Individual stockholders or any other interested parties may contact our entire Board of Directors or individual members of our Board of Directors, our non-management directors as a group or the Chairman of the Board, by sending an e-mail as follows:Board of Directors
| | | boardofdirectors@macerich.com |
Non-Management Directors
| | | nonmanagementdirectors@macerich.com |
| ��� | | Chairman of the Board, by sending an e-mail as follows: |
| | | •Board of Directors boardofdirectors@macerich.com •Non-Management Directors nonmanagementdirectors@macerich.com | | Such communications may also be submitted in writing in care of: Attention: Secretary The Macerich Company 401 Wilshire Boulevard, Suite 700 Santa Monica, CA 90401 | | | | •Chairman of the Board chairman@macerich.com | | | | | | | All communications are distributed to our Board, or to any individual director or directors as appropriate, depending on the facts and circumstances of the communication. Our Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of our Board be excluded, such as spam, junk mail and mass mailings, resumes and other forms of job inquiries, surveys, business solicitations or advertisements. | | chairman@macerich.com | |
Such communications may also be submitted in writing in care of:
Attention: Secretary
The Macerich Company
401 Wilshire Boulevard, Suite 700
Santa Monica, CA 90401
All communications are distributed to our Board, or to any individual director or directors as appropriate, depending on the facts and circumstances of the communication. Our Board of Directors has requested that certain items that are unrelated to the duties and responsibilities of our Board be excluded, such as spam, junk mail and mass mailings, resumes and other forms of job inquiries, surveys, business solicitations or advertisements.
The following Report of the Compensation Committee shall not be deemed soliciting material or to be filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Exchange Act, except to the extent our Company specifically requests that this Report be treated as soliciting material or specifically incorporates this Report by reference into a filing under either of such Acts.
REPORT OF THE COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board of Directors of The Macerich Company, a Maryland corporation, has reviewed and discussed the Compensation Discussion and Analysis in this Proxy Statement with management. Based on such review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the year ended December 31, 20202023 and this Proxy Statement for our 20212024 Annual Meeting of Stockholders. The Compensation Committee Steven R. Hash ex officioDaniel J. Hirsch Steven L. Soboroff
COMPENSATION DISCUSSION AND ANALYSIS The Compensation Discussion and Analysis (“CD&A”) describes the material elements of our executive compensation program, how the program is designed to support the achievement of our key strategic and financial objectives, and the compensation decisions the Compensation Committee made under the program for our named executive officers, who for 20202023 were: | | | | | | Named Executive Officers | | Title | | |
Thomas E. O’Hern(1) | | Former Chief Executive Officer | | |
Edward C. Coppola(2) | | Former President | | |
| Scott W. Kingsmore | | Senior Executive Vice President, Chief Financial Officer and Treasurer | | |
| Douglas J. Healey | | Senior Executive Vice President, Head of Leasing | | Kenneth L. Volk
| | Ann C. Menard | | Senior Executive Vice President, Business Development Chief Legal Officer and Secretary |
(1) Mr. O’Hern retired from his position as CEO on February 29, 2024. (2) Mr. Coppola retired from his position as President on February 29, 2024.
For purposes of this CD&A, we refer to the Compensation Committee as the “Committee.” 30 2021 Except as the context otherwise requires, references to “LTIP Units” in this CD&A and the accompanying Executive Compensation Tables includes both LTIP Units in the Operating Partnership and restricted stock units of the Company.
COMPENSATION DISCUSSION AND ANALYSIS
BUSINESS HIGHLIGHTS 2020 was an extraordinarily challenging year for our Company, as the COVID-19 global pandemic stormed the U.S. in the first quarter, forcing all of our Centers to close, resulting in many of our tenants halting rent payments. Through the diligent efforts of the Macerich management team, we fortified the Company and reshaped our strategic plans to quickly adapt. We immediately took steps to ensure the health and safety of our employees, our tenants, our service providers and our community shoppers. We also quickly adopted measures to conserve liquidity, such as pausing development projects where appropriate and practicable, drawing down our line of credit, reducing our dividend and negotiating deferrals of certain mortgage loan payments. Over the second and third quarters we worked with local, state and national authorities to safely reopen our properties. By October 2020, our entire portfolio was open and operational, enabling us to improve occupancy, rent collections and cash flow despite reduced capacity limits mandated by state and local COVID-19 regulations.
Significant accomplishments include:
| | | | | | | | | | | | | OPERATIONAL ACHIEVEMENTS: | | | | | | | | •Sustained occupancy growth, strong tenant sales and increases in common area revenue drove strong same-center NOI growth in 2023 of 4.5%, which was our Company’s third consecutive year of strong NOI growth (see Appendix I for non-GAAP reconciliation)
•Executed seven loan transactions totaling approximately $2.8 billion, or approximately $2 billion at our ownership share. This included an approximate 4.5-year renewal and upsizing of our $650 million revolving corporate credit facility during Q3 2023
•Achieved a total shareholder return of 46% for 2023 — a top 10 finish among all real estate investment trusts (“ REITs”)
•Base rent re-leasing spreads were 17% greater than expiring base rent for the year ended December 31, 2023
•Portfolio occupancy increased to 93.5% as of December 31, 2023
| | OPERATIONAL
| | | | | | | | | LEASING ACHIEVEMENTS: | | | | • Rent collections, which had dipped to approximately 35% in April and May, improved asReported the year progressed with collection rates of approximately 89%strongest leasing volume on record by leasing 4.2 million square feet, representing a 12% increase in the third quarteramount of square footage leased over 2022
•Opened 257 stores for 1.6 million square feet, representing an 80% increase in store openings versus 2022 across all brand categories, including luxury, digitally native and approximately 94% in the fourth quarter• Average rent per square foot was $61.87 at December 31, 2020, representing a 1.3% increase over 2019
• Instituted extensive COVID-19 related protocols, including, among others, upgrading ventilation systems to hospital-grade air filtration, enhanced cleaningemerging, international, experiential and sanitization protocols, compliance with mask-wearing mandates, social distance, customer queueing and path of travel protocols
traditional retail
• Secured the stringent, highly regarded Bureau Veritas SafeGuard™ Hygiene Excellence and Safety Certification during 2020 and in early 2021 | | | | | | | | | | | | | | | | | | | LEASING
| | | | • Of our approximately 200 national tenants, we have received payment from and/or agreed to repayment termsExecuted leases for approximately 96% of those tenants, based on gross rent
• Negotiated thousands of COVID-19 workout lease amendments, including over 2,200 amendments during the fourth quarter alone
• Opened 173 new81 new-to-portfolio brands across 96 stores, totaling over 875,000600,000 square feet
•Maintained a strong leasing pipeline for 2021 new store openings totaling approximately 900,000 square feet• Secured commitments for 70% of leased square footage expiring in 2021, and are negotiating letters of intent for the remaining 30%
• Executed leases totaling approximately 900,000 square feet during the fourth quarter, only 8% less than pre-COVID-19 levels during the fourth quarter of 2019
• Secured 1,200 temporary in-line lease agreements occupying nearly 1.92024 through 2026, including 2.2 million square feet of signed leases, totaling $62 million of incremental rent from new stores not yet open
•Continued our diversification strategy by year end,executing approximately 2 million square feet of grocery use portfolio-wide, benefiting our properties with over 800 temporaryrepeat, regular visits and increasing our innovative tenants, during the holiday season, matching the 2019 temporary occupancy levelsincluding fitness and experiential uses, such as Beyond Yoga, CAMP, Club Studio, Kiln, Level99, Industrious, Life Time and Round One Spo-Cha | | | | | | | | | | | COMMUNITY OUTREACH ACHIEVEMENTS: | | | | | | | | •Supported more than 433 unique organizations through volunteerism and in-kind/monetary donations
•Executed more than 2,250 community events at our shopping centers, from movies and concerts to holiday and cultural events and farmer's markets
•Collected supplies and backpacks to equip 20,000 kids for school and continued our laptop donation program that has distributed over 750 computers to schools and community organizations since 2020, including 130+ laptops in 2023
•Donated over 1.8 million meals since 2020 to organizations that help people living with food insecurity
•Hosted blood drive events at our shopping centers, collecting life-saving donations that impacted up to 52,000 lives
•Noted a 37% increase in donations made through our Company’s donor-advised funds program
•Logged 1,420 employee volunteer hours through the Macerich Volunteer Program
| | | | | | | | | |
2021
2024 PROXY STATEMENT 3129
COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | | | COMMUNITY OUTREACH
ENVIRONMENTAL/ SUSTAINABILITY ACHIEVEMENTS: | | | | During 2020, our Company engaged•Achieved #1 ranking among all U.S. retail and top 10 in many community initiatives, including:• Made our real estate available for and hosted many essential functions, such as drive-through COVID-19 testing and vaccination facilities, food drives and first responder parking, and for community activities, such as drive through graduation ceremonies, church services and drive-in concerts and movies
• Donated over 1.4 million meals to support local food banks
• Continued to support charitiesretail worldwide in the communities2023 GRESB Real Estate Assessment and rated A for disclosure
•Included in which we do business, including providing needed supplies for first responders• Participated in marketing campaigns with the use of billboards and other media at our Centers for stay-at-home campaigns, healthy hygiene protocols and blood drives
• Donated iPads to hospitals for use by patients requiring connection to family and friends
• Donated over 500 laptops to schools in New York, California and Arizona to support disadvantaged students with online learning
| | | | | | | | | | | | | | | | | | | ENVIRONMENTAL/ SUSTAINABILITY
| | | | • #1 GRESB ranking within Retail/Americas for the sixth consecutive year
• Top Ranking ontop tier CDP Climate ‘A’ List for the fiftheighth year
• One of five REITs designated as sector leaders on Barron’s list ofNamed among America’s Most SustainableResponsible Companies announced in 2020by Newsweek and Statista
• Retail “Leader inAchieved ISS Prime Status
•Ranked #23 on the Light” Environmental Award for years 2016-2019 from Nareit• Environmental Protection Agency’s Green Power Partnership List of Top 30 On-Site Generation Companies,
landing on the list for the seventh year
•Received recognition for four properties as IREM Certified Sustainable Properties
•Achieved Green Lease Leader – Silver recognition for the newly implemented Green Lease program
•Attained 34% of total energy consumption supplied from clean and renewable sources
| | | | | | | | | | | | | | | | | | | EMPLOYEE ENGAGEMENT/ CULTURE ACHIEVEMENTS: | | | | • RetentionContinued our progress in leadership representation, with individuals identifying as female accounting for 40% of key talent duringpromotions at the Vice President level and 89% at the Assistant Vice President level, with individuals identifying as female from underrepresented groups accounting for 22% of all promotions at the Assistant Vice President level
•MacImpact Committee, a cross-disciplinary advisory group, meets quarterly with organizational leaders; this very challenging yearstrategic body guides and amplifies our environmental and corporate social responsibility efforts
• No layoffs or furloughs• Development
Expanded our summer diversity internship program to eight department tracks and nearly doubled the number of diversity, equityparticipants
•Increased mentorship program participation by 49% year-over-year
•Facilitated employee engagement and inclusion programming, referredadvocacy through employee panel events and physical and mental well-being challenges and provided ongoing support to internally as the DREAM initiative• Provided guidanceour Employee Resource Groups — Parents at Macerich and resourcesVeterans at Macerich
•Delivered over 2,500 hours of training with more than 2,400 completed training courses to employees to assist with the challengesthrough our Training and disruptions created by COVID-19, including:• information on childcare and eldercare resources,
• mental health and wellness programs
• individualized assistance through Macerich’s robust Employee Assistance Program
• technology upgrades to assist in remote work
• providing laptops to employees to assist families and children with remote learning
• Regular employee engagement programming such as:
• video meetings with various operational teams with guest executive speakers
• regular newsletters to our employee population
• lunch and learn programs
• events recognizing specific employee contributions
• Most successful Whole Life Challenge™ in Company history, with 65% participation1
Education Portal
| | | | | | | | | | | | | | | | | | |
1 | The Whole Life Challenge™ is a six-week health and wellness challenge that we sponsor for employees.
|
32 2021
COMPENSATION DISCUSSION AND ANALYSIS Compensation Elements. The following chart summarizes, for each component of our ongoing executive compensation program, the objectives and key features and thecompensation decisions made by the Committee for our named executive officers: | | | | | | | | | | Pay Element | | Objectives and Key Features | | 20202023 Highlights | | | | | Salary | | •Relatively low, fixed cash pay as compared to other pay elements based on the scope and complexity of each position, the officer’s experience, competitive pay levels and general economic conditions | | • 2020Base salaries remained unchanged from 2019 levels for all named executive officers, except Mr. Kingsmore, whose salary was increased to be more competitive with market practices as well as to align withMessrs. O’Hern and Coppola
•Base salaries for peer executives within our CompanyMessrs. Healey and Kingsmore and Ms. Menard were each increased by 20% effective October 30, 2023 to better reflect the scope of their responsibilities | | | | | | | | Annual Incentive Bonus | | •Variable short-term incentive •Rewards achievement of both corporate and individual performance •Measures and goals are established to supportalign with annual strategies and operating plans designed to support our Company’s short-term financial and strategic objectives: •Corporate scorecard goals (Samecommon to all executives (weighted at 75%) included: •Same Center NOI growth, FFO per diluted share, releasing spreads, EBITDA margin improvementGrowth •Year-End Reported Occupancy •Net Debt Reduction •Leasing Spreads •Redevelopment •Environmental Initiatives •Individual performance against pre-established goals was weighted 25% | •At the time the performance objectives for the 2023 annual incentive program were established in the first quarter of 2023, they were deemed appropriately challenging and general and administrative expenses as a percentage of revenue) were weighted 75%, and evaluated formulaicallyrigorous •Our performance against pre-established threshold,the corporate scorecard goals was strong, with four goals achieved at maximum, one goal achieved between target and maximum, goalsand one goal achieved below threshold. The resulting weighted average payout was 120% of target •Individual performance against pre-established goals was weighted 25% | | • Consistent with prior years, the Committee initially developed a proposed 2020 “scorecard” of financialawarded between target and strategic performance objectives early in the year based on our then-current annual operating plans. However, this scorecard had not been fully approved by the Committee when the COVID-19 pandemic suddenly and severely impacted our business operations
maximum • At the onset of the pandemic, we immediately adapted our strategic plans to focus on crisis-related priorities, including protecting the health and safety of our employees, tenants, service providers and shoppers; conserving liquidity; collecting rents; negotiating tenant workouts and reopening Centers• During the second half of fiscal 2020, our Committee decided to bifurcate the year for purposes of evaluating performance, with the original draft scorecard and original personal goals of each executive used to evaluate performance for the first two quarters and the revised second half scorecard setting forth certain pandemic-related strategic goals used to evaluate the performance for the last two quarters
• Due to the material adverse impact of the pandemic on our business, we did not achieve the corporate financial goals under the original draft scorecard. However, the Committee evaluated each named executive officer’s individual performance at the maximum, reflecting the team’s agility and resilience in navigating the crisis, resulting in weighted payout of 25% of each executive’s target bonus for the first half of 2020
• The Committee evaluated the management team’s achievement of the pandemic-related strategic goals at target for the second half of 2020, resulting in a weighted payout of 50% of each executive’s target bonus
• In total, each named executive officer earned 75% of their target bonus for 2020 which resulted in bonus reductions for all named executive officers of approximately 32-39% from 2019.
Refer to “Compensation for 20202023 Performance –— Annual Incentives”Incentives” for more detail |
2021 PROXY STATEMENT 33
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | Pay Element | | Objectives and Key Features | 2020 Highlights | | | | | Long-Term Incentives | | 20202023 Performance-Based LTIP Units •Variable long-term incentive • Provides incentive forProgram design continued in 2023 to support our executive officers to take actions that contribute to the creation ofmulti-year business strategies and align pay delivery with performance and stockholder value and outperform other equity REITs which are investment alternatives for our stockholders •May be earned from 0% to 150% of target number of units based on our TSR over theperformance versus three-year performance period compared toFFO per share goals (weighted 50%) and three-year Year-end Reported Occupancy goals (weighted 50%), with potential modification +/-20% based on three-year relative total stockholder return (“TSR”) versus publicly-traded, US-based equity REITs in the Nareit Index which are categorized as “mall” or “shopping center” REITs (the “Equity Peer REITs”). Refer to “Role of Data for Peer Companies” for more detail.2020
2023 Service-Based LTIP Units
•Vest in equal annual installments over a three-year period to promote stockholder alignment, retention and stability of our management team | | •Target LTIP Unit grant values for the awards made January 1, 2020 were at same levels as in 2019 for all2023 to the named executive officers except Mr. O’Hern• In 2019, notwithstandingremained the termssame as 2022
•For 2023 the Committee granted the same mix of his letter agreement, Mr. O’Hern volunteeredperformance-based and time-based LTIP Units as compared to reduce the size of his 2019 long-term incentive awards by $2,000,000 in order to provide incentive compensation for our Company’s senior vice presidents• Mr. O’Hern’s 2020 target LTIP Unit value, which was granted prior to the U.S. onset of the COVID-19 crisis, was at the normal target level of $6,000,000.
• For 2021, and again, notwithstanding the terms of his letter agreement, Mr. O’Hern volunteered to reduce the size of his 2021 long-term incentive awards by $1,500,000. Mr. Coppola also volunteered to reduce the size of his typical long-term incentive awards by $600,000 for 2021. The Committee approved these reductions and determined, in consultation with Mr. O’Hern, to offer the reduced awards to the balance of the management team to provide more meaningful long-term incentive compensation to those executives.
•2022 grants, i.e., 75% of the 2020 target LTIP value was granted in performance-based LTIP Units for CEO and 25% of target LTIPPresident and 50% for other named executive officers. The remaining value was granted in service-based LTIP Units to our CEO and President
• 50% of 2020 target
2021 Performance-Based LTIP value was grantedUnits Earned in performance-based LTIP Units and 50% of target LTIP value was granted in service-based LTIP Units for our named executive officers other than our CEO and President2023
• None of theThe performance-based LTIP Units granted in 20182021 were earned because ourat 83.7% of target based on above-target performance versus the FFO per share goals, below target performance versus the occupancy goals, and relative TSR forat the 2018-2020 performance period was below the 25th64th percentile evidencing our pay-for-performance philosophy
| | | |
34 2021
COMPENSATION DISCUSSION AND ANALYSIS Target Total Direct Compensation Mix 
2021
Chief Executive Officer 2023 Target Pay Mix Other Named Executive Officers - Average 2023 Target Pay Mix 32 2024 PROXY STATEMENT35
COMPENSATION DISCUSSION AND ANALYSIS
LTIP Pay for Performance Alignment. The forfeiture, and tracking forfeiture, of the performance-based LTIP Unit awards for 20172021 through 20222023 reflects strong pay for performance alignment with respect to the applicable performance periods. The graphic below summarizes the performance periods and outcome, or projected outcome, of our performance-based LTIP Unit awards in 2017, 2018, 20192021, 2022 and 2020,2023, through December 31, 2020. | | | | | | | | | | | | | | | | | | | | | LTIP Performance Period | | 2017 | | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | | | Status | | %Payout | | 2017 3-year LTIP | | 100% Complete | | | | | | | | q | | Below Threshold and 100% Forfeited | | | 0% | | 2018 3-Year LTIP | | | | 100% Complete | | | | | | q | | Below Threshold and 100% Forfeited | | | 0% | | 2019 3-Year LTIP | | | | | | 67% Complete | | | | q | | Tracking Below Threshold | | | 0%(1) | | 2020 3-Year LTIP | | | | | | | | 33% Complete | | q | | Tracking Below Threshold | | | 0%(1) | |
(1) | The performance period for these awards remains open and the payout percentage for these awards has not been determined. The payout percentage is reflected as 0% in the table to indicate that, if the performance period applicable to the award had ended as of December 31, 2020, the Company’s relative TSR ranking considered for purposes of the awards would have been below the applicable Threshold level and the awards would have been forfeited. We make no prediction as to the future performance of our stock.
|
2023.
| | | | | | | | | | | | | | | | | | | | | | | | | LTIP Performance Period | 2021 | 2022 | 2023 | 2024 | 2025 | Status | Payout as
Percentage
of Target | | | | | | | | | | 2021 3-Year LTIP | 100% Complete | | | Earned Below Target | 83.7% | | | | | | | | | | | | | | | | | | 2022 3-Year LTIP | | 67% Complete | | Tracking Above Target | 101%(1) | | | | | | | | | | | | | | | | | | 2023 3-Year LTIP | | | 33% Complete | Tracking Above Target | 142%(2) | | | | | | | | |
(1)Represents our actual performance for the portion of the award (40% of the total award opportunity) eligible to be earned based on our financial and operational performance during the periods beginning (i) January 1, 2022 and ending December 31, 2022 (relating to 20% of the total award opportunity) and (ii) January 1, 2023 and ending December 31, 2023 (relating to 20% of the total award opportunity), as modified upward by 2.67% based on our relative TSR ranking as of December 31, 2023, as though the cumulative performance period had ended on such date. We make no estimate as to our financial and operational performance with respect to the remaining 60% of the award eligible to be earned based on our performance during the remaining performance periods under the award and no prediction as to the future performance of our stock for purposes of estimating our relative TSR ranking upon the conclusion of the full performance period. (2)Represents our actual performance for the portion of the award (20% of the total award opportunity) eligible to be earned based on our financial and operational performance during the period beginning January 1, 2023 and ending December 31, 2023, as modified upward by 20% based on our relative TSR ranking as of December 31, 2023, as though the cumulative performance period had ended on such date. We make no estimate as to our financial and operational performance with respect to the remaining 80% of the award eligible to be earned based on our performance during the remaining performance periods under the award and no prediction as to the future performance of our stock for purposes of estimating our relative TSR ranking upon the conclusion of the full performance period.
The three-year performance period for the 20182021 performance-based LTIP Unit awards has been completed and the entire awardCompany achieved three-year FFO per share between target and maximum for a percentage earned of 63.8% of the target LTIP Units and achieved three-year Permanent Occupancy between threshold and target for a percentage earned of 11.3% of the target LTIP Units. The Company’s TSR for the performance period beginning January 1, 2021 and ending December 31, 2023 was forfeited becauseat the Company did not achieve64th percentile of the Threshold relativeEquity Peer REITs, resulting in a TSR ranking.The total amount realized with respect tomodifier of +11.43%. Accordingly, 83.7% of the outstanding 2019 and 2020target 2021 performance-based LTIP Unit awards will be determined followingwere earned for the three-year performance periods ending December 31, 2021 and 2022, respectively. If the performance period had ended on December 31, 2020, the 2019 and 2020 performance-based LTIP Unit awards would have resulted in $0 realized pay due to the failure to satisfy the Threshold relative TSR achievement level.
36 2021 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS
Target vs. Realizable CEO Compensation
As illustrated above, the majority of our Chief Executive Officer’s compensation opportunity is “at risk” and tied to performance goals and our relative TSR. Because a significant portion of compensation opportunity is in the form of equity awards, the value is also tied to our absolute TSR. Our pay-for-performance philosophy is further illustrated by comparing target total direct compensation to “realizable” compensation for each of the past three years, which after taking into account actual performance, demonstrates alignment of pay and performance.
(1) | Target TDC for 2019 includes target LTIP grant value of $4 million, as Mr. O’Hern volunteered to reduce the size of his 2019 long-term incentive award by $2 million. Mr. O’Hern’s 2020 target LTIP grant value, which was granted prior to the U.S. onset of the COVID-19 crisis, was at the normal target level of $6 million. In 2021, Mr. O’Hern again volunteered to reduce his target LTIP grant value by $1.5 million.
|
Target pay includes base salary, target annual incentive compensation, and the target grant-date fair value of long-term incentives in 2018 for Mr. A. Coppola and in each of 2019 and 2020 for Mr. O’Hern. Realizable pay includes: (i) annual base salary earned; (ii) actual annual incentive earned in respect of the applicable year; and (iii) the value of performance-based LTIP Units (assuming the performance period had ended December 31, 2020) and service-based LTIP Units as of December 31, 2020, including earned dividend equivalents. None of the performance-based LTIP Units granted in 2018 were earned, and none of the performance-based LTIP Units granted in 2019 and 2020 would have been earned at December 31, 2020 based on our relative TSR performance as of such date. The value of the service-based LTIP Units is based on our closing stock price on December 31, 2020, the last trading day of fiscal 2020. This chart and the total realizable pay reported in this chart provide supplemental information regarding the compensation paid to our Chief Executive Officer and should not be viewed as a substitute for the 2020 Summary Compensation Table. We believe that showing realizable compensation illustrates for stockholders the alignment between pay and performance.
20202023.
At our 20202023 Annual Meeting of Stockholders, more than 95%approximately 96% of the votes cast were in favor of the non-binding, advisory Say-on-Pay resolution. The level of support was a significant improvement from 2019 vote, when approximately 71% of the votes cast were in favor of this proposal. The Committee considered both the results of the 20202023 advisory vote on executive compensation, as well as feedback from our ongoing engagement with stockholders on a variety of issues, including executive compensation and corporate governance. Our Company believes that this support level demonstrates a strong alignment among our stockholders and our executive compensation program. Accordingly, the Committee did not make any changes to the Company’s executive compensation program in response to the 2023 “Say-on-Pay” vote. As part of our commitment to ongoing transparent communication with our stockholders, we will continue this open dialogue to ensure we understand stockholder views on these important issues. 2021 PROXY STATEMENT 37
COMPENSATION DISCUSSION AND ANALYSIS
Compensation Governance Highlights Our executive compensation and corporate governance programs are designed to closely link pay with operational performance and increases in long-term stockholder value while minimizing excessive risk taking. To help us accomplish these important objectives, we have adopted the following policies and practices:
No Excessive Risk Taking. Our compensation program is designed to not incentivize excessive risk taking by participants. We conduct anannual risk assessment of all of our compensation programs.
No Excise Tax Gross-Ups. None of our Company’s executives are entitled to any excise tax gross-ups.
Double-Trigger Equity Vesting. Our equity awards are subject to double-trigger vesting acceleration in connection with a change of control.
Robust Stock Ownership Guidelines. We have robust stock ownership policies for our named executive officers and directors, and eachindividual who is subject to them is in compliance with those policies. See “Stock Ownership Policies” on page 47 ofin this Proxy Statement.
COMPENSATION DISCUSSION AND ANALYSIS Holding Period. Until the minimum required stock ownership level is achieved, our named executive officers must retain 50% of the net-after-taxprofit shares from vesting of equity compensation awards. See “Stock Ownership Policies” on page 47 ofin this Proxy Statement.
Clawback Policy. We haveEffective October 2, 2023, our Company’s Board of Directors adopted a clawback policyCompensation Recovery Policy that allows uscomplies with the rules issued by the SEC under the Exchange Act and requires the Company to recover certain cash and equity incentiveall erroneously awarded incentive-based compensation paid to ourreceived by executive officers ifduring a specified look-back period in the compensation was based on achievingevent that the Company is required to restate its financial results that were subsequently restated and the amount of the executive officer’s incentive compensation would have been lower had thestatements due to material noncompliance with any financial results been properly reported.reporting requirement under federal securities laws. No Repricing. We do not permit repricing of underwater options or SARs or permit exchange of underwater options or SARs for other awards orcash, without prior stockholder approval.
Anti-Hedging Policy. We have a policy prohibiting all of our directors, officers and employees from engaging in any hedging or monetizationtransactions that are designed to hedge or offset any decrease in the market value of our securities. This policy also prohibits short sales and the purchase and sale of publicly traded options of our Company.
Anti-Pledging Policy. In addition, weWe have a policy (a) prohibiting all our directors and executive officers from pledging our securities if they areunable to meet our stock ownership requirements without reference to such pledged shares and (b) recommending that our directors and executive officers not pledge our Company’s securities. Currently, based on information provided by our directors and officers, no shares of our Company are pledged by any of our current directors and executive officers.
Independent Compensation Consultant. The Committee engages an independent compensation consulting firm that provides us with no otherservices.
Annual Say-on-Pay. We annually submit our executive compensation program for our named executive officers to a say-on-pay advisory votesvote forstockholder consideration. Compensation Philosophy and Objectives Our executive compensation program is designed to achieve the following objectives: •Attract, retain and reward experienced, highly-motivated executives who are capable of leading our Company in executing our corporate strategy. •Link compensation earned to achievement of our Company’s short-term and long-term financial and strategic goals. •Align the interests of management with those of our stockholders by providing a substantial portion of compensation in the form of equity-based incentives and maintaining robust stock ownership requirements. •Adhere to high standards of corporate governance.
The Committee believes strongly in linking compensation to corporate performance: for 2023, 75% of the annual incentive awards are primarily based on overall corporate performance and vesting of 75% of the long-term incentive equity awards for our CEO and President and 50% for all other named executive officers depends on our three-year operational and financial goals as well as relative TSR compared to our Equity Peer REITs. The Committee also recognizes individual 38 2021 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS
performance in making its executive compensation decisions. The Committee believes this is the best program overall to attract, motivate and retain highly skilled executives whose performance and contributions benefit our Company and our stockholders.
The Committee does not have a strict policy for allocating a specific portion of compensation to our named executive officers between cash and non-cash or short-term and long-term compensation. Instead, the Committee considers how each component promotes retention and/or motivates performance by the executive. The Committee believes it utilizes the right blend of cash and equity to provide appropriate incentives for executives while aligning their interests with those of our stockholders and encouraging the executives’ long-term commitment to our Company. Role of the Compensation Committee The Committee reviews and approves the compensation for our executive officers, reviews our overall compensation structure and philosophy and administers certain of our employee benefit and stock plans, with authority to authorize awards under our incentive plans. The Committee currently consists of four independent directors, Ms. Stephen (Chair) and Messrs. Brandt, Hirsch,Hash and Soboroff.Hirsch. Management, under the leadership of our Chief Executive Officer, develops our Company’s strategy and corresponding internal business plans, which our executive compensation program is designed to support. Our Chief Executive Officer also provides the Committee with his evaluation of the performance of and his recommendations on compensation for his direct reports, including the other named executive officers.
COMPENSATION DISCUSSION AND ANALYSIS
Role of Compensation Consultant The Committee may, in its sole discretion, retain or obtain the advice of any compensation consultant as it deems necessary to assist in the evaluation of director or executive officer compensation and is directly responsible for the appointment, compensation and oversight of the work of any such compensation consultant. The Committee retained FW Cook as its independent compensation consultant with respect to our compensation programs.programs and our Pay Versus Performance disclosure. FW Cook’s role is to evaluate the existing executive and non-employee director compensation programs, assess the design and competitive positioning of these programs, and make recommendations for change, as appropriate. The Committee considered the independence of FW Cook and determined that its engagement of FW Cook does not raise any conflicts of interest with our Company or any of our directors or executive officers. FW Cook provides no other consulting services to our Company, executive officers or directors. Role of Data for Peer Companies FW Cook periodically conducts competitive reviews of our executive compensation program, including a competitive analysis of pay opportunities for our named executive officers as compared to the relevant peer group selected by the Committee. The Committee reviews compensation practices at peer companies to inform itself and aid it in its decision-making process so it can establish compensation programs that it believes are reasonably competitive. In 2019,At the time the Committee established 2023 target pay opportunities for the named executive officers, the most recent competitive review FW Cook had conducted a competitive analysis of our executive compensation program versus a refreshed compensation peer group,was in 2021, which included the following U.S.-based, publicly-traded REITs: | | | | | | | Acadia Realty Trust | Regency Centers Corporation | | | | Brixmor Property Group, Inc. | Simon Property Group, Inc. | | | Brixmor Property Group, Inc. | | SITE Centers | | | | Douglas Emmett, Inc. | SITE Centers | | | | Federal Realty Investment Trust | SL Green Realty Corp. | | | Federal Realty Investment TrustJBG Smith Properties | | Tanger Factory Outlets | | | JBG Smith Properties | | Taubman Centers, Inc. | | | | Kilroy Realty Corporation | | VEREIT, Inc.Vornado Realty Trust | | | | Kimco Realty Corporation | | VornadoWeingarten Realty Trust | | | Regency Centers Corporation | | Weingarten Realty |
2021 PROXY STATEMENT 39
COMPENSATION DISCUSSION AND ANALYSIS
The group included our direct mall REIT competitors both larger and smaller than us, as well as other REITs, primarily selected based on size, headquartered in Southern California, and/or with a meaningful number of retail properties in their portfolio. At the time FW Cook conducted the 20192021 competitive review, our twelve-month average total capitalization was in the median range compared to the peer group.
In October 2023, FW Cook again conducted a competitive analysis of our executive compensation program.The Committee continuespeer group used in the 2023 competitive analysis included all the companies listed above, except Weingarten Realty, which had been acquired, and VEREIT, Inc., which was removed following its acquisition in November 2021. The following five REITs were added: American Assets Trust, Kite Realty Group Trust, Phillips Edison & Co., Retail Opportunity Investments and Urban Edge Properties.This 2023 competitive analysis was used to believe that these REITs best reflect a complexityinform the Committee’s decisions on the October 2023 salary adjustments and breadth of operations, as well as2024 target pay opportunities for the amount of capital and assets managed, similar to our Company.named executive officers.
The Committee does not set compensation components to meet specific benchmarks. Instead, the Committee focuses on a balance of annual and long-term compensation, which is heavily weighted toward “at risk” performance-based compensation. Peer group data is not used as the determining factor in setting compensation because each officer’s role and experience is unique. The Committee believes that ultimately the decision as to appropriate compensation for a particular officer should be made based on a full review of that officer’s and our Company’s performance.
COMPENSATION DISCUSSION AND ANALYSIS COMPENSATION FOR 20202023 PERFORMANCE
Compensation opportunities for each named executive officer consisted of a base salary, an annual bonus opportunity, and long-term incentives, each of which is described in more detail below. As they do annually, the Committee members reviewed base salaries of the named executive officers to determine whether they remain appropriate based on the factors identified above. 20202023 salaries remained unchanged from 2019 levels for all named executive officers, except Mr.Messrs. O’Hern and Coppola. After the FW Cook competitive review in October 2023, the base salaries of Messrs. Healey and Kingsmore whose salary wasand Ms. Menard were increased on January 1, 202020% effective October 30, 2023 to better align with market practices as well as peer executives.reflect the scope of their responsibilities. Each executive officer has a target annual incentive opportunity, expressed as a percentage of base salary. Target bonus was 200% of base salary forFor Messrs. O’Hern and Coppola, their target bonus opportunity remained unchanged in 2023 at 200% of base salary. In connection with FW Cook’s competitive review conducted in October 2023, the target bonus opportunity for Messrs. Healey and Kingsmore and Ms. Menard was increased from 100% of base salary for all other named executive officers.The Committee set target bonuses for Messrs. O’Hern and Coppola at a higher percentageto 125% of base salary than the other executives because their positions are those of strategic leaders who manage and direct our other named executive officers.effective January 1, 2023. Actual bonuses can range from 0% to 200% of each executive’s target bonus, based on the Committee’s assessment of annual performance against the objectives established for the year.
The Committee set target bonuses for Messrs. O’Hern and Coppola at a higher percentage of base salary than the other executives because their positions managed and directed our other named executive officers.
In early 2020,2023, the Committee developed a draft “scorecard” of financial and strategic objectives consistent with past practice, against which performance would be evaluated to determine annual incentives for the named executive officers. The scorecard objectives were designed to reward the successful execution of our strategies and were consistent with our external guidance as initially disclosed in the first quarter of 2020.2023. Six corporate measures would determinedetermined 75% of each participating executive’s earned bonus and the remaining 25% was based on the Committee’s assessment of the executive’s individual performance. When the COVID-19 pandemic suddenly
2023 Corporate Goals—Weighted 75%
| | | | | | | Measure | Weighting | (1)Same Center NOI Growth | 10 | % | (2)Year-End Reported Occupancy | 10 | % | (3)Leasing Spreads | 10 | % | (4)Net Debt Reduction | 10 | % | (5)Redevelopment | 15 | % | (6)Environmental Initiatives | 20 | % | | TOTAL | 75 | % |
Same Center NOI Growth
Why this measure was selected: We use NOI in addition to net income to report operating and severely impacted business operations, the draft scorecard initially being considered by the Committee immediately became obsolete,financial results, and we adapted our strategic plansconsider NOI as a supplemental measure for the real estate industry and a supplement to focus on crisis-related priorities, including protecting the health and safetyGenerally Accepted Accounting Principles (“GAAP”) measures. NOI is a useful measure of our employees, tenants, service providersfinancial condition and shoppers, conserving liquidity, collecting rents, negotiatingresults of operations because it focuses on income and expense items at the property portfolio level. Increasing NOI is an operational goal that resonates across our organization, and involves the coordination of all disciplines within our Company.
How we set our goals: The Committee established portfolio NOI growth goals at threshold, target and maximum levels which were in line with our February 2023 guidance range of NOI growth of 2.0% to 3.0%.
How we performed: Sustained occupancy growth, strong tenant workoutssales and reopeningincreases in common area revenue drove strong NOI growth in 2023 of 4.5%, which was our Centers.In order to evaluate performance and determine earned 2020 annual incentives,Company’s third consecutive year of strong NOI growth. This achieved the Committee split the year into two halves:
The original scorecard was used to evaluate performancemaximum goal payout for the first and second quarters of 2020
this measure.The revised set of pandemic-related strategic goals was used to evaluate performance for the third and fourth quarters of 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Same Center NOI Growth | 10 | % | 2.0 | % | 2.5 | % | 3.0 | % | 4.5 | % | 200 | % | 20 | % |
40 2021
COMPENSATION DISCUSSION AND ANALYSIS Measures
Year-End Reported Occupancy
Why this measure was selected: As a result of the pandemic, our portfolio mall and freestanding occupancy declined by 5.5% from 94.0% at December 31, 2019 to 88.5% at March 31, 2021. Increasing occupancy through re-leasing is the primary way for First Halfus to restore cash flow from operations and recover the significant loss of 20202020 Corporate Goals—Weighted 75%
| | | | | | | | | | | | | | | | | | | | | | | 2020 Goals | | Measure | | Weighting | | | Threshold | | | Target | | | Max | | | | | | Payout | g | | | 50% | | | | 100% | | | | 200% | | Same Center NOI Growth(1) | | | 12.5 | % | | | 0.75% | | | | 1.00% | | | | 1.25% | | FFO per Diluted Share(2)(3) | | | 12.5 | % | | | $ 3.45 | | | $ | 3.50 | | | $ | 3.55 | | Big Box Lease-up(4) | | | 12.5 | % | | | 70% | | | | 80% | | | | 90% | | Year-end Occupancy | | | 12.5 | % | | | 94.3% | | | | 94.6% | | | | 94.9% | | Key Sustainability Metrics | | | 12.5 | % | | | | | | | | | | | | | Relative G&A as a % of Revenue | | | 12.5 | % | | | | | | | Top Quartile | | | | | |
(1) | Excludes leasing expenses
|
(2) | Excludes the impact of acquisitions/dispositions
|
(3) | FFO per diluted share represents funds from operations per share on a diluted basis, excluding financing expenses in connection with Chandler Freehold and loss on extinguishment of debt. For the definition of FFO and a reconciliation of FFO to net operating income attributable to common stockholders, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Funds from Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020.
|
(4) | Related to Sears and Forever 21 lease rejections/terminations as a result of their bankruptcy filings.
|
While performancenet operating income following the negative impacts of the pandemic.
How we set our goals: The Committee established a portfolio mall and freestanding Year-End Reported Occupancy goal at target of 93.0% as of December 31, 2023. This was belowgenerally in line with our Company’s expectations used to develop our February 2023 earnings guidance.
How we performed: During 2023, we were able to effectively capitalize on the strongest leasing year in our Company’s history in terms of square footage leased, and ended the year with portfolio mall and freestanding reported occupancy of 93.5%. As a result, we have recovered all but 50 bps of the 5.5% occupancy decline since the pandemic. This achieved the maximum payout for this measure. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Reported Year-End Occupancy | 10 | % | 92.5 | % | 93.0 | % | 93.5 | % | 93.5 | % | 200 | % | 20 | % |
Leasing Spreads Why this measure was selected: An important driver to grow NOI is to achieve rental rate growth between expiring leases and renewal/replacement leases. This can be emphasized when occupancy increases and there is competition for space. In 2023, we prioritized growing rental rate, which is measured by leasing spreads. How we set our goals: Understanding that it takes time to gradually grow rental rate once occupancy growth is restored, the Committee set threshold, target and maximum goals of 2%, 6% and 10%, respectively. How we performed: During 2023, given the prevailing historically strong leasing environment, we achieved positive leasing spreads on base rent of 17.2%, which achieved the maximum payout for this measure.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Leasing Spreads | 10 | % | 2.0 | % | 6.0 | % | 10.0 | % | 17.2 | % | 200 | % | 20 | % |
Net Debt Reduction Why this measure was selected: Reduction of our leverage continues to be an important corporate priority that we believe should increase stock price and stockholder return. How we set our goals: The Committee set threshold, target and maximum goals of reducing net debt (debt, net of unrestricted cash) by $100 million, $200 million and $300 million, respectively, with the understanding that there was uncertainty as to whether we could achieve these goals in light of the fact that the viability of the primary strategies we might employ (issuing equity and/or disposing of operating assets), both depend upon multiple market factors that are outside of our control. How we performed: We engaged in various acquisitions and dispositions that resulted in an increase to net debt during the year and given the prevailing stock price during the year, management determined that the issuance of equity was not in the best interest of our Company or our stockholders. As a result, we did not meet the threshold goal for allthis measure.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Net Debt Reduction | 10 | % | $100 | mil. | $200 | mil. | $300 | mil. | ($107 mil.) | 0 | % | 0.0 | % |
Redevelopment Why this measure was selected: Investing in capital improvements on our properties is intended to evolve our real estate and enhance the attractiveness of our properties to shoppers, retailers and the communities in which we operate. Strong re-development progress is a key driver of value creation for our stockholders. How we set our goals: At the beginning of 2023, we outlined six redevelopment projects that we aspired to accomplish, subject to capital availability. The Committee set the target goal of achieving four of these six projects, and the maximum goal of achieving five of six. More detail on each objective is provided below:
COMPENSATION DISCUSSION AND ANALYSIS
How we performed: During 2023, we achieved five of the above economic measures at 12/31/2020,six objectives, which achieved the maximum payout for this measure. | | | | | | | | | | Property/Project | Goal | Achievement | | Scottsdale Fashion Square | Execute replacement leases or letters of intent for 50% of the impacted space in connection with the redevelopment of the Nordstrom wing | Achieved.Signed leases or executed letters of intent for approximately 52% of the impacted space, with another 32% at the negotiating letter of intent stage | | Tysons Corner | Secure entitlements for the Lord & Taylor parcel | Achieved. Received unanimous approval of Phase 2A entitlements from the Fairfax County Board in September 2023 | | Phoenix Market | Accomplish at least one of the following two mixed-use development goals within the Phoenix market: 1) Kierland Commons: execute partnership agreement for residential development; or 2) Biltmore Fashion Park: secure city site plan approval for a mixed-use development | Not Achieved. Continue resolving infrastructure concerns for Kierland Commons and continue to work with city to secure approval of mixed-use development at Biltmore | | Store Openings | Open at least four of the following six stores/uses: 1) Kings Plaza: Target; 2) Chandler Fashion: Scheels; 3 & 4) Scottsdale Fashion and Broadway Plaza: Lifetime (2 stores); 5) Tysons Corner: Apple OR 6) Green Acres Mall: Primark | Achieved.All six completed | | Deliver Space to Tenants for Construction | Deliver space to tenants for tenant construction for five of the following seven key store openings planned for 2024: 1) Santa Monica Place: Arte Museum; 2) Scottsdale Fashion Square: Caesar’s Republic; 3) Danbury Fair: Target; 4) Tysons Corner: Primark; 5) Queens Center: Zara; OR 6 & 7) Arrowhead Towne Center and Danbury Fair: Round One (2 stores) | Achieved. Five of seven goals completed | | Vacant Anchor Buildings | Execute replacement leases or letters of intent for a majority of the space at least two of the following four vacant anchor buildings: 1) Broadway Plaza: former Neiman Marcus; 2) Kings Plaza: former Best Buy; 3) FlatIron Crossing: former Nordstrom or 4) Freehold Raceway: replacement tenant in former Lord & Taylor | Achieved.Two of four goals completed: 1) executed letter of intent with Restoration Hardware; 2) not completed; 3) not completed; 4) signed agreement with Dicks House of Sport |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Redevelopment | 15 | % | 3 of 6 | 4 of 6 | 5 of 6 | 5 of 6 | 200 | % | 30 | % |
Environmental Initiatives Why this measure was selected: At Macerich, we balance the goal of providing vibrant places for our customers with the need to be responsible stewards of our resources, reflecting the communities we serve and helping make communities more resilient. As such, the Committee believes that executives should be held accountable for progress towards the Company’s environmental commitments. How we set our goals: The Committee developed a set of annual goals for 2023 that align with our long-term environmental goals as communicated to stockholders in our Corporate Responsibility Report and which are outlined in the table below. The Committee set the target goal of achieving three of the four objectives, and maximum goal of achieving all four objectives.
How we performed: During 2023, we achieved three and one-half of the four objectives, resulting in noan interpolated payout underof 150% between the initial draft scorecard, attarget and maximum payout for this measure.
COMPENSATION DISCUSSION AND ANALYSIS | | | | | | | Objective | Achievement | | Reduce 2023 portfolio utility energy consumption by 15% vs. 2022 | Achieved.Completed with 15% reduction in 2023 | | Implement 400KW of on-site clean energy assets | Achieved. 50% achieved by the installation of the Green Acres solar array by our Company. The utility company is upgrading its infrastructure and estimates 6-8 months to complete work. As a result, the solar facility is not expected to be fully operational until 2024. Given that our Company completed its portion of the work while waiting on the utility company before the facility is operational, the Committee considers this objective to be 50% achieved | | Reduce 2023 portfolio water intensity of the common areas by 5% vs. 2022 | Achieved. Completed with 6% reduction in 2023 vs. 2022 | | Divert from landfills 50% of total waste generated in 2023 | Achieved. Completed with 55% diversion in 2023 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | % of Target Payout | | Measure | Weighting | Threshold | Target | Max | Actual | Unweighted | Weighted | | Environmental Initiatives | 20 | % | 2 of 4 | 3 of 4 | 4 of 4 | 3.5 of 4 | 150 | % | 30 | % |
Overall Corporate Results The overall payout for the endCorporate Goals component, weighted 75%, was 120% of Q1 2020, the Company was trending at target for both Same Center NOI Growth and FFO per Diluted Share while the remaining measures were not readily quantifiable in a single quarter.target. | | | | | | | | | | | | | | Payout (% of Target) | | Measure | Weighting | Unweighted | Weighted | | Same Center NOI Growth | 10 | % | 200 | % | 20 | % | | Year-End Reported Occupancy | 10 | % | 200 | % | 20 | % | | Leasing Spreads | 10 | % | 200 | % | 20 | % | | Net Debt Reduction | 10 | % | 0 | % | 0 | % | | Redevelopment | 15 | % | 200 | % | 30 | % | | Environmental Initiatives | 20 | % | 150 | % | 30 | % | | TOTAL | 75 | % | | 120 | % |
Individual Performance—Weighted 25% A portion of the annual incentive is based on an assessment of individual performance in order to reward individual achievements and contributions. In making the individual determinations, the Committee took into consideration each named executive officer’s individual contributions to our operational and financial performance in 2019,2023, as well as their individual accomplishments and performance relative to their objectives for the year. The Committee has the discretion to award between 0% and 200% of the named executive officer’s target individual award opportunity.
With respect to Mr. O’Hern: HisIn determining his annual incentive bonus, the Committee reviewed with Mr. O’Hern his 2023 accomplishments against his individual goals. In addition to supporting our 2023 corporate goals described above, the Committee considered his leadership of the management team and the entire Company through every aspect ofin executing our operations during this extraordinary year. Some examples included:creating the strategic, path for our Companyfinancial and operational initiatives, including:
•assistance and leadership in transition to successfully navigate through the many challenges posed by the COVID-19 pandemic;new CEO; leading our Company’s efforts•continuing to preserve liquidity by drawing down our Company’s line of credit in the early days of the pandemic, reducing the dividend and pausing all development projects where appropriate and practicable and initiating the efforts, where possible, to get mortgage lenders to defer debt service payments during the periods of mall closures;
push EBITDA towards pre-pandemic levels;leading the Company’s employees through the first pandemic in over 100 years and maintaining a fully functional workforce, many of whom were working remotely, and maintaining morale and collaboration through the challenges posed by COVID-19;
engaging with state and local government officials to develop re-opening plans after the initial COVID-19 related closures;
leading the Company’s efforts to ensure the health and safety of our employees, tenants, service providers and shoppers by, among other things, enhancing filtration systems and cleaning protocols across our portfolio; and
engaging in extensive investor and lender outreach to keep them apprised of our Company’s plans to navigate through the COVID-19 pandemic successfully.
With respect to Mr. Coppola: His leadership and achievements included:
leading negotiations in connection with JC Penney bankruptcy, including securing four stores which were slated to close safeguarding entitlements, reduced parking ratios and expanded development rights;
2021 PROXY STATEMENT 41
COMPENSATION DISCUSSION AND ANALYSIS
taking a lead role in critical negotiations with department stores and theatres for payment of rents and development rights throughout our portfolio;
securing the contact for•overseeing the sale of Paradise Valley, which closed in the first quarter of 2021;non-core assets and
land holdings; and•continuing to strengthen relationshipsprogress on replacements for vacant department store and theater boxes with key tenants and non-core asset groups. more productive uses.With respect to Mr. Kingsmore: His success in his role as Chief Financial Officer, including:
overseeing mortgage debt deferrals and multiple mortgage loan extensions with no change to interest rates;
leading the second phase of Yardi, a new enterprise planning resources system, which included all primary accounting, retail manager and leasing modules;
working closely with the leasing group, reviewing and approving the majority of COVID-19 related workouts and related lease renewal packages;
overseeing complex accounting, operational and financial reporting disclosures in light of COVID-19; and
engaging in extensive investor and lender outreach to keep them apprised of the Company’s post-COVID-19 business plans.
With respect to Mr. Healey: His success in his role as head of Leasing, including:
ensuring proper strategy, resources, organization and staffing during the unprecedented COVID-19 crisis;
achieving successful openings of 173 new tenants totaling 875,000 square feet and 433 lease extensions totaling 1.6 million square feet;
maintaining a strong leasing pipeline for 2021;
working closely with tenants on COVID-19 related workouts and bankruptcy workouts; and
mentoring two new executive vice presidents in leasing.
With respect to Mr. Volk: His success in his role as head of Business Development, including:
securing 1,200 temporary in-line leases occupying 1.9 million square feet by year end with over 800 temporary tenants during the holiday season, matching 2019 temporary occupancy levels;
securing over 800 defer-to-abate workout agreements to secure rent and occupancy;
securing over 3,800 new temp/media agreements;
coordinating a tenant webinar with PriceWaterhouseCoopers and US Bank to present information on COVID-19 CARES Act programs; and
executing long-term unique agreements with Candytopia, The Friends Experience, Toyota Showroom, Puma NBA All Star Event; Grinch Experience and SoulCycle, amongst others, generating top rents and filling large vacancies.
Based on each executive’sthese accomplishments for 2020, as well as considering the team’s resilience and prompt response to the challenges created by the pandemic in the second quarter of 2020,2023, the Committee scored the individual performance category at 200% of target (50% of target on a weighted basis) for all named executive officers. 42 2021Mr. O’Hern.
COMPENSATION DISCUSSION AND ANALYSIS Measures for Second Half
With respect to Mr. Coppola: His contributions and achievements in our key operations, including: •leadership in department store group and other majority industry players; •leadership in development and construction groups; •leading negotiations of 2020—Weighted 100%At the onsetour acquisition of the pandemic, we immediately adaptedvarious joint venture positions;
•leading negotiations of our strategic plans to focus on crisis-related priorities, which the Committee used to evaluate performance for the second halfacquisition of the year in lieu of reliance on the initial draft scorecard and personal goals establishedSeritage’s interest in the beginning of 2021. Performance objectives were establishedMS Portfolio joint venture; and •assistance and leadership in three categories: Liquidity, Operations, and Culture, and performance highlights in each of these categories are outlined below. | | | | | | | | LIQUIDITY
| | | | Rent Collections and Tenant Leasing Resolutions: We significantly improved rent collections during the year from approximately 35% for the period of the peak closure orders in April and May to approximately 94% in the fourth quarter. Of the approximately 200 national tenants in our portfolio, we received payment from and/or agreed to repayment terms for approximately 96% of those tenants, based on gross rent.
Progress on Renewing Line of Credit: Although we made progress on negotiations of a new line of credit prior to the commencement of the COVID-19 pandemic, we elected to exercise our one-year extension right on our existing line of credit in July of 2020 given the uncertainty arising out of the pandemic and the related government closure orders. We continued our negotiations with our lenders through the balance of 2020 and closed on a new line of credit in April 2021.
Paradise Valley Entitlements: We made significant progress on securing entitlements and in negotiating acquisitions from Dillards and Macy’s which allowed the closing of the sale of this asset in the first quarter of 2021.
Expense Reduction/Cost Containment:
• Preserved over $290 million of cash in 2020 through use of a stock dividend and dividend reductions.
• Preserved approximately $155 million of cash from reduced planned development and operating capital expenditures
• Preserved over $25 million of cash through reduced controllable operating expenses
• Negotiated deferrals of debt service payments on nineteen mortgage loans totaling $47 million Deferred real estate taxes to the extent such relief was available
| | | | | | | | | | | | | | OPERATIONS
| | | | Re-Open Centers: During the trough of the COVID-19 pandemic, all but a few of the Company’s malls had been forced to close pursuant to government orders, except for the continued operation of essential retail and services. Approximately 74% of the gross leasable area, which was occupied prior to the COVID-19 closures, had closed. Many of the stores that remained open did so on a limited-hours basis. Working diligently with local and national authorities, while prioritizing the health and safety of our employees, tenants, service providers, and shoppers, we were pleased to have our entire portfolio open and operational by the fourth quarter.
Occupancy: We established the goal of increasing average occupancy at all of the Company’s open malls to at least 80%. At December 31, 2020, portfolio-wide occupancy was 89.7%.
Tenant Bankruptcy Workouts: Tenant bankruptcies were at an all-time high in 2020, fueled by the COVID-19 pandemic. While several of these retailers were already on the path to restructurings and/or insolvency over the next several years, the crisis accelerated bankruptcies of dozens of retailers into 2020. The biggest bankruptcy of the year was JCPenney. Of our 27 JCPenney locations, only two closed, and we have an executed replacement lease for one location and a signed letter of intent for the other. Excluding JCPenney, 2020 bankruptcy filings included 41 tenants in 296 locations with a total of 2.1 million square feet. Eighteen of these tenant bankruptcies resulted in liquidation, and in total, 1 million square feet of leases were terminated as a result of bankruptcy lease rejections. Our leasing team, in partnership with asset management, oversaw the workout of the other 23 tenants, which resulted in securing 161 locations and 1.1 million square feet.
Significant Progress on 10-Year Portfolio Strategy: Completed initial phase of identifying properties as hold or sell, and candidates for redevelopment with a focus on use diversification and densification. Transaction timing and supporting capital plan is pending and cannot be effectively determined until the continued volatility and uncertainties posed by COVID-19 have dissipated and the capital markets have return to some semblance of normal.
| | | | | | | | | | |
2021 PROXY STATEMENT 43
transition to new CEO.
COMPENSATION DISCUSSION AND ANALYSIS
| | | | | | | | CULTURAL
| | | | Ensuring engagement and motivation of employees. Throughout the COVID-19 crisis, our leadership team kept the organization motivated with strong morale, including while working remotely, effectively harmonizing engagement across properties and regional offices. Highlights include:
• Retention of key talent during this very challenging year, with no layoffs or furloughs
• Most successful Whole Life Challenge™ in Company history, with 65% participation1
• Achievement of One Million Meals philanthropy challenge
• Development of diversity, equity and inclusion programming, referred to internally as the DREAM initiative
• Regular employee engagement programming, such as
• Video meetings with various operational teams with guest executive speakers
• Regular newsletters to our employee population
• Lunch and learn programs
• Events recognizing specific employee contributions
Community Outreach. During 2020, the Company engaged in numerous community initiatives, including
• Donating food and supplies to support first responders and hospitals
• Donating real estate for essential functions, drive-through testing facilities, first responder parking and food drives, drive by high school graduations
• Donating to local non-profit charities
• Making Company billboards and other media available for stay-at-home campaigns, healthy hygiene protocols and blood drives
• Donating iPads to hospitals for use by patients requiring connection to family and friends
| | | | | | | | | | |
The Committee evaluated the team’s overall performance against these strategic goals at 100% of target.
Summary of Resulting 2020 Earned Bonuses
Resulting 2020 Earned Bonuses: 75% of Target – Approximately 32-39% Reduction from 2019 Earned Bonuses
First Half Performance—weighted 50%. Performance was below threshold for the corporate performance metrics, resulting in 0 payout for 75% of the award. Based on each executive’s individual performance, as well as considering the team’s resilience and prompt response to the challenges created by the pandemic in the second quarter of 2020,these accomplishments for 2023, the Committee scored the individual performance category at maximum for all named executive officers, resulting in a 200% payout for 25% of the award. The resulting payout for the first half of the year was 50% of target; or 25%, on a time-weighted basis.
Second Half Performance—weighted 50%. The Compensation Committee evaluated the team’s performance against the second-half strategic goals on a holistic basis and determined performance was achieved at 100% of the target level, or 50%(50% of target on a time-weighted basis.
1 | The Whole Life Challenge™ is a six-week health and wellness challenge that we sponsor for employees.
|
44 2021weighted basis) for Mr. Coppola.
With respect to Mr. Kingsmore: His success in his role as Chief Financial Officer, including: •overseeing several refinancing transactions; •the recast of our credit facility; •working with various disciplines to increase FFO and same center NOI year-over-year; and •transition of various bottom guaranties to vertical slice guaranties due to change in IRS regulations. Based on these accomplishments for 2023, the Committee scored the individual performance category at 190% of target (47.5% of target on a weighted basis) for Mr. Kingsmore. With respect to Mr. Healey: His success in his role as Head of Leasing, including: •overseeing the negotiation of more than 839 leases totaling approximately 4.2 million square feet, representing the strongest leasing volume in the Company’s history; •achieving successful openings of 257 new stores, totaling over 900,000 square feet; •continue leasing momentum on non-retail uses, such as entertainment, food and beverage, experiential, fitness, medical and grocery, with over 45% of new leases signed in 2023 for uses other than retail; •increasing overall portfolio occupancy; •continuing to bring new tenants to our centers, with over 80 new brands totaling 95 stores and over 500,000 square feet; •maintaining a strong leasing pipeline for 2024 and 2025; •executing replacement leases or letters of intent for several high-profile properties; and •continued focus on leasing leadership structure, including training and mentorship programs as part of departmental succession planning. Based on these accomplishments for 2023, the Committee scored the individual performance category at 190% of target (47.5% of target on a weighted basis) for Mr. Healey. With respect to Ms. Menard: Her success in her role as Chief Legal Officer and Corporate Secretary, including: •taking a lead role in succession planning for CEO, including working closely with the search committee and the Board; •acting as an important liaison between the management team and the Board; •leadership in the structure and negotiations of various development, redevelopment, leasing and new business opportunities and transactions; •taking a lead role in critical negotiations with various joint venture partners; •continuing to have a substantial impact on Company culture by fostering interdepartmental communication and collaboration, mentoring future leaders and relationship building across all Company disciplines; and •activities with respect to ongoing legal matters. Based on these accomplishments for 2023, the Committee scored the individual performance category at 200% of target (50% of target on a weighted basis) for Ms. Menard.
COMPENSATION DISCUSSION AND ANALYSIS The resulting total bonuses for 2020 were 75% of target for each named executive officer.
The resulting earned bonuses for our named executive officers for 2020 were approximately 32-39% less than earned bonuses for 2019.
| | | | | | | | | | | | | | | | Name | | 2019 Bonus | | | 2020 Bonus | | | Percentage Reduction from 2019 | | | | | Thomas E. O’Hern | | | $1,812,000 | | | | $1,200,000 | | | ~34% | | | | | Edward C. Coppola | | | $1,952,000 | | | | $1,200,000 | | | ~39% | | | | | Scott W. Kingsmore | | | $ 549,000 | | | | $ 375,000 | | | ~32% | | | | | Douglas J. Healey | | | $ 610,000 | | | | $ 375,000 | | | ~39% | | | | | Kenneth L. Volk | | | $ 600,000 | | | | $ 375,000 | | | ~38% |
Our long-term equity-based incentive program is an important means to align the interests of our executives and our stockholders, to encourage our executives to adopt a longer-term perspective and to reward them for creating stockholder value in a pay-for-performance structure. 2020
2023 Long-Term Incentive Program
For 2020,2023, the Committee approved for each named executive officer an aggregate grant date fair value for these awards, which were granted on January 1, 20202023 in the form of LTIP Units. That amount was divided between two typesUnits (as defined below under “Accounting and Tax Issues — LTIP Units”).
For 2023, the Committee granted the same mix of performance-based and time-based LTIP Units as follows:for our 2022 grants, comprised of 75% performance-based LTIP Units for our CEO and President and 50% performance-based LTIP Units for each of our other named executive officers. Performance-Based LTIP Units. MayFor the performance-based LTIP Units granted in 2023, the Committee continued with the design change made in 2021 to better support our multi-year business strategies and align pay delivery with executive performance. The 2023 performance-based LTIPs may be earned from 0%0 to 150% of the target number of units awarded based on our performance versus three-year FFO per share goals (weighted 50%) and three-year Year-End Reported Occupancy goals (weighted 50%), with potential modification +/-20% based on our relative TSR versus the Equity Peer REITs. The Committee selected FFO per share and Year-End Reported Occupancy because it believes these are the most important drivers of long-term value creation. The relative TSR modifier ensures that the ultimate payout is aligned with our stockholder return performance relative to other retail REITs. All goals were established prior to the start of the performance period. FFO per Share Goals (weighted 50%): Performance will be measured for each year of the three-year performance period and on a cumulative basis, with weightings and goals as follows: | | | | | | | | | | | | | | | | | | | FFO per Share goals | | Year | Weighting | Threshold | Target | Maximum | Performance as of 12/31/2023 | | 2023 | 20 | % | $1.67 | | $1.85 | | $2.04 | | $1.80 | | | 2024 | 20 | % | $1.73 | | $1.92 | | $2.11 | | N/A | | 2025 | 20 | % | $1.80 | | $2.00 | | $2.20 | | N/A | | Cumulative 2023-2025 | 40 | % | $5.19 | | $5.77 | | $6.35 | | N/A | | Payout (% of Target LTIPs) | | 50 | % | 100 | % | 150 | % | |
No units will be earned for performance below threshold; payout is linearly interpolated for performance between levels
Year-End Reported Occupancy (weighted 50%): Performance will be measured for each year of the three-year performance period, with the third year weighted higher to represent the culmination of three years of performance. Weightings and goals are as follows: | | | | | | | | | | | | | | | | | | | Year-End Reported Occupancy Goals | | Year | Weighting | Threshold | Target | Maximum | Performance as of 12/31/2023 | | Year-End 2023 | 20 | % | 92.5 | % | 93.0 | % | 93.5 | % | 93.5 | % | | Year-End 2024 | 20 | % | 93.0 | % | 93.5 | % | 94.0 | % | N/A | | Year End 2025 | 60 | % | 93.5 | % | 94.0 | % | 94.5 | % | N/A | | Payout (% of Target LTIPs) | | 50 | % | 100 | % | 150 | % | N/A |
No units will be earned for performance below threshold; payout is linearly interpolated for performance between levels
COMPENSATION DISCUSSION AND ANALYSIS Relative TSR Modifier: The number of LTIP Units earned, if any, based on FFO per Share and Year-End Reported Occupancy will be modified up or down by up to 20% based on the Company’s relative TSR percentile rank versus the Equity Peer REITs at the conclusion of the full three-year performance period according to the following schedule:
| | | | | | | Macerich Relative TSR Ranking vs. Equity Peer REITs | Earned LTIP Modifier | <= 25th Percentile | -20% | 50th Percentile | 0% (no modification) | >=75th Percentile | +20% |
Modifier is linearly interpolated for performance between levels
Based on our performance as of December 31, 2023, approximately 142% of the target number of 2023 LTIP Units eligible to be earned based on FFO Per Share and Year-End Reported Occupancy for the period beginning January 1, 2023 and ending December 31, 2023 were earned, as modified upward by 20% based on our relative TSR ranking as of December 31, 2023, as though the cumulative performance period had ended on such date. Performance-based LTIP Units earned, if any, will vest at the end of the three-year period, but will be subject to a one-year, post-vesting “no sale” requirement.
The three-year performance period for our 2021 performance-based LTIP Unit awards is complete and the Company achieved three-year FFO per share between target and maximum for a percentage earned of 63.8% and achieved three-year Permanent Occupancy between threshold and target for a percentage earned of 11.3%. The Company’s TSR was 64% relative to the TSR for the Equity Peer REITs and this percentile ranking translated into a TSR 11.43% for the performance period beginning January 1, 2021 and ending December 31, 2023. Accordingly, 83.7% of the target 2021 performance-based LTIP Unit awards were earned for the three-year performance period from January 1, 2020 throughending December 31, 2022. Payouts, as a percentage of target units, for the performance-based2023. The LTIP Units for various levels of relative TSR performanceearned are outlinedincluded in the following table, with linear interpolation for performance between performance levels. | | | | | Macerich Relative TSR Raking vs. Peer REITs
| | Percentage of Target LTIP
Units That Vest* | | < 25th Percentile
| | | 0%
| | 25th Percentile
| | | 50%
| | 50th Percentile
| | | 100%
| | >=75th Percentile
| | | 150%
| |
* | Payout interpolated for performance between levels.
|
Seventy-five percent (75%) of the target annual LTIP grant value for our CEO“Option Exercises and President and fifty percent (50%) for the other named executive officers was granted in the form of performance-based LTIP Units.
2021 PROXY STATEMENT 45
Stock Vested — Fiscal 2023” below.
COMPENSATION DISCUSSION AND ANALYSIS
Service-Based LTIP Units. Vest in equal annual installments over a three-year period to promote retention and further alignment of our executives’interests with those of our stockholders. Twenty-five percent (25%) of the target LTIP grant value for our CEO and President and fifty percent (50%) for the other named executive officers was granted in the form of service-based LTIP Units. 2021 Long-Term Incentive Program
For 2021, the Committee granted the same mix of performance-based and time-based LTIP units as for our 2020 grants, i.e., 75% performance-based LTIP units for our CEO and President and 50% for other named executive officers. However, there were two primary changes to the 2021 long-term incentive program:
Target LTIP Unit grant values for the awards made January 1, 2021 for Mr. O’Hern and Coppola were reduced from the target values granted on January 1, 2020. Notwithstanding the terms of his letter agreement, Mr. O’Hern volunteered to reduce the size of his 2021 long-term incentive awards by $1,500,000. Similarly, Mr. Coppola volunteered to reduce the size of his 2021 long-term incentive award grant value by $600,000 from his typical award. Messrs. O’Hern and Coppola recommended that the Committee utilize those reductions to fund increased grants of LTIP units for the balance of the executive team in recognition of their efforts. The Committee accepted that recommendation.
The Committee changed the design of the performance-based LTIP component to better support our multi-year business strategies and align pay delivery with executive performance. The 2021 performance-based LTIPs may be earned from 0 to 150% of the target number of units awarded based on our performance versus three-year FFO per Share goals (weighted 50%) and three-year Permanent Occupancy goals (weighted 50%), with potential modification based on our relative TSR versus the Equity Peer REITs. The Committee selected FFO per Share and Permanent Occupancy because it believes these are the most important drivers of long-term value creation. All goals were established prior to the start of the performance period.
For the FFO per Share component, performance for each of 2021, 2022, and 2023 fiscal years will each be weighted 20% (60% total), and three-year cumulative FFO per share for the 2021-2023 performance period will be weighted 40%.
For the Permanent Occupancy component, year-end Permanent Occupancy for 2021, 2022, and 2023 will be weighted 20%, 20%, and 60%, respectively.
Macerich’s TSR performance relative tothe Equity Peer REITs for the three-year performance period from January 1, 2021 through December 31, 2023 may modify the number of LTIP units earned on the FFO per Share and Permanent Occupancy metrics. If the Company’s relative TSR is equal to or below the 25th percentile, the number of earned LTIP units will be reduced by 20%; if the Company’s relative TSR is equal to or greater than the 75th percentile, the number of earned LTIP units will be increased by 20%; if the Company’s relative TSR is between the 25th percentile and 75th percentile, the modifier will be interpolated (i.e., 50th percentile relative TSR results in no modification).
Executive Benefits Certain of our named executive officers participate in our deferred compensation plan available to all Vice Presidents and above who earn more than $120,000 annually. See the “Nonqualified Deferred Compensation” table on page 57 ofin this Proxy Statement for more information. We also provide our named executive officers with life insurance, medical and disability insurance, and use of a private aircraft in which our Company owns a fractional interest, to allow them to devote more time to our business. Refer to footnote 6(6) to the Summary Compensation Table on page 53 ofin this Proxy Statement for additional detail. Offer Letter with Mr. O’Hern
In connection with Thomas E. O’Hern’s election as Chief Executive Officer effective January 1, 2019, our Company entered into a letter agreement with Mr. O’Hern on April 26, 2018 that provides Mr. O’Hern with certain compensation and benefits during the period commencing April 26, 2018 and ending April 25, 2021 (the “Term”). During the Term, Mr. O’Hern’s annual base salary is $800,000 and his target annual bonus is equal to 200% of his annual base salary. The letter agreement provides that all or a portion of his annual bonuses payable in respect of fiscal years 2018, 2019 and 2020 may be paid in cash, fully vested LTIP Units, fully vested shares or a combination thereof as determined by the Compensation Committee of the Board of Directors, with such allocation subject to Mr. O’Hern’s consent. The letter agreement also specifies that Mr. O’Hern’s target long-term incentive grant value is $6,000,000 for each calendar year of the Term, with the allocation between performance-based and time-based awards, vesting provisions, and other terms the same as annual grants made to other executive officers. The letter agreement also provided Mr. O’Hern a one-time award of fully vested LTIP Units granted on April 26, 2018 with a grant date value of $5,000,000, 50% of which will be subject to repayment if Mr. O’Hern’s employment is terminated by the Company for cause or Mr. O’Hern resigns for any reason other than good reason on or prior to April 25, 2019.
46 2021 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS
Notwithstanding the terms of his letter agreement, Mr. O’Hern volunteered to reduce the size of his 2019 long-term incentive awards by $2,000,000 and such amount was instead used to fund an incentive bonus pool of $2,000,000 for other senior executives tied to same center growth and EBITDA margin growth. His January 1, 2020 grant was at the normal target level of $6,000,000. Notwithstanding the terms of his letter agreement, Mr. O’Hern volunteered to reduce the size of his January 1, 2021 LTIP Unit grant by $1,500,000.
Mr. O’Hern will also continue to participate in the Change in Control Severance Pay Plan for Senior Executives (as described below) during the Term. Upon a termination of Mr. O’Hern’s employment without cause or his resignation with good reason (other than in a circumstance that would entitle him to severance benefits under the Severance Plan for Senior Executives) during the Term, Mr. O’Hern would be entitled to receive: (a) a prorated annual bonus for the year of termination, based on actual performance, (b) an amount equal to (i) the sum of his base salary and the average of the three annual incentive bonuses awarded to him in respect of his service as Chief Executive Officer for the immediately preceding three years (or, if such termination occurred before the fiscal year 2018 bonus was payable, his target annual bonus, or, if one or two such bonuses have been awarded, the average of such bonuses) multiplied by (ii) the quotient of the number of days between his termination date and April 25, 2021, divided by 365, (c) a lump sum cash payment equal to the monthly COBRA continuation rate multiplied by 36, and (d) outplacement services for 12 months pursuant to our outplacement services for senior executives. In addition, the letter agreement provides that all long-term incentive awards granted to Mr. O’Hern shall vest upon the termination of his employment by the Company for no reason or for any reason other than for cause, termination of his employment for good reason or due to his death or disability on terms no less favorable to those contained in the award agreements for his LTIP Unit awards.
Severance Benefits On November 2, 2017, we adopted
The Macerich Company Change in Control Severance Pay Plan for Senior Executives, which we refer to aswas in effect during the “Severance Plan for Senior Executives,” which covers2023 calendar year, covered our Chief Executive Officer, President and other senior executive officers.officers (the “Prior CIC Plan”). Effective March 1, 2024, in order to enable our senior executive officers to remain focused on the requirements of the business in connection with the retirement of our Chief Executive Officer and our President, and in order to bring our severance program in line with the severance programs offered by our peer group, the Committee adopted the The Macerich Company Amended and Restated Severance Plan, for Senior Executives providesas further described below under “Potential Payments upon Termination or Change in Control” (the “2024 Severance Plan”). The Prior CIC Plan and the 2024 Severance Plan each provide specified payments and benefits in connection with a qualifying termination of employment following a “change in control” (as defined in the Prior CIC Plan and 2024 Severance Plan). In addition, the 2024 Severance Plan for Senior Executives).provides specified payments and benefits in connection with a qualifying termination outside the context of a change in control. Our goal in providing severance and change in control payments and benefits is to offer sufficient cash continuity protection such that our named executive officers will focus their full time and attention on the requirements of the business rather than potential implications for their respective positions. We prefer to have certainty regarding the potential severance amounts payable to our named executive officers following a change in control, rather than negotiating severance at the time that a named executive officer’s employment with us terminates. We have also determined that accelerated vesting provisions with respect to equity awards in connection with a termination related to a change in control of our Companycertain qualifying terminations are appropriate because they encourage our named executive officers to stay focused on the business in those circumstances, rather than focusing on the potential implications for them personally. For a description of our severance and change in control agreements with certain of our named executive officers, see “Potential Payments Upon Termination or Change in Control” below.
COMPENSATION DISCUSSION AND ANALYSIS Our Board believes that our directors and executive officers should have a meaningful investment in our Common Stock in order to more closely align their interests with those of our stockholders. Accordingly, our Board has established stock ownership policies for executives and non-employee directors.
Executive Stock Ownership Requirements. Executives must own Common Stock or any class(which may be combined with certain of our other equity securities or units of our OperatingPartnership as described below) with a value equal to at least the following multiples of their respective base salaries. | | | | | | Position | | Ownership Requirement as
Multiple of Base Salary | | Chief Executive Officer | | | 6x | | Other Named Executive Officers | | | 3x | |
Non-Employee Director Stock Ownership Requirements. Non-employee directors must own Common Stock or any class(which may be combined with certain of our other equity securities orunits of our Operating Partnership as described below) with a value equal to at least five times the annual cash retainer for Board service.2021 PROXY STATEMENT 47
COMPENSATION DISCUSSION AND ANALYSIS
Equity interests that count toward our stock ownership policies include:
•Shares owned directly or indirectly by the director or executive officer or by members of their immediate family residing in the same household; •Shares received pursuant to any of the Company’s equity plans, including restricted stock and phantom or other stock units, provided, however that performance-based shares shall not count toward the achievement of the guideline until the end of the applicable performance period, and only to the extent earned; •Shares held in trust for the benefit of the Director, Named Executive Officer or his or her immediate family residing in the same household; •Shares issuable upon redemption of units owned in the Company’s operating partnership, including service-based LTIP units and fully-vested and earned performance-based LTIP units; and •Shares held within a 401(k) Plan.
Until the required ownership level is achieved, executives and non-employee directors subject to the guidelines must retain at least 50% of net-after-tax profit shares from equity compensation awards. Net-after-tax profit shares are shares from vesting of equity grants and/or shares received upon exercise of stock options, net of shares tendered or withheld for payment of the exercise price and net of taxes. This retention requirement will also apply if an executiveexecutive’s or director becomes non-compliantdirector’s ownership falls below the required ownership level due to a reduction in stock price.
These policies also set forth the forms of equity interests in our Company which count toward stock ownership (any pledged securities do not count) and allow our Board to approve exceptions from time to time forfrom this stock ownership policy. Our policy further provides that a non-employee director who is prohibited by law or by the regulations of his or her employer from having an ownership interest in our Company’s securities shall be exempt. Refer to our Guidelines on Corporate Governance, which are posted on our website. All of our current directors and named executive officers that are subject to these stock ownership policies are in compliance with them. On October 26, 2022, the SEC adopted final rules implementing the incentive-based compensation recovery (“clawback”) provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). The final rules directed the stock exchanges to establish listing standards requiring listed companies to develop and implement a policy providing for the recovery of erroneously awarded incentive-based compensation received by current or former executive officers and to satisfy related disclosure obligations.
Effective October 2, 2023, our Company’s Board of Directors adopted a Compensation Recovery Policy (or “clawback policy”) that complies with applicable NYSE listing rules. The clawback policy that allows us to recover certain cash and equity incentive compensation paid to ourrequires recovery from executive officers if theof incentive-based compensation wasthat is earned, granted or vested based on achievingthe achievement of a financial resultsreporting measure in the event of a required restatement of previously issued financial statements. The recoverable compensation includes any compensation received after the effective date of the clawback policy and in the three-year fiscal period preceding the date our Company was required to prepare the restatement that were subsequently restated andis in excess of the amount of the executive officer’s incentive compensationthat would have been lowerreceived had it been calculated based on the restated financial statements. Recovery is required regardless of fault or a covered officer’s role in the financial resultsreporting process. The clawback policy has been properly reported.filed as an exhibit to our Annual Report on Form 10-K.
COMPENSATION DISCUSSION AND ANALYSIS The clawback policy is an amendment and restatement of the Company’s prior recoupment policy and such prior recoupment policy (as was in effect prior to such amendment and restatement) shall continue to apply with respect to compensation subject to the terms of such policy that is not subject to the terms of the current clawback policy. Anti-Hedging/Anti-Pledging Policy We have a policy prohibiting all of our directors, officers and employees from engaging in any hedging or monetization transactions that are designed to hedge or offset any decrease in the market value of our securities. This policy also prohibits short sales and the purchase and sale of publicly traded options of our Company. In addition, we have a policy (a) prohibiting all our directors and executive officers from pledging our securities if they are unable to meet our stock ownership requirements without reference to such pledged shares and (b) recommending that our directors and executive officers not pledge our securities. Currently, based on information provided by our directors and officers, no shares of our Company are pledged by our directors and executive officers.any of them. Accounting and Tax Issues The Committee considers both the accounting and tax issues raised by the various compensation elements for our Company and our executives.
LTIP Units.Units. As described on pages 54-55 ofin this Proxy Statement, LTIP Units of our Operating Partnership are intended to qualify as “profits interests” for federal income tax purposes and as such initially do not have full parity, on a per unit basis, with our common OP Units with respect to liquidating distributions. Such parity can be achieved over time through priority allocations of “book-up“book-up gains” attributable to appreciation of the Operating Partnership’s assets. LTIP Units, regardless of when they were issued, are eligible to share in allocable “book-up“book-up gains” since the most recent book-up or book-down of the limited partners’ capital accounts.Tax Deductibility of Compensation Expense. Generally, Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), disallows a federal income tax deduction for public corporations of remuneration in excess of $1 million paid in any fiscal year to certain specified executive officers or former executive officers. For taxable years beginning before January 1, 2018 (i) these executive officers consisted of a public corporation’s chief executive officer and up to three other executive officers (other than the chief financial officer) whose compensation is required to be disclosed to stockholders under the Exchange Act because they are our most highly-compensated executive officers and (ii) qualifying “performance-based compensation” was not subject to this deduction limit if specified requirements are met.
Pursuant to the Tax Cuts and Jobs Act of 2017, which was signed into law on December 22, 2017, for taxable years beginning after December 31, 2017, the remuneration of a public corporation’s chief financial officer is also subject to the deduction limit and anyone who was a named executive officer in any year after 2016 will remain a covered employee for as long as he or she (or his or her beneficiaries) receives compensation from the company. In addition, subject to certain transition rules (which apply to remuneration provided pursuant to written binding contracts which were in effect on November 2, 2017 and which are not subsequently modified in any material respect), for taxable years beginning after December 31, 2017, the exemption from the deduction limit for “performance-based compensation” is no longer available. Consequently, for fiscal years beginning after December 31, 2017, all remuneration in excess of $1 million paid to a specified executive will not be deductible.
48 2021 PROXY STATEMENT
COMPENSATION DISCUSSION AND ANALYSIS
In designing our executive compensation program and determining the compensation of our executive officers, including our named executive officers, the Compensation Committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. However, the Compensation Committee will not necessarily limit executive compensation to that which is or may be deductible under Section 162(m). The deductibility of some types of compensation depends upon the timing of an executive officer’s vesting or exercise of previously granted rights. Further, interpretations of, and changes in, the tax laws, and other factors beyond the Compensation Committee’s control also affect the deductibility of compensation. The Compensation Committee will consider various alternatives to preserving the deductibility of compensation payments and benefits to the extent consistent with its compensation goals.
To maintain flexibility to compensate our executive officers in a manner designed to promote our short-term and long-term goals, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes that our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expense.
Section 409A of the Code imposes additional significant taxes in the event that an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A of the Code. In addition to traditional nonqualified deferred compensation plans, Section 409A of the Code applies to certain severance arrangements, bonus arrangements and equity awards. WeOur intent is to structure all our nonqualified deferred compensation plans, severance arrangements, bonus arrangements and equity awards in a manner to either avoid the application of Section 409A or, to the extent doing so is not possible, to comply with the applicable requirements of Section 409A of the Code. 2021
44 2024 PROXY STATEMENT49
EXECUTIVE COMPENSATION TABLES
The following table and accompanying notes show for our Chief Executive Officer, our Chief Financial Officer and our three most highly compensated executive officers, as of December 31, 2020,2023, the aggregate compensation paid, awarded or earned with respect to such persons in the years indicated.
SUMMARY COMPENSATION TABLE—FISCAL YEARS 2018-2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | | Salary
($)(1) | | | Bonus
($)(2)(3) | | | Stock
Awards
($)(2)(3)(4) | | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)(5) | | | All Other
Compensation
($)(6) | | | Total
($) | | | | | | | | | | Thomas E. O’Hern | | | 2020 | | | | 800,000 | | | | 1,200,000 | | | | 5,999,968 | | | | — | | | | 376,030 | | | | 8,375,998 | | Chief Executive Officer | | | 2019 | | | | 800,000 | | | | 1,812,000 | | | | 3,999,981 | | | | — | | | | 326,068 | | | | 6,938,049 | | | | | | 2018 | | | | 728,462 | (7) | | | 750,000 | | | | 7,794,571 | | | | — | | | | 82,494 | | | | 9,355,527 | | | | | | | | | | Edward C. Coppola | | | 2020 | | | | 800,000 | | | | 1,200,000 | | | | 3,599,981 | | | | — | | | | 265,909 | | | | 5,865,890 | | President | | | 2019 | | | | 800,000 | | | | 1,952,000 | | | | 3,599,944 | | | | — | | | | 207,454 | | | | 6,559,398 | | | | | | 2018 | | | | 800,000 | | | | 750,000 | | | | 4,916,689 | | | | — | | | | 141,985 | | | | 6,608,674 | | | | | | | | | | Scott W. Kingsmore(8) | | | 2020 | | | | 500,000 | | | | 375,000 | | | | 749,990 | | | | — | | | | 127,165 | | | | 1,752,155 | | Senior Executive Vice President, Chief
Financial Officer and Treasurer | | | 2019 | | | | 443,654 | | | | 549,000 | | | | 918,710 | | | | — | | | | 145,381 | | | | 2,056,745 | | | | | | | | | | Douglas J. Healey | | | 2020 | | | | 500,000 | | | | 375,000 | | | | 749,990 | | | | — | | | | 119,566 | | | | 1,744,556 | | Senior Executive Vice President, | | | 2019 | | | | 497,885 | (9) | | | 610,000 | | | | 1,087,433 | | | | — | | | | 99,074 | | | | 2,294,392 | | Head of Leasing | | | 2018 | | | | 450,000 | | | | 225,000 | | | | 286,875 | | | | — | | | | 20,398 | | | | 982,273 | | | | | | | | | | Kenneth L. Volk(10) | | | 2020 | | | | 500,000 | | | | 375,000 | | | | 749,990 | | | | — | | | | 95,964 | | | | 1,720,954 | | Executive Vice President, | | | 2019 | | | | 495,769 | | | | 600,000 | | | | 974,957 | | | | — | | | | 152,101 | | | | 2,222,827 | | Business Development | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Includes any amount of salary deferred under our qualified and nonqualified deferred compensation plans. See the “Nonqualified Deferred Compensation – Fiscal 2020” table below for more information.
|
(2) | SEC Reporting of Cash and Equity Awards
|
| In reviewing the Summary Compensation Table, it is important to note that under SEC rules, cash incentive awards are generally reported in the table for the year that they are earned regardless of when they are paid, while equity awards are generally reported in the table for the year that they are granted (as determined in accordance with applicable accounting rules) regardless of when they are earned.
|
(3) | 2021-2023 | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | Year | Salary ($)(1) | Bonus ($)(2)(3) | Stock Awards ($)(2)(3)(4) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(5) | All Other Compensation ($)(6) | Total ($) | | | | | | | | | | | | Thomas E. O’Hern | 2023 | 850,000 | | | 2,890,000 | | 5,999,983 | | — | | 85,726 | | 9,825,709 | | Former Chief Executive Officer(9) | 2022 | 850,000 | | | 1,939,700 | | 5,999,975 | | — | | 79,717 | | 8,869,392 | | | 2021 | 827,692 | | (7) | 2,844,000 | | 4,499,985 | | — | | 74,702 | | 8,246,379 | | | | | | | | | | | | Edward C. Coppola | 2023 | 800,000 | | | 2,720,000 | | 3,599,980 | | — | | 86,740 | | 7,206,720 | | Former President(9) | 2022 | 800,000 | | | 1,825,600 | | 3,599,991 | | — | | 73,136 | | 6,298,727 | | | 2021 | 800,000 | | | 2,740,000 | | 2,999,990 | | — | | 58,559 | | 6,598,549 | | | | | | | | | | | | Scott W. Kingsmore | 2023 | 517,260 | | (8) | 1,237,500 | | 1,299,989 | | — | | 73,504 | | 3,128,253 | | | Senior Executive Vice President, Chief Financial Officer and Treasurer | 2022 | 500,000 | | | 633,000 | | 1,299,979 | | — | | 77,649 | | 2,510,628 | | | 2021 | 500,000 | | | 885,000 | | 949,993 | | — | | 61,264 | | 2,396,257 | | | | | | | | | | | | Douglas J. Healey | 2023 | 517,260 | | (8) | 1,237,500 | | 1,099,987 | | — | | 29,064 | | 2,883,811 | | | Senior Executive Vice President, Head of Leasing | 2022 | 500,000 | | | 633,000 | | 1,099,983 | | — | | 22,541 | | 2,255,524 | | | 2021 | 500,000 | | | 900,000 | | 949,993 | | — | | 21,697 | | 2,371,690 | | | | | | | | | | | | Ann C. Menard | 2023 | 517,260 | | (8) | 1,275,000 | | 1,099,987 | | — | | 58,704 | | 2,950,951 | | | Senior Executive Vice President, Chief Legal Officer and Secretary | 2022 | 500,000 | | | 633,000 | | 1,099,983 | | — | | 71,611 | | 2,304,594 | | | 2021 | 500,000 | | | 885,000 | | 949,993 | | — | | 36,095 | | 2,371,088 | |
(1)Includes any amount of salary deferred under our qualified and nonqualified deferred compensation plans. See the “Nonqualified Deferred Compensation – Fiscal 2023” table below for more information. (2)SEC Reporting of Cash and Equity Awards In reviewing the Summary Compensation Table, it is important to note that under SEC rules, cash incentive awards are generally reported in the table for the year that they are earned regardless of when they are paid, while equity awards are generally reported in the table for the year that they are granted (as determined in accordance with applicable accounting rules) regardless of when they are earned. (3)Bonuses Reported in Year 2023 As described in the Compensation Discussion and Analysis above, the annual incentive compensation awards for 2023 performance were paid in cash on February 22, 2024. Under SEC rules, cash incentive awards are reported in the Summary Compensation Table for the year that they are earned, regardless of when they are paid. Accordingly, the cash bonuses paid for 2023 performance are reported in the “Bonus” column for 2023. These cash bonuses were paid in 2024 and were the only incentive awards granted in cash or equity to each named executive officer for their 2023 performance. Bonuses Reported in Year 2022 The annual incentive compensation awards for 2022 performance were paid in cash in February 2023. These cash bonuses were paid in 2023 and were the only incentive awards granted in cash or equity to each named executive officer for their 2022 performance. Bonuses Reported in Year 2020 |
| As described in the Compensation Discussion and Analysis above, the annual incentive compensation awards for 2020 performance were paid in cash in March 2021. Under SEC rules, cash incentive awards are reported in the Summary Compensation Table for the year that they are earned, regardless of when they are paid. Accordingly, the cash bonuses paid for 2020 performance are reported in the “Bonus” column for 2020. These cash bonuses were paid in 2021 and were the only incentive awards granted in cash or equity to each named executive officer for their 2020 performance.
|
| Bonuses Reported in Year 2019
|
| The annual incentive compensation awards for 2019 performance were paid in cash in March 2020. These cash bonuses were paid in 2020 and were the only incentive awards granted in cash or equity to each named executive officer for their 2019 performance. As described below, the amount in the “Stock Awards” column for 2019 reflects the grant date fair value of a portion of the equity incentive awards granted in March 2019 for Messrs. Kingsmore, Healey and Volk’s performance in 2018.
|
| Stock Award Reported in Year 2019
|
| Messrs. Kingsmore, Healey and Volk. Pursuant to our Restricted Stock/Stock Unit/LTIP Unit Bonus Program, participants, including Messrs. Kingsmore, Healey and Volk, were offered the opportunity to elect to receive up to 50% of their cash bonus in the form of an equity award that vests over three years. Subject to certain conditions, if a participant timely elected to receive an equity award instead of cash, he or she received an equity award that has a market value (not considering the effect of vesting restrictions) as of the date of the award equal to 1.5 times the amount he or she would otherwise have received in cash. Messrs. Kingsmore, Healey and Volk elected in advance to participate in the Restricted Stock/Stock Unit/LTIP
|
50 2021
The annual incentive compensation awards for 2021 performance were paid in cash in February 2022. These cash bonuses were paid in 2022 and were the only incentive awards granted in cash or equity to each named executive officer for their 2021 performance. (4)Stock Awards Reported in Year 2023 The amounts reflected in this column for 2023 relate to performance-based LTIP Units and service-based LTIP Units granted in 2023 under our LTIP and 2003 Incentive Plan. These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.
EXECUTIVE COMPENSATION TABLES
a.Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of theperformance conditions as of the grant date were as follows: | | | | | | | Thomas E. O’Hern | Unit Bonus Program and therefore received equity in lieu of 50% of their incentive cash bonus for 2018 performance. The equity award was granted to Messrs.$4,499,993 | | | Edward C. Coppola | $2,699,991 | | | Scott W. Kingsmore | $649,994 | | Douglas J. Healey and Volk on March 8, 2019 for 2018 performance and was in the form of a stock unit award that vests over three years. See also footnote (4) below. | $549,992 | | | Ann C. Menard | $549,992 | |
The actual value with respect to our 2023 annual performance-based LTIP unit awards is contingent upon our performance over a three-year measurement period that will end on December 31, 2025. Assuming that maximum performance is achieved under our 2023 annual performance-based LTIP Units awards, the value at the grant date of the awards would each have been as follows: Mr. O’Hern —$6,749,990; Mr. Coppola—$4,049,987; Mr. Kingsmore—$974,991; Mr. Healey—$824,988 and Ms. Menard—$824,988, respectively.
b.Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows: | | | | | | | Thomas E. O’Hern | Bonus and Stock Award Reported in Year 2018
$1,499,990 | | | Edward C. Coppola | $899,989 | | | Scott W. Kingsmore | $649,995 | | | Douglas J. Healey | $549,995 | | | Ann C. Menard | $549,995 | |
Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 26, 2024.
Stock Awards Reported in Year 2022 The amounts reflected in this column for 2022 relate to performance-based LTIP Units and service-based LTIP Units granted in 2022 under our LTIP and 2003 Incentive Plan. These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. a.Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of theperformance conditions as of the grant date were as follows: | | | | | | | Thomas E. O’Hern | Messrs. O’Hern and Coppola. The annual incentive compensation awards for 2018 performance were paid in cash in March 2019. Accordingly, the cash bonuses paid for 2018 performance are reported in the “Bonus” column for 2018. These cash bonuses were paid in 2019 and were the only incentive awards granted in cash or equity to Messrs. O’Hern and$4,499,985
| | Edward C. Coppola for their 2018 performance. | $2,699,997 | | | Scott W. Kingsmore | $649,992 | | | Douglas J. Healey | $549,995 | | | Ann C. Menard | $549,995 | |
The actual value with respect to our 2022 annual performance-based LTIP unit awards is contingent upon operational metrics of FFO per share and reported occupancy, with a potential modification based on our total stockholder return relative to the total stockholder return of our Peer REITs over a three-year measurement period that will end on December 31, 2024. Assuming that maximum performance is achieved under our 2022 annual performance-based LTIP Units awards, the value at the grant date of the awards would each have been as follows: Mr. O’Hern —$6,749,978; Mr. Coppola—$4,049,996; Mr. Kingsmore—$974,988; Mr. Healey—$824,993 and Ms. Menard—$824,993, respectively. b.Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows: | | | | | | | Thomas E. O’Hern | Mr. Healey. As described above, Mr.$1,499,990
| | | Edward C. Coppola | $899,994 | | | Scott W. Kingsmore | $649,987 | | Douglas J. Healey was offered the opportunity to elect to receive up to 50% of his cash bonus in the form of an equity award that vests over three years. Mr. Healey elected in advance to participate in the Restricted Stock/Stock Unit/LTIP Unit Bonus Program and therefore received equity in lieu of 50% of his incentive cash bonus for 2018 performance. The “Bonus” column for 2018 for Mr. Healey shows the amount of the incentive bonus awarded for his 2018 performance that was paid in cash. The amount in the “Stock Awards” column for 2018 reflects the grant date fair value of a portion of the equity annual incentive award granted in March 2018 for Mr. Healey’s performance in 2017. See also footnote (4) below. | $549,988 | | | Ann C. Menard | $549,988 | |
Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2023. Stock Awards Reported in Year 2021 The amounts reflected in this column for 2021 relate to performance-based LTIP Units and service-based LTIP Units granted in 2021 under our LTIP and 2003 Incentive Plan. These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.
EXECUTIVE COMPENSATION TABLES a.Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of theperformance conditions as of the grant date were as follows: | (4) | | | | | | Thomas E. O’Hern | Stock Awards Reported in Year 2020
$3,374,994 | | | Edward C. Coppola | $2,249,996 | | | Scott W. Kingsmore | $474,997 | | | Douglas J. Healey | $474,997 | | | Ann C. Menard | $474,997 | |
The actual value with respect to our 2021 annual performance-based LTIP unit awards is contingent upon operational metrics of FFO per share and permanent occupancy, with a potential modification based on our total stockholder return relative to the total stockholder return of our Peer REITs over a three-year measurement period that ended on December 31, 2023. Assuming that maximum performance is achieved under our 2021 annual performance-based LTIP Units awards, the value at the grant date of the awards would each have been as follows: Mr. O’Hern —$5,062,491; Mr. Coppola—$3,374,994; Mr. Kingsmore—$712,496; Mr. Healey—$712,496 and Ms. Menard—$712,496, respectively. b.Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows: | | | | | | | Thomas E. O’Hern | The amounts reflected in this column for 2020 relate to performance-based LTIP Units and service-based LTIP Units granted in 2020 under our LTIP and 2003 Incentive Plan. These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.
$1,124,991 | | | Edward C. Coppola | $749,994 | | | Scott W. Kingsmore | $474,996 | | | Douglas J. Healey | $474,996 | | | Ann C. Menard | $474,996 | |
| a. | Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of the performance conditions as of the grant date were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 4,499,986 | | Edward C. Coppola | | $ | 2,699,992 | | Scott W. Kingsmore | | $ | 374,994 | | Douglas J. Healey | | $ | 374,994 | | Kenneth L. Volk | | $ | 374,994 | |
| | The actual value with respect to our 2020 annual performance-based LTIP unit awards is contingent upon our total stockholder return relative to the total stockholder return of our Peer REITs over a three-year measurement period that will end on December 31, 2022. Assuming that maximum performance is achieved under our 2020 annual performance-based LTIP Units awards, the value at the grant date of the awards would each have been as follows: Mr. O’Hern—$6,749,979; Mr. Coppola—$4,049,988; Mr. Kingsmore—$562,491; Mr. Healey—$562,491 and Mr. Volk—$562,491, respectively.
|
| b. | Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 1,499,982 | | Edward C. Coppola | | $ | 899,989 | | Scott W. Kingsmore | | $ | 374,996 | | Douglas J. Healey | | $ | 374,996 | | Kenneth L. Volk | | $ | 374,996 | |
| Assumptions used in the calculation of these amounts are set forth in footnote 20
Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2021. |
| Stock Awards Reported in Year 2019
|
| The amounts reflected in this column for 2019 relate to performance-based LTIP Units and service-based LTIP Units granted in 2019 under our LTIP and 2003 Incentive Plan. For Messrs. Kingsmore, Healey and Volk, the amount reported also reflects the grant date fair value of a portion of the equity annual incentive award granted in March 2019 for their performance in 2018, which was in the form of a stock unit award that vests over three years (see also footnote (2) above). These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.
|
2021 included in our Annual Report on Form 10-K filed with the SEC on February 25, 2022. (5)None of the earnings on the deferred compensation of our named executive officers for 2023 were considered above-market or preferential as determined under SEC rules. (6)“All Other Compensation” includes the following components for 2023: | | | | | | | | | | | | | | | | | | | Matching Contributions under 401(k) Plan $ | Matching Contributions under Nonqualified Deferred Compensation Plan $ | Life Insurance Premiums $ | Other Welfare Benefit Premiums $ | Use of Private Aircraft $ | | Thomas E. O’Hern | 13,200 | | 25,500 | | 5,400 | | 41,626 | | — | | | Edward C. Coppola | 13,200 | | — | | 7,158 | | 34,301 | | 32,081 | | | Scott W. Kingsmore | 13,200 | | 34,452 | | 1,080 | | 24,772 | | — | | | Douglas J. Healey | 13,200 | | — | | 1,568 | | 14,296 | | — | | | Ann C. Menard | 13,200 | | 26,213 | | 1,576 | | 17,715 | | — | |
Matching Contributions. Amounts shown include matching deferred compensation contributions by our Company as determined by our Board of Directors annuallyunder our nonqualified deferred compensation plan and matching contributions by our Company under our 401(k) Plan. The amount of the matching contributions under these plans is determined in the same manner for all plan participants. See the “Nonqualified Deferred Compensation – Fiscal 2023” table below. Other Welfare Benefit Premiums. Amounts shown reflect the premiums paid by our Company for medical and disability insurance. Private Aircraft Use. Amount shown reflects the incremental cost to our Company of such executive’s personal use of a private aircraft in which our Company owns afractional interest. The incremental cost is determined by using the amount our Company is billed for such use less the portion reimbursed by the executives and such amount may include: landing fees, parking and flight planning expenses; crew travel expenses; supplies and catering; aircraft fuel and oil expenses; maintenance, parts and external labor (inspections and repairs); engine insurance expenses; position flight costs; and passenger ground transportation. Since the aircraft is used primarily for business travel, our Company does not include the fixed costs that do not change based on usage, such as management fees and acquisition costs. (7)Mr. O’Hern’s base salary increased to $850,000 effective June 8, 2021. (8)Messrs. Kingsmore and Healey and Ms. Menard’s base salaries each increased to $600,000 effective October 30, 2023. (9)Mr. O’Hern and Mr. Coppola each retired from our Company effective February 29, 2024.
2024 PROXY STATEMENT 5147
EXECUTIVE COMPENSATION TABLES | a. | Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of the performance conditions as of the grant date were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 2,999,997 | | Edward C. Coppola | | $ | 2,699,997 | | Scott W. Kingsmore | | $ | 337,487 | | Douglas J. Healey | | $ | 374,985 | | Kenneth L. Volk | | $ | 374,985 | |
| b. | Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 999,984 | | Edward C. Coppola | | $ | 899,964 | | Scott W. Kingsmore | | $ | 337,497 | | Douglas J. Healey | | $ | 374,978 | | Kenneth L. Volk | | $ | 374,978 | |
| c. | Restricted Stock Units. The aggregate grant date fair value for restricted stock unit award, which represents 50% of Messrs. Kingsmore, Healey and Volk’s annual incentive award earned for 2018 performance was as follows:
|
| | | | | Scott W. Kingsmore | | $ | 243,726 | | Douglas J. Healey | | $ | 337,470 | | Kenneth L. Volk | | $ | 224,994 | |
| Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2019 included in our Annual Report on Form 10-K filed with the SEC on February 25, 2020.
|
| Stock Awards Reported in Year 2018
|
| The amounts reflected in this column for 2018 for Messrs. O’Hern and Coppola relate to performance-based LTIP Units, service-based LTIP Units and fully-vested LTIP Units granted in 2018 under our LTIP and 2003 Incentive Plan. For Mr. Healey, the amount reported reflects the grant date fair value of a portion of the equity annual incentive award granted in March 2018 for Mr. Healey’s performance in 2017, which was in the form of a stock unit award that vests over three years (see also footnote (2) above). These amounts represent the value at the grant date computed in accordance with FASB ASC Topic 718, disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions.
|
| a. | Performance-Based LTIP Units. The aggregate grant date fair values for performance-based LTIP Unit awards based upon the probable outcome of the performance conditions as of the grant date were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 1,499,985 | | Edward C. Coppola | | $ | 2,699,973 | |
| b. | Service-Based LTIP Units. The grant date fair values for service-based LTIP Unit awards were as follows:
|
| | | | | Thomas E. O’Hern | | $ | 499,956 | | Edward C. Coppola | | $ | 899,947 | |
| c. | Fully-Vested LTIP Units. The grant date fair values for fully-vested LTIP Unit awards represent each named executive officer’s, other than Mr. Healey’s, annual incentive award earned for 2017 performance. In addition, for Mr. O’Hern, the amount reported below includes the value of the one-time award of fully-vested LTIP Units awarded to him in connection with his promotion to the Chief Executive Officer position and in accordance with the terms of his offer letter, as discussed in more detail in the Compensation Discussion and Analysis.
|
| | | | | Thomas E. O’Hern | | $ | 5,794,630 | | Edward C. Coppola | | $ | 1,316,769 | |
52 2021 PROXY STATEMENT
EXECUTIVE COMPENSATION TABLES
| d. | Restricted Stock Units. The aggregate grant date fair value for restricted stock unit award, which represents 50% of Mr. Healey’s annual incentive award earned for 2017 performance was as follows:
|
| | | | | Douglas J. Healey | | $ | 286,875 | |
| Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the SEC on February 25, 2019.
|
(5) | None of the earnings on the deferred compensation of our named executive officers for 2020 were considered above-market or preferential as determined under SEC rules.
|
(6) | “All Other Compensation” includes the following components for 2020:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | Matching
Contributions
under
401(k) Plan
$ | | | Matching
Contributions
under
Nonqualified
Deferred
Compensation
Plan
$ | | | Life
Insurance
Premiums
$ | | | Other
Welfare
Benefit
Premiums
$ | | | Use of
Private
Aircraft
$ | | | Personal
Days Payout
$ | | Thomas E. O’Hern | | | 11,400 | | | | 120,785 | | | | 3,572 | | | | 34,117 | | | | — | | | | 206,156 | | Edward C. Coppola | | | 11,400 | | | | — | | | | 5,202 | | | | 28,192 | | | | 14,959 | | | | 206,156 | | Scott W. Kingsmore | | | 11,400 | | | | 43,837 | | | | 867 | | | | 22,599 | | | | — | | | | 48,462 | | Douglas J. Healey | | | 11,400 | | | | — | | | | 1,207 | | | | 8,884 | | | | — | | | | 98,075 | | Kenneth L. Volk | | | 11,400 | | | | 30,000 | | | | 1,191 | | | | 22,604 | | | | — | | | | 30,769 | |
| Matching Contributions. Amounts shown include matching deferred compensation contributions by our Company as determined by our Board of Directors annually under our nonqualified deferred compensation plan and matching contributions by our Company under our 401(k) Plan. The amount of the matching contributions under these plans is determined in the same manner for all plan participants. See the “Nonqualified Deferred Compensation – Fiscal 2020” table below.
|
| Other Welfare Benefit Premiums. Amounts shown reflect the premiums paid by our Company for medical and disability insurance.
|
| Private Aircraft Use. Amount shown reflects the incremental cost to our Company of such executive’s personal use of a private aircraft in which our Company owns a fractional interest. The incremental cost is determined by using the amount our Company is billed for such use less the portion reimbursed by the executives and such amount may include: landing fees, parking and flight planning expenses; crew travel expenses; supplies and catering; aircraft fuel and oil expenses; maintenance, parts and external labor (inspections and repairs); engine insurance expenses; position flight costs; and passenger ground transportation. Since the aircraft is used primarily for business travel, our Company does not include the fixed costs that do not change based on usage, such as management fees and acquisition costs.
|
| Personal Time Payout. The amounts shown reflect one-time payments made for accrued but unused personal days in connection with the elimination of defined paid vacation and personal days for Vice Presidents and above. From January 1, 2020 forward, vacation and personal time ceased to accrue for approximately 100 employees; the benefit costs for these employees will no longer be an expense on the Company’s financial statements.
|
(7) | Mr. O’Hern’s base salary increased to $800,000 effective April 26, 2018.
|
(8) | Mr. Kingsmore was not a NEO in 2018, so compensation for 2018 is not included.
|
(9) | Mr. Healey’s base salary increased to $500,000 effective January 1, 2019.
|
(10) | Mr. Volk was not a NEO in 2018, so compensation for 2018 is not included.
|
2021 PROXY STATEMENT 53
EXECUTIVE COMPENSATION TABLES
GRANTS OF PLAN-BASED AWARDS—FISCAL 2020 2023 The following table provides information regarding performance-based LTIP Units, service-based LTIP Units and stock units granted to our named executive officers in 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimate Future Payouts
Under Equity Incentive
Plan Awards (1) | | | All Other Stock
Awards: Number
of Shares of Stock
or Units
(#) | | | Grant Date Fair
Value of Stock
and Option
Awards
($)(2) | | Name | | Grant
Date | | | Approval
Date | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | | | | | | | | Thomas E. O’Hern | | | 1/1/2020 | | | | 12/16/2019 | | | | 80,935 | | | | 161,870 | | | | 242,805 | | | | — | | | | 4,499,986 | | | | | | 1/1/2020 | | | | 12/16/2019 | | | | — | | | | — | | | | — | | | | 55,720 | (3) | | | 1,499,982 | | | | | | | | | | Edward C. Coppola | | | 1/1/2020 | | | | 12/16/2019 | | | | 48,561 | | | | 97,122 | | | | 145,683 | | | | — | | | | 2,699,992 | | | | | | 1/1/2020 | | | | 12/16/2019 | | | | — | | | | — | | | | — | | | | 33,432 | (3) | | | 899,989 | | | | | | | | | | Scott W. Kingsmore | | | 1/1/2020 | | | | 12/16/2019 | | | | 6,744 | | | | 13,489 | | | | 20,233 | | | | — | | | | 374,994 | | | | | 1/1/2020 | | | | 12/16/2019 | | | | — | | | | — | | | | — | | | | 13,930 | (3) | | | 374,996 | | Douglas J. Healey | | | 1/1/2020 | | | | 12/16/2019 | | | | 6,744 | | | | 13,489 | | | | 20,233 | | | | — | | | | 374,994 | | | | | | | | | | | | | 1/1/2020 | | | | 12/16/2019 | | | | — | | | | — | | | | — | | | | 13,930 | (3) | | | 374,996 | | Kenneth L. Volk | | | 1/1/2020 | | | | 12/16/2019 | | | | 6,744 | | | | 13,489 | | | | 20,233 | | | | — | | | | 374,994 | | | | | | 1/1/2020 | | | | 12/16/2019 | | | | — | | | | — | | | | — | | | | 13,930 | (3) | | | 374,996 | |
(1) | Represents awards of performance-based LTIP Units granted under our LTIP and 2003 Incentive Plan as more fully described on pages 54-55 of this Proxy Statement. Performance will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2020 through December 31, 2022. The number of LTIP Units reported under the “Threshold (#)” subcolumn represents the number of LTIP Units that would be awarded if our performance relative to our Equity Peer REITs was at the 25th percentile, which represents the minimum percentile rank that would entitle recipients to awards under the LTIP. The number of LTIP Units reported under the “Target (#)” subcolumn represents the number of LTIP Units that would be awarded if our performance relative to our Equity Peer REITs was at the 50th percentile. The number of LTIP Units reported under the “Maximum (#)” subcolumn represents the number of LTIP Units that would be awarded if our performance relative to our Equity Peer REITs was at or above the 75th percentile.
|
(2) | The amounts reflected in this column represent the grant date fair value of these awards computed in accordance with FASB ASC Topic 718 as described in note (4) to the “Summary Compensation Table” above. Assumptions used in the calculation of these amounts are set forth in footnote 20 to our audited financial statements for the fiscal year ended December 31, 2020 included in our Annual Report on Form 10-K filed with the SEC on February 24, 2021.
|
(3) | Represents awards of service-based LTIP Units granted under our LTIP and 2003 Incentive Plan as more fully described on pages 54-55 of this Proxy Statement.
|
2023. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimate Future Payouts Under Equity Incentive Plan Awards (1) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(2) | | Name | Grant
Date | Approval
Date | Threshold
(#) | Target
(#) | Maximum
(#) | | | | | | | | | | | | Thomas E. O’Hern | 1/1/2023 | 12/21/2022 | 164,084 | 410,209 | 738,376 | — | | 4,499,993 | | 1/1/2023 | 12/21/2022 | — | — | — | 133,214 | (3) | 1,499,990 | | | | | | | | | | | | Edward C. Coppola | 1/1/2023 | 12/21/2022 | 98,450 | 246,125 | 443,025 | — | | 2,699,991 | | 1/1/2023 | 12/21/2022 | — | — | — | 79,928 | (3) | 899,989 | | | | | | | | | | | | Scott W. Kingsmore | 1/1/2023 | 12/21/2022 | 23,701 | 59,252 | 106,654 | — | | 649,994 | | 1/1/2023 | 12/21/2022 | — | — | — | 57,726 | (3) | 649,995 | | | | | | | | | | | | Douglas J. Healey | 1/1/2023 | 12/21/2022 | 20,054 | 50,136 | 90,245 | — | | 549,992 | | 1/1/2023 | 12/21/2022 | — | — | — | 48,845 | (3) | 549,995 | | | | | | | | | | | | Ann C. Menard | 1/1/2023 | 12/21/2022 | 20,054 | 50,136 | 90,245 | | | 549,992 | | 1/1/2023 | 12/21/2022 | — | — | — | 48,845 | (3) | 549,995 |
(1)Represents awards of performance-based LTIP Units granted under our LTIP and 2003 Incentive Plan as more fully described beginning on page 40 of this Proxy Statement. Performance will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2023 through December 31, 2025. The number of LTIP Units reported under the “Threshold (#)” subcolumn represents the number of LTIP Units that would be awarded if our financial and operational metrics versus three-year FFO per share goals (weighted at 50%) and three-year Year-End Reported Occupancy goals (weighted at 50%) were at Threshold performance, which represents the minimum performance that would entitle recipients to awards under the LTIP and our three-year relative TSR versus our Equity Peer REITs were equal to or below the 25th percentile, resulting in the full downward modifier of -20% based on such relative TSR performance. The number of LTIP Units reported under the “Target (#)” subcolumn represents the number of LTIP Units that would be awarded if our financial and operational metrics were at the Target performance and our three-year relative TSR versus our Equity Peer REITs were at the 50th percentile, resulting in no modifier based on such relative TSR performance. The number of LTIP Units reported under the “Maximum (#)” subcolumn represents the number of LTIP Units that would be awarded if our financial and operational metrics were at or above the Maximum performance and our three-year relative TSR versus our Equity Peer REITs were at or above the 75th percentile, resulting in the full upward modifier of +20% based on such relative TSR performance. (2)The amounts reflected in this column represent the grant date fair value of these awards computed in accordance with FASB ASC Topic 718 as described in note (4) to the “Summary Compensation Table” above. Assumptions used in the calculation of these amounts are set forth in footnote 19 to our audited financial statements for the fiscal year ended December 31, 2023 included in our Annual Report on Form 10-K filed with the SEC on February 26, 2024. (3)Represents awards of service-based LTIP Units granted under our LTIP and 2003 Incentive Plan as more fully described beginning on page 40 of this Proxy Statement.
Discussion of Summary Compensation and Grants of Plan-Based Awards Table Our executive compensation policies and practices, pursuant to which the compensation set forth in the Summary Compensation Table and the Grants of Plan-Based Awards Table was paid, awarded or earned, are generally described under “Compensation Discussion and Analysis” and in the footnotes to the compensation tables. The material terms of our LTIP, pursuant to which LTIP Units are granted, are described below. For a description of our severance and change of control agreements with certain of our named executive officers, see “Potential Payments Upon Termination or Change of Control” below.
LTIP Units of our Operating Partnership are structured to qualify as “profits interests” for federal income tax purposes. Accordingly, LTIP Units initially do not have full parity, on a per unit basis, with our Operating Partnership’s common OP Units with respect to liquidating distributions. Upon the occurrence of specified events, the LTIP Units can over time achieve full parity with the common OP Units, at which time LTIP Units are convertible, subject to the satisfaction of applicable vesting conditions, on a one-for-one basis into common OP Units. LTIP Units that have been converted into common OP Units and have become vested are redeemable by the holder for shares of Common Stock on a one-for-one basis or the cash value of such shares, at our Company’s election. LTIP Units generally may be subject to performance-based vesting or service-based vesting. 54 2021 PROXY STATEMENT
EXECUTIVE COMPENSATION TABLES
20202023 Performance-Based and Service-Based LTIP Units. OurThe Compensation Committee continued the LTIP program for 2023 and allowed our executive officers to elect to receive either LTIP Units in the Operating Partnership or restricted stock units of the Company (the “LTIP Units”). For our Chief Executive Officer and President, were granted LTIP Units effective January 1, 2020, with 75% of the total award consistingconsisted of performance-based LTIP Units and 25% consistingconsisted of service-based LTIP Units. OurThe Compensation Committee also awarded LTIP Units to our other named executive officers, were granted LTIP Units effective January 1, 2020, with 50% of the total award consisting of performance-based
EXECUTIVE COMPENSATION TABLES LTIP Units and 50% consisting of service-based LTIP Units. a. The performance period for the 2023 performance-based LTIP Unit awards is January 1, 2023 through December 31, 2025.
Performance-Based LTIP Units. Performance-based awards were granted in 20202023 to encourage executives to adopt a longer-term perspective and to reward them for creating stockholder value in a pay-for-performance structure. The 20202023 performance-based LTIP Units are subject to performance-based vesting over the three-year period from January 1, 20202023 through December 31, 2022,2025, with the number of LTIP Units vesting, if any, depending on our performance relative to financial and operational measures, as modified based on our relative total stockholder return over the performance period as described below. These LTIP Units are subject to forfeiture to the extent the applicable performance requirements are not achieved. Vesting of the LTIP Units is based on the percentile ranking of our total stockholder return per share of Common Stock relative to our Peer REITs, as measured at the end of the performance period. Total stockholder return will be measured by the compounded total annual return per share achieved by the shares of Common Stock of our Company or such Equity Peer REIT and assumed reinvestment of all dividends and other distributions. Depending on our performance versus FFO per share goals (weighted at 50%) and year-end Reported Occupancy goals (weighted at 50%), in each case over a three-year period, with a potential modification +/-20% based on three-year relative total stockholder return relative to the total stockholder return ofversus our Equity Peer REITs, vesting of these LTIP Units will occur in accordance with the schedule below, with linear interpolation between performance levels.as more fully described beginning on page 40 of this Proxy Statement. Determination of the vesting of our performance-based LTIP Units will occur earlier in the event of a change of control or qualified termination of employment (which generally includes a termination by our Company without cause or by the executive for good reason) based on our performance through the date of such event. | | | Company Percentile Ranking Relative to the Equity Peer REITs
| | Percentage of Target LTIP
Units That Vest* | Below the 25th
| | 0%
| At the 25th
| | 50%
| At the 50th
| | 100%
| At or above the 75th
| | 150%
|
* | Linear interpolation between performance levels.
|
Prior to the vesting of the 20202023 performance-based LTIP Units, holders of the 20202023 performance-based LTIP Units in the Operating Partnership will be entitled to receive per unit distributions equal to 10% of the regular periodic distributions payable on a common OP Unit, but will not be entitled to receive any special distributions. LTIP Units in the form of restricted stock units will not receive a corresponding distribution or dividend. Distributions and dividends on vested LTIP Units (whether in the form of LTIP Units in the Operating Partnership or restricted stock units of the Company) are equal in amount to the regular distributions paid on an equal number of common OP Units, which are equal in amount to the dividends paid on an equal number of shares of Common Stock. b.
Service-Based LTIP Units. Service-based awards were granted in 20202023 to support the long-term retention of our executives. The 20202023 service-based LTIP Units vest in equal annual installments over a three-year period. Vesting is conditioned upon the executive remaining an employee of our Company through the applicable vesting dates, and subject to acceleration of vesting in the event of a change of control of our Company followed by certain qualifying terminations or the executive’s death or disability. FollowingEffective March 1, 2024, pursuant to the 2024 Severance Plan, in connection with the termination of the executive’s service relationship with our Company under specified circumstances, including termination by our Company without cause, or by the executive for good reason, his or her service-based LTIP Units will continue to vest in accordance withbecome fully vested on an accelerated basis effective on the vesting schedule.executive’s termination date. Regular and other non-liquidating distributions and dividends were made with respect to the service-based LTIP Units from the date of their issuance to the executive. Distributions and dividends were in the same amount and at the same time as those made with respect to common OP Units.Units and shares of Common Stock. At the end of the vesting period, distributions and dividends will continue to be madepaid only to the extent that the service-based LTIP Units have become vested. 2021 Performance-Based and Service-Based LTIP Units. The Compensation Committee continued the LTIP program for 2021 and awarded LTIP Units to our Chief Executive Officer and President, with 75% of the total award consisting of performance-based LTIP Units and 25% consisting of service-based LTIP Units. The Compensation Committee awarded LTIP Units to our other named executive officers, with 50% of the total award consisting of performance-based LTIP Units and 50% consisting of service-based LTIP Units. The performance period for the 2021 performance-based LTIP Unit awards is January 1, 2021 through December 31, 2023. The number of 2021 performance-based LTIP Units that will vest will depend on our performance relative to financial and operational measures, as modified based on our relative total stockholder return versus a peer group of publicly-traded, U.S.-based equity REITs in the Nareit Index that are categorized as “mall” or “shopping center” REITs.
2021
2024 PROXY STATEMENT 5549
EXECUTIVE COMPENSATION TABLES
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 20202023 The following table provides information on the holdings of certain of our named executive officers of service-based LTIP Units and performance-based LTIP Units as of December 31, 2020. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | | | | Stock Awards | | Name | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | | Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#) | | | Option
Exercise
Price
($) | | | Option
Expiration
Date | | | | | | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#) | | | Market
Value of
Shares or Units of
Stock That
Have Not
Vested
($) (5) | | | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#) | | | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested ($) (7) | | Thomas E. O’Hern | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | 44,849 | (1) | | | 478,539 | | | | 115,123 | (6) | | | 1,228,362 | | Edward C. Coppola | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | 29,222 | (1) | | | 311,799 | | | | 79,330 | (6) | | | 846,451 | | Scott W. Kingsmore | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | 16,566 | (2) | | | 176,759 | | | | 10,590 | (6) | | | 112,995 | | Douglas J. Healey | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | 19,152 | (3) | | | 204,352 | | | | 11,018 | (6) | | | 117,562 | | Kenneth L. Volk | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | 17,017 | (4) | | | 181,571 | | | | 11,018 | (6) | | | 117,562 | |
(1) | Represents the unvested portion of the 2019 service-based LTIP Units that will vest on December 31, 2021 and the unvested portion of the 2020 service-based LTIP Units that will vest on December 31, 2021 and December 31, 2022.
|
(2) | Includes the unvested portion of the 2019 service-based LTIP Units that will vest on December 31, 2021, the unvested portion of the 2020 service-based LTIP Units that will vest on December 31, 2021 and December 31, 2022, 2,744 stock units that vested on March 15, 2021 and 1,935 stock units that will vest on March 15, 2022.
|
(3) | Includes the unvested portion of the 2019 service-based LTIP Units that will vest on December 31, 2021, the unvested portion of the 2020 service-based LTIP Units that will vest on December 31, 2021 and December 31, 2022, 4,298 stock units that vested on March 15, 2021 and 2,679 stock units that will vest on March 15, 2022.
|
(4) | Includes the unvested portion of the 2019 service-based LTIP Units that will vest on December 31, 2021, the unvested portion of the 2020 service-based LTIP Units that will vest on December 31, 2021 and December 31, 2022, 3,056 stock units that vested on March 15, 2021 and 1,786 stock units that will vest on March 15, 2022.
|
(5) | Based on a price of $10.67 per unit, which was the closing price on the NYSE of one share of our Common Stock on December 31, 2020. Assumes that the value of LTIP Units on a per unit basis is equal to the per share value of our Common Stock.
|
(6) | Represents awards of performance-based LTIP Units granted on January 1, 2019 and January 1, 2020 under our LTIP and 2003 Incentive Plan. The number of LTIP Units reported in this table represents 50% of the target number of performance-based LTIP Units granted in 2019 and 2020, which is based on our performance relative to our Equity Peer REITs during 2020 at the 25th percentile, which is the minimum percentile rank that would entitle recipients to awards under the LTIP. As discussed in the “Compensation Discussion and Analysis” above, none of the performance-based LTIP Units granted in 2019 and 2020 would have been earned assuming the performance period ended on December 31, 2020 based on our relative total stockholder return performance through such date.
|
(7) | The vesting of the 2019 performance-based LTIP Units will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2019 through December 31, 2021 and the 2020 performance-based LTIP Units will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2020 through December 31, 2022. Although these LTIP Units have not vested, for purposes of this table, it is assumed that one performance-based LTIP Unit represents the economic equivalent of one share of Common Stock. The market value is based upon the closing price of our Common Stock on the NYSE on December 31, 2020 of $10.67.
|
56 20212023. None of our named executive officers held outstanding options as of December 31, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | Stock Awards | | Name | Number of Shares or Units of Stock That Have Not Vested (#) (1) | | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) (4) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (5) | | Thomas E. O’Hern | 285,396 | | 4,403,660 | | | 711,580 | | 10,979,679 | | | Edward C. Coppola | 171,237 | | 2,642,187 | | | 429,002 | | 6,619,501 | | | Scott W. Kingsmore | 75,238 | | 1,160,922 | | | 103,278 | | 1,593,579 | | | Douglas J. Healey | 64,424 | | 994,062 | | | 87,388 | | 1,348,396 | | | Ann C. Menard | 64,424 | | 994,062 | | | 87,388 | | 1,348,396 | |
(1)Represents the unvested portion of the 2022 service-based LTIP Units that will vest on December 31, 2024 and the unvested portion of the 2023 service-based LTIP Units that will vest on December 31, 2024 and December 31, 2025. Also includes the portion of the 2022 and 2023 performance-based LTIP Units granted January 1, 2022 and January 1, 2023, respectively, that were earned based on our FFO per share and Occupancy for the performance periods from January 1, 2022 through December 31, 2023 and January 1, 2023 through December 31, 2023, respectively, that do not remain subject to forfeiture based on our relative TSR performance for the periods beginning January 1, 2022 and ending December 31, 2024 and beginning January 1, 2023 and ending December 31, 2025. (2)Based on a price of $15.43 per unit, which was the closing price on the NYSE of one share of our Common Stock on December 29, 2023. Assumes that the value of LTIP Units on a per unit basis is equal to the per share value of our Common Stock. (3)Represents awards of performance-based LTIP Units granted on January 1, 2022 under our LTIP and 2003 Incentive Plan. The number of LTIP Units reported in this table represents (i) the number of performance-based LTIP Units granted in 2022 equal to (A) the Target number of LTIP Units that may still be earned based on our FFO per share during the remaining performance periods, because our FFO per share performance was between the Threshold and Target performance level for the performance period ended December 31, 2023 (B) the Maximum number of LTIP Units that may be earned based on our Occupancy during the remaining performance periods under the awards, because our Occupancy performance was at or above the Maximum performance level for the performance period ended December 31, 2023 and (C) the maximum upward modification (+20%) in the number of LTIP Units that are subject to our relative TSR performance versus our Equity Peer REITs (estimated based on actual performance and the levels described in clauses (A) and (B)), because our relative TSR performance was above the Target performance level as of December 31, 2023. (4)Represents awards of performance-based LTIP Units granted on January 1, 2023 under our LTIP and 2003 Incentive Plan. The number of LTIP Units reported in this table represents (i) the number of performance-based LTIP Units granted in 2023 equal to (A) the Target number of LTIP Units that may still be earned based on our FFO per share during the remaining performance periods, because our FFO per share performance was between the Threshold and Target performance levels for the performance period ended December 31, 2023, (B) the Maximum number of LTIP Units that may be earned based on our Occupancy during the remaining performance periods under the awards, because our Occupancy performance was at or above the Maximum performance level for the performance period ended December 31, 2023 and (C) the maximum upward modification (+20%) in the number of LTIP Units that are subject to our relative TSR performance versus our Equity Peer REITs (estimated based on actual performance and the levels described in clauses (A) and (B)), because our relative TSR performance was at or above the Maximum performance level as of December 31, 2023. (5)The vesting of the 2022 performance-based LTIP Units will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2022 through December 31, 2024 and the 2023 performance-based LTIP Units will be measured on a cumulative basis at the end of the three-year performance period from January 1, 2023 through December 31, 2025. Although these LTIP Units have not vested, for purposes of this table, it is assumed that one performance-based LTIP Unit represents the economic equivalent of one share of Common Stock. The market value is based upon the closing price of our Common Stock on the NYSE on December 29, 2023 of $15.43.
EXECUTIVE COMPENSATION TABLES
OPTION EXERCISES AND STOCK VESTED—FISCAL 20202023 The following table presents information regarding the vesting of LTIP Units and stock units during 20202023 that were previously granted to certain of our named executive officers. | | | | | | | | | | | | | | | | | | | | | | | | Option Awards | | | | | | Stock Awards | | Name | | Number of
Shares
Acquired
on Exercise
(#) | | | Value Realized
on Exercise
($) | | | | | | Number of
Shares
Acquired
on Vesting
(#) (1) | | | Value Realized
on Vesting
($) (1) | | Thomas E. O’Hern | | | — | | | | — | | | | | | | | 28,813 | | | | 307,435 | | Edward C. Coppola | | | — | | | | — | | | | | | | | 22,643 | | | | 241,601 | | Scott W. Kingsmore | | | — | | | | — | | | | | | | | 11,000 | (2) | | | 127,742 | | Douglas J. Healey | | | — | | | | — | | | | | | | | 13,688 | (3) | | | 163,045 | | Kenneth L. Volk | | | — | | | | — | | | | | | | | 11,681 | (4) | | | 136,091 | |
(1) | This number includes (a) the vesting of stock units for Messrs. Kingsmore, Healey and Volk and (b) the vesting of service-based LTIP Units on December 31, 2020. An individual, upon the vesting of an equity award, does not receive cash equal to the amount contained in the Value Realized on Vesting column of this table. Instead, the amounts contained in the Value Realized on Vesting column reflect the market value of our Common Stock on the applicable vesting date. For purposes of this table, it is assumed one LTIP Unit represents the economic equivalent of one share of Common Stock. The LTIP Units do not realize their full economic value until certain conditions are met, as described on pages 54-55 of this Proxy Statement.
|
(2) | This number represents the vesting of 7,242 service-based LTIP Units and 3,758 stock units.
|
(3) | This number represents the vesting of 7,531 service-based LTIP Units and 6,157 stock units.
|
(4) | This number represents the vesting of 7,531 service-based LTIP Units and 4,150 stock units.
|
None of our named executive officers exercised options during 2023. | | | | | | | | | | | | | | | | Stock Awards | | Name | Number of Shares Acquired on Vesting (#) (1) | | | Value Realized on Vesting ($) (1) | | Thomas E. O’Hern | 395,316 | | | 6,099,726 | | | Edward C. Coppola | 258,654 | | | 3,991,031 | | | Scott W. Kingsmore | 86,987 |
| | 1,342,209 | | | Douglas J. Healey | 82,098 |
| | 1,266,772 | | | Ann C. Menard | 82,098 | | | 1,266,772 | |
(1)This number represents the vesting of performance-based LTIP Units for the performance period ending December 31, 2023 and service-based LTIP Units on December 31, 2023. An individual, upon the vesting of an equity award, does not receive cash equal to the amount contained in the Value Realized on Vesting column of this table. Instead, the amounts contained in the Value Realized on Vesting column reflect the market value of our Common Stock on the applicable vesting date. For purposes of this table, it is assumed one LTIP Unit represents the economic equivalent of one share of Common Stock. The LTIP Units do not realize their full economic value until certain conditions are met, as described beginning on page 40 of this Proxy Statement.
NONQUALIFIED DEFERRED COMPENSATION—FISCAL 20202023 Certain of our named executive officers participate or participated in our 2005 Deferred Compensation Plan for Senior Executives, which was amended and restated as our 2013 Deferred Compensation Plan, effective January 1, 2013, referred to as our “Deferred Compensation Plan,” which also includes certain amounts deferred prior to 2005 under a predecessor plan. The following table provides information with respect to our named executive officers for the Deferred Compensation Plan for the fiscal year 2020. | | | | | | | | | | | | | | | | | | | | | Name | | Executive
Contributions
in 2020
($) (1) | | | Registrant
Contributions
in 2020
($) (2) | | | Aggregate
Earnings
in 2020
($) (3) | | | Aggregate
Withdrawals/
Distributions
during 2020
($) | | | Aggregate
Balance at
12/31/2020
($) (4) | | Thomas E. O’Hern | | | 563,631 | | | | 120,785 | | | | 28,371 | | | | — | | | | 4,988,141 | | Edward C. Coppola | | | — | | | | — | | | | 172,220 | | | | — | | | | 752,869 | | Scott W. Kingsmore | | | 219,048 | | | | 43,837 | | | | 620,652 | | | | (113,353 | ) | | | 4,241,119 | | Douglas J. Healey | | | — | | | | — | | | | — | | | | — | | | | — | | Kenneth L. Volk | | | 210,000 | | | | 30,000 | | | | 521,669 | | | | (237,425 | ) | | | 3,505,472 | |
(1) | The amounts in this column are included in the “Salary” column of the Summary Compensation Table.
|
(2) | Our Company’s contributions to the Deferred Compensation Plan are included in the “All Other Compensation” column of the Summary Compensation Table.
|
(3) | None of the earnings set forth in this column are considered above-market or preferential as determined under SEC rules, and, therefore, none of such amounts are reflected in the Summary Compensation Table.
|
(4) | The balances shown represent compensation already reported in the Summary Compensation Table in this and prior-year proxy statements, except for any earnings that were not above-market or preferential as determined under SEC rules.
|
2021 PROXY STATEMENT 57
2023.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name | Executive
Contributions
in 2023 ($) (1) | | Registrant
Contributions
in 2023 ($) (2) | | Aggregate
Earnings
in 2023 ($) (3) | | Aggregate
Withdrawals/
Distributions
during 2023
($) | | Aggregate
Balance at
12/31/2023
($) (4) | | Thomas E. O’Hern | 170,000 | | | 25,500 | | | 894,076 | | | — | | | 6,373,472 | | | Edward C. Coppola | — | | | — | | | 89,207 | | | — | | | 709,762 | | | Scott W. Kingsmore | 229,677 | | | 34,452 | | | 616,750 | | | (161,527) | | | 4,775,482 | | | Douglas J. Healey | — | | | — | | | — | | | — | | | — | | | Ann C. Menard | 174,750 | | | 26,213 | | | 98,492 | | | — | | | 1,036,381 | |
(1)The amounts in this column are included in the “Salary” column of the Summary Compensation Table. (2)Our Company’s contributions to the Deferred Compensation Plan are included in the “All Other Compensation” column of the Summary Compensation Table. (3)None of the earnings set forth in this column are considered above-market or preferential as determined under SEC rules, and, therefore, none of such amounts are reflected in the Summary Compensation Table. (4)The balances shown represent compensation already reported in the Summary Compensation Table in this and prior-year proxy statements, except for any earnings that were not above-market or preferential as determined under SEC rules. Description of Our Deferred Compensation Plan As of December 31, 2020,2023, Messrs. O’Hern, Coppola and Kingsmore and VolkMs. Menard had account balances under our Deferred Compensation Plan. Under the Deferred Compensation Plan, our key executives who satisfy certain eligibility requirements may make annual irrevocable elections to defer a specified portion of their base salary and bonus to be earned during the following calendar year. Deferral of amounts earned in 20202023 by participants were limited to 85% of base salary and 85% of bonus. Our Company will credit an amount equal to the compensation deferred by a participant to that participant’s deferral account under the Deferred Compensation Plan. In addition, our Company may credit matching amounts to an account established for each participant in an amount equal to a percentage, established by our Company in its sole discretion prior to the beginning of the plan year, of the amount of compensation deferred by each participant under the Deferred Compensation Plan. For 2020,2023, our Company matched 15% of the amount of salary and bonus deferred by a participant up to a limit of 3% of the participant’s total salary and bonus. Account balances under the Deferred Compensation Plan will be credited with income, gains and losses based on the performance of investment funds selected by the participant from a list of funds designated by our Company. The amounts
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL credited to participants’ deferred accounts and Company matching accounts are at all times 100% vested. Participants will be eligible to receive distributions of the amounts credited to their accounts, at up to six different times that they may specify, in a lump sum or installments pursuant to elections made under the rules of the Deferred Compensation Plan. Changes to these elections may be made under limited circumstances. Under the Deferred Compensation Plan, key employees who have elected a payment at termination of employment must generally wait six months after termination, other than as a result of death, to receive a distribution. Our Company is contributing assets to a trust, which assets remain subject to the claims of our Company’s general creditors, to provide a source of funds for payment of our Company’s obligations under the Deferred Compensation Plan. Employees who are eligible to participate in the Deferred Compensation Plan may also be eligible for life insurance coverage in an amount equal to two times their annual salaries.
Potential Payments Upon Termination or Change in Control The following section describes potential payments and benefits to our named executive officers under our current compensation and benefit plans and arrangements (excluding the 2024 Severance Plan) had a termination of employment or a change in control of our Company occurred on December 31, 2020.On November 2, 2017, we adopted the Change in Control Severance Pay2023.
Our Prior CIC Plan for Senior Executives and on May 3, 2019, we adopted the Change in Control Severance Pay Plan for Executive Vice Presidents (collectively, the “Severance Plans”) which provideprovided for the payment and benefits set forth below upon a qualifying termination of employment following a change in control. In addition, our 2003 Incentive Plan contains provisions regarding the acceleration of vesting and modification of equity awards. The Compensation Committee is authorized to accelerate the vesting of and modify outstanding awards as well as authorize discretionary severance payments to our named executive officers upon termination. Regardless of the manner in which a named executive officer’s employment terminates, they are entitled to receive all accrued, vested or earned but deferred compensation and benefits during their term of employment. The information below sets forth the additional payments and/or benefits to our named executive officers under the specified circumstances. Change in Control Severance Pay Plans
Prior CIC Plan Under the Severance Plans,Prior CIC Plan, in the event that the employment of any of the named executive officers is terminated by us other than for “cause” (as defined in the Severance Plans)Prior CIC Plan) or due to the executive’s death or “total disability” (as defined in the Severance Plans)Prior CIC Plan) or by the executive for “good reason” (as defined in the Severance Plans)Prior CIC Plan), in each case upon or within 24 months following a change in control, the named executive officer will be entitled to the following: (i) a lump sum payment equal to three times the sum of (A) the higher of the executive’s annual base salary as of the date of termination or the date of the change in control and (B) the average annual incentive bonus award to the executive in respect of the immediately preceding three fiscal years, (ii) a pro-rated portion of the executive’s target annual incentive bonus for the year of termination, payable in a lump sum, (iii) outplacement services pursuant to our Company’s outplacement services plan for a period of 12twelve months following termination and (iv)(iii) a lump sum payment equal to the product of (A) the total amount of COBRA continuation monthly premium rate that would have otherwise been payable by the executive for COBRA continuation for medical, vision and dental coverage for the executive and his eligible dependents and (B) 36. The Severance Plans doPrior CIC Plan does not provide for an excise tax gross-up payment to any eligible participant. Instead, if any payment by our Company would subject an executive to the excise tax under Section 4999 of the Code, such payments shall be reduced or the full amount of such 58 2021 PROXY STATEMENT
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
payments shall be made, whichever leaves the executive in the best net after-tax position. Receipt of the payments and benefits set forth above is subject to the execution and effectiveness of a general release of claims in favor of our Company and its affiliates. Offer Letter
Employment Agreement with Mr. O’Hern Our Company
On June 8, 2021, Mr. O’Hern entered into an offer lettera new employment agreement that provided him with certain compensation and benefits during the period commencing June 8, 2021 and ending December 31, 2023 (the “Term”). During the Term, Mr. O’Hern’s annual base salary was $850,000 and his target annual bonus was equal to 200% of his annual base salary. The agreement also specified that Mr. O’Hern’s target long-term incentive grant value would continue to be $6,000,000 for each calendar year of the Term, with the allocation between performance-based and time-based awards, vesting provisions, and other terms generally the same as annual grants made to other executive officers, as determined by the Compensation Committee.
Mr. O’Hern was eligible to participate in the Prior CIC Plan (as described above) during the Term and through his retirement on April 26, 2018 whichFebruary 29, 2024. If Mr. O’Hern’s employment with us terminated without cause or he resigned with good reason (other than in a circumstance that would entitle him to severance benefits under the Prior CIC Plan) during the Term, Mr. O’Hern would have been entitled to receive: (a) a prorated annual bonus for the year of termination, based on actual performance, (b) an amount equal to (i) the sum of his base salary and the average of the three annual incentive bonuses awarded to him in respect of his service as Chief Executive Officer for the immediately preceding three years multiplied by (ii) the quotient of the number of days between his termination date and December 31, 2023, divided by 365, (c) a lump sum cash payment equal to the monthly COBRA continuation rate multiplied by 36, and (d) outplacement services for 12 months pursuant to our outplacement services for senior executives. In addition, all long-term incentive awards granted to Mr. O’Hern would have vested upon the termination of his employment by the Company for no reason or for any reason other than for cause, termination of his employment for good reason or due to his death or disability on terms no less favorable to those contained in the award agreements for his LTIP Unit awards.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL 2024 Severance Plan
The 2024 Severance Plan covers the Company’s Chief Executive Officer (the “Tier 1 Executive”), the senior executive officers (the “Tier 2 Executives”) and executive vice presidents (the “Tier 3 Executives” and, together with the Tier 1 Executive and Tier 2 Executives, the “Eligible Executives”) and provides that, if an Eligible Executive’s employment is terminated by the Company other than due to cause, death or disability, or by the Eligible Executive for good reason (collectively, a “Qualifying Termination”), in either case outside of the Change in Control Period (as defined below), the Eligible Executive will be eligible to receive the following severance benefits, subject to the Eligible Executive’s execution and the effectiveness of a separation agreement, including, among other things, a general release of claims in favor of the Company (the “Separation Agreement”): (i) an amount equal to the sum of (x) the Eligible Executive’s then-current base salary and (y) the average of the annual cash incentive bonuses awarded to the Eligible Executive in respect of the immediately preceding three years (or such lesser number of years the Eligible Executive has been employed, and if less than one year, the Eligible Executive’s target bonus) (such bonus amount, the “Bonus”), times a multiple equal to two (2) for a Tier 1 Executive, 1.5 for a Tier 2 Executive, and one (1) for a Tier 3 Executive, (ii) an amount equal to a pro-rated annual incentive bonus otherwise payable to the Eligible Executive under the Company’s applicable annual incentive bonus plan for the year of termination (the “Pro-Rata Bonus”), (iii) an amount equal to the product of (x) the total amount of the COBRA continuation (medical, vision and dental) monthly premium rate that would otherwise be payable by the Eligible Executive for such COBRA continuation for the Eligible Executive and any eligible dependents and (y) 24 for the Tier 1 Executive, 18 for a Tier 2 Executive and 12 for a Tier 3 Executive (the “COBRA Payment”) (the amounts in (i), (ii) and (iii), each to be paid in a lump sum), and (iv) the highest level of outplacement benefits pursuant to the Company’s outplacement services plan for senior executives in effect immediately prior to the Qualifying Termination, for a period of 12 months following the Qualifying Termination (the “Outplacement Services”). In addition, in connection with a Qualifying Termination outside of the Change in Control Period, subject to the execution of a Separation Agreement and compliance with certain restrictive covenants, 100% of the Eligible Executive’s unvested LTIP awards subject to time-based vesting conditions will immediately become fully vested as of the Executive’s termination date, and any outstanding and unvested LTIP awards subject to performance-based vesting will vest based on actual performance at the end of the applicable performance period. Notwithstanding the foregoing, if, the Eligible Executive’s employment with the Company is terminated due to death, disability, or retirement (as defined in the applicable LTIP unit award agreement), then, subject to the execution of a Separation Agreement and compliance with certain restrictive covenants, the Eligible Executive’s unvested LTIP awards subject to time-based vesting conditions will continue to vest following such termination in accordance with the applicable time-based vesting schedule; provided, however, 100% of Mr. Hsieh’s unvested LTIP awards subject to time-based vesting conditions will immediately become fully vested as of the date of his termination due to death, disability or retirement.
The 2024 Severance Plan also provides that if a Qualifying Termination occurs within the 24-month period following a change in control (the “Change in Control Period”), the Eligible Executive will be eligible to receive the following severance benefits, subject to the Eligible Executive’s execution and the effectiveness of a Separation Agreement: (i) an amount equal to three (3) multiplied by the sum of (x) the Eligible Executive’s then-current base salary or the base salary in effect immediately prior to the Change in Control Period, whichever is higher, and (y) the Eligible Executive’s Bonus, (ii) an amount equal to the Pro-Rata Bonus, and (iii) the COBRA Payment, but with the applicable multiplier to be 36 for each Eligible Executive (the amounts in (i), (ii) and (iii), each to be paid in a lump sum), and (iv) the Outplacement Services. In addition, in the case of outstanding and unvested LTIP awards subject to time-based vesting conditions, if a change in control occurs prior to the end of the applicable retention period, then, subject to the execution of a Separation Agreement and compliance with certain restrictive covenants, 100% of the Eligible Executive’s unvested LTIP awards subject to time-based vesting conditions will immediately become fully vested (A) upon a qualifyingQualifying Termination during the Change in Control Period, or (B) upon the Eligible Executive’s termination due to death, disability or retirement. In the case of employment, which are described abovethe Eligible Executive’s outstanding and unvested LTIP awards subject to performance-based vesting, if a change in control occurs prior to the Compensation Discussion and Analysis under “Offer Letter with Mr. O’Hern.”end of the applicable performance period, then such awards will vest based on actual performance measured as of the change in control date.
Treatment of Equity Awards Upon Termination or Change in Control (under the Prior CIC Plan) Upon a Termination of Employment by our Company for Cause If a named executive officer’s employment is terminated with cause, the executive will forfeit all unvested equity awards as of the termination date. Upon a Termination of Employment by our Company Without Cause If a named executive officer’s employment is terminated for any reason, other than (i) by death, disability, resignation or retirement of such officer or (ii) by termination with cause, •except as provided below, the executive’s equity awards that have not vested as of such termination date will be forfeited, •the executive will have three months (or such other period in the Compensation Committee’s discretion) from the termination date to exercise any outstanding vested options and SARs, subject to specified limitations,
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL •the executive’s unvested performance-based LTIP Units will be eligible to vest in accordance with the partial service factor under the award agreement and based on performance through the executive’s termination date (this will also occur if the executive terminates the executive’s employment for good reason), and •the executive’s unvested service-based LTIP Units will vest in accordance with the partial service factor under the award agreement (this will also occur if the executive terminates the executive’s employment for good reason). Upon Resignation by the Named Executive Officer In the event of the resignation of a named executive officer for good reason, •the executive’s equity awards that have not vested as of such qualified termination date will receive a partial service factor, and •the executive will have three months (or such other period in the Compensation Committee’s discretion) from the termination date to exercise any outstanding vested options and SARs, subject to specified limitations. In the event of the retirement of a named executive officer, •under our current retirement policy and except as provided below, all outstanding equity awards will continue to vest in accordance with the vesting schedule originally set forth in the executive’s award agreement provided the named executive officer retires at age 55 or older, has at least ten years of service with our Company and has not been directly or indirectly employed by a competitor at any time after the executive’s retirement, •if a named executive officer does not meet the requirements for retirement under our current retirement policy, and the Compensation Committee does not otherwise provide, •the executive’s equity awards that have not vested as of the executive’s retirement date will be forfeited, •the executive will have 12twelve months from the executive’s retirement date to exercise any outstanding vested options and SARs, subject to specified limitations, and •all unvested performance-based and service-based LTIP Units will receive a partial service factor. 2021 PROXY STATEMENT 59
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
Upon Death or Disability In the event of death or disability of a named executive officer while employed, •the executive’s benefits under our long-term disability plan or payments under our life insurance plan(s), as appropriate, will be distributed, •except as provided below, the executive’s unvested equity awards will immediately vest, •the executive’s unvested performance-based LTIP Units will be eligible to vest based on performance through the executive’s date of death or disability, and •the executive’s vested stock options or SARs, if any, may be exercised for 12twelve months after the date of the executive’s disability or death. Termination/Change in Control Payments Table The following table providesquantifies the potential payments and benefits to the named executive officers under the Prior CIC Plan, upon termination of employment or a change in control, assuming such event occurred on December 31, 2020.2023. These numbers do not reflect the actual amounts that may be paid to such persons, which will only be known at the time that they become eligible for payment and will only be payable if the specified event occurs. Further, these amounts do not reflect the actual amounts that may be paid to such persons under the 2024 Severance Plan. Items Not Reflected in Table The following items are not reflected in the table set forth below: •Accrued salary bonus and personal time. bonus.•Costs of COBRA or any other mandated governmental assistance program to former employees. •Welfare benefits, including life insurance, provided to all salaried employees. •Amounts outstanding under our 401(k) plan or any deferred compensation plan. There are no special or enhanced benefits under these plans for our named executive officers, and all of such participating officers are fully vested in these plans. See “Nonqualified Deferred Compensation – Fiscal 2020”2023” table above. Other Notes Applicable to the Table •For the accelerated vesting of the unvested service-based LTIP Units, the table reflects the intrinsic value of such acceleration. The value for each unvested LTIP Unit is $10.67,$15.43, which represents the closing price of our Common Stock on the NYSE on December 31, 2020. 29, 2023.•Life insurance amounts only reflect policies paid for by our Company and in effect on December 31, 2020. 2023.
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL •The table assumes that a “disability” is of a long-term nature, which triggers vesting of unvested equity awards and the accelerated vesting determination of any unvested performance-based LTIP Units. •Mr. Coppola also has death benefit coverage under a split-dollar life insurance policy. No premiums have been paid by our Company under this policy since July 30, 2002. At the time of his death, the total premiums our Company previously paid for the policy will be recovered and the remaining death benefits will be paid to his designated beneficiaries. •The “Termination without cause” and “Change in control/Termination” rows in the following table include a termination by our Company without cause and a termination for good reason by the named executive officer. •The amounts shown are only estimates of the amounts that would be payable to the executives upon termination of employment and do not reflect tax positions we may take or the accounting treatment of such payments. Actual amounts to be paid can only be determined at the time of separation. 60 2021
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL TERMINATION/CHANGE IN CONTROL PAYMENTS | | | | | | | | | | | | | | | | | | | | | | | | Cash
Severance
($) | | | Miscellaneous
Benefits
($) | | | Awards
($) | | | Life
Insurance
Proceeds
($) | | | Total
($) | | | | | | | | Thomas E. O’Hern | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination with cause | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Termination without cause | | | 1,861,359 | | | | 102,351 | (5) | | | 478,539 | (2) | | | — | | | | 2,442,249 | | | | | | | | Resignation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Retirement | | | — | | | | — | | | | 478,539 | (3) | | | — | | | | 478,539 | | | | | | | | Death | | | — | | | | — | | | | 478,539 | (3) | | | 1,600,000 | | | | 2,078,539 | | | | | | | | Disability | | | — | | | | | (1) | | | 478,539 | (3) | | | — | | | | 478,539 | | | | | | | | Change in control/Termination | | | 12,356,700 | | | | 102,351 | (5) | | | 478,539 | (3) | | | — | | | | 12,937,590 | | | | | | | | Edward C. Coppola | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination with cause | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Termination without cause | | | — | | | | — | | | | 311,777 | (2) | | | — | | | | 311,777 | | | | | | | | Resignation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Retirement | | | — | | | | — | | | | 311,777 | (3) | | | — | | | | 311,777 | | | | | | | | Death | | | — | | | | — | | | | 311,777 | (3) | | | 1,600,000 | | | | 1,911,777 | | | | | | | | Disability | | | — | | | | | (1) | | | 311,777 | (3) | | | — | | | | 311,777 | | | | | | | | Change in control/Termination | | | 8,018,800 | | | | 84,576 | (5) | | | 311,777 | (3) | | | — | | | | 8,415,153 | | | | | | | | Scott W. Kingsmore | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination with cause | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Termination without cause | | | — | | | | — | | | | 176,759 | (4) | | | — | | | | 176,759 | | | | | | | | Resignation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Retirement | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Death | | | — | | | | — | | | | 176,759 | (4) | | | 1,000,000 | | | | 1,176,759 | | | | | | | | Disability | | | — | | | | | (1) | | | 176,759 | (4) | | | — | | | | 176,759 | | | | | | | | Change in control/Termination | | | 3,396,789 | | | | 67,797 | (5) | | | 176,759 | (4) | | | — | | | | 3,641,345 | | | | | | | | Douglas J. Healey | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination with cause | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Termination without cause | | | — | | | | — | | | | 204,352 | (4) | | | — | | | | 204,352 | | | | | | | | Resignation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Retirement | | | — | | | | — | | | | 204,352 | (4) | | | — | | | | 204,352 | | | | | | | | Death | | | — | | | | — | | | | 204,352 | (4) | | | 1,000,000 | | | | 1,204,352 | | | | | | | | Disability | | | — | | | | | (1) | | | 204,352 | (4) | | | — | | | | 204,352 | | | | | | | | Change in control/Termination | | | 4,021,845 | | | | 26,652 | (5) | | | 204,352 | (4) | | | — | | | | 4,252,849 | | | | | | | | Kenneth L. Volk | | | | | | | | | | | | | | | | | | | | | | | | | | | Termination with cause | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Termination without cause | | | — | | | | — | | | | 181,571 | (4) | | | — | | | | 181,571 | | | | | | | | Resignation | | | — | | | | — | | | | — | | | | — | | | | — | | | | | | | | Retirement | | | — | | | | — | | | | 181,571 | (4) | | | — | | | | 181,571 | | | | | | | | Death | | | — | | | | — | | | | 181,571 | (4) | | | 1,000,000 | | | | 1,181,571 | | | | | | | | Disability | | | — | | | | | (1) | | | 181,571 | (4) | | | — | | | | 181,571 | | | | | | | | Change in control/Termination | | | 3,568,619 | | | | 67,812 | (5) | | | 181,571 | (4) | | | — | | | | 3,818,002 | |
(1) | Upon disability, the executive officer will generally receive up to $25,000 monthly until his return to employment.
|
2021
| | | | | | | | | | | | | | | | | | | | | | | | | Cash
Severance
($) | Miscellaneous Benefits ($) | Awards ($) | Life
Insurance
Proceeds
($) | Total
($) | | | | | | | | | | | Thomas E. O’Hern | | | | | | | | | | | | | | | | | | Termination with cause | — | | — | | | — | | | — | | — | | | | | | | | | | | | Termination without cause | 2,897,793 | | 124,878 | | (5) | 4,403,663 | | (2) | — | | 7,426,334 | | | | | | | | | | | | Resignation | — | | — | | | — | | | — | | — | | | | | | | | | | | Retirement(7) | — | | — | | | 4,403,663 | | (3) | — | | 4,403,663 | | | | | | | | | | | | Death | — | | — | | | 4,403,663 | | (3) | 1,700,000 | | 6,103,663 | | | | | | | | | | | | Disability | — | | | (1) | 4,403,663 | | (3) | — | | 4,403,663 | | | | | | | | | | | | Change in control/Termination | 11,423,700 | | 124,878 | | (5) | 4,403,663 | | (6) | — | | 15,952,241 | | | | | | | | | | | | Edward C. Coppola | | | | | | | | | | | | | | | | | | Termination with cause | — | | — | | | — | | | — | | — | | | | | | | | | | | | Termination without cause | — | | — | | | 2,642,183 | | (2) | — | | 2,642,183 | | | | | | | | | | | | Resignation | — | | — | | | — | | | — | | — | | | | | | | | | | | Retirement(8) | — | | — | | | 2,642,183 | | (3) | — | | 2,642,183 | | | | | | | | | | | | Death | — | | — | | | 2,642,183 | | (3) | 1,600,000 | | 4,242,183 | | | | | | | | | | | | Disability | — | | | (1) | 2,642,183 | | (3) | — | | 2,642,183 | | | | | | | | | | | | Change in control/Termination | 9,765,601 | | 102,903 | | (5) | 2,642,183 | | (6) | — | | 12,510,687 | | | Scott W. Kingsmore | | | | | | | | | Termination with cause | — | | — | | | — | | | — | | — | | | | | | | | | | | | Termination without cause | — | | — | | | 1,160,924 | | (4) | — | | 1,160,924 | | | | | | | | | | | | Resignation | — | | — | | | — | | | — | | — | | | | | | | | | | | | Retirement | — | | — | | | — | | | — | | — | | | | | | | | | | | | Death | — | | — | | | 1,160,924 | | (4) | 1,200,000 | | 2,360,924 | | | | | | | | | | | | Disability | — | | | (1) | 1,160,924 | | (4) | — | | 1,160,924 | | | | | | | | | | | | Change in control/Termination | 4,083,385 | | 74,316 | | (5) | 1,160,924 | | (6) | — | | 5,318,625 | | | | | | | | | | | | Douglas J. Healey | | | | | | | | | | | | | | | | | | Termination with cause | — | | — | | | — | | | — | | — | | | | | | | | | | | | Termination without cause | — | | — | | | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Resignation | — | | — | | | — | | | — | | — | | | | | | | | | | | | Retirement | — | | — | | | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Death | — | | — | | | 994,069 | | (4) | 1,200,000 | | 2,194,069 | | | | | | | | | | | | Disability | — | | | (1) | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Change in control/Termination | 4,098,385 | | 42,888 | | (5) | 994,069 | | (6) | — | | 5,135,342 | | | | | | | | | | | Ann C. Menard | | | | | | | | | | | | | | | | | | Termination with cause | — | | — | | | — | | | — | | — | | | | | | | | | | | | Termination without cause | — | | — | | | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Resignation | — | | — | | | — | | | — | | — | | | | | | | | | | | | Retirement | — | | — | | | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Death | — | | — | | | 994,069 | | (4) | 1,200,000 | | 2,194,069 | | | | | | | | | | | | Disability | — | | | (1) | 994,069 | | (4) | — | | 994,069 | | | | | | | | | | | | Change in control/Termination | 4,270,885 | | 53,145 | | (5) | 994,069 | | (6) | — | | 5,318,099 | |
(1)Upon disability, the executive officer will generally receive up to $25,000 monthly until his return to employment. (2)Amount reflects the vesting of service-based LTIP Units and the earned value of 2022 and 2023 performance-based LTIP Units. The executive officer’s unvested service-based LTIP Units will continue to vest in accordance with the vesting schedule upon a termination without cause or if the executive officer terminates his employment for good reason. 56 2024 PROXY STATEMENT61
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL (2) | Amount reflects the vesting of service-based LTIP Units. The executive officer’s unvested service-based LTIP Units will continue to vest in accordance with the vesting schedule upon a termination without cause or if the executive officer terminates his employment for good reason.
|
(3) | Amount reflects the vesting of service-based LTIP Units.
|
(4) | Amount represents the vesting of service-based LTIP Units and restricted stock units. The executive officer’s unvested equity will continue to vest in accordance with the vesting schedule upon a termination without cause or if the executive officer terminates his employment for good reason.
|
(5) | Amount represents the estimated value of continuing welfare benefits for 36 months after December 31, 2020.
|
(3)Amount reflects the vesting of service-based LTIP Units and the earned value of 2022 and 2023 performance-based LTIP Units. (4)Amount represents the vesting of service-based LTIP Units and the earned value of 2022 and 2023 performance-based LTIP Units. The executive officer’s unvested equity will continue to vest in accordance with the vesting schedule upon a termination without cause or if the executive officer terminates his or her employment for good reason. (5)Amount represents the estimated value of continuing welfare benefits for 36 months after December 31, 2023. (6)Amount reflects the vesting of service-based LTIP Units and the value of 2022 and 2023 performance-based LTIP Units for which performance would have been deemed to have been achieved upon a change in control and for which vesting would have accelerated upon termination. (7)In connection with his retirement effective February 29, 2024, Mr. O’Hern received a lump sum amount representing 36 months of payments of post-employment group health care plan continuation premiums. (8)In connection with his retirement effective February 29, 2024, the Company entered into a letter agreement with Mr. Coppola (the “Coppola Letter Agreement”), providing for, among other things, that Mr. Coppola will be entitled to (i) an annual incentive bonus for 2023 to be paid after his resignation, calculated based on a target level of 200% of Mr. Coppola’s final base salary rate of $800,000, with the amount of the bonus based 75% on an established scorecard of financial and strategic objectives and the remaining 25% based on an individual performance component of a 100% level of achievement, provided that the total annual incentive bonus paid to Mr. Coppola for 2023 shall not be less than $2,000,000; (ii) a lump sum amount representing 36 months of payments of post-employment group health care plan continuation premiums; (iii) administrative support through December 2024; and (iv) payment of his attorneys’ fees incurred in connection with his review of the Coppola Letter Agreement. In addition, in accordance with his existing equity agreements, Mr. Coppola will continue to vest under his unvested equity awards. Pursuant to the Coppola Letter Agreement, Mr. Coppola will be subject to a covenant not to solicit employees for two years and standard release and non-disparagement terms, among other standard provisions. CEO COMPENSATION PAY RATIO In August 2015, pursuant
Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the SEC adopted a rule requiringrequires annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the CEO. We believe that executive pay should be internally consistent and equitable to motivate our employees to create stockholder value. The annual total compensation for 20202023 for our Former CEO, Mr. O’Hern, who became our CEO on January 1, 2019, was $8,375,998$9,825,709 as reported under the heading “Summary Compensation Table.” Our median employee’s total compensation for 20202023 was $104,028.$126,615. As a result, we estimate that Mr. O’Hern’s 20202023 total compensation was approximately 8178 times that of our median employee. Our CEO to median employee pay ratio was calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining 20202023 total compensation consisting of base salary, annual bonus amounts, stock-based compensation (based on the grant date fair value of awards during 2020)2023) and other incentive payments for all full-time, part-time, seasonal and hourly employees who were employed by our Company on December 31, 2020,2023, other than our CEO. After identifying the median employee based on 20202023 total compensation, we calculated annual total compensation for such employee using the same methodology we use for our named executive officers as set forth in the “Total” column in the Summary Compensation Table. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
PAY VERSUS PERFORMANCE The following tables set forth information concerning the compensation of our NEOs and our financial performance for the fiscal years ended December 31, 2023, 2022, 2021 and 2020. Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Act and Item 402(v) of Regulation S-K, we are providing information about the relationship between executive compensation actually paid to our principal executive officer (“PEO”) and the other named executive officers (“NEOs”), as calculated in accordance with Item 402(v) of Regulation S-K, and certain financial performance measures. For additional information on our compensation programs and philosophy and how we design our compensation programs to align pay with performance, see “Compensation Discussion and Analysis” on page 28 of this proxy statement. Pay Versus Performance Table | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | Year
(1) | Summary
Compensation Table Total for
PEO | Compensation Actually Paid to PEO (2)(3) | Average Summary Compensation Table Total for Other NEOs | Average
Compensation Actually Paid to Other NEOs (2)(3) | Value of Initial Fixed $100 Investment Based on: | GAAP
Net
(Loss)
Income
($mil.) | FFO per
Diluted
Share (5) | Total
Shareholder
Return | Peer Group
Total
Shareholder
Return (4) | | 2023 | $9,825,709 | $11,517,786 | $4,042,434 | $4,724,185 | $77.80 | $108.96 | ($274.1) | $1.80 | | 2022 | $8,869,392 | $(252,422) | $3,342,368 | $877,865 | $53.40 | $98.55 | ($66.1) | $1.96 | | 2021 | $8,246,379 | $10,266,668 | $3,434,396 | $4,143,732 | $78.04 | $113.65 | $14.3 | $2.03 | | 2020 | $8,375,998 | $4,019,314 | $2,896,357 | $1,631,776 | $46.32 | $74.82 | ($230.2) | $2.16 |
(1)Thomas O’Hern served as the Company’s PEO for the entirety of 2020, 2021, 2022 and 2023. The Company’s other NEOs for the applicable years were as follows: 2023, 2022, and 2021: Edward Coppola, Scott Kingsmore, Douglas Healey and Ann Menard 2020: Edward Coppola, Scott Kingsmore, Douglas Healey and Kenneth Volk (2)The amounts reported in column (c) and (e) represent the “compensation actually paid” (“CAP”) to our PEO, and the average compensation actually paid to our other NEOs as a group, respectively, computed in accordance with Item 402(v) of Regulation S-K, but do not reflect the actual amount of compensation earned by or paid to our PEO or our other NEOs as a group in the applicable year. The fair value of time-based LTIP Units used to calculate CAP is based on our closing stock price on each valuation date and includes the value of accrued dividends, assuming reinvestment in additional LTIP Units. The fair value of performance-based LTIP Units used to calculate CAP is based on the fair value per share on each valuation date, which includes the estimated (or actual) performance results as of each valuation date for financial performance conditions and the Monte Carlo valuation for market conditions, as well as accrued dividends assuming reinvestment in additional LTIP Units. (3)In accordance with Item 402(v) of Regulation S-K, the following adjustments were made to the amount reported for our PEO and our other NEOs as a group in the “Total” column of the Summary Compensation Table for each year to calculate CAP:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2023 (1)(2) | 2022 (1)(2) | 2021 (1)(2) | 2020 (1)(2) | | PEO | Average
Other
NEOs | PEO | Average
Other
NEOs | PEO | Average
Other
NEOs | PEO | Average
Other
NEOs | | Summary Compensation Table Total | $9,825,709 | | 4,042,434 | | $8,869,392 | | $3,342,368 | | $8,246,379 | | $3,434,396 | | $8,375,998 | | $2,896,357 | | Minus Change in Pension Value Reported in Summary Compensation Table | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | Plus Pension Value Service Cost | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | Minus Stock Award and Option Value Reported in Summary Compensation Table for the Covered Year | ($5,999,983) | | ($1,774,986) | | ($5,999,975) | | ($1,774,984) | | ($4,499,985) | | ($1,462,492) | | ($5,999,968) | | ($1,518,730) | | Plus (Minus) Year-End Fair Value of Awards Granted During Year that are Outstanding and Unvested at Year-End | $2,884,910 | | $979,668 | | $1,506,347 | | $499,102 | | $5,389,360 | | $1,723,130 | | $1,746,585 | | $420,694 | | Plus (Minus) Year-over-Year Change in Fair Value of Awards Granted in Any Prior Year that are Outstanding and Unvested at Year-End | $895,363 | | $244,815 | | ($2,919,938) | | ($839,400) | | $483,215 | | $126,226 | | ($121,969) | | ($119,756) | | Plus Fair Value at Vesting Date of Awards Granted and Vested During the Year | $685,154 | | $302,605 | | $325,808 | | $143,894 | | $607,306 | | $293,531 | | $198,174 | | $66,882 | | Plus (Minus) Change in Fair Value from End of Prior Year to Vesting Date of Awards Granted in Any Prior Fiscal Year that Vested During the Year | $3,226,634 | | $929,649 | | ($2,034,056) | | ($493,115) | | $40,394 | | $28,941 | | ($179,505) | | ($113,673) | | Minus Fair Value at End of Prior Year of Awards Granted in Prior Years that were Forfeited During the Year | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | Plus Value of Dividends or Other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | | Compensation Actually Paid | $ | 11,517,786 | | $ | 4,724,185 | | ($252,422) | | $877,865 | | $10,266,668 | | $4,143,732 | | $4,019,314 | | $1,631,776 | |
(4)Represents the cumulative total stockholder return (TSR) of the FTSE NAREIT Equity Retail Index, which is an industry index reported in the performance graph included in the Company’s 2023 Annual Report on Form 10-K, for an initial investment of $100 on December 31, 2019 through and including the end of the fiscal year for each row in the table. (5)Our FFO per diluted share, our Company-Selected Measure, as calculated for purposes of our annual incentive plan for 2023. See Appendix I of this proxy statement for a reconciliation of FFO per diluted share, which is a non-GAAP financial measure. Performance Measures Used for Linking Pay and Performance. The following is a list of performance measures, which in our assessment represent the most important performance measures used by our Company to link compensation actually paid to our PEO and the NEOs for 2023. Each metric below is used for purposes of determining payouts under either our annual cash incentive program or vesting of our performance-based LTIP Units. FFO per share was selected as our Company-Selected Measure for the Pay versus Performance table because it has the strongest alignment with the key attributes of our operating plan and we believe that it drives the creation of long-term stockholder value. | | | | FFO per Diluted Share | | Year-end Reported Occupancy | | Relative TSR | | Re-development Goals | | Leasing Goals | | Net Debt Reduction | | Environmental Initiatives |
Please see our Compensation Discussion and Analysis on page 28 of this proxy statement for a further description of these metrics, how they are calculated, and how they are used in our executive compensation program.
Relationship between Compensation Actually Paid and Performance Measures. Relationship between CAP, TSR and Peer Group TSR. Compensation actually paid to our PEO and other NEOs is generally in alignment with our TSR both on an absolute basis and relative to the TSR of the FTSE NAREIT Equity Retail Index, which is “Peer Group,” for each of the past four fiscal years. Compensation Actually Paid to our PEO and our other NEOs was highest in 2023 and 2021, when our TSR was strongly positive and higher than the TSR of the FTSE NAREIT Equity Retail Index. Compensation Actually Paid for our PEO and our other NEOs was significantly lower in both 2020 and 2022, when our TSR was negative and lower than the TSR of the Peer Group Index. This general level of alignment is expected because a significant portion of the compensation actually paid is comprised of equity awards whose value is directly correlated with our TSR, and a significant portion of the equity awards are performance-based and tied either completely or in part to our TSR relative to a peer group with similar constituents to the companies in the FTSE NAREIT Equity Retail Index. Relationship between CAP and Net Income. Net income is not used as a performance measure in our incentive plans. Net income includes real estate depreciation and amortization, which are non-cash expenses that do not necessarily correlate to actual changes in the market value of our real estate portfolio. For these reasons, CAP amounts for our PEO and average other NEOs do not have a strong relationship to the Company’s net income. Relationship between CAP and FFO per Diluted Share (our Company-Selected Measure). Although FFO per diluted share is an important operational metric to our business, and a measure used in our incentive plans, compensation actually paid to our PEO and average other NEOs does not have a strong relationship to FFO per diluted share. The lack of correlation is partly because compensation actually paid for a given year is strongly influenced by our TSR during the year, which does not always correlate with year-over-year changes in FFO per diluted share. Compensation actually paid is also influenced by changes to levels of projected and actual achievement under our performance-based LTIP program (which is based on one or more of the following measures: Three-Year FFO per Diluted Share, Year-End Reported Occupancy, and relative TSR versus our Equity Peer REITs), as well as achievement of the other goals in our annual incentive plan.
EQUITY COMPENSATION PLAN INFORMATION Our Company currently maintains two equity compensation plans for the granting of equity awards to directors, officers and employees: our 2003 Incentive Plan and our Director Phantom StockDeferral Plan. Our Company also maintains our ESPP.Employee Stock Purchase Program (“ESPP”). Except as described in footnote 4(4) to the table, each of these plans has been approved by our Company’s stockholders. The following table sets forth, for each of our Company’s equity compensation plans, the number of shares of Common Stock subject to outstanding awards, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of December 31, 2020. | | | | | | | | | | | | | Plan category | | Number of shares of
Common Stock to be
issued upon exercise
of outstanding
options, warrants
and rights | | | Weighted average
exercise price of
outstanding options
warrants and
rights(1) | | | Number of shares of Common
Stock remaining available for
future issuance under equity
compensation plans (excluding
shares reflected in the first
column) | | | | | | Equity compensation plans approved by stockholders | | | 3,993,372 | (2) | | | $54.34 | | | | 6,753,521 | (3) | | | | | Equity compensation plans not approved by stockholders (4) | | | 101,272 | | | | — | | | | 110,062 | (5) | | | | | Total | | | 4,094,644 | | | | $54.34 | | | | 6,863,583 | |
(1) | These weighted-average exercise prices do not reflect the shares that will be issued upon the payment of outstanding stock units, OP Units or LTIP Units.
|
62 2021 PROXY STATEMENT
2023.
AUDIT COMMITTEE MATTERS
(2) | Includes (a) 37,515 outstanding options with a weighted average exercise price of $54.34 and a weighted average term to expiration of 5.02 years and (b) 309,845 unvested restricted stock units. Also includes 3,646,012 LTIP Units (of which 784,052 were unvested and 2,861,960 were vested) which may be redeemed for shares under our 2003 Incentive Plan. This number of shares is presented before giving effect to the shares that will be purchased under our ESPP for the purchase period ending May 31, 2021.
|
(3) | Of these shares, 6,620,968 were available for options, SARs, restricted stock, stock units, stock bonuses, performance-based awards, dividend equivalent rights and OP Units or other units convertible into or exchangeable for Common Stock under our 2003 Incentive Plan and 132,553 were available for issuance under our ESPP.
|
(4) | In February 2010, our Board of Directors approved an amendment to our Director Phantom Stock Plan to increase the number of shares of Common Stock that may be issued pursuant to the plan. In accordance with applicable NYSE rules, this share increase was not required to be approved by our stockholders because the shares of Common Stock issued under the plan are issued solely in payment of deferred compensation in accordance with the terms of the plan.
|
(5) | These shares were available for the issuance of stock units under our Director Phantom Stock Plan. See “Compensation of Non-Employee Directors” on page 23 of this Proxy Statement for a description of our Director Phantom Stock Plan.
|
| | | | | | | | | | | | | | | | | | | Plan category | Number of shares of Common Stock to be issued upon exercise of outstanding options, warrants and rights | Weighted average
exercise price of
outstanding options
warrants and
rights(1) | Number of shares of Common Stock remaining available for future issuance under equity compensation plans (excluding shares reflected in the first column) | | | | | | | | Equity compensation plans approved by stockholders | 7,350,117 | (2) | $54.56 | | 7,761,453 | (3) | | | | | | | | Equity compensation plans not approved by stockholders | 113,978 | | — | | 24,576 | (4) | | | | | | | | Total | 7,464,095 | | $54.56 | | 7,786,029 | |
(1)These weighted-average exercise prices do not reflect the shares that will be issued upon the payment of outstanding stock units, OP Units or LTIP Units. (2)Includes (a) 26,371 outstanding options with a weighted average exercise price of $54.56 and a weighted average term to expiration of 3.42 years and (b) 284,047 unvested restricted stock units. Also includes 7,039,699 LTIP Units (of which 2,256,847 were unvested and 4,782,852 were vested) which may be redeemed for shares under our 2003 Incentive Plan. This number of shares is presented before giving effect to the shares that will be purchased under our ESPP for the purchase period ending May 30, 2024. (3)Of these shares, 7,678,580 were available for options, SARs, restricted stock, stock units, stock bonuses, performance-based awards, dividend equivalent rights and OP Units or other units convertible into or exchangeable for Common Stock under our 2003 Incentive Plan and 82,873 were available for issuance under our ESPP. (4)These shares were available for the issuance of stock units under our Deferral Plan. See “Compensation of Non-Employee Directors” of this Proxy Statement for a description of our Deferral Plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION Messrs. Brandt, Hash, Hirsch and Soboroff and Ms. Stephen each served as a member of the Compensation Committee during 2020.2023. No member of the Compensation Committee is a past or present officer or employee of our Company or had any relationship with us requiring disclosure under SEC rules requiring disclosure of certain transactions with related persons. In addition, none of our executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officer of which served as a director or member of the Compensation Committee during 2020.2023. The Audit Committee presently is comprised of Ms. Alford (Chair) , Mr. Hash and Messrs. Alschuler and Soboroff. Ms. Alford was appointed to the Audit Committee on March 29, 2018 and became the Committee’s Chair on January 30, 2019.Lowenthal. The Audit Committee met eight times in 2020.2023. The principal responsibilities of and functions to be performed by the Audit Committee are established by the Audit Committee charter. The Audit Committee and our Board of Directors amended and restated the Audit Committee charter in April 2019July 2021 and such charter complies with the requirements of the Sarbanes-Oxley Act of 2002 and the NYSE listing standards. The Audit Committee reviews and reassesses the adequacy of its charter annually. Our Board of Directors has determined that each Audit Committee member is an independent director as defined by the NYSE listing standards for audit committee members and meets the financial literacy requirements of the NYSE listing standards. Our Board of Directors also has determined that Ms. Alford and Mr. AlschulerHash are audit committee financial experts as defined by the Exchange Act. (See “The Board of Directors and its Committees—Director Independence” and “—Committee Charters.”)
The following Report of the Audit Committee shall not be deemed soliciting material or to be filed under the Securities Act or the Exchange Act, or subject to Regulation 14A or 14C or the liabilities of Section 18 of the Exchange Act, except to the extent our Company specifically requests that this Report be treated as soliciting material or specifically incorporates this Report by reference into a filing under either of such Acts. The Audit Committee members whose names appear on the Report of the Audit Committee Report were committee members during 2020.20212023.
2024 PROXY STATEMENT 6361
REPORT OF THE AUDIT COMMITTEE The Audit Committee of the Board of Directors of The Macerich Company, a Maryland corporation, assists our Board of Directors in performing its oversight responsibilities for our financial reporting process, audit process and internal controls, as more fully described in the Audit Committee’s charter. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. Our independent registered public accounting firm is responsible for auditing our financial statements and expressing an opinion as to their conformity to accounting principles generally accepted in the United States. In the performance of its oversight function, the Audit Committee reviewed and discussed our audited financial statements for the year ended December 31, 20202023 with management. In addition, the Audit Committee discussed with representatives of our independent registered public accounting firm the matters required to be discussed with the Audit Committee by the applicable requirements of the Public Company Accounting Oversight Board and the SEC. The Committee has also received and reviewed the written disclosures and the letter from our independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered public accounting firm their independence from our Company. Based on the review and discussions with management and our independent registered public accounting firm described above, the Audit Committee recommended to our Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 20202023 for filing with the SEC. ____________________ Peggy Alford John Alschuler
Steven R. Hash ex officioSteven L. Soboroff
Marianne Lowenthal
PRINCIPAL ACCOUNTANT FEES AND SERVICES For the years ended December 31, 20202023 and 2019,2022, our Company was billed by KPMG LLP for services in the following categories:
Audit Fees. Fees for audit services totaled $4,027,000$3,698,000 in 20202023 and $3,857,000$3,426,000 in 2019,2022, including fees associated with the annual audit of ourCompany and its subsidiaries and affiliates, audit of internal control over financial reporting, stand-alone audits of certain consolidated properties, the performance of interim reviews of our quarterly unaudited financial information and review of our registration statement and offering documents.documents, including comfort letters and consents. Audit-Related Fees. No fees for audit-related services were paid to KPMG LLP in 20202023 or 2019.2022. Tax Fees. No fees for tax services were paid to KPMG LLP in 20202023 or 2019.2022. All Other Fees. All other fees consist of an annual license fee of $3,560 and $2,000 in each of 20202023 and 20192022, respectively, for use of accounting research software. Our Company has been advised by KPMG LLP that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in our Company or its subsidiaries. 64 2021 PROXY STATEMENT
AUDIT COMMITTEE MATTERSAUDIT COMMITTEE PRE-APPROVAL POLICY
Consistent with the SEC rules regarding independence, the Audit Committee has responsibility for appointing, setting compensation and overseeing the work of our independent registered public accounting firm. In recognition of this responsibility, the Audit Committee has established a policy to pre-approve all audit and permissible non-audit services provided by our independent registered public accounting firm. The Audit Committee approves a list of services and related fees expected to be rendered during any fiscal-year period within each of four categories of service:
Audit Servicesinclude audit work performed on the financial statements, including audit of the effectiveness of internal controls over financialreporting pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, as well as work that generally only our independent registered public accounting firm can reasonably be expected to provide, including work associated with registration statements under the Securities Act, periodic reports and other SEC documents, including comfort letters and consents, statutory or other financial audit work for subsidiaries and consultations surrounding the proper application of financial accounting and/or reporting standards.
Audit-Related Servicesinclude assurance and related services that are reasonably related to performance of an audit or traditionally performed byour independent registered public accounting firm, including due diligence or agreed-upon procedures related to mergers, acquisitions, dispositions or refinancings, special procedures required to meet certain financial, accounting or regulatory requirements and accounting, regulatory or disclosure consultations.
Tax Servicesinclude tax return preparation, tax planning and related tax services, tax advice, tax compliance, tax reporting, year-end estimatedtaxable income and distribution projections and tax due diligence for REIT compliance and other tax issues.
Other Servicesinclude those permissible non-audit services that do not fall within the above categories and are routine and recurring services thatwould not impair the independence of our accountants. The Audit Committee pre-approves our independent registered public accounting firm’s services within each category. In 2020,2023, the Audit Committee pre-approved the retention of KPMG LLP to perform various audit and audit-related services for our Company as described above. For each proposed service, our independent registered public accounting firm is generally required to provide documentation at the time of approval to permit the Audit Committee to make a determination whether the provision of such services would impair our independent registered public accounting firm’s independence. The fees are budgeted and the Audit Committee requires our independent registered public accounting firm and management to report actual fees versus the budget periodically throughout the year by category of service. During the year, circumstances may arise when it may become necessary to engage our independent registered public accounting firm for additional services not contemplated in the original pre-approval categories. In those instances, the Audit Committee requires specific pre-approval before engaging our independent registered public accounting firm. The Audit Committee may delegate pre-approval authority to one or more of its members. The member to whom such authority is delegated must report any pre-approval decisions to the Audit Committee at its next scheduled meeting. 2021
2024 PROXY STATEMENT 6563
PROPOSAL 2: NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR COMPANY’S NAMED EXECUTIVE OFFICERSWe are providing our stockholders with the opportunity to cast a non-binding, advisory vote on the compensation of our named executive officers as disclosed pursuant to the SEC’s executive compensation disclosure rules and set forth in this Proxy Statement (including in the compensation tables and the narrative discussion accompanying those tables as well as in the Compensation Discussion and Analysis).
As described more fully under the Compensation Discussion and Analysis section, beginning on page 30 of this Proxy Statement, our executive compensation program is guided by the following philosophy and objectives:
Our objective is to closely align executive compensation with the creation of stockholder value, with a balanced focus on both short-term and long-term performance and a substantial emphasis on total stockholder return. We believe our executive compensation policies and practices appropriately align the interests of our executives with those of our stockholders through a combination of base salary, annual incentive compensation awards and long-term incentive equity awards.
Our executive compensation program is designed to attract, retain and reward experienced, highly motivated executives who are capable of leading our Company effectively. The Compensation Committee believes strongly in linking compensation to performance and has designed our compensation program to deliver total pay that is primarily linked to overall business results while also recognizing individual performance. The Compensation Committee utilizes a combination of cash and equity-based compensation to provide appropriate incentives for executives to achieve our business objectives as well as further align their interests with our stockholders and encourage their long-term commitment to our Company.
We urge our stockholders to read the Compensation Discussion and Analysis section of this Proxy Statement, which describes in more detail how our executive compensation policies and practices are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative discussion that accompanies the compensation tables which provide detailed information on the compensation of our named executive officers. The Compensation Committee and our Board believe that the policies and procedures described in the Compensation Discussion and Analysis have enabled our Company to attract, motivate and retain highly skilled executives whose performance and contributions have contributed to our Company’s success.
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Act) and the related rules of the SEC, our Board will request your non-binding, advisory vote on the following resolution at our Annual Meeting:
RESOLVED, that the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby approved.
This proposal to approve the compensation paid to our named executive officers is advisory in nature and, therefore, not binding on our Company, our Board or our Compensation Committee and will not be construed as overruling a decision by, or creating or implying any additional duty for, our Company, our Board or our Compensation Committee. However, the Compensation Committee, which is responsible for reviewing and approving the compensation for our executive officers and reviewing our overall compensation structure and philosophy, values input from our stockholders and will consider the result of the vote when making future compensation decisions for our named executive officers. Our Company’s current policy is to hold a non-binding, advisory vote on the compensation of our named executive officers every year. It is expected that the next such vote will occur at our 2022 annual meeting of stockholders.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON A NON-BINDING, ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE SEC’S EXECUTIVE COMPENSATION DISCLOSURE RULES. PROXIES RECEIVED WILL BE VOTED “FOR” APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
66 2021 PROXY STATEMENT
PROPOSAL 3: AMENDMENT TO OUR CHARTER TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
Our Board has unanimously approved and declared advisable an amendment to our charter that increases the number of authorized shares of Common Stock from 250,000,000 to 500,000,000. The proposed amendment is subject to approval by our stockholders. As of March 26, 2021, 185,422,090 shares of our Common Stock were issued and outstanding. In addition, an aggregate of 55,059,805 shares of our Common Stock are (i) subject to outstanding equity awards, which include stock units, stock options and LTIP Unit awards, (ii) reserved for future issuance under the 2003 Incentive Plan, (iii) reserved for future issuance under our ESPP and (iv) reserved for future issuance under our current at-the-market offering programs. If the amendment is approved, it will become effective upon the filing of the Articles of Amendment to our charter with, and acceptance for record by, the State Department of Assessments and Taxation of Maryland.
Our Board has determined that it is advisable and in the best interests of the Company and our stockholders to amend our charter in order to have available on a timely basis additional authorized but unissued shares of Common Stock in an amount adequate to provide for our future needs, which may include possible equity financings, opportunities for expanding our business through investments or acquisitions, management incentives and employee benefit plans, stock dividends or stock splits, and for other general corporate purposes. If our stockholders do not approve this proposal, we may be substantially limited in our flexibility to advance our operational and future strategic plans, including our ability to access the capital markets, finance the acquisition and development of properties, complete corporate collaborations, partnerships or other strategic transactions, attract, retain and motivate employees, and pursue other business opportunities integral to our growth and success. We have not amended our charter to increase the number of authorized shares of Common Stock since 2009.
The Company’s issuance of shares of Common Stock, including the additional shares that will be authorized if this proposal is approved, may dilute the equity ownership position of current holders of Common Stock and may be made without stockholder approval, unless otherwise required by applicable law or the NYSE.
If our Board were to approve the issuance of additional shares of Common Stock, it could have a takeover defense effect, although this is not the intent of our Board in proposing the amendment. For instance, shares of our authorized but unissued Common Stock could be issued in one or more transactions that could have the effect of delaying, deferring or preventing a change in control of our Company. As of the date of this Proxy Statement, we are not aware of any attempt or plan to obtain control of us.
The holders of our Common Stock have no preemptive rights, and our Board has no plans to grant such rights with respect to any such shares.
The full text of the amendment to Article FIFTH of our charter is attached as Appendix A to this Proxy Statement and is incorporated by reference into this proposal.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDMENT OF OUR CHARTER TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK. PROPERLY EXECUTED PROXIES RECEIVED WILL BE VOTED “FOR” THE APPROVAL OF THE AMENDMENT OF OUR CHARTER TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
2021 PROXY STATEMENT 67
PROPOSAL 4: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN
At our Annual Meeting, our stockholders will be asked to approve the amendment and restatement ofto our Company’s Employee Stock Purchase Plan or “ESPP”, which was adopted, subject to stockholder approval, by our Board on January 27, 2021,February 1, 2024, effective June 1, 2021, subjectMay 30, 2024 in order to stockholder approval.increase the aggregate number of shares under the ESPP by 500,000. Our ESPP originally was adopted by our Board on April 1, 2003 and approved by our Company’s stockholders on May 28, 2003. An amendment and restatement of the ESPP was approved by our stockholders on June 1, 2021 which authorized an additional 500,000 shares under the ESPP.
Our ESPP has operated and will continue to operate on substantially the same terms as an “employee stock purchase plan” intended to qualify under Section 423 of the Code. Our ESPP is not, however, qualified under Section 423 of the Code because most of the eligible employees under our ESPP are employed by our Operating Partnership and its subsidiaries, which entities are ineligible to provide such a plan to their employees.
Our ESPP is a broad-based plan pursuant to which shares of Common Stock are available for purchase by eligible employees who elect to participate in our ESPP. Eligible employees may purchase, by means of payroll deductions, limited amounts of our Company’s Common Stock during periodic offering periods. The shares will be offered at up to a 15% discount from their fair market value as of specified dates. The 15% discount will be applied against the lower of the stock value at the beginning or the end of each six-month offering period under the plan.
The principalproposed change made to our ESPP in the amendment and restatement is to increase the maximum number of shares available for purchase under the ESPP from 791,1171,291,117 (as adjusted due to stock dividend) to 1,291,117.1,791,117.
Our Board believes that our ESPP has helped and will continue to help our Company to retain and motivate eligible employees and to further align the interests of eligible employees with those of our stockholders. As of March 31, 2021,2024, there were 132,55382,873 shares available for future awards under the our ESPP. Based solely on the closing price of our common stock reported on the NYSE on March 31, 2021,28, 2024, the final trading day of the month, the maximum aggregate market value of the 500,000 shares subject to the proposed increase under the Amendment is approximately $5.85$8.62 million.
The principal terms of our ESPP are summarized below. Because it is not a complete description of all of the terms and conditions of our ESPP, the summary is qualified in its entirety by theThe full text of the amendment to our ESPP which has beenis attached hereto as Appendix BII and is incorporated herein by reference. Capitalized terms not otherwise defined herein have the meanings given to them in the ESPP.
SUMMARY OF OUR ESPP Purpose.
Purpose. The purpose of our ESPP is to provide eligible employees with an opportunity to purchase shares of our Company’s Common Stock at a favorable price and upon favorable terms in consideration of the participating employees’ services. Our ESPP is intended to provide an additional incentive to participating eligible employees to remain in our Company’s employ and to advance its best interests.
Operation of the ESPP. ESPP. Our ESPP generally operates in successive six-month periods commencing on each June 1 and December 1. These periods are referred to as “Offering Periods.” The next Offering Period will commence on June 1, 2021.2024.
On the first day of each Offering Period (referred to as the “Grant Date”), each eligible employee who has timely filed a valid election to participate in our ESPP for that Offering Period is granted an option to purchase shares of Common Stock. A participant must designate in his or her election the percentage of his or her compensation to be withheld from his or her pay during that Offering Period for the purchase of stock under our ESPP. Our Company credits the participant’s contributions under our ESPP to a bookkeeping account in his or her name. Accounts are funded entirely by the participant’s contributions and our Company does not contribute any amounts to participant’s accounts under our ESPP. A participant generally may elect to terminate, but may not otherwise increase or decrease, his or her contributions to our ESPP during an Offering Period. Amounts contributed to our ESPP constitute general corporate assets and may be used by our Company for any corporate purpose. 68 2021 PROXY STATEMENT
PROPOSAL 4: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN
Except as noted below, each option granted under our ESPP automatically is exercised on the last day of the Offering Period with respect to which it was granted (also referred to as the “Exercise Date”). The number of shares acquired by a participant upon exercise of his or her option is determined by dividing the participant’s ESPP account balance as of the Exercise Date by the Option Price for that Offering Period. The “Option Price” for an Offering Period will equal 85% (or such higher percentage as the committee appointed to administer the ESPP shall determine prior to the beginning of the Offering Period) of the lesser of (1) the fair market value of a share of our Common Stock on the Grant Date of that Offering Period or (2) the fair market value of a share of our Common Stock on the Exercise Date of that Offering Period. (This formula is consistent with the requirements for employee stock purchase plans intended to qualify under Section 423 of the Code.) A
PROPOSAL 2: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN participant’s ESPP account is reduced upon exercise of his or her option by the amount used to pay the Option Price of the shares acquired by the participant. No interest is paid to any participant or credited to any account under our ESPP. Eligibility.
Eligibility. Only certain employees are eligible to participate in our ESPP. To be eligible to participate in an Offering Period, on the Grant Date of that Offering Period an individual must: • be employed by our Company or one of its subsidiaries or affiliates that has been designated as a participating subsidiary; • customarily work more than 19.23 hours per week (which is the equivalent of more than 1,000 hours on an annualized basis); and • have been employed by our Company or one of its participating subsidiaries for at least 45 days, or, if providing part-time services in excess of the threshold in the immediately preceding bullet, at least one year.
As of the first day of the Offering Period beginning December 1, 2020,2023, approximately 681660 employees of our Company and its participating subsidiaries, including all of our Company’s named executive officers, were eligible to participate in the ESPP.
Our Company has designated the following entities as “participating subsidiaries”: The Macerich Partnership, L.P., Macerich Management Company, Brooklyn Kings Plaza LLC, Valley Stream Green Acres LLC, Queens Center SPE LLC, Macerich Niagara LLC, Wilton Mall, LLC and WMAP, L.L.C. The participating subsidiaries may be changed by our Company from time to time.
Limits on Authorized Shares; Limits on Contributions.Contributions. If stockholders approve the amendment and restatement of our ESPP, a maximum of 1,291,1171,791,117 shares of Common Stock will be available for purchase and issuance under our ESPP, counting from its beginning in 2003. Approximately 658,5641,208,244 shares of Common Stock have been purchased under our ESPP to date, which would make the maximum number of shares available for future purchase under our ESPP approximately 632,553.82,873. See the “—Dilution Analysis” section below for more information on our ESPP share limit relative to the Company’s total number of outstanding shares.
Participation in our ESPP is also subject to the following limits: • A participant cannot contribute more than the lesser of 15% or $26,000 of his or her base salary or regular gross pay per calendar year. • A participant will not be granted an option under our ESPP if it would cause the participant to own stock and/or hold outstanding options to purchase stock representing 5% or more of the total combined voting power or value of all classes of stock of our Company or one of its subsidiaries. • A participant will not be granted an option under our ESPP if it would cause the participant to own equity shares of our Company in excess of 5.0% of the lesser of the number or value of the then-outstanding equity shares (except as otherwise permitted under our Company’s charter).
Antidilution Adjustments.Adjustments. As is customary in stock incentive plans of this nature, the number and kind of shares available under our ESPP, as well as ESPP purchase prices and share limits, are subject to adjustment in the case of certain corporate events. These events include reorganizations, mergers, combinations, consolidations, recapitalizations, reclassifications, stock splits, stock dividends, asset sales or other similar unusual or extraordinary corporate events, or extraordinary dividends or other distributions of property to our stockholders.
Termination of Participation. Participation. A participant’s election to participate in our ESPP generally will continue in effect for all Offering Periods until the participant files a new election that takes effect or the participant ceases to participate in our ESPP. A participant’s participation in our ESPP generally will terminate if, prior to the applicable Exercise Date, the participant ceases to be employed by our Company or one of its participating subsidiaries or the participant is no longer customarily employed for at least 1,000 hours on an annualized basis.2021 PROXY STATEMENT 69
PROPOSAL 4: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN
If a participant’s ESPP participation terminates during an Offering Period for any of the reasons discussed in the preceding paragraph, he or she will no longer be permitted to make contributions to our ESPP for that Offering Period and, subject to limited exceptions, his or her option for that Offering Period will automatically terminate and his or her ESPP account balance will be paid to him or her in cash without interest. Such termination will not have any effect upon the participant’s ability to participate in any succeeding Offering Period, provided that the applicable eligibility and participation requirements are again then met.
Transfer Restrictions.Restrictions. A participant’s rights with respect to options or the purchase of shares under our ESPP, as well as contributions credited to his or her ESPP account, may not be assigned, transferred, pledged or otherwise disposed of in any way except by will or the laws of descent and distribution.Administration.
Administration. Our ESPP is administered by our Board or by a committee appointed by our Board. Our Board has appointed our Compensation Committee as the current administrator of our ESPP. The administrator has full power and
PROPOSAL 2: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN discretion to adopt, amend or rescind any rules and regulations for carrying out our ESPP and to construe and interpret our ESPP. Decisions of the ESPP administrator with respect to our ESPP are final and binding on all persons.
No Limit on Other Plans. Plans. Our ESPP does not limit the ability of our Board or any committee of our Board to grant awards or authorize any other compensation, with or without reference to our Company’s Common Stock, under any other plan or authority.Amendments.
Amendments. Our Board generally may amend or terminate our ESPP at any time and in any manner, provided that the then-existing rights of participants are not materially and adversely affected thereby. Stockholder approval for an amendment to our ESPP will be obtained to increase share authority under our ESPP or if otherwise required by applicable law or stock exchange rules or if deemed necessary or advisable by our Board of Directors.Termination.
Termination. Our ESPP will terminate when all of the shares authorized under our ESPP have been purchased, unless our Board terminates our ESPP earlier.
ESPP FEDERAL INCOME TAX CONSEQUENCES OF OUR ESPP
The following summarizes the current federal income tax principles applicable to our ESPP, but is not intended to be exhaustive and does not describe state, local, or international tax consequences.
Our ESPP is designed to operate on substantially the same terms as an “employee stock purchase plan” under Section 423 of the Code. Our Company’s corporate structure makes it ineligible to maintain such a plan. Therefore, certain tax benefits available to participants in a Section 423 plan are not available under our ESPP. Participant contributions to our ESPP are made on an after-tax basis. That is, a participant’s ESPP contributions are deducted from compensation that is taxable to the participant and for which our Company is generally entitled to a tax deduction.
Generally, no taxable income is recognized by a participant with respect to the grant of his or her ESPP option. Our Company will have no tax deduction with respect to the grant of an ESPP option.
Upon the exercise of an ESPP option, the participant will recognize ordinary income in an amount equal to the difference between the fair market value of the shares on the Exercise Date and the purchase price paid for the shares, and our Company generally will be entitled to a corresponding tax deduction. Upon a subsequent sale of the shares acquired upon the exercise of an ESPP option, the participant will recognize capital gain or loss based on the difference between the sale price received for the shares and the fair market value of the shares on the Exercise Date. Such capital gain will be short-term or long-term capital gain depending on the length of time that the participant holds the shares after exercise and prior to the sale. Our Company will not be entitled to a tax deduction with respect to any capital gain realized by a participant on a sale of shares.
SECURITIES UNDERLYING AWARDS
The closing price of a share of our Common Stock as of March 31, 202128, 2024 was $11.70$17.23 per share. Our Company previously has registered under the Securities Act, the issuance of 750,0001,250,000 (adjusted due to stock dividend to 791,117)1,291,117) shares of Common Stock available for issuance under our ESPP. If the amendment of our ESPP is approved by stockholders, our Company plans to register the issuance of an additional 500,000 shares of Common Stock available for issuance under our ESPP. 70 2021 PROXY STATEMENT
PROPOSAL 4: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN
SPECIFIC BENEFITS
The specific benefits that will be received by or allocated to particular eligible executives or groups of employees under our ESPP cannot be determined at this time because the amount of contributions set aside to purchase shares of Common Stock under our ESPP (subject to the limitations discussed above) is within the discretion of each participant. The maximum levels of participation and benefits are described above.
As of March 31, 2021,2024, the Company had outstanding 196,854,270215,750,149 shares of Common Stock. The approximately 632,553582,873 shares that would be available for issuance under our ESPP if stockholders approve this proposal represent 0.32%0.27% of the issued and outstanding shares of our Company as of that date. In 2018, 20192021, 2022 and 2020,2023 Common Stock purchases under our ESPP represented a total of 35,293143,191 shares, 58,191179,723 shares and 265,386226,766 shares, respectively. Our Compensation Committee recommended to our Board that an additional 500,000 shares be made available under our ESPP in order to provide a pool of shares sufficient for approximately fivethree years of awards (assuming that historic rates of issuance will
PROPOSAL 2: AMENDMENT AND RESTATEMENT OF OUR EMPLOYEE STOCK PURCHASE PLAN continue). Our Compensation Committee determined that reserving shares sufficient for approximately fivethree years of ESPP purchases is in line with the practices of other public companies with respect to similar broad-based employee stock purchase programs.
Because the amount of contributions set aside to purchase shares of Common Stock under our ESPP (subject to the limitations discussed above) is within the discretion of each participating employee and the purchase price for the shares will be affected by changes in the value of such stock, it is not possible to calculate the amount of dilution that may ultimately result from such purchases.
VOTE REQUIRED AND RECOMMENDATION
Our Board believes that the continuation of our ESPP will promote the interests of our Company and its stockholders and continue to enable our Company to attract, retain and reward persons important to our Company’s success.
Members of our Board who are also employees or officers of our Company are eligible to participate in our ESPP and thus have a personal interest in the approval of the amendment and restatement ofto our ESPP.
Approval of the amendment and restatement ofto our ESPP requires the affirmative vote of a majority of the votes cast on the matter at our Annual Meeting in person or by proxy. In addition, the rules of the NYSE require that votes for the proposal must be at least a majority of all of the votes cast on the proposal (including votes forAbstentions and against and abstentions). Accordingly, abstentions shall be included in determining the number of votes cast on the proposal, thus having the effect of a vote against the proposal. Broker broker non-votes, if any, are not counted in determining the number of votes cast and will therefore have no effect on the outcome.
IN LIGHT OF THE FACTORS DESCRIBED ABOVE AND IN THIS PROXY STATEMENT, INCLUDING THE LIMITED SIZE OF THE REQUEST FOR SHARES IN THIS PROPOSAL AND THE FACT THAT THE ABILITY TO CONTINUE TO PROVIDE EQUITY COMPENSATION TO EMPLOYEES ON A BROAD BASIS IS VITAL TO OUR COMPANY’S ABILITY TO CONTINUE TO ATTRACT AND RETAIN EMPLOYEES IN THE COMPETITIVE LABOR MARKETS IN WHICH IT COMPETES, OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OFTO OUR EMPLOYEE STOCK PURCHASE PLAN. PROXIES RECEIVED WILL BE VOTED “FOR” THE APPROVAL OF THE AMENDMENT AND RESTATEMENT OFTO OUR EMPLOYEE STOCK PURCHASE PLAN UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY. 2021
2024 PROXY STATEMENT 7167
PROPOSAL 5:3: NON-BINDING ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS We are providing our stockholders with the opportunity to cast a non-binding, advisory vote on the compensation of our named executive officers as disclosed pursuant to the SEC’s executive compensation disclosure rules and set forth in this Proxy Statement (including in the compensation tables and the narrative discussion accompanying those tables as well as in the Compensation Discussion and Analysis). As described more fully under the Compensation Discussion and Analysis section, beginning on page 28 of this Proxy Statement, our executive compensation program is guided by the following philosophy and objectives: •Our objective is to closely align executive compensation with the creation of stockholder value, with a balanced focus on both short-term and long-term performance and a substantial emphasis on total stockholder return. We believe our executive compensation policies and practices appropriately align the interests of our executives with those of our stockholders through a combination of base salary, annual incentive compensation awards and long-term incentive equity awards. •Our executive compensation program is designed to attract, retain and reward experienced, highly motivated executives who are capable of leading our Company effectively. The Compensation Committee believes strongly in linking compensation to performance and has designed our compensation program to deliver total pay that is primarily linked to overall business results while also recognizing individual performance. The Compensation Committee utilizes a combination of cash and equity-based compensation to provide appropriate incentives for executives to achieve our business objectives as well as further align their interests with our stockholders and encourage their long-term commitment to our Company. We urge our stockholders to read the Compensation Discussion and Analysis section of this Proxy Statement, which describes in more detail how our executive compensation policies and practices are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narrative discussion that accompanies the compensation tables which provide detailed information on the compensation of our named executive officers. The Compensation Committee and our Board believe that the policies and procedures described in the Compensation Discussion and Analysis have enabled our Company to attract, motivate and retain highly skilled executives whose performance and contributions have contributed to our Company’s success. In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-Frank Act) and the related rules of the SEC, our Board will request your non-binding, advisory vote on the following resolution at our Annual Meeting: RESOLVED, that the compensation paid to our named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby approved. This proposal to approve the compensation paid to our named executive officers is advisory in nature and, therefore, not binding on our Company, our Board or our Compensation Committee and will not be construed as overruling a decision by, or creating or implying any additional duty for, our Company, our Board or our Compensation Committee. However, the Compensation Committee, which is responsible for reviewing and approving the compensation for our executive officers and reviewing our overall compensation structure and philosophy, values input from our stockholders and will consider the result of the vote when making future compensation decisions for our named executive officers. At our 2023 annual meeting of stockholders held on May 31, 2023, our stockholders voted on, among other matters, a proposal regarding the frequency of holding a non-binding, advisory vote on the compensation of our named executive officers. A majority of the votes cast on the frequency proposal were cast in favor of holding a non-binding, advisory vote on the compensation of our Company’s named executive officers every year, which was consistent with the recommendation of our Board of Directors. Our Board of Directors considered the voting results with respect to the frequency proposal and other factors, and our Board determined that our Company’s current policy is to hold a non-binding, advisory vote on the compensation of our named executive officers every year. It is expected that the next such vote will occur at our 2025 annual meeting of stockholders. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON A NON-BINDING, ADVISORY BASIS, OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE SEC’S EXECUTIVE COMPENSATION DISCLOSURE RULES. PROXIES RECEIVED WILL BE VOTED “FOR” APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.
PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS OUR COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee has appointed KPMG LLP as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2021.2024. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm. KPMG LLP has served as our independent registered public accounting firm continuously since 2010. In order to assure continuing external auditor independence, the Audit Committee periodically considers whether it is appropriate to adopt a policy of rotating the independent registered public accounting firm. Further, in conjunction with the mandated rotation of the independent registered public accounting firm’s lead engagement partner, the Audit Committee and its Chairperson are directly involved in the selection of KPMG LLP’s new lead engagement partner. Based on its most recent evaluation of KPMG LLP, the members of the Audit Committee believe that the continued retention of KPMG LLP as our independent registered public accounting firm is in the best interests of our Company and its stockholders and has recommended that the stockholders ratify the appointment of KPMG LLP as our Company’s independent registered public accounting firm for the fiscal year ending December 31, 2021.2024. Although ratification by stockholders is not required by law, our Board has determined that it is desirable to request approval of this appointment by our stockholders. If our stockholders do not ratify the appointment, the Audit Committee will reconsider whether to retain KPMG LLP, and may decide to retain the firm notwithstanding the vote. Even if the appointment is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interests of our Company. In addition, if KPMG LLP should decline to act or otherwise become incapable of acting, or if the appointment should be discontinued, the Audit Committee will appoint substitute independent public accountants. A representative of KPMG LLP will be present at our Annual Meeting, will be given the opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2021.2024. PROXIES RECEIVED WILL BE VOTED “FOR” RATIFICATION UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY. 72 2021
ADDITIONAL MATTERS
The cost of solicitation of Proxies for our Annual Meeting will be paid by our Company. Solicitation will be made primarily by mail, but our regular employees, without additional remuneration, may solicit Proxies by telephone, e-mail, facsimile and personal interviews. In addition, Innisfree M&A Incorporated will assist in the solicitation of Proxies and our Company anticipates a fee for proxy solicitation services of approximately $20,000 plus out-of-pocket costs. We will also request persons, firms and corporations holding shares in their names or in the names of their nominees, which are beneficially owned by others, to send Proxy materials to and obtain Proxies from such beneficial owners. We will reimburse such holders for their reasonable expenses.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINEES For a stockholder to present a matter at our Annual Meeting other than pursuant to Rule 14a-8 under the Exchange Act, including nominations for persons for election to our Board of Directors, our Secretary must have received written notice thereof on or after March 20, 20212, 2024 and on or before 5:00 p.m., Pacific Time, on April 19, 20211, 2024 (60 to 90 days prior to the first anniversary of our 20202023 annual meeting of stockholders) as specified in our charter and Bylaws, and such notice must have satisfied the additional requirements set forth in our Bylaws. Our Secretary did not receive any such notice. For a stockholder to submit a proposal pursuant to Rule 14a-8 under the Exchange Act for inclusion in our proxy statement and form of proxy for our annual meeting of stockholders in 2022,2025, it must be received by our Company by December 30, 2021.20, 2024. Such a proposal must also comply with the requirements as to form and substance established by the SEC for such proposals. For an eligible stockholder or group of stockholders to nominate a director nominee for election at our 20222025 annual meeting of stockholders pursuant to the proxy access provision of our Bylaws, such eligible stockholder or group of stockholders must comply with the then current advance notice requirements in our Bylaws and deliver the proposal to our principal executive offices on or after February 27, 2022March 1, 2025 and on or before 5:00 p.m., Pacific Time, on March 29, 202231, 2025 (60 to 90 days prior to the first anniversary of our Annual Meeting) in order for such proposal to be considered timely. In addition, our Bylaws require the eligible stockholder or group of stockholders to update and supplement such information as of specified dates. Any such proposal should be mailed to: The Macerich Company, 401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401, Attn: Secretary. A stockholder otherwise desiring to bring a proposal before the 20222025 annual meeting of stockholders (including generally any proposal relating to the nomination of a director to be elected to our Board of Directors) other than through the proxy access provisions of our Bylaws must comply with the then current advance notice and information requirements in our Bylaws, including the information required under Rule 14a-19 under the Exchange Act for any director nominee, and deliver the proposal to our principal executive offices on or after February 27, 2022March 1, 2025 and on or before 5:00 p.m., Pacific Time, on March 29, 202231, 2025 (60 to 90 days prior to the first anniversary of our Annual Meeting) in order for such proposal to be considered timely. Any such proposal should be mailed to: The Macerich Company, 401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401, Attn: Secretary. Copies of our charter and Bylaws may be obtained without charge by providing a written request to our Secretary at that address.
HOUSEHOLDING OF PROXY MATERIALS The SEC has adopted rules that permit companies and intermediaries (such as banks and brokers) to satisfy the delivery requirements for proxy statements and annual reports with respect to two or more stockholders sharing the same address by delivering a single set of proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding” potentially means extra convenience for stockholders and cost savings for companies. A number of banks and brokers with account holders that are beneficial holders of our Common Stock will be householding our Company’s proxy materials. If you hold your shares through a bank or broker and have received notice from your bank or broker that it will be householding communications to your address, householding will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive separate proxy materials, please notify your bank or broker, or contact Broadridge Financial Solutions, Inc., toll-free at 1-800-542-1061 or at Broadridge Financial Solutions, Inc., Attn: Householding Department, 51 Mercedes Way, Edgewood, New York 11717. Our Company undertakes, upon oral or written request, to deliver promptly a second copy of our Company’s proxy materials to a stockholder at a shared address to which a single copy of the document 2021 PROXY STATEMENT 73
ADDITIONAL MATTERS
was delivered. Stockholders whothat currently receive multiple copies of the proxy materials at their address and would like to request householding of the communications should contact their bank or broker or The Macerich Company, Attn: Investor Relations, 401 Wilshire Boulevard, Suite 700, Santa Monica, California 90401. DELINQUENT SECTION 16(A) REPORTS
Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Officers, directors and greater than 10% stockholders are required by the SEC’s regulations to furnish our Company with copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such reports furnished to our Company during and with respect to the fiscal year ended December 31, 2020, all Section 16(a) filing requirements applicable to our executive officers, directors and greater than 10% beneficial owners were satisfied on a timely basis. However, Mr. Dana Anderson, our Vice Chairman Emeritus, previously failed to file a Form 5 to report gifts of shares of our Common Stock to his sons in 2012, which gifts were subsequently reported on a Form 4 filed on December 2, 2020.
Our Board of Directors does not know of any matter other than those described in this Proxy Statement which will be presented for action at our Annual Meeting. If other matters are presented, Proxies will be voted in accordance with the discretion of the Proxy holders. REGARDLESS OF THE NUMBER OF SHARES YOU OWN, YOUR VOTE IS IMPORTANT TO OUR COMPANY.
FORWARD-LOOKING INFORMATION Information set forth in our Proxy Statement and the accompanying materials contains “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act and Section 21E of the Exchange Act), which reflectcan be identified by the Company’s expectations regarding future events and plans. Generally, theuse of words such as “will,” “expects,” “anticipates,” “assumes,” “targets,“believes,” “goals,“estimated,” “guidance,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “may,” “will,” “should,” “could,” “continues,” variations of such words“scheduled” and similar expressions identifythat do not relate to historical matters, and include expectations regarding the Company’s future operational results as well as development, redevelopment and expansion activities. You are cautioned that any such forward-looking statements. Thestatements are not guarantees of future performance and involve risks, uncertainties and other factors that may cause actual results, performance or achievements of the Company to vary materially from those anticipated, expected or projected. Such factors include, among others, general industry, as well as global, national, regional and local economic and business conditions, including the impact of elevated interest rates and inflation, which will, among other things, affect demand for retail space or retail goods, availability and creditworthiness of current and prospective tenants, anchor or tenant bankruptcies, closures, mergers or consolidations, lease rates, terms and payments, interest rate fluctuations, availability, terms and cost of financing, and cost of operating and capital expenses; adverse changes in the real estate markets including, among other things, competition from other companies, retail formats and technology, risks of real estate development and redevelopment (including rising inflation, supply chain disruptions and construction delays), and acquisitions and dispositions; the adverse impacts from any future pandemic, epidemic or outbreak of any highly infectious disease on the U.S., regional and global economies and the financial condition and results of operations of the Company and its tenants; the liquidity of real estate investments; governmental actions and initiatives (including legislative and regulatory changes); environmental and safety requirements; and terrorist activities or other acts of violence which could adversely affect all of the above factors. You are directed to the Company’s various filings with the SEC, including the Annual Report on Form 10-K for the year ended December 31, 2023, for a discussion of such risks and uncertainties, which discussion is incorporated herein by reference. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of ourthis Proxy Statement. The Company does not intend, and undertakes no obligation, to update any forward-looking information to reflect events or circumstances after the date of this Proxy Statement and involve a numberor to reflect the occurrence of known and unknown assumptions, risks, uncertainties and other factors, which may be difficultunanticipated events unless required by law to predict and beyond the control of the Company, which could cause actual results to differ materially from those contained in the forward-looking statements. do so.
APPENDIX I RECONCILIATION OF NON-GAAP MEASURES The following factors, among others, could cause actual resultsreconciles net (loss) income attributable to differour Company to Adjusted EBITDA, NOI and NOI-Same Centers for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands): | | | | | | | | | | | | | | 2023 | 2022 | | Net loss attributable to our Company | | ($274,065) | | ($66,068) | | | Interest expense | | 302,103 | | 306,000 | | | Depreciation and amortization | | 440,622 | | 446,323 | | | Noncontrolling interests in the Operating Partnership | | (11,389) | | (2,660) | | | Gain on extinguishment of debt, net | | (8,208) | | - | | | Loss on sale or write down of assets, net | | 273,124 | | 17,986 | | | Income tax (benefit) expense | | (494) | | 705 | | | Distributions on preferred units | | 348 | | 348 | | | Adjusted EBITDA | | 722,041 | | 702,634 | | | REIT general and administrative expenses | | 29,238 | | 27,164 | | | Management Companies' revenues | | (30,185) | | (28,512) | | | Management Companies' operating expenses | | 70,060 | | 67,799 | | | Leasing expense, including joint ventures at pro rata | | 39,218 | | 35,451 | | | Straight-line and above/below market adjustments | | (4,294) | | (11,190) | | | NOI - All Centers | | 826,078 | | 793,346 | | | NOI of non-Same Centers | | (15,367) | | (4,283) | | | NOI - Same Centers | | 810,711 | | 789,063 | | | Lease termination income of Same Centers | | (13,200) | | (25,226) | | | NOI - Same Centers, excluding lease termination income | | $ | 797,511 | | $ | 763,837 | | | | | | | | 2022 | 2021 | | Net income (loss) attributable to our Company | | ($66,068) | | $14,263 | | Interest expense | | 306,000 | | 285,200 | | Depreciation and amortization | | 446,323 | | 464,846 | | Noncontrolling interests in the Operating Partnership | | (2,660) | | 714 | | Loss on extinguishment of debt, net | | - | | 1,007 | | (Gain) loss on sale or write down of assets, net | | 17,986 | | (61,077) | | Income tax expense | | 705 | | 6,948 | | Distributions on preferred units | | 348 | | 357 | | Adjusted EBITDA | | 702,634 | | 712,258 | | REIT general and administrative expenses | | 27,164 | | 30,056 | | Management Companies' revenues | | (28,512) | | (26,023) | | Management Companies' operating expenses | | 67,799 | | 61,030 | | Leasing expense, including joint ventures at pro rata | | 35,451 | | 27,212 | | Straight-line and above/below market adjustments | | (11,190) | | (17,639) | | NOI - All Centers | | 793,346 | | 786,894 | | NOI of non-Same Centers | | (4,708) | | (51,263) | | NOI - Same Centers | | 788,638 | | 735,631 | | Lease termination income of Same Centers | | (25,226) | | (25,046) | | NOI - Same Centers, excluding lease termination income | | $ | 763,412 | | $ | 710,585 | | NOI - Same Centers Percentage Change | | 2.80% | 7.26% | | NOI - Same Centers Percentage Change, excluding lease termination income | | 4.47% | 7.49% |
The following reconciles net (loss) income per share attributable to our Company-diluted to FFO per share-diluted for the years ended December 31, 2023, 2022 and 2021(1): | | | | | | | | | | | | | | | | | 2023 | 2022 | 2021 | | Net (loss) income per share attributable to our Company - diluted | | ($1.28) | | ($0.31) | | $0.07 | | | Per share impact of depreciation and amortization of real estate | | 1.93 | | 1.94 | | 2.17 | | | Per share impact of loss (gain) on sale or write down of assets, net | | 1.27 | | 0.18 | | (0.21) | | | FFO per share – basic and diluted | | $1.92 | | $1.81 | | $2.03 | | | Per share impact of financing expense in connection with Chandler Freehold | | (0.12) | | 0.15 | | – | | | FFO per share – basic and diluted, excluding financing expense in connection with Chandler Freehold | | $1.80 | | $1.96 | | $2.03 | | | Per share impact of extinguishment of debt and accrued default interest expense | | – | | – | | – | | | FFO per share excluding financing expense in connection with Chandler Freehold, extinguishment of debt and accrued default interest expense – diluted | | $1.80 | | $1.96 | | $2.03 | |
(1)For the definition of FFO see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Funds from those set forthOperations (“FFO”)” on pages 52-53 in the forward-looking statements: the impact of COVID-19 on our business and the business of our tenants and the economy generally and other risks and uncertainties detailed in the risks identified in Part I, Item 1A. Risk Factors within our Annual Report on Form 10-K filed with for the SEC on February 24, 2021 and in our other filings made with the SEC. The Company disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or factors, new information, future events or otherwise, except as may be required by law.74 2021 PROXY STATEMENT
year ended December 31, 2023.
APPENDIX A
Text of Proposed Amendment to our Charter to Increase the Number of Authorized Shares of Common Stock.
If approved, Article FIFTH, subsection (a) of our charter will be amended to read in its entirety as follows:
FIFTH: | “The Corporation has authority to issue 575,000,000 shares of stock, consisting of 500,000,000 shares of Common Stock, par value $0.01 per share (“Common Stock”), 15,000,000 shares of Preferred Stock, par value $0.01 per share (“Preferred Stock”), and 60,000,000 shares of Excess Stock, par value $0.01 per share (“Excess Stock”). The aggregate par value of all authorized shares of stock having par value is $5,750,000.”
|
2021
2024 PROXY STATEMENT A-1I-2
FIRST AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN As
Whereas, The Macerich Company (the “Company”) has established and maintains The Macerich Company Employee Stock Purchase Plan, originally effective April 1, 2003, amended and restated effective June 1, 2021 (the “Plan”);
2021 PROXY STATEMENTB-i
TABLE OF CONTENTS
B-ii 2021 PROXY STATEMENT
THE MACERICH COMPANY
EMPLOYEE STOCK PURCHASE PLAN
The following constitute the provisions of The Macerich Company Employee Stock Purchase Plan, as amended and restated effective June 1, 2021. The Plan originally was adopted by the Board on April 1, 2003, and approved by the Corporation’s stockholders on May 28, 2003.
The purpose of this Plan is to assist Eligible Employees in acquiring a stock ownership interest in the Corporation at a favorable price and upon favorable terms. This Plan is also intended to encourage Eligible Employees to remain in the employWhereas, Section 19(d) of the Corporation or a Participating Subsidiary and to provide them with an additional incentive to advancePlan provides for the best interestsamendment of the Corporation. This Plan is not intended to qualify as an “employee stock purchase plan” under Section 423 of the Code because most Eligible Employees are employed by Participating Subsidiaries that are ineligible to provide such a plan to their employees. The Plan and all offerings and Options hereunder are intended to, and shall be interpreted in all respects to, comply with Section 409A of the Code and the regulations and authorities promulgated thereunder.
Capitalized terms used herein which are not otherwise defined shall have the following meanings.
“Account” means the bookkeeping account maintained by the Corporation, or by a recordkeeper on behalf of the Corporation, for a Participant pursuant to Section 7(a).
“Beneficially Own” means to own Equity Shares, directly or indirectly through the application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code.
“Board” means the Board of Directors of the Corporation.
“Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.
“Committee” means the committee appointed by(the “Board”);
Whereas, the Board deems it advisable to administer this Plan pursuant to Section 12.“Commission” means the U.S. Securities and Exchange Commission.
“Common Stock” means the Common Stock of the Corporation and such other securities or property as may become the subject of Options pursuant to an adjustment made under Section 17.
“Compensation” means (1) if the Eligible Employee is a salaried employee, the Eligible Employee’s regular salary from the Corporation (or the Participating Subsidiary that employs the Eligible Employee, as applicable) for the relevant period of time, or (2) if the Eligible Employee is not a salaried employee, the Eligible Employee’s regular gross pay from the Corporation (or the Participating Subsidiary that employs the Eligible Employee, as applicable) for his or her regularly-scheduled work week(s) during the relevant period of time. Compensation includes any amounts contributed as salary reduction contributions to a plan qualifying under Section 401(k), 125 or 129 of the Code and, for purposes of the 15% limit in Section 6(b), amounts deferred under nonqualified deferred compensation plans. Any other form of remuneration is excluded from Compensation, including (but not limited to) the following: overtime payments, commissions, prizes, awards, relocation or housing allowances, stock option exercises, stock appreciation right payments, the vesting or grant of restricted stock, performance awards, auto allowances, tuition reimbursement and other forms of imputed income, bonuses, incentive compensation, special payments, fees, and allowances.
“Constructively Own” means to own Equity Shares, directly or indirectly through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code.
“Contributions” means the bookkeeping amounts credited to the Account of a Participant pursuant to this Plan, equal in amount to the amount of Compensation that the Participant elected to contribute for the purchase of Common Stock under and in accordance with this Plan.
“Corporation” means The Macerich Company, a Maryland corporation, and its successors.
2021 PROXY STATEMENT B-1
“Eligible Employee” means, any employee of the Corporation or of any Participating Subsidiary. Notwithstanding the foregoing, “Eligible Employee” shall not include any employee who:
| (a) | has been employed by the Corporation or a Subsidiary for less than forty-five (45) days;
|
| (b) | is providing part-time services and has been employed by the Corporation or a Subsidiary for less than one year; or
|
| (c) | is providing part-time services and whose customary employment is for 19.23 hours or less per week (which is the equivalent of one thousand (1,000) hours or less on an annualized basis).
|
For purposes of the forty-five (45) day employment requirement in (a), employment by a corporation, partnership, limited liability company or other entity prior to the acquisition of such entity by the Corporation or a Subsidiary shall be considered as employment with the Corporation or Subsidiary, as the case may be, and employment in the management of any shopping mall or other property immediately prior to the Corporation’s or a Subsidiary’s acquisition of a direct or indirect interest in, or becoming the manager of, such property of any individual who becomes an employee of the Corporation or Subsidiary in connection with such event shall be counted as employment with the Corporation or Subsidiary, as the case may be, each as determined in the discretion of the Committee.
“Equity Shares” means shares that are either Common Stock or Preferred Stock.
“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended from time to time.
“Exercise Date” means, with respect to an Offering Period, the last day of that Offering Period, provided that if the last day of the Offering Period falls on a weekend or holiday, the Exercise Date shall be the first business day of the Company following such date.
“Exercise Price” means the per share exercise price of an Option as determined in accordance with Section 8(b).
“Fair Market Value” on any date means:
| (a) | if the Common Stock is listed or admitted to trade on a national securities exchange, the closing price of a share of Common Stock on the Composite Tape, as published in The Wall Street Journal or reported by such other source as the Committee deems reliable, of the principal national securities exchange on which such stock is so listed or admitted to trade, on such date, or, if there is no trading of the Common Stock on such date, then the closing price of a share of Common Stock as quoted on such Composite Tape and as published in the Wall Street Journal or reported by such other source as the Committee deems reliable on the next preceding date on which there was trading in the shares of Common Stock;
|
| (b) | if the Common Stock is not listed or admitted to trade on a national securities exchange but is traded on the Nasdaq Stock Market or the Nasdaq Capital Market or through a similar market, the closing sales price for a share of Common Stock (or the closing bid for a share of Common Stock if no sales of Common Stock were reported on the relevant date) as quoted on such exchange or market (or, in the event of more than one such quote, as quoted on the exchange or market with the greatest volume of trading in the Common Stock on the relevant date) on such date or, if such date is not a market trading date, on the last market trading day prior to such date, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or
|
| (c) | in the absence of market or exchange data required to determine Fair Market Value pursuant to the foregoing, the value as established by the Committee at such time for purposes of this Plan.
|
“Grant Date” means, with respect to an Offering Period, the first day of that Offering Period.
“Offering Period” means each six-month period commencing June 1 or December 1 and ending the immediately following November 30 or May 31, respectively.
“Option” means the stock option to acquire shares of Common Stock granted to a Participant pursuant to Section 8.
“Participant” means an Eligible Employee who has elected to participate in this Plan and who has filed a valid and effective Participation Agreement to make Contributions pursuant to Section 6.
“Participating Subsidiary” means each of The Macerich Partnership, L.P., Macerich Management Company, Macerich Partners of Colorado LLC, Brooklyn Kings Plaza LLC, Valley Stream Green Acres LLC, Queens Center SPE LLC, WMAP, L.L.C., Great Northern SPE, LLC, Rotterdam Square, LLC, and Wilton Mall, LLC, during such periods of time as such entities are Subsidiaries, and each other Subsidiary designated by the Corporation pursuant to Section 19(e).
B-2 2021 PROXY STATEMENT
“Participation Agreement” means the written agreement filed by an Eligible Employee with the Corporation pursuant to Section 6 to participate in this Plan.
“Plan” means The Macerich CompanyEmployee Stock Purchase Plan, as set forth in this amendment and restatement and as it may be amended from time to time.
“Preferred Stock” means the Preferred Stock of the Corporation.
“Restatement Date” means June 1, 2021, the effective date of this amendment and restatement of the Plan.
“Subsidiary” means any corporation, partnership, limited liability company or other entity controlled (by stock ownership or otherwise) directly or indirectly by, or under common control with, the Corporation.
Any person employed as an Eligible Employee as of a Grant Date shall be eligible to participate in this Plan during the Offering Period in which such Grant Date occurs, subject to the Eligible Employee satisfying the requirements of Section 6.
4. | STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
|
| (a) | Aggregate Share Limit. Subject to the provisions of Section 17, the capital stock that may be delivered under this Plan will be shares of the Corporation’s authorized but unissued Common Stock, any of its shares of Common Stock held as “phantom” treasury shares, and any of its shares of Common Stock purchased on the open market for re-delivery under this Plan. The maximum number of shares of Common Stock that may be delivered pursuant to Options granted under this Plan from the inception of the Plan is one million, two hundred ninety one thousand, one hundred and seventeen (1,291,117) shares, subject to adjustments pursuant to Section 17.
|
| (b) | Shares Not Actually Delivered. Shares that are subject to or underlie Options which for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under this Plan shall again, except to the extent prohibited by law, be available for subsequent Options under the Plan.
|
During the term of this Plan, the Corporation will grant Options to purchase shares of Common Stock in each Offering Period to all Participants in that Offering Period. Each Option shall become effective on the Grant Date of the Offering Period with respect to which the Option is granted. The term of each Option shall be the duration of the related Offering Period and shall end on the Exercise Date of that Offering Period. Offering Periods shall continue until this Plan is terminated in accordance with Section 18 or 19.
| (a) | Enrollment. An Eligible Employee may become a participant in this Plan by completing a Participation Agreement on a form approved by and in a manner prescribed by the Committee (or its delegate). To become effective, a Participation Agreement must be signed by the Eligible Person and be filed with the Corporation at the time specified by the Committee, but in all cases prior to the start of the Offering Period with respect to which it is to become effective, and must set forth a whole percentage (or, if the Committee so provides, a stated amount) of the Eligible Employee’s Compensation to be credited to the Participant’s Account as Contributions each pay period.
|
| (b) | Contribution Limits. Notwithstanding the foregoing, a Participant may not elect to contribute more than the lesser of fifteen percent (15%), or twenty-six thousand dollars ($26,000), of his or her Compensation for Offering Periods ending in any one calendar year. The Committee may establish further limitations, rules and procedures regarding Plan Contributions, in its complete and sole discretion.
|
| (c) | Content and Duration of Participation Agreements. Participation Agreements shall contain the Eligible Employee’s authorization and consent to the Corporation’s withholding from his or her Compensation the amount of his or her Contributions. An Eligible Employee’s Participation Agreement, and his or her participation election and withholding consent thereon, shall remain valid for all Offering Periods until (1) the Eligible Employee’s participation terminates pursuant to the terms hereof, (2) the Eligible Employee files a new Participation Agreement that becomes effective, or (3) the Committee requires that a new Participation Agreement be executed and filed with the Corporation.
|
2021 PROXY STATEMENT B-3
7. | METHOD OF PAYMENT OF CONTRIBUTIONS
|
| (a) | Participant Accounts. The Corporation shall maintain on its books, or cause to be maintained by a recordkeeper, an Account in the name of each Participant. The amount of Compensation elected to be applied as Contributions by a Participant shall be deducted from such Participant’s Compensation on each payday during the period for payroll deductions set forth below and such payroll deductions shall be credited to that Participant’s Account as soon as administratively practicable after such date. A Participant may not make any additional payments to his or her Account. A Participant’s Account shall be reduced by any amounts used to pay the Exercise Price of shares acquired, and by any other amounts distributed pursuant to Section 7(e), 9(b), 11, 18 or 19.
|
| (b) | Payroll Deductions. Subject to such other rules as the Committee may adopt, payroll deductions with respect to an Offering Period shall commence as of the first pay date which coincides with or immediately follows the applicable Grant Date and shall end on the last pay date which coincides with or immediately precedes the applicable Exercise Date, unless sooner terminated by the Participant as provided in Section 7(d) or 7(e) or until his or her participation terminates pursuant to Section 11.
|
| (c) | Changes in Contribution Elections. A Participant may discontinue, increase, or decrease the level of his or her Contributions (within Plan limits) by completing and filing with the Corporation, on such terms as the Committee (or its delegate) may prescribe, a new Participation Agreement which indicates such election. Subject to any other timing requirements that the Committee may impose, an election pursuant to this Section 7(c) shall be effective with the first Offering Period that commences after the Corporation’s receipt of such election. Except as contemplated by Sections 7(d) and 7(e), changes in Contribution levels may not take effect during an Offering Period. Other modifications or suspensions of Participation Agreements are not permitted.
|
| (d) | Discontinuance of Plan Contributions (Other Than a Withdrawal). A Participant may discontinue (but not increase or otherwise decrease) the level of his or her Contributions, by filing with the Corporation, on such terms as the Committee (or its delegate) may prescribe, a new Participation Agreement that indicates such election. Unless otherwise provided by the Committee, an election pursuant to this Section 7(d) shall be effective no earlier than the first payroll period that starts after the Corporation’s receipt of such election.
|
| (e) | Withdrawal During an Offering Period. A Participant may terminate his or her Contributions during an Offering Period (and receive a distribution of the balance of his or her Account in accordance with Section 11) by completing and filing with the Corporation, in such form and on such terms as the Committee (or its delegate) may prescribe, a written withdrawal form which shall be signed by the Participant. Such termination shall be effective as soon as administratively practicable after its receipt by the Corporation. A withdrawal election pursuant to this Section 7(e) with respect to an Offering Period shall only be effective, however, if it is received by the Corporation prior to the Exercise Date of that Offering Period (or such earlier deadline that the Committee may reasonably require to process the withdrawal prior to the applicable Exercise Date). Partial withdrawals of Accounts are not permitted.
|
| (f) | Leaves of Absence. During leaves of absence approved by the Corporation or a Participating Subsidiary, a Participant may continue participation in this Plan by cash payments to the Corporation on his normal paydays equal to the reduction in his Plan Contributions caused by his leave.
|
| (a) | Grant Date; Number of Shares. On each Grant Date, each Eligible Employee who is a participant during that Offering Period shall be granted an Option to purchase a number of shares of Common Stock. The Option shall be exercised on the Exercise Date. The number of shares of Common Stock subject to the Option shall be determined by dividing the Participant’s Account balance as of the applicable Exercise Date by the Exercise Price, subject to the limits set forth in Section 8(c).
|
| (b) | Exercise Price. The Exercise Price per share of the shares subject to an Option for an Offering Period shall be the lesser of: (1) 85% of the Fair Market Value of a share of Common Stock on the applicable Grant Date; or (2) 85% of the Fair Market Value of a share of Common Stock on the applicable Exercise Date. The Committee may, however, provide prior to the start of an Offering Period that the Exercise Price per share of Common Stock for that Offering Period shall be determined (1) based on a different discount amount (as opposed to a full 15% discount as contemplated by the preceding sentence) provided that in no event shall the applicable discount amount be greater than 15%, and/or (2) based on the applicable discount amount applied to the Fair Market Value of a share of Common Stock on the applicable Grant Date or Exercise Date (as opposed to the lesser of the Fair Market Value of a share on the Grant Date or the Fair Market Value of a share on the Exercise date as contemplated
|
B-4 2021 PROXY STATEMENT
| by the preceding sentence). Notwithstanding anything to the contrary in the preceding provisions of this Section 8(b), in no event shall the Exercise Price per share be less than the par value of a share of Common Stock.
|
| (c) | Limits on Share Purchases. Notwithstanding anything else contained herein, no Option shall be granted under this Plan to the extent:
|
| (1) | it would, if exercised, cause the person to own stock (within the meaning of Section 423 of the Code) possessing 5% or more of the total combined voting power or value of all classes of stock of the Corporation or of any Subsidiary; or
|
| (2) | it would, if exercised, cause the person to Beneficially Own or Constructively Own Equity Shares in excess of 5.0% of the lesser of the number or value of the then-outstanding Equity Shares, except as otherwise permitted in accordance with the Corporation’s charter.
|
For purposes of the foregoing, a right to purchase stock accrues when it first become exercisable during the calendar year. In determining whether the stock ownership of an Eligible Employee equals or exceeds the 5% limit set forth above, the rules of Section 424(d) of the Code (relating to attribution of stock ownership) shall apply, and stock that the Eligible Employee may purchase under outstanding options shall be treated as stock owned by the Eligible Employee.
| (a) | Purchase of Shares. Unless a Participant withdraws pursuant to Section 7(e) or the Participant’s Plan participation is terminated as provided in Section 11, his or her Option for the purchase of shares of Common Stock shall be exercised automatically on the Exercise Date for that Offering Period, without any further action on the Participant’s part, and the maximum number of whole shares of Common Stock subject to such Option (subject to the limits of Section 8(c)) shall be purchased at the Exercise Price with the balance of such Participant’s Account.
|
| (b) | Account Balance Remaining After Purchase. If any amount which is not sufficient to purchase a whole share remains in a Participant’s Account after the exercise of his or her Option on the Exercise Date: (1) such amount shall be credited to such Participant’s Account for the next Offering Period, if he or she is then a Participant; or (2) if such Participant is not a Participant in the next Offering Period, or if the Committee so elects, such amount shall be refunded to such Participant as soon as administratively practicable after such date. If the aggregate share limit of Section 4(a) is reached, any amount that remains in a Participant’s Account after the exercise of his or her Option on the Exercise Date to purchase the number of shares that he or she is allocated shall be refunded to the Participant as soon as administratively practicable after such date. If any amount which exceeds any of the limits set forth in Section 8(c) remains in a Participant’s Account after the exercise of his or her Option on the Exercise Date, such amount shall be refunded to the Participant as soon as administratively practicable after such date.
|
As soon as administratively practicable after the Exercise Date, the Corporation shall, in its discretion, deliver to each Participant a certificate representing the shares of Common Stock purchased upon exercise of his or her Option, provide for the crediting of such shares in book entry form in the name of the Participant, or provide for an alternative arrangement for the delivery of such shares to a broker or recordkeeping service for the benefit of the Participant. In the event the Corporation is required to obtain from any commission or agency authority to issue any such certificate or otherwise deliver such shares, the Corporation will seek to obtain such authority. If the Corporation is unable to obtain from any such commission or agency authority which counsel for the Corporation deems necessary for the lawful issuance of any such certificate or other delivery of such shares, or if for any other reason the Corporation cannot issue or deliver shares of Common Stock and satisfy Section 21, the Corporation shall be relieved from liability to any Participant except that the Corporation shall return to each Participant to whom such shares can not be issued or delivered the amount of the balance credited to his or her Account that would have otherwise been used for the purchase of such shares.
11. | TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
|
| (a) | General. Except as provided in Section 11(b) below, if a Participant ceases to be an Eligible Employee for any reason (including, without limitation, due to the Participant’s death, disability, quit, resignation or retirement, or due to a layoff or other termination of employment with or without cause), or if the Participant elects to withdraw from the Plan pursuant to Section 7(e), at any time prior to the last day of an Offering Period in which he or she participates, such Participant’s Account shall be paid to him or her (or, in the event of the Participant’s death, to the person or persons entitled thereto under Section 13) in cash, and such Participant’s Option and participation in the Plan shall automatically terminate as of the time that the Participant ceased to be an Eligible Employee.
|
2021 PROXY STATEMENT B-5
| (b) | Change in Eligible Status; Leave. If a Participant (1) ceases to be an Eligible Employee during an Offering Period but remains an employee of the Corporation or a Subsidiary through the Exercise Date (for example, and without limitation, due to a change in the Participant’s employer from the Corporation or a Participating Subsidiary to a non-Participating Subsidiary, if the Participant’s employer ceases to maintain the Plan as a Participating Subsidiary but otherwise continues as a Subsidiary, or if the Participant’s customary level of employment no longer satisfies the requirements set forth in the definition of Eligible Employee), or (2) during an Offering Period commences a sick leave, family leave, military leave, or other leave of absence approved by the Corporation or a Participating Subsidiary, and the Participant is an employee of the Corporation or a Subsidiary or on such leave as of the applicable Exercise Date, such Participant’s Contributions shall cease (subject to Section 7(f)), and the Contributions previously credited to the Participant’s Account for that Offering Period shall be used to exercise the Participant’s Option as of the applicable Exercise Date in accordance with Section 9 (unless the Participant makes a timely withdrawal election in accordance with Section 7(e), in which case such Participant’s Account shall be paid to him or her in cash in accordance with the first paragraph of this Section 11(a)).
|
| (c) | Re-Enrollment. A Participant’s termination from Plan participation precludes the Participant from again participating in this Plan during that Offering Period. However, such termination shall not have any effect upon his or her ability to participate in any succeeding Offering Period, provided that the applicable eligibility and participation requirements are again then met. A Participant’s termination from Plan participation shall be deemed to be a revocation of that Participant’s Participation Agreement and such Participant must file a new Participation Agreement to resume Plan participation in any succeeding Offering Period.
|
| (d) | Change in Subsidiary Status. For purposes of this Plan, if a Subsidiary ceases to be a Subsidiary, each person employed by that Subsidiary will be deemed to have terminated employment for purposes of this Plan, unless the person continues as an employee of the Corporation or another Subsidiary. For purposes of this Plan, if a Subsidiary ceases to be a Participating Subsidiary, each person employed by that Subsidiary will cease being an Eligible Employee, unless the person continues as an employee of the Corporation or another Participating Subsidiary.
|
| (a) | The Committee. The Board shall appoint the Committee, which shall be composed of not less than two members of the Board. The Board may, at any time, increase or decrease the number of members of the Committee, may remove from membership on the Committee all or any portion of its members, and may appoint such person or persons as it desires to fill any vacancy existing on the Committee, whether caused by removal, resignation, or otherwise. The Board may also, at any time, assume the administration of all or a part of this Plan, in which case references (or relevant references in the event the Board assumes the administration of only certain aspects of this Plan) to the “Committee” shall be deemed to be references to the Board. Action of the Committee with respect to this Plan shall be taken pursuant to a majority vote or by the unanimous written consent of its members. No member of the Committee shall be entitled to act on or decide any matter relating solely to himself or herself or solely to any of his or her rights or benefits under this Plan.
|
| (b) | Powers and Duties of the Committee. Subject to the express provisions of this Plan, the Committee shall supervise and administer this Plan and shall have the full authority and discretion: (1) to construe and interpret this Plan and any agreements defining the rights and obligations of the Corporation, any Subsidiary, and Participants under this Plan; (2) to further define the terms used in this Plan; (3) to prescribe, amend and rescind rules and regulations relating to the administration of this Plan; and (4) to make all other determinations and take such other action as contemplated by this Plan or as may be necessary or advisable for the administration of this Plan or the effectuation of its purposes.
|
| (c) | Decisions of the Committee are Binding. Any action taken by, or inaction of, the Corporation, any Subsidiary, the Board or the Committee relating or pursuant to this Plan and within its authority hereunder or under applicable law shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons.
|
| (d) | Indemnification. Neither the Board nor any Committee, nor any member thereof or person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan, and all such persons shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time.
|
| (e) | Reliance on Experts. In making any determination or in taking or not taking any action under this Plan, the Committee or the Board, as the case may be, may obtain and may rely upon the advice of experts, including professional advisors to the Corporation. No director, officer or agent of the Corporation or any Subsidiary shall be liable for any such action or determination taken or made or omitted in good faith.
|
B-6 2021 PROXY STATEMENT
| (f) | Delegation. The Committee may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Corporation or a Subsidiary.
|
13. | DESIGNATION OF BENEFICIARY
|
If the Committee permits beneficiary designations with respect to this Plan, then each Participant may file, on a form and in a manner prescribed by the Committee (or its delegate), a written designation of a beneficiary who is to receive any shares or cash from or with respect to such Participant’s Account under this Plan in the event of such Participant’s death. If a Participant is married and the designated beneficiary is not solely his or her spouse, spousal consent shall be required for such designation to be effective unless it is established (to the satisfaction of the Committee or its delegate) that there is no spouse or that the spouse cannot be located. The Committee may rely on the last designation of a beneficiary filed by a Participant in accordance with this Plan. Beneficiary designations may be changed by the Participant (with the consent of his or her spouse, if required) at any time on forms provided and in the manner prescribed by the Committee (or its delegate).
If a Participant dies with no validly designated beneficiary under this Plan who is living at the time of such Participant’s death (or in the event the Committee does not permit beneficiary designations under this Plan), the Corporation shall deliver all shares and/or cash payable pursuant to the terms hereof to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed, the Corporation, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Corporation, then to such other person as the Corporation may designate.
If a Participant’s death occurs before the end of an Offering Period or subsequent to the end of an Offering Period but prior to the delivery to him or her or for his or her benefit of any shares deliverable under the terms of this Plan, and the Corporation has notice of the Participant’s death, then any shares purchased for that Offering Period and any remaining balance of such Participant’s Account shall be paid to such beneficiary (or such other person entitled to such payment pursuant to this Section 13). If the Committee permits beneficiary designations with respect to this Plan, any such designation shall have no effect with respect to shares purchased and actually delivered (or credited, as the case may be) to or for the benefit of the Participant.
Neither Contributions credited to a Participant’s Account nor any Options or rights with respect to the exercise of Options or right to receive shares under this Plan may be anticipated, alienated, encumbered, assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 13) by the Participant. Any such attempt at anticipation, alienation, encumbrance, assignment, transfer, pledge or other disposition shall be without effect and all amounts shall be paid and all shares shall be delivered in accordance with the provisions of this Plan. Amounts payable or shares deliverable pursuant to this Plan shall be paid or delivered only to (or credited in the name of, as the case may be) the Participant or, in the event of the Participant’s death, the Participant’s beneficiary pursuant to Section 13.
15. | USE OF FUNDS; INTEREST
|
All Contributions received or held by the Corporation under this Plan will be included in the general assets of the Corporation and may be used for any corporate purpose. Notwithstanding anything else contained herein to the contrary, no interest will be paid to any Participant or credited to his or her Account under this Plan (in respect of Account balances, refunds of Account balances, or otherwise). Amounts payable under this Plan shall be payable in shares of Common Stock or from the general assets of the Corporation and, except for any shares that may be reserved on the books of the Corporation for issuance with respect to this Plan, no special or separate reserve, fund or deposit shall be made to assure payment of amounts that may be due with respect to this Plan.
Statements shall be provided to Participants as soon as administratively practicable following each Exercise Date. Each Participant’s statement shall set forth, as of such Exercise Date, that Participant’s Account balance immediately prior to the exercise of his or her Option, the Exercise Price, the number of whole shares purchased and his or her remaining Account balance, if any.
2021 PROXY STATEMENT B-7
17. | ADJUSTMENTS OF AND CHANGES IN THE STOCK
|
Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend), or reverse stock split; any merger, combination, consolidation, or other reorganization; split-up, spin-off, or any similar extraordinary dividend distribution in respect of the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; or a sale of substantially all the assets of the Corporation as an entirety occurs; then the Committee shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances:
| (a) | proportionately adjust any or all of (1) the number and type of shares or the number and type of other securities that thereafter may be made the subject of Options (including the specific maximum numbers of shares set forth elsewhere in this Plan), (2) the number, amount and type of shares (or other securities or property) subject to any or all outstanding Options, (3) the Exercise Price of any or all outstanding Options, or (4) the securities, cash or other property deliverable upon exercise of any outstanding Options; or
|
| (b) | make provision for a cash payment or for the substitution or exchange of any or all outstanding Options for cash, securities or property to be delivered to the holders of any or all outstanding Options based upon the distribution or consideration payable to holders of the Common Stock upon or in respect of such event.
|
The Committee may adopt such valuation methodologies for outstanding Options as it deems reasonable in the event of a cash or property settlement and, without limitation on other methodologies, may base such settlement solely upon the excess (if any) of the amount payable upon or in respect of such event over the Exercise Price of the Option.
In any of such events, the Committee may take such action sufficiently prior to such event to the extent that the Committee deems the action necessary to permit the Participant to realize the benefits intended to be conveyed with respect to the underlying shares in the same manner as is or will be available to stockholders generally.
18. | POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
|
Upon a dissolution of the Corporation, or any other event described in Section 17 that the Corporation does not survive or does not survive as a publicly-traded company in respect of its Common Stock, as the case may be, the Plan and, if prior to increase the last day of an Offering Period, any outstanding Option granted with respect to that Offering Period shall terminate, subject to any provision that has been expressly made by the Board for the survival, substitution, assumption, exchange or other settlement of the Plan and Options. In the event a Participant’s Option is terminated pursuant to this Section 18 without a provision having been made by the Board for a substitution, exchange or other settlement of the Option, such Participant’s Account shall be paid to him or her in cash without interest.
19. | TERM OF PLAN; AMENDMENT OR TERMINATION
|
| (a) | Restatement Effective. Subject to Section 19(b), this amendment and restatement of the Plan shall become effective as of the Restatement Date.
|
| (b) | Stockholder Approval. Notwithstanding anything else contained herein to the contrary, the effectiveness of this amendment and restatement of the Plan is subject to the approval of this Plan by the stockholders of the Corporation. Notwithstanding anything else contained herein to the contrary, no shares of Common Stock shall be issued or delivered under this Plan with respect to any Offering Period beginning on or after the Restatement Date unless such stockholder approval is obtained on or before the Exercise Date of such Offering Period. If such stockholder approval is not obtained prior to such Exercise Date, all Contributions credited to a Participant’s Account hereunder for such Offering Period shall be refunded to such Participant (without interest) as soon as practicable.
|
| (c) | Termination. Unless sooner terminated pursuant to Section 18 or this Section 19, this Plan shall terminate at the end of the Offering Period in which all of the shares of Common Stock made available under this Plan are subscribed, and the shares available shall be allocated for purchase by Participants in that Offering Period on a pro-rata basis determined with respect to Participants’ Account balances.
|
| (d) | Board Amendment Authority. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part and without notice. Stockholder approval for any amendment or modification shall not be required, except to the extent required by applicable law or listing agency, or deemed necessary or advisable by the Board. No Options may be granted during any suspension of this Plan or after the termination of this Plan, but the Committee will retain jurisdiction as to
|
B-8 2021 PROXY STATEMENT
| Options then outstanding in accordance with the terms of this Plan. No amendment, modification, or termination pursuant to this Section 19(d) shall, without written consent of the Participant, affect in any manner materially adverse to the Participant any rights or benefits of such Participant or obligations of the Corporation under any Option granted under this Plan prior to the effective date of such change. Changes contemplated by Section 17 or Section 18 shall not be deemed to constitute changes or amendments requiring Participant consent.
|
| (e) | Corporation Designation of Participating Subsidiaries. Notwithstanding the amendment provisions of Section 19(d) and without limiting the Board’s authority thereunder and without limiting the Committee’s authority pursuant to any other provision of this Plan, the Corporation through its officers shall have the right to designate from time to time which of the Subsidiaries are Participating Subsidiaries (including, without limitation, any Subsidiary that may first become such after the date stockholders first approve this Plan). Any such change shall not take effect earlier than the first Offering Period that starts on or after the effective date of such change. Any such change shall not require stockholder approval, except to the extent required by law or applicable stock exchange rules or as deemed necessary or advisable by the Board.
|
All notices or other communications by a Participant to the Corporation contemplated by this Plan shall be deemed to have been duly given when received in the form and manner specified by the Committee (or its delegate) at the location, or by the person, designated by the Committee (or its delegate) for that purpose.
21. | CONDITIONS UPON ISSUANCE OF SHARES
|
This Plan, the granting of Options under this Plan and the offer, issuance and deliveryaggregate number of shares of Common Stock are(as defined in the Plan) of the Company that may be delivered pursuant to Options (as defined in the Plan) granted under the Plan since the inception of the Plan in 2003, as adjusted under the terms of the Plan, to a total of 1,791,117;
Now, Therefore, the Plan is hereby amended, subject to compliance with all applicable federal and state laws, rules and regulations (including but not limitedstockholder approval, effective May 30, 2024 as follows:
The final sentence of Section 4(a) is hereby amended in its entirety to state and federal securities laws) and to such approvals by any listing, regulatory or governmental authorityread as may, in the opinionfollows:
The maximum number of counsel for the Corporation, be necessary or advisable in connection therewith. The person acquiring any securities under this Plan will, if requested by the Corporation and as a condition precedent to the exercise of his or her Option, provide such assurances and representations to the Corporation as the Committee may deem necessary or desirable to assure compliance with all applicable legal requirements. | (a) | Section 16. It is the intent of the Corporation that transactions involving Options under this Plan (other than “Discretionary Transactions” as that term is defined in Rule 16b-3(b)(1) promulgated by the Commission under Section 16 of the Exchange Act, to the extent there are any Discretionary Transactions under this Plan), in the case of Participants who are or may be subject to the prohibitions of Section 16 of the Exchange Act, satisfy the requirements for exemption under Rule 16b-3(c) promulgated by the Commission under Section 16 of the Exchange Act to the maximum extent possible. Notwithstanding the foregoing, the Corporation shall have no liability to any Participant for Section 16 consequences of Options or other events with respect to this Plan.
|
| (b) | Section 423. This Plan and Options are not intended to qualify under Section 423 of the Code. Nevertheless, all Participants are to have the same rights and privileges (within the meaning of Section 423(b)(5) of the Code) under this Plan, subject to differences in Compensation among Participants and subject to the Contribution and share limits of this Plan.
|
| (c) | Interpretation. If any provision of this Plan or of any Option would otherwise frustrate or conflict with the intents expressed above, that provision to the extent possible shall be interpreted so as to avoid such conflict. If the conflict remains irreconcilable, the Committee may disregard the provision if it concludes that to do so furthers the interest of the Corporation and is consistent with the purposes of this Plan as to such persons in the circumstances.
|
| (a) | No Employment Rights. Nothing in this Plan (or in any Participation Agreement or other document related to this Plan) will confer upon any Eligible Employee or Participant any right to continue in the employ or other service of the Corporation or any Subsidiary, constitute any contract or agreement of employment or other service or effect an employee’s status as an employee at will, nor shall interfere in any way with the right of the Corporation or any Subsidiary to change such person’s compensation or other benefits or to terminate his or her employment or other service, with or without cause. Nothing contained in this Section 23(a), however, is intended to adversely affect any express independent right of any such person under a separate employment or service contract other than a Participation Agreement.
|
2021 PROXY STATEMENT B-9
| (b) | No Rights to Assets of the Corporation. No Participant or other person will have any right, title or interest in any fund or in any specific asset (including shares of Common Stock) of the Corporation or any Subsidiary by reason of any Option hereunder. Neither the provisions of this Plan (or of any Participation Agreement or other document related to this Plan), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan will create, or be construed to create, a trust of any kind or a fiduciary relationship between the Corporation or any Subsidiary and any Participant, Beneficiary or other person. To the extent that a Participant, Beneficiary or other person acquires a right to receive payment pursuant to this Plan, such right will be no greater than the right of any unsecured general creditor of the Corporation.
|
| (c) | No Stockholder Rights. A Participant will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the Participant. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.
|
| (a) | Governing Law. This Plan, the Options, Participation Agreements and other documents related to this Plan shall be governed by, and construed in accordance with, the laws of the State of Maryland.
|
| (b) | Severability. If any provision shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.
|
| (c) | Captions and Headings. Captions and headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such captions and headings shall not be deemed in any way material or relevant to the construction of interpretation of this Plan or any provision hereof.
|
| (d) | No Affect on Other Plans or Corporate Authority. The adoption of this Plan shall not affect any other Corporation or Subsidiary compensation or incentive plans in effect. Nothing in this Plan will limit or be deemed to limit the authority of the Board or Committee (1) to establish any other forms of incentives or compensation for employees of the Corporation or any Subsidiary (with or without reference to the Common Stock), or (2) to grant or assume options (outside the scope of and in addition to those contemplated by this Plan) in connection with any proper corporate purpose; to the extent consistent with any other plan or authority. Benefits received by a Participant under an Option granted pursuant to this Plan shall not be deemed a part of the Participant’s compensation for purposes of the determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Corporation or any Subsidiary, except where the Committee or the Board (or the Board of Directors of the Subsidiary that sponsors such plan or arrangement, as applicable) expressly otherwise provides or authorizes in writing.
|
| (e) | Electronic and Telephonic Media. Notwithstanding any provisions contained herein to the contrary requiring the submission of forms and elections in the form of a writing signed by the Participant in order to be effective, the Committee (or its delegate) may require or permit Participant (or Beneficiary, as the context may require) elections and/or consents under this Plan to be made by means of such electronic or telephonic media as the Committee may prescribe. A Participant’s participation election, request to withdraw from participation or other form of election permitted by electronic or telephonic media under this Plan by the Committee (or its delegate) shall be deemed to constitute the submission of a writing signed by the Participant for purposes of this Plan only if timely processed. Reasonable efforts will be used to process electronic or telephonic media consents and elections made under this Plan. Notwithstanding the preceding sentence or anything else in this Plan to the contrary, neither the Corporation, the Committee (or its delegate), nor any other person guarantees that any consent or election will be so processed. However, the Committee (or its delegate) may accept consents and elections that are not timely processed and retroactively implement such consents or elections in the event that and to the extent that the failure of timely processing was due to system error or other event not reasonably within the control of the Participant, as the Committee (or its delegate) determines in its sole discretion. The Committee (or its delegate) may adopt new or alternative rules for electronic or telephonic media consents and elections as it deems appropriate in its sole and complete discretion (including, without limitation, eliminating any electronic or telephonic media system and re-implementing a requirement of written forms in all cases). In order to be effective, each consent and/or election must be made in accordance with such other rules as the Committee may prescribe. The provisions of this Section 24(e) shall not affect the requirement that Beneficiary designations be in writing in accordance with Section 13.
|
B-10 2021 PROXY STATEMENT
Notwithstanding anything else contained in this Plan herein to the contrary, the Corporation may withhold from the shares of Common Stock tothat may be delivered pursuant to a Participant as of an Exercise Date, as a resultOptions granted under this Plan from the inception of the exercise of the Participant’s Option on such date, the amount of taxes (if any) that the Corporation reasonably determines it or any Subsidiary may be required to withhold with respect to such exercise. In such event, the maximum number of wholePlan is one million, seven hundred ninety one thousand, one hundred and seventeen (1,791,117) shares, subject to such Option (subjectadjustments pursuant to theSection 17.
Except as amended herein, all other limits set forth in this Plan) shall be purchased at the Exercise Price with the Participant’s Account balance, and the number of shares withheld shall be the number of whole shares having a Fair Market Value on the Exercise Date equal to (or exceeding by less than the Fair Market Value of one share) the tax withholding amount.Should the Corporation for any reason be unable, or elect not to, satisfy its or any Subsidiary’s tax withholding obligations in the manner described in the preceding paragraph with respect to a Participant’s exercise of an Option, the Corporation or Subsidiary, as the case may be, shall have the right at its option to (1) require the Participant to pay or provide for paymentprovisions of the amount of any taxes which the Corporation or Subsidiary reasonably determines that it or any affiliate is required to withhold with respect to such event or (2) deduct from any amount otherwise payable to or for the account of the Participant the amount of any taxes which the Corporation or Subsidiary reasonably determines that it or any affiliate is required to withhold with respect to such event.
2021Plan shall continue in full force and effect.
II-1 2024 PROXY STATEMENTB-11
| | | 
THE MACERICH COMPANY
401 WILSHIRE BLVD., SUITE 700
SANTA MONICA, CA 90401
| | AUTHORIZE YOUR PROXY BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. Eastern Time on May 27, 2021 for shares held directly and by 11:59 P.M. Eastern Time on May 25, 2021 for shares held in a Plan. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
| | AUTHORIZE YOUR PROXY 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 27, 2021 for shares held directly and by 11:59 P.M. Eastern Time on May 25, 2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions. | | AUTHORIZE YOUR PROXY BY MAIL
| | Mark, sign and date your proxy card and return it promptly 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:
| | | | | | | D46832-P52744-Z79459 | | KEEP THIS PORTION FOR YOUR RECORDS
|
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
| | | | | | | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | THE MACERICH COMPANY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals:
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1.
| | Election of Directors
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nominees:
| | | | For
| | | | Against
| | | | Abstain
| | | | | | | | | | For
| | Against
| | Abstain
| | | | | | | | | | | 1a. Peggy Alford
| | | | ☐ | | | | ☐ | | | | ☐ | | 2. Advisory vote to approve our named executive officer compensation as described in our Proxy Statement.
| | ☐ | | ☐ | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | 1b. John H. Alschuler
| | | | ☐ | | | | ☐ | | | | ☐ | | 3. Amendment to our charter to increase the number of authorized shares of common stock.
| | ☐ | | ☐ | | ☐
| | | | | | | | | | | | | | | | | | | | | | | | | | | 1c. Eric K. Brandt
1d. Edward C. Coppola
1e. Steven R. Hash
| | | | ☐
☐
☐
| | | | ☐
☐
☐
| | | | ☐
☐
☐
| | 4. Amendment and restatement of our Employee Stock Purchase Plan.
5. Ratification of the appointment of KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021.
| | ☐
☐
| | ☐
☐
| | ☐
☐
| | | | | | | | | | | 1f. Daniel J. Hirsch
1g. Diana M. Laing
| | | | ☐
☐
| | | | ☐
☐
| | | | ☐
☐
| | Proxies will be voted in the discretion of the persons named in this Proxy on any other matter that may properly come before the meeting or any postponement(s) or adjournment(s) thereof.
| | | | | | | | | | | | | | | | | | | | | 1h. Thomas E. O’Hern
| | | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1i. Steven L. Soboroff
1j. Andrea M. Stephen
| | | | ☐
☐
| | | | ☐
☐
| | | | ☐
☐
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Please indicate if you plan to attend this meeting.
| | ☐
Yes
| | ☐
No
| | | | | | | | | | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other representative, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] Date | | | | | | | | | | | | Signature (Joint Owners) Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
| THE MACERICH COMPANY
Proxy Solicited on Behalf of the Board of Directors of the Company for the Annual Meeting to be held on May 28, 2021
The undersigned stockholder(s) of The Macerich Company, a Maryland corporation (the “Company”), hereby appoint(s) Ann C. Menard and Scott W. Kingsmore, and each of them, as Proxies for the undersigned, each with full power of substitution, to attend the Annual Meeting of Stockholders of the Company to be held at The Fairmont Miramar Hotel, 101 Wilshire Blvd., Santa Monica, California 90401, on May 28, 2021 at 10:00 a.m. local time, and at any postponement(s) or adjournment(s) thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting and otherwise to represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. The undersigned hereby acknowledge(s) receipt of the Notice of Annual Meeting of Stockholders and the accompanying Proxy Statement, the terms of each of which are incorporated herein by reference, and revokes any Proxy heretofore given with respect to such meeting or any postponement(s) or adjournment(s) thereof.
Note: It is possible that the originally scheduled time, day and/or location of the Annual Meeting of Stockholders may be changed. This Proxy will remain valid regardless of such changes.
The votes entitled to be cast by the undersigned will be cast as instructed on the reverse side hereof. If this Proxy is executed but no instruction is given, the votes entitled to be cast by the undersigned will be cast “FOR” each of the nominees for director in Proposal 1 and “FOR” Proposals 2, 3, 4 and 5, each as described in the Proxy Statement. The votes entitled to be cast by the undersigned will be cast in the discretion of the Proxy holder on any other matter that may properly come before the Annual Meeting or any postponement(s) or adjournment(s) thereof.
| Continued and to be signed on reverse side
|
 |
