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LXP Industrial Trust – ‘DEF 14A’ on 4/10/23

On:  Monday, 4/10/23, at 4:01pm ET   ·   Accession #:  1539497-23-616   ·   File #:  1-12386

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/10/23  LXP Industrial Trust              DEF 14A               12:6.4M                                   Nuvo Group, Inc./FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                          HTML   1.46M 
 6: R1          Cover                                               HTML     14K 
 7: R2          Pay vs Performance Disclosure                       HTML    196K 
10: XML         IDEA XML File -- Filing Summary                      XML     24K 
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11: JSON        XBRL Instance as JSON Data -- MetaLinks               46±    53K 
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 i LXP INDUSTRIAL TRUST  

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

One Penn Plaza, Suite 4015

New York, New York 10119-4015

(212) 692-7200

NOTICE OF 2023 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 23, 2023

To the Shareholders of LXP Industrial Trust:

The 2023 Annual Meeting of Shareholders of LXP Industrial Trust, a Maryland real estate investment trust, will be held on Tuesday, May 23, 2023, at 2:00 p.m., Eastern time, virtually via the internet at www.meetnow.global/MGV4HMU for the following purposes:

Only holders of record at the close of business on March 20, 2023 are entitled to notice of and to vote at the 2023 Annual Meeting of Shareholders or any adjournment or postponement thereof.

On behalf of our Board of Trustees, we thank you for your support and participation.

Whether or not you expect to participate at the 2023 Annual Meeting of Shareholders, we urge you to authorize your proxy electronically via the Internet or by completing and returning the proxy card if you requested paper proxy materials. Voting instructions are provided in the Important Notice Regarding the Availability of Proxy Materials for the LXP Industrial Trust Shareholder Meeting to be Held on May 23, 2023 (the “Notice”), or, if you requested printed materials, the instructions are printed on your proxy card and included in the accompanying proxy statement. Any person giving a proxy has the power to revoke it at any time prior to the meeting and shareholders who participate in the meeting may withdraw their proxies and vote in person.  

PROXY STATEMENT
FOR THE 2023 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 23, 2023

The Board of Trustees of LXP Industrial Trust, a Maryland real estate investment trust, is soliciting proxies to be voted at the 2023 Annual Meeting of Shareholders, which we refer to herein as the Annual Meeting. The Annual Meeting will be held Tuesday, May 23, 2023, at 2:00 p.m., Eastern time, virtually via the internet at www.meetnow.global/MGV4HMU. This proxy statement summarizes the information you need to know to vote by proxy or in person via webcast at the Annual Meeting or any postponements or adjournments thereof. You do not need to attend the Annual Meeting in person via webcast in order to have your shares voted at the Annual Meeting.

All references to the “Trust,” “Company,” “LXP,” “we,” “our” and “us” in this proxy statement mean LXP Industrial Trust. All references to “Shareholder” and “you” refer to a holder of shares of beneficial interest, par value $0.0001 per share, of the Company, classified as “Common Stock,” which we refer to as common shares or shares, as of the close of business on March 20, 2023, which we refer to as the Record Date.

TABLE OF CONTENTS

2022 COMPANY PERFORMANCE¹

Proactive Asset Management

Industrial Investment Opportunities

Asset Dispositions

Strong Balance Sheet

Capital Markets Strategy

ESG+R Strategy

_____________________

(1) See Appendix A for definitions and reconciliations of Non-GAAP financial measures.

PROPOSALS

PROPOSAL NO. 1 ELECTION OF TRUSTEES

Our Board of Trustees currently consists of nine trustees and no vacancies. All of our current trustees are nominated for election at the Annual Meeting, with the exception of Richard S. Frary, who, in April 2022, announced he would not stand for reelection at the Annual Meeting. Our Board of Trustees has determined to reduce the size of the Board of Trustees to eight trustees effective at the Annual Meeting. Our Board of Trustees has continually refreshed since 2015 and our Board of Trustees members have a diverse range of relevant backgrounds.

C = Chair

Each nominee currently serves on our Board of Trustees and has consented to being named in this proxy statement and to serve if elected. All trustees serve until our 2024 Annual Meeting of Shareholders or their earlier resignation or removal and until their respective successors, if any, are elected and qualify. Background information relating to our nominees begins on page 8 of this Proxy Statement.

A majority of the votes cast at the Annual Meeting will be sufficient to elect a trustee. The enclosed proxy, if signed, dated and returned, and any proxy properly authorized via the Internet or telephone, unless withheld, a broker non-vote or a contrary vote is indicated, will be voted FOR the election of the eight nominees. In the event any such nominee becomes unavailable for election, votes will be cast, pursuant to authority granted by the proxy, for such substitute nominee as may be nominated by our Board of Trustees. All trustees will serve until our 2024 Annual Meeting of Shareholders or their earlier resignation or removal and until their respective successors, if any, are elected and qualify.

