UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.     )

Filed by the Registrant  x                            Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Host Hotels & Resorts, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box):

April 1, 20105, 2012

Dear Fellow Stockholder:

I am pleasedYou are cordially invited to invite you toattend our 20102012 Annual Meeting of Stockholders of Host Hotels & Resorts, Inc., which will be held at 10:11:00 a.m. on Thursday, May 6, 2010,10, 2012, at The Ritz-Carlton, Tysons Corner in McLean, Virginia. The doors will open at 9:10:30 a.m. Our directors and management team will be available to answer questions.

The attendance of stockholders at our annual meetingsmeeting is helpful in maintaining communication and understanding.understanding of our business. We hope you will be able to join us. Whether or not you plan to attend, it is important that your shares be represented and voted at the meeting. Youyou can ensure that your shares are represented at the meeting by promptly voting over the Internet,and submitting your proxy by telephone or by using a traditionalInternet, or by completing, signing, dating and returning your proxy card.form. Instructions for these convenient ways to vote are set forth on the enclosed proxy card. If you attend the meeting, you may continue to have your shares voted as instructed in the proxy or you may withdraw your proxy at the meeting and vote your shares in person.

We describe in detail the actions we expectproposals to takebe introduced at the annual meeting in the attached Notice of 20102012 Annual Meeting of Stockholders and Proxy Statement. Our 20092011 Annual Report (including our Annual Report on Form 10-K filed with the Securities and Exchange Commission) is also enclosed. We encourage you to read our Annual Report and hope you will find it interesting and useful. Thank you for your continued interest in Host Hotels & Resorts, and we look forward to seeing you at the meeting.

6903 Rockledge Drive, Suite 1500

Bethesda, Maryland 20817-1109

NOTICE OF 20102012 ANNUAL MEETING OF STOCKHOLDERS

Agenda

Voting

You may vote if you were a holder of record of our common stock at the close of business on March 9, 2010.15, 2012. Whether or not you plan to attend the annual meeting, please vote in one of the following ways:

April 1, 2010

Please refer to the back page of the Proxy Statement for information on accommodations and directions to the hotel.5, 2012

PROXY STATEMENT

Table of Contents

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ii

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting.

Annual Meeting of Stockholders

Voting Matters

Board Nominees

The following table provides summary information about each director nominee. Directors are elected annually by a majority of votes cast.

ATTENDANCE AND VOTING MATTERS

It is your legal designation of another person to vote the stock you own. That other person is called a proxy. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card. This proxy is being solicited by the Board of Directors, and we have designated Larry K. Harvey and Elizabeth A. Abdoo as proxies for this annual meeting. When you properly sign your proxy card or vote via telephone or the Internet, you are giving the persons named on the card your direction to vote your shares of common stock at the annual meeting as you designate.

It is a document that summarizes information that we are required to provide you under the rules of the Securities and Exchange Commission, or SEC, when we ask you to vote your shares or designate a proxy. It is designed to assist you in voting.

You should vote by completing and signing each proxy card you receive. You will receive separate proxy cards for all of the shares you hold in different ways, such as jointly with another person, or in trust, or in different brokerage accounts.

WithStockholder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Computershare Trust Company, N.A., or Computershare, you are considered the stockholder of record with respect to each nominee, stockholders may:those shares, and the Notice of Annual Meeting, Proxy Statement and our 2011 Annual Report was sent directly to you by the Company.

Stockholders may:

Anyone who owned common stock of the Company at the close of business on March 9, 2010,15, 2012, the record date, can vote at the annual meeting. We are first sending the enclosed proxy cardNotice of Annual Meeting, Proxy Statement and this proxy statementour 2011 Annual Report on April 1, 20105, 2012 to all stockholders entitled to vote at the meeting.

Our 2009The included glossy Annual Report together withand our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC has been(which together comprise the Annual Report of the Company), is being mailed to stockholders with this proxy statement.Proxy Statement. If you share an address

with any of our other stockholders, your household might receive only one copy of these

documents. To request individual copies for each stockholder in your household, please contact our Investor Relations department at 240-744-1000, by e-mail to ir@hosthotels.com, or by mail to Host Hotels & Resorts, Inc., 6903 Rockledge Drive, Suite 1500, Bethesda, MD 20817, Attn: Investor Relations. To ask that only one set of the documents be mailed to your household, please contact your bank, broker or other nominee or, if you are a stockholder of record, please call our transfer agent, Computershare Trust Company, N.A. (“Computershare”) at 866-367-6351 toll-free within the United States and Canada; outside the United States and Canada at 781-575-4320, or by mail at P.O. Box 43078, Providence, Rhode Island 02940.

Voting in Person at the Meeting. If you are a stockholder of record as of the close of business on March 9, 201015, 2012 and attend the annual meeting, you may vote in person at the meeting. If your shares are held by a broker, bank or other nominee (i.e., in “street name”) and you wish to vote in person at the meeting, you will need to obtain a proxy form from the broker, bank or other nominee that holds your shares of record.

Voting by Proxy for Shares Registered Directly in the Name of the Stockholder. If you hold your shares in your own name as a holder of record, you may vote your shares as follows:

Voting by Proxy for Shares Registered in Street Name. If your shares are held in street name, you will receive instructions from your broker, bank or other nominee which you must follow in order to have your shares of common stock voted.

The individuals named on the enclosed proxy card are your proxies. They will vote your shares as you indicate. If you sign and return your proxy card but donot indicate how you wish to vote and you hold your shares in your own name as a holder of record, all of your shares will be voted:

(2)

FOR the ratification of the appointment of KPMG LLP as the Company’s independent registered public accountants for 2010;2012;

However, if you hold your shares in street name, it is critical that you cast your vote in order for your vote to count in the election of directors (proposal one).count. In the past, if you held your shares in street name and you did not indicate how you wanted to vote those shares, in the election of directors, your bank or broker was allowed to vote those shares on your behalf in the election of directors and other routine matters as they deemed appropriate. Now, due to recent regulatory changes, your bank or broker no longer is able to vote your shares on a discretionary basis in the election of directors.most matters. If you hold your shares in street name and do not instruct your bank or broker how to vote, in the election of directors, then no votes will be cast on your behalf in the election of directors. Your bank or broker will continue to have discretion to vote your shares onfor all matters other than the ratification of the appointment of KPMG LLCLLP as the Company’s independent registered public accountants for 20102012 (proposal two) if you do not provide instructions on this proposal.2).

You may revoke your proxy at any time before the annual meeting if you:

The mailing address for Computershare is P.O. Box 43078, Providence, Rhode Island 02940. The overnight delivery address for Computershare is: 250 Royall Street, Canton, Massachusetts 02021.

At the close of business on March 9, 2010, there were 654,455,636 shares of our common stock issued and outstanding. Every stockholder is entitled to one vote for each share of common stock held.

In the election of directors, each nominee must receive more “For” votes than “Against” votes in order to be elected as a director. The proposalaffirmative vote of a majority of votes cast at the meeting is required to ratify the appointment of KPMG LLP as the Company’s independent registered public accountants for 2010 requires approval by2012 and to approve the affirmative vote of a majority of votes castadvisory resolution on the proposal.

A majority of the outstanding shares entitled to vote, present in person or by proxy, constitutes a quorum. We must have a quorum to conduct the annual meeting. If a quorum is not present or if we decide that more time is necessary for the solicitation of proxies, we may adjourn the annual meeting. We may do this with or without a stockholder vote. If there is a stockholder vote to adjourn, the named proxies will vote all shares of common stock for which they have voting authority in favor of the adjournment.

Shares of our common stock represented by proxies that are marked “abstain,” or which constitute broker non-votes, will be counted as present at the meeting for the purpose of determining a quorum. Broker non-votes occur when a nominee holding shares of our common stock for a beneficial owner returns a properly executed proxy but has not received voting instructions from the beneficial owner and such nominee does not possess or does not choose to exercise discretionary authority with respect to such shares. Abstentions and broker non-votes will have no effect on the results of the vote on the election of directors or the results of the vote to ratify the appointment of KPMG LLP.proposals 2 and 3.

Copies of the Company’s Corporate Governance Guidelines, codes of conduct and other documents referenced in this proxy statement can be accessed in the “Investor Relations—Governance” section of the Company’s website athttp://www.hosthotels.com. Copies of these documents are also available in print to stockholders upon request by writing to:

Host Hotels & Resorts, Inc.

6903 Rockledge Drive, Suite 1500

Bethesda, Maryland 20817

Attention: Investor Relations

Although we do not know of any other business to be considered at the annual meeting other than the proposals described in this proxy statement, if any other business is properly presented at the annual meeting your signed proxy card gives authority to Larry K. Harvey and Elizabeth A. Abdoo, or either of them, to vote on such matters in their discretion. Unless otherwise required by our Charter or Bylaws or by applicable Maryland law, any other matter properly presented for a vote at the meeting will require the affirmative vote of a majority of the votes cast.

Computershare Trust Company, N.A., our transfer agent, will act as the inspectors of election and will tabulate the votes.

Q.	Who pays the cost of this proxy solicitation?

We bear all expenses incurred in connection with the solicitation of proxies. We have hired the firm of MacKenzie Partners, Inc. to assist in the solicitation of proxies for a fee of $7,000,$8,500, plus expenses. We will reimburse brokers, fiduciaries and custodians for their reasonable expenses related to forwarding our proxy materials to those beneficial owners.

No. In addition to mailing these proxy solicitation materials, our officers and employees may solicit proxies by further mailings or personal conversations, or by telephone, facsimile or other electronic means.

Preliminary voting results will be announced at the annual meeting. Final voting results will be disclosed on a Form 8-K filed with the SEC within four business days of the date of the annual meeting, which will be available on the Company’s website athttp://www.hosthotels.com.

CORPORATE GOVERNANCE AND BOARD MATTERS

Corporate Governance

Our Board of Directors oversees the management of the Company and its business for the benefit of our stockholders in order to enhance stockholder value over the long-term. The Board has adopted Corporate Governance Guidelines in 2002. These Guidelineswhich are reviewed annually and periodically amended as the Board enhances the Company’s corporate governance practices. The Company’s Corporate Governance Guidelines, codes of conduct and other documents describing the Company’s corporate governance practices can be accessed in the “Investor Relations—Governance” section of the Company’s website athttp://www.hosthotels.com. Copies of these documents are also available in print to stockholders upon request.

In recent years, the Board has implemented numerous corporate governance enhancements to further strengthen the Board’s capacity to oversee the Company and to serve the long-term interests of all stockholders. These include:

The Company invites stockholders and other interested parties to communicate any concerns they may have about the Company directly and confidentially with any of (i) the full Board of Directors, (ii) the presiding director or (iii) the non-management directors as a group, by writing to the Board of Directors, the Presiding Director or the Non-Management Directors at Host Hotels & Resorts, Inc., 6903 Rockledge Drive, Bethesda, MD 20817, Attn: Secretary. The Secretary will review and forward all stockholder communications to the intended recipient except those unrelated to the duties and responsibilities of the Board, such as junk mail and mass mailings, resumes and other forms of job inquiries, surveys, new business suggestions, business solicitations or advertisements. In addition, material that is hostile, threatening, illegal or similarly unsuitable or outside the scope of Board matters or duplicative of other communications previously forwarded to the recipient will also be excluded. The Secretary shall retain for three years copies of all stockholder communications that are forwarded.

