Richard E. Marriott

Chairman of the Board

		6903 Rockledge Drive, Suite 1500 Sincerely,Bethesda, Maryland 20817-1109
Richard E. Marriott
Chairman of the Board

By Order of REVIEW YOUR PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:
		VIA THE INTERNET Go to the Board of Directorswebsite address shown on your proxy card and vote via the Internet				BY MAIL Mark, sign, date and return the enclosed proxy card in the postage-paid envelope
		ELIZABETH A. ABDOO BY TELEPHONE Use the toll-free number shown on your proxy card (this call is toll-free if made in the United States or Canada)				IN PERSON Attend the Annual Meeting in McLean, Virginia

April 5, 2012

PROXY STATEMENT

Table of ContentsTABLE OF CONTENTS

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Proxy Statement. The Board of Directors of Host Hotels & Resorts, Inc. is soliciting proxies to be voted at our 2014 Annual Meeting of Stockholders on May 14, 2014 and at any adjournment or postponement of the meeting. We expect that this Proxy Statement will be mailed and made available to stockholders beginning on or about April 4, 2014.

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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 StockholdersANNUAL MEETING OF STOCKHOLDERS

Voting MattersVOTING MATTERS

Board NomineesBOARD NOMINEES

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

Name, Age

Director Since

Principal Occupation

Committee Memberships*

Other Public Company Boards

A

C

NCG

Name, AgeMary L. Baglivo, 56

Director Since

2013

OccupationChief Marketing Officer Northwestern University

PVH Corp.

Committee Memberships*Sheila C. Bair, 60

Other Public Company Boards

Robert M. Baylis, 732012

1996

Advisor to Pew Charitable Trusts, Former chair of the FDIC

Retired Vice Chair of CS First Boston  (F)

NCG (C), C, LD

Gildan Activewear

Banco Santander

Terence C. Golden, 6769

1995

Chairman of Bailey Capital Corporation

None

Pepco Holdings, Inc. Washington Real Estate Investment Trust

Ann McLaughlin Korologos, 7072

1993

Former Chair of RAND Corporation Board of Trustees

C (C), NCG

Kellogg Company AMR CorporationMichael Kors Harman International Industries Vulcan Materials Company

Richard E. Marriott, 7375

1979

Chairman of the Board

None

First Media Corporation

John B. Morse, Jr., 6567

2003

Retired Vice President and CFO of The Washington Post Company

A (C) (F), NCG

AES Corporation HSN, Inc.

Walter C. Rakowich, 5456

2012

Co-Chief

Retired Chief Executive Officer of Prologis

A (F)

Prologis

Iron Mountain Incorporated

Gordon H. Smith, 5961

2009

President & CEO of the National Association of Broadcasters

A, NCG

W. Edward Walter, 5658

2007

President and Chief Executive Officer

None

AvalonBay Communities

*		A		Audit Committee		C		Compensation Policy Committee
		(C)		Chair of the Committee		NCG		Nominating and Corporate Governance Committee
		(F)		Financial Expert		LD		Lead Director

PROXY SUMMARY

CORPORATE GOVERNANCE HIGHLIGHTS

As part of our commitment to high ethical standards, our Board follows sound governance practices. These practices are described in more detail in our Corporate Governance Guidelines and codes of conduct, which can be found in the governance section of our web site.

Recent Governance Changes:Effective March 27, 2014, the Board of Directors elected to opt out of the provisions of the Maryland Unsolicited Takeover Act which would have permitted the Board to classify itself without a stockholder vote. See “Corporate Governance and Code of Business Conduct and Ethics” on page 7 for more information.

2013 PERFORMANCE HIGHLIGHTS

2013 was a year of strong growth for the Company. We delivered excellent results for our stockholders and took strategic steps to position the Company for long-term, sustainable growth.

ATTENDANCE AND VOTING MATTERS

What is a proxy?

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. HarveyGregory J. Larson 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.

What is a proxy statement?

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.

What does it mean if I get more than one proxy card?

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.

What is the difference between a stockholder of record and a beneficial owner of shares held in street name?

Stockholder 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 those shares, and the Notice of Annual Meeting, Proxy Statement and our 20112013 Annual Report waswere sent directly to you by the Company.

Beneficial Owner of Shares Held in Street Name. If your shares are held in an account at a brokerage firm, bank, broker-dealer, or other similar organization, then you are the beneficial owner of shares held in “street name,” and the Notice of Annual Meeting, Proxy Statement and our 20112013 Annual Report waswere forwarded to you by that organization. The organization holding your shares is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account.

Who is entitled to vote?

Anyone who owned common stock of the Company at the close of business on March 15, 2012,17, 2014, the record date, can vote at the annual meeting. We are first sending

How can I manage the Noticenumber of Annual Meeting, Proxy Statement and our 2011 Annual Report on April 5, 2012 to all stockholders entitled to vote at the meeting.Reports I receive?

The included glossy 2013 Annual Report and our Annual Report on Form 10-K for the year ended December 31, 20112013 filed with the SEC (which together comprise the 2013 Annual Report of the Company), is being mailed to stockholders with this 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 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 02940.30170, College Station, TX 77842-3170.

ATTENDANCE AND VOTING MATTERS

How do I vote?

Voting in Person at the Meeting. If you are a stockholder of record as of the close of business on March 15, 201217, 2014 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.

Who is acting as my proxy and how will they vote my shares?

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:voted as recommended by the Board of Directors.

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 past, if you held your shares in street name and you did not indicate how you wanted to vote those shares, 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 is no longer is able to vote your shares on a discretionary basis in most matters. If you hold your shares in street name and do not instruct your bank or broker how to vote, then no votes will be cast on your behalf for all matters other than the ratification of the appointment of KPMG LLP as the Company’s independent registered public accountants for 20122014 (proposal 2).

May I revoke my proxy?

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 02940.30170, College Station, TX 77842-3170. The overnight delivery address for Computershare is: 250 Royall Street, Canton, Massachusetts 02021.211 Quality Circle, Suite 210 College Station, TX 77845.

What vote is required to approve each proposal?

In the election of directors, each nominee must receive more “For” votes than “Against” votes in order to be elected as a director. The affirmative 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 20122014 and to approve the advisory resolution on executive compensation.

What constitutes a “quorum”?

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.

How are abstentions and broker non-votes treated?

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 proposals 2 and 3.

How can I obtain copies of documents referenced in this proxy statement?

Q.	How can I obtain copies of documents referenced in this proxy statement?

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

How will voting on any other business be conducted?

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. HarveyGregory J. Larson 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.

Who will count the votes?

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

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 $8,500,$10,000, plus expenses. We will reimburse brokers, fiduciaries and custodians for their reasonable expenses related to forwarding our proxy materials to those beneficial owners.

Is this proxy statement the only way that proxies are being solicited?

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.

How can I find out the results of the voting at the annual meeting?

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 and Code of Business Conduct and Ethics

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 which are reviewed annually and periodically amended as the Board enhances the Company’s corporate governance practices. 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. 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. 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.

Governance is a continuing focus of the Company. In past years the Board has implemented numerous corporate governance enhancements to serve the long-term interests of all stockholders. These have included adopting a majority vote standard for uncontested director elections, declassifying the Board and allowing the Company’s rights plan to expire. Most recently, effective March 27, 2014, the Board filed Articles Supplementary with the State Department of Assessments and Taxation of Maryland electing to opt out of the provisions of the Maryland Unsolicited Takeover Act (the “Act”) that permit the Board to classify itself without a stockholder vote. Based on its actions, the Company must now receive stockholder approval by a majority of the votes cast repealing the opt out election prior to having the ability to enact this provision of the Act. For more information on the Company’s corporate governance practices, see the Corporate Governance Guidelines posted on its website.

Communications With Directors

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 directorLead 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. to:

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 ConductStockholder Outreach and EthicsEngagement

The Board has also adopted a codeCompany’s relationship with its stockholders is an important part of business conductour corporate governance program. Engaging with our stockholders helps us to understand how they view us, to set goals 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. 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;expectations for our performance, and to promote complianceidentify emerging issues that may affect our strategies, corporate governance, compensation practices or other aspects of our operations. Our stockholder and investor outreach includes investor road shows, analyst meetings, and investor conferences and meetings. We also communicate with all applicable rulesstockholders and regulations that applyother stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases,

CORPORATE GOVERNANCE AND BOARD MATTERS

and our website. Our conference calls for quarterly earnings releases are open to all. These calls are available in real time and as archived webcasts on our website for a period of time. We also seek stockholder views on governance and other matters throughout the Companyyear, concentrating our efforts on our largest stockholders. In addition, as previously announced on our website, on April 10, 2014 we will be hosting an investor day at the Ritz Carlton Hotel, Tysons Corner, Virginia. Stockholders are welcome to listen in via our website and its officers, employees and directors.an archived webcast will also be available.

Board Leadership Structure

Our governance framework 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 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 Lead 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. This structure reflects the continued strong leadership, industry experience and energy brought to the Board by Richard E. Marriott, who has led the Company as Chair since its split with Marriott International in 1993. His over 4648 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. SixEight of eightten of our current directors and seven of nine of our director 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.

The Chair of our Nominating and Corporate Governance Committee, Robert M. Baylis, servesserved as our Lead Director.Director in 2013. As such, he presides atconvened and chaired all meetings of non-management directors in executive sessions of non-management directors. Mr. Baylis also serveson a quarterly basis and more, if needed, served as the principal liaison between the non-employee directors and the CEO and Chairman, and served 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.“Communications with Directors.” 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 also considers the following factors, among others, in making its independence determinations:

made to non-profit organizations with which director nominees are associated. 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 director nominees other than Mr. Marriott and Mr. Walter are independent and recommended to the Board that Messrs. Baylis, Golden, Morse, Smith and Rakowich and Ms.Mmes. Korologos, Bair and Baglivo have been determined to be independent. The Board approved the determination that sixseven of the Company’s eightnine director nominees are independent. Messrs. Marriott and Walter are not independent because they are Company employees.

The Board’s Role in Risk Oversight

Our Board of Directors has overall responsibility for risk oversight with a focus on the most significant risks facing the Company, with reviewsCompany. Reviews of certain areas beingare conducted by the relevant Committees that report on their deliberations to the Board. 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.committees.

The Board and its Committeescommittees 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.

CORPORATE GOVERNANCE AND BOARD MATTERS

Political Contributions

The Company does not have a political action committee, nor does it make contributions to political parties or individual candidates. The Company contributes to trade associations and organizations, such as the National Association of Real Estate Investment Trusts (NAREIT), the American Hotel & Lodging Association, U.S. Travel Association, the Real Estate Round Table and the Coalition to Insure Against Terrorism, which is focused on the renewal of federal insurance to cover damages caused by acts of terrorism. The Company also has memberships with the Maryland Chamber of Commerce and DC Chamber of Commerce. The Company’s participation as a member of these various industry and trade groups comes with the understanding that we may not always agree with the positions of the larger organization and/or other members, and that we are committed to voicing our concerns as appropriate through our employees who may serve on the board and committees of these groups.

Meetings and Committees of the Board

The Board met five times in 2011.2013. Each director attended at least 80% of the meetings of the Board and of the committees on which the director served. Under the Corporate Governance Guidelines, directors are expected to attend the annual meeting of stockholders, and all directors attended the annual meeting in 2011.2013. Under our Corporate Governance Guidelines, non-management directors meet in executive session without management and did so after each regularly scheduled Board meeting in 2011.2013. 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.

Each member of the Audit Committee, in the business judgment of the Board, meets the qualifications (including independence) and expertise requirements of the New York Stock Exchange and is an “audit committee financial expert” within the meaning of SEC rules. Our independent and internal auditors have unrestricted access to the Audit Committee. The Report of the Audit Committee appears later in this proxy statement.

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.

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 assisted the CommitteeStarting in the design, structure and implementation of the executive compensation programs for 2006-2008 and 2009-2011. In 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. They doPay Governance assisted the Committee in the design, structure and implementation of the new, annual executive compensation program that was introduced in 2012. The design and structure of that program continued in 2013. However, they did not determine or recommend the exact amount or form of executive compensation for any executive officers. See “Compensation Discussion and Analysis - Our Compensation Program.” Pay Governance reports directly to the Committee, and a representative of 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. Pay Governance does no other work for the Company.

In compliance with the disclosure requirements of the SEC regarding the independence of compensation consultants, Pay Governance addressed each of the six independence factors established by the SEC with the Compensation Policy Committee. Its responses affirmed the independence of Pay Governance on executive compensation matters. Based on this assessment, the Committee determined that the engagement of Pay Governance does not raise any conflicts of interest or similar concerns. The Committee also evaluated the independence of other outside advisors to the Committee, including outside legal counsel, considering the same independence factors and concluded their work for the Committee does not raise any conflicts of interest.

The Compensation Policy Committee may delegate any or all of its responsibilities to a subcommittee, but did not do so in 2011.2013. 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 were 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 annual cash incentive awards are (i) Company financial metrics that are based on an annual business plan and budget reviewed and approved by the Board 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 sowith the intent that there is a common purpose and accountability throughout the Company. Performance measures for long-term incentives are personal goals, corporate goals, which are tied to the business plan and budget, and total stockholder return measures. 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 $500,000 in 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. The Committee considers director candidates suggested by members of the Committee, other directors and management. InStarting 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. 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,integrity and 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. 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, 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, one new director who has not previously stood for election to the Board by the stockholders, Mr. Walter C. Rakowich,Ms. Mary L. Baglivo, is nominated for election to the Board of Directors. Mr. RakowichMs. Baglivo was introduced to existing Board membersidentified as a candidate by Ferguson Partners Ltd, a professional search firm,Heidrick & Struggles and elected to the Board effective MarchJuly 1, 20122013 on the recommendation of the Nominating and Corporate Governance Committee. Mr. RakowichMs. Baglivo qualifies as an independent director under New York Stock Exchange rules.

DIRECTOR COMPENSATION

2011 Director Fees

Directors who are employees receive no additional compensation for serving on the Board or its committees. In 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 were none in 2011.

Stock Compensation—Annual Stock Award

Non-employee directors receive an annual director stock award under the Non-Employee Directors’ Deferred Stock Compensation Plan effective after election at the annual meeting. In 2011, the award equaled $75,000, with the number of shares to be determined based on the fair market value of the Company’s common stock on that date.

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 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. All directors elected to defer the 2011 award into stock units. 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 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 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

In 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.

