for the past 10+over 10 years in markets that overlap our portfolio footprint, adds to our market analysis and transaction discussions. Ms. Caplan’s leadership at a leading clean energy company, along with her service on various boards and advisory committees, including the National Petroleum Council, an oil and natural gas advisory committee to the U.S. Secretary of Energy, in addition to her culture and human capital expertise adds knowledgeable guidance to our ESGcorporate responsibility strategy.
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If elected, Ms. Caplan will also joinbecome the Nominating and Corporate GovernanceChairman of the Compensation Committee.
2024 PROXY STATEMENT
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Mr. Case has served as Partner and Senior Advisor of Ares Management Corporation since 2021 and as Chairman and Principal of Bunker Hill Group since 2019. Mr. Case previously served as the CEO and member of the board of directors of Realty Income Corporation from 2013 to 2018, after serving as the President in 2013, and EVP, Chief Investment Officer from 2010 to 2013. Prior to joining Realty Income Corporation, Mr. Case worked as a real estate investment banker at various banks including Merrill Lynch, UBS and RBC Capital Markets from 1991-2010.
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Mr. Case’s experience as a CEO of a public REIT and former director of another public REIT coupled with his capital market and investor relations acumen, make him a valuable addition to the Board, providing a keen insight and understanding of our organization, including our structure as a public REIT, the regulatory environment of our industry, risk oversight expertise, and management of geographically-dispersed human capital. This experience also provides him with a keen understanding of REIT and real estate industry compensation package,packages, making him a good candidate for the Compensation Committee. Mr. Case also brings MAA market knowledge, helpful during acquisition and disposition decisions and overall portfolio strategy discussions. In addition, Mr. Case’s expertise in the commercial sector of our industry, provides valuable guidance to our commercial endeavors, which enhance the experience of our multi-family residents. Furthermore, his experience serving as the CIO and Chairman of the Investment Committee for Realty Income Corporation, and previous service as an Associate on the NAREIT Board of Governors, member of the board of directors of the National Multifamily Housing Council and member of the Urban Land Institute provides valuable expertise to serve on our Real Estate Investment Committee.
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If elected, Mr. Case will join the Compensation Committee and the Real Estate Investment Committee.
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Ms. Fischer currently serves as the Executive Chairman of National Storage Affiliates Trust, having previously served as the President and CEO from 2020 until April 1, 2023. Ms. Fischer previously served as President and CFO from 2018 to 2019, after serving as EVP and CFO from 2013 to 2018. Prior to joining National Storage Affiliates Trust, Ms. Fischer held various consulting positions from 2011 to 2012. Previously, Ms. Fischer served as EVP and CFO of Vintage Wine Trust, Inc. from 2004 to 2008 and then as a consultant to Vintage Wine Trust, Inc. from 2009 to 2010. Ms. Fischer also served as EVP and CFO for Chateau Communities, Inc. from 1993 to 2003 and held various positions with Coopers & Lybrand (now PricewaterhouseCoopers) from 1984 to 1992.
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Ms. Fischer’s experience as an Executive Chairman and CEO of a public REIT, along with her service as the Chairman of the National Self Storage Association and as a member of the Executive Board of Governors of NAREIT, makes her a valuable addition to the Board, providing extensive knowledge of our industry, and a keen insight and understanding of our structure as a public REIT, the regulatory environment of our industry, risk oversight expertise, and management of geographically-dispersed human capital. The Board has also determined that Ms. Fischer qualifies as an SECa Financial Expert, which along with her past experience serving on the Audit Committee of another public REIT, coupled with her experience leading the world’s largest producer of wind and solar energy, makes her well qualified to serve on the Audit Committee and contribute to the committee’s oversight of our ESG program.Committee. In addition, Ms. Fischer’s real estate knowledge acquired through serving as the Executive Chairman and prior CEO of National Storage Affiliates Trust, and mergers and acquisitions expertise, coupled with her risk oversight and accounting acumen, provides extensive analysis capabilities that make her a valuable member to the Real Estate Investment Committee.
If elected, Ms. Fischer will join the Audit Committee and Real Estate Investment Committee.
2024 PROXY STATEMENT
| 29 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Graf served as the EVP and CFO and as a member of the Executive Committee of FedEx Corporation from 1998 until his planned retirement in September 2020, continuing to serve as EVP and Senior Advisor through December 2020. Mr. Graf joined FedEx in 1980 as a senior financial analyst and held various management positions throughout the Finance division until serving as EVP and CFO of FedEx Express, FedEx’s predecessor, from 1991 to 1998.
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As a result of his 41-year career at FedEx, a large multinational company, including 30 years as an executive, Mr. Graf brings experienced insight in strategic vision and investments, navigation of growth, pursuit of technological and procedural innovations and organization management and development. In addition, Mr. Graf’s responsibilities for all aspects of FedEx’s global financial functions, including financial planning, treasury, tax, accounting and controls, internal audit and investor relations, along with his service as the chairman of the Audit Committee on the board of Nike, Inc., a multinational global brand and public company, offers extensive expertise to the oversight of our financial controls, audit activities, cybersecurity and risk mitigation as the Chairman of our Audit Committee. Mr. Graf currently serves on the board of Indiana University Foundation and has been recognized for his positive impact on public education. Mr. Graf has also made an impact on the medical community in the Memphis area through his prior chairmanship of the board of Methodist Le Bonheur Healthcare and his ongoing support of the FedExFamilyHouse, a home for out-of-town families of patients at Le Bonheur Children’s Hospital that was founded by Mr. Graf and his wife, providing him with unique understanding of our corporate charity, The Open Arms Foundation, which offers similar accommodations for individuals receiving long-term medical care at facilities located away from their homes.
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2024 PROXY STATEMENT
| 30 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Ms. Jennings currently serves as the Chairman of the Board of Jack Jennings & Sons, Inc., a commercial construction firm, a position she has held since 2007, having previously served as President from 1982 to 2003. Ms. Jennings served as the first female Lieutenant Governor for the State of Florida from 2003 to 2007. Prior to her service as Lieutenant Governor, Ms. Jennings served in the Florida House of Representatives from 1976 to 1980 and then the Florida Senate from 1980 to 2000, becoming the only person to have been elected to serve as President of the Florida Senate for two terms (1996 to 2000). Prior to her public service, Ms. Jennings was an elementary school teacher.
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Ms. Jennings’ construction experience within MAA’s geographical footprint brings valuable expertise to oversight of strategic investments in our development pipeline. In addition, her public service, including legislative relations on hurricane preparedness and disaster relief, provides a unique perspective on business continuity and crisis management as well as an understanding of regulatory compliance and ethical standards that makes her a valuable member of our Nominating and Corporate Governance Committee. She also contributes knowledge of public company compensation structures and controls to our Compensation Committee through her service on the Compensation Committee of another public board. Ms. Jennings’ years of public service and experience as the youngest woman ever elected to the Florida House of Representatives, the first female President of the Florida Senate (serving as such for an unprecedented two consecutive terms), and Florida’s first female Lieutenant Governor bring a unique perspective to Board discussions and provide leadership diversity and representation at our highest level of oversight, informing our approach to human capital development and reflecting our commitment to diversity and inclusion. Ms. Jennings also offers an informed perspective to the direction and oversight of MAA’s ESG initiatives through her extensive service promoting health and education of children, including having served on the board of the Nemours Foundation and the steering committee for the Children’s Movement of Florida, as well as her service on the board of directors of NextEra Energy, Inc., the world’s largest producer of wind and solar energy.
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If elected, Ms. Jennings will become the Chairman of the Compensation Committee.
