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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
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(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0‑11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing
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(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.
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(3) Filing Party:
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(4) Date Filed:
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(1)
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The election of
eight
directors, each to serve until the next annual meeting of our stockholders and until his or her successor is duly elected and qualifies;
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(2)
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The ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018
;
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(3)
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An advisory resolution to approve the Company’s named executive officer compensation for the fiscal year ended
December 31, 2017
, as described in the accompanying Proxy Statement;
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(4)
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The approval of the Amended and Restated Rexford Industrial Realty, Inc. and Rexford Industrial Realty, L.P. 2013 Incentive Award Plan; and
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(5)
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Any other business properly introduced at the Annual Meeting or any postponement or adjournment of the Annual Meeting.
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TABLE OF CONTENTS
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Pages
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GENERAL
|
||
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
|
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INFORMATION ABOUT THE BOARD
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PROPOSAL NO. 1 NOMINEES FOR ELECTION TO THE BOARD
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DIRECTOR COMPENSATION
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BOARD STRUCTURE, LEADERSHIP AND RISK MANAGEMENT
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EXECUTIVE SESSIONS OF NON-MANAGEMENT DIRECTORS
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BOARD MEETINGS
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BOARD COMMITTEES
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AUDIT COMMITTEE REPORT
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CORPORATE GOVERNANCE
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GOVERNANCE DOCUMENTS
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CODE OF BUSINESS CONDUCT AND ETHICS
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ROLE OF THE BOARD IN RISK OVERSIGHT
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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
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COMMUNICATIONS WITH THE BOARD
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NOMINATION PROCESS FOR DIRECTOR CANDIDATES
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AUDIT COMMITTEE FINANCIAL EXPERIENCE
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AUDIT COMMITTEE PRE-APPROVAL POLICY
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
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BOARD ATTENDANCE AT ANNUAL MEETING OF STOCKHOLDERS
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OTHER COMPANY PROPOSALS
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PROPOSAL NO. 2 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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PROPOSAL NO. 3 ADVISORY VOTE ON THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS (“SAY-ON-PAY VOTE”)
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PROPOSAL NO. 4 APPROVAL OF THE AMENDED AND RESTATED REXFORD INDUSTRIAL REALTY, INC. AND REXFORD INDUSTRIAL REALTY, L.P. 2013 INCENTIVE AWARD PLAN
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EXECUTIVE OFFICERS
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COMPENSATION DISCUSSION AND ANALYSIS
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EXECUTIVE COMPENSATION
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COMPENSATION COMMITTEE REPORT
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SUMMARY COMPENSATION TABLE
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GRANTS OF PLAN-BASED AWARDS FOR 2017
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OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2017
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OPTION EXERCISES AND STOCK VESTED DURING 2017
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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
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EQUITY COMPENSATION PLAN INFORMATION
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STOCK OWNERSHIP
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PRINCIPAL STOCKHOLDERS
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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RELATED-PARTY AND OTHER TRANSACTIONS INVOLVING OUR OFFICERS AND DIRECTORS
|
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REVIEW AND APPROVAL OF TRANSACTIONS WITH RELATED PERSONS
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INCORPORATION BY REFERENCE
|
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DELIVERY OF PROXY MATERIALS TO HOUSEHOLDS
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STOCKHOLDER PROPOSALS
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OTHER MATTERS
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APPENDIX A - RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
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APPENDIX B - AMENDED AND RESTATED REXFORD INDUSTRIAL REALTY, INC. AND REXFORD INDUSTRIAL REALTY, L.P. 2013 INCENTIVE AWARD PLAN
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(1)
|
If you received a paper copy of the proxy materials by mail, sign, date and mail the proxy card in the enclosed return envelope;
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(2)
|
Call 1-800-776-9437; or
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(3)
|
Log on to the internet at www.voteproxy.com and follow the instructions at that site. The website address for authorizing a proxy by internet is also provided on your Notice, as well as your unique 12-digit control number needed to access the Company’s annual meeting information located at www.voteproxy.com.
|
(1)
|
the election of
eight
directors;
|
(2)
|
the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018
;
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(3)
|
an advisory resolution to approve the Company’s named executive officer compensation for the fiscal year ended
December 31, 2017
, as more fully described in this Proxy Statement;
|
(4)
|
the approval of the Amended and Restated Rexford Industrial Realty, Inc. and Rexford Industrial Realty, L.P. 2013 Incentive Award Plan; and
|
(5)
|
any other business properly introduced at the Annual Meeting.
|
•
|
FOR the election of each nominee named in this Proxy Statement (see Proposal No. 1);
|
•
|
FOR ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending
December 31, 2018
(see Proposal No. 2);
|
•
|
FOR the advisory resolution to approve the Company’s named executive officer compensation for the fiscal year ended
December 31, 2017
, as more fully described in this Proxy Statement (see Proposal No. 3); and
|
•
|
FOR the approval of the Amended and Restated Rexford Industrial Realty, Inc. and Rexford Industrial Realty, L.P. 2013 Incentive Award Plan (see Proposal No. 4).
|
•
|
With respect to Proposal No. 1 (Election of Directors), your broker, bank or other nominee is not entitled to vote your shares on this matter if no instructions are received from you. Broker non-votes will have no effect on the election of directors.
|
•
|
With respect to Proposal No. 2 (Ratification of Independent Registered Public Accounting Firm), your broker is entitled to vote your shares on this matter if no instructions are received from you.
|
•
|
With respect to Proposal No. 3 (Advisory Vote on the Compensation of the Named Executive Officers (“Say-on-Pay Vote”)), your broker, bank or other nominee is not entitled to vote your shares on this matter if no instructions are received from you. Broker non-votes will have no effect on the result of the vote on this proposal.
|
•
|
With respect to Proposal No. 4 (Approval of the Amended and Restated Rexford Industrial Realty, Inc. and Rexford Industrial Realty, L.P. 2013 Incentive Award Plan), your broker, bank or other nominee is not entitled to vote your shares on this matter if no instructions are received from you. Broker non-votes will have no effect on the result of the vote on this proposal.
|
•
|
Filing written notice of revocation with our Secretary before the Annual Meeting at the address shown on the front of this Proxy Statement or at the Annual Meeting;
|
•
|
signing a proxy bearing a later date; or
|
•
|
attending and voting in person at the Annual Meeting.
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Name
|
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Age
|
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Position
|
Richard Ziman
|
|
75
|
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Chairman of the Board of Directors
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Howard Schwimmer
|
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57
|
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Co-Chief Executive Officer and Director
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Michael S. Frankel
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55
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Co-Chief Executive Officer and Director
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Robert L. Antin †
|
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68
|
|
Director
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Steven C. Good †
|
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75
|
|
Director
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Diana J. Ingram †
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60
|
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Director
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Tyler H. Rose †
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57
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Director
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Peter E. Schwab †
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74
|
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Director
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Name
(1)
|
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Fees Earned or
Paid in Cash ($) (2) |
|
Stock Awards
($)
(3)
|
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Total ($)
|
|||
Richard Ziman
|
|
250,000
|
|
|
70,012
|
|
|
320,012
|
|
Robert L. Antin
|
|
81,000
|
|
|
70,012
|
|
|
151,012
|
|
Steven C. Good
|
|
94,000
|
|
|
70,012
|
|
|
164,012
|
|
Peter E. Schwab
|
|
74,000
|
|
|
70,012
|
|
|
144,012
|
|
Tyler H. Rose
|
|
80,000
|
|
|
70,012
|
|
|
150,012
|
|
(1)
|
Howard Schwimmer and Michael S. Frankel, our Co-Chief Executive Officers, are not included in this table as they are employees of our Company and do not receive compensation for their services as directors. All compensation paid to Messrs. Schwimmer and Frankel for the services they provide to us is reflected in the Summary Compensation Table in this Proxy Statement.
Diana J. Ingram
was elected to our board of directors on
April 17, 2018
, and therefore did not receive any compensation in 2017.
|
(2)
|
Amounts reflect, as applicable, annual cash retainers, committee chair fees and meeting fees (equal to $2,000 per Board or committee meeting attended), in each case, which were paid in respect of
2017
services. For all directors, fourth quarter
2017
fees were paid in January
2018
.
|
(3)
|
Amounts reflect the full grant-date fair value of restricted stock awards granted with respect to services performed in
2017
, computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. Amounts ultimately realized in respect of these awards may be greater or less than the amounts shown in the table, and may equal zero in the event that the awards do not vest. We provide detailed information regarding the assumptions used to calculate the value of all restricted stock awards made to directors in Note 14 to our consolidated financial statements contained in our Annual Report on Form 10-K filed on
February 21, 2018
. As of
December 31, 2017
, Messrs. Ziman, Antin, Good, Schwab and Rose held
10,650
,
2,637
,
2,637
,
2,637
and
2,637
shares, respectively, of our restricted common stock.
|
•
|
our Board is not classified, with each of our directors subject to re-election annually;
|
•
|
of the
eight
persons who serve on our Board, our Board has determined that five or 62.5%, of our directors satisfy the listing standards for independence of the NYSE and Rule 10A-3 under the Exchange Act;
|
•
|
two of our directors qualify as “audit committee financial experts” as defined by the SEC;
|
•
|
we have opted out of the business combination and control share acquisition statutes in the Maryland General Corporation Law (the “MGCL”); and
|
•
|
we do not have a stockholder rights plan.
|
•
|
our accounting and financial reporting processes;
|
•
|
the integrity of our consolidated financial statements and financial reporting process;
|
•
|
our disclosure controls and procedures and internal control over financial reporting;
|
•
|
our compliance with financial, legal and regulatory requirements;
|
•
|
the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;
|
•
|
the performance of our internal audit function; and
|
•
|
our overall risk profile.