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 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 ONEPROPOSALS REQUIRING YOUR VOTE

ELECTION OF DIRECTORSProposal One—Election of Directors

Our Board of Directors currently consists of nineten members, although there are only eightnine director nominees standing for election. In February 2012,2014, Mr. Willard W. BrittainRobert Baylis expressed his intention to retire from the Board and accordingly his term will end at the conclusion of the 20122014 annual meeting. The Board determined that, effective at the conclusion of the 20122014 annual meeting, the size of the Board will be decreased from nineten to eightnine 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. 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, 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 Charter 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 the 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 Board 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 election as directors.

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

NOMINEES FOR DIRECTOR

PROPOSALS REQUIRING YOUR VOTE

Age:69

Director since:1995

Chairman of the Board

Age:75 Director since:1979

Age:56

Director since:2012

Committees: Audit Nominating and Corporate Governance

RETIRING DIRECTOR

PROPOSALS REQUIRING YOUR VOTE

PROPOSAL TWO

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTSProposal 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 2012.2014. 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.

KPMG LLP has been the Company’s independent registered public accountant since 2002. A new Lead Audit Partner is designated at least every five years to ensure independence and to provide a fresh perspective. In determining whether to reappoint the independent accountant, the Audit Committee considers the length of time the firm has been engaged, in addition to considering the quality of the discussions with the independent accountant and an assessment of the past performance of both the Lead Audit Partner and KPMG LLP.

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.

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 2012.

REPORT OF THE AUDIT COMMITTEE2014.

To Our Stockholders:

Proposal Three—Advisory Resolution to Approve Executive Compensation

The Audit Committee servesDodd-Frank Wall Street Reform and Consumer Protection Act requires that the Company seek a non-binding advisory vote from its stockholders to approve executive compensation. Since the required vote is advisory, the result of the vote is not binding upon the Company or the Board. In 2011, the Board recommended that this advisory resolution to approve named executive officer compensation be conducted annually and stockholders voted in favor of this recommendation by a substantial majority. Accordingly, the Board has determined that it will hold an advisory resolution to approve named executive officer compensation annually until the next vote to determine the frequency of such an advisory vote.

We urge stockholders to read the “Compensation Discussion and Analysis”, which describes how our executive compensation policies operate and how they are designed to achieve our compensation objectives, as well as the representativeSummary Compensation Table and related compensation tables and narrative which provide detailed information on the compensation of our named executive officers. Our executive compensation program is designed to provide a competitive level of compensation necessary to attract, motivate and retain talented and experienced executives and to motivate them to achieve short-term and long-term corporate goals that enhance stockholder value. Highlights of the Company’s compensation programs include the following:

The Compensation Policy Committee and the Board believe that these policies are effective in implementing our compensation philosophy, in achieving its goals, and have been effective at incenting the achievement of the Company’s strong financial performance.

For the reasons stated above, the Board of Directors unanimously recommends a vote FOR approval of the following resolution:

“RESOLVED, that the stockholders of the Company for general oversightapprove, on an advisory basis, the compensation 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,named executive officers, 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 discussionsapprove named executive officer compensation, commonly referred to above, the Audit Committee recommended toas a “say-on-pay” resolution, is non-binding on the Board of Directors,Directors. The approval or disapproval of this proposal by stockholders will not require the Board, the Compensation Policy Committee or the Company to take any action regarding the Company’s executive compensation practices. Although non-binding, the Board and the Board of Directors has approved, thatCompensation Policy Committee will carefully review and consider the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. The Annual Report on Form 10-K was filed with the Securities and Exchange Commission on February 22, 2012.voting results when evaluating our future executive compensation program.

The Audit Committee

COMPENSATION DISCUSSION AND ANALYSIS

JOHN B. MORSE, JR., CHAIR

WILLARD W. BRITTAIN

GORDON H. SMITH

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 2011 and 2010:

At the 2011our 2013 annual meeting of stockholders, we held our first advisory resolution to approve executive compensation. Over 99.6%over93% of the votes cast were in favorsupport of this advisory resolution.our executive compensation program. The Compensation Committee considered this favorable outcome along with the outcomes in previous years in which the programs received in excess of 90% support, and believed it conveyed our stockholders’ support of the Compensation Committee’sits decisions and the current executive compensation program. Atdesign and structure of 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.programs. 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:

Stock ownership guidelines, in effect since 2003, for named executive officers, all employees at the level of senior vice president, and directors.

Our Compensation Program

An independentWe historically had a three-year executive compensation consultant retained by, and which reports to,program, but, beginning in 2012, the Compensation Policy Committee approved the design and has no other business withstructure of annual compensation programs, which allow for more flexibility in light of changing times and stockholder involvement. However, the Company.

Regular reviewsphilosophy of our compensation programs has remained the same for over a decade:

To foster a strong relationship between stockholder interests and relative peer groups and indices.

executive compensation;

 

Regular briefings from the consultant regarding key trends.

To provide annual and long-term incentives that emphasize performance-based compensation; and

 

A severance plan, adopted in 2003, that provides benefits on a consistent basis with a “double trigger” for any payment in the contextTo provide overall levels of a change in control and no provision for “gross-ups” or the payment of any excise tax on behalf of an executive.

No dividends paid on unvested restricted stock awards until the awards actually vest and are released.

No counting of performance vesting restricted stock toward our stock ownership guidelines.

Beginning in 2012, sale restrictions on vested awards under our long-term incentive plan.

No pension plans and no supplemental retirement plans.

A policy, in effect since 2002, prohibiting hedging of Company securities by executives, directors and all employees.

A policy that authorizes the Board to recoup compensation that resulted from a material misstatement of financial results.

attract and retain talented executives.

Elements

An annual reviewThe design and assessmentstructure of the potential risks arising from the Company’s compensation programs (including the executive compensation program) and policies.

Modest perquisites, limited to items that serve a business purpose.

Current Program. The structure and design of the current executiveannual compensation program for 2013 was adoptedthe same as in 2009, effective for the three years 2009 through 2011. There are2012. It has three key elements:elements, base salary, annual cash incentivesincentive, and long-term incentive awards. The Compensation Committee determined the total target level of compensation for the named executive officers in 2009 and awarded the 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 required level of performance is achieved. See “2009-2011 Program—Design and Structure”. There have been no changes in any elements of the program since 2009.

incentives. Importantly, it also:

•      Recognizes the need for flexibility to modify our compensation levels and program design as appropriate on an annual basis in response to annual feedback from our stockholders. •      Seeks to enhance the alignment between stockholder results and our executive incentives. •      Emphasizes variable pay tied to performance, with the majority of the opportunity based on long-term incentive compensation, and includes: •      An annual cash incentive award that is based on the achievement of financial measures and objective individual performance goals; and •      A long-term incentive program delivered through a mix of restricted stock and stock options where the restricted stock comprises 90% of the target opportunity and is 100% performance-based, and stock options deliver 10% of the target opportunity. Multiple measures of corporate performance are incorporated in the long-term incentive program, including: •      Corporate financial, operating and strategic objectives that are expected to drive future value creation opportunities; •      Individual performance objectives approved by the Compensation Committee that are aligned with our operating and strategic objectives; and •      Relative total stockholder return measures (“TSR”) that compare the Company to multiple indices reflecting the Company’s competitors for investment capital.

COMPENSATION DISCUSSION AND ANALYSIS

Best Practices

The chart below summarizes the 2009-2011compensation program and provides a framework for the discussion of compensation actions in 2011 that follows.incorporates our best practices:

 

Element		Current		Rationale
Target Pay Mix		No specific formula in determining the mix of compensation. For the named executive officers, at least 60% of the total target compensation is in the form of equity awards		Emphasize consistent performance and align management and stockholder interest
Base Salary		Set at an annual rate, based on the level of the position within the Company, experience, scope of responsibility, and the individual’s performance		The only fixed component to the program. Ensures a minimum level of compensation for executives
Annual Cash Incentive		Available to all employees. Two corporate performance goals used, which represent 80% of the target award opportunity for the named executive officers
				What We Do •    Adjusted FFO =70%Compensation Committee comprised solely of independent directors; •    An independent compensation consultant retained exclusively by the Committee and which has no ties to the Company; •    Annual advisory vote on executive compensation; •    Stock ownership guidelines and stock retention policy for all senior management; •    Stock ownership guidelines for directors; •    Regular reviews of our compensation and relative TSR peer groups and indices; •    Regular briefings from the independent consultant regarding key trends; •    An annual review of the corporate measurementperformance of the chief executive officer; •    Double-trigger for any change in control payments under the severance plan; •    Sale restrictions on vested awards under our long-term incentive plan; •    A policy authorizing recoupment of compensation that results from a misstatement of financial results; and •    Modest perquisites.		Funds from operations (FFO) per diluted share is		What We Don’t Do •    No employment contracts with executive officers; •    No individual change in control agreements; •    No tax gross up on change in control payments or severance payments; •    No pension plans or SERPs; •    No dividends paid on unvested restricted stock awards unless the predominant measureawards actually vest; •    No counting of operating performance used by REITs. Thevesting restricted stock toward our stock ownership guidelines; and •    Prohibitions on pledging, hedging and short sales of Company uses funds from operations per diluted share in accordance with National Association of Real Estate Investment Trusts (“NAREIT”) guidelines as adjustedsecurities for items that are not reflective of ongoing performance, such as litigation gainsall employees and losses outside of the ordinary course of business and gains and losses from debt repayments and acquisition costs (“Adjusted FFO”). This is the same measure the Company reports as a supplemental measure of operating performance in its earnings releases, financial presentations and the Company’s Annual Report on Form 10-K.directors.

Target Compensation

In 2012 when the annual program was introduced, the Compensation Committee established total direct target compensation for executives, as described below. Total target direct compensation consists of salary, annual cash incentives and restricted stock and option awards. It does not encompass other benefits.

The Compensation Committee does not generally conduct a comprehensive review of senior management’s total direct target compensation each year, and instead intends to do so every two years. Total target direct compensation increased by 3% in January 2013 for Mr. Walter, Mr. Abji, Ms. Abdoo and Mr. Harvey, which was the budgeted increase for all employees. Mr. Larson also received a 3% increase in January but his total target direct compensation was adjusted effective May 20, 2013 when he became Chief Financial Officer. Mr. Robertson joined the Company on January 18, 2013.

		•     Return on Invested Capital (ROIC) =30%						COMPENSATION DISCUSSION AND ANALYSIS

2013 Target Direct Compensation

		Salary				Annual Cash Incentive				Long-Term Incentives (1)				Total Target Compensation
Mr. Walter		$	849,750			$	1,274,625			$	3,237,500			$	5,361,875
Mr. Larson			450,000				450,000				1,050,000				1,950,000
Mr. Abji			489,250				489,250				1,300,000				2,278,500
Mr. Robertson			450,000				450,000				1,300,000				2,200,000
Ms. Abdoo			437,750				437,750				850,000				1,725,500
Mr. Harvey(2)			412,000				412,000				1,075,000				1,899,000

(1)

This reflects the “target” level value of long-term incentives. These are equity-based awards, and 90% of the corporate measurementtarget value shown is in the form of performance vesting restricted stock and the remaining 10% is in the form of stock options. The Compensation Committee determines the value. The number of shares of restricted stock is determined by dividing the value by the average of the high and low price of the Company’s common stock on the New York Stock Exchange for the 60 calendar days preceding December 31, 2012, which was $14.76. The Compensation Committee believes that an average price over a period of time is a better gauge of value as it mitigates volatility. Stock options are valued using the binomial method.

(2)	Mr. Harvey’s employment with the Company ended July 31, 2013.

The Compensation Committee’s decisions on total direct target compensation were informed with the assistance of its independent consultant, Pay Governance. In 2011 the Committee requested Pay Governance to review compensation and assist the Committee in the design of an annual program, which was first instituted in 2012. For the compensation review, Pay Governance utilized data from three sources. These were (1) proxy pay data reported in the most recent proxy filings for 21 companies, (2) general industry data of companies for non-real estate specific functions, size adjusted based on revenue size, and (3) NAREIT survey data. The proxy group was chosen because it reflected current proxy data from the real estate or hospitality industry or companies of comparable size and, in many instances, with a global portfolio. The NAREIT survey data provided industry specific references for a broad range of companies. Each also reflected companies against which the Company competes directly for talent and investment capital. The general industry database was chosen because it presented information from a broader market than the real estate industry and is consistent with the Company’s inclusion in the S&P 500 index. While the Committee reviewed compensation information derived from the general industry group, the Committee did not see the identity of any of the surveyed companies. The proxy group from which the data were aggregated consisted of:

COMPENSATION PEER GROUP
Apartment Investment & Management Company AvalonBay Communities, Inc. Boston Properties, Inc. Brookfield Office Properties Inc. DDR Corp. Duke Realty Corporation Equity Residential General Growth Properties, Inc. HCP, Inc. Health Care REIT, Inc. Hyatt Hotels Corporation		ROIC provides an emphasis on investing capital effectively. In the cyclical real estate/hospitality market, this focus on using capital effectively enhances the opportunity for longer term stability and growth. ROIC is calculated as property-level EBITDA divided by the invested capital for all comparable consolidated properties. Property-level EBITDA is defined as the earnings before interest, taxes, depreciation and amortization of our comparable, owned hotels after eliminating corporate-level costs and expenses related to our capital structure. Invested capital is defined as the purchase price of a property plus all capital expenditures, excluding the furniture, fixture and equipment reserve contributions, which are typically 5% of gross revenues.Kimco Realty Corporation The Macerich Company Marriott International, Inc. Prologis, Inc. Public Storage Simon Property Group, Inc. SL Green Realty Corp. Starwood Hotels & Resorts Worldwide, Inc. Ventas, Inc. Vornado Realty Trust

The Compensation Committee reviewed aggregated compensation data in the 25th, 50th, and 75th percentiles for the total data. The Compensation Committee did not adhere to targeting overall compensation to a certain percentile, or a range of percentiles, in a peer group. This was because each peer group has limitations, including not reflecting the experience of a person in a particular position, past performance, and elements of responsibility. The Committee, instead, used the collective data, in consultation with Pay Governance, to inform itself of the current levels of compensation in the market, and considered other factors, such as the credentials, length of service, experience, scope of responsibility, and prior performance of each individual as well as internal equity considerations among the senior management team. For example, in considering salary increases, the Committee reviewed the individual executive’s role, contribution to the management team, performance, and progression in

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  COMPENSATION DISCUSSION AND ANALYSIS		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

each role as well as comparisons of compensation to the external market. The Compensation DeterminationsCommittee also consulted Mr. Walter and discussed its recommendations for senior management with him. Mr. Walter was not involved in 2011.any discussions or determinations of his compensation. The Committee reviewed its determinations for all executives and Mr. Walter with the independent directors of the Board in executive session. The Compensation Committee did not adopt a specific formula in determining the mix of compensation but emphasized a program with a majority of the total opportunity based on variable long-term incentives.

