Form 4: Hudson Pacific CFO Awarded Equity Units

Hudson Pacific Properties' CFO, Harout Krikor Diramerian, was granted 44,430 LTIP units, including performance-based awards, subject to vesting and holding periods.

Summary

• Harout Krikor Diramerian, Chief Financial Officer of Hudson Pacific Properties, Inc. (HPP), acquired 29,620 LTIP Units and a maximum of 14,810 Performance LTIP Units on January 7, 2026.
• The 29,620 LTIP Units will vest one-third on each of the first, second, and third anniversaries of January 1, 2026, contingent on continued service.
• These vested LTIP Units are subject to a mandatory three-year holding period, prohibiting sale after vesting.
• The 14,810 Performance LTIP Units are maximum awards, vesting based on the Company's relative total shareholder return (TSR) goals over a three-year period from January 1, 2026, to December 31, 2028, and continued service through December 31, 2028.
• Earned Performance LTIP Units are subject to a mandatory two-year holding period, prohibiting transfer or conversion after vesting.
• LTIP Units are limited partnership units in Hudson Pacific Properties, L.P., convertible into an equal number of Common Units upon achieving parity with respect to liquidating distributions.
• Common Units are redeemable for cash based on the fair market value of an equivalent number of Common Stock shares, or, at the Company's election, an equal number of Common Stock shares.
• The number of securities reported reflects a one-for-seven reverse stock split of Common Stock effected on December 2, 2025.
• Following these transactions, the CFO beneficially owns 84,242 Direct LTIP Units and 14,810 Direct Performance LTIP Units.

Sentiment

Score: 6

Explanation: The filing reports a routine executive compensation grant, which is generally a neutral to slightly positive event as it aligns management incentives with shareholder interests. There are no immediate financial results or significant strategic shifts reported that would warrant a strong positive or negative sentiment.

Positives

• The grant of LTIP Units and Performance LTIP Units aligns the Chief Financial Officer's long-term interests with those of shareholders, as compensation is tied to company performance and stock value.
• The performance-based vesting criteria for 14,810 LTIP Units incentivize the achievement of relative total shareholder return goals, promoting strategic decision-making aimed at increasing shareholder value.
• Mandatory holding periods for both types of units demonstrate a commitment to long-term value creation and discourage short-term speculative behavior by the executive.

Negatives

• The reported quantity of 14,810 Performance LTIP Units represents the maximum that may be earned, meaning fewer units may ultimately vest if performance targets are not fully met.
• The initial lack of full parity with common limited partnership units for liquidating distributions means LTIP Units do not immediately have all the rights of Common Units.

Risks

• The vesting of Performance LTIP Units is contingent on the Company's achievement of relative total shareholder return goals, meaning the executive may not earn the full award if performance targets are not met.
• All LTIP Units are subject to service-based vesting requirements, meaning the executive must remain employed through the vesting dates to receive the awards.
• The value of the LTIP Units upon conversion to Common Stock is subject to market fluctuations of Hudson Pacific Properties, Inc. common stock.

Future Outlook

The future outlook for these awards is tied to the CFO's continued service and the Company's performance. The 29,620 LTIP Units are expected to vest over the next three years, while the 14,810 Performance LTIP Units are contingent on achieving relative total shareholder return goals by December 31, 2028. All vested units will be subject to additional mandatory holding periods.

Industry Context

The grant of long-term incentive plan units, including performance-based awards, is a common practice in the real estate investment trust (REIT) industry and broader corporate landscape. Such compensation structures are designed to align executive interests with long-term shareholder value creation, particularly in capital-intensive sectors like real estate where sustained performance is crucial.

Comparison to Industry Standards

• The use of LTIP Units as a form of equity compensation is a standard practice among REITs, offering tax-efficient incentives for executives while aligning their interests with the operating partnership's performance.
• The inclusion of both time-based and performance-based vesting criteria is consistent with best practices in executive compensation across various industries, balancing retention with performance incentives.
• Mandatory holding periods post-vesting are increasingly common, reflecting a broader trend towards encouraging long-term ownership and discouraging short-term trading by executives, similar to practices seen in companies like Prologis or Equity Residential.

Corporate Governance

Related Party Transactions

• The acquisition of LTIP Units and Performance LTIP Units by Harout Krikor Diramerian, the Chief Financial Officer, constitutes a related party transaction as it involves an executive of the Company receiving compensation in the form of equity awards.

Stakeholder Impact

• Shareholders: The equity awards, particularly the performance-based units, aim to align the CFO's financial interests with shareholder returns, potentially leading to improved long-term performance.
• Employees: The incentive plan provides a framework for executive compensation, which can influence overall compensation philosophy and morale within the company, though this specific filing is limited to one executive.

Next Steps

• The LTIP Units will vest in one-third increments on the first, second, and third anniversaries of January 1, 2026.
• The performance period for the Performance LTIP Units will conclude on December 31, 2028, at which point the Company's relative total shareholder return will be assessed against targets.
• Following vesting, both types of units will be subject to mandatory holding periods of three years (LTIP Units) and two years (Performance LTIP Units) before they can be sold or converted.

Key Dates

Keywords

Hudson Pacific Properties, HPP, LTIP Units, Performance LTIP Units, Executive Compensation, CFO, Equity Awards, Stock Split, Insider Transaction, Corporate Governance, Real Estate