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 ☐
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☐ | Preliminary Proxy Statement |
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☐ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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☒ | Definitive Proxy Statement |
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☐ | Definitive Additional Materials |
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☐ | Soliciting Material under §240.14a-12 |
INDEPENDENCE REALTY TRUST, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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INDEPENDENCE REALTY TRUST, INC.
Two Liberty Place
50 S. 16th Street, Suite 3575
Philadelphia, PA 19102
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 17, 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 Two Liberty Place, 50 S. 16th Street, Third Floor, Philadelphia, PA 19102, on Thursday, May 17, 2018, at 9:00 A.M., Philadelphia time, for the following purposes:
1. To elect seven directors to serve until the next annual meeting of stockholders in 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, 2018.
3. 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 30, 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.
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.
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NOTICE OF 2021 ANNUAL MEETING |
OF SHAREHOLDERS
YOUR VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU ATTEND THE ANNUAL MEETING IN PERSON, WE URGE YOU TO VOTE AS SOON AS POSSIBLE. INSTRUCTIONS ON HOW TO VOTE ARE CONTAINED IN THE PROXY STATEMENT.
ITEMS OF BUSINESS | Wednesday, May 12, 2021 RECORD DATE March 25, 2021. Only stockholders of record at the close of business on the record date are entitled to notice of, and to vote at, the annual meeting or any adjournment or postponement thereof. HOW TO CAST YOUR VOTE | ||
1. The election of seven persons to our Board of Directors, each to serve for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified. 2. The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for calendar year 2021. 3. An advisory, non-binding resolution on our executive compensation. 4. Such other business as may properly come before the annual meeting and any adjournment or postponement thereof. By order of the Board of Directors, Jessica K. Norman March 31, 2021 | |||
BY INTERNET www.voteproxy.com BY MAIL Sign, date and mail your proxy card IN PERSON Vote in person at the Annual Meeting | |||
If you are a BENEFICIAL SHAREHOLDER of IRT common stock, you should follow any instructions provided by your bank, broker or other nominee. | |||
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 12, 2021 This notice of annual meeting, proxy statement, form of proxy and our 2020 annual report to stockholders are available at www.proxydocs.com/IRT. |
Important Notice Regarding Internet Availability of Proxy Materials We will send a full set of proxy materials or a Notice of Internet Availability of Proxy Materials (the “Notice of Internet Availability”) on or about March 31, 2021, and provide access to our proxy materials over the Internet, beginning on March 31, 2021, for the holders of record and beneficial owners of our shares of common stock as of the close of business on the record date. The Notice of Internet Availability instructs you on how to access and review the Proxy Statement and our 2020 annual report. The Notice of Internet Availability also instructs you on how you may authorize a proxy to vote your shares over the Internet and provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in e-delivery. If you received your annual meeting materials via email, the email contains voting instructions and links to our annual report and proxy statement on the Internet. |
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April 2, 2018
Independence Realty Trust, Inc.
Proxy Statement
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| www.irtliving.com. We encourage you to check this website prior to the meeting if you plan to participate. |
INDEPENDENCE REALTY TRUST, INC.Table of Contents
Two Liberty Place
50 S. 16th Street, Suite 3575
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Director Nominations and Stockholder Proposals Not Submitted Pursuant to Rule 14a-8 | 59 |
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APPENDIX A RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURES | A |
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Philadelphia, PA 19102
2021 Proxy Statement | 2 |
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
GENERAL
Introduction
INFORMATION ABOUT THE MEETING AND VOTING
Our Board of Directors is soliciting your vote for:
The 2018 election of seven persons to our Board of Directors, each to serve for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified. Each of Independence Realty Trust, Inc., orthe seven individuals nominated for election is currently serving on ourBoard.
The ratification of the appointment of KPMG LLP as our independent registeredpublic accounting firm for calendar year2021.
Our Board of Directors is also requesting you to cast an advisory, non-binding vote on:
Our executivecompensation.
If any other matter should be properly presented at the annual meeting will be held on Thursday, May 17, 2018, at 9:00 A.M., Philadelphia time, at Two Liberty Place, 50 S. 16th Street, Third Floor, Philadelphia, PA 19102,or any adjournment or postponement of the annual meeting for action by the purposes set forthstockholders, the persons named in the accompanying notice. Only stockholdersproxy card will vote the proxy in accordance with their discretion on such matter.
What are the Board’s Recommendations?
Our Board recommends that you vote FOR the election of record at the close of business on March 30, 2018 will be entitled to notice of and to vote at the annual meeting. Unless we have indicated otherwise, or the context otherwise requires, referencesseven nominees identified in this proxy statement, with each to “IRT,” “we,” “us,” and “our” or similar terms are to Independence Realty Trust, Inc. and its subsidiaries. If you wish to attendserve as a director for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified.
Our Board recommends that you vote in person,FOR the ratification of the appointment of KPMG LLP as our independent registered public accounting firm for calendar year 2021.
Our Board recommends that you may contact Investor Relations at (212) 277-4322 for directions.vote FOR the advisory, non-binding resolution on our executive compensation.
This proxy statement is furnished in connection with the solicitation by the board of directors of IRT, or the board, of proxies from holdersHolders 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.
In 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 stockholdershares, 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 copiesas of the proxy materials unless they request them. Instead, commencing on or about April 3, 2018, a Notice of Internet Availability of Proxy Materials (the “Notice”) will be sent to our stockholders, which 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 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 30, 2018,25, 2021 are entitled to notice of, and to vote at, the annual meeting. Common shares may be voted only if the stockholder is present in person or is represented by proxy at the annual meeting. As of the record date, will be102,037,422 common shares were issued and outstanding and entitled to vote. As of the record date, 86,974,597 shares of ourEach common stock were outstanding. Each holdershare is entitled to one vote per share on each matter of business properly brought beforeto be voted on at the annual meeting. Stockholders do not have cumulative voting rights. IRT has an authorized capitalization
The holders 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 30, 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 asa majority of the date IROP receives contributor’s notice of its desire to exchange or, at IROP’s option, for the equivalent number ofoutstanding common 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 meetingmust be present 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 ofUnless 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 castis present 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.
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Shares of our common stock represented
meeting, no action may be taken at the annual meeting in person or by proxy but not voted on one or more proposalsexcept the adjournment thereof to a later time. All valid proxies returned will be included in determining the presencedetermination of whether a quorum is present at the meeting. The shares of a quorum for all of the proposals, but will not be considered caststockholder whose ballot on any proposal on which they were not voted. or all proposals is marked as “abstain” will be treated as present for quorum purposes. “Broker non-votes,” as discussed below, will also be treated as present for quorumpurposes.
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“broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner returns a properly executed proxy but does not receivecast a vote on a particular proposal because the broker or nominee does not have discretionary voting power with respect to that item and has not received 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.
owner. Brokers that are member firms of the New York Stock Exchange, or NYSE, and who hold shares of our common stockshares in street name for customers generally may vote their customers’ shares on proposals considered to be “routine” matters under the NYSE rules and may not vote their customers’ shares on proposals that are not considered to be “routine” matters under the NYSE rules if the customers have not furnished voting instructions within a specified period of time prior to the annual meeting. Proposal One, described belowthe election of directors, is not considered to be a “routine” mattersmatter under the NYSE rules. Proposal Two, described belowratification of the appointment of our independent registered public accounting firm, is considered a “routine” matter under the NYSE rules.
Proposal 1. In orderThree, an advisory non-binding resolution on our executive compensation, is not considered to be a “routine” matter under the NYSE rules.
Abstentions are treated as present for quorum purposes, but are not considered to be votes cast.
What Vote is Required to Approve Each Proposal?
Election of Directors. Directors are elected as a director as described in Proposal 1 below, a nominee must receiveby 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 whichmeeting. Any shares not voted (whether by abstention, broker non-vote, or otherwise) will have no impact on the vote. Shares represented by proxies marked “For” will be counted in favor of all nominees, except to the extent the proxy withholds authority to vote for a quorum is present is requiredspecified nominee. Shares represented by proxies marked “Abstain” or withholding authority to approvevote for a specified nominee will not be counted in favor of any such nominee. In the selectionabsence of specific direction, shares represented by a proxy will be voted “For” the election of all nominees.
Ratification of Appointment of Independent Registered Public Accounting Firm. Ratification of the Audit Committee’s appointment of KPMG LLP or KPMG, as our independent registered public accounting firm as described in our discussion of Proposal 2 below.
Proposal 3. For any other matter which may properly come before the annual meeting as described in our discussion of Proposal 3 below,for calendar year 2021 requires the affirmative vote of the holders of at least a majority of theall votes cast aton this proposal. Abstentions and broker non-votes, which are not treated as votes cast, will therefore have no effect on the annual meeting at whichresults of such vote. In the absence of specific direction, shares represented by 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” the ratification.
FORAdvisory Vote on Executive Compensation:. Approval of the advisory, non-binding resolution on our executive compensation requires the affirmative vote of a majority of
2021 Proxy Statement | 4 |
all of the votes cast on this Proposal. Abstentions and broker non-votes, which are not treated as votes cast, will therefore have no effect on the result of such vote. |
Stockholders of Record. If you are a stockholder of record, there are several ways for you to vote your common shares at the meeting:
Voting by Internet. You may vote your shares through the Internet by signing on to the website identified on the proxy card and following the procedures described on the website. Internet voting is available 24 hours a day, and the procedures are designed to authenticate votes cast by using a personal identification number located on the proxy card. The procedures allow you to authorize a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote through the Internet, you should not return your proxy card.
Voting by Mail. If you choose to vote by mail, simply complete the enclosed proxy card, date and sign it, and return it in the postage-paid envelope provided. If you sign your proxy card and return it without marking any voting instructions, your shares will be voted: (1) FOR the election of the directors; and
the approvaleach of the selectionseven nominees identified in this proxy statement, with each to serve as a director for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified; (2) FOR the ratification of the appointment of KPMG LLP as theour independent registered public accounting firm for IRTcalendar year 2020; and (3) FOR the advisory, non-binding resolution on our executive compensation.
In Person Attendance. You may vote your shares in person at the annual meeting. Even if you plan to attend the meeting in person, we recommend that you submit your proxy card or voting instructions or vote by telephone or via the Internet by the applicable deadline so that your vote will be counted if you later decide not to attend the meeting. If you wish to attend the meeting and vote in person, you may contact Investor Relations at (267) 270-4800 for directions.
Beneficial Owners. If you are a stockholder whose shares are held in “street name” (i.e., in the fiscal year ending December 31, 2018.name of a broker or other custodian), you may vote the shares in person at the annual meeting only if you obtain a legal proxy from the broker or other custodian giving you the right to vote the shares. Alternatively, you may have your shares voted at the meeting by following the voting instructions provided to you by your broker or custodian. Although most brokers offer voting by mail, telephone and via the Internet, availability and specific procedures will depend on their voting arrangements. If you do not provide voting instructions to your broker or other custodian, your shares are referred to as “uninstructed shares.” Under NYSE rules, your broker or other custodian does not have discretion to vote uninstructed shares on any of the Proposals other than Proposal 2, ratification of the appointment of our independent registered public accounting firm, because this is a routine matter. See “What is a Broker Non-Vote?”
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Should
How May I Revoke or Change my Vote?
You may revoke your proxy at any matters not described abovetime before it is voted at the annual meeting by any of the following methods:
Submitting a later-dated proxy by mail, over the telephone or through the Internet. Any later-dated proxy must be properly presenteddelivered to our Secretary at the address shown on the cover page of this proxy statement before the closing of the vote at themeeting.
Attending the meeting and voting in person. Your attendance at the meeting will not in and of itself revoke any previously delivered proxy. You must also vote your shares at themeeting.
What Does it Mean if I Receive More Than One Proxy Card?
Some of your shares may be registered differently or in more than one account. You should vote each of your accounts by telephone or the Internet or mail. If you mail proxy cards, please sign, date and return each proxy card to assure that all of your shares are voted. If you hold your shares in registered form and wish to combine your accounts in the future, you should contact our transfer agent, AST Financial, at help@astfinancial.com, phone (800) 937-5449; outside the U.S., phone (718) 921-8300. Combining accounts reduces excess printing and mailing costs, resulting in savings for us that benefit you as a stockholder.
What if I Receive Only One Set of Proxy Materials Although There are Multiple Stockholders at My Address?
If you and other residents at your mailing address own common shares you may have received a notice that your household will receive only one annual report, proxy statement and Notice of Internet Availability of Proxy Materials. If you hold common shares in street name, you may have received this notice from your broker or other custodian and the notice may apply to each company in which you hold shares through that broker or custodian. This practice of sending only one copy of proxy materials is known as “householding.” The reason we do this is to attempt to conserve resources. If you did not respond to a timely notice that you do not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, one copy of our annual report, proxy statement and Notice of Internet Availability of Proxy Materials has been sent to your address. You may revoke your consent to householding at any time by sending your name, the name of your brokerage firm, and your account number to AST, Householding Department, 6201 15th Avenue, Brooklyn, NY 11219, or by calling telephone number (800) 937-5449. The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if you did not receive an individual copy of this proxy statement, our annual report and Notice of Internet Availability of Proxy Materials, we will send a copy to you, free of charge, if you address your request to Independence Realty Trust, Inc., 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103, Attention: Jessica K. Norman, Secretary, or by calling Ms. Norman at (267) 270-4800. If you are receiving multiple copies of our annual report, proxy statement and Notice of Internet Availability of Proxy Materials, you may request householding by contacting Ms. Norman in the same manner.
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How Can I Access the Proxy Materials Electronically?
This proxy statement and our 2020 annual report are available at the following website: www.proxydocs.com/IRT.
Will I Receive a Copy of the Annual Report and Form 10-K?
We have furnished our 2020 annual report with this proxy statement. The 2020 annual report includes our audited financial statements, along with other financial information about us. Our 2020 annual report is not part of the proxy solicitation materials. You may obtain, free of charge, a copy of our Annual Report on Form 10-K for our fiscal year ended December 31, 2020 by: (1) accessing our Internet site at www.irtliving.com and clicking on the “Investor Relations” link; (2) writing to our Secretary, Jessica K. Norman, at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103; or (3) calling Ms. Norman at (267) 270-4800. You may also obtain a copy of our Annual Report on Form 10-K and other periodic and current reports that we file with, or furnish to, the Securities and Exchange Commission (“SEC”) from the SEC’s EDGAR database at www.sec.gov.
Who is Soliciting My Vote and Who Bears the Expenses of the Proxy Solicitation?
We are soliciting proxies and will bear the cost of the solicitations. 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 namedfor their reasonable out-of-pocket expenses in handling proxy materials for beneficial owners of our common shares. We have retained D.F. King for a fee of $8,500, plus reasonable out of pocket expenses, to aid in the solicitation of proxies from our stockholders.
How Do I Submit a Stockholder Proposal for Next Year’s Annual Meeting?
Stockholder proposals may be submitted for inclusion in the proxy will votestatement for our 2022 annual meeting of stockholders in accordance with their judgment. Therules of the SEC. See “Stockholder Proposals and Director Nominations — Stockholder Proposals Submitted Pursuant to Rule 14a-8” later in this proxy authorizes these persons,statement. Any stockholder who wishes to propose any business at the 2022 annual meeting, other than for inclusion in their discretion,our proxy statement pursuant to vote upon such matters as may properlyRule 14a-8, must provide timely notice and satisfy the other requirements in our Bylaws. Proposals should be brought before the meetingdelivered or any adjournment, postponement or continuation thereof.mailed to our Secretary, Jessica K. Norman, at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103. See “Stockholder Proposals and Director Nominations — Director Nominations and Stockholder Proposals not Submitted pursuant to Rule 14a-8” later in this proxy statement.
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This summary highlights selected information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.
All references in this proxy statement to “IRT,” “we,” “us,” “our,” or the “Company” shall refer to Independence Realty Trust, Inc. and its subsidiaries.
VOTING AT the 2021 ANNUAL MEETING OF STOCKHOLDERS
IRT’s 2021 annual meeting of stockholders will be held on Wednesday, May 12, 2021, at 9:00 a.m. (local time) at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103. Only holders of record of our common stock at the close of business on March 25, 2021 are entitled to notice of, and to vote at, the annual meeting and any adjournment or postponement thereof. Our Board of Directors knows of no other business that will be presented for consideration | at the annual meeting. If any other matter should be properly presented at the annual meeting or any adjournment or postponement of the annual meeting for action by the stockholders, the persons named in the proxy card will vote the proxy in accordance with their discretion on such matter. On or about March 31, 2021, we mailed a Notice of Internet Availability of Proxy Materials to stockholders. This proxy statement and the form of proxy are first being furnished to stockholders on or about March 31, 2021. |
VOTING MATTERS
Items of Business | Our Board’s Recommendation | Page Reference | |
1 | The election of seven persons to our Board of Directors, each to serve for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified. | ✓ FOR | 13 |
2 | The ratification of the appointment of KPMG LLP as our independent registered public accounting firm for calendar year 2021. | ✓ FOR | 29 |
3 | An advisory, non-binding resolution on our executive compensation. | ✓ FOR | 57 |
Shareholders will also consider any other business as may properly come before the annual meeting and any adjournment or postponement thereof. | |||
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2020 BUSINESS HIGHLIGHTS
IRT is a real estate investment trust that owns and operates multifamily apartment properties across non-gateway U.S. markets, including Atlanta, Dallas, Louisville, Memphis, Raleigh and Tampa. 2020 was a year of unprecedented challenges as the world faced the global COVID-19 pandemic which threatened our health and financial stability. Under the direction of executive management, we successfully navigated the unexpected challenges brought on by the global pandemic while continuing to make advancements on our long-term strategic plan. We enacted a number of changes in operating procedures which prioritized the well being of our associates and residents. We also focused on maintaining occupancy and strengthening our balance sheet, which allowed us to deliver strong full year results to our shareholders*. | |
We successfully executed on key priorities in 2020 to support our residents and employees, | |
2020 FINANCIAL HIGHLIGHTS: | ➢Produced earnings per diluted share of $0.16. ➢Produced core funds from operations (“CFFO”) per share of $0.80*. ➢Declared dividends of $0.54 per common share. ➢Generated sector leading same-store NOI growth of 3.1%*. |
PANDEMIC | ➢Developed additional operating procedures to enhance safety and cleaning protocols in our communities in response to the pandemic. ➢Pivoted to a remote-work environment in our corporate offices. ➢Assisted residents impacted by COVID-19 by waiving fees, penalties and interest, and restructuring rent obligations and deferring rental payments. ➢Launched virtual lease tours and leveraged on-line leasing and paperless workflows to maintain physical distancing at our communities. |
CAPITAL MARKETS: | We issued 10,350,000 shares of common stock under forward sale agreements at a price of $14.688, net of underwriting commissions and discounts. We received proceeds of approximately $148.8 million upon physical settlement of the forward sale agreement. These proceeds were used to fund acquisitions, to reduce outstanding borrowings on our line of credit and to strengthen our balance sheet overall. |
RESPONSIBLE CAPITAL MANAGEMENT: | Following the onset of the COVID-19 pandemic we took immediate action to safeguard our business, including implementing temporary cost cutting measures until stability returned in the broader economic environment. As a result of our quick and decisive actions to mitigate the impact of COVID-19, including having a strong balance sheet and driving occupancy and collections, we were able to reduce our leverage and deliver strong results during 2020. |
* Please see “Compensation Discussion and Analysis” later in this proxy statement and Appendix A to this proxy statement for a discussion of non-GAAP financial measures and reconciliations to the most directly comparable GAAP financialmeasures.
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We made advancements in our value add and capital recycling programs, including adding to our portfolio of communities in markets that have performed favorably throughout various cycles. | |
VALUE-ADD INITIATIVE: | As part of our initiative to upgrade units at selected communities, we completed renovations and upgrades at 3,719 units during 2020. In response to the COVID-19 pandemic, we temporarily paused projects at a number of our value add communities. Many of those projects resumed renovation efforts during 2020 with the remaining six properties, encompassing 1,864 units, expected to commence renovations during 2021. Our renovations provide our residents with a better place to live by improving the unit interiors and upgrading common areas with new and desirable amenities. Our renovations benefit our stockholders by growing NOI, reducing capital expenses in the long-term, and increasing our net asset value per share. |
PORTFOLIO | During 2020, we continued our capital recycling initiative aimed at disposing of assets in markets where we lack scale and acquiring assets in markets with strong fundamentals. As part of this capital recycling initiative, we sold three properties for $59.7 million, in the aggregate, generating net cash proceeds of $58.4 million, in the aggregate, after costs, and we acquired two properties for $145.2 million which expanded our footprint in Huntsville, Alabama and Dallas, TX. At December 31, 2020, we owned and operated 56 multifamily apartment communities that contain 15,667 units in 12 states. |
We are well-positioned to further grow and strengthen our business for near and long-term success. |
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We are dedicated to establishing and maintaining good corporate governance standards in order to serve the interests of our stockholders and better align the interests of directors and management with those of our shareholder. The following are key attributes of our governance framework: | ||
➢6 of 7 Director Nominees are Independent ➢Annual Election of Directors ➢Lead Independent Director ➢Independent Audit, Compensation, and Nominating and Governance Committees ➢Regular Executive Sessions of Independent Directors ➢Risk Oversight by Board and Committees ➢Authority for Board to retain outside advisors ➢Annual Board Self-Assessment Process ➢Ongoing Board Refreshment Process | ➢Regular Succession Planning ➢Active Shareholder Engagement ➢No Shareholder Rights Plan ➢Internal Disclosure Committee for Financial Reporting ➢Share Ownership Guidelines for Directors and Certain Executive Officers ➢Prohibition against Hedging of Company shares ➢Shareholder ability to amend Bylaws ➢Executive Compensation driven by Objective Pay for Performance Philosophy |
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We seek to adopt policies and enact practices which are sustainable and socially responsible. The following are initiatives we have undertaken which serve to reduce our impact on the environment and increase our contribution to society: | |
PROTECTING OUR EARTH: | ☑ REDUCE CONSUMPTION by optimizing lighting, electronic usage and thermal settings at every leasing office in the portfolio as well as our corporate offices, opting to go paperless whenever possible. ☑ CONSERVE WATER by upgrading plumbing fixtures, and planting native landscape. ☑ REDUCE GREENHOUSE GAS EMISSIONS by implementing LED lighting retrofits and replacing outdated appliances with more energy efficient models. ☑ SUPPORT CARBON REDUCTION through a partnership with One Tree Planted to support reforestation projects in the US. |
CARING FOR OUR EMPLOYEES: | ☑ PROTECT ASSOCIATES during the COVID-19 pandemic by providing personal protective equipment and permitting remote work. ☑ ENHANCE DIVERSITY & INCLUSIONthrough training, appreciation initiatives and associate committees. ☑ PROMOTE PAY EQUITY through fair, equal and non-discriminatory compensation practices. ☑ EDUCATE ASSOCIATES by providing robust training and financial assistance for certifications and continued education. ☑ SURVEY ASSOCIATES to identify employee needs and implement changes to foster a positive work environment. ☑ SUPPORT ASSOCIATES with comprehensive benefits packages including medical, vision, dental, 401(k) & paid time off. |
SERVING OUR RESIDENTS: | ☑ SURVEY OUR RESIDENTS regularly and tie feedback to compensation for our property management teams. ☑ UPGRADE PROPERTIES with new, desirable amenities to enhance the resident living experience. ☑ ENGAGE WITH OUR RESIDENTS through regularly hosted community events. ☑ ASSIST OUR RESIDENTS with deferred rent and payment plans to those affected by the COVID-19 pandemic. |
SUPPORTING OUR COMMUNITIES: | ☑ FIGHT HOMELESSNESS by supporting charities which seek to end poverty and homelessness. ☑ ENCOURAGE ETHICAL CONDUCT by maintaining a Code of Ethics, a Vendor Code of Conduct & a Whistleblower Policy. |
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EVOLUTION OF OUR CORPORATE SUSTAINABILITY PROGRAM
We are aligned with our Board in our committment to corporate social responsibility and good governance, as evidenced by our concerted efforts over recent years to enact changes to increase transparency and adopt practices which are in the best interest of all stakeholders. The following are some initiatives taken over recent years by us and our board to bolster our Environmental, Social and Governance (“ESG”) program and enhance disclosure to our key stakeholders:
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PROPOSAL 1. ELECTION OF DIRECTORS
Our by-laws provide thatbusiness and affairs are managed under the number of directors shall be fixed by resolutiondirection of the board, provided that there shall never be less thanBoard of Directors. Our Board currently consists of seven directors, all of whom have been nominated for election at the minimum number required by Maryland law, nor more than 15. The board has fixed the number of directors at seven. All directors are electedannual meeting, with each to serve for a term expiring at the next annual meeting of one yearstockholders and until his or until their successors areher successor is duly elected and qualified.
