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

Filed by the Registrant  ☒                              Filed by a Party other than the Registrant  ☐

Check the appropriate box:

INDEPENDENCE REALTY TRUST, INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

Payment of Filing Fee (Check the appropriate box):

INDEPENDENCE REALTY TRUST, INC.

Two Logan SquareLiberty Place

100 N. 18th St., 2350 S. 16^rdth FloorStreet, Suite 3575

Philadelphia, PA 1910319102

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held May 16, 201717, 2018

To the Stockholders of INDEPENDENCE REALTY TRUST, INC.:

Notice is hereby given that the annual meeting (the “Annual Meeting”) of stockholders of INDEPENDENCE REALTY TRUST, INC., a Maryland corporation (“IRT”), will be held at IRT’s offices at Two Logan Square, 100 N. 18th St., 23Liberty Place, 50 S. 16^rdth Street, Third Floor, Philadelphia, PA 19103,19102, on Tuesday,Thursday, May 16, 2017,17, 2018, at 9:00 A.M., Philadelphia time, for the following purposes:

1. To elect sixseven directors to serve until the next annual meeting of stockholders in 2018.2019.

2. To approve the selection of KPMG LLP as the independent registered public accounting firm for IRT for the fiscal year ending December 31, 2017.2018.

3. To approve, on an advisory basis, the compensation of the named executives, as disclosed in IRT’s Proxy Statement for the Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and the other related disclosure.

4. To transact such other business as may properly be brought before the Annual Meeting and any adjournment, postponement or continuation thereof.

Only stockholders of record on the books of IRT at the close of business on March 17, 201730, 2018 will be entitled to notice of and to vote at the Annual Meeting or any adjournments thereof. A list of stockholders entitled to vote at the Annual Meeting will be available for inspection at the Annual Meeting and at the offices of IRT given above. The stock transfer books will not be closed.

STOCKHOLDERS CAN HELP AVOID THE NECESSITY AND EXPENSE OF SENDING FOLLOW-UP LETTERS TO ASSURE A QUORUM BY PROMPTLY RETURNING THE ENCLOSED PROXY. THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE AND YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE ITS USE.We have elected to take advantage of Securities and Exchange Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe that the rules will allow us to provide our stockholders with the information they need, while lowering the costs of delivery and reducing the environmental impact of the Annual Meeting.

Please vote your proxy by telephone or the Internet as described in the instructions on the Notice. If you received paper copies of proxy materials, you can also sign, date and return the accompanying proxy in the enclosed envelope, which does not require postage if mailed in the United States. If your shares are held of record in a brokerage account, please follow the instructions you receive from your broker. 

April 4, 2017

2, 2018

Independence Realty Trust, Inc.

Proxy Statement

Table of Contents

INDEPENDENCE REALTY TRUST, INC.

Two Logan SquareLiberty Place

100 N. 18th St., 2350 S. 16^rdth FloorStreet, Suite 3575

Philadelphia, PA 1910319102

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

GENERAL

Introduction

The 20172018 annual meeting of stockholders of Independence Realty Trust, Inc., or the annual meeting, will be held on Tuesday,Thursday, May 16, 2017,17, 2018, at 9:00 A.M., Philadelphia time, at IRT’s offices at Two Logan Square, 100 N. 18th St., 23Liberty Place, 50 S. 16^rdth Street, Third Floor, Philadelphia, PA 19103,19102, for the purposes set forth in the accompanying notice. Only stockholders of record at the close of business on March 17, 201730, 2018 will be entitled to notice of and to vote at the annual meeting. Unless we have indicated otherwise, or the context otherwise requires, references in this proxy statement to “IRT,” “we,” “us,” and “our” or similar terms are to Independence Realty Trust, Inc. and its subsidiaries. If you wish to attend the annual meeting and vote in person, you may contact Investor Relations at (215) 207-2100(212) 277-4322 for directions.

This proxy statement is furnished in connection with the solicitation by the board of directors of IRT, or the board, of proxies from holders of shares of our common stock, par value $0.01 per share, or our common stock, to be used at the annual meeting, and at any and all adjournments thereof. Proxies in the accompanying form, properly executed and duly returned to IRT, and not revoked, will be voted at the annual meeting and any and all adjournments thereof.  

We will sendIn accordance with rules and regulations adopted by the Securities and Exchange Commission (the “SEC”), instead of mailing a printed copy of this proxy statement and the accompanying form of proxy to each stockholder of record, we are furnishing proxy materials, including this proxy statement, by providing access to such documents on the Internet. Stockholders will not receive printed copies of the proxy materials unless they request them. Instead, commencing on or about April 7, 20173, 2018, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be sent to our stockholders, of recordwhich will instruct you as to how to access and review the proxy materials on the Internet. If you would like to receive a paper or email copy of our common stock as of March 17, 2017.proxy materials, please follow the instructions for requesting such materials in the Notice.

Revocation of Proxy

If a proxy in the accompanying form is executed and returned, it may nevertheless be revoked at any time before its exercise by giving written notice of revocation to our secretary at the address given at the top of this page, by submitting a later dated proxy or by attending the annual meeting and voting in person.

Expenses and Manner of Solicitation

We will bear the cost of soliciting proxies. Our directors, officers and regular employees may solicit proxies either personally, by letter or by telephone. We will not specifically compensate our directors, officers or employees for soliciting proxies. We expect to reimburse banks, brokers, and other persons for their reasonable out-of-pocket expenses in handling proxy materials for beneficial owners of shares of our common stock.

VOTING AT THE ANNUAL MEETING

At the annual meeting, only those holders of shares of our common stock at the close of business on March 17, 2017,30, 2018, the record date, will be entitled to vote. As of the record date, 68,988,25286,974,597 shares of our common stock were outstanding. Each holder is entitled to one vote per share on each matter of business properly brought before the annual meeting. Stockholders do not have cumulative voting rights. IRT has an authorized capitalization of 350,000,000 shares of stock, consisting of 300,000,000 shares of our common stock and 50,000,000 shares of preferred stock, par value $0.01 per share. As of March 17, 2017, 2,869,04930, 2018, 899,215 common units, or IROP OP units, of IRT’s operating partnership, Independence Realty Operating Partnership, LP, or IROP, were outstanding and held by entities and persons unaffiliated with IRT. These IROP OP units are subject to exchange agreements containing the terms and conditions under which they could be exchanged for cash in an amount equal to the value of an equivalent number of shares of our common stock as of the date IROP receives contributor’s notice of its desire to exchange or, at IROP’s option, for the equivalent number of shares of our common stock. Holders of IROP OP units are not entitled to vote at the annual meeting and these exchange agreements do not confer any rights upon these holders as stockholders of IRT.

The presence at the annual meeting in person or by proxy of holders of outstanding shares of our common stock entitled to cast a majority of all the votes entitled to be cast at the annual meeting will constitute a quorum. The presence of a quorum for any

proposal establishes a quorum for all of the proposals, even if holders of outstanding shares of our common stock entitled to cast a majority of all the votes entitled to be cast at the annual meeting do not vote on all of the proposals.  For instructions on voting, please refer to the instructions on the Notice of Internet Availability of Proxy Materials you received in the mail or, if you received a hard copy of this proxy statement, on the enclosed proxy.

Shares of our common stock represented at the annual meeting in person or by proxy but not voted on one or more proposals will be included in determining the presence of a quorum for all of the proposals, but will not be considered cast on any proposal on which they were not voted. A failure by brokers to vote in person or by proxy shares of our common stock held by them in nominee name will mean that such shares of our common stock will not be counted for the purposes of establishing a quorum and will not be voted.

We refer to the situation where a broker does not receive voting instructions from the beneficial owner of shares of our common stock on a particular matter and indicates on the proxy delivered with respect to such shares of our common stock that it does not have discretionary authority to vote on that matter as a broker “non-vote.” For broker non-votes, those shares of our common stock will be considered as present for the purpose of determining whether a quorum exists, but will not be considered cast on any proposal on which they were not voted. With respect to abstentions, those shares of our common stock will be considered as present for the purpose of determining whether a quorum exists, but, under Maryland law, are not considered to be votes cast on a proposal.

Brokers that are member firms of the NYSE MKT and who hold shares of our common stock in street name for customers generally may vote their customers’ shares on proposals considered to be “routine” matters under the NYSE MKT rules and may not vote their customers’ shares on proposals that are not considered to be “routine” matters under the NYSE MKT rules if the customers have not furnished voting instructions within a specified period of time prior to the annual meeting. Proposal One and Proposal Three described below areis not considered to be “routine” matters under the NYSE MKT rules. Proposal Two described below is considered a “routine” matter under the NYSE MKT rules.

Proposal 1. In order to be elected as a director as described in Proposal 1 below, a nominee must receive a plurality of all the votes cast at the annual meeting at which a quorum is present, which means that the nominees with the most votes are elected.

Proposal 2. The affirmative vote of the holders of at least a majority of the votes cast at the annual meeting at which a quorum is present is required to approve the selection of KPMG LLP, or KPMG, as our independent registered public accounting firm as described in our discussion of Proposal 2 below.  

Proposal 3. The affirmative vote of the holders of at least a majority of the votes cast at the annual meeting at which a quorum is present is required to approve the compensation of our named executives as described in Proposal 3 below. Because the vote is advisory, it will not be binding on the board or IRT.

Proposal 4.For any other matter which may properly come before the annual meeting as described in our discussion of Proposal 43 below, the affirmative vote of the holders of at least a majority of the votes cast at the annual meeting at which a quorum is present is required, either in person or by proxy, for approval, unless otherwise required by law.

Any proxy not specifying to the contrary, and not designated as a broker non-vote, will be voted FOR:

Should any matters not described above be properly presented at the meeting, the persons named in the proxy will vote in accordance with their judgment. The proxy authorizes these persons, in their discretion, to vote upon such matters as may properly be brought before the meeting or any adjournment, postponement or continuation thereof.

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PROPOSAL 1. ELECTION OF DIRECTORS

Directors

Our by-laws provide that the number of directors shall be fixed by resolution of the board, provided that there shall never be less than the minimum number required by Maryland law, nor more than 15. The board has fixed the number of directors at six.seven. All directors are elected for a term of one year or until their successors are elected and qualified. The board, upon the recommendation of its nominating and governance committee, or the nominating committee, has nominated Scott F. Schaeffer, William C. Dunkelberg, Ph.D., Robert F. McCadden,Richard D. Gebert, Melinda H. McClure, Mack D. Pridgen III, Richard H. Ross, and DeForest B. Soaries, Jr., D.Min. for election at the annual meeting for a term to expire at the 20182019 annual meeting or until their successors are elected or appointed.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR EACH OF THE NOMINEES NAMED IN PROPOSAL 1.

It is the intention of the persons named in the enclosed proxy, in the absence of a contrary direction, to vote for the election of all of the nominees named in Proposal 1. Should any of the nominees become unable or refuse to accept nomination or election as a director, the persons named as proxies intend to vote for the election of such other person as the nominating committee may recommend. The board knows of no reason why any of the nominees might be unable or refuse to accept nomination or election.

Information is set forth below regarding the principal occupation of each nominee.

Names of Directors, Principal Occupations and Other Information

Scott F. Schaeffer, age 54,55, has served as the chairman of our board since January 2011, as our chief executive officer since February 2013 and as our president from February 2013 to August 2014. He also served as the chief executive officer of RAIT Financial Trust, or RAIT, a real estate investment trust, from February 2009 to December 2016 and as its chairman from December 2010 to October 2016, its president from February 20082016.  Prior to January 2014, itshis position as the chief operatingexecutive officer from February 2008 to February 2009, its co-president and co-chief operating officer from December 2006 to February 2008 and its president and chief operating officerof RAIT, Mr. Schaeffer held various other executive positions at RAIT from September 2000 to December 2006. As described below and in our annual report on Form 10-K for the year ended December 31, 2016, or the annual report,2000.  Mr. Schaeffer resigned from RAIT when IRT completed transactions to internalize our management and separate from RAIT in December 2016, and Mr. Schaeffer resigned from RAIT in connection with our management internalization.  Wewhich we refer to these transactions as our management internalization.  Mr. Schaeffer served as the vice chairman of the board of directors of Resource America, Inc. (NASDAQ: REXI), a specialty finance company, from 1998 to 2000, and as a director until October 2002.  In addition to his roles on the executive vice presidentboard of Resource America from 1997 to 1998, and adirectors, Mr. Schaeffer served in several senior vice president ofmanagement positions at Resource America from 1995 to 1997.1998.  Mr. Schaeffer also served as president of Resource Properties, Inc., a wholly owned real estate subsidiary of Resource America, from 1992 to 2000. Mr. Schaeffer served as a director of Resource America until October 2002. Mr. Schaeffer holds a Bachelor of Science in Commerce from Rider University in Lawrenceville, New Jersey. Mr. Schaeffer was selected to serve on our board primarily because of his substantial involvement in the acquisition and financing of apartment properties over his career in real estate. In addition, in the period prior to our management internalization, as the chief executive officer of RAIT, he was uniquely capable of committing our advisor’s resources to help us identify, acquire and finance investments in apartment properties.

