8-K: Macerich Appoints Daniel E. Swanstrom II as New CFO, Scott W. Kingsmore to Transition

Macerich has announced the appointment of Daniel E. Swanstrom II as its new Chief Financial Officer, effective November 16, 2024, while current CFO Scott W. Kingsmore will transition to a Senior Advisor role before departing at the end of the year.

Summary

• Macerich has appointed Daniel E. Swanstrom II as the new Senior Executive Vice President, Chief Financial Officer and Treasurer, effective November 16, 2024.
• Scott W. Kingsmore, the current CFO, will transition to a Senior Advisor role on November 16, 2024, and will depart the company on December 31, 2024.
• Kingsmore will provide further transitional services through a consulting agreement from January 1, 2025 to March 31, 2025.
• Swanstrom joined the company on November 1, 2024, and served as CFO-Elect until his official appointment.
• Swanstrom's annual base salary will be $600,000, with a target annual bonus of 125% of his base salary.
• His 2024 bonus will be a fixed cash payment of $375,000, and his 2025 bonus will be no less than the target amount.
• Swanstrom will receive a sign-on equity grant of $1,500,000 in LTIP units, vesting over three years.
• He will also receive an annual equity grant of $1,500,000 starting in 2025, split between time-vesting and performance-vesting awards.
• Kingsmore will receive payments and benefits consistent with the company's Severance Pay Plan upon his departure.
• Kingsmore's consulting agreement will pay him $100,000 per month for three months.

Sentiment

Score: 7

Explanation: The document conveys a positive sentiment due to the appointment of a new CFO with a strong background and a well-structured transition plan. The company's focus on sustainability also adds to the positive outlook. However, the departure of a long-serving executive introduces a minor element of uncertainty.

Positives

• The appointment of Daniel E. Swanstrom II brings a seasoned executive with over 20 years of real estate experience to the CFO role.
• Swanstrom's background includes experience as a CFO of two public REITs and as an investment banker with Morgan Stanley.
• The transition plan includes a consulting agreement with Scott W. Kingsmore to ensure a smooth handover of responsibilities.
• Swanstrom's compensation package includes a significant equity grant, aligning his interests with shareholders.
• Macerich is a recognized leader in sustainability, achieving a #1 Global Real Estate Sustainability Benchmark (GRESB) ranking for the North American retail sector for ten consecutive years.

Negatives

• The departure of Scott W. Kingsmore, who has served the company for almost 30 years, may create a period of adjustment.
• The company will incur costs associated with Kingsmore's severance and consulting agreement.

Risks

• The transition of key leadership roles can introduce operational and strategic risks.
• The company's performance is now tied to the new CFO's ability to manage complex balance sheets and make capital allocation decisions.
• There is a risk that the transition period may disrupt the company's financial operations.

Future Outlook

The company expects a smooth transition with the new CFO and continued strategic direction. The company will continue to use its Investor Relations website as a means of disclosing material nonpublic information.

Management Comments

• Jack Hsieh, Macerich's CEO, stated he is very pleased to welcome Dan to Macerich.
• Jack Hsieh thanked Scott for his almost 30 years of unwavering service to Macerich.

Industry Context

The appointment of a new CFO is a common occurrence in the real estate industry, especially when companies are looking to refresh their leadership or bring in new expertise. Macerich's move to hire a CFO with experience in both REITs and investment banking suggests a focus on financial strategy and capital allocation.

Comparison to Industry Standards

• The compensation package for the new CFO, including a base salary, target bonus, and equity grants, is consistent with industry standards for executive roles in publicly traded REITs.
• The transition plan, including a consulting agreement with the outgoing CFO, is a common practice to ensure continuity and knowledge transfer.
• Macerich's focus on sustainability, as evidenced by its GRESB ranking, is a positive differentiator compared to some peers in the real estate sector.
• Comparable companies such as Simon Property Group and Regency Centers also have similar executive compensation structures and transition plans when key personnel changes occur.

Management Changes

Stakeholder Impact

• Shareholders may view the appointment of a new CFO with a strong background as a positive development.
• Employees may experience a period of adjustment due to the leadership change.
• The transition plan aims to minimize disruption to the company's operations and relationships with customers and suppliers.

Next Steps

• Daniel E. Swanstrom II will assume the role of CFO on November 16, 2024.
• Scott W. Kingsmore will transition to Senior Advisor on November 16, 2024.
• The company will enter into a consulting agreement with Scott W. Kingsmore effective January 1, 2025.
• The company will issue annual equity grants to senior executive officers in 2025.

Key Dates

Keywords

CFO, Macerich, Chief Financial Officer, Real Estate Investment Trust, REIT, Executive Appointment, Financial Management, Leadership Transition, Compensation, Equity Grant