*Source: S&P Global Market Intelligence

Getting More for Less

While Monmouth haswe have outperformed itsour peers and delivered exceptional results for itsour shareholders, itsour Chief Executive Officer’s total compensation for 20162017 was less than 50% of the average total compensation of chief executive officers of the Comparable REITs.

20162017 Monmouth CEO Total Compensation vs. Average CEO Total Compensation of Comparable REITs*

*The compensation data used for comparison purposes was obtained from the most recent filings for the Comparable REITs. For Comparable REITs that employed two chief executive officers, the Company used the compensation data of only one chief executive officer for the applicable Comparable REIT(s).

Total executive compensation of the Company also fell inwithin the lowest range (25^th percentile) within the REIT industry based upon the 20162017 Compensation Survey published by NAREIT.

The Company continuesWe continue to efficiently manage itsour general and administrative expenses. General and administrative expenses, as a percentage of gross revenue, (which includes rental revenue, reimbursement revenue and dividend and interest income), remains low at onlyand decreased to 6% for fiscal year 2017 from 8% for fiscal years 2016 and 2015, as doesyear 2016. In addition, general and administrative expenses, as a percentage of undepreciated assets (which is the Company’sour total assets excluding accumulated depreciation), is at a very reasonableefficient 48 basis points for fiscal year 2017, which decreased from 58 basis points and 61 basis points for the fiscal years 2016 and 2015, respectively.year 2016.

In lightWe value the feedback provided by our shareholders. At the Annual Meeting of Shareholders held on May 18, 2017, approximately 92% of votes cast (excluding broker non-votes) were cast in favor of our Say-On-Pay proposal, which we believe affirms our shareholders’ support of our approach to our executive compensation program.

We have discussions with many of our shareholders on an ongoing basis regarding various corporate governance topics, including executive compensation, and we consider the above, as well as other information provided in this Proxy Statement,views of shareholders regarding the design and effectiveness of our executive compensation program. Our Board recommends the Company’sthat our shareholders vote FOR the Say-on-Pay proposal.Proposal (Proposal No. 3).

Corporate Governance Highlights

Publicly traded since 1968, Monmouth Real Estate Investment Corporation is one of the oldest publicly-traded equity REITs in the world. Our longevity is the direct result of being patient and conservative stewards of capital. TheOur Board’s decision-making process is guided by an appreciation for all that has been built in the past and a focus on continuing to create sustainable long-term value for the CompanyMonmouth and its shareholders for many years to come.

Our Board believes that effective corporate governance should include regular constructive discussions with our shareholders. We have a proactive engagement process that encourages feedback from our shareholders. This feedback helps shape our governance practices. Several practices in the chart below are the direct result of such feedback.

Some corporate governance highlights are as follows:

FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

Why am I receiving this Proxy Statement?

You are receiving these materials because you owned shares of our Company’s common stock (sometimes referred to herein as “Common Shares”) as a “registered” shareholder or you held Common Shares in “street name” at the close of business on March 14, 2017,2018, the record date for the Annual Meeting, and that entitles you to vote at our Annual Meeting to be held at 4:00 p.m., local time, on Thursday, May 18, 2017,17, 2018, at theour offices of the Company at Juniper Business Plaza, 3499 Route 9 North, Suite 3-D, Freehold, New Jersey 07728, or any postponements or adjournments of such meeting, for the purposes set forth in the Notice of 20172018 Annual Meeting of Shareholders. This Proxy Statement contains information related to the solicitation of proxies for use at the Annual Meeting.

Who is soliciting my proxy?

This solicitation of proxies is made by and on behalf of our Board of Directors. We will pay the costs of soliciting proxies, which will consist primarily of the cost of printing, postage and handling. In addition to soliciting proxies by mail, our officers, directors and other employees, without additional compensation, may solicit proxies personally or by other appropriate means. It is anticipated that banks, brokers, fiduciaries, custodians and nominees will forward proxy soliciting materials to their principals, and that we will reimburse these persons’ out-of-pocket expenses.

The Company hasWe have also retained Okapi Partners LLC (“Okapi”), a proxy solicitation firm, to assist in the distribution of proxy materials and the solicitation of proxies from brokerage firms, banks, broker-dealers, and other similar organizations representing beneficial owners of sharesCommon Shares for the Annual Meeting. We have agreed to pay Okapi a fee of approximately $25,000,$20,000, plus out-of-pocket expenses. You may contact Okapi at (877)-629-6355.

What is the difference between a “registered” shareholder and a shareholder holding shares in “street name?”

If your Common Shares are registered directly in your name with American Stock Transfer & Trust Company, LLC (“AST”), our transfer agent, you are a “registered” shareholder. If you own Common Shares through a broker, bank, trust or other nominee rather than in your own name, you are the beneficial owner of the Common Shares, but considered to be holding the Common Shares in “street name.”

Who can attend the Annual Meeting?

All of our common shareholders of record as of the close of business on March 14, 2017,2018, the record date for the Annual Meeting, or individuals holding their duly authorized proxies, may attend the Annual Meeting. You should be prepared to present photo identification for admittance. Appointing a proxy in response to this solicitation will not affect a shareholder’s right to attend the Annual Meeting and to vote in person. Please note that if you hold your Common Shares in “street name” (that is, through a broker, bank or other nominee), you will need to bring a copy of a brokerage statement reflecting your stock ownership as of the close of business on March 14, 2017,2018, the record date for the Annual Meeting, to gain admittance to the Annual Meeting.

Who may vote?

You may vote if you owned Common Shares at the close of business on March 14, 2017,2018, which is the record date for the Annual Meeting. You are entitled to cast one vote for as many individuals as there are directors to be elected at the Annual Meeting and to cast one vote on each other matter presented at the Annual Meeting for each Common Share that you owned as of the record date. Cumulative voting is not permitted in the election of directors.

What is a quorum for the Annual Meeting?

As of the close of business on March 14, 2017,2018, we had 71,430,72978,252,225 Common Shares outstanding. In order to conduct a meeting, shareholders entitled to cast a majority of the votes entitled to be cast at the Annual Meeting must be present in person or by proxy. No business may be conducted at the Annual Meeting if a quorum is not present. If you submit a properly executed Proxy Card or authorize a proxy by telephone or via the Internet, you will be considered part of the quorum. Abstentions and broker “non-votes” will be counted as present and entitled to vote for purposes of determining a quorum. A broker “non-vote” results when a bank, broker or other nominee who holds shares for another person has not received voting instructions from the owner of the shares and, under the applicable rules, does not have discretionary authority to vote on a matter.

What am I voting on?

At the Annual Meeting, you may consider and vote on:

We are not aware of any other business, other than procedural matters relating to the Annual Meeting or the proposals listed above, that may properly be brought before the Annual Meeting. Once the business of the Annual Meeting is concluded, members of management will respond to questions raised by shareholders, as time permits.

What are the Board’s recommendations?

The Board recommends a vote:

Unless you give other instructions on your Proxy Card, the persons named as proxy holders on the Proxy Card will vote in accordance with the recommendations of the Board.

How many votes are needed to approve each of the proposals assuming that a quorum is present at the Annual Meeting?

Proposal 1: Election of Directors: The election of a director nominee must be approved by a plurality of the votes cast in the election of directors.

Proposal 2: Approval of the ratification of the appointment of PKF O’Connor Davies, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 20172018 requires the affirmative vote of a majority of the votes cast on the proposal.

Proposal 3: Approval of the Amended and Restated 2007 Incentive Award Plan requires the affirmative vote of a majority of the votes cast on the proposal.

Proposal 4: Approval of the Say-on-Pay proposal requires the affirmative vote of a majority of the votes cast on the proposal.

Proposal 5: The frequency of “one year”, “two years” or “three years” that receives the greatest number of votes with respect to the frequency of future Say-on-Pay proposals will indicate the shareholders’ preference.

If you are a shareholder of record as of the record date for the Annual Meeting and you authorize a proxy (whether by Internet, telephone or mail) without specifying voting instructions on any matter to be considered at this Annual Meeting, the proxy holders will vote your shares according to the Board’s recommendation on that matter and in their discretion on any other matter that may properly come before the Annual Meeting.

If you are a shareholder of record as of the record date for the Annual Meeting and you fail to authorize a proxy or attend the meeting and vote in person, assuming that a quorum is present at the Annual Meeting, it will have no effect on the result of the vote on any of the matters to be considered at the Annual Meeting.

If you hold your shares through a broker, bank or other nominee, under the rules of the New York Stock Exchange (“NYSE”), your broker or other nominee may not vote with respect to certain proposals unless you have provided voting instructions with respect to that proposal. As noted above, this is referred to as a broker “non-vote.” A broker non-vote is not considered a vote cast on a proposal and broker non-votes will have no effect on the vote on any of the matters to be considered at the Annual Meeting. If you hold your shares in a brokerage account, then, under NYSE rules and Maryland law, your broker is entitled to vote your shares on Proposal No. 2 (Ratification of Independent Registered Public Accounting Firm) if no instructions are received from you, but your broker isnot entitled to vote on Proposal No. 1 (Election of Directors), or Proposal No. 3 (Approval of Equity Compensation Plan), Proposal No. 4 (Say-on-Pay), and Proposal No. 5 (Say-on-Frequency), without specific instructions from you. If you instruct your proxy or broker to “abstain” on any matter, it will have no effect on the approval of any of the matters to be considered at the Annual Meeting.

How do I vote?

If you plan to attend the Annual Meeting and wish to vote in person, we will give you a ballot at the Annual Meeting. However, if your Common Shares are held in the name of your broker, bank or other nominee, and you want to vote in person, you will need to obtain a legal proxy from the institution that holds your Common Shares.

If your Common Shares are held of record in your name, there are three ways for you to authorize a proxy:

If you mail us your properly completed and signed Proxy Card or authorize a proxy to vote your shares by telephone or Internet, your votes will be cast according to the choices that you specify.specify and the persons named as your proxies will vote in their discretion on any other matters properly brought before the Annual Meeting. Unless you indicate otherwise on your Proxy Card, the persons named as your proxies will cast your votes: FOR all of the nominees for election as directors named in this Proxy Statement; FOR the ratification of the appointment of PKF O’Connor Davies, LLP as our independent registered public accounting firm; FOR the approval of the Amended and Restated 2007 Incentive Award Plan; FOR the approval of the Say-on-Pay proposal; FOR ONE-YEAR as the frequency of future Say-on-Pay proposals, and in their discretion on any additional matters properly brought before the Annual Meeting.

If your Common Shares are held in the name of your broker, bank or other nominee, you should receive separate instructions from the holder of your Common Shares describing how to provide voting instructions.

Can I revoke my proxy?