|
•
|
reviewing and approving, at least annually, the performance goals and objectives relevant to our Co-Chief Executive Officers’ compensation, evaluating our Co-Chief Executive Officers’ performance in light of such goals and objectives and determining and approving the remuneration of our Co-Chief Executive Officers based on such evaluation;
|
•
|
reviewing and approving the compensation of all of our other officers;
|
•
|
reviewing our executive compensation policies and plans;
|
•
|
implementing and administering our incentive compensation equity-based remuneration plans;
|
•
|
assisting management in complying with our Proxy Statement and annual report disclosure requirements;
|
•
|
producing a report on executive compensation to be included in our annual Proxy Statement (if required); and
|
•
|
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
|
•
|
identifying and recommending to the full Board qualified candidates for election as directors to fill vacancies on the Board or at any annual meeting of stockholders;
|
•
|
developing and recommending to the Board corporate governance guidelines and implementing and monitoring such guidelines;
|
•
|
reviewing and making recommendations on matters involving the general operation of the Board, including Board size and composition, and committee composition and structure;
|
•
|
recommending to the Board nominees for each committee of the Board of Directors;
|
•
|
facilitating the annual assessment of the Board’s performance as a whole and of the individual directors, as required by applicable law, regulations and NYSE corporate governance listing standards; and
|
•
|
overseeing the Board’s evaluation of the performance of management.
|
•
|
honest and ethical conduct, including the ethical handling of actual or potential conflicts of interest between personal and professional relationships;
|
•
|
full, fair, accurate, timely and understandable disclosure in our SEC reports and other public communications;
|
•
|
compliance with applicable governmental laws, rules and regulations;
|
•
|
prompt internal reporting of violations of the code to appropriate persons identified in the code; and
|
•
|
accountability for adherence to the code.
|
•
|
Since February 2010, Mr. Good has served as a consultant for the accounting firm of Cohn Reznick LLP.
|
•
|
Mr. Good founded the accounting firm of Good, Swartz, Brown & Berns (predecessor of Cohn Reznick LLP) in 1976, and served as an active Senior Partner until February 2010.
|
•
|
From 1997 until 2005, Mr. Good served as a Director of Arden Realty Group, Inc., a publicly-held REIT listed on the NYSE.
|
•
|
Mr. Good currently serves as a Director of OSI Systems, Inc. (NASDAQ: OSIS).
|
•
|
Mr. Good also currently serves as a Director of Kayne Anderson MLP Investment Company (NYSE: KYN) and Kayne Anderson Energy Total Return Fund, Inc. (NYSE: KYE).
|
•
|
Mr. Good holds a Bachelor of Science degree in Accounting from the University of California, Los Angeles and attended its Graduate School of Business.
|
•
|
Since December 2009, Mr. Rose has served as the Executive Vice President and Chief Financial Officer of Kilroy Realty Corporation after serving as Senior Vice President and Treasurer since 1997.
|
•
|
From 1995 until 1997, Mr. Rose served as Senior Vice President, Corporate Finance of Irvine Apartment Communities, Inc. and was appointed Treasurer in 1996.
|
•
|
From 1986 until 1995, Mr. Rose was employed at J.P. Morgan & Co., serving in its Real Estate Corporate Finance Group until 1992 and as Vice President of its Australia Mergers and Acquisitions Group from 1992 to 1994.
|
•
|
Mr. Rose served as a financial analyst for General Electric Company for two years.
|
•
|
Mr. Rose currently serves on the Policy Advisory Board for the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley
|
•
|
Mr. Rose holds a Master of Business Administration degree from the University of Chicago Booth School of Business and a Bachelor of Arts degree in Economics from the University of California, Berkeley.
|
|
|
Fiscal Year Ended December 31
|
||||||
|
|
2017
|
|
2016
|
||||
Audit Fees
|
|
$
|
1,123,000
|
|
|
$
|
1,061,000
|
|
Audit-Related Fees
|
|
52,000
|
|
|
52,000
|
|
||
Tax Fees
|
|
556,000
|
|
|
523,000
|
|
||
All Other Fees
|
|
—
|
|
|
—
|
|
||
Total Fees
|
|
$
|
1,731,000
|
|
|
$
|
1,636,000
|
|
•
|
Generated a
28.51%
total stockholder return in
2017
, exceeding the MSCI US REIT Index, SNL US REIT Equity Index and the Executive Compensation Peer Group (discussed below under the heading “— Executive Compensation”). Since our IPO in 2013, our total stockholder return of
136.56%
has far outpaced all three comparative indices (MSCI US REIT Index, SNL US REIT Equity Index and the Executive Compensation Peer Group).
|
•
|
Achieved Core FFO per diluted share of
$0.96
, which represents an increase of 13.0% year over year.
|
•
|
Achieved Same Property Portfolio occupancy of
98.0%
, which represents an increase of
180
basis points year over year.
|
•
|
Achieved Stabilized Same Property Portfolio occupancy of
98.1%
, which represents an increase of
120
basis points year over year.
|
•
|
Achieved aggregate GAAP re-leasing spreads of
24.5%
.
|
•
|
Increased Same Property Portfolio NOI by
8.6%
and Same Property Portfolio Cash NOI by
9.0%
.
|
•
|
Completed the acquisition of
21
properties for
$666.7 million
and the disposition of
six
properties for
$98.7 million
, increasing our portfolio’s square footage by approximately
23%
.
|
•
|
We continued use of a performance-based long-term incentive award program in
2017
that only provides tangible value to our executives upon the creation of significant absolute stockholder value and upon outperforming the median of our Executive Compensation Peer Group (discussed below) as to total stockholder return over a three-year performance period.
|
•
|
Approximately
85%
of the
2017
compensation awarded to our Co-Chief Executive Officers was variable and/or at-risk subject to the achievement of meaningful Company and individual performance goals.
|
•
|
In
2017
, we continued to implement a formulaic annual bonus program that directly tied our named executive officers’ annual bonuses to pre-established performance goals and included stated threshold, target and maximum payouts for each named executive officer.
|
•
|
Recruitment and Retention
. The Amended and Restated Plan will enable us to continue to attract, retain, motivate and reward our key employees consistent with market practice.
|
•
|
Alignment with Stockholder Interests and Pay-for-Performance
. Equity and equity-linked awards serve to align the interests of our key employees with those of our Company and its stockholders, focus our key employees on driving stockholder value accretion, and further link pay with performance.
|
•
|
Competitive Advantage
. We view equity and equity-linked awards as a crucial component of our compensation program, which enable us to remain competitive within our industry in attracting and retaining key talent, as equity-based compensation for executives is customary among public companies.
|
•
|
Reasonable Share Reserve
. We are seeking to reserve a number of shares for issuance pursuant to the Amended and Restated Plan that we believe is reasonable and that we estimate would be sufficient to accommodate approximately four annual grant cycles based on our historical grant practices.
|
•
|
No Liberal Share Recycling
. The share pool under the Amended and Restated Plan is not subject to liberal share “recycling” provisions, meaning (among other things) that shares used to pay the exercise price of stock
|
•
|
No Repricing or Replacement of Options or Stock Appreciation Rights (“SARs”)
. Awards under the Amended and Restated Plan may not be repriced, replaced or re-granted through cancellation or modification without stockholder approval if the effect would be to reduce the exercise price for the shares under the award. Cash buyouts of underwater awards are not permitted.
|
•
|
No In-the-Money Option or SAR Grants
. The Amended and Restated Plan prohibits the grant of options or SARs with an exercise or base price less than 100% of the fair market value of our common stock on the date of grant.
|
•
|
No “Evergreen” Provision.
The total number of shares of common stock that may be issued under the Amended and Restated Plan is limited to the share reserve that is subject to stockholder approval. That is, the Amended and Restated Plan does not include an automatic share replenishment provision (also known as an “evergreen” provision).
|
•
|
No Increase to Shares Available for Issuance without Stockholder Approval.
The Amended and Restated Plan prohibits any increase in the total number of shares of common stock that may be issued under the Amended and Restated Plan without stockholder approval, other than adjustments in connection with certain corporate reorganizations, changes in capitalization and other events, as described below.
|
•
|
No Gross-Ups
. The Amended and Restated Plan does not permit excise tax gross-ups (nor have we committed to pay tax gross-ups outside of the Amended and Restated Plan).
|
•
|
No “Reload” Stock Options.
The Amended and Restated Plan does not permit grants of stock options with a “reload” feature that would provide for additional stock options to be granted automatically to a participant upon the participant’s exercise of previously-granted stock options.
|
•
|
Overhang
. The Compensation Committee considered the potential dilution from outstanding and future equity awards (“overhang”) both in absolute terms and relative to industry peers. At the end of fiscal year 2017, approximately 1,299,933 shares were subject to outstanding awards under the Prior Plan, and 540,732 shares remained available for future grants of awards under the Prior Plan, which together, represented approximately 2.29% of our fully diluted common shares outstanding, or our overhang percentage. If our stockholders approve the Amended and Restated Plan, the 1,770,000 shares proposed to be reserved for issuance under the Amended and Restated Plan would potentially increase our overhang percentage by 2.21% to approximately 4.5% total.
|
•
|
Burn Rate
. The Company’s three-year average burn rate is 0.41%. Currently, the Prior Plan is the only plan under which long-term equity and equity-linked incentive awards may be granted. The tables below set forth information regarding burn rate and shares outstanding as of April 16, 2018 under the Prior Plan.
|
Year
|
|
Total Shares Subject to Stock Options
(1)
|
|
Total Shares Subject to Full-Value Awards
(2)
|
|
Total Shares (Stock Options Plus Full-Value Awards)
|
|
Weighted Average Common Shares Outstanding
|
|
Burn Rate (% of Weighted Average Common Shares Outstanding)
|
|||||
2015
|
|
—
|
|
|
318,772
|
|
|
318,772
|
|
|
56,203,681
|
|
|
0.57
|
%
|
2016
|
|
—
|
|
|
220,394
|
|
|
220,394
|
|
|
64,725,542
|
|
|
0.34
|
%
|
2017
|
|
—
|
|
|
227,358
|
|
|
227,358
|
|
|
73,175,634
|
|
|
0.31
|
%
|
Three-Year Average
|
|
|
|
|
|
|
|
|
|
0.41
|
%
|
(1)
|
No stock options are outstanding under the Prior Plan.
|
(2)
|
With respect to each applicable year, “Total Shares Subject to Full-Value Awards” reflects the number of shares subject to time-based vesting awards granted in the applicable year. No shares subject to performance-based vesting awards were earned in any of the applicable years.
|
Shares Subject to Outstanding Stock Options
(1)
|
|
Weighted Average Remaining Contractual Life of Stock Options
|
|
Shares Subject to Outstanding Full Value Awards
(2)
|
|
Total Shares Available for Issuance as of
April 16, 2018
|
—
|
|
—
|
|
1,381,111
|
|
403,862
|
(1)
|
No stock options are outstanding under the Prior Plan.
|
(2)
|
Reflects all outstanding unvested restricted shares and all outstanding LTIP Units (with unearned LTIP Units subject to performance-based vesting reflected assuming maximum performance).
|
•
|
Share Usage.
