Form 4: Veris Residential CEO Nia Mahbod Receives Stock Unit Grants

Veris Residential CEO Nia Mahbod was granted time-vesting, performance-vesting, and outperformance-vesting restricted stock units on March 12, 2024.

Summary

• On March 12, 2024, Nia Mahbod, CEO of Veris Residential, Inc., received grants of restricted stock units.
• These grants include time-vesting restricted stock units (TVRSUs), performance-vesting restricted stock units (PVRSUs), and outperformance-vesting restricted stock units (OPVRSUs).
• Mahbod was granted 148,448 TVRSUs, which vest in three equal annual installments starting March 12, 2025.
• 160,438 PVRSUs were granted, with vesting dependent on the company's total stockholder return (TSR) over a three-year period, both in absolute terms and relative to a peer group of 19 REITs; vesting can range from 0% to 160% of the target.
• Additionally, 148,448 OPVRSUs were granted, vesting on March 12, 2027, based on the company's adjusted funds from operations per share for the fiscal year ending December 31, 2026, with vesting ranging from 0% to 100%.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The granting of stock units is a standard practice, and the performance-based vesting suggests a focus on long-term value creation. However, the actual value depends on future performance.

Positives

• The grant of restricted stock units aligns the CEO's interests with those of the shareholders, incentivizing performance and long-term value creation.
• The performance-based vesting criteria (TSR and adjusted funds from operations) encourage the CEO to focus on key financial metrics.

Risks

• The actual value of the restricted stock units will depend on the future performance of Veris Residential's stock price and financial results.
• Failure to meet the performance targets for the PVRSUs and OPVRSUs could result in the CEO not receiving the full potential value of the grants.

Future Outlook

The vesting of the restricted stock units is contingent upon future performance, specifically TSR and adjusted funds from operations per share.

Industry Context

Granting stock-based compensation is a common practice in the real estate industry to align executive incentives with shareholder value. The use of TSR and adjusted funds from operations as performance metrics is also typical for REITs.

Comparison to Industry Standards

• Many REITs use a combination of time-based and performance-based equity awards to compensate their executives.
• Peer companies like AvalonBay Communities and Equity Residential also utilize TSR as a key performance metric in their executive compensation plans.
• The specific vesting percentages and performance targets will vary depending on the company's size, strategy, and historical performance.

Stakeholder Impact

• Shareholders: Potential for increased value if the CEO's performance leads to higher TSR and adjusted funds from operations.
• Employees: May be positively impacted by the CEO's focus on improving company performance.
• Customers: Indirectly impacted through the company's overall performance and strategic direction.

Key Dates