William C. Dunkelberg, Ph.D., age 74,75, has served as one of our independent directors since February 2011. Dr. Dunkelberg has served as the chairman of the board of directors since July 2005 and member of the audit committee since 2003 of Liberty Bell Bank, a publicly-traded commercial bank chartered in New Jersey. Dr. Dunkelberg serves as a Professor Emeritus in the College of Liberal Arts at Temple University in Philadelphia, Pennsylvania after having served as Professor of Economics from 1987 to his retirement in 2012 and as Dean of the School of Business and Management from 1987 to 1994. He has served as chief economist for the National Federation of Independent Business, a nonprofit industry association representing small and independent businesses, since 1973. Dr. Dunkelberg was a consultant to the National Federation of Independent Business from 1970 until he accepted the position as chief economist. He has served as Economic Strategist for Boenning & Scattergood, an independent investment banking firm, from April 2009 to June 2016. He co-founded Wireless Energy Solutions, a private company, in July 2009, and continues to serve on its board of directors. He previously served as a member of the board of directors of NCO Group, Inc., a public provider of business process outsourcing solutions, from 2000 until the company was sold in November 2006. Dr. Dunkelberg holds a Bachelor of Arts, a Master of Economics and a Doctor of Philosophy in Economics, each from the University of Michigan in Ann Arbor. Dr. Dunkelberg was selected to serve on our board of directors, or the board, primarily because of his expertise in economics and banking and his experience as a director of both public and private companies.

Robert F. McCadden,Richard D. Gebert, age 59,60, has served as one of our independent directors since February 2011. Mr. McCaddenOctober 2017.  He has served as executive vice presidenta board and chief financial officeraudit committee member of Pennsylvania Real Estate Investment Trust,The Association of Corporate Growth (ACG Global), a publicly-traded REIT (NYSE: PEI),membership organization focused on middle market growth since 2004. HeSeptember 1, 2016.  Prior to that from 1995 to July 2016, he was aan audit partner of KPMG LLP, or KPMG, a national accounting firm, from 2002 to 2004. Before joining KPMG, Mr. McCadden joined Arthur AndersenGrant Thornton LLP, a national accounting firm, in 1979 and becamefirm.  In addition to serving as an audit partner in 1993. He continued as a partner of Arthur Andersenwith Grant Thornton LLP, until he joined KPMG in 2002. He currently serves as a trustee onMr. Gebert held the board of trustees, or the UHT

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board, of Universal Health Realty Income Trust (NYSE: UHT), or UHT, a publicly held REIT, and serves as afollowing additional roles at Grant Thornton LLP: (i) member of the audit committeeSenior Leadership Team from August 2013 to July 2016, (ii) East Region Managing Partner from 2011 to July 2016, (iii) Managing Partner of Philadelphia Office from 1999 to 2011, and (iv) member of the UHT board.Partnership Board from 2003 to 2011.  Before joining Grant Thornton LLP, he was employed at AG Epstein Co from 1979 to 1995, a local accounting firm that eventually merged into Grant Thornton LLP.  Mr. Gebert became a partner at AG Epstein Co in 1987.  He

is a member of the American Institute of Certified Public Accountants (AICPA), the Pennsylvania Institute of Certified Public Accountants (PICPA), the National Association of Real Estate Investment Trusts (NAREIT), the International Council of Shopping Centers (ICSC) and the NYSE Listed Company Advisory Board.Georgia Society of Certified Public Accountants.  Mr. McCaddenGebert is a Certified Public Accountantcertified public accountant, and he holds a Bachelor of Business Administration from Temple University.  Mr. McCaddenGebert was selected to serve on our board because of his deep expertise in accounting and financial expertiseservices.

Melinda H. McClure, age 50, has served as one of our independent directors since June 2017.  She served from 2006 to 2018 as the principal shareholder of Democracy Funding LLC, a registered broker-dealer and its affiliates focused on providing capital markets and advisory services to government agencies including the United States Department of Treasury and the Federal Deposit Insurance Corporation as well as to private sector financial services and real estate companies. Ms. McClure served as Senior Advisor of Freedom Capital Investment Management, an alternative asset investment manager from 2013 to 2016.  Ms. McClure served on the board of directors of the Bank of Georgetown, a privately held community bank headquartered in Washington, D.C. from its inception in 2005 to its sale to United Bank in 2016.  While a director of the Bank of Georgetown she served as the chairman of the strategic planning committee, and as a member of the compensation committee.  Ms. McClure served in numerous positions at FBR & Co, an investment bank, from 1991 to 2006 including, as senior managing director of investment banking where she focused on providing capital markets and advisory services to middle market financial services and real estate companies.  She earned her Bachelor of Arts Degree from the University of Richmond.  Ms. McClure was selected to serve on our board because of her extensive leadership experience with public REITs.in the asset management, financial services, and real estate industries.

Mack D. Pridgen III, age 67,68, has served as one of our independent directors since September 2015 when he joined the board upon the consummation of our acquisition, or the TSRE acquisition, of Trade Street Residential, Inc., or TSRE, in accordance with the merger agreement relating to the TSRE acquisition. From June 2012 to September 2015, Mr. Pridgen served as a director of TSRE, including service as chairman of the board and the audit committee and as a member of the nominating and corporate governance committee. From October 2007 until February 2015, Mr. Pridgen served on the board of directors of AmREIT, a shopping center REIT, serving as audit committee chair and a member of the executive committee and the pricing committee. From 1997 until March 2007, Mr. Pridgen served as General Counsel, Vice President and Secretary of Highwoods Properties, Inc. (NYSE:HIW), a commercial REIT that owns and operates primarily suburban office properties, as well as industrial, retail and residential properties. Prior to joining Highwoods Properties, Inc., Mr. Pridgen was a partner with the law firm of Smith, Helms, Mulliss and Moore, LLP, with a specialized focus on the tax, corporate and REIT practices. Mr. Pridgen also served as a tax consultant for Arthur Andersen & Co. for 15 years. Mr. Pridgen received his Bachelor of Business Administration and Accounting degree from the University of North Carolina at Chapel Hill and his law degree from the University of California at Los Angeles School of Law. Mr. Pridgen was selected to serve on our board because of his legal and accounting financial expertise and experience with TSRE and other public REITs. Mr. Pridgen’s knowledge and experience in the area of accounting and tax, with a focus on REITs and his experience as a former executive with a publicly-traded REIT, as well as his familiarity with TSRE’s portfolio and the multi-family business more generally, contribute to the mix of qualifications and experience the board seeks to maintain.

Richard H. Ross, age 58,59, has served as one of our directors since September 2015 when he joined the board upon the consummation of the TSRE acquisition in accordance with the merger agreement relating to the TSRE acquisition. Since February 2016, Mr. Ross has served as executive vice president and chief financial officer of Branch Properties, LLC, or Branch, a private real estate investment firm focused primarily on high-quality, grocery-anchored neighborhood and community shopping centers located in the southeastern United States. Prior to that, Mr. Ross served as chief executive officer and president of TSRE from February 2014 to September 2015. Prior to that, Mr. Ross served as chief financial officer of TSRE since August 2013, having previously served as a financial consultant to TSRE from February 2013 to August 2013. In March 2011, Mr. Ross founded Chiron Consulting, LLC, an independent financial and operations consultancy, where he worked until becoming TSRE’s chief financial officer. From April 1998 to December 2010, Mr. Ross served as the chief financial officer for Branch. From April 1997 to April 1998, Mr. Ross served as the chief financial officer of Gearon Communications, a developer of wireless and telecommunications networks in the U.S. From November 2014 to February 2016, Mr. Ross was a director of Plymouth Industrial REIT, Inc., a real estate investment trust focused on industrial properties. Mr. Ross is a Certified Public Accountant in the states of Florida and Georgia. Mr. Ross was selected to serve on our board because of his accounting and financial expertise and experience with public REITs and his familiarity with TSRE’s portfolio and the multi-family business more generally.

DeForest B. Soaries, Jr., D.Min., age 65,66, has served as one of our independent directors since February 2011. Dr. Soaries has served as a director for the Federal Home Loan Bank of New York since January 2009, a position which he previously held from February to December 2003. In this capacity, he served on the affordable housing committee that reviews and approves housing development projects for government funding. Since 1990, he has served as the Senior Pastor of the First Baptist Church of Lincoln Gardens in Somerset, New Jersey, where he currently leads a congregation of 7,000 members. Since January 2015, he has served as a director on the board of directors, or the Ocwen board, of Ocwen Financial Corporation (NYSE: OCN), a publicly traded financial services holding company engaged in the servicing and origination of mortgage loans, and serves as a member of the audit committee of the Ocwen board. From 2004 to 2005, he served as the first chairman of the U.S. Election Assistance Commission (EAC), appointed by former President George W. Bush and confirmed by the U.S. Senate. From 1999 to 2002, Dr. Soaries served as Secretary of State of New Jersey. In this capacity, he served for three years on the Governor’s Urban Coordinating Council that guided state

policy on real estate development, most of which was apartment real estate development. Dr. Soaries was a professor at the Drew University Theological School in Madison, New Jersey from 1997 to 1999, Kean University in Union, New Jersey from 1993 to 1994 and Princeton Theological Seminary in Princeton, New Jersey from 1992 to 1993 and an assistant professor at Mercer County Community College in Trenton, New Jersey from 1989 to 1991. He has led the development, ownership, conversion and management of several apartment projects as a community development executive and is currently developing a mixed-use property with approximately 80 senior housing units. Dr. Soaries holds a Bachelor of Arts in Urban and Religious Studies from Fordham University in Bronx, New York, a Master of Divinity from Princeton and a Doctor of Ministry from United Theological Seminary in Dayton, Ohio. Dr. Soaries was selected to serve on our board primarily because of his diverse background in banking, community development, apartment properties, government and as a director of the Federal Home Loan Bank of New York.  

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Information Concerning Our Board of Directors, Committees and Governance

Corporate Governance Profile

Our shares of common stock are listed on the NYSE MKT under the symbol “IRT” and we are subject to the NYSE MKT’sNYSE’s listing standards. We have adopted corporate governance guidelines and charters for the audit, compensation and nominating committees of the board intended to satisfy NYSE MKT listing standards. We have also adopted a code of ethics, or the code of ethics, for our directors, officers and employees intended to satisfy NYSE MKT listing standards and the definition of a “code of ethics” set forth in applicable Securities and Exchange Commission, or SEC, rules. Our corporate governance guidelines, code of ethics and these charters are available on our website at www.irtliving.com.

We operate under the direction of our board of directors. Our board is responsible for the overall management and control of our affairs.  Until December 20, 2016, we were externally managed and advised by Independence Realty Advisors, LLC, or IRA, which was a wholly owned subsidiary of RAIT.  On December 20, 2016, we completed our management internalization and became an internally managed company by acquiring IRA and defined assets and liabilities of our property manager, RAIT Residential, which was also a wholly owned subsidiary of RAIT.  Prior to the completion of our management internalization, our board had delegated authority to make investments within certain parameters to IRA and our board’s prior approval for investments outside those parameters was required.   As a result of our management internalization, all of our executive officers and property managers have become employed by IRT.  Our board of directors reviews all investment decisions involving the acquisitions of properties at least quarterly with management. In connection with negotiations between us and RAIT regarding our management internalization, our board formed a special committee, or the special committee, comprised of three independent directors Mr. McCadden, as chairman, Dr. Dunkelberg and Mr. Pridgen, to represent IRT’s interests.  For a description of our management internalization and our previous management structure, see “Management” below.

We currently have sixseven directors, fourfive of whom are independent directors under standards established by the SEC and the NYSE MKT.NYSE. Our independent directors are Dr. Dunkelberg, Mr. McCadden,Gebert, Ms. McClure, Mr. Pridgen and Dr. Soaries. Directors are elected annually by our stockholders, and there is no limit on the number of times a director may be elected to office. Each director serves until the next annual meeting of stockholders or (if longer) until his or her successor is duly elected and qualifies.

The board has no policy in principle with respect to the separation of the offices of chairman and the chief executive officer. Since February 2013, Mr. Schaeffer has served as both chairman and chief executive officer. From January 2011 to February 2013, the offices were separated with Mr. Schaeffer serving as chairman. In the periods when the positions of chairman and chief executive officer have been held by the same person, including the current time, no lead independent director has been designated. The board believes that our corporate governance guidelines provide it with appropriate flexibility to determine from time to time the leadership structure for IRT that best enables it to pursue its business strategies and goals. The board considered Mr. Schaeffer’s significant experience in the industry, with IRT and with RAIT as part of its rationale for deciding to combine the roles. The board believes that its current leadership structure is appropriate at this time because it enhances Mr. Schaeffer’s ability to provide strong and consistent leadership and a unified voice for IRT and because the board believes its governance processes, as reflected in our corporate governance guidelines and board committee charters, preserve board independence by ensuring independent discussion among directors and independent evaluation of, and communication with, members of senior management.

We have structured our corporate governance in a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance structure include the following:

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The board held a total of 1113 meetings during 2016.2017. The board currently has a standing audit committee, compensation committee and nominating committee. The current directors who serve on these committees, the current chairman of these committees and the number of meetings these committees held during 20162017 are set forth in the chart below and any changes in the board, each committee’s chairman and membership since the beginning of 20162017 are described in the footnotes to the chart below:

Our corporate governance guidelines provide that directors are invited and encouraged to attend our annual meeting of stockholders. All seven of our directors serving at the time, except for Mr. Pridgen, attended our 20162017 annual meeting of stockholders.