If the Amended and Restated Plan is approved, we estimate that the shares reserved for issuance thereunder would be sufficient for approximately four years of awards, assuming we grant awards consistent with our current projections. Of course, we cannot predict future share usage with certainty, and circumstances may change and require us to reevaluate and modify our equity grant practices and/or use our share reserve over a different period. However, based on the foregoing, we expect that we would not require an additional increase to the share reserve under the Amended and Restated Plan until 2022 (primarily dependent on award levels and hiring activity during the next few years, as well as terminations and forfeitures), noting again that this timeline is an estimate and the share reserve under the Amended and Restated Plan could actually last for a longer or shorter period of time, depending on future circumstances, which we cannot predict with certainty at this time.
|
Name
|
|
Number of Units
|
|
Dollar Value
(1)
|
|||
2017 NEOs and Current Positions
|
|
|
|
|
|||
Howard Schwimmer, Co-CEO
|
|
—
|
|
|
$
|
—
|
|
Michael Frankel, Co-CEO
|
|
—
|
|
|
$
|
—
|
|
Adeel Khan, CFO
|
|
—
|
|
|
$
|
—
|
|
David Lanzer, General Counsel and Secretary
|
|
—
|
|
|
$
|
—
|
|
All current executive officers as a group
|
|
—
|
|
|
$
|
—
|
|
Current non-executive officer directors
|
|
—
|
|
|
$
|
—
|
|
Richard Ziman
|
|
—
|
|
|
$
|
70,000
|
|
Robert Antin
|
|
—
|
|
|
$
|
70,000
|
|
Steven Good
|
|
—
|
|
|
$
|
70,000
|
|
Peter Schwab
|
|
—
|
|
|
$
|
70,000
|
|
Tyler Rose
|
|
—
|
|
|
$
|
70,000
|
|
Diana J. Ingram
|
|
—
|
|
|
$
|
70,000
|
|
Current non-executive officer directors as a group
|
|
—
|
|
|
$
|
420,000
|
|
Non-executive officer employees as a group
|
|
—
|
|
|
$
|
—
|
|
(1)
|
The number of shares of restricted stock granted to non-executive officer directors on the date of the Annual Meeting cannot be determined at this time, since the $70,000 grant value will be converted to a number of shares of restricted stock using the closing price of our common stock on the date of the Annual Meeting.
|
Name
|
|
Restricted Stock
|
|
LTIP Units
|
|
Performance
Units (1) |
|||
2017 NEOs and Current Positions
|
|
|
|
|
|
|
|||
Howard Schwimmer, Co-CEO
|
|
63,602
|
|
|
173,592
|
|
|
293,567
|
|
Michael Frankel, Co-CEO
|
|
63,602
|
|
|
173,592
|
|
|
293,567
|
|
Adeel Khan, CFO
|
|
48,420
|
|
|
92,394
|
|
|
102,664
|
|
David Lanzer, General Counsel and Secretary
|
|
14,176
|
|
|
11,446
|
|
|
13,450
|
|
All current executive officers as a group
|
|
189,800
|
|
|
451,024
|
|
|
703,248
|
|
All current non-executive officer directors as a group
|
|
98,150
|
|
|
—
|
|
|
—
|
|
Nominees for election as a director
|
|
|
|
|
|
|
|||
Richard Ziman
|
|
47,045
|
|
|
—
|
|
|
—
|
|
Robert Antin
|
|
14,611
|
|
|
—
|
|
|
—
|
|
Steven Good
|
|
14,611
|
|
|
—
|
|
|
—
|
|
Peter Schwab
|
|
12,716
|
|
|
—
|
|
|
—
|
|
Tyler Rose
|
|
9,167
|
|
|
—
|
|
|
—
|
|
Diana Ingram
|
|
—
|
|
|
—
|
|
|
—
|
|
Associate of any such directors, executive officers or nominees
|
|
—
|
|
|
—
|
|
|
—
|
|
Other persons who received or is to receive 5% of such options or rights
|
|
—
|
|
|
—
|
|
|
—
|
|
All non-executive officer employees as a group
|
|
413,243
|
|
|
12,409
|
|
|
—
|
|
(1)
|
With respect to completed performance periods, reflects performance-vesting LTIP Units earned. With respect to ongoing performance periods, reflects LTIP Units subject to performance-based vesting assuming maximum performance.
|
Name
|
|
Age
|
|
Position
|
Howard Schwimmer
|
|
57
|
|
Co-Chief Executive Officer and Director
|
Michael S. Frankel
|
|
55
|
|
Co-Chief Executive Officer and Director
|
Adeel Khan
|
|
44
|
|
Chief Financial Officer
|
David Lanzer
|
|
45
|
|
General Counsel and Secretary
|
•
|
Howard Schwimmer, Co-Chief Executive Officer
|
•
|
Michael S. Frankel, Co-Chief Executive Officer
|
•
|
Adeel Khan, Chief Financial Officer
|
•
|
David Lanzer, General Counsel and Secretary
|
•
|
Executive Summary
|
•
|
Compensation Program Objectives
|
•
|
Elements of Compensation
|
•
|
Governance Policies Relating to Compensation
|
•
|
Generated a
28.51%
total stockholder return in
2017
, exceeding the MSCI US REIT Index, SNL US REIT Equity Index and the Executive Compensation Peer Group (discussed below). Since our IPO in 2013, our total stockholder return of
136.56%
has far outpaced all three comparative indices (MSCI US REIT Index, SNL US REIT Equity Index and the Executive Compensation Peer Group).
|
•
|
Achieved Core FFO per diluted share of
$0.96
, which represents an increase of 13.0% year over year.
|
•
|
Achieved Same Property Portfolio occupancy of
98.0%
, which represents an increase of
180
basis points year over year.
|
•
|
Achieved Stabilized Same Property Portfolio occupancy of
98.1%
, which represents an increase of
120
basis points year over year.
|
•
|
Achieved aggregate GAAP re-leasing spreads of
24.5%
.
|
•
|
Increased Same Property Portfolio NOI by
8.6%
and Same Property Portfolio Cash NOI by
9.0%
.
|
•
|
Completed the acquisition of
21
properties for
$666.7 million
, and the disposition of
six
properties for
$98.7 million
, increasing our portfolio’s square footage by approximately
23%
.
|
Total stockholder return (% change):
|
|
1 Year
(1)
|
|
2 Year
(1)
|
|
Since IPO
(2)
|
Rexford Industrial Realty, Inc.
|
|
28.51%
|
|
86.91%
|
|
136.56%
|
Executive Compensation Peer Group Average
(3)
|
|
6.78%
|
|
36.83%
|
|
57.24%
|
MSCI REIT Index
|
|
5.07%
|
|
14.11%
|
|
39.86%
|
SNL US REIT Equity Index
|
|
8.37%
|
|
18.00%
|
|
43.88%
|
(1)
|
Through
December 31, 2017
.
|
(2)
|
From July 19, 2013.
|
(3)
|
Refer to page 50 in this Proxy Statement for a list of our Executive Compensation Peer Group.
|
•
|
Strong approval of our
2017
say-on-pay vote.
Approximately
97%
of the of the shares present and entitled to vote at our
2017
annual meeting were cast in favor of the
2017
say-on-pay proposal. We continue to proactively monitor and review our compensation program in an effort to ensure that it reflects best practices, takes into account the views of our shareholders and ties significant components of pay to performance.
|
•
|
Significant variable pay linked to performance.
For
2017
, approximately
85%
of our Co-CEOs’ total direct compensation was variable pay subject to the achievement of meaningful Company and individual performance goals. Of this, approximately
29%
of our Co-CEOs’
2017
compensation reflected at-risk compensation that
|
•
|
Use of formulaic bonus program.
Our
2017
annual bonus program for NEOs was tied (i) to key objective corporate measures (relating to FFO per share, occupancy, and NOI growth), for which applicable goals were pre-determined early in the year, and (ii) individual performance. We believe that these goals align our compensation program with our strategic direction, which further exemplifies our pay-for-performance philosophy.
|
•
|
Cash and Equity Short-Term Incentives for Co-CEOs.
The Compensation Committee chose to provide Messrs. Schwimmer and Frankel’s 2017 annual bonuses partly in cash (with respect to 25% of their respective annual bonuses) and partly in LTIP units in Rexford Industrial Realty, L.P., our operating partnership (“LTIP Units”) (with respect to 75% of their respective annual bonuses). Since LTIP Units have value only to the extent that there is future appreciation in our value, this further aligns our Co-CEOs’ pay with our performance and mitigates against excessive short-term risk-taking.
|
•
|
Long-Term Incentive—Performance-Vesting and Service-Vesting LTIP Units.
In
2017
, we continued our practice of granting both service- and performance-based long-term incentive awards. Performance-based awards are earned based on the achievement of both absolute and relative TSR hurdles over a prospective three-year performance period, while service-based awards are earned based on continued employment through the applicable vesting date. We believe that our use of rigorous performance hurdles that incorporate both absolute and relative TSR is consistent with market practice.
|
Pay Element
|
|
Compensation Type
|
|
Objective and Key Features
|
Base Salary
|
|
Fixed
Cash
|
|
Objective
Salaries are set at a level that are commensurate with our NEOs’ positions and provide competitive fixed pay to attract and retain our NEOs.
