the
|
|
|
| Preliminary Proxy Statement |
☐ |
|
☒ | Definitive Proxy Statement |
☐ | Definitive Additional Materials |
☐ | Soliciting Material under §240.14a-12 |
☒ | ||||
| ||||
No fee required. | ||||
☐ | ||||
| ||||
| ||||
| ||||
| ||||
| ||||
Fee paid previously with preliminary materials. | ||||
☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act | |||
| ||||
| ||||
| ||||
| ||||
A Message from Our CEO
Chairperson
Dear American Homes 4 RentAMH shareholders:
“There’s no place like home.” At the endAs I transition out of my role as Chairperson of the classic movie The WizardBoard this year, I want to personally thank you for your support and confidence in our ongoing mission to simplify the way America lives. After 10 years of Oz, this isserving on the realization that comes to DorothyBoard, and as she wakes up from her elaborate dream. For mostone of us, if there was ever a year in which Dorothy’s insight was true, it had to have been 2020. Homes became our schools, our offices, our vacation destinations, our escapes from long commutes and our safe havens. And we at American Homes 4 Rent were there to meet eachits original members, I feel tremendously proud of these needs, and others:
For many inSince 2012, we have transformed the real estate sector 2020 wasby proving a difficult year, but our business model set us apart:
Today, we are recognized as a top national homebuilder and operator that is contributing solutions to America’s greatest housing challenges, and providing a reliable, flexible alternative to residents across the country. Ten years after our initial public offering, we have grown from first rental daya team of about 160 employees to exit interviews help enableapproximately 1,800, and a portfolio of 14,000 homes to nearly 59,000.
In 2022, we delivered more than 2,000 homes, opened our 130th community, and purchased or optioned over 3,000 additional land lots, bolstering a robust pipeline and runway of growth into 2023 and beyond. We closed the year with revenues of nearly $1.5 billion and an increase in core funds from operations per share of 13% over the prior year.
We also served approximately 200,000 residents in over 20 states, who continue to put their trust in us to respond to—provide an elevated rental experience. And we advanced our commitment to the environment, to corporate governance,
and even anticipate—issuesto social responsibility, in service—too—of a greener and enhancebrighter future for American housing.
Now, supported by this robust foundation, AMH is uniquely positioned to continue leading the industry into its next chapter by focusing on the fundamentals it has long stood for: providing a path for households to access single-family living, meeting growing demand with steady supply, and delivering peace of mind to our resilienceresidents, as well as to our employees and market intelligence; and
In order to continue making a positive impact into the future, we ask for your voting support on the proposals detailed in this proxy statement. We encourage you to review each proposal closely before voting.
This year, we are once again hosting our own people—whether via our hire-locally practices or our proprietary training programs and our focus on individual development—creates a culture in which everyone can be themselves and give their best.
Annual Meeting of Shareholders virtually. On behalf of the Board of Trustees, I am pleased to invite you to our 2021 Annual Meeting of Shareholders. The meeting will be heldjoin us on Thursday,Tuesday, May 6, 2021,9, 2023, at 9:00 a.m., Pacific Time. Due to public health concerns regarding the COVID-19 pandemic, the Annual Meeting will be held in virtual-only format. You may attend the meetingTime, virtually or by proxy. You will be able to attend and participate, in the virtual Annual Meeting, vote your shares electronically and submit your questions during the meeting by visiting: www.virtualshareholdermeeting.com/AMH2021.
The matters to be considered at the meeting are described in detail in the attached notice of meeting and proxy statement. You are encouraged to review them before voting.
We ask for your voting support on the items we describe in this proxy statement so we can continue making the world a better place for our residents, our employees and you, our investors.
AMH2023. Your vote is important and we urge you to cast your voteit as soon as possible. You may vote your shares over the Internet,online, by telephone or byvia mail by following the instructions on the proxy card or voting instruction form by signing, dating and returning the enclosed proxy card. If you attend the virtual Annual Meeting, you may revoke your proxy at the meeting and vote your shares virtually. If you have any questions, please contact D.F. King & Co., Inc., our proxy solicitor assisting us in connection with the 2021 Annual Meeting. Shareholders in the U.S. and Canada may call toll-free at (877) 283-0321. Banks and brokers may call collect at (212) 269-5550.
We appreciate your continued trust and confidence as an investor in American Homes 4 Rent.
Sincerely,
Kenneth M. Woolley
Chairperson of the Board
March 24, 2023
A Message from Our CEO
Dear AMH shareholders:
This year marks a big milestone for us. We are celebrating ten years as a public company dedicated to redefining what it means to make a home yours. Throughout economic cycles and volatile markets, we have remained resilient and steadfast in our mission to deliver the joys of single-family living to residents nationwide, with support and convenience they can count on.
Since our origins, we have believed that people who want to live in a home deserve a better option. They deserve more flexibility than being locked into a 30-year mortgage. They deserve to sleep more soundly at night, without worrying about looming property taxes or expensive repairs. Buying a home may not be right for everyone. But everyone should be able to live in one, comfortably.
We also believe that, when it comes to leasing a home, the choices have not always been ideal. Faced with unreliable landlords, poorly maintained properties, remote locations, and high-density neighborhoods, among many other challenges, home renters in the U.S. have never had it easy. And that is where we come in.
In 2012, we set out to make leasing a high-quality home simpler for residents nationwide. For the past decade, we have worked to simplify their world, so that they can focus on what really matters to them, wherever they are in life.
Today, we manage over 60,000 rentals in attractive locations nationwide, home to approximately 200,000 people. We provide online tools and solutions to make finding and living in a home they love as seamless as possible. We offer professional management and maintenance services, so they can enjoy their weekends stress-free.
As the 41st largest homebuilder in the nation, we also develop new communities and neighborhoods that add housing supply during an ongoing shortage, and are thoughtfully designed to support their comfort, wellness, and sense of belonging.
More than ever, Americans are looking to us to find desirable homes that they can access, in the regions where they want to live and work. In turn, we are meeting them with reliable solutions to their housing needs, delivering peace of mind amid widespread uncertainty.
And we are doing it all with care, for our residents, as well as each other, and the planet we collectively share.
Since last year’s report, we opened our first solar-enabled community, conducted a formal climate change risk analysis to better mitigate our environmental impact, established six Employee Resource Groups, implemented a corporate social
responsibility platform to connect employees with nonprofit and volunteer opportunities in their communities, and supported a planned affordable housing development through a charitable donation.
As a result of our continued sustainability efforts, we were recently named one of America’s Most Responsible Companies by Newsweek and Statista Inc. and a Great Place To Work® for the second year in a row, as well as one of Fortune’s 2022 Best Workplaces in Real Estate™ on its inaugural list. Guided by our values of making it simple, caring about people, and holding ourselves accountable, we have earned recognition for doing business sustainably, being socially responsible, and providing a service to our customers with integrity.
Now, in our second decade as a leading housing provider, we have updated our brand to reflect the journey that has brought us here. To reflect the simplicity that we strive to deliver to our residents’ lives daily. To reflect the innovative spirit of our origins and of the team that has made it all possible. To reflect our heritage and our vision of better housing in America, one with more possibilities, choices, and freedoms.
Today, we do much more than just rent homes. We work to improve people’s lives. And our new brand, under the simplified look, feel, and name of AMH, represents our renewed commitment to serving our customers by making their worlds a little easier and brighter every day, wherever they choose to call home.
As we continue our journey, we remain committed to being a resilient, sustainable, and inclusive organization to earn the trust of those who rely on us—and delivering lasting value to you, our shareholders, as well as our residents and employees. And we look forward to unveiling new ways to bring our original mission to life: new offerings and services to elevate the experience of home, new technologies to remove friction from the customer experience, and new solutions to make single-family living more accessible to more people.
The future of housing in America is bright with opportunity. And AMH will continue to be there every step of the way to build it better.
Sincerely,
David P. Singelyn
Chief Executive Officer and Trustee
March 24, 2023
Notice of the 20212023 Annual
Meeting of Shareholders
  | Date and Time
|   | Virtual Location
Visit: | |||||||||
Items of Business
1 | To elect as trustees the | |
2 | ||
| To ratify the Audit Committee’s appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, | |
| To hold a non-binding, advisory vote to approve our named executive officer compensation; | ||
| To consider and act upon any other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof. | |
Recommendations of the Board
The Board of Trustees (the “Board”) unanimously recommends that you vote “FOR” each of the trustee nominees named in the attached proxy statement, “FOR” approval of the adoption of the 2021 Incentive Plan, “FOR” approval of the adoption of the ESPP, “FOR” ratification of the appointment of Ernst & Young LLP and “FOR” approval, on an advisory basis, of our named executive officer compensation, and “ONE YEAR” with respect to the advisory vote on the frequency of future advisory votes on executive compensation. Detailed information concerning these proposals is included in the accompanying proxy statement.
Proxy Materials
The Noticenotice of Meeting, Proxy Statementmeeting, proxy statement and Annual Report on Form 10-K are available free of charge at: www.ah4r.com/Investors/AnnualMeetingDocs2021.https://investors.amh.com/financials/annual-reports. The proxy statement and accompanying proxy card are being sent or made available to you on or about March 24, 2023.
Record Date
You are entitled to vote at the meeting if you were a shareholder of record at the close of business on March 9, 202113, 2023 of our Class A or Class B common shares of beneficial interest, par value $0.01 per share.
Voting
Your vote is very important. To ensure that your shares are represented at the Annual Meeting, please vote over the Internet, by telephone or by mail as instructed on the proxy card or voting instruction form you receive. You may revoke a proxy at any time prior to its exercise at the meeting by following the instructions in the accompanying proxy statement.
2023 Proxy Statement
By Order of the Board of Trustees,
Sara H. Vogt-Lowell
Chief Legal Officer and Secretary
March 22, 202124, 2023
If you have questions about the matters described in this proxy statement, how to submit your proxy or if you need additional copies of this proxy statement, you should contact D.F. King, the company’s proxy solicitor, toll free at (877) 283-0321 (banks and brokers may call collect at (212) 269-5550).
Important Notice Regarding Availability of Proxy Materials for the 20212023 Annual Meeting:Meeting on May 9, 2023: This Proxy Statement and our 20202022 Annual Report on Form 10-K are available on the company’s website www.americanhomes4rent.comwww.amh.com under ”Investor“Investor Relations.”
2023 Proxy Statement |
2023 Proxy Statement
41 | ||||
41 | ||||
41 | ||||
41 | ||||
42 | ||||
43 | ||||
44 | ||||
45 | ||||
47 | ||||
Role of Management and Board in Determining the Compensation of Executive Officers | 48 | |||
48 | ||||
48 | ||||
49 | ||||
50 | ||||
50 | ||||
50 | ||||
50 | ||||
50 | ||||
51 | ||||
52 | ||||
53 | ||||
54 | ||||
54 | ||||
54 | ||||
54 | ||||
54 | ||||
55 | ||||
55 | ||||
57 | ||||
58 | ||||
61 | ||||
64 | ||||
64 | ||||
64 | ||||
65 | ||||
2023 Proxy Statement
In 2022, we were named the 41st largest homebuilder in the U.S. by Builder100. |
| ||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
|
| ||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
| |||||||
|
| ||||
| ||||
| ||||
| ||||
| ||||
|
* ReferSee pages 30 to the company’s 202039 and 46 to 47 of our Annual Report on Form 10-K for a detailed discussion of our financial results for 2022, as well as information regarding Core FFO (p. 41-43) and Core NOI, (p. 31-33), which are non-GAAP performance measures.
Building for the Future
Because we build our homes to rent, we design them for long-term durability. ThisBuilding communities at scale saves resources and lowers our total costs. Our attention to detail in planning and construction results in homes that function with excellent energy efficiency and minimal maintenance costs, including maintenance.benefitting all stakeholders. Our renewable energy initiatives are steps toward addressing lower GHG emissions across the portfolio.
 |
|
| ||||||
|
|
| ||||||
|  |
Delight residents, engage employees, foster community
Our success dependsHERS energy efficiency ratings:
We utilize certified third-party raters and the Home Energy Rating System (“HERS”) to track the energy efficiency of all our newly built homes. For 2022, the average HERS index for our newly constructed homes was 61.9, which means they use nearly 38.1% less energy than a home built to the 2006 “reference home” standard and less than half the energy of a typical home in this country.
Environmentally-friendly construction:
We use long-lasting flooring, energy-efficient LED lighting, low-flow water fixtures and other eco-conscious features designed to last for decades, both in our newly constructed homes and as we renovate our legacy homes.
Renewable energy program:
We expanded our renewable energy program by installing solar panels on an additional community amenity center and on the roofs of all 86 homes across a newly built community.
Environmental Management System (“EMS”):
In 2022, we completed implementation of an EMS for our employees delighting residents withAMH Development homebuilding operations to help ensure we identify, monitor and reduce our environmental risks and impacts.
2023 Proxy Statement | 3
We Care About People
We believe in fostering strong communities for a sustainable society. And we know that this work always starts from within. We are cultivating a people-first culture where we take care of each other, so that together we can take care of the people who make our houses that become their homes. This requires us to attract, retain and grow a skilled and diverse workforce to design and maintain high-quality homes.
  |
provide networking opportunities and raise cultural awareness. We | |
|
| |
|
| |
  |
| |
 |
Injury Illness Protection Plan for all employees. Our OSHA Recordable Incident Rate | |
|
| |
 | Training and development: We expanded our leadership and technical skills training programs, including through our new AMH DevPro Training for all construction project managers to ensure they embrace the long-term owner mindset of build-to-rent construction. Additionally, in 2022 we launched our company-wide employee tuition reimbursement program. |
 | Resident support: In addition to monitoring Google review scores and conducting regular internal surveys, we conducted our second third-party customer satisfaction survey. As a result of our first survey in 2021, we addressed the opportunities identified to make living in our homes as simple as possible. The second survey in 2022 helped inform how we are doing in achieving this goal and set reference benchmarks in customer engagement for our company and our industry. |
2022 training highlights | 92K hours of training provided | 51 average hours of training | ||
4 | AMH
LeadLeading with integrity and transparencyIntegrity
We long-term value for all our stakeholders. |  | |||||
 | 3 new trustees added since 2020 6.9YRS average tenure of trustees SASB, TCFD, GRI ESG framework reporting | |||||
 | Good | |||||
  | Board refreshment: We are committed to regular board refreshment. Since the beginning of 2020, we have added three new trustees, | |||||
  | Board oversight of ESG: | |||||
 |
| |||||
 | ||||||
Cybersecurity: In order to protect our residents, employees, vendors and investors in the digital age, we prioritize cybersecurity and data privacy risk oversight and ensuring compliance with legal standards for the collection and use of personal information, on which we train our employees annually. | ||||||
2023 Proxy Statement | 5
This proxy statement contains important information regarding the 20212023 Annual Meeting of Shareholders (the “Annual Meeting”). Specifically, it identifies the proposals on which you are being asked to vote, provides information that you may find useful in determining how to vote, and describes voting procedures. This proxy statement is being sent or made available to you on or about March 22, 2021.24, 2023.
The Notice of Meeting, Proxy Statement and Annual Report on Form 10-K are available free of charge at:
www.ah4r.com/Investors/AnnualMeetingDocs2021.https://investors.amh.com/financials/annual-reports.
Date and Time: Thursday, Tuesday, May 6, 2021,9, 2023, at 9:00 a.m., Pacific Time.
Virtual Location: www.virtualshareholdermeeting.com/AMH2021.AMH2023. To be admitted, you must enter the control number found on your proxy card or voting instruction form.
Record Date: You are entitled to vote at the Annual Meeting if you were a shareholder of record at the close of business on March 9, 202113, 2023 (the “Record Date”) of our Class A or Class B common shares of beneficial interest, par value $0.01 per share.
Voting: Your vote is very important. To ensure your representation at the meeting, please vote over the Internet, by telephone or by mail as instructed on the proxy card or voting instruction form you receive. You may revoke a proxy at any time prior to its exercise at the Annual Meeting by following the instructions in the accompanying proxy statement.
 |  |  |  | |||||||||||||||||
| ||||||||||||||||||||
 VIRTUALLY |  INTERNET |  MAIL |
|  TELEPHONE | ||||||||||||||||
www.virtualshare holdermeeting.com/ AMH2023 | www.proxyvote.com | Return your proxy in the postage-paid envelope provided | 1-800-690-6903 | |||||||||||||||||
| You may vote your shares virtually at the Annual Meeting. Even if you plan to attend the Annual Meeting virtually, we recommend that you submit the accompanying proxy card or voting instruction form or vote via the Internet or by telephone by the applicable deadline so that your vote will be counted if you later decide not to attend the Annual Meeting. | You may vote your shares through the Internet by signing on to the website identified on the proxy card or voting instruction form and following the procedures described on the website. Internet voting is available 24 hours a day until 11:59 p.m. Eastern Time on the day before the Annual Meeting. If you vote through the Internet, you should not return any proxy card. | If you choose to vote by mail, simply complete the accompanying proxy card or voting instruction form, date and sign it, and return it in the pre-addressed postage-paid envelope provided. | You may vote your shares by telephone by following the voting instructions on the enclosed proxy card or voting instruction form, respectively. Telephone voting is available 24 hours a day until 11:59 p.m. Eastern Time on the day before the Annual Meeting. | |||||||||||||||||
6 | AMH |
As summarized below, there are distinctions between shares held of record and those owned beneficially:
| • | Shareholder of Record—If your shares are registered directly in your name, you are considered the shareholder of record of those shares. As the shareholder of record, you can submit your voting instructions by Internet, telephone or mail as described on the enclosed proxy card. |
| • | Beneficial Owner—If your shares are held through a broker or bank in “street name” as of the close of business on the Record Date, you can either: |
(i) vote your shares by delivering the enclosed voting instruction form in the pre-addressed postage-paid envelope provided or (ii) contact the person responsible for your account to ensure that a voting instruction form is submitted on your behalf. In most instances, you will be able to do this over the Internet, by telephone or by mail as indicated on your voting instruction form. It is critical that you promptly give instructions to your brokerage firm, bank or other nominee. You may vote your shares at the virtual meeting only if you obtain a legal proxy from your brokerage firm, bank or other nominee. |
If you require assistance in changing, revoking or voting your proxy, please contact the company’s proxy solicitor:
D.F. King & Co., Inc.
48 Wall Street, 22nd Floor
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (877) 283-0321
Email: AMH@dfking.com
Unanimous Recommendations of the Board
1 | Election of the | BOARD RECOMMENDATION |
| FOR | ||||||
2 |
|
|
| |||||||
|
|
|
| |||||||
| Ratification of the Appointment of Ernst & Young LLP as our Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, | BOARD RECOMMENDATION |
| FOR | ||||||
| Advisory Vote to Approve our Named Executive Officer Compensation |
|
| |||||||
|
|
|
| |||||||
These proposals are discussed in more detail in this proxy statement and you should read the entire proxy statement carefully before voting. We will also consider any other matters properly brought before the Annual Meeting or any adjournment or postponement of the Annual Meeting.
These proposals are discussed in more detail in this proxy statement and you should read the entire proxy statement carefully before voting. We will also consider any other matters properly brought before the Annual Meeting or any adjournment or postponement of the Annual Meeting. |
2023 Proxy Statement | 7
For the second consecutive year, due to public health concerns regarding the COVID-19 pandemic, theThe Annual Meeting will be held in virtual-only format. You will be able to attend and participate in the virtual Annual Meeting, vote your shares electronically and submit your questions during the meeting by visiting: www.virtualshareholdermeeting.com/AMH2021.AMH2023.
We believe this virtual format will enhance shareholder participation, as shareholders will be able to attend the Annual Meeting and engage in the live, online Q&A session from any convenient location. Conducting the meeting virtually will ensure shareholder access to management despite the ongoing uncertainty related to the COVID-19 pandemic.
The Annual Meeting will begin with a pre-recorded presentation, followed by a live webcast of the formal business of the Annual Meeting and a Q&A session.
To be admitted to the Annual Meeting, you must enter the control number found on your proxy card or voting instruction form. If your common shares are held through a broker or bank in “street name” as of the close of business on the record date,Record Date, you may vote your shares at the virtual meeting only if you obtain a legal proxy from your brokerage firm, bank or other nominee.
You may vote your shares virtually at the Annual Meeting. To vote at the virtual Annual Meeting, you must re-enter the control number found on your proxy card or voting instruction form. Even if you plan to attend the Annual
Meeting virtually, we recommend that you submit the accompanying proxy card or voting instruction form or vote via the Internet or by telephone by the applicable deadline
so that your vote will be counted if you later decide not to attend the virtual Annual Meeting.
As part of the Annual Meeting, we will hold a live, online Q&A session, where shareholders of record of our Class A or Class B common shares at the close of business on the Record Date will be allowed to ask questions. You may submit questions in real time during the Annual Meeting. We intend to answer all questions submitted before or during the Annual Meeting which are pertinent to the company and the Annual Meeting matters, as time permits. Consistent with our prior virtual and in-person annual meetings, all questions submitted will be generally addressed in the order received, and we limit each shareholder to one question in order to allow us to answer questions from as many shareholders as possible.
If there are matters raised of individual concern to a shareholder, or if a question posed was not otherwise answered, we provide an opportunity for shareholders to contact us separately after the Annual Meeting through the company’s website, www.americanhomes4rent.comwww.amh.com under ”Investor“Investor Relations.”
If you encounter any difficulties accessing or participating in the virtual Annual Meeting, please call the technical support number that will be posted on the Annual Meeting Website log-in page.
|
Who We Are
Our Board of Trustees (the “Board”)currently consists of thirteen members. TenEleven of the current trustees are considered “independent” and all members of our Audit Committee, Nominating and Corporate Governance Committee and Human Capital and Compensation Committee are independent.
Despite challenges faced during the COVID-19 pandemic, we continued to grow Mr. Woolley, our Chairperson of the Board, will retire from our Board as of the 2023 Annual Meeting pursuant to support the success of our long-term strategy. Since January 2020, we added three new independent trustees, all of whom bring extensive operational and executive experienceTrustee Retirement Policy, which provides that no trustee will be nominated for election to the Board and twounless he or she will be 75 or younger on the first day of whom enhance the diversitynew Board term. Mr. Hart, an independent trustee, will assume the role of our Board. During 2020,Chairperson following the Board also formalized oversight responsibility with respect to important ESG matters,
engaged in deeper conversations on key strategic issues and worked closely with management to pursue the company’s key objectives.2023 Annual Meeting.
Our Board believes its members collectively have the experience, qualifications, attributes, and skills to continue
to effectively oversee the management of the company, including a high degree of personal and professional integrity, an ability to exercise sound business judgment on a broad range of issues, sufficient experience and background to appreciate the issues facing the company, a willingness to devote the necessary time to Board duties, a commitment to representing the best interest of the company and a dedication to enhancing shareholder value. The Board regularly monitors and evaluates its composition to ensure that it continues to support the success of our long-term strategy.
The Board unanimously recommends a vote “FOR” each of the thirteentwelve nominees proposed by the Board.
Nominee | Age | Principal Occupation | Trustee Since | Committee Membership | Age | Principal Occupation | Trustee Since | Current Committees | ||||||||
Kenneth M. Woolley * | 74 | Chairperson of the Board, American Homes 4 Rent
Founder and Chairperson, Extra Space Storage, Inc. | 2012 |
| ||||||||||||
Matthew J. Hart * | 71 | Incoming Chairperson of the Board, AMH Retired President and Chief Operating Officer, Hilton Hotels Corporation | 2012 | • Human Capital and Compensation (Chair) • Nominating and Corporate Governance | ||||||||||||
David P. Singelyn | 59 | Chief Executive Officer, American Homes 4 Rent | 2012 |
| 61 | Chief Executive Officer, AMH | 2012 |
| ||||||||
Douglas N. Benham * | 64 | President and Chief Executive Officer, DNB Advisors, LLC | 2016 | • Nominating and Corporate Governance (Chair) • Human Capital and Compensation | 66 | President and Chief Executive Officer, DNB Advisors, LLC | 2016 | • Nominating and Corporate Governance (Chair) • Human Capital and Compensation | ||||||||
Jack Corrigan | 60 | Chief Investment Officer, American Homes 4 Rent | 2012 |
| 62 | Retired Chief Investment Officer, AMH | 2012 |
| ||||||||
David Goldberg | 71 | Retired Executive Vice President, American Homes 4 Rent | 2019 |
| ||||||||||||
David Goldberg * | 73 | Retired Executive Vice President, AMH Former Senior Vice President and General Counsel, Public Storage | 2019 |
| ||||||||||||
Tamara Hughes Gustavson * | 59 | Real Estate Investor
Philanthropist | 2016 |
| ||||||||||||
Matthew J. Hart * | 69 | Retired President and Chief Operating Officer, Hilton Hotels Corporation | 2012 | • Human Capital and Compensation (Chair) • Nominating and Corporate Governance | ||||||||||||
Tamara H. Gustavson * | 61 | Real Estate Investor
Philanthropist | 2016 |
| ||||||||||||
Michelle C. Kerrick * | 58 | Former West Region Market Leader and Managing Partner of the Los Angeles office of Deloitte & Touche LLP | 2020 | • Audit • Human Capital and Compensation | 60 | Former West Region Market Leader and Managing Partner, Deloitte & Touche LLP | 2020 | • Audit • Human Capital and Compensation | ||||||||
James H. Kropp * | 72 | Retired Chief Investment Officer, SLKW Investments, LLC and Microproperties LLC | 2012 | • Audit (Chair) | 74 | Retired Chief Investment Officer, SLKW Investments LLC and Microproperties LLC | 2012 | • Audit (Chair) | ||||||||
Lynn C. Swann * | 69 | Director for Athene Holding Ltd. and Evoqua Water Technologies | 2020 | • Audit • Nominating and Corporate Governance | 71 | Director for Apollo Global Management, Inc. and Evoqua Water Technologies | 2020 | • Audit • Nominating and Corporate Governance | ||||||||
Winifred M. Webb * | 65 | Founder, Kestrel Advisors Former Senior Executive, Ticketmaster, and The Walt Disney Company | 2019 | • Human Capital and Compensation • Nominating and Corporate Governance | ||||||||||||
Jay Willoughby * | 64 | Chief Investment Officer, TIFF Investment Management | 2019 | • Audit • Nominating and Corporate Governance | ||||||||||||
Matthew R. Zaist * | 48 | Chief Executive Officer, The New Home Company | 2020 | • Audit • Human Capital and Compensation | ||||||||||||
Nominee | Age | Principal Occupation | Trustee Since | Committee Membership | ||||
Winifred M. Webb * | 63 | Chief Executive Officer, Kestrel Advisors
Former Senior Executive, Ticketmaster, and | 2019 | • Human Capital and Compensation • Nominating and Corporate Governance | ||||
Jay Willoughby * | 62 | Chief Investment Officer, TIFF Investment Management | 2019 | • Audit • Nominating and Corporate Governance | ||||
Matthew R. Zaist * | 46 | Former Chief Executive Officer and Director, William Lyon Homes | 2020 | • Audit • Human Capital and Compensation | ||||
* Denotes “independent” member of the Board.
2023 Proxy Statement | 11 |
Biographical Information About Our Trustee Nominees
Set forth below is biographical information for each of the trustee nominees, including a list of the specific qualifications that were considered for membership on our Board. Each nominee has consented to be named in this proxy statement and to serve if elected.
