PROPOSAL 1 – ELECTION OF DIRECTORS

 

Our Board of Directors has nominated eight directors for election at this annual meeting to hold office until the next annual meeting and the election of their successors. All the nominees are currently directors. Mr. Bulls was nominated and elected to the Board in June 2021. Mr. Bulls was initially identified as a director candidate by an independent director and a third-party search firm. In February 2022, Mr. John B. Morse, Jr. expressed his intention to retire from the Board at the conclusion of his current term and, accordingly, his term will end at the conclusion of the 2022 annual meeting. The Board determined that, effective at the conclusion of the 2022 annual meeting, the size of the Board will be decreased from nine to eight directors. The Board is engaged in a search for a new director as part of its ongoing refreshment efforts. See “Corporate Governance and Board Matters – Process for Selecting Directors.”

Each nominee has consented to serve if elected, but if any director nominee is unavailable to serve (an event which our Board does not now anticipate), the proxies named on your proxy card will vote for a substitute nominee recommended by the Board. Alternatively, should such circumstances arise, the Board may decide to reduce the size of the Board and the number of nominees.

Board Skills, Qualifications, Diversity and Tenure

The Nominating, Governance and Corporate Responsibility Committee reviews the composition of the Board in light of the Company’s changing requirements and its annual assessment of the Board’s performance. The Committee and Board seek a complementary mix of individuals with diverse backgrounds and skills reflecting the broad set of challenges that the Board confronts.

There are general qualifications that all directors must have, which are described in the Committee’s charter and the Company’s Corporate Governance Guidelines, including integrity and high ethical standards, mature and independent judgment, diverse business experience, familiarity with the issues affecting the Company’s business, and a commitment to full participation on the Board and its committees. The Committee also considers other criteria, including: experience in running a major enterprise, sound business acumen, experience as a board member of another publicly held company, academic expertise in an area of the Company’s operations, and a reputation, both personal and professional, consistent with the image and reputation of the Company.

The Board and the Committee are also committed to a diversified membership, in terms of both the individuals involved and their experience. As stated in the Committee’s charter, the Committee may take into account the overall diversity of the Board, including professional background, experience, thought, perspective, age, tenure, gender, and ethnicity.

The Board and the Nominating, Governance and Corporate Responsibility Committee believe it is important for the Board to be “refreshed” by adding new directors from time to time. The Committee and the Board also believe that longer serving directors bring critical skills and knowledge to the Board. Among other things, senior directors bring a historical perspective to the Board, which is highly relevant in a cyclical business such as the lodging industry. In addition, the Committee and the Board believe that longer serving directors have acquired extensive knowledge of the business that tends to make them less dependent upon management for information and perspectives. Accordingly, while the Committee considers tenure as a factor in determining the nominee slate, it is not a primary driver of decisions.

 

9

									PROPOSAL 1 – ELECTION OF DIRECTORS

 

Director Nominees
The Committee believes that each of the nominees possesses the key attributes that are important to an effective Board. Each director nominee holds or has held senior executive positions in large organizations or the government and has experience relevant to the Company’s business. Our directors also serve on the boards of other public and private companies and have an understanding of corporate governance practices and trends. The Committee has also taken into account diversity considerations in determining the slate of directors and believes that, as a group, the nominees bring a broad range of perspectives to Board deliberations.   The director nominees have served on our Board for an average of approximately 9.5 years. The median tenure of our director nominees is 7 years.   The Committee also considered the specific experiences described in the biographical details that follow in determining to nominate the individuals set forth below for election as directors.

Below each nominee’s biography, we have included an assessment of the skills and experience of such nominee. We have also included a chart that provides a skills assessment for the full Board.

 

 

Voting Standard

Each director nominee stands for election every year. Except in a contested election, each director will be elected only if he or she receives more votes “for” than votes “against.” As set forth in the Company’s Corporate Governance Guidelines, any director nominee who is not elected by the vote required and who is an incumbent director must promptly tender his or her resignation to the Board for consideration. The Nominating, Governance and Corporate Responsibility Committee will then make a recommendation to the Board as to whether to accept or reject the tendered resignation, or whether other action is recommended. The Board will act on the tendered resignation within 90 days and will promptly disclose its decision and rationale as to whether to accept the resignation or the reasons for rejecting the resignation. If a director’s resignation is accepted by the Board, or if a nominee for director is not elected and is not an incumbent director, the Board may fill the resulting vacancy or decrease the size of the Board.

 

10

	PROPOSAL 1 – ELECTION OF DIRECTORS

 

NOMINEES FOR DIRECTOR

 

MARY L. BAGLIVO		Ms. Baglivo is the chief executive officer of the Baglivo Group, a strategy consulting company. Previously, she was the vice chancellor of communications and marketing for Rutgers University from 2017 to 2018 and was the vice president for global marketing and chief marketing officer for Northwestern University from 2013 to 2017. Before that, she was a partner with Brand Value Advisors, a strategic brand and digital marketing advisory firm. She also previously served as chair and chief executive officer, the Americas at Saatchi & Saatchi Worldwide from 2008 to 2013, and chief executive officer, New York from 2004 to 2008. Prior to joining Saatchi & Saatchi, she was president of Arnold Worldwide from 2002 to 2004 and chief executive officer of Panoramic Communications from 2001 to 2002. She currently serves on the board of directors of Ruth’s Hospitality Group. Ms. Baglivo previously served on the board of directors of PVH Corp.   Skills and Expertise:   •  in-depth global marketing, advertising and consumer branding experience   •  strategic planning expertise   •  extensive business and leadership experience of large complex companies, including as chair and CEO of the Americas at Saatchi & Saatchi Worldwide   •  understanding of growth strategies in worldwide branded businesses   •  environmental, social and governance expertise   •  served as a member of a public company corporate social responsibility committee which has engaged in a wide range of apparel industry leading initiatives in the fields of workers’ rights, environmental issues, animal welfare, and diversity, equity, accessibility and inclusion
Age: 64  Director since: 2013  Independent
Committees:  Culture and Compensation     (Chair)  Nominating, Governance     and Corporate     Responsibility
Public Boards:  Ruth’s Hospitality Group
HERMAN E. BULLS		Mr. Bulls currently serves as vice chairman, Americas, and as an international director at Jones Lang LaSalle. During over 32 years at Jones Lang LaSalle, Mr. Bulls has worked in the areas of development, investment management, asset management, facilities operations, marketing and business development/retention and founded the company’s public institutions business unit. Mr. Bulls previously co-founded and served as president and CEO of Bulls Capital Partners, a Fannie Mae multi-family financing company, and founded Bulls Advisory Group, LLC, a management and real estate advisory firm. Prior to joining Jones Lang LaSalle, Mr. Bulls completed almost 12 years of active duty service with the United States Army, retiring as a Colonel in the U.S. Army Reserves in 2008. Mr. Bulls is a member of the Executive Leadership Council, Leadership Washington, the Real Estate Executive Council and the Real Estate Advisory Committee for New York State Teachers’ Retirement System. He is also on the Board of Governors of the American Red Cross. Mr. Bulls is a founding member and served as the inaugural president of the African American Real Estate Professionals of Washington, D.C. and serves as vice chairman of the University Development and Innovation Council of the Urban Land Institute. He currently serves as a director of American Campus Communities, Comfort Systems, USA, and Fluence Energy, Inc. where he serves as chairman, as well as USAA and Collegis Education, both private companies. Mr. Bulls previously served on the boards of Tyco International, Exelis, Inc., and Computer Sciences Corporation.   Skills and Expertise:   •  real estate industry veteran with over 32 years of experience at Jones Lang LaSalle, a real estate services and investment management company   •  extensive experience in the areas of real estate development, investment management, asset management and operations   •  board oversight expertise, serving on the boards and committees of three other public companies and prior board service at other companies
Age: 66  Director since: 2021  Independent
Committees:  Nominating, Governance     and Corporate     Responsibility
Public Boards:  American Campus     Communities  Comfort Systems, USA  Fluence Energy

