| ☐ | 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 §240.14a-12 |
| ☒ | No fee required. |
| ☐ | Fee paid previously with preliminary materials. |
| ☐ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act 14a-6(i)(1) and |
April 29, 2024
Dear Stockholder:
On behalf of the Board of Directors, I cordiallyam pleased to invite youall of our stockholders to attend the 20172024 Annual Meeting of Stockholders of Brookdale Senior Living Inc., to (the “2024 Annual Meeting” or the “Annual Meeting”). The meeting will be held on Monday, September 25, 2017Tuesday, June 18, 2024 at 10:00 a.m., local Central time at our principal executive officeoffices located at 111 Westwood Place, Brentwood, Tennessee.
2023 was a pivotal year for Brookdale’s continued recovery from the Annual Meetingpandemic. As a result of the right plans and initiatives, followed by strong operational performance, Brookdale delivered full-year RevPAR growth of more than 11% and, as of year-end, weighted average occupancy had grown a total of nearly 900 basis points from the start of the pandemic recovery.
The Board is confident in Brookdale’s ability to maintain sustainable forward progress and quality business outcomes, while continuing to support consistent and high-quality resident experience. We are givenfocused on priorities that will foster robust long-term growth and capitalize on positive trends in demand demographics, customer preferences, and lower new supply in the attached Notice of 2017 Annual Meeting of Stockholdersindustry, while using our unique Brookdale differentiators and proxy statement.
Whether or not you expect to attend the meeting,Annual Meeting, it is important that your shares be represented and voted at the meeting. In addition to voting in person, stockholders of record mayAnnual Meeting. Please promptly vote via a toll-freeyour shares by submitting your proxy by telephone number or over the Internet. Stockholders who received a paper copy of the proxy statement and 2016 Annual Report by mail may also voteInternet or by completing, signing, dating, and mailing the enclosedreturning your proxy card promptlyor voting instruction form.
We thank you for your continued investment in Brookdale.
Very truly yours,
Guy P. Sansone
Chairman of the return envelope provided.Board of Directors
Brookdale Senior Living Inc.
Notice Regarding the Availability of Proxy Materials for the2024 Annual Meeting of Stockholders
April 29, 2024
The 2024 Annual Meeting of Stockholders to be Held on September 25, 2017: The Notice of 2017(including any adjournments or postponements thereof, the “Annual Meeting” or the “2024 Annual Meeting and Proxy Statement and the 2016 Annual Report are available at www.proxyvote.com.
| 1. | To elect eight director nominees to |
| 2. | To approve, on an advisory basis, the Company’s named executive officer compensation; |
| 3. | To ratify the |
| 4. |
To approve the |
| 5. | |
To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
The close of business on August 1, 2017 areApril 22, 2024 has been fixed as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. We are making this Notice of 2024 Annual Meeting including any adjournments and postponements thereof. Our stock transfer books will remain open forproxy statement first available on or about April 29, 2024.
Your vote is important. Unless you attend the transfer of our common stock. A list of all stockholders entitled toAnnual Meeting and vote at the meeting will be available for examination at our principal executive office located at 111 Westwood Place, Suite 400, Brentwood, Tennessee 37027, for the ten days before the meeting between 9:00 A.M. and 5:00 P.M., local time, and at the placein person, please vote as soon as possible by one of the meeting duringmethods shown below. Be sure to have your proxy card, voting instruction form, or Notice of Internet Availability of Proxy Materials in hand and follow the meeting for any purpose germanebelow instructions:
By Phone - You can vote your shares by calling (844) 326-5741 toll free through 11:59 p.m. Eastern time on June 17, 2024
By Internet - You can vote your shares online at www.proxypush.com/BKD through 11:59 p.m. Eastern time on June 17, 2024
By Mail - You can complete, sign, date, and return your proxy card or voting instruction form in the postage-paid envelope provided
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON JUNE 18, 2024: This proxy statement and our 2023 Annual Report to Stockholders (the “2023 Annual Report”) are available at www.proxydocs.com/BKD.
By Order of the meeting.Board of Directors
Chad C. White
Executive Vice President, General Counsel and Secretary
Table of Contents
Brookdale Senior Living Inc.
2024 Proxy Statement
| Proxy Statement Summary | iii | |||
2024 PROXY STATEMENT | i |
Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements
Certain statements in this proxy statement and accompanying Chairman’s letter constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding the Company’s intent, belief, or expectations. Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “could,” “would,” “potential,” “intend,” “expect,” “endeavor,” “seek,” “anticipate,” “estimate,” “believe,” “project,” “predict,” “continue,” “plan,” “target,” or other similar words or expressions, and include statements regarding the Company’s expected financial and operational results. These forward-looking statements are based on certain assumptions and expectations, and the Company’s ability to predict results or the actual effect of future plans or strategies is inherently uncertain. Although the Company believes that expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its assumptions or expectations will be attained and actual results and performance could differ materially from those projected. Factors which could have a material adverse effect on the Company’s operations and future prospects or which could cause events or circumstances to differ from the forward-looking statements include, but are not limited to, those risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including those set forth in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements in such SEC filings. Readers are cautioned not to place undue reliance on any of these forward-looking statements, which reflect management’s views as of the date of this proxy statement. The Company cannot guarantee future results, levels of activity, performance or achievements, and, except as required by law, it expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained in this proxy statement to reflect any change in the Company’s expectations with regard thereto or change in events, conditions, or circumstances on which any statement is based.
ii |  |
Proxy Statement Summary |
Information about the Annual Meeting
Whether or not you expect to attend the Annual Meeting, we strongly encourage you to vote as soon as possible to ensure your shares are represented and voted at the meeting. See page 4 for more details about attending the Annual Meeting.
Date and Time | Location | Record Date | ||
| Tuesday, June 18, 2024 10:00 a.m. Central Time | Brookdale Senior Living Inc. 111 Westwood Place Brentwood, Tennessee | April 22, 2024 |
2024 Proposals
The Board recommends that you vote as follows. If you properly submit your proxy and do not specify how your shares are to be voted, your shares will be voted in accordance with the recommendations of the Board.
Proposals | Unanimous Recommendation of the Board | Page Reference (for more detail) | ||||
✔FOR | 5 | |||||
2. Advisory approval of our named executive officer compensation | ✔FOR | 66 | ||||
| ✔FOR | 67 | |||||
4. Approval of the Brookdale Senior Living Inc. 2024 Omnibus Incentive Plan | ✔FOR | 70 | ||||
How to Vote
You can submit your proxy vote by any of the following methods:
You can vote your shares through 11:59 p.m. Eastern |
You can vote your shares through 11:59 p.m. Eastern |
You can complete, sign, |
You can vote your shares | |||
2024 PROXY STATEMENT | iii |
Proxy Statement Summary
Director Nominees
Our Board is currently composed of eight directors. The Board has unanimously nominated six of the eight current directors for election, and Claudia Napal Drayton and Elizabeth Burnham Mace for election as new directors, at the 2024 Annual Meeting, each for a one-year term expiring at the 2025 Annual Meeting. The Board believes that Ms. Drayton’s decades of experience as a Chief Financial Officer in the healthcare industry and public company board experience, and Ms. Mace’s extensive knowledge of the senior housing industry through her prior role with the National Investment Center for Seniors Housing & Care (NIC) will enhance the Board’s collective skill and experience. For more information regarding Mses. Drayton and Mace, and the Board’s and the Nominating and Corporate Governance (NCG) Committee’s process for identifying and selecting these nominees, see “Proposal 1: Election of Directors” beginning on page 5 of this proxy statement. The new nominees elected at the 2024 Annual Meeting will succeed Non-Executive Chairman, Guy P. Sansone, and current director, Marcus E. Bromley, who have given notice that they will not be standing for reelection at the Company’s 2024 Annual Meeting and will retire from the Board upon the expiration of their terms at the Annual Meeting.
Board Composition
The Board seeks composition of its members that reflects an appropriate balance of knowledge, experience, skills, expertise, and diversity in order to support our business strategy. The following tables reflect the experience and core competencies, and the diversity, of the director nominees and continuing directors.
| Experience and Core Competencies | Asher | Baier | Bumstead | Drayton | Freed | Mace | Warren | Wielansky | ||||||||
Current or Former CEO | ✔ | ✔ | ✔ | |||||||||||||
Current or Former CFO | ✔ | ✔ | ✔ | |||||||||||||
Senior Housing | ||||||||||||||||
| ✔ | ✔ | |||||||||||||||
Healthcare (Operations & Strategy) | ||||||||||||||||
| ✔ | ✔ | ✔ | ✔ | |||||||||||||
Healthcare (Clinical) | ||||||||||||||||
| ✔ | ||||||||||||||||
Hospitality | ||||||||||||||||
| ✔ | ✔ | |||||||||||||||
Sales & Marketing | ✔ | |||||||||||||||
Real Estate | ✔ | ✔ | ✔ | |||||||||||||
Finance / Economics | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||||||
Mergers & Acquisitions | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||||
Risk Management | ✔ | ✔ | ✔ | ✔ | ✔ | |||||||||||
Other Public Board Service | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ||||||||||
iv | |
Commitment to Governance Practices
Board Demographic Matrix | Commitment to Board Diversity | |||||
Total Number of Directors | 8 | The Board is committed to having a slate of nominees who represent various fields of experience, knowledge, and thought, as well as personal backgrounds. Assuming election of the full slate of nominees, the Board would include 62% women, 12% people of color, and 25% U.S. veteran representation. Ms. Baier also serves on the NYSE Board Advisory Council, which identifies and connects diverse board candidates to NYSE-listed companies seeking new directors. | ||||
Independent Directors | 7 (88%) | |||||
Average Tenure | 6 years | |||||
Average Age | 66 | |||||
Female | Male | |||||
Gender Identity | 5 (62%) | 3 (38%) | ||||
Hispanic or Latino/a | 1 (12%) | – | ||||
White | 4 (50%) | 3 (38%) | ||||
U.S. Veteran | – | 2 (25%) | ||||
| Commitment to Governance Practices |
Independent Non-Executive Chairman of the Board with robust authority, including to approve Board agendas and call and preside over meetings of the independent directors Declassified Board such that all directors stand for election for annual terms Bylaws contain majority voting standard for uncontested director elections Bylaws contain proxy access procedures Corporate Governance Guidelines limit service on other public company boards (no more than three for independent directors and no more than one for the CEO) Annual evaluations of the Board and its committees Meaningful director stock ownership guidelines (5x annual retainer) Insider trading policy prohibits directors and executive officers from pledging or hedging Brookdale stock No stockholder rights plan (poison pill) or similar plan New director orientation program overseen by Nominating and Corporate Governance Committee |
2024 PROXY STATEMENT | v |
General Information about the Annual Meeting |
This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board"“Board of Directors” or the “Board”) of Brookdale Senior Living Inc., a Delaware corporation ("Brookdale," (“Brookdale” or the "Company," "we," "us" or "our"“Company”), for use to be voted at the 20172024 Annual Meeting of Stockholders to be held on Monday, September 25, 2017, includingTuesday, June 18, 2024, and at any adjournments and postponements thereof (the "Annual Meeting").
Distribution of Proxy Materials
On or about April 29, 2024, we expect to start mailing to holders of our principal executive office located at 111 Westwood Place, Brentwood, Tennessee 37027. Our main telephone number is (615) 221-2250.
Stockholders Entitled to Vote
Only stockholders of record at the close of business on April 22, 2024, the record date for the Annual Meeting, are entitled to receive notice of, attend, and vote at the Annual Meeting. As of August 1, 2017,the record date, there were outstanding and entitled to vote 186,278,661193,012,561 shares of our common stock, par value $0.01 per share (excludes unvestedexcluding restricted shares with respect tostock units (“RSUs”) for which the holders have no voting rights).rights. Each share of our common stock entitles the holder to one vote. Stockholders of record at the close of business on August 1, 2017 are entitled to vote at the Annual Meeting, including any adjournments and postponements thereof. A list of all stockholders entitled to vote at the Annual Meeting will be available for examination at our principal executive office located at 111 Westwood Place, Suite 400, Brentwood, Tennessee 37027,offices for the ten days before the Annual Meeting between 9:00 A.M.a.m. and 5:00 P.M., localp.m. Central time and at the Annual Meeting for any purpose germane to the meeting.
Voting Choices and Recommendations of the Board
With respect to Proposal 1 (Election of Directors), you will have the choice to vote “FOR,” “AGAINST” or “ABSTAIN” with respect to each nominee. With respect to all other proposals, you will have the choice to vote “FOR,” “AGAINST,” or “ABSTAIN.” The Board recommends a vote:
| 1. | “FOR” the election of each of the eight director nominees to the Board, each for a one-year term expiring at the 2025 annual meeting of stockholders (the “2025 Annual Meeting”); |
| 2. | “FOR” advisory approval of our named executive officer compensation; |
| 3. | “FOR” ratification of the appointment of Ernst & Young LLP (“EY”) as independent registered public accounting firm for 2024. |
| 4. | “FOR” approval of the Brookdale Senior Living Inc. 2024 Omnibus Incentive Plan. |
2024 PROXY STATEMENT | 1 |
General Information about the Annual Meeting
Stockholders of Record and Beneficial Holders
If your shares of common stock are owned directly in your name with our transfer agent, Equiniti Trust Company, LLC (f/k/a American Stock Transfer & Trust Company), you are considered a registered holder of those shares. If you are the beneficial owner of shares of common stock held by a broker or other custodian, you hold those shares in “street name” and are not a registered stockholder. If you hold your shares in “street name,” your broker or other custodian will vote your shares as you direct. However, if you do not give specific voting instructions to your broker, generally your broker will have discretion to vote your shares on routine matters but will not have discretion to vote your shares on non-routine matters. When the broker exercises its discretion to vote on routine matters in the absence of voting instructions from you, a broker non-vote occurs with respect to the non-routine matters since the broker will not have discretion to vote on such non-routine matters. The election of directors (Proposal 1), the advisory approval of our named executive officer compensation (Proposal 2) and the approval of the Brookdale Senior Living Inc. 2024 Omnibus Incentive Plan (Proposal 4) will be considered non-routine matters. The ratification of the appointment of EY (Proposal 3) will be considered a routine matter. Therefore, if you hold your shares in “street name” and do not submit voting instructions to your broker or other custodian, they will only be authorized to vote your shares on Proposal 3.
Quorum
The presence at the Annual Meeting, in person or by proxy, of the holders of a majority of the shares of our common stock issued and outstanding on August 1, 2017the record date will constitute a quorum for the transaction of business.
Voting Instructions and Information
Voting Instructions
You may vote of a plurality of all the votes of the shares present in person or represented by proxy and entitled to vote on the election of directorsor in person at the Annual Meeting. Whether or not you plan to attend the Annual Meeting, is sufficientyou are encouraged to elect the nominee if a quorum is present,vote as provided in our Amendedsoon as possible to ensure that your shares are represented and Restated Certificate of Incorporation and Amended and Restated Bylaws, each as amended to date. However, the Board has adopted a majority voting policy applicable to uncontested elections of directors, which is set forth in our Corporate Governance Guidelines. As required by the policy, each of the director nominees has submitted an irrevocable resignation, which will be effective contingent upon such nominee's not receiving a majority of the votes cast in the election of directors and acceptance of the resignation by the Board. If any such director nominee fails to receive more votes cast "for" than "against" such nominee in the election (with "abstentions" and "broker non-votes" not counted as a vote cast either "for" or "against" such director's election), the Nominating and Corporate Governance Committee will make a recommendation to the Board as to whether to accept or reject the resignation, or whether other action should be taken. See "Proposal 1––Election of Directors––Majority Voting for Directors" in this proxy statement for more information about the majority voting policy.
Revoking or Changing Your Vote
Stockholders of record may revoke their proxy or change their vote at any time prior to your broker, your broker will not be authorized to vote your shares on anyexercise of the mattersproxy at the Annual Meeting other than Proposal 2. If your broker exercises its discretion to vote on Proposal 2, your shares will be counted as present for the purpose of determining the presence ofby:
Delivering a quorum at the Annual Meeting and will be voted on Proposal 2, but your shares will constitute "broker non-votes" on each of the other proposals at the Annual Meeting. Broker non-votes will have no effect on the outcome of such other proposals.
Submitting another properly completed proxy card with a later date;
Submitting another timely proxy by attendingvia the phone or the Internet through 11:59 p.m. Eastern time on June 17, 2024; or
Attending the Annual Meeting and voting in person. If not revoked, we
2 | |
Voting Instructions and Information
Stockholders holding shares beneficially in street name should contact their broker or other custodian for instructions on how to revoke or change their voting instructions. For all methods of voting, the last vote properly cast will vote the proxysupersede all previous votes. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request or vote in person at the Annual Meeting.
Voting of Proxies
If you properly submit your signed proxy card or voting instruction form, or complete your proxy by telephone or the Internet, your shares will be voted as you direct or will be voted as specified in the above Board recommendations if you do not direct a particular vote. With respect to director elections, should any nominee be unable to serve, the persons designated as proxies reserve full discretion to vote for another person. The Board currently has no reason to believe that any nominee will be unable to serve if elected.
The Board does not intend to bring any other business before the Annual Meeting, and it does not know of any other matters that may come before the Annual Meeting. However, if any other matters are properly presented at the meeting, proxies will be voted in accordance with your instructions.
Vote Required to Approve Proposals
The following table summarizes the votes required for passage of each proposal and the effect of abstentions and broker non-votes.
Proposal | Vote required for approval | Effect of Abstentions | Effect of Votes | |||
1. Election of directors | Majority of votes cast with respect to each director | No effect | No effect | |||
2. Advisory vote to approve named executive officer compensation (say-on-pay) | Majority of shares present and entitled to vote on the matter | Against | No effect | |||
3. Ratification of appointment of independent registered public accounting firm for 2024 | Majority of shares present and entitled to vote on the matter | Against | N/A | |||
4. Approval of Brookdale Senior Living Inc. 2024 Omnibus Incentive Plan | Majority of shares present and entitled to vote on the matter | Against | No effect | |||
2024 PROXY STATEMENT | 3 |
General Information about the Annual Meeting
Attending the Annual Meeting
Only stockholders as of the record date, or their duly appointed proxies, and invited guests of the Company may attend the Annual Meeting. Admission to the Annual Meeting will begin at approximately 9:30 a.m. Central time. In order to be admitted, you should:
bring current, government-issued photo identification, such as a driver’s license, and proof of ownership of common stock on the record date. If you are being soliciteda holder of record, your identity will be checked against a list of registered holders at the Annual Meeting. If you hold your shares in street name, a recent brokerage statement or a letter from your bank, broker, trustee, or other nominee are examples of proof of ownership. If you want to vote your shares held in street name in person, you must obtain a legal proxy in your name from the broker, bank, trustee, or other nominee that holds your shares of common stock;
leave your camera at home because cameras, transmission, broadcasting, and other recording devices will not be permitted in the meeting room;
be prepared to comply with security requirements, which may include, among other security measures, security guards searching all bags and attendees passing through a metal detector; and
arrive shortly after 9:30 a.m. Central time to ensure that you are seated by the Board. We will bear all costsstart of the solicitationAnnual Meeting.
