NOTICE IS HEREBY GIVEN thatCONTENTS
The Company knows of no other matters to come before the Annual Meeting. Only stockholders of record as of the close of business on March 21, 2016 are entitled to notice of annual meeting, describes the matters expected to be acted upon at the meeting. We urge you to review these materials carefully and to vote at,use this opportunity to take part in the Annual Meeting and any adjournment or postponementaffairs of Summit Hotel Properties, Inc. by voting on the matters described in this proxy statement. We hope that you will be able to attend the meeting.
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On what am I voting? You are being asked to consider and vote on |
How do I vote or authorize a proxy to vote my shares? By Proxy. Before the annual meeting, you may authorize a proxy to vote your shares in one of the following ways: • By |
of your broker, bank or other nominee and you wish to vote at the Annual Meeting,annual meeting, you must obtain a legal proxy from your broker, bank or other nominee that holds your shares giving you the right to those shares.
Approval on an Advisory (Non-Binding) Basis of Our NamedResolution on Executive Officers’ Compensation (Proposal 3). The affirmative vote of a majority of the votes cast at the Annual Meetingannual meeting is required to approve this proposal. For purposes of this advisory vote, abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote for this proposal.
vote. In the event that no option receives a majority of the votes cast, we will consider the period that receives the most votes to be the option that has been recommended by our stockholders.
Name | | | Position | | | Age | | |||
Daniel P. Hansen | | | Chairman, President and Chief Executive Officer | | | | 49 | | | |
Bjorn | | | Independent Governance Committee | | | | 66 | | | |
Jeffrey W. Jones | | | Lead Independent Director and Chair of Audit Committee | | | | 56 | | | |
Kenneth J. Kay | | | Independent Director and Chair of Compensation Committee | | | | 63 | | | |
Thomas W. Storey | | | Independent Director | | | | 61 | | | |
Hope S. Taitz | | | Independent Director | | | | | 54 | | |
president of lodging, retail and real estate, of a publicly held resort management company. In addition, Mr. Jones’s other experience as a public companycorporate board director and audit committee member and chair provides the Board with perspective into corporate governance best practices.
mergers and acquisitions experience and expertise.
Paul Ruiz. Mr. Ruiz has served as Summit’s Vice President and Chief Accounting Officer since April 29, 2014. Prior to joining the Company, Mr. Ruiz served in senior executive roles for companies in a variety of industries, including real estate and technology. From April 2013 to April 2014, he served as a consulting chief financial officer for Bridgepoint Consulting, a financial consulting firm in Austin, Texas. From February 2011 to April 2013, Mr. Ruiz was the Senior Director of Global Corporate Accounting for Freescale Semiconductor, Inc. n/k/a NXP Semiconductors N.V (NASDAQ: NXPI), a global semiconductor manufacturer. From April 2008 to January 2011, Mr. Ruiz was the Chief Financial Officer at Sensortran, Inc. (now part of Halliburton, Inc. — NYSE: HAL), a fiber-optics based technology company in Austin, Texas. He began his career with Pricewaterhouse Coopers where he was an audit manager, providing audit and business advisory services to entrepreneurial, rapidly growing and Fortune 500 companies. Mr. Ruiz graduated with highest honors from the University of Texas at Austin with a Bachelor of Business Administration in Accounting and earned his MBA from Baylor University. He is a Certified Public Accountant.
The OF
THE COMPANY FOR 2018
A An EY representative of EY is expected towill be present at the Annual Meetingannual meeting and will be given the opportunity to make a statement if he or she so desires and will be available to respond to appropriate questions.
Accordingly, we are asking our stockholdersone year, two years, three years or abstain from voting when you vote in response to approve, in a non-binding vote, the following resolution in respect of this Proposal 3:
resolution:
This vote is advisory and therefore not binding on the Company, the Board or the Compensation Committee. The Board and the Compensation Committee value the opinionshighest number of the Company’s stockholders and expect to take into account the outcome of the vote when considering future executive compensation decisions.
The Company’s primary objective is to enhance stockholder value over time by generating strong risk-adjusted returns for our stockholders. As described in more detail under “Compensation Discussion and Analysis,” our compensation program for our senior executives is designed to achieve this objective by rewarding performance and encouraging actions that drive success in our business objectives.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEFOR ADOPTION OF THIS RESOLUTION ON THE ADVISORY VOTE ON EXECUTIVE COMPENSATION.
Set forth in the italicized text below is a stockholder proposal (the “Teamsters’ Proposal”) that we received from The Teamster Affiliates Pension Plan (the “Teamsters”), 25 Louisiana Ave. N.W., Washington, D.C. 20001. The Teamsters advised us that it is the beneficial owner of 20,500 shares of our common stock, which constitutes approximately 0.02% of our outstanding common stock. The italicized text below contains the Teamsters’ Proposal and supporting statement as submitted to us by the Teamsters. The Teamsters bear sole responsibility for the contents of the Teamsters’ Proposal and the supporting statement. If the Teamsters’ Proposal is properly presented at the Annual Meeting or at any adjournment or postponement thereof, the Teamsters’ Proposal will be voted upon by our stockholders.
The affirmative vote of a majorityvotes of all the votes cast onwill be the Teamsters’ Proposal at the Annual Meeting or any adjournment or postponement thereof is necessary for approval of the proposal. If approved, the Teamsters’ Proposal would be a non-binding recommendation to the Board. This means the Board will have discretion to determine whether and when to implement the Teamsters’ Proposal if such proposal is approved by our stockholders.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTEAGAINST THE TEAMSTERS’ PROPOSAL.
RESOLVED,that the shareholders ofSummit Hotel Properties, Inc.(the “Company”), urge the Board to take all steps necessary under applicable law to cause the Company to opt out of Maryland’s Unsolicited Takeover Act (Title 3, Subtitle 8 of the Maryland General Corporation Law, the “Act”), and to require a majority vote of shareholders before opting back into the Act.
This proposal urges the Board to initiate the actions requiredfrequency for the Company to opt out of provisions of Maryland’s Unsolicited Takeover Act (Title 3, Subtitle 8 of the Maryland General Corporation Law). The Act permits the Board, without shareholder approval, to implement various takeover defenses, such as, classifying the Board, expanding the size of the Board while filling new vacancies through the votes of directors only, and requiring a two-thirdsadvisory (non-binding) vote for removal of a director.
The statute essentially acts as a poison pill; these defenses, if implementedregarding executive compensation that has been selected by stockholders. However, because this vote is advisory (non-binding), the Board may adversely affect shareholder value by discouraging offers to acquire the Company that could be beneficial to shareholders.
Much of the research on such anti-takeover statutes indicates that they fail to protect shareholder interests. Critics argue that insofar as they protect managers from removal, they reduce incentives for managers to operate as profitably as possible.1 Research on such anti-takeover statutes suggests that they fail to protect shareholder interests; for example, Boulton (2010) reports evidence that firms incorporated in takeover-friendly states have higher Tobin’s Q values — the ratio between the Market value of a company divided by the replacement value of the firm’s assets — than firms incorporated in takeover-unfriendly states. Lower Q values imply that the stock is undervalued,2 suggesting that state-level anti-takeover statutes negatively impact firm value.3 Bertrand and Mullainathan (2003) found that the following passage of state anti-takeover statutes, protected firms saw return on capital fall by 1% while managerial wages rose 4%.4
Not opting out of the Act may adversely affect shareholder value by discouraging premium-rich offers to acquire the Company that could be beneficial to shareholders.
We urge shareholders to ask the Board to protect shareholder value by similarly opting out of the Unsolicited Takeover Act, and vote FOR this proposal.
The Board has carefully considered the Teamsters’ Proposal that the Board take all steps necessary to cause the Company to opt out of the Maryland Unsolicited Takeover Act (“MUTA”) and believesdecide that it is not in the best interests of the Company to hold an advisory (non-binding) vote regarding executive compensation more or its stockholdersless frequently than the frequency selected by stockholders.
The Company is a Maryland corporation. MUTA permits a Maryland corporation with a class of equity securities registered under the Securities Exchange Act of 1934, as amended, and at least three independent directors, to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors, notwithstanding any contrary charter or bylaw provisions, to any or all of five provisions, which provide that:
The Board is not currently classified. The Company has elected by a specific provision in its charter to be subject to the provisions of MUTA relating to the filling of vacancies on the Board and the Company is subject to each of the other provisions of MUTA through charter and bylaw provisions. The Company is afforded the opportunity of operating under the safeguards of Maryland law and has determined it is in the best interests of stockholders and the Company to do so. The Board is committed to enhancing stockholder value and promoting sound governance principles through Company policies. We maintain several investor-friendly policies, including stock ownership guidelines, compensation clawback, anti-hedging and anti- pledging policies and employment agreements with non-compete provisions, a double trigger requirement for any severance payouts in connection with a change-in-control and no excise tax gross-up payments.
