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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.        )

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Preliminary Proxy Statement

 

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Definitive Proxy Statement

 

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Soliciting Material Pursuant to §240.14a-12

HCP, Inc.

(Name of Registrant as Specified In Its Charter)

 

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HCP, Inc.

3760 Kilroy Airport Way, Suite 300
Long Beach, CA 90806



NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on April 23, 2009

NOTICE IS HEREBY GIVEN that the 2009 annual meeting of stockholders (the "Annual Meeting") of HCP, Inc. (the "Company") will be held at the Long Beach Marriott, 4700 Airport Plaza Drive, Long Beach, CA 90815, on Thursday, April 23, 2009, at 9:30 a.m., California time, for the following purposes:

Only holders of record of the Company's common stock, par value $0.01 per share, as of the close of business on March 3, 2009, are entitled to notice of, and to vote at, the Annual Meeting and any postponements or adjournments thereof.

You are cordially invited to attend the meeting in person. Your vote is important to us. Whether or not you expect to attend the Annual Meeting, please submit your proxy as soon as possible. If you attend the Annual Meeting and vote in person, your proxy will not be used.

    By Order of the Board of Directors

 

 

GRAPHIC

 

 

Edward J. Henning
Corporate Secretary

Long Beach, California
March 9, 2009

 

 

HCP, Inc.



PROXY STATEMENT
2009 Annual Meeting of Stockholders
To Be Held on April 23, 2009

This Proxy Statement is being furnished by HCP, Inc. to our stockholders in connection with our Board of Directors' solicitation of proxies for use at our 2009 annual meeting of stockholders to be held on April 23, 2009, and at any and all adjournments or postponements thereof (the "Annual Meeting"). References in this Proxy Statement, unless the context requires otherwise, to "HCP," the "Company," "we," "our," "ours" and "us" refer to HCP, Inc. and our consolidated subsidiaries. Our principal executive offices are located at 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806. The approximate date on which these proxy materials are first being sent or made available to our stockholders is March 13, 2009.


IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS

This Proxy Statement and our 2008 Annual Report on Form 10-K are available on the Internet at www.ematerials.com/hcp if you are a stockholder of record and at www.proxyvote.com if you are a beneficial owner of shares held through a broker, bank or other nominee.


QUESTIONS AND ANSWERS ABOUT THE MEETING

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PRINCIPAL STOCKHOLDERS

Based on filings made under Section 13(d) and Section 13(g) of the Securities Exchange Act of 1934, as amended, the only persons known by us to beneficially own more than 5% of our common stock were as follows:

 
 
 
   
  Shares Beneficially Owned
 

 
 
Name of Beneficial Owner
  Address of
Beneficial Owner

  Amount and Nature
Of Beneficial
Ownership

  Percent of
Class

 

 
 

The Vanguard Group, Inc.

  100 Vanguard Blvd.
Malvern, PA 19355
    21,821,856 (1)   8.6 %
   

Barclays Global Investors, NA

 

400 Howard Street
San Francisco, CA 94105

   
17,914,936

(2)
 
7.1

%
   

State Street Bank and Trust Company

 

One Lincoln Street
Boston, MA 02111

   
15,783,670

(3)
 
6.2

%
   
(1)
Share and beneficial ownership information for The Vanguard Group, Inc. ("Vanguard") is given as of December 31, 2008, and was obtained from a Schedule 13G/A filed on February 13, 2009 with the Securities and Exchange Commission. Vanguard has sole voting power over 294,483 shares and sole dispositive power over 21,821,856 shares of our common stock. Vanguard Fiduciary Trust Company ("VFTC"), a wholly-owned subsidiary of Vanguard, is the beneficial owner of 294,483 shares as a result of serving as investment manager of collective trust accounts. VFTC directs the voting of these shares.

(2)
Share and beneficial ownership information for Barclays Global Investors, NA ("Barclays") is given as of December 31, 2008, and was obtained from a Schedule 13G filed on February 5, 2009 with the Securities and Exchange Commission. According to the Schedule 13G, Barclays has sole voting power over 6,309,858 shares and sole dispositive power over 7,590,022 shares; Barclays Global Fund Advisors has sole voting power over 8,462,971 shares and sole dispositive power over 8,478,795 shares; Barclays Global Investors, Ltd. has sole voting power over 1,113,550 shares and sole dispositive power over 1,203,645 shares; Barclays Global Investors Japan Limited has sole voting and dispositive power over 502,642 shares; and Barclays Global Investors Canada Limited has sole voting and dispositive power over 139,832 shares. In each case, the shares are held by the company in trust accounts for the economic benefit of the beneficiaries of those accounts.

(3)
Share and beneficial ownership information for State Street Bank and Trust Company ("State Street") is given as of December 31, 2008, and was obtained from a Schedule 13G filed on February 13, 2009 with the Securities and Exchange Commission. State Street has sole voting power and shared dispositive power over 15,783,670 shares of our common stock.

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BOARD OF DIRECTORS AND EXECUTIVE OFFICERS

Directors of the Company

Set forth below is information regarding the principal occupation for at least the past five years of each of our nominees for election as directors, all of whom currently serve as directors.

Robert R. Fanning, Jr.     Mr. Fanning, 66, was, from 2004 through December 2005, a Director of Speltz & Weis LLC, a firm specializing in interim management of financially challenged hospitals and healthcare systems. Mr. Fanning served as the Chief Operating Officer of Saint Vincent Catholic Medical Centers in New York City from April 2004, when Speltz & Weis was engaged by the hospital system, until December 2005. Huron Consulting Group acquired Speltz & Weis in May 2005. Mr. Fanning retired from Huron Consulting Group in December 2005.

James F. Flaherty III.     Mr. Flaherty, 51, has been Chairman of our Board of Directors since May 2005, our Chief Executive Officer since May 2003, and our President and a member of our Board of Directors since joining us in October 2002. Prior to joining HCP, Mr. Flaherty was affiliated with Merrill Lynch & Co. for 19 years, serving in a variety of investment banking, capital markets and private equity functions in New York, London and Los Angeles and was head of Merrill Lynch's Global Health Care Group. Mr. Flaherty is a member of the Board of Trustees of the University of Notre Dame and sits on the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT").

Christine N. Garvey.     Ms. Garvey, 63, was the Global Head of Corporate Real Estate Services at Deutsche Bank AG from 2001 to 2004, where she continues to provide consulting services since her departure. Prior to that, she served as Vice President, Worldwide Real Estate and Workplace Resources at Cisco Systems, Inc. and as Group Executive Vice President at Bank of America. Ms. Garvey has served as a member of the Board of Trustees of ProLogis (NYSE:PLD) since September 2005 when Catellus Development Corporation, where she had been a member of the Board since 1995, merged into a subsidiary of ProLogis. She is also a member of the Board of Directors of UnionBanCal Corporation (NYSE:UB) and Maguire Properties, Inc. (NYSE:MPG) and served on the Board of Directors of Hilton Hotels Corporation through October 2007.

David B. Henry.     Mr. Henry, 60, has been Vice Chairman of the Board of Directors and Chief Investment Officer of Kimco Realty Corporation (NYSE:KIM), a real estate investment trust, since May 2001. Mr. Henry also became President of Kimco Realty Corporation in November 2008. Mr. Henry joined Kimco Realty Corporation after 23 years at General Electric where he was Chief Investment Officer and Senior Vice President of GE Capital Real Estate and Chairman of GE Capital Investment Advisors. Mr. Henry also serves on the Board of Directors of TRI, Inc., an affiliated company of Local Initiatives Support Corporation.

Lauralee E. Martin.     Ms. Martin, 58, has been the Chief Operating and Financial Officer and on the Board of Directors of Jones Lang LaSalle Incorporated (NYSE:JLL), the world's leading real estate services and money management firm, since 2005. Ms. Martin joined Jones Lang LaSalle in 2002 as Chief Financial Officer after 15 years with Heller Financial, Inc. where she was Chief Financial Officer and President of the Real Estate Finance Division. Since 2004, Ms. Martin has served as a director of KeyCorp (NYSE:KEY), one of the nation's largest bank-based financial services companies, and also served on the Board of Directors of Gables Residential Trust from 1994 through 2005.

Michael D. McKee.     Mr. McKee, 63, retired in September 2008 as the Chief Executive Officer and Vice Chairman of the Board of Directors of The Irvine Company, a privately-held real estate development and investment company. Mr. McKee had been an executive officer of The Irvine Company since 1994. Prior to that, he was a partner with the law firm of Latham & Watkins LLP from 1986 to 1994. Mr. McKee is a Director of Realty Income Corporation (NYSE:O) and serves on the Board of Directors of the Tiger Woods Foundation.

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Harold M. Messmer, Jr.     Mr. Messmer, 63, has been Chairman and Chief Executive Officer of the global staffing firm Robert Half International Inc. (NYSE:RHI) since 1986. In addition to its professional staffing services, RHI is the parent company of Protiviti, a leading internal audit and business risk consulting firm. Mr. Messmer also is a member of the Executive Council of the Medical Center of UCSF (University of California San Francisco) and serves on the Board of Governors of the UCSF Foundation.

Peter L. Rhein.     Mr. Rhein, 67, has been a general partner of Sarlot and Rhein, a real estate investment partnership, since 1967 and a co-managing member of BBC Properties, LLC, a real estate investment and development company, since October 2001. From 1970 until 1984, he was employed in various capacities by Wells Fargo Realty Advisors and its affiliates. Since 2004, Mr. Rhein has served as a director of Cohen & Steers, Inc. (NYSE:CNS), one of the nation's largest managers of real estate mutual funds. Mr. Rhein also serves on the Board of Governors of the Fulfillment Fund, a non-profit organization which supports education for disadvantaged students. Mr. Rhein is a certified public accountant.

Kenneth B. Roath.     Mr. Roath, 73, has been our Chairman Emeritus since May 2005, and was previously Chairman of our Board of Directors since 1988. Mr. Roath joined HCP at its inception in March 1985, as President and Chief Operating Officer, prior to its becoming a public company. From 1988 until May 2003, he was also our Chief Executive Officer. Prior to being acquired in August 2007, Mr. Roath served on the Board of Directors of Spirit Finance Corporation (NYSE:SPC), a real estate investment trust. He is a past Chairman of NAREIT.

Richard M. Rosenberg.     Mr. Rosenberg, 78, served as Chairman and Chief Executive Officer of BankAmerica Corp. from 1990 until his retirement in 1996. Prior to joining BankAmerica Corp. in 1987, Mr. Rosenberg served as President and Chief Operating Officer of Seattle-First National Bank and Seafirst Corp. He served as Vice Chairman and Director of Wells Fargo Bank and was with that organization for 22 years. Mr. Rosenberg serves on the Board of Directors of several non-profit organizations, including the San Francisco Symphony. He is also Chairman of the Board of Governors of the UCSF Foundation, a member of the Board of Governors of the Buck Institute for Age Research and serves as a Trustee of the California Institute of Technology.

Joseph P. Sullivan.     Mr. Sullivan, 66, is Chairman of the Board of Advisors of RAND Health and Chairman of the Board of Advisors of the UCLA Medical Center. From March 2000 through March 2003, he served as Chairman of the Board and Chief Executive Officer of Protocare, Inc., a healthcare clinical trials and consulting organization. Mr. Sullivan was Chairman of the Board, Chief Executive Officer and President of American Health Properties, Inc. from 1993 until HCP's acquisition of American Health Properties in 1999. He is a Director of Amylin Pharmaceuticals, Inc. (NASDAQ:AMLN), a biopharmaceutical company, AutoGenomics, an early stage private company developing a fully automatic laboratory machine for protemic and genetic testing, and Cymetrix, Inc., a provider of customized revenue cycle solutions to hospitals and healthcare networks. He served as a director of Covenant Care, Inc., a provider of long term care services, from 2000 until March 2006.

Executive Officers of the Company

The following sets forth biographical information regarding our executive officers, other than Mr. Flaherty, whose biographical information is set forth above.

George Doyle.     Mr. Doyle, 39, became our Senior Vice President—Chief Accounting Officer in January 2007 and was previously our Vice President—Chief Accounting Officer since 2004. On March 2, 2009, Mr. Doyle was appointed our interim principal financial officer for the period from March 31, 2009 until May 1, 2009. Prior to joining HCP in 2004, Mr. Doyle was a senior manager with the accounting firm KPMG LLP.

Paul F. Gallagher.     Mr. Gallagher, 48, became our Executive Vice President—Chief Investment Officer in May 2006 after joining us as Executive Vice President—Portfolio Strategy in October 2003. From 1988

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until he joined HCP, Mr. Gallagher was employed by General Electric Commercial Finance, including most recently as Managing Director of its Strategic Ventures department.

Edward J. Henning.     Mr. Henning, 56, became our Executive Vice President, General Counsel and Corporate Secretary in January 2007. In addition, he became our Chief Administrative Officer in January 2008. From 1995 until January 2007, Mr. Henning served as our Senior Vice President, General Counsel and Corporate Secretary. He joined us in 1994 as Vice President, Senior Legal Counsel and Corporate Secretary.

Thomas D. Kirby.     Mr. Kirby, 62, became our Executive Vice President—Acquisitions and Valuations in February 2009. Mr. Kirby previously served as our Senior Vice President—Acquisitions and Valuations. He joined us in 1998 after 20 years with a healthcare oriented national valuation firm.

Thomas M. Klaritch.     Mr. Klaritch, 51, is Executive Vice President—Medical Office Properties. From October 2003 through April 2008, he served as our Senior Vice President—Medical Office Properties. Prior to that, he was a founding member and Chief Financial Officer of MedCap Properties LLC, a real estate company located in Nashville, TN that owned, operated and developed real estate in the healthcare field. (HCP acquired MedCap Properties LLC in October 2003.) He is a certified public accountant.

Timothy M. Schoen.     Mr. Schoen, 41, became our Executive Vice President—Life Science and Investment Management in February 2009 and was previously our Senior Vice President, Investment Management since 2007. From 1997 until he joined HCP, Mr. Schoen was employed by Kilroy Realty Corporation (NYSE: KRC), a real estate investment trust that owned, developed and operated office and industrials buildings, and most recently served as its Vice President, Corporate Finance.

Susan M. Tate.     Ms. Tate, 48, became our Executive Vice President—Asset Management and Senior Housing in February 2009 after joining us as Senior Vice President—Asset Management in February 2007. Prior to joining us, she spent 19 years at JPMorgan and its predecessor institutions in both healthcare and real estate lending positions, including most recently as Vice President, Real Estate Corporate Banking.

Mark A. Wallace.     Mr. Wallace, 51, became our Executive Vice President and Chief Financial Officer in January 2007. On February 28, 2009, Mr. Wallace tendered his resignation as an executive officer of HCP effective March 31, 2009. Mr. Wallace joined us in March 2004 as Senior Vice President and Chief Financial Officer. In addition, he became our Treasurer in September 2006. Prior to joining us, from August 2003 through November 2003, Mr. Wallace served as Chief Financial Officer of Atrix Laboratories, a specialty pharmaceutical company. He served as Executive Vice President and Chief Financial Officer of Titanium Metal Corporation (NYSE:TIE), a titanium manufacturer, from 2000 to 2002. In addition, he served as Vice President and CFO of Tremont Corporation, a metal products production company, from 2000 to 2002. He is a certified public accountant.

There are no family relationships among any of our directors or executive officers.

Board Meeting Attendance

During 2008, our Board of Directors held nine meetings. During that period, each of our directors attended at least 75% of the meetings of the Board and each of its committees on which he or she served. Our policy is that directors should make every effort to attend in person the four regularly scheduled quarterly meetings of the Board and the annual stockholders meeting, as well as the associated meetings of committees of which they are members and all other scheduled meetings of the Board and meetings of committees of which they are members. Members may attend such meetings by telephone or video conference, if necessary, to mitigate conflicts. All of our current Board members attended the 2008 annual meeting of stockholders in person.

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Board Independence

To be considered independent under the NYSE rules, the Board must affirmatively determine that a director does not have any direct or indirect material relationship with HCP or its subsidiaries. Our Board has established and employs categorical standards to assist in determining whether a relationship between any director and HCP is material and thus would disqualify such director from being independent. These categorical standards are included in Section II of HCP's Corporate Governance Guidelines, which are posted on the Investor Relations—Corporate Governance section of our website at www.hcpi.com and may also be obtained in print, without charge, by any stockholder upon request to our Corporate Secretary. The full text of these categorical standards is also attached as Annex 1 to this Proxy Statement.

The Board has determined, in accordance with the categorical standards discussed above and the NYSE rules, that each of Ms. Garvey, Ms. Martin and Messrs. Fanning, Henry, McKee, Messmer, Rhein, Roath, Rosenberg and Sullivan is independent within the meaning of the rules of the NYSE. The Board further determined that Mr. Flaherty is not independent due to his present employment with HCP.

In making its determination that each of our directors (other than Mr. Flaherty) is independent, the Board considered Mr. Rhein's service as a non-employee director of Cohen & Steers, Inc. whose wholly owned subsidiary, Cohen & Steers Capital Management, Inc., manages mutual funds that in the aggregate, owned approximately 2.0% of the Company's common stock as of January 12, 2009. The Board affirmatively determined that, because of the nature of Mr. Rhein's relationship with the entity and the amount involved, he does not have a material relationship with the Company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company).

Committees of the Board and Corporate Governance Guidelines

Our Board of Directors has a standing Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Finance and Risk Management Committee. Current copies of the charters for each of these committees as well as our Corporate Governance Guidelines are posted on the Investor Relations—Corporate Governance section of our website at www.hcpi.com , and may be obtained in print, without charge, by any stockholder upon request to our Corporate Secretary.

Audit Committee.     The Audit Committee currently consists of Mr. Fanning, Ms. Garvey (Chair), Ms. Martin and Mr. Sullivan and, prior to April 2008, the members of the Audit Committee were Messrs. Fanning, Henry, Rhein (Chair) and Sullivan. The Audit Committee held five meetings during 2008. Our Board has determined that each director that served on our Audit Committee is, or at the relevant time was, "independent" within the meanings of NYSE and SEC rules and financially literate under NYSE rules. The Board has determined that each of Ms. Martin and Mr. Sullivan is an audit committee financial expert within the meaning of applicable SEC rules and has accounting or related financial management expertise.

Our Audit Committee operates pursuant to a written charter. The primary purpose of our Audit Committee is to assist the Board with its oversight responsibilities regarding:

In addition, our Audit Committee is responsible for preparing the Audit Committee Report required to be prepared pursuant to SEC rules for inclusion in our annual proxy statement.

Our Audit Committee generally meets with our independent auditors at least four times a year. To ensure independence of the audit, our Audit Committee consults separately and jointly with the independent

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auditors and management. The Audit Committee Report is included in this Proxy Statement under "Audit Committee Report to Stockholders."