In selecting nominees, our Board and its Nominating and Governance Committee, which we refer to as our Nominating Committee, assess the independence, character and acumen of candidates and endeavor to establish areas of core competency of the Board, including industry knowledge and experience; management, accounting and finance expertise; and demonstrated business judgment, leadership and strategic vision. Our Board values diversity of backgrounds, experience, perspectives and leadership in different fields when identifying nominees.
The board,Board, upon the recommendation of its nominating and governance committee, or the nominating committee,Nominating Committee, has nominated each of Scott F. Schaeffer, William C. Dunkelberg, Ph.D., Richard D. Gebert, Melinda H. McClure, Mack D. Pridgen III, Richard H. Ross, and DeForest B. Soaries, Jr., D.Min. and Lisa Washington for election at the annual meeting to serve for a term to expireexpiring at the 2019 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 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 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. Prior to his position as the chief executive officer of RAIT, Mr. Schaeffer held various other executive positions at RAIT from September 2000. Mr. Schaeffer resigned from RAIT when IRT completed transactions to internalize our management and separate from RAIT in December 2016, which we refer to 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 board of directors, Mr. Schaeffer served in several senior management positions at Resource America from 1995 to 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 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 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.
Richard D. Gebert, age 60, has served as one of our independent directors since October 2017. He has served as a board and audit committee member of The Association of Corporate Growth (ACG Global), a membership organization focused on middle market growth since September 1, 2016. Prior to that from 1995 to July 2016, he was an audit partner of Grant Thornton LLP, a national accounting firm. In addition to serving as an audit partner with Grant Thornton LLP, Mr. Gebert held the following additional roles at Grant Thornton LLP: (i) member of the Senior 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 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) and the Georgia Society of Certified Public Accountants. Mr. Gebert is a certified public accountant, and he holds a Bachelor of Business Administration from Temple University. Mr. Gebert was selected to serve on our board because of his deep expertise in accounting and financial services.
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 in the asset management, financial services, and real estate industries.
Mack D. Pridgen III, age 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 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 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.
Information Concerning Our Board of Directors, Committees and Governance
Corporate Governance Profile
Our shares of common stock are listed on the NYSE under the symbol “IRT” and we are subject to the NYSE’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 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 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 to represent IRT’s interests.
We currently have seven directors, five of whom are independent directors under standards established by the SEC and the NYSE. Our independent directors are Dr. Dunkelberg, Mr. 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 next2022 annual meeting of stockholders or (if longer)and until his or her successor is duly elected and qualifies.qualified. We believe that each of our director nominees has the specific qualifications, attributes, skills and experience necessary to serve as an effective director on our Board, as indicated directly below the biographical summaries of each of them.
We have no reason to believe that any of the nominees will be unable or unwilling to serve if elected. However, if any nominee should become unable for any reason or unwilling for good cause to serve, then proxies may be voted for another person nominated as a substitute by the Board, or the Board may reduce the number of directors.
The Board unanimously recommends that stockholders vote “FOR” the election of each of the nominees named in this Proposal 1 to serve as a director for a term expiring at the 2022 annual meeting of stockholders and until his or her successor is duly elected and qualified.
The Board believes that experience or expertise in the following areas is particularly relevant to IRT’s business model and should be possessed by one or more members of the Board. These factors, along with others, were considered in selecting the nominees for election. Collectively, our nominees standing for election possess the following skills and expertise:
CORPORATE GOVERNANCE | RISK OVERSIGHT | ||
COMMERCIAL REAL ESTATE | BUSINESS ADMINISTRATION | ||
SUSTAINABILITY & CORPORATE RESPONSIBILITY | CAPITAL ALLOCATIONS | ||
FINANCIAL LITERACY | PRIVACY/TECHNOLOGY |
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The Board believes that diversity of backgrounds, experience, perspectives and leadership in different fields, along with ongoing board refreshment, is important to ensure the broadest range of ideas and perspectives are contributed to Board discussions and to represent our associates, residents and investors. Moreover, in furtherance of its commitment to a policy of inclusiveness and to pursuit of diversity, our Board amended our Corporate Governance Guidelines in February 2021 to ensure that our Nominating and Governance Committee will include, and will have any search firm it engages include, racially/ethnically and gender diverse candidates in the initial pool from which the Nominating and Governance Committee selects director candidates and will require that any firm it may engage for any external search for a chief executive officer candidate to include racially/ethnically and gender diverse candidates in the initial pool. Set forth below is a snapshot of the composition of our Board of Directors immediately following the Annual Meeting if the seven individuals nominated for election at the annual meeting are re-elected.
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Set forth below are biographical summaries of the individuals nominated for election at the annual meeting.
SCOTT F. SCHAEFFER | |
Chair of the Director since: January 2011 Age: 58 | Mr. Schaeffer has served as the Chair 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 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 chair from December 2010 to October 2016. Prior to his position as the chief executive officer of RAIT, Mr. Schaeffer held various other executive positions at RAIT from September 2000. Mr. Schaeffer resigned from RAIT when we completed transactions to internalize our management and separate from RAIT in December 2016, which we refer to as our management internalization. Mr. Schaeffer served as the vice chair 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 board of directors, Mr. Schaeffer served in several senior management positions at Resource America from 1995 to 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 currently serves as a National Trustee of the Boys and Girls Club of America, a position he has held since 2018. Mr. Schaeffer holds a Bachelor of Science in Commerce from Rider University in Lawrenceville, New Jersey. |
Key Attributes, Experiences and Skills: Mr. Schaeffer was selected to serve on our Board primarily because of his extensive experience as a chief executive officer of a public REIT and his lengthy career in real estate. Mr. Schaeffer’s position as our Chief Executive Officer, with his detailed knowledge of our business, and his ability to drive and oversee our business strategy, coupled with his communications skills and ability to foster diverse perspectives, make him a highly effective executive Chair. | |
RICHARD D. GEBERT | |
Independent Director Committees: •Audit (Chair), •Nominating & Director since: October 2017 Age: 63 | Mr. Gebert has served as one of our independent directors since October 2017. He has served as a board and audit committee member of The Association of Corporate Growth (ACG Global), a membership organization focused on middle market growth from September 2016 to October 2019. Prior to that from 1995 to July 2016, he was an audit partner of Grant Thornton LLP, a national accounting firm. In addition to serving as an audit partner with Grant Thornton LLP, Mr. Gebert held the following additional roles at Grant Thornton LLP: (i) member of the Senior 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 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. While in practice, Mr. Gebert was a member of the American Institute of Certified Public Accountants (AICPA), the Pennsylvania Institute of Certified Public Accountants (PICPA), and the Georgia Society of Certified Public Accountants. Mr. Gebert was a certified public accountant, and he holds a Bachelor of Business Administration from Temple University. |
Key Attributes, Experiences and Skills: Mr. Gebert was selected to serve on our Board because of his extensive experience and expertise in financial reporting, accounting and controls; his deep understanding of risk management and finance; and his involvement in executive leadership. |
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WILLIAM C. DUNKELBERG, Ph.D. | |
Independent Director Committees: Audit Director since: February 2011 Age: 78 | Dr. Dunkelberg has served as one of our independent directors since February 2011. Dr. Dunkelberg served as the chair of the board of directors of Liberty Bell Bank, a publicly-traded commercial bank chartered in New Jersey, from July 2005 until 2018, and as member of the audit committee from 2003. Dr. Dunkelberg serves as a Professor Emeritus in the College of Liberal Arts at Temple University in Philadelphia 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 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. |
Key Attributes, Experiences and Skills: Dr. Dunkelberg was selected to serve on our Board primarily because of his expertise in economics, banking and capital markets, and his experience as a director of both public and private companies. | |
LISA WASHINGTON | |
Independent Director since: January 2021 Age: 53 | Lisa Washington has served as one of our independent directors since January 2021. Ms. Washington is Chief Legal Officer (“CLO”) and a Senior Vice President of WSFS Financial Corporation (NASDAQ: WSFS), the financial services holding company of Wilmington Savings Fund Society, a position which she has held since September 2019. In addition, Ms. Washington serves as Chair of the Board of JEVS Human Services, Inc., a not-for-profit social service organization, and is also a Board Member and Secretary of the Rosenbach Museum & Library in Philadelphia. From July 2018 to September 2019, Ms. Washington served as a legal advisor and consultant through Washington Consulting, LLC to Atlas Energy Group, LLC, an energy exploration and production company. From February 2012 until July 2018, Ms. Washington served as the CLO and Secretary of Atlas Energy Group, LLC. Ms. Washington served as CLO and Secretary at the general partner of Atlas Energy, L.P., from January 2006 until February 2015. From September 2016 to July 2018, she served as the Vice President, CLO and Secretary of Titan Energy, LLC, a publicly traded exploration and production company, and before that was Vice President, CLO and Secretary of Titan’s predecessor, Atlas Resource Partners, L.P. Ms. Washington also held the same titles at the general partner of Atlas Pipeline Partners, L.P., a publicly-traded master limited partnership that provided natural gas gathering and processing services from 2005 until February 2015. Ms. Washington served as CLO and Secretary of the general partner of Atlas Growth Partners, L.P. since its inception in 2013 until July 2018. From 1999 to 2005, Ms. Washington was an attorney in the business department of the law firm of Blank Rome LLP. Ms. Washington holds a J.D. from the University of Pennsylvania Law School, an M.B.A. in Public Policy and Finance from The Wharton School, and an A.B. in Comparative Literature from Princeton University. |
Key Attributes, Experiences and Skills: Ms. Washington was selected to serve on our Board because of her expertise in corporate governance and risk management for public companies and her extensive experience and involvement in executive leadership. |
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MELINDA H. McCLURE | |
Lead Independent Committees: Nominating & Compensation Director since: June 2017 Age: 53 Other Public | Ms. McClure has served as one of our independent directors since June 2017. She is Executive Vice President and head of Strategic Planning for Old Dominion National Bank, a community bank headquartered in the Greater Washington region. She was the CEO of VisionBank (in Organization) from February 2018 until August of 2019. 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 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 UnitedBank 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. |
Key Attributes, Experiences and Skills: Ms. McClure was selected to serve on our Board because of her extensive leadership experience in the asset management, financial services, and real estate industries. | |
MACK D. PRIDGEN III | |
Independent Director Committees: •Audit, •Compensation Director since: September 2015 Age: 71 | Mr. Pridgen has served as one of our independent directors since September 2015 when he joined the Board upon the consummation of our acquisition of Trade Street Residential, Inc. (“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 chair 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. |
Key Attributes, Experiences and Skills: Mr. Pridgen was selected to serve on our Board because of his 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. |
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DEFOREST B. SOARIES, JR., D. MIN | |
Independent Director Committees: Compensation (Chair), Nominating & Governance Director since: February 2011 Age: 69 Other Public Ocwen Financial Corporation | Dr. Soaries 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, and serves as a member of the audit committee of the Ocwen board. From 2004 to 2005, he served as the first chair 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. 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. |
Key Attributes, Experiences and Skills: 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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Corporate Governance Documents
Our shares of common stock are listed on the NYSE under the symbol “IRT” and we are subject to the NYSE’s listing standards. We have adopted corporate governance guidelines and charters for our Audit, Compensation and Nominating Committees in compliance with NYSE listing standards. The following key governance documents are available on our website at www.irtliving.com: KEY CORPORATE GOVERNANCE DOCUMENTS | |
• Corporate Governance Guidelines • Audit Committee Charter • Compensation Committee Charter • Nominating and Governance Committee Charter • Clawback Policy | • Stock Ownership Guidelines • Section 16 Reporting Compliance Procedures • Code of Ethics • Whistleblower Policy • Insider Trading Policy |
These documents are also available free of charge by writing to Independence Realty Trust, to our Secretary, Jessica K. Norman, at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103 or by calling Ms. Norman at (267) 270-4800. No information contained on the Company’s website is part of or incorporated into this Proxy Statement. |
Director Independence and Independence Determinations
None of our directors qualifies as independent unless our Board affirmatively determines that the director has no direct or indirect material relationship with us. Our Corporate Governance Guidelines define independence in accordance with the independence standards established by the NYSE and require our Board to review the independence of all directors at least annually. Our Board has affirmatively determined that six of our seven directors are independent under NYSE standards, specifically: Dr. Dunkelberg, Mr. Gebert, Ms. McClure, Mr. Pridgen, Dr. Soaries and Ms. Washington. In making its independence determinations, our Board considered and reviewed all information known to it (including information identified through annual directors’ questionnaires).
Our Board’s leadership structure is designed to promote Board effectiveness and to appropriately allocate authority and responsibility between Board and management. Our Board has no policy in principle with respect to the separation of the offices of chairmanChair and the chief executive officer.Chief Executive Officer. From January 2011 to February 2013, these offices were separated with Mr. Schaeffer serving as Chair. Since February 2013, Mr. Schaeffer has served as both chairmanChair 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 boardChief Executive Officer. Our Board considered Mr. Schaeffer’s significant experience in the industry, with IRT and with RAITall aspects of our business as part of its rationale for deciding to combine the roles. The boardroles of Chair and Chief Executive Officer. Our Board believes that itsour current leadership structure is appropriate at this time because itthe structure enhances Mr. Schaeffer’s ability to provide strong and consistent leadership and a unified voice for IRTus and because the boardour Board believes its governance processes, as reflected in our corporate governance guidelinesCorporate Governance Guidelines and boardBoard committee charters, preserve boardBoard independence by ensuring independent discussion among directors and independent evaluation of, and communication with, members of senior management.
We have structured To further preserve Board independence, our corporate governance inCorporate Governance Guidelines require the independent directors to appoint a manner we believe closely aligns our interests with those of our stockholders. Notable features of our corporate governance structure includeLead Independent Director if the following:
our board of directors is not staggered, with each of our directors subject to annual re-election;
role of the seven persons who serve on our board of directors, five, or approximately 71%, of our directors, have been determined by us to be independent for purposesChair is combined with that of the NYSE’s corporate governance listing standards;
we have opted outChief Executive Officer. Our Lead Independent Director further enhances the Board’s leadership structure and effectiveness by focusing on the Board’s processes and priorities, and facilitating independent oversight of the business combination and control share acquisition statutes in the Maryland General Corporation Law, or the MGCL; and
we do not have a stockholder rights plan.
management. The board held a total of 13 meetings during 2017. The board currently has a standing audit committee, compensation committee and nominating committee. The current directors who serve on these committees,Lead Independent Director promotes open dialogue among the current chairman of these committees and the number of meetings these committees held during 2017 are set forth in the chart below and any changes in the board, each committee’s chairman and membership since the beginning of 2017 are described in the footnotes to the chart below:
Board Member | Audit(1)(2) | Compensation(2)(3) | Nominating(2)(4) |
William C. Dunkelberg, Ph.D | X |
| Chairman |
Melinda H. McClure(6) |
| X | X |
Mack D. Pridgen III | X | X |
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Richard H. Ross |
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DeForest Soaries, Jr., D.Min |
| Chairman | X |
Richard D. Gebert(5) | Chairman |
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Meetings held in 2017 | 11 | 8 | 4 |
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independent and non-management directors during Board meetings, at executive sessions without the total number of meetingspresence of the board held during the period for which the director had been a director;Chief Executive Officer, and between Board meetings.
Non-Management Directors
Our corporate governance guidelines provide that directors are invited and encouraged to attendBoard holds regular executive sessions of non-management directors. In addition, our annual meeting of stockholders. All of our directors serving at the time, except for Mr. Pridgen, attended our 2017 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 guidelinesCorporate Governance Guidelines provide that the director who presidesLead Independent Director shall preside at these meetings.
Our Corporate Governance Guidelines provide that when the positions of Chair and Chief Executive Officer are combined, the independent directors shall annually appoint an independent director to serve as Lead Independent Director for a one-year term and until his or her successor is appointed. The Lead Independent Director will preside at any meeting of the Board at which the Chair is not present, including at executive sessions for independent and non-management directors, at meetings or portions of meetings on topics where the Chair or the Board raises a possible conflict, and when requested by the Chair. The Lead Independent Director may call meetings of the independent and non-management directors or of the Board, at such time and place as he or she determines.
The Lead Independent Director will approve Board meeting agendas and schedules for each Board meeting, and may add agenda items in his or her discretion. The Lead Independent Director will have the opportunity to review, approve and/or revise Board meeting materials for distribution to and consideration by the Board; will facilitate communication between the Chair and Chief Executive Officer and the independent and non-management directors, as appropriate; will be rotated each meeting amongavailable for consultation and communication with stockholders where appropriate; and will perform such other functions as the chairs of the audit committee, compensation committeeBoard may direct.
Communications with our Independent Directors and nominating committee, in the following order: audit committee chairman, compensation committee chairman and nominating committee chairman. Board
Our corporate governance guidelinesCorporate Governance Guidelines provide that any interested parties desiring to communicate with theour independent directors regarding IRT may directly contact such directors by delivering correspondence in care of IRT’s secretaryour Secretary at the address of our principal executive office on the cover page hereof. Stockholdersoffices at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103. In addition, stockholders may send communications to the boardour Board by sending them to IRT’s secretary as well.in care of our Secretary. The secretarySecretary will forward these communications to the chairmanChair of the audit committee,Audit Committee, who will distribute them to the board membersdirectors to whom the communications are addressed.addressed or as the subject matter warrants. If a stockholder prefers to raise concerns in a confidential or anonymous manner, the concern may be sent in care of our Compliance Officer at our principal executive offices.
Limits on Service on Other Boards
In our Corporate Governance Guidelines, our Board recognizes its members benefit from service on the boards of other companies. The Board encourages this service but also believes it is critical that our directors have the opportunity to dedicate sufficient time to their service on IRT’s Board. To this end, our Corporate Governance Guidelines provide that our directors may not serve on more than two other public company boards (excluding the Board) without the Board’s consent. None of our directors currently serve on more than one other public company board.
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Our directors are elected annually. Our Board does not believe it should establish term limits for directors, as it believes term limits have the disadvantage of losing the contribution of directors who have been able to develop, over a period of time, increasing insight into the Company and its operations and, therefore, provide an increasing contribution to the Board as a whole. Instead the Board prefers to rely upon the evaluation procedures described below as the primary method of ensuring each director continues to act in a manner consistent with the best interests of the Company, its stockholders, and the Board.
Our Board as a whole has responsibility for risk oversight, with reviews of certain areas being conducted by the relevant Board committees that report on their deliberations to the Board. The oversight responsibility of the Board and its committees is enabled by management reporting processes that are designed to provide visibility to the Board about the anticipation, identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include, among other things, competitive, economic, operational, financial (accounting, credit, liquidity and tax), legal, regulatory, compliance and reputational risks. Our Board and its committees oversee risks associated with their respective principal areas of focus, as summarized below. Our Audit Committee oversees risks and exposures associated with financial matters, particularly financial reporting, tax (including compliance with REIT rules), accounting, disclosure, internal control over financial reporting, cybersecurity, financial policies, investment guidelines, development and leasing, and credit and liquidity matters. In addition, the Audit Committee oversees the Company’s enterprise risk management practices to ensure that the Company is equipped to anticipate, identify, prioritize, and manage material risks to the Company Our Compensation Committee oversees risks associated with our executive compensation programs and arrangements, including incentive plans. Our Nominating Committee oversees risks associated with leadership, succession planning and talent development; and corporate governance.
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RISK OVERSIGHT RESPONSIBILITIES OF THE BOARD AND ITS COMMITTEES
Board Role in Risk Oversight
We maintain a code of ethics for our directors, officers and employees in compliance with NYSE listing standards and the definition of a “code of ethics” set forth in applicable rules of the Securities and Exchange Commission, or SEC. The board’s role iscode of ethics reflects and reinforces our commitment to oversee IRT’s risk management process. The board oversees risk through: (i) reviewintegrity in the conduct of our business. Any waiver of the code of ethics for executive officers or directors may only be made by a majority vote of the disinterested directors or by the Audit Committee, acting as the Board’s “conflicts of interest” committee; and discussionany waiver will be disclosed promptly as required by law or stock exchange regulation, and, in addition, amendments to or waivers 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 relatingour code of ethics that apply to our business; (ii) required approvalprincipal executive officer, principal financial officer, principal accounting officer, controller and persons performing similar functions and that relate to any matter enumerated in Item 406(b) of Regulation S-K promulgated by the audit committeeSEC will be disclosed on our website at
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www.irtliving.com.
Our Audit Committee has established procedures, set forth in our code of all related party transactions; (iii) reviewethics, for the submission of complaints about our accounting or auditing matters. These procedures include a hotline for the anonymous and discussionconfidential submission of drafts of IRT’s periodic reports toconcerns regarding questionable accounting or auditing matters. Any matters reported through the SEC; and (iv) regular periodic reports from our independent publichotline that involve 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 disclosurefinancial reporting or auditing matters will be reported to the Chair of our Audit Committee. Our current hotline number is (844) 348-1579.
Board and financial reporting.Committee Meetings; Attendance
Our Board held 13 meetings during 2020. Our Board currently has a standing Audit Committee, Compensation Committee and Nominating Committee. Agendas, schedules, and information distributed for meetings of Board committees are the responsibility of the respective Committee Chairs. All directors may request agenda items, additional information, and/or modifications to schedules as they deem appropriate, both for the Board and the committees on which they serve.