MUTA, which has been Maryland law since 1999, was adopted by the Maryland legislature to provide an important set of tools for a board of directors to use to protect and enhance stockholder value by encouraging activist stockholders or others who may be seeking a coercive transaction to negotiate with the board, as the stockholders’ elected representatives. In this regard, the provisions of MUTA can be used to strengthen the Board’s ability to negotiate on behalf of all stockholders if an unsolicited takeover attempt should ever be made with respect to the Company.
The provisions of MUTA relate primarily to attempts to take control of a company by gaining control of the board, through a proxy contest or otherwise. In the face of unsolicited takeover attempts by certain third parties who can be focused on short-term financial gains, MUTA, specifically, the provisions permitting the Board to classify itself without stockholder approval and thus slow the pace of a potential acquirer by preventing it from replacing the entire Board in one election, can provide the Board with the time and flexibility necessary to evaluate the adequacy and fairness of a takeover proposal and consider alternatives for protecting and enhancing long-term stockholder value. Indeed, the stated purpose of MUTA is “to protect legitimate local interests against the abuses of hostile takeovers” by giving “a Maryland-based company the opportunity to have the time and flexibility it might need in responding to a hostile takeover attempt.” Time and flexibility may be particularly important in certain situations, such as following a steep decline in share price occasioned by circumstances outside the Company’s or the Board’s control (for example, a general market downturn, current market conditions affecting the entire U.S. lodging industry and lodging REITs in general, or an event that results in a share price that does not accurately reflect the intrinsic value of the Company).
The Teamsters’ Proposal would have stockholders vote to urge the Board to take all steps necessary to cause the Company to opt out of the important protections offered by MUTA and would require an affirmative majority vote of the Company’s stockholders before the Company could opt back in to MUTA. Hostile takeover attempts occur suddenly. Opportunistic acquirers move quickly and frequently use coercive tactics, which require the board of a target company to act quickly to defend the interests of the target company’s stockholders and maximize value for all of the company’s stockholders. Requiring the Board to obtain stockholder approval prior to utilizing the provisions of MUTA is not practical. Arranging a stockholder meeting is unlikely to be accomplished in the short period typically available for responding to an unsolicited takeover attempt. As a result, the Board’s ability to adopt certain takeover defenses and force a potential acquirer to negotiate with the Board to protect and enhance stockholder value would be severely limited.
The tools provided by MUTA, and in particular, the ability of a board to unilaterally classify itself, will not stop (nor should they stop) a fully financed premium bid for the Company, but it will prevent a sudden shift of parties who may have short-term goals such as a sale of the Company at a low price or on terms otherwise inconsistent with the best interests of the Company and all of its stockholders.
In conclusion, the Board has carefully considered the Teamsters’ Proposal that the Board take all steps necessary to cause the Company to opt out of MUTA and believes that it is not in the best interests of the Company or its stockholders to do so. The Board recommends that you voteAGAINST the Teamsters’ Proposal.
enhance long-term stockholder value. The Board has adopted Corporate Governance Guidelines, which provideare reviewed annually and periodically amended by the framework for the governance ofBoard to enhance our company and represent the Board’s current views with respect to selected corporate governance issues considered to be of significance to our stockholders.principles. A current copy of the Corporate Governance Guidelines can be found under “Investor Relations — Corporate Overview — Governance Documents” on our website atwww.shpreit.com.
www.shpreit.com.
Name | | | Multiple of Base Salary | | |||
Daniel P. Hansen, President and Chief Executive Officer | | | | | 6x | | |
Jonathan P. Stanner, EVP & Chief Financial Officer | | | | | 2x | | |
Craig J. Aniszewski, EVP & Chief Operating Officer | | | | | 2x | | |
Christopher Eng, EVP & Chief Risk Officer | | | | | 1x | | |
The Board has established three standing committees:
The members of these standing committees are appointed byCommittee, and serve at the discretion of the Board. Current copies of the chartershas adopted a written charter for each committee. A copy of these committees can be foundeach committee charter is available on our website at www.shpreit.com under the heading “Investor Relations — Corporate Overview —– Governance Documents” on our website atwww.shpreit.com.
The Nominating and Corporate Governance Committee is responsible for monitoring our compliance with corporate governance requirements of state and federal law, and the rules and regulations of the NYSE; developing and recommending to the Board criteria for prospective members of the Board; conducting Board candidate searches and interviews; overseeing and evaluating the Board and management; monitoring compliance with our codeCode of business conduct and ethicsEthics and policies with respect to conflicts of interest; reviewing and approving interested transactions pursuant to our related party transaction policy; periodically evaluating the appropriate size and composition of the Board, and recommending, as appropriate, increases, decreases and changes in the composition of the Board; and formally proposing the slate of nominees for election as directors at each annual meeting of our stockholders. In addition, this committee annually facilitates the assessmentevaluation of each Committee and the Board’s performance as a whole and of the individual directors and reports thereon to the Board.
until Mr. Hansen’s appointment.
anticipated due to a change in the size or composition of the Board, a retirement of a director or for any other reason. In addition to considering incumbent directors, the Nominating and Corporate Governance Committee may identify director candidates based on recommendations from the directors, stockholders, management and others.
The Board will act on the Nominating and Corporate Governance Committee’s recommendation no later than 90 days after the certification of the voting results. The Board will consider the information, factors and alternatives considered by the Nominating and Corporate Governance Committee and additional information, factors and alternatives the Board deems relevant. The recommendation of the Nominating and Corporate Governance Committee will not be binding on the Board.
Based on current corporate governance standards, the Board believes all non-employee directors and certain key executive officers should own a meaningful equity interest in our company to more closely align the interests of directors and executive officers with those of stockholders. Accordingly, the Board has adopted stock ownership guidelines for key executive officers and all non-employee directors.
For purposes of these guidelines, the term “Company common stock” includes, in addition to shares of our common stock, (a) any class of equity securities issued by our operating partnership, Summit Hotel OP, LP, that are redeemable for shares of our common stock (the “Operating Partnership”), whether held directly or indirectly or by or for the benefit of immediate family members, and (b) vested and unvested restricted shares of common stock, but excludes (x) stock options, whether exercisable or unexercisable, (y) unearned performance-based restricted stock and (z) warrants and all other forms of derivative securities.
The Board reviews the minimum equity holdings guidelines for executive officers on a periodic basis to ensure the guidelines remain consistent with corporate governance best practices and continue to promote the alignment of executive and stockholder interests.
Over time, certain key executive officers are required to hold Company common stock with a value equal to a multiple of their then current base salary. The equity ownership value for each of these executive officers will be calculated by multiplying the number of shares of Company common stock owned by the ten trading day trailing volume weighted average price (“VWAP”) of our common stock prior to the date of computation, typically at the end of the fiscal year. The executive officers named in the table below will have until January 1, 2018 to comply with the stock ownership guidelines. The equity ownership requirement for our key executive officers is as follows:
Each non-employee director will be required to hold a number of shares of Company common stock equal to $250,000. The equity ownership value for each non-employee director will be calculated by multiplying the number of shares of Company common stock owned by the ten trading day trailing VWAP of our common stock prior to the date of computation, typically at the end of the fiscal year. Until such time as
the required ownership level is achieved, each non-employee director is required to retain at least fifty percent (50%) of the net after-tax profit shares from vesting of equity awards. The Board reviews the minimum equity holdings guidelines for non-employee directors on a periodic basis to ensure the guidelines remain consistent with corporate governance best practices.
The Board has adopted an insider trading policy that contains restrictions on hedging and pledging securities issued by us and the Operating Partnership. With respect to hedging, directors and executive officers are prohibited from engaging in any hedging or monetization transactions involving securities issued by us or the Operating Partnership. With respect to pledging, directors and executive officers are prohibited from holding securities issued by us or the Operating Partnership in a margin account or pledging these securities as collateral for a loan. An exception to this anti-pledging policy may be granted if a director or executive officer desires to pledge securities issued by us or the Operating Partnership as collateral for a loan other than margin debt and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities. Any permitted pledge of securities must be pre-approved by the Company’s General Counsel.