PROPOSAL 1: ELECTION OF DIRECTORS
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Ms. Kelly-Green is a founding partner of JKG Properties LLC, a commercial real estate and single-family housing company formed in 2011, and The KGR Group, the owner of a large chain of restaurants formed in 2005. Ms. Kelly-Green retired from FedEx Express, a subsidiary of FedEx Corporation, as VP and Chief Sourcing Officer in 2003, having joined FedEx Corporation in 1977 as a senior accountant. Ms. Kelly-Green held various positions during her time with the company including as VP of Internal Audit from 1991 until 1993 and VP, Strategic Sourcing and Supply from 1993 until her appointment as VP and Chief Sourcing Officer. Prior to joining FedEx Corporation, Ms. Kelly-Green worked as a senior auditor for Deloitte & Touche from 1973 until 1977.
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Ms. Kelly-Green’s certification as a Certified Public Accountant (inactive), background in auditing and accounting for a global public company, previous service on the Board of Directors of Paragon National Bank, Applied Industrial Technologies, Inc., Sanderson Farms, Inc. and designation as an SECa Financial Expert and strategic and risk oversight experience gained through various entrepreneurial endeavors makesmake her a valuable member of our Audit Committee, which exercises oversight of financial statement controls, auditing procedures and capital market plans. In addition, Ms. Kelly-Green’s real estate experience also adds a non-multifamily real estate sector perspective to portfolio strategy discussions. Ms. Kelly-Green has been honored by several organizations for her extensive volunteerism and leadership with numerous civic and philanthropic organizations, including serving as the founding Chairman of The Women’s Council for Philanthropy at the University of Mississippi, as a founding board member of both the Women’s Foundation for a Greater Memphis and Philanthropic Black Women of Memphis, and for her endowment scholarships for African-American females in accounting, to name a few. Ms. Kelly-Green’s commitment to providing opportunities to others coupled with her experiences as an African-Americana Black professional in corporate organizations, starting as the youngest African-AmericanBlack candidate and one of the first African-AmericanBlack women to pass the certified public accountancy exam in Tennessee to becoming the first African-AmericanBlack VP at FedEx Express, provide a unique and important perspective to the Board’s and Audit Committee’s oversight of our ESGcorporate responsibility program, particularly as to our approach to human capital and inclusion and diversity efforts. In addition, Ms. Kelly-Green’s former service as the chairman of the Corporate Governance CommitteeCommittees for Applied Industrial Technologies, Inc. and Sanderson Farms, Inc. brings an outside industry perspectiveperspectives that enhancesenhance discussions in our Nominating and Corporate Governance Committee.
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If elected, Ms. Kelly-Greene will also join the Nominating and Corporate Governance Committee.
| 31 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Lowder has served as Chairman of the Board of Directors and President of The Colonial Company and several subsidiary and related companies since 1995, including the Lowder Construction Company for which Mr. Lowder was appointed as President in 1974.
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Mr. Lowder has considerable construction and development expertise stemming from his career in the real estate industry, including through leading The Colonial Company, which invests in and manages companies involved in real estate development and insurance and, at times, serving on several construction industry boards including the Home Builders Association of Alabama and the Greater Montgomery Home Builders Association. In addition, much of Mr. Lowder’s experience is within MAA’s geographic footprint, providing knowledgeable insight on markets, strong oversight of our development pipeline and thoughtful input on our portfolio strategy, making him a valuable member of the Real Estate Investment Committee. Mr. Lowder has a history of civic development and community service having served, at times, on the board of Leadership Montgomery, as president of the Montgomery YMCA and past chairman of the Montgomery Area United Way Campaign. Mr. Lowder continues to serve on the boards of a number of charitable organizations that support the arts community and is the Managing Director of The J.K. Lowder Family Foundation, a non-profit organization founded by Mr. Lowder and his wife to support and develop the idea of community and what it means to be an involved, conscientious citizen. Mr. Lowder’s community service and leadership coupled with his 23 years of experience serving on the board of Alabama Power Company, a subsidiary of Southern Company, recipient of the Edison Electric Institute Edison Award for its portfolio of energy storage research and development initiatives, allows him to provide thoughtful and informed oversight and direction to our ESGcorporate responsibility initiatives.
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James K. Lowder is the brother of Thomas H. Lowder, another one of our Directors.
| 32 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Lowder served as the Chairman of the Board of Trustees for Colonial Properties Trust from its initial public offering in 1993 until its merger with MAA in October 2013 and as its CEO from 1993 until he retired in 2006 and again from 2008 until October 2013. Mr. Lowder previously served as President and CEO of Colonial Properties, Inc., the predecessor of Colonial Properties Trust, from 1976 until 1993.
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Mr. Lowder’s leadership of Colonial Properties Trust along with his prior service on the board of NAREIT provides him with a keen insight and understanding of our organization including our structure, the regulatory environment of our industry, management of geographically-dispersed human capital, demographics and expectations of our customer base, multifamily property operations, capital markets and investor relations. Thus, Mr. Lowder provides the board with an independent expert voice during strategy and portfolio discussions. The overlap of the markets of the prior Colonial Properties Trust and MAA add to Mr. Lowder’s real estate investment and development expertise, making him a valuable member of the Real Estate Investment Committee. Mr. Lowder also contributes to the deliberations of our Compensation Committee through his knowledge of public company executive compensation structures and his experience serving on the Compensation Committee for the Children’s Hospital of Alabama. In addition to serving on the board for the Children’s Hospital of Alabama (past chairman), Mr. Lowder also serves on the board of the Quarterbacking for Children’s Health Foundation and previously served on the boards of the University of Alabama Health Services Foundation and the United Way of Central Alabama (past chairman), amongst others. Mr. Lowder’s extensive philanthropic endeavors add thoughtful and informed direction to the oversight of our ESGcorporate responsibility initiatives.
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Thomas H. Lowder is the brother of James K. Lowder, another one of our Directors.
| 33 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Nielsen has served as the Chairman of the Board of Directors for Coca-Cola Bottling Company United, Inc. since 2003. Mr. Nielsen also served as CEO of Coca-Cola Bottling Company United, Inc. from 1991 until his planned retirement in 2016. Mr. Nielsen joined the company in 1979 and held a variety of operational and managerial positions until his appointment as President in 1990.
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As a result of his 42-year career in an essential business industry and experience leading a company through tremendous periods of growth and several mergers, Mr. Nielsen provides our Board with a wealth of insight in setting the strategic direction of MAA, considering the scope and speed at which an organization can accept and adapt to change and identifying potential obstacles and risks to successful integrations. In addition, he also brings an understanding of the challenges of managing, developing and leading human capital in geographically-dispersed locations as well as operating in many of the markets within MAA’s portfolio footprint. Mr. Nielsen previously served on the board of directors of AmSouth Bank Corporation and Regions Financial Corporation, providing the board with additional insight in banking and financial affairs. Furthermore, Mr. Nielsen, having been both appointed and retiring as CEO of Coca-Cola Bottling Company United, Inc. as a result of formal succession events, brings first-hand insight regarding succession planning along with oversight experience gained from his prior service on the Governance Committee of Colonial Properties Trust to our Nominating and Corporate Governance Committee. Mr. Nielsen also offers a unique perspective to our Compensation Committee having previously served as the Chairman of the Compensation Committee for Colonial Properties Trust, a public REIT prior to our merger in 2013, while also understanding private company approaches to executive compensation through his experience both as CEO and Chairman of the board of directors of Coca-Cola Bottling Company United, Inc. Mr. Nielsen has been involved at times with several civic and charitable organizations including the United Way of Central Alabama, the American Cancer Society, the Birmingham Rotary Club and the Birmingham Business Alliance, amongst others. Mr. Nielsen also previously served as Chairman of the Coca-Cola Scholars Foundation and, along with his wife, has supported various initiatives at the University of Alabama at Birmingham, including innovation and business incubation as well as cancer research. Mr. Nielsen’s history of civic and community support and development bring an engaged and service-minded perspective to the oversight of MAA’s ESGcorporate responsibility initiatives.