Age:
Trustee since: 2012
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
| |||
|
|
| |||
|
| |||
|
| |||
|
| |||
• Human Capital and Compensation (Chair)
• Nominating and Corporate Governance | Incoming Chairperson of the Board, AMH Retired President and Chief Operating Officer, Hilton Hotels Corporation
Mr. Hart brings to our Board deep management, operational, executive compensation, corporate governance and real estate industry experience from his executive roles at a number of publicly traded real estate and consumer companies. His experience, qualifications, attributes, and skills qualify him to serve as chair of our Human Capital and Compensation Committee, a member of our Nominating and Corporate Governance Committee and a member of our Board. | |||
Background
• Hilton Hotels Corporation, President and Chief Operating Officer, Executive Vice President, Chief Financial Officer
• Walt Disney Company (NYSE: DIS), Senior Vice President and Treasurer
• Host Marriott Corp., Executive Vice President and Chief Financial Officer
• Marriott Corporation, Senior Vice President and Treasurer
• Bankers Trust Company, Vice President, Corporate Lending
Public Directorships
• American Airlines (NASDAQ: AAL)
• Air Lease Corp. (NYSE: AL)
|
• B.A. in Economics and Sociology, Vanderbilt University
• M.B.A. in Finance and Marketing, Columbia University
Qualification Highlights:
• Executive Leadership
• Real Estate Experience
• Treasury/Capital Allocation
• Finance/Accounting/Auditing
• Consumer Experience
• Human Capital Management
• Corporate Governance
• Risk Assessment & Management
• Investor Relations
• Public Company Board • Public Company Senior Management Experience • Audit Committee • Cybersecurity • Capital Markets | |||
Age:
Trustee since:
|
Mr. Singelyn has more than three decades of experience leading residential and single-family rentals with nearly 60,000 homes. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Board. | |||
Background
•
•
•
• • Certified Public Accountant (inactive) |
• B.S. in Accounting, California State Polytechnic University • B.S. in Computer Information Systems, California State Polytechnic University Qualification Highlights: • Executive Leadership
• Real Estate Experience
• Treasury/Capital Allocation • Finance/Accounting/Auditing
• Corporate Governance • Human Capital Management
• Consumer Experience
• Risk Assessment & Management
•
• Technology | |||
• Philanthropic Activities • Capital Markets • Cybersecurity • Government Affairs / Regulatory • ESG • Public Company Board | ||||
12 | AMH |
Age:
Trustee since:
Committees • • Human Capital and |
Mr. Benham has extensive management, corporate governance, executive and employee compensation and consumer products experience as a leader of restaurant businesses. His experience, qualifications, attributes, and skills qualify him to serve as chair of our Nominating and Corporate Governance committee, a member of our Human Capital and Compensation Committee and as a member of our Board. | |||
Background
•
• • Arby’s Restaurant • RTM Restaurant Group, Inc., Chief Financial Officer
|
•
• Real Estate Experience
• Treasury/Capital Allocation
• Finance/Accounting/Auditing
• Consumer Experience • Human Capital Management • Corporate Governance • ESG • Risk Assessment & Management
• Investor Relations
• Public Company Board • Public Company Senior Management Experience • Audit Committee • Capital Markets • Philanthropic Activities | |||
Age:
Trustee since:
|
Mr. Corrigan has deep expertise in the residential and commercial real estate sectors, managing large-scale property portfolios, and he was the architect of our AMH Development homebuilding arm. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Board. | |||
Background
•
•
•
• • Arthur Young & Company |
• B.S. in Accounting, Loyola Marymount University Qualification Highlights: • Executive Leadership
• Real Estate Experience
• Treasury/Capital Allocation
•
•
•
• Public Company Senior Management Experience • Capital Markets | |||
2023 Proxy Statement | 13
David Goldberg Age: 73 Trustee since: 2019 Independent | Retired Executive Vice President, AMH Former Senior Vice President and General Counsel, Public Storage Mr. Goldberg brings to our Board expertise in management and legal matters including corporate governance, securities, capital markets and risk management for public and private real estate companies. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Board. | |||
Background • AMH, Executive Vice President (2012-2019) • American Commercial Equities, Executive Vice President (2011-2019) • Public Storage (NYSE: PSA), Senior Vice President and General Counsel • Law Firm of Sachs & Phelps, Partner • Law Firm of Agnew, Miller & Carlson, Associate and Partner • Law Firm of Hufstedler, Miller, Carlson & Beardsley, Partner | ||||
Education • A.B. in History and Social Studies, Boston University • J.D., University of California, Berkeley Qualification Highlights: • Executive Leadership • Real Estate Experience • Corporate Governance • Risk Assessment & Management • Legal Experience • Public Company Senior Management Experience • Government Affairs / Regulatory • Philanthropic Activities | ||||
Tamara H. Gustavson Age: 61 Trustee since: 2016 Independent | Real Estate Investor Philanthropist Ms. Gustavson brings to our Board expertise in management, public relations, corporate governance and industry experience from her leadership roles at publicly traded real estate companies as both an executive and board member. Her experience, qualifications, attributes, and skills qualify her to serve as a member of our Board. | |||
Background • American Commercial Equities, Member (since 2005) • Public Storage (NYSE: PSA), Senior Vice President-Administration Public Directorships • Public Storage (NYSE: PSA) (since 2008) | Education • B.S. in Public Affairs, University of Southern California Qualification Highlights: • Executive Leadership • Real Estate Experience • Human Capital Management • Corporate Governance • Public Company Board • Public Company Senior Management Experience • Consumer Experience • Philanthropic Activities | |||
14 | AMH
Age:
Trustee since:
Committees • Audit • Human Capital and Compensation | Former West Region Market Leader and Managing Partner, Deloitte
Ms. Kerrick has deep expertise in finance and accounting, risk management and corporate governance developed over a 35-year career with a leading public accounting firm. She also brings corporate governance expertise from her service at two other publicly traded companies. Ms. Kerrick qualifies as an audit committee financial expert under SEC rules. Her experience, qualifications, attributes, and skills qualify her to serve as a member of our Audit and Human Capital and Compensation Committees and as a member of our Board. | |||
Background • Deloitte, West Region Market Leader (2019 and 2020), Managing Partner – Los Angeles (2010-2020), other positions (1985-2010) Public Directorships • The Beauty Health Company (NASDAQ: SKIN) (since 2021) • LDH Growth Corp I (NASDAQ: LDHA) (since 2021) | Education • B.S. in Accountancy, Northern Arizona University Qualification Highlights: • Executive Leadership • Real Estate Experience • Finance/Accounting/Auditing • Human Capital Management • Consumer Experience • Corporate Governance • Risk Assessment & Management • Technology • Public Company Board • Audit Committee | |||
James H. Kropp Age: 74 Trustee since: 2012 Independent Committees • Audit (Chair) | Retired Chief Investment Officer, SLKW Investments, LLC and Microproperties LLC Mr. Kropp is a seasoned executive, public company director and accounting expert who brings significant real estate industry, capital allocation and risk management expertise to our Board. He also qualifies as an audit committee financial expert under SEC rules. His experience, qualifications, attributes, and skills qualify him to serve as chair of our Audit Committee and as a member of our Board. | |||
Background • SLKW Investments, LLC, Chief Investment Officer (2009-2019) • U.S. Restaurant Properties (Microproperties LLC), Chief Financial Officer • Arthur Young & Company, Licensed as a Certified Public Accountant (1973-1979) Public Directorships • FS KKR Capital Trust (NYSE: FSK) (since 2018) • KKR RE Select Trust (NASDAQ: KRSTX) (since 2021) • Lead Independent Director PS Business Parks Inc. (formerly NYSE: PSB) (retired in April 2021) | Education • B.B.A. in Finance, St. Francis College Qualification Highlights: • Executive Leadership • Real Estate Experience • Treasury/Capital Allocation • Debt and Equity Capital Markets • Finance/Accounting/Auditing • Risk Assessment & Management • Investor Relations • Corporate Governance • Public Company Board • Public Company Senior Management Experience • Audit Committee • Capital Markets • Cybersecurity | |||
2023 Proxy Statement | 15
Lynn C. Swann Age: 71 Trustee since: 2020 Independent Committees • Audit • Nominating and Corporate Governance |
Mr. Swann is an experienced public company director of both a leading asset manager and a water technology company, which allow him to contribute valuable perspectives on corporate governance, risk management, technology and ESG matters. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Audit and Nominating and Corporate Governance Committees and as a member of our Board. | |||
Background • Swann, Inc., President (since 1976) Public Directorships • Apollo Global Management, Inc. (NYSE: APO) (since 2022) • Evoqua Water Technologies (NYSE: AQUA) (since 2018) | Education • B.A. in Public Relations, University of Southern California Qualification Highlights: • Executive • Real Estate Experience • Treasury/Capital Allocation • Human Capital Management • Corporate Governance • ESG • Public Company Board • Public Company Senior Management Experience • Audit Committee • Government Affairs/Regulatory • Philanthropic Activities | |||
Winifred M. Age: 65 Trustee since: 2019 Independent Committees • Human Capital and Compensation • Nominating and Corporate Governance | Founder, Kestrel Advisors Former Senior Executive, Ticketmaster, and The Walt Disney Company
Ms. Webb brings more than three decades of experience as a seasoned executive of several of the largest entertainment companies in the country and a director of public companies with significant real estate interests. Her executive leadership experience encompasses expertise in human capital management, ESG and investor relations. Her experience, qualifications, attributes, and skills qualify her to serve as a member of our Human Capital and Compensation and Nominating and Corporate Governance Committees and as a member of our Board. | |||
Background
• Kestrel Advisors,
• Tennenbaum Capital Partners, Managing Director
• Ticketmaster Entertainment, Corporate Senior Vice President, Chief Communications & Investor Relations Officer
• The Walt Disney Company, Corporate Senior Vice President of Investor Relations & Shareholder Services, Executive Director for The Walt Disney Company Foundation
Public Directorships
• AppFolio (NASDAQ: APPF)
• Wynn Resorts (NASDAQ: WYNN)
• ABM Industries (NYSE: ABM) |
• B.A., Smith College (with honors)
• M.B.A., Harvard University
Qualification Highlights:
• Executive Leadership
• Real Estate Experience
• Finance/Accounting/Auditing
• Consumer Experience
•
•
• Risk Assessment & Management
• Investor Relations
• Technology
• Public Company Board
• • Audit Committee • Capital Markets • Treasury/Capital Allocation • Cybersecurity • Philanthropic Activities | |||
16 | AMH
Jay Willoughby Age: 64 Trustee since: 2019 Independent Committees • Audit • Nominating and Corporate Governance | Chief Investment Officer, TIFF Investment Management Mr. Willoughby is an accomplished investment manager and brings deep executive, finance, risk management, capital allocation and ESG experience to our Board. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Audit and Nominating and Corporate Governance Committees and as a member of our Board. | |||
Background • TIFF Investment Management, Chief Investment Officer (since 2015) • The Alaska Permanent Fund, Chief Investment Officer • Ironbound Capital Management, Co-Managing Partner • MLIM Equity Funds, Chief Investment Officer, Head of Research • Merrill Lynch Real Estate Fund, Senior Portfolio Manager | Education • B.A., Pomona College • M.B.A. in Finance, Columbia University Qualification Highlights: • Executive Leadership • Real Estate Experience • Treasury/Capital Allocation • Finance/Accounting/Auditing • Corporate Governance • ESG • Risk Assessment & Management • Investor Relations • Public Company Senior Management Experience • Audit Committee • Financial Literacy • Capital Markets | |||
Age:
Trustee since:
• • Human Capital and | Chief
Mr. Zaist is a seasoned chief executive of home builders with hands-on expertise in a critical part of our business. His responsibilities at the companies he has led have included oversight of financial statements, risk management and executive compensation matters. Mr. Zaist qualifies as an audit committee financial expert under SEC rules. His experience, qualifications, attributes, and skills qualify him to serve as a member of our Audit and Human Capital and Compensation Committees and as a member of our Board. | |||
Background
• The
|
| |||
|
|
| ||||
• William Lyon Homes (formerly NYSE: WLH), President and Chief Executive Officer and member of the Board (2016-2020), President and Chief Operating Officer
Public Directorships
• William Lyon Homes (formerly NYSE: WLH) (2016-2020) | Education
• B.S., Rensselaer Polytechnic Institute |
Qualification Highlights: • Executive Leadership
• Real Estate Experience
• Treasury/Capital Allocation
• Human Capital Management
• Corporate Governance
• Risk Assessment & Management
• Investor Relations
• Capital Markets
• Finance/Accounting/Auditing
• Public Company Board | |||
• Public Company Senior Management Experience • Consumer Experience • Audit Committee • ESG | |||||
2023 Proxy Statement | 17
How We Are Selected, Elected, Evaluated and Refreshed
We believe that our trustees should satisfy a number of qualifications, including demonstrated integrity, a record of personal accomplishments, a commitment to participation in Board activities and other attributes. We also endeavor to have a board that represents a range of qualifications, skills, and depth of experience in areas that are relevant to and contribute to the Board’s oversight of the company’s business.
The table below summarizes the key experience, qualifications, and attributes for each trustee nominee and highlights the balanced mix of experience, qualifications, and attributes of the Board as a whole. This high-level summary is not intended to be an exhaustive list of each trustee nominee’s skills or contributions to the Board. No individual experience, qualification, or attribute is solely dispositive of becoming a member of the Board.
 | ||||||||||||||||||||||||||||||||||||||||
| Real Estate | Corporate Governance | Investor Relations | Public Company Board | Human Capital Mgt | Consumer Experience | ESG | Diversity | Tech | |||||||||||||||||||||||||||||||
Kenneth M. Woolley | · | · | · | · |
| · |
|
|
| |||||||||||||||||||||||||||||||
Matthew J. Hart | ● | ● | ● | ● | ● | ● | ● | ● |
|
| ● | |||||||||||||||||||||||||||||
David P. Singelyn | · | · | · | · | · | · |
|
| · | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | ||||||||||||||||||||
Douglas N. Benham | · | · | · | · | · | · | · |
|
| ● | ● | ● | ● | ● | ● | ● | ● | ● |
|
| ||||||||||||||||||||
Jack Corrigan | · |
| · |
|
|
|
|
|
| ● |
| ● | ● |
|
| ● |
|
|
|
| ||||||||||||||||||||
David Goldberg | · | · |
|
|
|
|
|
|
| ● | ● |
|
|
|
| ● |
|
|
|
| ||||||||||||||||||||
Tamara Hughes Gustavson | · |
|
| · | · |
|
| · |
| |||||||||||||||||||||||||||||||
Matthew J. Hart | · | · | · | · | · | · |
|
|
| |||||||||||||||||||||||||||||||
Tamara H. Gustavson | ● | ● |
|
| ● | ● |
| ● |
|
|
| |||||||||||||||||||||||||||||
Michelle C. Kerrick | · |
|
|
| · | · |
| · | · | ● | ● |
| ● | ● | ● | ● | ● |
| ● |
| ||||||||||||||||||||
James H. Kropp | · | · | · | · |
|
|
|
|
| ● | ● | ● | ● | ● |
| ● |
|
|
| ● | ||||||||||||||||||||
Lynn C. Swann | · | · |
| · | · |
| · | · |
| ● | ● |
| ● | ● |
|
| ● |
|
| |||||||||||||||||||||
Winifred M. Webb | · | · | · | · | · | · | · | · | · | ● | ● | ● | ● | ● | ● | ● | ● | ● | ● | |||||||||||||||||||||
Jay Willoughby | · | · | · |
|
|
| · |
|
| ● | ● | ● | ● |
|
| ● |
| ● |
|
| ||||||||||||||||||||
Matthew R. Zaist | · | · | · | ● | · | · |
|
|
| ● | ● | ● | ● | ● | ● | ● | ● | ● |
|
| ||||||||||||||||||||
| 13 | 10 | 9 | 9 | 8 | 7 | 4 | 4 | 3 | 12 | 11 | 8 | 9 | 9 | 7 | 10 | 7 | 6 | 3 | 4 | ||||||||||||||||||||
18 | AMH |
Trustee Ethnic/Racial Diversity. Diversity and inclusion are values embedded in our culture and fundamental to our business. We believe that a Boardboard comprised of trustees with diverse backgrounds, experiences, perspectives and viewpoints improves the dialogue and decision-making in the board room and contributes to overall Boardboard effectiveness.
The Board strives to achieve a wide range of perspectives by having a Board composed of diverse trustees. We look for each trustee to contribute to the Board’s overall diversity—diversity being broadly construed to mean a variety of identities, perspectives, personal and
professional experiences and backgrounds. This can be represented in
both visible and non-visible characteristics that include but are not limited to race, ethnicity, national origin, gender and sexual orientation.
Although the Board does not establish specific goals with respect to diversity, the Board’s overall diversity is a significant consideration in the trustee nomination process. The Board assesses the effectiveness of its approach to Board diversity as part of the Board and committee evaluation process. In order to further advance the Board’s diversity, the Nominating and Corporate Governance Committee requires that any candidate list from a professional search firm include diverse candidates (i.e., Rooney Rule).
 |   |
 |  |
2023 Proxy Statement | 19
| Race/Ethnicity | Gender | |||||||||||||
| African American or Black | Alaska Native or Native American | Asian | Hispanic or Latino/a | White | Female | Male | |||||||
Matthew J. Hart |  | ● | ● | |||||||||||
David P. Singelyn | ● | ● | ||||||||||||
Douglas N. Benham | ● | ● | ||||||||||||
Jack Corrigan | ● | ● | ||||||||||||
David Goldberg | ● | ● | ||||||||||||
Tamara H. Gustavson | ● | ● | ||||||||||||
Michelle C. Kerrick | ● | ● | ||||||||||||
James H. Kropp | ● | ● | ||||||||||||
Lynn C. Swann | ● | ● | ||||||||||||
Winifred M. Webb | ● | ● | ||||||||||||
Jay Willoughby | ● | ● | ||||||||||||
Kenneth M. Woolley | ● | ● | ||||||||||||
Matthew R. Zaist | ● | ● | ||||||||||||
Board Composition. Our Board currently consists of thirteen members. Upon the recommendation of our Nominating and Corporate Governance Committee, our Board annually nominates trustees for election or re-election to the Board to serve for a one-year term beginning with the Annual Meeting or until their successors, if any, are elected or appointed.
Other than Mr. Woolley, who is retiring from our Board after the 2023 Annual Meeting pursuant to our Trustee Retirement Policy, each of our current trustees was nominated by the Board upon the recommendation of the Nominating and Corporate Governance Committee, and no trustee was nominated by a shareholder or subject to any agreement with any third party.
Led by our Nominating and Corporate Governance Committee, our Board continues to focus on facilitating a smooth transition when trustees retire or leave the Board, as well as ensuring that the composition of our Board is systematically refreshed to maintain the desired mix of skills, experience, independence and diversity to support our strategic direction and operating environment. Since
the beginning of 2020, we have added three new trustees, all of whom qualify as independent under the rules of the New York Stock Exchange (“NYSE”) and bring extensive operational and executive experience to the Board, and two of whom are diverse.
Among other aspects of the succession planning and refreshment process, our Board:
| • | Identifies the collective mix of desired skills, experience, knowledge, diversity and independence of our Board taken as a whole, and identifies potential opportunities for enhancement in these areas; |
| • | Considers each current trustee’s experience, skills, principal occupation, reputation, independence, committee membership and diversity (including age, tenure, geographic, gender and ethnicity); |
| • | Engages third-party search firms to assist with identifying and evaluating qualified candidates, as appropriate; and |
| • | Considers the recommendations of Board members and third parties to identify and evaluate potential trustee candidates. |
Additional information concerning the trustee nomination and selection process is provided below in “Identifying and Evaluating Nominees for Trustee.”
20 | AMH
Trustee Independence. The Board evaluates the independence of each trustee annually based on information supplied by trustees and the company and on the recommendations of the Nominating and Corporate Governance Committee. The company’s Corporate Governance Guidelines require that a majority of the trustees be independent in accordance with the requirements of the rules of the NYSE.New York Stock Exchange (“NYSE”). Our Board continuesis approximately 85% independent and assuming our trustee nominees are elected, approximately 83% of our trustees will continue to comply with that requirement, with approximately 77% of the current trustees meetingmeet these independence standards. To promote open discussion among non-management trustees, our non-management and independent trustees devote a portion of each regularly scheduled Board meeting to executive sessions without members of management present. If the group of non-management trustees includes trustees who are not independent, at least one executive session convened per year includes only independent trustees.
No trustee qualifies as independent unless the Board affirmatively determines that the trustee has no material relationship with the company and its management, based on all relevant facts and circumstances, in accordance with NYSE rules. Material relationships may include commercial, industrial, consulting, legal, accounting, charitable, family and other business, professional and personal relationships.
Following its annual review of each trustee’s independence in February 2021,2023, the Nominating and Corporate Governance Committee recommended to the Board and the Board determined that (1) each member of the Board, other than David P. Singelyn and Jack Corrigan, and David Goldberg, and (2) each member of the Audit Committee, the Human Capital and Compensation Committee and the Nominating and Corporate Governance Committee is independent pursuant to the rules of the NYSE.
In determining Ms. Gustavson’s independence, the Board considered, among other things, (i) that loans payable to Ms. Gustavson by each of Messrs. Singelyn and Corrigan which were secured by company securities were repaid in 2019, and (ii) that Mr. Singelyn no longer serves as manager of HF Investments 2010, LLC, which comprises trusts established by B. Wayne Hughes for certain of his heirs, including the children of Ms. Gustavson.
In addition, the Board has determined that:
| • | Each member of the Audit Committee meets the additional independence requirements set forth in Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules of the Securities and Exchange Commission (“SEC”) thereunder; and |
| • | Each member of the Human Capital and Compensation Committee meets the NYSE’s heightened independence requirements for compensation committee members. |
Trustee Retirement Policy. To encourage refreshment of the Board, the Board has adopted a mandatory retirement agepolicy for trustees of 75.trustees. The policy provides in relevant part that no trustee will be nominated for election to the Board unless he or she will be 75 or younger on the first day of such Board term.
Board Orientation and Education. Each new trustee participates in an orientation program and receives materials and briefings concerning our business, strategy, industry, management and corporate governance policies and practices. We provide continuing education for all trustees through board materials and presentations, including presentations by third-party experts, discussions with management, and the opportunity to attend external board education programs. For example, recent Board presentations by third-party experts have covered human capital management and government relations. In addition, all Board members have the opportunity to become a member of the National Association of Corporate Directors and to access the many educational resources of that organization.
Shareholder Recommendations. The policy of the Nominating and Corporate Governance Committee to consider properly submitted shareholder recommendations for candidates for membership on the
|
Board is described below under “Identifying and Evaluating Nominees for Trustee.” Under this policy, shareholder recommendations may only be submitted by a shareholder entitled to submit shareholder proposals under the SEC rules. Any shareholder recommendations proposed for consideration by the Nominating and Corporate Governance Committee should include the nominee’s name and qualifications for Board membership, including the information required under Regulation 14A under the Exchange Act and our bylaws, and should be addressed to the Secretary at our principal executive offices at American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302.AMH, 280 Pilot Road, Las Vegas, Nevada 89119. Recommendations for consideration at the 20222023 Annual Meeting of Shareholders should be submitted within the time frame described in this proxy statement under “Deadlines for receipt of shareholder proposals.”
Trustee Qualifications. Members of the Board shall have the highest personal and professional integrity, shall have demonstrated exceptional ability and judgment and shall be highly effective, in conjunction with the other nominees to the Board, in serving the long-term interests of the company and its shareholders. In general, the Board seeks to add trustees who meet the independence requirements of the NYSE rules. In addition, trustee candidates must submit a completed trustee questionnaire concerning matters related to independence determination, the determination of whether a candidate qualifies as an audit“audit committee financial expertexpert” and other proxy disclosure matters and must satisfactorily complete a background investigation by a third-party firm.
The Board has delegated to the Nominating and Corporate Governance Committee responsibility for recommending to the Board new trustees for election and assessing the skills and characteristics required of Board members in the context of the current make-up of the Board. This
2023 Proxy Statement | 21
assessment includes trustees’ qualifications as independent, and may include consideration of the following, all in the context of an assessment of the perceived needs of the Board at that time:
| • | diversity, background, skills and experience; |
| • | personal qualities and characteristics, accomplishments and reputation in the business community; |
| • | knowledge and contacts in the communities in which the company conducts business and in the company’s industry or other industries relevant to the company’s business; |
| • | ability and willingness to devote sufficient time to serve on the Board and committees of the Board; |
| • | knowledge and expertise in various areas deemed appropriate by the Board; and |
| • | how the individual’s skills, experience and personality fit with those of other trustees in maintaining an effective, collegial and responsive Board. |
When recommending trustee nominees, the Nominating and Corporate Governance Committee considers each nominee’s attendance record at our Board and committeescommittee meetings, track record of the Board;
We do not have a formal diversity policy, and there are no other policies or guidelines that limit the selection of trustee candidates by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee and the Board have and exercise broad discretion to select trustee candidates who will best serve the Board, the company and its shareholders. In order to further advance the Board’s diversity, the Nominating and Corporate Governance Committee requires that any candidate list from a professional search firm include diverse candidates (i.e., Rooney Rule).
The Board recognizes the importance of diversity in the boardroom and plans to continue to follow the corporate
Rooney Rule when conducting searches for future trustee nominees. The Board intends to increase the representation of women and underrepresented communities as it considers board refreshment in the coming years, particularly as members of our Board reach our retirement age.
Identifying and Evaluating Nominees for Trustee. The Nominating and Corporate Governance Committee periodically assesses the appropriate size of the Board and whether any vacancies on the Board are expected due to retirement or otherwise. In the event that vacancies are anticipated, or otherwise arise, the Nominating and Corporate Governance Committee will consider various potential candidates for trustee.
Candidates may come to the attention of the Nominating and Corporate Governance Committee through current Board members, professional search firms, shareholders or other persons. These candidates will be evaluated at meetings of the Nominating and Corporate Governance Committee and may be considered at any point during the year.
The Nominating and Corporate Governance Committee will consider properly submitted shareholder nominations of candidates for the Board in the same manner as other candidates. Following verification of the shareholder status of persons proposing candidates, recommendations will be aggregated and considered by the Nominating and Corporate Governance Committee prior to the issuance of the proxy statement for the annual meeting. If any materials are provided by a shareholder in connection with the recommendation of a trustee candidate, such materials are forwarded to the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee may also review materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a shareholder. In evaluating such nominations, the Nominating and Corporate Governance Committee seeks to achieve a balance of knowledge, experience and capability on the Board.
As discussed above in “Board Composition,” the Board has actively focused on refreshment with the addition of three new independent trustees since February 2020. As part of the ongoing process to identify trustee
candidates, during late 2019 and 2020, the Nominating and Corporate Governance Committee reviewed various individual candidates proposed by various Board members, shareholders, investment bankers and a search firm, Ferguson Partners. The nominee selection process involved extensive interviews and five formal meetings of the full Nominating and Governance Committee. At the conclusion of the interview process, the Nominating and Corporate Governance Committee considered feedback from the interviews, discussed the proposed candidates and unanimously recommended that the Board elect Matthew R. Zaist, Lynn C. Swann and Michelle C. Kerrick as trustees. Each of Mr. Zaist, Mr. Swann and Ms. Kerrick were unanimously elected a trustee by the Board in February 2020, August 2020 and September 2020, respectively.
The Board and the Nominating and Corporate Governance Committee will continue to consider additional qualified board candidates.Board candidates to best support the success of the company’s long-term strategy.
How We Are Organized
Our Board is led by the Chairperson, Kenneth M. Woolley, an independent trustee. When Mr. Woolley retires from the Board as of the 2023 Annual Meeting, Mr. Hart, an independent trustee, will assume the role of Chairperson.
Currently, the Board believes that having a separate Chairperson and Chief Executive Officer serves the interests of the company and its shareholders well. Our Board believes that this structure encourages open dialogue and competing views, which promotes strong checks and balances. Mr. Hart’s prior experience as a former president, chief operating officer and chief financial officer of several large public companies and his extensive public company board service will be particularly valuable in his role as Chairperson following the 2023 Annual Meeting. This structure also allows the Chief Executive Officer to focus more
specifically on overseeing the company’s day-to-day operations and long-term strategic planning. If in the future the Board, after considering facts and circumstances at that time, appoints the Chief Executive Officer as Chairperson of the Board, we will promptly publicly disclose the appointment.
Our Board has three standing committees: the Audit Committee, the Human Capital and Compensation Committee and the Nominating and Corporate Governance Committee. Each of these committees consists of at least
three members, each of whom meets the independence standards of the NYSE. Matters put to a vote by any one of our three independent committees of our Board must be approved by a majority of the trustees on the committee who are present at a meeting, in person or as otherwise permitted by our bylaws, at which there is a quorum or by the unanimous written consent of the trustees serving on the committee. Additionally, our Board may from time to time establish other committees to facilitate the Board’s oversight of management of the business and affairs of the company.
Each of the standing committees operates pursuant to a written charter which is reviewed and reassessed annually and that can be viewed on our website at www.americanhomes4rent.comwww.amh.com under “Investor Relations.” A copy of each may be obtained by sending a written request to the company’s Investor Relations Department at American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302,AMH, 280 Pilot Road, Las Vegas, Nevada 89119, or submitting an information request under “Investor Relations” on the company’s website.
Our three standing committees are described below, and the committee members in 2020 and number of meetings held in 20202022 are as follows:
Trustee | Audit Committee | Human Capital and Compensation Committee | Nominating and Governance Committee | |||
Douglas N. Benham |
| Member | Chair | |||
Matthew J. Hart |
| Chair | Member | |||
Michelle C. Kerrick (1) | Member | Member |
| |||
James H. Kropp | Chair |
|
| |||
Lynn C. Swann (1) | Member |
| Member | |||
Winifred M. Webb |
| Member | Member | |||
Jay Willoughby | Member |
| Member | |||
Matthew R. Zaist (1) | Member | Member |
| |||
Number of meetings in 2020: | 4 | 5 | 6 | |||
(1) Mr. Zaist joined the Board in February 2020, Mr. Swann joined the Board in August 2020 and Ms. Kerrick joined the Board in September 2020.
Trustee | Audit Committee | Human Capital and Compensation Committee | Nominating and Governance Committee | |||
Matthew J. Hart (incoming Chairperson of the Board) |
| Chair | Member | |||
Douglas N. Benham |
| Member | Chair | |||
Michelle C. Kerrick | Member | Member |
| |||
James H. Kropp | Chair |
|
| |||
Lynn C. Swann | Member |
| Member | |||
Winifred M. Webb |
| Member | Member | |||
Jay Willoughby | Member |
| Member | |||
Matthew R. Zaist | Member | Member |
| |||
Number of meetings in 2022: | 4 | 4 | 4 | |||
2023 Proxy Statement | 23 |
Audit Committee. Our Board has affirmatively determined that each of the Audit Committee members meets the definition of “independent trustee” for purposes of the NYSE rules and the independence requirements of Rule 10A-3 of the Exchange Act. Our Board has also determined that each member of our Audit Committee is financially literate and that three members, including James H. Kropp, Michelle C. Kerrick and Matthew R. Zaist, qualify as an “audit committee financial expert” under SEC rules and regulations. The Audit Committee’s principal functions consist of overseeing:
| • | the integrity of our consolidated financial statements and financial reporting process; |
| • | our accounting and financial reporting processes; |
| • | our systems of disclosure controls and procedures and internal control over financial reporting; |
| • | our compliance with financial, legal and regulatory requirements; |
| • | the evaluation of the qualifications, independence and performance of our independent registered public accounting firm; |
| • | review of all related party transactions in accordance with our Related Party Transaction Policy; |
| • | the performance of our internal audit functions; and |
| • | our overall risk exposure and management, including with respect to the company’s risk assessment, risk management and risk mitigation policies and programs. |
Human Capital and Compensation Committee. In 2020, the Board made important structural changes to the committee formerly known as the Compensation Committee, repositioned as the Human Capital and Compensation Committee, to expand the responsibilities of such committee to include oversight of the company’s human capital programs and policies, including with respect to diversity and inclusion.
