UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐ Preliminary Proxy Statement
☐ Confidential, for use of the Commission Only (as Permitted By Rule 14A-6(e)(2))
☒ Definitive Proxy Statement
☐ Definitive Additional Materials
☐ Soliciting Material Pursuant to Section 240.14a-12
SERITAGE GROWTH PROPERTIES
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒ No fee required
☐ Fee computed on table belowin exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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☐ Fee paid previously with preliminary materials.
☐ Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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500 Fifth Avenue
Suite 1530
New York, NY 10110
(212) 355-7800
April 9, 202127, 2023
Dear Shareholder:
The trustees and officers of Seritage Growth Properties (the “Company”(“Seritage,” the “Company,” “our company,” “we,” “our” or “us”) are pleased to invite you to attend the 20212023 annual meeting of the Company’s shareholders on May 20, 2021June 6, 2023 at 10:00 a.m. (Eastern Time). Due to the public health emergency created by the coronavirus pandemic (COVID-19) and to comply with government directives and support the health and wellbeing of our shareholders, thisThis year’s Annual Meeting will be held in a virtual meeting format only. You will be able to attend the Annual Meeting virtually and vote and submit questions during the virtual Annual Meeting by visiting www.meetingcenter.io/240071724.www.meetnow.global/M2XYZH2. For instructions on how to attend and vote your shares at the Annual Meeting, see the information in the accompanying Proxy Statement in the section titled “Questions and Answers — How do I attend and vote shares at the Annual Meeting?” Any reference herein to attending the Annual Meeting, including any reference to “in person” attendance, means attending by remote communication via live webcast on the Internet.
The formal notice of this Annual Meeting and the Proxy Statement appear on the following pages. We have elected to provide access to our proxy materials over the Internet under the U.S. Securities and Exchange Commission’s “notice and access” rules. After reading the Proxy Statement, please submit your proxy through the Internet, by touch-tone telephone or by requesting a printed copy of the proxy materials and using the enclosed proxy card. We must receive properly authorized proxies submitted via mail by May 19, 2021June 5, 2023 to ensure they will be counted at the Annual Meeting. We encourage you to authorize a proxy to vote your shares via telephone or the Internet and to choose to view future mailings electronically rather than receiving them on paper. You may vote electronically via telephone or the Internet up to the time the polls close at the virtual meeting. Please review the instructions on each of your voting options described in this Proxy Statement, as well as the Notice of Internet Availability of Proxy Materials you received in the mail.
Whether or not you plan to attend the virtual meeting, please read the Proxy Statement and vote your shares.
Sincerely, | |
Seritage Growth Properties | |
500 Fifth Avenue | |
Suite 1530 | |
New York, NY 10110 |
SERITAGE GROWTH PROPERTIES
500 Fifth Avenue
Suite 1530
New York, NY 10110
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 20, 2021June 6, 2023
10:00 a.m. Eastern Time
We invite you to attend the 20212023 annual meeting of shareholders (the “Annual Meeting”) of Seritage Growth Properties, a Maryland real estate investment trust (“Seritage,” “the Company,” “our company,” “we,” “our” or “us”), to consider and vote upon:
1. The election of Edward S. Lampert, John T. McClain, Adam Metz, Talya Nevo-Hacohen, Andrea L. Olshan, Mitchell Sabshon, Allison L. Thrush and Allison ThrushMark Wilsmann as Class III trustees, each to serve until the 2024 annual meeting of shareholders and until his or her successor is duly elected and qualified;qualifies;
2. The ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2021;2023;
3. An advisory, non-binding resolution to approve the Company’s executive compensation program for our named executive officers, as described in the proxy statement;
4. The determination, on an advisory non-binding basis, of the frequency with which shareholders will participate in any advisory vote on executive compensation; and
4.5. Any other business that may properly come before the meeting or any postponement or adjournment of the meeting.
The record date for determining shareholders entitled to notice of, and to vote at, the Annual Meeting is the close of business on March 25, 2021.April 19, 2023 (the “Record Date”). Only shareholders of record at that datethe close of business on the Record Date are entitled to notice of, and to vote at, the meeting. For more information, please read the accompanying Proxy Statement.
Due to the public health emergency created by the coronavirus pandemic (COVID-19) and in order to comply with government directives and support the health and wellbeing of our shareholders and others, thisThis year’s Annual Meeting will be held in a virtual meeting format only. You will be able to attend the Annual Meeting by remote communication and vote and submit questions during the virtual Annual Meeting by visiting www.meetingcenter.io/240071724.www.meetnow.global/M2XYZH2. For instructions on how to attend and vote your shares at the Annual Meeting, see the information in the accompanying Proxy Statement in the section titled “Questions and Answers — How do I attend and vote shares at the Annual Meeting?”. Any reference herein to attending the Annual Meeting, including any reference to “in person” attendance, means attending by remote communication via live webcast on the Internet.
It is important that your shares are represented at the meeting. Shareholders of record as of the close of business on the record dateRecord Date may vote their shares online at the virtual Annual Meeting, or authorize a proxy (1) by telephone, (2) through the Internet or (3) if you requested to receive printed proxy materials, by executing and submitting your enclosed proxy card at any time prior to meeting. If you do not attend the virtual meeting but your vote is submitted by telephone or Internet afterbefore 10:00 A.M., Eastern Time, on May 20, 2021,June 6, 2023, your vote will be cast as if you were personally present at the meeting.
If you are a shareholder of record as of the close of business on the record dateRecord Date or hold a legal proxy from a shareholder of record and attend and vote at the Annual Meeting, your vote at the Annual Meeting will replace any earlier vote.
Sincerely, | |
Matthew Fernand | |
April 9, 202127, 2023
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 20212023 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 20, 2021.JUNE 6, 2023.
The Company’s Proxy Statement for the Annual Meeting and the 20202022 Annual Report on Form 10-K for the fiscal year ended December 31, 20202022 are available at https://www.edocumentview.com/SRG.
TABLE OF CONTENTS
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
Independent Registered Public Accounting Firm Fees | |
REPORT OF THE AUDIT COMMITTEE | |
ITEM 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION | |
2024 ANNUAL MEETING OF SHAREHOLDERS | 46 |
Procedures for Submitting Shareholder Proposals | 46 |
SOLICITATION OF PROXIES | 46 |
IMPORTANT | 46 |
What is included in these proxy materials? What is a proxy statement and what is a proxy?
The proxy materials for the 20212023 annual meeting of shareholders (the “Annual Meeting”) of Seritage Growth Properties, a Maryland real estate investment trustREIT that is taxed as a C corporation (“Seritage,” “the Company,” “our company,” “we,” “our,” or “us”), include the Notice of Annual Meeting, this Proxy Statement, our 20202022 Annual Report on Form 10-K and a proxy card or voting instruction form. The Company has made these proxy materials available to you by Internet or, upon your request, has delivered printed versions of these materials to you by mail, because you were a shareholder of record at the close of business on March 25, 2021.April 19, 2023.
A “proxy statement” is a document that U.S. Securities and Exchange Commission (“SEC”) regulations require us to give you when we ask you to sign a proxy designating individuals to vote on your behalf. The word “proxy” has two meanings. A “proxy” is the legal designation of another person to cast the votes entitled to be cast by the holder of the shares and is sometimes called a “proxy card.” That other designated person is called a “proxy” and is sometimes referred to as a “proxy holder.”
We have designated three of our officers as proxies for the Annual Meeting. When you authorize a proxy by using the Internet, by telephone or by signing and returning the proxy card, you appoint each of Andrea L. Olshan, Amanda LombardJohn Garilli and Matthew Fernand as your proxy at the Annual Meeting (the “proxies”), with full power of substitution by any of them. Even if you plan to attend the Annual Meeting, we encourage you to authorize a proxy to vote your shares in advance by using the Internet, by telephone or, if you received your proxy card by mail, by signing and returning your proxy card. If you authorize a proxy by using the Internet or by telephone, you do not need to return your proxy card.
The form of proxy and this Proxy Statement have been approved by our Board of Trustees (“Board” or “Board of Trustees”) and are being provided to shareholders by its authority. These materials were first made available or sent to you on April 9, 2021.27, 2023. Any reference in this Proxy Statement to attending the Annual Meeting, including any reference to “in person” attendance, means attending by remote communication via live webcast on the Internet.
Why did I receive a one-page notice in the mail regarding the Internet Availability of Proxy Materials instead of a full set of proxy materials?
In accordance with rules adopted by the SEC, the Company uses the Internet as the primary means of furnishing proxy materials to our shareholders. Accordingly, the Company is sending a Notice of Internet Availability of Proxy Materials (the “Notice”) to our shareholders. All shareholders will be able to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or how to request a printed copy may be found in the Notice, proxy card or voting instruction form. In addition, shareholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. The Company encourages shareholders to take advantage of the availability of the proxy materials on the Internet in order to help reduce the environmental impact of its Annual Meetingsannual meetings and reduce the cost to the Company of physically printing and mailing materials.
What am I voting on at the Annual Meeting?
At the Annual Meeting, our shareholders are asked to consider and vote upon:
The election of |
the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year |
an advisory, non-binding resolution to approve the Company’s executive compensation program for our named executive officers; |
● | the determination, on an advisory non-binding basis, of the frequency with which shareholders will participate in any advisory vote on executive compensation; and |
any other business that may properly come before the Annual Meeting or any postponement or adjournment thereof. |
How does the Board recommend I vote?
The Board recommends that you vote as follows:
FOR the election of each of the Board’s nominees for |
FORthe ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year |
FOR, on an advisory basis, non-binding, the approval of the executive compensation program for our named executive |
● | FOR A ONE YEAR, on an advisory non-binding basis, frequency of any advisory votes on the Company’s executive compensation. |
What does it mean to vote by proxy?
It means that you give someone else the right to vote your shares in accordance with your instructions. In this way, you ensure that your vote will be counted even if you are unable to attend the Annual Meeting. If you properly sign and deliver your proxy but do not include specific instructions on how to vote, the individuals named as proxies will vote your shares as follows:
FOR the election of each of the Board’s nominees for |
FOR the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year |
FOR, on an advisory, non-binding basis, the approval of the executive compensation program for our named executive |
● | FOR A ONE YEAR, on an advisory non-binding basis, frequency of any advisory votes on the Company’s executive compensation. |
The individuals named as proxies will vote in their discretion on any other matter that may properly come before the Annual Meeting or any postponement or adjournment thereof.
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Who is entitled to vote?
Only holders of our Classclass A common shares of beneficial interest, $0.01 par value per share (“Class A Shares”), and Classclass B common shares of beneficial interest, $0.01 par value per share (“Class B Shares”), at the close of business on March 25, 2021April 19, 2023 (the “Record Date”) are entitled to notice of, and to vote at, the Annual Meeting. The holder of each Class A Share and each Class B Share outstanding is entitled to one vote per share. There were 40,587,22656,171,569 Class A Shares and no Class B Shares outstanding on the Record Date.
How do I cast my vote?
If you hold your shares directly in your own name, you are a “registered shareholder” (sometime referred to as a “record shareholder”) and may vote in person at the Annual Meeting or you may complete and submit a proxy through the Internet, by telephone or by mail. If your shares are registered in the name of a broker or other nominee, you are a “street-name shareholder” and will receive instructions from your broker or other nominee describing how to vote your shares.
How do I authorize a proxy to vote my shares by telephone or through the Internet?
If you are a registered shareholder, you may authorize a proxy to vote your shares by telephone or through the Internet following the instructions in the Notice or proxy card if you requested to receive paper proxy materials. If you are a street-name shareholder, your broker or other nominee has provided you a voting instruction form and other information for you to use in directing your broker or nominee how to vote your shares.
Who will count the vote?
A representative of Computershare Trust Company, N.A., an independent tabulator, will count the vote and act as the inspector of election.
May I change my vote after I have voted?
A subsequent vote by any means will change your prior vote. For example, if you voted by telephone, a subsequent Internet vote will change your vote. If you are a registered shareholder and wish to change your vote by mail, you may do so by requesting, in writing, a proxy card from the Corporate Secretary at Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110, Attn: Corporate Secretary. The last proxy received prior to the Annual Meeting will be the one that will be counted. If you are a registered shareholder, you may also change your vote by voting in person at the virtual Annual Meeting. AttendanceVirtual attendance at the Annual Meeting will not, by itself, change a prior vote. Street-name shareholders wishing to change their votes after returning voting instructions to their broker or other nominee should contact the broker or nominee directly.