The audit committee enhancestable below provides 2020 membership and meeting information for each of these committees:
Board Member | Audit | Compensation | Nominating |
Scott F. Schaeffer* |
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William C. Dunkelberg, Ph.D | X |
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Melinda H. McClure** |
| X | Chair |
Mack D. Pridgen III | X | X |
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DeForest Soaries, Jr., D.Min |
| Chair | X |
Richard D. Gebert | Chair |
| X |
Meetings held in 2020 | 10 | 5 | 5 |
*Chair of the board’s oversightBoard
**Lead Independent Director
In 2020, all of risk management. The audit committee’s role is also onethe then-servicing directors attended at least 75% of oversight, recognizingthe aggregate of the total number of meetings of the Board and meetings held by committees of the Board on which he or she served. Our Corporate Governance Guidelines provide 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 respectour directors are expected 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 oversightattend our annual meeting 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.stockholders. All of our standing committees consist solelythen-serving directors attended our 2020 annual meeting 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.stockholders.
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Our board has established an audit committee consisting of threeAudit Committee
Each member of our Audit Committee is independent directors. See “Information Concerning Our Boardunder NYSE standards and SEC regulations and each member of Directors, Committeesour Audit Committee is financially literate, knowledgeable and Governance-Corporate Governance Profile” above forqualified to review financial statements. The charter of our Audit Committee requires such independence and financial literacy as a description ofcondition to continued membership on the membership of the audit committee since January 1, 2017.Audit Committee. Mr. Gebert is the audit committee chairman andAudit Committee Chair is qualified as an audit“audit committee financial expert,expert” within the meaning of SEC regulations. Our Board reached its conclusion as defined by applicable rules promulgated byto the SECqualifications of Mr. Gebert based on his education and the NYSE corporate governance listing standards. experience in analyzing financial statements of a variety of companies.
Our audit committeeAudit Committee operates pursuant to a written charter adopted by our board. The principal functions ofBoard and reviewed for adequacy annually by the audit committee are oversight related to:
committee.
our accounting and financial reporting processes;
the integrity of our consolidated financial statements and financial reporting process;
our systems of disclosure controls and procedures and internal control over financial reporting;
our compliance with financial, legal and regulatory requirements;
the evaluation of the qualifications, independence and performance of our independent registered public accounting firm;
the performance of our internal audit function;
oversight of compliance with our code of ethics, including the review of related party transactions and the granting of waivers to the code of ethics; and
our overall risk profile, as described in “Board Role in Risk Oversight” above.
THE PRINCIPAL FUNCTIONS OF THE AUDIT COMMITTEE RELATE TO OVERSIGHT OF: • our accounting and the integrity of our consolidated financial statements and financial reporting process; • our systems of disclosure controls and procedures and internal control over financial reporting; • our compliance with financial, legal and regulatory requirements; • the qualifications, independence and performance of our independent registered public accounting firm; • the performance of our internal audit function; • our compliance with our code of ethics, including the review and assessment of related party transactions and the granting of any waivers to the code of ethics; and • risks and exposures as described above under “Risk Oversight.” |
The audit committeeOur 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 committeeAudit Committee also prepares the audit committee report required by SEC regulations to be included in our annual proxy statement. The audit committeeAudit Committee has adopted audit and non-audit services pre-approval guidelines to govern its activities.
guidelines.
Our boardBoard has delegated oversight of compliance with our code of ethics to our audit committee,the Audit Committee, including the review of related party transactions and the granting of waivers to the code of ethics. If the audit committeeAudit 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 regulations.
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, 2017, or the annual report:
The audit committee of the board of directors of IRT, or the audit committee, has reviewed and discussed the audited financial statements to be included in the annual report with IRT’s management;
The audit committee has discussed with IRT’s independent registered public accounting firm, KPMG LLP, or KPMG, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board, or PCAOB;
The audit committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG's communications with the audit committee concerning independence, and has discussed with KPMG the independence of KPMG and satisfied itself as to KPMG’s independence; and
Based on the review and discussions referred to above, the audit committee recommended to the board of directors of IRT that the audited financial statements be included in 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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Our board of directors has established a compensation committee consisting of threeEach member of our Compensation Committee is independent directors. See “Information Concerning Our Boardunder NYSE standards. The charter of Directors, Committees and Governance-Corporate Governance Profile” above forour Compensation Committee requires such independence as a description ofcondition to continued membership on the membership of the compensation committee since January 1, 2017.Compensation Committee. Dr. Soaries is the compensation committee chairman.Compensation Committee Chair. Our compensation committeeCompensation Committee operates pursuant to a written charter adopted by our board. The principal functionsBoard and reviewed for adequacy annually by the committee.
THE PRINCIPAL FUNCTIONS OF THE COMPENSATION COMMITTEE INCLUDE: • reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the compensation of our Chief Executive Officer based on such evaluation; • reviewing and approving the compensation of the Named Executive Officers; • reviewing and approving our executive compensation policies and plans; • administering our incentive compensation equity-based plans, including our Long Term Incentive Plan, or the LTIP; • producing a report on executive compensation to be included in our annual proxy statement; • reviewing and approving compensation for non-employee directors. |
Our Compensation Committee retained Semler Brossy Consulting Group as its consultant for 2020. We describe the role of the compensation committee include:
reviewingCompensation Committee’s consultant in the “Compensation Discussion and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation, evaluating our chief executive officer’s performanceAnalysis – Role of Compensation Consultant” later in light of such goals and objectives and determining and approving the remuneration,this proxy statement.
Each member of our chief executive officer based on such evaluation;
reviewing and approving the compensation of allNominating Committee is independent under NYSE standards. The charter of our other executive officers;
reviewing our executive compensation policies and plans;
implementing and administering the Independence Realty Trust, Inc. Long Term Incentive Plan, or the LTIP, and any other incentive compensation equity-based remuneration plans;
assisting management in complying with our proxy statement and annual report disclosure requirements;
producingNominating Committee requires such independence as a report on executive compensationcondition to be included in our annual proxy statement; and
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.
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. 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 limitcontinued membership 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 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. The compensation committee has assessed the independence of FPL pursuant to the rules prescribed by the SEC and the NYSE and concluded that no conflict of interest existed in 2017 that would prevent FPL from serving as an independent consultant to the compensation committee. During 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. The compensation committee has reviewed these engagements using the factors set forth in NYSE 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, 2017. Dr. DunkelbergCommittee. Ms. McClure is the nominating committee chairman.Nominating Committee Chair. Our nominating committeeNominating Committee operates pursuant to a written charter adopted by our board. The principal functions ofBoard and reviewed for adequacy annually by the nominating committee include:committee.
identifying and recommending to the full board qualified candidates for election as directors and recommending nominees for election as directors at the annual meeting of stockholders;
developing and recommending to the board corporate governance guidelines and implementing and monitoring such guidelines;
reviewing and making recommendations on matters involving the general operation of the board, including board size and composition, and committee composition and structure;
recommending to the board nominees for each committee of the board;
overseeing the board’s evaluation of management.
The nominating committeeNominating Committee uses a variety of methods for identifying and evaluating nominees for director. In recommending director nominees to the board,Board, the nominating committeeNominating 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 committeeNominating Committee assesses the appropriate size of the boardBoard and whether any vacancies on the boardBoard are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the nominating committeeNominating Committee considers whether to fill those
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vacancies and, if applicable, considers various potential director candidates. These candidates are evaluatedat regular or special meetings of the nominating committee,Nominating Committee, and may be considered at any point during the year. The nominating committeeNominating Committee seeks to make its recommendations for director nominees for each annual meeting to the boardBoard by the end of the first quarter eachyear.
The nominating committeeNominating Committee has not adopted specific, minimum qualifications or specific qualities or skills that must be met by a nominating committee-recommendedNominating Committee-recommended nominee. The nominating committeeNominating Committee seeks to ensure that the membership of the boardBoard and each committee of the boardBoard satisfies all relevant listing standard requirements of the NYSE 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 committeeNominating 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.Board.
However, the Board believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the Board and the needs of our business. In 2021, consistent with its overall views with respect to diversity and in order to formalize our practice, the Nominating Committee enhanced our Corporate Governance Guidelines and the Charter of our Nominating Committee by amending such documents to specifically require that diverse candidates, based on ethnicity and gender, be included in the initial pool for any external search for director candidates. In addition, any search firm used for conducting any such searches is required to include such candidates in its initial pool of candidates. The nominating committee does not have a formal policy regardingNominating Committee, in consultation with the considerationBoard, will regularly review the changing needs with respect to the skills and experience 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.Board members.
The nominating committeeNominating 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 committeeNominating Committee considers the attributes of the candidate and the needs of the board,Board, and will review all candidates in the same manner, regardless of the source of the recommendation. The nominating committeeNominating Committee will consider individuals recommended by stockholders for nomination as a director in accordance with the procedures described under “Stockholder Proposals and Director Nominations.”
Board, Committee and Director Evaluations
Recognizing the importance of a rigorous self-evaluation process to allow boards to assess their performance and identify and address any potential gaps in the boardroom, our Board conducts an annual self-assessment of the performance of the Board, its committees and individual directors. The Chair of the Nominating Committee is responsible for leading the evaluation process, which takes place in advance of the annual consideration of director nominees. In the fourth quarter of 2020, the Chair of the Nominating Committee reviewed with the Board results of the most recent self-assessments. This annual evaluation process provides a way to monitor progress in certain areas targeted for improvement from year to year and to identify opportunities to enhance Board and committee effectiveness. The assessments confirm whether the current Board leadership and structure continue to be optimal for us and are an important factor taken into account by the Nominating Committee in making its recommendations to the Board regarding director nominees. As part of the evaluation process, each committee reviews its charter annually.
We believe that strong corporate governance should include regular engagement with our stockholders to enable us to understand and respond to stockholder concerns. Our senior management team, including our Chair
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and Chief Executive Officer and Chief Financial Officer and members of our Investor Relations team, maintain regular contact with a broad base of investors, including through quarterly earnings calls, individual meetings and other channels for communication, to understand their concerns. In 2020, senior management held 132 meetings with institutional investors and research analysts, including, 2 non-deal roadshows and 4 investor conferences.
Corporate and Social Responsibility
We strive to create better places for our residents, neighbors and employees to work and live. We support our employees by investing in training, mentoring and continuing education opportunities, and we promote their health and productivity by providing them and their families with a robust benefits package. We enhance our resident living experience by improving their living environment through robust property management and on-site upgrades, and engaging with our residents through frequent satisfaction surveys and community events. We seek at all times to conduct our business and affairs in accordance with the highest standards of ethical conduct and in compliance with applicable laws, rules and regulations and we expect our partners and vendors to uphold the same standards. We support charities which aim to fight poverty and reduce homelessness.
Environmental and Sustainability Commitments
We are committed to establishing sustainable practices within our office and clubhouse environments and throughout our communities to reduce our impact on the environment and lower operating costs. In order to achieve our commitment, we seek out cost-effective opportunities to reduce our consumption, conserve water and use energy efficiently.
We have adopted stock ownership requirements for our non-employee Directors and our executive officers. The ownership requirements are to be satisfied six years after the later of (i) their election or appointment as a director or executive officer, as applicable, or (ii) April 1, 2018, the date we adopted the requirements. The requirements provide for a minimum beneficial ownership target of the Company’s common shares, as a multiple of the annual cash retainer, in the case of non-employee Directors, and base salary, in the case of executive officers, as follows:
POSITION | MINIMUM SHARE OWNERSHIP |
Non-Employee Directors | 5 times cash retainer |
Chief Executive Officer | 5 times annual salary |
Other Executive Officers | 3 times annual salary |
All non-employee Directors and executive officers are in compliance with these stock ownership guidelines, as they have either met the minimum share ownership requirements or they have not yet reached the date by which such requirements must be satisfied.
We do not consider it appropriate for any of our officers, directors or employees to enter into speculative transactions in our securities that are designed to hedge or offset any decrease in market value of our securities. As the result, we prohibit officers, directors or employees from purchasing puts, calls, options or other derivative securities based on our securities. The policy also prohibits hedging or monetization transactions, such as zero-cost
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collars and forward sale contracts. Officers, directors and employees may also not purchase our securities on margin, borrow against any account in which our securities are held or otherwise pledge our securities.
Our Compensation Committee has adopted a Clawback Policy which applies to our executive officers. Under this policy, if the Company is required to prepare an accounting restatement due to material non-compliance with any financial reporting requirement under applicable securities laws, the Compensation Committee will seek to recover incentive compensation erroneously awarded during the three-year period preceding the publication of the restated financial statement, except to the extent the Committee determines that it would be impracticable, inequitable or otherwise inappropriate under the circumstances to do so. The method of recovery of erroneously awarded compensation will be determined by the Compensation Committee.
We do not have a shareholder rights plan, sometimes referred to as a poison pill. In addition, our Board has by revocable resolution exempted business combinations between us and any other person from the super-majority voting and other restrictions of the Maryland Business Combination Act.
2021 Proxy Statement | 28 |
PROPOSAL 2. APPROVALRATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ApprovalRatification of KPMGthe Selection of Independent Registered Public Accounting Firm
We are asking our stockholders to approve the selection ofOur Audit Committee has appointed KPMG LLP as our independent registered public accounting firm to audit our financial statements for the fiscal year ending December 31, 2018. 2021. KPMG LLP was first engaged as our independent registered public accounting firm in 2014 and has audited our financial statements for calendar year 2014 through and including calendar year 2020.
In selecting KPMG LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2021, our Audit Committee considered a number of factors, including: (i) the professional qualifications of KPMG LLP, the lead audit partner and other key engagement team members; (ii) the performance and independence of KPMG LLP; (iii) the quality of the Audit Committee’s ongoing discussions with KPMG LLP, including the professional resolution of accounting and financial reporting matters with the national office; and (iv) the appropriateness of KPMG LLP’s fees in light of our size and complexity.
Although approvalstockholder ratification of the appointment of KPMG LLP as our independent registered public accounting firm is not required by our bylaws or otherwise, the board is submitting the selection of KPMGour Board has decided to afford our stockholders for approval as athe opportunity to express their opinions on the 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, 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 KPMGthe selection is approved, the audit committeeratified, our 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 theour best interests and those of IRT and our stockholders. If our stockholders do not ratify the appointment, our Audit Committee will take that fact into consideration, together with such other information as it deems relevant, in determining its next selection of an independent registered public accounting firm.
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, 2018.
We expect that representativesRepresentatives of KPMG LLP will be present at the annual meeting. These representativesmeeting and will have the opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.questions from stockholders.
Ratification of the appointment of KPMG LLP as our independent registered public accounting firm requires the affirmative vote of a majority of all votes cast on the matter.
The Board unanimously recommends a vote FOR Proposal 2 to ratify the appointment of KPMG LLP as our independent registered public accounting firm for calendar year 2021.
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.
| 2017 |
|
| 2016 |
| 2020 |
|
| 2019 |
| ||||
Audit Fees(1) | $ | 510,000 |
|
| $ | 450,000 |
| $ | 545,000 |
|
| $ | 555,000 |
|
Audit-Related Fees(2) |
| 275,000 |
|
|
| 135,000 |
|
| 232,250 |
|
|
| 270,000 |
|
Tax Fees(3) |
| 165,000 |
|
|
| 154,336 |
|
| 172,760 |
|
|
| 163,500 |
|
All Other Fees(4) |
| - |
|
|
| - |
| |||||||
Total | $ | 950,000 |
|
| $ | 739,336 |
| $ | 950,010 |
|
| $ | 988,500 |
|
(1) | Audit fees consisted of the aggregate fees billed for professional services rendered by KPMG in connection with its audit of our consolidated financial statements, audit of internal controls relating to Section 404 of the Sarbanes-Oxley Act, and its reviews of the unaudited consolidated interim financial statements that are normally provided in connection with statutory and regulatory filings or engagements for these fiscal years. |
2021 Proxy Statement | 29 |
(2) | Audit-related fees consist of fees to review registration statements and for the issuance of comfortletters associated with the issuance of our commonshares. |
(3) | Tax fees consist of the aggregate fees billed for professional services rendered by KPMG for tax compliance, tax advice and tax planning. |
|
|
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- relatedaudit-related services described above were pre-approved by the audit committeeAudit 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 reviewed and discussed our 2020 audited financial statements with our management; has discussed with KPMG LLP, our independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board, or PCAOB; and has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding KPMG’s communications with the Audit Committee concerning independence, and has discussed with KPMG their independence relative to us. Based on the foregoing review and discussions, the Audit Committee recommended to the Board that the 2020 audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC. This report is made by the undersigned members of the Audit Committee. 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 we specifically incorporates this information by reference, and shall not otherwise be deemed filed under the Securities Act or the Exchange Act. AUDIT COMMITTEE Richard D. Gebert, Chair William C. Dunkelberg Mack D. Pridgen III |
2021 Proxy Statement | 30 |
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.
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentageof shares of our common stock beneficially owned, by each person who, to the knowledge of IRT as of March 15, 2018, is25, 2021, by (i) each person known to us to be the beneficial owner of more than 5% of the outstandingcommon stock; (ii) each of our directors; (iii) each of our Named Executive Officers; and (iv) all directors and executive officers as a group. All percentages have been calculated as of March 25, 2021 and are based upon 102,037,422 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 purposesat the close of computing the percentage ownership of the person or group holdingbusiness on such options or warrants but are not deemed to be outstanding for purposes of computing the percentage ownership of any other person.date (unless otherwise indicated). 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.
Title of Class | Name and Address of Beneficial Owner (1) | Amount and |
| Nature of | Percent |
| ||
Common Stock | BlackRock, Inc. |
| 17,301,397 |
| (2) | 16.99% |
| |
Common Stock | The Vanguard Group, Inc. |
| 10,793,867 |
| (3) | 10.60% |
| |
Common Stock | AllianceBernstein L.P. |
| 6,184,559 |
| (4) | 6.07% |
| |
|
|
|
|
|
|
|
|
|
Common Stock | Directors: |
|
|
|
|
|
|
|
| Scott F. Schaeffer |
| 408,106 |
| (5) | * |
| |
| William C. Dunkelberg |
| 38,391 |
|
| * |
| |
| Melinda H. McClure |
| 19,925 |
|
| * |
| |
| Mack D. Pridgen III |
| 64,977 |
|
| * |
| |
| DeForest B. Soaries, Jr |
| 38,340 |
|
| * |
| |
| Richard D. Gebert |
| 19,925 |
|
| * |
| |
| Lisa Washington |
| - |
|
| * |
| |
|
|
|
|
|
|
|
|
|
| Non-Director Executive Officers: |
|
|
|
|
|
|
|
| James J. Sebra |
| 133,078 |
| (6) | * |
| |
| Farrell M. Ender |
| 154,474 |
| (7) | * |
| |
| Jessica K. Norman |
| 9,342 |
| (8) | * |
| |
| Jason R. Delozier |
| 13,491 |
| (9) | * |
| |
|
|
|
|
|
|
|
|
|
| All directors and executive officers as a group: |
|
|
|
|
|
|
|
| (11 persons) |
| 900,049 |
|
| * |
| |
|
|
|
|
|
|
|
|
|
*Does not exceed 1%
Title of Class | Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class |
|
Common Stock | BlackRock, Inc.(1) | 12,188,828(1) | 14.6% |
|
Common Stock | The Vanguard Group, Inc.(2) | 10,490,771(2) | 12.6% |
|
Common Stock | Vanguard Specialized Funds - Vanguard REIT Index Fund (3) | 5,496,807(3) | 6.6% |
|
Common Stock | AllianceBernstein L.P. (4) | 4,192,666(4) | 5.0% |
|
(1) | Unless otherwise indicated, the business address of each person listed is 1835 Market Street, Philadelphia, Pennsylvania 19103. |
| |
2021 Proxy Statement | 31 |
(3) | Based solely on |
|
|
(4) | Based solely on |
The following tables set forth the number and percentage owned as of March 15, 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.
Title of Class |
| Name of Beneficial Owner |
| Amount and Nature of Beneficial Ownership |
|
|
|
| Percent of Class | |
| Directors: |
|
|
|
|
|
|
|
| |
|
| Scott F. Schaeffer |
|
| 231,343 |
|
| (1 | ) | * |
|
| William C. Dunkelberg |
|
| 17,466 |
|
|
|
| * |
|
| Melinda H. McClure |
|
| - |
|
|
|
| * |
|
| Mack D. Pridgen III |
|
| 45,052 |
|
|
|
| * |
|
| Richard H. Ross |
|
| 34,821 |
|
|
|
| * |
|
| DeForest B. Soaries, Jr |
|
| 17,966 |
|
|
|
| * |
|
| Richard D. Gebert |
|
| - |
|
|
|
| * |
|
|
|
|
|
|
|
|
|
|
|
|
| Non-Director Executive Officers: |
|
|
|
|
|
|
|
|
|
| James J. Sebra |
|
| 69,869 |
|
| (2 | ) | * |
|
| Farrell M. Ender |
|
| 102,245 |
|
| (3 | ) | * |
|
|
|
|
|
|
|
|
|
|
|
|
| All directors and executive officers as a group: |
|
|
|
|
|
|
|
|
|
| (10 persons) |
|
| 530,317 |
|
|
|
| * |
|
|
| Includes |
|
|
| Includes |
(8) | Includes 6,842 common shares |
(9) | Includes 10,157 common shares directly held by Mr. Delozier and 3,334 unvested restricted common shares. |
2021 Proxy Statement | 32 |
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 42,45, has served as our chief financial officerChief 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. Mr. Sebra is presently an Adjunct Professor of Finance at Villanova University, a position he has held since 2011. 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 UniversityUniversity. Mr. Sebra is a Certified Public Accountant in Philadelphia.Pennsylvania.
Farrell M. Ender, age 42,45, has served as theour President of IRT since August 2014. Mr. Ender also served as the President of Independence Realty Advisors, LLC, or IRA, our former external advisor, from April 2013 to December 2016, as Senior Vice President of RAIT, the parent of IRA and IRT’sour 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.
Jessica K. Norman, age 39, has served as our General Counsel since May 2019 and our Secretary since June 2017. Prior to her appointment as our General Counsel, Jessica served as Executive Vice President – Corporate Counsel for IRT, a role which she held since joining us in December 2016 in connection with our management internalization, and Managing Director – Corporate Counsel for RAIT, our external advisor, from November 2013 through December 2016. While employed at RAIT, Ms. Norman was primarily responsible for overseeing legal matters affecting IRT, including the acquisition of our portfolio of apartment properties, our debt financings, and our transformative merger with Trade Street Residential. Prior to joining RAIT, Ms. Norman was in private practice from 2006 through 2013 at Drinker Biddle & Reath LLP, Klehr Harrison Harvey Branzburg LLP and Dechert LLP. During her tenure in private practice, Ms. Norman represented public and private clients in a variety of commercial real estate and financial transactions. Ms. Norman holds a Bachelor of Science in Business and Economics from the University of Pittsburgh, as well as a Juris Doctorate and a Master of Business Administration from Temple University.
Summary of 2017 Achievements:
2017Jason R. Delozier, age 37, has served as our Chief Accounting Officer since February 2018 and as our Controller since June 2017. Prior to joining IRT, Mr. Delozier was another momentous year for IRT. Under the direction of executive management, we continuedController at RAIT Financial Trust, a publicly traded REIT and IRT’s former advisor, from September 2015 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 AnalysisJune 2017. Previously, Mr. Delozier was Director of Financial ConditionReporting at Ascensus, Inc., a private-equity owned financial services provider, from May 2013 to September 2015. From 2005 to 2013, Mr. Delozier worked for KPMG LLP, a national public accounting firm, serving a variety of public and Resultsprivate financial institution clients. Mr. Delozier is a Certified Public Accountant in Pennsylvania and holds a Bachelor of Operations”Science in our annual report and highlights include:
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|
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Delivered Total Shareholder Return of 21%.