PROPOSAL NO. 2 ADVISORY RESOLUTION TO APPROVE THE
COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”) and Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), require that we seek an advisory resolution from our Shareholders to approve the compensation awarded to our named executive officers as disclosed in this proxy statement. Although the advisory resolution is non-binding, the Board of Trustees and the Compensation Committee will review the results of the vote and will consider our Shareholders’ views and take them into account in future determinations concerning our executive compensation programs. Please refer to the section entitled “Compensation Discussion and Analysis” for details about our executive compensation programs.

A proposal in the form of the following resolution will be submitted for a non-binding, advisory vote at the Annual Meeting:

“RESOLVED, that the Shareholders approve, on a non-binding, advisory basis, the compensation of the Trust’s named executive officers set forth in the 2023 Proxy Statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the Summary Compensation Table and accompanying compensation tables and related information).”

The advisory resolution to approve the compensation of our named executive officers requires a majority of the votes cast on the proposal at the Annual Meeting. Although the vote on this Proposal No. 2 is a nonbinding, advisory vote, the Board of Trustees will carefully consider the voting results.

PROPOSAL NO. 3 ADVISORY RECOMMENDATION ON THE
FREQUENCY OF FUTURE ADVISORY VOTES ON EXECUTIVE
COMPENSATION

In addition to requesting the non-binding, advisory vote on executive compensation, the Dodd-Frank Act also requires that once every six years we seek shareholder approval of how often we seek non-binding, advisory votes on executive compensation. The Dodd-Frank Act requires that we present every one (1), two (2) or three years (3), or abstain as alternatives for shareholders.

The Board of Trustees has determined that a non-binding, advisory vote on executive compensation every one year is preferable primarily because of the benefits of receiving input from shareholders outweighs the costs of including the vote in a proxy statement.

A proposal in the form of the following resolution will be submitted for a non-binding, advisory vote at the Annual Meeting:

“RESOLVED, that the Shareholders approve, on a non-binding, advisory basis, the presentation of an advisory vote on executive compensation either every one (1) year, two (2) years or three (3) years.”

The alternative that receives a majority of the votes cast at the Annual Meeting will be the option approved and recommended by Shareholders. In the event that no alternative receives a majority, the alternative that receives the most votes will be deemed recommended by the Shareholders. Although the vote on this Proposal No. 3 is a non-binding, advisory vote, the Board of Trustees will carefully consider the voting results.

PROPOSAL NO. 4 RATIFICATION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM

The Audit and Cyber Risk Committee has appointed Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the fiscal year ending December 31, 2023. Although Shareholder ratification of the appointment of our independent registered public accounting firm is not required by our bylaws or otherwise, we are submitting the selection of Deloitte for ratification as a matter of good corporate governance practice. Even if the selection is ratified, the Audit and Cyber Risk Committee in its discretion may appoint an alternative independent registered public accounting firm if it deems such action appropriate. If the Audit and Cyber Risk Committee’s selection is not ratified by the Shareholders, the Audit and Cyber Risk Committee will take that fact into consideration, together with such other factors it deems relevant, in determining its next selection of an independent registered public accounting firm.

There are no affiliations between us and Deloitte’s partners, associates or employees, other than as pertaining to Deloitte’s engagement as our independent registered public accounting firm. Representatives of Deloitte are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and to respond to appropriate questions.

Ratification of the appointment of Deloitte as our independent registered public accounting firm for the fiscal year ending December 31, 2023 requires the affirmative vote of a majority of the votes cast on the proposal at the Annual Meeting.

Board of Trustees and Corporate Governance

The following information relates to the nominees for election as our trustees:

Board Skills

The nominees for our Board of Trustees have a diverse skill set:

The absence of a check mark for a particular skill does not mean that the trustee does not possess that qualification, skill, or experience. We look to each trustee to be knowledgeable in these areas; however, the check mark indicates that the item is a particularly prominent qualification, skill, or experience that the trustee brings to our Board of Trustees.

Our Board of Trustees believes that finance/analysis, commercial real estate and strategic planning are core skills for its members. Our Board of Trustees seeks candidates with a variety of skills and in recent years have added additional corporate governance, logistics and cybersecurity expertise. The following summarizes the skills for each nominee for our Board of Trustees:

Board Demographics

Our Board of Trustees is focused on certain demographics as part of its refreshment process. During 2022, we met with shareholders holding in excess of 58% of our common shares as of December 31, 2022, including shareholders holding 44% of our common shares who met with independent members of our Board of Trustees, to discuss, among other things, the demographics of our Board of Trustees. The following demographic information applies to our nominees.