Code of Business Conduct and Ethics

The Board has also adopted a code of business conduct and ethics that applies to all officers and employees of the Company and a code of business conduct and ethics and conflict of interest policy that applies to the Board of Directors.Board. The purpose of these codes of conduct is to promote honest and ethical conduct; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and to promote compliance with all applicable rules and regulations that apply to the Company and its officers, employees and directors.

Board Leadership Structure

Our governance structureframework provides the Board with the flexibility to select the appropriate leadership structure for the Company. This will be driven by the needs of the Company as well as the particular makeup of the Board of Directors at any point in time. As a result, no policy exists requiring the combination or separation of leadership roles, and the Company’s governing documents do not mandate a particular structure.

Our current leadership structure is comprised of the Chairman of the Board, a separate Chief Executive Officer, an independent director serving as the presiding director ofLead Director who presides over the non-management directors, and strong active independent directors. The CEO is responsible for setting the strategic direction of the Company and for the day to day leadership and management of the Company, while the Chairman of the Board provides guidance to the CEO, directs the agenda for Board meetings and presides over meetings of the full Board of Directors.Board. This structure reflects the continued strong leadership, industry experience and energy brought to the Board of Directors by Richard E. Marriott, who has led the Company as Chair since its split with Marriott International in 1993. His over 46 year career at the Company uniquely provides him with a perspective and wealth of knowledge that is invaluable to the Board.

Another component of our leadership structure is the active role played by our independent directors in overseeing the Company’s business, both at the Board and Committee level. Six of eight of our current directors nominees are considered independent within the meaning of the rules of the New York Stock Exchange. Under our Corporate Governance Guidelines, non-management directors meet in executive session without the presence of the CEO, the Chairman of the Board or other executive officers. The purpose of these sessions is to promote open discussions among the independent directors concerning the business and affairs of the Company as well as matters concerning management, without any member of management present. In accordance with our Corporate Governance Guidelines, the

The Chair of our Nominating and Corporate Governance Committee, Robert M. Baylis, serves as our Lead Director. As such, he presides at all executive sessions of non-management directors. Mr. Baylis also serves as the director to whom correspondence may be directed on behalf of the non-management directors as a group, as described above under “Corporate Governance.” The position and role of the Lead Director is intended to expand lines of communication between the Board and members of management. It is not intended to reduce the free and open access and communications that each independent board member has with other board members and members of management.

At least annually, the Nominating and Corporate Governance Committee discusses the structure and composition of the Board of Directors and reviews the current leadership structure. This is discussed with the full Board as part of the Board’s annual evaluation to assess its effectiveness and takes into account our current business plans and long-term strategy as well as the particular makeup of the Board at that time.

Independence of Directors

It is the Board’s policy that a majority of the directors of the Company be independent. To be considered independent, a director must not have a material relationship with the Company that could interfere with a director’s independent judgment. To be considered independent, directors must also be “independent” within the meaning of the New York Stock Exchange’s requirements. To assist the Board in determining whether a director is independent, the Board has adopted standards for independence set forth in the Company’s Corporate Governance Guidelines.

Under these standards, a director is not considered independent if, within the past three years:

In addition, the Board of Directors also considers the following factors, among others, in making its independence determinations:

Consistent with these considerations, the Nominating and Corporate Governance Committee reviewed directors’ responses to a questionnaire asking about their relationships with the Company, as well as those of their immediate family members, and other potential conflicts of interest. The Committee determined that all of the directorsdirector nominees other than Mr. Marriott and Mr. Walter are independent and recommended this conclusion to the Board.Board that Messrs. Baylis, Golden, Morse and Rakowich and Ms. Korologos have been determined to be independent. The Board approved the determination that six of the Company’s eight directorsdirector nominees are independent. Messrs. Marriott and Walter are not independent because they are Company employees.

PricewaterhouseCoopers (“PWC”) has served, since 1998, as the Company’s internal auditor. Mr. Brittain retired from PWC in 2002, and receives unfunded retirement and other benefits from PWC, a portion of which is variable depending on PWC’s financial results. Mr. Brittain has never been involved in any matters concerning the Company. The Board determined that these factors alone would not impede a determination of independence for Mr. Brittain.

The Board’s Role in Risk Oversight

TheOur Board asof Directors has overall responsibility for risk oversight with a whole overseesfocus on the variousmost significant risks facing the Company, with reviews of certain areas being conducted by the relevant Committees that report on their deliberations to the Board. In this regard, the Board seeks to understand and oversee critical business risks. Risks are considered in almost all business decisions and as part of the Company’s business

strategy. The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, appropriate risk-taking is essential for the Company to be competitive and to achieve its business objectives.

The chart below summarizes the primary areas of risk oversight for the Board and its Committees.

The Board and its Committees implement their oversight responsibilities through management reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include strategic, operating, financial, legal, compliance and reputational risk. Management communicates routinely with the Board, its Committees and individual directors on the significant risks identified through this process and how they are being managed.

Meetings and Committees of the Board

The Board met sevenfive times in 2009.2011. Each director attended at least 75%80% of the meetings of the Board and of the committees on which the director served. The Company expectsUnder the Corporate Governance Guidelines, directors are expected to attend the annual meeting of stockholders. Allstockholders, and all directors attended the annual meeting in 2009.2011. Under our Corporate Governance Guidelines, non-management directors meet in executive session without management and did so after each regularly scheduled

Board meeting in 2009.2011. Mr. Baylis, the Chair of the Nominating and Corporate Governance Committee and Lead Director, presided over the executive sessions of the non-management directors.

The Board has established three standing committees to assist it in carrying out its responsibilities: the Audit Committee, the Compensation Policy Committee and the Nominating and Corporate Governance Committee. The Board has adopted a written charter for each committee, all of which are available on the Company’s website (http://www.hosthotels.com). Copies of these charters

are also available in print to stockholders upon request. SeeHow can I obtain copies of documents referenced in this proxy statement? Each committee consists entirely of independent directors in accordance with New York Stock Exchange rules. The Board generally makes committee assignments in May after the annual meeting of stockholders, upon recommendation of the Nominating and Corporate Governance Committee. The Board may from time to time appoint other committees as circumstances warrant. Any new committees will have authority and responsibility as delegated by the Board of Directors.Board.

Committee		Current Members		Number of Meetings Held in 20092011 and Committee Functions
Nominating and Corporate Governance		Robert M. Baylis (Chair) Ann McLaughlin     Korologos John B. Morse, Jr. Gordon H. Smith		•    Number of meetings: Four   •    Makes recommendations to the Board on corporate governance matters and is responsible for keeping abreast of corporate governance developments;   •    Oversees the annual evaluation of the Board, its committees and management;   •    Reviews periodically the compensation and benefits of non-employee directors and makes recommendations to the Board of Directors or the Compensation Policy Committee of any modifications;   •    Reviews the composition of the Board and skills of directors and recommends nomination of Board members and addition of new members, as appropriate;   •    Ensures that the Board maintains its diversity; •    Reviews policies and programs on matters of corporate responsibility and sustainability, including environmental, social and other matters; and   •    Fulfills an advisory function with respect to a range of matters affecting the Board and its committees, including making recommendations with respect to:   —     selection of committee chairs and committee assignments; and   —     implementation, compliance and enhancements to codes of conduct and the Company’s Corporate Governance Guidelines.

In addition, the Chair of the Nominating and Corporate Governance Committee is the Lead Director and presides at all executive sessions of independent directors, determines the agenda for such discussions, and serves as liaison between the independent directors and the Chairman and the Chief Executive Officer.

Committee		Current Members		Number of Meetings Held in 20092011 and Committee Functions
Compensation Policy		Ann McLaughlin     Korologos (Chair) Robert M. Baylis Willard W. Brittain Jr.(1)		•    Number of meetings: Five   •    Oversees compensation policies and plans for the Company’s employees;   •    Reflects the Company’s compensation philosophy in structuring compensation programs;   •    Approves the goals and objectives for compensation of all executive officers of the Company and approves compensation for other members of senior management;   •    Advises our Board on the adoption of policies that govern the Company’s annual compensation and stock ownership plans;   •    Reviews and approves the Company’s goals and objectives relevant to the compensation of the CEO and evaluates the CEO’s performance in light of those goals and objectives;   •    Reviews and advises the Company on the process used for gathering information on the compensation paid by other similar businesses;   •    Reviews the Company’s succession plans relating to the CEO and other senior management; and   •    Reviews periodic reports from management on matters relating to the Company’s personnel appointments and practices.

Role of the Compensation Consultant

Pursuant to its charter, the Compensation Policy Committee is authorized to retain and terminate any consultant, as well as approve the consultant’s fees, scope of work and other terms of retention. In 2005, the Committee retained compensation consultant Towers Perrin (known as Towers Watson after merging with Watson Wyatt Worldwide effective January 1, 2010). Towers Watson has assisted the Committee in the design, structure and implementation of the executive compensation programs for 2006-2008 and 2009-2011. In addition,October 2010, the Committee retained Pay Governance LLC as its advisor. Pay Governance is an independent consulting firm that is comprised of former Towers Watson associates. Pay Governance advises and consults with the Committee on compensation issues, compensation design, and keeps the Committee apprised of regulatory, legislative, and accounting developments and competitive practices related to executive compensation practices.compensation. They do not determine or recommend the exact amount or form of executive compensation for any executive officers. Towers WatsonPay Governance reports directly to the Committee. ACommittee, and a representative of Towers Watson,Pay Governance, when requested, attends meetings of the Committee, is available to participate in executive sessions and communicates directly with the Committee Chair or its members outside of meetings. The Chair of the Committee, acting on authority delegated by the Committee, approves anyPay Governance does no other work that Towers Watson may do for the Company and its affiliates. In 2009, Towers Watson performed work for the Company and the Company’s European joint venture, in which the Company has a 32% interest and acts as general partner. The work related to assistance with the valuation of pension obligations for financial reporting purposes in Italy, Spain, The Netherlands and Chile. Fees associated withCompany.

this work were approximately $62,220 in 2009. The individuals involved in providing compensation consulting do not provide these other services and there is no communication between those providing compensation services and consultants providing such other services. The Compensation Policy Committee may delegate any or all of its responsibilities to a subcommittee, but did not do so in 2009.2011. The Compensation Policy Committee’s Report on Executive Compensation appears later in this proxy statement.

Compensation-Related Risks

The Compensation Policy Committee oversees the compensation policies and plans for all employees. Management, at the request of the Committee, has assessed the Company’s compensation programs and has concluded that they do not create risks that are reasonably likely to have a material adverse effect on the Company. This risk assessment process included a review of all material compensation policies and practices, which waswere discussed with the Committee. The compensation programs of the Company are all centrally designed and centrally administered. They do not vary by department or business operations. The elements of compensation for senior management and upper middle management are also the same: base salary, annual cash incentive awards and long-term incentives. The performance measures for the incentive awards are (i) Company financial metrics that are based on an annual business plan and budget reviewed and approved by the Board of Directors and (ii) personal performance goals that are derived from the annual business plan and budget and Company strategic plan, which tie to measures of long-term success of the Company. The business plan and budget are reviewed quarterly with the Board and the strategic plan is addressed annually. The personal goals are drafted by each employee annually and approved by each manager so that there is a common purpose and accountability throughout the Company. Total compensation is capped throughout our compensation programs, and the Compensation Policy Committee reviews all senior management compensation and that of any employee earning more than $250,000$500,000 in cash compensation.annual target compensation, which would include salary, bonus and equity awards. Based on the foregoing, we believe that our compensation policies and practices do not create inappropriate or excessive risk-taking.

Compensation Policy Committee Interlocks and Insider Participation

None of the members of the Compensation Policy Committee is or has been an officer or employee of the Company or had any relationship that is required to be disclosed as a transaction with a related person.

