UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Securities Exchange Act of 1934 (Amendment No.)
Filed by the Registrant ☑
☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ | Preliminary Proxy Statement |
☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
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☒ | Definitive Proxy Statement |
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☐ | Definitive Additional Materials |
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☐ | Soliciting Material | |||
Brandywine Realty Trust
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
(Name of Registrant as Specified In Its Charter)
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☒ | No fee required. | |||
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Notice of Annual Meeting of Shareholders
To our Shareholders:
We cordially invite you to attend the 20202022 Annual Meeting of Shareholders Meeting of Brandywine Realty Trust, a Maryland real estate investment trust (the “Company”). AsThis year we have adopted a hybrid format for the annual meeting which will include an in-person meeting that will simultaneously be transmitted via a virtual meeting platform to provide a consistent and convenient experience to all shareholders regardless of the date of this letter, the Coronavirus continues to impact our daily lives and communities. Our focus is to ensure that we meet our tenant needs and do our part to keep our tenants, employees and communities safe. Our Board is sensitive to the public health and travel concerns of shareholders and it is clear that large gathering can pose a health threat to the participants and greater communities. Accordingly, this year’s annuallocation. The in-person meeting will be a virtual meeting of shareholders. You will be ableheld at The Logan Hotel, One Logan Square, Philadelphia, Pennsylvania 19103. If you cannot or do not wish to attend the annual meeting and vote and submit questions duringin person, the annual meeting can be accessed via a live webcast by visitingat www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to provide the same rights to participate as you would have at an www.virtualshareholdermeeting.com/BDN2020in-person. meeting. You may also submit questions in advance of the annual meeting by visiting www.proxyvote.com. We will respond to as many inquiries at the annual meeting as time allows. Prior to the annual meeting you will be able to authorize a proxy to vote your shares at www.proxyvote.com on the matters submitted for shareholder approval at the annual meeting, and we encourage you to do so.
If you plan to attend the annual meeting online, you will need the 16-digit control number included in your Notice of Internet Availability, on your proxy card or on the instructions that accompany your proxy materials. The annual meeting will begin promptly at 10:00 a.m. (Eastern Time). Online check-in will begin at 9:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.
Because of concerns and developments relating to the COVID-19 pandemic, we are planning for the possibility that the annual meeting may be held solely virtually. If we cancel the in-person option for attendance at the annual meeting, we will announce the decision in advance of the meeting, and any additional details on how to access, participate in and vote at the meeting online will be set forth in a press release issued by us and available at brandywinerealty.com. We encourage you to check this website prior to the meeting. | ||
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At the 2020 annual meeting, shareholders as of the close of business on the record date will be asked to consider and vote upon the following matters, as more fully described in the Proxy Statement:
1. | To consider and vote upon the election of seven persons to the Board of Trustees of the Company, each to serve for a term expiring at the |
2. | To consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for calendar year |
3. | To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation. |
4. | To transact such other business as may properly come before the meeting and at any postponement or adjournment of the meeting. |
YOUR VOTE IS IMPORTANT TO US.Whether or not you plan to virtually attend the 20202022 annual meeting in person or virtually, please authorize a proxy to vote your shares as soon as possible to ensure that your shares will be represented at the annual meeting.
By Order of the Board of Trustees
Shawn Neuman, Senior Vice President, General Counsel and Secretary
March 27, 202031, 2022
2929 WalnutArch Street, Suite 17001800 | Philadelphia, PAPennsylvania 19104 | (610) 325-5600
Proxy Statement for the
Annual Meeting of Shareholders
To be held on May 20, 202018, 2022
The Annual Meeting of Shareholders of Brandywine Realty Trust (“Brandywine,” “we,” “us,” “our” or the “Company”) will be held on Wednesday, May 20, 202018, 2022 at 10:00 a.m., Eastern Time. OurThis year we have adopted a hybrid format for the annual meeting which will include an in-person meeting that will simultaneously be transmitted via a virtual meeting platform to provide a consistent and convenient experience to all shareholders regardless of location. The in-person meeting will be a virtualheld at The Logan Hotel, One Logan Square, Philadelphia, Pennsylvania 19103. If you cannot or do not wish to attend the meeting of shareholders conductedin person, the annual meeting can be accessed via a live webcast. You will be ablewebcast at www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to attendprovide the virtual annual meeting online and submit your questions during the meeting by visitingsame rights to participate as you would have at an www.virtualshareholdermeeting.com/BDN2020in-person. meeting.
At our annual meeting, we will ask you:
1. | To consider and vote upon the election of seven persons to our Board of Trustees, each to serve for a term expiring at the |
2. | To consider and vote upon the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year |
3. | To consider and vote upon the approval of a non-binding, advisory resolution on executive compensation. |
4. | To transact such other business as may properly come before the meeting and at any postponement or adjournment of the meeting. |
Only holders of record of our common shares of beneficial interest, par value $.01$0.01 per share, as of the close of business on March 20, 202022, 2022 are entitled to notice of and to vote at the 2020 annual meeting or at any postponement or adjournment of the meeting.
Our Board of Trustees knows of no other business that will be presented for consideration at the annual meeting. If any other matter should be properly presented at the annual meeting or any postponement or adjournment of the annual meeting for action by the shareholders, the persons named in the proxy card will vote the proxy in accordance with their discretion on such matter.
On or about March 27, 2020,31, 2022, we mailed a Notice of Internet Availability of Proxy Materials to shareholders. This proxy statement and the form of proxy are first being furnished to shareholders on or about March 27, 2020.31, 2022.
Important Notice Regarding Internet Availability of Proxy Materials
We are pleased to take advantage of the Securities and Exchange Commission rules allowing companies to furnish proxy materials to their shareholders over the Internet. We believe that this e-proxy process will expedite shareholders’ receipt of proxy materials, lower the costs and reduce the environmental impact of our
Instead of receiving paper copies of future annual reports and proxy statements in the mail, you may elect to receive an e-mail that will provide an electronic link to these documents. Choosing to receive your proxy materials online will save us the cost of producing and mailing documents to you. With electronic delivery, we will notify you by e-mail as soon as the annual report and proxy statement are available on the Internet, and you may easily submit your shareholder votes online. If you are a shareholder of record, you may enroll in the electronic delivery service at the time you vote by selecting electronic delivery if you vote on the Internet, or at any time in the future by going directly to
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Important Notice Regarding the Availability of Proxy Materials
for the Shareholders Meeting to be Held on May 20, 2020
18, 2022
This proxy statement, the form of proxy and our 20192021 annual report to
shareholders are available at www.proxyvote.com.
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Proposal 2: Ratification of the Appointment of Independent Registered Public Accounting Firm |
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Security Ownership of Certain Beneficial Owners and Management | 79 | |||
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1 | Please see “Compensation Discussion |
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Development Highlights
Development of SHI Headquarters at Garza Ranch, Austin, TX
Substantially Completed: March 2020
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Development of Four Points Centre III,
Austin, TX
Completion: February 2019
Development of Schuylkill Yards’
Drexel Square, Philadelphia, PA
Opened to the public in June 2019
Completed
Redevelopment of 1676 International Drive, Tysons, VA
Substantially Completed: January 2020
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Environmental, Social and Governance Snapshot
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Governance Snapshot
Repeated GRESB Green Star leader
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Commitment to Environmental Stewardship
Brandywine’s best-in-class environmental practices span the entirety of our portfolio, from the properties we develop, to the ones we lease and manage. We prioritize efforts to minimize environmental impact through energy and resource-efficient buildings in transit-oriented locations, and deliver Class A office environments that emphasize the health and well-being of building occupants.
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Sustainable Development
Clockwise: Schuylkill Yards, Philadelphia, PA; 405 Colorado, Austin, TX; and 1676 International Drive, Tysons, VA
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Our portfolio reflects our commitment to sustainability and our focus on certified buildings that prioritize the health and wellbeing of employees, tenants, residents and visitors. From conception, we factor energy performance into each phase of the building’s life-cycle,life cycle, from energy modeling during design and development, to commissioning and smart operations and maintenance practices to ensure that results are achieved. We understand that our developments will have a lasting impact on their surrounding communities, so we focus on sustainable community development by taking advantage of existing transit infrastructure and proximity to vibrant nearby amenities.
Office Building Operations
Our Operations Teamoperations team continually evaluates the impact our properties have on the environment by utilizing building data to implement improvements, increase efficiencies, and create new standards to drive economies in system performance. To that end, Brandywine Realty Trust was named a Fitwel Champion in 2018 with 5.4Mowns and/or manages over 12.4 million square feet of green certified space—the mostspace with more than 42% of any company worldwide.its core portfolio as ENERGY STAR certified in 2021.
Green Leasing: As a recognized “Green Lease Leader”, Brandywine incorporates key sustainability language into our leases, covering issues such as chemical use, indoor air quality, energy efficiency, water efficiency, recycling, and other strategies to drive shared cost savings that benefit both tenant and landlord.
Green Leasing: As a recognized “Green Lease Leader Gold” by the U.S. Department of Energy and the Institute for Market Transformation, Brandywine incorporates key sustainability language into our leases, covering issues such as chemical use, indoor air quality, energy efficiency, water efficiency, recycling, and other strategies to drive shared cost savings that benefit both tenant and landlord. |
Healthy Building Highlights: UL Verified Healthy Building Certifications were achieved for Cira Centre in Philadelphia, and One Rodney, the first and only building in Wilmington, Delaware, to receive this certification to date. Fitwel Certifications have been achieved for 7.5 million square feet, including Cira Square in Philadelphia and 1676 International, the first Fitwel 2 certified Multi-tenant building in the state of Virginia. WELL Building Certification was achieved at our FMC Tower building at Cira Centre South in Philadelphia, earning the first Bronze level certification and the first v2 project certification in the U.S. All new construction is designed to leading healthy building standards including WELL and Fitwel, with an emphasis on indoor air quality, enhanced filtration, optimal humidity levels, and access to ample natural light and dynamic outdoor spaces. |
The Power of Partnerships
Green Building United:Our Vendors: For nearly a decade, we have partneredOur vendors are our partners in providing best-in-class work environments. The Brandywine team found creative ways to keep our vendors working throughout the pandemic with Green Building United to help foster transformative impact in Philadelphia through green building education and advocacy. Brandywine has chaired numerous committees, including the annual Philadelphia Sustainability Symposium and Green Building United’s Annual Groundbreaker Awards. Brandywine was one of the first companies in the region to commit to Green Building United’s 2030 District, which targets a 50% reduction in energy usage in the city of Philadelphia by 2030.win-win outcomes. These efforts included, but were not limited to:
The Common Market: Through our partnership with The Common Market, we have brought fresh fruits and vegetables directly to our office towers. In 2018, our tenants and employees purchased nearly 3,700 pounds of locally-sourced produce from our FMC Tower Farm Stand, which in turn, helped to create nearly 840 jobs at 19 local family-owned farms. All leftover produce was donated to our neighbors at the People’s Emergency Center of West Philadelphia.
Shifting assignments to take advantage of making building improvements during lower occupancy months |
Providing online training opportunities for vendors that needed to work from home due to childcare responsibilities or high-risk health vulnerabilities |
Through our employee-driven GoFundMe campaign, providing monetary support to our vendors who were laid off or furloughed during the pandemic |
Supporting our vendors’ right to collective bargaining and working directly with BOMA’s Building Operators Labor Relations, Inc. (BOLR) to help ensure a successful contract settlement outcome |
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Corporate Social Responsibility
At Brandywine, we believe the value in what we do, lies in the difference we can make. As such, we are committed to being good neighbors and corporate citizens in the communities in which we live and work.
Neighborhood Engagement InitiativeInclusive Development
In collaboration with a wide range of partners, Brandywine introduced an unprecedented Neighborhood Engagement Initiative as part of Schuylkill Yards, totaling a $16+ million commitment to the surrounding community. Programs include:
| Brandywine has committed to providing 50% of any affordable units required by City of Austin provisions as on-site units for the entire Uptown ATX development. In addition, at One Uptown, we are providing 100% of its affordable housing obligations on-site. |
In collaboration with a wide range of partners, Brandywine introduced an unprecedented Neighborhood Engagement Initiative as part of Schuylkill Yards, totaling a $16+ million commitment to the surrounding community. Programs include: |
Grow Philadelphia Capital Fund: through a partnership with The Enterprise Center, a non-profit lender and small business technical assistance provider, we created this fund to provide |
| Construction Apprenticeship Preparatory Program: we sponsor the Construction Apprenticeship Preparatory Program (CAPP), a |
| Local Sourcing Initiative: to assist in creating new procurement channels for West Philadelphia businesses, we make introductions between local businesses and our tenants, and fund a 10% discount for all tenants on their first purchase of goods or services from a West Philadelphia vendor. |
| CDC Co-Development: we are hiring a Community |
| Community Fund: we |
Philanthropy
Since our inception, Brandywine has partnered with an array of organizations to provide donations, funding and personnel to support the causes and advocacy that are important to both our company and our employees. Highlights of this focus include:
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Our annual Day of Caring allows Brandywine employees to support their local communities by sharing their time, talent, and dollars. |
Through our |
| In our Philadelphia office buildings, our management teams have partnered with eWaste and PAR |
Employee Engagement
Our employees are our greatest assets. They make the day-to-day operation and management of our buildings look easy. Their commitment to excellence in their everyday encounters helps us to foster a collaborative atmosphere where internal partnerships belay creativity and inspiration. As a company, we seek to embody the best practices for team cohesiveness, and do so by promoting diversity and inclusion throughout every level of the organization.
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| received ESG-specific training. To facilitate important conversations and connections between employees, we have three Affinity Teams that focus on stewarding opportunities to build leadership, promote employee engagement, and increase career success: GROW (Growth in Relationships & Opportunity for Women), Young Professionals, and Diversity, Inclusion and |
| To encourage a culture of open dialogue and provide employees with the tools to align their career development with their goals, we perform annual performance reviews that give employees an opportunity to garner formal feedback from their managers and set objectives for career growth. |
| Through our Cristo Rey partnership, Brandywine sponsors high school student internships and summer work |
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| To emphasize the importance of continuous learning, Brandywine offers a tuition reimbursement program to all |
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Corporate GovernanceGovernance
Strong corporate governance encourages accountability and transparency, as it promotes the long-term interests of shareowners, strengthens Board and Management accountability, and helps build public trust in the company.
Our commitment to good corporate governance ledhas enabled us to anmaintain our industry-leading ISS Governance Quality Score of 1 again in 2019 –2021 - representing the lowest shareholder risk and highest scoregovernance rating that can be received byfrom ISS. In addition, Brandywine continues to maintain an A Rating from MSCI ESG Research LLC.
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The below list of practices highlights our alignment with good corporate governance:governance;
Board Structure
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Trustee succession planning and Board refreshment with: |
Chair of the Board and Lead Independent Trustee transition effective at the annual meeting |
Committee membership and committee chair rotation effective at the annual meeting and |
Two of our seven Trustee nominees have tenures of five years or fewer |
Shareholder Rights
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Information about the the Meeting and Voting
How Can I Participate in the Annual Meeting?
Due to the potential travel and community gathering impacts of the coronavirus outbreak (COVID-19),This year we are moving to an onlinehave adopted a hybrid format for the annual meeting. You can access themeeting which will include an in-person meeting that will simultaneously be transmitted via a virtual annual meeting atplatform to provide a consistent and convenient experience to all shareholders regardless of location. If you cannot or do not wish to attend the meeting time at www.virtualshareholdermeeting.com/BDN2020. By hostingin person, the annual meeting online, we are able to communicate more effectively with our shareholders, enable increased attendance and participation, reduce costs and increase overall safety for both the Company and our shareholders.can be accessed via a live webcast at www.virtualshareholdermeeting.com/BDN2022. The virtual meeting has been designed to provide the same rights to participate as you would have at an in-person meeting.
If you plan to attend the annual meeting online, you will need the 16-digit control number included in your Notice of Internet Availability, on your proxy card or on the instructions that accompany your proxy materials. The annual meeting will begin promptly at 10:00 a.m. (Eastern Time). Online check-in will begin at 9:30 a.m. (Eastern Time), and you should allow ample time for the online check-in procedures.
Our Board of Trustees is soliciting your vote for:
| The election of seven Trustees, each to serve for a term expiring at the |
| Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year |
| Approval of a non-binding, advisory resolution on executive compensation. |
If any other matter should be properly presented at the annual meeting or any postponement or adjournment of the meeting for action by the shareholders, the persons named in the proxy card will vote the proxy in accordance with his or her discretion on such matter.
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What Are the Board’sBoard’s Recommendations?
Our Board recommends that you vote:
FOR the election to the Board of each of the seven nominees identified in this proxy statement, with each to serve as a Trustee for a term expiring at the | ||||
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year | ||||
FOR the approval of a non-binding, advisory resolution on executive compensation. |
Holders of common shares of beneficial interest, par value $0.01 per share, or common shares, of record as of the close of business on March 20, 202022, 2022 are entitled to notice of and to vote at the annual meeting. Common shares may be voted only if the shares are represented by proxy or in person by the record holder attending the annual meeting either in person or via webcast. As of the record date, 174,752,887171,383,912 common shares were issued and outstanding and entitled to vote.
Shareholders of Record
If you are a shareholder of record, there are several ways for you to vote your common shares at the annual meeting:
Voting by Internet | You may vote your shares through the Internet by signing on to the website identified on the proxy card and following the procedures described on the website. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote through the Internet, you should not return your proxy card. |
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Voting | If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted:
1. FOR the election to our Board of each of the seven nominees identified in this proxy statement, with each to serve as a Trustee for a term expiring at the
2. FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year
3. FOR the approval of a non-binding, advisory resolution on our executive compensation. |
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Voting by Telephone | You may vote your shares by telephone by calling toll-free 1-800-690-6903. Telephone voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote by telephone, you should not return your proxy card. | |
In Person Attendance |
| You may vote |
Live Webcast Attendance | The annual meeting will be a “hybrid” meeting of shareholders and you may vote virtually at the annual meeting. Even if you plan to attend the meeting via live webcast, we recommend that you submit your proxy card or voting instructions, or vote by telephone or the Internet by the deadline so that your vote will be counted even if you later decide not to attend the |
Beneficial Owners
IfIf you are a shareholder whose shares are held in “street name” (i.e., in the name of a broker or other custodian), you may vote the shares at the annual meeting only if you obtain a legal proxy from the broker or other custodian giving you the right to vote the shares. Alternatively, you may have your shares voted at the meeting by following the voting instructions provided to you by your broker or custodian. Although most brokers offer voting by mail, telephone and via the Internet, availability and specific procedures will depend on their voting arrangements. If you do not provide voting instructions to your broker or other custodian, your shares are referred to as “uninstructed shares.” Under rules of the New York Stock Exchange, your broker or other custodian does not have discretion to vote uninstructed shares on non-routine matters, such as Proposals 1 and 3. Your broker or other custodian does have discretion to vote your shares on Proposal 2.
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How May I Revoke oror Change My Vote
You may revoke your proxy at any time before it is voted at the Meeting by any of the following methods:
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Submitting a later-dated proxy by mail, over the telephone by calling toll-free 1-800-690-6903 or through the Internet by signing on to the website identified on the proxy card. | Sending a written notice, including by telecopy to
Brandywine Realty Trust | Attending the annual meeting in person or via webcast and voting your shares. Your attendance at the meeting will not in and of itself revoke any previously delivered proxy. You must also vote your shares at |
The holders of a majority of the outstanding common shares entitled to vote at the annual meeting must be present in person via attendance in person, by live webcast or by proxy to constitute a quorum. Unless a quorum is present at the meeting, no action may be taken at the meeting except the adjournment thereof to a later time. All valid proxies returned will be included in the determination of whether a quorum is present at the meeting. The shares of a shareholder whose ballot on any or all proposals is marked as “abstain” will be treated as present for quorum purposes. “Broker non-votes,” as discussed below, will be considered as present for determining a quorum.
A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner returns a properly-executed proxy but does not cast a vote on a particular proposal because the broker or nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner.
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What Vote Is Required to Approve Each Proposal?
Voting Rights Generally.Each common share is entitled to one vote on each matter to be voted on at the annual meeting. Shareholders have no cumulative voting rights. The advisory vote on Proposal 3 is non-binding, as provided by law. However, our Board will review the results of the vote and, consistent with our record of shareowner engagement, will take it into account in making a determination concerning executive compensation.