Compensation Committee.     The Compensation Committee currently consists of Messrs. Henry, McKee (Chair), Messmer and Rhein and, prior to April 2008, the members of the Compensation Committee were Ms. Cirillo-Goldberg and Messrs. McKee (Chair) and Messmer. The Compensation Committee held five meetings during 2008. Our Board has determined that each director that served on our Compensation Committee is, or at the relevant time was, independent under NYSE rules. Our Compensation Committee operates pursuant to a written charter. Pursuant to its charter, our Compensation Committee's responsibilities include the following:

Our Compensation Committee also reviews and makes recommendations regarding the compensation paid to members of the Board who are not also employed by HCP ("Non-Employee Directors"). However, our full Board determines the compensation for our Non-Employee Directors.

Our Compensation Committee may form subcommittees and delegate to its subcommittees such powers and authority as it deems appropriate, except that our Compensation Committee may not delegate to a subcommittee (i) its authority to approve compensation levels and award grants for senior executive officers and other high-level employees, or (ii) any other power or authority required by applicable law or regulation to be exercised by the committee as a whole. Our Compensation Committee has delegated to the Stock Award Subcommittee the authority to make restricted stock grants to certain of our employees of up to an annual aggregate limit of 75,000 shares of our common stock each year. Mr. Flaherty is currently the sole member of the Stock Award Subcommittee. The Stock Award Subcommittee may only make these grants to Vice Presidents and more junior officers and employees of HCP. Other than the authority delegated to the Stock Award Subcommittee, our Compensation Committee has no current intention to delegate any of its authority to any other committee or subcommittee. Our executive officers, including the Named Executive Officers, do not have any role in determining the form or amount of compensation paid to our Named Executive Officers. However, our Chief Executive Officer does make recommendations to the Compensation Committee with respect to compensation paid to the other executive officers.

Pursuant to its charter, our Compensation Committee is authorized to retain such independent counsel, compensation and benefits consultants and other outside experts or advisors as it believes to be necessary or appropriate to carry out its duties. Prior to November 2008, our Compensation Committee retained the firm of Semler Brossy Consulting Group, LLC ("Semler Brossy") as independent compensation

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consultants to assist it in determining the compensation levels for our senior executive officers. In November 2008, the Compensation Committee retained the firm of FPL Associates, L.P. ("FPL Associates") as independent compensation consultants. The Compensation Committee made its 2008 compensation decisions, including decisions with respect to the Named Executive Officers' compensation, after consulting with its compensation consultants. For 2008, the consultants advised the Compensation Committee with respect to trends in executive compensation, determination of pay programs, assessment of competitive pay levels and mix ( e.g. , proportion of fixed pay to incentive pay, proportion of annual cash pay to long-term incentive pay) and setting compensation levels. The compensation consultants also reviewed comparable equity REITs and other real estate companies for 2008 and helped the Compensation Committee obtain and evaluate current executive compensation data for these companies. All compensation decisions were made solely by our Compensation Committee or Board of Directors.

Nominating and Corporate Governance Committee.     The Nominating and Corporate Governance Committee currently consists of Ms. Martin and Messrs. Henry, Messmer and Rosenberg (Chair) and, prior to April 2008, the members of the Nominating and Corporate Governance Committee were Ms. Cirillo-Goldberg and Messrs. Henry, Messmer and Rosenberg (Chair). The Nominating and Corporate Governance Committee held two meetings in 2008. Our Board has determined that each member of our Nominating and Corporate Governance Committee is "independent" under NYSE rules. Our Nominating and Corporate Governance Committee acts pursuant to a written charter. Pursuant to its charter, our Nominating and Corporate Governance Committee's responsibilities include: identifying qualified candidates to become Board members, recommending to our Board director nominees for election by the stockholders, selecting candidates to fill any vacancies on our Board, developing and recommending to our Board a set of corporate governance guidelines and principles applicable to the Company and overseeing the evaluation of the Board.

Finance and Risk Management Committee.     The Finance and Risk Management Committee, which was named the Finance Committee prior to January 2009, currently consists of Messrs. Henry, Rosenberg, and Sullivan (Chair). Messrs. Henry, Rosenberg, and Sullivan served as members of the committee for all of 2008. The Finance Committee held five meetings in 2008. Our Board has determined that each member of the committee is "independent" under NYSE rules. The committee was initially formed in order to facilitate the offer, issuance and sale of shares of HCP's common stock, the classification or reclassification, offer, issuance and sale of shares of separate classes or series of HCP's preferred stock and the offer, issuance and sale of HCP's debt securities on an expedited basis, as well as HCP's entry into credit facilities, and loan, hedging and other financing transactions. In January 2009, the Finance Committee was renamed the Finance and Risk Management Committee and the responsibilities of the committee were expanded to include: overseeing the enterprise risk management activities of HCP, including reviewing and discussing with management and the independent auditors any significant risks or exposures of HCP, the steps management has taken to identify, minimize, monitor or control such risks or exposures, and HCP's underlying policies with respect to risk assessment and risk management.

Corporate Governance Guidelines.     Our Board has adopted Corporate Governance Guidelines, which direct our Board's actions with respect to, among other things, Board composition, Board meetings, the Board's standing committees and procedures for appointing members of these committees, stockholder communications with the Board, expectations for directors, succession planning and self-evaluation.

Director Nominees.     Our Nominating and Corporate Governance Committee does not set specific, minimum qualifications that nominees must meet in order to be recommended as a candidate for election to the Board of Directors. Rather, the Nominating and Corporate Governance Committee considers a number of factors when reviewing potential nominees for the Board, including, but not limited to: (i) personal and professional integrity, ethics and values; (ii) experience in corporate management, such as serving as an officer or former officer of a publicly held company; (iii) experience in our industry; (iv) experience with relevant social policy concerns; (v) experience as a board member of another publicly held company; (vi) the ability and willingness to commit adequate time to our Board and its committee

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matters; (vii) the fit of the individual's skills with those of the other members (and potential members) of our Board in building a board that is effective, collegial and responsive to HCP's needs; (viii) academic expertise in an area of HCP's operations; and (ix) practical and mature business judgment. In addition to the criteria set forth above, the Nominating and Corporate Governance Committee strives to create diversity in perspective, background and experience in the Board as a whole.

In identifying, evaluating and selecting potential director nominees for election at each annual meeting of stockholders, and nominees for directors to be elected by the Board to fill vacancies and newly created directorships, the Nominating and Corporate Governance Committee engages in a selection process. The Nominating and Corporate Governance Committee will consider as potential director nominees candidates recommended by various sources, including any member of the Board, any stockholder of the Company or senior management. The Nominating and Corporate Governance Committee may also hire a search firm, if deemed appropriate. All potential director nominees will be initially reviewed by the Chairman of the Nominating and Corporate Governance Committee, or in the Chairman's absence, any other member of the committee delegated to initially review director candidates. The reviewing committee member will make an initial determination in his or her own independent business judgment as to the qualifications and fit of such director candidates based on the criteria set forth above. If the reviewing committee member determines that it is appropriate to proceed, the Chief Executive Officer and at least one member of the Nominating and Corporate Governance Committee will interview the prospective director candidates. Other Board members may also interview the prospective candidates. The Nominating and Corporate Governance Committee will provide informal progress updates to the Board and will meet to consider and recommend final director candidates to the entire Board. The Board determines which candidates are nominated or elected to fill a vacancy.

As described above, the Nominating and Corporate Governance Committee will consider candidates recommended by stockholders. Properly communicated stockholder recommendations will be considered in the same manner as recommendations received from other sources. Such director recommendations will be considered properly communicated if submitted in writing to the Chairman of the Nominating and Corporate Governance Committee of the Board of Directors, c/o HCP, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806, together with appropriate biographical information and descriptions of the candidate's qualifications and the relationship, if any, to the stockholder.

All of our director nominees are currently directors of HCP and all director nominees were previously elected to serve on our Board by our stockholders.

Meetings of Independent Directors

In addition to the meetings of the committees of the Board described above, in connection with the Board meetings, our independent directors met in executive session without management present four times during fiscal 2008. Mr. Rosenberg has been elected as our Board's Lead Director, and presides at the executive sessions of the independent directors.

Stockholder Communications with the Board

Stockholders who wish to contact members of our Board may send written correspondence to the Board of Directors of HCP, Inc. at the mailing address for our executive offices at 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806. Stockholders should provide proof of share ownership with their correspondence. It is suggested that stockholders also include their contact information. All communications from verified stockholders will be received and processed by us and then directed to the appropriate member(s) of our Board.

In addition, any interested party who wishes to communicate directly with our Lead Director, or with our independent directors as a group, may contact our Corporate Secretary at the mailing address for our executive offices at 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806. All communications will be received and processed by us and then directed to our Lead Director.

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DIRECTOR COMPENSATION—2008

The following table presents information regarding the compensation paid for 2008 to each of our Non-Employee Directors. The compensation paid to Mr. Flaherty, who is also one of our employees, is presented below in the Summary Compensation Table and the related explanatory tables. Mr. Flaherty is not entitled to receive additional compensation for his service as a director.

 
 
Name
  Fees
Earned or
Paid in
Cash
($)

  Stock
Awards
($)(1)(2)(3)

  Option
Awards
($)(1)(2)(3)

  Non-Equity
Incentive
Plan
Compensation
($)

  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)

  All Other
Compensation
($)

  Total
($)

 

(a)


 

(b)


 

(c)


 

(d)


 

(e)


 

(f)


 

(g)


 

(h)


 
   

Mary A. Cirillo-Goldberg(4)

    16,558     (36,681 )   0     0     0     0     (20,123 )
   

Robert R. Fanning, Jr.

    46,500     114,750     0     0     0     0     161,250  
   

Christine N. Garvey

    64,602     32,377     0     0     0     0     96,979  
   

David B. Henry

    54,500     84,985     0     0     0     0     139,485  
   

Lauralee E. Martin(5)

    32,942     19,752     0     0     0     0     52,694  
   

Michael D. McKee

    63,500     114,750     0     0     0     0     178,250  
   

Harold M. Messmer, Jr.

    49,500     114,750     0     0     0     0     164,250  
   

Peter L. Rhein

    59,898     114,750     0     0     0     0     174,648  
   

Kenneth B. Roath(6)

    42,000     114,750     0     0     0     0     156,750  
   

Richard M. Rosenberg

    75,500     114,750     0     0     0     0     190,250  
   

Joseph P. Sullivan

    63,000     84,985     0     0     0     0     147,985  
   
(1)
The amounts reported in column (c) of the table above reflect the aggregate dollar amounts recognized for stock awards for financial statement reporting purposes with respect to 2008 (disregarding any estimate of forfeitures related to service-based vesting conditions). No stock awards or option awards granted to Non-Employee Directors were forfeited during 2008, except that Ms. Cirillo-Goldberg forfeited 4,500 unvested shares of restricted stock upon her resignation from the Board in April 2008. For a discussion of the assumptions and methodologies used to calculate the amounts referred to above, please see the discussion of stock awards and option awards contained in Note 21—Compensation Plans to the consolidated financial statements included as part of HCP's 2008 Annual Report on Form 10-K, filed with the SEC and incorporated herein by reference. Messrs. Fanning, McKee, Messmer, Rhein, Roath and Rosenberg have reached retirement age (as defined in HCP's plans and awards) and, accordingly, the entire grant date fair value of the restricted stock awards they received in 2008 was recognized and expensed for financial statement reporting purposes in 2008.

13


(2)
The following table presents the number of outstanding and unexercised option awards and the number of unvested restricted stock awards held by each of our Non-Employee Directors as of December 31, 2008. All of the option awards reported in the table below were vested and exercisable as of December 31, 2008.
 
 
Director
  Number of Shares
Subject to Outstanding
Options as of 12/31/08

  Number of Unvested
Shares of Restricted
Stock as of 12/31/08

 
   

Mary A. Cirillo-Goldberg

    0     0  
   

Robert R. Fanning, Jr.

    30,880     7,500  
   

Christine N. Garvey

    0     4,125  
   

David B. Henry

    0     7,500  
   

Lauralee E. Martin

    0     3,000  
   

Michael D. McKee

    0     7,500  
   

Harold M. Messmer, Jr.

    0     7,500  
   

Peter L. Rhein

    0     7,500  
   

Kenneth B. Roath

    0     7,500  
   

Richard M. Rosenberg

    0     7,500  
   

Joseph P. Sullivan

    0     7,500  
   
(3)
As described below, we granted each of our Non-Employee Directors (other than Ms. Cirillo-Goldberg) an award of 3,000 shares of restricted stock on April 24, 2008, the date of our 2008 annual meeting of stockholders. Each of these restricted stock awards had a value of $114,750 based on the closing price of a share of our common stock on the grant date. See footnote (1) for the assumptions used to value these awards. No option awards were granted to our Non-Employee Directors during 2008.

(4)
Ms. Cirillo-Goldberg resigned as a member of our Board of Directors effective April 24, 2008. As noted above, Ms. Cirillo-Goldberg forfeited 4,500 unvested shares of restricted stock upon her resignation. The negative number reported in the "Stock Awards" column for Ms. Cirillo-Goldberg reflects the reversal of expense that had previously been recorded in HCP's financial statements and reported in the Director Compensation Table of the proxy statement for prior years in connection with these shares.

(5)
Ms. Martin was elected to our Board of Directors on April 24, 2008.

(6)
During the period that Mr. Roath was employed by HCP, he accrued an annual retirement benefit pursuant to HCP's Supplemental Executive Retirement Plan. Mr. Roath is the only participant in this plan. Mr. Roath's Supplemental Executive Retirement Plan benefit paid by HCP in 2008 was $624,629. This amount is not reported in the table above as it does not constitute compensation to Mr. Roath for his services as a director.

Director Compensation

Compensation for Non-Employee Directors during 2008 generally consisted of an annual retainer, an additional retainer for acting as the chairperson of one of our Board's committees (other than the Nominating and Corporate Governance Committee) or Lead Director, fees for attending meetings and an annual equity award. Directors are also offered the opportunity to receive all or a portion of their annual retainer and meeting fees on a deferred basis under our Second Amended and Restated Director Deferred Compensation Plan or in the form of shares of our common stock under our Non-Employee Directors Stock-for-Fees Program.

Annual Retainers and Meeting Fees.     The annual retainer for all Non-Employee Directors was $35,000, and the additional annual retainer for the Lead Director was $25,000. In addition, the chairperson for each of

14



the Audit Committee, Compensation Committee and Finance and Risk Management Committee received an additional annual retainer of $25,000, $15,000 and $10,000, respectively. HCP also reimbursed Non-Employee Directors for travel expenses incurred in connection with their duties as directors of HCP.

Non-Employee Directors received a meeting fee of $1,500 for in-person attendance at each meeting of the Board or any of its committees (this fee was $2,500 for in-person attendance of a committee meeting by a committee's chairperson). In addition, when a telephonic meeting lasted longer than 30 minutes, Non-Employee Directors received a meeting fee of $500 for any telephonic meeting of the Board or any of its committees that they attended.

These annual retainer and meeting fee policies will continue in effect for 2009, except the additional annual retainer for the Lead Director and committee chairpersons identified above were each increased by $5,000 ($10,000 in the case of the chairperson of the Finance and Risk Management Committee) and the enhanced meeting fee for committee chairpersons was eliminated.

Annual Equity Awards.     On the date of each annual meeting of stockholders, each Non-Employee Director who is elected at the annual meeting to serve on our Board generally receives an award of restricted stock. In addition, each person who is initially elected or appointed to the Board as a Non-Employee Director on a date other than the date of an annual meeting may receive an award of restricted stock on the date of such initial election or appointment. The number of shares subject to these restricted stock awards is determined by the Board at the time of grant. These restricted stock awards vest ratably over four years from the date of grant and are generally subject to forfeiture if the director's membership on the Board terminates prior to vesting. However, the restricted shares will automatically vest if the director's service terminates due to death, disability, retirement or removal from the Board without cause (which does not include a failure to be nominated or re-elected). The restricted shares may also vest in connection with a change in control of HCP if the award is not assumed by the successor company. Dividends are paid on the directors' restricted shares at the same rate as on all other shares of common stock of HCP.

On April 24, 2008, each of our then-serving Non-Employee Directors (i.e., Mses. Garvey and Martin and Messrs. Fanning, Henry, McKee, Messmer, Rhein, Roath, Rosenberg and Sullivan) was granted 3,000 shares of restricted stock. Each Non-Employee Director's stock award was granted under, and is subject to the terms of, the 2006 Performance Incentive Plan (the "2006 Plan"). The Board of Directors administers the plan as to Non-Employee Director awards and has the ability to interpret and make all required determinations under the plan, subject to plan limits.

In May 2005, we established stock ownership guidelines that require Non-Employee Directors to accumulate over time shares of HCP stock equal in value to the greater of (1) $120,000, or (2) five times the amount of the regular annual cash retainer for directors at that time. As to Non-Employee Directors in office when the guidelines were approved, the guidelines are effective May 15, 2010. As to new Non-Employee Directors, the guidelines are effective on the first May 15 that occurs more than five years after the director first becomes a member of our Board of Directors. Once subject to the guidelines, a director's level of stock ownership will be reviewed each May 15 for as long as the director remains in office.

Director Deferred Compensation Plan.     In January 1996, HCP adopted the Amended and Restated Director Deferred Compensation Plan, as amended and restated in October 2008 (the "Director Deferral Plan"), which permits our Non-Employee Directors to elect to defer their annual retainers and meeting fees. Amounts deferred by a director under the Director Deferral Plan are payable to such director upon: (i) his or her retirement or death, (ii) the occurrence of a substantial hardship, as determined by the Compensation Committee in accordance with applicable law, or (iii) such earlier date as may be designated by the director at the time of election to participate in the plan. In 1997, we terminated our former director retirement plan and all amounts accrued under that plan were transferred into the

15



Director Deferral Plan. Amounts transferred in 1997 by any director from our former director retirement plan are to be paid only after the director's retirement from the Board of Directors.

Each director participating in the Director Deferral Plan may elect to have deferred compensation and transferred accruals credited, wholly or partially, to (i) an interest rate account wherein the deferrals and transferred amounts accrue interest at a rate equal to the prime rate of Bank of New York minus one percent, or (ii) a stock credit account wherein the deferrals and transferred amounts are treated as if invested in HCP common stock with the account increasing for dividends paid, and increasing or decreasing with changes in the price of HCP's common stock.

Non-Employee Director Stock-for-Fees Program.     Under the Non-Employee Director Stock-for-Fees Program, each of our Non-Employee Directors may elect to receive all or a portion of his or her annual retainer and meeting fees in the form of shares of our common stock in lieu of payment in cash. If a director elects to receive fees in the form of stock, the director's election will apply to all fees that would otherwise be paid in cash but for the director's election, commencing with HCP's fiscal quarter after the election is made. Shares will generally be issued to directors who elect to receive stock under the program as soon as practicable after HCP pays a cash dividend to its stockholders following the quarter with respect to which the election was effective, and the number of shares to be issued will be determined by dividing (i) the amount of the fees being exchanged for the right to receive stock, by (ii) the average of the closing prices for a share of our common stock for the period of ten trading days ending with the dividend payment date.