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| 34 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Sanders has served as President of Sanders Properties, LLC since its formation in 2004. Mr. Sanders also currently serves on the Investment Committee for several limited liability companies involved in commercial real estate. Mr. Sanders was the co-founder of and, from 1975 until 2000, served as the EVP of Southeastern Asset Management and the President of Longleaf Partners Fund. From 1971 until 1975, Mr. Sanders served as an investment officer and worked in credit analysis and commercial lending in the banking industry.
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The combination of Mr. Sander’s financial acumen, knowledge of capital markets and deep background in investing in the real estate industry with his experience serving on the Risk Oversight Committees of both a public REIT and mortgage trust make him a valuable member of our Audit Committee. In addition, Mr. Sanders provides commercial sector knowledge to the Board’s portfolio strategy discussions as well as an understanding of the regulatory requirements surrounding our organizational structure as a REIT. Mr. Sanders has also served, at times, on numerous boards reflecting a wide-range of civic and philanthropic endeavors encompassing the arts, education and medical services and is currently serving as Chairman of the board of directors of the Hugo-Dixon Foundation and on the Board of Trustees for the Dixon Gallery and Gardens, and The Dixon Gallery and Gardens Endowment Fund. Mr. SandersSanders’ dedication to supporting the arts and community enhancement adds thoughtful guidance to our ESGcorporate responsibility strategy.
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| 35 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Shorb has served as the Executive Director of The Urban Child Institute since February 2017. From 2016 through April 2017, Mr. Shorb served as a Senior Advisor following his planned retirement in 2016 as President and Chief Executive Officer of Methodist Le Bonheur Healthcare, an integrated healthcare system that comprises a seven-hospital operation with $2 billion in annual revenues. Mr. Shorb joined Methodist Le Bonheur Healthcare in 1990 as EVP, COO, transitioning to President and CEO in 2001. Before joining Methodist Le Bonheur Healthcare, Mr. Shorb served as President and CEO of Regional Medical Center in Memphis from 1986 to 1990, having joined the organization in 1982 as VP of Operations. Prior to his work in the healthcare industry, Mr. Shorb worked as a project engineer with Exxon after serving as a Lieutenant Commander in the U.S. Navy.
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With his background in engineering and operations and 15 years serving as the President and CEO of an integrated healthcare system, Mr. Shorb brings experienced insight related to risk mitigation, organizational management and as a provider of essential services to the Board’s oversight and strategic analysis discussions. His experience serving in a highly regulated industry requiring strong data security and privacy controls makes him a valuable member of our Audit Committee which oversees our financial statement controls and cybersecurity efforts. In addition, having been both appointed and retiring as CEO of Methodist Le Bonheur Healthcare as a result of formal succession events, he also brings experienced insight to our management and board succession plans through his service on our Nominating and Corporate Governance Committee. As well as serving as the Executive Director of The Urban Child Institute, a non-profit dedicated to promoting the education, health and well-being of young children, Mr. Shorb has extensive community service and leadership experience that brings a wealth of insight to our human capital programs, including our diversity and inclusion efforts, oversight of our corporate charity, The Open Arms Foundation, and various initiatives of our ESGcorporate responsibility program. Mr. Shorb has been recognized by numerous organizations for his decades of involvement and leadership, serving at various times on the boards of the National Civil Rights Museum, United Way, the Memphis Shelby Crime Commission, Tennesseans for Early Childhood Education (past Chairman), Crosstown High School, Rust College, The University of Memphis Foundation and the Tennessee Business Leadership Council, amongst others.
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| 36 |
PROPOSAL 1: ELECTION OF DIRECTORS
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Mr. Stockert has served as one of three general partners in Sweetwater Opportunity Fund, L.P., an Atlanta-based private real estate investment fund, since 2019. Mr. Stockert served as CEO and President of Post Properties, Inc. from 2002 until its merger with MAA in December 2016, having previously served as President and COO from 2001 until 2002. Prior to joining Post Properties, Inc., Mr. Stockert served as EVP of Duke Realty Corporation, a public real estate company, from 1999 until 2000 and as SVP and CFO of Weeks Corporation from 1995 until it merged with Duke Realty Corporation in 1999. From 1990 until 1995, Mr. Stockert was an investment banker in the Real Estate group at Dean Witter Reynolds Inc. (now Morgan Stanley) and prior to 1990 was a Certified Public Accountant.
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As a result of his leadership of Post Properties, Inc., his prior service on the board of directors of the National Multi-Housing Council and other industry associations as well as his prior experience as a lead independent director of another privatepublic REIT, Mr. Stockert provides a keen insight and understanding of our organization and industry including our structure, the regulatory environment of our industry, management of geographically-dispersed human capital, the demographics and expectations of our customer base, multifamily property operations, capital markets and investor relations. The overlap of the markets of the prior Post Properties, Inc. and MAA add to Mr. Stockert’s real estate investment and development expertise, making him a valuable member of the Real Estate Investment Committee. Mr. Stockert’s prior experience with strategic CEO succession planning for a public, multifamily REIT, brings keen insight and execution experience to our Nominating and Corporate Governance Committee. Mr. Stockert has, at times, served on the boardboards of directors of numerous civic and charitable organizations including Grady Health System, the Robert W. Woodruff Foundation, the YMCA of Metro Atlanta, the Community Foundation for Greater Atlanta, Westside Future Fund and Horizons Atlanta, amongst others. His leadership of the Post HOPE Foundation, the former corporate charity of Post Properties, Inc. dedicated to helping those in need, makes him uniquely qualified to assist the Board with the oversight of MAA’s corporate charity, The Open Arms Foundation, and guiding community involvement discussions related to our ESGcorporate responsibility initiatives.
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NON-MANAGEMENT DIRECTOR COMPENSATION
PROPOSAL 1: ELECTION OF DIRECTORS
SUMMARY
The Board believes that each Director Nominee being presented for election has high ethical standards and has the time, ability and desire to execute their duties in representing the best interests of our shareholders. The Director Nominees are also geographically dispersed throughout our portfolio footprint and/or have MAA market experience offering critical market expertise to our portfolio strategy. Furthermore, the Board feels the unique skills of each Director Nominee collectively provides a strong foundation for the Board’s strategic oversight and risk management responsibilities and provides the necessary expertise for the responsibilities delegated to the Board committees.
The following table and graphs provide a summary overview of the Director Nominees as a group, including identification of the number of individual Director Nominees that satisfy each of the key knowledge and experience factors our Nominating and Corporate Governance Committee has identified as necessary for the effective oversight of our strategy and risk management. The additional contributions that each Director Nominee offers to the strength of our Board and its committees and the leadership and oversight of MAA are outlined in their individual write-ups preceding this summary. The Gender and Race/Ethnicity information provided in the table is as voluntarily disclosed by the respective Director Nominee. The Committee Service section represents committee assignments assuming all Director nominees are elected to serve by shareholders at the Annual Meeting.
Age is as of May 16, 2023, the meeting date for the Annual Meeting.