Diversity:

Gender	Racial/Ethnic

Tenure:

Outside Commitments:

Independence:

CORPORATE RESPONSIBILITY

We seek to create a sustainable environmental, social, governance and resilience (“ESG+R”) platform that enhances both our company and shareholder value. We are committed to supporting our shareholders, employees, tenants, suppliers, creditors, and communities as we execute on our ESG+R objectives and initiatives. The objectives below are integrated throughout our investment process and contribute to our ongoing long-term success on behalf of our shareholders.

Because the properties in our portfolio are primarily subject to net leases where tenants are responsible for maintaining the buildings and are in control of their energy usage and environmental sustainability practices, our ability to implement ESG+R initiatives throughout our portfolio may be limited.

The Nominating and ESG Committee of our Board of Trustees oversees our ESG+R strategy and initiatives.

Environmental, Sustainability and Climate Change

Developing strategies that reduce our environmental impact and operational costs is a critical component of our ESG+R program.

Our 10-Year Environmental Targets¹

Social

We believe that actively engaging with stakeholders is critical to our business and ESG+R efforts, providing valuable insight to inform strategy, attract and retain top talent, and strengthen tenant relationships.

We maintain a variety of training programs for our employees, including those for sustainability, accounting, cybersecurity, harassment, anti-corruption/bribery and human rights. These training programs include departmental and employees specific training. We also maintain a professional development policy to provide employees with professional development opportunities to increase their skills and enhance their contributions to us. We believe providing professional development to our employees is an investment in their careers and our future. Under the policy, employees plan with their manager to select courses and other training mediums that are in line with our business to enhance their careers.

We focus on our diversity strategy to ensure appropriate gender representation and appropriate racial and ethnic representation at the executive and workforce levels. As of December 31, 2021, 61% of our full-time employees and 47% of our executive employees were female, and 42% of our full-time employees and 11% of our executive employees were non-white. As of December 31, 2022, 59% of our full-time employees and 18% of our executive employees were female, and 45% of our full-time employees and 9% of our executive employees were non-white. We believe our diversity, equity and inclusion efforts are making a positive impact on our demographics.

Additional Resources on our Social Priorities

Resilience

We believe that our resilience to climate change-related physical and transition risks is critical to our long-term success. long-term success.

Key Commitments

Governance

Transparency to our stakeholders is essential. We pride ourselves on providing our stakeholders with regular reports and detailed disclosures on our operational and financial health and ESG+R efforts.

Reporting Initiatives	Awards and Recognition

In addition to the items disclosed elsewhere, we maintain the following corporate governance practices:

MANAGEMENT AND CORPORATE GOVERNANCE

Our Board of Trustees

Our Board of Trustees held 14 meetings during the fiscal year ended December 31, 2022. Each individual that was a trustee at the time of such meetings attended at least 75% of the aggregate of the total number of meetings of our Board of Trustees and all committees of the Board of Trustees on which he or she served during his or her tenure.

We expect all trustees to attend each annual meeting of shareholders, but from time to time other commitments prevent all trustees from attending each meeting. All of our then trustees attended the 2022 Annual Meeting of Shareholders, which was held on May 24, 2022.

Committees of our Board of Trustees

Our Board of Trustees has three standing committees: the Audit and Cyber Risk Committee, the Compensation Committee and the Nominating and ESG Committee. Each of our committees consists solely of trustees meeting the independence requirements of applicable NYSE rules and our independence standards and are “non-employee directors” within the meaning of Rule 16b-3 of the Exchange Act, and our Audit and Cyber Risk Committee consists solely of trustees meeting the independence requirements of Rule 10A-3 under the Exchange Act.

Each committee operates under a written charter, all of which were reviewed by the Nominating and ESG Committee, the respective members of the applicable committee and the Board of Trustees during 2022. The charters of each of our standing committees are available on our web site at www.lxp.com.

In an effort led by the Nominating and ESG Committee, each committee annually reviews its charter and makes recommended revisions.

Each committee has the authority to consult with its own legal or other advisors, all in accordance with the authority granted to such committee under its charter. Each committee may form and delegate authority to subcommittees when and as such committee deems necessary and appropriate.

Board Leadership Structure and Strategy and Risk Oversight

Our board leadership structure currently consists of an independent Lead Trustee and an executive Chairman. Our Board of Trustees believes that it is appropriate to combine the positions of Chairman and Chief Executive at this time due to Mr. Eglin’s critical role in creating and implementing our current strategy. Mr. Eglin has guided us through various market cycles and our transformation from a diversified net-lease REIT into an industrial REIT, and our Board of Trustees believes that he is the appropriate person to continue to serve as our Chairman.

Our Board of Trustees believes that a Lead Trustee, who is independent, is necessary and appropriate to provide additional, independent leadership to the Board. Our Corporate Governance Guidelines provide that the Lead Trustee shall have the authority and specific responsibilities set forth under “Corporate Responsibility—Governance—Independent Lead Trustee,” above.

