Form 4: BXP EVP & CFO Awarded Performance-Based LTIP Units

BXP's Executive Vice President and Chief Financial Officer, Michael E. LaBelle, was granted 72,034 performance-based LTIP Units under the company's 2025 Outperformance Plan.

Summary

• Michael E. LaBelle, Executive Vice President and Chief Financial Officer of BXP, Inc., was granted 72,034 LTIP Units on December 22, 2025.
• These LTIP Units are units of limited partnership interest in Boston Properties Limited Partnership (BPLP) and were granted under the Issuer's 2025 Outperformance Plan (2025 OPP).
• Each LTIP Unit may be converted 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 acquired from LTIP Unit conversion can be redeemed for cash equal to the fair market value of a BXP common stock share, or BXP may elect to acquire them for one share of its common stock.
• The LTIP Units have no expiration date.
• Performance-based vesting is tied to the appreciation of BXP's common stock price over a four-year period ending December 22, 2029.
• Vesting tiers range from 12.5% earned at a stock price of $90.00 to 100% earned at $118.00, based on the dividend-adjusted closing price over 20 consecutive trading days.
• Time-based vesting requires one-third of the units to vest on the second anniversary of the grant date (December 22, 2027), with the remaining two-thirds vesting ratably over the third and fourth years (December 22, 2028 and December 22, 2029), subject to continued service and achievement of performance conditions.
• Following this transaction, Michael E. LaBelle beneficially owns 300,789 derivative securities (LTIP Units).

Sentiment

Score: 7

Explanation: The filing reflects a positive alignment of executive incentives with long-term shareholder value through a performance-based equity grant. While not directly impacting current financial results, it signals a commitment to future growth and strong corporate governance.

Positives

• The grant of performance-based LTIP Units aligns the interests of a key executive (EVP and CFO) directly with long-term shareholder value creation.
• The incentive structure encourages management to achieve significant stock price appreciation, with full vesting requiring the stock price to reach $118.00.
• The plan includes both performance and time-based vesting, promoting sustained performance and executive retention.

Negatives

• The LTIP Units do not have immediate cash value and are subject to significant vesting conditions, meaning there is no guaranteed payout.
• The executive's compensation is heavily dependent on future stock performance, which introduces personal risk for the executive.
• Linear interpolation does not apply for performance between tiers, which could lead to cliff effects in vesting percentages.

Risks

• Failure to meet the specified stock price performance targets ($90.00 to $118.00) by December 22, 2029, could result in partial or no vesting of the LTIP Units.
• The executive must maintain continued service with the company for the time-based vesting conditions to be met.
• General market downturns or company-specific underperformance could negatively impact BXP's stock price, preventing the achievement of performance tiers.

Future Outlook

The filing indicates a forward-looking incentive structure designed to motivate executive performance and align it with long-term shareholder returns. The company anticipates potential stock price appreciation to meet the performance tiers of the 2025 Outperformance Plan by December 22, 2029.

Management Comments

• The 2025 Outperformance Plan is designed to incentivize executives by linking a significant portion of their long-term compensation to the appreciation of the Issuer's common stock price, thereby aligning management's interests with those of shareholders.

Industry Context

The grant of performance-based equity, such as LTIP Units, is a common practice in the real estate investment trust (REIT) sector and broader public company landscape. It serves as a key component of long-term incentive plans to attract, retain, and motivate senior executives by tying their compensation to the company's stock performance and shareholder value creation. This practice is consistent with corporate governance trends emphasizing pay-for-performance.

Comparison to Industry Standards

• The use of LTIP Units is a standard mechanism for long-term incentive compensation in REITs, similar to plans seen at peers like Simon Property Group (SPG) or Prologis (PLD), which also utilize performance-based equity awards to align executive interests with property portfolio performance and shareholder returns.
• The multi-year performance period (four years) and tiered vesting structure based on stock price appreciation are typical for robust executive compensation plans, aiming for sustained rather than short-term gains.
• The combination of performance-based and time-based vesting is a common best practice, ensuring both achievement of strategic goals and executive retention, comparable to structures adopted by leading companies across various industries.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential positive impact through enhanced alignment of executive interests with long-term stock performance and value creation.
• Employees (specifically the CFO): Direct financial incentive tied to the company's future success and stock appreciation, subject to performance and continued service.

Next Steps

• BXP's management will focus on executing strategies to achieve the stock price performance targets outlined in the 2025 Outperformance Plan.
• The reporting person, Michael E. LaBelle, will continue to serve the company to meet time-based vesting conditions.
• The company will monitor its stock performance against the defined tiers to determine the vesting percentage of the LTIP Units.

Key Dates

Recommendation

This filing details a routine executive compensation grant designed to align management incentives with long-term shareholder value. While a positive for corporate governance, it does not present new fundamental information or immediate financial results that would warrant a change in the investment recommendation based solely on this disclosure. The stock's performance will depend on broader market conditions and BXP's operational execution.

Keywords

BXP, Boston Properties, LTIP Units, Executive Compensation, Performance Plan, Stock Grant, SEC Form 4, Real Estate, REIT, Incentive Compensation