Form 4: BXP EVP Koop Granted 59,322 Performance-Based LTIP Units

BXP, Inc. Executive Vice President Bryan J. Koop was granted 59,322 performance-based LTIP Units under the company's 2025 Outperformance Plan, aligning executive compensation with stock price appreciation.

Summary

• Executive Vice President Bryan J. Koop of BXP, Inc. was granted 59,322 LTIP Units on December 22, 2025.
• The grant is part of the Issuer's 2025 Outperformance Plan (2025 OPP).
• LTIP Units represent units of limited partnership interest in Boston Properties Limited Partnership (BPLP).
• These units are subject to both performance-based and time-based vesting conditions.
• Following this transaction, Mr. Koop beneficially owns 208,648 derivative securities.
• Each LTIP Unit may convert into a common unit of limited partnership interest in BPLP (Common OP Unit) if vesting conditions are met, and Common OP Units can be redeemed for cash or BXP common stock.

Sentiment

Score: 7

Explanation: The grant of performance-based LTIP units to an executive is generally positive as it aligns management's interests with shareholder value creation. The specific performance tiers provide clear incentives for stock price appreciation. However, it's a standard compensation event rather than a significant operational or financial announcement.

Positives

• The grant of LTIP Units aligns executive compensation directly with the appreciation of BXP's common stock price, incentivizing long-term shareholder value creation.
• The performance-based vesting conditions, tied to specific stock price tiers ranging from $90.00 to $118.00, provide clear targets for management.
• The time-based vesting schedule encourages continued service and long-term commitment from the executive.

Negatives

• Potential for dilution if LTIP Units convert to Common OP Units and then to common stock, although this is a standard feature of such plans.
• The value of the compensation is entirely dependent on future stock performance, which carries inherent market risk.

Risks

• Market Performance Risk: The LTIP Units may not vest if the Issuer's common stock price does not achieve the specified performance tiers ($90.00 to $118.00) during the four-year performance period ending December 22, 2029.
• Service Condition Risk: The LTIP Units are subject to forfeiture if the executive's continued service is not maintained through the vesting periods.
• Dilution Risk: Upon conversion and redemption, the issuance of common stock could lead to a slight dilution for existing shareholders, though this is typical for equity compensation plans.

Future Outlook

The future outlook for this compensation is tied to the appreciation of BXP's common stock price over a four-year performance period ending December 22, 2029, with specific stock price targets ranging from $90.00 to $118.00 determining the percentage of units earned. Additionally, the units are subject to time-based vesting over four years, contingent on continued service.

Industry Context

The grant of performance-based LTIP Units is a common practice in the real estate investment trust (REIT) sector and broader corporate landscape to align executive incentives with long-term shareholder value creation. Such plans are designed to motivate management to achieve specific financial or stock performance targets, which is particularly relevant in capital-intensive industries like real estate.

Comparison to Industry Standards

• Performance-based equity awards, such as LTIP units, are a standard component of executive compensation packages across the REIT industry, similar to those offered by peers like Simon Property Group (SPG) or Prologis (PLD), which often link vesting to total shareholder return or FFO per share growth.
• The use of specific stock price tiers for vesting, rather than linear interpolation between all tiers, is a common design choice, though some companies might use more granular or continuous performance curves.
• The combination of performance-based and time-based vesting is a widely adopted best practice to ensure both performance achievement and executive retention.

Stakeholder Impact

• Shareholders: Potential for increased shareholder value if performance targets are met, as executive compensation is tied to stock price appreciation. Potential for minor dilution upon conversion of units to common stock.
• Employees: Reflects the company's executive compensation strategy, which may influence broader compensation philosophies.

Next Steps

• Monitoring of BXP's common stock price performance against the specified tiers ($90.00 to $118.00) through December 22, 2029.
• Continued service of Bryan J. Koop to meet time-based vesting conditions.
• Potential conversion of vested LTIP Units into Common OP Units and subsequent redemption for cash or BXP common stock.

Key Dates

Keywords

BXP, Boston Properties, LTIP Units, Executive Compensation, Form 4, Insider Transaction, Performance-Based Vesting, Stock Options, Real Estate Investment Trust, REIT