Mr. Frary has been our independent Lead Trustee since February 6, 2017 and will continue in this role until the Annual Meeting. In accordance with the retirement policy in our Corporate Governance Guidelines, Mr. Frary is not standing for reelection at the Annual Meeting because he turned age 75 in September 2022. Early in 2022, the Nominating and ESG Committee began discussing a replacement Lead Trustee. Ms. Koeneman, as Chair of the Nominating and ESG Committee, consulted each trustee regarding the replacement Lead Trustee. Ms. Koeneman and Mr. Eglin met with outside advisors regarding a replacement Lead Trustee. In September 2022, the Nominating and ESG Committee approved a resolution to recommend Jamie Handwerker as the Lead Trustee following the Annual Meeting. Ms. Handwerker has experience as a sell-side analyst, a hedge fund manager and a direct real estate investor and she is also an independent board member of another publicly traded real estate investment trust, which the Nominating and ESG Committee believes makes her a suitable candidate for Lead Trustee.

Strategy and risk are an integral part of our Board of Trustees and Committee deliberations throughout the year. Management regularly updates, and reports to our Board of Trustees with respect to, our business plan. Management also performs a quarterly fraud risk assessment, which is reported to our Board of Trustees. The quarterly fraud risk assessment assesses the critical risks we face (e.g., strategic, operational, financial, legal/regulatory, and reputational), their relative magnitude and management’s actions to mitigate these risks. In addition, the Audit and Cyber Risk Committee assists our Board of Trustees with the oversight of our risk management program, including its oversight of our internal audit function, enterprise risk management and cybersecurity risks.

Information Security

As a smaller company, we use third-party vendors to assist us with our network and information technology requirements. Since 2019, BDO USA, LLC has provided us with virtual chief technology officer services, including cybersecurity. In 2022, Mr. Gupta, a cyber security expert, joined our Board of Trustees. Mr. Gupta has significant experience in, among other areas, emerging technologies and coordinating national security and technology policy.

On at least a quarterly basis, we and BDO USA, LLC report to our Board of Trustees or the Audit and Cyber Risk Committee on information technology matters. On a regular basis, our Audit and Cyber Risk Committee commissions an internal audit or assessment of our cybersecurity practices and receives a report from our internal auditor on our cybersecurity risks. In addition, our management participates in annual tabletop exercises and simulations as part of our business continuity, incident response and disaster recovery planning.

The net expenses we incurred from information security breaches, penalties and settlements over the last three years have been immaterial and nominal relative to total revenue. We did not experience an information security breach in the last fiscal year.

Shareholder Nominations

Our Board of Trustees believes that the Nominating and ESG Committee is qualified and in the best position to identify, review, evaluate and select qualified candidates for membership on our Board of Trustees based on the criteria described in the next paragraph. However, the Nominating and ESG Committee intends to consider nominees recommended by shareholders, but only if the submission of a recommendation includes a current resume and curriculum vitae of the candidate, a statement describing the candidate’s qualifications, contact information for personal and professional references, the name and address of the shareholder who is submitting the candidate for nomination, the number of shares which are owned of record or beneficially by the submitting shareholder and a description of all arrangements or understandings between the submitting shareholder and the candidate for nomination. Submissions should be made to: LXP Industrial Trust, One Penn Plaza, Suite 4015, New York, NY 10119-4015, Attention: Secretary. The Nominating and ESG Committee’s consideration process includes completion of a standard questionnaire, a background check and interviews with the Nominating and ESG Committee and other members of the Board of Trustees. The Nominating and ESG Committee has no obligation to recommend such candidates for nomination.

In recommending candidates for membership on our Board of Trustees, the Nominating and ESG Committee’s assessment includes consideration of issues of judgment, diversity, expertise, and experience. The Nominating and ESG Committee believes that a diverse board is one that includes differences of viewpoints, professional experience, education, skill, and other individual qualities and attributes that contribute to board heterogeneity. The Nominating and ESG Committee also considers other relevant factors as it deems appropriate. Generally, qualified candidates for board membership should (i) demonstrate personal integrity and moral character, (ii) be willing to apply sound and independent business judgment for the long-term interests of shareholders, (iii) possess relevant business or professional experience, technical expertise, or specialized skills, (iv) possess personality traits and backgrounds that fit with those of the other trustees to produce a collegial and cooperative environment, (v) be responsive to our needs, and (vi) have the ability to commit sufficient time to effectively carry out the duties of a trustee.

The Nominating and ESG Committee follows legal and regulatory requirements, such as those relating to independence, and gives due consideration to characteristics, such as race, gender, ethnicity and sexual orientation.