Key Features
NEO base salaries remained unchanged from 2013 through 2016, except for Mr. Khan who received a market-based increase in 2014. In 2017, NEO base salaries were increased by approximately 11% for Messrs. Schwimmer, Frankel and Khan, and by approximately 20% for Mr. Lanzer, to account for performance and the fact that they had not been increased since 2013 for Messrs. Schwimmer and Frankel and since 2014 for Mr. Khan, and to more closely align Mr. Lanzer’s base salary level with his performance, title and responsibilities.
|
Pay Element
|
|
Compensation Type
|
|
Objective and Key Features
|
Short-Term Incentive Bonus
|
|
Variable
Incentive
Cash and Equity
|
|
Objective
To incentivize the attainment of short-term Company objectives and individual contributions to the achievement of those objectives for the year. Key Features In 2017, annual bonuses were designed to incentivize management to attain Company and/or individual performance goals for the year in a manner that further aligns the interests of our NEOs with those of our stockholders. The Compensation Committee provided that 2017 annual bonuses earned by Messrs. Schwimmer and Frankel would be paid partly in cash (with respect to 25% of their respective annual bonuses) and partly in LTIP Units (with respect to 75% of their respective annual bonuses). Since LTIP Units have value only to the extent that there is future appreciation in our value, this further aligns our Co-CEOs’ pay with our performance and mitigates against excessive short-term risk-taking. 2017 annual bonuses for NEOs were determined in accordance with the following: • A portion (80% with respect to our Co-CEOs and CFO, and 60% with respect to our General Counsel and Secretary) of each such executive’s bonus opportunity under the 2017 program was formulaic and determined by the achievement of financial performance hurdles. The balance was determined based on the Compensation Committee’s review of individual performance criteria. • The performance criteria, described in detail below, were designed to motivate the achievement of annual goals that we believe will ultimately translate into an increase in the equity value of the Company. The targets (also described below) were designed to be challenging and difficult to attain, but achievable with significant effort and skill. |
Annual Long-Term
Incentives
(Time-Vesting)
|
|
Variable
Incentive
Equity
|
|
Objective
Structured to reward long-term stock price performance and to promote retention by requiring continued employment over a multi-year period as a condition to vesting. These awards are subject to the same market and stock price fluctuations as stockholders experience and thereby serve to motivate the creation of long-term stockholder value while enhancing long-term alignment between our NEOs and our Company and its stockholders.
2017 grants to Messrs. Schwimmer, Frankel, Khan and Lanzer were made in the form of service-vesting LTIP units in Rexford Industrial Realty, L.P., our operating partnership (the “Service-Vesting LTIP Units”).
Key Features
• The Service-Vesting LTIP Unit grant size was determined based on a detailed retrospective review of the Company’s overall annual performance and the compensation levels of the individual NEO in comparison to our Executive Compensation Peer Group.
• Service-Vesting LTIP Units vest ratably over a three-year period.
|
Pay Element
|
|
Compensation Type
|
|
Objective and Key Features
|
Annual Long-Term
Incentives
(Performance-Vesting)
|
|
Variable
Incentive
At-Risk
Equity
|
|
Objective
Designed to enhance the overall pay-for-performance structure of our executive compensation program and stockholder alignment, while motivating and rewarding superior TSR performance based on rigorous absolute TSR hurdles and outperforming relative to our peers’ TSR over a multi-year performance period.
2017 grants to Messrs. Schwimmer, Frankel, Khan and Lanzer were made in the form of performance-vesting LTIP units in Rexford Industrial Realty, L.P., our operating partnership (the “Performance-Vesting LTIP Units”).
Key Features
• Only provides tangible value upon the creation of meaningful stockholder value above specified hurdles over a three-year performance period.
• 2017 awards allocated 40% based on achievement of absolute TSR hurdles and 60% based on achievement of relative TSR hurdles.
• Threshold payout under the absolute TSR performance metric requires that our TSR equal or exceed 18% over a three-year performance period. A 36% absolute TSR level must be achieved to earn the maximum payout under the absolute TSR performance metric.
• Threshold payout under the relative TSR performance metric requires that our TSR equal or exceed the 35th percentile of the constituents of the SNL US Equity REIT Index over a three-year performance period; performance equal to or above the 75th percentile must be achieved to earn the maximum payout under the relative TSR performance metric.
• Maximum payout is earned only if both the absolute and relative TSR hurdles are achieved.
|
Compensation
Governance
|
|
Risk Management
|
|
Objective
Our internal governance policies seek to further the alignment between our NEOs and our Company and its stockholders, and to discourage behavior that could lead to excessive risk-taking.
Key Features
• Limits on incentive compensation provide that cash bonuses cannot exceed set percentages of base salary (150% for the Co-CEOs and the CFO; 90% for the General Counsel and Secretary).
• Minimum stock ownership guidelines for NEOs, with a 6x base salary requirement for our Co-CEOs and 3x base salary requirement for our CFO and our General Counsel and Secretary. • Anti-hedging policy that prohibits any NEO or director from trading in puts, calls, options or similar derivative securities with respect to Company shares. |
•
|
Motivate, attract and retain qualified executives who drive, and who are committed to, the Company’s mission, performance and culture;
|
•
|
Create a fair, reasonable and balanced compensation program that rewards NEOs’ performance and contributions to the Company while closely aligning the interests of the NEOs with those of the Company and its stockholders; and
|
•
|
Provide total direct compensation to our NEOs that is competitive with total direct compensation paid by comparable real estate firms similar to our Company in order to enhance the Company’s retention of key executives and to contribute towards the maintenance of a positive, team-oriented corporate culture.
|
•
|
Goals aligned with the Company’s and its stockholders’ long-term interests as well as the Company’s annual operating and strategic plans in a manner designed to avoid excessive risk taking;
|
•
|
Base salaries consistent with each executive’s responsibilities and competitive with peer salary levels, furthering retention objectives and providing a reasonable level of financial security (thus discouraging excessive risk-taking);
|
•
|
A significant portion of each executive’s compensation tied to the future share performance of the Company, thus aligning their long-term interests with those of our stockholders;
|
•
|
Equity compensation and vesting periods for equity awards that encourage executives to remain employed and focus on sustained, long-term share price appreciation; and
|
•
|
A balanced mix between cash and equity compensation designed to encourage strategies and actions that are in the long-term best interests of the Company and stockholders.
|
•
|
Include industrial-focused REITs that invest in properties in high barrier-to-entry markets, including diversified REITs with a large industrial portfolio; and
|
•
|
Include additional REITs comparable in terms of size within an approximate range of 0.3x to 3.0x the size of the Company (approximately $650 million to $6.0 billion) in terms of implied equity market capitalization.
|
Company
|
|
Implied Equity
Market Cap
($ million)
|
|
Peer Based on Size
Parameter of $650M - $6.0B
|
|
Peer Based on Industrial Portfolio Parameter
|
Agree Realty Corp.
|
|
1,436.5
|
|
ü
|
|
-
|
American Assets Trust, Inc.
|
|
2,626.4
|
|
ü
|
|
-
|
Brandywine Realty Trust
|
|
3,160.7
|
|
ü
|
|
ü
|
DCT Industrial Trust Inc.
|
|
5,687.8
|
|
ü
|
|
ü
|
EastGroup Properties, Inc.
|
|
3,097.2
|
|
ü
|
|
ü
|
First Industrial Realty Trust Inc.
|
|
3,825.5
|
|
ü
|
|
ü
|
First Potomac Realty Trust
|
|
(1)
|
|
(1)
|
|
ü
|
Gramercy Property Trust Inc.
|
|
5,168.8
|
|
ü
|
|
ü
|
Lexington Realty Trust
|
|
2,584.4
|
|
ü
|
|
ü
|
Mack-Cali Realty Corporation
|
|
2,380.4
|
|
ü
|
|
ü
|
Piedmont Office Realty Trust, Inc.
|
|
2,952.0
|
|
ü
|
|
-
|
PS Business Parks Inc.
|
|
4,676.5
|
|
ü
|
|
ü
|
Ramco-Gershenson Properties Trust
|
|
1,081.8
|
|
ü
|
|
-
|
Seritage Growth Properties
|
|
2,602.9
|
|
ü
|
|
-
|
STAG Industrial, Inc.
|
|
2,703.6
|
|
ü
|
|
ü
|
Terreno Realty Corp.
|
|
1,928.5
|
|
ü
|
|
ü
|
Washington Real Estate Investment Trust
|
|
2,563.6
|
|
ü
|
|
-
|
Rexford Industrial Realty, Inc.
|
|
2,192.0
|
|
ü
|
|
ü
|
(1)
|
First Potomac Realty Trust was acquired by Government Properties Income Trust on October 2, 2017.
|
Named Executive Officer
|
|
2016 Base Salaries
|
|
2017 Base Salaries
|
|
Year-over-Year Base Salary Increase (2016-17)
|
Howard Schwimmer, Co-CEO
|
|
$495,000
|
|
$550,000
|
|
11%
|
Michael S. Frankel, Co-CEO
|
|
$495,000
|
|
$550,000
|
|
11%
|
Adeel Khan, CFO
|
|
$315,000
|
|
$350,000
|
|
11%
|
David Lanzer, General Counsel and Secretary
|
|
$250,000
|
|
$300,000
|
|
20%
|
Named Executive Officer
|
|
Threshold
|
|
Target
|
|
Maximum
|
Howard Schwimmer, Co-CEO
|
|
50%
|
|
100%
|
|
150%
|
Michael S. Frankel, Co-CEO
|
|
50%
|
|
100%
|
|
150%
|
Adeel Khan, CFO
|
|
50%
|
|
100%
|
|
125%
|
David Lanzer, General Counsel and Secretary
|
|
30%
|
|
60%
|
|
90%
|
Performance Criteria
3
|
|
Co-CEOs & CFO Weighting
|
|
GC Only Weighting
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual 2017 Results
|
Core FFO per diluted Share
|
|
35%
|
|
29%
|
|
$0.91
|
|
$0.925
|
|
$0.94
|
|
$0.96
|
Year-end Same Property Portfolio Occupancy
|
|
20%
|
|
13%
|
|
93.0%
|
|
94.0%
|
|
95.0%
|
|
98.0%
|
Same Property Portfolio NOI Growth
|
|
25%
|
|
18%
|
|
6.0%
|
|
7.0%
|
|
8.0%
|
|
8.6%
|
Named Executive Officer
|
|
2017 Aggregate Annual Bonuses
|
|
Portion of Annual Bonus Delivered in Cash
|
|
Portion of Annual Bonus Delivered in LTIP Units
|
|
Total Annual Bonus LTIP Units Granted
|
Howard Schwimmer, Co-CEO
|
|
$825,000
|
|
$206,250
|
|
$618,750
|
|
22,517
|
Michael S. Frankel, Co-CEO
|
|
$825,000
|
|
$206,250
|
|
$618,750
|
|
22,517
|
Adeel Khan, CFO
|
|
$525,000
|
|
$525,000
|
|
$—
|
|
—
|
David Lanzer, General Counsel and Secretary
|
|
$270,000
|
|
$270,000
|
|
$—
|
|
—
|
Named Executive Officer
|
|
Total Service-Vesting LTIP Units
|
Howard Schwimmer, Co-CEO
|
|
44,147
|
Michael S. Frankel, Co-CEO
|
|
44,147
|
Adeel Khan, CFO
|
|
22,891
|
David Lanzer, General Counsel and Secretary
|
|
11,446
|
Named Executive Officer
|
|
Total Performance-Vesting Units
|
|
Absolute TSR Base Units
|
|
Relative TSR Base Units
|
|
Distribution Equivalent Units
|
Howard Schwimmer, Co-CEO
|
|
73,950
|
|
27,500
|
|
41,250
|
|
5,200
|
Michael S. Frankel, Co-CEO
|
|
73,950
|
|
27,500
|
|
41,250
|
|
5,200
|
Adeel Khan, CFO
|
|
26,900
|
|
10,000
|
|
15,000
|
|
1,900
|
David Lanzer, General Counsel and Secretary
|
|
13,450
|
|
5,000
|
|
7,500
|
|
950
|
Named Executive Officer
|
|
Threshold
Award
(# Units)
|
|
Target
Award
(# Units)
|
|
Maximum
Award
(# Units)
(1)
|
|
Grant Date
Value ($) (2) |
Howard Schwimmer, Co-CEO
|
|
17,188
|
|
41,250
|
|
68,750
|
|
$1,066,313
|
Michael S. Frankel, Co-CEO
|
|
17,188
|
|
41,250
|
|
68,750
|
|
$1,066,313
|
Adeel Khan, CFO
|
|
6,250
|
|
15,000
|
|
25,000
|
|
$387,750
|
David Lanzer, General Counsel and Secretary
|
|
3,125
|
|
7,500
|
|
12,500
|
|
$193,875
|
(1)
|
Represents the maximum Performance-Vesting LTIP Units that may vest, excluding any distribution equivalent units.
