Skills and Qualifications Mr. Taylor was Senior Managing Director and Partner at Penzance Properties, a vertically integrated owner, operator and developer of office and other properties in the Washington, D.C. metro area. Previously, Mr. Margolis was aco-founding partner of Arsenal Real Estate Funds, a private real estate investment management firm, from 2004 through 2011. Before forming Arsenal in 2004, from 1992 to 2004, Mr. Margolis held senior positions at Prudential Real Estate Investors in portfolio management, capital markets and as General Counsel. Before that, Mr. Margolis worked for The Prudential Insurance Company of America asin-house real estate counsel from 1988 through 1992, and as a real estate associate at the law firm of Nutter, McClennen & Fish from 1986 through 1988. Mr. Margolis has been nominated to serve on our Board based on his extensive finance and real estate experience and his experience as a senior executive which the Board believes enables him to provide us with leadership and financial expertise.
| Proposal No. 1—Election of Directors(continued)
|
| | | | | JOHN B. RHEA | | | 
| | Age:54
Director since:October 2015
| | |
Mr. Rhea has served on our Board since January 2017 and, prior to our IPO, from October 2015 to January 2017, served on the boards of the IH Holding Entities. Mr. Rhea has served as President, Capital Markets and Corporate Finance at Siebert Cisneros Shank & Co., LLC, a full-service investment banking firm, since June 2017. Mr. Rhea is also Managing Partner of RHEAL Capital Management, LLC, a real estate development and investment firm he founded in March 2014, specializing in multifamily rental housing andmixed-use projects. Mr. Rhea previously served as a Senior Advisor to The Boston Consulting Group, a worldwide management consulting firm from July 2014 to September 2017. From May 2009 to January 2014, Mr. Rhea was a senior appointee of Michael R. Bloomberg, Mayor of the City of New York, where he served as Chairman and Chief Executive Officer of the New York City Housing Authority. Prior to his service with the Bloomberg Administration, Mr. Rhea was Managing Director andCo-Head of Consumer and Retail investment banking at Barclays Capital (and its predecessor firm Lehman Brothers) from May 2005 to April 2009. Previously, Mr. Rhea served as Managing Director at JPMorgan Chase & Co. from May 1997 to April 2005. Earlier in his career, Mr. Rhea worked at PepsiCo, Inc. and The Boston Consulting Group. Mr. Rhea has served on and chaired severalnon-profit boards and is currently a director of Wesleyan University, Red Cross Greater New York and University of Detroit Jesuit High School.
Our Board considered Mr. Rhea’s significant experience in our industry, including in development and regulation and his prior senior positions at real estate companies and regulatory bodies, including as Chairman and CEO of the New York City Housing Authority, and other companies.
| | | | | J. HEIDI ROIZEN | | | 
| | Age:62 | | |
Ms. Roizen has been a partner with leading venture capital firm Threshold Ventures (formerly DFJ Ventures) since 2012 and serves as a board director for privately held portfolio companies Planet, Zoox, Memphis Meats and Polarr. Ms. Roizen is also a member of the board of directors of DMGT, a public global media and information services company (LSE: DMGT). She alsoco-leads the Threshold Venture Fellows program in the Engineering Department at Stanford University and serves on the Advisory Council of Stanford’s Institute for Human-Centered Artificial Intelligence. Among her past activities, Ms. Roizen has been a partner at DFJ and Mobius Venture Capital from 1999 to 2006, and has served as a member of the Board of Directors of the National Venture Capital Association, where she served on the Executive Committee, chaired the annual conference and chaired the Public Outreach committee. She has served on numerous private and public company boards, including TiVo (NASDAQ: TIVO) and Great Plains Software (was NASDAQ: GPSI until it was acquired by Microsoft). Before becoming a venture capitalist, Ms. Roizen served as Vice President of World Wide Developer Relations for Apple. Ms. Roizen started her career as an early Silicon Valley pioneer,co-founding software company T/Maker in 1983 and serving as its CEO for over a decade until its acquisition by Deluxe Corporation (NYSE: DLX) in 1994. During that time, she also served on the Board of Directors and as president of the Software Publishers Association (now the Software Industry and Information Association—SIIA).
| | | | | | | | 11 | | | 2020 Proxy Statement
| | 15 |
| | | 
| | Board Recommendation | | | The Board of Directors unanimously recommends that you vote “FOR” the election of each of the director nominees named above. |
| Proposal No. 1—Election of Directors(continued)
|
Also active in nonprofit organizations, Ms. Roizen is a member of the Board of Advisors of the National Center for Women in Information Technology, and of Springboard Enterprises. She is a past board member of the Stanford Alumni Association, where she served on its Trustee Nominating Committee for five years. Ms. Roizen is a frequent guest speaker at business schools across the country, and is the subject of a popular HBS case about building business networks. In 2018, Ms. Roizen was named the “Financial Woman of the Year” by the Financial Women of San Francisco.
Ms. Roizen has been nominated to our board based on her experience in entrepreneurial growth and business development which the Board believes brings business leadership, financial expertise and risk management skills to the Board.
| | | | | JANICE L. SEARS | | | 
| | Age:59
Director since:January 2017
| | |
Ms. Sears has served on our Board since January 2017. Ms. Sears serves as Director and Audit Committee Chairperson of Essex Property Trust (NYSE: ESS), a real estate investment trust that owns multifamily properties. She is also Director, former Board Chair of The Swig Company, an owner of office properties in New York and California. Ms. Sears was Director, Audit Chair of Biomed Realty Trust, Inc. until its sale in early 2016. She served on the board of Helix RE, a real estate software startup until late 2019. Until 2009, Ms. Sears held the position of Managing Director, Western Region Head in the Real Estate Investment Banking Group at Banc of America Securities. Concurrently the San Francisco Market President for Bank of America, she managed a senior leadership team, deepening relationships with nonprofits and local governments. Prior to 1988, Ms. Sears was a Real Estate Economist at both Chemical Bank and Citicorp in New York. Ms. Sears’ activities have included G100, West Audit Committee Network, Nareit, Urban Land Institute, and NACD and she is a frequent speaker including at both Harvard and Columbia Business Schools. Ms. Sears was named ‘Forever Influential’ by SF Business Times and inducted into Allen Matkins Hall of Fame, annual recognition by Bisnow’s Bay Area Power Women, among other awards. Ms. Sears is active philanthropically both on boards and spending time in the community including with Compass Family Services, Meals on Wheels, tutoring at the Marina Middle School, and serving meals at St. Anthony’s.
Our Board considered Ms. Sears’ knowledge of capital markets and accounting methods and principles, as well as her extensive financial background and experience working in the commercial real estate and REIT industry.
| Proposal No. 1—Election of Directors(continued)
|
| | | | | WILLIAM J. STEIN | | | 
| | Age:58
Director since:October 2012
| | |
Mr. Stein has served on our Board since January 2017 and, prior to our IPO, from October 2012 to January 2017, served on the boards of the IH Holding Entities. Mr. Stein has been a Senior Managing Director of Blackstone since January 2006. Since joining Blackstone in 1997, Mr. Stein has been involved in the direct asset management and asset management oversight of Blackstone’s global real estate platform. Before joining Blackstone, Mr. Stein was a Vice President at Heitman Real Estate Advisors and JMB Realty Corp. Mr. Stein currently serves on the Board of Nevada Property 1 LLC (The Cosmopolitan of Las Vegas), where he serves on the Audit Committee, and on the Board of BRE Select Hotels Corp (a voluntary filer with the Securities and Exchange Commission (the “SEC”)). He previously served on the Board of Hilton Worldwide Holdings Inc. (NYSE: HLT), Extended Stay America, Inc. (NYSE: STAY), La Quinta Holdings Inc. (NYSE: LQ) and Brixmor Property Group Inc. (NYSE: BRX). Mr. Stein is a member of the University of Michigan Ross School of Business Advisory Board and the University of Michigan Real Estate Fund Advisory Board.
Our Board considered Mr. Stein’s tenure with Blackstone, his involvement in the direct asset management and asset management oversight of Blackstone’s global real estate platform, his extensive financial background and his experience as an asset manager focusing on real estate investments.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES NAMED ABOVE.
THE BOARD OF DIRECTORS AND CERTAIN GOVERNANCE MATTERS Our Corporate Governance
The business and affairs of the Company are managed under the direction and oversight of our Board, as provided by Maryland law, and the Company conducts its business through meetings of the Board and its four standing committees: the Audit Committee, the Compensation and Management Development Committee, (the “Compensation Committee”), the Nominating and Corporate Governance Committee and the Investment and Finance Committee. Members of our Board remain informed about our business through discussion with our CEO, President and Chief Operating Officer, Executive Vice President and Chief Financial Officer, Executive Vice President and Chief Legal Officer, and other officers and associates, and by reviewing materials provided to them and participating in regular meetings of the Board and its committees. We are committed to exercising and maintaining strong corporate governance practices. We believe that good governance promotes the long-term interests of our stockholders, strengthens Board and management accountability and improves our standing as a trusted member of the communities we serve. Notable features ofThe Board regularly monitors our corporate governance policies and profile to ensure we meet or exceed the requirements of applicable laws, regulations and rules, and the listing standards of the NYSE. We have instituted a variety of practices to foster and maintain responsible corporate governance, which are set forth below.described in this section. | | | | | | Corporate Governance Snapshot | | | | | Total Number of Director Nominees | | 10 | | | Percentage of independent director nominees | | 90% | | | Average Tenure of Directors Standing for Election (years) | | 4.3 | | | Chairperson Position Separate from CEO | | ü | | | Annual Election of All Directors | | ü | | | Proxy Access (3%/3 years) | | ü | | | No Stockholder Rights Plan | | ü | | | Limits on the Number of Directorships Held by Directors | | ü | | | Regular Executive Sessions of Independent Directors | | ü | | | New Director Orientation | | ü | | | Annual Board and Committee Self-Evaluations | | ü | | | Annual Review of Management Succession Plans | | ü | | | Code of Business Conduct and Ethics | | ü | | | Policies and Practices to Align Executive Compensation with Long-Term Stockholder Interests | | ü | | | Stock Ownership Requirements for Directors and Executive Officers | | ü | | | Anti-Hedging and Anti-Pledging Policies | | ü | | | Clawback Policy (Long-Term Incentive Awards) | | ü |
Stockholder Rights and Accountability Our Board is not classified and each of our directors is subject to annual reelection (we will not classify our Board in the future without the approval of our stockholders);. Stockholders holding at least 10% of outstanding shares have the right to call special meetings;meetings. Stockholders holding a majority of outstanding shares have the right to amend, alter or repeal our Bylaws, or adopt new Bylaws;Bylaws. Stockholders possess the right to nominate candidates to the Board through proxy access provisions of our Bylaws. Stockholders may act by written consent;consent. | | | | | | | | | |
| | 17 |
| The Board of Directors and Certain Governance Matters (continued) |
We do not have a stockholder rights plan, and we will not adopt a stockholder rights plan in the future without stockholder approval; andapproval. We have opted out of the Maryland business combination and control share acquisition statutes and cannot opt in without stockholder approval. We actively engage with our stockholders, seek input, address questions and concerns, and provide perspective on Company policies and practices through our direct outreach to investors, our annual meetings of stockholders and regular detailed investor presentations. Board Practices A substantial majority of our director nominees (90%) are independent. Each of our Audit Committee, Compensation and Management Development Committee, and Nominating and Corporate Governance Committee is composed entirely of independent directors. Our Board is led by our Chairperson, and the Chairperson position is separate from our CEO. Our Board is committed to diversity, and 40% of our director nominees represent women and people of color. We conduct annual Board and Committee evaluations; Generally, our directors are not expected to serve after reaching age 75;committee evaluations.
We intend that no director serve more than 15 years on our Board;Board, and no committee chairperson serve more than five years as a chairperson of that committee. Our independent directors meet regularly in executive sessions without the presence of our corporate officers ornon-independent directors;Director nominees’ average tenure is 4.3 years.
| • | | Our independent directors meet regularly in executive sessions without the presence of our corporate officers or non-independent directors. |
We have instituted limits on the number of directorships held by our directors to prevent “overboarding”;“overboarding.” We provide robust director orientation and continuing education programs;programs. The Board is committed to refreshment, and nominated two new directors to stand for election at the Annual Meeting. The Board regularly rotates committee members; Our Board is committed to refreshment and diversity; andmembers.
Our Code of Business Conduct and Ethics applies to members of the Board. Robust Stock Ownership and Retention Requirements Our directors and executive officers are subject to stock ownership and retention requirements:
President and CEO: 6X base salary;salary.
Executive officers: 3X base salary; and
| • | | Non-CEO executive officers: 3X base salary. |
Non-employee directors: 5X annual cash retainer for Board service.
| • | | Non-employee directors: 5X annual cash retainer for Board service. |
See “Executive Compensation—Compensation Discussion and Analysis—Other Matters—Stock Ownership Policy” for more details.
| The Board of Directors and Certain Governance Matters(continued)
|
Director Independence and Independence Determinations Under our Corporate Governance Guidelines and the NYSE rules, a director is not independent unless the Board affirmatively determines that, in addition to not having a disqualifying relationship, as set forth in the NYSE rules, he or she does not have a direct or indirect material relationship with the Company or any of its subsidiaries which, in the opinion of the Board would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Our Corporate Governance Guidelines define independence in accordance with the independence definition in the current NYSE corporate governance rules for listed companies. Our Corporate Governance Guidelines require the Board to review the independence of all directors at least annually. In the event a director has a relationship with the Company that is relevant to his or her independence and is not addressed by the objective tests set forth in the NYSE independence definition, the Board will determine, considering all relevant facts and circumstances, whether such relationship is material and whether such relationship would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Nominating and Corporate Governance Committee undertook reviews of director independence and made recommendations to our Board as to those directors meeting the requisite NYSE independence standards applicable to serve on the Board and any heightened standards to serve on a committee of the Board. In making its independence
| The Board of Directors and Certain Governance Matters (continued) |
determinations, the Board considered and reviewed all information known to it, including information identified through directors’ questionnaires. As a result of these reviews, the Board has affirmatively determined that each of Michael D. Fascitelli, Jana Cohen Barbe, Richard D. Bronson, Michael D. Fascitelli, Jeffrey E. Kelter, Joseph.Joseph D. Margolis, John B. Rhea, J. Heidi Roizen, Janice L. Sears, Frances Aldrich Sevilla-Sacasa, and William J. SteinKeith D. Taylor is independent under all applicable NYSE standards for Board service and under our Corporate Governance Guidelines. In addition, the Board previously determined that Kenneth A. Caplan, Robert G. Harper and Barry S. Sternlicht,J. Heidi Roizen, who areis not being nominated forre-election at the Annual Meeting, werewas independent under all applicable NYSE standards for Board service and under our Corporate Governance Guidelines. At the committee level, the Board has affirmatively determined that each of the current members of the Audit Committee (Jana Cohen Barbe, Richard D. Bronson, John B. Rhea,J. Heidi Roizen, and Janice L. Sears) is “independent” for purposes of Rule10A-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and that each of the current members of the Compensation and Management Development Committee (Jana Cohen Barbe, MichaelRichard D. Fascitelli, Jeffrey E. Kelter,Bronson, Joseph D. Margolis, John B. Rhea, and William J. Stein)Janice L. Sears) is “independent” for purposes of Section 10C(b) of the Exchange Act. The Board has also affirmatively determined that J. Heidi Roizen,each of Frances Aldrich Sevilla-Sacasa and Keith D. Taylor, whom the Board will vote to appoint to the Audit Committee following the Annual Meeting, is “independent” for purposes of Rule10A-3 of the Exchange Act, and JosephKeith D. Margolis,Taylor, whom the Board will vote to appoint to the Compensation and Management Development Committee following the Annual Meeting, is “independent” for purposes of Section 10C(b) of the Exchange Act. In making its independence determinations, the Board considered and reviewed all information known to it, including information identified through directors’ questionnaires.
Board Structure Our Articles of Incorporation and our Bylaws provide that our Board will consist of such number of directors as may from time to time be fixed by the Board, but may not be more than 15 or fewer than the minimum number permitted by Maryland law, which is one. Our Board is led by our Chairperson, and the Chairperson position is separate from our President and CEO position. We believe that the separation of the Chairperson and President and CEO positions is appropriate corporate governance for us at this time. Accordingly, Mr. BlairFascitelli serves as the Board Chairperson, while Mr. Tanner serves as our President and CEO. Our Board believes that this structure best encourages the free and open dialogue of competing views and provides for strong checks and balances. Additionally, our Chairperson’s attention to Board and committee matters allows the President and CEO to focus more specifically on overseeing the Company’sday-to-day operations, as well as strategic opportunities and planning. Board and Committee Evaluations Our Board recognizes that a robust and constructive Board and committee evaluation process is an essential component of board effectiveness. As such, our Board and each of our committees conduct an annual evaluation, which includes a qualitative assessment by each director of the performance of the Board and the committee or committees on which the director serves. The Nominating and Corporate Governance Committee, in conjunction with the Board Chairperson, oversees the evaluation process. | | | | | | | | Review of Evaluation Process | | Advanced Questionnaires | | Evaluation Results | | | | The Nominating and Corporate Governance Committee reviews evaluation process annually. | | Cover: • Efficiency and effectiveness; • Composition; • Quality of discussions; • Quality of information and materials provided; • Processes; and • Culture. | | Evaluation results and recommendations are discussed with the Board, committees, and individual directors. |
| | | | | | | | 15 | | | 2020 Proxy Statement
| | 19 |
| The Board of Directors and Certain Governance Matters(continued) |
| | | 
| | Feedback Incorporated Over the past few years, the evaluation process has led to a broader scope of topics covered in the Board meetings, improvements in Board process, and changes to Board and committee composition and structure. This year’s evaluation identified areas for continued focus, including: • Board risk oversight, including cybersecurity, data privacy, brand and reputation, and legal and regulatory; • Sustainability and climate change; • Management, director, and committee succession planning; and • Board composition and enhancements to support board effectiveness. |
Committees of the Board of Directors; Meetings of the Board of Directors and its Committees Our Board has established an Audit Committee, a Compensation and Management Development Committee, a Nominating and Corporate Governance Committee and an Investment and Finance Committee. The following table provides the current membership of each of the standing Board committees. | | | | | | | | | | | | | | Director | | Audit Committee | | Compensation and
Management
Development
Committee | | Nominating and
Corporate Governance
Committee | | Investment and
Finance Committee | | | | | | Committee Michael D. Fascitelli(1)
| | Nominating and
Corporate Governance
Committee
| | Investment and
Finance Committee
| | | | | | Bryce Blair* | | | | | | | | | | | | | | Dallas B. Tanner | | | | | | | | Member | | | | | | Jana Cohen Barbe | | Member | | Member | | | | | | | | | | Richard D. Bronson | | Member | | | | Member | | Chairperson | | | | | | | | Kenneth A. Caplan(1)Jeffrey E. Kelter | | | | | | | | Member | | Chairperson | | | | | | MichaelJoseph D. FascitelliMargolis | | | | Member | | | | Member | | | | | | John B. Rhea | | | | Chairperson | | | | | | Robert G. Harper(1) | | | | | | Member | | | | | | J. Heidi Roizen(2) | | Member | | | | | | Jeffrey E. Kelter | | | | Member | | Member | | | | | | | | John B. RheaJanice L. Sears | | Chairperson | | Member | | Chairperson | | | | | | | | | | Janice L. Sears | | Chairperson | | | | | | Member | | | | | | William J. Stein | | | | Member | | Chairperson | | | | | | | | Barry S. Sternlicht(1) | | | | | | | | |
*(1) | Chairperson of the BoardBoard. |
(1)(2) | Messrs. Caplan, Harper and Sternlicht haveMs. Roizen has not been nominated to stand for reelection at the Annual Meeting.
|
During the year ended December 31, 2019,2022, the Board held fiveeight meetings, the Audit Committee held seven meetings, the Compensation and Management Development Committee held sixseven meetings, the Nominating and Corporate Governance Committee held threetwo meetings and the Investment and Finance Committee held four meetings. In 2019,2022, each director attended at least 75% of the meetings of the Board and of the committees on which he or she served as a member during the time in which he or she served as a member of the Board or such committees. All directors are expected to make every effort to attend all meetings of the Board, meetings of the committees of which they are members and our annual meeting of stockholders. We expect all directors to attend any meeting of stockholders, and all of our directors attended the 20192022 annual meeting of stockholders. | | | | | 2020 Proxy Statement | | 16 | | | | 20 | | 2023 Proxy Statement | | |
| The Board of Directors and Certain Governance Matters(continued) |
Audit Committee | | | Chair: Ms. Sears Additional Committee Members: Ms. Barbe Mr. RheaMs. Roizen Mr. Bronson
• All members are “independent” in accordance with our Audit Committee charter and the applicable NYSE and Exchange Act rules • All members are financially literate within the meaning of the NYSE rules • Ms. Sears Mr. Bronson and Mr. RheaMs. Roizen qualify as “audit committee financial experts” as defined by applicable SEC rules of the Securities and Exchange Commission (the “SEC”) • Governed by a Board-approved charter | | The Audit Committee is responsible for, among other things:Primary Responsibilities:
• assistingAssisting the Board with its oversight of our accounting and financial reporting process and financial statement audits; • assistingAssisting the Board with its oversight of our disclosure controls procedures and our internal control over financial reporting; • assessingEngaging the independent registered public accounting firm’sfirm and assessing its qualifications and independence; • engaging the independent registered public accounting firm; • overseeingOverseeing the performance of our internal audit function and independent registered public accounting firm;
• assistingAssisting with our compliance with legal and regulatory requirements in connection with the foregoing; • Overseeing the receipt, retention and treatment of complaints we receive under the Company’s whistleblower policy; • Reviewing related person transactions as required under our Related Person Transactions Policy; and • overseeingOverseeing our enterprise risk management program, covering exposure to risks facing the Company, including, but not limited to, financial, tax, legal and enterprise risks, informationand technology and information security risks, including cybersecurity, risks, tax risks, legal risksdata privacy, business continuity and enterprise risks.disaster recovery. The Audit Committee has established policies and procedures for thepre-approval of all services provided by the independent registered public accounting firm. See “Proposal2—Pre-Approval Policy for Services of Independent Registered Public Accounting Firm”.Firm.” The Audit Committee also has established procedures for the receipt, retention and treatment, on a confidential basis, of complaints received by the Company regarding its accounting, internal controls and auditing matters. The Audit Committee charter is available on our investor website at: www.invitationhomes.comwww.invh.com under “About Us”—“Investors”—“Corporate Governance”“Corporate Overview”—“Governance Documents”—“Audit Committee Charter.” |
| The Board of Directors and Certain Governance Matters(continued)
|
Compensation and Management Development Committee
| | | Chair:
Mr. Rhea
Additional Committee Members:
Ms. Barbe
Mr. Fascitelli
Mr. Kelter
Mr. Stein
• All members are “independent” in accordance with our Compensation and Management Development Committee charter and the applicable NYSE and Exchange Act rules
• Governed by a Board-approved charter
| | The Compensation Committee is responsible for, among other things:
• establishing and reviewing the Company’s overall compensation philosophy;
• overseeing management development and executive succession planning;
• overseeing the goals, objectives and compensation of our President and CEO, including evaluating the performance of the President and CEO in light of those goals;
• reviewing and determining the salaries, performance-based incentives, and other matters related to the compensation of our other executive officers;
• making recommendations to the Board regarding director compensation;
• approving our benefit and other compensation plans and setting the terms of and making awards thereunder; and
• assisting with our compliance with the compensation rules, regulations and guidelines promulgated by the NYSE, the SEC and other laws, as applicable.
For a description of our process for determining compensation, including the role of the Compensation Committee’s independent compensation consultant, see “Executive Compensation—Compensation Discussion and Analysis.”
The Compensation and Management Development Committee charter is available on our website at: www.invitationhomes.com under “About Us”—“Investors”—“Corporate Governance”—“Governance Documents”—“Compensation and Management Development Committee Charter.”
Compensation Committee Interlocks and Insider Participation. During 2019, our compensation committee was composed of Mr. Rhea, Ms. Barbe, Mr. Fascitelli, Mr. Kelter and Mr. Stein. During 2019 and as of the date of this Proxy Statement, none of our executive officers served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officers served on our Compensation Committee or Board.
|
| The Board of Directors and Certain Governance Matters(continued)
|
Nominating and Corporate Governance Committee
| | | Chair:
Mr. Stein
Additional Committee Members:
Mr. Bronson
Mr. Harper
Mr. Kelter
• All members are “independent” in accordance with our Nominating and Corporate Governance Committee charter and the applicable NYSE rules
• Governed by a Board-approved charter
| | The Nominating Committee is responsible for, among other things:
• developing a set of governance principles applicable to the Company and overseeing the Company’s governance policies;
• identifying, reviewing, assessing and making recommendations to the Board as to candidates to serve on the Board and its committees;
• considering matters related to director independence and conflicts of interest;
• recommending those to serve as committee chairpersons; and
• overseeing the annual evaluation of the Board and management.
The Nominating and Corporate Governance Committee charter is available on our website at: www.invitationhomes.com under “About Us”—“Investors”—“Corporate Governance”—“Governance Documents”—“Nominating and Corporate Governance Committee Charter.”
|
Investment and Finance Committee
| | | Chair:
Mr. Fascitelli
Additional Committee Members:
Mr. Kaplan
Mr. Harper
Ms. Sears
Mr. Tanner
• Governed by a Board-approved charter
| | The Investment and Finance Committee is responsible for, among other things:
• overseeing matters related to the Company’s investments in real estate assets proposed by management;
• overseeing the performance of the Company’s assets;
• reviewing the Company’s investment and disposition policies, procedures, strategies and programs; and
• reviewing the Company’s capital raising and other financing activities.
The Investment and Finance Committee charter is available on our website at: at www.invitationhomes.com under “About Us”—“Investors”—“Corporate Governance”—“Governance Documents”—“Investment and Finance Committee Charter.”
|
The Board, upon recommendation from the Nominating and Corporate Governance Committee, reviews and determines the composition of the committees. Through periodic committee refreshment, we balance the benefits derived from continuity and depth of experience with the benefits gained from fresh perspectives and enhancing our directors’ understanding of different aspects of our business.
| The Board of Directors and Certain Governance Matters(continued)
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As part of our ongoing commitment to proactive Committee refreshment, following the Annual Meeting, the Board will vote to elect the following members to the standing committees (assuming all director nominees are elected). Neither Mr. Margolis nor Ms. Roizen currently serve on the Board or on any committees of the Board.
| | | | | | | | | | | | | | | | | | | | | | | | | | Director
| | Audit Committee | | Compensation
Committee
| | Nominating and
Corporate Governance
Committee
| | Investment and
Finance Committee
| | | | | | Bryce Blair* | | | | | | | | | | | | | | Dallas B. Tanner | | | | | | | | Member | | | | | | Jana Cohen Barbe | | Member | | Member | | | | | | | | | | Richard D. Bronson | | | | | | Member | | Member | | | | | | Michael D. Fascitelli | | | | Member | | | | Chairperson | | | | | | Jeffrey E. Kelter | | | | Member | | Member | | | | | | | | Joseph D. Margolis | | | | Member | | | | Member | | | | | | John B. Rhea | | | | Chairperson | | Member | | | | | | | | J. Heidi Roizen | | Member | | | | Member | | | | | | | | Janice L. Sears | | Chairperson | | | | | | Member | | | | | | William J. Stein | | Member | | | | Chairperson | | |
* | Chairperson of the Board
|
Corporate Governance Guidelines
We are committed to exercising strong corporate governance practices. Good governance promotes the long-term interests of our stockholders, strengthens Board and management accountability and improves our standing as a trusted member of the communities we serve.
Our governance structure and processes are guided by key governance documents, including our Corporate Governance Guidelines and Committee charters, which govern the operation of the Board and its Committees in the execution of their responsibilities. Our Corporate Governance Guidelines are reviewed periodically by our Nominating and Corporate Governance Committee and, to the extent deemed appropriate in light of emerging practices, changing regulatory requirements and issues raised by our stockholders, revised accordingly upon recommendation to and approval by our Board.
Our Corporate Governance Guidelines, committee charters, and other corporate governance information are available on our website at www.invitationhomes.com under “About Us”—“Investors”—“Corporate Governance”—“Governance Documents.” Any stockholder may also request them in print, without charge, by contacting the Corporate Secretary of Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201.
Executive Sessions
Executive sessions, which are meetings of thenon-management members of the Board, generally take place at every regular Board meeting. In addition, at least once a year, the independent directors meet in a private session that excludes management and directors who have not been determined independent. At each of these meetings, thenon-management and independent directors in attendance, as applicable, will determine which member will preside at such session.
Code of Business Conduct and Ethics
We maintain a Code of Business Conduct and Ethics (the “Code of Conduct”) that is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions which is posted on our website at www.invitationhomes.com under “About Us”—“Investors”—“Corporate Governance”—“Governance Documents.” Our Code of Conduct sets forth our policies and expectations on a number of topics, including, but not limited to, conflicts of interest, compliance
| The Board of Directors and Certain Governance Matters(continued)
|
with laws, use of our assets, gifts and entertainment, fraud, outside activities, political contributions, bribery, corruption, and business conduct and fair dealing. Our Code of Conduct is a “code of ethics,” as defined by Item 406 of RegulationS-K promulgated by the SEC. We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our website rather than by filing a Current Report on Form8-K and within the time period required under applicable rules and regulations.
Oversight of Risk Management
We face various forms of risk in our business ranging from broad economic, housing market, and interest rate risks, to more specific factors, such as credit risk related to our residents,re-leasing of properties and competition for properties. See Part I. Item 1A. “Risk Factors” in our Annual Report on Form10-K for the fiscal year ended December 31, 2019 (the “2019 Form10-K”). Our Board believes that effective risk management involves our entire corporate governance framework. Both management and the Board have key responsibilities in managing risk throughout the Company. The Board has overall responsibility in the oversight of risk management related to the Company and its business. A fundamental part of risk oversight is not only understanding the material risks a company faces and the steps management is taking to manage those risks, but also understanding what level of risk is appropriate for the Company. The Board is supported in its risk oversight function by its Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Investment and Finance Committee. Each of these committees regularly meets with and reports to the Board. Management is responsible for identifying material risks, implementing appropriate risk management strategies, integrating risk management into our decision-making process and ensuring that information with respect to material risks is transmitted to senior executives and the Board. Members of the Board regularly meet with members of management and other key personnel who advise the Board on areas of enterprise risk, the Company’s risk mitigation and response strategies and any incidents that have arisen.
| The Board of Directors and Certain Governance Matters(continued)
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The table below shows the Board’s and management’s key responsibilities in managing and overseeing risk throughout the Company.
Risk Oversight Responsibilities
| | | | | | | | | | | Board
| Risk Areas
Strategic
• Reputation
• Market Dynamics
• Acquisitions & Dispositions
Operational
• Sales & Marketing
• Service & Delivery
• Information Systems & Cybersecurity
• Infrastructure & Assets
• Hazards &
Weather
• People
Financial
• Financial Reporting & Internal Controls
• Capital Structure
• Market
• Liquidity & Credit
• Tax
Legal, Regulatory & Compliance
• Environmental
• Social
• Governance
| | Responsibilities
• Overall oversight of the risk management process
• Development of business strategy and major resource allocation
• Leadership of management succession planning
• Business conduct and compliance oversight
• Receipt of regular reports from Board committees on specific risk oversight responsibilities
| | Board Committees
| | Audit | | Compensation and
Management
Development
| | Nominating and
Corporate
Governance
| | Investment and
Finance
| | • Oversight of enterprise risk management activities
• Oversight of accounting and financial reporting
• Oversight of integrity of financial statements
• Oversight of compliance with legal and regulatory requirements applicable to accounting and financial reporting processes
• Oversight of the performance of internal audit function
• Oversight of the effectiveness of internal controls
• Oversight of registered public accounting firm’s qualifications, performance and independence
| | • Oversight of compensation-related risks and overall philosophy, as further described under “Other Matters—Risk Mitigation” in our Compensation Discussion and Analysis below
• Oversight of regulatory compliance with respect to compensation matters
• Oversight of executive succession planning
| | • Overall corporate governance leadership
• Recommendations regarding Board and Committee composition
• Board succession planning
• Oversight of regulatory compliance and corporate governance initiatives
• Oversight of the evaluation of the Board and management
| | • Oversight of asset portfolio and potential acquisitions and divestitures
• Oversight of investment and financing policies and practices
• Review of proposed equity and debt transactions, swaps and hedging transactions
• Overall oversight of finance requirements, plans and strategies
| | Management
| | Responsibilities
• Identify material risks
• Implement appropriate risk management strategies
• Integrate risk management into our decision-making process
• Ensure that information with respect to material risks is transmitted to senior executives and the Board
|
| The Board of Directors and Certain Governance Matters(continued)
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Our Sustainability Initiatives
Our Board believes that sustainable business practices are critical to our long-term success. By integrating environmental, social and governance (“ESG”) initiatives into our strategic business objectives, we seek to drive positive change and create value for our stakeholders.
In 2020, sustainability plays a pivotal role in our corporate priorities. Our overarching priorities are: enhance resident loyalty; develop our leaders; enhance community care; and drive stakeholder engagement and return. Specifically, we look to continue developing our leadership team to better lead and inspire a diverse workforce, identify and launch a pilot of a signature community giving and volunteerism program, and build out our ESG strategy to embrace more robust efforts around environmental and social categories.
Corporate social responsibility is vitally important to who we are as a company. Our Corporate Social Responsibility Policy is posted on our website www.invitationhomes.com under “About Us”—“Corporate Citizenship”—“Corporate Social Responsibility Policy” and applies to all activities undertaken by or on behalf of Invitation Homes anywhere we operate. This policy encompasses areas of community and associate engagement, human rights, corporate governance and ethics, and environmental initiatives that reflect existing and emerging standards of corporate social responsibility. Additionally, each of our associates’ compensation is tied to the quality of our resident service, as measured by Net Promoter Score (more fully described below under “Executive Compensation—Compensation Discussion and Analysis”).
Our mission, vision, and values define our daily actions in delivering on our pledge to be a responsible corporate citizen. Our mission statement “Together with you, we make a house a home” reflects our commitment to a resident-centric business philosophy. The way we carry out that mission on a daily basis is reflected in our company’s core values: Unshakable Integrity; Genuine Care; Continuous Excellence; and Standout Citizenship. Our vision is to be the premier choice in home leasing by continuously enhancing our residents’ living experiences and communities.
| The Board of Directors and Certain Governance Matters(continued)
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Every day, we strive to benefit our residents, our associates, our communities, and our shareholders by deeply embedding our values, ethics, and integrity into all that we do. Our logo represents four components: home; neighborhood; community; and Invitation Homes.
Residents
By offering quality homes in attractive neighborhoods, we believe we give residents the choice to lease a home in a community that may not have otherwise been attainable. We strive to provide our residents with a worry-free leasing lifestyle through service that includes welcoming them with anin-person home orientation atmove-in, making their lives easier with our Smart Home technology offering, and providing 24/7 maintenance combined with ourbest-in-class ProCare property management platform.
Associates
Our associates are our most precious resource. From our focus on health and safety to our support for a diverse and inclusive culture, we treat each other fairly and act with honesty, integrity, and respect.
We believe passionately that diverse and inclusive companies make for more innovative, engaged and happy teams. Our organization makes it a priority to celebrate diversity and cultivate a culture of inclusion. In 2019, a grassroots effort in our Dallas headquarters, with the full support of management, led to the creation of a networking and resource group for women. This group held two events in 2019 that were attended by nearly every associate in our Dallas office. Invitation Homes is an equal opportunity workplace dedicated to pursuing and hiring a diverse workforce. In addition, we monitor a variety of diversity demographics and use that data to inform our actions. We are proud that women comprise a meaningful percentage of our executives and senior-level professionals (as of the Record Date):
| | | 30% of Executive Committee
| | 47% of Senior Level Professionals
|  | |  |
Management establishes and reinforces our Company culture. We recognize the value of our associates and the need for the Company to build and sustain a culture where associates of diverse backgrounds and abilities contribute their unique viewpoints and perspectives to all aspects of the business. In 2019, we conducted our first annual associate engagement survey and formed teams to address underlying issues that surfaced in the results. In early 2020, we rolled out two new benefits programs—flexible work arrangements and parental leave—as a direct result of the survey.
Our company’s workplace wellness initiatives, such as onsite health and wellness services, promote healthy habits and demonstrate managerial support for associates’ physical and emotional well-being. Invitation Homes is committed to associate health and welfare by providing a competitive benefits package, including health, dental, vision, term life and disability insurance. In addition, we put the safety of our associates at the forefront of everything we do and as such have established a national safety committee that provides direction, resources and monthly awareness and education initiatives to associates.
| The Board of Directors and Certain Governance Matters(continued)
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Communities
We recognize that the vitality of our business is directly linked to the vitality of the communities in which we operate. As of December 31, 2019, we and our predecessors have invested approximately $2.3 billion in the upfront renovation of homes in our portfolio. We invested approximately $38,000 per home for upfront renovations completed during the year ended December 31, 2019. Further, we maintain our homes to high standards through timely maintenance services as well as through our proprietary ProCare service. ProCare is an innovative maintenance program designed to provide regular opportunities for us to inspect our assets, proactively address issues, and ensure each home continues to meet our standards. We believe that these investments benefit our communities by creating jobs, enhancing neighborhood appearance and livability, and improving the overall quality of life for our residents and their neighbors. In addition, we believe such investments improve our relationships with local communities and homeowners associations and enhance our brand recognition and loyalty.
