UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
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☐ | | | Preliminary Proxy Statement | |||
☐ | | | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
☒ | | | Definitive Proxy Statement | |||
☐ | | | Definitive Additional Materials | |||
☐ | | | Soliciting Material under §240.14a-12 |
One Liberty Properties, Inc. |
(Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
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Fee paid previously with preliminary materials. | |||
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ONE LIBERTY PROPERTIES, INC.
60 Cutter Mill Road
Great Neck, New York 11021
(516) 466-3100
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 10, 20209, 2022
The annual meeting of stockholders of One Liberty Properties, Inc., a Maryland corporation (“we,” “us”, “our” or the “Company”), will be held at our offices, located at 60 Cutter Mill Road, Suite 303, Great Neck, NY, on Thursday, June 10, 20209, 2022 at 9:30 a.m., local time, to consider and vote on the following matters:
1. | The election of three Class 3 directors, each to serve until the |
2. |
A proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2022; |
3. |
4. |
Any other business |
The Board of Directors recommends that you vote “FOR” the election of each of the nominees listed in the accompanying proxy statement and “FOR” proposals 2 and 3, “FOR” the Charter Amendment Proposal and “FOR” the Bylaw Amendment Proposal.
3.
Holders of record of our common stock at the close of business on April 14, 2020March 31, 2022 are entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof.
It is important that your shares be represented and voted at the meeting. To assure that your vote will be counted, please complete, date and sign the enclosed proxy card and return it in the enclosed prepaid envelope, whether or not you plan to attend the meeting. Most stockholders can also vote by telephone or via the internet. Telephone and internet voting information is provided on the accompanying proxy card. Your proxy may be revoked in the manner described in the accompanying proxy statement at any time before it has been voted at the meeting.
| | By Order of the Board of Directors | |
| | ||
| | S. Asher Gaffney, Vice President and Corporate Secretary |
April ___, 202021, 2022
ONE LIBERTY PROPERTIES, INC.
PROXY STATEMENT |
Our boardBoard of directors, or the “board,”Directors is furnishing you with this proxy statement to solicit proxies on its behalf to be voted at the 20202022 annual meeting of stockholders of One Liberty Properties, Inc. The meeting will be held at our offices, 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021 on Friday,Thursday, June 10, 20209, 2022 at 9:30 a.m., local time.
Our telephone number is (516) 466-3100. The proxies will be voted at the meeting and may also be voted at any adjournments or postponements of the meeting.
All properly executed proxy cards, and all properly completed proxies submitted by telephone or by the internet, that are delivered pursuant to this solicitation, will be voted at the meeting in accordance with your directions, unless the proxy is properly revoked before the meeting.
In this proxy statement, we refer to One Liberty Properties, Inc. as “we”, “our”, “us”, “our company”, to our Board of Directors as the “board of directors” or “board” and to our shares of common stock as “common stock” or “shares”.
What is the purpose of the annual meeting?
At our annual meeting, stockholders will consider and vote on the following matters:
the election of three Class 3 directors, each to hold office until the 20232025 annual meeting and until their respective successors are duly elected and qualify;
ratification of the appointment of Ernst & Young LLP, or E&Y, as our independent registered public accounting firm for the year ending December 31, 2020;
a proposal to approve the Charter Amendment Proposal;
One Liberty Properties, Inc. 2022 Incentive Plan, which we refer to as the Bylaw Amendment Proposal;“Plan” or the “2022 Incentive Plan”; and
such other matters as may properly come before the meeting.
How does the Boardboard of Directorsdirectors recommend that I vote at the annual meeting?
Our Boardboard of Directorsdirectors recommends that you vote:
“FOR” the election of each of Charles Biederman, Patrick J. Callan, Jr.,the nominees listed in this proxy statement as a director (each, a “nominee” and Karen A. Till (collectivelycollectively, the “Nominees”“nominees”), each to hold office until the 2023 annual meeting and his or her successor is duly elected and qualifies;;
“FOR” the proposal to ratify the appointment of Ernst & Young LLPE&Y as our independent registered public accounting firm for the year ending December 31, 2020;
“FORFOR”” the Charter Amendment Proposal; and
The persons named as proxies will vote in their discretion on any other matter properly brought before the annual meeting.
Who is entitled to vote?
We are mailing this proxy statement on or about April [ ], 202025, 2022 to our stockholders of record as of the close of business on April 14, 2020,March 31, 2022, which we refer to as the record date. The record date was established by our boardboard. Stockholders of directors. Stockholdersrecord as of the close of business on the record date are entitled to receive notice of and to vote their shares at the meeting. Each outstanding share of common stock entitles the holder to cast one vote.vote
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on each matter considered at the meeting. As of the close of business on the record date, []21,120,936 shares of our common stock were outstanding and entitled to vote at the meeting.
Shares of our common stock constitute our only outstanding class of voting securities and will vote as a single class on all matters to be considered at the annual meeting.
How do I vote?
If your shares are registered directly in your name with our transfer agent, American Stock Transfer & Trust Co., LLC, you are considered the stockholder of record with respect to those shares and the proxy card was sent directly to you by us.our transfer agent. In that case, you may instruct the proxy holders named in the proxy card how to vote your shares of common stock in one of the following ways:
• | Vote online. You may vote online at www.voteproxy.com. To vote online, you must have your control number provided in the proxy card. |
Vote by telephone. You may vote by telephone by calling 1-800-PROXIES (1-800-776-9437). To vote by telephone, you must have the control number provided in your proxy card.
Vote by regular mail. If you would like to vote by mail, please mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided.
Vote by attending the meeting in person.
Proxies submitted over the internet, by telephone or by mail must be received by 11:59 p.m. New York City time, on June 9, 2020.8, 2022. If you vote by telephone or via the internet, it is not necessary to return your proxy card.
If your shares are held in an account at a brokerage firm, bank, broker-dealer, nominee or other similar organization, which we refer to collectively as an “Agent,” then you are the beneficial owner of shares held in “street name,” and a voting instruction form was or should have been forwarded to you by that organization.your Agent. As a beneficial owner, you have the right to instruct that organizationyour Agent on how to vote the shares held in your account. You should instruct your broker or nomineeAgent how to vote your shares by following the voting instructions provided by your broker or nominee.Agent. If you wish to vote in person at the annual meeting, you must contact the broker or nomineeyour Agent to obtain a legal proxy from the broker or nominee.
How will my shares be voted?
If you are a stockholder of record as of the close of business on the record date and you do not mark any selections but return the signed proxy card, your shares will be voted by the proxies named on the proxy card “FOR” each of the three Nominees, “FOR” the proposal to approve the non-binding advisory resolution regarding executive compensation,nominees listed in this proxy statement, “FOR” the proposal to ratify the appointment of Ernst & Young LLPE&Y as our independent registered public accounting firm for 2020 the year ending December 31, 2020, 2022 and ““FOR”FOR” the Charter Amendment Proposal and “FOR”proposal to approve the Bylaw Amendment Proposal.2022 Incentive Plan. If you are a stockholder of record as of the close of business on the record date and you return the signed proxy card, the proxy holders may vote in their discretion with respect to any other matters that properly come before the meeting. If any Nomineenominee named in this Proxy Statement is unwilling or unable to serve as a director, our Boardboard may nominate another individual for election as a director at the Annual Meeting,annual meeting, and the persons named as proxy holders will vote “FOR” the election of any substitute nominee.
If you are a stockholder of record as of the close of business on the record date and you wish to name as a proxy someone other than the proxies named on the proxy card, you may do so by crossing out the name of the designated proxies and inserting the name of another person. In that case, it will be necessary to sign the proxy card and deliver it to the person so named and for the person so named to be present at and vote at the meeting with the properly executed and marked proxy card. Proxy cards so marked should not be mailed to us or to American Stock Transfer and Trust Company, LLC.
If my shares are held in “street name” by my broker, bank, trust or other nominee,Agent, will my broker, bank, trust or other nomineethe Agent vote my shares without specific instructions from me?
Not in most circumstances. In the absence of your voting instructions, your broker, bank, trust or other nomineeAgent may only vote your shares in its discretion on “routine matters” and your nomineeAgent may not vote your shares on proposals that are not “routine.” We believe that the Auditor Ratification Proposalproposal to ratify the selection of E&Y is a routine matter on which nomineesyour Agent can vote on your behalf of their clients if clientsyou do not furnish voting instructions. All of the other Proposals are proposals may be considered
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non-routine matters so your nominee isAgent may not be entitled to vote your shares on these Proposalsproposals without your instructions. A broker non-vote occurs when an Agent does not vote on a particular proposal because the Agent does not have discretionary voting power for that particular matter and has not received instructions from the beneficial owner. If you hold your shares in street name and do not give the Agent specific voting instructions with respect to the proposals regarding the election of directors and the 2022 Plan, your shares will not be voted on those items, and a broker non-vote will occur. If your shares are held in “street name” by your broker, bank, trust or other nominee,Agent, you should follow the directions provided by your broker, bank, trust or other nomineeAgent in order to instruct them to how to vote your shares.
Who will count the vote?
A representative of our transfer agent, American Stock Transfer and Trust Company, LLC, or another person designated by or at the direction of our Boardboard or the chair of Directors,the annual meeting will tabulate the votes and act as inspector of elections.
Can I revoke my proxy before it is exercised?
If you hold stock directly in your name, you can revoke your proxy at any time before it is voted at the annual meeting by filing a written revocation with theour Office of ourthe Corporate Secretary, or delivering to American Stock Transfer and Trust Company, LLC a properly executed proxy bearing a later date. You may also revoke your proxy with a timely and valid later telephone or Internet vote or by attending the meeting and voting in person. If not so revoked, the shares represented by such proxy will be voted as instructed in the proxy.
If your shares are held in the name of a broker, bank or other nominee,your Agent, you must contact such nomineeAgent and comply with the nominee’sAgent’s procedures if you want to revoke or change the instructions that you previously provided to the nominee.
Attendance at the meeting will not by itself automatically revoke a previously granted proxy.
What constitutes a quorum?
A quorum is the presence in person or by proxy of stockholders holdingentitled to cast a majority of sharesthe votes entitled to votebe cast at the meeting.meeting on any matter. To constitute a quorum, the holders of at least [ ]10,560,469 shares must be present in person or by proxy at the meeting. Generally, action cannot be taken at the meeting unless a quorum is present.
Abstentions and brokers non-votes will be considered present for the purpose of determining the presence of a quorum.
Is my vote important?
If you do not submit a proxy or vote in person at the Annual Meeting,annual meeting, it will be more difficult for us to obtain the necessary quorum to hold the Annual Meeting. In addition, your failure to submit a proxy or to vote in person will have the same effect as a vote “AGAINST” the proposal regarding the election of each of the Nominees to serve as director, “AGAINST” the Charter Amendment Proposal, and “AGAINST” the Bylaw Amendment Proposal.
annual meeting.
How many votes does it take to approve the items to be voted upon?
The affirmative vote of the holders of a majority of the outstanding sharestotal votes cast “for” and “against” as to a nominee is required for the election of each Nominee, and the approval of Proposals 4.A and 4.B and the Bylaw Amendment Proposal.such nominee as director. Accordingly, abstentions and broker non-votes will have theno effect ofon the vote againstfor the election of such nominees and the approval of such proposals.
nominees.
The affirmative vote of a majority of all of the votes cast on the proposal is required for approval of the proposals relating to the non-binding advisory vote on executive compensation and to ratify the selection of Ernst & Young LLP.E&Y and to approve the 2022 Plan. For the purposes of the non-binding advisory vote on executive compensation,such votes, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the results of the vote. For the purposesresult of the vote on the selection of Ernst & Young LLP abstentions will not be counted as votes cast and will have no effect on the result of the vote. Brokers, banks and other nomineeseither proposal. Agents are not prohibited from voting shares held in street name in their discretion on thisthe proposal relating to the selection of E&Y, and accordingly, we do not expect to receive any broker non-votes on this proposal.
Who is soliciting my voteproxy and who pays the cost?
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We have retained DF King for a fee of $6,000 plus expenses and other customary charges, to aid in the solicitation of proxies from our stockholders. To the extent necessary to ensure sufficient representation at the meeting, we or our proxy solicitor may solicit the return of proxies by personal interview, mail, telephone, facsimile, internet or other means of electronic transmission. The extent to which this will be necessary depends upon how promptly proxies are returned. We urge you to send in your proxy without delay.
