Form 4: NorthStar Healthcare Income Director Thomas Andrew Smith Acquires Restricted Stock Units

Director Thomas Andrew Smith reports acquisition of restricted stock units in NorthStar Healthcare Income, Inc. following re-election to the board.

Summary

• Thomas Andrew Smith, a director of NorthStar Healthcare Income, Inc., reported the acquisition of 32,197 restricted stock units on June 21, 2024.
• These units were granted under the company's Fifth Amended and Restated Independent Directors Compensation Plan.
• The grant is valued at $85,000 and converts into common stock on a one-for-one basis.
• The restricted stock units vest quarterly over a two-year period, starting July 1, 2024.
• The number of units was determined by dividing the grant value by the company's most recently disclosed net asset value of $2.64 per share.
• Following the transaction, Smith directly owns 113,296 shares of common stock.

Sentiment

Score: 7

Explanation: The document reflects a standard director compensation practice, indicating stable corporate governance. The sentiment is neutral to slightly positive as it aligns director interests with shareholders.

Positives

• The grant of restricted stock units aligns the director's interests with those of the shareholders.
• The vesting schedule encourages long-term commitment from the director.
• The compensation plan is transparent, with the valuation method clearly defined.

Future Outlook

The restricted stock units will vest quarterly over a two-year period, converting into common stock upon vesting or earlier under certain conditions like a change in control or separation from service.

Industry Context

Director compensation through restricted stock units is a common practice in publicly traded companies to align the interests of directors with those of shareholders. The specific terms of the plan, such as the vesting schedule and valuation method, are typical for such arrangements.

Comparison to Industry Standards

• Granting restricted stock units to independent directors is a common practice among publicly traded companies, including REITs like NorthStar Healthcare Income.
• Similar companies, such as Healthcare Trust of America and Welltower, also utilize equity-based compensation plans for their directors.
• The vesting schedule of two years is fairly standard, aligning with industry norms for incentivizing long-term commitment.
• The valuation based on net asset value is specific to REITs, while other companies might use market prices or other metrics.

Stakeholder Impact

• Shareholders: Aligns director's interests with shareholder value through equity ownership.
• Employees: No direct impact.
• Customers: No direct impact.
• Suppliers: No direct impact.
• Creditors: No direct impact.

Key Dates