May I revoke a proxy?
Yes, a registered shareholder may revoke a properly executed proxy at any time before it is exercised at the Annual Meeting by (i) submitting a letter addressed to and received by the Corporate Secretary at the address listed in the answer to the previous question or (ii) attending the Annual Meeting in person and revoking your proxy. Street-name shareholders wishing to
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revoke their proxies after returning voting instructions to their broker or other nominee should contact the broker or nominee directly.
What does it mean if I receive more than one Notice, proxy or voting instruction form?
It means your shares are registered in more than one account. For all copies of proxy materials, please provide voting instructions for all Notices, proxy cards and voting instruction forms that you receive. We encourage you to register all your accounts in the same name and address. Registered shareholders may contact our transfer agent, Computershare Trust Company, N.A., at 462 South 4th Street, Suite 1600 Louisville, KY 40202 (1-866-455-9772). Street-name shareholders holding shares through a broker or other nominee should contact their broker or nominee and request consolidation of their accounts.
What constitutes a quorum?
The holders of a majority of the outstanding shares entitled to vote, in person or represented by proxy at the Annual Meeting, constitute a quorum. A quorum is necessary to transact business at the Annual Meeting.
What is the required vote to elect trustees?
Item 1: The affirmative vote of at least two-thirds of all the votes cast (i.e., voted “for” or “against”) as to a nominee at a meeting of shareholders at which a quorum is present is required to elect a trustee. In the event that an incumbent trustee does not receive a sufficient percentage of votes entitled to be cast for election, he or she will continue to serve on the Board until a successor is duly elected and qualified.qualifies. Cumulative voting is not permitted.
What is the required vote to approve each of the other proposals?
Item 2: Ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm requires the affirmative vote of a majority of votes cast (i.e., voted “for” or “against”) in person or represented by proxy at the Annual Meeting.
Item 3: Approval of the advisory vote on the Company’s executive compensation program for our named executive officers requires the affirmative vote of a majority of votes cast (i.e., voted “for” or “against”) in person or represented by proxy at the Annual Meeting.
Item 4: Shareholders may vote in favor of holding the vote on the Company’s named executive officer compensation every year, every two years or every three years, and they may also choose to abstain. The choice among every one, two or three years which receives a majority of all of the votes cast at the Annual Meeting will be the frequency for the advisory vote on executive compensation that has been recommended by shareholders. In the event that no option receives a majority of the votes cast, the Board will consider the option that receives the highest number of votes as the preferred choice of the shareholders.
What is the effect of an abstention?
Abstentions occur when a shareholder is present in person or by proxy at the Annual Meeting, but abstains from voting. Abstentions will be counted for purposes of determining whether a quorum is present at the Annual Meeting. Abstentions are not votes cast and will have no effect on the election of trustees, on the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm, or on the advisory vote on the Company’s executive compensation and on the advisory vote on the frequency in which shareholders will participate in any advisory vote on executive compensation.
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How will votes be counted on shares held through brokers?
If you hold shares beneficially in street name, but do not provide your broker with voting instructions on a matter on which the broker is not permitted to vote without instructions from the beneficial owner, your shares represent “broker non-votes.” Under the rules of the New York Stock Exchange, brokers are not entitled to vote on (i) the election of trustees (Item 1) or, (ii) the advisory vote on the Company’s executive compensation (Item 3) or (iii) the advisory vote on the frequency of any advisory votes on the Company’s executive compensation (Item 4) unless they receive voting instructions from the beneficial owner. Your broker is entitled to vote your shares even if no instructions are received from you on the proposal to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm (Item 2). Broker non-votes will be counted for purposes of determining whether a quorum is present at the Annual Meeting. Because broker non-votes are not considered votes cast on a proposal, broker non-votes, if any, will not affect the outcome of the election of trustees (Item 1) or, the advisory vote on the Company’s executive compensation (Item 3) or the advisory vote on the frequency of any advisory votes on the Company’s executive compensation (Item 4).
Why are you holding a virtual Annual Meeting?
Due to the public health emergency created by the coronavirus pandemic (COVID-19) and to comply with government directives and support the health and wellbeing of our shareholders and others, this year’s Annual Meeting will be held by remote communication in a virtual meeting format only. In addition, weWe believe that the virtual meeting format will provide expanded access, improved communication and cost savings for our shareholders and the Company.
The Annual Meeting will convene at 10:00 a.m. Eastern Time on May 20, 2021.June 6, 2023. We encourage you to access the Annual Meeting prior to the start time leaving ample time for the virtual check-in process. Please follow the registration instructions as outlined in this proxy statement.
How do I attend and vote shares at the Annual Meeting?
Any shareholder as of the Record Date or their duly authorized proxies may attend the Annual Meeting.Meeting virtually. If you are a registered shareholder, you do not need to register to attend the Annual Meeting. You will be able to attend the Annual Meeting online and submit your questions during the Annual Meeting by visiting www.meetingcenter.io/240071724.www.meetnow.global/M2XYZH2. You also will be able to vote your shares electronically as part of the Annual Meeting webcast. Please follow the instructions on the notice or proxy card that you received.
To participate in the Annual Meeting, you will need to review the information included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. The password for the meeting is SRG2021.
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If you hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting virtually on the Internet. To register to attend the virtual Annual Meeting by remote
communication via webcast, you must submit a legal proxy from your broker or nominee as proof of your power to authorize your vote. Obtaining a legal proxy from your broker or nominee makemay take several days. Requests for registration must be labeled as “Legal Proxy” and be should be received by Computershare via email or by mail using the instructions below by no later than 5:00 PM, Eastern Time on May 17, 2021June 1, 2023 to ensure ample time to provide your confirmation of registration to be admitted to the meeting
You will receive a confirmation of your registration by email after we receive your registration materials.
Requests for registration should be directed to the following:
By email
Forward the email from your broker, or attach an image of your legal proxy, to legalproxy@computershare.com.legalproxy@computershare.com.
By mail
Computershare
Seritage Legal Proxy
P.O. Box 43001
Providence, RI 02940-3001
The Annual Meeting will convene at 10:00 a.m. Eastern Time on May 20, 2021.June 6, 2023. We encourage you to access the Annual Meeting prior to the start time leaving ample time for the check-in process. Please follow the registration instructions as outlined in this proxy statement.
May I access future annual meeting materials through the Internet?
Yes. Registered shareholders may sign up for electronic delivery at any time by registering their account online at www.computershare.com and updating their account profile. If you authorize a proxy through the Internet, you may also sign up for electronic delivery. Just follow the instructions that appear after clicking on the “Vote” icon at www.envisionreports.com/SRG during the voting process. You will receive an e-mail next year containing our 20212023 Annual Report on Form 10-K and the Proxy Statement for our 20222024 annual meeting. Street-name shareholders may also have the opportunity to receive copies of these documents electronically. Please check the information provided in the proxy materials mailed to you by your broker or other nominee regarding the availability of this service. This procedure reduces the printing costs and fees our Company incurs in connection with the solicitation of proxies.
How are proxies solicited and what is the cost?
Seritage will bear the cost of soliciting proxies by or on behalf of our Board. In addition to solicitation through the mail, proxies may be solicited in person or by telephone or electronic communication by our trustees, officers and employees, none of whom will receive additional
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compensation for these services. We have engaged Georgeson LLCInnisfree M&A Incorporated (“Georgeson”Innisfree”) to distribute and solicit proxies on our behalf and will pay GeorgesonInnisfree a fee of $10,000,$20,000 plus reimbursement of reasonable out-of-pocket expenses, for these services.
What is “householding”?
Seritage has adopted a procedure called “householding,” which has been approved by the SEC and authorized under Maryland law. Under this procedure, shareholders of record who have the same address and last name will receive a single copy of the Notice and, if applicable, the proxy materials unless one or more of these shareholders notifies the Company that they wish to continue receiving individual copies. Shareholders who participate in householding will continue to receive separate proxy cards. This procedure can result in significant savings to our company by reducing printing and postage costs.
If you wish to receive separate copies of Notices and, if applicable, proxy materials, please call the Company at (212) 355-7800 or write to: Corporate Secretary, Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110. The Company will deliver the requested documents to you promptly upon your request.
Any shareholders of record who share the same address and currently receive multiple copies of Notices and, if applicable, proxy materials who wish to receive only one copy of these materials per household in the future may contact the Corporate Secretary of the Company at the address or telephone number listed above. If you hold your shares through a broker, bank or other nominee, please contact your broker, bank, or other nominee to request information about householding.
How do I revoke my consent to the householding program?
If you are a holder of record and share an address and last name with one or more other holders of record, and you wish to continue to receive separate Notices and, if applicable, proxy materials, you may revoke your consent by writing to Corporate Secretary, Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110. You may also revoke your consent by contacting the Company at (212) 355-7800. You will be removed from the householding program within 30 days of receipt of the revocation of your consent.
A number of brokerage firms have instituted householding. If you hold your shares in street name, please contact your bank, broker or other holder of record to request information about householding.
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Corporate Governance Practices
Our Board is committed to effective corporate governance. The Board has approved and adopted Corporate Governance Guidelines that provide the framework for governance of our company. The Nominating and Corporate Governance Committee reviews and assesses the Corporate Governance Guidelines annually and recommends changes to the Board as appropriate. The Corporate Governance Guidelines, along with the charters of our Audit, Compensation and Nominating and Corporate Governance Committees and our Code of Business Conduct and Ethics, are available on our website at www.seritage.com on our Investor Relations page under the heading “Governance Documents.” (We are not including the information contained on, or available through, our website as a part of, or incorporating such information by reference into, this Proxy Statement.proxy statement.)
Among other things, the Corporate Governance Guidelines provide that:
A majority of the members of the Board must be independent trustees; |
Independent trustees are to meet regularly, at least twice a year, in executive session without management present; |
The Board and each of its committees have the power to engage, at the Company’s expense, independent legal, financial or other advisors as deemed necessary, without consulting or obtaining the approval of the Company’s officers in advance; |
The Board conducts an annual evaluation to assess whether it and its committees are functioning effectively; |
The Board is committed to a policy of inclusiveness and is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, experiences and skills; and |
Trustees and executive officers are prohibited from entering into any hedging or pledging transactions involving Company securities. Specifically, the Company prohibits all trustees and executive officers from engaging (at any time) in transactions in |
Environmental, Social and Governance Practices
We are committed to environmental, social responsibility and governance practices that serve and we believe benefit our shareholders, our team and our communities. We believe that
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revitalizing under-utilized real estate, enriching the communities that we serve and delivering value to all of our stakeholders is core to our mission. In 2019, we launched our Environmental, Social and Governance steering committee and have taken several steps in 2020since then towards recognizing our risks and improving our practices across our Company.
COVID-19 pandemic, the Company |
Based on the review and recommendation by the Nominating and Corporate Governance Committee, the Board analyzed the independence of each trustee. In making its independence determinations, the Board considers transactions, relationships and arrangements between Seritage and entities with which trustees are associated as executive officers or trustees or have significant financial interests. When these transactions, relationships and arrangements exist, they are in the ordinary course of business and are of a type customary for a real estate company such as Seritage.
As a result of this review, the Board affirmatively determined that the following trustees meet the standards of independence under our Corporate Governance Guidelines and the applicable New York Stock Exchange (“NYSE”) listing rules, including that each member is free
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of any relationship that would interfere with his or her individual exercise of independent judgment:
David S. Fawer
John T. McClain
Sharon OsbergAdam Metz
Thomas M. SteinbergTalya Nevo-Hacohen
Mitchell Sabshon
Allison L. Thrush
Mark Wilsmann
The Board has also determined that all members of the Audit Committee (“Audit Committee”) meet additional, heightened independence criteria applicable to audit committee members under the NYSE listing rules. The Board has further determined David S. Fawerthat Adam Metz and Allison L. Thrush are financially literate, and that John T. McClain, the chair of the Audit Committee, is an “audit committee financial expert,” as defined in Item 407(d)(5) of Regulation S-K promulgated by the SEC.
The Board has also determined that the members of the Compensation Committee meet independence criteria applicable to compensation committee members under the NYSE listing rules.