 

11

									PROPOSAL 1 – ELECTION OF DIRECTORS

 

MARY HOGAN PREUSSE		Ms. Hogan Preusse is the founder and principal of Sturgis Partners, an advisory firm. She was formerly at APG Asset Management U.S., the New York subsidiary of the Netherlands-based firm from 2000 to 2017. At APG she served as the managing director and co-head of Americas Real Estate where she was responsible for managing all of APG’s public real estate investments in the Americas. She also served on the executive board of APG Asset Management US from 2008 to 2017. Prior to joining APG, she spent eight years as a sell side analyst covering the REIT sector, and began her career at Merrill Lynch as an investment banking analyst. Her industry memberships include the International Council of Shopping Centers and NAREIT, where she serves as a member of the Advisory Board of Governors and is co-chair of the Dividends Through Diversity, Equity & Inclusion Steering Committee. She is also a member of the board of directors of Digital Realty Trust, Kimco Realty and Realty Income. Ms. Hogan Preusse is a member of the Bowdoin College board of trustees and a member of the Real Estate and Infrastructure Advisory Board of the Carey Business School at Johns Hopkins University.   Skills and Expertise:   •  over 30 years of real estate experience, including managing a $13 billion portfolio in real estate investment trusts and other public real estate securities   •  brings valuable investment focus to the Board   •  recognized expertise and leadership in the real estate sector and in 2015 received NAREIT’s E. Lawrence Miller Industry Achievement Award for her contributions to the industry   •  board oversight expertise, serving on the boards of three other public real estate companies   •  founder and member of the steering committee of Dividends Through Diversity, Equity & Inclusion, NAREIT’s diversity and inclusion initiative   •  audit committee financial expert
Age: 53  Director since: 2017  Independent
Committees:  Audit  Culture and Compensation
Public Boards:  Digital Realty Trust  Kimco Realty  Realty Income

 

 

 

 

RICHARD E. MARRIOTT		Mr. Marriott is our chairman of the board. He is also chairman of the board of First Media Corporation, the chairman and a director of the J. Willard Marriott and Alice S. Marriott Foundation, a director of the Richard E. and Nancy P. Marriott Foundation, and the president and a trustee of the Marriott Foundation for People with Disabilities. Mr. Marriott serves on the Federal City Council and the National Advisory Council of Brigham Young University. He previously served on the board of Marriott International, Inc. and is a past president of the National Restaurant Association and a past director of the Polynesian Cultural Center.   Skills and Expertise:   •  comprehensive knowledge of the Company and unique perspective and insight into the hospitality industry based on a 56-year history with the Company and Marriott International   •  during his tenure, Mr. Marriott has served in various executive capacities and has served as our Chairman since 1993   •  long history of successful management of the Company
Chairman of the Board
Age: 83  Director since: 1993

 

12

	PROPOSAL 1 – ELECTION OF DIRECTORS

 

WALTER C. RAKOWICH		Mr. Rakowich is the former chief executive officer of Prologis, where he worked for 18 years before retiring in December 2012. Mr. Rakowich served as chief executive officer of Prologis from November 2008 through June 2011, when Prologis merged with AMB Property Corporation. He then assumed the role of co-chief executive officer and served as a member of the Prologis board of directors up until December 2012 to manage the integration of the two companies. Prior to his service as chief executive officer, Mr. Rakowich held a number of senior management positions while at Prologis, including as president and chief operating officer from 2005 to 2008, and managing director and chief financial officer from 1998 to 2005. Prior to joining Prologis, Mr. Rakowich was a partner with real estate provider Trammell Crow Company, where he worked for nine years; before that he was a senior audit and tax consultant for Pricewaterhouse. Mr. Rakowich is also a director of Iron Mountain Incorporated and Ventas, Inc. He is also on the board of trustees of The Pennsylvania State University and is on the board of Colorado UpLift.   Skills and Expertise: •  significant real estate and financial experience, including extensive knowledge of the issues facing large international real estate investment trusts   •  brings valuable experience to the Board with respect to risk assessment and leadership development   •  as president and CEO of Prologis, had extensive involvement in the creation and oversight of Prologis’ ESG initiatives   •  extensive experience in accounting and financial reporting through his time at Pricewaterhouse   •  audit committee financial expert
Age: 64  Director since: 2012  Independent
Committees:  Audit (Chair)  Nominating, Governance     and Corporate     Responsibility
Public Boards:  Iron Mountain  Ventas

 

	JAMES F. RISOLEO			Mr. Risoleo became our president and chief executive officer in January 2017. He joined our Company in 1996 as senior vice president for acquisitions and development, and was appointed executive vice president and chief investment officer in 2000. In 2012, he became executive vice president and managing director of the Company’s European business activities and, in 2015, Mr. Risoleo assumed leadership for all of the Company’s west coast investment activities in addition to Europe. Prior to joining our Company, Mr. Risoleo was vice president, development at Interstate Hotels Corporation and a senior vice president, commercial real estate at Westinghouse Electric Corporation. Mr. Risoleo serves as a director of Griffin Realty Trust, Inc., a public non-listed REIT, and was previously a director of Cole Office & Industrial REIT prior to its merger into Griffin Realty Trust. He also previously served as the non-executive chairman of Cole Office & Industrial REIT from 2015 to 2018. Mr. Risoleo is a past chairman of NAREIT and currently serves on its executive board. He is also an executive committee member of the American Hotel & Lodging Association, a member of the U.S. Travel Association CEO Roundtable, and as a member of the Real Estate Roundtable. Mr. Risoleo is also a member of the Bar of the State of Pennsylvania.   Skills and Expertise:   •  extensive business, leadership and strategic planning experience   •  significant expertise in finance, equity and capital development, real estate and the hospitality industry   •  over 25 years of domestic and international hotel experience in investment, dispositions, capital budgets and asset management   •  extensive knowledge of the Company as a member of senior management for over 20 years, serving in various roles within the Company and culminating in his current service as CEO
	President and  Chief Executive Officer
	Age: 66  Director since: 2017
	Public Boards:  Griffin Realty Trust

 

13

									PROPOSAL 1 – ELECTION OF DIRECTORS

 