Election of Trustees. Our Bylaws provide that, in an uncontested election, a nominee for Trustee is elected only if such nominee receives the affirmative vote of a majority of the total votes cast for and against such nominee. The majority voting standard would not apply in contested elections, and Trustees are elected by a plurality of the votes cast in a contested election.
The majority voting standard will apply to the election of Trustees at the annual meeting. Accordingly, a nominee for election to the Board will be elected if such nominee receives the affirmative vote of a majority of the total votes cast for
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and against such nominee. Broker non-votes, if any, and abstentions will not be treated as votes cast for the election of a Trustee and will have no effect on the results of the vote, although they will be considered present for the purpose of determining the presence of a quorum.
Our Bylaws provide that a Trustee nominated for re-election who fails to receive the required number of votes for re-election must tender his or her offer to resign to our Board of Trustees for its consideration. The Corporate Governance Committee will act on an expedited basis to determine whether it is advisable to accept the Trustee’s resignation and will submit the recommendation for prompt consideration by our Board. Our Board will act on the tendered offer of resignation within 90 days following certification of the shareholder vote and will promptly and publicly disclose its decision. The Trustee whose offer of resignation is under consideration will abstain from participating in any decision regarding his or her offer of resignation. If the offer of resignation is not accepted, the Trustee will continue to serve until the next annual meeting of shareholders and until the Trustee’s successor is duly elected and qualified or until the Trustee’s earlier resignation or removal. The Corporate Governance Committee and our Board may consider any factors they deem relevant in deciding whether to accept a Trustee’s offer of resignation.
Ratification of Appointment of Independent Registered Public Accounting Firm. Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2020calendar year 2022 requires the affirmative vote of a majority of all of the votes cast on this Proposal. Abstentions and broker non-votes will therefore have no effect on the result of such vote.
Non-Binding, Advisory Vote on Executive Compensation. Approval, by non-binding vote, of our executive compensation requires the affirmative vote of a majority of all of the votes cast on this Proposal. Abstentions and broker non-votes will therefore have no effect on the result of such vote.
We have engaged Broadridge Financial Solutions, Inc. as our independent agent to receive and tabulate votes. Broadridge will separately tabulate “for” and “against” votes, abstentions and broker non-votes. We have also retained an independent inspector of elections to certify the results, report on the existence of a quorum and the validity of proxies and ballots.
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What Does it Mean if I ReceiveReceive More Than One Proxy Card?
Some of your shares may be registered differently or are in more than one account. You should vote each of your accounts by telephone or the Internet or mail. If you mail proxy cards, please sign, date and return each proxy card to assure that all of your shares are voted. If you hold your shares in registered form and wish to combine your shareholder accounts in the future, you should contact our transfer agent, Computershare, at (888) 985-2061; outside the U.S., (781) 575-2879. Combining accounts reduces excess printing and mailing costs, resulting in savings for us that benefit you as a shareholder.
What if I Receive Only One Set of Proxy Materials Although There Are Multiple Shareholders at My Address?
If you and other residents at your mailing address own common shares you may have received a notice that your household will receive only one annual report, proxy statement and Notice of Internet Availability of Proxy Materials. If you hold common shares in street name, you may have received this notice from your broker or other custodian and the notice may apply to each company in which you hold shares through that broker or custodian. This practice of sending
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only one copy of proxy materials is known as “householding.” We do this to conserve natural resources. If you did not respond to a timely notice that you did not want to participate in householding, you were deemed to have consented. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to Broadridge Householding Department, 51 Mercedes Way, Edgewood, NYNew York 11717, or by calling telephone number (800) 542-1061. The revocation of your consent to householding will be effective 30 days following its receipt. If you did not receive an individual copy of this proxy statement, our annual report and Notice of Internet Availability of Proxy Materials, we will send a copy to you, free of charge, if you address your written request to Brandywine Realty Trust, 2929 WalnutArch Street, Suite 1700,1800, Philadelphia, PAPennsylvania 19104, Attention: Shawn Neuman or by calling Mr. Neuman at (610) 832-7756. If you are receiving multiple copies of our annual report, proxy statement and Notice of Internet Availability of Proxy Materials, you may request householding by contacting Mr. Neuman in the same manner.
How Do I Submit a Shareholder Proposal for Next Year’s Annual Meeting?
Shareholder proposals may be submitted for inclusion in the proxy statement for our 20212023 annual meeting of shareholders in accordance with rules of the Securities and Exchange Commission (“SEC”). See “Other Information —- Proposals Pursuant to Rule 14a-8” later in this proxy statement. In addition, eligible shareholders are entitled to nominate and include in our proxy statement for our 20212023 annual meeting Trustee nominees, subject to limitations and requirements in our Bylaws. See “Other Information —- Proxy Access Trustee Nominees” later in this proxy statement. Any shareholder who wishes to propose any business at the 20212023 annual meeting other than for inclusion in our proxy statement pursuant to Rule 14a-8 or nominees for election as Trustees pursuant to the proxy access provisions in our Bylaws, must provide timely notice and satisfy the other requirements in our Bylaws. See “Other Information —- Other Proposals and Nominees” later in this proxy statement. Proposals should be sent via registered, certified, or express mail to Shawn Neuman, Senior Vice
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President, General Counsel and Secretary, Brandywine Realty Trust, 2929 WalnutArch Street, Suite 1700,1800, Philadelphia, Pennsylvania 19104.
Will I Receive a Copy of the Annual Report and Form 10-K?
We have furnished our 20192021 Annual Report with this proxy statement. The 20192021 Annual Report includes our audited financial statements, along with other financial information about us, and is not part of the proxy solicitation materials.
You may obtain a free copy of our Form 10-K, which also includes the audited financial statements of Brandywine Operating Partnership, L.P., our operating partnership subsidiary, by one of the following:
Accessing our Internet site at and clicking on the “Investor Relations” link | Writing to our Shawn Neuman, at 2929 | Calling Mr. Neuman at: (610) 832-7756 |
You may also obtain a copy of our Form 10-K and other periodic filings and current reports from the SEC’s EDGAR database at www.sec.gov.
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How Can I Access the Proxy Materials Electronically?
This proxy statement and our 20192021 Annual Report are available on our website at www.proxyvote.com. Instead of receiving copies of future annual reports, proxy statements, proxy cards and Notices of Internet Availability of Proxy Materials, by mail, shareholders may elect to receive an email that will provide electronic links to our proxy materials and the proxy voting site. Choosing to receive your future proxy materials or Notices of Internet Availability of Proxy Materials online will save us the cost of producing and mailing documents to you and help conserve natural resources. You may sign up for electronic delivery by visiting www.proxyvote.com.
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Proposal 1:Election Election of Trustees
We first ask that you vote to elect to our Board each of the seven persons nominated by our Board of Trustees to serve for a term expiring at the 20212023 annual meeting of shareholders and until his or her successor is duly elected and qualified. Each of the seven nominees isare currently a Trustee.Trustees. Each nominee has agreed to be named in this Proxy Statement and to serve if elected.
One of our current Trustees, Anthony A. Nichols, Sr., will be retiring from the Board at the end of his term at the annual meeting. In recognition of his service to the Company, and to continue to benefit from his counsel following his retirement, our Board has requested that, following the 2020 annual meeting, Mr. Nichols serve as Trustee Emeritus until the 2021 annual meeting of shareholders. As Trustee Emeritus, Mr. Nichols may attend Board meetings in an advisory capacity but will not vote on Board matters. As compensation for serving as Trustee Emeritus, Mr. Nichols will receive a one-time retainer, payable $45,000 in cash and $95,000 in common shares.
We have no reason to believe that any of the nominees will be unable or unwilling for good cause to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of Trustees.
Trustee Criteria, Qualifications,Experience and Tenure
We are one of the largest publicly traded, full-service, integrated real estate companies in the United States with a core focus in the Philadelphia, Washington, D.C., and Austin markets. Organized as a real estate investment trust (REIT), we own, develop, lease and manage principally an urban, town center and transit-oriented portfolio comprising 95168 properties and approximately 16.723.1 million square feet as of December 31, 2019.2021.
Our business and affairs are managed under the direction of our Board of Trustees. Our Corporate Governance Principles contain Board membership qualifications and we strive for a mix of skills, experience and perspectives that will help create a dynamic and effective Board. In selecting nominees, the Board and its Corporate Governance Committee assess the independence, character and acumen of candidates and endeavor to establish areas of core competency of the Board, including, among others, industry knowledge and experience; management, accounting and finance expertise; and demonstrated business judgment, leadership and strategic vision. Our Board values diversity of backgrounds, experience, ethnicity, gender, perspectives and leadership in different fields when identifying nominees.
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Our Board and its Corporate Governance Committee consider Trustee tenure in making Board nomination decisions and believe that it is desirable to maintain a mix of longer-tenured, experienced Trustees and newer Trustees with fresh perspectives. We also believe that longer-tenured, experienced Trustees are a significant strength of the Board, given Brandywine’s size and range of activities.
Below, we identify the key experiences, qualifications and skills our Trustee nominees bring to the Board and that the Board considers important in light of our business and industry.
| Industry Knowledge and Experience. We seek Trustees with experience as executives, directors or other leadership positions, including in commercial real estate, finance and accounting, because our success depends on acquiring, developing and leasing attractive real estate for the communities in which we have a presence, and raising and investing capital prudently to grow our portfolio with high-yielding assets. This experience is critical to the Board’s ability to understand our portfolio and business, assess our competitive position within the commercial real estate markets in which we operate, |
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Management, Accounting and Finance Expertise. We believe that an understanding of management practices, finance and financial reporting processes is important for our Trustees. We value management experience as it provides a practical understanding of organizations, processes, strategies, risk management and the methods to drive change and growth that permit the Board to identify and recommend improvements to our operations, leasing and marketing approaches and portfolio strategy. A strong understanding of accounting and finance is important for ensuring the integrity of our financial reporting and critically evaluating our performance. We currently have two Trustees who qualify as audit committee financial experts and expect all of our Trustees to be financially knowledgeable. |
| Business Judgment, Leadership and Strategic Vision. We believe that Trustees with experience in significant leadership positions demonstrate excellent business judgment, leadership skills and strategic vision. We seek Trustees with these characteristics as they bring special insights to Board deliberations and processes. We also believe that Trustees who have served as senior executives are in a position to challenge management and contribute practical insight into business strategy and operations. In addition, many of our Trustees have experience as directors or trustees of academic, research, nonprofit, and philanthropic institutions, and bring valuable perspectives from these experiences. |
| Governance Expertise. A deep understanding of a corporate board’s duties and responsibilities enhances Board effectiveness and ensures independent oversight that is aligned with shareholder interests. |
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The Board and its Corporate Governance Committee evaluate the Board’s own composition in the context of the diverse experiences and perspectives that the Trustees collectively bring to the boardroom.
Their backgrounds provide the Board with vital insights in areas such as:
Commercial | Accounting and Financial | Risk Management | ||||||||
Mergers and Acquisition | Business Administration and Operations | Governmental and | ||||||||
Marketing and Sales | Capital Deployment and Capital Markets | Executive Leadership and Talent Development | ||||||||
Tenant and Customer | Sustainability and Corporate Responsibility | Technology |
The experiences, qualifications and skills of each Trustee that the Board considered in his or her nomination are included below the Trustees’ individual biographies on the following pages. The Board concluded that each nominee should serve as a Trustee based on the specific experience and attributes listed below each Trustees’ biography and the Board’s knowledge of each nominee, including the insight and collegiality each nominee is expected to bring to the Board’s functions and deliberations.
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Annual Board Evaluation Process
The Board recognizes that a robust and constructive evaluation process is an essential part of good corporate governance and board effectiveness. The evaluation processes utilized by the Board are designed and implemented under the direction of the Corporate Governance Committee and aim to assess Board and committeeCommittee effectiveness as well as individual Trustee performance and contribution levels. The Corporate Governance Committee and full Board consider the results of the annual evaluations in connection with their review of Trustee nominees to ensure the Board continues to operate effectively.
Each year, our Trustees complete governance questionnaires and self-assessments. In addition, the Chair of the Corporate Governance Committee coordinates in-depth interviews with each of the Trustees to solicit their feedback. These questionnaires and assessments and feedback from the interviews facilitate a candid assessment of: the Board’s performance in areas such as business strategy, risk oversight, talent development and succession planning and corporate governance; the Board’s structure, composition and culture; and the mix of skills, qualifications and experiences of our Trustees.
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OurThe Board, upon the recommendation of itsthe Corporate Governance Committee, has nominated each of the seven individuals identified below for election at the annual meeting and unanimously recommends that shareholders vote FOR the election of each of the nominees as Trustee. Each nominee is currently a Trustee and each nominee has agreed to serve if elected. The Trustees have no reason to believe that any of the nominees will be unable or unwilling to be a candidate for election at the time of the annual meeting. If any nominee is unable or unwilling for good cause to serve on our Board, the persons named in the proxy will use their discretion in selecting and voting for a substitute candidate or the Board may reduce the number of Trustees. Each individual elected as a Trustee at the meeting will serve for a term expiring at the next annual meeting of shareholders and until his or her successor is elected and qualified.
NAME
| AGE | Trustee Since | CURRENT POSITION | |||
Michael J. Joyce
| 80 | 2004 | Non-Executive Chair of the Board and Trustee | |||
James C. Diggs
| 73 | 2011 | Trustee | |||
Gerard H. Sweeney
| 65 | 1994 | President, Chief Executive Officer and Trustee | |||
Reginald DesRoches
| 54 | 2021 | Trustee | |||
H. Richard Haverstick, Jr.
| 69 | 2016 | Trustee | |||
Terri A. Herubin
| 60 | 2018 | Trustee | |||
Charles P. Pizzi
| 71 | 1996 | Trustee |
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NAME | AGE | Trustee Since | CURRENT POSITION |
Michael J. Joyce | 78 | 2004 | Non-Executive Chairman of the Board and Trustee |
Gerard H. Sweeney | 63 | 1994 | President, Chief Executive Officer and Trustee |
James C. Diggs | 71 | 2011 | Trustee |
Wyche Fowler | 79 | 2004 | Trustee |
H. Richard Haverstick, Jr. | 67 | 2016 | Trustee |
Terri A. Herubin | 58 | 2018 | Trustee |
Charles P. Pizzi | 69 | 1996 | Trustee |
BRANDYWINE REALTY TRUST |
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Experience, Qualifications, Attributes and Skills
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TheThe following are biographical summaries of the individuals nominated for election at the Meeting.
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Compensation DiscussionDiscussion and Analysis
This Compensation Discussion and Analysis (CD&A) describes our executive compensation programs, including the oversight of such programs by our Compensation Committee and the rationale and processes used to determine the compensation for the company’s named executive officers (“NEOs”) and provides a detailed description of those programs. This CD&A, which may include forward-looking statements, should be read together with the compensation tables and related disclosures that follow this section.
This discussion focuses on the compensation provided to the company’sCompany’s NEOs during 2019,2021, who were:
Name
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Gerard H. Sweeney | President and Chief Executive Officer | |||||
Thomas E. Wirth | Executive Vice President and Chief Financial Officer | |||||
H. Jeffrey DeVuono | Executive Vice President, Senior Managing Director | |||||
George D. Johnstone | Executive Vice President, Operations | |||||
William D. Redd | Executive Vice President and Senior Managing Director |
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I. | Executive Summary |
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II. |
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| Oversight of Executive Compensation |
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| Additional Executive Compensation Policies and Practices | 57 |
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Compensation Elements
In 2019,2021, the three key elements of our pay program continued to be base salary, annual cash incentive tied to key operational and strategic goals and long-term incentive awards linked to our common stock.shares. This summary discusses compensation highlights from 2019. 2021.
20192021 Brandywine Performance
Austin, Texas | ||||||
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Completed the refinancing of our mixed-use project at 4040 Wilson Boulevard in Arlington, Virginia totaling approximately $150 million. We own 50% of the property through a joint venture. |
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University City | ||||
Commenced Schuylkill Yards West; our first ground-up development at Schuylkill Yards totaling approximately $287 million. The mixed-use project consists of approximately 200,000 square feet of life science/innovation space, 326 apartment units and 9,000 square feet of retail space. We own 55% of the project through a
B.Labs at Cira Centre; completed a 50,000 square foot life science incubator in | ||||
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Collected approximately 99% of total cash-based rent due from tenants during 2021 Conducted several community outreach programs | Continued upgrading our building systems Continued to maintain our doors open/lights on policy throughout our entire portfolio during 2021 |
Key 20192021 Executive Compensation Actions
Annual Incentives. Consistent with prior years, the corporate scorecard used for our 20192021 annual incentive plan was tied to goals relating to our operations (20%), leasing (30%) and capital investments and balance sheet strength (50%) as well as. Performance goals for the individual performance2021 scorecard were established in the first quarter of our executives. As a result2021. Performance against the scorecard was achieved at 132% of the Company’s strong performance against goals in each of these measurement categories, the corporate financial performance provided for awards at 110% of target award levels. When taken into account with business unit, regional and/or individual goals, NEO annual incentives paid out at 110% of target awards.target.
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Long-Term Incentives. Our long-term incentive plan is designed to align management and shareholder interests, drive long-term value creation, and attract and retain key executive talent. For 2019, 2021, one-third of a NEO’s annual long-term incentive opportunity iswas delivered in the form of restricted share rights that vest in equal proportions over three years. These 20192021 restricted shares rights also hadhave an outperformance modifierfeature attached that could increase the original award up to 200% based on Brandywine’s achievement of superior results for same-store net operating incomeaverage funds from operations (FFO) growth and developmentaggregate investment activity, weighted equally, during the three-year period ending December 31, 2021. 2023. Two-thirds of a NEO’s annual long-term incentive opportunity iswas delivered in the form of performance share units (“PSUs”) that may be earned based on our three-year total shareholder return versus the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index (the “Index Companies”). In 2019, we changed the performance measurement group for PSUs to focus solely on the FTSE NAREIT Equity Office Index to more precisely measure our performance against other companies that operate in our sector while also simplifying our plan design and administration. In prior years, PSUs were based on our three-year total shareholder return versus the component members (excluding ourselves) of the S&P US REIT Index, weighted at 50% of the PSU award opportunity and (ii) our peer group of companies, also weighted at 50% of the PSU award opportunity.Index.
CEO Compensation. For the 2017-2019 performance period, our 12.5% total shareholder return ranked at the 40th percentile of the S&P US REIT Index and at the 49th percentile of our peer group companies, resulting in a payout at 89% of target.
CEO Compensation. For 2019,2021, the Compensation Committee made no change to Mr. Sweeney’s base salary of $750,000 or target annual incentive of 200% of base salary. To better align Mr. Sweeney’s target total compensation with market levels, the Compensation Committee increased Mr. Sweeney’s target long-term incentive opportunity from 300%425% of base salary to 325%450% of base salary. As a result of this adjustment, Mr. Sweeney’s target total compensation increased from $4,500,000$5,437,500 to $4,687,500.$5,625,000.
2019
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2021 Say on Pay Vote. The Company values shareholder perspectives on our executive compensation program. As part of the Compensation Committee’s annual review of the program, it considers the outcome of the Company’s annual shareholder advisory vote (“say-on-pay”) on the compensation of the Company’s NEOs. Approximately 89%97% of the advisory votes cast in 20192021 were in favor of our executive compensation program. The Compensation Committee believes that this vote is indicative of our shareholders’ support of our executive compensation program. The Compensation Committee will continue to consider shareholder feedback and the outcome of the Company’s say-on-pay votes when making future NEO compensation decisions.
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Our Compensation Committee oversees and administers the Company’s executive compensation program. Our executive compensation program is designed to support our performance-based culture and the creation of value for our shareholders. The Compensation Committee is guided by the following key principles when making compensation-related decisions:
| Encourage the achievement of annual and long-term business and human resource objectives that support the creation of shareholder value; |
| Attract, retain, and motivate top caliber talent; |
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The elements of the Company'sCompany’s compensation program, when considered collectively, are intended to support our executive compensation philosophy and objectives by (i) allowing us to attract and retain executive-level talent, (ii) providing an appropriate level of financial certainty through non-variable compensation, (iii) providing opportunities for above market compensation based upon the achievement of specified financial and other appropriate performance objectives, and rewarding such achievement, and (iv) balancing short-term and long-term incentives. The key elements of our executive compensation program are outlined below, together with a summary of the purposes and considerations underlying each compensation element.
