Form 4: BXP EVP Awarded Performance-Based Equity Units

BXP Executive Vice President Hilary J. Spann received 59,322 performance-based LTIP Units, aligning compensation with stock performance.

Summary

• Hilary J. Spann, Executive Vice President of BXP, Inc., was granted 59,322 LTIP Units.
• The LTIP Units represent units of limited partnership interest in Boston Properties Limited Partnership (BPLP), where BXP is the general partner.
• These units were awarded under BXP's 2025 Outperformance Plan (2025 OPP).
• Each LTIP Unit can convert into a common unit of limited partnership interest in BPLP (Common OP Unit) upon meeting both performance-based and time-based vesting conditions.
• Common OP Units, once converted, can be redeemed for cash equivalent to the fair market value of a BXP common stock share, or BXP may elect to exchange them for one share of its common stock.
• The LTIP Units do not have an expiration date.
• Following this transaction, Hilary J. Spann beneficially owns 104,740 derivative securities.

Sentiment

Score: 6

Explanation: Slightly positive as it indicates alignment of executive incentives with shareholder value creation through performance-based equity, which is generally viewed favorably. It is a routine compensation event, so not highly impactful on its own.

Positives

• The grant of LTIP Units directly links executive compensation to the appreciation of BXP's common stock price, fostering alignment with long-term shareholder value creation.
• Performance-based vesting conditions, tied to specific stock price tiers ranging from $90.00 to $118.00, establish clear and measurable targets for management.
• The inclusion of time-based vesting conditions encourages executive retention over a four-year period, promoting stability in leadership.

Risks

• The LTIP Units may not be earned if the performance-based vesting conditions, which require BXP's stock price to reach specified tiers, are not met during the four-year performance period ending December 22, 2029.
• The LTIP Units are subject to forfeiture if the time-based vesting conditions, requiring continued service, are not fulfilled over the two-to-four-year vesting schedule.

Future Outlook

The future value of the LTIP Units is directly tied to the appreciation of BXP's common stock price over a four-year performance period ending December 22, 2029. The company aims for its stock to reach performance tiers between $90.00 and $118.00 to fully vest these awards, indicating a strategic focus on increasing shareholder value.

Management Comments

• The LTIP Units granted pursuant to the 2025 OPP may be earned based on the appreciation of the Issuer's common stock price during the four-year performance period ending December 22, 2029.
• The number of LTIP Units earned, if any, will be determined based on the highest level of achievement of eight performance tiers ranging from $90.00 to $118.00.
• The LTIP Units are also subject to time-based vesting conditions, with one-third vesting on the second anniversary of the grant date and the remaining two-thirds vesting ratably over the third and fourth years, subject to continued service and the achievement of the performance-based vesting conditions.

Industry Context

Executive compensation, particularly in the real estate investment trust (REIT) sector, frequently incorporates performance-based equity awards such as LTIP Units. This structure is a common practice for aligning management incentives with long-term shareholder returns, especially in capital-intensive industries where asset value appreciation is a key driver of performance.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential positive impact as executive compensation is tied to stock price appreciation, aligning management's financial interests with shareholder returns.
• Employees: No direct impact on general employees mentioned, but it reflects the company's executive compensation strategy.

Next Steps

• BXP's common stock price performance will be monitored against the specified tiers ($90.00 to $118.00) over the four-year period ending December 22, 2029.
• The executive's continued service will be required for the time-based vesting of the LTIP Units, with vesting occurring on the second, third, and fourth anniversaries of the grant date.

Key Dates

Keywords

BXP, Boston Properties, LTIP Units, Executive Compensation, SEC Form 4, Insider Transaction, Performance-Based Equity, Corporate Governance, Real Estate Investment Trust