The Human Capital and Compensation Committee’s principal functions consist of supporting the Board in fulfilling its oversight responsibilities relating to the following:
| • | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration of our Chief Executive Officer based on such evaluation; |
| • | reviewing and approving the compensation of our other executive officers; |
| • | reviewing our executive compensation policies and plans, including the company’s clawback policies; |
| • | implementing and administering our incentive and equity-based compensation plans; |
| • | reviewing and discussing with management the Compensation Discussion and Analysis (“CD&A”) to be included in the proxy statement and to recommend to the Board the inclusion of the CD&A in the company’s Annual Report on Form 10-K and annual proxy statement; |
| • | producing a report on executive compensation to be included in our annual proxy statement; |
| • | together with management, reviewing management’s annual assessment of potential risks related to compensation policies and practices applicable to all employees; |
| • | overseeing the advisory shareholder votes on the company’s executive compensation programs and policies and the frequency of such votes; |
| • | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for trustees; |
| • | reviewing and reporting to the Board on the company’s programs and practices for talent development and maintaining the continuity of capable management, including but not limited to succession planning for the Chief Executive Officer and other senior executives; and |
| • | overseeing the company’s human capital programs and policies, including with respect to pay fairness and employee well-being, employee retention and development and diversity and inclusion. |
The Human Capital and Compensation Committee may delegate its authority to its members as it deems appropriate. However, any delegate shall report any actions taken by such delegate to the Board the inclusion of the CD&A in the company’s Annual Report on Form 10-Kfull Human Capital and annual proxy statement;
During 2020,2022, the Human Capital and Compensation Committee made all compensation decisions for our executive officers, including the named executive officers (“NEOs”), as set forth in the Summary Compensation Table below. In August 2020,For 2022, the Human Capital and Compensation Committee retained Semler Brossy Consulting Group (“Semler Brossy”) to serve as its new independent, third-party compensation consultant. The Human Capital and Compensation Committee considered Semler Brossy’s advice on a range of compensation matters, including its considerationassessment of possible COVID-19 related adjustments to the 2020 compensation programlabor market conditions and its consideration of enhancements to the 20212023 compensation program, in each case as discussed in more detail in “Executive Compensation” below.
Empowering diverse talent is a key priority for the company, and the Board and the Human Capital and Compensation Committee is actively engaged in overseeing the company’s people and culture. We
recognize employee engagement as a critical factor to our success, and we are committed to creating and maintaining a great place to work with an inclusive culture, competitive benefits and opportunities for training and growth. Moving forward, theThe Human Capital and Compensation Committee will periodically reviewreviews and reportreports to the Board on the company’s programs for attracting, developing and retaining key employees, including management development programs, technology and skills training
24 | AMH
programs, employee health and well-being programs and diversity and inclusion initiatives.
Compensation Committee Interlocks and Insider Participation.Participation. None of our current Human Capital and Compensation Committee members is or was an officer or employee, or former officer or employee, of the company. None of our executive officers serve as a member of a board of directors, board of trustees or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our Board or our Human Capital and Compensation Committee.
Oversight of Compensation Risks. In January 2021,February 2023, the Human Capital and Compensation Committee considered a report from management concerning its review of potential risks related to employee compensation policies and practices. During its review, the Human Capital and Compensation Committee discussed the report with senior management and discussed management’s conclusion that the company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the company.
To prepare the report for the Human Capital and Compensation Committee’s consideration, members of our senior management team, including our Chief Executive Officer, Chief Operating Officer, Chief Legal Officer and the Senior Vice President of Human Resources, reviewed each of the company’s compensation programs, focusing on employee incentive compensation plans. At the completion of the review, management and the Human Capital and Compensation Committee concluded that there is little motivation or opportunity for employees to take undue risks to earn incentive compensation awards and that the incentive compensation plans properly incentivize employees to achieve long-term goals and do not create undue risks for the company.
Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee’s principal functions consist of:
| • | identifying, evaluating and recommending to the Board the trustee nominees for each annual shareholder meeting or to fill any vacancy on the Board; |
| • | identifying individuals qualified to become members of the Board and ensuring that the Board has the requisite expertise; |
| • | developing and recommending to the Board for its approval qualifications for trustee candidates and periodically reviewing these qualifications with the Board; |
| • | reviewing the committee structure of the Board and recommending trustees to serve as members or chairs of each committee of the Board; |
| • | developing and recommending to the Board a set of corporate governance guidelines for the Board and, at least annually, reviewing such guidelines and recommending changes to the Board for approval as necessary; |
| • | considering and advising the Board on any other governance issues that may arise from time to time; |
| • | overseeing the annual self-evaluations of the Board and management; |
| • | overseeing our Board’s compliance with our Code of Business Conduct and Ethics; |
| • | overseeing management’s efforts and activities with respect to our overall ESG program; and |
| • | overseeing the company’s political activities and contributions, charitable contributions and other public policy matters. |
How We Govern and Are Governed
Governance Highlights. We have structured our corporate governance in a manner we believe closely aligns our interests with those of our shareholders. Notable features of our corporate governance include:
| Annual election of all trustees |
| • | Majority voting for trustees in uncontested elections |
| • | Independent Chairperson |
| • | Regular executive sessions of non-management trustees |
| • | Trustee retirement policy |
| • | Shareholder voting power aligns with economic interest |
| • | Anti-pledging, anti-hedging and anti-short sale policies |
| • | Compensation clawback policy |
| • | Double-trigger vesting for time-based equity awards |
| • | Robust share ownership guidelines |
Governance Documents. The framework of our corporate governance is set forth in our charter and bylaws and in the following documents:
| • | Corporate Governance Guidelines that outline the Board’s overall governance practices |
| • | Charters of the Audit, Human Capital and Compensation and Nominating and Corporate Governance Committees |
| • | The Code of Business Conduct and Ethics applicable to trustees, officers and all employees |
| • | Code of Ethics for Senior Financial Officers |
2023 Proxy Statement | 25
| • | Related Party Transaction Policy |
| • | Share Ownership Policy |
| • | Public Policy and Political Engagement Policy |
The Corporate Governance Guidelines and the Code of Business Conduct and Ethics are reviewed at least annually by the Nominating and Corporate Governance Committee, which considers whether to recommend any changes to the Board. Each Board committee reviews its charter at least annually. The company’s Code of Business Conduct and Ethics, the Corporate Governance Guidelines and the Board committee charters are available on the company’s website, www.americanhomes4rent.comwww.amh.com under “Investor Relations.” A copy of each may be obtained by sending a written request to the company’s Investor Relations Department at American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302,AMH, 280 Pilot Road, Las Vegas, Nevada 89119, or submitting an information request under “Investor Relations” on the company’s website. Any amendments or waivers to the Code of Business Conduct and Ethics for trustees or executive officers may be made only by the Nominating and Corporate Governance Committee of our Board and will be disclosed on the company’s website or other appropriate means in accordance with applicable SEC and NYSE requirements.
Board Leadership.Leadership. The Chairperson presides at meetings of all non-management trustees in executive session without the presence of management. These meetings are held on a regular basis, generally before or after each regularly scheduled Board meeting and at the request of any non-management trustee. In addition, the independent trustees meet separately at least once annually. These sessions are designed to encourage open Board discussion of any matter of interest without our Chief Executive Officer or any other members of management present.
The Chairperson: (1) reviews the agendas for each Board meeting and strategic planning session and may bring items pertinent to the advisory and monitoring functions of the Board to the full Board for review and/or decision; (2) in conjunction with the Nominating and Corporate Governance Committee, assists in the recruitment and selection of new trustees,trustees; (3) evaluates, along with the members of the Human Capital and Compensation Committee, the performance of the Chief Executive Officer,Officer; (4) consults with the Chief Executive Officer as to hiring other
executive officers, as well as strategic planning and succession planning for the Chief Executive Officer,Officer; (5) is regularly apprised of material shareholder inquiries and is involved in responding to these inquiries as appropriate,appropriate; (6) may, along with other Board members, engage in communications with shareholders and (6)other stakeholders, including at our annual meetings; (7) regularly engages with the Chief Executive Officer, chairs of Board committees, and other members of the Board regarding issues related to Board structure; and (8) when necessary or appropriate, communicates with
other non-management and independent trustees and calls meetings of the non-management and independent trustees.
Board and Committee Meetings and Attendance. The Board meets at regularly scheduled intervals and may hold additional special meetings as necessary or desirable in furtherance of its oversight responsibilities. As described above, the non-management trustees generally meet in executive session without the presence of management as part of each regularly scheduled Board meeting. The sessions are intended to encourage open discussion of any matter of interest without the Chief Executive Officer or any member of management present.
During 2020,2022, the Board held elevensix meetings and the Board committees held fifteentwelve meetings. During 2020,2022, all trustees attended at least 75%100% of the meetings held by the Board and all committees of the Board on which each trustee served. All of the trustees serving at the time attended the virtual 20202022 Annual Meeting of Shareholders. Trustees are encouraged, but not required, to attend the Annual Meeting.
Trustee Service on Other Boards. Although the company recognizes that there may be a benefit to the company as a result of trustees broadening their experience by serving on corporate boards, it is important that each trustee have the requisite time to devote to the oversight of the company’s business. For that reason, our Corporate Governance Guidelines include restrictions on our trustees serving on other public company boards. Unless otherwise approved by the Board, a trustee who also serves as an executive officer may not serve on more than one public company board in addition to the company’s Board, and trustees that are not executive officers of the company may not serve on more than three boards of other public companies in addition to the company’s Board. In recognition of the enhanced time commitments associated with membership on a public company’s audit committee, no member of the Audit Committee may serve simultaneously on audit committees of more than two other public companies.
Board Responsibilities and Oversight of Risk Management.Management. The Board is responsible for overseeingoversees the company’s approachCompany’s risk management and has delegated to major risks and policies for assessing and managing these risks. As part of its oversight function,the Audit Committee the responsibility to assist the Board with oversight of the Company’s overall risk profile, including the Company’s risk assessment, risk management and risk mitigation policies and programs. The Audit Committee regularly receives presentations (generally quarterly) from management on areas of risk facing our business. The Boardbusiness and management actively engagethe Audit Committee, in discussions about these potential and perceived risksturn, regularly reports to the business.Board on these matters. Members of our legal and finance teams that have primary responsibility for our public disclosures, including risk disclosures, attend these meetings. The Audit Committee and Board consider short-term, medium-term and long-term risks in exercising their oversight responsibilities and consider the immediacy of the risk is assessing mitigation strategies. The Audit Committee
26 | AMH
and Board consult with outside advisors and experts on risk matters when necessary.
In addition, the Board is further assisted in its risk oversight responsibilities by the standing Board committees, which have assigned areas of oversight responsibility for various matters as described in the Board committee charters and as provided in the NYSE rules. These oversight responsibilities are summarized below.
Board
| • | 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 |
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 Committee Oversight of Risk | Human Capital and Compensation Committee Oversight of Risk | Nominating and Corporate Governance Committee Oversight of Risk | ||
• Oversight of enterprise risk management activities, including the company’s risk assessment, risk management and risk mitigation policies and programs
• 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 company’s policies and procedures with respect to cybersecurity risk management
• Oversight of the performance of the internal audit function
• Oversight of the effectiveness of internal controls
• Oversight of registered public accounting firm’s qualifications, performance and independence
• Review of proposed swaps and equity and debt hedging transactions | • Oversight of compensation related risks and overall philosophy
• Oversight of regulatory compliance with respect to compensation matters
• Oversight of the company’s human capital programs and policies, including with respect to pay fairness and employee well-being, employee retention and development and diversity and inclusion | • Oversight of overall corporate governance leadership
• Provides recommendations regarding Board and committee composition
• Oversight of Board succession planning
• Oversight of our overall ESG program, including regulatory compliance,
• Oversight of our political activities and contributions, charitable contributions and other public policy matters • Oversight of the evaluation of the Board and management | ||
Management
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
| 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 |
2023 Proxy Statement | 27
Risk Areas
 |  |  |  | ||||||||||||||
| Strategic |  | Operational |  | Financial |  | Legal, Regulatory and Compliance | ||||||||||
• Reputation • Market Dynamics • Acquisitions and • Development • Climate Change | • Sales and Marketing
• Service and Delivery
• Information Systems and Cybersecurity
• Hazards and Weather
• People | • Financial Reporting and Internal Controls
• Capital Structure
• Market
• Liquidity and Credit
• Tax
• Insurance | • Compliance with Laws
• Litigation
• Environmental Management System
• Social including human rights
• Corporate Governance policies and practices | ||||||||||||||
Given the critical nature of data privacy and cybersecurity, we have developed strong risk management and oversight procedures. The Audit Committee, which consists solely of independent trustees, and whose chair has information security experience, oversees cybersecurity risks, including through quarterly updates from our Chief Technology Officer and Vice President of Information Security, who leads our dedicated cybersecurity team, and other members of our executive leadership team. The Audit Committee and our Board also conduct a full review of cybersecurity annually and considers cybersecurity as part of our business strategy, financial planning and capital allocation, particularly for IT procurement.
The Audit Committee’s oversight includes our compliance with the industry standard cybersecurity frameworks, our cybersecurity insurance coverage, cybersecurity-related internal controls, penetration testing, incident response plan, assessing the materiality of any cybersecurity incidents, business continuity plan and threat assessments. The Audit Committee also periodically evaluates our cyber strategy to ensure its effectiveness, including benchmarking against our peers.
As part of our board refreshment efforts in recent years we have focused on adding trustees with cybersecurity risk management experience. Currently four members of our Board have information security experience, including the Chair of the Audit Committee. Ms. Webb earned a CERT Certificate in Cybersecurity Oversight issued by the National Association of Corporate Directors and Carnegie Mellon University. Messrs. Hart and Kropp have information security expertise from their prior executive experience, and Messrs. Kropp and Singelyn have information security expertise from their oversight responsibilities with the Company. See “Governance Framework—How We Are Selected, Elected, Evaluated and Refreshed” above.
We are committed to implementing leading data protection standards, and have a comprehensive set of written policies
and standards that follow the guidance of the industry standard cybersecurity frameworks. These standards apply to all of the company’s systems, including all subsidiaries, and address our legal, regulatory and client requirements. We also maintain a Vendor Integrity Code, which requires our third party vendors, among other things, to comply with our requirements for maintenance of passwords, as well as other confidentiality, security and privacy procedures. Third party IT vendors are also subject to additional diligence such as questionnaires, inquiries, and potentially relevant certifications.
To help further the strength of our systems, we undertake regular internal and external security audits and vulnerability assessments, implement business continuity, contingency and recovery plans in the event of a cybersecurity incident and continuously scan the strength of our systems and review the results monthly. In addition, we have retained a third party to test for vulnerabilities and have a comprehensive external review annually. We continue to strengthen our authentication mechanisms including broad adoption of multi-factor authentication and geolocation-based blocking.
As part of our data security program, we have an incident response plan for how we would respond to different potential cybersecurity and data privacy events. To support our preparedness, we perform a tabletop exercise at least once a year in responding to a data security penetration.
It is critically important that our employees understand and follow data privacy and security procedures. All new hires receive mandatory privacy and information security training. Current employees must complete mandatory annual cybersecurity and data trainings, which is supplemented by regular phishing and other cyber-related testing that we conduct throughout the year. Additionally, we conduct specialized training for our high-risk employees on a quarterly basis and are implementing specialized training for certain other employees with access to certain sensitive information systems.
28 | AMH
We have experienced no material information security breaches in the last three years. As such, we have not spent any material amount of capital on addressing information security breaches in the last three years, nor have we incurred any material expenses from penalties and settlements related to a material breach during this same time. Costs associated with potential future security incidents may be material, whether from investigations, regulatory penalties, or litigation. These costs continue to grow under recently enacting privacy laws, and judicial decisions. In the event of a material information security incident we have cyber insurance to offset potential expenses, though the coverage may not be adequate and there are deductibles and carve-outs we would be subject to.
Public Policy and Political Engagement
Our Nominating and Corporate Governance Committee oversees the company’s public policy and political engagement activities, including political contributions. In order to facilitate informed decision-making and accountability with respect to the company’s political and charitable contributions, the Nominating and Corporate Governance Committee has adopted a Public Policy and Political Engagement Policy that applies to contributions or expenditures of corporate funds to various political entities (including political candidates and parties and political action committees). The policy provides that political contributions by the company must adhere to all applicable laws and regulations and be made in a manner consistent with the company’s core values and to enhance shareholder value, without regard to the personal political preferences of company officers or trustees. The policy requires that all such expenditures be reported to the Nominating and Corporate Governance Committee. We also maintain a political action committee (“PAC”) that is registered with the Federal Election Commission. The PAC makes political contributions on a bipartisan basis to political parties, political committees and candidates that support policies and positions important to the company. The contributions made by the PAC are not funded by corporate funds but are fully funded by voluntary contributions made by company leaders.
How We Are Paid
Our Board has established a compensation program for our non-management trustees that includes a mix of cash and equity compensation. The Human Capital and Compensation Committee, with the input and support of Semler Brossy, the independent compensation consultant to the Human Capital and Compensation Committee, annually evaluates the adequacy of the trustee compensation program.
Retainers. For 2020,2022, each non-management trustee received the following cash compensation:
| • | an annual cash retainer of $75,000; |
| • | an additional annual cash retainer of $50,000 for the Chairperson; |
| • | an additional annual cash retainer of $20,000 to the chair of the Audit Committee; |
| • | an additional annual cash retainer of $12,500 to the chairs of the Human Capital and Compensation Committee and Nominating and Corporate Governance Committee; |
| • | an additional annual cash retainer of $7,500 to the other members of the Audit Committee; and |
| • | an additional annual cash retainer of $5,000 to the other members of the Human Capital and Compensation Committee and Nominating and Corporate Governance Committee. |
There are no changes to non-management trustee cash retainer of $75,000;
For 2021, the annual retainer for non-management trustees was set at $75,000. The annual retainer for the Chairperson was set at $50,000. The annual retainer for the chair of the Audit Committee was set at $20,000 and for the chairs of the Human Capital and Compensation Committee and the Nominating and Corporate Governance Committee was set at $12,500. The annual retainer for the members of the Audit Committee was set at $7,500 and for the members of the Human Capital and Compensation Committee and the Nominating and Corporate Governance Committee was set at $5,000.
The company also reimburses non-management trustees for reasonable out-of-pocket expenses incurred in the performance of their duties as trustees, including without limitation, travel expenses in connection with their attendance in-person at Board and committee meetings. Trustees who are employees do not receive any compensation for their services as trustees. We do not anticipate holding in-person Board or committee meetings in the first half of 2021. However, given the ongoing uncertainty of the COVID-19 pandemic and the vaccine rollout, we recognize that it may be safe to hold in-person meetings at some time before the end of 2021. If so, this policy will apply and the company will reimburse travel expenses in connection with trustees’ attendance at these meetings.
Equity Awards.For 2020,2022, on the date of the Annual Meeting, each non-management trustee received an award of restricted share units (“RSUs”) with a value of $100,000$125,000 as determined by the closing price on the NYSE of the company’s Class A common shares on the date of grant. New trustees appointed during 2020 also received an award of restricted share units with a value of $100,000 as determined by the closing price on the NYSE of the company’s Class A common shares on the date of grant. The grant date for the award to new trustees is the date their service commences. Awards for new trustees and the annual grants to non-management trustees vest in full one year from the date of grant. For 2021,There are no changes to the value of thenon-management trustee equity award was set at $125,000.
Trustee Compensation Table.The following table presents information relating to the total compensation of our non-employee trustees for the fiscal year ended December 31, 2020. Mr. Zaist joined the Board in February 2020, Mr. Swann joined the Board in August 2020 and Ms. Kerrick joined the Board in September 2020.2022.
2023 Proxy Statement | 29
Messrs. Singelyn and Corrigan did not receive any compensation for their services as trustees in 2020.2022. Mr. Singelyn’s compensation as our Chief Executive Officer and Mr. Corrigan’s compensation as our former Chief Investment Officer isand as a consultant to the company are described beginning on page 60.in the “Executive Compensation” section below.
Name | Paid in Cash ($) | Stock Awards ($) (1)(2) | Total ($) | Paid in Cash ($) | Stock Awards ($) (1)(2) | Total ($) | |||||||||||||||||||||
Kenneth M. Woolley | $93,750 | $100,000 | $193,750 | ||||||||||||||||||||||||
Matthew J. Hart | $ | 92,500 | $ | 125,000 | $ | 217,500 | |||||||||||||||||||||
Douglas N. Benham | $87,500 | $100,000 | $187,500 | $ | 92,500 | $ | 125,000 | $ | 217,500 | ||||||||||||||||||
David Goldberg | $75,000 | $100,000 | $175,000 | $ | 75,000 | $ | 125,000 | $ | 200,000 | ||||||||||||||||||
Tamara Hughes Gustavson | $87,500 | $100,000 | $187,500 | ||||||||||||||||||||||||
Matthew J. Hart | $93,750 | $100,000 | $193,750 | ||||||||||||||||||||||||
Tamara H. Gustavson | $ | 76,250 | $ | 125,000 | $ | 201,250 | |||||||||||||||||||||
Michelle C. Kerrick | $37,500 | $100,000 | $137,500 | $ | 87,500 | $ | 125,000 | $ | 212,500 | ||||||||||||||||||
James H. Kropp | $95,000 | $100,000 | $195,000 | $ | 95,000 | $ | 125,000 | $ | 220,000 | ||||||||||||||||||
Lynn C. Swann | $37,500 | $100,000 | $137,500 | $ | 87,500 | $ | 125,000 | $ | 212,500 | ||||||||||||||||||
Winifred M. Webb | $75,000 | $100,000 | $175,000 | $ | 85,000 | $ | 125,000 | $ | 210,000 | ||||||||||||||||||
Jay Willoughby | $75,000 | $100,000 | $175,000 | $ | 87,500 | $ | 125,000 | $ | 212,500 | ||||||||||||||||||
Kenneth M. Woolley | $ | 125,000 | $ | 125,000 | $ | 250,000 | |||||||||||||||||||||
Matthew R. Zaist | $75,000 | $202,300 | $277,300 | $ | 87,500 | $ | 125,000 | $ | 212,500 | ||||||||||||||||||
(1) Restricted share unitRSU awards valued at the closing share price on the NYSE of $25.28$38.30 per share for Class A common shares on May 7, 2020,3, 2022, which was the date of grant for all trustees but for Mr. Swann and Ms. Kerrick, which were valued attrustees. The value of the closing share prices on August 5, 2020 ($29.05) and September 9, 2020 ($29.20), respectively. Mr. Zaist also received restricted share unitstock awards valued atis computed in accordance with the closing share price of $25.68 on February 27, 2020, which was the date of this additional grant.Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718.
(2) As of December 31, 2020,2022, each non-management trustee had the following number of options outstanding: Messrs. Hart, Kropp and Woolley each held a total of 60,000, of50,000, which 52,500 are fully vested and exercisable; Mr. Kropp held a total of 50,000, of which 42,500 are fully vested and exercisable; Ms. Gustavson and Mr. Benham each held a total of 30,000, of which 22,500 are fully vested and exercisable; Ms. Webb and Mr. Willoughby each held a total of 10,000, of which 2,5007,500 are fully vested and exercisable. Mr. Singelyn held fully vested options to acquire 25,000 shares which were not awarded in connection with his service as a trustee. In addition, as of December 31, 2020, (i) Mses. Gustavson and Webb, and Messrs. Benham, Goldberg, Hart, Kropp, Willoughby, Woolley and Zaist2022, each non-management trustee held 3,956 restricted share unitsa total of 3,264 RSUs which vest in full on May 7, 2021, (ii) Ms. Kerrick held 3,425 restricted share units which vest in full on September 9, 2021, (iii) Mr. Swann held 3,443 restricted share units which vest in full on August 5, 2021, and (iv) Mr. Zaist also held 3,985 restricted share units which vest in full on February 27, 2021.3, 2023.
Trustee Share Ownership Policy. Our share ownership guidelinespolicy approved by the Board areapplies to each of our executive officers and trustees and is intended to align thetheir interests of the company’s executive officers and independent trustees with the interests of the company’s shareholders. The policy applies to the company’s Chief Executive Officer, other Section 16 officers and the independent members of the Board. Each independentnon-management trustee covered by the policy is expected to own Class A common shares and equivalents (including Class A partnership units that are convertible into Class A common shares and unvested restricted stock units (“RSUs”)RSUs that are only subject to time vesting) of the company with an aggregate market value of five times the previous year annual cash retainer (excluding any Board committee fees) for. Additionally, each independent trustee. For
information regarding requirements for executive officers, see “Executive Officer Ownershipnon-management trustee covered by the policy is expected to establish an initial beneficial ownership position of Company Shares—Share Ownership Policy” below.
Class A common shares and equivalents within one year of his or her appointment to the Board and to be in full compliance within five years of becoming subject to the policy. Securities that have been pledged, unvested performance-based RSUs and shares underlying vested or unvested options are not counted for purposes of the policy. Current independentFor
information regarding requirements for executive officers, see “Executive Officer Share Ownership and Other Compensation Policies—Executive Officer Share Ownership Policy” below.
All of our trustees are expected to be in compliance by February 24, 2026,with the fifth anniversarypolicy. If a non-management trustee is ever not in compliance with the policy (other than solely as a result of decreases in Class A common share market price), the non-management trustee must retain 100% of the effective date ofClass A common shares and equivalents beneficially owned and subsequently awarded by the policy. New trustees are expectedCompany (other than sales to becover withholding taxes owed in connection with equity awards or option exercise costs) until the non-management trustee is in compliance within five years of their appointment.with the policy.
The Human Capital and Compensation Committee of the Board has the authority to administer and interpret, to monitor compliance with and to make all determinations regarding the share ownership policy.
30 | AMH |
How You Can Communicate With Us
We value and actively solicit feedback from our shareholders. During fiscal year 2020,2022, management met with over 420approximately 240 institutional investors at virtual conferences, non-deal roadshows and industry calls.
We encourage all shareholders to contact our investor relations team with any questions or comments by:
| ||||||
| EMAIL | WEBSITE | MAIL | TELEPHONE | |||
| Visit
under “Investor Relations” | Write to Attn: Investor Relations
| Call (855) | |||
The Board also welcomes feedback from shareholders and other interested parties. We receive a large volume of correspondence regarding a wide range of subjects each day, including correspondence relating to ordinary business operations. As a result, our individual trustees are often not able to respond to all communications directly. Therefore, the Board has established a process for managing communications to the Board and individual trustees. Any shareholder communication to
the Board should be addressed to: Board of Trustees, c/o Corporate Secretary, American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302.AMH, 280 Pilot Road, Las Vegas, Nevada 89119. Communications that are intended for a specified individual trustee or group of trustees should be addressed to the trustee(s) c/o Corporate Secretary at the above address, and all such communications received will be forwarded to the designated trustee(s).
We are asking our shareholders to approve adoption of the American Homes 4 Rent 2021 Equity Incentive Plan.
The Board approved the 2021 Incentive Plan on February 24, 2021, subject to shareholder approval. The Board believes that the adoption of the 2021 Incentive Plan is in the best interest of our shareholders and the company because equity-based awards help to attract, motivate, and retain talented employees, trustees and other service providers, align employee and shareholder interests, link employee compensation with performance, and maintain a culture based on employee share ownership. Equity has been and is expected to continue to be a significant component of the total compensation of our key executives.
The 2021 Incentive Plan is intended to replace the company’s existing equity compensation plan, the American Homes 4 Rent 2012 Equity Incentive Plan (as amended, the “2012 Incentive Plan”). If approved, the maximum number of common shares available for issuance under the 2021 Incentive Plan will be equal to the sum of (i) 8,500,000 common shares, (ii) the number of common shares available for future awards under the 2012 Incentive Plan as of the effective date of the 2021 Incentive Plan, and (iii) the number of common shares related to awards outstanding under the 2012 Incentive Plan as of the effective date that later terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such common shares and become available for issuance under the 2021 Incentive Plan.
If the 2021 Incentive Plan is not approved by our shareholders, the 2021 Incentive Plan will not become effective, the 2012 Incentive Plan will continue in effect, and we may continue to grant awards under the 2012 Incentive Plan to the extent of the common shares remaining available for issuance under that plan. As of the record date, there were 885,508 shares remaining available for issuance under the 2012 Incentive Plan (without giving effect to additional shares that may become available upon the future expiration, forfeiture or cancellation of outstanding awards).
Summary of Material Provisions of the 2021 Incentive Plan
A summary of the material terms of the 2021 Incentive Plan is set forth below. This summary is qualified in its entirety by the full text of the 2021 Incentive Plan, a copy of which is attached as Annex A to this proxy statement and which is incorporated by reference into this Proposal 2. We encourage shareholders to read and refer to the complete plan document in Annex A for a more complete description of the 2021 Incentive Plan.
General: The 2021 Incentive Plan permits the grant of awards of share options, share appreciation rights (“SARs”), restricted shares, restricted share units, deferred share units, unrestricted shares, dividend equivalent rights, performance shares and other performance-based awards, LTIP Units (as defined below), and other rights or interests that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to common shares, to any employee, officer, trustee or director of the company or an affiliate of the company, any other service provider currently providing direct services to the company or an affiliate of the company (including a consultant or advisor), or to any other person whose participation in the 2021 Incentive Plan is determined by the Human Capital and Compensation Committee to be in the best interest of the company. Each award granted under the 2021 Incentive Plan will be evidenced by an award agreement in such form or forms as may be determined by the Human Capital and Compensation Committee that sets forth the terms and conditions of the award.
Administration of the 2021 Incentive Plan: The 2021 Incentive Plan will be administered by the Human Capital and Compensation Committee, and the Human Capital and Compensation Committee will determine all terms of awards under the 2021 Incentive Plan. During any time when the company has a class of equity registered under Section 12 of the Exchange Act, each member of the Human Capital and Compensation Committee that administers the 2021 Incentive Plan will be (i) a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act, and (ii) for so long as the common shares are listed on the NYSE, an independent director in accordance with the requirements of the rules of the NYSE. The Human Capital and Compensation Committee will also determine who will receive awards under the 2021 Incentive Plan, the type of award and its terms and conditions and the number of common shares subject to the award, if the award is equity-based. The Human Capital and Compensation Committee will also interpret and construe the provisions of the 2021 Incentive Plan. During any period of time in which there is not a compensation committee, the 2021 Incentive Plan will be administered by the Board or another committee appointed by the Board. References below to the Human Capital and Compensation Committee include a reference to the Board or another committee appointed by the Board for those periods in which the Board or such other committee appointed by the Board is acting.
Eligibility: All employees and officers of the company and its subsidiaries and affiliates are eligible to receive awards under the 2021 Incentive Plan. In addition,
|
non-employee trustees or directors of the company or any subsidiary or affiliate of the company, other service providers (who are natural persons) currently providing direct services to the company or a subsidiary or affiliate of the company, or any other person whose participation in the 2021 Incentive Plan is determined by the Human Capital and Compensation Committee to be in the best interest of the company may receive awards under the 2021 Incentive Plan. As of March 9, 2021, the company had approximately 1,434 employees and 11 non-employee trustees.
