Form 4: Douglas Emmett Inc. Director Receives Long-Term Incentive Plan Units

Director Dan A. Emmett was granted 13,699 Long-Term Incentive Plan Units as part of his annual compensation.

Summary

• Dan A. Emmett, a director at Douglas Emmett Inc., received 13,699 Long-Term Incentive Plan Units (LTIP Units) on December 12, 2024.
• These LTIP Units were granted as part of his annual compensation for serving as a director.
• The LTIP Units are part of the 2016 Omnibus Stock Incentive Plan.
• Each LTIP Unit can be converted into one partnership common unit (OP Unit) of the Operating Partnership upon vesting and meeting certain criteria.
• The vesting of these LTIP Units occurs in four equal installments on January 1, 2025, April 1, 2025, July 1, 2025, and October 1, 2025.
• LTIP Units not converted into OP Units within 10 years of the grant date will be forfeited.
• OP Units are redeemable for shares of Douglas Emmett Inc.'s common stock or their cash value at the company's election.
• Mr. Emmett also holds 12,222 previously granted LTIP Units and 3,496,300 OP Units, some of which are held through family trusts and Rivermouth Partners.

Sentiment

Score: 7

Explanation: The document reflects a standard compensation practice, indicating a positive alignment of interests between the director and the company. There are no negative implications.

Positives

• The grant of LTIP Units aligns the director's interests with the long-term performance of the company.
• The vesting schedule provides an incentive for continued service as a director.
• The ability to convert LTIP Units to OP Units and then to common stock or cash provides flexibility and potential value to the director.

Risks

• The LTIP Units are subject to forfeiture if not converted within 10 years of the grant date.
• The value of the LTIP Units is dependent on the performance of the Operating Partnership and the company's stock price.

Future Outlook

The LTIP Units will vest over the course of 2025, and the director will have the option to convert them into OP Units and then into common stock or cash, subject to certain conditions.

Industry Context

The granting of LTIP units is a common practice in the real estate industry to align the interests of directors with the long-term performance of the company.

Comparison to Industry Standards

• Granting long-term incentive plan units to directors is a standard practice in publicly traded companies, particularly in the real estate sector, to incentivize long-term value creation.
• Companies like Boston Properties (BXP) and Vornado Realty Trust (VNO) also use similar equity-based compensation plans for their directors and executives.
• The vesting schedule of the LTIP units is typical, with vesting occurring over a period of time to encourage continued service and performance.

Stakeholder Impact

• The grant of LTIP Units aligns the director's interests with those of shareholders, as the value of the units is tied to the company's performance.
• The vesting schedule encourages the director's continued service, which benefits the company and its stakeholders.

Next Steps

• The LTIP Units will vest in four equal installments throughout 2025.
• The director will have the option to convert the LTIP Units into OP Units and then into common stock or cash.

Key Dates

Keywords

LTIP Units, Incentive Plan, Director Compensation, OP Units, Douglas Emmett Inc., Stock Options, Vesting, Beneficial Ownership