|
(2)
|
Represents the grant date fair value based on probable outcome of the performance conditions, computed in accordance with FASB ASC 718.
|
|
|
Absolute TSR
Performance |
|
% of Absolute TSR Base
Units Vested
|
“Threshold Level”
|
|
18%
|
|
25%
|
“Target Level”
|
|
27%
|
|
60%
|
“Maximum Level”
|
|
36%
|
|
100%
|
|
|
Relative TSR Performance
(based on the SNL US Equity REIT Index) |
|
% of Relative TSR Base
Units Vested
|
“Threshold Level”
|
|
35th percentile of the peer group
|
|
25%
|
“Target Level”
|
|
55th percentile of the peer group
|
|
60%
|
“Maximum Level”
|
|
75th percentile of the peer group
|
|
100%
|
Title
|
|
Multiple
|
Co-CEOs
|
|
6 x Base Salary
|
CFO & General Counsel and Secretary
|
|
3 x Base Salary
|
Name and Principal Position
|
|
Year
|
|
Salary
($)
(1)
|
|
Bonus
($)
(2)
|
|
Stock
Awards
($)
|
|
Non-Equity Incentive Plan Compensation
($)
(3)
|
|
All Other Compensation
($)
(4)
|
|
Total($)
|
||||||
Howard Schwimmer
Co-Chief Executive Officer |
|
2017
|
|
550,000
|
|
|
—
|
|
|
2,348,828
|
|
(5)
|
825,000
|
|
|
29,475
|
|
|
3,753,303
|
|
|
|
2016
|
|
495,000
|
|
|
—
|
|
|
1,694,905
|
|
|
742,500
|
|
|
27,831
|
|
|
2,960,236
|
|
|
|
2015
|
|
495,000
|
|
|
495,000
|
|
|
1,871,600
|
|
|
—
|
|
|
26,559
|
|
|
2,888,159
|
|
Michael S. Frankel
Co-Chief Executive Officer |
|
2017
|
|
550,000
|
|
|
—
|
|
|
2,348,828
|
|
(5)
|
825,000
|
|
|
13,149
|
|
|
3,736,977
|
|
|
|
2016
|
|
495,000
|
|
|
—
|
|
|
1,694,905
|
|
|
742,500
|
|
|
12,418
|
|
|
2,944,823
|
|
|
|
2015
|
|
495,000
|
|
|
495,000
|
|
|
1,871,600
|
|
|
—
|
|
|
13,126
|
|
|
2,874,726
|
|
Adeel Khan
Chief Financial Officer |
|
2017
|
|
350,000
|
|
|
—
|
|
|
1,052,756
|
|
(5)
|
525,000
|
|
|
13,149
|
|
|
1,940,905
|
|
|
|
2016
|
|
315,000
|
|
|
—
|
|
|
880,409
|
|
|
393,750
|
|
|
10,393
|
|
|
1,599,552
|
|
|
|
2015
|
|
315,000
|
|
|
252,000
|
|
|
930,846
|
|
|
—
|
|
|
12,825
|
|
|
1,510,671
|
|
David Lanzer
General Counsel and Secretary |
|
2017
|
|
300,000
|
|
|
—
|
|
|
726,402
|
|
(5)(6)
|
270,000
|
|
|
13,149
|
|
|
1,309,551
|
|
|
|
2016
|
|
195,313
|
|
|
140,000
|
|
|
100,009
|
|
|
—
|
|
|
36,978
|
|
|
472,300
|
|
(1)
|
Amounts shown in the “Salary” column reflect the base salary earned by each NEO during the applicable year.
|
(2)
|
Amounts shown in the “Bonus” column reflect the payment of discretionary bonuses awarded to the NEOs with respect to performance during the applicable year.
|
(3)
|
Amounts shown in the “Non-Equity Incentive Plan Compensation” column reflect annual bonus awards earned for performance in 2017 and 2016 under the applicable annual bonus programs in place for those years. Prior to 2016, we awarded discretionary performance bonuses to our NEOs, which are reflected in the “Bonus” column. Messrs. Schwimmer and Frankel’s 2017 annual bonuses were delivered in a combination of cash and LTIP Units, with 25% of each such NEO’s annual bonus ($206,250) delivered in cash and 75% of each such NEO’s annual bonus ($618,750) delivered in LTIP Units. Accordingly, in early 2018, at the same time that annual bonuses were paid to our NEOs generally, Messrs. Schwimmer and Frankel were each granted 22,517 LTIP Units, with the number of LTIP Units granted determined by dividing the cash value of relevant portion of each of Messrs. Schwimmer and Frankel’s respective annual bonuses by the closing price of our common stock on the date of grant. The LTIP Units were fully vested at grant.
|
(4)
|
Amounts shown in the “All Other Compensation” column reflect medical insurance premiums paid by or reimbursed to each NEO by the Company during
2017
,
2016
and
2015
, respectively, for the direct or indirect benefit of the NEO that are not generally available to all other employees of the Company.
|
(5)
|
Amounts shown in the “Stock Awards” column for
2017
include, for all NEOs, the full grant-date fair value of Service-Vesting LTIP Units and Performance-Vesting LTIP Units and (for Mr. Lanzer only) restricted stock awards granted in
2017
computed in accordance with ASC Topic 718, rather than the amounts paid to or realized by the named individual. We provide detailed information regarding the assumptions used to calculate the value of Service-Vesting LTIP Units and Performance-Vesting LTIP Units made to executive officers in Note 14 to our consolidated financial statements contained in our Annual Report on Form 10-K filed
February 21, 2018
. There can be no assurance that awards will vest (in which case no value will be realized by the individual). The Performance-Vesting LTIP Unit awards are treated as market condition shares as defined under ASC Topic 718, and as a result, the grant date values will not differ from the fair values.
|
(6)
|
Prior to December 2017, the Compensation Committee provided Mr. Lanzer with long-term incentive compensation in the form of restricted stock, consistent with awards to the Company’s non-NEO employees. Specifically, in December 2016, Mr. Lanzer did not receive LTIP Units with respect to 2017 as did our other NEOs. Instead, effective March 1, 2017, the Compensation Committee granted to Mr. Lanzer a long-term incentive award of
8,681
shares of restricted stock at the same time as grants made to the Company’s non-NEO employees generally, corresponding to a fixed grant date fair value of $200,000. In December 2017, the Compensation Committee determined to align Mr. Lanzer’s annual long-term incentive compensation with that of our other NEOs, and Mr. Lanzer, along with the other NEOs, received an LTIP Unit award in December 2017. As a result of this change to Mr. Lanzer’s long-term incentive compensation, Mr. Lanzer received two long-term incentive awards in 2017. Going forward, the Compensation Committee intends to continue to provide Mr. Lanzer with long-term incentive compensation on the same basis as the other NEOs. As such, the Compensation Committee does not expect to grant any further restricted stock awards to Mr. Lanzer so long as other NEOs are not receiving restricted stock awards.
|
|
|
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
(1)
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
(2)
|
|
|
|
|
||||||||||||||||
Name
|
|
Grant Date
|
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
|
Threshold
(#) |
|
Target
(#) |
|
Maximum
(#) |
|
All Other Stock Awards; Number of Units
(#) |
|
Grant Date Fair Value of Stock Awards
($) (4) |
||||||||
Howard Schwimmer
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,147
|
|
(3)
|
1,282,515
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,188
|
|
|
41,250
|
|
|
68,750
|
|
|
—
|
|
|
1,066,313
|
|
|
|
—
|
|
275,000
|
|
|
550,000
|
|
|
825,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Michael S. Frankel
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44,147
|
|
(3)
|
1,282,515
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,188
|
|
|
41,250
|
|
|
68,750
|
|
|
—
|
|
|
1,066,313
|
|
|
|
—
|
|
275,000
|
|
|
550,000
|
|
|
825,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Adeel Khan
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,891
|
|
(3)
|
665,006
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,250
|
|
|
15,000
|
|
|
25,000
|
|
|
—
|
|
|
387,750
|
|
|
|
—
|
|
175,000
|
|
|
350,000
|
|
|
525,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
David Lanzer
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,446
|
|
(3)
|
332,517
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,125
|
|
|
7,500
|
|
|
12,500
|
|
|
—
|
|
|
193,875
|
|
|
|
3/1/2017
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,681
|
|
(5)
|
200,010
|
|
|
|
—
|
|
90,000
|
|
|
180,000
|
|
|
270,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(1)
|
Represents threshold, target and maximum annual bonus opportunities for performance in
2017
. Messrs. Schwimmer and Frankel’s 2017 annual bonuses were delivered in a combination of cash and LTIP Units, with 25% of each such NEO’s annual bonus ($206,250) delivered in cash and 75% of each such NEO’s annual bonus ($618,750) delivered in LTIP Units. Accordingly, in early 2018, at the same time that annual bonuses were paid to our NEOs generally, Messrs. Schwimmer and Frankel were each granted 22,517 LTIP Units, with the number of LTIP Units granted determined by dividing the cash value of relevant portion of each of Messrs. Schwimmer and Frankel’s respective annual bonuses by the closing price of our common stock on the date of grant. The LTIP Units were fully vested at grant.