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Pay Element |
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| Philosophy | Performance Alignment | ||
Base Salary | Cash |
Fixed pay to recognize an |
Reviewed annually and set based on competitiveness versus the external market, individual performance, and internal equity | |||
Annual Incentive | Cash |
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Rewards and recognizes
Payout based primarily on Corporate performance
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Long-Term Incentives | Performance |
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Align NEOs’ interests with shareholders |
Increase in share price Achievement of multi-year strategic business objectives |
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IV.II. Executive CompensationCompensation Best Practices
The Compensation Committee regularly reviews best practices in executive compensation and governanceand has revised our policies and practices over time. A listing of “what we do” and “what we don’t do” is presented below:
What We Do | What We Don’t Do | |||
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Pay for Performance:Majority of pay is performance based and not guaranteed
Multiple Performance Metrics and Time Horizon:Use multiple performance metrics focusing on top line and bottom line growth and multi-year vesting and measurement periods for long term incentives
Annual Compensation Risk Review:Annually assess risk in compensation programs
Share Ownership Guidelines:NEOs must comply with share ownership requirements
Clawback Policy:We maintain a clawback policy that provides for recovery of incentive compensation in the event of a financial restatement due to material non-compliance with federal securities laws and without regard to misconduct
Challenging Performance Objectives:Set challenging performance objectives for Annual Incentives
Use of Independent Consultant:The Compensation Committee has retained an independent compensation consultant that performs no other consulting services for the Company and has no conflicts of interest |
No Repricing or Buyouts of Stock Options:
No Perquisites:
No Hedging or Pledging: NEOs |
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V.III. Oversight of ExecutiveExecutive Compensation
Committee Authority
Our Compensation Committee’s responsibilities include:
| Approving the goals and objectives relating to our President and Chief Executive Officer’s compensation, evaluating the performance of our President and Chief Executive Officer in light of such goals and objectives, and setting the compensation of our President and Chief Executive Officer based on this evaluation; |
| Approving the salaries and annual incentive awards of our other executive officers either (i) with the title Executive Vice President, (ii) with the title Senior Vice President or Vice President, in either case who hold a position as Managing Director, Chief Financial Officer, General Counsel or Chief Administrative Officer or (iii) who report directly to our President and Chief Executive Officer, taking into account the recommendation of our President and Chief Executive Officer and such other information as the Committee believes appropriate; |
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Administering our equity incentive plans, including granting equity-based awards under these plans and determining the terms of such awards; |
| Retaining and terminating, in its sole discretion, third party consultants to assist in the evaluation of Trustee and executive compensation (with sole authority to approve any such consultant’s fees and other terms of engagement); and |
| Assessing the appropriate structure and amount of compensation for our Trustees. |
Our Compensation Committee’s charter does not authorize the Compensation Committee to delegate any of its responsibilities (including authority to grant equity-based awards) to other persons, and the Compensation Committee has not delegated any of its responsibilities to other persons.
Compensation Consultants
Our Compensation Committee recognizes the importance of objective, independent expertise and advice in carrying out its responsibilities. For 2019, theThe Compensation Committee retainedcontinues to retain Pay Governance LLC as its consultant. Our Compensation Committee selected Pay Governance as consultantsits consultant because of its expertise and reputation. Neither we nor our Trustees or executive officers have any affiliation with Pay Governance or its executives and the engagement and scope of servicesdirection of Pay Governance have been solely through our Compensation Committee.
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During 2019,2021, our compensation consultants advised our Compensation Committee on executive compensation matters, plan design, industry trends and practices, and our pay-for performance alignment, including as measured relative to peers and relative to our total shareholder returns. As directed by the Committee, the consultants prepared analyses for the Committee relating to all aspects of the compensation of our executives. They advised the Committee on market practices regarding executive compensation, including annual incentive awards and long-term incentive pay, and reviewed our peer group and the market positioning of the compensation provided to our current NEO’sNEOs and other senior executives. The consultants meet privately with the Committee and individual Committee members from time to time to plan for Committee meetings and discuss executive compensation matters. Pay Governance does not provide other services to us.
Our Compensation Committee received a letter from Pay Governance regarding its independence and assessed the independence of Pay Governance under New York Stock Exchange rules and concluded that Pay Governance’s work for the Committee does not raise any conflict of interest. Factors considered by the Committee include: (i) whether other services are provided to us by Pay Governance or its representatives; (ii) the amount of fees received by Pay Governance from us as a percentage of Pay Governance’s total revenue; (iii) policies of Pay Governance designed to prevent conflicts of interest; (iv) the absence of any business or personal relationship of representatives of Pay Governance or its representatives with a member of the Committee; (v) whether Pay Governance or its advisors to the Committee own any of our securities; and (vi) whether Pay Governance or its representatives have any business or personal relationship with any of our executive officers.
Role of Executives
Our Compensation Committee seeks the views of our President and Chief Executive Officer in setting and administering our executive compensation programs. In particular, at the beginning of each year, Mr. Sweeney oversees the development of proposed corporate business unit/regional and individual goals for purposes of annual incentive compensation. These goals are derived from our corporate business plan and include both quantitative measurements and qualitative considerationsare selected to reinforce and enhance achievement of our operating and growth objectives. The Compensation Committee reviews these goals with Mr. Sweeney, adopts revisions it deems appropriate and determines the final goals for compensation.
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Following the end of each year, Mr. Sweeney reviews with the Compensation Committee, at several meetings, the achievement of corporate business unit/regional and individualperformance goals and the performance of each other current named executive officer and presents his evaluation of such executive officer’s performance to the Committee. Decisions about individual compensation elements and total compensation are made by the Committee, using its judgment, focusing primarily on each current named executive officer’s performance against the officer’s performance goals as well as our overall performance. With respect to the non-quantitative performance measures applicable to our executives, the Committee relies heavily on the views of Mr. Sweeney (other than as to himself). As President and Chief Executive Officer, Mr. Sweeney oversees the day to dayday-to-day performance of the other current named executive officers. As such, our Compensation Committee believes that he is well positioned to evaluate their performance and make recommendations as to their overall compensation.
In addition to the role played by our President and Chief Executive Officer, our other executive officers furnish such industry data and legal and financial analyses as the Committee requests from time to time.
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VI.2019 ExecutiveIV. 2021 Executive Compensation
Use of Peer Group Data
Our Compensation Committee, in consultation with its compensation consultant, developed a peer group as a frame of reference for our executive compensation. Our Compensation Committee selects companies for inclusion in the peer group that primarily acquire, sell, develop, lease and manage sizeable office real estate portfolios. In selecting companies, the Committee also considers their equity and total capitalization and geographic location as well as third party considerations (for example, where members of the financial community treat a particular company as being a Company peer). Our Compensation Committee has not selected or excluded companies from the peer group on account of their compensation practices. Our Compensation Committee believes that peer group data are an indicator of compensation opportunities at companies that might recruit our executives and the data therefore help the Committee set compensation at competitive levels. Our Compensation Committee also believes that peer group data provide perspective on performance measurement practices and linkages between pay and performance. The Committee does not set specific pay targets or otherwise engage in formal “benchmarking” of compensation of our executives against executives at peer group companies. The Committee does, however, attempt to set total compensation for each current named executive near the middle of the peer group data while allowing for the possibility of greater or lesser compensation based upon our corporate and individual performance.
Our Compensation Committee reviews our peer group at least annually. Following the completion of our annual peer group review for 2019,2021, the Compensation Committee removed Liberty Property Trust frommade no changes to the peer group used for 2019 due to its shiftuse in portfolio to industrial assets. Additionally, Tier REIT merged with Cousins Properties in June 2019. Accordingly, our peer group for our 2019 awards comprised the following companies:competitive pay studies, which included:
| Columbia Property Trust Inc.(1) |
| ● | Hudson Pacific Properties, Inc. | ||
| Corporate Office Properties Trust Inc. |
| ● | Kilroy Realty Corp. | ||
| Cousins Properties Inc. |
| ● | Mack-Cali Realty Corporation | ||
| Douglas Emmett, Inc. |
| ● | Paramount Group, Inc. | ||
| Empire State Realty Trust, Inc. |
| ● | Piedmont Office Realty Trust Inc. | ||
| Equity Commonwealth |
| ● | Washington Real Estate Investment Trust | ||
| Highwoods Properties, Inc. |
(1) | Columbia Property Trust Inc. ceased to be public in September 2021 and is longer be part of the peer group. |
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Base salary represents the fixed portion of an executive’s compensation and provides a regular stream of income and financial security. In setting base salaries, our Compensation Committee considers the responsibilities, skills, experience and performance of the executives and relies heavily on the views of our President and Chief Executive Officer as to the impact, contribution and expertise of our executives (except in the case of himself and his compensation). In setting base salaries, our Compensation Committee also considers the linkage of base salaries to the elements of our compensation that are tied to base salaries (such as severance and change in control benefits and annual and long-term incentive targets that are computed as a multiple of base salary). As part of the annual compensation process, the Committee may adjust base salaries to reflect changes in market data or in an executive’s responsibilities, skills, experience and performance.
For 2019,2021, the base salaries of our current NEOs were adjustedunchanged, as reflected in the table below:
Name | 2018 Base Salary | 2019 Base Salary | % Increase | 2020 Base Salary | 2021 Base Salary | % Increase | |||
Gerard H. Sweeney | $750,000 | $750,000 | 0% | $750,000 | $750,000 | 0% | |||
Thomas E. Wirth | $425,000 | $450,000 | 5.8% | $455,000 | $455,000 | 0% | |||
H. Jeffrey DeVuono | $400,000 | $410,000 | 2.5% | $415,000 | $415,000 | 0% | |||
George D. Johnstone | $358,750 | $367,000 | 2.3% | $375,000 | $375,000 | 0% | |||
William D. Redd | $346,000 | $375,000 | 8.4% | $380,000 | $380,000 | 0% |
Annual Incentive Awards
Annual incentive awards are designed to reward executives for achievement of annual performance goals linked to the achievement of our annual company goals. Each year our Compensation Committee establishes a target amount for annual incentive awards for each executive, with the target amount expressed as a percentage of the executive’s base salary. The targeted amounts take into account all factors that the Committee deems relevant, including the input of Pay Governance as to competitive compensation levels, the recommendation of our President and Chief Executive Officer (except with respect to his own target), responsibilities of the executives and the Committee’s view of market conditions.
20192021 target percentages for annual incentive awards for NEOs were as follows:follows (which were unchanged from 2020 target percentages):
|
| |||
Name | 2021 Target Award as a % of Base Salary | |||
Gerard H. Sweeney | 200% | |||
Thomas E. Wirth | 100% | |||
H. Jeffrey DeVuono | 100% | |||
George D. Johnstone | 100% | |||
William D. Redd | 100% |
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2022 PROXY STATEMENT |
2021 Annual Incentive Performance Goals and Outcomes
Payouts under the 2021 annual incentive awards for 2019 were computedare determined primarily on the basiswith reference to our achievement of corporate performance goals related to operations, leasing and capital management. We refer to this array of performance within three categories and reflectedgoals as our “corporate scorecard.” The scorecard is established by the Compensation Committee annually, in a “scorecard”: corporate, business unit/regional and individual. The “corporate” and “business unit/regional” categories include performance measures that are derived from, or that seek to reinforce, our annual corporate business plan developed by our Board of Trustees and senior management. The “individual” category is tied to non-quantitative individual goals, including corporate initiatives, social/community activities and departmental leadership. Measurement of performance for this category is subjective. Annual incentive awards for 2019 performance were payable during the first quarter of 2020 basedyear. The 2021 scorecard is shown below, including actual performance outcomes and the resulting payout percentages.
Payout Range | 85% | 100% | 175% | |||||||||||||||||||||||||
Performance Measure
| Minimum
| Target
| Maximum
| Actual Performance
| % of Target Achieved
| % Weighting (of 100%)
| Weighted Achievement
| |||||||||||||||||||||
OPERATIONS (20% WEIGHTING) | ||||||||||||||||||||||||||||
FFO(1) | $1.32 | $1.37 | $1.42 | $1.37 | 100% | 6.67% | 6.67% | |||||||||||||||||||||
Cash Available for Distribution, as adjusted (CAD)(2) | $0.93 | $0.98 | $1.03 | $0.99 | 115% | 6.67% | 7.67% | |||||||||||||||||||||
Same Store (accrual-based) NOI Growth(3) | 0.0% | 1.0% | 2.0% | 0.4% | 91% | 6.67% | 6.07% | |||||||||||||||||||||
20.00% | 20.40% | |||||||||||||||||||||||||||
LEASING (30% WEIGHTING) | ||||||||||||||||||||||||||||
Spec Revenue Achievement ($MM) | $18.0 | $19.0 | $20.0 | $21.0 | 175% | 10.00% | 17.50% | |||||||||||||||||||||
Year-End Leased | 92.0% | 93.0% | 94.0% | 93.0% | 100% | 10.00% | 10.00% | |||||||||||||||||||||
Revenue Maintaining Capital (% lease revenue)(4) | 12.0% | 11.0% | 10.0% | 11.0% | 100% | 10.00% | 10.00% | |||||||||||||||||||||
30.00% | 37.50% | |||||||||||||||||||||||||||
CAPITAL (50% WEIGHTING) | ||||||||||||||||||||||||||||
Aggregate Investment Activity ($MM) | $691.0 | $741.0 | $791.0 | $771.0 | 145% | 12.50% | 18.13% | |||||||||||||||||||||
Generate two development / redevelopment starts | 2 Starts | 3 Starts | > 3 Starts | 3 Starts | 100% | 12.50% | 12.50% | |||||||||||||||||||||
Net Debt / EBITDA*(5) | 6.7x | 6.6x | 6.5x | 6.5x | 175% | 12.50% | 21.88% | |||||||||||||||||||||
Interest Coverage Ratio* | 3.9x | 4.0x | 4.1x | 4.2x | 175% | 12.50% | 21.88% | |||||||||||||||||||||
50.00% | 74.38% | |||||||||||||||||||||||||||
* Represents annualized fourth quarter metric. |
| Formulaic Outcome: | 132.28% | |||||||||||||||||||||||||
CEO Recommendation: | 130.00% | |||||||||||||||||||||||||||
Committee-Approved Payout to NEOs: | 130.00% |
(1) We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the NAREIT definition, or that interpret the NAREIT definition differently than we do. NAREIT defines FFO as net income (loss) before non-controlling interests of unit holders (preferred and common) and excluding gains (losses) on 2019 performance.sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures and extraordinary items (computed in accordance with GAAP); plus real estate related depreciation and amortization (excluding amortization of deferred financing costs), and after similar adjustments for unconsolidated joint ventures. Net income, the GAAP measure that we believe to be most directly comparable to FFO, includes depreciation and amortization expenses, gains or losses on sales of depreciable operating property, impairment losses on depreciable consolidated real estate, impairment losses on investments in unconsolidated real estate ventures, extraordinary items and non-controlling interests. To facilitate a clear understanding of our historical operating results, FFO should be examined in conjunction with net income (determined in accordance with GAAP) as presented in the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021. FFO does not represent cash flow from operating activities (determined in accordance with GAAP) and should not be considered to be an alternative to net income (loss) (determined in
The table below sets forth
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BRANDYWINE REALTY TRUST |
accordance with GAAP) as an indication of our financial performance or to be an alternative to cash flow from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions to shareholders.
(2) Cash available for distribution, or CAD, is a non-GAAP financial measure that is not intended as an alternative to cash flow from operating activities as determined under GAAP. CAD is presented in our investor presentations solely as a supplemental disclosure with respect to liquidity because we believe it provides useful information regarding our ability to fund our distributions. Because other companies do not necessarily calculate CAD the relative weightingssame way as we do, our presentation of CAD may not be comparable to similarly titled measures provided by other companies. For purposes of the scorecard, our Compensation Committee adjusts CAD to reflect intra-year capital markets and other transaction activity not taken into account in the initial scorecard metric.
(3) NOI, or net operating income, is a non-GAAP financial measure equal to net income available to common shareholders, the most directly comparable GAAP financial measure, plus corporate general and administrative expense, depreciation and amortization, interest expense, non-controlling interests and losses from early extinguishment of debt, less interest income, development and management income, gains from property dispositions, gains on sale from discontinued operations, gains on early extinguishment of debt, income from discontinued operations, income from unconsolidated joint ventures and non-controlling interests. In some cases, we also present NOI on a cash basis, which is NOI after eliminating the effect of straight-lining of rent and deferred market intangible amortization. NOI presented by us may not be comparable to NOI reported by other REITs that define NOI differently. NOI should not be considered an alternative to net income as an indication of our performance, or as an alternative to cash flow from operating activities as a measure of our liquidity or ability to make cash distributions to shareholders. Our same store portfolio generally consists of those properties that we owned for the entirety of each of the corporate, business unit/regional and individual categories used inperiods being compared, but for purposes of the scorecard, our Compensation Committee adjusted the same store portfolio to exclude termination fees, bad debt expense and other income. Refer to Appendix A to this proxy statement for 2019. The weightings reflect the different roles and responsibilitiesa reconciliation of our 2021 same store NOI to our 2021 net income available to common shareholders.
(4) Revenue maintaining capital expenditures are a component of our CAD calculation and represent the portion of capital expenditures required to maintain our current NEOs.
Name | Corporate | Business Unit / Regional | Individual |
Gerard H. Sweeney | 80% | 0% | 20% |
Thomas E. Wirth | 50% | 40% | 10% |
H. Jeffrey DeVuono | 30% | 60% | 10% |
George D. Johnstone | 40% | 50% | 10% |
William D. Redd | 30% | 60% | 10% |
With respect to corporatelevel of cash available for distribution. Revenue maintaining capital expenditures include current tenant improvement and business unit/regional goals, the Committee sets a threshold, targetallowance expenditures for all tenant spaces that have been owned for at least one year, and maximum payout shortly after the beginning of each year or as soon as practicable thereafter. If we or the executivethat were not vacant during the twelve-month period prior to achieve the threshold (minimum) performance fordate that the applicable component, then the executive would not receive any payout for that component. Iftenant improvement or allowance expenditure was incurred. Revenue maintaining capital expenditures also include other expenditures intended to maintain our current revenue base. Accordingly, we or the executive wereexclude capital expenditures related to achieve the threshold (minimum) performance,development and no higher than the threshold for the applicable component, then the executive would receive 85% of the target payout for that component. If we or the executive were to achieve the target, and no higher than the target for the applicable component, then the executive would receive 100% of the target payout for that component. If we or the executive were to exceed target in a particular area, then the executive may be awarded up to 175% of the relevant component. Accordingly, an executive’s opportunity in respect of a given component ranges from zero (0) to 175% of target.
Following the end of each year, our President and Chief Executive Officer reviews with the Compensation Committee achievements relative to corporate, business unit/regional and individual performance objectivesredevelopment projects, as well as certain projects at our performance comparedcore properties that are intended to our business plan for the prior year and submits recommendations for annual incentive awards based on his assessmentattract prospective tenants in order to increase revenues and/or occupancy rates.
(5) Ratio of our overall and individual achievements. The Compensation Committee analyzes the recommendations and has unrestricted authorityNet Debt to modify them.
The Committee’s framework for administering the corporate scorecard expressly affords the Committee the opportunity to adjust the results of the scorecard upward or downward by 25% to reflect strategic accomplishments as well as our performance with respect to metrics selected by the Committee relative to peer company performance with respect to these metrics. In determining whether to make any such adjustments, the Committee exercises judgment and discretion as to the strategic accomplishments and metrics and the weight assigned to any such accomplishments and metrics.
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In early 2020 the Committee reviewed the Company’s performance with respect to the established operational, leasing, andEBITDA excludes capital criteria established by the Committee. A summary of the Company’s performance against the specific criteria in these categories is presented below.market transaction items.