GORDON H. SMITH		Senator Smith served as president and chief executive officer of the National Association of Broadcasters from November 2009 to December 2021. From March to October 2009 he was a senior advisor and resident at the Washington, D.C. office of Covington & Burling LLP as a member of the government affairs and international trade practice groups. In 2008, Senator Smith completed his second term as a United States Senator from the State of Oregon, where he served on the Commerce, Science and Transportation Committee; the Energy and Natural Resources Committee; the Finance Committee; and the Indian Affairs Committee. In addition, he was a ranking member of the Senate Finance Subcommittee on International Trade and Global Competitiveness and for six years chaired the Senate Foreign Relations Subcommittee on European Affairs. Prior to his election to the United States Senate, he directed the operations of Smith Frozen Foods, his family’s frozen food processing business and is currently chairman of the board of Smith Frozen Foods, which is privately held. In 1992, he was elected to the Oregon State Senate, of which he became president in 1995. He also previously practiced law in the States of New Mexico and Arizona.   Skills and Expertise:   •  high-level U.S. government experience and leadership as a United States Senator   •  extensive knowledge of public policy, international affairs and trade and law   •  significant business experience and knowledge of finance, accounting and marketing obtained through his management of Smith Frozen Foods, a leading producer of frozen foods
Age: 69  Director since: 2009    Independent Lead  Director
Committees:  Nominating, Governance     and Corporate     Responsibility (Chair)  Culture and Compensation

 

	A. WILLIAM STEIN			Mr. Stein is the chief executive officer and a director of Digital Realty Trust. Prior to being named chief executive officer in 2014, he served as chief financial officer and chief investment officer. Before joining Digital Realty in 2004, Mr. Stein was with GI Partners, a private equity fund of which Digital Realty was a portfolio company. Past positions include serving as co-head of VentureBank@PNC and Media and Communications Finance at The PNC Financial Services Group; president and chief operating officer of TriNet Corporate Realty Trust (acquired by iStar Financial) and a variety of senior investment and financial management positions with Westinghouse Electric, Westinghouse Financial Services and Duquesne Light Company. Mr. Stein is a past chairman of NAREIT and currently serves on its executive board and as co-chair of the Dividends Through Diversity, Equity & Inclusion CEO Council. He also serves on the board of the Real Estate Roundtable and as a member of the University of Pittsburgh Chancellor’s Global Advisory Council. Mr. Stein is a member of the Bar of the States of Pennsylvania and Florida.   Skills and Expertise:   •  over 30 years of investment, financial and operating management experience   •  in-depth understanding of the real estate industry and the issues facing real estate investment trusts   •  extensive leadership experience including as CEO of Digital Realty Trust, a real estate investment trust focused on data centers, and has overseen a quadrupling of the company’s total enterprise value, as well as its inclusion in the S&P 500 Index   •  serves as co-chair of NAREIT’s Dividends Through Diversity, Equity & Inclusion CEO Council whose mission is to support various ESG initiatives among its members; in addition, he has led Digital Realty Trust’s sustainability initiatives that have resulted in the company winning NAREIT’s Leadership in the Light award for the datacenter category in each of the past five years   •  audit committee financial expert
	Age: 68  Director since: 2017  Independent
	Committees:  Audit  Culture and Compensation
	Public Boards:  Digital Realty Trust

 

14

	PROPOSAL 1 – ELECTION OF DIRECTORS

 

RETIRING DIRECTOR

John B. Morse, Jr. has expressed his intention to not stand for re-election to the Board at the 2022 annual meeting. Mr. Morse’s retirement comes after twenty years of distinguished service as a director. We wish to express our deep appreciation to Mr. Morse for his many years of service to the Company.

 

JOHN B. MORSE, JR.		Mr. Morse served as senior vice president, finance and chief financial officer of The Washington Post Company (now Graham Holdings Company) from November 1989 until his retirement in December 2008. He also served as president of Washington Post Telecommunications, Inc. and Washington Post Productions Inc., both subsidiaries of The Washington Post Company. Prior to joining The Washington Post Company, Mr. Morse was a partner at PricewaterhouseCoopers LLP. Mr. Morse is the chairman and lead independent director of AES Corporation. He previously served on the board of HSN, Inc. He is a former trustee and president emeritus of the College Foundation of the University of Virginia and a former director and treasurer of Greater Naples Leadership.
Age: 75  Director since: 2003  Independent

 

15

									PROPOSAL 1 – ELECTION OF DIRECTORS

 

Summary of 2022 Director Qualifications and Experience

The Nominating, Governance and Corporate Responsibility Committee and the full Board believe a complementary mix of diverse skills, attributes and experiences will best serve the Company and its stockholders. The director skills summary that appears below, and the related narrative for each director nominee, highlight the specific experience, qualifications, attributes and skills for each director that the Board considers important in determining whether each nominee should serve on the Board in light of the Company’s business, structure, and strategic direction. The absence of a “•” for a particular skill does not mean the director in question is unable to contribute to the decision-making process in that area.

 

 

 

16

	CORPORATE GOVERNANCE AND BOARD MATTERS

 

CORPORATE GOVERNANCE AND BOARD MATTERS

Corporate Governance and Code of Business Conduct and Ethics

Our Board of Directors oversees the management of the Company and its business for the benefit of our stockholders in order to enhance stockholder value over the long-term. The Board has adopted corporate governance guidelines, which are reviewed annually and periodically amended as the Board enhances the Company’s corporate governance practices. The Board has also adopted a code of business conduct and ethics that applies to all directors, officers and employees of the Company. The purpose of the code of conduct is to promote honest and ethical conduct; full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and compliance with all applicable rules and regulations that apply to the Company and its officers, employees and directors. The corporate governance guidelines, code of conduct and other documents describing the Company’s corporate governance practices can be accessed in the “Governance” section of the Company’s website at www.hosthotels.com. Copies of these documents are also available in print to stockholders upon request.

Governance is a continuing focus of the Company. Over the years, the Board has implemented numerous corporate governance enhancements to strengthen the rights of stockholders and to serve their long-term interests. These have included:

 

u   added proxy access;   u   adopted Charter amendment providing stockholders concurrent power to amend the Company’s Bylaws;   u   adopted Charter amendment reducing threshold needed for stockholders to call a special meeting;   u   adopted a majority vote standard for uncontested director elections, coupled with a director resignation policy;   u   declassified the Board so that all directors are elected annually;   u   allowed the Company’s rights plan to expire;   u   opted out of the Maryland Control Share Acquisition Act;		u   opted out of the provisions of the Maryland Unsolicited Takeovers Act that permit the Board to classify itself without a stockholder vote;   u    supermajority of independent directors;   u    executive sessions of the Board without management present;   u    proactive and productive stockholder engagement policy;   u    independent lead director (selected by the directors); and   u    annual self-assessment to review the Board’s effectiveness.

Independence of Directors

It is the Board’s policy that a majority of the directors of the Company be independent. To be considered independent, a director must not have a relationship with the Company that could interfere with the exercise of the director’s independent judgment in carrying out the responsibilities of a director. To be considered independent, directors must also be “independent” within the meaning of The Nasdaq Stock Market’s requirements. To assist the Board in determining whether a director is independent, the Board has adopted standards for independence set forth in the Company’s corporate governance guidelines.

