FEDERAL REALTY INVESTMENT TRUST
For the period ended May 1, 2024. Filed Mar 22, 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.
May 1, 2024 · Filed Mar 22, 2024
Contents
Long-Term Incentive Program
The largest portion of compensation for each of our NEOs comes from our equity based long-term incentive program that aligns the interests of our NEOs with shareholders by incentivizing our NEOs to identify and accomplish medium and longer-term business objectives that generate value through share price appreciation, dividend growth and prudent capital allocation decisions. Performance for purposes of our long-term incentive program is measured against the following preset metrics.
| Plan Metric | Description |
|---|---|
| Relative Total Shareholder Return (34% weighting) | Compares our total shareholder return, taking into account share price appreciation and assuming reinvestment of dividends, against the total return achieved by the Bloomberg REIT Shopping Center Index (“BBRESHOP”) which is comprised of publicly traded companies that own and operate open air shopping centers. The Compensation Committee believes that the BBRESHOP provides an appropriate basis to compare our performance against similarly situated companies. |
| FFO Multiple Premium (33% weighting) | Compares the FFO multiple at which the Company is trading at the end of the performance period against the average FFO multiple at which all other public shopping center companies (other than the Company) are trading at that time. The FFO multiples are provided by a third party investment bank and serves as a measure of investor expectations of our long-term growth potential and confidence in our management team versus other publicly traded open air shopping center companies. |
| Return on Invested Capital (33% weighting) | Reflects how effectively we have allocated our shareholders’ capital during the 3-year performance period and incentivizes sound, long-term investment decisions focused on generating strong future shareholder returns. The metric encompasses all aspects of capital allocation decisions. Required performance levels are established to reflect changing market expectations as we acquire, sell and develop assets. |
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The required performance levels for each of these metrics and the actual performance achieved for the 3-year performance period from 2021 through 2023 is set forth below.
| Performance Targets · Payout Factor | ||||||
|---|---|---|---|---|---|---|
| Performance Goal | Weighting | Threshold | Target | Stretch | Unweighted | Weighted |
| Payout as Percentage of Target | 50% | 100% | 150% | |||
| Relative Total TSR | 34% | 5% < Index | Index | 5% > Index | 53% | 18.0% |
| FFO Multiple Premium | 33% | 5% Premium | 15% Premium | 20% Premium | 118% | 38.9% |
| Return on Invested Capital | 33% | 6.00% | 6.25% | 6.50% | 150% | 49.5% |
| Final Payout | 106.4% | |||||
The Compensation Committee has the right to increase or decrease each NEO’s award under our long-term incentive program by up to 20% to reflect individual performance and chose not to exercise that discretion for any of our NEOs. See the discussions on pages 26-27 for the factors considered by the Compensation Committee in determining the final long-term incentive awards payable to our NEOs for the 2021 through 2023 performance period.
The equity awards under our long-term incentive program are paid in the form of restricted shares that are issued after completion of the 3-year performance period and then vest equally over an additional period of 3 years from the date they are earned and issued. As a result, each NEO is required to hold all of their earned shares for 1 year after they have been earned, two-thirds of their earned shares for 2 years after they are earned andone-third of their earned shares for 3 years after they are earned.
| Performance Period | Award Earned | Shares Vest |
|---|
The actual number of shares awarded to each of our NEOs is determined by dividing the amount of the award by the closing price of our shares on the NYSE on the date the awards are made.
There is no amount included in the Summary Compensation Table or Grants of Plan-Based Awards Table in this proxy statement for long-term incentive awards earned for the 2021-2023 performance period. Those amounts will be included in next year’s proxy statement. The long-term incentive awards included in the Summary Compensation Table and the Grants of Plan-Based Awards Table for our NEOs in this proxy statement relate to awards made in February 2023 for the 3-year performance period ending December 31, 2022.
Federal Realty 2024 Proxy Statement 25
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.