Performance Measure | Minimum | Target | Maximum | Actual Performance | Payout Percentage |
OPERATIONS (20% WEIGHTING) |
|
|
|
|
|
FFO1 | $1.37 | $1.42 | $1.47 | $1.43 | 118% |
Cash Available for Distribution, as adjusted (CAD)2 | $0.86 | $0.94 | $1.04 | $1.07 | 175% |
Year-End Occupancy | 94.0% | 94.5% | 95.5% | 94.5% | 100% |
Same Store Cash NOI Growth3 | 1.0% | 2.0 | 3.00% | 1.5% | 93% |
LEASING (30% WEIGHTING) |
|
|
|
|
|
Spec Revenue Achievement | $33.0 MM | $33.5 MM | $34.5 MM | $33.8 MM | 123% |
Year-End Leased | 95.0% | 95.5% | 96.0% | 96.3% | 175% |
Revenue Maintaining Capital (% lease revenue)4 | 14.5% | 14.0% | 13.5% | 14.5% | 85% |
CAPITAL (50% WEIGHTING) |
|
|
|
|
|
Core Sales / JV Activity ($MM) | $100 | $150 | $200 | $68 | 0% |
Acquisitions | $50 | $100 | $150 | $2 | 0% |
Generate one land development start | none | 1 Start | 2 Starts | 1 Start | 100% |
Leverage Target (Debt / Gross Asset Value) | 40.3% | 39.8% | 39.0% | 41.4% | 0% |
Net Debt / EBITDA* | 6.3x | 6.2x | 6.0x | 6.1x | 138% |
Fixed Charge Ratio* | 3.7x | 4.0x | 4.3x | 3.7x | 85% |
* Represents annualized fourth quarter metric.
|
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2020 PROXY STATEMENT
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|
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|
The foregoing include various non-GAAP measures. Please see Appendix A for reconciliation of those measures to our published financial statements.
2019 Annual Incentive Business Unit/Regional Goals
As noted above, fourOur annual incentive program reserves to the Compensation Committee the right to adjust the overall corporate scorecard outcome upward or downward by 25% to reflect the Compensation Committee’s subject evaluation of our current NEOs receivedperformance in matters such as strategic accomplishments or our performance relative to peer companies. The annual incentive awardsprogram reserves to the Compensation Committee the right to adjust any individual NEO’s annual incentive payout, based in part uponon the Compensation Committee’s subjective evaluation of that executive’s individual performance and/or the performance of their respective business units or regions. Because each of Messrs. DeVuono and Redd oversee specific geographic regions of our operations, the performance metrics for the business unit/regional portion of their scorecards include region-specific operational performance measures tied to leasing revenues, capital cost controls, same store net operating income, occupancy levels and lease renewals. The business unit/regional performance measures for our other two current NEOs with business unit/regional goals are non-quantitative and the measurement of achievement involves judgment and subjectivity. The 2019any business unit, performance measures for Mr. Johnstone, our Executive Vice President, Operations, related to quality and timeliness of our operational reporting system and oversight of our leasing and internal capital allocation processes. The 2019 business unit performance measures for Mr. Wirth, our Executive Vice President and Chief Financial Officer, were tied to (i) quality and timeliness of our financial reporting; (ii) operational efficiencies and process improvement; (iii) corporate controls and support of our internal audit group; and (iv) sourcing of new debt and equity capital.
2019 Annual Incentive Individual Goals
Individual goals for our executive officers are tied to executive leadership and managerial performance and are evaluated on a subjective basis annually. These goals are intended to move our company and the individual executive’s business unitfunction or region forward in terms of organizational structure, improve on such practices as collaboration among business units or enterprise-wide thinking and address development of junior executives and succession planning. Individualmanaged by that executive. Mr. Sweeney’s performance for Mr. Sweeney is determinedevaluated solely by the Compensation Committee. The Committee also determinesevaluates the individual performance for theof other current NEOs after receiving recommendations from Mr. Sweeney. None ofWhile the individual goals included quantitative measures, and our Compensation Committee assigned no specific weightingdoes not often make significant discretionary adjustments to any of these goals, but rather assessed overall
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achievement levels in determiningindividual annual incentive awards. Individual goals for Mr. Sweeney in 2019 included (i) providing ongoing strategic leadership; (ii) proactive managementpayouts, the Compensation Committee views its discretionary authority as a tool to ensure individual accountability.
2021 Annual Incentive Payouts
After reviewing the corporate scorecard results, our performance more generally, the performance of sourcesindividual executives and uses of capital, including oversightthe recommendations of our portfolio allocation goals; and (iii) active management of career development of high potential officers within our company.
2019 Annual Incentive Final Award Payouts
Based on its review of Company, business unit, and individual performance against the scorecard measures and goals,CEO, the Compensation Committee approved a payout of 110% of target for our NEOs. The final2021 annual incentive payouts forto each NEO to bein the amounts shown in the table below. The approved amounts were paid in cash were as follows:to each NEO in the first quarter of 2022.
| 2019 ANNUAL INCENTIVE FINAL PAYOUT | |
Name | Cash Amount | Total Payout |
Thomas E. Wirth | $495,000 | 110% |
H. Jeffrey DeVuono | $451,000 | 110% |
George D. Johnstone | $403,000 | 110% |
William D. Redd | $412,000 | 110% |
2019 President and Chief Executive Officer Annual Incentive Award
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51 |
As discussed above, our Compensation Committee approves the performance goals for our President and Chief Executive Officer each year following review of our annual business plan and key objectives for that year. For 2019, 80% of the annual incentive award opportunity for Mr. Sweeney was tied to “corporate” performance measures (with the components and targets identified above) and 20% reflected the Compensation Committee’s assessment of Mr. Sweeney’s leadership of our company and strategic vision. After a review of overall performance, the Compensation Committee determined that Mr. Sweeney’s individual performance should be aligned with the financial performance of the Company, and therefore established his 2019 annual incentive at 110% of the target level, or $1,650,000.
2022 PROXY STATEMENT |
2021 ANNUAL INCENTIVE FINAL PAYOUT
| ||||
Name
| Cash Amount
| Total Payout % of Target
| ||
Gerard H. Sweeney
| $1,950,000 | 130% | ||
Thomas E. Wirth
| $591,500 | 130% | ||
H. Jeffrey DeVuono
| $540,000 | 130% | ||
George D. Johnstone
| $487,500 | 130% | ||
William D. Redd
| $494,000 | 130% |
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2020 PROXY STATEMENT
Equity-Based Long-Term Incentive Compensation
Consistent with our compensation objectives, our equity-based long-term incentive program is designed to assist us in attracting and retaining high quality executives, while tying a significant portion of compensation to our financial performance, principally in the case of this program to our total shareholder return. For the awards made in February 2019,2021 and consistent with prior year practice, the Compensation Committee, after consultation with Pay Governance, determined target long-term incentive award values for each executive officer as set forth below:
Name |
2021 TARGET LTI AWARD AS A % OF BASE | |||
Gerard H. Sweeney |
| 450% | ||
Thomas E. Wirth |
| 240% | ||
H. Jeffrey DeVuono |
| 200% | ||
George D. Johnstone |
| 200% | ||
William D. Redd |
| 200% |
**Does not include the special two-year restricted share rights award granted in 2019 in respect of 2018 performance, as discussed in our Compensation Discussion and Analysis last year.
20192021 Long-Term Incentive Plan Design
Consistent with prior years, equity-based awards for executive officers in 20192021 are intended to address both the long-term performance and retention objectives of our equity compensation philosophy, delivered as follows:
| Equity-based long-term incentive awards are delivered as a mix of two-thirds performance share units (“PSUs”) and one-third time-vesting restricted share rights |
| PSUs which may be earned based on our three-year total shareholder return relative to the component members (excluding ourselves) of the FTSE NAREIT Equity Office Index. If the Company’s total shareholder return during the measurement period is negative, the maximum number of PSUs that may be earned notwithstanding relative to total shareholder return achievement above the target level is limited to 100% of the target level |
| Restricted share rights generally vest in equal proportions over three years subject to continued employment with the Company; which the Committee believes enhances executive officer retention. Dividends are paid on restricted shares over the vesting period. |
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Awards are subject to accelerated vesting or settlement upon death, disability, involuntary termination or qualifying retirement, as further described below under “Vesting and Forfeiture Provisions” |
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20192021 Restricted Share Rights Outperformance Modifier
As a new feature for 2019, theThe restricted shares right awards includedinclude an outperformance modifier that can increase the original award up to 200% based on Brandywine’s achievement of superior results for same-store net operating incomeaverage funds from operations (FFO) growth and developmentaggregate investment activity, weighted equally, during the three-year period ending December 31, 2021.2023. These goals are intentionally ambitious and their achievement was not considered probable on the date of grant.
Half of any additional shares earned under this outperformance feature will vest based on continued service through each of January 1, 20222024 and January 1, 2023,2025, provided that this additional service requirement will be waived in the event of a death, disability or qualifying retirement. In the case of death, disability or qualifying retirement prior to December 31, 2021,2023, the opportunity to earn additional shares under the outperformance feature will remain in effect, but the number of additional shares earned at the conclusion of the performance period (if any) will be pro-rated to reflect the fraction of the performance period actually worked.
Dividend equivalents on any additional shares earned under the outperformance feature will be payablecredited in cash, but only with respect to dividends paid following the end of the applicable performance period.period and will be subject to the same vesting and payment terms as the shares to which they relate.
2019-20212021-2023 Performance Share Unit Award Terms
In 2019, we changedOur PSUs may be earned based on the performance measurement group for PSUspercentile rank of our three-year total shareholder return relative to focus solely onthe other members of the FTSE NAREIT Equity Office Index to more precisely measure our performance against other companies that operate in our sector while also simplifying our plan design and administration. Prior to 2019, PSUs were based on our three-year total shareholder return versus (i) the component members (excluding ourselves) of the S&P US REIT Index, weighted at 50% of the PSU award opportunity and (ii) our peer group of companies, also weighted at 50% of the PSU award opportunity.
Index. The payout schedulescale for the 2019-20212021-2023 performance period is presented below and is unchanged from the 2018-20202020-2022 program:
Percentile Rank | PSU Payout % | |||||
75th Percentile and above | 200% | |||||
50th Percentile | 100% | |||||
25th Percentile | 50% | |||||
Below | 0% |
DividendFor PSUs granted in 2021, dividend equivalents are credited in respect of outstanding PSUs in the form of additional PSUs, based on the fair market value of our shares on the dividend payment date, and such additional PSUs are subject to the same performance vesting criteria as the original PSUs.
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2020 PROXY STATEMENT
Vesting and Forfeiture Provisions
Equity awards that remain unvested upon the holder’s termination of employment with us will vest or be forfeited depending on the reason for the termination. The table below, as supplemented by the notes to the table, summarizes these provisions:
Reason for Termination | Effect on Awards | |
Voluntary Termination by Executive not | ● Forfeit |
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2022 PROXY STATEMENT |
Change in Control | ● Early measurement for outperformance component of restricted common share awards (“outperformance shares”), with earned outperformance shares remaining subject to time vesting requirements ● Early measurement and payout for PSUs ● Restricted common shares (including any earned but unvested outperformance shares) vest and shares are delivered | |
Death or Disability | ● Performance period for outperformance shares remains open, with payout at the end of performance period ● Early measurement and payout for PSUs ● Restricted common shares vest and shares are delivered (including any previously earned but unvested outperformance shares) | |
Qualifying Retirement (1) | ● Performance period for outperformance shares remains open, with payout at the end of performance period ● Early measurement and payout for PSUs ● Shares underlying restricted common shares are delivered (including any previously earned but undelivered outperformance shares) |
(1) | Qualifying Retirement means an executive’s voluntary termination of employment after reaching age 57 and accumulating at least 15 years of service with us. |
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2017-20192019-2021 Performance Share Unit Award Outcomes
For the 2017-2019 performance2019-2021 period, our 12.5%18.9% total shareholder return ranked at the 40th70th percentile of the S&P US REIT index companies and at the 49th percentile of our peer group companies,FTSE NAREIT Equity Office Index (excluding us), resulting in a weighted total payout of 2019-2021 PSUs at 89%180% of target. This resulted in the named executive officers earning the number of units shown below:
| ||||
Name | Performance Units Earned (#) | |||
Gerard H. Sweeney | 159,861 | |||
| 61,976 | |||
H. Jeffrey DeVuono |
| 40,333 | ||
George D. Johnstone |
| |||
William D. Redd |
| |||
|
|
2019-2021 Outperformance Modifier Outcomes
The 2019 restricted shares right awards included an outperformance modifier that could have increased the original award up to 200% based on Brandywine’s achievement of superior results for average same store cash NOI growth and development activity, weighted equally, during the three-year period ending December 31, 2021. These goals were intentionally ambitious and their achievement was not considered probable on the date of grant. As of the end of the applicable period, the outperformance goals were not achieved at levels sufficient to activate the outperformance modifier and therefore there was no increase in the shares deliverable under the 2019 restricted share rights awards.
Deferred Compensation Plan
We offermaintain a deferred compensation plan that enables our executives to defer a portion of their base salaries, annual incentive awards and equity awards. The amounts deferred are not included in the executive’s current taxable income and, therefore, are not currently deductible by us. The executives select from a limited number of mutual funds and investment alternatives which serve as measurement funds, and the deferred amounts are increased or decreased to correspond to the market value of the selected investments. We do not consider any of the earnings credited under the deferred compensation plan to be “above market.” We generally do not provide any matching contribution to any executive officer who participates in this plan, other than a limited amount to make up for any loss of matching contributions under our Section 401(k) plan.plan due to Internal Revenue Code limits. However, an executive who defers more than 25% of his or her annual incentive award into the Company Share Fund under the deferred compensation plan will receive a 15% matching contribution on the excess amount, which matching contribution will itself be invested in the Company Share Fund. We maintain this plan to help ensure that our benefits are competitive. See “Compensation Tables and Related Information —- Nonqualified Deferred Compensation.”
Our executives participate in company-sponsored benefit programs available generally to all our salaried employees, including our shareholder-approved non-qualified employee share purchase plan and our Section 401(k) plan. For 2019,2021, our 401(k) plan provided a company matching contribution of 30% of the first 6% of eligible compensation contributed to the plan, up to a maximum company matching contribution of $4,860.$5,220. Other benefits, such as health and dental plans, group term life insurance and short- and long-term disability insurance, are also available generally to all our salaried employees.
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2022 PROXY STATEMENT |
Perquisites
We do not provide perquisites to our executive officers.
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2020 PROXY STATEMENT
Post-Termination Benefits; Qualifying Retirement
We provide post-employment benefits to our executive officers that vary based on the executive and the circumstances of the executive’s termination. See “Employment and Other Agreements” and “Potential Payments upon Termination of Employment or Change-in-Control.”
Our equity-based long-term incentive awards provide for vesting of unvested awards upon a qualifying retirement. A “qualifying retirement” means the termination of employment, other than for cause, after the employee has reached age fifty-seven (57) and worked for us for at least fifteen (15) years. Our Compensation Committee believes that this definition of retirement is appropriate and rewards long-term contributions of employees to us.
We have “change of control” severance agreements with our executive officers which condition (other than with respect to our President and Chief Executive Officer) which condition the executive’s entitlement to severance following a change of control upon a so-called “double trigger.” Under a double-trigger, the executive is entitled to severance only if, within a specified period following the change of control, the terms of his or her employment are adversely changed or he or she is terminated without cause. The entitlement ofcause, except for our President and Chief Executive Officer, to severance following a change of control is not conditioned on an adverse change in his employment terms; rather hewho would be entitled to severance if he were to resign within six months following the change of control or his employment were terminated without cause. Our Compensation Committee believes that the severance protection that we provide is consistent with those maintained by our peer companies and is therefore important in enabling us to attract and retain high quality executives. We also believeexecutives and that it is in our best interest to have agreements with our senior executives that maintain their focus on, and commitment to, us notwithstanding a potential merger or other change of control transaction.
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VII.V. Key 2020 Executive Compensation Actions
Key 20202022 Executive Compensation Actions
Key 2022 Executive Compensation Actions
| The number of shares subject to PSU awards (at target) and restricted share rights granted to each NEO as part of our |
Name | PSUs (at target) (#) | Restricted Share Right Awards (#) |
PSUs (at target) (#)
|
Restricted Share Right Awards (#)
| ||
Gerard H. Sweeney | 126,044 | 72,469 | 180,505
| 90,253
| ||
Thomas E. Wirth | 40,482 | 23,275 | 58,790
| 29,395
| ||
H. Jeffrey DeVuono | 28,718 | 16,512 | 47,262
| 23,631
| ||
George D. Johnstone | 22,243 | 12,789 | 42,690
| 21,345
| ||
William D. Redd | 26,296 | 15,119 | 44,124
| 22,062
|
| The restricted shares right awards again include an outperformance modifier that can increase the number of shares payable under the award by up to 200% based on Brandywine’s achievement of superior results for two performance measures during the three-year period ending December 31, |
Our PSU award design was modified to remove dividend equivalent rights. |
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BRANDYWINE REALTY TRUST |
|
Name
|
2021 Base Salary
|
2022 Base Salary
|
% Increase
| |||
Gerard H. Sweeney
| $750,000
| $800,000
| 6.7%
| |||
Thomas E. Wirth
| $455,000
| $469,000
| 3.1%
| |||
H. Jeffrey DeVuono
| $415,000
| $428,450
| 3.2%
| |||
George D. Johnstone
| $375,000
| $387,000
| 3.2%
| |||
William D. Redd
| $380,000
| $400,000
| 5.3%
|
All of our named executive officers’ target bonus opportunities, as a percentage of their base salaries, are |
Each of Mr. Johnstone and Mr. Redd entered into a |
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2020 PROXY STATEMENT
VIII.VI. Additional Executive CompensationCompensation Policies and Practices
Timing of Equity and Other Awards
We do not have any process or practice to time the grant of equity awards in coordination with our release of earnings or other material non-public information. Historically, our Compensation Committee has approved annual incentive awards and equity-based long-term incentive awards after the completion of each fiscal year, following review of pertinent fiscal year information and industry data. The date on which the Committee has met has varied from year to year, primarily based on the schedules of Committee members and the timing of compilation of data requested by the Committee. We do not time the release of material information to affect the value of executive compensation.
Compensation Recovery; Clawback Agreements
We have entered into “clawback” agreements with each of our executive officers that provide that in the event of an accounting restatement due to material non-compliance with federal securities laws, and without regard to misconduct, we have the right to recover incentive-based compensation that was computed on the basis of erroneous data during the three-year period preceding the accounting restatement and that exceeded what should have been paid on the basis of the corrected data.
Share Ownership Requirements
We maintain minimum share ownership requirements for our executives and Trustees.executives. We include these requirements in our Corporate Governance Principles. Our executive officers are required to own, within five years of their electionappointment as an executive officer, the lesser of (x) 75% of the number of common shares or share equivalents awarded to such executive officer for no consideration (other than such officer’s services) under an equity compensation program during the sixty-month period that precedes the testing date, less shares withheld for taxes and (y) common shares or share equivalents that have a market value (based on the average of the closing common share prices as reported on the New York Stock
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57 |
2022 PROXY STATEMENT |
Exchange for the twelve-month period ending on June 30 of the calendar year that precedes the date of computation) at least equal to a multiple of the officers base salary. In the case of our President and Chief Executive Officer, the multiple is six, and in the case of our other executive officers, the multiple is four. Each of our non-employee Trustees is required to retain a number of common shares (or share equivalents), whether vested or not, at least equal to five (5) times the annual cash retainer (currently $45,000 per year) for service on the Board. Each of our executive officers and non-employee Trustees is in compliance with the share ownership requirements. If an officer were not to meet the requirements, the officer would be restricted from selling any common shares (or share equivalents) that have been or are thereafter awarded to him or her under any of our equity compensation programs until such officer met the requirements, except as required by law or upon the approval of the Board or the Compensation Committee or (except as to himself) the President and Chief Executive Officer.
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BRANDYWINE REALTY TRUST
Our executives and Trustees are prohibited from hedging their ownership or offsetting any decline in the market value of our shares, including by trading in publicly-traded options, puts, calls or other derivative instruments related to our shares.
Pledges and Transactions in Shares
Our executives and Trustees are prohibited from pledging our shares as collateral for loans.
Compensation and Risks
Our Compensation Committee believes that the risks material to our business are those that derive from broad-based economic trends and specific trends related to the types of real estate we own and operate in our relevant markets. We do not believe that these risks are materially affected by, or materially arise from, our compensation policies and practices. We believe that our compensation policies and practices support achievement of competitive performance without unnecessary and excessive risk taking. Our annual incentive awards and equity-based long-term incentive awards are based on a variety of indicators of performance, thus diversifying the risk associated with any single indicator of performance. In addition, our share ownership requirements encourage our executives to focus on sustained share price appreciation rather than short-term results. Furthermore, compliance and ethical behavior are integral factors considered in all performance assessments.