What is householding?
Stockholders who share the same address and last name may receive only one copy of the proxy materials unless we, in the case of stockholders of record, or such stockholder’s broker, bank or nominee,Agent, in the case of stockholders whose shares are held in street name, receive contrary instructions. This practice, known as “householding,” is designed to reduce printing and mailing costs. Stockholders desiring to discontinue householding and receive a separate copy of the proxy materials, may (1) if their shares are held in street name, notify their broker, bank or nomineeAgent or (2) if they are stockholders of record, direct a written request to: One Liberty Properties, Inc., 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021, Attn: Office of the Corporate Secretary.
When are stockholder proposals due for the 20212023 Annual Meeting?
We expect that our 2023 annual meeting of stockholders will be held in June 2023.
The Office of the Corporate Secretary must receive such notice, as well as the information and other materials required by our bylaws, at our principal executive office not later than 5:00 p.m., Eastern Time, on December 26, 2022 and no earlier than November 26, 2022 for matters or nominations to be properly presented at the 20212023 annual meeting of stockholders,our stockholders.
Stockholders who wish to have proposals considered for inclusion in the proposal,proxy statement and form of proxy for our 2023 Annual Meeting pursuant to Rule 14a-8 under the Exchange Act must cause their proposals to be received in writing andby the Office of the Corporate Secretary at the address set forth on the cover page of this proxy statement no later than December 26, 2022. Any proposal should be addressed to the Office of the Corporate Secretary mustand may be received by us no later than [ ], 2020. Upon timely receipt of any such proposal, we will determine whether or not to include such proposal in the proxy statement in accordance with applicable regulations governing the solicitation of proxies.
SEC.
What other information about us is available?
Stockholders can call (516) 466-3100 or write to us at 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021, Attention: Office of the Corporate Secretary, to request a copy of our Annual Report on Form 10-K. This and other important information about us is also available on our web site which is located at www.1liberty.com. Our 2021 Annual Report to Stockholders for 2019 accompanies this proxy statement.
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Our business, property and affairs are managed by or under the direction of our board of directors. Members of the board are kept informed of our business through discussions with our chief executive officer, chairman of ourthe board and other officers, by reviewing materials provided to them and by participating in meetings of the board and its committees.
During 2019,2021, the board held four meetings. All of the directors attended at least 75% of the total number of meetings of the board of directors and the board committees of which such director was a member. Our non-management directors (i.e., directors who are not compensated by us except for compensation for serving on the board or its committees) meet at regularly scheduled executive sessions without management. We encourage our directors to attend the annual meeting of stockholders and last year, 70% of ourdue to the COVID-19 pandemic and the requirements for social distancing, three directors attended this meeting.
Our company is led by Matthew J. Gould, chairman of our board, Fredric H. Gould, vice chairman of our board and Patrick J. Callan, Jr., director, president and chief executive officer. The board of directors designated J. Robert Lovejoy as its “Independent Lead Director.” Among other things, the Independent Lead Director presides over, and proposes the topics to be discussed at, executive sessions of the independent directors, recommends to the chairman of the board matters to be considered and materials to be reviewed by the board, participates in meetings of the committees of the board, serves as an independent point of contact for stockholders desiring to communicate with the board and performs such other duties and responsibilities as are assigned to him by a majority of the non-management directors.
Management is responsible for the day-to-day management of risks we face. Our board of directors has overall responsibility for overseeing risk management with a focus on the more significant risks facing us. Our audit committee oversees risk policies and processes related to our financial statements, financial reporting processes and liquidity risks,risks; our compensation committee oversees risks relating to remuneration of our full-time executive officers,officers; and our nominating and corporate governance committee, which we refer to as the “nominating committee”, oversees corporate governance risks. A portion of each quarterly meeting of the audit committee is devoted to reviewing with management, among other things, property portfolio issues which could have a material adverse impact on current or future operations or financial condition including, potential or actual impairments, if any, liquidity risks, debt covenants and maturities, lease expirations;expirations and, as required, reviewing risks arising from related party transactions. Each audit committee meeting is generally attended by our chairman of the board, chief executive officer and chief operating officer who are there, among other things, to respond to issues relating to tenant matters or property operations. In addition, at each meeting of the audit committee, one or more of our chief financial officer, our chief accounting officer, the accounting firm performing the internal audit function on our behalf and our independent registered public accounting firm report to the committee with respect to compliance with our internal control policies to ascertain that no failures of a significant or material nature have occurred. This process assists the audit committee in overseeing the risks related to our financial statements and the financial reporting process.
At each meeting of the board of directors, the significant risk issues reviewedrisks discussed by the audit committee at its most recent meeting are discussedreviewed by the Board.
board.
Our compensation committee monitors risks associated with our compensation structure. The compensation committee believes that the compensation programs which are in place do not give rise to any risk that is reasonably likely to have a material adverse effect on us.
We have adopted a code of business conduct and ethics that is designedapplies to help our directors, officers employees, agents and consultants resolve ethical issues. This code applies to all directors, officers, employees, agents and consultants, including(including our chief executive officer, principal financial officer, principal accounting officer or persons performing similar functions.functions), employees, consultants and certain others performing services on our behalf. The code is designed to
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assist such persons in resolving ethical issues that involve us and covers a variety of topics, including those required by the Securities and Exchange CommissionSEC and the New York Stock Exchange.Exchange, which we refer to as the “NYSE.” Topics covered include conflicts of interest, confidentiality of information, and compliance with laws and regulations.
During 2019,2021, there were no amendments to the code and no waivers of the provisions of the code with respect to any of our directors, officers, employees, agents or consultants. We will post any amendments to, or waivers of, our code on our website. See “Additional Information and Notice of Internet Availability of Proxy Materials” to obtain access to, or copies of, our code of business conduct and ethics.
We have three standing committees: audit, compensation and nominating. Our board has adopted corporate governance guidelines that address the make-up and function of the board and a charter for each of these committees. The charter for each committee requires that such committee be comprised of at least three independent directors and in the case of the audit committee, also requires that at least one member of the committee qualify as a “financial expert.” All of the members of each committee were independent during their period of service on such committee and in the case of the audit committee, each such member was also financially literate. See “Additional Information and Notice of Internet Availability of Proxy Materials” to obtain access to, or copies of, our corporate governance guidelines and committee charters.
The table below provides membership and meeting information for each of the standingfollowing committees of the board committees for 2019:in 2021:
Name | Audit | Compensation | Nominating | |||||
Charles Biederman(1) | ✔ | Chair | ||||||
Joseph A. DeLuca | ✔ | |||||||
J. Robert Lovejoy(2) | Chair | ✔ | ||||||
Louis P. Karol(3) | Chair | |||||||
Leor Siri(4) | Chair | |||||||
Karen A. Till (5) | ✔ | |||||||
Eugene I. Zuriff(2) | ✔ | Chair | ||||||
Number of Meetings | 4 | 4(6) | 3(6) |
Name | | | Audit | | | Compensation | | | Nominating |
Charles Biederman | | | | | ✓ | | | Chair | |
Joseph A. DeLuca | | | | | | | ✓ | ||
Edward Gellert(1) | | | | | ✓ | | | ||
J. Robert Lovejoy | | | ✓ | | | Chair | | | |
Leor Siri | | | Chair | | | | | ||
Karen A. Till | | | ✓ | | | | | ✓ | |
Eugene I. Zuriff(2) | | | | | ✓ | | | ||
Number of meetings | | | 4 | | | 3 | | | 1 |
(1) |
(2) |
Audit Committee
This committee is responsible for assisting the board in overseeing, among other things, (i) the integrity of our financial statements, (ii) our compliance with legal and regulatory requirements, (iii) the independent registered public accounting firm’s qualifications and independence, (iv) the performance of the independent registered public accounting firm, (v) the performance of the accounting firm performing our internal control audit function, and (vi) the preparation of the audit committee report required by the Securities and Exchange CommissionSEC for inclusion in this proxy statement. The audit committee is also responsible for the selection and engagement of our independent registered public accounting firm, for approving the fees paid to such firm and for approving related party transactions.
Compensation Committee
This committee recommends the base salary and annual bonus to our full-time senior executive officers and the fees to be paid to our directors, determines (or delegates, in the manner and to the extent permitted by applicable law, the determination of) all awards under our equity based incentive plans, oversees compliance with our stock ownership guidelines, and monitors risks associated with our compensation structure.
Nominating and Corporate Governance Committee
This committee is responsible for, among other things, recommending a slate of directors for election to the board of directors at the annual stockholders’ meeting, recommending committee assignments to the board of directors, identifying and recommending candidates to fill vacancies on the board of directors between annual
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stockholder meetings, recommending a slate of officers for election by the board of directors at the annual directors’ meeting, proposing, monitoring and recommending changes to our corporate governance guidelines and overseeing the evaluation of the effectiveness of our board of directors and the committees thereof.
The board believes that it should be comprised of directors with complementary backgrounds and that directors should, at a minimum, have experience which is relevant to our business or otherwise be of assistance to the board in its deliberations. Our nominating committee which we refer to as the nominating committee has not adopted a formal diversity policy in connection with the consideration of director nominations or the selection of nominees. It considers the personal and professional attributes and the experience of each director candidate to promote diversity of expertise and experience among our directors. Additionally, directors should possess the highest personal and professional ethics in order to perform their duties properly and should be willing and able to devote the required amount of time to our business.
When considering candidates for director, the nominating committee will take into account a number of factors, including the following:
the candidate’s ability to qualify as an independent director;
The nominating committee will consider candidates for director suggested by stockholders applying the criteria for candidates described above and considering the additional information referred to below. Stockholders wishing to suggest a candidate for director should write to our Office of the Corporate Secretary and include:
When seeking candidates for director, the nominating committee may solicit suggestions from management, incumbent directors and others. The nominating committee or its chair will interview a candidate if it believes the candidate might be suitable to be a director. The nominating committee may also ask the candidate to meet with management.
The nominating committee generally intends to recommend that the board nominate incumbent directors whom the committee believes will continue to make important contributions to us, inasmuch as the committee believes that the continuing service of qualified incumbents promotes stability and continuity, giving us the benefit of the familiarity and insight into our affairs that itssuch directors have accumulated during their tenure, while contributing to the Board’sboard’s ability to work as a collective body.
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The Boardboard affirmatively determined that for the purposes of the corporate governance requirements of the New York Stock Exchange, each of (i) Charles Biederman, Joseph A. DeLuca, Edward Gellert, J. Robert Lovejoy, Leor Siri and Karen A. Till, and Eugene I. Zuriff, constituting 60% of our directors and (ii) the members of our audit, compensation and nominating and corporate governance committees, is independent. The Boardboard based these determinations primarily on a review of theour directors’ responses of our directors to questions regarding employment and compensation history, affiliations and family and other relationships, discussions with directors and relevant facts and circumstances provided to management of any relationships bearing on the independence of a director. In evaluating independence, the board applied the independence standards of Messrs. Biedermansections 303A.01 and Lovejoy, the Board was aware that these directors are limited partners in an investment vehicle managed by an affiliate of Gould Investors. Gould Investors is a stockholder and an affiliate of ours and is primarily engaged in the ownership and operation of real estate properties held for investment. See “Certain Relationships and Related Transactions.”
Stockholders, employees and other interested persons who want to communicate with the board, any committee of the board, or any individual director can write to:
One Liberty Properties, Inc.
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
Attention: Office of the Corporate Secretary
The Office of the Corporate Secretary will:
Forward the communication to the director or directors to whom it is addressed;
Attempt to handle the inquiry directly; for example, where it is a request for information about the company or it is a stock-related matter; or
Not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.
At each board meeting, the Corporate Secretary will present a summary of all communications received since the last meeting that were not forwarded and make those communications available to the directors on request.
In the event that a stockholder, employee or other interested person would like to communicate with our non-management directors confidentially, they may do so by sending a letter to “Independent Lead Director” at the address set forth above.on the first page of this proxy statement. Please note that the envelope must contain a clear notation that it is confidential.