Yes, if your Common Shares are held in your name, you can revoke your proxy by:

Attendance at the Annual Meeting will not, by itself, revoke a properly executed proxy. If your Common Shares are held in the name of your broker, bank or other nominee, please follow the voting instructions provided by the holder of your Common Shares regarding how to revoke your instructions.

PROPOSAL 1

ELECTION OF DIRECTORS

The Company’sOur charter and bylaws provide for a classified board of directors comprised of Class I, II, and III directors. Four Class IIIII directors are up for election at the Annual Meeting, to serve until the Company’sour annual meeting of shareholders in 20202021 and until their successors are duly elected and qualify. The four nominees for election as Class IIIII directors are set forth below. Unless instructed otherwise, the proxy holders will vote all proxies received by them for the nominees listed below or, if any such nominee is unwilling or unable to serve, for any other nominee designated by the Company’sour Board of Directors. As of the date of this Proxy Statement, the Company’sour Board of Directors is not aware of any other individual who may properly be nominated for election as a Class IIIII director at the Annual Meeting or of any nominee who is unable or unwilling to serve as director, if elected. The nominees listed below are currently each serving as a director of the Company and each has consented, if elected as a director, to serve until his term expires.

The Company’sOur Board of Directors currently consists of eleventwelve directors, four of whom have terms expiring at the Annual Meeting and when their successors are duly elected and qualify.

[Information Regarding Director Nominees are on the Following Page]

INFORMATION REGARDING DIRECTOR NOMINEES

The following information concerning the principal occupation, other affiliations and business experience of each of the four Class IIIII Director nominees during the last five years has been furnished to the Companyus by such nominee:

Vote Required:

At the Annual Meeting, theour shareholders of the Company will be requested to elect four Class IIIII Directors. A plurality of the votes cast in person or by proxy at the Annual Meeting, assuming a quorum is present, is required to elect a nominee.

Board Recommendation:

THE COMPANY’SOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE ELECTION OF THE FOUR NOMINEES NAMED ABOVE

INFORMATION CONCERNING CONTINUING DIRECTORS AND EXECUTIVE OFFICERS

Class III Directors with Terms Expiring in 2018

Class I Directors with Terms Expiring in 2019

Six

Class II Directors with Terms Expiring in 2020

Five of the Company’sour directors are also directors of UMH, a publicly-owned affiliate of the Company, which primarily engages in manufactured housing related real estate transactions.

Other Named Executive Officers of the Company

CORPORATE GOVERNANCE AND BOARD MATTERS

Publicly traded since 1968, Monmouth Real Estate Investment Corporation is one of the oldest publicly traded equity REITs in the world. Our longevity is the direct result of being patient and conservative stewards of capital. The Board’s decision-making process is guided by an appreciation for all that has been built in the past and a focus on continuing to create sustainable long-term value for the CompanyMonmouth and its shareholders for many years to come.

We are committed to maintaining sound corporate governance principles. The Board of Directors periodically updates and approves formal Corporate Governance Guidelines that address the qualifications and responsibilities of directors, director independence, committee structure and responsibilities, and interactions with management, among other matters. The Corporate Governance Guidelines are available on the Company’sour website atwww.mreic.reit.Together with theour charter and bylaws of the Company and the charters of the Board’s committees, the Corporate Governance Guidelines provide the framework for the governance of the Company.

“Good Corporate Governance”

The goal of good corporate governance practices areis fundamentally to ensure that the Company iswe are maximizing shareholder value. As highlighted throughout this Proxy Statement, the Company haswe have adopted numerous good corporate governance policies and procedures. We believe that the quality of any company’s corporate governance practices cannot properly be measured with a “one size fits all” approach. A fair analysis of the effectiveness of a company’s corporate governance should appropriately take into account long-term economic performance and total shareholder return. This is particularlyespecially true for a company that operates within the real estate industry, andindustry. Real estate is thereforea cyclical asset class with average cycles measuring seven to ten years in length. Therefore, in order to be most effectively governed and managed, with a focus on building long-term value.value is essential. We believe that it is essential that dividends be factored into evaluating a REIT’s economic performance. Our dividend has proven to be very reliable because our industrial properties are predominantly subject to long-term net leases to investment-grade tenants or their subsidiaries. On October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share, representing an annualized dividend rate of $0.68 per share. The 6.3% dividend increase marks our second dividend increase in three years, totaling 13% in dividend increases. We are proud to report that we have maintained or increased our dividend for 26 consecutive years. We are one of the few REITs that maintained our dividend throughout the Global Financial Crisis. We are also one of the few REITs that is paying out a higher per share dividend today than prior to the Global Financial Crisis.

The Company, duringDuring the 10-year period ended December 31, 2016,2017, we have delivered itsto our shareholders a total return of approximately 257%323% and outperformed both the S&P 500 by a wide margin of over 2.5 times and the MSCI US REIT Index by a wide margin of over 43 times.

Source: S&P Global Market Intelligence

Substantial Insider Ownership: Management’s Interests are Aligned with Shareholder Interests

The aggregate stock ownership of Companyour Directors and Executive Officers represents more than 5%4.6% of our Common Shares as of the Company’s Common Shares,end of fiscal 2017, and currently represents the third largest block of shareholders behind two institutional investors and helps align our management’s interests with our shareholders’ interests.

Board Leadership Structure and Role in Risk Oversight

Since the Company’sour inception in 1968 through April 2013, the positions of Chief Executive Officer and Chairman of the Board of Directors were combined. For more than forty years, both positions were held by Eugene W. Landy. Effective April 9, 2013, as part of the Board’s succession planning strategy, Michael P. Landy was elected as the Company’sour President and Chief Executive Officer. Mr. Michael P. Landy, who has been with the Company since 2001 and served as the Company’sa director since 2007 and our Chief Operating Officer since 2011, continues to serve as a member of the Company’sour Board of Directors. Mr. Eugene W. Landy continues to serve as Chairman of the Board of Directors. The Board of Directors has selected a Lead Independent Director, Stephen B. Wolgin, to preside at executive sessions of the non-management directors. The Board reviews the structure of the Board and Company leadership as part of the succession planning process. At present, our Board believes that this structure is appropriate and that it facilitates independent oversight of management.

The Board of Directors oversees the Company’sour enterprise-wide approach to the major risks facing the CompanyMonmouth and oversees the Company’sour policies for assessing and managing its exposure to risk. The Board periodically reviews these risks and the Company’sour risk management processes. The Board also considers risk in evaluating the Company’sour strategy. The Board’s responsibilities include reviewing the Company’sour practices with respect to risk assessment and risk management and reviewing contingent liabilities and risks that may be material to the Company.Monmouth. The Audit Committee reviews the Company’sour financial and compliance risks and major legislative and regulatory developments which could materially impact the Company.Monmouth. The Compensation Committee oversees management’s assessment of whether the Company’sour compensation structure, policies and programs create risks that are reasonably likely to have a material adverse effect on the Company.Monmouth.

Board Independence

The Company’sOur Corporate Governance Guidelines include specific Director Independence Standardsdirector independence standards that comply with applicable rules of the SEC and the listing standards of the NYSE. The Board requires that at least a majority of its directors satisfy this definition of independence. The Board of Directors has considered business and other relationships between the CompanyMonmouth and each of its directors, including information provided to the CompanyMonmouth by the directors. Based upon its review, the Board of Directors has determined that allseven of its directors other than Ms. Anna T. Chew and Messrs. Daniel D. Cronheim, Eugene W. Landy, Michael P. Landy, and Samuel A. Landy, are independent, consistent with the Corporate Governance Guidelines. The seven independent directors are Catherine B. Elflein, Brian H. Haimm, Neal Herstik, Matthew I. Hirsch, Gregory T. Otto, Scott L. Robinson and Stephen B. Wolgin. The Corporate Governance Guidelines, which incorporate the NYSE Director Independence Standards,NYSE’s director independence standards, are available at the Company’sour website located atwww.mreic.reitand are available in print upon request.

Committees of the Board of Directors and Meeting Attendance

The Board of Directors had four meetings during the last fiscal year. Noyear and each of the directors attended 100% of the meetings. Our policy is that no director attendedshould attend fewer than 75% of the meetings of the Board of Directors and of meetings of the committees on which he or she served. The Company doesWe do not have a policy concerning directors’ attendance at the Annual Meeting of Shareholders. Three directors attended the Company’s 2016our 2017 Annual Meeting of Shareholders.

The Company hasWe have a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Board of Directors. Each of these committees is composed exclusively of independent directors.

Name		Age as of record date		Director Since (Calendar year)		Audit Committee		Compensation Committee		Nominating Committee
Anna T. Chew		58		2007
Daniel D. Cronheim		62		1989
Catherine B. Elflein		56		2007
Brian H. Haimm		47		2013
Neal Herstik		58		2004
Matthew I. Hirsch		57		2000
Eugene W. Landy Chairman of the Board		83		1968
Michael P. Landy Chief Executive Officer		55		2007
Samuel A. Landy		56		1989
Scott L. Robinson		46		2005
Stephen B. Wolgin Lead Independent Director		62		2003
								Chair		Member

Name		Age as of record date		Director Since (Calendar year)		Audit Committee		Compensation Committee		Nominating and Corporate Governance Committee
Daniel D. Cronheim		63		1989
Catherine B. Elflein		57		2007
Brian H. Haimm		48		2013
Neal Herstik		59		2004
Matthew I. Hirsch		58		2000
Eugene W. Landy Chairman of the Board		84		1968
Michael P. Landy Chief Executive Officer		56		2007
Samuel A. Landy		57		1989
Kevin S. Miller Chief Financial & Accounting Officer		48		2017
Gregory T. Otto		29		2017
Scott L. Robinson		47		2005
Stephen B. Wolgin Lead Independent Director		63		2003
								Chair		Member

Audit Committee

The Audit Committee’s responsibilities include reviewing and overseeing financial reporting, policies and procedures and internal controls, retaining the independent registered public accounting firm, approving the audit fees, and monitoring the qualifications, independence and performance of the Company’sour independent registered public accounting firm. It also oversees the internal audit function, legal and regulatory compliance, establishing procedures for complaints received regarding the Company’sour accounting, internal accounting controls and auditing matters. In addition, the Audit Committee prepares the Audit Committee Report, which is included in the Company’sour annual proxy statements. The Audit Committee had four meetings during the fiscal year ended September 30, 2016,2017, including an executive session with the independent auditors, in which management did not attend. The Audit Committee operates under the Audit Committee Charter which is available on the Company’sour website atwww.mreic.reit.

The current members of the Company’sour Audit Committee are Catherine B. Elflein, Brian H. Haimm (who serves as Chairman of the Audit Committee), Matthew I. Hirsch, Scott L. Robinson, and Stephen B. Wolgin. The Board has determined that the members of the Audit Committee are “independent” as defined by the rules of the SEC and the listing standards of the NYSE, and that each of them is able to read and understand fundamental financial statements and is “financially literate” within the meaning of the rules of the NYSE. The Board has also determined that Catherine B. Elflein, Brian H. Haimm, Scott L. Robinson and Stephen B. Wolgin are “audit committee financial experts” within the meaning of the rules of the SEC.