2013 Compensation Results

Realized Pay

The table below, which supplements the Summary Compensation Table that appears on page 46,40, shows the compensation realized for 20112013 by each named executive officer other than Mr. Harvey. Our compensation program allows the named executive officers to earn compensation (except salary) at “threshold”, “target” and “high” levels based on performance. In 2013 the overall compensation results were generally at “target” because overall we generally achieved a “target” level of performance. As such, the Compensation Committee believes that the program functioned as designed with pay tied to performance. As we describe later in this CD&A, key performance results were:

We exceeded “target” performance under our annual cash incentive plan because we outperformed on our annual financial metrics with results between “target” and “high”. This is usefulreflected in understanding the table under “Non- Equity Incentive Plan Compensation”.

The Company’s performance on TSR, which has the greatest impact on executives’ compensation, discussionvaried depending on the index. We achieved above “target” compared to the NAREIT Index, below “threshold” (at which no shares vest) compared to the Lodging Index and between “threshold” and “target” compared to the S&P 500 Index.

The appreciation in the stock price in 2013 increased the value of the restricted stock and options that follows.

vested for performance year 2013.

20112013 Realized Pay Table

 

Name		Salary (1)				Stock Awards (2)				Non-Equity Incentive Plan Compensation (1)				All Other Compensation (1)				Total Compensation Realized				Salary (1)				Stock Awards (2)				Option Awards (3)				Non-Equity Incentive Plan Compensation (1)				All Other Compensation (1)				Total Compensation Realized
W. Edward Walter		$	772,500			$	5,556,348			$	823,300			$	125,132			$	7,277,280			$	849,750			$	3,263,217			$	248,179			$	1,711,400			$	175,972			$	6,248,517
James F. Risoleo			515,000				3,787,314				402,000				83,275				4,787,588
Gregory J. Larson																							435,529				1,046,368				78,715				587,400				73,267				2,221,279
Minaz B. Abji			442,900				2,025,134				343,700				82,673				2,894,407				489,250				1,308,304				99,656				656,100				94,102				2,647,322
Larry K. Harvey			360,500				1,842,766				289,500				64,890				2,557,656
Gregory J. Larson			360,500				1,643,759				288,200				71,238				2,363,697
Struan B. Robertson																							429,041				1,367,708				99,656				571,100				144,414				2,611,919
Elizabeth A. Abdoo																							437,750				855,424				65,158				587,100				63,626				2,009,058

 

(1)

Amounts shown equal the amounts reported in the “Salary,” “Non-Equity Incentive Plan Compensation,”Compensation” and “All Other Compensation” columns of the Summary Compensation Table. The salary amount shown for Mr. Larson reflect his prorated salary increase to $450,000 effective May 20, 2013 when he became Chief Financial Officer. The salary amount shown for Mr. Robertson reflects his prorated salary of $450,000 from his date of hire, January 18, 2013.

 

(2)

Amounts shown represent the aggregate value of the annual restricted stock awards that vested in 2012 for performance year 2011.2013. It excludes shares that were forfeited. The value of vested stock awards is calculated by multiplying the number of shares vested by the closing price of the Company’s common stock on the vesting date of February 2, 2012,6, 2014, which was $16.28.$18.33. In addition, for Mr. Robertson the amount shown include the vesting of one year of a three-year time based award that was granted as a sign-on bonus.

(3)

The value attributable to stock option awards is the difference between the exercise price of the options on the date of grant, February 5, 2013, which was $16.55 per share and the closing stock price as of the vesting date of the options, December 31, 2013, which was $19.44 per share. Mr. Larson received an additional grant of options in connection with his new position as Chief Financial Officer, which were granted on June 14, 2013 at an exercise price of $17.22 per share.

								COMPENSATION DISCUSSION AND ANALYSIS

The difference between this supplemental table and the Summary Compensation Table for 2011 presented on page 4640 is the method used to value stock awards. Amounts shown in the Summary Compensation Table for 2011as follows:

•

Stock Awards: First, the Summary Compensation Table values the entire stock award made to the named executive officers in 2013. In contrast, the Realized Pay Table shows amounts based on the value of the actual number of shares that vested and excludes forfeited shares. In addition, for Mr. Robertson the Realized Pay Table includes the value of only one year of a three-year time based award that was granted as a sign-on bonus. Second, the amounts shown in the Summary Compensation Table for stock awards reflect the grant date fair value of stock awards at the time the stock awards were deemed to be granted for accounting purposes, which is the date on which the performance criteria was established (February 5, 2013). The Realized Pay Table values the actual shares received based on fair market value of the Company’s common stock on the date of vesting, February 6, 2014, which was $18.33 multiplied by the actual shares earned.

•

Stock Options: The amounts shown in the Summary Compensation Table reflect the value of the options on the dates of grant. In contrast, the Realized Pay Table shows the amounts realized under stock options based on the difference between the market price of the Company’s common stock on the date the options vested, December 31, 2013, and the exercise price of the options, which was the fair market value on the dates of the grant.

For a detailed description of the grant date fair value of stock awards at the time the stock awards are deemedand option awards, please see footnotes 2 and 3 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

2013 starting on page 40.

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 20112013 realized compensation amounts to executive officers.

Mr. Harvey’s Severance

On May 20, 2013 the Company announced a broad leadership restructuring pursuant to which Mr. Larson became Executive Vice President and Chief Financial Officer succeeding Mr. Harvey. Mr. Harvey left the service of the Company on July 31, 2013. Mr. Harvey was entitled to, and received, payments and benefits under the Company’s Severance Plan upon execution of a release and non-compete and non-solicitation agreement. These were (1) a one time payment equal to his annual base salary of $412,000 (2) a one time payment equal to the average of his annual incentive bonus award for the last three years, which was $451,798 and (3) continuation of his medical and dental benefits for 18 months, which was $31,100. In addition, under the terms of the agreements for restricted stock and stock options, Mr. Harvey was entitled to receive his 2013 stock award at the “target” level of performance and all his 2013 options vested.

Salary

Base Salary. At its meeting in February 2011, the Compensation Committee reviewed the base salariessalary is set at an annual rate, and represents between 16% and 25% of executives. The Compensation Committee provided a salary increase of 3% to the named executive officers,officers’ total target compensation. The increase for 2013 was 3%, which was the firstbudgeted increase since salaries were set in 2008for all employees:

Name		Salary 2013				Salary 2012				Increase %
Mr. Walter		$	849,750			$	825,000				3	%
Mr. Larson			450,000				400,000				12.5
Mr. Abji			489,250				475,000				3
Mr. Robertson			450,000				n/a				n/a
Ms. Abdoo			437,750				425,000				3
Mr. Harvey			412,000				400,000				3

COMPENSATION DISCUSSION AND ANALYSIS

Mr. Larson’s salary was increased from $412,000 to $450,000 effective May 20, 2013 when he became Executive Vice President and consistent withChief Financial Officer. Mr. Robertson joined the Compensation Committee’s action in July 2010Company on general salary increases for employees below the level of senior management.January 18, 2013.

Annual Cash Incentive.

All employees participate in the annual cash incentive program. Any awards earned are based on (1) the Company’s performance on two annual financial metrics, Adjusted FFO, and Return on Invested Capital (“ROIC”, defined below), and (2) performance on individual objectives. For the named executive officers, the annual cash incentive is weighted as follows:

The financial performance measures of Adjusted FFO and ROIC are key metrics for the Company and the most significant portion of executives’ annual cash bonus is tied to the Company’s financial performance for the year. FFO per diluted share is the predominant measure of operating performance used by real estate investment trusts and the Company uses the measure in accordance with National Association of Real Estate Investment Trusts guidelines as a supplemental measure of operating performance in its earnings releases and financial presentations. ROIC provides an emphasis on investing capital effectively. In the cyclical real estate / hospitality market, this focus on using capital effectively enhances the opportunity for longer term stability and growth. The individual performance goals represent the smallest component of the named executive officers’ annual incentive award opportunity, reflecting the Committee’s continued belief that the incentive emphasis for senior executives should be primarily on Company performance. These goals create line of sight and motivate behaviors that support the Company’s annual business plan and long-term strategy.

The target annual cash incentive represents 22%-25% of the named executive officers’ total target compensation. The total amount that a named executive officer may earn depends on: (1) salary or eligible earnings, because the award is calculated and paid as a percentage of the annual salary or amount earned, (2) the level of performance achieved on Adjusted FFO and ROIC, and (3) the level of performance achieved on individual goals. Performance levels are set at “threshold”, “target” and “high” and results are interpolated between these levels. There is no bonus if performance is “below threshold”, and bonuses are capped at the “high” level. The chart below shows the target annual incentive award as a percentage of salary for each named executive officer in 2013. The target amount shown for Mr. Larson reflects his prorated salary increase to $450,000 effective May 20, 2013 when he became Chief Financial Officer. The target amount shown for Mr. Robertson reflects the prorated salary of $450,000 from his date of hire, January 18, 2013.

								COMPENSATION DISCUSSION AND ANALYSIS

Name		Salary				Target as % of Salary				Target Annual Incentive
Mr. Walter		$	849,750				150	%		$	1,274,625
Mr. Larson			435,529				100				435,529
Mr. Abji			489,250				100				489,250
Mr. Robertson			429,041				100				429,041
Ms. Abdoo			437,750				100				437,750

2013 Results on Financial Measures.Measures The Compensation Committee approved the financial metrics.The “threshold”, “target” and “high” goals for Adjusted FFO and ROIC forwere established in February 2013 by the 2011 annual cash incentive award at its February 2011 meeting. The financial metrics areCompensation Committee based on, and subject to review and approval of, the Company’s 2013 business plan and budget which are reviewed, discussed and approved by the Compensation Committee and approved 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 2011 Annual Report on Form 10-K in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Reconciliation of Net Loss 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.

Directors. The chart below shows the Adjusted FFO and ROICthese measures established in February 2011 and the Company’s actual results for 2011.

		Threshold				Target				High				2011 Actual Results
Adjusted FFO per share		$	0.77			$	0.90			$	1.04			$0.91 (Above Target)
ROIC			6.69	%			7.87	%			9.05	%		7.70% (Below Target)

Personal Performance Goals. The performance goals for each named executive officer2013, which were also reviewed and approveddetermined by the Compensation Committee in February 2014.

2013 Actual Results on Financial Measures

(1)

ROIC is calculated as property-level EBITDA divided by the invested capital for all comparable consolidated properties. Property-level EBITDA is defined as the earnings before interest, taxes, depreciation and amortization of our comparable, owned hotels after eliminating corporate-level costs and expenses related to our capital structure. Invested capital is defined as the purchase price of a property plus all capital expenditures, excluding the furniture, fixture and equipment reserve contributions, which are typically 5% of gross revenues.

Based on these results, the named executive officers received the following:

Name		Actual FFO Award				FFO Award as a % of Target				ROIC Award				ROIC Award as a % of Target
Mr. Walter		$	1,070,685				150	%		$	326,304				106.67	%
Mr. Larson			365,844				150				111,495				106.67
Mr. Abji			410,970				150				125,248				106.67
Mr. Robertson			360,394				150				109,834				106.67
Ms. Abdoo			367,710				150				112,064				106.67

COMPENSATION DISCUSSION AND ANALYSIS

2013 Results on Individual Performance Goals.At the beginning of each year, senior management proposes and drafts performance goals based on the annual business plan of the Company, its long-term strategy and individual department objectives. The Compensation Committee reviewed these proposed goals at its February 2011 meeting. Mr. Walter drafted2013 meeting, adopted any revisions it deemed appropriate and approved the performance goals in discussion with, and for, the othernamed executive officers and drafted his own, in consultationgoals. Mr. Walter’s goals are discussed with the Compensation Committee. Theindependent directors of the full Board prior to approval. Since they are tied to the Company’s plans and strategy, the goals are designed to be attainable at a “target” level. The Compensation Committee also conducted a mid-year review of the personal goals at its July meeting to ensure that they were still appropriate.

At its meeting The Committee approved changes to personal goals based on the management restructuring that occurred in February 2012,late May. Mr. Larson’s objectives were modified to include those tied to his new position as Chief Financial Officer. Mr. Robertson added oversight of dispositions to his objectives and Mr. Walter added an objective to ensure the transition of positions at the senior management level. The Compensation Committee discussed each executive’s performance. The Committee’sperformance at its February 2014 meeting. Its 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 theconsideration. The Committee discussed hisMr. Walter’s performance, each of the other named executive officer’s performance and its recommendations

with the independent directors in an executive session. The chart below summarizes

Mr. Walter’s individual goals in 2013 included (i) overseeing the 2011 personal performancestrategic planning process; (ii) integrating and enhancing the development of new and rising members of senior management; (iii) ensuring an effective transition of positions in senior management; and (iv) participating in industry legislative initiatives, including as serving as Chair of NAREIT and working with Coalition to Insure Against Terrorism. Target for individual goals was 30% of base salary. Actual was 37%

Individual goals for Mr. Larson included (i) managing and resultsimplementing the Company’s finance plan in his new role as Chief Financial Officer; (ii) designing and overseeing the 2013 investor relations strategy; (iii) updating and implementing the 2013 disposition plan; (iv) developing and implementing strategic plans on certain assets; and (v) ensuring a smooth transition and developing working and coaching relationships in his new department. Target for individual goals was 20% of base salary. Actual was 25.5%

Mr. Abji’s individual goals in 2013 included (i) achieving budgeted operating objectives on RevPAR growth, margins and other metrics; (ii) implementing the food & beverage plan to achieve appropriate returns on renovated or repositioned restaurants and bars; (iii) continuing initiatives with brand operators on improving productivity and reducing costs; and (iv) improving ancillary property revenues and group revenues. Target for individual goals was 20% of base salary. Actual was 24.5%

Mr. Robertson’s individual goals included (i) implementing the Company’s 2013 investment plan for the named executive officers.