Consistent with our leadership structure, our Chief Executive Officer and other members of senior management are responsible for the identification, assessment and management of risks that could affect the Company, and the Board provides oversight in connection with these efforts. The Board’s oversight is conducted primarily through committees of the Board, as disclosed in the descriptions of the Nominating and Corporate Governance Committee, the Audit Committee, the Compensation Committee and the Investment Committee below and in the charters of these Board committees. The full Board has retained responsibility for general oversight of risks. The
Board satisfies this responsibility through full reports by each committee chair regarding the committee’s considerations and actions, as well as through regular reports directly from officers responsible for oversight and management of particular risks within the Company, including our Chief Executive Officer, Interim Chief Financial Officer and our General Counsel.Chief Legal Officer and Corporate Secretary.
We are committed to ethical business conduct and expect our trustees, officers and employees to act with integrity and to conduct themselves and our business in a way that protects our reputation for fairness and honesty. Consistent with these principles, we have established policies and practices in our Code of Business Conduct and Ethics with respect to political contributions and other public policy matters.
We encourage our employees to be active in the political and civic life of their communities. Trustees, officers and employees acting in their individual capacities may not give the impression that they are speaking on our behalf or representing the Company in such activities. In addition, no trustee or employee is permitted to make, authorize or permit any unlawful contributions, expenditure or use of the Company’s funds or property for political purposes.
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Trustees and employees must not give anything of value to government officials if this could be interpreted as an attempt to curry favor on behalf of the Company.
The Nominating and Corporate Governance Committee of our Board is responsible for reviewing the qualifications and independence of members of the Board and its various committees on a periodic basis, as well as the composition of the Board as a whole. This assessment includes members’ qualification as independent and their economic interest in the Company through meaningful share ownership, as well as consideration of diversity, skills and experience in relation to the needs of the Board. Trustee nominees will be recommended to the Board by the Nominating and Corporate Governance Committee in accordance with the policies and principles in its charter. The ultimate responsibility for selection of trustee nominees resides with the Board.
The Nominating and Corporate Governance Committee ensures, to the extent consistent with applicable legal requirements and the Board’s duties, that new Board nominees are drawn from a pool that includes diverse candidates, including women and minority candidates. The Committee is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, experiences and skills as part of each Board search that the Board and the Nominating and Corporate Governance Committee undertake. The Board and the Nominating and Corporate Governance Committee believe that it is important that our trustees represent diverse viewpoints. This process is designed so that the Board includes trustees with diverse backgrounds that represent appropriate financial and other expertise relevant to our business.
The Board held four regular meetings during fiscal year 2020.2022. Additionally, the Board held recurring14 special update meetings during the first few months2022 related to a variety of the COVID-19 pandemic and recurring update meetings in Decembertopics including discussions of 2020certain matters related to the CEO transition.Company's consideration of strategic alternatives, the Company’s decision to elect to be taxed as a C-Corp, the appointment of new trustees to the Board, and the Company’s litigation following the Sears Holding bankruptcy, captioned as Sears Holding Corp. et al. v. Andrew H. Tisch, et al., Case No. 20-07007(RDD). Additionally, the Special Committee of the Board held over 40 meetings in 2022 related to the Company’s consideration of strategic alternatives. All of the current trustees who served on the Board during 20202022 attended at least 75% of the total meetings of the Board and each of the Board committees on which such trustee served during his or her respective tenure. In addition to the foregoing, during fiscal year 2020,2022, the trustees from time to time held additional meetings and conference calls (with Mr. Lampert, our former Chairman, who resigned as a trustee as of March 2022, recusing himself)himself, so long as he was a member of our Board) to discuss Company business relating to Sears Holdings Corporation (“Sears Holdings”), Transform Holdco LLC (“Holdco”) and/or ESL Investments, Inc.matters including the above-referenced litigation and Mr. Lampert's potential interest in acquiring assets of the Company. Trustees are encouraged to attend, and all current trustees who served on the Board during 20202022 attended, our 20202022 annual meeting of shareholders.
Committees of the Board of Trustees
The Board has standing Audit, Compensation, Nominating and Corporate Governance, and Investment Committees. All members of the Audit, Compensation, and Nominating and Corporate Governance Committees are independent, as defined in the NYSE listing rules.
The table below reflects the current membership of each committee and the number of meetings held by each committee in fiscal year 2020.2022.
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Audit | Compensation | Nominating and | Investment | |
J. McClain | X* | X* | ||
A. Metz(1) | X | X | ||
T. Nevo-Hacohen(2) | X | X* | ||
S. Osberg(3) | X | X | ||
M. Sabshon(4) | X* | |||
A. Thrush(5) | X | X | ||
M. Wilsmann(6) | X | X | ||
2022 Meetings | 7 | 7 | 2 | 4 (7) |
Audit | Compensation | Nominating and |
Investment | |
D. Fawer | X | X* | ||
E. Lampert | X | |||
J. McClain | X* | X* | ||
S. Osberg | X | |||
T. Steinberg | X | X* | ||
A. Thrush | X | |||
2020 Meetings | 5 | 4 | 1 | 2(1) |
* | Committee chair |
(1) | On March 30, 2022, the Board elected Mr. Metz as a trustee of the Company, effective immediately. |
(2) | On April 26, 2022, the Board elected Ms. Nevo-Hacohen as trustee of the Company, effective immediately. On April 18, 2023, the Board appointed Ms. Nevo-Hachohen to the Compensation Committee, effective immediately. |
(3) | On April 17, 2023, Ms. Osberg notified the Company of her decision not to stand for reelection at the Annual Meeting. |
(4) | On April 26, 2022, the Board elected Mr. Sabshon as trustee of the Company, effective immediately. |
(5) | On April 18, 2023, the Board appointed Ms. Thrush to the Nominating and Corporate Governance Committee, effective immediately. |
(6) | On April 26, 2022, the Board elected Mr. Wilsmann as trustee of the Company, effective immediately. |
(7) | In addition to the meetings set forth above, in other instances the Investment Committee acted pursuant to unanimous written consents in |
Each Board committee operates under a written charter. The principal functions of each committee are summarized below (charters for the Audit, Compensation and Nominating and Corporate Governance Committees may be viewed on our website at www.seritage.com under the “Investors – Governance Documents” heading or may be requested by writing to our Corporate Secretary at our principal executive office):
Audit Committee
Hires, subject to shareholder ratification at the annual meeting, the independent registered public accounting firm to perform the annual audit; |
Is responsible for compensation and oversight of the work of the independent registered public accounting firm in connection with the annual audit report; |
Reviews the Company’s annual and quarterly financial statements, including disclosures made in management’s discussion and analysis of results of operations and financial condition; |
Reviews the reports prepared by the independent registered public accounting firm and management’s responses thereto; |
Pre-approves audit and permitted non-audit services performed by the independent registered public accounting firm; |
Reviews financial reports, internal controls and risk exposures; |
Reviews and approves all related-party transactions, as defined by applicable NYSE rules; |
Reviews management’s plan for establishing and maintaining internal controls; |
Reviews the scope of work performed by the internal audit staff; |
Discusses with the Company’s |
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Prepares the Audit Committee Report required by SEC rules to be included in our annual Proxy Statement. |
Compensation Committee
Reviews recommendations for and approves the compensation of senior executive officers; |
Reviews and approves corporate goals and objectives relevant to CEO compensation, evaluates the CEO’s performance and recommends to the Board the CEO’s overall compensation level; |
Reviews and approves employment agreements, severance arrangements and change in control arrangements affecting the CEO and other senior executives; and |
Prepares the Compensation Committee Report required by SEC rules to be included in our annual Proxy Statement. |
Nominating and Corporate Governance Committee
Reports annually to the full Board with an assessment of the Board’s performance; |
Recommends to the full Board the nominees for trustees; |
Reviews and recommends to the Board the composition of Board committees and the committee chairperson; |
Reviews recommended compensation arrangements for the Board; and |
Reviews and reassesses the adequacy of our Corporate Governance Guidelines. |
Investment Committee
Assists the Board in fulfilling its responsibility to oversee acquisitions, dispositions, development projects, financings and other similar investments by the Company; |
Assists the Company’s executive officers and management in evaluating and formulating proposed investments; |
Reviews and assesses proposed investments in light of the Company’s strategic goals and objectives; and |
Has the authority to approve certain transactions and presents and recommends certain other transactions to the full Board for its approval. |
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Compensation Committee Interlocks and Insider Participation
During fiscal 2020,2022, Adam Metz, John T. McClain and Sharon Osberg served as members of our Compensation Committee. No member of the Compensation Committee is a current or former executive officer or employee of the Company and no current member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain related-party transaction. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, an executive officer of which served as a trustee or member of the Company’s Compensation Committee during fiscal 2020.2022. On April 18, 2023, the Board appointed Talya Nevo-Hacohen to the Compensation Committee, effective immediately.
Communications with the Board of Trustees
You may contact any trustee, any group of trustees or the entire Board, at any time, subject to the exceptions described below. Your communication should be sent to the Seritage Growth Properties Board of Trustees — c/o Corporate Secretary, Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110. Communications are distributed to the Board, a committee of the Board, or a Board member as appropriate, depending on the facts and circumstances outlined in the communication. Certain items that are unrelated to the duties and responsibilities of the Board will be excluded, such as new product suggestions, résumés and other job inquiries, surveys and business solicitations or advertisements.
The Board has no policy that mandates the separation of the offices of Chairman of the Board and Chief Executive Officer. Under our Corporate Governance Guidelines, which may be viewed on our website at www.seritage.com under the “Investors –— Governance Documents”, the Board believes that it is in the best interests of the Company to make such a determination at the time that it elects a new Chairman of the Board or Chief Executive Officer. The Board believes this determination should be based on the Company’sCompany's best interests in light of the circumstances at the time. Taking these considerations into account,Mr. Lampert was the Chairman of the Board until he retired on March 1, 2022, and Ms. Olshan is the Chief Executive Officer of the Company. Since June 2022, Adam Metz has concludedbeen the Chairman of the Board. It is the current view of the Board that the separation of the roles of Chairman and Chief Executive Officer now serves the best interests of the Company at this time. Currently, Mr. Lampert is the Chairman of the Board and Ms. Olshan is the Chief Executive Officer of the Company. Ms. Olshan’s election as Chief Executive Officer of the Company became effective on March 16, 2021. The Board believes it is important to maintain flexibility in the future as to the Board’sBoard's leadership structure, but firmly supports maintaining a non-management trustee in a leadership role at all times, whether as non-executive Chairman or Lead Independent Trustee.
Nomination of Trustee Candidates
The Nominating and Corporate Governance Committee considers candidates proposed by shareholders and evaluates them using the same criteria that it uses for other candidates. The Nominating and Corporate Governance Committee will, when appropriate, actively seek individuals qualified to become Board members, and solicit input on trustee candidates from a variety of sources, including our current trustees. As a matter of course, the Committee will evaluate a candidate’s qualifications and review all proposed nominees for the Board, including
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those proposed by shareholders, in accordance with its charter and our Corporate Governance Guidelines. This will include a review of the candidate’s qualifications and independence and economic interest in the Company through meaningful share ownership, as well as consideration of diversity, age, skills and experience in the context of the needs of the Board. The Nominating and Corporate Governance Committee will ensure, to the extent consistent with applicable legal requirements and the Board’s duties, that new Board nominees are drawn from a pool that includes diverse candidates, including women and minority candidates. The Committee is committed to seeking out highly qualified women and minority candidates as well as candidates with diverse backgrounds, experiences and skills as part of each Board search that the Board and the Nominating and Governance Committee undertake. While the Committee has the right to retain a third party to assist in the nomination process, the Committee did not do so in fiscal 2020,2022, and accordingly the Company did not pay a fee to any third party to identify or assist in identifying or evaluating potential nominees in fiscal 2020.2022.
Trustee nominees recommended by the Nominating and Corporate Governance Committee are expected to be committed to representing the long-term interests of our Company and our shareholders. The Committee believes that it is important to align the interests of the trustees with those of our shareholders, and therefore expects that each non-employee trustee will acquire, by the third anniversary of his or her election as a trustee, a number of Class A
Shares with a cost at least equal to the annual retainer of each trustee in effect on the date when the trustee first becomes a member of the Board. The Corporate Governance Guidelines provide that the Board members should possess a high degree of integrity and have broad knowledge, experience and mature judgment. In addition to a meaningful economic commitment to our company as expressed in share ownership, trustees and nominees should have predominately business backgrounds, have experience at policy-making levels in business, and bring a diverse set of business experiences and perspectives to the Board.
