SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
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CEDAR REALTY TRUST, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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2017 Proxy Statement
and
Notice of Annual Meeting
March 23, 2017April 27, 2020
Dear Fellow Stockholders:To my fellow shareholders:
Please join meI write this letter while the country is in the throes of theCOVID-19 pandemic with our employees all working remotely, more than half our tenant businesses closed and the Boardeconomy essentially frozen. While managing through this surreal time, Team Cedar continues to work with seriousness of Directors at our 2017 Annual Meetingpurpose and heightened focus as we endeavor to navigate the company through this incredibly challenging time. In thinking of Stockholders,how to contextualize this unprecedented situation, I have looked to the 1918 flu pandemic and resulting economic and cultural prosperity.
The flu pandemic of 1918 started in January 1918 and lasted until December 1920 during which will be held on Tuesday, May 2, 2017, at our offices in Port Washington, New York. The business we will conducttime it infected 500 million people, a quarter of the world’s population at the meetingtime, killing up to 100 million. Between 500,000 and 675,000 Americans died as a result of this pandemic (more than double the current projections forCOVID-19) at a time when the US population was less than 1/3 of what it is describedtoday. This period was followed immediately by what is known as the roaring 20s or the Jazz Age.
The roaring 20s was one of our country’s greatest periods of advancement in terms of economic prosperity, gender equality, ingenuity and invention (major advances in the attached Noticeautomobile, aviation, radio and cinema were all made in this era). America of Annual Meetingthe 1920s was remarkably carefree and alive. The country was recovering from World War I and was ready to start living again.
Although the term pandemic is not new to our language, I will concede prior to March 2020, I think I had only used it in connection with a movie I didn’t particularly want to see. Writing this shareholder letter one month removed from the arrival of StockholderstheCOVID-19 pandemic into our lives, we are suddenly living in a world that feels like it is right out of a movie with people quarantined in their homes and Proxy Statement.hospitals overrun with casualties. There are days when it is difficult to separate our present surreal existence from Hollywood fantasy.
As a retail landlord, Cedar is at the epicenter of the business correction that has resulted from this national health crisis, with roughly half of our tenants closed at this time or operating a strictlytake-out business. We worked hardare, of course, gratified that our grocery-anchored model has proven its resilience with our grocer anchors providing a critical resource to the community and experiencing a corresponding spike in 2016sales. Nonetheless, the overall operating environment for us, like that of most retail landlords, is stressed.
Many of our smaller tenants are closed due to continuegovernmental directives and will find it difficult to pay rent until they are permitted to reopen. This in turn creates uncertainty for us in terms of our cash flow and earnings. That said, our commitment to our stockholders.tenants and our communities is one of our core principles, and our mission is to preserve as much of our tenant base as possible during this challenging time.
At Cedar, there has been a silver lining in all of this which is that a business scenario I could never have simulated has allowed me to observe the mettle and professionalism of my colleagues. From ourC-suite executives to our
asset management analysts to our property managers and throughout the organization, our team has rolled up their sleeves and attacked this challenge with impressive gusto, energy and creativity. Thecan-do attitude of my Team Cedar colleagues truly exemplifies the best of the American spirit of resilience and optimism.
I imagine this resembles the mindset of our forebears of 100 years ago as they picked themselves up from the scourge of the 1918 flu pandemic to dance and swing to the new Jazz Age music that was to define their generation. Just as the flu pandemic of 1918 gave way to a period of dramatic growth and innovation in our country, we can derive strength from the lesson of history that better times lie ahead.
Our country is one of fighters and survivors. We welcomeare optimists and innovators. We live in the greatest country in the world because of its fearless people and growth-oriented culture. I, for one, am excited to see how we take the lessons of this experience to grow, adapt and come out even stronger.
At Cedar, I have had the opportunity to present youobserve the American spirit shine bright in my colleagues. As the leader of this outstanding group of people, I have been humbled to see how they have risen up in the face of adversity. As a shareholder, I am excited to see what the next chapter holds with the information contained in this Proxy Statement and we hope that, after you review it, you will vote at the meeting (either in person or by proxy) in accordance withoutstanding group giving their all for our Board of Directors’ recommendations.
Your vote is important. Whether or not you plan to attend the meeting, please vote your shares as soon as possible electronically through the Internet, by telephone, or by completing, signing and returning the enclosed proxy card. If you vote electronically or by telephone, you do not need to return the enclosed proxy card. More detailed instructions on how to vote are provided onpages 8-10 of the Proxy Statement.
Our Board of Directors greatly appreciates your investment, confidence, and continued support.success.
Sincerely, |
BRUCE J. SCHANZER |
President and Chief Executive Officer |
CEDAR REALTY TRUST, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 2, 201727, 2020
NOTICE IS HEREBY GIVEN that the Annual MeetingThe annual meeting of Stockholdersstockholders (the “Annual Meeting”) of Cedar Realty Trust, Inc. (the “Company”) will be held at the offices of the Company, 44 South Bayles Avenue, Port Washington, NY 11050, on Tuesday,Wednesday, May 2, 201727, 2020, at 10:00 a.m. Eastern Time. Depending on developments surrounding the coronavirus(COVID-19) pandemic and to support the health and well-being of our stockholders, employees and partners, we might choose to hold a virtual Annual Meeting instead of a physical Annual Meeting. If that were to happen, we will publicly announce the decision to hold a virtual Annual Meeting in a press release available atwww.cedarrealtytrust.com as soon as practicable before the morningAnnual Meeting. In that event, the Annual Meeting will be conducted solely virtually, on the above date and time, via live audio webcast. You or your proxyholder can participate and vote at the virtual Annual Meeting by visitingwww.virtualshareholdermeeting.com/CDR2020 and using your16-digit control number.
The Annual Meeting will be held for the following purposes:
1. | To elect the seven |
2. | To approve the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, |
3. | To vote |
In addition, stockholders will transact any other business that properly comes before the meetingAnnual Meeting or any adjournment thereof.
The Company recommendsand the Board of Directors of the Company recommend a vote “FOR” proposals 1, 2 3 and 5 and for every “1 YEAR” on proposal 4.3. You should carefully review the accompanying Proxy Statement which contains additional information.
StockholdersOnly holders of record inof our common stock at the close of business on March 10, 2017 shall beApril 20, 2020 are entitled to notice of, and to vote at, the meeting.Annual Meeting.
THE PROXY STATEMENT AND OUR 20162019 ANNUAL REPORT ARE AVAILABLE AT
HTTP://WWW.CEDARREALTYTRUST.COM.
Sincerely, |
ADINA G. STORCH, ESQ. |
Executive Vice President, General Counsel and Corporate Secretary |
Dated: March 23, 2017April 27, 2020
Port Washington, NY
IMPORTANT: WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE FILL IN, DATE, SIGN AND PROMPTLY MAIL
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20172020 Proxy Statement | i
TABLE OF CONTENTS
ii | 20172020 Proxy Statement
PROXY STATEMENT EXECUTIVE SUMMARY
The following is a summary which highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information you should consider, and you are urged to read the entire Proxy Statement carefully before voting.
Information About Our 20172020 Annual Meeting of Stockholders
DATE AND TIME: | ||
PLACE: | 44 South Bayles Avenue, Port Washington, NY 11050 or, if held solely virtually, by visitingwww.virtualshareholdermeeting.com/CDR2020 and using16-digit control number | |
RECORD DATE: |
ItemItems of Business and Board of Directors Vote Recommendations
Proposal | Board Vote Recommendation | |||||
| Page Number | |||||
Proposal 1: | To elect seven directors to serve until the next annual meeting of stockholders or until | ✓ FOR | 11 | |||
Proposal 2: | To ratify the appointment of Ernst & Young LLP to serve as independent registered public accounting firm for the year ending December 31, | ✓ FOR | ||||
| 53 | |||||
Proposal 3: | Advisory vote(non-binding) to approve the compensation of our named executive officers as disclosed in this Proxy Statement | ✓ FOR | ||||
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54
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Our Director Nominees (Page 11)
Name | Age | Director Since | Independent | AC | CC | N/ CGC | Age
| Director Since
| Independent
| AC
| CC
| N/CGC
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Abraham Eisenstat | 47 | 2015 | Yes | |||||||||||||||||||||||||
Abraham Eisenstat(1)
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| 2015
| Yes
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Gregg A. Gonsalves(1) | 49 | 2017 | Yes |
| 52
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| 2017
| Yes
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Pamela N. Hootkin | 69 | 2008 | Yes | C | ||||||||||||||||||||||||
Paul G. Kirk, Jr. | 79 | 2010 | Yes | C | ||||||||||||||||||||||||
Steven G. Rogers | 62 | 2016 | Yes | C | ||||||||||||||||||||||||
Pamela N. Hootkin(1)
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| 2008
| Yes
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Sabrina L. Kanner
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| 2018
| Yes
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Steven G. Rogers(1)
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| 2016
| Yes
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Bruce J. Schanzer(2) | 48 | 2011 | No |
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| 2011
| No
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Roger M. Widmann(3) | 77 | 2003 | Yes |
| 80
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| 2003
| Yes
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(1) | Audit |
(2) | President and Chief Executive Officer |
(3) | Chairman of the Board |
KEY: AC = Audit Committee CC = Compensation Committee
N/CGC = Nominating/Corporate Governance Committee = Member C = Chair
20172020 Proxy Statement | 1
Information About Our Board and Committees (Pages 11, 20)22)(1)
Number of Members
| Independent
| Number of Meetings During 2019(2)
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Number of Members(1) | Independent | Number of During 2016 | ||||||||||||
Full Board of Directors | 7 | 85.7 | % | 11 | 7
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Audit Committee(2) | 4 | 100.0 | % | 5 | ||||||||||
Audit Committee
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| 100.0%
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Compensation Committee | 3 | 100.0 | % | 7 | 4
| 100.0%
| 5
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Nominating/Corporate Governance Committee(2) | 5 | 100.0 | % | 5 | ||||||||||
Nominating/Corporate Governance Committee
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| 100.0%
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(1) | As of |
(2) | Includesin-person and |
Our Corporate Governance (Page 16)(1)
We structure our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable featuresPlease refer to the table on page 16 of this Proxy Statement for a more detailed description of our corporate governance include:practices.
WHAT WE DO: | WHAT WE DON’T DO: | |
✓ | X No Hedging of Our
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✓ Continuously Improve Board Diversity | X No Pledging of Our Securities | |
✓Extend Important Rights to Shareholders, Such as Ability to Amend OurBy-Laws | X No Related Party Transactions | |
✓ Caps on Director Pay | X No Poison Pill | |
✓ Independent | X No Excessive Perquisites, No TaxGross-Ups on Perquisites and No Contractual TaxGross-Ups on Golden Parachutes | |
✓ Majority Voting for Directors in Annual Uncontested Elections | X No Classified Board | |
✓ Regular Board | XNo Undue Restrictions on Stockholder Rights | |
✓ Frequent Stockholder Engagement
| XNo | |
✓
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✓
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✓
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(1) | As of April 20, 2020. |
2 |2020 Proxy Statement
Corporate Social Responsibility (Page 57)
We embrace responsible environmental and social stewardship, as well as corporate governance, as an essential part of our mission to build a sustainable business and to shape the communities we serve throughout our portfolio, in addition to our workplace community. At Cedar, we believe we can “do well by doing good.”
Below are some highlights of our commitment to Environmental, Social and Governance principles:(1)
Environmental | Social | Governance | ||
◆Installation of roof solar panel systems at three shopping centers, with an additional three centers near completion for 2020 | ◆Focus on enhancing diversity with two women on the Board and directors representing a diversity of skills and background | ◆Amendment ofby-laws and charter to enable stockholders to act to amendby-laws | ||
◆25 parking lot and canopy conversions to LED lighting | ◆Women comprise half ofmid-level managers andone-third of top executive leadership | ◆Annual election of directors by majority vote in uncontested elections, with no classified Board | ||
◆Installation of waste recycling at 27 additional shopping centers | ◆Sponsorship of social programs in underserved communities such as “Art All Night,” inner city mobile art galleries, and donations of backpacks and school supplies to residents of our communities | ◆Majority independent Board and entirely independent Board committees, with four new independent directors appointed in the last five years | ||
◆Installation of two electric car charging stations with another 10 scheduled for 2020 | ◆Local planning committee sponsor of REAP in New York City, a real estate associate program that fosters the entry of multicultural professionals into the commercial real estate industry | ◆Revisions to executive compensation arrangements favored by stockholders (as detailed more fully herein) | ||
◆Installation of dozens of book collection bins at our retail centers, for reuse or recycling. | ◆Donation of $85,000 grant to the Jackie Robinson Foundation to support six entering college students from Ward 7 in Washington, D.C., covering fiveone-year scholarships to participate in the Foundation’s new impact program, and a newly created JRF Cedar Realty Trust Scholarship to provide four-year financial assistance and curriculum support to annual recipient | ◆ Aligned executive pay with performance through our annual and long-term incentive plans |
(1) | As of December 31, 2019. |
Independent Registered Public Accounting Firm (Page 49)53)
Ernst & Young LLP, independent registered public accounting firm, served as our auditors for fiscal year 2016.2019. Our Audit Committee has selected Ernst & Young LLP to audit our financial statements for fiscal year 2017.2020. Although it is not required to do so, the Board is submitting the Audit Committee’s selection of our independent registered public accounting firm for ratification by the stockholders at the
2020 Proxy Statement| 3
Annual Meeting in order to ascertain the view of our stockholders regarding such selection. Below is summary information about Ernst & Young’s fees for services during fiscal years 20162019 and 2015:2018:
Description of Services | 2016 | 2015 | 2019 ($)
| 2018 ($)
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Audit Fees | $ | 884,000 | $ | 795,000 | ||||||||||||
Audit Fees(1)
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| 809,800
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| 874,500
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Audit-Related Fees | — | — |
| —
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| —
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Tax Fees | — | — | ||||||||||||||
Tax Fees(2)
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| 140,405
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| 131,975
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All Other Fees | — | — |
| —
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TOTAL | $ | 884,000 | $ | 795,000 |
| 949,905
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| 1,006,475
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(1) | Audit Fees for 2019 and 2018 were incurred for professional services in connection with the audit of our consolidated financial statements and internal control over financial reporting for the years ended December 31, 2019 and 2018, reviews of our interim consolidated financial statements which are included in each of our quarterly reports on Form10-Q for the years ended December 31, 2019 and 2018, and certain accounting consultations. |
(2) | Tax fees for 2019 and 2018 include tax compliance and preparation, and tax consulting services related to tax planning for certain of our redevelopments. |
2019 Performance Highlights
2017 Proxy Statement| 3National Association of Real Estate Investment Trusts (“NAREIT”)-defined funds from operations (FFO) of $0.46 per diluted share for the year
Operating funds from operations (Operating FFO) of $0.45 per diluted share for the year
Signed 169 new and renewal leases for 1,742,100 square feet for the year
Total portfolio 93.2% leased and same-property portfolio 93.2% leased atyear-end
$95.6 million available under our line of credit as of December 31, 2019 and no debt maturing until February 2021
Executive Compensation Matters (Page 50)29)
We are requesting your non-binding vote to approve the compensation of our named executive officers as described on pages 26 through 45 of this Proxy Statement. The goals forof our executive compensation program are to:
attract, retain and motivate effectivetalented executive officers,officers;
align the interests of our executive officers with the interests of the Company and our stockholders,stockholders;
incentivize our executive officers based on clearly defined performance goals and measures of successful achievement,achievement; and
align market competitive compensation with our short-termshort- and long-term performance.
Our Compensation Committee determines the form and amount of compensation, as well as the overall structure of our executive compensation program. The Compensation Committee has the sole authority to retain and terminate any compensation consultants used to assist in establishing compensation for our executive officers and to approve such consultants’ fees and other retention terms. The Compensation Committee has engaged Mercer (US) Inc. (“Mercer”), a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”), as its independent compensation consultant.
The Compensation Committee’s compensation decisions for 2019 described in this Proxy Statement were made before the onset of the coronavirus pandemic. Our executive compensation for 2019 was built on a purposeful foundation of corporate governance and desire to emulate best market practices. The Committee will continue to monitor the impact of coronavirus on the design of our executive
4 |2020 Proxy Statement
compensation programs. In 2019, our CEO’s base salary was reduced by $50,000 or 6.25%, consistent with the terms of his employment agreement. As a reflection of the enlargement of the scope of her role with respect to redevelopment projects, we increased our COO’s base salary by $36,000, or 9%. Our CFO’s base salary remained constant as compared with 2018.
Annual bonus incentive was determined based on a combination of Company and individual performance: 70% of each executive’s bonus was determined based on the Company’s achievement of its Operating FFO target of $0.45, which corresponded to 100% of the Company-performance based portion of the annual bonus incentive (after taking into account bonus payouts in the calculation of Operating FFO), and 30% was based on qualitative individual performance evaluations for each of those executives, which were awarded at 100% of the individual-performance based portion of the annual bonus incentive. For 2019, the annual bonuses determined by the Compensation Committee to be awarded to our CEO, CFO and COO, respectively, amounted to $750,000, $380,000 and $414,200.
We believe that awarding senior executives a significant amount of their compensation in the form of equity incentive awards aligns them with stockholders and best accomplishes desired alignment between pay and performance and ensures that management’s incentives are geared toward long-term stockholder value creation. Based on average total shareholder return for the measurement period ending in 2019, Company-performance based LTIP grants for eligible senior executives were not earned or awarded. Only the portion of long-term equity awards based on individual performance were awarded in 2019.
Please refer to the table on page 30 of this Proxy Statement for a more detailed description of our compensation policies and programs.
Say-on-Pay Responsiveness (Page 32)
We give our stockholders an annual vote on our executive compensation program and are requesting your support for the compensation of our named executive officers as described on pages 29 through 49 of this Proxy Statement. This is primarily comprised of a mix of base salary, short-term cash incentive compensation and long-term equity incentive compensation, and is determined basedan advisory vote, so the results will not be binding on the consideration of a number of factors described in more detail inCompany, but the section entitled, “Compensation DiscussionBoard and Analysis — Executive Summary.”
Our compensation policies and programs are built upon the strong foundation of corporate governance and compensation best practices, including:
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The key components of our named executive officers’ compensation are described in more detail inCompensation Committee will consider the following table:
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Our stockholders have consistently supported our executive compensation program. At our 2016 Annual Meeting of Stockholders, the stockholders voted to approve our resolution seeking advisory approvaloutcome of the compensationvote as part of our namedits ongoing review of executive officers. While wecompensation.
We have consistently had solid stockholderhistorically enjoyed a high level of shareholder support for our executive compensation program,program. However, the results of last year’s shareholder voting indicated that we continueneeded to engage in dialogue withdevote additional consideration to our stockholders’ concerns.
20172020 Proxy Statement | 5
stockholders onWe conducted a particularly active campaign of shareholder engagement in order to better understand the voting feedback we received, and endeavored to make responsive changes to what we heard. The focus of shareholder concerns with respect to compensation centered around:
Triggering conditions for cash severance upon a Change in Control
Length of contract terms
Rationale for choice of performance metrics
In direct response to shareholders’ concerns, we made the following modifications to our executive compensation issues. As an example, in response to valued feedback received from our stockholders, we amended our named executive officer employment agreements in 2016 to remove “modified single-trigger” cash severance provisions and to provide for satisfaction2019:
Perpetuation of “double trigger” conditionscondition for payment of cash severance following a changeChange in control. In addition,Control in new COO employment agreement, a modification previously introduced in response to constructive stockholder feedback
Reduced the term and performance measurement period from seven to five years in recent CEO employment agreement renewal
Providing stockholders access to our stockholders, we will requireBoard and management on these issues has enabled us to clarify our rationale for the performance metrics chosen and their relationship with our compensation structure
Please refer to pages 46 of this Proxy Statement for a minimum vesting periodmore complete description of one-year applicable to all types of equity awards granted under the 2017 Stock Incentive Plan, subject to a 5% carve out, and a minimum three-year vesting period for time-based restricted stock awards.
Advisory Vote on the Frequency of Future Advisory Votes to Approve the Compensationkey features of our Named Executive Officers (Page 51)
In accordance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Company provides stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers. Under the Dodd-Frank legislation, stockholders are required to vote, on a non-binding advisory basis, on the frequency of the “say-on-pay” vote at least once every six years. Accordingly, this year the Company is providing stockholders with the opportunity to cast a non-binding, advisory vote on whether future advisory votes to approve the compensation of named executive officers should be held every one year, two years, or three years.
Since 2011, when our stockholders voted on an advisory basis in favor of annual say-on-pay votes, the Company has held such votes every year. We continue to believe that say-on-pay votes should be conducted every year so that our stockholders may annually express their views on our executive compensation program, and because it is market practice to hold annual say-on-pay votes.
Approval of the 2017 Stock Incentive Plan (Page 52)
At the Annual Meeting, stockholders will be asked to approve the Company’s 2017 Stock Incentive Plan, which was adopted by the Board of Directors on March 14, 2017, subject to stockholder approval. The 2017 Stock Incentive Plan reserves an aggregate of 4,000,000 shares for issuance and imposes an overall cap on annual per director compensation. In addition, the 2017 Incentive Plan implements numerous best-practice enhancements with respect to equity compensation.
In the event that the 2017 Stock Incentive Plan is approved, it will replace the Company’s 2012 Stock Incentive Plan, effective as of the date of such approval, whereupon no further awards will be made under the 2012 Stock Incentive Plan. In addition, the Board has determined to make awards covering no more than 50,000 shares under the 2012 Stock Incentive Plan between March 14, 2017 and the effective date of the 2017 Stock Incentive Plan, if approved, and such reserve will be used exclusively, if at all, in connection with recruitment and hiring efforts.
new COO employment contract.
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2017 Proxy Statement| 7
PROXY STATEMENT
CEDAR REALTY TRUST, INC.
44 SOUTH BAYLES AVENUE SUITE 304
PORT WASHINGTON, NEW YORK 11050
PROXY STATEMENT
We are sending you this Proxy Statement in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Cedar Realty Trust, Inc., a Maryland corporation (the “Company”),the Company, for use at the 20172020 Annual Meeting of Stockholders (“Annual Meeting”) or any adjournment thereof. The Company’s Annual Report to Stockholders for the fiscal year ended December 31, 20162019 is being mailed herewith to each stockholder of record.Stockholders may obtain a copy of the Company’s 20162019 Annual Report on Form10-K, without charge, by writing to the Company at 44 South Bayles Avenue, Port Washington, New York 11050, Attention: Investor Relations. The 20162019 Annual Report on Form10-K is also available on the Company’s website,www.cedarrealtytrust.com.
It is intended thatWe intend to first send this Proxy Statement and form of Proxy will first be sent or givenaccompanying materials to stockholders on or about March 14, 2017.April 27, 2020.
When and where is the Annual Meeting?
If the Annual Meeting is held as a physical meeting:
The Company’s 2017 Annual Meeting of Stockholders will be held on Tuesday,Wednesday, May 2, 201727, 2020 at 10:00 a.m. local timeEastern Time at 44 South Bayles Avenue, Port Washington, New York 11050.
If the Annual Meeting is held as a virtual meeting:
Depending on developments surrounding the coronavirus(COVID-19) pandemic and to support the health and well-being of our stockholders, employees and partners, we might choose to hold a virtual annual meeting instead of a physical annual meeting. If that were to happen, the Annual Meeting will be held on Wednesday, May 27, 2020 at 10:00 a.m. Eastern Time via live audio webcast atwww.virtualshareholdermeeting.com/CDR2020.
To attend the virtual Annual Meeting, log in atwww.virtualshareholdermeeting.com/CDR2020 by using your unique16-digit control number, which appears on the Notice and the proxy card, voting instruction form, or e-mail transmitting proxy materials, or, if you are a beneficial owner who did not receive a control number, may be obtained upon request to the broker, bank or other nominee that holds your shares. You will also need your16-digit control number to vote at the virtual Annual Meeting.
As part of the virtual Annual Meeting, we will hold a live question and answer session, during which we intend to answer questions submitted during the Annual Meeting that are pertinent to the Company and the Annual Meeting matters, as time permits. Questions and answers will be grouped by topic and substantially similar questions will be grouped and answered once.
What is the purpose of the Annual Meeting?
At the Annual Meeting, stockholders will consider and vote on the following proposals:
1. | To elect the seven |
2. | To approve the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, |
3. | To vote |
2020 Proxy Statement| 7
PROXY STATEMENT
In addition, stockholders will transact any other business that properly comes before the Annual Meeting or any postponement or adjournment thereof.
Who is entitled to vote?
Only stockholders of record at the close of business on the record date March 10, 2017,(April 20, 2020) are entitled to notice of and to vote at the Annual Meeting. Stockholders are entitled to cast one vote for each share held by them on each matter to be voted upon.
Who can attend the Annual Meeting?
All holders of common shares of the Company at the close of business on April 20, 2020, the record date for the Annual Meeting, or their duly appointed proxies, are authorized to attend the Annual Meeting. Cameras, recording devices and other electronic devices will not be permitted for use at the Annual Meeting other than by the Company.
Please also note that if you hold your shares in “street name” (that is, through a bank, broker or other nominee), you will need to present a copy of the brokerage statement reflecting your share ownership as of April 20, 2020, or other proof of ownership.
What constitutes a quorum?
On March 10, 2017,the record date of April 20, 2020, the Company had 85,541,20789,327,100 shares of common stock outstanding and entitled to vote with respect to all matters to be acted upon at the meeting. Each holder of common stock is entitled to one vote for each share of stock held by such holder. The presence of holders representing a majority of all the votes entitled to be cast at the meetingAnnual Meeting will constitute a quorum at the meeting.Annual Meeting. In accordance with Maryland law, abstentions, but not brokernon-votes, are counted for purposes of determining the presence or absence of a quorum for the transaction of business.
How do I vote?
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered the stockholder of record with respect to those shares and the proxy notice was sent directly to you by us. In that case, you may instruct the proxy holders named in the enclosed proxy card (the “Proxy Agents”) how to vote your common shares in one of the following ways:
Vote via the Internet: You can vote via Internet by following the instructions on the enclosed proxy card or voting instruction form.
Vote by Telephone: You can vote by telephone by following the instructions on the enclosed proxy card or voting instruction form.
Vote by Regular Mail: You can vote by mail by signing and dating the enclosed proxy card or voting instruction form and returning it in the postage-paid envelope provided with this Proxy Statement.
• | Vote Online (if the Annual Meeting is held as a virtual meeting): You may vote online by attending the virtual Annual Meeting and following the instructions posted atwww.virtualshareholdermeeting.com/CDR2020. You will need your unique16-digit control number, which appears on the Notice and the proxy card, voting instruction form, or e-mail transmitting proxy materials, or, if you are a beneficial owner who did not receive a control number, may be obtained upon request to the broker, bank or other nominee that holds your shares. |
Proxies submitted over the Internet, by telephone or by mail must be received by 11:59 p.m. EDT on Tuesday, May 26, 2020.