16



SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table sets forth HCP's nominees for election as directors, all of whom are currently directors, and our principal executive officer, principal financial officer and our three other most highly compensated executive officers during fiscal 2008. These three executive officers, our principal executive officer and our principal financial officer are referred to collectively as the "Named Executive Officers." With respect to these individuals, set forth below is information as to the terms in office for our director nominees and the number of shares of our common stock beneficially owned by each of them as of February 20, 2009.

 
 
  Shares Beneficially Owned(1)
 
   
Name
  First Elected
or Appointed

  Number of
Shares

  Number of
Options/ RSUs(2)

  Percent of
Class(3)

 

Directors

                     
 
 

Robert R. Fanning, Jr.

    1985     53,227     30,880   *
 
 

James F. Flaherty III(4)

    2002     675,685 (5)   1,732,644 (6) *
 
 

Christine N. Garvey

    2007     4,500     0   *
 
 

David B. Henry

    2004     17,641     0   *
 
 

Lauralee E. Martin

    2008     3,000     0   *
 
 

Michael D. McKee

    1989     197,000     0   *
 
 

Harold M. Messmer, Jr.

    1985     270,200 (7)   0   *
 
 

Peter L. Rhein

    1985     59,100     0   *
 
 

Kenneth B. Roath

    1986     391,654     0   *
 
 

Richard M. Rosenberg

    2003     18,800     0   *
 
 

Joseph P. Sullivan

    2004     44,720     0   *
 

Named Executive Officers

                     
 
 

Paul F. Gallagher

    n/a     57,380     222,560   *
 
 

Edward J. Henning

    n/a     130,351     235,402   *
 
 

Thomas M. Klaritch

          153,970 (8)   193,465 (9) *
 
 

Mark A. Wallace

    n/a     37,668     175,452   *
 

All director nominees, Named Executive Officers and other executive officers as a group (18 persons)

    n/a     2,241,324     2,752,064   1.9%
 
*
Less than 1%

(1)
Except as otherwise noted below and subject to applicable community property laws, each individual has sole voting and investment power with respect to the shares listed and may, from time to time, hold shares in accounts that have a margin feature. The information in this table under "Number of Shares" includes for each of the named individuals, the following number of shares of unvested restricted stock as to which each individual has sole voting but not investment power: Mr. Fanning, 7,500; Mr. Flaherty, 17,142; Ms. Garvey, 4,125; Mr. Henry, 7,500; Ms. Martin, 3,000; Mr. McKee, 7,500; Mr. Messmer, 7,500; Mr. Rhein, 7,500; Mr. Roath, 7,500; Mr. Rosenberg, 7,500; Mr. Sullivan,

17


(2)
Consists of shares (i) purchasable upon exercise of outstanding stock options that are currently vested or will vest within 60 days following February 20, 2009, and (ii) represented by restricted stock unit awards that will vest within 60 days following February 20, 2009. For Mr. Klaritch, this also includes 50,000 shares issuable upon conversion of non-managing membership units of HCPI/Tennessee, LLC. For more information on HCPI/Tennessee, see the section in this Proxy Statement entitled "Certain Transactions."

(3)
Based on 253,929,042 shares outstanding at February 20, 2009. In addition, for purposes of computing the percentage of shares held by an individual, the number of shares outstanding includes shares purchasable by that individual within 60 days following February 20, 2009 upon exercise of outstanding stock options or vesting of restricted stock units held by such person.

(4)
Mr. Flaherty is our Chairman, Chief Executive Officer and President.

(5)
Includes 2,400 shares held in an irrevocable trust for the benefit of Mr. Flaherty's children and 573 shares held in an IRA by Mr. Flaherty's spouse. Mr. Flaherty disclaims beneficial ownership of these shares. Also includes an additional 225,000 shares held in an irrevocable trust for the benefit of Mr. Flaherty's children.

(6)
Includes 167,680 options held in an irrevocable trust for the benefit of Mr. Flaherty's children. Mr. Flaherty disclaims beneficial ownership of these options.

(7)
Includes (i) 16,000 shares held as custodian for Mr. Messmer's children, and (ii) 115,800 shares held by 4M Partners, L.P. Mr. Messmer is the co-manager (along with his wife) of the limited liability company that is the general partner of 4M Partners. Mr. Messmer disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Also includes an additional 20,000 shares held in an irrevocable trust for the benefit of Mr. Messmer's children.

(8)
Includes 38,600 shares held in an irrevocable trust for the benefit of Mr. Klaritch's children. Mr. Klaritch disclaims beneficial ownership of these shares.

(9)
Includes 40,000 units, convertible on a one-for-one basis to shares of common stock, held in an irrevocable trust for the benefit of Mr. Klaritch's children. Mr. Klaritch disclaims beneficial ownership of these units.

18


EXECUTIVE COMPENSATION

C OMPENSATION D ISCUSSION AND A NALYSIS

This section contains a discussion of the material elements of compensation awarded to, earned by or paid to our principal executive officer, our principal financial officer, and our three other most highly compensated executive officers. These individuals are listed in the Summary Compensation Table on page 29 below and referred to as the "Named Executive Officers" in this Proxy Statement. Mr. Klaritch became an executive officer of HCP on his promotion to the position of Executive Vice President in May 2008. Mr. Wallace resigned from his position as an executive officer of HCP effective March 31, 2009.

Our executive compensation programs are determined and approved by our Compensation Committee. None of the Named Executive Officers are members of the Compensation Committee or otherwise had any role in determining the compensation of other Named Executive Officers, although the Compensation Committee does consider the recommendations of Mr. Flaherty in setting compensation levels for our executive officers other than Mr. Flaherty.

Executive Compensation Program Objectives and Overview

The Compensation Committee conducts an annual review of HCP's executive compensation programs to ensure that:

the program is designed to achieve HCP's goals of promoting financial and operational success by attracting, motivating and facilitating the retention of key employees with outstanding talent and ability; and

the program adequately rewards performance which is tied to creating stockholder value.

The Compensation Committee also considers compensation levels of comparable equity REITs, including those that specialize in healthcare, and other real estate and finance organizations.

HCP's current executive compensation program is based on three components, which are designed to be consistent with our compensation philosophy: (i) base salary; (ii) annual incentive bonuses; and (iii) long-term stock awards, including stock options and awards of restricted stock units that are subject to both performance-based and time-based vesting requirements. HCP also provides supplemental life insurance to Mr. Flaherty pursuant to his employment agreement and, in some cases, provides severance benefits to Named Executive Officers whose employment terminates under certain circumstances. As described below, HCP also granted Mr. Flaherty a time-based restricted stock unit award in 2006 that is intended to provide both a long-term retention incentive and a supplemental retirement benefit.

In structuring executive compensation packages, the Compensation Committee considers how each component promotes retention and/or motivates performance by the executive. Base salaries, personal benefits, and severance and other termination benefits are primarily intended to attract and retain highly qualified executives. These are the elements of our executive compensation program where the value of the benefit in any given year is not dependent on performance (although base salary amounts and benefits determined by reference to base salary may increase from year to year depending on performance, among other things). We believe that in order to attract and retain top executives, we need to provide them with compensation levels that reward their continued service. Some of the elements, such as base salaries and personal benefits, are generally paid out on a short-term or current basis. Other elements, such as benefits provided upon retirement or other termination of employment, are generally paid out on a longer-term basis. We believe this mix of short- and long-term elements allows us to achieve our goals of attracting and retaining top executives.

Annual bonuses are primarily intended to motivate Named Executive Officers to achieve specific strategies and operating objectives, although we also believe it helps us attract and retain top executives. Our long-term equity incentives are primarily intended to align Named Executive Officers' long-term interests

19



with stockholders' long-term interests, although we believe they also play a role in helping us to attract and retain top executives. These are the elements of our executive compensation program that are designed to reward performance and thus the creation of stockholder value. For a given fiscal year, the Compensation Committee makes incentive compensation decisions retrospectively for both annual and long-term incentives after the end of the year, evaluating performance during that year. That is, bonus payments and long-term incentive compensation awards granted in January 2008 and January 2009 were based on an assessment of 2007 and 2008 performance, respectively.

The Compensation Committee believes that performance-based compensation such as annual bonuses and long-term equity incentives play a significant role in aligning management's interests with those of HCP's stockholders. For this reason, these forms of compensation constitute a substantial portion of each of our Named Executive Officers' compensation. For 2008, the Compensation Committee approved executive compensation arrangements for Mr. Flaherty, our Chief Executive Officer, that resulted in approximately 93% of Mr. Flaherty's total direct compensation constituting compensation that is performance-based and/or with a value derived from our stock price, with his base salary constituting the balance of his 2008 total direct compensation. (As used in this discussion, the term "total direct compensation" means the aggregate amount of the executive's base salary, actual annual incentive bonus, and long-term equity incentive awards based on the grant-date fair value of such awards as determined under the accounting principles used in HCP's financial reporting.) With respect to our other Named Executive Officers, the Compensation Committee approved executive compensation arrangements that resulted in 68% to 82% of each executive's total direct compensation being compensation that is performance-based and/or with a value derived from our stock price, with base salary constituting the balance of their 2008 total direct compensation. Our compensation packages are designed to promote teamwork, initiative and resourcefulness by key employees whose performance and responsibilities directly affect our results of operations. The Compensation Committee also periodically reviews our mix of fixed and incentive- based compensation against the compensation practices at comparable equity REITs and other real estate companies with the view that our executive officers' salary levels should be set around the median or at lower levels relative to industry data so that a greater percentage of our executives' compensation may be delivered in the form of incentive compensation opportunities that are based upon HCP performance.

Compensation Consultant; Review of Relevant Compensation Data

The Compensation Committee's practice has been to retain independent compensation consultants to advise it on (1) types of compensation arrangements, (2) compensation practices of certain targeted peer companies deemed representative of the industry, and (3) laws, rules, regulations and tax aspects relevant to the work of the Compensation Committee. Prior to November 2008, the Compensation Committee retained Semler Brossy to provide these advisory services. In November 2008, the Compensation Committee retained FPL Associates to provide these services.

Based on the consultants' recommendations, the Compensation Committee selected the following companies as HCP's peer group in 2008 for compensation purposes.

Alexandria Real Estate Equities, Inc.   Kimco Realty Corporation
AMB Property Corporation   Nationwide Health Properties, Inc.
AvalonBay Communities, Inc.   Public Storage
Boston Properties, Inc.   Regency Centers Corporation
Equity Residential   Simon Property Group, Inc.
Federal Realty Investment Trust   Ventas, Inc.
Health Care REIT, Inc.   Vornado Realty Trust
Healthcare Realty Trust, Inc.   Weingarten Realty Investors
Host Hotels & Resorts, Inc.    

20


The peer companies generally consist of comparable equity REITs, including those that specialize in healthcare, and, since most healthcare REITs do not have substantially comparable market capitalization or business models as HCP, certain other REITs and real estate companies outside of the healthcare area that have market capitalizations that are substantially comparable to HCP. HCP's market capitalization and total capitalization rank near the 75 th  percentile of the peer group. In making its compensation comparisons, the Compensation Committee takes into account HCP's market capitalization compared to the peer companies.

In 2008, the Compensation Committee reviewed compensation data for executives at the peer companies with positions comparable to those held by the Named Executive Officers. This data consisted of base salary, cash bonus and equity award information as well as total direct compensation paid by each of the peer companies as reflected in their proxy statements. Although the Compensation Committee reviewed and discussed the compensation data provided by the consultants to help inform its decision-making process, the Compensation Committee does not set compensation levels at any specific level or percentile against the peer group data (i.e., the Compensation Committee does not "benchmark" HCP's executive compensation levels). As described below, the peer group data is only one point of information taken into account by the Compensation Committee in making compensation decisions.

2008 Performance Overview

The Compensation Committee believes that HCP's corporate performance in 2008 was outstanding in light of the performance of the United States securities and real estate markets generally. Portfolio repositioning, improvement in the dividend to funds from operations payout ratio, property quality, strategic initiatives, capital market activities and asset management were particular areas in which outstanding results were achieved. During 2008, HCP's management team improved the property portfolio, balance sheet and liquidity in a manner that may provide benefits to shareholders for many years to come.

Because of the manner in which management was able to successfully reposition HCP's portfolio, the Compensation Committee awarded executives compensation for 2008 at levels consistent with that awarded for prior years. Significant effort and talent were applied to the consummation of various initiatives that were recognized in the industry as outstanding accomplishments. These accomplishments included:

Achieving in 2008 the highest level of funds from operations, as defined by NAREIT ("FFO"), in HCP's history.

Raising a total of approximately $2.4 billion of proceeds through a combination of $656 million in asset dispositions, $566 million of secured financing, $200 million of unsecured financing and $1 billion of equity offerings.

Significant debt reduction resulting in HCP's having its lowest leverage ratio in over three years.

Selection as a member of the S&P 500 Index, the first healthcare REIT so honored, and ranking as the fifth largest REIT (as measured in equity capitalization) in the U.S. by the end of 2008.

Conducting an active asset management program to generate substantial incremental value from HCP's existing real estate holdings with little or no additional capital outlay.

21


C URRENT E XECUTIVE C OMPENSATION P ROGRAM E LEMENTS

Base Salaries

Salaries for our Named Executive Officers are reviewed by the Compensation Committee on an annual basis. Our Compensation Committee believes that a significant portion of executive officers' compensation should be in the form of incentive compensation that helps to align the interests of our executives with those of our stockholders. Accordingly, and while the Compensation Committee does not specifically establish our executive base salary levels against peer group data alone, our executive officers' salary levels are frequently at the median or at lower levels relative to industry data so that a greater percentage of our executives' compensation may be delivered in the form of incentive compensation.

In setting specific salary levels for each Named Executive Officer and HCP's other executive officers, the Compensation Committee assesses the executive's past performance and expected future contributions to HCP, as well as Mr. Flaherty's recommendations (with respect to executive officers other than himself). As described in the Description of Mr. Flaherty's Employment Agreement—Salary and Bonus Amounts section included later in this Proxy Statement, HCP has entered into an employment agreement with Mr. Flaherty that provides for minimum levels of base salary. HCP does not have such agreements with its other Named Executive Officers. The Compensation Committee believes that the base salary levels of the Named Executive Officers and the other executive officers generally are reasonable in view of competitive practices, HCP's performance and the contribution of those officers to that performance.

For 2008, the Compensation Committee reviewed the base salaries for the Named Executive Officers and, consistent with a company-wide freeze on base salaries generally, determined that the base salary levels for these executives would not be increased, except that Mr. Klaritch's base salary was increased from $275,000 to $350,000 in May 2008 upon his promotion of Executive Vice President to be consistent with the salaries paid generally to executives at that level.

Annual Bonuses

In January 2008, the Compensation Committee adopted the Executive Bonus Program (the "Bonus Program") to provide our executive officers with an annual bonus opportunity for 2008 and future years. The Bonus Program was adopted under our 2006 Plan, which has been approved by our stockholders and includes provisions for a cash bonus feature that is designed to qualify annual bonuses as deductible performance-based compensation under Section 162(m) of the Internal Revenue Code.

Under the Bonus Program, the Compensation Committee selects the executives who will participate in the program at the beginning of each year and establishes a maximum bonus amount for each executive. The Compensation Committee also determines a target amount for HCP's FFO per share (the "FFO Per Share") for the year, with the amount of the executive's bonus to be determined based on HCP's actual FFO Per Share for the year as compared with the target FFO Per Share established by the Committee. If the actual FFO Per Share equals or exceeds the target FFO Per Share, the Bonus Program provides for payment of up to 100% of the executive's maximum bonus amount. If the actual FFO Per Share is less than 68% of the target FFO Per Share, no bonuses would be paid under the Bonus Program. An executive's maximum bonus will be reduced for FFO Per Share results between 68% and 100% of the target FFO Per Share. FFO is derived from HCP's net income but excludes certain items such as depreciation and amortization of real estate assets that may limit the usefulness of net income as a measure of HCP's operating performance. FFO is a widely used measure of operating performance of REITs, and the Compensation Committee believes that it is appropriate to use FFO in determining HCP's performance for purposes of its Bonus Program as well as its equity awards as described below.

In addition, the Bonus Program provides that the Compensation Committee has discretion to reduce the amount of the bonus awarded to any participant in the program. Thus, the Bonus Program is designed to establish each participating executive's maximum annual bonus in a manner that complies with the

22



performance-based compensation requirements of Section 162(m), while still preserving the Compensation Committee's flexibility to determine the actual bonus for each executive up to the maximum bonus amount based on the executive's individual performance and such other factors as the Compensation Committee deems appropriate.

The Compensation Committee established a target FFO Per Share of $2.11 for purposes of the 2008 Bonus Program and established the following maximum bonus amounts under the 2008 Bonus Program for each of the Named Executive Officers:

 
 
Named Executive Officer
  Maximum Bonus Under
2008 Bonus Program

 
   
James F. Flaherty III   $ 2,000,000  
   
Paul F. Gallagher   $ 520,000  
   
Mark A. Wallace   $ 470,000  
   
Edward J. Henning   $ 370,000  
   

Maximum bonus levels are determined by the Compensation Committee taking into account the practices of companies in our compensation peer group (identified above), the executive's position with HCP and total compensation package, the executive's performance of his or her individual responsibilities, the executive's contribution to the success of HCP's financial performance, and a desire that a substantial portion of each executive's annual compensation opportunity should be "at risk" based on individual and HCP performance.

The Compensation Committee determined that HCP's actual FFO Per Share for 2008 exceeded the target FFO Per Share established for the Bonus Program. Based on its general assessment of HCP's performance and each Named Executive Officer's performance and contributions to HCP's successes during fiscal 2008, the Compensation Committee determined that it was appropriate to award each Named Executive Officer the amount reflected in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table presented later in this Proxy Statement.

As noted above, Mr. Klaritch was not an executive officer at the beginning of 2008 and, accordingly, did not participate in the Bonus Program. After consideration of his individual performance in 2008 in light of his increased duties as an executive officer of HCP, as well as HCP's performance as noted above, the Compensation Committee determined that Mr. Klaritch would be awarded a bonus of $275,000 for 2008.

Long-Term Incentive Equity Awards

HCP's policy is that the long-term compensation of its Named Executive Officers and other executive officers should be directly linked to the value provided to stockholders. Therefore, HCP has historically made annual grants of stock options and restricted stock and restricted stock unit awards to provide further incentives to our executives to increase stockholder value. The Compensation Committee bases its award grants to executives each year on a number of factors, including:

In addition, the size, frequency and type of long-term incentive grants may be determined on the basis of tax consequences of the grants to the individual and HCP, accounting impact and potential dilution effects,

23



and a desire that a substantial portion of each executive's annual compensation opportunity should be "at risk" based on individual and HCP performance.