The Board has adopted a compensation clawback policy that contains terms to ensure that executives are not unduly enriched in the event of a financial restatement. If the Company is required to restate its audited, consolidated financial results due to material non-compliance with financial requirements under securities laws as a result of intentional misconduct, fraud or gross negligence, each executive that is directly responsible for the intentional misconduct, fraud or gross negligence shall reimburse the Company for the after tax value of the incentive compensation that would not have been earned if the restated financial information had been reported initially. In addition, the Board may withhold from executives not directly responsible for the intentional misconduct, fraud or gross negligence, future awards with equivalent value to that of the after tax value of the awards initially made to such executive on the basis of the restated financial results, but only to the extent such awards were made within the preceding twenty-four months.
Currently,annually reviews our director compensation with the Compensation Committee consistsassistance of Dr. Hanson, Mr. Jones, Mr. Kay and Mr. Storey. None of the members are or have been oneits independent consultant, Frederic W. Cook & Co, Inc. (“FW Cook”), who conducts a competitive analysis of our employees or officers. Nonenon-employee director pay levels and program design versus the same peer group used in comparisons of executive compensation (see Compensation Discussion & Analysis — Peer Group Information). Findings from this review indicated our director compensation levels are competitive with peer company practices and that the design of our executive officers currently serves, or duringnon-executive director compensation program reflects recognized best practices, incorporating the past fiscal year has served,following provisions: retainer-only cash compensation with no fees for attending meetings, which is an expected part of board service; significant portion of total compensation in full-value equity awards, for alignment with shareholders, with annual grants made based on a fixed-value formula with immediate vesting, to avoid entrenchment; additional retainers for special roles such as a memberLead Independent Director and committee chairs to recognize their additional responsibilities and time commitment; and meaningful share ownership requirements of five times the board of directors or compensation committee of another entity that has one or more executive officers serving on our Board or Compensation Committee.
Directors who are our employees (Mr. Hansen) do not receive compensation for their services as directors. For 2015,2017, our non-employee director compensation program consisted of the following:
Based on the recommendation of Frederic W. Cook & Co, Inc., the Compensation Committee’s independent compensation consultant, the Compensation Committee recommended and the Board approved the changes to our non-employee director compensation program for 2016.
Name | | | Fees Earned or Paid in Cash ($) | | | Stock Awards ($)(2) | | | Total ($) | | |||||||||
Bjorn R. L. Hanson | | | | | 82,500 | | | | | | 100,961 | | | | | | 183,461 | | |
Jeffrey W. Jones | | | | | 108,750 | | | | | | 100,961 | | | | | | 209,711 | | |
Kenneth J. Kay | | | | | 86,250 | | | | | | 100,961 | | | | | | 187,211 | | |
Thomas W. Storey | | | | | 73,750(1) | | | | | | 100,961 | | | | | | 174,711 | | |
Hope S. Taitz | | | | | 46,454 | | | | | | 81,767 | | | | | | 128,221 | | |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | |||||||||
Bjorn R. L. Hanson | 109,375 | 98,169 | 207,544 | |||||||||
Thomas W. Storey | (2) | 178,335 | 178,335 | |||||||||
Jeffrey W. Jones | 90,539 | 98,169 | 188,708 | |||||||||
Kenneth J. Kay | 89,420 | 98,169 | 187,589 |
Grant Date | | | Grantee | | | Number of Shares (#) | | | Aggregate Grant Date Fair Value ($) | | | Reason for Grant | | ||||||
May 18, 2017 | | | Bjorn R. L. Hanson | | | | | 5,974 | | | | | | 100,961 | | | | Annual equity award | |
May 18, 2017 | | | Jeffrey W. Jones | | | | | 5,974 | | | | | | 100,961 | | | | Annual equity award | |
May 18, 2017 | | | Kenneth J. Kay | | | | | 5,974 | | | | | | 100,961 | | | | Annual equity award | |
February 16, 2017 | | | Thomas W. Storey | | | | | 1,259 | | | | | | 20,371 | | | | Election to receive stock in lieu of cash director fees | |
May 18, 2017 | | | Thomas W. Storey | | | | | 5,974 | | | | | | 100,961 | | | | Annual equity award | |
May 18, 2017 | | | Thomas W. Storey | | | | | 1,195 | | | | | | 20,196 | | | | Election to receive stock in lieu of cash director fees | |
August 17, 2017 | | | Thomas W. Storey | | | | | 1,099 | | | | | | 16,353 | | | | Election to receive stock in lieu of cash director fees | |
November 30, 2017 | | | Thomas W. Storey | | | | | 1,110 | | | | | | 16,772 | | | | Election to receive stock in lieu of cash director fees | |
July 10, 2017 | | | Hope S. Taitz | | | | | 4,530 | | | | | | 81,767 | | | | Annual equity award | |
The
Name | | | Title | |
Daniel P. Hansen | | | President and Chief Executive Officer | |
Craig J. Aniszewski | | | Executive Vice President and Chief Operating Officer | |
Jonathan P. Stanner(1) | | | Executive Vice President and Chief Investment Officer | |
Greg A. Dowell | | | Executive Vice President and Chief Financial Officer | |
Christopher R. Eng | | |||
|
The overall performance
Our executive compensation program has been designed to meet the following objectives:
Our executive compensation program consists of base salary, annual cash incentive compensation opportunities and annual long-term equity incentive grants. Our program is designed to be straightforward, transparent and market-based and to comply with sound corporate governance practices.
Compensation Component | | | Description and Objectives | | 2017 Highlights | | |
Base Salary | | | Fixed cash compensation set at a level reflective of each executive’s performance, market conditions, and competitive | | | The Compensation Committee | |
Annual Cash Incentive Compensation | | | Performance-based cash incentive that rewards achievement of annual company-specific and individual performance objectives. | | 2017 annual cash incentives were tied to AFFO per share and RevPAR growth, | ||
| |||||||
Long-Term Equity Incentives | | | Equity incentives that align executive compensation with total stockholder return over multi-year performance and vesting periods | | | In | |
|
At our 2015 annual meeting
Theofficer. Additionally, the Compensation Committee reviews and considers the recommendations of Mr. Hansen our President and Chief Executive Officer, with respect to compensation decisions of our named executive officers other than himself. The Compensation Committee makes all compensation decisions with regard to our named executive officers. The Compensation Committee believes it is valuable to consider the recommendations of Mr. Hansen with respect to these matters because, given his knowledge of our operations and the day-to-day responsibilities of our executive officers, he is in a unique position to provide the Compensation Committee perspective into the performance of our executive officers in light of our business at a given point in time.
For the development of our 2015 compensation program, the
In 2015,plan, the Compensation Committee, with the help of FTI Consulting,FW Cook, determined the composition and the criteria and data used in compiling ourthe peer group list. The 2015used to evaluate the competitiveness of our existing executive compensation program. The peer group consisted of 12 public REITs that primarily invest in hotels, and fivethree other public REITs outside of the hotel sector, that arewhich were comparable in terms of market capitalization size and executive team members that the Compensation Committee and FTI ConsultingFW Cook considered to be the most relevant peers. For purposes of making executive compensation decisions for 2015,target pay opportunities for 2017, our peer group consisted of the following companies:
Ashford Hospitality Trust, Inc. and Ashford Hospitality Prime(1) | | Pebblebrook Hotel Trust | | ||
Chatham Lodging Trust | | RLJ Lodging Trust | | ||
| Chesapeake Lodging Trust | | |||
| Ryman Hospitality Properties, Inc. | | |||
DiamondRock Hospitality Company | | | STAG Industrial | | |
| FelCor Lodging Trust | | |||
| Sunstone Hotel Investors, Inc. | | |||
| First Potomac Realty Trust | | | Terreno Realty Corporation | |
| Hersha Hospitality Trust | | | Xenia Hotels & Resorts, Inc. | |
| LaSalle Hotel Properties | | | | |
In addition
Name | | | Salary ($) | | | Annual Cash Incentive ($)(1) | | | Long-Term Incentives ($)(2) | | | Total Target Compensation ($) | | ||||||||||||
Daniel P. Hansen | | | | | 700,000 | | | | | | 1,050,000 | | | | | | 2,400,000 | | | | | | 4,150,000 | | |
Craig J. Aniszewski | | | | | 430,000 | | | | | | 430,000 | | | | | | 1,000,000 | | | | | | 1,860,000 | | |
Jonathan P. Stanner(3) | | | | | 400,000 | | | | | | 400,000 | | | | | | 800,000 | | | | | | 1,600,000 | | |
Greg A. Dowell | | | | | 375,000 | | | | | | 375,000 | | | | | | 750,000 | | | | | | 1,500,000 | | |
Christopher R. Eng | | | | | 325,000 | | | | | | 325,000 | | | | | | 400,000 | | | | | | 1,050,000 | | |