8 | 20172020 Proxy Statement
PROXY STATEMENT
If you vote by telephone, via the Internet, or by signing, dating, and returning the enclosed proxy card, your shares will be voted at the Annual Meeting as you direct. If you sign the enclosed proxy card but do not specify how you want your shares to be voted, they will be voted as the Board recommends.
Can I revoke my proxy?
Each proxy executed and returned by a stockholder may be revoked at any time before it is voted by timely submission of written notice of revocation or by submission of a duly executed proxy bearing a later date (in either case directedaddressed to the Secretary of the Company)Company at our corporate offices) or, if a stockholder is present at the meeting,Annual Meeting (whether held physically or virtually), he or she may elect to revoke hishis/her proxy and vote hishis/her shares personally. Votes for shares held by a bank, broker or other holder of record, may be revoked by a stockholder submitting new voting instructions to the bank, broker or other holder of record or, if a stockholder has obtained a legal proxy from the bank, broker or other holder of record giving him or her the right to vote the shares at the Annual Meeting, by attending the Annual Meeting and voting in person.
What vote is required to approve each matter?
Assuming the presence of a quorum, each of Proposals 1, 2 3 and 53 must receive the affirmative vote of a majority of the shares of common stock duly present or represented by proxyvotes cast at the Annual Meeting in order to pass. Accordingly, abstentions will have the same effect as a vote against each of these proposals, while broker non-votes will not be counted in determining the outcome of any of these proposals. The proposal to approve the compensation of our named executive officers is advisory only and is not binding on the Company or the Board.
For We treat abstentions as shares that are present and entitled to vote for purposes of Proposal 4,determining the vote on the frequency of future advisory votes to approve the compensation of our named executive officers, the affirmative votepresence or absence of a plurality of the votes cast on the matter at our Annual Meeting in person or by proxy is required for approval. This means that the option receiving the greatest number of votes (every 1 year, 2 years or 3 years) will be considered the preferred frequency of the stockholders. For purposes of this proposal,quorum but abstentions and broker non-votes, if any, are not counted as votes cast and therefore will not be counted in determiningas “votes cast.” Accordingly, abstentions will have no effect on Proposals 1, 2 and 3 or any other matter that may properly be brought before the preferred frequencyAnnual Meeting or at any adjournment or postponement thereof, assuming a quorum is present.
If the proxy is submitted and voting instructions are made for some, but not all, of the stockholders. This proposal is advisory onlyproposals, as to matters in which instructions are given, the proxy will be voted in accordance with those instructions, and is not binding onfor all other proposals, the Company orproxy will be voted “FOR” as to all enumerated proposals in accordance with the Board.Board’s recommendations.
What if I hold my shares in street name?
Brokers do not have discretionary authority to vote with respect to any of the proposals, except with respect to the ratification of Ernst & Young as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2017.2020. Under the rules of the New York Stock Exchange (the “NYSE”) , the proposal to ratify the appointment of Ernst & Young LLP is considered a routine item. Accordingly, if you hold your shares in street name and you do not submit voting instructions to your broker, your broker may exercise its discretion to vote your shares on this proposal. If your broker exercises this discretion, your shares will be counted as present for purposes of determining the presence of a quorum at our Annual Meeting and will be voted in the manner directed by your broker on the proposal to ratify Ernst & Young as our independent registered public accounting firm, but your shares will constitute brokernon-votes on each of the other proposals at our Annual Meeting. On all other proposals, your broker is not permitted to vote your shares without your instructions and uninstructed shares are considered brokernon-votes. Accordingly, a brokernon-vote will not be counted in determining the outcome of the vote on these matters. If your shares are held by a broker, the broker will ask you how you want to vote your shares.
If you provide the broker with instructions, your shares will be voted in accordance with your instructions. If you do not give any instruction on any of the proposals, then with respect to the election of directors the approval of the 2017 Stock Incentive Plan, the advisory vote to approve the compensation of our named executive officers, and the advisory vote on the frequency of holding future advisory votes to approve the compensation of our named executive officers, your shares will not be voted.Therefore, it is important that you give instructions to your broker as to how to vote your shares.
20172020 Proxy Statement | 9
PROXY STATEMENT
Even if you plan to attend the Annual Meeting, we recommend that you submit the enclosed proxy to vote your shares in advance so that your vote will be counted if you later are unable to attend the Annual Meeting.
If I plan to attend the Annual Meeting, should I still vote by proxy?
Yes. Voting in advance does not affect your right to attend the Annual Meeting. If you submit the enclosed proxy card and also attend the Annual Meeting, you do not need to vote again at the Annual Meeting unless you want to change your vote. If the Annual Meeting is held as a physical meeting, written ballots will be available at the Annual Meeting for stockholders of record. If you are not a stockholder of record but hold the shares through a broker or nominee (i.e., in street name), you may vote your shares in person only if you obtain a legal proxy from the broker, trustee or nominee that holds your shares giving you the right to vote the shares. If the Annual Meeting is held as a virtual meeting, you may vote online atwww.virtualshareholdermeeting.com/CDR2020. You will need your unique16-digit control number, which appears on the Notice and the proxy card, voting instruction form, or e-mail transmitting proxy materials, or, if you are a beneficial owner who did not receive a control number, may be obtained upon request to the broker, bank or other nominee that holds your shares. Even if you plan to attend the Annual Meeting, whether held physically or virtually, we recommend that you also submit your proxy or voting instructions prior to the Annual Meeting as described above so that your vote will be counted if you later decide not to attend the Annual Meeting.
Who is soliciting the proxies and who pays the costs?
The enclosed proxy for the Annual Meeting is being solicited by the Board. Proxies also may be solicited, without annual compensation, by our trustees and officers by mail, telephone or other electronic means or in person. We are paying the costs of this solicitation, including the preparation, printing, mailing and website hosting of proxy materials. It is anticipated that banks, brokers and other custodians, nominees and fiduciaries will forward proxy materials to the beneficial owners of our common shares to obtain their voting instructions and that we will reimburse such persons for theirout-of-pocket expenses.
Cautionary Note Regarding Forward-Looking Statements
This Proxy Statement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. When used in this annual report,Proxy Statement, the words “estimated”, “anticipated”, “expect”, “believe”, “intend” and similar expressions are intended to identify forward-looking statements. Forward-looking statements include discussions of strategy, plans or intentions of management. Forward-looking statements are subject to risks, uncertainties, and assumptions about the Company and future events, and actual results, financial and otherwise, may differ materially from the results discussed in the forward- lookingforward-looking statements.
Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this Proxy Statement. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date of this Proxy Statement or to reflect the occurrence of unanticipated events.
10 | 20172020 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
PROPOSAL 1: ELECTION OF DIRECTORS
Pursuant to the Company’s Articles of Incorporation and By-Laws,by-laws, as amended, the director nominees elected at this meeting will be elected to serveone-year terms that expire upon the date of the next Annual Meeting of Stockholders or earlier death, resignation or removal.
It is intended that the accompanying form of Proxy will be voted for the nominees set forth below. If, in the Board’s judgment, some unexpected occurrence should make necessary the substitution of some other person or persons for one or more of these nominees, shares will be voted for such other persons as the Board may select.Director Nominees
The Board is not aware that any nominee may be unable or unwilling to serve as a director. James J. Burns, a current director, has advised our Nominating/Corporate Governance Committee that he will retire and will not stand for reelection at the 2017 Annual Meeting. The Company acknowledges the outstanding service rendered by Mr. Burns during his nearly sixteen year tenure on the Board.
The following table sets forth certainBiographical information with respect to our seven director-nominees is set forth below. Each nominee has consented to being nominated for director and has agreed to serve if elected. All of the seven director-nominees:nominees for election to the Board were unanimously recommended by the Nominating/Corporate Governance Committee and were unanimously nominated by the Board.
Abraham Eisenstat | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2015 • Committee(s) Served: • Principal Occupation and Other Information: Mr. Eisenstat is aco-founder of Eisenstat Capital Partners LP, formerly Dabroes Management LP, which was a European long/short equity fund founded in | |
Mr. Eisenstat’s qualifications for Board membership include his extensive knowledge of and success in the investment management industry, which, among other things, qualifies him as a financial expert on the Audit Committee. |
20172020 Proxy Statement | 11
PROPOSAL 1: ELECTION OF DIRECTORS
Gregg A. Gonsalves | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2017 • Committee(s) Served: • Principal Occupation and Other Information: Mr. Gonsalves has been an | |
Mr. Gonsalves’ qualifications for Board membership include his extensive experience in real estate and finance, having had a distinguished career in real estate investment | ||
Pamela N. Hootkin | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2008 • Committee(s) Served:Chair of the Compensation Committee and a member of the Audit Committee • Principal Occupation and Other Information: Ms. Hootkin, a director since June 2008, | |
Ms. Hootkin brings to the Board expertise in finance, investor relations and the retail industry. She serves as a financial expert on the Audit Committee, while also bringing gender diversity to the Board. |
12 | 20172020 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
| Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: • Committee(s) Served: • Principal Occupation and Other Information: | |
2017 Proxy Statement| 13
PROPOSAL 1: ELECTION OF DIRECTORS
development spanning multiple decades, and brings to the Board both experiential and gender diversity. | ||
Steven G. Rogers | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2016 • Committee(s) Served: Chair of the Audit Committee and a member of the Nominating/Corporate Governance Committee • Principal Occupation and Other Information: Mr. Rogers is currently the managing member of Rogers & Associates, LLC, a provider of specialized solutions and board level advisory work for principals and institutional owners in the real estate industry. Mr. Rogers serves as | |
Mr. Rogers brings to the Board specialized knowledge of the REIT industry and corporate governance having served as |
2020 Proxy Statement| 13
PROPOSAL 1: ELECTION OF DIRECTORS
Bruce J. Schanzer President and CEO | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2011 • Committee(s) Served: None • Principal Occupation and Other Information: Mr. Schanzer has been President, Chief Executive Officer and a director of the Company since June 2011. Prior thereto and since 2007, Mr. Schanzer was employed by Goldman Sachs & Co., with his last position being a managing director in the real estate investment banking group. From 2001 to 2007, Mr. Schanzer was employed by Merrill Lynch, with his last position being vice president in the real estate investment banking group. Earlier in his career, Mr. Schanzer practiced real estate law for six years in New York. Mr. Schanzer received a B.A. from Yeshiva College, where he is now a member of its | |
Mr. Schanzer has been involved in real estate as an attorney and investment banker and presently is President and Chief Executive Officer of the Company. Mr. Schanzer has extensive knowledge about the Company, its operations and the retail shopping center industry. |
14 |2017 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
Roger M. Widmann Chairman of the | Principal Occupation and Positions Held
• Age: • Year in which First Elected a Director: 2003 • Committee(s) Served: • Principal Occupation and Other Information: Mr. Widmann, an investment banker, has served as a director since 2003 and has beennon-executive Chairman of the Board since June 2011. He was a principal of the investment banking firm of Tanner & Co., Inc. from 1997 to 2004. From 1986 to 1995, Mr. Widmann was a senior managing director of Chemical Securities, Inc., a subsidiary of Chemical Banking Corporation (now JPMorgan Chase Corporation). Prior to joining Chemical Securities, Inc., Mr. Widmann was a founder and managing director of First Reserve Corporation, the largest independent energy investing firm in the United States. Previously, he was senior vice president with the investment banking firm of Donaldson, Lufkin & Jenrette, responsible for the firm’s domestic and international investment banking business. He had also been a vice president with New Court Securities (now Rothschild, Inc.). He was a director of Lydall, Inc. (listed on the | |
Mr. Widmann, who has spent most of his career in the investment banking |
14 |2020 Proxy Statement
PROPOSAL 1: ELECTION OF DIRECTORS
The affirmative vote of a majority of the shares entitled to be voted and presentcast at the meetingAnnual Meeting either in person or by proxy is required to elect each of the nominees listed above. It is intended that the accompanying form of proxy will be voted for the nominees set forth above. If, in the Board’s judgment, some unexpected occurrence should make necessary the substitution of some other person or persons for one or more of these nominees, shares will be voted for such other persons as the Board may select.
The Board of Directors unanimously recommends a vote FOR“FOR” the election of each of the nominees listed above.
20172020 Proxy Statement | 15
CORPORATE GOVERNANCE PRINCIPLES
CORPORATE GOVERNANCE PRINCIPLESOVERVIEW
The business and affairs of the Company are managed under the direction of our Board, as provided by Maryland law, and the Company conducts its business through meetings of the Board and its three standing committees: the Audit Committee, the Compensation Committee and the Nominating/Corporate Governance Committee.
We structure our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. NotableIn 2018, based on our study of positive trends and best practices in corporate governance, we adopted an important stockholder-friendly governance measure approved with 99.9% support by our stockholders, which amended our charter andby-laws to give stockholders the right to act to amend ourby-laws, as opposed to reserving this right exclusively to the Board. Our adoption of this change, among other stockholder-favored governance measures, is indicative of the Company’s commitment to stockholder enfranchisement and evidences the importance management and the Board place on open dialogue with our valued investors.
Other notable features of our corporate governance include:are summarized as follows:
WHAT WE DO: | WHAT WE DON’T DO: | |
✓ |
XNo Hedging of Our Securities. Our anti-hedging policy prohibits our directors, executives and employees from engaging in transactions designed to hedge against losses from their ownership of our shares.
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✓ | X No Pledging of Our | |
✓ Extend Important Rights to Shareholders, Such as Ability to Amend OurBy-Laws. In 2018, we amended our charter andby-laws to give stockholders the
|
X | |
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| |
✓ cap on director pay. |
XNo Poison Pill. The Company does not have a “poison pill” or a | |
✓ Independent Chairman and Committees. Our Board Chairman is an independent director, which strengthens the role of our independent directors and encourages independent Board leadership. All of the members of our Audit, Compensation, and Nominating/Corporate Governance Committees are entirely independent. | X No Excessive Perquisites, No TaxGross-Ups on Perquisites and No Contractual TaxGross-Ups on Golden Parachutes. We do not provide any excessive perquisites to our named executive officers or directors and they are not entitled to U.S. federal income taxgross-ups on the perquisites they do receive, nor do our executive employment agreements provide for golden parachute taxgross-ups.
| |
✓
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X | |
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16 |2020 Proxy Statement
CORPORATE GOVERNANCE OVERVIEW
WHAT WE DO: | WHAT WE DON’T DO: | |
✓ Regular Board Refreshment.The Company has nominated a new independent director in four of the last five years to assume the seat of a long-standing director upon his retirement. Currently, 67% of our independent directors have served for less than five years. | X No Undue Restrictions on Stockholder Rights. There are no material restrictions on our stockholders’ right to call special meetings and, stockholder approval is required to materially modify the Company’s capital structure. | |
✓Frequent Stockholder Engagement. We engage in regular dialogue with our stockholders, having communicated directly with holders of approximately 44 million, or over 48%, of our outstanding common shares. We have also provided our shareholders with direct access to our directors, including Committee chairs. | X No Overboarded Directors. We are the only public company board on which six of our seven directors serve. Mr. Widmann serves on one other public company board in addition to our Company. | |
✓Share Ownership Guidelines for Directors and Executives.
| ||
✓ Risk Oversight by Full Board. Our full Board receives quarterly risk assessment presentations that are both quantitative and qualitative in nature, which enables our directors to focus their attention on mitigating the risks that are most significant to us and our business.
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16 |2017 Proxy Statement
CORPORATE GOVERNANCE PRINCIPLES
✓Annual Board and Committee Self-Evaluations.
| ||
✓ Regular Executive Sessions of Independent Directors and Board Committees. Ournon-executive Chairman and the othernon-employee directors of our Board are actively involved in corporate governance matters and, as with each of the Board’s committees, routinely meet in executive session without management several times during the year.
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We maintain a corporate governance page on our website that includes key documents relating to our corporate governance, including our:
Corporate Governance Guidelines and Principles;
Code of Business Conduct and Ethics;
Gift Policy;
Charter of the Audit Committee;
Charter of the Compensation Committee; and
Charter of the Nominating/Corporate Governance Committee.
All of these documents can be found by accessing the “Investor Relations” tab on our website atwww.cedarrealtytrust.com and clicking on “Corporate Governance.” The documents noted above will also be provided without charge to any stockholder who requests them. We frequently review our corporate governance policies, monitor emerging developments in corporate governance, and enhance our policies and procedures when our Board determines that it would benefit our Company and our stockholders to do so.
Pursuant to rules of the New York Stock Exchange (“NYSE”) and applicable law, a majority of the Company’s directors must be “independent”. Each year, the Board reviews the independence of the Company’s directors, including a review of any transactions and relationships between each director, or any member of his or her immediate family, on the one hand, and the Company and its subsidiaries and affiliates, on the other. The Board also examines transactions and relationships between directors or their affiliates and members of the Company’s senior management or their affiliates. The purpose of this review is to determine whether any such relationship or transaction was inconsistent with a determination that the director is independent.
As the result of this year’s review, the Board affirmatively determined that each of Messrs. Eisenstat, Gonsalves, Kirk, Rogers and Widmann and Ms. Hootkin (and Mr. Burns, a director not standing for reelection) is independent of the Company and its management. The Board determined that none of these independent directors had any material relationships with the Company. Mr. Schanzer, the Company’s President and Chief Executive Officer, is the only director who is not independent by virtue of his employment with the Company. In addition, none of our directors’ family members are employed by the Company in any capacity. Therefore, following the election of director-nominees at the Annual Meeting, we believe that 85.7% of our Board members will be independent under the NYSE rules.
20172020 Proxy Statement | 17
CORPORATE GOVERNANCE PRINCIPLES
Commitment to Stockholder Engagement
We appreciate and value the engagement of our stockholders and actively solicit stockholder feedback. Throughout the year, management communicated in meetings, property visits, telephone calls and/or written communications with several significant stockholders to better understand their perspectives on corporate governance, social responsibility and sustainability, performance, overall compensation, strategy, and business operations.
During 2019, as part of our stockholder engagement, we contacted stockholders accounting for close to 70% of our outstanding shares, and received acceptances from, and actively engaged with, stockholders representing over 48% of our outstanding common shares. During much of such outreach, we made available to our stockholders our CEO and independent directors, including the Chair of our Compensation Committee. Several shareholders declined our invitation to meet, indicating that they were satisfied with our current compensation and corporate governance practices and that they did not deem a meeting necessary at the time. Including our directors’ and executives’ outreach to shareholders, the Company conducted telephonic orin-person meetings with over 48% of our key stockholders during 2019 alone.
In addition, we have routine telephonic meetings with proxy advisors, such as ISS, to stay informed as to their views on best practices in governance and compensation trends, and to elicit meaningful feedback on initiatives the Company is considering.
We accord great weight and importance to our stockholders’ concerns. Feedback received from our stockholders during our outreach process was shared with the Board and its committees and taken into account when considering and, in many cases adopting, proposed changes to corporate governance and compensation practices.
Below is a summary of what we learned from our stockholders and the actions we took in direct response to our stockholder engagement and study of best practices:
Our Stockholders Expressed Concern About | How We Addressed Their Concerns | |
Compensation Structure | ||
• Triggering conditions for cash severance upon a Change in Control | • Perpetuation of “double trigger” condition for payment of cash severance following a Change in Control in new COO employment agreement, a modification previously introduced in response to constructive stockholder feedback | |
• Length of contract terms | • Reduced the term and performance measurement period from seven to five years in recent CEO employment agreement renewal | |
• Rationale for choice of performance metrics | • Providing stockholders access to our Board and management on these issues has enabled us to clarify our rationale for the performance metrics chosen and their relationship with our compensation structure |
18 |2020 Proxy Statement
CORPORATE GOVERNANCE OVERVIEW
Our Stockholders Expressed Concern About | How We Addressed Their Concerns | |
Governance | ||
• Stockholder ability to participate in corporate governance | • Amended charter andby-laws to give stockholders right to act to amend ourby-laws, as opposed to reserving this right exclusively with the Board | |
• Board diversity | • Two most recent Board appointments enhanced both gender and ethnic representation on our Board, as well as expanding skills diversity | |
• Average director tenure | • Appointed four new directors in the past five years to replace retiring, long-serving directors, resulting in increase in percentage of independent directors with relatively low tenure (< 5 years) |
We believe that these compensation changes and governance enhancements demonstrate our commitment to stockholder engagement and responsiveness to stockholder feedback. In addition, we believe that providing stockholders access to our Board and management on these issues has enabled us to clarify our rationale for the performance metrics chosen and their relationship with our compensation structure. We will continue to actively engage with our investors on these and other topics and to provide transparent disclosure as to the evolution in our thinking and practices as a result of this important feedback.
Corporate Governance Guidelines and Principles
The Board has adopted Corporate Governance Guidelines and Principles that address significant issues of corporate governance and set forth procedures by which the Board carries out its responsibilities. Among the areas addressed by the Corporate Governance Guidelines and Principles are director responsibilities, management responsibilities, director access to management, employees and advisors, management succession, annual performance evaluation of the Board and Chief Executive Officer, director compensation and meeting procedures. The Corporate Governance Guidelines and Principles are available on the Company’s website atwww.cedarrealtytrust.com.
Code of Business Conduct and Ethics
All of our employees, including our chief executive officer, chief financial officer, chief operating officer, chief accounting officerChief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Accounting Officer and chief investment officer,Chief Investment Officer, and our directors are required to comply with our Code of Business Conduct and Ethics. Our Code is available on our website atwww.cedarrealtytrust.com. We intend to disclose any amendments we make to, or waivers of, certain provisions of our Code of Business Ethics applicable to our officers and directors on our website within three (3) business days following such waiver or as otherwise required by the rules of the Securities Exchange Commission (“SEC”) or the NYSE.
Pursuant to rules of the NYSE and applicable law, a majority of our directors must be “independent.” Each year, the Board reviews the independence of the Company’s directors, including a review of any transactions and relationships between each director, or any member of his or her immediate family, on the one hand, and the Company and its subsidiaries and affiliates, on the other. The Board also
2020 Proxy Statement| 19
CORPORATE GOVERNANCE OVERVIEW
examines transactions and relationships between directors or their affiliates and members of the Company’s senior management or their affiliates. The purpose of this review is to determine whether any such relationship or transaction was inconsistent with a determination that the director is independent.
As a result of this year’s review, the Board affirmatively determined that each of Mses. Hootkin and Kanner and Messrs. Eisenstat, Gonsalves, Rogers and Widmann, is independent of the Company and its management. The Board determined that none of these independent directors had any material relationships with the Company. Mr. Schanzer, the Company’s President and Chief Executive Officer, is the only director who is not independent by virtue of his employment with the Company. In addition, none of our directors’ family members are employed by the Company in any capacity. Therefore, following the election of our seven director-nominees at the Annual Meeting, we believe that 85.7% of our Board members will be independent under the NYSE rules.
Leadership Structure of the Board
The Board has anon-executive Chairman to ensure independent oversight of management. Roger M. Widmann, an independent director of the Company since 2003, has been chosen by the directors to be thenon-executive Chairman of the Board and to preside at meetings of the Board. Mr. Widmann and the othernon-management directors of our Board are actively involved in corporate governance matters and meet in executive session several times during the year, generally on the same day as regularly scheduled meetings of the Board or its committees (or as otherwise considered necessary or appropriate).
A key responsibility of the Board and Chief Executive Officer is to ensure continuity of leadership of the Company. Each year, the Chief Executive Officer presents a succession plan to the Board for its review and consideration.
At Cedar, we believe that healthy counterpoint catalyzes good decision making. We cultivate cognitive diversity not only at our Board and management levels, but throughout our organizational ranks, because we believe, among other benefits, that such diversity of viewpoint fosters productive exchange of ideas that ultimately drives long-term value.
Our director nominees represent a broad panoply of perspectives, including with respect to gender, age, race, tenure, skills, and experience, as illustrated below:(1)
Composition
(1) | As of April 20, 2020. |
(2) | Percentages rounded to total 100%. |
20 |2020 Proxy Statement
CORPORATE GOVERNANCE OVERVIEW
Experience | No. of Directors(1) | |||||
Industry/Retail Experience | ● ● ● ● ● ● | 6 of 7 | ||||
Financial, Audit and Accounting Expertise | ● ● ● ● ● ● | 6 of 7 | ||||
Management/Executive Leadership Experience | ● ● ● ● | 4 of 7 | ||||
Investment Expertise | ● ● ● ● | 4 of 7 |
(1) | As of April 20, 2020. |
Corporate Governance Documents
We maintain a corporate governance page on our website that includes key documents relating to our corporate governance, including our:
Corporate Governance Guidelines and Principles;
Code of Business Conduct and Ethics;
Gift Policy;
Charter of the Audit Committee;
Charter of the Compensation Committee; and
Charter of the Nominating/Corporate Governance Committee.
All of these documents can be found by accessing the “Investors” tab on our website atwww.cedarrealtytrust.com and clicking on “Corporate Governance.” The documents noted above will also be provided without charge to any stockholder who requests them. We periodically review our corporate governance policies, monitor emerging developments in corporate governance, and enhance our policies and procedures when our Board determines that it would benefit our Company and our stockholders to do so.
Our share ownership guidelines require that our CEO and other named executive officers own shares or limited partnership units with an aggregate value of 4x and 2x base salary, respectively. All respectively, in each case with a four-yearphase-in period. For eachnon-employee directors must hold director who has served as a director for four years or more, such director is expected to own shares or limited partnership units with an aggregate value of 4xour common stock, including restricted stock, totaling not less than the number of shares constituting the equity portion of his or her annual retainer. The Company believesretainer in the aggregate over the previous four years. We believe these shareholdingstockholding requirements reaffirm the Company’s alignment between the Company’sits strategic decision-makers and its stockholders.
Anti-Hedging and Anti-Pledging Policy
The Company doesWe do not consider it appropriate for any of itsthe Company’s officers, directors or employees to enter into speculative transactions in the Company’s securities that are designed to hedge or offset any decrease in market value of the Company’s securities. As thea result, the Companywe have adopted a policy that prohibits officers, directors or employees from purchasing puts, calls, options or other derivative securities based on the Company’s securities. The policy also prohibits hedging or monetization transactions, such as forward sale contracts, equity swaps, collars and exchange funds. Officers, directors and employees may also are not permitted to purchase securities of the Company on margin, borrow against any account in which the Company’s securities are held or otherwise pledge any securities of the Company.