Compensation Committee

The Compensation Committee’s responsibilities include (1) evaluating the Chief Executive Officer’s and other executive officers’Named Executive Officers’ performance in light of the Company’sour goals and objectives and determining the Chief Executive Officer’s and other executive officers’Named Executive Officers’ compensation, which includes base salary and bonus; and (2) administering the Company’sour Amended and Restated 2007 Stock Option and Stock Award Incentive Award Plan as Amended and Restated (the “Original Plan”).(Incentive Award Plan), which was approved at our Annual Meeting held on May 18, 2017. The Compensation Committee had at least one meeting during the fiscal year ended September 30, 2016.2017. The current members of the Compensation Committee are Brian H. Haimm, Matthew I. Hirsch and Stephen B. Wolgin (who serves as the Chairman of the Compensation Committee). The Board has determined that the members of the Compensation Committee are “independent” as defined by the rules of the SEC and the listing standards of the NYSE. The Compensation Committee operates under the Compensation Committee Charter which can be found at the Company’sour website atwww.mreic.reit.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee identifies, considers and recommends candidates to serve as members of the Board and makes recommendations regarding the structure and composition of the Board of Directors and Committees. The Nominating and Corporate Governance Committee had at least one meeting during the fiscal year ended September 30, 2016.2017. The current members of the Nominating and Corporate Governance Committee are Neal Herstik, Matthew I. Hirsch (who serves as the Chairman of the Nominating and Corporate Governance Committee), and Stephen B. Wolgin. The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee is “independent” as defined by the rules of the SEC and the listing standards of the NYSE. The Nominating and Corporate Governance Committee operates under the Nominating and Corporate Governance Committee Charter which can be found at the Company’sour website atwww.mreic.reit.

The principal function of the Nominating and Corporate Governance Committee is to review and recommend candidates for nomination to the Board of Directors. The Nominating and Corporate Governance Committee will consider for recommendation as nominees appropriate individuals whose names are submitted in writing by a shareholder, and will evaluate them using the same criteria as that used for other candidates. See “Shareholder Communications” below for more information.

The Nominating and Corporate Governance Committee has established a process for identifying and evaluating prospective nominees for director. The Nominating and Corporate Governance Committee will annually assess the qualifications, expertise, performance and willingness to serve of existing directors. If at this time or at any other time during the year the Board of Directors determines a need to add a new director with specific qualifications or to fill a vacancy on the Board, the Chair of the Nominating and Corporate Governance Committee will then initiate the search, seeking input from other directors and senior management, considering nominees previously submitted by shareholders, and, if the Nominating and Corporate Governance Committee deems necessary or appropriate, hiring a search firm. The Nominating and Corporate Governance Committee considers real estate expertise, diversity of background and personal experience in identifying director candidates. An initial slate of candidates satisfying the specific qualifications, if any, and otherwise qualifying for membership on the Board, will then be identified and presented to the Nominating and Corporate Governance Committee by the Committee Chairman. The Nominating and Corporate Governance Committee will then prioritize the candidates and determine if the Nominating and Corporate Governance Committee members, other directors or senior management have relationships with the preferred candidates and can initiate contact with the candidate. To the extent feasible, all of the members of the Nominating and Corporate Governance Committee, the President and Chief Executive Officer and Chairman of the Board will interview the prospective candidate(s). Evaluations and recommendations of the interviewers are submitted to the Nominating and Corporate Governance Committee for final evaluation. The Nominating and Corporate Governance Committee will then meet to consider such recommendations and to select the final candidate(s) to recommend to the Board of Directors as nominees. The Nominating and Corporate Governance Committee will evaluate all potential nominees for director, including nominees recommended by a shareholder, on the same basis.

To date, there are no third parties being compensated for identifying and evaluating candidates.

Independent Director Meetings

The Company’sOur independent directors, as defined under the listing standards of the NYSE, have established a policy to meet separately from the other directors in a regularly scheduled executive session at least annually, and at such additional times as they may be deemed appropriate by the Company’s independent directors.deem appropriate. Any independent director may call an executive session of independent directors at any time. The independent directors had at least one meeting during the fiscal year ended September 30, 2016.2017. The Board of Directors has selected a Lead Independent Director, Stephen B. Wolgin, to preside at executive sessions of the independent directors.

Shareholder Communications

Monmouth believesWe believe that effective corporate governance should include regular constructive discussions with our shareholders. We have a proactive engagement process that encourages feedback from our shareholders. This feedback helps shape our governance practices. Shareholders and other interested parties who desire to contact the Company’sour Board of Directors may do so by writing to: Board of Directors, c/o Secretary, Monmouth Real Estate Investment Corporation, 3499 Route 9 North, Suite 3-D, Freehold, NJ 07728. Communications received will be distributed to the Chairperson of the appropriate committee of the Board depending on the facts and circumstances outlined in the communication. Shareholders and other interested parties also may have direct communications solely to theour independent directors of the Company by addressing such communications to the independent directors, c/o Secretary, at the address set forth above. In addition, the Board of Directors maintains special procedures for the receipt, retention and treatment of complaints that may be received by the Companyus regarding accounting, internal accounting controls or auditing matters and for the submission by our employees, of the Company, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters. Such communications may be made by writing to the Audit Committee of the Board of Directors, c/o Secretary, at the address set forth above. Any such communication marked “Confidential” will be forwarded by the Secretary, unopened, to the Chairman of the Audit Committee.

Code of Business Conduct and Ethics

The Company hasWe have adopted a Code of Business Conduct and Ethics, which applies to all directors, officers, and our employees, of the Company, including itsour principal executive officer and our principal financial officer. This code is posted on our website atwww.mreic.reit. During fiscal 20162017 and through the date of this Proxy Statement, no violations of the Code of Business Conduct and Ethics were reported nor were any waivers granted.

Anti-Hedging Policy

The Company considersWe consider it inappropriate for any director, officer or employee to enter into speculative transactions in Company securities. Such transactions, while allowing the holder to own Companyour securities without the full risks and rewards of ownership, potentially separate the holder’sholders’ interests from those of other Company shareholders. Therefore, the Company prohibitswe prohibit the purchase or sale of puts, calls, options or other derivative securities based on the Company’sour securities by directors, officers or employees. Our policy also prohibits hedging or monetization transactions, such as forward sale contracts, in which the holder continues to own the underlying Company security without all the risks or rewards of ownership. The Anti-Hedging Policy is posted on our website atwww.mreic.reit.

As of the date of this Proxy Statement, to the best of the Company’sour knowledge, no director, officer or employee has entered into speculative transactions in Company securities.

CEO Stock Ownership RequirementClawback Policy

In October 2017, the Compensation Committee adopted a clawback policy that provides that, in the event of a material restatement of our financial results, other than a restatement caused by a change in applicable accounting rules or interpretations, the Committee will review the performance-based compensation of our Named Executive Officers, as defined in our Proxy Statement from year to year, for the three years prior to such material restatement. If the Committee determines that the amount of any performance-based compensation actually paid or awarded to a Named Executive Officer (Awarded Compensation) would have been lower if it had been calculated based on such restated financial statements (Actual Compensation) and that such executive officer engaged in actual fraud or willful unlawful misconduct that materially contributed to the need for the restatement, then the Committee may direct Monmouth to recoup the after-tax portion of the difference between the Awarded Compensation and the Actual Compensation for the Named Executive Officers. The Committee has absolute discretion to administer and interpret this policy in Monmouth’s best interests.

Stock Ownership Guidelines for CEO, NEOs and Directors, and Stock Holding Guidelines

In order to encourage our directors and Named Executive Officers (NEO) to retain investments in Monmouth and help further align their interests with the interests of our stockholders, the Committee has adopted stock ownership guidelines applicable to our directors, our Chief Executive Officer and our other Named Executive Officers, recommending that they hold the following amounts of our stock:

For purposes of determining compliance with these ownership guidelines (other than the Company is required to own Common Shares having a value equal to at least six times his or her base salary. The Chief Executive Officer serving, as of September 17, 2015, will have until September 17, 2020, to meetholding period for vested equity compensation), the minimum ownership requirements. Any subsequent Chief Executive Officer elected after the adoption of these requirements will have five years from the time he or she is elected to meet the minimum ownership requirements. The Chief Executive Officer’s stock ownership levels will be evaluated by or at the direction of the Company’s Chief Financial Officer in connection with the preparation of the Company’s Annual Report on Form 10-K or the Company’s proxy statement each year. The value of each director’s or officer’s stock holdings will be calculated based on the closing price of a Common Shareshare of the Companyour common stock on the last trading day of theour fiscal year, ending priorwhich was $16.19 on September 29, 2017. Shares owned by a director or officer include: shares owned outright by the director or officer or by his or her immediate family members residing in the same household; shares held in trust or under a similar arrangement for the economic benefit of the director or officer; restricted or unrestricted stock issued as part of the director or officer’s compensation, whether or not vested; shares acquired upon option exercise that the director or executive officer continues to own; and shares held for the annual review. If thedirector or executive officer’s account in a 401(k) or other retirement plan.

Our Chief Executive Officer meets the ownership requirements at the time of the annual review, he or she will be in compliance with these requirements until the next annual review. Changes in the Company’s stock price or changes to base salary will not affect compliance status for the remainder of that year. The Nominating Committee has authority to administer and interpret these requirements.

The CEO Stock Ownership Requirement Policy requires thatwas adopted in September 2015. As of September 30, 2017, Mr. Michael P. Landy, own Common Shares having a value of at least six times his base salary. As of September 30, 2016,our President and Chief Executive Officer, Mr. Michael P. Landy had a base salary of $551,250. Therefore, Mr. Michael P. Landy would be required to own Common Shares with a value ofowned stock valued at least $3,307,500. Mr. Michael P. Landy owned 580,781 Common Shares as of September 30, 2016. The closing price of a Common Share on the last trading day of the fiscal year ending September 30, 2016 was $14.27. Therefore, the Company’s Chief Executive Officer determined that Mr. Michael P. Landy owned $8,287,745, which is approximately 15 timesmore than 13x his base salary and which is also approximately 2.5 times the Company’smore than 2x our CEO stock ownership requirement. Our Director Stock Ownership policy was adopted effective September 12, 2017, and our other stock ownership policies were adopted effective October 1, 2017.