Our commitment to community includes efforts that make us more innovative and sustainable. Protecting the environment is critically important to us, and our sustainability initiatives help limit the carbon footprints and overall environmental impact of our homes. Those initiatives include: Smart Home technology that enables maintenance technicians and residents to control thermostats remotely and reduce energy consumption; routing and optimization technology designed to improve scheduling efficiencies for our maintenance technicians, which may also result in a reduced vehicle emissions footprint; standards of performance that require the use of energy-efficient lighting and appliances; and supply chain management that focuses on our vendors’ sustainability practices and procedures. We believe that we can respond to local and global environmental challenges by combining our strengths in sustainability, innovation, and partnership.
We also encourage our associates to be good neighbors in their local communities by partnering with local organizations to provide support to those in need. In addition, each year Invitation Homes associates receive 20 hours of paid time off to volunteer in their communities and help their local neighbors. Together, associates in our corporate offices and our 16 markets used this time in 2019 to deliver food to veterans and elderly citizens, contribute and package food and school supplies, collect and deliver toys, clean beaches, and provide other needed support in their communities. We also offer an annual “There’s No Place Like Home” scholarship contest, awarding scholarships for higher learning to residents, associates, and community members.
Corporate Governance and Ethics
We take very seriously the responsibility that individuals and organizations have chosen to invest in our company, and we strive every day to ensure that our actions result in value for these investors. We believe that good governance promotes the long-term interests of our stockholders, strengthens Board and management accountability and improves our standing as a trusted member of the communities we serve. Our commitment to good corporate governance is reflected in our Corporate Governance Guidelines, which describe the views and policies of our Board. See “The Board of Directors and Certain Governance Matters—Our Corporate Governance” for more information about our corporate governance practices.
We believe it is critically important to maintain a corporate culture that demands integrity and reflects ethical values. Everyone who works at or with Invitation Homes should feel confident about our high ethical standards, our honesty, and our integrity. Our daily decisions are driven by our Code of Conduct, which is posted on our website and demonstrates our commitment to our stakeholders to be a responsible corporate citizen and a good business partner. The Code of Conduct helps guide us as we collaborate to accomplish our goals together, while holding ourselves individually responsible for our work and accountable for our actions. See “The Board of Directors and Certain Governance Matters—Code of Business Conduct and Ethics” for more information about our Code of Conduct. The code is supported by associate conduct policies and programs and reinforced through associate training. We have zero tolerance in relation to illegal or unethical conduct and this is articulated in our relevant policies, including policies on conflicts of interest, gifts and entertainment, fraud, sanctions, outside activities, political contributions, and bribery and corruption. Any associate who violates the requirements of the Code, or any of our other policies, is subject to disciplinary action up to and including termination.
We expect the same high standards of those who work with us and represent us, and our Vendor Code of Conduct is an extension of our values to our vendors and serves to highlight our commitment to ethical business practices and regulatory compliance. The Vendor Code of Conduct is posted on our website www.invitationhomes.com under “About Us”—“Corporate Citizenship.”
| The Board of Directors and Certain Governance Matters(continued)
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Director Nomination Process
The Nominating and Corporate Governance Committee is responsible for recommending to the Board nominees for election as director, and the Board is responsible for selecting nominees for election. This nomination process occurs as part of the nomination of the slate of directors for election at our annual meeting of stockholders and at times when there is a vacancy on the Board or other need to add a director to the Board.
As part of this nomination process, the Nominating and Corporate Governance Committee weighs the characteristics, experience, independence and skills of potential candidates for election to the Board and, in considering such candidates, also assesses the size, composition and combined expertise of the Board and the extent to which the candidate would fill a present need on the Board. As the application of these factors involves the exercise of judgment, the Nominating and Corporate Governance Committee does not have a standard set of fixed qualifications that is applicable to all director candidates, but rather takes into account all factors it considers appropriate such as the individual’s relevant career experience, strength of character, judgment, familiarity with the Company’s business and industry, independence of thought, an ability to work collegially, diversity of background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations, corporate governance background, financial and accounting background, executive compensation background, relevant industry experience and technical skills and the size, composition and combined expertise of the existing Board. Although in identifying prospective director candidates, our Nominating and Corporate Governance Committee and the Board consider diversity of viewpoints, background and experiences, the Board does not have a formal diversity policy.
The Nominating and Corporate Governance Committee may seek referrals and/or receive recommendations from other members of the Board, management, stockholders and other sources, including third party recommendations. The Nominating and Corporate Governance Committee may also retain a search firm to assist it in identifying candidates to serve as directors of the Company. The Nominating and Corporate Governance Committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. When considering director candidates, the Nominating and Corporate Governance Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance the Board’s effectiveness.
In connection with its annual recommendation of a slate of nominees for election at the annual meeting, the Nominating and Corporate Governance Committee also may assess the contributions of those directors recommended forre-election in the context of the Board evaluation process and other perceived needs of the Board. When considering whether the directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on the information discussed in each of the board member’s biographical information set forth above.
During 2019, the Nominating and Corporate Governance Committee engaged a search firm to provide and to help vet candidates for our Board, as well as to develop an ongoing list of potential candidates who have desired experience and expertise and meet the qualification guidelines described above.
In connection with its recommendation of a slate of nominees for election at the Annual Meeting, our Nominating and Corporate Governance Committee and the Board also considered that Mr. Bronson reached the age of 75 in 2020 and determined that, because of Mr. Bronson’s expertise, valuable business insights and strong commitment to Invitation Homes, an exception to our general practice to not recommend for reelection a director following his or her 75th birthday is warranted. Furthermore, the Board, upon recommendation of the Nominating and Corporate Governance Committee, has nominated two new candidates, Mr. Joseph D. Margolis and Ms. J. Heidi Roizen, to further enhance the diversity of backgrounds and expertise in the boardroom.
| The Board of Directors and Certain Governance Matters(continued)
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The process undertaken by the Nominating and Corporate Governance Committee resulted in the Board’s nomination of the directors named in this Proxy Statement and proposed for election by you at the Annual Meeting. We believe that our director nominees provide an appropriate mix of expertise, experience and skills relevant to the size and nature of our business.
The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Corporate Secretary, Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201. All recommendations for nomination received by the Corporate Secretary that satisfy our bylaw requirements relating to such director nominations will be presented to the Nominating and Corporate Governance Committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These requirements are also described under the caption “Stockholder Proposals for the 2020 Annual Meeting.”
Communications with the Board
As described in the Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with the Chairperson of the Board, the chairperson of any of the Audit Compensation, or Nominating and Corporate Governance Committees or to thenon-management or independent directors as a group, may do so by addressing such communications or concerns to Office of the Chief Legal Officer of the Company, at Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201, who will forward such communications to the appropriate party. Such communications may be done confidentially or anonymously.
COMPENSATION OF DIRECTORS
Ournon-employee directors receive cash compensation, as well as equity compensation in the form of restricted stock units (“RSUs”), for their Board service. No director employed by us or appointed pursuant to the terms of our previous Stockholders Agreement with Blackstone received compensation for serving on our Board in 2019. Accordingly, in 2019, none of Messrs. Tanner, Caplan, Harper, or Stein received compensation for serving on our Board. Mr. Stein will receive compensation for Board service following his election at the Annual Meeting due to the termination of the Stockholders Agreement.
2019 Annual Director Compensation Program
In 2017, in connection with our IPO, we adopted an annual director compensation program, which was reviewed and adjusted by the Board in May 2019. Effective as of May 30, 2019, eligiblenon-employee directors were entitled to receive annual compensation as follows:
an annual cash retainer of $70,000 (an increase from $60,000), and $350,000 in the case of the Board Chairperson (as more fully described below, effective January 1, 2020, the Board reduced the Chairperson’s annual cash retainer to $220,000);
an additional cash retainer of $20,000 for those serving as chairpersons of the Audit Committee Compensation Committee, Nominating and Corporate Governance Committee and Investment and Finance Committee; and
an equity award of $145,000 (an increase from $120,000), and $350,000 in the case of the Board Chairperson (as more fully described below, effective January 1, 2020, the Board reduced the Chairperson’s equity award to $145,000), in the form of time vesting RSUs, granted on the date of the annual stockholders meeting, which will vest in full on the date of our next annual meeting of stockholders following the grant date, subject to the director’s continued service on such vesting date, and will be in respect of a number of shares equal to the award amount divided by the closing price of our common stock on the NYSE on the grant date.
| Compensation of Directors(continued)
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All RSUs granted to directors entitle the director to dividend equivalent payments in respect of the director’s RSUs, whether his or her RSUs are unvested or vested and not yet settled. The dividend equivalents are deliverable to the director on the regular payment date that such dividends are made to the Company’s stockholders and in the same form as delivered to such stockholders whether in cash or common stock. To date, all dividends declared on the Company’s common stock were paid in cash.
In addition to the foregoing, in 2019, Mr. Blair received an annual stipend in an amount of $40,000 in connection with the cost of his administrative support services. Our directors do not otherwise receive any other Company-paid or reimbursed personal benefits. In addition, our directors are not paid any fees for attending meetings, however, each director is reimbursed for reasonable travel and related expenses associated with his or her attendance at Board or committee meetings.
In response to engagement with and feedback from our investors and to bring annual compensation of thenon-executive Board Chairperson in line with the compensation of othernon-employee directors, as part of its director compensation review, the Board has adjusted Mr. Blair’s compensation, effective January 1, 2020:
a reduction of annual cash retainer to $220,000;
a reduction of an equity award to $145,000 in the form of RSUs; and
a cancellation of the annual administrative assistant stipend.
Our Compensation Committee is responsible for reviewing and advising on the compensation of ournon-employee directors. To assist with this duty, they have engaged an independent compensation consultant, FPL Associates, L.P. (“FPL”), to perform periodic reviews of ournon-employee director compensation program, which includes an analysis of market trends and best practices and a comparison versus our peer group companies. The compensation program for ournon-employee directors was last reviewed and revised, as described above, in February 2020, upon recommendation of the Compensation Committee in consultation with FPL.
Ournon-employee directors who are entitled to receive compensation for their service on the Board are also subject to a stock ownership policy, as described below under “Executive Compensation—Compensation Discussion and Analysis.”
Director Compensation Table for Fiscal 2019
The table below sets forth information regardingnon-employee director compensation for the fiscal year ended December 31, 2019.
| | | | | | | | | | | | | | | | | | | | | | Name | | Fees Earned or Paid in Cash ($)(1) | | Stock Awards ($)(2)(3) | | All Other Compensation ($)(4) | | Total ($) | | | | | | | Bryce Blair | | | $350,000 | | | | $350,008 | | | | $40,000 | | | | $740,008 | | | | | | | Jana Cohen Barbe | | | $ 65,836 | | | | $145,021 | | | | — | | | | $210,857 | | | | | | | Richard D. Bronson | | | $ 65,836 | | | | $145,021 | | | | — | | | | $210,857 | | | | | | | Kenneth A. Caplan | | | — | | | | — | | | | — | | | | — | | | | | | | Michael D. Fascitelli | | | $ 85,836 | | | | $145,021 | | | | — | | | | $230,857 | | | | | | | Robert G. Harper | | | — | | | | — | | | | — | | | | — | | | | | | | Jeffrey E. Kelter | | | $ 65,836 | | | | $145,021 | | | | — | | | | $210,857 | | | | | | | John B. Rhea | | | $ 85,836 | | | | $145,021 | | | | — | | | | $230,857 | | | | | | | Janice L. Sears | | | $ 85,836 | | | | $145,021 | | | | — | | | | $230,857 | | | | | | | William J. Stein | | | — | | | | — | | | | — | | | | — | | | | | | | Barry S. Sternlicht | | | $ 65,836 | | | | $145,021 | | | | — | | | | $210,857 | |
(1) | Amount represents the cash fees earned by each director during 2019 pursuant to our director compensation program then in effect.
|
| Compensation of Directors(continued)
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(2) | Amount represents the aggregate grant date fair value of the directors’ annual RSU awards granted in 2019 calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, using the assumptions discussed in Note 10 to the consolidated financial statements included in our 2019 Form10-K. In accordance with the SEC’s rules, dividend equivalents that accrued on equity awards in 2019 are not reported above, because dividends were factored into the grant date fair value of these awards.
|
(3) | As of December 31, 2019, the directors held unvested equity as follows (representing each director’s unvested annual RSU award):
|
| | | | | | | Director
| | RSUs
| | | | Bryce Blair
| | | 13,769 | | | | Jana Cohen Barbe
| | | 5,705 | | | | Richard D. Bronson
| | | 5,705 | | | | Michael D. Fascitelli
| | | 5,705 | | | | Jeffrey E. Kelter
| | | 5,705 | | | | John B. Rhea
| | | 5,705 | | | | Janice L. Sears
| | | 5,705 | | | | Barry S. Sternlicht
| | | 5,705 | |
(4) | The amount reported for Mr. Blair represents the Company-reimbursed costs for Mr. Blair’s administrative support services in 2019.
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PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has selected Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for 2020. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Deloitte to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders do not ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company.
Representatives of Deloitte are expected to be present at the Annual Meeting. They will also have the opportunity to make a statement if they desire to do so, and they are expected to be available to respond to appropriate questions.
Audit andNon-Audit Fees
In connection with the audit of our 2019 consolidated financial statements, we entered into an agreement with Deloitte, which sets forth the terms by which Deloitte performed audit services for the Company. The following table presents fees for professional services rendered by Deloitte for the audit of our financial statements for 2019 and 2018, and for fees billed for other services rendered by Deloitte during those periods.
| | | | | | | | | | | | ($ in thousands) | | 2019 | | | 2018 | | | | | Audit fees(1) | | | $1,644 | | | | $1,973 | | | | | Audit-related fees(2) | | | 329 | | | | 246 | | | | | Tax fees(3) | | | 357 | | | | 471 | | | | | | | | | | | | | | Total | | | $2,330 | | | | $2,690 | | | | | | | | | | | |
(1) | Includes the aggregate audit fees recognized in each of the last two fiscal years for professional services rendered for the audits of the Company’s annual consolidated financial statements and the reviews of quarterly condensed consolidated financial statements.
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(2) | Includes audit-related fees recognized in 2019 for professional services rendered in connection with (1) the audits of our 401(k) plan and a joint venture for which we are the managing member and (2) review of information included in other documents filed or to be filed with the SEC related to equity offerings and issuances (e.g., registration statements and prospectus information relating to secondary offerings of our common stock and ourat-the-market equity offering program as well as fees related to ongoing maintenance of such equity offering programs). Includes audit-related fees recognized in 2018 for professional services rendered in connection with the audit of our 401(k) plan and the review of information included in other documents filed or to be filed with the SEC, including the registration statements relating to the Merger.
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(3) | Includes the aggregate tax fees recognized in each of the last two fiscal years for professional services rendered for tax compliance, tax advice, and tax planning.
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All of the services covered under the captions “Audit fees,” “Audit-related fees,” and “Tax fees” werepre-approved by the Audit Committee. The Audit Committee considered whether providing thenon-audit services shown in this table was compatible with maintaining Deloitte’s independence and concluded that it was.
Pre-Approval Policy for Services of Independent Registered Public Accounting Firm
Consistent with SEC policies regarding auditor independence and the Audit Committee’s charter, the Audit Committee has responsibility for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. In exercising this responsibility, the Audit Committee has established procedures relating to its approval of all audit andnon-audit services that are to be performed by our independent registered public accounting firm and, except where services may bepre-approved under authority delegated by the Audit Committee, the Audit Committeepre-approves all audit and permittednon-audit services provided by any independent registered public
| Proposal No. 2—Ratification of Independent Registered Public Accounting Firm(continued)
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accounting firm prior to each engagement. The Audit Committee has delegated to its Chairperson the authority to review andpre-approve any such services between the Audit Committee’s regular meetings, and any suchpre-approval will be subsequently considered and ratified by the Audit Committee at its next regularly scheduled meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
RATIFICATION OF DELOITTE & TOUCHE LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR 2020.
PROPOSAL NO.3—NON-BINDING VOTE TO APPROVE EXECUTIVE COMPENSATION
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to stockholder vote to approve, ina non-binding advisory vote, the compensation paid to our named executive officers as disclosed in this Proxy Statement. While the results of the voteare non-binding and advisory in nature, the Compensation Committee and the Board intend to carefully consider the results of this vote.
The text of the resolution in respect of Proposal No. 3 is as follows:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and any related narrative discussion, is hereby APPROVED.”
In considering their vote, stockholders may wish to review with care the information on our compensation policies and decisions regarding the named executive officers presented in “Compensation Discussion and Analysis,” as well as the discussion regarding the Compensation Committee in “The Board of Directors and Certain Governance Matters—Committees of the Board of Directors; Meetings of the Board of Directors and its Committees—Compensation and Management Development Committee.”
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE
APPROVAL OF THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee operates pursuant to a charter which is reviewed annually by the Audit Committee. Additionally, a brief description of the primary responsibilities of the Audit Committee is included in this Proxy Statement under the discussion of “The Board of Directors and Certain Governance Matters—Committees of the Board of Directors; Meetings of the Board of Directors and its Committees—Audit Committee.” Under the Audit Committee charter, our management is responsible for the preparation, presentation and integrity of our consolidated financial statements, the application of accounting and financial reporting principles and our internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm is responsible for auditing our consolidated financial statements and expressing an opinion as to their conformity with accounting principles generally accepted in the United States.U.S. In the performance of its oversight function, the Audit Committee reviewed and discussed the audited consolidated financial statements of the Company with management and with the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed under applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and the SEC. In addition, the Audit Committee received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence, and discussed with the independent registered public accounting firm their independence. Based upon the review and discussions described in the preceding paragraph, the Audit Committee recommended to the Board that the audited consolidated financial statements of the Company be included in its Annual Report onForm 10-K for the fiscal year ended December 31, 2019,2022, filed with the SEC. Submitted by the Audit Committee of the Board of Directors: Janice L. Sears, Chairperson Jana Cohen Barbe Richard D. Bronson
John B. RheaJ. Heidi Roizen
| | | | | 2020 Proxy Statement | | 34 | | | | |
| | 21 |
| The Board of Directors and Certain Governance Matters (continued) |
REPORT OF THE COMPENSATION AND MANAGEMENT DEVELOPMENT COMMITTEECompensation and Management Development Committee
| | | | | Chair: Mr. Rhea Additional Committee Members: Ms. Barbe Mr. Bronson Mr. Margolis Ms. Sears
• All members are “independent” in accordance with our Compensation and Management Development Committee charter and the applicable NYSE and Exchange Act rules • Governed by a Board-approved charter | | Primary Responsibilities: • Establishing and reviewing the Company’s overall compensation philosophy; • Overseeing the goals, objectives and compensation of our CEO, including evaluating the performance of the CEO in light of those goals; • Reviewing and determining the salaries, performance-based incentives, and other matters related to the compensation of our other executive officers; • Making recommendations to the Board regarding director compensation; • Approving our incentive and equity compensation plans and setting the terms of and making awards thereunder; • Assisting the Board in review and consideration of succession plans for our officers, and establishing and evaluating plans and programs for management development; • Assisting with our compliance with the compensation rules, regulations and guidelines promulgated by the NYSE, the SEC and other laws, as applicable; • Considering whether risks arising from the Company’s compensation policies and practices are reasonably likely to have a material adverse effect on the Company; and • Reviewing the Company’s stock ownership guidelines, as well as individual compliance. For a description of our process for determining compensation, including the role of the Compensation and Management Development Committee’s independent compensation consultant, see “Executive Compensation—Compensation Discussion and Analysis.” The Compensation and Management Development Committee charter is available on our investor website at: www.invh.com under “Corporate Overview”—“Governance Documents”—“Compensation and Management Development Committee Charter.” | | Compensation Committee Interlocks and Insider Participation. During 2022, our Compensation and Management Development Committee was composed of Mr. Rhea, Ms. Barbe, Mr. Bronson, Mr. Margolis and Ms. Sears. During 2022 and as of the date of this Proxy Statement, none of our executive officers served as a director or member of the compensation committee (or other committee serving an equivalent function) of any other entity whose executive officers served on our Compensation and Management Development Committee or Board. |
Report of the Compensation and Management Development Committee The Compensation and Management Development Committee has reviewed and discussed the following Compensation Discussion and Analysis with management. Based upon this review and discussion, the Compensation and Management Development Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2019,2022, filed with the SEC. Submitted by the Compensation and Management Development Committee of the Board of Directors: John B. Rhea, Chairperson Jana Cohen Barbe MichaelRichard D. FascitelliBronson
Jeffrey E. KelterJoseph D. Margolis
William J. SteinJanice L. Sears
| | | | | | | | 35 | | 22 | | 20202023 Proxy Statement | | |
| The Board of Directors and Certain Governance Matters (continued) |
Nominating and Corporate Governance Committee | | | | | Chair: Mr. Bronson Additional Committee Members: Mr. Kelter Ms. Roizen
• All members are “independent” in accordance with our Nominating and Corporate Governance Committee charter and the applicable NYSE rules • Governed by a Board-approved charter | | Primary Responsibilities: • Developing a set of governance principles applicable to the Company and overseeing the Company’s governance policies; • Identifying, reviewing, assessing and making recommendations to the Board as to candidates to serve on the Board and its committees; • Considering matters related to director independence and conflicts of interest; • Reviewing compliance with the requirements of the Corporate Governance Guidelines relating to service on other boards or audit committees of publicly-traded companies; • Recommending those to serve as committee chairpersons; • Overseeing the annual evaluation of the Board and management; and • Providing oversight with respect to the Company’s environmental, social and related governance (“ESG”) strategy, initiatives and policies, and ESG risks. The Nominating and Corporate Governance Committee charter is available on our investor website at: www.invh.com under “Corporate Overview”—“Governance Documents”—“Nominating and Corporate Governance Committee Charter.” |
Investment and Finance Committee | | | | | Chair: Mr. Kelter Additional Committee Members: Mr. Margolis Mr. Rhea Mr. Tanner
• Governed by a Board-approved charter | | Primary Responsibilities: • Overseeing matters related to the Company’s investments in real estate and other assets proposed by management; • Overseeing the performance of the Company’s assets; • Reviewing the financial and operational performance of investments and joint ventures; • Reviewing the Company’s investment and disposition policies, procedures, strategies and programs; and • Reviewing the Company’s capital raising and other financing activities. The Investment and Finance Committee charter is available on our investor website at: www.invh.com under “Corporate Overview”—“Governance Documents”—“Investment and Finance Committee Charter.” |
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| The Board of Directors and Certain Governance Matters (continued) |
Director Nomination Process The Nominating and Corporate Governance Committee is responsible for recommending to the Board nominees for election as director, and the Board is responsible for selecting nominees for election. This nomination process occurs as part of the nomination of the slate of directors for election at our annual meeting of stockholders and at times when there is a vacancy on the Board or other need to add a director to the Board. | | | | | | | Current Board Skill Sets and Needs Ensure Board is strong in core competencies and has diversity of expertise, perspective and background. | | | | | | As part of this nomination process, the Nominating and Corporate Governance Committee weighs the characteristics, experience, independence, diversity and skills of potential candidates for election to the Board and, in considering such candidates, also assesses the size, composition and combined expertise of the Board and the extent to which the candidate would fill a present need on the Board. As the application of these factors involves the exercise of judgment, the Committee does not have a standard set of fixed qualifications that is applicable to all director candidates, but rather takes into account all factors it considers appropriate such as the individual’s relevant career experience, strength of character, judgment, familiarity with the Company’s business and industry, independence of thought, an ability to work collegially, diversity of background, existing commitments to other businesses, potential conflicts of interest with other pursuits, legal considerations, corporate governance background, financial and accounting background, executive compensation background, relevant industry experience and technical skills and the size, composition and combined expertise of the existing Board. The Nominating and Corporate Governance Committee may seek referrals and/or receive recommendations from other members of the Board, management, stockholders and other sources, including third party recommendations. The Committee may also retain a search firm to assist it in identifying candidates to serve as directors of the Company. The Committee uses the same criteria for evaluating candidates regardless of the source of the referral or recommendation. When considering director candidates, the Committee seeks individuals with backgrounds and qualities that, when combined with those of our incumbent directors, provide a blend of skills and experience to further enhance the Board’s effectiveness. In connection with its annual recommendation of a slate of nominees for election at the annual meeting, the Nominating and Corporate Governance Committee also may assess the contributions of those directors recommended for re-election in the context of the Board evaluation process and other perceived needs of the Board. When considering whether the directors and nominees have the experience, qualifications, attributes and skills, taken as a whole, to enable the Board to satisfy its oversight responsibilities effectively in light of our business and structure, the Board focused primarily on the information discussed in each of the director nominees’ biographical information set forth above. As a general matter, the Nominating and Corporate Governance Committee does not intend to recommend for reelection a director following his or her 75th birthday to ensure that vacancies are created periodically on the Board that allow for new directors with new skills and perspectives. The Committee may grant exceptions to this limit on a case-by-case basis after taking into consideration the facts and circumstances of the request. In connection with its recommendation of a slate of nominees for election at the Annual Meeting, the Committee and the Board considered that Mr. Bronson reached the age of 78 in 2023 and determined that, because of Mr. Bronson’s expertise, valuable business insights and strong commitment to Invitation Homes, an exception to our general practice to not recommend for reelection a director following his or her 75th birthday is warranted. Furthermore, the Board, upon recommendation of the Nominating and Corporate Governance Committee, has nominated two new candidates, Ms. Frances Aldrich Sevilla-Sacasa and Mr. Keith D. Taylor, to further enhance the diversity of backgrounds and expertise in the boardroom. | q | | | | | Candidate Recommendations From independent search firms, stockholders, independent directors, and management. | | | | | q | | | | | Nominating and Corporate Governance Committee Considers exceptional candidates that possess integrity, independent judgement, broad business experience, diversity and a skill set to meet existing or future business needs. The Committee reviews independence and potential conflicts and recommends selected candidates to the Board. | | | | | q | | | | | Board of Directors Evaluates candidates, analyzes independence and other issues, and selects nominees with a commitment to refreshment and diversity. | | | | | q | | | | | Stockholders Vote on all director nominees at annual meeting. | | | | | q | | | | | Two New Directors Nominated for election in 2023, bringing further diversity and fresh perspectives to the Board. | | | | |
| The Board of Directors and Certain Governance Matters (continued) |
Stockholder Nominees The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. Any recommendation submitted to the Secretary of the Company should be in writing and should include any supporting material the stockholder considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our directors if elected. Stockholders wishing to propose a candidate for consideration may do so by submitting the above information to the attention of the Corporate Secretary, Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201. All recommendations for nomination received by the Corporate Secretary that satisfy our Bylaw requirements relating to such director nominations will be presented to the Committee for its consideration. Stockholders also must satisfy the notification, timeliness, consent and information requirements set forth in our Bylaws. These requirements are also described under the caption “Stockholder Proposals for the 2023 Annual Meeting.” Our stockholders also possess the right to nominate candidates to the Board through proxy access provisions of our Bylaws. The Bylaws permit a stockholder, or group of up to 20 stockholders, owning 3% or more of the Company’s outstanding common shares continuously for at least three years, to include in the Company’s annual meeting proxy materials director nominations for up to 20% of the seats on the Board, subject to the other terms and conditions of the Bylaws. Stockholder requests to include stockholder-nominated directors in proxy materials for the 2024 annual meeting must be received by no earlier than November 7, 2023, and no later than December 7, 2023. Director Succession Planning and Board and Committee Refreshment The Nominating and Corporate Governance Committee regularly oversees and plans for director succession and refreshment of the Board to cultivate a mix of skills, experience, tenure, and diversity that promote and support the Company’s long-term strategy. In keeping with the Committee’s overall strategy for director succession and the appointment of new Board members, the Board has nominated two new independent directors for election at the Annual Meeting. The Board, upon recommendation from the Nominating and Corporate Governance Committee, annually reviews and determines the composition of the committees. Through periodic committee refreshment, we balance the benefits derived from continuity and depth of experience with the benefits gained from fresh perspectives and enhancing our directors’ understanding of different aspects of our business. As part of our ongoing commitment to proactive Committee refreshment, following the Annual Meeting, the Board will vote to elect the following members to the standing committees (assuming all director nominees are elected). Neither Ms. Sevilla-Sacasa nor Mr. Taylor currently serve on the Board or on any committees of the Board. Committee Composition Following the Annual Meeting | | | | | | | | | | | | | | Director | | Audit Committee | | Compensation and
Management
Development
Committee | | Nominating and
Corporate Governance
Committee | | Investment and
Finance Committee | | | | | | Michael D. Fascitelli(1) | | | | | | | | | | | | | | Dallas B. Tanner | | | | | | | | Member | | | | | | Jana Cohen Barbe | | Member | | | | Member | | | | | | | | Richard D. Bronson | | | | Member | | Chairperson | | | | | | | | Jeffrey E. Kelter | | | | | | Member | | Chairperson | | | | | | Joseph D. Margolis | | | | Member | | | | Member | | | | | | John B. Rhea | | | | Member | | | | Member | | | | | | Janice L. Sears | | Member | | Member | | | | | | | | | | Frances Aldrich Sevilla-Sacasa | | Chairperson | | | | Member | | | | | | | | Keith D. Taylor | | Member | | Chairperson | | | | |
| (1) | Chairperson of the Board. |
| | | | | | | | | |
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| The Board of Directors and Certain Governance Matters (continued) |
Limitation on Other Board and Audit Committee Service Serving on the Board requires significant time and attention. Our Corporate Governance Guidelines establish the following limits on our directors serving on publicly-traded company boards and audit committees: | | | | | Director Category | | Limit on Public Company Board
and Committee Service,
Including Invitation Homes | | | All Directors | | 4 boards | | | Directors who are chief executives of a publicly-traded company | | 2 boards | | | Directors who serve on our Audit Committee | | 3 audit committees |
The Corporate Governance Guidelines provide that prior to accepting an invitation to serve on another board (publicly-traded or private company’s), a director should advise the Chair of the Nominating and Corporate Governance Committee of the invitation so that the Board, through the Committee, has the opportunity to review the director’s ability to continue to fulfill his or her responsibilities as a member of the Company’s Board. When reviewing such a request, the Committee may consider a number of factors, including the director’s other time commitments, record of attendance at Board and committee meetings, potential conflicts of interest and other legal considerations. It is also expected that, without specific approval from our Board or the Nominating and Corporate Governance Committee, no executive officer of the Company will serve on more than one outside publicly-traded company board, and no more than two outside boards in total (excluding advisory and nonprofit boards). Executive Sessions Executive sessions, which are meetings of the non-management members of the Board, generally take place at every regular Board meeting. In addition, at least once a year, the independent directors meet in a private session that excludes management and directors who have not been determined independent. At each of these meetings, the non-management and independent directors in attendance, as applicable, will determine which member will preside at such session. Management Development and Succession Planning Our Board believes that one of its primary responsibilities is to oversee the development and retention of executive talent and to ensure that an appropriate succession plan is in place for our CEO and other members of senior management. The Compensation and Management Development Committee regularly meets with our CEO and Executive Vice President, Chief Human Resources Officer and other executives to discuss management succession and development planning and to address potential vacancies in senior leadership. The Compensation and Management Development Committee also annually reviews with the Board succession planning for our CEO. Corporate Governance Guidelines We are committed to exercising strong corporate governance practices. Good governance promotes the long-term interests of our stockholders, strengthens Board and management accountability and improves our standing as a trusted member of the communities we serve. Our governance structure and processes are guided by key governance documents, including our Corporate Governance Guidelines and committee charters, which govern the operation of the Board and its committees in the execution of their responsibilities. Our Corporate Governance Guidelines are reviewed periodically by our Nominating and Corporate Governance Committee and, to the extent deemed appropriate in light of emerging practices, changing regulatory requirements and issues raised by our stockholders, revised accordingly upon recommendation to and approval by our Board. Our Corporate Governance Guidelines, committee charters, and other corporate governance information are available on our investor website at: www.invh.com under “Corporate Overview”—“Governance Documents.” Any stockholder may also request them in print, without charge, by contacting the Corporate Secretary of Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201.
| The Board of Directors and Certain Governance Matters (continued) |
Code of Business Conduct and Ethics We maintain a Code of Business Conduct and Ethics (the “Code of Conduct”) that is applicable to all of our directors, officers and associates, including our principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions. Our Code of Conduct is posted on our investor website at: www.invh.com under “Corporate Overview”—“Governance Documents.” Our Code of Conduct sets forth our policies and expectations on a number of topics, including, but not limited to, conflicts of interest, compliance with laws, use of our assets, gifts and entertainment, fraud, outside activities, political contributions, bribery, corruption, and business conduct and fair dealing. Our Code of Conduct is a “code of ethics,” as defined by Item 406 of Regulation S-K of the Exchange Act promulgated by the SEC. We intend to make any legally required disclosures regarding amendments to, or waivers of, provisions of our Code of Conduct on our website rather than by filing a Current Report on Form 8-K and within the time period required under applicable rules and regulations. Communications with the Board As described in the Corporate Governance Guidelines, stockholders and other interested parties who wish to communicate with the Chairperson of the Board, the chairperson of any of the Audit, Compensation and Management Development, or Nominating and Corporate Governance Committees or to the non-management or independent directors as a group, may do so by addressing such communications or concerns to Office of the Chief Legal Officer of the Company, at Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201, who will forward such communications to the appropriate party. Such communications may be done confidentially or anonymously. Oversight of Risk Management We face various forms of risk in our business ranging from risks inherent to the single-family rental industry and our business model, such as competition in identifying and acquiring properties, competition in the leasing market for quality residents, increasing property taxes, homeowners’ association fees, and insurance costs, poor resident selection and defaults and non-renewals by our residents, among others, to macroeconomic factors beyond our control, including risks related to the potential negative impact of unfavorable global and U.S. economic conditions (including inflation and interest rates), uncertainty in financial markets, geopolitical tensions, natural disasters, climate change, and public health crises. For additional information about the risks to our business and results of operations, see Part I. Item I. “Business—Risk Management” and Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the “2022 Form 10-K”). Our Board and management believe that effective risk management involves our entire corporate governance framework. Both our Board and management have key responsibilities in managing risk throughout the Company. Our Board provides overall short, intermediate and long term risk oversight, both directly and through its committees, with management responsible for identifying and assessing the major risks our Company faces and developing the policies and procedures for monitoring and controlling such risks. Our Board is responsible for promoting an appropriate culture of risk management within the Company and for setting the right “tone at the top,” overseeing our aggregate risk profile and monitoring how the Company addresses specific risks, such as strategic and competitive risks, financial risks, reputation risks, cybersecurity and technology risks, ESG risks, legal and compliance risks, regulatory risks, and operational risks. The Board is supported in its risk oversight function by its Audit Committee (the committee responsible for overseeing our enterprise risk management activities), Compensation and Management Development Committee, Nominating and Corporate Governance Committee and Investment and Finance Committee. Each of these committees regularly meets with and reports to the Board. Management is responsible for the day-to-day management of risk, including identification and assessment of material risks, implementation of appropriate risk management strategies, based upon the immediacy of the risk assessed, and integration of risk management into our decision-making process. The appropriate committees meet with management to discuss our risks and exposures. Members of the Audit Committee regularly, but not less frequently than semiannually, meet with members of senior management and other key associates who advise the directors on areas of enterprise risk, our top enterprise risks, risk mitigation, response strategies, and any incidents that have arisen. The full Board reviews enterprise risk management program activities annually. Risk Management and Sustainability Our Board, through its Nominating and Corporate Governance Committee, is responsible for oversight of our ESG strategy, initiatives, policies, and risk management, including risks related to environmental issues, including climate-related risks and | | | | | | | | | |
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| The Board of Directors and Certain Governance Matters (continued) |
opportunities and social issues. Sustainability risk areas for our Company include various physical, regulatory, and adaptation/transition risks of climate change and related regulatory policies, investor expectations, and the transition to a lower-carbon economy. Portfolio resilience efforts are a critical component of our enterprise risk management program, which includes business continuity, crisis response, and risk management. The Board is focused on our long-term business strategy, including fostering sustainability-driven innovations, and incorporates our sustainability risks and opportunities into its overall strategic decision-making. Our executive leadership takes a hands-on role in furthering strategy and in ensuring the Company is accurately following and reporting on ESG activities and outcomes. In 2022 we hired professional in-house expertise (Vice President, ESG, and Vice President, Energy) to expand and deepen our approach to ESG matters. Our in-house ESG professionals and a cross-functional task force of associates, led by Vice President, ESG, are responsible for the day-to-day measurement and reporting of our ESG strategy and activities. Our in-house ESG professionals and other members of senior management regularly report to the Nominating and Corporate Governance Committee and the Board on our ESG-related risk areas and initiatives to manage and mitigate these risks and to inform and support the Committee in executing its oversight responsibilities for matters relating to sustainability, corporate social responsibilities and corporate citizenship and as we continue to incorporate related risks and opportunities into the Board’s overall strategic decision-making. Risk Management and Cybersecurity Information technology and data security, particularly cybersecurity, are also areas of focus for our Board and its Audit Committee, as our operations are highly dependent upon information systems that support our business processes. Cyber intrusions could seriously compromise our networks and the information stored therein could be accessed, publicly disclosed, misused, lost or stolen. We employ a multi-layered cybersecurity model that leverages risk-based controls with a focus on protecting our residents’ and associates’ data. We follow a cloud-first approach to enable efficient scaling, robust business continuity, access to the latest innovations, and a reduction in our carbon footprint. Security features and services are regularly enhanced to address both emerging threats and evolving privacy laws. We also partner with industry leading third parties for regular security audits. These audits ensure we are always view cybersecurity with a holistic perspective. In the face of ever-changing and increasing cyber threats, our Board is well-positioned to guide management in the development of an effective cybersecurity risk program for our Company. The Board or its Audit Committee meets no less often than semi-annually with senior information technology personnel to discuss recent trends in cyber risks and reviews our strategy to defend our business systems and information against cyber attacks. We maintain a cybersecurity and information security training and compliance program that includes annual information security training for all associates, as well as additional role-specific information security training. In addition to annual training, we disseminate security awareness articles periodically throughout the year and conduct regular phishing exercises. As a backstop to our strong information security programs, policies and procedures, we purchase a cybersecurity risk insurance policy that would defray the costs of an information security breach, if we were to experience one. We believe that the systems and processes developed by our experienced executive team, with the strategic counsel and stewardship of our Board, allow us to effectively monitor, manage and ultimately mitigate enterprise risks.