Identification and Evaluation of Director Candidates

Each year the Nominating and Corporate Governance Committee reviews with the Board of Directors the composition of the Board as a whole and makes a recommendation whether to renominate directors and whether to consider any new persons to be added to the Board of Directors.Board. The Committee considers director candidates suggested by members of the Committee, other directors and management. In 2011, the Committee engaged the services of a third party search firm, Heidrick & Struggles, to assist in identifying and evaluating director candidates. The Committee will also consider any written suggestions of stockholders for director nominees. The recommendation must include the name and address of the candidate, a brief biographical description and a description of the person’s qualifications. Recommendations should be mailed to Host Hotels & Resorts, Inc.,

6903 Rockledge Drive, Suite 1500, Bethesda, MD 20817, Attn: Secretary. The Committee will evaluate in the same manner candidates suggested in accordance with this policy and those recommended by other sources. The Committee has full discretion in considering all nominations to the Board of Directors.Board. Alternatively, stockholders who would like to nominate a candidate for director (in lieu of making a recommendation to the Nominating and Corporate Governance Committee) must comply with the requirements described in this proxy statement and the Company’s Bylaws. See “Stockholder Proposals for our Next Annual Meeting.”

The evaluation of director candidates involves several steps, not necessarily in any particular order. Preliminary interviews of director candidates may be conducted by the Chair of the Committee or, at his request, any other member of the Committee, the Chairman of the Board, or other directors. Background material pertaining to director candidates is distributed to the members of the Committee for their review. References are checked and analyses are performed to identify potential conflicts of interest and appropriate independence from the Company. Director candidates who the Committee determines merit further consideration are interviewed by the Chair of the Committee and other Committee members, directors and executive officers as determined by the Chair of the Committee. The results of these interviews are considered by the Committee in its deliberations.

There are certain minimum qualifications for Board membership that director candidates should possess, including strong values, high ethical standards, mature and independent judgment, diverse business experience, familiarity with the issues affecting the Company’s business, and a commitment to full participation on the Board and its committees. The Committee has adopted guidelines in its charter to be used in evaluating candidates in order to ensure a diverse and highly qualified Board of Directors.Board. In addition to the characteristics mentioned above, the guidelines provide that the Committee may consider the following criteria, including: experience in running a major enterprise, sound business acumen, experience as a board member of another publicly held company, academic expertise in an area of the Company’s operations, and a reputation, both personal and professional, consistent with the image and reputation of the Company. In addition, when considering new Board members, the Committee considers whether the candidate would qualify as an independent director under New York Stock Exchange rules and other applicable regulations.

The Board is also committed to a diversified membership, in terms of both the individuals involved and their experience. As stated in the Committee’s Charter,charter, the Committee may take into account the overall diversity of the Board, including professional background, experience, perspective, age, tenure, gender, and ethnicity. The Board is satisfied that the current nominees reflect an appropriate diversity of gender, race, age, professional background and experience but is committed to continuing to consider diversity issues in evaluating the composition of the Board.

This year, twoone new directorsdirector who havehas not previously stood for election to the Board by the stockholders, Willard W. Brittain, Jr. and Gordon H. Smith, areMr. Walter C. Rakowich, is nominated for election to the Board of Directors. Both directors were identified byMr. Rakowich was introduced to existing Board members by Ferguson Partners Ltd, a professional search firm, and elected to the Board in July 2009. Eacheffective March 1, 2012 on the recommendation of the Nominating and Corporate Governance Committee. Mr. Rakowich qualifies as an independent director under New York Stock Exchange rules.

DIRECTOR COMPENSATION

20092011 Director Fees

Directors who are employees receive no additional compensation for serving on the Board or its committees. In 2009,2011, we provided the following annual compensation to our independent directors.

Compensation Philosophy

Directors are compensated in cash and stock to align their interests with those of our stockholders. The components of director compensation are discussed below.

Cash Compensation

The Company provides non-employee directors the following cash compensation in addition to reimbursement of customary and usual travel expenses.

There are no fees paid for attendance at the 5 regularly scheduled Board meetings, however, non-employee directors would receive $1,500 for attendance at any special meeting, of which there was onewere none in 2009.2011.

Stock Compensation—Annual Stock Award

Stock compensation in 2009 consisted ofNon-employee directors receive an annual award ofdirector stock units equaling the annual retainer fee ($65,000) in value and credited to each director’s deferred stock unit accountaward under the Non-Employee Directors’ Deferred Stock Compensation Plan. Under that plan, the annual award is granted to each director immediately following the annual meeting of stockholders. The number of stock units is calculated by dividing the annual retainer fee by the average of the high and low prices of our common stock on the date ofPlan effective after election at the annual meeting. In 2009,2011, the average of the high and low price of our common stock on May 14, 2009 was $7.89 and each director was credited with 8,244 stock units. On November 4, 2009, the Nominating and Corporate Governance Committee recommended, and the Board approved, a prorated annual award of stock units to Messrs. Brittain and Smith, who both joined the Board in July 2009. The number of stock units awarded was equal to the annual retainer fee multiplied by 10/12 and divided by the average of the high and low prices of our common stock on the grant date.

Directors are also credited with dividend equivalents that are equal in value to the dividends paid on our common stock. The Company will convert the stock units to common stock upon a director’s termination of service from the Board, as more fully described below.

Compensation Changes Effective in 2010

The Nominating and Corporate Governance Committee reviewed the compensation of the independent directors in 2009. Stockholder approval of the Company’s 2009 Comprehensive Stock and Cash Incentive Plan allowed more flexibility structuring directors’ compensation because, unlike the former stock plan, it allows directors to receive grants of equity. Effective January 1, 2010, the Committee recommended, and the Board approved, an increase in the annual stock retainer for independent directors from $65,000 toequaled $75,000, to be made after the annual meeting of stockholders with the number of shares to be determined based on the fair market value of the Company’s common stock on that date. Fair market value under the 2009 Comprehensive Stock and Cash Incentive Plan is the closing price of the Company’s stock on the date of grant. The Committee recommended no increase to the annual cash retainer, committee meeting fees or chair retainers.

Under the Non-Employee Directors’ Deferred Stock Compensation Plan, directors will receive the annual stock award in fully-vested restricted stock, unless a director makes an

election prior to the end of the year preceding the award to defer the award into stock units. Directors also would elect at that time the date when the stock units would be payable, which is either upon termination of service from the Board in a lump sum or in annual installments up to 10 years, or in a lump sum payable the earlier of (i) termination of service or (ii) 3 or 5 years from the date of grant. In addition,All directors elected to defer the Committee implemented new2011 award into stock ownership guidelines effectiveunits. The closing price of our common stock on the annual meeting date of May 12, 2011 was $17.15, so each director received either 4,373 shares or, if they deferred, they were credited with 4,373 stock units. Directors are also credited with dividend equivalents that are equal in 2010. These are discussed below.value to the dividends paid on our common stock.

Stock Ownership Policy

Effective January 1, 2010, non-employee directors must own common stock of the Company (which includes stock units held under the Non-Employee Directors’ Deferred Compensation Plan) equal in value to five times the annual cash retainer ($65,000) paid to directors. Compliance with these guidelines will be measured on the first trading day of each calendar year, using the annual cash retainer then in effect and the closing price of our common stock on that day. Any subsequent change in the value of the common stock will not affect the amount of stock that directors are required to hold during that year. In the event that the annual cash retainer increases, a non-employee director will have five years from the time of such increase to acquire any additional shares needed to meet these guidelines. There will be a transition period of five years for non-employee directors to achieve the ownership requirement. Mr. Marriott and Mr. Walter, as employees, are subject to separate stock ownership guidelines applicable to corporate officers. All directors currently meet the stock ownership guidelines, except for Mr. Smith, who joined in 2009, and Mr. Rakowich who joined in March 2012.

Perquisites

To encourage our directors to visit and personally evaluate our properties and the managers of our properties, directors receive complimentary rooms, food and beverage and other hotel services when they stay at properties owned by us or managed by our major operators. In addition, directors are reimbursed for taxes associated with the value of this benefit.

Non-Employee Directors’ Deferred Stock Compensation Plan

TheIn addition to the annual stock award, the Non-Employee Directors’ Deferred Stock Compensation Plan allows directors to defer receipt of all or part of their annual cash retainer, meeting fees, and committee chair fees until after their service on the Board has ended. Under this plan, the Company has established a stock unit account for each non-employee director and all deferred fees are credited to this account as of the date the fee would have been paid. Deferred fees are converted into stock units based on the fair market value of the Company’s common stock on the date the fee otherwise would have been paid. Dividends are “reinvested” in additional stock units and credited to the account in stock units based on the market price of the stock on the date dividends are paid.

With respect to stock units received prior to January 1, 2010, upon

Upon termination of service from the Board, a director’s stock unit account is settled by delivering an amount of our shares of common stock equal to the number of stock units, and, with respect to any deferred cash fees, directors had the option to receive such shares as a lump sum or in substantially equal annual installments over a period not to exceed 10 year period.years. With respect to annual stock awards, directors may also elect to defer payment of the award as set forth above.

2012 Director Compensation

The Nominating and Corporate Governance Committee is responsible for reviewing and making recommendations to the Board on compensation and benefits for the independent directors. Under its charter, the Nominating and Corporate Governance Committee is authorized to engage consultants or advisors in connection with its review and analysis of director compensation, which it did in 2011. The Committee recommended new compensatory arrangements, which were adopted by the Board of Directors, and are effective for 2012. The components are described below:

PROPOSAL ONE

ELECTION OF DIRECTORS

Our Board of Directors currently consists of nine members, although there are only eight members. director nominees standing for election. In February 2012, Mr. Willard W. Brittain expressed his intention to retire from the Board and accordingly his term will end at the conclusion of the 2012 annual meeting. The Board determined that, effective at the conclusion of the 2012 annual meeting, the size of the Board will be decreased from nine to eight directors.

Each director nominee stands for election every year. Each nominee has consented to serve if elected, but should any director nominee be unavailable to serve (an event which our Board does not now anticipate), the proxies named on your proxy card will vote for a substitute nominee recommended by the Board of Directors.Board. Alternatively, should such circumstances arise, the Board, on the recommendation of the Nominating and Corporate Governance Committee, may decide to reduce the size of the Board and the number of nominees.

Except in a contested election, each director will be elected only if he or she receives more votes “for” than votes “against” the director nominee. As set forth in the Company’s Corporate Governance Guidelines, any director nominee who is not elected by the vote required and who is an incumbent director must immediately tender his or her resignation to the Board for consideration. The Nominating and Corporate Governance Committee will then make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action is recommended. The Board will act on the tendered resignation within 90 days and will promptly disclose its decision and rationale as to whether to accept the resignation or the reasons for rejecting the resignation. If a director’s resignation is accepted by the Board, or if a nominee for director is not elected and is not an incumbent director, the Board may fill the resulting vacancy or decrease the size of the Board.

It is the responsibility of the Nominating and Corporate Governance Committee to identify, evaluate and recommend prospective director candidates for the Board, of Directors, in accordance with the policy and procedures described in the Committee’s Charter and the Company’s Corporate Governance Guidelines. The Committee regularly reviews the composition of the Board in light of the Company’s changing requirements and its assessment of the Board’s performance. The Committee seeks to include a complementary mix of individuals with diverse backgrounds and skills reflecting the broad set of challenges that the Board confronts. For more information on this process, see “Corporate Governance—Identification and Evaluation of Director Candidates.”

