Name | | | Fees Earned or Paid in Cash(1) | |
Karen Dearing(2) | | | | $ | 5,096 | | |
Craig Erlich(3) | | | | | 41,589 | | |
Merrie S. Frankel | | | | | 60,000 | | |
Michael Hollman(4) | | | | | 22,356 | | |
Farris G. Kalil | | | | | 66,000 | | |
Gregory Lehmkuhl | | | | | 60,510 | | |
Simon Leopold | | | | | 60,000 | | |
Jerome Rossi | | | | | 60,000 | | |
William S. Rubenfaer | | | | | 60,000 | | |
(1)
Seven of ourOur non-management directors electedhad the option to receive shares of our common stock in lieu of a portion of their cash for payment of the fees payable to them for their serviceearned and reported in 2020. Ms. Frankel elected to receive 50% of the fees payable to her for her service in 2020 in the form of common stock, with the remaining 50% of the fees paid in cash.this column. The aggregate numbersnumber of shares of common stock earned by the non-management directorsissued in lieu of cash for their service in 2020 were as follows:2022 included: Ms. Dearing, 79; Ms. Frankel, 465;1,150; Mr. Hollman, 346; Mr. Lehmkuhl, 937; Mr. Leopold, 929; Mr. Rossi, 929;Judlowe, 1,054; and Mr. Rubenfaer, 929. These shares were issued based on $64.56,Rakolta, 1,054.
(2)
Reflects restricted stock awards granted under the 2020 Plan. The amounts reported represent the grant date fair market value of the restricted stock award, which is the closing trading price of a share of our common stock on February 23, 2021.the grant date multiplied by the number of shares subject to the award. The Company does not pay fractional shares.
(2)
(3)
Ms. Dearing was appointed to the Board on December 1, 2020 and received pro rata compensation for the year endedheld 2,204 shares of unvested restricted stock as of December 31, 2020.2022.
(3)
(4)
Mr. Erlich served on the Board until his resignation on August 17, 2020.Ms. Frankel held 1,054 shares of unvested restricted stock as of December 31, 2022.
(4)
(5)
Mr. Hollman was appointed to the Board on August 17, 2020 and received pro rata compensation for the year endedheld 1,054 shares of unvested restricted stock as of December 31, 2020.2022.
Corporate Governance(6)
Mr. Judlowe held 2,108 shares of unvested restricted stock as of December 31, 2022.
(7)
Mr. Lehmkuhl held 1,054 shares of unvested restricted stock as of December 31, 2022.
(8)
Mr. Rakolta held 2,108 shares of unvested restricted stock as of December 31, 2022.
(9)
Mr. Rossi held 1,054 shares of unvested restricted stock as of December 31, 2022.
As a named executive officer of the Company, compensation paid to Joel Agree for fiscal 2022 is fully reflected under “Executive Compensation Tables — Summary Compensation Table.” Richard Agree does not receive any compensation for his service as a director, but he does receive compensation for his position as Executive Chairman. In 2022, he received 6,971 shares with an aggregate grant date fair value of $436,524. Such awards will vest ratably over a five-year period.
Corporate Governance
The Board has adopted Corporate Governance Guidelines, a copy of which can be found in the Corporate Governance section of our website at www.agreerealty.com. These guidelines address, among other things, director responsibilities, qualifications (including independence), compensation and access to management and advisors. The Nominating and Governance Committee is responsible for overseeing and reviewing these guidelines and recommending any changes to the Board.
The Board also has adopted a Code of Business Conduct and Ethics (the “Code of Conduct”), which sets out basic principles to guide the actions and decisions of all of our employees, officers, including our chief executive officer, chief financial officer and chief accounting officer, and directors. The Code of Conduct, also available in the Corporate Governance section of our website at www.agreerealty.com, covers numerous topics including honesty, integrity, conflicts of interest, compliance with laws, corporate opportunities and confidentiality. Waivers of the Code of Conduct are discouraged, but any waiver that relates to our executive officers or directors may only be granted by the Board. See “Related Person Transactions” for additional information on the Board’s policies and procedures regarding related person transactions. The Company alsoBoard recently adopted several new policies, including a Human Rights Policy, an executive compensation clawback policy as further discussed under “Compensation DiscussionESG Policy, and Analysis” below.a Whistleblower Policy.
Copies of our committee charters, Corporate Governance Guidelines, and Code of Conduct, and other policies are available on our website and will be sent to any stockholder, without charge, upon written request to our executive offices: Agree Realty Corporation, 70 E. Long Lake Road, Bloomfield Hills, MI 48304, Attention: Secretary.
Communications with the Board
Corporation. He is a member of the National Association of Real Estate Investment Trusts, the International Council of Shopping Centers and the Urban Land Institute.Trusts.
Craig Erlich has served as Chief Operating Officer since February 2021. Prior to his appointment as Chief Operating Officer, Mr. Erlich served as the Company’s Chief Investment Officer since August 2020 and was a member of the Board from July 2018 to August 2020. Prior to his appointment as Chief Investment Officer, Mr. Erlich served as an Executive Vice President and General Manager of the George P. Johnson Company (“GPJ”), a global experiential marketing firm with 30 offices worldwide since 2015. Mr. Erlich had full responsibility for operations in GPJ’s world headquarters in Detroit, Michigan and its Nashville, Tennessee facilities. Prior to GPJ, Mr. Erlich was the owner, President and Chief Executive Officer of pulse220, a boutique meetings and events firm which he successfully sold to GPJ in 2015. Prior to pulse220, Mr. Erlich served as the President of QMS, a direct marketing and fulfillment firm in Detroit, Michigan. Mr. Erlich is a two-time nominee of the Ernst & Young Entrepreneur of the Year award and holds a Bachelor of Arts in Marketing from the Eli Broad College of Business at Michigan State University. Mr. Erlich currently serves on the Executive Board of the Michigan and Northwest Ohio Chapter of JDRF (formerly called the Juvenile Diabetes Research Foundation).
Laith Hermiz has been our Executive Vice President, Real Estate, since February 2021. He previously served as our Chief Operating Officer from November 2015 to February 2021. Prior to joining our Company as an Executive Vice President in April 2010, Mr. Hermiz served as Vice President Development/Redevelopment of Ramco-Gershenson Properties Trust from July 2007 to April 2010. Previously, Mr. Hermiz was Managing Director of Joseph Freed and Associates LLC from April 2004 to July 2007. Mr. Hermiz holds a Bachelor of Science degree from Loyola University Chicago and a Juris Doctor degree from University of Detroit Mercy School of Law. He is a licensed attorney and real estate broker in the State of Michigan and is an active member of the State Bar of Michigan and the International Council of Shopping Centers.
Danielle Spehar joined the Company in 2016 as Vice President of Transactions and was promoted to General Counsel in February 2019. She is responsible for leading the Company’s transaction team and managing the Company’s legal affairs. Prior to joining the Company, Ms. Spehar was engaged in the private practice of law at Maddin, Hauser, Roth & Heller, P.C. from November 2001 to December 2016, where she previously served as a member of the firm’s Executive Committee, co-head of the firm’s Real Estate Practice Group and member of the firm’s Recruiting Committee. She has extensive experience in the leasing and the acquisition, sale, and development of commercial real estate. Ms. Spehar holds a Juris Doctor degree from the University of Detroit Mercy School of Law, a Master of Business Administration from Wayne State University and a Bachelor of Science in Business Administration from Central Michigan University. She is a member of the Real Property Section and the Commercial Real Estate Development and Ownership Committee of the State Bar of Michigan as well as the American Bar Association.
David WolffNicole Witteveen joined the Company in April 2019 and has been ourserving as the Company’s Executive Vice President, People & Culture and Chief Accounting Officerof Staff, since February 2019.August 2021. She is responsible for the Company’s talent management practices and the administration team. Ms. Witteveen served as the Company’s Director, People & Culture from April 2019 to August 2019 and Vice President, People & Culture from August 2019 to August 2021. Prior to joining Agree, she previously led the Company, heHuman Resources department at Career Now Brands from May 2018 to April 2019 and served as Vice President, Financial Reporting and Chief Accounting OfficerLead People Resources Business Partner at TaubmanEnova International from MarchNovember 2015 to NovemberMay 2018. During his tenure at Taubman, Mr. Wolff servedMs. Witteveen has extensive experience in various financial reporting, compliancetalent management, employee engagement, and technical accounting capacities, including Vice President, Financial Reportingworkforce planning. She holds a Bachelor of Arts in Organizational Studies from March 2012 to March 2015 and Director, Accounting Standards & Compliance. Prior to joining Taubman in 1997, Mr. Wolff was an audit manager at Deloitte & Touche, where he worked for seven years.the University of Michigan.
and Craig Erlich, our Chief Operating Officer; Danielle Spehar, our General Counsel.Counsel; and Nicole Witteveen, Executive Vice President, People & Culture and Chief of Staff. The following discussion and analysis should be read together with the tables and related footnote disclosures detailed below.
Compensation ObjectivesCompensation Objectives and Philosophy Philosophy
Our compensation program for the named executive officers generally consists of base salary, annual incentive awards, long-term share-based and unit-based incentive awards and certain other benefits. We also provide severance arrangements for certain of our named executive officers. The following summarizes the key principles and objectives of our approach to executive compensation:
•
➢
Provide total compensation that is both fair and competitive. To attract and reduce the risk of losing the services of valuable officers but to avoid the expense of excessive pay, compensation should be competitive. The Committee assesses the competitiveness of our compensation for our executive officers by comparing our compensation to executive officer compensation at peer public companies.
•
➢
Attract, retain and motivate key executives who are critical to our operations. The primary purpose of our executive compensation program has been, and is, to achieve our business objectives by attracting, retaining and motivating talented executive officers by providing them with incentives and economic security.
•
➢
Reward superior individual and Company performance on both a short-term and long-term basis. Performance-based pay aligns the interests of management with the interests of our stockholders. Performance-based compensation motivates and rewards individual efforts and company success.
•
➢
Align executives’ long-term interests with those of our stockholders. The Company seeks to align these interests by providing a significant portion of executive officer compensation in the form of common stock. Through stock ownership guidelines for named executive officers and grants of restricted common stock that vest over a period of five yearswith time-based vesting provisions and performance unit awards, the amount of which are based on total shareholder return, the value of the executive officers’ total compensation should increase as total returns to stockholders increase. The Company expects the value of these elements as a percentage of each executive officer’s annual base salary to motivate executive officers to continually improve their performance and create value for the Company over the long-term. In 2021,2023, the Company’s executive compensation program will continue to be designed to reward favorable execution of specific Company performance goals.
The Committee seeks to ensure the foregoing objectives are achieved by considering individual performance reviews, Company performance, hiring and retention needs, internal pay equity, market data and other external market pressures in finalizing its compensation determinations.
Determining Compensation for Named Executive Officers
Determining Compensation for Named Executive Officers
The Committee meets without management present to determine the compensation of the named executive officers. Prior to such meeting, the Committee receives compensation recommendations from Joel Agree, our President and Chief Executive Officer. We believe that because of his experience with our Company and his involvement in setting and executing the Company’s business goals, strategies, and performance, he is able to provide valuable input regarding the overall effectiveness of the management team and each individual’s contribution to our performance. Joel Agree’s recommendations are supported by formal performance reviews for each named executive officer which include an evaluation of the individual’s performance against pre-determined performance metrics. The Committee retains the discretion to modify his recommendations and reviews such recommendations for their reasonableness based on Company performance, market information, and the Committee’s compensation philosophy and related considerations. Joel Agree does not provide input with respect to his own compensation.
In 2020,2022, the Company and the Committee utilized Meridian to assist the Company with matters related to the composition of the Company’s compensation peer group and the Company’s establishment of, accounting for, and benchmarking of its executive compensation program.
Compensation Committee Consideration of the 2022 Vote on Executive Compensation
Compensation Committee Consideration of the 2020 Vote on Executive Compensation
In determining our executive compensation program for the remainder of 20202022 and for 2021,2023, the Committee considered the results of the 20202022 advisory vote of our stockholders on executive compensation presented in our 20202022 proxy statement. The Committee noted that prior to 2022, at least 95% of votes cast on our say-on-pay proposal approved executive compensation in each of the past 10 years. In 2022, while there were few changes to the Company’s compensation practices compared to prior years, the recommendation of the proxy advisory firm ISS changed, and the percentage of votes that were cast in support of executive compensation declined to 77%. To better understand stockholder concerns, we reached out to stockholders representing more than 97%77% of outstanding shares and communicated with approximately 65% of outstanding shares. The table below summarizes the votes cast approvedfeedback received from those conversations and the compensationactions taken in response:
Stockholder Feedback | | | Response | |
The Company does not have a cap on payouts if absolute TSR is negative | | | The Company introduced a payout cap on performance units at 100% if absolute TSR is negative, starting with 2023 awards | |
The Company does not disclose metrics and actual results for MBOs | | | In additional definitive materials filed in April 2022, the Company disclosed MBO metrics and actual results for 2021, and has continued that practice in this proxy statement, disclosing MBO metrics and actual results for 2022 | |
The Company does not disclose the “net lease peer group” which is weighted 50% for TSR measurements for performance units | | | The Company disclosed its net lease peer group in the additional definitive materials filed in April 2022, and continued that practice in this proxy statement | |
With respect to performance units previously disclosed, the Company does not disclose its performance results for prior periods | | | The Company historically disclosed performance results for prior periods in its annual report on Form 10-K, and has now incorporated that disclosure into this proxy statement | |
LTI awards are 50% performance-based and 50% time-based, and stockholders would like to see a heavier weighting towards performance-based awards | | | The Compensation Committed decided to change LTI awards to be 55% performance-based and 45% time-based for all NEOs for 2023 | |
Elements and Criteria of our named executive officers as described Compensation in our 2020 proxy statement. The Committee considered these voting results supportive of the Committee’s general executive compensation practices. 2022 for Named Executive Officers
Elements and Criteria of Compensation in 2020 for Named Executive Officers
Our compensation program for named executive officers generally consists of base salary, annual cash incentive awards, long-term share-based and unit-based incentive awards and certain other benefits. The Committee believes that incentive awards and long-term share-based and unit-based incentive awards should relate to objectives established by the Board and management to achieve the Company’s financial and other objectives. We also provide severance arrangements for certain of our named executive officers. Below is an overview of the main components of the Company’s compensation program:
Component | | | Description | | | Objectives | |
Annual Base Salary | | | Fixed cash compensation. Reviewed and adjusted periodically. Annual base salaries for executives are a minority of total compensation. | | | Attract and retain key executives by providing reliable source of income. Help contribute to total cash compensation that is competitive but not in excess of the market. | |
Annual Cash Incentive | | | “At risk” variable cash compensation based on company performance goals and individual performance goals. | | | Encourages executives to perform at a high-level and achieve annual company and individual performance goals. | |
Restricted Shares | | | Awards vest in equal installments over a multi-year period. “At risk” given they are subject to continued service with the Company and may fluctuate in value based on the Company’s stock price. | | | Promotes long-term equity ownership by executives. Encourages the retention of executives and further aligns their interests with those of our stockholders. | |
Performance Units | | | “At risk” variable equity compensation based on company performance over three-year performance period. Awards are granted in the form of common stock. | | | Encourages executives to achieve long-term performance targets, while incentivizing retention. Further aligns executives’ interest with those of our stockholders. | |
TheIn consultation with Meridian, the Committee assessedassesses the competitiveness of the Company’s current compensation levels for the named executive officers as describedon an annual basis, considering the objectives above. This assessment comparedcompares the Company’s compensation of certain named executive officers to the same officer levels of a peer group. In 2022, the Committee worked with Meridian to determine a new peer group comprising companies of comparable size and performance. The Committee selected 13 publicly-tradedpublicly traded REITs, that were selected either because theirconsidering factors including enterprise value, market capitalization, orfunds from operations, total assets were generally comparable to ours.and alignment with peer groups selected by proxy advisory firms. The members of the peer group are:
| Acadia Realty Trust | | | LXP Industrial Trust | |
| Acadia Realty TrustBroadstone Net Lease, Inc. | | | National Retail Properties, Inc. | |
| EastGroup Properties, Inc. | | | Retail Opportunity Investments CorporationCorp. | |
| EPR Properties | | | Rexford Industrial Realty, Inc. | |
| Essential Properties Realty Trust, Inc. | | | SITE Centers Corp. | |
| Kite Realty Group Trust | | | Spirit Realty Capital, Inc. | |
| | | | American Assets Trust,STAG Industrial, Inc. | | | | | | Rexford Industrial Realty, Inc. | | | | |
| | | | EastGroup Properties, Inc. | | | | | | RPT Realty | | | | |
| | | | Four Corners Property Trust, Inc. | | | | | | Seritage Growth Properties | | | | |
| | | | Kite Realty Group Trust | | | | | | Spirit Realty Capital, Inc. | | | | |
| | | | Lexington Realty Trust | | | | | | Terreno Realty Corporation | | | | |
| Monmouth Real Estate Investment Corporation | |
According to the materials provided to the Committee, which members of management prepared and Meridian reviewed: (i) enterprise values of the peer group ranged from approximately $1.7$3.4 billion to approximately $7.3$12.6 billion, and the Company’s enterprise value was in the 7865th percentile of the peer group; and (ii) market capitalizations of the peer group ranged from approximately $700 million$1.4 billion to approximately $6.3$10.4 billion, and the Company’s market capitalization was in the 82nd80th percentile of the peer group.