Accounting Considerations
Prior to implementation of a compensation program and awards under the program, we evaluate the cost of the program and awards in light of our current budget and anticipated budget. We also review the design of compensation programs to assure that the recognition of expense for financial reporting purposes is consistent with our financial modeling. Under FASB ASC Topic 718, the compensation cost recognized for an award classified as an equity award is fixed for the particular award and, absent modification, is not revised with subsequent changes in market prices of our common shares or other assumptions used for purposes of the valuation.
Tax Considerations
Prior to implementation of a compensation program and awards under the program, we evaluate the federal income tax consequences, both to us and to our executives, of the program and awards. Before approving a program, our Compensation Committee receives an explanation from our outside professionals as to the expected tax treatment of the program and awards under the program.
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58 |
BRANDYWINE REALTY TRUST |
Consideration of Prior Year Compensation
The primary focus of our Compensation Committee in setting executive compensation is the executive’s current level of compensation, including recent awards of long-term incentives, in the context of current levels of compensation for similarly situated executives at peer companies, taking into account the executive’s
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2020 PROXY STATEMENT
performance and our corporate performance. The Committee has not adopted a formulaic approach for considering amounts realized by an executive from prior equity-based awards.
Compensation Committee Report
The Committee has reviewed and discussed the Compensation Discussion and Analysis with our management, which has the responsibility for preparing the Compensation Discussion and Analysis. Based upon this review and discussion, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20192021 and in our proxy statement for our 20202022 annual meeting of shareholders.
Submitted by:
James C. Diggs (Chair)
Wyche Fowler
Michael J. Joyce
Charles P. Pizzi
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59 |
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70
BRANDYWINE REALTY TRUST
Compensation Tables and Related Information
The following tables and footnotes set forth information, for the three most recent fiscal years, concerning compensation awarded to, earned by or paid to: (i) our President and Chief Executive Officer, (ii) our Executive Vice President and Chief Financial Officer and (iii) each of our three other most highly compensated executive officers in 20192021 who were serving as executive officers at December 31, 20192021 (our “named executive officers”).
Summary Compensation Table
Current Executive | Year | Salary | Share Awards | Non-Equity Incentive Plan Compensation (3) | All Other | Total |
Gerard H. Sweeney | 2019 | $750,000 | $2,867,485 | $1,650,000 | $67,701(5) | $5,335,186 |
2018 | $741,667 | $2,249,994 | $1,545,000 | $14,791 | $4,551,452 | |
2017 | $700,000 | $2,100,002 | $1,820,000 | $14,639 | $4,634,641 | |
Thomas E. Wirth | 2019 | $445,833 | $1,007,264 | $495,000 | $5,040(6) | $1,953,137 |
2018 | $422,833 | $850,001 | $437,750 | $5,970 | $1,716,554 | |
2017 | $410,000 | $599,999 | $475,000 | $5,820 | $1,490,819 | |
H. Jeffrey DeVuono | 2019 | $408,333 | $657,994 | $451,000 | $5,040(6) | $1,522,367 |
2018 | $398,333 | $599,999 | $412,000 | $5,970 | $1,416,302 | |
2017 | $388,333 | $569,999 | $449,000 | $5,820 | $1,413,152 | |
George D. Johnstone | 2019 | $365,625 | $530,940 | $403,000 | $5,040(6) | $1,304,605 |
2018 | $357,292 | $448,435 | $369,513 | $5,970 | $1,181,210 | |
2017 | $347,767 | $420,764 | $402,500 | $5,820 | $1,176,851 | |
William D. Redd | 2019 | $370,167 | $606,116 | $412,000 | $5,040(6) | $1,393,323 |
2018 | $344,333 | $432,503 | $356,380 | $5,970 | $1,139,186 | |
2017 | $333,333 | $400,012 | $387,000 | $5,820 | $1,126,165 |
Current Executive Name and Principal Position
| Year
| Salary (1)
| Share Awards (2)
| Non-Equity Incentive Plan Compensation (3)
| All Other Compensation (4)
| Total
| ||||||||||||||||||
Gerard H. Sweeney
|
|
2021
|
| $750,000 | $3,375,006 | $1,950,000 | $14,038(5) | $6,089,044 | ||||||||||||||||
|
2020
|
| $750,000 | $3,187,497 | $1,350,000 | $13,948 | $5,301,445 | |||||||||||||||||
|
2019
|
| $750,000 | $2,867,485 | $1,650,000 | $67,701 | $5,335,186 | |||||||||||||||||
Thomas E. Wirth Executive Vice
|
|
2021
|
| $455,000 | $1,091,998 | $591,500 | $5,220(6) | $2,143,718 | ||||||||||||||||
|
2020
|
| $454,167 | $1,023,738 | $409,500 | $5,130 | $1,892,535 | |||||||||||||||||
|
2019
|
| $445,833 | $1,007,264 | $495,000 | $5,040 | $1,953,137 | |||||||||||||||||
H. Jeffrey DeVuono
|
|
2021
|
| $415,000 | $829,993 | $540,000 | $5,220(6) | $1,790,213 | ||||||||||||||||
|
2020
|
| $414,167 | $726,251 | $373,500 | $5,130 | $1,519,048 | |||||||||||||||||
|
2019
|
| $408,333 | $657,994 | $451,000 | $5,040 | $1,522,367 | |||||||||||||||||
George D. Johnstone
|
|
2021
|
| $375,000 | $750,003 | $487,500 | $5,220(6) | $1,617,723 | ||||||||||||||||
|
2020
|
| $379,167 | $664,995 | $337,500 | $5,130 | $1,386,792 | |||||||||||||||||
|
2019
|
| $365,625 | $530,940 | $403,000 | $5,040 | $1,304,605 | |||||||||||||||||
William D. Redd Managing Director
|
|
2021
|
| $380,000 | $760,003 | $494,000 | $5,220(6) | $1,639,223 | ||||||||||||||||
2020
| $373,667 | $562,504 | $323,000 | $5,130 | $1,264,301 | |||||||||||||||||||
2019
| $370,167 | $606,116 | $412,000 | $5,040 | $1,393,323 |
(1) | Executives are eligible to defer a portion of their salaries under our Nonqualified Deferred Compensation Plan. The amounts shown in this column have not been reduced by any deferrals under the Nonqualified Deferred Compensation Plan. Amounts deferred in |
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2020 PROXY STATEMENT
(2) | This column represents the grant date fair value of Share Awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures. Share Awards consist of (i) restricted common share rights and (ii) awards of performance units. |
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60 |
BRANDYWINE REALTY TRUST |
Our actual total shareholder return from the beginning of the performance period through the grant date was |
The amounts listed in this column include the following amounts for performance-based restricted share units awarded in 2019: for Mr. Sweeney, $1,633,124; for Mr. Wirth, $633,154; for Mr. DeVuono, $412,043; for Mr. Johnstone, $331,959; and for Mr. Redd, $376,883. Per SEC rules, the values of these units are reported in this column based on their probable outcomes at the grant date. However, the terms of the units permit additional shares to be earned based on performance. The grant date value of the maximum number of common shares that may be earned under the units was $3,266,249 for Mr. Sweeney, $1,266,309 for Mr. Wirth, $824,086 for Mr. DeVuono, $663,919 for Mr. Johnstone, and $753,766 for Mr. Redd.
Similarly, the amounts listed in this column also include the following amounts in respect of restricted common share rights awarded in 2019 that include an outperformance modifier which could increase the number of shares issuable under the award: for Mr. Sweeney, $804,368; for Mr. Wirth, $311,857; for Mr. DeVuono, $202,946; for Mr. Johnstone, $163,499; and for Mr. Redd, $185,619. Per SEC rules, the values of these restricted common share rights are reported based on their grant date fair values, which reflect that the achievement of the outperformance goals was not considered probable on the grant date. The grant date value of the maximum number of common shares that may be earned under these awards was $2,413,103 for Mr. Sweeney, $935,570 for Mr. Wirth, $608,837 for Mr. DeVuono, $490,497 for Mr. Johnstone, and $556,856 for Mr. Redd.
Finally, the amounts listed in this column also include the following amounts in respect of restricted common share rights awarded in 2019 that do not include an outperformance modifier: for Mr. Sweeney, $429,993; for Mr. Wirth, $62,253; for Mr. DeVuono, $43,006; for Mr. Johnstone, $35,482; and for Mr. Redd, $43,614. As further discussed in the proxy statement for our 2019 Annual Meeting of Shareholders, these awards vest over two years and were issued in respect of 2018 performance.
(3) | These amounts reflect annual incentives actually earned in cash. Executives are eligible to defer a portion of the amounts earned into our Deferred Compensation Plan. |
(4) | Amounts in this column do not include dividends paid on unvested restricted common shares rights because the dollar value of dividends has been factored into the grant date fair value of the rights. |
(5) | Represents for |
(6) | Represents for |
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61 |
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BRANDYWINE REALTY TRUST
Current Executive | Grant | Grant | Estimated Future Payouts | Estimated Possible Payouts Under Equity Incentive Plan Awards (#) (2) | All Other Share Awards: Number of Shares (#) | Grant Date Fair Value of Share and Option Awards (3) | ||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||
Gerard H. Sweeney | Annual Incentive | n/a | $0 | $1,500,000 | $2,625,000 |
|
|
|
|
|
Restricted | 2/21/19 |
|
|
|
|
|
| 27,546 | $429,993 | |
Performance Units | 2/21/19 |
|
|
| 37,717 | 75,433 | 150,866 |
| $1,633,124 | |
Restricted | 2/21/19 |
|
|
|
|
|
| 51,529 | $804,368 | |
Thomas E. Wirth | Annual Incentive | n/a | $0 | $450,000 | $787,500 |
|
|
|
|
|
Restricted | 2/21/19 |
|
|
|
|
|
| 3,988 | $62,253 | |
Performance Units | 2/21/19 |
|
|
| 14,623 | 29,245 | 58,490 |
| $633,154 | |
Restricted | 2/21/19 |
|
|
|
|
|
| 19,978 | $311,857 | |
H. Jeffrey DeVuono | Annual Incentive | n/a | $0 | $410,000 | $717,500 |
|
|
|
|
|
Restricted | 2/21/19 |
|
|
|
|
|
| 2,755 | $43,006 | |
Performance Units | 2/21/19 |
|
|
| 9,516 | 19,032 | 38,064 |
| $412,043 | |
Restricted | 2/21/19 |
|
|
|
|
|
| 13,001 | $202,946 | |
George D. Johnstone | Annual Incentive | n/a | $0 | $367,000 | $642,250 |
|
|
|
|
|
Restricted | 2/21/19 |
|
|
|
|
|
| 2,273 | $35,482 | |
Performance Units | 2/21/19 |
|
|
| 7,667 | 15,333 | 30,666 |
| $331,959 | |
Restricted | 2/21/19 |
|
|
|
|
|
| 10,474 | $163,499 |
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2020 PROXY STATEMENT
William D. Redd | Annual Incentive | n/a | $0 | $375,000 | $656,250 |
|
|
|
|
|
Restricted | 2/21/19 |
|
|
|
|
|
| 2,794 | $43,614 | |
Performance Units | 2/21/19 |
|
|
| 8,704 | 17,408 | 34,816 |
| $376,883 | |
Restricted | 2/21/19 |
|
|
|
|
|
| 11,891 | $185,619 |
Current Executive Name | Grant Type | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) | Estimated Possible Payouts Under Equity Incentive Plan Awards (#) (2) | All Other Share Awards: Number of Shares (#) | Grant Date Fair Value of Share and Option Awards (3) | ||||||||||||||||||||||||||||||
Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||
Gerard H. Sweeney | Annual Incentive | n/a | $1,275,000 | $1,500,000 | $2,625,000 | |||||||||||||||||||||||||||||||
Performance Units | 3/4/2021 | 67,088 | 134,175 | 268,350 | $2,250,115 | |||||||||||||||||||||||||||||||
Restricted Common Share Rights(4)(5) | 3/4/2021 | 88,854 | $1,124,892 | |||||||||||||||||||||||||||||||||
Thomas E. Wirth | Annual Incentive | n/a | $386,750 | $455,000 | $796,250 | |||||||||||||||||||||||||||||||
Performance Units | 3/4/2021 | 21,707 | 43,413 | 86,826 | $728,036 | |||||||||||||||||||||||||||||||
Restricted Common Share Rights(4)(5) | 3/4/2021 | 28,749 | $363,962 | |||||||||||||||||||||||||||||||||
H. Jeffrey DeVuono | Annual Incentive | n/a | $352,750 | $415,000 | $726,250 | |||||||||||||||||||||||||||||||
Performance Units | 3/4/2021 | 16,499 | 32,997 | 65,994 | $553,360 | |||||||||||||||||||||||||||||||
Restricted Common Share Rights(4)(5) | 3/4/2021 | 21,851 | $276,634 | |||||||||||||||||||||||||||||||||
George D. Johnstone | Annual Incentive | n/a | $318,750 | $375,000 | $656,250 | |||||||||||||||||||||||||||||||
Performance Units | 3/4/2021 | 14,909 | 29,817 | 59,634 | $500,031 | |||||||||||||||||||||||||||||||
Restricted Common Share Rights(4)(5) | 3/4/2021 | 19,745 | $249,972 | |||||||||||||||||||||||||||||||||
William D. Redd | Annual Incentive | n/a | $323,000 | $380,000 | $665,000 | |||||||||||||||||||||||||||||||
Performance Units | 3/4/2021 | 15,107 | 30,214 | 60,428 | $506,689 | |||||||||||||||||||||||||||||||
Restricted Common Share Rights(4)(5) | 3/4/2021 | 20,009 | $253,314 |
(1) | The “Threshold” column represents the |
(2) | All equity and equity-based awards were made under our Amended and Restated 1997 Long-Term Incentive Plan. The numbers shown under Estimated Future Payouts Under Equity Incentive Plan Awards represent the number of shares potentially issuable under performance unit awards, not including performance units resulting from the deemed |
(3) | The amounts shown in this column represent the grant date fair value of awards on the date of grant, computed in accordance with FASB ASC Topic 718. |
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BRANDYWINE REALTY TRUST |
(4) | Consists of restricted common share rights that |
|
|
| These restricted common share rights also include an outperformance modifier attached that could increase the original award up to 200% based on Brandywine’s achievement of superior results for same-store net operating income growth and |
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BRANDYWINE REALTY TRUST
Outstanding Equity Awards at Fiscal Year-End
| OPTION AWARDS | SHARE AWARDS | ||||||
Current Executive Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares That Have Not Vested (#) (1)(2) | Market Value of Shares That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(2) | Equity Incentive |
Gerard H. Sweeney
| 13,333 | 0 | $6.21 | (4) | 27,546 (5) | $433,850 (5) | 138,074 | $2,174,658 |
33,333 | 0 | $14.31 | (4) | |||||
189,701 | 0 | $11.89 | 3/2/21 | |||||
Thomas E. Wirth | 16,267 | 0 | $11.31 | 3/4/20 | 53,677 | $845,413 | 53,165 | $837,849 |
25,745 | 0 | $11.89 | 3/2/21 | |||||
H. Jeffrey DeVuono | 0 | 0 |
|
| 39,609 | $623,842 | 35,366 | $557,015 |
George D. Johnstone | 27,665 | 0 | $11.89 | 3/2/21 | 30,472 | $479,934 | 27,920 | $439,732 |
William D. Redd | 0 | 0 |
|
| 2,794 (5) | $44,006 (5) | 30,442 | $479,462 |
The following table summarizes information regarding outstanding equity awards held by our named executive officers as of December 31, 2021. In accordance with SEC rules, the market values shown in the table below are based on the closing price of our common shares on December 31, 2021 ($13.42).
|
OPTION AWARDS
|
|
SHARE AWARDS
|
| ||||||||||||||||||||||||
Current Executive Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration | Number of Shares That Have Not Vested (#) (1)(2) | Market Value of Shares That Have Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (3) | ||||||||||||||||||||
Gerard H. Sweeney |
|
13,333
|
| 0 | $6.21 | (4) | 0 (5) | $0 (5) | 601,100 | 8,066,755 | ||||||||||||||||||
|
33,333
|
| 0 | $14.31 | (4) | |||||||||||||||||||||||
|
0
|
| 0 | $0 | ||||||||||||||||||||||||
Thomas E. Wirth |
|
0
|
| 0 | $0 | 50,926 | $683,427 | 193,802 | 2,600,823 | |||||||||||||||||||
H. Jeffrey DeVuono |
|
0
|
| 0 | 37,193 | $499,130 | 142,612 | 1,913,846 | ||||||||||||||||||||
George D. Johnstone |
|
0
|
| 0 | $0 | 0 (5) | $0 (5) | 120,387 | 1,615,594 | |||||||||||||||||||
William D. Redd | 0 | 0 | 0 (5) | $0 (5) | 130,584 | 1,752,437 |
(1) | The unvested shares shown in this column vest in the following amounts and on the following dates, based on the continued service of the grantee: |
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Current Executive Name | Number of Unvested Shares | Vesting Date | ||
Gerard H. Sweeney |
|
| ||
|
| |||
Thomas E. Wirth |
| 24,001 | 4/15/ | |
| 17,342 | 4/15/ | ||
| 9,583 | 4/15/ | ||
H. Jeffrey DeVuono |
| 17,122 | 4/15/ | |
| 12,788 | 4/15/ | ||
| 7,283 | 4/15/ | ||
George D. Johnstone |
|
| ||
|
| |||
|
| |||
William D. Redd |
| 0 |
(2) |
|
|
|
| The vesting of these awards will accelerate if the grantee dies, becomes disabled or experiences a qualifying employment termination (as defined above in footnote 4 of the Grant of Plan-Based Awards table). |
(3) | Represents hypothetical payout value, if any, under performance units |
Executive Name | Award | Number of Unearned Shares | Vesting Date | |||
Gerard H. Sweeney | 2020-2022 PSU | 252,088 | 12/31/22 | |||
2021-2023 PSU | 268,350 | 12/31/23 | ||||
2020 Outperformance | 36,235 | 50% on 1/1/23; 50% on 1/1/24 | ||||
2021 Outperformance | 44,427 | 50% on 1/1/24; 50% on 1/1/25 | ||||
Thomas E. Wirth | 2020-2022 PSU | 80,964 | 12/31/22 | |||
2021-2023 PSU | 86,826 | 12/31/23 | ||||
2020 Outperformance | 11,638 | 50% on 1/1/23; 50% on 1/1/24 | ||||
2021 Outperformance | 14,375 | 50% on 1/1/24; 50% on 1/1/25 | ||||
H. Jeffrey DeVuono | 2020-2022 PSU | 57,436 | 12/31/22 | |||
2021-2023 PSU | 65,994 | 12/31/23 | ||||
2020 Outperformance | 8,256 | 50% on 1/1/23; 50% on 1/1/24 | ||||
2021 Outperformance | 10,926 | 50% on 1/1/24; 50% on 1/1/25 | ||||
George D. Johnstone | 2020-2022 PSU | 44,486 | 12/31/22 | |||
2021-2023 PSU | 59,634 | 12/31/23 | ||||
2020 Outperformance | 6,395 | 50% on 1/1/23; 50% on 1/1/24 | ||||
2021 Outperformance | 9,873 | 50% on 1/1/24; 50% on 1/1/25 |
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BRANDYWINE REALTY TRUST |
| 2020-2022 PSU | 52,592 | 12/31/22 | |||
2021-2023 PSU | 60,428 | 12/31/23 | ||||
2020 Outperformance | 7,560 | 50% on 1/1/23; 50% on 1/1/24 | ||||
2021 Outperformance | 10,005 | 50% on 1/1/24; 50% on 1/1/25 |
To receive any shares earned under the PSUs, a grantee must generally remain employed by us through the end of the applicable performance period. Similarly, receipt of 50% of any shares earned under the outperformance feature of restricted share right awards is generally conditioned on employment until the day after the end of the applicable performance period, and receipt of the remaining 50% is generally conditioned on employment until one year later. However, see below under the heading “Equity Award Agreements” for certain termination scenarios where these vesting conditions may be waived (such as in connection with a death, disability or qualifying retirement).
