The table below summarizes the compensation paid to each non-employee director for 2019:2021:
The Company’s executive officers are elected by the Board to serve at the pleasure of the Board or until their successors are elected and qualified. The following executive officers are not directors. For information regarding William C. Bayless, Jr., Chief Executive Officer, see “Board of Directors – Board Composition.”
SECURITY OWNERSHIP
The following table sets forth the number of all shares of common stock beneficially owned by each director, by each named executive officer, by each person known to beneficially own 5% or more of the Company’s outstanding common stock, and by all directors and executive officers as a group on March 9, 2020,1, 2022 unless otherwise indicated in the footnotes. Each of the following persons and members of the group had sole voting power and sole dispositive power with respect to the shares shown unless otherwise indicated in the footnotes. Unless otherwise indicated, the address of each named person is c/o American Campus Communities, Inc., 12700 Hill Country Blvd., Suite T-200, Austin, Texas 78738.
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Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership Number of Shares Beneficially Owned | | Percent of Class |
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The Vanguard Group | | 20,093,052 | | (1) | | 14.3% |
BlackRock, Inc. | | 16,179,048 | | (2) | | 11.5% |
T. Rowe Price Associates, Inc. | | 7,277,366 | | (3) | | 5.2% |
William C. Bayless, Jr. | | 459,065 | | (4) | | * |
William W. Talbot | | 187,959 | | (5) | | * |
Daniel B. Perry | | 151,666 | | (6) | | * |
Jennifer Beese | | 129,734 | | (7) | | * |
Kim K. Voss | | 63,083 | | (8) | | * |
John T. Rippel | | 51,390 | | (9) | | * |
G. Steven Dawson | | 29,101 | | (10) | | * |
Cydney C. Donnell | | 28,851 | | | | * |
C. Patrick Oles, Jr. | | 14,087 | | (11) | | * |
Mary C. Egan | | 11,558 | | (12) | | * |
Oliver Luck | | 10,964 | | (13) | | * |
Herman E. Bulls | | 5,742 | | | | * |
Alison M. Hill | | 5,742 | | (14) | | * |
Craig A. Leupold | | 5,742 | | (14) | | * |
All directors and executive officers as a group (18 persons) | | 1,316,622 | | | | * |
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Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership Number of Shares Beneficially Owned | | Percent of Class |
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The Vanguard Group | | 20,288,928 |
| (1) | | 14.6% |
BlackRock, Inc. | | 16,374,216 |
| (2) | | 11.8% |
T. Rowe Price Associates, Inc | | 7,535,460 |
| (3) | | 5.4% |
William C. Bayless, Jr. | | 484,941 |
| (4) | | * |
William W. Talbot | | 139,358 |
| (5) | | * |
James C. Hopke, Jr. | | 113,256 |
| (6) | | * |
Daniel B. Perry | | 107,589 |
| (7) | | * |
Jennifer Beese | | 89,489 |
| (8) | | * |
Edward Lowenthal | | 37,316 |
| (9) | | * |
John T. Rippel | | 33,456 |
| | | * |
G. Steven Dawson | | 22,784 |
| (10) | | * |
Cydney C. Donnell | | 21,478 |
| | | * |
C. Patrick Oles, Jr. | | 11,375 |
| (11) | | * |
Mary C. Egan | | 5,241 |
| | | * |
Oliver Luck | | 4,647 |
| | | * |
Carla Piñeyro Sublett | | 2,393 |
| (12) | | * |
All directors and executive officers as a group (16 persons) | | 1,213,035 |
| | | * |
* Less than one percent.
(1)This information is based upon information contained in filings made by the shareholder with the SEC reporting beneficial ownership as of December 31, 2021. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The Vanguard Group possessed shared voting power over 202,282 shares, sole dispositive power over 19,767,891 shares and shared dispositive power over 325,161 shares.
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(1) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2019. The address of The Vanguard Group is 100 Vanguard Blvd., Malvern, Pennsylvania 19355. The Vanguard Group possessed sole voting power over 214,963 shares, shared voting power over 158,376 shares, sole dispositive power over 20,078,396 shares and shared dispositive power over 210,532 shares. |
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(2) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2019.(2)This information is based upon information contained in filings made by the shareholder with the SEC reporting beneficial ownership as of December 31, 2021. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. BlackRock, Inc. possessed sole voting power over 15,041,942 shares and sole dispositive power over 16,179,048 shares. (3)This information is based upon information contained in filings made by the shareholder with the SEC reporting beneficial ownership as of December 31, 2021. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. T. Rowe Price Associates, Inc. possessed sole voting power over 2,496,783 shares and sole dispositive power over 7,277,366 shares. (4)Includes 253,235 unvested restricted stock awards (“RSAs”) and 52,500 common units of limited partnership interest in the Company’s Operating Partnership (“Common Units”). Such Common Units are immediately redeemable for cash or, at the Company‘s election, an equal number of shares of the Company’s common stock. (5)Includes 97,384 unvested RSAs and 1,016 shares for which Mr. Talbot may be deemed to be the beneficial owner although he disclaims beneficial ownership of such shares and 3,800 Common Units. Such Common Units are immediately redeemable for cash or, at the Company’s election, an equal number of shares of the Company’s common stock. (6)Includes 83,668 unvested RSAs. (7)Includes 96,822 unvested RSAs.nd Street, New York, NY 10055. BlackRock, Inc. possessed sole voting power over 15,791,561 shares and sole dispositive power over 16,374,216 shares. |
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(3) | This information is based upon information contained in filings made by the stockholder with the SEC reporting beneficial ownership as of December 31, 2019. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, MD 21202. T. Rowe Price Associates, Inc. possessed sole voting power over 1,450,956 shares and sole dispositive power over 7,535,460 shares. |
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(4) | Includes 229,486 unvested restricted stock awards (“RSAs”) and 52,500 common units of limited partnership interest in the Company’s Operating Partnership (“Common Units”). Such Common Units are immediately redeemable for cash or, at the Company‘s election, an equal number of shares of the Company’s common stock. |
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(5) | Includes 79,243 unvested RSAs and 3,800 Common Units. Such Common Units are immediately redeemable for cash or, at the Company’s election, an equal number of shares of the Company’s common stock. |
(8)Includes 31,567 unvested RSAs and 2,669 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
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(6) | Includes 76,643 unvested RSAs. Also includes 13,638 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights. |
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(7) | Includes 63,910 unvested RSAs. |
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(8) | Includes 69,677 unvested RSAs. |
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(9) | Includes 16,170 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights. |
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(10) | Includes 3,000 shares held in an individual retirement account for the benefit of Mr. Dawson’s spouse. Mr. Dawson, however, disclaims beneficial ownership of all of the foregoing shares. Also includes 12,784 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights. |
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(11) | Includes 7,156 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights. |
(9)Includes 36,600 shares for which Mr. Rippel may be deemed to be the beneficial owner although he disclaims beneficial ownership of such shares.
(10)Includes 7,000 shares for which Mr. Dawson may be deemed to be the beneficial owner although he disclaims beneficial ownership of such shares. Also includes 19,101 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
(11)Includes 7,156 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
(12)Includes 2,724 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
(13)Includes 3,593 shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
(14)Represents shares held in the Company’s deferred compensation plan with respect to which the trustee has voting rights.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on a review of Forms 3, 4 and 5 and amendments thereto furnished to us during or with respect to 2019,2021, the Company believes that all SEC filing requirements applicable to directors, officers and beneficial owners of more than 10% of the Company’s common stock were complied with in 2019.2021, except for the following items due to administrative oversight:
•a charitable donation of 220 shares of common stock made by William Bayless in 2019 was reported in January 2022,
•RSUs granted to three board members appointed on January 27, 2021 were not reported until February 8, 2021,
•the purchase of 200 shares of common stock by John Rippel in January 2021 was reported in January 2022, and
•10,453 shares of unvested restricted stock awards were omitted from a Form 3 filed for Brian Winger on September 4, 2020 and Form 4s filed on February 1, 2021 and March 2, 2021. These unvested restricted stock awards were filed on an amended Form 3 on September 14, 2021.
EXECUTIVE COMPENSATION
Compensation Committee Report
The Compensation Committee of American Campus Communities, Inc. has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management. Based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
THE COMPENSATION COMMITTEE
Cydney C. Donnell,Alison M. Hill, Chair
G. Steven Dawson
Edward LowenthalMary C. Egan
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) provides a detailed description of the executive compensation philosophy, objectives and programs, the compensation decisions made under those programs and the factors considered by the Compensation Committee. The CD&A focuses on the compensation of the Named Executive Officers for 2019,2021, who were:
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Name | | Title |
William C. Bayless, Jr. | | Chief Executive Officer |
James C. Hopke, Jr.Jennifer Beese(1) | | President, Chief Operating Officer |
William W. Talbot | | Executive Vice President, Chief Investment Officer |
Jennifer Beese | | Executive Vice President, Chief Operating Officer |
Daniel B. Perry | | Executive Vice President, Chief Financial Officer |
Kim K. Voss | | Executive Vice President, Chief Accounting Officer |
(1 ) Promoted to President and Chief Operating Officer effective as of August 24, 2021; served as Executive Vice President and Chief Operating Officer prior to such time.
As in previous years, Named Executive Officers for 20192021 were awarded compensation based on policies that closely link compensation to performance. These policies, in planned combination, generate rewards for achievement of high-level Company and individual performance and discourage excessive short-term risk taking. This balance is essential to align management with the long-term interests of stockholders.shareholders.
This CD&A discusses the Company, its business and individual measures used in assessing performance. These measures are discussed in the limited context of the executive compensation program. You should not interpret them as statements of the Company’s expectations or as any form of guidance. We caution you not to apply the statements or disclosures made in this CD&A in any other context.
2019 Performance
Executive Summary
•The health and well-being of our employees, the safety of our residents, and the re-stabilization of our operations were our primary focus areas for the majority of 2021.
•Our management team, acting in concert with our eight principle objectives that were adopted early in the pandemic, took decisive action to address each of these primary focus areas.
•Despite continued disruption and uncertainty due to the COVID-19 pandemic, our business performed exceedingly well in 2021. We delivered above-median one-year and three-year total shareholder return (TSR), and significantly outperformed our goals on Net Operating Income (NOI), Funds From Operations - Modified (FFOM), and same store operating margin.
•Short-term incentives paid between 145% and 150% of target. Strong operational, financial, and strategic leadership, combined with financial results that exceeded plan, resulted in our CEO receiving 145% of his target opportunity and other NEOs receiving 150% of their target opportunities.
•The Company’s long-term incentive structure rewards achieved performance results and reinforces alignment with shareholder value creation. The Compensation Committee viewsgrants long-term awards at the end of a performance measurement period based on pre-determined criteria, which are further subject to five-year ratable vesting. This promotes pay-for-performance alignment and long-term retention of our executive team.
•Long-term incentives were funded between 119% and 126% of target. Weightedfinancial results were achieved at 114% of target, and strong individual performance among our leadership team resulted in final payouts of 119% of target for compensatory purposesour CEO and 126% of target for the remainder of the NEOs.
Our Company
We are one of the largest owners, managers, and developers of high-quality student housing properties in the United States in terms of beds owned and under management. ACC is a fully integrated, self-managed, and self-administered equity REIT with expertise in the acquisition, design, financing, development, construction management, leasing, and management of student housing properties. As of December 31, 2021, our total owned and third-party managed portfolio included 203 properties with approximately 140,900 beds.
We seek to own high-quality, well-designed and well-located student housing properties. We aim to acquire or develop properties in markets that have stable or increasing student populations, are in submarkets with barriers to entry and provide opportunities for economic growth as a result of their product position and/or differentiated design and close proximity to campuses, or through our superior operational capabilities. We believe that our reputation and established relationships with universities give us an advantage in sourcing acquisitions and developments and obtaining municipal approvals and community support for our development projects.
2021 Performance
In the context of the executive compensation program, the Compensation Committee assesses performance in two primary ways: (1) financial and operating performance including individual goals and objectives and results againstrelative to the Company’s growth targets, and (2) returns to stockholdersshareholders over time, both on an absolute basis and relative to other companies, including the compensation peer group (see “Compensation Consultant and Benchmarking”).
The 20192021 compensation decisions made by the Compensation Committee reflect strong continued alignment between pay and performance with respect to the pre-established measures and goals under the annual cash and long-term equity incentive plans and the performance and contributions of the Named Executive Officers to the Company’s financial and operating performance during the year. In determining the incentive compensation paid to the Named Executive Officers for 2019,2021, the Compensation Committee rigorously evaluated Companythe Company's and individual
performance relative to the pre-established measures and goals, underbut also took into consideration management’s considerable efforts and leadership in re-stabilizing the annual cashCompany's operations and long-term equity incentive plans.
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RECORD YEAR | 15 | 93% | 39% |
Revenue, NOI, FFOM and FFOM per share | Consecutive Years of Same Store NOI Growth | Say-On-Pay Approval (5 Year Average) | Dividend Growth Since First Increase in 2012 |
In 2019,continuing to successfully navigate the Company continued its long track recordthrough the lingering disruption of creating valueCOVID-19.
It is worth acknowledging that the Company’s 2021 outlook, and therefore the financial metrics used to assess management’s performance for stockholders. In doing so,2021, were below the actual results produced for 2020. This was due to the ongoing impact of the pandemic on the 2020-2021 academic year occupancy at the Company’s properties, which affected a significant portion of 2021, and the gradual return to normal operations that was expected to occur over two academic year cycles. We are pleased to report that our team’s efforts led to significant outperformance relative to original expectations.
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1 | 10.4% | 8.1% | 10.1% |
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Returned NOI to pre-pandemic levels one year earlier than anticipated | Outperformance vs. RMS REIT Index TSR since the pandemic began | FFOM per share growth | Opening rental revenue growth generated in Fall 2021 lease-up |
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Despite COVID-19 uncertainty in early 2021, the Company accomplished significantexecuted more than 3,600 mid-term leases, improving spring occupancy levels and generating additional Net Operating Income (NOI) and Funds from Operations Modified (FFOM), which helped to further renormalize the Company’s business early in the year. Additionally, despite industry-wide preleasing for the 2021-2022 academic year pacing significantly slower than its traditional pace, the Company utilized its extensive operating knowledge and Next Gen operating systems to achieve 95.8% opening fall occupancy and 3.8% average rental rate growth for the 2022 same store portfolio as of September 30, 2021, exceeding the high end of our guidance and outperforming our student housing competitors. This outstanding performance returned same-property NOI to pre-pandemic levels in the fourth quarter, a full year earlier than we previously anticipated. To complete the year, on December 31, 2021, we formed a joint venture to recapitalize our eight-property Arizona State University student housing portfolio for aggregate proceeds of $551.3 million as part of our strategic capital program to utilize joint venture and private equity capital to enhance sustainable long-term shareholder value. The joint venture partnership is 55% owned by the Company and 45% by the minority joint venture partner, and is being completed via a two-phase closing with the first phase closed on December 31, 2021 and the second phase expected to close in the fourth quarter of 2022 or first quarter of 2023. Upon full completion, this transaction is expected to provide a total of $551.3 million of proceeds to the Company, which fully satisfies the Company’s 2022 capital sourcing needs and provides for additional capital proceeds moving into 2023.
While lingering effects of the pandemic affected our business during the year, our Company’s resilience and ability to adapt quickly were crucial to protecting the health and well-being of our employees, the safety of our residents, and re-stabilizing our operations. Strong operational, financial, and strategic objectivesleadership led to an outstanding year in which the Company exceeded the high-end of the majority of its financial and milestones, including:
Achieving record levels inoperational goals and performance metrics including total revenue, NOI, absolute FFOM, andSame Store NOI growth, Same Store Operating Margin, Same Store Lease-Up results, 2021 FFOM per share;
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• | Growing same store rental rate and rental revenue for the 15th consecutive year, measured by change in occupancy plus growth in rental rateshare and 2021 Absolute Total Shareholder Return (TSR). Additionally, as compared to the top 175 markets, as measured and reported by a third-party provider of September 30, 2019 versus 2018;
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Outperforming its student housing peer set instatistics, the 2019/2020 academic year lease-up as detailed under 2019 Long-Term Equity Incentive Awards;
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• | Producing same store NOI growth for the 15th consecutive year (every year since becoming a public company in 2004);
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Delivering three new owned development projects totaling $297.1 million in investment into service at their collective underwritten yield, on-budgetCompany’s achievement of same store occupancy of 95.8% and on-schedule;
Achieving on-time delivery3.8% average rental rate growth per occupied bed compared to occupancy of 94.1% and 98.1% opening occupancyrental rate growth of 2.5%, or approximately 3.0 percentage points of revenue outperformance for the five new owned2022 same store group. In addition to excellent operational and presale development projects, resultingfinancial performance, during 2021 the Company also made significant advancements in full stabilization at opening;
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• | Receiving five new on-campus development project awards which are expected to total over 12,000 beds with a total development value of approximately $2.5 billion. These project awards are anticipated to include both American Campus Equity (ACE®) on-campus developments and third-party development projects;
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Advancing the company’sits ESG program as outlined under Corporate Responsibility;Responsibility / ESG.
Increasing the common dividend to $1.88 per share on an annualized basis, the seventh consecutive increase, representing dividend growth of 39% since 2012.
A reconciliation of net income to FFO, FFOM and NOI for the year ended December 31, 2019,2021, is contained in the 20192021 Annual Report on Form 10-K and in the earnings release furnished on a Current Report on Form 8-K filed on February 19, 2020.22, 2022.
2019 Changes toThis discussion of the Executive Compensation Program
The Compensation Committee engaged an independent compensation consultantCompany, its business and individual measures are used in 2019 to advise on executive compensation trends and best practices, as well as any relevant regulatory updates that may impact our short- and long-term executive compensation programs. The Compensation Committee uses this information to form decisions on executive compensation and to ensure thatassessing performance. These measures are discussed in the overall program continues to provide a strong link between pay and performance.
Based on this review and in response to changing business needs, market best practices and stockholder feedback,limited context of the Committee took the actions outlined below to enhance the 2019 executive compensation program. The Committee believes these changes create a stronger and more transparent alignment between pay and performance,You should not interpret them as discussed below.statements of the Company’s expectations or as any form of guidance. We caution you not to apply the statements or disclosures made in this Proxy Statement in any other context.
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TOPIC | ACTION | RATIONALE |
Long-term Equity Incentive | Inclusion of a metric to evaluate the Company’s same store lease-up results relative to student housing peers
| The Company has no publicly traded direct business competitors specialized in student housing. As such, to incorporate a student housing specific performance assessment, a metric evaluating the Company’s lease-up results relative to private student housing peers was added. The metric compares the Company’s achieved same store rental rate growth and occupancy in its same store markets as of September 30 versus the average rental rate growth and occupancy achieved by student housing properties located within one-half of a mile as tracked and reported by a third-party service in those same markets.
