DEF 14A: CTO Realty Growth Sets Date for 2024 Annual Stockholders Meeting, Outlines Key Proposals

CTO Realty Growth will hold its annual stockholders meeting virtually on June 20, 2024, to vote on director elections, auditor ratification, and executive compensation.

Summary

• CTO Realty Growth, Inc. will hold its 2024 Annual Meeting of Stockholders online on June 20, 2024, at 3:00 p.m. eastern time.
• Stockholders of record as of April 19, 2024, are entitled to vote.
• The agenda includes the election of six directors for one-year terms, ratification of Grant Thornton LLP as the independent accounting firm for fiscal year 2024, and an advisory vote on executive compensation.
• The Board recommends voting 'FOR' all director nominees, the ratification of Grant Thornton, and the approval of executive compensation.
• In 2023, the company acquired four high-quality retail assets and one land parcel for $80.0 million and originated two structured investments totaling $30.4 million.
• The company also disposed of nine non-core properties and repurchased Series A Preferred Stock and common stock.
• AFFO per share increased by 4% compared to 2022.
• The company's executive team achieved the outperform level of performance with respect to the primary financial performance metric under the annual incentive plan.
• Performance shares awarded in February 2021 vested at the outperform level based on the company's total stockholder return relative to its peer group during the three-year performance period.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic achievements, indicating a favorable sentiment.

Positives

• The company acquired four high-quality retail assets and one land parcel for $80.0 million and originated two structured investments totaling $30.4 million.
• The company strategically disposed of nine non-core properties and repurchased Series A Preferred Stock and common stock.
• AFFO per share increased by 4% compared to 2022.
• The executive team achieved the outperform level of performance with respect to the primary financial performance metric under the annual incentive plan.
• Performance shares awarded in February 2021 vested at the outperform level based on the company's total stockholder return relative to its peer group during the three-year performance period.
• The company entered into $310 million of interest rate swaps in 2023 to mitigate its remaining variable interest rate exposure.

Negatives

• Same-property net operating income decreased by only (2.4%).

Risks

• The document mentions several significant tenant credit challenges.

Future Outlook

The company aims to continue executing its opportunistic growth and capital recycling strategy, including enhancing its credit profile.

Management Comments

• Laura M. Franklin, Chairman of the Board: 'The virtual nature of the meeting will enable us to increase stockholder accessibility, while improving meeting efficiency and reducing costs.'
• The Compensation Committee believes that our compensation program effectively links pay with performance, and aligns managements interests with the interests of the Companys stockholders.
• Our 2023 proved to be a successful year of continued progress towards accomplishing the Companys long term business objectives.

Industry Context

The document highlights the company's performance within the REIT sector, noting its ranking as the 10th best performing REIT (out of 150) on a trailing 3-year basis based on total stockholder return.

Comparison to Industry Standards

• The company benchmarks its executive compensation against a peer group of publicly traded REITs, including Armada Hoffler Properties, NETSTREIT Corp., and others.
• The median market capitalization of the peer group companies was approximately $694 million as of year-end 2023 and $799.7 million as of April 19, 2024.
• The company's executive compensation program is designed to be competitive with its peer group, though the Compensation Committee does not target a specific percentile.

Management Changes

Corporate Governance

Related Party Transactions

• The company has an asset management agreement with the owner of the AM Portfolio to manage the portfolio of assets securing the Alpine Portfolio Loan.
• The company has a revenue sharing agreement with Alpine whereby the company is expected to pay to Alpine a share of the asset management fees, disposition management fees, leasing commissions, and other fees earned by the company under the Asset Management Agreement.
• The company and Alpine entered into an exclusivity and right of first offer agreement dated November 26, 2019 (the Alpine ROFO Agreement).
• The company completed the sale to Alpine of a net leased property located in North Richland Hills, Texas (the NRH Property) for a cash purchase price of $11.5 million.
• The company completed the sale to Alpine of a portfolio of six net leased properties (the CMBS Properties) for an aggregate purchase price of $44.5 million (cash + assumed debt).
• The company completed the sale to Alpine of a net leased property located in Oceanside, New York (the Oceanside Property) for a cash purchase price of $6.9 million (collectively, the ROFO Properties).

Stakeholder Impact

• The company's performance and governance practices aim to create long-term value for stockholders.
• The company is dedicated to responsible environmental, social and community stewardship as an essential part of our mission to build a successful business and to shape the communities we serve, in addition to our workplace community.
• The company strives to attract and retain the best and brightest employees.
• The company has a demonstrated commitment to the financial, mental and physical wellness of its employees.

Next Steps

• Stockholders are encouraged to vote by telephone or online as instructed in the Notice of Internet Availability of Proxy Materials.
• The company intends to disclose the voting results in a current report on Form 8-K within four business days after the Annual Meeting.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Executive Compensation, Board of Directors, Stockholders, Director Election, Grant Thornton, AFFO, REIT, Governance