The materials provided to the Committee and reviewed by Meridian included the tenure of the executive officers of the peer group companies in their current positions, as well as the following compensation components for the executive officers of the peer group companies: (i) base salary (data
primarily from 2019)2021), (ii) target annual incentives (data primarily from 2019)2021), (iii) target total cash compensation (sum of (i) and (ii)), (iv) long-term incentives (data primarily from 2019)2021) and (v) total direct compensation (sum of (iii) and (iv)).
TheBased on the materials showed that the 2020 base salary level for certain named executive officers (other than the CEO) was below the peer group’s 25th percentile. The following table provides a summary of the base salary, the cash incentive awards, the long-term incentive grant date fair value and the total direct compensation of certain named executive officers comparedprovided to the meanCommittee, we believe that our compensation program is competitive and provides an appropriate mix of thosefixed and at-risk pay, while incentivizing both the achievement of the peer group:
| | | Company versus Peer Group Mean | |
| | | Base Salary | | | Cash Incentive Award | | | Long-Term Incentive Grant Date Fair Value | | | Total Direct Compensation | |
Chief Executive Officer(1) | | | | | 6% | | | | | | 67% | | | | | | 27% | | | | | | 31% | | |
Chief Financial Officer(2) | | | | | -28% | | | | | | -21% | | | | | | N/A | | | | | | N/A | | |
Chief Operating Officer | | | | | -32% | | | | | | -46% | | | | | | -52% | | | | | | -45% | | |
General Counsel | | | | | -22% | | | | | | -51% | | | | | | -34% | | | | | | -34% | | |
(1)
Excludes the $1.5 million one-time cash bonus granted in connection with the signing of Mr. Agree’s new employment agreement in October 2020.
(2)
Mr. Thelen resigned as Chief Financial Officer, effective February 19, 2021,short-term performance goals and did not receive a long-term incentive award under the Executive Incentive Plan.
value creation for our stockholders. The Company sets annual base salaries at a level it believes necessary to attract and retain the named executive officers, commensurate with the officers’ responsibilities, reputations, and experience. The Company sets annual cash target incentive awards at levels it believes necessary to attract and retain the named executive officers, the amount of which ultimately is approved by the Committee and depends on management’s achievement of certain Company and individual objectives. The Company has also determined to pay time-based long-term equity incentive compensation to (i) encourage the named executive officers to pursue strategies that will create long-term value for our stockholders, (ii) align the interests of management with those of our stockholders by tying a significant portion of compensation to the value of common stock with time-based vesting and (iii) promote continuity of management by retaining our named executive officers.
For fiscal year 2020,2022, the Committee determinedpaid or granted compensation that executive compensation would consistconsisted of: (i) annual cash base salaries; (ii) annual cash incentive awards; and (iii) two forms of long-term equity-based compensation: 50% restricted share awards subject to time-based vesting provisions over a five-year period and 50% performance-based equity awards subject to a performance-based measurement period of three years and vesting provisions over a three-year period.
The following narrative discusses the components of fiscal year 20202022 compensation.
Base SalaryBase Salary
In 2022, each named executive officer received an annual base salary paid in cash. Initial base salaries of our named executive officers are negotiated in connection with their hiring, and the Committee reviews the base salaries of the named executive officers on an annual basis.
The Committee believes that base salary is a primary factor in retaining and attracting key employees in a competitive marketplace, as well as in preserving an employee’s commitment during downturns in the REIT industry and/or equity markets. When determining the base salary for each of the named executive officers, the Committee considers the individual’s experience, current performance, potential for advancement, internal pay equity and market data.
The base salaries paid to the named executive officers in 20202022 are set forth below in the “Executive Compensation Tables — Summary Compensation Table.” Joel Agree’s base salary was $675,000 in 2019For 2022, taking into account benchmarking data and $750,000 in the first nine months of 2020, an increase of 11%. In October 2020, Mr. Agree signed a new employment agreement that increased his annual base salary to $875,000. Mr. Thelen’s base salary was $285,000 in 2019 and $314,000 in 2020, an increase of 10%. Laith Hermiz’s base salary was $315,000 in 2019 and $315,000 in 2020. Upon his appointment to Chief Investment Officer in August 2020, Craig Erlich was granted a base salary of $350,000. Danielle Spehar’s base salary was $250,000 in 2019 and $300,000 in 2020, an increase of 20%.
Effective March 1, 2021,individual performance, the Committee approved annual base salaries for Joel Agree, Craig Erlich, Laith Hermiz and Danielle Spehar of $875,000, $400,000, $315,000, and $330,000, respectively. Upon his February 2021 appointmentthe named executive officers as Chief Financial Officer, Mr. Leopold was granted a base salary of $450,000.set forth below:
Named Executive Officer | | | 2021 Base Salary | | | 2022 Base Salary | | | Change in Salary (%) | |
Chief Executive Officer | | | | $ | 875,000 | | | | | $ | 875,000 | | | | | | 0% | | |
Chief Financial Officer | | | | $ | 350,000 | | | | | $ | 350,000 | | | | | | 0% | | |
Chief Operating Officer | | | | $ | 400,000 | | | | | $ | 420,000 | | | | | | 5% | | |
General Counsel | | | | $ | 330,000 | | | | | $ | 375,000 | | | | | | 14% | | |
EVP, People & Culture and Chief of Staff | | | | $ | 225,000 | | | | | $ | 236,000 | | | | | | 5% | | |
The Executive Incentive Plan
The Executive Incentive Plan
The Company maintains an Executive Incentive Plan under which annual cash and long-term equity incentive awards for 20202022 were granted to our participating named executive officers by our Committee. For purposes of the Executive Incentive Plan during 2022, participating named officers include the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, General Counsel, and General Counsel. Because Mr. Erlich was not appointed toExecutive Vice President, People & Culture, Chief Investment Officer until August 2020, Mr. Erlich’s incentive awards for 2020 were granted pursuant to his appointment rather than pursuant to the Executive Incentive Plan. Beginning in 2021, Mr. Erlich’s incentive awards will be determined in accordance with the Executive Incentive Plan. All equity awarded under the Executive Incentive Plan is granted pursuant to the 2020 Plan.of Staff.
In 2020,2022, the Committee continued its practice of awarding annual cash awards and long-term equity incentive awards under the Executive Incentive Plan. In February 2020, following a review of the Company’s long-term equity incentive award program against that of its peer group, the Committee amended its Executive Incentive Plan through the establishment of fixed equity awards for each named executive officer. In connection with this decision, in February 2021,2022, the Committee granted to the namedcertain executive officers long-term equity incentive awards comprised of restricted common stock and performance units for the 2021 incentive plan year.units. The restricted common stock awards are subject to time-based vesting conditions, and the restricted performance unit awards are subject to performance-based vesting conditions, which were established at the time of grant. A detailed summary of the awards and the vesting conditions are set forth below under “Long-Term Equity Incentive Compensation.”
Annual Cash Incentive Awards. The Committee believes that annual cash incentive awards provide a meaningful incentive for the achievement of short-term Company and individual goals, while assisting us in retaining, attracting and motivating employees in the near term. The 20202022 objectives were approved by the Committee in February 2022. For the Chief Executive Officer, the Committee considered that the target opportunity is set at a below-market 150% of base salary. This design was intentional as the Committee determined that a 150% target with a 233% maximum payout (350% of base salary) was more shareholder friendly and designed to incentivize corporate outperformance than a 175% target with a 200% maximum payout (same 350% of base salary). With this intentional design, the Committee was choosing to not overpay for merely target performance, while at the same time properly rewarding exceptional results. The 2022 threshold, target, and maximum cash incentive award opportunity, as well as the 20202022 actual award as a percentage of base salary, is included below.
| | 2020 Annual Cash Incentive Bonus Opportunity (as % of Base Salary) | | | 2022 Annual Cash Incentive Bonus Opportunity (as % of Base Salary) | |
Position | | Threshold | | Target | | Maximum | | 2020 Actual | | | Threshold | | Target | | Maximum | | 2022 Actual | |
Chief Executive Officer | | | | 62.5% | | | | | 125.0% | | | | | 187.5% | | | | | 185.9% | | | | 75% | | 150% | | 350% | | 350% | |
Chief Financial Officer | | | | 33.0% | | | | | 66.0% | | | | | 100.0% | | | | | 89.1% | | | | 50% | | 100% | | 150% | | 150% | |
Chief Operating Officer | | | | 25.0% | | | | | 50.0% | | | | | 75.0% | | | | | 64.2% | | | | 50% | | 75% | | 150% | | 143% | |
General Counsel | | | | 16.7% | | | | | 33.3% | | | | | 50.0% | | | | | 50.0% | | | | 25% | | 50% | | 100% | | 100% | |
EVP, People & Culture and Chief of Staff | | | 25% | | 50% | | 75% | | 75% | |
The annual cash incentive opportunities were awarded to the extent the Company attained certain threshold, target or maximum-level achievements for the following performance goals during 2020,2022, as certified by the Committee:Committee in February 2023:
AFFO Growth Goal:Goal: For the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, and General Counsel and Executive Vice President People & Culture, Chief of Staff, 50% of the award was based upon year-over-year percentage growth of the Company’s adjusted funds from operations (“AFFO”)AFFO per share. The 20202022 threshold, target, and maximum-levelmaximum- level achievements and 20202022 actual performance is included below:
| | | Threshold | | | Target | | | Maximum | | | 2020 Actual | |
AFFO Growth | | | | | 4.0% | | | | | | 6.0% | | | | | | 8.0% | | | | | | 6.0% | | |
Cash Award Summary | | | Threshold | | | Target | | | Maximum | | | 2020 Actual | | | Award % of Target | |
Chief Executive Officer | | | | $ | 243,258 | | | | | $ | 486,515 | | | | | $ | 729,773 | | | | | $ | 729,773 | | | | | | 150% | | |
Chief Financial Officer | | | | | 51,810 | | | | | | 103,620 | | | | | | 155,430 | | | | | | 155,430 | | | | | | 150% | | |
Chief Operating Officer | | | | | 39,375 | | | | | | 78,750 | | | | | | 118,125 | | | | | | 118,125 | | | | | | 150% | | |
General Counsel | | | | | 25,000 | | | | | | 50,000 | | | | | | 75,000 | | | | | | 75,000 | | | | | | 150% | | |
| | | Threshold | | | Target | | | Maximum | | | 2022 Actual | |
AFFO Growth | | | 5.0% | | | 7.0% | | | 9.0% | | | 9.2% | |
Cash Award Summary | | | Threshold | | | Target | | | Maximum | | | 2022 Actual | | | Award % of Target | |
Chief Executive Officer | | | $328,125 | | | $656,250 | | | $1,531,250 | | | $1,531,250 | | | 233% | |
Chief Financial Officer | | | $ 87,500 | | | $175,000 | | | $ 262,500 | | | $ 262,500 | | | 150% | |
Chief Operating Officer | | | $105,000 | | | $157,500 | | | $ 315,000 | | | $ 315,000 | | | 200% | |
General Counsel | | | $ 46,875 | | | $ 93,750 | | | $ 187,500 | | | $ 187,500 | | | 200% | |
EVP, People & Culture and Chief of Staff | | | $ 29,500 | | | $ 59,000 | | | $ 88,500 | | | $ 88,500 | | | 150% | |
In reviewing the Company’s performance in 2020, the Committee determined that the AFFO growth per share results would have been at maximum excluding the impact of COVID-19 on the Company’s operating results and the dilution resulting from the Company’s corresponding decision to strategically equitize the business early in 2020. In light of this determination, on February 4, 2021, the Committee determined to award amounts to each named executive officer, and all other applicable employees of the Company, based upon maximum-level achievement of the AFFO growth goal.
Management Business Objectives:Objectives: For the Chief Executive Officer, Chief Financial Officer, and Chief Operating Officer, 35%, 35%, and 40%, respectively, of the award was based upon the achievement of specific operating and management business objectives. The specific operating and management business objectives include: balance sheet criteria, asset management and portfolio characteristic goals, acquisition goals, development goals, and Partner Capital Solutions (“PCS”) goals. The following performance metrics and achievement thereof were used to determine award amounts related to management business objectives, which were as follows;are detailed below:
Management Business Objectives | | | Threshold | | | Target | | | Maximum | | | Actual | |
Portfolio Occupancy | | | 96.5% | | | 97.5% | | | 98.5% | | | 99.7% | |
Investment Grade Tenants as % of Annualized Base Rent | | | 60.0% | | | 62.5% | | | 65.0% | | | 67.8% | |
Development & Partner Capital Solutions Commenced | | | $25.0 | | | $50.0 | | | $75.0 | | | $109.6 | |
Acquisition Volume | | | $1,000.0 | | | $1,200.0 | | | $1,400.0 | | | $1,592.7 | |
Net Debt to Recurring EBITDA at Year-End(1) | | | 5.5x | | | 5.0x | | | 4.5x | | | 3.1x | |
Fixed Charge Coverage Ratio at Year-End | | | 4.50x | | | 4.75x | | | 5.00x | | | 5.01x | |
$ in millions.
(1) 2020 year-end net debt to recurring EBITDA
Proforma for the settlement of approximately 4.8x and fixed charge coverage of 4.8x; (2) 2020 year-end occupancy of 99.5%, rental income generated by investment grade tenants of 67.5% and a weighted-average remaining lease term of 9.7 years; (3) the acquisition of 317 properties net leased to industry-leading retailers for an aggregate investment of $1.31 billion; (4) the commencement of eight development and PCS projects with anticipated aggregate costs of $33.2 million; (5) the completion of two sale-leaseback transactions for an aggregate investment of $36.0 million.any outstanding forward equity at year-end.
The threshold, target, and maximum-level achievements and 20202022 actual performance is included below:
Management Business Objectives
Cash Award Summary | | Threshold | | Target | | Maximum | | 2020 Actual | | Award % of Target | | | Threshold | | Target | | Maximum | | 2022 Actual | | Award % of Target | |
Chief Executive Officer | | | $ | 170,280 | | | | $ | 340,561 | | | | $ | 510,841 | | | | $ | 498,038 | | | | | 146% | | | | $229,688 | | $459,375 | | $1,071,875 | | $1,071,875 | | 233% | |
Chief Financial Officer | | | | 36,267 | | | | | 72,534 | | | | | 109,900 | | | | | 108,081 | | | | | 150% | | | | $ 61,250 | | $122,500 | | $ 183,750 | | $ 183,750 | | 150% | |
Chief Operating Officer | | | | 27,563 | | | | | 55,125 | | | | | 82,688 | | | | | 72,196 | | | | | 131% | | | | $ 84,000 | | $126,000 | | $ 252,000 | | $ 252,000 | | 200% | |
General Counsel(1) | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | | N/A | | | | N/A | | N/A | | N/A | | N/A | | N/A | |
EVP, People & Culture and Chief of Staff (1) | | | N/A | | N/A | | N/A | | N/A | | N/A | |
(1)
The awards for the General Counsel’s award isCounsel and Executive Vice President, People & Culture and Chief of Staff were not related to the achievement of specific operating results given the risk management nature of her position.their positions.
Subjective Achievements:Achievements: For the Chief Executive Officer Chief Financial Officer and Chief OperatingFinancial Officer, 15% of the award was based upon the Committee’s subjective review of activities or objectives determined at the discretion of the Committee. For the Chief Operating Officer, 10% of the award was based upon the Committee’s subjective review of activities or objectives determined at the discretion of the Committee. For the General Counsel and Executive Vice President People & Culture, Chief of Staff, 50% of the award was based upon the Committee’s subjective review of activities or objectives determined at the discretion of the Committee.
While the Committee takes the Chief Executive Officer’s recommendations under advisement in determining each named executive officer’s individual performance, the Committee retains the discretion to make the final compensation decision. The Committee awarded a $218,932 cash bonusevaluates each named executive officer’s performance through reports by these executives to Joel Agree, a $15,543 cash bonusthe Board, and through other interactions with these executives concerning the Company’s strategy, operations, and performance. In reaching the subjective compensation decisions, the Committee evaluated the contribution of each named executive officer to Clayton Thelen, an $11,813 cash bonus to Laith Hermiz and a $75,000 cash bonus to Danielle Spehar for their performance andthe Company’s many achievements in relation to2022, including robust total shareholder returns, record investment volume while maintaining a high-quality portfolio, and conservative and proactive balance sheet management which strategically positioned the Committee’s assessment of subjective achievementsCompany for 2020.continued growth.
Long-Term Equity Incentive Compensation. The Committee believes that share-based incentive awards, with multiple-yearmulti-year vesting, provide a strong incentive for employees to focus on our long-term fundamentals and thereby create long-term stockholder value. These awards also assist us in maintaining a stable, continuous management team in a competitive market. The Committee historically has issued restricted stock for purposes of long-term incentive compensation, which provides significant upside incentive and aligns our officers’ interests with our stockholders, while also maintaining some down-market protection. For 2020,In 2022, the Committee determined to grant long-term equity grants consisting of 50% restricted common stock and 50% performance units. For the Chief Executive Officer the long-term incentive award is valued in total at 450% of base salary; for the Chief Operating officer the long-term incentive award is valued in total at 111% of base salary; for the Chief Investment Officer the long-term incentive award is valued in total at 63% of base salary, and for the General Counsel the long-term incentive award is valued in total at 100% of base salary.