The aggregate stock ownership of Monmouth’s directors and officers represent approximately 4.6% of our outstanding common stock, which currently represents the third largest block of shareholders behind two institutional investors and helps align our managements’ interests with our shareholders’ interests.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table lists information with respect to the beneficial ownership of the Company’sour equity securities as of March 14, 2017,2018, by:

Unless otherwise indicated, the address of the person or persons named below is c/o Monmouth Real Estate Investment Corporation, Juniper Business Plaza, 3499 Route 9 North, Suite 3-D, Freehold, New Jersey 07728. In determining the number and percentage of Common Shares and Series C Preferred Shares beneficially owned by each person, Sharesshares that may be acquired by that person under options exercisable within sixty (60) days of March 14, 20172018 are deemed beneficially owned by that person and are deemed outstanding for purposes of determining the total number of outstanding Common Sharesshares for that person and are not deemed outstanding for that purpose for all other shareholders.

*Less than 1%.

	(1)	Except as indicated in the footnotes to this table and pursuant to applicable community property laws, the Company believes that the persons named in the table have sole voting and investment power with respect to all Common Shares listed.
	(2)	Based on 71,430,729the number of Common Shares 2,300,000outstanding on March 14, 2018, which was 78,252,225 and 11,095,376 shares of the Company’s 7.875% Series B Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series B Preferred Shares”), and 8,400,000 shares of the Company’sour 6.125% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series C Preferred Shares”) outstanding on March 14, 2017.2018.
	(3)	Based on Schedule 13G/A filed with the SEC on February 10, 2017,9, 2018, The Vanguard Group, Inc. owns 7,409,4738,277,506 Common Shares as of December 31, 2016.2017. The Vanguard Group has sole dispositive power over 7,234,8258,087,751 Common Shares and sole voting power over 171,248172,253 Common Shares. The Vanguard Group Inc. has shared dispositive power over 189,755 Common Shares and shared voting power over 89,900 Common Shares and shared dispositive power over 174,648105,900 Common Shares.

PROPOSAL 2

RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

At the Annual Meeting, the Company’sour common shareholders will be asked to consider and vote on a proposal to ratify the appointment of PKF O’Connor Davies, LLP (“PKF”) as the Company’sour independent registered public accounting firm for the fiscal year ending September 30, 2017. The Company’s2018. Our charter and bylaws do not require that itsour shareholders ratify the appointment of PKF as the Company’sour independent registered public accounting firm. The Company isWe are asking itsour common shareholders to ratify this appointment as a matter of good corporate practice. If the Company’sour common shareholders do not ratify the appointment of PKF, the Company’sour Audit Committee will reconsider whether to retain PKF as the Company’sour independent registered public accounting firm but may determine to do so. Even if the appointment of PKF is ratified by the Company’sour common shareholders, the Audit Committee may change the appointment at any time during the year if it determines that a change would be in theour best interests of the Company. The Company expectsinterests. We expect a representative of PKF to be present at theour Annual Meeting, to make a statement if he or she desires to do so and to respond to appropriate questions.

Vote Required:

A majority of the votes cast in person or by proxy at the Annual Meeting, assuming a quorum is present, is required to ratify the appointment of PKF O’Connor Davies, LLP as our independent registered public accounting firm for the fiscal year ending September 30, 2017.2018.

Board Recommendation:

THE COMPANY’SOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF PKF O’CONNOR DAVIES, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 20172018

REPORT OF THE AUDIT COMMITTEE

The Audit Committee (the “Audit Committee”) of the Board of Directors (the “Board of Directors”) of Monmouth Real Estate Investment Corporation (the “Company”) operates under a written charter, which was amended in January 2013. The amended charter is available on the Company’s website atwww.mreic.reit.www.mreic.reit.

The Company has an Audit Committee consisting of five “independent” directors, as defined by the listing standards of the New York Stock Exchange. The Audit Committee’s role is to act on behalf of the Board of Directors in the oversight of all material aspects of the Company’s reporting, internal control and audit functions.

We have reviewed and discussed with management the Company’s audited financial statements as of and for the year ended September 30, 2016.2017.

We have discussed with the independent registered public accounting firm the matters required to be discussed under by Auditing Standard No. 1301, “Communications with Audit Committees” issued by the Public Company Accounting Oversight Board (“PCAOB”).

We have received and reviewed the written disclosures and the letter from the independent registered public accounting firm required by PCAOB Ethics and Independence Rule 3526, “Communications with Audit Committees Concerning Independence”, and we have discussed with the independent registered public accounting firm, the independent registered public accounting firm’s independence.

Based on the reviews and discussions referred to above, we recommend to the Board of Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2016.2017.

Fees Billed by Independent Registered Public Accounting Firm

PKF O’Connor Davies, LLP served as the Company’sour independent registered public accountants for the years ended September 30, 20162017 and 2015.2016. A representative from PKF is expected to be present at the Annual Meeting in order to be available to respond to possible inquiries from shareholders.

The following are fees billed by and accrued to PKF in connection with services rendered for the fiscal years ended September 30, 20162017 and 2015:2016:

Audit fees include professional services rendered for the audit of the Company’sour annual financial statements, management’s assessment of internal controls, and reviews of financial statements included in the Company’sour quarterly reports on Form 10-Q.

Audit related fees include services that are normally provided by the Company’sour independent auditors in connection with statutory and regulatory filings, such as consents and assistance with and review of documents filed with the Securities and Exchange Commission.

Tax fees include professional services rendered for the preparation of the Company’sour federal and state corporate tax returns and supporting schedules as may be required by the Internal Revenue Service and applicable state taxing authorities. Tax fees also include other work directly affecting or supporting the payment of taxes, including planning and research of various tax issues.

All of the services performed by PKF for the Company during fiscal 20162017 were either expressly pre-approved by the Audit Committee or were pre-approved in accordance with the Audit Committee Pre-Approval Policy, and the Audit Committee was provided with regular updates as to the nature of such services and fees paid for such services.

Audit Committee Pre-Approval Policy

The Audit Committee has adopted a policy for the pre-approval of audit and permitted non-audit services provided by the Company’sour principal independent accountants. The policy requires that all services provided by our independent registered public accountants to the Company, including audit services, audit-related services, tax services and other services, must be pre-approved by the Audit Committee, and all have been so approved. The pre-approval requirements do not prohibit day-to-day normal tax consulting services, which matters will not exceed $10,000 in the aggregate.

The Audit Committee has determined that the provision of the non-audit services described above is compatible with maintaining PKF’s independence.

PROPOSAL 3

Approval of the Amended and Restated 2007 Incentive Award Plan

At the Annual Meeting the Company’s common shareholders will be asked to consider and vote on a proposal to approve its Amended and Restated 2007 Incentive Award Plan, which we refer to as the “Plan”. The Plan is intended to promote the success and enhance the value of the Company by linking the individual interests of its directors, employees, consultants and advisors to those of Company shareholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to Company shareholders. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of directors, employees, consultants and advisors upon whose judgment, interest and special effort the successful conduct of the Company’s operation is largely dependent.

The Plan constitutes an amendment and restatement of the Company’s 2007 Stock Option and Stock Award Plan, which was initially approved by the Company’s shareholders on July 26, 2007, and was subsequently amended and restated and approved by the Company’s shareholders on May 6, 2010 (the “Original Plan”).

Shareholder Approval of Company’s Amended and Restated 2007 Incentive Award Plan (the “Plan”)

On March 13, 2017, the Board approved the Plan, conditioned upon shareholder approval. The Board recommends shareholders vote FOR the proposal to approve the Plan.

Since the approval of the Original Plan, the Company has generated a 10-year total shareholder return of approximately 257%, outperforming the S&P 500 by a wide margin of over 2.5 times and the MSCI US REIT Index by a wide margin of over 4 times.

The Company’s equity market capitalization has also grown substantially from approximately $201.6 million, as of September 30, 2007 to approximately $1 billion as of March 14, 2017.

In addition, over the last 5-year period, the Company’s total market capitalization has grown approximately 119% from 2012 through 2016 fiscal yearend.

As of the close of business on March 14, 2017, the Company had 71,430,729 Common Shares outstanding and, when the Original Plan expired on March 26, 2017, 164,878 Common Shares remained available for grant under the Original Plan. The Plan, if approved by the Company’s shareholders, will provide an additional 1,600,000 shares, for a total of 1,764,878 Common Shares available for future grant of stock options, restricted stock, or other equity based awards, plus any shares subject to outstanding options that expire or are forfeited without being exercised. The additional Common Shares under the Plan represent approximately 2.24% of the Company’s total outstanding Common Shares as of March 14, 2017. Although equity compensation has not comprised a large component of the Company’s historical executive or director compensation, the Compensation Committee believes this additional share reserve is appropriate to provide the Company with the flexibility to award equity compensation to employees and directors in amounts that are more comparable to the Company’s competitors and peers.

The Plan Includes Compensation and Governance Best Practices

The Plan includes provisions that are designed to protect our shareholders’ interests and to reflect corporate governance best practices, including:

Description of the Plan:

The following paragraphs provide a summary of the principal features of the Plan and its operation. The following summary is qualified in its entirety by reference to the Plan, a copy of which is attached as Annex B hereto.

SUMMARY OF THE COMPANY’S AMENDED AND RESTATED 2007 INCENTIVE AWARD PLAN

Administration of the Plan

The Company’s Amended and Restated 2007 Incentive Award Plan (the “Plan”) will generally be administered by the Compensation Committee of the Company’s Board of Directors, currently comprised of three directors of the Company, none of whom are officers or employees of the Company and all of whom are “non-employee directors” (within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended) and “outside directors” (as required by Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”). The members of the Company’s Compensation Committee are appointed from time to time by, and serve at the pleasure of, its Board of Directors. Currently, the Company’s Compensation Committee consists of Brian H. Haimm, Matthew I. Hirsch, and Stephen B. Wolgin (chairman).

The Company’s full Board of Directors will administer the Plan with respect to awards granted under the Plan to Non-Employee Directors.

The Compensation Committee, or, in the case of an award granted to a Non-Employee Director, the Company’s full Board of Directors, has the sole discretion to administer and construe the Plan in accordance with its provisions (each, respectively, the “Administrator”). The Administrator’s authority includes the power to:

The Plan will be interpreted, construed and administered in a manner consistent with the Company’s status as a REIT.

Eligibility to Receive Awards

Non-employee directors, officers, other employees and consultants and advisors engaged to provide services to the Company or any of its subsidiaries (each, an “Eligible Individual”) will be eligible to receive one or more awards. Currently, there are approximately 23 individuals that the Company considers eligible to receive awards under to the Plan.