Any recommendation by our shareholders should include any supporting material the shareholder(s) considers appropriate in support of that recommendation, but must include information that would be required under the rules of the SEC to be included in a proxy statement soliciting proxies for the election of such candidate and a written consent of the candidate to serve as one of our trustees if elected. The Nominating and Corporate Governance Committee also reserves the right to request such additional information as it deems appropriate. All recommendations for nomination received by the Corporate Secretary will be presented to the Nominating and Corporate Governance Committee for its consideration. See section entitled “Communications with the Board of Trustees” for more information.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Review and Approval of Transactions with Related Persons
The Company’s Audit Committee charter requires that the Audit Committee review and approve all related-party transactions required to be disclosed pursuant to SEC rules and applicable NYSE rules. With respect to each related-party transaction, the Audit Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms that are no less favorable to the Company than terms generally available from an unaffiliated third party under the same or similar circumstances and the extent of the related person’s interest in the transaction.
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Our Relationships with Transform Holdco LLC and ESLEdward S. Lampert
On June 11, 2015, Sears Holdings effected a rights offering (the “Rights Offering”) to Sears Holdings stockholders to purchase common shares of beneficial interest of Seritage in order to fund, in part, Seritage’s $2.7 billion acquisition of 234 of Sears Holdings’ owned properties and one of its ground leased properties, and its 50% interests in three joint ventures that collectively owned 28 properties, ground leased one property and leased two properties (collectively, the “Transaction”). The Rights Offering ended on July 2, 2015, and the Company’s Class A Shares were listed on the NYSE on July 6, 2015. On July 7, 2015, the Company completed the Transaction with Sears Holdings and commenced operations. The Company’s only operations prior to the completion of the Rights Offering and Transaction were those incidental to the completion of such activities.
On October 15, 2018, Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”). On February 28, 2019, the Company and certain affiliates of Transform Holdco LLC, an affiliate of ESL Investments, Inc. (“Holdco” or the “Tenant”), executed a master lease with respect to 51 wholly-owned properties (the “Holdco Master Lease”), which became effective on March 12, 2019, when the Bankruptcy Court issued an order approving the rejection of the original master lease between the Company and Sears Holdings (the “Original Master Lease”). The Holdco Master Lease was amended on June 3, 2020 (the “Holdco Master Lease Amendment”) and on December 2, 2020 (the “Holdco Master Lease Second Amendment”) each as further described below. As of April 1, 2021,December 31, 2022, the Company has nodid not have any remaining properties leased to Holdco.Holdco or Sears Holdings after giving effect to the termination of the remaining five Consolidated Properties, which were completed in March 2021.
Since the Transaction, the Company has operated as an independent public company. However, one of our trustees,Our former Chairman, Edward S. Lampert, and entities affiliated with him, together as a group, currently beneficially own a significant portionsportion of both Holdco’sHoldco's outstanding common stock and equity in Seritage Growth Properties, L.P., a Delaware limited partnership (“Operating Partnership”). Seritage isapproximately 26.8% of the sole general partnerCompany's outstanding Class A Shares. For additional information, see the “Amount and Nature of Operating Partnership.Beneficial Ownership” section of this proxy statement. Mr. Lampert is also the Chairman of the Board of each of the tenant entities that is a party to the Holdco Master Lease. Accordingly, Holdco is considered a related party.
Mr. Lampert entered into a Voting and Support Agreement with the Company, pursuant to which Mr. Lampert agreed to, among other things, (i) appear at the 2022 annual meeting and (ii) validly vote in favor of the plan of sale of the Company’s assets and dissolution of the Company (the “Plan of Sale”). Until July 6, 2022, Mr. Lampert held substantial equity in our operating partnership, Seritage Growth Properties, L.P., a Delaware limited partnership (the “OP”). Seritage is the sole general partner of our OP.
Pursuant to the Voting and Support Agreement, on July 6, 2022, Mr. Lampert exchanged his entire equity interest in the OP for Class A Shares of Seritage in accordance with the terms of the partnership agreement of our OP. Accordingly, Seritage currently owns, directly and indirectly, the entire equity interest in the OP.
The following is a summary of the terms of the material agreements that we and the OP have entered into with Holdco and its subsidiaries, Operating Partnershipthe OP and ESL Investments, Inc., an affiliate of Mr. Lampert, and its affiliates (“ESL”). The summary of the agreements is qualified in its entirety by reference to the full text of the applicable agreements filed as exhibits to our SEC reports.
The Holdco Master Lease
The Holdco Master Lease was a unitary, non-divisible lease as to all properties, with Holdco’sHoldco's obligations as to each property cross-defaulted with all obligations of Holdco with respect to all other properties. The Holdco Master Lease generally was a triple net lease with respect to all space leased thereunder to Holdco, subject to proportional sharing by Holdco for repair and maintenance charges, real property taxes, insurance and other costs and expenses common to both the space leased by Holdco and other space occupied by other tenants in the same or other buildings, space recaptured pursuant to the Company recapture rights described below
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and all other space constructed on the properties. Under the Holdco Master Lease, Holdco was required to make all expenditures reasonably necessary to maintain the premises in good appearance, repair and condition for as long as theyit were in occupancy.
Pursuant to the Holdco Master Lease Amendment, the Company agreed to terminate the Holdco Master Lease at 12 stores, effective September 30, 2020, each of which the Tenant would otherwise have the right to terminate without penalty on March 1, 2021, in return for a termination payment of $5.3 million payable upon the completion of going-out-of-business sales. Pursuant to the Holdco Master Lease Second Amendment, the Company agreed to terminate the Holdco Master Lease at the remaining 5 stores, effective March 15, 2021, in return for a termination payment of $3.8 million.
As of December 31, 2020, the annual base rent paid with respect to the Remaining Properties subject to the Holdco Master Lease accounted for $4.2 million and the amount of the Termination Payment accounted for $9.1 million.
Subscription, Distribution and Purchase and Sale Agreement
Through the Subscription,subscription, distribution and purchase and sale agreement (the “Subscription, Distribution and Purchase and Sale Agreement,Agreement”), Sears Holdings subscribed for rights to acquire Seritage Class A Shares of Seritage and distributed such subscription rights to its stockholders. The Subscription, Distribution and Purchase and Sale Agreement also provided for the sale of properties and joint venture interests (both directly and indirectly) to Operating Partnershipthe OP for an aggregate purchase price of approximately $2.7 billion. The Subscription, Distribution and Purchase and Sale Agreement allocated responsibility for liabilities relating to the acquired properties between Seritage and Sears Holdings subject to the provisions of the Original Master Lease. It also contains indemnification obligations between Seritage and Sears Holdings.
ESL Exchange Agreement
Seritage, Operating Partnershipthe OP and ESL entered into an exchange agreement (the “ESL Exchange Agreement”), dated as of June 26, 2015, pursuant to which ESL exchanged subscription rights that, if exercised, would have resulted in ESL receiving in excess of 3.1% of the Seritage common shares of beneficial interest of Seritage, together with an amount of cash equal to the aggregate amount ESL would have paid had it exercised such subscription rights in the rights offering plus the value of the Seritage non-economic shares, for Seritage non-economic shares having 5.4% of the voting power of Seritage but not entitled to dividends or distributions and Operating Partnership units.Units (“OP Units”). Pursuant to the ESL which holds all of the Seritage non-economic shares, has agreed with us thatExchange Agreement, upon any sale or other transfer to a non-affiliate of any of its Operating Partnership units, it willOP Units, ESL had agreed to surrender to Seritage a pro rata portion of the Seritage non-economic shares that it holdsheld prior to the sale or other transfer, whereupon the surrendered Seritage non-economic shares willwould be cancelled and the aggregate voting power of ESL in Seritage willwould be proportionately reduced.
Amended and Restated Limited Partnership Agreement of Operating Partnershipthe OP
The partnership agreement of Operating Partnership, as amended and restated, provides holders of Operating Partnership units (other than SeritageUntil July 6, 2022, Mr. Lampert and entities controlled by it) approval rights over certain modificationsMr. Lampert were each a party to the partnership agreement withdrawal or succession of Seritage as general partner of Operating Partnership, tax elections and certain other matters at all
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times. Because ESL currently owns a majority of the outstanding Operating Partnership units not held by SeritageOP, at which time Mr. Lampert and the entities controlled by it, ESL’s approval will be required in order for the general partner to undertake such actions unless ESL no longer owns a majority of such units. In addition, ESL has the right to acquire additional Operating Partnership units to allow it to maintain its relative ownershipMr. Lampert exchanged their entire equity interest in Operating Partnership if Operating Partnership issues additional units to Seritage.
In addition,the OP for Class A Shares of Seritage in accordance with the terms of the partnership agreement of Operating Partnership provides holders of Operating Partnership units (other than Seritage and entities controlled by it) the right to cause Operating Partnership to redeem each of their Operating Partnership units in exchange for cash or, at the election of Seritage, common shares of Seritage on a one-for-one basis. The partnership agreement of Operating Partnership also permits ESL to transfer its Operating Partnership units to one or more underwriters to be exchanged for Seritage common shares in connection with certain dispositions in order to achieve the same effect as would occur if ESL were to exchange its Operating Partnership units for Seritage common shares, which may be limited under the ownership restrictions set forth in the Seritage declaration of trust, and then dispose of those shares in an underwritten offering. As of December 31, 2020, the Company held a 69.6% interest in the Operating Partnership and ESL held a 30.4% interest. The portions of consolidated entities not owned by the Company are presented as non-controlling interest as of and during the period presented.OP.
Registration Rights Agreement with ESL
We entered into a registration rights agreement with ESL (the “Registration Rights Agreement”), dated July 7, 2015. The Registration Rights Agreement provides for, among other things, demand registration rights and piggyback registration rights for ESL. Pursuant to the Registration Rights Agreement and the partnership agreement of Operating Partnership, if ESL proposes to engage in an offering, it may transfer Operating Partnership units to an underwriter to be exchanged for Seritage common shares before they are sold in the offering. We are also required to indemnify ESL against losses suffered by it or certain other persons based upon any untrue statement or alleged untrue statement of any material fact contained in any registration
statement, related prospectus, preliminary prospectus or free writing prospectus, or the omission or alleged omission to state therein a material fact required to be stated therein, necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, except to the extent based upon information furnished in writing by ESL specifically for use therein.
AsIn connection with the receipt of April 5,a demand notice pursuant to the Registration Rights Agreement, we filed a registration statement on Form S-3 with the SEC on November 30, 2021 ESL owns approximately 9.1%to register the offering and resale of the outstanding16,428,149 of our Class A Shares. For additional information, seeShares by ESL.
Our Relationship with Winthrop Capital Advisors, LLC and John Garilli
On January 7, 2022, we announced that John Garilli had been appointed Interim Chief Financial Officer on a full-time basis, effective January 14, 2022. Mr. Garilli has been a member of Winthrop Capital Advisors, LLC and its affiliates (“Winthrop”) since 1995, currently serving as President and Chief Operating Officer. Previously, Mr. Garilli served as Chief Accounting Officer of Winthrop Realty Trust, a NYSE-listed real estate investment trust, from 2006 to 2012 and served as Winthrop Realty Trust's Chief Financial Officer from 2012 until 2016. We and Winthrop are parties to an existing agreement, pursuant to which Winthrop provides us with comprehensive property management services and property accounting support as well as the “Amountservices of Mr. Garilli and Natureother Winthrop executives. In exchange for these services, in 2023 we expect to pay Winthrop a fee equal to $108,333 per month, plus reimbursement for the salaries, bonuses and benefits for certain employees of Beneficial Ownership” section of this Proxy Statement.Winthrop, other than Mr. Garilli and other Winthrop executives, who devote time to us.
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Item 1 is the election of three Class IIIseven trustee nominees to our Board. If elected, the threeseven nominees will serve until the 2024 annual meeting of shareholders and until their successors are duly elected and qualify. The proxies will vote FORthe election of all of the nominees listed below, unless otherwise instructed. All Class I and II trustees will continue in office until the expiration of their terms at the 2022 and 20232024 annual meeting of shareholders, respectively.shareholders.
The affirmative vote of at least two-thirds of all the votes cast (i.e., voted “for” or “against”) at a meeting of shareholders at which a quorum is present is required to elect a trustee. In the event that an incumbent trustee does not receive a sufficient percentage of votes entitled to be cast for election, he or she will continue to serve on the Board until a successor is duly elected and qualified.qualifies. Cumulative voting is not permitted.
