|
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
|
Messrs. Norwood (Chairman), J. Lowder and Nielsen, and Mses. Jennings and McGurk served as members of the Compensation Committee during 2019. None of the members of
the Compensation Committee is or was an officer or associate of MAA. During 2019, none of our NEOs served as a director or member of the Compensation Committee of any other entity whose executive officers served on our Board or Compensation Committee.
Upon recommendations from the Compensation Committee, the Board sets compensation for our non-management directors. Directors who are associates of MAA are not
compensated for serving on the Board. In considering their recommendation to the Board on non-management director compensation, the Compensation Committee endeavors to establish a compensation program that will adequately recognize the efforts and
contributions of the non-employee directors and facilitate the attraction and retention of highly qualified directors. In doing so, the committee considers many factors including the level of responsibility and liability assumed by directors, the time
commitment involved, the level of expertise and skill the Board wishes to attract and retain and the additional responsibilities associated with serving on committees, as a chairman of a committee or as the Lead Independent Director.
The Board believes that the approach towards non-management director compensation should reflect the values used in setting executive compensation in that it should
be generally in line with the median compensation offered at comparable peer companies, reflect a mix of both cash and equity compensation to ensure alignment with our shareholders and be sustainable over the long-term.
The consultant hired by the Compensation Committee to assist with setting executive compensation is periodically engaged to benchmark and recommend appropriate
compensation for our non-management directors.
|
2019 COMPENSATION PROGRAM
|
As non-management director compensation had been unchanged in 2018 from the 2017 compensation package, the Compensation Committee retained an external compensation
consultant from Pearl Meyer to benchmark director compensation and provide insight into current trends and compensation structures with the goal of setting total compensation near the median level of MAA’s comparative peer group for compensation. The
compensation consultant utilized the same peer group as established to evaluate executive compensation and found that while the compensation program design was in line with industry peers and the broader market in terms of structure, the average
non-employee director pay was below the peer group 50th percentile.
|
2020 PROXY STATEMENT
|
29
|
Primarily based on the compensation consultant’s analysis and recommendations, the Board increased the average non-employee director total compensation for 2019 to
just under the 50th percentile benchmark level from the 2018 study.
The below 2019 annual cash fees were awarded to non-employee directors in quarterly installments following our routine quarterly Board meetings. Committee chairmen
do not receive their respective committee’s service fee in addition to their chairman fee.
|
$
|
75,000
|
Board service
|
|
$
|
20,000
|
Audit Committee Chairman
|
|
$
|
10,000
|
Audit Committee service
|
|
$
|
17,500
|
Compensation Committee Chairman
|
|
$
|
8,750
|
Compensation Committee service
|
|
$
|
12,500
|
Nominating and Corporate Governance Chairman
|
|
$
|
6,250
|
Nominating and Corporate Governance service
|
|
$
|
7,500
|
Real Estate Investment Committee service
|
|
$
|
25,000
|
Lead Independent Director
|
|
GRANTS OF SHARES OF RESTRICTED STOCK
|
Shares of restricted stock are granted to non-employee directors following election to the Board. These shares of restricted stock vest at the end of the director’s
annual term. Dividends equivalent to the dividends paid on shares of common stock are paid on these shares of restricted stock prior to vesting. Directors who choose to leave the Board before their term is completed for reasons other than retirement,
disability or death, forfeit their granted shares of restricted stock.
|
$
|
130,000
|
Value of annual grant
|
|
The actual number of shares of restricted stock issued to each non-management
director (1,140 shares) was based on the closing stock price on May 21, 2019, ($114.01), the day of election to the Board by shareholders.
|
In accordance with our Director Deferred Compensation Plan, directors have the option of having the comparable value of phantom stock issued into a deferred
compensation account in lieu of receiving their annual cash fees and/or their grant of shares of restricted stock. If directors choose to defer their compensation in this manner, the compensation is paid out in two annual installments either in shares
of our common stock or in the cash equivalent, at the director’s election, beginning in the year following the year in which the director retires from the Board.
