UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.)
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| x | Definitive Proxy Statement |
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| BROOKFIELD PROPERTY REIT INC. | ||||
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BROOKFIELD PROPERTY REIT INC.
250 Vesey Street, 15th Floor
New York, New York 10281-1023
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held MayJune 17, 2016
To our Stockholders:
The 20162020 Annual Meeting of Stockholders of General Growth Properties,Brookfield Property REIT Inc. (the “Company”) will be held on MayJune 17, 2016,2020, at 9:11:00 a.m. local time at our principal executive offices located at 110 North Wacker Drive, Chicago, Illinois 60606.Eastern Time. The Annual Meeting will be a virtual meeting conducted via live audio webcast that can be accessed by visiting www.virtualshareholdermeeting.com/bpyu2020. At the meeting our stockholders will consider the following items of business:
| 1. | To elect | |
 | |
| 2. | ||
| To ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, | ||
| 3. | |
Each of these matters is described in further detail in the proxy statement that accompanies this notice. Only stockholders of record at the close of business on April 22, 2020 are entitled to vote at the meeting or any postponement or adjournment of the meeting.
| April 29, 2020 |  |
| Michelle L. Campbell | |
| Secretary | |
1
TABLE OF CONTENTS
Page | |
| General Information | 3 |
| About the Meeting | 4 |
| Proposal 1 Election of Directors | 7 |
| Proposal 2 Ratification of Selection of Independent Registered Public Accounting Firm | 10 |
| Corporate Governance | 11 |
| Executive Officers | 16 |
| 17 | |
| Security Ownership of Certain Beneficial Owners and Management | 18 |
| Certain Relationships and Related Party Transactions | |
| Report of the Audit Committee | |
| Additional Information | |
BROOKFIELD PROPERTY REIT INC.
250 Vesey Street, 15th Floor
New York, New York 10281-1023
2020 PROXY STATEMENT
GENERAL INFORMATION
The Board of Directors (“Board”) of General Growth Properties,Brookfield Property REIT Inc. is asking for your proxy for use at the 2020 annual meeting of our stockholders (the “Annual Meeting”) to be held on MayJune 17, 2016,2020, at 9:11:00 a.m. CentralEastern Time, at our principal executive offices located at 110 North Wacker Drive, Chicago, Illinois, and at any postponement or adjournment of the meeting. The Annual Meeting will be a virtual meeting conducted via live audio webcast that can be accessed by visiting www.virtualshareholdermeeting.com/bpyu2020. We are making this proxy statement (the “Proxy Statement”) and related material available to our stockholders on or about April 1, 2016.29, 2020. In this Proxy Statement we refer to General Growth Properties,Brookfield Property REIT Inc. as “GGP,“BPYU,” “we,” “us,” “our”“our,” or the “Company”.
Stockholders are being asked to vote at the Annual Meeting on the following items of business:
| (1) | the election of ten directors to the Board; |
| (2) | the selection of Deloitte & Touche LLP (“Deloitte”) as our independent registered public accounting firm for the year ending December 31, 2020; and |
| (3) | such other business as may properly come before the meeting. |
This Proxy Statement summarizes the information you need to know in order to vote on these proposals in an informed manner.
Use of the Internet
Pursuant to rules adopted by the Securities and Exchange Commission (“SEC”), we sometimes referhave elected to provide access to our proxy materials for the Annual Meeting, including this Proxy Statement and our annual report for the year ended December 31, 2019 on Form 10-K (the “Annual Report”), on the Internet. Accordingly, on or about April 29, 2020, we will begin mailing a Notice of Internet Availability of Proxy Materials (“Notice”) to all of the Company’s stockholders of record and beneficial owners as of the record date for the Annual Meeting. The Notice will include instructions on how you may access the proxy materials for the Annual Meeting at www.proxyvote.com. Stockholders will not receive printed copies of the proxy materials for the Annual Meeting unless they request them, in which case, printed copies of the proxy materials and a paper proxy card will be provided at no charge. Any stockholder may request to receive the proxy materials for the Annual Meeting in printed form by mail or electronically by e-mail by contacting us at bpy.enquiries@brookfield.com prior to June 3, 2020 in order to receive the materials in advance of the Annual Meeting. We encourage you to take advantage of the availability of the Company’s proxy materials on the Internet in order to lower our printing and delivery costs and help reduce the environmental impact of the Annual Meeting.
We have elected this year to hold the Annual Meeting virtually via the Internet. Stockholders who choose to attend the Annual Meeting will do so by accessing a live audio webcast of the Annual Meeting via the Internet at www.virtualshareholdermeeting.com/bpyu2020. At this website, stockholders will be able to listen to the Annual Meeting live, submit questions and submit their vote while the Annual Meeting is being held. We believe hosting the Annual Meeting virtually will enable increased stockholder attendance from locations around the world and will encourage more active stockholder engagement and participation at the Annual Meeting. Please see “How do I attend the Annual Meeting?” below for more information.
ABOUT THE MEETING
Who is entitled to vote?
The Board has fixed the close of Directorsbusiness (Eastern Time) on April 22, 2020 (the “Record Date”), as the “Board.record date to determine who is entitled to receive notice of and to vote at the Annual Meeting.There were 57,336,992 shares ofClass A Stock, par value $0.01 per share (“Class A Stock”), 202,438,184 shares of Series B Preferred Stock, par value $0.01 per share (“Series B Preferred Stock”), 175,180,348 shares ofClass B-1 Stock, par value $0.01 per share (“Class B-1 Stock”) and 640,051,301 shares ofClass C Stock, par value $0.01 per share (“Class C Stock”), outstanding on the Record Date, each entitled to one vote with respect to the election of each director nominee and one vote on the other proposal presented for stockholder action at the Annual Meeting. Only stockholders of record at the close of business on the Record Date are entitled to receive notice of, and to vote at, the Annual Meeting and any and all adjournments or postponements thereof.
How do I attend the Annual Meeting?
All stockholders of record at the close of business on the Record Date, or their designated proxies, may attend and participate in the Annual Meeting. Even if you plan to attend the Annual Meeting, you are encouraged to vote on the Internet, by telephone or by mail before the Annual Meeting, to ensure that your vote will be counted. Please see “How do I vote my shares?”
To attend and participate in the Annual Meeting, stockholders will need to access the live audio webcast of the meeting. To do so, stockholders of record will need to visit www.virtualshareholdermeeting.com/bpyu2020 and use their 16-digit control number provided in the Notice to login to this website, and beneficial owners of shares held in street name will need to follow the instructions provided by the broker, bank or other nominee that holds their shares. We encourage stockholders to login to this website and access the webcast before the Annual Meeting’s start time. Further instructions on how to attend, participate in and vote at the Annual Meeting, including how to demonstrate your ownership of our stock as of the record date, are available at www.proxyvote.com.
Submitting your proxy before the Annual Meeting will not affect your right to vote at the Annual Meeting if you decide to attend; however, your attendance at the Annual Meeting after having submitted a valid proxy will not in and of itself constitute a revocation of your proxy. In order to do so, you must submit an online vote during the webcast of the Annual Meeting reflecting your new vote. Please see “Can I change my vote?” below for further detail.
What are the Board’s voting recommendations?
The Board of Directors unanimously recommends athat you vote
What matters are to be voted on at the Annual Meeting and what are the required votes?
Proposal | Who is Entitled to Vote | Voting Requirement | |||
| Item 1: Election of Each of the Nominees to the Board | • | Holders of the outstanding shares of Class A Stock, Series B Preferred Stock, Class B-1 Stock and Class C Stock, voting together as a single class. | Majority of votes cast Abstentions and broker non-votes excluded | ||
The Board recommends a vote FOR each of the Director Nominees. | |||||
| Item 2: Ratification of the Independent Registered Public Accounting Firm | • | Holders of the outstanding shares of Class A Stock, Series B Preferred Stock, Class B-1 Stock and Class C Stock, voting together as a single class. | Majority of the voting power present and entitled to vote thereon Abstentions have the effect of an AGAINST VOTE and broker non-votes have no effect | ||
The Board recommends a vote FOR Proposal 2.
Brookfield Property Partners L.P. (“BPY”) has informed the Company that it intends to vote, or cause to be voted, the shares of Series B Preferred Stock, Class B-1 Stock and Class C Stock it owns, directly or indirectly, in favor of each of the Proposals. Because BPY owns, directly or indirectly, a majority of the voting power of the outstanding shares of capital stock of the Company and all of the outstanding shares of the Series B Preferred Stock, Class B-1 Stock and Class C Stock, it has the power to approve each Proposal.
How do I vote my shares?
Stockholders of Record. If you are a “record” holder of our shares (that is, if you hold your stock in your own name in the Company’s stock records maintained by our transfer agent), you may vote in any one of the following ways:
| • | On the Internet.You may vote on the Internet in one of two ways: (1) you may vote by proxy before the Annual Meeting starts by visiting www.proxyvote.com and following the instructions in the Notice; or (2) you may vote during the Annual Meeting by attending the live audio webcast at www.virtualshareholdermeeting.com/bpyu2020 and following the instructions in the Notice. |
| • | By Telephone.If you request printed copies of the proxy materials for the Annual Meeting, you may vote by proxy by calling the toll-free number found on the proxy card delivered with these proxy materials. |
| • | By Mail.If you request printed copies of the proxy materials for the Annual Meeting, you may vote by proxy by completing the proxy card delivered with these proxy materials and mailing it in the envelope provided. |
Votes submitted by proxy on the Proxy Card).
Beneficial Owners of Shares Held in Street Name. If you hold shares of our Company in “street name” (that is, through a broker, bank or other nominee), you will need to obtain a voting instruction form from the institution that holds your shares and follow the voting instructions and submission deadlines on that form. The availability of Internet, telephone, mail or other methods to vote your shares by proxy will depend on the voting processes of the broker, bank or other nominee that holds your shares.
What happens if I don’t provide voting instructions?
Stockholders of Record. If you are a stockholder of record at the close of business on the Record Date and you submit a valid proxy that does not provide voting instructions with respect to your shares, all shares represented by your proxy will be voted FOR the election of each of the nominees to the Board (Proposal 1) and FOR the ratification of Directorsthe independent registered public accounting firm (Proposal 2).
Beneficial Owners of Shares Held in Street Name. If you hold shares of our Company in “street name” it is currently comprisedimportant that you provide the broker, bank or other nominee who holds your shares with voting instructions on the matters to be voted on at the meeting. With respect to the election of nine members. each of the nominees to the Board (Proposal 1), your broker or other institution generally will not be able to vote your shares unless you provide voting instructions. With respect to the ratification of the independent registered public accounting firm (Proposal 2), your broker or other nominee in certain circumstances may be able to vote your shares in its discretion without voting instructions from you.