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The following table sets forth the cash compensation payablepaid in 20192021 to the non-management directors for service on our board and its committees:
Committee(3) | | | | Committee | |||||||||||||||||||||||||||
Board | Audit | Compensation | Nominating | | | Board | | Audit | | Compensation | | Nominating | |||||||||||||||||||
Annual retainer | Annual retainer | $ | 32,000 | (2) | $ | 12,000 | $ | 6,000 | $ | 5,000 | Annual retainer | | $33,000(1) | | $12,400 | | $6,200 | | $5,200 | ||||||||||||
Participation in meeting | Participation in meeting | 1,000 | — | — | — | | 1,000 | | — | | — | | — | ||||||||||||||||||
Chairman’s annual retainer (2) | Chairman’s annual retainer (2) | 289,406 | (3) | 15,000 | 8,500 | 7,000 | | 298,088(3) | | 15,000 | | 8,500 | | 7,000 | |||||||||||||||||
Vice Chairman’s annual retainer | Vice Chairman’s annual retainer | 115,763 | (3) | — | — | — | | 119,235(3) | | — | | — | | — | |||||||||||||||||
Lead director’s annual retainer | Lead director’s annual retainer | 25,000 | — | — | — | | 25,000 | | — | | — | | — | ||||||||||||||||||
(1) | Effective January 1, $34,650. |
(2) | The amounts paid for serving as the chair of the applicable committee are in addition to the |
(3) | Matthew J. Gould and Fredric H. Gould, members of management, were paid the Chairman’s and Vice Chairman’s |
In addition, non-management directors are awarded shares of restricted common stock annually –— the number of such shares varies from year to year. In each of 2020, 2019 and 2018 each such director was awarded 3,200 shares of restricted stock. The restricted stock vests on a cliff vesting basis five years after the grant, subject to acceleration upon the occurrence of specified events; during the vesting period, the owner is entitled to vote and receive distributions, if any, on such shares.
Our non-management directors received the following compensation for 2019:2021:
Name | Name | Fees Earned or Paid in Cash ($)(2) | Stock Awards ($)(3) | Total ($) | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Total ($) | ||||||||||||
Charles Biederman | Charles Biederman | 47,750 | 82,240 | 129,990 | | 55,400 | | 65,088 | | 120,488 | |||||||||||||
Joseph A. DeLuca | Joseph A. DeLuca | 47,000 | 82,240 | 129,240 | | 42,200 | | 65,088 | | 107,288 | |||||||||||||
Edward Gellert | | 40,100 | | 32,544 | | 72,644 | |||||||||||||||||
J. Robert Lovejoy | J. Robert Lovejoy | 76,250 | 82,240 | 158,490 | | 88,100 | | 65,088 | | 153,188 | |||||||||||||
Louis P. Karol | 36,000 | 82,240 | 118,240 | ||||||||||||||||||||
Leor Siri | Leor Siri | 63,000 | 82,240 | 145,240 | | 64,400 | | 65,088 | | 129,488 | |||||||||||||
Karen A. Till | Karen A. Till | 10,250 | – | 10,250 | | 54,600 | | 65,088 | | 119,688 | |||||||||||||
Eugene I. Zuriff | Eugene I. Zuriff | 58,250 | 82,240 | 140,490 | Eugene I. Zuriff | | 21,600 | | 65,088 | | 86,688 | ||||||||||||
(1) |
Represents the aggregate grant date fair value of these restricted stock awards computed in accordance with Accounting Standards Codification Topic 718—Stock Compensation, which we refer to as |
(2) | Mr. Zuriff’s service as a director ended with his retirement in |
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The table below shows the number of outstanding shares of our unvested restricted stock and the value thereof held by each non-management director at December 31, 2019:2021:
Name | Name | Unvested Restricted Stock (#) | Market Value of Unvested Restricted Stock ($)(2) | Name | | Unvested Restricted Stock (#) | | Market Value of Unvested Restricted Stock ($)(1) | ||||||||
Charles Biederman | Charles Biederman | 14,900 | 405,131 | | 15,800 | | 557,424 | |||||||||
Joseph A. DeLuca | Joseph A. DeLuca | 14,900 | 405,131 | | 15,800 | | 557,424 | |||||||||
Edward Gellert | | 1,600 | | 56,448 | ||||||||||||
J. Robert Lovejoy | J. Robert Lovejoy | 14,900 | 405,131 | | 15,800 | | 557,424 | |||||||||
Louis P. Karol | – | – | ||||||||||||||
Leor Siri | Leor Siri | 14,900 | 405,131 | | 15,800 | | 557,424 | |||||||||
Karen A. Till | Karen A. Till | – | – | | 6,400 | | 225,792 | |||||||||
Eugene I. Zuriff | Eugene I. Zuriff | 14,900 | 405,131 | | —(2) | | —(2) | |||||||||
(1) |
The closing price on the $35.28. |
(2) | Mr. Zuriff’s 15,800 shares of restricted stock vested upon his retirement from the board in June 2021. |
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The following table sets forth, as of March 25, 202031, 2022 information concerning shares of our common stock owned by (i) all persons known to own beneficially 5% or more of our outstanding stock, (ii) all directors and nominees for election as directors, (iii) each executive officer named in the Summary Compensation Table, and (iv) all directors and executive officers as a group:
Name | Amount of Beneficial Ownership(1) | Percent of Class | |||||||
Charles Biederman(2) | 29,850 | * | |||||||
Patrick J. Callan, Jr. | 243,210 | 1.2 | % | ||||||
Joseph A. DeLuca(3) | 43,936 | * | |||||||
Fredric H. Gould(4)(5) | 2,289,800 | 11.4 | % | ||||||
Jeffrey A. Gould(4)(6) | 2,105,696 | 10.5 | % | ||||||
Matthew J. Gould(4)(7) | 2,065,718 | 10.3 | % | ||||||
David W. Kalish(8) | 338,874 | 1.7 | % | ||||||
J. Robert Lovejoy(9) | 74,580 | * | |||||||
Lawrence G. Ricketts, Jr. | 134,335 | * | |||||||
Leor Siri(10) | 18,100 | * | |||||||
Karen A. Till | 3,200 | * | |||||||
Eugene I. Zuriff(11) | 32,957 | * | |||||||
Directors and executive officers as a group (19 individuals)(4) | 4,327,010 | 21.6 | % | ||||||
Gould Investors L.P.(4)(12) | 1,785,976 | 8.9 | % | ||||||
BlackRock, Inc.(13) | 1,299,784 | 6.5 | % | ||||||
The Vanguard Group(14) | 1,627,762 | 8.1 | % | ||||||
Renaissance Technologies LLC(15) | 1,044,025 | 5.2 | % | ||||||
Name | | | Amount of Beneficial Ownership(1) | | | Percent of Class |
Charles Biederman(2) | | | 36,858 | | | * |
Patrick J. Callan, Jr. | | | 308,624 | | | 1.5 |
Joseph A. DeLuca(3) | | | 50,740 | | | * |
Edward Gellert | | | 4,950 | | | * |
Fredric H. Gould(4) | | | 539,049 | | | 2.6 |
Jeffrey A. Gould(5)(6) | | | 2,281,698 | | | 10.8 |
Matthew J. Gould(5)(7) | | | 2,239,990 | | | 10.6 |
David W. Kalish(8) | | | 378,433 | | | 1.8 |
J. Robert Lovejoy(9) | | | 84,749 | | | * |
Lawrence G. Ricketts, Jr. | | | 162,609 | | | * |
Leor Siri(10) | | | 24,928 | | | * |
Karen A. Till | | | 9,798 | | | * |
Directors and executive officers as a group (19 individuals) | | | 4,815,685 | | | 22.8 |
Gould Investors L.P.(11) | | | 1,921,711 | | | 9.1 |
BlackRock, Inc.(12) | | | 1,305,274 | | | 6.2 |
The Vanguard Group(13) | | | 1,725,140 | | | 8.2 |
* | Less than 1% |
(1) | Securities are listed as beneficially owned by a person who directly or indirectly holds or shares the power to vote or to dispose of the securities, whether or not the person has an economic interest in the securities. In addition, a person is deemed a beneficial owner if 31, 2022. |
(2) | Excludes |
(3) | Includes shares of common stock owned by a corporation of which he is the sole shareholder. |
(4) | Includes 525,427 shares of common stock owned directly, and 13,622 shares of common stock owned by entities over which he has sole or shared voting and dispositive power. Excludes |
(5) |
(6) | Includes |
(7) | Includes power, and 144 shares owned by the managing general partner of Gould Investors. |
(8) | Includes |
(9) | Includes shares of common stock owned by his IRA. Excludes |
(10) | Excludes |
(11) |
Address is 60 Cutter Mill Road, Suite 303, Great Neck, NY 11021. This stockholder is primarily engaged in the ownership and operation of real estate properties held for investment. |
(12) | As of December 31, |
(13) | As of December 31, |
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(ProposalPROPOSAL 1)
Pursuant to our by-laws, as amended,bylaws, the number of our directors is determined by our board of directors. Our Boardboard currently consists of ten directors. TheMr. Joseph A. DeLuca is not standing for reelection, and our board has determined that effective as of the annual meeting, the board will consist of nine directors. Pursuant to our charter, the board is divided into three classes andof directors, with each director elected by the classes are elected onstockholders generally serving for a staggered basis. Each class is elected to serve a three year term and is to be as equal in size as is possible. The terms of Charles L. Biederman, Patrick J. Callan, Jr. and Karen A. Till expireexpiring at the 2020 annual meeting of stockholders held in the third year following the year of their election and when their respective successors are duly elected and qualify. qualified, with one class up for election at each annual meeting. A director elected by our board of directors to fill a vacancy on the board between meetings of stockholders serves for a term expiring at the next annual meeting of stockholders and when his or her successor is duly elected and qualifies, and such successor will be elected for the remainder of the term of the class of directors in which the vacancy occurred.
Our Board of Directors,board, upon the recommendation of the nominating committee, nominated each of themthe individuals identified below under the caption “ — Directors who are Nominees for Election” for election as directors at the annual meeting, to serve until our 2023the annual meeting indicated and until his or her successor is duly elected and qualifies. Seven otherAs a result, three individuals identified below are to be elected as Class 3 directors, to serve as directors butuntil the 2025 annual meeting of our stockholders and until their respective successors are not standing for election because their terms extend past the date of the annual meeting.duly elected and qualify. Proxies will not be voted for a greater number of persons than the number of nominees named in the proxy statement.
It is contemplated that all the nominees will stand for election. Should any nominee become unavailable for election, all proxies (except proxies marked to the contrary) will be voted for the election of a substitute nominee recommended by the board of directors.
In an uncontested election, each nominee will be elected only if such director receives the affirmative vote of a majority of the total votes cast “for” and “against” as to such nominee. As set forth in our corporate governance guidelines, any nominee who is an incumbent director but who is not elected by the vote required in the Bylaws, and with respect to whom no successor has been elected, is required to promptly tender an offer to resign to the board for its consideration. The nominating committee will recommend to the board whether to accept the offer to resign. No later than the next regularly scheduled board meeting to be held at least ten days after the date of the election, the board will decide whether to accept such offer and promptly and publicly disclose its decision. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. If the resignation is accepted, the board will leave such position vacant, reduce the size of the board or elect another individual to serve in place of the resigning director. The nominating committee and the board may consider any factors they deem relevant in deciding whether to accept a director’s resignation.
If any director resigns or is unable to serve his or her full term, the board, by majority vote of the remaining directors, then in office, may elect a substitute.nominee to fill the vacancy.