The number of trustees constituting the entire Board is currently fixed at seven. Our declaration of trust provides that ourThe trustees are divided into three classes. One class of trustees is elected at each annual meeting of shareholders to serve until the third succeeding annual meeting of shareholders and until their respective successors have been duly elected and qualify.
The Board expects each nominee to be available for election. If any nominee should become unavailable to serve as a trustee for any reason prior to the Annual Meeting, the Board may substitute another person as a nominee. In that case, your shares will be voted for that other person.
THE BOARD RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE THREESEVEN NOMINEES FOR TRUSTEE.
The biographies of each of the nominees below contain information regarding the nominee’s service as a trustee, business experience, trustee or director positions held currently or at any time during the last five years, information regarding involvement in certain legal or administrative proceedings, if applicable, and the experiences, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board to determine that the person should serve as a trustee for the Company.
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The Board has nominated the following trustees for re-election as Class III trustees for three-yearone-year terms expiring at the 2024 annual meeting of shareholders:
Edward S. Lampert
John T. McClain
Trustee since 2015
Edward S. Lampert, age 58, currently serves as the Chairman and Chief Executive Officer of ESL, which he founded in April 1988, and the Chief Executive Officer of Transform Holdco LLC. Mr. Lampert previously served as the Chairman and Chief Executive Officer of Sears Holdings until October 2018. Sears Holdings and certain of its affiliates filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code with the Bankruptcy Court in October 2018. Mr. Lampert also served on the board of AutoNation from 2002 to 2007 and AutoZone, Inc. from 1999 to 2006. Mr. Lampert has extensive experience in business and finance, and he has invested in many retail companies, which qualifies him to serve as a trustee of the Company.
John T. McClainTrustee since 2015
John T. McClain, age 60,62, currently serves as the Chief Financial Officer of Iconix Brand Group, a brand management company. Previously, Mr. McClain served as the Chief Financial Officer of Lindblad Expeditions Holdings, Inc., an expedition travel company. Mr. McClain also served as the Chief Financial Officer of the Jones Group Inc., a leading global designer, marketer and wholesaler of over 25 brands, from July 2007 until its sale to Sycamore Partners in April 2014. Prior to that, Mr. McClain held a number of roles at Avis Budget Group, Inc., formerly Cendant Corporation. He joined Cendant Corporation in September 1999, serving as the Senior Vice President, Finance & Corporate Controller until 2006. From 2006 to 2007, Mr. McClain served as the Chief Accounting Officer of Avis and Chief Operating Officer of Cendant Finance Holdings. Mr. McClain previously held leadership roles at Sirius Satellite Radio Inc. and ITT Corporation. Mr. McClain also serves on the Board of Directors of Lands’ End, Inc., where he is chair of the Audit Committee, and previously served on the Board of Directors of Cherokee Global Brands Inc., where he was the chair of the Audit Committee. Mr. McClain has over 25 years of executive financial experience, serving at high-level capacities for the retail and consumer sectors, which qualifies him to serve as a trustee of the Company.
Allison L. Thrush
Adam Metz
Trustee since 2022
Adam Metz, age 61, currently serves as a non-executive director of Hammerson plc, a United Kingdom-based real estate investment trust, since July 2019,
Allison L. Thrush, 57, previously four business development companies advised by MS Capital Partners Adviser Inc., a wholly owned subsidiary of Morgan Stanley, beginning in October 2019, and Galata Acquisition Corporation, since July 2021. Mr. Metz served as a managing directorManaging Director and head of Fortress InvestmentInternational Real Estate at Carlyle Group LLC, where she was responsible for capital formation and investor relations for the firm's private equity business. Her responsibilities included fund structuring, fundraising, and negotiation of the firm's private equity investment partnerships, investor relations and client services, oversight of various advisory boards, and special projects relatingfrom September 2013 to matters such as restructurings, recapitalizations and IPOs.April 2018. Prior to joining Fortress in 2001, Ms. Thrush directed a portfolio of opportunistic real estate and private equity investments for the New York State Common Retirement Fund. PriorCarlyle Group, Mr. Metz was Senior Advisor to that, she worked for the New York State Urban Development
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Corporation and Coopers & Lybrand, now PricewaterhouseCoopers. Ms. Thrush’s experience in business, investment and real estate qualify her to serve as a trustee of the Company.
The following Class I trustees’ terms will continue until the 2022 annual meeting of shareholders:
David S. FawerTrustee since 2015
David S. Fawer, age 52, most recentlyTPG Capital's Real Estate Group. Previously, Mr. Metz served as a Senior Managing Director of Blackstone’s Real Estate Debt Strategies group, where he was a member of the Real Estate Investment Committee for both Blackstone Real Estate Debt Strategies and Blackstone Real Estate Advisors until his resignation in February 2019. Prior to joining Blackstone in 2018, Mr. Fawer served as Vice Chairman of OneWest Bank N.A. from 2009 until August 2015, where he developed and managed all aspects of the commercial real estate businesses. Mr. Fawer has over 25 years of experience in the field of commercial real estate finance, including lending, real estate equity investing, and risk management, which qualifies him to serve as a trustee for the Company.
Thomas M. SteinbergTrustee since 2015
Thomas M. Steinberg, age 64, is the Founder and Chief Executive Officer of TS Partners, an international, diversified investment firm. Prior to this, Mr. Steinberg was President of Tisch Family Interests from 1996 through 2013,General Growth Properties (“GGP”), where he directedled GGP through its restructuring and emergence from bankruptcy. Before joining GGP, Mr. Metz was co-founding partner of Polaris Capital LLC, which partnered with the Blackstone Group on the ownership of a portfolio of retail real estate transactionsassets throughout the United States. Mr. Metz has also held positions at Rodamco, Urban Shopping Centers, JMB Realty and was responsible for managementThe First National Bank of portfolios that included public equity, private equity, debtChicago. Mr. Metz's previous experience serving as an independent director on numerous boards including, Forest City, Parkway Properties and alternative investments. Mr. Steinberg currently serves on the Board of Directors of KGB, Inc., the largest independent directory assistance company in the world. Mr. Steinberg also served on the Board of Directors of Gunther International, a leading producer of intelligent document finishing systems, and as a director of a number of privately held companies including Catellus. Mr. Steinberg has over 30 years of experience in the real estate and investment space, whichHoward Hughes Corporation, well qualifies him to serve as a trustee of the Company.
The following Class II trustees’ terms will continue untilTalya Nevo-Hacohen
Trustee since 2022
Talya Nevo-Hacohen, 63, has served as EVP, Chief Investment Officer and Treasurer of Sabra Health Care REIT, Inc. since 2010. From September 2006 to August 2008 and from February 2009 to November 2010, Ms. Nevo-Hacohen served as an advisor to private real estate developers and operators regarding property acquisitions and dispositions, corporate capitalization, and equity and debt capital raising. Previously, Ms. Nevo-Hacohen was a Managing Director with Cerberus Real Estate Capital Management, LLC. From 2003 to 2006, Ms. Nevo-Hacohen served as Senior Vice President—Capital Markets and Treasurer for HCP, Inc., a healthcare REIT. Prior to her time with HCP, Ms. Nevo-Hacohen spent 10 years with Goldman, Sachs & Co. (“Goldman Sachs”) where she was a Vice President in the 2023 annual meetinginvestment banking and finance, operations and administration divisions. Prior to her affiliation with Goldman Sachs, she practiced architecture and was associated with several architectural firms in New York. Ms. Nevo-Hacohen is a trustee of shareholders:South Coast Repertory and serves on its executive committee, and she also serves on the Board of Advisors of Yale University's Jackson Institute for Global Affairs. Ms. Nevo-Hacohen's experience advising REITs and finance well qualifies her to serve as a trustee of the Company.
Andrea L. Olshan
Trustee since 2021
Ms. Olshan, age 41,43, joined Seritage from Olshan Properties, a privately-heldprivately held real estate firm specializing in the development, acquisition, and management of commercial real estate, where she has served as Chief Executive Officer since 2012. Prior to serving as Chief Executive Officer, Ms. Olshan served as the Chief Operating Officer of Olshan Properties, and was responsible for the entire operating business, portfolio, and joint ventures, including the company’s accounting, construction, capital markets, investments, human resources, and legal departments. Ms. Olshan previously served on the board of directors of Olshan Properties, and will continue to do so as its Chairman. Ms. Olshan is also a director nominee to serve as a director and chair of the Audit Committee of ICG Hypersonic Acquisition Corp., a special purpose acquisition company. Ms.
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Olshan previously served on the board of directors of Morgans Hotel Group from 2013 through 2016, serving on both the Compensation Committee and Audit Committee of its board of directors. Ms. Olshan is actively involved in numerous civic and social service organizations. She is a trustee of the Horace Mann School and a Vice Chair of the board of directors of 92Y. Ms. Olshan’s deep real estate industry and market expertise, as well as her significant experience as the chief executive officer of several large real estate companies, makes her well qualified to serve as a trustee on our board.of the Company.
Sharon OsbergMitchell Sabshon
Trustee since 20182022
Sharon Osberg, ageMr. Sabshon, 71, worked for 25has served as Chief Executive Officer and President of Inland Real Estate Investment Corporation since 2013, where he leads the execution of Inland's long-term business strategy. Mr. Sabshon is also Chief Executive Officer of Inland Real Estate Income Trust, Inc., a publicly registered, non-listed multi-tenant retail REIT since 2014, InPoint Commercial Real Estate Income, Inc., a publicly registered, non-listed commercial mortgage REIT since 2016, and MH Ventures Fund II, Inc., a privately held manufactured housing community REIT since 2021. He previously served as EVP and Chief Operating Officer of Cole Real Estate Investments from 2010 to 2013. Before that, he spent almost 10 years in financial technology developmentat Goldman, Sachs & Co.in various leadership roles, including President and management. The bulkCEO of her career was spent at Wells Fargo Bank, where she became ExecutiveGoldman Sachs Commercial Mortgage Capital. He also served as a Senior Vice President in chargeLehman Brothers real estate investment banking group. Prior to joining Lehman Brothers, Mr. Sabshon was an attorney in the corporate and real estate structured finance practice groups at Skadden, Arps, Slate, Meagher & Flom LLP in New York. Mr. Sabshon's executive experience in real estate well qualifies him to serve as a trustee of the newly created Online Financial Services Division. Ms. OsbergCompany.
Allison L. Thrush
Trustee since 2019
Allison L. Thrush, 59, previously served as a managing director of Fortress Investment Group LLC, where she was responsible for charting Wells Fargo’s internet coursecapital formation and growing its onlineinvestor relations for the firm's private equity business. After leaving Wells FargoHer responsibilities included fund structuring, fundraising, and negotiation of the firm's private equity investment partnerships, investor relations and client services, oversight of various advisory boards, and special projects relating to matters such as restructurings, recapitalizations and IPOs. Prior to joining Fortress in 2001, Ms. Osberg was Chief Operating OfficerThrush directed a portfolio of opportunistic real estate and private equity investments for 724 Solutions, Inc. in Toronto, Canada until her retirement in 2003.the New York State Common Retirement Fund. Prior to that, she worked for the New York State Urban Development Corporation and Coopers & Lybrand, now PricewaterhouseCoopers. Ms. Osberg has held various consulting positions for insurance, banking, and technology companies. She also served on the Board of Directors of The Sequoia Fund beginning in 2003 and held the position of Chairperson from 2013 until her retirement in 2015. She currently serves on the boards of Felidae, a non-profit conservation and research organization, and Orangutan Foundation International, a non-profit conservation organization. Ms. Osberg’sThrush’s experience in financebusiness, investment and as a member of boards, including as Chairperson, qualifiesreal estate qualify her to serve as a trustee of the Company.
22 Mark Wilsmann
Trustee since 2022
Mr. Wilsmann, 63, spent 31 years in real estate with MetLife Investment Management (“Met Life”), including roles in asset management, acquisitions, mortgage lending, portfolio management, regional operations, and merger integration. He most recently served at Met Life as Managing Director and Head of Equity Investments. He assumed this role in 2012 to help build MetLife's $32 billion direct property investment platform, investing on behalf of the MetLife General Account as well as institutional investors including public and private pension funds, sovereign wealth funds, and insurance companies, via co-mingled funds and managed accounts. He also oversaw more than $7 billion in ground up-development investments in apartments, industrial, office, retail, life sciences, data centers, and hotels. Between 2003 and 2012, Mr. Wilsmann led MetLife's commercial mortgage lending business, directing product design, pricing, and origination activities and chairing the investment committee. Mr. Wilsmann's experience in asset management and mortgage lending well qualify him to serve as a trustee of the Company.