Generated same-store NOI growth of 4.8%.
Increased our unit count to over 15,000 units.
2017 follows two years of strong operational performance and growth for IRT. Highlights for our two prior years include:Accounting from Widener University.
2016 Highlights:
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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
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Total revenue increased 40% to $153.4 million.
Reduced leverage by $222.8 million resulting in a decline of Net Debt to EBITDA from 11.8x to 9.4x including the anticipated cost savings from the management internalization.
Converted $150 million of our floating rate debt to fixed rate through an interest rate swap through mid-2021. As of year-end, our debt was effectively 100% fixed rate.
Generated same-store NOI growth of 4.5%.
Generated 28.4% Total Shareholder Return in 2016 as compared to 8.6% for the RMZ and 11.96% for the S&P 500 index.
2015 Highlights:
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2021 Proxy Statement | 34 |
Compensation Discussion and Analysis
Our CD&A describes our executive compensation philosophy and objectives, our executive compensation program enacted to achieve those objectives and the compensation decisions made in 2020 under the program for our named executive officers (the “Named Executive Officers”), who for 2020 were:
Mr. Schaeffer, our Chair and Chief ExecutiveOfficer;
Mr. Sebra, our Chief Financial Officer andTreasurer;
Mr. Ender, our President;
Ms. Norman, our Executive Vice President and General Counsel;and
Mr. Delozier, our Chief AccountingOfficer.
We believe our executive compensation policies and procedures are focused on long-term performance principles and are closely aligned with stockholder interests. Our executive compensation program is also designed to attract and retain outstanding executives, to reward them for superior performance and to ensure that compensation provided to them remains competitive. We seek to align the interests of our executives and stockholders by tying compensation to both company and individual performance so that a portion of each executive’s compensation is tied directly to stockholder value.
Compensation Governance Practices
We seek to maintain pay practices that foster good governance, which are demonstrated by:
WHAT WE DO: | WHAT WE DON’T DO: | |
✓ Commit to oversight, evaluation and continuous improvement of our executive pay design and administration by an independent Compensation Committee consisting entirely of independent directors. ✓ Target executive compensation mix to favor performance-based compensation. ✓ Measure executive compensation levels and targets against other similarly-sized REIT companies, both in and outside the multifamily space. ✓ Utilize key measures tied to operational, financial and share performance. ✓ Benchmark compensation against our identified peer group. ✓ Maintain a “double trigger” requirement for vesting of outstanding equity awards upon a change of control. ✓ Engage an independent compensation consulting firm to advise on appropriate pay practices. ✓ Maintain stock ownership requirements for executive officers and non-employee directors. |
✘ Provide for excise tax gross-ups to executives. ✘ Guarantee annual salary increases or bonuses. ✘ Pay dividends or dividend equivalents on unearned performance shares. ✘ Employ pay practices which incentivize excessive risk taking. ✘ Allow hedging or pledging of ✘ Guarantee minimum cash or equity incentive payouts. ✘ Re-price stock options without stockholder approval. |
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Total revenues grew to $109.6 million for the year ended December 31, 2015 from $49.2 million for the year ended December 31, 2014.
Same store net operating income increased to $11.9 million for the year ended December 31, 2015 from $11.1 million for the year ended December 31, 2014.
CFFO per share increased 14% to $0.80 for the year ended December 31, 2015 from $0.70 for the year ended December 31, 2014.
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 2017 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 2017 were:
Mr. Schaeffer, our chairman and chief executive officer;
Mr. Sebra, our chief financial officer and treasurer; and
Mr. Ender, our president.
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.”
2017 IRT Performance
2017 was a transformative year for IRT as we continued 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 more flexible financing arrangement; reducing our overall leverage; recycling capital out of our class C assets and into class B assets; and reducing the effect of debt maturities and interest rates through long term loans and interest rate derivatives.
As of December 31, 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 properties containing an aggregate of 12,982 units as of December 31, 2016. We refer to our investments in real estate as of December 31, 2017 as our “existing portfolio.” As of December 31, 2017, our existing portfolio had an average occupancy of 94.1% and an average monthly effective rent per occupied apartment unit of $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 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 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.
Our 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.
Elements & Objectives of Our Compensation Policies
Our compensation policies for our named executives have the following objectives:
Program
We seek to attract and retain key executives, including the named executives,Named Executive Officers, by motivating them to achieve superiora high level of performance and rewarding them for that performance.Key elements of compensation may include one or more of the following:
a base salary that is determined in part by the named executive’s history of performance and prior compensation;
quantitative criteria-based bonus programs, discretionary bonuses, other forms of cash awards or some combination of these alternatives, that would be based on the compensation committee’s assessment of the named executive’s duties and performance within the context of the performance of IRT or some designated portion of IRT and whether quantitative criteria can be set that relate to the executive’s duties and performance and the performance of IRT or some designated portion of IRT; and
equity-based compensation in amounts that are based on the executive’s role and strategic impact with respect to long term objectives, the value of which is contingent upon the performance of IRT’s common share price, and subject to vesting schedules that require continued service with IRT.
The general rationale behind our base salary decisions are discussed above in “Elements and Objectives of our Compensation Policies”. Specifically, the base salaries for the Named Executive Officers are intended to be competitive with base salaries for comparable positions at similarly sized REITs, which allows us to attract and retain 2021 Proxy Statement | 36 first-class executive talent. The 2020 and 2019 base salaries of our Named Executive Officers are set forth in the table below: Executive 2020 Base Salary 2019 Base Salary Scott F. Schaeffer $700,000 $700,000 James J. Sebra $400,000 $400,000 Farrell M. Ender $400,000 $400,000 Jessica K. Norman $300,000 $225,000 Jason R. Delozier $275,000 $245,000 The Compensation Committee maintains an annual cash bonus plan to incentivize the Named Executive Officers 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 Officer’s performance through a subjective component. This program establishes a target cash bonus award level for each Named Executive Officer composed of two components, as described below: “Objective/Formulaic Component” – the objective/formulaic component of the cash bonus award that may be earned by each Named Executive Officer will be determined by IRT’s performance relative to specified objective performance criteria established by the Compensation Committee as described below. “Subjective Component” – the subjective component of the cash bonus award may be determined based on the Compensation Committee’s subjective evaluation of such participant’s performance. Allocation of Components and Calculation of the 2020 Cash Bonus Awards – the 2020 cash bonus awards were allocated 75% to the objective/formulaic component and 25% to the subjective component. The individual 2020 cash bonus award ranges, as a percentage of base salary for Threshold, Target and Maximum performance levels for the Named Executive Officers set forth below was as follows: 2020 2020 Cash Bonus Ranges Base % of Base Salary Dollar Value Executive Salary Threshold Target Maximum Threshold Target Maximum Scott F. Schaeffer $700,000 100% 179% 250% $700,000 $1,253,000 $1,750,000 James J. Sebra $400,000 50% 100% 150% $200,000 $400,000 $600,000 Farrell M. Ender $400,000 50% 100% 150% $200,000 $400,000 $600,000 Jessica K. Norman $300,000 50% 100% 150% $150,000 $300,000 $450,000 Jason R. Delozier $275,000 27.5% 55% 82.5% $75,625 $151,250 $226,875 2021 Proxy Statement | 37 OBJECTIVE/FORMULAIC PERFORMANCE CRITERIA The objective performance measures and relative weightings established by the Compensation Committee for purposes of the 2020 cash bonus award program, as well as the actual 2020 performance outcomes for these measures, are shown below (see “Cash Bonus Outcomes” section below for resulting payouts): Metric(1) Weighting Threshold Target Maximum 2020 Actual CORE FFO per share 40% $0.79 $0.81 $0.82 $0.80 Same Store NOI Growth 20% 4.0% 4.75% 5.5% 3.1% Operating Margin 15% 60.0% 60.9% 61.8% 60.7% G&A % of Revenue 15% 5.1% 4.9% 4.7% 4.8% Net-Debt-to-EBITDA 10% 9.1x 8.9x 8.7x 8.2x (1) See “Appendix A – Reconciliation of Non-GAAP Financial Measures to GAAP Measures” 2020 Cash Bonus Weighting and Payout Detail CEO Other NEOs Metric Weighting Final Payout Final CFO Pres. GC CAO Payout CORE FFO per share 40% 41% $292,950 39% $90,000 $90,000 $67,500 $34,031 Same Store NOI Growth 20% 0% $0 0% $0 $0 $0 $0 Operating Margin 15% 18% $127,138 17% $40,000 $40,000 $30,000 $15,125 G&A % of Revenue 15% 23% $168,919 24% $56,250 $56,250 $42,188 $21,270 Net-Debt-to-EBITDA 10% 18% $131,250 20% $45,000 $45,000 $33,750 $17,016 Totals 77% $720,256 77% $231,250 $231,250 $173,438 $87,441 All of these objective performance criteria are calculated in a manner consistent with how we disclose the metrics in our public reporting; provided that the Compensation Committee retains 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 be appropriate or necessary to support the purposes of the program. Consistent with prior years, the Committee utilized a pro forma leverage ratio rather than actual leverage ratio when calculating the Net-Debt-to-EBITDA metric. While this adjustment had no effect on the 2020 performance outcome, the Compensation Committee felt this adjustment was appropriate to align calculations with prior years, when this adjustment was made to correct inherent incongruities with the leverage ratio performance metric caused by the timing of acquisitions and dispositions throughout the calendar year. See “Allocation of Components and Calculation of the 2020 Cash Bonus Award” above for a description of how the 2020 cash bonus awards were calculated. 2021 Proxy Statement | 38 The subjective bonus award portion of the 2020 cash bonus award for each of the Named Executive Officer set forth below was based on the Compensation Committee’s subjective evaluation of the Named Executive Officer’s performance relative to achieving specified criteria established for 2020, which the Compensation Committee has determined are also important elements of each Named Executive Officer’s contribution to the creation of overall shareholder value. These individual elements on which certain of our Named Executive Officers were evaluated are as follows: Named Executive Officer Individual Subjective Performance Criteria Scott F. Schaeffer • Strategicplanning • Leadership of thecompany • Boardrelations • Executing the businessplan • Communication • Successionplanning James J. Sebra • Effectiveness in oversight of the accounting, tax and finance functions • Team development andsuccession • Strategic planning and supporting newinitiatives • Investor and analystoutreach • Balance sheet management and financialflexibility • Effectiveness in oversight of technology developmentinitiatives Farrell M. Ender • Effectiveness in training, mentoring and developingpersonnel • Enhancing the portfolio through asset sales andacquisitions • Effectiveness in developing and promoting corporateculture • Improving asset quality through redevelopmentinitiatives Jessica K. Norman • Effective oversight of legal and regulatory matters • Support new corporate and strategic initiatives • Identify and manage changing governance trends • Review and improve internal policies and procedures to manage for risk tolerance • Develop legal and property risk management personnel & improve efficiencies • Management of outside counsel relative to cost and effectiveness. Jason R. Delozier • Leading and enhancing ongoing training/education among corporate and property accounting teams with a focus on continuous improvement • Connecting Philadelphia and Chicago teams through monthlytraining, periodic trips to and from for all members of the team, video conferencing, etc. Focusing on building a “rewarding” function for all teammembers • Improving efficiency of and reducing cycle time required to close the books • Overseeing enhancements to internal control environment toimprove and strengthen management reviewcontrols • Participating in and supporting corporate and strategic operating initiatives 2021 Proxy Statement | 39 With respect to the 2020 subjective performance criteria, the Compensation Committee analyzed the performance of the Named Executive Officers as compared to the subjective criteria discussed above. The Compensation Committee determined that Messrs. Sebra, Ender and Delozier and Ms. Norman achieved the specified individual criteria established for 2020 in a manner that the Compensation Committee found to be above-average particularly in light of the unique and unprecedented challenges stemming from the COVID-19 pandemic. In doing so, the Compensation Committee noted that each Named Executive Officer achieved their goals relative to their individual performance criteria while successfully guiding the Company through social and economic turmoil created by the pandemic. Accordingly, the Compensation Committee determined that the cash bonus payouts to Messrs. Sebra, Ender and Delozier and Ms. Norman with respect to their 2020 subjective performance elements should be at the maximum level. With respect to Mr. Schaeffer, the full Board (other than Mr. Schaeffer) conducted an evaluation of Mr. Schaeffer based on the above criteria and, based on a 5-point scale, with 5 being the highest, assigned Mr. Schaeffer a composite score of 4.5, which further supported the Compensation Committee’s decision to payout the subjective performance element of his cash bonus at the maximum level for 2020. Based on the combined objective and subjective results discussed above, the Compensation Committee awarded the Named Executive Officers 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. The 2020 cash bonus payout for each of the Named Executive Officers was as follows: 2020 Cash Bonus Award Payout ($) % of Executive Target ($) Objective/Formulaic + Subjective = Combined Target Scott F. Schaeffer $1,253,000 $720,256 $437,500 $1,157,756 92% James J. Sebra $400,000 $231,250 $150,000 $381,250 95% Farrell M. Ender $400,000 $231,250 $150,000 $381,250 95% Jessica K. Norman $300,000 $173,438 $112,500 $285,938 95% Jason R. Delozier $151,250 $87,441 $56,719 $144,160 95% PERFORMANCE SHARE UNITS (PSUS) PSUs account for 75% of the overall target equity to ensure that a meaningful portion of the total equity opportunity is tied to the achievement of performance objectives. PSUs are awarded based on the following criteria: Goal-Range Performance Criteria 2020 Weighting Threshold Target Maximum Relative 3-year TSR 70% 30th percentile 50th percentile 75th percentile Strategic Objectives 30% Subjective 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 over the performance period, 2021 Proxy Statement | 40 using the relative percentile ranking approach for all constituents that are included in that index over the full performance period. Subjective Criteria. The subjective bonus award portion of the 2020 PSUs will be based on the Compensation Committee’s subjective evaluation of the Named Executive Officer’s performance over the performance period, which theCompensation Committee has determined are also important elements of each Named Executive Officer’s contribution to the creation of overall shareholdervalue. Vesting. 50% of PSUs earned will vest on each of December 31, 2022 and December 31, 2023, in each case based on continued service through such dates and subject to accelerated vesting in certain cases, as described below under the heading “Additional Terms of 2020 PSU Awards.” Dividends and Voting. No dividend equivalents will be paid while the 2020 PSUs are subject to performance criteria. Once the performance period concludes, dividend equivalents will accrue on earned PSUs that remain subject to time vesting and those accrued amounts will be paid upon delivery of the shares to which they relate. PSUs do not have any voting rights. Time-based RSUs account for the remaining 25% of the 2020 equity awards. In each case, these RSUs will vest 25% per year, subject to accelerated vesting upon termination without cause within one year following a change in control, death, disability and retirement (as defined below). In each case, such accelerated vesting is conditioned upon the execution of a release of claims and, in the case of retirement, a non-compete and non-solicitation agreement with a duration of up to three years. In addition, the employment agreements for the Named Executive Officers each provide for accelerated vesting of time-vested equity in the event of a termination without cause or resignation with good reason, and subject to the execution of a release of claims. Dividend equivalents will be accrued with respect to 2020 RSU awards and paid upon delivery of the shares to which they relate. RSUs do not have any voting rights. The sizes of the 2020 equity awards were determined by the Compensation Committee based on the following intended individual award values: Performance-Based Award Executive Total Target Time-Based Threshold Target Maximum Scott F. Schaeffer $2,000,000 $500,000 $750,000 $1,500,000 $2,250,000 James J. Sebra $800,000 $200,000 $300,000 $600,000 $900,000 Farrell M. Ender $800,000 $200,000 $300,000 $600,000 $900,000 Jessica K. Norman $300,000 $75,000 $112,500 $225,000 $337,500 Jason R. Delozier $176,000 $44,000 $66,000 $132,000 $198,000 2021 Proxy Statement | 41 The number of PSUs and RSUs awarded is set forth below and was determined by dividing the intended award value (at target, in the case of the PSUs) by $15.12, the volume weighted average of our closing stock price on the NYSE for the 20 trading days prior to March 2, 2020, the grant date. Please note that the grant date fair value shown in the Summary Compensation Table for these awards is less than the amounts shown above due to differences in how the awards are measured for financial accounting purposes. Number of 2020 Executive RSUs Number of 2020 PSUs Scott F. Schaeffer 33,063 99,189 James J. Sebra 13,225 39,675 Farrell M. Ender 13,225 39,675 Jessica K. Norman 4,959 14,878 Jason R. Delozier 2,909 8,728 ADDITIONAL TERMS OF THE 2020 PSU AWARDS If a Named Executive Officer’s employment is terminated due to death, disability, termination without cause or resignation with good reason (which we refer to as a qualified termination) prior to the conclusion of the three-year performance period applicable to 2020 PSUs, then such performance period will be shortened to conclude at the end of the calendar quarter immediately preceding such qualified termination. The number of PSUs earned (if any) will then be determined based on actual performance during the shortened performance period and will be pro-rated to reflect the portion of the original three-year performance period actually worked by the executive. Such earned PSUs will not be subject to any additional time based vesting period. In the case of a qualified termination after the performance period is complete, but before the additional time-based vesting period is complete, any earned PSUs shall become vested as of the date of such qualified termination. The foregoing treatment upon a qualified termination is conditioned on the execution of a release of claims. In the event of a Named Executive Officer’s “retirement” (as defined below) prior to the conclusion of the three-year performance period, 2020 PSUs will remain outstanding and be earned (or forfeited) based on actual performance during the full three-year performance period. In that case, any earned 2020 PSUs will not be subject to further time-vesting requirements, but shares will not be deliverable in respect of those earned RSUs until the otherwise applicable time-vesting dates. Similarly, if a Named Executive Officer’s retirement occurs after the performance period, shares will be delivered in earned 2020 PSUs on the otherwise applicable time-vesting dates. The foregoing retirement treatment is conditioned on the Named Executive Officer (1) executing a release of claims, (2) entering into a non-compete and non-solicitation agreement with a duration of up to three years, and (3) providing at least six months advance notice of retirement. “Retirement” is defined as the Named Executive Officer’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 Officer’s combined age and service equals at least 70. As of December 31, 2020, Mr. Schaeffer was the only Named Executive Officer who satisfied the age and service requirements for retirement. 2021 Proxy Statement | 42 On February 18, 2021, the Compensation Committee and the Board determined that the performance share units granted to Messrs. Schaeffer, Sebra, and Ender in 2018 with a performance period ending on December 31, 2020 vested at the maximum level (i.e., 150% of the target number of shares). 2018 PSUs were awarded based 70% on relative TSR and 30% on subjective criteria, each of which was deemed to be earned at maximum levels. The Company’s three-year absolute TSR of 53% was at the 86th percentile of NAREIT Apartment Index (above the 75th percentile maximum goal). With consideration to the Company’s strong TSR outperformance, the Committee determined that a similar payout was appropriate for the subjective portion of the award. For 2021, our Compensation Committee made the following decisions regarding our compensation levels and programs: For all Named Executive Officers, other than the CEO, to align pay closer with competitive median, increase salary from 2020 levels as follows: Executive Total 2020 Salary Total 2021 Salary James J. Sebra $400,000 $425,000 Farrell M. Ender $400,000 $425,000 Jessica K. Norman $300,000 $325,000 Jason R. Delozier $275,000 $300,000 No change was made to Mr. Schaeffer’s base salary for 2021. For all Named Executive Officers, 2021 cash bonus opportunities are unchanged as a percentage of base salary. For all Named Executive Officers, to align pay closer with competitive median, increase target long-term incentive from 2020 levels as follows: Executive Total Target Award in 2020 Total Target Award in 2021 Scott F. Schaeffer $2,000,000 $2,295,244 James J. Sebra $800,000 $918,750 Farrell M. Ender $800,000 $918,750 Jessica K. Norman $300,000 $414,062 Jason R. Delozier $176,000 $207,092 Implementing the Objectives of Our Compensation Policies Other important policies and other factors influencing our compensation decisions are described below. Impact of 2020 Stockholder Advisory Votes At our 2020 annual meeting of stockholders, our stockholders who cast votes on this proposal recommended by a substantial majority of votes cast (98.2%) that we hold an advisory stockholder vote on the compensation of our Named Executive Officers every year. In accordance with Exchange Act rules, we will next hold an advisory vote on the frequency of our say on pay votes at our 2021 annual stockholder meeting. We also provided our stockholders an advisory vote on the Named Executive Officers’ compensation at our 2020 annual stockholder meeting. Stockholders who cast votes on this proposal voted to approve the Company’s non-binding “say-on-pay” resolution, with over 98% of the votes cast approving of such resolution. 