| The Board of Directors and Certain Governance Matters (continued) |
The table below shows the Board’s and management’s key responsibilities in managing and overseeing risk throughout the Company. Risk Oversight Responsibilities | | | | | | | | | | | | | | Board • Oversees development of business strategy and major resource allocation, and overall oversight of business conduct. • Provides overall oversight of the risk management process, exercised through its standing committees. • On a semi-annual basis, management reports to the Board on top enterprise risks and the steps management has taken to mitigate these risks. • Our Executive Vice President and Chief Information and Digital Officer provides regular updates to the Board on technology and cybersecurity. • Our Executive Vice President and Chief Legal Officer updates the Board regularly on material legal and regulatory matters. • Management also provides regular reports for Board discussion regarding recent business, finance, competitive and other developments impacting the Company. | À¿ | | | | À¿ | | | | À¿ | | | | À¿ | | | | | | | | Audit Committee Oversees risks related to our enterprise risk management framework and related to: • Financial statements, accounting and financial reporting, and internal controls; • Compliance with legal and regulatory requirements and ethics program; • Performance of internal audit function and effectiveness of internal controls; • Corporate risk profile; and • Technology, including information security and cybersecurity. | | | | Compensation and
Management Development Committee Oversees risks related to human capital management and compensation, including: • Workforce diversity, equity, and inclusion • Overall compensation policies, practices and philosophy; • Incentive and equity- based compensation plans; • Regulatory compliance with respect to compensation matters; and • Executive succession planning and management development. | | | | Nominating and
Corporate Committee Oversees risks related to our overall corporate governance, including: • Board effectiveness / evaluation of the Board; • Board and committee composition, skills tenure and diversity; • Director independence; • Board succession planning; • Regulatory compliance and corporate governance initiatives; and • ESG strategy, initiatives and policies and ESG-related risks. | | | | Investment and
Finance Committee Oversees risks related to asset portfolio, potential acquisitions and divestitures and certain financial matters, including: • Investment and financing policies and practices; • Capital investments, equity and debt transactions, swaps and hedging transactions; and • Finance requirements, plans and strategies. | À¿ | | | | À¿ | | | | À¿ | | | | À¿ | | Management • Identifies and assesses material risks. • Develops and implements appropriate risk management strategies. • Integrates risk management into our decision-making process. • Ensures that information with respect to material risks is transmitted to senior executives and the Board and its committees, as appropriate. |
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| | 29 |
| The Board of Directors and Certain Governance Matters (continued) |
Environmental, Social, and Governance As one of the nation’s premier home leasing companies, we have an opportunity to make a profound impact through sustainability initiatives as we seek to embody our values of Unshakeable Integrity, Genuine Care, Continuous Excellence, and Standout Citizenship. Our mission statement, “Together with you, we make a house a home,” reflects our efforts to create an exceptional leasing experience for our residents, a workplace where our associates can thrive, and ESG practices that contribute to a more inclusive, equitable, and sustainable world. We believe that integrating ESG initiatives into our strategic business objectives is part of our long-term success, and we continue to evolve our corporate strategy to meet sustainability and social responsibility commitments. | | |  | | Integrated Leadership Approach |
Through our integrated and ongoing approach to sustainability and corporate responsibility, we seek to drive positive change and create value for our stakeholders. To ensure consistent attention and focus on ESG matters, we employ an integrated approach: | | | Board of Directors | | At Invitation Homes, ESG activities are managed at a functional level across our strategic and operational areas, with executive and Board oversight. Our Board plays a critical role in understanding how ESG issues affect our business strategy and performance. | | | |
À¿ | | | Nominating and Corporate Governance Committee | | The Nominating and Corporate Governance Committee of the Board is responsible for monitoring, reviewing, and providing oversight with respect to our ESG strategy, initiatives, and policies via periodic updates from management regarding our ESG activities and progress. |
À¿ | | | Executive Leadership | | Our executive leadership takes a hands-on role in creating strategy and in ensuring the Company is accurately following and reporting on activities and outcomes. |
À¿ | | | | | ESG Task Force Led by Our Vice President, ESG | | Our in-house ESG professionals and a cross-functional task force of associates are responsible for the day-to-day measurement and reporting of our ESG strategy and activities. The task force consists of associates from these departments: | • Communications & PR • Corporate Strategy • Energy • Finance • Human Resources | | • Investor Relations • Legal • Marketing • Operations • Procurement |
In 2022, we continued to take action on the priorities identified in a formal ESG materiality assessment conducted in 2021. These efforts have resulted in the following: | • | | Hiring professional in-house expertise (Vice President, ESG, and Vice President, Energy) to expand and deepen our approach to ESG matters; |
Preparing to provide additional climate-related disclosures, including estimates of scope 1 and scope 2 greenhouse gas emissions; Continuing to improve our resident experience;
| The Board of Directors and Certain Governance Matters (continued) |
Advancing our diversity, equity and inclusion (“DE&I”) efforts, including improving our hiring profile, such that during the year ended December 31, 2022, 45% of our new hires were women and 55% were people of color; Focusing on our associates’ well-being, health, and safety and providing regular development opportunities that improve our associates’ capability to succeed in their current roles and achieve career growth to meet their aspirations; Investing in Pathway Homes, a new real estate company that provides unique housing solutions that allow customers to identify and purchase a home, offering them the opportunity to first lease and then, if they chose, buy the home outright at a future date; Entering into a sustainability-linked term loan, with pricing dependent upon the company meeting certain ESG performance targets; and Engaging in a broad range of community and philanthropic activities in our markets, contributing funds nationwide and encouraging our associates to be active in their communities. Some of these actions and initiatives are more fully described below. Recognition of our ESG Practices | | |  | | We routinely seek out and greatly value feedback, and we hold ourselves accountable. To that end, we participate in the GRESB Real Estate Assessment for a third-party evaluation of our ESG performance, and we are the first U.S. REIT to link the pricing of a revolving credit facility to our GRESB score. In 2022, for the second year in a row, we achieved an improvement of over 13% in our sustainability score with GRESB. |
| | |  | | Environmental Stewardship |
We are committed to sustainability and being a good corporate citizen. We focus on environmental sustainability because we recognize that the operation of our assets, the way our associates manage and conduct our business, and the way our residents use their homes can have a meaningful impact on the environment. While each resident is solely responsible for utility expenses related to energy and water usage, we seek to address environmental impacts within our areas of control and encourage our residents to do the same in their homes. Protecting the environment and limiting the carbon footprint of our homes is critically important to us. Examples of our environmental initiatives include: | • | | Providing ENERGY STAR® certified appliances and energy-efficient materials when feasible; |
| • | | Installing low-flow plumbing fixtures; |
Installing water-saving landscape designs in some of our arid locations; Replacing HVAC units with models that offer greater efficiency, based on governmental standards for equipment efficiencies; Providing an HVAC air filter home delivery program for our residents that helps prolong the life of our HVAC systems, reduce expenses associated with repairs, minimize downtime associated with system failure, and provide better air quality in the home as well as for the environment; Equipping our homes with remote, programmable smart home technology to help residents run their heating and cooling more efficiently and to allow us to monitor and control home temperatures when a home is vacant; Reducing drive times and number of trips for our repair technicians by optimizing routes, triaging maintenance issues, and utilizing stocked maintenance vehicles; Eliminating paper use among field technicians by utilizing software to electronically receive and process work orders; | • | | Promoting our myFlexibility program that allows associates and their leaders to agree upon and implement flexible work schedules, reducing the number of days per week in the office and, thus, commuting time and energy usage; |
Investing in the Fifth Wall Climate Technology Fund to support companies creating climate-friendly technologies for real estate; and | | | | | | | | | |
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| The Board of Directors and Certain Governance Matters (continued) |
| • | | Running a Green Spaces community initiative that brings residents, associates, and partners together to expand conservation efforts in our markets. |
Many of these examples are further emphasized in the following programs and initiatives. Turns and Maintenance Renovations offer an opportunity to install energy-efficient lights, fixtures, and appliances in our existing portfolio. As an example, we install a variety of low-flow plumbing fixtures saving on water consumption. We also use durable materials such as granite and quartz countertops and luxury vinyl plank flooring, which may reduce the need for future replacement and repair compared to other materials. The carpet products we use are manufactured using recycled plastic bottles as the primary material, diverting millions of plastic bottles from landfills each year. In addition, our mobile maintenance app allows our residents to make camera-enabled maintenance requests, and allows us to diagnose the problem before we arrive and reduce the number of return trips. ProCare ProCare service, our proactive property management service platform, includes several touchpoints (a few of which are described in more detail below) over the term of a resident’s lease designed to enhance their satisfaction with our service model, improve the efficiency of our service and our homes’ systems, and ensure that each resident is properly educated regarding the home and their responsibilities. Our ProCare service helps us identify home performance improvement opportunities that can prevent larger issues from occurring later. Through this program, we proactively engage with each home and each resident multiple times annually, ensuring that we can make any repairs and adjustments needed to maintain the home to our standards. Move-In Orientation We perform a comprehensive multi-point inspection of each home so it is in optimal condition for our residents when they move in. When a new resident moves into one of our homes, our associates conduct a resident orientation during which we walk through all of the home’s major systems in order to familiarize the resident with their safe and proper operation, from how to change the air filters to how to adjust the thermostat for optimal use, outline what aspects of the home’s upkeep are the resident’s responsibility, and revisit the terms of the lease. This is an opportunity to show residents how to run their systems as efficiently as possible. Post-Move-In Visit Once our residents are settled in, we return about 45 days later for a post move-in maintenance visit to make sure everything is working just as it should. This allows us an opportunity to fix any issues before they result in bigger problems. We address any resident concerns, answer questions, and point out opportunities to proactively maintain the home in a resourceful manner. By scheduling a post move-in maintenance visit, we are able to address multiple service requests in a single visit, improving the resident experience by avoiding the inconvenience of multiple service appointments and improving the efficiency and productivity of our in-house property maintenance associates. Recurring Maintenance Visits Following the regularly scheduled post move-in maintenance visit described above, our in-house property maintenance associates in each of our markets seek to conduct preventive maintenance visits approximately every six months during the life of a resident’s stay in the home. Such preventive maintenance visits allow us to identify potential safety hazards as well as potential causes of damage that could result in us incurring significant maintenance costs if left unaddressed. We focus on identifying small issues early to prevent bigger problems later. Smart Home Technology Our smart home technology is a service that helps our residents manage access to their homes and save on their energy bills. With our smart home features, residents can remotely lock and unlock the front door, control the thermostat, and receive notifications about their home – all virtually. Our smart home features also allow us to control thermostats in vacant homes, so we can maintain the temperature at a more energy-efficient setting and reduce energy consumption in between leases. If a vendor lowers or raises the temperature while working in a vacant home, the thermostat will reset back to the default schedule every hour to maintain optimum energy efficiency. Further, the smart home front door lock allows prospective residents to self-tour available homes at their convenience while eliminating the need for a leasing agent to commute to the home.
| The Board of Directors and Certain Governance Matters (continued) |
Our long-term target is to have all of our homes equipped with smart home functionality. We are installing smart home technology in all newly acquired homes and on all turns of existing homes if the technology is not already in place. Addressing Climate Change We recognize that climate change could have a significant impact on our portfolio of homes located in a variety of U.S. markets and that an increase in the number of acute weather events, natural disasters, and other climate-related events could significantly impact our business, operations, and homes. We take a proactive approach to protect our properties against potential risks related to climate change and business interruptions, and we recognize that we must continue to adapt our policies, objectives, and processes to improve the resiliency of our physical properties and our business. Portfolio resilience efforts are a critical component of our enterprise risk management program, which includes business continuity, crisis response, and risk management. The Audit Committee is responsible for overseeing our enterprise risk management strategy and performance. See “Oversight of Risk Management” above for additional details about our risk management practices. Our ESG Task Force, led by our dedicated Vice President, ESG, also helps coordinate climate-related portfolio resilience efforts. Our risk management team, in collaboration with other departments throughout the organization, is responsible for disaster preparedness and related business continuity planning and provides updates to our executive team on this matter on a regular basis. We appoint top executives as sponsors to promote the development and implementation of our business continuity plans. Our internal teams are responsible for executing disaster preparedness and response processes and procedures with respect to extreme weather events, public health crises, and security threats. Our processes and procedures for such events are documented and reviewed on a regular basis with teams in each of our markets and corporate headquarters. In the event of losses related to acute weather events, we maintain insurance policies for all of our properties against natural hazards such as flood, wind, fire, earthquake, and other catastrophic weather events subject to deductibles and co-insurance. Furthermore, our internal risk management team works with multiple third party vendors to enhance our ability to respond quickly and efficiently to various natural disasters and other weather events. These collaborative partnerships allow us to optimize how we respond to resident issues and result in quicker repairs so our residents may continue to safely inhabit their home after a disaster. In addition, we are an investor in Fifth Wall’s Climate Technology Fund. The Climate Technology Fund invests in technologies that address decarbonization across all stages of and asset classes within the global real estate ecosystem, including materials, construction, operations, and revitalization. We also agree with the recommendations of the external Task Force for Climate-related Financial Disclosures, and we plan to seek opportunities to implement their recommendations into our reporting in the future. | | |  | | Social Responsibility |
We strive to provide a work environment that attracts, develops, and retains top talent by creating an engaging work experience with opportunities for development. Further, our engagement with residents, community members, vendors, and others helps build strong connections that benefit our communities. Residents By offering quality homes in desirable neighborhoods, we believe we give residents the choice to lease a home in a community that may not have otherwise been attainable. We strive to provide our residents with a worry-free leasing lifestyle through service that includes welcoming them with an in-person home orientation at move-in, making their lives easier with our smart home technology and other ancillary service offerings, providing 24/7 maintenance combined with our ProCare property management platform, and surveying residents to ask for feedback that can help us make their experience even better. We have been successful at driving consistently high resident satisfaction by promoting a culture of Genuine Care, including through a formal recognition program and by linking all operational associates’ compensation to resident satisfaction. Maintaining consistent and transparent communication with our residents is a priority. In the last few years, we have updated resources on our external website to promote transparency, including: | • | | A step-by-step guide to our application process, including detailed qualification requirements, for potential residents; |
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| The Board of Directors and Certain Governance Matters (continued) |
| • | | A detailed move-out guide to inform residents of the steps to take when moving out of one of our homes, as well as tips on how to receive their full security deposit back; and |
A detailed list of lease components, such as rent, utility reimbursements, and ancillary services, to build awareness of the service selections residents have made and the charges they are responsible for when they lease a home. We also believe it is important to listen to our residents, and we take their feedback to heart in our quest to continuously enhance the Genuine Care we provide. We survey residents at each key step in their journey with us, such as at move-in and move-out, and after every maintenance interaction they have with one of our associates or vendors. We use this feedback and other information to hold ourselves accountable, with over 99% of our operational associates having a portion of their compensation tied directly to resident satisfaction survey scores. We also use feedback from surveys and focus groups to help inform new service offerings and enhancements we make to the resident experience. In addition to our website and resident surveys, we engage with our residents through monthly resident newsletters, blog posts, and social media campaigns and contests. Our all-time company rating of 4.1 on Google and Yelp combined (as of December 31, 2022), our A+ rating with the Better Business Bureau (“BBB”) (as of December 31, 2022), and our BBB accreditation (since January 10, 2022) evidence our commitment to resident satisfaction. Communities We value being part of the communities where we do business, and we recognize that the vitality of our business is directly linked to the vitality of the communities in which we operate. We also believe our business has a positive economic impact on the communities in which we operate, through improved neighborhoods that benefit from our home renovations, the value of our local teams living in and contributing to the local economy, and the payment of real estate taxes and purchase of local goods and services To promote our relationships with local communities, we encourage our associates to be good neighbors in their respective communities by partnering with local organizations to provide support to those in need. We are actively engaged in a broad range of community and philanthropic activities in our markets, contributing funds nationwide and encouraging our associates to be active in their communities by providing each of them 20 hours of paid volunteer time each year. We support our communities in the following ways. Being a Good Neighbor We are a long-term investor in each of the markets where we operate. We hire locally, employing 1,511 dedicated full-time associates, as of December 31, 2022, and contracting with thousands of professional service vendors nationwide. We also take good care of our homes. In 2022, we spent approximately $470 million upgrading, improving, and maintaining our homes, which we believe increases the value of surrounding houses and neighborhoods. In 2022, we paid approximately $350 million in state and local taxes; money that was invested back into local programs and services, schools, and more. Community Engagement We believe our values of Genuine Care and Standout Citizenship should extend beyond the walls of our offices and drive our desire to be a good neighbor in each of our communities. While we serve under a company wide mantra of “go do good,” much of our community engagement is locally driven. As such, we empower our associates to make an impact in the communities where they live and work through volunteerism and through recommendations for contributions to local charitable organizations. In 2022, our associates volunteered 19,358 hours in their local communities. Skilled Trades Initiative Our Invitation to SkillUp program encourages students to pursue high-demand and well-paid jobs in the skilled trades and provides job-readiness training to help close the skills gap and broaden access to career opportunities in fields that directly impact our business. We have partnered with four schools in California, Florida, Washington, and North Carolina, with plans to expand to schools across all 16 of our markets over the next several years. By providing funding to trade schools across our network, we can directly help people learn trade skills. At the same time, we seek to educate business partners and the general public about the skills gap and to shift perceptions about trade careers. Green Spaces Our Green Spaces community initiative is dedicated to the development and improvement of outdoor community spaces in our markets. One early result of this initiative is our three-year partnership to maintain, enhance, and expand the Hawes Trail
| The Board of Directors and Certain Governance Matters (continued) |
System throughout Arizona. We plan to pursue more partnerships like this to continue our investment in the communities where we operate and expand our conservation efforts. We will launch a search for the next community spaces improvement in 2023 through a formal internal grant-making competition among our 16 markets. Centers for Leadership Excellence Invitation Homes supports the Centers for Leadership Excellence, a newly established effort designed to increase diversity across the real estate industry. The goal of the program is to connect students, universities and hiring companies in order to create a replicable, scalable model that will encourage diverse students to seek education and a career in real estate. Talent and Human Capital Management Our associates are the backbone of our company. Nothing is accomplished without the day-to-day dedication of our invaluable teams. Whether they are a front-line market associate who represents us each and every day with our residents, or a centralized team member who supports the front line and strives to ensure quality and consistency of our work, our associates are our greatest asset. From our focus on associates’ well-being, health, and safety to our support of a DE&I culture, we treat each other fairly and act with honesty, integrity, and respect. Diversity, Equity, and Inclusion We believe that diverse, equitable, and inclusive companies make for more innovative, engaged, and happy teams. Our organization celebrates diversity and cultivates a culture of equity and inclusion. As of December 31, 2022, women comprise 43% of all associates and 41% of our manager and above population, and people of color comprise 47% of all associates and 30% of our manager and above population. During the year ended December 31, 2022, 45% of our new hires were women and 55% were people of color. We currently have six active Employee Resource Groups (“ERGs”): Together With Women; The Black Collective; Juntos; GenNEXT; Open Invitation; and Asian Alliance. As of December 31, 2022, 427 associates were members of at least one ERG. 
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| | Our CEO is a signatory of the CEO Action for Diversity & Inclusion initiative and personally pledged to continue to advance DE&I within our workplace. The scope of this pledge supports equity for all, including ethnically or racially diverse persons, the LGBTQIA community, people with different abilities, veterans, and women. |
Our DE&I philosophy contributes to our overall business strategy and serves as a catalyst for retaining our associates, recruiting diverse talent, and building beneficial business relationships with key stakeholders. This business approach is expected to help increase our workforce diversity, retain and upskill our talent, and enhance our company’s culture. We expect this to position us as an employer of choice and one of the nation’s leading home leasing companies. In 2022, we were recognized for our commitment to DE&I through several external awards: Best Company for Diversity and Best CEO for Diversity by Comparably; and Top Rated CEO for Gender Diversity and Best Company by Fairygodboss. | | | | | | | | | |
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| The Board of Directors and Certain Governance Matters (continued) |
Associate Development and Engagement We value feedback from our associates, and we maintain a continuous listening associate survey tool, Our Family. Your Voice. We continue to achieve high participation by our associates, with 80% of our associates sharing feedback at least once in 2022. This tool provides managers with actionable feedback on several key engagement dimensions. We believe meaningful actions based on associate feedback provided by the surveys have resulted, and will continue to result, in ongoing high engagement with our associates as evidenced by our strong associate Net Promoter Score of 60 at the end of 2022, compared to a benchmark of 33. In 2022, our focus on engagement led to recognition by Comparably for Best Company Culture, Best Company — Dallas, and Best Company Happiness. We recognize the value of providing regular development opportunities for our associates that improve their capability to succeed in their current roles and achieve career growth to meet their aspirations. In 2022, we launched Growing People for Success, a fully integrated talent cycle that incorporates our performance and feedback process, career growth and development, and leadership behaviors model. We also conduct an annual mandatory compliance training campaign and offer a robust catalog of online learning and development videos designed to help associates build their skills. We were recognized by LinkedIn in 2022 with a Top Companies in Real Estate award, ranking #8 in companies offering real estate career growth. We are committed to accelerating the development of our leaders through various programs such as “Leadership Essentials,” a program designed to build capable and confident leaders that can lead and inspire a diverse workforce in an ever-changing environment. In 2022, we launched an immersive six-month leadership development program for 25 emerging leaders. Additionally, we designed and piloted a leadership assessment and development program, aimed at creating a science-based approach to identifying, growing, and retaining our top talent. Lastly, we brought 150 of our leaders together in 2022 to focus on leadership development, building trust, and alignment with key Invitation Homes priorities. This commitment to leadership development resulted in Invitation Homes being recognized by Comparably in 2022 as having Best Company Leadership. Associate Compensation and Benefits; Workplace Safety We believe that competitive compensation and benefits are key drivers of associate attraction, retention, motivation, and engagement. Our compensation and benefits programs for full-time associates include the following: | | | | | | | | | | | | | | | | | | | | | | |  | | WELL-BEING | | | |  | | FINANCIAL | | | |  | | LIFE | • Health, vision, and dental insurance • HSA and FSA offerings • Online well-being resources • Immunizations • Employee Assistance Program • Weight loss program • Smoking cessation program | | | | • Competitive compensation • Short-term incentive plan (annual bonus) • Pre-tax contributions to eligible savings accounts • 401(k) match up to 4% of base pay, and immediate vesting • Paid short-term and long-term disability and life insurance | | | | • Paid bonding leave • Maternity and fertility benefits • Surrogacy and adoption benefits • Discounts program • Generous paid time off and holidays • Paid volunteer time • Flexible work program (for office-based associates) |
Compensation is one component of our Total Value offering for Invitation Homes associates, and we strive to compensate associates fairly and consistently based on market rates for their roles, experience, and how they perform. As such, in 2022 a pay equity review was conducted by a third-party consultant with oversight by our human resources team. Our results show that we have 100% pay equity in salary for women and men, and compensation received by people of color is, on average, 99% of that received by peers who are not people of color in comparable positions. We intend to continue monitoring our pay equity practices on an ongoing basis and consider pay equity dynamics when promoting internally and hiring externally. Achieving and sustaining pay equity is a key focus for us. Another component of our Total Value offering for associates is our holistic wellness program, which is designed to enhance mental, physical, and financial wellbeing. We also offer a myFlexibility program under which many of our office-based associates have shifted to hybrid work schedules. Health and safety programs and processes are also vitally important to the wellbeing of our associates, and we conduct monthly safety training for our maintenance associates and a regular driving safety training for our fleet drivers. We continue to enhance and improve health and safety processes, and we review and monitor our performance monthly to reduce on-the-job injuries. Our goal is to reduce Occupational Safety and Health Administration recordable incidents each year.
| The Board of Directors and Certain Governance Matters (continued) |
| | |  | | Governance and Ethical Business Practices |
We strive every day to ensure that our actions result in value for the individuals and organizations that have chosen to invest in our Company, and we take that responsibility very seriously. We believe that ethical business practices and good governance promote the long-term interests of our stockholders, strengthen Board of Directors and management accountability, and improve our standing as a trusted member of the communities we serve. Culture of Integrity and Ethical Values We believe it is critically important to maintain a corporate culture that demands integrity and reflects our ethical values. We are committed to operating at the highest ethical level and serving as a responsible fiduciary for our stockholders. Everyone who works at or with Invitation Homes should feel confident about our high ethical standards, our honesty, and our integrity. Our daily decisions are driven by our Code of Conduct, which demonstrates our commitment to be a responsible corporate citizen and a good business partner. The Code of Conduct helps guide us as we collaborate to accomplish our goals together, while holding ourselves individually responsible for our work and accountable for our actions. Guiding Policies We have adopted business and workplace policies that apply to our directors, officers, associates, and vendors, aimed at creating a culture that aligns with our core values and high ethical standards and complies with applicable laws, rules, and regulations. Among other things, these policies encompass areas of community and associate engagement, DE&I, human rights, corporate governance and ethics, and environmental initiatives. These policies are posted on our website at www.InvitationHomes.com/ESG-Policies. Our Code of Conduct is supported by associate conduct policies and programs and reinforced through regular associate training. In our daily interactions with residents, fellow associates, vendors, suppliers, and other stakeholders, honesty and integrity are essential. These tenets are articulated in our Code of Conduct, including policies on conflicts of interest, gifts and entertainment, fraud, sanctions, outside activities, political contributions, and bribery and corruption. Any associate who violates the requirements of the Code of Conduct, or any of our other policies, is subject to disciplinary action up to and including termination. See “The Board of Directors and Certain Governance Matters—Code of Business Conduct and Ethics” for more information about our Code of Conduct. Disclosure Committee We have a Disclosure Committee to assist in fulfilling our obligations to maintain disclosure controls and procedures and to coordinate and oversee the process of preparing our current and periodic filings with the SEC. This Committee is composed of members of senior management and is co-chaired by our Executive Vice President, Chief Financial Officer and Treasurer, and Senior Vice President, Associate General Counsel. Reporting Violations and Whistleblower Protection Our confidential compliance hotline is a critical part of our ethics and compliance program. The hotline is available 24 hours a day, 365 days a year and is operated by a third party compliance management provider, enabling automated and anonymous reporting. We have implemented a “whistleblower” policy that allows our associates to file reports regarding any impropriety on a confidential and anonymous basis and establishes comprehensive procedures for the receipt, retention, investigation, and treatment of reports. The reports are reviewed with our Audit Committee at meetings throughout the year. Our Code of Conduct provides that “neither our company, nor any director, officer, employee, contractor, subcontractor, or agent of the company will, directly or indirectly, discharge, demote, suspend, threaten, harass, or in any manner discriminate or retaliate against any person who, in good faith, makes a report or assists in investigating a report.” Vendor Practices We expect the same high standards of those who work with us and represent us, and our Vendor Code of Conduct is an extension of our values to our vendors and serves to highlight our commitment to ethical business practices, safe labor conditions, respect for human rights, environmental stewardship, and regulatory compliance. Vendors of Invitation Homes and their representatives are expected to conduct their business interactions and activities with integrity and in accordance with their obligations under their agreements with us and to adhere to the business practices set forth in the Vendor Code of Conduct. | | | | | | | | | |
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COMPENSATION OF DIRECTORS Our non-employee directors are entitled to receive cash compensation, as well as equity compensation in the form of restricted stock units (“RSUs”), for their Board service. Mr. Tanner, our CEO, receives no compensation for serving on our Board. | | | | | Highlights of Our Non-Employee Director Compensation Program | | | | | No Fees for Board or Committee Meeting Attendance: Meeting attendance is an expected part of Board service. | | ü | | | Emphasis on Equity: There is an emphasis on equity in the overall compensation mix to further align interests with stakeholders. | | ü | | | Recognition of Special Roles: Special roles, such as Committee chairpersons, are recognized for their additional time commitments. | | ü | | | Annual Equity Grants: Equity awards are granted annually with a fixed value and one-year vesting schedule, providing alignment with stockholders’ interests. | | ü | | | Robust Stock Ownership Guidelines: A guideline of five times the annual Board membership cash retainer supports alignment with stakeholders’ interests and mitigates potential compensation-related risk. | | ü | | | No Perquisites and No Related Tax Gross-Ups. | | ü |
2022 Annual Director Compensation Program In 2022, our non-employee directors received annual compensation, as follows: an annual cash retainer of $80,000, and $230,000 in the case of the Board Chairperson; an additional cash retainer of $20,000 for those serving as Chairpersons of the Audit Committee, Compensation and Management Development Committee, Nominating and Corporate Governance Committee and Investment and Finance Committee; and an equity award of $170,000, in the form of time vesting RSUs, granted on the date of the annual stockholders meeting, which will vest in full on the date of our next annual meeting of stockholders following the grant date, subject to the director’s continued service on such vesting date, and will be in respect of a number of shares equal to the award amount divided by the closing price of our common stock on the NYSE on the grant date. 
| (1) | $20,000 Additional Annual Cash Retainers for Committee Chairpersons. |
All RSUs granted to directors entitle the director to dividend equivalent payments in respect of the director’s RSUs, whether his or her RSUs are unvested or vested and not yet settled. The dividend equivalents are deliverable to the director on the regular payment date that such dividends are made to the Company’s stockholders and in the same form as delivered to such stockholders whether in cash or common stock. To date, all dividends declared on the Company’s common stock were paid in cash. In addition, our directors are not paid any fees for attending meetings; however, each director is reimbursed for reasonable travel and related expenses associated with his or her attendance at Board or committee meetings. Our Compensation and Management Development Committee is responsible for reviewing and advising on the compensation of our non-employee directors. To assist with this duty, they have engaged an independent compensation consultant,
| Compensation of Directors (continued) |
Ferguson Partners Consulting (“FPC”), to perform periodic reviews of our non-employee director compensation program, which includes an analysis of market trends and best practices and a comparison versus our peer group companies. The compensation program for our non-employee directors was last revised in May 2021, upon recommendation of the Compensation and Management Development Committee in consultation with FPC. Our non-employee directors who receive compensation for their service on the Board are also subject to a stock ownership policy, as described below under “Executive Compensation—Compensation Discussion and Analysis.” Director Compensation Table for Fiscal 2022 The table below sets forth information regarding non-employee director compensation for the fiscal year ended December 31, 2022. | | | | | | | | | | | Name | | Fees Earned or Paid
in Cash ($) | | Stock Awards
($)(1)(2) | | Total ($) | | | | | Michael D. Fascitelli | | $230,000 | | $170,026 | | $400,026 | | | | | Jana Cohen Barbe | | $ 80,000 | | $170,026 | | $250,026 | | | | | Richard D. Bronson | | $100,000 | | $170,026 | | $270,026 | | | | | Jeffrey E. Kelter | | $100,000 | | $170,026 | | $270,026 | | | | | Joseph D. Margolis | | $ 80,000 | | $170,026 | | $250,026 | | | | | John B. Rhea | | $100,000 | | $170,026 | | $270,026 | | | | | J. Heidi Roizen | | $ 80,000 | | $170,026 | | $250,026 | | | | | Janice L. Sears | | $100,000 | | $170,026 | | $270,026 |
| (1) | Amount represents the aggregate grant date fair value of the directors’ annual RSU awards granted in 2022 calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, using the assumptions discussed in Note 10 to the consolidated financial statements included in our 2022 Form 10-K. In accordance with the SEC’s rules, dividend equivalents that accrued on equity awards in 2022 are not reported above, because dividends were factored into the grant date fair value of these awards. |
| (2) | As of December 31, 2022, each non-employee director held 4,614 unvested RSUs, representing each director’s 2022 annual RSU award. |
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PROPOSAL NO. 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has selected Deloitte & Touche LLP (“Deloitte”) to serve as our independent registered public accounting firm for 2023. Although ratification is not required by our Bylaws or otherwise, the Board is submitting the selection of Deloitte to our stockholders for ratification because we value our stockholders’ views on the Company’s independent registered public accounting firm. If our stockholders do not ratify the selection, it will be considered as notice to the Board and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if it determines that such a change would be in the best interests of the Company. Representatives of Deloitte are expected to be present at the Annual Meeting. They will also have the opportunity to make a statement if they desire to do so, and they are expected to be available to respond to appropriate questions. Audit and Non-Audit Fees In connection with the audit of our 2022 consolidated financial statements, we entered into an agreement with Deloitte, which sets forth the terms by which Deloitte performed audit services for the Company. The following table presents fees for professional services rendered by Deloitte for the audit of our financial statements for 2022 and 2021, and for fees billed for other services rendered by Deloitte during those periods. | | | | | | | | | | | | | | ($ in thousands) | | 2022 | | 2021 | | | | Audit fees(1) | | | | $1,719 | | | | | $1,604 | | | | | Audit-related fees(2) | | | | 301 | | | | | 375 | | | | | Tax fees(3) | | | | 186 | | | | | 354 | | | | | All other(4) | | | | — | | | | | 73 | | | | | | | | | | | | | | | | Total | | | | $2,206 | | | | | $2,406 | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Includes the aggregate audit fees recognized in each of the last two fiscal years for professional services rendered for the audits of the Company’s annual consolidated financial statements and the reviews of quarterly condensed consolidated financial statements. |
| (2) | Includes audit-related fees recognized in each of the last two fiscal years for professional services rendered in connection with (1) the audits of joint ventures for which we are the managing member and (2) review of prospectus information filed with the SEC related to our common stock and debt offerings and ongoing maintenance of our at-the-market equity offering program. |
| (3) | Includes the aggregate tax fees recognized in each of the last two fiscal years for professional services rendered for tax compliance, tax advice, and tax planning. |
| (4) | Includes fees recognized in 2021 for professional services rendered for a fraud risk assessment. |
All of the services covered under the captions “Audit fees,” “Audit-related fees,” “Tax fees,” and “All other” were pre-approved by the Audit Committee. We paid no fees to Deloitte in 2022 or 2021 other than the Audit fees, Audit-related fees, Tax fees, and All other set forth in the table above. The Audit Committee considered whether providing the non-audit services shown in this table was compatible with maintaining Deloitte’s independence and concluded that it was. Pre-Approval Policy for Services of Independent Registered Public Accounting Firm Consistent with SEC policies regarding auditor independence and the Audit Committee’s charter, the Audit Committee has responsibility for engaging, setting compensation for and reviewing the performance of the independent registered public accounting firm. In exercising this responsibility, the Audit Committee has established procedures relating to its approval of all audit and non-audit services that are to be performed by our independent registered public accounting firm and, except where services may be pre-approved under authority delegated by the Audit Committee, the Audit Committee pre-approves all audit and permitted non-audit services provided by any independent registered public accounting firm prior to each engagement. The Audit Committee has delegated to its Chairperson the authority to review and pre-approve any such services between the Audit Committee’s regular meetings, and any such pre-approval will be subsequently considered and ratified by the Audit Committee at its next regularly scheduled meeting.