In determining the levels for equity awards granted in 2008, the Compensation Committee took into account HCP's substantial achievements during 2007 as reported in the proxy statement for the 2008 annual meeting of stockholders. While the Compensation Committee does not base equity award levels on the achievement of specific performance metrics, it does consider the performance of HCP during the prior year as well as historical grant levels to inform its decision-making process. The Compensation Committee also considered the recommendations of Mr. Flaherty with respect to equity awards granted to the Named Executive Officers other than himself.

Annual award grants are generally made at the first in-person meeting of the Compensation Committee each year. This meeting is scheduled well in advance and typically held in late January or early February. Other than grants made in connection with the hiring or promotion of employees or other special circumstances, the Compensation Committee generally does not grant equity awards at any other time during the year.

Stock Options.     HCP makes a portion of its long-term incentive grants to Named Executive Officers in the form of stock options with an exercise price that is equal to the closing price of our common stock on the grant date. Thus, the Named Executive Officers will only realize value on their stock options if our stockholders realized value on their shares. The stock options also function as a retention incentive for our executives as they vest ratably over the five-year period after the date of grant.

In January 2008, the Compensation Committee granted stock options to each of our Named Executive Officers. The material terms of these options are described in the Grants of Plan-Based Awards section included later in this Proxy Statement.

The options granted to each of our Named Executive Officers in January 2008 constitute approximately one-third of the officer's total long-term incentive compensation, with the performance-based restricted stock units described below constituting the remaining approximately two-thirds (based on the grant-date fair value of such awards as determined under the accounting principles used in HCP's financial reporting). The Compensation Committee believes this mixture of options and performance units is appropriate and consistent with the practices of the comparable equity REITs and other real estate companies considered by the Compensation Committee.

Performance-Based Restricted Stock Units.     HCP also grants long-term incentive awards to Named Executive Officers in the form of performance-based restricted stock units. These performance units are granted early in the calendar year and become eligible to vest based on HCP's actual performance during that year relative to a performance goal established by the Compensation Committee. Once the performance units become eligible to vest, they vest ratably over the five-year period after the date of grant. Thus, the performance units are designed both to motivate executives to maximize HCP's performance for the year in which the units are granted and to provide a long-term retention incentive for the vesting period with respect to those units that become eligible to vest based on HCP's performance. The performance-based component of the award is also designed to be tax deductible under applicable tax law. See the discussion under "Policy with Respect to Section 162(m)" below.

In January 2008, the Compensation Committee granted performance units to each of our Named Executive Officers. The material terms of these awards are described in the Grants of Plan-Based Awards section included later in this Proxy Statement.

As in prior years, the performance units granted in 2008 became eligible to vest based on HCP's actual "funds from operations per share" during 2008. Funds from operations, or FFO, as defined by NAREIT, is derived from our net income but excludes certain items such as depreciation and amortization of real estate assets that may limit the usefulness of net income as a measure of our operating performance. FFO is a widely used measure of operating performance of REITs, and the Compensation Committee believes

24



that it is appropriate to use FFO in determining HCP's performance for purposes of its equity awards. For purposes of these awards, the Compensation Committee establishes an FFO performance goal and an FFO threshold amount for the year in which the units are granted. If the FFO performance goal is met or exceeded, all of the units subject to the award will become eligible to vest based on the time-based vesting requirements described above. If the FFO threshold amount is not met, all of the units subject to the award will be cancelled. If HCP's actual FFO is less than the performance goal established for that year but greater than the threshold amount, a prorated percentage of the units will become eligible to vest.

For the performance units granted in 2008, the Compensation Committee established as the performance goal an FFO Per Share of $2.11 (the same goal established for purposes of the Bonus Program as described above). The Compensation Committee determined that HCP exceeded this performance goal, and all of the performance units granted to the Named Executive Officers in January 2008 became eligible to vest accordingly.

As in prior years, the Compensation Committee determined in January 2008 to award a portion of Mr. Flaherty's bonus for 2007 in the form of a grant of performance-based restricted stock units rather than cash. These performance units are generally subject to the same terms as described above, except that the units that become eligible to vest based on HCP's performance become fully vested on the third anniversary of the grant date. The Compensation Committee believes that this three-year "cliff" vesting schedule provides an enhanced retention incentive for Mr. Flaherty.

Severance and Other Benefits Upon Termination of Employment

HCP believes that severance protections, particularly in the context of a change in control transaction, can play a valuable role in attracting and retaining key executive officers. Accordingly, HCP provides such protections for each of the Named Executive Officers and certain other executive officers of HCP. In the case of Mr. Flaherty, these benefits are provided under his employment agreement. Our other Named Executive Officers are entitled to participate in our Change in Control Severance Plan (the "CIC Plan"), which provides severance benefits on certain terminations of the executive's employment following a change in control of HCP. The Compensation Committee evaluates the level of severance benefits to provide a participating Named Executive Officer on a case-by-case basis, and in general, HCP considers these severance protections an important part of an executive's compensation and consistent with competitive practices.

As described in more detail in the Potential Payments Upon Termination or Change in Control section included later in this Proxy Statement, under his employment agreement, Mr. Flaherty would be entitled to severance benefits in the event of a termination of employment by HCP without cause or by him for good reason, or due to his death or disability. HCP has determined that it is appropriate to provide Mr. Flaherty with severance benefits under these circumstances in light of his position with HCP and as part of his overall compensation package. The severance benefits for Mr. Flaherty are generally determined as if he continued to remain employed by HCP for two years following his actual termination date. Because we believe that a termination by an executive for good reason (or constructive termination) is conceptually the same as an actual termination by HCP without cause, we believe it is appropriate to provide severance benefits following such a constructive termination of the executive's employment.

HCP believes that the occurrence, or potential occurrence, of a change in control transaction will create uncertainty regarding the continued employment of our executive officers. This uncertainty results from the fact that many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage certain of our executive officers to remain employed with HCP during an important time when their prospects for continued employment following the transaction are often uncertain, we provide Mr. Flaherty and the Named Executive Officers participating in our CIC Plan with severance benefits if the executive's employment is terminated by HCP without cause or by the executive for good reason in connection with a change in control. The severance benefits are generally

25



determined as if the executive had continued to remain employed by HCP for two years (or three years, in the case of Mr. Flaherty) following his actual termination date. As noted above, because we believe that a termination by an executive for good reason is conceptually the same as a termination by HCP without cause, and because we believe that in the context of a change in control, potential acquirors would otherwise have an incentive to constructively terminate the executive's employment to avoid paying severance, we believe it is appropriate to provide severance benefits in these circumstances.

We do not believe that Named Executive Officers should be entitled to receive their cash severance benefits merely because a change in control transaction occurs. The payment of cash severance benefits is only triggered by an actual or constructive termination of employment.

As part of their change in control severance benefits, Mr. Flaherty and each Named Executive Officer who participates in the CIC Plan would generally be reimbursed for the full amount of any excise taxes imposed on his severance payments and any other payments under Section 4999 of the Internal Revenue Code. We provide our executives with a "gross-up" for any parachute payment excise taxes that may be imposed because we determined the appropriate level of change in control severance protections for these executives without factoring in the adverse tax effects on them that may result from these excise taxes. The excise tax gross-up is intended to make the executive whole for any adverse tax consequences he may become subject to under the tax law and to preserve the level of change in control severance protections that we have determined to be appropriate. We believe this protection is a reasonable part of the compensation package for our Named Executive Officers and generally consistent with industry practice.

Retention and Supplemental Retirement Equity Grant for CEO

In 2006, the Compensation Committee determined that it would be appropriate to provide Mr. Flaherty with a supplemental retirement benefit program that would also serve as a long-term retention incentive. To help accomplish this goal, it was determined that any retirement benefit for Mr. Flaherty should accrue over a significant period of time, and that any benefit should also be subject to significant vesting requirements. The Compensation Committee determined that a benefit denominated in shares of HCP's common stock was advisable so that Mr. Flaherty's actual benefit would depend in large part on the long-term performance of HCP's common stock, thus further linking Mr. Flaherty's interests with those of HCP's stockholders.

The vesting schedule for the restricted stock units is intended to reflect that the grant includes both a typical time-based vesting component and a benefit accrual component. Mr. Flaherty is currently age 51. In general, no portion of the restricted stock unit grant is scheduled to vest before Mr. Flaherty attains age 55, and subject to Mr. Flaherty's continued employment with HCP, the restricted stock units will vest in annual installments over the ten-year period following the date on which Mr. Flaherty attains age 55. The grant is also intended to provide a retirement benefit that accrues for each year of Mr. Flaherty's service with HCP for the period commencing with Mr. Flaherty's hiring in 2002 and continuing through his attainment of age 65. Accordingly, the percentage of the restricted stock units that vests each year varies because of the effect of the benefit accrual component on the vesting schedule. Mr. Flaherty will not be entitled to any benefit with respect to the restricted stock units if he voluntarily terminates employment before attaining age 55. As described under the Potential Payments upon a Termination or Change in Control section included later in this Proxy Statement, the restricted stock units are subject to severance protections for Mr. Flaherty similar to those included in his employment agreement.

Amendments to Benefit Plans in 2008

In 2008, HCP amended Mr. Flaherty's employment agreement, the award agreement for Mr. Flaherty's supplemental retirement grant described above, the CIC Plan and certain other equity award agreements that included deferred compensation arrangements to comply with the IRS's deferred compensation rules

26



under Section 409A of the Internal Revenue Code. These amendments did not increase the intended benefits to participants under these plans.

Subsequent Compensation Actions

In January 2009, the Compensation Committee approved changes to the structure of HCP's performance restricted stock unit awards. Effective for grants made in 2009, dividend equivalents that would otherwise be paid during the applicable performance period under these awards will instead accrue and be paid at the end of the performance period only if the related performance goals for the award are satisfied.

Stock Ownership Program

In January 2003, our Compensation Committee adopted a stock ownership program pursuant to which each member of HCP's senior leadership team must own specified dollar amounts of HCP common stock, generally based on the individual's salary. In October 2008, the Compensation Committee modified the program so that it applies to executives at the level of executive vice president or higher and includes an executive's common stock, unvested stock awards and any non-managing member interests ("DownREIT units") held by the executive in limited liability companies in which HCP is the managing member (collectively, "HCP eligible securities") in determining the executive's stock ownership for purposes of the program. Under the program, each of the Chairman, Chief Executive Officer and President is required to own HCP eligible securities with a value equal to at least five times his base salary. Each of the other executive officers is required to own HCP eligible securities with a value equal to at least three times his or her base salary. All executives must achieve their mandatory holdings within five years of the adoption of the program or, as to newly-hired or promoted executives, within five years of becoming subject to the program. Each of the Named Executive Officers has achieved the mandatory holdings within the requisite five-year period.

Policy with Respect to Section 162(m)

Section 162(m) of the Internal Revenue Code generally disallows public companies a tax deduction for compensation in excess of $1,000,000 paid to their chief executive officers and certain of their other executive officers unless certain performance and other requirements are met. Our intent generally is to design and administer executive compensation programs in a manner that will preserve the deductibility of compensation paid to our executive officers, and we believe that a substantial portion of our current executive compensation program (including the stock options and performance-based restricted stock units granted to our Named Executive Officers as described above) satisfies the requirements for exemption from the $1,000,000 deduction limitation. However, we reserve the right to design programs that recognize a full range of performance criteria important to our success, even where the compensation paid under such programs may not be deductible. The Compensation Committee will continue to monitor the tax and other consequences of our executive compensation program as part of its primary objective of ensuring that compensation paid to our executive officers is reasonable, performance-based and consistent with the goals of HCP and its stockholders.

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C OMPENSATION C OMMITTEE R EPORT ON E XECUTIVE C OMPENSATION

The Compensation Committee has certain duties and powers as described in its charter. The Compensation Committee is currently composed of the four directors named at the end of this report, each of whom is independent as defined by the New York Stock Exchange listing standards.

The Compensation Committee has reviewed and discussed with management the disclosures contained in the Compensation Discussion and Analysis section of this Proxy Statement. Based upon this review and discussion, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis section be included in this Proxy Statement.


Compensation Committee of the Board of Directors

    Michael D. McKee (Chairman)
David B. Henry
Harold M. Messmer, Jr.
Peter L. Rhein
   

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Exchange Act that refer to future filings for additional information, including specifically to this Proxy Statement, in whole or in part, the above report by the Compensation Committee shall not be considered to be incorporated into, or a part of, any such filings.

C OMPENSATION C OMMITTEE I NTERLOCKS AND I NSIDER P ARTICIPATION

The Compensation Committee members whose names appear on the Compensation Committee Report above were committee members during all of 2008, except that Messrs. Henry and Rhein became members of the Compensation Committee in April 2008. Prior to her resignation as a director in April 2008, Ms. Cirillo-Goldberg served as a member of the Compensation Committee during fiscal 2008. No one who served on the Compensation Committee at any time during 2008 is or has been an executive officer of HCP or had any relationships requiring disclosure by HCP under the SEC's rules requiring disclosure of certain relationships and related-party transactions. None of our executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director or member of the Compensation Committee during the fiscal year ended December 31, 2008.

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S UMMARY C OMPENSATION T ABLE - 2006—2008

The following table presents information regarding compensation of our principal executive officer, our principal financial officer and our three other most highly compensated executive officers for services rendered during 2008, 2007 and 2006. These individuals are referred to as "Named Executive Officers" in this Proxy Statement.

 
 
Name and Principal Position(s)
  Year
  Salary
($)

  Bonus
($)(1)

  Stock
Awards
($)(2)

  Option
Awards
($)(2)

  Non-Equity
Incentive
Plan
Compensation
($)(1)

  Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings

  All Other
Compensation
($)(3)

  Total
($)

 

(a)


 

(b)


 

(c)


 

(d)


 

(e)


 

(f)


 

(g)


 

(h)


 

(i)


 

(j)


 

 
 
James F. Flaherty III     2008     600,000     0     5,449,191     1,191,733     2,000,000     0     11,002     9,251,926  

Chairman, Chief Executive

    2007     600,000     2,000,000 (4)   4,891,882 (4)   804,701     0     0     11,588     8,308,171  

Officer and President

    2006     575,000     0 (4)   3,078,034 (4)   621,823     0     0     49,592     4,324,449  
   
Mark A. Wallace     2008     350,000     0     479,283     181,565     370,000     0     9,752     1,390,600  

Executive Vice President—

    2007     350,000     470,000     348,664     115,026     0     0     10,338     1,294,028  

Chief Financial Officer and Treasurer(5)

    2006     275,000     565,000     242,615     68,190     0     0     9,268     1,160,073  
   
Paul F. Gallagher     2008     350,000     0     617,979     216,119     520,000     0     9,560     1,713,658  

Executive Vice President—

    2007     350,000     520,000     513,558     139,143     0     0     10,338     1,533,039  

Chief Investment Officer

    2006     330,000     600,000     384,172     82,036     0     0     9,268     1,405,476  
   
Edward J. Henning     2008     350,000     0     385,616     170,579     370,000     0     10,232     1,286,427  

Executive Vice President—

    2007     350,000     370,000     291,410     122,461     0     0     10,338     1,144,209  

General Counsel, Chief Administrative Officer and Corporate Secretary(6)

                                                       
   
Thomas M. Klaritch     2008     325,000     275,000     365,820     83,311     0     0     9,752     1,058,883  

Executive Vice President—Medical Office Properties(7)

                                                       
   
(1)
As described in the Compensation Discussion and Analysis section above, each of the Named Executive Officers (other than Mr. Klaritch) received an annual incentive bonus for 2008 under our Executive Bonus Program in the amount reported in Column (g) of the table above.

(2)
The amounts reported in Columns (e) and (f) of the table above reflect the aggregate dollar amounts recognized for stock awards and option awards, respectively, for financial statement reporting purposes with respect to 2008 (disregarding any estimate of forfeitures related to service-based vesting conditions). No stock awards or option awards granted to Named Executive Officers were forfeited during 2008. For a discussion of the assumptions and methodologies used to value the awards reported in Column (e) and Column (f), please see the discussion of stock awards and option awards contained in Note 21—Compensation Plans to the Company's Consolidated Financial Statements, included as part of the Company's 2008 Annual Report on Form 10-K, filed with the SEC and incorporated herein by reference. For information about the stock awards and option awards granted to our Named Executive Officers for 2008, please see the discussion under the Grants of Plan-Based Awards table below.
   

The grants for which HCP recorded financial statement expense in 2008, and which were taken into account in determining the amounts reflected for 2008 in Columns (e) and (f) above, include grants dating back to as early as 2002. From 2002 through the end of 2008, HCP's stock price generally traded at values greater than the current price. Stock price at the time of grant is a key variable in determining the financial statement expense of these grants. However, while the value of these grants to the executives who hold them is dependent on stock price at the time of exercise or payment, for financial statement reporting purposes the expense recorded generally is not affected by stock price fluctuations after the date of grant. The exercise prices of the outstanding and unvested HCP stock options held by our Named Executive Officers at December 31, 2008 ranged from $23.59 to $39.72, with a weighted average exercise price of $30.81. HCP's stock price on the date of grant of the other unvested stock awards held by our Named Executive Officers at December 31, 2008 ranged from $20.62 to $39.72, with a weighted average grant date stock price as to these awards of $31.19. Thus, the values reflected in Columns (e) and (f) above do not reflect whether the recipient has actually realized a financial benefit from the awards (such as by exercising stock options or vesting in stock unit awards) and, for the most part, do not reflect the current economic value of the outstanding awards.

(3)
These amounts represent HCP's contributions to each individual's account under our 401(k) plan and term life insurance policy. HCP is not the beneficiary of the life insurance policies, and the premiums that HCP pays are taxable as income to the applicable officer. This insurance is not split-dollar life insurance. The 2008 401(k) matching contribution made with respect to each named executive officer was $9,200. The 2008 life insurance policy contribution made with respect to each Named Executive Officer was $552, except that the contribution for Mr. Gallagher was $360 and the contribution for Mr. Henning was $1,032. In addition to these amounts, Mr. Flaherty's total includes $1,250 for premiums paid by HCP on a supplemental life insurance policy for Mr. Flaherty.

(4)
With respect to his 2007 bonus, Mr. Flaherty received $2 million in cash and a grant of 45,160 performance-based restricted stock units in January 2008. This grant of performance units is described in the Grants of Plan-Based Awards table below and the accompanying narrative. With respect to his 2006 bonus, Mr. Flaherty received a grant of 113,200 performance-based restricted stock units in January 2007. No portion of his 2006 bonus was paid in cash.

(5)
Mr. Wallace resigned as HCP's Executive Vice President, Chief Financial Officer and Treasurer effective March 31, 2009.

(6)
Mr. Henning was not a Named Executive Officer during 2006.

(7)
Mr. Klaritch was not a Named Executive Officer during 2006 or 2007.