2020 Proxy Statement| 21
CORPORATE GOVERNANCE OVERVIEW
Management has primary responsibility for identifying, monitoring, mitigating, and managing our exposure to risk, subject to active oversight by our Board regarding the processes we have established to assess, monitor and mitigate that exposure.Board. The Board, directly and through its committees, discusses with management any significant enterprise risks and reviews the guidelines, policies and procedures we have in place to address those risks, such as our approval process for significant acquisitions, dispositions and other investments. The Board receives quarterly risk assessment presentations that are both quantitative and qualitative in nature. This process enables our Board to focus on the strategic, financial, operational, legal, regulatory and other risks that are most significant to us and our business in terms of risk likelihood and potential impact and ensures that our enterprise risks are well understood, mitigated to the extent reasonable and consistent with the Board’s view of our risk profile and risk tolerance.
18 |2017 Proxy Statement
CORPORATE GOVERNANCE PRINCIPLES
Each of our Audit, Compensation, and Nominating/Corporate Governance Committees exercises its own oversight related to the risks associated with the particular responsibilities of that committee:
Our Audit Committee reviews financial, accounting and internal control risks and the mechanisms through which we assess and manage risk, in accordance with NYSE requirements, and has certain responsibilities with respect to our compliance programs.
Our Compensation Committee evaluates whether our compensation policies and practices, as they relate to both executive officers and employees generally, encourage excessive risk-taking. The Compensation Committee assesses executive compensation, and particularly annual cash incentive bonuses and long-term incentive compensation, in light of these other corporate and operational risks facing the Company. Based on these assessments, the Company’s executive compensation program includes risk mitigating features, such as: balance among short- and long-term incentives, cash versus equity and fixed versus variable pay, multiple performance measures, and anti-hedging policies.
Our Nominating/Corporate Governance Committee focuses on risks related to corporate governance, Board effectiveness and succession planning.
CommitmentNo Director Overboarding
In order to Stockholder Engagement
The Company appreciatesstay aligned with best practices and valuesto ensure the engagement of its stockholders and actively solicits stockholder feedback. Throughout the year, management communicated in meetings, property visits, telephone calls and/or written communications with several significant stockholders to better understand their perspectives on corporate governance, overall compensation, strategy, and business operations. The Company prides itself on its relationship with its stockholders, and on its practice of offering interested stockholders direct access to management as well as our Compensation Committee Chair to express their feedback and concerns. Since our 2016 Annual Meeting, members of our senior management team engaged with many of our largest institutional investors, representing ownership of more than 60% of our outstanding common stock. Feedback received during our outreach process was then shared with the Board and its committees and taken into account when considering proposed changes to corporate governance and compensation practices. For example, largely in response to constructive feedback from our stockholders in 2016, we amended our senior executive employment agreements in August 2016 to eliminate the “modified single-trigger” with respect to cash severance payments to named executive officers upon a change in control and replace it with a “double-trigger” condition to receiving such payments. This significant action underscores the Company’sappropriate level of commitment, to stockholder engagement and responsiveness to stockholder feedback. In addition, in response to constructive feedback from our stockholders, we will require a minimum vesting period of one-year applicable to all types of equity awards granted under the 2017 Stock Incentive Plan, subject to a 5% carve-out and a minimum three-year vesting period for time-based restricted stock awards.
Leadership Structure of the Board
The Board has a non-executive Chairmanendeavor to ensure independent oversightthat our Board members are not overboarded. For six of management. Roger M. Widmann, an independent director ofour seven directors, ours is the Company since 2003, has been chosen by the directors to be the only public company board on which they serve. Ournon-executive Chairman of the Board and to preside at meetings of the Board. chairman, Mr. Widmann, and theserves on one other non-management directors ofpublic company board in addition to our Board are actively involved in corporate governance matters and meet in executive session several times during the year, generally on the same day as regularly scheduled meetings of the Board or its committees (or as otherwise considered necessary or appropriate).Company.
A key responsibility of the Board and Chief Executive Officer is to ensure continuity of leadership of the Company. Each year, the Chief Executive Officer presents a succession plan to the Board for its review and consideration.
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CORPORATE GOVERNANCE PRINCIPLES
The Board has established an Audit Committee consisting of Steven G. Rogers (Chair), Abraham Eisenstat, Gregg A. Gonsalves and Pamela N. Hootkin, and, if elected, Gregg A. Gonsalves, all of whom are independent within the meaning of the rules of the NYSE and applicable law. James J. Burns, who was Chair of the Audit Committee through December 31, 2016 and who will remain a member of the Audit Committee until his retirement as a director of the Company effective at the Annual Meeting on May 2, 2017, is likewise independent within the meaning of the rules of the NYSE and applicable law. Additionally, Ms. Hootkin and Messrs. Eisenstat and Rogers, eachAll members of theour Audit Committee are qualified as audit committee financial experts within the meaning of applicable law and the Board has determined that each of them has accounting and related financial management expertise under the rules of the NYSE. The designation of “audit committee financial expert” does not impose upon such persons any duties, obligations or liabilities that are greater than are generally imposed on such persons as members of the Audit Committee and the Board, and such designation does not affect the duties, obligations or liabilities of any other member of the Board.
The principal functions of the Audit Committee are as follows:
employ the Company’s independent registered public accounting firm, subject to stockholder ratification, to audit the Company’s consolidated financial statements;
approve orpre-approve all services performed by the Company’s independent registered public accounting firm;firm, including fees and terms;
provide oversight on the internal reporting process and the adequacy of the Company’s internal controls;
review the scope of the audit of the independent registered public accounting firm and the firm performing the Company’s internal audit procedures;
appoint, retain, evaluate, approve compensation for, and oversee the Company’s internal auditors;
22 |2020 Proxy Statement
CORPORATE GOVERNANCE OVERVIEW
review services provided by the Company’s independent public registered accounting firm and other disclosed relationships as they bear on the independence of the Company’s independent registered public accounting firm; and
monitor the process for the receipt, retention and resolution of complaints regarding accounting, internal controls or auditing matters, among others, that could materially impact the Company’s financial statements.
The charter of the Audit Committee is available on the Company’s website atwww.cedarrealtytrust.com.
The Board has established a Compensation Committee consisting of Pamela N. Hootkin (Chair), Paul G. Kirk, Jr.,Gregg A. Gonsalves, Sabrina L. Kanner and Roger M. Widmann, and, if elected, Gregg A. Gonsalves, all of whom are independent within the meaning of the rules of the NYSE and applicable law. The principal functions of the Compensation Committee are as follows:
review and approve the compensation and benefits of executive officers;
officers, as well as administer and make recommendations to the Board regarding director compensation;
develop and recommend to the Board cash incentive and equity-based compensation programs and stock incentive plans;
approve an annual report on executive compensation for inclusionreview and discuss with management the Compensation Discussion and Analysis (the “CD&A”) required to be included in the Proxy Statement;Company’s proxy statement and annual report; and
review the relationship between the Company’s compensation practices and effective risk management; andmanagement.
review and discuss with management the Compensation Discussion and Analysis.
The charter of the Compensation Committee is available on the Company’s website atwww.cedarrealtytrust.com.
Under its charter, the Compensation Committee has the authority to engage independent compensation consultants or other advisors to assist it in formulating the
20 |2017 Proxy Statement
CORPORATE GOVERNANCE PRINCIPLES
Company’s total compensation plan. In designing the 20162019 executive compensation plan, setting executive compensation for 2016, our Compensation Committee retained Mercer, (US) Inc. (“Mercer”), a wholly-owned subsidiary of Marsh & McLennan Companies, Inc. (“MMC”),MMC, as its compensation consultant. The consultant provided to the Compensation Committee relevant survey and market compensation data and compared the Company’s compensation to the survey data. The Compensation Committee has relied on the guidance of the consultant in formulating and refining the Company’s executive compensation practices. In selecting Mercer, the Compensation Committee evaluated Mercer’s independence and considered the following factors:
Mercer does not provide any other services to the Company;
theThe amount of fees to be received by Mercer from the Company as a percentage of total revenues of MMC;
theThe policies and procedures of Mercer, the Company and the Compensation Committee that are designed to prevent conflicts of interest;
theThe lack of any business or personal relationships of Mercer with any member of the Compensation Committee;
stockStock of the Company owned by Mercer or any of the key Mercer employees servicing the Company; and
theThe lack of any business or personal relationships between Mercer and any executive officer of the Company.
After considering the foregoing, the Compensation Committee determined that (i) Mercer was not engaged by the Company to perform any other services apart from those detailed above; (ii) Mercer was independent of the Company and management of the Company in performing the above services; and (iii) that the engagement of Mercer did not raise any conflicts of interest.
2020 Proxy Statement| 23
CORPORATE GOVERNANCE OVERVIEW
Nominating/Corporate Governance Committee
The Board has established a Nominating/Corporate Governance Committee consisting of Paul G. Kirk, Jr.Abraham Eisenstat (Chair), Abraham Eisenstat,Sabrina L. Kanner, Steven G. Rogers, and Roger M. Widmann, (and James J. Burns until his retirement as a director of the Company effective at the Annual Meeting on May 2, 2017), all of whom are independent within the meaning of the rules of the NYSE and applicable law. The principal functions of the Nominating/Corporate Governance Committee are as follows:
develop and recommend to the Board a set of corporate governance principles;
adopt a code of ethics;
adopt policies with respect to conflicts of interest;
monitor compliance with corporate governance requirements of state and federal law and the rules and regulations of the NYSE;
establish criteria for prospective members of the Board;
conduct candidate searches and interviews;
oversee and annually evaluate the Board, its standing committees and management;
annually evaluate the appropriate organization, size and composition of the Board; and
formally propose the slate of directors to be elected at each Annual Meeting of Stockholders.
The charter of the Nominating/Corporate Governance Committee is available on the Company’s website atwww.cedarrealtytrust.com.
2017 Proxy Statement| 21
CORPORATE GOVERNANCE PRINCIPLES
Board and Committee Performance Self-Evaluation
To optimize the performance of the Board and its committees each year, the Nominating/Corporate Governance Committee oversees a robust self-assessment of the Board and each of its committees that elicits candid feedback on the performance and effectiveness of the Board and its committees, as well as on the efficacy of the self-evaluation process itself. As part of this self-assessment, directors are asked to consider the Board’s composition and structure, key responsibilities, and meetings, among other criteria. Each committee separately conducts its own assessment, and in assessing its structure and performance, is asked to considerconsiders its role and the responsibilities articulated in the committee charter, the composition of the committee and the conduct of committee meetings. The Company believesWe believe that a thorough Board and committee evaluation process that is focused on the assessment and alignment of director skills with Companycompany strategy is more effective than solely relying on strict tenure limits. Throughout the year, the Board and each of its committees routinely use a portion of their regularly scheduled executive sessions to reflect upon and discuss how their oversight performance on behalf of stockholders might be improved.
The Nominating/Corporate Governance Committee is responsible for the selection and nomination of directors and considers candidates for Board membership suggested by its members, and other Board members, as well as management, stockholders and stockholders.nationally recognized search firms. Stockholders who wish to recommend a nominee should send nominations directly to the Nominating/Corporate Governance Committee, at the principal executive offices of the Company, that include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of directors, including the nominee’s name, business experience and consent to be nominated for membership on our Board and to serve if elected by the stockholders. We did not receive any recommended nominees for director from any of our stockholders, other than from our directors, in connection with the 2017 Annual Meeting. We do not currently pay any fees to third parties to identify or evaluate or assist in
The Nominating/Corporate Governance Committee has a carefully designed protocol for identifying or evaluating potentialand selecting nominees for directorships.Board positions, which was enhanced in 2019 to refine the desired attributes identified for potential Board nominees.
24 |2020 Proxy Statement
CORPORATE GOVERNANCE OVERVIEW
Once the Nominating/Corporate Governance Committee has identified a prospective nominee, the Committeeit makes an initial determination as to whether to conduct a full evaluation of the candidate. This initial determination is based on whatever information is provided to the Nominating/Corporate Governance Committee with the recommendation of the prospective candidate, as well as the Nominating/Corporate Governance Committee’s own knowledge of the prospective candidate, which may be supplemented by inquiries to the person making the recommendation or others. The preliminary determination is based primarily on the need for additional Board members to fill vacancies, provide for succession or expand the size of the Board and the likelihood that the prospective nominee can satisfy the evaluation factors described below. If the Nominating/Corporate Governance Committee determines, in consultation with the Chairman of the Board and other Board members as appropriate, that additional consideration is warranted, it may request additional information about the prospective nominee’s background and experience and report its findings to the Board. The Nominating/Corporate Governance Committee then evaluates the prospective nominee against the standards and qualifications set out in the Company’s guidelines, including:
fornon-management directors, independence;
personal and professional ethics, integrity, values and judgment;
leadership skills;
strategic thinking;
ability and willingness to devote sufficient time to carrying out the abilityduties and responsibilities of the prospective nomineeBoard;
breadth of knowledge about matters affecting real estate industry;
diversity of viewpoints, backgrounds and experience;
experience in real estate, business, finance, accounting rules and practices, law and public relations;
judgment, skill and experience with businesses and organizations comparable to represent the interests of the stockholdersthat of the Company;
the prospective nominee’s standards of integrity, commitment and independence of thought and judgment;
the prospective nominee’s ability to dedicate sufficient time, energy and attention to the diligent performance of his or her duties, including the prospective nominee’s service on other public company boards and other professional experience to enhance the Board’s effectiveness;
the extent to which the prospective nominee contributes to the range of talent, skill and expertise appropriate for the business of the Company; andmanagement experience;
the extent to which the prospective nominee provides the Board with diversity in experience and background.
22 |2017 Proxy Statement
CORPORATE GOVERNANCE PRINCIPLES
The Nominating/Corporate Governance Committee may also consider such other relevant factors as it deems appropriate, including the current composition of the Board, the balance of management and independent directors, the need for Audit Committee expertiseappropriate size and diversity of the Company’s Board of Directors, and the evaluationsneeds of the Company with respect to the particular talents and experience of its directors and the interplay of the candidate’s experience with that of other prospective nominees.Board members. In connection with this evaluation, the Nominating/Corporate Governance Committee determines whether the person should be considered for a Board position, and one or more members of the Nominating/Corporate Governance Committee, and others as appropriate, interview prospective nominees in person or by telephone. The candidate is then required to complete a series of compliance and vetting questionnaires, to submit to a background check, to establish qualification for service and fitness to serve, as well as to identify potential conflicts of interest. Upon satisfactory completion inof the interview, vetting process and evaluation, the Nominating/Corporate Governance Committee makes a recommendation to the full Board as to the personsperson(s) who should be nominated by the Board, and the Board determines the nomineesnominee(s) after considering the recommendation and report of the Nominating/Corporate Governance Committee.
There are no differences in the manner in which the Nominating/Corporate Governance Committee evaluates nominees for director based on whether the nominee is recommended by management, a stockholder, another Board member or the Committee.an outside search firm.
2020 Proxy Statement| 25
CORPORATE GOVERNANCE OVERVIEW
The Board has a program for orienting new directors that is overseen by the Nominating/Corporate Governance Committee. New directors receive materials with an overview of their duties and responsibilities, significant corporate governance documents of the Company, incorporation documents, regulatory filings, investor presentations, Company policies and Committeecommittee calendars. They are also required to complete a series of vetting andannual compliance questionnaires, and financial disclosures. Directors alsoIn addition, directors attend tours of our properties, as opportunities for such visits arise.present, to familiarize themselves with the Company’s portfolio of assets.
In the year ended December 31, 2016, there were eleven2019, regular meetings of the Board fiveand its committees were as follows: fourin-person meetings of the Board, fourin-person meetings of the Audit Committee, sevenfive meetings (combination ofin-person and telephonic) of the Compensation Committee and fivefourin-person meetings of the Nominating/Corporate Governance Committee. Each incumbent director of the Company standing for reelection attended in excess of 75%100% of the total number of regular meetings held of the Board and committees on which he or she served during his or her tenure of service in 2016. Mr. Burns, who is not standing for reelection, attended in excess of 75% of the total number of such meetings during his tenure of service in 2016.2019. Board members are encouraged to, and do, attend our Annual Meeting of Stockholders. All of our current directors were present at the Company’s Annual Meeting of Stockholders in May 2016.2019.
The Nominating/Corporate Governance Committee of the Board has approved a process for handling letters received by the Company and addressed tonon-management members of the Board. Stockholders and other parties interested in communicating with any of the directors of the Company (or the Board as a group), may do so by writing to the Secretary of the Company, at 44 South Bayles Avenue, Port Washington, NY 11050. The Secretary will review all such correspondence and regularly forward to the Board a summary of all such correspondence and copies of all correspondence that, in the Secretary’s opinion, deals with the functions of the Board or committees thereof or that she otherwise determines requires the Board’s attention. The Board or any member thereof may at any time request that copies of all such correspondence be forwarded to the Board.
Correspondence relating to accounting, internal controls or auditing matters that could materially impact the Company’s financial statements is handled by the Audit Committee in accordance with its procedures.
26 | 20172020 Proxy Statement| 23
The Company’s named executive officers are as follows:
Bruce J. Schanzer
Age
Position: President
Served as Named | Biographical Information
Mr. | |
Philip R. Mays
Age
Position: Executive
Served as Named | Biographical Information
Mr. Mays joined the Company in June 2011 after six years with Federal Realty Investment Trust, where he |
24 2020 Proxy Statement| 2017 Proxy Statement27
Robin M. Zeigler
Age
Position: Executive
Served as Named | Biographical Information
Ms. Zeigler joined the Company in March 2016 after serving as Executive Vice President and Head of Operations at Penzance, a Washington, D.C.-based commercial real estate investment company, since January 2015. From 2005 to 2015, Ms. Zeigler worked at Federal Realty Investment Trust, most recently serving as Chief Operating Officer for theMid-Atlantic Region. In that capacity, she was responsible for the operations of a portfolio of over 40 shopping centers and fivemixed-use projects representing approximately 7.3 million square feet. Additionally, Ms. Zeigler provided oversight and strategic direction onmixed-use development and redevelopment projects. Ms. Zeigler holds a B.S. in Accounting from Florida A&M University and an M.B.A. from Georgia State University. |
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
At the time of mailing this proxy statement, the coronavirus(COVID-19) pandemic has erupted with wide-reaching impact on the global economy, including our business operations. The health and safety of our employees and the communities in which we operate continues to be of paramount concern for the Company, and our Board, the Compensation Committee and executive leadership team will continue to monitor the impact of theCOVID-19 pandemic on our business and operations.
The proxy statement speaks as of the date of mailing. However, the discussion about our financial, operational and strategic performance relates to 2019 and has not been edited to provide any update with respect toCOVID-19 or our 2020 business activities or performance.
In early 2020, the Compensation Committee met to approve certain elements of 2020 compensation for our named executive officers, including base salary, annual cash incentive bonuses and long-term equity incentive awards. These decisions were based on performance during 2019 and comparisons to compensation in the market at the time. All compensation decisions discussed below in this Compensation Discussion and Analysis were made prior to the rapidly unfolding recent developments of theCOVID-19 pandemic. While our compensation philosophy and objectives remain unchanged, the Compensation Committee aims to align our 2020 compensation program with the current environment by taking into account the current and anticipated future impacts of these events on the retail shopping center industry, financial markets and national economic activity. Additional information regarding our 2020 compensation program, including any changes to take into account recent events and the current market environment, if any, will be disclosed at the appropriate time.
This section of our Proxy Statement discusses the principles underlying our executive compensation policies and decisions. This discussion relates to the Company’s “nameddecisions for our named executive officers,” as included in the Summary Compensation Table below.officers. For 2016,2019, the Company’s named executive officers were:
Mr. Bruce J. Schanzer, President and Chief Executive Officer;
Mr. Philip R. Mays, Executive Vice President, Chief Financial Officer and Treasurer; and
Ms. Robin M. Zeigler, Executive Vice President and Chief Operating Officer.
For 2016, the Company determined there were noNo other employees of the Company that qualified as “named executive officers”officers under the applicable rules and regulations of the SEC.
In June 2011, the Company hired Mr. Bruce J. Schanzer as CEO and Mr. Philip R. Mays as CFO as part of a long-term strategic plan for improving Company performance. At the time they were hired, the Company and the Compensation Committee affirmed that a core objective of the executive compensation program was to align management’s compensation with long-term stockholder value creation. This was especially critical as the expectation was that it would take a number of years to fully realize positive results derived from the implementation of the new strategic plan.
In executing the new long-term strategic plan, the Company has achieved several important improvements to its portfolio, balance sheet and earnings, as illustrated below:*
PORTFOLIO
26 |2017 Proxy Statement
EXECUTIVE COMPENSATION
BALANCE SHEET
EARNINGS
2017 Proxy Statement| 27
EXECUTIVE COMPENSATION
Beginning with the hiring of Messrs. Schanzer and Mays, the Company and the Compensation Committee, under the guidance of the Company’s independent compensation consultant, refined itsour compensation structure. The refinedThis structure was designed to retain, compensate and incentivize Company executives, commensurate with their experience, responsibilities and accomplishments, and align executive pay with the Company’s long-term strategic objectives and achievement of enhanced stockholder value. To that end, theOur executive compensation program includes three primary elements:
i. | base salary; |
ii. | annual cash incentive bonus; and |
iii. | long-term equity incentive compensation. |
For 2016, our CEO’s and CFO’s base salaries remained unchanged from 2015. Our COO joined us on March 31, 2016, with a starting annualized base salary of $400,000.
A significant portion of the annual cash-incentive bonus is based on the performance of the Company, and the remaining portion is based on individual performance. Long-term equity incentive compensation vests based on continued service to the Company and, for the CEO, the Company’s total shareholder return (“TSR”). 2020 Proxy Statement| 29
EXECUTIVE COMPENSATION
A significant portion of executive compensation is at risk and variable depending on both our short-term financial performance and long-term creation of stockholder value, with the largest portion ofat-risk compensation designed to incentivize our executives to focus on long-term stockholder value creation.
Commencing in 2019, and consistent with a study of trends in executive pay, Mr. Schanzer’s base pay was decreased by $50,000 from $800,000 to $750,000 per annum. Mr. Mays’ base pay remained level from 2018, and Ms. Zeigler’s base pay was increased to $436,000 from $400,000 as of April 1, 2019, consistent with the terms of her new employment contract, and a study of competitive pay positioning in the industry.
In 2020, the base pay of Messrs. Schanzer and Mays, along with Ms. Zeigler, remained level at $750,000, $400,000, and $436,000 compared with 2019.
As explained more fully below on page 35 in the section entitled, “Annual Cash Incentive Bonus,” in setting performance criteria for 20162019 bonuses for our CEO and CFO,named executive officers, our Compensation Committee determined that 70% of the bonus would be based on the Company’s achievement of its targeted operating funds from operations (as defined below),Operating FFO, and 30% would be based on a qualitative individual performance evaluation for each of those executives. For 2016,It was determined that 100% of the Compensation Committee determined to award our CEO and CFO70% portion of the annual bonuses of $1,028,000 and $465,380, respectively. Pursuant to the terms of her employment agreement, Ms. Zeigler received a guaranteed bonus of $300,000 for 2016 and,incentive based on February 22, 2017, the Compensation Committee decided to award Ms. Zeigler an additional bonus in the amount of $85,500Company performance would be awarded, based on the Company’s attainment of its Operating FFO target of $0.45, and 100% of the 30% portion of the annual bonus incentive based on individual performance would be awarded, based on a qualitative assessment of individual performance achievements for each of the NEOs. For 2019, the annual bonuses determined by the Compensation Committee to be awarded to our CEO, CFO and Ms. Zeigler’sCOO, respectively, amounted to $750,000, $380,000 and $414,200.
Long-term equity incentive compensation is awarded based on a combination of average TSR over a three-year historical period and individual performance in 2016,assessment. Once granted, the vesting of such long-term equity incentive awards is based on continued service to the Company. For the CEO, half of his 2018 grant is time-based, contingent upon continuous employment with the total amountCompany, and half is performance-based, contingent upon attainment of Ms. Zeigler’s 2016 bonus commensurate with the percentage of target bonuses paid to the CEO and CFO for 2016.
The Company believescertain TSR targets. We believe that awarding senior executives a significant amount of their compensation in the form of restricted stockequity incentive awards aligns management’s incentives with long-term stockholder value creation and encourages retention. To effectively ensure the alignment of executive compensation with long-term performance, the Company has awarded, at times, multi-year restricted stock grants to top executives with a five-year vesting period, which is longer than our typical three-year vesting period, in lieu of annual grants over such vesting period. Stock grants that contain long-term vesting provisions provide senior executives an incentive to remain with the Company. Also, long vesting periods, coupled with performance conditions for our CEO, create a significant positive incentive to make decisions that engender strong results over a sustained period of time. The Company believes this structure appropriately focuses our executive officers on the creation of long-term value
Pay and encourages prudent evaluation of risks. Of the grants made to the Company’s named executive officers as of December 31, 2016, the following remain unvested:Governance Practices
In 2011, to entice him to join the Company as CEO and to give him immediate and significant alignment with stockholders, the Company awarded Mr. Schanzer a grant of 2,500,000 shares of restricted stock that will vest in full on the seventh anniversary of the grant date provided the vesting conditions for such award are met. This one-time grant was in lieu of any other grants to be made during the seven-year period ending June 2018. Fifty percent of this unvested, long-term equity grant vests based on achievement of an objective TSR target.
28 |2017 Proxy Statement
EXECUTIVE COMPENSATION
To incentivize Mr. Mays to remain with the Company for the long term, in 2013 the Compensation Committee awarded him a grant of 369,718 shares of restricted stock that will vest in full on the fifth anniversary of the grant date, provided he continues to be employed by the Company through such date. In 2016, the Committee awarded Mr. Mays an additional grant of 276,564 shares of restricted stock that will vest in full on the fifth anniversary of the grant date, provided he continues to be employed by the Company through such date, which not only provides alignment with the interests of our stockholders, but also creates continued retention incentives. The 2016 grant is in lieu of any other grants to be made for the following three-year period.
In 2016, to attract and motivate Ms. Zeigler to join the Company as our COO and to immediately align her interests with those of the stockholders, the Company awarded Ms. Zeigler 13,831 shares of restricted stock that will vest in full on the third anniversary of the grant date, provided she continues to be employed by the Company through such date.
In addition, ourOur executive compensation program includes a number of features intended to reflect best practices in the market and to help ensure that the program reinforces our stockholders’ interests.