Share Reserve

If the Plan is approved, the maximum number of Common Shares that may be issued under the Plan is 3,100,000 (consisting of 1,500,000 Common Shares originally authorized for issuance under the Company’s 2007 Incentive Award Plan (sometimes referred to in this Proxy Statement as the “Original Plan”) and an additional 1,600,000 Common Shares that will be authorized for issuance if the Plan is approved), of which 1,335,122 shares have been issued or are the subject of outstanding options. There are currently options to purchase 735,000 Common Shares outstanding. Of the options currently outstanding, options to purchase 280,000 Common Shares are not currently exercisable and will become exercisable when they vest one year from the date of issuance, including options to purchase 215,000 Common Shares that will vest in December 2017 and options to purchase 65,000 Common Shares that will vest in January 2018. If the Plan is approved, 1,764,878 Common Shares will be available for future awards. This number includes 164,878 Common Shares originally authorized for issuance under the Original Plan that were not issued and are not the subject of an outstanding award granted under the Original Plan. If an award made under the Plan is forfeited, expires or is converted into shares of another entity in connection with a recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other similar event, or the award is settled in cash, the shares associated with the forfeited, expired, converted or settled award will become available for additional awards under the Plan.

Limitation on Awards

No participant may receive awards during any calendar year covering more than 200,000 Common Shares or more than $1,500,000. Regular annual awards granted to Non-Employee Directors as compensation for services as Non-Employee Directors during any fiscal year of the Company may not exceed $100,000, and the grant date value of any special or one-time award upon election or appointment to the Board of Directors may not exceed $200,000.

Terms of Awards

The Administrator will determine the types of awards to be granted to Eligible Individuals and the terms and conditions of awards, including: (i) the number of Common Shares underlying the awards; (ii) restrictions and vesting requirements, which may be tied to some period of time and/or satisfaction of other conditions such as performance goals; (iii) the exercise price for stock options and stock appreciation rights; and (iv) where applicable, the expiration date of stock options and stock appreciation rights.

Minimum Vesting Period

Awards granted pursuant to the Plan may not vest until the first anniversary of the date the award was granted, provided, however, that up to 5% of the Common Shares available under the Plan may be awarded to any one or more Eligible Individuals without the minimum vesting period.

No Repricing

The Administrator may not, without approval of the shareholders of the Company: (i) reduce the exercise price of any option or stock appreciation right (SAR); (ii) exchange any option or SAR for another award when the price of the underlying Common Shares exceed the fair market value of such shares; (iii) reduce the exercise price per share of the shares underlying outstanding options or SARs; or (iv) cancel outstanding options or SARs in exchange for cash or other awards with an exercise price per share that is less than the exercise price per share of the original option or SAR.

Claw-back of Awards

All awards granted pursuant to the Plan will be subject to the provisions of any claw-back policy adopted by the Company, including any claw-back policy adopted to comply with applicable law, such as the Dodd-Frank Wall Street Report and Consumer Protection Act and any rules or regulations promulgated thereunder, whether or not such claw-back policy was in place at the time of grant of an award to the extent set forth in such claw-back policy.

Stock Options

Stock options, including incentive stock options (as defined under Section 422 of the Code), may be granted to Eligible Individuals on such terms and conditions as the Administrator may determine. The exercise price per common share underlying each option will be set by the Administrator, but generally may not be less than 100% of the fair market value of a common share on the date such option is granted or, for incentive stock options, on the date such option is modified, extended or renewed for purposes of Section 424(h) of the Code. The options may be exercised as determined by the Administrator, but the term of any option may not be more than ten years from the date the option was granted, and the term for any incentive stock option granted to a shareholder of the Company who owns more than 10% of the total combined voting power of the Company or any of its subsidiaries may not be more than five years from the date the incentive stock option was granted. The Administrator will establish the vesting period for exercising option awards, subject to the minimum vesting requirements described above. If the award is intended to qualify as performance-based compensation (as described in Section 162(m)(4)(C) of the Code), the participant must be employed by the Company or one of its subsidiaries through the performance period established by the Administrator, and will be eligible to receive payment pursuant to such award only if and to the extent the performance goals have been met. No fractional Common Shares will be issued upon exercise of any option. The Administrator may establish a minimum number of shares to have vested before an option can be partially exercised.

Stock Appreciation Rights

Stock appreciation rights (“SARs”) may be granted to Eligible Individuals on such terms and conditions as the Administrator may determine. The exercise price per common share underlying each SAR will be set by the Administrator but generally may not be less than 100% of the fair market value of a common share on the date such SAR is granted. The SAR may be exercised as determined by the Administrator, but in no event may the term of any SAR be more than ten years from the date such SAR was granted. The Administrator will establish the vesting period for exercising SAR awards, subject to the minimum vesting requirements described above. If the award is intended to qualify as performance-based compensation, the participant must be employed by the Company or one of its subsidiaries through the performance period established by the Administrator, and will be eligible to receive payment pursuant to such award only if and to the extent the performance goals have been met. No fractional Common Shares will be issued upon exercise of any SAR. The Administrator may establish a minimum number of shares required to have vested before a SAR can be partially exercised.

Restricted Stock

Awards of restricted Common Shares may be granted to Eligible Individuals on such terms and conditions as the Administrator may determine, including whether a purchase price will be established, the form of payment for the restricted stock and the restrictions and vesting requirements, subject to the minimum vesting requirements described above. If no price was paid for the restricted stock and the employment or engagement of the participant is terminated, or in the case of a Non-Employee Director, the Non-Employee Director ceases to be a director of the Company, any unvested restricted stock award will lapse and the underlying Common Shares will be surrendered to the Company and cancelled. If a price was paid for the restricted stock, the Company may repurchase the unvested restricted stock at a cash price per share equal to the price paid by the participant or such other amount as may be specified by the Administrator. A participant will have all the rights of a common shareholder upon issuance of the restricted stock, including the right to receive all dividends and other distributions made with respect to Common Shares, subject to any restrictions imposed by the Administrator.

Restricted Stock Units

Restricted stock units representing the right to receive Common Shares may be granted to Eligible Individuals on such terms and conditions as the Administrator may determine, including the purchase price, which may not be less than the par value of the underlying Common Shares, and the time period for vesting, which may be tied to duration of service to the Company or any of its subsidiaries, a specific date, individual performance or other specific criteria and the minimum vesting requirements described above. The maturity date of any awards of restricted stock units may not be earlier than the vesting date of the award and, subject to Section 409A of the Code, may not be after the later of: (i) the 15^th day of the third month after the end of the calendar year in which the restricted stock unit vests; or (ii) the 15^th day of the third month after the end of the Company’s fiscal year in which the restricted stock unit vests. Upon maturity, the Company will transfer to the participant one unrestricted, fully transferable common share for each matured restricted stock unit. Generally, an award of restricted stock units will be only be payable to an Eligible Individual while such person is an employee or consultant to the Company or a member of the Board of Directors.

Dividend Equivalents

Dividend equivalents, entitling Eligible Individuals holding such equivalents to participate in dividends paid on Common Shares during the period in which such Eligible Individual held dividend equivalents, may be granted on such terms and conditions as the Administrator may determine. For a dividend equivalent tied to a performance-based award on which dividends are paid prior to the vesting of the dividend-equivalent, the Company will only pay out the divided equivalent to the extent that the performance-based vesting conditions are subsequently satisfied and the award vests.

Other Stock or Cash Based Awards

The Administrator is authorized to grant other stock or cash based awards to Eligible Individuals on such terms and conditions as the Administrator may determine.

Performance-Based Awards

Under the Plan, the Administrator may grant equity and cash awards that will qualify as “performance-based compensation” (as defined in Section 162(m) of the Code) to “covered employees” (as defined in Section 162(m) of the Code) based on satisfaction of pre-existing performance goals established in accordance with Section 162(m) of the Code in order to preserve the deductibility of these awards for federal income tax purposes (see the additional discussion of deductibility requirements under “Federal Income Tax Consequences” below). Generally, for an award to qualify as performance-based compensation, the award must be issued to an employee of the Company or any of its subsidiaries who remains an employee through the entire performance period. Payment pursuant to a performance-based award will only be paid to the extent the performance goals for the established period are achieved.

The performance criteria used to establish the pre-existing performance goals are:

The Administrator may provide that one or more objectively determinable adjustments will be made to one or more performance goals, which include, but are not limited to:

Determinations with respect to awards intended to qualify as performance-based compensation must be made in compliance with Section 162(m), but the Administrator may alter the intent of any award.

Restrictions on Transferability

Awards under the Plan generally cannot be sold, pledged, assigned or transferred in any manner other than (i) by will or the laws of descent and distribution or (ii) with the consent of the Administrator, pursuant to a “domestic relations order” (as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder), unless or until an award has been exercised or the underlying Common Shares have been issued. All issued Common Shares are subject to restrictions on transferability and ownership intended to assist the Company in preserving its status as a REIT, including a requirement that no person may own, or be deemed to own by virtue of the attribution rules of the Code, more than 9.8% in value or number of shares (whichever is more restrictive), of the Company’s outstanding stock (other than excess stock), subject to certain exceptions. During the lifetime of an Eligible Individual who has been granted an award, only that Eligible Individual may exercise any exercisable portion of such award unless the award has been disposed of by a domestic relations order.

Change in Control

The Plan does not provide for the automatic vesting of awards upon a change in control of the Company. If the Board of Directors determines that a change in control has occurred, the Board of Directors and the board of directors or other managing body of the surviving or acquiring entity may make appropriate provisions for the continuation or assumption of outstanding awards granted pursuant to the Plan, or may provide for the acceleration of vesting with respect to existing awards.

Adjustments and Substitute Awards

In the event of a stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of the assets of the Company to its shareholders or certain other changes affecting the shares or the share price of the Company’s stock, the award may be equitably adjusted with respect to: (i) the aggregate number and kind of shares that may be issued pursuant to the Plan; (ii) the number and kind of shares subject to outstanding awards; (iii) the terms and conditions of any outstanding awards; and (iv) the grant or exercise price per share for any outstanding awards.

Upon the occurrence of an equity transaction that affects the number or kind of shares or the price of Common Shares or other securities and causes a change in the per-share value of the Common Shares underlying any awards, the number and type of securities subject to such awards and the exercise price or grant price thereof may be equitably adjusted. The Administrator will have discretion to make any other equitable adjustments it deems appropriate to reflect such an event.

Corporate Transactions

In the event of a stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of the assets of the Company to its shareholders or any other change affecting the shares or the share price of the Company’s stock or any unusual or nonrepeating transactions or events affecting the Company or any of its subsidiaries, or the financial statements of the Company or any of its subsidiaries, or of changes in applicable law or accounting standards, the Administrator may, as appropriate to prevent dilution or enlargement of the benefits intended to be made available under the Plan or with respect to any award granted pursuant to the Plan, to facilitate such a transaction or event or to give effect to such changes in applicable law or accounting standards: (i) terminate any award in exchange for an amount of cash and/or other property equal in value to the amount the participant otherwise have realized under such award; (ii) provide for the assumption of any award by any successor or surviving entity or the substitution of such award for similar options, rights or awards covering the stock of any successor or surviving entity;

(iii) adjust the number and type of shares subject to outstanding awards and/or the terms and conditions of, and criteria included in outstanding and future awards; (iv) provide that any award is exercisable or payable or fully vested with respect to all underlying shares of stock of the Company; (v) replace any award with other rights or property; and/or (vi) provide that any award cannot vest, be exercised or become payable after such an event.