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| | Board Recommendation | | | The Board of Directors unanimously recommends that you vote “FOR” the Ratification of Deloitte & Touche LLP as our independent registered public accounting firm for 2023. |
EXECUTIVE OFFICERS OF THE COMPANY Set forth below is certain information regarding each of our current executive officers. DALLAS B. TANNER Title:President and Chief Executive Officer Age:39 42 Mr. Tanner has served as our President and CEO and a Board member since January 2019. As a founding member of our Company’s business, Mr. Tanner has beenwas at the forefront of creating the single-family rental industry. Since the founding of Invitation Homes in April 2012, he hasHe initially served as Executive Vice President and Chief Investment Officer andfrom the Company’s founding in April 2012 until January 2019, as well as Interim President from August 2018 to January 2019, and as Interim President.President and CEO from January 2019 to February 2023. Prior to our IPOthe initial public offering of the Company in February 2017, he served on the boards of the Company’s predecessor entities. Mr. Tanner has almost 20 years of real estate experience through the establishment of numerous real estate platforms. In 2005, he founded Treehouse Group, for which he privately sourced funds for platform investments, including single-family rental homes, multifamily properties, manufactured housing, residential land, bridge financing and property management. Mr. Tanner continues to be involved in Treehouse Group’s interest in Pathfinder Ventures, a Southwest-focused commercial real estate fund. In addition, he was a partner in thea successful acquisition of First Scottsdale Bank of Arizona. Mr. Tanner served oncurrently serves as a board member of Roots Management, a manufactured housing platform with 40,000+ homes that operates in 22 states. He also is a member of the Maricopa County (Arizona) Flood ControlHOPE Global Board of Advisors, the Policy Advisory Board of the Harvard Joint Center for Housing Studies, Arizona State University Real Estate Advisory Board, and on the advisory board of First Scottsdale Bank.Real Estate Roundtable. He is actively involved in American Indian Services and served as a missionary in the Netherlands and Belgium. CHARLES D. YOUNG Title: President and Chief Operating Officer Age: 54 Mr. Young has served as our President and Chief Operating Officer since March 2023. Previously, Mr. Young served as Executive Vice President and Chief Operating Officer of Invitation Homes since November 2017. From March 2015 until we completed the merger with SWH, Mr. Young served as the Chief Operating Officer of SWH and, from June 2013 to March 2015 was Senior Vice President—West Division of SWAY Management LLC, SWH’s previous external manager. Mr. Young was previously the Regional Vice President, Eastern Region of Waypoint Real Estate Group HoldCo, LLC (the “Waypoint Manager”), a company he joined in 2012. Prior to joining the Waypoint Manager, Mr. Young was Executive Vice President at Mesa Development from 2003 to 2012, a national real estate developer, investor and service provider with a focus on complex mixed-use residential opportunities. Before Mesa, Mr. Young worked for Goldman, Sachs & Co. in their Real Estate Principal Investment Area (Whitehall) and Development Investment Banking Division, focusing on mergers and acquisitions. Mr. Young also created and managed two entrepreneurial ventures. He co-founded and was a managing director of The Kaleidoscope Group, L.L.C., a strategic diversity and management consulting firm, and he managed K.G. Holdings, LLC, a real estate holding and management firm. Before starting his career in real estate and investment banking, Mr. Young spent several years as a professional football player in the National Football League and the World Football league. He is a member of the Floor and Décor Board of Directors, where he serves on the nominating and corporate governance committee, and a member of the Stanford Board of Trustees, where he serves on the committee on trusteeship, the committee on land and buildings and the committee on athletics.
| Executive Officers of the Company (continued) |
ERNEST M. FREEDMAN Title:Executive Vice President, and Chief Financial Officer and Treasurer Age:49 52 Mr. Freedman has served as our Executive Vice President, and Chief Financial Officer and Treasurer since October 2015. Mr. Freedman previously served as Executive Vice President and Chief Financial Officer of Apartment Investment and Management Company (“Aimco”) from 2009 to 2015. Mr. Freedman joined Aimco in 2007 as Senior Vice President of Financial Planning and Analysis and served as Senior Vice President of Finance from February 2009 to November 2009, where he was responsible for financial planning, tax, accounting, and related areas. From 2004 to 2007, Mr. Freedman served as Chief Financial Officer of HEI Hotels and Resorts. From 2000 to 2004, Mr. Freedman was at GE Real Estate in a number of capacities, including operations controller and finance manager for investments and acquisitions. From 1993 to 2000, Mr. Freedman was with Ernst & Young, LLP, including one year as a senior manager in the real estate practice. He is a member of the board of directors of CA Student Living, a student housing developer and investment management company, where he serves as the Chair of the audit committee and a member of the compensation committee. Mr. Freedman is a certified public accountant. MARK A. SOLLS Title:Executive Vice President, Chief Legal Officer and Secretary Age:63 66 Mr. Solls has served as our Executive Vice President, Chief Legal Officer and Secretary since August 2015. Mr. Solls previously served as Senior Vice President and General Counsel of DentalOne Partners, Inc., a dental service management organization, from August 2012 to July 2015. From April 2011 to July 2012, Mr. Solls served as a Legal Consultant to Susan G. Komen for the Cure Breast Cancer Foundation. Mr. Solls served as Executive Vice President and General Counsel of Concentra Inc., a healthcare management company, from August 2006 to January 2011. From September 2002 to May 2006, Mr. Solls served as Executive Vice President and General Counsel for Wyndham International, Inc., a leading hotel company. From 1998 to 2002, Mr. Solls served as Vice President and General Counsel of DalTile International Inc., a leading manufacturer and distributor of ceramic tile. CHARLES D. YOUNG
Title:Executive Vice President and Chief Operating Officer
Age:51
Mr. Young has served as our Executive Vice President and Chief Operating Officer since November 2017. From March 2015 until we completed the Merger, Mr. Young served as the Chief Operating Officer of SWH and, from June 2013 to
| Executive Officers of the Company(continued)
|
March 2015 was Senior Vice President—West Division of SWAY Management LLC, SWH’s previous external manager. Mr. Young was previously the Regional Vice President, Eastern Region of Waypoint Real Estate Group HoldCo, LLC (the “Waypoint Manager”), a company he joined in 2012. Prior to joining the Waypoint Manager, Mr. Young was Executive Vice President at Mesa Development from 2003 to 2012, a national real estate developer, investor and service provider with a focus on complexmixed-use residential opportunities. Before Mesa, Mr. Young worked for Goldman, Sachs & Co. in their Real Estate Principal Investment Area (Whitehall) and Development Investment Banking Division, focusing on mergers and acquisitions. Mr. Young also created and managed two entrepreneurial ventures. Heco-founded and was a managing director of The Kaleidoscope Group, L.L.C., a strategic diversity and management consulting firm, and he managed K.G. Holdings, LLC, a real estate holding and management firm. Before starting his career in real estate and investment banking, Mr. Young spent several years as a professional football player in the National Football League and the World Football league. He is an independent board member of Federal Home Loan Bank of Chicago and a member of the Stanford Board of Trustees.
| | | | | | | | 37 | | | 2020 Proxy Statement
| | 43 |
EXECUTIVE COMPENSATION— COMPENSATION DISCUSSION AND ANALYSIS Introduction This section provides an overview of compensation and discusses compensation policies and programs for the following current and former executive officers of the Company (our named executive offices, each an “NEO” and, collectively, the “NEOs”): Dallas B. Tanner, our CEO; Charles D. Young, our President and CEO;Chief Operating Officer; Ernest M. Freedman, our Executive Vice President, and Chief Financial Officer;Officer and Treasurer; and Mark A. Solls, our Executive Vice President, Chief Legal Officer and Secretary; andSecretary. Charles D. Young, ourOn January 30, 2023, we announced that Ernest M. Freedman provided notice of his resignation as the Company’s Executive Vice President, Chief Financial Officer and Treasurer, effective as of June 1, 2023. The Board appointed Jonathan S. Olsen, our current Executive Vice President, Corporate Strategy & Finance, as the Company’s new Executive Vice President, Chief Operating Officer.Financial Officer and Treasurer effective as of June 1, 2023.
Executive Summary Our vision is to be the premier choice in home leasing by continuously enhancing our residents’ living experience, and continuing to make significant contributions to economic growth, job creation and the vitality of the local communities we serve. In 2019,2022, we achieved many accomplishments:continued to build our Merger integration resulted in a more efficient platformportfolio to meet the growing demand for single-family rental homes. Alongside the positive impact we made with whichresidents and communities, we delivered strong financial results for our stockholders. In successfully executing our business strategy and increasing dividends over time, we continue to deliver resident service; we recycled capital to improve the portfolio of homes we offer residents; and we further refined ourbest-in-class ProCare resident experience.achieve strong total shareholder returns (“TSR”). 
| (1) | TSR represents growth in the value of an investment in the Company’s shares of common stock due to share price appreciation or depreciation and dividends paid, assuming the contemporaneous reinvestment of dividends on their ex-dividend dates. Data is for the period from January 1, 2018 through December 31, 2022. |
The overarching goal of our executive compensation program is to motivate our leaders to achieve our key strategic priorities and focus on long-term value creation for our stockholders. Our executive compensation program is designed to reward for financial performance and specific business results, mitigate material risks and align with stockholder interests by having a
| Executive Compensation—Compensation Discussion and Analysis (continued) |
significant portion composed of long-term equity-based awards. We set pay levels commensurate with performance and the need to attract and retain high quality talent, and we consider many factors in setting executive compensation, including the advice of the Compensation and Management Development Committee’s consultant, level of pay relative to the Company’s other executives, competitive market data and Company and individual performance and results. As part of determining executive compensation, the Compensation and Management Development Committee reviews theour goal-setting processes to ensure targets are rigorous, yet attainable, thereby incentivizing performance. In determining 20192022 executive compensation, the Compensation Committee considered a balanced mix of metrics for our annual and long-term incentive plans to measure the Company’s performance, including among other things enhancement of resident loyalty as measured by Net Promoter Score (“NPS),” synergies created by the completion of our integration with SWH, Same Store Core Revenue Growth, Adjusted Funds from Operation (“AFFO”) per share,progress against strategic priorities, as well as individual executive performance. 2022 Performance Highlights Some of our key business results for 2019 were:
| | | $1.03(1)
AFFO of $1.03 per share, up 8.9% year-over-year
On a Generally Accepted Accounting Principles (“GAAP”)
basis, $0.27 net income per diluted common share
| | Enhanced Resident Loyalty
Record low resident turnover rate of 30.1%, and 4.3 (out of 5) average resident satisfaction survey score, NPS score of 32 for full-year 2019 vs. a target of 30 for full-year 2019
| 4.5%(2)(3)
Same Store Core Revenue Growth year-over-year
On a GAAP basis, 2.4% total revenue growth year-over-year
| | Improved Portfolio
$653 million of acquisitions and $900 million of dispositions to improve portfolio quality and footprint
| $58 Million in Synergies(4)
Run-rate annual synergies exceeded our guidance midpoint for 2019 by $5 million, and our initial guidance midpoint by $10 million
| | Leverage Reduction
$702 million reduction in net debt, helping to drive a 1x reduction in net debt / annualized Adjusted EBITDAre(5)
|
| | | | | 2020 Proxy Statement | | | $0.63 On a Generally Accepted Accounting Principles (“GAAP”)
basis, net income per diluted common share. $1.41(1) Adjusted Funds from Operation (“AFFO”) per share, up 10.2% year-over-year. | | 38 | | |
46.6% On a GAAP basis, net income available to common
stockholders growth year-over-year. 9.1%(2)(3) Same Store NOI Growth year-over-year.
| | | | | | | | | Executive Compensation—Compensation Discussion13.3%
Increase in our sustainability scoring year-over-year by GRESB, the global ESG benchmark for real estate. | | | | $68.7 million Amount of rental assistance we helped our residents obtain during 2022. | | | | | | | | | $1.1 billion Total wholly owned and Analysis(continued)joint venture acquisitions. | | | | 2,370 Homes Number of new homes we are under contract and expect
to purchase from our homebuilder partners over the next
several years. | | | | | | | | | $1.33 billion of unsecured debt issued primarily to refinance secured debt, reducing secured debt / gross tangible
assets from 16.3% at December 31, 2021 to 9.4% at
December 31, 2022 (4). | | | | 29.4% Increase in our quarterly cash dividend, from $0.17 per
common share per quarter in 2021 to $0.22 per common
share per quarter in 2022. | | | | | | | | | 97.7% Same Store average occupancy for fiscal year 2022,
driven by year-over-year reduction in Same Store
turnover rate from 23.1% to 21.9%. | | | | Investment-Grade Rated Maintained three investment grade ratings and reduced
net debt / annualized Adjusted EBITDAre(5) from 6.2x at
December 31, 2021 to 5.7x at December 31, 2022. |
| (1) | Please seeSee Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Non-GAAP Measures” in our 20192022 Form10-K for the reconciliation of AFFO to net income (loss) (as determined in accordance with GAAP), the most directly comparable GAAP measure.
|
| (2) | See “Annex A:Non-GAAP Reconciliations” for reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues, full year.
|
(3) | “Same Store”NOI Growth is defined in our 2019 Form10-K under “Defined Terms.” “Core Revenue” for an identified population of homes reflects total revenues, net of any resident recoveries.
|
(4) | Run Rate Annualized Synergies as of Q2 2019, defined as the annualized impact achievedpercentage year-over-year change in 2018 and the first half of 2019Net Operating Income (“NOI”) from any costs eliminated, net of costs added, associated with the integration of the legacy Invitation Homes and SWH platforms.
|
(5) | Please seeour Same Store portfolio where NOI is calculated as described in our 2022 Form 10-K under Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Non-GAAP Measures.” See Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures” in our 20192022 Form10-K for the reconciliation of Adjusted EBITDAreSame Store NOI to net income (loss) (as determined in accordance with GAAP), the most directly comparable GAAP measuremeasure.
|
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| | 45 |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
| (3) | “Same Store” is defined in our 2022 Form 10-K under “Defined Terms.” |
| (4) | Secured debt / gross tangible assets represents (i) the gross balance of secured debt, divided by (ii) total assets, less goodwill, gross of accumulated depreciation of investments in single-family rental properties. |
| (5) | See Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Measures” in our 2022 Form 10-K for the reconciliation of Adjusted EBITDAre to net income (loss) (as determined in accordance with GAAP), the most directly comparable GAAP measure. |
Strong Compensation Governance We maintain strong governance standards in the oversight of our executive compensation programs, including the following policiesprograms. The Compensation and practices that were in effect during 2019. Strong Compensation Governance
The CompensationManagement Development Committee oversees the executive compensation program and evaluates the program against competitive practices, legal and regulatory development and corporate governance trends. The Compensation Committee has incorporated the following market-leading governance features into our program.
| | | | | | | What We Do: Do | | What We Don’t Do:
| | | 
| | Pay-for-Performance:The majority of our executive compensation is performance-based and at-risk, tied to rigorous absolute and relative performance goals;goals. | |  | | No employment agreements or individual change in control agreements;✔ | | | | |
Annual Say-on-Pay Vote: We conduct a stockholder advisory vote on executive compensation annually. | | We utilize a balanced mix of metrics for our annual and long-term incentive plans to measure the Company’s performance; | | | | We do not encourage excessive risk taking (we conduct annual formal enterprise risk assessments);✔ | | | | |
| | Recoupment Policies:We have implemented a claw-backclawback policy for long-term incentive awards to allow for the Company to seek reimbursement from our senior executives;executives. | | | | We do not authorize excise tax gross-ups;✔ | | | | |
Short-Term and Long-Term Incentives: Our annual and long-term incentive plans provide a balance of incentives and include complementary metrics to measure the Company’s performance and align with ESG metrics. | | We have a stock ownership policy for our executive officers and non-employee directors; and | | | | We prohibit hedging and restrict pledging or borrowing against Company stock; and✔ | | | | |
Capped Incentive Awards: Payouts under our annual and long-term incentive plans are capped at 200% of target. | | We engage✔ | | |
Independent Compensation Consultant: Our Compensation and Management Development Committee engages an independent compensation consultant that does not provide any other consulting or other services to the Company. | | | | |
Robust Stock Ownership Guidelines: To further align the interests of management with our stakeholders, we have stock ownership guidelines that require our executive officers to hold a significant multiple of their annual base salary in equity. | | Generally,✔ |
| | | | | What We Don’t Do | | | | |
Employment Agreements: Employment of our executive officers is “at will”; we have no executive-only perquisites such as company cars, security systemsdo not enter into employment agreements or financial planning.individual change in control agreements. | | ✘ | | |
Compensation Risks: We do not encourage excessive risk taking (we conduct annual formal enterprise risk assessments). | | ✘ | | |
Hedging and Pledging: We prohibit hedging and restrict pledging or borrowing against Company stock. | | ✘ | | |
Excise Tax Gross-Ups. We do not authorize excise tax gross-ups. | | ✘ |
2022 Advisory Vote on Executive Compensation We actively engage with our stockholders, seek their input and address questions and concerns. We maintain an open line of communication with investors on our compensation philosophy and practices and have consistently received say-on-pay support from our stockholders. The 2022 annual vote on an advisory resolution to approve the compensation of our NEOs passed with over 90% of the votes in favor. Our Compensation and Management Development Committee has considered the results of this vote and views this outcome as evidence of stockholder support of its executive compensation decisions and policies. Accordingly, we continued our general approach to compensation for 2023, specifically our pay-for-performance philosophy and our efforts to attract, retain, and motivate our executives. The Committee will continue to review the annual stockholder votes on our executive compensation and determine whether to consider any changes in light of the results. | | | | | | | | 39 | | 46 | | 20202023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Executive Compensation Objectives and Philosophy Ourpay-for-performance compensation philosophy is set by the Compensation and Management Development Committee. Our goal is to provide the compensation and incentives designed to attract and retain key executives with the qualifications to manage and lead the Company as well as to motivate them to develop professionally, contribute to the achievement of our financial goals and ultimately create and grow our equity value. Our compensation philosophy aligns our executives with our growth objectives via equity compensation and annual incentive compensation, the value of which is driven by our performance over the long and short term, respectively. All of our NEOs maintain a significant equity stake in the Company. To achieve these objectives, we provide executive pay programs that: Deliver competitive levels of compensation to attract, retain and motivate highly qualified executives; Foster a strong relationship between stockholder value and executive compensation by having a significant portion of compensation composed of long-term incentive awards; Emphasize performance-based compensation contingent upon achieving financial and business area performance goals; and Promote our core values: UnshakableUnshakeable Integrity; Genuine Care; Continuous Excellence; and Standout Citizenship. When designing the Company’s executive compensation plans and making individual compensation decisions, the Compensation and Management Development Committee considers several key principles: Cultivate long-term value creation without taking unnecessary risks; Combine both short- and long-term compensation to promote retention and create apay-for-performance environment;
| • | | Combine both short- and long-term compensation to promote retention and create a pay-for-performance environment; |
Emphasizeat-risk pay over fixed pay, yet create a positive work environment that rewards long-term achievements; and
| • | | Emphasize at-risk pay over fixed pay, yet create a positive work environment that rewards long-term achievements; and |
Motivate and reward for successfully executing our business strategies.strategies, including our ESG goals. Determination of Compensation Independent Review and Approval of Executive Compensation The Compensation and Management Development Committee oversees and approves key aspects of executive compensation, including salaries, corporate goals and individual objectives, payouts under the annual cash incentive plan, and the size and structure of long-term incentive awards for our NEOs. The Compensation Committee approves objectives designed to align executive pay with Company performance and stockholder interests and also seeks to provide competitive pay opportunities tied to performance and designed to retain talent, maximize stockholder value and mitigate material risk. The Compensation and Management Development Committee does not delegate any substantive responsibility related to the compensation of NEOs and exercises its independent judgment when approving executive compensation. No member of the Compensation Committee is a former or current officer of the Company or any of its subsidiaries. They are all independent under current NYSE listing standards.standards and for purposes of Section 10C(b) of the Exchange Act. The Compensation and Management Development Committee takes into accountconsiders the aggregate amount and mix of all components of compensation when considering compensation decisions affecting the CEO and other NEOs. The Compensation Committee considers many factors, including the advice of its independent compensation consultant, competitive market data, level of pay relative to the Company’s other executives, and the alignment of the Company’s total pay opportunity and pay outcomes with performance. The Compensation and Management Development Committee conducts an annual evaluation process of the CEO. The Compensation Committee determines and approves the annual salary, bonus, equity-based incentives and other benefits, direct and indirect, of the CEO. The CEO does not have a role in and is not present during discussions regarding his own compensation. The CEO traditionally has a role in setting the compensation for other NEOs by providing recommendations to the Compensation Committee. The Compensation Committee has the discretion to accept, reject or modify the CEO’s recommendations.
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
The Role of the Compensation and Management Development Committee’s Independent Consultant The Compensation and Management Development Committee has sole authority under its charter to retain advisors and consultants as it deems appropriate. The Compensation Committee has retained FPL,FPC, a nationally recognized leader in advising public REITs on executive compensation and related matters, as its compensation consultant. FPL
| | | | | | | | | |
| | 47 |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
FPC attends Compensation and Management Development Committee meetings, reviews compensation data with the Compensation Committee and participates in general discussions regarding executive compensation issues. FPLFPC reports to the Compensation Committee, and only at the Compensation Committee’s direction, will work with management to develop materials and analyses essential to the Compensation Committee’s executive compensation evaluations and determination. Such materials include competitive market assessments. FPL FPC regularly participates in executive sessions with the Compensation Committee (without any of the Company’s personnel or executives present) to discuss compensation matters. FPL does not provide any other services to
During 2022, Ferguson Partners L.P., an affiliate of FPC, was retained by the Company to provide a variety of recruitment services for management and has noBoard positions that, among other direct or indirect business relationshipsthings, resulted in the nomination of the two new members of our Board to stand for election at the Annual Meeting. The $341,700 of Ferguson Partners L.P.’s fees for these recruitment services in the calendar year 2022, when combined with $129,000, the amount of fees received by FPC from the Company for compensation consulting services, represent less than 2% of the aggregate revenues of FPC and its affiliates for calendar year 2022. None of our Board members were involved in the engagement by the Company of Ferguson Partners L.P. The decision to engage Ferguson Partners L.P. was made by management in the case of management positions’ search services and the Nominating and Corporate Governance Committee in the case of director search services. The Compensation and Management Development Committee assessed the independence of FPC in accordance with the Company. Taking theseapplicable rules of the SEC and the NYSE. After considering the foregoing, and other relevant factors, into account, the Compensation Committee has determined that it was appropriate to engage FPC as its compensation consultant and that the work performed by FPLFPC does not raise any conflicts of interest. Use of Peer Data We are always competing for the best talent in the marketplace. Accordingly, themarketplace which is not just limited to other public REITs, but also, private single family rental companies, real estate private equity and real estate fintech companies. The Compensation and Management Development Committee regularly reviews the market data and pay practices and ranges of our “peer” companies to ensure that we continue to offer a relevant and competitive executive pay program each year. As previously mentioned, while our benchmarking analyses focus on other public REITs, we compete for talent with many types of private single family rental companies, real estate private equity, and real estate fintech firms, among others, and are mindful of the design and opportunities across compensation programs that exist at other organizations. The Compensation Committee believes this allows the Company to successfully attract and retain the high-quality executive talent critical to the Company’s long-term success. The Compensation and Management Development Committee reviews the potential total compensation package for each of the executive officers against apre-selected peer group, consisting of other publicly traded REITs, based on data compiled by FPL.FPC. Consistent with the objectives of the Company’s executive compensation program, the Compensation Committee compares executive officer compensation against these peer companies to ensure that the Company attracts and retains highly qualified executive officers by providing a total executive compensation package that is competitive with those provided by the Company’s peers. FPL FPC assists the Compensation and Management Development Committee in selecting the Company’s peer group. Because there is only one public, single-family rental focused REIT of comparable size to us, only one of our direct competitors is appropriate for inclusion in our compensation peer group. To create a sufficiently robust data set by which to examine market competitive pay practices, FPL and the Compensation Committee selected other peers based on the following primary factors: (i) focus on residential operations; (ii) similarity of size in terms of total market capitalization (between0.5x-2.0x of our total market capitalization and such that we rank near the median of the peer group); and/or (iii) a national presence.
| | | | Guiding Factors for Selecting Our Peers | | | Public Single-Family Rental Focus | | While there is only one U.S. based public single family rental focused REIT of comparable size to us (American Homes 4 Rent), the Compensation and Management Development Committee selected other companies to create sufficiently robust data for our compensation peer group. | | | Ownership Structure and Business Model | | Companies organized as publicly traded REITs and companies with similar business models. | | | Size and Scope | | Companies which are similar in size (with a focus on residential operations), with the primary measure being equity market capitalization (between 0.5x-2.0x of our total market capitalization and such that we rank near the median of the peer group) and number of properties and breadth of portfolio. | | | Operational Intensity and Complexity | | Companies with a similar complexity of diverse business activities and geographic reach or companies engaged in transactions of a similar complex nature, such as development activities and joint ventures. | | | Index | | Companies classified within the FTSE Nareit Residential Index, as well as relative weighting within the Index. | | | Other Considerations | | Companies we compete with for investors, or which key analysts and proxy advisory firms name as a peer and which cite us as a peer. |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
Based on all of the foregoing factors, FPLFPC recommended the removal of American Investment and Management Company given they spun off most of their income producing properties in 2021, creating Apartment Income REIT (AIRC), thereby they fell below the size parameters that are used to select our peers. Apartment Investment and Management Company has since dropped out of the S&P 500 and we have since been added to the S&P 500. FPC recommended the addition of SBA Communications Corporation to the peer group. SBA Communications Corporation is another S&P 500 REIT that is a specialty/niche asset class within the REIT industry with a broad portfolio of properties and an appropriate size in terms of number of employees and capitalization. The Compensation and Management Development Committee approved the following peer group of REITs for competitive analyses of compensation that informed decisions on pay opportunities for our NEOs:NEOs. | | | | | | | | Peer Company Name | | Asset Focus | | | American Homes 4 Rent | | Single-Family Rental | Apartment Investment and Management Company
| | Multifamily
| AvalonBay Communities, Inc. | | Multifamily | | | Boston Properties, Inc. | | Office | | | Camden Property Trust | | Multifamily | | | Digital Realty Trust, Inc. | | Specialty | | | Equity Residential | | Multifamily | | | Essex Property Trust, Inc. | | Multifamily | | | Extra Space Storage Inc. | | Self-Storage | | | Healthpeak Properties, Inc. | | Health Care | | | Mid-America Apartment Communities, Inc. | | Multifamily | | | Realty Income Corporation | | Diversified | | | Regency Centers Corporation | | Shopping Center | | | SBA Communications Corporation | | Communications | | | Sun Communities, Inc. | | Specialty
Manufactured
Housing | | | UDR, Inc. | | Multifamily |
| | | | | | | | 41 | | | 2020 Proxy Statement
| | 49 |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
The peer group was adjusted in 2019 to remove GGP, Inc. due to its acquisition in 2018,In 2022, the Compensation and to add Sun Communities, Inc. Sun Communities, Inc. is the largest manufactured homes focused REIT, which is viewed as a specialty/niche residential sector like that of single-family rentals and is a constituent of the Nareit Residential Index.
In 2019, the CompensationManagement Development Committee reviewed compensation data for executives at the peer companies with positions comparable to those held by the NEOs. This data consisted of base salary, annual cash incentives, and equity award information (the latter two components on an actual and target basis), paid by each of the peer companies based on public filings as well as FPL’sFPC’s proprietary database, which also includes data from the Nareit Compensation Survey (which FPLFPC conducts). FPL’sFPC’s analysis concluded that the peer companies generally have compensation programs comparable to ours, with annual bonuses typically in the form of cash and long-term compensation typically in the form of both performance vesting and time vesting equity awards. The Compensation Committee generally uses the median levels of compensation within the peer group as an initial point of reference for setting pay and uses the market data provided by the peer group as one of several reference points useful for determining the form and amount of compensation; however, the Compensation Committee does not specifically target a percentile for benchmarking purposes and actual compensation paid may fluctuate above/below the median of the peer group based on the Company’s performance and achievement of the goals established by the Compensation Committee for the executive officers.paid. The Compensation Committee expects to review the peer group periodicallyannually and make changes as warranted and deemed appropriate. The below total capitalization data is as of December 31, 2022.
Elements of Compensation Our compensation program is heavily weighted towards performance-based compensation, reflecting our philosophy of increasing the long-term value of the Company, and supporting strategic and operational objectives, and incentivizing management to achieve those objectives.
| Executive Compensation—Compensation Discussion and Analysis (continued) |
For 2019,2022, the compensation framework had three main compensation program elements that assessed performance across a variety of goals and measured performance across an annual and multi-year performance period while preserving a substantial emphasis on performance-based pay. The performance-based components include a threshold, target and maximum opportunity for the annual cash incentive award and the performance vesting RSUs. The table below contains a design overview of the 20192022 executive compensation program.program (excluding equity awards under our 2022 Outperformance Program, as defined below). | | | | | | | | | | | | | | Element | | Form | | MetricsPurpose
| | Weighting and WeightingMetrics | | | Base Salary
| | Fixed Cash
| | | | Base Salary | | Fixed Cash | | To provide market-competitive levels of fixed pay to attract and retain executives. | | Fixed rate of pay utilized to attract and retain executivesexecutives. | | | | | | | | Annual Cash Incentive | | Performance-Based
Cash | | To motivate and reward the achievement of annual financial and other performance goals. | | 90% Corporate financial objectives (including AFFO per share, and Same Store Core Revenue Growth year-over-year)year-over-year, and Net Investment Growth)(1), and defined corporatestrategic priorities (including enhanced resident loyalty, completionan expansion of Merger integration, Run Rate Annualized Synergies asgrowth channels and exploring alternative sources of 2Q19, improved associate experiencecapital and expansion of market footprint, continued development of our ESG and climate strategy and enhanced IT risk management)transparency to external stakeholders, targeted external stakeholder engagement to build awareness and definedunderstanding of our business unit and operational objectivesindustry, and further technology enablement and improvement for residents and associates). | | | | | 10% Individual performance goalsperformance. | | | | | | | | Long-Term Incentive Award | | Performance Vesting
RSUs | | To motivate and reward long-term company performance that maximizes stockholder value and retain executives. | | 75% Forward-looking three-year performance period in which awards may be earned based 45% upon the compounded, annual growth rate (“CAGR”) of the Company’s total shareholder return (“TSR”)TSR relative to the MSCI US REIT Index (the “TSR Relative to RMS Index CAGR”) and 30% upon Same Store NOI(1) Growth CAGR; if earned at the end of the performance period, awards will be eligible to vest on the Certification Date (as defined below); if three-year absolute TSR is negative, TSR metric is capped at targettarget. | | | | | Time Vesting
RSUs | | 25% Awards vest ratably over three yearsyears. | | |
| (1) | See “Annex A: Non-GAAP Reconciliations” for reconciliation of Total Revenues to Same Store NOICore Revenues, full year. Net Investment Growth is defined as the percentage year-over-year changesum of total all in Net Operating Income (“NOI”) in our Same Store portfolio where NOI is calculated as described in our 2019 Form10-K under Part II. Item 7. “Management’scost basis for acquisitions for both the Company and its joint venture portfolios, less gross proceeds for dispositions for the Company portfolio. |
| | | | | | | | | |
| | 51 |
| Executive Compensation—Compensation Discussion and Analysis of Financial Condition and Results ofOperations—Non-GAAP Measures.”(continued) |
Alignment of Pay with Performance Our executive compensation program provides significant alignment between pay and performance by linking a meaningful portion of total compensation to the achievement of operational and strategic goals through our short-term incentive program, as well as rigorous relative shareholder return goals through our long-term incentive program.
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
In 2019,2022, approximately 70%72% of our CEO’s total target compensation and approximately 65%67% of our other NEOs’ total target compensation was performance-basedat-risk and not guaranteed and 30%28% and 35%33%, respectively, was fixed (including base salary and time-based RSU grants, the latter of which vest over a three-year period, with the ultimate value subject to our share performance). To build evenstronger pay-for-performance alignment with our shareholders,stockholders, long-term incentive awards arepredominantly “at-risk” performance-based equity awards, the ultimate value of which depends entirely on the Company’s future relative total shareholder return and three-year Same Store NOI growth. The following diagrams present the allocation of total pay among different components of our executive compensation program for our CEO and the weighted-averageweighted average of each component for our other NEOs as a group.group (excluding equity awards under our 2022 Outperformance Program). | | | 20192022 Target Pay Mix – CEO
| | 20192022 Target Pay Mix – Other NEOs (Avg.)
|  
| |  
|
Base Salary Base salary compensates our NEOs for performing the requirements of their positions and provides them with a level of cash income predictability and stability with respect to a portion of their total compensation. The Compensation and Management Development Committee believes that base salaries for our NEOs should reflect market competitive levels of pay and factors unique to each executive such as experience and breadth of responsibilities, performance, individual skill set, time in the role and pay relative to peers within the Company.peers. The Compensation Committee increased Mr. Tanner’s base salary in 20192022 from $525,000$900,000 to $950,000, Mr. Freedman’s base salary from $650,000 to $700,000, Mr. Young’s base salary from $650,000 to reflect his promotion$700,000 and Mr. Solls’ base salary from $475,000 to CEO effective January 16, 2019. The Committee adjusted 2019 salaries for our other NEOs$500,000 to reflect their servicesindividual performance and the performance of the Company and to adjust salaries to be in line with the market competitive levels. Base salaries for the NEOs as of December 31, 20182021 and 2019 are2022 were as follows: | | | | | | | | | | | | | Name | | 2018 | | | 2019 | | | % Change | | 2021 | | 2022 | | % Change | | | | | | Dallas B. Tanner | | $ | 525,000 | | | $ | 700,000 | | | 33% | | $900,000 | | $950,000 | | 6% | | | | | | Ernest M. Freedman | | $ | 600,000 | | | $ | 625,000 | | | 4% | | $650,000 | | $700,000 | | 8% | | | | | | Charles D. Young | | $ | 525,000 | | | $ | 575,000 | | | 10% | | $650,000 | | $700,000 | | 8% | | | | | | Mark A. Solls | | $ | 425,000 | | | $ | 450,000 | | | 6% | | $475,000 | | $500,000 | | 5% |
20192022 Annual Cash Incentive Program
In 2019,2022, our NEOs participated in an annual cash incentive program under which each of the executives was eligible to receive an annual cash incentive based upon the achievement of certain performance criteria. The goals were comprised of corporate goals,financial objectives and strategic priorities, which were shared by all NEOs, and business unitindividual performance, which included goals for all NEOs (other than Mr. Tanner, who as our CEO did not have a single business unit to oversee), which were unique to each executive. These goalswere pre-established, with the majority measured objectively. Each executive was also assigned individual goals for 2019. | | | | | | | | 43 | | 52 | | 20202023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Each of Messrs. Tanner’s, Freedman’s, Young’s and Solls’ total award opportunity under the 20192022 annual cash incentive program was designed to be based on the financial, corporate and individual objectivesperformance as set forth below: | | | | | | | | | | | | | | | | | | | | Dallas B. Tanner | | | Ernest M. Freedman | | | Charles D. Young | | | Mark A. Solls | | AFFO per Share | | | 35 | % | | | 25 | % | | | 25 | % | | | 25 | % | Same Store Core Revenue Growth year-over-year | | | 35 | % | | | 25 | % | | | 25 | % | | | 25 | % | Corporate Priorities | | | 20 | % | | | 20 | % | | | 20 | % | | | 20 | % | Business Unit Goals and Objectives | | | 0 | % | | | 20 | % | | | 20 | % | | | 20 | % | Individual Goals and Objectives | | | 10 | % | | | 10 | % | | | 10 | % | | | 10 | % | | | | | 100 | % | | | 100 | % | | | 100 | % | | | 100 | % |
| | | | | | | | | | | | | | AFFO per Share | | Same Store Core
Revenue Growth year-
over-year | | Net Investment Growth | | Strategic Priorities | | Individual Performance | | | | | | 30% | | 20% | | 20% | | 20% | | 10% |
The corporate financial objectives under the 20192022 annual cash incentive program consisted of: (1) Total AFFO per share (“AFFO per Share,” where AFFO and FFO are calculated as described in our 20192022 Form10-K, under Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Non-GAAP Measures”); and (2) Same Store Core Revenue Growth year-over-year. Seeyear-over-year (see “Annex A:Non-GAAP Reconciliations” for reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues, full year.year); and (3) Net Investment Growth (defined above). The corporatestrategic priorities under the 20192022 annual cash incentive program consisted of: (1) Run Rate Annualized Synergies ascontinued expansion of endgrowth channels including adding new business lines, exploring alternate sources of capital and expansion of our market footprint; (2) continued development of our ESG and climate strategy and enhanced transparency to external stakeholders; (3) targeted external stakeholder engagement to build awareness and understanding of our business and the second quarter 2019; (2) an enhanced resident loyalty, which was scored based on NPS; (3) improved associate experience, which was based onindustry; and (4) further technology enablement and improvement for residents and associates. The development of our ESG strategy is measured by, among other things, completion of various internal tasksa diversity pay equity review, performance against established targets for people of color at the manager level and metrics;above, performance against established targets for increasing our GRESB score, and (4) enhanced IT risk management, which was scored based on the completion of internal tasks.transparency to external stakeholders. The Compensation and Management Development Committee established specific performance goals for our NEOs within each of the above corporate metrics that contained a defined threshold (50%), target (100%), and maximum (150%(200%) opportunity. Our target level generally aligned with our budget, with a bandwidth from target in which the maximum opportunity requires a high degree of performance. Annual cash incentive scores were interpolated on a straight-line basis based on actual achievement between the threshold, target and maximum levels with no payout for any performance measure that did not achieve the threshold.Thethreshold.The diagrams below illustrate the specific goals across each corporate metric, which were established at the beginning of 2019,2022, as well as our actual results.  
 
| | | | | 2020 Proxy Statement | | 44 | | | | |
| | 53 |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
 
Business unit goals for Messrs. Freedman, Young and Solls were tied to the strategic initiatives each business unit was focused on for the fiscal year. For leaders who run multiple business units, an average of their scores is reflected. For example, Mr. Freedman’s goals included a combination of the business units which report into him or over which he has administrative oversight: Accounting, Financial Planning and Quantitative Analysis, Internal Audit, Investor Relations and Project Management. Business unit goals addressed growth and development areas specific to each leader, such as financial goals, integration-based initiatives, culture and talent development.