Our compensation policies and programs are built upon the strong foundation of corporate governance and compensation best practices,interests, including:
WHAT WE DO: | WHAT WE DON’T DO: | |
✓Pay for Performance.We align our executive compensation with stockholder returns by providing a significant portion of our named executive officers’ compensation in the form ofat-risk awards tied to our short- and long-term strategy and measurable performance.
|
XNo | |
✓Caps on Individual Incentive Awards. We include caps on individual payouts in our annual and long-term incentive plan. |
X | |
|
|
30 |2020 Proxy Statement
EXECUTIVE COMPENSATION
|
| |
✓
| XNo Liberal Share | |
✓
| XNo Supplemental Retirement Benefits for |
2017 Proxy Statement| 29
EXECUTIVE COMPENSATION
✓ | XNo Compensation or Incentives that Encourage Unnecessary or Excessive Risk. While our compensation program rewards our senior management for achievement of short- and long-term strategic and operational goals and, for the CEO, achievement of a TSR goal, our Compensation Committee reviews external market considerations, internal considerations and the long-term interests of our stockholders, to ensure that excessively risky behaviors are not incentivized.
| |
✓Independent Compensation Consultant. The Compensation Committee retains an independent compensation consultant to advise it. | XNo Recent Grants of Stock Options. The Company typically provides restricted stock awards with performance or time-based vesting requirements and has not granted any stock options since 2001. | |
✓Double-Trigger Condition Upon Change in Control for Payment of Cash Severance to Named Executive Officers. The employment agreements of our named executive officers provide for satisfaction of “double trigger” conditions for payment of cash severance following a Change in Control. | XNo Dividends on Unearned Performance-Based Equity Awards. Under the new CEO employment agreement, dividend equivalent rights issued in connection with performance-based restricted stock units will not be earned or paid unless and until the performance targets are reached. | |
✓Entirely Independent Compensation Committee.We have a Compensation Committee | ||
✓Reduction in CEO Base Pay (and Correlated Bonus) in CEO Employment Agreement. Effective January 1, 2019, pursuant to his new employment agreement, Mr. Schanzer’s base pay was reduced from $800,000 to $750,000 and his target annual cash incentive opportunity was accordingly reduced from $800,000 to $750,000. | ||
✓Reduction in CFO Cash Severance in CFO Employment Agreement. In order to stay aligned with best market practices, the CFO voluntarily reduced his cash severance upon termination without cause or for good reason, other than incident to a Change in Control, from 250% of the sum of base salary and target annual bonus, to 150% of such sum.
|
These practices and others are described in more detail below under “Corporate Governance Principles.”
2020 Proxy Statement| 31
EXECUTIVE COMPENSATION
Our executive compensation program is designed to attract and retain outstandingtalented senior executives, ensure that their compensation remains competitive relative to the compensation paid to similarly-situated senior executives at comparable publicly-traded REITs, and reward them for superior performance. The program is further designed to reward both short- and long-term performance and to align our senior executives’ and stockholders’ interests. To that end, we believe the compensation packages we provide to our named executive officers should include both cash and share-based incentive compensation that reward performance as measured, in large part, against corporate and individual goals that will enhance stockholder value over the long term.
We believe the overall compensation of our senior executives should primarily reflect their accomplishments as a management team in achieving established key objectives.objectives, including the execution of the strategic plan. We also believe the achievement of these key objectives will ultimately enhance stockholder value as reflected in an increased share price. We believe the compensation of our senior executives should not be based on short-term performance of our shares, whether favorable or unfavorable, but rather that the long-term price of our shares is a better reflection of the management of our Company by our senior executives. In this regard, the restricted stock historically granted to our senior executives has vesting periods ranging from three to seven years. Our senior executives are aligned with our shareholders in that they are also subject to the downside risk of a decrease in the value of their compensation in the event the price of our shares declines.
Consistent with this philosophy, our executive pay program uses a combination of base salary, annual cash incentive bonuses and long-term equity incentive awards, with a significant portion of compensation being at risk and dependent on the performance of the Company and the executive, to align executive interests with those of stockholders.
The Compensation Committee is responsible for establishing, implementing, and continually monitoring adherence to our compensation philosophy as applied to our named executive officers. For more information related to the processes and procedures of the Compensation Committee in determining the compensation of our named executive officers, see “Corporate Governance Principles—Overview–Compensation Committee” above.
Annual Advisory Vote on Named Executive Officer Compensation and Engagement with Stockholders
The Board holdsOur compensation philosophy is informed by input from our stockholders. We hold an annual stockholder advisory vote on executive compensation. While this vote is considered anon-binding advisory vote, our Compensation Committee and Board value the opinions of our stockholders and seriously consider the voting results when making future executive compensation decisions and in designing the executive compensation program more generally. At the Company’s 20162019 Annual Meeting, 63.1% of our stockholders voted to approve the compensation paid to the Company’s named executive officers. This represented a substantial decrease over prior years, when the Company enjoyed relatively high levels of shareholder support.
Say-on-Pay Responsiveness
The Compensation Committee took seriously the Company’s relatively low 2019say-on-pay vote in respect of 2018 executive compensation. In 2019, the Company engaged in a proactive outreach campaign to our major shareholders in an effort to better understand the concerns driving the opposition to our executive compensation. As part of that outreach campaign, we contacted stockholders accounting for close to 70% of our outstanding shares, and received acceptances from, and actively engaged with, stockholders representing over 48% of our outstanding shares. We made
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officers for 2015certain, as part of this effort, to give shareholders unmediated access to our Board without the presence of management, to the extent the concerns related to executive compensation. In addition, consistent with votesthe Company’s historical practice, we held telephone conferences with proxy advisory firms, such as ISS, to stay informed on trends in favor of over 72%. In designing thegovernance and executive compensation, program and making executive compensation decisions for 2016,current thinking as to best practices, as well as to elicit meaningful feedback on initiatives the Company is considering.
Based on the constructive feedback received from our shareholders, the Compensation Committee consideredundertook to make adjustments to our executive compensation principles within the favorable resultsbounds of the 2016 advisory vote, together with the adviceCompany’s existing contractual commitments.
Below is a summary of Mercer, as more fully described below.
The Compensation Committee regularly reviews all elements of compensation to ensure thatwhat we remain competitive in the market and to ensure that overall compensation, including the mix of stock and cash, is aligned with our business objectives, our performance and the interests of our stockholders. The Compensation Committee values constructive feedbacklearned from our stockholders about executive compensation as demonstrated by its support for amendingin our named executive officer employment agreements to eliminate2019 outreach campaign and the modified single trigger for cash severance payments upon a change in control,actions we took in direct response to constructive stockholder feedback. Additionally, the 2017 Stock Incentive Plan, which was approved by the Board on March 14, 2017, and is currently presented for stockholder approval, contains certain features designed to incorporate best practices and further align the interests of employees, including our executive officers, with our stockholders. These features include a minimum vesting period of one-year applicable to all types of equity awards under the 2017 Stock Incentive Plan (subject to a 5% carve out), minimum three-year vesting periods for time-based restricted stock awards and caps on awards made under the 2017 Stock Incentive Plan.response:
Our Stockholders Expressed Concern About | How We Addressed Their Concerns | |||
Compensation Structure | ||||
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We are committedbelieve that these compensation changes demonstrate our commitment to meaningful stockholder engagement because it allows usand responsiveness to understand and consider the viewpoints of our stockholders. Throughout the year, management communicated in meetings, property visits, telephone calls and/or written communications with several significant stockholders to better understand their perspectives on overall compensation, strategy, and business operations. The Chair of our Compensation Committee routinely makes herself available to answer questions from stockholders, and has participated in such calls when so requested. During the course of these communications, we received constructive comments from these stockholders and engaged in a dialogue with them about the Company’s compensation program. The Company prides itself on its relationship with its stockholders, and on its practice of offering interested stockholders direct access to management as well as our Compensation Committee Chair to express their feedback and concerns.stockholder feedback. We will continue to actively engage in dialogue with our stockholders aboutinvestors on these and other topics and to provide transparent disclosure as to the evolution in our compensation policiesthinking and decisions, andpractices as a result of the Committee will continue to actively consider the views of our stockholders, including the results of our annual advisory vote, when making future executive compensation decisions.important feedback we received.
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EXECUTIVE COMPENSATION
The Compensation Committee uses three primary pay elements in its executive compensation program: base salary, annual cash incentive bonuses and long-term equity compensation. Two of these pay elements depend upon the performance of the executive
Base salary is intended to attract and Company, including:
an annual cash incentive bonus that is based on attainment of Company performance targets along with individual performance goals;retain talented executives and
long-term equity to provide compensation that is contingentcommensurate with the executive’s scope of responsibility and effectiveness. Cash incentive bonuses are designed to align the executive’s compensation with our short-term business goals and individual performance goals. Long-term equity compensation focuses on continued serviceachieving our long-term TSR goals and executive retention. We use long-term equity to retain our executives by rewarding them with equity
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only if they remain with us for a substantial period of time and if the executive and, for the CEO, attainment of stockholder returnCompany achieves specified average TSR goals over the vestingpreceding three-year period.
The allocation between cash andnon-cash compensation or short- and long-term compensation is reviewed periodically. A significant portion of compensation is at risk and variable depending on both short- and long-term financial performance, with the largest portion designed to incentivize executives to focus on long-term stockholder value creation. In addition, because a significant portion of each executive’s total compensation is equity-based, and to ensure our executives maintain a meaningful ownership position in the Company, we have adopted share ownership requirements that apply to our named executive officers which have been favorably viewed by certain of our stockholders. Each of our named executive officers (with the exception of Ms. Zeigler who is still in her phase-in compliance period) far exceeds these ownership requirements.
Salary is intended to attract and retain executives and to provide compensation that is commensurate with the executive’s scope of responsibility and effectiveness. Cash incentive bonuses are designed to align the executive’s compensation with the Company’s short-term business goals. Long-term equity compensation focuses on achieving the Company’s long-term TSR goals and executive retention. We use long-term equity to retain our executives by rewarding them with equity only if they remain with us for a substantial period of time. The allocation between either cash and non-cash compensation or short- and long-term compensation is established on an annual basis.
For 2016,2019, Mercer used comparable data sets from a National Association of Real Estate Investment Trusts (“NAREIT”)NAREIT survey to assess compensation levels.levels for named executive officers. This approach is consistent with the one taken since 2015, when due to changes in both the size and comparability of the Company’s historical peers, the Compensation Committee determined to rely primarily on NAREIT survey data rather than peer group information in assessingsetting executive pay.
The NAREIT survey includes 141 REITs and providesdata for 2019 represented a total of 126 REITs. The Company referenced various cuts of data including a broad market reference of similarly-sized REITs with equity markettotal capitalization of less thanunder $1.5 billion, from $1.5 billion to $3 billion, as well as retail REITS,REITs of all sizes, many of which compete with the Company for executive talent. (As of December 31, 2019, the Company’s total capitalization was approximately $1.06 billion.) Mercer furnished the Compensation Committee with a report that compared the Company’s executive officer compensation to the relevant survey data. This report was considered by the Compensation Committee in setting total compensation for 2016.2019.
Although comparisons of compensation paid to our senior management relative to compensation paid to similarly situated executives in the survey assists the Compensation Committee in determining compensation, the Compensation Committee does not benchmark pay to a specific targeted position and principally evaluates compensation based on the corporate business and strategic objectives and considerations discussed above.
The Compensation Committee determines the appropriate level and mix of compensation. The Compensation Committee also considers the individual components of compensation, as well as the total compensation received by each named executive officer, relative to each officer’s performance, the market and the Company’s other named executive officers in making its determination. The amount each executive actually earns varies based on the Company’s performance and the executive’s
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performance, contribution and overall value to the Company. The Compensation Committee also conducts an annual review of our CEO’s performance and considers these results when determining the CEO’s compensation. Our CEO plays a significant role in setting the compensation for our other members of senior management, including named executive officers, by providing the Compensation Committee with an evaluation of their performance, together with recommendations for the amount of the annual cash incentive bonus and the size of long-term equity awards. The Compensation Committee also obtains input from Mercer and has discretion to accept, reject or modify the CEO’s recommendations.
The Company does not provide material perquisites or supplemental retirement benefits.
The SEC has not yet issued final regulations regarding clawback policies under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). We intend to adopt a clawback policy in conformity with the SEC’s final regulations once they have been promulgated. We have chosen to wait to adopt a formal policy until the SEC issues its regulations to ensure that our policy will be fully compliant with the regulations as finally adopted.
Base salaries for our named executive officers depend on the scope of their responsibilities and performance. Base salary is designed to compensate the executives fairly for services rendered during the year. These salaries are compared to NAREIT executive compensation survey data. The Compensation Committee receives from Mr. Schanzer his recommended salary level for each executive officer (other than Mr. Schanzer). for its review. For 2016,2019, the base salary of Mr. Mays was unchanged and Ms. Zeigler’s initialwas increased by $36,000 as of April 1, 2019 pursuant to her contract renewal. Consistent with his 2018 contract renewal, the base salary of Mr. Schanzer was set at $400,000 pursuant to the terms of her employment agreement, and the salaries of Messrs. Schanzer and Mays remained unchanged from 2015.reduced by $50,000 beginning in January 2019.
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The Compensation Committee is required to review base salaries annually and may increase, but not further decrease, the salaries of Messrs. Schanzer and Mays and Ms. Zeigler pursuant to the terms of their respective employment agreements. In making decisions regarding executive officers’ base salaries, the Compensation Committee takes into account relevant factors, including individual performance and market compensation data.
The Compensation Committee seeks to align the interests of the named executive officers with the interests of stockholders by linking executive pay to individual performance and specified financial objectives.
In setting objectives at the beginning of the year, the Compensation Committee determined that 70% of the bonus of named executive officers would be based on the Company’s attainment of its targeted operating funds from operations (“Operating FFO”)FFO (after taking into account payment of bonuses), and 30% would be based on a qualitative evaluation of the individual performance evaluation of each of the executives. Operating FFO is a key annual earnings measurement for the Company, whichas is the case for other REITs. The Company considers Operating FFO to be a meaningful measure of financial performance because it excludes certain items thatthe Company does not believe are not indicative of the results provided by the Company’sits core operating portfolio and that affect the comparability of the Company’s period-over-period performance, such as acquisition pursuit costs, amounts relating to early extinguishment of debt gain on extinguishment of debt obligations, employee termination costs, and preferred stock redemption costs, management transition costs and certain redevelopment costs. The Company believes Operating FFO also provides a consistent basis for comparing the Company’s performance across reporting periods. The Operating FFO bonus rangestargets and actual Operating FFO for 20162019 were established as follows:
Threshold | Target | Maximum | Actual | |||||||||||||
Operating FFO | $ | 0.50 per share | $ | 0.52-$0.53 per share | $ | 0.60 per share | $ | 0.57 per share | ||||||||
Percentage of Bonus | 50% | 100% | 150% | 128.5% |
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Threshold
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| Actual
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Operating FFO
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| $0.40 per share
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| $0.45 per share
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| $0.50 per share
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| $0.45 per share
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Percentage of Bonus | 50% | 100% | 150% | 100% |
As indicated above, if Operating FFO for 20162019 had been less than $0.50$0.40 per share, the CEO, CFO and CFOCOO would not have had the right to receive any bonus with respect to Company performance for that year. If earned, the Company performance bonus percentage is computed on a linear basis between the Threshold Operating FFO per share amount to the Target Operating FFO and, likewise from the Target Operating FFO to the Maximum Operating FFO per share that is attainable after taking into account the bonus expense for all of the Company’s employees at that Operating FFO level. Operating FFO for 20162019 was $0.57$0.45 per share, significantly above the Target Operating FFO, resulting inwhich corresponded to a payout of 128.5%100% of target bonuses for each of the CEO and CFO fornamed executive officers after taking into account bonus payouts in the calculation of Operating FFO portion of their annual cash incentive bonuses.FFO. For a reconciliation of FFO and Operating FFO to net (loss) income attributable to common stockholders,shareholders, see Item 7 – “Management7—“Management Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 20162019 Annual Report.
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In early 2016,February 2020, Mr. Schanzer recommended to the Compensation Committee an annual cash incentive bonus targettargets for each of the CFO.senior executives (other than himself), including the CFO and the COO, based on performance over the prior year. The Compensation Committee reviewed the executive officers’ responsibilities and contributions and made its own assessment as to bonuses for the named executive officers, placing significant weight on the recommendations of Mr. Schanzer for Mr. Mays’ and Ms. Zeigler’s bonuses. Although Ms. Zeigler joined the company on March 31, 2016, it was determined that her significant contributions during the nine months of her tenure in 2016 earned her a bonus representing the same percentage of her guaranteed contractual bonus amount as other senior executives received of their respective target amounts.
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The Compensation Committee made the following determinationsqualitative assessments with respect to individual performance for 2016:2019:
Executive | Individual performance for | |
Mr. Schanzer | •
•
• | |
Mr. Mays | • Overall responsibility for the Company’s financial activity and an invaluable overall contributor to the Company’s
•
•
| |
Ms. Zeigler | •
• • Oversaw rebranding and community outreach campaigns to enlist support of critical constituencies. • Successfully drove occupancy, merchandising and proactive releasing of vacant anchors, hedging exposure to retail bankruptcies, throughout the Company’s |
The annual cash incentive bonuses awarded to the CEO, CFO and COO for 2019 are reflected in the“Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. Based on a qualitative assessment of the above-listed performance achievements, the Compensation Committee determined to award each of the NEOs 100% of the 30% portion of the annual bonus incentive based on individual performance.
We believe that outstanding long-term performance is achieved throughwhen executives have an ownership position that encourages athem to focus on the Company’s success over the long term.long-term success. Long-term equity awards are made to members of our senior managementeligible employees to align thetheir long-term interests of senior management with
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those of stockholders, deliver market competitive pay, provide a strong retentive hook, and aid in recruitment. At the same time, by incentivizing our senior management as stakeholders in our performance, the Company benefits on an operational level from improved productivity and efficiency gains, and the associated value creation.
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Recipients of awards under this program realize value typically over a three-year, time-basedand occasionally a five-year, vesting period. We believe that the combination of this extended vesting period with the requirements described above forrequirement that our named executive officers to continually hold a meaningfulsignificant equity position in the Company creates a strong long-term alignment of interests between those individualsdecision makers at the Company and our stockholders.
Stock awards arevest based on either performance, continued service or both, subject to acceleration of vesting in certain circumstances, at the discretion of the Compensation Committee, and as further provided in the employment agreements and/or award agreements with the named executive officers.
OurWith the exception of the CEO’s equity grants which are denominated in shares, our practice is for the Compensation Committee to approve grants of long-term equity compensation as dollar-denominated awards and then to grant a number of shares that have a fair market value equal to the aggregate dollar value of the award based on the closing price of a share of common stock on the day the grant is made.
The Compensation Committee continues to believe that TSR is the most proximate measure to align CEO pay with stockholder value creation. TSR was selected as the basis for the CEO’s performance-based long-term equity award as it ties this portion of the compensation to stockholder value, with the total value of this award corresponding to stock price appreciation and dividends. The Compensation Committee believed that absolute TSR was the appropriate measure for Company performance as: (a) it more directly aligns the interests of our CEO with our stockholders, and (b) there are few other REITs with the Company’s business strategy, making construction of a suitable performance peer group problematic.difficult.
Mr. Schanzer. WhenConsistent with the terms of his employment agreement, Mr. Schanzer was hireddid not receive an equity grant in 2011, the Committee awarded him 2,500,000 shares2019. Half of restricted stock, half of which will vest on the seventh anniversary of thehis 2018 grant date (June 15, 2018) if he remains employed byis time-based, contingent upon continuous employment with the Company, through such date, and the other half is performance-based, contingent upon attainment of which will vest on the seventh anniversary of the grant date (June 15, 2018) if Mr. Schanzer remains employed by the Company through such date and the Company’scertain TSR averages 6.5% or more per year over the seven-year vesting period. No additional shares will be awarded if average TSR exceeds 6.5% over such measurement period and, if the average TSR falls below the 6.5% threshold for the duration of such measurement period, then 50% of the CEO’s long-term equity award will not vest.targets.
Mr. Mays. In the opinion of Mr. Schanzer and the Compensation Committee, since June 2011 when Mr. Mays was retained by the Company as its Chief Financial Officer, he has been performing at an extremely high level and his contributions have been instrumental in helping the Company to achieve results and significant long-term value creation. Most recently, Mr. Mays played a key role in obtaining a $100 million unsecured debt refinancing, negotiating the East River Park Shopping Center acquisition, establishing a foothold in the D.C. market, strengthening relationships with stockholders and analysts, and improving the quality of our internal and external financial reporting. Accordingly, in 2016, to perpetuate the alignment of Mr. Mays’ interest with those of our stockholders and to provide additional retention incentives,. On January 2, 2019, the Compensation Committee awarded him 276,564Mr. Mays a grant of 129,032 shares of restricted stockas a retention incentive that will vest in full on the fifth anniversary of the grant date, (February 17, 2021) ifprovided he remainscontinues to be employed by the Company through such date. In addition, previously, to incentivize Mr. Mays to remain with the Company for the long term, in 2013On February 5, 2019, the Compensation Committee awarded himMr. Mays a grant of 369,71860,000 shares of restricted stock pursuant to his annual long-term equity award that will vest in full on the fifththird anniversary of the grant date, (March 5, 2018) ifprovided he remainscontinues to be employed by the Company through such date. Both of Mr. Mays’ multi-year
Ms. Zeigler. We did not grant any additional equity awards to Ms. Zeigler in 2019. In connection with her entry into her amended and restated employment agreement, Ms. Zeigler will be entitled to participate in the Company’s long-term incentive compensation plan pursuant to which she will be granted annual long-term restricted stock grants wereas determined in lieu of any other grants to be made for the subsequent respective three-year periods. Becausereasonable discretion of the Company’s strong performance, the valueBoard of the 2013 multi-year grant amounted to less than the value Mr. Mays would have received based on the Company’s actual performance if the grants for those years had been made annually in respect of 2013 through 2015.
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Ms. Zeigler. In the opinion of Mr. SchanzerDirectors and the Compensation Committee, since March 2016 whenCommittee. The terms of the annual LTIP grants for which Ms. Zeigler was retained byis eligible under the Company as its Chief Operating Officer, she has been performing at an extremely high level and has already become invaluable to the Company. To attract and motivate Ms. Zeigler to join the Company, to incentivize her to remain with us for the long term and to immediately align her interests with thoseterms of our stockholders, in March 2016 the Compensation Committee awarded her a new hire stock grant of 13,831 shares of restricted stock (an amount equal to approximately $100,000), which vests in full on the third anniversary of grant (March 31, 2019) provided Ms. Zeigler remains employed by the Company through such date.
Grants of Plan-Based Awards for Year Ended December 31, 2016
The following table presents the range of possible payouts of equity and non-equity incentive awards granted to the named executive officers in 2016:
Estimated Possible Payouts |
Estimated Future Payouts | All Other of Shares | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Full Fair Value ($) | |||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
Bruce J. Schanzer | N/A | 400,000 | 800,000 | 1,200,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||
Philip R. Mays | N/A | 181,082 | 362,164 | 543,246 | — | — | — | 276,564 | — | — | 1,899,995 | |||||||||||||||||||||||
Robin M. Zeigler | N/A | — | — | — | — | — | — | 13,831 | — | — | 99,998 |
The annual cash incentive bonuses actually awarded to the CEO and CFO are reflected in the “Non-Equity Incentive Plan Compensation” column in the Summary Compensation Table. The actual bonus awarded to Ms. Zeigler for 2016 under her employment agreement and basedare described more fully below on Company and individual performance is set forthpage 46 in the “Bonus” columnsection entitled “Employment Agreements with Named Executive Officers — New COO Employment Agreement.”
During 2019, the Company had employment agreements with each of its named executive officers: Messrs. Schanzer and Mays, and Ms. Zeigler. Effective April 2019, upon the Summary Compensation Table.natural expiration of Ms. Zeigler’s employment agreement, the Company entered into a new employment agreement with Ms. Zeigler, taking into account current thinking as to best compensation practices and constructive input from our stockholders. The agreements are described in detail on page 43 in the section entitled “Employment Agreements With Named Executive Officers.”
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The only material perquisites provided to our named executive officers relate to automobile payments and reimbursement for certain expenses incurred and, for Ms. Zeigler in 2016, a relocation incentive.incurred. Our named executive officers need vehicles for frequent business-related travel. No other material perquisites are provided. In addition, our named executive officers are not entitled to U.S. Federal income taxgross-ups on any perquisites that are provided.
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Named executive officers are given the opportunity to participate in the Company’stax-qualified 401(k) plans providing for employer and employee contributions. In 2016,2019, the Company matched 100% of the first 3% of eligible employee compensation contributed and 50% of the next 2% of eligible employee compensation contributed up to the annual limit of 4% of eligible compensation, which amounts to $10,600$11,200 per recipient.
recipient for 2019. The Company does not provide supplemental retirement benefits. Messrs. Schanzer and Mays and Ms. Zeigler each received the maximum match. Ms. Zeigler received a match of $6,288, which was limited by her contribution to her former employer’s 401(k) plan.
Several members of our senior executives,management team, including Messrs. Schanzer and Mays and Ms. Zeigler, participate in the Company’s 2005 Cedar Realty Trust, Inc. Deferred Compensation Plan (“Rabbi Trust Plan”). Under this deferred compensation plan, participants may defer a portion of their compensationbase salaries and cash bonuses paid in cash on apre-tax basis and receive atax-deferred return on such amounts based on the performance of specific investments selected by the participants. Participants may also defer share awards made under the Company’s 20122017 Stock Incentive Plan, as well as related dividends. In connection with this plan, the Company has established a “rabbi trust” overseen by an independent trustee (the “Rabbi Trust”) wherein the trustee is directed to make investments of the deferred cash amounts which track as closely as possible to those selected by each participant in order to generally match its liabilities to the participants under the deferred compensation plan with equivalent assets and thereby limit market risk. Generally, cash deferrals
The SEC has not yet issued final regulations regarding clawback policies under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). We intend to adopt a clawback policy in conformity with the SEC’s final regulations once they have been promulgated. We have chosen to wait to adopt a formal policy until the SEC issues its regulations to ensure that our policy will be distributed in a lump sum onfully compliant with the earlierregulations as finally adopted.
Anti-Hedging and Anti-Pledging Policy
We do not consider it appropriate for any of the first dayCompany’s officers, directors or employees to enter into speculative transactions in the Company’s securities that are designed to hedge or offset any decrease in market value of the 61st month followingCompany’s securities. As a result, the end of the calendar year to which such deferral relates,Company prohibits officers, directors or as soon as practicable after the participant’s separationemployees from service for any reasonpurchasing puts, calls, options or other than death or retirement (or six months thereafter, in the case of any participant who is a “specified employee” within the meaning of Code Section 409A), unless the participant elects to receive the distribution in installments, or to otherwise further defer the distribution, as provided in the Rabbi Trust Plan. Generally, share deferrals will be distributed in a lump sum on the later of (a) the first business day of the January next following the third anniversary date of the grant, or (b) the first business day of the January next following the date on which the share deferrals are scheduled to vest in their entiretyderivative securities based on the original vesting schedule, unlessCompany’s securities or its correlates. The policy also prohibits hedging or monetization transactions, such as forward sale contracts, equity swaps, collars and exchange funds. Officers, directors and employees may also not purchase securities of the participant electsCompany on margin, borrow against any account in which the Company’s securities are held or otherwise pledge any securities of the Company.