2021 Proxy Statement | 43 Role of Chief Executive Officer in Setting Compensation The Company’s Chief Executive Officer makes recommendations to the Compensation Committee based on the compensation philosophy and objectives set by the Compensation Committee as well as current business conditions. More specifically, for each Named Executive Officer, including himself, the Chief Executive Officer reviews market data and recommends to the Compensation Committee the performance measures and target goals, in each case for the review, discussion and approval of the Compensation Committee. These goals are derived from our current business plan and include both quantitative measurements and qualitative considerations selected to reinforce and enhance achievement of our operating and growth objectives. For each Named Executive Officer other than himself, the Chief Executive Officer also reviews the rationale and guidelines for compensation and equity awards, and advises on the achievement of established performance measures and target goals. The Chief Executive Officer may attend meetings of the Compensation Committee at the request of the Compensation Committee chair, but does not attend executive sessions and does not participate in any Compensation Committee discussions relating to the final determination of his own compensation. Role of Compensation Consultant Our Compensation Committee has the authority to engage independent advisors to assist it in carrying out its responsibilities. For fiscal 2020, the Compensation Committee engaged Semler Brossy Consulting Group (“Semler Brossy”) as its independent executive compensation consultant. Semler Brossy, who reports directly to the Compensation Committee and not to management, is independent from us, has not provided any services to us other than to the Compensation Committee and receives compensation from us only for services provided to the Compensation Committee. Our Compensation Committee assessed the independence of Semler Brossy pursuant to SEC rules and concluded that the work of Semler Brossy for the Compensation Committee has not raised any conflict of interest. Semler Brossy reviews and advises on all principal aspects of our executive compensation program. Its main responsibilities are as follows: Advise on alignment of pay and performance; Review and advise on executive total compensation, including base salaries, short-and long-term incentives, associated performance goals, and retention and severance arrangements; Advise on trends in executive compensation; Provide recommendations regarding the composition of our peer group; Analyze peer group proxy statements, compensation survey data and other publicly available data; and Perform any special projects requested by the Compensation Committee. The Compensation Committee typically asks Semler Brossy to attend its meetings, including executive sessions at which management is not present. Semler Brossy communicates regularly with the Chair of the Compensation Committee outside of committee meetings and also meets with management to gather information and review proposals. The Compensation Committee regularly reviews compensation paid by our peer group. For 2020, the Committee determined to maintain the same group as in 2019 (outlined below), save for the removal of TIER REIT due M&A activity. American Assets Trust 2018 Cash Bonus Award Ranges Executive 2018 Base Threshold Target Maximum Scott F. Schaeffer $700,000 100% 179% 250% Farrell M. Ender $400,000 50% 100% 150% James J. Sebra $400,000 75% 125% 175% 2018 Cash Bonus Award Executive Threshold Target Maximum Scott F. Schaeffer $700,000 $1,250,000 $1,750,000 Farrell M. Ender $200,000 $ 400,000 $ 600,000 James J. Sebra $300,000 $ 500,000 $ 700,000 American Campus Communities Apartment Investment & Mgmt. Co. Bluerock Residential Growth REIT Camden Property Trust Cedar Realty Trust Chatham Lodging Trust Easterly Government Properties Investors Real Estate Trust Rexford Industrial Realty STAG Industrial Terreno Realty Corp. UDR Urstadt Biddle Properties Washington REIT Anti-Hedging Policy. Officers are prohibited from purchasing puts, calls, options or other derivative securities based on the Company’s securities under the Company’s Insider Trading Policy. The policy also prohibits hedging or monetization transactions, such as zero-cost collars and forward sale contracts and purchasing securities of the Company on margin, borrowing against any account in which the Company’s securities are held or otherwise pledging any securities of the Company. See also “Proposal 1 - Election of Directors - Anti-Hedging Policy” above. Stock Ownership Requirements. The Chief Executive Officer is required to hold common shares with a value equal to five times his annual base salary. All other executive officers are required to hold common shares with a value equal to three times their annual base salary. All executive officers are required to satisfy these stock ownership requirements six years after the later of (i) their election or appointment as a director or executive officer, as applicable, or (ii) April 1, 2018, the date we adopted the requirements. All executive officers are in compliance with these stock ownership guidelines, as they have either met the minimum share ownership requirements or they have not yet reached the date by which such requirements must be satisfied. Employment Agreements. Each of the Named Executive Officers has an employment agreement with us. The employment agreements set floor amounts for base salary. In addition, the employment agreements provide for payments and other benefits if the executive’s employment terminates under specified circumstances, including in the event of a termination following a “change in control”. See “Named Executive Officer Compensation—Potential Payments on Termination or Change in Control” for a description of these severance and change in control benefits with the Named Executive Officers. The Compensation Committee believes that these severance and change in control arrangements are an important part of overall compensation for these Named Executive Officers because they help to secure the continued employment and dedication of these Named Executive Officers, 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 have similar agreements in place for their senior employees. The Named Executive Officer employment agreements also contain provisions that prohibit the executive from disclosing IRT’s confidential information and prohibits the executive from engaging in certain competitive activities or soliciting any of our employees or customers following termination of their employment with IRT. We believe that these provisions help ensure the long-term success of IRT. Performance-Based Award Executive Total Target Award Time-Based Award Threshold Target Maximum Scott F. Schaeffer $2,000,000 $500,000 $750,000 $1,500,000 $2,250,000 Farrell M. Ender 800,000 200,000 300,000 600,000 900,000 James J. Sebra 700,000 175,000 262,500 525,000 787,500 2021 Proxy Statement | 45 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 our compensation plans, policies and practices,and the incentives they create, with respect to all employees, including executive officers, on our risk profile. Based on this consideration, the Compensation Committee concluded that our compensation policies and procedures are not reasonably likely to have a material adverse effect on us. Some of the factors the Compensation Committee considered as mitigating the risks of our compensation plansinclude: The mix of compensation, which is balanced with an emphasis toward rewarding long term performance; The use of multiple performance metrics that are closely aligned with strategic business goalsin the annual and long-term incentiveplans; The use of discretion as a means to adjust compensation to reflect individual performance or other factors; Multi-year time vesting of equity awards, which generally requires long term commitment on the part of employees; Incentive awards made are capped under the terms of the award at a maximum number ofshares or dollars, asapplicable; The use of peer group comparisons to ensure the compensation programs are consistent with industry practice;and Responding to any executive misconduct in the manner described below under “Potential Impact on Compensation from ExecutiveMisconduct.” The Effect of Regulatory Requirements on our Executive Compensation 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 us in connection with a change in control. Our employment agreements with our Named Executive Officers provide that the Named Executive Officer shall be solely responsible for any excise tax imposed by Section 4999 of the IRC. 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 Executive Officers. 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 attempt 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 our 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, and all remedies available under our new Clawback Policy (as described above. Executive Number of 2018 stock awards Number of 2018 PSUs Scott F. Schaeffer 57,670 259,515 Farrell M. Ender 23,068 103,806 James J. Sebra 20,184 90,830 Our Clawback Policy is intended to allow us to recover erroneously paid performance-based amounts from executive officers if we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement under applicable securities laws. Perquisites. None of our other Named Executive Officers received perquisites equal to or greater than $10,000 in 2020. In general, we do not emphasize perquisites as part of the compensation packages we offer and seek to emphasize other elements. 401(k) Plan. Our 401(k) plan offers eligible employees the opportunity to make tax-advantaged investments on a regular basis through salary deferrals, which are supplemented by our matching contributions and discretionary profit sharing contributions if any. We currently provide a cash match equal to each employee’s contributions to the extent the contributions do not exceed 4% of the employee’s eligible compensation and may provide additional discretionary matching contributions. Any matching contribution made by us pursuant to the IRT 401(k) plan vests immediately. Our Named Executive Officers participate in this plan on the same basis as other eligibleemployees. The DeForest B. Soaries, Jr., D. Min, Chair Melinda H. McClure Mack D. Pridgen III Compensation Committee Interlocks and Insider Participation No member of our Compensation Committee is or has been an officer or employee of us. In addition, none of our executive officers serves as a member of the board of directors or Compensation Committee of any company that has an executive officer serving as a member of our Board. Named Executive Officer Compensation We provide below summary information about compensation for the fiscal year ended December 31, 2020 for the following persons, who we refer to as the Named Executive Officers: Our Chief Executive Officer: Scott F.Schaeffer; Our Chief Financial Officer: James J.Sebra; Our President: Farrell M.Ender; Our Executive Vice President and General Counsel:Jessica K. Norman; and Our Chief Accounting Officer: Jason R.Delozier. There were no other Named Executive Officers of IRT serving at the end of the fiscal year ended December 31, 2020. As Ms. Norman and Mr. Delozier became Named Executive Officers during 2019, no prior year comparable compensation information has been presented for 2018. Name and Principal Position Year Base Salary (1) Bonus (2) Stock Awards (3) Option Awards (4) Non-Equity Incentive Plan Compensation (5) All Other Compensation (6) Total Scott F. Schaeffer (Chief Executive Officer) 2017 $ 618,600 $ 386,625 $ 906,388 $ — $ 985,912 $ 41,441 $ 2,938,967 2016 $ 18,745 $ — $ 348,320 $ — $ — $ 8,989 $ 376,054 2015 $ — $ — $ 187,000 $ 43,800 $ — $ 1,920 $ 230,800 James J. Sebra (Chief Financial Officer) 2017 $ 298,950 $ 239,160 $ 375,061 $ — $ 306,603 $ 29,121 $ 1,248,895 2016 $ — $ — $ 174,160 $ — $ — $ 5,761 $ 179,921 2015 $ — $ — $ 149,600 $ 35,040 $ — $ 960 $ 184,640 Farrell M. Ender (President) 2017 $ 308,600 $ 136,500 $ 401,108 $ — $ 349,119 $ 43,940 $ 1,239,266 2016 $ 9,352 $ 50,000 $ 348,320 $ — $ — $ 10,188 $ 417,860 2015 $ — $ — $ 233,750 $ 54,750 $ — $ 1,920 $ 288,500 2021 Proxy Statement | 47 Name and Principal Position Year Base Salary Bonus (1) Stock Awards (2) Non-Equity Incentive Plan Compensation (3) All Other Compensation (4) Total Scott F. Schaeffer (Chief Executive Officer) 2020 $ 700,000 $ 437,500 $ 1,626,039 $ 720,256 $ 11,400 $ 3,495,195 2019 $ 700,000 $ 437,500 $ 1,723,887 $ 1,028,501 $ 11,200 $ 3,901,088 2018 $ 700,000 $ 384,615 $ 1,711,156 $ 729,937 $ 55,248 $ 3,580,956 James J. Sebra (Chief Financial Officer) 2020 $ 400,000 $ 150,000 $ 650,404 $ 231,250 $ 11,400 $ 1,443,054 2019 $ 400,000 $ 150,000 $ 689,556 $ 338,250 $ 11,200 $ 1,589,006 2018 $ 400,000 $ 280,000 $ 598,903 $ 240,267 $ 37,101 $ 1,556,271 Farrell M. Ender (President) 2020 $ 400,000 $ 150,000 $ 650,404 $ 231,250 $ 11,400 $ 1,443,054 2019 $ 400,000 $ 100,000 $ 689,556 $ 338,250 $ 11,200 $ 1,539,006 2018 $ 400,000 $ 150,000 $ 684,461 $ 225,333 $ 56,056 $ 1,515,849 Jessica K. Norman (Executive Vice President and General Counsel) 2020 $ 300,000 $ 112,500 $ 243,894 $ 173,438 $ 11,400 $ 841,232 2019 $ 225,000 $ 200,000 $ 77,625 $ — $ 9,370 $ 511,995 Jason R. Delozier (Chief Accounting Officer) 2020 $ 275,000 $ 56,719 $ 143,075 $ 87,441 $ 11,400 $ 573,635 2019 $ 245,000 $ 41,344 $ 103,500 $ 93,230 $ 9,830 $ 492,904 (1) Reflects the qualitative component of the Named Executive Officer’s Cash Bonus Award. (2) We report all equity awards at their full grant date fair value in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation.” For restricted stock awards, the fair value was calculated based on the NYSE market price for our common stock on the grant date for the award. For PSUs, the fair value on the date of grant was estimated using a Monte Carlo simulation model. See Note 7: “Equity Compensation Plans” within Item 8 of our Form 10-K for further discussion including assumptions used when valuing equity awards. For 2020, amounts shown include the following grant date fair value amounts: Scott F. Schaeffer – $1,167,455 PSUs (at maximum performance PSUs would be $2,250,000)and $458,584 restricted stock unit awards. James. J. Sebra – $466,673 PSUs (at maximum performance PSUs would be $900,000)and $183,431 restricted stock unit awards. Farrell M. Ender – $466,673 PSUs (at maximum performance PSUs would be $900,000)and $183,431 restricted stock unit awards. Jessica K. Norman – $175,113 PSUs (at maximum performance PSUs would be $337,500)and $68,781 restricted stock unit awards. Jason R. Delozier – $102,727 PSUs (at maximum performance PSUs would be $198,000) and $40,348 restricted stock unit awards. (3) Amount shown reflects the quantitative component of the Named Executive Officer’s Cash Bonus Award. (4) Amounts shown for 2020 reflect IRT’s matching contribution to the Named Executive Officer���s 401(k) plan. As the initial grant date fair value of stock awards is not discounted for dividends expected to be paid, beginning in 2019, dividends accrued on unvested restricted stock awards have been excluded from All Other Compensation. Name and Principal Position Year Company Contributions to Retirement and 401(k) plans Dividends on Restricted Stock Total Scott F. Schaeffer (Chief Executive Officer) 2017 $ 10,800 $ 30,641 $ 41,441 2016 $ 348 $ 8,641 $ 8,989 2015 $ — $ 1,920 $ 1,920 James J. Sebra (Chief Financial Officer) 2017 $ 10,800 $ 18,321 $ 29,121 2016 $ — $ 5,761 $ 5,761 2015 $ — $ 960 $ 960 Farrell M. Ender (President) 2017 $ 10,800 $ 33,140 $ 43,940 2016 $ 348 $ 9,840 $ 10,188 2015 $ — $ 1,920 $ 1,920 Name Grant Date Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) Estimated Future Payouts Under Equity Incentive Plan Awards (#) (2) All other stock awards: Number of shares of stock or units (#) (3) Grant Date Fair Value of Stock and Option Awards ($) (4) Threshold Target Maximum Threshold Target Maximum Scott F. Schaeffer 2/28/2017 463,950 760,878 1,159,875 40,805 81,610 122,416 27,203 249,996 James J. Sebra 2/28/2017 119,580 239,160 358,740 18,362 36,725 55,087 12,242 112,504 Farrel M. Ender 2/28/2017 131,927 270,797 409,667 16,322 32,644 48,966 10,881 105,731 2021 Proxy Statement | 48 Grants of Plan-Based Awards in 2020 The following table provides information about plan-based awards granted to the Named Executive Officers in 2020. Name Grant Date Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($) (1) Estimated Future Payouts Under Equity Incentive Plan Awards (#) (2) All other stock awards: Number of shares of stock or units (#) (3) Grant Date Fair Value of Stock and Option Awards ($) (4) Threshold Target Maximum Threshold Target Maximum Scott F. Schaeffer 3/2/2020 525,000 937,500 1,312,500 3/2/2020 49,595 99,189 148,785 1,167,455 3/2/2020 33,063 458,584 James J. Sebra 3/2/2020 150,000 300,000 450,000 3/2/2020 19,838 39,675 59,514 466,973 3/2/2020 13,225 183,431 Farrell M. Ender 3/2/2020 150,000 300,000 450,000 3/2/2020 19,838 39,675 59,514 466,973 3/2/2020 13,225 183,431 Jessica K. Norman 3/2/2020 112,500 225,000 337,500 3/2/2020 7,439 14,878 22,318 175,113 3/2/2020 4,959 68,781 Jason R. Delozier 3/2/2020 56,719 113,438 170,156 3/2/2020 4,364 8,728 13,093 102,727 3/2/2020 2,909 40,348 (1) These columns represent the potential value of the payout for each eligible officer if the threshold, target, or maximum goals are satisfied under the quantitative bonus components of the Annual Cash Bonus plan, as described above in the “Compensation Discussion Analysis” section. The amounts actually earned by each eligible officer with respect to 2020 performance under the Annual Cash Bonus plan are reported in the Bonus (for the qualitative component) and Non-Equity Incentive Plan Compensation (for the quantitative component) columns in (2) These columns represent the potential number of (3) This column shows the number of restricted stock units granted in 2020 to the Named Executive Officers. These restricted stock unit awards vest in four equal annual installments on the anniversary of the grant date, subject generally to the grantee’s continued service through the applicable vesting date. (4) This column shows the full grant date fair value of restricted common stock awards under FASB ASC Topic 718 granted to the Named Executive Officers in 2020. Generally, the full grant date fair value is the amount that we expense in our 2021 Proxy Statement | 49 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 our principal executive officer. The annual total compensation for 2020 for Mr. Schaeffer, our CEO, was $3,495,195, as reported under the above Summary Compensation Table. Our median employee’s total compensation for 2020 was $51,401. As a result, we estimate that Mr. Schaeffer’s 2020 total compensation was approximately 68 times that of our median employee. Our CEO to median employee pay ratio was calculated in accordance with Item 402(u) of Regulation S-K. We identified the median employee by examining 2020 total compensation, consisting of salaries, wages, bonuses, and equity awards for all individuals who were employed by the Company on December 31, 2020, other than our CEO. We included all active employees and annualized the compensation for any non-temporary, non-seasonal employees who were not employed by the Company for the full 2020 calendar year. 2021 Proxy Statement | 50 Outstanding Equity Awards at 2020 Fiscal Year-End The following table provides information on the holdings of outstanding equity awards by the Named Executive Officers at December 31, 2020. These awards are comprised of PSUs, RSUs and restricted common stock awards. Each award is shown separately for each Named Executive Officer by grant date. Stock Awards Name Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards, Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Scott F. Schaeffer 6,803 (1) 91,364 28,836 (2) 387,267 36,657 (3) 492,304 146,627 (6) 1,969,201 33,063 (4)(8) 444,036 99,189 (7) 1,332,108 129,757 (5)(8) 1,742,637 James J. Sebra 3,062 (1) 41,123 10,092 (2) 135,536 14,663 (3) 196,924 58,651 (6) 787,683 13,225 (4) 177,612 39,675 (7) 532,835 45,416 (5) 609,937 Farrell M. Ender 2,721 (1) 36,543 11,534 (2) 154,902 14,663 (3) 196,924 58,651 (6) 787,683 13,225 (4) 177,612 39,675 (7) 532,835 51,903 (5) 697,057 Jessica K. Norman 2,500 (2) 33,575 - - 5,000 (3) 67,150 - - 4,959 (4) 66,599 14,878 (7) 199,812 Jason R. Delozier 2,500 (2) 33,575 - - 6,667 (3) 89,538 2,909 (4) 39,068 8,728 (7) 117,217 (1) These restricted common stock awards vest on February 28, 2021. (2) For Messrs. Schaeffer, Sebra, and (3) For Messrs. Schaeffer, Sebra, and Ender, these restricted common stock awards vest in three equal annual installments on March 15, 2021, March 15, 2022, and March 15, 2023. For Ms. Norman and Mr. Delozier, these restricted stock awards vests in two equal installments on March 1, 2021 and March 1, 2022. (4) These restricted stock unit awards vest in four equal annual installments on March 15, 2021, March 15, 2022, March 15, 2023, and March 15, 2024. (5) As of December 31, 2020, 2018 PSUs were earned at 150% of target. These units constitute 50% of the earned 2018 PSUs, which generally remain subject to service-based vesting until December 31, 2021. The (6) These units represent the 2019 PSU awards, which may be earned over a three-year performance period ending December 31, 2021, with 50% of any earned units vesting at the end of that three-year period and 2021 Proxy Statement | 51 the remaining 50% generally subject to service-based vesting until December 31, 2022. The number and value of units shown assumes performance at the target level. The actual number of units earned will depend on actual performance and range from 0%-150% of target. (7) These units represent the 2020 PSU awards, which may be earned over a three-year performance period ending December 31, 2022, with 50% of any earned units vesting at the end of that three-year period and the remaining 50% generally subject to service-based vesting until December 31, 2023. The number and value of units shown assumes performance at the target level. The actual number of units earned will depend on actual performance and range from 0%-150% of target. (8) Mr. Schaeffer is retirement eligible under the terms of these Option Exercises and Stock Vested in 2020 The following table provides information on the number of shares acquired by the Named Executive Officers upon the vesting of stock awards, along with the value of such awards at the time of vesting, before payment of any applicable withholding taxes. Stock Awards Name Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) Scott F. Schaeffer 224,400 3,068,470 James J. Sebra 85,952 1,176,729 Farrell M. Ender 89,760 1,227,389 Jessica K. Norman 6,852 95,483 Jason R. Delozier 6,944 96,702 2021 Proxy Statement | 52 Potential Payments on Termination orChange-In-Control We have entered into employment agreements with our Named Executive Officers. These agreements provide for payments and other benefits if a Named Executive Officer’s employment with us is terminated under circumstances specified in his respective agreement, including in connection with a “change in control” (as defined in the agreement). A Named Executive Officer’s rights upon the termination of his employment will depend upon the circumstances of the termination. Under SEC rules, the amounts shown below are calculated as of December 31, 2020 based on facts (e.g. stock price, base salaries, awards outstanding, etc.) then existing. Named Executive Termination without cause, resignation for good reason or notice by IRT of non-renewal with release (1) Voluntary Termination (2) Disability (3) Death (4) Termination for cause (5) Termination without cause, resignation for good reason or notice by IRT of non-renewal after Change in Control with release (6) Scott F. Schaeffer $ 11,069,954 $ 6,657,094 $ 7,910,094 $ 7,910,094 $ — $ 12,529,531 James J. Sebra $ 4,234,427 $ — $ 2,873,788 $ 2,873,788 $ — $ 4,234,427 Farrell M. Ender $ 4,293,512 $ — $ 3,062,829 $ 3,062,829 $ — $ 4,293,512 Jessica K. Norman $ 1,082,510 $ — $ 533,928 $ 533,928 $ — $ 1,082,510 Jason R. Delozier $ 856,932 $ — $ 352,503 $ 352,503 $ — $ 856,932 (1) Under each Named Executive Officer employment agreement, Option Awards Stock Awards Name Number of Securities Underlying Unexercised Options (#) Exercisable Number of Securities Underlying Unexercised Options (#) Unexercisable Option Exercise Price ($) Option Expiration Date Number of Shares or Units of Stock That Have Not Vested (#) Market Value of Shares or Units of Stock That Have Not Vested ($) Equity Incentive Plan Awards Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards, Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Scott F. Schaeffer 16,000 - (1 ) 8.20 2/18/2020 - - - - 40,000 20,000 (2 ) 9.35 2/18/2020 6,667 (3 ) 67,267 - - - - - n/a 37,333 (4 ) 376,693 - - - - - n/a 27,203 (5 ) 274,478 122,416 (6 ) 1,235,174 James J. Sebra 32,000 16,000 (2 ) 9.35 2/18/2020 5,333 (3 ) 53,813 - - - - - n/a 18,667 (4 ) 188,347 - - - - n/a 12,242 (5 ) 123,522 55,087 (6 ) 555,828 Farrell M. Ender 50,000 25,000 (2 ) 9.35 2/28/2020 8,333 (3 ) 84,083 - - - - - n/a 37,333 (4 ) 376,693 - - - - n/a 10,881 (5 ) 109,789 48,966 (6 ) 494,070 Stock Awards Option Awards Name Number of Shares Acquired on Vesting (#) Value Realized on Vesting ($) Number of Shares Acquired on Exercise (#) Value Realized on Exercise ($) Scott F. Schaeffer 28,000 260,024 - - James J. Sebra 15,999 148,607 8,000 15,120 Farrell M. Ender 30,291 281,261 16,000 17,600 Each Named Executive Officer employment agreement defines “good reason” as, without the Named Executive Officer’s consent, any of the following events occurring: Named Executive Termination without cause, resignation for good reason or notice by IRT of non-renewal without release (1) Termination without cause, resignation for good reason or notice by IRT of non-renewal with release (2) Voluntary Termination (3) Disability (4) Death (5) Termination for cause (6) Termination without cause, resignation for good reason or notice by IRT of non-renewal after Change in Control without release (7) Termination without cause, resignation for good reason or notice by IRT of non-renewal after Change in Control with release (7) Scott F. Schaeffer $ — $ 5,432,497 $ — $ 1,546,697 $ 1,546,697 $ — $ — $ 5,432,497 James J. Sebra $ — $ 2,701,101 $ — $ 708,101 $ 708,101 $ — $ — $ 2,701,101 Farrell M. Ender $ — $ 2,556,897 $ — $ 909,097 $ 909,097 $ — $ — $ 2,556,897 a reduction in base salary of the Named ExecutiveOfficer. we material and willful breach of the Named Executive Officer employmentagreement. the relocation (without the written consent of the Named Executive Officer) of the Named Executive Officer’s principal place of employment by more than thirty-five (35) miles from its location on the effective date of the Named Executive Officer employmentagreement. • Mr. Schaeffer’s employment agreement also defines “good reason” as, without his consent: 2021 Proxy Statement | 53 his removal from the position of Chief Executive Officer or requiring him to report to any of our employees will be deemed to be a significant adverse alteration in the nature or status of his responsibilities); provided, however, that Mr. Sebra’s, Mr. Ender’s, Mr. Delozier’s and Ms. Norman’s respective employment agreements also define “good reason” as a significant adverse alteration in the nature or status of hisauthority, duties orresponsibilities. If a termination occurs in the circumstances described above and the Named Executive Officer executes and does not revoke a release described in each Named Executive Officer employment agreement, the Named Executive Officer is entitled to receive the following: The Named Executive Officer will receive a lump sum cash payment equal to a defined multiplier times the sum of (x) the Named Executive Officer’s base salary, as in effect immediately prior to his termination of employment and (y) the average annual cash bonus earned by the Named Executive Officer for the three year period immediately prior to his termination of employment, (or the average annual cash bonus earned by the Named Executive Officer for the actual number of completed fiscal years immediately prior to his termination of employment, if less than three). In Mr. Schaeffer’s employment agreement, the defined multiplier is 2.25x. In Mr. Sebra’s and Mr. Ender’s employment agreements, the defined multiplier is 2x. In Mr. Delozier’s and Ms. Norman’s employment agreements, the defined multiplier is 1.5x. The Named Executive Officer will receive a lump sum cash payment equal to a pro rata portion of the annual cash bonus, if any, that the Named Executive Officer would have earned for the fiscal year of his termination based on achievement of the applicable performance goals for such year. For a period of 18 months following the Named Executive Officer’s date of termination, provided the Named Executive Officer and his eligible dependents timely and properly elect to continue health care coverage under COBRA, the Named Executive Officer will continue to receive the medical coverage in effect at the date of his termination of employment (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rates as may be charged from time to time for employees of IRT generally, as if the Named Executive Officer had continued in employment with IRT during such period. Any equity awards that are then subject solely to time-vesting conditions will become fully vested as of the date of the Named Executive Officer’s termination of employment. In addition, under the terms of the PSU awards, outstanding PSUs will vest based on performance through the end of the calendar quarter immediately preceding the severance event, subject to pro-ration to reflect the portion of the performance period served prior to the severance event. The amounts shown in the table reflect the full vesting of time-based equity awards, the vesting of 2018 PSUs based on actual performance and the pro-rata vesting of 2019 and 2020 PSUs assuming target performance. (2) In this case, no further payments (other than the accrued benefits) will be due under the Named Executive Officer employment agreement, except that the Named Executive Officer will be entitled to receive his accrued benefits. However, under the PSU and 2020 RSU award agreements, an executive who has attained age 55 and completed at least 2021 Proxy Statement | 54 awards. The amounts shown in the table above reflect actual performance in respect of 2018 PSUs and assume target performance with respect to (3) If IRT terminates the Named Executive Officer’s employment for disability, the Named Executive Officer will be entitled to A lump sum cash payment equal to a pro rata portion of the Named Executive Officer’s target annual cash bonus for the fiscal year of his termination. The accrued benefits. Any equity awards are subject to the same treatment described above in the final bullet of footnote 1. Each Named Executive Officer employment IRT will pay to the A lump sum cash payment equal to a pro rata portion of the Named Executive Officer’s target annual cash bonus for the fiscal year of his death. The accrued benefits. Any equity awards are subject to the same treatment described above in the final bullet of footnote 1. Each Named Executive Officer employment agreement provides that IRT may terminate the Named Executive Officer’s employment at any time for cause upon written notice to If a termination without cause, a resignation with good reason or a non-renewal by IRT occurs within 18 months following a change-in-control, the Named Executive Officers will be entitled to the same payments and benefits as described above in footnote 1; provided that that in Mr. Schaeffer’s case, the severance multiplier described in the first bullet of that footnote 1 will be increased