Mr. Tanner hadTanner’s individual performance, inclusive of his individual goals, which made up 10% of his 20192022 Annual Cash Incentive. His goals were tied to threefour key categories: be present, be innovativestrategy and be ready.vision; leadership; organization and management development; and external relationships. The first included goals associated with market visitssetting a five-year strategic plan to position the Company for continued long-term success and surveying of associate engagement.continued strong shareholder value. The second, leadership category, was to drive a culture that cultivates a strong sense of DE&I and is a place where associates can grow their careers. The third, organization and management development category, included ensuring the Company had a framework for proper succession planning and furthering Board discussion on the topic. Lastly, external relationships included the creationobjective to cultivate strong relationships with key stakeholders and to be viewed as a leader in the single family rental industry. Mr. Tanner’s achievements against his 2022 individual goals include: development of a strategy team to research, developmulti-year strategic plan; growth in external relationships and design new revenue opportunities and the last included the finalizationstrategic partnerships; continued community engagement; development of a three yearsuccession planning framework and continued discussions on the topic; exceptional leadership of our associates and increased associate engagement; and continued resiliency of our business plan for our technology vision including items such as a better customer experience portal, turn time efficiency,value-add systems and enhancements and personnel support. operations. For Messrs. Freedman, Young and Solls, individual goals were aligned with their respective business units’established by reference to our corporate strategy, which is designed to position the Company competitively and thereby deliver superior performance, and which should in turn create value for our stockholders and benefit our associates, residents and communities and ties to each NEO’s specific area of responsibility. These goals includingincluded financial performance, integrationproject-based milestones, optimization of processes, associate development and engagement, resident satisfaction and stockholder engagement. Our NEOs’ individual performance achievements, inclusive of their individual goals, included: Mr. Freedman: performed strongly against financial measures, including opportunistic refinancing of our debt in order to extend the maturity profile; successfully delivered on key strategic partnerships and deepened investor engagement; continued leadership on strategic joint ventures; and enhanced quarterly close and financial review policies and processes. Mr. Young: demonstrated operational excellence, including continued focus on execution of our operations; strengthened collaboration on and expanded Company ESG initiatives by, among other things, assisting in the energy development program; continued to build on our strong national brand; oversaw leadership of programs to improve resident satisfaction. Business unit (except for Operations)experience, such as our move-in processes, as well as our “Clean, Safe and Functional” rehab and turn campaign, thereby driving resident satisfaction; and demonstrated progress in attracting, developing, and retaining diverse talent.
Mr. Solls: maintained a strong risk, control, and compliance environment and enhanced our ability to detect and monitor internal risks; provided legal oversight on acquisitions and joint ventures; led advocacy efforts on all matters affecting our Company; enhanced business continuity support, governance, and incident response; developed new capabilities to monitor legislative and regulatory developments and align business processes with applicable federal, state and local laws and regulations; and successfully demonstrated progress in attracting, developing, and retaining diverse talent. In 2022, individual goalperformance scores were based on a subjective assessmentnew three-rating qualitative scale of needs improvement, solid performance or exceptional performance, which then corresponded to an applicable range of1-5. In the case of Operations, business unit goal scores were based on operational metric performance vs. target including: average occupancy (as defined in our 2019 Form10-K under “Defined Terms”), net effective rental rate growth (as defined in our 2019 Form10-K under “Defined Terms”), net total cost to maintain (represents the sum of recurring repairs and maintenance and recurring turnover expenses net of resident reimbursements and recurring capital expenditures) and days tore-resident (as defined in our 2019 Form10-K under “Defined Terms”). All metrics were potential achievement for the Same Store portfolio. Annual
| Executive Compensation—Compensation Discussion and Analysis (continued) |
annual cash incentive scoresincentive. Associates who were interpolated on a straight-line basis based on actualrated needs improvement could have been awarded 0-50% achievement, betweenthose rated solid performance, 90-110% achievement and those with exceptional performance, 130-200% achievement for the threshold, target and maximum levels with no payout for anyindividual performance measure that did not achievecomponent of the threshold.annual cash incentive. In February 2020,2022, the Compensation and Management Development Committee determined the results of the individual performance objectives for Mr. Tanner. Individual performance goalsscores for each other NEO other than himself were reviewed and scored by Mr. Tanner and ultimately approved by the Compensation Committee. Based on these individual performance scores and the achievement of the corporate and business performancefinancial objectives set forth above, the Compensation Committee approved the following 20192022 actual annual incentive awards:awards based on the 2022 annual incentive plan design discussed previously: | Name | | Target | | | Target Award (% of
FYE BaseSalary) | | Actual Cash
Incentive as a
% of Target | | Amount Earned | | | | | | | | | | Target(1) | | Target Award (%
of FYE Base
Salary) | | Actual Cash
Incentive as a % of Target | | Amount Earned | | | | Dallas B. Tanner | | $ | 1,050,000 | | | 150% | | 110.6% | | | $1,161,566 | | | $1,662,500 | | 175% | | 74% | | $1,180,876 | | | | Ernest M. Freedman | | $ | 781,250 | | | 125% | | 114.5% | | | $ 894,245 | | | $ 875,000 | | 125% | | 74% | | $ 635,154 | | | | Charles D. Young | | $ | 718,750 | | | 125% | | 109.2% | | | $ 785,233 | | | $ 875,000 | | 125% | | 74% | | $ 635,154 | | | | Mark A. Solls | | $ | 450,000 | | | 100% | | 107.7% | | | $ 484,467 | | | $ 500,000 | | 100% | | 74% | | $ 364,462 |
| (1) | | | | | | | 45 | | 2020 Proxy Statement |
| Executive Compensation—Compensation Discussion and Analysis(continued)
Based on salary as of December 31, 2022. |
The below chart represents average NEO annual cash incentive payouts by year from 2018-2022, as well as the average payout over the five-year period. 2019
2022 Long-Term (Equity) Incentive Program On February 27, 2019,15, 2022, the Compensation and Management Development Committee approved a 20192022 long-term incentive stockequity award program (the “2019“2022 LTIP”) under the Invitation Homes Inc. 2017 Omnibus Incentive Plan (the “Incentive“Omnibus Incentive Plan”), and as of March 1, 2019,2022, granted our NEOs equity-based awards in the form of time vesting RSUs and performance vesting RSUs. When considering the design of the 20192022 LTIP, the Compensation Committee incorporated several key design practices: A majority (75%) is performance-based; Awards are capped at target to the extent the Company’s TSR is negative across the performance period; and We also provide for a portion of our awards that aid in long-term retention (time-based). | | | | | | | | | |
| | 55 |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
For each individual award, 75% of the 20192022 LTIP RSUs at target are based on performance, of which 45% are tied to the TSR Relative to RMS Index CAGR (with a cap at target if the Company’s absolute TSR is negative) and 30% are tied to the Company’s Same Store NOI Growth CAGR. The Compensation and Management Development Committee set goals which are reasonably achievable but challenging. 
The time vesting RSUs under the 20192022 LTIP are scheduled to vest in equal annual installments on each of the first three anniversaries of March 1, 2019,2022, subject to each NEO’s continued employment through the applicable vesting date, with certain limited exceptions. The performance vesting RSUs under the 20192022 LTIP may be earned based on the achievement of performance conditions over a three-year performance period from January 1, 20192022 through December 31, 2021.2024. The number of performance vesting RSUs that may be earned will be determined based on performance achieved during the specified performance period. The performance vesting RSUs may be earned based on two performance measures: (1) the TSR Relative to RMS Index CAGR for the performance period; and (2) the Company’s Same Store NOI Growth CAGR. Under the terms of the 20192022 LTIP award agreements, each of our NEOs is eligible to earn, in respect of each performance condition, a threshold, target and maximum number of performance vesting RSUs based on whether the performance criteria are achieved at threshold, target or maximum levels. The total number of performance vesting RSUs earned with respect to each performance measure is based on an achievement factor which, in each case, ranges from a 0% payout for below threshold performance, to 50% for threshold performance, to 100% for target performance and up to 200% for performance at maximum levels or above. The resulting achievement will be interpolated on a straight-line basis based on actual achievement between the threshold, target and maximum levels with no payout for any performance measure that did not achieve the threshold. In general, performance vesting RSUs are earned on the date after the end of the performance period on which the Compensation and Management Development Committee certifies the extent to which the performance criteria have been achieved (the “Certification Date”). The performance vesting RSUs will vest on the Certification Date, subject to each NEO’s continued employment through such Certification Date except in the event of a qualifying involuntary termination. Any unearned performance vesting RSUs will be forfeited without consideration. | | | | | 2020 Proxy Statement | | 46 | | | | 56 | | 2023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Under the 20192022 LTIP, the Compensation and Management Development Committee granted time vesting and performance vesting RSUs to our NEOs in the following amounts (the number of performance vesting RSUs below reflects the number of shares at target), with the actual number of shares to be earned based on the actual achievement of the performance criteria described above. | Name | | Performance Vesting RSUs(1) (Target)
(#) | | | Time Vesting RSUs(1)
(#) | | | | | | | | | | Performance Vesting RSUs(1)
(Target) (#) | | Time Vesting
RSUs(1) (#) | | | | Dallas B. Tanner | | | 67,267 | | | | 24,682 | | | 146,833 | | 47,647 | | | | Ernest M. Freedman | | | 47,834 | | | | 17,552 | | | 49,887 | | 16,189 | | | | Charles D. Young | | | 47,834 | | | | 17,552 | | | 49,887 | | 16,189 | | | | Mark A. Solls | | | 20,928 | | | | 7,679 | | | 18,516 | | 6,009 |
| (1) | The closing price of our common stock on the NYSE on the grant date of March 1, 2022, was $37.45. Conversion to RSUs for the TSR component of the award assumes a TSR valuation factor of 95.66% for NEOs. |
Status of Pre-2022 Long-Term (Equity) Incentive Programs 2019 LTIP Awards In February 2019, the Compensation and Management Development Committee approved our 2019 long-term incentive equity award program (the “2019 LTIP”), under the Omnibus Incentive Plan, comprising equity-based awards in the form of time vesting RSUs and performance vesting RSUs. The time vesting RSUs under the 2019 LTIP vested in equal annual installments on each of the first three anniversaries of March 1, 2019. The performance vesting RSUs under the 2019 LTIP were earned based on the achievement of performance conditions over a three-year performance period from January 1, 2019 through December 31, 2021. The number of performance vesting RSUs that were earned were determined based on performance achieved during the specified performance period. The performance vesting RSUs were earned based on two performance measures: (1) the TSR Relative to RMS Index CAGR for the performance period; and (2) the Company’s Same Store NOI Growth CAGR. Actual performance for the two metrics included were as follows: | | | | | | | | | | | 2019 LTIP | | Target | | Achievement | | Payout | | | | | TSR Relative to RMS Index CAGR | | +50bps | | +1490bps | | 200% | | | | | Same Store NOI Growth CAGR | | 4% | | 6.2% | | 200% |
The performance vesting RSUs vested on the Certification Date. Any unearned performance vesting RSUs were forfeited without consideration. Under the 2019 LTIP, the Compensation and Management Development Committee granted time vesting and performance vesting RSUs to our NEOs in the following amounts (the number of performance vesting RSUs at target and at the actual achievement of the performance criteria described above). | | | | | | | | | | | | | | | | | | | | Name | | Performance
Vesting RSUs(1)
(Target) (#) | | Actual Achievement
of Performance
Vesting RSUs(2) (#) | | Time Vesting
RSUs(1) (#) | | | | | Dallas B. Tanner | | | | 67,267 | | | | | 134,534 | | | | | 24,682 | | | | | | Ernest M. Freedman | | | | 47,834 | | | | | 95,668 | | | | | 17,552 | | | | | | Charles D. Young | | | | 47,834 | | | | | 95,668 | | | | | 17,552 | | | | | | Mark A. Solls | | | | 20,928 | | | | | 41,856 | | | | | 7,679 | |
| (1) | The closing price of our common stock on the NYSE on the grant date, March 1, 2019, was $22.79. Conversion to RSUs for the TSR component of the award assumes a TSR valuation factor of 118.01% for NEOs. |
2019One-Time Outperformance Equity-Based
| (2) | Performance vesting RSUs vested on February 15, 2022 based on actual performance of 200% for TSR Relative to RMS Index CAGR and Same Store NOI Growth CAGR. |
2020 LTIP Awards On May 1, 2019,In February 2020, the Compensation and Management Development Committee approved aone-time outperformance program (“Outperformance Program”) to provide incentive to achieve significant long-term, absolute and relative stock performance. The award is capped to prevent excessive risk taking. Outperformance Program equity-based awards were granted to select key associates starting at a vice-president level and above, including the NEOs. The NEO awards were granted in the form of a class of units (collectively referred to as “OP Units”) of the Company’s operating partnership, Invitation Homes Operating Partnership LP (the “Operating Partnership”), issued under our Incentive Plan. If the specific performance objectives of the Outperformance Program are achieved, the earned OP Units become convertible into common units of the Operating Partnership (and ultimately into shares of our common stock at NEOs’ election) following vesting. The Outperformance Program awards are earned and payable only when performance exceeds hurdles as measured by three-year TSR and requires outperforming an index of residential REITs (in which the Company is a constituent) and/or positive double-digit stockholder returns. If the performance objectives are not met, the OP Units will be cancelled.
What Makes the Outperformance Program Unique Compared to Other Long-Term Incentive Plans
The Compensation Committee believes the Outperformance Program incorporates several unique design features that distinguish its2020 long-term incentive design from our ongoing annual LTIP program and that of many other companies, such as:
Dollar Value Pool-Based Award — The Outperformance Program extends participation to approximately 50 select key associates and is capped based on a dollar value pool approach. Unlike grants of performance shares that have unlimited upside value potential based on future stock price, the Outperformance Program is capped in its value.
Five-Year Total Vesting Requirement — The Outperformance Program is subject to long-term vesting to promote enhanced retention in addition to significant shareholder value creation. Any award ultimately earned does not fully vest until five years from program commencement.
| • | | Robust Performance Goals — The Compensation Committee believes in establishing robust performance goals to motivate and reward long-term performance that leads to transformational change in support of creating increased shareholder value. To that end, the performance goals were established at a level that will award a minimum payout of 1% with respect to the TSR portion of the award (50% of the total award) if the Company achieves a 17% cumulative TSR and a minimum payout of 1% with respect to the relative TSR portion of the award (50% of the total award) if the Company outperforms the FTSE Nareit Residential Index. A maximum payout of 100% will be awarded under the Outperformance Program only if the Company realizes both a cumulative three-year 37% TSRand relative performance that exceeds the FTSE Nareit Residential Index by 25%. Performance between the minimum and maximum levels is determined based on linear interpolation.
|
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
Below is a summary of the key terms of the Outperformance Program:
| | | | | | | | Feature
| | Description
| | Objective
| | | | Performance Period
| | Three-year period from April 1, 2019 — March 31, 2022
| | Incentivizes executives to create value over the long term.
| | | | Absolute TSR Component
| | To earn the maximum award, the Company must deliver a cumulative TSR of 37% over the performance period.
| | Ensures executives create value for shareholders over the long term.
| | | | Relative TSR Component
| | To earn the maximum award, the Company must outperform the FTSE Nareit Residential Index by 25% over the performance period.
| | Prevents a high payout in the case of underperformance relative to peers.
| | | | Vesting
| | — 50% of earned awards vest within 60 days subsequent to the conclusion of the performance period
— 25% of Earned Awards vest on the first anniversary of the conclusion of the performance period
— 25% of Earned Awards vest on the second anniversary of the conclusion of the performance period
| | Promotes continued alignment of incentives between shareholders and plan participants over the long term.
|
Outperformance Program Award Opportunity
The table below illustrates the value of the Outperformance Program awards in aggregate based on the maximum award value, a 50% payout and on an annualized basis.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Outperformance
Program Award
Pool Percentage | | Aggregate Award
Opportunity | | Annualized Award
Opportunity | NEO | | 50% Payout | | Maximum
Award Value | | 50% Payout | | Maximum
Award Value | | | | | | | Dallas B. Tanner | | 16.6% | | | $ | 3,000,000 | | | | $ | 6,000,000 | | | | $ | 1,000,000 | | | | $ | 2,000,000 | | | | | | | | Ernest M. Freedman | | 12.4% | | | $ | 2,254,688 | | | | $ | 4,509,375 | | | | $ | 751,563 | | | | $ | 1,503,125 | | | | | | | | Charles D. Young | | 12.0% | | | $ | 2,170,313 | | | | $ | 4,340,625 | | | | $ | 723,438 | | | | $ | 1,446,875 | | | | | | | | Mark A. Solls | | 6.6% | | | $ | 1,200,000 | | | | $ | 2,400,000 | | | | $ | 400,000 | | | | $ | 800,000 | |
The values under the annualized award opportunity have been amortized over the three-year performance period to provide a depiction of the way the Compensation Committee views each NEO’s participation in this one-time program.
In order to provide supplemental information showing the compensation of our NEOs without the Outperformance Program award, we are providing a supplemental table below. This supplemental table follows a similar format to the Summary Compensation Table as required by the SEC for our NEOs except that, as noted in the table, the “Stock Awards” column excludes the Outperformance Program awards, the grant date fair values of which are included in a separate column, and we have included two “Total Compensation” columns, one including and one excluding the One-Time Outperformance award.
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
Fiscal 2019 Supplemental Compensation Table
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Years | | Salary ($) | | Bonus
($) | | Stock Awards
(Excluding
Outperformance
Program Award) ($) | | Options
Awards
($) | | Non-Equity
Incentive Plan
Compensation
($) | | All Other
Compensation
($) | | Total
Compensation
(Excluding
Outperformance
Program Award) ($) | | Outperformance
Program Award(1) ($) | | Total
Compensation
(Including
Outperformance
Program Award) ($) | | | | | | | | | | | | Dallas B. Tanner | | | | 2019 | | | | $ | 700,000 | | | | | — | | | | $ | 2,250,043 | | | | | — | | | | $ | 1,161,566 | | | | $ | 11,200 | | | | $ | 4,122,809 | | | | $ | 2,168,406 | | | | $ | 6,291,215 | | (President and Chief Executive Officer) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Ernest M. Freedman | | | | 2019 | | | | $ | 625,000 | | | | | — | | | | $ | 1,600,033 | | | | | — | | | | $ | 894,245 | | | | $ | 11,200 | | | | $ | 3,130,478 | | | | $ | 1,629,688 | | | | $ | 4,760,166 | | (Executive Vice President and Chief Financial Officer) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Charles D. Young | | | | 2019 | | | | $ | 575,000 | | | | | — | | | | $ | 1,600,033 | | | | | — | | | | $ | 785,233 | | | | $ | 11,200 | | | | $ | 2,971,466 | | | | $ | 1,568,703 | | | | $ | 4,540,169 | | (Executive Vice President and Chief Operating Officer) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Mark A. Solls | | | | 2019 | | | | $ | 450,000 | | | | | — | | | | $ | 700,029 | | | | | — | | | | $ | 484,467 | | | | $ | 11,200 | | | | $ | 1,645,696 | | | | $ | 867,368 | | | | $ | 2,513,064 | | (Executive Vice President and Chief Legal Officer) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | The stock award values reflected in the table above for 2019 for the Outperformance Program award represent the grant date fair value in respect of the performance vesting RSUs related to TSR relative to the FTSE Nareit Residential Index and absolute TSR associated with our Outperformance Program award’s notional value for each NEO.
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Earning and Vesting of Outperformance Program Awards
The following chart illustrates the timeline of theone-time Outperformance Program awards.
Status ofPre-2019 Long-Term Incentive Award Programs
Pre-IPO Supplemental Bonus
In October 2016, we established a supplemental bonus plan for several key executives and employees, including Messrs. Tanner, Freedman and Solls, which plan was further modified in connection with the IPO (the“Pre-IPO Supplemental Bonus”). Under thisPre-IPO Supplemental Bonus, we made cash awards to each of Messrs. Tanner, Freedman and Solls in the amount of approximately $2.0 million, $5.3 million and $1.9 million, respectively. Following the IPO, we converted all of these cash awards into RSUs issued under our Incentive Plan. The number of RSUs issued in respect of each award was equal to the award amount divided by $20.00, the per share price of our common stock sold to the public in the IPO.
As to Mr. Tanner and Mr. Solls, all of the RSUs under thePre-IPO Supplemental Bonus vested in three equal annual installments, with the first tranche vesting on the February 6, 2017 completion of the IPO, and the second and third tranches vesting, respectively, on the first and second anniversaries thereafter.
As to Mr. Freedman, hisPre-IPO Supplemental Bonus RSUs vested 80% upon the February 6, 2017 completion of the IPO, and the remaining 20% vested on August 6, 2018, 18 months after the completion of our IPO.
All of thePre-IPO Supplemental Bonus shares have vested as of December 31, 2019.
2017 LTIP
In connection with our transition from being privately held to publicly traded in February 2017, the Compensation Committee approved a long-term incentiveequity award program (the “2017“2020 LTIP”). The 2017 LTIP provided for the grant of
| Executive Compensation—Compensation Discussion and Analysis(continued)
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equity-based awards to several key employees, including Messrs. Tanner, Freedman and Solls. The awards were granted, under the Omnibus Incentive Plan, andcomprising equity-based awards in the form of time vesting RSUs and performance vesting RSUs. Each award of 2017 LTIP RSUs was divided into three tranches (“Tranche 1,” “Tranche 2” and “Tranche 3”) and, within each tranche, 25% of the award consisted of time vesting RSUs and 75% consisted of performance vesting RSUs. Tranche 1 time vesting RSUs vested on the first anniversary of the vesting start date. Tranche 2 time vesting RSUs vested in equal installments on each of the first and second anniversaries of the vesting start date, and Tranche 3 vested or will vest in equal installments on each of the first four anniversaries of the vesting start date.
The 2017 LTIP performance vesting RSUs were earned based on the achievement of performance measures over approximateone-,two- or three-year performance periods, which performance periods correspond, respectively, to the Tranche 1, Tranche 2 and Tranche 3 RSUs. The number of 2017 LTIP performance vesting RSUs earned was determined based on performance achieved during the specified performance period. Within each tranche, the 2017 LTIP performance vesting RSUs may be earned based on three equally weighted performance measures: (1) the CAGR of the Company’s shareholder return (“2017 LTIP Absolute TSR”); (2) the Company’s Same Store NOI CAGR; and (3) the Company’s AFFO per Share Growth CAGR.
| | | | | | | | | | | | | | | | | Performance Measure
| | Tranche 1
Performance Period | | | Tranche 2
Performance Period | | | Tranche 3
Performance Period | | 2017 LTIP Absolute TSR(1)
| | | January 31, 2017 –
December 31, 2017
| | |
| January 31, 2017 –
December 31, 2018
|
| |
| January 31, 2017 –
December 31, 2019
|
| Same Store NOI Growth CAGR
| |
| January 1, 2017 –
December 31, 2017
|
| |
| January 1, 2017 –
December 31, 2018
|
| |
| January 1, 2017 –
December 31, 2019
|
| AFFO per Share Growth CAGR
| |
| January 1, 2017 –
December 31, 2017
|
| |
| January 1, 2017 –
December 31, 2018
|
| |
| January 1, 2017 –
December 31, 2019
|
|
(1) | Our common stock began trading on the NYSE on February 1, 2017. Accordingly, the commencement of the performance period for the 2017 LTIP performance vesting RSUs that vest based on 2017 LTIP Absolute TSR reflects the period following which 2017 LTIP Absolute TSR can be measured.
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The performance period for Tranche 3 of our 2017 LTIP ended on December 31, 2019 with total achievement on the performance vesting RSUs of approximately 140%. 50% of the performance vesting RSUs vested on February 21, 2020, and the remaining performance vesting RSUs will vest on December 31, 2020. Actual performance for the three metrics included in the tranche was as follows:
| | | | | | | | | | | Tranche 3 LTIP | | Target | | Achievement | | Payout | 2017 LTIP Absolute TSR CAGR | | 8.5% | | 16.3% | | 200% | Same Store NOI Growth CAGR | | 6.0% | | 5.8% | | 93% | AFFO per Share Growth CAGR | | 14.5% | | 15.9% | | 128% |
The performance period for Tranche 2 of our 2017 LTIP ended on December 31, 2018 with total achievement on the performance vesting RSUs of approximately 80%. Actual performance for the three metrics included in the tranche were as follows:
| | | | | | | | | | | Tranche 2 LTIP | | Target | | Achievement | | Payout | 2017 LTIP Absolute TSR CAGR | | 8.5% | | 3.8% | | 0% | Same Store NOI Growth CAGR | | 6.0% | | 5.9% | | 97% | AFFO per Share Growth CAGR | | 17.5% | | 20.0% | | 142% |
The performance period for Tranche 1 of our 2017 LTIP ended on December 31, 2017 with total achievement on the performance vesting RSUs of approximately 143%. Actual performance for the three metrics included in the tranche was as follows:
| | | | | | | | | | | Tranche 1 LTIP | | Target | | Achievement | | Payout | 2017 LTIP Absolute TSR CAGR | | 8.5% | | 20.9% | | 200% | Same Store NOI Growth CAGR | | 7.0% – 7.6% | | 7.4% | | 100% | AFFO per Share Growth CAGR | | 24.0% – 28.0% | | 29.7% | | 128% |
| Executive Compensation—Compensation Discussion and Analysis(continued)
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Retention RSUs
On June 23, 2017, the Board, upon recommendation of the Compensation Committee, granted to each of Messrs. Tanner and Freedman 138,122 time vesting RSUs (collectively, the “Retention RSUs”). As more fully described below, each of such NEOs’ 69,061 Retention RSUs vested on May 16, 2019, the date that was 18 months from the closing date of the Merger. The remaining portion of each such NEOs’ time vesting RSUs, will vest on June 19, 2021, subject to the NEO’s continued employment through that date.
2018 LTIP Awards
The time vesting RSUs under the 20182020 LTIP are scheduled to vestvested in equal annual installments on each of the first three anniversaries of March 1, 2018, subject to each NEO’s continued employment through the applicable vesting date, with certain limited exceptions.2020. | | | | | | | | | |
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| Executive Compensation—Compensation Discussion and Analysis (continued) |
The performance vesting RSUs under the 20182020 LTIP may be earned based on the achievement of performance conditions over a three-year performance period from January 1, 20182020 through December 31, 2020.2022. The number of performance vesting RSUs that may be earned will bewere determined based on performance achieved during the specified performance period. The performance vesting RSUs that were earned were based on two performance measures: (1) the TSR Relative to RMS Index CAGR for the performance period; and (2) the Company’s Same Store NOI Growth CAGR. Actual performance for the two metrics included were as follows: | | | | | | | | | | | | | | | | | | | | 2020 LTIP | | Target | | Achievement | | Payout | | | | | TSR Relative to RMS Index CAGR | | +50bps | | +260bps | | 138% | | | | | Same Store NOI Growth CAGR | | 4.5% | | 6.9% | | 200% |
The performance vesting RSUs vested on the Certification Date. Any unearned performance vesting RSUs were forfeited without consideration. Under the 2020 LTIP, the Compensation and Management Development Committee granted time vesting and performance vesting RSUs to our NEOs in the following amounts (the number of performance vesting RSUs at target and at the actual achievement of the performance criteria described above). | | | | | | | | | | | | | | | | | | | | Name | | Performance
Vesting RSUs(1)
(Target) (#) | | Actual
Achievement of
Performance
Vesting RSUs(2) (#) | | Time Vesting
RSUs(1) (#) | Dallas B. Tanner | | 83,621 | | 137,985 | | 30,361 | Ernest M. Freedman | | 39,216 | | 64,711 | | 14,238 | Charles D. Young | | 39,216 | | 64,711 | | 14,238 | Mark A. Solls | | 18,455 | | 30,453 | | 6,701 |
| (1) | The closing price of our common stock on the NYSE on the next trading date following the grant date of March 1, 2020, was $29.85. Conversion to RSUs for the TSR component of the award assumes a TSR valuation factor of 115.81% for NEOs. |
| (2) | Performance vesting RSUs vested on February 23, 2023 based on actual performance of 138% and 200% for TSR Relative to RMS Index CAGR and Same Store NOI Growth CAGR, respectively. |
2021 LTIP Awards In February 2021, the Compensation and Management Development Committee approved our 2021 long-term incentive equity award program (the “2021 LTIP”), under the Omnibus Incentive Plan, comprising equity-based awards in the form of time vesting RSUs and performance vesting RSUs. The time vesting RSUs under the 2021 LTIP vested in equal annual installments on each of the first three anniversaries of March 1, 2021. The performance vesting RSUs under the 2021 LTIP may be earned based on the achievement of performance conditions over a three-year performance period from January 1, 2021 through December 31, 2023. The performance vesting RSUs may be earned based on two performance measures: (1) the TSR Relative to RMS Index CAGR for the performance period; and (2) the Company’s Same Store NOI Growth CAGR. In general, performance vesting RSUs are earned on the Certification Date. The performance vesting RSUs will vest on the Certification Date, subject to each NEO’s continued employment through such Certification Date except in the event of a qualifying involuntary termination. Any unearned performance vesting RSUs will be forfeited without consideration. Under the 20182021 LTIP, the Compensation and Management Development Committee granted time vesting and performance vesting RSUs to our NEOs in the following amounts (the number of performance vesting RSUs below reflects the number of shares at target), with the actual number of shares to be earned based on the actual achievement of the performance criteria described above. | | | | | | | | | | | Name | | Performance Vesting RSUs(1) (Target)
(#) | | Time Vesting RSUs(1)
(#) | | Performance
Vesting RSUs(1) (Target) (#) | | Time Vesting
RSUs(1) (#) | Dallas B. Tanner | | | | 47,912 | | | | | 17,116 | | | 166,741 | | 55,423 | Ernest M. Freedman | | | | 47,912 | | | | | 17,116 | | | 46,175 | | 15,348 | Charles D. Young | | | | 47,912 | | | | | 17,116 | | | 46,175 | | 15,348 | Mark A. Solls | | | | 15,972 | | | | | 5,706 | | | 21,164 | | 7,035 |
| (1) | The closing price of our common stock on the NYSE on the grant date of March 1, 2018,2021, was $21.91.$29.32. Conversion to RSUs for the TSR component of the award assumes a TSR valuation factor of 112.55%99.53% for all NEOs. |
2018 Supplemental Bonus Award
| Executive Compensation—Compensation Discussion and Analysis (continued) |
On February 28, 2018, the Compensation Committee granted to each of Messrs. Tanner, Freedman, Young and Solls aone-time supplemental award of 18,257, 18,257, 18,257 and 9,129 time vesting RSUs, respectively (collectively, the “2018 Supplemental Bonus Award”), in recognition of their leadership efforts towards the successful completion of the Merger and the ongoing work on the integration of the two companies’ businesses and operations. These RSUs generally vest in equal annual installments on each of the first three anniversaries of March 1, 2018, subject to each NEO’s continued employment through the applicable vesting date.
RSU Dividends Holders of time vesting RSUs and earned performance vesting RSUs are entitled to receive dividends or dividend equivalent payments, as applicable, to the extent dividends are declared on the Company’s common stock. Such dividends or dividend equivalent payments, as applicable, are payable on the same date and in the same form as are paid to holders of the Company’s common stock. Unearned performance vesting RSUs accrue dividend equivalents, but such dividend equivalents will only be paid to the extent the underlying performance vesting RSUs are earned and, once earned, are payable in the same form as that paid to the Company’s holders of common stock. To date, all dividends declared on the Company’s common stock were paid in cash.
| Executive Compensation—Compensation Discussion and Analysis(continued)
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RSU Covenants Each of the NEO grantees of the RSUs is subject to restrictive covenants related to post-employmentnon-solicitation andnon-competition for twelve months following any termination of employment and indefinite covenants covering trade secrets, confidentiality andnon-disparagement. Under the LTIP award agreements, if there is a restrictive covenant violation or the NEO engages in a detrimental activity (as defined in the applicable LTIP award agreement) in the four-year period following the grant date, the NEO will be required to pay the Company an amount equal to theafter-tax proceeds received upon the sale or disposition of the equity award and any shares issued in respect thereof. In addition, the LTIP RSUs are subject to clawback in the event of a restatement of the Company’s financial results due to the executive’s fraud or intentional illegal conduct where such restatement results in fewer earned performance vesting RSUs. 20202019 Outperformance Equity-Based Awards
In May 2019, the Compensation and Management Development Committee approved an outperformance program (the “2019 Outperformance Program”) to provide incentive to achieve significant long-term, absolute and relative stock performance. The award was capped to prevent excessive risk taking. 2019 Outperformance Program equity-based awards were granted to select key associates starting at a vice-president level and above, including the NEOs. The NEO awards were granted in the form of a class of units (collectively referred to as “OP Units”) of the Company’s operating partnership, Invitation Homes Operating Partnership LP (the “Operating Partnership”), issued under our Omnibus Incentive Plan. Upon achievement of the specific performance objectives of the Outperformance Program, the earned OP Units became convertible into common units of the Operating Partnership (and ultimately into shares of our common stock at the NEOs’ election on a one-for-one basis) following vesting. The 2019 Outperformance Program awards were earned when performance exceeded hurdles as measured by three-year TSR and required outperforming an index of residential REITs (in which the Company is a constituent) and/or positive double-digit stockholder returns. 75% of the OP Units under the 2019 Outperformance Program are currently vested with the remaining 25% scheduled to vest on March 31, 2024. Below is a summary of the key terms of the 2019 Outperformance Program: | | | | | | | | Feature | | Description | | Objective | | | | Performance Period | | Three-year period from April 1, 2019 — March 31, 2022. | | Incentivized executives to create value over the long term. | | | | Absolute TSR Component | | To earn the maximum award, the Company must deliver a cumulative TSR of 37% over the performance period. | | Ensured executives create value for stockholders over the long term. | | | | Relative TSR Component | | To earn the maximum award, the Company must outperform the FTSE Nareit Residential Index by 25% over the performance period. | | Prevented a high payout in the case of underperformance relative to peers. | | | | Vesting | | — 50% of earned awards vest within 60 days subsequent to the conclusion of the performance period. — 25% of Earned Awards vest on the first anniversary of the conclusion of the performance period. — 25% of Earned Awards vest on the second anniversary of the conclusion of the performance period. | | Promoted continued alignment of incentives between stockholders and plan participants over the long term. |
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| Executive Compensation—Compensation Discussion and Analysis (continued) |
2019 Outperformance Program Award Opportunity The table below provides the maximum value of the 2019 Outperformance Program award opportunity and the actual performance achieved at the end of the performance period. The company achieved absolute TSR of 78.8% which translates into an absolute TSR payout of 100% or maximum award performance. Compared to the FTSE Nareit Residential Index TSR of 50.9%, the resulting TSR ratio is 154.8%, and thus the relative payout is 100% or maximum award performance. As such, the overall payout for the award is 100% or maximum award performance. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2019 Outperformance
Program Award
Pool Percentage | | Maximum
Aggregate
Award
Opportunity | | Actual Achievement ($) | | 2022 Vesting ($) | | Actual
Achievement
(#) | | 2022 Vesting (#) | | | | | | | | Dallas B. Tanner | | 16.6% | | $6,000,000 | | $6,000,000 | | $3,000,000 | | 147,204 | | 73,602 | | | | | | | | Ernest M. Freedman | | 12.4% | | $4,509,375 | | $4,509,375 | | $2,254,688 | | 110,633 | | 55,316 | | | | | | | | Charles D. Young | | 12.0% | | $4,340,325 | | $4,340,325 | | $2,170,163 | | 106,493 | | 53,246 | | | | | | | | Mark A. Solls | | 6.6% | | $2,400,000 | | $2,400,000 | | $1,200,000 | | 58,882 | | 29,441 |
The following chart illustrates the timeline of the 2019 Outperformance Program awards. 