Our corporate governance guidelines provide that the independent directors will meet in executive session on a regularly scheduled basis, but not less frequently than quarterly. Our corporate governance guidelines provide that the director who presides at these meetings of the independent directors will be rotated each meeting among the chairs of the audit committee, compensation committee and nominating committee, in the following order: audit committee chairman, compensation committee chairman and nominating committee chairman. Our corporate governance guidelines provide that any interested parties desiring to communicate with the independent directors regarding IRT may directly contact such directors by delivering correspondence in care of IRT’s secretary at the address of our principal executive office on the cover page hereof. Stockholders may send communications to the board by sending them to IRT’s secretary as well. The secretary will forward these communications to the chairman of the audit committee, who will distribute them to the board members to whom the communications are addressed.

Board Role in Risk Oversight

The board’s role is to oversee IRT’s risk management process. The board oversees risk through: (i) review and discussion of regular periodic reports to the board and its committees, including management reports and studies on existing market conditions,

leasing activity and property operating data, as well as actual and projected financial results, and various other matters relating to our business; (ii) required approval by the audit committee of all related party transactions; (iii) review and discussion of drafts of IRT’s periodic reports to the SEC; and (iv) regular periodic reports from our independent public accounting firm and other outside consultants, if necessary, regarding various areas of potential risk, including, among others, those relating to the qualification of IRT as a REIT for U.S. federal income tax purposes and our internal controls over disclosure and financial reporting.

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The audit committee enhances the board’s oversight of risk management. The audit committee’s role is also one of oversight, recognizing that management is responsible for executing IRT’s risk management practices. The audit committee’s responsibilities include discussing with management, the independent auditor and the internal auditor practices with respect to risk assessment and risk management, including significant financial risk exposures and the steps management has taken to monitor, control and report such exposures.

The compensation committee also enhances the board’s oversight of risk management by considering the impact of IRT’s compensation plans, and the incentives created by IRT’s compensation plans, on IRT’s risk profile.

Board Committees

We currently have a standing audit committee, compensation committee and nominating committee. All of our standing committees consist solely of independent directors, the principal functions of which are briefly described below. Our board of directors may from time to time establish other committees to facilitate our management.

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Audit Committee

Our board has established an audit committee consisting of three of our independent directors.  See “Information Concerning Our Board of Directors, Committees and Governance-Corporate Governance Profile” above for a description of the membership of the audit committee since January 1, 2016.2017.  Mr. McCaddenGebert is the audit committee chairman and an audit committee financial expert, as defined by applicable rules promulgated by the SEC and the NYSE MKT corporate governance listing standards. Our audit committee operates pursuant to a written charter adopted by our board. The principal functions of the audit committee are oversight related to:

The audit committee is also responsible for engaging an independent registered public accounting firm, reviewing with the independent registered public accounting firm the plans and results of the audit engagement, approving professional services provided by the independent registered public accounting firm, including all audit and non-audit services, reviewing the independence of the independent registered public accounting firm, considering the range of audit and non-audit fees and reviewing the adequacy of our internal accounting controls. The audit committee also prepares the audit committee report required by SEC regulations to be included in our annual proxy statement. The audit committee has adopted the audit and non-audit services pre-approval guidelines attached as Appendix Ato this proxy statement.govern its activities.

Our board has delegated oversight of compliance with our code of ethics to our audit committee, including the review of related party transactions and the granting of waivers to the code of ethics. If the audit committee grants any waivers to the code of ethics for any of our executive officers and directors, we will promptly disclose such waivers as required by law or NYSE MKT regulations.

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Audit Committee Report

In connection with the preparation and filing of Independence Realty Trust, Inc.’s, or IRT, annual report on Form 10-K for the year ended December 31, 2016,2017, or the annual report:

The audit committee has provided this report. This report shall not be deemed incorporated by reference by any general statement incorporating this proxy statement into any filing under the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, except to the extent IRT specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act.

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Compensation Committee

Our board of directors has established a compensation committee consisting of three of our independent directors. See “Information Concerning Our Board of Directors, Committees and Governance-Corporate Governance Profile” above for a description of the membership of the compensation committee since January 1, 2016.2017.  Dr. Soaries is the compensation committee chairman. Our compensation committee operates pursuant to a written charter adopted by our board. The principal functions of the compensation committee include:

Mr. Schaeffer, our chairman and chief executive officer, provides input and recommendations to the compensation committee for the compensation paid to each of our named executives and other officers and employees and, prior to the management internalization, persons affiliated with our advisor.employees. The compensation committee considers these recommendations when making compensation decisions, including awards under the LTIP. Consistent with its charter, the compensation committee has delegated to its chairman the compensation committee’s authority to make the awards under the LTIP within defined parameters, including setting a limit on the aggregate number of shares subject to the awards and requiring that LTIP participants who receive awards cannot be (a) executive officers of IRT, (b) persons subject to Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act with respect to IRT or (c) “covered employees” as defined in Section 162(m)(3) of the Internal Revenue Code of 1986, as amended, or the IRC, with respect to IRT.  The compensation committee may delegate similar authority to its chairman in the future.  The compensation committee retains its authority and makes all awards under the LTIP outside these parameters, such as any awards to the named executives.

Under its charter, the compensation committee has authority to retain compensation consultants, outside counsel, and other advisors that the committee deems appropriate, in its sole discretion, to assist it in discharging its duties, and to approve the terms of retention and fees to be paid to such consultants. In February 2016, the compensation committee selected FPL Associates L.P., or FPL, to serve as the compensation committee’s independent compensation consultant going forward. FPL consultants have been engaged by RAIT’sThe compensation committee since December 2014. The compensation committeehas assessed the independence of FPL pursuant to the rules prescribed by the SEC and the NYSE MKT and concluded that no conflict of interest existed in 20162017 that would prevent FPL from serving as an independent consultant to the compensation committee. During 2016,2017, the compensation committee engaged the law firm of Duane Morris LLP, or Duane Morris, to advise it regarding awards to be made under the LTIP. Duane Morris attorneys are also engaged by RAIT to represent RAIT. The compensation committee has reviewed these engagements using the factors set forth in NYSE MKT standards for compensation committee consultants mandated by the Dodd-Frank Act. The compensation committee considers the attorneys at Duane Morris who represent the compensation committee to be independent from our management and independent under these standards.

Nominating Committee

Our board has established a nominating committee consisting of three of our independent directors. See “Information Concerning Our Board of Directors, Committees and Governance-Corporate Governance Profile” above for a description of the membership of the nominating committee since January 1, 2016.2017.  Dr. Dunkelberg is the nominating committee chairman. Our nominating committee operates pursuant to a written charter adopted by our board. The principal functions of the nominating committee include:

The nominating committee uses a variety of methods for identifying and evaluating nominees for director. In recommending director nominees to the board, the nominating committee solicits candidate recommendations from its own members, other directors and management. It also may engage the services and pay the fees of a professional search firm to assist it in identifying potential director nominees. The nominating committee assesses the appropriate size of the board and whether any vacancies on the board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the nominating committee considers whether to fill those vacancies and, if applicable, considers various potential director candidates. These candidates are evaluated at regular or special meetings of the nominating committee, and may be considered at any point during the year. The nominating committee seeks to make its recommendations for director nominees for each annual meeting to the board by the end of the first quarter each year.

The nominating committee has not adopted specific, minimum qualifications or specific qualities or skills that must be met by a nominating committee-recommended nominee. The nominating committee seeks to ensure that the membership of the board and each committee of the board satisfies all relevant listing standard requirements of the NYSE MKT and applicable laws and regulations and all requirements of our governance documents, as well as to provide directors who have a mixture of skills relevant to our business. The nature of the specific qualifications, qualities, experience or skills (including international versus domestic background, diversity, age, and legal and regulatory requirements) that the nominating committee may look for in any particular director nominee depends on the qualifications, qualities, experience and skills of the rest of the directors at the time of any vacancy on the board. The nominating committee does not have a formal policy regarding the consideration of diversity in identifying director nominees beyond being committed to ensuring that no person would be excluded from consideration for service as a director of IRT as a result of their sex, race, religion, creed, sexual orientation or disability.

The nominating committee will consider candidates for nomination as a director recommended by stockholders, directors, officers, third party search firms and other sources. In evaluating candidates, the nominating committee considers the attributes of the candidate and the needs of the board, and will review all candidates in the same manner, regardless of the source of the recommendation. The nominating committee will consider individuals recommended by stockholders for nomination as a director in accordance with the procedures described under “Stockholder Proposals and Nominations.”

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PROPOSAL 2. APPROVAL OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Approval of KPMG

We are asking our stockholders to approve the selection of KPMG as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2017.2018. Although approval is not required by our bylaws or otherwise, the board is submitting the selection of KPMG to our stockholders for approval as a matter of good corporate practice. The audit committee has not yet engaged an independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2017.2018. If KPMG is not approved, the audit committee will consider whether it is appropriate to select another independent registered public accounting firm. Even if KPMG is approved, the audit committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of IRT and our stockholders.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE SELECTION OF KPMG TO AUDIT THE FINANCIAL STATEMENTS OF IRT FOR THE FISCAL YEAR ENDING DECEMBER 31, 2017.2018.

We expect that representatives of KPMG will be present at the annual meeting. These representatives will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

Audit Fees

The following table presents the aggregate fees billed by KPMG for each of the services listed below for each of our last two fiscal years.

Exchange Act rules generally require any engagement by a public company of an accountant to provide audit or non-audit services to be pre-approved by the audit committee of that public company. This pre-approval requirement is waived with respect to the provision of services other than audit, review or attest services if certain conditions set forth in Rule 2-01(c)(7)(i)(C) under the Exchange Act are met. All of the audit and audit- related services described above were pre-approved by the audit committee and, as a consequence, such services were not provided pursuant to a waiver of the pre-approval requirement set forth in this Rule.  The audit committee has adopted the audit and non-audit services pre-approval guidelines attached as Appendix A to this proxy statement.

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PROPOSAL 3. ADVISORY VOTE ON EXECUTIVE COMPENSATION

We are providing our stockholders an opportunity to indicate whether they support the compensation of our named executives, Mr. Schaeffer, Mr. Sebra and Mr. Ender, as described in this proxy statement. This advisory vote, commonly referred to as “say on pay,” is not intended to address any specific item of compensation, but instead relates to the Compensation Discussion and Analysis, the tabular disclosures regarding the compensation of our named executives (as set forth above), and the narrative disclosure accompanying the tabular presentation. We believe these disclosures allow stockholders to view the trends in our executive compensation program and the application of our compensation philosophies for the year presented.

As discussed in the Compensation Discussion and Analysis below, our named executives were employees of RAIT prior to their respective resignations from RAIT in connection with our management internalization and only received equity awards and did not receive cash compensation from us for serving as our named executives prior to such resignations.  Mr. Schaeffer, our chief executive officer, and Mr. Ender, our president, resigned from RAIT and became IRT employees on the completion of our management internalization on December 20, 2016 and Mr. Sebra, our chief financial officer, resigned from RAIT and became an IRT employee on March 31, 2017.  Our board and compensation committee felt that maintaining the continuity of our executive team would be a critical factor in the successful implementation of our management internalization.  As a result, our compensation committee considered the appropriate elements of executive officer compensation and benefits to offer to our executive team in planning for our management internalization and negotiated the terms of employment agreements with each of our named executives.  Upon the completion of our management internalization, we entered into employment agreements with each of Messrs. Schaeffer, Sebra and Ender providing for these elements.  We refer to these employment agreements as the NEO employment agreements.  Given that the completion of the management internalization occurred on December 20, 2016, we agreed to have RAIT continue to pay Mr. Schaeffer’s and Mr. Ender’s salaries through December 31, 2016 and for RAIT to pay Mr. Ender a bonus for his services to IRT in 2016 and we reimbursed RAIT for the amounts paid.  In addition, we paid amounts to RAIT under the shared services agreement for services that included Mr. Sebra’s service as our chief financial officer.

Through February 2017, our compensation committee worked with its compensation consultant, FPL, to establish an appropriate peer group for IRT and to develop executive compensation plans appropriate for IRT after our management internalization.  Effective February 28, 2017, our compensation committee approved awards under the LTIP for our named executives comprised of cash bonus awards and equity awards.  The compensation committee structured these cash bonus awards to link the majority of our named executives’ 2017 annual bonuses to defined objectives and formulaic metrics that the compensation committee believes are important drivers in the creation of shareholder value, while also rewarding more subjective elements of each named executive’s performance through a subjective component.  The equity awards were comprised of two components.  The first component was performance share units, or PSUs, the value of which will be based on the attainment of absolute and relative total shareholder return, or TSR, hurdles over a three-year period, which include both share price appreciation and reinvestment of common stock dividends, as well as a subjective evaluation of the achievement of strategic objectives.  The second component was time-based restricted stock awards.  These cash awards and equity awards are described below in “Compensation Discussion and Analysis.”  