Name | | | 2017 TAC | | | Comparison to Peer Group | | |||
Daniel P. Hansen | | | | $ | 1,750,000 | | | | Approximates median | |
Craig J. Aniszewski | | | | $ | 860,000 | | | | Approximates median | |
Jonathan P. Stanner(1) | | | | $ | 800,000 | | | | Approximates median | |
Greg A. Dowell | | | | $ | 750,000 | | | | Approximates median | |
Christopher R. Eng | | | | $ | 650,000 | | | | Approximates median | |
2015 Annual Base Salary.
Name | | | 2017 | | | 2016 | | | Percentage Increase | | ||||||
Daniel P. Hansen | | | | $ | 700,000 | | | | | $ | 700,000 | | | | 0% | |
Craig J. Aniszewski | | | | $ | 430,000 | | | | | $ | 430,000 | | | | 0% | |
Jonathan P. Stanner(1) | | | | $ | 400,000 | | | | | | N/A | | | | N/A | |
Greg A. Dowell | | | | $ | 375,000 | | | | | $ | 375,000 | | | | 0% | |
Christopher R. Eng | | | | $ | 325,000 | | | | | $ | 300,000 | | | | 8% | |
Named Executive Officer | 2015 Base Salary | 2014 Base Salary | Percentage Increase | |||||||||
Kerry W. Boekelheide* | $ | 443,000 | $ | 436,000 | 1.6 | % | ||||||
Daniel P. Hansen | $ | 575,000 | $ | 450,000 | 27.8 | % | ||||||
Craig J. Aniszewski | $ | 375,000 | $ | 350,000 | 7.1 | % | ||||||
Greg A. Dowell | $ | 360,000 | $ | 350,000 | 2.9 | % | ||||||
Christopher R. Eng | $ | 260,000 | $ | 250,000 | 4.0 | % | ||||||
Paul Ruiz | $ | 260,000 | $ | 225,000 | 15.6 | % |
2015
Corporate Performance Measure | | | Weight | | | Threshold | | | Target | | | Maximum | | | Actual Company/Individual Results | | |||||||||||||||
2017 AFFO per share | | | | | 60% | | | | | $ | 1.36 | | | | | $ | 1.43 | | | | | $ | 1.50 | | | | | $ | 1.34 | | |
2017 RevPAR Growth (same store) | | | | | 20% | | | | | | 0.50% | | | | | | 2.00% | | | | | | 3.00% | | | | | | 0.20% | | |
Individual Performance | | | | | 20% | | | | Specific for each individual | | | Specific for each individual | | | Specific for each individual | | | | | * | | |
The majority of each executive’s 2015 annual incentive was tied to corporate performance objectives (“Corporate Performance Component”). Each executive also had the opportunity to earn an additional 25% of his maximum annual incentive opportunity for the achievement of individual performance objectives (the “Individual Performance Component”). The following table summarizes each named executive officer’s annual incentive opportunity for 2015.
Annual Incentive Opportunity (% of Base Salary) | Annual Incentive Opportunity (% of Base Salary) | |||||||||||||||
Corporate Performance Component | Individual Performance Component | |||||||||||||||
Executive | Threshold | Target | Maximum | Maximum | ||||||||||||
Kerry W. Boekelheide* | 75 | % | 125 | % | 175 | % | 43.75 | % | ||||||||
Daniel P. Hansen | 100 | % | 150 | % | 200 | % | 50 | % | ||||||||
Craig J. Aniszewski | 50 | % | 75 | % | 100 | % | 25 | % | ||||||||
Greg A. Dowell | 50 | % | 75 | % | 100 | % | 25 | % | ||||||||
Christopher R. Eng | 35 | % | 55 | % | 75 | % | 18.75 | % |
The Corporate Performance Component of the overall annual incentive award for each executive officer in 2015 was based on three measures designed to best support the Company’s short term objectives. The three performance measures, their weightings and range of goals,year, as well as our actual performance in 2015, are summarized inassessment of the following table:
Corporate Performance Measure | Weight | Threshold | Target | Maximum | Actual | |||||||||||||||
2015 AFFO per share | 60 | % | $ | 1.03 | $ | 1.09 | $ | 1.15 | $ | 1.25 | ||||||||||
2015 RevPAR Growth | 30 | % | 5 | % | 6.5 | % | 8 | % | 8.20 | % | ||||||||||
2015 Acquisitions Volume | 10 | % | $ | 75 million | $ | 125 million | $ | 175 million | $ | 237.8 million |
In determining whether
| | | 2017 Cash Incentive Opportunity (% of Base Salary) | | | 2017 Cash Incentive Earned | | | 2017 Cash Incentive Earned | | |||||||||||||||||||||
Name | | | Threshold | | | Target | | | Maximum | | | % of Base Salary | | | $ | | |||||||||||||||
Daniel P. Hansen | | | | | 75% | | | | | | 150% | | | | | | 300% | | | | | | 60% | | | | | | 420,000 | | |
Craig J. Aniszewski | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 40% | | | | | | 172,000 | | |
Jonathan P. Stanner | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 28%(1) | | | | | | 113,333(1) | | |
Greg A. Dowell | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 40% | | | | | | 150,000 | | |
Christopher R. Eng | | | | | 50% | | | | | | 100% | | | | | | 200% | | | | | | 40% | | | | | | 130,000 | | |
Name | | | AFFO per share Payout ($) | | | RevPAR Growth Payout ($) | | | Individual Performance Payout ($) | | | Total 2017 Cash Incentive Payout ($) | | ||||||||||||
Daniel P. Hansen | | | | | 0 | | | | | | 0 | | | | | | 420,000(1) | | | | | | 420,000 | | |
Craig J. Aniszewski | | | | | 0 | | | | | | 0 | | | | | | 172,000(1) | | | | | | 172,000 | | |
Jonathan P. Stanner | | | | | 0 | | | | | | 0 | | | | | | 113,333(2) | | | | | | 113,333 | | |
Greg A. Dowell | | | | | 0 | | | | | | 0 | | | | | | 150,000(1) | | | | | | 150,000 | | |
Christopher R. Eng | | | | | 0 | | | | | | 0 | | | | | | 130,000(1) | | | | | | 130,000 | | |
Based on our maximum performance on the measures for the Corporate Performance Component and the Committee’s determination that each executive achieved his respective individual performance goals for the Individual Performance Component, each executive, except Mr. Boekelheide, earnedmetric based on the maximum bonus for 2015, which is reflected in the Non-Equity Incentive Compensation Awards column of the Summary Compensation Table. As a result of Mr. Boekelheide’s resignation, he did not receive compensation under the 2015 annual incentive program.
In February 2016,Mr. Stanner was appointed Executive Vice President and Chief Investment Officer effective April 17, 2017. Pursuant to his employment agreement, the Compensation Committee approved and we paidawarded a discretionary cash bonus for 2017 performance of $113,333 to Mr. Ruiz in the amount of $195,000 for services provided in 2015. The amount paid wasStanner based on corporate performance in 2015 and also on Mr. Ruiz’shis significant individual contributions made to the Company made in 2015.
Incentive Compensation
Name | | | Performance-Based Stock Target Value | | | Time-Based Stock Value | | | Total LTI Grant Value at Target | | |||||||||
Daniel P. Hansen | | | | $ | 1,440,000 | | | | | $ | 960,000 | | | | | $ | 2,400,000 | | |
Craig J. Aniszewski | | | | $ | 600,000 | | | | | $ | 400,000 | | | | | $ | 1,000,000 | | |
Jonathan P. Stanner | | | | $ | 480,000 | | | | | $ | 320,000 | | | | | $ | 800,000(1) | | |
Greg A. Dowell | | | | $ | 450,000 | | | | | $ | 300,000 | | | | | $ | 750,000 | | |
Christopher R. Eng | | | | $ | 240,000 | | | | | $ | 160,000 | | | | | $ | 400,000 | | |
Executive | Performance- Based Stock Target Value | Time-Based Stock Value | Total LTI Grant Value at Target | |||||||||
Kerry W. Boekelheide | $ | 0 | $ | 225,000 | $ | 225,000 | ||||||
Daniel P. Hansen | $ | 1,200,000 | $ | 800,000 | $ | 2,000,000 | ||||||
Craig J. Aniszewski | $ | 400,000 | $ | 275,000 | $ | 675,000 | ||||||
Greg A. Dowell | $ | 375,000 | $ | 250,000 | $ | 625,000 | ||||||
Christopher R. Eng | $ | 100,000 | $ | 65,000 | $ | 165,000 | ||||||
Paul Ruiz | $ | 0 | $ | 500,000 | (1) | $ | 500,000 |
Company 3-Year TSR Percentile Rank vs. REIT Index Companies | | | Percent of Target Shares Earned | | |||
<30th Percentile | | | | | 0% | | |
30th Percentile | | | | | 25% | | |
55th Percentile | | | | | 100% | | |
≥ 80th Percentile | | | | | 200% | |
have been issued (i.e., the target number). Cash dividends on the performance-based shares will be accumulated and will only be paid to the executives to the extent the underlying performance-based share is earned.