Our Board of Trustees believes its effectiveness is enhanced by being comprised of individuals with diverse skills, experience and backgrounds that are relevant to the role of our Board of Trustees and the needs of our business. The objective of our Board of Trustees is to foster a diverse and inclusive culture which solicits multiple perspectives and views and is free of conscious or unconscious bias and discrimination. Accordingly, the Nominating and ESG Committee regularly reviews the changing needs of our business and the skills, experience and backgrounds of its members, with the intention that our Board of Trustees will be periodically “renewed” as certain Trustees rotate off and new Trustees are recruited. Our Board of Trustee’s commitment to diversity and “renewal” will be tempered by the need to balance change with continuity, experience and a collaborative approach with each other and our Chief Executive Officer.

After completing this evaluation and review, the Nominating and ESG Committee makes a recommendation to our Board of Trustees as to the persons who should be nominated by our Board of Trustees, and our Board of Trustees determines the nominees after considering the recommendation and report of the Nominating and ESG Committee.

To the extent there is a vacancy on our Board of Trustees, the Nominating and ESG Committee will either identify individuals qualified to become trustees through relationships with our trustees or executive officers or by engaging a third party. Our Board of Trustees currently consists of nine individuals, but the size of our Board of Trustees is expected to decrease following the Annual Meeting due to Mr. Frary not standing for reelection. However, the size of our Board of Trustees may increase in the future by a limited number to further diversify and refresh the membership of our Board of Trustees.

In addition, our bylaws provide that any shareholder that complies with the “advance notice” or “proxy access” provisions in our bylaws may also nominate individuals for election to our Board of Trustees. See “Q&A—How do I nominate a trustee or submit a proposal for the 2024 Annual Meeting of Shareholders?”

Shareholder Communications

Parties wishing to communicate directly with our Board of Trustees, an individual trustee, the Lead Trustee or the non-management members of our Board of Trustees as a group should address their inquiries to our General Counsel by mail sent to our principal office located at One Penn Plaza, Suite 4015, New York, New York 10119-4015. The mailing envelope should contain a clear notification indicating that the enclosed letter is an “Interested Party/Shareholder-Board Communication,” “Interested Party/Shareholder-Trustee Communication,” “Interested Party/Shareholder-Lead Trustee Communication” or “Interested Party/ Shareholder-Non-Management Trustee Communication,” as the case may be.

Complaint Procedures for Accounting and Auditing Matters

We have established “whistleblower” procedures set forth in our Code of Business Conduct and Ethics for (1) the receipt, retention and treatment of complaints and allegations regarding accounting, internal accounting controls or auditing matters (“Accounting Matters”) and (2) the confidential, anonymous submission by Covered Persons (as defined therein) of concerns regarding Accounting Matters. Under these procedures, anyone with concerns regarding accounting matters or otherwise, may, as applicable, report their concerns to our compliance hotline by telephone at 844-502-7786 or on the web at http://LXP.ethicspoint.com. Complaints are reviewed by the Chairman of the Audit and Cyber Risk Committee and our General Counsel, as appropriate, and reported to our Board of Trustees on an as needed basis, but not less than quarterly. In the event of a complaint, our internal and external auditors are informed and we work with our outside legal counsel to investigate the complaint.

Periodic Reports, Code of Ethics, Committee Charters and Corporate Governance Guidelines

Our Internet address is www.lxp.com. We make available free of charge through our web site our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, other filings with the SEC, and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after we electronically file such materials with the SEC. We also have made available on our web site copies of our current Audit and Cyber Risk Committee Charter, Compensation Committee Charter, Nominating and ESG Committee Charter, Code of Business Conduct and Ethics, and Corporate Governance Guidelines. In the event of any changes to these charters or the code or the guidelines, updated copies will also be made available on our web site. The contents of our website are not incorporated into this Proxy Statement.

You may request a copy of any of the documents referred to above, without charge to you, by contacting us at the following address, email or telephone number:

LXP Industrial Trust
One Penn Plaza, Suite 4015 New York, NY 10119-4015

Attention: Investor Relations ir@lxp.com

(212) 692-7200

Certain Relationships and Related Transactions

Policy. Under our policy regarding the review, approval and ratification of any related party transaction, the Audit and Cyber Risk Committee or the Board of Trustees (consisting of all of the non-conflicted members) reviews the relevant facts and circumstances of each related party transaction, including whether the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and the extent of the related party’s interest in the transaction, taking into account the conflicts of interest and corporate opportunity provisions of our Code of Business Conduct and Ethics, and the Audit and Cyber Risk Committee or the Board of Trustees (consisting of all of the non-conflicted members) either approves or disapproves the related party transaction. Any related amendment to, or waiver of any provision of, our Code of Business Conduct and Ethics for executive officers or trustees must be approved by the Nominating and ESG Committee (consisting of the non-conflicted members) and will be promptly disclosed to our shareholders as required by applicable laws, rules or regulations including, without limitation, the requirements of the NYSE.