We believe we have structured the compensation of our named executives through their employment agreements, 2017 cash and equity awards and related compensation in a manner intended to maintain management continuity and establish appropriate incentives to build shareholder value over time as IRT transitions to an internally managed REIT.  Accordingly, we ask our stockholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that IRT’s stockholders approve, on an advisory basis, the compensation of the named executives, as disclosed in IRT’s Proxy Statement for the 2017 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis and the other related disclosure.”

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVES, AS DISCLOSED IN THIS PROXY STATEMENT.

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PROPOSAL 4. OTHER MATTERS

As of the date of this proxy statement, the board does not intend to present and has not been informed that any other person intends to present any other matters for action at the annual meeting. However, if other matters do properly come before the annual meeting or any adjournment, postponement or continuation thereof, it is the intention of the persons named as proxies to vote upon them in accordance with their best judgment. For any other matter which may properly come before the annual meeting, the affirmative vote of the holders of at least a majority of the votes cast at the annual meeting at which a quorum is present is required, either in person or by proxy, for approval, unless otherwise required by law.

Except as set forth in this section, all shares of our common stock represented by valid proxies received will be voted in accordance with the provisions of the proxy.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number and percentage owned by each person who, to the knowledge of IRT as of March 17, 2017,15, 2018, is the beneficial owner of more than 5% of the outstanding shares of our common stock. This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Shares of our common stock issuable pursuant to warrants or convertible notes are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated in footnotes to the table, each person listed has sole voting and dispositive power with respect to the securities owned by such person.

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The following tables set forth the number and percentage owned as of March 17, 201715, 2018 by each of our present directors, each of our present named executives, as defined in “Executive Officer Compensation” below, and all of our present executive officers (whether or not deemed to be named executives) and directors as a group of our shares of common stock. This information is reported in accordance with the beneficial ownership rules of the SEC under which a person is deemed to be the beneficial owner of a security if that person has or shares voting power or investment power with respect to such security or has the right to acquire such ownership within 60 days. Shares of our common stock issuable pursuant to vested options, warrants or share appreciation rights, or SARs, are deemed to be outstanding for purposes of computing the percentage ownership of the person or group holding such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person. Unless otherwise indicated in footnotes to the table, each person listed has sole voting and dispositive power with respect to the securities owned by such person.

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OUR MANAGEMENT

We engaged in a transformational series of transactions in 2016 to internalize our management and separate from RAIT.  Our management internalization is described below under “Our Management Internalization” and our prior external management structure which we had until December 2016 is described below under “Our Externalized Management Structure Prior to Our Management Internalization.”

Our Management Internalization

On September 27, 2016, we entered into an agreement, or the internalization agreement, with RAIT to complete our management internalization and separation from RAIT and its affiliates and to repurchase 7,269,719 shares of our common stock from RAIT subsidiaries, representing all of the shares of our common stock owned by RAIT. On October 5, 2016, we paid approximately $62.2 million to RAIT to repurchase, or the IRT stock repurchase, and retire RAIT’s shares of our common stock at a purchase price of $8.55 per share.  This price was equal to the price to the public in our common stock offering, less underwriting discounts or commissions, which closed on October 5, 2016 and funded the IRT stock repurchase.  On December 20, 2016, we completed the management internalization. The management internalization consisted of two parts: (i) the acquisition of our external advisor, Independence Realty Advisors, LLC, or IRA, which was a subsidiary of RAIT, and (ii) the acquisition of substantially all of the assets and the assumption of certain liabilities relating to RAIT Residential, the multifamily property management business of RAIT, including property management contracts relating to apartment properties owned by us, RAIT and third parties. The purchase price we paid RAIT for the Internalization was $43.0 million, subject to certain prorations at closing.  After the management internalization, we terminated our advisory agreement with the external advisor we had acquired.

Upon closing of the management internalization, each of Scott F. Schaeffer, our chairman of the board and chief executive officer, Farrell Ender, our president, and James J. Sebra, our chief financial officer and treasurer, entered into employment agreements with us. Messrs. Schaeffer and Ender became our employees upon closing.  Mr. Schaeffer resigned as RAIT’s chairman of the board and chief executive officer and Mr. Ender ceased to be employed by RAIT effective upon the closing of the management internalization on December 20, 2016.  Mr. Sebra resigned as the chief financial officer and treasurer of RAIT as of March 31, 2017.  Upon closing of the management internalization, we hired substantially all of the employees of the multifamily property management business we had acquired from RAIT and other RAIT personnel who had focused primarily on our business.

As noted above, we acquired the business of RAIT Residential in connection with our management internalization. RAIT Residential provided property management services for our properties prior to our management internalization.  We now operate that business in our wholly owned subsidiary, IRT Management, LLC, or IRT property manager.  IRT property manager is a full-service apartment property management company that, as of December 31, 2016, manages approximately 15,000 apartment units, including 12,982 units owned by us. IRT property manager provides services to us in connection with the rental, leasing, operation and management of our properties.  We expect to continue to provide property management services to RAIT properties that were managed by RAIT’s multifamily property management business.  We do not expect to otherwise expand our multifamily property management business to third parties.

At the closing of the management internalization, we and RAIT entered into a shared services agreement, or the shared services agreement, pursuant to which we and RAIT will provide each other certain transitional services such as information technology, human resources, insurance, investor relations, legal, tax and accounting for a six-month transition period after the closing ending June 20, 2017.  

We believe the management internalization and IRT stock repurchase is and will be transformative for IRT.  

By acquiring our external advisor:

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By acquiring RAIT’s multifamily property management business:

As a result of the IRT stock repurchase:

As a result of the management internalization, we expect to save approximately $2.5 million per year on general and administrative expenses while eliminating the increased management cost related to growth under the external management contract structure.

Our Externalized Management Structure Prior to Our Management Internalization

Prior to the completion of our management internalization on December 20, 2016, we were externally managed and advised by IRA, our advisor pursuant to an advisory agreement with us.  As described above, we acquired IRA in connection with our management internalization and terminated this advisory agreement.  Prior to our management internalization, our advisor’s operations were managed by a board of managers selected by RAIT. Mr. Schaeffer served as the chief executive officer and a manager of our advisor. Mr. Ender served as the president of our advisor. Mr. Sebra served as the treasurer and manager of our advisor.  

The advisory agreement required our advisor to provide us with all services necessary or appropriate to conduct our business.  The advisory agreement required IRA to manage our business and affairs in accordance with the policies and guidelines established by our board, and provided that the advisor was under the supervision of our board. The advisory agreement required IRA to obtain the prior approval of our board, in connection with any investment for which the portion of the consideration paid out of our equity equaled or exceeded $25,000,000, or any investment that was inconsistent with the publicly disclosed investment guidelines as in effect from time to time, or, if none were then publicly disclosed, as otherwise adopted by the board from time to time. For these purposes, “equity” meant our cash on hand, exclusive of the proceeds of any debt financing incurred or to be incurred in connection with the relevant investment.  Under the advisory agreement, IRA was required to refrain from any action that, in its sole judgment, or in the sole judgment of our board, made in good faith, would adversely affect our qualification as a REIT, unless the board had determined that REIT qualification is not in the best interests of us and our stockholders; would subject us to regulation under the Investment Company Act of 1940, as amended; was contrary to or inconsistent with our investment guidelines; or would violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over us or shares of our common stock, or otherwise not be permitted by our charter or bylaws.

As described above, prior to our management internalization, RAIT Residential provided us with property management services for our properties under the terms of management agreements entered into on a property-by-property basis in connection with the rental, leasing, operation and management of our properties.  As described above, we acquired the business of RAIT Residential in our management internalization and now provide these services internally through IRT property manager.  

For a description of the advisory fees paid to IRA and the property management fees paid to RAIT Residential, see “Certain Relationships and Related Party Transactions-Property Management Fees Paid to Our Property Manager” below.

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NON-DIRECTOR EXECUTIVE OFFICERS

Information is set forth below regarding the background of our executive officers who are not also directors. For our executive officer who is also a director, Scott F. Schaeffer, this information can be found above under “Proposal 1. Election of Directors—Names of Directors, Principal Occupations and Other Information.”

James J. Sebra, age 41,42, has served as our chief financial officer since May 2012 and our treasurer since January 2011. Mr. Sebra also served as the chief financial officer and treasurer of RAIT from May 2012 to March 2017 and as the senior vice president-finance and chief accounting officer of RAIT from May 2007 to May 2012. Mr. Sebra joined RAIT in connection with its acquisition of Taberna Realty Finance Trust, or Taberna, and served as Taberna’s vice president and chief accounting officer from June 2005 until its acquisition on December 11, 2006. Prior to joining Taberna, Mr. Sebra served as the controller of Brandywine Realty Trust, a publicly held REIT, from 2004 to 2005. From 1998 to 2004, Mr. Sebra worked with Arthur Andersen LLP and KPMG LLP, public accounting firms, serving a variety of publicly held and privately held real estate companies and professional service firms. Since January 2018, Mr. Sebra has also been a board member of Elwyn, a human services nonprofit organization. Mr. Sebra holds a Bachelor of Science in Accounting from Saint Joseph’s University in Philadelphia and a Master of Business Administration from Villanova University in Philadelphia.

Farrell M. Ender, age 41,42, has served as the President of IRT since August 2014.  Mr. Ender also served as the President of IRA from April 2013 to December 2016, as Senior Vice President of RAIT, the parent of IRA and IRT’s then largest stockholder, from October 2007 through December 2014 and as Vice President of RAIT from October 2002 through October 2007. His experience includes acquisition, property management, construction management and disposition of apartment properties. In his capacity as Senior Vice President of RAIT, Mr. Ender was responsible for investing and structuring both debt and equity financing in commercial real estate properties for RAIT. During that time period, Mr. Ender invested over $1.2 billion on behalf of RAIT of which $833 million was directed into 65 apartment properties containing over 14,000 units. Previously, as a Vice President in RAIT’s underwriting department, Mr. Ender was responsible for performing due diligence and underwriting for approximately $300 million of investments. Before joining RAIT, from 1999 to 2002 Mr. Ender held various real estate positions at Wachovia/Maher Partners, The Staubach Company and Toll Brothers. Mr. Ender received a BBA with a major in finance from James Madison University.

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OUR MANAGEMENT

Summary of 2017 Achievements:

2017 was another momentous year for IRT.  Under the direction of executive management, we continued to execute on our long-term strategic plan and deliver strong organic growth to our shareholders.  Our 2017 achievements are more particularly described under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our annual report and highlights include:

2017 follows two years of strong operational performance and growth for IRT.  Highlights for our two prior years include:

2016 Highlights:

2015 Highlights:

EXECUTIVE OFFICER AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Executive Summary

The Compensation Discussion and Analysis explains the objectives of our executive compensation programs, outlines the elements of executive officer compensation and describes the factors considered by the compensation committee to determine the amounts of compensation for our named executives for 20162017 performance.  Because of our transformative change from an externally managed REIT to an internally managed REIT through our management internalization completed in December 2016, the Compensation Discussion and Analysis will also discuss the compensation decisions relating to our named executives initiated in 2016 and 2017 intended to maintain management continuity and establish appropriate incentives to build shareholder value over time as IRT transitions to an internally managed REIT.  Our named executives and their principal offices during 20162017 were:

There were no other executive officers of IRT serving at the end of the fiscal year ended December 31, 2016.

The role of our compensation committee, its use of an independent compensation consultant and the participation of executive officers in the compensation process are discussed above in “Information Concerning Our Board of Directors, Committees and Governance-Compensation Committee.”

20162017 IRT Performance

20162017 was a transformative year for IRT as we completed the management internalizationcontinued to execute on our long-term strategic plan, acquiring 10 properties, totaling 2,340 units, for $243.6 million; refinancing our line of credit into a longer term and IRT stock repurchase and separated from RAIT, with a shared services arrangement with RAIT ending in June 2017.  As a result of the management internalization, we expect to save approximately $2.5 million per year on general and administrative expenses while eliminating the increased management cost related to growth under the external management contract structure.  For further discussionmore flexible financing arrangement; reducing our overall leverage; recycling capital out of our rationale for,class C assets and our expected benefits from,into class B assets; and reducing the management internalization, see the business description in our annual report which accompanies this proxy statement.  We also completed an offeringeffect of IRT common stock in the fourth quarter of 2016 netting proceeds of approximately $245.5 million. We used the total proceedsdebt maturities and balance sheet cash to de-lever our balance sheet by $147.3 million, complete the IRT stock repurchase for $62.2 millioninterest rates through long term loans and pay $43.0 million to complete the management internalization in December 2016.  By December 31, 2016, our leverage had decreased with debt to gross assets declining from 64% historically to 54.3%.   interest rate derivatives.

As of December 31, 2016,2017, we had $1.5 billion of gross investments in real estate comprised of 52 apartment properties containing an aggregate of 14,017 units, as compared to $1.3 billion of gross investments in real estate comprised of 46 apartment properties containing an aggregate of 12,982 units as compared to $1.4 billion of gross investments in real estate comprised of 49 properties containing an aggregate of 13,724 units as of December 31, 2015.2016.  We refer to our investments in real estate as of December 31, 20162017 as our “existing portfolio.”  As of December 31, 2016,2017, our existing portfolio had an average occupancy of 93.8%94.1% and an average monthly effective rent per occupied apartment unit of $977.$1,066.  We provide an analysis of our financial and operational performance in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our annual report.