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The following tables set forth information concerning the directors who are nominees for election at this year’s annual meeting and whose terms are not expiring:
Directors Who are Nominees for Election to serve until the 2023 Annual Meeting
Name | | | Class | | | New Term to Expire at Annual Meeting in |
Matthew J. Gould | | | 3 | | | 2025 |
J. Robert Lovejoy. | | | 3 | | | 2025 |
Karen A. Till(1). | | | 3 | | | 2025 |
(1) | Ms. Till, as of the date of this proxy statement, is a Class 2 director with a term expiring at our 2023 annual meeting of stockholders. To equalize the number of directors in each class (which would have become unequal as a result of Mr. DeLuca not standing for reelection), Ms. Till resigned as a Class 2 director effective as of the 2022 annual meeting contingent on her nomination and election at the Annual Meeting as a Class 3 director (with a term expiring at our 2025 annual meeting of stockholders). As a result and assuming Ms. Till is elected, immediately following the annual meeting each class will be comprised of three directors. In the event Ms. Till is not elected to serve as a Class 3 director with a term expiring in 2025, she will continue to serve as a Class 2 director until the 2023 annual meeting and Class 1, 2 and 3 will be comprised of three, four and two directors, respectively. |
Name | | | Class | | | New Term to Expire at Annual Meeting in |
Charles Biederman | | | 2 | | | 2023 |
Patrick J. Callan, Jr. | | | 2 | | | 2023 |
Jeffrey A. Gould | | | 2 | | | 2023 |
Edward Gellert | | | 1 | | | 2024 |
Fredric H. Gould | | | 1 | | | 2024 |
Leor Siri | | | 1 | | | 2024 |
Nominees For Election as Directors
Name and Age | | | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
Matthew J. Gould 62 Years | | | Chairman since June 2013, Vice Chairman from 2011 through June 2013; and Director since 1999; President and Chief Executive Officer from 1989 to 1999 and a Senior Vice President from 1999 through 2011; From 1996 through 2013, President, and from 2013, Chairman of the Board and Chief Executive Officer of Georgetown Partners, the managing general partner of Gould Investors, which is primarily engaged in the ownership and operation of real estate properties held for investment; Senior Vice President of BRT Apartments Corp., a NYSE listed real estate investment trust which is focused on owning and operating multi-family properties since 1993 and director since 2001; Vice President of Majestic Property Management Corp., for more than the past five years. Since 2019, Chief Executive Officer of Rainbow MJ Advisors, which manages real estate loans and investments in the cannabis industry and since 2021, a Director of Halsa Holdings LLC, which is engaged in commercial activities in such industry. Matthew J. Gould is the son of Fredric H. Gould and brother of Jeffrey A. Gould. In addition to his general knowledge of real estate matters, he devotes a significant amount of his business time to the acquisition and sale of real property, and he brings his knowledge and expertise in these areas to his board activities. He also has experience in mortgage financing and real estate management, activities in which he is frequently involved. His more than 35 years’ experience as a real estate executive is a valuable asset to our board of directors. |
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Name and Age | | | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
J. Robert Lovejoy 77 Years | | | Director since 2004 and Independent Lead Director since 2011; Founder and principal of J.R. Lovejoy & Co. LLC, providing consulting and advisory services to corporate, investment and financial clients; Partner and Chief Administrative Officer of Deimos Asset Management LLC, a privately owned multi-strategy fund management company, from 2015 to 2016. Director from 2000 to 2013, Chairman from 2011 to 2013, and Interim Chief Executive Officer from 2011 to 2012 of Orient-Express Hotels Ltd., (now called Belmond Ltd.), a luxury lodging and adventure travel company which was acquired in 2019 by LVMH Moët Hennessey Louis Vuitton; Partner, Chief Administrative Officer and General Counsel of Coatue Management LLC, a privately owned investment management company, from 2009 through 2010; Managing Director of Groton Partners, LLC, merchant bankers, from 2006 to 2009; Senior Managing Director of Ripplewood Holdings, LLC, a private equity investment firm, from 2000 to 2005; Managing Director of Lazard Freres & Co. LLC and General Partner of Lazard’s predecessor partnership from 1984 to 2000; Partner, and previously Associate, of Davis Polk & Wardwell, LLP law firm, from 1971 to 1984. Mr. Lovejoy, an attorney, has extensive experience in asset management and investment and merchant banking, and throughout his career has been involved in raising capital in private and public transactions, mergers and acquisitions, business law and accounting issues. His extensive experience in these areas makes him a valued member of our board of directors. |
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Karen A. Till 59 Years | | | Director since 2019; since 2021, Chief Financial Officer of Miller & Milone, LLC, a wholly owned subsidiary of Med-Metrix, LLC, a provider of performance management analytics and revenue recovery services for the healthcare industry; Since 2010, Chief Financial Officer of Miller & Milone, P.C., a law firm focused on healthcare law, elder law and estate planning; From 1998 to 2010, employed by Arbor Commercial Mortgage, LLC, a Fannie Mae and Freddie Mac Delegated Underwriting and Servicing (DUS®) lender, including serving as Vice President – Strategic and Taxation from 2006 to 2010 with responsibility for, among other things, tax compliance and strategies for a NYSE listed REIT and various real estate partnerships; From 1988 to 1998 employed by BRT Apartments, including serving as Vice President, Financial, from 1993 to 1998. Since 2019, she has also served as a board member and treasurer of the Sabrina Audrey Milone Foundation, Inc. Ms. Till is a certified public accountant. Ms. Till’s experience as a chief financial officer as well as her experience in strategic business planning, finance, tax and accounting at two NYSE listed REITs brings a diverse perspective to our board. |
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
MATTHEW J. GOULD, J. ROBERT LOVEJOY AND KAREN A. TILL
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Continuing Directors
Name and Age | | | Principal Occupation For The Past Five Years and other Directorships or Significant Affiliations |
Charles L. Biederman | | | Director since 1989; Chairman from 2008 to 2010 of Universal Development Company, a commercial general contractor engaged in turnkey hotel, commercial and residential projects; Principal of Sunstone Hotel Investors, LLC, a company engaged in the management, ownership and development of hotel properties, from 1994 to 2007; Executive Vice President of Sunstone Hotel Investors, Inc., a real estate investment trust engaged in the ownership of hotel properties, from 1994 to 1998 and Vice Chairman of Sunstone Hotel Investors from 1998 to 1999. Mr. Biederman, a retired professional architect, was involved for many years in the development and construction of residential communities. He subsequently became involved, as an executive officer and a director, in the activities of a publicly traded real estate investment trust engaged in the ownership of hotel properties and developed, as an investor, principal and partner, residential properties and hotels. In his business activities he has been involved in all aspects of real estate ownership and operation and in real estate development, which includes financing and related financial matters. His many years of diverse business experience make him a valued member of our |
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Patrick J. Callan, Jr. | | | Director since 2002, President since 2006 and Chief Executive Officer since 2008; Senior Vice President of First Washington Realty, Inc. from 2004 to 2005; Vice President of Real Estate for Kimco Realty Corporation, a real estate investment trust, from 1998 to 2004. Mr. Callan joined us in 2002, as a director, with significant experience in commercial leasing with a publicly traded real estate investment trust and thereafter served as a senior executive officer of another real estate investment trust. His |
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| | Director since | |
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Name and Age | | | Principal Occupation For The Past Five Years and other |
Directorships or Significant Affiliations | |||
Jeffrey A. Gould 56 Years | | | Director since 1999, Vice President from 1989 to 1999 and Senior Vice President since 1999; Since 1996, President, from 1996 through 2001, Chief Operating Officer, and since 2002, Chief Executive Officer of BRT Apartments; Director of BRT Apartments since 1997; Since 1996, Senior Vice President and since 2013, director of Georgetown Partners, the managing general partner of Gould Investors. Jeffrey A. Gould is the son of Fredric H. Gould and brother of Matthew J. Gould. Mr. Gould has spent his entire career in the real estate business. His principal activity for more than the past 17 years has been first as chief operating officer and then as chief executive officer of BRT Apartments. His experience in operating a public REIT and expertise in evaluating real estate acquisitions and dispositions, makes him a valued member of our board. |
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Fredric H. Gould | | | Vice Chairman since June 2013, Chairman from 1989 through June 2013, Chief Executive Officer from 1999 to 2001 and from 2005 to 2007; From 1997 through 2013, Chairman of Georgetown Partners, Inc., managing general partner of Gould |
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Leor Siri | | | Director since 2014; Since 2014, |
The following features of our executive compensation program are evidence of our commitment to good corporate governance practice – we encourage you to read the more detailed information set forth herein:
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| ✔ | Emphasize equity awards as a significant portion of the performance/incentive component of compensation. Long-term equity awards (i.e | |
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| ✔ | Equity awards as a significant component of annual base compensation. In | |
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| ✔ | Mitigate undue risk in compensation programs. The executive compensation program includes features that reduce the possibility of our executive officers, either individually or as a group, making excessively risky business decisions that could maximize short-term results at the expense of longer-term value. | |
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| ✔ | Balance of short-term and long-term incentives. Our incentive programs provide an appropriate balance between shorter and longer-term incentives. | |
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| ✔ | Capped equity award payouts. | |
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| ✔ | Independent compensation committee. Our compensation committee is comprised entirely of independent directors and it oversees risks with respect to our compensation practices. | |
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| ✔ | Clawback policy. We are entitled to recoup compensation or cause the forfeiture of compensation as more fully described under “ | |
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| ✔ | Stock ownership guidelines. All of our named executive officers and non-management directors own a meaningful amount of our | |
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| ✔ | Anti-Hedging policy. Our policy prohibits our directors, officers, employees and others from engaging in hedging or short sales involving our shares — see “— Policy Prohibiting Hedging of our Securities.” | | |
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| ✔ | Diversity; Responsiveness to Stockholder’s Corporate Governance Comments. We are responsive to comments and concerns raised by our stockholders. In response to comments raised by stockholders regarding board diversity, we added a highly qualified woman, Karen A. Till, to our board. Ms. Till has served as director since 2019 and | | |
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| ✔ | Board refreshment. We have been refreshing our board over the past several years and as a result, immediately following this annual meeting, the median number of years served by our independent directors will be eight. | |
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| ✘ | No employment agreements. None of our officers have employment agreements. Employment of all of our full-time executive officers is “at will.” | |
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| ✘ | No severance arrangements. There are no severance or similar arrangements for our executive officers, other than accelerated vesting of shares of restricted stock and RSUs upon the occurrence of specified events (e.g., death, disability, retirement or change of control). | |
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| ✘ | No golden parachute tax gross-ups. There are no excise tax gross ups or similar arrangements for our executive officers. | |
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| ✘ | No dividend or dividend equivalents on unearned equity incentive awards. No dividends or dividend equivalents are paid on our RSUs | |
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| ✘ | Grant multi-year or guaranteed bonuses or equity grants. We do not pay guaranteed bonuses to anyone and currently have no guaranteed commitments to grant any equity-based awards. This ensures that we are able to base all compensation awards to measurable performance factors and business results. | |
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| ✘ | Offer costly defined benefit pension or supplemental retirement plans. We do not provide costly retirement benefits to our executive officers that reward longevity rather than contributions to our performance. | |
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We describe below our compensation objectives, policies and decisions as applied to the compensation provided by us in 20192021 to our namedthe “named executive officers.officers” identified below under “ — Named Executive Officers” and in the “Summary Compensation Table”. This discussion focuses on the information contained in the compensation tables that appears beginning at page [ ] of this proxy statement,appearing herein, but also describes our historic compensation structure to enhance an understanding of our executive compensation disclosure.disclosure and practice. Our compensation committee oversees our compensation program, recommends the compensation of the named executive officers employed by us on a full-time basis to our board of directors for its approval, recommends the annual fee paid by us to the chairman and vice chairman of our board of directors and makes most determinations with respect to grants of restricted stock and RSUs. Our audit and/or compensation committees, and independent directors, approve the annual fees paid by us to Majestic Property Management Corp. pursuant to a compensation and services agreement, to Majestic Property Management Corp., which may result in the payment by Majestic of compensation to our part-time officers, including Fredric H. Gould, Matthew J. Gould and David W. Kalish. Majestic Property Management Corp., which we refer to as Majestic,“Majestic”, is wholly-owned by Fredric H. Gould, the Vice Chairman of our Board.
Board of Directors.
Background
We have two categories of officers: (i) officers who devote their full business time to our affairs; and (ii) officers who devote their business time to us on a part-time basis. Our full-time officers and employees are compensated directly and solely by us. Except for Equity Awards and our payment of the chairman’s and vice chairman’s fee, most of our part-time officers and employees are compensated by Majestic which, pursuant to the compensation and services agreement, provides us with the services of(i) certain executive, administrative, legal, accounting, clerical, and property management, personnel, as well as property acquisition and consulting (i.e., sale, and lease consulting and brokerage services, consulting services with respect toleasing, mortgage financingsfinancing and construction supervisorysupervisory) services and (ii) certain facilities and other resources (collectively, the “Services”). In consideration for providing the Services in 2019, we paid Majestic $2,826,000, of which approximately $1,307,000 relates to amounts paid for property management services. Majestic may earn a profit from payments made to it under such agreement. In addition, under this agreement, we made an additional payment to Majestic of $216,000 in 2019 for our share of all direct office expenses, including rent, telephone, computer services, internet usage and supplies. The amount of the annual payments to be made by us to Majestic under the compensation and services agreement is approved each year by our audit and/or compensation committee(s) and our independent directors. See “Certain Relationships and Related TransactionsParty Transactions..” Our part-time officers also receive compensation from other companies affiliated with One Liberty for services unrelated to One Liberty.