Share Authorization: The number of common shares that may be issued under the 2021 Incentive Plan is equal to the sum of (i) 8,500,000 common shares, (ii) the number of common shares available for future awards under the 2012 Incentive Plan as of the effective date of the 2021 Incentive Plan, and (iii) the number of common shares related to awards outstanding under the 2012 Incentive Plan as of the effective date that later terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such common shares and become available for issuance under the 2021 Incentive Plan. Any of the common shares available for issuance under the 2021 Incentive Plan may be used for any type of award under the 2021 Incentive Plan. In connection with share splits, distributions, recapitalizations, spin-offs, share dividends and certain other events, the Human Capital and Compensation Committee will make proportionate adjustments that it deems appropriate in the aggregate number and kind of shares that may be issued under the 2021 Incentive Plan and the number and kind of shares that are subject to outstanding awards. Any shares covered by an award that terminates by expiration, forfeiture, cancellation, or otherwise without the issuance of any shares subject to such award will again be available for purposes of the 2021 Incentive Plan. The number of common shares available for issuance under the 2021 Incentive Plan will not be increased by the number of common shares (i) tendered or withheld or subject to an award surrendered in connection with the purchase of shares upon exercise of an option, (ii) deducted or delivered from payment of an award of an option or SAR in connection with the company’s tax withholding obligations, or (iii) purchased by the company with proceeds from option exercises. The number of common shares available for issuance under the 2021 Incentive Plan will not be increased by the number of common shares tendered or withheld or subject to an award (other than an option or SAR) surrendered in connection with the purchase of shares or deducted or delivered from payment of an award (other than an option or SAR) in connection with the company’s tax withholding obligations.
No awards have been issued under the 2021 Incentive Plan.
Share Usage: Any common shares that are subject to awards will be counted against the 2021 Incentive Plan share limit as one common share for every one common share subject to the award. The maximum number of common shares issuable under a performance share grant will be counted against the 2021 Incentive Plan share limit as of the applicable grant date, but such number will be adjusted to equal the actual number of shares issued upon settlement of the performance share grant to the extent different from such maximum number of shares.
No Repricing: Except in connection with certain corporate transactions involving the company, the company may not, without shareholder approval, (i) amend an outstanding option or SAR to reduce the exercise price of the option or the strike price of the SAR, (ii) cancel outstanding options or SARs in exchange for options or SARs with an exercise price or strike price, as applicable, that is less than the exercise price or strike price, as applicable, of the original options or SARs, (iii) cancel outstanding options or SARs with an exercise price or strike price, as applicable, above the current share price in exchange for cash or other securities, or (iv) take any other action that is treated as a repricing under U.S. generally accepted accounting principles.
Options: The 2021 Incentive Plan provides for the grant of options to purchase one or more common shares. The term of an option cannot exceed ten years from the date of grant; provided that in the event the participant is a 10% shareholder, an option granted to such participant that is intended to be an “incentive share option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), will not be exercisable five years from the date of grant. The Human Capital and Compensation Committee determines at what time or times each option may be exercised and the period of time, if any, after retirement, death, disability or termination of employment during which options may be exercised. Options may become exercisable in installments. Except in the case of substitute awards (as defined in the 2021 Incentive Plan), the exercise price of each option granted under the 2021 Incentive Plan cannot be less than the fair market value of a common share on the grant date of such option; provided that in the event the participant is a 10% shareholder, an option granted to such participant that is intended to be an incentive share option cannot be less than 110% of the fair market value of a common share on the grant date of such option. All options granted under the 2021 Incentive Plan will be non-qualified share options or incentive share options.
The exercise price for any option generally is payable (i) in cash or cash equivalents, (ii) to the extent the award agreement provides and subject to certain limitations set forth in the 2021 Incentive Plan, by the tender of common shares (or attestation of ownership of such common shares) with an aggregate fair market value on the date on which the option is exercised equal to the exercise or purchase price, (iii) to the extent the award agreement provides, by payment through a broker in accordance with procedures established by the company, or (iv) to the extent the award agreement provides and/or unless otherwise specified in an award agreement, any other form permissible by applicable laws, including net exercise or settlement.
Share Awards and Share Units: The 2021 Incentive Plan provides for the grant of share awards (which includes awards of unrestricted shares and awards of restricted shares), restricted share units and deferred share units. An award of restricted shares, restricted share units or deferred share units may be subject to such restrictions as the Human Capital and Compensation Committee may determine. The restrictions, if any, may lapse over a specified period of time or through the satisfaction of conditions, in installments or otherwise, as the Human Capital and Compensation Committee may determine. A participant who receives restricted shares will have all of the rights of a shareholder as to those shares, including, without limitation, the right to vote and the right to receive dividends or distributions on the shares, except that the Board may require any dividends to be reinvested in common shares, which may or may not be subject to the same vesting conditions and restrictions as applicable to such restricted shares. A participant who receives restricted share units or deferred share units will have no such rights, provided that the Human Capital and Compensation Committee may provide in an award agreement evidencing a grant of restricted share units or deferred share units that the participant will be entitled to receive dividend equivalent payments in respect of such restricted share units or deferred share units. Dividend equivalents paid on restricted share units or deferred share units which vest or are earned based upon the achievement of performance goals will not vest unless such performance goals are achieved. During the restricted period, if any, applicable to such restricted share awards, restricted share units or deferred share units, a participant is prohibited from selling, transferring, assigning, pledging or otherwise encumbering or disposing of his or her restricted share awards, restricted share units or deferred share units.
Share Appreciation Rights: The 2021 Incentive Plan provides for the grant of SARs, which provide the recipient with the right to receive, upon exercise of the
SAR, cash, common shares or a combination of the two. The amount that the recipient will receive upon exercise of the SARs generally will equal the excess of the fair market value of the common shares on the date of exercise over the per share strike price of the SAR as determined by the Human Capital and Compensation Committee. SARs will become exercisable in accordance with terms determined by the Human Capital and Compensation Committee. SARs may be granted in tandem with an option grant or independently from an option grant. The term of a SAR cannot exceed ten years from the date of grant.
Performance-Based Awards: The 2021 Incentive Plan provides for the grant of performance-based awards, which are awards of options, SARs, restricted shares, restricted share units, deferred share units, performance shares, other equity-based awards or cash made subject to the achievement of performance goals over a performance period specified by the Human Capital and Compensation Committee. The Human Capital and Compensation Committee will determine the applicable performance period, the performance goals and such other conditions that apply to the performance-based award. Performance goals may relate to financial performance, the participant’s performance or such other criteria determined by the Human Capital and Compensation Committee. If the performance goals are met, performance-based awards will be paid in cash, common shares, other awards or a combination thereof.
LTIP Units: The 2021 Incentive Plan provides for the grant of awards in the form of a unit of American Homes 4 Rent, L.P., our operating partnership (“LTIP Unit”). LTIP Units are intended to qualify as “profits interests” within the meaning of the Code. The Human Capital and Compensation Committee will determine the terms and conditions (including vesting conditions) applicable to any LTIP Units granted under the 2021 Incentive Plan; provided, however, that LTIP Units may be issued only to a participant for the performance of services to or for the benefit of our operating partnership (i) in the participant’s capacity as a partner of our operating partnership, (ii) in anticipation of the participant becoming a partner of our operating partnership, or (iii) as otherwise determined by the Human Capital and Compensation Committee. LTIP Units will be subject to the terms and conditions of the partnership agreement of our operating partnership and such other restrictions, including restrictions on transferability, as the Human Capital and Compensation Committee imposes.
Dividend Equivalent Rights: The 2021 Incentive Plan provides for the grant of dividend equivalent rights in connection with the grant of certain equity-based awards. Dividend equivalent rights may be paid currently or
|
accrued as contingent cash obligations and may be payable in cash, common shares or a combination of the two. The Human Capital and Compensation Committee will determine the terms of any dividend equivalent rights. No dividend equivalent rights can be granted in tandem with an option or SAR.
Recoupment: Award agreements for awards granted pursuant to the 2021 Incentive Plan may provide that the award is subject to mandatory repayment by the recipient to the company of any gain realized by the recipient to the extent the recipient is in violation of or in conflict with certain agreements with the company (including but not limited to an employment or non-competition agreement) or any obligation to the company (including but not limited to a confidentiality obligation). Awards are also subject to mandatory repayment to the extent the grantee is or becomes subject to (i) the Company’s Executive Officer Performance-Based Compensation Recovery Policy, (ii) any other clawback or recoupment policy adopted to comply with the requirements of any applicable law, rule or regulation, or otherwise, or (iii) any law, rule or regulation which imposes mandatory recoupment.
Change in Control: Except as otherwise provided in the applicable award agreement, if the company experiences a Change in Control in which outstanding awards will be assumed or continued by the surviving entity, then such awards will continue in the manner and under the terms so provided to the extent that provision is made in writing in connection with such Change in Control for the assumption or continuation of such awards or the substitution for such awards of new awards relating to the equity of the successor entity, or a parent or subsidiary of such successor entity, with appropriate adjustments as to the number of shares and, if applicable, exercise prices. All incomplete performance periods in respect of each performance-based award will end on the date of the Change in Control and the performance goals applicable to such award will be deemed satisfied (i) based on the level of performance achieved as of the date of the Change in Control, if determinable, or (ii) at the target level, if not determinable. Each such performance-based award will become a time-based award and will otherwise vest in accordance with the applicable award agreement. In the event an award is assumed, continued or substituted upon the consummation of any Change in Control and the employment of the holder of such award is terminated without “cause” (as defined in the 2021 Incentive Plan) within two years following the consummation of such Change in Control, such award will be fully vested and may be exercised in full, to the extent applicable, beginning on the date of such termination and for the one-year period immediately following such termination or for such longer period as the Human
Capital and Compensation Committee will determine.
Except as otherwise provided in the applicable award agreement, if the company experiences a Change in Control (as defined below) in which outstanding awards will not be assumed or continued by the surviving entity: (i) all restricted shares, restricted share units, deferred share units and dividend equivalent rights will vest and the underlying common shares will be delivered immediately before the Change in Control, and (ii) (x) all options and SARs will become exercisable fifteen days before the Change in Control and terminate upon the consummation of the Change in Control, or (y) at the Human Capital and Compensation Committee’s discretion, any options, SARs, restricted shares, restricted share units, deferred share units and/or dividend equivalent rights may be cancelled and cashed out in connection with the Change in Control for an amount in cash or securities having a value, in the case of restricted shares, restricted share units, deferred share units and dividend equivalent rights, equal to the formula or fixed price per share paid to the shareholders pursuant to such Change in Control and, in the case of options or SARs, equal to the product of the number of common shares subject to such options or SARs multiplied by the amount, if any, by which the formula or fixed price per share paid to shareholders pursuant to such Change in Control exceeds the exercise price or strike price applicable to such options or SARs. In the event the option exercise price or SAR exercise price of an award exceeds the price per share paid to shareholders in the Change in Control, such options and SARs may be terminated for no consideration. In the case of performance-based awards, if less than half of the performance period has lapsed, such awards will be treated as though target performance has been achieved immediately prior to the occurrence of the Change in Control. If at least half the performance period has lapsed, actual performance to date will be determined as of a date reasonably proximal to the date of the consummation of the Change in Control as determined by the Human Capital and Compensation Committee, and such level of performance will be treated as achieved immediately prior to the occurrence of the Change in Control.
A “Change in Control” under the 2021 Incentive Plan means, unless provided otherwise in an award agreement, the occurrence of any of the following:
2023 Proxy Statement | 31 |
|
|
|
Amendment or Termination: The Board may amend, suspend or terminate the 2021 Incentive Plan at any time; provided that no amendment, suspension or termination may impair rights or obligations under any outstanding award without the participant’s consent or violate the 2021 Incentive Plan’s prohibition on repricing. The shareholders must approve any amendment if such approval is required under applicable law or stock exchange requirements. The shareholders also must approve any amendment that changes the no-repricing provisions of the 2021 Incentive Plan. The 2021 Incentive Plan has a term of ten years, but may be terminated earlier by the Board at any time, as described above.
New Plan Benefits: As of March 9, 2021, no awards have been made under the 2021 Incentive Plan. Because benefits under the 2021 Incentive Plan are discretionary and will depend on the actions of the Human Capital and Compensation Committee, the performance of the company and the value of common shares, it is not possible to determine the benefits that will be received if shareholders approve the 2021 Incentive Plan.
Summary of U.S. Federal Income Tax Consequences
The federal income tax consequences of awards under the 2021 Incentive Plan for participants and the company will depend on the type of award granted. The following description of tax consequences is intended only for the general information of shareholders. A participant in the 2021 Incentive Plan should not rely on this description and instead should consult his or her own tax advisor.
Options: Under current law the grant of an option generally will have no federal income tax consequences for the participant or the company. Upon the exercise of an option, the participant will recognize ordinary income in an amount equal to the excess of the fair market value of common shares on the exercise date over the exercise price. Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Share Appreciation Rights: Under current law, the grant of a SAR generally will have no federal income tax consequences for the participant. Upon the exercise of a SAR, the participant will recognize ordinary income equal to the amount of cash paid and the fair market value of any common shares delivered to the participant. Generally, the company will be entitled to a deduction
|
equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Restricted Shares: Under current law, the grant of restricted shares generally will have no federal income tax consequences to the participant or the company. The participant will generally recognize ordinary income on the date the award vests, in an amount equal to the value of the shares on the vesting date. Under Section 83(b) of the Code, a participant may elect to recognize income on the date of grant rather than the date of vesting in an amount equal to the fair market value of the shares on the date of grant (less the purchase price for such shares, if any). Pursuant to the 2021 Incentive Plan, participants may not file Section 83(b) elections with respect to restricted shares. Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Restricted Share Units, Deferred Share Units and Performance-Based Awards: Under current law, the grant of a restricted share unit award, a deferred share unit award or a performance-based award generally will have no federal income tax consequences to the participant or the company. The participant generally will recognize ordinary income when payment is actually or constructively received by the participant in satisfaction of the restricted share unit award, deferred share unit award or performance-based award, in an amount equal to the amount of cash paid and the fair market value of any shares delivered to the participant. Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Unrestricted Shares: Under current law, upon the grant of an award of unrestricted shares, a participant will be required to recognize ordinary income in an amount equal to the fair market value of the shares on the date of grant, reduced by the amount, if any, paid for such shares. Upon a participant’s disposition of such shares, any gain realized in excess of the amount reported as ordinary income will be reportable by the participant as a capital gain, and any loss will be reportable as a capital loss. Capital gain or loss will be long-term if the participant held the shares for more than one year
(otherwise, the capital gain or loss will be short-term). Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
LTIP Units: Under current law, the grant of an award of LTIP Units generally will have no federal income tax consequences to the participant or the company. If the LTIP Units are not vested as of the date of grant, the vesting of the LTIP Units generally will have no federal income tax consequences to the participant or the company. Taxable income of our operating partnership allocable to the LTIP Units prior to vesting is taxed as compensation income to the participant subject to withholding taxes unless the participant has made a timely election under Section 83(b) of the Code. Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Dividend Equivalents: Under current law, the grant of dividend equivalents generally will have no federal income tax consequences for the participant. Generally, the participant will recognize ordinary income on the amount distributed to the participant pursuant to the award of dividend equivalent rights. Generally, the company will be entitled to a deduction equal to the amount of ordinary income recognized by the participant and at the time the participant recognizes such income for tax purposes, if the company complies with applicable reporting requirements and subject to the limit on the deductibility under Section 162(m) of the Code.
Certain payments made to employees and other service providers in connection with a Change in Control may constitute “parachute payments” subject to tax penalties imposed on both the company and the recipient under Sections 280G and 4999 of the Code. In general, when the value of parachute payments equals or exceeds three times the employee’s “base amount,” the employee is subject to a 20% nondeductible excise tax on the excess over the base amount and the company is denied a tax deduction for the payments. The “base amount” is generally defined as the employee’s average compensation for the five calendar years prior to the date of the Change in Control. The value of accelerated vesting of restricted shares, options, or other awards in connection with a Change in Control can constitute a
parachute payment. The 2021 Incentive Plan contains a modified form of a “safe harbor cap,” which limits the amount of potential parachute payments that a recipient may receive to no more than 299% of the recipient’s base amount, but only if such cutback results in larger after-tax payments to the recipient.
Shareholder approval of the 2021 Incentive Plan is necessary in order for the company to meet the NYSE shareholder approval requirements.
In its determination to approve the 2021 Incentive Plan, the Board reviewed an analysis prepared by Semler Brossy, which included an analysis of certain burn rate, dilution and overhang metrics, the expected duration of the 2021 Incentive Plan, the cost of the 2021 Incentive Plan, as well as best market practices and trends.
Specifically, the Board considered:
Burn Rate: Our three-year average burn rate is 0.14% as shown in the table below.
| Share Options | Time-Based RSUs | Earned Performance Awards | Unadjusted Total | Adjusted Total(1) | Weighted Common Shares Outstanding | Unadjusted Burn Rate | Adjusted Burn Rate | ||||||||||||||||||||||||||||||||
2020 | 0 | 470,147 | 0 | 470,147 | 1,175,368 | 306,613,197 | 0.15 | % | 0.38% | |||||||||||||||||||||||||||||||
2019 | 20,000 | 350,334 | 0 | 370,334 | 895,835 | 299,415,397 | 0.12 | % | 0.30% | |||||||||||||||||||||||||||||||
2018 | 140,000 | 304,400 | 0 | 444,400 | 901,000 | 293,640,500 | 0.15 | % | 0.31% | |||||||||||||||||||||||||||||||
Three-year Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 0.14 | % | 0.33% | |||||||||||||||||||
(1) The adjusted total is derived by multiplying the number of time-based RSUs and earned performance awards by the Institutional Shareholder Services’ options-equivalent multiplier of 2.5 to provide more equivalent valuation between stock options and full value shares.
Overhang and Dilution: The estimated overhang, based on outstanding equity-based awards (1,741,837) and shares remaining available under the 2012 Incentive Plan (1,417,627), and the estimated dilution, based on outstanding equity-based awards plus the new requested shares (8,500,000), are approximately 1.0% and 3.7%, respectively, as of December 31, 2020. There are currently 1,090,300 options and 651,537 RSUs outstanding. The remaining common shares available for future awards under the 2012 Incentive Plan as of the effective date of the 2021 Incentive Plan and the number of common shares related to awards outstanding under the 2012 Incentive Plan as of the effective date that later terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such common shares and become available for issuance under the 2021 Incentive Plan will be available under the 2021 Incentive Plan as of its effective date. See the table below for the reconciliation of our outstanding equity-based awards, broken out by share options, RSUs and performance-based RSUs.
| Share Options | RSUs | Performance-Based RSUs | Total | ||||||||||||||||
Balance as of December 31, 2019 | 1,529,800 | 599,109 | 0 | 2,128,909 | ||||||||||||||||
Granted in 2020 | 0 | 470,147 | 0 | 470,147 | ||||||||||||||||
Balance as of December 31, 2020 | 1,090,300 | 651,537 | 0 | 1,741,837 | ||||||||||||||||
|
Plan Duration: If we continue to make equity grants consistent with our 2021 practices (which is not necessarily reflective of grants made per our three-year historical burn rate), we estimate that the 2021 Incentive Plan will last approximately 12 years.
Plan Cost: Based on generally accepted evaluation methodologies used by proxy advisory firms, we concluded that the number of shares under the 2021 Incentive Plan is well within generally accepted standards
as measured by an analysis of the 2021 Incentive Plan cost relative to industry standards.
In light of the factors described above, and the fact that the ability to continue to grant equity compensation is vital to our ability to continue to attract and retain employees in the competitive labor markets in which we compete, our Board believes the approval of the 2021 Incentive Plan is in the best interest of our shareholders and the company.
We are asking our shareholders to approve adoption of the proposed American Homes 4 Rent 2021 Employee Stock Purchase Plan.
The Board believes that an employee stock purchase plan encourages the company’s employees to acquire our common shares, thereby fostering broad alignment of employees’ interests with the interests of our shareholders; fosters good employee relations; and provides the company an ability to recruit, retain, and reward employees in an extremely competitive employment environment.
Key Features of the Employee Stock Purchase Plan
As described further below, the ESPP generally:
Summary of Material Provisions of the Employee Stock Purchase Plan
A summary of the material terms of the ESPP is set forth below. This summary is qualified in its entirety by the full text of the ESPP, a copy of which is attached as Annex B to this proxy statement and which is incorporated by reference into this Proposal 3. We encourage shareholders to read and refer to the complete plan document in Annex B for a more complete description of the ESPP.
Share Reserve: Subject to adjustment in connection with certain corporate transactions, the maximum number of common shares that may be purchased under the ESPP will be 3,000,000 shares. The common shares reserved for issuance under the ESPP may be authorized but unissued shares or shares purchased on the open market.
Administration: The ESPP will be administered, at the company’s expense, under the direction of the Board, the Human Capital and Compensation Committee of the Board, or any other committee of the Board designated by the Board from time to time (any such entity, the “Administrator”). The Administrator will initially be the Human Capital and Compensation Committee. The Administrator will have the authority to take any actions it deems necessary or advisable for the administration of the ESPP, including, without limitation, (i) interpreting and construing the ESPP and options granted thereunder, (ii) prescribing, adopting, amending, suspending, waiving, and rescinding rules and regulations it deems appropriate to administer and implement the ESPP, (iii) correcting any defect, supplying any omission or reconciling any inconsistency in the ESPP or options granted thereunder, (iv) making determinations about eligibility, (v) determining the purchase price, (vi) establishing the timing and length of offering periods and purchase periods, (vii) establishing minimum and maximum contribution rates, (viii) establishing new or changing existing limits on the number of common shares a participant may elect to purchase with respect to any offering period, if such limits are announced prior to the first offering period to be affected, (ix) delegating to one or more individuals such duties and functions related to the operation and administration of the ESPP as the Administrator so determines, except to the extent prohibited by applicable law, (x) permitting payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the processing of properly completed enrollment forms, and (xi) furnishing information to the custodian for the ESPP as the custodian may require. The Administrator’s decisions will be final, conclusive, and binding upon all persons.
Eligibility: Except as set forth below, generally, natural persons who have been full-time employees of the company or any subsidiary of the company for at least sixty days may be eligible to participate in the ESPP. In order for shares to be purchased on behalf of a participant under the ESPP, the participant must be an eligible employee on the first day of the applicable offering period. The following employees are ineligible to participate in the ESPP: (i) employees who, after exercising their options to purchase common shares under the ESPP, would own, directly or indirectly, common shares (including shares that may be acquired under any outstanding options under the ESPP) representing 5% or more of the total combined voting power of all classes of the company’s capital stock; (ii) employees who are citizens or residents of a foreign jurisdiction (without regard to whether such employees
|
are also U.S. citizens or resident aliens), if the grant of an option under the ESPP or an offering period to such employee is prohibited under the laws of such foreign jurisdiction; and (iii) any of our executive officers or other employees who must file reports under Section 16 of the Exchange Act. The Administrator may, at any time in its sole discretion, if it deems advisable to do so, exclude the participation of the employees of a subsidiary from eligibility to participate in a future offering period. Special rules apply to employees who are considered “Restricted Persons” under our Policy on Inside Information and Insider Trading.
Notwithstanding the foregoing, the Administrator will have the authority to establish a different definition of “eligible employee” as it may deem advisable or necessary.
As of March 9, 2021, approximately 1,429 employees of the company and its subsidiaries may become eligible to participate in the ESPP.
Participation Election: An eligible employee may become a participant for an offering period under the ESPP by completing and submitting an enrollment form to the company or its designee. Such enrollment form will authorize the company to make after-tax payroll deductions in whole percentages up to 10% of the participant’s annual base salary on each pay day following enrollment in the offering period under the ESPP, subject to the $25,000 annual limit described below. The Administrator will credit the deductions or contributions to the participant’s account under the ESPP.
Subject to certain exceptions, a participant may cease his or her payroll deductions during an offering period by properly completing and timely submitting a new enrollment form to the company or its designee, at any time prior to the last day of such offering period. If a participant ceases his or her payroll deductions during an offering period, the participant will automatically be withdrawn by the company from the offering period and will be refunded his or her accumulated payroll deductions for such offering period, without interest. A participant may increase or decrease his or her payroll deductions to take effect on the first trading day of the next offering period, by properly completing and timely submitting a new enrollment form to the company or its designee.
Once an eligible employee becomes a participant in the ESPP, the participant will automatically participate in each successive offering period until such time as the participant ceases his or her payroll deductions or is no longer eligible to participate in the ESPP or a specific offering period under the ESPP.
All employee decisions related to the ESPP, including enrollment, withdrawal and changes in participation, are subject to our Policy on Inside Information and Insider Trading.
Offering Periods and Purchase Periods: The Administrator will determine the length and duration of the periods during which payroll deductions will accumulate to purchase common shares. Each of these periods is known as an “offering period.” The periods during which payroll deductions will accumulate for these purchases are referred to as “purchase periods.” While the Administrator has discretion to establish the offering periods and purchase periods under the ESPP, until otherwise determined by the Administrator, the ESPP will have six-month offering periods (with concurrent purchase periods) commencing on January 1st and July 1st of each calendar year and ending on June 30th and December 31st, respectively.
Purchase Price: The purchase price for each purchase period shall be determined by the Administrator, provided that the purchase price shall not be less than the lesser of 85% of the fair market value per common share (i) on the first trading day of the purchase period or (ii) on the last trading day of the purchase period.
The fair market value of a common share for purposes of the ESPP will generally be the closing price per share as reported on the NYSE. On March 9, 2021, the closing price of our common shares, as reported on the NYSE, was $30.21 per share.
Purchase of Shares: On the last trading day of the offering period, a participant is deemed to purchase the number of whole common shares determined by dividing the total amount of payroll deductions withheld from the participant’s paychecks during the offering period by the purchase price. Any cash not applied to the purchase of fractional shares will be refunded to the participant after the end of the offering period.
Purchase Limitations: No participant may purchase common shares in any calendar year under the ESPP and under all other “employee stock purchase plans” of the company and its subsidiaries having an aggregate fair market value in excess of the lesser of $25,000 and 10% of the participant’s annual base salary. In addition, the Administrator may impose a limit on the number of common shares a participant may purchase during the offering period.
If the Administrator determines that the total number of common shares of remaining available under the ESPP is insufficient to permit all participants to exercise their options to purchase shares, the Administrator will make a
participation adjustment and proportionately reduce the number of shares purchasable by all participants.
Termination of Participation: A participant will automatically be withdrawn by the company from an offering period under the ESPP (i) upon a termination of employment with the company or its subsidiaries, (ii) in certain cases, following a leave of absence or a temporary period of ineligibility, and (iii) upon cessation of eligibility to participate in the ESPP for any reason. A participant may also voluntarily cease participating in the ESPP until the close of business on the third business day prior to the last day in a purchase period and withdraw the balance accumulated in such participant’s account. A participant who terminates participation in the ESPP may again commence participation in the ESPP no earlier than the second window period following the date of termination. Upon termination of participation, any accumulated amounts will be refunded to the participant without interest.
Shareholder Rights: A participant shall not be a shareholder or have any rights as a shareholder with respect to common shares subject to the participant’s options under the ESPP until the common shares are purchased pursuant to the options and such common shares are transferred into the participant’s name on the company’s books and records. Common shares purchased under the ESPP will be held by the custodian designated under the ESPP. Following purchase and transfer of common shares into the participant’s name on the company’s books and records, a participant will become a shareholder with respect to the common shares purchased and will thereupon have all dividend, voting, and other ownership rights incident thereto.
Notwithstanding the foregoing, the Administrator has the right to limit sales or other transfers of the common shares by imposing a holding period and to require that any sales of common shares during the holding period be performed through a licensed broker acceptable to the company. The Administrator will not initially impose a holding period.
Transferability: A participant’s options to purchase common shares under the ESPP may not be sold, pledged, assigned, or transferred in any manner, whether voluntarily, by operation of law, or otherwise. Any payment of cash or issuance of common shares under the ESPP may be made only to the participant (or, in the event of the participant’s death, to the participant’s estate or beneficiary). During a participant’s lifetime, only such participant may exercise his or her options to purchase common shares under the ESPP.
Corporate Transactions: If the number of outstanding common shares is increased or decreased or the
common shares are changed into or exchanged for a different number or kind of shares or other securities of the company by reason of any recapitalization, reclassification, stock split, reverse stock split, spin-off, combination of shares, exchange of shares, stock dividend, or other distribution payable in capital stock, or other increase or decrease in common shares effected without receipt of consideration by the company, the number and kinds of common shares for which options may be made under the ESPP will be adjusted proportionately and accordingly by the Administrator. In addition, the number and kind of shares for which options are outstanding will be similarly adjusted so that the proportionate interest of a participant immediately following such event will, to the extent practicable, be the same as immediately prior to such event.
Upon a merger, consolidation, or reorganization of the company with one or more other corporations in which the company is not the surviving entity, or upon a Change in Control (as defined in the 2021 Incentive Plan), the ESPP and all options outstanding thereunder will terminate, except to the extent provision is made in writing in connection with such transaction for the continuation or assumption of the ESPP, or for the substitution of the options under the ESPP with new options covering the capital stock of the successor entity, with corresponding appropriate adjustments to the number and kinds of shares and purchase prices. With respect to any offering period that is ongoing between the time of the announcement of such merger, consolidation, or reorganization or Change in Control and the effectiveness of the transaction, at the discretion of the Administrator, either (i) the offering period will end on the last trading day prior to effectiveness of the transaction, and the options of each participant will automatically be exercised on such last trading day, or (ii) all outstanding purchase rights will be terminated and accumulated contributions will be refunded to each participant prior to effectiveness of the transaction.