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
Security Ownership of Trustees and Management
The following table sets forth information with respect to the beneficial ownership of our Class A Shares, Class B Shares and class C common shares of beneficial interest, par value $0.01 per share (“Class C SharesShares”), as of April 5, 202119, 2023 by:
each of our trustees; |
each named executive officer (as defined under “Summary Compensation Table”); and |
all of our trustees and executive officers as a group. |
Common Shares Class A | Non-Economic Shares Class B | Non-Voting Shares Class C | ||||||||||||||||||||||||||
Name of Beneficial Owner(1)(2) | Number of Shares Beneficially | Number of Shares Beneficially | Number of Shares Beneficially | % of Total Voting | ||||||||||||||||||||||||
Owned | Percent(3) | Owned | Percent | Owned | Percent | Power(4) | ||||||||||||||||||||||
Brian Dickman(5) | 12,983 | * | — | — | — | — | * | |||||||||||||||||||||
Matthew Fernand | 39,815 | * | — | — | — | — | * | |||||||||||||||||||||
Kenneth Lombard | 11,573 | * | — | — | — | — | * | |||||||||||||||||||||
Mary Rottler | 31,220 | * | — | — | — | — | * | |||||||||||||||||||||
Benjamin Schall(5) | 250,822 | * | — | — | — | — | * | |||||||||||||||||||||
David S. Fawer | 12,000 | * | — | — | — | — | * | |||||||||||||||||||||
Edward S. Lampert | 3,873,447 | 9.1%(6) | — | — | — | — | 9.1%(6) | |||||||||||||||||||||
John T. McClain | 2,600 | * | — | — | — | — | * | |||||||||||||||||||||
Sharon Osberg | 4,500 | * | — | — | — | — | * | |||||||||||||||||||||
Thomas M. Steinberg | 23,160 | * | — | — | — | — | * | |||||||||||||||||||||
Allison L. Thrush | 5,450 | * | — | — | — | — | * | |||||||||||||||||||||
Andrea Olshan | 20,734 | * | — | — | — | — | ||||||||||||||||||||||
Amanda Lombard | 386 | * | — | — | — | — | * | |||||||||||||||||||||
All trustees, named executive officers, other executive officers as | ||||||||||||||||||||||||||||
a group (15 persons) | 4,312,823 | 10.1% | — | — | — | — | 10.1% |
Common | Non-Economic | Non-Voting | |||||
Name of Beneficial Owner(1)(2) | Number of Shares Beneficially Owned | Number of Shares Beneficially Owned Percent(3) | Number of Shares Beneficially Owned | Number of Shares Beneficially Percent | Number of Shares Beneficially Owned | Number of Shares Beneficially Owned Percent | % of Total Voting Power(4) |
Andrea L. Olshan | 121,147 | * | — | — | — | — | |
John Garilli | — | — | — | — | — | ||
Matthew Fernand | 49,635 | * | — | — | — | — | * |
Eric Dinenberg | 17,594 | * | — | — | — | — | * |
John T. McClain | 2,600 | * | — | — | — | — | * |
Adam Metz | — | — | — | — | — | ||
Talya Nevo-Hacohen | — | — | — | — | — | ||
Sharon Osberg(5) | 4,500 | * | — | — | — | — | * |
Mitchell Sabshon | — | — | — | — | — | ||
Allison L. Thrush | 5,450 | * | — | — | — | — | * |
Mark Wilsmann | — | * | — | — | — | — | |
All trustees, named executive officers, other executive officers as a group (11 persons) | 200,926 | * | — | — | — | — | * |
* Less than 1%
(1) | The address of each beneficial owner is c/o Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110. |
(2) | Ownership includes: |
● | shares in which the trustee or executive officer may be deemed to have a beneficial interest; and |
● | for executive officers, shares held as restricted stock units that are scheduled to vest within 60 days of April 19, 2023. Unless otherwise indicated, the trustees and executive officers listed in the table have sole voting and investment power with respect to the shares listed next to their respective names. Information is provided for reporting purposes only and should not be construed as an admission of actual beneficial ownership. |
(3) | “Percent of Class” for each named person was calculated by using the disclosed number of shares beneficially owned as the numerator and |
(4) | The “Percent of Total Voting Power” for each named person was calculated by using the disclosed number of beneficially owned Class A Shares as the numerator and 56,171,569 the number of shares of our Class A Shares outstanding as of April 19, 2023 (plus for each named person, the number of common shares not outstanding but for which such person is deemed to have beneficial ownership), as the denominator, while also considering any applicable ownership limitations. No Class B Shares or Class C were outstanding as of April 19, 2023. |
(5) | Sharon Osberg’s term as trustee will expire at the Annual Meeting. Ms. Osberg has notified the Company that she will not stand for reelection at the Annual Meeting. |
Security Ownership of 5% Beneficial Owners
The following table sets forth information with respect to beneficial ownership of our shares of beneficial interest by persons known by us to beneficially own 5% or more of our outstanding common shares as of April 19, 2023.
Common | Non-Economic | Non-Voting | |||||
Name of Beneficial Owner(1) | Number of Shares Beneficially Owned | Number of Shares Beneficially Owned Percent(2) | Owned | Percent | Number of Shares Beneficially Owned | Percent | % of Total Voting Power(3) |
ESL Investments, Inc. and related entities(4) | 15,079,538 | 26.8% | — | — | — | — | 26.8% |
Hotchkis and Wiley Capital Management (5) | 5,531,584 | 9.8% | — | — | — | — | 9.8% |
The Vanguard Group and related entities(6) | 4,314,033 | 7.7% | — | — | — | — | 7.7% |
Thomas J. Tisch(7) | 2,917,575 | 5.2% | — | — | — | — | 5.2% |
(1) | Information is provided for reporting purposes only and should not be construed as an admission of actual beneficial ownership. |
(2) | “Percent of Class” for each named person was calculated by using the disclosed number of beneficially owned shares as the numerator and 56,171,569, the number of our Class A Shares outstanding as of April 19, 2023 (plus for each named person, the number of common shares not outstanding but for which such person is deemed to have beneficial ownership), as the denominator. |
(3) | The “Percent of Total Voting Power” for each named person was calculated by using the disclosed number of beneficially owned shares as the numerator and |
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Security Ownership of 5% Beneficial Owners
The following table sets forth information with respect to beneficial ownership of our shares of beneficial interest by persons known by us to beneficially own 5% or more of our outstanding common shares as of April 5, 2021.
Common Shares Class A | Non-Economic Shares Class B | Non-Voting Shares Class C | ||||||||||||||||||||||||||
Name of Beneficial Owner | Number of Beneficially Owned(1) | Percent(2) | Number of | Percent | Number of | Percent | % of Total | |||||||||||||||||||||
Dalal Street, LLC and related entities(4) | 5,020,684 | 11.7% | — | — | — | — | 11.7% | |||||||||||||||||||||
The Vanguard Group and related entities(5) | 4,373,055 | 10.2% | — | — | — | — | 10.2% | |||||||||||||||||||||
Hotchkis and Wiley Capital Management, LLC(6) | 4,167,061 | 9.7% | — | — | — | — | 9.7% | |||||||||||||||||||||
ESL Investments, Inc. | ||||||||||||||||||||||||||||
and related entities(7) | ||||||||||||||||||||||||||||
3,873,447 | 9.1% | — | — | — | — | 9.1% | ||||||||||||||||||||||
BlackRock Inc. and related entities(8) | 2,897,400 | 6.8% | — | — | — | — | 6.8% | |||||||||||||||||||||
Thomas J. Tisch(9) | 2,757,634 | 6.5% | — | — | — | — | 6.5% |
(4) |
(6) Beneficial ownership is based on ownership as set forth in the Schedule 13G filed by Hotchkis and Wiley Capital Management, LLC with the SEC on February 11, 2021. The address for Hotchkis and Wiley Capital Management, LLC is 725 S. Figueroa Street 39th Floor, Los Angeles, CA 90017.
Beneficial ownership is based on ownership as set forth in the Schedule 13D filed by ESL Partners, L.P., RBS Partners, L.P., ESL Investments, Inc. |
Beneficial ownership is based on ownership as set forth in the Schedule 13G filed by |
Beneficial ownership is based on ownership as set forth in the Schedule 13G filed by The Vanguard Group with the SEC on February 9, 2023. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(7) | Beneficial ownership is based on ownership as set forth in the Schedule 13G filed by Thomas J. Tisch on |
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EXECUTIVE OFFICERS
The following table sets forth information regarding the individuals who serve as executive officers of Seritage, together with their biographical information.
Name | Age | Position | ||
Andrea L. Olshan | Chief Executive Officer and President, Trustee | |||
Interim Chief Financial Officer | ||||
Chief Operating Officer | ||||
Matthew Fernand | ||||
Andrea Olshan. See Item 1 — “Election of Trustees - The following Class II trustees’ terms will continue until the 2023 annual meeting of shareholders” for Ms. Olshan’s biographical information.
Amanda Lombard,L. Olshan serves as the Chief Executive Officer, President and Trustee of Seritage. Prior to Seritage, Ms. Olshan served as Chief Executive Officer of Olshan Properties from 2012 to 2021 and was responsible for the strategic direction of Olshan Properties, its investment activities, capital partnerships and the P&L of both the portfolio and the operating company. Through her membership in the Olshan Properties Investment Committee, Ms. Olshan evaluated all new investment opportunities and represented Olshan Properties in its third-party investments. She now serves as Chair of Olshan Properties' Board of Directors. Ms. Olshan also served on the board of Morgans Hotel Group, chairing the compensation committee where she led a corporate restructuring inclusive of the C-suite that reduced overhead and realigned its performance-vested compensation program.
John Garilli serves as the Interim Chief Financial Officer and Executive Vice President of Seritage. Ms. Lombard was previouslyMr. Garilli has been a member of Winthrop Capital Advisors LLC and its affiliates since 1995, currently serving as President and COO. Mr. Garilli currently serves as Interim President and CEO of Luby's, Inc., a national restaurant company operating the Company’sLuby's Cafeterias and Fuddruckers brands, since February 2021 and will continue to serve in that role in the near-term. Mr. Garilli has served as CEO, President, CFO, Treasurer, and Secretary of New York REIT Liquidating LLC since 2018. Prior to this, he served as the CEO of its predecessor, New York REIT, Inc. (“NYRT”), a NYSE-listed real estate investment trust, from July 2018 to November 2018, and as CFO, Secretary, and Treasurer of NYRT beginning in 2017. Previously, Mr. Garilli served as Chief Accounting Officer of Winthrop Realty Trust, a NYSE-listed real estate investment trust, from November 2018. Ms. Lombard previously held multiple roles at Gramercy Property Trust, including Chief Accounting Officer2006 to 2012 and served as Winthrop Realty Trust's CFO from April 2018 to October 2018, Senior Vice President, Corporate Controller from December 2015 to April 2018 and Assistant Corporate Controller and Vice President, Financial Reporting from July 2012 to December 2015. Ms. Lombard began her career at PricewaterhouseCoopers LLP in the assurance practice focusing on private equity and hedge funds.until 2016.
Kenneth T. LombardMatthew Fernand , serves as the Chief OperatingLegal Officer and Executive Vice President of Seritage and is responsible for overseeing the Company’s west coast business, managing joint venture relationship, and executing the Company’s business strategies. Mr. Lombard previously served on the Seritage Board of Trustees since the Company’s inception and, in connection with his acceptance of the Seritage Chief Operating Officer position, Mr. Lombard resigned as a Trustee, effective May 16, 2018. Before the commencement of his management role at Seritage, Mr. Lombard held the position, beginning in 2016, of President of MacFarlane Partners, responsible for its real estate investment management business. He served on that firm’s investment and senior management committees, and assisted with its real estate development business. Previously, Mr. Lombard served as Vice Chairman, Head of Investments and Partner for Capri Investment Group, LLC, and was a member of Capri’s investment committee. From 2004 to 2008, he served as President of Starbucks Entertainment and helped launch Johnson Development Corporation in 1992, where he spent 12 years as the President and Partner.