Most of our full-time and part-time officers and other employees, including employees of affiliated companies who perform services for us on a part-time basis, receive Equity Awards approved by, or pursuant to authority delegated by, the compensation committee.
Named Executive Officers
Our named executive officers are Patrick J. Callan, Jr., President and Chief Executive Officer and Lawrence G. Ricketts, Jr., Executive Vice President and Chief Operating Officer, both of whom devote their full time to our affairs, as well as Matthew J. Gould, chairman of our board, Fredric H. Gould, vice chairman of our board, and David W. Kalish, senior vice president and chief financial officer, each of whom devote time to our affairs on a part-time, as needed, basis.
In reviewing our compensation practices and determinations and in approving base salaries and bonuses for 2019,2021, the compensation committee was aware of the results of our June 20172020 “say-on-pay” vote in which approximately 79%76% of the shares that voted on such proposal voted to approve our executive compensation determinations and practices. The compensation committee viewsviewed such results as supportive of our compensation philosophy, practices and determinations.
The principal objectives of our compensation program for full-time officers are to: (a) ensure that the total compensation paid to such officers is fair and competitive, (b) retain highly experienced officers who have worked together for a long time and contributed to our success, (c) motivate these officers to contribute to the achievement of the Company’sour success and (d) align the interests of these executives and our stockholders. The compensation committee believes that relying on these principles will permit us to retain and motivate these officers.
With respect to our part-time executive officers, the compensation committee must be satisfied that such officers provide us with sufficient time and attention to meet our needs and perform their duties on our behalf. The compensation committee believes that (i) using the services of officers with diverse skills on a part-time
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basis enables us to benefit from a greater degree of executive experience and competence than an organization of our size could otherwise afford and (ii) our part-time executive officers perform valuable services on our behalf, devote sufficient time and attention to our business needs, are able to meet our needs fully and perform their duties effectively.
Full-time Officers
We determine compensation for our full-time named executive officers on a case-by-case basis and our compensation decisions include subjective determinations. We do not use formal quantitative performance targets to determine compensation, except with respect to RSUs, which are performance-based awards that vest upon satisfaction of market and/or performance-based conditions. Base salaries are determined immediately preceding the year in which such salaries are to be paid, cash bonuses, which arehave been paid for the past several years pursuant to the Performance-based Cash Bonus Program further described under “ –— Components of Executive Compensation –— Bonus,” are determined at the end of the year in which services are rendered and paid in the following year, restricted stock is awarded for service in a particular year and granted in the following year, and RSUs are granted annually in June/July of each year as an additional three-year performance incentive.
Part-time Officers
We believe that using part-time officers pursuant to the compensation and services agreement enables us to benefit from access to, and the services of, a group of senior officers with experience and knowledge in real estate ownershipmatters (including acquisitions and dispositions), operations, management and finance, legal, accounting and tax matters that an organization our size could not otherwise afford. The base compensation, bonus, if any, and perquisites paid to our part-time officers by Majestic and its affiliates for services on our behalf is determined by Matthew J. Gould and/or Fredric H. Gould, in their capacity as officers of such entities, in consultation with certain of our part-time senior executive officers.
Our part-time executive officers, including our Chairman and Vice Chairman, also receive compensation from other business entities, mostseveral of which are owned or controlled by one or more of Fredric H. Gould, Matthew J. Gould or Jeffrey A. Gould, for services rendered to such entities.
Full-time Officers
The principal elements of our compensation program for our full-time officers are:
base salary;
annual cash bonus;
long-term equity awards in the form of restricted stock and long-term equity incentivesincentive awards in the form of RSUs; and
benefits and perquisites (e.g., contributions to our defined contribution plan, an education benefit, additional disability insurance, an automobile allowance and automobile maintenance and repairs).
Base salary and annual bonus are cash-based, while long-term equity awards and long-term equity incentives consistsincentive awards consist of restricted stock awards and RSUs, respectively. In determining compensation, the compensation committee does not have a specific allocation goal between cash and equity-based compensation though the committee generally desires that base salary and cash bonuses (except to the extent based on the attainment of performance criteria), should decrease over time as a percentage of total compensation and long-term equity and other incentive awards should increase as a percentage of total compensation.
Part-time Officers
In 2019,2021, except for the $289,406$298,088 and $115,763$119,235 we paid the chairman and vice chairman of our board, respectively, the only form of direct compensation we provided our part-time officers was the granting of long-term equity and equity incentive awards in the form of restricted stock and RSUs.RSUs, respectively. For services
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rendered to us, our part-time officers are compensated by Majestic, which was paid approximately $2,826,000$3,111,000 (excluding $216,000$295,000 as reimbursement for our share of direct office expenses) in 20192021 pursuant to the compensation and services agreement. [Seven]Seven officers are compensated by Majestic for providing services to us on a part-time basis.
Base Salary
Base salary is the basic, fixed form of compensation for the job an officer performs and provides each officer with a guaranteed annual income.
Full-time Officers: Any increase in base salary is determined on a case-by-case basis, is not formula based and is based upon, among other considerations, (i) our performance in the preceding year, (ii) such officer’s current base salary, (iii) amounts paid by other similarly situated REITs for officers performing substantially similar functions, (iv) years of service, (v) job responsibilities, (vi) the individual’s performance, (vii) the cost of retaining talented executives in the New York City region, and (viii) the recommendations of the Chairman and/or Vice Chairman of the board and other senior executive officers. Base salary is generally determined the month before the beginning of the calendar year in which such base salary is to take effect.
Part-time Officers: The base salary of ourOur part-time officers is paidare compensated by Majestic and its affiliates. The annual fee paid to Majestic is approved by the audit and/or compensation committee(s) and the board of directors;directors. Other than equity award determinations, our board and its committees are not involved in determining the base salariescompensation of these officers.
Bonus
Full-time Officers: We provide the opportunity for our full-time officers to earn an annual cash bonus. We provide this opportunity both to reward our personnel for past performance and to motivate and retain them. We recognize that annual bonuses are almost universally provided by our competitors. In view of the fact that only two of our named executive officers devote their full-time to our affairs, annual cash bonuses for such named executive officers are recommended on a case-by-case basis by our Chairmanchairman of the Boardboard and/or Vice Chairmanvice chairman to the compensation committee. Our performance-based cash bonus program, which we refer to as the “Performance-based Bonus Program,” provides that cash bonuses are to be based on funds from operations, tenant occupancy rate, the overall management of our portfolio and discretionary factors. Discretionary factors include total revenues, rental income, net income, dividends paid to stockholders, investor relations activities, and subjective considerations. No specific quantitative targets are established in advance of the applicable year for which a bonus will be paid. Once it has determined the annual bonus to be paid to each of these executive officers, the compensation committee presents its recommendations to the board of directors for its approval. These bonuses are generally determined at the end of the year for which such bonus is awarded and is generally paid in the beginning of the following year.
Part-time Officers: We do not provide any cash bonuses to our Chairman, Vice Chairmanchairman, vice chairman or other part-time named executive officers. The annual bonus, if any, to be paid to anysuch part-time officerofficers is paid by Majestic and its affiliates. The annual fee paid to Majestic is approved by the audit and/or compensation committee(s) and our board of directors; our board and its committees are not involved in determining the bonuses paid to part-time officers.
Long-term Equity and Long-term Equity Incentive Awards
We provide the opportunity for our full-time and part-time officers to receive long-term equity (i.e., restricted stock) and long-term equity incentive awards (i.e., RSUs). These compensation programs are designed to recognize responsibilities, reward performance, motivate future performance, align the interests of our officers with those of our stockholders and retain our officers. The compensation committee makes determinations with respect to the grant of equity awards for all our officers and employees except to the extent that it, in accordance with applicable law, delegates to one or more senior executives the authority to grant such awards to certain individuals (other than executive officers); in such case, the committee sets limits (and may impose such other limits as it deems appropriate) on the total number of such awards that may be granted pursuant to such delegated authority. In determining the long-term equity and long-term equity incentive compensation components, the compensation committee considers all factors it deems to be relevant, including the performance of our named executive officers. Existing stock ownership levels are not a factor in award determinations. As of
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December 31, 2019,2021, all outstanding equity awards that had been granted were granted under either our stockholder approved 2012 Incentive Plan or 2016 Incentive Plan or 2019 Incentive Plan.Plan (collectively, the “Prior Plans”). For purposes of this Compensation Discussion and Analysis,proxy statement, the RSUs granted in 2019,2021, among other things, to incentivize future performance, are deemed to have been granted for 20192021 performance.
In 2019,2021, the compensation committee again adopted as it had in 2018 and 2017, an equity based long-term pay-for-performance incentive program (the “2019“2021 Performance Plan”) pursuant to which we issued to 1615 individuals, including our named executive officers, RSUs exchangeable for up to an aggregate of 77,77680,700 shares of common stock (of which 2,750 were subsequently forfeited).stock. As described in further detail in the table below and “-— Grant of Plan Based Awards During 2019”2021,” these RSUs vest if and to the extent pre-established market (i.e., average of the annual total stockholder return) or performance (i.e., average of the annual return on capital) conditions are met through the June 30, 2022 vesting2024 measurement date. Further, with respect to RSUs that vest, recipients are entitled to an amount equal to the cash dividends that would have been paid in respect of the shares underlying such RSUs had such shares been outstanding during the three year measurement period (the “RSU Dividend Equivalents”). We use RSUs as an element of our long-term equity compensation program with the expectation that in light of the three-year vesting period and the need to satisfy market and/or financial performance conditions, these awards will further align the interests of our executive officers with our stockholders and reward long-term market and financial performance.
The conditions that must be satisfied to earn the performance-based compensation are tied to the achievement of rigorous, sustained performance and/or market goals –— as further described below, 50% of the award is based on return on capital (“ROC”) and 50% on total stockholder return (“TSR”). The specific goals and the other material terms and conditions of the 20192021 Performance Plan are as follows:
| Long–Term Equity Incentive Awards Performance Criteria | | | Weight | | | Minimum Performance Criteria(1) | | | Maximum Performance Criteria(1) | |
| Return on Capital (ROC) | 50% | | | Average of the annual ROC of | ||||||
at least 6% | | Average of the annual ROC | | ||||||||
| Total Stockholder Return (TSR) | 50% | | | Average of the annual TSR of | | | Average of the annual TSR of 11.0% or greater | |
(1) | If the average annual ROC or TSR falls between the applicable minimum and maximum performance criteria, a pro-rata portion of |
The RSUs granted during the three years ended December 31, 20192021 are, as of such date, at the 32.2%100% level of the full payout of the performance objectives at which the RSUs vest (the extent to which the objectives for these awards are deemed to have been satisfied is determined in the manner described in noteNote 11 of our consolidated financial statements included in our 20192021 Annual Report to Stockholders):
. See “–“— Long-term Equity and Long-term Equity Incentive Awards” and “– Grant of Plan Based Awards During 20192021” for a more extensive description of the metrics applicable to the 20192021 Performance Plan.
We do not have a formal policy with respect to whether equity compensation should be paid in the form of stock options, restricted stock or RSUs. We generally grant restricted stock awards which vest after five years of service and in 2019,2021, as we had in 20182020 and 2017,2019, granted RSUs that vest after three years of service if, and to the extent, specified performance and/or market conditions are met. The compensation committee generally believes that restricted stock awards and RSUs are more effective than options in achieving our compensation objectives. Restricted stock has a greater retention value than options because of its five-year cliff vesting requirement and because before vesting, cash dividends are paid on all outstanding restricted stock as an additional element of compensation. RSUs provide an additional incentive component to equity based awards in that the units only vest if, and to the extent, performance or market conditions are satisfied. Restricted stock and RSUs align the interests of our officers with our stockholders and because fewer shares are normally awarded than in connection with the grant of options, they are potentially less dilutive.
Generally, our grants of restricted stock are made in January of each year in recognition of services provided for the prior year and the RSUs are granted in June or July of each year. We do not have a formal policy on timing these grants in connection with the release of material non-public information and in view of the three-year and five-year cliff vesting requirements with respect to RSUs and restricted stock awards, respectively, we do not believe such a formal policy is necessary.