The Compensation Committee believes that management should have a significant ownership interest and has implemented share ownership guidelines for the named executive officers to receivemore closely align their interests with those of stockholders. The number of shares of our common stock that an executive must own is set as a multiple of the distributionexecutive’s base salary. Unearned performance shares
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and restricted stock units and unvested restricted stock count toward an executive’s ownership of our common stock under the guidelines. For the CEO, the multiple is four times base salary, while for the other named executive officers, the multiple is two times base salary, in installments,each case with a four-yearphase-in period.
Named Executive Officer | Stock Ownership Target as a Multiple of Salary | In Compliance* (Yes/No) | ||
Bruce J. Schanzer | 4x | Yes | ||
Philip R. Mays | 2x | Yes | ||
Robin M. Zeigler | 2x | Yes |
* | As of December 31, 2019. |
The Compensation Committee assesses executive compensation, and particularly annual cash incentive bonuses and long-term incentive compensation, in light of corporate and operational risks facing the Company. Based on these assessments, our executive compensation program includes risk mitigating features, such as: balance between short- and long-term incentives, cash versus equity pay, fixed versus variable pay, multiple performance measures, and anti-hedging and anti-pledging policies.
The Company’s share ownership requirements for named executive officers further mitigates risk by reinforcing alignment of executives’ incentives with Company performance.
Compensation Risk Management Features |
• Mix of fixed and variable pay |
• Balanced, risk-adjusted performance measures |
• Pay-for-performance process that bases individual awards on Company financial results and stock performance |
• Deferral of a majority of variable compensation through equity-based awards |
• Substantial stock ownership for directors and executive officers ensuring alignment with stockholders |
Tax Deductibility of Compensation
The financial reporting and income tax consequences to the Company of the compensation components for executive officers are considered by the Compensation Committee in analyzing the level and mix of compensation. Section 162(m) of the Internal Revenue Code (the “Code”) prohibits a publicly traded company from taking a tax deduction for compensation in excess of $1 million paid to the chief executive officer and certain of its other most highly compensated executive officers who are “covered employees” under Section 162(m). Certain “performance-based compensation” with respect to taxable years beginning on or before December 31, 2017 or payable pursuant to otherwise further defera binding written agreement in effect on and not materially modified after November 2, 2017, is excluded from this $1 million cap. The Compensation Committee continues to evaluate the distribution,deductibility of executive compensation, while retaining the discretion it deems necessary to compensate the Company’s executive officers as providedit determines appropriate.
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Compensation Committee Report
The Compensation Committee and management of the Company reviewed and discussed the Compensation Discussion and Analysis required by the Securities Exchange Act of 1934. Based on such review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into our 2019 Annual Report.
The Compensation Committee
Gregg A. Gonsalves
Pamela N. Hootkin*
Sabrina L. Kanner
Roger M. Widmann
* | Compensation Committee Chair. |
Compensation Committee Interlocks and Insider Participation
Gregg A. Gonsalves, Pamela N. Hootkin., Sabrina L. Kanner, and Roger M. Widmann were members of the Rabbi Trust Plan.Compensation Committee during the year ended December 31, 2019. No member of the Compensation Committee during 2019 was an officer, employee or former officer of ours or any of our subsidiaries or had any relationship that would be considered a compensation committee interlock requiring disclosure in this Proxy Statement pursuant to SEC regulations. None of the executive officers of the Company have served on a board of directors or compensation committee of any other entity that has had any of such entity’s executive officers serve either on the Company’s Board or Compensation Committee.
The following table sets forth information regarding compensation paid by the Company to Messrs. Schanzer and Mays and Ms. Zeigler, for fiscal years ended December 31, 2019, 2018 and 2017, reflecting compensation decisions made prior to the rapidly unfoldingCOVID-19 pandemic:
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(2) ($) | Non-Equity Incentive Plan Compensation(1)(3) ($) | All Other Compensation(4) ($) | Total ($) | ||||||||||||||||||||||||||||
Bruce J. Schanzer President and Chief Executive Officer | 2019 2018 2017 | 750,000 800,000 800,000 | — — — | — 9,082,500 — | 720,000 720,000 640,000 | 33,630 33,430 29,388 | 1,503,630 10,635,930 1,469,388 | ||||||||||||||||||||||||||||
Philip R. Mays Executive Vice President And Chief Financial Officer | 2019 2018 2017 | 400,000 400,000 400,000 | — — — | 609,999 — — | 342,000 342,000 304,000 | 17,200 17,000 16,800 | 1,369,199 759,000 720,800 | ||||||||||||||||||||||||||||
Robin M. Zeigler Executive Vice President And Chief Operating Officer | 2019 2018 2017 | 436,000 400,000 400,000 | — — — | — 1,800,000 560,000 | 342,000 342,000 304,000 | 17,200 17,000 16,800 | 795,200 2,559,000 1,280,000 |
(1) | Amounts shown include amounts deferred at the election of the named executive officers into the Company’s 401(k) plan, to the extent applicable. |
(2) | This column represents the grant date fair value of long-term equity awards granted under the Company’s Stock Incentive Plans. The number of shares granted is calculated in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”), not including any estimates of forfeitures related to service-based vesting conditions. The amount reported for Mr. Schanzer in 2018 includes $4,702,500 for performance-based RSUs valued in accordance with FASB ASC Topic 718. Assuming the highest level of performance conditions will be achieved, Mr. Schanzer’s performance-based |
40 |2020 Proxy Statement
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RSU award had a value of $6,570,000 based on the share price on the grant date. See Notes 2 and 14 to the financial statements in our 2019 Annual Report regarding assumptions we made in determining the fair value of stock awards. Amounts shown include amounts deferred at the election of the named executive officers under the Rabbi Trust Plan described above. See section above entitled, “Executive Compensation — Long-Term Compensation” for a more complete description of the equity awards granted to Mr. Schanzer in connection his new employment agreement. |
(3) | Represents cash incentive bonuses earned with respect to the years indicated based upon the achievement of corporate and individual performance goals. See the section above entitled, “Executive Compensation — Annual Cash Incentive Bonus” for a description of the performance goals and process for determining annual cash bonus amounts. |
(4) | For 2019 and 2018, consists of matching contributions made by the Company on behalf of the named executive officers to its 401(k) plan and automobile allowances and related expenses. |
Grants of Plan-Based Awards for Year Ended December 31, 2019
The following table represents nonqualified deferred compensation held bypresents the range of possible payouts of equity andnon-equity incentive awards granted to the named executive officers in the Company’s Rabbi Trust2019:
Estimated Possible Payouts UnderNon-Equity Incentive |
Estimated Future Payouts Under Equity Incentive | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of ($) | |||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||
Bruce J. Schanzer | N/A | 375,000 | 750,000 | 1,125,000 | — | — | — | — | — | |||||||||||||||||||||||||
Philip R. Mays | N/A 1/2/2019 2/5/2019 | | 190,000 — — |
| | 380,000 — — |
| | 570,000 — — |
| | — — — |
| | — — — |
| | — — — |
| | — 129,032 60,000 |
| | — 399,999 210,000 |
| |||||||||
Robin M. Zeigler | N/A | 207,100 | 414,200 | 621,300 | — | — | — | — | — |
Outstanding Equity Awards at Fiscal Year Ended December 31, 2019
The following table sets forth outstanding equity awards held by our named executive officers as of December 31, 2016:2019:
Stock Awards
| ||||||||
Name
| Number of Shares or Units of Time-Based Stock That Have Not Vested (#)
| Market Value of Shares or Units of Time-Based Stock That Have Not Vested ($)(1)
| Number of Unearned
| Market or Payout Value of
| ||||
Bruce J. Schanzer | 1,000,000(2) | 2,950,000 | 500,000(8) | 1,475,000 | ||||
Philip R. Mays | 276,564(3) 129,032(4) 60,000(5) | 815,864 380,644 177,000 | — — — | — — — | ||||
Robin M. Zeigler | 93,178(6) | 274,875 | — | — | ||||
386,266(7) | 1,139,485 | — | — |
(1) | Based on the $2.95 closing price of a share of the Company’s common stock on December 31, 2019. |
(2) | These shares are scheduled to vest in full on June 15, 2023, the fifth anniversary of their date of grant, provided that Mr. Schanzer remains employed by us through such date. |
(3) | These shares are scheduled to vest in full on February 17, 2021, the fifth anniversary of their date of grant, provided that Mr. Mays remains employed by us through such date. |
(4) | These shares, awarded pursuant to a retention incentive, are scheduled to vest in full on January 2, 2024, the fifth anniversary of their date of grant, provided that Mr. Mays remains employed by us through such date. |
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EXECUTIVE COMPENSATION
(5) | These shares, awarded pursuant to the annual long-term equity incentive program for senior executives, are scheduled to vest in full on February 5, 2022, the third anniversary of their date of grant, provided that Mr. Mays remains employed by us through such date. |
(6) | These shares are scheduled to vest in full on February 22, 2020, the third anniversary of their date of grant, provided that Ms. Zeigler remains employed by us through such date. |
(7) | These shares are scheduled to vest in full on February 7, 2023, the fifth anniversary of their date of grant, provided that Ms. Zeigler remains employed by us through such date. This grant is in lieu of any other grants to be made for the following three-year period. |
(8) | Represents the threshold number of shares subject to the performance-based award under the terms of the CEO employment agreement. |
Option Exercises and Stock Vested
No options were granted by the Company or exercised during the fiscal year ended December 31, 2019. None of the named executive officers have ever been granted stock options. The following table sets forth, for each of the named executive officers, information with respect to vesting of restricted stock awards during the year ended December 31, 2019:
Stock Awards | ||||
Name | Number of Shares | Value Realized on Vesting ($)(2) | ||
Bruce J. Schanzer | — | — | ||
Philip R. Mays | — | — | ||
Robin M. Zeigler | 13,831 | 47,025(3) |
(1) | Includes shares that vested, but the receipt of which was deferred pursuant to a “Rabbi Trust” plan. Under this plan, each participant selects the period of time over which receipt of the shares will be deferred, subject to earlier receipt upon death, disability and other events specified in the plan. The amount deferred for Ms. Zeigler was 13,831 shares, having a value of $47,025 at the time of vesting. |
(2) | The value realized on vesting is based on the closing market price per share of our common stock on the NYSE on the day preceding the vesting date, multiplied by the number of restricted stock units that vested. |
(3) | Based on a $3.40 closing price per share of common stock on March 29, 2019. |
Nonqualified Deferred Compensation
Several of our senior executives, including Messrs. Schanzer and Mays and Ms. Zeigler, participate in the Rabbi Trust Plan. Under this deferred compensation plan, participants may defer a portion of their cash salaries and bonuses on apre-tax basis and receive atax-deferred return on such amounts based on the performance of specific investments selected by the participants. Participants may also defer share awards made under the 2017 Stock Incentive Plan, as well as related dividends. In connection with this plan, the Company has established the “Rabbi Trust” wherein the trustee is directed to make investments of the deferred cash amounts which track as closely as possible to those selected by each participant in order to generally match its liabilities to the participants under the deferred compensation plan with equivalent assets and thereby limit market risk. Generally, cash deferrals will be distributed in a lump sum on the earlier of the first day of the 61st month following the end of the calendar year to which such deferral relates, or as soon as practicable after the participant’s separation from service for any reason other than death or retirement (or six months thereafter, in the case of any participant who is a “specified employee” within the meaning of Code Section 409A), unless the participant elects to receive the distribution in installments, or to otherwise further defer the distribution, as provided in the Rabbi Trust Plan. Generally, share deferrals will be distributed in a lump sum on the later of (a) the first business day of the January next following the third anniversary date of the grant, or (b) the first business day of the January next following the date on which the share deferrals are scheduled to vest in their entirety based on the original vesting schedule, unless the participant elects to receive the distribution in installments, or to otherwise further defer the distribution, as provided in the Rabbi Trust Plan. In the event of a termination or constructive termination of the Rabbi Trust Plan, such plan provides for an income tax gross up on plan benefits distributed upon such termination or constructive termination.
Name | Executive Contributions in 2016($)(1) | Registrant Contributions in 2016($) | Aggregate Earnings in 2016($)(2) | Aggregate Withdrawals/ Distributions in 2016($) | Aggregate Balance at December 31, 2016($)(3) | |||||||||||||||
Bruce J. Schanzer | — | N/A | (1,306,250 | ) | — | 15,508,750 | ||||||||||||||
Philip R. Mays | 1,899,995 | N/A | (94,032 | ) | (613,107 | ) | 1,805,963 | |||||||||||||
Robin M. Zeigler | 99,998 | N/A | (9,682 | ) | — | 90,316 |
42 |2020 Proxy Statement
EXECUTIVE COMPENSATION
The following table represents nonqualified deferred compensation held by named executive officers in the Company’s Rabbi Trust as of December 31, 2019:
Name
| Executive Contributions in 2019($)(1)
| Registrant Contributions in 2019($)
| Aggregate Earnings in 2019($)(2)
| Cancellation/ Forfeitures
| Aggregate Withdrawals/
| Aggregate Balance at
| ||||||||||||||||||||||||
Bruce J. Schanzer
|
| 1,095,000
|
| N/A
|
| (690,000
| )
|
| —
|
|
| (785,000
| )
|
| 5,900,000
|
| ||||||||||||||
Philip R. Mays
|
| 399,999
|
| N/A
|
| (71,902
| )
|
| —
|
|
| —
|
|
| 1,196,508
|
| ||||||||||||||
Robin M. Zeigler
|
| —
|
| N/A
|
| (20,332
| )
|
| —
|
|
| —
|
|
| 315,677
|
|
(1) | Named executive officer contributions are included in the “Stock Awards” column of the Summary Compensation Table. |
(2) | The losses in this column represent loss in value due to decrease in share price during the calendar year |
(3) | All holdings are in Company shares, with values based on the |
The Company does not consider it appropriate for any of its officers, directors or employees to enter into speculative transactions in the Company’s securities that are designed to hedge or offset any
38 |2017 Proxy Statement
EXECUTIVE COMPENSATION
decrease in market value of the Company’s securities. As a result, the Company prohibits officers, directors or employees from purchasing puts, calls, options or other derivative securities based on the Company’s securities or its correlates. The policy also prohibits hedging or monetization transactions, such as forward sale contracts, equity swaps, collars and exchange funds. Officers, directors and employees may also not purchase securities of the Company on margin, borrow against any account in which the Company’s securities are held or otherwise pledge any securities of the Company.
The Committee believes that management should have a meaningful ownership interest in the Company and, to that end, has implemented share ownership guidelines for the named executive officers to more closely align their interests with those of the stockholders. The number of shares of our common stock that an executive must own is set as a multiple of the executive’s base salary. Unearned performance shares and unvested restricted stock count towards an executive’s ownership of our common stock under the guidelines. For the CEO, the multiple is four times base salary, while for the other named executive officers the multiple is two times base salary, in each case with a four-year phase-in period.
| ||||
| ||||
|
Tax Deductibility of Compensation
The financial reporting and income tax consequences to the Company of the compensation components for executive officers are considered by the Compensation Committee in analyzing the level and mix of compensation. Section 162(m) of the Code prohibits publicly traded companies from taking a tax deduction for compensation in excess of $1 million paid to the chief executive officer or certain of its other most highly compensated executive officers who are “covered employees” under Section 162(m). Certain “performance-based compensation” is excluded from this $1 million cap. The Compensation Committee continues to evaluate the deductibility of executive compensation, while retaining the discretion it deems necessary to compensate the Company’s executive officers as it determines appropriate.
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EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid by the Company to Messrs. Schanzer and Mays and Ms. Zeigler, for fiscal years ended December 31, 2014, 2015 and 2016:
Name and Principal Position | Year | Salary(1) ($) | Bonus ($) | Stock Awards(4) ($) | Non-Equity ($) | All Other Compensation(6) ($) | Total ($) | |||||||||||||||||||||
Bruce J. Schanzer President and Chief Executive Officer | | 2016 2015 2014 |
| | 800,000 800,000 800,000 |
| | — — — |
| | — — — |
| | 1,028,000 866,667 700,000 |
| | 30,522 30,422 28,320 |
| | 1,858,522 1,697,089 1,528,320 |
| |||||||
Philip R. Mays Executive Vice President and Chief Financial Officer | | 2016 2015 2014 |
| | 381,225 381,225 381,225 |
| | — — — |
| | 1,899,995 — — |
| | 465,380 392,344 362,164 |
| | 16,600 16,300 16,100 |
| | 2,763,200 789,869 759,489 |
| |||||||
Robin M. Zeigler Executive Vice President and Chief Operating Officer | 2016 | 295,385 | (2) | 535,500 | (3) | 99,998 | — | 191,152 | 1,122,035 |
Employment Agreements withWith Named Executive Officers
During 2016,2018, the Company had employment agreements with each of its named executive officers: Messrs. Schanzer and Mays, and Ms. Zeigler.
On May 31, 2011, Mr. Schanzer Effective April 2019, upon the natural expiration of Ms. Zeigler’s employment agreement, the Company entered into a seven-yearnew employment agreement effectivewith Ms. Zeigler, taking into account current thinking as ofto best compensation practices and constructive input from our stockholders.
CEO Employment Agreement
Effective June 15, 2011,2018, the Company entered into an amended and restated employment agreement with Mr. Schanzer, pursuant to which Mr. Schanzer will continue to serve as the Company’s President and Chief Executive Officer at an annualof the Company. Below is a summary of the material terms of the amended and restated employment agreement.
Base Salary
Reduction in base salary ofcommencing January 1, 2019 from $800,000 to $750,000 per annum, subject to annual discretionary increases. Mr. Schanzer participatesreview and increase in the Company’sdiscretion of the full Board.
Bonus
Target annual bonus plan for senior executive officers. Mr. Schanzer also received a long-term incentive compensation grantequal to 100% of 2,500,000base salary, subject to the achievement of performance criteria established by the Board or Compensation Committee.
Long-Term Incentive Compensation (Time- and Performance-Based)
Initial time-based grants of 750,000 restricted shares of common stock, and 250,000 restricted shares of common stock of the Company on June 15, 2018 and January 2, 2019, respectively, amounting in 2011, one-half ofthe aggregate to $4.38 million, which will vest in full on the seventhfifth anniversary of the effective date of the agreement (June 15, 2023), subject to Mr. Schanzer’s continued employment by the Company through such date.
Grant of 1,500,000 performance-based RSUs and associated DERs of the Company on June 15, 2018, which will vest and be earned, if at all, based on the Company’s Average Annual TSR over a five-year performance period as set forth in the employment agreement, with the ability to earn up to 50% of such grant at the conclusion of an interim three-year measurement period. The target number of RSUs subject to the award is 1,000,000 and is based on achievement of 6.5% Average Annual TSR. In order for any portion of the RSUs to vest and be earned, our Average Annual TSR for the relevant performance period must be at least 4%. The associated DERs are not paid until the performance criteria are achieved and
2020 Proxy Statement| 43
EXECUTIVE COMPENSATION
will be forfeited to the extent such criteria are not achieved. See the section entitled “Executive Compensation — Long-Term Compensation” above for additional information regarding the performance-based RSUs granted to Mr. Schanzer. |
If the RSUs vest and if the Company’s Average Annual TSR return for the period between June 15, 2018 and the June 15, 2023 (or, if the RSUs vest earlier pursuant to the terms of Mr. Schanzer’s employment agreement, the date on which the RSUs vest) is greater than 10%, Mr. Schanzer shall be entitled to a cash amount equal to (i) (A) 500,000 multiplied by (B) a fraction, the numerator of which is the Company’s average annual total shareholder return minus 10% (expressed as a number rather than a percentage) and the denominator of which is ten, (provided that, in no event shall such fraction be greater than one multiplied, by (ii) (x) if such vesting occurs in connection with a Change in Control, the per share sale price in the Change in Control and (y) in all other circumstances, the average closing price of our common stock for the 20 trading days prior to such vesting date. No additional cash payment will be made for average annual total shareholder return above 20%.
Term
Five years.
Payments to CEO Upon Termination
Upon a termination of Mr. Schanzer’s employment by the Company without “cause,” Mr. Schanzer’s resignation for “good reason,” termination of Mr. Schanzer’s employment by reason of death or disability or a “change in control” (all as defined in the employment agreement), the time-based restricted stock awards are subject to full acceleration and the RSUs and DERs are subject to acceleration as set forth in the employment agreement.
If Mr. Schanzer’s employment is terminated by the Company without cause or by Mr. Schanzer for good reason, or his employment is terminated by the Company by reason of death or disability, the employment agreement provides that, subject to his execution of a separation agreement and release, he will be entitled to receive a lump sum cash payment equal to 250% of the sum of his annual base salary at the rate applicable on the date of termination and his target annual bonus for the year of termination. In addition, pursuant to the terms of the employment agreement, the Company is required to provide Mr. Schanzer with disability, accident and health insurance substantially similar to those insurance benefits that Mr. Schanzer was receiving immediately prior to the date of termination for 12 months following the date of termination or a cash payment in lieu thereof (reduced to the extent comparable benefits are actually received by Mr. Schanzer during such period) and accelerated vesting of any options, restricted common stock, and restricted stock units granted to Mr. Schanzer, including the equity awards granted pursuant to the employment agreement. Any amounts payable in the event of death or disability will be reduced by the amounts payable under any life or disability insurance policy sponsored by the Company and/or the Operating Partnership.
If the Company terminates Mr. Schanzer’s employment following the expiration of the term of the employment agreement or Mr. Schanzer terminates his employment following of the expiration of the term of the employment agreement due to the Company’s failure to continue to provide Mr. Schanzer with base salary and annual target bonus opportunities that are in the aggregate at least as favorable as those contained in the employment agreement; and/or the Company’s failure to negotiate in good faith regarding equity incentive awards following the expiration of the term of the employment agreement, subject to his execution of a separation agreement and release, Mr. Schanzer will be entitled to receive a lump sum cash payment equal to 150% of the sum of his annual base salary at the rate applicable on the date of termination and his target annual bonus for the year of termination.
40 44 | 20172020 Proxy Statement
EXECUTIVE COMPENSATION
anniversary ofPayments to the grant date (June 15, 2018) if Mr. Schanzer remains employed byCEO upon termination are summarized in the table on page 47 entitled, “Payments Upon Termination Without Cause or Due to Death or Disability or By Executive for Good Reason.” References to the Company through such date, withabove include, where applicable, the other one-half to vest on the seventh anniversary of the date of grant (June 15, 2018) if Mr. Schanzer remains employed byOperating Partnership.
CFO Employment Agreement
Effective June 6, 2018, the Company through such dateentered into an amended and the Company’s TSR (as determined in accordancerestated employment agreement with his employment agreement) for such seven years averages 6.5% or more per year.
On July 15, 2015, Mr. Mays, entered into a three-year employment agreement, effective as of June 6, 2015,pursuant to which Mr. Mays will continue to serve as Executive Vice President, Chief Financial Officer and Treasurer of the Company, on terms substantially similarCompany.
Base Salary
Base salary to Mr. Mays’ prior employment agreement withremain at the Company as Chief Financial Officer. The agreement provides for an annual base salaryrate of $381,225,$400,000 per annum, subject to annual discretionary increases. Mr. Mays will also continue to participatereview and increase in the Company’sdiscretion of the full Board.
Bonus
Target annual bonus plan for senior executive officers and will continueequal to be entitled to participate in the Company’s long-term incentive compensation plan,95% of base salary, consistent with prior agreement, subject to the discretion of and the requirements established by the Board, upon recommendation of the Compensation Committee.
Long-Term Incentive Compensation (Time- and Performance-Based)
Participation in Company’s long-term incentive compensation plan, with annual awards within the discretion of, and subject to requirements established by the Board, based on recommendations of the Compensation Committee.
Term
“At-will”, meaning that subject to the terms of the agreement, Mr. Mays’ employment may be terminated by the Company or Mr. Mays at any time and for any reason.
Payments to CFO Upon Termination
If Mr. Mays’ employment with the Company is terminated for any reason, his employment agreement provides that Mr. Mays (or his authorized representative or estate) will be entitled to receive (i) payment of any base salary earned through the date of termination, unpaid expense reimbursements and accrued unused vacation; and (ii) any vested benefits Mr. Mays may have under any employee benefit or compensation plan of the Company or the Operating Partnership through the date of termination, which vested benefits are required to be paid and/or provided in accordance with the terms of such employee benefit or compensation plans.
In addition, if Mr. Mays’ employment is terminated by the Company without cause or by Mr. Mays for good reason, the employment agreement provides that, subject to his execution of a general release, he will be entitled to receive a lump sum cash payment equal to 150% (250% if terminated within 90 days prior to or 12 months following a Change in Control (as defined in the employment agreement)) of the sum of his annual base salary at the rate applicable on the date of termination and his target annual bonus for the year of termination, exclusive of any long-term incentive stock awards.
In addition, pursuant to the terms of his employment agreement, if Mr. Mays’ employment is terminated by the Company without cause or by Mr. Mays for good reason, or by reason of death or disability, the Company is required to provide Mr. Mays with (i) disability, accident and health insurance substantially similar to those insurance benefits that Mr. Mays was receiving immediately prior to the date of termination for 12 months (24 months if terminated within 90 days prior to or 12 months following a Change in Control) following the date of termination or a cash payment in lieu thereof (reduced to the extent comparable benefits are actually received by Mr. Mays during such period) and (ii) accelerated
2020 Proxy Statement| 45
EXECUTIVE COMPENSATION
vesting of any options, restricted common stock, and any other awards granted to Mr. Mays under any employee benefit plan that have vested. In addition, if Mr. Mays’ employment is terminated by reason of disability, the employment agreement provides that he will be entitled to receive a lump sum payment equal to his annual base salary at the rate applicable on the date of termination. Any amounts payable in the event of death or disability will be reduced by the amounts payable under any life or disability insurance policy sponsored by the Company.
Payments to the CFO upon termination are summarized in the table on page 47 entitled, “Payments Upon a Change in Control with Termination.” References to the Company above include, where applicable, the Operating Partnership.
New COO Employment Agreement
Effective April 1, 2019, the Company entered into an amended and restated employment agreement with Ms. Zeigler, pursuant to which Ms. Zeigler continues to serve as Executive Vice President, Chief Operating Officer of the Company.
Base Salary
$436,000 per annum, subject to annual review and increase in the discretion of the full Board.
Bonus
Target annual bonus equal to 95% of base salary, subject to the discretion of and requirements established by the Board, upon recommendation of the Compensation Committee.