While any of the corporate transactions described above are pending, the Administrator may refuse to permit the exercise of any award for 30 days before the consummation of such transaction.

Amendment and Termination

Generally, the Board of Directors may amend or terminate the Plan. Material amendments of the Plan will be subject to approval by the shareholders of the Company. Any amendment or termination of the Plan may not materially and adversely affect any rights or obligations under any awards already made, unless the award itself expressly states otherwise.

Subject to applicable law, the Administrator may amend, modify or terminate any outstanding award issued pursuant to the Plan, including substituting the award for a different award, changing the exercise date, or converting an incentive stock option to a non-qualified stock option. Any such amendment will require the consent of the participant if it would materially and adversely affect such participant and is not otherwise contemplated by the Plan.

Federal Income Tax Consequences

With respect to nonqualified stock options, the Company is generally entitled to deduct and the optionee recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. A participant receiving incentive stock options will not recognize taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant will not recognize taxable income at the time of exercise. However, the excess of the fair market value of the Common Shares received over the option price is an item of tax preference income potentially subject to the alternative minimum tax. If stock acquired upon exercise of an incentive stock option is held for a minimum of two years from the date of grant and one year from the date of exercise, the gain or loss (in an amount equal to the difference between the fair market value on the date of sale and the exercise price) upon disposition of the stock will be treated as a long-term capital gain or loss, and the Company will not be entitled to any deduction. If the holding period requirements are not met, the incentive stock option will be treated as one which does not meet the requirements of the Internal Revenue Code for incentive stock options and the tax consequences described for nonqualified stock options will apply.

The current federal income tax consequences of other awards authorized under the Original Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as nonqualified stock options; nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant); stock-based performance awards, dividend equivalents and other types of awards are generally subject to tax at the time of payment. Compensation otherwise effectively deferred is taxed when paid. In each of the foregoing cases, the Company will generally have a corresponding deduction at the time the participant recognizes income.

Certain Awards under the Original Plan, depending in part on particular Award terms and conditions, may be considered non-qualified deferred compensation subject to the requirements of Internal Revenue Code Section 409A. If the terms of such Awards do not meet the requirements of Section 409A, then the violation may result in an additional 20% tax obligation, plus penalties and interest for such participant.

As of March 1, 2017, the closing market price of a share of Common Shares authorized for issuance under the Original Plan was $14.73 and the approximate number of employees and non-employee directors eligible to participate in the Original Plan was 23.

New Plan Benefits

The future benefits or amounts that would be received pursuant to the Plan are discretionary and are therefore not determinable at this time. Similarly, the benefits or amounts which would have been received by or allocated to the Company’s executive officers and other employees for the last completed fiscal year if the Plan had been in effect cannot be determined. The Company expects that future awards granted pursuant to the Plan will be granted in a manner substantially consistent with the historical grant of awards pursuant to the Original Plan. All awards granted in the last completed fiscal year pursuant to the Original Plan to Named Executive Officers are disclosed in the Summary Compensation Table. For information regarding the size and structure of these awards in the past, please see the disclosures in this Proxy Statement under “Grants of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal Year End.”

Vote Required:

The affirmative vote of a majority of the votes cast on the proposal is required for approval of the Company’s Amended and Restated 2007 Incentive Award Plan.

Board Recommendation:

THE COMPANY’S BOARD OF DIRECTORS RECOMMENDS YOU VOTE “FOR” THE PROPOSAL TO APPROVE THE COMPANY’S AMENDED AND RESTATED 2007 INCENTIVE AWARD PLAN

PROPOSAL 43

ADVISORY VOTE ON EXECUTIVE COMPENSATION

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (as set forth in Section 14A of the Securities Exchange Act of 1934, as amended), we are providing our shareholders with the opportunity to cast a non-binding, advisory vote on the compensation that was paid to our Named Executive Officers in fiscal 20162017 as described in the “Compensation Discussion and Analysis” set forth in this proxy statement, including the compensation tables and the narrative disclosures that accompany those tables.

Our executive compensation program is designed to attract and retain talented individuals who possess the skills and expertise necessary to lead the Company. The Company’sMonmouth. Our current equity compensation plan, or OriginalIncentive Award Plan, has been the primary vehicle for providing long-term incentive compensation to our Named Executive Officers. Executive compensation has been voted upon previously and approved by our shareholders.

The following table highlights important aspects of our executive compensation program, which promote good governance and serve the interests of our shareholders.

Pay for Performance: Total Shareholder Return

Since 1968, Monmouth has delivered consistent and reliable returns for its shareholders. Over the last 10 years, Monmouth has outperformed the MSCI US REIT Index by a wide margin of over three times. Our total shareholder return (“TSR”) over the last 10 fiscal years was 255.6%273.4%. TSR includes both dividends reinvested and stock price appreciation. Historically, REIT dividends have accounted for approximately 65% of total shareholder return. We believe that it is essential that dividends be factored into evaluating a REIT’s economic performance. Our dividend has proven to be very reliable because our industrial properties are predominantly subject to long-term net leases to investment-grade tenants or their subsidiaries. On October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share, representing an annualized dividend rate of $0.68 per share. The 6.3% dividend increase marks our second dividend increase in three years, totaling 13% in dividend increases. We are proud to report that we have maintained or increased our dividend for 2526 consecutive years. We are one of the few REITs that maintained itsour dividend throughout the Global Financial Crisis. We are also one of the few REITs that is paying out a higher per share dividend today than prior to the Global Financial Crisis.

Comparable REITs: Independent Compensation Consultant

Engagement of Compensation Consultant

Pursuant to its charter, the Compensation Committee is authorized to retain the services of an executive compensation advisor, in its discretion, to assist with the establishment and review of our compensation programs and related policies. The Committee did not retain a compensation consultant for prior years because the Committee determined that the Survey and other information available to it provided comprehensive information regarding executive compensation levels and structure. In August 2017, the Committee engaged FPL Associates (FPL), a nationally recognized compensation consulting firm specializing in the REIT industry, to provide additional market-based compensation data and to advise on industry trends and best practices. In order to help our shareholders fairly evaluate the Company’sour executive compensation in light of our relative economic performance, our managementFPL has identifiedprepared for the Committee, a peer group of REITs with similar equity markettotal capitalization, ranging between $750 million$1.4 billion and $2.5$4.0 billion (approximately 0.7x-2.0x Monmouth’s total capitalization), and/or REITs that operate within the industrial REIT sector and with whom we compete for executive employees. These REITs (the “Comparable REITs”) are:

The peer group of comparable REITs (Comparable REITS) identified by FPL are as follows:

Agree Realty Corporation

EastGroup Properties*

Getty Realty Corporation

Hersha Hospitality Trust

LTC Properties, Inc.

Rexford Industrial Realty, Inc.*

STAG Industrial, Inc.*

Terreno Realty Corporation*

TIER REIT, Inc.

Urstadt Biddle Properties Inc.

*Denotes a peer that is in the Industrial sector

FPL compared our aggregate pay and performance to those of our peers over the prior three-year period. Based upon this analysis, FPL concluded that our aggregate pay ranks at the lowest end of the aggregate pay provided by our peers, and that our performance by Total Shareholder Return is at the highest end of performance of our peers.

The Committee intends to use this data as one tool in considering compensation for our NEO’s for compensation decisions beginning in fiscal 2018. Information about peers includes but is not limited to: base salaries, annual bonuses, long-term equity incentives, composition ranges by position, governance practices, market trends and industry performance. The peer group compensation analyses prepared by FPL will be utilized by the Comparable REITs is presented here solelyCompensation Committee for informational purposes only and has not been and will not be utilized for benchmarking purposes as we do not have formal benchmarking policies for comparing to assistour peers or the shareholdersmarket. FPL was engaged in evaluating the Company’s performance andlatter part of fiscal 2017, after all determinations with respect to 2017 compensation programs in connection withof NEO’s was completed; therefore, the say-on-pay vote,impact of FPL’s advice on 2018 compensation decisions has not yet been determined. The Compensation Committee’s executive compensation determinations are subjective and the Comparable REITs were not identified or usedresult of the Compensation Committee’s business judgment, which is informed by ourpeer group data provided by FPL and will continue to be informed by the experiences of the members of the Compensation Committee. The Compensation Committee, in setting or evaluatingconsultation with the Chairman and the President and Chief Executive Officer, ultimately uses its own judgment in making final decisions regarding the compensation ofpaid to our named executive officers.

Other than advising the Committee as described above, FPL did not provide any other services to us. The Committee has sole authority to hire, terminate and set the terms of engagement with FPL. The Committee has considered the independence of FPL, consistent with the requirements of NYSE, and has determined that FPL is independent. Further, pursuant to SEC rules, the Committee conducted a conflicts of interest assessment and determined that there are no conflicts of interest resulting from retaining FPL. FPL does not provide any services to our management and has no prior relationship with our management prior to its engagement by the Committee. The Committee intends to reassess the independence of FPL or any other compensation consultant retained by the Committee at least annually.

The following table demonstrates the Company’sour strong outperformance over 1, 3, 5 and 10 year periods compared to the Comparable REITs and the MSCI US REIT Index Total Return Performance and is calculated based on the Company’s 2016our 2017 fiscal year ending September 30.

Source: S&P Global Market Intelligence

Getting More for Less

While Monmouth haswe have outperformed itsour peers and delivered substantial results for itsour shareholders, itsour Chief Executive Officer’s total compensation for 20162017 was less than 50% of the average total compensation of chief executive officers of the Comparable REITs.

20162017 Monmouth CEO Total Compensation vs. Average CEO Total Compensation of Comparable REITs*

*The compensation data used for comparison purposes was obtained from the most recent filings for the Comparable REITs. For Comparable REITs that employed two chief executive officers, the Company used the compensation data of only one chief executive officer for the applicable Comparable REIT(s).

TotalOur total executive compensation of the Company also fell inwithin the lowest range (25^th percentile) within the REIT industry based upon the 20162017 Compensation Survey published by NAREIT.