Subject to the foregoing, if the company is the surviving corporation in any reorganization, merger, or consolidation of the company with one or more other corporations, all outstanding options under the ESPP will pertain to and apply to the securities to which a holder of the number of common shares subject to such options would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the purchase price per share so that the aggregate purchase price after such adjustment will be the same as the aggregate purchase price of the shares subject to such options immediately prior to such reorganization, merger or consolidation.
|
Term: If approved by the shareholders at the Annual Meeting, the ESPP will become effective as of July 1, 2021. The ESPP will terminate on the earliest of (i) the day before the 10th anniversary of the effective date of the ESPP, (ii) the date on which all common shares reserved for issuance under the ESPP have been issued, (iii) the date the ESPP is terminated in connection with certain corporate transactions, and (iv) the date the Board terminates the ESPP.
Amendment, Suspension, or Termination: The Board or the Administrator may, at any time and from time to time, amend or suspend the ESPP or an offering period under the ESPP; provided, however, that no amendment or suspension will, without the consent of the participant, impair any vested rights of a participant. Any such amendment is subject to shareholder approval to the extent such approval is required under applicable law. The Board may terminate the ESPP at any time.
Summary of U.S. Federal Income Tax Consequences: The following summary of U.S. federal income tax consequences is intended only as a general guide, under current U.S. federal income tax law, of participation in the ESPP and does not attempt to describe all potential tax consequences. This discussion is intended for the information of our shareholders considering how to vote at the 2021 Annual Meeting and not as tax guidance to participants in the ESPP. The following summary is not intended or written to be used, and cannot be used, for the purposes of avoiding taxpayer penalties. Tax consequences are subject to change, and a taxpayer’s particular situation may be such that some variation in application of the described rules is applicable. Accordingly, participants are advised to consult their own tax advisors with respect to the tax consequences of participating in the ESPP.
Because we are structured as an UPREIT and substantially all of our employees are employed by a subsidiary of our operating partnership, the ESPP will not qualify as an “employee stock purchase plan” as defined in Section 423 of the Code. A general summary of the current federal income tax consequences regarding the ESPP is stated below.
Tax Treatment of ESPP Participants: The amount withheld from a participant’s pay under the ESPP will be taxable ordinary income to the participant and will be included in gross income for federal income and payroll tax purposes in the year in which such amount otherwise would have been paid to the participant.
Upon the purchase of shares under the ESPP (on the last trading day of a purchase period), a participant will recognize ordinary income, subject to withholding, in an amount equal to the excess of the fair market value of the shares on the date of purchase over his or her purchase price. The ordinary income recognized is added to the participant’s basis in the shares. Upon the participant’s sale or disposition of shares purchased under the ESPP, any gain realized will be taxed as capital gain and any loss realized will be a capital loss. Whether the capital gain or loss will be long-term or short-term will depend on how long the participant held the shares.
Tax Treatment of the Company: The company will be entitled, with respect to the purchase of the shares under the ESPP, to an income tax deduction in an amount equal to the ordinary income recognized by the participant in the same taxable year in which the participant recognizes such income.
The Audit Committee is responsible for appointing the company’s independent registered public accounting firm. Ernst & Young LLP (“EY”) was first appointed as the company’s independent registered public accounting firm in August 2016. In February 2021,2023, the Audit Committee re-appointed EY to serve as the company’s independent registered public accounting firm for the fiscal year ending December 31, 2021,2023, subject to ratification of the appointment by the company’s shareholders. The Board believes that the selection of EY is in the best interest of the company and its shareholders and recommends that shareholders ratify the Audit Committee’s appointment of EY as the independent registered public accounting firm.
Although we are not required to seek ratification of the appointment of EY, the Board believes that doing so is a matter of good corporate governance. Even if the appointment of EY is ratified by the shareholders, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that a change would be in the best interest of the company and its shareholders. If shareholders do not ratify the appointment of EY, the Audit Committee will reconsider its selection but may determine to confirm the appointment.
Representatives from EY will be in attendance at the Annual Meeting and will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.
The following table shows the fees billed to the company by EY for audit and other services provided for fiscal years 20202022 and 2019:2021:
| 2020 | 2019 | 2022 | 2021 | ||||||||||||
Audit fees (1) | $ | 1,439,366 | $ | 1,416,009 | $ | 1,720,788 |
| $ | 1,499,284 |
| ||||||
Audit-related fees | $ | 2,740 | $ | 1,995 |
| – |
|
| – |
| ||||||
Tax fees | – | – |
| – |
|
| – |
| ||||||||
All other fees | $ | 75,000 | – |
| – |
|
| – |
| |||||||
Total | $ | 1,517,106 | $ | 1,418,004 | $ | 1,720,788 |
| $ | 1,499,284 |
| ||||||
(1) Audit fees represent fees for professional services provided in connection with the integrated audit of the company’s annual financial statements and internal control over financial reporting, reviewreviews of the quarterlyinterim financial statements included in the company’s quarterly reports on Form 10-Q, and other professional services in connection withrelated to the company’s registration statements, securities offerings and related SEC correspondence, and audits of financial statementscertain of certain acquired assets.
(2) Audit-related fees include fees for access to EY’s online accounting research tools.
(3) All other fees include fees for professional services provided in connection with a customer segmentation analysis in 2020.the company’s subsidiaries and unconsolidated joint ventures.
Auditor Independence: The Audit Committee has determined that the provision of the non-audit services described above is compatible with maintaining the independence of the company’s independent registered public accounting firm.
Policy to Approve Services of Independent Registered Public Accounting Firm: The Audit Committee has adopted an Audit and Non-Audit Services Pre-Approval Policy relating to services performed by the company’s independent registered public accounting firm. Pursuant to the Audit and Non-Audit Services Pre-Approval Policy, all audit and permissible non-audit services must be separately pre-approved by the Audit Committee. The Audit Committee has delegated authority to its Chairperson to specifically pre-approve engagements for the performance of audit and permissible non-audit services, for which the estimated cost for all such services shall not exceed $200,000 prior to reporting such pre-approved
such pre-approvedengagements to the Audit Committee. The Chairperson must report all pre-approval decisions to the Audit Committee at its next scheduled meeting for review and provide a description of the terms of the engagement, including:
| • | the type of services covered by the engagement; |
| • | the dates the engagement is scheduled to commence and terminate; |
| • | the estimated fees payable by us pursuant to the engagement; |
| • | other material terms of the engagement; and |
| • | such other information as the Audit Committee may request. |
Under this policy, the Audit Committee pre-approved all services performed by EY during 2020,2022, including those listed in the previous table.table above.
34 | AMH |
The Audit Committee’s responsibilities include appointing the company’s independent registered public accounting firm, pre-approving audit and non-audit services provided by the firm and assisting the Board in providing oversight to the company’s financial reporting process. In fulfilling its oversight responsibilities, the Audit Committee meets with the company’s independent registered public accounting firm, internal auditors and management to review accounting, auditing, internal controls and financial reporting matters.
Management is responsible for the company’s financial statements, including the estimates and judgments on which they are based, for maintaining effective internal controls over financial reporting and for assessing the effectiveness of internal controls over financial reporting. The independent registered public accounting firm is responsible for performing an independent audit of the company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”) and for issuing a report thereon. It is not the Audit Committee’s responsibility to plan or conduct audits or to determine that the company’s financial statements and disclosures are complete, accurate and in accordance with U.S. generally accepted accounting principles and applicable laws, rules and regulations. The Audit Committee’s responsibility is to monitor and oversee these processes and the Audit Committee necessarily relies on the work and assurances of the company’s management and of the company’s independent registered public accounting firm.
As part of its oversight responsibilities related to the company’s financial statements included in the company’s Annual Report on Form 10-K, the Audit Committee met with management and EY, the company’s independent registered public accounting firm, and reviewed and discussed with them the audited consolidated financial statements. Management
represented to the Audit Committee that the company’s consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles. The Audit Committee discussed with EY the matters required to be discussed by the applicable requirements of the PCAOB. The Audit Committee also discussed with EY the overall scope and plans for the annual audit, the results of their procedures, including critical audit matters addressed during the audit, examinations, their evaluation of the company’s internal controls and the overall quality of the company’s financial reporting.
The company’s independent registered public accounting firm also provided to the Audit Committee the written disclosures and the letter required by the applicable rules of the PCAOB, and the Audit Committee discussed with the independent registered public accounting firm that firm’s independence. In addition, the Audit Committee has considered whether the independent registered public accounting firm’s provision of non-audit services to the company and its affiliates is compatible with the firm’s independence.
The Audit Committee met with representatives of management, internal audit, legal counsel and the company’s independent registered public accounting firm on a regular basis throughout the year to discuss the progress of management’s testing and evaluation of the company’s system of internal control over financial reporting in response to the applicable requirements of the Sarbanes-Oxley Act of 2002 and related SEC regulations. At the conclusion of this process, the Audit Committee received from management its assessment and report on the effectiveness of the company’s internal controls over financial reporting. In addition, the Audit Committee received from EY its assessment of and opinion on the company’s internal control over financial reporting as of December 31, 2020.2022. The Audit Committee reviewed and discussed the results of management’s assessment and EY’s audit.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board, and the Board has approved, that the audited consolidated financial statements be included in the company’s Annual Report on Form 10-K for the year ended December 31, 20202022 for filing with the Securities and Exchange Commission.SEC. The Audit Committee also approved the appointment of EY as the company’s independent registered public accountants for the fiscal year ending December 31, 20212023 and recommended that
the Board submit this appointment to the company’s
shareholders for ratification at the Annual Meeting.
THE AUDIT COMMITTEE
James H. Kropp, Chair
Michelle C. Kerrick
Lynn C. Swann
Jay Willoughby
Matthew R. Zaist
2023 Proxy Statement | 35 |
Share Ownership of 5% or Greater Beneficial Owners
The following table sets forth information regarding the beneficial ownership of our common shares and common shares into which units in American Homes 4 Rent, L.P., our operating partnership (“OP units”), may be exchangeable by each person known by us to be the beneficial owner of 5% or more of our common shares and OP units as of December 31, 2020.2022.
Name and Address | Number of Common Shares Beneficially Owned (1) | Number of Common Shares and OP Units Beneficially Owned (2) | Percentage of All Common Shares | Percentage of All Owned (2) | ||||
The Vanguard Group Malvern, PA 19355 (3) | 38,710,680 | 38,710,680 | 12.22% | 10.51% | ||||
JPMorgan Chase & Co. 383 Madison Avenue New York, NY 10017 (4) | 22,612,805 | 22,612,805 | 7.14% | 6.14% | ||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 (5) | 22,003,185 | 22,003,185 | 6.95% | 5.97% | ||||
Tamara Hughes Gustavson c/o Malibu Management 22917 Pacific Coast Highway, Suite 300 Malibu, CA 90265 (6)(7) | 20,261,737 | 20,261,737 | 6.40% | 5.50% | ||||
Principal Real Estate Investors, LLC 801 Grand Ave Des Moines, IA 50392 (8) | 19,451,957 | 19,451,957 | 6.14% | 5.28% | ||||
B. Wayne Hughes c/o Malibu Management Malibu, CA 90265 (7) | 18,409,565 | 18,409,565 | 5.81% | 5.00% | ||||
HF Investments 2010, LLC c/o Malibu Management Malibu, CA 90265 (9) | 6,645,581 | 54,765,472 | 2.10% | 14.87% | ||||
Name and Address | Number of Common Shares Beneficially Owned (1) | Number of Common Shares and OP Units Beneficially Owned (2) | Percentage of All Common Shares | Percentage of All Owned (2) | ||||||||||||||||
The Vanguard Group (3) Malvern, PA 19355 | 41,354,072 | 41,354,072 | 11.70 | % | 10.21 | % | ||||||||||||||
BlackRock, Inc. (4) 55 East 52nd Street New York, NY 10055 | 23,468,809 | 23,468,809 | 6.64 | % | 5.80 | % | ||||||||||||||
Tamara H. Gustavson (5) c/o Malibu Management 22917 Pacific Coast Highway, | 21,448,798 | 21,448,798 | 6.07 | % | 5.30 | % | ||||||||||||||
Norges Bank Bankplassen 2 Norway | 20,545,305 | 20,545,305 | 5.81 | % | 5.07 | % | ||||||||||||||
HF Investments 2010, LLC (7) c/o Malibu Management Malibu, CA 90265 | 6,645,581 | 54,765,472 | 1.88 | % | 13.53 | % | ||||||||||||||
(1) Assumes a total of 316,021,385352,881,826 Class A and 635,075 Class B common shares are outstanding as of December 31, 2020.2022. All Class B common shares are held by HF Investments 2010, LLC (“HF LLC”).
(2) Assumes a total of 316,656,460353,516,901 common shares and 51,726,98051,376,980 OP units (which OP units may be redeemed for cash or, at our option, exchanged for our Class A common shares) are outstanding as of December 31, 2020,2022, excluding OP units held by the company.
(3) This information is as of December 31, 20202022 and is based on a Schedule 13G/A filed on February 10, 20219, 2023 by The Vanguard Group as investment advisor to report that it has shared voting power with respect to 780,564450,476 Class A common shares, sole dispositive power with respect to 37,706,28340,667,643 Class A common shares and shared dispositive power with respect to 1,004,397686,429 Class A common shares.
(4) This information is as of December 31, 2020 and is based on a Schedule 13G filed on January 8, 2021 by JPMorgan Chase & Co. to report that it has sole voting power with respect to 20,219,460 Class A common shares and sole dispositive power with respect to 22,612,805 Class A common shares.
(5) This information is as of December 31, 20202022 and is based on a Schedule 13G/A filed on January 29, 2021February 1, 2023 by BlackRock, Inc. to report that it has sole voting power with respect to 20,479,91921,530,642 Class A common shares and sole dispositive power with respect to 22,003,18523,468,809 Class A common shares.
(6)(5) Includes 27,50030,000 shares underlying stock options granted under the 2012 Incentive Plan that have vested or will vest within 60 daysas of December 31, 2020.2022. Does not include any shares held by (i) HF LLC which is comprised of trusts established by B. Wayne Hughes, for certain of his heirs, including the children of Ms. Gustavson. Shares heldGustavson or (ii) other trusts formed by HF LLCB. Wayne Hughes for which Ms. Gustavson currently serves as trustee. These shares are reported separately in this table. Mr. Singelyn was the sole manager of HF LLC.
(7) Mr. Hughes co-founded the company with Mr. Singelyn and was Chairperson of the Board until May 2019. Ms. Gustavson is his daughter. The information is based on information contained in Form 4s filed by Mr. Hughes on December 1, 2020 and by Ms. Gustavson on May 7, 2020. Mr. Hughes and Ms. Gustavson have filed a joint Schedule 13D, as amended most recently on March 12, 2020, to report their collective ownership of Class A common shares and may constitute a “group” within the meaning of section 13(d)(3) of the Exchange Act, although each of these persons disclaims beneficial ownership of the Class A common shares owned by the others.
(8)(6) This information is as of December 31, 20202022 and is based on a Schedule 13G13G/A filed on February 16, 202114, 2023 by Principal Real Estate Investors, LLCNorges Bank to report that it has sharedsole voting power with respect to 19,451,95720,545,305 Class A common shares and sharedsole dispositive power with respect to 19,451,95720,545,305 Class A common shares.
(9)(7) HF Investments 2010, LLC is comprised of trusts established by Mr.B. Wayne Hughes for certain of his heirs. Mr. Singelyn wasAnita McIntyre, an officer of Malibu Management, Inc., a corporation 50% owned by Ms. Gustavson, is the sole manager of HF LLC as of December 31, 2020. Mr. Singelyn resigned as sole manager of HF LLC as of February 15, 2021.LLC. As the sole manager of HF LLC, Mr. Singelyn hadMs. McIntyre has voting and dispositive power over the 54,765,472 common shares and OP units directly owned by HF LLC and may have beenbe deemed to have beneficial ownership over such securities. Mr. SingelynMs. Gustavson disclaims beneficial ownership of all common shares and OP units owned by HF LLC during the time he served as sole manager.LLC. The HF LLC ownership interests disclaimed by Mr. SingelynMs. Gustavson include:
(i) 6,010,506 Class A common shares;
(ii) 635,075 Class B common shares (for voting purposes, each Class B common share entitles the holder to 50 votes on all matters on which the holders of Class A common shares are entitled to vote); and
(iii) 48,119,891 Class A units issued by our operating partnership (“Class A units”).
36 | AMH |
Share Ownership of Trustees and Management
The following table sets forth information, as of March 1, 2021,2023, regarding the beneficial ownership of our common shares and common shares into which OP units may be exchangeable by (1) each of our executive officers, (2) each of our trustees and (3) all of our executive officers and trustees as a group. Except as otherwise indicated, each trustee and executive officer has sole voting and investment power over his or her shares.
Name | Number of Common Shares Beneficially Owned (1) | Number of Common Shares and OP Units Beneficially Owned (2) | Percentage of All Common Shares Beneficially Owned (1) | Percentage of All OP Units Beneficially | Number of Common Shares Beneficially Owned (1) | Number of Common Shares and OP Units Beneficially Owned (2) | Percentage of All Common Shares Beneficially Owned (1) | Percentage of All Owned (2) | ||||||||||||||||||||||||||||||||
Kenneth M. Woolley (4) | 67,006 | 67,006 | * | * | ||||||||||||||||||||||||||||||||||||
Matthew J. Hart (4) | 81,076 | 81,076 | * | * | ||||||||||||||||||||||||||||||||||||
David P. Singelyn (3)(4) | 334,298 | 1,934,298 | * | * | ||||||||||||||||||||||||||||||||||||
David P. Singelyn (3) | 338,994 | 1,588,994 | * | * | ||||||||||||||||||||||||||||||||||||
Douglas N. Benham (4) | 48,695 | 60,903 | * | * | 58,553 | 70,761 | * | * | ||||||||||||||||||||||||||||||||
Jack Corrigan | 193,162 | 893,162 | * | * | 226,583 | 926,583 | * | * | ||||||||||||||||||||||||||||||||
David Goldberg | 35,996 | 576,062 | * | * | 43,354 | 583,420 | * | * | ||||||||||||||||||||||||||||||||
Tamara Hughes Gustavson (4)(5) | 20,261,737 | 20,261,737 | 6.39 | % | 5.50 | % | ||||||||||||||||||||||||||||||||||
Matthew J. Hart (4) | 78,173 | 78,173 | * | * | ||||||||||||||||||||||||||||||||||||
Tamara H. Gustavson (4)(5) | 21,448,798 | 21,448,798 | 5.93 | % | 5.19 | % | ||||||||||||||||||||||||||||||||||
Michelle C. Kerrick | – | – | – | – | 6,827 | 6,827 | * | * | ||||||||||||||||||||||||||||||||
James H. Kropp (4) | 71,983 | 71,983 | * | * | 81,841 | 81,841 | * | * | ||||||||||||||||||||||||||||||||
Christopher C. Lau (4) | 47,632 | 47,632 | * | * | 57,160 | 57,160 | * | * | ||||||||||||||||||||||||||||||||
Bryan Smith (4) | 287,771 | 287,771 | * | * | 297,961 | 297,961 | * | * | ||||||||||||||||||||||||||||||||
Lynn C. Swann | 13,000 | 13,000 | * | * | 19,845 | 19,845 | * | * | ||||||||||||||||||||||||||||||||
Sara H. Vogt-Lowell (4) | 66,512 | 66,512 | * | * | 95,284 | 95,284 | * | * | ||||||||||||||||||||||||||||||||
Winifred M. Webb (4) | 8,173 | 8,173 | * | * | 20,531 | 20,531 | * | * | ||||||||||||||||||||||||||||||||
Jay Willoughby (4) | 8,173 | 8,173 | * | * | 20,531 | 20,531 | * | * | ||||||||||||||||||||||||||||||||
Kenneth M. Woolley (4) | 66,864 | 66,864 | * | * | ||||||||||||||||||||||||||||||||||||
Matthew R. Zaist | 3,985 | 3,985 | – | – | 11,343 | 11,343 | * | * | ||||||||||||||||||||||||||||||||
All trustees and executive officers as a group (16 persons) | 21,526,296 | 24,378,570 | 6.79 | % | 6.61 | % | 22,875,545 | 25,377,819 | 6.32 | % | 6.14 | % | ||||||||||||||||||||||||||||
* Represents less than 1.0%
(1) Includes shares of Class A and Class B common shares held of record or beneficially by members of the immediate family of executive officers of the company.
(2) Assumes 316,211,674361,138,050 Class A common shares, 635,075 Class B common shares and 51,726,98051,376,980 OP units (which OP units may be redeemed for cash or, at our option, exchanged for our Class A common shares) are outstanding as of March 1, 2021,2023, excluding OP units held by the company.
(3) Mr. Singelyn has pledged 1,000,000 Class A partnership units and 175,000 Class A common shares.shares to secure a personal loan that was indirectly used to finance his initial investment in the company. This pledge is grandfathered under the company’s insider trading policy, which prohibits any new pledges.
(4) Includes the following vested sharestock options granted under the 2012 Incentive Plan that have vested or will vest within 60 daysas of March 1, 2021: 25,0002023: 2,500 for Mr. Singelyn, 267,500Lau, 245,000 for Mr. Smith, 7,500 for Mr. Lau, 40,00042,500 for Ms. Vogt-Lowell, 57,50050,000 for each of Messrs. Hart, Woolley, and Woolley, 47,500 for Mr. Kropp, 27,50030,000 for Mr. Benham and Ms. Gustavson, and 5,00010,000 for Ms. Webb and Mr. Willoughby.
(5) Includes 27,500 shares underlying stock options granted under the 2012 Incentive Plan that have vested or will vest within 60 days of March 1, 2021. Does not include any shares held by HF LLC, which is comprised of trusts established by B. Wayne Hughes for certain of his heirs, including the children of Ms. Gustavson. Ms. Gustavson disclaims any beneficial ownership of the shares and units held by HF LLC. HF LLC ownership interests include:
(i) 6,010,506 Class A common shares;
(ii) 635,075 Class B common shares issued (for voting purposes, each Class B common share entitles the holder to 50 votes on all matters on which the holders of Class A common shares are entitled to vote); and
(iii) 48,119,891 Class A units.
2023 Proxy Statement | 37
Executive Officer Share Ownership of
Company Shares
and Other Compensation Policies
Executive Officer Share Ownership Policy
Our share ownership guidelinespolicy approved by the Board areis intended to align the interests of the company’sour executive officers and trustees with the interests of the company’s shareholders. For information regarding requirements for trustees, see “How We Are Paid—Share Ownership Policy” above. The policy applies to the company’s Chief Executive Officer and other Section 16 officers and the independent members of the Board.executive officers. Each person covered by the policy is expected to own Class A common shares and equivalents (including Class A partnership units that are convertible into Class A common shares and unvested RSUs that are only subject to time vesting) of the company with an aggregate market value of:
| • | Six times the previous year annual base salary for the Chief Executive Officer; and |
| • | Three times the previous year annual base salary for the other executive officers. |
Securities that have been pledged, unvested performance-based RSUs (“PSUs”) and shares underlying vested or unvested options are not counted for purposes of the policy.
Our Chief Executive Officer was required to beAll of our NEOs have met the ownership thresholds described above and are in compliance with the policy. Each executive officer covered by the policy on its effective dateis expected to establish an initial beneficial ownership position of Class A common shares and is currentlyequivalents within one year of his or her appointment to the position that results in compliance. All other covered personsthe application of the policy and to be in full compliance within five years of becoming subject to the policy are expected to be in compliance by February 24, 2026, the fifth anniversary of the effective date of the policy. Covered personsExecutive officers already subject to the policy that become subject to increased ownership requirements as a result of a promotion are expected to be in compliance with the increased threshold by the fifth anniversary of the promotion.
If an executive officer is not in compliance with the policy (other than solely as a result of decreases in Class A common share market price), the executive officer must retain 100% of the Class A common shares and equivalents beneficially owned and subsequently awarded by the company (other than sales to cover withholding taxes owed in connection with equity awards or option exercise costs) until the executive officer is in compliance with the policy.
The Human Capital and Compensation Committee has the authority to administer and interpret, to monitor compliance with and to make all determinations regarding the share ownership policy.
Clawback Policy
Pursuant toThe Human Capital and Compensation Committee administers the company’s Executive Officer Performance-Based Compensation Recovery Policy,Policy. Under the policy, if an accounting restatement of the company’s financial statements is required to be filed to correct a material error as a result of misconduct, the Human Capital and Compensation Committee will recover from any current or former executive officer regardless of fault, that portion ofany equity andor cash performance-based compensation based on financial
information required to be reported under the securities laws that would not have been paid inbased on the restated financial statements. The clawback period covers the three completed fiscal years preceding the year in which an accounting restatement is requiredand applies regardless of the fault of the executive officer. The Human Capital and Compensation Committee expects to be filedamend the policy to correct a material error as a result of misconduct.comply with new NYSE rules related to compensation recovery policies when they become effective.
Anti-Hedging and Anti-Pledging Policy
The anti-hedging provisions of our insider trading policy prohibitsprohibit trustees, officers and employees from directly or indirectly engaging in hedging against future declines in the market value of any securities of the company. This would cover the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds), or other transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of our securities.
In 2022, we amended our insider trading policy to adopt anti-pledging provisions, which prohibit trustees, officers and employees from any new pledge of company securities after the effective date of the amendment, including holding company securities in a margin account or otherwise pledging company securities as collateral for a loan.
In 2012, to finance his acquisition of interests in the company’s former sponsor, AH LLC, Mr. Singelyn obtained
38 | AMH
loans secured by a pledge of a portion of his holdings of common shares and operating partnership units. These loans were subsequently refinanced with a loan from a third party lender subject to a similar pledge. Our Board recognizes that this pledge originated with Mr. Singelyn’s initial investment in founding the company and that maintaining this pledge facilitates liquidity and financial flexibility for Mr. Singelyn while enabling him to maintain his significant ownership interest in the company. The Board has determined that the pledge (i) does not present a significant risk of lender foreclosure or an unexpected sale of a large volume of shares on the open market, (ii) is not part of a hedging
strategy and (iii) is unlikely to result in adverse effects to shareholders. In addition, the Board has considered the fact that Mr. Singelyn owns a significant number of unpledged Class A common shares and equivalents and that such unpledged equity satisfies the requirements of our share ownership policy. This pledge was grandfathered under the amendments to the insider trading policy adopted in 2022 and no new pledges are permitted.
Waivers of these prohibitions are not permitted under the policy. The objective of this policy is to further enhance alignment between the interests of our trustees, officers and employees and those of our shareholders.
Policy Regarding Pledging of Shares
Our securities trading policy discourages, but does not prohibit, the pledging of common shares by insiders. In 2012, in connection with his acquisition of interests in the company’s former sponsor, AH LLC, Mr. Singelyn obtained loans that have been refinanced with a loan from a third-party lender that is secured by a pledge of a portion of his holdings of common shares and operating partnership units. Our Board recognizes that maintaining this pledge facilitates liquidity and financial flexibility for Mr. Singelyn.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires the company’s trustees and executive officers and persons who own more than 10% of any registered class of the company’s equity securities to file reports of ownership and changes of ownership of those securities with the SEC and the NYSE. Executive officers, trustees and
2023 Proxy Statement | 39 |
greater than 10% shareholders are required by SEC regulations to provide the company with a copy of all Section 16(a) forms that they file. Based on a review of the reports submitted to the company and of filings on the SEC’s EDGAR website and of written representations from executive officers and trustees, the company
believes that all trustees and officers filed timely reports during 2020; however, B. Wayne Hughes, a shareholder and our former Chairperson, filed an amended Form 4 to report holdings of 1,700 shares of the company that he inadvertently omitted from the original Form 4.
Set forth below is certain information regarding each of our current executive officers, other than Messrs.Mr. Singelyn, and Corrigan, whose biographical information is presented under “Biographical Information About Our Trustee Nominees.” Our executive officers are appointed annually by, and serve at the discretion of, the Board. There are no family relationships between any of the executive officers, and there is no arrangement or understanding between any executive officer and any other person pursuant to which the executive officer was selected.
|
Christopher C.
Age: | Chief Financial Officer
| |||
Background
•
• National Rental Home Council, Member and Chair of the Finance Committee (since 2018)
• Deloitte & Touche LLP, Senior Manager, Real Estate M&A Advisory; Senior Manager, Real Estate Audit |
Education
• B.S. in Accounting, San Diego State University
• Certified Public Accountant (inactive) | |||
Bryan Smith
Age: | Chief Operating Officer
| |||
Background
•
• American Homes 4 Rent Advisor, LLC (our former manager), Senior Vice President of Acquisitions
• Tax Review Group, Partner
• Watermark Group, Partner and Chief Financial Officer
• Deloitte & Touche LLP, Senior | Education
• B.A. in Business Economics, University of California, Los Angeles
• M.B.A., UCLA Anderson School of Management
• Certified Public Accountant (inactive) | |||
Sara H. Vogt-Lowell
Age: | Chief Legal Officer
| |||
Background
•
• American Homes 4 Rent Advisor, LLC (our former manager), Chief Legal Officer
• Public Storage Canada and American Commercial Equities, General Counsel
• Latham & Watkins LLP, Member, Finance Department | Education
• B.A. in Political Science, University of California, Los Angeles
• J.D., University of California, Berkeley
• Member of the California State Bar | |||
40 | AMH
Compensation Discussion and Analysis
TheThis Compensation Discussion and Analysis section explains the objectives of our executive compensation programs, outlines the elements of executive officer compensation and describes the factors considered by the Human Capital and Compensation Committee (as used in this section, the “Committee”) to determine the amounts of compensation for our named executive officersNEOs for 2020 performance.2022 service.
For 20202022, our named executive officers, also called NEOs are: (i) David P. Singelyn, Chief Executive Officer and a trustee; (ii) Jack Corrigan, former Chief Investment Officer and a trustee; (iii) Bryan Smith, Chief Operating Officer; (iv) Christopher C. Lau, Chief Financial Officer; and (v) Sara H. Vogt-Lowell, Chief Legal Officer; and (vi) Stephanie G. Heim, our former Chief Governance Officer who resigned in July 2020.Officer.