Any holder of proxies. In addition to solicitations by mail, our directors, officersa proxy from a stockholder must present a properly executed legal proxy and regular employees, without additional remuneration, may solicit proxiesa copy of the proof of ownership. If you do not provide photo identification and comply with the other procedures outlined above for attending the Annual Meeting in person, or by telephone, email or other electronic means. Weyou will request brokers, banks, custodians and other fiduciaries to forward proxy soliciting materialnot be admitted to the beneficial ownersAnnual Meeting.
4 | |
Proposal 1: Election of Directors |
The Board is currently composed of stock they holdeight directors, and each of record. Wetheir terms will reimburse them for their reasonable out-of-pocket expenses incurred in connection withexpire at the distribution2024 Annual Meeting. The Board has unanimously nominated six of the proxy materials.
If any of the nominees becomes unavailable or unwilling to serve, an event that the Board does not presently expect, wethe named proxies will vote the shares represented by proxies for the election of directors for the election of such other person(s) as the Board may recommend.
The Company’s Bylaws provide that the election of director nominees at the 2024 Annual Meeting will be by the vote of the Board is that nomajority of the votes cast with respect to each director’s election. Accordingly, each director who is 75 or oldernominee will be elected if he or she receives more votes “FOR” his or her election than “AGAINST” his or her election. Shares that are not voted in the election of directors, including abstentions and broker non-votes, have no direct effect in the election of directors. Those shares, however, are taken into account in determining whether a sufficient number of shares are present to establish a quorum.
| ✔ | The Board unanimously recommends that you vote “FOR” the election of each of the eight director nominees nominated by the Board, each for a one-year term expiring at the 2025 Annual Meeting. Unless otherwise instructed, the named proxies will vote all proxies we receive “FOR” the election of the Board’s nominees. |
Board Composition
The process for re-election to theevaluating our Board which policy may be waived in individual cases. In light of Mr. Bumstead's valuable contributions to the Board, his significant experiencecomposition and his knowledge of the senior housing industry,identifying and evaluating director candidates is outlined below. Through this process, the Nominating and Corporate Governance Committee recommended, andhas approached refreshment of the Board approved,by focusing on its collective skills and experience with new directors who have decades of finance, operations, sales and marketing, analytical, and clinical experience in the senior housing, hospitality, and healthcare industries. Following the Annual Meeting, the average tenure of the Board will be equal to approximately six years.
Annual Evaluation of Board Composition
At least annually the Nominating and Corporate Governance Committee seeks input from each director regarding the composition of the Board. The Nominating and Corporate Governance Committee uses these results to assess with the Board whether the Board’s composition reflects an exceptionappropriate balance of knowledge, experience, skills, expertise, and diversity in order to this policysupport our business strategy. From time to time, the Nominating and Corporate
2024 PROXY STATEMENT | 5 |
Proposal 1: Election of Directors
Governance Committee may also seek and receive input from certain stockholders regarding the skills, experience, and other characteristics that stockholders believe would be beneficial to our Board composition. The Nominating and Corporate Governance Committee also reviews the size of the Board and, if deemed appropriate, will recommend to the Board any changes to its size.
Identifying Director Candidates
The Nominating and Corporate Governance Committee may engage an independent search firm to conduct targeted searches to identify well-qualified candidates who meet the needs of the Board. When an independent search firm is used, the Nominating and Corporate Governance Committee retains the firm and approves payment of its fees. Potential director candidates may also be identified by the Nominating and Corporate Governance Committee by asking current directors and executive officers to notify the committee if they become aware of candidates who possess skills, experience, or other characteristics needed for Mr. Bumstead.
The Board recommends that you vote
Evaluating Director Compensation ArrangementsCandidates
| Name | Fees Earned or Paid in Cash | Stock Awards(1)(2) | All Other Compensation | Total | ||||||||||||
| Frank M. Bumstead | $221,000 | $99,995 | (3) | –– | $320,995 | |||||||||||
| Jackie M. Clegg | $240,000 | (4) | $99,995 | (3) | –– | $339,995 | ||||||||||
| Daniel A. Decker | $479,167 | (5) | $591,313 | (6) | $11,685 | (7) | $1,082,164 | |||||||||
| Jeffrey R. Leeds | $222,000 | $99,995 | (3) | –– | $321,995 | |||||||||||
Mark J. Parrell(8) | $190,000 | $69,306 | (9) | –– | $259,306 | |||||||||||
| William G. Petty, Jr. | $209,000 | (10) | $99,995 | (3) | –– | $308,995 | ||||||||||
| James R. Seward | $210,000 | $99,995 | (3) | –– | $309,995 | |||||||||||
| Lee S. Wielansky | $205,000 | $69,306 | (9) | –– | $274,306 | |||||||||||
The Nominating and Corporate Governance Committee is currently chaired by Ms. Cleggresponsible for evaluating director candidates and also consists of Messrs. Leeds, Bumstead and Petty. All members are "independent" directors as defined underrecommending nominees to the listing standards of the NYSE. In 2016, the Nominating and Corporate Governance Committee held 12 meetings.
6 | |
Majority Voting for Director Elections
Board Diversity
Diversity is one of experience in these various areas. In determining whether to recommend a director for re-election,several characteristics the Nominating and Corporate Governance Committee also considers the director's past attendance at meetings and participation in and contributions to the activities of the Board. The Nominating and Corporate Governance Committee identifies potential nominees by asking current directors and executive officers to notify the Nominating and Corporate Governance Committee if they become aware of suitable candidates. As described below, the Nominating and Corporate Governance Committee will also consider candidates recommended by stockholders. The Nominating and Corporate Governance Committee may engage firms that specialize in identifying director candidates.
Director Orientation and gender, but also background, experience, skills, accomplishments, financial expertise, professional interests, personal qualities and other traits desirable in achieving an appropriate group of qualified individuals.Continuing Education
The Nominating and Corporate Governance Committee has not, at this time, putoversees our director orientation and continuing education programs. As part of the director orientation program, new directors engage in placeone-on-one introductory meetings with our business and functional leaders regarding our strategic plans, financial statements, and key issues, policies and practices. Chairs of the Board’s committees coordinate orientation for new committee members. Our senior management also meets regularly with our directors regarding specific functional topics of importance. The Nominating and Corporate Governance Committee periodically highlights for directors available continuing education programs hosted by third parties on a formal policy with regard to such procedures. This is because procedures are set forth in our Amendedvariety of relevant topics, including corporate governance, risk management, compliance, and Restatedexecutive compensation.
Majority Voting for Director Elections
Our Bylaws which permit stockholders to submit recommendations for director candidates. The Board believes that it is appropriate not to adopt a specific policy since stockholders are always free to submit recommendations for director candidates, simply by following the procedures set forth in the Amended and Restated Bylaws, as described below.
In order for any person to be nominated by Brookdale not later than the close of business on the tenth day following the day on which notice of the date of the special meeting was mailed or public disclosure of the date of the special meeting was made, whichever first occurs.
2024 PROXY STATEMENT | 7 |
Proposal 1: Election of Directors
Director Nominees
Biographical information for the long-term benefittwo new nominees for election at the 2024 Annual Meeting is set forth below.
Claudia Napal Drayton Independent Director Nominee | Elizabeth Burnham Mace Independent Director Nominee | |||||||
| Age:56 Public Company Directorships: • 3D Systems Inc. (2021 – current) |
| Age:67 | |||||
Ms. Drayton brings more than 20 years of operational and financial experience in healthcare and biotech companies. Currently, she serves on the board of 3D Systems Inc. (NYSE: DDD) where she is a member of the Audit Committee and Nominating and Governance Committee. Most recently, she served as the Chief Financial Officer of Quantum-Si Incorporated, a publicly-traded life-sciences company focused on protein sequencing and genomics for the healthcare industry. She held this role from April 2021 until June 2023, and during her tenure she oversaw the company’s successful transition to a publicly traded company. Prior to that Ms. Drayton served as the Chief Financial Officer of Nuwellis, Inc., a publicly-traded medical device company focusing on commercializing ultrafiltration technology for patients with heart failure. Before joining Nuwellis, she spent 15 years at Medtronic, a global leader in medical devices, where she held leadership positions of increasing responsibility in the finance organization. These included Chief Financial Officer for both the Peripheral Vascular and the Integrated Health Solutions business units. She began her career at Arthur Andersen LLP where she was an audit manager. Ms. Drayton received a B.B.A in Accounting from the University of Mary Hardin-Baylor and an M.B.A. from the University of Minnesota’s Carlson School of Management. | Ms. Mace has more than 30 years of experience in research, economics, and market analysis. Most recently, she served as the Chief Economist and Director of Research and Analytics at the NIC from 2014 to June 2023. Prior to serving on NIC’s leadership team, she served on the NIC Board of Directors and chaired its Research Committee. She has also previously served as a director at AEW Capital Management and worked in the AEW Research Group for 17 years. Before AEW, she also spent 10 years at Standard & Poor’s DRI/McGraw-Hill as director of its Regional Information Service. Ms. Mace also worked as a regional economist at Crocker Bank, and for the National Commission on Air Quality, the Brookings Institute, and Boston Edison. She is currently a member of the Institutional Real Estate Americas Editorial Board. In 2020, Ms. Mace was inducted into the McKnight’s Women of Distinction Hall of Honor. In 2014, she was appointed a fellow at the Homer Hoyt Institute and was awarded the title of a “Woman of Influence” in commercial real estate by Real Estate Forum Magazine and Globe Street. Ms. Mace received a bachelor’s degree from the Mount Holyoke College and a Master’s of Science in Applied Economics from the University of California. She also earned a Certified Business Economist™ designation from the National Association of Business Economists. | |||||||
Ms. Drayton’s extensive financial background and experience in the healthcare and other industries, along with her public company board experience, led to the conclusion that she should be nominated to serve as a member of the Board. | Ms. Mace’s economic, research and analysis experience, as well as her knowledge of the senior housing industry through her service with NIC, led to the conclusion that she should be nominated to serve as a member of the Board. | |||||||
8 | |
Director Nominees
Biographical information for the current directors nominated for election at the 2024 Annual Meeting is set forth below.
Jordan R. Asher, MD Independent Director | Lucinda M. Baier Director, President and Chief Executive Officer | |||||||||
| Director Since:February 2020 Age: 59 Brookdale Board Committees: • Investment • Nominating and Corporate Governance | | Director Since: February 2018 Age: 59 Public Company Directorships: • The Bon-Ton Stores, Inc. (2007 – 2016) | |||||||
Dr. Asher brings more than 20 years of expertise and a history of success in large matrixed, mission-based, national healthcare systems. He currently serves as Executive Vice President and Chief Clinical Officer of Sentara Healthcare, a large integrated delivery health system including a clinically integrated network and insurance company serving Virginia and North Carolina, where he has a wide range of responsibilities, including creating high quality, equitable, and innovative models of care delivery as well as providing national thought leadership directed towards the future of health care. From 2018 to 2023, he served as the Chief Physician Executive and Senior Vice President of Sentara. Prior to Sentara, Dr. Asher served in several executive roles with Ascension since 2006, including Chief Clinical Officer of its Ascension Care Management subsidiary from 2016 to 2018 with responsibility for network development and population and risk management, Chief Clinical Officer and Chief Innovation Officer of Ascension’s MissionPoint Health Partners subsidiary from 2015 to 2016, and Chief Medical Officer and Chief Integration Officer of MissionPoint Health Partners from 2011 to 2015. Dr. Asher earned a B.S. in Biology from Emory University, an M.D. from Vanderbilt University School of Medicine, and an M.S. in Medical Management from the University of Texas at Dallas and Southwestern Medical Center. | Ms. Baier has served as Brookdale’s President and Chief Executive Officer and as a member of the Board since February 2018, after having served as Brookdale’s Chief Financial Officer since December 2015. Ms. Baier joined Brookdale from Navigant Consulting, Inc. where she served as Executive Vice President and Chief Financial Officer since 2013. In addition, Ms. Baier has had multi-billion dollar operations responsibility, been the chief executive officer for a publicly-traded retailer, and served as an executive officer of a Fortune 30 company. She has served for more than a decade as a board member of public and private companies and organizations and currently serves on the board of directors of NIC, where she serves as chair of the Diversity Equity Inclusion and Belonging Committee, the Nashville Health Care Council, where she serves as Chair, and the Nashville Chamber of Commerce Board of Directors. She is a member of the NYSE Board Advisory Council, which identifies and connects diverse board candidates to NYSE-listed companies seeking new directors. She also currently serves on Vanderbilt University Medical Center’s Board of Directors, including as a member of its Audit and Compliance Committee and Chair of the Quality and Safety Committee. A number of organizations have recognized Ms. Baier, including the CEO Forum Group’s 2021 Top 10 CEOs Transforming Healthcare in America; Nashville Medical News’ Class of 2021 “Women to Watch”; Corporate Citizenship 2020 Award from the Committee for Economic Development of The Conference Board; one of McKnight’s 2020 “Women of Distinction”; and Nashville Business Journal’s “Most Admired CEO” list for four years. Ms. Baier is a Certified Public Accountant and a graduate of Illinois State University, with B.S. and M.S. degrees in Accounting. | |||||||||
Dr. Asher’s deep experience in the evolving healthcare landscape, including a combination of clinical training and executive leadership experience, particularly in light of the healthcare industry’s transition to more integrated, value-based delivery and payment models, led to the conclusion that he should serve as a member of the Board. | Ms. Baier’s continued leadership and accomplishments in the areas of our people, portfolio, and operations and strong crisis management as the Company’s President and Chief Executive Officer, and her prior leadership roles at other companies, led to the conclusion that she should serve as a member of the Board. | |||||||||
2024 PROXY STATEMENT | 9 |
Proposal 1: Election of our stockholders. To fulfill thisDirectors
Frank M. Bumstead Independent Director | Victoria L. Freed Independent Director | |||||||||
| Director Since:August 2006 Age:82 Brookdale Board Committees: • Compensation (Chair) • Nominating and Corporate Governance Public Company Directorships: • Syntroleum Corporation (1993 – 2014) • American Retirement Corp. (1997 – 2006) | | Director Since:October 2019 Age: 67 Brookdale Board Committees: • Compensation • Nominating and Corporate Governance (Chair) Public Company Directorships: • ILG, Inc. (f/k/a Interval Leisure Group, Inc.) (2012 – 2018) | |||||||
Mr. Bumstead has over 40 years of experience in the field of business and investment management and financial and investment advisory services, including representing buyers and sellers in a number of merger and acquisition transactions. Mr. Bumstead is a principal shareholder of Flood, Bumstead, McCready & McCarthy, Inc., a business management firm that represents artists, songwriters and producers in the music industry as well as athletes and other high net worth clients, and has been with the firm since 1989. From 1993 to December 1998, Mr. Bumstead served as the Chairman and Chief Executive Officer of FBMS Financial, Inc., a registered investment advisor. He previously served as Chairman of the Board of Directors of the Country Music Association, Vice Chairman of the Board of Directors and Chairman of the Finance and Investment Committee of the Memorial Foundation, Inc., a charitable foundation, and as a member of the Board of Advisors of United Supermarkets of Texas, LLC and was Chairman of its Finance and Audit Committee. Mr. Bumstead received a B.B.A. degree from Southern Methodist University and a Masters of Business Management from Vanderbilt University’s Owen School of Management. | Ms. Freed brings more than 25 years of executive leadership in the areas of sales, customer service, and marketing, and has earned numerous awards for outstanding achievement in sales and marketing during her career. Ms. Freed is Senior Vice President of Sales, Trade Support and Service for Royal Caribbean International, having served in that role since 2008, where she oversees the largest sales team in the cruise line industry and also manages the company’s consumer outreach, reservations, group sales, and customer service functions. Prior to her service with Royal Caribbean, Ms. Freed worked for 29 years with Carnival Cruise Lines, where she served as Senior Vice President of Sales and Marketing during the last 15 years of her tenure. She is a trustee of the United Way of Miami-Dade County and serves as a member of the board of Jewish Adoption and Foster Care Options (JAFCO). Ms. Freed earned a bachelor’s degree in business with an emphasis in marketing from the University of Colorado. | |||||||||
Mr. Bumstead’s experience in business management and as a director of several public companies, along with his knowledge of the senior housing industry (through his prior service as a director of American Retirement Corporation), led to the conclusion that he should serve as a member of the Board. | Ms. Freed’s decades of executive leadership in sales, customer service, and marketing in the hospitality industry led to the conclusion that she should serve as a member of the Board. | |||||||||
10 | |
Director Nominees
Denise W. Warren Independent Director | Lee S. Wielansky Independent Director | |||||||||||||
| Director Since: October 2018 Age: 62 Brookdale Board Committees: • Audit (Chair) • Compensation Public Company Directorships: • TruBridge, Inc. (formerly known as Computer Programs and Systems, Inc.) (2017 – current) | | Director Since: April 2015 Age: 72 Brookdale Board Committees: • Audit • Investment (Chair) Public Company Directorships: • Acadia Realty Trust (2000 – current) • Isle of Capri Casinos, Inc. (2007 – 2017) • Pulaski Financial Corp. (2005 – 2016) | |||||||||||
Ms. Warren brings more than 30 years of operational, financial and healthcare experience. Most recently, she served as Executive Vice President and Chief Operating Officer of WakeMed Health & Hospitals from October 2015 through December 2020, where she was responsible for the strategic, financial and operational performance of the organization’s network of facilities in the North Carolina Research Triangle area. Prior to that, from 2005 to September 2015, Ms. Warren served as Chief Financial Officer of Capella Healthcare, Inc., an owner and operator of general acute-care hospitals, as well as its Executive Vice President since January 2014, and as its Senior Vice President prior to that. Before joining Capella, she served as Senior Vice President and Chief Financial Officer of Gaylord Entertainment Company from 2000 to 2001, as Senior Equity Analyst and Research Director for Avondale Partners LLC and as Senior Equity Analyst for Merrill Lynch & Co. She currently serves on the Board of Directors of TruBridge, Inc. (formerly known as Computer Programs and Systems, Inc.), where she serves as Chair of the Audit Committee and a member of the Compensation Committee. She also serves on the Board of Directors of Newport Healthcare, Straive, and Virtusa, Inc. Ms. Warren is National Association of Corporate Directors (NACD) Directorship CertifiedTM and received a Corporate Directors Certificate from Harvard Business School. Ms. Warren earned a B.S. degree in Economics from Southern Methodist University and an M.B.A. from Harvard University. | Mr. Wielansky has more than 40 years of commercial real estate investment, management, and development experience. He currently serves as Chairman and CEO of Opportunistic Equities, which specializes in low income housing. He has also served as Chairman and CEO of Midland Development Group, Inc., which he re-started in 2003 and focused on the development of retail properties in the mid-west and southeast. Prior to Midland, he served as President and CEO of JDN Development Company, Inc. and as a director of JDN Realty Corporation. Before joining JDN, he served as Managing Director – Investments of Regency Centers Corporation, which in 1998 acquired Midland Development Group, a retail properties development company co-founded by Mr. Wielansky in 1983. Mr. Wielansky served as the Company’s Non-Executive Chairman of the Board from February 2018 through December 2019. He also serves as Lead Trustee of Acadia Realty Trust and served as a director of Isle of Capri Casinos, Inc. from 2007 to 2017 and Pulaski Financial Corp. from 2005 to 2016. He also serves as a member of the Board of Clayco Construction Company. Mr. Wielansky received a bachelor’s degree in Business Administration, with a major in Real Estate and Finance, from the University of Missouri – Columbia, where he is currently a member of the Strategic Development Board of the College of Business. He also serves on the Board of Directors of The Foundation for Barnes-Jewish Hospital and on the Finance Committee of both the Foundation and the Barnes-Jewish Hospital. | |||||||||||||
Ms. Warren’s extensive executive, financial, and operational experience in the healthcare and other industries led to the conclusion that she should serve as a member of the Board. | Mr. Wielansky’s real estate investment, management, and development experience, as well as his service as a director of several public companies, led to the conclusion that he should serve as a member of the Board. | |||||||||||||
2024 PROXY STATEMENT | 11 |
Proposal 1: Election of Directors
Retiring Directors
Biographical information for the Board has adopted corporate governance principles designed to assure compliancetwo retiring directors with all applicable corporate governance standards. In addition,terms expiring at the Board2024 Annual Meeting is informed regarding Brookdale’s activitiesset forth below.