Awards of Restricted Common Stock. The shares of restricted common stock awardedgranted to the individuals for the 2020 incentive plan yearin February 2022 vest ratably over a five-year period with one-fifth (1/5)5th) of the shares vesting on February 23 in each of 2022 through 2026.the first, second, third, fourth and fifth anniversaries of the grant date. The Committee awarded
an aggregate of 32,14137,766 shares of restricted common stock for the 20202022 incentive plan year for a total value of $2,075,023$2,364,907 to ourcertain named executive officers. The grant date fair value of each share was $64.56$62.62 based on the closing sales price of our common stock on February 23, 2021.2022. The grants were as follows: Joel Agree, 27,10727,946 shares; Laith Hermiz, 2,711Peter Coughenour, 1,437 shares; Craig Erlich, 3,593 shares; Danielle Spehar, 2,395 shares; and Danielle Spehar, 2,323Nicole Witteveen, 2,395 shares.
Awards of Performance Units. The Committee awarded an aggregate of 32,14133,934 performance units for the 2020 incentive plan year for a total value of $2,075,023$2,327,455 to the participating named executive officers on February 23, 2021.2022. The number of units awarded waswere calculated based on the closing sales price of our common stock on the grant date of February 23, 2021,2022, which was $64.56.$62.62. The grants were as follows: Joel Agree, 27,10727,946 units; Laith Hermiz, 2,711Craig Erlich, 3,593 units; and Danielle Spehar, 2,3232,395 units. The awards are subject to forfeiture in the event that the performance level is below threshold, as defined in the table below. The actual number of units to eventually
be earned by the individuals will be calculated based on a three-year performance period beginning on January 1, 20212022 and will be based on the achievement of the following performance goals:
•
Position within the MSCI US REIT Index: 50% of the award is based upon the total shareholder return (“TSR”)TSR percentile rank versus the MSCI US REIT index for the three-year performance period; and
•
Position within the Company-defined Peer Group: 50% of the award is based upon TSR percentile rank versus a specified net lease peer group for the three-year performance period. The net lease peer group is defined as:
| ◦
EPR Properties ◦
Essential Properties Trust, Inc. ◦
Four Corners Property Trust, Inc. ◦
Getty Realty Corporation | | | ◦
National Retail Properties, Inc. ◦
Realty Income Corporation ◦
Spirit Realty Capital, Inc. ◦
W.P. Carey Inc. | |
Following the three-year performance period, shares of restricted common stock will be issued correlating to the levels of achievement on the performance units: 50% at threshold,Threshold, 100% at target,Target, and 150% at maximum.Maximum. Achievement percentages between the threshold and target and between the target and maximum levels will be interpolated based on actual results in each category. Following the performance period, one-third of the shares earned will vest each year for three years. Performance levels and corresponding award funding levels for 20202022 performance units are summarized in the below table:
| Performance Level | | | 3-Year Relative
TSR Positioning | | | % of Target
Award Funded | |
| Below Threshold | | | Below 25th25th Percentile | | | 0% | |
| Threshold | | | 25th25th Percentile | | | 50% | |
| Target | | | 50th50th Percentile | | | 100% | |
| Maximum | | | 75th75th Percentile | | | 150% | |
Other Named Executive Officer AwardsPerquisites and Other Benefits
The Committee also awarded compensation separate from the Executive Incentive Plan to certain of the Company’s named executive officers. In connection with the signing of Mr. Agree’s new employment agreement in October 2020, the Committee awarded Mr. Agree a one-time cash bonus of $1,500,000. In connection with his appointment as Chief Investment Officer, the Committee awarded Craig Erlich a sign-on bonus of $299,978 in the form of restricted stock on August 19, 2020. Craig Erlich received 4,541 shares subject to time-based vesting provisions over a five-year period in connection with the award, based on $66.06, the fair market value of our common stock on August 19, 2020. The Committee also awarded Craig Erlich a $112,432 cash bonus and a $112,464 equity-based award consisting of 50% restricted common stock and 50% performance units. Mr. Erlich received 871 shares subject to time-based vesting provisions over a five-year period in connection with the restricted stock award, based on $64.56, the fair market value of our common stock on February 23, 2021. Mr. Erlich received 871 performance units based on the closing sales price of our common stock on February 23, 2021, which was $64.56. The award is subject to forfeiture in the event that the performance level is below threshold, as defined in the table above. The actual number of units to eventually be earned by Mr. Erlich will be calculated based on a three-year performance period beginning on January 1, 2021 and will be based on the achievement of the performance goals outlined above. Due to Mr. Erlich’s appointment as Chief Investment Officer in August 2020, his cash bonus award and equity-based award were based upon the Committee’s subjective review of activities or objectives determined at the discretion of the Committee.
Perquisites and Other Benefits
We have historically maintained a conservative approach to providing perquisites to executive officers. We provide certain named executive officers with perquisites and other personal benefits that the Committee believes are reasonable and consistent with the overall executive compensation program and will better enable us to attract and retain superior employees for key positions. These perquisites have been carefully selected to ensure that the value provided to employees is not atadverse to the expenseinterests of stockholder concern.stockholders. The Committee periodically reviews the levels of perquisites and other personal benefits provided to the named executive officers. In 2020,2022, certain of our officers were provided with an annual car allowance, associated car maintenance and fuel allowance. The Committee may revise, amend or add to each named executive officer’s perquisites and personal benefits if it deems it advisable.
Severance Payments. We currently have employment agreements with Joel Agree, Simon LeopoldPeter Coughenour and Craig Erlich that provide severance payments under specified conditions. The Company also entered into a separation agreement with Clayton Thelen upon his resignation in February 2021 based on the severance provisions in his employment agreement. The
Committee believes these agreements help to retain executives who are essential to our long-term success. See “Potential“Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control”Change-in- Control” for a description of potential payments and benefits received by our named executive officers under our compensation plans and arrangements upon termination of employment or a change in control of our Company.
TimingTiming and Pricing Pricing of Share-Based Grants Share-Based Grants
We do not coordinate the timing of share-based grants with the release of material non-public information. The Committee approves its annual grants of restricted stock to the named executive officers at its regularly scheduled executive compensation meeting which occurs at the beginning of the following fiscal year. The effective date for annual share-based grants is determined at each meeting and is generally the date of such meeting or shortly thereafter. The Committee generally establishes the date for its regularly scheduled meeting at least a year in advance. The Committee has not granted stock options in recent years.
Stock Ownership GuidelinesStock Ownership Guidelines
To further align the interests of certain executive officers and directors with the interest of our stockholders, and to promote our commitment to sound corporate governance, the Committee implementedBoard has adopted stock ownership guidelines. The guidelines are applicable to the Executive Chairman, Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, General Counsel and non-employee directors. In September 2019, the Board adopted revised stock ownership guidelines to “require” non-employee directors to comply with the guidelines, rather than “encourage” them to comply. In addition, the stock ownership guidelines for non-employee directors were increased from two times their annual director compensation to three times their annual director compensation beginning in 2020, and four times their annual director compensation beginning in 2021.
The stock ownership guidelines provide that within three years of the date an individuala named executive officer first becomes subject to the guidelines, upon becomingor within five years of the date a non-employee director or executive officerfirst becomes subject to the guidelines, such individual will be subject to the following guidelines, as applicable:
•
Our Chief Executive Officer is encouragedrequired to own shares of our common stock, including restricted stock, valued at a minimum of five times annual base compensation;
•
Our Executive Chairman, Chief Financial Officer, Chief Operating Officer and General Counsel are encouragedrequired to own shares of our common stock, including restricted stock, valued at a minimum of three times annual base compensation; and
•
Non-employee directors are required to own shares of our common stock valued at a minimum of threefive times the cash portion of their annual director compensation.
As of December 31, 2020,2022, all of our directors and the above-referenced executive officers were either in compliance with our stock ownership guidelines or within the transition period and making progress to be compliant within the three-year period specified by the guidelines.
Policy Prohibiting HedgingPolicy Prohibiting Hedging and Pledging Pledging of Company Stock Company Stock
The Board believes that ownership of shares of the Company’s common stock by the Company’s executive officers and members of the Board promotes alignment of the interests of the Company’s stockholders with those of its leadership. The Board recognizes that transactions that are designed to hedge or offset declines in the market value of the Company’s shares of common stock can disrupt this alignment, interfere with the Company’s compensation programs and philosophies, and undermine policies regarding share ownership.
The Board also recognizes that officer and director pledging of the Company’s common stock as collateral for indebtedness can be adverse to the interests of the Company’s stockholders because it creates
the risk of forced sales that depress the value of the Company’s common stock, creates risk of legal violations, and may encourage excessive risk-taking by executives and directors.
The Board has adopted an anti-hedging and pledging policy that applies to transactions in shares of the Company’s common stock and other equity securities by members of the Board and officers of the Company designated by the Board as “executive officers” for the purposes of federal securities laws.
Under the policy, executive officers and directors of the Company shall not, directly or indirectly:
•
Purchase any financial instrument or enter into any transaction that is designed to hedge or offset any decrease in the market value of the Company’s common stock or other equity securities (including, but not limited to, prepaid variable forward contracts, equity swaps, collars, or exchange funds); or
•
Pledge, hypothecate, or otherwise encumber the Company’s common stock or other equity securities as collateral for indebtedness, including holding such shares in a margin account.
Executive Compensation Clawback PolicyExecutive Compensation Clawback Policy
In the event that the Board determines that any fraud, intentional misconduct or lack of sufficient oversight by a current or former executive officer of the Company was a significant contributing factor to the Company (i) having to restate all or a portion of its financial statements or (ii) having miscalculated one or more performance metrics used by the Committee to determine previously paid compensation that, if calculated correctly, would have resulted in a lower payment to one or more executive officers, the Board or Committee may take, in its discretion, such action as it deems appropriate to recover any cash or equity-basedequity- based incentive compensation of any executive officer that was granted, earned, paid or vested in the three completed fiscal years immediately preceding the date of such determination and take other actions to prevent the recurrence of such fraud, intentional misconduct or lack of sufficient oversight to the fullest extent permitted by governing law. They may approve or recommend to the Board for approval the creation or revision of any such clawback policy as the Committee determines to be necessary or appropriate, or as required by applicable law or stock exchange requirements.
TaxTax and Accounting Implications Accounting Implications
Deductibility of Executive Compensation. Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), provides that subject to certain exceptions, a publicly-held corporation may not deduct compensation for federal income tax purposes exceeding $1 million in any one year paid to any of its “covered employees”. For this purpose, a “covered employee” is any individual who (i) is or acts in the capacity as the principal executive officer or the principal financial officer of the publicly-held corporation at any time during the year, (ii) is one of the three other most highly compensated officers of the publicly-held corporation for the year, or (iii) was an individual listed in either of the foregoing clauses (i) or (ii) in respect of the publicly-held corporation or any predecessor in any prior year beginning after 2016. We must distribute a specified minimum percentage of our taxable income to maintain our qualification as a REIT under the Internal Revenue Code, and we are not subject to federal income tax on our REIT taxable income if and to the extent we distribute the income to our stockholders. Accordingly, to the extent we pay compensation to any of our covered employees in excess of $1 million in any year, we may have to increase the amount of our distributions to stockholders to avoid tax liability and the loss of our REIT status. This in turn may result in a larger portion of distributions being taxable to stockholders as dividend income, instead of being treated as a nontaxable return of capital to stockholders.
Nonqualified Deferred Compensation. Section 409A of the Internal Revenue Code provides that amounts deferred under nonqualified deferred compensation arrangements will be included in an employee’s income when vested unless certain conditions are met. If the certain conditions are not satisfied, amounts subject to such arrangements will upon vesting be taxable and employees will be subject to additional income tax, penalties and a further additional income tax calculated as interest on income taxes deferred under the arrangement.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management and based on such review and discussions, the Committee recommended to the Board that the Compensation Discussion and Analysis be included in this 20212023 proxy statement and the Company’s annual report on Form 10-K for the year ended December 31, 2020.2022.
COMPENSATION COMMITTEE
William S. Rubenfaer, Chairman
Gregory Lehmkuhl,
Farris G. Kalil
Chair
Michael Judlowe
Jerome Rossi
EXECUTIVE COMPENSATION TABLESExecutive Compensation Tables
Summary Compensation Table
The following table sets forth information concerning the total compensation paid or earned by each of the named executive officers in 2020, 20192022, 2021 and 2018.2020.
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | |
Joel Agree | | | | | 2020 | | | | | $ | 792,788 | | | | | $ | 1,500,000 | | | | | $ | 3,500,056 | | | | | $ | 1,446,744 | | | | | $ | 46,025 | | | | | $ | 7,285,613 | | |
President and Chief | | | | | 2019 | | | | | | 664,615 | | | | | | — | | | | | | 3,500,016 | | | | | | 1,195,000 | | | | | | 45,793 | | | | | | 5,405,424 | | |
Executive Officer | | | | | 2018 | | | | | | 609,712 | | | | | | — | | | | | | 3,362,974 | | | | | | 877,000 | | | | | | 45,579 | | | | | | 4,895,265 | | |
Clayton Thelen | | | | | 2020 | | | | | $ | 319,942 | | | | | $ | — | | | | | $ | — | | | | | $ | 279,774 | | | | | $ | 31,185 | | | | | $ | 630,901 | | |
Chief Financial Officer, Secretary(5) | | | | | 2019 | | | | | | 277,731 | | | | | | — | | | | | | 275,007 | | | | | | 211,969 | | | | | | 29,909 | | | | | | 794,616 | | |
| | | | | 2018 | | | | | | 250,000 | | | | | | — | | | | | | 224,032 | | | | | | 149,250 | | | | | | 31,778 | | | | | | 655,060 | | |
Laith Hermiz | | | | | 2020 | | | | | $ | 327,115 | | | | | $ | — | | | | | $ | 350,044 | | | | | $ | 202,133 | | | | | $ | 40,087 | | | | | $ | 919,379 | | |
Chief Operating Officer, | | | | | 2019 | | | | | | 311,885 | | | | | | — | | | | | | 300,008 | | | | | | 158,708 | | | | | | 39,346 | | | | | | 809,947 | | |
Executive Vice President(6) | | | | | 2018 | | | | | | 296,942 | | | | | | — | | | | | | 386,606 | | | | | | 155,000 | | | | | | 39,186 | | | | | | 877,734 | | |
Craig Erlich | | | | | 2020 | | | | | $ | 125,912 | | | | | $ | 299,978 | | | | | $ | 112,464 | | | | | $ | 112,432 | | | | | $ | 11,563 | | | | | $ | 661,629 | | |
Chief Investment Officer(7) | | | | | | | | |
Danielle Spehar | | | | | 2020 | | | | | $ | 300,961 | | | | | $ | | | | | | $ | 299,946 | | | | | $ | 150,000 | | | | | $ | 32,946 | | | | | $ | 783,853 | | |
General Counsel(8) | | | | | 2019 | | | | | | 238,279 | | | | | | — | | | | | | 200,005 | | | | | | 120,000 | | | | | | 27,355 | | | | | | 585,639 | | |
Name and Principal Position | | | Year | | | Salary ($) | | | Bonus ($)(1) | | | Stock Awards ($)(2) | | | Non-Equity Incentive Plan Compensation ($)(3) | | | All Other Compensation ($)(4) | | | Total ($) | |
Joel Agree President and Chief Executive Officer | | | | | 2022 | | | | | $ | 875,000 | | | | | $ | — | | | | | $ | 3,666,730 | | | | | $ | 3,062,500 | | | | | $ | 51,842 | | | | | $ | 7,656,072 | | |
| | | 2021 | | | | | | 875,000 | | | | | | — | | | | | | 3,469,080 | | | | | | 2,947,365 | | | | | | 50,180 | | | | | | 7,341,625 | | |
| | | 2020 | | | | | | 792,788 | | | | | | 1,500,000 | | | | | | 3,731,809 | | | | | | 1,446,744 | | | | | | 46,025 | | | | | | 7,517,366 | | |
Peter Coughenour(5) Chief Financial Officer, Secretary | | | | | 2022 | | | | | $ | 350,000 | | | | | $ | — | | | | | $ | 89,985 | | | | | $ | 525,000 | | | | | $ | 15,657 | | | | | $ | 980,642 | | |
| | | 2021 | | | | | | 163,365 | | | | | | — | | | | | | 44,998 | | | | | | 90,000 | | | | | | 9,457 | | | | | | 307,820 | | |
Craig Erlich(6) Chief Operating Officer | | | | | 2022 | | | | | $ | 416,462 | | | | | $ | — | | | | | $ | 471,429 | | | | | $ | 598,500 | | | | | $ | 44,868 | | | | | $ | 1,531,259 | | |
| | | 2021 | | | | | | 392,308 | | | | | | — | | | | | | 111,468 | | | | | | 577,369 | | | | | | 41,630 | | | | | | 1,122,775 | | |
| | | 2020 | | | | | | 125,912 | | | | | | — | | | | | | 299,978 | | | | | | 112,432 | | | | | | 11,563 | | | | | | 549,885 | | |
Danielle Spehar General Counsel | | | | | 2022 | | | | | $ | 367,039 | | | | | $ | — | | | | | $ | 314,242 | | | | | $ | 375,000 | | | | | $ | 39,140 | | | | | $ | 1,095,421 | | |
| | | 2021 | | | | | | 324,808 | | | | | | — | | | | | | 297,291 | | | | | | 165,000 | | | | | | 36,213 | | | | | | 823,312 | | |
| | | 2020 | | | | | | 300,961 | | | | | | — | | | | | | 200,005 | | | | | | 150,000 | | | | | | 32,946 | | | | | | 683,912 | | |
Nicole Witteveen(7) Executive Vice President, People & Culture, Chief of Staff | | | | | 2022 | | | | | $ | 234,054 | | | | | $ | — | | | | | $ | 149,975 | | | | | $ | 177,000 | | | | | $ | 24,694 | | | | | $ | 585,723 | | |
| | | 2021 | | | | | | 161,699 | | | | | | — | | | | | | 309,989 | | | | | | 100,000 | | | | | | 10,047 | | | | | | 581,735 | | |
(1)
For Mr. Agree, the 2020 amount reported reflects a one-time cash bonus granted in connection with the signing of Mr. Agree’s new employment agreement in October 2020. For Mr. Erlich, the amount reported reflects a sign-on bonus in the form of restricted stock on August 19, 2020. Mr. Erlich received 4,541 shares subject to time-based vesting provisions over a five-year period in connection with the award, based on $66.06, the fair market value of our common stock on August 19, 2020.
