BHR.NYSEBraemar Hotels & Resorts INC
DEF 14A: Braemar Hotels & Resorts Sets Date for 2024 Annual Stockholders Meeting
Sentiment:
Proxy Statement
Braemar Hotels & Resorts announces its 2024 annual meeting of stockholders to be held on December 17, 2024, to elect directors, approve executive compensation, and ratify the appointment of its independent auditor.
Capital raiseOn July 2, 2024, the Company, Ashford Trust and Ashford Inc. entered into a Cooperation Agreement with Blackwells Capital LLC and certain of its affiliates regarding the withdrawal of Blackwells proxy campaign, dismissal of pending litigation involving the parties and certain other matters.The Cooperation Agreement also provided for the voluntary dismissal, with prejudice, of the consolidated action then pending in the U.S. District Court for the Northern District of Texas to which the Company, Blackwells Capital LLC and certain of their respective related parties were parties.The Company agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties reasonable attorneys fees and expenses incurred in connection with the Consolidated Litigation and related matters.Additionally, pursuant to the Cooperation Agreement, the Board was required to take steps to identify and select one additional individual to be appointed to the Board as an independent director and to promptly notify Blackwells Capital LLC of its selection of the Additional Board Member and to consider any input Blackwells Capital LLC may have with respect to the Additional Board Member.Concurrently and in connection with the Cooperation Agreement, certain of the parties thereto have also entered into a Share Ownership Agreement and a Loan Agreement, pursuant to which agreements the Company will provide to BW Coinvest I, LLC an unsecured loan.The proceeds from the Loan will be used to reimburse Borrower for 70% of the amount expended by Borrower to purchase on the open market a total of 3,500,000 shares of the Companys common stock within six months of the date of Loan Agreement, at a price per Purchased Share not to exceed $10 and subject to the other limitations set forth therein.The Company has agreed to reimburse Blackwells Capital LLC, in an amount agreed upon by the parties, for the Blackwells Parties reasonable due diligence expenses incurred on or prior to the date of the Share Ownership Agreement.
Worse than expectedThe company's portfolio generated RevPAR and EBITDA results below 2022.
Summary
- Braemar Hotels & Resorts Inc. will hold its 2024 annual meeting of stockholders on December 17, 2024, in Dallas, Texas.
- Stockholders of record as of September 20, 2024, are eligible to vote on the election of nine directors, an advisory vote on executive compensation, and the ratification of BDO USA, P.C. as the independent auditor for 2024.
- The company's Board of Directors recommends voting in favor of all director nominees, the advisory approval of executive compensation, and the ratification of the auditor appointment.
- In 2023, the portfolio fared well, albeit generating RevPAR and EBITDA results below 2022.
- 2024 looks to be shaping up nicely, with very strong group pace and an industry forecast of 4% RevPAR growth across the industry and over 5% for the luxury segment.
- Looking at our balance sheet, we have already addressed all of our 2024 debt maturities through a combination of extensions, refinancings and planned repayments.
Sentiment
Score: 6
Explanation: The document presents a mixed sentiment. While it highlights positive aspects like addressing debt maturities and anticipating constructive debt capital markets, it also acknowledges challenges such as lower RevPAR and EBITDA results compared to the previous year and the negative impact of the work-from-home trend on the office property sector. The overall tone is cautiously optimistic.
Positives
- The company has addressed all of its 2024 debt maturities.
- The company anticipates more constructive debt capital markets for lodging, including lower interest costs.
- The company has a strong group pace and an industry forecast of 4% RevPAR growth across the industry and over 5% for the luxury segment in 2024.
- The company has a diverse board with a mix of experiences, qualifications, attributes and skills.
- The company has a robust corporate governance framework with independent directors and committees.
Negatives
- The company's portfolio generated RevPAR and EBITDA results below 2022.
- The year started with an unsettling fear of recession hanging over the industry.
- The work from home trend started a malaise within the office property sector, which now looks to be with us for many years to come.
- Values are down as much as 40% and refinancing is proving difficult and costly in the office property sector.
Risks
- The lodging industry faces slightly lower occupancies due to the work-from-home trend.
- The office property sector is experiencing a malaise with values down as much as 40% and refinancing proving difficult and costly.
- Regional banks may be acutely impacted by the work-from-home trend.
- The company's future performance is subject to industry forecasts and market conditions.
Future Outlook
2024 looks to be shaping up nicely, with very strong group pace and an industry forecast of 4% RevPAR growth across the industry and over 5% for the luxury segment. As we look forward, we anticipate more constructive debt capital markets for lodging, including lower interest costs in the form of lower base rates and credit spreads.
Management Comments
- 'As always, we will continue to look at ways to fulfill our mission to create and protect stockholder value,' said Monty J. Bennett, Founder and Chairman of the Board.