On February 26, 2016,Term
Four years.
Payments to COO Upon Termination
If Ms. Zeigler’s employment is terminated by the Company without “cause” or by Ms. Zeigler entered into a three-yearfor “good reason,” or her employment is terminated by the Company by reason of death or disability (all as defined in the employment agreement), the employment agreement effective asprovides that, subject to her execution of March 31, 2016,a separation agreement and release, she will be entitled to serve asreceive a lump sum cash payment equal to 250% of the Company’s Chief Operating Officer. The agreement provides for ansum of her annual base salary of $400,000, subject to annual discretionary increases. Uponat the commencement of her employment, Ms. Zeigler was paid a signing bonus of $150,000 and received a new hire stock grant in an amount equal to $100,000, which vests in fullrate applicable on the third anniversarydate of grant, provided Ms. Zeigler remains employed with the Company through such date. Ms. Zeigler will also be eligible to participate in the Company’stermination and her targeted annual bonus plan for senior executive officers. Ms. Zeigler also received a guaranteed bonusthe then-current fiscal year, exclusive of $300,000 for 2016any long-term incentive stock awards.
In addition, pursuant to the terms of her employment agreement. Based on Company and individual performance, Ms. Zeigler received an additional $85,500 in bonus compensation, commensurate with the percentage payout of target bonus received by senior management. In connection withagreement, if Ms. Zeigler’s move to New York, the Company provided $100,000 as a relocation incentive.
On August 4, 2016, largely in response to constructive feedback from our stockholders, the Company entered into amended and restated employment agreements with Messrs. Schanzer and Mays and Ms. Zeigler for the purpose of removing the “modified single trigger” provision in the original employment agreements that required the Company to provide cash severance payments to an executive officer following a change in control. Under the amended and restated employment agreements, cash severance is payable only if an executive officer is terminated by the Company or the Partnership other than for cause (as defined in the amended and restated employment agreements) or on account of death or disability, or if such executive officer resigns for good reason (as defined in the amended and restated employment agreements), which no longer includes a change in control. Additionally, the employment agreements with the Company executives were amended to add a provision which clarifies that nothing in the employment agreement shall prohibit a Company executive from making any disclosures to a governmental agency that are protected under the whistleblower provisions of applicable federal or state law or regulation, and to expressly note the whistleblower immunity granted to the Company executives under the Defend Trade Secrets Act of 2016. There were no changes made to the base salary or target bonus of any of the named executive officers and no compensation was paid to them to relinquish the modified single trigger with respect to cash severance payments following a change in control.
Under each employment agreement, a named executive officer’s employment will terminate automatically upon retirement, death or disability, without payment of any additional compensation, other than accelerated vesting of restricted stock which may be available in certain circumstances.
2017 Proxy Statement| 41
EXECUTIVE COMPENSATION
Upon the termination of employment by the Company for cause or by the executive without good reason, no additional compensation will be due to such named executive officer. In the event of termination of a named executive officer’s employment with the Company without cause or by the named executive officerMs. Zeigler for good reason, unless otherwise agreed, the named executive officer is entitled to receive from the Company:
for Mr. Schanzer, provided he executes and delivers an agreement releasingor by reason of death or disability, the Company from all liability,is required to provide Ms. Zeigler with (i) disability, accident and health insurance substantially similar to those insurance benefits that Ms. Zeigler was receiving immediately prior to the date of termination for 12 months following the date of termination or a lump sum cash payment equal to two and one-half times the sum of Mr. Schanzer’s annual base salary and his average annual bonuses for the preceding two fiscal years;
for Mr. Mays and Ms. Zeigler, provided he or she signs and delivers a general release of any and all claims, a lump sum payment equal to two and one-half times the sum of the executive’s annual base salary and the higher of the executive’s annual bonus in the preceding two full fiscal years;
continuation of health insurance benefits for up to 12 months (to be reducedlieu thereof (reduced to the extent the executive receives comparable benefits);benefits are actually received by Ms. Zeigler during such period) and
acceleration of (ii) accelerated vesting of allany options, restricted sharescommon stock, and any other awards granted to Ms. Zeigler under the Company’sany employee benefit plans.plan that have vested.
UnderPayments to the employment agreements, “good reason” means:
material breach byCOO upon termination are summarized in the table on page 47 entitled, “Payments Upon a Change in Control with Termination.” References to the Company or Partnership ofabove include, where applicable, the terms of the employment agreement;Operating Partnership.
46 |2020 Proxy Statement
a material reduction in the executive’s duties or responsibilities; orEXECUTIVE COMPENSATION
the relocation of the Executive’s office or the Company’s or Partnership’s executive offices to a location more than 30 miles from the Company’s Port Washington office.Restrictive Covenants
Each employment agreement also provides that each executive will not compete with the Company or hire any employees of the Company (with the exception of Ms. Zeigler’s executive assistant) for a period of one year after the termination of the executive’s employment if such termination occurs within(unless, in the termcase of the employment agreement, unlessMs. Zeigler, her employment is terminated by the Company without cause or by the executiveher for good reason.reason).
The tables below set forth the estimated severance payments that would have been made to each of our named executive officers based on a hypothetical termination date or Change in Control date of December 31, 20162019 and using the closing price of our stock on December 30, 2016, the last trading day of 2016, in the event of a termination by the Company without cause or by the executive for good reason.31, 2019. These amounts are estimates and the actual amounts to be paid can be determined only at the time of the termination of the executive’s employment without cause or by the executive for good reason.reason or upon a Change in Control. Under each employment agreement, there are also various circumstances under which termination of employment results in no severance due.
Payments Upon Termination Without Cause or Due to Death or Disability or By Executive for Good Reason
Name | Cash Compensation | Value of Stock Awards | Medical and Other Benefits | Total ($) | ||||||||||||
Bruce J. Schanzer | 4,368,334 | 16,325,000 | 26,554 | 20,719,888 | ||||||||||||
Philip R. Mays | 2,116,513 | 4,220,222 | 26,554 | 6,363,289 | ||||||||||||
Robin M. Zeigler | 1,963,950 | 90,316 | 26,114 | 2,080,380 |
42 |2017 Proxy Statement
EXECUTIVE COMPENSATION
The following table sets forth information with respectthe estimated severance payments that would have been made to outstanding equity awards ateach of our named executive officers in the event of a termination by the Company without cause or by the executive for good reason, or (i) for Mr. Schanzer and Ms. Zeigler, upon a termination due to death or disability; (ii) for Mr. Mays, upon a termination due to disability, that does not occur within 90 days prior to or within 12 months following a Change in Control, assuming such termination occurred on December 31, 2016:
Outstanding Equity Awards at Fiscal Year Ended December 31, 20162019.
Stock Awards | ||||||||||||||||||||||||||||||||||||
Name | Number of Shares or Units of Time-Based Stock That Have Not Vested (#) | Market Value of Shares or Units of Time-Based Stock That Have Not Vested ($)(1) | Number of Unearned Performance-Based Shares, Units or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Performance- Based Shares, Units or Other Rights That Have Not Vested ($)(1) | Cash Compensation (Salary and Bonus) ($)
| Value of Stock Awards ($)
| Medical and Other Benefits ($)
| Total ($)
| ||||||||||||||||||||||||||||
Bruce J. Schanzer | 1,250,000 | (2) | 8,162,500 | 1,250,000 | (2) | 8,162,500 | 3,750,000 | 2,950,000 | 30,004 | 6,730,004 | ||||||||||||||||||||||||||
Philip R. Mays | 369,718 | (3) | 2,414,259 | — | — | 1,170,000 | (1) | 1,373,508 | 18,259 | 2,561,767 | (1) | |||||||||||||||||||||||||
276,564 | (4) | 1,805,963 | — | — | ||||||||||||||||||||||||||||||||
Robin M. Zeigler(5) | 13,831 | (6) | 90,316 | — | — | |||||||||||||||||||||||||||||||
Robin M. Zeigler | 2,125,500 | 1,414,360 | 30,004 | 3,569,864 |
(1) |
If termination were pursuant to |
cash compensation.
Option Exercises and Stock Vested
No options were granted by the Company or exercised during the fiscal year ended December 31, 2016 and no other equity awards vested during such year. None of the named executive officers held any exercisable or unexercisable options as of December 31, 2016.
The Company hasPayments Upon a Change in effect the 2012 Stock Incentive Plan (the “2012 Plan”), under which a total of 4,500,000 shares of common stock may be issued, and the 2004 Stock Incentive Plan, as amended (the “2004 Plan”). As the result of the approval of the 2012 Plan by our stockholders on June 15, 2012, no further awards may be granted under the 2004 Stock Incentive Plan. The Company is additionally proposing for stockholder approval, the 2017 Stock Incentive Plan which, if approved, will reserve 4,000,000 shares of common stock for issuance of awards. If the 2017 Stock Incentive Plan is approved, no further awards will be made under the 2012 Plan. The plans are administered by the Compensation Committee, which determines, among other things, the number of shares, the vesting period and, to the extent applicable, the exercise price for each award.Control Without Termination
The following table sets forth information atthe estimated payments that would have been made to each of our named executive officers upon a Change in Control assuming such event occurred on December 31, 2016 regarding shares of common stock that may be issued under the Company’s equity compensation plans, which consist of the 2004 Plan and the 2012 Plan.2019.
2017 Proxy Statement| 43
EXECUTIVE COMPENSATION
Equity Compensation Plans
A | B | C | ||||||||||
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights ($) | Number of Securities Remaining Available for Future Issuances Under Equity Compensation Plans (Excluding Securities in Column A) | |||||||||
Equity compensation plans approved by security holders | 0 | — | 1,161,395 | |||||||||
Equity compensation plans not approved by security holders(1) | 0 | — | — | |||||||||
|
|
|
| |||||||||
Total | 0 | 1,161,395 |
Name
| Cash Compensation ($) | Value of Stock Awards ($)(1)
| Medical and Other Benefits ($)
| Total ($)
| ||||||||||||||||
Bruce J. Schanzer | — | 2,950,000 | — | 2,950,000 | ||||||||||||||||
Philip R. Mays | — | 1,373,508 | — | 1,373,508 | ||||||||||||||||
Robin M. Zeigler | — | 1,414,360 | — | 1,414,360 |
(1) | Pursuant to the |
Compensation Committee ReportPayments Upon a Change in Control With Termination
The following table sets forth the estimated severance payments that would have been made to each of our named executive officers in the event of a termination by the Company without cause or by the
2020 Proxy Statement| 47
EXECUTIVE COMPENSATION
executive for good reason (or, in the case or Mr. Schanzer and Ms. Zeigler, upon a termination due to death or disability) that occurs within 90 days prior to or within 12 months following a Change in Control, assuming such termination occurred on December 31, 2019.
Name
| Cash Compensation (Salary and Bonus) ($)
| Value of Stock Awards ($)
| Medical and Other Benefits ($)
| Total ($)
| ||||||||||||||||
Bruce J. Schanzer | 3,750,000 | 2,950,000 | 30,004 | 6,730,004 | ||||||||||||||||
Philip R. Mays | 1,950,000 | 1,373,508 | 36,518 | 3,360,026 | ||||||||||||||||
Robin M. Zeigler | 2,125,500 | 1,414,360 | 30,004 | 3,569,864 |
The Dodd-Frank Act requires the Company to determine the ratio of the CEO’s annual total compensation (as set forth in the “Total” column of the Summary Compensation CommitteeTable) to that of the Company’s median employee. Mr. Schanzer, who in 2019 served as a director and managementPresident and CEO of the Company, reviewed and discussedhad annual total compensation in 2019 of $1,503,630, as reflected in the Summary Compensation Discussion and Analysis required by the Securities Exchange Act of 1934. Based on such review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis beTable included in this Proxy StatementStatement.
The annual total compensation for the Company’s median employee (excluding Mr. Schanzer) for 2019 was $118,413. We identified our median employee in 2019 by calculating compensation in a manner consistent with the requirements for reporting compensation in the Summary Compensation Table for named executive officers and incorporatedincluded all individuals who were employed by reference intous on December 31, 2019. Reportable wages were annualized for those employees who were not employed for a full calendar year. Our median employee is based in our 2016 Annual Report.
The Compensation Committee
Pamela N. Hootkin
Paul G. Kirk, Jr.
Roger M. Widmann
Compensation Committee Interlockscorporate headquarters in Port Washington, New York. We are using the same median employee we used in 2017 and Insider Participation
Pamela N. Hootkin, Paul G. Kirk, Jr. and Roger M. Widmann were members2018 for purposes of the Compensation Committee during2019 CEO pay ratio because there have not been any material changes in our employee population or compensation practices in 2019 as compared with the year ended December 31, 2016. No member of the Compensation Committee during 2016prior two years.
Mr. Schanzer’s 2019 annual compensation was an officer, employee or former officer of ours or anyapproximately 12.7 times that of our subsidiaries or had any relationshipmedian employee’s total compensation for 2019. The ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of SEC RegulationS-K. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that wouldreflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be considered acomparable to the pay ratio reported above, as other companies have different employee populations and compensation committee interlock requiring disclosurepractices and may use different methodologies, exclusions, estimates and assumptions in this Proxy Statement pursuant to SEC regulations. None of the executive officers of the Company has served on a board of directors or compensation committee of any other entity that has had any of such entity’s executive officers serve either on the Company’s Board or Compensation Committee.calculating their own pay ratios.
Compensation ofNon-Employee Directors
The Compensation Committee periodically reviews compensation paid by a peer group ofsimilarly-sized companies to their directors. The Compensation Committee considers aggregate compensation paid by the Company to itsnon-employee directors relative to total revenues, as compared tosimilarly-sized public companies. TheIn 2019, the annual retainer for allnon-employee directors has been set atwas $32,000 and thenon-executive Chairman of the Board receivesreceived an additional $90,000$75,000 cash retainer. The annual retainer for each committee member iswas $4,000 and the annual retainer for committee chairs iswas $15,000. MeetingIn 2019, directors did not receive any meeting attendance fees are $1,500 and $1,000, respectively, for eachwith respect to either Board andor committee meeting attended.meetings. In 2016,2019, each independent director also received an annual grant of restricted stock with a grant date fair value of $55,000 that vests in full on the third anniversary of the date of grant (with the exception of
44 |2017 Proxy Statement
EXECUTIVE COMPENSATION
Mr. Rogers, who joined the Board on March 17, 2016 and received a pro-rated restricted stock grant with a grant date fair value of $43,579). Effective January 1, 2017, the annual grant to independent directors will be in the form of restricted stock with a grant date fair value of $65,000 that vests in full on the third anniversary of the date of grant, absent some condition giving rise to accelerated vesting.
48 |2020 Proxy Statement
EXECUTIVE COMPENSATION
Compensation ofnon-employee directors will remain unchanged for 2020. Cash and equity compensation awarded to directors is eligible, at the director’s election, for tax deferral under the Company’s Rabbi Trust Plan. IfPursuant to the terms of the 2017 Stock Incentive Plan, is approved by our stockholders, future cash retainers and equity grants tonon-employee directors under that plan will beare subject to caps as set forth therein.an annualper-director cap of $750,000, and this would remain unchanged under the current proposed amendment.
The following table details director compensation in 2016,2019, which reflects the compensation described above. The table does not include reimbursement of travel expenses related to attendance at Board and committee meetings. Mr. Schanzer does not receive additional compensation for serving as a director.
Director Compensation — 2016for Fiscal Year Ended December 31, 2019
Name | Fees Earned or Paid in Cash ($)(1) | Stock Awards ($)(2)(3) | Total ($) | |||||||||
James J. Burns | 80,500 | 55,000 | 135,500 | |||||||||
Abraham Eisenstat | 65,500 | 55,000 | 120,500 | |||||||||
Pamela N. Hootkin | 103,500 | 55,000 | 158,500 | |||||||||
Paul G. Kirk, Jr | 103,000 | 55,000 | 158,000 | |||||||||
Steven G. Rogers | 85,147 | 43,579 | 128,726 | |||||||||
Roger M. Widmann | 158,500 | 55,000 | 213,500 |
Name
| Fees Earned or Paid in Cash ($)(1)
| Stock Awards ($)(2)(3)
| Total ($)
| |||||||||
Abraham Eisenstat
|
| 55,000
|
|
| 65,000
|
|
| 120,000
|
| |||
Gregg A. Gonsalves
|
| 40,000
|
|
| 65,000
|
|
| 105,000
|
| |||
Pamela N. Hootkin
|
| 55,000
|
|
| 65,000
|
|
| 120,000
|
| |||
Sabrina L. Kanner
|
| 40,000
|
|
| 65,000
|
|
| 105,000
|
| |||
Steven G. Rogers
|
| 55,000
|
|
| 65,000
|
|
| 120,000
|
| |||
Roger M. Widmann
|
| 115,000
|
|
| 65,000
|
|
| 180,000
|
|
(1) | Amounts shown include fees for annual retainer ($32,000 for thenon-employee directors plus |
(2) | The amounts represent the grant date fair value of restricted stock awards granted to the directors in 2018, in accordance with FASB ASC Topic 718, not including any estimates of forfeitures related to service-based vesting conditions. See Note 2 to the financial statements in our 2019 Annual Report regarding assumptions we made in determining the fair value of stock awards. Each director received a grant of restricted stock with a grant date fair value of |
(3) | As of December 31, |
The Compensation Committee has established target share ownership guidelines for our directors to more closely align their interests with those of our stockholders. For each director who has served as a director for at least four years, such director is expected to own shares of our common stock, including restricted stock, totaling not less than the number of shares constituting the equity portion of his or her annual retainer forin the aggregate over the previous four years. Unvested restricted stock counts towards a director’s share ownership. Based on the directors’ disclosure to the Company, all of the Company’s 20162019 directors met such guidelines, with the exception of Mr. Rogers, who is still within his were beyond their four-yearphase-in compliance period. Mr. Gonsalves’ phase-in compliance period will begin upon his election tosatisfied the Board byshare ownership requirement.
In addition, we have adopted a policy that prohibits directors from hedging or pledging securities of the stockholders atCompany, as described above under the Annual Meeting.heading “Anti-Hedging and Anti-Pledging Policy” on page 21 above.
20172020 Proxy Statement | 4549
AUDIT MATTERS
The Audit Committee presently comprises of Steven G. Rogers (Chair), Abraham Eisenstat, Gregg A. Gonsalves and Pamela N. Hootkin, (and James J. Burns until his retirement as a director of the Company effective May 2, 2017), all of whom are independent directors as defined by Sections 303.01(B)(2)(a) and (3) of the New York Stock Exchange Listing Standards and Rule10A-3 of the Securities Exchange Act of 1934. Mr. Rogers was appointed to the Audit Committee on March 17, 2016. As of January 1, 2017, Mr. Rogers became Chair of the Audit Committee, and Mr. Burns, the prior Chair of the Audit Committee, will continue to serve as a member thereof until his anticipated retirement on May 2, 2017. The Audit Committee operates under a written charter, which was adopted by the Board. A copy of the charter is available on the Company’s website atwww.cedarrealtytrust.com. The Audit Committee appoints the Company’s independent registered public accounting firm, which is presently Ernst & Young LLP (“Ernst & Young”). Ernst & Young has served as the Company’s independent auditor since 1984.
The Audit Committee oversees the Company’s financial reporting on behalf of the Board.Board and has sole authority to approve all audit engagements and appointment of internal auditors, including fees and terms. Company management has primary responsibility for preparing the Company’s financial statements and the financial reporting process, including establishing and maintaining effective internal control over financial reporting and, along with the Audit Committee, evaluating the effectiveness of internal control over financial reporting. Ernst & Young is responsible for performing an independent audit of (i) the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and (ii) the Company’s internal control over financial reporting, and issuing reports thereon.
In this context, during 20162019 the Audit Committee as then constituted met fivefour times and held separate discussions with management, the accounting firm that provides internal audit services to the Company and Ernst & Young. The Audit Committee met with Ernst & Young to discuss its plans and scope for the fiscal 20162019 audits and also discussed the procedures and scope with the firm performing the internal audit for 2016.2019. The Audit Committee met with the internal auditors and Ernst & Young, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal control, including the results of management’s assessment of the effectiveness of the Company’s internal control over financial reporting, including compliance with the COSO 2013 principles, and the overall quality of the Company’s financial reporting. The Audit Committee also discussed with Ernst & Young the critical accounting policies and practices used in the preparation of the Company’s audited financial statements. Management and Ernst & Young represented to the Audit Committee that its consolidated financial statements were prepared in accordance with generally accepted accounting principles. The Audit Committee reviewed with Ernst & Young its judgments as to the quality, not just acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee by the standards of the PCAOB, including PCAOB Auditing Standard No. 16, the rules of the Securities and Exchange Commission (the “SEC”) and other applicable regulations. In addition, the Audit Committee discussed with Ernst & Young the firm’s independence from Company management and the Company, including the matters in the letter from Ernst & Young required by PCAOB Rule 3526, and considered the compatibility ofnon-audit services with Ernst & Young’s independence. The Audit Committee also discussed with Ernst & Young matters required to be discussed by the Statement on Auditing Standards No. 61, as amended, as adopted by the PCAOB in Rule 3200T.
The Audit Committee received and reviewed a report from the internal auditors detailing the results of such firm’s internal audit procedures and the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002. The Audit Committee discussed with Ernst & Young the Company’s internal quality control procedures and any material issues raised by Ernst & Young’s most recent internal quality control review. The Audit Committee, after discussions with management, approved the fees for various services performed by Ernst & Young.
46 |2017 Proxy Statement
AUDIT MATTERS
The Audit Committee recognizes the importance of maintaining the independence of the Company’s independent public accountants, both in fact and appearance. Each year, the Audit Committee
50 |2020 Proxy Statement
AUDIT MATTERS
evaluates the qualifications, performance and independence of the Company’s independent public accountants and determines whether tore-engage the current independent public accountants. In doing so, the Audit Committee considers the quality and efficiency of the services provided by the independent public accountants, their capabilities and their technical expertise and knowledge of the Company’s operations and industry. Based on this evaluation, the Audit Committee has retained Ernst & Young as the Company’s independent public accountants for the audit of the Company’s financial statements for the year ending December 31, 2017.2020.
The members of the Audit Committee and the Board believe that, due to Ernst & Young’s knowledge of the Company and of the industry in which the Company operates, it is in the best interests of the Company and its stockholders to continue the retention of Ernst & Young to serve as the Company’s independent public accountants. Although the Audit Committee has the sole authority to appoint the independent public accountants, the Audit Committee intends to continue to recommend that the Board ask the stockholders, at this Annual Meeting, to ratify the appointment of the independent public accountants.
Based on the review and discussions with management, the internal auditors and Ernst & Young, and subject to the limitations on the role and responsibilities of the Audit Committee referred to above and in the Audit Committee Charter, the Audit Committee has recommended to the Board the inclusion of the audited consolidated financial statements and related schedule, and management’s assessment of the effectiveness of the Company’s internal control over financial reporting, in the Company’s 20162019 Annual Report.
The Audit Committee
James J. Burns
Abraham Eisenstat
Gregg A. Gonsalves
Pamela N. Hootkin
Steven G. Rogers*
* | Audit Committee |
The following table presents fees for professional audit services rendered by Ernst & Young LLP for the years ended December 31, 20152019 and 2016:2018:
2016 Actual Fees | 2015 Actual Fees | |||||||
Audit Fees(1) | $ | 884,000 | $ | 795,000 | ||||
Audit-Related Fees | — | — | ||||||
Tax Fees | — | — | ||||||
All Other Fees | — | — |
2019 Actual Fees ($)
| 2018 Actual Fees ($)
| |||||||
Audit Fees(1)
|
| 809,800
|
|
| 874,500
|
| ||
Audit-Related Fees
|
| —
|
|
| —
|
| ||
Tax Fees(2)
|
| 140,405
|
|
| 131,975
|
| ||
All Other Fees
|
| —
|
|
| —
|
|
(1) | Audit Fees for |
(2) | Tax fees for 2019 and 2018 include tax compliance and preparation, and tax consulting services related to tax planning for certain of our redevelopments. |
All audit and tax fees werepre-approved by the Audit Committee, which concluded that the provision of such services by the Company’s auditors was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The policy of the Audit Committee provides for pre-approval of
2020 Proxy Statement| 51
AUDIT MATTERS
2017 Proxy Statementpre-approval| 47
AUDIT MATTERS
of the yearly audits, quarterly reviews and tax compliance on an annual basis. As individual engagements arise, they are approved on acase-by-case basis. The Audit Committee may delegate to one or more of its memberspre-approval authority with respect to permitted services.
Audit Committee Consideration of these Fees
The Company’s Audit Committee has considered whether the provisions of the services covered under the category of “Audit-Related Fees” are compatible with maintaining the independence of Ernst & Young LLP, and concluded Ernst & Young LLP is independent.
48 52 | 20172020 Proxy Statement
PROPOSAL 2: APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 2: APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Ernst & Young LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2017.2020. A representative of Ernst & Young LLP is expected to be present at the meeting with the opportunity to make a statement if such representative so desires and to respond to appropriate questions.
Although ratification by stockholders is not a prerequisite to the power of the Audit Committee to appoint Ernst & Young LLP as our independent registered public accounting firm, our Board and the Audit Committee believes such ratification to be advisable and in the best interests of the company.Company. If the appointment of Ernst & Young LLP is ratified, the Audit Committee will continue to conduct an ongoing review of Ernst & Young LLP’s scope of engagement, pricing and work quality, among other factors, and will retain the right to replace Ernst & Young LLP at any time. If stockholders do not ratify the appointment of Ernst & Young LLP, the appointment of an independent registered public accounting firm will be reconsidered by the Audit Committee.
The affirmative vote of a majority of the shares entitled to be voted and presentvotes cast at the meetingAnnual Meeting either in person or by proxy is required to approve this Proposal.
The Board of Directors unanimously recommends a vote FOR“FOR” the ratification of the appointment of Ernst & Young LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2017.2020.
2020 Proxy Statement| 53
2017 Proxy Statement| 49
PROPOSAL 3: ADVISORY(NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
PROPOSAL 3: ADVISORY(NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act requires that we provide our stockholders with the opportunity to vote to approve, on anon-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. At the Company’s 20162019 Annual Meeting of Stockholders, approximately 63% of our stockholders approved the executive compensation of the Company.
We took, and continue to take seriously, the relatively low level of stockholders support in 2019 for our 2018 executive compensation, and endeavored to make meaningful changes within the bounds of existing contractual commitments, to address our stockholders’ concerns. Those changes are detailed above in the section entitled, “Say on Pay Responsiveness” on page 32.
As described in the section, “Compensation Discussion and Analysis,” we seek to closely align the interests of our named executive officers with the interests of our stockholders. Our compensation programs are designed to reward our named executive officers for the achievement of short- and long-term strategic and operational goals and, for the CEO, achievement of certain TSR goals, while at the same time avoiding unnecessary or excessive risk-taking.