		Goals		Achievements
Mr. Walter		Implement 2011 Business Plan		Given the weaker economic environment, the portfolio performed well. Implemented capital investment program on schedule and below budget, completed asset restructuring and redevelopments.
		Direct enhancement of organizational and reward processes		Improved cross functional collaboration, initiated comprehensive portfolio review, increased structure on investment and asset sales, enhanced diversity in workforce
		Promote the Company in the investor community		Communicated clearly with market, expanded stockholder outreach
		Enhance bench strength, implement succession planning		Implemented transition plans, added Managing Directors for acquisitions, completed development plans for each associate
Mr. Risoleo		Implement 2011 Americas acquisition plan		Completed over $500 million of US acquisitions, reviewed and evaluated numerous single asset, portfolio and debt transactions, evaluated and negotiated select service investment platform, established office in Brazil and made progress on identifying assets and strategic partners.
		Implement 2011 EU business plan		Completed acquisition of Pullam Bercy in Paris, finalized Fund 2 of European joint venture, completed strategic plan of target markets.
		Implement 2011 Asia Pacific acquisition plan		Acquired Hilton Melbourne and contracted for purchase of Citigate Perth. Finalized ACCOR India investment. Sourced and underwrote numerous opportunities in several countries.
Mr. Abji		Implement 2011 North America Operating Plan		Improved management of hotel mix of customers and profit flow through, conducted detail operation reports for markets and larger assets, identified and monitored key performance indicators, integrated new acquisitions.
		Implement 2011 European Operating Plan		Managed and implemented large return on investment projects at key hotels, completed strategic plans for assets, integrated new acquisitions.
		Implement 2011 Asia Operating Plan		Worked to surpass 2011 budget for assets, identified and monitored key performance indicators, completed strategic plans for assets.
		Resolve allocated complex assets		Executed on special project assets and developed portfolio strategy on capital plans for assets for sale.
Mr. Harvey		Implement finance plan in support of business plan		Oversaw the issuance of approximately $800 million of debt, the repayment or refinancing of approximately $588 million and exchange of $140 million of exchangeable debentures. Negotiated new credit facility of $1 billion.
		Integration of Asia operations		Further assimilated Asia/Pacific operators supporting financing efforts without significant restructuring.
		Enhance long-term financial plan		Updated strategic finance plan

		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.

SummaryU.S., Latin America, Europe and Asia; (ii) collaboratively reviewing, revising and updating the Company’s investment strategy domestically and internationally, including an assessment of Annual Cash Incentive. The chart below showsreturn methodology; (iii) ensuring the componentssuccessful execution of the annual incentive cash award for 2011 under each ofCompany’s 2013 disposition plan; (iv) realigning and refining the financial performance metricsinvestment team structure 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:

Name		Target as % of Salary				Target				2011 Annual Incentive Results
										ROIC Award				FFO Award				Performance Goals				Total Payout
Mr. Walter			100	%		$	772,500			$	170,491			$	463,500			$	189,263			$	823,300
Mr. Risoleo			75				386,250				85,233				231,750				84,975				402,000
Mr. Abji			75				332,175				73,300				199,305				70,997				343,700
Mr. Harvey			75				270,375				59,663				162,225				67,594				289,500
Mr. Larson			75				270,375				59,663				162,225				66,260				288,200

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,processes; and (v) successfully integrating 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, performance at the “high” level for each of the three years.

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

Name		2011 Personal Performance Shares
		Target Shares				Actual % of Target				Total Shares Released
Mr. Walter			205,925				111.26%				229,115
Mr. Risoleo			145,864				105.01%				153,173
Mr. Abji			78,767				103.45%				81,484
Mr. Harvey			67,784				112.51%				76,265
Mr. Larson			60,920				111.26%				67,780

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 results on the TSR measuresculture and organization. Target for individual goals was 20% of base salary. Actual was 23.5%

Individual goals for Ms. Abdoo in 2013 included (i) overseeing and resolving key open litigation matters and claims; (ii) coordinating legislative and regulatory initiatives and responses; and (iii) enhancing anti-corruption and anti-bribery compliance through in person training at its meeting in February 2012. The results were calculated, at the requestinternational offices, on-line training of the Committee, by Towers Watson. TSR represents a cumulative returnpersonnel, institutionalizing diligence procedures and reviewing approaches to supply chain and vendor compliance. Target for one year (from year-end 2010 to year-end 2011) reflecting price appreciation and dividend payments and is measured against two indices, the 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

individual goals was 20% of base salary. Actual was 24.5%

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:

Starwood Hotels & Resorts Worldwide, Inc.		LaSalle Hotel Properties
DiamondRock Hospitality Co.		Sunstone Hotel Investors, Inc.
Gaylord Entertainment Co.		Marriott International. Inc.
Strategic Hotels & Resorts, Inc.

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

								Threshold  COMPENSATION DISCUSSION AND ANALYSIS

Based on the Compensation Committee’s review, the named executive officers received the following cash incentive based on their personal performance objectives:

Name		Individual Performance Award				Award as % of Target
Mr. Walter		$	314,407				123.33	%
Mr. Larson			109,971				126.25
Mr. Abji			119,866				122.50
Mr. Robertson			100,824				117.50
Ms. Abdoo			107,248				122.50

Summary of Annual Cash Incentive. The chart below summarizes all the components of the annual incentive cash award for 2013 under each of the metrics.

										Results 2013 Annual Incentive
Name		Target as % of Salary				Target Bonus				FFO Award				ROIC Award				Individual Performance				Total Bonus
Mr. Walter			150	%		$	1,274,625			$	1,070,685			$	326,304			$	314,407			$	1,711,400
Mr. Larson			100				435,529				365,844				111,495				109,971				587,400
Mr. Abji			100				489,250				410,970				125,248				119,866				656,100
Mr. Robertson			100				429,041				360,394				109,834				100,824				571,100
Ms. Abdoo			100				437,750				367,710				112,064				107,248				587,100

Long-Term Incentives

The long-term incentives are equity-based awards and provide 90% of the target value in the form of performance vesting restricted stock and the remaining 10% in the form of stock options. In combination, these awards represent the largest component of the named executive officers’ total target compensation, representing between 50% and 61% in 2013. Dividends accrue on unvested shares, but are paid only when, and if, the restrictions on the awards lapse, that is, the shares vest based on performance and are released.

All of our long-term incentive compensation is performance-based. Performance shares vest based on relative TSR, corporate, and individual performance. These measures are intended to provide a link to stockholder value, with recognition of the other companies that Host may be competing against for capital. Stock options are intended to provide a link to absolute stockholder value creation through a sole focus on stock price appreciation.

Restricted Stock

Our long-term incentive program provides an annual award of performance based restricted stock at the beginning of each year to more regularly incorporate stockholder feedback. Further, to remain consistent with our desire to maintain strong alignment with stockholder results, we grant the maximum number of shares that an executive may earn over the performance period.

In this structure, if our high performance goals are not achieved, the executive forfeits the right to earn the full number of shares granted. We believe this approach better communicates the “loss” an executive incurs in his/her earning opportunity if our goals are not achieved.

All awards of restricted stock vest based on performance on corporate and individual objectives approved by the Compensation Committee at the outset of the year and on three TSR measures. The program design uses a three-year performance period for TSR. However, to facilitate our transition from our historical three-year program to the annual grant program, we phased in the timing of the TSR performance measurement periods. In 2012, which was the first year of the annual program, the grant vested based on a one-year relative TSR performance (2012). The grant for 2013 vests based on two-year (2012-2013) cumulative relative TSR performance. All subsequent grants will vest based on three-year cumulative relative TSR performance.

COMPENSATION DISCUSSION AND ANALYSIS

The vesting of the restricted shares awarded in 2013 was dependent upon:

2013 Restricted Stock Vesting

Achievement levels are set for “threshold” at which 25% of shares may be earned, “target”, at which 50% of the shares may be earned and “high” performance, at which all shares are earned. No shares are earned if performance is below threshold, and results will be interpolated between the levels of threshold, target and high.

2013 Results on Individual Performance. Individual goals represent 16.67% of the target stock award and the results were consistent with those described above under “Annual Cash Incentive”. The chart below shows for each named executive officer, the total shares that were eligible to be earned for individual performance, the “target” level of shares, the actual shares earned and the shares forfeited by each named executive officer.

		Individual Performance Shares
		Shares Granted (High)				Shares Granted (Target)				Shares Earned				Shares Forfeited
Mr. Walter			65,803				32,902				40,581				25,222
Mr. Larson			20,987				10,494				13,248				7,739
Mr. Abji			26,423				13,212				16,184				10,239
Mr. Robertson			26,423				13,212				15,524				10,899
Ms. Abdoo			17,276				8,638				10,582				6,694

2013 Results on Corporate Performance Objectives. Corporate objectives represent 33.33% of the target stock award. As with individual performance goals, these are proposed by senior management and Mr. Walter at the beginning of the year and reviewed by the Compensation Committee at its February 2013 meeting. The goals are tied to the annual business plan and strategy of the Company with an emphasis on encouraging the behaviors and results that the Company believes will ultimately drive long-term stockholder value creation and preservation. Summarized below is an assessment of our Company’s performance against the corporate level objectives established for 2013, the indicated the level of achievement, plus the appropriate percentage award.

Operations

Weighting				Target				Achieved				Achievements
	20	%			6.7	%			6.7	%		Overall operating performance slightly exceeded the Company’s budget expectations with RevPAR growth and total revenue growth falling slightly short of target but with margins higher. Food and beverage performance improved at properties as did efforts to improve productivity.

								Target  COMPENSATION DISCUSSION AND ANALYSIS

Investment Plan

Weighting				Target				Achieved				Achievements
	20	%			6.7	%			5.0	%		Few marketed assets met our criteria and competition for those that did pushed pricing to levels above what we believed to be prudent. As a result, the investment plan did not meet target. In the U.S. we purchased a fee simple interest in the 426-room Hyatt Place Waikiki Beach in Honolulu, Hawaii and, subsequent to year end, purchased the 151-room Powell Hotel in San Francisco, California, both target markets. No transactions were completed in Latin America and Asia. In Europe our joint venture completed the purchase of the Sheraton Stockholm.

Dispositions

Weighting				Target				Achieved				Achievements
	20	%			6.7	%			10.0	%		Dispositions exceeded target with the sale, or firm contracts to sell by year end, 7 properties for total sale price of $960 million. The properties were non-core assets where the Company believed the potential for growth would be constrained or where advantageous pricing could be opportunistically obtained in the market.

Finance Plan

Weighting				Target				Achieved				Achievements
	15	%			5.0	%			5.0	%		The finance plan implementation met expectations, with the achievement of an investment grade rating, continued work in lowering the Company’s debt-to-equity ratio, and extending debt maturities thereby improving overall leverage and coverage ratios. We also successfully completed several refinancings, including, on behalf of our joint venture in Europe, the refinancing of a mortgage loan secured by 6 properties.

Special Projects

Weighting				Target				Achieved				Achievements
	15	%			5.0	%			7.5	%		Significant progress was made in identifying, reviewing and implementing plans on value enhancement initiatives and development, including, among others, completing construction on the Newark Airport Marriott ballroom well prior to 2014 Super Bowl, beginning construction of 131-unit vacation ownership project in Maui, Hawaii adjacent to our Hyatt Regency Maui Resort & Spa, successfully converting the Memphis Marriott Downtown to the Sheraton Memphis Downtown, reaching agreement with the City of Houston on a new ground lease for the Houston Airport Marriott with a repositioning of the hotel, and completing the purchase of the fee simple interest in the land at the New York Marriott Marquis Times Square.

Strategic Plan

Weighting				Target				Achieved				Achievements
	10	%			3.3	%			3.3	%		The strategic review included an assessment of the composition and performance of the Company, a review of the industry fundamentals, brands and customers, an examination of various segments and product types to identify elements that may perform better in the future and trends in international travel and group business.

Totals for All Corporate Objectives

Weighting				Target				Achieved
	100	%			33.3	%			37.5	%

COMPENSATION DISCUSSION AND ANALYSIS		High

The chart below shows for each named executive officer, the total shares that were eligible to be earned on corporate objectives, the “target” level of shares, the actual shares earned and the shares forfeited by each named executive officer.

		Corporate Performance Shares
		Shares Granted (High)				Shares Granted (Target)				Shares Earned				Shares Forfeited
Mr. Walter			131,606				65,803				74,028				57,578
Mr. Larson			41,974				20,987				23,611				18,363
Mr. Abji			52,846				26,423				29,726				23,120
Mr. Robertson			52,846				26,423				29,726				23,120
Ms. Abdoo			34,553				17,277				19,436				15,117

2013 Results on Relative TSR Measures. The Company’s TSR was compared to the three market references for the two- year period January 1, 2012 through December 31, 2013. Beginning in 2014, all grants will vest based on a three year relative cumulative TSR performance as the transition from the historical three-year compensation program to the annual program will be complete. Shares vested based on the performance of the Company’s relative TSR (measured as a percentile) compared to each reference. No shares are earned if performance is “below threshold”, and results are interpolated between the levels of “threshold”, “target” and “high”, as is shown below

2013 Actual TSR Results⁽¹⁾

(1)

TSR is the increase in the price of the Company’s common stock at year end December 2013 over the price at year-end December 2011, plus dividends paid on the Company’s common stock during the relevant years. 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.

(2)	The Lodging Index is comprised of the following companies: Marriott International, Inc., Starwood Hotels & Resorts Worldwide, Inc., Hyatt Hotels Corporation, Strategic Hotels & Resorts, Inc., LaSalle Hotel Properties, Sunstone Hotel Investors, Inc. and Diamondrock Hospitality Co.

								2011 Actual Results  COMPENSATION DISCUSSION AND ANALYSIS

The chart below shows for each named executive officer, the total shares that were eligible to be earned on each TSR measure, the “target” level of shares that could be earned, the actual shares earned and the shares forfeited by each named executive officer. No shares were earned on Lodging Index TSR because the results were “below threshold”.

		TSR Shares
		NAREIT Index Shares Granted (High)				NAREIT Index Shares Granted (Target)				NAREIT Index Shares Earned				Lodging Index Shares Granted (High)				Lodging Index Shares Granted (Target)				Lodging Index Shares Earned				S&P Index Shares Granted (High)				S&P Index Shares Granted (Target)				S&P Index Shares Earned				Total TSR
																																						Shares Earned				Shares Forfeited
Mr. Walter			65,803				32,902				42,196				65,803				32,902				0				65,803				32,902				21,221				63,417				133,992
Mr. Larson			20,987				10,494				13,458				20,987				10,494				0				20,987				10,494				6,768				20,226				42,735
Mr. Abji			26,423				13,211				16,944				26,423				13,211				0				26,423				13,211				8,521				25,465				53,804
Mr. Robertson			26,423				13,211				16,944				26,423				13,211				0				26,423				13,211				8,521				25,465				53,804
Ms. Abdoo			17,276				8,638				11,078				17,276				8,638				0				17,276				8,638				5,572				16,650				35,178

Summary of Restricted Stock Results. In summary, the named executive officers earned the following shares in 2013:

		Total Shares Granted (Target)				Total Shares Earned				Total Shares Forfeited
Mr. Walter			197,411				178,026				216,792
Mr. Larson			62,961				57,085				68,837
Mr. Abji			79,269				71,375				87,163
Mr. Robertson			79,269				70,715				87,823
Ms. Abdoo			51,829				46,668				56,989

Shares would also vest in the event of an executive’s death or disability or, under certain circumstances, under the Severance Plan. Please see the discussion under “Additional Policies and Benefits—Severance Plan.” As described under “Additional Policies and Benefits—Perquisites and Other Individual Benefits,” Mr. Walter agreed to accept proceeds under life insurance policies to offset long-term incentive compensation that would vest in the event of his death.