(2)
The amounts reported represent the full value of the stock awards issued for the applicable year and have been issued in accordance with the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”) or the 2020 Plan, depending on the year. All 2020Regarding the performance-based units, the amounts reported reflect awards for the 2020 incentive plan year, all 2019 amounts reflect awards for the 2019 incentive plan year and all 2018 amounts reflect awards for the 2018 incentive plan year. The awards are formally granted in the year subsequent to the incentive plan yeargrant date fair value determined in accordance with FASB ASC Topic 718. For a discussion of the Company’s established annual compensation grant cycle.assumptions used to calculate the value of performance share awards made to Named Executive Officers, refer to Note 11 to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022. The amounts that would be earned at the maximum performance level are set forth below in the Grant of Plan-Based Awards Table. For Mr. Erlich, the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Chief Investment Officer and General Counsel,amount reported in 2020 includes a sign-on bonus in the awards consistform of 50% restricted common stock on August 19, 2020. Mr. Erlich received 4,541 shares subject to time-based vesting provisions over a five-year period and 50% performance-basedin connection with the award, based on a fair market value of $66.06 per share, the closing price of our common stock on August 19, 2020. For Ms. Witteveen, the amount reported in 2021 includes a sign-on bonus in the form of restricted stock on August 19, 2021. Ms. Witteveen received 3,369 shares or units, depending on the year, subject to a performance-based measurement period of three years andtime-based vesting provisions over a three-year period. Regardingfive-year period in connection with the performance-based shares and units,award, based on a fair market value of $74.21 per share, the amounts reported assume the achievementclosing price of target performance levels. For the General Counsel, the 2019 award consists of shares of restrictedour common stock that vest in equal installments over a five-year period from the date of grant. Further information about the terms and valuation of share-based awards is included in note 11 of our audited financial statements in our annual report on Form 10-K for the year ended December 31, 2020.August 19, 2021.
(3)
The amounts reported represent annual cash incentive awards under the Executive Incentive Plan.Plan or pursuant to separate determination by the Compensation Committee. Because Ms. SpeharMr. Coughenour was not promotedappointed to General CounselChief Financial Officer until February 2019, Ms. Spehar’sDecember 2021, Mr. Coughenour’s non-equity incentive plan award for 20192021 was not granted pursuant to the Executive Incentive Plan. Because Mr. Erlich was not appointed to Chief Investment Officer until August 2020, Mr. Erlich’s non-equity incentive plan award for 2020 was not granted pursuant to the Executive Incentive Plan. Because Ms. Witteveen was not appointed to Executive Vice President, People & Culture, Chief of Staff until August 2021, Ms. Witteveen’s non-equity incentive plan award for 2021 was not granted pursuant to the Executive Incentive Plan.
(4)
(4)
For Mr. Agree, the amounts reported in 2022 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $13,500;$14,000; health insurance premiums, $15,340;$17,074; and annual car allowance and associated car maintenance and fuel, $17,185.$20,768. For Mr. Thelen,Coughenour, the amounts reported in 2022 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $13,500;$10,500; and health insurance premiums, $17,685.$5,157. For Mr. Hermiz,Erlich, the amounts reported in 2022 represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $13,500; health insurance premiums, $20,057; and annual car allowance and associated car maintenance and fuel, $6,530. For Mr. Erlich, the amounts reported represent the aggregate incremental cost to the Company of his matching Simple IRA contribution, $3,786;$17,000; and health insurance premiums, $7,777.$27,868. For Ms. Spehar, the amounts reported in 2022 represent the aggregate incremental cost to the Company of her matching Simple IRA contribution, $13,989;$17,000; and health insurance premiums, $18,957.$22,140. For Ms. Witteveen, the amounts reported in 2022 represent the aggregate incremental cost to the Company of her matching Simple IRA contribution, $12,452; and health insurance premiums, $12,242.
(5)
Mr. Thelen servedCoughenour was appointed as our Chief Financial Officer and Secretary fromin December 2017 to February 2021.
(6)
Mr. Hermiz served as our Chief Operating Officer from November 2015 to February 2021.
(7)
Mr. Erlich served as our Chief Investment Officer from August 2020 untilto February 2021.
(8)
(7)
Ms. Spehar has served as our General Counsel since February 2019.Witteveen was appointed Executive Vice President, People & Culture and Chief of Staff in August 2021.
Grants of Plan-Based Awards for 20202022
The following table sets forth information concerning equity and non-equity awards granted to the named executive officers in 2020:2022:
| | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | All Other Stock Awards; Number of Shares of Stock or Units (#)(1) | | Grant Date Fair Value of Stock and Option Awards ($)(2) | | |
Name | | | Grant Date | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) | | Estimated Future Payouts Under Equity Incentive Plan Awards (#) | | | All Other Stock Awards; Number of Shares of Stock or Units (#)(1) | | Grant Date Fair Value of Stock and Option Awards ($)(2) | |
| Grant Date | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | | | | | | | | | | | | | Threshold | | Target | | Maximum | | Threshold | | Target | | Maximum | |
Joel Agree | | | | 2/10/2020 | | | | | 486,515 | | | | | 973,091 | | | | | 1,459,546 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | 2/4/2022 | | | | $ | 656,250 | | | | $ | 1,312,500 | | | | $ | 3,062,500 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Joel Agree | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 21,979 | | | | | 1,749,968 | | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 27,946 | | | | | 1,749,979 | | |
Joel Agree | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | 10,990 | | | | | 21,980 | | | | | 32,970 | | | | | — | | | | | 1,981,841 | | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | 13,973 | | | | | 27,946 | | | | | 41,919 | | | | | — | | | | | 1,916,751 | | |
Clayton Thelen(3) | | | | 2/10/2020 | | | | | 103,620 | | | | | 207,240 | | | | | 314,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | |
Clayton Thelen(3) | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 1,727 | | | | | 137,504 | | | |
Clayton Thelen(3) | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | 864 | | | | | 1,727 | | | | | 2,591 | | | | | — | | | | | 155,716 | | | |
Laith Hermiz | | | | 2/10/2020 | | | | | 78,750 | | | | | 157,500 | | | | | 236,250 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | |
Laith Hermiz | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 1,884 | | | | | 150,004 | | | |
Laith Hermiz | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | 942 | | | | | 1,884 | | | | | 2,826 | | | | | — | | | | | 169,872 | | | |
Craig Erlich(4) | | | | 8/19/2020 | | | | | 48,185 | | | | | 80,308 | | | | | 112,432 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | |
Peter Coughenour | | | | | 2/4/2022 | | | | $ | 175,000 | | | | $ | 350,000 | | | | $ | 525,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Peter Coughenour | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 1,437 | | | | | 89,985 | | |
Peter Coughenour | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Craig Erlich | | | | | 2/4/2022 | | | | $ | 210,000 | | | | $ | 315,000 | | | | $ | 630,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Craig Erlich | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 3,593 | | | | | 224,994 | | |
Craig Erlich | | | | 8/19/2020 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 4,541 | | | | | 299,978 | | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | 1,797 | | | | | 3,593 | | | | | 5,390 | | | | | — | | | | | 246,436 | | |
Danielle Spehar | | | | 2/10/2020 | | | | | 50,000 | | | | | 100,000 | | | | | 150,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | 2/4/2022 | | | | $ | 93,750 | | | | $ | 187,500 | | | | $ | 375,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Danielle Spehar | | | | 2/23/2020 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,512 | | | | | 200,005 | | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,395 | | | | | 149,975 | | |
Danielle Spehar | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | 1,198 | | | | | 2,395 | | | | | 3,593 | | | | | — | | | | | 164,268 | | |
Nicole Witteveen | | | | | 2/4/2022 | | | | $ | 59,000 | | | | $ | 118,000 | | | | $ | 177,000 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Nicole Witteveen | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,395 | | | | | 149,975 | | |
Nicole Witteveen | | | | | 2/23/2022 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
(1)
The equity awards set forth in this column reflect restricted stock formally granted in 2020 with respect to the 2019 fiscal year.2022. Awards vest in equal installments over a five-year period from February 23, 2020,2022, the date of the grant. Awards set forth in this column were granted under the 20142020 Plan. Cash dividends are paid on the restricted stock during the vesting period.
(2)
The amounts reported in this column represent the full value of the stock awards granted in 20202022 and have been issued in accordance with the 20142020 Plan. As awards granted in 2020, they were subject to the performance and other compensation criteria relating to calendar year 2019 as previously disclosed in the Company’s 2020 Proxy Statement. For Joel Agree, Clayton ThelenCraig Erlich and Laith Hermiz,Danielle Spehar the awards consist of 50% restricted common stock subject to time-based vesting provisions over a five-year period and 50% performance-based units subject to a performance-based measurement period of three years and vesting provisions over a three-year period. Regarding the performance-based units, the amounts reported assume the achievement of target performance levels. For Craig ErlichPeter Coughenour and Danielle Spehar,Nicole Witteveen, the awards consist of shares of restricted common stock that vest in equal installments over a five-year period from the date of grant.
(3)
Mr. Thelen resigned as Chief Financial Officer, effective February 19, 2021 and certain equity awards were forfeited in connection therewith.
(4)
The Estimated Future Payouts Under Non-Equity Incentive Plan Awards for Mr. Erlich represent prorated amounts based on his employment agreement. Given Mr. Erlich commenced employment as Chief Investment Officer on August 19, 2020, he was only eligible to receive a prorated amount of the awards specified in his employment agreement, based on his time of service during the year.Narrative Disclosure of Summary Compensation Table and Grants of Plan-Based Awards Table
In the case of each of Mr. HermizMs. Spehar and Ms. Spehar,Witteveen, certain base salary determinations and grants of plan-based awards during the periods reflected in the tables above were influenced by the employment agreements and promotions discussed below.
Under the terms of a letter agreement dated March 11, 2010, Laith Hermiz was employed as our Executive Vice President (the “Hermiz Agreement”). Mr. Hermiz was subsequently appointedInitially hired pursuant to Chief Operating Officer in November 2015, and he was named Executive Vice President, Real Estate in February 2021. The Hermiz Agreement initially provided for a base salary of $215,000, subject to annual review by the Board and the Compensation Committee. Effective March 1, 2021, the Committee approved an annual base salary for Mr. Hermiz of $315,000. The Hermiz Agreement also provided for certain benefits similar to those awarded to other named executive officers. On an annual basis, Mr. Hermiz is entitled to receive 2,500 shares of restricted stock, provided he is still employed by the Company at each year end. See “Potential Payments Upon Termination or Change-in-Control” discussion below.
Under the terms of a letter agreement dated October 11, 2016 (the “Spehar Agreement”), Danielle Spehar was employed as our Vice President of Transactions. Ms. Spehar was subsequently promoted to General Counsel in February 2019. At the time of2019 and her promotion, Ms. Spehar’s compensation was increased based on a review of executive officers of peer group companies in similar positions. The Spehar Agreement initially provided for a base salarycompensation reflected in the Summary Compensation Table above is based on the Committee’s review of $160,000, payable in accordance with the Company’s normal payroll practices, and provided her with eligibility to receivepeer group benchmarking on an annual cash incentive awardbasis.
Initially hired pursuant to the terms of 13%a letter agreement dated March 18, 2019 (the “Witteveen Agreement”), Nicole Witteveen was employed as our Director, People & Culture. Ms. Witteveen was subsequently promoted to 31%Executive Vice President, People & Culture and Chief of Staff in August 2021 and her base salary, subject to performance hurdles determined by management, andcompensation was increased based on a restricted stock grant valued at $50,000 at the timereview of grant.executive officers of peer group companies in similar positions. The Spehar Agreement also provided her with eligibility to receive annual long-term incentive awards,compensation reflected in the formSummary Compensation Table above is based on the Committee’s review of restricted stock, of 13% to 31% of her base salary, subject to certain corporate performance goals and management discretion. See “Potential Payments Upon Termination or Change-in-Control” discussion below.peer group benchmarking on an annual basis.
For a discussion of the material terms of the employment agreements of Joel Agree, Clayton ThelenPeter Coughenour, and Craig Erlich, see “Potential“Executive Compensation Tables — Potential Payments Upon Termination or Change-in-Control — Employment Agreements” discussion below.
Outstanding Equity Awards at December 31, 20202022
The following table sets forth information on the holdings of unvested stock awards by the named executive officers as of December 31, 2020.2022. No stock options are outstanding.
| | Stock Awards | | | | | | | | Stock Awards | |
Name | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | | Grant Date | | Number of Shares or Units of Stock That Have Not Vested (#)(1) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(1) | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | |
Joel Agree | | | | 88,180 | | | | | 5,871,024 | | | | | 89,025 | | | | | 5,927,285 | | | | | | 2/23/2022 | | | | | 46,043 | | | | | 3,265,830 | | | | | 27,946 | | | | | 1,982,210 | | |
Clayton Thelen(3) | | | | 7,154 | | | | | 476,313 | | | | | 3,433 | | | | | 228,569 | | | |
Laith Hermiz | | | | 10,105 | | | | | 672,791 | | | | | 10,116 | | | | | 673,523 | | | |
| | | | | 2/23/2021 | | | | | 35,498 | | | | | 2,517,873 | | | | | 27,107 | | | | | 1,922,700 | | |
| | | | | 2/23/2020 | | | | | 13,187 | | | | | 935,354 | | | | | 21,980 | | | | | 1,559,041 | | |
| | | | | 2/23/2019 | | | | | 10,243 | | | | | 726,536 | | | | | — | | | | | — | | |
| | | | | 2/23/2018 | | | | | 5,524 | | | | | 391,817 | | | | | — | | | | | — | | |
Peter Coughenour | | | | | 2/23/2022 | | | | | 1,437 | | | | | 101,926 | | | | | — | | | | | — | | |
| | | | | 2/23/2021 | | | | | 558 | | | | | 39,579 | | | | | — | | | | | — | | |
| | | | | 2/23/2020 | | | | | 283 | | | | | 20,073 | | | | | — | | | | | — | | |
| | | | | 2/23/2019 | | | | | 182 | | | | | 12,909 | | | | | — | | | | | — | | |
| | | | | 2/23/2018 | | | | | 104 | | | | | 7,377 | | | | | — | | | | | — | | |
Craig Erlich | | | | 4,541 | | | | | 302,340 | | | | | — | | | | | — | | | | | | 2/23/2022 | | | | | 3,593 | | | | | 254,841 | | | | | 3,593 | | | | | 254,851 | | |
| | | | | 2/23/2021 | | | | | 697 | | | | | 49,438 | | | | | 871 | | | | | 61,780 | | |
| | | | | 8/19/2020 | | | | | 2,724 | | | | | 193,213 | | | | | — | | | | | — | | |
Danielle Spehar | | | | 4,045 | | | | | 269,316 | | | | | — | | | | | — | | | | | | 2/23/2022 | | | | | 2,395 | | | | | 169,877 | | | | | 2,395 | | | | | 169,877 | | |
| | | | | 2/23/2021 | | | | | 1,858 | | | | | 131,788 | | | | | 2,323 | | | | | 164,770 | | |
| | | | | 2/23/2020 | | | | | 1,508 | | | | | 106,962 | | | | | — | | | | | — | | |
| | | | | 2/23/2019 | | | | | 365 | | | | | 25,889 | | | | | — | | | | | — | | |
| | | | | 2/232018 | | | | | 193 | | | | | 13,689 | | | | | — | | | | | — | | |
Nicole Witteveen | | | | | 2/23/2022 | | | | | 2,395 | | | | | 169,877 | | | | | — | | | | | — | | |
| | | | | 2/23/2021 | | | | | 743 | | | | | 52,701 | | | | | — | | | | | — | | |
| | | | | 8/17/2021 | | | | | 2,695 | | | | | 191,156 | | | | | — | | | | | — | | |
| | | | | 2/23/2020 | | | | | 227 | | | | | 16,101 | | | | | — | | | | | — | | |
| | | | | 8/13/2019 | | | | | 282 | | | | | 20,002 | | | | | — | | | | | — | | |
(1)
Shares of restricted stock vest in the following years along with performance shares and units assuming the achievement of target performance goals for 20192020, 2021 and 20202022 performance share and unit awards. 2018 performance share and unit awards were calculated at the maximum performance goals as the Compensation Committee determined in February 2021 that such awards were earned at the maximum performance level. Shares of restricted stock vest in equal installments over a five-year period from the date of grant. Performance shares and units are subject to a performance-based measurement period of three years. Following the performance period, one-third of the shares earned will vest each year for three years. In February 2023, the Compensation Committee certified that the 2020 performance unit awards were earned at 150% of target given the Company’s three-year total shareholder return performance was in the 75th percentile or higher of the MSCI US REIT Index and the Company-defined Peer Group. Shares of restricted stock vest in equal installments over a five-year period from the date of grant.
| | | 2023 | | | 2024 | | | 2025 | | | 2026 | | | 2027 | |
Joel Agree | | | | | 56,241 | | | | | | 45,938 | | | | | | 41,083 | | | | | | 29,362 | | | | | | 14,904 | | |
Peter Coughenour | | | | | 715 | | | | | | 611 | | | | | | 522 | | | | | | 428 | | | | | | 288 | | |
Craig Erlich | | | | | 1,801 | | | | | | 2,092 | | | | | | 3,289 | | | | | | 2,381 | | | | | | 1,915 | | |
Danielle Spehar | | | | | 1,823 | | | | | | 2,403 | | | | | | 3,019 | | | | | | 2,515 | | | | | | 1,277 | | |
Nicole Witteveen | | | | | 1,555 | | | | | | 1,556 | | | | | | 1,415 | | | | | | 1,337 | | | | | | 479 | | |
(2)
Based upon the closing price of our common stock on the NYSE on December 31, 202030, 2022 of $66.58.$70.93.
| | | 2021 | | | 2022 | | | 2023 | | | 2024 | | | 2025 | |
Joel Agree | | | | | 47,711 | | | | | | 47,675 | | | | | | 44,717 | | | | | | 25,381 | | | | | | 11,721 | | |
Clayton Thelen(3) | | | | | 686 | | | | | | 5,318 | | | | | | 1,831 | | | | | | 1,831 | | | | | | 921 | | |
Laith Hermiz | | | | | 6,113 | | | | | | 5,487 | | | | | | 5,042 | | | | | | 2,575 | | | | | | 1,004 | | |
Craig Erlich | | | | | 908 | | | | | | 908 | | | | | | 908 | | | | | | 908 | | | | | | 909 | | |
Danielle Spehar | | | | | 1,100 | | | | | | 879 | | | | | | 878 | | | | | | 685 | | | | | | 503 | | |
Option Exercises and Stock Vested in 2022
(3)
Mr. Thelen resigned as Chief Financial Officer, effective February 19, 2021 and accordingly, certain of the shares reflected above were subsequently forfeited.