Can I change my vote?
Stockholders of Record. If you are a stockholder of record at the close of business on the Record Date, you may revoke a previously submitted proxy and change your vote by taking any one of the following actions:
| • | Later-Dated Vote.You may revoke a previously submitted proxy by submitting a later-dated vote on the Internet (either before or during the Annual Meeting), by telephone or by mail. |
| • | Written Notice.You may revoke a previously submitted proxy by sending or otherwise delivering a written notice of revocation to the attention of our Secretary at the address of our principal executive offices. |
To be effective, any later-dated vote must be received by the applicable deadline for the voting method used, as described above, and any written notice of revocation must be received no later than the close of voting at the Annual Meeting. Only your latest-dated vote that is received by the deadline applicable to the voting method used will be counted.
Beneficial Owners of Shares Held in Street Name. If you hold our shares in “street name,” you will need to contact the institution that holds your shares and follow its instructions for revoking your proxy.
How will the proxy holders vote?
The persons named in the accompanying proxy intend to vote the shares represented by all properly executed and unrevoked proxies received by them in accordance with the instructions on each proxy. If no instructions are given, they will vote FOR the election of each of the nominees to the Board (Proposal 1) and FOR the ratification of the independent registered public accounting firm (Proposal 2). If any other matters come before the Annual Meeting, your proxy grants the individuals named in the proxy the discretion to vote on such matters.
What constitutes a quorum for the Annual Meeting?
If a majority of the voting power of the Company’s capital stock entitled to vote generally on the election of directors on the Record Date are present in person or represented by proxy at the Annual Meeting, we will have a quorum, permitting the conduct of business at the Annual Meeting. As of the Record Date, we had 57,336,992 shares of Class A Stock, 202,438,184 shares of Series B Preferred Stock, 175,180,348 shares of Class B-1 Stock and 640,051,301 shares of Class C Stock outstanding and entitled to vote on the election of directors. When specified business is to be voted on by one or more classes or series of stock voting separately, the holders of the majority of the shares of such class or classes or series shall constitute a quorum of such class or classes or series for the transaction of such business. Abstentions and broker non-votes are counted as present in person or represented by proxy for purposes of determining whether a quorum exists.
Who will bear the costs of soliciting votes for the meeting?
Your proxy is being solicited by the Board on behalf of the Company. The Company will bear the entire cost of the solicitation of proxies from its stockholders. Solicitations will be made primarily through the Notice and the solicitation materials made available on the Internet or via e-mail or in print to those who request copies, but may be supplemented by telephone, mail, e-mail or personal solicitation by our directors or officers, who will not receive any additional compensation for such solicitation activities. We will provide copies of solicitation materials to brokers, banks and other nominees holding in their names shares of our stock that are beneficially owned by others for forwarding to the beneficial owners of those shares who have requested printed materials and we will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to our stockholders.
PROPOSAL 1
ELECTION OF DIRECTORS
Each of the Company’s directors serves for a one‑yearone-year term and is subject to annual election by the stockholders. Accordingly, the stockholders will be asked to elect nineten directors at the Annual Meeting. Each director will hold office until the 2021 Annual Meeting of Stockholders, in 2017, and until a successor is duly elected and qualified, or until his or her earlier death, resignation or removal.
The Board, of Directors, based on the recommendation of the NominatingGovernance and GovernanceNominating Committee, has nominated the persons set forth below for a term of office commencingCaroline M. Atkinson, Jeffrey M. Blidner, Soon Young Chang, Richard B. Clark, Omar Carneiro da Cunha, Scott R. Cutler, Stephen DeNardo, Louis J. Maroun, A. Douglas McGregor and Lars Rodert to be elected to serve on the date of this year’s Annual Meeting and ending onBoard, each until the date of the2021 Annual Meeting of Stockholders in 2017, and until their respective successors are duly elected and qualified, or until his or her earlier death, resignationsuccessor is duly elected and qualified.
Each of the nominees is currently a director of our Company and has agreed to stand for election, be named in this Proxy Statement and to serve on the Board if elected. If, prior to the Annual Meeting, a nominee should become unavailable to serve, the shares represented by a properly executed and returned proxy will be voted for such additional person as shall be designated by the Board, unless the Board determines to reduce the number of directors or removal.to leave a vacant seat on the Board in accordance with the Company’s Fourth Amended and Restated Certificate of Incorporation (the “Charter”) and Fifth Amended and Restated Bylaws (the “Bylaws”), as then in effect. During the course of a term, the Board may appoint a new director to fill any vacant seat. In that event, the newly appointed director would complete the term of the director he or she replaced or, if appointed to fill a vacancy caused by an increase to the size of the Board, serve until the next annual meeting of our stockholders.
Director Nominees
The nominees for the Board are set forth below, along with a description of their professional backgrounds. Each of these personsdirector nominees currently serves on the Board of the general partner of our parent company, BPY, (the “BPY General Partner”). We believe each of these nominees contributes to the Board’s effectiveness as a whole based on the wealth of executive leadership experience they bring to the Board, as well as the other specific attributes, qualifications and skills described below. All nominees have agreed to serve if elected.
| Caroline M. Atkinson, 67 | Director since February 2019 |
Ms. Atkinson is a Senior Adviser to RockCreek, an investment firm in Washington D.C., a trustee of the International Institute of Strategic Studies in London and a director of the BPY General Partner. Ms. Atkinson is an Oxford-trained economist with more than two decades of experience as a senior policymaker in international economics and finance and as an executive in technology. She has held senior positions at Alphabet Inc. (“Google”), the U.S. government, The International Monetary Fund and The Bank of England. Most recently, Ms. Atkinson was Head of Global Policy for Google. Prior to joining Google, Ms. Atkinson worked for President Barack Obama as the Deputy National Security Adviser for International Economics at the White House. She was the President’s personal representative to major international economic summits, including the G-7/8 and the G-20. She was also the Advisor to Treasury Secretaries, Robert Rubin and Lawrence Summers. She has advised leading U.S. companies on global business and economic issues. Ms. Atkinson is a Member of the Board Executive Committee for the Peterson Institute for International Economics, and a Member of the Council on Foreign Relations and the Economic Club of New York. The Board nominated Ms. Atkinson to serve as a director based, among other factors, on her experience in international economics and finance.
| Jeffrey M. Blidner, 71 | Director since August 2018 |
Mr. Blidner is Vice Chairman of Brookfield Asset Management Inc. (“Brookfield Asset Management”) and is responsible for strategic planning and fundraising. Mr. Blidner is also the Chief Executive Officer of Brookfield Asset Management’s Private Funds Group, Chairman and a director of the general partner of each of Brookfield Business Partners L.P. and Brookfield Renewable Partners L.P. and a director of Brookfield Asset Management, the BPY General Partner and the general partner of Brookfield Infrastructure Partners L.P. Mr. Blidner also served as a board member for Rouse Properties, Inc. from 2012 to 2016. Prior to joining Brookfield Asset Management in 2000, Mr. Blidner was a senior partner at a Canadian law firm. The Board nominated Mr. Blidner to serve as a director based, among other factors, on his knowledge of the Company and his experience in board governance.
| Dr. Soon Young Chang, 60 | Director since August 2018 |
Dr. Chang is a member of the Board.
| Richard B. Clark, 61 | Director since August 2018 |
Mr. Clark is a Managing Partner of Brookfield Asset Management and Chairman of the board of directors of the Company and the BPY General Partner. He has over 30 years of real estate experience. Mr. Clark has been employed by Brookfield Asset Management and its predecessors since 1984 in various senior roles including President and Chief Executive Officer of Brookfield Property Group LLC (“BPG”) and BPY. Mr. Clark holds a Bachelor of Science in Business from the Indiana University of Pennsylvania. Mr. Clark served on the board of directors of GGP Inc. (“GGP”) prior to its acquisition by BPY. The Board nominated Mr. Clark to serve as a director based, among other factors, on his knowledge of the Company and his experience in commercial real estate and development.
| Omar Carneiro da Cunha, 73 | Director since August 2018 |
Mr. Cunha is a Senior Partner with Dealmaker Ltd., a consultancy and M&A advisory firm, with a focus in telecommunications, information technology, oil & gas and retail, and has also been a Senior Partner of BOND Consultoria Empresarial e Participacoes since 1994. Mr. Cunha is a director of the BPY General Partner. He was the Chairman of “Bob’s”, a Brazilian fast food company, from 1995 to 2008, a director of the Energisa Group since 1996, and a director of Grupo Libra from 2010 to 2019. In 2005, Mr. Cunha was the Deputy Chairman and Chief Executive Officer of VARIG Brazilian Airline. From 1995 to 1998, Mr. Cunha was the President of AT&T Brasil and a member of the Management Committee of AT&T International. Prior to that, Mr. Cunha worked for 27 years in Brazil and abroad for the Royal Dutch/Shell Group, and was President of Shell Brasil, Billiton Metals and Shell Quimica from 1991 to 1994. Mr. Cunha is currently a member of the American Chamber of Commerce for Brazil. The Board nominated Mr. Cunha to serve as a director based, among other factors, on his knowledge of the Company and his experience in board governance in the telecommunications, technology, energy and retail sectors.
| Scott R. Cutler, 50 | Director since February 2019 |
Mr. Cutler is the Chief Executive Officer of StockX, a private consumer e-commerce marketplace, and a director of the BPY General Partner. He previously was the Senior Vice President, Americas at eBay from 2017 to 2019, where he oversaw the Americas business unit, including the United States, Latin America, and Canada. Mr. Cutler joined eBay Inc. as President of eBay’s StubHub business in April 2015 after nine years as an Executive Vice President at the New York Stock Exchange (“NYSE”). During his tenure at NYSE, Mr. Cutler transformed it into the number one global exchange and was responsible for over $1 trillion in capital raised and helped to take public some of the world’s most iconic brands of the last decade. Mr. Cutler holds a B.S. degree in Economics from Brigham Young University (“BYU”) and a J.D. from the University of California, Hasting College of Law. He also serves on the board of Vibrant Emotional Health and is a trustee on the National Advisory Committee for BYU, his alma mater. The Board nominated Mr. Cutler to serve as a director based, among other factors, on his experience in technology and international business.
| Stephen DeNardo, 66 | Director since August 2018 |
Mr. DeNardo is currently managing director and president and Chief Executive Officer of RiverOak Investment Corp., LLC and has held this position since 1999. He is also a director of the BPY General Partner and Chairman of its Audit Committee. From 1997 to 1999 he was Partner and Senior Vice President of ING Realty Partners, where he managed a $1 billion portfolio. Prior to his employment with ING Realty Partners, he was President of ARES Realty Capital from 1991 to 1997, where he managed a $5 billion portfolio of diversified debt and equity assets. Before joining ARES Realty Capital, he was a Partner at First Winthrop Corporation. Mr. DeNardo has held a license as a Certified Public Accountant since 1978 and is a Chartered Global Management Accountant. He has a B.S. in Accounting from Fairleigh Dickinson University. The Board nominated Mr. DeNardo to serve as a director based, among other factors, on his knowledge of the Company, his financial acumen and his experience in commercial real estate and asset management.