Awards
2020.
In the fourth quarter of 2015, the Compensation Committee retained Frederic W. Cook & Co, Inc. (“FW Cook”) to provide the Compensation Committee with advisory services with respect to executive and Board compensation. FW Cook worked with management only at the request and under the direction of the Compensation Committee. FW Cook conducted a comprehensive review of the compensation components of the 2015 executive compensation programs and made recommendations for changes to better support our
business objectives. Based on FW Cook’s advice, as well as other factors, the Compensation Committee approved the elements of the 2016 program for Messrs. Hansen, Aniszewski, Dowell, Eng and Ruiz as outlined below:
2016 Annual Base Salary. For 2016, the Compensation Committee approved increases to base salaries to bring them closer to competitive median levels. 2016 annual base salaries for the Company’s executive officers are as follows:
Named Executive Officer | 2016 Base Salary | |||
Daniel P. Hansen | $ | 700,000 | ||
Craig J. Aniszewski | $ | 430,000 | ||
Greg A. Dowell | $ | 375,000 | ||
Christopher R. Eng | $ | 300,000 | ||
Paul Ruiz | $ | 275,000 |
2016 Incentive Awards (Cash Bonuses). Our 2016 annual incentive program is generally consistent with the 2015 program, with the exception of the following changes.
Annual Incentive Opportunity (% of Base Salary) | ||||||||||||
Executive | Threshold | Target | Maximum | |||||||||
Daniel P. Hansen | 75 | % | 150 | % | 300 | % | ||||||
Craig J. Aniszewski | 50 | % | 100 | % | 200 | % | ||||||
Greg A. Dowell | 50 | % | 100 | % | 200 | % | ||||||
Christopher R. Eng | 50 | % | 100 | % | 200 | % | ||||||
Paul Ruiz | 35 | % | 70 | % | 140 | % |
For 2016, the goals established by the Compensation Committee for the annual incentive program relate to:
AFFO per share will be calculated as the Company’s net income or loss as set forth in its audited consolidated financial statements for the year ending December 31, 2016, excluding gains (or losses) from sales of property, plus depreciation and amortization (including amortization of deferred financing costs and amortization of franchise application fees), as further adjusted to exclude hotel transaction and pursuit costs, equity based compensation, debt transaction costs, gain (or loss) on derivative instruments and such other items, including nonrecurring expenses, as the Compensation Committee determines is appropriate and consistent with the purpose and intent of the incentive awards. . If any transactions occur, the effect of the transactions on actual 2016 AFFO per share will be evaluated by the Compensation Committee, and in the
Compensation Committee’s discretion, an appropriate adjustment may be made to the threshold, target and maximum levels of budgeted AFFO per share to give effect of those transactions. Same-store RevPAR growth will be calculated as a year over year comparison of RevPAR growth for the Company’s hotels owned for the entire year ended December 31, 2015 and the entire year ending December 31, 2016. Individual Performance goals have been established with respect to each executive officer’s individual performance and contribution to the Company in 2016.
No amount will be paid under the AFFO Component, the RevPAR Component or the Individual Performance Component if the threshold level of performance is not achieved. No additional amounts will be paid under the AFFO Component, the RevPAR Component or the Individual Performance Component if actual performance exceeds the maximum level of performance established by the Compensation Committee.
The Committee approved the following target total long-term incentive grant values for each executive, awarded 60% in the form of performance-based stock and 40% in the form of time-based stock:
Executive | Performance- Based Stock Target Value | Time-Based Stock Value | Total LTI Grant Value at Target | |||||||||
Daniel P. Hansen | $ | 1,440,000 | $ | 960,000 | $ | 2,400,000 | ||||||
Craig J. Aniszewski | $ | 600,000 | $ | 400,000 | $ | 1,000,000 | ||||||
Greg A. Dowell | $ | 450,000 | $ | 300,000 | $ | 750,000 | ||||||
Christopher R. Eng | $ | 180,000 | $ | 120,000 | $ | 300,000 | ||||||
Paul Ruiz | $ | 120,000 | $ | 80,000 | $ | 200,000 |
The Compensation Committee granted these stock awards under the Company’s Equity Incentive Plan. The number of shares granted was based on the VWAP of our common stock for the ten trading days preceding the March 8, 2016 grant date of $10.96.
The terms of the 2016 performance-based awards are generally the same as the terms of the 2015 awards, with the following exceptions:
The terms of the 2016 time-based awards are substantially the same as for the 2015 time-based awards, except in the event of a change in control during the vesting period, vesting of unvested shares will only accelerate if either a) the surviving or successor entity in the change in control does not assume or replace the
shares with a comparable grant covering common stock of the surviving or successor entity, or b) in the event of the executive’s death, disability, termination without cause or voluntary termination for good reason.
On July 30, 2015, in connection with Mr. Boekelheide’s resignation, the Company entered into a severance and release agreement with Mr. Boekelheide (the “Agreement”). The Agreement provided for a severance payment to Mr. Boekelheide in the gross amount of $1,950,000, and accelerated vesting of all previously awarded restricted shares of common stock and options.
We have adopted stock ownership guidelines for our executive officers, including our named executive officers. For more information, please see “Corporate Governance Matters — Stock Ownership Guidelines.”
Name and Principal Position | | | Year | | | Base Salary ($) | | | Bonus ($) | | | Stock Awards ($)(1) | | | Non-Equity Incentive Plan Compensation ($)(2) | | | All Other Compensation ($)(3) | | | Total ($) | | |||||||||||||||||||||
Daniel P. Hansen; President, CEO | | | | | 2017 | | | | | | 700,000 | | | | | | — | | | | | | 2,491,530 | | | | | | 420,000 | | | | | | 10,800 | | | | | | 3,622,330 | | |
| | | 2016 | | | | | | 700,000 | | | | | | — | | | | | | 2,815,489 | | | | | | 1,790,250 | | | | | | 10,600 | | | | | | 5,316,339 | | | ||
| | | 2015 | | | | | | 575,000 | | | | | | — | | | | | | 2,483,986 | | | | | | 1,437,500 | | | | | | 10,600 | | | | | | 4,507,086 | | | ||
Craig J. Aniszewski; EVP, COO | | | | | 2017 | | | | | | 430,000 | | | | | | — | | | | | | 1,038,134 | | | | | | 172,000 | | | | | | 10,800 | | | | | | 1,650,934 | | |
| | | 2016 | | | | | | 430,000 | | | | | | — | | | | | | 1,173,123 | | | | | | 733,150 | | | | | | 10,600 | | | | | | 2,346,873 | | | ||
| | | 2015 | | | | | | 375,000 | | | | | | — | | | | | | 836,397 | | | | | | 468,750 | | | | | | 10,600 | | | | | | 1,690,747 | | | ||
Jonathan P. Stanner; EVP, CIO | | | | | 2017 | | | | | | 283,835 | | | | | | 113,333 | | | | | | 850,118 | | | | | | — | | | | | | 106,556 | | | | | | 1,353,842 | | |
| | | 2016 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | ||
| | | 2015 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | ||
Greg A. Dowell; EVP, CFO | | | | | 2017 | | | | | | 375,000 | | | | | | — | | | | | | 778,596 | | | | | | 150,000 | | | | | | 10,800 | | | | | | 1,314,396 | | |
| | | 2016 | | | | | | 375,000 | | | | | | — | | | | | | 879,845 | | | | | | 629,375 | | | | | | 10,600 | | | | | | 1,894,820 | | | ||
| | | 2015 | | | | | | 360,000 | | | | | | — | | | | | | 776,255 | | | | | | 450,000 | | | | | | 8,129 | | | | | | 1,594,384 | | | ||
Christopher R. Eng; EVP, CRO, GC | | | | | 2017 | | | | | | 325,000 | | | | | | — | | | | | | 415,247 | | | | | | 130,000 | | | | | | 10,800 | | | | | | 881,047 | | |
| | | 2016 | | | | | | 300,000 | | | | | | — | | | | | | 351,932 | | | | | | 501,500 | | | | | | 10,600 | | | | | | 1,164,032 | | | ||