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C OMPENSATION OF N AMED E XECUTIVE O FFICERS

The Summary Compensation Table above quantifies the value of the different forms of compensation earned by or awarded to our Named Executive Officers for 2008. The primary elements of each Named Executive Officer's total compensation reported in the table are base salary, an annual bonus, and long-term equity incentives consisting of nonqualified stock options and performance-based restricted stock units. Named Executive Officers also earned the other benefits listed in Column (i) of the Summary Compensation Table, as further described in footnote (3) to the table.

The Summary Compensation Table should be read in conjunction with the tables and narrative descriptions that follow. A description of the material terms of each Named Executive Officer's base salary and annual bonus is provided immediately following this paragraph. The Grants of Plan-Based Awards table and the accompanying description of the material terms of the stock options and stock unit awards granted in 2008, provides information regarding the long-term equity incentives awarded to Named Executive Officers in 2008. The Outstanding Equity Awards at December 31, 2008 and Option Exercises and Stock Vested tables provide further information on the Named Executive Officers' potential realizable value and actual value realized with respect to their equity awards.

Description of Mr. Flaherty's Employment Agreement—Salary and Bonus Amounts

We have entered into an employment agreement with Mr. Flaherty. We do not have employment agreements with our other Named Executive Officers.

The term of Mr. Flaherty's agreement is for three years, with automatic one-year extensions each year unless either party provides notice that the agreement will not be extended. The agreement provides that the Compensation Committee will review Mr. Flaherty's base salary each year and has discretion to increase (but not reduce) his base salary level. The agreement also provides for Mr. Flaherty's target annual bonus to be set at 200% of his base salary, with the Compensation Committee to determine Mr. Flaherty's actual bonus amount each year. In making its determination with respect to salary and bonus levels, the Compensation Committee considers the factors discussed under the heading "Current Executive Compensation Program Elements" of the Compensation Discussion and Analysis above. The agreement also provides for Mr. Flaherty to participate in HCP's usual benefit programs for senior executives, term life insurance provided by HCP in the aggregate amount of $2,000,000 payable to Mr. Flaherty's beneficiaries and reimbursement of business expenses. Provisions of Mr. Flaherty's agreement relating to outstanding equity incentive awards and post-termination of employment benefits are discussed below under the applicable sections of this Proxy Statement.

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G RANTS OF P LAN- B ASED A WARDS D URING 2008

The following table presents information regarding the incentive awards granted to the Named Executive Officers during 2008.

 
 
 
   
   
   
   
   
   
   
  All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
#

  All Other
Options
Awards:
Number of
Securities
Underlying
Options
#

   
   
 
 
   
  Estimated Future Payments Under Non-Equity Incentive Plan Awards
  Estimated Future Payments Under Equity Incentive Plan Awards
  Exercise
or Base
Price of
Option
Awards
($/Sh)

  Grant Date
Fair Value
of Stock
and Option
Awards
($)(1)

 
 
   
 
 
 
Name
  Grant
Date

  Threshold
($)

  Target
($)

  Maximum
($)

  Threshold
(#)

  Target
(#)

  Maximum
(#)

 

(a)


 

(b)


 

(c)


 

(d)


 

(e)


 

(f)


 

(g)


 

(h)


 

(i)


 

(j)


 

(k)


 

(l)


 

 
 

James F. Flaherty III

    N/A             2,000,000                              

    1/25/08                                 747,460     31.95     2,175,109  

    1/25/08                     86,940                     2,777,733  

    1/25/08 (2)                   45,160                     1,442,862  
   

Mark A. Wallace

    N/A             470,000                              

    1/25/08                                 116,270     31.95     338,346  

    1/25/08                     20,550                     656,573  
   

Paul F. Gallagher

    N/A             520,000                              

    1/25/08                                 134,070     31.95     390,144  

    1/25/08                     23,690                     756,896  
   

Edward J. Henning

    N/A             370,000                              

    1/25/08                                 92,540     31.95     269,291  

    1/25/08                     16,350                     522,383  
   

Thomas M. Klaritch

    N/A                                            

    1/25/08                                 47,925     31.95     139,462  

    1/25/08                     10,640                     339,948  
   
(1)
The amounts reported in column (l) of the table reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of our consolidated financial statements. For the assumptions and methodologies used to value the awards reported in Column (l), see footnote (2) to the Summary Compensation Table above.

(2)
See footnote (4) to the Summary Compensation Table above.

D ESCRIPTION OF P LAN- B ASED A WARDS

Non-Equity Incentive Plan Awards

The material terms of the non-equity incentive plan awards reported in the above table are described in the Compensation Discussion and Analysis section above under the heading "Current Executive Compensation Program Elements—Annual Bonuses."

Equity Incentive Plan Awards

Each of the equity incentive awards reported in the above table was granted under, and is subject to, the terms of the 2006 Plan. The 2006 Plan is administered by the Compensation Committee. The Compensation Committee has authority to interpret the plan provisions and make all required determinations under the plan. Awards granted under the plan are generally only transferable to a beneficiary of a Named Executive Officer upon his death or, in certain cases, to family members for tax or estate planning purposes. However, the Compensation Committee may establish procedures for the transfer of awards to other persons or entities, provided that such transfers comply with applicable securities laws and, with limited exceptions set forth in the plan document, are not made for value.

Under the terms of the 2006 Plan, if there is a change in control of HCP, each Named Executive Officer's outstanding awards granted under the plan will generally become fully vested and, in the case of options, exercisable, unless the Compensation Committee provides for the substitution, assumption, exchange or

31



other continuation of the outstanding awards. Any options that become vested in connection with a change in control generally must be exercised prior to the change in control, or they will be cancelled in exchange for the right to receive a cash payment in connection with the change in control transaction.

In addition, each Named Executive Officer may be entitled to accelerated vesting of his outstanding equity-based awards upon certain terminations of his employment with HCP and/or a change in control of HCP. The terms of this accelerated vesting are described in this section and in the Potential Payments upon Termination or Change in Control section below.

Options.     Each option reported in Column (j) of the table above was granted with a per-share exercise price equal to the fair market value of a share of our common stock on the grant date. For these purposes, and in accordance with our 2006 Plan and our option grant practices, the fair market value is equal to the closing price of a share of our common stock on the applicable grant date.

Each option granted to our Named Executive Officers in 2008 is subject to a five-year vesting schedule, with 20% of the option vesting on each of the first five anniversaries of the grant date. If a Named Executive Officer's employment is terminated as a result of the officer's death, disability or retirement, his option will immediately vest and become exercisable. If the Named Executive Officer's employment terminates for any other reason, the unvested portion of his option will immediately terminate. Once vested, each option will generally remain exercisable until its normal expiration date. Each of the options granted to our Named Executive Officers in 2008 has a term of ten years. However, vested options may terminate earlier in connection with a change in control transaction or a termination of the Named Executive Officer's employment. Subject to any accelerated vesting that may apply in the circumstances, the unvested portion of the option will immediately terminate upon a termination of the Named Executive Officer's employment. The Named Executive Officer will generally have three months to exercise the vested portion of the option following a voluntary termination of his employment (other than upon retirement) or a termination by us for cause. This period is extended to eight months if the termination is by us without cause and to three years if the termination was a result of the Named Executive Officer's death, disability or retirement (with a possible extension of up to one year if the Named Executive Officer dies or becomes disabled during the three-year period following retirement).

The options granted to Named Executive Officers during 2008 do not include any dividend rights.

Performance-Based Restricted Stock Units.     Column (g) of the table above reports awards of performance-based restricted stock units ("performance units") granted to our Named Executive Officers for 2008. Each performance unit represents a contractual right to receive one share of our common stock if the performance-based and time-based vesting requirements described below are satisfied.

The performance units become eligible to vest based on FFO Per Share for the applicable one-year performance period. For these purposes, our FFO is determined by the Compensation Committee under rules prescribed by NAREIT, before taking into account any non-recurring charges incurred by us for material strategic or financing transactions approved by our Board of Directors and impairments. The performance period is the calendar year for which the award is granted. If the FFO goal established by the Compensation Committee for the performance period is met, all of the performance units will be eligible to vest. If the FFO goal is not met, a portion of the performance units may become eligible to vest as determined on a sliding scale based on actual FFO performance relative to the goal. Any performance units that do not become eligible to vest based on actual FFO performance during the performance period will be cancelled and automatically terminate as of the end of the performance period.

In general, if the Named Executive Officer's employment terminates during the performance period for any reason other than death, disability or retirement, the performance units will immediately terminate. If the Named Executive Officer's employment terminates due to death or disability during the performance period, the performance units will become fully vested regardless of HCP's actual FFO performance. If the Named Executive Officer's employment terminates due to retirement during the performance period, the

32



number of performance units eligible to vest based on actual FFO performance will be determined at the end of the performance period and will become fully vested as of that time. If there is a change in control of HCP during the performance period, the number of performance units eligible to vest based on actual FFO performance will be determined at the end of the performance period and, unless the award is assumed by the successor entity, will become fully vested as of that time.

Performance units that become eligible to vest based on actual FFO performance during the performance period will generally vest at a rate of 20% per year during the five-year period after the grant date, except that the performance units granted to Mr. Flaherty with respect to his bonus for 2007 (referred to in footnote (2) to the table) that become eligible to vest will become fully vested on the third anniversary of the grant date. If the Named Executive Officer's employment terminates for any reason other than death, disability or retirement after the performance period, any performance units that have not previously vested will terminate. If the Named Executive Officer's employment terminates due to retirement, death or disability after the performance period, any performance units that became eligible to vest based on actual FFO performance will become fully vested as of the termination date. If there is a change in control of HCP after the performance period and the award is not assumed by the successor entity, any performance units that became eligible to vest based on actual FFO performance will become fully vested as of the date of the change in control.

Vested performance units are payable in an equal number of shares of our common stock. Payment will generally be made as the units become vested although the Named Executive Officer may elect to have the units paid on a deferred basis. The Named Executive Officer does not have the right to vote or dispose of the performance units, but does have the right to receive cash payments as dividend equivalents based on the amount of dividends (if any) paid by HCP during the term of the award on a number of shares equal to the number of outstanding and unpaid performance units then subject to the award. Such payments are made at the same time the related dividends are paid to our stockholders generally. As noted in the Compensation Discussion and Analysis above, effective for grants made in 2009, dividend equivalents that would otherwise be paid during the applicable performance period under these awards will instead accrue and be paid at the end of the performance period only if the related performance goals for the award are satisfied.

The performance period for each performance unit award listed in the table above was the 2008 calendar year. The Compensation Committee has determined that HCP's actual FFO performance met the FFO goal for 2008. Accordingly, 100% of the performance units subject to these awards became eligible to vest as of December 31, 2008.

33


O UTSTANDING E QUITY A WARDS AT D ECEMBER 31, 2008

The following tables present information regarding the outstanding equity awards held by each of our Named Executive Officers as of December 31, 2008, including the vesting dates for the portions of these awards that had not vested as of that date.

 
 
 
   
  Option Awards
  Stock Awards
 
 
 
 
 
Name
(a)

  Award
Grant
Date
(b)

  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(c)

  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(d)

  Option
Exercise
Price
($)
(e)

  Option
Expiration
Date
(f)

  Number
of Shares
or Units
of Stock
That
Have Not
Vested
(#)
(g)

  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)(1)
(h)

  Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
(#)
(i)

  Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)
(j)

 

 
 

James F. Flaherty III

    10/8/02                     17,142 (2)   476,033          

    5/7/03     300,000     0     19.14     5/7/13                  

    3/15/04     400,000     100,000 (3)   27.52     3/15/14     6,400 (3)   177,728          

    1/28/05     288,252     192,168 (4)   25.52     1/28/15     23,060 (4)   640,376          

    10/26/05                     23,400 (5)   649,818          

    2/3/06     216,896     325,344 (6)   27.11     2/3/16     26,100 (6)   724,797          

    2/3/06                     57,230 (7)   1,589,277          

    8/14/06                     250,877 (8)   6,966,854          

    1/26/07     33,536     134,144 (9)   39.72     1/26/17     39,616 (9)   1,100,136          

    1/26/07                     113,200 (10)   3,143,564          

    1/25/08     0     747,460 (11)   31.95     1/25/18     86,940 (11)   2,414,324          

    1/25/08                     45,160 (12)   1,254,093          
   

Mark A. Wallace

    3/15/04                     4,000 (3)   111,080          

    5/5/04     32,000     8,000 (13)   23.59     5/5/14                  

    1/28/05     51,150     34,100 (4)   25.52     1/28/15     6,364 (4)   176,728          

    2/3/06     22,308     33,462 (6)   27.11     2/3/16     6,264 (6)   173,951          

    1/26/07     9,268     37,072 (9)   39.72     1/26/17     10,952 (9)   304,137          

    1/25/08     0     116,270 (11)   31.95     1/25/18     20,550 (11)   570,674          
   

Paul F. Gallagher

    3/15/04     46,544     11,636 (3)   27.52     3/15/14     1,744 (3)   48,431          

    1/28/05     53,082     35,388 (4)   25.52     1/28/15     6,604 (4)   183,393          

    2/3/06     28,342     42,486 (6)   27.11     2/3/16     7,950 (6)   220,772          

    1/26/07     11,280     45,120 (9)   39.72     1/26/17     13,328 (9)   370,119          

    1/25/08     0     134,070 (11)   31.95     1/25/18     23,690 (11)   657,871          
   

Edward J. Henning

    1/31/03     40,000     0     18.42     1/31/13                  

    3/15/04     46,544     11,636 (3)   27.52     3/15/14     1,744 (3)   48,431          

    1/28/05     51,150     34,100 (4)   25.52     1/28/15     6,364 (4)   176,728          

    2/3/06     21,212     31,818 (6)   27.11     2/3/16     5,958 (6)   165,454          

    1/26/07     8,476     33,904 (9)   39.72     1/26/17     10,016 (9)   278,144          

    1/25/08     0     92,540 (11)   31.95     1/25/18     16,350 (11)   454,040          
   

Thomas M. Klaritch

    10/2/03     50,000     0     23.50     10/2/13                  

    3/15/04     11,632     2,908 (3)   27.52     3/15/14     436 (3)   12,108          

    1/28/05                     6,392 (4)   177,506          

    2/3/06     12,684     19,026 (6)   27.11     2/3/16     3,564 (6)   98,972          

    1/26/07     4,940     19,760 (9)   39.72     1/26/17     5,832 (9)   161,955          

    1/25/08     0     47,925 (11)   31.95     1/25/18     10,640 (11)   295,473          
   
(1)
The dollar amounts shown in column (h) are determined by multiplying the number of shares or units reported in column (g) by $27.77 (the closing price of our common stock on the last trading day of fiscal 2008).

(2)
The unvested portion of this award was scheduled to vest in one installment on October 8, 2009.

(3)
The unvested portions of these awards were scheduled to vest in one installment on March 15, 2009.

34


(4)
The unvested portions of these awards were scheduled to vest in two installment on January 28, 2009 and January 28, 2010.

(5)
The unvested portion of this award was scheduled to vest in two installments on October 26, 2009 and October 26, 2010.

(6)
The unvested portions of these awards were scheduled to vest in three installments on February 3, 2009, February 3, 2010 and February 3, 2011.

(7)
The unvested portion of this award was scheduled to vest in one installment on February 3, 2009.

(8)
The unvested portion of this award was scheduled to vest in eleven annual installments commencing on Mr. Flaherty's attaining age 55 and ending on Mr. Flaherty's attaining age 65. Mr. Flaherty is currently age 51.

(9)
The unvested portions of these awards were scheduled to vest in four installments on January 26, 2009, January 26, 2010, January 26, 2011 and January 26, 2012.

(10)
The unvested portion of this award was scheduled to vest in one installment on January 26, 2010.

(11)
The unvested portions of these awards were scheduled to vest in five installments on January 25, 2009, January 25, 2010, January 25, 2011, January 25, 2012 and January 25, 2013.

(12)
The unvested portion of this award was scheduled to vest in one installment on January 25, 2011.

(13)
The unvested portion of this award was scheduled to vest in one installment on May 5, 2009.

O PTION E XERCISES AND S TOCK V ESTED D URING 2008

The following table presents information regarding the exercise of stock options by Named Executive Officers during 2008, and on the vesting of other stock awards during 2008 that were previously granted to the Named Executive Officers.

 
 
 
  Option Awards
  Stock Awards
 
 
 
 
 
Name
  Number of Shares
Acquired on
Exercise
(#)

  Value Realized
on Exercise
($)

  Number of Shares
Acquired on
Vesting
(#)

  Value Realized
on Vesting
($)(1)

 

(a)


 

(b)


 

(c)


 

(d)


 

(e)


 

 
 

James F. Flaherty III

    0     0     124,998     3,927,852  
   

Mark A. Wallace

    0     0     12,008 (2)   373,653  
   

Paul F. Gallagher

    0     0     19,028     660,978  
   

Edward J. Henning

    379,500     7,096,197     10,256     326,648  
   

Thomas M. Klaritch

    0     0     12,978     455,055  
   
(1)
The dollar amounts shown in Column (c) above for option awards are determined by multiplying (i) the number of shares of our common stock to which the exercise of the option related, by (ii) the difference between the per-share closing price of our common stock on the date of exercise and the exercise price of the options. The dollar amounts shown in Column (e) above for stock awards are determined by multiplying the number of shares or units, as applicable, that vested by the per-share closing price of our common stock on the vesting date.

(2)
Mr. Wallace elected to defer to a subsequent year the distribution of 8,008 shares subject to restricted stock units that vested during 2008, as permitted under the terms of his award.

35


P OTENTIAL P AYMENTS UPON A T ERMINATION OR C HANGE IN C ONTROL

The following section describes the benefits that may become payable to certain Named Executive Officers in connection with a termination of their employment with HCP and/or a change in control of HCP. In addition to the benefits described below, outstanding equity-based awards held by our Named Executive Officers may also be subject to accelerated vesting in connection with a change in control of HCP under the terms of our 2000 Stock Incentive Plan (the "2000 Plan") and 2006 Plan.

James F. Flaherty III

Mr. Flaherty's employment agreement, described above under the heading "Description of Mr. Flaherty's Employment Agreement—Salary and Bonus Amounts," provides for certain benefits to be paid to Mr. Flaherty in connection with a termination of his employment with HCP under the circumstances described below.