In assessing qualifications for nominees, the Committee expects all candidates to meet the qualifications described in the Committee’s charterCharter and the Company’s Corporate Governance Guidelines, including integrity, mature and independent judgment, diverse business experience, familiarity with the issues affecting the Company’s business, and the requisite time and ability to attend meetings and fully participate in the activities of the Board. The Committee believes that each of the nominees possesses these key attributes that are important to an effective Board. Each director nominee holds or has held senior executive positions in large organizations or government offices and has experience relevant to the Company’s business. Our directors also serve on the boards of other public and private companies and have an understanding of corporate governance practices and trends. The Committee also takes into account diversity considerations in determining the slate of directors and believes that, as a group, the nominees bring a broad range of perspectives to the boardBoard deliberations. In addition to the above, the Committee also considered the specific

experiences described in the biographical details that follow in determining to nominate the individuals set forth below for the election as directors.

The Board of Directors unanimously recommends that you vote FOR each of the nominees for director.

NOMINEES FOR DIRECTOR

Terence C. Golden, 6567		Director since 1995
		Mr. Golden served as our President and Chief Executive Officer from 1995 until his retirement in May 2000. He is the Chairman of Bailey Capital CorporationCorporation. He is a director of Pepco Holdings, Inc. and a member of the Federal City Council in Washington, D.C. In addition, Mr. GoldenCouncil. He is chairman of KIPP-DC and a Directordirector of Pepco Holdings, Inc., Stemnion, Inc., The Morris and Gwendolyn Cafritz Foundation and the Chairman of Kipp DC.Fight for Children. He is also a Trusteetrustee of the Washington Real Estate Investment Trust. In past years, Mr. Golden served as Chief Financial Officer of The Oliver Carr Company, a Directordirector of Cousins Properties, Inc., as a member of the G2 Satellite Solutions Advisory Committee and was also co-founder and national managing partner of Trammell Crow Residential Companies. He served as Administrator of the General Services Administration from 1985 to 1988 and was Assistant Secretary of the Treasury from 1984 to 1985.   Relevant Experience: ExtensiveMr. Golden has extensive experience in real estate, hospitality and construction experience; broadthrough service in senior management positions at The Oliver Carr Company and Trammell Crow Residential Companies, as well as his service as our Chief Executive Officer for five years. Mr. Golden is an experienced business leader and brings knowledge and experience of operations, finance, and other aspects of our industry and business to the Company; demonstrated business, financial and organizational experience as former chief executive officer.Board.

Richard E. Marriott, 7173				Director since 1979
Chairman of the Board				Director since 1979
		Mr. Richard E. Marriott is our Chairman of the Board. He is Chairman of the Board of First Media Corporation and the Polynesian Cultural Center. He is the Chairman and a director of the J. Willard Marriott and Alice S. Marriott Foundation and a director of the Richard E. and Nancy P. Marriott Foundation. Mr. Marriott also serves on the Federal City Council and the National Advisory Council of Brigham Young University. He previously served on the Board of Marriott International, Inc. and is a past President of the National Restaurant Association. In addition, Mr. Marriott is the President and a Trustee of the Marriott Foundation for People with Disabilities and a Trustee of the Boys & Girls Clubs of America.Disabilities.   Relevant Experience: ComprehensiveMr. Marriott has comprehensive knowledge of the Company and provides unique perspective and insight into the hospitality industry;industry based on a 46 year history with the Company and Marriott International. During his tenure, Mr. Marriott has served in various executive capacities, was elected to the Board of Directors in 1979, and has served as our Chairman since 1993. Mr. Marriott has a long history of successful management of the Company.

Gordon H. Smith, 5759				Director since 2009
		Mr. Smith is President and CEO of the National Association of Broadcasters. From March to October 2009 he was a senior advisor and resident at the Washington, D.C. office of Covington & Burling LLP as a member of the Government Affairs and International Trade practice groups. In 2008, Senator Smith completed his second term as a United States Senator from the State of Oregon, where he served on the Commerce, Science and Transportation Committee; the Energy and Natural Resources Committee; the Finance Committee; and the Indian Affairs Committee. In addition, he was a ranking member of the Senate Finance Subcommittee on International Trade and Global Competitiveness and for six years chaired the Senate Foreign Relations Subcommittee on European Affairs. Prior to his election to the United States Senate, Mr. Smith directed the operations of Smith Frozen Foods, his family’s frozen food processing business and is currently Chairman of the Board of Smith Frozen Foods, which is privately held. In 1992, he was elected to the Oregon State Senate, of which he became president in 1995. He also previously practiced law in the states of New Mexico and Arizona.   Relevant Experience: High-level U.S. GovernmentMr. Smith contributes to the mix of experience and leadership;qualifications the Board seeks to maintain through his high-level U.S. government experience and leadership as a United Sates Senator, and through his knowledge of public policy, international affairs and trade and law; financiallaw. In addition, Mr. Smith also brings to the Board significant business experience and business experience; media/broadcasting.knowledge of finance and accounting obtained through his management of Smith Frozen Foods, a leading producer of frozen foods.

PROPOSAL TWO

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

The Audit Committee has unanimously approved and voted to recommend that the stockholders ratify the appointment of KPMG LLP as independent registered public accountants of the Company for 2010.2012. Representatives of KPMG LLP will be at the annual meeting and will be given the opportunity to make a statement, if they desire to do so, and to respond to questions.

The Board of Directors is asking stockholders to ratify the selection of KPMG LLP as our independent registered public accountants for 2010. Although ratification is not required by our Bylaws, the Board is submitting the selection of KPMG LLP to our stockholders for ratification as a matter of good corporate practice. If the selection is not ratified, the Audit Committee will consider whether it is appropriate to select another registered public accounting firm. Even if the selection is ratified, the Audit Committee in its discretion may select a different registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and our stockholders.Company.

The Board of Directors unanimously recommends a vote FOR ratification of the appointment of KPMG LLP as independent registered public accountants of the Company for 2010.2012.

REPORT OF THE AUDIT COMMITTEE

To Our Stockholders:

The Audit Committee serves as the representative of the Board of Directors of Host Hotels & Resorts, Inc. (the “Company”)the Company for general oversight of the Company’s financial accounting and reporting, systems of internal control and audit processes. Management of the Company has responsibility for preparing the Company’s financial statements, as well as for the Company’s financial reporting process and internal controls. KPMG LLP, acting as independent registered public accountants, is responsible for performing an independent audit of the Company’s financial statements and internal control over financial reporting and for expressing an opinion on the conformity of the Company’s financial statements with U.S. generally accepted accounting principles and the effectiveness of the Company’s internal control over financial reporting. The Audit Committee is responsible for monitoring and overseeing these processes. The Audit Committee members are not professional accountants or auditors, and the Audit Committee’s functions are not intended to duplicate or certify the activities of management and the independent registered public accountants. In this context, the Audit Committee has:

In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.2011. The Annual Report on Form 10-K was filed with the Securities and Exchange Commission on March 1, 2010.February 22, 2012.

The Audit Committee

JohnJOHN B. Morse, Jr.MORSE, ChairJR., CHAIR

Robert M. BaylisWILLARD W. BRITTAIN

Willard W. Brittain, Jr.

GordonGORDON H. SmithSMITH

AUDITOR FEES

Principal Accountant Fees and Services

The Company was billed the following amounts for professional services by KPMG LLP, its independent registered public accountants, for 20092011 and 2008:2010:

The Audit Committee concluded that the provision of these audit-related and tax services is compatible with maintaining the independence of KPMG LLP. The Company does not engage KPMG LLP for any tax services unrelated to audit services.

Pre-Approval Policy for Services of Independent Registered Public Accountants

All services performed by KPMG LLP were pre-approved by the Audit Committee in accordance with its 20092011 pre-approval policy. The policy describes the audit, audit-related, tax and other services permitted to be performed by the independent registered public accountants, subject to the Audit Committee’s prior approval of the services and fees. On an annual basis, the Audit Committee will review and provide pre-approval for certain types of services that may be provided by the independent registered public accountants without obtaining specific pre-approval from the Audit Committee. The Audit Committee has pre-approved certain services (and corresponding cost levels) in conjunction with Committee meetings, typically conducted in February of each year. If a type of service to be provided has not received pre-approval during this annual process, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels or budgeted amounts will also require separate pre-approval by the Committee.

The Audit Committee has designated the Senior Vice President, Corporate Controller to monitor the performance of all services provided by the independent registered public accountants and to determine whether such services are in compliance with the pre-approval policy.

Policy for Hiring Members of the Audit Engagement Team

The Audit Committee adopted a policy regarding the hiring of audit engagement team members to address the potential for impairment of auditor independence when partners and

other members of the audit engagement team accept employment with the Company. Under the policy, the Company may not hire into a financial oversight role any individuals who were members of the Company’s audit engagement team for the prior year. Individuals not subject to the one-year “cooling off” period include, among others, persons who provided less than 10 hours of audit services and individuals whose employment resulted from an emergency or other unusual situation. In all such cases, the Audit Committee must determine that the relationship is in the best interests of stockholders.the Company. In addition, the Company may not appoint a director who is affiliated with or employed by a present or former auditor of the Company until three years after the affiliation or auditing relationship has ended.

Other Company Accountants and Auditors

The Company has engaged Ernst & Young LLP for tax consultation and tax compliance services and PricewaterhouseCoopers LLP as its internal auditors. The purpose of the internal audit program is to provide the Audit Committee and Company management with ongoing assessments of the Company’s risk management processes and to review the effectiveness and design of internal controls at our properties and the Company’s corporate office.

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Philosophy

We have three objectives forDiscussion and Analysis (“CD&A”) provides you with information on the Company’s executive compensation that we have followed consistently inprograms and practices, and the design and structure of our programs over the last decade:

Elements of the 2009-2011 Compensation Program

In January of 2009, the Compensation Policy Committee (the “Committee”) of the Board of Directors of(the “Compensation Committee”) has made under the Company adopted new compensatory arrangements in which senior management of the Company, including theprogram. The CD&A focuses on our named executive officers participate.who, in 2011, were:

Mr. Risoleo moved to his current position, Executive Vice President, Managing Director, Europe, effective January 1, 2012.

Company Performance and Compensation

Our executive compensation program and benefit plans are designed to attract, motivate and retain a talented management team and to appropriately reward individual contributions to our business plan and long-term strategic objectives. We believe that this fosters a strong alignment between stockholder and executive interests. Turmoil in the financial markets over the summer of 2011 inhibited the Company’s ability to raise capital and contributed to an overall weaker than expected second half of the year. Still, despite the volatile operating environment in 2011, the Company met or exceeded the majority of its primary objectives and positioned itself for continued success. Highlights from 2011 include:

For more complete information about our 2011 performance, please review the Company’s Annual Report on Form 10-K included in our mailing to stockholders.

2011 Compensation Actions

Results of 2011 Advisory Resolution to Approve Executive Compensation. At the 2011 annual meeting of stockholders, we held our first advisory resolution to approve executive compensation. Over 99.6% of the votes cast were in favor of this advisory resolution. The arrangementsCompensation Committee considered this favorable outcome and believed it conveyed our stockholders’ support of the Compensation Committee’s decisions and the current executive compensation program. At the 2012 annual meeting of stockholders, we will again hold an annual advisory resolution to approve executive compensation (see page 58), as supported by the stockholders in accordance with the Company’s recommendation in 2011. The Compensation Committee will continue to consider the results from this year’s and future advisory votes to approve executive compensation.