2022 Outperformance Equity-Based Awards In March 2022, the Compensation and Management Development Committee approved an outperformance program (the “2022 Outperformance Program”) to provide incentive to achieve significant long-term, absolute and relative stock performance. The award is capped to prevent excessive risk taking. Outperformance Program equity-based awards were granted to select key associates starting at a vice-president level and above, including the NEOs. The NEO awards were granted in the form of a class of units of the Operating Partnership (collectively referred to as “2022 OP Units”), issued under our Omnibus Incentive Plan. If the specific performance objectives of the Outperformance Program are achieved, the earned 2022 OP Units become convertible into common units of the Operating Partnership (and ultimately into shares of our common stock at the NEOs’ election one a one-for-one basis) following vesting. The Outperformance Program awards are earned only when performance exceeds hurdles as measured by three-year TSR and requires outperforming an index of residential REITs (in which the Company is a constituent) and/or positive double-digit stockholder returns. If the performance objectives are not met, the 2022 OP Units will be cancelled. What Makes the 2022 Outperformance Program Unique Compared to Other Long-Term Incentive Plans The Compensation and Management Development Committee believes the Outperformance Program incorporates several unique design features that distinguish its long-term incentive design from our ongoing annual LTIP program and that of many other companies. Dollar Value Pool-Based Award — the 2022 Outperformance Program extends participation to approximately 60 select key associates and is capped based on a dollar value pool approach. Unlike grants of performance shares that have unlimited upside value potential based on future stock price, the 2022 Outperformance Program is capped in its value. | • | | Lock-in Feature — the 2022 Outperformance Program provides that upon completion of 75% of the performance period, or June 30, 2024 (the “Interim Measurement Date”), the Company will calculate performance achieved as of the Interim Measurement Date consistent with the award terms. To the extent the Company’s performance through the Interim Measurement Date would result in a payout if the performance period had ended on that date, a minimum of 50% of such hypothetical payout amounts will be guaranteed as a minimum level payout for the full performance period, so long as certain minimum levels of relative total shareholder return are achieved for the full performance period. The final award multipliers will be equal to the greater of the payouts determined based on the Interim Measurement Date and performance through March 31, 2025. The final award vests 50% at the end of the performance period and 50% on the one-year anniversary of the end of the performance period. The awards granted to our NEOs provide for a maximum dollar amount equal to 1.6x their respective total annual target compensation as of the grant date. |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
Four-Year Total Vesting Requirement — the 2022 Outperformance Program is subject to long-term vesting to promote enhanced retention in addition to significant stockholder value creation. Any award ultimately earned does not fully vest until four years from program commencement. | • | | Robust Performance Goals — the Compensation and Management Development Committee believes in establishing robust performance goals to motivate and reward long-term performance that leads to transformational change in support of creating increased stockholder value. To that end, the performance goals were established at a level that will award a minimum payout of 1% with respect to the TSR portion of the award (50% of the total award) if the Company achieves a 17% cumulative TSR and a minimum payout of 1% with respect to the relative TSR portion of the award (50% of the total award) if the Company outperforms the FTSE Nareit Residential Index. A maximum payout of 100% will be awarded under the Outperformance Program only if the Company realizes both a cumulative three-year 42% TSR and relative performance that exceeds the FTSE Nareit Residential Index by 50%. Performance between the minimum and maximum levels is determined based on linear interpolation. |
Below is a summary of the key terms of the 2022 Outperformance Program, which is 100% performance-based: | | | | | | | | Feature | | Description | | Objective | | | | Performance Period | | Three-year period from April 1, 2022 — March 31, 2025. | | Incentivizes executives to create value over the long term. | | | | Absolute TSR Component | | To earn the maximum award, the Company must deliver a cumulative TSR of 42% over the performance period. | | Ensures executives create value for stockholders over the long term. | | | | Relative TSR Component | | To earn the maximum award, the Company must outperform the FTSE Nareit Residential Index by 50% over the performance period. | | Prevents a high payout in the case of underperformance relative to peers. | | | | Vesting | | — 50% of earned awards vest within 60 days subsequent to the conclusion of the performance period. — 50% of Earned Awards vest on the first anniversary of the conclusion of the performance period. | | Promotes continued alignment of incentives between stockholders and plan participants over the long term. |
2022 Outperformance Program Award Opportunity The table below illustrates the value of the 2022 Outperformance Program awards in aggregate and on an annualized basis based on the maximum award value and a 50% payout. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Outperformance
Program Award
Pool Percentage | | Aggregate Award
Opportunity | | Annualized Award
Opportunity | NEO | | 50%
Payout | | Maximum
Award Value | | 50%
Payout | | Maximum
Award Value | | | | | | | Dallas B. Tanner | | 23.3% | | $7,800,000 | | $15,600,000 | | $2,600,000 | | $5,200,000 | | | | | | | Ernest M. Freedman(1) | | 9.6% | | $3,200,000 | | $6,400,000 | | $1,066,667 | | $2,133,333 | | | | | | | Charles D. Young | | 9.6% | | $3,200,000 | | $6,400,000 | | $1,066,667 | | $2,133,333 | | | | | | | Mark A. Solls | | 4.5% | | $1,520,000 | | $3,040,000 | | $ 506,667 | | $1,013,333 |
| (1) | Effective as of Mr. Freedman’s resignation on June 1, 2023, his award under the 2022 Outperformance Program will be forfeited. |
The values under the annualized award opportunity have been amortized over the three-year performance period to provide a depiction of the way the Compensation and Management Development Committee views each NEO’s participation in this program. | | | | | | | | | |
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| Executive Compensation—Compensation Discussion and Analysis (continued) |
Earning and Vesting of Outperformance Program Awards The following chart illustrates the timeline of the Outperformance Program awards. 
As the 2022 Outperformance Program awards are non-recurring in nature, the Summary Compensation Table values for this year will appear significantly higher than those in 2021. As such, to clearly depict compensation for 2022, the supplemental Summary Compensation table below illustrates pay for our NEOs as reported and the total value when excluding the 2022 Outperformance Program awards to help contextualize the normalized value of 2022 compensation. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | As Reported in the Summary Compensation Table(1) | | | Non-Recurring
Awards | | | Total
Compensation
Excluding
Non-Recurring
2022 Out-
performance
Award
Program | | Name and Principal Position | | Years | | | Salary ($) | | | Bonus ($) | | Stock
Awards ($) | | | Options
Awards
($) | | Non-Equity
Incentive
Plan Com- pensation
($) | | | Nonqualified
Deferred
Com- pensation
Earnings ($) | | | All Other
Com- pensation ($) | | Total ($) | | | 2022 Out-
performance
Program | | | | | | | | | | | | | | Dallas B. Tanner (Chief Executive Officer) | | | 2022 | | | $ | 950,000 | | | — | | $ | 12,023,478 | | | — | | $ | 1,180,876 | | | | | | | $12,200 | | $ | 14,166,554 | | | | $4,885,920 | | | | $9,280,634 | | | | | 2021 | | | $ | 900,000 | | | — | | $ | 6,500,037 | | | — | | $ | 2,298,808 | | | | | | | $11,600 | | $ | 9,710,445 | | | | | | | | | | | | | 2020 | | | $ | 800,000 | | | $272,293 | | $ | 3,625,057 | | | — | | $ | 809,268 | | | | | | | $11,400 | | $ | 5,518,018 | | | | | | | | | | | | | | | | | | | | | | Ernest M. Freedman (Executive Vice President and Chief Financial Officer) | | | 2022 | | | $ | 700,000 | | | — | | $ | 4,429,515 | | | — | | $ | 635,154 | | | | | | | $12,200 | | $ | 5,776,869 | | | | $2,004,477 | | | | $3,772,392 | | | | | 2021 | | | $ | 650,000 | | | — | | $ | 1,800,029 | | | — | | $ | 1,395,228 | | | | | | | $11,600 | | $ | 3,856,857 | | | | | | | | | | | | | 2020 | | | $ | 625,000 | | | $68,945 | | $ | 1,700,040 | | | — | | $ | 655,469 | | | | | | | $11,400 | | $ | 3,060,854 | | | | | | | | | | | | | | | | | | | | | | Charles D. Young
(President and Chief Operating Officer) | | | 2022 | | | $ | 700,000 | | | — | | $ | 4,429,515 | | | — | | $ | 635,154 | | | | | | | $12,200 | | $ | 5,776,869 | | | | $2,004,477 | | | | $3,772,392 | | | | | 2021 | | | $ | 650,000 | | | — | | $ | 1,800,029 | | | — | | $ | 1,362,518 | | | | | | | $11,600 | | $ | 3,824,147 | | | | | | | | | | | | | 2020 | | | $ | 575,000 | | | $77,265 | | $ | 1,700,040 | | | — | | $ | 571,766 | | | | | | | $11,400 | | $ | 2,935,471 | | | | | | | | | | | | | | | | | | | | | | Mark A. Solls
(Executive Vice President and Chief Legal Officer) | | | 2022 | | | $ | 500,000 | | | — | | $ | 1,852,203 | | | — | | $ | 364,462 | | | | | | | $12,200 | | $ | 2,728,865 | | | | $ 952,118 | | | | $1,776,747 | | | | | 2021 | | | $ | 475,000 | | | — | | $ | 825,040 | | | — | | $ | 808,688 | | | | | | | $11,600 | | $ | 2,120,328 | | | | | | | | | | | | | 2020 | | | $ | 475,000 | | | $41,377 | | $ | 800,054 | | | — | | $ | 394,962 | | | | | | | $11,400 | | $ | 1,722,793 | | | | | | | | | |
| (1) | See “Executive Compensation—Compensation Discussion and Analysis—Summary Compensation Table.” |
2023 Compensation Decisions In February 2023, the Compensation and Management Development Committee approved our 2023 long-term incentive equity award program (the “2023 LTIP”) under the Omnibus Incentive Plan, and as of March 1, 2023, granted our NEOs (other than Mr. Freedman) equity-based awards in the form of time vesting RSUs and performance vesting RSUs. As noted above, on January 30, 2023, we announced that Mr. Freedman provided notice of his resignation as the Company’s Executive Vice President, Chief Financial Officer and Treasurer, effective as of June 1, 2023. Under his executive transition services agreement, dated as of February 1, 2023, Mr. Freedman is not eligible for any equity grants from the Company during calendar year 2023 or thereafter. The time vesting RSUs are scheduled to vest in equal annual installments on each of the first three anniversaries of March 1, 2023, subject to the NEO’s continued employment through the applicable vesting date (with certain limited exceptions). The performance vesting RSUs may be earned based on the achievement of performance conditions over a three-year performance period from January 1, 2023 through December 31, 2025. The number of performance vesting RSUs that may be earned will be determined based on performance achieved during the specified performance period. The performance vesting RSUs may be earned based on two performance measures: (1) the TSR Relative to RMS Index CAGR for the performance period; and (2) the Company’s Same Store NOI Growth CAGR.
| Executive Compensation—Compensation Discussion and Analysis (continued) |
In establishing 20202023 executive compensation, our Compensation and Management Development Committee considered market data relative to the peer group and the performance, changes to the responsibilities of our executive officers, and level of pay relative to the Company’s other executives, and approved increases to several compensation components for our NEOs as discussed below.set forth below: Mr. Tanner
Mr. Tanner’s 2019 compensation reflected his position as a newly promoted CEO and was targeted at a relative pay level that generally aligned with the lower quartile of our peers. As previously disclosed, in 2020 the Compensation Committee made adjustments to his pay commensurate with his performance and his tenure. The Compensation Committee increasedIncreased Mr. Tanner’s base salary in 20202023 from $700,000$950,000 to $800,000 and$1,000,000, increased his target 2020 LTIP award opportunity under the 2023 LTIP (75% which is tied to future three-year performance goals) from $2.25 million$7,137,500 to $3.625 million.$7,500,000, and increased his annual incentive program target opportunity from 175% to 200%;
Increased Mr. Freedman The Compensation Committee increased Mr. Freedman’sYoung’s target 2020 LTIP award opportunity under the 2023 LTIP (75% which is tied to future three-year performance goals) from $2,425,000 to $2,750,000, and increased his annual incentive program target opportunity from 125% to 150%; and
Increased Mr. Solls’ base salary in 2023 from $500,000 to $515,000, and increased his target award opportunity under the 2023 LTIP (75% of which is tied to future three-year performance goals) from $1.6 million$900,000 to $1.7 million. No changes were made to Mr. Freedman’s base salary or cash bonus.$950,000. Other Matters Mr. YoungRisk Mitigation
The Compensation Committee increased Mr. Young’s target 2020 LTIP award opportunity (75% of which is tied to future three-year performance goals) from $1.6 million to $1.7 million. No changes were made to Mr. Young’s base salary or cash bonus. Mr. Solls
The Compensation Committee increased Mr. Solls’ base salary in 2020 from $450,000 to $475,000 and increased his target 2020 LTIP award opportunity (75% of which is tied to future three-year performance goals) from $700,000 to $800,000.
Other Matters
Risk Mitigation
The CompensationManagement Development Committee has discussed the concept of risk as it relates to our compensation programs with management and FPL,FPC, and the Compensation Committee does not believe the goals, or the underlying philosophy, of our compensation programs encourage excessive or inappropriate risk taking. The Company’s incentive compensation programs contain appropriate risk mitigation factors, including award caps, multiple performance metrics, clawback features and ranges of awards. The share ownership and retention guidelines also mitigate risk. The Compensation Committee regularly reviews the incentive compensation plans to ensure they are designed to create and maintain shareholderstockholder value and do not encourage excessive risk.
Clawback Policy RSUs granted under our long-term incentive plans are subject to clawback in the event of a restatement of the Company’s financial results due to the executive’s fraud or intentional illegal conduct where such restatement results in fewer earned performance vesting RSUs.
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
Anti-Hedging and Anti-Pledging Policies The Company’s directors, officers and employeesassociates may not engage in hedging transactions with respect to the Company’s securities, including engaging in transactions in forward contracts, equity swaps, collars, exchange funds, puts, calls, options and other derivative securities or any instruments designed to increase in value as a result of, or hedge or offset any decrease in, the market value of the Company’s securities. In addition, the Company’s officers may not purchase the Company’s securities on margin, borrow against any account in which the Company’s securities are held or pledge the Company’s securities as collateral for a loan. Company directors who wish to pledge the Company’s securities as collateral for a loan must first submit a request for approval to the Office of the Chief Legal Officer prior to the execution of the documents evidencing the proposed pledge. The Office of the Chief Legal Officer is under no obligation to approve any request forpre-clearance and may determine not to permit the arrangement for any reason. Currently, there are no outstanding pledges of the Company’s securities by our directors. Stock Ownership Policy We have adopted a stock ownership policy under which each of the Company’s NEOs and eachnon-employee director serving on the Board who is eligible to receive compensation for his or her service on the Board or committee thereof is expected to own shares of our common stock equal in market value to a specified multiple of his or her annual base salary or cash retainer, as applicable. Under this policy, our President and CEO is expected to own equity in an amount equal to six times his or her annual base salary, the other officers are required to own equity in an amount equal to three times his or her annual base salary and the compensatednon-employee directors are required to own equity in an amount equal to five times his or her | | | | | | | | | |
| | 63 |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
annual cash retainer for serving on the Board (exclusive of any cash payable for service on a committee of the Board or as a chairperson of the Board or committee of the Board). The ownership requirement is expected to be satisfied within five years of the date that the person becomes subject to the policy. In addition, the stock ownership policy provides that, until such person satisfies the ownership requirement, he or she is required to retain at least 50% of the equity such person holds that qualifies toward the ownership requirement and, once the ownership requirement is met, the person must retain the requisite level of equity for so long as he or she is subject to the policy. As of the Record Date, all of our directors and NEOs are in compliance with the Stock Ownership Policy. Executive Severance Plan In June 2017, we adopted a severance plan for employeesassociates of the Company at the level of Senior Vice President and above and selected by the Compensation Committee (the “Severance Plan”). Each of our NEOs participates in the Severance Plan. As a condition to becoming eligible for benefits under the Severance Plan, each participant must agree to terminate and cancel such other employment, severance protection or other individual prior agreements relating to severance or termination benefits.benefits between such participant and the Company. The Severance Plan provides for payment of severance and other benefits to eligible executives in the event of a termination of employment with us without cause or following a constructive termination (each as defined in the Severance Plan and each, a “qualifying termination”), or for a limited number of individuals, including our NEOs, the event of a termination with us as a result of death or disability (as such terms are defined in the Severance Plan), in each case, subject to the (i) executive’s execution andnon-revocation of a general release of claims in favor of the Company and (ii) continued compliance with the restrictive covenants related to post-employmentnon-solicitation andnon-competition for 12 months following any termination of employment and indefinite covenants covering trade secrets, confidentiality andnon-disparagement. Retirement Benefits We maintain atax-qualified 401(k) plan, under which we match each employee’sassociate’s contributionsdollar-for-dollar up to 3% of such employee’s eligible earnings, and we match 50% on the next 2% of each employee’sassociate’s eligible earnings contributed. All of our matching contributions are fully vested, and each NEO was eligible to participate in the 401(k) plan in 2019.2022. Employee Benefits
We provide standard benefits.a competitive benefits package to our associates. In 2022, we launched our holistic wellness program, which is designed to enhance mental, physical, and financial wellbeing for associates. We will continue to grow and enhance the offerings in the coming years. Our executive officers are eligible to participate in various benefit plans available generally to our employees.associates. Under these plans, all employeesassociates are entitled to access to health, dental, vision, term life insurance and disability coverage. All employees,associates, including our executive officers, are also eligible to receive vacation, sick leave and other paid holidays. We Generally, we do not have ‘‘executive-only’’ benefits or perquisites.perquisites, such as company cars, security systems or financial planning. We maintain a fractional ownership interest in an aircraft, which provides the Company with a certain number of yearly flight hours, that is intended for business travel. Under the Company’s Business Aircraft Use Policy, executive officers are required to agree to reimburse the Company for all aggregate incremental costs incurred in connection with personal use. The aggregate incremental costs are based on the cost to us of the particular flights, including the applicable hourly rate for the aircraft and any variable costs of the flights, such as fuel costs, catering, ground transportation and related taxes. The amount reimbursed excludes fixed costs that do not change based on actual usage, such as the monthly management fee. No amounts are reported in the Summary Compensation Table for this aircraft use by any executive officers since any such amounts were fully reimbursed to us by the executive officers who used the aircraft for personal use. | | | | | | | | 53 | | 64 | | 20202023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Summary Compensation Table The following table sets forth all compensation awarded to, paid to or earned by our NEOs for services rendered to us during the fiscal years presented. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Years | | Salary
($) | | Bonus
($) | | Stock
Awards(1)
($) | | Options
Awards
($) | | Non-Equity
Incentive Plan
Compensation(2)
($) | | All Other
Compensation(3)
($) | | Total ($) | Dallas B. Tanner (President and Chief Executive Officer) | | | | 2019 | | | | | $700,000 | | | | | | | | | | $ 4,418,449 | | | | | | | | | | $1,161,566 | | | | | $11,200 | | | | | $ 6,291,215 | | | | | 2018 | | | | | $525,000 | | | | | $221,267 | | | | | $ 1,900,041 | | | | | | | | | | $ 685,150 | | | | | $11,000 | | | | | $ 3,342,458 | | | | | 2017 | | | | | $450,000 | | | | | | | | | | $ 7,651,659 | | | | | | | | | | $ 650,306 | | | | | $10,731 | | | | | $ 8,762,696 | | Ernest M. Freedman (Executive Vice President and Chief Financial Officer) | | | | 2019 | | | | | $625,000 | | | | | | | | | | $ 3,229,721 | | | | | | | | | | $ 894,245 | | | | | $11,200 | | | | | $ 4,760,166 | | | | | 2018 | | | | | $600,000 | | | | | | | | | | $ 1,900,041 | | | | | | | | | | $ 814,875 | | | | | $11,000 | | | | | $ 3,325,916 | | | | | 2017 | | | | | $600,000 | | | | | | | | | | $10,833,739 | | | | | | | | | | $ 855,675 | | | | | $10,800 | | | | | $12,300,214 | | Charles D. Young (Executive Vice President and Chief Operating Officer) | | | | 2019 | | | | | $575,000 | | | | | | | | | | $ 3,168,736 | | | | | | | | | | $ 785,233 | | | | | $11,200 | | | | | $ 4,540,169 | | | | | 2018 | | | | | $525,000 | | | | | | | | | | $ 1,900,041 | | | | | | | | | | $ 616,220 | | | | | $11,000 | | | | | $ 3,052,261 | | | | | 2017 | | | | | — | | | | | | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | | Mark A. Solls (Executive Vice President and Chief Legal Officer) | | | | 2019 | | | | | $450,000 | | | | | | | | | | $ 1,567,397 | | | | | | | | | | $ 484,467 | | | | | $11,200 | | | | | $ 2,513,064 | | | | | 2018 | | | | | $425,000 | | | | | | | | | | $ 700,073 | | | | | | | | | | $ 451,735 | | | | | $11,000 | | | | | $ 1,587,808 | | | | | 2017 | | | | | — | | | | | | | | | | — | | | | | | | | | | — | | | | | — | | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Years | | | Salary
($) | | | Bonus(1) ($) | | Stock
Awards(2)
($) | | Options
Awards
($) | | Non-Equity
Incentive Plan
Compensation(3)
($) | | All Other
Compensation(4)
($) | | Total ($) | | Dallas B. Tanner (Chief Executive Officer) | | | 2022 | | | $ | 950,000 | | | — | | $12,023,478 | | — | | $1,180,876 | | $12,200 | | $ | 14,166,554 | | | | | 2021 | | | $ | 900,000 | | | — | | $ 6,500,037 | | — | | $2,298,808 | | $11,600 | | $ | 9,710,445 | | | | | 2020 | | | $ | 800,000 | | | $272,293 | | $ 3,625,057 | | — | | $ 809,268 | | $11,400 | | $ | 5,518,018 | | Ernest M. Freedman (Executive Vice President and Chief Financial Officer) | | | 2022 | | | $ | 700,000 | | | — | | $ 4,429,515 | | — | | $ 635,154 | | $12,200 | | $ | 5,776,869 | | | | | 2021 | | | $ | 650,000 | | | — | | $ 1,800,029 | | — | | $1,395,228 | | $11,600 | | $ | 3,856,857 | | | | | 2020 | | | $ | 625,000 | | | $ 68,945 | | $ 1,700,040 | | — | | $ 655,469 | | $11,400 | | $ | 3,060,854 | | Charles D. Young (President and Chief Operating Officer) | | | 2022 | | | $ | 700,000 | | | — | | $ 4,429,515 | | — | | $ 635,154 | | $12,200 | | $ | 5,776,869 | | | | | 2021 | | | $ | 650,000 | | | — | | $ 1,800,029 | | — | | $1,362,518 | | $11,600 | | $ | 3,824,147 | | | | | 2020 | | | $ | 575,000 | | | $ 77,265 | | $ 1,700,040 | | — | | $ 571,766 | | $11,400 | | $ | 2,935,471 | | Mark A. Solls (Executive Vice President and Chief Legal Officer) | | | 2022 | | | $ | 500,000 | | | — | | $ 1,852,203 | | — | | $ 364,462 | | $12,200 | | $ | 2,728,865 | | | | | 2021 | | | $ | 475,000 | | | — | | $ 825,040 | | — | | $ 808,688 | | $11,600 | | $ | 2,120,328 | | | | | 2020 | | | $ | 475,000 | | | $ 41,377 | | $ 800,054 | | — | | $ 394,962 | | $11,400 | | $ | 1,722,793 | |
| (1) | Bonus represents the discretionary portion of the 2020 annual cash incentive award. |
| (2) | Amount represents the aggregate grant date fair value of the equity awards granted in 20192022 calculated in accordance with FASB ASC Topic 718, using the assumptions discussed in Note 10 to the consolidated financial statements included in our 20192022 Form10-K. |
| | The stock award values reflected in the table above for 20192022 represent the grant date fair value in respect of:of (a) the time vesting RSUs and performance vesting RSUs granted under our 20192022 LTIP; and (b) the performance vesting RSUs2022 Outperformance Program OP Units related to the Company’s TSR relative to the FTSE Nareit Residential Index and absolutecumulative TSR associated with our 2022 Outperformance Program award’s notional value for each NEONEO. |
| | | | | Name | | | 2022
LTIP (#) | | 2022 Outperformance Program Award Notional Value ($) | | | | 2019 LTIP
(#) | | Outperformance
Program Award
Notional Value ($) | | Dallas B. Tanner | | | | 91,949 | | | | $6,000,000 | | | | 194,480 | | | $ | 15,600,000 | | | Ernest M. Freedman | | | | 65,386 | | | | $4,509,375 | | | | 66,076 | | | $ | 6,400,000 | | | Charles D. Young | | | | 65,386 | | | | $4,340,625 | | | | 66,076 | | | $ | 6,400,000 | | | Mark A. Solls | | | | 28,607 | | | | $2,400,000 | | | | 24,525 | | | $ | 3,040,000 | |
| | Effective as of Mr. Freedman’s resignation on June 1, 2023, his award under the 2022 Outperformance Program will be forfeited. |
| The 20192022 LTIP RSUs are the only incentive awards that are part of our regular annual compensation program. The other incentive awards reflected above were granted on aone-time basis, and we do not expect such awards to occur on a regularan annual basis. For additional information about these awards see “Executive Compensation—Compensation Discussion and Analysis—20192022 Long-Term (Equity) Incentive Program”Program and “Executive Compensation—Compensation Discussion and Analysis—2019One-Time2022 Outperformance Equity-Based Awards.” |
| | As described further under “Executive Compensation—Compensation Discussion and Analysis—20192022 Long-Term (Equity) Incentive Program,” of the 20192022 LTIP performance vesting RSUs granted in 2019, 60%2022, 75% of the 2022 LTIP RSUs at target are earned based on performance, of which 45% are tied to the TSR Relative to RMS Index CAGR (with a cap at target if the Company’s absolute TSR is negative) and 40%30% are earned based ontied to the Company’s Same Store NOI Growth CAGR. The grant date fair value of the RSUs that are earned based on the Same Store NOI Growth CAGR were computed in accordance with FASB ASC Topic 718 based up onupon the probable outcome of the performance conditions as of the grant date. Assuming the highest level of performance achievement, the aggregate grant date fair value of the RSUs that are earned based on Same Store NOI Growth CAGR would have been: Mr. Tanner—$1,350,034;4,282,558; Mr. Freedman—$960,006;1,455,008; Mr. Young—$960,006;1,455,008; and Mr. Solls—$420,020.540,030. |
| | As the 2022 LTIP RSUs that are earned based on the TSR Relative to RMS Index CAGR and the 2022 Outperformance Program OP Unit awards are subject to market conditions as defined under FASB ASC Topic 718 and are not subject to performance conditions as defined under FASB ASC Topic 718, they have no maximum grant date fair values that differ from the grant date fair values presented in the table. |
| As described further under “Executive Compensation—Compensation Discussion and Analysis—2019One-Time Outperformance Equity-Based Awards,” the NEOs were granted aOne-Time Outperformance Equity-Based Award. The partnership units that vest based on achievement of TSR relative to the FTSE Nareit Residential Index and absolute TSR are subject to market conditions as defined under FASB ASC Topic 718 and are not subject to performance conditions as defined under FASB ASC Topic 718. As such, they have no maximum grant date fair values that differ from the grant date fair values presented in the table.
|
(2)(3) | Amounts shown for 20192022 represent the annual cash incentive awards earned under our 20192022 annual cash incentive program as described under “Compensation Discussion and Analysis—Determination of Compensation—20192022 Annual Cash Incentive Program.” |
(3)(4) | All Other Compensation for 20192022 represents Company-paid matching 401(k) plan contributions. |
| | | | | 2020 Proxy Statement | | 54 | | | | |
| | 65 |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
20192022 Grants of Plan-Based Awards Table
| | | | | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan
Awards(1) | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards(3) | | | All
Other
Stock
Awards:
Number
of
Shares
of
Stock
or Units
(#) | | | Grant
Date Fair
Value of
Stock and
Option
Awards(4)
($) | | | Grant Name | | Type | | Grant
Date | | Estimated Possible Payouts Under Non-Equity Incentive
Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive
Plan Awards(3) | | All
Other
Stock
Awards:
Number
of
Shares
of Stock
or Units
(#) | | Grant
Date Fair
Value of
Stock and
Option
Awards(4)
($) | Name | | Grant Name | | Type | | Grant
Date | | | Threshold
($)(2) | | | Target ($) | | | Max ($) | | | Threshold
(#)(2) | | | Target
(#) | | | Max (#) | | | Threshold
($)(2) | | Target ($) | | Max ($) | | Threshold
(#)(2) | | Target
(#) | | Max (#) | | Dallas B. Tanner | | | | | | | | $ | 52,500 | | | $ | 1,050,000 | | | $ | 1,575,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | $ | 83,125 | | | $ | 1,662,500 | | | $ | 3,325,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 2019 LTIP Time Vesting RSUs | | Time | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 24,682 | | | $ | 562,502 | | | 2022 LTIP Time Vesting RSUs | | | Time | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 47,647 | | | $ | 1,784,380 | | | | 2019 LTIP Performance Vesting RSUs | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 33,634 | | | | 67,267 | | | | 134,534 | | | | — | | | $ | 1,687,541 | | | | | 2019 Outperformance Plan Awards | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 1,001 | | | | 200,200 | | | | 200,200 | | | | | $ | 2,168,406 | | | | | | | 2022 LTIP Performance Vesting RSUs | | | Performance | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | 73,417 | | | | 146,833 | | | | 293,666 | | | | — | | | $ | 5,353,178 | | | | | | | 2022 Outperformance Plan Award | | | Performance | | | | 4/1/2022 | | | | — | | | | — | | | | — | | | | 2,632 | | | | 526,316 | | | | 526,316 | | | | — | | | $ | 4,885,920 | | | Ernest M. Freedman | | | | | | | | $ | 39,063 | | | $ | 781,250 | | | $ | 1,171,875 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | $ | 43,750 | | | $ | 875,000 | | | $ | 1,750,000 | | | | — | | | | — | | | | — | | | | — | | | | | | 2019 LTIP Time Vesting RSUs | | Time | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,552 | | | $ | 400,010 | | | 2022 LTIP Time Vesting RSUs | | | Time | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 16,189 | | | $ | 606,278 | | | | 2019 LTIP Performance Vesting RSUs | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 23,917 | | | | 47,834 | | | | 95,668 | | | | — | | | $ | 1,200,023 | | | | | 2019 Outperformance Plan Awards | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 752 | | | | 150,463 | | | | 150,463 | | | | | $ | 1,629,688 | | | | | | | 2022 LTIP Performance Vesting RSUs | | | Performance | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | 24,944 | | | | 49,887 | | | | 99,774 | | | | — | | | $ | 1,818,760 | | | | | | | 2022 Outperformance Plan Award | | | Performance | | | | 4/1/2022 | | | | — | | | | — | | | | — | | | | 1,080 | | | | 215,924 | | | | 215,924 | | | | — | | | $ | 2,004,477 | | | Charles D. Young | | | | | | | | $ | 35,938 | | | $ | 718,750 | | | $ | 1,078,125 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | $ | 43,750 | | | $ | 875,000 | | | $ | 1,750,000 | | | | — | | | | — | | | | — | | | | — | | | | | | 2019 LTIP Time Vesting RSUs | | Time | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 17,552 | | | $ | 400,010 | | | 2022 LTIP Time Vesting RSUs | | | Time | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 16,189 | | | $ | 606,278 | | | | 2019 LTIP Performance Vesting RSUs | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 23,917 | | | | 47,834 | | | | 95,668 | | | | — | | | $ | 1,200,023 | | | | | 2019 Outperformance Plan Awards | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 724 | | | | 144,832 | | | | 144,832 | | | | | $ | 1,568,703 | | | | | | | 2022 LTIP Performance Vesting RSUs | | | Performance | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | 24,944 | | | | 49,887 | | | | 99,774 | | | | — | | | $ | 1,818,760 | | | | | | | 2022 Outperformance Plan Award | | | Performance | | | | 4/1/2022 | | | | — | | | | — | | | | — | | | | 1,080 | | | | 215,924 | | | | 215,924 | | | | — | | | $ | 2,004,477 | | | Mark A. Solls | | | | | | | | $ | 22,500 | | | $ | 450,000 | | | $ | 675,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | | $ | 25,000 | | | $ | 500,000 | | | $ | 1,000,000 | | | | — | | | | — | | | | — | | | | — | | | | | | 2019 LTIP Time Vesting RSUs | | Time | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 7,679 | | | $ | 175,004 | | | 2022 LTIP Time Vesting RSUs | | | Time | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 6,009 | | | $ | 225,036 | | | | 2019 LTIP Performance Vesting RSUs | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 10,465 | | | | 20,928 | | | | 41,856 | | | | — | | | $ | 525,025 | | | | | 2019 Outperformance Plan Awards | | Performance | | | 3/1/2019 | | | | — | | | | — | | | | — | | | | 400 | | | | 80,080 | | | | 80,080 | | | | | $ | 867,368 | | | | | | | 2022 LTIP Performance Vesting RSUs | | | Performance | | | | 3/1/2022 | | | | — | | | | — | | | | — | | | | 9,258 | | | | 18,516 | | | | 37,032 | | | | — | | | $ | 675,049 | | | | | | | 2022 Outperformance Plan Award | | | Performance | | | | 4/1/2022 | | | | — | | | | — | | | | — | | | | 513 | | | | 102,564 | | | | 102,564 | | | | — | | | $ | 952,118 | |
| (1) | Reflects the possible payouts of cash incentive compensation under the 20192022 annual cash incentive program. The actual amounts paid are reflected in the“Non-Equity Incentive Plan Compensation” column of the “Summary Compensation Table” and described in “Compensation Discussion and Analysis—Determination of Compensation—20192022 Annual Cash Incentive Program” above. |
| (2) | Threshold reflects the payout associated with the minimum level of achievement that is greater than $0 or 0 RSUs. |
| (3) | Represents performance vesting RSUs granted as part of our 2019 LTIP awards and the performance vesting OP Units granted as part of our Outperformance Program award.2022 LTIP. See “Compensation Discussion and Analysis—Determination of Compensation—2019 LTIP Awards.2022 Long-Term (Equity) Incentive Program.” The number of 2022 Outperformance Program awards in the table above was calculated based on the maximum award value and the closing share price as of December 31, 20192022 of $29.97.$29.64. Due to the design of the 2022 Outperformance Program, the number of awards only havethat are earned is based on a maximum award value, no specifiedand the threshold or target exists.level of achievement is based on performance at minimum levels for the metrics under the program which results in a payout. See “Executive Compensation—Compensation Discussion and Analysis—2019One-Time2022 Outperformance Equity-Based Awards.” The maximum award value is a dollar amount based on a multiple of each NEO’s target compensation amount (annual base salary, target bonus, and target LTIP award). |
Effective as of Mr. Freedman’s resignation on June 1, 2023, his award under the 2022 Outperformance Program will be forfeited. | (4) | Represents the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718, using the assumptions discussed in Note 10 to the consolidated financial statements included in our 20192022 Form10-K. |
| | | | | | | | 55 | | 66 | | 20202023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Narrative to Summary Compensation Table and 20192022 Grants of Plan- BasedPlan-Based Awards Table Employment Arrangements We do not have employment agreements with any of our NEOs. In August 2017, in contemplation of the Merger, each of Messrs. Tanner, Freedman and Solls entered into a letter agreement with us which became effective on November 16, 2017 upon the consummation of the Merger (the “Letter Agreements”). The Letter Agreements were intended to provide these executives with specified benefits as the Merger did not constitute a “change in control” or an “exit event” as defined under any of our compensatory or benefit plans or arrangements, including the Incentive Plan or the Severance Plan. On June 23, 2017, the Board, upon recommendation of the Compensation Committee, granted to each of Messrs. Tanner and Freedman 138,122 Retention RSUs. Under the Letter Agreements with Messrs. Tanner and Freedman, each of such NEOs’ 69,061 Retention RSUs vested on May 16, 2019, the date that was 18 months from the closing date of the Merger. The remaining portion of each such NEOs’ time vesting RSUs, will vest on June 19, 2021, subject to the NEO’s continued employment through that date. For information about payments and benefits to which Messrs. Tanner and Freedman may be entitled upon qualifying employment termination events or a change in control, see “Potential“Executive Compensation—Compensation Discussion and Analysis—Potential Benefits upon a Termination or Change in Control.”