The vote on this resolution is not intended to address any specific element of compensation but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this Proxy Statement. The vote is advisory, which means that the vote is not binding on the Company, our Board or the Compensation Committee. Althoughnon-binding, the Board and the Compensation Committee value the opinions that stockholders express in their votes and will review the voting results and take them into consideration as they deem appropriate when making future decisions regarding our executive compensation program.
The affirmative vote of a majority of the shares entitled to be voted and presentvotes cast at the meetingAnnual Meeting either in person or by proxy is required to approve this Proposal.
Accordingly, we ask our stockholders to vote on the following resolution at this meeting:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 ofRegulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED”.
The Board of Directors unanimously recommends a vote FOR“FOR” approval of the compensation of our named executive officers, as disclosed in this Proxy Statement.
50 54 | 20172020 Proxy Statement
PROPOSAL 4: ADVISORY (NON-BINDING) VOTE ON FREQUENCY OF SAY-ON-PAY VOTES
PROPOSAL 4: ADVISORY (NON-BINDING) VOTE ON FREQUENCY OF SAY-ON-PAY VOTES
As described in Proposal 4 above, in accordance with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, we provide our stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers. In addition, this Proposal 5 affords our stockholders the opportunity to cast a non-binding, advisory vote on whether future advisory votes to approve the compensation of our named executive officers should be held every one year, two years, or three years.
Since 2011, following the advisory vote of stockholders in favor of annual say-on-pay votes, the Company has held such votes every year. We continue to believe that say-on-pay votes should be conducted every year so that our stockholders may annually express their views on our executive compensation program, and because market practice is that annual say-on-pay votes should be held.
Although this vote on the frequency of say-on-pay votes is non-binding, the Board and the Compensation Committee will take into account the outcome of the vote when considering the frequency of future advisory votes on executive compensation.
It is expected that our next vote on a say-on-pay frequency proposal will occur at the 2023 Annual Meeting of Stockholders.
The proxy card provides stockholders with the opportunity to choose among four options when voting on this Proposal No. 4. Stockholders may cast their advisory vote to conduct advisory votes every “1 Year,” “2 Years,” “3 Years,” or “Abstain.”
A plurality of the shares entitled to be voted and present at the meeting either in person or by proxy will determine the stockholders’ preferred frequency for holding an advisory vote on executive compensation. This means that the option for holding an advisory vote every 1 year, 2 years, or 3 years, receiving the greatest number of votes will be considered the preferred frequency of the stockholders.
The Board of Directors unanimously recommends a vote to hold say-on-pay votes every 1 Year.
2017 Proxy Statement| 51
PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
At our Annual Meeting, our stockholders will be asked to approve our 2017 Stock Incentive Plan (the “2017 Plan”), which was adopted, subject to stockholder approval, by our Board on March 14, 2017. The 2017 Plan reserves an aggregate of 4,000,000 shares for issuance pursuant to awards under the 2017 Plan and imposes an overall cap on annual per director compensation of $750,000. In addition, the 2017 Plan implements numerous best-practice enhancements to the Company’s corporate governance practices with respect to equity compensation. The purpose of the 2017 Plan is to promote the success and enhance the value of the Company by linking the individual interests of the directors, officers, and employees to those of the Company stockholders, and by providing such individuals with an incentive to outperform in order to generate superior return to Company stockholders. The 2017 Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of directors, officers, and employees upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.
In the event that the 2017 Stock Incentive Plan is approved, it will replace the Company’s 2012 Stock Incentive Plan, effective as of the date of such approval, whereupon no further awards will be made under the 2012 Stock Incentive Plan. In addition, the Board has determined to make awards covering no more than 50,000 shares under the 2012 Stock Incentive Plan between March 14, 2017 and the effective date of the 2017 Plan, if approved, and such reserve will be used exclusively, if at all, in connection with recruitment and hiring efforts.
| ||
The Board of Directors unanimously recommends a vote FOR approval of the 2017 Stock Incentive Plan.
The Board believes that incentives and stock-based awards focus employees on the objective of creating stockholder value and promoting our success, as well as further aligning employees’ interests with those of our stockholders and encouraging their long-term commitment to the Company. Incentive compensation plans like the 2017 Plan are an important attraction, retention and motivation tool for executives and employees. The Board believes that the 2017 Plan gives the Company greater flexibility to structure future incentives and better attract, retain, motivate and reward key employees.
The Board has determined that the current equity share pool reserve under the 2012 Plan will not be sufficient for our anticipated equity award needs in the near term. Therefore, if stockholders do not approve the 2017 Plan, our future ability to issue equity-based awards will be limited, which could have significant negative consequences for our ability to recruit and retain qualified senior employees. In
52 |2017 Proxy Statement
PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
particular, the Company’s employment agreement with Mr. Schanzer will expire in 2018 and the Board anticipates seeking to renew Mr. Schanzer’s employment agreement in advance of its expiration. A renewed or extended agreement will potentially include an upfront award in excess of the number of shares currently available under the 2012 Plan. If stockholders approve the 2017 Plan, we anticipate the additional shares will be sufficient to ensure senior management continuity with respect to the CEO as well as provide equity incentives to attract, retain, and motivate employees for approximately the next five years.
If our Company’s stockholders do not approve this proposal, the current share limits under, and other terms and conditions of, our 2012 Plan will continue in effect. However we may not be able to consummate a renewal of Mr. Schanzer’s employment agreement.
The affirmative vote of a majority of the shares entitled to be voted and present at the meeting either in person or by proxy is required to approve this Proposal.
The following is a brief description of the material features of the 2017 Plan.
Summary of New Features in 2017 Plan
|
|
|
|
|
|
|
A copy of the 2017 Plan is attached to this Proxy Statement asAnnex A. A copy of the 2017 Plan document may also be obtained by written request to our Secretary at Cedar Realty Trust, Inc., 44 South Bayles Avenue, Port Washington, New York 11050.
Based on the closing price of our common stock as reported by the NYSE on March 10, 2017, the aggregate market value of the 4,000,000 shares of common stock authorized for issuance under the 2017 Plan is $20,040,000. The shares we issue under the 2017 Plan will be authorized but unissued shares or shares that we reacquire. The shares of common stock underlying any awards that are forfeited, canceled or otherwise terminated under the 2017 Plan other than by exercise will be added back to the shares of common stock available for issuance under the Plan. The following shares will not be added to the shares authorized for grant under the 2017 Plan and will not be available for future grants of awards: (i) shares tendered or held back by the Company in payment of the exercise price of
2017 Proxy Statement| 53
PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
an option or settlement of an award; (ii) shares withheld by the Company to satisfy any tax withholding obligation with respect to an award; and (iii) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right on exercise thereof; and (iv) shares purchased on the open market.
Qualified Performance-Based Compensation under Code Section 162(m)
To ensure that certain awards granted under the 2017 Plan to a “Covered Employee” (as defined in the Code) qualify as “performance-based compensation” under Section 162(m) of the Code, the 2017 Plan provides that the Compensation Committee may require that the vesting of such awards be conditioned on the satisfaction of performance criteria that may include any or all of the following: (i) consolidated income before or after taxes; (ii) earnings before interest, taxes, depreciation and amortization (“EBITDA”); (iii) adjusted EBITDA; (iv) net operating income; (v) net income; (vi) net income per share of stock; (vii) book value per share of stock; (viii) total shareholder return; (ix) expense management; (x) return on investment; (xi) return on assets; (xii) improvements in property portfolio metrics, such as average base rent, surrounding household density and surrounding household income; (xiii) improvements in capital structure; (xiv) profitability of an identifiable business unit; (xv) maintenance or improvement of debt to equity ratio or other ratios; (xvi) stock price; (xvii) funds from operations (“FFO”); (xviii) operating FFO; (xix) cash flow; and (xx) working capital, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Compensation Committee will select the particular performance criteria within 90 days following the commencement of a performance cycle. Subject to adjustments for stock splits and similar events, the maximum award granted to any one individual that is intended to qualify as “performance-based compensation” under Section 162(m) of the Code will not exceed 2,500,000 shares of common stock for any performance cycle. Options or stock appreciation rights with respect to no more than 1,000,000 shares of common stock may be granted to any one individual during any calendar year period and no more than 500,000 shares of common stock may be granted to any individual grantee in any calendar year period; provided, however, that pursuant to anticipated contractual obligations of the Company in respect of the renewal of the Chief Executive Officer’s employment agreement, no more than 750,000 shares of restricted stock may be granted to the Chief Executive Officer in any calendar year, and no more than 2,500,000 shares of common stock in the aggregate may be granted to the Chief Executive Officer in respect of any multi-year contract term.
Rationale for Share Increase
The 2017 Plan is critical to our ongoing effort to build stockholder value. Equity incentive awards are an important component of our executive and non-executive employees’ compensation. Our Compensation Committee and Board believe that we must continue to offer a competitive equity compensation program in order to attract, retain and motivate the talented and qualified employees necessary for our continued growth and success.
We manage our long-term stockholder dilution by limiting the number of equity incentive awards granted annually. The Compensation Committee carefully monitors our annual net burn rate, total dilution and equity expense in order to maximize stockholder value by granting only the number of equity incentive awards that it believes is necessary and appropriate to attract, reward and retain our employees.
Our compensation philosophy reflects broad-based eligibility for equity incentive awards. As of March 10, 2017, approximately half of our employees held outstanding equity awards and approximately 70 individuals were eligible to participate in the 2017 Plan. By ensuring that our employees hold equity awards, we link the interests of those employees with those of our stockholders and motivate our employees to act as owners of the business.
54 |2017 Proxy Statement
PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
We have historically had responsible grant practices which have led to low burn rates. Our three-year average burn rate for 2014-2016 is 1.29% and, using an adjuster for full value awards as determined by Institutional Shareholder Services Inc. (“ISS”), is 3.01%.
Summary of the 2017 Plan
The following description of certain features of the 2017 Plan is intended to be a summary only. The summary is qualified in its entirety by the full text of the 2017 Plan that is attached hereto asAnnex A.
Administration. The 2017 Plan will be administered by the Compensation Committee. The Compensation Committee has full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the 2017 Plan. The Compensation Committee may delegate to our Chief Executive Officer the authority to grant awards to employees who are not subject to the reporting and other provisions of Section 16 of the Securities Exchange Act of 1934 and not subject to Section 162(m) of the Code, subject to certain limitations and guidelines.
Eligibility. All full-time and part-time officers, employees, non-employee directors and other key persons (including consultants) are eligible to participate in the 2017 Plan, subject to the discretion of the Compensation Committee.
Award Limits.There are certain limits on the number of awards that may be granted under the 2017 Plan. For example, no more than 1,000,000 shares of common stock may be granted in the form of stock options or stock appreciation rights to any one individual during any one calendar year period, and no more than 500,000 shares of common stock may be granted pursuant to awards other than stock options or stock appreciation rights to any individual grantee in any calendar year. The maximum performance-based award payable to any grantee in a performance cycle is 2,500,000 shares of common stock. These limits are intended to comply with Section 162(m) of the Code. In addition, no more than 2,500,000 shares of common stock may be granted in the form of incentive stock options.
Director Compensation Limit. The 2017 Plan provides that the value of all awards awarded under the 2017 Plan and all other cash compensation paid by the Company to any non-employee director in any calendar year shall not exceed $750,000. For purposes of this limit, the value of any equity incentive awards made to a non-employee director shall be equal to the grant date fair value determined based on the closing price of our common stock on the date of grant.
Minimum Vesting.The minimum vesting period for each equity award granted under the Plan must be at least one year, provided that up to 5% of the shares authorized for issuance under the Plan may be utilized for unrestricted stock awards or other equity awards with a minimum vesting period of less than one year and time-based restricted stock awards have a minimum vesting period of three years. In addition, the Compensation Committee may grant equity awards that vest within one year (i) if such awards are granted as substitute awards in replacement of other awards (or awards previously granted by an entity being acquired (or assets of which are being acquired)) that were scheduled to vest within one year or (ii) if such awards are being granted in connection with an elective deferral of cash compensation that, absent a deferral election, otherwise would have been paid to the grantee within the one year.
Stock Options. The 2017 Plan permits the granting of (1) options to purchase common stock intended to qualify as incentive stock options under Section 422 of the Code and (2) options that do not so qualify. Options granted under the 2017 Plan will be non-qualified options if they fail to qualify as incentive options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of the Company and its subsidiaries. Non-qualified options may be granted to any persons eligible to receive incentive options and to non-employee directors and key persons (including consultants). The exercise price of each option will be determined by the Compensation Committee but may not be less than 100% of the fair market value of the common stock
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PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
on the date of grant. Fair market value for this purpose will be determined by reference to the closing price of the shares of common stock on the NYSE on the date of grant date. The exercise price of an option may not be reduced after the date of the option grant, other than to appropriately reflect changes in our capital structure.
The term of each option will be fixed by the Compensation Committee and may not exceed ten years from the date of grant. The Compensation Committee will determine at what time or times each option may be exercised. Options may be made exercisable in installments and the exercisability of options may be accelerated by the Compensation Committee in circumstances involving the optionee’s death, disability or retirement, a change in control or other similar event. In general, unless otherwise permitted by the Compensation Committee, no option granted under the 2017 Plan is transferable by the optionee other than by will or by the laws of descent and distribution, and options may be exercised during the optionee’s lifetime only by the optionee, or by the optionee’s legal representative or guardian in the case of the optionee’s incapacity.
Upon exercise of options, the option exercise price must be paid in full either in cash, by certified or bank check or other instrument acceptable to the Compensation Committee or by delivery (or attestation to the ownership) of shares of common stock that are beneficially owned by the optionee and that are not subject to risk of forfeiture. Subject to applicable law, the exercise price may also be delivered to the Company by a broker pursuant to irrevocable instructions to the broker from the optionee. In addition, the Compensation Committee may permit non-qualified options to be exercised using a net exercise feature which reduces the number of shares issued to the optionee by the number of shares with a fair market value equal to the exercise price.
To qualify as incentive options, options must meet additional federal tax requirements, including a $100,000 limit on the value of shares subject to incentive options that first become exercisable by a participant in any one calendar year.
Stock Appreciation Rights. The Compensation Committee may award stock appreciation rights subject to such conditions and restrictions as the Compensation Committee may determine. Stock appreciation rights entitle the recipient to shares of common stock or cash equal to the value of the appreciation in the stock price over the exercise price. The exercise price is the fair market value of the common stock on the date of grant. The term of a stock appreciation right may not exceed ten years.
Restricted Stock. The Compensation Committee may award shares of common stock to participants subject to such conditions and restrictions as the Compensation Committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with us through a specified restricted period. During the vesting period, restricted stock awards may be credited with dividend equivalent rights.
Restricted Stock Units. The Compensation Committee may award restricted stock units to any participants. Restricted stock units are ultimately payable in the form of shares of common stock or cash and may be subject to such conditions and restrictions as the Compensation Committee may determine. These conditions and restrictions may include the achievement of certain performance goals and/or continued employment with the Company through a specified vesting period. In the Compensation Committee’s sole discretion, it may permit a participant to make an advance election to receive a portion of his or her future cash compensation otherwise due in the form of a restricted stock unit award, subject to the participant’s compliance with the procedures established by the Compensation Committee and requirements of Section 409A of the Code. During the deferral period, the deferred stock awards may be credited with dividend equivalent rights.
Unrestricted Stock Awards. The Compensation Committee may also grant shares of common stock which are free from any restrictions under the 2017 Plan. Unrestricted stock may be granted to any participant in recognition of past services or other valid consideration and may be issued in lieu of cash compensation due to such participant.
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PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
Dividend Equivalent Rights. The Compensation Committee may grant dividend equivalent rights to participants which entitle the recipient to receive credits for dividends that would be paid if the recipient had held specified shares of common stock. Dividend equivalent rights may be settled in cash, shares of common stock or a combination thereof, in a single installment or installments, as specified in the award. Dividend equivalent rights may not be granted as a component of options or stock appreciation rights.
Change in Control Provisions.The 2017 Plan provides that upon the effectiveness of a “sale event,” as defined in the 2017 Plan, all awards under the 2017 Plan will automatically terminate unless the parties to the sale event agree that such awards will be assumed, continued, or substituted by the successor entity; provided that except as may be otherwise provided in the relevant award agreement or employment agreement, all awards with time-based vesting, conditions or restrictions shall become fully vested and non-forfeitable as of the effective time of the sale event, and all awards with conditions and restrictions relating to the attainment of performance goals may become vested and non-forfeitable in whole or in part in connection with a sale event in the Compensation Committee’s discretion or to the extent specified in the relevant award agreement or employment agreement. In connection with a sale event, (i) the Company may make or provide for a cash payment to participants holding options and stock appreciation rights, in exchange for the cancellation thereof, equal to the difference between the per share cash consideration in the sale event and the exercise price of the options or stock appreciation rights or (ii) each participant shall be permitted, within a specified period of time prior to the consummation of the sale event, as determined by the Compensation Committee, to exercise all outstanding options and stock appreciation rights held by such participant. The Company shall also have the option to make or provide for payment, in cash or in kind, to grantees holding other awards in an amount equal to the sale price multiplied by the number of vested shares underlying such awards.
Adjustments for Stock Dividends, Stock Splits, etc. The 2017 Plan requires the Compensation Committee to make appropriate adjustments to the number of shares of common stock that are subject to 2017 Plan, to certain limits in the 2017 Plan, and to any outstanding awards to reflect stock dividends, stock splits, extraordinary cash dividends and similar events.
Tax Withholding. Participants in the 2017 Plan are responsible for the payment of any federal, state or local taxes that the Company is required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. Participants may elect to have withholding obligations satisfied by authorizing the Company to withhold shares of common stock to be issued pursuant to the exercise or vesting. Shares tendered in satisfaction of tax liability will no longer be available for future awards under the 2017 Plan.
No Repricing of Stock Options or Stock Appreciation Rights.The exercise price of outstanding stock options or stock appreciation rights may not be reduced or repriced in any manner without prior stockholder approval.
Amendments and Termination. The Board may at any time amend or discontinue the 2017 Plan and the Compensation Committee may at any time amend or cancel any outstanding award for the purpose of satisfying changes in the law or for any other lawful purpose. However, no such action may adversely affect any rights under any outstanding award without the holder’s consent. To the extent required under the rules of the NYSE, any amendments that materially change the terms of the 2017 Plan will be subject to approval by our stockholders. Amendments shall also be subject to approval by our stockholders if and to the extent determined by the Compensation Committee to be required by the Code to preserve the qualified status of incentive options or to ensure that compensation earned under the 2017 Plan qualifies as performance-based compensation under Section 162(m) of the Code.
Effective Date of Plan. The 2017 Plan was adopted by our Board on March 14, 2017 and will become effective once approved by stockholders at the Annual Meeting. Awards of incentive options may be granted under the 2017 Plan until the tenth anniversary of March 14, 2017. No other awards may be granted under the 2017 Plan after the date that is ten years from the date of stockholder approval.
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PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
New Plan Benefits
Because the grant of awards under the 2017 Plan is within the discretion of the Compensation Committee, and possibly subject to various performance factors which cannot, as yet, be determined, the Company cannot determine the dollar value or number of shares of common stock that will in the future be received by or allocated to any participant in the 2017 Plan. Accordingly, in lieu of providing information regarding benefits that will be received under the 2017 Plan, the following table provides information concerning the awards that were received by the following persons and groups during 2016: each named executive officer; all other executive officers, as a group; all non-employee directors, as a group; and all current employees who are not executive officers, as a group.
Stock Awards | ||||||||
Name and Position | Dollar Value ($) | Number of (#) | ||||||
Bruce J. Schanzer,President and Chief Executive Officer | — | — | ||||||
Philip R. Mays,Executive Vice President, Chief Financial Officer and Treasurer | 1,899,995 | (1) | 1 | |||||
Robin M. Zeigler,Executive Vice President and Chief Operating Officer | 99,998 | (2) | 1 | |||||
All other executive officers, as a group | — | — | ||||||
All non-employee directors, as a group | 318,565 | 6 | ||||||
All current employees who are not executive officers, as a group | 927,950 | 16 |
Tax Aspects Under the Code
The following is a summary of the principal federal income tax consequences of certain transactions under the 2017 Plan. It does not describe all federal tax consequences under the 2017 Plan, nor does it describe state or local tax consequences.
Incentive Options. No taxable income is generally realized by the optionee upon the grant or exercise of an incentive option. If shares of common stock issued to an optionee pursuant to the exercise of an incentive option are sold or transferred after two years from the date of grant and after one year from the date of exercise, then (i) upon sale of such shares, any amount realized in excess of the option price (the amount paid for the shares) will be taxed to the optionee as a long-term capital gain, and any loss sustained will be a long-term capital loss, and (ii) the Company will not be entitled to any deduction for federal income tax purposes. The exercise of an incentive option will give rise to an item of tax preference that may result in alternative minimum tax liability for the optionee.
If shares of common stock acquired upon the exercise of an incentive option are disposed of prior to the expiration of the two-year and one-year holding periods described above (a “disqualifying disposition”), generally (i) the optionee will realize ordinary income in the year of disposition in an amount equal to the excess (if any) of the fair market value of the shares of common stock at exercise (or, if less, the amount realized on a sale of such shares of common stock) over the option price thereof, and (ii) we will be entitled to deduct such amount. Special rules will apply where all or a portion of the exercise price of the incentive option is paid by tendering shares of common stock.
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PROPOSAL 5: APPROVAL OF 2017 STOCK INCENTIVE PLAN
If an incentive option is exercised at a time when it no longer qualifies for the tax treatment described above, the option is treated as a non-qualified option. Generally, an incentive option will not be eligible for the tax treatment described above if it is exercised more than three months following termination of employment (or one year in the case of termination of employment by reason of disability). In the case of termination of employment by reason of death, the three-month rule does not apply.
Non-Qualified Options. No income is realized by the optionee at the time the option is granted. Generally (i) at exercise, ordinary income is realized by the optionee in an amount equal to the difference between the option price and the fair market value of the shares of common stock on the date of exercise, and we receive a tax deduction for the same amount, and (ii) at disposition, appreciation or depreciation after the date of exercise is treated as either short-term or long-term capital gain or loss depending on how long the shares of common stock have been held. Special rules will apply where all or a portion of the exercise price of the non-qualified option is paid by tendering shares of common stock. Upon exercise, the optionee will also be subject to Social Security taxes on the excess of the fair market value over the exercise price of the option.
Other Awards. The Company generally will be entitled to a tax deduction in connection with an award under the 2017 Stock Incentive Plan in an amount equal to the ordinary income realized by the participant at the time the participant recognizes such income. Participants typically are subject to income tax and recognize such tax at the time that an award is exercised, vests or becomes non-forfeitable, unless the award provides for a further deferral.
Parachute Payments. The vesting of any portion of an option or other award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may be non-deductible to the Company, in whole or in part, and may subject the recipient to a non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Limitation on Deductions. Under Section 162(m) of the Code, the Company’s deduction for certain awards under the 2017 Plan may be limited to the extent that the Chief Executive Officer or other executive officer whose compensation is required to be reported in the summary compensation table (other than the Principal Financial Officer) receives compensation in excess of $1 million a year (other than performance-based compensation that otherwise meets the requirements of Section 162(m) of the Code). The 2017 Plan is structured to allow certain awards to qualify as performance-based compensation.
The Board of Directors unanimously recommends a vote FOR approval of the 2017 Stock Incentive Plan.
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SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
Security Ownership of Certain Beneficial Owners and Management
The following is a schedule of all persons who, to the knowledge of the Company, beneficially owned more than 5% of the outstanding common stock of the Company as of March 10, 2017:April 20, 2020:
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Name and Address | Number of Shares Beneficially Owned | Percent of Stock(1) | ||||||
T. Rowe Price Associates, Inc. 100 E. Pratt Street Baltimore, Maryland 21202 | 16,009,718 | (2) | 17.92 | % | ||||
BlackRock Inc. 55 East 52nd Street New York, NY 10022 | 14,180,479 | (3) | 15.87 | % | ||||
T. Rowe PriceSmall-Cap Value Fund, Inc. 100 E. Pratt Street Baltimore, Maryland 21202 | 11,193,601 | (2) | 12.53 | % | ||||
The Vanguard Group, Inc. 100 Vanguard Blvd. Malverne, PA 19355 | 9,859,869 | (4) | 11.04 | % |
(1) | Based on |
(2) | According to a Schedule 13G/A filed with the SEC on February 14, |
(3) |
According to a Schedule 13G/A filed with the SEC on February |
According to a Schedule 13G/A filed with the SEC on February |
60 |2017 Proxy Statement
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
The following table sets forth information concerning the security ownership of directors and named executive officers as of March 10, 2017:April 20, 2020:
Name | Number of Common Shares Beneficially Owned(1) | Percent of Common Stock(2) | Number of Common Shares Beneficially Owned(1)
| Percent of Common Stock(2)
| ||||||||||||||
Bruce J. Schanzer(3) | 2,671,257 | 3.12 | % |
| 2,313,047
|
|
| 2.59
| %
| |||||||||
Philip R. Mays | 651,042 | * |
| 687,382
|
|
| *
|
| ||||||||||
Robin M. Zeigler(4) | 107,009 | * | ||||||||||||||||
Robin M. Zeigler
|
| 493,275
|
|
| *
|
| ||||||||||||
Abraham Eisenstat
|
| 215,167
|
|
| *
|
| ||||||||||||
Roger M. Widmann | 109,924 | * |
| 163,550
|
|
| *
|
| ||||||||||
Paul G. Kirk, Jr. | 85,633 | * | ||||||||||||||||
Pamela N. Hootkin | 79,193 | * |
| 132,819
|
|
| *
|
| ||||||||||
James J. Burns | 79,189 | * | ||||||||||||||||
Abraham Eisenstat | 51,541 | * | ||||||||||||||||
Steven G. Rogers(5) | 15,794 | * | ||||||||||||||||
Directors and executive officers as a group (9 persons)(3)(4)(5) | 3,850,582 | 4.50 | % | |||||||||||||||
Steven G. Rogers
|
| 69,420
|
|
| *
|
| ||||||||||||
Gregg A. Gonsalves
|
| 62,030
|
|
| *
|
| ||||||||||||
Sabrina L. Kanner
|
| 51,212
|
|
| *
|
| ||||||||||||
Directors and executive officers as a group (9 persons)(3)
|
| 4,187,902
|
|
| 4.69
| %
|
* | Less than 1% |
2020 Proxy Statement| 55
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
(1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. |
(2) | Based on |
(3) | Includes |
Transactions with Related Persons
Our Board has adopted a written policy relating to the review, approval and ratification of transactions between the Company and related persons, pursuant to which any such transactions must be approved by the Audit Committee. The policy applies to transactions or arrangements between us and any related person, including directors, director nominees,director-nominees, executive officers, greater than 5% stockholders and the immediate family members of each of these groups. In determining whether to approve a related person transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. There were no transactions during 20162019 that were subject to our related person transaction policy.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers, directors, and persons who beneficially own more than 10% of the stock of the Company to file initial reports of ownership and reports of changes in ownership. Such persons are also required by Securities and Exchange Commission regulations to furnish the Company with copies of these reports. Securities and Exchange Commission rules require the Company to identify in this Proxy Statement
2017 Proxy Statement| 61
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
anyone who filed a required report late during the most recent fiscal year. Based solely on the Company’sour review of copies of such forms received, or written representations from certain reporting persons that no filings were required for such persons, the Company believeswe believe that, during 2016 , its2019, the Company’s executive officers, directors and holders of more than 10% of its common stock complied with all filing requirements under Section 16(a).
