Form 4: Braemar Hotels & Resorts CEO Converts Over Half Million LTIP Units to Common Stock

Braemar Hotels & Resorts Inc. CEO and President, Richard J. Stockton, has converted 524,985 vested LTIP Units into an equal number of common stock shares, increasing his direct equity ownership.

Summary

• Richard J. Stockton, the CEO and President of Braemar Hotels & Resorts Inc. (BHR), acquired 524,985 shares of the company's common stock on June 13, 2025.
• This acquisition was executed through an Exchange Agreement, where Mr. Stockton exchanged 524,985 vested Long-Term Incentive Partnership Units (LTIP Units) in Braemar Hospitality Limited Partnership, the Issuer's operating subsidiary, for an equal number of common stock shares.
• The transaction was exempt under Rule 16b-3 and involved no additional consideration.
• Following this exchange, Mr. Stockton's beneficial ownership of Common Stock increased to 1,172,083 shares, in addition to 8,150 shares of Series B Preferred Stock.
• The filing also indicates that Mr. Stockton holds 176,295 target Performance Stock Units (2023), which are eligible to vest into 0% to 200% of the target number of common stock shares based on the achievement of specified performance criteria by December 31, 2025.

Sentiment

Score: 7

Explanation: The sentiment is moderately positive. The CEO's conversion of incentive units into direct common stock ownership signals confidence in the company and aligns his interests more closely with shareholders. While it's a compensation-related transaction rather than a direct cash investment, it increases insider ownership.

Positives

• The CEO, Richard J. Stockton, increased his direct ownership of Braemar Hotels & Resorts Inc. common stock by 524,985 shares through the conversion of vested LTIP Units.
• This transaction enhances the alignment of the CEO's financial interests with those of common shareholders, as his compensation is now more directly tied to the performance of the common stock.
• The transaction was conducted pursuant to a Rule 10b5-1(c) plan, indicating a pre-planned and transparent execution of the equity conversion.

Risks

• The actual number of shares to be issued from the 176,295 target Performance Stock Units (2023) can range from 0% to 200% based on the achievement of specified relative and total stockholder returns, introducing variability in future compensation based on company performance.

Future Outlook

The document indicates that 176,295 target Performance Stock Units (2023) held by the CEO are expected to vest on December 31, 2025, contingent upon the achievement of specified relative and total stockholder returns of the Issuer. The actual number of shares issued can range from 0% to 200% of the target.

Management Comments

• On June 13, 2025, the Reporting Person entered into an Exchange Agreement with the Issuer pursuant to which the Reporting Person exchanged a number of vested LTIP Units for an equal number of shares of common stock in a Rule 16b-3 exempt transaction, with no other consideration involved.
• Vested LTIP Units, upon achieving parity with Common Limited Partnership Units of the Subsidiary, were convertible into Common Partnership Units at the option of the Reporting Person.
• Each Performance Stock Unit award represents the right, upon achievement of certain specified performance-based vesting criteria, to receive up to two shares of the Issuer's common stock.
• The actual number of shares of common stock to be issued upon vesting of Performance Stock Units can range from 0% to 200% of the target number, based on achievement of specified relative and total stockholder returns of the Issuer.

Industry Context

This filing represents a routine insider transaction related to executive compensation within the hospitality REIT sector. The conversion of LTIP units to common stock is a common mechanism for executives to realize value from long-term incentive plans and increase their direct equity stake, aligning their interests with shareholders. The inclusion of performance stock units tied to relative and total stockholder returns is also a standard practice in executive compensation to incentivize strong company performance.

Related Party Transactions

• The Exchange Agreement between the Reporting Person (Richard J. Stockton, CEO) and the Issuer (Braemar Hotels & Resorts Inc.) for the conversion of LTIP Units into common stock is a related party transaction, typical for executive compensation arrangements.

Stakeholder Impact

• Shareholders: The transaction increases the CEO's direct equity ownership, potentially signaling increased alignment of management's interests with shareholder value creation.
• Employees: The structure of executive compensation, including LTIP Units and Performance Stock Units, reflects the company's incentive programs for key personnel.

Next Steps

• The Performance Stock Units (2023) held by the CEO are expected to vest on December 31, 2025, contingent on the achievement of specified performance criteria.

Key Dates

Keywords

Braemar Hotels & Resorts, BHR, Richard J. Stockton, SEC Form 4, Insider Transaction, LTIP Units, Common Stock, Executive Compensation, Stock Exchange, Performance Stock Units, Corporate Governance