|
(2)
|
Represents awards of Performance-Vesting LTIP Units in our operating partnership. The amounts in the threshold, target and maximum columns correspond to the number of base Performance-Vesting LTIP Units that would be earned in the event that specified threshold, target and maximum goals, respectively, are achieved. These amounts exclude distribution equivalent units which are eligible to vest upon the conclusion of the applicable performance period based on the number of Performance-Vesting LTIP Units actually earned. For more information on these performance unit awards, see “Compensation Discussion and Analysis—Elements of Compensation-Long-Term Incentives”.
|
(3)
|
Represents awards of Service-Vesting LTIP Units in our operating partnership. For more information on these Service-Vesting LTIP Unit awards, see “Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives”.
|
(4)
|
Amounts for
2017
reflect the full grant-date fair value of Service-Vesting LTIP Units, Performance-Vesting LTIP Units and restricted stock awards (granted to Mr. Lanzer only) granted in
2017
computed in
|
(5)
|
Represents a time-based award of restricted common stock in the Company.
|
Name
|
|
Grant
Date
(1)
|
|
Number of Shares or Stock Units that Have Not Vested (#)
|
|
Market
Value of Shares of Stock or Units that Have Not Vested ($) (2) |
|
Equity Incentive Plan Awards; Number of Unearned Units That Have Not Vested (#)
|
|
Equity Incentive Plan Awards; Market or Payout Value of Unearned Units That Have Not Vested ($)
(3)
|
||||
Howard Schwimmer
|
|
12/15/2015
|
|
31,447
|
|
(4)
|
916,995
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2015
|
|
—
|
|
|
—
|
|
|
123,504
|
|
(5)
|
3,601,377
|
|
|
|
12/29/2016
|
|
33,026
|
|
(6)
|
963,038
|
|
|
—
|
|
|
—
|
|
|
|
12/29/2016
|
|
—
|
|
|
—
|
|
|
78,625
|
|
(7)
|
2,292,705
|
|
|
|
12/15/2017
|
|
44,147
|
|
(8)
|
1,287,327
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
17,188
|
|
(9)
|
501,202
|
|
Michael S. Frankel
|
|
12/15/2015
|
|
31,447
|
|
(4)
|
916,995
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2015
|
|
—
|
|
|
—
|
|
|
123,504
|
|
(5)
|
3,601,377
|
|
|
|
12/29/2016
|
|
33,026
|
|
(6)
|
963,038
|
|
|
—
|
|
|
—
|
|
|
|
12/29/2016
|
|
—
|
|
|
—
|
|
|
78,625
|
|
(7)
|
2,292,705
|
|
|
|
12/15/2017
|
|
44,147
|
|
(8)
|
1,287,327
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
17,188
|
|
(9)
|
501,202
|
|
Adeel Khan
|
|
12/15/2015
|
|
20,441
|
|
(4)
|
596,060
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2015
|
|
—
|
|
|
—
|
|
|
41,991
|
|
(5)
|
1,224,458
|
|
|
|
12/29/2016
|
|
21,467
|
|
(6)
|
625,978
|
|
|
—
|
|
|
—
|
|
|
|
12/29/2016
|
|
—
|
|
|
—
|
|
|
27,750
|
|
(7)
|
809,190
|
|
|
|
12/15/2017
|
|
22,891
|
|
(8)
|
667,502
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
6,250
|
|
(9)
|
182,250
|
|
David Lanzer
|
|
4/2/2016
|
|
4,121
|
|
(10)
|
120,168
|
|
|
—
|
|
|
—
|
|
|
|
3/1/2017
|
|
8,681
|
|
(11)
|
253,138
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2017
|
|
11,446
|
|
(8)
|
333,765
|
|
|
—
|
|
|
—
|
|
|
|
12/15/2017
|
|
—
|
|
|
—
|
|
|
3,125
|
|
(9)
|
91,125
|
|
(1)
|
In addition to the vesting schedules described below, each equity award may be subject to accelerated vesting in certain circumstances, as described in “Potential Payments upon Termination or Change in Control” below.
|
(2)
|
The market value of shares of restricted stock and Service- and Performance-Vesting LTIP Units that have not vested is calculated by multiplying the fair market value of a share of our common stock on
December 31, 2017
(
$29.16
) by the number of unvested shares of restricted stock or unvested Service- or Performance-Vesting LTIP Units outstanding under the applicable award.
|
(3)
|
The market value of unearned Performance-Vesting LTIP Units is calculated by multiplying the fair market value of a share of our common stock on
December 31, 2017
(
$29.16
) by the number of unearned shares disclosed in accordance with SEC rules and footnotes 5, 7 and 9.
|
(4)
|
Each Service-Vesting LTIP Unit award vests as to 25% of the number of Service-Vesting LTIP Units subject to the award on each of the first, second, third and fourth anniversaries of the date of grant, subject to the executive’s continued employment with us through the applicable vesting date. The unvested portions of these awards are scheduled to vest in two remaining installments on December 15, 2018, and December 15, 2019.
|
(5)
|
Represents the number of Performance-Vesting LTIP Units, excluding distribution equivalent units, that would become earned and vested at the end of the performance period, assuming that the Company’s absolute and relative TSR performance for the three-year performance period continues at the same rate as we experienced from December 15, 2015 (the first day of the performance period) through
December 31, 2017
.
|
(6)
|
Each Service-Vesting LTIP Unit award vests as to 25% of the number of Service-Vesting LTIP Units subject to the award on each of the first, second, third and fourth anniversaries of the date of grant, subject to the executive’s continued employment with us through the applicable vesting date. The unvested portions of these awards are scheduled to vest in three remaining installments on December 29, 2018, December 29, 2019, and December 29, 2020.
|
(7)
|
Represents the number of Performance-Vesting LTIP Units, excluding distribution equivalent units, that would become earned and vested at the end of the performance period, assuming that the Company’s absolute and relative TSR performance for the three-year performance period continues at the same rate as we experienced from December 29, 2016 (the first day of the performance period) through
December 31, 2017
.
|
(8)
|
Each Service-Vesting LTIP Unit award vests as to one-third of the number of Service-Vesting LTIP Units subject to the award on each of the first, second and third anniversaries of the date of grant, subject to the executive’s continued employment with us through the applicable vesting date. The unvested portions of these awards are scheduled to vest in three installments on December 15, 2018, December 15, 2019, and December 15, 2020.
|
(9)
|
Represents the number of Performance-Vesting LTIP Units, excluding distribution equivalent units, that would become earned and vested at the end of the performance period, assuming that the Company’s absolute and relative TSR performance for the three-year performance period is achieved at the threshold level.
|
(10)
|
This restricted stock award vests as to 25% of the number of shares subject to the award on each of the first, second, third and fourth anniversaries on the date of grant, subject to the executive’s continued service with us through the applicable vesting date. The unvested portion of this award is scheduled to vest in three remaining installments on April 2, 2018, April 2, 2019, and April 2, 2020.
|
(11)
|
As discussed above, in February 2017, the Compensation Committee approved an award of
8,681
shares of restricted stock to Mr. Lanzer, corresponding to a fixed grant date fair value of $200,000. This restricted stock award vests as to 25% of the number of shares subject to the award on each of the first, second, third and fourth anniversaries on the date of grant, subject to Mr. Lanzer’s continued service with us through the applicable vesting date. The unvested portion of this award is scheduled to vest in three remaining installments on March 1, 2019, March 1, 2020, and March 1, 2021.
|
|
|
Stock Awards
|
||||
Name
|
|
Number of Shares Acquired on Vesting (#)
|
|
Value Realized on Vesting ($)
(1)
|
||
Howard Schwimmer
|
|
57,453
|
|
|
1,708,890
|
|
Michael S. Frankel
|
|
57,453
|
|
|
1,708,890
|
|
Adeel Khan
|
|
31,881
|
|
|
927,020
|
|
David Lanzer
|
|
1,374
|
|
|
30,942
|
|
(1)
|
Amounts represent the market value as of the vesting date of the awards, based on the closing price for our common stock on the date of vesting of restricted stock or Service-Vesting LTIP Units.
|
•
|
A lump-sum payment in an amount equal to three times the sum of (i) the executive’s annual base salary then in effect, (ii) the average annual bonus earned by the executive for the three prior fiscal years and (iii) the average value of any annual equity awards(s) made to the executive during the prior three fiscal years (excluding the initial grant of restricted stock granted pursuant to the employment agreements, any award(s) granted pursuant to a multi-year, outperformance or long-term performance program and any other non-recurring awards);
|
•
|
a lump-sum payment in an amount equal to (i) any annual bonus relating to the year immediately preceding the year in which the termination date occurs that remains unpaid on the termination date (if any), and (ii) a pro rata portion of the executive’s target bonus for the partial fiscal year in which the termination date occurs, payable in a lump sum on the date on which annual bonuses are paid to our Company’s senior executives generally for such year;
|
•
|
other than with respect to the Performance-Vesting LTIP Units (discussed below), accelerated vesting of all outstanding equity awards that vest solely on the passage of time held by the executive as of the termination date; and
|
•
|
company-paid continuation healthcare coverage for 18 months after the termination date.
|
•
|
a lump-sum payment in an amount equal to the executive’s annual base salary then in effect;
|
•
|
a pro rata portion of the executive’s annual bonus for the partial fiscal year in which the termination date occurs, determined based on actual performance, payable in a lump sum on the date on which annual bonuses are paid to our Company’s senior executives generally for such year;
|
•
|
other than with respect to the Performance-Vesting LTIP Units (discussed below), accelerated vesting of all outstanding equity awards that vest based solely on the passage of time held by the executive as of the termination date; and
|
•
|
company-paid continuation healthcare coverage for up to 18 months after the termination date.