Guy P. Sansone Non-Executive Chairman & Independent Director | Marcus E. Bromley Independent Director | |||||||
| Director Since:October 2019 Age:59 Public Company Directorships: • Pediatrix Medical Group, Inc. (2020 – current) • Magellan Health, Inc. (2019 – 2022) • Civitas Solutions, Inc. (2009 – 2019) • Rotech Healthcare Inc. (2004 – 2005) | | Director Since:July 2017 Age:74 Brookdale Board Committees: • Audit • Investment Public Company Directorships: • CIM Mortgage Finance Trust (2021) • Cole Credit Property Trust V, Inc. (2015 – 2020) • Cole Corporate Income Trust, Inc. (2011 – 2015) • Cole Credit Property Trust II, Inc. (2005 – 2013) • Cole Credit Property Trust III, Inc. (2008 – 2012) • Gables Residential Trust (1993 – 2005) | |||||
Mr. Sansone joined Brookdale’s Board in October 2019 and became Non-Executive Chairman of the Board in January 2020. For more than 25 years, he has led efforts to optimize the performance of healthcare and senior housing companies. Mr. Sansone has served as Chairman and CEO of H2 Health, a leading regional provider of physical rehabilitation services and clinician staffing solutions, since February 2020. Prior to that, he served as a Managing Director of Alvarez & Marsal, a global professional services firm specializing in performance improvement for large, high profile businesses, where he served as Chairman of the firm’s Healthcare Industry Group, which he founded in 2004. Mr. Sansone also served as interim Chief Executive Officer of the Visiting Nurse Service of New York, the largest non-profit home and community-based health care organization in the United States, from November 2014 to December 2016 and, prior to that, served in various executive roles at numerous healthcare companies. His prior experience in the senior housing industry includes having served as Chief Restructuring Officer and a member of the Board of Erickson Retirement Communities and as a senior consultant to Sunrise Senior Living. Mr. Sansone has served on the Board of Directors of Pediatrix Medical Group, Inc. (formerly known as Mednax, Inc.) since July 2020 and the Lead Independent Director since January 2023. He previously served as Chair of the Board of Pediatrix from July 2020 through December 2022. He also serves and has served on the Boards of Directors of numerous investor-owned and not-for-profit companies, primarily in the healthcare industry. Mr. Sansone earned a B.S. in Economics from the State University of New York at Albany. | Mr. Bromley brings more than 45 years of real estate industry leadership experience. He served as Chairman of the Board and Chief Executive Officer of Gables Residential Trust from 1993 until 2000, and then as a member of its Board until the company was acquired in 2005. Prior to joining Gables Residential Trust, Mr. Bromley was a division partner for the Southeast operation of Trammell Crow Residential Company. Mr. Bromley has served as a member of the Board of several non-listed real estate investment trusts, including serving as Non-Executive Chairman of Cole Credit Property Trust V, Inc. from June 2015 to August 2018. Mr. Bromley currently serves as a member of the advisory board of Sealy Industrial Partners, a private partnership specializing in the acquisition and operation of various industrial real estate properties. Mr. Bromley holds a B.S. in Economics from Washington & Lee University and an M.B.A. from the University of North Carolina. | |||||||
12 | |
Corporate Governance |
Corporate Governance Guidelines and periodically reviews,Code of Business Conduct and advises management with respect to, Brookdale’s annual operating plans and strategic initiatives.
The Board has adopted Corporate Governance Guidelines.Guidelines setting forth the expectations and standards the Board has with respect to the role, size, and composition of the Board and its committees, the functioning of the Board and its committees, evaluation of the Board and its committees, director compensation, succession planning, and other matters. The Board also has also adopted a Code of Business Conduct and Ethics that applies to all employees, directors, and officers, including our principal executive officer, our principal financial officer, our principal accounting officer or controller, or persons performing similar functions, as well as a Code of Ethics for Chief Executive and Senior Financial Officers, which applies to our President and Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Treasurerprincipal accounting officer, and Controller.Treasurer. These guidelines and codes are available on the Investor Relations portion of our website at www.brookdale.com.brookdaleinvestors.com. Any amendment to, or waiver from, a provision of such codes of ethics granted to a principal executive officer, principal financial officer, principal accounting officer, or controller, or person performing similar functions, or to any executive officer or director, will be posted on our website.
Director Independence
Our Corporate Governance Guidelines to provide forand the listing standards of the NYSE require that the Board be comprised of a majority voting policy applicable to uncontested elections of independent directors. The Board has affirmatively determined that seven of our eight current directors, which became effective immediately followingMses. Freed and Warren, Dr. Asher, and Messrs. Sansone, Bromley, Bumstead, and Wielansky, and the conclusiontwo nominees for election as new directors, Mses. Drayton and Mace, are “independent” under Section 303A.02 of the 2015 annual meetinglisting standards of stockholders. The Board believes this policy will better enablethe NYSE. In each case, the Board affirmatively determined that none of such individuals had a material relationship with the Company. In making these determinations, the Board considered all relevant facts and circumstances, as required by applicable NYSE listing standards. There were no transactions, relationships, or arrangements not disclosed pursuant to be responsive to stockholders who vote in the electionsItem 404(a) of directors.
Board Leadership Structure
Our Corporate Governance Guidelines do not require the separation of the positions of Chairman of the Board and Chief Executive Officer and provide that the Board is free to choose its Chairman in any way that it deems best for the Company at any given time. However, since the date of our formation, the Board has separated the positions of Chairman and Chief Executive Officer in the belief that this structure improves management'smanagement’s accountability to the Board. Mr. DeckerSansone currently serves as ExecutiveNon-Executive Chairman of the Board, and Mr. SmithMs. Baier serves as President, Chief Executive Officer and Director.
Risk Oversight
The business of the Company is managed with the oversight of the Board. As contemplated by the NYSE listing standards and as reflected in the charter of the Audit Committee, the Board has delegated to the Audit Committee
2024 PROXY STATEMENT | 13 |
Corporate Governance
the responsibility to discuss guidelines and policies governing the process by which our senior management and the relevant departments and functions of the Company (including our Internal Audit Department)internal audit function) assess and manage our exposure to risk. To that end, the Audit Committee regularly reviews our processes for risk assessment and risk management, as well as our major financial risk exposures and the steps management has taken to monitor and control such exposures. In addition,The Audit Committee also reviews our exposure to cyber security risk, the effectiveness of our cyber security, and the knowledge, experience and capabilities of the Audit Committee and management with respect to cyber security and cyber security risk. Annually, the Compensation Committee conducts a risk assessment of our compensation programs. The Board regularly receives reports from management regarding our risk exposures and monitors our risk management activities.
Social and Environmental Responsibility
The Board is responsible for overseeing and ensuring our strategy is informed by the opportunities and risks associated with our human capital resources and environmental changes and looks to the Nominating and Corporate Governance Committee to report on various social and environmental topics. The Nominating and Corporate Governance Committee reviews management’s work to develop our social and environmental initiatives and reporting. As a business of people taking care of people, we focus on human capital management, including diversity and inclusion, workplace safety, and maximizing employee satisfaction and retention. Please see our 2023 ESG Report posted to our website at brookdale.com/esg for more information about our social and environmental initiatives.
Meetings of the Board
The Board met five times in 2023. Each director attended at least 75% of the total number of meetings of the Board and committees of the Board on which he or she served during 2023. Our non-management directors, i.e., those who are not executive officers, meet in regularly scheduled executive sessions without management. Any non-management director may request that additional executive sessions be scheduled. Under our Corporate Governance Guidelines, our Non-Executive Chairman of the Board presides at executive sessions of our non-management directors. The Board has not adopted a formal policy that requires directors to attend our annual stockholders’ meetings, although they are invited and encouraged to attend. Five of the then-incumbent members of the Board attended the 2023 annual meeting of stockholders.
Communications from Stockholders
The Board has in place a process for security holders to send communications to the Board. Specifically, the Board will review and give appropriate attention to written communications submitted by stockholders and other interested parties, and will respond if and as appropriate. Absent unusual circumstances or as otherwise contemplated by committee charters, the Chairperson of the Nominating and Corporate Governance Committee will, with the assistance of our General Counsel, (1) be primarily responsible for monitoring communications from stockholders and (2) provide copies or summaries of such communications to the other directors as he or she considers appropriate. Communications will generally be forwarded to all directors if they relate to substantive matters and include suggestions or comments that the Chairperson of the Nominating and Corporate Governance Committee considers to be important for the directors to consider.
14 | |
Committees of the Board
Committees of the Board
The Board has four separate standing committees: the Audit Committee, the Compensation Committee, the Investment Committee, and the Nominating and Corporate Governance (NCG) Committee. The Nominating and Corporate Governance Committee is responsible for making recommendations to the Board with respect to committee membership assignments after consultation with the Chairman of the Board and the Chief Executive Officer. The Board is responsible for appointing committee chairs and members following review of such recommendations. The Board has adopted written charters for the standing committees, copies of which are available on the Investor Relations portion of our website located at brookdaleinvestors.com.
The following table identifies the current members of the Board’s standing committees and the number of meetings held by each committee during 2023. The Non-Executive Chairman is invited to attend, and generally attends, the regularly scheduled meetings of the standing committees.
| Audit Committee | Compensation Committee | Investment Committee | NCG Committee | |||||
Jordan R. Asher | ✓ | ✓ | ||||||
Marcus E. Bromley | ✓ | ✓ | ||||||
Frank M. Bumstead | Chair | ✓ | ||||||
Victoria L. Freed | ✓ | Chair | ||||||
Denise W. Warren | Chair | ✓ | ||||||
Lee S. Wielansky | ✓ | Chair | ||||||
Number of Meetings in 2023 | 5 | 5 | 4 | 4 | ||||
2024 PROXY STATEMENT | 15 |
Corporate Governance
The following table provides information about the key responsibilities and functions of the Board’s standing committees.
Committee | Key Functions and Additional Information | |
Audit Committee | • Reviews the audit plans and findings of the independent registered public accounting firm and our internal audit and compliance functions, as well as the results of regulatory examinations, and tracks management’s corrective action plans where necessary • Reviews our financial statements (and related regulatory filings), including any significant financial items and/or changes in accounting policies, with our senior management and independent registered public accounting firm • Reviews our risk and control issues, compliance programs, and significant tax and legal matters • Appoints annually, in its sole discretion, the independent registered public accounting firm and evaluates its independence and performance, as well as sets clear hiring policies for our hiring of employees or former employees of the independent registered public accounting firm • Reviews our risk management processes • Reviews our exposure to cyber security risk, the effectiveness of our cyber security, and the knowledge, experience and capabilities of the Audit Committee and management with respect to cyber security and cyber security risk • The Board has determined that each of Ms. Warren and Messrs. Bromley and Wielansky is an “audit committee financial expert” as defined by the rules of the SEC. No member of the Audit Committee simultaneously serves on the audit committees of more than three public companies | |
Compensation Committee | • Reviews and approves equity-related grants for our directors, officers, key employees, and consultants • Reviews and approves corporate goals and objectives relevant to our Chief Executive Officer’s and other executive officers’ compensation, evaluates the Chief Executive Officer’s and other executive officers’ performance in light of those goals and objectives, and determines the Chief Executive Officer’s and other executive officers’ compensation based on that evaluation • Recommends to the Board the compensation of our non-employee directors • Oversees our compensation and employee benefit and incentive compensation plans, and administers our 2014 Omnibus Incentive Plan (and any future incentive plans) • Administers the Clawback and Forfeiture Policy | |
Investment | • Reviews and approves (or recommends that the Board approve, as applicable) certain investments and proposed transactions on behalf of the Board • Reviews and evaluates (and makes recommendations to the Board regarding) our capital structure and financial strategies, our material capital allocation plans, and our dividend and share repurchase policies and programs • Performs such other responsibilities as may be delegated to it by the Board from time to time | |
Nominating and Corporate Governance Committee | • Reviews the performance of the Board and incumbent directors and makes recommendations to the Board regarding the selection of candidates, qualification, and competency requirements for service on the Board and the suitability of proposed nominees as directors • Advises the Board with respect to our Corporate Governance Guidelines • Oversees the annual evaluation of the Board and its committees and our management • Reports to the Board on various social, environmental, and governance topics, and reviews management’s work to develop our social and environmental initiatives and reporting | |
16 | |
Director Compensation |
Non-Employee Director Compensation Program
The table below sets forth the elements of the non-employee director compensation program. In 2023, the Compensation Committee reviewed the non-employee director compensation program, including receiving a market compensation study from the Consultant (as defined below) related to the peer group approved by the Committee for 2023 compensation decisions. Following such review, the Committee recommended, and the Board approved, the changes to the program noted below.
Cash Fees | 2023 | Changes for | Description | |||||
Annual Retainer | $ 100,000 | No change | Cash retainers are payable quarterly in arrears and are pro-rated for service less than the full year. Cash meeting fees are paid only if a director’s attendance exceeds six Board meetings or eight committee meetings per year and are payable quarterly in arrears. For 2023, each director had the opportunity to elect to receive either immediately vested shares in lieu of up to 50%, or RSUs in lieu of up to 100%, of quarterly cash compensation, as described below. | |||||
Annual Committee Chair Retainers: | ||||||||
Audit | $ 20,000 | No change | ||||||
Compensation, NCG & Investment | $ 15,000 | No change | ||||||
Meeting Attendance Fees: | ||||||||
Per Board Meeting | $ 3,000 | No change | ||||||
Per Committee Meeting (Members Only) | $ 2,000 | No change | ||||||
Equity Awards | ||||||||
Annual Grant of Immediately Vested Stock under 2014 Omnibus Incentive Plan | $ 135,000 | Increased to $160,000 (applicable to 2024 awards for 2023 service) | Typically granted in February each year for service in the prior year and pro-rated for service less than the full year. Directors may elect to receive RSUs (as described below) in lieu of the immediately vested shares. If a director retires prior to the annual grant date or concludes his or her service at the expiration of his or her term of office, a pro-rata cash amount will be payable to the director at the time of retirement or expiration in lieu of the annual grant of immediately vested shares, in recognition of the partial year of service. | |||||
Initial Grant of Restricted Shares under 2014 Omnibus Incentive Plan | $ 100,000 | No change | Granted to each new non-employee director upon joining the Board and generally will be eligible to vest on the first anniversary of the director’s appointment to the Board, subject to the director’s continued service. | |||||
Each non-employee director has the opportunity to elect to receive either immediately vested shares (issued pursuant to the Director Stock Purchase Plan) in lieu of up to 50% of his or her quarterly cash compensation, and/or restricted stock units (issued under our 2014 Omnibus Incentive Plan) in lieu of up to 100% of his or her quarterly cash compensation and/or in lieu of the annual grant of immediately vested shares. With respect to such elections, the number of shares or RSUs to be issued is based on the closing price of our common stock on the date of issuance, or
2024 PROXY STATEMENT | 17 |
Director Compensation
if such date is not a trading date, on the previous trading day’s closing price. Each RSU will be payable in the form of one share of our common stock following the director’s termination of service as a member of the Board. In addition, beginning with cash compensation earned for 2023 service, each non-employee director will have the opportunity to elect to defer up to 100% of his or her quarterly cash compensation pursuant to the Brookdale Senior Living Inc.Non-Employee Director Deferred Compensation Plan (the “Deferred Compensation Plan”), 111 Westwood Place, Suite 400, Brentwood, Tennessee 37027.which became effective December 12, 2022. Each participant in the plan will generally be entitled to receive payment of any amounts deferred under the plan upon the earliest to occur of the following: (A) thirty (30) days after the director’s separation from service; (B) thirty (30) days after the date of the director’s disability; (C) thirty (30) days after the date of the director’s death; (D) if elected by the director, a fixed date designated in a properly executed election form; or (E) within ten (10) days after the closing date of a change in control. Directors will not receive any earnings on deferred amounts.
Compensation of Non-Executive Chairman of the Board
The Board appointed Mr. Sansone as Non-Executive Chairman of the Board effective January 1, 2020. In connection with his appointment, the Committee recommended, and the Board approved, Mr. Sansone’s compensation arrangements, which include the compensation applicable generally to non-employee directors described above and an additional annual cash retainer of $100,000 for his service as Non-Executive Chairman. All cash amounts are payable as noted in the table above.
Director Stock Ownership Guidelines
The Board has adopted Stock Ownership Guidelines that require each of our non-employee directors to maintain ownership of our stock with a value of at least 5.0x the non-employee director’s annual cash retainer for service on the Board, exclusive of any retainers for service as chairman of the Board or any of its committees and any cash meeting fees. Unvested equity awards do not generally count toward satisfaction of the guidelines. Stock ownership levels are required to be achieved by the fifth anniversary of the director’s initial appointment or election to the Board. Until the expected ownership level is achieved, each director is expected to retain at least 50% of any shares obtained through our stock incentive plans. As of April 22, 2024, each of our current non-employee directors is in compliance with the guidelines and each owns stock with a value of at least 5.0x the annual cash retainer for service on the Board.
18 | |
Director Compensation for 2023
Director Compensation for 2023
The following table sets forth the compensation awarded to, earned by, or paid to our directors for the year ended December 31, 2023, other than Ms. Baier whose compensation information is set forth under “Executive Compensation”. Each of the directors included in the table served for the full-year 2023.