2020 2022 Say-on-Pay Vote Results and Shareholder Engagement
At our 20202022 Annual Meeting of Shareholders, 98.7% of votes cast supported our say-on-pay proposal. Our Committee feels that this level of support is indicative of broad approval94.3% of our compensation program.shareholders voted in support of our say-on-pay proposal.
Over the course of 2020,2022, the company maintained an ongoing dialogue with a broad set of shareholders on diverse topics including executive compensation, business operations and strategy, financial results, corporate governance and environmental and social priorities, and executive compensation.priorities. Members of management and, as appropriate, membersin some instances, Mr. Benham, chair of the Boardour Nominating and Corporate Governance Committee, participated in these meetings.
Based on these discussions and the results of our 2022 say-on-pay vote, we believe shareholders continue to broadly support our compensation program, which aligns the majority of executive compensation with shareholder return.
20202022 Compensation Overview
The 20202022 compensation program for NEOs consisted of three components: (i) an annual base salary; (ii) an annual cash incentive based substantially on the achievement of pre-determined performance criteria consisting of a corporate metrics, business unit goalsmetric and personalindividual goals; and (iii) long-term equity incentives designed to directly link executive compensation with shareholder outcomes.
Since the company commenced operations in 2012, it has historically paid certain of its executive officers, particularly the Chief Executive Officer, annual total compensation at levels well below its peers. In doing so the company has considered the significant equity ownership such executives had as a result of their role in founding the firm and the retention protections inherent in the manner in which that equity ownership had been financed. Starting in 2019, the year Messrs. Singleyn and Corrigan repaid the loans payable to Ms. Gustavson that were secured by securities in the company to finance their equity investments in the company at its founding, the company, in order to address retention risks, began to transition NEO annual total compensation to levels more competitive with peer pay practices and more representative of the value and contributions of the management team. In 2020,2022, the company continued this transition by modestly increasing NEO salaries, target bonuses and equity grant values.values by the amounts described in the “2022 Compensation Decisions” section of this proxy statement.
As discussed below,The Committee continued its practice of awarding PSUs as part of the Committee, with the assistance of its new independentequity compensation consultant, has approved a number of enhancementsthat are tied to the compensation program for NEOs for 2021achievement of both relative total shareholder return (“TSR”) and absolute Core Funds from Operations per share (“Core FFO”) growth goals, which were set based on the company’s peer group’s Core FFO performance over a three-year period. The Committee also refined the peer group to better align NEO compensation with performance, peer compensation practicesthe company’s size and the interests of our shareholders.business.
2023 Proxy Statement | 41 |
Compensation Philosophy, Objectives and Governance
The primary goal of our executive compensation program is to align the interests of our NEOs with those of our shareholders in a way that allows us to attract, retain and retain the bestmotivate highly qualified executive talent. The Committee oversees the compensation of our NEOs, including setting base salaries, awarding annual cash incentives and granting equity awards. The following table highlights key features of our executive compensation program that demonstrate our ongoing commitment to promoting shareholder interests through sound compensation governance practices.
What We Do | What We Don’t Do | |
✓ DO require “double trigger” change in control benefits |
✘ NO | |
✓ DO seek to align pay and performance with a balanced mix of company and individual performance criteria tied to operational and strategic objectives (including diversity and inclusion and human capital management objectives) established at the beginning of the performance period by the Committee |
✘ NO | |
✓ DO award a significant percentage of NEO total compensation in the form of equity which |
✘ NO | |
✓ DO have robust NEO |
✘ NO re-pricing or buyouts of underwater stock options | |
✓ DO have a mandatory compensation clawback policy for executive compensation covering both cash and equity incentives |
✘ NO hedging or future pledging transactions by employees or trustees involving our securities | |
✓ DO annually review a compensation risk assessment with the Committee |
✘ NO guarantees of cash incentive compensation or of equity grants | |
✓ DO provide caps within annual and long-term incentive plan awards |
✘ NO long-term employment contracts with executive officers | |
✓ DO engage an independent compensation consultant to advise the Committee |
✘ NO excessive perquisites | |
✓ DO utilize an ESG metric as one of the incentive compensation criteria | ||
42 | AMH
The following chart depicts for Mr. Singelyn and for the other NEOs the split between (i) at-risk compensation, consisting of RSUs, PSUs and annual cash incentive awards and (ii) compensation not tied to performance, consisting of base salary, and further demonstrates our philosophy of aligning executive compensation with company performance and shareholder interests. The amounts below include PSUs that would have been paid assuming target achievement for 2022 and annual cash incentive awards based on actual achievement in 2022:
CEO
Other Executive Officers
Elements of Executive Officer Compensation
Component | Form | Objective and Explanation | ||
Salary |
Cash |
• Base level compensation, rewards day-to-day performance and standard job duties • Reflects level of responsibilities and experience/tenure | ||
Performance-Based Annual |
Cash |
• Designed to reward the achievement of specific, pre-established annual financial and operational objectives • • Committee has discretion to adjust performance criteria, including to address extraordinary events | ||
Equity Awards |
|
• The equity pay mix for our CEO and other NEOs in 2022 was 60% PSUs and 40% RSUs • Provide alignment of interests with shareholders • Multi-year vesting periods aid in retention • Service-based RSUs further support retention as they retain some value and provide a retention incentive even during difficult market conditions, when we may need it most • | ||
2023 Proxy Statement | 43
20202022 Compensation Decisions
Changes to Compensation of the CEO
As a founder and significant shareholder of the company, Mr. Singelyn historically agreed to accept a below-market salary and to forego any bonus or equity incentives during the company’s initial growth phase. Starting in 2019, the Committee began transitioning to market compensation for Mr. Singelyn.Singelyn, supported by the data and recommendations provided by the Committee’s independent compensation advisor. As part of this process, Mr. Singelyn’s base salary was increased by $20,000from $700,000 in 20202021 to $570,000, his performance-based cash incentive target was increased from 150% to 200% of base salary,$800,000 in 2022, and he was granted equity awards, as described below. The Committee intends to continue this transition over the next several years until the Committee determines that Mr. Singelyn is paid at a level competitive with CEOs in the company’s peer group. Mr. Singelyn’s pay is currently2022 total compensation at target was in the bottom 25%quartile of the peer group.
Changes to Compensation of the other Named Executive Officers
Starting in 2019, the Committee, based on peer company compensation information, began transitioning NEO compensation to levels competitive with its peer group. As part of that transition process, and onin consideration of the recommendation offrom Mr. Singelyn and the views of other Board members, the Committee increased 20202022 base salaries for Mr. Corrigan to $570,000,$660,000, for Mr. Smith to $450,000,$600,000, for Mr. Lau to $450,000$600,000 and for Ms. Vogt-Lowell to $350,000 and increased the performance-based incentive bonus targets for Mr. Smith, Mr. Lau and Ms. Vogt-Lowell to 125% of base salary.$475,000.
Performance-based Incentive Bonuses—20202022 Performance Metrics and Targets
The 20202022 incentive plan targets established by the Committee in February 2020the first quarter of 2022 were:
NEO (1) | Title | Target % of base salary | |||||
David P. Singelyn | Chief Executive Officer | 200% | |||||
| Chief | ||||||
| Chief | ||||||
|
| ||||||
Sara H. Vogt-Lowell | Chief Legal Officer | 125% | |||||
(1) Jack Corrigan, retired Chief Investment Officer, retired in May 2022 and did not receive a cash bonus for 2022. The Committee had established his 2022 incentive plan target at 150% of his base salary.
20202022 performance-based incentive bonuses (the “Annual Incentive Plan” or “AIP”) were based 70% on a corporate metrics, business unitmetric and personal30% on individual goals that were established for each NEO by the Committee in February 2020.the first quarter of 2022.
| • | Corporate Metric: In the first quarter of 2022, the Committee set the corporate metric as growth in Core Funds from Operations per share. The Committee selected Core FFO as the corporate metric because it is a commonly used measure of real estate investment trust (“REIT”) performance by investors and it is a metric used for compensation purposes by the majority of our peer group. |
|
| Individual Goals: The 2022 individual goals set for the NEOs are described below under “2022 Performance-based Cash Incentive Awards.” |
Growth in Core FFO
The target Core FFO goal for 20202022 was $1.19$1.58 per common share, an 8.2%a 15.8% increase over the 2019 target.2021 actual Core FFO per common share. The threshold, target and maximum bonus payable at the targets set by the Committee isare set forth below. In the event the result achieved was between target levels in the chart, the bonus paid is adjusted accordingly.accordingly through linear interpolation.
| |||||
| |||||
| |||||
| |||||
| |||||
Same Home NOI44 | AMH
The Committee set the target for 2020 Same Home NOI growth as 3.3%, an increase over the 2019 target of 3.1%. The threshold, target and maximum bonus payable at the targets set by the Committee is set forth below. In the event the result achieved was between target levels in the chart, the bonus paid is adjusted accordingly.
| |||||
| |||||
| |||||
| |||||
| |||||
Investment Production—Development and Acquisition
The following tables identify the development and acquisition goals established for Mr. Corrigan and the corresponding percentage of bonus earned. In the event the result achieved was between target levels in the chart, the bonus paid is adjusted accordingly. Since Mr. Corrigan’s ability to achieve these goals was dependent on the availability of capital, the Committee retained the discretion to adjust the targets as appropriate if capital was not available to acquire, build and deliver these levels of homes.
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
| |||||
Committee Assessment of Achievement of 20202022 Goals
Although the2022 Performance-based Cash Incentive Awards
Corporate metric achievement
The company was not as significantly adversely impacted by the COVID-19 pandemic as many other companies, the pandemic did adversely impact the company’s 2020achieved 2022 Core FFO and Same Home NOI results due to:
The COVID-19 pandemic also significantly impacted the company’s ability to achieve targeted development and acquisition production goals. In response to the significant adverse economic impact of the COVID-19 pandemic, the company elected to temporarily suspend its traditional acquisition channel and National Builder Program acquisitions given market uncertainties regarding future asset values and in order to preserve capital. In addition, compliance with state and local mandates related to COVID-19 impacted construction activity and the timing of deliveries. In May 2020 the company lowered its 2020 guidance on construction deliveries to between 1,000 and 1,200 homes from 1,200 to 1,500 homes.
In August 2020, the Committee discussed the impact of the pandemic on the company’s ability to achieve the corporate metric targets applicable to the annual cash incentive and discussed possible adjustments. In November 2020, the Committee discussed the matter further, including possible adjustments to the calculation of Core FFO and Same Home NOI for the extraordinary items attributable to the COVID-19 pandemic.
In January 2021, the Committee determined, after further deliberations and consultation with Semler Brossy, that it would adjust the calculation of Core FFO and Same Home NOI for purposes of the 2020 bonus for the extraordinary increases in uncollectible rents, uncollectible resident utility reimbursements and expenses for new cleaning and safety protocols, in each case$1.58 by amounts that the Committee determined were attributable to the COVID-19 pandemic based on historical norms. The Committee also determined that, given the COVID-19 impediments to acquisitions and developments, it would award the portion of Mr. Corrigan’s bonus attributable to development and acquisition production at 95% of target. For 2020, development deliveries were 1,647 and homes acquired were 2,592. In making these decisions the Committee considered, among other things, that these pandemic-related impacts on the metrics were not considered when the goals were set in February 2020, that the company, under the leadership of the NEOs had outperformed the company’s average residential peer set in both Core FFO and Same Home NOI growth metrics, that the company had significantly exceeded its May 2020 revised development production guidance. The Committee also believes there are increased retention risks facing the company given the company’s outperformance and well-funded new entrants into the sector.
However, given these calculation adjustments and the Committee’s decision that NEOs not receive bonuses at levels above those paid to other employees,2.5%. As a result, the Committee determined that 2020 payouts related toeach NEO earned 83.5% of his or her target for the Core FFO per share component of the award.
 | Core FFO per share (70% weighting) | |||||||||||
Performance Achievement | Performance (% Target) | AIP Payout (% Target) | Performance (Core FFO per share) | |||||||||
Maximum | 115 | % | 200 | % | $1.817 | |||||||
Target | 100 | % | 100 | % | $1.580 | |||||||
Threshold | 85 | % | 0 | % | $1.343 | |||||||
Actual | 97.5 | % | 83.5 | % | $1.5408 | |||||||
|
|
|
|
|
|
|
| |||||
Individual goal achievement (30% weighting)
In addition to the achievement of the corporate metric, each NEO was also assessed on four individual goals related to: driving results for the company, diversity and Same Home NOI resultsinclusion, developing a succession plan for his or her function and advancing the company’s ESG program. The Committee determined that each NEO earned 100% of his or her target for individual goals component of the award, as set forth below.
In the first quarter of 2022, the Committee determined that Mr. Singelyn’s 2022 goals would be capped atto (i) prepare a business plan to drive the company’s strategic plan for the next three years; (ii) formalize the company’s sustainability initiatives; (iii) promote employee engagement through in-person town hall meetings and to enhance employee engagement programs; (iv) work with the other NEOs to put in place individual development plans for each senior leader of the company for succession planning purposes; and (v) further develop his communications skills and strategies.
In February 2023, the Committee reviewed Mr. Singelyn’s achievement of these goals and determined that he had earned 90% of his target for the individual goal portion of his 2022 performance-based cash incentive award. The Committee considered the following in making its determination:
| • | Mr. Singelyn’s development of a business plan to capitalize on growth opportunities, navigate dynamic market conditions and enhance the resident experience. |
| • | Mr. Singelyn’s leadership in establishing a formal sustainability function and completion of a sustainability analysis including third-party surveys to develop a three-year sustainability plan; |
| • | Mr. Singelyn hosted nine in-person town hall events across the company’s regional offices as pandemic restrictions lifted and actively engaged with all members of senior management throughout the year in group and individual settings to discuss the company’s strategy; |
| • | Mr. Singelyn’s succession planning for each NEO position and initiatives to identify and develop future leaders; and |
| • | Mr. Singelyn’s work further developing his communication skills and strategies. |
The Committee followed a similar process of establishing individual goals and assessing results for our other NEOs. The Committee determined that Messrs. Smith and Lau each achieved 100% of their goals and Ms. Vogt-Lowell achieved 95% of target amounts.her goals for the individual goal component of their respective 2022 performance-based cash incentive awards.
2023 Proxy Statement | 45 |
The following table reflects the adjustments made to the Core FFO and Same Home NOI growth goals and the related awards:
| Result | % of Target Earned | Agreed Award % ** | ||||||||||||
Core FFO * | $1.2068 | 114.04% | 95% | ||||||||||||
Same Home NOI Growth * | 3.86% | 150% | 95% | ||||||||||||
*As adjusted by the Committee. Reported 2020 results, which did not reflect any COVID-19 adjustments, were Core FFO of $1.1622 per share and Same Home NOI growth of 1.05%, and would have resulted in 52.94% and 0% earned, respectively.
** As discussed above, the Committee agreed to cap the amount of awards attributable to Core FFO and Same Home NOI growth at 95% of target. Also, due to the impact of COVID-19, the Committee exercised its discretion to award 95% for development deliveries and homes acquired.
The Committee determined that COVID-19 pandemic adjustments to business unit and personal goals were not necessary or appropriate, except that the operational efficiency computation was adjusted for COVID-19 expense impacts. After assessing 2020 NEO performance based on these business unit and personal goals, the Committee determined, taking into consideration the recommendation of Mr. Singelyn with respect to the other NEOs, that the NEOs had achieved target levels for their respective business unit and personal goals, except as noted in the table below.
2020 Performance-based Cash Incentive Awards
The following table details the target goal, the results described above, and correspondingperformance-based cash incentive award achieved for each NEO, as determined by the Committee:
Company Goals | David P. Singelyn | Jack Corrigan | Bryan Smith | Christopher C. Lau | Sara H. Vogt- Lowell |
| ||||||||||||||||||||||||
Target %
|
Target %
|
Target %
|
Target %
|
Target %
| ||||||||||||||||||||||||||
Core Funds from Operations |
| 50 | % |
| 45 | % |
| 20 | % |
| 40 | % |
| 60 | % |
|
|
| ||||||||||||
| 47.50 | % |
| 42.80 | % |
| 19 | % |
| 38 | % |
| 57 | % |
|
|
| |||||||||||||
Same Home Core NOI after Capital Expenditures |
| 25 | % |
| – |
| 40 | % |
| 20 | % |
| – |
|
|
| ||||||||||||||
| 23.75 | % |
| – |
| 38 | % |
| 19 | % |
| – |
|
|
| |||||||||||||||
Investment production-development |
| – |
| 10 | % |
| – |
| – |
| – |
|
|
| ||||||||||||||||
| – |
| 9.50 | % |
| – |
| – |
| – |
|
|
| |||||||||||||||||
Investment production-total acquisition |
| – |
| 10 | % |
| – |
| – |
| – |
|
|
| ||||||||||||||||
| – |
| 9.50 | % |
| – |
| – |
| – |
|
|
| |||||||||||||||||
Cash-based Performance Award Achievement | David P. Singelyn | Bryan Smith | Christopher C. Lau | Sara H. | ||||||||||||
Core Funds from Operations (70% weighting) | 83.5% | 83.5% | 83.5% | 83.5% | ||||||||||||
Individual Goals (30% weighting) | 90.0% | 100.0% | 100.0% | 95.0% | ||||||||||||
Aggregate Payout % | 85.5% | 88.5% | 88.5% | 87.0% | ||||||||||||
Aggregate Payout Amount | $ | 1,367,200 | $ | 796,050 | $ | 796,050 | $ | 516,266 | ||||||||
Company Goals | David P. Singelyn | Jack Corrigan | Bryan Smith | Christopher C. Lau | Sara H. Vogt- Lowell |
| ||||||||||||||||||||||||
Target %
|
Target %
|
Target %
|
Target %
|
Target %
|
| |||||||||||||||||||||||||
Business and Personal Goals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Strategic plan |
| 10 | % |
| – |
| – |
| – |
| – |
|
|
| ||||||||||||||||
| 10 | % |
| – |
| – |
| – |
| – |
|
|
| |||||||||||||||||
Operational efficiency |
| – |
| 10 | % |
| 10 | % |
| – |
| – |
|
|
| |||||||||||||||
| – |
| 10 | % |
| 9.91 | % |
| – |
| – |
|
|
| ||||||||||||||||
Investment yields |
| – |
| 10 | % |
| – |
| – |
| – |
|
|
| ||||||||||||||||
| – |
| 10 | % |
| – |
| – |
| – |
|
|
| |||||||||||||||||
New business lines |
| – |
| – |
| 10 | % |
| 10 | % |
| 10 | % |
|
|
| ||||||||||||||
| – |
| – |
| 10 | % |
| 10 | % |
| 10 | % |
|
|
| |||||||||||||||
Succession planning |
| – |
| – |
| 5 | % |
| 5 | % |
| 15 | % |
|
|
| ||||||||||||||
| – |
| – |
| 5 | % |
| 5 | % |
| 15 | % |
|
|
| |||||||||||||||
Balance sheet |
| – |
| – |
| – |
| 10 | % |
| – |
|
|
| ||||||||||||||||
| – |
| – |
| – |
| 10 | % |
| – |
|
|
| |||||||||||||||||
ESG |
| 10 | % |
| 10 | % |
| 10 | % |
| 10 | % |
| 10 | % |
|
|
| ||||||||||||
| 10 | % |
| 10 | % |
| 10 | % |
| 10 | % |
| 10 | % |
|
|
| |||||||||||||
Personal |
| 5 | % |
| 5 | % |
| 5 | % |
| 5 | % |
| 5 | % |
|
|
| ||||||||||||
| 5 | % |
| 5 | % |
| 5 | % |
| 5 | % |
| 5 | % |
|
|
| |||||||||||||
Total Target Award |
| 100 | % |
| 100 | % |
| 100 | % |
| 100 | % |
| 100 | % |
|
|
| ||||||||||||
$ | 1,140,000 | $ | 712,500 | $ | 562,500 | $ | 562,500 | $ | 437,500 |
|
|
| ||||||||||||||||||
% Achieved Bonus Award |
| 96.3 | % |
| 96.8 | % |
| 96.9 | % |
| 97.0 | % |
| 97.0 | % |
|
|
| ||||||||||||
$ | 1,097,250 | $ | 689,345 | $ | 545,119 | $ | 545,625 | $ | 424,375 |
|
|
| ||||||||||||||||||
|
20202022 Equity Awards
The Committee believes equity awards help align management and shareholder interests by increasing the percentage of total compensation that consists of equity, supporting long-term value creation and promoting the retention and stability of our executive management team. In February 2020,the first quarter of 2022, the Committee granted 59,589the NEOs a mix of PSUs and time-based RSUs, with 60% of grants being PSUs and the remaining 40% of grants being RSUs. The PSUs have a three-year performance period tied to Mr. Singelyn, 47,400the achievement of both relative TSR (50%) and absolute Core FFO per share growth goals (50%), which were set in the first quarter of 2022 based on an assessment of historical Core FFO growth rates of companies in our peer group over a three-year period. Payouts on PSUs at achievement of threshold goals will be 50% of target and maximum achievement will be 200% of target. PSU payouts are linearly interpolated for performance between the threshold, target, and maximum performance goals. The company’s TSR performance will be compared to a group of companies that includes the benchmarking peer group and constituents in the FTSE NAREIT Residential Index. The time-based RSUs to Mr. Corrigan, 31,600 RSUs to Mr. Lau, 33,857 RSUs to Mr. Smith and 20,586 RSUs to Ms. Vogt-Lowell. The awards vest ratably in equal annual installments over three years beginning one year fromyears.
PSU Payout Level | Relative TSR Performance (50% weighting) | Core FFO Growth Achieved (50% weighting) | ||
200% | 75th Percentile | Maximum achievement against absolute Core FFO growth goal based on historical peer group performance | ||
100% | 50th Percentile | Target achievement against absolute Core FFO growth goal based on historical peer group performance | ||
50% | 25th Percentile | Threshold achievement against absolute Core FFO growth goal based on historical peer group performance | ||
The Committee awarded the datefollowing grants of grant. RSUs and PSUs to the NEOs in February 2022:
2022 | David P. Singelyn | Jack Corrigan | Bryan Smith | Christopher C. Lau | Sara H. Vogt- Lowell | |||||||||||||||
RSUs | 41,036 | 23,596 | 18,466 | 18,466 | 9,746 | |||||||||||||||
PSUs | 61,555 | 35,394 | 27,700 | 27,700 | 14,620 | |||||||||||||||
The Committee considered Mr. Singelyn’s recommendations in determining the grants to Messrs. Corrigan, Smith and Lau and Ms. Vogt-Lowell.
46 | AMH
Corrigan Post-Retirement Consulting Agreement
Mr. Corrigan retired from the company effective May 31, 2022. In connection with his retirement, Mr. Corrigan and the company entered into a consulting agreement for a transition period commencing on the effective date of his retirement through December 31, 2022. The consulting agreement provided for Mr. Corrigan to receive $25,384.62 bi-weekly, which was an equivalent rate to his base salary prior to his retirement. Mr. Corrigan’s retirement was a qualifying retirement under the terms of his equity award agreements because he met the age and service requirement and he executed a customary non-compete and non-solicit agreement. As a result, all of his unvested outstanding RSUs and PSUs will continue to vest on the schedule set forth for each award. Mr. Corrigan did not receive a 2022 performance-based incentive bonus.
2023 Compensation Outlook
Although the company has consistently received strong support for its compensation programs (averaging almost 99% support on say-on-pay votes over the last three years), in August 2020
In February 2023, the Committee, retainedin consultation with its independent compensation consultant Semler Brossy, as its compensation consultant to, among other things, provide an analysis ofand taking into consideration the competitiveness of the company’s executive pay practices, and to provide advice on making enhancements toapproved the 20212023 compensation program. The Committee considered Mr. Singelyn’s recommendations in determining the base salaries, performance-based cash incentive award targets and equity grant amounts to Messrs. Smith and Lau and Ms. Vogt-Lowell.
In January 2021, in response to guidance from Semler Brossy, the Committee’s experience with the 2020 compensation program, the company’s continuing outperformance and shareholder feedback, the Committee made changes to all three components of the 2021 compensation program. These changes reflect, among other things, the Committee and Board’s view that the company’s position as a leader and pioneer in the single-family rental homes business, and its success as an innovator, particularly its market-leading develop-to-rent platform, support the company taking prudent and proactive measures to retain the management team.
Base salaries: The Committee reviewed base salaries for 20212022 and considered, among other things, a market analysis performed by Semler Brossy and, with respect to the executives that report to him, the recommendations of Mr. Singelyn. Following this review,The base salaries for 2023 are set forth below. Mr. Singelyn’s base salary was unchanged from 2022, while Messrs. Smith and Lau each received a base salary increase of 4% and Ms. Vogt-Lowell received a base salary increase of 5.3%. In approving these salaries, the Committee approved an increaseconsidered the strong performance of each NEO in base salariesrecent years, each NEO’s contributions to $700,000the company’s strategic plan, the relative pay of each NEO compared to similar roles at competitors and peer companies and the intense competition for Mr. Singelyn, $600,000 for Mr. Corrigan, $475,000 for Mr. Smith, $475,000 for Mr. Lautop talent in the real estate industry generally and $425,000 for Ms. Vogt-Lowell.in the single-family home rental sector in particular.
Performance-based cash incentive award: The 2021 As in 2022, the 2023 performance-based cash incentive award for NEOs will depend 70% on the achievement of Core FFO goals and 30% on the
achievement of leadership goals that will be tailored to individual roles, but will generally include metricsobjectives related to business strategy, ESG, succession planning and ESG, including diversity and inclusion. TargetThe 2023 target award levels as a percentage of base salary were not changedunchanged from 2020.2022 and are set forth below.
Long-term performance and time-based equity incentives: The 20212023 equity awards will consist of a mix of performance-based RSUsPSUs and time-based RSUs, with 60% of Mr. Singelyn’s grants being performance-based and 40% of grants to the other NEOs grants being performance-based.PSUs. This is the same mix as in 2022. The performance awardsPSU design is unchanged from 2022. The PSUs have a three-year performance period tied to the achievement of both relative total shareholder returnTSR (50%) and absolute Core FFO goals.growth goals (50%), which were set in the first quarter of 2023 based on the Core FFO performance of the company’s peer group over a three-year period. Payouts on performance-based RSUsPSUs at achievement of threshold goals will be 50% of target and maximum achievement will be 200% of target. The time-based RSUs will vest ratably over three years. The Committee awarded PSUs and RSUs as set forth below. The equity award mix between PSUs and RSUs for all NEOs is 60% PSUs and 40% RSUs. In recognition of Mr. Singelyn’s strong performance and his below-market compensation relative to chief executive officers at competitors and peer companies, the following grantsCommittee determined to increase his equity grant amount by 25% for 2023 as compared to 2022.
2023 NEO Compensation | David P. Singelyn | Bryan Smith | Christopher C. Lau | Sara H. Lowell | ||||||||||||
Base Salary | $ | 800,000 | $ | 624,000 | $ | 624,000 | $ | 500,000 | ||||||||
Annual Cash Incentive Target | 200% | 150% | 150% | 125% | ||||||||||||
RSUs | 58,022 | 21,724 | 21,724 | 11,605 | ||||||||||||
PSUs | 87,033 | 32,585 | 32,585 | 17,407 | ||||||||||||
2023 Proxy Statement | 47
Severance and Change of performance-based RSUs in January 2021: 34,121 to Mr. Singelyn; 18,956 to Mr. Corrigan; 14,965 to Mr. Lau; 14,965 to Mr. Smith and 9,312 to Ms. Vogt-Lowell.Control Letter Agreements: The Committee, after consultation with its independent compensation consultant, approved severance and change of control letter agreements with each of the NEOs, which were entered into in February 2022 (the “Letter Agreements”). The Letter Agreements reflect peer compensation practices to retain talented senior leaders, reduce the risk of legal disputes tied to NEO separations and also awardedprovide the following grantscompany with additional non-competition and non-solicitation protections in the event of time-based RSUsthe departure of an NEO. The agreements provide each of the NEOs with specified severance benefits if they are terminated by the company without cause or resign for good reason, with enhanced benefits in January 2021: 22,747a change in control. Any severance payment is conditioned upon obtaining a general release of claims from the NEO. The Letter Agreements also provide for a one year non-competition period upon termination, applicable to Mr. Singelyn; 28,434 to Mr. Corrigan; 22,448 to Mr. Lau; 22,448 to Mr. Smithour NEOs employed outside of California, and 13,968 to Ms. Vogt-Lowell.
Share ownership guidelines: Effective January 2021,a one year non-solicitation period upon termination. In the Committee strengthenedevent of a termination by the company without cause or a resignation for good reason absent a change in control, each NEO will receive a lump sum severance payment of 100% of his or her annual base salary and expanded its share ownership guidelines. The ownership requirementtarget bonus (200% for the Chief Executive Officer was increased from three timesOfficer) and the cost of COBRA health coverage for up to 12 months (up to 24 months for the Chief Executive Officer) until he or she is eligible for the health coverage of a subsequent employer. In the event of a termination by the company or a resignation for good reason within two years following a change in control, each NEO will receive a lump sum severance payment of 200% of his or her annual base salary and target bonus (300% for the Chief Executive Officer) and the cost of COBRA health coverage for up to six times annual base salary.24 months (up to 36 months for the Chief Executive Officer) until he or she is eligible for the health coverage of a subsequent employer. The guidelines were expanded to cover trustees (five times the annual retainer)Letter Agreements are not employment agreements and other executive officers (three times annual base salary). See “Executive Officer Ownershipdo not provide a guarantee of Company Shares—Share Ownership Policy” above.employment.
Revisions to peer group: Upon the recommendation of Semler Brossy, the Committee revised the peer group the Committee considers when making compensation decisions to add 11 similarly sized REITs and remove three companies. The table set forth in the “Benchmarking Peer Group” section below identifies the changes.
Role of Management and Board in Determining the Compensation of Executive Officers
Mr. Singelyn attends most meetings of the Committee. He does not vote on items before the Committee and is not present during the Committee’s discussions and determination concerning his compensation. The Committee
solicits his views on the performance of the executive officers reporting to him and consider his
recommendations for their compensation. For 2021,2022, the Committee set base salaries, bonus and equity compensation for our NEOs, other than Mr. Singelyn, after considering the views of other Board members and Mr. Singelyn’s recommendations.
