Form 4: Douglas Emmett CEO Granted 1M LTIP Units

Douglas Emmett Inc.'s Chairman and CEO, Jordan L. Kaplan, was granted 1,011,140 Long Term Incentive Plan Units, vesting through 2028.

Summary

• Jordan L. Kaplan, Chairman and CEO of Douglas Emmett Inc. (DEI), was granted 1,011,140 Long Term Incentive Plan Units (LTIP Units) on December 15, 2025.
• The LTIP Units were granted pursuant to the Issuer's 2016 Omnibus Stock Incentive Plan.
• These units vest 70% on December 31, 2025, with the remaining 30% vesting in equal installments on December 31, 2026, 2027, and 2028.
• Upon vesting and achievement of a specified percentage increase in Gross Asset Values, each LTIP Unit can convert into one partnership common unit (OP Unit) of the Operating Partnership.
• OP Units are redeemable by the holder for an equivalent number of shares of Issuer's common stock or for the cash value of such shares, at the Issuer's election.
• LTIP Units not converted into OP Units by the expiration date of December 31, 2035, will be forfeited.
• Following this transaction, Mr. Kaplan beneficially owns 1,011,140 new LTIP Units, an additional 1,261,301 previously granted LTIP Units, and 10,092,357 OP Units.

Sentiment

Score: 7

Explanation: The grant of long-term incentive units to the CEO is generally a positive signal, as it aligns management's interests with shareholder value creation over an extended period. It's a routine compensation event, not indicative of extraordinary performance, but reinforces commitment.

Positives

• The grant of LTIP Units aligns the interests of the Chairman and CEO with those of shareholders, as the value of the units is tied to the company's performance and stock price.
• The vesting schedule, extending through 2028, provides a long-term incentive for management to drive sustained growth and value creation.

Risks

• LTIP Units are subject to forfeiture if vesting criteria, including a specified percentage increase in Gross Asset Values, are not met.
• Units not converted into OP Units by the expiration date of December 31, 2035, will be forfeited.
• The ultimate value of the incentive units is dependent on the future market price of Douglas Emmett Inc.'s common stock, which is subject to market fluctuations.

Future Outlook

The future outlook for these LTIP Units is tied to the company's ability to achieve a specified percentage increase in Gross Asset Values, which will enable their conversion into OP Units. The vesting schedule extends through December 2028, with an ultimate expiration date in December 2035, providing a long-term incentive horizon.

Management Comments

• The grant of Long Term Incentive Plan Units to the Chairman and CEO is intended to satisfy affirmative defense conditions of Rule 10b5-1(c), indicating a pre-planned transaction for equity securities.

Industry Context

Executive compensation through equity-based incentives like LTIP Units is a common practice in publicly traded companies, particularly in the Real Estate Investment Trust (REIT) sector. These plans are designed to align the interests of executives with long-term shareholder value creation, often linking vesting to performance metrics or continued service.

Comparison to Industry Standards

• The use of Long Term Incentive Plan (LTIP) units is a standard practice in the REIT industry for executive compensation, similar to programs at companies like Boston Properties (BXP) or Vornado Realty Trust (VNO), which also utilize performance-based equity awards to incentivize management.
• The multi-year vesting schedule (through 2028) is consistent with industry best practices for retaining key executives and fostering a long-term strategic focus, comparable to incentive structures seen in major real estate developers and operators.

Corporate Governance

Related Party Transactions

• The grant of 1,011,140 Long Term Incentive Plan Units to Jordan L. Kaplan, the Chairman and CEO, constitutes an executive compensation transaction with a related party.

Stakeholder Impact

• Shareholders: Potential positive impact due to increased alignment of executive incentives with long-term company performance and shareholder value creation.
• Employees: No direct impact mentioned, but a well-incentivized leadership team can contribute to overall company stability and growth.

Next Steps

• The LTIP Units will vest according to the specified schedule: 70% on December 31, 2025, and the remaining 30% in equal installments on December 31, 2026, 2027, and 2028.
• Upon vesting and meeting Gross Asset Value criteria, the LTIP Units can be converted into OP Units.
• OP Units may subsequently be redeemed for shares of Douglas Emmett Inc. common stock or cash, at the Issuer's discretion.

Key Dates

Keywords

Douglas Emmett, DEI, Jordan L. Kaplan, SEC Form 4, LTIP Units, Long Term Incentive Plan, Executive Compensation, Stock Grant, Beneficial Ownership, Corporate Governance, Real Estate Investment Trust