Name |
Fees Earned or | Stock Awards (1)(2) | All Other Compensation | Total | ||||||||||||||||
Jordan R. Asher | $ | 100,000 | $ | 135,001 | $ | – | $ | 235,001 |
| |||||||||||
Marcus E. Bromley | $ | 102,000 |
| $ | 135,001 | $ | – | $ | 237,001 |
| ||||||||||
Frank M. Bumstead | $ | 117,000 | (3) | $ | 135,001 | $ | – | $ | 252,001 |
| ||||||||||
Victoria L. Freed | $ | 117,000 |
| $ | 135,001 | $ | – | $ | 252,001 |
| ||||||||||
Guy P. Sansone | $ | 200,000 | (4) | $ | 135,001 | $ | – | $ | 335,001 |
| ||||||||||
Denise W. Warren | $ | 122,000 |
| $ | 135,001 | $ | – | $ | 257,001 |
| ||||||||||
Lee S. Wielansky | $ | 117,000 |
| $ | 135,001 | $ | – | $ | 252,001 |
| ||||||||||
| (1) | Represents the grant date fair value of the annual grant of equity for the previous year served awarded on February 15, 2023, computed in accordance with Accounting Standards Codification 718, Stock Compensation (“ASC 718”) consisting of: 45,763 immediately vested shares for each director. See Note 2 to our Consolidated Financial Statements included in our 2023 Annual Report for a summary of the assumptions made in the valuation of these awards. |
| (2) | As of December 31, 2023, none of the directors held any unvested stock awards, and the following directors held the number of vested RSUs indicated: Mr. Bromley–65,272; Mr. Bumstead–23,501; Ms. Freed–26,522; and Mr. Sansone–26,522. |
| (3) | Mr. Bumstead elected to receive vested RSUs in lieu of his cash compensation for service during 2023. The reported amount includes: 9,745 vested RSUs issued on April 1, 2023 for service during the first quarter of 2023 with a grant date fair value of $28,748; 6,812 vested RSUs issued on July 1, 2023 for service during the second quarter of 2023 with a grant date fair value of $28,747; 6,944 vested RSUs issued on October 1, 2023 for service during the third quarter of 2023 with a grant date fair value of $28,748; and 5,283 vested RSUs issued on January 1, 2024 for service during the fourth quarter of 2023 with a grant date fair value of $30,747. Any fractional share amounts were paid in cash. |
| (4) | Mr. Sansone elected to defer all cash compensation earned for service in 2023 until January 31, 2024 pursuant to the Director Deferred Compensation Plan. |
2024 PROXY STATEMENT | 19 |
Executive Officers |
The following table sets forth certain information concerning our executive officers:
Name | Age | Position | ||||
Lucinda M. Baier | 59 | |||||
President, Chief Executive Officer and Director | ||||||
George T. Hicks | 66 | |||||
Executive Vice President – Finance and Treasurer | ||||||
H. Todd Kaestner | 68 | Executive Vice President – Corporate Development and President – CCRCs | ||||
Dawn L. Kussow | 50 | Executive Vice President and Chief Financial Officer | ||||
Jaclyn C. Pritchett | 39 | Executive Vice President – Human Resources | ||||
Benjamin J. Ricci | 62 | Division Vice President – East | ||||
Chad C. White | 48 | Executive Vice President, General Counsel and Secretary | ||||
George T. Hicks
became our Executive Vice President – Finance in July 2006, and our Treasurer in January 2016. Prior to July 2006, Mr. Hicks served as Executive Vice President – Finance and Internal Audit, Secretary and Treasurer ofH. Todd Kaestner became our Executive Vice President – Corporate Development and President – CCRCs in August 2021. Prior to that, Mr. Kaestner served as our Executive Vice President – Asset Management and Division President – Entry Fee since June 2019 and Executive Vice President – Corporate Development since July 2006. Prior to joining Brookdale, Mr. Kaestner served as Executive Vice President – Corporate Development of American Retirement Corporation since September 1993 and served in various capacities for ARC’s predecessors since 1985, including Vice President – Development from 1988 to 1993 and Chief Financial Officer from 1985 to 1988. Mr. Kaestner is an honors graduate of Vanderbilt University, where he studied economics, and holds an M.B.A. in finance and economics from University of Louisville. Mr. Kaestner also serves on the Tennessee Board of Regents.
Dawn L. Kussow joined Brookdale in March 2007 and has served as Brookdale’s Executive Vice President and Chief Financial Officer since February 2023. She also served as Brookdale’s Interim Chief Financial Officer from August 2022 to October 2022. Ms. Kussow previously served as Senior Vice President and Chief Accounting Officer from January 2016 until January 2023, Vice President and Corporate Controller from February 2014 to January 2016, Senior Director of Financial Reporting from June 2009 until January 2014, and Director of Financial Reporting from March 2007 until May 2009. Ms. Kussow is a Certified Public Accountant.Before joining Brookdale, Ms. Kussow served as Director of Financial Reporting for AON Hewitt from 2005 until 2007 and practiced nine years at Deloitte & Touche, LLP, including an international assignment. She received a B.S. in Accounting from Marquette University. Ms. Kussow also serves as a member of the Finance Committee for the Betty Brinn Children’s Museum.
Jaclyn C. Pritchett joined Brookdale in 2016 and has served as Executive Vice President – Human Resources since March 2022. She previously served as Senior Vice President – Human Resources since January 2021, Senior Vice President – HR Field Operations and Talent Management from October 2020 until January 2021, Vice President of HR Field Operations from March 2019 until October 2020, and in other human resources management roles from 2016 to February 2019. Before joining Brookdale, Ms. Pritchett served as Senior Manager of Leadership Development at Bridgestone Americas. Ms. Pritchett received her B.A. in Psychology from Auburn University, as well as a Master’s
20 | |
Executive Officers
degree in Industrial-Organizational Psychology from Middle Tennessee State University. She currently serves as Executive Sponsor, Leadership Development for Middle Tennessee Society for Human Resource Management.
Benjamin J. Ricci joined Brookdale in August 2013 and has served as Division Vice President of Operations for the East Division since July 2021. He previously served as our Senior Regional Vice President of Operations from 2013 until 2018. Before joining Brookdale, Mr. Ricci was a Regional Vice President of Operations for the New England Region with Horizon Bay. In 2011, he was part of Brookdale’s acquisition of Horizon Bay and became the Regional Vice President of Operations for the Northeast Region. Mr. Ricci has more than 30 years of experience in the Senior Living industry. Mr. Ricci received a Bachelor’s of Science Degree in Business Administration from Providence College. Mr. Ricci has served as the Board Chair of the Rhode Island Assisted Living Association from 2009 to 2011. He has also served on the board of the Massachusetts Assisted Living Association since 2016.
Chad C. White joined Brookdale in February 2007 and has served as our SeniorExecutive Vice President since July 2014,January 2018, our General Counsel since March 2017 and our Secretary since March 2013. He previously served as our Senior Vice President and General Counsel from March 2017 until January 2018, our Senior Vice President and Co-General Counsel from July 2014 to March 2017, our Vice President and Co-General Counsel from March 2013 to July 2014, and our Associate General Counsel and Assistant Secretary prior to that. Before joining Brookdale, Mr. White served in legal roles with Dollar General Corporation and Bass, Berry & Sims PLC.
2024 PROXY STATEMENT | 21 |
Executive Compensation |
Compensation Discussion and Analysis
This Compensation Discussion and Analysis provides information aboutexplains the key elements of our executive compensation ofprogram and compensation decisions regarding the following named executive officers:
Name | Position | ||
Lucinda M. Baier | President and Chief Executive Officer | ||
Dawn L. Kussow | Executive Vice President and Chief | ||
Chad C. White | Executive Vice President, | ||
H. Todd Kaestner | Executive Vice President – Corporate Development and President – CCRCs | ||
George T. Hicks | Executive Vice President – Finance and Treasurer | ||
Steven E. Swain | Former Executive Vice President and Chief Financial Officer | ||
Kevin W. Bowman | Former Executive Vice President – Community Operations | ||
Each of the named executive officers served in the roles indicated for the full-year 2023, except that, Ms. Kussow was appointed to the additional role of President.serve as Executive Vice President and Chief Financial Officer effective February 24, 2023; Mr. Ohlendorf’s separationSwain’s service as Executive Vice President and Chief Financial Officer was considered to be a termination by usterminated without cause pursuanteffective as of such date; and Mr. Bowman’s service as Executive Vice President – Community Operations was terminated without cause effective January 12, 2023.
Table of Contents to the terms of applicable compensatory plansCompensation Discussion and agreements.Analysis
Status of Outstanding Performance-Based Awards Granted Prior to 2023 | ||||
Employment Agreement and Severance Policies Applicable to Named Executive Officers | 42 | |||||
| 43 | ||||||
22 | |
Compensation Discussion and Analysis
Executive Compensation Program Highlights
What We Do
Pay for Performance A significant portion of our NEOs’ target direct compensation is awarded in the form of variable, at-risk compensation based on company performance.
Clawback Policy Clawback policy provides for the mandatory recovery of erroneously awarded performance-based compensation paid as a result of any financial restatement consistent with the requirements of the NYSE.
Caps on Annual Incentive Payouts Payouts under our annual cash incentive plan are capped.
Annual Say on Pay “Say-on-pay” advisory vote conducted annually to solicit stockholders’ views on our executive compensation programs.
Robust Stock Ownership Guidelines Ownership guidelines require our CEO, CFO, and other executive officers to hold stock valued at 5x, 4x, and 3x base salary, respectively.
Annual Risk Assessment The Committee conducts a compensation program risk assessment annually.
What We Do NOT Do
No Above Median Benchmarking The Committee generally aims to provide target total direct compensation for NEOs that is within or below the market median range identified in the independent compensation consultant’s market study.
No Defined Benefit Plans/SERPs We do not sponsor any defined benefit pension or supplemental executive retirement plans (SERPs).
No Tax Gross Ups Tax gross-ups are not provided except in the limited circumstance of certain relocation expenses.
No Excessive Perquisites Minimal perquisites are provided, other than certain relocation expenses.
No Guaranteed Incentive Compensation Our annual incentive plan and performance-based long-term incentive awards do not have minimum guaranteed payout levels–this compensation is “at risk.”
No Pledging or Hedging Our insider trading policy prohibits all our directors and executive officers from pledging or hedging Brookdale stock.
No Stock Options We have never granted stock options.
2023 Target Total Direct Compensation ProcessMix (1)
 |  |
| (1) | Represents elements of 2023 target total direct compensation and, for other NEOs, the average of such other NEOs’ pay mix elements. See “Summary of 2023 Compensation Program” below for more information. |
2024 PROXY STATEMENT | 23 |
Executive Compensation
Compensation Philosophy
The Compensation Committee (the “Committee”) administersintends to ensure market-competitive executive compensation opportunities through a program designed to:
| • | emphasize pay for performance by linking a significant portion of target total direct compensation to variable, at-risk components measured by our short- and long-term financial performance and other objectives designed to focus executives on key strategic initiatives; |
align our executives’ long-term interests with those of our stockholders; and
attract and retain key executives to execute on our strategy.
In determining the appropriate level and mix of compensation for each executive officer, the Committee takes into account the officer’s experience, scope of responsibility, individual performance, and retention risk; the Committee’s independent consultant’s market compensation studies; management input; internal equity; and other information as it deems necessary and appropriate. No pre-determined weighting is assigned to any factor, and the emphasis placed on a specific factor may vary among executive officers, reflecting market practice, business needs, and retention and succession considerations at the time compensation decisions are made.
24 | |
Compensation Discussion and Analysis
Principal Elements of Compensation
Our 2023 executive compensation program generally consisted of the following principal elements:
Element | Form | Description | Link to Stockholder Value | |||
Base Salary | Cash | Amount intended to reflect the level and scope of responsibility, experience, and skills of an executive, the individual performance of the executive, retention risks, and competitive market practices. | Assists us in attracting, and encourages retention of, key executives through an amount of fixed income paid throughout the year. | |||
Annual Incentive Plan | Cash | Opportunity is at-risk with no guaranteed payout. For 2023, level of payout tied to achievement of financial objectives (revenue per available unit (“RevPAR”) and Adjusted EBITDA) and strategic objectives (key community leadership retention, resident/family satisfaction, and an ESG-related goal focused on our inclusion and diversity initiatives) as approved by the Committee. | Focuses executives on taking steps necessary to meet expectations set forth in the annual budget and business plan, including for 2023 continuing to recover from the COVID-19 pandemic, attracting, engaging, developing, and retaining the best associates, and driving resident satisfaction, which the Committee believes will in turn drive longer-term performance results. | |||
Long- Term Incentive Awards | 50%–Time-Based RSUs | Eligible to vest ratably in four annual installments beginning approximately one year following the grant date, subject to continued employment. | Promotes retention, stock ownership, and alignment of executives’ long-term interests with those of our stockholders. | |||
| 50%–Performance-Based RSUs (1) | Opportunity is at-risk with no guaranteed vesting. 75% of the 2023 award is eligible to vest in February 2026 based on year-over-year same community RevPAR growth for 2023, 2024 and 2025, and 25% of the award is eligible to vest in February 2027 based on our 3-year relative total shareholder return (“TSR”) performance. RevPAR is a key performance metric that reflects the impact of both occupancy and rate. | Encourages executives to focus on initiatives that drive growth, including further recovering lost occupancy while maintaining rate discipline, and increasing the market value of our common stock. | ||||
| (1) | A portion of Ms. Baier’s performance-based long-term incentive awards was a cash-based award due to limitations in the number of shares available for issuance under the terms of the 2014 Omnibus Incentive Plan. See “2023 Compensation Decisions—Long-Term Incentive Awards” below for further information. |
2024 PROXY STATEMENT | 25 |
Executive Compensation
Process for Determining Executive Compensation
The Committee’s process for determining executive compensation is outlined below, including overseeingthe roles of the Committee, results of our annual say-on-pay advisory vote, the Committee’s independent consultant, our management, and our compensation peer group.
Role of the Committee
The Committee, which is comprised solely of independent directors, is responsible for developing, reviewing annually, and administering our compensation program and plans and policies, performing an annual review ofapplicable to our executive compensation plans, and reviewing and approvingofficers. The Committee meets regularly, typically at least four times per year, to approve all decisions regarding the compensation of our executive officers. At the request of the Committee,Compensation decisions regarding our President and Chief Executive Officer are also approved by the independent members of the Board. The Committee reports on its actions to the full Board following each Committee meeting. In fulfilling its responsibilities with respect to executive compensation, the Committee reviews and certainapproves:
Any changes to our executive compensation philosophy;
The base salary, levels of incentive-based compensation, and all other compensation or perquisites of our other executive officers participate in Committee meetings (excluding executive sessionsofficers;
The design and framework of our incentive-based compensation plans and awards, including the Committeeapplicable performance objectives and when their own compensation is determined)targets;
Levels of achievement under such performance objectives and assist the Committee by, for example, providing informationtargets;
Updates to the Committee and making recommendations regarding our compensation programpeer group;
Any employment agreements or severance arrangements with our executive officers;
Clawback policies and levels. Our Chief Executive Officer recommendsany administration thereof; and
Compliance with, and any changes to, our officer stock ownership and retention guidelines.
Role of Say-on-Pay Vote
The Committee considers the Committee the compensationresults of our annual say-on-pay advisory vote and other feedback received from stockholders throughout the year when making executive officers, subject to the Committee’s ultimate authority and responsibility for determining the form and amount of executive compensation.
Role of Independent Compensation Philosophy and Objectives
As a base salary that reflectsbest practice, the level and scope of responsibility, experience and skillsCommittee periodically evaluates its selection of an executive, as well as competitive market practices.
26 | |
Compensation Discussion and Analysis
Role of Management
When making compensation decisions, the Committee considers input from our President and Chief Executive Officer and certain of our other executive officers. Such input generally includes providing information and analyses for review and advising the Committee concerning compensation decisions (other than when their own compensation is determined) and the design, framework, and performance objectives of our incentive-based compensation plans and awards. Our President and Chief Executive Officer provides compensation recommendations related to our other executive officers for the Committee’s consideration.
Compensation Peer Group
Typically annually, the Committee reviews and approves a compensation peer group comprised of companies recommended by the Consultant. The compensation peer group data is then used by the Consultant when preparing independent market compensation studies for the Committee. The Committee generally uses such peer group data and the Consultant’s studies:
To assess the competitiveness of the target direct compensation and underlying pay mix awarded to our executive officers; and
To evaluate the design, framework, and performance objectives of our incentive-based compensation plans and awards.
The Committee, as advised by the Consultant, generally considered base salary and target annual cash compensation within a range of +/- 15%, and target total direct compensation within a range of +/- 20%, of median as reported in the Consultant’s market compensation studies to be competitive. Median compensation rates are one of many factors the Committee considers when determining target pay opportunities for our executive officers. Other factors include the executive’s qualifications, experience, and scope of responsibilities; recruiting considerations; internal pay parity; and Company and individual performance, among others.
The peer group used to inform 2023 target compensation opportunities included 17 companies in the health care facilities, healthcare services, healthcare REIT, hospitality, and restaurant industries. The Committee believes that inclusion of companies from these industries is reflective of the talent market for our business. The peer group companies chosen from the various industries are intended to be reasonably comparable to Brookdale in terms of their revenue, market capitalization, enterprise value, EBITDA, and/or number of employees. For 2023 compensation decisions, the Consultant recommended no updates to our prior-year compensation peer group, which is set forth below.
2023 Peer Group | ||||
| Acadia Healthcare Company, Inc. | Encompass Health Corporation | Quest Diagnostics Incorporated | ||
| Amedisys, Inc. | Hyatt Hotels Corporation | Select Medical Holdings Corporation | ||
| Bloomin’ Brands, Inc. | LHC Group, Inc. | The Ensign Group, Inc. | ||
| Brinker International, Inc. | National Healthcare Corporation | Universal Health Services, Inc. | ||
| Chemed Corporation | Pediatrix Medical Group, Inc. | Welltower Inc. | ||
| Community Health Systems, Inc. | Wyndham Hotels & Resorts, Inc. | |||
2024 PROXY STATEMENT | 27 |
Executive Compensation
2023 Compensation Decisions
Summary of 2023 Compensation Program
Annual Compensation Decisions
When making annual executive compensation decisions in February 2023, the Committee considered the Consultant’s market compensation study based on the same peer group adopted by the Committee and, for certain roles, other published survey information, our 2023 business plan, performance objectives under our incentive plans, and the responsibilities and individual performance of each continuing named executive officer. Compensation decisions for Ms. Kussow are discussed separately under “Compensation Arrangements with Ms. Kussow” below.
Following conclusion of this review, the Committee found that Ms. Baier’s target total direct compensation approximated the market median range, including the components of base salary and target long-term incentive opportunities, while her target bonus percentage was below median resulting in target total annual cash at the lower end of the market median range. The Committee determined that the target total direct compensation of Mr. White was within the market median range, and that the target total direct compensation of Mr. Hicks was above the high end of market median range, while his base salary was at the lower end of the market median range. Because Mr. Kaestner’s role is somewhat different than any of the executive roles reflected by the market data, no external comparison was considered. In reviewing Mr. Kaestner’s target total direct compensation, the Committee also took into account his scope of responsibilities and internal pay equity.