Compensation Decisions Summary

In the period prior to our management internalization, which was completed in December 2016, our advisory agreement with IRA provided that our advisor was responsible for managing our affairs.  As a result, in that period our named executives and other officers did not receive any cash compensation, pension benefits, perquisites or other personal benefits from us for their services as our officers. We also had no arrangements to make cash payments to our named executives upon their termination from service as our officers. Instead, we paid our advisor the fees described under “Certain Relationships and Related Party Transactions-Fees and Expenses Paid to Our Advisor” below.certain fees. We did, however, compensate our named executives, other officers and individuals affiliated with our advisor with equity and equity-based awards or other types of awards in accordance with our LTIP intended to align their interests with the interests of our stockholders.  As discussed below, our compensation committee made restricted stock awards to the named executives in February 2016, which related to IRT’s 2015 performance. Additionally, our named executives during this period were also executive officers of RAIT and were compensated by RAIT, in part, for their services rendered to us.

As a result of the management internalization in 2016, our compensation committee evaluated a number of factors relevant during this transformative year for IRT, with a meaningful focus on integration through the internalization, efforts toward stabilization and continued business and investment development.  Our board and compensation committee felt that maintaining the continuity of our executive team would be a critical factor in the successful implementation of our management internalization.  As a result, our compensation committee considered the appropriate elements of executive officer compensation and benefits to offer to our executive

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team in planning for our management internalization and negotiated the terms of employment agreements with each of our named executives.  Upon the completion of our management internalization, we entered into employment agreements with each of Messrs. Schaeffer, Sebra and Ender providing for these elements.  See “Employment Agreements” below for a description of the terms of these NEO employment agreements.

Through February 2017, ourOur compensation committee has worked with its compensation consultant, FPL, to establish an appropriate peer group for IRT and to develop executive compensation plans appropriate for IRT after our management internalization.  The compensation committee evaluated and framed a detailed policy (including objective financial metrics) for determining executive compensation for full-year 2017.  For purposes of determining executive compensation for 2017 and beyond, the compensation committee adopted an annual cash bonus plan and an annual equity award program under the LTIP and made awards to the named executives.  These awards are described below under “2017 Compensation Decisions.”below.

Objectives of Our Compensation Policies

Our compensation policies for our named executives have the following objectives:

We seek to attract and retain key executives, including the named executives, by motivating them to achieve superior performance and rewarding them for that performance. Key elements of compensation may include one or more of the following:

We seek to align the interests of our named executives with our shareholders through long-term incentives in the form of equity-based compensation. As discussed above in “Executive Summary,” the compensation committee believes equity-based compensation is important to align the interests of our named executives with our shareholders. The compensation committee accordingly has made restricted stock awards to the named executives in 2016 and also performance based awards in 2017 and 2018 as described below.

The Elements of Our Compensation

Annual Cash Compensation

Base Salary. Base salaries are not intended to compensate individuals for extraordinary performance or for above-average performance by IRT. Base salaries for named executives are determined in part based on the compensation committees’committee’s general understanding of current compensation practices in IRT’s peer group described below, in part by the prior compensation of each named executive at RAIT and also by an assessment of individual performance relative to responsibilities and objectives for performance. Base salaries are reviewed annually by the compensation committee. The named executives each have employment agreements with IRT. Each employment agreement sets the executive’s base salary and provides that base salary may be increased but not decreased during the term of the agreement. See “Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table in 2016-Employment-Employment Agreements.”

Bonus Plan. Executive officers are eligible to receive annual bonuses. For 2016, Mr. Ender received a discretionary bonus based generally on our overall performance during the preceding year and his specific contribution to that performance. Beginning in 2017, the compensation committee established an annual target cash bonus award plan that compensates our named executives based on quantitative and qualitative metrics described below. See “2016 Compensation Decisions” below for a discussion of the 2016 bonus payments to Mr. Ender and “2017 Compensation Decisions” and “2018 Compensation Decisions” below for a description of the 2017 and 2018 annual cash awards to the the named executives.

Equity-Based Compensation

Equity-based compensation awards are designed to focus executive officers on the long-term goals and performance of IRT. See “Allocation Among Types of Equity Compensation” below for a discussion of the types of equity compensation IRT has awarded historically and its most recent 2017 equity awards to the named executives. All terms of any equity based awards under the incentive

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award plan are determined by the compensation committee at the time of grant in accordance with the terms of the incentive award plan. Participation in the incentive award plan is at the discretion of the compensation committee and is determined by potential contribution to, or impact upon, the performance of IRT or some designated portion of IRT by the employee. A SAR is the right to payment, in cash or in shares of our common stock in the discretion of the compensation committee, of the amount of the appreciation on a common share during the period beginning on the date of grant and ending on the date of exercise of the SAR. In this regard,

SARs serve both to reward and retain executives, as the value of the SARs is linked to the price of shares of our common stock on the relevant exercise date. A restricted common share award is an award of shares of our common stock subject to restrictions, primarily time-based vesting. The compensation committee believes restricted common share awards directly align the long termlong-term interests of the named executives to those of our common shareholders. Our compensation committee made restricted stock awards to the named executives in February 2016 which related to IRT’s 2015 performance. For 2017,In addition, the compensation committee has adopted the 2017 long termlong-term equity plan described below for its named executives combining performance share units, or PSUs, and restricted stock awards to further enhance IRT’s equity compensation to reflect current best compensation practices as IRT completes its management internalization. See “2017 Compensation Decisions” below.

Other Compensation

IRT provides certain other limited forms of compensation and benefits to the named executives, including limited perquisites and 401(k) matching contributions, as discussed below. The compensation committee has reviewed these other components of compensation in relation to the total compensation of the named executives and determined that they are reasonable and appropriate.

Perquisites. None of our other named executives received perquisites equal to or greater than $10,000 in 2016.2017. In general, we do not emphasize perquisites as part of the compensation packages we offer and seek to emphasize other elements.

401(k) Plan. IRT established a 401(k) plan for its employees in connection with the management internalization.  Contributions by employees began in 2017.  The IRT 401(k) plan offers eligible employees the opportunity on the same terms and conditions to make long-term investments on a regular basis through salary contributions, which are supplemented by our matching cash contributions and potential profit sharing payments. IRT currently provides a cash match equal to each employee’s contributions to the extent the contributions do not exceed 4% of the employee’s compensation and may provide an additional cash match of 2% of eligible compensation as discretionary cash profit sharing payments. Any matching contribution made by IRT pursuant to the IRT 401(k) plan vests immediately. All of the named executives participated in the RAIT Financial Trust 401(k) Plan in 2016 and IRT contributed employer matches on behalf of the named executives for the period after the management internalization through December 31, 2016 as set forth in footnote 4 in the Summary Compensation Table.

Post-Termination Compensation. We have employment agreements with the named executives. Each of our agreements with named executives provides for payments and other benefits if the executive’s employment terminates under specified circumstances, including in the event of a “change in control”. See “Executive Compensation—Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table in 2016—Table—Employment Agreements” and “Executive Compensation—Potential Payments upon Termination or Change in Control” for a description of these severance and change in control benefits with the named executives.

The compensation committee believes that these severance and change in control arrangements are an important part of overall compensation for these named executives because they help to secure the continued employment and dedication of these named executives, notwithstanding any concern that they might have regarding their own continued employment in general and prior to or following a change in control. The compensation committee also believes that these arrangements are important as a recruitment and retention device, as most of the companies with which we compete for executive talent have customarily had similar agreements in place for their senior employees.

The NEO employment agreements also contain provisions that prohibit the executive from disclosing IRT’s confidential information and prohibit the executive from engaging in certain competitive activities or soliciting any of our employees or customers following termination of their employment with IRT. An executive will forfeit his right to receive post-termination compensation if he breaches these or other restrictive covenants in the NEO employment agreements. We believe that these provisions help ensure the long-term success of IRT.

2016 Compensation Decisions

Our named executives were employees of RAIT prior to their respective resignations from RAIT in connection with our management internalization and only received equity awards and did not receive cash compensation from us for serving as our named executives prior to such resignations.resignations, other than dividend equivalent rights earned by the executives on restricted stock awards made prior to the management internalization.  Mr. Schaeffer, our chief executive officer, and Mr. Ender, our president, resigned from RAIT and became IRT employees on the completion of our management internalization on December 20, 2016 and Mr. Sebra, our chief financial officer, resigned from RAIT and became an IRT employee on March 31, 2017.  Our board and compensation committee felt that maintaining the continuity of our executive team would be a critical factor in the successful implementation of our management

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internalization.  As a result, our compensation committee considered the appropriate elements of executive officer compensation and benefits to offer to our executive team in planning for our management internalization and negotiated the terms of employment agreements with each of our named executives.  Upon the completion of our management internalization, we entered into employment agreements with each of Messrs. Schaeffer, Sebra and Ender providing for these elements.  Given that the completion of the management internalization occurred on December 20, 2016, we agreed to have RAIT continue to pay Mr. Schaeffer’s and Mr. Ender’s salaries through December 31, 2016 and for RAIT to pay Mr. Ender a bonus for his services to IRT in 2016 and we

reimbursed RAIT for the amounts paid.  In addition, we paid amounts to RAIT under the shared services agreement for services that included Mr. Sebra’s service as our chief financial officer.

2016 Annual Cash Compensation

Base Salary

As noted above, IRT began to pay base salaries to its named executives effective upon their respective resignations from RAIT.  The initial base salary was set primarily based on each named executive’s salary at RAIT prior to the management internalization and reflected in each named executive’s employment agreement based on the review of the compensation committee described above and the following:

This determination is not formulaic and is not based on specific IRT or individual performance targets objectives, but rather is subjective and made in light of our compensation philosophy and objectives described above. Mr. Schaeffer’s base salary was set at $618,600, Mr. Sebra’s base salary was set at $398,600 and Mr. Ender’s base salary was set at $308,600.

Bonus

As noted above, IRT had not historically paid cash bonuses to its named executives prior to the management internalization.  After the management internalization, IRT reimbursed RAIT for a discretionary bonus of $50,000 paid to Mr. Ender for his service to IRT in 2016 because Mr. Ender focused to a greater degree on IRT’s business in 2016 than Mr. Schaeffer and Mr. Sebra who also served as RAIT executive officers.

2016 Equity-Based Compensation

Prior to the management internalization, the compensation committee did not use a specific formula to calculate the number of equity awards and other rights awarded to our named executives under our LTIP. Generally, in determining the specific amounts to be granted to an individual, the compensation committee took into account factors such as our performance, the individual’s position, his or her contribution to our performance, and general market practices of our peers and similarly sized companies, as well as the recommendations of our advisor. The compensation committee made restricted stock awards to Mr. Schaeffer, Mr. Sebra and Mr. Ender relating to IRT’s 2015 performance in February 2016, or the February 2016 awards. The February 2016 awards were all allocated to restricted common stock awards.  

2017 Compensation Decisions

Through February 2017, ourOur compensation committee worked with its compensation consultant, FPL, to establish an appropriate peer group for IRT and to develop executive compensation plans appropriate for IRT after our management internalization.  Effective February 28, 2017, our compensation committee approved awards under the LTIP for our named executives comprised of cash bonus awards and equity awards. These awards included awards intended to qualify as “qualified performance-based compensation” under section 162(m) of Internal Revenue Code and Article X of the LTIP.  

The compensation committee adopted an annual cash bonus plan, or the annual cash bonus plan, pursuant to the LTIP and made the awards thereunder, or the 2017 cash bonus awards, to the named executives setting forth the basis on which the named executives could earn cash bonuses for 2017.  The compensation committee structured these 2017 cash bonus awards to link the majority of our named executives’ 2017 annual bonuses to defined objectives and formulaic metrics that the compensation committee believes are

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important drivers in the creation of shareholder value, while also rewarding more subjective elements of each named executive’s performance through a subjective component.  

In addition, the compensation committee adopted an annual equity award program, or the equity program, pursuant to the LTIP and made awards thereunder, or the 2017 equity awards, to the named executives setting forth the basis on which the named executives could earn and vest in equity compensation over the years 2017 through 2020.  The 2017 equity awards were comprised of two components.  The first component was performance share units, or PSUs, the value of which will be based on the attainment of

absolute and relative total shareholder return, or TSR, hurdles over a three-year period, which include both share price appreciation and reinvestment of common stock dividends, as well as a subjective evaluation of the achievement of strategic objectives.  The second component was time-based restricted stock awards.

  On February 28, 2017, the compensation committee also made a separate award which vested immediately of 624 shares of our common stock under the LTIP to Mr. Ender.  This separate award was intended to compensate Mr. Ender for his forfeiture of RAIT equity awards upon his resignation from RAIT as a result of the management internalization.   The compensation committee does not expect generally to make immediately vesting awards to named executives absent special circumstances.

The terms of the 2017 cash bonus awards and the 2017 equity awards are described below.