Our compensation philosophy will also continue to reflect practices and policies that we believe serve our stockholders’ interests. These include:

Current Program. The structure and design of the current executive compensation program was adopted in 2009, effective fromfor the three years 2009 through 2011 and replace the expired compensation program which was in effect from 2006 through 2008. The program builds on the experience of previous programs and the work that the Committee began in late 2007 when Mr. Walter became Chief Executive Officer and executives were promoted and responsibilities expanded. Consistent with prior years, there2011. There are three key elements to the compensation program:elements: base salary, annual cash incentives and equitylong-term incentive awards. Although theThe Compensation Committee does not follow a specific formula in determining the mix of compensation, at the executive level, 60% or more ofdetermined the total target compensation is generally in the form of equity awards to emphasize performance and align management and stockholder interests. Each element of the 2009-2011 compensation program is discussed below.

Base Salary

Base salary is set at an annual rate, based on the level of the position within the Company, experience, scope of responsibility, and the individual’s performance. This is the only fixed component of the compensation program. The Committee generally reviews salary at the beginning of each year. Adjustments, if any, take into account an individual’s performance, responsibilities, experience, internal equity and external market data. Base salary represents between 16%-23% of the named executive officers’ total targeted compensation under the 2009-2011 program.

Annual Cash Incentives

The annual cash incentives reward the achievement of individual performance and Company goals. Bonuses are calculated as a percentage of an individual’s salary and weighted depending on the level of responsibility in the Company. Forfor the named executive officers in 2009 and all employees atawarded the executive vice president level, 80%long-term incentives for the three-year period with an upfront award of restricted shares and options, each eligible to vest one-third each year if, and only if, the eligible cash bonus is based on the satisfaction of Company financial goals and 20% on satisfaction of personal performance goals. The weighting reflects the Committee’s continued belief that the incentive emphasis for senior executives should be on Company performance.

The annual cash amount that may be earned is further refined based on therequired level of performance on each goal, which is measured at “threshold”, “target”achieved. See “2009-2011 Program—Design and “high”Structure”. As a result, the total amount thatThere have been no changes in any individual may earn annually depends on: (1) salary, because the award is calculated and paid as a percentage of annual salary, (2) the relative weighting between financial and personal goals, (3) the level of performance achieved on each of two Company financial goals, and (4) the level of performance achieved on personal goals. There is no bonus if performance is below threshold, and results are interpolated between the levels of threshold, target and high.

The Committee believes that the structureelements of the annual cash incentive award has worked well for all employees and made just a few changes in the program for 2009-2011. since 2009.

The chart below summarizes the changes. More detail2009-2011 program and provides a framework for the discussion of compensation actions in 2011 that follows.

Element		Current		Rationale
		Individual performance goals comprise 20% of the total target annual incentive opportunity for the named executive officers		Formal, objective performance goals create line of sight and motivate behaviors that support the Company’s performance. Performance goals are tied to the Company’s business plan and budget as approved by the Board, and include a broad spectrum of metrics, such as financial and operational results, strategy and growth as well as leadership goals.
Long-term Incentive Program		Upfront grant of equity incentive awards during the first year of the program, with one-third of each award eligible to vest during each year of the program. 90% of the target award opportunity is granted in the form of performance-vested restricted shares		Focus on long-term awards creates incentives for long-term value creation and rewards executives for increases in stockholder value over the life of the program. All of this the long-term incentive is performance based.
		•     56% of the restricted stock award opportunity uses individual performance goals, with vesting from 0% to 150% of target, depending on performance. No dividends, except on shares that vest and are released		Restricted shares tied to individual performance goals encourage executives to meet short-term/immediate business objectives, which tie to long-term strategic growth for the Company and allow for line of sight with controllable results
		•     44% of the restricted stock award opportunity uses relative total stockholder return (TSR), which is equally weighted between companies comprising the NAREIT Equity Index and an index of lodging REITs and hotel management companies (the “Lodging Index”). Vesting is from 0% to 200% of target, depending on performance. No dividends, except on shares that vest and are released		Restricted shares tied to the relative TSR measure provide a link to stockholder value, with recognition of the other companies that Host may be competing against for capital, talent and business opportunities
		10% of the target award opportunity is through stock options that vest ratably over three years beginning on the first anniversary of the date of grant		Stock options provide a link to absolute stockholder value creation through stock price appreciation. Options vest based on continued service and, therefore, serve as a retention mechanism. No cash dividends accrue or are paid on options.
Perquisites		•     Dining, complimentary rooms and other hotel services when on personal travel at hotels that we own or that are managed by our major operators, •     Financial planning and tax services, •     Reimbursement for taxes associated with these benefits		Encourages executives to enhance their understanding of properties, operations of key managers at properties and other hotels in the same class to assist in portfolio development and improvements Financial planning and tax services represent a minimal cost while ensuring that executives are in compliance with regulatory requirements

Element		Current		Rationale
Benefits		Same as those provided to all employees		Executives should not receive preferential health and welfare benefits
Other Design Features		Executive Deferred Compensation Plan Executive Severance Plan Stock Ownership and Retention Policy Prohibition on Hedging and Short Sales		Provides executives with the opportunity to defer compensation. No guaranteed returns and no above-market interest rates. No pension plans or SERP In effect since 2003, allows benefits to be provided on a consistent basis, which promotes stability and continuity of senior management Ensures that management has a meaningful ownership stake Company’s Insider Trading Policy Statement has a longstanding prohibition on employees engaging in “short sales” or hedging of Company securities

Compensation Determinations in 2011.The table below, which supplements the Summary Compensation Table that appears on page 46, shows the financial measurescompensation realized for 2011 by each named executive officer and personal performance goalsis useful in understanding the compensation discussion that follows.

2011 Realized Pay Table

The difference between this supplemental table and the Summary Compensation Table for 2011 presented on page 46 is the method used to value stock awards. Amounts shown in the Summary Compensation Table for 2011 reflect the grant date fair value of stock awards at the time the stock awards are deemed to be granted for accounting purposes, which is the year in which the performance criteria are established. These amounts are significantly higher than the value of the stock awards at the time the Compensation Committee determined the number of shares subject to the stock awards in 2009, due to the long-term price appreciation of our shares since that time. In addition, a significant portion of the amounts reported in the Summary Compensation Table for 2011 relate to stock that was ultimately forfeited due

to failure to achieve the performance criteria. It should be noted that there is no assurance that the named executive officers would actually realize the value attributed to these stock awards even in this supplemental table, since the ultimate value of the stock awards will depend on when the released shares are sold. This supplemental table does not include value attributable to stock option awards that were granted in 2009 and vested during 2011, the full grant date fair value of which is reported in the Summary Compensation Table for fiscal year 2009. This table is not a substitute for the Summary Compensation Table and is intended to provide additional information that the Company believes is useful in facilitating an understanding of 2011 realized compensation amounts to executive officers.

Base Salary. At its meeting in February 2011, the Compensation Committee reviewed the base salaries of executives. The Compensation Committee provided a salary increase of 3% to the named executive officers, which was the first increase since salaries were set in 2008 and consistent with the Compensation Committee’s action in July 2010 on general salary increases for employees below the level of senior management.

Annual Cash Incentive.

Financial MeasuresMeasures. The Compensation Committee approved the financial metrics for Adjusted FFO and ROIC for the Annual Cash Incentive

2011 annual cash incentive award at its February 2011 meeting. The two financial measures of performancemetrics are funds from operations per diluted share, as adjusted for certain items (“Adjusted FFO”) and returnbased on invested capital (“ROIC”).

The Company uses funds from operations per diluted share in accordance with National Association of Real Estate Investment Trusts (“NAREIT”) guidelines as a supplemental measure of operating performance in its earnings releases and financial presentations. The Committee retained it as the primary financial measure and the “threshold”, “target” and “high” goals are established at the beginning of the year as part of the Company’s business plan and budget. Because it is the primary measure, it represents 70% of the total target financial performance award. The Committee considers adjustments that reflect (i) items that are unusual in nature (for example, the income from a large settlement and significant acquisition costs) and (ii) items that are in the long-term interest of the Company but would reduce funds from operations per diluted share in the performance period (such as costs associated with senior notes redemptions, debt prepayments, and preferred stock redemptions)budget, which if included, would not reflect the recurring funds from operations of the Company. The adjustments are reviewed, discussed and approved by the AuditCompensation Committee and are explainedapproved by the Board at the February 2011 meeting. The Compensation Committee received regular updates from management on the Company’s business results against these objectives, and reviewed the preliminary year-end results on February 3, 2012. The Compensation Committee took into account as adjustments to FFO the items which have been disclosed in the Company’s earnings releases and 20092011 Annual Report on Form 10-K in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Net IncomeLoss Available to Common Stockholders to NAREIT and Adjusted Funds from Operations per Diluted Share” (page 86 of the Annual Report on Form 10-K). The Compensation Committee approved the results, subject to approval of the Company’s financial results for year-end 2011. The Audit Committee reviewed and approved the year-end financial results at its February 13, 2012 meeting, which were also approved by the Board at that time.

The new program incorporateschart below shows the Adjusted FFO and ROIC as an additional measuremeasures established in February 2011 and the Company’s actual results for 2011.

Personal Performance Goals. The performance goals for each named executive officer were also reviewed and approved by the Compensation Committee at its February 2011 meeting. Mr. Walter drafted the performance goals in discussion with, and for, the other executive officers, and drafted his own, in consultation with the Compensation Committee. The goals are designed to be attainable at a “target” level. The Compensation Committee also conducted a mid-year review of financial performance. ROIC was addedthe personal goals at its July meeting to ensure that they were still appropriate.

At its meeting in February 2012, the Compensation Committee discussed each executive’s performance. The Committee’s assessments of the named executive officers, other than Mr. Walter, were based, in part, on Mr. Walter’s judgment and recommendations and on each executive’s written assessment of his or her performance. Mr. Walter also wrote an assessment of his own performance for the Committee’s consideration, and the Committee discussed his performance and its recommendations

with the independent directors in an executive session. The chart below summarizes the 2011 personal performance goals and results for the named executive officers.

		Goals		Achievements
Mr. Larson		Implement 2011 Investor Relations plan		Maintained strong relationships with investors and analysts, participated in industry conferences, non-deal road shows.
		Develop overall long-term asset recycling plan		Worked with asset management and formulated a capital expenditure plan for three year asset sale plans.
		Implement 2011 asset sale plan		Weak credit market inhibited sales, but substantial progress made.

Summary of Annual Cash Incentive. The chart below shows the components of the annual incentive cash award for 2011 under each of the financial performance metrics and personal performance goals. The total cash award exceeded target primarily due to the slightly above target levels of Company performance on the Adjusted FFO measure:

Long-Term Incentives. As the long-term incentive component of our executive compensation program for 2009-2011, restricted stock was granted as an upfront award in 2009 for the full three-year performance period, with one-third eligible to vest in each of the performance years ended 2009, 2010 and 2011. The upfront grant represented the maximum number of shares that may be earned over the three-year period, that is, invested effectively. It reflectsperformance at the “high” level for each of the three years.

Based on the Committee’s review and supportsdetermination of each named executive officer’s personal performance as described above under “Annual Cash Incentive”, the following shares vested for performance in 2011:

Shares that were not earned under the personal performance measure were forfeited and no dividends were paid on shares forfeited.