Any related party transaction will be consummated and continue only if the Audit and Cyber Risk Committee or the Board of Trustees (consisting of all of the non-conflicted members) has approved or ratified such transaction in accordance with the guidelines set forth in the policy. For purposes of our policy, a “Related Party” is:

Indemnification Agreements. Our trustees and certain of our executive officers have entered into indemnification agreements with us. Pursuant to these agreements, we agree to indemnify the trustee or executive officer who is a party to such an agreement against any and all judgments, penalties, fines, settlements, and reasonable expenses (including attorneys’ fees) actually incurred by the trustee or executive officer or in a similar capacity for any other entity at our request. These agreements include certain limitations on our obligations in certain circumstances, particularly in situations in which such indemnification is prohibited or limited by applicable law.

Hedging Policy

We have adopted a policy that prohibits our trustees, officers and employees, as well as certain of their immediate family members, from buying or selling Company securities while in possession of material, non-public information. In addition, we have adopted a policy prohibiting trustees, officers, and employees from pledging our securities and from establishing short positions and hedging transactions, including through prepaid variable forwards, equity swaps, collars and exchange funds.

Charitable Contributions

During 2022, we did not make any charitable contribution to any tax-exempt organization in which any independent trustee serves as an executive officer.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee during 2022 is or has been one of our executive officers. Further, none of our executive officers has ever served as a member of the compensation committee or as a director of another entity whose executive officers served on our Compensation Committee or as a member of our Board of Trustees.

Employee Stock Purchase Plan

We maintain an Employee Stock Purchase Plan, which provides an opportunity for employees to elect to purchase common shares at 95% of the fair market value on the date of purchase. Employees participate through payroll deductions.

EXECUTIVE OFFICERS

The following table sets forth certain information as of the close of business on the Record Date concerning our executive officers:

COMPENSATION OF EXECUTIVE OFFICERS

Compensation Discussion and Analysis

Introduction.

This Compensation Discussion and Analysis section discusses the compensation policies and programs for our named executive officers.

2022 Company Highlights. During 2022, our management team accomplished the following¹:

Named Executive Officers. Our named executive officers are:

Compensation Committee Responsibility and Philosophy. The Compensation Committee administers the compensation policies and programs for our named executive officers and regularly reviews and approves our compensation strategy and principles to ensure that they are aligned with our business strategy and objectives, encourage high performance, promote accountability and ensure that management’s interests are aligned with the interests of our shareholders. The Compensation Committee believes that the compensation program should further both short-term and long-term business goals and strategies while enhancing shareholder value. In keeping with this philosophy, the compensation program’s objectives are to:

The Compensation Committee believes that the business judgment of its members is necessary to properly evaluate and design an executive compensation program.

2022 “Say on Pay” Advisory Vote

In 2022, approximately 96.3% of our shareholders (excluding broker non-votes) voted “FOR” the compensation of our named executive officers as disclosed in the related proxy statement, which has been consistent with the votes for the previous years.

Based on such approvals, the Compensation Committee has largely maintained the compensation framework approved in 2022 for 2023 with modifications for our 2023 business plan objectives.

Shareholder Engagement

We regularly engage with our shareholders on a variety of matters, including:

The discussions with our shareholders around executive compensation also supported the Compensation Committee’s decision to largely maintain the compensation framework approved in prior years for 2023.

Executive Compensation Best Practices.

The following is a summary of our executive compensation practices:

Independent Compensation Consultant

During 2022, the Compensation Committee retained Ferguson Partners Consulting, L.P., a nationally known executive compensation and benefits consulting firm, which we refer to as FPC. Other than reviewing and advising the Compensation Committee with respect to executive and trustee compensation, FPC does not provide any non-executive compensation or other services for us. As a result, FPC is an independent compensation consultant. Management does not retain any executive compensation consultant.

Peer Group Benchmarking Analysis.

We are always competing for the best talent with our direct industry peers and with the broader market. Accordingly, the Compensation Committee regularly reviews the market data, pay practices and ranges of our “peer” companies and the broader market to ensure that we continue to offer a relevant and competitive executive pay program each year. Throughout this Compensation Discussion and Analysis, we refer to two distinct peer groups, as described below, which were recommended by the Compensation Committee’s independent compensation consultant and approved by the Chair of the Compensation Committee in 2022.

This competitor peer group helped the Compensation Committee understand how each named executive officer’s total compensation compares with the total compensation for reasonably similar positions at our most direct REIT competitors.