Severance Benefits—Termination of Employment.     In the event Mr. Flaherty's employment is terminated during the employment term either by HCP pursuant to a "Termination Other Than For Cause" or by Mr. Flaherty pursuant to a "Termination For Good Reason" (as those terms are defined in his employment agreement), Mr. Flaherty will be entitled to severance pay that includes (1) a lump sum cash payment equal to two times the sum of (a) Mr. Flaherty's base salary (at the greater of the highest annualized rate in effect in the year preceding the termination date or the year in which the termination date occurs), plus (b) the greater of Mr. Flaherty's target bonus for the year in which the termination occurs or the highest annual bonus he received in any of the preceding three years; (2) a pro-rata portion of Mr. Flaherty's target bonus for the year of the termination; and (3) continued medical, dental and vision benefits for Mr. Flaherty and his family members and continued payment by HCP of the premiums for Mr. Flaherty's term life insurance for two years after the termination. In addition, Mr. Flaherty's equity-based awards (other than performance-based awards) will generally become fully vested, to the extent then outstanding and not otherwise vested, in connection with such a termination of employment, and any stock options granted on or after the date of the employment agreement that are so accelerated will remain exercisable until the later of three years after the date Mr. Flaherty's employment terminates or the date specified in the applicable plan or award agreement (but in no event later than the expiration date of the option). Any of Mr. Flaherty's equity-based awards that are then outstanding and subject to performance-based vesting requirements will continue in accordance with their terms with respect to the performance requirements, although such awards will become fully vested with respect to any time-based vesting requirements.

Severance Benefits—Termination of Employment in Connection with a Change in Control.     In the event Mr. Flaherty's employment is terminated during the employment term pursuant to a "Termination Upon a Change in Control" (as defined in his employment agreement), Mr. Flaherty will be entitled to the severance benefits described above except that the severance multiplier to determine the amount of Mr. Flaherty's lump sum cash payment will be three, and the period of continued medical, dental and vision benefits for Mr. Flaherty and his family members and continued payment of Mr. Flaherty's term life insurance premiums will be three years. In addition, Mr. Flaherty will become fully vested in his accrued benefits under HCP's retirement arrangements (or be entitled to a cash payment equal to the value of such accelerated vesting) and will be entitled to payment of an amount equal to the present value of the matching contributions HCP would have made to Mr. Flaherty's account under HCP's 401(k) plan had Mr. Flaherty remained employed by HCP for the three years after the date his employment terminated and made the maximum elected deferral contributions permitted under the 401(k) plan. In the event that Mr. Flaherty's benefits are subject to the excise tax imposed under Section 280G of the U.S. Internal Revenue Code of 1986 ("Section 280G"), HCP will make an additional payment to him so that the net amount of such payment (after taxes) he receives is sufficient to pay the excise tax due (a "gross-up payment").

36


Severance Benefits—Death or Disability.     In the event Mr. Flaherty's employment is terminated during the employment term due to his death or disability (as defined in his employment agreement), Mr. Flaherty will be entitled to a pro-rata portion of his target bonus for the year of the termination, the accelerated vesting of equity-based awards and post-termination exercise period for options described above and continued medical, dental and vision benefits for Mr. Flaherty and his family members for one year after termination.

Retention and Supplemental Retirement Grant.     In addition, the restricted stock units granted to Mr. Flaherty on August 14, 2006 described in the Compensation Discussion and Analysis section above are subject to partial acceleration if Mr. Flaherty's employment is terminated by HCP without cause, by Mr. Flaherty for good reason, due to Mr. Flaherty's death or disability, or in certain other circumstances. The percentage of the restricted stock units that will vest varies depending on Mr. Flaherty's age at the time his employment terminates and whether the termination occurs within the two-year period following a change in control of HCP. In all events, Mr. Flaherty will vest in 100% of the restricted stock units only if he remains employed with HCP through age 65.

Restrictive Covenants.     Pursuant to Mr. Flaherty's employment agreement, he has agreed not to disclose any confidential information of HCP at any time during or after his employment with HCP. In addition, Mr. Flaherty has agreed that, for a period of one year following a termination of his employment with HCP, he will not solicit HCP's employees or customers or materially interfere with any of HCP's business relationships.

Other Named Executive Officers

CIC Plan.     Each of the Named Executive Officers (other than Mr. Flaherty) participates in the CIC Plan. For each of the Named Executive Officers participating in the CIC Plan, the "severance multiplier" referred to in the following description of the CIC Plan benefits is two.

Under the CIC Plan, if a change in control of HCP occurs during the term of the CIC Plan and a participant's employment with HCP is terminated by HCP without cause or by the participant for good reason within the two year period following the change in control, the participant will generally be entitled to receive the following benefits: (1) a cash lump sum payment equal to the participant's "severance multiplier" times the sum of (i) the participant's base salary plus (ii) the greater of one-third of the participant's base salary or the participant's average annual bonus for the preceding three years (based only on complete fiscal years in which the participant was employed); (2) a lump sum cash payment equal to the expected cost of COBRA premiums for medical coverage for the number of years represented by the "severance multiplier"; (3) if not then fully-vested, full vesting in the participant's benefits under HCP's non-qualified retirement plans plus a lump sum cash payment equal to the participant's then unvested benefits under HCP's 401(k) plan; and (4) a lump sum cash payment equal to the participant's prorated annual bonus amount for the year of termination (with the "annual bonus amount" being determined as described in clause (1)(ii) above). (For these purposes, the terms "cause," "good reason" and "change in control" are each defined in the CIC Plan.) In addition, the participant's equity-based awards (other than performance-based awards), to the extent then outstanding and not otherwise vested, will generally become fully vested, and the participant's outstanding stock options will generally remain exercisable for one year after the date of termination of the participant's employment (but in no event later than the expiration date of the option). The participant's equity-based awards that are then outstanding and subject to performance-based vesting requirements will continue in accordance with their terms with respect to the performance requirements, although such awards will become fully vested with respect to any time-based vesting requirements. The participant will also be entitled to a full gross-up for any excise taxes imposed under Section 280G on the benefits payable to the participant in connection with the change in control (unless a reduction in the amount of the benefits by not more than $25,000 will avoid the imputation of those taxes). A participant's right to receive benefits under the CIC Plan is subject to the execution of a release of claims in favor of HCP upon the termination of the participant's employment.

37



Participants are also subject to confidentiality, non-solicitation and non-competition restrictive covenants under the CIC Plan.

Resignation and Consulting Agreement with Mr. Wallace.     As noted above, Mr. Wallace resigned as HCP's Executive Vice President, Chief Financial Officer and Treasurer effective March 31, 2009. In connection with his resignation, Mr. Wallace entered into a resignation and consulting agreement with HCP. The agreement provides for Mr. Wallace to receive a bonus payment of $92,500 with respect to his service during the first three months of 2009 and a consulting fee of $60,000 per month for the twelve-month period commencing April 1, 2009. Mr. Wallace will be entitled to continued vesting of his outstanding restricted stock and restricted stock unit awards during the consultancy period and to payment by HCP of his COBRA premiums for up to 18 months following his resignation. His outstanding stock options, to the extent not vested on March 31, 2009, will terminate on that date. The agreement also includes a mutual release of claims by Mr. Wallace and HCP, as well as certain confidentiality and non-solicitation covenants by Mr. Wallace for the benefit of HCP.

Estimated Severance and Change in Control Benefits

Severance Benefits.     The following chart presents HCP's estimate of the amount of the benefits to which Mr. Flaherty would have been entitled had his employment terminated under the circumstances described above (other than in connection with a change in control of HCP) on December 31, 2008.

 
 
 
  Termination by HCP Without Cause or by Mr. Flaherty for Good Reason
  Termination due to Mr. Flaherty's
Death or Disability

 
 
 
 
 
Name
  Cash
Severance(1)

  Continuation of
Health/Life
Benefits

  Equity
Acceleration(2)

  Total
  Continuation
of
Health Benefits

  Equity
Acceleration(2)

  Total
 

 
 

James F. Flaherty III

  $ 10,192,608   $ 41,348   $ 13,747,976   $ 23,981,932   $ 20,674   $ 13,747,976   $ 13,768,650  
   
(1)
As noted above, Mr. Flaherty's annual bonus for years prior to 2008 was awarded, in part or in full, as a grant of performance-based restricted stock units. For purposes of this calculation only, we have interpreted his employment agreement as requiring that the dollar value determined by our Compensation Committee at the time of making this grant be used to determine the amount of the cash severance payment. Mr. Flaherty would have been entitled to the full amount of his bonus for the 2008 fiscal year if he were employed by us through December 31, 2008, so the pro-rata bonus provisions described above would not apply.

(2)
These columns report the intrinsic value of the unvested portions of Mr. Flaherty's awards that would accelerate in the circumstances. For options, this value is calculated by multiplying the amount (if any) by which $27.77 (the closing price of our common stock on December 31, 2008) exceeds the exercise price of the option by the number of shares subject to the accelerated portion of the option. For restricted stock and restricted stock unit awards, this value is calculated by multiplying $27.77 by the number of shares or units subject to the accelerated portion of the award. As to the restricted stock units awarded to Mr. Flaherty during 2008 reported in the Grants of Plan-Based Awards table above that are subject to both time-based and performance-based vesting requirements, the time-based vesting requirements would be waived but the awards would continue to be subject to the performance-based vesting requirements if Mr. Flaherty's employment had terminated under the circumstances described above. We have included the value related to accelerated vesting of these awards in the table above as the performance-based vesting requirements for the period ended December 31, 2008 were satisfied.

Change in Control Severance Benefits.     The following chart presents HCP's estimate of the amount of the benefits to which each of the Named Executive Officers would have been entitled had a change in control

38



of HCP occurred on December 31, 2008 (and, as applicable, the executive's employment with HCP had terminated under the circumstances described above on such date):

 
 
Name
  Cash Severance(1)
  Continuation of
Health/Life
Benefits(2)

  Equity Acceleration(3)
  Section 280G
Gross-Up(4)

  Total
 

 
 

James F. Flaherty III

  $ 15,318,312   $ 62,022   $ 14,235,645   $ 8,236,672   $ 37,852,651  
   

Mark A. Wallace

  $ 1,552,000   $ 24,809   $ 1,468,820   $ 0   $ 3,045,629  
   

Paul F. Gallagher

  $ 1,732,000   $ 38,848   $ 1,591,158   $ 0   $ 3,362,006  
   

Edward J. Henning

  $ 1,432,000   $ 38,848   $ 1,223,431   $ 0   $ 2,694,279  
   

Thomas M. Klaritch

  $ 1,234,377   $ 38,848   $ 759,297   $ 0   $ 2,032,522  
   
(1)
In each case, the Named Executive Officer would have been entitled to the full amount of his bonus for the 2008 fiscal year if he were employed by us through December 31, 2008, so the pro-rata bonus provisions described above would not apply. See footnote (1) to the preceding table under "Severance Benefits" regarding the calculation of Mr. Flaherty's annual bonus for these purposes. For Mr. Flaherty, the cash severance amount also includes $29,400, which represents the approximate present value on December 31, 2008 of the matching contributions HCP would have made to his account under HCP's 401(k) plan had he remained employed by HCP for the three years after the date his employment terminated and made the maximum elected deferral contributions permitted under the 401(k) plan.

(2)
For Mr. Flaherty, this amount represents the cost of providing continuing medical, dental and vision benefits for him and his family members, as well as term life insurance for him, for a period of three years. For the other Named Executive Officers, these amounts represent the aggregate cost of the premiums that would be charged to each individual to continue health coverage for two years pursuant to the Consolidated Omnibus Budget Reconciliation Act ("COBRA") for such individual and his eligible dependents (to the extent that such dependents were receiving health benefits prior to the individual's termination date).

(3)
See footnote (2) to the preceding table under "Severance Benefits" for the manner of calculating equity acceleration value. As to the restricted stock units awarded to the Named Executive Officers during 2008 reported in the "Grants of Plan-Based Awards Table" above that are subject to both time-based and performance-based vesting requirements, the time-based vesting requirements would be waived but the awards would continue to be subject to the performance-based vesting requirements if the executive's employment had terminated under the circumstances described above. We have included the value related to accelerated vesting of these awards in the table above as the performance-based vesting requirements for the period ended December 31, 2008 were satisfied.

(4)
For purposes of estimating the Section 280G excise tax and corresponding gross-up amounts, we have assumed that the Named Executive Officer's outstanding equity awards would be accelerated and terminated in exchange for a cash payment upon the change in control. The value of this acceleration (and thus the amount of the additional payment) would be slightly higher if the accelerated awards were assumed by the acquiring company rather than terminated upon the transaction.


CERTAIN TRANSACTIONS

Transactions with Related Persons

Our policies and procedures for the review, approval or ratification of related person transactions are as follows: possible related person transactions are first screened by our legal department for materiality and then sent to the Audit Committee for review. The Audit Committee's charter states that the Audit Committee shall discuss with management and the independent auditor any related person transactions brought to the Audit Committee's attention which could reasonably be expected to have a material impact

39



on our financial statements. In determining whether to approve or reject a related person transaction, the Audit Committee takes into account, among other factors it deems appropriate, whether the proposed transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person's economic interest in the transaction. Audit Committee review and approval of related person transactions is evidenced in the minutes of the applicable Audit Committee meeting. For purposes of Audit Committee approval, a related person transaction is defined as any transaction that is required to be reported under Item 404 of SEC Regulation S-K.

The Audit Committee approved all related person transactions that occurred since January 1, 2008. Other than the transactions involving Mr. Elcan and Mr. Klaritch that are identified below, the amounts involved in all of such transactions are below disclosure thresholds established by the SEC under Item 404(a) of Regulation S-K, or the executive officer or director or his or her family member does not have a direct or indirect material interest, as that term is used in SEC rules, in the transaction.

Mr. Elcan, a former Executive Vice President of the Company through April 30, 2008, and certain members of Mr. Elcan's immediate family, including without limitation his wife and father-in-law, may be deemed to own directly or indirectly, in the aggregate, greater than 10% of the outstanding common stock of HCA, Inc. ("HCA") at April 29, 2008. During 2008, 2007 and 2006, HCA contributed $95 million, $83 million and $37 million, respectively, in aggregate revenues and interest income, for the lease of certain assets and obligations under debt securities.

Mr. Elcan and Mr. Klaritch, an Executive Vice President of the Company, were previously senior executives and limited liability company members of MedCap Properties, LLC, which was acquired in October 2003 by HCP and a joint venture of which HCP was the managing member. As part of that transaction, MedCap Properties, LLC contributed certain property interests to a newly-formed entity, HCPI/Tennessee LLC, in exchange for DownREIT units. In connection with the transactions, Messrs. Elcan and Klaritch received 610,397 and 113,431 non-managing member units, respectively, in HCPI/Tennessee, LLC in a distribution of their respective interests in MedCap Properties, LLC. Each DownREIT unit is redeemable for an amount of cash approximating the then-current market value of two shares of HCP's common stock or, at HCP's option, two shares of HCP's common stock (subject to certain adjustments, such as stock splits, stock dividends and reclassifications). In addition, the HCPI/Tennessee, LLC agreement provides for a "make-whole" payment, intended to cover grossed-up tax liabilities, to the non-managing members upon the sale of certain properties acquired by HCPI/Tennessee, LLC in the MedCap transactions and other events.

The HCPI/Tennessee, LLC agreement was amended, with an effective date of January 1, 2007, to change the allocation of the taxable income among the members, to more closely correspond with the relative cash distributions each member receives. Previously, taxable income was allocated disproportionately to the non-managing members to reflect the priority rights of the non-managing member unit holders in distributions of cash. The amendment has no effect on the amounts of cash distributions to the non-managing members.


SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our directors and officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of equity securities of our common stock. These persons are required by SEC regulations to furnish us with copies of all of these reports that they file. To our knowledge, based solely on our review of the copies of such reports, including any amendments thereto, furnished to us and written responses to annual directors' and officers' questionnaires, no other reports were required and all Section 16(a) filing requirements applicable to our Section 16(a) persons were timely filed, except for one Form 4 filed by Thomas Klaritch to report redemptions of certain LLC units of HCPI/Tennessee, LLC, of which the Company is the managing member.

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AUDIT COMMITTEE REPORT TO STOCKHOLDERS

Notwithstanding anything to the contrary set forth in any of our previous filings under the Securities Act of 1933, as amended, or the Exchange Act that refer to future filings for additional information, including specifically to this Proxy Statement, in whole or in part, the following report by the Audit Committee shall not be considered to be incorporated into, or a part of, any such filings.

The Audit Committee of the Board of Directors is comprised of four directors and operates under a written charter adopted by the Board of Directors, as required by the rules of the New York Stock Exchange. The members of the Audit Committee are Mr. Fanning, Ms. Garvey, Ms. Martin and Mr. Sullivan. HCP's Board has determined, in accordance with its categorical standards, that each member of the Audit Committee is "independent" within the meaning of NYSE and SEC rules.

The primary purposes of the Audit Committee are to assist the Board with its oversight responsibilities regarding: (i) the integrity of HCP's financial statements and internal control over financial reporting; (ii) HCP's compliance with legal and regulatory requirements; (iii) the independent auditor's qualifications and independence; and (iv) the performance of HCP's independent auditor and internal audit function.

Management is responsible for the preparation, presentation and integrity of HCP's financial statements as well as its financial reporting process, accounting policies, internal audit function, internal accounting controls and disclosure controls and procedures. The independent auditor is responsible for performing an audit of HCP's annual financial statements, expressing an opinion as to the conformity of such annual financial statements with generally accepted accounting principles, performing an audit of HCP's internal control over financial reporting and reviewing the quarterly financial statements. The members of the Audit Committee are not full-time employees of HCP and are not performing the functions of auditors or accountants. As such, it is not the duty or responsibility of the Audit Committee or its members to conduct "field work" or other types of auditing or accounting reviews or procedures or to set auditor independence standards. Members of the Audit Committee necessarily rely on the information provided to them by management and the independent auditors. Accordingly, the Audit Committee's considerations and discussions referred to below do not assure that the audit of HCP's financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that HCP's auditors are in fact "independent."

In the performance of its oversight function, the Audit Committee has met and held discussions with management and the independent auditors. Management represented to the Audit Committee that HCP's consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and the independent auditors. The Audit Committee discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees , as currently in effect. HCP's independent auditors also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditors' communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent auditors that firm's independence.

Based upon the Audit Committee's discussions with management and the independent auditors and the Audit Committee's review of the representation of management and the report of the independent auditors to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in HCP's Annual Report on Form 10-K for the year ended December 31, 2008, as filed with the SEC.

Audit Committee

Christine N. Garvey (Chair)   Robert R. Fanning, Jr.   Lauralee E. Martin   Joseph P. Sullivan

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AUDIT AND NON-AUDIT FEES

Independent Auditor Fee Information

The following table shows information about fees billed by Ernst & Young LLP, our current independent public auditor, during or related to 2008 and 2007.