Executive Benefits and Perquisites
Full-time Officers: We provide our full-time officers with a competitive benefits and perquisites program. We recognize that similar benefits and perquisites may be provided at other companies with which we might compete for talent. We review our benefits and perquisites program periodically to ensure it remains fair to our officers and employees.
Part-time Officers: The perquisites afforded to these officers are provided by Majestic and its affiliates; our board and its committees are not involved in determining the perquisites paid to such officers.
Employment and Severance Agreements; Post-Employment Benefits; Change of Control
None of our named executive officers have employment or severance agreements with us. They are “at will” employees who serve at the pleasure of our board of directors. We do not provide for any post-employment benefits to our named executive officers other than their entitlement to the benefits payable pursuant to our defined contribution pension plan and the accelerated vesting of our restricted stock awards and RSUs as a result of death, disability, retirement or a change of control, as described below.
Generally, in the event of death, disability (i.e., the inability to engage in gainful activity due to a life threatening or long lasting mental or physical impairment) or retirement (i.e., having reached the age of 65 and worked for us for at least ten consecutive years), such person’s restricted stock vests fully and a pro-rata portion (based on, among other things, the amount of time between the grant and the triggering event) of their RSUs will vest if and to the extent the applicable performance or market conditions are met as of the completion of the applicable three year performance cycle. In addition, upon a change of control, the (i) shares of restricted stock vest fully and (ii) the RSU’s vest fully if such change occurs 18 months after the beginning of the applicable performance cycle ( the “Cycle Mid-Point”) and, if such change occurs on or prior to the Cycle Mid-Point, a pro-rata portion (based on, among other things, the amount of time between the grant and such triggering event) of such RSUs vests, in each case without regard to satisfaction of market or performance conditions.
Subject to the specific terms and conditions of the applicable plan and award agreement, a change of control is generally deemed to occur if (i) any person, with specified exceptions, becomes the “beneficial owner” of securities representing 25% or more of the combined voting power of our then outstanding securities, (ii) a business combination or sale of all or substantially all of our assets is completed or (iii) there is a change in the composition of a majority of our board of directors, other than changes approved by incumbent directors.
Because we believe that the ownership by our named executive officers and non-employee directors of a meaningful financial stake in us serves to align their interests with those of our stockholders, we adopted stock ownership guidelines. Our guidelines reflect that the individuals identified below should own shares of common stock with a value not less than:
Title | | | Minimum Ownership Requirement |
Chief Executive Officer | | | 4 times current base salary |
Full-Time NEO | | | 2 times current base salary |
Part-Time NEO | | | The number of shares required to be owned by the full-time NEO with the lowest base salary |
Non-Employee Directors | | | 3 times annual base retainer |
All shares deemed to be beneficially owned as determined under Rule 13d-3 promulgated pursuant to the Exchange Act (including shares as to which beneficial ownership is disclaimed), are counted towards meeting the guidelines. The individuals subject to these guidelines generally have five years from the date they assume such
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title to achieve the requisite ownership, which will be measured as of December 31 of each year. The stock price used in determining satisfaction of the guidelines is the most favorable price during the two years ending on the December 31 measurement date. As of December 31, 2021, each of our named executive officers and non-employee directors satisfied these guidelines.
The board believes that transactions in our securities engaged in by directors, officers, employees, persons performing services pursuant to our compensation and services agreement and certain relatives of the foregoing (collectively, the “Covered Persons”), (i) that are designed to hedge (i.e., eliminate or reduce), the risks of ownership of our securities, or (ii) allow for the profit from any decrease in the value of our securities, are inappropriate.
Accordingly, the board has adopted an anti-hedging policy that applies to transactions in securities by Covered Persons. Under the policy, Covered Persons are prohibited from:
engaging in short sale transactions in our securities,
engaging in hedging or monetizing transactions through transactions in our securities or through the use of financial instruments designed for such purposes,
engaging in any transaction in securities where a reasonable investor would conclude that such transaction is for short-term gain or is speculative, and
owning financial instruments (other than those issued by us) or participating in investment strategies that represent a direct or indirect hedge of the economic risk of owning our securities or any other that give the holder any rights to acquire any such securities.
We are entitled to clawback or obtain reimbursement of an executive’s compensation under the following circumstances:
in the event we are required to restate our financial statements due to our material non-compliance, as a result of misconduct, with any financial reporting requirement under the securities laws, our chief executive officer and chief financial officer are required to reimburse us for (i) any bonus or other incentive based compensation or equity based compensation they receive from us during the 12 months following the initial public issuance of the financial document embodying such financial reporting requirement and (ii) the profits from the sale of our common stock during such 12 months;
if an executive officer’s relationship with us is terminated for cause (e.g., insubordination, dishonesty, incompetence, moral turpitude, the refusal to perform such person’s duties and responsibilities and other misconduct of any kind, as determined by the compensation committee), then the officer’s rights to all restricted stock, RSUs and performance share awards (except to the extent such awards have vested) are forfeited immediately; and
in accordance with any additional claw-back policy implemented by us, whether implemented prior to or after the grant of an award pursuant to our equity incentive plans, with respect to such awards.
In 2021, we paid Majestic $3,111,000 (excluding $295,000 of office expenses), of which 22.9% was allocated to our part-time named executive officers. The compensation allocated to these part-time named executive officers is variable/incentive pay and is based on the determinations of Fredric H. Gould, the chairman of Majestic. See “Certain Relationships and Related Transactions.”
In 2019,2021 we paid, our chairman and vice chairman, $289,406 and $115,763, respectively, and in 20202022 we intend to pay, our chairman and vice(i) chairman $298,088 and $312,992, respectively, and (ii) vice-chairman $119,235 and $125,197, respectively, for serving in such capacities. These officers did not receive any additional direct compensation from us in 20192021 other than equity based awards (i.e., restricted stock
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and RSUs). Any additional compensation received by them for services rendered to us is paid to them by Majestic. For additional information regarding compensation of these officers, see “Executive Compensation-SummarySummary Compensation Table” and “Certain Relationships and Related Transactions.”
Summary
Base Salary | Cash Bonus | Equity Grants | ||||||||||||||||||||||||||||||||||
Name | 2019 ($) | 2018 ($) | % Change | 2019 ($)(2) | 2018 ($)(2) | % Change | 2019 ($) (3) | 2018 ($) (4) | % Change | |||||||||||||||||||||||||||
Patrick J. Callan, Jr. (1) | 837,100 | 812,700 | 3.0 | 86,000 | 86,000 | — | 774,325 | 750,991 | 3.1 | |||||||||||||||||||||||||||
Lawrence G. Ricketts, Jr.(1) | 494,550 | 471,000 | 5.0 | 65,000 | 65,000 | — | 611,042 | 590,512 | 3.5 |
| | Base Salary | | | Cash Bonus | | | Equity Grants | |||||||||||||||||||
Name | | | 2021 ($) | | | 2020 ($) | | | % Change | | | 2021 ($)(2) | | | 2020 ($)(2) | | | % Change | | | 2021 ($)(3) | | | 2020 ($)(4) | | | % Change |
Patrick J. Callan, Jr.(1) | | | 865,000 | | | 865,000 | | | — | | | 86,500 | | | 73,100 | | | 18.3 | | | 1,030,002 | | | 600,200 | | | 71.6 |
Lawrence G. Ricketts, Jr.(1) | | | 520,000 | | | 520,000 | | | — | | | 65,000 | | | 55,250 | | | 17.6 | | | 811,826 | | | 474,054 | | | 71.3 |
(1) | Messrs. Callan’s and Ricketts’ base salaries for |
(2) | Reflects the cash bonuses paid in recognition of performance for such year, which bonuses are paid in the following year. |
(3) | Represents the aggregate grant date fair value of the shares of restricted stock granted in |
(4) | Represents the aggregate grant date fair value of shares of the restricted stock granted in |
Base Salary and Bonus
In determining 20192021 base salary, the compensation committee and the board (collectively referred to for the purposes of this section as the “board”) determined in late 2020 that the 3.0%despite being satisfied with Messrs. Callan’s and 5.0% increase in base salary for Messrs. Callan and Ricketts, respectively, for 2019 from 2018, was appropriate in recognition of theirRicketts’ performance in 20182020, their salaries should be maintained at 2020 levels due to the potential impact on us of the economic dislocations resulting from COVID-19 pandemic and as a general cost of living increase.
our desire to conserve cash.
In determining cash bonuses for 2019,2021, the compensation committeeboard took into account the factors to be considered pursuant to our Performance-based Cash Bonus Program –— the committeeboard considered our funds from operations, and Messrs. Callan’s and Ricketts’ efforts (throughadjusted funds from operations, the date of the committee meeting and giving effect to transactions contemplated to be completed by year-end), with respect to thethree properties acquired in 20192021 for an aggregate of approximately $49.3$24.3 million, the mortgage financings completed in 2019five retail properties sold (or contracted to be sold) for gross proceedsan aggregate net gain of approximately $50.3$25.5 million, and the overall management of our real estate portfolio. In its consideration of the management of the portfolio, the compensation committee,board, among other things, took into account management’s oversight of efforts with respect to resolve the challenges presented by our assisted living facility in Round Rock, TX, our attaining a physical occupancy rate (based on square footage) of approximately 98%, the sale of five properties for an aggregate net gain on sale of real estate of $4.3 million, and the negotiation and execution of nine new leases, lease amendments, modifications and extensions with respect to more than 259,000 square feet.
Long-term Equity and Equity Incentive Awards
We believe that our long-term equity and equity incentive compensation programs, using restricted stock awards with five-year cliff vesting and RSUs that vest after three years, subject to satisfaction of market or performance-based conditions, is a beneficial retention tool and provides an appropriate incentive for our officers. We are mindful of the potential dilution and compensation cost associated with awarding shares of restricted stock and RSUs and therefore we are conservative in granting such awards.
RSUs
In July 2019,2021, we granted RSUs exchangeable for up to an aggregate of 77,77680,700 shares of common stock, of which 2,750 were subsequently forfeited.stock. These RSUs vest on a cliff basis three years from the grant date if and to the extent applicable performance or market-based conditions are satisfied. These RSUs were issued as both a retention and motivational tool, had a grant date fair value of $923,000$1.6 million and represent 0.4% of our outstanding shares of common stock as of the grant date. For the threefive years ended December 31, 2019,2021, we awarded an aggregate of 230,276386,000 RSUs, representing an average of 0.4% per annum of our outstanding shares of common stock as of the respective grant dates.
Restricted Stock Awards
After reviewing the aggregate compensation received by our full-time named executive officers, our performance in 2019,2021, and the performance and responsibilities of each named executive officer, and taking into account the compensation committee’s continuing desire to emphasize equity based awards as a more significant component of total compensation for our full-time named executive officers while at the same time minimizing stockholder dilution, we awarded in 2020,2022, for 20192021 performance, 21,750 shares and 17,100 of restricted stock to Messrs. Callan and Ricketts, respectively, representing a 2.4% and 3.0% increase, respectively, fromthe same number of the restricted stock awards they were granted in 2019,2021, for 20182020 performance. In addition, we awarded in 2020,2022, for 20192021 performance, 10,670 shares of restricted stock to each of David W. Kalish, Fredric H. Gould and Matthew J. Gould, representing a 3.3% increase from the same number of awards they were granted in 2019,2021, for 20182020 performance. Assuming a continuing relationship with us, all of the restricted stock awarded in 20202022 vests in full in 2025,2027, subject to accelerated vesting upon the occurrence of specified events.
In 2019,2021, we awarded 150,050151,500 shares of restricted stock with an aggregate grant date fair value of $3.9 million—$3.1 million — such shares represented 0.77%0.74% of our issued and outstanding shares at the grant date. In the five years ended December 31, 2019,2021, we awarded an aggregate of 704,100736,000 shares of restricted stock, representing an average of 0.79%0.76% per annum of our outstanding shares of common stock as of the respective grant dates.
We believe the cumulative effect of the restricted stock awards and RSUs is not overly dilutive and has created significant incentives for our officers and employees. We intend to continue to award restricted stock and RSUs as we believe such awards (i) align management’s interests and goals with stockholders’ interests and goals and (ii) are an excellent motivator and employee retention tool.