Role of Compensation Consultant
In August 2020, the Committee retained Semler Brossy to serveserves as its newthe Committee’s independent, third-party compensation consultant. The Committee considered Semler Brossy’s advice on a range of compensation matters, including its consideration of possible COVID-19 related adjustmentspotential enhancements to the 20202022 compensation program, and benchmarking analysis of peer compensation practices and its consideration of enhancements torecommendations for the 20212023 compensation program, in each case as discussed in more detail throughout this CD&A.
Semler Brossy reports directly to the Committee and does not provide services to the company’s management that are not under the Committee’s purview. Since its engagement a representative of Semler Brossy has attended meetings of the Committee and will continue to do so upon request. Prior to retaining Semler Brossy, theThe Committee consideredannually considers all factors relevant to Semler Brossy’s independence, as required by the Committee’s charter. Based on this review, the Committee determined that Semler Brossy is independent and free of conflicts of interest.
Equity grants to all of our executive officers, including the NEOs, must be approved by the Committee, which consists entirely of independent trustees. Grants occur only at meetings or upon written actions of the Board or the Committee and are made effective as of the date of the meeting or written action or a future date if
appropriate, such as in the case of a new hire. The Committee has delegated limited authority to Mr. Singelyn to approve equity awards to employees who are not executive officers.
Equity awards are not timed in coordination with the release of material non-public information. Awards are also subject to the terms of the 2012 Incentive Plan. All awards of stock options and RSUs granted to date to employees under the 2012 Incentive Plan vest over several years.
In general, the Committee considers equity awards for executive officers in connection with their annual performance review. In determining equity awards, our Committee considers, among other factors, input from other Board members, the company’s overall financial performance, operational achievements, including acquisitions, and the recommendations of our Chief Executive Officer for the named executive officers reporting to him.
The Committee monitors the effectiveness of our executive compensation programs at least annually. For the compensation programs to be effective, the Committee believes that the compensation practices of other public real estate companies with which we compete for talent is one tool in assessing and determining pay for our executive officers. Semler Brossy assists the Committee with these analyses. The Committee uses benchmarking for informational purposes only. The median (50th percentile) serves as a reference point and indicator of competitive market trends and the Committee uses it as the starting point when setting our executive compensation, but the Committee also considers a number of other factors, including skills, experience, performance and future potential of each executive.
48 | AMH |
The company’s peer group for 2022 compensation decisions is set forth in the following table. The peer group was based on similarities in industry sector, size (capitalization and assets) and underlying business fundamentals. As noted above, in the second half of 2020 the Committee, based on the recommendation of Semler Brossy, revised the companies in theThe peer group to better reflect similarly-sized REITs. The new additions and deletions are indicated below.was unchanged from the prior year.
Name | Property Focus | |||
American Campus Communities, Inc. | Student Housing & Student Apartments | |||
Brixmor Property Group, Inc | Open-air shopping centers | |||
Camden Property Trust | Multi-family | |||
Douglas Emmett, Inc. | Class-A office Buildings and Apartment | |||
Duke Realty | Industrial Properties | |||
Essex Property Trust, Inc. | Multi-family | |||
Extra Space Storage, Inc. | Self-Storage Properties | |||
Federal Realty Investment Trust | Shopping Centers | |||
Host Hotels & Resorts, Inc. | Hotels | |||
Hudson Pacific Properties, Inc. | Creative Office and Studio Properties | |||
Invitation Homes | Single-family rental | |||
Kilroy Realty Corporation | Premier Office Submarkets | |||
Kimco Realty Corporation | Open-air shopping centers | |||
MGM Growth Properties LLC | Large-Scale Destination Entertainment and Leisure Resorts | |||
Mid-America Apartment Communities, Inc. | Multi-family | |||
Park Hotels & Resorts, Inc. | Hotel Properties | |||
Regency Centers Corporation | Open-air shopping centers | |||
Sun Communities, Inc. | Manufactured Home and RV Communities | |||
UDR, Inc. | Multi-family | |||
* Indicates newly added similarly-sized REIT.
Note: Apartment Investment and Management Company, Avalon Bay Communities, Inc. and Equity Residential were removed from the peer group.
Equity Grant Practices
Equity grants to all of our executive officers, including the NEOs, must be approved by the Committee, which consists entirely of independent trustees. Grants occur only at meetings or upon written actions of the Board or the Committee and are made effective as of the date of the meeting or written action or a future date if appropriate, such as in the case of a new hire. The Committee has delegated limited authority to Mr. Singelyn to approve equity awards to employees who are not executive officers.
Equity awards are not timed in coordination with the release of material non-public information. Awards are also subject
to the terms of the 2021 Equity Incentive Plan. All awards of RSUs granted to date to employees under the 2021 Equity Incentive Plan vest over several years.
In general, the Committee considers equity awards for executive officers in connection with their annual performance review. In determining equity awards, our Committee considers, among other factors, input from other Board members and the independent compensation consultant, the company’s overall
2023 Proxy Statement | 49
financial performance, operational achievements, including acquisitions and the recommendations of our Chief Executive Officer for the NEOs reporting to him.
Term of Employment
Each of our NEOs serves at the pleasure of our Board. We have not entered into employment agreements with any of our NEOs.
Retirement Savings Opportunities
All full-time employees, including our NEOs, are able to participate in a 401(k) Retirement Savings Plan or 401(k)
plan,(the “401(k) plan”), after a prescribed period of employment. We provide this plan to help our employees save for retirement in a tax efficient manner. Under the 401(k) plan, participating employees are eligible to defer a portion of their salary beginning the January 1 or July 1 that first follows the completion of six months of employment, and we, at our discretion, may make a matching contribution and/or a profit sharing contribution commencing six months after they are eligible to begin contributing to the 401(k) plan.
Health and Welfare Benefits
We provide to all full-time employees, including our named executive officers,NEOs, a competitive benefits package, which includes health and welfare benefits, such as medical, dental, short- and long-term disability insurance and life insurance benefits.
Pursuant to the company’s “Executive Officer Performance-Based Compensation Recovery Policy,” the Committee will recover from any current or former executive officer, regardless of fault, that portion of equity and cash performance-based compensation based on financial information required to be reported under the securities laws that would not have been paid in the three completed fiscal years preceding the year in which an accounting restatement is required to be filed to correct a material error as a result of misconduct.
Tax and Accounting Considerations
Section 162(m) of the Code, as amended by the tax reform legislation known as the Tax Cuts and Jobs Act on December 22, 2017 or the Tax(the “Tax Cuts and Jobs Act,Act”) imposes a $1,000,000 limit on the annual deduction that may be claimed for compensation paid to each of the chief executive officer, the chief financial officer and certain other executive officers of the company (collectively, the “covered employees”). Certain compensation awarded prior to enactment of the Tax Cuts and Jobs Act may be excluded from the deduction limit under certain transition relief. The
Internal Revenue Service has issued proposed regulation under Section 162(m) of the Code that would cause Section 162(m) to apply to us and other REITs that utilize an UPREIT structure, which have previously taken the position that Section 162(m) does not apply. Pursuant to the final regulations, the annual deduction limit under Section 162(m) will applyapplied to us with respect to compensation paid to our covered employees by our operating partnership after December 18, 2020, provided that certain compensation paid after that date may be
excluded from the deduction limit if it is paid pursuant to a written binding contract that is in effect on December 20, 2019 and that is not materially modified. As a result of the final regulations, the company is currently evaluating arrangements under which covered employees are compensated to determine the impact of these final regulations on our compensation arrangements and our resulting REIT taxable income (and required distributions to shareholders).
While the Committee considers the tax and accounting impact of various forms of incentive compensation and compensation elements on the company’s financial statements, tax and accounting treatment is generally not the basis underlying the decision to award a particular form of compensation if the Committee deems the award the most appropriate incentive to achieve the company’s compensation goals.
Human Capital and Compensation Committee Report
The Human Capital and Compensation Committee of the Board of Trustees of American Homes 4 RentAMH has reviewed and discussed with management the foregoing Compensation Discussion and Analysis. Based on this review and discussion, the Human Capital and Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement and in the Annual Report on Form 10-K of American Homes 4 RentAMH for the fiscal year ended December 31, 2020.2022. This report is provided by the following independent trustees who comprise the Human Capital and Compensation Committee:
HUMAN CAPITAL AND COMPENSATION COMMITTEE
Matthew J. Hart, Chair
Douglas N. Benham
Michelle C. Kerrick
Winifred M. Webb
Matthew R. Zaist
50 | AMH |
The following table provides compensation information for our NEOs, including our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers who were employed on December 31, 2020 (collectively, the “NEOs”).2022.
Name and Principal Position | Year | Salary ($) | Bonus ($) (1) | Option Awards ($) (2) | Stock Awards ($) (3) | Non-Equity Incentive Plan Compensation ($) (1) | All Other Compensation ($) (4) | Total ($) | Year | Salary ($) | Bonus ($) | Option Awards ($) | Stock Awards ($) (1) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) (2) | Total ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David P. Singelyn Chief Executive Officer |
| 2020 |
| 570,000 |
| – |
| – |
| 1,650,000 |
| 1,097,250 |
| 24,400 |
| 3,341,650 |
| 2022 |
|
| 800,000 |
|
| – |
|
| – |
|
| 4,303,200 |
|
| 1,367,200 |
|
| 12,200 |
|
| 6,482,600 |
| ||||||||||||||||||||||||||||||||
| 2019 |
| 550,000 |
| – |
| – |
| – |
| 903,375 |
| 23,700 |
| 1,477,075 |
| 2021 |
|
| 700,000 |
|
| – |
|
| – |
|
| 1,872,600 |
|
| 1,994,860 |
|
| 24,600 |
|
| 4,592,060 |
| |||||||||||||||||||||||||||||||||
| 2018 |
| 450,000 |
| – |
| – |
| – |
| – |
| 23,000 |
| 473,000 |
| 2020 |
|
| 570,000 |
|
| – |
|
| – |
|
| 1,650,000 |
|
| 1,097,250 |
|
| 24,400 |
|
| 3,341,650 |
| |||||||||||||||||||||||||||||||||
Jack Corrigan Chief Investment Officer |
| 2020 |
| 570,000 |
| – |
| – |
| 1,312,500 |
| 689,345 |
| 17,900 |
| 2,589,745 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 |
| 525,000 |
| – |
| – |
| – |
| 676,594 |
| 17,450 |
| 1,219,044 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 |
| 425,000 |
| – |
| – |
| – |
| – |
| 17,000 |
| 442,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bryan Smith Chief Operating Officer |
| 2020 |
| 450,000 |
| – |
| – |
| 937,500 |
| 545,119 |
| 17,650 |
| 1,950,269 |
| 2022 |
|
| 600,000 |
|
| – |
|
| – |
|
| 1,936,400 |
|
| 796,050 |
|
| 12,200 |
|
| 3,344,650 |
| ||||||||||||||||||||||||||||||||
| 2019 |
| 375,000 |
| – |
| – |
| 684,000 |
| 411,750 |
| 17,450 |
| 1,488,200 |
| 2021 |
|
| 475,000 |
|
| – |
|
| – |
|
| 1,196,300 |
|
| 846,034 |
|
| 18,100 |
|
| 2,535,434 |
| |||||||||||||||||||||||||||||||||
| 2018 |
| 300,000 |
| 33,750 |
| 30,320 |
| 485,000 |
| 186,525 |
| 17,000 |
| 1,052,595 |
| 2020 |
|
| 450,000 |
|
| – |
|
| – |
|
| 937,500 |
|
| 545,119 |
|
| 17,650 |
|
| 1,950,269 |
| |||||||||||||||||||||||||||||||||
Christopher C. Lau Chief Financial Officer |
| 2020 |
| 450,000 |
| – |
| – |
| 875,000 |
| 545,625 |
| 11,400 |
| 1,882,025 |
| 2022 |
|
| 600,000 |
|
| – |
|
| – |
|
| 1,936,400 |
|
| 796,050 |
|
| 12,200 |
|
| 3,344,650 |
| ||||||||||||||||||||||||||||||||
| 2019 |
| 350,000 |
| – |
| – |
| 684,000 |
| 376,600 |
| 11,200 |
| 1,421,800 |
| 2021 |
|
| 475,000 |
|
| – |
|
| – |
|
| 1,196,300 |
|
| 846,034 |
|
| 11,600 |
|
| 2,528,934 |
| |||||||||||||||||||||||||||||||||
| 2018 |
| 300,000 |
| 33,750 |
| 30,320 |
| 485,000 |
| 186,525 |
| 11,000 |
| 1,046,595 |
| 2020 |
|
| 450,000 |
|
| – |
|
| – |
|
| 875,000 |
|
| 545,625 |
|
| 11,400 |
|
| 1,882,025 |
| |||||||||||||||||||||||||||||||||
Sara H. Vogt-Lowell Chief Legal Officer |
| 2020 |
| 350,000 |
| – |
| – |
| 570,000 |
| 424,375 |
| 11,400 |
| 1,355,775 |
| 2022 |
|
| 475,000 |
|
| – |
|
| – |
|
| 1,022,000 |
|
| 516,266 |
|
| 12,200 |
|
| 2,025,466 |
| ||||||||||||||||||||||||||||||||
| 2019 |
| 285,000 |
| – |
| – |
| 547,200 |
| 229,996 |
| 11,200 |
| 1,073,396 |
| 2021 |
|
| 425,000 |
|
| – |
|
| – |
|
| 744,400 |
|
| 756,978 |
|
| 11,600 |
|
| 1,937,978 |
| |||||||||||||||||||||||||||||||||
| 2018 |
| 260,000 |
| 29,250 |
| 30,320 |
| 388,000 |
| 161,655 |
| 11,000 |
| 880,225 |
| 2020 |
|
| 350,000 |
|
| – |
|
| – |
|
| 570,000 |
|
| 424,375 |
|
| 11,400 |
|
| 1,355,775 |
| |||||||||||||||||||||||||||||||||
Stephanie G. Heim Chief Governance Officer (Former) |
| 2020 |
| 195,788 |
| – |
| – |
| 550,000 |
| – |
| 754,950 |
| 1,500,738 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 |
| 275,000 |
| – |
| – |
| 547,200 |
| 221,926 |
| 11,200 |
| 1,055,326 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2018 |
| 260,000 |
| 29,250 |
| 30,320 |
| 388,000 |
| 161,655 |
| 11,000 |
| 880,225 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jack Corrigan (3) Retired Chief Investment Officer |
| 2022 |
|
| 271,615 |
|
| – |
|
| – |
|
| 2,474,300 |
|
| – |
|
| 400,585 |
|
| 3,146,500 |
| ||||||||||||||||||||||||||||||||||||||||||||||||
| 2021 |
|
| 600,000 |
|
| – |
|
| – |
|
| 1,515,300 |
|
| 1,068,675 |
|
| 18,100 |
|
| 3,202,075 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
| 2020 |
|
| 570,000 |
|
| – |
|
| – |
|
| 1,312,500 |
|
| 689,345 |
|
| 17,900 |
|
| 2,589,745 |
| |||||||||||||||||||||||||||||||||||||||||||||||||
(1) The discretionary portion of cash incentive compensation is included in the “Bonus” columnRSU awards and amounts earned as a result of achievement of pre-established performance goalsPSU awards are included in the “Non-Equity Incentive Plan Compensation” column.
(2) The amounts in the “Option Awards” column reflectvalued at the grant date fair value of share options of $3.032 per share for 2018 awards. For a more detailed discussion of the assumptions usedcomputed in valuing the awards, refer to Note 9 to the Consolidatedaccordance with Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.
(3)Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. RSU awards are valued atbased on the closing share price on the NYSE of $27.69, $22.80$38.99, $30.07 and $19.40$27.69 per share for Class A common shares on the date of grant for 2020, 20192022, 2021 and 20182020 grants, respectively. The payout of the PSU awards will be between 0% and 200% of target based on the achievement of both Core FFO growth goals and TSR relative to a group of peer companies. The portion of PSU awards linked to Core FFO growth goals (50%) was valued at $38.99 and $30.07 per PSU award based on the closing share price on the NYSE on the grant date and assuming target level of performance for 2022 and 2021 grants, respectively. The portion of PSU awards linked to relative TSR (50%) was valued at $48.84 and $39.60 per PSU award based on a multifactor Monte Carlo model for the performance period of January 1, 2022 to December 31, 2024 and January 1, 2021 to December 31, 2023 using a valuation date share price of $38.99 and $30.07 for 2022 and 2021 grants, respectively. Volatility and risk-free rate assumptions used in the multifactor Monte Carlo model are based on term structure and are disclosed in our Annual Report on Form 10-K. The following represents the aggregate grant date fair value for RSU awards and PSU awards granted in 2022 as well as the value of PSU awards at maximum vesting on the grant date.
(4)
| 2022 RSU Awards ($) | 2022 PSU Awards ($) | Total of RSUs and PSUs ($) | 2022 PSU Awards Maximum ($) | ||||||||||||
David P. Singelyn | 1,600,000 | 2,703,200 | 4,303,200 | 4,800,000 | ||||||||||||
Bryan Smith | 720,000 | 1,216,400 | 1,936,400 | 2,160,000 | ||||||||||||
Christopher C. Lau | 720,000 | 1,216,400 | 1,936,400 | 2,160,000 | ||||||||||||
Sara H. Vogt-Lowell | 380,000 | 642,000 | 1,022,000 | 1,140,000 | ||||||||||||
Jack Corrigan | 920,000 | 1,554,300 | 2,474,300 | 2,760,000 | ||||||||||||
(2) All Other Compensation consists of consulting fees of $388,385 to Mr. Corrigan for 2022, car allowance payments of $13,000 $12,500in 2021 and $12,000$13,000 in 2020 for Mr. Singelyn, $6,500 $6,250in 2021 and $6,000$6,500 in 2020 for Mr. Corrigan and $6,500 in 2021 and $6,250 $6,250 and $6,000in 2020 for Mr. Smith, for 2020, 2019 and 2018, respectively, and 401(k) plan contributions by the company of $11,400$12,200 to each named executive officer for 2020, $11,2002022, $11,600 for 20192021 and $11,000$11,400 for 2018. All Other Compensation2020.
(3) Mr. Corrigan retired in May 2022 and did not receive a performance-based incentive bonus for Ms. Heim includes $743,550 of a payment made to her pursuant to a settlement and release agreement that is attributable to severance.2022.
2023 Proxy Statement | 51
The following table sets forth certain information relating to grants of plan based awards to the named executive officersNEOs during the fiscal year ended December 31, 2020.2022.
|
|
Estimated Future Payouts Under | All Other Stock Awards: Number of Shares of Stock or Units (#) |
Grant Date Fair |
Estimated Future Payouts Under |
Estimated Future Payouts Under | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Grant Date | Threshold ($) (1) | Target ($) (1) | Maximum ($) (1) |
Grant
|
Threshold
|
Target ($) (1)
|
Maximum
|
|
Threshold
|
Target
|
Maximum
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David P. Singelyn |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 59,589 |
| 1,650,000 | 2/1/2022 | – | – | – |
| – | – | – | 41,036 | 1,600,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 2/1/2022 | – | – | – |
| 1,200,000 | 2,400,000 | 4,800,000 | 61,555 | 2,703,200 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 1,140,000 |
| 1,567,500 |
| – |
| – | – | – | 1,600,000 | 2,720,000 |
| – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Jack Corrigan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 47,400 |
| 1,312,500 | 2/1/2022 | – | – | – |
| – | – | – | 23,596 | 920,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 2/1/2022 | – | – | – |
| 690,000 | 1,380,000 | 2,760,000 | 35,394 | 1,554,300 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 712,500 |
| 944,063 |
| – |
| – | – | – | 990,000 | 1,683,000 |
| – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Bryan Smith |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 33,857 |
| 937,500 | 2/1/2022 | – | – | – |
| – | – | – | 18,466 | 720,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 2/1/2022 | – | – | – |
| 540,000 | 1,080,000 | 2,160,000 | 27,700 | 1,216,400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 562,500 |
| 731,250 |
| – |
| – | – | – | 900,000 | 1,530,000 |
| – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Christopher C. Lau |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 31,600 |
| 875,000 | 2/1/2022 | – | – | – |
| – | – | – | 18,466 | 720,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 2/1/2022 | – | – | – |
| 540,000 | 1,080,000 | 2,160,000 | 27,700 | 1,216,400 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 562,500 |
| 731,250 |
| – |
| – | – | – | 900,000 | 1,530,000 |
| – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Sara H. Vogt-Lowell |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 20,586 |
| 570,000 | 2/1/2022 | – | – | – |
| – | – | – | 9,746 | 380,000 | ||||||||||||||||||||||||||||||||||||||||||||||||
PSU Award | 2/1/2022 | – | – | – |
| 285,000 | 570,000 | 1,140,000 | 14,620 | 642,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 437,500 |
| 568,750 |
| – |
| – | – | – | 593,750 | 1,009,375 |
| – | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie G. Heim |
|
|
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
RSU Award |
| 2/4/2020 |
| – |
| – |
| – |
| 19,863 |
| 550,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| – |
| – |
| 387,500 |
| 503,750 |
| – |
| – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) The amounts shown in these columns represent the range of possible annual cash incentive payouts based upon achievement of performance targets.
(2) Amounts reflect the fair value of RSUs and PSUs computed as of the grant date. TheFor RSUs, the fair value is computed by multiplying the number of RSUs awarded by the fair market value of the company’s Class A common shares on the grant date. For PSUs, the fair value of the portion of awards linked to Core FFO growth goals is computed by multiplying the number of these PSU awards by the fair market value of the company’s Class A common shares on the grant date while the fair value of the portion of awards linked to TSR relative to a group of peer companies is computed by multiplying the number of these PSU awards by the grant date fair value of $48.84 per share based on a multifactor Monte Carlo model.
52 | AMH |
Outstanding Equity Awards at Fiscal Year End
The following table sets forth information for each named executive officerNEO with respect to the outstanding unvested equity awards as of the fiscal year ended December 31, 2020.2022.
| Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Number of Securities Underlying Unexercised Options Exercisable (#) (1) | Number of Securities Underlying Unexercised Options Un-exercisable (#) | Option Exercise Price ($) | Option Expiration Dates | Number of Shares or Units of Stock that Have Not Vested (#) (2) | Market Value of Shares or Units of Stock That Have Not Vested ($) (3) | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) (1) | Number of Securities Underlying Unexercised Options Un-Exercisable (#) (1) | Option ($) | Option Expiration Dates | Number of Shares or Units of Stock that Have Not Vested (#) (2) | Market Value of Shares or Units of Stock that Have Not Vested ($) (3) | Equity Incentive Plan Awards: Number of Unearned Units That Have Not Vested (#) (4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Units That Have Not Vested ($) (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David P. Singelyn |
| 25,000 |
| – | $ | 15.00 |
| 11/20/2022 |
|
| 2/4/2020 | – | – | – | – | 19,863 | 598,671 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| 59,589 | $ | 1,787,670 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/28/2021 | – | – | – | – | 15,164 | 457,043 | 51,182 | 1,542,625 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/1/2022 | – | – | – | – | 41,036 | 1,236,825 | 123,110 | 3,710,535 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jack Corrigan |
| – |
| – |
| – |
| – |
| 47,400 | $ | 1,422,000 | 2/4/2020 | – | – | – | – | 15,800 | 476,212 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/28/2021 | – | – | – | – | 18,956 | 571,334 | 28,434 | 857,001 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/1/2022 | – | – | – | – | 23,596 | 711,183 | 70,788 | 2,133,550 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bryan Smith |
| 100,000 |
| – | $ | 16.03 |
| 11/7/2023 |
|
| 11/7/2013 | 75,000 | – | 16.03 | 11/7/2023 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 50,000 |
| – | $ | 16.62 |
| 2/6/2024 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 50,000 |
| – | $ | 16.48 |
| 2/26/2025 |
|
| 2/6/2014 | 50,000 | – | 16.62 | 2/6/2024 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 40,000 |
| – | $ | 14.00 |
| 2/25/2026 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 15,000 |
| 5,000 | $ | 23.38 |
| 2/23/2027 |
|
| 2/26/2015 | 50,000 | – | 16.48 | 2/26/2025 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 5,000 |
| 5,000 | $ | 19.40 |
| 2/22/2028 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| 73,857 | $ | 2,215,710 | 2/25/2016 | 40,000 | – | 14.00 | 2/25/2026 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher C. Lau |
| – |
| 5,000 | $ | 23.38 |
| 2/23/2027 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| – |
| 5,000 | $ | 19.40 |
| 2/22/2028 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
|
| 70,350 | $ | 2,110,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sara H. Vogt-Lowell |
| 15,000 |
| – | $ | 14.00 |
| 2/25/2026 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 15,000 |
| 5,000 | $ | 23.38 |
| 2/23/2027 |
|
| 2/23/2017 | 20,000 | – | 23.38 | 2/23/2027 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 2,500 |
| 5,000 | $ | 19.40 |
| 2/22/2028 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
| 51,086 | $ | 1,532,580 | 2/22/2018 | 10,000 | – | 19.40 | 2/22/2028 | – | – | – | – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stephanie G. Heim |
| – |
| – |
| – |
| – |
| – |
| – | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/21/2019 | – | – | – | – | 7,500 | 226,050 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/4/2020 | – | – | – | – | 11,285 | 340,130 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/28/2021 | – | – | – | – | 14,965 | 451,045 | 22,448 | 676,583 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/1/2022 | – | – | – | – | 18,466 | 556,565 | 55,400 | 1,669,756 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Christopher C. | 2/22/2018 | 2,500 | – | 19.40 | 2/22/2028 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lau | 2/21/2019 | – | – | – | – | 7,500 | 226,050 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/4/2020 | – | – | – | – | 10,533 | 317,465 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/28/2021 | – | – | – | – | 14,965 | 451,045 | 22,448 | 676,583 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/1/2022 | – | – | – | – | 18,466 | 556,565 | 55,400 | 1,669,756 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sara H. Vogt- | 2/25/2016 | 15,000 | – | 14.00 | 2/25/2026 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lowell | 2/23/2017 | 20,000 | – | 23.38 | 2/23/2027 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/22/2018 | 7,500 | – | 19.40 | 2/22/2028 | – | – | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/21/2019 | – | – | – | – | 6,000 | 180,840 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/4/2020 | – | – | – | – | 6,862 | 206,821 | – | – | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1/28/2021 | – | – | – | – | 9,312 | 280,664 | 13,968 | 420,996 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/1/2022 | – | – | – | – | 9,746 | 293,744 | 29,240 | 881,294 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) All option awards vestvested ratably over a period of four years from the date of grant (November 20, 2012 for grants that expire on November 20, 2022; November 7, 2013 for grants that expire on November 7, 2023; February 6, 2014 for grants that expire on February 6, 2024; February 26, 2015 for grants that expire on February 26, 2025; February 25, 2016 for grants that expire on February 25, 2026; February 23, 2017 for grants that expire on February 23, 2027 and February 22, 2018 for grants that expire on February 22, 2028).
(2) RSUs granted in 2022, 2021 and 2020 vest in three annual installments beginning one year from the date of grant and RSUs granted prior to 2020 vest in four annual installments beginning one year from the date of grant.
(3) The value shown in this column assumes a price of $30.00$30.14 per share, the closing price for the company’s Class A common shares on the NYSE on December 31, 2020.2022.
(4) Represents outstanding PSUs at the probable outcome as of December 31, 2022. The PSUs will vest upon achievement of the performance targets at the conclusion of the three-year performance period.
2023 Proxy Statement | 53
Option Exercises and Stock Vested in 20202022
The following table provides information about options exercised by and RSU awards vested for the named executive officersNEOs during the fiscal year ended December 31, 2020.2022.
Name | Option Awards | Stock Awards | ||||||||||||||||||||||||||||||||||
| Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on | Value Realized on Vesting ($) (1) | ||||||||||||||||||||||||||||
David P. Singelyn | – | – | – | – | – | – | 27,446 | 1,072,190 | ||||||||||||||||||||||||||||
Jack Corrigan | 25,000 | $ | 372,000 | – | – | – | – | 25,278 | 984,927 | |||||||||||||||||||||||||||
Bryan Smith | 100,000 | $ | 1,349,680 | 18,750 | $ | 539,438 | – | – | 32,519 | 1,249,903 | ||||||||||||||||||||||||||
Christopher C. Lau | 30,000 | $ | 276,633 | 18,500 | $ | 531,105 | – | – | 31,766 | 1,220,272 | ||||||||||||||||||||||||||
Sara H. Vogt-Lowell | – | – | 13,500 | $ | 388,395 | – | – | 22,518 | 863,678 | |||||||||||||||||||||||||||
Stephanie G. Heim | 13,750 | $ | 138,975 | 14,500 | $ | 416,025 | ||||||||||||||||||||||||||||||
(1) Value realized was calculated by multiplying the number of shares vested by the closing price of our Class A common shares on the NYSE on the vesting date of January 28, 2022, February 4, 2022, February 21, 2020,2022, and February 22, 2020 and February 23, 20202022 for Messrs. Lau and Smith Ms. Heim and Ms. Vogt-Lowell and January 28, 2022 and February 25, 20204, 2022 for Mr. LauMessrs. Singelyn and Ms. Heim.Corrigan.
Pension/Non-Qualified Deferred Compensation Plans
We do not maintain a pension plan or deferred compensation plan for any of our employees, including the NEOs.
Potential Payments Upon Termination or Change ofin Control
We do not have a formal severance program for payments on termination of employment through voluntary or involuntary termination, other than as specifically set forthIn February 2022, our NEOs each entered into Letter Agreements with the company which provide that, in the company’s 2012 Incentive Plan, related award agreements,event of a termination by the 401(k) plancompany without cause or as required by law.a resignation for good reason, each NEO will receive a lump sum severance payment of 100% of his or her annual base salary and target bonus (200% for the Chief Executive Officer) and the cost of COBRA health coverage for up to 12 months (up to 24 months for the Chief Executive Officer) until he or she is eligible for the health coverage of a subsequent employer.