| | | 2015 | | | | | | 260,000 | | | | | | — | | | | | | 205,321 | | | | | | 243,750 | | | | | | 10,600 | | | | | | 719,671 | | |
Name and Principal Position | Year | Base Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | ||||||||||||||||||||||||
Kerry W. Boekelheide* Executive Chairman of the Board | 2015 | 261,673 | — | 1,194,649 | 152,727 | — | 1,960,600 | 3,569,649 | ||||||||||||||||||||||||
2014 | 436,000 | — | 531,805 | — | 899,250 | 10,400 | 1,877,455 | |||||||||||||||||||||||||
2013 | 400,000 | — | 537,498 | — | 325,000 | 10,200 | 1,272,698 | |||||||||||||||||||||||||
Daniel P. Hansen President and CEO | 2015 | 575,000 | — | 2,483,986 | — | 1,437,500 | 10,600 | 4,507,086 | ||||||||||||||||||||||||
2014 | 450,000 | — | 1,185,597 | — | 1,068,750 | 10,400 | 2,714,747 | |||||||||||||||||||||||||
2013 | 400,000 | — | 1,074,297 | — | 325,000 | 10,200 | 1,809,497 | |||||||||||||||||||||||||
Craig J. Aniszewski EVP and COO | 2015 | 375,000 | — | 836,397 | — | 468,750 | 10,600 | 1,690,747 | ||||||||||||||||||||||||
2014 | 350,000 | — | 344,899 | — | 415,625 | 10,400 | 1,120,924 | |||||||||||||||||||||||||
2013 | 325,000 | — | 236,631 | — | 210,938 | 142,850 | 915,419 | |||||||||||||||||||||||||
Greg A. Dowell EVP, CFO and Treasurer | 2015 | 360,000 | — | 776,255 | — | 450,000 | 8,129 | 1,594,384 | ||||||||||||||||||||||||
2014 | 87,500 | 75,000 | — | — | — | — | 162,500 | |||||||||||||||||||||||||
2013 | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Christopher R. Eng SVP, General Counsel, Chief Risk Officer and Secretary | 2015 | 260,000 | — | 205,321 | — | 243,750 | 10,600 | 719,671 | ||||||||||||||||||||||||
2014 | 250,000 | — | 107,782 | — | 221,875 | 42,538 | 622,195 | |||||||||||||||||||||||||
2013 | 165,000 | — | 99,994 | — | 82,500 | 10,200 | 357,694 | |||||||||||||||||||||||||
Paul Ruiz VP and CAO | 2015 | 260,000 | 195,000 | 503,722 | — | — | 10,600 | 969,322 | ||||||||||||||||||||||||
2014 | 225,000 | 75,000 | — | — | — | 5,476 | 305,476 | |||||||||||||||||||||||||
2013 | — | — | — | — | — | — | — |
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 (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Share) | Grant Date Fair Value of Option Awards ($)(5) | |||||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||||||
Kerry W. Boekelheide* | 4/24/15(1) | 332,250 | 553,750 | 775,250 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
4/24/15(2) | — | — | 193,812 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
4/24/15(3) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
4/24/15(4) | — | — | — | — | — | — | 16,930 | — | — | 229,740 | ||||||||||||||||||||||||||||||||||
7/30/2015(6) | — | — | — | — | — | — | 46,673 | — | — | 505,244 | ||||||||||||||||||||||||||||||||||
7/30/2015(6) | — | — | — | — | — | — | 56,481 | — | — | 459,665 | ||||||||||||||||||||||||||||||||||
7/30/2015(6) | — | — | — | — | — | — | — | 75,200 | 9.75 | 152,727 | ||||||||||||||||||||||||||||||||||
Daniel P. Hansen | 3/3/15(1) | 575,000 | 862,500 | 1,150,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
3/3/15(2) | — | — | 287,500 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(3) | — | — | — | 22,338 | 89,352 | 178,704 | — | — | — | 1,678,031 | ||||||||||||||||||||||||||||||||||
3/3/15(4) | — | — | — | — | — | — | 59,568 | — | — | 805,955 | ||||||||||||||||||||||||||||||||||
Craig J. Aniszewski | 3/3/15(1) | 187,500 | 281,250 | 375,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
3/3/15(2) | — | — | 93,750 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(3) | — | — | — | 7,446 | 29,784 | 59,568 | — | — | — | 559,343 | ||||||||||||||||||||||||||||||||||
3/3/15(4) | — | — | — | — | — | — | 20,477 | — | — | 277,054 | ||||||||||||||||||||||||||||||||||
Greg Dowell | 3/3/15(1) | 180,000 | 270,000 | 360,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
3/3/15(2) | — | — | 90,000 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(3) | — | — | — | 6,981 | 27,923 | 55,846 | — | — | — | 524,394 | ||||||||||||||||||||||||||||||||||
3/3/15(4) | — | — | — | — | — | — | 18,615 | — | — | 251,861 | ||||||||||||||||||||||||||||||||||
Christopher R. Eng | 3/3/15(1) | 91,000 | 143,000 | 195,000 | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
3/3/15(2) | — | — | 48,750 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(3) | — | — | — | 1,862 | 7,446 | 14,892 | — | — | — | 139,836 | ||||||||||||||||||||||||||||||||||
3/3/15(4) | — | — | — | — | — | — | 4,840 | — | — | 65,485 | ||||||||||||||||||||||||||||||||||
Paul Ruiz | 3/3/15(1) | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||
3/3/15(2) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(3) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
3/3/15(4) | — | — | — | — | — | — | 37,230 | — | — | 503,722 |
| | | | | | | | | 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 (#) | | | All Other Option Awards: Number of Securities Underlying Options (#) | | | Exercise or Base Price of Option Awards ($/Share) | | | Grant Date Fair Value of Awards ($)(4) | | ||||||||||||||||||||||||||||||||||||||||||
Name | | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | Threshold (#) | | | Target (#) | | | Maximum (#) | | |||||||||||||||||||||||||||||||||||||||||||||
Daniel P. Hansen | | | | | 3/6/17(1) | | | | | | 525,000 | | | | | | 1,050,000 | | | | | | 2,100,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 3/6/17(2) | | | | | | — | | | | | | — | | | | | | — | | | | | | 22,742 | | | | | | 90,967 | | | | | | 181,934 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,558,219 | | | ||
| | | 3/6/17(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 60,644 | | | | | | — | | | | | | — | | | | | | 933,311 | | | ||
Craig J. Aniszewski | | | | | 3/6/17(1) | | | | | | 215,000 | | | | | | 430,000 | | | | | | 860,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 3/6/17(2) | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,476 | | | | | | 37,903 | | | | | | 75,806 | | | | | | — | | | | | | — | | | | | | — | | | | | | 649,259 | | | ||
| | | 3/6/17(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 25,268 | | | | | | — | | | | | | — | | | | | | 388,875 | | | ||
Jonathan P. Stanner | | | | | 4/17/17(1) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 4/17/17(2) | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,581 | | | | | | 30,322 | | | | | | 60,644 | | | | | | — | | | | | | — | | | | | | — | | | | | | 519,401 | | | ||
| | | 4/17/17(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,215 | | | | | | — | | | | | | — | | | | | | 330,717 | | | ||
Gregory A. Dowell | | | | | 3/6/17(1) | | | | | | 187,500 | | | | | | 375,000 | | | | | | 750,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 3/6/17(2) | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,107 | | | | | | 28,427 | | | | | | 56,854 | | | | | | — | | | | | | — | | | | | | — | | | | | | 486,940 | | | ||
| | | 3/6/17(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,951 | | | | | | — | | | | | | — | | | | | | 291,656 | | | ||
Christopher R. Eng | | | | | 3/6/17(1) | | | | | | 162,500 | | | | | | 325,000 | | | | | | 650,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| | | 3/6/17(2) | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,790 | | | | | | 15,161 | | | | | | 30,322 | | | | | | — | | | | | | — | | | | | | — | | | | | | 259,700 | | | ||
| | | 3/6/17(3) | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 10,107 | | | | | | — | | | | | | — | | | | | | 155,547 | | |
Pursuant to the severance and release agreement that we entered into with Mr. Boekelheide in July 2015, option awards that we granted to Mr. Boekelheide in February 2011 and all time-based and performance-based stock awards that we granted to Mr. Boekelheide in 2013, 2014 and 2015 were accelerated so that they became fully vested on August 7, 2015 in connection with his resignation. The incremental fair value of Mr. Boekelheide’s equity awards is reflected in the Grants of Plan-Based Awards Table and the Summary Compensation Table for 2015.