Emphasis on Equity Awards
The compensation committee’s efforts to provide that long-term equity and long-term equity incentive compensation represent a significant component of total compensation for the full-time named executive officers, resulted in determinations of:
Equity Awards accounting for 92.3% and 92.6% of the performance/incentive based component of compensation awarded to Messrs. Callan and Ricketts, respectively, in 2021; and
Equity Awards accounting for 52.0% and 58.1% of base annual compensation (i.e., salary, cash bonus and the grant date fair value of the Equity Awards), for Messrs. Callan and Ricketts, respectively, in 2021.
Perquisites
Generally, the perquisites we provide to our full-time officers represent a small percentage of the compensation paid by us to these officers. We believe that such perquisites are competitive and appropriate.
Employment and Severance Agreements
We do not enter into employment agreements or severance agreements with any of our officers or employees as we believe such agreements are not beneficial to us, and that we can provide sufficient motivation to officers by using other types of compensation.
Post-Employment Benefit Programs
The following table sets forth the value (based on our closing stock price of $27.19$35.28 per share as of December 31, 2019)2021) of equity awards that would vest upon the occurrence of the specified events as of December 31, 2019:2021:
Upon Death or Disability(1) | Upon a Change of Control | |||||||||||||||
Name | Restricted Stock ($) | RSUs ($)(2) | Restricted Stock ($) | RSUs ($) | ||||||||||||
Patrick J. Callan, Jr.(3) | 2,651,025 | 561,817 | 2,651,025 | 872,119 | ||||||||||||
David W. Kalish | 1,296,419 | 185,910 | 1,296,419 | 288,592 | ||||||||||||
Lawrence G. Ricketts, Jr.(3) | 2,139,853 | 449,454 | 2,139,853 | 697,695 | ||||||||||||
Matthew J. Gould | 1,296,419 | 194,082 | 1,296,419 | 301,278 | ||||||||||||
Fredric H. Gould | 1,296,419 | 194,082 | 1,296,419 | 301,278 |
| | Upon Death, Disability or Retirement(1) | | | Upon a Change of Control | |||||||
Name | | | Restricted Stock ($) | | | RSUs ($)(2) | | | Restricted Stock ($) | | | RSUs ($) |
Patrick J. Callan, Jr.(3) | | | 3,686,760 | | | 734,085 | | | 3,686,760 | | | 1,140,770 |
David W. Kalish | | | 1,807,042 | | | 244,111 | | | 1,807,042 | | | 379,877 |
Lawrence G. Ricketts, Jr.(3) | | | 2,907,072 | | | 586,675 | | | 2,907,072 | | | 911,433 |
Matthew J. Gould | | | 1,807,042 | | | 256,500 | | | 1,807,042 | | | 399,889 |
Fredric H. Gould | | | 1,807,042 | | | 253,539 | | | 1,807,042 | | | 393,977 |
(1) | Because they have reached the age of 65 and have satisfied the period of service requirements, |
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(assuming satisfaction of performance and market conditions as of the end of applicable performance cycle) and all of the restricted stock owned by Messrs. Kalish and Fredric H. Gould would vest upon their retirement as of December 31, 2021; the market value of such person’s restricted stock awards and RSUs are reflected in the applicable column.
(2) | Assumes that the maximum level of market and performance conditions is achieved at the end of the applicable performance cycle. See “— Outstanding Equity Awards at Fiscal Year End.” |
(3) | See “— Summary Compensation Table” for information regarding the amount accumulated for this individual pursuant to our defined contribution plan. |
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The following table lists the annual compensation for the periods indicated of our CEO, CFO, and our three other named executive officers in 2019:2021.
Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | |||||||||||||||||
Patrick J. Callan, Jr. | 2019 | 837,100 | 86,000 | 709,275 | 180,626 | (6 | ) | 1,813,001 | |||||||||||||||
President and Chief Executive | 2018 | 812,700 | 86,000 | 717,394 | 218,454 | 1,834,548 | |||||||||||||||||
Officer(4) | 2017 | 789,000 | 78,900 | 659,842 | 131,217 | 1,658,959 | |||||||||||||||||
David W. Kalish | 2019 | — | — | 319,473 | 164,595 | 484,068 | |||||||||||||||||
Senior Vice President and | 2018 | — | — | 319,628 | 176,856 | 496,484 | |||||||||||||||||
Chief Financial Officer(5) | 2017 | — | — | 296,249 | 190,124 | 486,373 | |||||||||||||||||
Lawrence G. Ricketts, Jr. | 2019 | 494,550 | 65,000 | 557,152 | 51,016 | (7 | ) | 1,167,718 | |||||||||||||||
Executive Vice President and | 2018 | 471,000 | 65,000 | 571,383 | 50,329 | 1,157,712 | |||||||||||||||||
Chief Operating Officer(4) | 2017 | 448,500 | 56,700 | 525,389 | 48,371 | 1,078,960 | |||||||||||||||||
Matthew J. Gould | 2019 | 289,406 | — | 321,851 | 308,997 | 920,254 | |||||||||||||||||
Chairman of the Board(5) | 2018 | 275,625 | — | 322,605 | 331,762 | 929,992 | |||||||||||||||||
2017 | 275,625 | — | 298,811 | 354,809 | 929,245 | ||||||||||||||||||
Fredric H. Gould | 2019 | 115,763 | — | 321,851 | — | 437,614 | |||||||||||||||||
Vice Chairman of the Board(5) | 2018 | 110,250 | — | 322,605 | — | 432,855 | |||||||||||||||||
2017 | 110,250 | — | 298,811 | — | 409,061 |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | All Other Compensation ($) | | | Total ($) |
Patrick J. Callan, Jr. | | | 2021 | | | 865,000 | | | 86,500 | | | 738,334 | | | 118,655(6) | | | 1,808,489 |
President and Chief Executive | | | 2020 | | | 865,000 | | | 73,100 | | | 768,980 | | | 124,150 | | | 1,831,230 |
Officer(3) | | | 2019 | | | 837,100 | | | 86,000 | | | 709,275 | | | 180,626 | | | 1,813,001 |
David W. Kalish | | | 2021 | | | — | | | — | | | 319,061 | | | 239,521(7) | | | 558,582 |
Senior Vice President and | | | 2020 | | | — | | | — | | | 352,054 | | | 211,482 | | | 563,536 |
Chief Financial Officer(4) | | | 2019 | | | — | | | — | | | 319,473 | | | 164,595 | | | 484,068 |
Lawrence G. Ricketts, Jr. | | | 2021 | | | 520,000 | | | 65,000 | | | 582,515 | | | 52,789(8) | | | 1,220,304 |
Executive Vice President and | | | 2020 | | | 520,000 | | | 55,250 | | | 606,750 | | | 50,821 | | | 1,232,821 |
Chief Operating Officer(3) | | | 2019 | | | 494,550 | | | 65,000 | | | 557,152 | | | 51,016 | | | 1,167,718 |
Matthew J. Gould | | | 2021 | | | 298,088(5) | | | — | | | 329,283 | | | 450,713(7) | | | 1,078,084 |
Chairman of the Board(4) | | | 2020 | | | 298,088 | | | — | | | 354,342 | | | 397,950 | | | 1,050,380 |
| | 2019 | | | 289,406 | | | — | | | 321,851 | | | 308,997 | | | 920,254 | |
Fredric H. Gould | | | 2021 | | | 119,235(5) | | | — | | | 319,061 | | | — | | | 438,296 |
Vice Chairman of the Board(4) | | | 2020 | | | 119,235 | | | — | | | 354,342 | | | — | | | 473,577 |
| | 2019 | | | 115,763 | | | — | | | 321,851 | | | — | | | 437,614 |
(1) | Reflects bonuses paid in |
(2) | Represents RSUs and restricted stock granted in |
(3) |
All compensation received by Messrs. Callan and Ricketts is paid solely and directly by us. |
Other than the restricted stock and RSUs awarded to these individuals and the fees paid to Messrs. M. Gould and F. Gould for serving as Chairman and Vice Chairman, respectively: (a) we did not pay, nor were we allocated, any portion of such person’s base salary, bonus, defined contribution plan payments or perquisites in |
(5) | Such amounts are duplicative of the amounts reported as compensation for the Chairman and Vice Chairman of the Board of Directors under “Governance of the Company — Compensation of Directors.” |
(6) | Includes a |
(7) | Represents the amounts Majestic allocated to such person for services he performed on our behalf. See “Executive Compensation — Compensation Program” and “Certain Relationships and Related Transactions.” |
(8) | Includes a contribution of |
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The following table summarizes information regarding awards of restricted stock granted in 2019 pursuant to our 2016 Incentive Plan and RSUs granted in 20192021 pursuant to our 2019 Incentive Plan:
Name | Grant Date | Grant Type | Estimated Future Payouts under Equity Incentive Plan Awards: Maximum(#)(1) | All Other Stock Awards: Number of Shares of Stocks or Units (#)(2) | Grant Date Fair Value of Stock Awards ($)(3) | |||||||||||
Patrick J. Callan, Jr. | 1/10/2019 | RS | — | 21,250 | 546,125 | |||||||||||
7/1/2019 | RSU-TSR(4) | 6,875 | — | 65,931 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 6,875 | — | 97,219 | ||||||||||||
David W. Kalish | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,275 | — | 21,817 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,275 | — | 32,175 | ||||||||||||
Lawrence G. Ricketts, Jr. | 1/10/2019 | RS | — | 16,600 | 426,620 | |||||||||||
7/1/2019 | RSU-TSR(4) | 5,500 | — | 52,745 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 5,500 | — | 77,787 | ||||||||||||
Matthew J. Gould | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,375 | — | 22,776 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,375 | — | 33,594 | ||||||||||||
Fredric H. Gould | 1/10/2019 | RS | — | 10,330 | 265,481 | |||||||||||
7/1/2019 | RSU-TSR(4) | 2,375 | — | 22,776 | ||||||||||||
7/1/2019 | RSU-ROC(5) | 2,375 | — | 33,594 |
Name | | | Grant Date | | | Grant Type | | | Estimated Future Payouts under Equity Incentive Plan Awards: Maximum(#)(1) | | | All Other Stock Awards: Number of Shares of Stocks or Units (#)(2) | | | Grant Date Fair Value of Stock Awards ($)(3) |
Patrick J. Callan, Jr. | | | 1/6/21 | | | RS(2) | | | — | | | 21,750 | | | 442,395 |
| | 8/3/21 | | | RSU-TSR(4) | | | 7,250 | | | — | | | 110,925 | |
| | 8/3/21 | | | RSU-ROC(5) | | | 7,250 | | | — | | | 185,014 | |
David W. Kalish | | | 1/6/21 | | | RS | | | — | | | 10,670 | | | 217,028 |
| | 8/3/21 | | | RSU-TSR(4) | | | 2,500 | | | — | | | 38,250 | |
| | 8/3/21 | | | RSU-ROC(5) | | | 2,500 | | | — | | | 63,783 | |
Lawrence G. Ricketts, Jr. | | | 1/6/21 | | | RS | | | — | | | 17,100 | | | 347,814 |
| | 8/3/21 | | | RSU-TSR(4) | | | 5,750 | | | — | | | 87,975 | |
| | 8/3/21 | | | RSU-ROC(5) | | | 5,750 | | | — | | | 146,726 | |
Matthew J. Gould | | | 1/6/21 | | | RS | | | — | | | 10,670 | | | 217,028 |
| | 8/3/21 | | | RSU-TSR(4) | | | 2,750 | | | — | | | 42,075 | |
| | 8/3/21 | | | RSU-ROC(5) | | | 2,750 | | | — | | | 70,180 | |
Fredric H. Gould | | | 1/6/21 | | | RS | | | — | | | 10,670 | | | 217,028 |
| | 8/3/21 | | | RSU-TSR(4) | | | 2,500 | | | — | | | 38,250 | |
| | 8/3/21 | | | RSU-ROC(5) | | | 2,500 | | | — | | | 63,783 |
(1) | Represents the maximum number of shares underlying RSUs that will be issued if all the applicable market and performance conditions are met. There are no voting rights associated with these RSUs. Upon vesting, the recipients are entitled to the dividends that would have been paid on the shares underlying the RSUs had such shares been outstanding during the measurement period. |
(2) | Reflects restricted stock awards. These shares generally vest, on a cliff vesting basis, five years from the grant date, subject to such persons continued relationship with us. future terminates. |
(3) | The grant date fair value, as determined pursuant to ASC Topic 718, of the restricted stock, RSU – TSR and RSU – ROC awards are |
(4) | Represents shares underlying RSUs that |
(5) | Represents shares underlying RSUs that |
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The following table provides information as of December 31, 20192021 about the outstanding equity awards held by our named executive officers:
Stock Awards | ||||||||||||||||
Name | Number of Shares of Restricted Stock That Have Not Vested (#) | Market Value of Shares of Restricted Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(2) | Equity Incentive Plan Awards: Market or Payout Value of Shares Subject to RSUs That Have Not Vested ($)(1)(2)(3) | ||||||||||||
Patrick J. Callan, Jr. | 97,500(4 | ) | 2,651,025 | 41,250 | 1,121,588 | |||||||||||
David W. Kalish | 47,680(5 | ) | 1,296,419 | 13,650 | 371,144 | |||||||||||
Lawrence G. Ricketts, Jr. | 78,700(6 | ) | 2,139,853 | 33,000 | 897,270 | |||||||||||
Matthew J. Gould | 47,680(5 | ) | 1,296,419 | 14,250 | 387,458 | |||||||||||
Fredric H. Gould | 47,680(5 | ) | 1,296,419 | 14,250 | 387,458 |
| | Stock Awards | ||||||||||