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Compensation Policies and Practices—Good Governance
Consistent with the Company’s commitment to strong corporate governance and responsiveness to stockholders,shareholders, in 20192021 the Board maintained the following compensation policies and practices to drive performance and serve the stockholders’shareholders’ long-term interests:
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ü | DO align pay and performance by linking a substantial portion of compensation to the achievement of pre-established performance measures that drive stockholdershareholder value | | û | DO NOT base incentive awards on a single performance measure, thereby discouraging unnecessary or excessive risk-taking |
ü | DO provide executive officers with the opportunity to earn market-competitive compensation through a mix of cash and equity compensation, with strong emphasis on performance-based incentive awards | | û | DO NOT provide guaranteed minimum payouts or uncapped award opportunities |
ü | DO have a robust peer selection process and benchmark executive compensation to target the median of the comparative group of peer companies | | û | DO NOT reprice or permit cash buyouts of underwater stock options |
ü | DO require executive officers and directors to own and retain shares of common stock that have significant value to further align interests with stockholdersshareholders | | û | DO NOT provide executive officers with excessive perquisites or other personal benefitsaccelerated vesting upon a change of control under the 2018 Incentive Award Plan |
ü | DO enhance alignment with long-term shareholder value and executive officer retention with 5-year vesting schedules for equity incentive awards earned for prior-year performance | | û | DO NOT provide executive officers with pension or retirement benefits other than pursuant to a 401(k) plan and a deferred compensation plan |
ü | DO enable the Board to “claw back” incentive compensation in the event of an accounting restatement due to material non-compliance with financial reporting requirements as a result of misconduct by executive officers | | û | DO NOT permit executive officers or directors to engage in derivative or other hedging transactions in the Company’s securities |
ü | DO prohibit new tax gross-up arrangements under anti-tax gross-up policy | | û | DO NOT provide accelerated vesting upon a change of control under the 2018 Incentive Award Planexecutive officers with excessive perquisites or other personal benefits |
ü | DO maintain a Compensation Committee comprised solely of independent directors | | û | DO NOT provide single-trigger change of control benefits |
ü | DO engage an independent compensation consultant to advise the Compensation Committee on executive compensation matters and establishing an appropriate peer group | | û | DO NOT permit executive officers and directors to hold the Company's securities in margin accounts or to otherwise pledge the securities to secure loans |
20192021 Advisory Vote on Executive Compensation and Shareholder Engagement
An advisory vote is submitted to stockholdersshareholders on an annual basis to approve executive compensation. Our stockholdersshareholders have consistently supported our executive compensation program. At our 2019 Annual Meeting of Stockholders, 96% of the votes cast were voted in favor of our resolution seeking advisory approval of our executive compensation. Over the last five years, stockholdershareholder support for our advisory vote on executive compensation has averaged 93%95%. While we have consistently had strong stockholder support for our executive compensation program,In addition, the Compensation Committee does useuses an independent compensation consultant to review the structure of our compensation program, and to assess the effectiveness of our program in aligning executive and stockholdershareholder interests.
The Compensation Committee has also continued to evaluate the overall
While we have consistently had strong shareholder support for our executive compensation program, the Compensation Committee continues to seek feedback from shareholders on a wide variety of issues, including executive compensation, each year. In 2021, the Company, including independent directors and believes that it is well designedthe Board Chair when appropriate, engaged with investors representing a majority of the shares outstanding. Through these interactions, shareholders generally provided positive feedback on our capital allocation strategies, management and re-stabilization of our operations amidst the global pandemic, governance, executive compensation programs and ESG and corporate responsibility initiatives. In recent years, shareholders have expressed their desire for valuation transparency of the Company’s on-campus owned properties under the American Campus Equity (ACETM) structure, for the Company to achieve the objectivesfund a larger proportion of attracting, retainingits development pipeline through self-funding including sales of mature properties, or through sales of interests in those properties, and motivating talented executives and rewarding superior performanceto diversity income concentrated in the contextCompany’s largest university markets. As previously mentioned, as part of the business risk environment.our strategic capital program to utilize joint venture and private equity capital to enhance sustainable long-term shareholder value, and addressing each of these desires, in 2021, we formed a joint venture to recapitalize our eight-property Arizona State University student housing portfolio for aggregate proceeds of $551.3 million, a transaction which was consistent with general shareholder feedback received in recent years. See Shareholder Outreach, Stakeholder Engagement and Communication for additional information.
Objectives of the Compensation Program
The Company recognizes that effective compensation strategies are critical to recruiting, incenting and retaining key employees who contribute to long-term success and thereby create value for stockholders.shareholders. Accordingly, the compensation program is designed to achieve the following primary objectives:
•Attract, retain and motivate talented executives;
•Reward performance that meets or exceeds pre-established Company and tailored individual goals consistent with the Company’s strategic plan, while maintaining alignment with stockholders;shareholders;
•Provide balanced incentives that discourage excessive risk-taking;
•Retain sufficient flexibility to permit executive officers to manage risk and adjust appropriately to meet rapidly changing market and business conditions;
•Evaluate performance by balancing consideration of those measures management can directly influence with market forces that management cannot control (such as monetary policy and interest rate expectations), but that impact stockholdershareholder value;
•Encourage executives to become and remain long-term stockholdersshareholders of the Company; and
•Maintain compensation and corporate governance practices that support the Company’s goal to deliver sustained, superior returns to stockholders.shareholders.
Interests of the executive officers and stockholdersshareholders are aligned by maintaining a performance- and achievement-oriented environment that provides executives with the opportunity to earn market-competitive levels of cash and equity compensation for strong performance measured against key financial and strategic goals that create long-term stockholdershareholder value.
Compensation Consultant and Benchmarking
In 2019, the Compensation Committee retained FPL Associates L.P. (“FPL”) as its independent consultant to advise on matters related to compensation levels, program design and the composition of the Company’s peer group. At the time of the engagement, the Compensation Committee reviewed FPL's independence and determined that FPL met the independence criteria under the Compensation Committee charter and that FPL’s engagement raised no conflict of interest.
The Compensation Committee noted that the Company has no publicly traded direct business competitors, particularly when factoring in its specialization in student housing. The Compensation Committee, in consultation with FPL, therefore strove to formulate a peer group of companies that include the following characteristics:
Industry and business strategy - companies with similar business models, philosophies, and investment criteria.
Ownership structure - companies organized as publicly traded REITs.
Size - companies which are similar in size and scope, with the primary measure being total capitalization and leasable units under management.
Operational intensity - companies with a comparable number of leasing units administered and similar complexity of diverse business activities and geographic reach.
Complexity - companies engaged in transactions of a similar complex nature, such as development activities, joint ventures, and public/private partnerships.
Talent - companies that the Company competes with for executive talent.
Index - companies classified within the FTSE NAREIT Residential Index, as well as relative weighting within the Index.
Other considerations - companies the Company competes with for investors, or which key analysts and proxy advisory firms name as a peer and which cite us as a peer.
Based on the analysis and considerations provided by FPL, the Compensation Committee determined that the following 16 companies represent the characteristics noted above. In order to ensure the goals outlined above were met, the Compensation Committee evaluated both the characteristics of each individual company as well as the composition of the peer group as a whole. The Compensation Committee also considered the Company’s specialization as the only student housing REIT with unique operational and market cycles, which, unlike the peer group companies, has fundamentals that drive the Company’s success in its business model but do not always correlate to broader macroeconomic trends. Additionally, the Company manages a student housing tenant base that is not directly comparable to the peer companies; as such, its operational characteristics and dynamics are unique. The following companies may individually demonstrate comparability in certain of the criteria noted above, but not in all.
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Apartment Investment and Management Company | Federal Realty Investment Trust |
AvalonBay Communities, Inc. | Invitation Homes Inc. |
Camden Property Trust | Mid-America Apartment Communities, Inc. |
CubeSmart | Ryman Hospitality Properties, Inc. |
Equity LifeStyle Properties, Inc. | Sun Communities, Inc. |
Equity Residential | Tanger Factory Outlet Centers, Inc. |
Essex Property Trust, Inc. | UDR, Inc. |
Extra Space Storage, Inc. | Weingarten Realty Investors |
After the peer group was finalized, the Compensation Committee engaged FPL to provide an updated evaluation of the Company’s overall compensation program design, taking into account this peer group. As part of this analysis, FPL provided market data and compensation practice information on this peer group and advised on trends and developments in executive compensation practices and philosophies generally.
In determining 2019 compensation targets for Named Executive Officers, the Compensation Committee considered the competitive positioning of executive compensation levels relative to compensation data for the peer companies with respect to the following components of pay: base salary, cash incentive awards, and long-term equity incentive awards. Consistent with the Company’s compensation philosophy, the Compensation Committee generally targeted the median of the peer companies for each of these components and for total compensation. The executive compensation program was designed to deliver compensation levels above or below these targets if performance exceeded or failed to achieve the goals established for the annual cash and long-term equity incentive awards. The Compensation Committee believes this methodology is appropriate for the Company’s operating style and reflects the need to attract and retain top executive talent.
Compensation Mix
The executive compensation philosophy promotes a compensation mix that emphasizes variable pay and long-term stockholdershareholder value. An emphasis on incentive compensation creates greater alignment with the interests of stockholders,shareholders, ensures that the business strategy is executed by decision-makers in a manner that focuses on the creation of long-term value rather than only short-term results, and encourages prudent evaluation of risks. Accordingly, the compensation structure is designed such that a significant portion of Named Executive Officers’ total direct compensation is in the form of equity awards granted at the end of the performance period based on pastachieved performance that vest over time.results with additional service-based vesting requirements.
Pay at Risk
The following diagram illustrates the total direct compensation targets of the CEO and each other active Named Executive Officer for 2019.2021, other than Ms. Voss, for whom the Compensation Committee determined 2021 compensation based on the committee’s judgment of her overall performance and the performance of the group over which she has direct responsibility. The charts outline the size, in percentage terms, of the targeted direct compensation elements (at the date of grant) pre-established by the Compensation Committee for performance year 2019.2021. CEO target compensation reflects additional weight on long-term equity incentive compensation because the Compensation Committee believes that, due to his leadership role as Chief Executive Officer, his compensation structure should reflect even greater alignment with stockholders.shareholders. The dark outer band of the charts reflects the incentive or at-risk performance-based components of compensation (e.g.(e.g., 86% of the CEO’s 20192021 target direct compensation was at-risk performance based).
Elements and Philosophy of the Compensation Program
For 2019,2021, the compensation provided to executive officers consisted of the same elements generally available to non-executive officers: base salary; annual cash incentive compensation; long-term equity incentive compensation; and other perquisites and benefits.
|
| | | | | | | |
PRINCIPAL ELEMENTS OF PAY |
The elements of the Company’s executive compensation program are presented below in summary format. |
COMPONENT | FORM | PURPOSE |
| | |
Base Salary | Cash | Provide a competitive fixed rate of pay recognizing different levels of responsibility and performance within the Company. |
| | |
Annual Incentive | Performance Cash Award
| Reward executives for achieving transactional, operational, financial and strategic objectives. |
| | |
Long-Term Incentive | Performance Shares (RSAs)
| Motivate executives to achieve pre-established financial goals, superior TSR performance and tailored individual goals consistent with the Company’s strategic plan. Provides retention benefits and enhanced stockholdershareholder alignment. |
| | |
Other Benefits and Perquisites | Health, Welfare and Retirement Programs | Executives are generally eligible to participate in the same benefit programs that are offered to non-executive employees. Company benefits are designed to provide market competitive benefits to protect employees’ and their covered dependents’ health and welfare and provide retirement benefits. |
Base SalarySalary.. The base salary payable to each Named Executive Officer provides a fixed component of compensation that reflects the executive’s position and responsibilities. Base salary is generally targeted to approximate the competitive market median of the peer companies but may deviate from this target based on an individual’s sustained performance, contributions, leadership, experience, expertise and specific roles within the Company as compared to the benchmark data. The Compensation Committee reviews base salaries annually and may make adjustments to better match competitive market levels or to recognize an executive’s professional growth and development or increased responsibilities. The Compensation Committee also considers the success of each executive officer in developing and executing on strategic plans, exercising leadership and creating stockholdershareholder value.
In determining base salaries for the Named Executive Officers, the Compensation Committee analyzes base salary information of the peer companies. Although the Compensation Committee periodically considers information from REIT industry and other compensation surveys, it places primary emphasis on publicly available data from the peer companies’ proxy statements and other SEC filings, which is more detailed by individual executive officer position than the data typically provided in compensation surveys.
Annual Cash Incentive CompensationCompensation.. Named Executive Officers are provided with an annual opportunity to earn cash incentive awards. For each Named Executive Officer, annual cash incentive compensation reflects the achievement of pre-established measures related to transactional, operational, financial and strategic objectives that serve as the underlying assumptions in the Company’s stated earnings guidance such as NOI and rental revenue growth, operating margin improvement, the achievement of targeted development yields, quality external growth, and targeted dispositions. The Compensation Committee also considers each executive’s individual performance, departmental performance, and the overall performance of the Company.
Long-Term Equity Incentive CompensationCompensation. . The Compensation Committee and the independent members of the Board continually evaluate the long-term incentive plan in the context of the overall executive compensation program, the Company’s business needs and feedback from stockholders.shareholders. This process includes assessing the level of discretion permitted in evaluating the performance of and objectives achieved by the Named Executive Officers. The Compensation Committee has concluded that a significant portion of each Named Executive Officer’s long-term equity incentive awards will be determined based on the achievement of pre-established one and three-year quantitative performance metrics, as determined at the conclusion of a performance period, that are not subject to Compensation Committee discretion. These specific performance factors are aligned with the Company’s business strategy and current market conditions and are based on objective, quantifiable measures. Such factors include the Company's same store lease-up performance relative to student housing peers, absolute and relative TSR and FFOM per share achieved.
In addition, when assessing the weight that should be placed on discretionary and subjective measures of performance, the Compensation Committee also considers the importance of maintaining flexibility in the evaluation of long-term performance. While measuring performance relative to objective metrics is important and is a key part of the overall long-term incentive program, the Compensation Committee philosophically believes it is important to also assess more intangible accomplishments such as leadership development and overall execution of the Company’s mission and long-term strategic business plan which can include decisions that may impact the ability to meet certain objective metrics. Examples includeFor 2021, the Compensation Committee considered the Company’s performance and achievements despite the circumstances of the year continuing to be affected by the COVID-19 pandemic. The Compensation Committee believes the Company is well positioned to capitalize on future opportunities, due primarily to the extraordinary efforts of its employees and executive leadership. Another example is the strategic reinvestment in technology and systems and capital allocation decisions such as opportunistic dispositions of properties that were not originally contemplated when establishing objective compensation metrics for the year.systems. The flexibility permitted in the subjective portion of the compensation program allows management to adjust to meet rapidly changing market and business conditions and to act in the best interests of stockholdersshareholders to incentivize, create, and preserve, long-term value for the Company’s stakeholders. Additionally, the Compensation Committee believes that having rigid goals and formulaic determinations of performance for the entire long-term incentive opportunity may increase compensation risk by encouraging a narrow focus that may be inappropriate in light of these industry and strategic considerations.
When evaluating a suitable allocation between such objective and subjective measures of performance, the Compensation Committee concluded that a 50/50 split between a formulaic objective evaluation of performance and a more qualitative subjective evaluation provides the appropriate incentive structure and balance to drive long-term stockholdershareholder value and discourage excessive risk-taking. The Compensation Committee also considered that, as the only publicly traded student housing REIT, the Company is uniquely impacted by different market cycles as compared to other REITs, and in a constantly evolving business environment, certain of the objective performance measures may not be met for a fiscal year due to strategic business decisions made in the interest of long-term stockholdershareholder value. Additionally, the specialized nature of student housing involves a one-time annual lease-up process, managing customer service for a unique tenant base, continually fostering University relationships, and managing an employee base much larger than most companies of similar size due to the need for higher staffing levels (including student Community Assistants) at our properties. For these reasons, the Compensation
Committee deems it important to retain a certain level of discretion in evaluating performance, having the flexibility to discretionarily adjust incentive awards to take into account the Company’s unique and specialized dynamics. The Compensation Committee believes that this 50/50 approach is instrumental in driving consistent, superior total returns to stockholdersshareholders and limiting risk in the executive compensation program.
Unlike companies that grant equity awards on a prospective basis prior to performance, the Company’s long-term equity incentive plan is retrospective in nature, such that equity awards are granted following the satisfactiondetermination of specifiedachieved performance goals.results compared to preset performance goals and targets. Similar to annual cash incentive awards, the grant and value of long-term equity incentive awards are approved at the beginning of each fiscal year and determined solely by performance achieved inover the preceding fiscal year.applicable one and three-year performance periods. If threshold performance has not been achieved with respect to a performance goal for a particular performance period, the portion of the long-term equity incentive awards based on that performance goal is not granted for that period. Therefore, at the time of their grant, long-term equity incentive awards have been fully earned and are not subject to additional performance-based vesting requirements. These awards vest over a five-year period, furnishingTo promote retention benefits and creating significantcreate long-term alignment with stockholders
shareholders by incentivizing each Named Executive Officer to identify and accomplish long-term business objectives that generate value through stock price appreciation and dividend growth.growth, these awards are then subject to a five-year vesting period.
Because of the retrospective nature of the long-term equity incentive plan and the SEC’s disclosure rules, the 20202022 long-term equity incentive awards granted to Named Executive Officers do not appear in the 20192021 Summary Compensation Table, but will be reflected in next year’s Summary Compensation Table as RSAs granted in 2020.2022.
Compensation Consultant and Benchmarking
Independent Consultant and Benchmarking: The Compensation Committee retained Ferguson Partners Consulting L.P. (“FPC”) as its independent compensation consultant to advise on matters related to compensation levels and program design. As part of this analysis, FPC provided market data and compensation practice information on the peer group companies, and advised on trends and developments in executive compensation practices and philosophies generally. At the time of engagement, the Compensation Committee reviewed independence, and determined that FPC met the independence criteria under the Compensation Committee charter and that FPC’s engagement raised no conflict of interest.
Peer group: As the Company had maintained its prior peer group for several years, FPC recommended and the Compensation Committee agreed that it was prudent to reassess the composition of the Company’s peer group in 2021 to ensure the design and structure of the compensation program continues to be appropriate and consistent with market developments.
The Compensation Committee noted that the Company has no publicly traded direct business competitors, particularly when factoring in its specialization in student housing. The Compensation Committee, in consultation with FPC, therefore strove to formulate a peer group of publicly traded companies that include the following characteristics:
2019
| | | | | |
Guiding Factors for Selecting ACC Peers |
Public Student Housing REITs | None – we are the only public student housing focused REIT. |
Industry and Business Strategy | Companies with similar business models, philosophies, and investment criteria, including companies that are classified within the FTSE Nareit Residential Index |
Size | Companies which are similar in size and scope, with the primary measure being total capitalization and leasable units under management |
Operational Intensity and Complexity | Companies with a comparable number of leasing units administered and similar complexity of diverse business activities and geographic reach or companies engaged in transactions of a similar complex nature, such as development activities, joint ventures, and public/private partnerships |
Competition | Companies that we compete with for executive talent, and companies that we compete with for investors and which key analysts name as a peer |
Other Considerations | Companies that cite us as a peer |
Based on the analysis and considerations provided by FPC, the Compensation Committee determined that five legacy peers no longer most closely represented the characteristics noted above. Specifically:
•Extra Space Storage, Inc. and Tanger Factory Outlet Centers, Inc. no longer met the recommended size parameter
•Federal Realty Investment Trust did not meet the recommended operational intensity or industry parameters
•Weingarten Realty Investors did not meet the recommended industry parameter due to being acquired
•Apartment Investment and Management Company (AIV) no longer met the recommended size parameter, while Apartment Income REIT Corp. (AIRC), a spinoff of legacy AIV, met several of the characteristics and was recommended for inclusion
| | | | | | | | | | | | | | | | | | | | |
Company Name | Asset Class (1) | Size | Existing Peer | Cite ACC as a Peer | ISS Peer | Operationally Intensive |
American Homes 4 Rent | X | X | | X | X | X |
Apartment Income REIT Corp. | X | X | X (Aimco) | | X (Aimco) | X |
AvalonBay Communities, Inc. | X | | X | | | X |
Camden Property Trust | X | X | X | X | X | X |
CubeSmart | | X | X | X | X | X |
Equity LifeStyle Properties, Inc. | X | X | X | X | X | X |
Equity Residential | X | | X | | | X |
Essex Property Trust, Inc. | X | | X | | | X |
Independence Realty Trust, Inc. | X | | | X | | X |
Invitation Homes Inc. | X | | X | | | X |
JBG SMITH Properties | | X | | | | X |
Life Storage, Inc. | | X | | | X | X |
Mid-America Apartment Communities, Inc. | X | | X | | | X |
National Storage Affiliates Trust | | X | | | | X |
OUTFRONT Media Inc. (REIT) | X | X | | | | X |
Ryman Hospitality Properties, Inc. | | X | X | X | X | X |
Sun Communities, Inc. | X | | X | X | X | X |
UDR, Inc. | X | X | X | X | X | X |
| | | | | | |
(1) Includes other residential companies as well as companies with a special focus. |
As depicted above and based on the analysis and considerations provided by FPC, these 18 companies most closely represented the characteristics noted above. In order to ensure the goals outlined above were met, the Compensation Committee evaluated both the characteristics of each individual company as well as the composition of the peer group as a whole. The Compensation Committee also considered the Company’s specialization as the only student housing REIT with unique operational and market cycles, which, unlike the peer group companies, has fundamentals that drive the Company’s success in its business model but do not always correlate to broader macroeconomic trends. Additionally, the Company manages a student housing tenant base that is not directly comparable to the peer companies; as such, its operational characteristics and dynamics are unique. The following companies may individually demonstrate comparability in certain of the criteria noted above, but not all.
| | | | | | | | | | | | | | | | | | | | |
- | | + | | | | |
COMPANIES REMOVED | | COMPANIES ADDED | | | American Homes 4 Rent | Invitation Homes Inc. |
Apartment Investment and | | American Homes 4 Rent | | → | Apartment Income REIT Corp. | JBG SMITH Properties |
Management Company | | Apartment Income REIT Corp. | | AvalonBay Communities, Inc. | Life Storage, Inc. |
ExtraSpace Storage, Inc. | | Independence Realty Trust, Inc. | | Camden Property Trust | Mid-America Apartment Communities, Inc. |
Federal Realty Investment Trust | | JBG SMITH Properties | | CubeSmart | National Storage Affiliates Trust |
Tanger Factory Outlet Centers, Inc. | | Life Storage, Inc. | | Equity LifeStyle Properties, Inc. | OUTFRONT Media Inc. (REIT) |
Weingarten Realty Investors | | National Storage Affiliates Trust | | Equity Residential | Ryman Hospitality Properties, Inc. |
| | OUTFRONT Media Inc. | | Essex Property Trust, Inc. | Sun Communities, Inc. |
| | | | | Independence Realty Trust, Inc. | UDR, Inc. |
| | | | | | |
After the peer group was finalized, the Compensation Committee consulted with FPC to provide an evaluation of the Company’s overall compensation program design, considering the new peer group. As part of this analysis, FPC provided market data and compensation practice information on the new peer group companies, and advised on trends and developments in executive compensation practices and philosophies generally.