 
 
 
  2008
($ in thousands)

  Percentage of 2008
Services Approved by
Audit Committee

  2007
($ in thousands)

  Percentage of 2007
Services Approved by
Audit Committee

 

 
 

Audit Fees(1)

  $ 2,253     100 % $ 2,593     100 %
   

Audit-related fees(2)

    437     100     392     100  
   

Tax fees(3)

    1,197     100     629     100  
   

All other fees(4)

        100     253     100  
   
 

Totals

  $ 3,887     n/a   $ 3,867     n/a  
   
(1)
Audit fees include fees and out-of-pocket expenses billed for the audit of our annual financial statements and internal control over financial reporting, the review of the interim financial statements included in our Quarterly Reports on Form 10-Q, and other SEC registration statement and consent services. In addition, the amounts provided in the table for 2008 include approximately $300,000 that was not included in the "Fees Paid to Independent Auditors" table included in our proxy statement for our 2008 annual meeting of stockholders because such amount was not billed until subsequent to the filing of our 2008 proxy statement.

(2)
Audit-related fees include fees for the separate audits of our consolidated subsidiaries and unconsolidated joint ventures, as well as agreed-upon-procedures related to our filing of the June 30, 2008 Form 10-Q under XBRL. In addition, the amounts provided in the table for 2008 include approximately $87,000 that was not included in the "Fees Paid to Independent Auditors" table included in our proxy statement for our 2008 annual meeting of stockholders because such amount was not billed until subsequent to the filing of our 2008 proxy statement.

(3)
Tax fees include fees for tax return review and consultation, including REIT qualification matters and tax due diligence in connection with the Company's acquisition of Slough Estates USA Inc.

(4)
All other fees include fees and out-of-pocket expenses for accounting and pre-signing tax due diligence in connection with our review of the June 30, 2007 financial statements and July 31, 2007 closing balance sheet of Slough Estates USA Inc.

The Audit Committee considered whether the provision of the non-audit services by Ernst & Young LLP to HCP is compatible with maintaining the independence of Ernst & Young LLP and concluded that the independence of Ernst & Young LLP is not compromised by the provision of such services. The Audit Committee must pre-approve all audit and permissible non-audit services performed by the independent auditor, although such approval may be delegated to a subcommittee of the Audit Committee, provided that any pre-approvals made by a subcommittee related to audit and permissible non-audit services are presented to the full Audit Committee at its next scheduled meeting.

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CODE OF BUSINESS CONDUCT AND ETHICS

HCP has adopted a Code of Business Conduct and Ethics that applies to all of its directors and employees, including the Chief Executive Officer and all senior financial officers, including the Company's principal financial officer, principal accounting officer and controller. The Code of Business Conduct and Ethics is posted in the Investor Relations—Corporate Governance section of our website at www.hcpi.com . In addition, a copy of our Code of Business Conduct and Ethics can be obtained, without charge, upon a request made to our Corporate Secretary, HCP, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806. Waivers from, and amendments to, our Code of Business Conduct and Ethics that apply to our directors, executive officers, other principal financial officers or persons performing similar functions will be timely posted in the Investor Relations—Corporate Governance section of our website at www.hcpi.com .


ELECTION OF DIRECTORS
(Proxy Item No. 1)

Pursuant to our Charter and Bylaws, our number of directors is currently set at eleven (11). Each of the directors elected at the Annual Meeting will serve until the 2010 annual meeting of stockholders and until he or she is succeeded by another qualified director who has been elected or until his or her earlier resignation or removal.

Upon the recommendation of the Nominating and Corporate Governance Committee, the Board has nominated Robert R. Fanning, Jr., James F. Flaherty III, Christine N. Garvey, David B. Henry, Lauralee E. Martin, Michael D. McKee, Harold M. Messmer, Jr., Peter L. Rhein, Kenneth B. Roath, Richard M. Rosenberg and Joseph P. Sullivan for election to the Board. Unless you specifically withhold authority in the proxy you submit for the election of any of these directors, the persons named in the proxy will vote FOR the election of Ms. Garvey, Ms. Martin and Messrs. Fanning, Flaherty, Henry, McKee, Messmer, Rhein, Roath, Rosenberg and Sullivan.

Directors are elected by a plurality of the votes cast by holders of shares entitled to vote on the proposal at the Annual Meeting. HCP has adopted a policy whereby any nominee for director who receives a number of "withhold" votes greater than the number of votes "for" his or her election will tender his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will recommend to our Board of Directors the action to be taken with respect to such offer of resignation.

Each of the nominees for election has consented to be named in this Proxy Statement and to serve as a director if elected. If any nominee becomes unavailable for any reason (which is not anticipated), your proxy may be voted for such other person or persons as may be determined by the holders of such proxies or for the balance of the nominees, leaving a vacancy, unless our Board of Directors chooses to reduce the number of directors serving on the Board of Directors.

Our Board of Directors recommends that you vote "FOR" each of the eleven (11) nominees for director.

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APPROVAL OF AMENDMENTS TO THE HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
(Proxy Item No. 2)

General

At the Annual Meeting, stockholders will be asked to approve the following amendments to the HCP, Inc. 2006 Performance Incentive Plan (the "2006 Plan"), which were adopted, subject to stockholder approval, by the Board of Directors on January 30, 2009.

As of February 23, 2009, a total of 5,056,826 shares of HCP common stock were subject to outstanding awards granted under the 2006 Plan, and an additional 1,571,443 shares of HCP common stock were then available for new award grants under the 2006 Plan.

HCP believes that incentives and stock-based awards focus employees on the objective of creating stockholder value and promoting the success of HCP, and that incentive compensation plans like the 2006 Plan are an important attraction, retention and motivation tool for participants in the plan. HCP's Board of Directors approved the foregoing amendments based on a belief that the number of shares of HCP common stock available under the 2006 Plan does not give HCP sufficient authority and flexibility to

44



adequately provide for future incentives. HCP's Board of Directors believes that these amendments would give HCP greater flexibility to structure future incentives and better attract, retain and award key employees.

If HCP stockholders do not approve this proposal, the current share limits under, and other terms and conditions of, the 2006 Plan will continue in effect.

Summary Description of the 2006 Performance Incentive Plan

The principal terms of the 2006 Plan are summarized below. The following summary is qualified in its entirety by the full text of the 2006 Plan, which has been filed as an annex to the copy of this Proxy Statement that was filed electronically with the SEC and can be reviewed on the SEC's website at http://www.sec.gov . You may also obtain, free of charge, a copy of the 2006 Plan by writing to Investor Relations at HCP, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, California 90806.

Purpose.     The purpose of the 2006 Plan is to promote the success of HCP and the interests of our stockholders by providing an additional means for us to attract, motivate, retain and reward directors, officers, employees and other eligible persons through the grant of awards and incentives for high levels of individual performance and improved financial performance of HCP. Equity-based awards are also intended to further align the interests of award recipients and our stockholders.

Administration.     Our Board of Directors or one or more committees appointed by our Board of Directors will administer the 2006 Plan. Our Board of Directors has delegated general administrative authority for the 2006 Plan to the Compensation Committee. A committee may delegate some or all of its authority with respect to the 2006 Plan to another committee of directors, and certain limited authority to grant awards to employees may be delegated to one or more officers of HCP. (The appropriate acting body, be it the Board of Directors, a committee within its delegated authority, or an officer within his or her delegated authority, is referred to in this proposal as the "Administrator").

The Administrator has broad authority under the 2006 Plan with respect to award grants including, without limitation, the authority:

No Repricing or Loans.     In no case (except due to an adjustment to reflect a stock split or similar event or any repricing that may be approved by stockholders) will any adjustment be made to a stock option or stock appreciation right award under the 2006 Plan (by amendment, cancellation and regrant, exchange or other means) that would constitute a repricing of the per share exercise or base price of the award. Furthermore,

45



loans to employees (to finance the purchase or exercise of awards or otherwise) are not permitted under the 2006 Plan.

Eligibility.     Persons eligible to receive awards under the 2006 Plan include officers or employees of HCP or any of its subsidiaries, directors of HCP, and certain consultants and advisors to HCP or any of its subsidiaries. As of March 3, 2009, approximately 144 officers and employees of HCP and its subsidiaries (including all of HCP's named executive officers), and each of HCP's 10 independent directors, are considered eligible under the 2006 Plan.

Authorized Shares; Limits on Awards.     The maximum number of shares of HCP common stock that may be issued or transferred pursuant to awards under the 2006 Plan currently equals the sum of: (1) 5,000,000 shares, plus (2) the number of shares available for additional award grant purposes under the 2000 Stock Incentive Plan, as amended (the "2000 Plan") as of May 11, 2006 and determined immediately prior to the termination of the authority to grant new awards under that plan as of May 11, 2006, plus (3) the number of any shares subject to stock options granted under the 2000 Plan and outstanding as of May 11, 2006 which expire, or for any reason are cancelled or terminated, after May 11, 2006 without being exercised, plus (4) the number of any shares of restricted stock granted under the 2000 Plan that are outstanding and unvested as of May 11, 2006 which are forfeited, terminated, cancelled or otherwise reacquired by HCP without having become vested.

As of February 23, 2009, approximately 723,382 shares of HCP common stock had become available for grant under the 2006 Plan in respect of awards under the 2000 Plan that have terminated without having been exercisable or paid and approximately an additional 831,041 shares were subject to awards that were then still outstanding under the 2000 Plan. No additional awards may be granted under the 2000 Plan.

If stockholders approve this 2006 Plan proposal, the aggregate share limit for the 2006 Plan would be increased by an additional 9,000,000 shares.

Shares issued in respect of any "full-value award" granted under the 2006 Plan currently are counted against the share limit described in the preceding paragraph above as two shares for every one share actually issued in connection with the award. For example, if HCP granted a stock bonus award covering 100 shares of its common stock under the 2006 Plan, 200 shares would be charged against the share limit with respect to that award. For this purpose, a "full-value award" generally means any award granted under the plan other than a stock option or stock appreciation right. If stockholders approve this proposal, shares issued in respect of any full-value award granted under the 2006 Plan would count against the share limit as 1.5 shares for every one share actually issued in connection with the award (e.g., in the foregoing example, 150 shares would currently be charged against the share limit with respect to that stock bonus award).

The following other limits are also contained in the 2006 Plan:

46


To the extent that an award is settled in cash or a form other than shares, the shares that would have been delivered had there been no such cash or other settlement will not be counted against the shares available for issuance under the 2006 Plan. In the event that shares are delivered in respect of a dividend equivalent right, only the actual number of shares delivered with respect to the award shall be counted against the share limits of the 2006 Plan. To the extent that shares are delivered pursuant to the exercise of a stock appreciation right or stock option, the number of underlying shares as to which the exercise related shall be counted against the applicable share limits, as opposed to only counting the shares actually issued. (For purposes of clarity, if a stock appreciation right relates to 100,000 shares and is exercised at a time when the payment due to the participant is 15,000 shares, 100,000 shares shall be charged against the applicable share limits with respect to such exercise.) Shares that are subject to or underlie awards which expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under the 2006 Plan will again be available for subsequent awards under the 2006 Plan. In addition, the 2006 Plan generally provides that shares issued in connection with awards that are granted by or become obligations of HCP through the assumption of awards (or in substitution for awards) in connection with an acquisition of another company will not count against the shares available for issuance under the 2006 Plan. HCP may not increase the applicable share limits of the 2006 Plan by repurchasing shares of common stock on the market (by using cash received through the exercise of stock options or otherwise). If stockholders approve this 2006 Plan proposal, shares that are exchanged by a participant or withheld by HCP to pay the exercise price of an award granted under the 2006 Plan, as well as any shares exchanged or withheld to satisfy the tax withholding obligations related to any award, will not be available for subsequent awards under the 2006 Plan.

Types of Awards.     The 2006 Plan authorizes stock options, stock appreciation rights, restricted stock, stock bonuses and other forms of awards granted or denominated in HCP common stock or units of HCP common stock, as well as cash bonus awards pursuant to Section 5.2 of the 2006 Plan. The 2006 Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be paid or settled in cash.

A stock option is the right to purchase shares of HCP common stock at a future date at a specified price per share (the "exercise price"). The per share exercise price of an option generally may not be less than the fair market value of a share of HCP common stock on the date of grant. The maximum term of an option is ten years from the date of grant. An option may either be an incentive stock option or a nonqualified stock option. Incentive stock option benefits are taxed differently from nonqualified stock options, as described under "Federal Income Tax Consequences of Awards Under the 2006 Plan" below. Incentive stock options are also subject to more restrictive terms and are limited in amount by the U.S. Internal Revenue Code and the 2006 Plan. Incentive stock options may only be granted to employees of HCP or a subsidiary.

A stock appreciation right is the right to receive payment of an amount equal to the excess of the fair market value of share of HCP common stock on the date of exercise of the stock appreciation right over the base price of the stock appreciation right. The base price will be established by the Administrator at the time of grant of the stock appreciation right and generally cannot be less than the fair market value of a share of HCP common stock on the date of grant. Stock appreciation rights may be granted in connection with other awards or independently. The maximum term of a stock appreciation right is ten years from the date of grant.

The other types of awards that may be granted under the 2006 Plan include, without limitation, stock bonuses, restricted stock, performance stock, stock units, dividend equivalents, or similar rights to

47



purchase or acquire shares, and cash awards granted consistent with Section 5.2 of the 2006 Plan as described below.

Performance-Based Awards.     The Administrator may grant awards that are intended to be performance-based awards within the meaning of Section 162(m) of the U.S. Internal Revenue Code ("Performance-Based Awards"). Performance-Based Awards are in addition to any of the other types of awards that may be granted under the 2006 Plan (including options and stock appreciation rights which may also qualify as performance-based awards for Section 162(m) purposes). Performance-Based Awards may be in the form of restricted stock, performance stock, stock units, other rights, or cash bonus opportunities.

The vesting or payment of Performance-Based Awards (other than options or stock appreciation rights) will depend on the absolute or relative performance of HCP on a consolidated, subsidiary, segment, division, or business unit basis. The Administrator will establish the criterion or criteria and target(s) on which performance will be measured. The Administrator must establish criteria and targets in advance of applicable deadlines under the U.S. Internal Revenue Code and while the attainment of the performance targets remains substantially uncertain. The criteria that the Administrator may use for this purpose will include one or more of the following: net income; pre-tax income; operating income; cash flow; earnings per share; return on equity; return on invested capital or assets; cost reduction or savings; funds from operations; funds from operations per share; funds from operations payout ratio; adjusted funds from operations; cash and/or funds available for distribution; appreciation in the fair market value of HCP common stock; return on investment; total return to stockholders; net earnings; earnings before or after any one or more of interest, taxes, depreciation or amortization; or any combination thereof. The performance measurement period with respect to an award may range from three months to ten years. Performance targets will be adjusted to mitigate the unbudgeted impact of material, unusual or nonrecurring gains and losses, accounting changes or other extraordinary events not foreseen at the time the targets were set unless the Administrator provides otherwise at the time of establishing the targets.

Performance-Based Awards may be paid in stock or in cash (in either case, subject to the limits described under the heading "Authorized Shares; Limits on Awards" above). Before any Performance-Based Award (other than an option or stock appreciation right) is paid, the Administrator must certify that the performance target or targets have been satisfied. The Administrator has discretion to determine the performance target or targets and any other restrictions or other limitations of Performance-Based Awards and may reserve discretion to reduce payments below maximum award limits.

Deferrals.     The Administrator may provide for the deferred payment of awards, and may determine the other terms applicable to deferrals. The Administrator may provide that deferred settlements include the payment or crediting of interest or other earnings on the deferred amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in shares.

Acceleration of Awards; Possible Early Termination of Awards.     Generally, and subject to limited exceptions set forth in the 2006 Plan, if any person acquires 25% or more of the outstanding common stock or combined voting power of HCP, if certain changes in a majority of our Board of Directors occur over a period of not longer than two years, if stockholders prior to a transaction do not continue to own more than 66 2 / 3 % of the voting securities of HCP (or a successor or a parent) following a reorganization, merger, statutory share exchange or consolidation or similar corporate transaction involving HCP or any of its subsidiaries, a sale or other disposition of all or substantially all of HCP's assets or the acquisition of assets or stock of another entity by HCP or any of its subsidiaries, or if HCP is dissolved or liquidated, then awards then-outstanding under the 2006 Plan may become fully vested or paid, as applicable, and may terminate or be terminated in such circumstances. The Administrator also has the discretion to establish other change in control provisions with respect to awards granted under the 2006 Plan. For example, the Administrator could provide for the acceleration of vesting or payment of an award in connection with a change in control event that is not described above and provide that any such acceleration shall be automatic upon the occurrence of any such event.

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Transfer Restrictions.     Subject to certain exceptions contained in Section 5.7 of the 2006 Plan, awards under the 2006 Plan generally are not transferable by the recipient other than by will or the laws of descent and distribution and are generally exercisable, during the recipient's lifetime, only by the recipient. Any amounts payable or shares issuable pursuant to an award generally will be paid only to the recipient or the recipient's beneficiary or representative. The Administrator has discretion, however, to establish written conditions and procedures for the transfer of awards to other persons or entities, provided that such transfers comply with applicable federal and state securities laws and, with limited exceptions set forth in the 2006 Plan, are not made for value.

Adjustments.     As is customary in incentive plans of this nature, each share limit and the number and kind of shares available under the 2006 Plan and any outstanding awards, as well as the exercise or purchase prices of awards, and performance targets under certain types of performance-based awards, are subject to adjustment in the event of certain reorganizations, mergers, combinations, recapitalizations, stock splits, stock dividends, or other similar events that change the number or kind of shares outstanding, and extraordinary dividends or distributions of property to the stockholders.

No Limit on Other Authority.     Except as expressly provided with respect to the termination of the authority to grant new awards under the 2000 Plan if stockholders approve the 2006 Plan, the 2006 Plan does not limit the authority of the Board of Directors or any committee to grant awards or authorize any other compensation, with or without reference to HCP common stock, under any other plan or authority.

Termination of or Changes to the 2006 Plan.     The Board of Directors may amend or terminate the 2006 Plan at any time and in any manner. Stockholder approval for an amendment will be required only to the extent then required by applicable law or any applicable listing agency or required under Sections 162, 422 or 424 of the U.S. Internal Revenue Code to preserve the intended tax consequences of the plan. For example, stockholder approval will be required for any amendment that proposes to increase the maximum number of shares that may be delivered with respect to awards granted under the 2006 Plan. (Adjustments as a result of stock splits or similar events will not, however, be considered an amendment requiring stockholder approval.) Unless terminated earlier by the Board of Directors, the authority to grant new awards under the 2006 Plan will terminate on March 31, 2016. Outstanding awards, as well as the Administrator's authority with respect thereto, generally will continue following the expiration or termination of the plan. Generally speaking, outstanding awards may be amended by the Administrator (except for a repricing), but the consent of the award holder is required if the amendment (or any plan amendment) materially and adversely affects the holder.

Federal Income Tax Consequences of Awards under the 2006 Plan

The U.S. federal income tax consequences of the 2006 Plan under current federal law, which is subject to change, are summarized in the following discussion of the general tax principles applicable to the 2006 Plan. This summary is not intended to be exhaustive and, among other considerations, does not describe the deferred compensation provisions of Section 409A of the U.S. Internal Revenue Code to the extent an award is subject to and does not satisfy those rules, nor does it describe state, local, or international tax consequences.

