REITs Executive Compensation Guide

Pay-Versus-Performance

■ Determine the 3 to 7 additional performance measures for the tabular disclosure - REITs are expected to generally use 3-5 key metrics that are used within the short-term and long-term incentive plans. Companies (except for smaller reporting companies) will be required to provide the information for three years in the first proxy or information statement in which they provide the disclosure, adding another year of disclosure in each of the two subsequent annual proxy filings that require the Item 402(v) disclosure. Smaller reporting companies initially will be required to provide the information for two years, adding an additional year of disclosure in the subsequent annual proxy or information statement that requires this disclosure. In addition, a smaller reporting company will only be required to tag the information using Inline XBRL data beginning in the third filing in which it provides pay-versus-performance disclosure, instead of the first.

The new rules apply to all reporting companies, except foreign private issuers, registered investment companies, and EGCs. Smaller reporting companies are required to provide disclosure under Item 402(v) of Regulation S-K, but the disclosure is scaled for those companies, consistent with the existing scaled executive compensation disclosure requirements applicable to smaller reporting companies. 19 Specifically, smaller reporting companies would: ■ only be required to present three, instead of five, fiscal years of disclosure under new Item 402(v) of Regulation S-K; ■ not be required to disclose amounts related to pensions for purposes of disclosing executive compensation actually paid;

not be required to present peer group TSR; be permitted to provide two years of data, instead of three, in the first applicable filing after the rules became effective; be required to provide disclosure in the prescribed table in Inline XBRL format beginning in the third filing in which the smaller reporting company provides pay-versus-performance disclosure; and

■

■

■

Pay-Versus-Performance Table 20 As a result of the SEC’s adoption of new Item 402(v) of Regulation S-K, registrants who are subject to the new rules will be required to provide tabular disclosure in the following format:

Year

Summary Compensation Table Total for PEO

Compensation Actually Paid to PEO

Average Summary

Average Compensation Actually Paid to Non-PEOs NEOs

Average Compensation Actually Paid to Non-PEOs NEOs

Net Income [Company Selected Measure]

Compensation Table Total for Non-PEO NEOs

Total Shareholder Return

Peer Group Total Shareholder Return

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Year 1 $

$

$

$

$

$

Year 2 $

$

$

$

$

$

Year 3 $

$

$

$

$

$

Year 4 $

$

$

$

$

$

Year 5 $

$

$

$

$

$

19 A company qualifies as a “smaller reporting company” if: ■ it has public float of less than $250 million or ■ it has less than $100 million in annual revenues and ■ no public float or

public float of less than $700 million 20 See Item 402(v) of Regulation S-K.

53 | 2023 Guide to REIT Executive Compensation