from 2.25x to 3x. For this purpose, “change in control” of IRT The acquisition (other than from IRT), by any person (as such term is defined in Section 13(c) or 14(d) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of IRT’s then outstanding voting securities; The individuals who, as of the effective date of the Named Executive Officer employment agreement, are members of the Board cease for any reason during any twelve month period to The closing of a reorganization, merger, consolidation or similar form of corporate transaction (each, a business combination) involving IRT if (i) the stockholders of IRT, immediately before such business combination, do not, as a result of such business combination, own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the entity resulting from such business combination in substantially the same proportion as their ownership of the combined voting power of the voting securities of IRT outstanding immediately before such business combination or (ii) immediately following the business combination, the individuals who comprised the Board immediately prior thereto do not constitute at least a 2021 Proxy Statement | 55 majority of the board of directors of the entity resulting from such business combination (or, if the entity resulting from such business combination is then a subsidiary, the ultimate parent thereof); The sale or other disposition of all or substantially all of the assets of IRT; or The consummation of a complete liquidation or dissolution of IRT. Our director compensation is designed with the goals of attracting and retaining highly qualified individuals to serve as independent directors and to fairly compensate them for their time and efforts. In 2020, our non-management directors received the following compensation for their service as directors: A standard non-management Board member retainer per yearof: $45,000 cash; and $75,000 worth of IRT stock; Lead Independent Director retainer per year of $20,000 cash Chair retainers per year of: $20,000 cash for the Audit CommitteeChair; $15,000 cash for the Compensation Committee Chair;and $10,000 cash for the Nominating CommitteeChair Committee member (other than the Chair) retainers per year of: $7,500 cash for the Audit Committeemembers; $5,000 cash for the Compensation Committee members;and $5,000 cash for the Nominating Committeemembers. Our directors are also reimbursed for their out-of-pocket expenses in attending Board and committee meetings and up to $3,500 annually for education activities. The following table sets forth information regarding the compensation paid or accrued by IRT during 2020 to each of our non-management directors: Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Total ($) William C. Dunkelberg, Ph.D 52,500 71,433 123,933 Melinda H. McClure 80,000 71,433 151,433 Mack D. Pridgen III 57,500 71,433 128,933 DeForest Soaries, Jr., D.Min 65,000 71,433 136,433 Richard D. Gebert 70,000 71,433 141,433 325,000 357,165 682,165 On May 13, 2020, our Compensation Committee made the Name Fees Earned or Paid in Cash ($) Stock Awards ($)(1) Total ($) 67,500 44,843 112,343 Melinda H. McClure 11,019 - 11,019 Mack D. Pridgen III 62,500 44,843 107,343 Richard H. Ross 35,000 44,843 79,843 DeForest Soaries, Jr., D.Min 55,000 44,843 99,843 Robert F. McCadden(2) 72,772 44,843 117,615 Richard D. Gebert 11,060 - 11,060 314,851 224,215 539,065 Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (1) (b) Weighted Average Exercise Price of Outstanding Options Warrants, and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) (2) Equity compensation plans approved by security holders 250,000 $ 9.28 3,439,073 Equity compensation plans not approved by security holders - n/a - Total 250,000 3,439,073 2021 Proxy Statement | 56 For 2021, after considering the levels of non-employee director compensation at our peer companies and consulting with their independent compensation consultant, our Compensation Committee has elected to maintain the same director compensation structure summarized above. Equity Compensation Plan Information The following table sets forth certain information regarding IRT’s equity compensation plans as of December 31, 2020. Plan Category (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (1) (b) Weighted Average Exercise Price of Outstanding Options Warrants, and Rights (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column(a)) Equity compensation plans approved by security holders 993,568 n/a 1,483,077 Equity compensation plans not approved by security holders - n/a - Total 993,568 1,483,077 (1) Includes PSUs and RSUs which remained subject to forfeiture at December 31, 2020. The weighted average exercise price in column (b) does not take the PSUs and RSUs into account, as they do not have an exercise price. The number of Proposal 3: Advisory Vote on Executive Compensation The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Dodd-Frank Act, enables our stockholders to vote to approve, on an advisory, nonbinding basis, the compensation of our named executive officers as disclosed in this proxy statement in accordance with the SEC’s rules. As described in detail above under the heading “Executive Officer and Director Compensation — Compensation Discussion and Analysis,” our executive compensation programs are designed to attract, retain and motivate our named executive officers, who are critical to our success. Under these programs, our named executive officers are rewarded for the achievement of annual and long-term strategic and corporate goals, and the realization of increased shareholder value. Please read the “Compensation Discussion and Analysis” and “Compensation Tables and Related Information” for additional details about our executive compensation programs, including information about the fiscal year 2020 compensation of our named executive officers. We are asking our stockholders to indicate their support for our named executive officer compensation as described in this proxy statement. This proposal, commonly known as a “say-on-pay” proposal, gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive 2021 Proxy officers and the philosophy, policies and practices described in this proxy statement. Accordingly, we will ask our stockholders to vote “FOR” the following resolution at the Annual Meeting: “RESOLVED, that the Company’s stockholders approve, on an advisory and non-binding basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the 2020 Summary Compensation Table and the other related tables and disclosure.” The say-on-pay vote is advisory, and therefore not binding on us, our Compensation Committee or our Board of Directors. Our Board of Directors and our Compensation Committee value the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation as disclosed in this proxy statement, we will consider our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are necessary to address those concerns. The Board of Directors unanimously recommends a vote “FOR” the approval of the compensation of our named executive officers, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission. 2021 Proxy Statement | 58 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS Our Board has delegated oversight of compliance with our code of ethics to our Audit Committee, including the review of related party transactions, potential and actual conflicts of interest and the granting of waivers to the code of ethics. Our Audit Committee is responsible, and has the full power of the Board, to approve or reject all related party transactions on our behalf. All related party transactions and any identified potential and actual conflicts of interest are to be reviewed and approved or rejected by our Audit Committee. Our Audit Committee may, in its discretion, engage independent advisors and legal counsel to assist it in its review when it deems it advisable. If our Audit Committee finds a conflict of interest to exist with respect to a particular matter, including a related party transaction, that matter is prohibited unless a waiver of this policy is approved under the waiver process described in the code of ethics. In determining whether a conflict of interest exists, our Bylaws provide that a director or officer has no responsibility to devote his or her full time to our affairs and that any director or officer, in his or her personal capacity or in a capacity as an affiliate, employee or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with ours. Any waiver of the code of ethics may be made only by the Audit Committee. Any such waiver for executive officers, those persons described in Item 5.05 of Form 8-K or directors will be promptly publicly disclosed to the extent required by law or stock exchange regulation. STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS Stockholder Proposals Submitted Pursuant to Rule 14a-8 To be considered for inclusion in our proxy statement and form of proxy for our 2022 annual meeting of stockholders pursuant to Rule 14a-8 of the Exchange Act, and acted upon at the 2022 annual meeting, stockholder proposals must be submitted in writing to the attention of our Secretary at our principal office, no later than December 1, 2021. In order to avoid controversy, stockholders should submit proposals by means (including electronic) that permit them to prove the date of delivery. Such proposals also need to comply with Rule 14a-8 of the Exchange Act and the interpretations thereof, and may be omitted from our proxy materials for the 2022 annual meeting if such proposals are not in compliance with applicable requirements of the Exchange Act. Director Nominations and Stockholder Proposals Not Submitted Pursuant to Rule 14a-8 Our Bylaws also establish advance notice procedures with regard to stockholder proposals or director nominations that are not submitted for inclusion in our proxy statement. With respect to such stockholder proposals or director nominations, a stockholder’s advance notice must be made in writing, must meet the requirements set forth in our Bylaws and must be delivered to, or mailed and received by, our Secretary at our principal office no earlier than the close of business on November 1, 2021 and no later than the close of business on December 1, 2021. However, in the event the 2022 annual meeting is scheduled to be held on a date before April 12, 2022, or after June 11, 2022, then such advance notice must be received by us not earlier than the close of business on the one hundred fiftieth (150th) calendar day prior to the date of such annual meeting and not later than the later of (i) the close of business on the one hundred twentieth (120th) calendar day prior to such annual meeting or (ii) the close of business on the tenth (10th) calendar day following the day on which public disclosure of the date of such annual meeting was first made by us (or if that day is not a business day for us, on the next succeeding business day). Each proposal submitted must be a proper subject for stockholder action at the annual meeting, and all proposals and nominations must be submitted to: Secretary, Independence Realty Trust, Inc., 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania, 19103. The stockholder proponent must appear in person to present the proposal or nomination at the meeting or send a qualified representative to present such proposal or nomination. 2021 Proxy Statement | 59 If a stockholder gives notice after the applicable deadlines or otherwise does not satisfy the relevant requirements of Rule 14a-8 of the Exchange Act or our Bylaws, the stockholder will not be permitted to present the proposal or nomination for a vote at the meeting. Discretionary Authority Pursuant to Rule 14a-4(c) of the Exchange Act If a stockholder who wishes to present a proposal before the 2022 annual meeting outside of Rule 14a-8 of the Exchange Act fails to notify us by the required dates indicated above for the receipt of advance notices of stockholder proposals and proposed director nominations, the proxies that our Board solicits for the 2022 annual meeting will confer discretionary authority on the person named in the proxy to vote on the stockholder’s proposal if it is properly brought before that meeting subject to compliance with Rule 14a-4(c) of the Exchange Act. If a stockholder makes timely notification, the proxies may still confer discretionary authority to the person named in the proxy under circumstances consistent with the SEC’s proxy rules, including Rule 14a-4(c) of the Exchange Act. A stockholder who wishes to submit recommendations for director candidates to the Nominating Committee should send a written recommendation to our principal office, attention: Secretary. Our Secretary will forward it to the Nominating Committee chair. The stockholder must provide the same information regarding the director candidate called for in our Bylaws for a director nomination and submit such recommendation within the time period in our Bylaws set forth for a director nomination. All stockholder recommendations received by the Nominating Committee will begin to be reviewed at the first meeting of the Nominating Committee held after receipt of all information required with respect to the recommendation. ANNUAL REPORT AND REPORT ON FORM 10-K Our 2020 annual report to stockholders, including the financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2020, was made available to stockholders of record as of March 25, 2021. Stockholders of record as of March 25, 2021, and beneficial owners of our common stock on that date, may obtain from us, without charge, a copy of our 2020 annual report to stockholders and our most recent Annual Report on Form 10-K filed with the SEC by a request to us in writing. Such requests may be made by writing to our Secretary, Jessica K. Norman, at 1835 Market Street, Suite 2601, Philadelphia, Pennsylvania 19103 or by calling Ms. Norman at (267) 270-4800. Beneficial owners must include in their written requests a good faith representation that they were beneficial owners of our common stock on March 25, 2021. Within the “Investor Relations” page of our website at http://irtliving.com, you can obtain, free of charge, a copy of our Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act as soon as reasonably practicable after we file such material electronically with, or furnish it to, the SEC. Information from our website is not incorporated by reference into this proxy statement. 2021 Proxy Statement | 60 APPENDIX A Funds From Operations (“FFO”) and Core Funds From Operations (“CFFO”) IRT believes that FFO and CFFO, each of which is a non-GAAP financial measure, are additional appropriate measures of the operating performance of a REIT and IRT in particular. IRT computes FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts, or NAREIT, as net income or loss (computed in accordance with GAAP), excluding real estate-related depreciation and amortization expense, gains or losses on sales of real estate and the cumulative effect of changes in accounting principles. CFFO is a computation made by analysts and investors to measure a real estate company’s operating performance by removing the effect of items that do not reflect ongoing property operations, including stock compensation expense, depreciation and amortization of other items not included in FFO, amortization of deferred financing costs, and other non-cash or non-operating gains or losses related to items such as debt extinguishment costs from the determination of FFO. IRT’s calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, IRT’s CFFO may not be comparable to CFFO reported by other REITs. IRT’s management utilizes FFO and CFFO as measures of IRT’s operating performance, and believes they are also useful to investors, because they facilitate an understanding of IRT’s operating performance after adjustment for certain non-cash or non-operating items that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare IRT’s operating performance between periods. Furthermore, although FFO, CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, IRT believes that FFO and CFFO provide investors with additional useful measures to compare IRT’s financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor CFFO should be considered as an alternative to net income as an indicator of IRT’s operating performance or as an alternative to cash flow from operating activities as a measure of IRT’s liquidity. Set forth below is a reconciliation of net income (loss) to FFO and Core FFO for the years ended December 31, 2020, 2019, and 2018 (in thousands, except per share data). For the Year Ended December 31, 2020 For the Year Ended December 31, 2019 For the Year Ended December 31, 2018 Amount Per Share (1) Amount Per Share (1) Amount Per Share (1) Funds From Operations: Net income $ 14,877 $ 0.16 $ 46,354 $ 0.51 $ 26,610 $ 0.30 Adjustments: Real estate depreciation and amortization 60,352 0.64 52,482 0.58 45,067 0.51 Loss on impairment (gain on sale) of real estate assets, net, excluding debt extinguishment costs (7,554 ) (0.08 ) (42,628 ) (0.47 ) (11,561 ) (0.13 ) Funds From Operations $ 67,675 $ 0.72 $ 56,208 $ 0.62 $ 60,116 $ 0.68 Core Funds From Operations: Funds From Operations $ 67,675 $ 0.72 $ 56,208 $ 0.62 $ 60,116 $ 0.68 Adjustments: Stock-based compensation 5,564 0.06 3,116 0.03 2,524 0.03 Amortization of deferred financing costs 1,448 0.02 1,423 0.02 1,430 0.02 Other depreciation and amortization 335 - 333 0.01 154 - Other expense (income) - - - - (52 ) - Abandoned deal costs 130 - - - - - Casualty losses 711 - - - - - Debt extinguishment costs included in net gains on sale of assets - - 7,417 0.08 911 0.01 Core Funds From Operations $ 75,863 $ 0.80 $ 68,497 $ 0.76 $ 65,083 $ 0.74 (1) Based on 94,430,935, 90,680,212, and 88,289,110 weighted average shares and units outstanding for the years ended December 31, 2020, 2019, and 2018, respectively. Net Operating Income IRT believes that Net Operating Income (“NOI”), a non-GAAP financial measure, is a useful supplemental measure of its operating performance. IRT defines NOI as total property revenues less total property operating expenses, excluding interest expenses, depreciation and amortization, property management expenses, and general and administrative expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, IRT’s NOI may not be comparable to other REITs. IRT believes that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income insofar as the measure reflects only operating income and expense at the property level. IRT uses NOI to evaluate performance on a same store and non-same store basis because NOI measures the core operations of property performance by excluding corporate level expenses, financing expenses, and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of IRT’s financial performance. Same Store Properties and Same Store Portfolio IRT reviews its same store portfolio at the beginning of each calendar year. Properties are added into the same store portfolio if they were owned at the beginning of the previous year. Properties that are held-for-sale or have been sold are excluded from the same store portfolio. Twelve-Months Ended December 31 (a) 2020 2019 % change Revenue: Rental and other property revenue $ 189,214 $ 182,599 3.6 % Property Operating Expenses Real estate taxes 23,619 22,726 3.9 % Property insurance 4,123 3,688 11.8 % Personnel expenses 17,820 17,179 3.7 % Utilities 10,490 9,882 6.2 % Repairs and maintenance 6,561 6,354 3.3 % Contract services 7,433 6,749 10.1 % Advertising expenses 1,974 1,930 2.3 % Other expenses 2,181 2,497 -12.7 % Total operating expenses 74,201 71,005 4.5 % Net operating income $ 115,013 $ 111,594 3.1 % NOI Margin 60.8 % 61.1 % -0.3 % Average Occupancy 93.6 % 93.4 % 0.2 % Average effective monthly rent, per unit $ 1,105 $ 1,068 3.5 % Reconciliation of Same-Store Net Operating Income to Net income Same-store portfolio net operating income (a) $ 115,013 $ 111,594 Non same-store net operating income 13,176 11,458 Other revenue 739 603 Property management expenses (8,494 ) (7,726 ) General and administrative expenses (15,095 ) (12,745 ) Depreciation and amortization (60,687 ) (52,815 ) Abandoned deal costs (130 ) — Casualty losses (711 ) — Interest expense (36,488 ) (39,226 ) Gain on sale (loss on impairment) of real estate assets, net 7,554 35,211 Net income $ 14,877 $ 46,354 Set forth below is a reconciliation of same store net operating income to net income (loss) available to common shares for the years ended December 31, 2020 and 2019 (in thousands, except per unit data). (a) Same store portfolio for the years ended December 31, 2020 and 2019 includes 51 properties, which represent 14,189 units. EBITDA and Adjusted EBITDA Each of EBITDA and Adjusted EBITDA is a non-GAAP financial measure. EBITDA is defined as net income before interest expense including amortization of deferred financing costs, income tax expense, and depreciation and amortization expenses. Adjusted EBITDA is EBITDA before certain other non-cash or non-operating gains or losses related to items such as asset sales, debt extinguishments and acquisition related debt extinguishment expenses, casualty losses, and abandoned deal costs. We consider each of EBITDA and Adjusted EBITDA to be an appropriate supplemental measure of performance because it eliminates interest, income taxes, depreciation and amortization, and other non-cash or non-operating gains and losses, which permits investors to view income from operations without these non-cash or non-operating items. Our calculation of Adjusted EBITDA differs from the methodology used for calculating Adjusted EBITDA by certain other REITs and, accordingly, our Adjusted EBITDA may not be comparable to Adjusted EBITDA reported by other REITs. Net Debt Net debt, a non-GAAP financial measure, equals total debt less cash and cash equivalents. We present net debt because management believes it is a useful measure of our credit position and progress toward reducing leverage. The calculation is limited because we may not always be able to use cash to repay debt on a dollar for dollar basis. Set forth below is a reconciliation of net income to net debt to adjusted EBITDA (proforma) the quarter ended December 31, 2020 (in thousands). ADJUSTED EBITDA: December 31, 2020 Net income (loss) $ 13,360 Add-Back (Deduct): Depreciation and amortization 15,396 Interest expense 8,872 Net loss on impairment (gain on sale) of real estate assets (9,394 ) Abandoned deal costs — Casualty losses 300 Adjusted EBITDA $ 28,534 Total debt $ 945,686 Less: cash and cash equivalents (8,751 ) Total net debt $ 936,935 Net debt to Adjusted EBITDA (pro forma) (a) 8.2x (a) Reflects pro forma net debt to Adjusted EBITDA for the APPENDIX B ANNUALMEETING OF STOCKHOLDERS OF INDEPENDENCE REALTYTRUST, INC. May 12,2021 PROXY VOTING INSTRUCTIONS INTERNET -Access“www.voteproxy.com”andfollowtheon-screen instructions or scan the QR code withyour smartphone. Have your proxy cardavailablewhen you access the webpage. Vote online until11:59PMEDTthe daybefore the meeting. MAIL -Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON -You may vote your shares in person by attending theAnnual Meeting. GO GREEN -e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy onlineaccess. COMPANY NUMBER ACCOUNT NUMBER IMPORTANT NOTICE REGARDING THE AVAILABILITYOF PROXYMATERIALS FORTHE STOCKHOLDERMEETINGTO BEHELDON MAY12, 2021: The notice of annual meeting, proxy statement and annual reportto stockholders are available athttp://www.proxydocs.com/irt Please detach alongperforatedline and mailin the envelope providedIF you are not voting via the Internet. 00033333333030000000 1 051221 THE BOARD OF DIRECTORS RECOMMENDSAVOTE "FOR" THE ELECTION OF DIRECTORSAND "FOR" PROPOSALS 2AND 3. PLEASE MARK, SIGN, DATEAND MAILYOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INKAS SHOWN HERE x THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF PROPERLY EXECUTED, BUT NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR EACH NOMINEE AND FOR PROPOSALS 2 AND 3. THE VOTES ENTITLED TO BE CAST BYTHE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT ORADJOURNMENT THEREOF. 1. ELECTIONOFDIRECTORS FOR AGAINST ABSTAIN ScottF. Schaeffer William C. Dunkelberg RichardD. Gebert Melinda H.McClure MackD.PridgenIII DeForestB. Soaries, Jr. Lisa Washington 2. THE BOARD OF DIRECTORS RECOMMENDS: A VOTE FOR RATIFICATION OF THE APPOINTMENT OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTEREDPUBLICACCOUNTINGFIRMFORTHEYEARENDINGDECEMBER 31, 2021. 3. THE BOARD OF DIRECTORS RECOMMENDS: A VOTE FOR THE ADVISORY VOTETOAPPROVETHECOMPANY’SEXECUTIVECOMPENSATION. 4. TO VOTE AND OTHERWISE REPRESENT THE UNDERSIGNED ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY POSTPONEMENT(S) OR ADJOURNMENT(S)THEREOFINTHE DISCRETIONOFTHE PROXYHOLDER. Tochangethe addresson your account,please checkthe boxatrightand indicate your new address in the address space above. Please note that changestotheregisteredname(s)ontheaccountmaynotbesubmittedviathis method. Signature ofStockholder Date: Signature of Stockholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When shares are heldjointly, eachholder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. Ifthe signer is acorporation,please sign full corporate name byduly authorized officer,givingfulltitle as such. If signer is apartnership, please sign in partnership name by authorizedperson. INDEPENDENCE REALTY TRUST, INC. PROXY THIS PROXYIS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INDEPENDENCE REALTYTRUST, INC. The undersigned hereby appoints Scott F. Schaeffer and James J. Sebra, and each of them, acting individually, as proxies for the undersigned, each with the power to appoint such proxy’s substitute, and hereby authorizes them, or either of them, to vote all of the shares of Common Stock of Independence Realty Trust, Inc. ("IRT") held of recordbythe undersigned on March25, 2021 attheAnnualMeeting ofStockholders ofIRT, to be held at9:00A.M. on Wednesday, May 12, 2021 at 1835 Market Street, Suite 2601, Philadelphia, PA 19103, and at any and all adjournments or postponements thereof as set forth on the reverse side hereof. The Board of Directors of the Company recommends that stockholders vote FOR the election of the Board of Director nominees named; FOR the ratification of the appointment of KPMG LLP as the Company's independent registered public accounting firm for the year ending December 31, 2021; and FOR the advisory resolution to approve the Company's executive compensation. This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If properly executed, but no direction is made, this Proxy will be voted FOR each nominee and FOR proposals 2 and 3. The votes entitled to be cast by the undersigned will be cast in the discretion of the Proxy holder on any other matter that may properly come before the meeting or any postponement(s) or adjournment(s) thereof. (Continued and to be signed on the reverse side) 1.1 14475 ImportantNoticeofAvailabilityofProxyMaterialsfortheStockholderMeetingof INDEPENDENCEREALTYTRUST,INC. ToBeHeldOn Wednesday,May12,2021at9:00a.m.EDT 1835MarketStreet, Suite 2601, Philadelphia, PA19103 COMPANYNUMBER ACCOUNTNUMBER CONTROLNUMBER This stockholder meeting notice and communication presents only an overview of the more complete proxy materials that are available to you on the Internet. We encourage you to access and review all of the important information contained in the proxy materialsbeforevoting. Ifyouwanttoreceiveapaperore-mailcopyoftheproxymaterialsyoumustrequestone.Thereisnochargetoyouforrequestinga copy.Tofacilitatetimelydeliverypleasemaketherequestasinstructedbelowbefore04/30/21. Pleasevisithttp://www.proxydocs.com/irt,wherethefollowingmaterialsareavailableforview: •Notice of Annual Meeting of Stockholders •Proxy Statement •Form of Electronic Proxy Card •Annual Report TOREQUESTMATERIAL: TELEPHONE: 888-Proxy-NA(888-776-9962)718-921-8562(forinternationalcallers) E-MAIL: info@astfinancial.com WEBSITE: https://us.astfinancial.com/OnlineProxyVoting/ProxyVoting/RequestMaterials TOVOTE: ONLINE: To access your online proxy card, please visit www.voteproxy.com and follow the on-screen instructions or scan the QR code with your smartphone. You may enter your voting instructions at www.voteproxy.com up until 11:59 PM EDT the day before the meeting date. INPERSON:You may vote your shares in person by attending the Annual Meeting. For directions to the Annual Stockholder Meeting, you may contact IRT's Investor Relations at (212) 277-4322. MAIL:You may request a card by following the instructions above. Thepurposeofthemeetingistoconsiderandactonthefollowing: 1. ELECTION OF DIRECTORS Scott F. Schaeffer William C. Dunkelberg Richard D. Gebert Melinda H. McClure Mack D. Pridgen III DeForest B. Soaries, Jr. Lisa Washington 2. THEBOARDOFDIRECTORSRECOMMENDS:AVOTEFORRATIFICATIONOFTHEAPPOINTMENTOF KPMG LLPAS THE COMPANY’S INDEPENDENT REGISTERED PUBLICACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021. 3. THE BOARD OF DIRECTORS RECOMMENDS: A VOTE FOR THE ADVISORY VOTE TO APPROVE THE COMPANY’S EXECUTIVE COMPENSATION. 4. TO VOTE AND OTHERWISE REPRESENT THE UNDERSIGNED ON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF IN THE DISCRETION OF THE PROXY HOLDER. Pleasenotethatyoucannotusethisnoticetovotebymail. 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.2018 Base SalaryExecutive