2021 Executive Compensation
As noted earlier, and in the context of 2021 compensation, it is worth acknowledging that the Company’s 2021 outlook, and therefore the financial metrics used to assess management’s performance for 2021, were below the actual results produced for 2020. This was due to the ongoing impact of the pandemic on the 2020-2021 academic year occupancy at the Company’s properties, which affected a significant portion of 2021, and the gradual return to normal operations that was expected to occur over two academic year cycles.
The Compensation Committee considered all of the factors established under the executive compensation program for 20192021 and has discretion to consider other relevant factors, although it places the greatest emphasis on the factors noted in the “2019“2021 Base Salary,” “2019“2021 Annual Cash Incentive Awards” and “2019“2021 Long-Term Equity Incentive Awards” sections below.
The table below sets forth total direct compensation (base
2021 Base Salary.Base salary + annual cash incentive award + long-term equity incentive award)for 2021 was unchanged from that paid in 2020.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Base Salary | | Year-Over-Year % Change | |
| | | 2021 | | 2020 | | |
| William C. Bayless, Jr. | | $ | 822,000 | | | $ | 822,000 | | | 0.0 | % | |
| Jennifer Beese | | $ | 550,000 | | (1) | $ | 445,600 | | | 23.4 | % | |
| William W. Talbot | | $ | 466,700 | | | $ | 466,700 | | | 0.0 | % | |
| Daniel B. Perry | | $ | 445,600 | | | $ | 445,600 | | | 0.0 | % | |
| Kim K. Voss | | $ | 343,700 | | | $ | 343,700 | | | 0.0 | % | |
(1) Represents base salary upon Ms. Beese's promotion to President and Chief Operating Officer, effective August 24, 2021.
2021 Annual Cash Incentive Awards. At the beginning of each active Named Executive Officer for 2019, 2018 and 2017, consistent with the manner in which2021, the Compensation Committee evaluates executivereviewed the market compensation benchmarks provided by its independent compensation consultant and pay-for-performance alignment. This table differs fromset the following threshold, target and maximum cash incentive opportunities for 2021 performance to maintain competitiveness of our compensation reported inprogram with the 2019 Summary Compensation Table in that it reflects the value ofmarket pay levels and to reflect executives’ individual performance over time, internal pay equity and other factors for our Named Executive Officers’ long-term equity incentive awards inOfficers, other than Ms. Voss. The Compensation Committee determined Ms. Voss’s 2021 compensation based on the performance year for which they were earned, rather than the year in which they were granted (e.g., long-term equity incentive awards granted in January 2020 for 2019 performance are shown in the table below as 2019 compensation). While compensation reported in the 2019 Summary Compensation Table is useful, the SEC’s disclosure rules do not take into account the retrospective natureCommittee’s judgment of the Company’s executive compensation program and therefore create a one-year lag between the value of Named Executive Officers’ long-term equity incentive awardsher overall performance and the performance year forof the group over which they were earned (e.g., long-term equity incentive awards granted in January 2020 for 2019 performance will not be shown in the Summary Compensation Table until the 2021 Proxy Statement as 2020 compensation). This table supplements, and does not replace, the 2019 Summary Compensation Table.she has direct responsibility.
SUPPLEMENTAL COMPENSATION TABLE REFLECTING THE RETROSPECTIVE LONG-TERM INCENTIVE PLAN |
| | | | | | | | | | | | | | | | | | |
Name | | Performance Year | | Salary | | Annual Cash Incentive Award | | Value of Long-Term Equity Incentive Award | | Total Direct Compensation(1) |
William C. Bayless, Jr. | | 2019 | | $ | 800,000 |
| | $ | 1,275,000 |
| | $ | 4,532,400 |
| | $ | 6,607,400 |
|
| | 2018 | | 790,500 |
| | 1,100,000 |
| | 3,230,000 |
| | 5,120,500 |
|
| | 2017 | | 775,000 |
| | 875,000 |
| | 2,325,000 |
| | 3,975,000 |
|
| | | | | | | | | | |
William W. Talbot | | 2019 | | $ | 453,100 |
| | $ | 800,000 |
| | $ | 1,699,650 |
| | $ | 2,952,750 |
|
| | 2018 | | 394,000 |
| | 625,000 |
| | 1,070,000 |
| | 2,089,000 |
|
| | 2017 | | 382,500 |
| | 450,000 |
| | 765,000 |
| | 1,597,500 |
|
| | | | | | | | | | |
Jennifer Beese | | 2019 | | $ | 432,600 |
| | $ | 750,000 |
| | $ | 1,636,700 |
| | $ | 2,819,300 |
|
| | 2018 | | 360,500 |
| | 600,000 |
| | 980,000 |
| | 1,940,500 |
|
| | 2017 | | 350,000 |
| | 450,000 |
| | 700,000 |
| | 1,500,000 |
|
| | | | | | | | | | |
James C. Hopke, Jr. | | 2019 | | $ | 475,000 |
| | $ | 650,000 |
| | $ | 1,353,425 |
| | $ | 2,478,425 |
|
| | 2018 | | 463,500 |
| | 550,000 |
| | 1,260,000 |
| | 2,273,500 |
|
| | 2017 | | 450,000 |
| | 450,000 |
| | 850,000 |
| | 1,750,000 |
|
| | | | | | | | | | |
Daniel B. Perry | | 2019 | | $ | 432,600 |
| | $ | 650,000 |
| | $ | 1,353,425 |
| | $ | 2,436,025 |
|
| | 2018 | | 360,500 |
| | 550,000 |
| | 980,000 |
| | 1,890,500 |
|
| | 2017 | | 350,000 |
| | 450,000 |
| | 700,000 |
| | 1,500,000 |
|
| |
(1) | Total direct compensation consists of base salary, annual cash incentive awards and long-term equity incentive awards for the respective performance year. It does not include amounts shown in the “All Other Compensation” column of the 2019 Summary Compensation Table. |
2019 Base Salary. Following a review of compensation data for peers with substantially similar roles and responsibilities (as described under “Compensation Consultant and Benchmarking”), Messrs. Bayless, Hopke, Perry, Talbot and Ms. Beese received an increase in base salary for 2019 to generally remain at the market average. Messrs. Perry, Talbot and Ms. Beese received above normal increases in base salary in 2019 due to significant increases in their responsibilities since assuming their current roles.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Cash Incentive Opportunity | | | |
| | | | | |
| Executive | | Threshold | | Target | | Maximum | | |
| William C. Bayless, Jr. | | $ | 675,000 | | | $ | 1,350,000 | | | $ | 2,025,000 | | | | |
| Jennifer Beese | | $ | 425,000 | | | $ | 850,000 | | | $ | 1,275,000 | | | | |
| William W. Talbot | | $ | 425,000 | | | $ | 850,000 | | | $ | 1,275,000 | | | | |
| Daniel B. Perry | | $ | 350,000 | | | $ | 700,000 | | | $ | 1,050,000 | | | | |
| | | | | | | | | | |
|
| | | | | | | | | |
| Base Salary | | Year-Over-Year % Change |
| 2019 | | 2018 | |
William C. Bayless, Jr. | $ | 800,000 |
| | $ | 790,500 |
| | 1.2% |
William W. Talbot | $ | 453,100 |
| | $ | 394,000 |
| | 15.0% |
Jennifer Beese | $ | 432,600 |
| | $ | 360,500 |
| | 20.0% |
James C. Hopke, Jr. | $ | 475,000 |
| | $ | 463,500 |
| | 2.5% |
Daniel B. Perry | $ | 432,600 |
| | $ | 360,500 |
| | 20.0% |
2019 Annual Cash Incentive Awards. As set forth below,The Company’s 2021 performance with regard to financial metrics measured and the Named Executive Officers’ annual cash incentive award opportunity for 2019 performance considered the achievement of the transactional, operational, financial and individual and departmental performance objectives that served as the underlying assumptions in the Company’s stated earnings guidance. The Compensation Committee also considered each executive's individual and departmental accomplishments as set forth below.
|
| | | | | | | | | | | | | |
| | | Cash Incentive Opportunity |
| Executive | | Threshold | | Target | | Maximum |
| William C. Bayless, Jr. | |
| $637,500 |
| |
| $1,275,000 |
| |
| $1,912,500 |
|
| William W. Talbot | |
| $400,000 |
| |
| $800,000 |
| |
| $1,200,000 |
|
| Jennifer Beese | |
| $375,000 |
| |
| $750,000 |
| |
| $1,125,000 |
|
| James C. Hopke, Jr. | |
| $325,000 |
| |
| $650,000 |
| |
| $975,000 |
|
| Daniel B. Perry | |
| $325,000 |
| |
| $650,000 |
| |
| $975,000 |
|
The Company’s 2019 performance, as measured byof the performance metricsNamed Executive Officers (other than Ms. Voss) utilized for determining the 20192021 annual cash incentive awards waswere as follows:set forth in the following two tables:
| | | | | | | | | | | | | | | | | | | | |
| Goals | Actual |
| Threshold | | Target | | Maximum | Performance |
| | | | | | |
Owned property NOI $ | $424.4 million | | $440.6 million | | $456.7 million | $481.4 million |
FFOM $ | $241.9 million | | $261.6 million | | $281.2 million | $300.6 million |
| | | | | | |
Same store NOI growth for full year 2021 compared to 2020 | (3.8) | % | | (0.7) | % | | 2.5 | % | 5.2% |
Same store rental revenue growth for Fall 2021 lease-up | 4.6 | % | | 7.3% | | 9.9 | % | 10.1% |
Same store operating margin | 52.0 | % | | 52.9% | | 53.8 | % | 54.3% |
Capital sourcing during 2021 consistent with the Company's strategic business plan | $60.0 million | | n/a | | $125.0 million | $331.4 million |
Response to COVID-19 challenges and working with university partners to re-stabilize the Company's operations | n/a | | n/a | | n/a | See discussion following |
|
| | | | | | | |
| Goals | | Actual |
| Threshold | | Target | | Maximum | | Performance |
| | | | | | | |
Owned property NOI $ | $482.8 million | | $487.4 million | | $492.0 million | | $490.0 million |
FFOM $ | $325.9 million | | $333.3 million | | $340.0 million | | $336.2 million |
| | | | | | | |
Same store NOI growth for full year 2019 compared to 2018 | 1.6% | | 2.5% | | 3.4% | | 2.7% |
Same store rental revenue growth for Fall 2019 lease-up | 1.5% | | 2.25% | | 3.0% | | 1.7% (1) |
Same store operating margin | 54.4% | | 54.7% | | 55.0% | | 55.3% |
Year 1 yields on 2019 developments | n/a | | 6.3% | | n/a | | 6.3% |
Rental revenue growth for 2019 / 2020 academic year for 2018 developments | n/a | | 3.9% | | n/a | | 3.6% |
External growth during 2019 consistent with the Company’s strategic business plan | n/a | | n/a | | n/a | | $358.0 million |
Joint ventures and/or dispositions during 2019 | $100 million | | n/a | | $190 million | | $109.5 million |
| |
(1) | Same store rental revenue growth for the Fall 2019 lease-up adjusted to include only the Company's 55% share of the Austin portfolio, which is held through a joint venture, was 2.0%.
48
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|
| | | | | | | |
NAMED EXECUTIVE OFFICER | | INDIVIDUAL AND DEPARTMENTAL PERFORMANCE OBJECTIVESACCOMPLISHMENTS |
| | |
William C. Bayless, Jr. | • | SetProvided outstanding leadership, directed the Company's strategic vision.response to COVID-19 and led our re-stabilization in 2021, amid lingering effects of the pandemic. |
| • | Provided outstanding leadership. |
| • | RefinedCollaborated with the Board of Directors to refine and enhancedenhance the Company'sCompany’s long-term strategic business plan.plan, including significant work with the newly formed Capital Allocation Committee to evaluate historic investment results and make appropriate adjustments to short and long-term capital allocation strategy. |
| • | Ensured collaborative stakeholder communication inand served as a leading student housing industry spokesperson regarding the midst of changing market dynamics.sector’s resiliency and recovery amid the pandemic. |
| • | CollaboratedContinued work with the Board of Directors on strategic succession planning ensuringto ensure the breadth and depth of talent at all leadership levels is fully exploited.exploited, including promotion of Jennifer Beese to President, and Lonnie Ledbetter to Chief Purpose and Inclusion Officer. |
| | |
Jennifer Beese | • | Provided outstanding leadership of our operations and leasing teams, including employment of our Next Gen operating systems to execute record levels of spring 2021 mid-term leases, helping to further renormalize our business early in the year. |
| • | Successfully completed the annual Fall lease-up of the Company’s portfolio, thereby re-stabilizing our operations and achieving results exceeding the high end of our guidance and outperforming our student housing peers. |
| • | Expanded the Company’s support of the ‘Hi, How Are You?’ mental health awareness project, pioneered our College Student 2021 Mental Wellness Survey and advanced our Diversity and Inclusion Committee, in support of our residents and employee wellbeing through our ESG initiatives. |
| | |
William W. Talbot | • | Enhanced the quality of the Company's portfolio through strategic capital recycling. |
| • | Strengthened the Company's portfolio through development activities. |
| • | With Mr. Perry, continuedexpanded our strategic capital platform to develop relationships with potential institutional andutilize joint venture partners, addingand private equity capital to enhance sustainable long-term shareholder value by forming a new joint venture with Harrison Street (in their social infrastructure platform), to ultimately recapitalize a 45% interest in our eight-property Arizona State University student housing portfolio for aggregate proceeds of $551.3 million.Upon the closing of this two-phase transaction, it is expected to provide a total of $551.3 million of proceeds to the Company's availableCompany, which fully satisfies the Company’s 2022 capital sources.sourcing transactions and provide for additional capital proceeds moving into 2023. |
| | |
Jennifer Beese | • | Effectively managed the Company's operating platform and annual leasing process. |
| • | Maintained the Company's reputation as a great place to live, with a focus on resident satisfaction. |
| • | Led the Company's culture initiatives, ensuring both corporate and on-site property employees are highly satisfied with the Company's work environment. |
| | |
James C. Hopke, Jr. | • | Continued to advance the Company's on and off-campus development pipeline and implementation of assetworked intensively with both our university partners and the Walt Disney World management initiativesto return the associated properties’ occupancy and rental revenue to targeted levels. |
| • | Expanded the Company's successful public-private partnership business with university clients, resulting in significant value creation and operating expense controls.the commencement of four on-campus third-party development projects, which provided third-party development revenues exceeding the Company’s 2021 plan. |
| | |
Daniel B. Perry | • | OversawProvided leadership and provided strategic leadershiptransparency in communications with investors, lenders, ratings agencies and other stakeholders, including providing timely and robust disclosure, and ensuring that the Company maintained an adequate liquidity position, amidst the pandemic.Also, coordinated with Mr. Talbot on the execution of the joint venture with Harrison Street, thereby satisfying the Company’s capital needs for 2022 and advancing the Company’s strategy to the Company's information technology function.increase self-funding. |
| • | Developed and deployed analytical benchmarking tools to assess productivity metrics that were utilized in conjunction with Next Gen budgeting and forecasting tools, allowing for earlier executive review and opportunity to implement cost control initiatives. |
| • | Advancement of the Company's corporate social responsibility goals and overall ESG program.program, including specific focus on communication of our ESG initiatives, metrics, and advancements with regard to reporting under the SASB framework, as more fully discussed under Corporate Responsibility / ESG. |
| | |
Daniel B. Perry | • | Provided effective oversight of the Company's capital markets, accounting, financial reporting, risk management, tax, and investor relations functions. |
| • | With Mr. Talbot, continued to develop relationships with potential institutional partners, adding to the Company's available capital sources. |
| • | Proactively managed multi-year financial planning and budgeting capabilities and identified cash flow optimization opportunities. |
When determining the 2019 cash incentive awards, the Compensation Committee noted that a majority of the quantitative goals listed above were achieved, and in some cases exceeded.
After taking all quantitative factors into account as well as each Named Executive Officer’s individual and department accomplishments, the Compensation Committee determined that the 20192021 cash incentive awards are as follows:follows (other than Ms. Voss), which, in total, represents 148% of target. The Compensation Committee determined Ms. Voss’s 2021 compensation based on the Compensation Committee’s judgment of her overall performance and the performance of the group over which she has direct responsibility.
| | | Award | | Award | | Percent of Target |
William C. Bayless, Jr. | $ | 1,275,000 |
| William C. Bayless, Jr. | $ | 1,960,000 | | | 145 | % |
Jennifer Beese | | Jennifer Beese | $ | 1,275,000 | | | 150 | % |
William W. Talbot | $ | 800,000 |
| William W. Talbot | $ | 1,275,000 | | | 150 | % |
Jennifer Beese | $ | 750,000 |
| |
James C. Hopke, Jr. | $ | 650,000 |
| |
Daniel B. Perry | $ | 650,000 |
| Daniel B. Perry | $ | 1,050,000 | | | 150 | % |
Kim K. Voss | | Kim K. Voss | $ | 475,000 | | | n/a |
2019
2021 Long-Term Equity Incentive AwardsAwards. . Our program measures performance over a trailing 1- and 3-year period and compensates our executives for performance delivered over this period through a long-term restricted stock grant. To date, the Compensation Committee has determined that the awards will vest over five years, and believes that this is the best way to align performance with payouts, creates long-term shareholder-aligning retentive impacts on our executives, and is in the best interests of shareholders.
As set forth below, 50% of each Named Executive Officer’s (other than Ms. Voss) annual long-term equity incentive award for 2019 performance was based on four pre-established quantitative goals where achievement was not subject to the Compensation Committee’s discretion, and the other 50% was based on the Compensation Committee’s subjective consideration of performance related to pre-established management objectives as well as performance in advancing the Company’s long-term strategic business plan duringplan. The Compensation Committee determined Ms. Voss’s 2021 compensation based on the year. Compensation Committee’s judgment of her overall performance and the performance of the group over which she has direct responsibility.
Awards are expressed as a fixed dollar amount at threshold, target and highmaximum levels and, to the extent performance fell between two levels with respect to any quantitative metric, linear interpolation was applied. If actual performance did not meet the threshold requirement, no awards were earned for the applicable metric. If actual performance is above the maximum for a metric, the award is the maximum number for the participant’s opportunity.