Stock Options

Stock options represent 10% of the total target equity value. Grants are made annually and vest at the end of the calendar year in which the grants were made. Stock options are valued using the binomial options pricing model. Options have a 10-year life. No cash dividends accrue or are paid on options. The Compensation Committee awarded the following stock options to the named executive officers on February 5, 2013 at an exercise price of $16.55 per share, which was the closing price of the Company’s common stock on the date of the award. All options vested December 31, 2013.

Name		Stock Options
NAREIT TSRMr. Walter		30th percentile	85,875
Mr. Larson		50th percentile	27,852
Mr. Abji		75th percentile	34,483
Mr. Robertson		19th percentile (below Threshold)	34,483
Ms. Abdoo			22,546

In addition, Mr. Larson received a grant of 2,653 options on June 14, 2013 at an exercise price of $17.22 in connection with his new position as Executive Vice President, Chief Financial Officer.

Lodging Index TSR		30th  percentileCOMPENSATION DISCUSSION AND ANALYSIS		50th percentile		75th percentile		59th percentile (between Target and High)

For

Risk Considerations

Both prior to continuing the 2011 performance period, the Company ranked 100^th out of 123 companies for a percentile rank of approximately 19%annual program in the NAREIT Equity Index,2013 and 4^th out of 8 peer companies for a percentile rank of 59% in the Lodging Index. Accordingly, the Company’sprior to making its determinations on 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 sharespayments under the NAREIT TSR measure were forfeited.

		2011 NAREIT TSR Shares														2011 Lodging Index TSR Shares														Total Shares Released
Name		Target Shares				Actual % of Target				Actual Shares						Target Shares				Actual % of Target				Actual Shares
Mr. Walter			82,379				0.0	%			0						82,379				136.18%				112,184						112,184
Mr. Risoleo			58,352				0.0	%			0						58,352				136.18%				79,463						79,463
Mr. Abji			31,510				0.0	%			0						31,510				136.18%				42,910						42,910
Mr. Harvey			27,117				0.0	%			0						27,117				136.18%				36,927						36,927
Mr. Larson			24,371				0.0	%			0						24,371				136.18%				33,188						33,188

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

		Mr. Walter				Mr. Risoleo				Mr. Abji				Mr. Harvey				Mr. Larson
Base Salary		$	772,500			$	515,000			$	442,900			$	360,500			$	360,500
2011 Actual		$	772,500			$	515,000			$	442,900			$	360,500			$	360,500
Target Annual Cash Incentive		$	772,500			$	386,250			$	332,175			$	270,375			$	270,375
2011 Actual		$	823,300			$	402,000			$	343,700			$	289,500			$	288,200
Total annual target cash compensation		$	1,545,000			$	901,250			$	775,075			$	630,875			$	630,875
2011 Actual Cash		$	1,595,800			$	917,000			$	786,600			$	650,000			$	648,700

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

		Mr. Walter				Mr. Risoleo				Mr. Abji				Mr. Harvey				Mr. Larson
Target Shares for 2011 performance measures			370,683				262,568				141,787				122,017				109,661
2011 Shares Released on all performance measures			341,299				232,636				124,394				113,192				100,968

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

		2009-2011 Shares of Restricted Stock Awarded at “High”				2009-2011 Shares of Restricted Stock Forfeited
W. Edward Walter			1,901,868				680,530
James F. Risoleo			1,347,157				498,302
Minaz B. Abji			727,465				268,343
Larry K. Harvey			626,031				230,399
Gregory J. Larson			562,637				203,769

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, personal and personalcorporate goals approved by the Compensation Committee. The Committee considered the following factors: the pay mix is weighted toward long-term incentives whichthat align senior management interests with stockholders; total pay is capped—including annual cash incentives and long–termlong-term incentives, which are granted at a “high” level of performance; “tally sheets,” prepared by Pay Governance, the independent consulting firm retained by the Compensation Committee, are reviewed and consideraddress all elements of compensation for the named executive officers and potential outcomes under a range of scenarios from low to high performance; stock ownership and retention guidelines ensure that senior management will retain an ownership stake;stake and prohibit sales that would allow executives to fall below the ownership requirements; internal policies prohibit use of margin accounts, hedging or pledges of stock; a recoupment policy is in effect; performance metrics are tied to key measures of short-term success (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 the financial measures of Adjusted FFO and ROIC 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 BenefitsAdditional Policies and PoliciesBenefits.

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 perquisitesdescribed here.

Stock Ownership and other personal benefits,Retention Policy

All members of senior management must comply with the executive deferred compensation plan, the severance plan, which addresses change in control, the stockCompany’s equity ownership and retention policy which ensures that senior executives have a meaningful economic stake in the Company, while allowing for appropriate portfolio diversification.

Equity Ownership.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—six 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.

Retention.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,

								COMPENSATION DISCUSSION AND ANALYSIS

“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 recovery policy.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 with the policy and all executives were in compliance with the guidelines in 2013.

Recoupment Policy

The Company adopted a policy, effective January 1, 2012, that requires 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.

Insider Trading Controls, Hedging, Short Sales and Pledging

Because we believe it is improper and inappropriate for any Company personnel to engage in short-term or speculative transactions involving our stock or other securities, the Company’s Insider Trading Policy Statement, which was adopted in 2001, provides that directors, officers and employees, and family members sharing the same household, shall not engage in any of the following activities with respect to Company securities:

(1) “In and out” trading in Company securities; Company securities purchased in the open market must be held for a minimum of six months and ideally longer. (2) Short sales, including “selling against the box” transactions; (3) Buying or selling puts or calls (options) or other derivatives on our stock or other securities or entering into hedging transactions on Company securities; this does not pertain to the exercise of stock options granted by the Company to its employees, the terms of which prohibit such trading; and (4) Margin Accounts; Stock Pledges; the Company prohibits employees and directors from purchasing Company securities on margin or holding Company securities in a margin account or otherwise pledging Company securities as collateral for loans.

Executives and directors annually certify that they have complied with the policy, and no Company securities are currently pledged nor will executives and directors be permitted to pledge them in the future.

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

COMPENSATION DISCUSSION AND ANALYSIS

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 2013, Mr. Robertson also received relocation benefits in connection with joining the Company.

In connection with the restricted stock awards, Messrs.Mr. Walter and Risoleo each agreed at the Company’s request to purchase a life insurance policiespolicy and to accept the proceeds under these policiesthe policy to offset some or all of the stock compensation that would vest and be payable in the event of the executive’shis death. The proceeds from the life insurance policiespolicy 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 executivesMr. Walter for the cost of eachthe 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, 20112013 upon various termination events, see “Executive Officer Compensation—Potential Severance and Change in Control Payments.”

2009-2011 Program—DesignTax 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:

to foster a strong relationship between stockholder interests and executive compensation;

to provide annual and long-term incentives that emphasize performance-based compensation; and

to provide overall levels of compensation that attract and retain talented executives.

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 awards to emphasize performance and align management and stockholder interests.

Base SalaryAccounting. 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. 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 senior executives 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, (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.

		Threshold				Target				High
Performance
(as a % of Budgeted Goals)			85				100				115
Payout Level
(as a % of Target)			50				100				200

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 also a performance measure for the restricted stock awards.

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.

		Total Eligible Award as a % of Salary
Performance Level		Chief Executive Officer				Executive Vice Presidents
Below Threshold			0	%			0	%
Threshold			50				37.5
Target			100				75
High			200				150

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:

Measures		Named Executive Officers
Financial Measures		a = salary x weighting (80%) x performance level achieved (70% adjusted FFO, 30% ROIC)
Personal Performance Goals		b = salary x weighting (20%) x performance level achieved
Total Potential Annual Cash Incentive		Sum of a + b

Long-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%.

Restricted Stock. Restricted stock is an upfront award for the 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 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 a % of the annual Target amount)

< Threshold		Threshold		Target		High
0		50		100		150

Relative Total Stockholder Return Measures. 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 TSR (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:

< Threshold

Threshold

Target

High

Percentile Achieved

Less than  30th Percentile

30th Percentile

50th Percentile

75th Percentile

Shares Vesting (as a % of the annual Target amount)

0

50

100

200

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. 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 75th 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. Please see the discussion under “—Other Benefits and Policies—Severance Plan.” As described under “—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.

Stock Options. Stock options represent 10% of the total target equity value. Grants were made upfront for the three-year period with one third eligible to vest based on continued service with the

Company each year end December 31, 2009, 2010, 2011. 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 year of the program, and on May 14, 2009, when the new stock plan was approved, for the remaining two years 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 stock on the date 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, 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.

Compensation of Named Executive Officers.In 2008 the Committee requested Towers Watson, the Committee’s independent consultant at the time, to update its prior work on compensation, review the results of the prior program and assist the Compensation Committee in the design of the executive compensation program for 2009-2011. Towers Watson again aggregated compensation data from two groups that the Committee has previously used for reference. These were (1) 18 size-based real estate companies with a median total capitalization of $18 billion, and (2) Towers Watson’s general industry database of companies regressed to $5.5 billion of revenues (in excess of 800 companies). The size-based real estate group was chosen because it reflected current proxy data from the real estate industry, companies of comparable size and, in many instances, with a global portfolio. It also reflected executive compensation practices against which the Company competes directly for talent and investment capital. The size-based real estate group from which the data was aggregated included:

Simon Property Group, Inc.		Starwood Hotels & Resorts Worldwide, Inc.
General Growth Properties, Inc.		Kimco Realty Corporation
Vornado Realty Trust		HCP Inc.
Equity Residential		Apartment Investment and Management
ProLogis		Company
Brookfield Properties Corporation		Macerich Company
Public Storage		AvalonBay Communities
Marriott International, Inc.		Forest City Enterprise Inc.
Boston Properties, Inc.		Developers Diversified Realty Corporation
Duke Realty Corporation

The general industry database was chosen because it presented information from a broader market than the real estate industry and was consistent with the Company’s inclusion in the S&P 500 index in 2007. While the Committee reviewed compensation information derived from the general industry group, the Committee did not see the identity of any of the surveyed companies.

The Committee reviewed aggregated compensation data in the 25th, 50th, and 75th percentiles for the total data. The Committee did not adhere to targeting overall compensation to a certain percentile, or a range of percentiles, in each peer group. This was because each peer group presented key differences from the Company and had certain limitations. The size-based real estate group did not reflect factors specific to the hospitality sector, and had data only on proxy-named positions. The general industry group did not provide direct comparables for most positions in REITs. Data from both groups did not reflect the experience of a person in a particular position. The Committee, instead, used the collective data, in consultation with Towers Watson, to inform itself of the current levels of compensation in the market, and considered other factors, such as the credentials, length of service, experience and prior performance of each individual as well as internal equity considerations among the senior management team. The Committee also consulted Mr. Walter and

discussed its recommendations for senior management with him. The Committee reviewed its determinations for all executives and Mr. Walter with the independent directors of the Board in executive session.

The 2009-2011 program contemplated one upfront equity award, however, the Company had insufficient shares available in its stock plan. As a result, only performance shares and options for 2009 were awarded in February of 2009. Upon approval of a new stock plan at the 2009 Annual Meeting, the Committee awarded the remaining options for 2010 and 2011 on May 19, 2009, at an exercise price equal to the closing price of the Company’s stock on that date. In August 2009, the Committee awarded the remaining performance shares for 2010 and 2011. Pursuant to anti-dilution provisions in the stock plan and award agreements, awards for 2010 and 2011 were adjusted because of a stock dividend paid by the Company in December 2009. The Committee determined the number of shares for the restricted stock awards by dividing the value at the “high” level of performance by the average of the high and low price of the Company’s common stock for the 60 calendar days prior to December 31, 2008. The Committee used the 60-day average to calculate the stock price because the longer period mitigates market fluctuations and represents a better indicator of value, particularly for an upfront three-year grant. In addition, with the economic downturn, valuations of companies were at depressed levels in early 2009. The 60 day average price for the Company’s stock was $7.44. The Committee also reviewed the Company’s stock price on the date of grant, February 5, 2009, which was $5.075. The Committee decided to use the $7.44 price to determine the number of shares in August as well, although it did assess the price on the date of grant, August  25, 2009, which was $10.44.

Additional Information-Tax and Accounting

Section 162(m) of the Internal Revenue Code precludes a public corporation from taking a deduction for compensation in excess of $1 million for its chief executive officer or any of its four other highest paid executive officers, unless such compensation is performance based and certain specific and detailed criteria are satisfied. Our executives, and all other employees, are employed by Host Hotels & Resorts, L.P., the operating partnership through which we conduct all operations, and its subsidiaries, and not directly by the Company. As a result, we believe that none of our employees are subject to the $1 million compensation deduction limit under Section 162(m).

								COMPENSATION DISCUSSION AND ANALYSIS

However, in the event that some portion of employee compensation is subject to Section 162(m) but fails to be deductible, our taxable income would increase to the extent of the disallowed deduction and we could be required to make additional dividend distributions to our stockholders or to pay tax on the undistributed income provided we have distributed at least 90% of our adjusted taxable income. In such event, the Compensation Committee may consider the anticipated tax treatment to the Company and the executive officers in its review and establishment of compensation programs and payments. However, the deductibility of some types of compensation payments can depend upon the timing of an executive’s vesting or exercise of previously granted rights. Interpretations of, and changes in, applicable tax laws and regulations as well as other factors beyond the Committee’s control also may affect deductibility of compensation. Accordingly, the Committee may determine that it is appropriate to structure compensation packages in a manner that may not be deductible under Section 162(m).

All restricted stock awards to senior executives have been classified as liability awards primarily due to settlement features that allow the recipient to have a percentage of the restricted stock awards withheld to meet tax requirements in excess of the statutory minimum withholding. The Company therefore recognizes compensation expense over the requisite service period based on the fair value of the award at the balance sheet date. The value of all restricted stock awards less estimated forfeitures, is

recognized over the period during which an employee is required to provide service in exchange for the award—the requisite service period (usually the vesting period). No compensation cost is recognized for awards for which employees do not render the requisite service. The Committee makes its assessments on the appropriate value of the restricted stock awards for target compensation based on the fair market value of the common stock on the date of grant or a 60 day calendar average of high and low stock price of the Company’s common stock on the New York Stock Exchange and also considers the closing price of the stock on the date of grant. These values would not be reflected in the Company’s financial statements because liability awards are re-measured to fair value each reporting period.

EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table for Fiscal Year End 2011

Name		Year  EXECUTIVE OFFICER COMPENSATION				Salary (1)				Stock Awards (2)				Option Awards (3)				Non-Equity Incentive Plan Compensation (4)				All Other Compensation (5)				Total
Richard E. Marriott (6) Chairman of the Board			2011 2010 2009			$	360,500 300,411 289,452			$	—   —   —			$	—   —   —			$	276,000 405,555 190,036			$	119,960 117,476 9,333			$	756,460 823,442 488,821
W. Edward Walter President and Chief Executive Officer			2011 2010 2009				772,500 712,808 704,589				8,199,977 4,842,000 2,175,202	(8)			—   —   1,001,917				823,300 1,318,695 673,154				125,132 76,946 78,051				9,920,909 6,950,449 4,632,913
James F. Risoleo Executive Vice President, Managing Director, Europe (7)			2011 2010 2009				515,000 500,000 500,000				5,808,333 3,429,749 1,540,768	(8)			—   —   709,691				402,000 693,750 350,769				83,275 47,647 54,445				6,808,608 4,671,146 3,155,673
Minaz B. Abji Executive Vice President, Asset Management			2011 2010 2009				442,900 430,000 430,000				3,136,511 1,852,054 832,015	(8)			—   —   383,234				343,700 599,850 301,622				82,673 35,630 32,789				4,005,784 2,917,534 1,979,700
Larry K. Harvey Executive Vice President, Chief Financial Officer			2011 2010 2009				360,500 350,000 350,000				2,699,165 1,593,813 716,003	(8)			—   —   329,798				289,500 482,335 244,838				64,890 23,297 18,862				3,414,055 2,449,445 1,659,501
Gregory J. Larson Executive Vice President, Corporate Strategy and Fund Management			2011 2010 2009				360,500 350,000 350,000				2,425,835 1,432,426 643,498	(8)			—   —   296,399				288,200 486,955 246,448				71,238 29,215 34,198				3,145,773 2,298,596 1,570,543

EXECUTIVE OFFICER COMPENSATION

Summary Compensation Table for Fiscal Year 2013

Name		Year				Salary (1)				Stock Awards (2)				Option Awards (3)				Non-Equity Incentive Plan Compensation (4)				All Other Compensation (5)				Total
Richard E. Marriott (6) Chairman of the Board
			2013			$	385,220			$	—			$	—			$	374,500			$	124,748			$	884,468
			2012				374,000				—				—				402,873				102,214				879,087
			2011				360,500				—				—				276,000				119,960				756,460
W. Edward Walter President and Chief Executive Officer
			2013				849,750				2,963,438				364,969				1,711,400				175,972				6,065,529
			2012				825,000				3,926,331				375,179				1,808,318				118,482				7,053,310
			2011				772,500				8,199,977				—				823,300				125,132				9,920,909
Gregory J. Larson Executive Vice President, Chief Financial Officer
			2013				435,529				942,104				119,432				587,400				73,267				2,157,732
			2012				400,000				1,152,131				110,090				581,080				50,470				2,293,771
			2011				360,500				2,425,835				—				288,200				71,238				3,145,773
Larry K. Harvey(7) Former Executive Vice President, Chief Financial Officer
			2013				239,299				—				—				—				2,133,261				2,372,560
			2012				400,000				1,273,404				121,679				583,560				51,363				2,430,006
			2011				360,500				2,699,165				—				289,500				64,890				3,414,055
Minaz B. Abji Executive Vice President, Asset Management
			2013				489,250				1,189,960				146,553				656,100				94,102				2,575,875
			2012				475,000				1,576,599				150,649				685,853				84,263				2,972,364
			2011				442,900				3,136,511				—				343,700				82,673				4,005,784
Struan B. Robertson Executive Vice President, Chief Investment Officer
			2013				429,041				1,404,466				146,553				571,100				144,414				2,695,573
Elizabeth A. Abdoo Executive Vice President, General Counsel
			2013				437,750				778,033				95,821				587,100				63,626				1,962,329
			2012				425,000				1,030,850				98,500				623,220				44,227				2,221,796

 

(1)

Salary is established at an annual rate, determined on the basis of a 52-week year, and is paid bi-weekly. The amount listed in the salary column includes amounts deferred at the election of the named executive officer under our Executive Deferred Compensation Plan in any such year. TheAmounts shown for Mr. Larson reflect his prorated salary increase to $450,000 effective May 20, 2013 when he became Chief Financial Officer. Amounts shown for Mr. Robertson reflected the prorated salary of Mr. Marriott and Mr. Walter varied in 2009 and 2010 because each requested to reduce$450,000 from his salary effective May 25, 2009 as partdate of the Company’s cost reduction efforts due to the recession. Mr. Marriott reduced his salary from $350,000 to $250,000, and Mr. Walter reduced his salary from $750,000 to $675,000. At its July 2010 meeting, as the economy rebounded, the Compensation Policy Committee reinstated each of Mr. Marriott’s and Mr. Walter’s salary effective July 1, 2010.hire, January 18, 2013.

 

(2)

The amounts in this column reflect the grant date fair value of restricted stock awards calculated in accordance with FASB ASC Topic 718. Under our compensation program, senior management received718 and do not reflect the entirenumber or value of the shares that were actually earned. For a chart of 2013 realized pay for each of the named executive officers, see page 26 of the Compensation Discussion & Analysis (“CD&A”).

								EXECUTIVE OFFICER COMPENSATION

Grant Date Fair Value

The CD&A explains the performance conditions for vesting of restricted stock, award atwhich are the startsatisfaction of corporate performance objectives and annual personal performance objectives (“Performance-based Awards”) and the results of the three-year period, 2009-2011, with one-thirdCompany’s annual total stockholder return (“Market-based Awards”) compared against three indices, the NAREIT Equity Index, a lodging index of seven companies (“Lodging Index”), and the S&P 500 Index (“S&P Index”). Please see “2013 Compensation Results—Long-Term Incentives.” The supplemental chart below shows the restricted stock that was eligible to vest in each year subject to2013 as allocated between Performance-based Awards and Market-based Awards based on the fair value of the awards on the grant date. We have also included the fair value of the Performance-based Awards assuming that all possible shares had been earned at the high level of performance.

														Total Fair Value
		Performance-based Awards								Market-based Awards				Assumes Performance Based Awards earned at Target				Assuming All Awards earned at High
		Target level (a)				High level (a)				High Level (b)
W. Edward Walter		$	1,633,559			$	3,267,119			$	1,329,879			$	2,963,438			$	4,596,998
Gregory J. Larson (c)			522,689				1,045,377				419,415				942,104				1,464,793
Larry K. Harvey			529,799				1,059,597				431,302				961,100				1,490,899
Minaz B. Abji			655,951				1,311,902				534,009				1,189,960				1,845,911
Struan B. Robertson			655,951				1,311,902				534,009				1,189,960				1,845,911
Elizabeth A. Abdoo			428,885				857,770				349,148				778,033				1,206,918

(a)

Performance-based Awards:Per FASB ASC Topic 718, performance conditions do not reduce the per share fair value of the award. However, awards are only recognized if achievement is probable. Therefore, we calculate the value of our performance awards based on the number of shares we expect to issue, which are establishedwill generally be at the start of each respective single-year performance period. Therefore,target level on the amounts above primarily reflectgrant date, multiplied by the grant date stock price. Accordingly, for 2013, the grant date fair value of awards that could have been earned for performance, not the actual shares that were earned.

Because the number of shares earned for 2011 were less than what was assumed in the grant date fair value (as a result of the failure to meet 2011 performance criteria), the actual amount of stock awards realized by each such executive officer were significantly lower than the amounts shown above. For a chart of 2011 realized pay for each of the named executive officers see page 31 of the Compensation Discussion & Analysis (“CD&A”).

The CD&A explains the performance conditions for vesting of restricted stock, which are the satisfaction of annual personal performance objectives by each executive (“Performance-based Awards”) and the Company’s annual total stockholder return (“Market-based Awards”) compared against two indices, a NAREIT Equity Index and a lodging index of seven companies (“Lodging Index”), and how each measure is set. Please see “2009-2011 Program—Design and Structure—Long-Term Incentive.” The supplemental

chart below shows the restricted stock that was eligible to vest in 2011 as allocated between Performance-based Awards and Market-based Awards, based on the fair value of the awards on the grant date. We have also included the fair value of the awards assuming that the Performance-based Awards had been earned at the high level of performance.

														Total Fair Value
		Performance-Based Awards								Market-Based Awards vesting in 2011 (b)				Assuming Perf. Based Awards earned at Target				Assuming Perf. Based Awards earned at High
		Target level (a)				High level (a)
Walter, W.E.		$	3,904,736			$	5,857,104			$	4,295,241			$	8,199,977			$	10,152,347
Risoleo, James		$	2,765,860				4,148,789			$	3,042,473			$	5,808,333			$	7,191,262
Abji, Minaz		$	1,493,580				2,240,370			$	1,642,931			$	3,136,511			$	3,883,301
Harvey, Larry		$	1,285,311				1,927,967			$	1,413,854			$	2,699,165			$	3,341,821
Larson, Gregory		$	1,155,157				1,732,735			$	1,270,678			$	2,425,835			$	3,003,414

(a)

The grant date fair value of the 2011 Performance-based Awards is based on the stock price on February 3, 2011,5, 2013, the date the Compensation Policy Committee approved corporate performance objectives and the personal performance objectives, of executives, which is $18.96$16.55, multiplied by the expected performance level, which we set at “target”, or 66%50%.

We have also included in the above table the total amount of awards that could be earned assuming the higha “high” level of performance, for our Performance-based Awards, orwhich is 100%, of the award, at the stock price on the grant date.date of $16.55. No similar disclosure has been made for the Market-based Awards as they have already been calculated as the maximum number of shares issued at the high level of performance multiplied by the grant date fair value. See Note (b).

 

(b)

We have included inMarket-based Awards:Per FASB ASC Topic 718, market conditions will reduce the above calculationsper share fair value of the award. However, the number of awards recognized for accounting purposes is not adjusted for the probability of achievement. Therefore, the grant date fair value of the Market-based Awardsawards reflects the total number of shares that maycan be earned in 2011. These awards were granted in 2009, however for those eligible to vest in 2011,at a performance level of “high” (100% of the criteria is established based on ourshares); while the value per share reflects the market conditions that must be achieved, and will, therefore, be less than the stock price at December 31, 2010. Therefore,on the grant date. Accordingly, for 2013, the grant date fair value is based on the fair value at December 31, 2010.February 5, 2013, the date the Compensation Policy Committee granted the award, using a simulation, or MonteCarlo, method multiplied by the maximum number of shares that can be issued at “high”.

Grant Date Fair Value of Market-based Awards

February 5, 2013

NAREIT Equity Index Shares						Lodging Index Shares						S&P Index Shares
Closing stock price on grant date		$	16.55			Closing stock price on grant date		$	16.55			Closing stock price on grant date		$	16.55
1-year Volatility of Host			25.7	%		1-year Volatility of Host			25.7	%		1-year Volatility of Host			25.7	%
Risk free interest rate			0.15	%		Risk free interest rate			0.15	%		Risk free interest rate			0.15	%
Stock Beta Compared to NAREIT Equity Index			1.58			Stock Beta compared to Lodging Equity Index			1.03			Stock Beta compared to S&P Equity Index			1.48
Grant date fair value		$	5.54			Grant date fair value		$	6.31			Grant date fair value		$	8.36

(c)

Amounts shown for Mr. Larson under the Grant Date Fair Value chart above include the value of an award of 10,068 shares of restricted stock made June 14, 2013 in connection with his promotion to Chief Financial Officer. The grant date fair valuesvalue for the 5,034 shares that are allocated as “Performance-based Awards” was $17.22. The grant date fair value of the Market-based Awards5,034 shares that are calculated usingallocated as “Market-based Awards” is $4.58 for NAREIT Equity Index shares, $6.59 for Lodging Index Shares and $6.22 for S&P Index Shares.

EXECUTIVE OFFICER COMPENSATION

Balance Sheet Date Fair Value

The Company recognizes compensation expense in its financial statements for the restricted stock awards based on the fair value at the balance sheet date, not the grant date. This is because the awards are classified as liability awards, primarily due to settlement features that allow recipients to have a simulation, or Monte Carlo, method.percentage of the earned award withheld to meet tax requirements in excess of the statutory minimum withholding. The supplemental chart below shows the fair value of the restricted stock awards at the December 31, 2013 balance sheet date. These amounts correspond to the expense recorded and disclosures in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

 

		Grant Date Fair Value December 31, 2010
Closing stock price on grant date		$	17.87
3 Year Volatility of Host			82.9	%
Risk free interest rate			1.02	%
Stock Beta compared to NAREIT Equity Index			1.377
Stock Beta compared to Lodging Index			1.062
Average grant date fair value per share		$	13.04

The Company recognizes compensation expense in its financial statements for the restricted stock awards over the requisite period based on the fair value at the balance sheet date, not the grant date. This is because the awards are classified as liability awards, primarily due to settlement features that allow recipients to have a percentage of the earned award withheld to meet tax requirements in excess of the statutory minimum withholding. The supplemental chart below shows the fair value of the restricted stock awards for performance year 2011 at the December 31, 2011 balance sheet date. These amounts correspond to the expense recorded and disclosures in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

		Balance sheet fair value
W. Edward Walter		$	3,460,825
Gregory J. Larson			1,109,732
Minaz B. Abji			1,387,530
Struan B. Robertson			1,522,453
Elizabeth A. Abdoo			1,387,530

 

		2011 Shares at Balance sheet fair value
W. Edward Walter		$	5,078,529
James F. Risoleo			3,461,624
Minaz B. Abji			1,850,983
Larry K. Harvey			1,684,297
Gregory J Larson			1,502,404

For additional information on the assumptions used by the Company in calculating the fair value of the restricted stock awards as of the balance sheet date, please see “Note 8—Employee Stock Plans—Senior Executive Restricted Stock” in the Notes to Condensed Consolidated Financial Statements in our 2013 Annual Report on Form 10-K.

For additional information on the assumptions used by the Company in calculating the fair value of the restricted stock awards as of the balance sheet date, please see “Note 8—Employee Stock Plans—Senior Executive Restricted Stock” in the Notes to Condensed Consolidated Financial Statements in our 2011 Annual Report on Form 10-K.