DEMOGRAPHICS | ||||||
DIRECTOR NOMINEE | INDEPENDENCE | AGE (1) | TENURE | GENDER | RACE/ ETHNICITY | POSITION |
H. Eric Bolton, Jr. | Management | 66 | 1997 | Male | White | CEO of MAA and Chairman of the Board |
Deborah H. Caplan | Independent | 60 | 2023 | Female | White | EVP, Human Resources and Corporate Services, NextEra Energy, Inc. |
John P. Case | Independent | 59 | 2023 If Elected | Male | White | Partner and Senior Advisor, Ares Management Corporation Chairman and Principal, Bunker Hill Group Past CEO of Realty Income Corporation |
Tamara Fischer | Independent | 67 | 2023 If Elected | Female | White | Executive Chairman, National Storage Affiliates Trust |
Alan B. Graf, Jr. | Lead Independent | 69 | 2002 | Male | White | Past EVP and CFO of FedEx Corporation |
Toni Jennings | Independent | 73 | 2016 | Female | White | Chairman of the Board of Directors of Jack Jennings & Sons, Inc. Former Lieutenant Governor, State of Florida |
Edith Kelly-Green | Independent | 70 | 2020 | Female | Black | Founding Partner of JKG Properties LLC and The KGR Group Past VP and Chief Sourcing Officer of FedEx Express |
James K. Lowder | Independent | 73 | 2013 | Male | White | Chairman of the Board of Directors and President of The Colonial Company |
Thomas H. Lowder | Independent | 73 | 2013 | Male | White | Past Chairman of the Board of Trustees and CEO of Colonial Properties Trust |
Claude B. Nielsen | Independent | 72 | 2013 | Male | White | Chairman of the Board of Directors and Past CEO of Coca-Cola Bottling Company United, Inc. |
W. Reid Sanders | Independent | 73 | 2010 | Male | White | President of Sanders Properties, LLC Past EVP of Southeastern Asset Management, President of Longleaf Partners Funds |
Gary S. Shorb | Independent | 72 | 2012 | Male | White | Executive Director of the Urban Child Institute Past President and CEO of Methodist Le Bonheur Healthcare |
David P. Stockert | Independent | 61 | 2016 | Male | White | Past CEO and President of Post Properties, Inc. |
PROPOSAL 1: ELECTION OF DIRECTORS
AGGREGATE DIRECTOR NOMINEE DEMOGRAPHICS
PROPOSAL 1: ELECTION OF DIRECTORS
DIRECTOR COMPENSATION
COMPENSATION PHILOSOPHY
Upon recommendations from the Compensation Committee, the Board sets compensation for our non-employee Directors.non-management directors. Directors who are employeesassociates of MAA are not compensated for serving on the Board. In considering their recommendation to the Board on non-employeenon-management Director compensation, the Compensation Committee endeavors to establish a compensation program that will facilitate the attraction and retention of highly qualified Directors and adequately recognize the efforts and contributions of those Directors. In doing so, the committee considers many factors including the level of responsibility and liability assumed by Directors, the time commitment involved, the level of expertise and skill the Board wishes to attract and retain and the additional responsibilities associated with serving on committees, as a chairman of a committee or as the Lead Independent Director.
2024 PROXY STATEMENT
| 37 |
PROPOSAL 1: ELECTION OF DIRECTORS
The Board believes that the approach towards non-employeenon-management Director compensation should reflect the values used in setting NEO compensation in that it should be generally in line with the median compensation offered at comparable peer companies, reflect a mix of both cash and equity compensation to ensure alignment with our shareholders and be sustainable over the long-term.
The independent consultant hired by the Compensation Committee to assist with setting executive compensation is periodically engaged to benchmark and recommend appropriate compensation for our non-employeenon-management Directors.
20222023 COMPENSATION PROGRAM
In 2021,2022, the Compensation Committee retained an external compensation consultant from Pearl Meyer to assist with setting the compensation for non-employeenon-management Directors for 2022.2023. Pearl Meyer’s work included benchmarking the 20212022 compensation package against the same peer group established to evaluate NEO compensation and providing insight into then-current trends and compensation structures with the goal of setting total compensation near the median level of MAA’s comparative peer group for compensation. The 20212022 review found that while theMAA’s compensation program design was aligned with industry peers and the broader market in terms of structure, thepeer group, but average non-employee Director paytotal compensation per non-management director was below the peer group 50th percentile.percentile, primarily as a result of a lower annual equity grant value.
The Compensation Committee discussed the compensation consultant’s analysis and directional recommendations, reviewed the expanding responsibilities of the Board and its committees, as well as MAA’s performance results, and the need to attract new directors under the Board’s long-term succession plans, among other items, and recommended the Board approve the below compensation structure for 2022,2023, which would better align average total compensation for 20222023 to the 50th percentile benchmark level from the 20212022 study.
ANNUAL CASH FEES
The below 2023 annual cash fees (unchanged from 2022) were awarded to non-management directors in quarterly installments following our routine quarterly Board meetings. Committee chairmen do not receive their respective committee’s service fee in addition to their chairman fee.
$ | 80,000 | Board service |
$ | 25,000 | Audit Committee Chairman |
$ | 10,000 | Audit Committee service (other than Chairman) |
$ | 20,000 | Compensation Committee Chairman |
$ | 8,750 | Compensation Committee service (other than Chairman) |
$ | 15,000 | Nominating and Corporate Governance Committee Chairman |
$ | 7,250 | Nominating and Corporate Governance Committee service (other than Chairman) |
$ | 7,500 | Real Estate Investment Committee service |
$ | 27,500 | Lead Independent Director |
ANNUAL DIRECTOR EQUITY GRANTS
Shares of restricted stock are granted to non-employee Directors following election to the Board. These shares of restricted stock vest at the end of the Director’s annual term. Dividends equivalent to the dividends paid on shares of common stock are paid on these shares of restricted stock prior to vesting. Directors who choose to leave the Board before their term is completed for reasons other than retirement, disability or death, forfeit their granted shares of restricted stock for the service year in which they leave the Board.
$ | 80,000 | Board service | |
$ | 25,000 | Audit Committee Chairman | |
$ | 10,000 | Audit Committee service (other than Chairman) | |
$ | 20,000 | Compensation Committee Chairman | |
$ | 8,750 | Compensation Committee service (other than Chairman) | |
$ | 15,000 | Nominating and Corporate Governance Committee Chairman | |
$ | 7,250 | Nominating and Corporate Governance Committee service (other than Chairman) | |
$ | 7,500 | Real Estate Investment Committee service | |
$ | 27,500 | Lead Independent Director |
$ | Approximate value of the |
The non-employee Directors elected at the 2023 Annual Meeting of Shareholders were each issued 1,094 shares of restricted stock based on the closing stock price of $148.51 on May 16, 2023, the day of the 2023 annual meeting of shareholders.
DEFERRED COMPENSATION
In accordance with our Director Deferred Compensation Plan, Directors may have a comparable value of restricted stock units issued into a deferred compensation account in lieu of receiving their annual cash fees and/or their annual director equity grant. If Directors choose to defer their compensation in this manner, the compensation is paid out in two annual installments either in shares of our common stock or in the cash equivalent (at the Director’s election), beginning in the year following the year in which the Director retires from the Board. Dividends equivalent to the dividends paid on shares of common stock are credited as restricted stock units prior to payout of the shares. All dividend equivalents credited as restricted stock units prior to payout are reinvested into additional shares of restricted stock units which are also deferred under the plan.
2024 PROXY STATEMENT
| 38 |
PROPOSAL 1: ELECTION OF DIRECTORS
MIX OF COMPENSATION ELEMENTS
The below represents the average mix of compensation elements available to non-management Directors and as actually awarded in 2023 based on the respective role(s) each non-management Director held during 2023, and the payout elections each Director made.