Stock Vested and Options Exercised in 2020
The following table sets forth information on the shares of restricted stock and performance units or shares held by the named executive officers that vested during 2020.2022. No stock options are outstanding.
| | Stock Awards | | | Stock Awards | |
Name | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) | | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting ($)(1) | |
Joel Agree | | | | 38,146 | | | | | 2,992,241 | | | | | | 53,608 | | | | | 3,356,933 | | |
Clayton Thelen | | | | 341 | | | | | 27,150 | | | |
Laith Hermiz | | | | 4,476 | | | | | 353,764 | | | |
Peter Coughenour | | | | | 511 | | | | | 31,999 | | |
Craig Erlich | | | | — | | | | | — | | | | | | 1,082 | | | | | 82,909 | | |
Danielle Spehar | | | | 598 | | | | | 44,338 | | | | | | 1,344 | | | | | 84,161 | | |
Nicole Witteveen | | | | | 1,077 | | | | | 81,013 | | |
(1)
The value realized is based on the number of shares of restricted stock that vested on the vesting date multiplied by the closing price of our common stock on the NYSE on the vesting date.
Potential Payments Upon Termination or Change-in-Control
Potential Payments Upon Termination or Change-in-Control
The following section describes and quantifies potential payments and benefits to the named executive officers as of December 31, 2020,2022, under our compensation and benefit plans and arrangements upon termination of employment or a change in control of our Company.
Joel Agree, Peter Coughenour and Craig Erlich are and Clayton Thelen was, subject to employment agreements with us that provide certain benefits in the event of the termination of their employment or a change in control. In addition, certain of our compensatory plans contain provisions, applicable to all of our named executive officers, regarding the acceleration of vesting and payment upon specified termination events, including in connection with a change in control.
Company Share-Based PlansCompany Share-Based Plans
2020 Omnibus Incentive Plan
Joel Agree, Clayton Thelen, Laith Hermiz,Peter Coughenour, Craig Erlich, and Danielle Spehar and Nicole Witteveen participate in the 2020 Plan. During the 120 daysImmediately following the termination of the participant’s employment for any reason, any unvested shares of restricted stock are forfeited, as well as any unpaid dividends on such shares. Additionally, under the 2020 Plan, any unvested performance units are also forfeited upon termination of employment. Under the 2020 Plan, the unvested shares of restricted stock and unvested performance awards (at target) immediately vest in the event our stockholders approve an agreement to merge, consolidate, liquidate or sell all, or substantially all, of our assets. The Compensation Committee is authorized to accelerate the vesting of restricted stock at any time. In addition, in the event of a Change in Control (as defined therein) or a dissolution or liquidation of our Company, all unvested shares of restricted stock and unvested performance awards (at target) will become immediately vested. The Board has the discretion to determine whether any leave of absence should constitute a termination of employment.
Employment AgreementsEmployment Agreements
Chief Executive Officer and President — Joel Agree
On October 9, 2020, the Company entered into a new employment agreement with Joel Agree to extend Mr. Agree’s term as President and Chief Executive Officer of the Company through September 30, 2023 (the “Agree Agreement”). The Agree Agreement supersedes Mr. Agree’s prior employment agreement with the Company, which had a term that was scheduled to expire on June 30, 2021.
The term of Mr. Agree’s employment under the Agree Agreement extends through September 30, 2023, and will automatically renew for successive two-year periods unless either party provides notice of non-renewalnon- renewal at least 60 days prior to the expiration of any term.
Under the Agree Agreement, Mr. Agree is entitled to receive a base salary of $875,000, subject to annual review by the Committee and participate in all benefit programs generally available to the Company’s executive officers, including any equity incentive plan or bonus plan. Beginning with the 2021 calendar year, Mr. Agree will bebecame eligible to receive (1) a target annual bonus of 150% of his base salary based on attainment of performance targets, up to a maximum value of 350% and a threshold value of 75% (the “Annual Bonus”), and (2) target long-term incentive compensation equal to a grant date fair market value of 400% of his base salary to be awarded in restricted stock and performance awards in accordance with the 2020 Plan. Upon execution of the Agree Agreement, Mr. Agree was entitled to receive a one-time cash bonus of $1,500,000.
Upon any termination, Mr. Agree will receive a payment in cash of salary and other benefits earned and accrued prior to the date of termination. Except as set forth below or required by law, all other benefits and unvested securities of the Company will be forfeited as of the termination date.
In the event of termination of the Agree Agreement because of Mr. Agree’s death or Disability (as defined in the Agree Agreement), he (or his estate) will receive (i) salary and other benefits earned and accrued prior to the termination date, including reimbursement for expenses, (ii) the prorated portion of the Annual Bonus at “target” level for the year in which the termination occurs, (iii) elimination of any exclusively time vesting conditions on any restricted stock, stock option or other equity awards held by Mr. Agree to the extent unvested, and (iv) in the event of Mr. Agree’s death, (a) a cash payment equal to
two months of salary payable no later than 10 days after termination and (b) continuation to Mr. Agree’s spouse and dependents of fully paid health insurance under the Company’s health plans and programs applicable to senior executives during the one-year period following the date of termination.
If Mr. Agree’s employment is terminated by the Company for any reason other than death, Disability or Cause (as defined in the Agree Agreement), or by Mr. Agree for Good Reason (as defined in the Agree Agreement), the Company shall pay to Mr. Agree (i) any accrued but unpaid salary and accrued but unused vacation, (ii) reimbursement of expenses incurred but unpaid prior to termination, (iii) a cash payment equal to 200% of his base salary, (iv) a cash payment equal to 200% of Mr. Agree’s average Annual Bonus for the three years immediately preceding the year of termination, (v) vesting of any restricted stock, stock option or other equity awards held by Mr. Agree to the extent unvested, including any performance awards at target and (vi) for a period of one year after termination, health benefits under the Company’s health plans and programs applicable to senior executives of the Company.
If Mr. Agree’s employment is terminated for nonrenewal of the employment agreement by either party, he will receive (i) any accrued but unpaid salary and accrued but unused vacation, (ii) reimbursement of expenses incurred but unpaid prior to termination, (iii) a cash payment equal to 100% of his base salary, (iv) for a period of one year after termination, health benefits under the Company’s health plans and programs applicable to senior executives of the Company, (v) a prorated Annual Bonus at the “target” level for the year in which the termination occurs and (vi) only in the case of expiration of the initial Term, elimination of any exclusively time-based vesting conditions on any restricted stock, stock option or other equity awards held by Mr. Agree to the extent unvested.
If a Change in Control (as defined in the Agree Agreement) occurs prior to the expiration of the Agree Agreement and Mr. Agree is terminated by the Company for reasons other than death, Disability or Cause, or Mr. Agree terminates employment for Good Reason, the Company will pay to Mr. Agree, (i) any accrued but unpaid salary and accrued but unused vacation, (ii) reimbursement of expenses incurred but unpaid prior to termination, (iii) a cash payment equal to 300% of his base salary, (iv) a cash payment equal to 300% of his average Annual Bonus for the three years immediately preceding the year of the termination, (v) vesting of any restricted stock, stock option or other equity awards held by Mr. Agree to the extent unvested, (vi) for a period of one year after termination, health benefits under the Company’s health plans and programs applicable to senior executives of the Company and (vii) a prorated Annual Bonus at “target” level for the year in which his employment is terminated.
If Mr. Agree is terminated for Cause or Mr. Agree terminates his employment without Good Reason, the Company will pay him in cash the salary and other benefits (excluding any Annual Bonus not yet paid)
earned and accrued prior to the date of termination, including reimbursement for expenses. If he is terminated by the Company for Cause or voluntarily terminates his employment, Mr. Agree will be subject to non-competenon- compete and non-solicitation provisions for one year following the date of termination. In addition, the Agree Agreement contains customary confidentiality provisions.
Former Chief InvestmentFinancial Officer and Current Chief Operating OfficerSecretary — Craig ErlichPeter Coughenour
Under the terms of a letter agreement dated June 18, 2020 (as amended, the “ErlichJanuary 5, 2022 (the “Coughenour Agreement”), Craig Erlich wasPeter Coughenour is employed as ourthe Company’s Chief InvestmentFinancial Officer beginning August 19, 2020 and remained in this role through his February 2021 appointment as Chief Operating Officer. The ErlichSecretary. Under the Coughenour Agreement, provided forMr. Coughenour is entitled to receive a base salary of $350,000, subject to adjustment,annual review by the Committee, and provided himparticipate in all benefit programs generally available to the Company’s executive officers, including any equity incentive plan or bonus plan. Beginning with eligibilitythe 2022 calendar year, Mr. Coughenour will be eligible to receive an(1) a target annual cash incentive awardbonus of 62.5% to 87.5%100% of his base salary subjectbased on attainment of performance targets, up to performance hurdles determined by the Company,a maximum value of 150% and an annuala threshold value of 50% (the “Annual Bonus”), and (2) target long-term incentive compensation equal to a grant date fair market value of 114% of his base salary to be awarded in restricted stock and performance units valued at 62.5% to 87.5% of his base salary. He was also entitled to an equity signing bonusawards in accordance with the form of a grant of restricted stock in the value of $300,000.2020 Plan.
Under the ErlichCoughenour Agreement, if Mr. Erlich isCoughenour were terminated without Cause (as defined therein) due to or within one year following a Change in Control (as defined in the 2020 Plan), he will receive either (1) a cash amount equal to the sum of (i) 200% of his current annual base salary, (ii) 200% of his annual cash incentive award for the previous fiscal year and (iii) any long-term incentive compensation for the year in which the termination occurs will be considered earned at the target level and immediately vested, or (2) in the event his employment is terminated due to a change in control which occurs during the first year of
employment, a cash amount equal to the sum of (i) 200% of his current annual base salary plus $200,000, (ii) 200% of his target annual cash bonus, and (iii) his long-term incentive compensation will be considered earned at the target level and immediately vested. The values for items (1) (i) and (ii) and (2) (i) and (ii) shall be automatically adjusted down from 200% to 100% after the two-year anniversary of Mr. Erlich’s start date.
If Mr. Erlich’s employment is terminated without cause by the Company during the 12 months following the Start Date (the “Severance Period”) (as defined in the Erlich Agreement), Mr. Erlich will receive in addition to any accrued amounts: (1) during the remainder of the Severance Period, continued payment of his Annual Base Salary, payable in equal installments as if his employment had not ended; (2) a payment equal to his Annual Cash Bonus at target, prorated based on the percentage of the year that he was employed by the Company; (3) immediate vesting of any restricted stock, stock option or other equity awards held by Mr. Erlich, to the extent unvested, including any performance awards at target during the Severance Period; and (4) during the Severance Period, such health benefits under the Company’s health plans and programs applicable to senior executives of the Company generally as he would have received and at such costs to him as would have applied in the absence of such termination, provided that the Company shall in no event be required to provide such benefits after such time as he become entitled to receive benefits from another employer or recipient of his services.
The Erlich Agreement conditions the receipt of severance payments on Mr. Erlich’s compliance with his post-employment obligations, which include confidentiality, non-solicitation and non-compete obligations.
Former Chief Financial Officer — Clayton Thelen
Clayton Thelen served as the Company’s Chief Financial Officer and Secretary until February 19, 2021 pursuant to a letter agreement dated October 20, 2017 (the “Thelen Agreement”). The Thelen Agreement provided for a base salary of $250,000, subject to increase as recommended by the Chief Executive Officer and approved by the Committee, and provided him with eligibility to receive an annual cash incentive award of 60% to 90% of his base salary, subject to performance hurdles determined by the Board, and a restricted stock grant valued at $200,000 based on the grant date fair value of $49.22 per share. The restricted stock would have vested on the five-year anniversary of December 4, 2017. Upon his resignation in February 2021, the Company entered into a separation agreement with Clayton Thelen that provided for accelerated vesting of a portion of Mr. Thelen’s restricted stock grant based on his years of service with the Company. Under the Thelen Agreement, as of December 31, 2020, if Mr. Thelen were terminated without Cause (as defined therein) due to or within one year following a change in control (as defined therein), he would have receivedreceive either (1) a cash amount equal to the sum of (i) 200% of his current annual base salary, (ii) 200% of his annual cash incentive award for the previous fiscal year and (iii) any long-term incentive compensation for the year in which the termination occurs will be considered earned at the target level and immediately vested, or (2) in the event his employment were terminated due to a change in control which occurred during the first fiscal year of his employment, a cash amount equal to the sum of (i) 200% of his current annual base salary plus $200,000, (ii) 200% of his projected threshold annual cash incentive award, and (iii) his threshold long-term incentive compensation would be considered earned at the target level and immediately vested. The values for items (1) (i) and (ii) and (2) (i) and (ii) werewill automatically be adjusted down from 200% to 100% after the two-year anniversary of Mr. Thelen’sCoughenour’s start date. Mr. ThelenCoughenour would not receive any severance following a change in control in the event he were retained by a successor organization for one year substantially on the same terms as set forth under the ThelenCoughenour Agreement.
If Mr. Thelen’sCoughenour’s employment were terminated by the Company for Cause, he would not have beenbe entitled to any severance payments, and he would forfeit any unvested securities of the Company. If Mr. Thelen’sCoughenour’s employment were terminated by the Company without Cause or by him with Good Reason (as defined therein), he would havewill (i) receivedreceive a severance amount equal to 100% of his annual base salary, (ii) beenbe deemed to have vested in a pro rata portion of the restricted stock, including any restricted shares awarded at the end of a performance period pursuant to performance awards, set forth in the letter agreement, based on the number of completed years of service since the start date and (iii) beenbe released from his post-employmentpost- employment non-competition covenant.
The ThelenCoughenour Agreement conditionedconditions the receipt of severance payments on Mr. Thelen’sCoughenour’s compliance with his post-employment obligations, which includedinclude confidentiality, non-solicitation and non-compete obligations.
Chief Operating Officer — Craig Erlich
Under the terms of a letter agreement dated June 18, 2020 (as amended, the “Erlich Agreement”), Craig Erlich was employed as our Chief Investment Officer beginning August 19, 2020 and remained in this role until his February 2021 appointment as Chief Operating Officer. The Erlich Agreement provided for a base salary of $350,000, subject to adjustment, and provided him with eligibility to receive an annual cash incentive award of 62.5% to 87.5% of his base salary, subject to performance hurdles determined by the Company, and an annual grant of restricted stock and performance units valued at 62.5% to 87.5% of his base salary. He was also entitled to an equity signing bonus in the form of a grant of restricted stock in the value of $300,000.
Under the Erlich Agreement, if Mr. Erlich is terminated without Cause (as defined therein) due to or within one year following a Change in Control (as defined in the 2020 Plan), he will receive either (1) a cash amount equal to the sum of (i) 200% of his current annual base salary, (ii) 200% of his annual cash
incentive award for the previous fiscal year and (iii) any long-term incentive compensation for the year in which the termination occurs will be considered earned at the target level and immediately vested, or (2) in the event his employment is terminated due to a change in control which occurs during the first year of employment, a cash amount equal to the sum of (i) 200% of his current annual base salary plus $200,000, (ii) 200% of his target annual cash bonus, and (iii) his long-term incentive compensation will be considered earned at the target level and immediately vested. The values for items (1) (i) and (ii) and (2) (i) and (ii) shall be automatically adjusted down from 200% to 100% after the two-year anniversary of Mr. Erlich’s start date.