Awards are granted in the form of RSAs based on the dollar value of the earned award, which is converted into the number of RSAs based on the closing price of the Company’s common stock on the date of grant.
Similar to the annual cash incentive award opportunity, the Compensation Committee set the following threshold, target and maximum long-term equity incentive opportunities for 2021 performance based upon market data from our independent compensation consultant, individual performance over time, internal pay equity and other factors.
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Long-Term Incentive Opportunity | |
| Executive | | Threshold | | Target | | Maximum | |
| William C. Bayless, Jr. | | $ | 1,925,000 | | | $ | 3,850,000 | | | $ | 5,775,000 | | |
| Jennifer Beese | | $ | 750,000 | | | $ | 1,500,000 | | | $ | 2,250,000 | | |
| William W. Talbot | | $ | 700,000 | | | $ | 1,400,000 | | | $ | 2,100,000 | | |
| Daniel B. Perry | | $ | 650,000 | | | $ | 1,300,000 | | | $ | 1,950,000 | | |
|
| | | | | | | | | | | | | |
| | | Long-Term Incentive Opportunity |
| Executive | | Threshold | | Target | | Maximum |
| William C. Bayless, Jr. | |
| $1,800,000 |
| |
| $3,600,000 |
| |
| $5,400,000 |
|
| William W. Talbot | |
| $675,000 |
| |
| $1,350,000 |
| |
| $2,025,000 |
|
| Jennifer Beese | |
| $650,000 |
| |
| $1,300,000 |
| |
| $1,950,000 |
|
| James C. Hopke, Jr. | |
| $537,500 |
| |
| $1,075,000 |
| |
| $1,612,500 |
|
| Daniel B. Perry | |
| $537,500 |
| |
| $1,075,000 |
| |
| $1,612,500 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | Targets | Actual Performance | Percent of Target |
| Metric | | Weighting | | Threshold | | Target | | Maximum |
| | | | | | | | | | | |
| GOAL 1: | | | | | | | | | | |
| 2021 Absolute TSR | | 10% | | 4.0% | | 8.0% | | 12.0% | 34.3% | 429% |
| | | | | | | | | | | |
| GOAL 2: | | | | | | | | | | |
| 2019-2021 Relative TSR vs. MSCI US REIT Index - 3 years (1) | | 10% | | 25th percentile | | 50th percentile | | 75th percentile | 59th percentile | 118% |
| | | | | | | | | | | |
| GOAL 3: | | | | | | | | | | |
| 2021 FFOM per share-diluted | | 10% | | $1.73 | | $1.87 | | $2.01 | $2.14 | 114% |
| | | | | | | | | | | |
| GOAL 4: | | | | | | | | | | |
| 2021 same store lease-up performance versus student housing competitive properties | | 20% | | 0.5% | | 1.0% | | 1.75% | 0.75% | 75% |
| Objective Criteria | | 50% | | | | | | | | |
| | | | | | | | | | | |
| GOAL 5: | | | | | | | | | | |
| Subjective Criteria | | 50% | | Subject to the determination of the | | Varies |
| | | | | Compensation Committee | | |
| | | 100% | | | | |
(1)The relative TSR comparison was measured against the total return version of the MSCI US REIT Index (RMS) for the three years ended December 31, 2021. |
| | | | | | | | | | | |
| | | | | Targets | | Actual Performance |
| Metric | | Weighting | | Threshold | | Target | | Maximum | |
| | | | | | | | | | | |
| GOAL 1: | | | | | | | | | | |
| 2019 Absolute TSR | | 10% | | 4% | | 8% | | 12% | | 18.3% |
| | | | | | | | | | | |
| GOAL 2: | | | | | | | | | | |
| 2019 Relative TSR vs. MSCI US REIT Index - 3 years(1) | | 10% | | 25th percentile | | 50th percentile | | 75th percentile | | 32nd percentile |
| | | | | | | | | | | |
| GOAL 3: | | | | | | | | | | |
| 2019 FFOM per share-diluted | | 10% | | $2.30 | | $2.40 | | $2.45 | | $2.42 |
| | | | | | | | | | | |
| GOAL 4: | | | | | | | | | | |
| 2019 same store lease-up performance versus student housing competitive properties
| | 20% | | 0.5% | | 1.0% | | 1.75% | | 2.8% |
| Objective Criteria | | 50% | | | | | | | | |
| | | | | | | | | | | |
| GOAL 5: | | | | | | | | | | |
| Subjective Criteria | | 50% | | Subject to the determination of the | | |
| | | | | Compensation Committee | | |
| | | 100% | | | | |
| |
(1) | The relative TSR comparison was measured against the total return version of the MSCI US REIT Index (RMS) for the three years ended December 31, 2019. |
GOAL 1: Absolute Total StockholderShareholder Return
Why does this measure matter? TSR is the most direct measure of creation and preservation of stockholdershareholder value.
Result:The Company delivered TSR of 18.3%34.3% in 2019,2021, which was above the high endmaximum range, resulting in a payout of the range.150% of target for Goal 1.
GOAL 2: Relative Total StockholderShareholder Return vs. RMS Index
Why does this measure mattermatter?? By utilizing a relative measure of TSR performance over a three-year period, the impact of broader market or industry trends that do not directly reflect the Company’s actual performance are mitigated.
Result:TSR of 7.0%39.4% for the three years ended December 31, 20192021 was in the 32nd 59th percentile, which was between the thresholdtarget and targetmaximum levels of the range.range, resulting in a payout of 118% of target for Goal 2.
GOAL 3: Company Financial Measures — FFOM Per Share
Why does this measure matter?FFO is a common measure of operating performance for REITs because it excludes, among other items, the effect of gains and losses from real estate sales and real estate depreciation and amortization to allow investors, analysts and management to compare operating performance among companies and across time periods on a consistent basis. We also believe it is meaningful to present a measure we refer to as FFOM, which reflects certain adjustments to FFO related to the economic performance of our on-campus participating properties. When calculating FFOM, the Company also excludes property acquisition costs and other non-cash items, as determined in good faith.faith that do not reflect our core operations on a comparative basis. FFOM is presented because the Company considers it an important supplemental measure of operating performance and believes it is used by securities analysts, investors and other interested parties in the evaluation of the Company’s performance across time periods. A reconciliation of net income to FFO and FFOM for the year ended December 31, 2019, 2021,
is contained in the Company’s 20192021 Annual Report on Form 10-K and in the earnings release furnished on a Current Report on Form 8-K filed on February 19, 2020.22, 2022.
Result:In 2019,2021, the Company achieved FFOM of $2.42$2.14 per fully diluted share, which was betweenabove the maximum range, resulting in a payout of 150% of target and high end of the rangefor Goal 3.
.
GOAL 4: Company Performance - Lease-Up Results Relative to Student Housing Peers
Why does this measure mattermatter? ? The Company’s results of operations are significantly dependent upon the results of an annual lease-up period, including occupancy levels and rental rate growth achieved. Lease-up performance relative to competitive student housing properties in same store markets is the most direct measure of performance and reduces the influence of external factors on occupancy and rental rate not within management’s control. As the Company has no publicly traded direct business competitors specialized in student housing, this measure compares the Company’s achieved same store rental rate growth and occupancy in its same store markets as of September 30, 20192021 versus the average rental rate growth and occupancy achieved by student housing properties located within one-half mile in those same markets, as measured and reported by an independent data provider of student housing statistics.
Result: The Company achieved same store occupancy and rental rate growth that outperformed student housing peers by 2.80.75 percentage points in the 2019-20202021-2022 academic year lease-up as of September 30, 2019,2021, which was abovebetween the high endthreshold and target levels of the range.range, resulting in a payout of 75% of target for Goal 4.
SUMMARY: Objective Criteria
The Named Executive Officers earned awards ranging from 75% to 150% of the target opportunity for alleach of the four objective metrics which were calculated based on the weighting of each metric as a percent of the long-term incentive opportunity and the level of performance achieved. As discussed above, when 20192021 performance fell between two levels with respect to any metric, linear interpolation was applied.
GOAL 5: Individual Performance Under Management Objectives
Established by the Compensation Committee for Named Executive Officers
Goals
: Goals:Individual objectives relate to areas of special emphasis within the executive’s particular responsibilities and duties, with a particular focus on advancing the Company’s long-term strategic initiatives. Other extraordinary or unusual accomplishments or contributions, in light of the business risk environment, are also considered.
Why does this measure matter?A review of each Named Executive Officer’s annual accomplishments, both individually and respectively in relation to Company-wide accomplishments, enables the Compensation Committee to evaluate the specific contributions of the Named Executive Officer to the Company’s success and more closely link pay to performance.
Result:As determined by the Compensation Committee, each Named Executive Officer achieved between the target and maximum performance with respect to the tailored individual objectives designed to advance the Company’s long-term strategic initiatives, which represented 50% of the long-term equity incentive award opportunity. The significant accomplishments considered by the Compensation Committee in determining the subjective individual performance component of the Named Executive Officers’ 2019(other than Ms. Voss) 2021 awards are discussed below.
|
| | | | | | | |
NAMED EXECUTIVE OFFICER | | STRATEGIC INITIATIVE ADVANCEMENTS |
| | |
William C. Bayless, Jr. | • | ContinuedLed the Company with swift and decisive action through the recovery from the COVID-19 pandemic, including providing oversight and support to reinforcethe leasing and operations teams in maximizing interim spring and summer leasing, as students returned to campus in the 2020-2021 academic year, and executing a highly successful lease-up for the 2021-2022 academic year. |
| • | Reinforced the Company’s culture of excellence, collaboration and results-driven performance.compassion to all stakeholders including team members, residents and university partners. |
| • | EnvisionedCollaborated frequently with the Board of Directors, including onboarding three new directors, and working closely with the newly formed Capital Allocation Committee to evaluate the Company’s 10-year business strategy and potential growth opportunities and collaborated with the executive team to define strategic implementation.long-term capital allocation strategy. |
| • | Advanced the Company’s NextGen softwareCompany's long-term strategic business plan, including expanding our Strategic Capital Platform, ESG initiatives and business intelligence initiatives by improving the sophistication of product development, pricing strategies, market research and investment strategies.Next Gen systems deployment. |
| • | Energized the American Campus brand recognition, through engagement with organizations, events and media, creating extended visibility for the Company inproviding thought leadership to the student housing REITindustry and corporate communities.to the Company’s university partners during the pandemic. |
| • | Implemented actionable strategies from the resultsIncreased frequency of an extensive strategic planning exercise with the executive team utilizing the strengths/opportunities/aspirations/results (“SOAR”) methodology. |
| • | Metmeetings with key stakeholders, Board members, employees, equity and fixed income investors and research analysts to convey the Company’s messagestrategy to recover from the effects of focused capital allocationthe pandemic and continued operational improvement.capitalize on the positive industry tailwinds as we emerge from the pandemic. |
| | |
Jennifer Beese | • | Worked with executive team to analyzeSuccessfully transitioned responsibilities as the new President following Jim Hopke’s retirement, and led the Company's best-in-class property operations, marketing and leasing, and human resource productivity metricsteams, leading to the re-stabilization of our operations amidst the COVID-19 pandemic, with property NOI returning to pre-pandemic levels. |
| • | Oversaw establishment of the new Executive Vice President, Chief Purpose and multi-year corporate staffing trends, ensuringInclusion Officer position, focused on the advancement of ESG and D&I programs.Also expanded our support of mental health and wellness through the ‘Hi How Are You Project’ sponsorship, partnerships with various universities and other residence life programming at ACC communities. |
| • | Continued to deploy and enhance the Company’s employee base is organized in a manner to allow for efficiencyCOVID-19 response, as detailed above, among the Company’s on-site personnel and future scalability.residents. |
| | |
William W. Talbot | • | Led external growth efforts for 2019, which resulted inAdvanced the delivery of five ownedCompany’s ongoing and presalefuture development projects totaling $407.3 million of development cost on schedule, on budget and in-line with underwritten yield expectations. |
| • | Oversaw ongoing development ofpipeline, including a $615 million, 10,440-bed housing project for college students participating in the Disney College Program, which will be delivered in multiple phases through 2023. |
| • | Executed capital recycling activity, which resulted in the closing of $109.5 million of dispositions taking advantage of strong private market valuations for student housing properties. |
| • | Continued to expand the Company's successful public-private partnership business with university clients, being awarded fiveincluding four new on-campus development projects and achieving a record level of third-party development fee income.project awards since January 1, 2021. |
| • | Performed extensive marketClosely collaborated with the Capital Allocation Committee in evaluating historic investments and product evolution analysis including evaluation of detailed supplyevaluating existing investment and demand metrics at the amenitydisposition opportunities to maximize earnings and unit-plan level. |
| | |
Jennifer Beese | • | Successfully completed the annual Fall lease-up ofNet Asset Value (NAV) growth, and with Mr. Perry, continued to advance the Company’s entire portfolio, achieving positive same store rental revenue growth for the 15th consecutive year (each year since the Company’s IPO).
|
| • | Achieved 98.1% opening occupancy for the 5 new ownedPursue Growth 2030 initiative and presale development projects delivered in 2019, resulting in all projects reaching full stabilization at opening. |
| • | Oversaw development of live inventory systems allowing flexible inventory, attributeassociated Strategic Capital Platform and pricing configurations as well as implementation of proprietary business dashboards designed to improve decision executiondevelop relationships with potential institutional and user response times.
|
| • | With Mr. Hopke, oversaw and actively participated in the development of the Company's NextGen systems initiatives which resulted in significant capability improvements to the operating platform. |
| • | Led the Company's best-in-class property operations, marketing and leasing, and human resource teams, producing record levels of revenue and NOI. |
| | |
James C. Hopke, Jr. | • | Successfully led the Company's Technology Steering Committee, including working with Ms. Beese to implement significant improvements to the Company's operating platform through the development of NextGen systems. |
| • | Advanced internal financial reporting processes and tools to more efficiently report on property operating and leasing performance with improved forecasting accuracy. |
joint venture partners. |
| | |
| • | With Mr. Perry, implemented improved programs for rolling property-level operational and cash forecasting, which facilitated proactive decision making, improved cost control and operational performance.
|
| • | With the Investor Relations team, led the Company's Environmental, Social, and Governance ("ESG") initiatives, completing initial assessments, peer benchmarking, initial data collection procedures, and issuing the Company's initial public letter stating its dedication to sustainability. |
| • | Collaborated with the Company's information technology and internal audit teams to advance initiatives related to assessing and, where applicable, aligning with new and evolving data privacy and security regulations. |
|
| | |
NAMED EXECUTIVE OFFICER | | STRATEGIC INITIATIVE ADVANCEMENTS |
| | |
Daniel B. Perry | • | Employed a prudent capital allocationbalance sheet management strategy to address the liquidity and capital needs of the Company's vibrant development pipeline, in an environment whereCompany amid the Company' public equity is undervalued.uncertain COVID-19 environment. |
| • | Closely collaborated with the Capital Allocation Committee in evaluating historic investments and capital sourcing and deployment and evaluating market opportunities to maximize earnings and Net Asset Value (NAV) growth, and with Mr. Talbot, continued to advance the Company’s Pursue Growth 2030 initiative and associated Strategic Capital Platform and develop relationships with potential institutional and joint venture partners. |
| • | With Mr. Hopke and the Investor Relations team, advanced the Company's Environmental, Social, and Governance ("ESG")ESG initiatives, completing initialdetailed assessments, peer benchmarking, and initialexpanded data collection procedures.procedures and SASB framework linkage, as well as identification of dedicated resources to implement our ESG initiatives in the new SVP of Corporate Responsibility and Director of ESG. |
| • | Made further improvements to the corporate budget process, employing robust productivity analytics and other statistical analysis to facilitate executive review. |
| • | With Mr. Hopke, implemented improved programs for rolling property-level operational and cash forecasting, which facilitated proactive decision making, improved cost control and operational performance. |
| • | Managed the Company’s attractive liquidity and debt profile by completing a $300million increase in the Company’s revolving credit facility to $1.0 billion, a $400 million 7-year unsecured bond issuance at 3.30% and hedging $310 million in floating rate debt with a floating-to-fixed interest rate swap that created immediate cash savings and locked in an attractive interest rate for the Company.
|
For quantitative goals 1 through 4, after applying their respective weights, a payout of 114% of target in total for those four goals was earned. Goal 5 was earned at approximately 125% for our CEO and 138% for our other NEOs (other than Ms. Voss) due to their strong organizational, operational, financial, and strategic leadership.
As a result of evaluating the achievement of the quantitative performance metrics and each executive's advancement of the strategic initiatives outlined above and their performance re-stabilizing the Company’s operations amidst the COVID-19 pandemic, the Compensation Committee approveddetermined that the following 20192021 long-term equity incentive awards.awards are as follows (other than Ms. Voss), which, in total, represents 119% - 126% of target. The Compensation Committee determined Ms. Voss’s 2021 compensation based on the Compensation Committee’s judgment of her overall performance and the performance of the group over which she has direct responsibility.
| | | | | | | | |
| | Award |
William C. Bayless, Jr. | | $ | 4,593,050 | |
Jennifer Beese | | $ | 1,833,250 | |
William W. Talbot | | $ | 1,757,700 | |
Daniel B. Perry | | $ | 1,632,150 | |
Kim K. Voss | | $ | 525,000 | |
|
| | | |
| Award |
William C. Bayless, Jr. | $ | 4,532,400 |
|
William W. Talbot | $ | 1,699,650 |
|
Jennifer Beese | $ | 1,636,700 |
|
James C. Hopke, Jr. | $ | 1,353,425 |
|
Daniel B. Perry | $ | 1,353,425 |
|
SUPPLEMENTAL COMPENSATION TABLE REFLECTING THE RETROSPECTIVE LONG-TERM INCENTIVE PLAN
The table below sets forth total direct compensation (base salary + annual cash incentive award + long-term equity incentive award) of each active Named Executive Officer for 2021, 2020 and 2019, consistent with the manner in which the Compensation Committee evaluates executive compensation and pay-for-performance alignment. This table differs from compensation reported in the 2021 Summary Compensation Table in that it reflects the value of Named Executive Officers’ long-term equity incentive awards in the performance year for which they were earned, rather than the year in which they were granted (e.g., long-term equity incentive awards granted in January 2022 for 2021 performance are shown in the table below as 2021 compensation). While compensation reported in the 2021 Summary Compensation Table is useful, the SEC’s disclosure rules do not take into account the retrospective nature of the Company’s executive compensation program and therefore create a one-year lag between the value of Named Executive Officers’ long-term equity incentive awards and the performance year for which they were earned (e.g., long-term equity incentive awards granted in January 2022 for 2021 performance will not be shown in the Summary Compensation Table until the 2023 Proxy Statement as 2022 compensation). This table supplements, and does not replace, the 2021 Summary Compensation Table.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Name | | Performance Year | | Salary | | Annual Cash Incentive Award | | Value of Long-Term Equity Incentive Award | | Total Direct Compensation(1) |
William C. Bayless, Jr. | | 2021 | | $ | 822,000 | | | $ | 1,960,000 | | | $ | 4,593,050 | | | $ | 7,375,050 | |
Chief Executive | | 2020 | | 822,000 | | | 956,250 | | | 3,400,000 | | | 5,178,250 | |
Executive Officer | | 2019 | | 800,000 | | | 1,275,000 | | | 4,532,400 | | | 6,607,400 | |
| | | | | | | | | | |
Jennifer Beese | | 2021 | | $ | 482,773 | | (2) | $ | 1,275,000 | | | $ | 1,833,250 | | | $ | 3,591,023 | |
President, | | 2020 | | 445,600 | | | 600,000 | | | 1,405,733 | | | 2,451,333 | |
Chief Operating Officer | | 2019 | | 432,600 | | | 750,000 | | | 1,636,700 | | | 2,819,300 | |
| | | | | | | | | | |
William W. Talbot | | 2021 | | $ | 466,700 | | | $ | 1,275,000 | | | $ | 1,757,700 | | | $ | 3,499,400 | |
Executive Vice President, | | 2020 | | 466,700 | | | 600,000 | | | 1,459,800 | | | 2,526,500 | |
Chief Investment Officer | | 2019 | | 453,100 | | | 800,000 | | | 1,699,650 | | | 2,952,750 | |
| | | | | | | | | | |
Daniel B. Perry | | 2021 | | $ | 445,600 | | | $ | 1,050,000 | | | $ | 1,632,150 | | | $ | 3,127,750 | |
Executive Vice President, | | 2020 | | 445,600 | | | 600,000 | | | 1,162,433 | | | 2,208,033 | |
Chief Financial Officer, | | 2019 | | 432,600 | | | 650,000 | | | 1,353,425 | | | 2,436,025 | |
Treasurer and Secretary | | | | | | | | | | |
| | | | | | | | | | |
Kim K. Voss | | 2021 | | $ | 343,700 | | | $ | 475,000 | | | $ | 525,000 | | | $ | 1,343,700 | |
Executive Vice President, | | 2020 | | 343,700 | | | 331,250 | | | 450,000 | | | 1,124,950 | |
Chief Accounting Officer, and | | 2019 | | 333,700 | | | 375,000 | | | 500,000 | | | 1,208,700 | |
Assistant Secretary | | | | | | | | | | |
(1)Total direct compensation consists of base salary, annual cash incentive awards and long-term equity incentive awards for the respective performance year. It does not include amounts shown in the “All Other Compensation” column of the 2021 Summary Compensation Table.