With respect to nonqualified stock options, the company is generally entitled to deduct and the participant recognizes taxable income in an amount equal to the difference between the option exercise price and the fair market value of the shares at the time of exercise. With respect to incentive stock options, the company is generally not entitled to a deduction nor does the participant recognize income at the time of exercise, although the participant may be subject to the U.S. federal alternative minimum tax.

The current federal income tax consequences of other awards authorized under the 2006 Plan generally follow certain basic patterns: nontransferable restricted stock subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid (if any) only at

49



the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant); bonuses, stock appreciation rights, cash and stock-based performance awards, dividend equivalents, stock units, and other types of awards are generally subject to tax at the time of payment; and compensation otherwise effectively deferred is taxed when paid. In each of the foregoing cases, the company will generally have a corresponding deduction at the time the participant recognizes income.

If an award is accelerated under the 2006 Plan in connection with a "change in control" (as this term is used under the U.S. Internal Revenue Code), the company may not be permitted to deduct the portion of the compensation attributable to the acceleration ("parachute payments") if it exceeds certain threshold limits under the U.S. Internal Revenue Code (and certain related excise taxes may be triggered). Furthermore, the aggregate compensation in excess of $1,000,000 attributable to awards that are not "performance-based" within the meaning of Section 162(m) of the U.S. Internal Revenue Code may not be permitted to be deducted by the company in certain circumstances.

Specific Benefits under the 2006 Performance Incentive Plan

HCP has not approved any awards that are conditioned upon stockholder approval of the proposed amendments. HCP is not currently considering any other specific award grants under the 2006 Plan. If the additional shares that will be available under the 2006 Plan if stockholders approve the proposed amendments had been available for award purposes in fiscal 2008, HCP expects that its award grants made in fiscal 2008 would not have been substantially different from those actually made in that year under the 2006 Plan. For information regarding stock-based awards granted to HCP's named executive officers during fiscal 2008, see the material under the heading "Grants of Plan-Based Awards" above.

The closing market price for a share of HCP common stock as of February 23, 2009 was $18.63 per share.

50


AGGREGATE PAST GRANTS UNDER THE 2006 PLAN

As of February 23, 2009, awards covering 10,170,579 shares of HCP common stock had been granted under the 2006 Plan. The following table shows information regarding the distribution of those awards among the persons and groups identified below, option exercises and restricted stock vesting prior to and option and unvested restricted stock holdings as of that date.

 
   
   
  Number of Shares
Underlying
Options as of
February 23, 2009
  Number of
Shares
Subject to
Past
Restricted
Stock
Grants
   
   
 
 
  Number of
Shares
Subject to
Past Option
Grants
  Number of
Shares
Acquired
On
Exercise
   
  Number of
Shares
Outstanding
and Unvested
as of 2/23/09
 
 
  Number of
Shares
Vested as of
2/23/09
 
Name and Position
  Exercisable   Unexercisable  

Executive Group:

                                           

James F. Flaherty III
Chairman of the Board, President and Chief Executive Officer

    1,814,885     0     216,564     1,598,321     461,630     37,196     424,434  

Mark A. Wallace
Executive Vice President, Chief Financial Officer and Treasurer

    162,610     0     41,790     120,820     34,240     9,586     24,654  

Paul F. Gallagher
Executive Vice President—Chief Investment Officer

    477,225     0     49,374     427,851     93,505     11,402     82,103  

Edward J. Henning
Executive Vice President, General Counsel, Chief Administrative Officer and Corporate Secretary

    257,815     0     35,460     222,355     51,650     8,278     43,372  

Thomas M. Klaritch
Executive Vice President—Medical Office Properties

    144,435     0     19,465     124,970     34,655     5,044     29,611  

Total for Executive Group:

    2,856,970     0     362,653     2,494,317     675,680     71,506     604,174  

Non-Executive Director Group:

                                           

Robert R. Fanning, Jr

    0     0     0     0     9,000     2,250     6,750  

Christine N. Garvey

    0     0     0     0     4,500     375     4,125  

David B. Henry

    0     0     0     0     9,000     2,250     6,750  

Lauralee E. Martin

    0     0     0     0     3,000     0     3,000  

Michael D. McKee

    0     0     0     0     9,000     2,250     6,750  

Harold M. Messmer, Jr. 

    0     0     0     0     9,000     2,250     6,750  

Peter L. Rhein

    0     0     0     0     9,000     2,250     6,750  

Kenneth B. Roath

    0     0     0     0     9,000     2,250     6,750  

Richard M. Rosenberg

    0     0     0     0     9,000     2,250     6,750  

Joseph P. Sullivan

    0     0     0     0     9,000     2,250     6,750  

Total for Non-Executive Director Group:

    0     0     0     0     79,500     18,375     61,125  

Each other person who has received 5% or more of the options, warrants or rights under the 2006 Plan

    0     0     0     0     0     0     0  

All employees, including all current officers who are not executive officers or directors, as a group

    1,582,051     0     164,201     1,417,850     581,481     102,063     479,418  

Total

    4,439,021     0     526,854     3,912,167     1,336,661     191,944     1,144,717  

Mr. Flaherty and each of the non-executive directors identified above is a nominee for re-election as a director at the Annual Meeting.

51



EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth, for each of HCP's equity compensation plans, the number of shares of common stock subject to outstanding options, the weighted-average exercise price of outstanding options, and the number of shares remaining available for future award grants as of December 31, 2008.

 
 
Plan category
  Number of
securities
to be issued upon
exercise of
outstanding
options and
vesting of
restricted stock
units
(a)

  Weighted-average
exercise price of
outstanding options
(b)

  Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)

 

 
 

Equity compensation plans approved by security holders

    6,001,105 (1) $ 25.43 (2)   4,900,780 (3)
   

Equity compensation plans not approved by security holders

    N/A     N/A     N/A  
   
 

Totals

    6,001,105 (1) $ 25.43 (2)   4,900,780 (3)
   
(1)
Of these shares, 5,137,250 shares were subject to outstanding stock options and 863,855 shares were subject to outstanding restricted stock units. This number does not include 397,694 shares that were subject to then-outstanding, but unvested, restricted stock awards because those securities have been subtracted from the number of securities remaining available for future issuance under column (c). This table does not reflect the 9,000,000 additional shares that will be available under the 2006 Plan if stockholders approve the 2006 Plan proposal.

(2)
This weighted-average exercise price does not reflect the 863,855 shares that will be issued upon the payment of outstanding restricted stock units.

(3)
Of the aggregate number of shares that remained available for future issuance, all were available under the 2006 Plan. Subject to certain express limits of the 2006 Plan, shares available for award purposes under the 2006 Plan generally may be used for any type of award authorized under that plan including options, stock appreciation rights, and other forms of awards granted or denominated in shares of our common stock including, without limitation, stock bonuses, restricted stock, restricted stock units and performance shares. No new awards may be granted under the 2000 Plan.

Vote Required for Approval of the Amendments to the 2006 Performance Incentive Plan

The Board of Directors believes that the approval of the amendments to the 2006 Plan will promote the interests of HCP and its stockholders and will help HCP and its subsidiaries continue to be able to attract, retain and reward persons important to our success.

All members of the Board of Directors are eligible for awards under the 2006 Plan and thus have a personal interest in the approval of the amendments to the 2006 Plan.

Approval of the amendments to the 2006 Plan requires the affirmative vote of a majority of the votes cast on the proposal, provided that the total votes cast on the proposal represents over 50% in interest of all securities entitled to vote on the proposal. Broker non-votes and abstentions on the proposal have the effect described on page 4 of this Proxy Statement.

Our Board of Directors recommends that you vote "FOR" approval of the amendments to the 2006 Performance Incentive Plan as described above.

52



RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
(Proxy Item No. 3)

Our Audit Committee has appointed the firm of Ernst & Young LLP as independent auditors for HCP for the fiscal year ending December 31, 2009, and is submitting its selection for ratification by our stockholders. Ernst & Young LLP has served as our independent auditors since May 2002. Subject to the matters discussed under "Audit Committee Report to Stockholders," the Audit Committee carefully considered the firm's qualifications as independent auditors for HCP. This included a review of the qualifications of the engagement team, the quality control procedures the firm has established and any issues raised by the most recent quality control review of the firm. The Audit Committee's review also included the matters regarding auditor independence discussed under "Audit Committee Report to Stockholders," including whether the nature and extent of non-audit services would impair the independence of the auditors. Services provided to the Company and its subsidiaries by Ernst & Young LLP in fiscal 2008 are described under the heading "Audit and Non-Audit Fees" above.

If the stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will consider the appointment of other independent auditors. The Audit Committee retains the power to replace the independent auditors whose appointment was ratified by stockholders if the Audit Committee determines that the best interests of HCP warrant a change of its independent auditors.

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting and will have an opportunity to make a statement if he or she desires to do so. Ernst & Young LLP's representative is expected to be available to respond to appropriate questions.

Our Board of Directors recommends that you vote "FOR" ratification of the appointment of Ernst & Young LLP as HCP's independent auditors for the year ending December 31, 2009.


DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR NEXT YEAR'S ANNUAL MEETING

It is currently contemplated that HCP's 2010 annual meeting of stockholders will be held on or about April 22, 2010. In the event that a stockholder desires to have a proposal considered for presentation at the 2010 annual meeting of stockholders, and inclusion in the proxy statement and form of proxy used in connection with such meeting, the proposal must be forwarded in writing to the Corporate Secretary of HCP so that it is received no later than November 13, 2009. Any such proposal must comply with the requirements of HCP's Bylaws and Rule 14a-8 promulgated under the Exchange Act.

If a stockholder, rather than including a proposal in HCP's proxy statement as discussed above, seeks to nominate a candidate for election or to propose business for consideration at such meeting, HCP must receive notice of such proposal no earlier than January 23, 2010 and no later than February 22, 2010. In addition, in the event that we advance the date of the 2010 annual meeting of stockholders by more than thirty (30) days or delay it by more than sixty (60) days from the anniversary date of the Annual Meeting, notice by a stockholder to be timely must be delivered not earlier than the ninetieth (90th) day prior to the 2010 annual meeting of stockholders and not later than the close of business on the later of the sixtieth (60th) day prior to the 2010 annual meeting of stockholders or the tenth (10th) day following the day on which HCP publicly announces the date of the 2010 annual meeting of stockholders. If the notice is not received between these dates and does not satisfy the additional notice requirements set forth in Article II, Section 7(a) of HCP's Bylaws, the notice will be considered untimely and will not be acted upon at the 2010 annual meeting of stockholders.

Proposals and notices should be directed to the attention of the Corporate Secretary, HCP, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806.

53



OTHER MATTERS

Our Board of Directors knows of no matters to be presented at the Annual Meeting other than those described in this Proxy Statement. Other business may properly come before the meeting, and in that event it is the intention of the persons named in the accompanying proxy to vote in their discretion on such matters.

Our Annual Report on Form 10-K, containing audited financial statements, accompanies this Proxy Statement. Upon the written request of any person solicited hereby, HCP will provide a copy to such person, without charge, of HCP's Annual Report on Form 10-K for the year ended December 31, 2008. Such requests should be directed to our Corporate Secretary, HCP, Inc., 3760 Kilroy Airport Way, Suite 300, Long Beach, CA 90806.

ALL STOCKHOLDERS ARE URGED TO VOTE IN PERSON OR TO SUBMIT YOUR PROXY AS SOON AS POSSIBLE.

    By Order of the Board of Directors
    GRAPHIC

Edward J. Henning
Corporate Secretary

Long Beach, California
March 9, 2009

54


ANNEX 1

Categorical Standards for Director Independence

A substantial majority of the Board shall consist of directors who are neither officers or employees of HCP or its subsidiaries nor have a relationship which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director, and who are otherwise "independent" under the rules of the New York Stock Exchange ("NYSE"). Except during periods of transition, or in other unusual circumstances, the Board would not expect to have more than one or two employee directors.

To be considered independent under the NYSE rules, the Board must affirmatively determine that a director does not have any material relationship with HCP or its subsidiaries (either directly or as a partner, shareholder or officer of an organization that has a relationship with the Company). Any relationship with HCP shall be deemed to be not material if:


Annex 2

HCP, INC.
2006 PERFORMANCE INCENTIVE PLAN
(Amended and Restated as of January 30, 2009)

1.     PURPOSE OF PLAN

2.     ELIGIBILITY

3.     PLAN ADMINISTRATION

1


2


4.     SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS

3


                                                     
    (1)   The current aggregate Share Limit for this Plan is 5,000,000 shares (excluding shares originally authorized for issuance under the 2000 Plan). Stockholders are being asked to approve amendments to this Plan that would increase this aggregate Share Limit by an additional 9,000,000 shares (so that the new aggregate Share Limit for the plan would be 14,000,000 shares, in addition to the shares originally authorized and not issued under the 2000 Plan as set forth above).

 

 

(2)

 

Stockholders are being asked to approve a reduction in this ratio from 2.0 shares to 1.5 shares.

4


        The following limits also apply with respect to awards granted under this Plan:

                                                     
    (3)   Stockholders are being asked to approve an increase in this limit from 7,000,000 shares to 14,000,000 shares.

 

 

(4)

 

Stockholders are being asked to approve an increase in this limit from 1,000,000 shares to 2,000,000 shares.

5


5.     AWARDS

6


7


                                                     
    (5)   Stockholders are being asked to approve an increase in this limit from 500,000 shares to 1,000,000 shares.

8


9


10


6.     EFFECT OF TERMINATION OF SERVICE ON AWARDS

7.     ADJUSTMENTS; ACCELERATION

11


12


13


8.     OTHER PROVISIONS

14


15


16


17


18


HCP, INC.

ANNUAL MEETING OF STOCKHOLDERS

Thursday, April 23, 2009
9:30 a.m., California time

Long Beach Marriott
4700 Airport Plaza Drive
Long Beach, California 90815


 
GRAPHIC   proxy

 

This proxy is solicited by the Board of Directors for use at the Annual Meeting on April 23, 2009.

The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side.

This proxy is revocable and, when properly executed, will be voted in the manner directed herein by the undersigned. If no choice is specified, the proxy (if signed) will be voted "FOR" election to the Board of Directors of all nominees listed in Proposal 1 and "FOR" Proposals 2 and 3.

By signing this proxy, the undersigned stockholder hereby appoints James F. Flaherty III and Peter L. Rhein, and each of them, with full power of substitution, to act as attorneys and proxies of the undersigned and to vote on behalf of the undersigned all shares of common stock of HCP, Inc. ("HCP"), which the undersigned is entitled to vote at the 2009 Annual Meeting of Stockholders to be held on Thursday, April 23, 2009 at 9:30 a.m., California time, or any adjournments or postponements thereof. Without otherwise limiting the general authorization given hereby, said attorneys and proxies are instructed to vote as set forth on the reverse.

00065990

See reverse for voting instructions.


   
        COMPANY #
     
   
 
        Vote by Internet, Telephone or Mail
24 Hours a Day, 7 Days a Week


 

 

 

 

Your phone or Internet vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

ADDRESS BLOCK

 

 

 

GRAPHIC

 

INTERNET— www.eproxy.com/hcp
            Use the Internet to vote your proxy until 12:00 p.m. (CT) on April 22, 2009.


 

 

 

 


GRAPHIC

 

PHONE—1-800-560-1965
            Use a touch-tone telephone to vote your proxy until 12:00 p.m. (CT) on April 22, 2009.

 

 

 

 

GRAPHIC

 

Mail— Mark, sign and date your proxy card and return it in the postage-paid envelope provided.

 

 

 

 

If you vote your proxy by Internet or by Telephone, you do NOT need to mail back your proxy card.

TO VOTE BY MAIL AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL PROPOSALS BELOW,
SIMPLY SIGN, DATE, AND RETURN THIS PROXY CARD.

GRAPHIC



 
     
 

The Board of Directors Recommends a Vote FOR election to the Board of Directors
of all nominees listed in Proposal 1 and FOR Proposals 2 and 3.

1.   To elect eleven (11) persons   01   Robert R. Fanning, Jr.   05   Lauralee E. Martin   09   Kenneth B. Roath   o   Vote FOR   o   Vote WITHHELD
    to HCP's Board of Directors:   02   James F. Flaherty III   06   Michael D. McKee   10   Richard M. Rosenberg       all nominees       from all nominees
        03   Christine N. Garvey   07   Harold M. Messmer, Jr.   11   Joseph P. Sullivan       (except as marked)        
        04   David B. Henry   08   Peter L. Rhein                        
       
 
(Instructions: To withhold authority to vote for any indicated nominee,
write the number(s) of the nominee(s) in the box provided to the right.)
                       
       
 
2.   To approve amendments to HCP's 2006 Performance incentive Plan.   o   For   o   Against   o   Abstain

3.

 

To ratify the appointment of Ernst & Young LLP as HCP's independent
auditors for the fiscal year ending December 31, 2009.

 

o

 

For

 

o

 

Against

 

o

 

Abstain

4.

 

At their discretion, the named proxies are authorized to consider and vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
Address Change? Mark Box   o   Indicate changes below:                   Date    
               
 
           
 

 

 

 

 

 

 

 

 

 
           
 
            Signature(s) in Box

 

 

 

 

 

 

Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the Proxy.

 
     
 



QuickLinks

IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
QUESTIONS AND ANSWERS ABOUT THE MEETING
PRINCIPAL STOCKHOLDERS
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
DIRECTOR COMPENSATION—2008
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
CURRENT EXECUTIVE COMPENSATION PROGRAM ELEMENTS
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Compensation Committee of the Board of Directors
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
SUMMARY COMPENSATION TABLE - 2006—2008
COMPENSATION OF NAMED EXECUTIVE OFFICERS
GRANTS OF PLAN-BASED AWARDS DURING 2008
DESCRIPTION OF PLAN-BASED AWARDS
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2008
OPTION EXERCISES AND STOCK VESTED DURING 2008
POTENTIAL PAYMENTS UPON A TERMINATION OR CHANGE IN CONTROL
CERTAIN TRANSACTIONS
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
AUDIT COMMITTEE REPORT TO STOCKHOLDERS
AUDIT AND NON-AUDIT FEES
CODE OF BUSINESS CONDUCT AND ETHICS
ELECTION OF DIRECTORS (Proxy Item No. 1)
APPROVAL OF AMENDMENTS TO THE HCP, INC. 2006 PERFORMANCE INCENTIVE PLAN (Proxy Item No. 2)
EQUITY COMPENSATION PLAN INFORMATION
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS (Proxy Item No. 3)
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS FOR NEXT YEAR'S ANNUAL MEETING
OTHER MATTERS
ANNEX 1—Categorical Standards for Director Independence
ANNEX 2—HCP, INC. 2006 PERFORMANCE INCENTIVE PLAN (Amended and Restated as of January 30, 2009)