| Louis J. Maroun, 69 | Director since August 2018 |
Mr. Maroun is the Founder and Chairman of Sigma Real Estate Advisors and Sigma Capital Corporation, which specializes in international real estate advisory services. Prior to this role, Mr. Maroun was the Executive Chairman of ING Real Estate Canada and held executive positions in a number of real estate companies where he was responsible for overseeing operations, real estate transactions, asset and property management, as well as many other related functions. Mr. Maroun is a director of the BPY General Partner and Chair of its Governance and Nominating Committee. Mr. Maroun also is on the board of directors of the general partner of Brookfield Renewable Energy Partners L.P. and Summit Industrial Income REIT. Previously, Mr. Maroun served on the board of ThermoCeramix Corp. from 2014 to 2016. Mr. Maroun graduated from the University of New Brunswick in 1972 with a Bachelor’s degree, followed by a series of post graduate studies and in January of 2007, after a long and successful career in investment real estate, Mr. Maroun was elected to the position of Fellow of the Royal Institute of Chartered Surveyors The Board nominated Mr. Maroun to serve as a director based, among other factors, on his knowledge of the Company and his experience in commercial real estate and board governance.
| A. Douglas McGregor, 63 | Director since March 2020 |
Mr. McGregor was the Group Head of RBC Capital Markets and RBC Investor & Treasury Services, Chairman and Chief Executive Officer of RBC Capital Markets, and was a member of RBC’s Group Executive until his retirement in January 2020. He is also a director of the BPY General Partner. Mr. McGregor joined RBC in 1983 and held progressively senior roles at the bank, becoming Capital Markets Chief Executive Officer in 2008 and assuming responsibility for Investor & Treasury Services in 2012. As Chairman and Chief Executive Officer of RBC Capital Markets, Mr. McGregor had global oversight of the firm’s Corporate & Investment Banking and Global Markets activities conducted by its approximately 7,500 employees worldwide. He also directly led the investment bank’s real estate lending businesses. As Group Head of RBC Investor & Treasury Services, Mr. McGregor was responsible for this business’ custody, treasury and financing services for institutional clients globally. Mr. McGregor holds an Honours B.A. (Business) and an MBA from the University of Western Ontario. Mr. McGregor serves on the University Health Network’s Board of Trustees in Toronto and is a former Chairman of the Board of Directors of the Investment Industry Regulatory Organization of Canada. The Board nominated Mr. McGregor to serve as a director based, among other factors, on his experience in commercial real estate, asset management and international finance.
| Lars Rodert, 58 | Director since August 2018 |
Mr. Rodert is the founder and Chief Executive Officer of ÖstVäst Capital Management (“OVCM”) and is a director of the BPY General Partner and its Lead Independent Director. Mr. Rodert has 30 years of experience in global investment industry. Prior to OVCM, Mr. Rodert spent 11 years as a Global Investment Manager for IKEA Treasury. Before joining IKEA, Mr. Rodert was with SEB Asset Management for 10 years as Chief Investment Officer and responsible for SEB Global Funds (“SEB”). Prior to SEB, Mr. Rodert spent 10 years in North America with five years at Investment Bank Gordon Capital and five years as a partner with a private investment holding company, Robur et. Securitas. Mr. Rodert is a director of PCCW Limited, an information and communications technology company. Mr. Rodert holds a Master of Science Degree in Business and Economics from Stockholm University. The Board nominated Mr. Rodert to serve as a director based, among other factors, on his knowledge of the Company and his experience in commercial real estate and board governance.
Election of Directors
To be elected, the votes cast in favor of the election of a nominee must exceed the votes cast against the election of that nominee. The holders of our Class A Stock, Series B Preferred Stock, Class B-1 Stock and Class C Stock, voting together as a single class, are entitled to vote on the election of directors. Under Delaware law, if an incumbent director is not re-elected, the director will continue to serve on the Board as a “holdover director.” If any incumbent director is not re-elected, under our Corporate Governance Guidelines and our Bylaws, the director is required to tender his or her resignation for consideration by the Board. The Chairman of the Board will review any submitted resignation and the Governance and Nominating Committee will consider the resignation, evaluating the best interest of the Company and its stockholders, and make a recommendation to the Board on whether to accept or reject the resignation.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR EACH OF THE TEN DIRECTOR NOMINEES (ITEM 1 ON THE PROXY CARD).
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We are asking our stockholders to ratify the appointment of Deloitte as our independent registered public accounting firm for our fiscal year ending December 31, 2020. Deloitte has served as the Company’s independent registered public accounting firm for the fiscal years ended December 31, 2001 through 2019.
Although ratification by stockholders is not required by our organizational documents or other applicable law, the Audit Committee has determined that a policy of requesting ratification by stockholders of its selection of an independent registered public accounting firm is a matter of good corporate practice. If stockholders do not ratify the selection, the Audit Committee may reconsider the selection of Deloitte. Even if the selection is ratified, the Audit Committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in the best interest of the Company and its stockholders. A representative of Deloitte is expected to be present at the Annual Meeting, will have an opportunity to make a statement if he or she so desires and is expected to be available to respond to appropriate questions.
Independent Registered Public Accounting Firm Fees and Services
The following table presents the fees paid by the Company to Deloitte during the periods presented:
Year Ended December 31, | 2019 | 2018 | ||||||
| Audit Fees(1) | $ | 3,155,600 | $ | 3,395,100 | ||||
| Audit-Related Fees(2) | $ | 3,000,378 | $ | 2,482,800 | ||||
| Tax Fees(3) | $ | 32,130 | $ | 84,700 | ||||
| All Other Fees | $ | — | $ | — | ||||
| Total | $ | 6,188,108 | $ | 5,962,600 | ||||
| (1) | Audit fees consisted principally of the audits of the Company’s annual consolidated financial statements, internal control over financial reporting, reviews of the consolidated financial statements included in the Company’s Quarterly Reports on Form 10-Q, comfort letters, and reviews of other filings or registration statements under the Securities Act of 1933, as amended, and Securities Exchange Act of 1934, as amended (the “Exchange Act”). |
| (2) | Audit-related fees consisted primarily of various audits of individual or portfolios of properties to comply with lender, joint venture partner or tenant requirements. The 2019 and 2018 fees exclude $256,600 and $224,000, respectively, related to consents provided for the 2018 and 2017 consolidated financial statements of the Company included in registration statements of BPY and its affiliates; all such fees were reimbursed by BPY. |
| (3) | Tax services consisted principally of services necessitated by the Company’s ongoing tax compliance requirements. |
Audit Committee’s Pre-Approval Policies and Procedures
We have adopted written policies that provide that the Audit Committee is to pre-approve all audit services and permitted non-audit services to be performed for us by our independent registered public accounting firm in accordance with applicable law. During the fiscal year ended December 31, 2019, all audit and non-audit services provided to us by Deloitte were pre-approved by the Audit Committee.
Ratification of Selection of Independent Registered Public Accounting Firm
Ratification of this Proposal 2 requires the affirmative vote of the holders of a majority of the voting power of the outstanding shares of our Class A Stock, Series B Preferred Stock, Class B-1 Stock and Class C Stock present in person or by proxy at the Annual Meeting and entitled to vote on this Proposal 2, voting together as a single class.
THE BOARD UNANIMOUSLY RECOMMENDS A VOTE
FOR THIS PROPOSAL (ITEM 2 ON THE PROXY CARD).
CORPORATE GOVERNANCE
Director Nomination Process
BPYU, BPY, the BPY General Partner and BP US REIT LLC (“BPUS”), entered into a joint governance agreement, dated August 28, 2018 (the “Joint Governance Agreement”), intended to facilitate the governance of BPYU and BPY following the acquisition of all of the shares of common stock of GGP that BPY and its affiliates did not already own through a series of transactions (the “BPY Transaction”).
Pursuant to the Joint Governance Agreement, BPUS has the right to designate candidates to be nominated for election to each directorship subject to election at any meeting of BPYU stockholders and BPYU will include such nominees in its proxy statements without BPUS having to comply with the generally applicable provisions of the Company’s Bylaws regarding notice of stockholder nominations. The NominatingJoint Governance Agreement further provides that BPYU and the BPY General Partner will nominate an identical board of directors, except in limited circumstances. The nominees for the Board included in this Proxy Statement are also members of the board of directors of the BPY General Partner.
Additionally, each of the BPY General Partner and BPYU have the right to expand its respective board of directors to add additional non-overlapping independent members if it determines that the addition of non-overlapping board members is necessary to address or otherwise resolve a conflict of interest arising from its relationship with the other entity. Further, BPUS has the option, in its sole discretion, to cause each of the BPY General Partner and BPYU to expand the size of their respective boards, and to nominate one or more additional independent directors to fill the directorship created by such expansion.
The Company’s Governance and Nominating Committee annually selects candidates that it recommends to the Board of Directors to be director nominees of the Board for election by the stockholders as directors.stockholders. In addition, the Governance and Nominating and Governance Committee also selects candidates that it recommends to the Board for election as directors to fill vacancies.vacancies on the Board. In each case, the selection of candidates by the Governance and Nominating Committee is subject to the nomination rights of BPUS pursuant to the Joint Governance Agreement. The NominatingGovernance and GovernanceNominating Committee reviews with the Board, on an annual basis, the requisite experience, qualifications, attributes and skills of director nominees.
Director nominees must possess appropriate qualifications and reflect a reasonable diversity of personal experience and background to promote ourthe Company’s strategic objectives, contribute to the development of strategic alliances and activities in which we have an indirect interest and to fulfill responsibilities as directors to our stockholders. In considering candidates, the NominatingGovernance and GovernanceNominating Committee considers the background and qualifications of the directors as a group, and whether the candidates and existing directors together will provide an appropriate mix of experience, knowledge and attributes that will allow the Board to fulfill its responsibilities. The NominatingGovernance and GovernanceNominating Committee and the Board do not have a formal diversity policy; however, in identifying nominees for director, the NominatingGovernance and GovernanceNominating Committee considers a diversity of professional experiences, perspectives, education, and backgrounds among the directors to ensure that a variety of perspectives are represented in Board discussions and deliberations concerning our business.