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
Outstanding Equity Awards at 20192022 Fiscal Year End | | | | | | | | | Stock Awards | | | | Stock Awards | | | | | Name | | Award | | Grant Date | | | Number of
Shares or
Units of
Stock That
Have Not
Vested(1)(2)
(#) | | | Market Value
of Shares
or Units of
Stock That
Have Not
Vested(3) ($) | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(2)(4)(5)
(#) | | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(3)(4)(5)
($) | | | Grant
Date | | Number of
Shares or
Units of
Stock That
Have Not
Vested(1)(2)
(#) | | Market Value
of Shares or Units of
Stock That
Have Not
Vested(3) ($) | | Equity
Incentive Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(2)(4)(5)
(#) | | Equity
Incentive Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested(3)(4)(5)
($) | Dallas B. Tanner | | 2017 LTIP RSUs | | | 6/23/2017 | | | | 58,352 | | | | $ 1,748,809 | | | | | | | | | Retention RSUs | | | 6/23/2017 | | | | 69,061 | | | | $ 2,069,758 | | | | | | | | | 2018 LTIP RSUs | | | 3/1/2018 | | | | 11,411 | | | | $ 341,988 | | | | 75,285 | | | | td,256,291 | | | | | | 2018 Supplemental Bonus Award | | | 3/1/2018 | | | | 12,172 | | | | $ 364,795 | | | | | | | 5/1/2019 | | 73,602 | | td,181,563 | | — | | — | Dallas B. Tanner | | 2019 LTIP RSUs | | | 3/1/2019 | | | | 24,682 | | | | $ 739,720 | | | | 134,534 | | | | $4,031,984 | | | 3/1/2020 | | 148,106 | | $4,389,862 | | — | | — | | | 2019 Outperformance Plan Awards | | | 5/1/2019 | | | | | | | | 200,200 | | | | $6,000,000 | | | | | 2017 LTIP RSUs | | | 6/23/2017 | | | | 58,352 | | | | $ 1,748,809 | | | | | | | | | 3/1/2021 | | 36,949 | | td,095,168 | | 233,249 | | $ 6,913,500 | | | | | 3/1/2022 | | 47,647 | | $1,412,257 | | 118,244 | | $ 3,504,752 | | | | | | 4/1/2022 | | — | | — | | 526,316 | | $15,600,000 | | Ernest M. Freedman | | Retention RSUs | | | 6/23/2017 | | | | 69,061 | | | | $ 2,069,758 | | | | | | | 5/1/2019 | | 55,317 | | td,639,596 | | — | | — | | | 2018 LTIP RSUs | | | 3/1/2018 | | | | 11,411 | | | | $ 341,988 | | | | 75,285 | | | | td,256,291 | | | 3/1/2020 | | 69,457 | | td,058,705 | | — | | — | | | 2018 Supplemental Bonus Award | | | 3/1/2018 | | | | 12,172 | | | | $ 364,795 | | | | | | | | | 2019 LTIP RSUs | | | 3/1/2019 | | | | 17,552 | | | | $ 526,033 | | | | 95,668 | | | | $2,867,170 | | | 3/1/2021 | | 10,232 | | $ 303,276 | | 64,593 | | $ 1,914,537 | | | | 2019 Outperformance Plan Awards | | | 5/1/2019 | | | | | | | | 150,463 | | | | $4,509,375 | | | Charles D. Young | | Assumed SWH Awards | | | 3/16/2016 | | | | 24,877 | | | | $ 745,564 | | | | | | | | | 3/1/2022 | | 16,189 | | $ 479,842 | | 40,174 | | $ 1,190,757 | | | | | | 4/1/2022 | | — | | — | | 215,924 | | $ 6,400,000 | | Charles D. Young | | Assumed SWH Awards | | | 2/2/2017 | | | | 10,948 | | | | $ 328,112 | | | | | | | 5/1/2019 | | 53,247 | | td,578,241 | | — | | — | | | 2018 LTIP RSUs | | | 3/1/2018 | | | | 11,411 | | | | $ 341,988 | | | | 75,285 | | | | td,256,291 | | | 3/1/2020 | | 69,457 | | td,058,705 | | — | | — | | | 2018 Supplemental Bonus Award | | | 3/1/2018 | | | | 12,172 | | | | $ 364,795 | | | | | | | | | 2019 LTIP RSUs | | | 3/1/2019 | | | | 17,552 | | | | $ 526,033 | | | | 95,668 | | | | $2,867,170 | | | 3/1/2021 | | 10,232 | | $ 303,276 | | 64,593 | | $ 1,914,537 | | | | 2019 Outperformance Plan Awards | | | 5/1/2019 | | | | | | | | 144,832 | | | | $4,340,625 | | | | | | 3/1/2022 | | 16,189 | | $ 479,842 | | 40,174 | | $ 1,190,757 | | | | | | 4/1/2022 | | — | | — | | 215,924 | | $ 6,400,000 | | Mark A. Solls | | | 5/1/2019 | | 29,441 | | $ 872,631 | | — | | — | | | 2017 LTIP RSUs | | | 6/23/2017 | | | | 21,219 | | | | $ 635,933 | | | | | | | 3/1/2020 | | 32,687 | | $ 968,843 | | — | | — | | | 2018 LTIP RSUs | | | 3/1/2018 | | | | 3,804 | | | | $ 114,006 | | | | 25,097 | | | | $ 752,157 | | | | | 2018 Supplemental Bonus Award | | | 3/1/2018 | | | | 6,086 | | | | $ 182,397 | | | | | | | 3/1/2021 | | 4,690 | | $ 139,012 | | 29,606 | | $ 877,522 | | | 2019 LTIP RSUs | | | 3/1/2019 | | | | 7,679 | | | | $ 230,140 | | | | 41,856 | | | | td,254,424 | | | | | | 2019 Outperformance Plan Awards | | | 5/1/2019 | | | | | | | | 80,080 | | | | $2,400,000 | | | 3/1/2022 | | 6,009 | | $ 178,107 | | 14,911 | | $ 441,962 | | | | | | 4/1/2022 | | — | | — | | 102,564 | | $ 3,040,000 |
| (1) | The time vesting RSUs are scheduled to vest as described below. |
| | (a) | 20172020 LTIP time vesting RSUs: (i) a portion of Tranche 3the outstanding awards vested on March 1, 2020; the last portion is scheduled to vest on March 1, 2021. For Messrs. Tanner, Freedman and Solls, RSUs associated with Tranche 3 time vesting RSUs represent 6,332, 6,332 and 2,303 RSUs, respectively.2023.
|
| | (b) | 20172020 LTIP performance vesting RSUs: the performance period for the Tranche 3 2017 LTIP performance vesting RSUs ended on December 31, 2019,2022, but the awards remain subject to time vesting conditions. The amounts reported under “Number of Shares or Units of Stock That Have Not Vested” reflect the number of Tranche 3 RSUs earned based on actual achievement under the performance measures as of the end of the applicable performance period. As of December 31, 2019, Messrs. Tanner and Freedman earned 52,020 RSUs and Mr. Solls earned 18,916 RSUs in respect of Tranche 3 of their 2017 LTIP performance vesting RSUs. 50% of the earned RSUsThese awards vested upon the Certification Date and were issued, as shares of our common stock, net of tax, in February 2020. The remaining 50% are scheduled to vest on December 31, 2020.2023.
|
| | (c) | Retention2021 LTIP time vesting RSUs: the outstanding awards areaward is scheduled to vest or vested in equal annual installments on June 19,each of the first three anniversaries of the grant date of March 1, 2021.
|
| | (d) | 2018 LTIP time vesting RSUs: the outstanding awards are scheduled to vest on the second and third anniversaries of the grant date of March 1, 2018.
|
| (e) | 2018 Supplemental Bonus Award: the outstanding awards are scheduled to vest on the second and third anniversaries of the grant date of March 1, 2018.
|
| (f) | Assumed SWH Awards: the outstanding portion of the award granted on March 16, 2016 vested on March 16, 2020, and the outstanding portion of the award granted on February 2, 2017 vested on March 1, 2020.
|
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
| (g) | 20192022 LTIP time vesting RSUs: the award is scheduled to vest in equal annual installments on each of the first three anniversaries of the grant date of March 1, 2019.2022.
|
| (e) | 2019 Outperformance Plan awards: vested 50% following the expiration of the Outperformance Program performance period on March 31, 2022, and will vest 25% on each of the first and second anniversaries of such date. |
| (2) | For additional information on vesting upon specified termination and change in control events, see “Potential“Executive Compensation—Compensation Discussion and Analysis—Potential Benefits Upon a Termination or Change in Control.” |
| | | | | | | | | |
| | 67 |
| Executive Compensation—Compensation Discussion and Analysis (continued) |
| (3) | Amounts reported are based on the closing price of our common stock on the NYSE on December 31, 2019.2022. |
| (4) | 20182021 LTIP performance vesting RSUs are earned in respect of a number of shares based on the achievement of the TSR Relative to the RMS Index CAGR and Same Store NOI Growth CAGR at the end of a specified performance period on December 31, 20202023 and, thereafter, remain subject to time vesting conditions until the Certification Date. See “Executive Compensation—Compensation Discussion and Analysis—2018 Long-Term (Equity) Incentive Program.” The number and market value of shares reported above reflect the portion of the 20182021 LTIP performance vesting RSUs based on maximumtarget performance of the TSR Relative to the RMS Index CAGR and targetmaximum performance onof Same Store NOI Growth CAGR, as our achievement under these measures as of December 31, 20192022 was abovebetween threshold and target and above threshold,at maximum, respectively. The actual number of shares that will be deliverable is not yet determinable.
|
| | 20192022 LTIP performance vesting RSUs are earned in respect of a number of shares based on the achievement of the TSR Relative to the RMS Index CAGR and Same Store NOI Growth CAGR at the end of a specified performance period on December 31, 20212024 and, thereafter, remain subject to time vesting conditions until the Certification Date. See “Executive Compensation—Compensation Discussion and Analysis—20192022 Long-Term (Equity) Incentive Program.” The number and market value of shares reported above reflect the portion of the 20192022 LTIP performance vesting RSUs based on maximumtarget performance of the TSR Relative to the RMS Index CAGR and maximumthreshold performance onof Same Store NOI Growth CAGR, as our achievement under these each of these measures as of December 31, 20192022 was at maximumbetween threshold and above target and below threshold, respectively. The actual number of shares that will be deliverable is not yet determinable.
|
| | Earned 2022 Outperformance Program awards are scheduled to vest 50% on March 31, 2022,2025 and 25%50% on each of the first and second anniversariesanniversary of such date. |
| (5) | 2022 Outperformance Program awards were calculated using the share price as of December 31, 20192022 of $29.97.$29.64. The amounts reflected in the table are based on maximum performance because as of December 31, 2022 our achievement under both thefor cumulative TSR was at the minimum, and our achievement for TSR relative to the FTSE Nareit Residential Index measuresmeasure was above the minimum amountamount. |
| Effective as of December 31, 2019.Mr. Freedman’s resignation on June 1, 2023, his award under the 2022 Outperformance Program will be forfeited. |
20192022 Stock Vested Table
| | | | | Name | | Number of Shares
Acquired on Vesting(1)
(#) | | Value Realized on
Vesting(2) ($) | | Number of Shares Acquired on
Vesting(1)(#) | | Value Realized on
Vesting(2)($) | | Dallas B. Tanner | | 142,184 | | $3,410,056 | | | 244,958 | | | | $9,941,982 | | | Ernest M. Freedman | | 108,410 | | $2,650,141 | | | 166,697 | | | | $6,799,004 | | | Charles D. Young | | 47,614 | | $1,111,489 | | | 164,627 | | | | $6,714,631 | | | Mark A. Solls | | 46,428 | | $1,050,947 | | | 78,436 | | | | $3,198,116 | |
| (1) | Represents shares acquired on the vesting of RSUs in 20192022 as follows: |
| | (a) | As to Mr. Tanner, 33,7748,228 shares acquired on vesting of his 2019 LTIP time vesting RSUs on March 1, 2022, 134,534 shares acquired on the vesting of hisPre-IPO Supplemental Bonus award 2019 LTIP performance vesting RSUs which vested on February 6, 2019, 20,17315, 2022, 10,120 shares acquired on the vesting of a portion of his 20172020 LTIP performancetime vesting RSUs on February 27, 2019, 7,386March 1, 2022, 18,474 shares acquired on the vesting of a portion of his 20172021 LTIP time vesting RSUs on March 1, 2019, 5,705 shares2022, and 73,602 OP Units acquired on vesting of his 2018 LTIP time vesting RSUs on March 1, 2019 6,085 shares acquired on vesting of his 2018 Supplemental BonusOutperformance Award on March 1, 2019 and 69,061 shares acquired on vesting of his Retention RSUs on May 16, 2019.April 7, 2022. |
| | (b) | As to Mr. Freedman, 20,1735,851 shares acquired on vesting of his 2019 LTIP time vesting RSUs on March 1, 2022, 95,668 shares acquired on the vesting of his 2019 LTIP performance vesting RSUs which vested on February 15, 2022, 4,746 shares acquired on the vesting of a portion of his 20172020 LTIP performancetime vesting RSUs on February 27, 2019, 7,386March 1, 2022, 5,116 shares acquired on the vesting of a portion of his 20172021 LTIP time vesting RSUs on March 1, 2019, 5,705 shares2022, and 55,316 OP Units acquired on vesting of his 2018 LTIP time vesting RSUs on March 1, 2019 6,085 shares acquired on vesting of his 2018 Supplemental BonusOutperformance Award on March 1, 2019, and 69,061 shares acquired on vesting of his Retention RSUs on May 16, 2019.April 7, 2022. |
| | (c) | As to Mr. Young, 5,7055,851 shares acquired on vesting of his 20182019 LTIP time vesting RSUs on March 1, 2019, 6,085 shares acquired on vesting of his 2018 Supplemental Bonus Award on March 1, 2019, 10,9482022, 95,668 shares acquired on the vesting of his Assumed SWH Awards2019 LTIP performance vesting RSUs which vested on March 1, 2019, and 24,876February 15, 2022, 4,746 shares acquired on the vesting of a portion of his Assumed SWH Awards2020 LTIP time vesting RSUs on March 16, 2019.1, 2022, 5,116 shares acquired on the vesting of a portion of his 2021 LTIP time vesting RSUs on March 1, 2022, and 53,246 OP Units acquired on vesting of his 2019 Outperformance Award on April 7, 2022. |
| | (d) | As to Mr. Solls, 31,4612,560 shares acquired on vesting of his 2019 LTIP time vesting RSUs on March 1, 2022, 41,856 shares acquired on the vesting of hisPre-IPO Supplemental Bonus award 2019 LTIP performance vesting RSUs which vested on February 6, 2019, 7,33615, 2022, 2,234 shares acquired on the vesting of a portion of his 20172020 LTIP performancetime vesting RSUs on February 27, 2019, 2,686March 1, 2022, 2,345 shares acquired on the vesting of a portion of his 20172021 LTIP time vesting RSUs on March 1, 2019, 1,902 shares2022, and 29,441 OP Units acquired on vesting of his 2018 LTIP time vesting RSUs on March 1, 2019 and 3,043 shares acquired on vesting of his 2018 Supplemental BonusOutperformance Award on March 1, 2019.April 7, 2022. |
| (2) | Amounts reported are based on the closing price of our common stock on the NYSE on the vesting date. If vesting occurs on a day on which the NYSE is closed, the value realized on vesting is based on the on the closing price of our common stock on the NYSE on the last trading day prior to the vesting date. Amounts reported are shown before tax. |
| | | | | 2020 Proxy Statement | | 58 | | | | 68 | | 2023 Proxy Statement | | |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Potential Benefits upon a Termination or Change in Control The following table describes the potential payments and benefits that would have been payable to our NEOs under existing plans, assuming (1) a qualifying termination of employment, (2) a change in control, (3) a qualifying termination within 24 months of a change in control, or (4) death or disability occurred, in each case, on December 31, 2019.2022. Because the disclosures in the table assume the occurrence of a termination or change in control as of a particular date and under a particular set of circumstances and therefore make a number of important assumptions, the actual amount to be paid to each of our NEOs upon a termination or change in control may vary significantly from the amounts included herein. | Name | | | | Qualifying
Termination ($) | | Change in
Control ($) | | Qualifying Termination
Within 24
Months of
Change in
Control ($) | | Death or
Disability
($) | | Dallas B. Tanner | | | | | | | | | | | | | | | | | | | | | Severance(1) | | | $ | 5,225,000 | | | | | — | | | | $ | 7,837,500 | | | | | — | | Name | | | | Qualifying
Termination
($) | | Change in
Control
($) | | Qualifying Termination
Within 24 Months of
Change in Control ($) | | Death or
Disability
($) | | Dallas B. Tanner | | | | | | | | | | | | | | | | Bonus(2) | | | $ | 1,180,876 | | | | | — | | | | $ | 1,180,876 | | | | $ | 1,180,876 | | | | | | Time Vesting RSUs(3) | | | $ | 3,499,862 | | | | $ | 4,988,975 | | | | $ | 4,988,975 | | | | $ | 4,988,975 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 13,158,056 | | | | $ | 9,624,049 | | | | $ | 15,158,133 | | | | $ | 13,158,056 | | | | Severance(1) | | | $ | 3,500,000 | | | | | — | | | | $ | 5,250,000 | | | | | — | | | | | | Bonus(2) | | | $ | 1,161,566 | | | | | — | | | | $ | 1,161,566 | | | | $ | 1,161,566 | | | Continuation of Benefits(5) | | | $ | 24,624 | | | | | — | | | | $ | 36,936 | | | | | — | | | | Time Vesting RSUs(3) | | | $ | 2,764,583 | | | | $ | 3,706,030 | | | | $ | 3,706,030 | | | | $ | 3,706,030 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 4,692,283 | | | | $ | 6,285,099 | | | | $ | 11,010,948 | | | | $ | 4,692,283 | | | Other Benefits(6) | | | $ | 54,808 | | | | | — | | | | $ | 54,808 | | | | | — | | | | Continuation of Benefits(5) | | | $ | 22,560 | | | | | — | | | | $ | 33,841 | | | | | — | | | | | | Other Benefits(6) | | | $ | 165,510 | | | | | — | | | | $ | 165,510 | | | | | — | | | Total | | | $ | 23,143,226 | | | | $ | 14,613,024 | | | | $ | 29,257,228 | | | | $ | 19,327,907 | | | | Total | | | $ | 12,306,502 | | | | $ | 9,991,129 | | | | $ | 21,327,895 | | | | $ | 9,559,879 | | | | Ernest M. Freedman | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance(1) | | | $ | 2,109,375 | | | | | — | | | | $ | 3,164,063 | | | | | — | | | | | | Bonus(2) | | | $ | 894,245 | | | | | — | | | | $ | 894,245 | | | | $ | 894,245 | | | Severance(1) | | | $ | 2,362,500 | | | | | — | | | | $ | 3,543,750 | | | | | — | | | | Time Vesting RSUs(3) | | | $ | 2,693,344 | | | | $ | 3,492,344 | | | | $ | 3,492,344 | | | | $ | 3,492,344 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 4,124,292 | | | | $ | 5,248,526 | | | | $ | 8,937,953 | | | | $ | 4,124,292 | | | Bonus(2) | | | $ | 635,154 | | | | | — | | | | $ | 635,154 | | | | $ | 635,154 | | | | Continuation of Benefits(5) | | | $ | 22,639 | | | | | — | | | | $ | 33,958 | | | | | — | | | | | | Other Benefits(6) | | | $ | 100,691 | | | | | — | | | | $ | 100,691 | | | | | — | | | Time Vesting RSUs(3) | | | $ | 2,091,843 | | | | $ | 2,563,386 | | | | $ | 2,563,386 | | | | $ | 2,563,386 | | | | Total | | | $ | 9,944,586 | | | | $ | 8,740,870 | | | | $ | 16,623,254 | | | | $ | 8,510,881 | | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 3,627,817 | | | | $ | 3,669,195 | | | | $ | 5,420,296 | | | | $ | 3,627,817 | | | | | | Continuation of Benefits(5) | | | $ | 24,688 | | | | | — | | | | $ | 37,032 | | | | | — | | | | | | Other Benefits(6) | | | $ | 40,385 | | | | | — | | | | $ | 40,385 | | | | | — | | | | | | | Total | | | $ | 8,782,387 | | | | $ | 6,232,581 | | | | $ | 12,240,003 | | | | $ | 6,826,357 | | | Charles D. Young | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance(1) | | | $ | 2,362,500 | | | | | — | | | | $ | 3,543,750 | | | | | — | | | | | | Bonus(2) | | | $ | 635,154 | | | | | — | | | | $ | 635,154 | | | | $ | 635,154 | | | | | | Time Vesting RSUs(3) | | | $ | 2,030,488 | | | | $ | 2,502,031 | | | | $ | 2,502,031 | | | | $ | 2,502,031 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 3,627,817 | | | | $ | 3,669,195 | | | | $ | 5,420,296 | | | | $ | 3,627,817 | | | | Severance(1) | | | $ | 1,940,625 | | | | | — | | | | $ | 2,910,938 | | | | | — | | | | | | Bonus(2) | | | $ | 785,233 | | | | | — | | | | $ | 785,233 | | | | $ | 785,233 | | | Continuation of Benefits(5) | | | $ | 22,443 | | | | | — | | | | $ | 33,665 | | | | | — | | | | Time Vesting RSUs(3) | | | $ | 1,602,376 | | | | $ | 2,306,491 | | | | $ | 2,306,491 | | | | $ | 2,306,491 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 2,522,994 | | | | $ | 3,605,091 | | | | $ | 7,210,123 | | | | $ | 2,522,994 | | | Other Benefits(6) | | | $ | 40,385 | | | | | — | | | | $ | 40,385 | | | | | — | | | | Continuation of Benefits(5) | | | $ | 7,035 | | | | | — | | | | $ | 10,553 | | | | | — | | | | | | Other Benefits(6) | | | $ | 125,234 | | | | | — | | | | $ | 125,234 | | | | | — | | | Total | | | $ | 8,718,787 | | | | $ | 6,171,226 | | | | $ | 12,175,281 | | | | $ | 6,765,002 | | | | Total | | | $ | 6,983,497 | | | | $ | 5,911,582 | | | | $ | 13,348,572 | | | | $ | 5,614,718 | | | | Mark A. Solls | | | | | | | | | | | | | | | | | | | | | | | | | | | Severance(1) | | | $ | 900,000 | | | | | — | | | | $ | 1,350,000 | | | | | — | | | | | | Bonus(2) | | | $ | 484,467 | | | | | — | | | | $ | 484,467 | | | | $ | 484,467 | | | Severance(1) | | | $ | 1,000,000 | | | | | — | | | | $ | 1,500,000 | | | | | — | | | | Time Vesting RSUs(3) | | | $ | 259,390 | | | | $ | 595,564 | | | | $ | 595,564 | | | | $ | 595,564 | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 1,696,871 | | | | $ | 2,319,918 | | | | $ | 4,072,803 | | | | $ | 1,696,871 | | | Bonus(2) | | | $ | 364,462 | | | | | — | | | | $ | 364,462 | | | | $ | 364,462 | | | | Continuation of Benefits(5) | | | $ | 15,544 | | | | | — | | | | $ | 15,544 | | | | | — | | | | | | Other Benefits(6) | | | $ | 76,295 | | | | | — | | | | $ | 76,295 | | | | | — | | | Time Vesting RSUs(3) | | | $ | 1,067,722 | | | | $ | 1,255,965 | | | | $ | 1,255,965 | | | | $ | 1,255,965 | | | | Total | | | $ | 3,432,567 | | | | $ | 2,915,482 | | | | $ | 6,594,673 | | | | $ | 2,776,902 | | | | | | | Performance Vesting RSUs(3)(4) | | | $ | 1,670,659 | | | | $ | 1,683,730 | | | | $ | 2,464,803 | | | | $ | 1,670,659 | | | | | | Continuation of Benefits(5) | | | $ | 16,982 | | | | | — | | | | $ | 16,982 | | | | | — | | | | | | Other Benefits(6) | | | $ | 28,846 | | | | | — | | | | $ | 28,846 | | | | | — | | | | | | | Total | | | $ | 4,148,671 | | | | $ | 2,939,695 | | | | $ | 5,631,058 | | | | $ | 3,291,086 | |
| (1) | Severance represents a cash payment equal to the sum of the NEO’s (x) annual base salary and (y) annual cash incentive based on target performance times the multiplier applicable to such NEO, payable in equal monthly installments over the applicable severance period. |
| (2) | Under the Severance Plan, our NEOs are entitled to their annual cash incentive otherwise payable under the annual cash incentive program for the year in which the NEO’s termination occurred,pro-rated for days of service up to and including the termination date and based on actual performance for the year, payable concurrently with annual cash incentive payments to other employeesassociates under the applicable plan. |
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| Executive Compensation—Compensation Discussion and Analysis (continued) |
| (3) | All share values are based on the closing price of our common stock on the NYSE on December 31, 2019.2022. Earned awards under the 2019 Outperformance Program are reflected as time-vesting. |
| (4) | 20172020 LTIP Tranche 3 calculated at actual achievement: 200% 2017 LTIP Absolute138% TSR Relative to RMS Index CAGR; 93%and 200% Same Store NOI Growth CAGR. 2021 LTIP calculated at achievement as of December 31, 2022: 94% TSR Relative to RMS Index CAGR; and 128% AFFO per Share200% Same Store NOI Growth CAGR. All other performance vesting RSUs have been included in the above assuming performance2022 LTIP calculated at achievement as of December 31, 2022: 75% TSR Relative to RMS Index CAGR; and 0% Same Store NOI Growth CAGR. 2019 Outperformance Program actual achievement as of December 31, 2022: 100%. Relative TSR Component; and 100% Absolute TSR Component. 2022 Outperformance Program calculated at achievement as of December 31, 2022: 30% Relative TSR Component; and 0% Absolute TSR Component.
|
| (5) | Under the Severance Plan, NEOs are entitled to continuation of benefits. A cash payment in an amount equal to the total amount of the monthly COBRA insurance premiums for participation in the welfare benefit programs of the Company in which the NEO participated as of his or her termination date; amounts reflect 2019 rates.2021 rates multiplied by the applicable welfare period for each NEO. |
| (6) | Other Benefits includes payout of unused paid time off. |
| Executive Compensation—Compensation Discussion and Analysis(continued) |
Severance Plan As discussed above, in June 2017, we adopted the Severance Plan for employeesassociates of the Company at the level of Senior Vice President and above and selected by the Compensation Committee.above. Each of our NEOs participates in the Severance Plan. The Severance Plan provides for payment of severance and other benefits to eligible executives in the event of a termination of employment with us without cause or following a constructive termination (each as defined in the Severance Plan and each, a “qualifying termination”), or for a limited number of individuals, including our NEOs, the event of a termination with us as a result of death or disability (as such terms are defined in the Severance Plan), in each case, subject to the (i) executive’s execution andnon-revocation of a general release of claims in favor of the Company and (ii) continued compliance with the restrictive covenants related to post-employmentnon-solicitation andnon-competition for 12 months following any termination of employment and indefinite covenants covering trade secrets, confidentiality andnon-disparagement. In the event of a qualifying termination, in addition to specified accrued benefits, which the executive has earned but has not yet received and to which the executive is entitled, the Severance Plan provides for the following additional payments and benefits: alump-sumpro-rata annual cash incentive otherwise payable under the annual cash incentive program for the year of termination based on actual performance;
| • | | a lump-sum pro-rata annual cash incentive otherwise payable under the annual cash incentive program for the year of termination based on actual performance; |
a cash payment equal to the sum of the executive’s (x) annual base salary and (y) annual cash incentive based on target performance (the “cash severance amount”) times the multiplier applicable to such executive (which is 2.0 for Mr. Tanner, 1.5 for Messrs. Freedman and Young and 1.0 for Mr. Solls), payable in equal monthly installments over the applicable severance period (which is 24 months for Mr. Tanner, 18 months for Messrs. Freedman and Young and 12 months for Mr. Solls); and a cash payment in an amount equal to the total amount of monthly COBRA insurance premiums for continued participation in our welfare benefit programs, for a period of 12 months. Notwithstanding the foregoing, in the event such qualifying termination occurs during thetwo-year period following a change in control (as defined in the Severance Plan), in addition to specified accrued benefits, which the executive has earned but has not yet received and to which the executive is entitled, the Severance Plan provides for the following payments and benefits: alump-sumpro-rata annual cash incentive otherwise payable under the annual cash incentive program for the year of termination based on actual performance;
| • | | a lump-sum pro-rata annual cash incentive otherwise payable under the annual cash incentive program for the year of termination based on actual performance; |
alump-sum cash payment equal to the sum of the executive’s (x) annual base salary and (y) annual cash incentive based on target performance times the multiplier applicable to such executive (which is 3.0 for Mr. Tanner, 2.25 for Messrs. Freedman and Young and 1.5 for Mr. Solls); and
| • | | a lump-sum cash payment equal to the sum of the executive’s (x) annual base salary and (y) annual cash incentive based on target performance times the multiplier applicable to such executive (which is 3.0 for Mr. Tanner, 2.25 for Messrs. Freedman and Young and 1.5 for Mr. Solls); and |
a cash payment in an amount equal to the total amount of monthly COBRA insurance premiums for continued participation in our welfare benefit programs, for a period of 18 months for Messrs. Tanner, Freedman and Young and 12 months for Mr. Solls. In the event of a termination of employment with us as a result of the NEO’s death or disability (as defined in the Omnibus Incentive Plan), in addition to certain accrued obligations, which the NEO has earned and to which he is entitled, the Severance Plan provides for alump-sumpro-ratalump-sum pro-rata annual cash incentive for the year of termination, calculated based on the greater of (i) target annual cash incentive for the year of termination and (ii) the actual annual cash incentive paid in respect of the year prior to the year of termination. In addition, Mr. Freedman is entitled to reimbursement of reasonable relocation expenses if his employment is terminated by us without cause following specified circumstances involving a sale or liquidation of the Company. Mr. Freedman is also entitled to the payment of any taxes he incurs with these relocation reimbursements.
Retention RSUs
Pursuant to the terms of the Retention RSU award agreements, as modified by the Letter Agreements, if the NEO’s employment is earlier terminated by us without “cause” or by the executive upon a “constructive termination” (each as defined in the applicable award agreement for the Retention RSUs), the Retention RSUs will vest on the termination date.
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| Executive Compensation—Compensation Discussion and Analysis(continued) |
LTIP RSUs Time Vesting LTIP RSUs Upon a termination of the NEO’s employment by the Company without “cause” (as defined in the award agreement applicable to the, 2017, 20182020, 2021 and 20192022 LTIP RSUs (collectively, the “LTIP RSUs”)) or, if the NEO resigns from employment following a “constructive termination” (as defined in the award agreement applicable to the LTIP RSUs) (together with a termination without cause, a “qualifying involuntary termination”), the next installment of time vesting LTIP RSUs that would have vested on the next scheduled vesting date will vest as of the date of termination. Time vesting LTIP RSUs that are eligible to vest upon a qualifying involuntary termination are subject to the NEO’s execution andnon-revocation of a release of claims in favor of the Company. Upon a NEO’s death or a termination of the NEO’s employment by the Company following the NEO’s “disability” (as defined in the Omnibus Incentive Plan), any unvested time vesting LTIP RSUs will vest as of the date of termination. Time vesting LTIP RSUs will also continue to vest according to the original vesting schedule following the NEO’s “retirement” (as defined below) and will be subject to forfeiture if the NEO violates specified restrictive covenants agreed to with the Company and described below. Upon a change in control, if the time vesting LTIP RSUs are assumed by the successor or acquiror and a qualifying involuntary termination occurs during thetwo-year period following a change in control, any then-unvested time vesting LTIP RSUs will vest. Upon a change in control, if the time vesting LTIP RSUs are not assumed by the successor or acquiror, any then-unvested time vesting LTIP RSUs will immediately vest. For Messrs. Tanner, Freedman and Young, “retirement” is defined as a voluntary resignation of employment at such time that the NEO is at least 55 years old, the NEO has at least 10 years of continuous service and the sum of the NEO’s age and years of service equals at least 65, provided that the NEO has given at least six months’ prior notice of the NEO’s retirement. For Mr. Solls “retirement” is defined as a voluntary resignation of employment at such time that the NEO is at least 60 years old and the sum of the NEO’s age and years of service equals at least 65, provided that the NEO has given at least six months’ prior notice of the NEO’s retirement. Performance Vesting LTIP RSUs Performance vesting LTIP RSUs are earned on the Certification Date. These performance vesting LTIP RSUs will vest on the Certification Date, subject to the NEO’s continued employment through such Certification Date, except in the event of a qualifying involuntary termination as described below. Tranche 3 of the performance vesting 2017 LTIP RSUs that become earned shall become vested as to 50% of such earned RSUs on the applicable Certification Date, and as to the remaining 50% on the first anniversary of the last day of the applicable performance period, subject to the NEO’s continued employment through the vesting date except in the event of a qualifying involuntary termination as described below. Any unearned performance vesting LTIP RSUs will be forfeited without consideration. Notwithstanding the foregoing, upon a qualifying involuntary termination prior to the last day of any performance period, a prorated portion of the performance vesting LTIP RSUs will remain outstanding and eligible to vest based on actual performance through the last day of the applicable performance period, based on the number of days during the applicable performance period that the NEO was employed. Any performance vesting LTIP RSUs that are earned based on actual performance will vest on, and settle as soon as practicable following, the applicable Certification Date (or with respect to the Tranche 3 2017 LTIP RSUs, 50% on the applicable Certification Date, and the remaining 50% on the first anniversary of the last day of the applicable performance period).Date. Upon a qualifying involuntary termination following the last day of any performance period but prior to the Certification Date, any unearned and unvested performance vesting LTIP RSUs will vest on the applicable Certification Date based on actual performance as of the end of the performance period (or with respect to the Tranche 3 2017 LTIP RSUs, 50% on the applicable Certification Date, and the remaining 50% on the first anniversary of the last day of the applicable performance period).period. Upon a qualifying involuntary termination following the Certification Date where such performance vesting LTIP RSUs are subject to continued service vesting conditions, such earned but unvested performance vesting LTIP RSUs will vest on the NEO’s termination date. Performance vesting LTIP RSUs that are eligible to vest upon a qualifying involuntary termination are subject to the NEO’s execution andnon-revocation of a release of claims in favor of the Company. Upon a NEO’s death or a termination of the NEO’s employment by the Company following the NEO’s “disability,” with respect to performance vesting LTIP RSUs for which the applicable performance period has not been completed, a prorated portion of the Performance Vesting RSUs will remain outstanding and eligible to vest based on actual
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
performance on the last day of the performance period, with such proration based on the number of days the NEO was employed during the performance period. Following the NEO’s “retirement,” a prorated number of performance vesting LTIP RSUs shall remain outstanding and eligible to become earned, based on the extent to which the performance conditions are satisfied following the completion of the performance period, with such proration based on the number of days the NEO was employed during the performance period. Upon a change in control, the number of performance vesting LTIP RSUs that become earned will be calculated based on actual performance through the date of the change in control without proration. Any performance vesting LTIP RSUs will vest as to 50% of such earned performance vesting LTIP RSUs on the date of the change in control and, as to the remaining 50% on the first anniversary of the change in control (or, in each case, upon a qualifying involuntary termination | | | | | | | | | |
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| Executive Compensation—Compensation Discussion and Analysis (continued) |
that occurs within thetwo-year period following the change in control). If the awards are not assumed by the successor or acquiror, or are unable to be measured in a consistent manner, any earned performance vesting LTIP RSUs (including the performance vesting LTIP RSUs that become earned in connection with the change in control) will immediately vest as of the change in control. 2018 Supplemental Bonus Award2019 and 2022 Outperformance Program Awards
InFollowing March 31, 2022, the eventlast day of the 2019 Outperformance Program performance period, the award value was calculated and a qualifying termination,number of OP Units with a value equal to the award value (obtained using the closing price per share on April 7, 2022 (the “2019 Outperformance Program Determination Date”)) became earned OP Units, based on actual performance during the performance period. 50% of the earned OP Units vested on the 2019 Outperformance Program Determination Date. An additional 25% of the earned OP Units vested on March 31, 2023, the first anniversary of the last day of the performance period; and the remaining 25% of the earned OP Units will vest on March 31, 2024, the second anniversary of the last day of the performance period, subject to the NEO’s execution andnon-revocation of the Company’s standard form of release of claims, the next installment of Supplemental Bonus Award RSUs which could become vested in accordance with the award notice shall become vested and settled.
In the event the NEO’scontinued employment or service with the Company is terminated by the Company following the NEO’s death or during the NEO’s disability, subject to the NEO’s or executor’s execution andnon-revocation of the Company’s standard form of release of claims, the Supplemental Bonus Award RSUs shall become vested as of the termination date and settled as soon as practicable following the termination date.
In the event of a NEO’s retirement following written notice at least six months prior to the date of the NEO’s resignation, the Supplemental Bonus Award RSUs outstanding shall remain outstanding and eligible to vest so long as no Restrictive Covenant Violation occurs, as determined by the Committee, or its designee, in its sole discretion, prior toon the applicable vesting date.
2019 Outperformance Program Awards
Following calculation of the award value under the 2022 Outperformance Program, a number of OP Units with a value equal to the award value (obtained using the closing price per share on the date that is not later than 30 days following the last day of the applicable2022 Outperformance Program performance period (the “Determination“2022 Outperformance Program Determination Date”)) shall become earned OP Units, based on actual performance during the performance period. Any unearned OP Units shall be forfeited effective as of the last day of the performance period. 50% of the earned OP Units shall become vestedwill vest on the 2022 Outperformance Program Determination Date. An additional 25%Date; and the remaining 50% of the earned OP Units shall become vestedwill vest on the first anniversary of the last day of the performance period and the remaining 25% of the earned OP Units shall become vested on the second anniversary of the last day of the performance period, subject to continued employment on the applicable vesting date, except in the event of a qualifying involuntary termination as described below. Notwithstanding the foregoing, upon a qualifying involuntary termination prior to the last day of anythe 2022 Outperformance Program performance period, a prorated portion of the maximum award value will remain outstanding and eligible to vest based on actual performance through the last day of the applicable performance period, based on the number of days the NEO was employed during the performance period. Any OP Units that become earned OP Units following the 2022 Outperformance Program Determination Date, based on the prorated award value shall become fully vested on thesuch Determination Date. Upon a NEO’s death or a termination of the NEO’s employment by the Company following the NEO’s “disability,” with respect to OP Units for which the applicable2022 Outperformance Program performance period has not been completed, a prorated portion of the maximum award value will remain outstanding and eligible to be earned based on actual performance on the last day of the performance period, with such proration based on the number of days the NEO was employed during the performance period. In the event of a NEO’s retirement prior to the end of the 2022 Outperformance Program performance period, following written notice at least six months prior to the date of the NEO’s resignation, a prorated portion of the maximum award value will remain outstanding and eligible to be earned based on actual performance on the last day of the performance period. The proration would be based on the number of days the NEO was employed during the performance period. Any OP Units
| Executive Compensation—Compensation Discussion and Analysis(continued)
|
that become earned OP Units following the 2022 Outperformance Program Determination Date shall remain outstanding and eligible to vest. In the event of a NEO’s retirement following the end of the performance period, with respect to any OP Units that have become earned OP Units prior to the termination date, such earned OP Units shall remain outstanding and eligible to vest. Upon a change in control, the award value will be calculated based on actual performance through the date of the change in control without proration. Earned OP Units shall become vested as to 50% as of the date of the change in control, and 5050% on the first anniversary of the date of the change in control. In the event of a qualifying termination during the12-month period immediately following a change in control, any unvested earned OP Units shall become vested as of the termination date. If the awards are not assumed by the successor or acquiror, or are unable to be measured in a consistent manner, any earned OP Units (including the earned OP units that become earned in connection with the change in control) will immediately vest as of the change in control. Covenants Each NEO is subject to restrictive covenants set forth in the Severance Plan, including an indefinite confidentiality covenant and covenants regardingnon-competition andnon-solicitation of employees and current or prospective clients or customers, in each case, at all times during employment and for up to 12 months after termination of employment. Under the LTIP award agreements and our 2019 and 2022 Outperformance Program,Programs, if there is a restrictive covenant violation or the executive grantee engages in a detrimental activity (as defined in the applicable award agreement) in the four-year period following the grant date, the executive will be required to pay the Company an amount equal to theafter-tax proceeds received upon the sale or disposition of the equity award and any shares issued in respect thereof.
| Executive Compensation—Compensation Discussion and Analysis (continued) |
CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K of the Exchange Act, we are providing the following information regarding the ratio of the annual total compensation for our principal executive officer to the median of the annual total compensation of all our employeesassociates (other than our principal executive officer) (the “CEO Pay Ratio”). Our CEO Pay Ratio is a reasonable estimate calculated in a manner consistent with Item 402(u). We selected the median associate based on the 1,1391,510 associates employed by the Company as of December 31, 20192022 (excluding Mr. Tanner, our President and CEO). In identifying our median associate, we calculated the annual total target cash compensation of each associate as of December 31, 2019.2022. Annual total target cash compensation included base salary and target bonus and was calculated using internal human resources records. We believe this consistently applied compensation measure reasonably reflects annual compensation across our employeeassociate base. We did not applycost-of-living adjustments as part of the calculation. The 20192022 annual total compensation as determined under Item 402(c)(2)(x) of RegulationS-K for our CEO, which is the amount set forth in the “Total” column of our Summary Compensation Table, was $6,291,215.$14,166,554. The 20192022 annual total compensation as determined under Item 402(c)(2)(x) of RegulationS-K for our median associate was $57,644.$69,083. Our CEO Pay Ratio was, therefore, 109205 to 1. | | | | | | | | 63 | | | 2020 Proxy Statement
| | 73 |
PROPOSAL NO. 3—NON-BINDING ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, we are including in these proxy materials a separate resolution subject to stockholder vote to approve, in a non-binding advisory vote, the compensation paid to our NEOs as disclosed in this Proxy Statement. While the results of the vote are non-binding and advisory in nature, the Compensation and Management Development Committee and the Board intend to carefully consider the results of this vote. The text of the resolution in respect of Proposal No. 3 is as follows: “RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to the rules of the SEC, including the Compensation Discussion and Analysis, compensation tables and any related narrative discussion, is hereby approved, on a non-binding advisory basis.” In considering their vote, stockholders may wish to review with care the information on our compensation policies and decisions regarding the NEOs presented in “Compensation Discussion and Analysis,” the compensation tables and other related material disclosed in this Proxy Statement.