In determining the independence of our directors, the Board considers all relevant facts and circumstances, including, but not limited to, whether the director receives any compensation or other fees from the Company, other than the fees described under “Director Compensation”, whether the director, or an organization with which the director is affiliated or their immediate family members, has entered into any commercial, consulting, or similar contracts with the Company, and any charitable contributions the Company made to non-profit organizations with which a director nominee or their immediate family members are associated. Consistent with these considerations, the Nominating, Governance and Corporate Responsibility Committee reviewed directors’ responses to a questionnaire asking about their relationships with the Company, as well as those of their immediate family members, and other potential conflicts of interest. The Committee determined that each of the directors currently serving on the Board and each director nominee other than Mr. Marriott and Mr. Risoleo are independent and recommended to the Board that Messrs. Bulls, Morse, Rakowich, Smith and Stein and Mmes. Baglivo and Hogan

 

17

									CORPORATE GOVERNANCE AND BOARD MATTERS

 

Preusse have been determined to be independent. The Board approved the determination that each of the directors currently serving on the Board and each director nominees is independent other than Mr. Marriott and Mr. Risoleo. Messrs. Marriott and Risoleo are not independent because they are Company employees.

Board Leadership

Our governance framework provides the Board with the flexibility to select the appropriate leadership structure for the Company. This will be driven by the needs of the Company as well as the particular makeup of the Board at any point in time. We have historically had a leadership structure that includes a Chairman of the Board, who is annually elected, a separate Chief Executive Officer, and an independent director serving as Lead Director. The CEO is responsible for setting the strategic direction of the Company and for the day-to-day leadership and management of the Company, while the Chairman of the Board provides guidance to the CEO, directs the agenda for Board meetings, presides over meetings of the full Board and participates in stakeholder outreach. This structure reflects the continued strong leadership, industry experience and energy brought to the Board by Richard E. Marriott, who has been elected and has led the Company as Chair since its split with Marriott International in 1993. His over 50-year career at the Company provides him with a unique perspective and wealth of knowledge that is invaluable to the Board.

The Board also has the position of Lead Director who provides additional independent oversight of senior management and board matters in our current structure where the Chairman and CEO are not independent directors. The role of a Lead Director is meant to facilitate communication among the directors or between any of them and the Chairman and CEO. In addition, directors are encouraged to continue to communicate among themselves and directly with the Chairman and CEO, and under our corporate governance guidelines each independent director may call an executive session. Upon recommendation of the Nominating, Governance and Corporate Responsibility Committee, our Lead Director is elected annually from among the independent directors. Gordon H. Smith currently serves as Lead Director.

The duties of the Lead Director include:

 

•

presiding at executive sessions of the independent directors of the Board, and briefing the Chairman and CEO, as needed, following such sessions;

 

•

presiding at meetings of the Board where the Chairman is not present;

 

•

convening and acting as chair of meetings of the independent directors;

 

•

providing input on Board agendas and meeting schedules;

 

•

providing feedback to and consulting with the Chairman and CEO on any concerns of the Board; and

 

•

serving as the director to whom correspondence may be directed on behalf of the non-management directors as a group, as described below under “Communications with Directors.”

Another component of our leadership structure is the active role played by our independent directors in overseeing the Company’s business, both at the Board and Committee level. Six of eight of our director nominees are independent within the meaning of the rules of The Nasdaq Stock Market. Under our corporate governance guidelines, non-management directors meet in executive session without the presence of the CEO, the Chairman of the Board or other executive officers. The purpose of these sessions is to promote open discussions among the independent directors concerning the business and affairs of the Company, as well as matters concerning management, without any member of management present.

 

The Board believes that the separate roles of the Chairman and CEO, coupled with an independent Lead Director, the use of regular executive sessions of the non-management directors, and the substantial majority of independent directors comprising the Board, enables the Board to maintain effective oversight of the Company.

 

18

	CORPORATE GOVERNANCE AND BOARD MATTERS

 

At least annually, the Nominating, Governance and Corporate Responsibility Committee discusses the structure and composition of the Board of Directors and reviews the current leadership structure. This is discussed with the full Board as part of the Board’s annual evaluation to assess its effectiveness and takes into account our current business plans and long-term strategy as well as the particular makeup of the Board at that time.

Communications with Directors

The Company invites stockholders and other interested parties to communicate any concerns they may have about the Company directly and confidentially with any of the full Board of Directors, the Lead Director or the non-management directors as a group by writing to:

 

		Host Hotels & Resorts, Inc.
		Attention: Secretary
		4747 Bethesda Avenue, Suite 1300
		Bethesda, MD 20814

The Secretary will review and forward all stockholder communications to the intended recipient except those unrelated to the duties and responsibilities of the Board, such as junk mail and mass mailings, resumes and other forms of job inquiries, surveys, new business suggestions, business solicitations or advertisements. In addition, material that is hostile, threatening, illegal or similarly unsuitable or outside the scope of Board matters or duplicative of other communications previously forwarded to the recipient will also be excluded.

Stockholder Outreach and Engagement

Why We Engage

Our relationship with our stockholders is an important part of our corporate governance program. Maintaining a robust stockholder engagement program helps us:

 

Determine which issues are important to our stockholders and provide information relevant to those issues

Provide transparency into our business, ESG practices and compensation, as well as set expectations for our performance

Identify emerging issues that may affect our strategies, ESG, compensation practices or operations

Obtain valuable feedback on stockholder perceptions of our business and on lodging and industry fundamentals

How We Engage

Our stockholder and investor outreach includes investor road shows, analyst and investor meetings, investor days, property tours, and industry conferences, most of which were conducted virtually in 2021 due to the continuing effects of the COVID-19 pandemic.

We also communicate with stockholders and other key stakeholders through various channels, including our annual report and SEC filings, proxy statement, news releases, Corporate Responsibility Report, investor presentations, correspondence, and our website. Our quarterly earnings conference calls are open to the public. These calls are available in real time with archived webcasts and transcripts available on our website for a period of time.

 

19

									CORPORATE GOVERNANCE AND BOARD MATTERS

 

Investor Relations Outreach   Our senior management team, including our CEO, CFO and our Investor Relations team, maintain regular contact with a broad base of investors through quarterly earnings calls, individual meetings, conferences and other communication channels, to address questions and understand concerns. In 2021, our investor relations team met with investors representing 267 institutional investment management firms, totaling 69% of the shares held by the Company’s top 100 active stockholders (excludes holdings of passive investors such as index funds).						ESG-Focused Outreach   In 2021, we continued to expand our ESG-focused outreach to build meaningful relationships with our stockholders over time. Our ESG-focused outreach is led by a cross-functional senior leadership team that includes members of our Legal, Human Resources, Sustainability, Development, Design and Construction and Investor Relations functions. We contacted investors representing approximately 79% of our outstanding shares (including both actively and passively managed shares). We engaged with 20 investors representing approximately 54% of our stockholder base.

Stockholder Engagement and Response Process

We are committed to regular stockholder engagement so that the Board remains informed of stockholders’ perspectives and can incorporate the feedback into Board discussions and decisions. The below graphic provides an overview of our annual engagement process.

 

 

 

20

	CORPORATE GOVERNANCE AND BOARD MATTERS

 

As mentioned above, in 2021 we continued to expand our ESG-focused engagement efforts. This engagement helped validate that our stockholders continue to be broadly supportive of Host’s governance and corporate responsibility practices and the overall philosophy, objectives, and design of our compensation program. While most investors requested meetings, several investors indicated that after reviewing our disclosure documents they did not require a meeting or have any questions or concerns. As a part of this engagement, stockholders also shared their perspectives on areas of disclosures to consider expanding in order to provide information that would be most helpful in their respective analyses of Host. Based on the feedback from our stockholders the Board took action to be directly responsive. A summary of the feedback from engagement and our response is below:

 

What We Heard		How We Responded
Enhance Operational Disclosure and Execute on Objectives:
Frequent business updates throughout the market downturn		We continued to provide frequent updates on the business impact of the COVID-19 pandemic through SEC filings, press releases and updated investor presentations in order to address investors’ desire for current information on hotel operations.
Metrics that demonstrate the Company’s ability to withstand prolonged business disruption		We continued to provide an expense reduction ratio to show year-over-year reductions in hotel-level fixed and variable expenses, cash burn and hotel level operating profit to provide transparency around cash outflows, hotel operating trends and operating leverage of the business.
Prudent balance sheet management		We maintained our investment grade rating on our senior long-term unsecured notes, issued $450 million of 2.90% senior notes due in 2031 and redeemed 100% of $400 million principal amount of 3.75% senior notes due in 2023, thereby extending the Company’s weighted average debt maturity, lowering its weighted average interest rate and further augmenting its cash position.
Recycle capital into assets that we believe will improve the quality and EBITDA growth profile of portfolio		We invested $1.6 billion in early-cycle acquisitions across seven hotels and two golf courses and disposed of nearly $750 million across six assets. In addition, we provided detailed performance metrics in our investor presentations to support our capital allocation efforts.
Demonstrate progress against our three strategic objectives: (1) redefining the hotel operating model, (2) gaining market share at renovated hotels, and (3) strategically allocating capital		In conjunction with our operators, we have taken initial steps toward achieving 50% to 60% of the potential long-term cost reductions based on pro forma 2019 revenues, the Marriott Transformational Capital Program was 85% complete at year end 2021, and we have strategically allocated capital to various development projects with an expected completion by the fourth quarter of 2022.
Highlight Robust ESG Governance Structure and Continue to Enhance ESG Disclosure:
Continue to expand annual sustainability disclosure		We provide a robust Corporate Responsibility Report on an annual basis and strive to improve our disclosures on an ongoing basis. In our most recent report, we included Task Force on Climate-related Financial Disclosure (TCFD) and Sustainability Accounting Standards Board (SASB), now the Value Reporting Foundation, disclosures and have refreshed our corporate responsibility strategy, centered around a commitment to responsible investment.   Our Corporate Responsibility Report is aligned with the Global Reporting Initiative (GRI) standards for sustainability related disclosures and the UN Sustainable Development Goals. In 2021, the Company was named to Dow Jones Sustainability World Index (DJSI World) for the third year in a row and

 

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What We Heard		How We Responded
Highlight Robust ESG Governance Structure and Continue to Enhance ESG Disclosure:
		DJSI North America index for the fifth consecutive year, and was recognized as a climate change leader by CDP for the ninth consecutive year.   The Company’s annual Corporate Responsibility Report is available on our website at www.hosthotels.com.
Commitment to diversity & inclusion, and enhanced disclosure at the board and workforce level		We continue to prioritize diversity and inclusion in our leadership, and have taken steps to ensure our Board of Directors is composed of individuals from a range of ethnicities and backgrounds and reflects gender diversity. The Board of Directors will continue to consider diversity as a key factor under consideration in future refreshment efforts. Additionally, we provide detailed disclosure regarding the gender and race/ethnicity of each current director.   We have also formally incorporated diversity and inclusion, human capital management, and sustainability into our Board committee responsibilities. In 2021, we renamed our Nominating and Corporate Governance Committee to “Nominating, Governance and Corporate Responsibility Committee,” and our Compensation Policy Committee to “Culture and Compensation Committee.” The names were changed to reflect the increasing roles and commitment by the two committees to providing oversight of topics such as diversity and inclusion, human capital management, sustainability, social responsibility, culture and employee engagement. Both of these committees have charters that formally incorporate these committee functions which we view as critical to the Company’s success.   We have also enhanced the breadth of our demographics disclosure in our Corporate Responsibility Report (available on our website at www.hosthotels.com), and plan to disclose our EEO-1 data by the end of 2022.   As part of our commitment to advancing diversity and inclusion, we have identified three 2025 social targets, including training 100% of employees on unconscious biases, conducting at least two engagement surveys, and including at least two women and two persons of color in each initial candidate pool for externally sourced department head and above positions.   In 2021, we formally launched our diversity and inclusion program with several robust educational events, as well as celebrations to appreciate and recognize our diverse employees and communities—including the launch of a new discussion platform for employees to engage in open and honest dialogue on a variety of topics related to diversity, equity, inclusion and belonging. We also formally launched the Women’s Inspirational Network (WIN), a new employee resource group for women and male allies intended to foster development and networking opportunities, and expanded our Supplier Excellence Survey to include more targeted questions on diversity.
Provide additional color on investments in sustainability-related projects		We have continued to expand our focus on achieving Leadership in Energy and Environmental Design (LEED) certifications across a number of our properties and developments. To date we have 7 LEED-certified hotels and an additional 15 LEED projects across 12 properties in our pipeline. We are committed to a sustainability-driven investment approach to mitigate environmental impacts and climate risks in our portfolio.

 

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What We Heard		How We Responded
Update Compensation Program Design:
Continue to shift the LTIP structure towards quantitative metrics with three-year performance periods		As disclosed in last year’s proxy, in response to stockholder feedback, we have redesigned the performance-based portion of our long-term incentive program for 2021 to be 100% based on quantitative metrics.   The long-term incentive program was redesigned to shift from an annual metric of corporate strategic objective performance to three-year Adjusted EBITDAre performance. This shift to three-year vesting for the Adjusted EBITDAre metric will occur in 2022.

The Board’s Role in Risk Oversight

Our Board of Directors has overall responsibility for risk oversight with a focus on the most significant risks facing the Company. Reviews of certain risk areas are conducted by the relevant committees that report on their deliberations to the Board. Risks are considered in almost all business decisions and as part of the Company’s business strategy, and oversight was especially critical as the pandemic continue to create challenges for the lodging industry and the Company

The Board recognizes that it is neither possible nor prudent to eliminate all risk. Indeed, appropriate risk-taking is essential for the Company to be competitive and to achieve its business objectives. The chart below summarizes the primary areas of risk oversight for the Board and its committees.

 

Risk Oversight

 

Board/Committee		Primary Areas of Risk Oversight
Full Board		•  Responsible for oversight of strategic, financial and execution risks and exposures associated with the annual business plan and strategic plan;   •  Reviews major litigation and regulatory exposures, environmental and other current matters that may present material risk to the Company’s operations, plans, prospects or reputation;   •  Reviews risks associated with investments, acquisitions and divestitures, capital market and joint ventures; and   •  Responsible for oversight and review of risks associated with senior management succession planning.
Audit Committee		•  Discusses guidelines and policies with respect to the Company’s risk assessment and risk management processes;   •  Responsible for risks associated with financial matters, particularly the Company’s financial statements, tax matters, accounting and system of internal controls, and disclosure;   •  Responsible for oversight and review of cybersecurity related risks;   •  Reviews risks and exposures associated with derivatives and hedging strategy; and   •  Responsible for oversight and review of risks associated with the independence, qualifications and performance of the Company’s outside auditor and internal auditors and the Company’s compliance with legal and regulatory requirements.