Total Stockholder Return. The Committee also reviewed the Company’s portfolio-driven balance sheet. ROICresults on the TSR measures at its meeting in February 2012. The results were calculated, at the request of the Committee, by Towers Watson. TSR represents a cumulative return for one year (from year-end 2010 to year-end 2011) reflecting price appreciation and dividend payments and is measured against two indices, the remaining 30%NAREIT Equity Index, and the Lodging Index. These indices represent companies against which the Company competes for capital, talent and business opportunities. The companies in the latter index

reflect a narrower group of companies focused on lodging and allows for better recognition of asset strategy. The Lodging Index companies were recommended in 2009 by Towers Watson, the Committee’s independent consultant at the time, after discussion with management, and were approved by the Committee. The companies in the Lodging Index are:

The chart below shows the Company’s 2011 results on the TSR measures:

For the 2011 performance period, the Company ranked 100^th out of 123 companies for a percentile rank of approximately 19% in the NAREIT Equity Index, and 4^th out of 8 peer companies for a percentile rank of 59% in the Lodging Index. Accordingly, the Company’s results were below the “threshold” level (the 30^th percentile) as compared to the NAREIT Equity Index, and, as a result no shares were released and all were forfeited with respect to this metric. The Company was between “target” (50^th percentile) and “high” (75^th percentile) as compared to the Lodging Index. The Committee noted that turmoil in the financial markets in the latter half of 2011, including issues related to the raising of the U.S. debt ceiling and the downgrade of the U.S. credit rating, as well as the European sovereign debt crisis, affected the lodging sector significantly relative to the overall market and REITS generally. As a result, while the Company performed well in 2011 compared to its peers in the Lodging Index, it underperformed relative to the NAREIT Equity Index. As noted below, however, during the three year period covering the 2009 – 2011 program, the Company had a percentile rank of approximately 64% in the NAREIT Equity Index.

The chart below shows the shares eligible for release at target level of achievement and the actual shares released on each of the TSR measures for 2011 performance. As previously noted, all shares under the NAREIT TSR measure were forfeited.

To the extent shares did not vest in any one year of the program, that is, 2009 or 2010, based on either of the relative TSR measures, there was an opportunity for the unvested shares to vest at the end of 2011 based on a cumulative relative return over the three-year period for each measure. Shares

would only vest if the cumulative return was in the 75th percentile or higher measured against the respective index at the end of the three year period. For the three year cumulative performance, the Company had a percentile rank of approximately 64% in the NAREIT Equity Index, and 24% in the Lodging Index. As a result, all unvested shares from 2009-2011 were forfeited.

Summary. The Committee established total target compensation for executives at the inception of the program in 2009 with the potential for executives to earn higher amounts based on better performance and long term stockholder value creation. The results for 2011, as shown in the charts below, indicate that the program functioned as designed. Cash compensation, although less than that earned in 2010, was modestly above target levels because of the Company’s just above target performance on the Adjusted FFO measure for 2011 and the named executive officer’s performance on individual objectives for 2011. The number of shares released for 2011 performance was below target because of the Company’s TSR performance against the NAREIT Equity Index.

2011 Total Cash Compensation Compared to Target

The following chart shows the number of shares released based on 2011 performance compared to target.

2011 Total Number of Shares Released Compared to Target

Finally, as this was the final year of the program, the following chart shows all shares that have been forfeited since 2009. Under the program, shares were granted upfront in 2009 for the three year period and the number awarded reflected the maximum that could be earned for performance at the “high” level on each measure over the three-year period.

Total Shares Awarded and Forfeited 2009-2011

Risk Considerations. Prior to its adoption, the Compensation Committee considered whether the design and structure of the 2009-2011 plan created incentives for senior management to engage in unnecessary or excessive risk taking. The Committee conducts this review annually, prior to making its determination on the year-end compensation for senior management. The executive compensation program is designed to reward the named executive officers and other members of senior management for reaching or exceeding financial and personal goals approved by the Committee. The Committee considered the following factors: the pay mix is weighted toward long-term incentives which align senior management interests with stockholders; total pay is capped—including annual cash incentives and long–term incentives, which are granted at a “high” level of performance; “tally sheets,” prepared by Pay Governance, the independent consulting firm retained by the Committee, are reviewed and consider all elements of compensation for the named executive officers and potential outcomes under a range of scenarios from low to high performance; stock ownership guidelines ensure that senior management will retain an ownership stake; internal policies prohibit use of margin accounts or pledges of stock; performance metrics are tied to key measures of short-term (such as Adjusted FFO and ROIC) and long-term success (such as development of strategic plans, succession planning); personal performance is emphasized, allowing line-of-site with controllable results; financial performance is reviewed with the Audit Committee; and financial measures are tied to the annual budget and business plan which the Board reviews, discusses and approves. The Compensation Committee has full responsibility for approving the goals and the resulting payouts and retains the discretion to reduce awards as appropriate. Based on these factors, the Company believes that the program appropriately focuses on executive performance and does not create an incentive for management to engage in unnecessary and excessive risk taking.

Other Benefits and Policies. While the key elements of the executive compensation program and compensation actions are described above, the named executive officers are also eligible to participate in the Company’s health and welfare programs, our tax-qualified Retirement and Savings Plan (401(k)), and other programs on the same basis as all other employees. There are also additional benefits and policies that apply only to the named executive officers and other senior executives, which are perquisites and other personal benefits, the executive deferred compensation plan, the severance plan, which addresses change in control, the stock ownership and retention policy and compensation recovery policy.

Perquisites and Other Personal Benefits. Perquisites are limited and primarily based on our business. They consist of (1) dining, complimentary rooms and other hotel services when on personal travel at hotels that we own or that are managed by our major operators, (2) financial planning and tax services, and (3) reimbursement for taxes associated with these benefits. We are in the lodging industry and we believe that it is appropriate to encourage our executives to continually enhance their understanding of our properties and the operations of our key managers at our properties and other hotels in the same class as our portfolio. This assists in portfolio development and improvements. In addition, we believe that offering financial planning and tax services represents a minimal cost while ensuring that executives are in compliance with tax requirements. Since we encourage our executives to use these perquisites and the Company gains benefits from their knowledge and feedback on our managers and properties, we feel that it is appropriate to reimburse them for the taxes incurred upon such benefits.

In connection with the restricted stock awards, Messrs. Walter and Risoleo each agreed at the Company’s request to purchase life insurance policies and to accept the proceeds under these policies to offset some or all of the stock compensation that would vest and be payable in the event of the executive’s death. The proceeds from the life insurance policies would mitigate the effect on the

Company’s financial statements of the accelerated vesting of large restricted stock awards, which would occur upon an executive’s death. The Company reimburses each of the executives for the cost of each policy and the taxes payable as a result of the reimbursement.

Stock Ownership and Retention Policy. The Company has an equity ownership and retention policy to ensure that senior executives have a meaningful economic stake in the Company, while allowing for appropriate portfolio diversification. The equity ownership guidelines provide that, within five years of joining the Company or being promoted to a position in senior management, members of senior management should own and retain stock equal to the following respective multiple of their annual salary rate:

CEO—five times annual salary rate;

Executive Chair—five times annual salary rate;

Executive Vice Presidents—three times annual salary rate; and

Senior Vice Presidents—two times annual salary rate.

Only certain types of equity are used in determining whether the guidelines are met, including stock owned directly by an employee or as a result of vesting in restricted stock. Unvested performance shares and options are not counted toward satisfying the equity ownership guidelines.

In addition to the number of shares required to satisfy the equity ownership guideline, each member of senior management is required to retain direct ownership of shares equal in number to, (a) 100% of “Covered Shares” for a period of one full year from the date on which such Covered Shares vest, and (b) 50% of Covered Shares for two full years from the date on which such Covered Shares vest. For the purposes of the policy, “Covered Shares” means shares acquired by a member of senior management pursuant to any award of restricted stock granted after January 1, 2012 under any Company equity compensation plan or other written compensation arrangement, net of shares used to pay tax withholding requirements attributable to such award.

Senior management is prohibited from selling any shares (other than shares to satisfy tax obligations) if they are not in compliance with the policy or if the sale would result in holdings below the guidelines. None of senior management has a plan in place by which they sell Company stock on a periodic basis (referred to as a 10b5-1 plan). The Compensation Committee reviews compliance and, all executives were in compliance with the guidelines at the end of 2011.

Recoupment Policy. The Company has adopted a policy, effective January 1, 2012, that would require the reimbursement of excess incentive compensation payments in the event that the Company is required to make a material restatement of its financial statements. The policy applies to all members of senior management and ensures that any fraud, intentional misconduct or illegal behavior leading to a restatement of the Company’s financial result would be properly addressed. Under the policy, the Board would review all incentive plan compensation that was paid on the basis of having met or exceeded specific performance targets for performance periods in question. If the cash incentive awards or stock compensation received under the program would have been lower had they been calculated based on such restated results, it is the general policy of our Board to seek to recoup, for the benefit of the Company, the portion of the excess compensation that was received by any individual who engaged in fraud, intentional misconduct or illegal behavior in connection with the financial results that were restated. The Board will, in its reasonable business judgment, decide whether to pursue such recoupment from an individual based on those factors that our Board believes to be reasonable. The policy will be revised if required under the Dodd-Frank Act once the regulations implementing the recoupment policy requirements of that law have been issued.

Executive Deferred Compensation Plan. This plan allows participants to save for retirement in excess of the limits applicable under our Retirement and Savings Plan. It is not a tax qualified plan. Eligible employees, including the named executive officers, may defer up to 100% of their cash compensation (that is, salary and bonus) in excess of the amounts first deferred into the Retirement and Savings Plan. We provide a match of $.50 for each $1.00 deferred under the plan, up to a maximum of 6% of the participant’s compensation less the amount credited to the Retirement and Savings Plan. In addition, we may make a discretionary matching contribution of up to $.50 on each $1.00 up to 6% of the participant’s compensation. The Company made a discretionary match of $.25 in 2011. This is the only non-qualified retirement plan offered to senior executives. The Company does not have a pension plan and does not have a supplemental executive retirement program.

Severance Plan. The Company has a severance plan that has been in effect since 2003 and applies to employees at the level of senior vice president and above. The Compensation Committee believes that a severance plan allows the Company to provide properly designed severance benefits on a consistent basis, which promotes stability and continuity of senior management. The provision of severance upon a change in control aligns the Company’s interests with its stockholders by eliminating distractions that arise with the uncertainty of these transactions and avoiding the loss of key members of management during a critical period. The severance plan requires a “double trigger” for payment in the context of a change in control, that is, there must be both a change in control and a termination by the Company without “cause” or by the executive for “good reason” in the one year period following a change in control. Significantly, the severance plan does not provide for tax gross-ups on any payments made in connection with a termination or a change in control. The cost of any excise tax that a member of senior management might incur related to a payment under the plan would be borne by the individual.

Prior to its annual compensation determinations, the Compensation Committee reviews the level of severance pay and benefits that the named executive officers would receive. Under the restricted stock agreements and stock option agreements, a change in control coupled with a triggering event results in the acceleration and vesting of all long-term incentive awards. Because equity awards were made upfront in the three-year program, amounts an executive would receive are highest in the first year and decrease each year as options vest and performance shares vest or are forfeited.