Name | | | Number of Shares of Restricted Stock That Have Not Vested (#) | | | Market Value of Shares of Restricted Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Shares Subject to RSUs That Have Not Vested (#)(2) | | | Equity Incentive Plan Awards: Market or Payout Value of Shares Subject to RSUs That Have Not Vested ($)(1)(2)(3) |
Patrick J. Callan, Jr. | | | 104,500(4) | | | 3,686,760 | | | 42,000 | | | 1,481,760 |
David W. Kalish | | | 51,220(5) | | | 1,807,042 | | | 14,100 | | | 497,448 |
Lawrence G. Ricketts, Jr. | | | 82,400(6) | | | 2,907,072 | | | 33,500 | | | 1,181,880 |
Matthew J. Gould | | | 51,220(5) | | | 1,807,042 | | | 15,000 | | | 529,200 |
Fredric H. Gould | | | 51,220(5) | | | 1,807,042 | | | 14,500 | | | 511,560 |
(1) | The market value represents the product of the closing price of our common stock as of December 31, |
(2) | Assumes that all of the RSUs vest. |
(3) | If the measurement and vesting dates were December 31, vested. |
(4) | With respect to this individual, 2024, and 21,750 shares vest in each of January 2025 and 2026. |
(5) | With respect to this individual, |
(6) | With respect to this individual, 15,500 shares vest January 2022, 16,100 shares vest in January 2023, |
Option Exercises And Stock Vested
The following table sets forth information regarding the shares of restricted stock and shares underlying RSUs that vested in 2019:2021:
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#)(1) | Value Realized on Vesting ($)(1) | ||||||
Patrick J. Callan, Jr. | 14,500 | 355,105 | ||||||
David W. Kalish | 8,600 | 210,614 | ||||||
Lawrence G. Ricketts, Jr. | 11,500 | 281,635 | ||||||
Matthew J. Gould | 8,600 | 210,614 | ||||||
Fredric H. Gould | 8,600 | 210,614 |
| | Stock Awards | ||||
Name | | | Number of Shares Acquired on Vesting (#)(1) | | | Value Realized on Vesting ($)(2) |
Patrick J. Callan, Jr. | | | 32,250 | | | 781,795 |
David W. Kalish | | | 13,750 | | | 319,097 |
Lawrence G. Ricketts, Jr. | | | 26,500 | | | 639,170 |
Matthew J. Gould | | | 13,950 | | | 325,189 |
Fredric H. Gould | | | 13,950 | | | 325,189 |
(1) |
(2) | Reflects the aggregate market value of the shares that vested as of the applicable vesting date. The closing market |
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As required by and in accordance with Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder, we provide below a reasonable estimate of the relationship of the annual total compensation of Mr. Patrick J. Callan, Jr., our Chief Executive Officer and President, to the median annual total compensation of our employees (other than the CEO). For 2019:2021:
the annual total compensation of our CEO, as reported in the Summary Compensation Table, was $1,813,000;$1,808,000;
the median annual total compensation of all our employees (other than our CEO) was $237,000;$291,000; and
our CEO’s annual total compensation was 7.76.2 times that of the median of the annual total compensation of all our employees (other than our CEO).
In calculating this estimate, we included as our employees as of the December 31, 20192021 measurement date, all those individuals to whom we are required by the Internal Revenue Code of 1986, as amended, to issue a W-2. We identified our median employee by calculating our employees’ total annual compensation in the same manner that the CEO’s total annual compensation is calculated for the Summary Compensation Table.
SEC rules allow companies to adopt a variety of methodologies and apply various assumptions in presenting this ratio. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio we report.
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Background
In 20182020 and 2019,2021,
Matthew J. Gould, Chairman of our Board of Directors, served as a Senior Vice President and director of BRT Apartments Corp., a real estate investment trust focused on the ownership, operation and development of multi-family properties and listed on the New York Stock Exchange, as Chairman of the Board and Chief Executive Officer of the managing general partner of Gould Investors (which currently owns approximately 8.9%9.1 % of our outstanding shares of common stock), and as a Vice President of Majestic;
Fredric H. Gould, Vice Chairman of our Board of Directors, served as a director of BRT Apartments, as Chairman of the Board of Directors and sole stockholder of Majestic and, through December 31, 2021, as a director and sole stockholder of Georgetown Partners, the managing general partner of Gould Investors; and
Jeffrey A. Gould, a Director and Senior Vice President of our company, served as a Director, President and Chief Executive Officer of BRT Apartments, as a Senior Vice President and Director of the managing general partner of Gould Investors and as a Vice President of Majestic.
Matthew J. Gould and Jeffrey A. Gould are brothers and the sons of Fredric H. Gould. In addition, David W. Kalish, Mark H. Lundy, Israel Rosenzweig and Isaac Kalish, each of whom is an executive officer of our company, are officers of BRT Apartments and of the corporate managing general partner of Gould Investors. Isaac Kalish, is David Kalish’s son, and Steven Rosenzweig and Alon Rosenzweig, sons of Israel Rosenzweig,Rosenzweig’s sons, are employed by our affiliates.
Related Party Transactions
Pursuant to the compensation and services agreement, Majestic provides us with the services of affiliated executive, administrative, legal, accounting, clerical and property management personnel, as well as property acquisition, sale and lease consulting and brokerage services, consulting services in respect to mortgage financings and construction supervisory services.Services. In accordance with the compensation and services agreement, we paid Majestic $2,826,000$3,011,000 and $2,745,000$3,111,000 in 20192020 and 2018,2021, respectively, which included $1,307,000$1,265,000 and $1,226,000$1,365,000 for property management services, respectively. In 2020,2022, we will pay Majestic $1,746,000$1,720,000 and in addition, for its property management services, will pay it 1.5% and 2.0% of the rental payments (including tenant reimbursements)reimbursements and deferred rent) actually received by us from net lease tenants and operating lease tenants, respectively. We will not pay Majestic property management fees with respect to properties managed by third parties. Based on our property portfolio at December 31, 2019,2021, we estimate that the property management fee in 20202022 will be approximately $1,314,000.$1.3 million. Majestic may earn a profit from payments made to it under such agreement. In addition, under this agreement, we also paid Majestic $275,000 and $295,000 in 2020 and 2021, respectively, and will pay Majestic $317,000 in 2022, as reimbursement for our share of direct office expenses, including rent, telephone, postage, computer services, internet usage and supplies. Majestic is wholly owned by the vice chairman of our board, and certain of our part-time officers, including our part-time named executive officers, are officers of, and receive compensation from, Majestic.
us.
Majestic paidallocated an aggregate of $1,170,000$1,511,000 and $1,248,000$1,717,000 to the following officers (some of whom are also officers of Majestic and other affiliated companies) for the services they performed on our behalf in 20192020 and 2018,2021, respectively: Matthew J. Gould, $309,000$398,000 and $332,000;$451,000; David W. Kalish, $165,000$211,000 and $177,000;$240,000; Jeffrey A. Gould, $309,000$398,000 and $332,000;$451,000; Mark H. Lundy, $207,000$260,000 and $228,000;$294,000; Israel Rosenzweig, $49,000$61,000 and $56,000;$63,000; Isaac Kalish, $80,000$112,000 and $77,000;$137,000; and Steven Rosenzweig, $51,000$71,000 and $46,000.$81,000. The allocated amounts do not represent the amounts paid to such individuals which may be greater or less than the allocated amounts. These individuals also received compensation in 20192020 and 20182021 from our other affiliates, including BRT Apartments and Gould Investors, as well as other entities wholly owned by Fredric H. Gould, none of which provided services to us in 20192020 or 2018.
2021.
We obtain our property insurance in conjunction with Gould Investors and its affiliates and in 20192020 and 2018,2021, we reimbursed Gould $1,025,000$1,168,000 and $912,000,$1,402,000, respectively, for our proportionate share of the insurance premiums. We believe that we secure more favorable rates by obtaining property insurance on such basis.
During 20192020 and 2018, $1,973,0002021, $2,349,000 and $1,765,000,$2,590,000, respectively, of non-cash compensation expense relating to the restricted stock and RSUs held by our part-time executive officers and employees (who may also be compensated by Majestic or its affiliates), was charged to our operations. See “Executive
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Compensation-Compensation Discussion and Analysis-BackgroundProgram — Background”. The grant date fair value of the shares of restricted stock and RSUs awarded in 20192020 and 20182021 to persons performing services for us pursuant to the compensation and services agreement is $2,278,000$2,437,000 and $2,326,000,$2,224,000, respectively. The grant date fair value of such awards in 20192020 and 2018,2021, respectively, to these individuals is as follows: Jeffrey A. Gould, $322,000$354,000 and $323,000;$329,000; Mark H. Lundy, $319,000$352,000 and $323,000;$319,000; Israel Rosenzweig, $163,000$123,000 and $175,000;$125,000; Isaac Kalish, $163,000$179,000 and $172,000;$178,000; and Steven Rosenzweig, $99,000$116,000 and $109,000.$125,000.
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(PROPOSAL 3)
2)
General
The audit committee and the board of directors is seeking ratification of the appointment of Ernst & Young LLPE&Y as our independent registered public accounting firm for 2020.2022. A representative of Ernst & Young LLPE&Y is expected to be present at our annual meeting and will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions.
We are not required to have our stockholders ratify the selection of Ernst & Young LLPE&Y as our independent registered public accounting firm. We are doing so because we believe it is good corporate practice. If the stockholders do not ratify the selection, the audit committee will reconsider whether or not to retain Ernst & Young LLP,E&Y, but may, in its discretion, decide to retain such independent registered public accounting firm. Even if the selection is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in our and our stockholders’ interests.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2020.
2022.
Audit and Other Fees
The following table presents Ernst & Young LLP’sE&Y’s fees for the services and years indicated:
2019 | 2018 | |||||||
Audit fees(1) | $ | 1,026,000 | $ | 936,000 | ||||
Audit-related fees | — | — | ||||||
Tax fees(2) | 16,000 | 15,000 | ||||||
All other fees | — | — | ||||||
Total fees | $ | 1,042,000 | $ | 951,000 |
| | 2021 | | | 2020 | |
Audit fees(1) | | | $811,000 | | | $936,308 |
Audit-related fees | | | — | | | — |
Tax fees(2) | | | 17,000 | | | 16,480 |
All other fees | | | — | | | — |
Total fees | | | $828,000 | | | $952,788 |
(1) | Includes fees for audit services and related expenses associated with the annual audit of our consolidated financial statements, including |
(2) | Tax fees consist of fees for certain tax compliance services and tax advice. |
The audit committee has concluded that the provision of non-audit services listed above is compatible with maintaining the independence of Ernst & Young LLP.
E&Y.
Pre-Approval Policy for Audit and Non-Audit Services
The audit committee must pre-approve all audit and non-audit services involving our independent registered public accounting firm.
In addition to the audit work necessary for us to file required reports under the Securities Exchange Act of 1934, as amended (i.e., quarterly reports on Form 10-Q and annual reports on Form 10-K), our independent registered public accounting firm may perform non-audit services, other than those prohibited by the Sarbanes-Oxley Act of 2002, provided they are approved in advance by the audit committee. The audit committee approved all audit and non-audit services performed by our independent registered public accounting firm in 20192021 and 2018.2020.
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