Weighting
Weighting
Payout
Payout
Payout
(0% of Target)
(150% of Target)Scott F. Schaeffer$700,000Farrell M. Ender$ 400,000James J. Sebra$ 400,000
Award
Award2018 Cash Bonus AwardsOur annual cash bonus sets forth a target cash bonus award level for each named executive participant composed of two components, as described below: “Objective/Formulaic Component” – the objective/formulaic component of the 2018 cash bonus award that may be earned by each named executive will be determined by IRT’s performance relative to specified objective performance criteria established by the compensation committee as described below. “Subjective Component” – the subjective component of the 2018 cash bonus award may be determined based on the compensation committee’s subjective evaluation of such participant’s performance. Allocation of Components and Calculation of the 2018 Cash Bonus Awards. The 2018 cash bonus awards are allocated 75% to the objective/formulaic component and 25% to the subjective component for Messrs. Schaeffer and Ender and 60% to the objective/formulaic component and 40% to the subjective component for Mr. Sebra. The amount of the 2018 cash bonus award of any named executive will be calculated by: (a) determining the sum of the results of multiplying the 2018 weighting for each metric (described below) by the relevant percentage (described below) achieved with respect to each metric, (b) multiplying such sum by the applicable objective criteria allocation percentage to obtain a percentage referred to as the “objective criteria bonus earned”, (c) determining the result of multiplying the subjective criteria relevant percentage by the applicable subjective criteria allocation percentage to obtain a percentage referred to as the “subjective criteria bonus earned”, (d) multiplying the 2018 base salary of the relevant named executive by the sum of the objective criteria bonus earned and the subjective criteria bonus earned. 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:
SalaryObjective/Formulaic CriteriaThe 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:Objective Performance Criteria2018 WeightingCORE FFO per share40%The increase in same store property net operating income as compared to the previous year20%Property net operating income margin15%General and Administrative expenses (excluding stock based compensation) as a percentage of revenues15%IRT’s ratio of net debt to Adjusted EBITDA10%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 CriteriaThe 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:oLeadership and Team DevelopmentoStrategic VisionoManagement of External RelationshipsoDiversity and InclusionoRelationship with the Board of DirectorsoFinancial FlexibilitySee “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 AwardsThe 2018 equity awards granted by the compensation committee in 2018 under the equity program consisted of the following two components:•“Performance Component” - 75% of the value of each named executive’s 2018 equity awards will be based on the attainment of 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. This component consists of performance share unit awards, or the 2018 PSUs, authorized by the compensation committee under the equity program adopted pursuant to the LTIP, with the number of shares of our common stock issued or their equivalent value in cash paid, at the compensation committee’s option, at the conclusion of the relevant performance period.“Time-Based Component” - The remaining 25% of the 2018 equity awards will be time-based. This component consists of restricted stock awards, or the 2018 stock awards, authorized by the compensation committee under the equity program adopted pursuant to the LTIP. The shares of our common stock subject to the 2018 stock awards will vest 25% per annum on the first four anniversaries from the date of grant.2018 PSUsThe 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.Performance Criteria2018 WeightingThresholdPerformance CriteriaTargetMaximumRelative 3-year TSR70%30th Percentile50th Percentile75th PercentileStrategic Objectives30%SubjectiveRelative 3-year TSRFor 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. 2021 Proxy Statement | 44Subjective CriteriaThe 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 awardsThe 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 awardsThe 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.”Implementing Objectives of Our Compensation PoliciesWe 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.Pay GovernanceIRT seeks to maintain pay practices that foster good governance, which are demonstrated by:Alignment with Shareholders: Executive pay is aligned with shareholder value through the use of incentive plans and equity compensation.Hedging/Pledging Policies: We maintain policies contained in our insider trading policy prohibiting speculative transactions in IRT securities such as short sales, transactions in puts, calls or other derivative securities on an exchange or in any other organized market, certain forms of hedging or monetization transactions and restrictions on the use of margin accounts and pledges.Independent Compensation Consultant: We have engaged an independent compensation consulting firm that does not provide any services to management and that our compensation committee found to be independent after evaluating factors relevant to the firm’s independence set forth in the compensation committee’s charter, including the firm’s relationship with RAIT.Clawback Practices: All grants under the incentive award plan are subject to the provisions of any applicable clawback or recoupment terms or policies, share trading policies and other policies that may be approved by the board or the compensation committee, as such policies may be in effect from time to time.No 280G Tax Gross-Ups: We do not provide any tax gross-up provision relating to parachute payments (as defined in IRC Section 280G) in our employment agreements.Impact of 2017 Stockholder Advisory VotesSay-On-Pay VoteAt our 2017 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 (approximately 95%) that cast votes on this proposal approved the compensation of our named executives as described in our proxy statement for the 2017 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 2017.Say-on-Pay-Frequency VoteAt 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 provided 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. Peer GroupsThe 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 nine 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 ten 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:American Campus Communities, Inc.Apartment Investment and Management CompanyAvalonBay Communities, Inc.Camden Property TrustEducation Realty Trust, Inc.Equity ResidentialEssex Property Trust, Inc.Mid-America Apartment Communities, Inc.UDR, Inc.The size-based peer group was comprised of:Armada Hoffler Properties, Inc.Cedar Realty Trust, Inc.Chatham Lodging TrustEasterly Government Properties, Inc.First Potomac Realty TrustRexford Industrial Realty, Inc.STAG Industrial, Inc.Terreno Realty CorporationTIER REIT, Inc.Urstadt Biddle Properties Inc.Internal Pay EquityIn 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 asdefined 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 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 equity awards in 2017 and 2018 are described above. We expect to make awards similar to the 2018 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-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 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. 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 implemented 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 mix of compensation, which tended to be balanced with an emphasis toward rewarding long term performance;The use of multiple performance metrics that are closely aligned with strategic business goals in the annual and long-term incentive plans;The use of discretion as a means to adjust compensation to reflect performance or other factors;Multi-year time vesting on equity awards which requires long term commitment on the part of employees;Incentive awards made under the incentive award plan to any participant are capped on an annual basis under the terms of the incentive award plan;In 2017 with the assistance of FPL, the compensation committee began identifying peer groups to ensure the compensation programs are consistent with industry practice; andThe Effect of Regulatory Requirements on Our Executive Compensation2021 Proxy Statement | 46IRC Section 162(m). The compensation committee periodically reviews the potential implications of IRC Section 162(m). Under 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 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). For years beginning after December 31, 2017, the employees covered by IRC Section 162(m) 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. For fiscal year 2017, the compensation committee structured a 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 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 annual cash bonus plan and the equity 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 accountingrules). In addition, each NEO employment agreement includes a clawback provision described below. See “Employment Agreements-Clawback” below.compensation committeeCompensation 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 committeeCompensation Committee recommended to Independence Realty Trust, Inc.’s (“IRT”) boardthe Board of directorsDirectors that the Compensation Discussion and Analysis be included in IRT’s annual reportour Annual Report on Form 10-K for 20172020 and IRT’s 2018in our 2021 proxy statement. This report is provided by the following independent directors who comprise the committee:Compensation Committee:DeForest B. Soaries, Jr., D. Min, ChairmanMelinda H. McClureMack D. Pridgen IIIExecutive Officer CompensationWe provide below summary information about compensation expensed or accrued by IRT during the fiscal year ended December 31, 2017, for the following persons, who we refer to as the named executives:The person who served as our chief executive officer during 2017: Scott F. SchaefferThe person who served as our chief financial officer during 2017: James J. Sebra; andThe person who served as our president during 2017: Farrell M. Ender.There were no other executive officers of IRT serving at the end of the fiscal year ended December 31, 2017.Summary Compensation Table (1)For 2017 for Mr. Sebra, reflects the portion of the named executive’s salary paid by IRT subsequent to March 31, 2017, the date Mr. Sebra became a full-time employee of IRT. For 2016, reflects the portion of the named executive’s salary that was paid by IRT for the period subsequent to the December 20, 2016 management internalization. (2)For 2017, reflects the qualitative component of the named executive officer’s 2017 Cash Bonus Award. For 2016, reflects the portion of the named executive’s discretionary bonus that was paid by IRT. (3)We report all equity awards at their full grant date fair value in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation.” For restricted stock awards, the fair value was calculated based on the NYSE market price for our common stock on the grant date for the award. For PSUs, the fair value on the date of grant was estimated using a Monte Carlo simulation model. For 2017, amounts shown include the following grant date fair value amounts:Scott F. Schaeffer –$656,392 PSUs and $249,996 restricted stock awardJames. J. Sebra – $262,557 PSUs and $112,504 restricted stock awardsFarrell M. Ender – $295,377 PSUs and $105,731 restricted stock awards(4)This column represents the aggregate grant date fair value of SARs granted to each of the named executives in 2015 computed in accordance with FASB ASC Topic 718, “Compensation-Stock Compensation.” The amount of the award was based on a Black-Scholes Option pricing model on the date of grant.(5)Amount shown reflect the quantitative component of the named executive officer’s 2017 Cash Bonus Award.(6)The following table describes the components of the amounts set forth in the “All Other Compensation” column in the Summary Compensation Table.Grants of Plan-Based Awards in 2017The following table provides information about plan-based awards granted to the named executives in 2017.(1)These columns represent the potential value of the payout for each eligible officer if the threshold, target, or maximum goals are satisfied under the quantitative bonus components of the Annual Cash Bonus plan, as described above in the “Compensation Discussion Analysis” section. The amounts actually earned by each eligible officer with respect to 2017 performance under the Annual Cash Bonus plan are reported in the Bonus (for the qualitative component) and Equity the Summary Compensation Table above.(2)These columns represent the potential number of common shares earned by each eligible officer if the threshold, target, or maximum goals are satisfied with respect to the 2017 PSUs. The actual number of common shares issued pursuant to the 2017 PSUs will be determined as of December 31, 2019 based on achievement of the performance criteria over the 2017-2019 performance period, and will vest 50% at such time and 50% on February 28, 2021.(3)This column shows the number of restricted common stock awards granted in 2017 to the named executives. These restricted common stock awards vest in four equal annual installments on the anniversary of the grant date (subject to earlier termination if the named executive’s employment ends).(4)This column shows the full grant date fair value of restricted common stock awards under FASB ASC Topic 718 granted to the named executives in 2017. Generally, the full grant date fair value is the amount that IRT expenses in its financial statements over the award’s vesting schedule. These amounts reflect our accounting expense, and do not correspond to the actual value thatwill be recognized by the named executives. The full grant date fair value of the restricted common stocks was the closing price of shares of our common stock on the grant date multiplied by the number of restricted common stock awards.Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table We provide additional disclosure below of factors relating to the Summary Compensation Table and Grantsabove.Plan-Based Awards, including descriptionscommon shares earned by each eligible officer if the threshold, target, or maximum goals are satisfied with respect to the 2020 PSUs. The actual number of the employment agreements of the named executives. CEO Pay RatioIn August 2015,common shares issued pursuant to the requirements2020 PSUs will be determined as of December 31, 2022 based on achievement of the Dodd-Frank Act,performance criteria over 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,2020-2022 performance period, and equity awards for all individuals who were employed by the Companyany shares then earned will vest 50% at such time and 50% on December 31, 2017, other than2023, subject generally to the grantee’s continued service through that date.CEO. We included all active employeesfinancial statements over the award’s vesting schedule. These amounts reflect our accounting expense, and annualizeddo not correspond to the compensation for any employees who were not employedactual value that will be realized by the Company forNamed Executive Officers. The full grant date fair value of the full 2017 calendar year. After identifyingrestricted common stock was the median employee basedclosing price of shares of our common stock 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 ingrant date multiplied by the above Summary Compensation Table.number of restricted common stock awards.Employment AgreementsIRT has entered into the NEO employment agreementsEnder.Ender, these restricted common stock awards vest in two equal annual installments on February 23, 2021 and February 23, 2022. For Ms. Norman and Mr. Delozier, these restricted common stock awards vest on February 8, 2021.post-terminationother 50% of the earned 2018 PSUs were distributable immediately following the end of the performance period and severance provisionsincluded in the “Options Exercised and Stock Vested in 2020” table below.agreements are discussed in “Potential Payments on Termination or Change-In-Control” below.equity awards. Accordingly, if he provides at least six months’ advance notice of termination and executes a release and additional non-compete agreement at the time of his retirement, these awards will not be forfeited even if he retires prior to the otherwise applicable vesting date. Term. Each NEOhas an initial three-yearwe may terminate a Named Executive Officer’s employment term from its effective date and provides that it will continue to be effective for successive one-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 IRTat any time without cause orupon not less than sixty days’ prior written notice to the Named Executive Officer. In addition, the Named Executive Officer may initiate a termination of employment by resigning for cause.good reason. The named executive can voluntarily terminate hisNamed Executive Officer must give us not less than sixty days’ prior written notice of such resignation. In addition, we may initiate a termination of 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 theapplicable employment agreement for Mr. Sebra was March 31, 2017,to the date of his resignation from RAIT.Duties. Mr. Schaeffer’sNamed Executive Officer, as described above. If the Named Executive Officer does not deliver the release described in each Named Executive Officer employment agreement provides that heand described below in these circumstances, we refer to the termination as a no-release termination. Upon any no-release termination, the Named Executive Officer is entitled to receive only the amount due to the Named Executive Officer under our then current severance pay plan for employees, if any. We currently have no severance pay plan in place for employees. No other payments or benefits will continuebe due to serve as the chief executive officer of IRT during his employment term. Mr. Schaeffer also agrees inNamed Executive Officer under his employment agreement to continue to serve asother than (i) the chairmanNamed Executive Officer’s base salary due through his date of termination, (ii) any earned but unpaid annual bonus for the board, subjectyear preceding the fiscal year of termination, (iii) any amounts owing 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 himNamed Executive Officer for reimbursement of expenses properly incurred by the board. Mr. Schaeffer’s employment agreement provides that he will serve as a memberNamed Executive Officer prior to his date of the board during his employment term, subject to the IRT stockholders’ election of Mr. Schaeffer to the boardtermination; 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(iv) any meeting of the IRT stockholders where the election of the members of the board is includedbenefits accrued and earned 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.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 underaccordance with the terms and conditions 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 welfareour applicable 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.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:Directly or indirectly, own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be connected as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit the named executive’s name to be used in connection with any competing business within any state in which IRT, and/or its affiliates, currently engage in any substantial business activity or any state in which IRT, and/or its affiliates, engaged in any substantial business activity during the 36 month period preceding the date the named executive’s employment terminates. All the NEO employment agreements provide that the non-competition provision will not prohibit the passive ownership by the named executive of not more than five percent (5%) of the capital stock of any corporation which is engaged in any competing business having a class of securities registered pursuant to the Exchange Act. Mr. Schaeffer’s employment agreement provides that IRT recognizes that he currently has an ownership position in two multifamily rental properties and that he may invest in additional commercial real estate properties but only after giving IRT the right to make the investment on the same terms and conditions as Mr. Schaeffer.Solicit or divert to any competing business any individual or entity which is an active or prospective customer of IRT, and/or its affiliates, or was such an active or prospective customer at any time during the preceding twelve (12) months.Employ, attempt to employ, solicit or assist any competing business in employing any employee of IRT, and/or its affiliates, whether as an employee or consultant.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 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 paidNamed Executive Officer participated prior 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 ahis termination of employment for purposes of determiningemployment. We refer to these collectively as 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.accrued benefits.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.Outstanding Equity Awards at 2017 Fiscal Year-EndThe following table provides information on the holdings of outstanding equity awards by the named executives at December 31, 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.(1)These SARs are fully vested.(2)These SARs vested on February 18, 2018.(3)These restricted common stock awards vested on February 18, 2018.(4)These restricted common stock awards vest in two equal annual installments on February 12, 2018 and February 12, 2019.(5)These restricted common stock awards vest in four equal annual installments on February 28, 2018, February 28, 2019, February 28, 2020, and February 28, 2021.(6)The PSUs are earned over a three-year performance period ending December 31, 2020, with 50% of the awards vesting at the end of that three-year period and the remaining 50% vesting over an additional one-year time vesting period. The unvested number of awards assumes performance at the maximum level. The actual number of units earned based on actual performance ranges from 0%-150% of target. Option Exercises and Stock Vested in 2017The following table provides information on the number of shares acquired by the named executives upon the vesting of restricted common stock awards and the exercise of stock appreciation rights, along with the value realized at that time before payment of any applicable withholding taxes and brokerage commission in 2017.Potential Payments on Termination or Change-In-ControlAs noted under “Executive Compensation—Narrative to Summary Compensation Table—Employment Agreements,” we have entered into the NEO employment agreements with our named executives. These agreements provide for payments and other benefits if a named executive’s employment with us is terminated under circumstances specified in his respective agreement, including a “change in control” of IRT (as defined in the agreement). A named executive’s rights upon the termination of his employment will depend upon the circumstances of the termination. The tables below summarize these rights and the amount of any payments and benefits due under the circumstances specified for the named executive indicated.(1)Under each NEO employment agreement, IRT may terminate a named executive’s employment at any time without cause (defined in footnote 6 below) upon not less than sixty days’ prior written notice to the named executive. In addition, the named executive may initiate a termination of employment by resigning for good reason. The named executive must give IRT not less than sixty days’ prior written notice of such resignation. In addition, IRT may initiate a termination of employment by sending a notice of non-renewal of the applicable employment agreement to the named executive, as described above. If the named executive does not deliver the release described in each NEO employment agreement and described in footnote 2 below in these circumstances, we refer to the termination as a no-release termination. Upon any no-release termination, the named executive is entitled to receive only the amount due to the named executive under IRT’s then current severance pay plan for employees, if any. No other payments or benefits will be due to the named executive under his employment agreement other than (i) the named executive’s base salary due through his date of termination, (ii) any earned but unpaid annual bonus for the year preceding the fiscal year of termination, (iii) any amounts owing to the named executive for reimbursement of expenses properly incurred by the named executive prior to his date of termination; and (iv) any benefits accrued and earned in accordance with the terms and conditions of any applicable benefit plans and programs of IRT in which the named executive participated prior to his termination of employment. We refer to these collectively as the accrued benefits. Each NEO employment agreement defines “good reason” as, without the named executive’s consent, any of the following events occurring:a reduction in base salary of the named executive.IRT’s material and willful breach of the NEO employment agreement.the relocation (without the written consent of the named executive) of the named executive’s principal place of employment by more than thirty-five (35) miles from its location on the effective date of the NEO employment agreement.• a significant adverse alteration in the nature or status of his authority, duties or responsibilities (and his removal from the position of chief executive officer or requiring him to report to any employee of IRT will be deemed to be a significant adverse alteration in the nature or status of his responsibilities); provided, however, that the election by the board of a different person to serve as chairman will not be deemed to be such an alteration so long as (i) Mr. Schaeffercontinues to have his duties assigned to him by the board and (ii) no executive officers or other employees of IRT have their duties assigned to them by the chairman.Mr. Sebra’s and Mr. Ender’s respective employment agreements also define “good reason” as a significant adverse alteration in the nature or status of his authority, duties or responsibilities.responsibilities (andEach NEO employment agreement provides(i) good reasonthe election by the Board of a different person to serve as Chair will not be deemed to exist unless notice of termination on account thereof (specifyingbe such an alteration so long as (i) Mr. Schaeffer continues to have his duties assigned to him by the Board and (ii) no executive officers or our other employees have their duties assigned to them by theChair.60 days but no more than 90 days from15 years of service will be deemed “retirement eligible.” Upon retirement of a grantee who has satisfied these conditions, outstanding PSUs will remain outstanding and vest (on a pro-rata basis, with respect to 2019 PSUs, and without pro-ration, with respect to 2020 PSUs) based on actual performance through the dateend of such notice)the performance period. In addition, otherwise applicable service-based vesting conditions would not apply to 2020 RSUs and earned 2018 PSUs. Mr. Schaeffer is given no later than 90 days afterretirement eligible, so the time at whichamount shown in this column for him reflects the event or condition purportedly giving riseabove-described treatment for his equitygood reason first occurs or arises2019 and (ii) if there exists (without regard2020 PSUs.this clause (ii)) an event or condition that constitutes good reason, IRT will have 30 days fromreceive the date notice of such a termination is given to cure such event or condition and, if IRT does so, such event or condition will not constitute good reason.