2017 Cash Bonus Awards

Beginning with IRT’s 2017 fiscal year, the compensation committee is implementingimplemented the new annual cash bonus plan that it believes will incentivize the named executives to produce a high level of operational performance by explicitly linking the majority of their annual bonuses to certain objectives and formulaic metrics that the compensation committee believes are important drivers in the creation of shareholder value, while also rewarding more subjective elements of each named executive’s performance through a subjective component.  This new program will setsets forth a target cash bonus award level for each named executive participant composed of two components, as described below:  

2017 Cash Bonus Award Ranges

The individual 2017 cash bonus award ranges, as a percentage (each, referred to as a “relevant percentage”) of base salary for Threshold, Target and Maximum performance levels for each of the named executives was as follows:

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Objective/Formulaic Criteria

The compensation committee has established the following objective performance metrics to be utilized in determining any payout with respect to the 2017 cash bonus awards weighted based on these performance measurements with their 2017 relative weighting:

All of these objective performance criteria shall be calculated in a manner consistent with how IRT discloses the metric in its public reporting; provided that the compensation committee will retainretains discretion to adjust the calculation of these metrics if it determines, due to unanticipated business developments, transactions or other factors affecting the calculation of such metrics, that such an adjustment would enhance incentivizing or rewarding actions in the best interests of IRT’s stockholders.  The actual 2017 cash bonus award payment realized by a named executive with respect to each applicable metric will depend on IRT’s achievement of at least the threshold level of performance established by the compensation committee with respect to that metric.  There will be no 2017 cash bonus award payable for that metric in the event IRT achieves less than the threshold level.   IRT’s achievement of the threshold level for a designated metric will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to that metric; the achievement of the target level for a designated metric will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to that metric; and the achievement of the maximum level for a designated metric will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to that metric. If the calculated percentage is between threshold and target or between target and maximum for an annual performance period, then the earned percentage will be prorated.   See “Allocation of Components and Calculation of the Annual2017 Cash Bonus Award” above for a description of how the 2017 cash bonus awards will bewere calculated.

Subjective Criteria

The subjective bonus award portion of each named executive’s 2017 cash bonus award will bewas based on the compensation committee’s subjective evaluation of the named executive’s performance relative to achieving specified individual criteria established for 2017 for each participant, which the compensation committee has determined are also important elements of each named executive’s contribution to the creation of overall shareholder value.  These includeincluded the following elements; provided that the compensation committee will retain discretion to add or modify subjective criteria if it determines, due to unanticipated business developments, transactions or other factors affecting IRT, that such additions or modifications to the subjective criteria would enhance incentivizing or rewarding actions in the best interests of IRT’s stockholders:elements:

The named executive’s achievementPayment of the threshold level for subjective criteria will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to subjective criteria; the achievement of the target level for subjective criteria will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to that metric; and the achievement of the maximum level for subjective criteria will result in a payout of such named executive’s relevant percentage of the proportion of the 2017 cash bonus award allocated to subjective criteria. If the calculated percentage is between threshold and target or between target and maximum for an annual performance period, then the

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earned percentage will be prorated. See “Allocation of Components and Calculation of the Annual Cash Bonus Award” above for a description of how the 2017 cash bonus awards will be calculated.

Cash Bonus Award PaymentsAwards

Grant of 2017 Cash Bonus Awards

The individual 2017 cash bonus awards for each of the named executives was as follows:

Achievement of 2017 Performance Criteria

With respect to the 2017 objective performance criteria, as outlined above, IRT exceeded the target for each performance metric, as follows:  

Accordingly, the compensation committee awarded the named executives cash bonuses equivalent to the relevant percentage of base salary, based on the achievement of each performance metric relative to the target for such performance metric.

With respect to the 2017 subjective performance criteria, the compensation committee analyzed the performance of the named executives as compared to the subjective criteria discussed above.  The compensation committee determined that each named executive achieved the specified individual criteria established for 2017 in a manner that the compensation committee found to be above-average.  Accordingly, the compensation committee granted cash bonus awards to Messrs. Ender and Sebra above target for 2017.  With respect to Mr. Schaeffer, in addition to considering his performance as compared to the specified individual criteria established for 2017, the board also assessed his performance in eight categories:  (1) leadership; (2) strategic vision and direction; (3) safe and sound operations; (4) achievement of financial results; (5) executive organization development; (6) relationship with the board; (7) management of external relationships; and (8) diversity and inclusion.  These categories were not set in advance by the board or the compensation committee and no weighting or special emphasis was assigned to any particular category.  Based on a 4 point scale, with 4 being the maximum, Mr. Schaeffer was assigned a composite score of 3.875 by the board, which further supported the compensation committee’s decision to grant him an above target cash bonus award for 2017.

2017 Equity Awards

The 2017 equity awards granted by the compensation committee in 2017 under the equity program consisted of the following two components:

2017 PSUs

The number of 2017 PSUs earned will be determined (a) for 80% by IRT’s performance for the three yearthree-year period commencing January 1, 2017 and ending December 31, 2019 relative to two long term performance metrics established by the compensation committee, as described in greater detail below, and (b) for 20% of the awards, by the compensation committee’s subjective evaluation of the named executive’s contribution to the creation of overall stockholder value.  

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⁽¹⁾ For purposes of determining IRT’s achievement against this metric, IRT’s TSR will be compared to the constituents of the FTSE NAREIT Apartment Index, or the Index, over the performance period, using the relative percentile ranking approach for all constituents that are included in the Index over the full performance period.  

No awards will be earned if below threshold performance is achieved for a particular metric.

Number of PSUs and 2017 stock awards

The number of 2017 PSUs awarded is set forth below and was determined by dividing the maximum dollar amount of the award that may be earned by $9.19, IRT’s closing stock price on the NYSE MKT on February 28, 2017, the grant date, $9.19, based on the following proposed individual award opportunities.  The number of shares awarded for 2017 stock awards is set forth below and was determined by dividing the dollar amount of the award based by such closing stock price.

Additional Terms of the 2017 equity awards

Dividends will be paid with respect to outstanding 2017 stock awards, subject to forfeiture prior to vesting. Dividend equivalents will not be paid on the 50% of the 2017 PSUs that have met the 3 yearthree-year performance based criteria and have vested, but dividend equivalents will be paid on the remaining 50 % of the 2017 PSUs only for the year during which they time vest, subject to forfeiture prior to vesting. No dividend equivalents will be paid while the 2017 PSUs are subject to performance criteria. Dividend equivalents will accrue only on the portion of the 2017 PSUs which have met the performance criteria and remain subject only to time vesting.

The 2017 stock awards will have voting rights and the 2017 PSUs will not have any voting rights.

Any named executive whose employment is terminated will forfeit any unvested 2017 equity awards except with respect to 2017 PSUs in the event of a qualified termination or retirement as described below and except where such named executive’s employment agreement with IRT provides for accelerated vesting in defined circumstances, where such named executive’s employment agreement with IRT provides for accelerated vesting in defined circumstances.

If a named executive’s employment is terminated due to death or disability and other than voluntarily or for cause (as defined in the relevant NEO employment agreement), which we refer to as a qualified termination, prior to the conclusion of the 3-year performance period applicable to such named executive’s 2017 PSUs, then such performance period will be shortened to conclude on

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the date of such qualified termination, which we refer to as a shortened performance period. In such event, the compensation committee will determine within three months after the date of such qualified termination the number of 2017 PSUs earned by such named executive, if any, for such shortened performance period in accordance with the performance criteria established for such award. The named executive’s earned 2017 PSUs, if any, will vest as of the date that the compensation committee determines the achievement of such performance criteria and will not be subject to the additional time based vesting period. The number of 2017 PSUs eligible to be earned shall be determined on a pro rata basis by multiplying the number of 2017 PSUs issued to such named executive by a fraction, the numerator of which is the number of days in the shortened performance period and the denominator of which is the number of days in the original 3-year performance period. With respect to earned 2017 PSUs held by the named executive for which the performance period is complete but for which the additional time-based vesting period is incomplete prior to the named executive’s qualified termination, any restrictions on such earned awards shall lapse and such earned awards shall automatically become fully vested as of the date of such qualified termination.

In the event of a named executive’s “retirement” (as defined below), the 2017 PSUs will vest in the following manner. If such retirement occurs during the performance period, the number of 2017 PSUs vested will be determined on a pro rata basis by multiplying the 2017 PSUs earned in the performance period by a fraction, the numerator of which is the number of days from the beginning of the performance period to the date of such retirement and the denominator of which is the total number of days in the 3-year performance period. If a named executive’s retirement occurs after the performance period, all of the 2017 PSUs earned in the performance period will vest upon retirement. The above notwithstanding in no event will any 2017 PSUs vest if the performance targets are not met. “Retirement” is defined in the 2017 PSUs as the named executive’s voluntary separation of employment following satisfaction of the “Rule of 70.” The Rule of 70 will be satisfied upon (1) completion of at least fifteen (15) years of service with IRT or its related entities; (2) attainment of age 55 and (3) such named executive’s combined age and service equals at least 70. A named executive may separate upon retirement subject to providing at least six (6) months’ advance notice to IRT and entering into a separate three-year non-competition and non-solicitation agreement, if requested. In the event the 2017 PSUs vest due to retirement, 50% of the vested 2017 PSUs will be redeemable as of the relevant determination date and the remaining 50% will be redeemable on the first anniversary of the last day of the performance period.

Clawback Practices2018 Compensation Decisions  

Awards madeFor 2018, our compensation committee approved awards under the 2017LTIP for our named executives comprised of cash bonus awards and equity awards.  

The compensation committee made the cash bonus awards under the annual cash bonus plan, or the 2018 cash bonus awards, to the named executives setting forth the basis on which the named executives could earn cash bonuses for 2018.  The compensation committee structured these 2018 cash bonus awards to link the majority of our named executives’ 2018 annual bonuses to defined objectives and formulaic metrics that the compensation committee believes are important drivers in the creation of shareholder value, while also rewarding more subjective elements of each named executive’s performance through a subjective component.  

In addition, the compensation committee made the equity awards under the annual equity awards program, or the 2018 equity awards, to the named executives setting forth the basis on which the named executives could earn and vest in equity compensation over the years 2018 through 2021.  The 2018 equity awards were comprised of two components.  The first component was performance share units, or PSUs, the value of which will be based on the attainment of absolute and relative total shareholder return,

or TSR, hurdles over a three-year period, which include both share price appreciation and reinvestment of common stock dividends, as well as a subjective evaluation of the achievement of strategic objectives.  The second component was time-based restricted stock awards.

The terms of the 2018 cash bonus awards and the 20172018 equity awards are described below.

Base Salary

In December 2017, the compensation committee determined to adjust the base salaries for the named executives effective as of January 1, 2018.  The rationale behind our base salary decisions are subjectdiscussed above in “Objectives of our Compensation Policies” and “The Elements of our Compensation” and below in “Implementing Objectives of Our Compensation Policies”.  The 2018 base salaries are set forth in the table below:

2018 Cash Bonus Awards

Our annual cash bonus sets forth a target cash bonus award level for each named executive participant composed of two components, as described below:  

The individual 2018 cash bonus award ranges, as a percentage (each, referred to as a “relevant percentage”) of base salary for Threshold, Target and Maximum performance levels for each of the named executives as follows:

Objective/Formulaic Criteria

The compensation committee has established the following objective performance metrics to be utilized in determining any payout with respect to the 2018 cash bonus awards weighted based on these performance measurements with their 2018 relative weighting:

All of these objective performance criteria shall be calculated in a manner consistent with how IRT discloses the metric in its public reporting; provided that the compensation committee will retain discretion to adjust the calculation of these metrics if it determines, due to unanticipated business developments, transactions or other factors affecting the calculation of such metrics, that such an adjustment would enhance incentivizing or rewarding actions in the best interests of IRT’s stockholders.  The actual 2018 cash bonus award payment realized by a named executive with respect to each applicable metric will depend on IRT’s achievement of at least the threshold level of performance established by the compensation committee with respect to that metric. There will be no 2018 cash bonus award payable for that metric in the event IRT achieves less than the threshold level.  See “Allocation of Components and Calculation of the Annual Cash Bonus Award” above for a description of how the 2018 cash bonus awards will be calculated.

Subjective Criteria

The subjective bonus award portion of each named executive’s 2018 cash bonus award will be based on the compensation committee’s subjective evaluation of the named executive’s performance relative to achieving specified individual criteria established for 2018 for each participant, which the compensation committee has determined are also important elements of each named executive’s contribution to the creation of overall shareholder value.  These include the following elements; provided that the compensation committee will retain discretion to add or modify subjective criteria if it determines, due to unanticipated business developments, transactions or other factors affecting IRT, that such additions or modifications to the subjective criteria would enhance incentivizing or rewarding actions in the best interests of IRT’s stockholders:

See “Allocation of Components and Calculation of the Annual Cash Bonus Award” above for a description of how the 2018 cash bonus awards will be calculated.