These include:Additionally, the following indicate our general practice:
| • | vested stock options following a voluntary termination of employment (other than for death or disability) must be exercised within three months following the individual’s last date of employment or are otherwise forfeited; |
| • | unvested time-based RSUs and PSUs are forfeited (except in the case of death or disability or a qualifying retirement); |
| • | payment of any amounts contributed by the participant and the company under the 401(k) plan; and |
| • | accrued and unused vacation pay paid in a lump sum. |
Payments Upon Death or Disability
In the event of the death or permanent and total disability of a named executive officeran NEO while employed by the company, the named executive officerNEO will receive the 401(k) plan contributions noted above and accrued unused vacation pay, in addition to the following:
| • | all unvested outstanding stock options held by the NEO accelerate and vest as of the date of death or disability, as defined in the plan, and may be exercised during the one year period following the date of death, but prior to expiration of the option; |
| • | all unvested time-based RSUs and restricted share grants held by the NEO accelerate and vest as of the date of death or disability, as defined in the plan; |
| • | for all unvested PSUs, (i) if the termination date is prior to the end of the performance period, such awards will vest based on target performance (pro-rated for the number of days the NEO worked for the company during such period) and (ii) if the termination date is after the end of the performance period, such awards will vest based on actual performance; and |
| • | the NEO will receive payments under the company’s life insurance program or disability plan, as applicable, similar to all other employees of the company. |
54 | AMH
NEOs participate in our equity awards retirement policy on the same terms as other employees. The policy is intended to recognize long-tenured employees who have contributed to the growth and success of the company. Specifically, in the event of an NEO’s qualifying retirement, all unvested outstanding RSUs, PSUs and stock options held by the NEO that were granted will continue
|
to vest on the schedule set forth on the award, and any vested option may be exercised during the one year period following the vesting, but prior to expiration of the option. A qualifying retirement is a voluntary termination other than for cause or as a result of death or disability where the NEO (i) is at least 55 years old and has provided service for at least five years, and the sum of the NEO’s age and total years of service is at least 65,70 (65 for Messrs. Singelyn and Corrigan), and (ii) the NEO executes a customary non-compete or non-solicit agreement, if requested by the Committee or the Chief Executive Officer.
Payments Upon a Change in Control
The company’s 20122021 Equity Incentive Plan provides that upon the occurrence of a “change in control” of the company in which provision is made in writing in connection with the “change ofin control” for continuation of the 20122021 Equity Incentive Plan or substitution of new options, restricted shares, RSUs and RSUs,PSUs, then the awards will continue without any accelerated vesting; provided, however, that if an award is assumed, continued or substituted upon the consummation of any “change in control” and the employment of the grantee with the company is terminated without cause within two years following the consummation of such “change in control,” such award will be fully vested and may be exercised in full, to the extent applicable, beginning on the date of such termination and for the one-year period immediately following such termination or for such longer period as the Committee will determine.
The company’s 20122021 Equity Incentive Plan provides that upon the occurrence of a “change in control” of the company in which the applicable equity award is not continued, assumed or substituted:
| • | all outstanding unvested time-based RSUs and restricted share grants will vest immediately; |
| • | all outstanding unvested stock options vest 15 days before consummation of such a change in control and are exercisable during such 15-day period, with such exercise conditioned upon and effective immediately before consummation of the change in control; and |
| • | for unvested PSUs, (i) if less than half of the performance period has lapsed, such awards will be treated as though target performance has been achieved immediately prior to the occurrence of the “change in control,” and (ii) if at least half the performance period has lapsed, such awards will vest based on actual performance determined as of a date reasonably close to the date the “change in control” as determined by the Human Capital and Compensation Committee in its sole discretion, or if actual performance is not determinable, such awards will be treated as though target performance has been achieved. |
A “change ofin control” is defined in the 20122021 Equity Incentive Plan to include:
| • | the dissolution or liquidation of the company or a merger in which the company does not survive; |
| • | the sale of substantially all of the company’s assets; |
| • | any transaction that results in any person or entity owning 50% or more of the combined voting power of all classes of our shares; or |
| • | any transaction the Board specifies as a change in control. |
2023 Proxy Statement | 55
The following table shows the estimated value of the acceleration of unvested equity awardspotential payments to our NEOs, other than Mr. Corrigan, pursuant to (i) a qualifying termination, related to death or disability,(ii) a change in control event (“CIC”) followed by a qualifying termination, (iii) a change in control event with no termination but in which equity awards are not continued, assumed or substituted, (iv) a change in control event followed byqualifying retirement (only Mr. Singelyn was eligible for a termination without cause,qualifying retirement) or (v) death or disability, each as described above, assuming the event occurred as of December 31, 20202022 and assumingthe acceleration of unvested equity awards assumes a closing market price of our Class A common shares on such date of $30.00.$30.14. Mr. Corrigan retired in May 2022 and the following table shows his anticipated payments as a result of his qualifying retirement.
Name | Value of Vesting of All Outstanding Unvested Options (1) | Value of Vesting of All Outstanding Unvested Awards (2) | Total | Compensation Element | Qualifying Termination, no CIC ($) | Qualifying Termination, CIC ($) | CIC Without Termination ($) | Qualifying Retirement ($) | Death or Disability ($) | ||||||||||||||||||||||||||||
David P. Singelyn | – | $ | 1,787,670 | $ | 1,787,670 | Cash Incentive (1) | 4,800,000 | 7,200,000 | – | – | – | ||||||||||||||||||||||||||
| Continuation of Health Benefits (2) | 14,700 | 22,000 | – | – | – | ||||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested RSU Awards (3) | – | 2,292,539 | 2,292,539 | 2,292,539 | 2,292,539 | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested PSU Awards (4) | – | 2,883,675 | 2,883,675 | 2,883,675 | 2,883,675 | |||||||||||||||||||||||||||||||
|
| TOTAL | 4,814,700 | 12,398,214 | 5,176,214 | 5,176,214 | 5,176,214 | |||||||||||||||||||||||||||||||
Jack Corrigan | – | $ | 1,422,000 | $ | 1,422,000 | Cash Incentive | – | – | – | – | – | ||||||||||||||||||||||||||
| Continuation of Health Benefits | – | – | – | – | – | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested RSU Awards (3) | – | – | – | 1,758,729 | – | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested PSU Awards (4) | – | – | – | 1,638,109 | – | |||||||||||||||||||||||||||||||
| TOTAL | – | – | – | 3,396,838 | – | ||||||||||||||||||||||||||||||||
Bryan Smith | $ | 86,100 | $ | 2,215,710 | $ | 2,301,810 | Cash Incentive (5) | 1,500,000 | 3,000,000 | – | – | – | |||||||||||||||||||||||||
| Continuation of Health Benefits (6) | 24,000 | 48,000 | – | – | – | ||||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested RSU Awards (3) | – | 1,573,790 | 1,573,790 | – | 1,573,790 | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested PSU Awards (4) | – | 1,285,923 | 1,285,923 | – | 1,285,923 | |||||||||||||||||||||||||||||||
|
| TOTAL | 1,524,000 | 5,907,713 | 2,859,713 | – | 2,859,713 | |||||||||||||||||||||||||||||||
Christopher C. Lau | $ | 86,100 | $ | 2,110,500 | $ | 2,196,600 | Cash Incentive (5) | 1,500,000 | 3,000,000 | – | – | – | |||||||||||||||||||||||||
| Continuation of Health Benefits (6) | 32,600 | 65,200 | – | – | – | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested RSU Awards (3) | – | 1,551,125 | 1,551,125 | – | 1,551,125 | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested PSU Awards (4) | – | 1,285,923 | 1,285,923 | – | 1,285,923 | |||||||||||||||||||||||||||||||
| TOTAL | 1,532,600 | 5,902,248 | 2,837,048 | – | 2,837,048 | ||||||||||||||||||||||||||||||||
Sara H. Vogt-Lowell | $ | 86,100 | $ | 1,532,580 | $ | 1,618,680 | Cash Incentive (7) | 1,068,750 | 2,137,500 | – | – | – | |||||||||||||||||||||||||
| Continuation of Health Benefits (6) | 24,000 | 48,000 | – | – | – | ||||||||||||||||||||||||||||||||
Stephanie G. Heim | – | – | – | ||||||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested RSU Awards (3) | – | 962,069 | 962,069 | – | 962,069 | |||||||||||||||||||||||||||||||
| Value of Vesting of All Outstanding Unvested PSU Awards (4) | – | 721,310 | 721,310 | – | 721,310 | |||||||||||||||||||||||||||||||
|
| TOTAL | 1,092,750 | 3,868,879 | 1,683,379 | – | 1,683,379 | |||||||||||||||||||||||||||||||
(1) Represents 200% of annual base salary and target bonus for 2022 ($4,800,000) for a qualifying termination with no change in control and 300% of annual base salary and target bonus for 2022 ($7,200,000) for a qualifying termination with a change in control.
(2) Represents the difference between the exercise priceprojected cost of options held by the executiveCOBRA health coverage for a maximum of 24 months for a qualifying termination with no change in control and the closing price36 months for a qualifying termination with a change in control as of the company’s Class A common shares on the NYSE on December 31, 2020 of $30.00.2022.
(2)(3) Represents the number of outstanding RSUs multiplied by the closing price of the company’s Class A common shares on December 31, 2020.2022, as applicable.
(4) Represents the number of outstanding PSUs at target multiplied by the closing price of the company’s Class A common shares on December 31, 2022, as applicable.
56 | AMH
(5) Represents 100% of annual base salary and target bonus for 2022 ($1,500,000) for a qualifying termination with no change in control and 200% of annual base salary and target bonus for 2022 ($3,000,000) for a qualifying termination with a change in control.
(6) Represents the projected cost of COBRA health coverage for a maximum of 12 months for a qualifying termination with no change in control and 24 months for a qualifying termination with a change in control as of December 31, 2022.
(7) Represents 100% of annual base salary and target bonus for 2022 ($1,068,750) for a qualifying termination with no change in control and 200% of annual base salary and target bonus for 2022 ($2,137,500) for a qualifying termination with a change in control.
In February 2022, the NEOs entered into Letter Agreements with the company which, in the event of a termination by the company or a resignation for good reason within two years of a change in control, provide for a lump sum severance payment of 200% of each NEOs annual base salary and target bonus (300% for the Chief Executive Officer) and the cost of COBRA health coverage for up to 24 months (up to 36 months for the Chief Executive Officer) until he or she is eligible for the health coverage of a subsequent employer.
CEO Pay Ratio
Presented below is the ratio of annual total compensation of our CEO, David P. Singelyn, to the annual total compensation of our median employee (excluding Mr. Singelyn). The ratio presented below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act.
We selected the median employee in 20202022 based on the 1,4471,794 full-time, part-time, temporary and seasonal workers employed by the company or any of its consolidated subsidiaries as of December 31, 2020.2022. In identifying our median employee, we calculated the annual total cash compensation/W-2 compensation of
each employee as of December 31, 2020.2022. Total cash compensation for these purposes included base salary, cash incentives and comparable cash elements of compensation in non-U.S. jurisdictions and was calculated using internal human resources/tax records, including Form W-2 information. We did not apply any cost-of-living adjustments as part of the calculation.
The 20202022 annual total compensation as determined under Item 402 of Regulation S-K for our CEO was $3,341,650.$6,482,600. The 20202022 annual total compensation as determined under Item 402 of Regulation S-K for our median employee was $58,485.$65,925. The ratio of our CEO’s annual total compensation to our median employee’s total compensation for fiscal year 20202022 is 57.198 to 1.
2023 Proxy Statement | 57
Year | Summary Compensation Table Total Pay for CEO (1)(2) ($) | CAP to CEO (3) ($) | Average Summary Compensation Table Total Pay for Other NEOs (1)(2) ($) | Average CAP to Other NEOs (3) ($) | Value of Initial Fixed $100 Investment Based on: | GAAP Net Income (5) ($) | Core FFO per Share ($) | |||||||||||||||||||||||||
TSR (4) ($) | Peer Group TSR (4) ($) | |||||||||||||||||||||||||||||||
2022 | 6,482,600 | 5,063,676 | 2,965,317 | 2,058,580 | 119 | 100 | 310,025 | 1.54 | ||||||||||||||||||||||||
2021 | 4,592,060 | 6,624,511 | 2,551,105 | 3,919,810 | 169 | 132 | 210,559 | 1.36 | ||||||||||||||||||||||||
2020 | 3,341,650 | 3,488,258 | 1,855,710 | 1,798,939 | 115 | 92 | 154,829 | 1.16 | ||||||||||||||||||||||||
Year | SCT Total Comp ($) | Minus SCT Equity Awards ($) | Plus Value of New Unvested Awards as of 12/31 ($) | Plus Annual Change in Value of Prior Year Awards that Remain Unvested ($) | Plus Change in Value of Prior Year Awards that Vest During Year ($) | Minus Value of Forfeited Prior Years Awards ($) | Plus Dividends on Unvested Awards/ Accrued Dividends ($) | Equals CAP ($) | ||||||||||||||||||||||||
2022 | 6,482,600 | (4,303,200 | ) | 4,264,939 | (1,310,698 | ) | (124,730 | ) | - | 54,765 | 5,063,676 | |||||||||||||||||||||
2021 | 4,592,060 | (1,872,600 | ) | 3,317,343 | 540,671 | 19,068 | - | 27,969 | 6,624,511 | |||||||||||||||||||||||
2020 | 3,341,650 | (1,650,000 | ) | 1,787,670 | - | - | - | 8,938 | 3,488,258 | |||||||||||||||||||||||
Year | SCT Total Comp ($) | Minus SCT Equity Awards ($) | Plus Value of New Unvested Awards as of 12/31 ($) | Plus Annual Change in Value of Prior Year Awards that Remain Unvested ($) | Plus Change in Value of Prior Year Awards that Vest During Year ($) | Minus Value of Forfeited Prior Years Awards ($) | Plus Dividends on Unvested Awards/ Accrued Dividends ($) | Equals CAP ($) | ||||||||||||||||||||||||
2022 | 2,965,317 | (1,842,275 | ) | 1,825,938 | (774,193 | ) | (151,118 | ) | - | 34,911 | 2,058,580 | |||||||||||||||||||||
2021 | 2,551,105 | (1,163,075 | ) | 1,943,314 | 528,580 | 33,276 | - | 26,610 | 3,919,810 | |||||||||||||||||||||||
2020 | 1,855,710 | (849,000 | ) | 800,659 | 100,544 | 50,360 | (169,672 | ) | 10,338 | 1,798,939 | ||||||||||||||||||||||
| ||
Significant Financial Performance Measures | ||
Core FFO Growth | ||
Relative TSR (compared to the benchmarking peer group and constituents in the FTSE NAREIT Residential Index) |
Pursuant to Section 14A(a)(1) of the Exchange Act, we are including in these proxy materials a separate resolution, subject to shareholder vote, to approve, in a non-binding advisory vote, the compensation of our named executive officersNEOs as described in this proxy statement. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officersNEOs and the philosophy, policies and practices described in this proxy statement. The advisory vote will be presented on an annual basis unless otherwise disclosed.
At the 20202022 Annual Meeting of Shareholders, more than 98.7%approximately 94.3% of the votes cast on this proposal (which excludes abstentions and broker non-votes) were voted in favor of the company’s executive compensation. The Human Capital and Compensation Committee considered the results of the favorable shareholder vote in making its 2020 compensation decisions for our named executive officers.NEOs.
You are encouraged to carefully review the Compensation Discussion and Analysis section as well as the information contained in the compensation tables and accompanying narrative discussion contained in this proxy statement. As described more fully in the Compensation Discussion and Analysis section, our compensation philosophy and
practices seek to pay for performance and align shareholder and executive interests.
Accordingly, we are asking our shareholders to indicate their support for the compensation of our named executive officersNEOs as disclosed in this proxy statement by voting “FOR” the following resolution:
“RESOLVED, that the shareholders of American Homes 4 RentAMH approve, on an advisory basis, the compensation paid to the company’s named executive officers, as disclosed in this proxy statement for the Annual Meeting pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables.”
The vote on the compensation of our named executiveNEOs is advisory and non-binding on the company. However, the Human Capital and Compensation Committee, which is responsible for designing and administering the company’s executive compensation programs, will consider the outcome of the vote when making future compensation decisions regarding our named executive officers. As discussed in Proposal 6 below, the Board is recommending that our shareholders continue to have the opportunity to vote to approve the compensation of our named executive officers every year.NEOs. We expect that we will conduct the next advisory vote on executive compensation at the 20222024 Annual Meeting of Shareholders.
Pursuant to Section 14A(a)(2) of the Exchange Act, we are including in these proxy materials a separate resolution, subject to shareholder vote, to recommend, in a non-binding advisory vote, whether a non-binding shareholder vote to approve the compensation paid to our named executive officers should occur every year, every two years or every three years. Shareholders will be able to specify one of four choices for this proposal on the proxy: one year, two years, three years or
abstain. Shareholders are not voting to approve or disapprove the Board’s recommendation. While the results of the vote are non-binding and advisory in nature, the Board intends to carefully consider the results of the vote.
The Board has considered the matter and determined to recommend that shareholders vote for holding the advisory vote on executive compensation annually.
|
Related Party Transactions
Related Party Transaction Approval Policy and Procedures
We have adopted a written policy for the review and approval of related party transactions requiring disclosure under Item 404(a) of Regulation S-K. This policy provides that either the Audit Committee or our full Board is responsible for reviewing and approving or disapproving all interested transactions, meaning any transaction, arrangement or relationship in which (1) the amount involved may be expected to exceed $120,000 in any fiscal year, (2) the company or one of our subsidiaries will be a participant and (3) a related person has a direct or indirect material interest. A related person is defined as an executive officer, trustee or nominee for election as trustee, or a greater than 5% beneficial owner of our common shares, or an immediate family member of the foregoing. The policy may deem certain interested transactions to be pre-approved. The Related Party Transaction Policy is available at www.amh.com under “Investor Relations”.
20202022 Related Party Transactions
Subsequent to his retirement in May 2022, Mr. Corrigan was engaged as a consultant by the company through December 2022 and received consulting fees during 2022 valued at $388,385. Mr. Corrigan’s brother-in-law, Tom Maloney, is an employee of the company and received compensation during 20202022 valued at approximately $219,832.
In November 2020, the company entered into a settlement and release agreement with Stephanie G. Heim, who until July 2020 had served as$260,708. Mr. Corrigan’s daughter, Kelly Corrigan, is an executive officeremployee of the company pursuant toand received compensation during 2022 valued at $122,210. Other than the transactions described in this section, which were each approved under the parties agreed to settleRelated Party Transaction Policy, we have not participated in any and all claims arising outother transactions with a related party since the beginning of Ms. Heim’s employment relationship with the company. The company paid approximately $2.9 million, net of insurance proceeds, of the $7.67 million settlement amount.2022.
the Annual Meeting
Delinquent Section 16(a) Reports
Our trustees, executive officers and persons who beneficially own more than 10% of our common stock must report their initial ownership of our equity securities and any subsequent changes in that ownership to the SEC. The SEC has established specific due dates for these reports, and we must disclose in this proxy statement any late filings during 2022. To our knowledge, based solely on our review of the copies of such reports filed electronically with the SEC for
2022 and the written responses to annual directors’ and officers’ questionnaires that no other reports were required, all of these reports were timely filed during and with respect to 2022, except for a late Form 4 related to the mandatory redemption of preferred shares owned by Mr. Goldberg and four late Form 4s related to tax withholding transactions in connection with the vesting of equity awards of Messrs. Singelyn, Lau and Smith and Ms. Vogt-Lowell.
64 | AMH
General Information About the Annual Meeting
Date, time and place of the Annual Meeting: The Annual Meeting will be held on Thursday,Tuesday, May 6, 20219, 2023 at 9:00 a.m., Pacific Time. Due to public health concerns regarding the COVID-19 pandemic, theThe Annual Meeting will be held in virtual-only format. You may attend the meeting virtually or by proxy. You will be able to attend and participate in the virtual Annual Meeting, vote your shares electronically and submit your questions during the meeting by visiting: www.virtualshareholdermeeting.com/AMH2021AMH2023
Purpose of this proxy solicitation: We are providing these proxy materials on behalf of the Board to ask for your vote and to solicit your proxies for use at our Annual Meeting or any adjournments or postponements thereof. We have delivered and made these materials available to you on the Internet because you were a shareholder as of March 9, 2021,13, 2023, the Record Date fixed by the Board, and are therefore entitled to receive Noticenotice of the Annual Meeting and to vote on matters presented at the meeting.
Availability of proxy statement and annual report: All shareholders receiving this proxy statement should have also received a paper copy or access to an electronic copy of the 20202022 Annual Report, which includes our Annual Report on Form 10-K for the year ended December 31, 2020. 2022. Additional copies are available at: www.americanhomes4rent.comwww.amh.com under “Investor Relations.” The company will furnish any shareholder with a paper copy of the 20202022 Annual Report on Form 10-K, excluding exhibits, without charge, upon a written request to: Investor Relations, American Homes 4 Rent, 23975 Park Sorrento, Suite 300, Calabasas, California 91302.AMH, 280 Pilot Road, Las Vegas, Nevada 89119. Copies of exhibits will be provided at a copying charge of $0.20 per page to reimburse us for a portion of the cost.
Who can vote: Only shareholders of record at the close of business on the record dateRecord Date of March 9, 202113, 2023 will be entitled to vote at the Annual Meeting, or at any adjournment or postponement of the Annual Meeting. On the record date,Record Date, approximately 316,216,157361,140,276 of the company’s Class A common shares and 635,075 Class B common shares were issued and outstanding. Holders of Class A common shares and Class B common shares vote together on the matters for the election of trustees,
ratification of the
appointment of the company’s independent registered public accounting firm and approval, on an advisory basis, of the compensation of our named executive officers.NEOs. If your shares are held in the name of a bank, broker, trustee or other nominee, you may vote your shares at the virtual
meeting only if you obtain a legal proxy from your brokerage firm, bank or other nominee.
Voting Rights: Each holder of Class A common shares is entitled to one vote per share. Our charter does not permit cumulative voting.
Each holder of Class B common shares is entitled to fifty votes per share. The company’s dual class structure was put in placeClass B shares were issued when the company was organized to provide voting rights to holders of non-voting units in the company’s operating partnership corresponding with their equity ownership.
All In connection with certain transactions where 48,119,891 operating partnership units were issued for the contribution of assets to the company, the Hughes Family received 635,075 Class B shares at a ratio of one Class B share for every 49 operating partnership units received and all Class B shares are currently held by an affiliate of the Hughes Family, HF Investments 2010, LLC. At the option of HF LLC, the operating partnership units may be converted into an equivalent number of Class A common shares. To the extent HF LLC converts the operating partnership units, the Class B common shares automatically convert into Class A common shares on a one-for-one basis, which supports alignment between the Hughes Family’s equity ownership and their voting rights.
As of the record dateRecord Date for the Annual Meeting, including their ownership of common shares and operating partnership units, the Hughes Family owns approximately 25.3%22.6% of the company on a fully diluted basis. Including their Class B shares, the Hughes Family holds approximately 22.0%19.5% of the eligible votes for the Annual Meeting, which is less than their ownership in the company.
How votes are counted: Provided that shareholders entitled to cast at least a majority of all the votes entitled to be cast at the Annual Meeting are present virtually or by proxy at the Annual Meeting, each matter may be approved as follows:
| • | Proposal 1 (Trustee Election) – For the election of trustees, the trustee nominees who receive an affirmative majority of the votes cast (i.e., the number of votes cast “for” a trustee nominee must exceed the number of votes cast “against” that nominee) at the Annual Meeting will be elected as trustees of the company. Common shares not voted (whether by |
2023 Proxy Statement | 65
abstention, broker non-vote or otherwise) will not affect the vote. Our charter does not permit cumulative voting in the election of our trustees. |
| • | Proposal 2 (EY Ratification) – The affirmative vote of a majority of the votes cast at the Annual Meeting by the holders of our common shares is required to approve Proposal 2. Common shares not voted (whether by abstention
Trustee nominees who do not receive a majority of the votes cast: If a nominee who is currently serving as a trustee is not re-elected, Maryland law provides that the trustee would continue to serve on the Board as a “holdover” trustee. Under our Corporate Governance Guidelines, each trustee nominee who does not receive the required majority vote for election must submit a resignation. The Nominating and Corporate Governance Committee would then make a recommendation to the Board about whether to accept or reject the resignation or take other action. The Board would act on the Nominating and Corporate Governance Committee’s recommendation and publicly disclose its decision and rationale within 90 days from the date the election results were certified. If a trustee’s resignation is accepted by the Board, the Board may fill the resulting vacancy or decrease the size of the Board as provided in our bylaws. How to vote: If you attend the Annual Meeting: Shares held in your name as the shareholder of record may be voted at the virtual Annual Meeting. Shares for which you are the beneficial owner but not the shareholder of record may be voted at the virtual Annual Meeting only if you obtain a legal proxy from the bank, broker, trustee or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. Attendance at the Annual Meeting is limited to shareholders (or their authorized representatives) as of March If you don’t attend the Annual Meeting: Whether you hold shares directly as the shareholder of record or through a bank, broker, trustee or other nominee as the beneficial owner, you may direct how your shares are voted without attending the Annual Meeting. There are three ways to vote by proxy:
How proxies will be voted: If you grant a proxy and do not revoke it before the applicable voting deadline, the persons designated as proxies will vote the common shares represented thereby, if any, in the manner specified. If you are a shareholder of record and grant a proxy but do not indicate how your shares should be voted on a matter, the common shares represented by your properly completed proxy will be voted (1) “FOR” the election of each of the Board’s If you hold shares through a broker or nominee and do not provide the broker or nominee with specific voting instructions, under the rules that govern brokers or nominees in such circumstances, your broker or nominee will have the discretion to vote such shares on routine matters, but not on non-routine matters. As a result:
66 | AMH
Broker non-votes will not be counted as votes cast with respect to any proposal and, as a result, will have no effect on the outcome of the vote of any proposal. Changing your vote: You may change your vote before the vote at the Annual Meeting in accordance with the following procedures. If you are the shareholder of record, you may change your vote (1) by mailing a new proxy card or voting instruction form bearing a later date (which automatically revokes the earlier proxy), (2) by submitting a later dated vote over the Internet or by telephone, (3) by providing a written notice of revocation to the Secretary at
Virtual attendance at the Annual Meeting alone will not cause your previously granted proxy to be revoked unless you specifically make that request. For shares you hold beneficially in the name of a bank, broker, trustee or other nominee, you may change your vote by submitting new voting instructions to your bank, broker, trustee or nominee in accordance with their instructions, or, if you have obtained a legal proxy from your bank, broker, trustee or other nominee giving you the right to vote your shares, by attending the meeting and voting virtually. Quorum to conduct business at the Annual Meeting: A quorum is required to hold the Annual Meeting. The presence at the Annual Meeting virtually or by proxy of shareholders entitled to cast a majority of all the votes entitled to be cast at the Annual Meeting is necessary to constitute a quorum for the transaction of business. Abstentions and broker non-votes will be counted as present and entitled to vote for purposes of determining whether a quorum exists. A broker non-vote occurs with respect to a proposal when a broker, trustee or other nominee has discretionary authority to vote on one or more proposals to be voted on at a meeting of shareholders but is not permitted to vote on other proposals without instructions from the beneficial owner and the beneficial owner fails to provide the nominee with such instructions. If the shareholders present or represented by proxy at the Annual Meeting represent less than a majority of all the votes entitled to be cast at the Annual Meeting, the Annual Meeting may be adjourned to a later date for the purpose of obtaining a quorum. If additional matters are presented at the meeting: Other than the will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting. If any of our nominees is not able to serve for any reason or for good cause will not serve as a candidate for trustee, the persons named as proxy holders will vote any shares represented by your proxy for such other candidate or candidates as may be nominated by the Board. The Contacting our transfer agent: Please contact our transfer agent at the phone number or address listed below, with questions concerning shares, dividend
checks, transfer of ownership or other matters pertaining to your share account: American Stock Transfer & Trust Company, Shareholder Services, 6201 15th Avenue, Brooklyn, NY 11219, phone number: (800) 937-5449 or (718) 921-8124. Costs of this proxy solicitation: We will pay the cost of soliciting proxies. In addition to solicitation by mail, certain trustees, officers and regular employees of the company and its affiliates may solicit the return of proxies by telephone or personal interview. To the extent that our trustees, officers or other employees participate in this solicitation, they will not receive any compensation for their participation, other than their normal compensation. Deadlines for receipt of shareholder proposals: Any shareholder proposal (including nominations for trustee) pursuant to SEC Rule 14a-8 intended to be presented at the In addition, pursuant to the advance notice provision in the company’s bylaws, notice of any proposal that a shareholder wishes to propose for consideration at the
In addition to satisfying the foregoing advance notice requirements under our bylaws, to comply with the universal proxy rules under the Exchange Act shareholders who intend to solicit proxies in support of director nominees other than the company’s nominees must provide notice 2023 Proxy Statement | 67 that sets forth the information required by Rule 14a-19 under the Exchange Act, no later than March 10, 2024. Other Matters: The Board knows of no other matters to be presented for shareholder action at the Annual Meeting. If any other matters are properly presented at the Annual Meeting for action, the persons named in the accompanying proxy will vote the common shares represented by the proxy in accordance with their best judgment on such matters. Householding: If you share an address with one or more other shareholders, you may have received notification that you will receive only a single copy of the Report and proxy statement for your entire household unless you have notified us that you wish to continue receiving individual copies. This practice, known as
AMERICAN HOMES 4 RENT
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 11:59 p.m. Eastern Time on May During The Meeting - Go to www.virtualshareholdermeeting.com/ 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 11:59 p.m. Eastern Time on May 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:
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.
Important Notice Regarding the Availability of Proxy Materials for the Annual The Notice of Meeting, Proxy Statement and Annual Report are available at
AMERICAN HOMES 4 RENT Annual Meeting of Shareholders May This proxy is solicited by the Board of Trustees The shareholder(s) hereby appoint(s) David P. Singelyn and This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted for the election of all nominees listed on the reverse side and in Continued and to be signed on reverse side | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
