Form 4: Empire State Realty Trust Director Receives Long-Term Incentive Plan Units

Hannah Y. Yang, a director of Empire State Realty Trust, Inc., was granted 16,484 long-term incentive plan units (LTIP Units) on May 16, 2025, convertible into Class A Common Stock.

Summary

• On May 16, 2025, Hannah Y. Yang, a director of Empire State Realty Trust, Inc. (ESRT), received 16,484 long-term incentive plan units (LTIP Units).
• These LTIP Units are a class of units of Empire State Realty OP, L.P., the Operating Partnership.
• Upon vesting and sufficient capital allocations for federal income tax purposes, these LTIP Units can be converted into an equivalent number of Operating Partnership Units.
• Operating Partnership Units are redeemable by the holder for Class A Common Stock of ESRT on a one-for-one basis or the cash value of such shares, at the Issuer's option.
• The rights to convert LTIP Units and redeem Operating Partnership Units do not have expiration dates.
• The LTIP Units were granted under the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2024 Equity Incentive Plan.
• The LTIP Units vest ratably on each of the first four anniversaries of the grant date and are subject to an additional two-year holding period following the applicable grant date.
• Following the transaction, Ms. Yang directly owns 43,392 shares of Class A Common Stock.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, indicating a positive alignment of interests between management and shareholders. The vesting schedule and holding period suggest a long-term commitment.

Positives

• The grant of LTIP Units aligns the director's interests with those of the shareholders, incentivizing long-term value creation.
• The vesting schedule and holding period encourage a long-term perspective.

Future Outlook

The LTIP Units vest ratably on each of the first four anniversaries of the date of grant, suggesting a long-term incentive structure.

Industry Context

Grants of LTIP units are a common practice in the real estate industry to align the interests of directors and management with those of shareholders, incentivizing long-term value creation. These grants are often tied to the performance of the company and the achievement of specific financial goals.

Comparison to Industry Standards

• Similar equity incentive plans are used by comparable REITs such as Boston Properties (BXP) and Simon Property Group (SPG) to attract and retain key personnel.
• The vesting schedule of four years with an additional two-year holding period is fairly standard in the industry, aligning with typical long-term incentive structures.
• The conversion of LTIP Units into common stock or cash is also a common feature in REIT equity incentive plans, providing flexibility for both the company and the recipient.

Stakeholder Impact

• The grant of LTIP Units is intended to align the interests of the director with those of the shareholders, potentially leading to increased shareholder value.
• The vesting schedule and holding period encourage a long-term perspective, which can benefit all stakeholders.

Key Dates

Keywords

LTIP Units, Empire State Realty Trust, Director, Incentive Plan, Equity, ESRT, Stock