Form 4: UDR CFO David Bragg Receives Performance-Based Equity Grant

UDR, Inc.'s SVP and Chief Financial Officer, David D. Bragg, was granted 87,365 Class 2 LTIP Units as part of a performance-based incentive plan.

Summary

• David D. Bragg, SVP Chief Financial Officer of UDR, Inc., was granted 87,365 Class 2 LTIP Units in United Dominion Realty, L.P. on January 2, 2026.
• These units are derivative securities with a reported price of $0.0000, indicating a grant rather than a purchase.
• Following this transaction, Bragg beneficially owns 114,504 derivative securities directly.
• The Class 2 LTIP Units are subject to vesting conditions based on pre-established performance metrics over one-year and three-year periods, and continued employment.
• Performance metrics include 50% based on UDR's relative total shareholder return (TSR) compared to an apartment peer group over three years, 30% on a one-year FFO as Adjusted goal, and 20% on UDR's relative FFO as Adjusted growth rate compared to an apartment peer group over three years.
• The units may convert into Partnership Common Units after two years from the grant date, which can then be redeemed for cash or UDR Common Stock at the Company's sole discretion.

Sentiment

Score: 7

Explanation: The filing is a routine disclosure of executive compensation, which is generally a positive for aligning management incentives with shareholder interests. No negative financial or operational news is present, and the structure promotes long-term value creation.

Positives

• The grant of performance-based Class 2 LTIP Units aligns the Chief Financial Officer's incentives with the long-term performance and shareholder value creation of UDR, Inc.
• The compensation structure includes diverse performance metrics (relative TSR, FFO as Adjusted goal, relative FFO as Adjusted growth rate) which encourages a balanced focus on both shareholder returns and operational profitability.
• The inclusion of a change of control clause provides a retention incentive for the executive during potential acquisition scenarios, ensuring continuity of leadership.

Risks

• The Class 2 LTIP Units will only vest if pre-established performance metrics are met for the applicable performance period, meaning the executive bears the risk of non-vesting if targets are not achieved.
• Vesting is subject to continuing employment, with cessation upon termination for any reason other than in the event of a change of control of the Company under specific conditions.

Future Outlook

The performance-based vesting conditions for the Class 2 LTIP Units, tied to relative total shareholder return and FFO as Adjusted goals over one-year and three-year periods, implicitly set future performance targets for the company and its management, indicating a focus on achieving these metrics.

Management Comments

• The Company, as the general partner of the UDR Partnership, may, in its sole discretion, purchase the Partnership Common Units by paying the limited partner either the Cash Amount or the REIT Share Amount.
• The Class 2 LTIP Units will vest only to the extent that pre-established performance metrics are met for the applicable performance period, subject to continuing employment.

Industry Context

The grant of performance-based LTIP units is a common executive compensation practice within the Real Estate Investment Trust (REIT) sector and broader public company landscape. This structure aims to align executive incentives with long-term shareholder value creation, often using metrics like Total Shareholder Return (TSR) and Funds From Operations (FFO), which are standard performance indicators for REITs.

Comparison to Industry Standards

• The use of Class 2 LTIP Units is a standard equity incentive vehicle in the REIT industry, similar to those used by peers like Equity Residential (EQIX) or AvalonBay Communities (AVB) to provide tax-efficient, performance-based compensation.
• Tying vesting to relative TSR against an apartment peer group is a common practice to ensure performance is measured against direct competitors, a benchmark also utilized by companies such as Essex Property Trust (ESS) in their executive compensation plans.
• Including FFO as Adjusted goals is a standard operational metric for REITs, reflecting core profitability, and is frequently incorporated into incentive plans across the sector.

Corporate Governance

Stakeholder Impact

• Shareholders: Potential positive impact through enhanced alignment of executive incentives with shareholder value creation, as compensation is tied to performance metrics like TSR and FFO growth.
• Employees: No direct impact on general employees mentioned, but the executive's compensation structure reflects the company's overall approach to performance-based incentives for key personnel.

Next Steps

• Determination of performance results by the Compensation Committee for the 3-Year Relative Apartment Peer TSR Metric and 3-Year Relative FFO as Adjusted Metric.
• Determination of performance results by the Compensation Committee for the 1-Year FFO as Adjusted Metric, with 50% vesting on that date and the remaining 50% on its one-year anniversary.
• Potential conversion of Class 2 LTIP Units into Partnership Common Units after two years from the grant date.

Key Dates

Keywords

UDR, SEC Form 4, LTIP Units, Executive Compensation, Performance-Based Equity, David D. Bragg, Chief Financial Officer, REIT, Shareholder Return, FFO