(2)If a termination occurs in the circumstances described in footnote 1 above and the named executive executes and does not revoke a release described in each NEO employment agreement, the named executive is entitled to receive, in lieu of any payments or benefits due to him under IRT’s then current severance pay plan for employees (if any), the following:The named executive will receive a lump sum cash payment equal to a defined multiplier times the sum of (x) the named executive’s base salary, as in effect immediately prior to his termination of(4)and (y) the average annual cash bonus earned by the named executive for the three year period immediately prior to his termination of employment, or the average annual cash bonus earned by the named executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three; provided, however,agreement provides that if the named executive has beenNamed Executive Officer dies while employed by IRT, for less than one completed fiscal year prior to his termination of employment, then the amount used for clause (y) will be the named executive’s target annual cash bonus for the fiscal year of his termination of employment. One half of the amount described in the preceding sentence will be consideration for the named executive’s entering into the restrictive covenants described above. In Mr. Schaeffer’s employment agreement, the defined multiplier is 2.25x or, if a change in control has occurred within 18 months prior to the termination, the defined multiplier is 3x. In Mr. Sebra’s and Mr. Ender’s employment agreements, the defined multiplier is 2x.The named executive will receive a lump sum cash payment equal to a pro rata portion of the annual cash bonus, if any, that the named executive would have earned for the fiscal year of his termination based on achievement of the applicable performance goals for such year, or the cash bonus. The pro-rated cash bonus will be determined by multiplying the cash bonus by a fraction, the numerator of which is the number of days during which the named executive was employed by IRT in the fiscal year of his termination of employment and the denominator of which is 365.For a period of 18 months following the named executive’s date of termination, provided the named executive and his eligible dependents timely and properly elect to continue health care coverage under COBRA, the named executive will continue to receive the medical coverage in effect at the date of his termination of employment (or generally comparable coverage) for himself and, where applicable, his spouse and dependents, at the same premium rates as may be charged from time to time for employees of IRT generally, as if the named executive had continued in employment with IRT during such period.The treatment of any outstanding equity awards held by the named executive will be determined in accordance with the terms of the applicable incentive plan and the applicable award agreements; provided, however, that any such equity awards that are subject solely to time-vesting conditions will become fully vested as of the date of the named executive’s termination of employment. Each of the named executives 2017 PSUs and 2018 PSUs provide for modification upon any defined qualified termination or retirement as described above. As the 2018 PSUs were not outstanding at December 31, 2017, they are not included in the amounts payable upon termination.(3)Each NEO employment agreement provides that a named executive may voluntarily terminate his employment for any reason upon 60 days’ prior written notice or by sending a notice of non-renewal of such NEO employment agreement to IRT. In any such event, after the effective date of such termination, except with respect to a resignation for good reason, no further payments will be due under the NEO employment agreement, except that the named executive will be entitled to receive his accrued benefits.(4)Each NEO employment agreement provides that IRT may terminate the named executive’s employment, to the extent permitted by applicable law, if the named executive (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of IRT, or a disability. If IRT terminates the named executive’s employment for disability, the named executive will be entitled to receive the following:the named executive will receive a lump sum cash payment equal to a pro rata portion of the named executive’s target annual cash bonus for the fiscal year of his termination (or, in the absence of a target bonus opportunity for the fiscal year, a pro rata portion of the average annual cash bonus earned by the named executive for the three year period immediately prior to his termination of employment or the average annual cash bonus earned by the named executive for the actual number of completed fiscal years immediately prior to his termination of employment if less than three) (the “Target cash bonus”). The pro-rated Target cash bonus will be determined by multiplying the Target cash bonus by a fraction, the numerator of which is the number of days during which the named executive was employed by IRT, prior to his termination of employment, in IRT’s fiscal year in which his termination of employment occurs and the denominator of which is 365. named executive the accrued benefits.Named Executive Officer’s executor, legal representative, administrator or designated beneficiary, as applicable:(5)Each NEO employment agreement provides that if the named executive dies while employed by IRT, IRT will pay to the named executive’s executor, legal representative, administrator or designated beneficiary, as applicable:the accrued benefits; anda pro-rated target cash bonus (determined according(5)the first bullet under footnote 1 above) for IRT’s fiscal yearNamed Executive Officer, in which event all payments under the named executive’s death occurs and,Named Executive Officer employment agreement will cease, except as otherwise required to comply with the requirements of Section 409A of the IRC, will be paid in a lump sum cash payment on the 60th day following the date of the named executive’s death.(6)Each NEO employment agreement provides that IRT may terminate the named executive’s employment at any time for cause upon written notice to named executive, in which event all payments under the NEO employment agreement will cease, except the named executiveNamed Executive Officer will be entitled to receive the accrued benefits. Whether a termination is for cause will be determined by the board in its sole discretion. Each NEO employment agreement defines “cause” as any of the following grounds for termination of the named executive’s employment:the named executive’s conviction of, or plea of guilty or nolo contendere to, a felony, any crime of moral turpitude or any crime involving IRT;the named executive’s engagement in fraud, misappropriation or embezzlement;the named executive’s material breach of any published code of conduct or code of ethics of IRT or any affiliate of IRT;the named executive’s gross negligence or willful misconduct in the performance of his duties;the named executive’s continual failure to substantially perform his duties to IRT (other than a failure resulting from the named executive’s incapacity due to physical or mental illness), and such failure has continued for a period of at least 30 days after a written notice of demand for substantial performance, signed by a duly authorized officer of IRT, has been delivered to the named executive specifying the manner in which the named executive has failed to substantially perform; orthe named executive’s breach of the non-competition, non-solicitation, intellectual property, confidentiality and non-disparagement provisions of the NEO employment agreement described above.(7)Each NEO employment agreement provides that if a change in control of IRT occurs and the named executive’s employment terminates under the circumstances described below, the terms set forth in footnotes 1 through 6 above apply. Upon or within 18 months after a change in control, IRT (by action of the board) may terminate the named executive’s employment at any time without cause or the named executive may initiate a termination of employment by resigning for good reason (in either case the employment term will be deemed to have ended), in each case upon not less than 60 days’ prior written notice. In any such event, the provisions of footnote 1 or 2 above, as applicable, will apply.asmeans the occurrence of any of the following:The acquisition (other than from IRT), by any person (as such term is defined in Section 13(c) or 14(d) of the Exchange Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the combined voting power of IRT’s then outstanding voting securities;The individuals who, as of the effective date of the NEO employment agreement, are members of the board, or the incumbent board, constitute at least a majority of the board, unless the election, or nomination for election by IRT’s stockholders, of any new director was approved by a vote of at least a majority of the incumbent board, and such new director will be considered as a member of the incumbent board;The closing of a reorganization, merger, consolidation or similar form of corporate transaction (each, a business combination) involving IRT if (i) the stockholders of IRT, immediately before such business combination, do not, as a result of such business combination, own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities of the entity resulting from such business combination in substantially the same proportion as their ownership of the combined voting power of the voting securities of IRT outstanding immediately before such business combination or (ii) immediately following the business combination, the individuals who comprised the board immediately prior thereto do not constitute at least a majority of the Board (unless the election, or nomination for election by IRT’s stockholders, of any new director was approved by a vote of at least a majority of the incumbent Board);The sale or other disposition of all or substantially all of(1)assets of IRT; orThe consummation of a complete liquidation or dissolution of IRT.For the definition of “good reason,”, see footnote 1 above.Each NEO employment agreement provides that a change in control will not be deemedannual stock grant to occur solely because 50% or more of the combined voting power of IRT’s then outstanding securities is acquired by (i) a trustee or other fiduciary holding securities under one or more employee benefit plans maintained by IRT or any of its subsidiaries or (ii) any corporation which, immediately prior to such acquisition, is owned directly or indirectly by the stockholders of IRT in the same proportion as their ownership of shares in IRT immediately prior to such acquisition. Each NEO employment agreement provides that a change in control will not occur unless such transaction constitutes a change in the ownership of IRT, a change in effective control of IRT, or a change in the ownership of a substantial portion of IRT’s assets under Section 409A of the IRC.Director Compensation Our director compensation is designed with the goals of attracting and retaining highly qualified individuals to serve as independent directors and to fairly compensate them for their time and efforts. In the period prior to 2017, our non-management directors received an annual fee of $30,000, payable quarterly. During this period our audit committee chairman received an additional annual fee of $10,000, payable quarterly. In May 2016, we issued 3,000 vestedaggregating 39,685 shares of our common stock to each of our directors pursuant to our LTIP. In October 2016, three of our directors were paid additional cash compensation for their services on the special committee of the board, which was formed to negotiate and oversee the management internalization transaction. Effective January 1, 2017, the compensation of each non-management director serving on the board was increased as follows:A standard non-management board member retainer(7,937 shares per year of:o$35,000 cash; ando$45,000 worth of IRT stock;Chairman retainers per year of:o$20,000 for the audit committee chairman;o$15,000 for the compensation committee chairman; ando$10,000 for the nominating committee chairmanCommittee member (other than the chairman) retainers per year of:o$7,500 for the audit committee members;o$5,000 for the compensation committee members; ando$5,000 for the nominating committee members.Our directors are also reimbursed for their out-of-pocket expenses in attending board and committee meetings.The following table sets forth information regarding the compensation paid or accrued by IRT during 2017 to each of our non-management directors:Director Compensation in 2017(1)On May 16, 2017, our compensation committee made the annual stock grant to non-management directors aggregating 24,830 shares valued at $9.03director) valued at $9.00 per share as computed in accordance with FASB ASC Topic 718 based upon the grant date closing price of a share of our common stock on the NYSE MKT. These awards vested immediately. (2)Effective October 17, 2017, Mr. McCadden resigned from the board. Effective January 1, 2018, the cash retainer compensation of each non-management director serving on the board was increased from $35,000 to $40,000.Effective February 23, 2018, the IRT equity retainer compensation of each non-management director who is re-elected to serve on the board at the annual meeting of stockholders on May 17, 2018 was increased from $45,000 to $60,000 worth of IRT equity.No changes were made to the retainers for committee member or chairman. The compensation committee approved these changes based on a review by FPL of IRT’s compensation program for its non-employee directors against comparable public real estate companies in light of the management internalization using the two peer groups identified above. EQUITY COMPENSATION PLAN INFORMATIONThe following table sets forth certain information regarding IRT’s equity compensation plans as of December 31, 2017.(1)Includes 250,000 shares of our common stock underlying SARs outstanding under the incentive award plan at December 31, 2017, or the outstanding SARs. This is the gross number of shares of our common stock with respect to which the SARs are exercisable, not the net number of such shares which would actually be issued upon any exercise. Excludes 295,847 restricted common stock awards that remained subject to forfeiture at December 31, 2017 because they are neither to be issued upon exercise of outstanding options, warrants and rights nor available for future issuance.(2)Assumes the reduction of the number of shares of our common stock remaining issuable under the LTIP at December 31, 2017 by the number of shares of our common stock reported in column (a). Does not reflect any reduction for awards made in February 2018, including the 2018 equity awards.CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONSOur board has delegated oversight of compliance with our code of ethics to our audit committee, including the review of related party transactions, potential and actual conflicts of interest and the granting of waivers to the code of business conduct and ethics. The audit committee is responsible, and has the sole authority and full power of the board, to approve or reject all related party transactions on our behalf. All related party transactions and any identified potential and actual conflicts of interest are to be reviewed and approved or rejected by the audit committee. If the audit committee finds a conflict of interest to exist with respect to a particular matter, including a related party transaction, that matter is prohibited unless a waiver of this policy is approved under the waiver process described in the code. In determining whether a conflict of interest exists, our bylaws provide that a director or officer has no responsibility to devote his or her full time to our affairs and that any director or officer, in his or her personal capacity or in a capacity as an affiliate, employee or agent of any other person, or otherwise, may have business interests and engage in business activities similar to, in addition to or in competition with ours. Any waiver of the code may be made only by the audit committee. Any such waiver for executive officers, those persons described in Item 5.05 of Form 8-K or directors will be promptly publicly disclosed to the extent required by law or stock exchange regulation. In addition, our board addressed potential conflicts of interest arising out of negotiating the terms of our management internalization with RAIT by appointing the special committee comprised of independent directors which negotiated the terms of our management internalization with RAIT and recommended that the board approve the management internalization. The audit committee may, in its discretion, engage independent advisors and legal counsel to assist it in its review when it deems it advisable. Prior to the management internalization, our advisor’s staff were, and currently our officers are, primarily responsible for the development and implementation of processes and controls to obtain information from the directors and executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether the transaction needs to be reviewed under the processes described above.In the ordinary course of our business operations, we have ongoing relationships and have engaged in transactions with the related entities described below. We describe in this section relationships or transactions in which the amount involved exceeds $120,000 since January 1, 2017. All of these relationships and transactions were approved or ratified by the audit committee as being on terms comparable to those available on an arm’s-length basis from an unaffiliated third party or otherwise not creating a conflict of interest.RAIT IndebtednessDuring the year ended December 31, 2016, we repaid $38,075,000 of mortgage indebtedness with proceeds from two property dispositions. This indebtedness was held by RAIT. For the year ended December 31, 2016, we paid $486,000 in exit fees pursuant to the contractual terms of the mortgage indebtedness to RAIT. Also for the year ended December 31, 2016, we paid $361,000 of interest to RAIT. There was no accrued interest payable outstanding as of December 31, 2016.Other Transactions with RAIT Subsequent to our Management InternalizationIRT paid RAIT $727 pursuant to our shared services agreement with RAIT and certain of its affiliates for the period ended December 31, 2017. RAIT paid IRT $257 of property management fees.In June 2017, we acquired South Terrace, a 328-unit property in Durham, NC for approximately $43 million from a joint venture, of which a subsidiary of RAIT was a controlling member. In conjunction with this acquisition, we issued 166,604 of IROP units to third parties that were members of the joint venture that owned the property.SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCESection 16(a) of the Exchange Act requires our officers, directors and persons who own more than ten percent of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC and to furnish IRT with copies of all such reports.Based solely on our review of the reports received by us, or representations from certain reporting persons that no Form 5 filings were required for those persons, we believe that during fiscal 2017, no officers, directors or beneficial owners failed to file reports of ownership and changes of ownership on a timely basis. As of the date of this proxy statement, we believe that all reports of ownership and changes in ownership required to be filed with the SEC relating to transactions in fiscal 2017 have been filed.STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONSStockholder Proposals Submitted Pursuant to Rule 14a-8 of the Exchange ActTo be considered for inclusion in IRT’s proxy statement and form of proxy for next year pursuant to Rule 14a-8 of the Exchange Act, and acted upon at the 2019 annual meeting of IRT’s stockholders, or the 2019 annual meeting, stockholder proposals must be submitted in writing to the attention of our secretary at our principal office, no later than December 4, 2018. In order to avoid controversy, stockholders should submit proposals by means (including electronic) that permit them to prove the date of delivery. Such proposals also need to comply with Rule 14a-8 of the Exchange Act and the interpretations thereof, and may be omitted from IRT’s proxy materials for the 2019 annual meeting if such proposals are not in compliance with applicable requirements of the Exchange Act.Director Nominations and Stockholder Proposals Not Submitted Pursuant to Rule 14a-8 of the Exchange ActOur bylaws also establish advance notice procedures with regard to stockholder proposals or director nominations that are not submitted for inclusion in the proxy statement. With respect to such stockholder proposals or director nominations, a stockholder’s advance notice must be made in writing, must meet the requirements set forth in our bylaws and must be delivered to, or mailed by first class United States mail, postage prepaid, and received by, our Corporate Secretary at our principal office no earlier than the close of business on October 31, 2018 and no later than the close of business on November 30, 2018. However, in the event the 2019 annual meeting is scheduled to be held on a date before April 17, 2019, or after June 16, 2019, then such advance notice must be received by us not earlier than the close of business on the one hundred fiftieth (150th) calendar day prior to the date of such annual meeting and not later than the later of (i) the close of business on the one hundred twentieth (120th) calendar day prior to such annual meeting or (ii) the close of business on the tenth (10th) calendar day following the day on which public disclosure of the date of such annual meeting was first made by the Corporation.General RequirementsEach proposal submitted must be a proper subject for stockholder action at the meeting, and all proposals and nominations must be submitted to: Corporate Secretary, Independence Realty Trust, Inc., Two Liberty Place, 50 S. 16th Street, Suite 3575, Philadelphia, Pennsylvania, 19102. The stockholder proponent must appear in person to present the proposal or nomination at the meeting or send a qualified representative to present such proposal or nomination. If a stockholder gives notice after the applicable deadlines or otherwise does not satisfy the relevant requirements of Rule 14a-8 of the Exchange Act or our bylaws, the stockholder will not be permitted to present the proposal or nomination for a vote at the meeting.Discretionary Authority Pursuant to Rule 14a-4(c) of the Exchange ActIf a stockholder who wishes to present a proposal before the 2019 annual meeting outside of Rule 14a-8 of the Exchange Act fails to notify us by the required dates indicated above for the receipt of advance notices of stockholder proposals and proposed director nominations, the proxies that our board solicits for the 2019 annual meeting will confer discretionary authority on the person named in the proxy to vote on the stockholder’s proposal if it is properly brought before that meeting subject to compliance with Rule 14a-4(c) of the Exchange Act. If a stockholder makes timely notification, the proxies may still confer discretionary authority to the person named in the proxy under circumstances consistent with the SEC’s proxy rules, including Rule 14a-4(c) of the Exchange Act.Director RecommendationsA stockholder who wishes to submit recommendations for director candidates to the nominating committee should send a written recommendation to our executive offices, attention: secretary. Our secretary will forward it to the nominating committee chairman. The stockholder must provide the same information regarding the director candidate called for in our bylaws for a director nomination and submit such recommendation within the time period in our bylaws set forth for a director nomination. All stockholder recommendations received by the nominating committee will begin to be reviewed at the first meeting of the nominating committee held after receipt of all information required with respect to the recommendation.ANNUAL REPORT AND REPORT ON FORM 10-KOur 2017 Annual Report to Stockholders, including the financial statements and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2017, was made available to stockholders of record as of March 30, 2018. Stockholders of record as of March 30, 2018, and beneficial owners of our common stock on that date, may obtain from us, without charge, a copythe NYSE. These awards vested immediately.our most recent Annual Report on Form 10-K filed withPSUs reflects the SEC, exclusivemaximum number of shares to be awarded if the exhibits thereto, by a request in writing. We will also furnish any exhibit to the Annual Report upon the payment of reasonable fees relating to our expenses in furnishing the exhibit. Such requests should be directed to IRT, at our Philadelphia address stated herein, and to the attention of the secretary. Beneficial owners must include in their written requests a good faith representation that they were beneficial owners of ourmaximum performance criteria are achieved. Excludes 339,468 restricted common stock on March 30, 2018.awards that remained subject to forfeiture at December 31, 2020 because they do not constitute outstanding options, warrants and rights.Important Notice Regarding the Availability ofMaterialsStatement | 57
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO GAAP MEASURESStockholder Meeting To Be Held on May 17, 2018. The notice of annual meeting, proxy statement and our annual report on Form 10-Kperiod presented, which includes adjustments for the fiscal yeartiming of acquisitions, the full quarter effect of current value add initiatives, the completion of capital recycling activities including paydown of associated indebtedness, and the normalization of items impacting quarterly EBITDA. Actual net debt to Adjusted EBITDA for the quarter ended December 31, 2017 are available on our website at http:// www.astproxyportal.com/ast/18286/2020 was 8.3x..Householding of Annual Meeting MaterialsSome brokers and other nominee record holders may be participating in the practice of “householding” Notices of Internet Availability of Proxy Materials or proxy statements and annual reports, as applicable. This means that only one copy of the Notice of Internet Availability of Proxy Materials or proxy statement and annual report may have been sent to multiple stockholders in a stockholder’s household. IRT will promptly deliver a separate copy of each applicable document to any stockholder who contacts IRT’s investor relations department by written or oral request at our address on page 1 of this proxy statement or by telephone at (212) 277-4322 requesting such copies. If a stockholder is receiving multiple copies at the stockholder’s household and would like to receive a single copy for a stockholder’s household in the future, stockholders should contact their broker, other nominee record holder, or IRT’s investor relations department to request mailing of a single copy of the applicable document.By order of the Board of Directors/s/ JESSICA K. NORMAN Jessica K. Norman,SecretaryApril 2, 2018