Form 4: STAG Industrial Director Butcher Receives LTIP Units Following Performance-Based Award

Director Benjamin S. Butcher of STAG Industrial, Inc. was granted LTIP units on January 7, 2025, following the achievement of performance targets set in January 2022.

Summary

• On January 7, 2025, Benjamin S. Butcher, a director of STAG Industrial, Inc., received long-term incentive plan units (LTIP Units).
• These LTIP Units were granted under the company's 2011 Equity Incentive Plan, as amended.
• Butcher received 3,812 LTIP Units that vest quarterly over one year and 41,803 LTIP Units earned based on a performance unit award from January 2022.
• The performance unit award was based on a three-year performance period, where Butcher earned 106% of the target number of performance units.
• The Compensation Committee determined the number of LTIP Units earned on January 7, 2025, and all 41,803 LTIP Units are fully vested as of the issuance date.
• Butcher directly owns 699,294 shares of common stock and after the transaction owns 741,097 shares of common stock.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The granting of LTIP units is a standard practice and the performance-based aspect suggests the director is meeting expectations. There are no immediate negative implications.

Positives

• The granting of LTIP Units to a director suggests alignment of interests with shareholders, as the value is tied to the company's performance.
• The performance-based nature of the award indicates that the director met or exceeded performance goals set by the company.
• All of the 41,803 LTIP Units are fully vested as of the issuance date.

Future Outlook

The LTIP Units vest over time and can be converted into OP Units, which can then be redeemed for cash or shares of STAG Industrial's common stock, incentivizing the director to contribute to the company's long-term success.

Management Comments

• The Compensation Committee of the Board determined the number of LTIP Units earned on January 7, 2025.

Industry Context

In the REIT industry, equity-based compensation, such as LTIP units, is a common method to align management's interests with those of shareholders and incentivize long-term value creation. STAG Industrial uses this approach to reward performance and retain key personnel.

Comparison to Industry Standards

• Equity-based compensation is a common practice among publicly traded REITs, including peers like Prologis (PLD), Duke Realty (DRE) (now part of Prologis), and W. P. Carey (WPC).
• These companies often use LTIP units or similar instruments to incentivize executives and align their interests with shareholders.
• The vesting schedules and performance metrics associated with these awards vary, but the underlying principle of linking compensation to company performance remains consistent.

Stakeholder Impact

• Shareholders may view the performance-based LTIP units as a positive sign, indicating that management's compensation is tied to the company's success.
• Employees may see this as a positive sign that the company rewards performance.

Key Dates