(4) | These options have an expiration date tied to Mr. Sweeney’s employment with us. |
(5) | Excludes shares subject to outstanding restricted common share rights that are non-forfeitable because Mr. Sweeney, Mr. Johnstone and Mr. Redd are eligible for qualifying retirement. |
Option Exercises and Shares Vested
| OPTION AWARDS | SHARE AWARDS | ||
Current Executive Name | Number of Shares Acquired on Exercise (#) | Value Realized | Number of Shares Acquired on Vesting | Value Realized on Vesting |
Gerard H. Sweeney | 514,699 | $4,525,148 | 117,919 (2) | $1,850,010(2) |
Thomas E. Wirth | — | — | 33,938 | $536,021 |
H. Jeffrey DeVuono | 19,568 | $74,790 | 32,523 | $513,688 |
George D. Johnstone | 32,820 | $137,844 | 24,499 | $386,979 |
William D. Redd | — | — | 24,537 (2) | $384,793 (2) |
OPTION AWARDS | SHARE AWARDS | |||||||
Current Executive Name
| Number of Shares Acquired on Exercise (#)
| Value Realized on Exercise ($)
| Number of Shares Acquired on Vesting (#)
| Value Realized on ($) (1)
| ||||
Gerard H. Sweeney |
181,291
| $119,652 | 262,488 (2) | $3,450,790 (2) | ||||
Thomas E. Wirth |
25,745
| $16,992 | 96,299 | $1,281,692 | ||||
H. Jeffrey DeVuono |
0
| $0 | 64,192 | $854,060 | ||||
George D. Johnstone |
27,665
| $18,259 | 53,377 (2) | $700,961 (2) | ||||
William D. Redd
|
0
| $0 | 58,298 (2) | $766,719 (2) |
(1) | Reflects the number of restricted common shares (or share equivalents) that vested in |
(2) | In the case of Mr. Sweeney, the number and value of shares acquired upon vesting includes |
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BRANDYWINE REALTY TRUST
Nonqualified Deferred Compensation
Current Executive Name | Executive Contributions in Last FY ($) (1) | Registrant Contributions in Last FY ($) | Aggregate Earnings in | Aggregate Withdrawals/ | Aggregate |
Gerard H. Sweeney | $843,933 | — | $2,224,115 | ($247,656) | $13,491,229 |
Thomas E. Wirth | $609,291 | — | $244,241 | — | $2,061,673 |
H. Jeffrey DeVuono | $222,819 | — | $706,774 | — | $4,018,354 |
George D. Johnstone | $418,178 | — | $190,197 | — | $1,404,272 |
William D. Redd | — | — | $174,250 | — | $843,526 |
Current Executive Name
| Executive Contributions in Last FY ($) (1)
| Registrant Contributions in Last FY ($)
| Aggregate Last FY ($)
| Aggregate Withdrawals/ Distributions ($)
| Aggregate
| |||||||||||||||
Gerard H. Sweeney | - | - | $1,512,735 | $(767,023 | ) | $12,583,649 | ||||||||||||||
Thomas E. Wirth | $110,465 | - | $190,111 | - | $2,127,309 | |||||||||||||||
H. Jeffrey DeVuono | $159,326 | - | $265,671 | - | $4,097,535 | |||||||||||||||
George D. Johnstone | $173,642 | - | $177,657 | - | $1,715,054 | |||||||||||||||
William D. Redd | - | - | $122,292 | - | $1,038,774 |
(1) |
|
(2) | All amounts shown in |
|
|
Our Executive Deferred Compensation Plan (the “Deferred Compensation Plan”) affords participating executives and Trustees the ability to defer a portion of their base salary, bonus and annual incentive award (or, in the case of our Trustees, annual retainer and Board fees) on a tax-deferred basis. In addition, participants may elect to defer the receipt of equity grants under our long-term incentive plans. If a participant’s matching contributions under our 401(k) plan are limited due to participation in the Deferred Compensation Plan or due to limitations on matching contributions imposed by the Internal Revenue Code, we make a matching contribution for the participant under the deferred compensation plan to the extent the participant has deferred an amount under the Deferred Compensation Plan at least equal to the amount that would have been required if the matching contribution had been made under our 401(k) plan. We have the right, but not the obligation, to make matching contributions for executives on deferred amounts (and/or to make a discretionary profit sharing contribution for executives) covering compensation in excess of $280,000$290,000 (for 2021) because the 401(k) plan rules will not permit such matching contributions due to the IRS annual compensation limitations of $280,000.limitation. Participants elect the timing and form of distribution. Distributions are payable in a lump sum or installments and may commence in-service, after a required minimum deferral period, or upon retirement. ParticipantsExcept as otherwise noted in the next paragraph, participants elect the manner in which their accounts are deemed invested during the deferral period.
Because the Deferred Compensation Plan is a “nonqualified” deferred compensation plan, we are not obligated to invest deferred amounts in the selected manner or to set aside any deferred amounts in trust. One of the deemed investment options is a hypothetical investment fund (the “Common Share Fund”) consisting of our common shares. Effective for compensation deferred after 2006, all deferrals that are invested in the Company Share Fund will continue to be invested in the Company Share Fund until distribution and will not be eligible to be transferred into other investment funds. An executive who defers more than 25% of his or her annual bonus or annual incentive award into the Company Share Fund is entitled to 15% matching contribution on the excess amount, which matching contribution will itself be invested in the Company Share Fund. All deferred equity
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2020 PROXY STATEMENT
grants will be invested in the Company Share Fund and all distributions of benefits attributable to Company Share Fund credits will be paid in common shares.
With respect to post-2004 deferred compensation deemed invested in the Company Share Fund, dividend equivalents are subject to participants’ elections to receive the dividend equivalents in cash or to continue to defer them under the Deferred Compensation Plan. Any dividend equivalents credited to participants’ accounts in the Deferred Compensation Plan will be invested in investment funds selected by the participants other than the Company Share Fund.
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In general, compensation subject to a deferral election, matching contributions and profit sharing contributions are not includible in a participant’s taxable income for federal income tax purposes until the participant receives a distribution from the Deferred Compensation Plan. WeTo the extent amounts under this plan are deductible by us, those deductions will not entitled to a deductionarise until such amounts are distributed.
Employment and Other Agreements
We have agreements with executives that provide for payments to the executives in connection with their termination of employment or upon a change of control of us. We summarize below, and in the table that follows, circumstances that would trigger payments by us, and the amounts of the payments. We discuss the rationale for these agreements above under “Compensation Discussion and Analysis –- Post Termination Benefits; Qualifying Retirement,” including why we have entered into agreements with executive officers that provide for post-employment payments following a change-in-control.
Agreement with our President and Chief Executive Officer
We have ana 2007 employment agreement with Gerard H. Sweeney. Mr. Sweeney’s employment agreement provides for an annual base salary of not less than $600,000 (increased to $750,000 effective March 1, 2018)($750,000 for 2021 and $800,000 for 2022). If Mr. Sweeney’s employment with us were not extended upon expiration of the term of his employment agreement, which currently renews annually for successive one-year periods absent advance notice of non-renewal, we would be obligated to provide him with a severance benefit during the one-year period following expiration of the term equal to the sum of his prior year salary and bonus as well as health care benefits. The employment agreement entitles Mr. Sweeney to a payment equal to 2.99 times the sum of his annual salary and annual bonus upon: (i) termination of his employment without cause, (ii) his resignation “for good reason” or (iii) his death. Resignation by Mr. Sweeney within six months following a reduction in his salary, an adverse change in his status or responsibilities, certain changes in the location of our headquarters or a change of control of us would each constitute a resignation “for good reason.” Mr. Sweeney’s employment agreement also includes a tax gross-up for excise tax payments that would be payable upon a change of control and that would put him in the same financial position after-tax that he would have been in if the excise tax did not apply to him. Mr. Sweeney’s severance and change of control benefits were determined by our Compensation Committee and are not conditioned on any non-competition or other post-employment restrictive covenants.
Change of Control Agreements with Executive Officers
In addition to our employment agreement with Mr. Sweeney, we have entered into change of control agreements with our executive officers. These agreements provide that if both (i) a change of control (a “CIC”) occurs at a
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BRANDYWINE REALTY TRUST
time when an executive is an employee and (ii) the executive’s employment is terminated other than for cause or the executive resigns for good reason, in either case within a specified number of days (as indicated in the table below under the caption “Coverage Period”) following the CIC, then we (or our successor in the CIC transaction) will pay to the executive the product of: (x) the CIC Multiplier (as indicated in the table below under the caption “CIC Multiplier”) times (y) the sum of (1) the executive’s annual base salary in effect at the time of the CIC plus (2) the greater of (i) the annual bonus most recently paid to the executive prior to the CIC or (ii) the executive’s target bonus for the year in which the CIC occurs. In addition, if the foregoing double trigger (i.e., a CIC and a qualifying employment termination) were to occur, we would provide the applicable executive with continued medical and group term life insurance coverage during the Coverage Period.
The table below shows the Coverage Period and CIC Multiplier for the identified executive officers.
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Name | Coverage Period | CIC Multiplier | ||
Thomas E. Wirth | 730 days | 2.00 | ||
H. Jeffrey DeVuono | 730 days | 2.00 | ||
George D. Johnstone | 730 days |
2.00* | ||
William D. Redd | 730 days |
2.00* |
* | Increased from 1.75 to 2.00, effective as of February 22, 2022 |
Equity Award Agreements
Under the terms of our restricted common share right awards, if an executive’s employment is terminated without cause or if the executive resigns with good reason within one year following a CIC, or if an executive dies, becomes disabled or has a qualifying retirement, all otherwise unvested restricted common share rights (including previously earned outperformance shares still subject to time vesting) will then vest and shares will be delivered in respect thereof.
Under the terms of our performance unit programs, in the event of a CIC, death, disability or qualifying retirement while a performance unit is outstanding, the applicable measurement period will be truncated and the performance units will then be settled based on actual performance through that time (for 2020-2022 PSUs, the payout will be(and subject to pro-ration in the case of qualifying retirement).
Similarly, in the event of CIC during the performance period applicable to an outperformance share, the performance period will be truncated and the number of outperformance shares earned will then be determined (with such adjustments to the performance measures as the Committee then deems appropriate). Any earned outperformance shares will then remain subject to the same time vesting requirements that generally apply to outperformance shares (provided that, as noted above, such time vesting requirements will be waived if the executive experiences a termination without cause or resignation with good reason within one year following the CIC).shares.
In the event of a death, disability or qualifying retirement during the performance period applicable to an outperformance share, a pro-rata portion of those outperformance shares will remain outstanding and be earned (or not) based on actual performance through the end of the applicable performance period. In these cases, any earned shares will be delivered promptly following the performance determination. In the event of a death, disability or qualifying retirement following the performance period applicable to an outperformance share, any then remaining time vesting requirements will be waived.
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Potential Payments Upon Termination of Employment or Change-in-Control
The table below was prepared as though the triggering event listed below the name of each named executive officer occurred on December 31, 2019.2021. Assumptions are noted in the footnotes to the table.
Current Executive Name | Severance | Value of Unvested Equity Awards (2) | Medical and Life Insurance | Tax Gross-Up | Total |
Gerard H. Sweeney |
|
|
|
|
|
▪Retirement | $0 | $1,455,589 | $0 | n/a | $1,455,589 |
▪Non-renewal of employment agreement | $2,475,000 | $1,455,589 | $20,083 | n/a | $3,950,672 |
▪Involuntary or good reason termination | $7,400,250 | $1,455,589 | $60,248 | n/a | $8,916,088 |
▪Death | $7,400,250 | $1,455,589 | $0 | n/a | $8,855,839 |
▪Disability | $750,000 (1) | $1,455,589 | $20,083 | n/a | $2,225,672 |
▪Involuntary or good reason termination | $7,400,250 | $1,455,589 | $60,248 | $0 | $8,916,088 |
Thomas E. Wirth |
|
|
|
|
|
▪Death | $0 | $1,241,536 | $0 | n/a | $1,241,536 |
▪Disability | $0 | $1,241,536 | $0 | n/a | $1,241,536 |
▪Involuntary or good reason termination | $1,900,000 | $1,241,536 | $40,165 | n/a | $3,181,702 |
H. Jeffrey DeVuono |
|
|
|
|
|
▪Death | $0 | $881,630 | $0 | n/a | $881,630 |
▪Disability | $0 | $881,630 | $0 | n/a | $881,630 |
▪Involuntary or good reason termination | $1,730,000 | $881,630 | $45,386 | n/a | $2,657,017 |
George D. Johnstone |
|
|
|
|
|
▪Death | $0 | $687,619 | $0 | n/a | $687,619 |
▪Disability | $0 | $687,619 | $0 | n/a | $687,619 |
▪Involuntary or good reason termination | $1,351,000 | $687,619 | $42,895 | n/a | $2,081,514 |
William D. Redd |
|
|
|
|
|
▪Retirement | $0 | $279,797 | $0 | n/a | $279,797 |
▪Death | $0 | $279,797 | $0 | n/a | $279,797 |
▪Disability | $0 | $279,797 | $0 | n/a | $279,797 |
▪Involuntary or good reason termination | $1,356,250 | $279,797 | $16,479 | n/a | $1,652,526 |
Current Executive Name
|
Severance
|
Value of Unvested
|
Medical and
|
Tax Gross-Up
|
Total
| |||||||||||||||||
Gerard H. Sweeney | ||||||||||||||||||||||
◾ | Retirement | $0 | $3,029,305 | $0 | n/a | $3,029,305 | ||||||||||||||||
◾ | Non-renewal of employment agreement at Company election | $2,100,000 | $3,029,305 | $15,361 | n/a | $5,144,666 | ||||||||||||||||
◾ | Involuntary or good reason termination (not in connection with change in control) | $6,279,000 | $3,029,305 | $46,082 | n/a | $9,354,388 | ||||||||||||||||
◾ | Death | $6,279,000 | $6,645,976 | $0 | n/a | $12,924,976 | ||||||||||||||||
◾ | Disability | $750,000 (1) | $6,645,976 | $15,361 | n/a | $7,411,337 | ||||||||||||||||
◾ | Involuntary or good reason termination (in connection with change in control) | $6,279,000 | $6,645,976 | $46,082 | $0 | $12,971,058 | ||||||||||||||||
Thomas E. Wirth |
| |||||||||||||||||||||
◾ | Death | $0 | $2,826,515 | $0 | n/a | $2,826,515 | ||||||||||||||||
◾ | Disability | $0 | $2,826,515 | $0 | n/a | $2,826,515 | ||||||||||||||||
◾ | Involuntary or good reason termination (in connection with change in control) | $1,820,000 | $2,826,515 | $46,818 | n/a | $4,693,333 | ||||||||||||||||
H. Jeffrey DeVuono | ||||||||||||||||||||||
◾ | Death | $0 | $2,078,482 | $0 | n/a | $2,078,482 | ||||||||||||||||
◾ | Disability | $0 | $2,078,482 | $0 | n/a | $2,078,482 | ||||||||||||||||
◾ | Involuntary or good reason termination (in connection with change in control) | $1,660,000 | $2,078,482 | $48,610 | n/a | $3,787,092 | ||||||||||||||||
George D. Johnstone | �� | |||||||||||||||||||||
◾ | Retirement | $0 | $583,045 | $0 | n/a | $583,045 | ||||||||||||||||
◾ | Death | $0 | $1,337,590 | $0 | n/a | $1,337,590 | ||||||||||||||||
◾ | Disability | $0 | $1,337,590 | $0 | n/a | $1,337,590 | ||||||||||||||||
◾ | Involuntary or good reason termination (in connection with change in control) (3) | $1,312,500 | $1,337,590 | $46,818 | n/a | $2,696,909 | ||||||||||||||||
William D. Redd | ||||||||||||||||||||||
◾ | Retirement | $0 | $649,529 | $0 | n/a | $649,529 | ||||||||||||||||
◾ | Death | $0 | $1,446,150 | $0 | n/a | $1,446,150 | ||||||||||||||||
◾ | Disability | $0 | $1,446,150 | $0 | n/a | $1,446,150 | ||||||||||||||||
◾ | Involuntary or good reason termination (in connection with change in control) (3) | $1,330,000 | $1,446,150 | $18,800 | n/a | $2,794,950 |
(1) | This amount would be subject to reduction by the amount of any disability insurance proceeds receivable by Mr. Sweeney in the year following the cessation of his employment due to disability. |
(2) | Represents the aggregate value of unvested equity awards as of December 31, |
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performance through December 31, |
(3) | Computed based upon a 1.75 multiple in effect as of December 31, 2021. The multiple was increased to 2.00, effective as of February 22, 2022. |
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Equity Compensation Plan Information as of December 31, 20192021
Plan Category | (a) | (b) | (c) |
Equity compensation plans approved by security holders | 3,065,406 (1) | $11.88 (2)(3) | 7,585,208 (4) |
Equity compensation plans not approved by security holders | ― | ― | ― |
Total | 3,065,406 | $11.88 | 7,585,208 |
Plan Category
|
(a)
|
(b)
|
(c))
| |||
Equity compensation plans approved by security holders | 2,815,279 (1) | $13.42 (2)(3) | 6,005,950 (4) | |||
Equity compensation plans not approved by security holders
| — | — | — | |||
Total | 2,815,279 | $13.42 | 6,005,950 |
(1) | Relates to awards outstanding under our Amended and Restated 1997 Long-Term Incentive Plan (most recently approved by shareholders in May 2017), |
(2) | Does not take into account |
(3) | The weighted average remaining term of the options as of December 31, |
(4) | Includes |
401(k) Plan
We maintain a Section 401(k) and Profit Sharing Plan (the “401(k) Plan”) covering eligible employees. The 401(k) Plan permits eligible employees to defer up to a designated percentage of their annual compensation, subject to certain limitations imposed by the Internal Revenue Code. The employees’ elective deferrals are immediately vested and non-forfeitable upon contribution to the 401(k) Plan. We reserve the right to make matching contributions or discretionary profit sharing contributions. The 401(k) Plan is designed to qualify under Section 401 of the Code so that contributions by employees or us to the 401(k) Plan and income earned on plan contributions are not taxable to employees until such amounts are withdrawn from the 401(k) Plan, and so that contributions by us, if any, will be deductible by us when made.
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Our shareholders approved the 2007 Non-Qualified Employee Share Purchase Plan (the “ESPP”) in May 2007. The number of common shares reserved and initially available for issuance under the ESPP is 1,250,000.
The ESPP is intended to provide eligible employees with a convenient means to purchase common shares through payroll deductions and voluntary cash investments. All of our full-time and qualified part-time employees are eligible to participate in the ESPP beginning on the first day of the quarterly purchase period that begins on, or next following, their date of hire. At December 31, 2019,2021, approximately 337321 persons were eligible to participate in the ESPP, including 2226 officers and all of our other full-time and qualified part-time employees. Part-time employees must be scheduled to work at least 20 hours per week to qualify for participation under the ESPP.
Prior to each purchase period, a participant may specify the contributions the participant proposes to make for the purchase period. Such contributions will be expressed as a stated whole percentage (ranging from 1% to 20%) of the participant’s compensation payable during the purchase period (including base salary, bonus, commissions and other
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compensation processed through our regular payroll system) that we are authorized to deduct during the purchase period to purchase common shares for the participant’s account under the ESPP. A participant may withdraw (without interest) at any time on or before the last day of a purchase period all or any of the contributions credited to his or her account. In addition, a participant may amend or revoke his or her election at any time prior to a purchase period, and a participant may amend or revoke his or her election during a purchase period to reduce or stop his or her contributions. The account balance of any participant who terminates employment during a purchase period before the last day of the purchase period will be automatically returned without interest to the participant. At the end of each purchase period, the amounts accumulated for each participant will be used to purchase common shares at a price equal to 85% (or such higher percentage set by the Compensation Committee) of the average closing price of the common shares as reported on the New York Stock Exchange during the purchase period. The ESPP Plan Year begins June 1 and extends to the next following May 31. Purchase periods have a duration of three months, ending on each of February 28, May 31, August 31 and November 30. Our Compensation Committee, in its discretion, may change the duration of purchase periods and also may change the beginning and ending dates of purchase periods from those described above, provided, however, that a purchase period may not extend for more than a 12-consecutive-month period. Under the plan document the maximum contribution by each participant for any Plan Year may not exceed $50,000. The ESPP does not qualify as an “employee stock purchase plan” within the meaning of section 423 of the Internal Revenue Code.
