DEF 14A: Tanger Inc. Seeks Shareholder Approval for Executive Pay and Director Elections at 2024 Annual Meeting

Tanger Inc. is soliciting proxies for its upcoming annual shareholder meeting on May 17, 2024, featuring proposals for director elections, ratification of the accounting firm, and executive compensation approval.

Summary

• Tanger Inc. will hold its 2024 Annual Meeting of Shareholders virtually on May 17, 2024.
• Shareholders of record as of March 22, 2024, are entitled to vote on the election of nine director nominees, the ratification of Deloitte & Touche LLP as the company's independent accounting firm, and the advisory vote on executive compensation.
• In 2023, Tanger significantly led the REIT industry in delivering total shareholder returns to investors.
• The Board of Directors recommends voting in favor of all proposals.
• The company's 2023 performance highlights include net income available to common shareholders of $0.92 per share, Core FFO of $1.96 per share, and 97.3% occupancy for the consolidated portfolio.
• Dividends totaled $0.97 per share, a 21% increase over 2022.
• Average tenant sales were $436 per square foot, a decrease of 1.8% compared to 2022.
• The Net Debt to Adjusted EBITDA ratio was 5.7 times, or 5.0 to 5.1 times on a pro forma basis.
• The interest coverage ratio improved to 5.2 times.
• In 2023, Tanger added three new centers to its portfolio: Tanger Outlets Nashville, Asheville Outlets, and Bridge Street Town Centre.
• The company sold 3.5 million shares at a weighted average price of $25.75 per share, generating gross proceeds of $90.0 million.
• As of December 31, 2023, outstanding debt aggregated approximately $1.4 billion with $89.7 million of floating rate debt.
• The company's ESG reporting is guided by GRI, SASB, and TCFD standards.
• A portion of the 2023 short-term incentive plan for named executive officers was contingent on achieving goals related to emissions reductions and sustainability initiatives.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic growth initiatives. The company's leading shareholder returns and ESG commitments contribute to a favorable sentiment.

Positives

• Tanger Inc. significantly led the REIT industry in delivering total shareholder returns to investors in 2023.
• The company achieved 97.3% occupancy for the consolidated portfolio on December 31, 2023.
• The company paid dividends totaling $0.97 per share in 2023, a 21% increase over 2022.
• The interest coverage ratio improved to 5.2 times in 2023.
• Fitch Ratings assigned a first-time BBB long-term issuer default rating to the Company and the Operating Partnership in May 2023.
• The company's ESG reporting is guided by GRI, SASB, and TCFD standards.

Negatives

• Average tenant sales decreased by 1.8% to $436 per square foot for the total portfolio in 2023 compared to 2022.
• The Net Debt to Adjusted EBITDA ratio increased to 5.7 times for the year ended December 31, 2023, compared to 4.9 times for the year ended December 31, 2022.
• The occupancy cost ratio increased to 9.3% for the year ended December 31, 2023, compared to 8.6% for the year ended December 31, 2022.

Risks

• The document mentions risks related to pandemics, supply chain and labor issues, and rising interest rates on the company's business, financial results, and financial condition.
• The company's ability to raise additional capital, including via future issuances of equity and debt, is a risk factor.
• The outlook for the retail environment, potential bankruptcies, and other store closings are risks.
• Consumer shopping trends and preferences could impact the company's performance.
• The outcome of legal proceedings arising in the normal course of business is a risk factor.
• Real estate joint ventures pose potential risks.

Future Outlook

The document contains forward-looking statements regarding future plans, strategies, beliefs, and expectations, including those related to pandemics, supply chain and labor issues, rising interest rates, ability to raise capital, results of operations, capital expenditure, working capital needs, repurchase of common shares, future dividend payments, interest rates, asset impairments, development initiatives, strategic partnerships, compliance with debt covenants, renewal and re-lease of leased space, the outlook for the retail environment, potential bankruptcies, consumer shopping trends, outcome of legal proceedings, and real estate joint ventures.

Management Comments

• Stephen Yalof assumed the role of Chief Executive Officer of Tanger in 2021, there has been tremendous and sustained growth, as evidenced by our leading 3-year and 1-year performance among REIT industry stocks.
• Under their leadership, there has been a revitalization of our shopping centers and employee base, positioning the organization for ongoing value creation.
• This will further align the company to fulfill its vision of leveraging customer insights and experiences to inform the future of shopping.

Industry Context

Tanger operates in the retail REIT sector, specifically focusing on outlet and open-air centers. The company competes with other retail REITs for tenants, investors, and talent. The document highlights Tanger's leading total shareholder return compared to the retail REIT index, indicating a strong relative performance within the industry.

Comparison to Industry Standards

• The document compares Tanger's performance to the Dow Jones U.S. Real Estate Retail Index, Dow Jones Equity ALL REIT Index, and S&P 500 indices.
• Tanger's peer group includes Regency Centers Corporation, Federal Realty Investment Trust, NNN REIT, Inc, Kite Realty Group Trust, Phillips Edison & Company, Inc., SITE Centers Corp., Four Corners Property Trust, Inc., Urban Edge Properties, Retail Opportunity Investments Corp., InvenTrust Properties Corp., Acadia Realty Trust, and Saul Centers, Inc.
• The document notes that Tanger is the only public REIT focused predominantly on outlet centers, requiring unique skill sets and relationships.

Management Changes

Corporate Governance

Related Party Transactions

• As of December 31, 2023, the Company and its wholly owned subsidiaries owned 108,793,251 Units and other limited partners (the 'Non-Company LPs') collectively owned 4,707,958 Class A common limited partnership units.
• Most of the Non-Company LPs are the descendants of Stanley K. Tanger, the Companys founder (including Steven B. Tanger, the Company's Non-Executive Chairman), their spouses or former spouses or their children and/or trusts for their benefit.
• For the year ended December 31, 2023, the Non-Company LPs received distributions of earnings from the Operating Partnership totaling $4.8 million.

Stakeholder Impact

• The company's performance directly impacts shareholders through stock value and dividend payments.
• Employees are affected by compensation plans and overall company success.
• Retail partners benefit from the company's ability to attract shoppers and maintain high occupancy rates.
• Communities benefit from the company's philanthropic and sustainable commitments.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting of Shareholders on May 17, 2024.
• The Board of Directors and the Compensation and Human Capital Committee will review the voting results in connection with their ongoing evaluation of the Company’s compensation program.

Key Dates

Keywords

shareholder, executive compensation, REIT, dividends, occupancy, EBITDA, ESG, directors, proxy, Tanger