DIRECTOR COMPENSATION TABLE
The below table represents the compensation earned by each non-management Director during 2023.
Name | Fees Earned Or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | ||||||||||||
Deborah H. Caplan (4) | $ | 101,625 | $ | 236,219 | $ | 3,776 | $ | 341,620 | ||||||||
John P. Case (4) | $ | 72,188 | $ | 162,470 | $ | 5,401 | $ | 240,059 | ||||||||
Tamara Fischer | $ | 73,125 | $ | 162,470 | $ | 5,401 | $ | 240,996 | ||||||||
Alan B. Graf, Jr. | $ | 132,500 | $ | 162,470 | $ | 5,401 | $ | 300,371 | ||||||||
Toni Jennings | $ | 96,000 | $ | 162,470 | $ | 5,401 | $ | 263,871 | ||||||||
Edith Kelly-Green | $ | 97,250 | $ | 162,470 | $ | 5,401 | $ | 265,121 | ||||||||
James K. Lowder | $ | 94,750 | $ | 162,470 | $ | 5,401 | $ | 262,621 | ||||||||
Thomas H. Lowder (4) | $ | 96,250 | $ | 162,470 | $ | 5,401 | $ | 264,121 | ||||||||
Claude B. Nielsen | $ | 103,750 | $ | 162,470 | $ | 5,401 | $ | 271,621 | ||||||||
Philip W. Norwood (4) | $ | 53,750 | $ | - | $ | 2,338 | $ | 56,088 | ||||||||
W. Reid Sanders (4) | $ | 90,000 | $ | 162,470 | $ | 5,401 | $ | 257,871 | ||||||||
Gary S. Shorb (4) | $ | 97,250 | $ | 162,470 | $ | 5,401 | $ | 265,121 | ||||||||
David P. Stockert | $ | 94,820 | $ | 162,470 | $ | 5,401 | $ | 262,691 |
DIRECTOR COMPENSATION TABLE | The below table represents the compensation earned by each non-employee Director during 2022. | ||||||||||||
Name | Fees Earned Or Paid in Cash ($) (1) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | |||||||||
Alan B. Graf, Jr. | $ | 132,500 | $ | 147,419 | $ | 4,021 | $ | 283,940 | |||||
Toni Jennings | $ | 96,000 | $ | 147,419 | $ | 4,021 | $ | 247,440 | |||||
Edith Kelly-Green | $ | 90,000 | $ | 147,419 | $ | 4,021 | $ | 241,440 | |||||
James K. Lowder | $ | 94,750 | $ | 147,419 | $ | 4,021 | $ | 246,190 | |||||
Thomas H. Lowder (4) | $ | 96,250 | $ | 147,419 | $ | 4,021 | $ | 247,690 | |||||
Monica McGurk | $ | 96,000 | $ | 147,419 | (5) | $ | 4,021 | $ | 247,495 | ||||
Claude B. Nielsen | $ | 103,750 | $ | 147,419 | $ | 4,021 | $ | 255,190 | |||||
Philip W. Norwood (4) | $ | 107,500 | $ | 147,419 | $ | 4,021 | $ | 258,940 | |||||
W. Reid Sanders (4) | $ | 90,000 | $ | 147,419 | $ | 4,021 | $ | 241,440 | |||||
Gary S. Shorb (4) | $ | 97,250 | $ | 147,419 | $ | 4,021 | $ | 248,690 | |||||
David P. Stockert (4) | $ | 91,125 | $ | 147,419 | $ | 4,021 | $ | 242,565 |
(1) | Represents annual cash fees regardless of whether paid as cash or deferred by the Director and issued as restricted stock units in the Director Deferred Compensation Plan. | |
(2) | Represents the grant of Ms. Caplan’s value also includes 509 shares of restricted stock granted on March 21, 2023 at the closing stock price that day of $144.89, representing partial 2022-2023 Board service based on her appointment to the Board on March 21, 2023. The grant vested on May 18, 2023. |
(3) | Represents the dividends paid during |
(4) | These Directors elected to have all or a portion of their annual cash fees issued as shares of restricted stock units in the Director Deferred Compensation Plan. The table represents the foregone cash and aggregate number of restricted stock units issued. | Name | Foregone Cash | Restricted Stock Units | |||
Thomas H. Lowder | $ 96,250 | 557 | |||||
Philip W. Norwood | $ 107,500 | 623 | |||||
W. Reid Sanders | $ 90,000 | 521 | |||||
Gary S. Shorb | $ 97,250 | 563 | |||||
David P. Stockert | $ 91,125 | 518
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(4) |
Name | Foregone Cash | Restricted Stock Units | ||||||
Deborah Caplan | $ | 50,450 | 363 | |||||
John P. Case | $ | 17,891 | 130 | |||||
Thomas H. Lowder | $ | 96,250 | 691 | |||||
Philip W. Norwood | $ | 53,750 | 367 | |||||
W. Reid Sanders | $ | 90,000 | 646 | |||||
Gary S. Shorb | $ | 97,250 | 698 | |||||
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PROPOSAL 2: EXECUTIVE COMPENSATION
PROPOSAL 2: | EXECUTIVE COMPENSATION | FOR | |||
MATTER TO BE VOTED An advisory (non-binding) vote to approve NEO compensation as disclosed in this Proxy Statement. Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs. As such, shareholders are asked to approve the compensation paid to our NEOs as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, including the disclosures in the Compensation Discussion and Analysis and Executive Compensation Tables sections of this Proxy Statement. | |||||
VOTE REQUIRED This proposal will be approved if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal. The vote under this proposal is advisory, and therefore, not binding on us, our Board or the Compensation Committee. However, our Board, including the Compensation Committee, values the opinions of our shareholders and, to the extent there is a significant vote against the NEO compensation as disclosed in this Proxy Statement, the Board will consider what actions may be appropriate. | |||||
IMPACT OF ABSTENTIONS: Abstentions will have no legal effect on whether this proposal is approved. | |||||
IMPACT OF BROKER NON-VOTES: Broker non-votes will have no legal effect on whether this proposal is approved. | |||||
BOARD RECOMMENDATION | |||||
The Board recommends you vote “FOR” the compensation of our NEOs as disclosed in this Proxy Statement | |||||
The vote on this proposal is not a vote on our general compensation policies, non-employeenon-management Director compensation, or our compensation policies as they relate to risk management. It is also not a vote intended to address any individual element of compensation. The vote specifically relates to the compensation of our NEOs as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC.
The vote is an advisory, non-binding vote, but our Board values shareholder input on NEO compensation and the Compensation Committee will consider the results of this vote in determining future compensation packages. Furthermore, while the vote specifically applies only to the NEOs listed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC, the Compensation Committee also will also apply shareholder feedback on the compensation packages offered to allthe other members of our executive officers and other members of the executive leadership team during 2022, who are identified below.as well. While the total level of opportunity may vary amongst executive officers and/or other members of the executive leadership team, the Compensation Committee feels it is important to provide a consistent compensation structure across these associates in order to encourage enterprise-wide teamwork, collaboration and focus on our strategy.
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PROPOSAL 2: EXECUTIVE COMPENSATION
We believe it is important to receive frequent feedback from shareholders on executive compensation and are pleased that shareholders have voted in the past to support an annual vote on executive compensation.
In the following pages, we have provided detailed information on the philosophy and objectives of the Compensation Committee in determining NEO compensation, the committee’s decision-making process and the factors they consider, the compensation structures in place during 20222023 and the resultant compensation earned by NEOs.