In connection with Mr. Risoleo’s new position, effective January 1, 2012 as Executive Vice President, Managing Director, Europe, the Company entered into a letter agreement with Mr. Risoleo that applies for one year, January 1, 2012 through December 31, 2012. Under the agreement, Mr. Risoleo would not be subject to the severance provisions of the severance plan under limited circumstances in the event of his voluntary departure during the year, or if the Company no longer requested his services during the year. All provisions of the severance plan on change in control or termination for cause still apply. Under the letter agreement, if the Company terminates Mr. Risoleo’s employment during 2012, other than for cause, the Company will continue to pay his base salary through December 31, 2012. In addition, Mr. Risoleo will receive and be eligible for the annual incentive award and equity incentives for 2012. If Mr. Risoleo voluntarily leaves the Company before June 30, 2012, he would receive only his accrued base salary through the date of termination. If Mr. Risoleo voluntarily leaves after June 30, 2012 (but prior to December 31, 2011), he would not receive salary continuation, but would be eligible to receive a pro-rated annual incentive award and a long-term equity incentive award based on the Company’s corporate performance at the end of 2012 and assuming a “target” level of performance on individual performance goals. In addition, a pro-rated number of stock options would vest. The Company believes that the one year arrangement served to enhance a stable and fair transition in roles and responsibilities in the Company. Other than this one

year arrangement with Mr. Risoleo modifying severance, these are no individual employment agreements, change-in-control or severance agreements for any U.S. based employee.

For additional information regarding the severance plan, including an estimate of payments the named executive officers would have been entitled to receive on December 31, 2011 upon various termination events, see “Executive Officer Compensation—Potential Severance, Change in Control Payments.”

2009-2011 Program—Design and Structure

The 2009-2011 program was adopted by the Committee in January 2009 and follows a philosophy that has been in place over the last decade:

There are three key elements to the compensation program: base salary, annual cash incentives and equity awards. Although the Committee did not follow a specific formula in determining the mix of compensation, at the executive level, approximately 60% or more of the total target financialcompensation is generally in the form of equity awards to emphasize performance award. Itand align management and stockholder interests.

Base Salary. Base salary is set at an annual rate, based on the level of the position within the Company, experience, scope of responsibility, and the individual’s performance. This is the only fixed component of the compensation program. The Committee generally reviews salary at the beginning of each year. Adjustments, if any, take into account an individual’s performance, responsibilities, experience, internal equity and external market data. Base salary represents between 16%-23% of the named executive officers’ total targeted compensation under the 2009-2011 program.

Annual Cash Incentives. The annual cash incentives reward the achievement of individual performance and Company goals. Bonuses are calculated as property-level EBITDA divided bya percentage of an individual’s salary and weighted depending on the invested capitallevel of responsibility in the Company. For the named executive officers and all employees at the executive vice president level, 80% of the eligible cash bonus is based on the satisfaction of Company financial goals and 20% on satisfaction of personal performance goals. The weighting reflects the Committee’s continued belief that the incentive emphasis for all comparable consolidated properties. Property-level EBITDAsenior executives should be on Company performance. The annual cash amount that may be earned is defined asfurther refined based on the earnings before interest, taxes, depreciation and amortizationlevel of our comparable, owned hotels after eliminating corporate-level costs and expenses related to our capital structure. Invested capitalperformance on each goal, which is defined as the purchase price of a property plus all capital expenditures, excluding the furniture, fixture and equipment reserve contributions, typically 5% of gross revenues. As with Adjusted FFO, themeasured at “threshold”, “target” and “high” ROIC. As a result, the total amount that any individual may earn annually depends on: (1) salary, because the award is calculated and paid as a percentage of annual salary, (2) the relative weighting between financial and personal goals, (3) the level of performance achieved on each of two Company financial goals, and (4) the level of performance achieved on personal goals. There is no bonus if performance is below threshold, and results are interpolated between the levels of threshold, target and high.

Financial Measures for the Annual Cash Incentive. The two financial measures of performance are Adjusted FFO and ROIC. The “threshold”, “target” and “high” goals are established at the beginning of the year based on, and subject to review and approval of, the Company’s business plan and budget by the Board of Directors. Adjusted FFO represents 70% of the total target financial performance and ROIC represents the remaining 30%.

The chart below shows the performance and payout levels on each of Adjusted FFO and ROIC.

Personal Performance Goals

. Personal performance goals are a small component of the annual cash incentive for executives, representing only 20% of the total target amount. However, the overall compensation program for 2009-2011 puts a greater emphasis on personal performance, and, as discussed below, it

has been added as is also a performance measure for the restricted stock awards. See “Equity- Restricted Stock”.

Performance goals for each executive as well as all employees are established at the beginning of the year as part of the annual business plan and budget. The Chief Executive Officer drafts the performance goals in discussion with, and for, the other executive officers. These performance goals may include a broad spectrum of metrics such as financial and operational results, strategy, and growth and leadership goals for the departments each executive leads. The Chief Executive Officer also drafts his own performance goals in consultation with the Committee. The Committee reviews and approves all goals for the named executive officers and all executive vice presidents. These goals are designed to be attainable at a “target” level. The Committee added a review of performance goals mid-year, and the goals may be revised or adjusted by the Committee to ensure that they still reflect appropriate areas of emphasis for the executive. This is, in part, a response to the volatile economic environment of the last two years which has necessitated ongoing changes in the Company’s business plan and strategy. It also provides the Company with the flexibility it needs to motivate high business performance while adapting and responding to opportunities and challenges.

Determining the Annual Incentive Award

. The target annual cash incentive represents 13%-17% of the named executive officers’ total target compensation under the 2009-2011 program. The table below shows the total annual cash incentive that may be earned by the CEO and executive vice presidents as a percentage of their annual base salaries.

The total amount that may be earned annually by the named executive officers and all employees at the executive vice president level as an annual incentive cash award would be determined as follows:

EquityLong-Term Incentives

. The long-term incentives are equity-based awards under the 2009-2011 program, which have 90% of the target value in the form of restricted stock and the remaining 10% in the form of stock options. This is the largest component of the named executive officers’ total target compensation, representing between 60%-71%. The most significant changes in the overall compensation program for 2009-2011 were made to the equity component. These are summarized in the chart below.

Restricted Stock

As with prior programs, restricted. Restricted stock is an upfront award for the three-year performance period, with one-third eligible to vest in each of the performance year-endyears ended 2009, 2010 and 2011. The upfront grant represents the maximum number of shares that may be earned over the three-year period, that is, performance at the “high” level for each of the three years. The compensation program is based, however, on senior management vesting in shares at the “target” level. The award is entirely performance-based and vesting is subject to the satisfaction of personal performance goals and the

Company’s total stockholder return compared to two indices, weighted equally, the NAREIT Equity Index and an index of lodging REITs and hotel management companies (the “Lodging Index”).the Lodging Index. Personal goals represent 56% of the target stock award each year and the total stockholder return measures represent the remaining 44%. All measures are set at three separate levels—“threshold” “threshold”, “target” and “high”. Dividends accrue on unvested shares, but are paid only when, and if, the restrictions on the awards lapse, that is, the shares vest and are released. The Committee has the discretion to modify awards to reflect additional responsibilities, promotions or superior performance.

Personal Performance Goals

As previously noted, the 2009-2011 program places greater emphasis on an executive’s achievement of annual personal goals, which relate to the business plan and long-term strategy of the Company, in determining compensation that may be received. The Committee noted that it was the emphasis on the business plan and achievement of individual objectives tied to that plan that positioned the Company in 2008 to navigate economic challenges through the development of a more diversified global platform and an emphasis on financial discipline.

. The chart below shows the shares that may vest annually based on the level of achievement on personal performance goals. No shares are earned if performance is below threshold, and results will be interpolated between the levels of threshold, target and high.

Percentage Shares Vesting Based on Satisfaction of Personal Goals

(as a % of the annual Target amount)

Relative Total Stockholder Return Measures

The Committee also added a second measure of total stockholder return (“TSR”) to incorporate lodging sector results. Previously, the Company’s TSR was measured only against the NAREIT Equity Index. Under the new program, at each of year-end 2009, 2010 and 2011, the Company’s total stockholder return will be compared to two indices, weighted equally, the NAREIT Equity Index and the Lodging Index. The companies in the latter index were recommended by the Committee’s independent consultant, Towers Watson, after discussion with management, and were approved by the Committee based on comparability to the Company’s operating model. The companies in the Lodging Index are:

. Total stockholder return is the increase in the year-end price of the Company’s common stock over the prior year’s end price, plus dividends paid on the Company’s common stock during the relevant year. The stock price will be calculated, in each case, as the average of the high and low price of the Company’s common stock on the NYSE on the last 60 calendar days of the relevant year. At each of year-end 2009, 2010 and 2011, the Company’s TSR will be compared to two indices, weighted equally, the NAREIT Equity Index and the Lodging Index. Shares will vest based on the performance of the Company’s total stockholder returnTSR (measured as a percentile) compared to each index. No shares are earned if performance is below threshold, and results are interpolated between the levels of threshold, target and high, as follows:

Relative Measures

To the extent shares do not vest in any one year based on either of the relative measures, there will be an opportunity for the unvested shares to vest at the end of 2011 based on a cumulative relative return over the three-year period for each measure, which will include dividends paid during those three years.measure. The price to measure the cumulative stockholder return against each index for the three year period 2009-2011 is $7.44, the average of the high and low price of the Company’s common stock on the NYSE for the 60 calendar days prior to December 31, 2008. Shares only vest if the cumulative return is in the 75^th75th percentile or higher measured against the respective index at the end of the three year period.

Shares will also vest in the event of an executive’s death or disability or, under certain circumstances, under the severance plan.Severance Plan. Please see the discussion under “Severance“—Other Benefits and Change in Control”.Policies—Severance Plan.” As described under “Perquisites“—Other Benefits and Polices—Perquisites and Other Personal Benefits,” Messrs. Walter and Risoleo agreed to accept proceeds under life insurance policies to offset long-term incentive compensation that would vest in the event of such executive’s death.

Perquisites and Other Personal Benefits. Perquisites are limited and primarily based on our business. They consist of (1) dining, complimentary rooms and other hotel services when on personal travel at hotels that we own or that are managed by our major operators, (2) financial planning and tax services, and (3) reimbursement for taxes associated with these benefits. We are in the lodging industry and we believe that it is appropriate to encourage our executives to continually enhance their understanding of our properties and the operations of our key managers at our properties and other hotels in the same class as our portfolio. This assists in portfolio development and improvements. In addition, we believe that offering financial planning and tax services represents a minimal cost while ensuring that executives are in compliance with tax requirements. Since we encourage our executives to use these perquisites and the Company gains benefits from their knowledge and feedback on our managers and properties, we feel that it is appropriate to reimburse them for the taxes incurred upon such benefits.

In connection with the restricted stock awards, Messrs. Walter and Risoleo each agreed at the Company’s request to purchase life insurance policies and to accept the proceeds under these policies to offset some or all of the stock compensation that would vest and be payable in the event of the executive’s death. The proceeds from the life insurance policies would mitigate the effect on the

Company’s financial statements of the accelerated vesting of large restricted stock awards, which would occur upon an executive’s death. The Company reimburses each of the executives for the cost of each policy and the taxes payable as a result of the reimbursement.

Stock OptionsOwnership and Retention Policy. The Company has an equity ownership and retention policy to ensure that senior executives have a meaningful economic stake in the Company, while allowing for appropriate portfolio diversification. The equity ownership guidelines provide that, within five years of joining the Company or being promoted to a position in senior management, members of senior management should own and retain stock equal to the following respective multiple of their annual salary rate:

StockCEO—five times annual salary rate;

Executive Chair—five times annual salary rate;

Executive Vice Presidents—three times annual salary rate; and

Senior Vice Presidents—two times annual salary rate.

Only certain types of equity are used in determining whether the guidelines are met, including stock owned directly by an employee or as a result of vesting in restricted stock. Unvested performance shares and options represent 10%are not counted toward satisfying the equity ownership guidelines.

