DEFA14A: Xenia Hotels & Resorts Urges Shareholders to Approve Amendment to 2015 Incentive Award Plan

Xenia Hotels & Resorts is supplementing its proxy statement to advocate for the approval of an amendment to its 2015 Incentive Award Plan, emphasizing its importance for aligning executive compensation with shareholder interests.

Summary

• Xenia Hotels & Resorts is supplementing its proxy statement to reinforce the Board's recommendation for shareholders to vote FOR Proposal 3, which involves amending the 2015 Incentive Award Plan.
• The company believes the 2015 Plan is crucial for its compensation strategy, aligning executive interests with those of stockholders through equity awards.
• If the amendment isn't approved and the existing shares are exhausted, the company may be limited to cash-based incentives, which could be more costly and less aligned with shareholder interests.
• The company highlights its strong Say-on-Pay support, averaging the highest among its peer group over the last three years, with at least 97% support annually.
• The company's three-year average burn rate of 0.37% is significantly below the ISS benchmark of 1.05%.
• As of March 21, 2025, there were 1,490,571 shares available for future issuance under the 2015 Plan, with a total of 107,205,399 shares of Common Stock and LTIP Units outstanding.
• The Board is requesting approval for an additional 2,250,000 shares, representing approximately 2.10% of the total outstanding shares and LTIP Units.
• The company emphasizes that a majority of NEO's compensation is delivered in the form of equity awards, with 75% of those equity awards being performance-based and tied to rigorous relative and absolute total shareholder returns.
• The company must achieve at least a six percent annualized total stockholder return to earn any of the outstanding performance-based equity awards that are measured by absolute total stockholder return.

Sentiment

Score: 8

Explanation: The document expresses a positive outlook on the company's compensation practices and alignment with shareholder interests. The company highlights its strong Say-on-Pay support and responsible grant practices, indicating confidence in its compensation strategy.

Positives

• The company has strong shareholder support for its executive compensation program, as evidenced by high Say-on-Pay votes.
• The company's burn rate is well below the ISS benchmark, indicating responsible equity grant practices.
• A significant portion of executive compensation is tied to performance, aligning interests with shareholders.
• The company has robust stock ownership guidelines for executive officers.

Negatives

• If the amendment is not approved, the company may be limited to cash-based incentives, which could be more costly and less aligned with shareholder interests.

Risks

• Failure to approve the amendment could limit the company's ability to attract and retain key employees.
• Reliance on cash-based incentives could increase costs and reduce alignment with shareholder interests.

Future Outlook

The company intends to continue using equity awards as a key component of its compensation strategy to align executive interests with shareholder value creation.

Management Comments

• The Board reiterates its recommendation that you vote FOR Proposal 3.
• The 2015 Plan is an integral part of our overall compensation strategy.
• The Compensation Committee has developed and implemented a pay for performance compensation program which relies heavily on the use of equity grants as an effective tool for compensating the Company's executives and strongly aligns interests with our stockholders.

Industry Context

The document highlights the importance of equity-based compensation in the lodging REIT industry for aligning executive incentives with shareholder returns, a common practice among peer companies.

Comparison to Industry Standards

• The document references Institutional Shareholder Services (ISS) benchmarks for burn rate, indicating an awareness of industry standards for equity compensation.
• The company compares its Say-on-Pay support to its Equity Award Peer Group, suggesting a focus on maintaining competitive compensation practices.
• The company's three-year average burn rate of 0.37% is well below the ISS benchmark of 1.05%.

Stakeholder Impact

• Approval of the amendment is expected to benefit shareholders by aligning executive compensation with long-term company performance.
• Employees, particularly executive officers, may be impacted by changes to the incentive award plan.

Next Steps

• Shareholders will vote on Proposal 3 at the 2025 Annual Meeting of Stockholders on May 13, 2025.

Key Dates

Keywords

Incentive Award Plan, Say-on-Pay, Equity Awards, Compensation, Shareholders, Xenia Hotels & Resorts