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Matthew Fernand serves as the General Counsel, Executive Vice President andCorporate Secretary of Seritage and is responsible for overseeing all legal compliance, litigation and transactional matters and human resources. Prior to joining Seritage, Mr. Fernand was a partner in Sidley Austin LLP’sLLP's Real Estate Group, where he practiced from 2005 to 2015 and focused on the financing, development acquisition and disposition, and leasing of commercial properties and the formation of real estate joint ventures and partnerships.
James BryEric Dinenberg serves as the Chief Operating Officer, a position he has held since December 2021. Prior to that, Mr. Dinenberg served as the Company's Executive Vice President of Development & Construction from April 2021 to December 2021, and as the Company's Senior Vice President of Mixed Use and Premier Properties since 2019. Prior to joining Seritage, Mr. Dinenberg served as Executive Vice President of Development and ConstructionOperations at Brookfield Properties, overseeing all aspects of Seritage and is responsible for overseeing the Company’s development and construction, activities. Prior to joining Seritage,new investments, and day-to-day operations. Preceding Brookfield, Mr. Bry was the Senior Vice President,Dinenberg led Development and ConstructionOperations efforts at Vornado Realty Trust from 2006 to 2015, where he oversaw development and redevelopment of approximately six million square feet of its shopping malls, community centers and urban retail properties.
Mary Rottler serves as the Executive Vice President of Leasing and Operations of Seritage and is responsible for overseeing the Company’s leasing activities as well as certain internal and external operational functions. Prior to joining Seritage, Ms. Rottler served as the Vice President of Real Estate at Wal-Mart Stores, Inc. In this capacity, she was responsible for overseeing all facets of new store development in the eastern half of the United States. Prior to that time, she was the Vice President for Realty Supplier Management and Compliance at Wal-Mart. She joined Wal-Mart in 2001.
Andrew Galvin serves as the Executive Vice President of Investments of Seritage and is responsible for developing and executing asset-level investment strategies to maximize real estate value, including forming development and equity joint ventures, as well as overseeing dispositions and acquisitions. Prior to joining Seritage, he served as Executive Vice President, Chief Investment Officer at Centennial, a private national retail real estate operator, from 2016 to 2018. He previously held leadership investment positions at Trademark Property Group, Rouse Properties, and General Growth Properties.Trust.
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COMPENSATION DISCUSSION AND ANALYSIS
Overview
The following discussion is intended to supplement the detailed information about executive compensation that appears in the following tables and accompanying narrative. It is also intended to provide insight into Seritage’s compensation philosophy and policies applicable to the determination of 20202022 compensation for our named executive officers (“NEOs”). Our NEOs for the fiscal year ended December 31, 20202022 include:
Benjamin Schall -
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Andrea L. Olshan | Chief Executive Officer and President | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
John Garilli | Interim Chief Financial Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Matthew Fernand | Chief Legal Officer and Corporate Secretary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric Dinenberg | Chief Operating Officer | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amanda Lombard(1) | Former
Executive Summary In
Compensation Philosophy The 2022 executive compensation program at Seritage was designed to retain and motivate
process.
At the shareholder meeting held on
Elements of Compensation and Objectives In addition to providing executives with standard employee benefits, in 2022 the Company’s executive compensation program
Each of our NEOs (other than Mr. Garilli) is party to an employment or letter agreement Base Salary The annual base salaries for our NEOs Annual Cash Bonus Opportunity In March 2022, while the Company was reviewing its operational strategic alternatives, the Compensation Committee approved the 2022 annual cash bonus program, which provided that eligible employees who are actively employed on the payment date would receive a bonus in respect of 2022 in an amount equal to the employee’s target annual cash bonus incentive and that there would be no performance metrics applicable to the 2022 annual cash bonus program. This determination was made in light of the The target annual cash bonus incentives included in the following table were paid to the NEOs on March 15, 2023. Mr. Garilli and Ms. Lombard were not eligible for annual cash bonus opportunities in 2022.
In March 2023, the Compensation Committee determined that the 2023 annual cash bonus program would follow the same approach as the 2022 annual cash bonus program. Accordingly, eligible employees who are actively employed on the payment date will receive a bonus in respect of 2023 in an amount equal to the employee’s target annual cash bonus incentive, and no performance metrics will apply to the 2023 annual cash bonus program. Retention Bonuses Opportunities In March The retention bonuses were granted to Messrs. Fernand and Dinenberg in recognition of the contributions that
Mr. Fernand and
Annual Long-Term Equity Awards
Annual Long-Term Awards Granted in 2023. In March 2022, the Compensation Committee also determined that awards granted in 2023 and in subsequent years will be comprised of cash awards, in lieu of any further equity awards, with the cash awards to
Clawback Policy The Company continues to maintain its incentive compensation clawback policy, which was adopted by the Compensation Committee in March 2018. The policy allows the Company to recoup certain compensation paid to a current or former named executive officer or other persons covered by the policy, if the Company is required to undertake a material restatement (occurring after the effective date of the clawback policy) of its financial statements that have been filed with the SEC. Compensation that may be recoverable includes incentive-based cash compensation, equity compensation, and equity-based compensation (including stock options, restricted stock, RSUs, or other forms of incentive awards) received by that employee during the three-year period preceding the publication of the restated financial statements that
Retirement and Employee Benefit Programs
Other benefits and Section 162(m) Considerations Under Section 162(m) of the Under current regulations, a real estate investment trust
on its compensation arrangements, it is only one of many factors, and it is anticipated that the Compensation Committee will, in its discretion and when it deems appropriate, enter into compensation arrangements with those employees considered “covered employees” that may result in payments that are not fully deductible as compensation expenses under Section 162(m).
Change in Control and Termination Arrangements The Employment Agreements include terms that provide the NEOs with certain severance benefits in the event of a termination initiated by the Company without The Compensation Committee (the “Compensation Committee”) of the Board of Trustees (the “Board of Trustees”) of Seritage Growth Properties has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Trustees that the Compensation Discussion and Analysis be included in this Proxy Statement.
COMPENSATION OF EXECUTIVE OFFICERS AND TRUSTEES Summary Compensation Table for the Fiscal Year ended December 31, The following table summarizes the compensation of our NEOs for the fiscal years ended December 31,
Grants of Plan-Based Awards in For more information about our annual
2022. Mr. Garilli and Ms. Lombard are not included in the following table because neither NEO received grants of plan-based awards in 2022.
Narrative Disclosure to Summary Compensation Table Employment Agreements
Matthew Fernand
In addition, the Employment Agreement provides that Mr. Fernand will be entitled to receive the following retention bonus payments on the following dates: (i) $199,218.75 on July 15, 2022 and
Mr. Dinenberg’s agreement provides for an annual base salary
In addition, the Employment Agreement provides that Mr. Dinenberg will be entitled to receive the following retention bonus payments on the following dates: (i) $187,500 on July 15, 2022 and Amanda Lombard Ms. Lombard and
Outstanding Equity Awards at Fiscal Year-End The following table sets forth the outstanding equity awards held by our NEOs at December 31,
The following table provides information about restricted stock and RSUs that vested during
Potential Payments Upon Termination or Change in Control
Termination due to Death or Disability. Upon a termination of employment due to death or disability, performance for any outstanding performance-based vesting equity awards Termination without Cause; Resignation with Good Reason.
Change in Control.
full, with any performance-based vesting RSUs vesting based on actual performance. In the event that payments or benefits owed to Restrictive Covenants. Forfeiture Provisions. If
Termination due to Death or Disability. Upon a termination of employment due to death or disability, Mr. Fernand is entitled to Termination Without Cause; Resignation with Good Reason. Upon a termination by Seritage without 15, 2022), he will be entitled to receive, subject to his execution of a general release of claims against the Company, (1) the unpaid portion of his retention bonuses, (2) the total amount of his base salary that would have been payable during the remaining portion of the 24-month retention period, and Restrictive Covenants. During his employment with Seritage and for 12 months thereafter, Mr. Fernand is subject to non-competition and non-solicitation covenants, as well as a perpetual confidentiality covenant, each set forth in his Employment Agreement.
Eric Dinenberg Termination
Restrictive Covenants. During Equity Treatment. Treatment of outstanding RSUs held by Mr. Dinenberg in the event of a termination without Cause or resignation for Good Reason is governed by Board action taken in March 2022. The Board approved that, in the event of such terminations, all of Mr. Dinenberg’s outstanding time-based vesting RSUs would vest in full and performance-based vesting RSUs would vest pro rata based on the time elapsed during the performance period, with actual performance being measured at the time of the effective date of the termination event. Amanda Lombard Due to Ms. Lombard’s resignation on January 14, 2022 without Good Reason (as defined in her Employment
for any reason other than cause (as such term is defined in and determined under the applicable individual award agreement) or on account of an award holder’s resignation for good reason (if an individual award agreement contains a definition of good reason).
The treatment of
Quantification of Potential Termination and Change in Control Payments and Benefits The table below calculates the payments and benefits described above for the various termination scenarios and in the event of a change in control, assuming the termination event (or change in control event) occurred on December 31,
Compensation Program-Related Risk Assessment
Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, For fiscal year To determine our median employee, we reviewed the total cash compensation (i.e., base salary plus bonus) paid in After identifying our median employee using the methodology described above, we calculated annual total compensation for this employee using the same methodology we use for our NEOs in the Summary Compensation Table set forth in this Proxy Statement. The Company chose to recalculate its median employee for We believe the foregoing pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules, which permit the use of estimates, assumptions, and adjustments in connection with the identification of our median employee. Because the applicable SEC rules permit companies to adopt a variety of methodologies and exclusions and to make reasonable
estimates and assumptions based on the particular compensation practices of such companies, the pay ratio reported by other companies, even those in a similar business, may not be comparable to the one we report above. Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive “compensation actually paid” and certain measures of the Company’s financial performance. For further information concerning the Company’s pay-for-performance philosophy and how our Compensation Committee aligns executive compensation with the Company’s performance, refer to the section of this Proxy Statement entitled “Compensation Discussion and Analysis.” The Compensation Committee did not consider the compensation actually paid measure below in making its compensation decisions for any of the years shown below given the timing of the new required disclosure. The tabular and narrative disclosures provided below are intended to be calculated in a manner consistent with the applicable SEC rules and may reflect reasonable estimates and assumptions where appropriate. Pay Versus Performance Table The following table provides information required under the SEC’s Item 402(v) of Regulation S-K disclosing (i) a measure of total compensation (calculated in the same manner as compensation is calculated for purposes of the Summary Compensation Table) for our principal executive officers (“PEOs”) and, as an average, for our other named executive officers (“Non-PEO NEOs”), (ii) a measure of compensation referred to as “compensation actually paid” (calculated in accordance with Item 402(v) of Regulation S-K) for our PEOs and, as an average, for our other Non-PEO NEOs, and (iii) certain financial performance measures, in each case, for our three most recently completed fiscal years. As discussed below under “Financial Performance Measures,” the Company did not use financial performance measures in 2022 to link compensation actually paid to the Company’s performance. As a result, the following table does not an additional financial performance measure selected by the Company.
