The Early 30: Compensation Trends | FTI Consulting

The Early 30: Compensation Trends from the First 30 Filed REIT Proxy Statements

Notable REIT Compensation Highlights

Corporate Finance & Restructuring | Real Estate

May 20, 2019

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FTI Consulting, Inc. has analyzed executive pay levels for the first 30 self-managed REITs that filed their proxy statements in 2019, excluding those without comparable year over-year data. The following provides a sneak peek of REIT compensation trends based on the analysis of Early 30 REIT filers and additional compensation highlights from the REIT sector. Although the figures below will likely change for the larger REIT population, trends from the Early 30 filers provide an initial indication of overall executive compensation trends in the REIT industry.

Compensation Trends at the Early 30

Initial trends for the 2019 REIT proxy season, in comparison to the 2018 REIT Early 30, are notable for larger increases in CEO compensation (5.3% in 2019 vs. 3.3% in 2018) and smaller increases overall (5.7% for all NEOs in 2019 vs. 8.3% in 2018). 2019 increases were fairly balanced between cash and LTI compensation, with increases of 6.3% and 5.5%, respectively. These increases represent a meaningful change in how REITs allocated additional pay, as 2018 included a modest 1.4% increase in cash but a 14.8% increase in LTI compensation. Executive Chair compensation continues to decrease as the narrative around the value that this role provides to a company is getting more attention, particularly from investors. It is largely believed that while the executive Chair role provides significant value during transitional periods, over the longer term, compensation for this role should be reduced as the broader executive management team gains experience and expands its relationships.

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