DEF 14A: BRT Apartments Corp. Announces Annual Meeting of Stockholders and Incentive Plan Proposal

BRT Apartments Corp. will hold its annual meeting on June 11, 2024, to vote on director elections, auditor ratification, and a new incentive plan.

Summary

• BRT Apartments Corp. is holding its annual meeting of stockholders on June 11, 2024, to vote on several key proposals.
• The proposals include the election of three Class I Directors to serve until the 2027 Annual Meeting, the ratification of Ernst & Young LLP as the independent registered public accounting firm for the year ending December 31, 2024, and the approval of the BRT Apartments Corp. 2024 Incentive Plan.
• The Board of Directors recommends voting FOR all listed director nominees, FOR the ratification of Ernst & Young LLP, and FOR the approval of the 2024 Incentive Plan.
• Stockholders of record as of March 15, 2024, are entitled to vote at the meeting.
• At the close of business on the record date, there were 18,582,627 shares of common stock outstanding and entitled to vote.
• The company has retained DF King for a fee of $7,000 to aid in the solicitation of proxies from our stockholders.

Sentiment

Score: 7

Explanation: The document is a standard proxy statement, presenting information in a neutral and factual manner. The recommendations for voting are positive, but overall, the sentiment is moderately positive due to the routine nature of the content.

Positives

• The company has an independent compensation committee.
• The company has a clawback policy in place.
• The company has stock ownership guidelines for executives and directors.
• The company is responsive to comments and concerns raised by its stockholders.
• The company appointed an independent lead director in 2023.
• The company appointed a highly-qualified woman to serve as a director in 2022.

Negatives

• Alan H. Ginsburg missed several board meetings due to illness during 2023.
• The Form 3 filed by Elie Weiss underreported the number of shares he owned.
• From September 16, 2022 to October 10, 2022, Gould Investors filed eight reports with respect to 17 transactions that either overreported or underreported the number of shares of our common stock that it purchased during such period.
• Jeffrey A. Gould and Matthew J. Gould, who may be deemed to control Gould Investors, filed reports contemporaneously therewith with respect to the same transactions, which reports also contained the same or similar errors as in the Gould Reports.

Risks

• The compensation committee does not use formal quantitative performance targets to determine compensation, except with respect to RSUs.
• The company's compensation decisions include subjective determinations.
• The company's future performance is subject to various risks, including economic conditions, market competition, and regulatory changes.
• The company's incentive plans generally provide, among other things, that if any payment or benefit that a participant in such plan would otherwise receive from us constitutes a parachute payment within the meaning of Section 280G of the Code and as a result would be subject to the excise tax imposed by Section 4999 of the Code (the Excise Tax), then such payment will either (i) be reduced to an amount equal to the largest portion of such payment that would result in no portion of such payment (after reduction) being subject to the Excise Tax or (ii) not be reduced, whichever approach, after taking into account all applicable taxes (including the Excise Tax), results in such participants receipt, on an after-tax basis, of the greatest amount of such payment.

Future Outlook

The company expects its 2025 annual meeting of stockholders will be held in June 2025.

Management Comments

• The Board of Directors recommends that you vote FOR the election of each of the nominees listed in the accompanying proxy statement, FOR proposal 2 to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the year ending December 31, 2024, and FOR proposal 3 to approve the BRT Apartments Corp. 2024 Incentive Plan.

Industry Context

The document provides insights into BRT Apartments Corp.'s corporate governance and executive compensation practices, aligning with broader industry trends in transparency and accountability.

Comparison to Industry Standards

• The company benchmarks its compensation practices against a Compensation Peer Group of REITs, including Armada Hoffler Properties, Inc., CatchMark Timber Trust, Centerspace, Community Healthcare Trust Incorporated, CTO Realty Growth, Inc., Farmland Partners, Inc., Hersha Hospitality Trust, INDUS Realty Trust, Inc., Postal Realty Trust, Inc., UMH Properties, Inc., and Urstadt Biddle Properties Inc.
• The Compensation Peer Group is comprised of the following types of REITs: three diversified, one healthcare, one hotel, one land, one manufactured home, one multi-family, one shopping center, one specialized and one timber.
• The findings indicated that BRT's executive team, overall, was generally in line with the median of our Compensation Peer Group (in line defined as being +/10% of the median).

Related Party Transactions

• Israel Rosenzweig, Chairman of our Board, is a Senior Vice President of One Liberty Properties, Inc. (One Liberty) and a Senior Vice President of the managing general partner of Gould Investors.
• Fredric H. Gould, a director and former Chairman of our Board, is Vice Chairman of the Board of Directors of One Liberty and the sole owner of Majestic Property.
• Jeffrey A. Gould, a director and our President and Chief Executive Officer, is a Senior Vice President and a director of One Liberty, a Senior Vice President of Majestic Property, and a Manager/Director of the managing general partner of Gould Investors.
• Matthew J. Gould, a director and our Senior Vice President, is the Chairman of the Board of Directors of One Liberty, a Manager/Director of the managing general partner of Gould Investors and a Senior Vice President of Majestic Property.
• David W. Kalish, Isaac Kalish and Mark H. Lundy, each of whom is an executive officer of our company, are executive officers of One Liberty and of the managing general partner of Gould Investors.
• As of March 25, 2024, Gould Investors beneficially owns approximately 19% of our outstanding shares of common stock.
• The aggregate fee paid to seven individuals for Services in 2023 was $1,541,188.
• In 2022 and 2023, the amount of general and administrative expenses allocated to us represents approximately 22.4% and 22.3%, respectively, of the total expenses allocated to all entities which are parties to the shared services agreement.
• In 2022 and 2023, we paid $735,000 and $642,000, respectively, for common general and administrative expenses, including telecommunication services, computer services, bookkeeping, secretarial and other clerical services and legal and accounting services.
• In 2022 and 2023, we reimbursed Gould Investors $67,000 and $22,000, respectively, for our share of insurance premiums.
• In 2022 and 2023, we paid Majestic Property fees of $36,000 and $42,000, respectively, representing, in the aggregate, less than 2% of the revenues of Majestic Property for each such period.

Stakeholder Impact

• Shareholders are asked to vote on key proposals that will shape the company's governance and executive compensation.
• Employees may be impacted by the approval of the 2024 Incentive Plan, which provides for equity-based compensation.
• The outcome of the votes could influence investor confidence and the company's stock price.

Next Steps

• Stockholders should review the proxy statement and vote on the proposals.
• The company will hold its annual meeting on June 11, 2024.
• The board may, following the annual meeting, increase the size of the board and fill any resulting newly created directorships.

Key Dates

Keywords

annual meeting, proxy statement, directors, incentive plan, stockholders, compensation, governance, BRT Apartments Corp