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The disclosure of CEO pay ratio is required under the Dodd-Frank Act. Our CEO to median employee pay ratio is calculated in accordance with SEC requirements. We identified the median employee by examining the annual total compensation for all employees, excluding our CEO, who were employed by Brandywine on December 31, 2017.2020. We included all employees, whether employed on a full-time, part-time, seasonal or temporary basis. We annualized the compensation for any full-time employee at December 31, 20172020 who was not employed by Brandywine for all of fiscal 2017.2020. ADP payroll records were used to determine all payments made to the median employee. Compensation includedused to identify the median employee was base salary/base wages, including regular earnings, bonus, commissions, straight time, overtime, short-term disability and paid parental, vacation and sick leave. The methodology was consistently applied for all employees on our payroll as of December 31, 2017.2020. We continue to use the same median employee that we identified based on 20172020 compensation data because there has been no change to our employee population or employee compensation arrangements that we believe would result in a significant change in our CEO pay ratio.
We calculated 2019 total compensation forAfter we identified our median employee, we calculated his or her 2021 total compensation using the same methodology we use for our named executive officers, as set forth in the 2019 Summary Compensation Table that appears earlier in this proxy statement.
Brandywine’s CEO pay is designed to provide a competitive CEO pay package with significant performance-based pay in a highly competitive CEO talent market. Median employee pay represents Brandywine’s compensation to employees at various rates based on competitive labor markets. The table below sets forth: (i) the median of the 20192021 total compensation of all of our employees (excluding our CEO), as determined under SEC rules; (ii) the 20192021 total compensation of our CEO; and (iii) the ratio of our CEO’s 20192021 total compensation to the median of the 20192021 total compensation of all other employees. As indicated in the table, the ratio of our CEO’s annual total compensation to the median annual total compensation of all other employees is 63.15:67.44:1.
Principal Position
| Year
| Salary
| Share Awards
| Non-Equity Incentive
| All Other
| Total
| ||||||||||||||||||
CEO | 2021 | $ | 750,000 | $ | 3,375,006 | $ | 1,950,000 | $ | 14,038 | $ | 6,089,044 | |||||||||||||
Median Employee | 2021 | $ | 75,953 | $ | 4,996 | $ | 8,000 | $ | 1,342 | $ | 90,291 | |||||||||||||
Ratio | 67.44:1 |
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Principal Position | Year | Salary | Share Awards | Non-Equity Incentive | All Other Compensation | Total |
CEO | 2019 | $750,000 | $2,867,485 | $1,650,000 | $67,701 | $5,335,186 |
Median Employee | 2019 | $71,506 | $5,000 | $7,208 | $777 | $84,491 |
| Ratio | 63.15:1 |
BRANDYWINE REALTY TRUST |
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Security Ownership of Certain Beneficial Owners and Management
The following table shows the number of common shares (and common shares for which Class A Units of Brandywine Operating Partnership, L.P. may be exchanged) beneficially owned as of March 17, 2020 by each Trustee and nominee to the Board, by each named executive officer, by all Trustees and executive officers as a group, and by each person known to us to be the beneficial owner of more than 5% of the outstanding common shares. Except as indicated below, to our knowledge, all of such common shares are owned directly, and the indicated person has sole voting and investment power.
Name and Business Address of Beneficial Owner (1) | Number of | Percentage of |
The Vanguard Group, Inc. (2) | 26,540,521 | 15.03% |
FMR LLC (3) | 14,947,221 | 8.46% |
BlackRock, Inc. (4) | 12,711,149 | 7.20% |
Security Capital Research & Management Inc (5) | 9,441,765 | 5.35% |
Gerard H. Sweeney (6) | 1,646,270 | * |
Thomas E. Wirth (7) | 179,923 | * |
Henry J. DeVuono (8) | 188,128 | * |
George D. Johnstone (9) | 218,409 | * |
William D. Redd (10) | 95,689 | * |
Michael J. Joyce | 77,548 | * |
James C. Diggs | 42,363 | * |
Wyche Fowler (11) | 74,234 | * |
H. Richard Haverstick, Jr. | 23,848 | * |
Terri A. Herubin | 12,285 | * |
Anthony A. Nichols, Sr. | 72,445 | * |
Charles P. Pizzi | 56,691 | * |
All Trustees and Executive Officers as a Group (12 persons) | 2,678,832 | 1.52% |
* Less than one percent.
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Proposal 2:Ratification of the
Appointment of Independent
Registered Public Accounting Firm
The Audit Committee has appointed PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020.2022. PricewaterhouseCoopers LLP was first engaged as our independent registered public accounting firm in June 2003 and has audited our financial statements for fiscal 2002 through and including 2019.2021.
In selecting PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020,2022, the Audit Committee considered a number of factors, including: (i) the professional qualifications of PricewaterhouseCoopers LLP, the lead audit partner and other key engagement team members; (ii) the results of management’s and the Audit Committee’s annual evaluations of the performance and independence of PricewaterhouseCoopers LLP; (iii) the quality of the Audit Committee’s ongoing discussions with PricewaterhouseCoopers LLP, including the professional resolution of accounting and financial reporting matters with the national office; and (iv) the appropriateness of PricewaterhouseCoopers LLP’s fees in light of our size and complexity.
Although shareholder ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm is not required by our bylaws or otherwise, our Board has decided to afford our shareholders the opportunity to express their opinions on the matter of our independent registered public accounting firm. Ratification of the appointment of PricewaterhouseCoopers LLP requires the affirmative vote of a majority of all votes cast on the matter. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time if it determines that such a change would be in our best interests and those of our shareholders. If our shareholders do not ratify the appointment, the Audit Committee will take that fact into consideration, together with such other information as it deems relevant, in determining its next selection of an independent registered public accounting firm.
Representatives of PricewaterhouseCoopers LLP will be present at the Meeting to make any statement they may desire and to respond to appropriate questions from shareholders.
The Board of Trustees unanimously recommends a vote FOR Proposal 2 to ratify the appointmentof PricewaterhouseCoopers LLP as our independent registered public accounting firm forcalendar year 2020.2022.
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2020 PROXY STATEMENT
Fees to Independent RegisteRegisteredred
Public Accounting Firm
Audit Fees. For 2019,2021, we incurred audit fees of $1,531,592$1,233,000 in aggregate payable to our independent registered public accounting firm, PricewaterhouseCoopers LLP. These fees include: (i) recurring audit and quarterly review fees of $1,408,317$1,133,000 for both us, our operating partnership and our affiliates and (ii) fees of $123,275$100,000 related to the adoption and auditing of new accounting pronouncements and other nonrecurring items. For 2018,2020, we incurred audit fees of $1,258,502$1,225,115 in aggregate payable to our independent registered public accounting firm, PricewaterhouseCoopers LLP. These fees include: (i) recurring audit and quarterly review fees of $1,031,846$1,100,000 for both us, our operating partnership and our affiliates and (ii) fees of $226,656$125,115 related to the adoption and auditing of new accounting pronouncements and other nonrecurring items.
Audit-Related Fees. For 20192021 and 2018,2020, we did not incur audit-related fees.
Tax Fees. We did not pay PricewaterhouseCoopers LLP fees for tax services in 20192021 or 20182020 or engage PricewaterhouseCoopers LLP for tax services in 20192021 or 2018.2020.
All Other Fees. We did not engage PricewaterhouseCoopers LLP for other services in 20192021 or 2018.2020.
Pre-Approval Policy. All services provided by PricewaterhouseCoopers LLP in 20192021 and 20182020 were pre-approved by our Audit Committee, which concluded that the provision of such services by PricewaterhouseCoopers LLP was compatible with the maintenance of that firm’s independence in the conduct of its auditing functions. The Audit Committee has adopted a pre-approval policy for services provided by the independent registered public accounting firm. Under the policy, the Audit Committee has pre-approved the provision by the independent registered public accounting firm of services that fall within specified categories (such as statutory audits or financial audit work for subsidiaries, services associated with SEC registration statements and consultations by management as to accounting interpretations) but only up to specified dollar amounts. Any services that exceed the pre-approved dollar limits, or any services that fall outside of the general pre-approved categories, require specific pre-approval by the Audit Committee. If the Audit Committee delegates pre-approval authority to one or more of its members, the member would be required to report any pre-approval decisions to the Audit Committee at its next meeting.
We have been advised by PricewaterhouseCoopers LLP that neither the firm, nor any member of the firm, has any financial interest, direct or indirect, in any capacity in us or any of our subsidiaries.
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BRANDYWINE REALTY TRUST
Report of the AuditAudit Committee
The Audit Committee is comprised of independent trustees as required by the listing standards of the New York Stock Exchange. The role of the Audit Committee is to appoint, retain, and oversee our independent registered public accounting firm, which is currently PricewaterhouseCoopers LLP, and to oversee Brandywine’s financial reporting process on behalf of the Board of Trustees. Management of Brandywine has the primary responsibility for the preparation of Brandywine’s consolidated financial statements as well as executing Brandywine’s financial reporting process, principles, and internal controls. The independent registered public accounting firm is responsible for performing an audit of
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Brandywine’s consolidated financial statements and internal controls over financial reporting, and expressing an opinion as to the conformity of such consolidated financial statements with US generally accepted accounting principles, and management’s assessment of and the effectiveness of Brandywine’s internal controls over financial reporting.
During fiscal year 2019,2021, the Audit Committee of the Board of Trustees reviewed the quality and integrity of Brandywine’s consolidated financial statements, the effectiveness of Brandywine’s system of internal control over financial reporting, Brandywine’s compliance with legal and regulatory requirements, the qualifications and independence of Brandywine’s independent registered public accounting firm, the performance of Brandywine’s internal audit function and independent registered public accounting firm and other significant financial matters.
The Audit Committee’s work is guided by a written charter that the Board has approved. The Audit Committee regularly reviews its charter to ensure that it is meeting all relevant audit committee policy requirements of the SEC, the Public Company Accounting Oversight Board and the New York Stock Exchange. You can access the Audit Committee charter by clicking on “Corporate Governance” in the “Investor” section of Brandywine’s Internet site at www.brandywinerealty.com or by writing to Brandywine at Brandywine Realty Trust, 2929 WalnutArch Street, Suite 1700,1800, Philadelphia, Pennsylvania 19104, Attention: Shawn Neuman.
The Audit Committee has reviewed and discussed with management and PricewaterhouseCoopers LLP, Brandywine’s independent registered public accounting firm, the audited consolidated financial statements of Brandywine and its operating partnership and their internal controls over financial reporting. The Audit Committee has discussed with PricewaterhouseCoopers LLP the matters required to be discussed by AS 1301 (Communications with Audit Committees), as adopted by the Public Company Accounting Oversight Board and approved by the SEC.
The Audit Committee has received and reviewed the written disclosures and the letter from PricewaterhouseCoopers LLP required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountant’s communications with the Audit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence from Brandywine. Based on the review and discussions noted above, the Audit Committee recommended to the Board that the audited consolidated financial statements of Brandywine and its operating partnership be included in their Annual Report on Form 10-K for the fiscal year ended December 31, 2019,2021, and be filed with the SEC.
Submitted by:
H. Richard Haverstick, Jr. (Chair)
James C. Diggs
Michael J. Joyce
Terri A. Herubin
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BRANDYWINE REALTY TRUST |
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BRANDYWINE REALTY TRUST
Advisory Vote on
Executive Compensation
The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, requires us to enable our shareholders to vote to approve, on an advisory (non-binding) basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules.
As described in detail above under the heading “Executives and Executive Compensation —- Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, retain and motivate our named executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of annual and long-term strategic and corporate goals, and the realization of increased shareholder value. Please read the “Compensation Discussion and Analysis” and “Compensation Tables and Related Information” for additional details about our executive compensation programs, including information about the fiscal year 20192021 compensation of our named executive officers.
We are asking our shareholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay”“say-on-pay” proposal, gives our shareholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following resolution at the Annual Meeting:
“RESOLVED, that the Company’s shareholders approve, on an advisory and non-binding basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 20202022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 20192021 Summary Compensation Table and the other related tables and disclosure.”
The say-on-pay vote is advisory, and therefore not binding on us, our Board of Trustees, or its Compensation Committee. Our Board of Trustees and its Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.
The Board of Trustees unanimously recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission.
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2020 PROXY STATEMENT
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BRANDYWINE REALTY TRUST
Security Ownership of Certain Beneficial Owners and Management
The following table shows the number of common shares (and common shares for which Class A Units of Brandywine Operating Partnership, L.P. may be exchanged) beneficially owned as of March 7, 2022 by each Trustee to the Board, by each named executive officer, by all Trustees and executive officers as a group, and by each person known to us to be the beneficial owner of more than 5% of the outstanding common shares. Except as indicated below, to our knowledge, all of such common shares are owned directly, and the indicated person has sole voting and investment power.
Name and Business Address of Beneficial Owner (1) | Number of Common Shares | Percentage of Common Shares | ||
BlackRock, Inc. (2) | 33,221,207 | 19.38% | ||
The Vanguard Group, Inc. (3) | 28,106,855 | 16.40% | ||
State Street Corporation (4) | 11,773,105 | 6.87% | ||
JPMorgan Chase & Co. (5) | 11,010,680 | 6.42% | ||
Gerard H. Sweeney (6) | 1,698,343 | * | ||
Thomas E. Wirth (7) | 245,127 | * | ||
Henry J. DeVuono (8) | 230,487 | * | ||
George D. Johnstone (9) | 279,557 | * | ||
William D. Redd (10) | 165,231 | * | ||
Michael J. Joyce | 87,040 | * | ||
Reginald DesRoches | 6,939 | * | ||
James C. Diggs | 59,355 | * | ||
H. Richard Haverstick, Jr. | 40,840 | * | ||
Terri A. Herubin | 29,277 | * | ||
Charles P. Pizzi | 73,683 | * | ||
All Trustees and Executive Officers as a Group (13 persons) | 3,022,846 | 1.76% |
* Less than one percent.
(1) | Unless indicated otherwise, the business address of each person listed is 2929 Arch Street, Suite 1800, Philadelphia, Pennsylvania 19104. |
(2) | Information regarding beneficial ownership of our common shares by BlackRock, Inc. is included herein based on Amendment No. 11 to Schedule 13G filed with the SEC on January 27, 2022, relating to such shares beneficially owned as of December 31, 2021. BlackRock, Inc. has an address of 55 East 52nd Street, New York, New York 10055. Such report provides that BlackRock, Inc. is the beneficial owner of 33,221,207 common shares and has sole dispositive power over all of such shares and sole power to vote 30,964,294 of such shares. |
(3) | Information regarding beneficial ownership of our common shares by The Vanguard Group, Inc. is included herein based on Amendment No. 16 to Schedule 13G filed with the SEC on February 9, 2022, relating to such shares beneficially owned as of December 31, 2021. Vanguard has an address of 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Such report provides that The Vanguard Group, Inc. is the beneficial owner, in aggregate, of 28,106,855 common shares, with sole dispositive power over 27,640,829 of such shares and shared dispositive power over 466,026 of such shares and with sole power to vote none of such shares and shared power to vote 305,101 of such shares. |
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(4) | Information regarding beneficial ownership of our common shares by State Street Corporation is included herein based on the Amendment to Schedule 13G filed with the SEC on February 10, 2022, relating to such shares beneficially owned as of December 31, 2021. State Street Corporation has an address of One Lincoln Street, Boston, Massachusetts 02111. Such report provides that State Street Corporation is the beneficial owner of 11,773,105 common shares with shared dispositive power over all of such shares and shared power to vote 10,314,313 of such shares. |
(5) | Information regarding beneficial ownership of our common shares by JPMorgan Chase & Co. is included herein based on Schedule 13G filed with the SEC on January 19, 2022, relating to such shares beneficially owned as of December 31, 2021. JPMorgan Chase & Co. has an address of 383 Madison Avenue, New York, New York 10179. Such report provides that JPMorgan Chase & Co. is the beneficial owner, in aggregate, of 11,010,680 common shares, with sole dispositive power over 11,010,075 of such shares and shared dispositive power over 15 of such shares and with sole power to vote 9,760,721 of such shares and shared power to vote none of such shares. |
(6) | Includes (a) 1,024,286 common shares, (b) 46,666 common shares subject to vested options, (c) 238,849 common shares subject to restricted common share rights (of which 169,566 are not forfeitable due to the executive’s retirement eligibility but subject to delayed delivery), and (d) 388,542 common shares credited to Mr. Sweeney’s account in the deferred compensation plan. |
(7) | Includes (a) 69,065 common shares, (b) 24,001 common shares subject to restricted common share rights vesting within 60 days, and (c) 152,061 common shares credited to Mr. Wirth’s account in the deferred compensation plan. |
(8) | Includes (a) 36,260 common shares, (b) 17,122 common shares subject to restricted common share rights vesting within 60 days, and (c) 177,105 common shares credited to Mr. DeVuono’s account in the deferred compensation plan. |
(9) | Includes (a) 101,960 common shares, (b) 52,142 common shares subject to restricted common share rights (of which 37,960 are not forfeitable due to executive’s retirement eligibility but subject to delayed delivery), and (c) 125,455 common shares credited to Mr. Johnstone’s account in the deferred compensation plan. |
(10) | Includes (a) 108,039 common shares, (b) 54,811 common shares subject to restricted common share rights (of which 39,500 are not forfeitable due to the executive’s retirement eligibility but subject to delayed delivery), and (c) 2,381 common shares credited to Mr. Redd’s account in the deferred compensation plan. |
Certain Relationships and Related Party Transactions
Other than compensation and other arrangements described above under “Trustee Compensation,” “Executives and Executive Compensation” and as set forth below, since January 1, 2019,2021, there was not, nor is there currently planned, any transaction or series of similar transactions to which we were or will be a party in which:
| the amount involved exceeded or will exceed $120,000; and |
| any trustee, nominee, executive officer, holder of more than 5% of our common shares or any member of their immediate family had or will have a direct or indirect material interest. |
We refer to these types of transactions as “related party transactions.”
Policies and Procedures for Review, Approval or Ratification of Related Party Transactions
Our Audit Committee’s charter provides for review by the Audit Committee of related party transactions. In addition, our Declaration of Trust provides for approval of transactions in which any of our Trustees has an interest by a majority of our Trustees who have no interest in the transaction. Therefore, related party transactions with a Trustee require both review by our Audit Committee and approval by a majority of our Trustees who have no interest in the transaction. While our Declaration of Trust and our Audit Committee charter do not dictate the criteria or standards that our Trustees must
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follow in approving related party transactions, the Audit Committee and other independent Trustees will consider the relevant facts and circumstances available and deemed relevant, including, but not limited to, the risks, costs and benefits to us, the terms of the transaction, the availability of other sources for comparable services or products, and, if applicable, the impact on a Trustee’s independence. Accordingly, our Trustees consider related party transactions in light of their duties under Maryland law.
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2020 PROXY STATEMENT
Kathleen Sweeney-Pogwist, who has served as a Senior Vice President of Leasing of the Company (a non-executive officer position) since 2006, is the sister of Gerard H. Sweeney, our President and Chief Executive Officer. From 1998 to 2006, Ms. Sweeney-Pogwist was a leasing agent for the Company. Ms. Sweeney-Pogwist’s employment with the Company, in light of her relationship to Mr. Sweeney, has been reviewed and approved by our independent Trustees each year. Ms. Sweeney-Pogwist earned total compensation of approximately $348,486$382,456 in 2019, inclusive2021, comprised of base salary compensation expense associated with restricted common share awards, and commissions paid based on actual leasing activity and business plan achievement in accordance with the Company'sCompany’s standard commission practices as applied to each of our of leasing agents. Ms. Sweeney-Pogwist’s compensation structure is consistent with other leasing personnel with similar responsibilities. The Company believes that the above employment relationship is in our best interests and on terms no less favorable to us than could have been obtained in arms-length negotiations with unaffiliated third parties.
Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 requires our officers, Trustees and persons who own more than 10% of our common shares to file reports of ownership and changes in ownership with the SEC. Officers, Trustees and greater than 10% shareholders are required by regulation to furnish us with copies of all Section 16(a) forms they file. Based solely on a review of the copies of such forms furnished to us, or written representations that no Annual Statements of Beneficial Ownership of Securities on Form 5 were required to be filed, we believe that during the year ended December 31, 2019, our officers, Trustees and greater than 10% shareholders complied with all applicable Section 16(a) filing requirements, except for a late Form 4 filed for H. Jeffrey DeVuono.