Name | | | Number of Securities Underlying Unexercised Options (#) Exercisable | | | Number of Securities Underlying Unexercised Options (#) Unexercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | | Number of Shares or Units of Stock That Have Not Vested (#)(2) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | | ||||||||||||||||||||||||
Daniel P. Hansen | | | | | 235,000 | | | | | | — | | | | | | 9.75 | | | | | | 2/13/21 | | | | | | 156,121 | | | | | | 2,377,723 | | | | | | 311,706 | | | | | | 4,747,282 | | |
Craig J. Aniszewski | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 62,879 | | | | | | 957,647 | | | | | | 122,432 | | | | | | 1,864,639 | | |
Jonathan P. Stanner | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,215 | | | | | | 307,874 | | | | | | 30,322 | | | | | | 461,804 | | |
Greg A. Dowell | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 48,787 | | | | | | 743,026 | | | | | | 97,409 | | | | | | 1,483,539 | | |
Christopher R. Eng | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,739 | | | | | | 315,855 | | | | | | 39,030 | | | | | | 594,427 | | |
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable(2) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(3) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(1) | ||||||||||||||||||||||||
Daniel P. Hansen | 188,000 | 47,000 | 9.75 | 2/13/21 | 126,940 | 1,516,933 | 204,067 | 2,438,601 | ||||||||||||||||||||||||
Craig J. Aniszewski | 188,000 | 47,000 | 9.75 | 2/13/21 | 38,428 | 459,215 | 59,052 | 705,671 | ||||||||||||||||||||||||
Greg A. Dowell | — | — | — | — | 18,615 | 222,449 | 27,923 | 333,680 | ||||||||||||||||||||||||
Christopher R. Eng | — | — | — | — | 11,382 | 136,015 | 17,325 | 207,034 | ||||||||||||||||||||||||
Paul Ruiz | — | — | — | — | 37,230 | 444,899 | — | — |
Vesting Date | Hansen | Aniszewski | Dowell | Eng | Ruiz | |||||||||||||||
February 28, 2016 | 23,997 | 5,333 | — | 2,599 | — | |||||||||||||||
March 9, 2016 | 14,892 | 5,119 | 4,654 | 1,210 | — | |||||||||||||||
May 27, 2016 | 14,459 | 4,206 | — | 1,315 | — | |||||||||||||||
March 9, 2017 | 14,892 | 5,119 | 4,654 | 1,210 | — | |||||||||||||||
May 27, 2017 | 28,916 | 8,412 | — | 2,628 | — | |||||||||||||||
March 9, 2018 | 29,784 | 10,239 | 9,307 | 2,420 | 37,230 |
Potential Vesting Date | Hansen | Aniszewski | Dowell | Eng | Ruiz | |||||||||||||||
January 1, 2016 | 85,798 | 20,855 | — | 7,250 | — | |||||||||||||||
January 1, 2017 | 28,917 | 8,413 | — | 2,629 | — | |||||||||||||||
January 1, 2018 | 89,352 | 29,784 | 27,923 | 7,446 | — |
On
Vesting Date | | | Hansen | | | Aniszewski | | | Stanner | | | Dowell | | | Eng | | |||||||||||||||
March 9, 2018 | | | | | 66,843 | | | | | | 25,680 | | | | | | 5,054 | | | | | | 20,888 | | | | | | 7,684 | | |
March 9, 2019 | | | | | 58,956 | | | | | | 24,565 | | | | | | 5,054 | | | | | | 18,424(4) | | | | | | 8,002 | | |
March 9, 2020 | | | | | 30,322 | | | | | | 12,634 | | | | | | 10,107 | | | | | | 9,475(4) | | | | | | 5,053 | | |
Potential Vesting Date | | | Hansen | | | Aniszewski | | | Stanner | | | Dowell | | | Eng | | |||||||||||||||
January 1, 2018(5) | | | | | 89,352 | | | | | | 29,784 | | | | | | — | | | | | | 27,923 | | | | | | 7,446 | | |
March 8, 2019 | | | | | 131,387 | | | | | | 54,745 | | | | | | — | | | | | | 41,059 | | | | | | 16,423 | | |
March 6, 2020 | | | | | 90,967 | | | | | | 37,903 | | | | | | 30,322 | | | | | | 28,427 | | | | | | 15,161 | | |
| | | Option Awards | | | Stock Awards | | ||||||||||||||||||
Name | | | Number of Shares Acquired on Exercise (#) | | | Value Realized on Exercise ($) | | | Number of Shares Acquired on Vesting (#) | | | Value Realized on Vesting ($) | | ||||||||||||
Daniel P. Hansen | | | | | — | | | | | | — | | | | | | 94,623 | | | | | | 1,549,911 | | |
Craig J. Aniszewski | | | | | — | | | | | | — | | | | | | 31,068 | | | | | | 505,243 | | |
Greg A. Dowell | | | | | — | | | | | | — | | | | | | 11,497 | | | | | | 176,479 | | |
Christopher R. Eng | | | | | — | | | | | | — | | | | | | 9,204 | | | | | | 150,138 | | |
Option Awards | Stock Awards | |||||||||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||
Kerry W. Boekelheide | 376,000 | 1,323,520 | 152,466 | 1,896,272 | ||||||||||||
Daniel P. Hansen | — | — | 92,249 | 1,172,484 | ||||||||||||
Craig J. Aniszewski | — | — | 26,928 | 341,661 | ||||||||||||
Christopher R. Eng | — | — | 7,554 | 96,381 |
| | | Termination Without Cause or Voluntary Termination for Good Reason (No Change in Control) | | | Termination Without Cause or Voluntary Termination for Good Reason (Change in Control) | | | Death or Disability(1) | | |||||||||
Daniel P. Hansen Cash Severance Payment(2) Medical/Welfare Benefits(3) Acceleration of Equity Awards(4) Total(5) | | | | | |||||||||||||||
| | | 7,040,250 | | | | | | 7,040,250 | | | | | | — | | | ||
| | | 22,800 | | | | | | 22,800 | | | | | | — | | | ||
| | | 7,125,005 | | | | | | 7,125,005 | | | | | | 7,125,005 | | | ||
| | | 14,188,055 | | | | | | 14,188,055 | | | | | | 7,125,005 | | | ||
Craig J. Aniszewski Cash Severance Payment(2) Medical/Welfare Benefits(3) Acceleration of Equity Awards(4) Total(5) | | | | | |||||||||||||||
| | | 2,023,150 | | | | | | 2,453,150 | | | | | | — | | | ||
| | | 12,800 | | | | | | 12,800 | | | | | | — | | | ||
| | | 2,822,287 | | | | | | 2,822,287 | | | | | | 2,822,287 | | | ||
| | | 4,858,237 | | | | | | 5,288,237 | | | | | | 2,882,287 | | | ||
Jonathan P. Stanner Cash Severance Payment(2) Medical/Welfare Benefits(3) Acceleration of Equity Awards(4) Total(5) | | | | | |||||||||||||||
| | | 1,200,000 | | | | | | 1,600,000 | | | | | | — | | | ||
| | | 20,200 | | | | | | 20,200 | | | | | | — | | | ||
| | | 769,679 | | | | | | 769,679 | | | | | | 769,679 | | | ||
| | | 1,989,879 | | | | | | 2,389,879 | | | | | | 769,679 | | | ||
Greg A. Dowell Cash Severance Payment(2) Medical/Welfare Benefits(3) Acceleration of Equity Awards(4) Total(5) | | | | | |||||||||||||||
| | | 1,754,315 | | | | | | 2,129,375 | | | | | | — | | | ||
| | | 20,300 | | | | | | 20,300 | | | | | | — | | | ||
| | | 2,226,565 | | | | | | 2,226,565 | | | | | | 2,226,565 | | | ||
| | | 4,001,180 | | | | | | 4,376,240 | | | | | | 2,226,565 | | | ||
Christopher R. Eng Cash Severance Payment(2) Medical/Welfare Benefits(3) Acceleration of Equity Awards(4) Total(5) | | | | | |||||||||||||||
| | | 1,476,500 | | | | | | 1,801,500 | | | | | | — | | | ||
| | | 13,200 | | | | | | 13,200 | | | | | | — | | | ||
| | | 910,282 | | | | | | 910,282 | | | | | | 910,282 | | | ||
| | | 2,399,982 | | | | | | 2,724,982 | | | | | | 910,282 | | |
Termination Without Cause or Voluntary Termination for Good Reason (No Change in Control) | Termination Without Cause or Voluntary Termination for Good Reason (Change in Control) | Death or Disability(1) | ||||||||||
Daniel P. Hansen | ||||||||||||
Cash Severance Payment(2) | 8,332,500 | 8,332,500 | — | |||||||||
Medical/Welfare Benefits(3) | 20,000 | 20,000 | — | |||||||||
Acceleration of Equity Awards(4) | 4,058,934 | 4,058,934 | 4,058,934 | |||||||||
Total(5) | 12,411,434 | 12,411,434 | 4,058,934 | |||||||||
Craig J. Aniszewski | ||||||||||||
Cash Severance Payment(2) | 1,746,095 | 2,328,126 | — | |||||||||
Medical/Welfare Benefits(3) | 16,000 | 16,000 | — | |||||||||
Acceleration of Equity Awards(4) | 1,268,286 | 1,268,286 | 1,268,286 | |||||||||
Total(5) | 3,030,381 | 3,612,412 | 1,268,286 | |||||||||
