As required by the Exchange Act, we are providing information about the total compensation of our CEO and the average total compensation of our other named executive officers, as reported in the Summary Compensation Table of this proxy statement and as “compensation actually paid” to such named executive officers compared with our company’s performance. In this discussion, our CEO in each applicable year is also referred to as our principal executive officer or “PEO,” and our other named executive officers in each applicable year are referred to as our “Non-PEO NEOs.”
“Compensation actually paid” is determined pursuant to applicable SEC rules, but such dollar amounts do not necessarily reflect the actual amount of compensation earned or paid during the applicable year. The calculations and analysis below also do not necessarily reflect our approach to aligning compensation with performance. For information concerning our company’s compensation philosophy and how our executive compensation program is
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| LTC PROPERTIES, INC. | 53 | 2024 PROXY STATEMENT |
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designed to align compensation with performance, please see “Executive Compensation Discussion and Analysis” above.
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| · · · · · · · · Average · · · · Value of Initial Fixed $100 · · · · · |
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| · · · · · · · · Summary · · Average · · Investment Based on: · · · · · |
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| · · Summary · · · · · Compensation · · Compensation · · Company · · Peer Group(5) · · · · · Diluted FAD, |
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| · · Compensation · · Compensation · · Table Total for · · Actually Paid to · · Total · · Total · · · · · Excluding |
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| · · Table Total for · · Actually Paid · · Non-PEO · · Non-PEO · · Stockholder · · Stockholder · · · · · Non-recurring |
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| Year · PEO · PEO(1) · NEO(2) · NEO(3) · Return(4) · Return(4) · Net Income · Items, per Share |
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| 2023 | | | $5,248,068 | | | $3,300,179 | | | $2,651,896 | | | $1,698,392 | | | $92.16 | | | $113.35 | | | $91,462,000 | | $2.75 |
| 2022 | | | 4,662,529 | | | 4,140,950 | | | 2,349,485 | | | 2,091,383 | | | 95.26 | | | 99.66 | | | 100,584,000 | | $2.68 |
| 2021 | | | 4,204,139 | | | 2,559,524 | | | 2,139,370 | | | 1,372,272 | | | 86.19 | | | 131.78 | | | 56,224,000 | | $2.43 |
| 2020 | | | 4,200,356 | | | 4,054,561 | | | 2,118,714 | | | 2,041,151 | | | 92.44 | | | 92.00 | | | 95,677,000 | | $2.97 |
| (1) | The calculation of “compensation actually paid” to PEO reflects the following adjustments: |
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| · · Fiscal Year · · Fiscal Year · · Fiscal Year · · Fiscal Year |
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| · 2023 · 2022 · 2021 · 2020 |
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| Summary Compensation Table Total | | | $5,248,068 | | | $4,662,529 | | | $4,204,139 | | | $4,200,356 |
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| Less: Grant Date Fair Value of Stock Awards in Fiscal Year | | | (2,950,000) | | | (2,500,000) | | | (2,500,000) | | | (2,500,000) |
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| Fair Value of Equity Awards Granted During the Year and Unvested at Year End | | | 2,124,068 | | | 2,592,074 | | | 1,879,475 | | | 1,886,213 |
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| Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End | | | (1,173,194) | | | (610,633) | | | (1,615,636) | | | (655,436) |
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| Change in Fair Value of Equity Awards Granted in Prior Years and Vested During the Year | | | 51,237 | | | (3,020) | | | 591,546 | | | 1,123,428 |
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| Compensation Actually Paid | | | $3,300,179 | | | $4,140,950 | | | $2,559,524 | | | $4,054,561 |
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| (2) | For fiscal years 2020 through 2023, Pamela Shelley-Kessler and Clint Malin are included as the non-PEO NEOs. |
| (3) | The calculation of average “compensation actually paid” to Non-PEO NEOs reflects the following adjustments: |
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| · · Fiscal Year · · Fiscal Year · · Fiscal Year · · Fiscal Year |
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| · 2023 · 2022 · 2021 · 2020 |
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| Summary Compensation Table Total | | | $2,651,896 | | | $2,349,485 | | | $2,139,370 | | | $2,118,714 |
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| Less: Grant Date Fair Value of Stock Awards in Fiscal Year | | | (1,450,000) | | | (1,220,000) | | | (1,220,000) | | | (1,220,000) |
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| Fair Value of Equity Awards Granted During the Year and Unvested at Year End | | | 1,044,019 | | | 1,264,936 | | | 917,177 | | | 920,493 |
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| Change in Fair Value of Equity Awards Granted in Prior Years and Unvested at Year End | | | (572,520) | | | (301,523) | | | (848,551) | | | (395,908) |
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| Change in Fair Value of Equity Awards Granted in Prior Years and Vested During the Year | | | 24,997 | | | (1,515) | | | 384,276 | | | 617,852 |
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| Compensation Actually Paid | | | $1,698,392 | | | $2,091,383 | | | $1,372,272 | | | $2,041,151 |
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| (4) | TSR assumes $100 was invested on December 31, 2019 in our common stock and assumes the reinvestment of dividends. |
| (5) | The peer group constitutes the National Association of Real Estate Investment Trusts (“NAREIT”) Equity Index. |
The tables corresponding to footnotes (1) and (3) above reflect adjustments to the value of awards as required by SEC rules. For a discussion of the assumptions and methodologies used to value the stock awards refer to Note 10. Equity of Notes to Consolidated Financial Statements included in our company’s 2023 Annual Report on Form 10-K.
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| LTC PROPERTIES, INC. | 54 | 2024 PROXY STATEMENT |
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The following chart is a description of the relationship between PEO and non-PEO NEOs “compensation actually paid,” versus LTC’s TSR and Peer Group TSR for each of the last four fiscal years. In general, “compensation actually paid” was lower when TSR was negative and recovered when TSR improved.
The following chart is a description of the relationship between PEO and non-PEO NEOs “compensation actually paid,” versus Net Income for each of the last four fiscal years. In general, “compensation actually paid” was lower when Net Income was lower and recovered when Net Income increased.
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| LTC PROPERTIES, INC. | 55 | 2024 PROXY STATEMENT |
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The following chart is a description of the relationship between PEO and non-PEO NEOs “compensation actually paid,” versus Diluted FAD, excluding non-recurring items, per share for each of the last four fiscal years. In general, “compensation actually paid” was lower when Diluted FAD, excluding non-recurring items per share, was lower, and recovered when Diluted FAD, excluding non-recurring items per share, increased again.
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| LTC PROPERTIES, INC. | 56 | 2024 PROXY STATEMENT |
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Financial Performance Measures
As further described and defined in the “Executive Compensation Discussion and Analysis” above, the following is an unranked list of financial performance measures that we consider most important in linking the “compensation actually paid” to our NEOs for 2023 with our performance.
| ◆ | Diluted FFO, excluding non-recurring items, per share |
| ◆ | Diluted FAD, excluding non-recurring items, per share |
In addition to the financial performance measures listed above, we view our stock price, upon which the value of all of our long-term incentive awards is dependent, as a key performance-based component of our executive compensation program in order to further align the interests of our senior management team with the interests of our stockholders.