Amounts shown for Mr. Robertson in this column of the Summary Compensation Table also include the value of 12,837 shares of restricted stock awarded as a signing bonus when he joined the Company on January 18, 2013. The shares vest over a three-period based on continued employment with the Company with one-third vesting on January 18, 2013. The value of the shares is the closing price of the Company’s common stock on January 18, 2013, the date of grant, which was $16.71.

 

(3)

Options were granted on February 5, 2013 and vested December 31, 2013. The amounts in this column reflect the aggregate grant date fair values of stock options computed in accordance with FASB ASC Topic 718. For information on the assumptions used by the Company in calculating the fair value of the stock options, please see “Note 8—Employee Stock Plans—Employee Stock Options”Option Awards” in the Notes to Condensed Consolidated Financial Statements in our 20112013 Annual Report on Form 10-K.

As described in the CD&A, stock options were granted for the three-year period 2009-2011, with one-third eligible to vest each December 31, 2009, 2010, 2011, respectively, based on continued service with the Company. We show in the Summary Compensation Table the entire value of the three-year grant as compensation for 2009, even though only one-third was eligible to vest in 2009, one-third in 2010 and one-third in 2011. As a result, there is no value attributed to 2010 and 2011. We believe it is also useful to understand the fair value of the options by year, based on the grant date fair value which is shown in the supplemental chart below.

Name		Options vesting in 2009				Options vesting in 2010				Options vesting in 2011				Total Fair Value
W. Edward Walter		$	212,678			$	394,618			$	394,621			$	1,001,917
James F. Risoleo			150,647				279,520				279,524				709,691
Minaz B. Abji			81,350				150,941				150,944				383,234
Larry K. Harvey			70,006				129,896				129,896				329,798
Gregory J. Larson			62,917				116,741				116,741				296,399

 

(4)	These amounts reflect the annual cash incentive awards paid to each named executive officer, or deferred under the Executive Deferred Compensation Plan.

 

(5)	All Other Compensation consists of Company contributions to the Retirement and Savings Plan (“401(k) Plan”), which is available to all employees, and the Executive Deferred Compensation Plan, perquisites and other personal benefits, and tax reimbursements. The amounts are as follows:

 

Matching contributions of $7,350$7,650 made under the 401(k) Plan to each of Mr. Marriott, Mr. Walter, Mr. Risoleo, Mr. Abji, Mr. Larson, Mr. Harvey and Ms. Abdoo and $7,529 to Mr. Harvey.

Robertson.

 

Discretionary match of $3,675$7,650 made under the 401(k) Plan to each of Mr. Marriott, Mr. Walter, Mr. Abji, Mr. Larson and Ms. Abdoo, and in the named executive officers.

amount of $7,529 to Mr. Robertson.

 

Matching contributions made under the Executive Deferred Compensation Plan as follows: Mr. Marriott, $15,620;$15,979; Mr. Walter, $35,672; Mr. Risoleo, $13,125;$51,471; Mr. Abji, $23,918;$27,585; Mr. Harvey, $17,923 and$20,429, Mr. Larson, $18,062.

$22,785 and Ms. Abdoo, $24,163.

 

Discretionary match made under the Executive Deferred Compensation Plan as follows: Mr. Marriott, $7,810;$15,979; Mr. Walter, $17,836; Mr. Risoleo, $6,563;$51,471; Mr. Abji $11, 959; Mr. Harvey, $8,961, and$27,585; Mr. Larson, $9,031.

$22,785, and Ms. Abdoo, $24,163.

 

Premiums associated with the life insurance policiespolicy for Messrs. Walter and Risoleo.Mr. Walter. In connection with the long-term stock awardsaward granted under the executive compensation program, Messrs.Mr. Walter and Risoleo each agreed to purchase a life insurance policiespolicy and to accept proceeds under these policiesthe policy which would offset restricted stock compensation that would vest and would be payable in the event of the executive’shis death. The policies havepolicy has been in place since 2003. The Company annually reimburses each executiveMr. Walter for the cost of eachthe policy and the taxes payable as a result of this reimbursement, and the costs have remained constant since the policies werepolicy was purchased. In 2011,2013, the total amounts reimbursed to Mr. Walter, excluding taxes, were: Mr. Walter, $12,161; and Mr. Risoleo, $7,395.was $12,161.

Total cost of perquisites that executive officers are eligible to receive. In 2011, theseThese perquisites consisted of financial planning and tax services, dining, complimentary rooms and other hotel services when on personal travel at hotels owned by us or managed by our major operators. In addition, Mr. Robertson was reimbursed for relocation expenses. The cost of each of these benefits is as follows:

 

		Mr. Marriott				Mr. Walter				Mr. Risoleo				Mr. Abji				Mr. Harvey				Mr. Larson				Mr. Marriott				Mr. Walter				Mr. Larson				Mr. Harvey				Mr. Abji				Mr. Robertson				Ms. Abdoo
Financial and Tax Planning		$	6,000			$	2,000			$	2,000			$	900			$	0			$	0			$	—			$	2,000			$	—			$	2,000			$	—				—			$	—
Dining, rooms & hotel services			42,198				21,447				20,986				18,720				15,595				18,399				38,048				16,032				6,087				13,872				11,559				21,476				—
Relocation																											—				—				—				—				—				50,000				—

								EXECUTIVE OFFICER COMPENSATION

 

Tax reimbursements to each of the named executive officers associated with the perquisites, and with respect to Messrs.Mr. Walter, and Risoleo, tax reimbursementsreimbursement associated with the cost of the life insurance policies:policy: Mr. Marriott, $37,308;$39,443; Mr. Walter, $24,990; Mr. Risoleo $22,181;$27,538; Mr. Abji, $16,151;$11,983; Mr. Harvey, $11,386,$14,476, Mr. Larson, $6,310 and Mr. Larson, $14,722.

Robertson, $57,880.

 

(6)	Mr. Marriott is not a named executive officer under the SEC rules, but summary compensation information is provided in the interest of full disclosure.

 

(7)

In connection with a senior management restructuring, Mr. Risoleo served as Executive Vice President, Chief Investment Officer for all of 2011Harvey’s employment with the Company ended July 31, 2013. In addition to the All Other Compensation amounts received described in footnote (5), Mr. Harvey was entitled to the following payments and moved to his current position effective January 1, 2012.benefits under the Company’s Severance Plan.

 

One Year Annual Salary		$	412,000
One Year Annual Incentive Award (average of the prior 3 years)			451,798
Health benefits			31,100
Total Severance Benefit		$	894,898

(8)

The compensation for 2010 stock awards has been recalculated from amounts previously shown because it inadvertently included values reflectingIn addition, under the Cumulative TSR portionterms of the restricted stock awards. This valueagreement, Mr. Harvey was entitled to vest in his 2013 performance award at the “target” level of performance, and under the stock option agreement, all options accelerated and vested. All other shares were forfeited. The number and values ascribed to the stock and options is already included inlisted below:

		Number of Shares				Value
Restricted Stock			64,023			$	1,143,451
Stock Options			27,851			$	36,485

The stock award compensation presented for 2009, which reflected the incremental portion of both the 2010 and 2011 Cumulative TSRwas valued based on the closing price of the Company’s common stock on July 31, 2013, which was $17.86. The stock option value is the difference between the exercise price on the date of grant, date fair value in 2009. The 2010which was $16.55, and closing price of the Company’s common stock awardon July 31, 2013, which was overstated for each named executive officer as follows: Mr. Walter, $587,975; Mr. Risoleo, $416,481; Mr. Abji, $224,899; Mr. Harvey, $193,539; and Mr. Larson, $173,943.$17.86, multiplied by the number of options.

EXECUTIVE OFFICER COMPENSATION

Grants of Plan-Based Awards in Fiscal Year End 20112013

The following table provides information about awards granted to the named executive officers in 2011. The table only shows the possible payments under our annual cash incentive cash awards. This is because there were noaward in 2013 and the awards of options orand restricted stock in 2011. Our three-year program began in 2009, and the named executive officers received the entire restricted stock and options awards at the start of 2009 with one-third eligible to vest in each of 2009, 2010 and 2011 based on satisfaction of criteria determined at the start of each year’s performance period.2013.

 

Name		Grant Date (2)				Estimated Possible Payments Under Non-Equity Incentive Plan Awards (1)
																			Estimated Possible Payments Under Non-Equity Incentive Plan Awards (1)												Estimated Future Payments Under Equity Incentive Plan Awards (3)												All Other Stock Awards (4)				All Other Option Awards (5) #				Exercise Price of Option Awards				Full Grant Date Fair Value (6)
Name		Grant Date (2)				Threshold $				Target $				Maximum $				Grant Date(2)				Threshold $				Target $				Maximum $				Threshold #				Target #				Maximum #
						135,188				270,375				540,750				5-Feb-13				144,458				288,915				577,830
W. Edward Walter			2-Feb-11				386,250				772,500				1,545,000				5-Feb-13				637,313				1,274,625				2,549,250
James F. Risoleo			2-Feb-11				193,125				386,250				772,500
																			5-Feb-13																98,706				197,411				394,818															$	2,963,438
																			5-Feb-13																																85,875			$	16.55			$	364,969
Gregory J. Larson																			5-Feb-13				225,000				450,000				900,000
																			5-Feb-13																28,967				57,929				115,854															$	869,581
																			5-Feb-13																																25,199			$	16.55				107,096
																			14-Jun-13																2,519				5,034				10,068															$	72,523
																			14-Jun-13																																2,653				17.22			$	12,336
Larry K. Harvey
Minaz B. Abji			2-Feb-11				166,088				332,175				664,350				5-Feb-13				244,625				489,250				978,500
Larry K. Harvey			2-Feb-11				135,188				270,375				540,750
Gregory J. Larson			2-Feb-11				135,188				270,375				540,750
																			5-Feb-13																39,636				79,271				158,538															$	1,189,960
																			5-Feb-13																																34,483			$	16.55			$	146,553
Struan B. Robertson																			18-Jan-13																												12,837											$	214,506
																			5-Feb-13				225,000				450,000				900,000
																			5-Feb-13																39,636				79,271				158,538															$	1,189,960
																			5-Feb-13																																34,483			$	16.55			$	146,553
Elizabeth A. Abdoo																			5-Feb-13				218,875				437,750				875,500
																			5-Feb-13																25,915				51,829				103,657															$	778,033
																			5-Feb-13																																22,546			$	16.55			$	95,821

 

(1)

As described under “2009–2011 Program—Design and Structure—Annual“Annual Cash Incentive” in the CD&A, these are amounts that may be earned based on the financial performance of the Company, which is measured by Adjusted FFO and ROIC, and on the personal performance by each executive on objectives approved by the Compensation Policy Committee. Mr. Walter has an incentive target of 100%150% of base salary earned in the calendar year and executive vice presidents have an incentive target of 75%100% of base

salary earned in the calendar year. The actual amounts earned by the named executive officers in 20112013 are reflected in the Summary Compensation Table under the column “Non-Equity Incentive Plan Compensation” and are described in the CD&A under “Compensation Determinations in 2011—“2013 Compensation Results—Annual Cash Incentive.”

 

(2)	The grant date shown is the date that the Compensation Policy Committee approved the personal performance objectives offor each named executive officer and approved the financial metrics for Company performance, Adjusted FFO and ROIC.

(3)

Under our 2013 compensation program, senior management received a restricted stock award on February 5, 2013, which was eligible to vest subject entirely to performance conditions. Mr. Larson received an additional award of restricted stock on June 14, 2013 in connection with his promotion to Chief Financial Officer. The performance conditions are the satisfaction of corporate performance objectives and personal performance objectives (“Performance-based Awards”) and the results of the Company’s annual total stockholder return (“Market-based Awards”) compared against three indices, the NAREIT Equity Index, the Lodging Index, and the S&P Index. Dividends accrue on the shares, but are not paid unless the shares vest and are released.

(4)	Mr. Robertson received a grant of restricted stock as a signing bonus when he joined the Company on January 18, 2013. One third of the shares vested on January 18, 2013 and the remaining shares will vest one-third in 2014 and one-third in 2015 based on continued employment with the Company.

(5)	Options that were awarded on February 5, 2013 vested December 31, 2013. Mr. Larson received an additional award of options on June 14, 2013 in connection with his promotion to Chief Financial Officer that also vested December 31, 2013.

(6)

The amounts reflect the grant date fair value of restricted stock awards and stock options calculated in accordance with FASB ASC Topic 718. For information on the assumptions used in calculating the fair value of stock options, see “Note 8—Employee Stock Plans—Stock Option Awards” in the Notes to Condensed Consolidated Financial Statements in our 2013 Annual Report on Form 10-K. See footnote 2 to Summary Compensation Table for the calculation of the grant date fair value of the restricted stock awards.

								EXECUTIVE OFFICER COMPENSATION

Outstanding Equity Awards at Fiscal Year End 20112013

The following table summarizes all the equity awards made to the named executive officers that were outstanding as of December 31, 2011.2013.

 

		Option Awards (1)																																Option Awards(1)																				Stock Awards(2)
Name		Grant Date				Number of Shares Underlying Unexercised Options Exercisable				Number of Shares Underlying Unexercised Options Unexercisable				Option Exercise Price				Option Expiration Date						Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested (2)						Equity Incentive Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested				Grant Date				Number of Shares Underlying Unexercised Options Exercisable #				Number of Shares Underlying Unexercised Options Unexercisable				Option Exercise Price				Option Expiration Date				Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have not Vested				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested
W. Edward Walter			5-Feb-09 14-May-09				122,935 251,153				—   —			$ $	5.075 8.018	(3)			5-Feb-19 14-May-19						176,549					$	—  (5)				20-Jan-12				48,979				—			$	16.23				20-Jan-22				—				—
			25-Aug-09																						707,567	(4)				$	7,661,221(6)				5-Feb-13				85,875				—			$	16.55				5-Feb-23				394,818			$	6,076,264	(3)
James F. Risoleo			5-Feb-09 14-May-09				—   177,900				—   —			$ $	5.075 8.018	(3)			5-Feb-19 14-May-19						125,054					$	—  (5)
Gregory J. Larson																																			20-Jan-12				14,372				—			$	16.23				20-Jan-22				—				—
			25-Aug-09																						501,196	(4)				$	5,426,706(6)				5-Feb-13				25,199				—			$	16.55				5-Feb-23				115,854			$	1,783,017	(3)
																																			14-June-13				2,653				—			$	17.22				14-June-23				10,068			$	154,956	(3)
Larry K. Harvey(5)																																			—				—				—				—				—				—				—
Minaz B. Abji			5-Feb-09 14-May-09				47,023 96,066				—   —			$ $	5.075 8.018	(3)			5-Feb-19 14-May-19						67,531					$	—  (5)				20-Jan-12				19,667				—			$	16.23				20-Jan-22				—				—
			25-Aug-09																						270,645	(4)				$	2,930,437(6)				5-Feb-13				34,483				—			$	16.55				5-Feb-23				158,538			$	2,439,914	(3)
Struan B. Robertson																																			18-Jan-13				—				—				—				—				8,558			$	166,368	(4)
																																			5-Feb-13				34,483				—			$	16.55				5-Feb-23				158,538			$	2,439,914	(3)
Larry K. Harvey			5-Feb-09 14-May-09				40,466 82,671				—   —			$ $	5.075 8.018	(3)			5-Feb-19 14-May-19						58,114					$	—  (5)
Elizabeth A. Abdoo																																			20-Jan-12				12,859				—			$	16.23				20-Jan-22				—				—
			25-Aug-09																						232,908	(4)				$	2,521,833(6)				5-Feb-13				22,546				—			$	16.55				5-Feb-23				103,657			$	1,595,285	(3)
Gregory J. Larson			5-Feb-09 14-May-09				0 37,150				—   —			$ $	5.075 8.018	(3)			5-Feb-19 14-May-19						52,228					$	—  (5)
			25-Aug-09																						209,323	(4)				$	2,266,462(6)

 

(1)

OptionAll option awards vest based on continued service with the Company and have a 10-year life from the date of grant. Options granted on February 5, 2009January 20, 2012 vested December 31, 2009.2012. Options issued on May 14, 2009 were for the two-year period, 2010-2011, and 50%granted in 2013 vested at year-end December 31, 2010 with the remaining 50% vested at year-end December 31, 2011.2013.