In addition to the number of shares required to satisfy the equity ownership guideline, each member of senior management is required to retain direct ownership of shares equal in number to, (a) 100% of “Covered Shares” for a period of one full year from the date on which such Covered Shares vest, and (b) 50% of Covered Shares for two full years from the date on which such Covered Shares vest. For the purposes of the policy, “Covered Shares” means shares acquired by a member of senior management pursuant to any award of restricted stock granted after January 1, 2012 under any Company equity compensation plan or other written compensation arrangement, net of shares used to pay tax withholding requirements attributable to such award.

Senior management is prohibited from selling any shares (other than shares to satisfy tax obligations) if they are not in compliance with the policy or if the sale would result in holdings below the guidelines. None of senior management has a plan in place by which they sell Company stock on a periodic basis (referred to as a 10b5-1 plan). The Compensation Committee reviews compliance and, all executives were in compliance with the guidelines at the end of 2011.

Recoupment Policy. The Company has adopted a policy, effective January 1, 2012, that would require the reimbursement of excess incentive compensation payments in the event that the Company is required to make a material restatement of its financial statements. The policy applies to all members of senior management and ensures that any fraud, intentional misconduct or illegal behavior leading to a restatement of the Company’s financial result would be properly addressed. Under the policy, the Board would review all incentive plan compensation that was paid on the basis of having met or exceeded specific performance targets for performance periods in question. If the cash incentive awards or stock compensation received under the program would have been lower had they been calculated based on such restated results, it is the general policy of our Board to seek to recoup, for the benefit of the Company, the portion of the excess compensation that was received by any individual who engaged in fraud, intentional misconduct or illegal behavior in connection with the financial results that were restated. The Board will, in its reasonable business judgment, decide whether to pursue such recoupment from an individual based on those factors that our Board believes to be reasonable. The policy will be revised if required under the Dodd-Frank Act once the regulations implementing the recoupment policy requirements of that law have been issued.

Executive Deferred Compensation Plan. This plan allows participants to save for retirement in excess of the limits applicable under our Retirement and Savings Plan. It is not a tax qualified plan. Eligible employees, including the named executive officers, may defer up to 100% of their cash compensation (that is, salary and bonus) in excess of the amounts first deferred into the Retirement and Savings Plan. We provide a match of $.50 for each $1.00 deferred under the plan, up to a maximum of 6% of the participant’s compensation less the amount credited to the Retirement and Savings Plan. In addition, we may make a discretionary matching contribution of up to $.50 on each $1.00 up to 6% of the participant’s compensation. The Company made a discretionary match of $.25 in 2011. This is the only non-qualified retirement plan offered to senior executives. The Company does not have a pension plan and does not have a supplemental executive retirement program.

Severance Plan. The Company has a severance plan that has been in effect since 2003 and applies to employees at the level of senior vice president and above. The Compensation Committee believes that a severance plan allows the Company to provide properly designed severance benefits on a consistent basis, which promotes stability and continuity of senior management. The provision of severance upon a change in control aligns the Company’s interests with its stockholders by eliminating distractions that arise with the uncertainty of these transactions and avoiding the loss of key members of management during a critical period. The severance plan requires a “double trigger” for payment in the context of a change in control, that is, there must be both a change in control and a termination by the Company without “cause” or by the executive for “good reason” in the one year period following a change in control. Significantly, the severance plan does not provide for tax gross-ups on any payments made in connection with a termination or a change in control. The cost of any excise tax that a member of senior management might incur related to a payment under the plan would be borne by the individual.

Prior to its annual compensation determinations, the Compensation Committee reviews the level of severance pay and benefits that the named executive officers would receive. Under the restricted stock agreements and stock option agreements, a change in control coupled with a triggering event results in the acceleration and vesting of all long-term incentive awards. Because equity awards were made upfront in the three-year program, amounts an executive would receive are highest in the first year and decrease each year as options vest and performance shares vest or are forfeited.

In connection with Mr. Risoleo’s new position, effective January 1, 2012 as Executive Vice President, Managing Director, Europe, the Company entered into a letter agreement with Mr. Risoleo that applies for one year, January 1, 2012 through December 31, 2012. Under the agreement, Mr. Risoleo would not be subject to the severance provisions of the severance plan under limited circumstances in the event of his voluntary departure during the year, or if the Company no longer requested his services during the year. All provisions of the severance plan on change in control or termination for cause still apply. Under the letter agreement, if the Company terminates Mr. Risoleo’s employment during 2012, other than for cause, the Company will continue to pay his base salary through December 31, 2012. In addition, Mr. Risoleo will receive and be eligible for the annual incentive award and equity incentives for 2012. If Mr. Risoleo voluntarily leaves the Company before June 30, 2012, he would receive only his accrued base salary through the date of termination. If Mr. Risoleo voluntarily leaves after June 30, 2012 (but prior to December 31, 2011), he would not receive salary continuation, but would be eligible to receive a pro-rated annual incentive award and a long-term equity incentive award based on the Company’s corporate performance at the end of 2012 and assuming a “target” level of performance on individual performance goals. In addition, a pro-rated number of stock options would vest. The Company believes that the one year arrangement served to enhance a stable and fair transition in roles and responsibilities in the Company. Other than this one

year arrangement with Mr. Risoleo modifying severance, these are no individual employment agreements, change-in-control or severance agreements for any U.S. based employee.

For additional information regarding the severance plan, including an estimate of payments the named executive officers would have been entitled to receive on December 31, 2011 upon various termination events, see “Executive Officer Compensation—Potential Severance, Change in Control Payments.”

2009-2011 Program—Design and Structure

The 2009-2011 program was adopted by the Committee in January 2009 and follows a philosophy that has been in place over the last decade:

There are three key elements to the compensation program: base salary, annual cash incentives and equity awards. Although the Committee did not follow a specific formula in determining the mix of compensation, at the executive level, approximately 60% or more of the total target compensation is generally in the form of equity value. Grants were made upfront for the three-year period with one third eligibleawards to vestemphasize performance and align management and stockholder interests.

Base Salary. Base salary is set at an annual rate, based on continued service withthe level of the position within the Company, each year end December 31, 2009, 2010, 2011.experience, scope of responsibility, and the individual’s performance. This is the only fixed component of the compensation program. The Committee believes that options aregenerally reviews salary at the beginning of each year. Adjustments, if any, take into account an effective retention toolindividual’s performance, responsibilities, experience, internal equity and provide a further incentive for long-term value because they only have value if the stock price appreciates above the exercise price. Because the Company had insufficient shares remaining in its stock plan for a three-year award, options were awarded on February 4, 2009 for one yearexternal market data. Base salary represents between 16%-23% of the program,named executive officers’ total targeted compensation under the 2009-2011 program.

Annual Cash Incentives. The annual cash incentives reward the achievement of individual performance and on May 14, 2009, when the new stock plan was approved, for the remaining two yearsCompany goals. Bonuses are calculated as a percentage of the program. Stock options are valued using the binomial options pricing model. The exercise price of the options is the fair market value of the Company’s stockan individual’s salary and weighted depending on the datelevel of grant. The Committee has the discretion to grant additional options to reflect new responsibilities, promotions or superior performance. Any additional grants would generally be made at the Committee’s February meeting, the date of which is determined generally a year in advance, or,responsibility in the case of any new hire, on the date of commencement of employment or the date of Committee approval, whichever is later. Options have a 10-year life. No cash dividends accrue or are paid on options.

2009-2011 Plan Risk Considerations

Prior to adoption, the Committee considered whether the design and structure of 2009-2011 plan created incentives for senior management to engage in unnecessary or excessive risk taking. The executive compensation program is designed to rewardCompany. For the named executive officers and other membersall employees at the executive vice president level, 80% of the eligible cash bonus is based on the satisfaction of Company financial goals and 20% on satisfaction of personal performance goals. The weighting reflects the Committee’s continued belief that the incentive emphasis for senior management for reaching or exceedingexecutives should be on Company performance. The annual cash amount that may be earned is further refined based on the level of performance on each goal, which is measured at “threshold”, “target” and “high”. As a result, the total amount that any individual may earn annually depends on: (1) salary, because the award is calculated and paid as a percentage of annual salary, (2) the relative weighting between financial and personal goals, approved by(3) the Committee. The Committee considered the following: the pay mix is weighted toward long-term incentives which aligns senior management interests with stockholders, total pay is capped—including annual cash incentives and long–term incentives, which are granted at a “high” level of performance stock ownership guidelinesachieved on each of two Company financial goals, and (4) the level of performance achieved on personal goals. There is no bonus if performance is below threshold, and results are reasonableinterpolated between the levels of threshold, target and ensure that senior management will retain an ownership stake inhigh.

Financial Measures for the Company and internal policies prohibit use of margin accounts or pledges of stock, performance metrics are tied to keyAnnual Cash Incentive. The two financial measures of short-term (such asperformance are Adjusted FFO and ROIC)ROIC. The “threshold”, “target” and long-term success (such as development“high” goals are established at the beginning of strategic plans, succession planning),the year based on, and subject to review and approval of, the Company’s business plan and budget by the Board of Directors. Adjusted FFO represents 70% of the total target financial performance and ROIC represents the remaining 30%.

The chart below shows the performance and payout levels on each of Adjusted FFO and ROIC.

Personal Performance Goals. Personal performance goals are a small component of the annual cash incentive for executives, representing only 20% of the total target amount. However, the overall compensation program for 2009-2011 puts a greater emphasis on personal performance, and, as discussed below, it is emphasized, allowing line-of-site controllable results, and financialalso a performance is reviewed withmeasure for the Audit Committee and the financial measures are tied to the annual budget and business plan which the Board reviews, discusses and approves. We believe that the program appropriately focuses on executive performance and does not create an incentive for management to engage in unnecessary and excessive risk taking.

Compensation of Named Executive Officers restricted stock awards.

Our “namedDetermining the Annual Incentive Award. The target annual cash incentive represents 13%-17% of the named executive officers” for 2009 were:officers’ total target compensation under the 2009-2011 program. The table below shows the total annual cash incentive that may be earned by the CEO and executive vice presidents as a percentage of their annual base salaries.

Based on the foregoing, the Committee established theofficers’ total target compensation, representing between 60%-71%.

Restricted Stock. Restricted stock is an upfront award for 2009-2011the three-year performance period, with one-third eligible to vest in each of the performance years ended 2009, 2010 and 2011. The upfront grant represents the maximum number of shares that may be earned over the three-year period, that is, performance at the “high” level for each of the named executive officers three years. The compensation program is based, however, on senior management vesting in shares at the “target” level. The award is entirely performance-based and vesting is subject to the satisfaction of personal performance goals and the

Company’s total stockholder return compared to two indices, weighted equally, the NAREIT Equity Index and the Lodging Index. Personal goals represent 56% of the target stock award each year and the total stockholder return measures represent the remaining 44%. All measures are set at three separate levels— “threshold”, “target” and “high”. Dividends accrue on unvested shares, but are paid only when, and if, the restrictions on the awards lapse, that is, the shares vest and are released. The Committee has the discretion to modify awards to reflect additional responsibilities, promotions or superior performance.

Personal Performance Goals. The chart below shows the shares that may vest annually based on the level of achievement on personal performance goals. No shares are earned if performance is below threshold, and results will be interpolated between the levels of threshold, target and high.

Percentage Shares Vesting Based on Satisfaction of Personal Goals

(as showna % of the annual Target amount)

Relative Total Stockholder Return Measures. Total stockholder return is the increase in the chart below.

2009-2011 Total Target Compensation