REITs Executive Compensation Guide

Compensation Committee The compensation committee plays a critical role in the design, administration and oversight of a public REIT’s executive compensation plans and arrangements. As a general matter, the compensation committee is responsible for: developing and implementing the REIT’s compensation philosophy, including determining the various components of executive compensation and establishing appropriate incentives to align compensation with financial and other performance; ■ approving and administering any equity incentive plans (as well as the related award agreements) in which the REIT’s executive officers are eligible to participate (see “Key Terms of Equity Incentive Plans and Award Agreements” below); ■ approving, or recommending that the board of directors approve, grants of equity awards to officers; ■ determining whether, and the degree to which, the REIT’s executive officers have achieved the performance goals applicable to their respective incentive compensation arrangements; ■ if permissible under the terms of the applicable plans, exercising upward or downward discretion to adjust the amount of incentive compensation paid or granted to executive officers based on actual performance; ■ engaging, retaining and compensating any independent compensation consultants, legal counsel or other advisors to assist the compensation committee in satisfying its responsibilities; and to the extent applicable, reviewing and discussing the REIT’s Compensation Discussion and Analysis (“ CD&A ”) disclosure in its annual proxy statement and producing the Compensation Committee Report required under SEC rules to be included in the REIT’s annual proxy statement. See “Compensation Discussion and Analysis” and “Compensation Committee Report” below. ■ ■

In designing a REIT’s executive compensation program, the compensation committee should consider a variety of factors, including, among others: ■ the REIT’s short-and long-term business needs and objectives; ■ the mix of compensation that will appropriately incentivize executive officers to achieve the REIT’s short-and long-term business needs and objectives (financial or otherwise); ■ the individual and company-wide performance measures that will appropriately encourage activities that are in the best interests of the REIT and its stockholders and that align with the REIT’s business needs and objectives; ■ how the REIT’s compensation programs promote the creation of long-term value for stockholders; ■ the levels of compensation necessary to recruit and retain qualified executive officers, including the levels of compensation paid to executive officers at similarly situated REITs; the tax, accounting and public reporting implications of executive compensation-related decisions, including the proxy statement disclosures that may result from the compensation committee’s decisions; how the REIT’s executive compensation programs, including the individual components of executive compensation, may create incentives for executive officers to take significant risks that are detrimental to the REIT, as well as measures that may be implemented to mitigate those risks 5 ; and ■ how stockholders and other stakeholders will perceive the REIT’s executive compensation programs, including the relationship between executive compensation and the REIT’s financial performance and the presence (or absence) of factors linking ESG initiatives to executive compensation, and any potential adverse impact on future Say-on-Pay votes (see “Say-on-Pay Proposals”) and the election of directors. ■ ■

5 Item 402(s) of Regulation S-K requires a company to discuss its compensation policies and practices as they relate to risk management practices and risk-taking incentives. See “Compensation Discussion and Analysis” below.

21 | 2023 Guide to REIT Executive Compensation