We believe the compensation programs developed by the Compensation Committee for our NEOs in 20222023 were effective in supporting sustainable long-term value creation for our shareholders and appropriately balanced the needs to attract, retain and reward executive officers, drive execution of company performance and strategic initiatives, discourage excessive risk-taking and align executive interests with those of our shareholders.
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PROPOSAL 2: EXECUTIVE COMPENSATION
NEOs OF THE REGISTRANT
The Compensation Discussion and Analysis section of this Proxy Statement focuses on the compensation for our CEO, CFO and the next three most highly compensated executive officers who were serving at the end of 2022,2023, our NEOs, as outlined below. Ages are as of May 16, 2023,21, 2024, the date of the Annual Meeting.
H. ERIC BOLTON, JR.
Age | Mr. Bolton joined us in 1994, initially serving as Vice President of Development before being promoted to COO in February 1996 and subsequently appointed as President in December 1996. Mr. Bolton was named CEO in October 2001 and became Chairman of the Board in September 2002. Prior to joining us, Mr. Bolton was with Trammell Crow Company for more than five years and was EVP and CFO of Trammell Crow Realty Advisors. Prior to that, Mr. Bolton worked in the commercial banking industry for seven years. |
ALBERT M. CAMPBELL, III EVP, Age | Mr. Campbell joined us in 1998, initially responsible for our external reporting and forecasting efforts. Mr. Campbell held various financial leadership positions, including Treasurer and Director of Financial Planning where he was responsible for managing the funding requirements of the business to support corporate strategy, before being promoted to CFO in January 2010. Prior to joining us, Mr. Campbell worked as a Certified Public Accountant with Arthur Andersen and served in various finance and accounting roles with Thomas & Betts Corporation. |
| and CFO as part of his planned retirement. Mr. |
ROBERT J. DELPRIORE EVP, Age | Mr. DelPriore joined us in August 2013 as our EVP and GC, initially responsible for the development of our internal Legal Department before adding responsibility for our Commercial Division and Enterprise Risk Management, subsequently being promoted to EVP and CAO in early 2022. Prior to joining us, Mr. DelPriore was engaged in the private practice of law and served as counsel to MAA. |
A. BRADLEY HILL EVP, Age | Mr. Hill joined us in 2010 as VP and Director of New Development and assumed increasing levels of responsibility surrounding our multifamily transactions and capital recycling activities before being promoted to SVP and Director of Multifamily Investing in 2014, |
TIMOTHY P. ARGO EVP, Chief Strategy & Analysis Officer Age 47 | Mr. Argo joined us in June 2002, initially responsible for underwriting acquisition opportunities. Mr. Argo was promoted several times reflecting expanding levels of responsibility including budgets and forecasting, financial planning, investor relations, and portfolio management, until being named SVP, Chief Financial Planning Officer in 2017. In 2022, Mr. Argo was promoted to EVP, Chief Strategy & Analysis Officer, assuming responsibility for asset management, strategy development and execution, and value creation. |
2024 PROXY STATEMENT
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PROPOSAL 2: EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis section provides a detailed discussion of the compensation opportunities provided to our NEOs. It begins with the Compensation Committee’s approach to setting compensation packages, including their philosophy and objectives, risks associated with compensation plans, compensation governance considerations and other risk mitigating factors, and benchmarking data and directional considerations provided by the external compensation consultant, among other matters.
Next you will find detailed information on the 20222023 compensation packages put into place for our NEOs, including the structure of the overall package, opportunities available under each element of compensation, and the overall mix of fixed income and performance based incentives based on various market and financial metrics.
Finally, you will find information on MAA’s actual performance during 2022,2023, the resultant awards earned by our NEOs under the 20222023 compensation packages as well as information on other benefits available to our NEOs.
The below Table of Contents is provided to help you navigate the topics covered in this section.
COMPENSATION APPROACH AND GOVERNANCE | Pages |
2023 PROGRAM STRUCTURE | Pages 48-51 | ||
2023 | |
PROPOSAL 2: EXECUTIVE COMPENSATION
50 | |||
51 | |||
2023 NEO COMPENSATION REALIZED | |||
52 | 2023 MAA Performance | ||
TAX AND ACCOUNTING IMPLICATIONS OF COMPENSATION | Page 56 | ||
CONCLUSION | Page 57 | ||
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PROPOSAL 2: EXECUTIVE COMPENSATION
COMPENSATION APPROACH AND GOVERNANCEANALYSIS
PHILOSOPHY AND OBJECTIVES
The primary objective of our executive compensation program is to drive key business and strategic goals over various time frames in support of long-term shareholder value creation. We also seek to provide fair and competitive pay opportunities that align with both overall MAA and individual performance, shareholder interests and sound corporate governance practices. The Compensation Committee, and the Board in regards to the CEO, believes that to implement this philosophy and create a balanced and reasonable compensation package in the best long-term interests of our shareholders, the below objectives must be incorporated in the program.
The Compensation Committee does not apply a specific weight or otherwise necessarily value one individual concept over another as the concepts deemed to be of most relevance may change over time reflecting changing compensation environments and market conditions, MAA’s evolving strategic initiatives, succession planning efforts or other factors. The corresponding philosophy numbers have been provided to assist in understanding how these concepts are reflected in the structure and governance practices discussed later in this section and do not represent a ranking by the Compensation Committee.
P1 ATTRACT AND RETAIN Total executive compensation should be sufficiently competitive against other comparable REITs and well-managed companies within the real estate industry to attract and retain highly qualified executive management with the necessary expertise and leadership abilities to execute our strategy.
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P2 DO NOT OVERPAY
Generally, total target direct compensation is positioned at or near the 50th percentile market values for similar roles at industry peers and other comparable companies, but may vary between the 25th and 75th percentiles to reflect various factors.
P3 AVOID UNDUE RISK
Compensation elements and plans should promote actions in the best interest of the company and shareholders and not encourage excessive risk-taking to increase individual rewards.
P4 FAIR AND EQUITABLE
Total compensation opportunities, taking into account the scope of responsibilities for each role and its ability to impact overall MAA performance, should be fair and equitable amongst the executive officers and across all MAA associates.
P5 REFLECT MATURITY IN ROLE
Total compensation opportunities should reflect the qualifications, expertise, experience and proven track record of each executive officer within his or her respective role.
P6 QUANTIFIABLE
Total compensation should be clearly defined and materially based on measurable data, while allowing for some subjective analysis, when appropriate, to reflect unusual events out of the executive management’s control, unexpected changes in strategy or material over or under performance.
P7 ALIGN WITH MAA’s CULTURE
Total compensation opportunities should encourage ethical leadership aligned with MAA’s culture statement and Code of Conduct.
P8 ALIGN WITH OVERALL MAA PERFORMANCE (Pay for Performance)
Total compensation opportunities should be materially linked to overall MAA performance to encourage teamwork across functional areas and ensure executives are dedicated to delivering on our overall strategy and market guidance.
P9 BALANCE ANNUAL AND LONG-TERM STRATEGIC GOALS
Total compensation opportunities should incentivize a balance between delivering both annual results and ensuring long-term performance in line with our philosophy of delivering results for today while planning for tomorrow.
P10 REWARD SUPERIOR PERFORMANCE
Total compensation should reward executives for achieving superior performance which exceeds targeted business goals.
P11 ALIGN WITH SHAREHOLDERS
The form of compensation should align the financial interests and goals of our executives with those of our shareholders.
P12 REWARD FOR CREATING LONG-TERM SHAREHOLDER VALUE
The compensation package should allow executive management to benefit from creating long-term shareholder value to support long-term value for our shareholders.