The Committee determined to increase Ms. Baier’s base salary by approximately 2% and to increase the base salaries for Messrs. White, Kaestner and Hicks by approximately 2%, 3% and 7%, respectively, due to the factors noted above and individual contributions. The Committee determined not to adjust the target annual incentive awards as a percent of base salary for the named executive officers, other than a marginal increase from 135% to 137% for Ms. Baier. After giving effect to the changes noted above and the changes in target long-term incentive award values reflected in the table below, the Committee determined that the target total direct compensation of each such named executive officer was in the market median range, except for Mr. Hicks who was above the market median range.
The table below sets forth the annual compensation decisions with respect to the continuing named executive officers other than Ms. Kussow. The table excludes the amounts reported in the All Other Compensation column of the Summary Compensation Table (generally employer matching on our 401(k) plan and employer-paid premiums on life and disability insurance).
| 2023 Base Salary | Change v. 2022 | 2023 Target Annual Incentive Opportunity | Change v. 2022 | 2023 Grant Value of Long- Term Incentive Awards (1) | Change v. 2022 (1) | 2023 Target Total Direct Compensation | Change v. 2022 | |||||||||||||||
Ms. Baier |
| $ 990,000 |
| 2% | 137% | 1% | $ | 5,000,001 |
| –% | $ | 7,346,301 |
| 1% | ||||||||
Mr. White |
| $ 475,000 |
| 2% | 80% | –% | $ | 675,001 |
| 4% | $ | 1,530,001 |
| 3% | ||||||||
Mr. Kaestner |
| $ 445,000 |
| 3% | 80% | –% | $ | 459,999 |
| 2% | $ | 1,260,999 |
| 3% | ||||||||
Mr. Hicks |
| $ 295,000 |
| 7% | 70% | –% | $ | 300,000 |
| –% | $ | 801,500 |
| 4% | ||||||||
| (1) | The dollar amount of the long-term incentive awards, and the percentage change versus 2022, is based on the grant value of such awards (i.e., the number of RSUs granted at target performance, multiplied by the stock price on the date of grant). Ms. Baier’s long-term incentive awards included $1,806,667 in a cash-based award (at target performance) with the remainder in time- and performance-based RSUs for a total grant value of $5,000,001. See “2023 Compensation Decisions—Long-Term Incentive Awards” below for further information. |
28 | |
Compensation Discussion and Analysis
Compensation Arrangements with Ms. Kussow
On January 10, 2023, the Board appointed Ms. Kussow Executive Vice President and Chief Financial Officer effective February 24, 2023, at which time the Committee approved the following compensation arrangements for 2023: (i) an annual base salary of $530,000; (ii) eligibility to participate in the Company’s annual cash incentive program generally applicable to members of management, with the target cash bonus reflecting 80% of her base salary paid during the plan year while serving as Executive Vice President and Chief Financial Officer; and (iii) beginning in 2023, eligibility to receive annual long-term incentive awards under the Company’s 2014 Omnibus Incentive Plan with an aggregate grant date value of $700,000.
In addition, under the terms of her offer letter, Ms. Kussow is eligible for relocation assistance in accordance with our policy to assist her move to the Nashville, Tennessee area if such relocation is requested by the Company. Ms. Kussow has agreed to reimburse us for the full amount of relocation benefits provided to her if she voluntarily terminates her full-time employment prior to the second anniversary of the date she relocates to the Nashville, Tennessee area at the request of the Company.
Prior to February 24, 2023, Ms. Kussow’s compensation arrangement was as follows: (i) an annual base salary of $349,999 and (ii) eligibility to participate in the Company’s annual incentive program, with the target cash bonus reflecting 50% of her base salary paid prior to her service as Executive Vice President and Chief Financial Officer.
Annual Incentive Plan
The named executive officers were eligible to participate in our 2023 annual incentive plan adopted by the Committee in February 2023. The 2023 annual incentive plan continued to be based on company financial and strategic objectives weighted 70% and 30% of target, respectively, and all amounts earned were to be paid out following the end of 2023 but no later than March 15, 2024. Cash amounts payable under the plan were to be determined by the Committee following conclusion of fiscal 2023 based on our results relative to performance targets approved by the Committee. There were no guaranteed payout levels utilized, and the aggregate threshold and maximum payouts were 32.5% and 190%, respectively, of the target opportunity.
For 2023, the financial objectives are our full-year 2023 consolidated portfolio RevPAR and our full-year Adjusted EBITDA, with the target levels of performance generally reflective of our 2023 budget approved by the Board. The Committee approved Adjusted EBITDA as a financial objective for 2023 instead of Facility Operating Income, which had been used in prior years, because Adjusted EBITDA includes general and administrative expenses and is one of the metrics used by management for budgeting and planning purposes, to review the Company’s historic and prospective core operating performance, and to make day-to-day operating decisions. The strategic objectives include retention of key community leadership at our consolidated comparable community portfolio, improvement in resident and family member satisfaction (as reflected by net promoter score (NPS) improvement), and an ESG-related strategic objective focused on our inclusion and diversity initiatives. Such ESG-related objective measured our progress on offering the Brookdale EXPAND program to all communities and completing the program for a selected cohort of a minimum number of communities. The Brookdale EXPAND program is designed to help develop and prepare a diverse cohort of high potential community leaders who have interest in future roles as executive directors of our communities, and is comprised of a six month program that includes community experiences, department/product line rotation, training sessions, leadership assessment, and a capstone.
2024 PROXY STATEMENT | 29 |
Executive Compensation
The table below sets forth the performance objectives, weighting, performance targets, and our actual performance with respect to the 2023 annual incentive plan.
Objective
|
Weighting
|
Description and Link to Strategy and Business Plan
| ||||||||||||||
RevPAR | 40% | RevPAR is a key performance metric that reflects the impact of both occupancy and rate. For purposes of the 2023 annual incentive plan, RevPAR was defined as our resident fee revenue for the consolidated communities portfolio (excluding revenue for private duty services provided to seniors living outside of our communities and entrance fee amortization) for the applicable period, divided by the weighted average number of available units in the portfolio for the period, divided by the number of months for the period. The Board and management use this measure in the budgeting process and when evaluating our results. This measure was intended to focus management on recovering occupancy lost due to the COVID-19 pandemic while maintaining rate discipline. The target levels of performance generally reflected our 2023 budget approved by the Board at the beginning of 2023. | Level | Payout | Target / Actual | |||||||||||
| Maximum | 200% | $ | 4,798 | |||||||||||||
| Target | 100% | $ | 4,658 | |||||||||||||
| Actual | 74% | $ | 4,577 | |||||||||||||
| Threshold | 25% | $ | 4,425 | |||||||||||||
Adjusted EBITDA (1) | 30% | Adjusted EBITDA is a non-GAAP performance measure that the Company defines as net income (loss) excluding: benefit/ provision for income taxes, non-operating income/expense items, and depreciation and amortization; and further adjusted to exclude income/expense associated with non-cash, non-operational, transactional, cost reduction, or organizational restructuring items that management does not consider as part of the Company’s underlying core operating performance and that management believes impact the comparability of performance between periods. For 2023, such other items include non-cash impairment charges, operating lease expense adjustment, non-cash stock-based compensation expense, gain/loss on sale of communities, and transaction and organizational restructuring costs. Transaction costs include those directly related to acquisition, disposition, financing, and leasing activity, and are primarily comprised of legal, finance, consulting, professional fees, and other third-party costs. Organizational restructuring costs include those related to the Company’s efforts to reduce general and administrative expense and its senior leadership changes, including severance. The Board and management use this measure in the budgeting process and when evaluating our results. The target levels of performance generally reflected our 2023 budget approved by the Board and would require management to grow the Company’s Adjusted EBITDA by 45% over 2022 results. During 2023, the Committee approved an equitable adjustment to the Company’s reported actual Adjusted EBITDA solely as a result of an accounting change that was expected to result from consummation of the lease amendments with Welltower Inc. (“Welltower”). | Level | Payout | | Target / Actual ($ in MM) |
| |||||||||
| Maximum | 200% | $ | 368 | |||||||||||||
| Actual (2) | 127% | $ | 355 | |||||||||||||
| Target | 100% | $ | 350 | |||||||||||||
| Threshold | 25% | $ | 315 | |||||||||||||
Key Community Leader Retention | 10% | Brookdale’s culture is based on servant leadership, and we believe engaged associates lead to an enhanced resident experience and lower turnover, leading to improved operations. The key community leader retention objective applied to the three key positions at our consolidated comparable communities (executive directors, sales directors, and health and wellness/nursing directors). The target level performance reflected a 100 basis points improvement from our 2022 performance for the 2023 consolidated comparable communities portfolio. | Level | Payout | Target / Actual | |||||||||||
| Maximum | 200% | 65.1 | % | |||||||||||||
| Actual | 127% | 63.3 | % | |||||||||||||
| Target | 100% | 62.6 | % | |||||||||||||
| Threshold | 25% | 61.6 | % | |||||||||||||
Resident / Family Satisfaction | 10% | The Committee believed it was appropriate to tie an element of named executive officer compensation to increasing resident and family member satisfaction as the Company continues to recover from the COVID-19 pandemic. The measure is tied to an increase in the Company’s NPS. | Level | Payout | Target / Actual | |||||||||||
| Maximum | 200% | 38 | ||||||||||||||
| Target | 100% | 22 | ||||||||||||||
| Actual | 25% | 14 | ||||||||||||||
| Threshold | 25% | 12 | ||||||||||||||
30 | |
Compensation Discussion and Analysis
Objective | Weighting | Description and Link to Strategy and Business Plan | ||||||||||||||
ESG / Diversity-Related Goal | 10% | The Committee believed it was appropriate to tie an element of named executive officer compensation to progress on relevant ESG metrics. Given that we are a people-focused organization and one of our key strategies relates to attracting, engaging, developing and retaining the best associates, the Committee believed that a goal focused on our inclusion and diversity initiatives would be the most appropriate measure for 2023. For the 2023 plan, the actual goal was to further deploy the Brookdale EXPAND program (as described above). The threshold, target and maximum payout level for this goal was 100%, and the achievement of the goal was to be determined by the Committee following completion of the performance period. Following year end, the Committee confirmed that the goal had been achieved and certified payout at target level performance (i.e. 100%). | ||||||||||||||
| (1) | Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles (“GAAP”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for information on how we calculated Adjusted EBITDA for 2023, including a reconciliation to the closest GAAP financial measure. For purposes of determining targets for bonus opportunities and achievement of such targets for 2023, consolidated Adjusted EBITDA was calculated as described in our Form 10-K. Our actual results were $336 million, as further equitably adjusted by the Compensation Committee in its discretion to exclude the impact of changes in lease classifications a result of the Welltower lease amendments in mid-2023. See note (2). |
| (2) | Actual results of $336 million were equitably adjusted as described above to give effect to the $19.3 million impact of the Welltower transaction as approved by the Committee. |
Long-Term Incentive Awards
For the 2023 executive officer compensation program, the Committee continued awarding all long-term incentive awards for named executive officers in the form of time- and performance-based RSUs, except for Ms. Baier’s award as described below, which also included performance-based cash. For the 2023 awards, the Committee used a 50/50 grant value mix of time- and performance-based full value awards.
The agreements associated with the 2023 long-term incentive awards for the named executive officers contain non-competition, non-solicitation, non-disparagement, and confidentiality covenants and set forth the treatment of such awards in connection with termination of employment and a change in control (as described below under “Potential Payments Upon Termination or Change in Control”). Consistent with the prior year, “double-trigger” acceleration of vesting applies in connection with a change in control. That is, vesting will only accelerate in connection with a change in control if either the awards are not assumed, continued, or substituted with an award relating to a publicly-traded security of the acquiror (or the Company) on the same terms and conditions that were applicable to the outstanding awards immediately prior to the change in control, or the participant experiences a qualifying termination within 12 months after the change in control.
Each RSU is payable in the form of one share of our common stock upon vesting. To the extent we declare cash or stock dividends on our shares of common stock, the RSUs awarded will accrue cash equivalents or shares to be paid only to the extent the underlying RSUs ultimately vest.
Ms. Baier’s 2023 long-term incentive awards consisted of an award of time-based RSUs, an award of performance-based RSUs, and a performance-based cash award that was issued outside of the Company’s 2014 Omnibus Incentive Plan. The target amount of her cash award of $1,806,667 represented approximately 36.1% of her target long-term incentive compensation awarded for 2023, and the remaining approximately 63.9% was awarded in the form of time-based RSUs and performance-based RSUs under the 2014 Omnibus Incentive Plan generally consistent with the prior year, such that 50% of her aggregate 2023 long-term incentive compensation awards consisted of time-based RSUs and the remaining 50% of her aggregate 2023 long-term incentive compensation awards consisted of a combination of performance-based RSUs and the performance-based cash award.
2024 PROXY STATEMENT | 31 |
Executive Compensation
Awards of Time-Based RSUs. The awards of time-based RSUs granted in February 2023 are eligible to vest ratably in four annual installments beginning February 27, 2024, subject to continued employment.
Awards of Performance-Based RSUs. With respect to the awards of performance-based RSUs granted in February 2023, except with respect to Ms. Baier, 75% of the awards are eligible to vest on February 27, 2026 and 25% are eligible to vest on February 27, 2027, in each case subject to continued employment and achievement of performance objectives established by the Committee. Ms. Baier’s performance-based RSUs are eligible to vest on February 27, 2026, subject to continued employment and achievement of performance objectives established by the Committee. With respect to all performance-based RSUs granted in February 2023, the portion of the target award eligible to vest on February 27, 2026 is divided into three equal tranches, each of which are subject to year-over-year same community RevPAR growth for 2023, 2024, and 2025, respectively. The portion of the target award eligible to vest on February 27, 2027 is subject to TSR relative to the companies in the S&P Midcap 400 Index for the three-year period ending December 31, 2025. Achievement at the threshold, target, and maximum or above performance levels will result in vesting of 50%, 100%, and 150% of the RSUs in each tranche, respectively, with vesting percentages to be interpolated for performance between the levels specified in the table below. The weighting, performance objectives, and performance targets for the performance-based RSUs are outlined below.
Performance-Based Cash Award. With respect to Ms. Baier’s target performance-based cash award, approximately 65.4% is eligible to vest on February 27, 2026 and approximately 34.6% is eligible to vest on February 27, 2027, such that, in the aggregate, 75% of Ms. Baier’s target 2023 performance-based RSU award and performance-based cash award is eligible to vest on February 27, 2026 and 25% is eligible to vest on February 27, 2027, in each case subject to continued employment and achievement of performance objectives established by the Committee. The portion of the target award eligible to vest on February 27, 2026 is divided into three equal tranches, each of which are subject to year-over-year same community RevPAR growth for 2023, 2024, and 2025, respectively. The portion of the target award eligible to vest on February 27, 2027 is subject to TSR relative to the companies in the S&P Midcap 400 Index for the three-year period ending December 31, 2025. Performance below the threshold level of achievement for a performance objective will result in forfeiture of the target cash amount for the applicable portion of the award, performance at the threshold level of achievement for a performance objective will result in the vesting of 50% of the applicable target cash amount, performance at the targeted level of achievement will result in the vesting of 100% of the applicable target cash amount, and performance at or above the maximum level of achievement will result in vesting of 150% of the applicable target cash amount, with vesting percentages to be interpolated between the levels.
The following table provides the targeted award amounts of the 2023 time- and performance-based awards.
Performance | Time-Based RSUs | Performance-Based RSUs (at Target) | Performance-Based Cash (at Target) | |||||||||||
See table below for summary of performance objectives and achievement levels of completed performance periods | Ms. Baier | 847,458 | 235,028 | $1,806,667 | ||||||||||
| Ms. Kussow | 118,644 | 118,644 | – | |||||||||||
| Mr. White | 114,407 | 114,407 | – | |||||||||||
| Mr. Kaestner | 77,966 | 77,966 | – | |||||||||||
| Mr. Hicks | 50,848 | 50,847 | – | |||||||||||
32 | |
Compensation Discussion and Analysis
Performance Objective | Weighting (3) | Description and Link to Strategy and Business Plan | Vesting Date | Performance Targets | ||||||||||
2023 year-over-year growth of same community RevPAR (1) | 25% | The Committee determined to use year-over-year growth in same community RevPAR to incentivize management to deliver long-term top-line growth by recovering occupancy lost due to the pandemic while maintaining rate discipline. RevPAR is a key performance metric utilized by the Board and management that reflects the impact of both occupancy and rate. | 2/27/2026 | Level | % of Target RSUs / Cash Vesting | 2023 Growth | ||||||||
| Maximum | 150% | 16.0% | ||||||||||||
| Target | 100% | 13.5% | ||||||||||||
| Actual | 58% | 11.4% | ||||||||||||
| Threshold | 50% | 11.0% | ||||||||||||
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2024 year-over-year growth of same community RevPAR (1) | 25% | 2/27/2026 | Level | % of Target RSUs / Cash Vesting | 2024 Growth | |||||||||
| Maximum | 150% | 12.5% | ||||||||||||
| Target | 100% | 10.0% | ||||||||||||
| Threshold | 50% | 7.5% | ||||||||||||
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2025 year-over-year growth of same community RevPAR (1) | 25% | 2/27/2026 | Level | % of Target RSUs / Cash Vesting | 2025 Growth | |||||||||
| Maximum | 150% | 9.5% | ||||||||||||
| Target | 100% | 7.0% | ||||||||||||
| Threshold | 50% | 4.5% | ||||||||||||
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3-Year Relative TSR Compared to S&P Midcap 400 Index Companies (2) | 25% | The relative total shareholder return (“TSR”) objective aligns our management’s priorities with those of our stockholders to establish and achieve long-term goals designed to increase the market value of our common stock relative to the constituent companies of a broad-based comparable index of companies.
| 2/27/2027 | Level | % of Target RSUs / Cash Vesting | Relative TSR Rank | ||||||||
| Maximum | 150% | 75th %ile | ||||||||||||
| Target | 100% | 50th %ile | ||||||||||||
| Threshold | 50% | 25th %ile | ||||||||||||
| (1) | For purposes of these awards, same community RevPAR means the average monthly senior housing resident fee revenues per available unit of the same community portfolio as reported in our SEC filings for the applicable performance period. Same community RevPAR is calculated as resident fee revenues, excluding revenue for private duty services provided to seniors living outside our communities and entrance fee amortization, of the same community portfolio for the applicable fiscal year, divided by the weighted average number of available units in the same community portfolio for the applicable fiscal year, divided by twelve. |
| (2) | 3-Year Relative TSR compares our compound annual TSR to the constituent companies of the S&P Midcap 400 index for the period beginning January 1, 2023 and ending December 31, 2025, assuming reinvestment of dividends or distributions. The award agreements provide that no additional RSUs (or cash with respect to Ms. Baier) beyond the target amount will vest and be issued (or paid) on such tranche if our compound annual TSR is negative for the performance period. |
| (3) | Ms. Baier’s performance-based RSUs are eligible to vest on February 27, 2026, with three tranches weighted one-third each for each of the RevPAR performance objectives, and her performance-based cash award is eligible to vest as follows: $1,181,667 on February 27, 2026 based on actual achievement of each of the three tranches weighted one-third for each of the RevPAR performance objectives and $625,000 on February 27, 2027 based on actual achievement of the TSR performance objective. In the aggregate, 75% of Ms. Baier’s target 2023 performance-based RSU award and performance-based cash award is eligible to vest on February 27, 2026 and 25% is eligible to vest on February 27, 2027. |
2024 PROXY STATEMENT | 33 |
Executive Compensation
2023 Tranche Performance
In February 2024, the Committee determined that our 2023 year-over-year growth in same community RevPAR was 11.4%, corresponding to an achievement level of 58% of target for the 2023 tranche of the performance-based long-term incentive awards granted to the named executive officers in 2023. As a result, the named executive officers forfeited the following number of RSUs: Ms. Baier–32,903; Ms. Kussow–12,458; Mr. White–12,012; Mr. Kaestner–8,186; and Mr. Hicks–5,339. Ms. Baier also forfeited $165,434 from her cash award. Earned amounts for the 2023 performance period will vest on February 27, 2026, subject to the executives’ continued employment.