If Mr. Erlich’s employment was terminated without cause by the Company during the 12 months following the Start Date (the “Severance Period”) (as defined in the Erlich Agreement), Mr. Erlich would have received in addition to any accrued amounts: (1) during the remainder of the Severance Period, continued payment of his Annual Base Salary, payable in equal installments as if his employment had not ended; (2) a payment equal to his Annual Cash Bonus at target, prorated based on the percentage of the year that he was employed by the Company; (3) immediate vesting of any restricted stock, stock option or other equity awards held by Mr. Erlich, to the extent unvested, including any performance awards at target during the Severance Period; and (4) during the Severance Period, such health benefits under the Company’s health plans and programs applicable to senior executives of the Company generally as he would have received and at such costs to him as would have applied in the absence of such termination, provided that the Company would have in no event be required to provide such benefits after such time as he become entitled to receive benefits from another employer or recipient of his services.
The Erlich Agreement conditions the receipt of severance payments on Mr. Erlich’s compliance with his post-employment obligations, which include confidentiality, non-solicitation and non-compete obligations.
ChangeChange in Control/Severance Payment Tables Control/Severance Payment Tables
The following table estimates the potential payments and benefits to named executive officers upon termination of employment or a change in control, assuming such event occurs on December 31, 2020.2022. The actual payments due on terminations occurring on different dates could materially differ from the estimates in the table.
Items Not Reflected in Table
The following items are not reflected in the table set forth below:
•
Accrued and unpaid salary, bonus and vacation.
•
Costs of COBRA or any other mandated governmental assistance program to former employees.
•
Welfare benefits provided to all salaried employees.
Named Executive Officer | | Base Salary | | Bonus | | Early Vesting of Stock Awards(1) | | Other(2) | | Total | | | Base Salary | | Bonus | | Early Vesting of Stock Awards(1) | | Other(2) | | Total | |
Joel Agree(3) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or Disability | | | $ | 145,833 | | | | $ | 973,031 | | | | $ | 5,871,024 | | | | $ | 15,340 | | | | $ | 7,005,229 | | | | | $ | 145,833 | | | | $ | 1,312,500 | | | | $ | 7,837,410 | | | | $ | 17,074 | | | | $ | 9,312,818 | | |
Change in Control | | | | 2,625,000 | | | | | 14,855,133 | | | | | 5,871,024 | | | | | 15,340 | | | | | 23,366,498 | | | | | | 2,625,000 | | | | | 6,901,609 | | | | | 13,301,361 | | | | | 17,074 | | | | | 22,845,044 | | |
Other (except for cause) | | | | 1,750,000 | | | | | 9,254,735 | | | | | 5,871,024 | | | | | 15,340 | | | | | 16,891,100 | | | | | | 1,750,000 | | | | | 3,726,073 | | | | | 13,301,361 | | | | | 17,074 | | | | | 18,794,508 | | |
Clayton Thelen(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Peter Coughenour(4) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or Disability | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Change in Control | | | | 314,000 | | | | | 711,969 | | | | | 476,313 | | | | | — | | | | | 1,502,282 | | | | | | 700,000 | | | | | 580,000 | | | | | 181,865 | | | | | — | | | | | 1,461,865 | | |
Other (except for cause) | | | | 314,000 | | | | | — | | | | | 166,459 | | | | | — | | | | | 480,459 | | | | | | 350,000 | | | | | — | | | | | — | | | | | — | | | | | 350,000 | | |
Laith Hermiz(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Craig Erlich(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or Disability | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Change in Control | | | | — | | | | | — | | | | | 672,791 | | | | | — | | | | | 672,791 | | | | | | 420,000 | | | | | 1,577,369 | | | | | 814,135 | | | | | — | | | | | 2,811,504 | | |
Other (except for cause) | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Craig Erlich(6) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Danielle Spehar(6) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or Disability | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Change in Control | | | | 900,000 | | | | | 656,250 | | | | | 302,340 | | | | | — | | | | | 1,858,590 | | | | | | — | | | | | — | | | | | 782,854 | | | | | — | | | | | 782,854 | | |
Other (except for cause) | | | | 221,507 | | | | | 80,308 | | | | | 302,340 | | | | | 13,407 | | | | | 617,562 | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Danielle Spehar(5) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nicole Witteveen(6) | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Death or Disability | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | $ | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
Change in Control | | | | — | | | | | — | | | | | 269,316 | | | | | — | | | | | 269,316 | | | | | | — | | | | | — | | | | | 449,838 | | | | | — | | | | | 449,838 | | |
Other (except for cause) | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | |
(1)
For all named executive officers with respect to the accelerated vesting of share-based awards, the table reflects the intrinsicfair market value of such acceleration, which for each unvested share of restricted stock is $66.58,$70.93, the closing price of our common stock on the NYSE on December 31, 2020.30, 2022. The table reflects the accelerated vesting of all unvested shares of restricted stock for all named executive officers. The table does not reflectreflects the accelerated vesting of certain unearned performance shares since all performance sharesunits awarded as of December 31, 2020 were still subject to the achievement of performance goals over a three-year performance period2022 as outlined in “Compensation Discussion and Analysis.”
(2)
Represents payment of health benefits of executive.
(3)
The information presented is based on the terms of Joel Agree’s employment agreement in place as of December 31, 2020.2022.
(4)
The information presented is based on the terms of Clayton Thelen’sPeter Coughenour’s employment agreement in place as of December 31, 2020. Mr. Thelen resigned as Chief Financial Officer, effective February 19, 2021.
(5)
The information presented is based on the 2014 Plan.2022.
(6)
(5)
The information presented is based on the terms of Craig Erlich’s employment agreement in place as of December 31, 2020.2022.
Pay Ratio(6)
The information presented is based on the 2020 Plan.
Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Joel Agree, our President and Chief Executive Officer. The Company’s Chief Executive Officer to median employee pay ratio was calculated in accordance with SEC requirements. However, due to the flexibility afforded in calculating the pay ratio, the ratio presented herein is a reasonable estimate and may not be comparable to the pay ratio presented by other companies.
The Company identified the median employee by examining 20202022 compensation for all employees of the Company excluding the President and Chief Executive Officer. We determined our median employee compensation, based on total compensation including base salary, bonuses earned, incentive stock earnedgranted and health care premiums for each of our 4875 employees, excluding Mr. Joel Agree, as of December 31, 2020,2022, to be $105,711.$108,465. As disclosed in the Summary Compensation Table, our current Chief Executive Officer’s annual total compensation for 20202022 was $7,285,613.$7,656,072. Based on the foregoing, our estimate of the ratio of the annual total compensation of our Chief Executive Officer and President to the median of the annual total compensation of all other employees was 6971 to 1.
The compensation measure described above was consistently applied to this entire employee population. The Company did not make any assumptions, adjustments or estimates with respect to the employee population or the compensation measure and did not annualize the compensation for any employees that were not employed by the Company for all of 2020.2022.
Pay Versus Performance
The following table provides information about the relationship between executive compensation actually paid and certain financial performance of the Company. For further information concerning the Company’s variable pay-for-performance philosophy and how the Company’s aligns executive compensation with the Company’s performance, refer to “Compensation Discussion and Analysis.”
Year | | | Summary Compensation Table Total for PEO(1) | | | Compensation Actually Paid to PEO(2) | | | Average Summary Compensation Table Total for Non-PEO NEOs(3) | | | Average Compensation Actually Paid to Non-PEO NEOs(4) | | | Value of Initial Fixed $100 Investment Based On: | | | Net Income (thousands)(7) | | | AFFO (per diluted common share and partnership unit)(8) | |
| Total Shareholder Return(5) | | | Peer Group Total Shareholder Return(6) | |
(a) | | | (b) | | | (c) | | | (d) | | | (e) | | | (f) | | | (g) | | | (h) | | | (i) | |
2022 | | | | $ | 7,656,072 | | | | | $ | 9,778,145 | | | | | $ | 1,048,261 | | | | | $ | 1,110,318 | | | | | $ | 113.42 | | | | | $ | 99.82 | | | | | $ | 153,035 | | | | | $ | 3.83 | | |
2021 | | | | $ | 7,341,625 | | | | | $ | 8,465,147 | | | | | $ | 825,199 | | | | | $ | 508,644 | | | | | $ | 109.60 | | | | | $ | 132.23 | | | | | $ | 122,876 | | | | | $ | 3.51 | | |
2020 | | | | $ | 7,517,366 | | | | | $ | 7,975,373 | | | | | $ | 761,782 | | | | | $ | 764,191 | | | | | $ | 98.51 | | | | | $ | 92.43 | | | | | $ | 91,972 | | | | | $ | 3.20 | | |
(1)
The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Agree (our Chief Executive Officer) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation Tables — Summary Compensation Table.”
(2)
The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Agree, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Agree during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Agree’s total compensation for each year to determine the compensation actually paid:
Year | | | Reported Summary Compensation Table Total for PEO | | | Reported Value of Equity Awards(a) | | | Equity Award Adjustments(b) | | | Compensation Actually Paid to PEO | |
2022 | | | | $ | 7,656,072 | | | | | $ | (3,666,730) | | | | | $ | 5,788,803 | | | | | $ | 9,778,145 | | |
2021 | | | | $ | 7,341,625 | | | | | $ | (3,469,080) | | | | | $ | 4,592,602 | | | | | $ | 8,465,147 | | |
2020 | | | | $ | 7,517,366 | | | | | $ | (3,731,809) | | | | | $ | 4,189,816 | | | | | $ | 7,975,373 | | |
(a)
The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” column in the Summary Compensation Table for the applicable year.
(b)
The equity award adjustments for each applicable year include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in the applicable year that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of the applicable year (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of the applicable year; (iii) for awards that are granted and vest in same applicable year, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in the applicable year, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during the applicable year, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock in the applicable year prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for the applicable year. The valuation assumptions used to calculate fair values did not materially differ from those disclosed at the time of grant. The amounts deducted or added in calculating the equity award adjustments are as follows:
Year | | | Year End Fair Value of Equity Awards Granted During the Year That are Outstanding and Unvested as of the End of the Year | | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | | | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Total Equity Award Adjustments | |
2022 | | | | $ | 4,562,604 | | | | | $ | 1,182,878 | | | | | $ | (468,543) | | | | | $ | 511,864 | | | | | $ | 5,788,803 | | |
2021 | | | | $ | 3,963,450 | | | | | $ | 124,045 | | | | | $ | (96,376) | | | | | $ | 601,483 | | | | | $ | 4,592,602 | | |
2020 | | | | $ | 3,257,260 | | | | | $ | 375,176 | | | | | $ | 360,480 | | | | | $ | 196,900 | | | | | $ | 4,189,816 | | |
(3)
The dollar amounts reported in column (d) represent the average of the amounts reported for the Company’s NEOs as a group (excluding Mr. Agree) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Agree) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2022, Peter Coughenour, Craig Erlich, Danielle Spehar, and Nicole Witteveen; (ii) for 2021, Peter Coughenour, Craig Erlich, Simon Leopold, Danielle Spehar, Clayton Thelen and Nicole Witteveen; and (iii) for 2020, Clayton Thelen, Laith Hermiz, Craig Erlich, and Danielle Spehar.
(4)
The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Agree), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Agree) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Agree) for each year to determine the compensation actually paid, using the same methodology described above in Note 2:
Year | | | Average Reported Summary Compensation Table Total for Non-PEO NEOs | | | Average Reported Value of Equity Awards | | | Average Equity Award Adjustments(a) | | | Average Compensation Actually Paid to Non-PEO NEOs | |
2022 | | | | $ | 1,048,261 | | | | | $ | (256,408) | | | | | $ | 318,465 | | | | | $ | 1,110,318 | | |
2021 | | | | $ | 825,199 | | | | | $ | (343,954) | | | | | $ | 27,399 | | | | | $ | 508,644 | | |
2020 | | | | $ | 761,782 | | | | | $ | (278,270) | | | | | $ | 280,679 | | | | | $ | 764,191 | | |
(a)
The amounts deducted or added in calculating the total average equity award adjustments are as follows:
Year | | | Average Year End Fair Value of Equity Awards Granted During the Year That are Outstanding and Unvested as of the End of the Year | | | Average Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards | | | Average Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | | | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | | | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | | | Average Total Equity Award Adjustments | |
2022 | | | | $ | 312,359 | | | | | $ | (589) | | | | | $ | (8,771) | | | | | $ | 0 | | | | | $ | 15,466 | | | | | $ | 318,465 | | |
2021 | | | | $ | 108,261 | | | | | $ | 6,572 | | | | | $ | (1,852) | | | | | $ | (95,249) | | | | | $ | 9,667 | | | | | $ | 27,399 | | |
2020 | | | | $ | 250,810 | | | | | $ | 11,216 | | | | | $ | 7,286 | | | | | $ | 0 | | | | | $ | 11,367 | | | | | $ | 280,679 | | |
(5)
Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between the Company’s share price at the end and the beginning of the measurement period by the Company’s share price at the beginning of the measurement period.
(6)
Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the following published industry index: MSCI US REIT (RMZ) Index.
(7)
The dollar amounts reported represent the amount of net income reflected in the Company’s audited consolidated financial statements for the applicable year.
(8)
The Company defines Adjusted Funds From Operations (AFFO) as net income computed in accordance with GAAP, excluding certain non-cash and infrequently occurring items, specifically, (i) depreciation of real-estate and non-real estate assets; (ii) amortization of acquisition related lease intangibles and leasing costs; (iii) provision for impairment; (iv) gains (or losses) from sales of real estate assets and/or changes in control; (v) loss on extinguishment of debt and settlement of related hedges; (vi) straight-line accrued rent; (vii) stock-based compensation expense; (viii) amortization of financing fees; and (ix) certain other items, such as deferred tax expense, that increase net income in accordance with GAAP. While the Company uses numerous financial and non-financial performance measures for the purpose of evaluating performance for the Company’s compensation programs, the Company has determined AFFO (per diluted common share and partnership unit) is the financial performance measure that, in the Company’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used by the company to link compensation actually paid to the company’s NEOs, for the most recently completed fiscal year, to Company performance.
Financial Performance Measures
As described in greater detail in “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects a variable pay-for-performance philosophy. The metrics that the Company uses for both our long-term and short-term incentive awards are selected based on the objective of incentivizing our NEOs to increase the value of our enterprise for our shareholders. The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows:
•
AFFO per share
•
Relative Total Shareholder Return
•
Net Debt to Annualized Recurring EBITDA
Analysis of the Information Presented in the Pay Versus Performance Table
The Company is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table, including “compensation actually paid”, as required by Item 402(v) of Regulation S-K. The Compensation Committee has not previously used or considered “compensation actually paid” as computed in accordance with Item 402(v) of Regulation S-K to set NEO target pay or align our NEO compensation to Company performance. See “Compensation Discussion and Analysis” for a discussion of how the Compensation Committee designs our executive compensation program and sets NEO target pay.
The charts below compare (i) the compensation actually paid to our PEO and the average of the compensation actually paid to our non-PEO NEOs, with (ii) our cumulative TSR, (iii) the MSCI US REIT Index TSR, and (iv) our AFFO Per Share in each case, for the fiscal years ended December 31, 2020, 2021 and 2022.
REPORT OF THE AUDIT COMMITTEEAUDIT-RELATED MATTERS
Report of the Audit Committee
Management is responsible for the Company’s financial statements, internal controls, accounting and financial reporting processes and compliance with applicable laws and regulations. The independent registered public accounting firm is responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with standards of the Public Company Accounting Oversight Board (“PCAOB”) and an independent audit of the effectiveness of the Company’s internal control over financial reporting in accordance with the standards of the PCAOB, and for expressing their opinions thereon. The Audit Committee’s responsibility is to provide general oversight of the foregoing matters, as well as to engage the Company’s independent registered public accounting firm and establishing the terms of retention. The Audit Committee is governed by a charter, a copy of which is available on our website at www.agreerealty.com.
Review and Discussions with Management and Independent Accountants. In this context, the Audit Committee has met and held discussions with management and Grant Thornton, the Company’s independent registered public accounting firm. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the audited consolidated financial statements with management and Grant Thornton. The Audit Committee discussed with Grant Thornton the matters required to be discussed by the applicable requirements of the PCAOB and the SEC.
Grant Thornton also provided to the Audit Committee the written disclosures and letter from Grant Thornton required by the applicable requirements of the PCAOB regarding Grant Thornton’s communications with the Audit Committee concerning independence, and the Audit Committee has discussed with Grant Thornton its independence with respect to the Company. The Audit Committee has reviewed the original proposed scope of the annual audit of the Company’s financial statements and the associated fees and any significant variations in the actual scope of the audit and fees. See “Audit Committee Matters” for additional information regarding the Audit Committee’s pre-approval policies and procedures for audit and non-audit services provided by Grant Thornton.
Conclusion.Conclusion. Based on the review and discussions referred to above, the Audit Committee recommended to the Board that the Company’s audited consolidated financial statements be included in the Company’s annual report on Form 10-K for the year ended December 31, 20202022 for filing with the SEC.