The Governance and GovernanceNominating Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all prospective nominees. The NominatingGovernance and GovernanceNominating Committee does not set specific minimum qualifications that candidates must meet in order for it to recommend them to the Board, but rather believes that each candidate should be evaluated based on his or her merits, taking into account the needs of the Company and the composition of the Board as a whole.
Manner by Which Stockholders May Nominate Director Candidates for Election at the same criteria to evaluate director candidates designated by Brookfield pursuant to the Investment Agreement as it uses for all other candidates. See “Investment Agreement with Brookfield” for a description of such designation rights.
Stockholders who wish to submit nominations for director for consideration by the NominatingGovernance and GovernanceNominating Committee for election at the 20172021 Annual Meeting of Stockholders may do so by delivering written notice, along with the additional information and materials required by our Bylaws, to our Corporate Secretary not later than 90 days nor earlier than 120 days prior to the first anniversary of this year’s annual meeting. As specified in our Bylaws, different notice deadlines apply in the case of a special meeting, when the date of an annual meeting is more than 30 days before or more than 70 days after the first anniversary of the prior year’s meeting, or when the first public announcement of the date of an annual meeting is less than 100 days prior to the date of such annual meeting. Accordingly, for the 20172021 Annual Meeting of Stockholders, we must receive this notice on or after JanuaryFebruary 17, 2017,2021 and on or before February 16, 2017.March 19, 2021. Such information must be addressed to our Corporate Secretary, c/o General Growth Properties,Brookfield Property REIT Inc., 110 North Wacker Drive, Chicago, Illinois 60606‑1511.
Board Meetings and Attendance
At the 2019 Annual Meeting of Stockholders, Caroline M. Atkinson, Jeffrey M. Blidner, Dr. Soon Young Chang, Richard B. Clark, Omar Carneiro da Cunha, Scott R. Cutler, Stephen DeNardo, Louis J. Maroun and Lars Rodert were elected to the Board. A. Douglas McGregor was appointed to the Board in March 2020 pursuant to the Joint Governance Agreement (as further discussed under “—Director Nomination Process”). Consequently, the Board is currently comprised of ten members.
The Board of Directors of GGPand its committees meet quarterly on a set schedule and also hold special meetings from time to time. In 2019, the Board held eightfour meetings during 2015. Eachand its Audit Committee and Governance and Nominating Committee each held four meetings. Of the nine directors serving on the Board in 2019, (i) seven attended 100% of the incumbent directorsaggregate of (x) the Company attended at least 86%total number of the meetings of the Board that suchheld during the period for which he or she was a director was invited to attend. With respect to thoseand (y) the total number of meetings for all committees of the Board committees on which he or she served during 2015, the applicable directorsperiods that he or she served, (ii) one director attended at least 89%75% of the Audit Committeeaggregate of (x) the total number of meetings at least 83% of the Compensation CommitteeBoard held during the period for which he was a director and (y) the total number of meetings and 100%for all committees of the NominatingBoard on which he served during the periods that he served and Governance Committee meetings.
Director Attendance at Annual Meeting of Stockholders
We do not have a formal policy regarding the attendance of our Board members to attendat our annual meetings of its stockholders. FourNone of the nine members of the Board members then serving attended the Company’s annual meeting2019 Annual Meeting of stockholders in 2015.
Meetings of Non‑EmployeeIndependent Directors
The non-employeeindependent directors hold regular meetings without any non-independent directors or members of management present. Mr. Flatt,Lars Rodert, the independent ChairmanLead Independent Director of the Board, presides over meetings of the non‑employeeindependent directors.
Board Leadership Structure
Richard B. Clark serves as Chairman of the Board and Chief Executive Officer are held by separate persons.Lars Rodert serves as the Lead Independent Director. The Board believes the current structure is appropriate and effective for the Company. The Board believes that there are advantages to having an independent Chairman of the Board for matters such as communications and relations between the Board, the Chief Executive Officer, and other senior leadership; in assisting the Board in reaching consensus on particular strategies and policies; and in facilitating robust senior leadership, Board, and Chief Executive Officer evaluation processes. In addition, the Board believes that the current leadership structure helps to ensure that the appropriate level of oversight, independence and responsibility is applied to all Board decisions, including risk oversight. The duties of the independent Chairman of the Board include: working with the Chief Executive OfficerCompany’s service providers (“Service Providers”) under its Master Services Agreement dated August 27, 2018 (the “Master Services Agreement”) and other directors to set the agenda for the Board meetings; presiding over all meetings of the Board, the Annual Meeting and executive sessions of the independent directors;Board; and serving as the principal liaison on Board‑wideBoard-wide issues. The Chairman serves as an information resource forLead Independent Director’s primary role is to facilitate the functioning of the Board (independently of the Company’s Service Providers and Brookfield Asset Management), and to maintain and enhance the quality of the Company’s corporate governance practices. The Lead Independent Director presides over the private sessions of the independent directors of the Company that take place following each meeting of the Board and acts as a liaison between directors, committee chairsconveys the results of these meetings to the Chairman of the Board. In addition, the Lead Independent Director is available, when appropriate, for consultation and management.
Risk Oversight
The Company is exposed to a wide variety of risks in its business activities, including market, strategic, operational (including those related to cyber security), financial, legal, competitive and regulatory risks. OurThe Board of Directors is responsible for oversight of risks facing the Company, while our management team isthe Service Providers are responsible for day-to-day management of risk. OurThe Board, as a whole, directly administers its risk oversight function through regular interactionsits Audit Committee. Under its charter, the Audit Committee is responsible for reviewing and approving the Company’s policies with ourrespect to risk assessment and management, particularly financial risk exposure, and from timediscussing with management the steps taken to time, input from independent advisors.monitor and control risks. In its oversight role, our Boardthe Audit Committee has the responsibility to satisfy itself that the risk management processes designed and implemented by managementthe Service Providers are adequate and functioning as designed. The involvement of the Board in setting our business strategy at least annually is a key part of its oversight of risk management, its assessment of management’s appetite for risk and its determination of what constitutes an appropriate level of risk for GGP. The BoardAudit Committee receives updates in the ordinary course from managementthe Service Providers and outside advisors regarding risks we face,the Company faces, including litigation and various operating risks. The risk oversight function is also administered through the standing committees of our Board of Directors, which oversee risks inherent in their respective areas of responsibility, reporting to our Board regularly and involving our Board as necessary.
Committees of the Board of Directors
The Board of Directors has the authority to appoint committees to perform certain management and administrationadministrative functions. The current standing committees are the Audit Committee the Compensation Committee and the NominatingGovernance and GovernanceNominating Committee. The Board may, however, from time to time, establish or maintain additional committees as necessary or appropriate.
The table below shows current membership for each of the standing Board committees.
| Audit Committee | Governance and Nominating Committee | ||
| Louis J. | |||
| * | Denotes Chair. |
| ^ | Denotes Audit Committee Financial Expert. |
Committee members and Chairs are appointed by the Board upon recommendation of the NominatingGovernance and GovernanceNominating Committee with consideration of the desires of individual directors. The Board considerswill consider rotating committee members periodically, but the Board does not have a rotation policy.
The Board and each standing committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting or obtaining the approval of any officer of the Company or the Service Providers in advance. Directors have complete access to the Board’s advisors.
Each of the committees operate under a written charter. Copies of these charters can be obtained from our website at
Audit Committee
The Board has a standing Audit Committee, established in accordance with the requirements of the SEC. The Audit Committee currently consists of Messrs. Haley (Chairman), Neithercut and Patterson. The Board of Directors has affirmatively determined that all of the members of the Audit Committee meet the requirements for independence and expertise, including financial literacy for the purposes of serving on the Audit Committee, under applicable NYSENasdaq Stock Market (“Nasdaq”) listing standards and SEC rules. The Board of Directors has also determined that Mr. HaleyDeNardo qualifies as an “audit committee financial expert” under applicable SEC rules.
The primary purpose of the Audit Committee is to assistresponsible for assisting and advising the Board’s oversight of:
Governance and Nominating Committee meets with the independent auditor without any member of management present, prior to release of the annual audited financial statements, to discuss the independent registered public accounting firm’s views about the qualitative aspects of the Company’s financial reporting. In order to assure continuing auditor independence, the Audit Committee periodically considers whether there should be a regular rotation of the Company's independent registered public accounting firm. The members of the Audit Committee and the Board believe that the continued retention of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm is in the best interests of the Company and its investors. In conjunction with the mandated rotation of the lead engagement partner, the Audit Committee is directly involved in the selection of new lead engagement partner.
In accordance with the Nasdaq listing standards, of the NYSE, theGovernance and Nominating and Governance Committee is comprised solely of independent directors. The primary functions of the NominatingGovernance and GovernanceNominating Committee include:
Compensation Committee
The Company is a “controlled company” as defined in the Nominating and Governance Committee.
Compensation Committee has responsibilityInterlocks and Insider Participation
While certain of our subsidiaries have employees, BPYU does not have any employees. Under our Master Services Agreement, our Service Providers provide, or arrange for evaluatingother service providers to provide, day-to-day management and approving, asadministrative services for our Company. As a committeeresult, we do not directly pay employee or together withmanagement compensation and do not require a compensation committee. Our directors participate in the consideration of director compensation.
Director Independence
A majority of the Board (or independentis independent. Of the ten directors as appropriate) as directedbeing nominated for election by the Board, the compensation of directors and executive officersBoard affirmatively determined, based on the recommendation of the Company. The primary functions of the CompensationGovernance and Nominating Committee, include:
The Board reviewed director independence in February 2016.2020. During this review, the Board considered transactions and relationships between each director nominee (including any member of his or her immediate family, if any) and the Company and its subsidiaries and affiliates. In making independence determinations, the Board considered each relationship not only from the standpoint of the director nominee, but also from the standpoint of persons and organizations with which the director nominee has a relationship. The purpose of this review is to determine whether any such relationship or transactions would interfere with the director’s or nominee’s independent judgment, and therefore be inconsistent with a determination that the director nominee is independent.
When assessing the independence of the directors designated by Brookfield,the BPY General Partner pursuant to the Joint Governance Agreement, the Board considered that they were nominated by significant stockholders of the Company but concluded that this did not impair their independence. As required by the NYSE,Nasdaq listing standards, the Board considered whether the nominated director himselfdirectors themselves had a material relationship with GGP (directly or as a partner, stockholder, or officer of an organization that has a relationship with GGP). A relationship is “material” if, in the judgment of the Board, the relationshipBPYU that would interfere with the director’s independent judgment. judgment in carrying out their duties as a director.