2018 Equity Awards

The 2018 equity awards granted by the compensation committee in 2018 under the equity program consisted of the following two components:

2018 PSUs

The number of 2018 PSUs earned will be determined (a) for 70% of the awards, by IRT’s performance for the three year period commencing January 1, 2018 and ending December 31, 2020 relative to the long term performance metric established by the compensation committee, as described in greater detail below, and (b) for 30% of the awards, by the compensation committee’s subjective evaluation of the named executive’s contribution to the creation of overall stockholder value over the three year period commencing January 1, 2018 and ending December 31, 2020, as described in greater detail below.   The actual number of 2018 PSUs earned by a participant may range from 0% to 150% of target based on actual performance for the performance period. No awards will be earned if below threshold performance is achieved for a particular metric.

The performance based awards vest 50% at December 31, 2020 based on performance for 2018-2020, and the 50% balance, consisting of the same number of shares that were vested at December 31, 2020, become time vesting and vest one year thereafter, subject to forfeiture in such year only in the event IRT has terminated the named executive’s employment for cause or the named executive has resigned without good reason as determined, in each situation, under such named executive’s employment agreement. The compensation committee currently intends to redeem any vested 2018 PSUs with shares of our common stock, subject to the availability of shares of our common stock under the LTIP at the time of vesting.

Relative 3-year TSR

For purposes of determining IRT’s achievement against the Relative 3-year TSR metric, IRT’s TSR will be compared to the constituents of the FTSE NAREIT Apartment Index, or the Index, over the performance period, using the relative percentile ranking approach for all constituents that are included in the Index over the full performance period.  

Subjective Criteria

The subjective bonus award portion of each named executive’s 2018 PSUs will be based on the compensation committee’s subjective evaluation of the named executive’s performance relative to achieving specified individual criteria over the performance period, which the compensation committee has determined are also important elements of each named executive’s contribution to the creation of overall shareholder value.  

Number of PSUs and 2018 stock awards

The number of 2018 PSUs awarded is set forth below and was determined by dividing the maximum dollar amount of the award that may be earned by $8.67, IRT’s closing stock price on the NYSE on February 23, 2018, the grant date, based on the following proposed individual award opportunities.  The number of shares awarded for 2018 stock awards is set forth below and was determined by dividing the dollar amount of the award by such closing stock price.

Additional Terms of the 2018 equity awards

The 2018 equity awards have identical additional terms as the 2017 equity awards.  See “2017 Compensation Decisions—2017 Equity Awards—Additional Terms of the 2017 equity awards.”

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Implementing Objectives of Our ObjectivesCompensation Policies

We consider our implementation of incentive based compensation described above to bring IRT in line with best compensation practices as it transitions to being internally managed. Other important policies and other factors influencing our compensation decisions are described below.

2016 Pay Governance

IRT seeks to maintain pay practices that foster good governance, which are demonstrated by:

Impact of 20142017 Stockholder Advisory Votes

Say-On-Pay Vote

At our 20142017 annual meeting of stockholders, we provided our stockholders with the opportunity to vote to approve, on an advisory basis, the compensation of our named executives. An overwhelming majority of our stockholders (99.2%(approximately 95%) that cast votes on this proposal approved the compensation of our named executives as described in our proxy statement for the 20142017 annual meeting of stockholders. The compensation committee reviewed the results of this advisory “say-on-pay” vote and considered it in determining specific award amounts granted to our named executives for 2016. The compensation committee will also carefully consider the stockholder votes on Proposal 3 at the 2017 annual meeting, along with other expressions of stockholder views it receives on specific policies and desirable actions.2017.

Say-on-Pay-Frequency Vote

At our 2014 annual meeting of stockholders, our stockholders who cast votes on this proposal recommended by a substantial majority (71.7%) that we hold an advisory stockholder vote on the compensation of our named executives every three years. As a result of this vote, we have included Proposal 3 in this proxy statement to provideprovided our stockholders an advisory vote on the named executives’ compensation at our 2017 annual stockholder meeting.  In accordance with Exchange Act rules, we will next hold an advisory vote on the frequency of our say on pay votes at our 2020 annual stockholder meeting.  

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Peer Groups

The compensation committee engaged FPL to examine market compensation practices to assist it in developing a compensation program for the named executives upon completion of the management internalizations.  

In order to achieve this, FPL reviewed and provided the compensation committee with information in two different peer groups of companies.  The asset-based peer group, which consisted of eightnine multifamily focused companies, with which IRT competes for investment opportunities and institutional investor funding, was utilized to assist the compensation committee in understanding current compensation structures and practices.  The size-based peer group, which consisted of nineten companies reasonably comparable to IRT based on total market capitalization, was utilized to assist the compensation committee in understanding current market compensation levels.  While the compensation committee did consider the compensation levels of the size-based peer group, we do not target our executives’ compensation to a specified percentile of a peer group.

The asset-based peer group was comprised of:

The size-based peer group was comprised of:

Internal Pay Equity

In evaluating the internal pay relationship among its executive officers, the compensation committee sets the target opportunity for each executive officer under the incentive plans based on their relative respective responsibilities and expected contributions to IRT’s performance. Mr. Schaeffer, as chief executive officer, had the highest salary and target opportunity amounts, followed by Mr. Sebra, as chief financial officer, and then Mr. Ender, as president. With respect to qualitative or discretionary portions of the executive officer’s compensation, the compensation committee evaluates each officer’s performance individually.

Allocation Between Equity Compensation and Cash Payments. The compensation committee strives to achieve an appropriate mix between base salary, cash bonuses and equity incentive awards in order to meet IRT’s compensation objectives. However, any pay mix objective is not applied rigidly and does not control the compensation committee’s compensation decisions; it serves as another tool to assess an executive’s total pay opportunities and whether appropriate incentives have been provided in order to accomplish our compensation objectives. The compensation committee also seeks to balance compensation elements that are based on individual contributions toward achieving IRT’s financial, operational and strategic goals with others that are based on the performance of our shares of common stock and our dividend record.

Allocation Among Types of Equity Compensation. Awards that may be granted under our LTIP include unrestricted stock, restricted stock, restricted stock units, deferred stock units, options, stock appreciation rights, or SARs, performance awards, dividend equivalents, other stock based awards and any other right or interest relating to stock or cash, which we collectively refer to herein as awards. Our compensation committee will determine if and when any of our named executives, other officers or participants as

defined in the LTIP will receive such awards in the manner described above under “Information Concerning Our Board of Directors, Committees and Governance-Compensation Committee.”  In 2014 and 2015, we made awards under the LTIP to our executive officers of restricted stock awards and SARs.  In 2016, we made awards under the LTIP comprised of restricted stock awards.  Our

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equity awards in 2017 and 2018 are described above.  We expect to make awards similar to the 20172018 equity awards in the future, subject to our annual evaluation of current best compensation practices and IRT’s performance.  

All of the SARs awarded to date to these named executives vest in three equal annual installments and have a five yearfive-year term (subject to earlier termination if their employment ends) and can be settled in shares of our common stock or cash, at the discretion of the compensation committee but subject to the availability of shares of our common stock under the LTIP. The compensation committee expects it will periodically evaluate how to settle any vested SARs and currently expects to settle all vested SARs with shares of our common stock. SARs are valued based on a Black-Scholes option pricing model at the date of grant. All of the restricted stock awards awarded to date to these named executives vest in three equal annual installments. Restricted stock awards are valued based on the closing price of a common share on the NYSE MKT on the grant date. For the portion of the 2017 and 2018 equity awards consisting of PSUs based on market conditions, the fair value is estimated on the date of grant using a Monte Carlo simulation model. Such valuation consists of computing the fair value using IRT’s simulated stock price as well as TSR over the applicable performance period from January 1, 2017 to December 31, 2019.period. The award is modeled as a contingent claim in that the expected return on the underlying shares is risk free and the rate of discounting the payoff of the award is also risk free. For the portion of the 2017 and 2018 equity awards consisting of PSUs based on “performance conditions”, the fair value was calculated based on the NYSE MKT or NYSE closing price (as applicable) for shares of our common stock subject to the award on the grant date of the award.  In accordance with SEC rules, equity compensation awards are reflected in the Summary Compensation Table based on their grant date fair value and not the year of our financial performance upon which the compensation committee based the award. The awards made prior to 2017 related to performance in the year prior to the year of the award.  The 2017 and 2018 equity awards are forward-looking and are intended to relate to performance in 2017, 2018 and future periods.

Equity Grant Practices. The compensation committee historically made equity awards to executive officers and other participants under the LTIP around the first quarterly meeting of the year.  

Stock Ownership Guidelines.   Effective April 1, 2018, IRT is evaluating whether to implementimplemented guidelines for its executive officers and directors regarding ownership of IRT securities.  All non-employee directors are required to hold IRT common stock with a value equal to five times a director's annual cash retainer. The Chief Executive Officer and Chairman of the Board is required to hold IRT common stock with a value equal to five times his annual base salary. All other executive officers are required to hold IRT common stock with a value equal to three times their annual base salary.  All non-employee directors and executive officers are required to satisfy these stock ownership guidelines six years after the later of (i) their election or appointment as a director or executive officer, as applicable, or (ii) April 1, 2018.

Employment Agreements. The named executives have employment agreements with IRT. The employment agreements set floor amounts for base salary and, in certain cases, bonus opportunities. In addition, the employment agreements of the named executives have change-in-control and non-change in control severance protection. See “Executive Compensation—Narrative to Summary Compensation Table and Plan-Based Awards Table—Employment Agreements” and “Executive Compensation—Potential Payments upon Termination or Change in Control.”

Risk Management and IRT’s Compensation Policies and Procedures. As part of the board’s role in risk oversight, the compensation committee considers the impact of IRT’s compensation plans, policies and practices, and the incentives they create, with respect to all employees, including executive officers, on IRT’s risk profile. Based on this consideration, the compensation committee concluded that IRT’s compensation policies and procedures are not reasonably likely to have a material adverse effect on IRT. Some of the factors the compensation committee considered as mitigating the risks of IRT’s compensation plans include:

The Effect of Regulatory Requirements on Our Executive Compensation

IRC Section 162(m). The compensation committee periodically reviews the potential implications of IRC Section 162(m). ThisUnder the recently enacted Tax Cuts and Jobs Act, for years beginning prior to January 1, 2018, this section generally disallows a publicly-held corporation’s tax deduction for compensation paid to its chief executive officer and the next three highest paid executive officers (excluding the chief financial officer) in excess of $1,000,000 in any year unless the compensation is performance-based within the meaning of IRC Section 162(m). AlthoughFor years beginning after December 31, 2017, the compensation committee will consider

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various alternatives for preserving the tax deductibility of compensation payments, the compensation committee reserves the right to award compensation to our executives that may not qualify underemployees covered by IRC Section 162(m) as deductible compensation.are the chief executive officer, the chief financial officer and the next three highest paid officers.  We do not expect that the payment of compensation that does not satisfy the requirements of IRC Section 162(m) will have a material adverse federal income tax consequence to us. We expectFor fiscal year 2017, the compensation committee structured a substantial portion of its long-term equity awards in a manner intended to be exempt from the deduction limitation of IRC Section 162(m) because they are earned based on the achievement of performance goals established by the compensation committee. The exemption from IRC Section 162(m)’s deduction limit for performance-based compensation has been repealed, effective for taxable years beginning after December 31, 2017, such that compensation paid to our covered executive officers in excess of $1,000,000 will not be deductible unless it qualifies for transition relief applicable to certain arrangements in place as of November 2, 2017.  Despite the changes to IRC Section 162(m) as a result of the Tax Cuts and Jobs Act, consistent with our executive compensation philosophy of linking pay to performance and aligning executive interests with those of our stockholders, we currently expect that we will continue to structure our executive compensation program so that a significant portion of total executive compensation is linked to the performance based awards described above to qualify as performance-based under Section 162(m). See “2017 Compensation Decisions” above.  of IRT.

IRC Section 409A. Section 409A of the IRC applies to all forms of nonqualified deferred compensation. The compensation committee takes Section 409A into account in determining the form and timing of compensation paid to our executives. IRT intends to operate and administer its compensation arrangements in accordance with Section 409A.

IRC Sections 280G and 4999. IRC Section 280G limits our ability to take a tax deduction for certain “excess parachute payments” (as defined in Section 280G) and IRC Section 4999 imposes excise taxes on each executive that receives “excess parachute payments” paid by IRT in connection with a change in control. Our employment agreements with our named executives provide that the named executive shall bear all expense of, and be solely responsible for, any excise tax imposed by Section 4999 of the IRC and that any amount or benefit deemed to be a “parachute payment” (as defined in Section 280G of the IRC) and would result in the imposition on the named executive of an excise tax under Section 4999 of the IRC (all such amounts and benefits being referred to as total payments), shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the IRC but only if, by reason of such reduction, the net after-tax benefit received by the named executive shall exceed the net after-tax benefit received by the named executive if no such reduction was made.  See “Employment Agreements-Parachute Payments” below.

Accounting Rules. Various rules under generally accepted accounting principles determine the manner in which IRT accounts for grants of equity-based compensation to our employees in our financial statements. The compensation committee takes into consideration the accounting treatment of alternative grant proposals under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, “Stock Compensation”, when determining the form and timing of equity compensation grants to employees, including our named executives. The accounting treatment of such grants, however, is not determinative of the type, timing, or amount of any particular grant of equity-based compensation to our employees.