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| | Board Recommendation | | | The Board of Directors unanimously recommends that you vote “FOR” the approval, on a non-binding advisory basis, of the compensation paid to our named executive officers. |
PAY VERSUS PERFORMANCE As required by Section 953(a) of the Dodd-Frank Wall Street Reform andConsumer Protection Act andItem 402(v) of RegulationS-K under the Exchange Act, we provide the following disclosure regarding executive “compensation actually paid” (“CAP”), calculated in accordance with the requirements of Item 402(v), and certain Company performance for the fiscal years listed below. The Company’s selected performance measure included in the table below is AFFO (as defined in “Executive Compensation—Compensation Discussion and Analysis” above). This disclosure was prepared in accordance with the requirements of Item 402(v) and does not necessarily reflect the value actually realized by our NEOs our NEOs’ compensation relates to Company performance, or how the Compensation and Management Development Committee evaluates compensation decisions in light of Company or individual performance. Please refer to “Executive Compensation—Compensation Discussion and Analysis” above for a complete description of how our executive compensation relates to Company performance and how the Committee makes its compensation decisions. The information provided under this Pay Versus Performance section will not be deemed to be incorporated by reference into any filing made by the Company under the Securities Act of 1933, or the Exchange Act, except to the extent the Company specifically incorporates it by reference. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Value of Initial Fixed $100
Investment Based on: | | | | | | | | | | | | | | | | | | | | | Compensation Actually Paid to CEO ($) (2) | | | Average Summary Compensation Table Total for Non-CEO NEOs | | | Average Compensation Actually Paid to Non-CEO NEOs | | | | | | Peer Group Total Shareholder Return | | | | Adjusted
Funds from
Operations | | | | | | | | | | | | | 2022 | | | $14,166,554 | | | | ($ 3,988,645 | ) | | | $4,760,868 | | | | ($ 1,648,807 | ) | | | $105.52 | | | $99.82 | | $384,799 | | | $865,897 | | | | | | | | | | | | | 2021 | | | $ 9,710,445 | | | | $31,935,295 | | | | $3,267,111 | | | | $ 12,172,142 | | | | $157.51 | | | $132.23 | | $262,776 | | | $745,561 | | | | | | | | | | | | | 2020 | | | $ 5,518,018 | | | | $ 4,797,919 | | | | $2,573,039 | | | | $ 2,200,487 | | | | $101.25 | | | $92.43 | | $197,449 | | | $602,402 | |
| (1) | Reflects compensation amounts reported in the “Total” column of the Summary Compensation Table for our CEO, Dallas B. Tanner, in each of 2022, 2021 and 2020. |
| (2) | CAP to our CEO in each of 2022, 2021 and 2020 reflects the respective amounts reported in the “Total” column of the Summary Compensation Table, adjusted as set forth in the table below, as determined in accordance with Item 402(v) of RegulationS-K. The amounts do not reflect the actual amount of compensation earned by or paid to Mr. Tanner during the applicable year. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dallas B. Tanner | | | | | Dallas B. Tanner | | | | | Dallas B. Tanner | | | | | | | | Summary Compensation Table Total Compensation | | | | $ 5,518,018 | | | | | $ 9,710,445 | | | | | $ 14,166,554 | | | | | | | | Less: Stock and Option Award Values Reported in Summary Compensation Table for the Covered Year ($) | | | | (3,625,057 | ) | | | | (6,500,037 | ) | | | | (12,023,478 | ) | | | | | | | Plus: Fair Value for Stock and Options Awards Granted in the Covered Year ($) | | | | 3,240,949 | | | | | 14,797,038 | | | | | 6,849,983 | | | | | | | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | | | (335,991 | ) | | | | 13,927,849 | | | | | (12,981,704 | ) | | | | | | | Less: Fair Value of Stock and Option Awards Forfeited During the Covered Year | | | | — | | | | | — | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | Compensation Actually Paid ($) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (3) | Represents the average of the amounts reported for the Company’snon-CEO NEOs as a group in the “Total” column of the Summary Compensation Table in each applicable year. The following NEOs are included in the average calculation for each of 2022, 2021 and 2020: Ernest M. Freedman, Charles D. Young, and Mark A. Solls. |
| (4) | Average CAP to ournon-CEO NEOs, as a group, in each of 2022, 2021 and 2020 reflects the respective amounts reported in the “Total” column of the Summary Compensation Table, adjusted as set forth in the table below, as determined in accordance with Item 402(v) of RegulationS-K. The amounts do not reflect the actual average amount of compensation earned by or paid to thenon-CEO NEOs as a group during the applicable year. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Summary Compensation Table Total Compensation | | | $ | 2,573,039 | | | | $ | 3,267,111 | | | | $ | 4,760,868 | | | | | | | | Less: Stock and Option Award Values Reported in Summary Compensation Table for the Covered Year ($) | | | | (1,400,045 | ) | | | | (1,475,033 | ) | | | | (3,570,411 | ) | | | | | | | Plus: Fair Value for Stock and Options Awards Granted in the Covered Year ($) | | | | 1,251,696 | | | | | 3,357,853 | | | | | 2,084,989 | | | | | | | | Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | | | (224,203 | ) | | | | 7,022,211 | | | | | (4,924,253 | ) | | | | | | | Less: Fair Value of Stock and Option Awards Forfeited During the Covered Year | | | | — | | | | | — | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | Compensation Actually Paid ($) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (5) | For the applicable fiscal year, represents the cumulative TSR of the Company for the measurement periods beginning December 31, 2019, and ending on December 30, of 2022, December 31, 2021, or December 31, 2020. |
| (6) | For the applicable fiscal year, represents the cumulative TSR of the MSCI US REIT Index for the measurement periods ending on December 30, 2022, December 31, 2021, or December 31, 2020. |
| (7) | Reflects GAAP net income. |
| (8) | Company-selected measure is AFFO which is defined in “Executive Compensation—Compensation Discussion and Analysis” above. See Part II. Item 7. “Management’s Discussion and Analysis of Financial Condition and Results ofOperations—Non-GAAP Measures” in our 2022 Form10-K for the reconciliation of AFFO to net income (loss) (as determined in accordance with GAAP), the most directly comparable GAAP measure. Although AFFO is an important financial performance measure, among others, that the Compensation and Management Development Committee considers when making compensation decisions with the intent of aligning compensation with Company performance, the Committee has not historically and does not currently evaluate CAP as calculated pursuant to Item 402(v) as part of its executive compensation determinations. |
Relationship Between Compensation Actually Paid and Performance Measures CAP, as calculated under Item 402(v) of RegulationS-K, reflectsadjusted values tounvested andvested equity awards during the years shown in the Pay Versus Performance table based onyear-end stock prices, various accounting valuation assumptions, and projected performance modifiers but does not reflect actual amounts paid out for those awards. CAP generally fluctuates due to stock price achievement and varying levels of projected and actual achievement of performance goals.
As discussed in the in “Executive Compensation—Compensation Discussion and Analysis,” our compensation program is heavily weighted towards performance-based compensation, reflecting our philosophy of increasing the long-term value of the Company and supporting strategic and operational objectives. The metrics used within our annual cash incentive plan and our long-term incentive award plans are selected to support these objectives. In our assessment, the most important financial performance measures used to link CAP (as calculated in accordance with Item 402(v) of RegulationS-K) to our NEOs in 2022 to our performance were: Three-year TSR; Net income; and AFFO.
EQUITY COMPENSATION PLAN INFORMATION The following table provides information as of December 31, 2019,2022 regarding shares of our common stock that may be issued under the Omnibus Incentive Plan and the Colony Starwood Homes Equity Plan and the Starwood Waypoint Residential TrustNon-Executive Trustee Share Plan (the “SWH Equity Plans”): | | | | | | | | | | | | | | | | | | As of December 31, 2019 | | | As of December 31, 2022 | | | | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(2) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans(3) | | | | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | | | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(2) | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation
Plans(3) | | | | | Equity compensation plans approved by stockholders: | | | | | | | | | | | | | | | | Incentive Plan | | | 3,431,197 | | | | — | | | | 9,748,201 | | | | | | | | Omnibus Incentive Plan | | | | | 5,399,747 | | | | — | | | | 5,847,253 | | | | | | | SWH Equity Plans(4) | | | 61,561 | | | | — | | | | — | | | | | — | | | | — | | | | — | | | | | | | Equity compensation plans not approved by stockholders | | | — | | | | — | | | | — | | | | | — | | | | — | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | Total | | | 3,492,758 | | | | — | | | | 9,748,201 | | | | | 5,399,747 | | | | — | | | | 5,847,253 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) | Includes shares of our common stock that may be issued upon the vesting of time vesting and performance vesting RSUs. The number of shares to be issued in respect of performance vesting RSUs has been calculated assuming maximum levels of performance will be achieved. |
| (2) | Because there is no exercise price associated with RSUs, no amounts are included above. |
| (3) | Excludes securities reflected in the Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights column above. |
| (4) | On November 16, 2017, in connection with the Merger,merger with SWH, we assumed the SWH Equity Plans. As the SWH Equity Plans were previously approved by SWH’s shareholdersstockholders before we assumed these plans, and as we will not make future grants or awards under these plans, they are listed as “approved by stockholders.” As such, 4,845,3834,866,890 securities remaining available under the SWH Equity Plans have been excluded from the table above. |
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| | 81 |
OWNERSHIP OF SECURITIES The following table sets forth information regarding the beneficial ownership of shares of our common stock as of the Record Date held by (1) each person known to us to beneficially own more than 5% of our outstanding common stock, (2) each of our directors, director nominees and NEOs and (3) all of our directors and executive officers as a group. Beneficial ownership is determined in accordance with the rules of the SEC. Unless otherwise noted, the address of each beneficial owner is 1717 Main Street, Suite 2000, Dallas, Texas 75201. The percentages included in the following table are based on 543,767,445611,860,563 shares of our common stock outstanding as of the Record Date. | | | | | | | | | | | | Beneficial Owner | | Number of Shares of Common Stock Beneficially Owned | | | Percentage of Common Stock Beneficially Owned | | Owners of More Than 5% | | | | | | | | | The Vanguard Group(1) | | | 80,801,999 | | | | 15.00% | | Blackrock, Inc.(2) | | | 46,061,190 | | | | 8.6% | | Cohen & Steers, Inc(3) | | | 37,734,311 | | | | 7.01% | | Directors, Director Nominees and NEOs | | | | | | | | | Bryce Blair(4) | | | 335,543 | | | | * | | Jana Cohen Barbe(4) | | | 8,937 | | | | * | | Richard D. Bronson(4) | | | 39,147 | | | | * | | Kenneth A. Caplan | | | 44,577 | | | | * | | Michael D. Fascitelli(4) | | | 49,067 | | | | * | | Robert G. Harper | | | — | | | | * | | Jeffrey E. Kelter(4) | | | 55,371 | | | | * | | Joseph D. Margolis | | | — | | | | * | | John B. Rhea(4) | | | 30,687 | | | | * | | J. Heidi Roizen | | | — | | | | * | | Janice L. Sears(4)(5) | | | 29,687 | | | | * | | William J. Stein | | | 32,407 | | | | * | | Barry S. Sternlicht(4)(5) | | | 15,265 | | | | * | | Dallas B. Tanner | | | 183,274 | | | | * | | Ernest M. Freedman | | | 259,049 | | | | * | | Charles D. Young | | | 97,281 | | | | * | | Mark A. Solls | | | 77,142 | | | | * | | All Directors and Executive Officers as a Group (15 persons) | | | 1,257,434 | | | | * | |
| | | | | | | | | | | Beneficial Owner | | Number of Shares of Common Stock Beneficially Owned | | Percentage of Common Stock Beneficially Owned | | | | Owners of More Than 5% | | | | | | | | | | | | | | The Vanguard Group(1) | | | | 98,242,458 | | | | | 16.06 | % | | | | Cohen & Steers, Inc.(2) | | | | 78,466,392 | | | | | 12.82 | % | | | | Blackrock, Inc.(3) | | | | 59,299,124 | | | | | 9.69 | % | | | | State Street Corporation(4) | | | | 38,681,639 | | | | | 6.32 | % | | | | Norges Bank (The Central Bank of Norway)(5) | | | | 38,026,599 | | | | | 6.21 | % | | | | Directors, Director Nominees and NEOs | | | | | | | | | | | | | | Jana Cohen Barbe(6) | | | | 24,283 | | | | | | * | | | | Richard D. Bronson(6) | | | | 54,493 | | | | | | * | | | | Michael D. Fascitelli(6) | | | | 64,413 | | | | | | * | | | | Jeffrey E. Kelter(6) | | | | 70,717 | | | | | | * | | | | Joseph D. Margolis(6) | | | | 15,346 | | | | | | * | | | | John B. Rhea(6) | | | | 46,033 | | | | | | * | | | | J. Heidi Roizen(6) | | | | 15,346 | | | | | | * | | | | Janice L. Sears(6)(7) | | | | 42,183 | | | | | | * | | | | Frances Aldrich Sevilla-Sacasa | | | | — | | | | | | * | | | | Dallas B. Tanner(8) | | | | 517,393 | | | | | | * | | | | Keith D. Taylor | | | | — | | | | | | * | | | | Ernest M. Freedman(8) | | | | 527,393 | | | | | | * | | | | Charles D. Young(8) | | | | 269,523 | | | | | | * | | | | Mark A. Solls(8) | | | | 204,746 | | | | | | * | | | | All Directors and Executive Officers as a Group (14 persons) | | | | 1,851,906 | | | | | | * |
| (1) | As reported in a Schedule 13G/A filed with the SEC on February 11, 2020,9, 2023, on behalf of The Vanguard Group, and its wholly-owned subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd., theThe Vanguard Group has sole voting power with respect to 956,6520 shares of our common stock, shared voting power with respect to 655,9501,371,775 shares of our common stock, sole dispositive power with respect to 79,817,61095,264,205 shares of our common stock and shared dispositive power with respect to 984,3892,978,253 shares of our common stock. The address of The Vanguard Group isis: 100 Vanguard Blvd., Malvern, PennsylvaniaPA 19355. |
| (2) | As reported in a Schedule 13G filed with the SEC on February 10, 2020, on behalf of BlackRock Inc. and its wholly-owned subsidiaries identified therein, BlackRock Inc. has sole voting power with respect to 42,015,902 shares of our common stock, shared voting power with respect 0 shares of our common stock, sole dispositive power with respect to 46,061,190 shares of our |
| Ownership of Securities(continued)
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| common stock and shared dispositive power with respect to 0 shares of our common stock. The address of BlackRock Inc. is 55 East 52nd Street, New York, NY 10055. |
(3) | As reported in a Schedule 13G/A filed jointly with the SEC on February 14, 2020,2023, by Cohen & Steers, Inc., Cohen & Steers Capital Management, Inc., Cohen & Steers UK Ltd, Cohen & Steers Asia Ltd, and Cohen & Steers Ireland Ltd. Cohen & Steers, Inc. holds a 100% interest in Cohen & Steers Capital Management, Inc., Cohen & Steers UK Ltd., Cohen & Steers Asia Ltd. and Cohen & Steers Ireland Ltd. Cohen & Steers, Inc. has sole voting power with respect to 23,945,54156,164,413 shares of our common stock, shared voting power with respect to 0 shares of our common stock, sole dispositive power with respect to 37,734,31178,466,392 shares of our common stock and shared dispositive power with respect to 0 shares of our common stock (including: Cohen & Steers Capital Management, Inc.’s sole voting power with respect to 23,836,635 shares of our common stock, shared voting power with respect to 0 shares of our common stock, sole dispositive power with respect to 36,942,197 shares of our common stock and shared dispositive power with respect to 0 shares of our common stock; and Cohen & Steers UK Limited’s sole voting power with respect to 108,906 shares of our common stock, shared voting power with respect to 0 shares of our common stock, sole dispositive power with respect to 792,114 shares of our common stock and shared dispositive power with respect to 0 shares of our common stock).stock. Address of Principal Business Office for Cohen & Steers, Inc. and Cohen & Steers Capital Management, Inc. is: 280 Park Avenue, 10th Floor, New York, NY 10017. The principal address for Cohen & Steers UK Ltd. is: 50 Pall Mall, 7th Floor London, United Kingdom SW1Y 5JH. The principal address for Cohen & Steers Asia Ltd. is: 1201-02 Champion Tower, Three Garden Road, Central, Hong Kong. The principal address for Cohen & Steers Ireland Ltd. is: 77 Sir John Rogerson’s Quay, Block C, Grand Canal Docklands, Dublin 2, D02 VK60.
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| Ownership of Securities (continued) |
| (3) | As reported in a Schedule 13G/A filed with the SEC on January 24, 2023, on behalf of BlackRock, Inc. and its wholly-owned subsidiaries identified therein, BlackRock, Inc. has sole voting power with respect to 54,145,816 shares of our common stock, shared voting power with respect to 0 shares of our common stock, sole dispositive power with respect to 59,299,124 shares of our common stock and shared dispositive power with respect to 0 shares of our common stock. The address of BlackRock, Inc. is: 55 East 52nd Street, New York, NY 10055. |
| (4) | As reported in a Schedule 13G filed with the SEC on February 3, 2023, on behalf of State Street Corporation and its wholly-owned subsidiaries identified therein, State Street Corporation has sole voting power with respect to 0 shares of our common stock, shared voting power with respect to 28,696,969 shares of our common stock, sole dispositive power with respect to 0 shares of our common stock and shared dispositive power with respect to 38,645,748 shares of our common stock. The address of State Street Corporation is: One Lincoln Street, Boston, MA 02111. |
| (5) | As reported in a Schedule 13G/A filed with the SEC on February 14, 2023, on behalf of Norges Bank (The Central Bank of Norway), Norges Bank has sole voting power with respect to 38,026,599 shares of our common stock, shared voting power with respect to 0 shares of our common stock, sole dispositive power with respect to 38,026,599 shares of our common stock and shared dispositive power with respect to 0 shares of our common stock. The address of Norges Bank is: Bankplassen 2, PO Box 1179 Sentrum, NO 0107 Oslo, Norway. |
| (6) | Includes 4,614 director RSUs scheduled to vest within 60 days of March 25, 2020: 5,705 RSUs for each of Ms. Barbe, Messrs. Bronson, Fascitelli, Kelter, Rhea and Sternlicht, and Ms. Sears; and 13,769 RSUs for Mr. Blair.the Record Date. |
(5)(7) | For Ms. Sears, includes 5,000 shares of our common stock held by a trust for the benefit of Ms. Sears’ family, for which she serves as trustee. For Mr. Sternlicht, includes 4,078 |
| (8) | Includes the number of shares of ourthe Company’s common stock heldthat could be issued if the OP Units under the 2019 Outperformance Program, beneficially owned by Starwood Capital Group Global, L.P. (“Starwood Capital”) and SPT Management, LLC, entities controlled by Mr. Sternlicht, and excludes 3,463,285a person listed in the table are converted into common limited partnership units of Operating Partnership, which in turn are redeemed for shares of the Company’s common stock on a one-for-one basis, and the Company elects to issue shares of common stock in exchange for such common limited partnership interest inunits of the Operating Partnership redeemablerather than pay cash upon such redemption, as follows: Mr. Tanner—110,403 (includes 36,801 OP Units scheduled to vest within 60 days of the Record Date, and excludes 36,801 OP Units scheduled to vest on March 31, 2024); Mr. Freedman—82,975 (includes 27,658 OP Units scheduled to vest within 60 days of the Record Date, and excludes 27,658 OP Units scheduled to vest on March 31, 2024); Mr. Young—79,869 (includes 26,623 OP Units scheduled to vest within 60 days of the Record Date, and excludes 26,623 OP Units scheduled to vest on March 31, 2024); and Mr. Solls—44,161 (includes 14,720 OP Units scheduled to vest within 60 days of the Record Date, and excludes 14,720 OP Units scheduled to vest on March 31, 2024). Beneficial ownership calculations assume that all such OP Units are converted into common limited partnership units of the Operating Partnership, which in turn are redeemed for shares of ourthe Company’s common stock on aone-for-one basis orstock. See “Compensation Discussion and Analysis—Determination of Compensation—2019 Outperformance Equity-Based Awards” for cash at our discretion, held by Starwood Capital.additional details of these awards. |
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DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act requires executive officers and directors, a company’s chief accounting officer and persons who beneficially own more than 10% of a company’s common stock, to file initial reports of ownership and reports of changes in ownership with the SEC and the NYSE.
Based solely on our review of copies of such reports and written representations from our executive officers and directors, we believe that our executive officers, directors and beneficial owners with more than 10% of our common stock filed all reports required by Section 16(a) of the Exchange Act on a timely basis, except that Mr. Blair filed one late Form 4 relative to stock acquisition resulting from an automatic brokerage dividend reinvestment program.
TRANSACTIONS WITH RELATED PERSONS Stockholders Agreement
In connection with our IPO, we entered into the Stockholders Agreement with affiliates of Blackstone, which agreement was amended and restated in connection with the Merger. The Stockholders Agreement required us to nominate a number of individuals designated by Blackstone for election as our directors at any meeting of our stockholders, based on the percentage of Blackstone’s beneficial ownership of the outstanding shares of our common stock. Following the sale by Blackstone of all of its shares of our common stock in November 2019, the Stockholders Agreement is no longer in effect.
Registration Rights Agreement In October 2016, SWH, Starwood Capital Group and certain other parties entered into an amended and restated registration rights agreement (the “SWH Registration Rights Agreement”) and, pursuant to the terms of the merger agreement, we entered into an assignment and assumption agreement whereby we assumed, all rights, interests and obligations, under the SWH Registration Rights Agreement. Pursuant to the SWH Registration Rights Agreement, Starwood Capital will have certain rights to demand a registration of some or all of its shares of our common stock and customary “piggyback” registration rights. Indemnification Agreements Our directors and executive officers are parties to indemnification agreements. These agreements require us to indemnify these individuals to the fullest extent permitted by Maryland law against liabilities that may arise by reason of their service to us, and to advance expenses incurred as a result of any proceeding against them as to which they could be indemnified. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors or executive officers, we have been informed that in the opinion of the SEC such indemnification is against public policy and is therefore unenforceable. Related Person Transaction Policy Our Board recognizes the fact that transactions with related persons present a heightened risk of conflicts of interests and/or improper valuation (or the perception thereof). Our Board has adopted a written policy regarding transactions with related persons. Our related person policy requires that a “related person” (as defined in Item 404(a) of RegulationS-K)S-K of the Exchange Act) must promptly disclose to the Office of our Chief Legal Officer any “related person transaction” (defined as any transaction that is anticipated would be reportable by us under Item 404(a) of RegulationS-K in which we were or are to be a participant and the amount involved exceeds $120,000 and in which any related person had or will have a direct or indirect material interest) and all material facts with respect thereto. The Office of the Chief Legal Officer will then will promptly communicate thatsuch information to the Board, its Audit Committee or such other committeeanother independent body of the Board designated by the Boardconsisting of independent directors who are disinterested to approve or ratify the related person transaction. Each related person transaction shall either be approved or ratified by ourthe Audit Committee or another independent body of the Board or a duly authorized committee thereof,consisting of independent directors who are disinterested, as applicable, taking into consideration such relevant facts and circumstances as it shall deem appropriate, which may include: the relationship of the related person to the Company; the nature and extent of the related person’s interest in the transaction; the material terms of the transaction; the importance and fairness of the transaction both to the Company and to the related person; the business rationale for engaging in the transaction;
| Transactions with Related Persons(continued)
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related person; whether the transaction would likely impair the judgment of a director or executive officer to act in the best interest of the Company; and
| • | | whether the value and the terms of the transaction are substantially similar as compared to those of similar transactions previously entered into by the Company with non-related persons, if any; and |
any other matters that disinterested members of the transactionAudit Committee or another independent body of the Board consisting of independent directors who are substantially similardisinterested, as compared to thoseapplicable, deem appropriate. The Audit Committee or another independent body of similar transactions previously entered into by the Company withnon-related persons, if any. The Board or duly authorized committeeconsisting of independent directors who are disinterested shall also consider whether any such transaction involving anon-employee director or nominee for director would compromise such director’s status as an independent director under the rules of the NYSE, including any additional independence requirements specific to a committee set forth in such rules if such non-employee director or nominee serves or is expected to serve on such committee, or the Company’s independence standards included in our Corporate Governance Guidelines, as a“non-employee director” under Rule16b-3 under the Exchange Act if such director serves on our Compensation and Management Development Committee or as an independent director under Rule10A-3 of the Exchange Act if such director serves on our Audit Committee. It is our policy that directors interested in a related person transaction will recuse themselves from any vote on a related person transaction in which they have an interest. Further, any employment relationship or transaction involving an executive officer of the Company or any related compensation must be approved by the Compensation and Management Development Committee or recommended by the Committee to the Board for its approval. | | | | | 2020 Proxy Statement | | 68 | | | | 84 | | 2023 Proxy Statement | | |
STOCKHOLDER PROPOSALS FOR THE 20212024 ANNUAL MEETING If any stockholder wishes to propose a matter for consideration at our 20212024 Annual Meeting, the proposal should be mailed by certified mail return receipt requested, to our Corporate Secretary, Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201. To be eligible under the SEC’s stockholder proposal rule (Rule14a-8(e) of the Exchange Act) for inclusion in our 20212024 Annual Meeting Proxy Statement and form of proxy, a proposal must be received by our Secretary on or before December 8, 2020.7, 2023. Failure to deliver a proposal in accordance with this procedure may result in it not being deemed timely received. In addition, our Bylaws permit stockholders to nominate candidates for director and present other business for consideration at our Annual Meeting of Stockholders. To make a director nomination or present other business for consideration at the 20212024 Annual Meeting, a stockholder must submit a timely notice in accordance with the procedures described in our Bylaws. To be timely, a stockholder’s notice must be delivered to the Secretary at the principal executive offices of our Company not earlier than the 150th day and not later than 5:00 p.m., Eastern Central Time, on the 120th day prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting. Therefore, to be presented at our 20212024 Annual Meeting, such a proposal must be received on or after November 8, 2020,7, 2023, but not later than December 8, 2020.7, 2023. In the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, in order for notice by the stockholder to be timely, such notice must be so delivered not earlier than the 150th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern Central Time, on the later of the 120th day prior to the date of such annual meeting, as originally convened, or the 10th day following the day on which public announcement of the date of such meeting is first made. Any such proposal will be considered timely only if it is otherwise in compliance with the requirements set forth in our Bylaws. The proxy solicited by the Board for the 20212024 Annual Meeting will confer discretionary authority to vote as the proxy holders deem advisable on such stockholder proposals that are considered untimely. In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules stockholders who intend to solicit proxies in support of director nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 18, 2024. For information regarding submission of a director nominee using the Company’s proxy access bylaw see “The Board of Directors and Certain Governance Matters–Director Nomination Process.” COMPANY DOCUMENTS We make available, free of charge on our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after they are filed with or furnished to the SEC. These filings are available on our investor website at: www.invh.com under “Filings.” Copies of our Proxy Statement, form of proxy and our Annual Report, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to the Office of the Corporate Secretary, Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201; telephone: (972) 421-3600. HOUSEHOLDING OF PROXY MATERIALS SEC rules permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy statements and notices with respect to two or more stockholders sharing the same address by delivering a single proxy statement or a single notice addressed to those stockholders. This process, which is commonly referred to as “householding,” provides cost savings for companies and helps the environment by conserving natural resources. Some brokers household proxy materials, delivering a single proxy statement or notice to multiple stockholders sharing an address unless contrary instructions have been received from the affected stockholders. Once you have received notice from your broker that they will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate proxy statement or notice, or if your household is receiving multiple copies of these documents and you wish to request that future deliveries be limited to a single copy, please notify your broker. You can also request prompt delivery of a copy of this Proxy Statement and the Annual Report by contacting the Office of the Corporate Secretary, Invitation Homes Inc., 1717 Main Street, Suite 2000, Dallas, Texas 75201; telephone: (972)421-3600.
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OTHER BUSINESS The Board does not know of any other matters to be brought before the meeting. If other matters are presented, the proxy holders have discretionary authority to vote all proxies in accordance with their best judgment. By Order of the Board of Directors, 
Mark A. Solls Executive Vice President, Chief Legal Officer and Secretary | | | | | | | | 69 | | 86 | | 20202023 Proxy Statement | | |
| Other Business(continued)
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We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms10-K,10-Q and8-K. To access these filings, go to our website (www.invitationhomes.com) and click on “SEC Filings” under “About Us”—“Investors”—“SEC Filings.” Copies of our Annual Report on Form10-K for the year ended December 31, 2019, including financial statements and schedules thereto, filed with the SEC, are also available without charge to stockholders upon written request addressed to:
Corporate Secretary
Invitation Homes Inc.
1717 Main Street,
Suite 2000
Dallas, Texas 75201
ANNEX A:NON-GAAP RECONCILIATIONS | | | | | | | | | | Reconciliation of Total Revenues to Same Store Total Revenues and Same Store Core Revenues, Full Year | | | (in thousands) (unaudited) | | | | | | | | FY 2019 | | | FY 2018 | | Total revenues (total portfolio) | | $ | 1,764,685 | | | $ | 1,722,962 | | Non-Same Store revenues | | | (174,254 | ) | | | (213,184 | ) | | | | | | | | | | Same Store revenues | | | 1,590,431 | | | | 1,509,778 | | Same Store resident recoveries | | | (64,909 | ) | | | (50,052 | ) | | | | | | | | | | Same Store Core revenues | | $ | 1,525,522 | | | $ | 1,459,726 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | Reconciliation of Total Revenues to Same Store Core Revenues, Full Year | | (in thousands) (unaudited) | | FY 2022 | | | FY 2021 | | | | | Total revenues (total portfolio) | | $ | 2,238,121 | | | $ | 1,996,615 | | | | | Management fee revenues | | | (11,480 | ) | | | (4,893 | ) | | | | Total portfolio resident recoveries | | | (122,055 | ) | | | (105,755 | ) | | | | | | | | | | | | | Total Core revenues (total portfolio) | | | 2,104,586 | | | | 1,885,967 | | | | | Non-Same Store Core revenues | | | (185,376 | ) | | | (124,456 | ) | | | | | | | | | | | | | Same Store Core revenues | | $ | 1,919,210 | | | $ | 1,761,511 | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | A-1 | | | 2020 Proxy Statement
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Live freer. Lease a house.
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| | | | | | | | | | | | |  INVITATION HOMES INC. 1717 MAIN STREET SUITE 2000 DALLAS, TEXAS 75201 | | | | | |  | | SCAN TO VIEW MATERIALS & VOTE | | 
| | | | | | | | | | | | | | | | VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 10:59 P.M. CT on May 16, 2023. 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. During The Meeting - Go to www.virtualshareholdermeeting.com/INVH2023 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 10:59 P.M. CT on May 16, 2023. 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. Mailed proxy cards must be received to later than May 16, 2023. | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | | | | | | | | | | | | | | | | | | | | | | | | | V08382-P86881 KEEP THIS PORTION FOR YOUR RECORDS |
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | INVITATION HOMES INC. | | | | | | For All | | Withhold All | | For All Except | | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | | | | | | | | The Board of Directors recommends that you vote “FOR” the election of each of the director nominees in Proposal 1. | | | | | | | | | | | | | | | | | | | 1. To elect director nominees: | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | 01) | | Michael D. Fascitelli | | 06) | | Joseph D. Margolis | | | | | | | | | | | | | | | | | | | | | | | | | | | 02) | | Dallas B. Tanner | | 07) | | John B. Rhea | | | | | | | | | | | | | | | | | | | | | | | | | | | 03) | | Jana Cohen Barbe | | 08) | | Janice L. Sears | | | | | | | | | | | | | | | | | | | | | | | | | | | 04) | | Richard D. Bronson | | 09) | | Frances Aldrich Sevilla-Sacasa | | | | | | | | | | | | | | | | | | | | | | | | | | | 05) | | Jeffrey E. Kelter | | 10) | | Keith D. Taylor | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends that you vote “FOR” Proposals 2 and 3. | | | | | | | | | | For | | Against | | Abstain | | | | | | | | | | | | 2. | | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2023. | | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | 3. | | To approve, in a non-binding advisory vote, the compensation paid to our named executive officers. | | | | ☐ | | ☐ | | ☐ | | | | | | | | | | | NOTE: To consider such other business as may properly come before the 2023 Annual Meeting of Stockholders and any adjournments or postponements thereof. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, or other fiduciary, please give full title as such. Joint owners
should each sign personally. All holders must sign. If a corporation or partnership,
please sign in full corporate or partnership name by authorized officer. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | Date | | | | | | Signature (Joint Owners) | | | | Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
INVITATION HOMES INC. 1717 MAIN STREET SUITE 2000 DALLAS, TEXAS 75201 VOTE BY INTERNET Before The Meeting—Go to 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 May 19, 2020. 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. During The Meeting—Go to www.virtualshareholdermeeting.com/INVH2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BYPHONE—1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on May 19, 2020. 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: D03648-P32952 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY INVITATION HOMES INC. For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark “For All Except” and write the The Board of Directors recommends that you vote number(s) of the excepted nominee(s) on the line below. “FOR” the election of each of the director nominees in Proposal 1. ! ! ! 1. To elect director nominees: 01) Bryce Blair 07) Joseph D. Margolis 02) Dallas B. Tanner 08) John B. Rhea 03) Jana Cohen Barbe 09) J. Heidi Roizen 04) Richard D. Bronson 10) Janice L. Sears 05) Michael D. Fascitelli 11) William J. Stein 06) Jeffrey E. Kelter The Board of Directors recommends that you vote “FOR” Proposals 2 and 3. For Against Abstain 2. To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for 2020. ! ! ! 3. To approve, in anon-binding advisory vote, the compensation paid to our named executive officers. ! ! ! NOTE: To consider such other business as may properly come before the 2020 annual meeting of stockholders and any adjournments or postponements thereof. Yes No Please indicate if you plan to attend this meeting. ! ! Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D03649-P32952 INVITATION HOMES INC. Annual Meeting of Stockholders May 20, 2020 4:00 p.m., Central Time This proxy is solicited by the Board of Directors The undersigned hereby appoints Bryce Blair, Dallas B. Tanner, Ernest M. Freedman and Mark A. Solls, or any of them, with power to act without the other and with power of substitution, as proxies andattorneys-in-fact and hereby authorizes them to represent and vote, as presented on the reverse side, all of the shares of common stock of Invitation Homes Inc. which the undersigned is entitled to vote and, in their discretion, to vote upon such other matters as may properly come before the 2020 annual meeting of stockholders of Invitation Homes Inc. to be held on May 20, 2020 (the “Annual Meeting”) or any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. This proxy card, when properly executed, will be voted in the manner directed herein by the undersigned. If no such direction is made, but the card is signed, this proxy card will be voted in accordance with the Board of Directors’ recommendations, as indicated on the reverse side, and in the discretion of the proxies with respect to such other matters as may properly come before the Annual Meeting. Continued and to be signed on reverse side — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — V08383-P86881 | | | INVITATION HOMES INC. Annual Meeting of Stockholders May 17, 2023 11:00 a.m., Central Time This proxy is solicited by the Board of Directors The undersigned hereby appoints Michael D. Fascitelli, Dallas B. Tanner, Ernest M. Freedman and Mark A. Solls, or any of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as presented on the reverse side, all of the shares of common stock of Invitation Homes Inc. which the undersigned is entitled to vote and, in their discretion, to vote upon such other matters as may properly come before the 2023 Annual Meeting of Stockholders of Invitation Homes Inc. to be held on May 17, 2023 (the "Annual Meeting") or any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the meeting. This proxy card, when properly executed, will be voted in the manner directed herein by the undersigned. If no such direction is made, but the card is signed, this proxy card will be voted in accordance with the Board of Directors' recommendations, as indicated on the reverse side, and in the discretion of the proxies with respect to such other matters as may properly come before the Annual Meeting. Continued and to be signed on reverse side | |
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