As a result of this review, the Board affirmatively determined that the following memberseach of the Company’s Board, including each of those directors standing for election at the Annual Meeting (three of whom were nominated by Brookfield), aredirector nominees, except Dr. Chang and Messrs. Clark and Blidner, is independent of the Company and its management under NYSENasdaq listing standards:standards. Dr. Chang is not independent because he was appointed to the board of directors of the BPY General Partner as the representative of a large shareholder of BPY and Messrs. Clark Flatt, Haley, Hurwitz, Kingston, Neithercut, and Patterson and Ms. Fiala. Mr. Mathrani isBlidner are not independent due to histheir employment as Chief Executive Officer of the Company.
Important Governance Policies
Corporate Governance Guidelines
The Board has adopted Corporate Governance Guidelines, which,to assist the Board in the exercise of its responsibilities. The Corporate Governance Guidelines govern, among other matters:
Our Corporate Governance Guidelines are available on our website at
Stock Ownership Guidelines for Non-Employee Directors and Executive Officers
The Board believes that stock ownershipdirectors can better represent our stockholders if they have economic exposure to our Company themselves. Our Company expects that our independent directors should hold sufficient BPY units or Class A Shares such that the acquisition costs of such securities held by its non-employeesuch directors is an important component of its corporate governance policies. Our stock ownership guidelines for non-employee directors, which are included in our Corporate Governance Guidelines, require that each non-employee director, other than those designated by a significant investor, ownequal to at least two times their annual retainer, as determined by the lesserBoard from time to time.
Independent directors are required to purchase BPY limited partnership units or Class A Shares on an annual basis in an amount not less than 20% of 25,000 shares or shares having a market valuethe minimum economic ownership requirement until the requirement is met. Independent directors are required to achieve this minimum economic ownership within five years of $525,000joining the Board. In the event of our common stockan increase in the annual retainer fee, the independent directors will have two years from the date of the change to comply with the ownership requirement. In the case of independent directors who have served on the Board less than five years at the date of the change, such directors will be required to comply with the ownership requirement by the date that is the later of: (i) the fifth anniversary of the director’s electiontheir appointment to the Board, and each anniversary thereafter.(ii) two years following the date of the change in retainer fee. All of our non-employeeindependent directors comply withhave met this minimum economic ownership requirement.
Generally, directors are prohibited from entering into any transactions which have the stockeffect of hedging the economic value of BPY limited partnership units or Class A Shares that they own. However, under limited circumstances, a director may be permitted to enter into a hedging transaction in respect of interests held by such individual in excess of the minimum economic ownership guidelines.
Code of Business Conduct and Ethics
The Board has adopted the Code of Business Conduct and Ethics (“Code of Conduct”) of Brookfield Asset Management, which is applicable to all directors, officers, employees directors and officerstemporary workers of the Company andBrookfield Asset Management, its wholly-owned subsidiaries and affiliates. Thecertain publicly-traded controlled affiliates who have not adopted their own Code of Conduct, includes a process and a toll‑free telephone number for anonymous reports of potentially inappropriate conduct or potential violations ofincluding the Company.
Our Code of Conduct.Conduct is available on our website at bpy.brookfield.com/bpyu under the “Corporate Governance—Governance Documents” heading. In addition, a copy may be obtained by writing to our Secretary at our principal executive offices. We intend to satisfy the disclosure requirement regarding any amendment to, or a waiver of, a provision of the Code of Conduct for the Company’s principal executive officer, principal financial officer, principal accounting officer and controller, or persons performing similar functions, by posting such information on the Company’s website.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||||
| Richard B. Clark* | 175,000 | — | — | 175,000 | ||||||
| Mary Lou Fiala | 58,333 | 116,655 | — | 174,988 | ||||||
| J. Bruce Flatt*(2) | — | — | — | — | ||||||
| John K. Haley | 25,000 | (3) | 174,996 | — | 199,996 | |||||
| Daniel B. Hurwitz | — | 175,011 | — | 175,011 | ||||||
| Brian W. Kingston* | 175,000 | — | — | 175,000 | ||||||
| David J. Neithercut | — | 175,011 | — | 175,011 | ||||||
| Mark R. Patterson | 68,333 | (4) | 116,673 | — | 185,006 | |||||
| * Denotes director designated by Brookfield. | ||||||||||
 |
Year-Over-Year Change in CEO Total Direct Compensation (Excluding One-Time Employment Agreement Award) | ||||||||
| Base Salary | Annual Incentive Compensation | Long-Term Incentive Compensation | ||||||
| 2014 | 2015 | % Change | 2014 | 2015 | % Change | 2014 | 2015 | % Change |
| $1,200,000 | $1,200,000 | 0.0% | $3,000,000 | $3,000,000 | 0.0% | $10,000,000 | $8,500,000 | -15.0% |
| Base Salary | |||
| NEO | 2014 | 2015 | % Change |
| Sandeep Mathrani | $1,200,000 | $1,200,000 | 0% |
| Michael B. Berman | $750,000 | $750,000 | 0% |
| Shobi Khan | $750,000 | $750,000 | 0% |
| Alan J. Barocas | $750,000 | $750,000 | 0% |
| Richard S. Pesin | $750,000 | $750,000 | 0% |
| NEO | Target Annual Cash Award (as a % of Base Salary) | Target Annual Cash Award Amount ($) | Annual Cash Award Received (as a % of Base Salary) | Amount of Cash Award Received |
| Sandeep Mathrani | 250% | $3,000,000 | 250% | $3,000,000 |
| Michael B. Berman | 100% | $750,000 | 107% | $800,000 |
| Shobi Khan | 100% | $750,000 | 107% | $800,000 |
| Alan J. Barocas | 100% | $750,000 | 107% | $800,000 |
| Richard S. Pesin | 100% | $750,000 | 107% | $800,000 |
| January 2015 Equity Awards for 2014 Performance* | ||||
| NEO | Number of FV LTIP Units | Value | ||
| Sandeep Mathrani | 343,997 | $ | 9,999,992 | |
| Michael B. Berman | 85,999 | $ | 2,499,991 | |
| Shobi Khan | 77,399 | $ | 2,249,989 | |
| Alan J. Barocas | 60,200 | $ | 1,750,014 | |
| Richard S. Pesin | 60,200 | $ | 1,750,014 | |
| February 2016 Equity Awards for 2015 Performance | |||||||||||||
| NEO | Value of AO LTIP Units (1) | Number of AO LTIP Units Granted | Value of Performance LTIP Units (1) | Aggregate Number of Performance-vesting LTIP Units Granted (2) | Total Value of LTIP Awards Granted | ||||||||
| Sandeep Mathrani | $ | 4,250,000 | 826,848 | $ | 4,250,000 | 257,944 | $ | 8,500,000 | |||||
| Michael B. Berman | $ | 1,250,000 | 243,191 | $ | 1,250,000 | 75,867 | $ | 2,500,000 | |||||
| Shobi Khan | $ | 1,500,000 | 291,829 | $ | 1,500,000 | 91,038 | $ | 3,000,000 | |||||
| Alan J. Barocas | $ | 875,000 | 170,233 | $ | 875,000 | 53,106 | $ | 1,750,000 | |||||
| Richard S. Pesin | $ | 875,000 | 170,233 | $ | 875,000 | 53,106 | $ | 1,750,000 | |||||
| February 2016 Performance-Vesting LTIP Units | |||||
| Performance Measure | Number of Units | ||||
| Sandeep Mathrani | Michael B. Berman | Shobi Khan | Alan J. Barocas | Richard S. Pesin | |
| Relative Equity REIT TSR | 52,620 | 15,477 | 18,572 | 10,833 | 10,833 |
| Relative Retail REIT TSR | 62,779 | 18,465 | 22,157 | 12,926 | 12,926 |
| Absolute TSR | 97,465 | 28,666 | 34,399 | 20,066 | 20,066 |
| FFO | 45,080 | 13,259 | 15,910 | 9,281 | 9,281 |
| Total | 257,944 | 75,867 | 91,038 | 53,106 | 53,106 |
| Total Compensation | |||||||||||||||
| NEO | Base Salary | Incentive Compensation Plan Award | Long-Term Incentive Award Value* | Annualized Value of One-time Long-term Incentive Award** | Total Compensation | ||||||||||
| Sandeep Mathrani | $ | 1,200,000 | $ | 3,000,000 | $ | 8,500,000 | $ | 5,000,000 | $ | 17,700,000 | |||||
| Michael B. Berman | $ | 750,000 | $ | 800,000 | $ | 2,500,000 | N/A | $ | 4,050,000 | ||||||
| Shobi Khan | $ | 750,000 | $ | 800,000 | $ | 3,000,000 | N/A | $ | 4,550,000 | ||||||
| Alan J. Barocas | $ | 750,000 | $ | 800,000 | $ | 1,750,000 | N/A | $ | 3,300,000 | ||||||
| Richard S. Pesin | $ | 750,000 | $ | 800,000 | $ | 1,750,000 | N/A | $ | 3,300,000 | ||||||
| Name and Principal Position | Year | Salary ($) | Non-Equity Incentive Plan Compensation ($)(1) | Stock Awards ($)(2) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | ||||
| Sandeep Mathrani | 2015 | 1,200,000 | 3,000,000 | 34,999,984 | — | 47,574 | 39,247,558 | ||||
| Chief Executive Officer | 2014 | 1,200,000 | 3,000,000 | — | — | 692,039 | 4,892,039 | ||||
| 2013 | 1,200,000 | 3,000,000 | — | 17,322,000 | 580,608 | 22,102,608 | |||||
| Michael B. Berman | 2015 | 750,000 | 800,000 | 2,499,991 | — | 14,000 | 4,063,991 | ||||
| Executive Vice President | 2014 | 750,000 | 750,000 | — | — | 27,084 | 1,527,084 | ||||
