Proposal 2: Approve Executive Compensation
OUR 2019 COMPENSATION DECISIONS PROPERLY REWARD AND INCENTIVIZE OUR
EXECUTIVES
Base Salaries. The 2019 base
salaries for three of our NEOs were set in connection with their promotions. Specifically, Mr. Russells salary increased from $600,000 to $700,000, and Mr. Boyles salary increased from $350,000 to $550,000, in connection with
their promotions to Chief Executive Officer and Chief Financial Officer, respectively, effective January 1, 2019. Mr. Vitans salary increased from $300,000 to $350,000 in connection with his promotion to Chief Legal Officer,
effective April 20, 2019. Ms. Johnsons salary remained unchanged at $400,000.
Satisfaction
of Performance Targets. In early 2020, the Compensation Committee determined that with respect to the 2019 annual incentive bonuses performance targets, the Company had achieved a 1.8% and 1.4%
year-over-year increase in Core FFO per share and same store revenues, respectively.
Annual Cash
Incentives. Since the Company achieved the positive Core FFO per share growth in 2019 for the annual incentive bonus, and after consideration of individual performance for NEOs, as assessed by the
Compensation Committee (with input from Mr. Russell with respect to NEOs reporting to him, and with input from the Board with respect to Mr. Russell), the Compensation Committee awarded the following annual cash incentive bonuses to the
NEOs : Mr. Russell, $700,000 (100% of target); Mr. Boyle, $550,000 (100% of target); Ms. Johnson, $400,000 (100% of target); and Mr. Vitan, $350,000 (100% of target).
2019 Performance-Based RSUs. The 2019 performance-based
RSU award program for NEOs requires a minimum of 2% growth in year-over-year same store revenues. Because actual 2019 same store revenue growth was 1.4%, our NEOs did not qualify for any RSU awards and none were awarded.
2019 Promotion-Based Equity
Awards. Mr. Russell, who was promoted to CEO effective January 1, 2019, Mr. Boyle, who was promoted to CFO effective January 1, 2019, and Mr. Vitan,
who was promoted to Chief Legal Officer on April 20, 2019, received one-time compensation in connection with their promotions as follows:
|
●
|
|
On March 8, 2019, Mr. Russell was awarded 5,000 RSUs vesting in eight equal installments and options to acquire
20,000 shares of Common Stock vesting in equal annual installments over five years.
|
|
●
|
|
On March 8, 2019, Mr. Boyle was awarded 3,750 RSUs vesting in eight equal installments and options to acquire
15,000 shares of Common Stock vesting in equal annual installments over five years.
|
|
●
|
|
On May 27, 2019, Mr. Vitan was awarded 2,000 RSUs vesting in eight equal installments and options to acquire
10,000 shares of Common Stock vesting in equal annual installments over five years.
|
2019 CEO
Compensation. Mr. Russell was appointed as CEO in January 2019, succeeding Mr. Havner, who had been the Chief Executive Officer of the Company for over 15 years. As shown in the table below, the
Compensation Committee significantly reduced CEO compensation from the levels that were previously approved for Mr. Havner. This decision was made after consideration of numerous factors, including the fact that Mr. Russell was a
newly-appointed CEO and the desire to
Public Storage | 2020
Proxy Statement | 50