As set forth in more detail under the headings Financial Highlights and Compensation Discussion and Analysis in this Proxy Statement, Monmouth delivered another year of strong financial results in fiscal 2016,2017, including 53%22% growth in total market capitalization 23%and 9% increase in adjusted funds from operations per diluted share and a dividend increase of 6.7%.share. SeeFinancial Informationfor a discussion of our non-GAAP performance measures. We continue to efficiently manage our general and administrative expenses. General and administrative expenses, as a percentage of gross revenue, (which includes rental revenue, reimbursement revenue and dividend and interest income), remains low and decreased to 6% for fiscal year 2017 from 8% for fiscal year 2016. In addition, general and administrative expenses, as a percentage of undepreciated assets (which is our total assets excluding accumulated depreciation), is at a very efficient 48 basis points for fiscal year 2017, which decreased from 58 basis points for fiscal year 2016. Our best-in-class industrial property portfolio performed exceptionally well, achieving a 100%92% tenant retention rate. As a result of Monmouth’s strong performance throughout fiscal 2017, on October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share, representing an annualized dividend rate and also achieving a 100% occupancy rate subsequent to 2016 fiscal yearend.of $0.68 per share. The 6.3% dividend increase marks our second dividend increase in three years, totaling 13% in dividend increases. Monmouth has maintained or increased its dividend for 2526 consecutive years and was one of the only REITs that maintained its dividend throughout the Great Recession. We believe our Named Executive Officers, as well as the entire employee base, played an integral role in delivering these Company achievements.

We value the feedback provided by our shareholders. At the Annual Meeting of Shareholders held on May 18, 2017, approximately 92% of votes cast (excluding broker non-votes) were voted in favor of our Say-On-Pay proposal, which we believe affirms our shareholders’ support of our approach to our executive compensation program.

The Compensation Committee regularly reviews all elements of the compensation paid to our Named Executive Officers.NEO’s. The Committee believes that the Company’sour present compensation programs, as presented in the Compensation Discussion and Analysis section and the accompanying tables in this Proxy Statement, promote in the best manner possible our business objectives while aligning the interests of the Named Executive OfficersNEO’s with those of our shareholders to ensure positive financial results. Accordingly, the Board requests your vote “FOR” the following resolution:

RESOLVED, that the shareholders approve, on an advisory basis, the compensation of the Company’sour named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion in the Proxy Statement.

Vote Required:

The affirmative vote of a majority of the votes cast on this proposal at the Annual Meeting will be required to approve the advisory resolution on executive compensation. The results of this advisory vote are not binding on the Compensation Committee, the Company or our Board of Directors. Nevertheless, the Board of Directors values input from our shareholders and will consider carefully the results of this vote when making future decisions concerning executive compensation.

Board Recommendation:

THEOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THE COMPENSATION DISCUSSION AND ANALYSIS SECTION AND THE ACCOMPANYING COMPENSATION TABLES AND DISCLOSURES IN THIS PROXY STATEMENT.

PROPOSAL 5

ADVISORY VOTE ON THE FREQUENCY OF

FUTURE ADVISORY VOTES ON EXECUTIVE COMPENSATION

In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (as set forth in Section 14A of the Securities Exchange Act of 1934, as amended), we are also providing our shareholders with the opportunity to vote, on a non-binding, advisory basis, on the frequency of future advisory votes on the compensation of our Named Executive Officers, such as Proposal 4 included in this Proxy Statement. By voting on this Proposal 5, shareholders may recommend whether future advisory votes on executive compensation should be conducted every “one year,” “two years” or “three years.”

After consideration of this Proposal, the Board of Directors recommends that a vote on the compensation of our Named Executive Officers take place on an annual basis, or every year.

Vote Required:

The selection of “one year”, “two years” or “three years” that receives the greatest number of votes cast on this proposal at the Annual Meeting will indicate the shareholders’ preference for the frequency of future votes on the compensation of our Named Executive Officers and the Board of Directors encourages this input from the shareholders. However, since this vote is not binding on the Board of Directors, the Compensation Committee or the Company, the Board of Directors may decide that it is in the best interest of the Company and the shareholders to hold future advisory votes on the compensation of our Named Executive Officers more or less frequently than as indicated by the shareholder vote on this Proposal 5.

Board Recommendation:

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR “ONE YEAR” AS THE FREQUENCY FOR FUTURE NON-BINDING ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Overview of Compensation Program

The Compensation Committee (for purposes of this analysis,Compensation Discussion and Analysis, the “Committee”) of the Board has been appointed to implement and exercise the Board’s responsibilities relating to the compensation of the Company’sour executive officers.officers and directors. The Committee has the overall responsibility for approving and evaluating theour executive compensation plan, policies and programs, of the Company.and does not delegate this responsibility to any other person(s). The Committee’s primary objectives include serving as an independent and objective party to review such compensation plan, policies and programs. The CompensationTo assist in the process, the Committee has not retained or obtained the advice of a compensation committee consultant for determining or recommendingas outlined below in the amountsection entitled Engagement of executive or director compensation.Compensation Consultant.

Throughout this Proxy Statement, the individuals who served as the Company’sour Chairman of the Board and the President and Chief Executive Officer and other Officers during fiscal 2016officers included in the Summary Compensation Table presented below inwithin this Proxy Statement, are sometimes referred to in this Proxy Statement as the Named Executive Officers.Officers (NEO’s).

Since 1968, Monmouth has delivered consistent and reliable returns for its shareholders. Over the last 10 years, Monmouth has outperformed the MSCI US REIT Index by a wide margin of over three times. Our total shareholder return (TSR) over the last 10 fiscal years through September 30, 2017 was 273% as compared to 76% for the MSCI US REIT Index during the same period. TSR includes both dividends reinvested and stock price appreciation. Historically, REIT dividends have accounted for approximately 65% of total shareholder return. We believe that it is essential that dividends be factored into evaluating a REIT’s economic performance. Our dividend has proven to be very reliable because our industrial properties are predominantly subject to long-term net leases to investment-grade tenants or their subsidiaries. In view of the substantial progress made by the Company during fiscal year 2017, on October 2, 2017, our Board of Directors approved a 6.3% increase in our quarterly common stock dividend, raising it to $0.17 per share from $0.16 per share. This represents an annualized dividend rate of $0.68 per share. The 6.3% dividend increase marks our second dividend increase in three years, totaling 13% in dividend increases. We have maintained or increased our dividend for 26 consecutive years. We are one of the few REITs that maintained its dividend throughout the Global Financial Crisis. We are also one of the few REITs that is paying out a higher per share dividend today than prior to the Global Financial Crisis.

The following charts illustrate our outperformance in total return over 1 and 10-year periods as compared to the S&P 500 Index and the MSCI US REIT Index for the same periods:

Source: S&P Global Market Intelligence

Source: S&P Global Market Intelligence

The following chart illustrates our growth in Capital Structure over the last five years:

Compensation Philosophy and Objectives

The Committee believes that a well-designed compensation program should align the goalsinterests of the President and ChiefNamed Executive OfficerOfficers with the goalsinterests of the shareholders, and that a significant part of the executives’ compensation, over the long term, should be dependent upon the value created for shareholders. In addition, all executives should be held accountable through their compensation for theMonmouth’s performance, of the Company, and compensation levels should also reflect the executives’ individual performance in an effort to encourage increased individual contributions to the Company’sour performance. TheThis compensation philosophy, as reflected in the Company’sour employment agreements with itsour executives and the overall compensation program, is designed to motivate our executives to focus on operating results and create long-term shareholder value by:

The salaries and bonuses in the Company’s recently executedour executive employment agreements are consistent with the Committee’s philosophy and objectives.

The Committee believes that each of the above factors is important when determining compensation levels for named executive officers.Named Executive Officers. The Committee reviews and approves the employment contracts for the Chairman of the Board, and the President and Chief Executive Officer and the other named executive officers, includingNamed Executive Officers, and reviews and approves the performance goals and objectives.objectives applicable to their performance-based compensation. The Committee annually evaluates performance of the executive officersNamed Executive Officers in light of those goals and objectives. The Committee considers the Company’sour performance, relative shareholder return, the total compensation provided to comparable officers at similarly-situated companies, and compensation given toearned by the named executive officersNamed Executive Officers in prior years. The Company uses the annual Compensation Survey published by NAREIT (the “Survey”) as a guide to setting compensation levels. Participant company data is not presented in a manner that specifically identifies any named individual or company. This Survey details compensation by position type and company size with statistical salary and bonus information for each position. The sub-sets presented in the Survey used by the Committee for comparison are the industrial property sector, entities with less than $1.5 billion in equity market capitalization and entities with less than 75 full-time employees. The Compensation Committee compares the Company’s salary and bonus amounts to the rangespresented for reasonableness.

The Committee believes executive compensation packages provided by the Companythat we provide to its

executive officersour Named Executive Officers should include both base salaries and annual bonus awards that reward corporate and individual performance, as well as give incentives to executives to meet or exceed established goals. As a result, an important portion of the Company’sour compensation program is comprised of discretionary bonuses and equity awards as determined by the Committee in recognition of individual accomplishments and achievements.achievements, as well as overall company performance.

Historically, the Committee has used the annual Compensation Survey published by NAREIT (Survey) as a guide to setting compensation levels. Total executive compensation paid by the Company fell within the lowest range (25^th percentile) within the REIT industry based upon the 2017 Compensation Survey published by NAREIT. Participant company data is not presented within the Survey in a manner that specifically identifies any named individual or company. This Survey details compensation by position type and company size with statistical salary and bonus information for each position. The subsets presented in the Survey which the Committee also uses for comparison purposes are the industrial property sector, entities with a total market capitalization between $1.5 billion and $3.0 billion and entities with less than 75 full-time employees. The Committee compares our salary and bonus amounts to the ranges presented in this Survey for reasonableness.

During the last quarter of fiscal 2017, the Committee engaged FPL Associates (FPL), a nationally recognized compensation consulting firm specializing in the REIT industry, to provide market-based compensation data and to advise the Committee on industry trends and best practices. As a result of the compensation analysis, the Committee is exploring the possibility of providing for a greater percentage of total compensation for our Named Executive Officers to be paid in the form of performance-based equity.

Role of Executive Officers in Compensation Decisions

The Committee makes all final compensation decisions for the Company’s named executive officers.with respect to our Named Executive Officers. The Chairman of the Board and the President and Chief Executive Officer review the performance of the other named executive officersNamed Executive Officers and then present their conclusions and recommendations to the Committee with respect to base salary adjustments, and annual cash bonusbonuses and stock optionoptions or restricted stock awards. The Committee exercises its own discretion in modifying and implementing any recommended adjustments or awards, but does consider the recommendations from management who work closely with the other named executive officers.Named Executive Officers.

Role of Grants of Stock Options and Restricted Stock in Compensation Analysis

The Committee views the grant of stock options and restricted stock awards as a form of long-term compensation. The Committee believes that such grants promote the Company’sour goal of retaining key employees and align the key employees’ interests with those of the Company’sour shareholders from a long-term perspective. The number of options or shares of restricted stock granted to each employee, and the performance or time-based vesting criteria associated with each grant, is determined by consideration of various factors including but not limited to the employees’employee’s contribution, title, responsibilities, and years of service. The Committee takes outstanding awards of stock options and restricted stock into account in making its compensation determinations.