| and Chief Financial Officer | 2013 | 750,000 | 1,000,000 | — | 5,482,736 | 37,934 | 7,270,670 | ||||
| Shobi Khan | 2015 | 750,000 | 800,000 | 2,249,989 | — | 14,000 | 3,813,989 | ||||
| Executive Vice President | 2014 | 750,000 | 750,000 | — | — | 14,750 | 1,514,750 | ||||
| and Chief Operating Officer | 2013 | 750,000 | 1,000,000 | — | 5,061,948 | 20,100 | 6,832,048 | ||||
| Alan J. Barocas | 2015 | 750,000 | 800,000 | 1,750,014 | — | 14,000 | 3,314,014 | ||||
| Senior Executive Vice | 2014 | 750,000 | 750,000 | — | — | 14,750 | 1,514,750 | ||||
| President, Leasing | 2013 | 750,000 | 1,000,000 | — | 3,162,155 | 20,100 | 4,932,255 | ||||
| Richard S. Pesin | 2015 | 750,000 | 800,000 | 1,750,014 | — | 14,000 | 3,314,014 | ||||
| Executive Vice President, | 2014 | 750,000 | 750,000 | — | — | 16,750 | 1,516,750 | ||||
| Anchors, Development and | 2013 | 750,000 | 1,000,000 | — | 3,162,155 | 16,800 | 4,928,955 | ||||
| Construction | |||||||||||
| Name | Year | 401(k) Matching Contribution ($) | Sum of Dividends on Restricted Stock ($) | Relocation Expenses($) | Other ($) | Total ($) | |||||||
| Sandeep Mathrani | 2015 | 13,250 | 0 | — | 34,324 | (1) | 47,574 | ||||||
| 2014 | 13,000 | 600,000 | — | 79,039 | (1) | 692,039 | |||||||
| 2013 | 12,750 | 480,000 | — | 87,858 | (1) | 580,608 | |||||||
| Michael B. Berman | 2015 | 13,250 | 0 | — | 750 | (2) | 14,000 | ||||||
| 2014 | 13,000 | 12,334 | — | 1,750 | (3) | 27,084 | |||||||
| 2013 | 12,750 | 17,834 | — | 7,350 | (4) | 37,934 | |||||||
| Shobi Khan | 2015 | 13,250 | — | — | 750 | (2) | 14,000 | ||||||
| 2014 | 13,000 | — | — | 1,750 | (3) | 14,750 | |||||||
| 2013 | 12,750 | — | — | 7,350 | (4) | 20,100 | |||||||
| Alan J. Barocas | 2015 | 13,250 | — | — | 750 | (2) | 14,000 | ||||||
| 2014 | 13,000 | — | — | 1,750 | (3) | 14,750 | |||||||
| 2013 | 12,750 | — | — | 7,350 | (4) | 20,100 | |||||||
| Richard S. Pesin | 2015 | 13,250 | — | — | 750 | (2) | 14,000 | ||||||
| 2014 | 13,000 | — | — | 3,750 | (5) | 16,750 | |||||||
| 2013 | 12,750 | — | — | 4,050 | (6) | 16,800 | |||||||
| Name | Grant Date | Estimated Future Payouts Under Non‑Equity Incentive Plan Awards(1) | All Other Stock Awards: Number of Shares of Stock or Units (2) | All Other Option Awards: Number of Securities Underlying | Exercise or Base Price of Option | Grant Date Fair Value of Stock and Option | ||||||||||||||
| Threshold($) | Target ($) | Maximum($) | Units (#) | Options (#) | Awards ($/Sh) | Awards ($) | ||||||||||||||
| Sandeep Mathrani | 02/12/15 | — | — | — | 848,608 | — | — | 24,999,992 | ||||||||||||
| 01/06/15 | — | — | — | 343,997 | — | — | 9,999,993 | |||||||||||||
| — | — | 3,000,000 | 6,000,000 | — | — | — | — | |||||||||||||
| Michael B. Berman | 01/06/15 | — | — | — | 85,999 | — | — | 2,499,991 | ||||||||||||
| — | — | 750,000 | 1,500,000 | — | — | — | — | |||||||||||||
| Shobi Khan | 01/06/15 | — | — | — | 77,399 | — | — | 2,249,989 | ||||||||||||
| — | — | 750,000 | 1,500,000 | — | — | — | — | |||||||||||||
| Alan J. Barocas | 01/06/15 | — | — | — | 60,200 | — | — | 1,750,014 | ||||||||||||
| — | — | 750,000 | 1,500,000 | — | — | — | — | |||||||||||||
| Richard S. Pesin | 01/06/15 | — | — | — | 60,200 | — | — | 1,750,014 | ||||||||||||
| — | — | 750,000 | 1,500,000 | — | — | — | — | |||||||||||||
| Percentage of Budget EBITDA Achieved | Percentage of Target Award | |
| Threshold | 90% | 0% |
| Target | 100% | 100% |
| Maximum | ≥110% | 200% |
| Name | Option Awards | Stock Awards | |||||||||||
| Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) (10) | ||||||||
| Sandeep Mathrani | 2,000,000 | (1) | — | 9.69 | 10/27/2020 | — | — | ||||||
| 705,882 | 176,471 | (2) | 14.76 | 8/2/2021 | — | — | |||||||
| 560,000 | 840,000 | (3) | 19.24 | 1/7/2023 | — | — | |||||||
| 1,000,000 | 1,000,000 | (4) | 20.61 | 11/12/2023 | — | — | |||||||
| 343,997 | (8) | 9,732,341 | |||||||||||
| 848,608 | (9) | 24,008,762 | |||||||||||
| Michael B. Berman | 80,000 | 80,000 | (5) | 13.81 | 12/15/2021 | — | — | ||||||
| 189,473 | 284,211 | (3) | 19.24 | 1/7/2023 | — | — | |||||||
| 300,000 | 300,000 | (4) | 20.61 | 11/12/2023 | — | — | |||||||
| 85,999 | (8) | 2,433,078 | |||||||||||
| Shobi Khan | 320,000 | 80,000 | (6) | 15.27 | 6/13/2021 | — | — | ||||||
| 320,000 | 80,000 | (2) | 14.76 | 8/2/2021 | — | — | |||||||
| 157,894 | 236,843 | (3) | 19.24 | 1/7/2023 | — | — | |||||||
| 300,000 | 300,000 | (4) | 20.61 | 11/12/2023 | — | — | |||||||
| 77,399 | (8) | 2,189,767 | |||||||||||
| Alan J. Barocas | 200,000 | — | (7) | 14.11 | 1/24/2021 | — | — | ||||||
| 320,000 | 80,000 | (2) | 14.76 | 8/2/2021 | — | — | |||||||
| 126,315 | 189,474 | (3) | 19.24 | 1/7/2023 | — | — | |||||||
| 150,000 | 150,000 | (4) | 20.61 | 11/12/2023 | — | — | |||||||
| 60,200 | (8) | 1,703,174 | |||||||||||
| Richard S. Pesin | 400,000 | — | (7) | 14.11 | 1/24/2021 | — | — | ||||||
| 320,000 | 80,000 | (2) | 14.76 | 8/2/2021 | — | — | |||||||
| 126,315 | 189,474 | (3) | 19.24 | 1/7/2023 | — | — | |||||||
| 150,000 | 150,000 | (4) | 20.61 | 11/12/2023 | — | — | |||||||
| 60,200 | (8) | 1,703,174 | |||||||||||
| Name | Option Awards | Stock Awards | |||||||||||||||
| Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | ||||||||||||||
| Sandeep Mathrani | — | — | — | — | |||||||||||||
| Michael B. Berman | 80,000 | 954,400 | — | — | |||||||||||||
| Shobi Khan | — | — | — | — | |||||||||||||
| Alan J. Barocas | 200,000 | 3,190,000 | — | — | |||||||||||||
| Richard S. Pesin | — | — | — | — | |||||||||||||
| Name | Cash Severance | Pro rata Cash Award | Early Vesting of Awards | Excise Tax Gross-Up | Welfare Benefits | Total | ||||||||||||||||||||||
| Sandeep Mathrani: | ||||||||||||||||||||||||||||
Termination by the Company Without Cause or by Mr. Mathrani for Good Reason | $8,400,000 | $3,000,000 | $49,232,967 | (1) | — | $49,612 | (2) | $60,682,579 | ||||||||||||||||||||
| Termination due to Death or Disability | — | $3,000,000 | $49,232,967 | (1) | — | — | $52,232,967 | |||||||||||||||||||||
| Change in Control | — | — | $33,741,103 | (3) | — | (4) | — | $33,741,103 | ||||||||||||||||||||
| Michael Berman: | ||||||||||||||||||||||||||||
| Termination by the Company Without Cause | $3,000,000 | — | $1,072,000 | (5) | — | $4,072,000 | ||||||||||||||||||||||
| Shobi Khan: | ||||||||||||||||||||||||||||
| Termination by the Company Without Cause | $750,000 | $750,000 | — | — | $1,500,000 | |||||||||||||||||||||||
| Alan Barocas: | ||||||||||||||||||||||||||||
| Termination by the Company Without Cause | $375,000 | $750,000 | — | — | $1,125,000 | |||||||||||||||||||||||
| Richard Pesin: | ||||||||||||||||||||||||||||
| Termination by the Company Without Cause | $375,000 | $750,000 | — | — | $1,125,000 | |||||||||||||||||||||||
| Name of Beneficial Owner | Common Stock | Series A Preferred Stock | ||||||||
| Number of Shares Beneficially Owned | Percent of Class | Number of Shares Beneficially Owned | Percent of Class | |||||||
| Principal Stockholders: | ||||||||||
Brookfield(1) | 389,202,508 | 40.0 | % | — | — | |||||
The Vanguard Group(2) | 75,736,508 | 8.6 | % | — | — | |||||
BlackRock Inc.(3) | 50,966,709 | 5.8 | % | — | — | |||||
| Named Executive Officers: | ||||||||||
| Sandeep Mathrani | 5,286,030 | (4)(5) | * | — | — | |||||
| Michael B. Berman | 711,141 | (4)(5) | * | — | — | |||||
| Shobi Khan | 1,203,166 | (4)(5) | * | — | — | |||||
| Alan J. Barocas | 865,417 | (4)(5) | * | — | — | |||||
| Richard S. Pesin | 1,084,917 | (4)(5) | * | — | — | |||||
| Directors: | ||||||||||
Richard B. Clark(1) | 389,202,508 | (6) | 40.0 | % | — | — | ||||
| Mary Lou Fiala | 38,509 | (7) | * | — | — | |||||
J. Bruce Flatt(1) | 389,202,508 | (6) | 40.0 | % | — | — | ||||
| John K. Haley | 50,073 | (5) | * | — | — | |||||
| Daniel B. Hurwitz | 27,692 | (7) | * | — | — | |||||
Brian W. Kingston(1) | 389,202,508 | (6) | 40.0 | % | — | — | ||||
| David J. Neithercut | 55,329 | (7) | * | — | — | |||||
| Mark R. Patterson | 22,665 | (5) | * | — | — | |||||
| All directors and executive officers as a group (15 persons) | 398,896,950 | (4)(5)(7) | 40.7 | % | 4,000 | (8) | * | |||
| 2015 | 2014 | 2013 | |||||||
| Audit Fees | $3,034,000 | $3,003,000 | $2,846,000 | ||||||
| Audit-Related Fees | $983,000 | $836,000 | $711,000 | ||||||
| Tax Fees | $625,000 | $794,000 | $866,000 | ||||||
| All Other Fees | — | — | — | ||||||
Stockholder Communications with the Board
Stockholders or other interested persons wishing to communicate with members of the Board may contact them by writing to them, c/o Corporate Secretary, at our principal executive offices at 110 North Wacker Drive, Chicago, Illinois 60606.250 Vesey Street, 15th Floor, New York, New York 10281-1023. Correspondence may be addressed to the independent directors as a group, the entire Board or one or more individual members of the Board, at the election of the sender. Any such communication will be promptly distributed to the director or directors named therein. Communications will be forwarded to all directors if they relate to substantive matters and include suggestions or comments that the recipient considers to be important for all directors to know.