Analysis of the Information Presented in the Pay Versus Performance Table In accordance with Item 402(v) of Regulation S-K, the Company is providing the descriptions below of the relationships between information presented in the Pay Versus Performance Table. The financial performance measures presented in the Pay Versus Performance Table are not used by the Company to make compensation decisions. Therefore, the information presented in the Pay Versus Performance Table and the outcomes of the analysis below are not reflective of our executive compensation program or philosophy. For more information regarding the elements of our executive compensation program and, in particular, our pay mix, please refer to the section of this Proxy Statement entitled “Compensation Discussion and Analysis.” Compensation Actually Paid and Cumulative TSR The decline in amount of compensation actually paid to Ms. Olshan over the two years of her employment with us (2021-2022) and the decline in average amount of compensation actually paid to the Non-PEO NEOs over the same period is generally aligned with the Company’s cumulative TSR over the same period. The alignment of compensation actually paid with the Company’s cumulative TSR over this period is because a significant portion of the compensation actually paid to Ms. Olshan and to the Non-PEO NEOs was comprised of equity awards and the Company’s trading price during this period reflected a modest decline. The negative compensation actually paid to Mr. Schall from 2020 to 2021 (until his departure on January 22, 2021) is reflective of the fact that most of his compensation actually paid during this period was comprised of his outstanding equity awards. Due to the outbreak of the COVID-19 pandemic, the Company’s trading price dropped significantly from where it was trading at the end of 2019, resulting in a large decrease in the value of Mr. Schall’s outstanding equity awards and a corresponding decrease in the compensation actually paid to him in 2020. Mr. Schall’s negative compensation actually paid in 2021 is reflective of the fact that he forfeited all of his outstanding equity awards in connection with his departure in January 2021. The average amount of compensation actually paid to the Non-PEO NEOs, which reflects an upward trend from 2020 to 2021 that is inverse to the slightly negative trend of our cumulative TSR during the same period, is attributable (i) to the fact that a significant portion of the compensation actually paid to the Non-PEO NEOs was comprised of outstanding equity awards, (ii) the Non-PEO NEOs received significantly lower annual cash bonus payouts in 2020 and (iii) the annual bonus program normalized in 2021. Like Mr. Schall, the average compensation actually paid to the Non-PEO NEOs in 2020 reflects the sharp decrease in the value of our stock in 2020 compared to its value at the end of 2019 (coincident with the outbreak of the COVID-19 pandemic), resulting in a large decrease in the value of their outstanding equity awards and a corresponding decrease in the average compensation actually paid to them in 2020. The average compensation actually paid to the Non-PEO NEOs in 2021 reflects the moderation in value of our stock price from the end of 2020 to the end of 2021 and their receipt of 2021 annual bonuses that were generally consistent with pre-pandemic amounts after receiving significantly lower payouts in 2020. Compensation Actually Paid and Net Income (Loss) The Company does not use net income (loss) as a performance measure in its executive compensation program because it is neither a reliable indication of our Company’s performance nor an effective measure of long-term value creation for our Company. Therefore, even though the amount of compensation actually paid to our PEOs and the average amount of compensation actually paid to the Non-PEO NEOs was generally aligned with the Company’s net income (loss) over the three years presented in the Pay Versus Performance Table, we do not view our net income (loss) results as having a relationship to our executive compensation program. Cumulative TSR of the Company and Cumulative TSR of the Peer Group The Company’s cumulative TSR over the three-year period presented in the Pay Versus Performance Table was negative 70%, while the cumulative TSR of the peer group presented for this purpose, the MSCI US REIT Index, was negative 10% over the three years presented in the table. Based on an initial $100 investment, the Company’s cumulative TSR underperformed the index in each of 2020, 2021 and 2022. Financial Performance Measures As described in greater detail in the section of this Proxy Statement entitled “Compensation Discussion and Analysis,” the Company’s executive compensation program reflects our focus on executing our strategic goals in connection with implementation of the Plan of Sale, which necessitated redesigning our executive compensation program in 2022. Specifically, our redesigned annual cash bonus program provided that each eligible executive would receive a bonus in an amount equal to the executive’s target annual cash bonus incentive, subject to the executive’s continued employment through the bonus payment date, and further provided that there would be no performance measures applicable in 2022. In addition, rather than granting executives a mix of time-based vesting and performance-based vesting RSUs as we have in the past, our redesigned annual equity award program was comprised entirely of time-based vesting RSUs, which will vest ratably over a period of three years. Our other elements of executive compensation, including base salary and employee benefits, are also not linked to financial performance measures. As a result, our 2022 executive compensation program did not use financial performance measures to link compensation actually paid to the Company’s performance. As a result, we have not included a tabular list of financial performance measures in this disclosure. COMPENSATION OF TRUSTEES Seritage provides its non-employee trustees an annual cash retainer in the amount of $100,000 for serving as a trustee of Seritage and an annual cash retainer in the amount of $15,000 for trustees who serve as the chairperson of the Audit Committee or the Compensation Committee. The annual cash retainer amount is typically paid on a quarterly basis. In addition, The following table reflects the portion of the annual cash retainer earned for
ITEM 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Item 2 is the ratification of the Audit Committee’s appointment of Deloitte & Touche LLP (“Deloitte”) as the independent registered public accounting firm to audit the financial statements of the Company for fiscal year THE BOARD RECOMMENDS A VOTE “FOR” THE PROPOSAL TO RATIFY THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR Independent Registered Public Accounting Firm Fees The following table shows the fees paid or accrued by the Company and its subsidiaries for the audit and other services provided by Deloitte, the member firms of Deloitte Touche Tohmatsu and their respective affiliates, during the fiscal year
The Audit Committee must pre-approve all services of our independent registered public accounting firm as required by its charter and the rules of the SEC. Each fiscal year, the Audit Committee approves an annual estimate of fees for services, taking into account whether the services are permissible under applicable law and the possible impact of each non-audit service on the independent registered public accounting firm’s independence from management. The Audit Committee reviews and discusses with the independent auditor any documentation supplied by the independent auditor as to the nature and scope of any tax services to be approved, as well as the potential effects of the provision of such services on the independent auditor’s independence. In addition, the Audit Committee will evaluate known potential services of the independent registered public accounting firm, including the scope of the proposed work to be performed and the proposed fees, and approve or reject each service. Management may present additional services for approval at subsequent committee meetings.
All of the audit, audit-related and tax services provided by Deloitte, the member firms of Deloitte Touche Tohmatsu and their respective affiliates, were pre-approved in accordance with the Audit Committee’s policies and procedures. REPORT OF THE AUDIT COMMITTEE The purpose of the Audit Committee Management is responsible for the financial reporting process, including the system of internal controls, and for the preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). The Company’s independent registered public accounting firm is responsible for auditing these financial statements and expressing an opinion as to their conformity to GAAP. The Audit Committee’s responsibility is to monitor and review these processes, acting in an oversight capacity, and the Audit Committee does not certify the financial statements or guarantee the independent registered public accounting firm’s report. The Audit Committee relies, without independent verification, on the information provided to it, including representations made by management and the independent registered public accounting firm, including its audit report. The Audit Committee discussed with Deloitte & Touche LLP (“Deloitte”), the Company’s independent registered public accounting firm, the matters required to be discussed by the Statement on Auditing Standards No. 1301, as amended (AICPA, Professional Standards, Vol. 1, AU section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The Audit Committee has received the written disclosures and the letter from Deloitte required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte’s communications with the Audit Committee concerning independence, and has discussed with Deloitte its independence. The Audit Committee reviewed and discussed the audited financial statements of Seritage Growth Properties for the fiscal year ended December 31, Audit Committee John T. McClain, Chairman Adam Metz Allison L. Thrush
ITEM 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION
This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Company’s named executive officers and the philosophy, policies, and practices described in this Proxy Statement. The compensation of the Company’s named executive officers subject to the Statement. As
The Board strongly endorses the RESOLVED, that the compensation paid to the Because the vote is advisory, it is not binding on our Board, the Compensation Committee, or the Company. Nevertheless, the views expressed by the shareholders, whether through this vote or otherwise, are important to management and the Board and, accordingly, the Board and the Compensation Committee intend to consider the results of this vote in making determinations in the future regarding our executive compensation program and arrangements. Advisory approval of this proposal requires the vote of the holders of a majority of votes cast (i.e., voted “for” or “against”) in person or represented by proxy at the Annual Meeting. Unless the Board decides to modify its policy regarding the frequency of soliciting say-on-pay votes (including in response to the results of Proposal No. 4), the next scheduled say-on-pay vote will be held at the 2024 annual meeting of shareholders. THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR” PROPOSAL NO. 3 TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION PAID TO OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED PURSUANT TO THE SEC’S COMPENSATION DISCLOSURE RULES. Table of Contents ITEM 4. ADVISORY VOTE ON THE FREQUENCY OF ADVISORY VOTES ON EXECUTIVE COMPENSATION The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act enable the Company’s shareholders, at least once every six years, to indicate their preference regarding how frequently we should solicit a non-binding advisory vote on the compensation of our named executive officers as disclosed in this Proxy Statement. Accordingly, we are asking our shareholders to indicate whether they would prefer an advisory vote every one year, two years, or three years. Alternatively, shareholders may abstain from casting a vote. After considering the benefits and consequences of each alternative, the Board recommends that the advisory vote on the compensation of our named executive officers be submitted to our shareholders every “One Year.” The Board believes that an annual advisory vote on the compensation of our named executive officers is the most appropriate policy for us at this time. The Board recognizes that executive compensation disclosures are made annually and holding an annual advisory vote on the compensation of our named executive officers provides us with direct and immediate feedback on our executive compensation program, policies, and disclosures. However, shareholders should note that because the advisory vote occurs well after the beginning of the compensation year, and because the different elements of our executive compensation programs are designed to operate in an integrated manner and to complement one another, in many cases, it may not be appropriate or feasible to change our compensation plans and arrangements for our executive officers in consideration of any single year’s advisory vote by the time of the following year’s annual meeting. We believe that an annual advisory vote on the compensation of our named executive officers is consistent with our practice of seeking input and engaging in dialogue with our shareholders on corporate governance matters. Accordingly, the Board is asking our shareholders to indicate their preferred voting frequency by voting for every one year, two years, or three years or abstaining from voting on this proposal. While the Board believes that its recommendation is appropriate at this time, our shareholders are not voting to approve or disapprove that recommendation, but are instead asked to indicate their preferences, on an advisory basis, as to whether the non-binding advisory vote on the approval of our compensation practices for our named executive officers should be held every one year, two years, or three years. The choice among every one, two or three years which receives a majority of all of the votes cast at the Annual Meeting will be the frequency for the advisory vote on executive compensation that has been recommended by shareholders. In the event that no option receives a majority of the votes cast, the Board will consider the option that receives the highest number of votes as the preferred choice of the shareholders. The Board and the Compensation Committee value the opinions of our shareholders in this matter and, to the extent there is any significant vote in favor of one frequency over the other options, the Board will consider our shareholders’ concerns and evaluate any appropriate next steps. However, because this vote is advisory and, therefore, not binding on the Board, the Compensation Committee or the Company, the Board may decide that it is in the best interests of our shareholders that we hold an advisory vote on the compensation of our named executive officers more or less frequently than the option preferred by the shareholders. The vote will not be construed to create or imply any change or addition to the fiduciary duties of the Company, the Board or the Compensation Committee. THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE ON ITEM 4 TO HAVE THE COMPANY CONDUCT AN ADVISORY VOTE ON EXECUTIVE COMPENSATION AT THE ANNUAL MEETING OF SHAREHOLDERS EVERY “ONE YEAR.” OTHER BUSINESS THAT MAY COME BEFORE THE MEETING Our management does not intend to bring any other business before the Annual Meeting for action and has not been notified of any other business proposed to be brought before the Annual Meeting. However, if any other business should be properly presented for action, it is the intention of the persons named on the proxy card to vote in their discretion on such business.
Procedures for Submitting Shareholder Proposals Any proposal of a shareholder intended to be included in our Proxy Statement for the A shareholder nomination of a person for election to our Board or a proposal for consideration at our
the tenth day following the date of the first public announcement of the meeting. A copy of our Bylaws may be obtained from our Corporate Secretary, who may be reached at Seritage Growth Properties, 500 Fifth Avenue, Suite 1530, New York, NY 10110, Attn: Corporate Secretary.
The proxies are solicited by our Board. We will pay the cost to solicit proxies. Trustees and officers of the Company and employees of its affiliates may solicit proxies either personally or by telephone, by facsimile transmission or through the Internet. The interest and cooperation of all shareholders in the affairs of Seritage Growth Properties are considered to be of the greatest importance by your management. Even though you expect to attend the Annual Meeting, it is urgently requested that, whether your share holdings are large or small, you promptly authorize a proxy to vote your shares by telephone, through the Internet or by mail. By Order of the Board of Trustees
Your vote matters – here’s how to vote! You may vote online or by phone instead of mailing this card. Online Go to www.envisionreports.com/SRG or scan the QR code — login details are located in the shaded bar below. Using a black ink pen, mark your votes with an X as shown in this example. Please do not write outside the designated areas. Phone Call toll free 1-800-652-VOTE (8683) within the USA, US territories and Canada Save paper, time and money! Sign up for electronic delivery at www.envisionreports.com/SRG Annual Meeting Proxy Card q IF VOTING BY MAIL, SIGN, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. q A Proposals — The Board of The
0001628063 srg:AverageValueOfDividendsOrOtherEarningsPaidOnEquityAwardsNotOtherwiseReflectedInFairValueOrTotalCompensationMember ecd:NonPeoNeoMember 2020-01-01 2020-12-31 |