P13 SUSTAINABLE
Total compensation packages should be sustainable to ensure consistency in our ability to retain qualified executive management and to continue to create long-term value for our shareholders in the future without creating undue burden on the financials of MAA.
P14 SUPPORTED BY SHAREHOLDERS
Executive compensation packages should have the support of our shareholders.
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PROPOSAL 2: EXECUTIVE COMPENSATION
DECISION MAKING PROCESS
The Compensation Committee is responsible for the compensation of executive management, both in terms of establishing the form and opportunities for each executive and in overseeing the actual awards made to each executive under our compensation plans. In regards to the CEO, the Compensation Committee makes recommendations to our Board and the non-employeenon-management Directors vote to approve CEO compensation.
The Compensation Committee considers many factors and, from time to time, obtains input related to certain aspects of executive compensation from the other Independent Directors as well as non-Board sources, including external consultants. The Compensation Committee does not generally consider prior compensation in making compensation decisions, believing that compensation should reflect the current environment of the factors being considered. The committee does not have a pre-defined framework that determines which factors may be more or less important in any given year, and the emphasis placed on any given factor may vary both among the respective executives and over time.
Ultimately, the Compensation Committee’s judgment of all factors it deems relevant in any year forms the basis for determining the executive compensation set for our CEO and other NEOs.
SAY ON PAY P14
The Compensation Committee carefully considers the results of the shareholder vote to approve executive compensation from prior annual meetings when establishing executive compensation packages and believes the historical Say on Pay vote outcomes are an endorsement by shareholders of the overall total compensation package and approach for our NEOs. The committee feels it is important to obtain this shareholder feedback on a routine, frequent basis. As such, the Board, on behalf of the Compensation Committee, has always recommended that the frequency of the vote to approve executive compensation be done on an annual basis.
APPROVAL FOR Say on Pay In | Executive Compensation APPROVED BY SHAREHOLDERS EVERY YEAR Since Introduced in 2011 |
AVERAGE APPROVAL RATE Since 2011 |
ROLE OF COMPENSATION CONSULTANT
The Compensation Committee has the power and authority to hire outside advisors or consultants to assist the committee in fulfilling its responsibilities, at MAA’s expense and upon terms established by the Compensation Committee. The Compensation Committee routinely hires an external consultantsconsultant to assist in reviewing our executive compensation program, establishing an appropriate benchmark comparator group, benchmarking plan design, mix of compensation elements and levels of compensation opportunities, and evaluating risks associated with our executive compensation program.
The Compensation Committee engaged Pearl Meyer in 20212022 to assist with the review and development of the executive and non-employeenon-management Director compensation programs for 2022.The2023. The Compensation Committee requested the consultant review the companies included in our comparator group and provide any recommended changes, benchmark both non-employeenon-management Director and executive compensation packages against the finalized comparator group, considering the form, mix and levels of compensation opportunities, and make any recommendations the consultant felt were appropriate.
COMPENSATION CONSULTANT INDEPENDENCE
Prior to the retention of a compensation consultant or any other external advisor, and from time-to-time as the Compensation Committee deems appropriate, the Compensation Committee assesses the independence of such advisor from management, taking into consideration all factors relevant to such advisor’s independence, including the factors specified in NYSE listing standards.
The Compensation Committee assessed the independence of Pearl Meyer in relation to the analysis performed in 2021,2022, taking into account the policies and procedures the consultant has in place to prevent conflicts of interest, any business or personal relationships between the consultant and the members of the Compensation Committee andor Board, any ownership of MAA securities by the individual who performs consulting services for the Compensation Committee and any business or personal relationships of the firm with any of our NEOs.
Pearl Meyer provided the Compensation Committee with appropriate assurances and confirmation of its independent status pursuant to the factors indicated above. The Compensation Committee believes that Pearl Meyer remained independent throughout their service to the committee and that there was no conflict of interest between the firm and the Compensation Committee.
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PROPOSAL 2: EXECUTIVE COMPENSATION
MARKET BENCHMARKING CONSIDERATIONS P1, P2
The Compensation Committee considers benchmark information when establishing and measuring the appropriateness and competitiveness of various aspects of our executive compensation packages, including the items listed below, amongst others.
✓ | Base salary ranges |
✓ | Annual and long-term incentive award ranges |
✓ | Mix of variable versus fixed compensation |
✓ | Mix of cash versus equity award opportunities |
✓ | Target and maximum performance award opportunities |
✓ | Total direct compensation (sum of base salary plus short-term and long-term incentives) |
✓ | Validity of package design and performance measures |
✓ | Compensation levels in relation to overall company performance |
✓ | Company performance in relation to peer performance |
While the Compensation Committee believes that the type and levels of compensation opportunities provided should be competitively reasonable and appropriate for our business needs and circumstances, the committee’s approach is to consider competitive compensation practices amongst other relevant factors rather than solely establishing compensation at specific benchmark percentiles. This enables us to respond to changes in the labor market and provides us with flexibility in maintaining and enhancing the engagement, focus and motivation of our executives. Broadly, however, unless otherwise warranted by performance or other factors, the Compensation Committee believes it is generally appropriate to be relatively in line with 50th percentile target pay levels for comparable organizations against which MAA competes for business and executive talent and does not believe it is reasonable or appropriate for target executive compensation to be materially outside of comparative benchmark ranges (either above the 75th percentile or below the 25th percentile) whether in terms of individual elements of the compensation program or overall total target executive compensation.
COMPENSATION COMPARATOR GROUP
The Compensation Committee believes it is critical to select the appropriate comparator group for benchmarking purposes. In conjunction with consulting with our Compensation Committee to set 20222023 executive compensation, Pearl Meyer reviewed our then current peer group considering various factors including each organization’s business focus, number of employees, enterprise size and value, TSR performance, credit ratings and geographical markets of operations, among other items. Pearl Meyer also reviewed REITs utilized by our multifamily peers for their peer groups as well as other comparably-sized REITs across various sectors in the industry. Pearl Meyer and the Compensation Committee also consider whether a company is in extreme financial distress or has poor executive pay governance perceptions and eliminates such companies from the peer benchmarking group.
After considering Pearl Meyer’s analysis, that noted MAA’s relative size positioning versus peers was near the 50th percentile for revenues and between the 50th and 75th percentile for both equity market capitalization and number of employees, the Compensation Committee determined to make several changes tomaintain the same comparator peer group used to setin setting 2022 executive compensation, forwith the exception of removing Duke Realty Corp., which was acquired during 2022. Four companies from the prior year’s peer group were removed. One company had split into two companies that were deemed to be too small in size to be comparable to MAA and the other three were removed due to being relatively smaller in size combined with adding too much representation of the industrial REIT sector to the peer group. The Compensation Committee also determined to add three companies that were a better fit in terms of size and industry sector as they were all part of the residential REIT sector. The comparator peer group the Compensation Committee instructed Pearl Meyer to use to provide executive benchmarking analysis is provided below.
American Homes 4 Rent AvalonBay Communities, Inc. Boston Properties, Inc. Camden Property Trust |
Equity Residential Essex Property Trust, Inc. Extra Space Storage, Inc. | Invitation Homes Inc. Kimco Realty Public Storage | Regency Centers Corporation | Sun Communities, Inc. UDR, Inc. |
FINDINGS OF COMPENSATION CONSULTANT
Pearl Meyer performed a market pay analysis and provided the results of their benchmarking review along with directional recommendations at the December 2022 Compensation Committee meeting and the Compensation Committee considered the results of their analysis in establishing the executive compensation program for 2023. Overall observations based on then-current performance results and then-current NEO pay levels are provided below. Specific individual NEO observations considered in determining 2023 compensation are provided in the 2023 Target Compensation section on pages 50-51.