Potential Impact on Compensation from Executive Misconduct. If the board determines that an executive officer has engaged in fraudulent or intentional misconduct, the board would take action to remedy the misconduct, prevent its recurrence, and impose such discipline on the officer as would be appropriate. Discipline would vary depending on the facts and circumstances, and may include, without limit, termination of employment, initiating an action for breach of fiduciary duty and, if the misconduct resulted in a significant restatement of IRT’s financial results, seeking reimbursement of any portion of performance-based or incentive compensation paid or awarded to the executive that is greater than what would have been paid or awarded if calculated based on the restated financial results. These remedies would be in addition to, and not in lieu of, any actions imposed by law enforcement agencies, regulators or other authorities. Under the Dodd-Frank Act, additional guidance will be forthcoming regarding mandatory recoupment of compensation. When such guidance is available, IRT intends to adopt additional policies to implement the new requirements.

Awards made under the 2017 annual cash bonus plan and the 2017 long term incentiveequity program for the eligible officers are subject to clawback terms which will allow IRT to recover amounts paid to such officer pursuant to such awards to the extent that the compensation committee, following an appropriate investigation and consideration of all relevant circumstances, determines that such officer has engaged in fraud or willful misconduct that caused the requirement for a material accounting restatement of IRT’s financial statements due to material noncompliance with any financial reporting requirement (excluding any restatement due solely to a change in accounting

rules). In addition, each NEO employment agreement includes a clawback provision described below.   See “Employment Agreements-Clawback” below.

Compensation Committee Report

The compensation committee has reviewed and discussed the Compensation Discussion and Analysis and discussed that analysis with management. Based on its review and discussions with management, the compensation committee recommended to Independence Realty Trust, Inc.’s (“IRT”) board of directors that the Compensation Discussion and Analysis be included in IRT’s annual report on Form 10-K for 20162017 and IRT’s 20172018 proxy statement. This report is provided by the following independent directors who comprise the committee:

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Executive Officer Compensation

We provide below summary information about compensation expensed or accrued by IRT during the fiscal year ended December 31, 2016,2017, for the following persons, who we refer to as the named executives:

There were no other executive officers of IRT serving at the end of the fiscal year ended December 31, 2016.2017.

Summary Compensation Table

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Grants of Plan-Based Awards in 20162017

The following table provides information about equityplan-based awards granted to the named executives in 2016.2017.

Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table  in 2016

We provide additional disclosure below of factors relating to the Summary Compensation Table and Grants of Plan-Based Awards, in 2016, including descriptions of the employment agreements of the named executives.  

CEO Pay Ratio

In August 2015, pursuant to the requirements of the Dodd-Frank Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the annual total compensation of the principal executive officer.  The annual total compensation for 2017 for Mr. Schaeffer, our CEO, was $2,938,967, as reported under the above Summary Compensation Table. Our median employee’s total compensation for 2017 was $42,286.  As a result, we estimate that Mr. Schaeffer’s 2017 total compensation was approximately 70 times that of our median employee.

Our CEO to median employee pay ratio was calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining 2017 total compensation, consisting of salaries, wages, bonuses, and equity awards for all individuals who were employed by the Company on December 31, 2017, other than our CEO. We included all active employees and annualized the compensation for any employees who were not employed by the Company for the full 2017 calendar year. After identifying the median employee based on 2017 total compensation, we calculated annual total compensation for such employee using the same methodology we used for our named executive officers as set forth in the above Summary Compensation Table.

Employment Agreements

IRT has entered into the NEO employment agreements with Messrs. Schaeffer, Sebra and Ender. The post-termination and severance provisions of these agreements are discussed in “Potential Payments on Termination or Change-In-Control” below.

Term.  Each NEO employment agreement has an initial three yearthree-year employment term from its effective date and provides that it will continue to be effective for successive one yearone-year periods unless either party notifies the other party of non-renewal in writing prior to three months before the expiration of the then current term.  Each NEO employment agreement also may be terminated by IRT without cause or for cause.  The named executive can voluntarily terminate his employment for any reason upon 60 days’ notice or by sending a notice of non-renewal to IRT or may resign for good reason.   The NEO employment agreements also provide that IRT may terminate them upon the disability or death of the named executive.  The terms “cause,” “disability,” and “good reason,” are discussed in “Potential Payments on Termination or Change-In-Control” below.   The effective date of the employment agreements for Messrs. Schaeffer and Ender was December 20, 2016, the date of the completion of the management internalization. The effective date of the employment agreement for Mr. Sebra was March 31, 2017, the date of his resignation from RAIT.

Duties.  Mr. Schaeffer’s employment agreement provides that he will continue to serve as the chief executive officer of IRT during his employment term.  Mr. Schaeffer also agrees in his employment agreement to continue to serve as the chairman of the board, subject to the board’s right to elect a different person to serve as chairman.  Mr. Schaeffer’s employment agreement provides that he will perform all duties and accept all responsibilities incident to such positions as may be reasonably assigned to him by the board.  Mr. Schaeffer’s employment agreement provides that he will serve as a member of the board during his employment term, subject to the IRT stockholders’ election of Mr. Schaeffer to the board and reelection of Mr. Schaeffer to the board during each year of his employment term.  During Mr. Schaeffer’s employment term, IRT agrees to nominate him for election to the board at any meeting of the IRT stockholders where the election of the members of the board is included in the purposes of such meeting.  Mr. Schaeffer’s employment agreement provides that he will not receive any additional compensation for services as a member of the board.  Mr. Sebra’s employment agreement provides that he will continue to serve as the chief financial officer of IRT during his employment term.  Mr. Ender’s employment agreement provides that he will continue to serve as the president of IRT during his employment term.  The employment agreements for Messrs. Sebra and Ender each provide that they will perform all duties and accept all responsibilities incident to their respective positions as may be reasonably assigned to him by the board or the chief executive officer.

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Compensation.  Each NEO employment agreement provides the respective named executive’s initial base salary.  The initial annual base salary pursuant to each NEO employment agreement for each of Mr. Schaeffer, Mr. Sebra and Mr. Ender is $618,600, 398,600 and $308,600, respectively.  Each NEO employment agreement provides that each named executive’s base salary will be reviewed annually for appropriate increases by the board pursuant to the board’s normal performance review policies for senior level executives but will not be decreased.  As described above, the board has delegated this review to the compensation committee.  On December 14, 2017, the compensation committee approved the following annual base salaries effective January 1, 2018 for the following NEOs: (i) Mr. Schaeffer - $700,000; (ii) Mr. Sebra - $400,000; and (iii) Mr. Ender - $400,000.

Each NEO employment agreement states that each named executive is eligible to receive annual bonuses in such amounts as the board may approve in its sole discretion or under the terms of any annual incentive plan of IRT maintained for other senior level executives and is entitled to participate in any short-term and long-term incentive programs (including without limitation any equity compensation plans) established by IRT for its senior level executives generally.  Each NEO employment agreement provides that the respective named executive is entitled to participate in all employee retirement and welfare benefit plans and programs or executive perquisites made available to IRT’s senior level executives as a group or to its employees generally and to be reimbursed for reasonable expenses related to his employment and to vacation and sick leave in accordance with IRT’s policies.  Each named executive’s base salary, bonuses awarded and equity and other compensation are described above in “2016 Compensation Decisions” and “2017 Compensation Decisions.”above.

Clawback.  Each NEO employment agreement provides that any compensation paid to the named executive pursuant to the employment agreement or any other agreement or arrangement with IRT is subject to mandatory repayment by the named executive to IRT if and to the extent any such compensation paid to such named executive is, or in the future becomes, subject to (i) any “clawback” or recoupment policy that is applicable to all senior executives of IRT and is limited to the recovery of incentive-based compensation which, as a result of an accounting restatement by IRT, is in excess of the compensation which should have been received by such named executive, or (ii) any law, rule, requirement or regulation which imposes mandatory recoupment, under circumstances set forth in such law, rule, requirement or regulation.

Non-Competition, Non-Solicitation, Intellectual Property, Confidentiality and Non-Disparagement.  Each NEO employment agreement provides that each named executive agrees that during his respective employment term and for a period of 12 months thereafter, without regard to its termination for any reason which does not constitute a breach of the employment agreement by IRT or a resignation for good reason by named executive, the named executive will not, unless acting pursuant to their employment agreement or with the prior written consent of the board do any of the following:

A “competing business” is defined in each NEO employment agreement as: any entity or enterprise actively engaged in any business or businesses IRT and/or its affiliates are actively engaged in (or are expected to be actively engaged in within twelve months) at the time of termination.  The phrase “substantial business activity” in each NEO employment agreement means that IRT, and/or its affiliates (i) has a business office, (ii) owns, services or manages real estate, or (iii) has a recorded and unsatisfied mortgage or other lien upon real estate or personal property.

Each NEO employment agreement provides that each named executive will disclose defined intellectual property rights, whether patentable or not, which the named executive has conceived, made or developed, solely or jointly with others, while employed by IRT and assign them to IRT.  Each NEO employment agreement provides that each named executive will not disclose any defined confidential information to any person (except as such named executive’s duties as an officer of IRT may require or as required by law or in a judicial or administrative proceeding) without the prior written authorization of the board. Each NEO employment agreement provides that each named executive will not at any time make to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning IRT or its businesses, or any of its employees, officers, and existing and prospective customers, suppliers, investors and other associated third parties.  Each NEO employment agreement provides that IRT

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will not authorize the making, publishing or communicating of, nor will the board or any executive officers of IRT at any time make to any person or entity or in any public forum any defamatory or disparaging remarks, comments or statements concerning the named executive.

Parachute Payments.  Each NEO employment agreement provides that the named executive shall bear all expense of, and be solely responsible for, all federal, state, local or foreign taxes due with respect to any amount payable to or other benefit receivable by the named executive under their NEO employment agreement, including, without limitation, any excise tax imposed by Section 4999 of the IRC; provided, however, that any such amount or benefit deemed to be a “parachute payment” (as defined in Section 280G of the IRC) alone or when added to any other amount payable or paid to or other benefit receivable or received by the named executive which is deemed to constitute a parachute payment (whether or not under an existing plan, arrangement or other agreement), and would result in the imposition on the named executive of an excise tax under Section 4999 of the IRC (all such amounts and benefits being referred to as total payments), shall be reduced to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the IRC but only if, by reason of such reduction, the net after-tax benefit received by the named executive shall exceed the net after-tax benefit received by the named executive if no such reduction was made.  Net after-tax benefit is defined as (i) the total of all payments and the value of all benefits which the named executive receives or is then entitled to receive from IRT that would constitute parachute payments, less (ii) the amount of all federal, state and local income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to the named executive (based on the rate in effect for such year as set forth in the IRC as in effect at the time of the first payment of the foregoing) and the amount of applicable employment taxes, less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in (i) above by Section 4999 of the IRC.

Section 409A.  Each NEO employment agreement provides that it is intended to comply with the requirements of Section 409A of the IRC, to the extent applicable, and the NEO employment agreement will be interpreted to avoid any penalty sanctions under Section 409A of the IRC. Accordingly, each NEO employment agreement provides that all of its provisions will be construed and interpreted to comply with Section 409A and, if necessary, any such provision shall be deemed amended to comply with Section 409A of the IRC and regulations thereunder. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A of the IRC, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. For purposes of Section 409A of the IRC, each payment made under the NEO employment agreement shall be treated as a separate payment. In no event may the named executive, directly or indirectly, designate the calendar year of payment. The named executive will be deemed to have a termination of employment for purposes of determining the timing of any payments or benefits hereunder that are classified as deferred compensation only upon a “separation from service” within the meaning of Section 409A of the IRC.

Each NEO employment agreement provides that if on the date of the named executive’s termination of employment, the named executive is a “specified employee” (as such term is defined in Section 409A(a)(2)(B)(i) of the IRC and its corresponding regulations) as determined by the board (or its delegate) in its sole discretion in accordance with its “specified employee” determination policy, then all cash severance payments payable to the named executive under the NEO employment agreement that are deemed as deferred compensation subject to the requirements of Section 409A of the IRC shall be postponed for a period of six months following the named executive’s “separation from service” with IRT (or any successor thereto). The postponed amounts shall be paid to the named executive in a lump sum on the date that is six (6) months and one (1) day following the named executive’s “separation from service” with IRT (or any successor thereto). If the named executive dies during such six-month period and prior to payment of the postponed cash amounts hereunder, the amounts delayed on account of Section 409A of the IRC shall be paid to the personal representative of the named executive’s estate on the sixtieth (60th) day after the named executive’s death. If any of the cash payments payable pursuant to the NEO employment agreement are delayed due to the requirements of Section 409A of the IRC, there shall be added to such payments interest during the deferral period at an annualized rate of interest equal to the prime rate as reported in the Wall Street Journal (or, if unavailable, a comparable source) at the relevant time.

All reimbursements provided under the NEO employment agreement shall be made or provided in accordance with the requirements of Section 409A of the IRC, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the named executive’s lifetime (or during a shorter period of time specified in the NEO employment agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit.

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Outstanding Equity Awards at 20162017 Fiscal Year-End

The following table provides information on the holdings of outstanding equity awards by the named executives at December 31, 2016.2017. These awards are comprised of PSUs, SARs and restricted common stock awards. Each award is shown separately for each named executive by grant date.