 

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Board/Committee		Primary Areas of Risk Oversight
Culture and Compensation Committee		•  Responsible for oversight of exposures associated with compensation of the Company’s officers, stock ownership and incentive-compensation plans, executive retention and succession planning;   •  The Committee also considers risks associated with employment related matters including diversity and inclusion, employee demographics, corporate culture and internal pay equity; and   •  As discussed in more detail in the Compensation Discussion & Analysis, the Committee reviews and approves compensation programs with features that are intended to mitigate risk without diminishing the incentive nature of compensation.
Nominating, Governance and Corporate Responsibility Committee		•  Responsible for oversight of risks and exposures relating to the identification of qualified candidates to become Board members; continuing oversight of Board composition;   •  Responsible for oversight of risks and exposures relating to the structure, membership and charters of the Board committees;   •  Responsible for oversight of risks and exposures relating to the compensation for independent directors; oversight of the evaluation of the Board and management; and   •  Responsible for oversight of the Company’s policies, programs and practices on corporate responsibility and sustainability, including environmental, social, human capital and other matters.

The Board and its committees implement their oversight responsibilities through management reporting processes that are designed to provide visibility to the Board about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include strategic, operating, financial, legal, compliance and reputational risk. Management communicates routinely with the Board, its committees and individual directors on the significant risks identified through this process and how they are being managed.

Conduct and Culture

Our Board, the Culture and Compensation Committee and other Board committies play a key role in oversight of our culture, including diversity and inclusion, setting the “tone at the top” and holding management accountable for its maintenance of high ethical standards and effective policies and practices to protect our reputation, hotel properties and business. Our Board and its committees do this in a number of ways, including by:

 

•

focusing on the character, integrity, and qualifications of their respective members, and their respective leadership structures and composition;

 

•

overseeing management’s identification, measurement, monitoring, and control of our material risks, including compliance risk and conduct risk;

 

•

regularly receiving briefings from senior management on matters relating to compliance and business conduct risk;

 

•

holding management accountable for the timely escalation of issues for review with the Board and its committees;

 

•

overseeing our incentive plan design and governance processes to provide for an appropriate balance of risk and compensation outcomes; and

 

•

reviewing a “Culture Dashboard” on a quarterly basis which includes the demographics of the Company’s workforce and cultural and engagement initiatives.

 

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Board and Management Approach to Sustainability

 

Through a well-established framework and cross-functional Advisory Committee with representatives from across the organization, the Company continues to incorporate sustainability into its core strategy—reflecting our belief that sustainability is essential to long-term growth. We received numerous recognitions for our Corporate Responsibility program in 2021, which are highlighted in the inside front cover of this proxy statement. We also believe in transparency, and report on our sustainability efforts in an annual Corporate Responsibility Report, which is available on our website at www.hosthoteIs.com.   ESG Oversight   The Board recognizes the importance of our sustainability initiatives and the need to provide effective oversight of those initiatives. Oversight of the Company’s policies, programs and strategies related to environmental, corporate and social responsibility matters, including human rights, human capital management, sustainability and other social and public matters, is part of the charter for the Nominating, Governance and Corporate Responsibility Committee.

The Company’s executive vice president, human resources and corporate responsibility and executive vice president, development, design & construction provide updates to the Committee, which typically meets 3 to 4 times per year. On an annual basis, the Corporate Responsibility team presents progress against ESG targets to our CEO. Additionally, our CEO chairs the Company’s Capital Expenditure Committee and Investment Committee, which meets regularly to review and approve significant investments including those identified to support our 2025 environmental targets and responsible investment strategies.

ESG Executive Steering Committee

The Company’s ESG Executive Steering Committee provides oversight of the Company’s corporate responsibility strategy and engagement with the Board, company leadership and external stakeholders. Encompassing our environmental, social and governance focus areas, the Company’s executive vice president, human resources and corporate responsibility, and executive vice president, development, design & construction, serve as the executive sponsors, with the Company’s executive vice president, general counsel and senior vice president, investor relations also serving on the Executive Steering Committee.

Corporate Responsibility Advisory Committee

To support our Board and CEO, the Corporate Responsibility team and ESG Executive Steering Committee formally engage and convene a cross-functional Corporate Responsibility Advisory Committee representing nearly every department at the Company. Several Advisory Committee members also serve on the Company’s Capital Expenditure Committee and Investment Committee.

 

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We have also established distinct responsibilities across the Company’s functional areas to execute on our responsible investment strategies. These cross-functional responsibilities include asset-level sustainability assessments, 10-year capital plans, investment decisions, return on investment validation, project management, utility management and stakeholder engagement.

Diversity and Inclusion

 

 

The Company is committed to cultivating a diverse and inclusive environment that supports the development and advancement of all. We are committed to fostering a space where we listen, learn and act; treat each other as equals; show support and respect to each other and our partners; and encourage freedom of expression and understanding of differences. We appreciate that our employees’ unique viewpoints, diverse backgrounds and experiences working together lead us to better business outcomes and we attribute this, in part, to our ongoing success.

 

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The Company’s CEO has joined the CEO Action for Diversity & Inclusion initiative and personally pledged to continue to advance diversity and inclusion within our workplace. The scope of this pledge supports equity for all, including ethnically or racially diverse persons, the LGBTQ community, people with different abilities, veterans and women.

 

FOUR GOALS: CEO PLEDGE FOR ACTION ON DIVERSITY & INCLUSION
Make the workplace a trusting place to have complex, and sometimes difficult, conversations		Implement and expand unconscious bias education		Share best–and even unsuccessful–practices		Have Board oversight for the Company’s action plans

In 2020, we initiated our diversity and inclusion (D&I) programmatic efforts to begin exploring how to formally incorporate our aspirations in this area into our current people programs, culture workstreams, corporate responsibility endeavors and our employee training while also establishing and expanding on a framework for how we look at diversity and inclusion at Host and in our communities. As one of the first steps to inform Host’s long-term commitment to diversity and inclusion, we conducted a series of exercises to both listen and learn, including interviews with senior leadership and employee focus groups. We have also introduced the concept of unconscious bias via an introductory online training module with 100% employee participation. In 2021, we formally launched our diversity and inclusion program with several robust educational events, as well as celebrations to appreciate and recognize our diverse employees and communities—including the launch of a new discussion platform for employees to engage in open and honest dialogue on a variety of diversity and inclusion topics related to diversity, equity, inclusion and belonging. We also launched a new employee resource group for women and male allies within Host to foster development and networking opportunities. Additionally, we have established partnerships so that we can more directly support our Black and Brown communities and are continuing to enhance our holistic and integrated approach to charitable giving to further our support of underserved, at-risk and disadvantaged communities.

Succession Planning

The Board is actively engaged in executive talent management and succession planning. The Board reviews the Company’s “people strategy” in support of its business strategy at least annually and receives regular updates on employee engagement, diversity and retention matters. This includes a detailed discussion of the Company’s leadership bench and succession plans with a focus on key positions at the senior officer level. High potential leaders are given exposure and visibility to Board members through formal presentations and informal events.

Under the oversight of the Board, the Company’s CEO succession planning strategies have been successfully managed and implemented. When seeking a successor CEO, the Board has historically focused on internal candidates, drawing on the Company’s deep bench strength. The Company’s past three CEO’s, over a span of almost 20 years, have all come from within the organization. The Company follows the same approach with respect to other senior management positions. Both our chief financial officer, Sourav Ghosh, and corporate controller, Joseph Ottinger, were internal candidates who had each been with the Company for over 10 years and were promoted into their new roles effective September 1, 2020 and January 1, 2021, respectively. In addition, our current head of asset management, Michael Rock, senior vice president, asset management, was also an internal candidate who was promoted to that role effective March 15, 2021 after initially joining the Company in 2013.

Political Contributions Policy and Trade Association Memberships

Under the Company’s longstanding policy, Company funds may not be used to contribute to candidates, political party committees, or political action committees. Company funds also may not be used to make direct independent expenditures to support or oppose political campaigns, to contribute to “social welfare” organizations organized under Section 501(c)(4) of the U.S. Internal Revenue Code or organizations organized under Section 527 of the Internal Revenue Code, or to support ballot measure committees. The Company does not have a political action committee.

 

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The Company believes that participation in the public policy process is an important and essential means of enhancing stockholder value. To help us achieve this objective, the Company belongs to a number of trade associations (organized under Section 501(c)(6) of the Internal Revenue Code), which allows us to network, build business skills, advance our public agenda and related business goals and monitor industry policies and trends. Company participation in trade associations, including membership on a trade association board, does not mean that the Company agrees with every position a trade association takes on an issue. In fact, from time to time our positions may differ from those of the trade associations of which we are members.

The Company makes payments to these associations, including membership fees and dues. Pursuant to the Company’s code of business conduct and ethics, the Company’s legal department oversees compliance with the Company’s policy on political contributions. The Nominating, Governance and Corporate Responsibility Committee discusses the Company’s political spending policies and disclosures. The chart below lists organizations receiving dues and other contributions from the Company totaling $25,000 or more between 2021 and 2017. Based on each organization’s records, we have listed below the portion of Company dues and other amounts that are used by each organization for lobbying.

Trade Association Memberships

 

		2021										2020										2019
U.S. Trade Association		Company Dues and Contributions				Lobbying % (1)		Company Dues Allocated to Lobbying				Company Dues and Contributions				Lobbying % (1)		Company Dues Allocated to Lobbying				Company Dues and Contributions				Lobbying % (1)		Company Dues Allocated to Lobbying
National Association of Real Estate Investment Trusts			$140,593			25			$35,148				$142,511			25			$35,628				$139,928			20			$27,986
US Travel Association			74,600			55			41,030				78,065			36			28,103				77,805			36			28,010
Real Estate Roundtable			35,000			65			22,750				35,000			65			22,750				35,000			65			22,750
The Real Estate Board of New York			0			0			0				0			0			0				0			0			0
American Hotel & Lodging Association (3)			0			0			0				80			18			14				80,570			18			14,503
Federal City Council			0			0			0				0			0			0				25,000			0			0

 

		2018										2017
U.S. Trade Association		Company Dues and Contributions				Lobbying % (1)		Company Dues Allocated to Lobbying				Company Dues and Contributions				Lobbying % (1)		Company Dues Allocated to Lobbying
National Association of Real Estate Investment Trusts			$144,867			20			$28,973				$130,572			20			$26,114
US Travel Association			74,300			20			14,860				72,500			27			19,575
Real Estate Roundtable			35,000			65			22,750				30,000			65			22,750
The Real Estate Board of New York			29,000	(2)		9			2,520				29,000	(2)		9			2,520
American Hotel & Lodging Association (3)			75,608			18			13,609				74,072			36			26,665
Federal City Council			25,000			0			0				50,000			0			0

 

(1)	Lobbying percentages obtained from the respective trade association.

 

(2)	Of this amount, $28,000 was paid in dues and $1,000 was paid in contributions (no contributions were used for lobbying).

 

(3)	In addition to these totals, certain hotels owned by the Company also contribute to the American Hotel & Lodging Association.

 

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	CORPORATE GOVERNANCE AND BOARD MATTERS

 

Meetings and Committees of the Board

 

Each quarter, our Board holds two-day meetings. Committee meetings typically occur on the first day before the Board meeting. In addition to the quarterly meetings, there are other scheduled Board and committee meetings during the year. The Board met nine times in 2021. Throughout the pandemic, our Board has met frequently and regularly to understand the challenges faced by the Company due to the pandemic and to help guide the Company’s response, and received regular updates from the management team. As a result, the Board held more meetings in 2020 and 2021 as compared to prior years. Each director attended at least 75% of the meetings of the Board and of the committees on which the director served. Under the corporate governance guidelines, directors are expected to attend the annual meeting of stockholders, and all directors attended the virtual annual meeting in 2021. Under our corporate governance guidelines, our independent directors meet in executive session without management and did so after each quarterly Board meeting in 2021. Mr. Smith, the Lead Director, presided over the executive sessions of the non-management directors.		Host’s Board of Directors 2021 by the Numbers
				meetings held by the Board of Directors (additional meetings for pandemic oversight)
				times the independent directors met in executive session
				total Board and Committee meetings
				of Board members attended the annual meeting held on May 20, 2021

The Board has three standing committees to assist it in carrying out its responsibilities: the Audit Committee, the Culture and Compensation Committee, and the Nominating, Governance and Corporate Responsibility Committee. The Board has adopted a written charter for each committee, all of which are available on the Company’s website at www.hosthotels.com. Copies of these charters are also available in print to stockholders upon request. See “Attendance and Voting Matters—How can I obtain copies of documents referenced in this proxy statement?” Each committee consists entirely of independent directors in accordance with The Nasdaq Stock Market rules. The composition of each committee, including the designation of committee chairs, is determined annually by the Board, based on recommendations from the Nominating, Governance and Corporate Responsibility Committee. Assignments to committees are made based on a combination of factors, including each individual Board member’s expertise and the needs of the Company. The Board and the Nominating, Governance and Corporate Responsibility Committee consider rotating chair and committee assignments every three to five years, taking into account, among other considerations, the benefits of continuity and experience, the desirability of new perspectives and continual education and engagement for directors, the applicable regulatory and stock exchange requirements, and the appropriate distribution of work. The Board may from time to time appoint other committees as circumstances warrant. Any new committees will have authority and responsibility as delegated by the Board.

 

 

In 2021, we renamed our Nominating and Corporate Governance Committee to “Nominating, Governance and Corporate Responsibility Committee,” and our Compensation Policy Committee to “Culture and Compensation Committee.” The names were changed to reflect the increasing roles and commitment of the two committees in addressing topics such as diversity and inclusion, human capital management, sustainability, social responsibility, culture and employee engagement. Both these committees have charters that formally incorporate these committee functions which we view as critical to the Company’s success.

 

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Audit

 

Members & Meetings		Committee Functions
Walter C. Rakowich (Chair) John B. Morse, Jr. Mary Hogan Preusse A. William Stein   Number of Meetings in 2021: 7		•  Appoints and oversees the independent auditors;   •  Approves the scope of audits and other services to be performed by the independent and internal auditors;   •  Interviews, discusses and approves the selection of the lead audit partner of the independent auditor;   •  Reviews and approves in advance the engagement fees of the outside auditor and all non-audit services and related fees, and assesses whether the performance of non-audit services could impair the independence of the independent auditors;   •  Reviews the work and findings, if any, of the internal auditors;   •  Reviews the results of internal and external audits, the accounting principles applied in financial reporting, and financial and operational controls;   •  Meets with the independent auditors, management representatives and internal auditors;   •  Reviews interim financial statements each quarter before the Company files its Quarterly Report on Form 10-Q with the SEC;   •  Reviews audited financial statements each year before the Company files its Annual Report on Form 10-K with the SEC; and   •  Reviews risk exposures and management policies.