 

(2)

UnderThe number of shares under this column includes all shares awarded under our 2013 compensation program, senior management received the entire restricted stock award in 2009 at the start of the three-year period, 2009-2011, with one-thirdwhich are eligible to vest in each year subject entirely to performance conditions. The performance conditions which are established at the startsatisfaction of each respective single-yearcorporate performance period.objectives and personal performance objectives (“Performance-based Awards”) and the results of the Company’s annual total stockholder return (“Market-based Awards”) compared against three indices, the NAREIT Equity Index, the Lodging Index, and the S&P Index. The award reflecteddetermination of whether and to what extent those measures were satisfied was made by the Compensation Policy Committee in February 2009 was made under the stockholder-approved 1997 Plan for performance year 2009. The award reflected in August 2009 was made under the stockholder-approved 2009 Comprehensive Stock and Cash Incentive Plan for performance years 2010-2011. The three annual performance measures are

achievement of personal performance objectives (Performance-based),

the Company’s relative stockholder performance against the NAREIT Equity Index (NAREIT TSR), and

the Company’s relative stockholder performance against the Lodging Index (Lodging TSR).

The determination of whether and to what extent those measures are satisfied is made by the Compensation Policy Committee, generally in February of the year following the performance.

The shares that are shown as “unearned” with a grant date of February 2009 reflect shares that did not vest in 2009 because the Company did not achieve performance at the “high” level (at which all shares vest) on the comparative stockholder return measure for each of the NAREIT TSR and Lodging TSR in that year. The Company’s performance in 2009 on NAREIT TSR was above “target” and its performance on the Lodging TSR was below “threshold” (at which no shares vested). These shares could have been earned in the final year of the program, which was 2011, only if the Company’s cumulative total stockholder performance as measured at the start of the three-year period equaled or exceeded the 75th percentile of the respective NAREIT TSR or the Lodging TSR at the end of the period (the “Cumulative TSR”). This performance was not met on either NAREIT TSR or Lodging TSR and all these shares were forfeited in 2012.

The award in this column with a grant date of August 2009 reflects shares that may be earned for performance at the “high” level on all performance measures in 2011 as well as shares remaining from 2010 as a result of the Company’s performance on the Lodging TSR, which was “above target” (not at the “high” level at which all shares would vest). As described above, these shares could have been earned in the final year of the program only if the Company’s cumulative total stockholder performance as measured at the start of the three-year period equaled or exceeded the 75th percentile of the Lodging TSR at the end of the period. This performance was not met and all these shares were forfeited. In addition, as a result of a stock dividend paid December 18, 2009, the number of shares were adjusted pursuant to the anti-dilution provisions in the 2009 Comprehensive Stock and Cash Incentive Plan and the award agreement.

(3)

Options were granted at the fair market value on the date of grant, May 14, 2009, which was $8.19. As a result of the stock dividend paid December 18, 2009, the exercise price of the option and the number of options were adjusted in May 2010 pursuant to the anti-dilution provisions in the 2009 Comprehensive Stock and Cash Incentive Plan and the award agreements. The adjusted exercise price is $8.018 per share.

(4)

2014. The number of shares shown in this column reflects the totalassumes “maximum” performance and includes shares that were eligible to vest in 2011. The charts below showforfeited under the actual number of sharesreleased for each named executive officer on February 2, 2012, based on performance year 2011 (as determined by our Compensation Policy Committee in February 2012). All other shares were forfeited.

						Number of Shares Released for 2011
		Annual Performance- based				Annual Market-based; NAREIT TSR				Annual Market-based; Lodging TSR				Total shares released				Market value of shares at December 31, 2011(a)
W. Edward Walter			229,115				—				112,184				341,299			$	5,078,529
James F. Risoleo			153,173				—				79,463				232,636				3,461,624
Minaz B. Abji			81,484				—				42,910				124,394				1,850,983
Larry K. Harvey			76,265				—				36,927				113.192				1,684,297
Gregory J. Larson			67,780				—				33,188				100,968				1,502,404

(a)

The value of the shares is based on the closing price of our stock on December 31, 2011 of $14.88program.

 

(5)

As noted above in footnote (2), these “unearned” shares from 2009 were eligible to be earned at the end of December 2011 only if the Company’s cumulative TSR over the three-year period 2009-2011 met or exceeded the 75th percentile for each of the NAREIT Equity Index and the Lodging Index. Based on cumulative performance through December 31, 2011, no shares vested based on the cumulative NAREIT Equity Index TSR or the Lodging Index TSR, and therefore, there is no value attributable to the shares.

(6)(3)

The value is calculated based the closing price of our stock on December 31, 20112013 of $14.88$19.44 multiplied by the vesting of shares attributable to (i) corporate and personal performance measures and the Lodging TSR measure at the “high” level of performance based on our 20112013 performance results, which were “above target” on each of these measures, and (ii) the NAREIT TSREquity measure at the “high” level of performance based on 2013 result, which was “above target,” (iii) the Lodging Index measure at the “threshold” level of performance based on our 20112013 result, which was “below threshold”. It does not include and (iii) the S&P Index measures at “target” level of performance based on our 2013 result which was “above threshold”.

(4)

Mr. Robertson received an award of 12,837 shares remaining from 2010 as a resultsign on bonus when he joined the Company. This is a time-based award that vests over three years. The value is calculated on the closing price of our stock on December 31, 2013 of $19.44 multiplied by the unvested shares.

(5)

No awards are reflected because under the Company’s Severance Policy, Mr. Harvey’s restricted stock award vested at the “target” level of performance and all options vested on July 31, 2013, the Lodging TSR in that year. These shares, which remained becausedate Mr. Harvey’s employment with the Company performed at the “above target” level in 2010 (not at the “high” level at which all shares would vest), could be earned in the final year of the program only if the Company’s cumulative total stockholder performance as measured at the start of the three-year period equaled or exceeded the 75th percentile of the Lodging TSR at the end of the period. This performance was not met and all theseended. All other shares were forfeited. The number of shares attributable to the 2010 Lodging TSR are as follows: Mr. Walter, 69,132; Mr. Risoleo, 48,970; Mr. Abji, 26,442; Mr. Harvey, 22,756; Mr. Larson, 20,452.

EXECUTIVE OFFICER COMPENSATION

Option Exercises and Stock Vested atin Fiscal Year End 20112013

The chart below shows options awards that were exercised in 20112013 and stock awards that vested in 2011.2013. The stock awards were related toshown are from performance year 2010, but did not vest until2012, which vested when the Compensation Committee made its determinations in February 2011.2013. Restricted stock that was awarded in 2013 did not vest until February 6, 2014 when the Compensation Policy Committee met and made its determinations on performance measures.

 

		Option Awards								Stock Awards								Option Awards								Stock Awards
Name		Number of Shares Acquired on Exercise				Value Realized on Exercise (1)				Number of Shares Acquired on Vesting (2)				Value Realized on Vesting (3)				Number of Shares Acquired on Exercise #				Value Realized on Exercise (1)				Number of Shares Acquired on Vesting (2) #				Value Realized on Vesting(3)
W. Edward Walter			—			$	—				492,071			$	9,329,666				251,153			$	2,412,044				163,675			$	2,703,911
James F. Risoleo			—				—				348,549				6,608,489
Gregory J. Larson																			—				—				47,580				786,022
Larry K. Harvey(4)																			—				—				52,941				874,585
Minaz B. Abji			—				—				190,186				3,605,927				—				—				64,495				1,065,457
Larry K. Harvey			—				—				158,582				3,006,715
Gregory J. Larson			43,517				437,906				145,571				2,760,026
Struan B. Robertson																			—				—				—				—
Elizabeth A. Abdoo																			68,805				707,453				43,198				713,631

 

(1)	Represents the amounts realized based on the difference between the market price of our stock on the date of exercise and the exercise price.

 

(2)	These are shares that were released on February 3, 2011,6, 2013, the date that the Compensation Policy Committee determined the results on Performance-based awards and Market-based awardsperformance measures for performance year 2010.2012.

 

(3)	The value realized on vesting is determined by multiplying the shares released by $18.96,$16.52, the closing price of the Company’s common stock on the date of release, which was February 3, 2011.6, 2013.

(4)	Mr. Harvey’s employment with the Company ended July 31, 2013.

Nonqualified Deferred Compensation

The Company has an Executive Deferred Compensation Plan in which the named officers participate.

The following table summarizes the named executive officers’ compensation under the Executive Deferred Compensation Plan as of December 31, 2011. The aggregate balance shown includes amounts earned prior to 2011 and voluntarily deferred. 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.

The following table summarizes the named executive officers’ compensation under the Executive Deferred Compensation Plan as of December 31, 2013. The aggregate balance shown includes amounts earned prior to 2012 and voluntarily deferred.

Name		Executive Contributions in Last Fiscal Year				Company Contributions in Last Fiscal Year				Company Discretionary Contributions in Last Fiscal Year (1)				Aggregate Earnings in Last Fiscal Year				Aggregate Withdrawals/ Distributions				Aggregate Balance at Last Fiscal Year- End (1)
W. Edward Walter		$	69,545			$	35,672			$	17,836			$	22,744			$	0			$	1,332,665
James F. Risoleo			26,250				13,125				6,563				87,207			$	0				2,085,663
Minaz B. Abji			46,035				23,918				11,959				11,198			$	46,748				458,058
Larry K. Harvey			34,046				17,923				8,961				(4,087	)		$	0				364,067
Gregory J. Larson			34,323				18,062				9,031				5,354			$	0				249,160

Name		Executive Contributions in Last Fiscal Year				Company Contributions in Last Fiscal Year				Company Discretionary Contributions in Last Fiscal Year(1)				Aggregate Earnings in Last Fiscal Year				Aggregate Withdrawals/ Distributions				Aggregate Balance at Last Fiscal Year-End (1)
W. Edward Walter		$	136,907			$	51,471			$	51,471			$	142,323			$	—			$	1,865,769
Gregory J. Larson			43,370				22,785				22,785				66,173				—				469,363
Larry K. Harvey(2)			38,658				20,429				—				32,119				—				581,902
Minaz B. Abji			52,970				27,585				27,585				84,381				41,561				665,554
Struan B. Robertson			—				—				—				—				—				—
Elizabeth A. Abdoo			46,126				24,163				24,163				99,893				—				717,296

 

(1)	Amounts reflect vested values as of December 31, 2011.2013.

(2)	Mr. Harvey’s employment with the Company ended July 31, 2013.

								EXECUTIVE OFFICER COMPENSATION

Under the Executive Deferred Compensation Plan, participants may defer any portion of their base salary or any amounts awarded under the annual cash incentive award program. Participants direct their deferrals into investment funds, which are substantially the same funds available for investment under the 401(k) Plan. Participants’ accounts may or may not appreciate, and may depreciate, depending on the performance of their investment choices. The Company does not guarantee any returns and none of the investment choices provide interest at above-market rates. The Company matches $.50 of each $1.00 deferred, up to a maximum of 6% of the participant’s compensation less the amount credited to the 401(k) Plan. The Company may provide an annual discretionary matching contribution of up to $.50 on each $1.00 deferred up to 6% of the participant’s compensation.

Participants fully vest in Company contributions after four years of continued employment. The vesting schedule is 25% vesting after one year; 50% vesting after two years; 75% vesting after three years and 100% vesting after four years or more. All named executive officers are fully vested. Company contributions are fully vested (100%) for distributions related to normal retirement, death, disability and change of control.

The Executive Deferred Compensation Plan offers automatic lump sum distributions upon death or disability. The participant may elect to receive lump sum or installment distributions upon separation from service, or with respect to his or her deferrals only (no Company contributions) on such other dates certain that a participant may elect. Such elections are made at the time the participant elects to defer compensation for a year. However, “key employee” distributions payable upon separation from service will be delayed for six months. Participants may also elect to receive a lump sum distribution of their account in the event of change in control. Plan assets are held in a rabbi trust.

Potential Severance and Change in Control Payments

Severance

The Company has a severance plan forthat applies to all senior executives in the United States, which was adopted in 2003 and provides severance benefits2003. Severance is provided on a consistent basis. ThisThe plan provides for benefits in the event of a senior executive’s death or disability, or where a senior executive leaves the Company under the following circumstances:

 

As a result of a termination without “cause”. “Cause” is defined broadly to include failure to perform assigned duties in a reasonable manner, or as a result of incompetence or neglect; engaging in any act of dishonesty or bad faith with respect to the Company or its affairs; committing any act that reflects unfavorably on the executive or the Company; or engaging in any other conduct that in the reasonable judgment of the Board justifies termination.

 

As a result of a voluntary termination by the executive for “good reason”. “Good reason” means that there has been a material diminution in such executive’s authority, duties or responsibilities; a material diminution in an executive’s overall compensation opportunity; or a material change in the geographic location at which an executive is required to perform his or her duties for the Company.

An executive or member of senior management who is terminated for cause or who voluntarily leaves without good reason is not entitled to any benefits under the Severance Plan.