Role of Employment Agreements in Determining Executive Compensation

Each of the Company’sour currently employed named executive officersNamed Executive Officers is a party to an employment agreement. These agreements provide forestablish the base salaries, bonuses and customary fringe benefits.benefits for each Named Executive Officer. The key elementsemployment agreements also provide for certain severance benefits in the event the Named Executive Officer’s employment is terminated. Such severance benefits are designed to alleviate the financial impact of the Company’s compensation program for the named executive officers aretermination of employment through base salary bonuses, stock options and other benefits, including those providedhealth benefit continuation, with the intent of providing for under the employment agreements and additional discretionary bonuses awarded by the Committee in recognition of individual accomplishments and achievements. Each of these is addressed separately below.a stable work environment. In determining initial compensation, as incorporated into the employment agreements, the Committee considers all elements of a named executive officer’sNamed Executive Officer’s total compensation package in comparison to current market practices and other benefits. In reviewing and setting compensation for the Named Executive Officers, the Committee takes the terms of the employment agreements into consideration.

Shareholder Advisory Vote

One way to determine if the Company’sour compensation program reflects the interests of shareholders is through their non-binding vote.advisory vote on our executive compensation practices. At the Annual Meeting of Shareholders held on May 13, 2014,18, 2017, approximately 92% of votes cast (excluding broker non-votes) were voted in favor of our Say-On-Pay proposal, which we believe affirms our shareholders’ support of our approach to our executive compensation program.

We provide our shareholders with the Company’s shareholders approved by theiropportunity to vote annually on the advisory voteapproval of the compensation of our Named Executive Officers (Say-on-Pay proposal). The Committee will continue to consider the namedoutcome of our Say-on-Pay proposals when making future compensation decisions for our Named Executive Officers.

Engagement of Compensation Consultant

Pursuant to its charter, the Committee is authorized to retain the services of an executive compensation advisor, in its discretion, to assist with the establishment and review of our compensation programs and related policies. The Committee did not retain a compensation consultant for prior years because the Committee determined that the Survey and other information available to it provided comprehensive information regarding executive compensation levels and structure. In August 2017, the Committee engaged FPL to provide additional market-based compensation data and to advise on industry trends and best practices. In order to help our shareholders fairly evaluate our executive compensation in light of our relative economic performance, FPL has prepared for the Committee, a peer group of REITs with similar total capitalization, ranging between $1.4 billion and $4.0 billion (approximately 0.7x-2.0x Monmouth’s total capitalization), and/or REITs that operate within the industrial REIT sector and with whom we compete for executive employees.

The peer group of comparable REITs (Comparable REITS) identified by FPL are as follows:

Agree Realty Corporation

EastGroup Properties*

Getty Realty Corporation

Hersha Hospitality Trust

LTC Properties, Inc.

Rexford Industrial Realty, Inc.*

STAG Industrial, Inc.*

Terreno Realty Corporation*

TIER REIT, Inc.

Urstadt Biddle Properties Inc.

*Denotes a peer that is in the Industrial sector

FPL compared our aggregate pay and performance to those of our peers over the prior three-year period. Based upon this analysis, FPL concluded that our aggregate pay ranks at the lowest end of the aggregate pay provided by our peers, and that our performance by Total Shareholder Return is at the highest end of performance of our peers.

The Committee intends to use this data as one tool in considering compensation for our Named Executive Officers for compensation decisions beginning in fiscal 2018. Information about peers includes but is not limited to: base salaries, annual bonuses, long-term equity incentives, composition ranges by position, governance practices, market trends and industry performance. The peer group compensation analyses prepared by FPL will be utilized by the Compensation Committee for informational purposes only and has not been and will not be utilized for benchmarking purposes as we do not have formal benchmarking policies for comparing to our peers or the market. FPL was engaged in the latter part of fiscal 2017, after all determinations with respect to 2017 compensation of Named Executive Officers were completed; therefore, the impact of FPL’s advice on 2018 compensation decisions has not yet been determined. The Compensation Committee’s executive compensation determinations are subjective and the result of the Compensation Committee’s business judgment, which is informed by peer group data provided by FPL and will continue to be informed by the experiences of the members of the Compensation Committee. The Compensation Committee ultimately uses its own judgment in making final decisions regarding the compensation paid to our executive officers.

Other than advising the Committee as described above, FPL did not provide any other services to us. The Committee has sole authority to hire, terminate and set the terms of engagement with FPL. The Committee has considered the independence of FPL, consistent with the requirements of the NYSE, and has determined that FPL is independent. Further, pursuant to SEC rules, the Committee conducted a conflicts of interest assessment and determined that there are no conflicts of interest resulting from retaining FPL. FPL does not provide any services to our management and has no prior relationship with our management prior to its engagement by the Committee. The Committee intends to reassess the independence of FPL or any other compensation consultant retained by the Committee at least annually.

Elements of Executive Officer Compensation

In addition to its determination of the executives’ individual performance levels for fiscal 2017, the Committee compared the executives’ total compensation for fiscal 2017 to that of similarly-situated personnel of other comparably sized REITs. Furthermore, the Committee compared the executives’ total compensation for 2017 to that within the REIT industry in the Survey described above. For fiscal 2017, our total compensation fell within the lowest range (25th percentile) within the REIT industry in the Survey described above.

Our executive compensation structure includes the following objectives and core features:

Base Salaries

Base salaries are the principal fixed component of a Named Executive Officer’s compensation and are paid for performance of ongoing performanceday-to-day job responsibilities throughout the year. In order to compete for and retain talented executives who are critical to the Company’sour long-term success, the Committee has determined that the base salaries of named executive officersNamed Executive Officers should approximate those of executives of other equity REITs that compete with the Companyus for employees, investors and business, while also taking into account the named executive officers’Named Executive Officers’ performance and tenure, and the Company’sour performance relative to the performance reported for companies in the industrial property sector, entities with less than $1.5 billion in equity market capitalization and entities with less than 75 full-time employees within the REIT industry in the Survey described above.

Bonuses

Performance-based Cash Bonus Awards

In addition to the provisions for base salaries under the terms of their employment agreements and discretionary cash bonuses awarded by the Committee in recognition of individual accomplishments and achievements, the Chairman of the Board and the President and Chief Executive Officer are entitled to receive annual cash bonuses for each year during the terms of each respective employment agreement provided certain performance goals set by the Committee as described below are achieved.

For the Chairman of the Board:

For the President and Chief Executive Officer (effective through September 30, 2016):Officer:

(1)       Provided that FFO is in excess of the dividend

For the President and Chief Executive Officer (effective October 1, 2016):

(2) Provided that FFO is equal to or in excess of the dividend

Based on meeting the performance targets set forth above, a $210,000 cash bonus for theOur Chairman of the Board was accrued as of September 30, 2016, which was paid in October 2016 andearned a $90,000 cash bonus for fiscal 2017 based on meeting the performance targets set forth above, a $135,000 cash bonus was accrued for theour growth in market cap, and our President and Chief Executive Officer as of September 30, 2016, which was paidearned a $130,000 cash bonus for fiscal 2017 based on our growth in October 2016.market cap and growth in AFFO/share.

In addition to its determination of the executives’ individual performance levels for 2016, the Committee compared the executives’ total compensation for 2016 to that of similarly-situated personnel of other comparably sized REIT’s. Furthermore, the Committee compared the executives’ total compensation for 2016 to that within the REIT industry in the Survey described above. For fiscal 2016, the Company’s total compensation fell in the lowest range (25^th percentile) within the REIT industry in the Survey described above.Discretionary Cash Bonus Awards

The Committee considers and approves discretionary cash bonuses to be awarded tofor the Chairman of the Board and the President and Chief Executive Officer.Officer annually. Discretionary cash bonuses awarded to the other named executive officersNamed Executive Officers are recommendedbased on recommendations made annually by the Chairman of the Board and the President and Chief Executive Officer, which are then considered and are approved by the Committee.Committee in its discretion. The Committee believes that short-term rewards in the form of discretionary cash bonuses to senior executives generally should reflect short-term results and should take into consideration both theMonmouth’s profitability and performance of the Company and the performance of the individual, which may include comparing such individual’s performance to the preceding year, reviewing the breadth and nature of the senior executives’ responsibilities and valuing special contributions by each such individual. In evaluating theMonmouth’s performance annually for purposes of the Company annually,discretionary cash bonuses, the Committee considers a variety of factors, including, among others, Funds From Operations (FFO), Adjusted Funds From Operations (AFFO), net income, growth in asset size, amount of space under lease and total return to shareholders. The Company considersWe consider FFO to be an important measure of an equity REIT’s operating performance and has adopted the definition suggested by NAREIT, which defines FFO to mean net income computed in accordance with U.S. GAAP, excluding gains or losses from sales of property, plus real estate related depreciation and amortization. The Company definesWe define AFFO as FFO plus acquisition costs and costs associated with the Redemption of Preferred Stock less recurring capital expenditures and excluding the following: lease termination income, gains or losses on securities transactions, stock based compensation expense, amortization of financing and leasing commission costs, depreciation of corporate office tenant improvements, straight-line rent adjustments and non-recurring other expense. The Company considersWe consider FFO and AFFO to be meaningful additional measures of operating performance, primarily because they exclude the assumption that the value of its real estate assets diminishes predictably over time and because industry analysts have accepted these as performance measures.

Other factors considered include the employee’s title and years of service. The employee’s title generally reflects the employee’s responsibilities and the employee’s years of service may be considered in determining the level of discretionary cash bonus in comparison to base salary. The Committee has declined in the past to use specific performance formulas with respect to the cash bonuses awarded to the other named executive officers,Named Executive Officers, believing that with respect to CompanyMonmouth’s performance, such formulas do not adequately account for many factors, including, among others, the relative performance of the CompanyMonmouth compared to its competitors during variations in the economic cycle, and that with respect to individual performance, such formulas are not a substitute for the subjective evaluation by the Committee of a wide range of management and leadership skills of each of the senior executives.

In setting discretionary bonuses for fiscal 2016,2017, the Committee considered the performance of the Chairman of the Board and the President and Chief Executive Officer and received the recommendations from the Chairman of the Board and the President and Chief Executive Officer for the discretionary cash bonuses to be awarded to the other named executive officers.Named Executive Officers. The factors that wereCommittee also considered management’s report on our progress toward our fiscal 2017 achievements in awardingfinancial performance and strategic growth, and the discretionary cash bonuses included the progressrole of each Named Executive Officer in the following areas that was made by the Company due to the efforts of management:delivering these achievements:

Financial Performance