62 56 | 20172020 Proxy Statement
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
At Cedar, we believe in doing well by doing good. This philosophy is reflected in our operational goals of bringing essential retail commerce, such as grocers and other important amenities, to underserved communities in densely-populated urban areas. Consistent with that philosophy, we embrace responsible environmental, social and community stewardship as an essential part of our mission to build a successful business and to shape the communities we serve throughout our portfolio, in addition to our workplace community.
In 2019, we continued to demonstrate our commitment as a company to Environmental, Social and Governance Principles. Below are some of the highlights affirming our commitment to corporate social responsibility, both internally and in the markets where we operate:
Environmental
We are committed to sustainability initiatives, in the service of which we are continually exploring ways to incorporate conservationist principles into our property management and development projects.
Reflecting our mission-driven approach to retail property management, we marked the close of 2019 by announcing important achievements in our corporate sustainability program.
The Company’s sustainability strategy includes:
Solar energy — Since June 2018, Cedar has partnered with a solar developer to install rooftop arrays at three of its properties. With 3 more solar installations near final stages of completion at several more properties, Cedar anticipates the quadrupling of its solar electricity production, which is anticipated to enable the Company to replace the burning of nearly three million pounds of coal annually, or the equivalent of 3,177 acres of forests sequestering carbon for one year.
LED lighting — Continuing a strategy that began several years ago, Cedar has completed the outfitting of public areas at 40 of its properties with LED lighting to date, dramatically reducing the energy required to light its retail centers, while decreasing attendant costs. In total, the properties that have been upgraded to LED fixtures reduced their energy consumption by more than six million kilowatt hours in 2019.
Recycling — In addition to its standard recycling program, Cedar also contracted with an environmental company to manage trash and recycling services at 40 properties. Cedar disposed of and recycled approximately 2 million pounds of trash and recycling via sustainable methods in 2019.
Reduction of fuel emissions — Cedar completed the installation of two electric car charging stations with another 10 electric car charging centers scheduled for installation in 2020.
Book collection — For the past several years, Cedar has been working to install book collection bins at dozens of its retail centers, where shoppers can deposit textbooks and other used books. Our vendor partner collects these books regularly and reuses and recycles them. In total, Cedar’s bins have collected more than a million books in the past five years; about one third of these have been recirculated, while the rest have been recycled.
In addition to doing our fair share for the global environment, it is our hope that our demonstrated commitment to sustainability initiatives will serve as a positive model of corporate civic responsibility in the communities we serve, and stimulate analogous efforts among our constituencies.
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CORPORATE SOCIAL RESPONSIBILITY
Social
As a company, Cedar has affirmed its commitment to social responsibility in numerous ways. We have added four new directors to our Board in the past five years, each of which enhances diversity with respect to gender, ethnicity or professional experience, or a combination thereof. We are proud to haveone-third of our independent Board comprised of female directors. We value not only the diversity of experience these professionals bring to our Board room, but also the enriched cognitive diversity they bring to our collective approach to problem solving. In terms of our corporate culture, approximately 55% of ourmid-level,non-executive managers are female, as well asone-third of our executive team. 63% of our employee population was female, as of the end of 2019.
Cedar’s mission of social responsibility extends outward as well to the communities we serve. In 2019, we were proud to sponsor an $85,000 grant to the Jackie Robinson Foundation to six Ward 7 students of Washington, D.C. Five students receivedone-year curriculum support scholarships as Jackie Robinson Scholars and one student was the recipient of the “JRF Cedar Realty Trust Scholarship” and received a four-year scholarship to attend college.
Governance
Good governance is one of our core principles, which guides our formulation of corporate policies, internal management and relationships with the communities in which we operate. Our belief in stockholder enfranchisement is demonstrated by recent corporate policy enactments which have been overwhelmingly well-received by our stockholders. For example, in 2018, we adopted amendments to our charter andby-laws which empower stockholders to act to amend ourby-laws, as opposed to exclusively reserving this right to our Board.
We have annual election of directors, with no classified Board, and a requirement that directors be elected by a majority vote in uncontested elections. Our Board committees are composed of entirely independent directors, and the average tenure of our directors has been steadily decreasing as we have refreshed our Board with four new director appointments in the last five years, resulting in an increase in the percentage of independent directors with relatively low tenure.
We regularly engage with our stockholders throughout the year, and are responsive to their concerns. For example, in 2016, in response to stockholder feedback, we modified our named executive officers’ employment agreements to remove “modified single-trigger” cash severance provisions and to provide instead for satisfaction of “double trigger” conditions for payment of cash severance following a change in control. We continued this feature in our new CEO and CFO employment agreements effective June 2018, and further migrated our compensation practices to align with best market practices with respect to several important features in these new executive employment agreements, detailed more fully herein. In addition, in response to constructive input from our stockholders, we require a minimum vesting period of one year applicable to all types of equity awards granted under the 2017 Stock Incentive Plan, subject to a 5% carve out, and a minimum three-year vesting period for time-based restricted stock awards. We have also put into place caps on director pay in our 2017 Stock Incentive Plan, which would remain in place under the current proposed amendment.
58 |2020 Proxy Statement
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Company. The Company has retained D.F. King & Co., Inc. to assist in the solicitation of proxies for a fee of $10,500, plus all reasonable out-of-pocket expenses. The Company may use the services of its directors, officers, employees and others to solicit proxies, personally or by telephone; arrangements may also be made with brokerage houses and other custodians, nominees, fiduciaries and stockholders of record to forward solicitation material to the beneficial owners of stock held of record by such persons. The Company may reimburse such solicitors for reasonable out-of-pocket expenses incurred by them in soliciting, but no compensation will be paid for their services.
Proposals of stockholders intended to be presented at the Company’s 2018 Annual Meeting of Stockholders pursuant to Rule 14a-8 of the rules promulgated under the Securities Exchange Act of 1934, as amended, must be received by the Company on or prior to November 25, 2017 to be eligible for inclusion in the Company’s Proxy Statement and form of Proxy to be used in connection with such meeting. Under Rule 14a-8, we are not required to include stockholder proposals in our proxy materials unless this condition is satisfied. Accordingly, any notice of stockholder proposals received after this date will be considered untimely. In addition, proposed nominations by stockholders for persons to serve as directors at the 2018 Annual Meeting must comply with the advance notice provisions and other requirements specified in our by-laws and be received by the Company between January 2, 2018 and February 1, 2018. Nominations not received within this time frame will be considered untimely.
The Company may elect to send a single copy of its 2016 Annual Report and this Proxy Statement to any household at which two or more stockholders reside, unless one of the stockholders at such address notifies the Company that he or she desires to receive individual copies. This “householding” practice reduces the Company’s printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Stockholders may request to discontinue or re-start householding, or to request a separate copy of the 2016 Annual Report or 2017 Proxy Statement, as follows:Roger M. Widmann
stockholders owning shares through a bank, broker or other holder of record should contact such record holder directly; and
stockholders of record should write to the Company at 44 South Bayles Avenue, Port Washington, New York 11050, attention Investor Relations. The Company will promptly deliver such materials upon request.
At the date of this Proxy Statement, the only business which the Board intends to present or knows that others will present at the meeting is that hereinabove set forth. If any other matter or matters are properly brought before the meeting, or any adjournment thereof, it is the intention of the persons named in the accompanying form of Proxy to vote the Proxy on such matters in accordance with their judgment.
By Order of the Board of Directors,
Pamela N. Hootkin
BRUCE J. SCHANZER
President and Chief Executive Officer
Dated: March 23, 2017
Steven G. Rogers
2017 Proxy Statement| 63
Gregg A. Gonsalves
CEDAR REALTY TRUST, INC.
2017 STOCK INCENTIVE PLAN
Sabrina L. Kanner
Directors and executive officers as a group (9 persons)(3)
TABLE OF CONTENTS
* | Less than 1% |
2020 Proxy Statement| 55
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
(1) |
|
(2) | Based on 89,327,100 shares of |
(3) | Includes 40,704 shares of
|
Transactions with Related Persons
Our Board has adopted a written policy relating to the review, approval and ratification of transactions between the Company and related persons, pursuant to which any such transactions must be approved by the Audit Committee. The policy applies to transactions or arrangements between us and any related person, including directors, director-nominees, executive officers, greater than 5% stockholders and the immediate family members of each of these groups. In determining whether to approve a related person transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. There were no transactions during 2019 that were subject to our related person transaction policy.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers, directors, and persons who beneficially own more than 10% of the stock of the Company to file initial reports of ownership and reports of changes in ownership. Such persons are also required by Securities and Exchange Commission regulations to furnish the Company with copies of these reports. Securities and Exchange Commission rules require the Company to identify in this Proxy Statement anyone who filed a required report late during the most recent fiscal year. Based solely on our review of copies of such forms received, or written representations from certain reporting persons that no filings were required for such persons, we believe that, during 2019, the Company’s executive officers, directors and holders of more than 10% of its common stock complied with all filing requirements under Section 16(a).
56 |2020 Proxy Statement
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
At Cedar, we believe in doing well by doing good. This philosophy is reflected in our operational goals of bringing essential retail commerce, such as grocers and other important amenities, to underserved communities in densely-populated urban areas. Consistent with that philosophy, we embrace responsible environmental, social and community stewardship as an essential part of our mission to build a successful business and to shape the communities we serve throughout our portfolio, in addition to our workplace community.
In 2019, we continued to demonstrate our commitment as a company to Environmental, Social and Governance Principles. Below are some of the highlights affirming our commitment to corporate social responsibility, both internally and in the markets where we operate:
Environmental
We are committed to sustainability initiatives, in the service of which we are continually exploring ways to incorporate conservationist principles into our property management and development projects.
Reflecting our mission-driven approach to retail property management, we marked the close of 2019 by announcing important achievements in our corporate sustainability program.
The Company’s sustainability strategy includes:
Solar energy — Since June 2018, Cedar has partnered with a solar developer to install rooftop arrays at three of its properties. With 3 more solar installations near final stages of completion at several more properties, Cedar anticipates the quadrupling of its solar electricity production, which is anticipated to enable the Company to replace the burning of nearly three million pounds of coal annually, or the equivalent of 3,177 acres of forests sequestering carbon for one year.
LED lighting — Continuing a strategy that began several years ago, Cedar has completed the outfitting of public areas at 40 of its properties with LED lighting to date, dramatically reducing the energy required to light its retail centers, while decreasing attendant costs. In total, the properties that have been upgraded to LED fixtures reduced their energy consumption by more than six million kilowatt hours in 2019.
Recycling — In addition to its standard recycling program, Cedar also contracted with an environmental company to manage trash and recycling services at 40 properties. Cedar disposed of and recycled approximately 2 million pounds of trash and recycling via sustainable methods in 2019.
Reduction of fuel emissions — Cedar completed the installation of two electric car charging stations with another 10 electric car charging centers scheduled for installation in 2020.
Book collection — For the past several years, Cedar has been working to install book collection bins at dozens of its retail centers, where shoppers can deposit textbooks and other used books. Our vendor partner collects these books regularly and reuses and recycles them. In total, Cedar’s bins have collected more than a million books in the past five years; about one third of these have been recirculated, while the rest have been recycled.
In addition to doing our fair share for the global environment, it is our hope that our demonstrated commitment to sustainability initiatives will serve as a positive model of corporate civic responsibility in the communities we serve, and stimulate analogous efforts among our constituencies.
2020 Proxy Statement| 57
CORPORATE SOCIAL RESPONSIBILITY
Social
As a company, Cedar has affirmed its commitment to social responsibility in numerous ways. We have added four new directors to our Board in the past five years, each of which enhances diversity with respect to gender, ethnicity or professional experience, or a combination thereof. We are proud to haveone-third of our independent Board comprised of female directors. We value not only the diversity of experience these professionals bring to our Board room, but also the enriched cognitive diversity they bring to our collective approach to problem solving. In terms of our corporate culture, approximately 55% of ourmid-level,non-executive managers are female, as well asone-third of our executive team. 63% of our employee population was female, as of the end of 2019.
Cedar’s mission of social responsibility extends outward as well to the communities we serve. In 2019, we were proud to sponsor an $85,000 grant to the Jackie Robinson Foundation to six Ward 7 students of Washington, D.C. Five students receivedone-year curriculum support scholarships as Jackie Robinson Scholars and one student was the recipient of the “JRF Cedar Realty Trust Scholarship” and received a four-year scholarship to attend college.
Governance
Good governance is one of our core principles, which guides our formulation of corporate policies, internal management and relationships with the communities in which we operate. Our belief in stockholder enfranchisement is demonstrated by recent corporate policy enactments which have been overwhelmingly well-received by our stockholders. For example, in 2018, we adopted amendments to our charter andby-laws which empower stockholders to act to amend ourby-laws, as opposed to exclusively reserving this right to our Board.
We have annual election of directors, with no classified Board, and a requirement that directors be elected by a majority vote in uncontested elections. Our Board committees are composed of entirely independent directors, and the average tenure of our directors has been steadily decreasing as we have refreshed our Board with four new director appointments in the last five years, resulting in an increase in the percentage of independent directors with relatively low tenure.
We regularly engage with our stockholders throughout the year, and are responsive to their concerns. For example, in 2016, in response to stockholder feedback, we modified our named executive officers’ employment agreements to remove “modified single-trigger” cash severance provisions and to provide instead for satisfaction of “double trigger” conditions for payment of cash severance following a change in control. We continued this feature in our new CEO and CFO employment agreements effective June 2018, and further migrated our compensation practices to align with best market practices with respect to several important features in these new executive employment agreements, detailed more fully herein. In addition, in response to constructive input from our stockholders, we require a minimum vesting period of one year applicable to all types of equity awards granted under the 2017 Stock Incentive Plan, subject to a 5% carve out, and a minimum three-year vesting period for time-based restricted stock awards. We have also put into place caps on director pay in our 2017 Stock Incentive Plan, which would remain in place under the current proposed amendment.
58 |2020 Proxy Statement
Abraham Eisenstat
Roger M. Widmann
Pamela N. Hootkin
Steven G. Rogers
Gregg A. Gonsalves
Pamela N. Hootkin
Sabrina L. Kanner
Paul G. Kirk, Jr.
Directors and executive officers as a group (9 persons)(3)
Steven G. Rogers
* | Less than 1% |
2020 Proxy Statement| 55
SECURITY OWNERSHIP; OFFICERS AND DIRECTORS
(1) | Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. |
(2) | Based on 89,327,100 shares of common stock outstanding at the close of business on April 20, 2020. |
(3) | Includes 40,704 shares of common stock owned by Mr. Schanzer as custodian for his minor children under the Uniform Gifts to Minors Act. Mr. Schanzer disclaims beneficial ownership of these shares. |
Transactions with Related Persons
Our Board has adopted a written policy relating to the review, approval and ratification of transactions between the Company and related persons, pursuant to which any such transactions must be approved by the Audit Committee. The policy applies to transactions or arrangements between us and any related person, including directors, director-nominees, executive officers, greater than 5% stockholders and the immediate family members of each of these groups. In determining whether to approve a related person transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the related person transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction. There were no transactions during 2019 that were subject to our related person transaction policy.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires executive officers, directors, and persons who beneficially own more than 10% of the stock of the Company to file initial reports of ownership and reports of changes in ownership. Such persons are also required by Securities and Exchange Commission regulations to furnish the Company with copies of these reports. Securities and Exchange Commission rules require the Company to identify in this Proxy Statement anyone who filed a required report late during the most recent fiscal year. Based solely on our review of copies of such forms received, or written representations from certain reporting persons that no filings were required for such persons, we believe that, during 2019, the Company’s executive officers, directors and holders of more than 10% of its common stock complied with all filing requirements under Section 16(a).
56 |2020 Proxy Statement
CORPORATE SOCIAL RESPONSIBILITY
CORPORATE SOCIAL RESPONSIBILITY
At Cedar, we believe in doing well by doing good. This philosophy is reflected in our operational goals of bringing essential retail commerce, such as grocers and other important amenities, to underserved communities in densely-populated urban areas. Consistent with that philosophy, we embrace responsible environmental, social and community stewardship as an essential part of our mission to build a successful business and to shape the communities we serve throughout our portfolio, in addition to our workplace community.
In 2019, we continued to demonstrate our commitment as a company to Environmental, Social and Governance Principles. Below are some of the highlights affirming our commitment to corporate social responsibility, both internally and in the markets where we operate:
Environmental
We are committed to sustainability initiatives, in the service of which we are continually exploring ways to incorporate conservationist principles into our property management and development projects.
Reflecting our mission-driven approach to retail property management, we marked the close of 2019 by announcing important achievements in our corporate sustainability program.
The Company’s sustainability strategy includes:
Solar energy — Since June 2018, Cedar has partnered with a solar developer to install rooftop arrays at three of its properties. With 3 more solar installations near final stages of completion at several more properties, Cedar anticipates the quadrupling of its solar electricity production, which is anticipated to enable the Company to replace the burning of nearly three million pounds of coal annually, or the equivalent of 3,177 acres of forests sequestering carbon for one year.
LED lighting — Continuing a strategy that began several years ago, Cedar has completed the outfitting of public areas at 40 of its properties with LED lighting to date, dramatically reducing the energy required to light its retail centers, while decreasing attendant costs. In total, the properties that have been upgraded to LED fixtures reduced their energy consumption by more than six million kilowatt hours in 2019.
Recycling — In addition to its standard recycling program, Cedar also contracted with an environmental company to manage trash and recycling services at 40 properties. Cedar disposed of and recycled approximately 2 million pounds of trash and recycling via sustainable methods in 2019.
Reduction of fuel emissions — Cedar completed the installation of two electric car charging stations with another 10 electric car charging centers scheduled for installation in 2020.
Book collection — For the past several years, Cedar has been working to install book collection bins at dozens of its retail centers, where shoppers can deposit textbooks and other used books. Our vendor partner collects these books regularly and reuses and recycles them. In total, Cedar’s bins have collected more than a million books in the past five years; about one third of these have been recirculated, while the rest have been recycled.
In addition to doing our fair share for the global environment, it is our hope that our demonstrated commitment to sustainability initiatives will serve as a positive model of corporate civic responsibility in the communities we serve, and stimulate analogous efforts among our constituencies.
2020 Proxy Statement| 57
CORPORATE SOCIAL RESPONSIBILITY
Social
As a company, Cedar has affirmed its commitment to social responsibility in numerous ways. We have added four new directors to our Board in the past five years, each of which enhances diversity with respect to gender, ethnicity or professional experience, or a combination thereof. We are proud to haveone-third of our independent Board comprised of female directors. We value not only the diversity of experience these professionals bring to our Board room, but also the enriched cognitive diversity they bring to our collective approach to problem solving. In terms of our corporate culture, approximately 55% of ourmid-level,non-executive managers are female, as well asone-third of our executive team. 63% of our employee population was female, as of the end of 2019.
Cedar’s mission of social responsibility extends outward as well to the communities we serve. In 2019, we were proud to sponsor an $85,000 grant to the Jackie Robinson Foundation to six Ward 7 students of Washington, D.C. Five students receivedone-year curriculum support scholarships as Jackie Robinson Scholars and one student was the recipient of the “JRF Cedar Realty Trust Scholarship” and received a four-year scholarship to attend college.
Governance
Good governance is one of our core principles, which guides our formulation of corporate policies, internal management and relationships with the communities in which we operate. Our belief in stockholder enfranchisement is demonstrated by recent corporate policy enactments which have been overwhelmingly well-received by our stockholders. For example, in 2018, we adopted amendments to our charter andby-laws which empower stockholders to act to amend ourby-laws, as opposed to exclusively reserving this right to our Board.
We have annual election of directors, with no classified Board, and a requirement that directors be elected by a majority vote in uncontested elections. Our Board committees are composed of entirely independent directors, and the average tenure of our directors has been steadily decreasing as we have refreshed our Board with four new director appointments in the last five years, resulting in an increase in the percentage of independent directors with relatively low tenure.
We regularly engage with our stockholders throughout the year, and are responsive to their concerns. For example, in 2016, in response to stockholder feedback, we modified our named executive officers’ employment agreements to remove “modified single-trigger” cash severance provisions and to provide instead for satisfaction of “double trigger” conditions for payment of cash severance following a change in control. We continued this feature in our new CEO and CFO employment agreements effective June 2018, and further migrated our compensation practices to align with best market practices with respect to several important features in these new executive employment agreements, detailed more fully herein. In addition, in response to constructive input from our stockholders, we require a minimum vesting period of one year applicable to all types of equity awards granted under the 2017 Stock Incentive Plan, subject to a 5% carve out, and a minimum three-year vesting period for time-based restricted stock awards. We have also put into place caps on director pay in our 2017 Stock Incentive Plan, which would remain in place under the current proposed amendment.
58 |2020 Proxy Statement
OTHER MATTERS
The cost of solicitation of proxies will be borne by the Company. The Company may use the services of its directors, officers, employees and others to solicit proxies, personally or by telephone; arrangements may also be made with brokerage houses and other custodians, nominees, fiduciaries and stockholders of record to forward solicitation material to the beneficial owners of stock held of record by such persons. The Company may reimburse such solicitors for reasonableout-of-pocket expenses incurred by them in soliciting, but no compensation will be paid for their services.
Proposals of stockholders intended to be presented at the Company’s 2021 Annual Meeting of Stockholders pursuant to Rule14a-8 of the rules promulgated under the Securities Exchange Act of 1934, as amended, must be received by the Company on or prior to December 28, 2020 to be eligible for inclusion in the Company’s Proxy Statement and form of proxy to be used in connection with such meeting. Under Rule14a-8, we are not required to include stockholder proposals in our proxy materials unless this condition is satisfied. Accordingly, any notice of stockholder proposals received after this date will be considered untimely. In addition, proposed nominations by stockholders for persons to serve as directors at the 2020 Annual Meeting must comply with the advance notice provisions and other requirements specified in ourby-laws and be received by the Company between January 27, 2021 and February 26, 2021. Nominations not received within this time frame will be considered untimely.
The Company may elect to send a single copy of its 2019 Annual Report and this Proxy Statement to any household at which two or more stockholders reside, unless one of the stockholders at such address notifies the Company that he or she desires to receive individual copies. This “householding” practice reduces the Company’s printing and mailing costs. Stockholders who participate in householding will continue to receive separate proxy cards. Stockholders may request to discontinue orre-start householding, or to request a separate copy of the 2019 Annual Report or 2020 Proxy Statement, as follows:
stockholders owning shares through a bank, broker or other holder of record should contact such record holder directly; and
stockholders of record should write to the Company at 44 South Bayles Avenue, Port Washington, New York 11050, attention: Investor Relations, Tel. (516)767-6492. The Company will promptly deliver such materials upon request.
At the date of this Proxy Statement, the only business which the Board intends to present or knows that others will present at the meeting is that hereinabove set forth. If any other matter or matters are properly brought before the meeting, or any adjournment thereof, it is the intention of the persons named in the accompanying form of proxy to vote the proxy on such matters in accordance with their judgment.
By Order of the Board of Directors,
BRUCE J. SCHANZER
President and Chief Executive Officer
Dated: April 27, 2020
2020 Proxy Statement| 59
PORT WASHINGTON, NY 11050 | VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/26/2020 for shares held directly and by 11:59 P.M. ET on 05/26/2020 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 05/26/2020 for shares held directly and by 11:59 P.M. ET on 05/26/2020 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | KEEP THIS PORTION FOR YOUR RECORDS | |
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DETACH AND RETURN THIS PORTION ONLY | ||
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
The Board of | ||||||||||||||||||||||||
1. To elect 7 nominees as
| For | Against | Abstain | For | Against | Abstain | ||||||||||||||||||
1a. | Abraham Eisenstat | ☐ | ☐ | ☐ | 3. The approval(non-binding) of the compensation of the Company’s | ☐ | ☐ | ☐ | ||||||||||||||||
1b. | Gregg A. Gonsalves | ☐ | ☐ | ☐ | Named Executive Officers.
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| Pamela N. Hootkin | ☐ | ☐ | ☐ | ||||||||||||||||||||
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Bruce J. Schanzer Roger M. Widmann | ☐ ☐ ☐ ☐ | ☐ ☐ ☐ ☐ | ☐ ☐ ☐ ☐ | Due to concerns relating to the
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The Board of Directors recommends you vote FOR proposals 2 and 3. | For | Against | Abstain | |||||||||||||||||||||
2. To ratify the appointment of Ernst & Young LLP as independent registered |
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Please sign exactly as your
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Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice of Meeting and Proxy Statement are available at www.cedarrealtytrust.com
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CEDAR REALTY TRUST, INC. 2020 Annual Meeting of Stockholders - May 27, 2020 This proxy is solicited on behalf of the Board of Directors The undrsigned stockholder of CEDAR REALTY TRUST, INC., a Maryland corporation, hereby appoints Bruce J. Scharzer, Philip R. Mays and Adina G. Storch and each of them the proxies of the undersigned with the full power of substitution to vote at the Annual Meeting of the Company to be held at the office of the Company, 44 South Bayles Avenue, Port Washington, New York 11050 or by means of remote communication, at 10:00 AM on May 27, 2020, and at any adjournment or adjournments thereof (the “Meeting”), with all the power which the undersigned would have if personally present, hereby revoking any proxy heretofore given. The undersigned hereby acknowledges receipt of the proxy statement for the Meeting and instructs the proxies to vote as directed on the reverse side. | ||||||||||||
This proxy, when properly signed, will be voted in the manner directed. If no specification is made, this proxy will be voted for the election of all of the Director-Nominees set forth herein, for the ratification of the appointment of Ernst & Young LLP for the fiscal year ending December 31, 2020, for the approval of compensation for all of the Company’s Named Executive Officers and in the discretion of the proxy holders as to any other matters that may properly come before the Meeting. Continued and to be signed on reverse side |