2023 Compensation Results
Summary of Compensation Results
The table below sets forth the amount of compensation earned for 2023 by our named executive officers. The value of restricted shares and RSUs that vested is based on the closing price per share of our stock on the applicable vesting dates. The table excludes the amounts reported in the All Other Compensation column of the Summary Compensation Table (generally certain severance payments for Mr. Swain and Mr. Bowman, employer matching on our 401(k) plan, and employer-paid premiums on life and disability insurance). See “Summary Compensation Table” and “Payments in Connection with Mr. Swain’s Termination” and “Payments in Connection with Mr. Bowman’s Termination” below for a summary of payments made in connection with their respective terminations on February 24, 2023 and January 12, 2023.
| 2023 Base Salary Earned | Annual Incentive Earned for 2023(1) | Value of Long Term Incentive Awards that Vested in 2023(2)(3) | Total Compensation Earned | |||||||||||||
Ms. Baier | $990,000 | $1,258,419 | $1,367,794 | $3,616,213 | ||||||||||||
Ms. Kussow | $516,461 | $ 364,997 | $ 80,154 | $ 961,612 | ||||||||||||
Mr. White | $475,000 | $ 352,581 | $ 157,817 | $ 985,398 | ||||||||||||
Mr. Kaestner | $445,000 | $ 330,313 | $ 112,611 | $ 887,924 | ||||||||||||
Mr. Hicks | $295,000 | $ 191,600 | $ 108,471 | $ 595,071 | ||||||||||||
Mr. Swain | $ 90,769 | $ 67,376 | $ 455,583 | $ 613,728 | ||||||||||||
Mr. Bowman | $ 16,442 | $ 12,205 | $ 105,880 | $ 134,527 | ||||||||||||
| (1) | For Mr. Swain and Mr. Bowman, the amount earned was prorated based on the number of days employed during 2023. |
| (2) | Includes for Ms. Kussow and Mr. Bowman $10,680 and $10,938, respectively, associated with the vesting of the 2023 tranche of time-based cash long-term incentive awards granted to them in February 2021. |
| (3) | Includes for Mr. Swain and Mr. Bowman 138,475 and 32,626, respectively, outstanding time-based restricted shares and restricted stock units that immediately vested upon their respective terminations. |
Annual Incentive Plan Results
As described above, based on our actual results for the year, the Committee determined that we achieved between threshold and target-level performance for the RevPAR-based financial objective under our annual incentive plan and that we achieved between the target-level and maximum performance for the Adjusted EBITDA-based financial objective.
34 | |
Compensation Discussion and Analysis
For the strategic objectives under our annual incentive plan, the Committee determined that we achieved between the target-level and maximum performance for the key community leader retention performance measure, that we achieved at the threshold level of performance for the NPS measure, and that we achieved the target level of performance for the ESG/diversity-related performance measure.
A summary of the achievement and payments to our named executive officers under the 2023 annual incentive plan is provided below. See “2023 Compensation Decisions–Annual Incentive Plan” above for the performance objectives and targets, and our actual performance, for each of the financial and strategic objectives.
| Financial Objectives (70% Weighting) | Strategic Objectives (30% Weighting) | Total | ||||||||||||||||||||||||
| Achieved | Payout | Achieved | Payout | Achieved | Payout | |||||||||||||||||||||
Ms. Baier | 96.5% | $ | 916,497 |
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| 84.0% | $ | 341,922 |
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| 92.8% | $ | 1,258,419 | |||||||||||
Ms. Kussow | $ | 265,826 |
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| $ | 99,171 |
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| $ | 364,997 | ||||||||||||||
Mr. White | $ | 256,784 |
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| $ | 95,797 |
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| $ | 352,581 | ||||||||||||||
Mr. Kaestner | $ | 240,566 |
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| $ | 89,747 |
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| $ | 330,313 | ||||||||||||||
Mr. Hicks | $ | 139,542 |
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| $ | 52,058 |
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| $ | 191,600 | ||||||||||||||
Mr. Swain | $ | 49,070 |
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| $ | 18,306 |
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| $ | 67,376 | ||||||||||||||
Mr. Bowman | $ | 8,889 |
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| $ | 3,316 |
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| $ | 12,205 | ||||||||||||||
Long-Term Incentive Awards Results
Summary of Vesting
During 2023, the named executive officers realized the compensation shown in the table below with respect to vesting of restricted shares, RSUs and cash long-term incentive awards granted prior to 2023. The value of shares or RSUs that vested is based on the closing price per share of our stock on the vesting date. No outstanding performance-based long-term incentive awards previously granted to the named executive officers vested or were eligible to vest in 2023.
| Vesting of Time-Based Restricted Shares and RSUs Granted in 2019–2022 | Vesting of Time-Based Cash Awards Granted in 2021 | Total Vesting of Restricted Shares, RSUs and Cash Awards in 2023 | ||||||||||||||||||||||
| No. of Shares / RSUs | Value | Value | No. of Shares / RSUs | Value | ||||||||||||||||||||
Ms. Baier | 411,986 | $ | 1,367,764 | – | 411,986 | $ | 1,367,764 | |||||||||||||||||
Ms. Kussow | 20,926 | $ | 69,474 | $10,680 | 20,926 | $ | 80,154 | |||||||||||||||||
Mr. White | 47,535 | $ | 157,817 | – | 47,535 | $ | 157,817 | |||||||||||||||||
Mr. Kaestner | 33,919 | $ | 112,611 | – | 33,919 | $ | 112,611 | |||||||||||||||||
Mr. Hicks | 32,672 | $ | 108,471 | 32,672 | $ | 108,471 | ||||||||||||||||||
Mr. Swain | 138,475 | $ | 455,583 | – | 138,475 | $ | 455,583 | |||||||||||||||||
Mr. Bowman | 32,626 | $ | 94,942 | $10,938 | 32,626 | $ | 105,880 | |||||||||||||||||
2024 PROXY STATEMENT | 35 |
Executive Compensation
Status of Outstanding Performance-Based Awards Granted Prior to 2023
As of December 31, 2023, the named executive officers held the number of performance-based RSUs and performance-based cash awards granted prior to 2023 as outlined below. Vesting of the performance-based awards is subject to continued employment (except with respect to Messrs. Swain and Bowman) and achievement of performance objectives established by the Committee. Performance below the threshold level of achievement has resulted or will result in forfeiture of the applicable tranche, and vesting percentages will be interpolated between the steps shown in the tables below.
2021 Performance-Based Cash Awards
In February 2021, the Committee awarded performance-based cash long-term incentive awards to the named executive officers, with the targeted award amounts listed below.
Performance | Cash at Target | |||||
See table below for summary of performance objectives and achievement levels of completed performance periods | Ms. Baier | $ | 2,765,000 | |||
| Ms. Kussow | $ | 42,720 | ||||
| Mr. White | $ | 322,500 | ||||
| Mr. Kaestner | $ | 242,500 | ||||
| Mr. Hicks | $ | 150,000 | ||||
| Mr. Swain | $ | 962,500 | ||||
| Mr. Bowman | $ | 43,750 | ||||
Mr. Bowman also received a similar performance-based cash long-term incentive award in October 2021, with a target award amount of $72,466. Such award was subject to the same performance measures listed below (other than the relative TSR goal) and was eligible to vest on November 19, 2024.
Based on our actual levels of achievement of the resident and associate vaccine acceptance rate goals in 2021 and our actual level of achievement of the year-over-year RevPAR growth goal for 2022 and 2023, the Committee has certified that 62.5% of the targeted cash amount from the 2021 tranche, 150% of the targeted cash amount from the 2022 tranche and 150% of the targeted cash amount from the 2023 tranche was eligible to vest on February 27, 2024 (or will be eligible to vest on November 19, 2024, in the case of Mr. Bowman’s October 2021 award). Based on our actual levels of achievement of the 3-year relative TSR tranche, the Committee certified that 114.8% of the targeted cash amount will be eligible to vest on February 27, 2025. See “Payments in Connection with Mr. Swain’s Termination” and “Payments in Connection with Mr. Bowman’s Termination” below for a summary of the treatment of these awards upon their respective terminations on February 24, 2023 and January 12, 2023.
36 | |
Compensation Discussion and Analysis
Performance Objective | Weighting(1) | Vesting Date | Performance Targets | |||||||||||
2021 resident COVID-19 vaccine acceptance rate | 25% | 2/27/2024 | Level | % of Target Cash Vesting | | 2021 Resident Vaccine Rate | ||||||||
| Maximum | 150% | 95% | ||||||||||||
| Actual | 125% | 93% | ||||||||||||
| Target | 100% | 90% | ||||||||||||
| Threshold | 25% | 75% | ||||||||||||
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2021 associate COVID-19 vaccine acceptance rate (50% sub-weighting) | 2/27/2024 | Level | % of Target Cash Vesting | | 2021 Associate Vaccine Rate | |||||||||
| Maximum | 150% | 85% | ||||||||||||
| Target | 100% | 75% | ||||||||||||
| Threshold | 25% | 60% | ||||||||||||
| Actual | 0% | 57% | ||||||||||||
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2022 year-over-year improvement to same community RevPAR(2) | 25% | 2/27/2024 | Level | % of Target Cash Vesting | | 2022 Growth | ||||||||
| Actual | 150% | 10.2% | ||||||||||||
| Maximum | 150% | 3.5% | ||||||||||||
| Target | 100% | 2.5% | ||||||||||||
| Threshold | 50% | 1.5% | ||||||||||||
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2023 year-over-year improvement to same community RevPAR(2) | 25% | 2/27/2024 | Level | % of Target Cash Vesting | | 2023 Growth | ||||||||
| Actual | 150% | 11.4% | ||||||||||||
| Maximum | 150% | 3.5% | ||||||||||||
| Target | 100% | 2.5% | ||||||||||||
| Threshold | 50% | 1.5% | ||||||||||||
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3-Year Relative TSR Compared to S&P Midcap 400 Index Companies(3) | 25% | 2/27/2025 | Level | % of Target Cash Vesting | | Relative TSR Rank | ||||||||
| Maximum | 150% | 75th %ile | ||||||||||||
| Actual | 114.8% | 57.4th %ile | ||||||||||||
| Target | 100% | 50th %ile | ||||||||||||
| Threshold | 50% | 25th %ile | ||||||||||||
| (1) | Mr. Bowman’s October 2021 award was weighted 33 1/3% between the 2021 vaccine acceptance rate goals, the 2022 RevPAR growth goal and the 2023 RevPAR growth goal and was eligible to vest on November 19, 2024. See “Payments in Connection with Mr. Bowman’s Termination” below for a summary of the treatment of his awards upon his termination on January 12, 2023. |
| (2) | For purposes of the 2021 awards, same community RevPAR means the average monthly senior housing resident fee revenues per available unit of the same community portfolio as reported in our SEC filings for the applicable performance period. Same community RevPAR is calculated as resident fee revenues, excluding revenue from our former Health Care Services segment, revenue for private duty services provided to seniors living outside our communities, and entrance fee amortization, of the same community portfolio for the applicable fiscal year, divided by the weighted average number of available units in the same community portfolio for the applicable fiscal year, divided by twelve. |
2024 PROXY STATEMENT | 37 |
Executive Compensation
| (3) | 3-Year Relative TSR compares our compound annual TSR to the constituent companies of the S&P Midcap 400 index for the period beginning January 1, 2021 and ending December 31, 2023, assuming reinvestment of dividends or distributions. The award agreements provide that no additional cash beyond the target amount will be paid on such tranche if our compound annual TSR is negative for the performance period. |
Based on our actual levels of achievement, the following amounts were paid to the named executive officers in February 2024 and are expected to be paid in February 2025 subject to continued employment (except with respect to Messrs. Swain and Bowman).
| Payout February 2024 | Payout February 2025 | Total Payout | ||||||||||||||||||
Ms. Baier | $ | 2,505,781 |
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| $ | 793,555 |
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| $ | 3,299,336 | ||||||||
Ms. Kussow | $ | 38,715 |
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| $ | 12,261 |
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| $ | 50,976 | ||||||||
Mr. White | $ | 292,267 |
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| $ | 92,558 |
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| $ | 384,825 | ||||||||
Mr. Kaestner | $ | 219,767 |
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| $ | 69,598 |
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| $ | 289,365 | ||||||||
Mr. Hicks | $ | 135,937 |
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| $ | 43,050 |
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| $ | 178,987 | ||||||||
Mr. Swain | $ | 511,329 |
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| $ | 138,119 |
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| $ | 649,448 | ||||||||
Mr. Bowman | $ | 74,572 | (1) |
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| $ | 6,278 |
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| $ | 80,850 | |||||||
| (1) | $23,242 paid out in February 2024 and $51,330 to be paid in November 2024. |
2022 Performance-Based RSU Awards
In February 2022, the Committee awarded performance-based RSU long-term incentive awards to the named executive officers, with the targeted award amounts listed below.
Performance | RSUs at Target | |||||
See table below for summary of performance objectives and achievement levels of completed performance periods | Ms. Baier | 454,546 | ||||
| Ms. Kussow | 7,768 | |||||
| Mr. White | 59,091 | |||||
| Mr. Kaestner | 40,910 | |||||
| Mr. Hicks | 27,273 | |||||
| Mr. Swain | 161,364 | |||||
| Mr. Bowman | 77,273 | |||||
Based on our actual level of achievement of the year-over-year RevPAR growth goal for 2022 and 2023, the Committee has certified that 105% of the targeted amount from the 2022 tranche and 150% of the targeted amount from the 2023 tranche will be eligible to vest on February 27, 2025. The actual levels of achievement of the 2024 RevPAR tranche and the 3-year relative TSR tranche will be determined following the completion of the performance period ending December 31, 2024. See “Payments in Connection with Mr. Swain’s Termination” and “Payments in Connection with Mr. Bowman’s Termination” below for a summary of the treatment of these awards upon their respective terminations on February 24, 2023 and January 12, 2023.
38 | |
Compensation Discussion and Analysis
Performance Objective | Weighting(1) | Vesting Date | Performance Targets | |||||||||||
2022 year-over-year improvement to same community RevPAR(1) | 25% | 2/27/2025 | Level | % of Target RSUs Vesting | | 2022 Growth | ||||||||
| Maximum | 150% | 12% | ||||||||||||
| Actual | 105% | 10.2% | ||||||||||||
| Target | 100% | 10% | ||||||||||||
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| 50% | 8% | ||||||||||||
| Threshold | 25% | 7% | ||||||||||||
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2023 year-over-year improvement to same community RevPAR(1) | 25% | 2/27/2025 | Level | % of Target RSUs Vesting | | 2023 Growth | ||||||||
| Actual | 150% | 11.4% | ||||||||||||
| Maximum | 150% | 7.5% | ||||||||||||
| Target | 100% | 5% | ||||||||||||
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| 50% | 2.5% | ||||||||||||
| Threshold | 25% | 1.25% | ||||||||||||
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2024 year-over-year improvement to same community RevPAR(1) | 25% | 2/27/2025 | Level | % of Target RSUs Vesting | | 2024 Growth | ||||||||
| Maximum | 150% | 6% | ||||||||||||
| Target | 100% | 4% | ||||||||||||
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| 50% | 2% | ||||||||||||
| Threshold | 25% | 1% | ||||||||||||
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3-Year Relative TSR Compared to S&P Midcap 400 Index Companies(2) | 25% | 2/27/2026 | Level | % of Target RSUs Vesting | | Relative TSR Rank | ||||||||
| Maximum | 150% | 75th %ile | ||||||||||||
| Target | 100% | 50th %ile | ||||||||||||
| Threshold | 50% | 25th %ile | ||||||||||||
| (1) | For purposes of the 2022 awards, same community RevPAR means the average monthly senior housing resident fee revenues per available unit of the same community portfolio as reported in our SEC filings for the applicable performance period. Same community RevPAR is calculated as resident fee revenues, excluding revenue from our former Health Care Services segment, revenue for private duty services provided to seniors living outside our communities, and entrance fee amortization, of the same community portfolio for the applicable fiscal year, divided by the weighted average number of available units in the same community portfolio for the applicable fiscal year, divided by twelve. |
| (2) | 3-Year Relative TSR compares our compound annual TSR to the constituent companies of the S&P Midcap 400 index for the period beginning January 1, 2022 and ending December 31, 2024, assuming reinvestment of dividends or distributions. The award agreements provide that no additional RSUs beyond the target amount will be paid on such tranche if our compound annual TSR is negative for the performance period. |
2024 PROXY STATEMENT | 39 |
Executive Compensation
Based on our actual levels of achievement, the following RSUs are expected to vest with respect to the 2022 and 2023 tranches in February 2025 subject to continued employment (except with respect to Messrs. Swain and Bowman).
| RSUs February 2025 | ||||
Ms. Baier | 289,774 | |||
Ms. Kussow | 4,952 | |||
Mr. White | 37,671 | |||
Mr. Kaestner | 26,080 | |||
Mr. Hicks | 17,388 | |||
Mr. Swain | 42,358 | |||
Mr. Bowman | 20,284 | |||
Other Compensation Policies
Annual Risk Assessment
In accordance with its charter, the Committee conducts an assessment annually of the relationship between our risk management policies and practices, corporate strategy, and our compensation arrangements. As part of this assessment, the Committee evaluates whether any incentive and other forms of pay encourage unnecessary or excessive risk taking. For our 20162023 executive compensation program, the Committee concluded that the program, including the performance goalsobjectives and targets used for incentive compensation, is appropriately structured not to encourage unnecessary or excessive risk taking.
