Form 4: Boston Properties Director Acquires Phantom Stock Units

Director Kelly Ayotte acquired phantom stock units in Boston Properties, Inc. under the company's 2021 Stock Incentive Plan.

Summary

• On March 31, 2024, Kelly Ayotte, a director of Boston Properties Inc. (BXP), acquired 555.05 phantom stock units.
• These units were awarded under the company's 2021 Stock Incentive Plan as an alternative to director cash compensation fees.
• The phantom stock units convert to BXP common stock on a 1-for-1 basis.
• The price of the stock at the time of the transaction was $65.31.
• Following the transaction, Ayotte beneficially owns 8,028.31 phantom stock units.
• These units will be settled in shares of BXP common stock (with fractional units settled in cash) after the director's retirement from the BXP Board, either in a lump sum or in ten annual installments, based on the reporting person's election.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The director's acquisition of phantom stock units indicates confidence in the company's future performance and aligns their interests with shareholders.

Positives

• The acquisition of phantom stock units by a director demonstrates alignment with the company's long-term performance.
• The 2021 Stock Incentive Plan provides flexibility for non-employee directors to choose between cash compensation and equity-based compensation.

Future Outlook

The phantom stock units will be settled in shares of BXP common stock after the director's retirement, either in a lump sum or in ten annual installments, based on the reporting person's election. Directors may elect to convert a portion of their notional investment from BXP common stock to a deemed investment in one or more measurement funds, which will be settled in cash.

Industry Context

The use of phantom stock units is a common practice in the real estate industry to align the interests of directors with those of shareholders. It incentivizes directors to focus on long-term value creation.

Comparison to Industry Standards

• Many REITs and real estate companies use similar equity-based compensation plans for their directors.
• Companies like Equity Residential (EQR) and Simon Property Group (SPG) also utilize stock option and restricted stock grants to align director and shareholder interests.
• The specific terms of these plans, such as vesting schedules and settlement options, can vary widely.

Stakeholder Impact

• The acquisition of phantom stock units by a director can positively influence shareholder sentiment by demonstrating alignment of interests.
• Employees may view this as a positive sign of leadership's commitment to the company's success.

Key Dates