Proposals Pursuant to SEC Rule 14a-8
Under rules of the Securities and Exchange Commission, any of our shareholders wishing to have a proposal considered for inclusion in our 20212023 proxy solicitation materials must set forth such proposal in writing and file it with our Secretary on or before the close of business on November 27, 2020. December 1, 2022.However, if the date of the 20212023 Annual Meeting is more than 30 days before or after May 20, 2021,18, 2023, then the deadline for submitting any shareholder proposal for inclusion in the proxy materials relating to such Annual Meeting will be a reasonable time before we begin to print or mail such proxy materials. The inclusion of any such shareholder proposals in such proxy materials will be subject to the requirements of the proxy rules adopted under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended, including Rule 14a-8.
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BRANDYWINE REALTY TRUST
Proxy Access TrusteeTrustee Nominees
Pursuant to the proxy access provisions of our Bylaws, our shareholders are entitled to nominate and include in our proxy materials Trustee nominees, provided that the eligibility and procedural requirements specified in our Bylaws, including advance notice requirements, are satisfied. The notice must be delivered to the Secretary at our principal executive offices, at the address set forth above, not less than 120 days nor more than 150 days prior to the anniversary of the date of our proxy statement in connection with the most recent annual meeting of shareholders. As a result, any notice given by a shareholder pursuant to the proxy access provisions of our Bylaws with respect to the 20212023 Annual Meeting must be received no earlier than the close of business on October 28, 2020,November 1, 2022, and no later than the close of business on November 27, 2020.December 1, 2022. However, in the event that the date of the 20212023 Annual Meeting is more than 30 days before or after May 20, 2021,18, 2023, then the notice, to be timely, must be delivered not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the date of the 20212023 Annual Meeting (or, if the first public announcement of the meeting is less than 160 days prior to the date of the meeting, the tenth day following the day on which the meeting is publicly announced).
The complete requirements for submitting a nominee for inclusion in our proxy materials are set forth in our Bylaws, a copy of which may be obtained upon request directed to the Secretary at our principal executive offices at the address set forth above or on our website (www.brandywinerealty.com).
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Any shareholder who wishes to propose any business to be considered by the shareholders at the 20212023 Annual Meeting or who wants to nominate a person for election to the Board of Trustees at that meeting, other than (i) a proposal for inclusion in the Proxy Statement pursuant to Securities and Exchange Commission regulations or (ii) pursuant to the proxy access Bylaw provisions, in each case as described above, must provide a written notice that sets forth the specified information described in our Bylaws concerning the proposed business or nominee. The notice must be delivered to the Secretary at our principal executive offices, at the address set forth above, not less than 120 days nor more than 150 days prior to the anniversary of the date of our proxy statement in connection with the most recent annual meeting of shareholders. As a result, any notice given by a shareholder pursuant to the proxy access provisions of our Bylaws with respect to the 20212023 Annual Meeting must be received no earlier than the close of business on October 28, 2020,November 1, 2022, and no later than the close of business on November 27, 2020.December 1, 2022. However, in the event that the date of the 20212023 Annual Meeting is more than 30 days before or after May 22, 2021,18, 2023, then the notice, to be timely, must be delivered not earlier than the close of business on the 150th day and not later than the close of business on the 120th day prior to the date of the 20212023 Annual Meeting (or, if the first public announcement of the meeting is less than 160 days prior to the date of the meeting, the tenth day following the day on which the meeting is publicly announced).
The complete requirements for the notice are set forth in our Bylaws, a copy of which may be obtained upon request directed to the Secretary at our principal executive offices at the address set forth above or on our website ( www.brandywinerealty.com).
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of trustee nominees other than our nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 19, 2023.
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2020 PROXY STATEMENT
Review of Shareholder Proposals;Proposals; Other Business
Our Board of Trustees will review any shareholder proposals and nominations that are made according to the procedures described above and, with the assistance of the Secretary, will determine whether such proposals and nominations meet applicable criteria for inclusion in our proxy solicitation materials or consideration at the Annual Meeting. In addition, we retain discretion to vote proxies on matters of which we are not properly notified at our principal executive offices on or before the close of business on the applicable shareholder proposal filing deadline and also retain that authority under certain other circumstances.
We know of no business that will be presented at the Meeting other than as set forth in this Proxy Statement and our Bylaws do not allow proposals to be presented at the Meeting unless they were properly presented to us prior to December 4, 2019.1, 2021. However, if other matters should properly be presented at the Meeting, it is the intention of the persons named in the proxy card to vote in accordance with their best judgment on such matters.
The expense of solicitation of proxies on behalf of the Trustees, including printing and postage, will be paid by us. Request will be made of brokerage houses and other custodians, nominees and fiduciaries to forward the solicitation material, at our expense, to the beneficial owners of common shares held of record by such persons. In addition to being solicited through the mails, proxies may also be solicited personally or by telephone by our Trustees and officers. In addition, we have engaged Georgeson Inc. to solicit proxies for the Meeting. We have agreed to pay $8,500 plus out-of-pocket expenses of Georgeson Inc. for these services.
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2020 PROXY STATEMENT
Appendix A:Reconciliation of Non-GAAP
Financial MeasuresMeasures to GAAP Measures (unaudited,
(unaudited, in thousands)
Twelve Months Ended December 31, 20192021
RECONCILIATION OF NET INCOME TO FUNDS FROM OPERATIONS | ||||
Net income attributable to common shareholders | $ | |||
Add (deduct): | ||||
|
| 80 | ||
|
| 421 | ||
|
| (2,973) | ||
|
| (142) | ||
|
| 696 | ||
| ||||
|
| 144,261 | ||
|
| 31,698 | ||
|
| 52,455 | ||
|
| (20) | ||
Funds from operations | $ | |||
|
| (705) | ||
Funds from operations available to common share and unit holders (FFO) | $ | |||
FFO per share - fully diluted | $ | |||
Plus: capital market, transactional items and other |
| (5,379) | ||
FFO, excluding capital market, transaction items and other | $ | |||
FFO per share, excl. capital market, transaction items and other - fully diluted | $ | |||
Weighted-average shares/units outstanding - fully diluted |
| 173,165,898 |
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BRANDYWINE REALTY TRUST |
| |||
CASH AVAILABLE FOR DISTRIBUTION |
| |||
Funds from operations available to common share and unit holders | $ | 237,639 | ||
Add (deduct): | ||||
◾ Rental income from straight-line rent net of straight-line rent termination fees | (13,486) | |||
◾ Amortization of tenant inducements | 983 | |||
◾ Deferred market rental income | (5,377) | |||
◾ Company’s share of unconsolidated real estate ventures’ straight-line & deferred market rent | (8,669) | |||
◾ Straight-line ground rent expense | 1,122 | |||
◾ Stock-based compensation costs | 7,280 | |||
◾ Net gain on sale of undepreciated real estate | (2,903) | |||
◾ Income tax provision | 47 | |||
Subtotal certain items | (21,003) | |||
Less: Revenue maintaining capital expenditures | ||||
◾ Building improvements | (6,215) | |||
◾ Tenant improvements | (25,269) | |||
◾ Lease commissions | (13,548) | |||
Total revenue maintaining capital expenditures | $ | (45,032) | ||
Cash available for distribution (CAD) | $ | 171,604 | ||
Total distributions paid | 130,929 | |||
Distributions paid per common share | $ | 0.76 | ||
CAD payout ratio (Distributions paid per common share /CAD) | 76.3% |
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APPENDIX A
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| |
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
APPENDIX A
2020 PROXY STATEMENT
BRANDYWINE REALTY TRUST SAME STORE
OPERATIONS –- TWELVE MONTHS
(unaudited and in thousands)
Of the 9581 properties owned by the Company as of December 31, 2019,2021, a total of 73 properties ("(“Same Store Properties"Properties”) containing an aggregate of 13.912.5 million net rentable square feet were owned for the entire twelve‐monthtwelve-month periods ended December 31, 20192021 and 2018.2020. Average occupancy for the Same Store Properties was 92.5%90.2% during 20192021 and 92.9%91.2% during 2018.2020. The following table sets forth revenue and expense information for the Same Store Properties:
Twelve Months Ended December 31
2021
| 2020
| |||||||
REVENUE
| ||||||||
◾ Rents
| $
| 422,173
|
| $
| 417,233
|
| ||
◾ Other
|
| 943
|
|
| 870
|
| ||
TOTAL REVENUE
|
| 423,116
|
|
| 418,103
|
| ||
Operating expenses
| ||||||||
◾ Property operating expenses
|
| 108,957
|
|
| 106,643
|
| ||
◾ Real estate taxes
|
| 50,470
|
|
| 50,389
|
| ||
Net operating income
| $
| 263,689
|
| $
| 261,071
|
| ||
Net operating income - percentage change over prior year
|
| 1.0%
|
| |||||
Net operating income, excluding other items
| $
| 260,598
|
| $
| 259,600
|
| ||
Net operating income, excluding other items - percentage change over prior year
|
| 0.4%
|
| |||||
NET OPERATING INCOME
| $
| 263,689
|
| $
| 261,071
|
| ||
◾ Straight line rents & other
|
| (10,218)
|
|
| (14,336)
|
| ||
◾ Above/below market rent amortization
|
| (3,900)
|
|
| (4,316)
|
| ||
◾ Amortization of tenant inducements
|
| 983
|
|
| 829
|
| ||
◾ Non-cash ground rent expense
|
| 820
|
|
| 835
|
| ||
CASH - NET OPERATING INCOME
| $
| 251,374
|
| $
| 244,083
|
| ||
Cash - Net operating income - percentage change over prior year
|
| 3.0%
|
| |||||
Cash - Net operating income, excluding other items
| $
| 246,695
|
| $
| 240,540
|
| ||
Cash - Net operating income, excluding other items - percentage change over prior year
|
|
2.6%
|
|
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| 2019 | 2018 |
REVENUE |
|
|
▪Rents | $443,212 | $442,671 |
▪Other | 1,824 | 1,648 |
TOTAL REVENUE | 445,036 | 444,319 |
Operating expenses |
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▪Property operating expenses | 126,732 | 128,467 |
▪Real estate taxes | 45,166 | 41,816 |
Net operating income | $273,138 | $274,036 |
Net operating income - percentage change over prior year | -0.3% |
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Net operating income, excluding net termination fees & other | $269,357 | $270,625 |
Net operating income, excluding net termination fees & other - | -0.5% |
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NET OPERATING INCOME | $273,138 | $274,036 |
▪Straight line rents & other | (5,253) | (10,050) |
▪Above/below market rent amortization | (1,406) | (1,654) |
▪Amortization of tenant inducements | 897 | 968 |
▪Non-cash ground rent | 850 | 165 |
CASH - NET OPERATING INCOME | $268,226 | $263,465 |
Cash - Net operating income - percentage change over prior year | 1.8% |
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Cash - Net operating income, excluding net termination fees & other | $263,216 | $259,329 |
Cash - Net operating income, excluding net termination fees & other - | 1.5% |
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BRANDYWINE REALTY TRUST |
APPENDIX A
100
BRANDYWINE REALTY TRUST
Twelve Months Ended December 31
2021
| 2020
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Net income: | $ | 12,366 | $ | 307,326 | ||||
Add/(deduct): | ||||||||
◾ Interest income | (8,295 | ) | (1,939 | ) | ||||
◾ Interest expense | 62,617 | 73,911 | ||||||
◾ Interest expense - amortization of deferred financing costs | 2,836 | 2,904 | ||||||
◾ Equity in loss of unconsolidated real estate ventures | 26,697 | 18,584 | ||||||
◾ Net gain on real estate venture transactions | (2,973 | ) | (75 | ) | ||||
◾ Net gain on disposition of real estate | (142 | ) | (289,461 | ) | ||||
◾ Net gain on sale of undepreciated assets | (2,903 | ) | (201 | ) | ||||
◾ Depreciation and amortization | 178,105 | 188,283 | ||||||
◾ General & administrative expenses | 30,153 | 30,288 | ||||||
◾ Income tax provision (benefit) | 47 | (224 | ) | |||||
Consolidated net operating income | 298,508 | 329,396 | ||||||
Less: Net operating income of non-same store properties and elimination of non-property specific operations | (34,819 | ) | (68,325 | ) | ||||
Same store net operating income | $ | 263,689 | $ | 261,071 |
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| 2019 | 2018 |
Net income: | $34,529 | $135,472 |
Add/(deduct): |
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▪Interest income | (2,318) | (4,703) |
▪Interest expense | 81,512 | 78,199 |
▪Interest expense - amortization of deferred financing costs | 2,768 | 2,498 |
▪Equity in loss of real estate ventures | 9,922 | 15,231 |
▪Net gain on real estate venture transactions | (11,639) | (142,233) |
▪Net gain on disposition of real estate | (356) | (2,932) |
▪Net gain on sale of undepreciated assets | (2,020) | (3,040) |
▪Gain on promoted interest in unconsolidated real estate venture | - | (28,283) |
▪Loss on early extinguishment of debt | - | 105 |
▪Depreciation and amortization | 210,005 | 176,000 |
▪General & administrative expenses | 32,156 | 27,802 |
▪Income tax provision | 12 | 423 |
▪Provision for impairment | - | 71,707 |
Consolidated net operating income | 354,571 | 326,246 |
Less: Net operating income of non-same store properties and | (81,433) | (52,210) |
Same store net operating income | $273,138 | $274,036 |
2022 PROXY STATEMENT |
APPENDIX A
2020 PROXY STATEMENT
Twelve Months Ended December 31, 20192021
EBITDA COVERAGE RATIOS | ||||||||||||||
Net income | $ | 12,366 | ||||||||||||
Add (deduct): | ||||||||||||||
◾ | Net gain on disposition of real estate | (142) | ||||||||||||
◾ | Net gain on real estate venture transactions | (2,973) | ||||||||||||
◾ | Income tax provision | 47 | ||||||||||||
◾ | Provision for impairment on investment in unconsolidated real estate venture | 696 | ||||||||||||
◾ | Interest expense | 62,617 | ||||||||||||
◾ | Interest expense - amortization of deferred financing costs | 2,836 | ||||||||||||
◾ | Interest expense - share of unconsolidated real estate ventures | 16,297 | ||||||||||||
◾ | Depreciation and amortization | 178,105 | ||||||||||||
◾ | Depreciation and amortization - share of unconsolidated real estate ventures | 52,455 | ||||||||||||
NAREIT EBITDA | $ | 322,304 | ||||||||||||
Capital market, transactional and other items | ||||||||||||||
◾ | Net gain on sale of undepreciated real estate | (2,903) | ||||||||||||
◾ | Stock-based compensation costs | 7,280 | ||||||||||||
◾ | Liability management (buybacks, tenders and prepayments) | 337 | ||||||||||||
◾ | Preferred equity partners’ share of EBITDA | 1,897 | ||||||||||||
◾ | Partners’ share of consolidated real estate ventures interest expense | (4) | ||||||||||||
◾ | Partners’ share of consolidated real estate ventures depreciation and amortization | (20) | ||||||||||||
EBITDA, excluding capital market, transactional and other items | $ | 328,891 | ||||||||||||
EBITDA, excluding capital market, transactional and other items/Total revenue | 67.6% | |||||||||||||
◾ | Interest expense (from above) | 62,617 | ||||||||||||
◾ | Interest expense - share of unconsolidated real estate ventures | 16,297 | ||||||||||||
◾ | Interest expense - partners’ share of consolidated real estate ventures | (4) | ||||||||||||
Total interest expense | (a) | $ | 78,910 | |||||||||||
◾ | Scheduled mortgage principal payments - share of unconsolidated real estate ventures | 4,637 | ||||||||||||
Total scheduled mortgage principal payments |
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(b) |
| $ | 4,637 | |||||||||
EBITDA (excluding capital market, transactional and other items) coverage ratios: | ||||||||||||||
◾ | Interest coverage ratio = EBITDA divided by (a) | 4.2 | ||||||||||||
◾ | Debt service coverage ratio = EBITDA divided by (a) + (b) | 3.9 | ||||||||||||
◾ | Ratio of net debt (including the Company’s share of unconsolidated real estate venture net debt) to annualized quarterly EBITDA, excluding capital market, transaction, and other items | 6.5 |
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BRANDYWINE REALTY TRUST |
BRANDYWINE REALTY TRUST 2929 ARCH STREET SUITE 1800 PHILADELPHIA, PA 19104 |
VOTE BY INTERNET Before The Meeting -Go towww.proxyvote.com or scan the QR Barcode above
| Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
During The Meeting - Go to www.virtualshareholdermeeting.com/BDN2022 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
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— — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
APPENDIX A
102
BRANDYWINE REALTY TRUST
APPENDIX A
VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/BDN2020 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: D05738-P35769 KEEPDETACH AND RETURN THIS PORTION FOR YOUR RECORDS ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY BRANDYWINE REALTY TRUST The Board of Trustees recommends you vote FOR the following: 1. Election of Trustees Nominees: For Against Abstain 1a. James C. Diggs ! ! ! The Board of Trustees recommends you vote FOR proposals 2 and 3. 2. Ratification of the Audit Committee's appointment For Against Abstain 1b. Wyche Fowler 1c. H. Richard Haverstick, Jr. ! ! ! ! ! ! of PricewaterhouseCoopers LLP as our independent ! ! ! registered public accounting firm for calendar year 2020. 3. Provide a non-binding, advisory vote on our executive compensation. 1d. Terri A. Herubin ! ! ! NOTE: Such other business as may properly come before the 1e. Michael J. Joyce ! ! ! meeting or any adjournment thereof shall be voted by the proxies appointed hereby in their discretion on the matter. 1f. Charles P. Pizzi ! ! ! 1g. Gerard H. Sweeney ! ! ! Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
BRANDYWINE REALTY TRUST | ||||||||||||||||||||||||||||||
The Board of Trustees recommends you vote FOR the following: | ||||||||||||||||||||||||||||||
1. Election of Trustees | ||||||||||||||||||||||||||||||
Nominees: | For | Against | Abstain | |||||||||||||||||||||||||||
1a. Reginald DesRoches | ☐ | ☐ | ☐ | The Board of Trustees recommends you vote FOR proposals 2 and 3. | For | Against | Abstain | |||||||||||||||||||||||
1b. James C. Diggs | ☐ | ☐ | ☐ | 2. Ratification of the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for calendar year 2022. | ☐ | ☐ | ☐ | |||||||||||||||||||||||
1c. H. Richard Haverstick, Jr. | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
1d. Terri A. Herubin | ☐ | ☐ | ☐ | 3. Provide a non-binding, advisory vote on our executive compensation. | ☐ | ☐ | ☐ | |||||||||||||||||||||||
1e. Michael J. Joyce | ☐ | ☐ | ☐ | NOTE: Such other business as may properly come before the meeting or any adjournment thereof shall be voted by the proxies appointed hereby in their discretion on the matter. | ||||||||||||||||||||||||||
1f. Charles P. Pizzi | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
1g. Gerard H. Sweeney | ☐ | ☐ | ☐ | |||||||||||||||||||||||||||
Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. D05739-P35769
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D69426-P67914
Brandywine Realty Trust Annual Meeting of Shareholders
May 20, 202018, 2022 at 10:00 a.m. EDT
The Logan Hotel
One Logan Square
Philadelphia, PA 19103
Shareholders may also attend online at:
www.virtualshareholdermeeting.com/BDN2022
Proxy Solicited on Behalf of the Board of Trustees
The undersigned shareholder of Brandywine Realty Trust, a Maryland real estate investment trust (the "Company"“Company”), hereby appoints Gerard H. Sweeney and Charles P. Pizzi, and each of them, acting individually, as proxies for the undersigned, with full power of substitution in each of them, to attend the Annual Meeting of the Shareholders of Brandywine Realty Trust to be held at 10:00 a.m. EDT on May 20, 2020,18, 2022, and at any postponement or adjournment thereof, to cast, on behalf of the undersigned, all votes that the undersigned is entitled to cast at such meeting and otherwise represent the undersigned at the meeting with all powers the undersigned would possess if personally present at the meeting.
This Proxy is solicited on behalf of the Board of Trustees. When properly executed, this Proxy will be voted in the manner directed by the undersigned shareholder. If this Proxy is executed but no direction is made, this Proxy will be voted "FOR"“FOR” the election of all trustees and "FOR"“FOR” each of proposals 2 and 3. This Proxy also delegates discretionary authority with respect to any other business which may properly come before the meeting or any postponement or adjournment thereof.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and of the accompanying Proxy Statement and revokes any Proxy previously submitted with respect to the meeting.
PLEASE REFER TO THE REVERSE SIDE FOR INTERNET AND TELEPHONE VOTING INSTRUCTIONS
Continued and to be signed on reverse side