Stock Ownership and 100% of each of the other named executive officers. The Committee also determined under the annual cash incentive plan to continue to use the relative weighting of company and individual performance measures, and to begin using resident fee revenue as a performance measure in lieu of year-over-year same community senior housing net operating income growth used in prior years. When evaluating the individual objectives component of the annual cash incentive plan, the Committee determined to use a more rigorous process in setting goals, identifying achievement criteria and scoring goal achievement to improve the pay-for-performance nature of the individual objectives and to differentiate results among executives and their objectives.
| 2016 Target Total Direct Compensation | ||||||||||
| Base Salary | Annual Cash Incentive | Performance-Based Long-Term Equity | Time-Based Long-Term Equity | Target Total Direct Compensation | ||||||
| T. Andrew Smith | $950,000 | $1,187,500 | $2,612,503 | $2,612,503 | $7,362,507 | |||||
| Labeed S. Diab | $585,000 | $585,000 | $750,002 | $750,002 | $2,670,005 | |||||
| Lucinda M. Baier | $550,000 | $550,000 | $750,002 | $750,002 | $2,600,005 | |||||
| Bryan D. Richardson | $430,500 | $430,500 | $440,003 | $440,003 | $1,741,007 | |||||
| Mary Sue Patchett | $425,000 | $425,000 | $352,498 | $352,513 | $1,555,011 | |||||
 |  | |||
| Realized Compensation | ||||||||||||
| Year | Salary | Annual Cash Incentive Earned | Value upon Vesting of Long-Term Incentive Awards | All Other Compensation (excluding relocation assistance) | Total Compensation Realized | |||||||
| T. Andrew Smith | 2016 | $953,654 | $418,594 | $1,258,572 | $11,339 | $2,642,159 | ||||||
| 2015 | $953,654 | $276,094 | $2,022,015 | $8,929 | $3,260,691 | |||||||
| 2014 | $841,216 | $714,580 | $1,622,198 | $11,025 | $3,189,019 | |||||||
| Labeed S. Diab | 2016 | $587,250 | $219,375 | $371,177 | $5,504 | $1,183,307 | ||||||
| Lucinda M. Baier | 2016 | $552,115 | $222,750 | $136,988 | $5,723 | $917,576 | ||||||
| Bryan D. Richardson | 2016 | $432,115 | $159,500 | $384,391 | $9,829 | $985,836 | ||||||
| 2015 | $421,616 | $124,110 | $916,815 | $8,534 | $1,471,074 | |||||||
| 2014 | $367,631 | $274,996 | $981,541 | $10,239 | $1,634,407 | |||||||
| Mary Sue Patchett | 2016 | $426,635 | $145,350 | $174,037 | $7,811 | $753,833 | ||||||
| Annual Base Salary | ||||||
| 2015 | 2016 | Percent Change | ||||
| T. Andrew Smith | $950,000 | $950,000 | – | |||
| Labeed S. Diab | $585,000 | $585,000 | – | |||
| Lucinda M. Baier | $550,000 | $550,000 | – | |||
| Bryan D. Richardson | $420,000 | $430,500 | 2.5% | |||
| Mary Sue Patchett | $425,000 | $425,000 | – | |||
| Mark W. Ohlendorf | $540,000 | $540,000 | – | |||
| 2016 Target Total Annual Cash Incentive Opportunity | ||||
| Percentage of 2016 Base Salary | Amount | |||
| T. Andrew Smith | 125% | $1,187,500 | ||
| Labeed S. Diab | 100% | $585,000 | ||
| Lucinda M. Baier | 100% | $550,000 | ||
| Bryan D. Richardson | 100% | $430,500 | ||
| Mary Sue Patchett | 100% | $425,000 | ||
| Mark W. Ohlendorf | 100% | $540,000 | ||
| 2016 Target Annual Cash Incentive Weighting by Objective | ||||||
| Adjusted CFFO per Share | Resident Fee Revenue | Individual Objectives | ||||
| T. Andrew Smith | 60% | 15% | 25% | |||
| Other NEOs | 60% | 10% | 30% | |||
| 2016 Adjusted CFFO per Share Targets and Payout Percentages | ||
| Adjusted CFFO per Share Targets | Percentage Payout of Target Opportunity | |
| $2.74 or more | 200% | |
| $2.72 | 190% | |
| $2.70 | 180% | |
| $2.68 | 170% | |
| $2.66 | 160% | |
| $2.64 | 150% | |
| $2.63 | 140% | |
| $2.62 | 130% | |
| $2.61 | 120% | |
| $2.60 | 110% | |
| $2.59 | 100% | |
| $2.49 | 90% | |
| $2.48 | 80% | |
| $2.46 | 60% | |
| $2.44 | 40% | |
| $2.42 | 20% | |
| Below $2.42 | 0% | |
| $4,352,489,228 | 190% | |
| $4,339,470,816 | 180% | |
| $4,326,491,342 | 170% | |
| $4,313,550,690 | 160% | |
| $4,300,648,743 | 150% | |
| $4,287,785,387 | 140% | |
| $4,274,960,506 | 130% | |
| $4,262,173,984 | 120% | |
| $4,249,425,707 | 110% | |
| $4,236,715,560 | 100% | |
| $4,226,123,771 | 90% | |
| $4,215,558,462 | 80% | |
| $4,205,019,566 | 60% | |
| $4,194,507,017 | 40% | |
| $4,184,020,749 | 20% | |
| Below $4,184,020,749 | 0% | |
| Actual 2016 Total Payment under 2016 Annual Cash Incentive Plan | ||||||
| Actual Payment | Target Opportunity | Actual Payment as a Percentage of Target Opportunity | ||||
| T. Andrew Smith | $418,594 | $1,187,500 | 35.3% | |||
| Labeed S. Diab | $219,375 | $585,000 | 37.5% | |||
| Lucinda M. Baier | $222,750 | $550,000 | 40.5% | |||
| Bryan D. Richardson | $159,500 | $430,500 | 37.0% | |||
| Mary Sue Patchett | $145,350 | $425,000 | 34.2% | |||
| Mark W. Ohlendorf | $47,206 | $116,557 | 40.5% | |||
| Actual CFFO per Share Objective Payment | ||||||
| Target Amount | Achievement | Payment | ||||
| T. Andrew Smith | $712,500 | 0% | – | |||
| Labeed S. Diab | $351,000 | 0% | – | |||
| Lucinda M. Baier | $330,000 | 0% | – | |||
| Bryan D. Richardson | $258,300 | 0% | – | |||
| Mary Sue Patchett | $255,000 | 0% | – | |||
| Mark W. Ohlendorf | $69,934 | 0% | – | |||
| Year Ended | ||
| (in thousands, except per share data) | December 31, 2016 | |
| Net cash provided by operating activities | $ | 365,732 |
| Changes in operating assets and liabilities | 76,252 | |
| Proceeds from refundable entrance fees | 3,083 | |
| Refunds of entrance fees | (3,984) | |
| Lease financing debt amortization with fair market value or no purchase options | (57,502) | |
| Loss on facility lease termination | 11,113 | |
| Distribution from unconsolidated ventures from cumulative share of net earnings | (23,544) | |
| Recurring capital expenditures, net | (58,583) | |
| Integration, transaction, transaction-related and strategic project costs | 62,131 | |
| Adjusted CFFO | $ | 374,698 |
| Brookdale's proportionate share of CFFO of unconsolidated ventures | 58,000 | |
| Adjusted CFFO | $ | 432,698 |
| Weighted average shares used in computing basic net income (loss) per share | 185,653 | |
| Adjusted CFFO per share | $ | 2.33 |
| Actual Resident Fee Revenue Objective Payment | ||||||
| Target Amount | Achievement | Payment | ||||
| T. Andrew Smith | $178,125 | 105% | $187,031 | |||
| Labeed S. Diab | $58,500 | 105% | $61,425 | |||
| Lucinda M. Baier | $55,000 | 105% | $57,750 | |||
| Bryan D. Richardson | $43,050 | 105% | $45,203 | |||
| Mary Sue Patchett | $42,500 | 105% | $44,625 | |||
| Mark W. Ohlendorf | $11,656 | 105% | $12,239 | |||
| Actual Individual Objectives Bonus Payment | ||||||
| Target Amount | Achievement | Payment | ||||
| T. Andrew Smith | $296,875 | 78.0% | $231,563 | |||
| Labeed S. Diab | $175,500 | 90.0% | $157,950 | |||
| Lucinda M. Baier | $165,000 | 100.0% | $165,000 | |||
| Bryan D. Richardson | $129,150 | 88.5% | $114,298 | |||
| Mary Sue Patchett | $127,500 | 79.0% | $100,725 | |||
| Mark W. Ohlendorf | $34,967 | 100.0% | $34,967 | |||
| 2016 Long-Term Incentive Awards | ||||||
| Annual Grant of Time-Based Restricted Stock | Annual Grant of Performance-Based Restricted Stock | Total | ||||
| T. Andrew Smith | $2,612,503 | $2,612,503 | $5,225,007 | |||
| Labeed S. Diab | $750,002 | $750,002 | $1,500,005 | |||
| Lucinda M. Baier | $750,002 | $750,002 | $1,500,005 | |||
| Bryan D. Richardson | $440,003 | $440,003 | $880,007 | |||
| Mary Sue Patchett | $352,513 | $352,498 | $705,011 | |||
| 2013 Performance-Based Restricted Stock – 2016 Program Max ROI Targets | ||
| ROI Target | Percentage of Tranche that Would Vest | |
| 14% or above | 100% | |
| 12% | 75% | |
| 11% | 55% | |
| 10% | 40% | |
| Below 10% | No vesting | |
| 2014 Performance-Based Restricted Stock – 2016 CFFO per Share Targets | ||||
| CAGR of CFFO (2013 Base Year) | 2016 CFFO per Share | Percentage of Tranche that Would Vest | ||
| 10% or above | $3.33 or above | 100% | ||
| 8% | $3.15 | 80% | ||
| 6% | $2.99 | 60% | ||
| 5% | $2.89 | 40% | ||
| 4% | $2.81 | 20% | ||
| Below 4% | Below $2.81 | No vesting | ||
Multiple of | ||
Chief Executive Officer | ||
5.0x | |||
Chief | 4.0x | ||
Executive Vice Presidents | 3.0x | ||
multiple of ownership may be met through stock purchased by the officer or his or her spousetheir base salary as shown in the market and/or through stock received upon vesting of equity awards.table. Unvested equity awards do not count toward the expected level of ownership, except that under the guidelines the estimated number of after-tax time-based restricted shares that areequity awards scheduled to vest within 90 days will countmay be counted towards the expected level of ownership.
40 | |
Compensation Discussion and Analysis
Policy on Derivatives, Hedging and Pledging
Our insider trading policy provides that no one subject to the policy, which includes all our directors, officers, employees and their immediate family members and controlled entities, may engage in short sales, puts, calls, or other derivative transactions, or in any hedging or monetization transactions (i.e., prepaid variable forward contracts, equity swaps, collars, and exchange funds), involving our securities. It furtheralso provides that none of our directors or executiveand officers may engage in hedging or monetization transactions involving our securities,not pledge our securities as collateral for a loan, or hold our securities in a margin account.
Clawback Policy
The Committee has adopted a separate executiveClawback and Forfeiture Policy, which applies to our current and former officers as defined in Rule 16a-1 of the Exchange Act, which was amended and restated in 2023 to comply with the new NYSE rules. The policy provides that in the event of any financial restatement of our reported consolidated financial statements, the Committee is required, subject to limited exceptions, to recoup any erroneously awarded incentive-based compensation clawback policy. However,paid during the three completed fiscal years immediately preceding such restatement. To the extent the Committee determines that any such amount should be recouped, the Committee may seek recovery by, among other things, requiring reimbursement of performance-based compensation previously paid, canceling or rescinding outstanding equity awards, adjusting or withholding unpaid compensation, or setting off against future grants of equity-based awards. The new amended and restated policy became effective October 2, 2023 and applies to incentive-based compensation received on or after that date. This policy was included as an exhibit to our most recently filed Annual Report on Form 10-K.
In addition, the original version of our Clawback and Forfeiture Policy applied to all short-term and long-term cash or equity-based incentive compensation paid, earned, vested, or otherwise awarded based on performance objectives, beginning with the 2020 annual incentive plan and performance-based long-term incentive awards. The original version of the policy provided that in the event of any material financial restatement of our reported consolidated financial statements, or that the Committee otherwise determines that a financial metric used to determine the vesting or payment of any such performance-based compensation was calculated incorrectly in any material respect, the Committee, in its discretion, may require reimbursement of an amount equal to all or a portion of such performance-based compensation previously vested or paid for any performance periods which include any of the three full fiscal years immediately preceding the announcement of any financial restatement or the determination of any inaccuracy regarding calculation of a financial metric. The amount of the recoupment will be determined by the Committee in its discretion, up to the amount of such performance-based compensation previously paid or vested with respect to such officer that is in excess of the performance-based compensation that would have been received based on the correct financial metric or restated results. To the extent the Committee determines that any such amount should be recouped, the Committee may seek recovery by, among other things, requiring reimbursement of performance-based compensation previously paid, canceling or rescinding outstanding equity awards, adjusting or withholding unpaid compensation, or setting off against future grants of equity-based awards.
Our 2014 Omnibus Incentive Plan provides that any award thereunder that is subject to recovery under any law, government regulation or stock exchange listing requirement willshall be subject to such deductionsforfeiture, reduction, or recoupment to the extent provided in our Clawback and clawback as may be required to be made pursuant to such law, government regulationForfeiture Policy or stock exchange listing requirementany other future recoupment or as may be required pursuant to anyclawback policy adopted by us.
The long-term incentive award agreements for awards made in 2020 and after to the Company pursuantnamed executive officers provide that in the event of a breach by the named executive officer of the non-competition, non-solicitation, non-disparagement, or confidentiality covenants contained in the agreements, we will have the authority to cancel all such outstanding awards, cancel all shares of stock beneficially owned by the named executive officer that were issued in settlement of RSUs within 12 months on or prior to, or at any time after, the termination of the named executive officer’s employment, and recoup from the named executive officer any proceeds from such officer’s sale, transfer, or other disposition of any such cancellable shares or amounts paid under the award during such period.
To the extent the named executive officers are eligible to receive severance pay and benefits under Ms. Baier’s employment agreement and the Severance Policy (as defined below), as applicable, such agreement and policy
2024 PROXY STATEMENT | 41 |
Executive Compensation
provide that any breach of a restrictive covenant applicable to the named executive officer will result in the immediate and permanent cessation of payment of severance pay and benefits, the obligation of the named executive officer to repay to us upon our demand 90% of the amount or cost of such severance pay and benefits, and the obligation of the named executive officer to pay our costs and expenses to enforce such obligation.
Tax Considerations
Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”) places a limit of $1 million on the amount that a company may deduct in any one year with respect to compensation paid to any such law, government regulation or stock exchange listing requirement.
Employment Agreement and Severance Policies Applicable to Named Executive Officers
We are party to an amended and restated employment agreement dated November 3, 2021 with Mr. Smith dated February 11, 2013, as amended on April 23, 2015. We entered into the employment agreement with Mr. Smith in connection with his appointment as Chief Executive Officer in February 2013, and the agreement superseded and replaced the severance pay policy letter agreement, dated as of August 6, 2010, between us and Mr. Smith.Ms. Baier. The employment agreement has a threefive year term, subject to automatic extensions for additional one year periods, unless either we or Mr. Smith giveMs. Baier gives written notice to the other party no less than 90 days prior to the expiration of the term that the term will not be so extended. Mr. Smith’sThe employment agreement provides an initial base salary was $480,000of $938,000 per year (Ms. Baier’s then current annual base salary), which wasshall be reviewed annually and may be increased from time to $825,000 per year as oftime at the date that his service as Chief Executive Officer began. In addition, Mr. Smith is eligible to receiveBoard’s sole discretion. Ms. Baier’s base salary may not be reduced without Ms. Baier’s approval. Ms. Baier will have an annual cash incentive opportunity targeted at 125%target of 135% of cumulative base salary paid during the calendar year (Ms. Baier’s then current annual cash incentive opportunity target), subject to the terms of our annual incentive compensation plan for senior executive officers. Mr. Smith is eligibleAt least annually, Ms. Baier will be considered for an award of long-term incentive awards at a level commensurate with her position and in a form and on terms no less favorable than as provided to participate in various benefit plans that we make available to our other senior executive officers. In addition, weAny reduction to such long-term incentive awards will be subject to the definition of good reason. We will provide Mr. SmithMs. Baier with basic term life insurance benefits of at least 100% of hisher base salary at no cost to Mr. Smith. Under hisMs. Baier. Termination of Ms. Baier’s employment within 30 days of the end of the initial term or any renewal term of the Employment Agreement following the provision of written notice of non-renewal by the Company will be treated as a termination of Ms. Baier’s employment without cause for purposes of the employment agreement Mr. Smithand her then outstanding long-term incentive awards. Under her employment agreement, Ms. Baier is entitled to severance payments if hisher employment is terminated by us without cause or if he terminates employmentby her for good reason. Such severanceSeverance payments in connection with a change in control are “double trigger,” which requirerequires the occurrence of a change in control followed by termination of employment within 1218 months of the change in control by us without cause or by Mr. SmithMs. Baier for good reason. Under Mr. Smith’s employment agreement, anyAny payments that are not deductible by us under Section 280G of the Internal Revenue Code will be cut back only to the extent that the cutback results in a better after taxafter-tax position for Mr. Smith.
Our other continuing named executive officers do not have employment agreements, but are eligible to participate in the Brookdale Senior Living Inc.Amended and Restated Tier I Severance Pay Policy Tier I, as amendeddated February 10, 2022 (the “Severance Policy”), which provides. Under the Severance Policy, the participating named executive officers are entitled to severance benefitspayments if their employment is terminated by the Company without cause or, following a change in control, by the executive for terminations of employment. In addition, each of Mr. Richardson and Ms. Patchett is, and Mr. Ohlendorf was, a party to a letter agreement with us that provides for additional severance benefits in certain circumstances.good reason. The severance payments under the Severance Policy and these letter agreements applicable in connection with a change in control are “double
42 | |
Compensation Discussion and Analysis
trigger,” which require the occurrence of a change in control followed by termination of employment by us without cause or by the named executive officer for good reason. In January 2017, after consultation with F.W. Cook, the Committee amended the Severance Policy to extend the time period during which such named executive officers would be eligible to receive payments resulting from a termination by us without cause or by the named executive officer for good reason following the occurrence of a change in control from a time period of within 12 months following the change of control to a time period of within 18 months following a change in control, and to provide that in the event of such a termination by an “Other Eligible Employee” (which includes Ms. Patchett) in such circumstance, the Other Eligible Employee will receive an annual bonus for the year of separation from service (to the extent earned under the terms of the bonus plan), pro-rated based on the number of days such Other Eligible Employee was employed and payable when such bonus would otherwise be due. The Severance Policy had been amended in 2015 to provide such pro-rata bonus to “Designated Officers” (which include Messrs. Diab and Richardson and Ms. Baier and included Mr. Ohlendorf). If payments pursuant to the Severance Policy and other arrangements are not deductible by us under Section 280G of the Internal Revenue Code, such payments shall be reduced (or repaid) in order to ensure our deduction of payments in connection with a change in control.