Industry Context
The lodging industry is experiencing slightly lower occupancies but higher average daily rates, placing RevPAR for the industry solidly above 2019 levels. The office property sector is facing challenges with values down as much as 40% and refinancing proving difficult and costly.
Comparison to Industry Standards
- The company's peer group for assessing competitive pay includes Chatham Lodging Trust, DiamondRock Hospitality Company, Hersha Hospitality Trust, Host Hotels & Resorts, Inc., Park Hotels and Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Summit Hotel Properties, Inc., Sunstone Hotel Investors, Inc., and Xenia Hotels & Resorts, Inc.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Accounting Officer | Mark L. Nunneley | Justin Coe | January 2024 | Not specified |
| Additional Board Member | NA | Jay H. Shah | October 4, 2024 | Pursuant to the Cooperation Agreement |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Board Refreshment | The Board amended its Corporate Governance Guidelines to remove the requirement that a director, upon attaining the age of 70 and annually thereafter, or an individual who would be 70 years of age at the time of his or her election as a director, may not serve on the Board unless the Board waives such limitation. | Not specified | Not specified |
Legal Proceedings
- The Blackwells Parties have also agreed to specified standstill restrictions with respect to the Company Group (as defined in the Cooperation Agreement), which will expire on July 2, 2034.
Related Party Transactions
- The company has various relationships and agreements with Ashford Inc. and its subsidiaries, including advisory, project management, and hotel management agreements.
- The company has a right of first offer agreement with Ashford Trust.
- The company has a contribution agreement with Ashford Inc. and Ashford Trust to fund Ashford Securities.
Stakeholder Impact
- Stockholders will have the opportunity to vote on key matters affecting the company's governance and executive compensation.
- Employees of Ashford Inc. and its subsidiaries may receive incentive compensation based on the company's performance.
- The company's performance and strategic decisions will impact its stakeholders, including shareholders, employees, customers, and creditors.
Next Steps
- Stockholders are encouraged to read the proxy statement carefully and return their proxy card as soon as possible.
- The Board will consider the outcome of the advisory vote on executive compensation when making future decisions.
Key Dates
| Date | Description |
|---|---|
| 2013 | Mr. Bennett has served as Chairman of the Board of Directors since April 2013 and served as Chief Executive Officer of the Company from April 2013 to November 2016. |
| November 2013 | Ms. Carter has served as a member of the Board of Directors since November 2013 and currently serves as our Lead Director. |
| November 2013 | Mr. Rinaldi has served as a member of the Board of Directors since November 2013 and currently serves as chair of our Compensation Committee and as a member of our Related Party Transactions Committee. |
| August 8, 2018 | Ashford Inc. completed its acquisition of Premier, the business of which was formerly owned by Remington Lodging. |
| July 2019 | Ms. Evans has served as a member of the Board of Directors since July 2019. |
| November 6, 2019 | Ashford Inc. completed its acquisition of the hotel management business of Remington Lodging. |
| March 20, 2020 | The Company entered into an agreement with Lismore Capital II LLC, a subsidiary of Ashford Inc., to engage Lismore to seek modifications, forbearances or refinancings of the Company's loans. |
| July 2020 | Mr. Stockton was appointed to the Board of Directors in July 2020. |
| May 2022 | Ms. Odino-Johnson has served as a member of the Board of Directors since May 2022 and currently serves as a member of our Audit Committee and Compensation Committee. |
| October 4, 2024 | Pursuant to the Cooperation Agreement, the Company has selected Jay H. Shah as the Additional Board Member and appointed Mr. Shah to the Board effective as of October 4, 2024. |
| October 10, 2024 | This Notice of the Annual Meeting of Stockholders and the accompanying proxy statement are first being made available to stockholders of record as of September 20, 2024, on or about October 10, 2024. |
| December 17, 2024 | Meeting Date: Tuesday, December 17, 2024 |
| September 18, 2025 | Stockholders wishing to nominate director candidates can do so by providing a written notice to the Corporate Secretary, Braemar Hotels & Resorts Inc., 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. Stockholder nomination notices and the accompanying certificate, as described below, must be received by the Corporate Secretary not earlier than September 18, 2025 |
| October 18, 2025 | Stockholder nomination notices and the accompanying certificate, as described below, must be received by the Corporate Secretary not later than 5:00 p.m., Eastern Time, on October 18, 2025 for the nominated individuals to be considered for candidacy at the 2025 annual meeting of stockholders. |
Keywords
annual meeting, stockholders, directors, executive compensation, independent auditor, RevPAR, EBITDA, debt maturities, corporate governance, hotel industry, Braemar Hotels & Resorts
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