Each member of the Audit Committee, in the business judgment of the Board, meets the qualifications (including independence) and financial expertise requirements of The Nasdaq Stock Market and qualifies as an “audit committee financial expert” within the meaning of SEC rules. Our independent and internal auditors have unrestricted access to the Audit Committee. The Report of the Audit Committee appears later in this proxy statement.

 

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	CORPORATE GOVERNANCE AND BOARD MATTERS

 

Nominating, Governance and Corporate Responsibility

 

Members & Meetings		Committee Functions
Gordon H. Smith (Chair) Mary L. Baglivo Herman E. Bulls Walter C. Rakowich   Number of Meetings in 2021: 4		•  Makes recommendations to the Board on corporate governance matters and is responsible for keeping abreast of corporate governance developments;   •  Oversees the annual evaluation of the Board, its committees and, in conjunction with the Culture and Compensation Committee, the annual evaluation of management;   •  Reviews periodically the compensation and benefits of non-employee directors and makes recommendations to the Board or the Culture and Compensation Committee of any modifications;   •  Reviews the composition—in terms of independence, experience, expertise, skills, diversity and special knowledge—and tenure of the Board and recommends the nomination of Board members and addition of new members, as appropriate;   •  Ensures that the Board maintains its diversity;   •  Oversees the Company’s policies, programs and strategies related to environmental stewardship, responsible investment, social responsibility, corporate citizenship, human rights, human capital management and other social and public matters of significance to the Company;   •  Fulfills an advisory function with respect to a range of matters affecting the Board and its committees, including making recommendations with respect to:   —   selection and rotation of committee chairs and committee assignments; and   —   implementation, compliance and enhancements to the Company’s Code of Business Conduct and Ethics and Corporate Governance Guidelines.

 

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Culture and Compensation

 

Members & Meetings		Committee Functions
Mary L. Baglivo (Chair) Mary Hogan Preusse Gordon H. Smith A. William Stein   Number of Meetings in 2021: 8		•  Oversees compensation policies, plans and benefits for the Company’s employees;   •  Approves the goals, objectives and total target compensation of all executive officers of the Company and approves compensation for department heads and above;   •  Advises our Board on the adoption of policies that govern the Company’s annual compensation and stock ownership plans;   •  Reviews and approves the Company’s goals and objectives relevant to the compensation of the CEO and evaluates the CEO’s performance in light of those goals and objectives;   •  Reviews and advises the Company on compensation trends and peer group practices;   •  Reviews and discusses with the full Board the Company’s succession plans relating to the CEO and other senior management;   •  Reviews periodic reports from management on matters relating to the Company’s personnel appointments and practices and employee engagement surveys;   •  Directs preparation of a report on executive compensation for inclusion in the Company’s annual proxy statement;   •  Reviews a “Culture Dashboard” on a quarterly basis, which includes the demographics of the Company’s workforce and cultural initiatives; and   •  Oversees internal pay equity considerations and diversity and inclusion initiatives.

Role of the Compensation Consultant

Pursuant to its charter, the Culture and Compensation Committee is authorized to engage, retain and terminate any consultant, as well as approve the consultant’s fees, scope of work and other terms of retention. Starting in 2010, the Committee retained Pay Governance LLC as its advisor. Pay Governance advises and consults with the Committee on compensation issues, compensation design and trends, and keeps the Committee apprised of regulatory, legislative, and accounting developments and competitive practices related to executive compensation. The Committee met frequently in 2020 and 2021 to consider the impacts of the pandemic on our business and the role of compensation in motivating the executive team through disruption, discuss peer practices in response to the pandemic and to make decisions to recognize management’s achievements in successfully navigating the pandemic while at the same time taking into account the adverse impact of the pandemic on stockholders and the employees of the Company’s hotel operators. Pay Governance assisted the Committee in this process and provided information on peer practices and trends. For a discussion of the Committee’s deliberations and decisions related to 2021 compensation, see “Compensation Discussion and Analysis—2021 Compensation Results.”

Pay Governance assisted the Committee in the design, structure and implementation of the current executive compensation program, and reviews, at the direction of the Committee, compensation levels, trends and practices at least annually. Pay Governance does not determine the exact amount or form of executive compensation for any executive officers. See “Compensation Discussion and Analysis—Our Compensation Program.” Pay Governance reports directly to the Committee, and representatives of Pay Governance, when requested, attend meetings of the Committee, are available to participate in executive sessions and communicate directly with the Committee Chair

 

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	CORPORATE GOVERNANCE AND BOARD MATTERS

 

or its members outside of meetings. Pay Governance has also served as a consultant retained by the Nominating, Governance and Corporate Responsibility Committee to assist the Committee with its review of the compensation of independent directors. Pay Governance is retained by and conducts its work at the direction and request of, the Board committees. It is not retained by, and does no work directly for, the Company.

In compliance with the disclosure requirements of the SEC regarding the independence of compensation consultants, Pay Governance addressed each of the six independence factors established by the SEC with the Culture and Compensation Committee. Its responses affirmed the independence of Pay Governance on executive compensation matters. Based on this assessment, the Committee determined that the engagement of Pay Governance does not raise any conflicts of interest or similar concerns. The Committee also evaluated the independence of other outside advisors to the Committee, including outside legal counsel, considering the same independence factors and concluded that their work for the Committee does not raise any conflicts of interest.

The Culture and Compensation Committee may delegate any or all of its responsibilities to a subcommittee but did not do so in 2021. The Committee’s Report on Executive Compensation appears later in this proxy statement.

Compensation-Related Risks

The Culture and Compensation Committee oversees all of our compensation policies and practices. Management, at the request of the Committee, has assessed the Company’s compensation programs and has concluded that they do not create risks that are reasonably likely to have a material adverse effect on the Company. This risk assessment process included a review of all material compensation policies and practices, which were discussed with the Committee. The compensation programs of the Company are all centrally designed and centrally administered. The elements of compensation for senior management and upper middle management are also the same: base salary, annual cash incentive awards and long-term incentives. The performance measures for the annual cash incentive awards are (i) Company metrics that are based on an annual business plan and budget reviewed and approved by the Board and (ii) personal performance in support of the annual business plan and budget and Company strategic plan, which tie to measures of long-term success of the Company. The business plan and budget are reviewed at each Board meeting, and the strategic plan is addressed annually. Performance measures for long-term incentives are a key Company financial metric (Adjusted EBITDAre) and total stockholder return measured over a three-year period. The total achievable compensation for the year is capped at the beginning of the performance year throughout our compensation programs. The Committee reviews the compensation of executives and department heads. Further, the Committee relies upon its judgment in determining pay approaches and outcomes. Based on the foregoing, we believe our compensation policies and practices do not create inappropriate or excessive risk-taking.

Culture and Compensation Committee Interlocks and Insider Participation

None of the members of the Culture and Compensation Committee who served during 2021 was, during 2021, an officer or employee of the Company, was formerly an officer of the Company or had any relationship that is required to be disclosed as a transaction with a related person. During 2021, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity that had one or more of its executive officers serving on the Company’s Board or its Culture and Compensation Committee.

 

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									CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

34