STAG Industrial Inc
For the period ended Apr 29, 2024. Filed Mar 20, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Apr 29, 2024 · Filed Mar 20, 2024
Contents
PROXY SUMMARY
2024 ANNUAL MEETING OF STOCKHOLDERS
PROXY SUMMARY
2023 Business and Financial Performance Highlights
We are a real estate investment trust (“REIT”) focused on the acquisition, ownership and operation of industrial properties throughout the United States. Our primary business objective is to own and operate a balanced and diversified industrial real estate portfolio that maximizes cash flows and enhances stockholder value over time. Our business strategy has resulted in a consistent track record of creating strong operational and financial performance and long-term value for our stockholders.
Total stockholder return (“TSR”) is defined as common stock price appreciation plus dividends, assuming reinvestment of dividends into additional shares of common stock.
Funds from operations (“FFO”) and net operating income (“NOI”) meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). Please refer to Appendix A attached hereto for an explanation of why we consider these measures and reconciliations of the measures to the nearest measure under generally accepted accounting principles (“GAAP”).
Executive Compensation Highlights
Below are certain features of our executive compensation program, which reflect our commitment to a pay-for-performance compensation structure:
| | | ✔ We pay for performance. | | |
|---|---|---|---|---|
| | | • Approximately 81% of our Chief Executive Officer’s 2023 compensation was “at risk” compensation and strongly aligned with the interests of stockholders. | | |
| | | • Annual base salaries are intended to be less than 25% of total compensation. | | |
| | | • We do not guarantee annual base salary increases, but consider increases when merited. | | |
| | | ✔ Our 2023 annual cash incentive bonuses encouraged executives to achieve short-term performance goals. | | |
| | | • Bonuses are based on Company performance goals (80%) and individual performance goals (20%). | | |
| | | • Our 2023 Company performance goal components were Core FFO per Share (50%), Acquisition Volume (10%), Net Debt to Run Rate Adjusted EBITDAre (10%) and Same Store Cash NOI Growth (10%). | | |
| | | • We do not guarantee bonuses of a minimum amount (bonuses can be zero) and do not provide uncapped bonuses. | | |
| | | ✔ Our 2023 equity awards encourage executives to achieve long-term performance goals. | | |
| | | • Performance award share units (“performance units”) granted under the STAG Industrial, Inc. 2011 Equity Incentive Plan, as amended and restated (the “Equity Incentive Plan”), are based on our TSR over a three-year period compared to both relative returns (TSR vs. two benchmarks) and an absolute return (we must achieve a cumulative 25% TSR for payouts above target on 50% of the performance units). | | |
| | | • Performance units will have zero value (no payout) for performance below the 30th percentile. | | |
| | | • We target outperformance; target payouts under the performance units are achieved at the 55th percentile. | | |
| | | ✔ Stockholders have expressed support for our executive compensation practices. | | |
| | | • At the 2023 annual meeting of stockholders, approximately 96.0% of the votes cast in the say-on-pay vote were in favor. | | |
For more information, see “Executive Officer Compensation Discussion and Analysis” below.
Snapshot of Corporate Governance Practices
The table below presents a snapshot of our corporate governance policies.
| | Annual election of directors to the Board of Directors (the “Board”) | | | ✔ | |
|---|---|---|---|---|---|
| | Majority voting standard for the election of directors (with a director resignation policy) | | | ✔ | |
| | Regular executive sessions of independent directors | | | ✔ | |
| | Independent Board; eight of our 10 directors are “independent” under New York Stock Exchange (“NYSE”) rules | | | ✔ | |
| | Designation of an independent Chairman of the Board or Lead Independent Director | | | ✔ | |
| | All members of the Audit, Compensation and Nominating and Corporate Governance Committees are “independent” under NYSE rules | | | ✔ | |
| | All five members of the Audit Committee qualify as “audit committee financial experts” as defined by the SEC | | | ✔ | |
| | Diverse Board; two of our directors are women, one of whom is Asian, and one of our directors is Black/African American | | | ✔ | |
| | Annual Board, committee and director self-evaluations, assisted by outside counsel | | | ✔ | |
| | Regular Board review of management succession plans | | | ✔ | |
| | Stockholder ability to amend our Bylaws | | | ✔ | |
| | No stockholder rights plan (i.e., “poison pill”) without stockholder approval or ratification | | | ✔ | |
| | Opted out of Maryland control share acquisition and business combination statutes and may not opt back in without stockholder approval | | | ✔ | |
| | Robust Stock Ownership Guidelines for executive officers and directors | | | ✔ | |
| | Anti-hedging and anti-pledging policies | | | ✔ | |
| | Recovery policy for incentive-based executive compensation (“Clawback Policy”) | | | ✔ | |
| | Code of Business Conduct and Ethics for employees and directors | | | ✔ | |
Corporate Responsibility Highlights
We have a robust corporate responsibility program that incorporates environmental, social and governance (“ESG”) initiatives into our overall business, investment and asset management strategies to increase both the sustainability and the value of our portfolio. Since December 2021, we have published an annual Environmental, Social and Governance Report (our “Sustainability Report”), which includes information regarding our ESG policies and programs, historic results and performance targets, including our long-term greenhouse gas (GHG) reduction goal as approved by the Science-Based Targets Initiative (SBTi). While our tenants maintain operational control of the properties under triple-net leases, we seek to (i) identify, assess and manage environmental risks and opportunities at our properties, (ii) collaborate with our tenants on sustainable strategies to optimize property performance, and (iii) partner with our tenants to improve the efficiency of our properties through the implementation of environmentally focused practices and solutions.