The size-based peer group helped the Compensation Committee compare our overall compensation practices against a broader mix of REITs to ensure that our compensation practices are reasonable in light of the size of our organization. The Compensation Committee generally focuses on the average of the two peer groups, except in cases where such average is determined to be excessive in light of the circumstances.

Although the two peer groups are comprised solely of REITs, we also compete with other public and private companies in the New York metropolitan, Dallas and West Palm Beach marketplaces for talent. Therefore, we also consider other information regarding market trends in compensation in addition to the data derived from these peer group reviews.

FPC prepared a compensation study for the Compensation Committee that contains:

Determining the Amount of Each Element of Compensation.

The Compensation Committee reviews the performance of each of our named executive officers, including our Chief Executive Officer, on an annual basis. The Compensation Committee considers, among other things, (1) the scope of the individual’s responsibilities, including the demands and profile of the positions held by the individual, (2) the individual’s experience and tenure with us, (3) the individual’s performance and contribution to our performance, (4) our performance against annual objectives set forth in management’s business plan, and (5) competitive salaries. The Compensation Committee considers the results of compensation studies prepared for it by FPC and by industry and trade associations.

Our Chief Executive Officer assists in the annual review of our named executive officers and makes recommendations to the Compensation Committee. However, the Compensation Committee makes all determinations with respect to the actual compensation of our named executive officers, including our Chief Executive Officer.

The independent compensation consultant provides the following services to the Compensation Committee:

Compensation Risk Assessment

The Compensation Committee does not believe our executive compensation programs encourage unnecessary or excessive risk taking for the following reasons:

While we are focused on long-term shareholder value, the Compensation Committee believes that three-year vesting for share awards is an appropriate length of time due to the need to retain our executives and reward results. Furthermore, our Compensation Committee believes the overall amount of our long-term incentive awards is appropriate in relation to our executive compensation program.

We also pay dividends currently on the time-based portion of our annual long-term incentive awards and dividends accrue on the performance-based portion of our annual long-term incentive awards and are paid upon, and to the extent of, vesting. Since we are a REIT, dividends are a necessary part of our business. Furthermore, all dividends are declared by our Board of Trustees and none of the dividends on long-term incentive awards are preferential. Accordingly, we do not believe that dividends are a risk in our compensation arrangements.

We maintain a clawback policy that allows for the recoupment of certain compensation if and to the extent:

Pay for Performance.

A significant portion of the total target compensation for our named executive officers is in the form of performance-based incentive compensation, with the only “fixed” or “guaranteed” compensation in the form of annual base salaries and time-based long-term incentive awards.

In setting the pre-defined objective performance measures for the annual cash incentive target opportunity, multiple factors are considered and the plan is balanced across our operations with reference to our business plan.

For 2022, our executive compensation plan resulted in the following pay mix for the total target compensation:

Recap of 2022 Executive Compensation Program.

The 2022 executive compensation program consisted of (1) base salary, (2) annual cash incentive opportunity, and (3) annual long-term incentive opportunity.

Base Salaries and Annual Cash Incentive Awards. Base salaries and annual cash incentives awarded under the 2022 executive compensation program were as follows:

The target annual cash incentive opportunity for our named executive officers was a percentage of base salary as follows: 112.5% for Mr. Eglin; and 100% for the others. Seventy percent (70%) of the annual cash incentive opportunity was based on pre-defined objective measures (from January 1, 2022 to December 31, 2022) and 30% was based on subjective measures.

Objective Measures

The following sets forth the pre-defined objective measures, the weighting and the rationale for each measure. In the first quarter of 2023, the Compensation Committee evaluated the Company’s performance on the objective and subjective measures and made the determinations as detailed below.

Rationale: External growth, particularly in our development pipeline, was an important part of our initial 2022 business plan.

Result: As interest rates continued to rise during 2022 and our share price continued to decline, we allocated capital towards repurchasing our common shares over committing to additional development projects or acquiring existing facilities. As a result, our investments volume fell short of the threshold and our development starts fell short of target. We did achieve two new development starts on a two building project in Tampa, Florida. Our development pipeline continues to be robust and as of December 31, 2022, we had 537 acres available for future development.

Rationale: Our 2022 disposition plan contemplated the sale of substantially all of our remaining office/other properties and certain industrial properties outside of our target markets and our proportionate share of non-consolidated sales.

Result: Due to the deterioration of the acquisition market, management remained a prudent seller of other assets and sold limited industrial assets outside of our target markets and used the proceeds to fund the development pipeline. Between threshold and target was achieved, but the effort expended by management was significant.

Rationale: We believe successful portfolio management safeguards income and supports internal growth. Our investment strategy is based on our belief that warehouse/distribution rents have better growth potential than suburban office rents. Accordingly, for 2022, we continued to include two important metrics related to leasing. The first was industrial same store NOI growth and the second was warehouse/distribution leasing spreads. The leasing spreads are the difference between the expiring rent per square foot and the renewal or new rent per square foot for leases signed or renewed during 2022.