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RELATIVE COMPANY PERFORMANCE
Based on various selected financial and operational metric comparisons, MAA's average overall performance was near the peer group 75th percentile over the past one, three and five year periods with TSR performing well above the 75th percentile while total direct compensation for the then-current NEOs was ranked at the 62nd percentile.
EXECUTIVE COMPENSATION
Aggregate target total direct compensation (salary + target AIP + target LTIP) was between the 25th and 50th percentile market values, while individual competitiveness varied, with all but one then-current NEO falling within a competitive range of +/- 15% of the 50th percentile. Mr. Hill was positioned below the competitive range given his recent promotion (as of the time of the study) to the EVP, CIO role.
Overall, the Compensation Committee believed the results of the analysis indicated that the level of compensation, mix of variable versus fixed pay as well as cash versus equity opportunities were generally aligned with that of the peer group.group, but changes may be warranted by individual to reflect changing job responsibilities and to further improve pay competitiveness.
2024 PROXY STATEMENT
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PROPOSAL 2: EXECUTIVE COMPENSATION
ROLE OF EXECUTIVE MANAGEMENT
All incentive plans and any payments made thereunder are developed, adopted and awarded by the Compensation Committee. All compensation related to our CEO is recommended by the Compensation Committee to our full Board, which ultimately has responsibility for approving CEO compensation.
While our CEO does participate in general meetings of the Compensation Committee to provide input on compensation decisions related to the other NEOs, he does not participate in executive sessions of the Compensation Committee nor does he participate in any discussions determining his own compensation. Annually, upon request from the Compensation Committee, our CEO provides the committee with data pertinent to his and the other NEOs’ performance and compensation. Generally, this information pertains to the achievement of individual functional goals. At the end of any incentive plan measurement period, our CEO presents base results of the plan for the Compensation Committee’s review and, if deemed necessary by the Compensation Committee, further evaluation and/or adjustment. The base results are calculated and prepared by our Chief Ethics and Compliance Officer and Corporate Secretary according to the underlying plan documents and then reviewed by a member of our Finance and or Accounting teams prior to presentation to the Compensation Committee.documents.
RISK CONSIDERATIONS
The Compensation Committee annually evaluates the risks involved with all of our compensation programs, including risks specifically associated with our executive compensation program, and strives to design total compensation programs that mitigate those risks without diminishing the incentive nature of the compensation. Following its 20222023 evaluation, the Compensation Committee determined that any risks arising from our compensation policies and practices for our associates, including our NEOs, are not reasonably likely to have a material adverse effect on MAA. Furthermore, the Compensation Committee believes that the nature of the various elements of executive compensation does not encourage management to assume excessive risks.
The following are specific design factors that the Compensation Committee believes help to discourage undue risk taking and are therefore considered in determining the overall risk level of our executive and company-wide compensation programs.
MULTIPLE ELEMENTS P3, P8, P9 Each executive and senior-level total compensation offering includes both fixed amounts (as in the case of base salary) and variable amounts dependent upon performance (as in the case of incentive plans). In addition, incentive plans split the opportunity between multiple metrics with both short and long-term performance horizons, and business and market metrics. This multi-component approach discourages undue risk taking in any one area as the greatest reward comes from balancing the results of all of the compensation elements.
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MINIMUM ONE YEAR VESTING PERIOD ON ALL EQUITY AWARDS P3, P8, P9, P10, P11, P12
The 2023 Omnibus Incentive Plan approved by shareholders at the 2023 annual meeting of shareholders implements a minimum vesting period of at least one year for all equity awards. This reduces undue risk taking for immediate gain as the maximum benefit requires balancing both short and long-term results, rewarding NEOs for achieving long-term shareholder value, ultimately aligning interests with those of our shareholders. |
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INDIVIDUAL AWARD CAPS P2, P3, P7, P13, P14
Each associate’s award opportunities within their respective incentive program is capped. With respect to NEOs, these caps are set by the Compensation Committee and, with respect to the CEO, the Board upon Compensation Committee recommendation. Performance for the three-year relative TSR metric is further capped at the target level when MAA has a negative return but still outperformed the comparative index.
PERFORMANCE GOALS AND RESULTS TIED TO MEASURABLE METRICS P3, P6, P8
Performance goals and results are tied to quantifiably measurable metrics and, in the case of senior and executive management, to our publicly-disclosed financial statements which are audited by our independent registered public accounting firm and reviewed by the Audit Committee. This reduces the risk that performance results can be manipulated.
SENIOR AND EXECUTIVE AWARDS INCLUDE EQUITY ELEMENTS P1, P2, P3, P8, P9, P10, P11, P12, P13
A material part of the total compensation opportunity for senior and executive management includes awards of MAA equity. This helps to align senior and executive management interests with those of our shareholders and discourages the risk of maximizing short-term returns to the detriment of long-term goals, as associates will benefit from the increased value achieved for investors over time. In addition, equity elements help to ensure we do not overcompensate if shareholder value is not being created.
SENIOR AND EXECUTIVE AWARDS INCLUDE SEPARATE SHORT AND LONG-TERM OPPORTUNITIES P3, P9, P13
Incentive opportunities for senior and executive management contain both short and long-term elements. This balanced approach discourages undue risk taking as the greatest reward comes from balancing the results of both short and long-term goals and ensures that executive management remains focused on both delivering results for today while also ensuring the ability to perform in the future.
INCENTIVE AWARDS TIED TO PERFORMANCE (Pay For Performance) P2, P5, P6, P8, P9, P10, P11, P12, P13
Incentive opportunities are tied to individual and/or overall MAA performance goals which are set in alignment with our annual and, in the case of senior and executive management, long-term strategic goals. This ensures that management remains focused on executing the strategic vision of MAA.
OVERSIGHT OF AWARD CALCULATIONS P3, P6, P7
All incentive plan award calculations are reviewed by management and, in the case of executive awards, by the Compensation Committee with support from our Corporate Secretary.
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PROPOSAL 2: EXECUTIVE COMPENSATION
TARGET LEVELS ARE TIED TO MAA GUIDANCE AND INDUSTRY RETURN PERFORMANCE P1, P2, P3, P6, P8, P9, P10, P11, P12
Target performance opportunities for senior and executive management are tied to our publicly disclosed guidance and our relative performance to the industry. While this provides an opportunity to reward superior performance, it discourages undue risk taking because it does not require performance beyond that which is determined to be realistically achievable and set by MAA.
INDEPENDENT EXTERNAL COMPENSATION CONSULTANT ADVISES ON EXECUTIVE COMPENSATION P1, P2, P4, P5, P7
The Compensation Committee utilizes an external compensation consultant to advise on the structure and opportunity levels set for executive compensation. This helps to ensure that MAA’s executive compensation offerings both overall and on an individual NEO basis are appropriate and in line with industry best practices and that we are neither over nor under paying our executive management team based on their role, responsibilities and performance.
ALL COMPENSATION IS SELF-FUNDING P2, P3, P7, P8, P11, P13
All elements of our compensation programs are self-funding in that performance measurements tied to performance-based awards are calculated after the expense for the awards is taken into account. This assures MAA can afford to pay the awards and minimizes the risk that associates benefit at our shareholders’ expense as awards under our compensation plans will not have a subsequent negative impact on our financial statements.
COMPENSATION GOVERNANCE CONSIDERATIONS
In addition to the risk mitigating features and actions discussed under Risk Considerations, the Board has established several corporate governance practices which are specifically related to executive compensation and also help to mitigate potential risks.
SHARE OWNERSHIP GUIDELINES P7, P11, P12