EXECUTIVE OFFICERS
Our Service Providers, wholly-owned subsidiaries of Brookfield Asset Management, provide management services to us pursuant to our Master Services Agreement. Brian W. Kingston and Bryan K. Davis in their roles at the Service Providers perform similar functions for BPYU as would typically be performed by a principal executive officer and principal financial officer, respectively.
Set forth below is the biographical information for each of Messrs. Kingston and Davis.
Brian W. Kingston, 46
Mr. Kingston is Chief Executive Officer of BPG. He is also a Managing Partner of Brookfield Asset Management, which he joined in 2001. From 2008 to 2013, Mr. Kingston led Brookfield Asset Management’s Australian business activities, holding the positions of Chief Executive Officer of Brookfield Office Properties Australia, Chief Executive Officer of Prime Infrastructure and Chief Financial Officer of Multiplex. Mr. Kingston served as a director on the GGP Board of Directors from August 2013 until his resignation in August 2018 in connection with the acquisition of GGP and previously served on the board of Rouse Properties, Inc. from 2013 to 2016.
Brian K. Davis, 46
Mr. Davis is Chief Financial Officer of BPG. Prior to that, he was Chief Financial Officer of Brookfield Asset Management’s global office property company for eight years and spent five years in senior finance roles. Mr. Davis also held various senior finance positions including Chief Financial Officer of Trilon Financial Corporation, Brookfield Asset Management’s financial services subsidiary. Mr. Davis serves on the board of Brookfield Office Properties Inc. Prior to joining Brookfield Asset Management in 1999, Mr. Davis was involved in providing restructuring and advisory services at Deloitte.
Compensation of Executive Officers
The Company does not directly employ any of the persons responsible for managing its business. Under our Master Services Agreement, our Service Providers provide, or arrange for other service providers to provide, day-to-day management and administrative services for our Company. Please see “Certain Relationships and Related Party Transactions—Related Party Transactions—Master Services Agreement” below for further detail on our Master Services Agreement.
Messrs. Kingston and Davis in their roles at the Service Providers perform similar functions for BPYU as would typically be performed by a principal executive officer and principal financial officer, respectively. BPYU does not directly or indirectly compensate Messrs. Kingston and Davis or grant them any equity awards. BPYU does not reimburse the Service Providers for their compensation. The compensation of Messrs. Kingston and Davis is set by the Service Providers and we have no control over the determination of their compensation. Messrs. Kingston and Davis participate in employee benefit plans and arrangements sponsored by the Service Providers. We have not established any employee benefit plans or entered into any employment agreements with them.
Given that the Company is externally managed and does not compensate employees of the Service Providers or reimburse the Service Providers for their compensation, the Board has determined to no longer hold annual stockholder advisory votes on executive compensation.
16
DIRECTOR COMPENSATION
Directors receive an annual retainer of $15,000 for their service on the Board and reimbursement of expenses incurred in attending meetings. Directors also receive an annual retainer of $125,000 for serving on the board of directors and various committees of the BPY General Partner. The BPY General Partner pays the chair of its audit committee an additional $20,000 per year and pays the other members of its audit committee an additional $10,000 per year for serving in such positions. The BPY General Partner also pays its lead independent director an additional $10,000 per year. Directors who are not independent due to Proxy Materialstheir employment with Brookfield Asset Management receive no fees for their services on the Board.
The Governance and DirectionsNominating Committee periodically reviews Board compensation in relation to its peers and other similarly sized companies and is responsible for approving changes in compensation for non-employee directors.
2019 Director Compensation
The following table sets forth the compensation earned by or paid to each of our non-employee directors in 2019. Mr. McGregor was appointed to the Board in March 2020 and, therefore, did not receive any compensation during 2019.
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||||||||||
| Richard B. Clark | — | — | — | — | ||||||||||||
| Caroline M. Atkinson | 15,000 | — | — | 15,000 | ||||||||||||
| Jeffrey M. Blidner | — | — | — | — | ||||||||||||
| Soon Young Chang | 15,000 | — | — | 15,000 | ||||||||||||
| Scott R. Cutler | 15,000 | — | — | 15,000 | ||||||||||||
| Omar Carneiro da Cunha | 15,000 | — | — | 15,000 | ||||||||||||
| Stephen DeNardo | 15,000 | — | — | 15,000 | ||||||||||||
| Louis J. Maroun | 15,000 | — | — | 15,000 | ||||||||||||
| Lars Rodert | 15,000 | — | — | 15,000 | ||||||||||||
| (1) | None of the directors held BPYU stock options or unvested stock awards as of December 31, 2019. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial ownership of each class of our capital stock by certain persons as of March 31, 2020. In the case of persons other than Messrs. Kingston and Davis, our directors and Brookfield Asset Management, or where we have received additional information from the beneficial owner, the information presented in this table is based upon the most recent filings with the SEC.
The table lists the applicable percentage ownership based on 57,336,992 shares of Class A Stock, 202,438,184 shares of Series B Preferred Stock, 175,180,348 shares of Class B-1 Stock, 121,203,654 shares of Class B-2 stock, par value $0.01 per share (“Class B-2 Stock”), 640,051,301 shares of Class C Stock and 10,000,000 shares of 6.375% Series A Cumulative Perpetual Redeemable Preferred Stock, par value $0.01 per share (“Series A Preferred Stock”) outstanding as of March 31, 2019.
The table below sets forth such estimated beneficial ownership for: each stockholder that is known to us to be a beneficial owner of more than 5% of the Company’s outstanding shares of each class of our capital stock (“Principal Stockholders”); each director; Messrs. Kingston and Davis; and all directors and Messrs. Kingston and Davis as a group.
| Class A Stock | Series B Preferred Stock | Class B-1 Stock | Class B-2 Stock | Class C Stock | Series A Preferred Stock | |||||||||||||||||||||||||||||||||||||||||||
| Name of Beneficial Owner | # Shares Beneficially Owned | % of Class | # Shares Beneficially Owned | % of Class | # Shares Beneficially Owned | % of Class | # Shares Beneficially Owned | % of Class | # Shares Beneficially Owned | % of Class | # Shares Beneficially Owned | % of Class | ||||||||||||||||||||||||||||||||||||
| Principal Stockholders: | ||||||||||||||||||||||||||||||||||||||||||||||||
| Blackrock, Inc.(1) | 4,193,676 | 7.31 | % | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| BPY | — | — | 202,438,184 | 100 | % | 175,180,348 | 100 | % | 121,203,654 | 100 | % | 640,051,301 | 100 | % | — | — | ||||||||||||||||||||||||||||||||
| Persons and entities associated with Farallon Capital Management LLC(2) | 8,054,215 | 14.04 | % | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| The Vanguard Group(3) | 5,028,678 | 8.77 | % | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Persons associated with FMR LLC(4) | 4,000,887 | 6.98 | % | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Named Executive Officers(5): | ||||||||||||||||||||||||||||||||||||||||||||||||
| Brian W. Kingston | 235,000 | * | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Bryan K. Davis | 100,000 | * | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Directors(5): | ||||||||||||||||||||||||||||||||||||||||||||||||
| Caroline M. Atkinson | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Jeffrey M. Blidner | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Soon Young Chang | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Richard B. Clark | 222,154 | * | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Omar Carneiro da Cunha | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Scott R. Cutler | 6,665 | * | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Stephen DeNardo | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Louis J. Maroun | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| A. Douglas McGregor | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Lars Rodert | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| All directors and executive officers as a group (11 persons) | 563,819 | * | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| * | Represents beneficial ownership of less than 1%. |
| (1) | Information regarding BlackRock, Inc. (“BlackRock”) is based solely on a Schedule 13G/A filed by BlackRock with the SEC on July 10, 2019. BlackRock’s address is 55 East 52nd Street, New York, NY 10055. The Schedule 13G/A indicates that BlackRock has sole voting power with respect to 3,827,792 shares of Class A Stock and sole dispositive power with respect to 4,193,676 shares of Class A Stock. |
| (2) | Information regarding Farallon Capital Management, LLC (“Farallon”) is based solely on a Schedule 13G filed by Farallon with the SEC on September 7, 2018 on behalf of Farallon and the following associated persons and entities: Farallon Capital Partners, L.P., Farallon Capital Institutional Partners, L.P., Farallon Capital Institutional Partners II, L.P., Farallon Capital Institutional Partners III, L.P., Four Crossings Institutional Partners V, L.P. and Farallon Capital (AM) Investors L.P., Farallon Partners, L.L.C., Farallon Institutional (GP) V, L.L.C., Philip D. Dreyfuss, Michael B. Fisch, Richard B. Fried, David T. Kim, Monica R. Landry, Michael G. Linn, Rajiv A. Patel, Thomas G. Roberts, Jr., William Seybold, Andrew J. M. Spokes, John R. Warren and Mark C. Wehrly (collectively, the “Farallon Reporting Persons”). The address of the Farallon Reporting Persons is c/o Farallon Capital Management, L.L.C., One Maritime Plaza, Suite 2100, San Francisco, CA 94111. The Schedule 13G indicates that, collectively, the Farallon Reporting Persons have shared voting and dispositive power over 8,054,215 shares of Class A Stock. |
| (3) | Information regarding The Vanguard Group (“Vanguard”) is based solely on a Schedule 13G/A filed by Vanguard with the SEC on February 12, 2020. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates that Vanguard has sole voting power with respect to 85,151 shares of Class A Stock, shared voting power with respect to 64,176 shares of Class A Stock, sole dispositive power with respect to 4,949,787 shares of Class A Stock and shared dispositive power with respect to 78,891 shares of Class A Stock. |
| (4) | Information regarding FMR LLC is based solely on a Schedule 13G filed by FMR LLC with the SEC on February 7, 2020 on behalf of FMR LLC and Abigail P. Johnson (collectively, the FMR Reporting Persons”). The address of the FMR Reporting Persons is 245 Summer Street, Boston, MA 02210. The Schedule 13G indicates that the FMR Reporting Persons have sole voting power with respect to 876 shares of Class A Stock and sole dispositive power with respect to 4,000,887 shares of Class A Stock. |
| (5) | Unless otherwise noted, the address of (i) Mr. Blidner is c/o Brookfield Asset Management, 181 Bay Street, Suite 300, Toronto, Ontario M5J 2T3; (ii) Ms. Atkinson and Messrs. Carneiro da Cunha, Chang, Cutler, DeNardo, Maroun, McGregor and Rodert, is c/o Brookfield Property Partners Limited, 73 Front Street, 5th Floor, Hamilton, HM 12 Bermuda; and (iii) Messrs. Clark, Kingston and Davis is c/o Brookfield Property Group, Brookfield Place, 250 Vesey Street, 15th Floor, New York, NY 10281. |
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Conflicts Policy
Our Governance and Nominating Committee has approved a Conflicts Policy designed to assist with the proper identification, review and disclosure of related party transactions. The Conflicts Policy addresses the approval and other requirements for transactions in which there is greater potential for a conflict of interest to arise. These transactions include:
Our Conflicts Policy requires the transactions described above to be approved by our Governance and Nominating Committee. Pursuant to our Conflicts Policy, the Governance and Nominating Committee may grant approvals for any of the transactions described above in the form of general guidelines, policies or procedures in which case no further special approval will be required in connection with a particular transaction or matter permitted thereby. The Conflicts Policy can be amended at the discretion of the Governance and Nominating Committee.