A detailed description of potential severance payments pursuant to Mr. Smith’sthe foregoing employment agreement and the Severance Policy, and such other letter agreements, as well as the effect of certain terminations and/orand a change in control pursuant to our restricted shareoutstanding long-term incentive award agreements, is set forth under “Potential Payments Upon Termination or Change in Control” below.
2024 Compensation Decisions
When making annual compensation decisions for 2024, the Committee reviewed the compensation peer group used for 2023 decisions with hiring Mr. Diabthe Consultant and Ms. Baier in the fourth quarterdetermined to remove LHC Group, Inc. due to merger and acquisition activity and add Aveanna Healthcare Holdings Inc. and Surgery Partners, Inc. The Consultant completed a market compensation study using this peer group. Following its review of 2015,our executive compensation program, the Committee approved certain relocation assistance for eachthe principal elements of the executives to move to the Nashville area, including moving costs, brokerage commissions and closing costs for the sale of each of the executive’s home and purchase of a home in the Nashville area, and temporary housing in the Nashville area for up to 12 months. We further agreed to reimburse Mr. Diab and Ms. Baier for their reasonable costs associated with traveling to and from Nashville during temporary living and
| 2024 Base Salary | Change v. 2023 | 2024 Target Annual Incentive Opportunity | Change v. 2023 | 2024 Grant Value of Long- Term Incentive Awards (1) | Change v. 2023 (1) | 2024 Target Total Direct Compensation | Change v. 2023 | |||||||||||||||||||||||||
Ms. Baier | $1,020,000 | 3% | 137% | –% | $5,000,003 | –% | $7,417,403 | 1% | ||||||||||||||||||||||||
Ms. Kussow | $600,000 | 13% | 90% | 13% | $1,000,003 | 43% | $2,140,003 | 29% | ||||||||||||||||||||||||
Mr. White | $485,000 | 2% | 80% | –% | $700,002 | 4% | $1,573,002 | 3% | ||||||||||||||||||||||||
Mr. Kaestner | $460,000 | 3% | 80% | –% | $485,003 | 5% | $1,313,003 | 4% | ||||||||||||||||||||||||
Mr. Hicks | $300,000 | 2% | 70% | –% | $300,002 | –% | $810,002 | 1% | ||||||||||||||||||||||||
| (1) | The dollar amount of the long-term incentive awards, and the percentage change versus 2023, is based on the grant value of such awards (i.e., the number of RSUs granted at target performance, multiplied by the stock price on the date of grant). |
The 20172024 annual cash incentive opportunity will continueplan, as approved by the Committee, continues to be based on company financial and individual performance objectives. The companystrategic objectives weighted 70% and individual performance objectives,30% of target, respectively, and their relative weight as a percentagewill be measured on an annual basis. All amounts earned will be paid out following the end of the year. For 2024, the financial objectives are our full-year 2024 consolidated portfolio RevPAR and our full-year Adjusted EBITDA, with the target total annual cash incentive opportunity, are as follows:
| 2017 Target Annual Cash Incentive Weighting by Objective | ||||||||
| Combined Adjusted Free Cash Flow | Resident Fee Revenue | Senior Housing and Ancillary Services Operating Income | Individual Objectives | |||||
| T. Andrew Smith | 40% | 15% | 20% | 25% | ||||
| Other Current NEOs | 40% | 10% | 20% | 30% | ||||
For the 2024 program, all long-term incentive awards to the named executive officers were issued in the form of time-and performance-based RSUs. A 50/50 grant value mix of time-and performance-based RSUs was used for 2017, in each case as reported and defined in our public releases and/or filings, and will exclude transaction, transaction-related and severance costs in a mannerthe
2024 PROXY STATEMENT | 43 |
Executive Compensation
named executive officers, consistent with the methodology used2023 program, except that the Committee approved that all long-term incentive awards for the named executive officers would vest over three years instead of four. The performance objectives for the performance-based RSUs include year-over-year same community RevPAR growth for fiscal 2024, 2025, and 2026, weighted 75%, and TSR relative to the companies in our public releases and/or filings. Resident fee revenue is defined as our 2017 consolidated resident fee revenue, and senior housing and ancillary services operating income is defined as our 2017 consolidated resident fee revenue less facility operating expense. At the discretionS&P Midcap 400 Index for the three-year period ending December 31, 2026, weighted 25%. Any performance-based RSUs earned from achievement of the Committee, the combined Adjusted Free Cash Flow performance criteria may be equitably adjustedRevPAR growth and relative TSR objectives are eligible to reflect capital expenditures associated with catastrophic casualty losses andvest on February 27, 2027, subject to reflect changes in business plans and budgets imposed by our joint venture partners, and each of the company level performance criteria may be equitably adjusted to reflect transaction activity (including acquisitions, dispositions, lease restructurings, lease terminations, and venture transactions). Achievement ofcontinued employment. Performance at the threshold or target level of each companyachievement for a performance objective will result in 20% or 100%, respectively,vesting of 50% for each of the component ofRevPAR growth and relative TSR objectives. Performance at the opportunity being paid. Achievement in excess of the targetedtarget and maximum level of performanceachievement will result in a payout up to a maximum of 200% of the component of the opportunity being paid, subject to a maximum aggregate payout to a named executive officer under the 2017 annual cash incentive plan of $2,000,000 (as required by our 2014 Omnibus Incentive Plan). Achievement of the targeted level of performance for the individual goals will result in 100% of this component being paid, which represents the maximum amount payable to an executive with respect to the individual performance objectives.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the disclosure set forth above under the heading “Compensation Discussion and Analysis” with management and, based on the review and discussions, it has recommended to the Board that the “Compensation Discussion and Analysis” be included herein.
Respectfully submitted by the Compensation Committee of the Board,
COMPENSATION COMMITTEE
Frank M. Bumstead, ChairmanJackie M. CleggJeffrey R. LeedsLee S. WielanskyChair
Victoria L. Freed
Denise W. Warren
44 | |
Summary Compensation Table for 2016
Summary Compensation Table for 2023
The following summary compensation table sets forth information concerning the compensation earned by, awarded to, or paid to our named executive officers for the periods indicated.
| Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | ||||||||||
| T. Andrew Smith, | 2016 | 953,654 | — | 5,225,007 | 418,594 | 11,339 | 6,608,593 | ||||||||||
| President and | 2015 | 953,654 | — | 7,536,779 | 276,094 | 8,929 | 8,775,455 | ||||||||||
Chief Executive Officer(5) | 2014 | 841,216 | — | 3,412,525 | 714,580 | 11,025 | 4,979,346 | ||||||||||
| Labeed S. Diab, | 2016 | 587,250 | — | 1,500,005 | 219,375 | 304,685 | 2,611,314 | ||||||||||
Chief Operating Officer(5) | 2015 | 76,500 | 1,000,000 | 2,100,014 | — | 17,833 | 3,194,347 | ||||||||||
| Lucinda M. Baier, | 2016 | 552,115 | — | 1,500,005 | 222,750 | 217,497 | 2,492,367 | ||||||||||
Chief Financial Officer(5) | 2015 | 48,654 | 1,000,000 | 775,020 | — | 11,982 | 1,835,656 | ||||||||||
| Bryan D. Richardson, | 2016 | 432,115 | — | 880,007 | 159,500 | 9,829 | 1,481,452 | ||||||||||
| Executive Vice President and | 2015 | 421,616 | — | 1,580,298 | 124,110 | 8,534 | 2,134,558 | ||||||||||
| Chief Administrative Officer | 2014 | 367,631 | — | 740,399 | 274,996 | 10,239 | 1,393,265 | ||||||||||
| Mary Sue Patchett, | 2016 | 426,635 | — | 705,011 | 145,350 | 7,811 | 1,284,807 | ||||||||||
| Executive Vice President, | |||||||||||||||||
| Community Operations | |||||||||||||||||
| Mark W. Ohlendorf, | 2016 | 116,308 | — | — | — | 1,307,402 | 1,423,709 | ||||||||||
| Former President and | 2015 | 542,077 | — | 2,168,853 | 158,436 | 8,898 | 2,878,263 | ||||||||||
Chief Financial Officer(5) | 2014 | 499,538 | — | 986,351 | 364,820 | 10,731 | 1,861,440 | ||||||||||
Name and Principal Position (1) | Year | Salary ($) | Bonus ($) | Stock Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($) (4) | Total ($) | |||||||||||||||||||||
Lucinda M. Baier President and Chief Executive Officer | 2023 | 990,000 | – | 3,193,334 | 1,258,419 | 9,254 | 5,451,007 | |||||||||||||||||||||
| 2022 | 975,000 | – | 5,117,052 | 545,739 | 8,098 | 6,645,889 | ||||||||||||||||||||||
| 2021 | 938,000 | 100,000 | 2,765,005 | 1,488,391 | 8,852 | 5,300,248 | ||||||||||||||||||||||
Dawn L. Kussow Executive Vice President and Chief Financial Officer | 2023 | 516,461 | – | 714,533 | 375,677 | 6,660 | 1,613,331 | |||||||||||||||||||||
| 2022 | 344,432 | 36,957 | 172,891 | 81,962 | 6,289 | 642,531 | ||||||||||||||||||||||
Chad C. White Executive Vice President, General Counsel and | 2023 | 475,000 | – | 689,016 | 352,581 | 8,826 | 1,525,423 | |||||||||||||||||||||
| 2022 | 465,000 | – | 665,217 | 154,237 | 6,761 | 1,291,215 | ||||||||||||||||||||||
| 2021 | 425,000 | 73,000 | 322,502 | 349,677 | 7,143 | 1,177,322 | ||||||||||||||||||||||
H. Todd Kaestner Executive Vice President – Corporate Development and President – CCRCs | 2023 | 445,000 | – | 469,550 | 330,313 | 8,798 | 1,253,661 | |||||||||||||||||||||
| 2022 | 430,000 | – | 460,545 | 142,628 | 7,267 | 1,040,440 | ||||||||||||||||||||||
| 2021 | 390,000 | 75,000 | 242,503 | 320,880 | 7,596 | 1,035,979 | ||||||||||||||||||||||
George T. Hicks Executive Vice President – Finance and Treasurer | 2023 | 295,000 | – | 306,229 | 191,600 | 6,152 | 798,981 | |||||||||||||||||||||
Steven E. Swain Former Executive Vice President and Chief Financial Officer | 2023 | 90,769 | – | – | 67,376 | 1,196,323 | 1,354,468 | |||||||||||||||||||||
| 2022 | 590,000 | – | 1,816,555 | 244,624 | 7,858 | 2,659,037 | ||||||||||||||||||||||
| 2021 | 575,000 | – | 962,504 | 675,847 | 8,193 | 2,221,544 | ||||||||||||||||||||||
Kevin W. Bowman Former Executive Vice President – Community Operations | 2023 | 16,442 | – | – | 23,143 | 968,893 | 1,008,478 | |||||||||||||||||||||
| 2022 | 475,000 | – | 869,901 | 207,880 | 73,929 | 1,626,710 | ||||||||||||||||||||||
| 2021 | 339,844 | – | 159,968 | 253,921 | 16,847 | 770,580 | ||||||||||||||||||||||
| (1) | The named executive officers served in the positions noted in the table at all times during the years presented, except that: Mr. Bowman served as Division Vice President – Operations (West Division) before being appointed to serve as Executive Vice President – Community Operations effective October 1, 2021; Mr. Kaestner served as Executive Vice President – Asset Management and Division President – Entry Fee during 2020 and to July 31, 2021; and Ms. Kussow served as Senior Vice President and Chief Accounting Officer for the full year of 2022 and as Interim Chief Financial Officer from August 17, 2022 until October 3, 2022 in connection with a |
| (2) | Represents the aggregate grant date fair value of |
2024 PROXY STATEMENT | 45 |
Executive Compensation
| (3) | Represents the payout of each named executive officer’s annual cash incentive opportunity with respect to performance in |
| (4) | For each of the named executive officers, the |
46 | |
Grants of Plan-Based Awards for 2016
Grants of Plan-Based Awards
The following table summarizes grants of plan-based awards made to our named executive officers in 2016. All of our named executive officers are eligible to receive dividends on unvested shares of stock that have been granted to them (to2023. To the extent thatwe declare cash or stock dividends are declared on our shares of common stock).
| Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Possible Payouts Under Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock Awards ($) | ||||||||||||||||||||
| Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | ||||||||||||||||||||
| T. Andrew Smith | — | 142,500 | (3) | 712,500 | (3) | 1,425,000 | (3) | — | — | — | — | — | |||||||||||||
| — | 35,625 | (4) | 178,125 | (4) | 356,250 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 296,875 | (5) | 296,875 | (5) | — | — | — | — | — | ||||||||||||||
| 2/26/2016 | — | — | — | 36,060 | 180,297 | 180,297 | — | 2,612,504 | |||||||||||||||||
| 2/26/2016 | — | — | — | — | — | — | 180,297 | 2,612,504 | |||||||||||||||||
| Labeed S. Diab | — | 70,200 | (3) | 351,000 | (3) | 702,000 | (3) | — | — | — | — | — | |||||||||||||
| — | 11,700 | (4) | 58,500 | (4) | 117,000 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 175,500 | (5) | 175,500 | (5) | — | — | — | — | — | ||||||||||||||
| 2/26/2016 | — | — | — | 10,352 | 51,760 | 51,760 | — | 750,002 | |||||||||||||||||
| 2/26/2016 | — | — | — | — | — | — | 51,760 | 750,002 | |||||||||||||||||
| Lucinda M. Baier | — | 66,000 | (3) | 330,000 | (3) | 660,000 | (3) | — | — | — | — | — | |||||||||||||
| — | 11,000 | (4) | 55,000 | (4) | 110,000 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 165,000 | (5) | 165,000 | (5) | — | — | — | — | — | ||||||||||||||
| 2/26/2016 | — | — | — | 10,352 | 51,760 | 51,760 | — | 750,002 | |||||||||||||||||
| 2/26/2016 | — | — | — | — | — | — | 51,760 | 750,002 | |||||||||||||||||
| Bryan D. Richardson | — | 51,660 | (3) | 258,300 | (3) | 516,600 | (3) | — | — | — | — | — | |||||||||||||
| — | 8,610 | (4) | 43,050 | (4) | 86,100 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 129,150 | (5) | 129,150 | (5) | — | — | — | — | — | ||||||||||||||
| 2/26/2016 | — | — | — | 6,074 | 30,366 | 30,366 | — | 440,003 | |||||||||||||||||
| 2/26/2016 | — | — | — | — | — | — | 30,366 | 440,003 | |||||||||||||||||
| Mary Sue Patchett | — | 51,000 | (3) | 255,000 | (3) | 510,000 | (3) | — | — | — | — | — | |||||||||||||
| — | 8,500 | (4) | 42,500 | (4) | 85,000 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 127,500 | (5) | 127,500 | (5) | — | — | — | — | — | ||||||||||||||
| 2/26/2016 | — | — | — | 4,866 | 24,327 | 24,327 | — | 352,498 | |||||||||||||||||
| 2/26/2016 | — | — | — | — | — | — | 24,328 | 352,513 | |||||||||||||||||
| Mark W. Ohlendorf | — | 64,800 | (3) | 324,000 | (3) | 648,000 | (3) | — | — | — | — | — | |||||||||||||
| — | 10,800 | (4) | 54,000 | (4) | 108,000 | (4) | — | — | — | — | — | ||||||||||||||
| — | — | (5) | 162,000 | (5) | 162,000 | (5) | — | — | — | — | — | ||||||||||||||
Name | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | Estimated Possible Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock Awards ($) | |||||||||||||||||||||||||||||||||||
Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | |||||||||||||||||||||||||||||||||||
Ms. Baier | – (1) | 440,798 | 1,356,300 | 2,576,970 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (2) | 117,514 | 235,028 | 352,542 | 693,333 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (3) | 590,834 | 1,181,667 | 1,772,501 | |||||||||||||||||||||||||||||||||||||
| 2/15/2023 (4) | 312,500 | 625,000 | 937,500 | |||||||||||||||||||||||||||||||||||||
|
| 2/15/2023 (5)
|
|
| 847,458
|
|
| 2,500,001
|
| ||||||||||||||||||||||||||||||||
Ms. Kussow | – (1) | 127,849 | 393,380 | 747,423 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (2) | 44,492 | 88,983 | 133,475 | 262,500 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (6) | 14,831 | 29,661 | 44,492 | 102,034 | ||||||||||||||||||||||||||||||||||||
|
| 2/15/2023 (5)
|
|
| 118,644
|
|
| 350,000
|
| ||||||||||||||||||||||||||||||||
Mr. White | – (1) | 123,500 | 380,000 | 722,000 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (2) | 42,903 | 85,805 | 128,708 | 253,125 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (6) | 14,301 | 28,602 | 42,903 | 98,391 | ||||||||||||||||||||||||||||||||||||
|
| 2/15/2023 (5)
|
|
| 114,407
|
|
| 337,501
|
| ||||||||||||||||||||||||||||||||
Mr. Kaestner | – (1) | 115,700 | 356,000 | 676,400 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (2) | 29,237 | 58,474 | 87,711 | 172,498 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (6) | 9,746 | 19,492 | 29,238 | 67,052 | ||||||||||||||||||||||||||||||||||||
|
| 2/15/2023 (5)
|
|
| 77,966
|
|
| 230,000
|
| ||||||||||||||||||||||||||||||||
Mr. Hicks | – (1) | 67,113 | 206,500 | 392,350 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (2) | 19,068 | 38,135 | 57,203 | 112,498 | ||||||||||||||||||||||||||||||||||||
| 2/15/2023 (6) | 6,356 | 12,712 | 19,068 | 43,729 | ||||||||||||||||||||||||||||||||||||
|
| 2/15/2023 (5)
|
|
| 50,848
|
|
| 150,002
|
| ||||||||||||||||||||||||||||||||
Mr. Swain |
| – (1)
|
|
| 23,600
|
|
| 72,615
|
|
| 137,969
|
| ||||||||||||||||||||||||||||
Mr. Bowman |
| – (1)
|
|
| 4,275
|
|
| 13,154
|
|
| 24,992
|
| ||||||||||||||||||||||||||||
| (1) | Amounts represent the threshold, target, and maximum payout levels under our 2023 annual incentive plan applicable to each named executive officer, as described above. The actual payouts are reported in the Summary Compensation Table as Non-Equity Incentive Plan Compensation for 2023 in the following amounts: Ms. Baier–$1,258,419; Ms. Kussow–$364,997; Mr. White–$352,581; Mr. Kaestner–$330,313; Mr. Hicks–$191,600; Mr. Swain–$67,376; and Mr. Bowman–$12,205. |
| (2) | Represents |
2024 PROXY STATEMENT | 47 |