AUDIT COMMITTEE
Farris G. Kalil, Chairman
Karen Dearing,
Chair
Merrie S. Frankel
William S. Rubenfaer
Michael Hollman
AUDIT COMMITTEE MATTERSAudit Committee Matters
Pre-Approval Policies and Procedures Procedures for Audit Audit and Non-Audit Services Non-Audit Services
In accordance with Audit Committee policies and procedures and applicable law, the Audit Committee must pre-approve all services to be provided by its independent registered public accounting firm. In determining whether to pre-approve such services, the Audit Committee must consider whether the provision of such services is consistent with the independence of such accountants. The Audit Committee generally provides pre-approvals at its regularly scheduled meetings. The Audit Committee has delegated to its chairman, Farris G. Kalil,chairperson, Karen Dearing, the authority to grant pre-approvals of non-audit services between regularly scheduled meetings of the Audit Committee, provided that any such pre-approval by Mr. Kalilthe chairperson shall be reported to the Audit Committee at its next scheduled meeting. However, pre-approval of non-audit services is not required if (1) the aggregate amount of non-audit services is less than 5% of the total amount paid by us to the auditor during the fiscal year in which the non-audit services are provided; (2) such services were not recognized by us as non-audit services at the time of the engagement; and (3) such services are promptly brought to the attention of the Audit Committee and, prior to completion of the audit, are approved by the Audit Committee or by one or more Audit Committee members who have been delegated authority to grant approvals.
Fees PaidFees Paid to Independent Registered Public Accounting Firms Independent Registered Public Accounting Firms
Grant Thornton audited and reported on the Company’s financial statements for the years ended December 31, 20202022 and December 31, 2019.2021. The following table sets forth the fees that we were billed for audit and other services provided by Grant Thornton in 20202022 and 2019.2021. All such fees paid to Grant Thornton were approved in conformity with the pre-approval policies and procedures noted above.
| | 2020 | | 2019 | | | 2022 | | 2021 | |
Audit Fees | | | $ | 923,968 | | | | $ | 592,750 | | | | | $ | 971,250 | | | | $ | 875,875 | | |
Audit-Related Fees | | | | — | | | | | — | | | | | | — | | | | | — | | |
Tax Fees | | | | — | | | | | — | | | | | | — | | | | | — | | |
All Other Fees | | | | — | | | | | — | | | | | | — | | | | | — | | |
| | | $ | 923,968 | | | | $ | 592,750 | | | | | $ | 971,250 | | | | $ | 875,875 | | |
Audit Fees.Fees. Audit Fees consist of fees and expenses billed for professional services rendered to audit financial statements, assess effectiveness of internal control over financial reporting, review interim consolidated financial statements, review registration statements and prepare comfort letters, services that are normally provided in connection with statutory and regulatory filings or engagements.
Audit-Related Fees.Fees. Audit-Related Fees consist of fees and expenses for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are not Audit Fees. There were no audit-related fees for the years ended December 31, 2022 and 2021.
PROPOSALS
Proposal1 — Election of Directors
Pursuant to the Bylaws, the directors are required to be divided into three classes serving three-year staggered terms. At the 2023 Annual Meeting, three directors will be elected to serve until the annual meeting of stockholders in 2026, or until such director’s earlier resignation, retirement or other termination of service, and, in the case of a holdover director, until his or her successor is duly elected and qualified.
The Board has re-nominated (i) Merrie Frankel, John Rakolta, Jr. and Jerome Rossi whose terms expire at the 2023 Annual Meeting, to serve until the annual meeting of stockholders in 2026. The Board has affirmatively concluded that each of Merrie Frankel, John Rakolta, Jr., and Jerome Rossi are independent under the applicable rules of the NYSE.
Each nominee has consented to serve his or her term until his or her successor has been duly elected and qualified, if elected by the stockholders. If any nominee becomes unable or unwilling to serve between the date of this proxy statement and the 2023 Annual Meeting, the Board may designate a new nominee and the persons named as proxies by the Board will vote for that substitute nominee. Alternatively, the Board may reduce the size of the Board.
The Board recommends that you vote “FOR” the election of its director nominees.
The following table sets forth the director nominees and continuing directors of the Board:
Name | | | Age | | | Title | | | Term Ending | |
Jerome Rossi(1) | | | 79 | | | Independent Director | | | 2023 | |
Merrie Frankel(1) | | | 68 | | | Independent Director | | | 2023 | |
John Rakolta, Jr..(1) | | | 75 | | | Independent Director | | | 2023 | |
Richard Agree | | | 79 | | | Executive Chairman of the Board and Director | | | 2024 | |
Karen Dearing | | | 58 | | | Independent Director | | | 2024 | |
Michael Hollman | | | 42 | | | Independent Director | | | 2024 | |
Joel Agree | | | 44 | | | Chief Executive Officer and Director | | | 2025 | |
Michael Judlowe | | | 57 | | | Independent Director | | | 2025 | |
Gregory Lehmkuhl | | | 50 | | | Independent Director | | | 2025 | |
(1)
Standing for re-election to a three-year term.
The biographical descriptions below set forth certain information with respect to the director nominees and continuing directors of the Board. The Board has identified specific attributes of each director that the Board has determined qualify that person for service on the Board.
Joel Agree has been our President and a Director since June 2009. He was appointed as Chief Executive Officer in January 2013, and from June 2009 to that date he served as Chief Operating Officer. Prior to being promoted to President and Chief Operating Officer, from January 2006 to June 2009, Mr. Joel Agree served as our Executive Vice President. He is a member of the State Bar of Michigan and the International Council of Shopping Centers. He holds a Juris Doctor degree from Wayne State University Law School and a Bachelor of Arts degree in Political Science from the University of Michigan. Joel Agree is the son of Richard Agree, our Executive Chairman.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Joel Agree, in light of his day-to-day company-specific operational, management and market experience through his position as President and Chief Executive Officer of our Company, to continue to serve as a director of the Board.
Michael Judlowe has been a Director of our Company since September 2021. Mr. Judlowe most recently served as Chairman of Jefferies’ US Real Estate, Gaming and Lodging investment banking practice from June 2019 to March 2021. Mr. Judlowe previously served as Co-Head of Equity Capital Markets Americas from 2013 to 2019. He joined Jefferies as a Managing Director in 2010 to establish the
Real Estate Equity Capital Markets practice. Prior to his time at Jefferies, Mr. Judlowe spent 10 years in Equity Capital Markets at Citigroup. Over his career in banking, Mr. Judlowe has led a significant number of equity transactions and successful initial public offerings, including National Storage Affiliates Trust (NYSE: NSA), QTS Realty Trust, Inc. (NYSE: QTS), AmREIT, Inc. (formerly NYSE: AMRE) and ClubCorp Holdings, Inc. (formerly NYSE: MYCC). Mr. Judlowe earned his B.A. in Political Science from Tufts University and an M.B.A. in Marketing from NYU’s Stern School of Business. The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Judlowe, in light of his significant experience in equity capital markets, investment banking and REITs, to continue to serve as a director of the Board.
Gregory Lehmkuhl has been a Director of our Company since July 2018 and has served as our Lead Independent Director since December 2020. Mr. Lehmkuhl is the President and Chief Executive Officer of Lineage Logistics (“Lineage”) and oversees all facets of the company’s operations nationwide. Prior to joining Lineage, Mr. Lehmkuhl served as Corporate Executive Vice President for Con-Way and President of Con- Way Freight, where he was responsible for overall company operating and financial performance, strategic planning and business plan development, as well as direction of the company’s continuous improvement processes. Prior to Con-Way, he held senior management positions at Menlo Worldwide Logistics, Delphi Automotive Systems and Penske Logistics. Mr. Lehmkuhl holds a Bachelor’s Degree in Business from Michigan State University, as well as a Master of Business Administration from Oakland University.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Lehmkuhl, in light of his extensive operational and executive experience, to continue to serve as a director of the Board.
Jerome Rossi has been a Director of our Company since January 2015. Mr. Rossi currently serves as the Chief Executive Officer of R&R Consulting and previously served as the Chairman of Gabe’s Stores, a private fashion discount retailer. Mr. Rossi was formerly Senior Executive Vice President and Group President of The TJX Companies from 2005 until January 2015. He served as Chief Operating Officer of HomeGoods from 2000 to 2005, Executive Vice President and Chief Operating Officer of The Marmaxx Group from 1995 to 2000 and President and Chief Executive Officer of Marshalls from 1990 to 1995. Mr. Rossi began his career in 1967 as a Certified Public Accountant with Arthur Young & Co. Mr. Rossi currently serves on the Board of Directors of Home Base, the Board of Advisors at Bentley College, the Board of Directors at Bethany Hill School, the Board of Overseers at Newton Wellesley Hospital, the Board of Overseers at Beth Israel Hospital and the Board of Directors of The National Domestic Violence Hotline.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Rossi, in light of his extensive career as a senior executive, deep knowledge of retail real estate and retail operations, strong leadership capabilities and public company experience, to continue to serve as a director of the Board.
Merrie S. Frankel has been a Director of our Company since October 2016. Ms. Frankel is currently President of Minerva Realty Consultants, LLC (“Minerva”), an independent real estate investment trust (“REIT”) and ratings advisory firm that also provides litigation support for REITs, public and private companies and funds. Prior to joining Minerva, Ms. Frankel spent 18 years at Moody’s Investors Service in the Commercial Real Estate Finance Group as Vice President and Senior Credit Officer, where she was responsible for rating REITs and real estate operating companies in the United States and Canada. Prior to her time at Moody’s, she was Senior Vice President and Director of Portfolio Management for the Argo Funds and also held numerous positions within the real estate industry at notable companies including Ernst & Young, Cushman & Wakefield, J.P. Morgan Securities and Salomon Brothers Inc. Ms. Frankel is currently an adjunct professor at Columbia University’s Graduate School of Architecture, Planning and Preservation and New York University’s Schack Institute of Real Estate where she teaches capital markets. She holds J.D. and M.B.A. degrees from Hofstra University Law and Graduate Business School and graduated with a B.A. in English from the University of Pennsylvania with various honors and is admitted to the New York Bar. Among her industry affiliations, she is a Trustee and previously chaired the New York District Council for the Urban Land Institute; on the board of the Financial Women’s Association of New York as a finance committee representative; and a member of the Advisory Committee
for Women in PropTech. She recently served as a Treasurer of the New York Women Executives in Real Estate Charitable Fund; a board member and chair of the Audit/Finance committee for the Martha Graham Dance Company; and on the Nareit Editorial Advisory Board. She was cited as one of the “2020 Directors to Watch” by Board and Directors and one of 50 “Women of Influence” for “Real Estate New York” in 2008.
The Board has determined that it is in the best interests of our Company and our stockholders for Ms. Frankel, in light of her experience as a senior executive in the real estate and financial services industries, as well as her significant expertise in capital markets, accounting and REITs, to continue to serve as a director of the Board.
Ambassador John Rakolta, Jr. (Ret.) was reappointed to the Board in February 2021. Mr. Rakolta currently serves as the chairman of Walbridge, on the Board of Directors of Business Leaders for Michigan, and he recently served as the United States Commissioner General of Expo Dubai 2020. He previously served on the Board from August 2011 until his confirmation as United States Ambassador to the United Arab Emirates in September 2019. Prior to such confirmation, Mr. Rakolta served as the long-time chairman and chief executive officer of Walbridge, a privately held construction company. Mr. Rakolta also served on the board and was co-chairman of the Metropolitan Affairs Corporation and the Coalition for the Future of Detroit School Children until his confirmation as United States Ambassador to the United Arab Emirates in September 2019. He was also a director and member of the Executive Committee of the Detroit Regional Chamber and served on the Board of Directors of New Detroit, Inc. and the College for Creative Studies. Mr. Rakolta was appointed Romania’s Honorary Consul General to the United States in 1998, a position that he resigned from upon his confirmation as United States Ambassador to the United Arab Emirates in September 2019. He received a Bachelor of Science degree in Civil Engineering from Marquette University in 1970.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Rakolta, in light of his strong executive background in business and construction and his leadership skills to continue to serve as a director of the Board.
Richard Agree has been the Executive Chairman of the Board since January 2013. From December 1993 until January 2013, he was our Chief Executive Officer and Chairman of the Board. Prior thereto, he worked as managing partner of the general partnerships which held our properties prior to the formation of our Company and the initial public offering and was President of the predecessor company since 1971. Mr. Richard Agree has managed and overseen the development of over eight million square feet of retail real estate during the past 50 years. He is a graduate of the Detroit College of Law, a member of the State Bar of Michigan and the International Council of Shopping Centers. Mr. Richard Agree is the father of Mr. Joel Agree, our Chief Executive Officer and one of our Directors.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Richard Agree, in light of his extensive company-specific, operational, market and finance experience as the founder and former Chief Executive Officer of our Company, his leadership abilities and his expertise in the ownership, development, acquisition and management of retail real estate net leased to national tenants, to continue to serve as a director of the Board.
Karen Dearing was appointed to the Board in December 2020. She currently serves as Executive Vice President — Special Projects overseeing the integration of Sun Communities Inc.’s (“Sun Communities”) investments in the United Kingdom, as well as advising on other strategic initiatives. Ms. Dearing served as Sun Communities’ Chief Financial Officer, Treasurer, and Secretary from 2008 — April 2022. In this role, she was responsible for the overall management of the information technology, accounting, tax and finance departments, and all internal and external financial reporting. Prior to becoming Chief Financial Officer and Executive Vice President, Ms. Dearing served as Senior Vice President of Sun Communities from 2006 to 2008, Corporate Controller from 2002 to 2006 and Director of Finance from 1998 to 2002. Ms. Dearing has worked extensively on Sun Communities’ accounting and finance matters related to its ground-up developments and expansions. Before joining Sun Communities, Inc., Ms. Dearing had over seven years of experience as the Financial Controller of a privately-owned automotive supplier and over four years of experience as a certified public accountant with Deloitte. Ms. Dearing holds a B.S. in accounting from Michigan State University. She is a Certified Public Accountant and a member of Nareit, AICPA and MICPA.
The Board has determined that it is in the best interests of our Company and our stockholders for Ms. Dearing, in light of her corporate accounting expertise and finance and real estate experience, to continue to serve as a director of the Board.
Michael Hollman was appointed to the Board in August 2020. He currently serves as SVP, Treasurer and Head of Strategic Finance at Hilton, a position he has held since 2020. In this role, he oversees the Corporate Finance, Corporate Strategy and Global Treasury teams, and is responsible for a wide variety of activities and initiatives, including public market offerings, capital allocation, cash management, business development and Mergers & Acquisitions. Prior to becoming Treasurer, Mr. Hollman served as Vice President of Mergers & Acquisitions and Capital Markets from 2017 to 2020. Before joining Hilton, Mr. Hollman worked in investment banking, specializing in the real estate and lodging sectors. He most recently served as a Director of the Real Estate and Lodging Investment Banking Group at Citigroup from 2013 to 2017, and previously held similar roles at UBS Investment Bank from 2004 to 2013. Prior to banking, Mr. Hollman was a management consultant at Kurt Salmon Associates, now a part of Accenture Strategy, from 2004 to 2007, where he was responsible for the development and execution of strategic initiatives and supply chain-related projects for consumer product and retail companies. He currently serves on the board of directors and as the Treasurer on the executive committee of DC Central Kitchen. He received a B.S. in Industrial Engineering from the Georgia Institute of Technology with honors and an M.B.A. from Columbia Business School.
The Board has determined that it is in the best interests of our Company and our stockholders for Mr. Hollman, in light of his corporate finance and investment banking experience, to continue to serve as a director of the Board.
PROPOSALProposal 2 — RATIFICATION OF APPOINTMENT OF INDEPENDENTRatification of appointment of independent registered public accounting firm for 2023
REGISTERED PUBLIC ACCOUNTING FIRM FOR 2021
The Audit Committee currently believes that we should continue our relationship with Grant Thornton and has appointed Grant Thornton to continue as our independent accountants for 2021.2023. See “Report“Audit Related Matters — Report of the Audit Committee” and “Audit Related Matters — Audit Committee Matters” for additional information on matters related to Grant Thornton’s provision of services to us.
The affirmative vote of a majority of votes cast is necessary to ratify the Audit Committee’s appointment of Grant Thornton as our independent registered public accounting firm for 2023. Abstentions are not treated as votes cast under Maryland law and, therefore, they have no effect on the outcome of this proposal. Although stockholder ratification of the appointment is not required by current law, rules or regulations and is not binding on us, the Board considers the selection of the independent registered public accounting firm to be an important matter of stockholder concern and the Audit Committee will take your vote into consideration when appointing our independent registered public accounting firm in the future. Even if the stockholders ratify the appointment of Grant Thornton, the Audit Committee in its sole discretion may terminate the engagement of Grant Thornton and engage another independent auditor at any time during the year, although it has no current intention to do so.
A representative of Grant Thornton will be present at the 20212023 Annual Meeting and will be provided with the opportunity to make a statement if desired. Such representative will also be available to respond to appropriate questions.
The Board recommends that you vote “FOR” the ratification of the appointment of Grant Thornton as our independent registered public accounting firm for 2021.2023.
PROPOSALProposal 3 — ADVISORY (NON-BINDING) VOTE
APPROVING EXECUTIVE COMPENSATIONAdvisory (Non-Binding) Vote Approving Executive Compensation
We are presenting the following proposal, which gives you as a stockholder the opportunity to endorse or not endorse our executive compensation program for named executive officers by voting for or against the following resolution.
“RESOLVED, that the stockholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 20212023 Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables and the other related disclosure.”