|
•
|
his Service-Vesting LTIP Units will vest in full; and
|
•
|
his Performance-Vesting LTIP Units will remain outstanding and eligible to vest based on the achievement of the performance goals during the performance period.
|
•
|
If the change in control occurs on or prior to the first anniversary of the grant date of the Performance-Vesting LTIP Units, the number of Performance-Vesting LTIP Units that vest will depend on whether the Company’s absolute TSR is attained at or above the threshold level as of the change in control. If it is not attained at or above the threshold level, then the number of Performance-Vesting LTIP Units that vest will equal the sum of (i) (x) the number of Absolute TSR Base Units which vest based on the achievement of pro-rated absolute TSR performance goals (determined by reference to the shortened performance period through the date of the change in control), plus (y) the number of Relative TSR Base Units which vest based on achievement of the relative TSR performance goals, pro-rated to reflect the shortened performance period through the change in control date (such number, the “Year 1 CIC base units”), plus (ii) the distribution equivalent units (calculated with respect to the Year 1 CIC base units). If the Company’s absolute TSR is attained at or above the threshold level as of the change in control, then the same calculation will apply, except that the number of Absolute TSR Base Units comprising the total vested amount will equal the greater of the number of Absolute TSR Base Units that vest based on the achievement of pro-rated absolute TSR performance goals (determined by reference to the shortened performance period through the date of the change in control) and the number of Absolute TSR Base Units that vest based on the achievement of Company’s absolute TSR (determined by reference to the shortened performance period through the date of the change in control, without pro-ration). Any Performance-Vesting LTIP Units that vest as described in this paragraph will vest immediately prior to the change in control, subject to the NEO’s continued employment until immediately prior to the change in control (except in the case of an earlier qualifying termination, as discussed above).
|
•
|
If the change in control occurs following the first anniversary of the grant date of the Performance-Vesting LTIP Units, a number of Performance-Vesting LTIP Units equal to the sum of (i) (x) the number of Absolute TSR Base Units that vest based on the achievement of pro-rated absolute TSR performance goals (determined by reference to the shortened performance period as of the date of the change in control) plus (y) the number of Relative TSR Base Units that vest based on achievement of the relative TSR performance goals (determined by reference to the shortened performance period through the date of the change in control, without pro-ration) (such number of base units, the “Year 2/3 CIC base units”), plus (ii) the distribution equivalent units (calculated with respect to the Year 2/3 CIC base units), will vest immediately prior to the change in control,
|
Name
|
|
Benefit
|
|
Death/
Disability ($)
|
|
Qualifying Termination (no Change in Control) ($)
|
|
Change in Control (no Termination) ($)
(1)
|
|
Qualifying Termination in Connection with
a Change in
Control ($)
(1)
|
|
||||
Howard Schwimmer
|
|
Cash Severance
|
|
825,000
|
|
|
6,807,500
|
|
|
—
|
|
|
6,807,500
|
|
|
|
|
Continued Health Benefits
|
|
—
|
|
|
57,000
|
|
|
—
|
|
|
57,000
|
|
|
|
|
Equity Acceleration
|
|
10,110,501
|
|
(2)
|
10,110,501
|
|
(2)
|
9,240,188
|
|
(3)
|
9,240,188
|
|
(4)
|
|
|
Total
|
|
10,935,501
|
|
|
16,975,001
|
|
|
9,240,188
|
|
|
16,104,688
|
|
|
Michael S. Frankel
|
|
Cash Severance
|
|
825,000
|
|
|
6,807,500
|
|
|
—
|
|
|
6,807,500
|
|
|
|
|
Continued Health Benefits
|
|
—
|
|
|
32,512
|
|
|
—
|
|
|
32,512
|
|
|
|
|
Equity Acceleration
|
|
10,110,501
|
|
(2)
|
10,110,501
|
|
(2)
|
9,240,188
|
|
(3)
|
9,240,188
|
|
(4)
|
|
|
Total
|
|
10,935,501
|
|
|
16,950,513
|
|
|
9,240,188
|
|
|
16,080,200
|
|
|
Adeel Khan
|
|
Cash Severance
|
|
525,000
|
|
|
875,000
|
|
|
—
|
|
|
875,000
|
|
|
|
|
Continued Health Benefits
|
|
—
|
|
|
32,512
|
|
|
—
|
|
|
32,512
|
|
|
|
|
Equity Acceleration
|
|
4,294,918
|
|
(2)
|
4,294,918
|
|
(2)
|
3,984,487
|
|
(3)
|
3,984,487
|
|
(4)
|
|
|
Total
|
|
4,819,918
|
|
|
5,202,430
|
|
|
3,984,487
|
|
|
4,891,999
|
|
|
David Lanzer
|
|
Cash Severance
|
|
270,000
|
|
|
570,000
|
|
|
—
|
|
|
570,000
|
|
|
|
|
Continued Health Benefits
|
|
—
|
|
|
32,512
|
|
|
—
|
|
|
32,512
|
|
|
|
|
Equity Acceleration
|
|
805,137
|
|
(2)
|
805,137
|
|
(2)
|
707,072
|
|
(3)
|
707,072
|
|
(4)
|
|
|
Total
|
|
1,075,137
|
|
|
1,407,649
|
|
|
707,072
|
|
|
1,309,584
|
|
|
(1)
|
In accordance with the employment agreement terms, if any payments made in connection with a change in control would otherwise be subject to an excise tax under Section 4999 of the Code by reason of the “golden parachute” rules contained in Section 280G of the Code, such payments will be reduced if and to the extent that doing so will result in net after-tax payments and benefits for the NEO that are more
|
(2)
|
Represents, for each NEO, the sum of the values attributable to (i) the accelerated vesting of the unvested portion of all outstanding shares of restricted stock and all outstanding Service-Vesting LTIP Units held by the NEO as of
December 31, 2017
and (ii) the number of Performance-Vesting LTIP Units that would become earned and vested at the end of the performance period, assuming absolute and relative TSR performance continues at the same rate as we experienced from the first day of the applicable performance period through
December 31, 2017
, including the assumed number of distribution equivalent units that will be allocated in connection with those units. Note, however, that the value of the Performance-Vesting LTIP Unit awards would ultimately reflect actual performance and, accordingly, if our actual TSR results vary, the amounts payable in respect of these awards under this scenario could be greater or less than the amounts reported. As required by applicable disclosure rules, these values reflect a hypothetical termination of the executive’s employment occurring on
December 31, 2017
.
|
(3)
|
Represents, for each NEO, the sum of the values attributable to (i) the accelerated vesting of the unvested portion of all outstanding shares of restricted stock and all outstanding Service-Vesting LTIP Units held by the NEO as of
December 31, 2017
and (ii) the accelerated vesting of the NEO’s Performance-Vesting LTIP Unit award as described in the narrative above. The Performance-Vesting LTIP Unit awards were valued for each NEO by multiplying (i) the number of Performance-Vesting LTIP Units that would have been earned as if the date of the change in control occurred on
December 31, 2017
, by (ii) the fair market value of a share of our common stock on
December 31, 2017
(
$29.16
). The number of Performance-Vesting LTIP Units that would have been earned as of
December 31, 2017
is based on the Company’s actual TSR performance from the first day of the applicable performance period through
December 31, 2017
. As required by applicable disclosure rules, these values reflect a hypothetical change in control occurring on
December 31, 2017
.
|
(4)
|
Represents, for each NEO, the sum of the values attributable to (i) the accelerated vesting of the unvested portion of all outstanding shares of restricted stock and all outstanding Service-Vesting LTIP Units held by the NEO as of
December 31, 2017
and (ii) the accelerated vesting of the NEO’s Performance-Vesting LTIP Unit award as described in the narrative above with respect to a change in control. The Performance-Vesting LTIP Unit awards were valued for each NEO by multiplying (i) the number of Performance-Vesting LTIP Units that would have been earned as if the date of the change in control occurred on
December 31, 2017
, by (ii) the fair market value of a share of our common stock on
December 31, 2017
(
$29.16
). The number of Performance-Vesting LTIP Units that would have been earned as of
December 31, 2017
is based on the Company’s actual TSR performance from the first day of the applicable performance period through
December 31, 2017
. As required by applicable disclosure rules, these values reflect a hypothetical change in control and qualifying termination occurring on
December 31, 2017
.
|
•
|
the annual total compensation of our Co-CEOs, Mr. Schwimmer and Mr. Frankel, as reported in the Summary Compensation Table above, was
$3,753,303
and
$3,736,977
, respectively.
|
•
|
the annual total compensation of the employee who represents our median compensated employee (other than Mr. Schwimmer and Mr. Frankel) was
$92,494
.
|
Plan Category
|
|
Number of Securities to be
Issued Upon Exercise of
Outstanding
Options, Warrants and
Rights (a)
|
|
Weighted Average
Exercise Price of
Outstanding
Options, Warrants
and Rights (b)
|
|
Number of Securities
Remaining
Available
for Future Issuance
Under Equity
Compensation
Plans (Excluding Securities Reflected in Column (a))
|
|||
Equity compensation plans approved by security holders
(1)
|
|
996,733
|
|
(2)
|
—
|
|
|
540,732
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
Total
|
|
996,733
|
|
|
—
|
|
|
540,732
|
|
(1)
|
Consists of the Incentive Award Plan, which was adopted by our Board in connection with the closing of our IPO in July 2013, and provides for awards of options, stock appreciation rights, restricted stock, dividend equivalents, restricted stock units, performance awards, performance share awards, Service-Vesting LTIP Units, Performance-Vesting LTIP Units, stock payments and other incentive awards to be available for employees and consultants of our Company, our operating partnership and Rexford Industrial Realty and Management, Inc. (and any of their qualifying subsidiaries) and for our directors.
|
(2)
|
Includes the following unvested securities: (i)
293,485
Service-Vesting LTIP Units and (ii)
703,248
Performance-Vesting LTIP Units, which represents the maximum number of Performance-Vesting LTIP Units that would be earned in the event that specified maximum goals are achieved. For more information on these Performance-Vesting LTIP Unit awards, see “Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives”.
|
Name of Beneficial Owner
|
|
Number of Shares and
Units Beneficially Owned |
|
Percentage of
All Shares (1) |
|
Percentage of
All Shares and Units (2) |
The Vanguard Group
(3)
100 Vanguard Blvd. Malvern, PA 19355 |
|
11,759,882
|
|
14.5%
|
|
14.1%
|
BlackRock, Inc.