(2)Represents prorated total base salary received in 2021 including increase in base salary upon Ms. Beese's promotion to President and Chief Operating Officer, effective August 24, 2021.
Other Benefits and Perquisites
The Company’s executive compensation program focuses on the elements described above, with extremely limited provision of perquisites. The Named Executive Officers are generally eligible to participate in the same benefit programs offered to other employees. We believe these benefits are competitive with overall market practices.
Severance Benefits
The Named Executive Officers are entitled to receive severance benefits under existing agreements upon certain qualifying terminations of employment (subject to any required payment delay pursuant to Section 409A of the Internal Revenue Code). Generally, these severance arrangements support executive retention and continuity of management and provide replacement income if an executive is terminated involuntarily other than for cause.
None of the Company’s executive officers are entitled to severance benefits solely upon a change of control of the Company. Although a longstanding legacy arrangementsarrangement with Messrs.Mr. Bayless and Hopke provideprovides certain tax gross-ups with respect to payments made in connection with a change of control, consistent with the Company’s commitment to strong corporate governance and responsiveness to stockholders,shareholders, the Board subsequently adopted
a policy prohibiting tax gross-up arrangements, which formalized the Company’s existing practice of not entering into new tax gross-up arrangements with executive officers. This policy was filed on a Current Report on Form 8-K on April 27, 2010.
Policy with Respect to the $1 Million Deduction Limit
Section 162(m) of the Internal Revenue Code limits the deductibility on the Company’s tax return of compensation over $1 million to any of the Named Executive Officers. To the extent compensation does not qualify for deduction under section 162(m), a larger portion of stockholdershareholder distributions may be subject to federal income taxation as dividend income rather than return of capital. The Company does not believe section 162(m) will materially affect the taxability of stockholdershareholder distributions, although no assurance can be given in this regard due to the variety of factors that affect the tax position of each stockholder.shareholder. For these reasons, the Compensation Committee’s compensation policy and practices are not directly governed by section 162(m).
Employment Agreements
The Company has entered into employment agreements with certain key employees, including all of the Named Executive Officers, when the Compensation Committee determines an employment agreement is desirable for the Company to obtain a measure of assurance as to the executive’s continued employment in light of prevailing market competition for the particular position held by the executive officer, or where the Compensation Committee determines an employment agreement is necessary and appropriate to attract an executive in light of market conditions, the prior experience of the executive or practices at the Company with respect to other similarly situated employees. These employment agreements are more fully described below under “Employment Contracts” and “Potential Payments Upon Termination or Change in Control.”
Robust Stock Ownership Policy
Our executive officers and certain other executives are strongly encouraged to maintain a minimum equity stake in the Company. This policy embodies our Compensation Committee’s belief that our most senior executives should maintain a significant personal financial stake in the Company to promote a long-term perspective in managing our business. In addition, the policy helps align executive and shareholder interests, which reduces incentive for excessive short-term risk taking. Each covered executive is required to acquire and maintain ownership of shares of the Company’s common stock having a market value equal to or greater than the following amounts within three years of becoming a senior officer:
| | | | | | | | |
Chief Executive Officer | | 6 times annual base salary |
| | |
President or Executive Vice President | | 3 times annual base salary |
| | |
Senior Vice President | | 1 times annual base salary |
In 2021, each of our Named Executives complied with our stock ownership policy.
Policy Regarding Clawbacks to Recoup Compensation
If the Company is required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement, then the Compensation Committee may require the Named Executive Officers to repay to the Company “Excess Compensation,” which is defined as that part of the annual cash bonus and long termlong-term equity incentive compensation received by that officer during the two-year period preceding the publication of the restated financial statement that the Compensation Committee determines was in excess of the amount that such officer would have received had such compensation been calculated based on the financial results reported in the restated financial statements.
The Compensation Committee may take into accountconsider any factors it deems reasonable in determining whether to seek recoupment of previously paid Excess Compensation and how much Excess Compensation to recoup from individual officers (which need not be the same amount or proportion for every officer), including any conclusion by the Compensation Committee that an officer engaged in wrongdoing or committed grossly negligent acts or omissions. The amount and form of the compensation to be recouped will be determined by the Compensation Committee in its discretion, and recoupment of compensation paid as annual cash bonuses or long termlong-term incentives may be made, in the Compensation Committee’s discretion, through cancellation of vested or unvested restricted stock awards and/or cash repayment.
Deferred Compensation Plan
Effective January 1, 2015, the Compensation Committee established a deferred compensation plan for the benefit of senior officers, directors and other key employees in which the participant may elect to defer cash compensation and/or equity awards granted under share incentive plans. A participant has a fully vested right to his or her cash deferral amounts and the vested deferred equity awards.
Risk Considerations
In establishing and reviewing the executive compensation program, including engagement with the independent compensation consultant, the Compensation Committee considers whether the program encourages unnecessary or excessive risk-taking and has concluded that it does not. Executives’ base salaries are fixed in amount and thus do not encourage risk-taking. The majority of compensation provided to the executive officers is in the form of equity awards which typically vest over a period of five years and further align executives’ interests with those of stockholders.shareholders. The Compensation Committee believes that by structuring the program such that a considerable amount of the wealth of executives is tied to the Company’s long-term health, it avoids the type of disproportionately large short-term incentives which could encourage executives to take risks not in the Company’s long-term interests. We believe this combination of factors encourages executives and other employees to manage the Company in a prudent manner.
Summary Compensation Table
The table below summarizes the total compensation paid or earned by each of the Named Executive Officers for the three years ended December 31, 2021, 2020 and 2019. The Company has entered into employment agreements with each of the Named Executive Officers. Such employment agreements are described below under “Employment Contracts.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | Non-Equity | | | | | |
Name and Principal | | | | | | | | Stock | | Incentive Plan | | All Other | | |
Position | | Year | | Salary | | Bonus | | Awards (1) | | Compensation(2) | | Compensation | | Total |
| | | | | | | | | | | | | | | |
William C. Bayless, Jr. | | 2021 | | $ | 822,000 | | | $ | — | | | $ | 3,400,000 | | | $ | 1,960,000 | | | $ | 594,638 | | (3) | | $ | 6,776,638 | |
Chief Executive | | 2020 | | 822,000 | | | — | | | 4,532,400 | | | 956,250 | | | 564,792 | | (4) | | 6,875,442 |
Executive Officer | | 2019 | | 800,000 | | | — | | | 3,230,000 | | | 1,275,000 | | | 497,845 | | (5) | | 5,802,845 |
| | | | | | | | | | | | | | | |
Jennifer Beese | | 2021 | | $ | 482,773 | | (6) | $ | — | | | $ | 1,405,733 | | | $ | 1,275,000 | | | $ | 167,481 | | (3) | | $ | 3,330,987 | |
President, | | 2020 | | 445,600 | | | — | | | 1,636,700 | | | 600,000 | | | 137,637 | | (4) | | 2,819,937 | |
Chief Operating Officer | | 2019 | | 432,600 | | | — | | | 980,000 | | | 750,000 | | | 96,994 | | (5) | | 2,259,594 | |
| | | | | | | | | | | | | | | |
William W. Talbot | | 2021 | | $ | 466,700 | | | $ | — | | | $ | 1,459,800 | | | $ | 1,275,000 | | | $ | 188,980 | | (3) | | $ | 3,390,480 | |
Executive Vice President, | | 2020 | | 466,700 | | | — | | | 1,699,650 | | | 600,000 | | | 170,133 | | (4) | | 2,936,483 |
Chief Investment Officer | | 2019 | | 453,100 | | | — | | | 1,070,000 | | | 800,000 | | | 137,358 | | (5) | | 2,460,458 |
| | | | | | | | | | | | | | | |
Daniel B. Perry | | 2021 | | $ | 445,600 | | | $ | — | | | $ | 1,162,433 | | | $ | 1,050,000 | | | $ | 151,228 | | (3) | | $ | 2,809,261 | |
Executive Vice President, | | 2020 | | 445,600 | | | — | | | 1,353,425 | | | 600,000 | | | 131,994 | | (4) | | 2,531,019 |
Chief Financial Officer, | | 2019 | | 432,600 | | | — | | | 980,000 | | | 650,000 | | | 103,791 | | (5) | | 2,166,391 |
Treasurer and Secretary | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Kim K. Voss | | 2021 | | $ | 343,700 | | | $ | — | | | $ | 450,000 | | | $ | 475,000 | | | $ | 63,366 | | (3) | | $ | 1,332,066 | |
Executive Vice President, | | 2020 | | 343,700 | | | — | | | 500,000 | | | 331,250 | | | 62,006 | | (4) | | 1,236,956 |
Chief Accounting Officer, and | | 2019 | | 333,700 | | | — | | | 450,000 | | | 375,000 | | | 55,333 | | (5) | | 1,214,033 |
Assistant Secretary | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Non-Equity | | | | | |
Name and Principal | | | | | | | | | Stock | | Incentive Plan | | All Other | | |
Position | | Year | | Salary | | | Bonus | | Awards (1) |
| | Compensation(2) | | Compensation | | Total |
| | | | | | | | | | | | | | | | |
William C. Bayless, Jr. | | 2019 | | $ | 800,000 |
| | | $ | — |
| | $ | 3,230,000 |
| | $ | 1,275,000 |
| | $ | 497,845 |
| (3) | | $ | 5,802,845 |
|
Chief Executive | | 2018 | | $ | 790,500 |
| | | — |
| | 2,325,000 |
| | 1,100,000 |
| | 457,498 |
| (4) | | 4,672,998 |
|
Executive Officer | | 2017 | | 775,000 |
| | | — |
| | 3,300,000 |
| | 875,000 |
| | 435,684 |
| (5) | | 5,385,684 |
|
| | | | | | | | | | | | | | | | |
James C. Hopke, Jr. | | 2019 | | $ | 475,000 |
| | | $ | — |
| | $ | 1,260,000 |
| | $ | 650,000 |
| | $ | 140,271 |
| (3) | | $ | 2,525,271 |
|
President | | 2018 | | 463,500 |
| | | — |
| | 850,000 |
| | 550,000 |
| | 113,136 |
| (4) | | 1,976,636 |
|
| | 2017 | | 450,000 |
| | | — |
| | 1,000,000 |
| | 450,000 |
| | 92,724 |
| (5) | | 1,992,724 |
|
| | | | | | | | | | | | | | | | |
William W. Talbot | | 2019 | | $ | 453,100 |
| | | $ | — |
| | $ | 1,070,000 |
| | $ | 800,000 |
| | $ | 137,358 |
| (3) | | $ | 2,460,458 |
|
Executive Vice President, | | 2018 | | 394,000 |
| | | — |
| | 765,000 |
| | 625,000 |
| | 120,217 |
| (4) | | 1,904,217 |
|
Chief Investment Officer | | 2017 | | 382,500 |
| | | — |
| | 1,000,000 |
| | 450,000 |
| | 107,007 |
| (5) | | 1,939,507 |
|
| | | | | | | | | | | | | | | | |
Jennifer Beese | | 2019 | | $ | 432,600 |
| | | $ | — |
| | $ | 980,000 |
| | $ | 750,000 |
| | $ | 96,994 |
| (3) | | $ | 2,259,594 |
|
Executive Vice President, | | 2018 | | 360,500 |
| | | — |
| | 700,000 |
| | 600,000 |
| | 73,112 |
| (4) | | 1,733,612 |
|
Chief Operating Officer | | 2017 | | 350,000 |
| | | — |
| | 525,000 |
| | 450,000 |
| | 53,055 |
| (5) | | 1,378,055 |
|
| | | | | | | | | | | | | | | | |
Daniel B. Perry | | 2019 | | $ | 432,600 |
| | | $ | — |
| | $ | 980,000 |
| | $ | 650,000 |
| | $ | 103,791 |
| (3) | | $ | 2,166,391 |
|
Executive Vice President, | | 2018 | | 360,500 |
| | | — |
| | 700,000 |
| | 550,000 |
| | 81,160 |
| (4) | | 1,691,660 |
|
Chief Financial Officer, | | 2017 | | 350,000 |
| | | — |
| | 525,000 |
| | 450,000 |
| | 62,990 |
| (5) | | 1,387,990 |
|
Treasurer and Secretary | | | | | | | | | | | | | | | | |
| |
(1) | (1)The dollar amount recognized for the following awards of shares were valued at the aggregate grant date fair value of awards granted in accordance with ASC 718, Compensation-Stock Compensation. Assumptions used in the calculation of these amounts are included in note 11 to the Company’s audited financial statements for the year ended December 31, 2021, included in the annual report on Form 10-K for the year ended December 31, 2021.Compensation-Stock Compensation. Assumptions used in the calculation of these amounts are included in note 11 to the Company’s audited financial statements for the year ended December 31, 2019, included in the annual report on Form 10-K for the year ended December 31, 2019. |
| | | | 2017 (a) | | 2018 (b) | | 2019 (c) | | 2019 (a) | | 2020 (b) | | 2021 (c) |
William C. Bayless, Jr. | | 67,957 | | 58,995 | | 73,326 | William C. Bayless, Jr. | | 73,326 | | 96,148 | | 81,928 |
James C. Hopke, Jr. | | 20,593 | | 21,568 | | 28,604 | |
Jennifer Beese | | Jennifer Beese | | 22,247 | | 34,720 | | 33,873 |
William W. Talbot | | 20,593 | | 19,411 | | 24,291 | William W. Talbot | | 24,291 | | 36,055 | | 35,176 |
Jennifer Beese | | 10,811 | | 17,762 | | 22,247 | |
Daniel B. Perry | | 10,811 | | 17,762 | | 22,247 | Daniel B. Perry | | 22,247 | | 28,711 | | 28,010 |
Kim K. Voss | | Kim K. Voss | | 10,216 | | 10,607 | | 10,843 |
| |
(a) | Includes the portion of annual bonus paid in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2017 based on achievement of goals determined in January 2016. |
| |
(b) | Includes the portion of annual bonus paid in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2018 based on achievement of goals determined in January 2017. |
| |
(c) | Includes the portion of annual bonus paid in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2019 based on achievement of goals determined in January 2018. |
| |
(2) | Reflects the cash portion of annual bonuses per respective year as noted. |
| |
(3) | Includes the following: |
(a)Includes the portion of annual bonus granted in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2019 based on achievement of goals determined in January 2018.
(b)Includes the portion of annual bonus granted in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2020 based on achievement of goals determined in January 2019.
(c)Includes the portion of annual bonus granted in RSAs and long-term incentive compensation as determined by the Compensation Committee in January 2021 based on achievement of goals determined in January 2020.
(2)Reflects the cash portion of annual bonuses per respective year as noted.
(3)Includes the following:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions | | Other(a) | | |
William C. Bayless, Jr. | | $ | 98,700 | | $ | 484,808 | | $ | 856 | | $ | 10,274 | | |
Jennifer Beese | | — | | 167,481 | | — | | — | | |
William W. Talbot | | 7,144 | | 181,350 | | 486 | | — | | |
Daniel B. Perry | | — | | 146,971 | | 4,257 | | — | | |
Kim K. Voss | | — | | 63,008 | | 358 | | — | | |
(a)Represents the value of the executive’s personal use of the Company’s airplane for one round-trip flight related to an urgent family matter. It is not the Company’s standard practice to allow personal use of the airplane.
(4)Includes the following:
| | | | | | | | | | | | | | | | | | | | | | |
| | Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions | | |
William C. Bayless, Jr. | | $ | 98,700 | | $ | 461,217 | | $ | 4,875 | | |
Jennifer Beese | | — | | 137,637 | | — | | |
William W. Talbot | | 7,144 | | 158,211 | | 4,778 | | |
Daniel B. Perry | | — | | 127,119 | | 4,875 | | |
Kim K. Voss | | — | | 58,941 | | 3,065 | | |
(5)Includes the following:
| | | | | | | | | | | | | | | | | | | | |
| | Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions |
William C. Bayless, Jr. | | $ | 98,175 | | | $ | 394,911 | | | $ | 4,759 | |
Jennifer Beese | | — | | | 96,994 | | | — | |
William W. Talbot | | 7,106 | | | 125,502 | | | 4,750 | |
Daniel B. Perry | | — | | | 99,042 | | | 4,749 | |
Kim K. Voss | | — | | | 52,554 | | | 2,779 | |
(6)Represents prorated total base salary received in 2021, including increase in base salary upon Ms. Beese's promotion to President and Chief Operating Officer, effective August 24, 2021.