Result: As we marked our industrial rents to market, we achieved many successful leasing outcomes. During 2022, we completed 4.0 million square feet of industrial new leases and lease extensions, raising Base and Cash Base Rents by 30.7% and 25.6%, respectively, with average annual escalators of 3.3%.

Rationale: We take pride in our balance sheet and the opportunities it provides. In 2013, we became an investment-grade rated issuer and we continually seek to maintain our ratings.

Result: During 2022, we continued to manage our balance sheet in favor of flexibility over leveraged returns. We refinanced our credit facility and we settled a forward equity transaction from May 2021 which, net of our 2022 common share repurchases, resulted in 3.9 million common shares issued at $13.53 per share when our share price was significantly lower. Our credit ratings were unchanged over the course of 2022.

Rationale: In 2020, our management commenced, in earnest, efforts to establish an ESG platform. We believe that ESG focused investing and operations are an important contributor to our ongoing long-term success. However, due to the properties in our portfolio primarily being subject to net leases where tenants are responsible for maintaining the buildings and are in control of their energy usage and environmental sustainability practices, our ability to implement ESG initiatives throughout our portfolio may be limited. Nonetheless, we hold our management accountable for furthering ESG initiatives by incorporating ESG metrics into our executive compensation plans. For 2022, we selected 11 ESG metrics that we believed are important objective measurements further implementing our ESG platform, including scoring from third-party evaluators, installation of energy saving equipment and framework alignment.

Result: Our ESG program continued to expand in 2022 and the results are beginning to show through our scores from third-party evaluators. We significantly expanded our corporate responsibility report published in 2022; aligning it with additional frameworks.

The determination of the objective measurements resulted in each named executive officer being entitled to 120% of the target objective portion of the 2022 annual incentive opportunity, which is down from 173.3% for 2021. The Compensation Committee retains the ability, in its sole discretion, to clawback any amounts, as appropriate, if audited financial results would provide for lower incentive payouts.

Subjective Measures

With respect to the subjective portion of the annual cash incentive opportunity, the Compensation Committee made the following determinations:

Overall, the subjective award percentage for 2022 decreased year over year due to our common share performance despite our strong operating performance. Our Compensation Committee believes that our named executive officers worked well as a team to overcome the challenges that 2022 presented and substantially complete our transformation to an industrial focused REIT.

Annual Long-Term Incentive Award. The 2022 annual long-term incentive award was disclosed in the proxy statement for the 2022 Annual Meeting of Shareholders. The awards granted were as follows:

The long-term incentive opportunity for the 2022 executive compensation program for our named executive officers was a long-term incentive award consisting of a mix of performance-based non-vested shares and service-based non-vested shares. Vesting for performance-based non-vested shares is tied to our TSR relative to other REITs, which we think is more appropriate than absolute TSR. No performance-based shares are earned for results below the threshold level.

Performance-Based Opportunity of Outstanding Long-Term Incentive Awards.

The table below summarizes the results of the 2020 performance-based long-term incentive awards, which was completed at the end of 2022, and the performance to the end of 2022 for the 2021 and 2022 performance-based long-term incentive awards, which are currently in the middle of their original three-year performance periods.

The following table shows the values realized for the 2020 performance-based long-term incentive awards based on the grant date value and the market value on January 3, 2023, which was the date of vesting:

Upon vesting, accrued dividends were also paid on the awards that vested, which will be shown in All Other Compensation in the 2023 Proxy Statement.

The actual payouts for the 2021 awards will be disclosed in the proxy statement for the 2024 Annual Meeting of Shareholders and the actual payouts for the 2022 awards will be disclosed in the proxy statement for the 2025 Annual Meeting of Shareholders.

Correlation between CEO Compensation and Performance.

A significant portion of our Chief Executive Officer’s compensation is long-term and equity based. As a result, the amounts in the summary compensation table are not the same as realizable pay. Realizable pay includes Salary, Non-Equity Incentive Plan Compensation, Nonqualified Deferred Compensation Earnings and All Other Compensation from the Summary Compensation Table below for the applicable year and the value realized upon vesting of share awards for the applicable years. Our share awards consist of the following:

Reported pay is the Total amount in the Summary Compensation Table below, and realized pay is calculated by subtracting the Share Awards in the Summary Compensation Table from reported pay and adding the Value Realized on Vesting from the Option Exercises and Stock Vested table below.

Elements of Compensation Program Applicable to Named Executive Officers for 2023.

Base Salary. For 2023, the Compensation Committee approved increases in base salaries for our named executive officers as noted below to ensure base salaries, and, in certain situations, overall compensation, remains competitive and in line with their roles and responsibilities. Base salaries are as follows: