Form 4: Omega Healthcare Investors Executive Awarded Profits Interest Units

Gail D. Makode, Chief Legal Officer of Omega Healthcare Investors, Inc., reports the acquisition of Profits Interest Units (PIUs) based on the company's performance.

Summary

• Gail D. Makode, Chief Legal Officer of Omega Healthcare Investors, Inc., has been awarded Profits Interest Units (PIUs) in OHI Healthcare Properties Limited Partnership.
• The PIUs are based on Absolute and Relative Total Shareholder Return for the 2022-2024 performance period, as certified by the Compensation Committee on January 10, 2025.
• Makode acquired 46,508 PIUs based on Absolute Total Shareholder Return and 48,169 PIUs based on Relative Total Shareholder Return.
• These PIUs represent a contingent right to receive OP Units in the Operating Partnership upon vesting and satisfaction of certain tax-driven economic requirements.
• 25% of the PIUs earned will vest at the end of each quarter of 2025, subject to continued employment and accelerated vesting upon certain events.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The award of PIUs indicates confidence in the executive and aligns her interests with shareholders. The vesting schedule encourages continued performance.

Positives

• The award of PIUs suggests that the company's Compensation Committee views Makode's contributions favorably.
• The PIUs are tied to Total Shareholder Return, aligning Makode's interests with those of shareholders.
• The vesting schedule provides an incentive for continued employment and performance.

Risks

• The value of the PIUs is contingent on the performance of Omega Healthcare Investors and the satisfaction of certain tax-driven economic requirements.
• Vesting is subject to continued employment, meaning Makode could forfeit the PIUs if she leaves the company before they fully vest.

Future Outlook

25% of the PIUs earned based on the 2022-2024 performance period will vest at the end of each quarter of 2025, subject to continued employment and accelerated vesting upon certain events.

Industry Context

In the REIT sector, equity compensation is a common practice to align management's interests with those of shareholders. Performance-based units like PIUs are often used to incentivize long-term value creation.

Comparison to Industry Standards

• Equity compensation practices vary across the REIT industry, but performance-based units are a common tool.
• Companies like Welltower (WELL) and Ventas (VTR) also utilize equity-based compensation, often tied to metrics like Funds From Operations (FFO) growth and Total Shareholder Return (TSR).
• The specific terms of these awards, such as vesting schedules and performance targets, can differ significantly based on company-specific factors and compensation philosophies.

Stakeholder Impact

• Shareholders may view the award of PIUs positively, as it aligns management's interests with their own.
• Employees may see this as a positive sign of the company's commitment to rewarding performance.

Key Dates