Greg A. Dowell | ||||||||||||
Cash Severance Payment(2) | 1,158,750 | 1,545,000 | — | |||||||||
Medical/Welfare Benefits(3) | 20,000 | 20,000 | — | |||||||||
Acceleration of Equity Awards(4) | 556,129 | 556,129 | 556,129 | |||||||||
Total(5) | 1,734,879 | 2,121,129 | 556,129 | |||||||||
Christopher R. Eng | ||||||||||||
Cash Severance Payment(2) | 1,013,438 | 1,351,250 | — | |||||||||
Medical/Welfare Benefits(3) | 17,000 | 17,000 | — | |||||||||
Acceleration of Equity Awards(4) | 343,049 | 343,049 | 343,049 | |||||||||
Total(5) | 1,373,487 | 1,711,299 | 343,049 | |||||||||
Paul Ruiz | ||||||||||||
Cash Severance Payment(2) | 795,000 | 1,060,000 | — | |||||||||
Medical/Welfare Benefits(3) | 20,000 | 20,000 | — | |||||||||
Acceleration of Equity Awards(4) | 444,899 | 444,899 | 444,899 | |||||||||
Total(5) | 1,259,899 | 1,524,899 | 444,899 |
(3) The amounts shown in this row are estimates of the cash payments to be made under the applicable employment agreement based on the annual premiums to be paid by us for health care, life and disability insurance, and other benefits, expected to be provided to each executive officer. (4) In the event of a change in control, stock awards granted in 2016 and 2017 that have not yet vested would only become fully vested if the stock award is not assumed by, or a substitute award granted by, the surviving entity and the executive remains continually employed until the change of control date. The table above assumes that all shares that have not yet vested on a change of control would become fully vested. 40 (5) The employment agreements with our named executive officers do not provide an indemnification or gross-up payment for the parachute payment excise tax under Sections 280G and 4999 of the Code. The employment agreements instead provide that the |
On July 30, 2015, in connection with Mr. Boekelheide’s departure, the Company entered into a severance and release agreement with Mr. Boekelheide (the “Agreement”)any other payments or benefits that are treated as parachute payments under the Code will be reduced to the maximum amount that can be paid without an excise tax liability. The parachute payments will not be reduced, however, if the executive will receive greater after-tax benefits by receiving the total or unreduced benefits (after taking into account any excise tax liability payable by the executive). The Agreement became effective on August 7, 2015 (the “Effective Date”) and provided for the following: (i) a covenant by Mr. Boekelheide not to directly own, manage or control for a period of one year following the Effective Date any premium-branded, select-service hotels located within a ten mile radius of any hotel the Company owns or is pursing to acquire, own, develop or re-develop as of the Effective Date; (ii) a covenant by Mr. Boekelheide not to solicit the Company’s employees for employment for a period of two years following the Effective Date, (iii) confidentiality and non-disparagement covenants; (iv) a severance payment to Mr. Boekelheideamounts shown in the gross amount of $1,950,000, less applicable payroll deductions; (v) accelerated vesting of all restricted shares of common stock and options previously awarded to Mr. Boekelheide; and (vi) a release by Mr. Boekelheide of all claims against the Company, affiliates and other parties.
The Compensation Committee (“Compensation Committee”) of the Board of Directors (“Board”) of Summit Hotel Properties, Inc. (“Company”) has reviewed and discussed the compensation discussion and analysis appearing under the heading “Executive Compensation” of this proxy statement (“CD&A”) with management of the Company. Based on the Compensation Committee’s review of the CD&A and the Compensation Committee’s discussions of the CD&A with management, the Compensation Committee recommended to the Board (and the Board has approved)table assume that the CD&A be included inexecutive officer will receive the Company’s proxy statement on Schedule 14A prepared in connection with the Annual Meeting.
Compensation Committee of the Board:
Kenneth J. Kay (Chair)Bjorn R. L. HansonJeffrey W. JonesThomas W. StoreyApril 5, 2016
Report.
2017.
Each of the Audit Committee members is independent as defined by the NYSE listing standards and each member is financially literate. The Board has identified Bjorn R. L. Hanson, Jeffrey W. Jones, and Kenneth J. Kay and Hope S. Taitz as “audit committee financial experts” within the meaning of the SEC rules.
| | | Year Ended December 31, 2017 | | | Year Ended December 31, 2016 | | ||||||
Audit Fees | | | | $ | 915,000 | | | | | $ | 827,000(1) | | |
Audit-Related Fees | | | | $ | 9,750 | | | | | $ | 7,451 | | |
Tax Fees | | | | $ | 15,000 | | | | | $ | 60,000 | | |
All Other Fees | | | | | — | | | | | | — | | |
Total | | | | $ | 939,750 | | | | | $ | 894,451 | | |
Year Ended December 31, 2015 | Year Ended December 31, 2014 | |||||||
Audit Fees | $ | 706,200 | $ | 750,000 | ||||
Audit-Related Fees | 281,200 | 66,000 | ||||||
Tax Fees | 62,000 | 216,110 | ||||||
All Other Fees | — | — | ||||||
Total | $ | 1,049,400 | $ | 1,032,110 |
Name of Beneficial Owner | | | Number of Shares of Common Stock Beneficially Owned(1) | | | Percentage of Common Stock Beneficially Owned(2) | | ||||||
BlackRock, Inc.(3) | | | | | 16,314,125 | | | | | | 15.58% | | |
The Vanguard Group, Inc.(4) | | | | | 15,954,948 | | | | | | 15.24% | | |
Vanguard Specialized Funds – Vanguard REIT Index Fund(5) | | | | | 7,020,251 | | | | | | 6.71% | | |
Nuveen Asset Management, LLC(6) | | | | | 5,724,048 | | | | | | 5.47% | | |
Name of Beneficial Owner | Number of Shares of Common Stock Beneficially Owned(1) | Percentage of Common Stock Beneficially Owned(2) | ||||||
The Vanguard Group, Inc.(3) | 11,319,342 | 12.98 | % | |||||
Blackrock, Inc.(4) | 9,455,928 | 10.84 | % | |||||
Vanguard Specialized Funds – Vanguard REIT Index Fund(5) | 6,237,715 | 7.15 | % | |||||
Wellington Management Company, LLP(6) | 3,880,080 | 4.45 | % |
Name of Beneficial Owner(1) | | | Number of Shares Beneficially Owned | | | Percentage of All Shares(2) | | ||||||
Daniel P. Hansen(3) | | | | | 1,226,155 | | | | | | 1.17 | | |
Craig J. Aniszewski(4) | | | | | 399,177 | | | | | | * | | |
Greg A. Dowell(4) | | | | | 168,647 | | | | | | * | | |
Jonathan P. Stanner(4) | | | | | 116,276 | | | | | | * | | |
Christopher R. Eng(4) | | | | | 114,690 | | | | | | * | | |
Thomas W. Storey | | | | | 95,742 | | | | | | * | | |
Bjorn R. L. Hanson | | | | | 41,041 | | | | | | * | | |
Jeffrey W. Jones | | | | | 27,613 | | | | | | * | | |
Kenneth J. Kay | | | | | 27,613 | | | | | | * | | |
Hope S. Taitz | | | | | 4,530 | | | | | | * | | |
All directors and executive officers as a group (10 persons) | | | | | 2,221,484 | | | | | | 2.12% | | |
Name of Beneficial Owner(1) | Number of Shares Beneficially Owned | Percentage of All Shares(2) | ||||||
Daniel P. Hansen(3) | 873,187 | * | ||||||
Craig J. Aniszewski(4) | 463,233 | * | ||||||
Greg A. Dowell(5) | 119,469 | * | ||||||
Christopher R. Eng(6) | 58,475 | * | ||||||
Paul Ruiz(7) | 55,478 | * | ||||||
Bjorn R. L. Hanson | 27,022 | * | ||||||
Thomas W. Storey | 70,357 | * | ||||||
Kenneth J. Kay | 13,594 | * | ||||||
Jeffrey W. Jones | 13,594 | * | ||||||
All directors and executive officers as a group (9 persons) | 1,694,409 | 1.94 | % |
Materials