Related Party Transactions
Master Services Agreement
We have entered into a Master Services Agreement pursuant to which the Service Providers, wholly owned subsidiaries of Brookfield Asset Management, have agreed to provide or arrange for other Service Providers to provide management and administration services to our Company and its subsidiaries. The following is a summary of certain provisions of our Master Services Agreement. Because this description is only a summary of our Master Services Agreement, it does not necessarily contain all of the information that you may find useful. We therefore urge you to review our Master Services Agreement in its entirety. Our Master Services Agreement is available electronically on the website of the SEC at www.sec.gov and a copy may be obtained by writing to our Secretary at our principal executive offices.
Under our Master Services Agreement, we have appointed the Service Providers to provide or arrange for the provision of the following services:
The Service Providers’ activities are subject to the supervision of the board of directors or equivalent governing body of BPYU and of each of the other Service Recipients, as applicable. The relevant governing body remains responsible for all investment and divestment decisions made by the Service Recipient.
Pursuant to the Master Services Agreement, BPYU pays an annual base management fee to the Service Providers equal to 1.25% of the total capitalization of BPYU, subject to certain adjustments. The total capitalization value of BPYU is equal to the aggregate of the value of all of the outstanding Class A Stock and other securities of BPYU and its direct or indirect subsidiaries that are not held by BPYU, BPY and certain of their affiliates, plus all outstanding third party debt with recourse against BPYU and any other direct or indirect subsidiary, less all cash held by such entities. For the first 12 months following the closing of the BPY Transaction, Brookfield Asset Management agreed to waive management fees payable by BPYU and the incremental management fees BPY would otherwise be required to pay in respect of the securities issued in exchange for the GGP common stock in the BPY Transaction. For the year ended December 31, 2019, $2.1 million was paid under the Master Services Agreement.
For any quarter in which the Board determines that there is insufficient available cash to pay the base management fee as well as the next regular distribution on Class A Stock, BPYU may elect to pay all or a portion of the base management fee in Class A Stock, subject to certain conditions. The base management fee is calculated and paid on a quarterly basis.
To the extent that under any other arrangement BPYU or its subsidiaries makes a payment that is determined to be comparable to the base management fee payable by BPYU, the base management fee payable by BPYU will be reduced on a dollar for dollar basis by the comparable base management fee, subject to certain limitations. In addition, to the extent that there are any residual fees, comparable to the base management fees payable by BPYU, that are not used to reduce the base management fees payable by BPY, the base management fee payable by BPYU will be reduced on a dollar for dollar basis by such residual fees.
Additionally, the Service Providers are reimbursed for any out-of-pocket fees, costs and expenses incurred in the provision of the management and administration services, including those of any third party. However, BPYU is not required to reimburse the Service Providers for the salaries and other remuneration of their management, personnel or support staff who carry out any services or functions for BPYU or overhead for such persons.
Incentive Distributions
An affiliate of Brookfield Asset Management is entitled to receive incentive distributions based on an amount by which quarterly distributions on the Class A Stock and series K preferred units of BPYU’s operating partnership exceed specified target levels. No incentive distributions were paid in the year ended December 31, 2019.
Financings
From time to time, Brookfield may loan funds to us or place funds on deposit with us, on terms approved by our Governance and Nominating Committee. The following arrangements were entered into during the year ended December 31, 2019:
Other Services
Brookfield Asset Management and its affiliates may provide services to our subsidiaries which are outside the scope of our Master Services Agreement under arrangements that are on market terms and conditions, or otherwise permitted or approved by independent directors, pursuant to our Conflicts Policy, and pursuant to which Brookfield Asset Management will receive fees. The services that may be provided under these arrangements include financial advisory, property management, facilities management, development, relocation services, construction activities, marketing or other services. We may also provide similar services to Brookfield Asset Management and its affiliates that are on market terms and conditions, or otherwise permitted or approved by independent directors, pursuant to our Conflicts Policy, and pursuant to which we will receive fees. We paid or received the Noticefollowing fees for such services in the year ended December 31, 2019:
Other Related Party Transactions
In connection with the BPY Transaction, Brookfield Asset Management entered into a rights agreement with Wilmington Trust Company whereby it agreed to satisfy, or cause to be satisfied, the obligations with respect to the secondary exchange rights contained in the Company’s Charter and deposit certain cash or securities in a collateral account in accordance with the agreement. In this agreement, Brookfield Asset Management was granted a consent right whereby prior to the issuance by BPYU of any shares of Class A Stock, BPYU will be required, for as long as Brookfield Asset Management is a party to the rights agreement, to obtain the consent of Brookfield Asset Management. The rights agreement will terminate on the earlier of the twentieth anniversary of the BPY Transaction or if there is no Class A Stock outstanding, other than Class A Stock owned by Brookfield Asset Management and its affiliates. Our Company is required to reimburse Brookfield Asset Management for all amounts paid to the rights agent (i) pursuant to the rights agreement including, in respect of services rendered, out-of-pocket expenses, counsel fees and other disbursements incurred in the administration and execution of the agreement and the exercise and performance of the rights agent’s duties thereunder, and (ii) in respect of any indemnification provided to the rights agent pursuant to the rights agreement.
BPYU, BPY and the BPY General Partner, among others, are party to the Joint Governance Agreement which provides a subsidiary of BPY with the right to designate candidates to be nominated for election to the Board. See “Corporate Governance—Director Nomination Process” for further detail on this agreement.
On August 19, 2019, the Company sold the SoNo Collection to a newly formed joint venture owned 80.5% by an affiliated fund (which is a related party of the Company) and 19.5% by the Company. The property was contributed to the joint venture at a value of $419.3 million based on project-specific cash costs. This excludes additional costs to complete the project by the joint venture. On December 4, 2019, the joint venture partner contributed $30.0 million and committed to contribute an additional $70.8 million in additional capital to the joint venture, resulting in a dilution of the Company's ownership interest from 19.5% to 12.9% as of December 31, 2019. The $70.8 million contribution was received on February 7, 2020.
REPORT OF THE AUDIT COMMITTEE
The Audit Committee has reviewed and discussed with management the audited financial statements appearing in the Annual Report for the fiscal year ended December 31, 2019.
The Audit Committee has discussed with the independent registered public accountants the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) standards and the SEC.
The Audit Committee has also received the written disclosures and the letter from the independent registered public accountants required by the PCAOB regarding the independent accountant’s communication with the Audit Committee concerning independence and has discussed with the independent registered public accountants the issue of their independence.
Based on its review of the audited financial statements and the various discussions noted above, the Audit Committee recommended to the Board that the audited financial statements be included in the Annual Report for the fiscal year ended December 31, 2019 for filing with the SEC.
Stephen DeNardo (Chair)
Louis J. Maroun
Lars Rodert
ADDITIONAL INFORMATION
Delinquent Section 16 Reports
Section 16(a) of the Exchange Act requires our directors, executive officers and holders of more than 10% of a registered class of our equity securities to file reports with the SEC regarding their ownership and changes in ownership of such registered equity securities. Based on our review of the copies of all Section 16(a) forms received by us and other information, we believe that with regard to the fiscal year ended December 31, 2019, all of our executive officers, directors and greater than 10% stockholders complied with all applicable filing requirements, except as follows: Caroline M. Atkinson and Scott R. Cutler were late in filing their initial Form 3 filings upon their respective appointments to the Board in February 2019 and A. Douglas McGregor was late in filing his initial Form 3 upon appointment to the Board in March 2020.
Householding of Proxy Materials or paper copies
We have adopted a procedure called “householding”, which the SEC has approved. Under this procedure, we are delivering a single copy of proxy materials, the Company’s proxy materials, includingNotice and, if requested, this Proxy Statement and our Annual Report are available for you to review online. To request a paper copy of proxy materials, please call 1‑800‑579‑1639, or you may request a paper copy by email at sendmaterial@proxyvote.com, or by logging onto www.proxyvote.com.
Stockholder Proposals and Nomination of Directors at the 20172021 Annual Meeting of Stockholders
If a stockholder intends to present any proposal for inclusion in the Company’s proxy statement in accordance with Rule 14a‑814a-8 under the Exchange Act (“Rule 14a‑8”14a-8”), it must be received at our principal executive offices no later than December 3, 2016.31, 2020. This notice must be in writing, must include any additional information and materials required by our bylaws, and must comply with the other provisions of Rule 14a‑8.
Under our Amended and Restated Bylaws, (“Bylaws”), nominations for director and any other business proposal may be made by a stockholder entitled to vote at the 20172021 Annual Meeting of Stockholders who delivers written notice, along with the additional information and materials required by our Bylaws, to our Corporate Secretary not later than 90 days nor earlier than 120 days prior to the first anniversary of this year’s annual meeting. As specified in the Bylaws, different notice deadlines apply in the case of a special meeting, when the date of an annual meeting is more than 30 days before or more than 70 days after the first anniversary of the prior year’s meeting, or when the first public announcement of the date of an annual meeting is less than 100 days prior to the date of such annual meeting. Accordingly, for our annual meeting in the year 2017,2021 Annual Meeting of Stockholders, we must receive this notice on or after JanuaryFebruary 17, 2017,2021, and on or before February 16, 2017.March 19, 2021. You may obtain a copy of our Bylaws by writing to our Corporate Secretary.Secretary at our principal executive offices. A matter submitted to us in accordance with our Bylaws may be presented at next year’s annual meeting, but we are not required to include any such matter in our proxy statement unless the submission also complies with Rule 14a‑8.14a-8. However, the persons named in the proxy for next year’s annual meeting will not have discretionary authority to vote with respect to the matter submitted unless we state in the proxy statement the nature of the matter and how the persons named in the proxy intend to vote with respect to the matter. Any matter which is not timely submitted to us in accordance with the requirements of our Bylaws may not be acted upon at the meeting.
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