2023 Environmental Sustainability Highlights
During 2023, we enhanced our environmental programs and achieved the following milestones and accomplishments:
| | | GRESB “A” Score | | |
|---|---|---|---|---|
| | | • In October 2023, we announced that we achieved a 2023 public disclosure assessment score of “A” from the Global Real Estate Sustainability Benchmark (“GRESB”), which is an entity that provides a ranking system to evaluate and compare ESG efforts in the real estate industry. We have achieved an “A” score since 2022, which compares favorably to the average score of “B” for all companies, globally, rated by GRESB and to the average score of “B” for the 10 industrial real estate companies in our GRESB comparison group. As of December 2023, we were ranked third out of the 10 industrial real estate companies rated by GRESB in its public disclosure assessment. | | |
| | | Solar Panel Installations | | |
|---|---|---|---|---|
| | | • We pursue solar energy opportunities in our portfolio nationwide and have executed contracts for solar development or leasing in multiple states. As of December 31, 2023, our properties hosted or were undergoing construction for solar projects with more than 30.4 megawatts capacity in aggregate and we had identified up to 40 additional projects that we are vetting over the next five years. | | |
| | | Green Lease Leader—Gold Level | | |
|---|---|---|---|---|
| | | • In 2020, we were recognized by the Institute for Market Transformation as a Green Lease Leader at the “Gold” level. This Gold level recognition was renewed in 2023. We achieved this recognition by modifying our standard form of lease to require sharing of tenant utility usage so that we can identify those of our buildings that are outliers with respect to energy consumption. | | |
| | | Reflective Roofing | | |
|---|---|---|---|---|
| | | • Since 2015, the majority of our roof replacements utilized reflective roofing, which typically is a white membrane that reflects sunlight and reduces building heat load and utility consumption. As of December 31, 2023, approximately 48% of our buildings benefited from reflective roofing. | | |
| | | Lighting Conversions | | |
|---|---|---|---|---|
| | | • As of December 31, 2023, we had fluorescent or LED lighting systems in more than 95% of our portfolio. Since 2016, we have replaced less efficient lights with LED systems in more than 27.3 million square feet of our portfolio. | | |
2023 Corporate Donations and Volunteering
During 2023, we continued to support several local and national charities with a focus on child welfare, youth empowerment, equality and social justice:
| | | Charitable Action Committee | | |
|---|---|---|---|---|
| | | • We established our Charitable Action Committee (the “CAC”) to promote quality interaction with our local community in Boston. The CAC is funded by our Company and managed by volunteer employees with differing seniorities and responsibilities. We support several local and national charities, through a combination of financial support (both direct and employee matching) and volunteer activities (i.e., food and clothing distribution, habitat improvement, etc.). | | |
| | | Charitable Action Fund | | |
|---|---|---|---|---|
| | | • As an expression of our commitment to good corporate citizenship, we established the STAG Industrial Charitable Action Fund (the “Charitable Action Fund”) in cooperation with the Boston Foundation. The Charitable Action Fund supports our social responsibility endeavors, including promoting equality and inspiring children and young adults—particularly those at risk—to realize their potential and benefit future generations. | | |
Other 2023 ESG Highlights
Stockholder engagement. We provide institutional investors with many opportunities and events to provide feedback directly to our management team throughout the year, including formal events, one-on-one sessions and group meetings. During 2023, our management team attended (in-person and virtually) six investor conferences and numerous other individual investor meetings, where they met with more than 120 institutional investors. These meetings covered a range of topics, including our financial condition and results of operations, our investment, finance and operation strategies, our stock price performance, economic, industry and market trends, our ESG and executive compensation policies and other matters. In addition to, and apart from, our regular investor meetings, we speak exclusively about our ESG and executive compensation policies with a number of our investors each year.
Board diversity. We recognize the benefits of having a diverse Board and remain focused on appointing women and other diverse candidates to the Board as opportunities arise. Women and minorities currently represent 30% of the Board. Beginning in 2023, the Board started an initiative, led by the Nominating and Corporate Governance Committee, to determine the needed skill set and experience for an additional director and identify qualified nominees with a focus on female candidates. In connection with this initiative, the Board has engaged a search firm to help identify director candidates and bring additional diversity to the Board.
Board leadership. Pursuant to the previously announced Board leadership succession plan, on June 30, 2023, Benjamin S. Butcher retired as Executive Chairman and began his service as a non-management director. Effective as of July 1, 2023, Larry T. Guillemette, who has served as our Lead Independent Director since 2015, become our independent Chairman of the Board.
Clawback Policy. In accordance with applicable laws and NYSE listing standards, effective as of November 1, 2023, the Board adopted our Clawback Policy that requires the of certain “incentive-based compensation” (as defined in the policy) received by our current or former executive officers (as defined in Rule 16a-1(f) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in the event that we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the U.S. securities laws.
For more information, see “Board of Directors and Its Committees” and “Corporate Responsibility” below. Additional information regarding our corporate responsibility program is included in our Sustainability
Report, which is available under the “Corporate Responsibility” section of our website atwww.stagindustrial.com. The information located on, or accessible from, our website is not, and should not be deemed to be, part of this proxy statement or incorporated into any other filing that we submit to the SEC.
Matters to be Voted On at the 2024 Annual Meeting
| | | Proposal | | | Board Recommendation | | |
|---|---|---|---|---|---|---|---|
| | | Proposal 1: Election of Directors | | | FOR | | |
| | | Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm | | | FOR | | |
| | | Proposal 3: Advisory (Non-Binding) Vote on Executive Compensation | | | FOR | | |
| | | Proposal 4: Advisory (Non-Binding) Vote on Frequency of Executive Compensation Votes | | | FOR | | |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.