The Board will consider the outcome of the stockholder affirmative vote a majority of votes cast to approve our executive compensation, which is an advisory, non-binding vote. Abstention and broker non-votes are not treated as votes cast under Maryland law and, therefore, they have no effect on the outcome of this proposal. While this vote is advisory and not binding on us, it will provide information to us and the Compensation Committee regarding stockholder sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining executive compensation for the remainder of 20202023 and beyond. We recognize the interest our stockholders have in the compensation of our executive officers, and we are providing this advisory vote in recognition of that interest as required by Section 14A of the Exchange Act. In a non-binding advisory vote on the frequency of advisory votes on executive compensation held at our 2017 annual meeting of stockholders, stockholders voted in favor of holding such votes annually. In light of this result and other factors considered by the Board, the Board determined that the Company would hold advisory votes on executive compensation on an annual basis until the next required advisory vote. The next required advisory vote will occur at our 2023 annual meeting of stockholders.
As described in detail under the heading “Compensation Discussion and Analysis” above, we seek to closely align the interests of our executive officers with the interests of our stockholders. Our compensation programs are designed to reward the executive officers for the achievement of short-term and long-term strategic and operational goals, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking. Following is a summary of some of the primary components and rationale of our compensation philosophy.
•
Provide total compensation that is both fair and competitive. To attract and reduce the risk of losing the services of valuable officers but to avoid the expense of excessive pay, compensation should be competitive. The Compensation Committee assesses the competitiveness of our compensation to our executive officers by comparing it to the compensation of executive officers at other public companies. The Compensation Committee assesses the competitiveness of the Company’s compensation to its executive officers through review of materials provided or reviewed by Meridian and by reviewing the 20192020 Nareit Compensation and Benefits Survey to provide it with relevant market data.
•
Attract, retain and motivate key executives who are critical to our operations.operations. The primary purpose of our executive compensation program has been and is to achieve our business objectives by attracting, retaining and motivating talented executive officers by providing incentives and economic security.
•
Reward superior individual and company performance on both a short-term and long-term basis.basis. Performance-based pay aligns the interests of management with the interests of our stockholders. Performance-based compensation motivates and rewards individual efforts and company success.
•
Align executives’ long-term interests with those of our stockholders.stockholders. The Compensation Committee believes that requiring the executive officers to maintain a meaningful ownership interest in the Company relative to their annual base salaries may encourage the executive officers to act in a manner that creates value for our stockholders.
The Board recommends that you vote “FOR” the approval of the compensation of our named executive officers as disclosed in this proxy statement.
PROPOSALProposal 4 — APPROVAL OF CHARTER AMENDMENTAdvisory (Non-Binding) Vote On The Frequency Of Advisory Votes On Named Executive Officer Compensation
On February 23, 2021The Dodd-Frank Act also enables our stockholders to indicate how frequently we should seek an advisory vote on the compensation of our named executive officers, as disclosed pursuant to the SEC’s compensation disclosure rules, such as Proposal 3 included in this proxy statement. By voting on this Proposal 4, stockholders may indicate whether they would prefer an advisory vote be held on named executive officer compensation once every one, two, or three years.
After careful consideration of this Proposal, our Board declaredhas determined that an advisory vote on named executive officer compensation that occurs every year is the Charter Amendment, as set forth in the form of Articles of Amendment attached hereto as Appendix A, to be advisable and in the best interests ofmost appropriate alternative for the Company, and directedtherefore our Board recommends that you vote for a one-year interval for the Charter Amendmentadvisory vote on named executive officer compensation. An annual advisory vote on named executive officer compensation will allow our stockholders to provide us with their direct input on our compensation philosophy, policies and practices as disclosed in the proxy statement every year. We understand that our stockholders may have different views as to what is the best approach for the Company, and we look forward to hearing from our stockholders on this Proposal.
You may cast your vote on your preferred voting frequency by choosing the option of one year, two years, three years or abstain from voting.
The affirmative vote of a majority of the votes cast at the 2023 Annual Meeting is required to approve the frequency of future votes on our named executive officers’ compensation. Abstentions and broker non-votes are not treated as votes cast under Maryland law and, therefore, they have no effect on the outcome of this proposal. The Board expects to be submitted for considerationguided by the Company’s stockholders atalternative that receives the 2021 Annual Meeting. The description set forth below summarizesgreatest number of votes, even if not a majority. This vote is advisory and not binding on the Charter Amendment and is qualified in its entirety by the form of Articles of Amendment attached hereto as Appendix A, which you should read in their entirety.
Amendment to Revise the Provisions Regarding Authorized Shares
The Charter currently authorizesBoard or the Company to issue 90,000,000 shares of common stock. The Charter Amendment would increasein any way, and therefore the number of shares of common stock that the Company is authorized to issue from 90,000,000 shares of common stock to 180,000,000 shares of common stock, representing an increase of 90,000,000 shares of authorized common stock.
The following table describes the allocation of our currently authorized common stock among issued, reserved, and unreserved shares of common stock as of March 8, 2021:
| Authorized | | | Issued and Outstanding | | | Available for Issuance | | | Reserved for Future Issuance(1) | | | Unissued, Unreserved Shares of Common Stock | |
| 90,000,000 | | | 63,573,009 | | | 26,426,991 | | | 23,432,644 | | | 2,994,347 | |
(1)
Includes reserves for future issuance related to the Company’s equity incentive plan, the conversion of limited partnership units, the Company’s forward equity agreement and the Company’s at-the-market equity program.
As indicated in the table above, only 2,994,347 shares of common stock are currently unreserved and available for issuance.
Reasons for the Increase in Authorized Shares of Common Stock
The Board believesmay decide that it is advisable and in the best interests of our stockholders and the Company to amendhold an advisory vote on named executive officer compensation more or less frequently than the Charter to increase the number of authorized shares of common stock in order to provideoption approved by our Company with greater flexibility in planning for future corporate needs including, but not limited to, transactions to raise capital, property acquisitions, stock dividends or stock splits, grants under equity compensation plans, potential strategic transactions, including mergers, acquisitions and other business combinations, as well as other corporate purposes. If the Charter Amendment is not approved, our growth and business strategies and our ability to raise additional capital may be limited by the lack of availability of unissued and unreserved shares of common stock.stockholders.
Effects of the Increase in Authorized Shares of Common Stock
The additional shares of common stock proposed to be authorized pursuant to the Charter Amendment would have rights identical to the currently outstanding shares of our common stock. Approval of this Proposal No. 4 would not affect the rights of the holders of currently outstanding shares of our common stock, except for effects incidental to increasing the number of shares of our common stock outstanding if such additional authorized shares of common stock are issued, such as dilution of any earnings per share and voting rights of current holders of common stock. Under the Charter, stockholders do not have preemptive rights to subscribe for additional securities that may be issued by us unless the Board in its sole discretion determines to grant such rights, which means that current stockholders do not have a prior right thereunder to purchase any new issue of common stock in order to maintain their proportionate ownership interests in the Company.
The Board recommends that youa vote of “FOR”EVERY YEAR” for Proposal 4 to amend our Charter to increase the number of authorized shares of our common stock.4.
RELATED PERSON TRANSACTIONS
PoliciesPolicies and Procedures Procedures
Under SEC rules, a related person transaction is any transaction or any series of transactions in which our Company was or is to be a participant, the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest. A “related person” is a director, officer, nominee for director or a more than 5% stockholder since the beginning of our last completed fiscal year, and their immediate family members.
The non-interested directors of the Board review and oversee any proposed or ongoingWe adopted a Related Party Transactions Policy in 2022 to ensure that all related person transactions are subject to ensure therereview, approval or ratification in accordance with specified procedures. The Board or Audit Committee approves or ratifies only those related person transactions that are no conflictsdetermined by it to be, under all of interest. Ourthe circumstances, in the best interests of the Company and its stockholders.
In addition, our written Code of Conduct expressly prohibits any actions that would cause a conflict of interest except under guidelines approved by the Board. Our Code of Conduct requires officers and directors along with other employees to provide full disclosure of any such transaction to appropriate persons. Officers, directors and employees are encouraged to speak with specified persons if there is any doubt as to whether a transaction could comprise a related person transaction or otherwise constitute a conflict of interest.
If a related person transaction is proposed, the non-interested directors of the Board review such transaction to ensure that our involvement in such transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party and is in the best interests of us and our stockholders. If necessary or appropriate, we will engage third party consultants and special counsel, and the Board may create a special committee, to review such transactions. There were no related person transactions in 2020,2022, except for the Reimbursement Agreement described below.
The Company and Richard Agree, the Executive Chairman of the Company, are parties to a Reimbursement Agreement dated November 18, 2014. Pursuant to the Reimbursement Agreement, Mr. Agree has agreed to reimburse the Company for any loss incurred under the unsecured revolving credit facility of our majority owned partnership, Agree Limited Partnership (the “Operating Partnership”) in an amount not to exceed $14 million to the extent that the value of the Operating Partnership’s assets available to satisfy the Operating Partnership’s obligations under the revolving credit facility is less than $14 million.
ADDITIONAL INFORMATION
Delinquent Section 16(a) ReportsCost of Proxy Solicitation
Section 16(a) of the Exchange Act, requires our directors, certain of our executive officers and persons who beneficially own more than 10% of a registered class of our equity securities (“insiders”) to file reports with the SEC regarding their pecuniary interest in any of our equity securities and any changes thereto. Based on our review of the insiders’ forms filed with the SEC and representations made by our directors and applicable executive officers, no insider failed to file on a timely basis a Section 16(a) report in 2020, except that one transaction involving the purchase of shares of our common stock, was inadvertently filed late on a Form 4 by Greg Lehmkuhl.
Cost of Proxy Solicitation
All of the expenses of preparing, assembling, printing and mailing the Notice and the other materials used in the solicitation of proxies will be paid by us. Arrangements will be made with brokerage houses and other custodians, nominees and fiduciaries to forward soliciting materials, at our expense, to the beneficial owners of shares held of record by such persons. Our directors and officers may solicit proxies by mail, telephone, telecopy or in person. They will not receive any additional compensation for such work.
ProposalsProposals for 2022 Annual Meeting 2024 Annual Meeting
Pursuant to Rule 14a-8 of the Exchange Act, any stockholder proposal to be considered for inclusion in our proxy statement and form of proxy for the annual meeting of stockholders to be held in 20222024 must be received at our office at 70 E. Long Lake Road, Bloomfield Hills, MI 48304, Attn: Secretary, no later than November 26, 202130, 2023 and must be in compliance with the requirements of our Bylaws and the SEC’s proxy rules.
Our Bylaws currently provide that in order for a proposal of a stockholder to be presented at our 2022 annual meeting2024 Annual Meeting of stockholders, other than a stockholder proposal or director nomination to be included in our proxy statement as described above, it must be received at our principal executive offices no earlier than the 150th day and no later than 5:00 p.m., Eastern Time, on the 120th day prior to the anniversary of the date of mailing of the notice for the 20212023 Annual Meeting. For our 20222024 annual meeting of stockholders, our Secretary must receive this notice between October 27, 2021November 2, 2023 and 5:00 p.m., Eastern Time, on November 26, 2021.December 2, 2023. If the 20222024 annual meeting of stockholders is scheduled to take place more than 30 days before April 6, 2022 or after June 5, 2022,May 11, 2024, then notice must be delivered no earlier than the close of business on the 150th day prior to the 20222024 annual meeting of stockholders and not later than the close of business5:00 p.m., Eastern Time, on the later of the 120th day prior to the 20222024 annual meeting of stockholders or the 10th day following the day on which public announcement of the date of the 20222024 annual meeting of stockholders is first made public by our Company. Any such proposal should be mailed to our Secretary, Simon J. LeopoldPeter Coughenour at our office at 70 E. Long Lake Road, Bloomfield Hills, MI 48304.
In addition, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19(b).
See “Board Matters — Committees of the Board-Nominating and Governance Committee” for additional information.
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on May 6, 202111, 2023
The Notice of the Annual Meeting, this proxy statement, our annual report to stockholders for the year ended December 31, 2020,2022, including the audited consolidated financial statements for the three years ended December 31, 2020,2022, and the accompanying proxy card are available at www.proxyvote.com.
By Order of the Board of Directors
Simon J. Leopold
Peter Coughenour
Chief Financial Officer and Secretary
March 25, 202131, 2023
APPENDIX A
ARTICLES OF AMENDMENT OF
AGREE REALTY CORPORATION
AGREE REALTY CORPORATION, a Maryland corporation (the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “Department”) that:
FIRST: The Corporation desires to, and does hereby, amend the charter of the Corporation as currently in effect (the “Charter”) pursuant to Sections 2-601 et seq. of the MARYLAND GENERAL CORPORATION LAW (the “MGCL”).
SECOND: The Charter of the Corporation is hereby amended by deleting therefrom in its entirety the existing paragraph (a) of Article SIXTH and inserting, in lieu thereof, the following new paragraph (a) of Article SIXTH:
“(a) The total number of shares of stock of all classes which the Corporation has authority to issue is 184,000,000 shares of capital stock (par value $.0001 per share), amounting in aggregate par value to $18,400, of which shares 180,000,000 are initially classified as “Common Stock” and 4,000,000 are initially classified as “Preferred Stock.” The Board of Directors may classify and reclassify any unissued shares of capital stock by setting or changing in any one or more respects the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such shares of stock.”
THIRD: The total number of shares of stock of all classes which the Corporation had authority to issue immediately prior to the foregoing amendment of the Charter was 94,000,000 shares of capital stock (par value $.0001 per share), amounting in aggregate par value to $9,400, of which shares (a) 90,000,000 were initially classified as shares of “Common Stock” (par value $.0001 per share) and (b) 4,000,000 were initially classified as shares of “Preferred Stock” (par value $.0001 per share).
FOURTH: The total number of shares of stock of all classes which the Corporation has authority to issue pursuant to the foregoing amendment of the Charter is 184,000,000 shares of capital stock (par value $.0001 per share), amounting in aggregate par value to $18,400, of which shares (a) 180,000,000 are initially classified as shares of “Common Stock” (par value $.0001 per share) and (b) 4,000,000 are initially classified as shares of “Preferred Stock” (par value $.0001 per share).
FIFTH: The information required by Section 2-607(b)(2)(i) of the MGCL was not changed by the foregoing amendment of the Charter.
SIXTH: The foregoing amendment of the Charter as set forth in these Articles of Amendment was duly advised by the Board of Directors of the Corporation and approved by the stockholders of the Corporation as required by law.
SEVENTH: These Articles of Amendment shall be effective upon filing with the Department.
EIGHTH: The undersigned President acknowledges these Articles of Amendment to be the corporate act of the Corporation and as to all matters and facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
AGREE REALTY CORPORATION 70 E. LONG LAKE ROAD BLOOMFIELD HILLS, MI 48304 ATTN: PETER COUGHENOURInvestor Address Line 1Investor Address Line 2Investor Address Line 3Investor Address Line 4Investor Address Line 5John Sample1234 ANYWHERE STREETANY CITY, ON A1A 1A1 234567 8234567 8234567 8234567 8234567 8234567 8 111OF2 SCAN TOVIEW MATERIALS & VOTEVOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 05/10/2023. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/ADC2023You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 05/10/2023. Have your proxy card in hand when you call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. NAMETHE COMPANY NAME INC. - COMMONTHE COMPANY NAME INC. - CLASS ATHE COMPANY NAME INC. - CLASS BTHE COMPANY NAME INC. - CLASS CTHE COMPANY NAME INC. - CLASS DTHE COMPANY NAME INC. - CLASS ETHE COMPANY NAME INC. - CLASS FTHE COMPANY NAME INC. - 401 KTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:x CONTROL # →SHARES123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345 123,456,789,012.12345PAGE1OF2KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.DETACH AND RETURN THIS PORTION ONLY The Board of Directors recommends you vote FOR the following:1. Election of DirectorsNominees01) Merrie Frankel02) John Rakolta, Jr. ForWithholdFor AllAllAllExcept00003) Jerome Rossi To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 020000000000 TheBoard ofDirectors recommends you vote FOR proposals2. and3.ForAgainstAbstain2.To
ratify the appointment of Grant Thornton LLP as our independent registered public accounting firm for 2023.0003.Toapprove, by non-binding vote, executive compensation.000TheBoard ofDirectors recommends you vote 1 YEAR on thefollowing proposal:1 year2 years3 yearsAbstain4.Toapprove, by non-binding vote, the frequency of executivecompensation votes.0000NOTE: Such other business as may properly come before the meeting or any adjournment thereof. R1.0.0.61 _ 0000597832 Investor Address Line 1Investor Address Line 2Investor Address Line 3Investor Address Line 4Please sign exactly as your name(s) appear(s) hereon. When signing asInvestor Address Line 5John Sampleattorney, executor, administrator, or other fiduciary, please give full1234 ANYWHERE STREETtitle as such. Joint owners should each sign personally. All holders mustANY CITY, ON A1A 1A1sign. If a corporation or partnership, please sign in full corporate orpartnership name by authorized officer.SHARESCUSIP #JOB #SEQUENCE #Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date
IN WITNESS WHEREOF, Agree Realty Corporation has caused these Articles of Amendment to be signed in its name and on its behalf by its President and attested to by its Secretary on this day of , 2021.
| Attest: | | | Agree Realty Corporation | |
| By:
Simon J. Leopold
Chief Financial Officer and Secretary
| | | By:
Joel N. Agree
President
| |
0000917251 3 2022-01-01 2022-12-31