|
| | | | | | | | | | | | |
| |
Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions |
William C. Bayless, Jr. | | $ | 98,175 |
| | $ | 394,911 |
| | $ | 4,759 |
|
James C. Hopke, Jr. | | — |
| | 136,004 |
| | 4,267 |
|
William W. Talbot | | 7,106 |
| | 125,502 |
| | 4,750 |
|
Jennifer Beese | | — |
| | 96,994 |
| | — |
|
Daniel B. Perry | | — |
| | 99,042 |
| | 4,749 |
|
| |
(4) | Includes the following: |
|
| | | | | | | | | | | | |
| |
Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions |
William C. Bayless, Jr. | | $ | 95,550 |
| | $ | 357,323 |
| | $ | 4,625 |
|
James C. Hopke, Jr. | | — |
| | 108,980 |
| | 4,156 |
|
William W. Talbot | | 6,916 |
| | 108,676 |
| | 4,625 |
|
Jennifer Beese | | — |
| | 73,112 |
| | — |
|
Daniel B. Perry | | — |
| | 76,535 |
| | 4,625 |
|
| |
(5) | Includes the following: |
|
| | | | | | | | | | | | |
| |
Dividends on Common Units | | Dividends on Unvested RSAs | | 401(k) Matching Contributions |
William C. Bayless, Jr. | | $ | 91,350 |
| | $ | 339,834 |
| | $ | 4,500 |
|
James C. Hopke, Jr. | | — |
| | 88,641 |
| | 4,083 |
|
William W. Talbot | | 6,612 |
| | 95,895 |
| | 4,500 |
|
Jennifer Beese | | — |
| | 53,055 |
| | — |
|
Daniel B. Perry | | — |
| | 58,490 |
| | 4,500 |
|
Grants of Plan Based Awards
The following table sets forth certain information with respect to RSAs granted during the year ended December 31, 2019,2021, for each Named Executive Officer with respect to annual bonus and long-term incentive compensation, all of which were granted under the 2010 Incentive Award Plan or the 2018 Incentive Award Plan. No options or other securities were granted during the year ended December 31, 2019.2021.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All Other | | Grant |
| | | | | | | | | | | | | | | | Stock | | Date Fair |
| | | | | | | | | | | | | | | | Awards: | | Value of |
| | | | Estimated Future Payouts Under | | Estimated Future Payouts Under | | Number | | Stock and |
| | Grant Date | | Non-Equity Incentive Plan Awards | | Equity Incentive Plan Awards | | of | | Option |
Name | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Shares | | Awards (3) |
| | | | | | | | | | | | | | | | | | |
William C. | | 1/24/2022 | (1) | — | | | $ | 1,012,500 | | | $ | 2,025,000 | | | — | | | — | | | — | | | — | | | n/a |
Bayless, Jr. | | 1/28/2021 | (2) | — | | | — | | | — | | | — | | | — | | | — | | | 81,928 | | | $ | 3,400,000 | |
| | | | | | | | | | | | | | | | | | |
Jennifer | | 1/24/2022 | (1) | — | | | $ | 637,500 | | | $ | 1,275,000 | | | — | | | — | | | — | | | — | | | n/a |
Beese | | 1/28/2021 | (2) | — | | | — | | | — | | | — | | | — | | | — | | | 33,873 | | | $ | 1,405,733 | |
| | | | | | | | | | | | | | | | | | |
William W. | | 1/24/2022 | (1) | — | | | $ | 637,500 | | | $ | 1,275,000 | | | — | | | — | | | — | | | — | | | n/a |
Talbot | | 1/28/2021 | (2) | — | | | — | | | — | | | — | | | — | | | — | | | 35,176 | | | $ | 1,459,800 | |
| | | | | | | | | | | | | | | | | | |
Daniel B. | | 1/24/2022 | (1) | — | | | $ | 525,000 | | | $ | 1,050,000 | | | — | | | — | | | — | | | — | | | n/a |
Perry | | 1/28/2021 | (2) | — | | | — | | | — | | | — | | | — | | | — | | | 28,010 | | | $ | 1,162,433 | |
| | | | | | | | | | | | | | | | | | |
Kim K. | | 1/24/2022 | (1) | — | | | n/a | | n/a | | — | | | — | | | — | | | — | | | n/a |
Voss | | 1/28/2021 | (2) | — | | | — | | | — | | | — | | | — | | | — | | | 10,843 | | | $ | 450,000 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | All Other | | Grant |
| | | | | | | | | | | | | | | | Stock | | Date Fair |
| | | | | | | | | | | | | | | | Awards: | | Value of |
| | | | Estimated Future Payouts Under | | Estimated Future Payouts Under | | Number | | Stock and |
| | Grant Date | | Non-Equity Incentive Plan Awards | | Equity Incentive Plan Awards | | of | | Option |
Name | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | Shares | | Awards (3) |
| | | | | | | | | | | | | | | | | | |
William C. | | 1/24/20 | (1) | — |
| | $ | 700,000 |
| | $ | 1,600,000 |
| | — |
| | — |
| | — |
| | — |
| | n/a |
Bayless, Jr. | | 1/24/19 | (2) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 73,326 |
| | $ | 3,230,000 |
|
| | | | | | | | | | | | | | | | | | |
James C. | | 1/24/20 | (1) | — |
| | $ | 415,625 |
| | $ | 950,000 |
| | — |
| | — |
| | — |
| | — |
| | n/a |
Hopke, Jr. | | 1/24/19 | (2) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 28,604 |
| | $ | 1,260,000 |
|
| | | | | | | | | | | | | | | | | | |
William W. | | 1/24/20 | (1) | — |
| | $ | 396,463 |
| | $ | 906,200 |
| | — |
| | — |
| | — |
| | — |
| | n/a |
Talbot | | 1/24/19 | (2) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 24,291 |
| | $ | 1,070,000 |
|
| | | | | | | | | | | | | | | | | | |
Jennifer | | 1/24/20 | (1) | — |
| | $ | 378,525 |
| | $ | 865,200 |
| | — |
| | — |
| | — |
| | — |
| | n/a |
Beese | | 1/24/19 | (2) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 22,247 |
| | $ | 980,000 |
|
| | | | | | | | | | | | | | | | | | |
Daniel B. | | 1/24/20 | (1) | — |
| | $ | 378,525 |
| | $ | 865,200 |
| | — |
| | — |
| | — |
| | — |
| | n/a |
Perry | | 1/24/19 | (2) | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 22,247 |
| | $ | 980,000 |
|
(1)Target and Maximum amounts for the annual bonus program are determined at the beginning of the performance period at the discretion of the Compensation Committee. Final payouts are subject to the discretion of the Compensation Committee to determine the appropriate level of incentive compensation based on individual performance, Company performance and other items the Committee may deem important. | |
(1) | Information for annual bonus program for which the target award was 50% to 125% of base salary for achieving the stated objectives and the maximum award is up to 200% of base salary for significantly exceeding the stated objectives or to reward significant accomplishments, in each case subject to the discretion of the Compensation Committee to determine the appropriate level of incentive compensation based on individual performance, Company performance and other items the Committee may deem important. The Committee did not use pre-set thresholds or multiples to determine awards under the long-term incentive compensation program. |
| |
(2) | RSAs granted in January 2019 for performance in 2018. Vest in five equal annual installments beginning on February 28 of the year following the year of grant. |
| |
(3) | The base price is equal to the closing price of the Company’s common stock on the grant date. |
(2)RSAs granted in January 2021 for performance in 2020. Vest in five equal annual installments beginning on February 28 of the year following the year of grant. (3)The base price is equal to the closing price of the Company’s common stock on the grant date.
Employment Contracts
As of December 31, 2019,2021, the Company had employment agreements in effect with each Named Executive Officer (Messrs. Bayless, Hopke, Talbot and Perry and Ms. Beese)Mses. Beese and Voss) providing that during the term of the respective agreement, the executive’s base salary will not be reduced and that the executive will remain eligible for participation in the executive compensation and benefit programs. The employment agreements in effect on December 31, 20192021 with the executive officers provided for Mr. Bayless to serve as a member of the Board and as Chief Executive Officer, Mr. Hopke to serve as President, Mr. Talbot to serve as Executive Vice President and Chief Investment Officer, Ms. Beese to serve as Executive Vice President and Chief Operating Officer, and Mr. Perry to serve as Executive Vice President and Chief Financial Officer and Ms. Voss to serve as Executive Vice President and Chief Accounting Officer.
The employment agreements provide for the following:
•Annual base salaries, subject in each case to increases in accordance with the Company’s normal executive compensation practices;
•Eligibility for annual cash bonus awards determined by the Compensation Committee or in the event that a formal annual bonus plan is in place for other senior executives, the bonus will be determined in accordance with the terms of the bonus plan on the same basis as other senior executives (with appropriate adjustments due to title and salary); and
•Participation in other employee benefit plans applicable generally to executives.
Additionally, the Company has entered into non-competition agreements with Messrs. Bayless, Hopke, Talbot and Perry and Ms.Mses. Beese and Voss in which the executive agreed to comply with all obligations under the non-competition agreement and further agreed that the non-competition agreement will survive any termination of the respective employment agreement or the executive’s employment, or subsequent service relationship with the Company, if any.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information with respect to the market value as of December 31, 2019,2021, of all unvested RSAs held by each named executive officer as of December 31, 2019.2021.
| | | | | | | | | | | | | | |
| | 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 |
William C. Bayless, Jr. | | 240,031 | | $ | 13,751,376 | |
Jennifer Beese | | 84,265 | | $ | 4,827,542 | |
William W. Talbot | | 90,478 | | $ | 5,183,485 | |
Daniel B. Perry | | 73,596 | | $ | 4,216,315 | |
Kim K. Voss | | 31,261 | | $ | 1,790,943 | |
|
| | | | | | | |
| | 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 |
William C. Bayless, Jr. | | 196,708 |
| | $ | 9,251,177 |
|
James C. Hopke, Jr. | | 68,649 |
| | 3,228,562 |
|
William W. Talbot | | 62,834 |
| | 2,955,083 |
|
Jennifer Beese | | 49,094 |
| | 2,308,891 |
|
Daniel B. Perry | | 50,026 |
| | 2,352,723 |
|
| |
(1) | Vest in five equal annual installments beginning on February 28 in the year following the year of grant. |
(1)Vest in five equal annual installments beginning on February 28 in the year following the year of grant.
Awards Vested
The following table sets forth certain information with respect to RSAs vested during 2019.2021.
|
| | | | | | |
| | Stock Awards |
Name | | Number of Shares Acquired on Vesting | | Value Realized on Vesting |
| | | | |
William C. Bayless, Jr. | | 58,843 (1) | | $ | 2,651,466 |
|
James C. Hopke, Jr. | | 16,589 (2) | | 747,500 |
|
William W. Talbot | | 17,395 (3) | | 783,819 |
|
Jennifer Beese | | 11,280 (4) | | 508,277 |
|
Daniel B. Perry | | 11,941 (5) | | 538,107 |
|
| | | | | | | | | | | | | | |
(1) | Of these shares, 23,155 shares were withheld to satisfy related tax liabilities. | Stock Awards |
Name | | Number of Shares Acquired on Vesting | | Value Realized on Vesting |
| | | | |
(2)William C. Bayless, Jr. | Of these shares, 5,050 shares were withheld to satisfy related tax liabilities. |
71,383 (1) | | $ | 2,923,844 | |
(3)Jennifer Beese | Of these shares, 6,845 shares were withheld to satisfy related tax liabilities. |
19,286 (2) | | 789,944 | |
(4)William W. Talbot | Of these shares, 4,439 shares were withheld to satisfy related tax liabilities. |
23,941 (3) | | 980,638 | |
(5)Daniel B. Perry | Of these shares, 4,700 shares were withheld to satisfy related tax liabilities. | 18,325 (4) | | 750,627 | |
Kim K. Voss | | 9,014 (5) | | 369,234 | |
(1)Of these shares, 28,090 shares were withheld to satisfy related tax liabilities. (2)Of these shares, 7,590 shares were withheld to satisfy related tax liabilities.
(3)Of these shares, 9,421 shares were withheld to satisfy related tax liabilities.
(4)Of these shares, 7,212 shares were withheld to satisfy related tax liabilities.
(5)Of these shares, 3,147 shares were withheld to satisfy related tax liabilities.
Potential Payments upon Termination or Change in Control
The following summarizes the compensation payable to each named executive officerNamed Executive Officer under the applicable employment agreement in the event of a termination of such executive’s employment.
Each employment agreement provides that the respective executive may terminate the agreement at any time by delivering written notice of termination to us at least 30 days prior to the effective date of such termination, in which case the executive will be entitled to payment of base salary through the effective date of termination, plus all other benefits to which the executive has a vested right at that time.
Additionally, each employment agreement provides that the executive may terminate the agreement for “good reason,” which is defined in the employment agreement, in general, as any substantial change by the Company in the nature of the executive’s employment without their express written consent; the requirement that the executive be based at a location at least 50 miles further than from his current principal location of employment; the Company’s failure to obtain a satisfactory agreement from any successor to assume the terms of the employment agreement; and the Company’s breach of any material provision of the employment agreement.
The employment agreements provide that, if the Company terminates an executive’s employment without “cause” or the executive terminates employment for “good reason” (each as defined in the applicable employment agreement), the executive will be entitled to the following payments and benefits, subject to execution and non-revocation of a general release of claims:
•A cash payment equal to 299% for Mr. Bayless and 100% for Messrs. Hopke, Talbot and Perry and Ms.Mses. Beese and Voss, in each case times the sum of his or her then-current annual base salary plus the average annual cash bonus paid or payable in respect of the three years immediately prior to the year of termination;
•A prorated cash bonus for the year in which the termination occurs equal to the greater of (i) the annual cash bonus paid or payable in respect to the year immediately prior to the year in which the termination occurs or (ii) the target cash bonus for the year in which the termination occurs;
•Health benefits for two years following the executive’s termination of employment at the same cost to the executive as in effect immediately preceding such termination, subject to reduction to the extent that the executive receives comparable benefits from a subsequent employer;
•All of the executive’s RSAs vest; and
•Excise tax equalization payments for Messrs. Bayless and Hopke.Mr. Bayless.
The amounts set forth in the table below represent the compensation payable to each named executive officer under the respective employment agreement in the event of a termination of such executive’s employment. The amounts shown assume such termination was effective as of December 31, 2019,2021, and therefore include amounts earned through such time and are estimates of the amounts that would be paid to the executives upon their termination. The actual amounts to be paid can only be determined at the time of such executive’s termination.
|
| | | | | | |
Name | | Benefit | | Without Cause or For Good Reason |
William C. Bayless, Jr. | | Severance payment | | $ | 3,475,333 |
|
| | RSA vesting | | 9,251,177 |
|
| | Bonus | | 1,275,000 |
|
| | Health benefits | | 26,294 |
|
| | Excise tax equalization payments | | — |
|
| | | | $ | 14,027,804 |
|
| | | | |
James C. Hopke, Jr. | | Severance payment | | $ | 1,025,000 |
|
| | RSA vesting | | 3,228,562 |
|
| | Bonus | | 650,000 |
|
| | Health benefits | | 38,396 |
|
| | Excise tax equalization payments | | — |
|
| | | | $ | 4,941,958 |
|
| | | | |
William W. Talbot | | Severance payment | | $ | 1,078,100 |
|
| | RSA vesting | | 2,955,083 |
|
| | Bonus | | 800,000 |
|
| | Health benefits | | 38,396 |
|
| | Excise tax equalization payments | | — |
|
| | | | $ | 4,871,579 |
|
| | | | |
Jennifer Beese | | Severance payment | | $ | 1,032,600 |
|
| | RSA vesting | | 2,308,891 |
|
| | Bonus | | 750,000 |
|
| | Health benefits | | 24,615 |
|
| | Excise tax equalization payments | | — |
|
| | | | $ | 4,116,106 |
|
| | | | |
Daniel B. Perry | | Severance payment | | $ | 982,600 |
|
| | RSA vesting | | 2,352,723 |
|
| | Bonus | | 650,000 |
|
| | Health benefits | | 38,396 |
|
| | Excise tax equalization payments | | — |
|
| | | | $ | 4,023,719 |
|
| | | | | | | | | | | | | | | | | |
Name | | Benefit | | Without Cause or For Good Reason | |
William C. Bayless, Jr. | | Severance payment | | $ | 5,777,926 | | |
| | RSA vesting | | 13,751,376 | | |
| | Bonus | | 1,350,000 | | |
| | Health benefits | | 17,176 | | |
| | Excise tax equalization payments | | — | | |
| | | | $ | 20,896,478 | | |
| | | | | |
Jennifer Beese | | Severance payment | | $ | 1,200,000 | | |
| | RSA vesting | | 4,827,542 | | |
| | Bonus | | 850,000 | | |
| | Health benefits | | 15,893 | | |
| | Excise tax equalization payments | | — | | |
| | | | $ | 6,893,435 | | |
| | | | | |
William W. Talbot | | Severance payment | | $ | 1,141,700 | | |
| | RSA vesting | | 5,183,485 | | |
| | Bonus | | 850,000 | | |
| | Health benefits | | 24,406 | | |
| | Excise tax equalization payments | | — | | |
| | | | $ | 7,199,591 | | |
| | | | | |
Daniel B. Perry | | Severance payment | | $ | 1,045,600 | | |
| | RSA vesting | | 4,216,315 | | |
| | Bonus | | 700,000 | | |
| | Health benefits | | 24,406 | | |
| | Excise tax equalization payments | | — | | |
| | | | $ | 5,986,321 | | |
| | | | | |
Kim K. Voss | | Severance payment | | $ | 695,783 | | |
| | RSA vesting | | 1,790,943 | | |
| | Bonus | | 331,250 | | |
| | Health benefits | | 24,406 | | |
| | Excise tax equalization payments | | — | | |
| | | | $ | 2,842,382 | | |
| | | | | |
Pursuant to the employment agreements with Messrs. Bayless, Hopke, Talbot and Perry and Ms.Mses. Beese and Voss, if an executive’s employment is terminated without cause or the executive terminates employment for good reason, retirement, death or disability, all of the executive’s RSAs will vest. “Disability” is defined as any physical or mental disability or infirmity that prevents the performance of the executive’s duties for a period of (i) six consecutive months or (ii) an aggregate of 12 months in any 24 consecutive month period. Any question as to the existence, extent or potentiality of an executive’s disability upon which the Company and the executive cannot agree will be determined by a qualified, independent physician selected by us and approved by the executive (which approval will not be unreasonably withheld), with the determination of any such physician being final and conclusive. “Retirement” is defined as a termination of employment other than for cause, disability or death, following the date on which the sum of the following equals or exceeds 70 years: (i) the number of full years of the executive’s employment and other business relationships with the Company or its predecessors and (ii) the executive’s age on the date of termination; provided that (x) the executive’s employment by (or other business relationships with) the Company and any of its predecessors have continued for a period of at least 120 contiguous full months at the time of termination and, on the date of termination, the executive is at least 50 years old; (y) the executive gives at least six months’ prior written notice to the Company of his or her intention to retire; and (z) the noncompetition agreement remains in full force and effect and the executive enters into a general release of all claims in a form that is reasonably satisfactory to the Company. Under this formula, Messrs.Mr. Bayless and Hopke became eligible for retirement in 2014, and 2016, respectively, and Messrs. Talbot and Perry and Ms. Beese will become eligible for retirement in 2024.2023, Messrs. Talbot and Perry will become eligible for retirement in 2024, and Ms. Voss will become eligible for retirement in 2025.
The values of the RSAs for which vesting would accelerate for such a termination as of December 31, 2019,2021, based on a closing price of $47.03$57.29 on December 31, 2019,2021, are as follows: Mr. Bayless-$9,251,177, Mr. Hopke-13,751,376, Ms. Beese-$3,228,562,4,827,542, Mr. Talbot-$2,955,083,5,183,485, Mr. Perry-$2,352,7234,216,315 and Ms. Beese-$2,308,891.Voss -$1,790,943.
Nonqualified Deferred Compensation
Effective January 1, 2015, the Compensation Committee established a deferred compensation plan for the benefit of senior officers, directors and other key employees in which the participant may elect to defer cash compensation and/or vested equity awards granted under the Company’s share incentive plans. A participant has a fully vested right to his or her cash deferral amounts and the vested deferred share awards.
The following table provides certain information regarding contributions to, withdrawals from and earnings in the deferred compensation plan as of and for the year ended December 31, 2019:2021:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Executive Contributions in Last Fiscal Year (1) | | Aggregate Earnings in Last Fiscal Year (2) | | Aggregate Withdrawals/ Distributions | | Aggregate Balance at Last Fiscal Year-End |
William C. Bayless, Jr. | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
Jennifer Beese | | — | | | — | | | — | | | — | |
William W. Talbot | | 23,335 | | | 43,159 | | | — | | | 252,868 | |
Daniel B. Perry | | — | | | 2,797 | | | — | | | 22,944 | |
Kim K. Voss | | 43,254 | | | 60,038 | | | — | | | 229,324 | |
(1) Credited to the participant’s account is an amount equal to the amount designated as the participant’s deferral for the plan year as indicated in the participant’s deferral election. Amounts reported in this column represent compensation they elected to defer, which amounts are included in various compensation columns of the Summary Compensation Table.
(2) Aggregate earnings in 2021 represent the income and net unrealized gain or loss reported by the trustee of the deferred compensation plan. Earnings on the deferred compensation plan do not include contributions by the Company or the Named Executive Officer, were at market rates available to other investors, and are not included in the Summary Compensation Table.
|
| | | | | | | | | | | | | | | | |
| | Executive Contributions in Last Fiscal Year (1) | | Aggregate Earnings in Last Fiscal Year (2) | | Aggregate Withdrawals/ Distributions | | Aggregate Balance at Last Fiscal Year-End |
William C. Bayless, Jr. | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
|
James C. Hopke, Jr. | | 175,779 |
| | 62,113 |
| | — |
| | 502,587 |
|
William W. Talbot | | 22,655 |
| | 28,754 |
| | — |
| | 137,418 |
|
Jennifer Beese | | | | | | — |
| | — |
|
Daniel B. Perry | | | | 4,222 |
| | — |
| | 15,264 |
|
| |
(1) | Credited to the participant’s account is an amount equal to the amount designated as the participant’s deferral for the plan year as indicated in the participant’s deferral election. Amounts reported in this column represent compensation they elected to defer, which amounts are included in various compensation columns of the Summary Compensation Table. |
| |
(2) | Aggregate earnings in 2019 represent the income and net unrealized gain or loss reported by the trustee of the deferred compensation plan. Earnings on the deferred compensation plan do not include contributions by the Company or the Named Executive Officer, were at market rates available to other investors, and are not included in the Summary Compensation Table. |
Equity Compensation Plan
The following table summarizes information, as of December 31, 2019,2021, relating to the Company’s equity compensation plans pursuant to which grants of options, RSAs and other rights to acquire common stock may be granted from time to time.
|
| | | | | | | | | | | | | | | | | | | |
Plan category | | Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
| | Weighted-average exercise price of outstanding options, warrants and rights (b)
| | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
|
Equity compensation plans approved by security holders | | 1,067,1181,210,876 (1)
| | n/a | | 3,121,5362,206,059 |
Equity compensation plans not approved by security holders | | n/a | | n/a | | n/a |
(1)Consists of RSAs granted to executive officers and certain employees and common units of limited partnership interest in the Company’s operating partnership.
| |
(1) | Consists of RSAs granted to executive officers and certain employees and common units of limited partnership interest in the Company’s operating partnership. |
CEO Compensation Pay Ratio
For 2019,2021, the total compensation of the Company’s CEO as reported in the Summary Compensation Table was $5,802,845$6,776,638 and total compensation for the median employee was $26,519.$32,817. The resulting ratio of the CEO’s pay to the pay of the median employee for the year ended December 31, 20192021 was 219206 to 1. The CEO to median pay ratio is calculated in accordance with SEC requirements pursuant to Item 402(u) of Regulation S-K. The Company calculated annual total compensation for the median employee using the same methodology it uses for its named executive officers as set forth in the Summary Compensation Table. No significant changes occurred in our employee population since our originalmost recent median employee identification which took place in 2017;2021; as such, the Company has not re-identified the median employee since 2017.2021. However, because the median employee used for purposes of calculating the pay ratio for 2018 iswas no longer employed by the Company as of December 31, 2019, the Company2021, we identified a substitute median employee whose compensation and job duties are substantially similar to the prior year median employee for purposes of calculating the pay ratio for 2019. 2022.
Please keep in mind that under the SEC’s rules and guidance, there are numerous ways to determine the compensation of a company’s median employee, including the employee population sampled, the elements of pay and benefits used, any assumptions made and the use of statistical sampling. In addition, no two companies have identical employee populations or compensation programs. As such, the Company’s pay ratio may not be comparable to the pay ratio reported by other companies.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company is not a party to any transaction with executive officers or directors that is required to be disclosed under Item 404(a) of Regulation S-K.
QUESTIONS AND ANSWERS
Q: What am I voting on?
A: Election of ten directors to hold office for a one-year term, ratification of Ernst & Young LLP as the Company’s independent auditors for 2022 and approval of an advisory vote on executive compensation.
Q: Who is entitled to vote?
A: Shareholders as of the close of business on [ ], 2022 are entitled to vote at the Annual Meeting. Each share of common stock is entitled to one vote.
Q: How do I vote?
A: Sign and date each WHITE proxy card you receive and return it in the prepaid envelope. If you do not mark any selections, the proxy holders named on your proxy card will vote your shares in favor of all of the director nominees, in favor of the ratification of Ernst & Young LLP as the Company’s independent auditors for 2022 and in favor of approval, on an advisory basis, of the compensation of the named executive officers. You may change your vote or revoke your proxy at any time before the Annual Meeting by submitting written notice to the Secretary, submitting another proxy that is properly signed and later dated or voting in person at the Annual Meeting. In each case, the later submitted votes will be recorded and the earlier votes revoked.
As summarized below, there are distinctions between shares held of record and those owned beneficially:
Shareholder of Record—If your shares are registered directly in your name, you are considered the shareholder of record of those shares. As the shareholder of record, you can submit your voting instructions by Internet, telephone or mail as described on the enclosed WHITE proxy card.
Beneficial Owner—If your shares of common stock are held through a broker or bank in “street name” as of the close of business on the record date, deliver the enclosed WHITE voting instruction form in the pre-addressed postage-paid envelope provided to vote your common stock or contact the person responsible for your account to vote on your behalf and ensure that a WHITE voting instruction form is submitted on your behalf. In most instances, you will be able to do this over the Internet, by telephone or by mail as indicated on your WHITE voting instruction form. It is critical that you promptly give instructions to your brokerage firm, bank or other nominee to vote “FOR” the election of all nominees proposed by the Board of Directors on the WHITE voting instruction form, You may vote your shares in person at the meeting only if you obtain a legal proxy from your brokerage firm, bank or other nominee.
Please note that Land & Buildings Capital Growth Fund, LP, a fund managed by Land & Buildings Investment Management, LLC (“Land & Buildings”), has notified us that it intends to nominate one of Land & Buildings’ employees for election to our Board of Directors at the Annual Meeting. You may receive solicitation materials from Land & Buildings, including a proxy statement and [COLOR] proxy card. We are not responsible for the accuracy of any information provided by or relating to Land & Buildings or its nominees contained in solicitation materials filed or disseminated by or on behalf of Land & Buildings or any other statements Land & Buildings may make.
Our Board of Directors does not endorse the Land & Buildings nominee and unanimously recommends that you vote “FOR” the election of all nominees proposed by the Board of Directors on the WHITE proxy card (including via the telephone or Internet methods of voting specified on the card). Our Board of Directors strongly urges you not to return or vote any [COLOR] proxy card sent to you by Land & Buildings. Please note that voting to “withhold” with respect to the Land & Buildings nominee on a [COLOR] proxy card sent to you by Land & Buildings is not the same as voting “for” the Board of Directors’ nominees, because a vote to “withhold” with respect to the Land & Buildings nominee on its [COLOR] proxy card will revoke any WHITE proxy you may have previously submitted.
To support the Company's Board of Directors’ nominees, you should vote FOR the Board’s nominees on the WHITE proxy card and disregard, and not return, any [COLOR] proxy card sent to you by Land & Buildings. If you have previously submitted a [COLOR] proxy card sent to you by Land & Buildings, you can revoke that proxy and vote for our Board of Directors’ nominees by using the enclosed WHITE proxy card (including via the telephone or Internet methods of voting specified thereon) which will automatically revoke your prior proxy. Any later-dated [COLOR] proxy card that you send to Land & Buildings will also revoke your proxy, including WHITE proxies that you have voted FOR our Board of Directors’ nominees, and we strongly urge you not to sign or return any [COLOR] proxy cards sent to you by Land & Buildings. Only the latest dated validly executed proxy that you submit will be counted.
If you require assistance in changing, revoking or voting your proxy, please contact the company’s proxy solicitor:
1407 Broadway, 27th Floor
New York, New York 10018
(212) 929-5500 (Call Collect)
or
Call Toll-Free (800) 322-2885
Email: proxy@mackenziepartners.com
Under New York Stock Exchange rules, the proposal to ratify the appointment of independent registered public accountants is considered a “discretionary” item. This means that brokerage firms may vote in their discretion on this matter on behalf of clients who have not furnished voting instructions at least ten days before the date of the meeting.
In their discretion, the proxy holders are authorized to vote on any other matters that may properly come before the Annual Meeting and at any postponement or adjournment thereof. The Board knows of no other items of business that will be presented for consideration at the Annual Meeting other than the proposals described in this Proxy Statement.
Q: Is my vote confidential?
A: Yes. Proxy cards, ballots and voting tabulations that identify individual shareholders are confidential. Only the inspectors of election and certain employees associated with processing proxy cards and counting the vote have access to your card. Additionally, all comments directed to management (whether written on the proxy card or elsewhere) will remain confidential, unless you ask that your name be disclosed.
Q: Who will count the vote and how are votes counted?
A: All votes will be tabulated by a representative of [ ], as the independent inspector of election appointed for the Annual Meeting, who will separately tabulate affirmative and negative votes and withheld votes and abstentions. In order to be elected as a director, because of the contested nature of the election of directors, under our Bylaws, a nominee must receive a plurality of the votes cast at the Annual Meeting at which a quorum is present, which means the 10 nominees who receive the largest number of properly cast votes will be elected as directors. For election of directors, abstentions and broker non-votes will not affect the vote outcome. In order for Ernst & Young LLP to be ratified as the Company’s independent auditors for 2022 and for the advisory vote on executive compensation to be approved, the respective proposal must receive a majority of the votes cast at the Annual Meeting at which a quorum is present. For ratification of the independent auditors for 2022, an abstention will have the same effect as an “Against” vote. Because of the contested nature of the election of directors, under NYSE rules, if you are the beneficial owner of shares rather than the shareholder of record and receive proxy materials from Land & Buildings, your broker will not have the authority to exercise discretion to vote such shares with respect to proposal 2 unless they receive your instructions. If you do not receive proxy materials from
Land & Buildings, your broker or nominee will have the authority to exercise discretion to vote such shares with respect to Proposal 2 because the matter is treated as routine under the NYSE rules. For approval of the advisory vote on executive compensation, an abstention will have the same effect as an “Against” vote, but a broker non-vote will not affect the vote outcome. “Broker non-votes” are proxies from brokers or other nominees indicating that such person has not received instructions from the beneficial owner or other person entitled to vote the shares that are the subject of the proxy on a particular matter with respect to which the broker or other nominee does not have discretionary voting power.
Q: What constitutes a quorum?
A: As of the record date for the Annual Meeting, [ ] shares of common stock were issued and outstanding, as well as [ ] unvested restricted stock awards entitled to be voted by employees. A majority of the outstanding shares, present or represented by proxy, constitutes a quorum for the transaction of business at the Annual Meeting. Abstentions and broker non-votes will be counted in determining the presence of a quorum.
Q: Who can attend the Annual Meeting?
A: All shareholders of record as of [ ], 2022 can attend.
Q: Who pays for this proxy solicitation?
A: The Company will bear the entire cost of solicitation of proxies, including preparation, assembly and mailing of this Proxy Statement, the proxy card and any additional information furnished to shareholders. Copies of solicitation materials will be furnished to banks, brokerage houses, fiduciaries and custodians holding shares of the Company’s common stock in their names that are beneficially owned by others to forward to these beneficial owners. Persons representing beneficial owners may be reimbursed for their costs of forwarding the solicitation material to such beneficial owners. Original solicitation of proxies by mail may be supplemented by telephone, facsimile, electronic mail or personal solicitation by the Company’s directors, officers or employees. The Company will not pay any additional compensation to directors, officers or employees for such services. The Company has retained MacKenzie Partners, Inc.to solicit proxies. Under our agreement MacKenzie Partners, Inc., will receive a fee of approximately $[ ] plus reasonable out-of-pocket expenses. MacKenzie Partners, Inc. expects that approximately 25 of its employees will assist in the solicitation of proxies. In addition, MacKenzie Partners, Inc. and certain related persons will be indemnified against certain liabilities arising out of or in connection with the engagement.
We estimate that our additional out-of-pocket expenses beyond those normally associated with soliciting proxies for an annual meeting of shareholders and incurred in connection with preparing for a potential contested solicitation of proxies will be $[ ] in the aggregate, of which approximately $[ ] has been spent to date. Such additional solicitation costs are expected to include the fees incurred to retain MacKenzie Partners, Inc. as the Company’s proxy solicitor, as discussed above, fees of outside legal and public relations advisors, investment bankers and other consultants to advise the company in connection with a possible contested solicitation of proxies, increased mailing costs, such as the costs of additional mailings of solicitation materials to shareholders, including printing costs, mailing costs and the reimbursement of reasonable expenses of banks, brokerage houses and other agents incurred in forwarding solicitation materials to beneficial owners, as described above, and the costs of retaining an independent inspector of election.
Additional information about persons who are participants in this proxy solicitation is set forth in Appendix A.
PROPOSAL 1 –
ELECTION OF DIRECTORS
|
| |
The Board recommends you vote FOR each of the nominees listed. |
ELECTION OF DIRECTORS
There are currently nine10 directors on the Board, William C. Bayless, Jr., Herman E. Bulls, G. Steven Dawson, Cydney C. Donnell, Mary C. Egan, Edward Lowenthal,Alison M. Hill, Craig A. Leupold, Oliver Luck, C. Patrick Oles, Jr., and John T. Rippel, and Carla Piñeyro Sublett, each of whom has been nominated for re-election to the Board. The employment agreement with Mr. Bayless provides that he will be nominated as a director. See “Executive Compensation – Employment Contracts” for additional information. The Board of Directors elected at the Annual Meeting will hold office for a one-year term.
All nominees have consented to serve as directors. The Board has no reason to believe that any of the nominees will be unable to act as director. However, if a director is unable to stand for re-election, the Board may either reduce the size of the Board or the Nominating and Corporate Governance Committee may designate a substitute. If a substitute nominee is named, the proxies will vote for the election of the substitute.
Directors
Because of the contested nature of this election of directors, under our Bylaws, directors are elected by a majorityplurality of the votes cast at the Annual Meeting.Meeting, which means the 10 nominees who receive the largest number of properly cast votes will be elected as directors. Each share of common stock is entitled to one vote for each of the nineten director nominees. Cumulative voting is not permitted.
Consideration of Director Nominees
The Nominating and Corporate Governance Committee will consider appropriate nominees for director whose names are submitted in writing by a holder of the Company’s common stock. Nominations must be addressed to ChairmanChair of the Nominating and Corporate Governance Committee, c/o American Campus Communities, Inc., 12700 Hill Country Blvd., Suite T-200, Austin, Texas 78738, indicating the nominee’s qualification and other relevant biographical information and providing confirmation of the nominee’s consent to serve as director. In order to be considered for the next annual election of directors, any such written request must comply with the requirements set forth in the Company’s bylaws.
The ChairmanChair of the Board, or the Chief Executive Officer or the Board of Directors may call a special meeting of the stockholders.shareholders. A special meeting of stockholdersshareholders will be called upon the written request of the stockholdersshareholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting, provided that such written request complies with the requirements set forth in the Company’s bylaws.
The committee considers nominees for the Board from any reasonable source, including current Board members, stockholdersshareholders or other persons.
Each of the current directors has been nominated for election as director at the 20202022 Annual Meeting.
PROPOSAL 2 –
RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITORS
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The Audit Committee, which has the sole authority to retain the Company's independent auditors, recommends that you vote FOR the ratification of the appointment of Ernst & Young LLP as the Company's independent auditors for 2020.2022. |
Ratification of the Selection of the Independent Auditors
The Audit Committee has reappointed Ernst & Young LLP as the Company’s independent auditors for 2020.2022. The Board recommends that shareholders ratify the Company’s selection of Ernst & Young as our independent auditor. Representatives of Ernst & Young will be at the Annual Meeting, will have an opportunity to make a statement if they so desire, and will be available to respond to appropriate questions.
The proposal will be approved if it receives the affirmative vote of a majority of shares represented in person or by proxy at the Annual Meeting.
AUDIT COMMITTEE INFORMATION
Report of the Audit Committee
The Audit Committee, on behalf of the Board of Directors, serves as an independent and objective party to monitor the Company’s financial reporting process and internal control system, and is directly responsible for the appointment, compensation and oversight of our independent registered public accounting firm. The Audit Committee also evaluates, on an annual basis, whether it is in the best interests of shareholders to reengage Ernst & Young as the Company’s independent auditors, and is involved in the selection of the engagement partner in accordance with the mandated Public Company Accounting Oversight Board (“PCAOB”) partner rotation rules. The Audit Committee performs these oversight responsibilities in accordance with its Audit Committee Charter, which is available on the investor relations section of the Company’s website at www.AmericanCampus.com.
Management has the responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed with management the audited financial statements in the Company’s Annual Report, and discussed with management the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. The Audit Committee also reviewed and discussed the Company’s earnings releases with management.
During 2019,2021, the Audit Committee met with management and the Company’s independent auditors and internal auditor periodically to consider the adequacy of the Company’s internal controls and the objectivity of the Company’s financial reporting in response to the requirements set forth in Section 404 of the Sarbanes-Oxley Act and related regulations. The Audit Committee also discussed with management and the Company’s independent auditors and internal auditor the process used for certifications by the Company’s Chief Executive Officer and Chief Financial Officer that are required for certain of the Company’s filings with the Securities and Exchange Commission.
Ernst & Young LLP, the Company’s independent auditors, is responsible for auditing the Company’s financial statements and for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting
principles. The Audit Committee
reviewed and discussed with the independent auditors their judgments as to the quality, not just the acceptability, of the Company’s accounting principles and such other matters as are required to be discussed with the Audit Committee under Statement on Auditing Standards No. 61, as amended, as adopted by the PCAOB in Rule 3200T. Additionally, the Audit Committee discussed with the independent auditors the inclusion of Critical Audit Matters in the opinion accompanying the audited financial statements. The Audit Committee also received the written disclosures and the letter from the independent auditors required by the applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence. The Audit Committee has discussed with the independent auditors the auditors’ independence from management and us and considered the compatibility of non-audit services with the auditors’ independence.
The Audit Committee discussed with the independent auditors the overall scope and plans for their audit. The Audit Committee meets at least quarterly with the independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. The Audit Committee also meets with management and the independent auditors prior to the filing of the quarterly reports on Form 10-Q with the SEC and release to the public of its quarterly and year-end financial results to, among other things, review and discuss such filings, review any related financial statements and related variances, review significant accounting policies and discuss any significant accounting treatments applied during the period.
In evaluating the appropriateness of engaging Ernst & Young as the Company’s independent auditors, the Audit Committee considers a number of factors including, but not limited to: (i) Ernst & Young’s relevant technical expertise and its significant institutional knowledge of the Company’s operations and industry; (ii) the quality and candor of Ernst & Young’s communications with the Audit Committee and management; (iii) Ernst & Young’s independence, including the consideration of any non-audit services provided by Ernst & Young and their impact on independence; (iv) the quality and efficiency of the services provided by Ernst & Young, including input from management on Ernst & Young’s performance, objectivity and professional skepticism; (v) external data on audit quality and performance, including recent PCAOB reports on Ernst & Young and its peer firms; (vi) the appropriateness of Ernst & Young’s fees; and (vii) Ernst & Young’s tenure as independent auditors, including the benefits of a longer tenure, and the controls and processes in place that help ensure Ernst & Young’s continued independence. Ernst & Young has served as the Company’s independent auditors since 2004. Based on this evaluation, the Audit Committee and the Board believe that retaining Ernst & Young to serve as independent auditors for 20202022 is in the best interests of the Company and its shareholders.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors (and the Board has approved) that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 20192021 for filing with the SEC.
This section of the proxy statement is not deemed “filed” with the SEC and is not incorporated by reference into the Company’s Annual Report on Form 10-K.
This Audit Committee report is given by the following members of the Audit Committee as of December 31, 2019:2021:
G. Steven Dawson, ChairmanChair
C. Patrick Oles, Jr.
John T. Rippel
Independent Auditor Fees
The following summarizes the approximate aggregate fees billed to American Campus Communities for the fiscal years ended December 31, 20192021 and 20182020 by the Company’s principal accounting firm, Ernst & Young LLP:
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| | Total Approximate Fees |
Types of Services (1) | | 2021 | | 2020 |
| | | | |
Audit Fees (2) | | $ | 2,340,000 | | | $ | 2,060,000 | |
Audit-Related Fees | | — | | | — | |
Tax Fees | | — | | | — | |
All Other Fees (3) | | 7,200 | | 7,200 |
Total | | $ | 2,347,200 | | | $ | 2,067,200 | |
61(1)All such services were pre-approved by the Audit Committee.
(2)Fees for audit services billed in 2021 and 2020 included the following: (i) audit of the Company’s annual financial statements; (ii) reviews of quarterly financial statements; (iii) audit of internal control over financial reporting; and (iv) services related to SEC matters, including issuances of comfort letters, consents and other services.
(3)All other fees include the aggregate fees for products and services provided by Ernst & Young LLP that are not reported under “Audit Fees,” “Audit-Related Fees” or “Tax Fees.”
|
| | | | | | | | |
| | Total Approximate Fees |
Types of Services (1) | | 2019 | | 2018 |
| | | | |
Audit Fees (2) | | $ | 1,640,000 |
| | $ | 1,572,500 |
|
Audit-Related Fees | | — |
| | — |
|
Tax Fees | | — |
| | — |
|
All Other Fees (3) | | 3,620 |
| | 2,160 |
|
Total | | $ | 1,643,620 |
| | $ | 1,574,660 |
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(1) | All such services were pre-approved by the Audit Committee. |
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(2) | Fees for audit services billed in 2019 and 2018 included the following: (i) audit of the Company’s annual financial statements; (ii) reviews of quarterly financial statements; (iii) audit of internal control over financial reporting; and (iv) services related to SEC matters, including review of registration statements filed and related issuances of comfort letters, consents and other services. |
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(3) | All other fees include the aggregate fees for products and services provided by Ernst & Young LLP that are not reported under “Audit Fees,” “Audit-Related Fees” or “Tax Fees.” |
The Audit Committee has developed policies and procedures concerning its pre-approval of audit and non-audit services provided to us by the independent auditors. These provide that the Audit Committee must pre-approve all audit and permitted non-audit services (including the fees and terms thereof) to be rendered to the Company by the independent auditors. The independent auditors provide the Audit Committee with a list describing the services expected to be performed by the independent auditor. Any request for services not contemplated by this list must be submitted to the Audit Committee for specific pre-approval and the provision of such services cannot commence until such approval has been granted. Normally, pre-approval is provided at regularly scheduled meetings. However, the Audit Committee has authorized the committee’s ChairmanChair to approve the provision by the Company’s independent auditors of up to $50,000 per occurrence of non-audit services not prohibited by law. Each decision made by the Audit Committee ChairmanChair will be reported to the full Audit Committee at its next meeting.
In addition, although not required by the rules and regulations of the SEC, the Audit Committee generally requests a range of fees associated with each proposed service. The Audit Committee believes that providing a range of fees for a service incorporates appropriate oversight and control of the independent auditor relationship, while permitting us to receive immediate assistance from the independent auditor when time is of the essence.
In considering the nature of the services provided by Ernst & Young LLP, the Audit Committee determined that such services are compatible with the provision of independent audit services. The Audit Committee discussed these services with representatives of Ernst & Young LLP and management to determine that they are permitted under the rules and regulations concerning auditor independence promulgated by the SEC to implement the Sarbanes-Oxley Act of 2002, as well as by the American Institute of Certified Public Accountants.
PROPOSAL 3 –
ADVISORY VOTE ON EXECUTIVE COMPENSATION
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The Board recommends that you vote FOR approval of the advisory vote on executive compensation. |
ADVISORY VOTE ON EXECUTIVE COMPENSATION
The Dodd-Frank Act enables the Company’s stockholdersshareholders to vote to approve, on an advisory (nonbinding) basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules.
As described in detail under the heading “Executive Compensation – Compensation Discussion and Analysis,” these executive compensation programs are designed to attract, motivate and retain executives who have the motivation, experience and skills necessary to lead the Company effectively. Under these programs, named executive officers are rewarded for the achievement of specific performance measures that are directly related to financial performance goals and creation of stockholdershareholder value. Please read the “Compensation Discussion and Analysis” for additional details about the Company’s executive compensation programs, including information about the 20192021 compensation of the named executive officers.
Stockholders
Shareholders approved the Company’s executive compensation at the 20192021 Annual Meeting of Stockholders.Shareholders. The Compensation Committee continually reviews the compensation programs for the named executive officers to ensure they achieve the desired goals of aligning executive compensation structure with stockholders’shareholders’ interests and current market practices. As a result of its review process, the Compensation Committee:
•Provides a significant portion of each executive’s compensation as variable compensation in a pay-for-performance setting through a combination of cash bonuses and equity-based grants;
•Provides a significant portion of total compensation as non-cash compensation in the form of long-term equity-based awards to more closely align the interests of executives with those of stockholdersshareholders and to maximize retention insofar as all equity-based awards are subject to time-based vesting; and
•Uses long-term compensation, payment of annual bonuses in part in shares, clawbacks, and a variety of performance metrics to closely tie executives’ wealth to the Company’s long-term health.
The Company is asking stockholdersshareholders to indicate their support for named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives stockholdersshareholders the opportunity to express their views on named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, the Board will ask stockholdersshareholders to vote “FOR” the following resolution at the annual meeting:
“RESOLVED, that the Company’s stockholdersshareholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 20202022 Annual Meeting of StockholdersShareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 20192021 Summary Compensation Table and the other related tables and disclosure.”
The say-on-pay vote is advisory, and therefore not binding on the Company, the Compensation Committee or the Board. The Board and the Compensation Committee value the opinions of stockholdersshareholders and to the extent there is any
significant vote against the named executive officer compensation as disclosed in this proxy statement, the Company will consider stockholders'shareholders' concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The proposal will be approved if it receives the affirmative vote of a majority of shares represented in person or by proxy at the meeting.
SHAREHOLDER PROPOSALS
STOCKHOLDER PROPOSALS
Any stockholdershareholder proposal intended for inclusion in the proxy materials for the Annual Meeting to be held in 20212023 must be received no later than December 31, 2020.2022. A stockholdershareholder may also nominate directors before the next Annual Meeting by submitting the nomination as described under “Board of Directors – Consideration of Director Nominees.” No formal proposals were received during 20192021 from stockholders.shareholders that were not subsequently withdrawn.
2019
2021 ANNUAL REPORT
The Company’s Annual Report to StockholdersShareholders is being mailed to stockholdersshareholders along with this Proxy Statement. The Annual Report and the Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2021, as filed with the Securities and Exchange Commission, are on the Company’s website at www.AmericanCampus.com and available without charge to stockholdersshareholders upon writing to the Company’s corporate secretary. Neither the Annual Report to StockholdersShareholders nor the Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2021, is to be treated as part of the proxy solicitation materials or as having been incorporated herein by reference.
By Order of the Board of Directors,
/s/ Daniel B. Perry
DANIEL B. PERRY
Executive Vice President, Chief Financial Officer,
Treasurer and Secretary
Austin, Texas
[ ], 2022
March 12, 2020
APPENDIX A
SUPPLEMENTAL INFORMATION REGARDING PARTICIPANTS
The following tables (“Directors and Nominees” and “Executive Officers and Employees”) list the name and business address of the directors of the Company, nominees for director, and the name, present principal occupation and business address of the Company’s executive officers and employees who, under SEC rules, are considered to be participants in the Company’s solicitation of proxies from its shareholders in connection with the Annual Meeting (collectively, the “Participants”).
Directors and Nominees
The principal occupations of the Company’s current directors, all of whom are nominees for director at the Annual Meeting, are included in the biographies under the section titled “Governance of the Company.” The name of each of the Company’s directors and nominees for director is listed below, and the business address for all the of the Company’s directors and nominees for director is c/o American Campus Communities, Inc., 12700 Hill Country Blvd., Suite T-200, Austin, Texas 78738.
Name
William C. Bayless, Jr.
Herman E. Bulls
G. Steven Dawson
Cydney C. Donnell
Mary C. Egan
Alison M. Hill
Craig A. Leupold
Oliver Luck
C. Patrick Oles, Jr.
John T. Rippel
EXECUTIVE OFFICERS AND EMPLOYEES
The executive officers and other employees who are considered Participants as well as their positions with the Company, which constitute their respective principal occupations, are listed below. The business address for each person is c/o American Campus Communities, Inc., 12700 Hill Country Blvd., Suite T-200, Austin, Texas 78738.
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William C. Bayless, Jr. | Chief Executive Officer |
Jennifer Beese | President and Chief Operating Officer |
Jorge de Cárdenas | Executive Vice President and Chief Technology Officer |
Lonnie M. Ledbetter | Executive Vice President, Chief Purpose and Inclusion Officer |
Daniel B. Perry | Executive Vice President, Chief Financial Officer, Secretary and Treasurer |
William W. Talbot | Executive Vice President and Chief Investment Officer |
Kim K. Voss | Executive Vice President, Chief Accounting Officer and Assistant Secretary |
James E. Wilhelm III | Executive Vice President, Public-Private Transactions |
Brian Winger | Executive Vice President and General Counsel |
Information Regarding Ownership of Company Securities by Participants
The number of the Company’s shares of common stock beneficially held as of March 1, 2022 by its directors and executive officers who are Participants appears in the “Security Ownership” section of this proxy statement. Except as described in this Appendix A or otherwise in this
proxy statement, none of the persons listed above in “Directors and Nominees” and “Executive Officers and Employees” owns any debt or equity security issued by us of record that he or she does not also own beneficially.
Transactions in the Company’s Securities by Participants—Last Two Years
The following table sets forth information regarding purchases and sales of the company’s securities by each Participant between March 1, 2020 and March 1, 2022. All transactions were in the public market or pursuant to the company’s equity compensation plans, and no part of the purchase price or market value of those shares is represented by funds borrowed or otherwise obtained for the purpose of acquiring or holding such securities.
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Name | Transaction Date | Number of Shares | Transaction Description |
William C. Bayless, Jr. | 4/29/20 | 4,260 | | Charitable donation |
William C. Bayless, Jr. | 8/4/20 | 2,290 | Charitable donations |
William C. Bayless, Jr. | 9/22/20 | 120,000 | Open market sale |
William C. Bayless, Jr. | 11/6/20 | 1,800 | Charitable donation |
William C. Bayless, Jr. | 1/28/21 | 81,927.71 | Grant of restricted stock |
William C. Bayless, Jr. | 2/28/21 | 28,090.90 | Tax withholding |
William C. Bayless, Jr. | 3/15/21 | 2,010 | Charitable donations |
William C. Bayless, Jr. | 5/10/21 | 5,620 | Charitable donations |
William C. Bayless, Jr. | 11/8/21 | 1,667 | Charitable donation |
William C. Bayless, Jr. | 12/8/21 | 945 | Charitable donation |
William C. Bayless, Jr. | 1/24/22 | 88,874,81 | Grant of restricted stock |
William C. Bayless, Jr. | 2/28/22 | 29,776.70 | | Tax withholding |
Jennifer Beese | 1/28/21 | 33,873.08 | Grant of restricted stock |
Jennifer Beese | 2/28/21 | 7,598.75 | Tax withholding |
Jennifer Beese | 6/2/21 | 10,000 | Open market sale |
Jennifer Beese | 12/20/21 | 1,264 | Charitable donation |
Jennifer Beese | 1/24/22 | 36,440.60 | Grant of restricted stock |
Jennifer Beese | 2/28/22 | 9,398.77 | | Tax withholding |
Herman E. Bulls | 1/27/21 | 3,018 | Grant of restricted stock units and settlement entirely in stock |
Herman E. Bulls | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
G. Steven Dawson | 6/1/20 | 3,593 | Grant of restricted stock units and settlement entirely in stock |
G. Steven Dawson | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
Jorge de Cárdenas | 1/28/21 | 10,240.96 | Grant of restricted stock |
Jorge de Cárdenas | 2/28/21 | 1,301.52 | Tax withholding |
Jorge de Cárdenas | 8/3/21 | 8,555 | Open market sale |
Jorge de Cárdenas | 1/24/22 | 10,158.67 | Grant of restricted stock |
Jorge de Cárdenas | 2/28/22 | 2,210.96 | | Tax withholding |
Cydney C. Donnell | 6/1/20 | 3,593 | Grant of restricted stock units and settlement entirely in stock |
Cydney C. Donnell | 4/28/21 | 3,780 | Grant of restricted stock units and settlement entirely in stock |
Mary C. Egan | 6/1/20 | 3,593 | Grant of restricted stock units and settlement entirely in stock |
Mary C. Egan | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
Alison M. Hill | 1/27/21 | 3,018 | Grant of restricted stock units and settlement entirely in stock |
Alison M. Hill | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
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Lonnie M. Ledbetter | 1/28/21 | 3,855.42 | | Grant of restricted stock |
Lonnie M. Ledbetter | 2/28/21 | 563.81 | Tax withholding |
Lonnie M. Ledbetter | 1/24/22 | 7,739.94 | Grant of restricted stock |
Lonnie M. Ledbetter | 2/28/22 | 1,122.94 | | Tax withholding |
Craig A. Leupold | 1/27/21 | 3,018 | Grant of restricted stock units and settlement entirely in stock |
Craig A. Leupold | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
Oliver Luck | 6/1/20 | 3,593 | Grant of restricted stock units and settlement entirely in stock |
Oliver Luck | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
Daniel B. Perry | 1/28/21 | 28,010.43 | Grant of restricted stock |
Daniel B. Perry | 2/28/21 | 7,211.86 | Tax withholding |
Daniel B. Perry | 1/24/22 | 31,581.85 | Grant of restricted stock |
Daniel B. Perry | 2/28/22 | 8,464.40 | | Tax withholding |
C. Patrick Oles, Jr. | 6/1/20 | 1,100 | Grant of 3,593 restricted stock units and partial settlement in stock |
C. Patrick Oles, Jr. | 4/28/21 | 1,612 | Grant of 2,724 restricted stock units and partial settlement in stock |
John T. Rippel | 3/9/20 | 10,000 | Open market purchase |
John T. Rippel | 5/22/20 | 30.69 | Dividend reinvestment |
John T. Rippel | 6/1/20 | 3,593 | Grant of restricted stock units and settlement entirely in stock |
John T. Rippel | 8/21/20 | 32.46 | Dividend reinvestment |
John T. Rippel | 9/1/20 | 33.98 | Dividend reinvestment |
John T. Rippel | 11/27/20 | 41.49 | Dividend reinvestment |
John T. Rippel | 1/27/21 | 200 | Open market purchase |
John T. Rippel | 4/28/21 | 2,724 | Grant of restricted stock units and settlement entirely in stock |
John T. Rippel | 1/21/22 | 10,000 | Open market purchase |
William W. Talbot | 11/09/2020 | 121 | Charitable donation |
William W. Talbot | 01/28/2021 | 35,175.90 | | Grant of restricted stock |
William W. Talbot | 02/28/2021 | 9,241.35 | | Tax withholding |
William W. Talbot | 03/24/2021 | 233 | Charitable donation |
William W. Talbot | 05/11/2021 | 22 | Charitable donation |
William W. Talbot | 07/29/2021 | 24 | Charitable donation |
William W. Talbot | 01/21/2022 | 98 | Charitable donation |
William W. Talbot | 01/24/2022 | 34,011.22 | | Grant of restricted stock |
William W. Talbot | 02/28/2022 | 1,016 | | Transfer to a charitable foundation in the reporting person's name who disclaims beneficial ownership of the shares, except to the extent of any indirect pecuniary interest therein. |
William W. Talbot | 02/28/2022 | 10,666.25 | | Tax withholding |
Kim K. Voss | 06/09/2020 | 235 | | Charitable donation |
Kim K. Voss | 12/31/2020 | 121 | Charitable donation |
Kim K. Voss | 1/28/21 | 10,843.37 | Grant of restricted stock |
Kim K. Voss | 2/28/21 | 3,147.49 | Tax withholding |
Kim K. Voss | 5/24/21 | 152 | Charitable donation |
Kim K. Voss | 5/25/21 | 203 | Charitable donation |
Kim K. Voss | 11/9/21 | 28 | Charitable donation |
Kim K. Voss | 11/26/21 | 28 | Charitable donation |
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Kim K. Voss | 12/15/21 | 66 | Charitable donation |
Kim K. Voss | 1/24/22 | 10,158.67 | Grant of restricted stock |
Kim K. Voss | 2/28/22 | 3,477.41 | | Tax withholding |
James E. Wilhelm III | 1/28/21 | 8,192.77 | | Grant of restricted stock |
James E. Wilhelm III | 2/28/21 | 1,823.16 | Tax withholding |
James E. Wilhelm III | 7/20/21 | 4,742 | Open market sale under 10b-5 trading plan |
James E. Wilhelm III | 10/26/21 | 12,123 | Open market sale under 10b-5 trading plan |
James E. Wilhelm III | 10/27/21 | 191 | Open market sale under 10b-5 trading plan |
James E. Wilhelm III | 11/3/21 | 5,396 | Open market sale under 10b-5 trading plan |
James E. Wilhelm III | 1/24/22 | 7,739 | Grant of restricted stock |
James E. Wilhelm III | 2/28/22 | 1,809.03 | | Tax withholding |
Brian Winger | 1/28/21 | 9,638.55 | Grant of restricted stock |
Brian Winger | 2/28/21 | 841.28 | Tax withholding |
Brian Winger | 1/24/22 | 8,707.43 | Grant of restricted stock |
Brian Winger | 2/28/22 | 1,134.12 | | Tax withholding |
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| Shareowner Services P.O. Box 64945 St. Paul, MN 55164-0945
| PRELIMINARY, SUBJECT TO COMPLETION |
WHITE PROXY CARD (repeat on opposite side)
Please detach here
The Board of Directors Recommends a Vote FOR Items 1, 2 and 3.
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1. | Election of Directors for a one-year term expiring at the 20212023 Annual Meeting of StockholdersShareholders |
| 1a. | William C. Bayless, Jr. | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1b. | Herman E. Bulls | ☐ | For | ☐ | Withhold |
| 1c. | G. Steven Dawson | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1c.1d. | Cydney C. Donnell | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1d.1e. | Mary C. Egan | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1e.1f. | Edward LowenthalAlison M. Hill | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1f.1g. | Craig A. Leupold | ☐ | For | ☐ | Withhold |
| 1h. | Oliver Luck | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1g.1i. | C. Patrick Oles, Jr. | ¨☐ | For | ¨☐ | Against | ¨ | AbstainWithhold |
| 1h.1j. | John T. Rippel | ¨☐ | For | ¨☐ | Against | ¨ | Abstain |
| 1i. | Carla Piñeyro Sublett | ¨ | For | ¨ | Against | ¨ | AbstainWithhold |
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2. | Ratification of Ernst & Young as our independent auditors for 20202022 | | | ¨☐ | For | ¨☐ | Against | ¨☐ | Abstain |
3. | To provide a non-binding advisory vote approving the Company’s executive compensation program | | | ¨☐ | For | ¨☐ | Against | ¨☐ | Abstain |
THIS WHITE PROXY CARD WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED AS THE BOARD RECOMMENDS.
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Address Change or Comments? Mark box, sign, and indicate changes below: ¨☐ | | Date | | |
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| | | Signature(s) in Box Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy. | |
AMERICAN CAMPUS COMMUNITIES, INC.
ANNUAL MEETING OF STOCKHOLDERSSHAREHOLDERS
Wednesday, April 29, 2020[ ], [ ], 2022
8:00 a.m. EasternCentral Time
Disney's Coronado Springs Resort - Lantana Room12700 Hill Country Boulevard, Suite T-200
1000 W Buena Vista DriveAustin, Texas 78738
Orlando, FL 32830
Important notice regarding the Internet availability of
proxy materials for the Annual Meeting of StockholdersShareholders
The Proxy Statement and the 20192021 Annual Report to StockholdersShareholders are available in the Investor Relations section
of our website at www.AmericanCampus.com under “SEC Filings”Filings.”
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| American Campus Communities, Inc. 12700 Hill Country Boulevard, Suite T-200 Austin, TX 78738 | proxy |
This WHITE proxy CARD is solicited by the Board of Directors for use at the Annual Meeting on April 29, 2020.[ ], 2022.
If no choice is specified, the proxy will be voted as the Board recommends on Items 1, 2 and 3.
The undersigned hereby appoints William C. Bayless, Jr. and Daniel B. Perry, or any of them, proxies of the undersigned, with full powers of substitution, to represent the undersigned and to vote all shares of Common Stock of American Campus Communities, Inc. held of record by the undersigned as of the close of business on March 9, 2020,[ ], 2022, on behalf of the undersigned at the Annual Meeting of StockholdersShareholders to be held on April 29, 2020,[ ], 2022, at 8:00 a.m., Eastern Central Time, in the Lantana Room of Disney’s Coronado Springs Resort located at 1000 W Buena Vista Drive, Orlando, Florida12700 Hill Country Boulevard, Suite T-200, Austin, Texas 78738 or at any adjournment or postponement thereof.
THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS DIRECTED. IF THIS PROXY IS PROPERLY EXECUTED BUT IF NO DIRECTION IS GIVEN, THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST AS THE BOARD RECOMMENDS ON ITEMS 1, 2 andAND 3.
Address Change/Comments
(Mark the corresponding box on the reverse side)
See reverse for voting instructions.