(4)
55 East 52nd Street New York, NY 10055 |
|
7,971,391
|
|
9.8%
|
|
9.6%
|
Deutsche Bank AG
(5)
Taunusanlage 12 60325 Frankfurt am Main Federal Republic of Germany |
|
5,536,227
|
|
6.8%
|
|
6.7%
|
Vanguard Specialized Funds—Vanguard REIT Index Fund
(6)
100 Vanguard Boulevard Malvern, PA 19355 |
|
4,786,424
|
|
5.9%
|
|
5.8%
|
Howard Schwimmer
(7)
|
|
559,530
|
|
*
|
|
*
|
Richard Ziman
(8)
|
|
424,832
|
|
*
|
|
*
|
Michael Frankel
(9)
|
|
355,573
|
|
*
|
|
*
|
Adeel Khan
(10)
|
|
45,194
|
|
*
|
|
*
|
Robert L. Antin
|
|
29,611
|
|
*
|
|
*
|
Steven C. Good
|
|
18,611
|
|
*
|
|
*
|
Peter E. Schwab
|
|
12,716
|
|
*
|
|
*
|
David Lanzer
(11)
|
|
12,234
|
|
*
|
|
*
|
Tyler H. Rose
|
|
9,167
|
|
*
|
|
*
|
Diana J. Ingram
|
|
—
|
|
*
|
|
*
|
All directors and executive officers as a group (10 persons)
|
|
1,467,468
|
|
1.8%
|
|
1.8%
|
(1)
|
Assumes
81,077,178
shares of common stock are outstanding as of
April 16, 2018
. In computing the percentage ownership of a person or group, we have assumed that all of the common units held by that person or the persons in the group have been redeemed in exchange for shares of common stock and that those shares are outstanding but that no units held by other persons have been redeemed in exchange for shares of common stock.
|
(2)
|
Computation of the percentage ownership assumes
83,118,353
shares of common stock and units, including vested LTIP Units and common units not held by us, are outstanding as of
April 16, 2018
, comprised of
81,077,178
shares of common stock,
1,883,636
common units held by limited partners and
157,539
vested LTIP Units.
|
(3)
|
Based solely on information disclosed in the Schedule 13G/A filed with the SEC on February 12, 2018 by The Vanguard Group, Inc. (“Vanguard”) and Vanguard Fiduciary Trust Company (“VFTC”) and Vanguard Investments Australia, Ltd. (“VIA”), both wholly owned subsidiaries of Vanguard. Such report provides that Vanguard: (i) is the beneficial owner of all such shares of common stock (105,313 and 197,274 of such shares of common stock are beneficially owned as a result of its ownership of VFTC and VIA, respectively); (ii) has sole voting power with respect to 203,392 of such shares of common stock; (iii) has
|
(4)
|
Based solely on information disclosed in the Schedule 13G/A filed with the SEC on April 6, 2018 by BlackRock, Inc. Such report provides that BlackRock, Inc.: (i) is the beneficial owner of, and has sole dispositive power with respect to, all such shares of common stock and (ii) has sole voting power with respect to 7,419,578 of such shares of common stock.
|
(5)
|
Based solely on information disclosed in the Schedule 13G/A filed with the SEC on February 14, 2018 by Deutsche Bank AG. Such report provides that Deutsche Bank, AG: (i) is the beneficial owner of, and has sole dispositive power with respect to, all such shares of common stock and (ii) has sole voting power with respect to 3,359,825 of such shares of common stock.
|
(6)
|
Based solely on information disclosed in the Schedule 13G filed with the SEC on February 2, 2018 by Vanguard Specialized Funds—Vanguard REIT Index Fund. Such report provides that Vanguard Specialized Funds—Vanguard REIT Index Fund is the beneficial owner of, and has sole voting power with respect to, all such shares of common stock.
|
(7)
|
Includes
13,575
shares of common stock and
42,002
common units held by the Schwimmer Family Irrevocable Trust for which Mr. Schwimmer is a trustee and
3,700
shares of common stock and
7,275
common units held by the Schwimmer Living Trust dated December 14, 2001 for which Mr. Schwimmer is a trustee. Includes
64,972
vested LTIP Units. Excludes
108,620
Service-Vesting LTIP Units and
293,567
Performance-Vesting LTIP Units, which do not vest, or will not be earned, within 60 days of
April 16, 2018
.
|
(8)
|
Includes
10,000
shares of common stock and
180,075
common units held by RSZ Trust for which Mr. Ziman is the trustee and
7,405
shares of common stock and
413
common units held by Mr. Ziman’s affiliates.
|
(9)
|
Includes
10,589
shares of common stock held by the Candice and Michael Frankel Family Trust for which Mr. Frankel is a trustee. Includes
64,972
vested LTIP Units. Excludes
108,620
Service-Vesting LTIP Units and
293,657
Performance-Vesting LTIP Units, which do not vest, or will not be earned, within 60 days of
April 16, 2018
.
|
(10)
|
Includes
27,595
vested LTIP Units. Excludes
64,799
Service-Vesting LTIP Units and
102,664
Performance-Vesting LTIP Units, which do not vest, or will not be earned, within 60 days of
April 16, 2018
. Mr. Khan also beneficially owns 5,460 shares (less than 1.0%) of the Company’s 5.875% Series A Cumulative Redeemable Preferred Stock of which there are currently 3,600,000 shares outstanding.
|
(11)
|
Excludes
11,446
Service-Vesting LTIP Units and
13,450
Performance-Vesting LTIP Units, which do not vest, or will not be earned, within 60 days of
April 16, 2018
.
|
•
|
the amounts involved exceeded or will exceed $120,000; and
|
•
|
any of our directors, executive officers, holders of more than 5% of our outstanding common stock or any member of their immediate family had or will have a direct or indirect material interest.
|
•
|
any person who is, or at any time since the beginning of our last fiscal year was, a director or executive officer of ours or a nominee to become a director of ours;
|
•
|
any person who is (or was) the beneficial owner of more than 5% of any class of our voting securities when the Related Party Transaction in question is expected to occur or exist (or when it occurred or existed);
|
•
|
any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in- law of such director, executive officer, nominee or more than 5% beneficial owner, and any person (other than a tenant or employee) sharing the household of such director, executive officer, nominee or more than 5% beneficial owner; and
|
•
|
any firm, corporation or other entity in which any of the foregoing persons is employed or is a director, officer, general partner or principal or serves in a similar position or in which such person has a 5% or greater beneficial ownership interest.
|
|
|
Year Ended December 31, 2017
|
||
Net income
|
|
$
|
41,700
|
|
Add:
|
|
|
||
Depreciation and amortization
|
|
64,852
|
|
|
Deduct:
|
|
|
||
Gain on sale of real estate
|
|
(29,573
|
)
|
|
Gain on sale of real estate from unconsolidated joint venture
|
|
(11
|
)
|
|
FFO
|
|
76,968
|
|
|
Add:
|
|
|
||
Acquisition expenses
|
|
454
|
|
|
Core FFO
|
|
77,422
|
|
|
Less: preferred stock dividends
|
|
(5,875
|
)
|
|
Less: Core FFO attributable to noncontrolling interests
(1)
|
|
(1,927
|
)
|
|
Less: Core FFO attributable to participating securities
(2)
|
|
(549
|
)
|
|
Core FFO available to common stockholders
|
|
$
|
69,071
|
|
Core FFO per diluted share
|
|
$
|
0.96
|
|
Weighted-average shares of common stock outstanding - diluted
|
|
71,599
|
|
(1)
|
Noncontrolling interests represent holders of outstanding common units of the Company’s operating partnership that are owned by unit holders other than us.
|
(2)
|
Participating securities include unvested shares of restricted stock, unvested Service-Vesting LTIP Units and unvested Performance-Vesting LTIP Units.
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Rental income
|
|
$
|
99,031
|
|
|
$
|
91,971
|
|
Tenant reimbursements
|
|
15,257
|
|
|
13,691
|
|
||
Other income
|
|
712
|
|
|
751
|
|
||
Total operating revenues
|
|
115,000
|
|
|
106,413
|
|
||
Property expenses
|
|
(30,214
|
)
|
|
(28,338
|
)
|
||
Same Property Portfolio NOI
|
|
$
|
84,786
|
|
|
$
|
78,075
|
|
Straight line rental revenue adjustment
|
|
(2,937
|
)
|
|
(2,862
|
)
|
||
Amortization of above/below market lease intangibles
|
|
312
|
|
|
177
|
|
||
Same Property Portfolio Cash NOI
|
|
$
|
82,161
|
|
|
$
|
75,390
|
|
|
|
Year Ended December 31,
|
||||||
|
|
2017
|
|
2016
|
||||
Net income
|
|
$
|
41,700
|
|
|
$
|
25,876
|
|
Add:
|
|
|
|
|
||||
General and administrative
|
|
21,610
|
|
|
17,415
|
|
||
Depreciation and amortization
|
|
64,852
|
|
|
51,407
|
|
||
Acquisition Expenses
|
|
454
|
|
|
1,855
|
|
||
Interest expense
|
|
20,209
|
|
|
14,848
|
|
||
Deduct
|
|
|
|
|
||||
Management, leasing and development services
|
|
493
|
|
|
473
|
|
||
Interest income
|
|
445
|
|
|
459
|
|
||
Equity in income from unconsolidated real estate entities
|
|
11
|
|
|
1,451
|
|
||
Gain on extinguishment of debt
|
|
25
|
|
|
—
|
|
||
Gain on sale of real estate
|
|
29,573
|
|
|
17,377
|
|
||
NOI
|
|
$
|
118,278
|
|
|
$
|
91,641
|
|
Non-Same Property Portfolio operating revenues
|
|
(45,417
|
)
|
|
(18,847
|
)
|
||
Non-Same Property Portfolio property expenses
|
|
11,925
|
|
|
5,281
|
|
||
Same Property Portfolio NOI
|
|
$
|
84,786
|
|
|
$
|
78,075
|
|
Straight line rental revenue adjustment
|
|
(2,937
|
)
|
|
(2,862
|
)
|
||
Amortization of above/below market lease intangibles
|
|
312
|
|
|
177
|
|
||
Same Property Portfolio Cash NOI
|
|
$
|
82,161
|
|
|
$
|
75,390
|
|