Dividends equivalent to the dividends paid on shares of common stock are paid on these shares of phantom stock prior to payout of the shares. All dividends paid on
shares of phantom stock prior to payout are dividend reinvested into additional shares of phantom stock which are also deferred under the plan.
|
MINIMUM SHARE OWNERSHIP REQUIREMENT
|
Within five years of joining the Board, non-employee directors are expected to own five times the cash portion of their annual cash fees (regardless of whether
issued as cash or deferred), in MAA shares or the equivalent. All non-employee directors are in compliance with this share ownership requirement.
|
MIX OF COMPENSATION ELEMENTS
|
The below represents the average mix of compensation elements available to non-employee directors and as actually awarded in 2019 based on the respective role(s)
each non-employee director held during 2019, and the payout elections each director made.
|
AVERAGE MIX OF 2019 COMPENSATION ELEMENTS
|
|
As Offered to Non-Employee Directors
|
|
As Elected By and Paid To Non-Employee Directors
|
|
|
|
|
CAPS ON NON-EMPLOYEE DIRECTOR COMPENSATION
|
Under the Second Amended and Restated MAA 2013 Stock Incentive Plan approved by shareholders at the 2018 Annual Meeting of Shareholders, the total value of cash paid
to a director in one calendar year cannot exceed $250,000 and the total value of equity awards granted to a director in one calendar year cannot exceed $400,000.
|
|
2020 PROXY STATEMENT
|
30
|
|
DIRECTOR COMPENSATION TABLE
|
The table below represents the compensation earned by each non-employee director during 2019.
|
Name
|
|
Fees Earned
or Paid in Cash
($) (1)
|
|
Stock
Awards
($) (2)
|
|
All Other
Compensation
($) (3)
|
|
Total
($)
|
|
Russell R. French (4)
|
|
$
|
85,000
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
219,831
|
|
|
Alan B. Graf, Jr. (4)
|
|
$
|
120,000
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
254,831
|
|
|
Toni Jennings
|
|
$
|
90,000
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
224,831
|
|
|
James K. Lowder
|
|
$
|
85,625
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
220,456
|
|
|
Thomas H. Lowder (4)
|
|
$
|
86,875
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
221,706
|
|
|
Monica McGurk (4)
|
|
$
|
90,000
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
224,831
|
|
|
Claude B. Nielsen
|
|
$
|
96,250
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
231,081
|
|
|
Philip W. Norwood (4)
|
|
$
|
103,125
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
237,956
|
|
|
W. Reid Sanders (4)
|
|
$
|
88,750
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
223,581
|
|
|
Gary Shorb (4)
|
|
$
|
88,125
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
222,956
|
|
|
David P. Stockert (4)
|
|
$
|
82,500
|
|
|
$
|
129,971
|
|
|
$
|
4,860
|
|
|
$
|
217,331
|
|
|
|
(1)
|
Represents annual cash fees regardless of whether they were paid as cash or deferred by the director and issued as phantom stock in the Director Deferred Compensation plan.
|
|
|
(2)
|
Represents the grant of 1,140 shares of restricted stock to each non-employee director on May 21, 2019 at the closing stock price of $114.01. The shares of
restricted stock will vest on May 21, 2020, dependent upon continued service on the Board through the end of the director’s term. Each non-employee director had aggregate restricted stock awards of 1,140 shares outstanding at December 31, 2019
|
|
|
(3)
|
Represents the dividends paid during 2019 on outstanding shares of restricted stock regardless of whether an 83(b) election was made or if the director
elected to have the underlying shares issued as phantom stock in the Director Deferred Compensation Plan.
|
|
|
(4)
|
These directors elected to have their annual cash fees issued as shares of phantom stock in the Director Deferred Compensation Plan. The table below
represents the aggregate number of shares of phantom stock issued.
|
|
Name
|
|
Phantom
Stock Issued
|
|
Russell R. French
|
|
|
706
|
|
|
Alan B. Graf, Jr.
|
|
|
996
|
|
|
Thomas H. Lowder
|
|
|
718
|
|
|
Monica McGurk
|
|
|
747
|
|
|
Philip W. Norwood
|
|
|
858
|
|
|
W. Reid Sanders
|
|
|
739
|
|
|
Gary Shorb
|
|
|
729
|
|
|
David P. Stockert
|
|
|
685
|
|
|
|
2020 PROXY STATEMENT
|
31
|
PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
|
|
|
|
|
|
|
|
MATTER TO BE VOTED
|
|
|
|
Advisory (non-binding) vote to approve NEO compensation as disclosed in this Proxy Statement.
|
|
|
|
|
|
|
|
|
Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the
compensation of our NEOs. As such, shareholders are asked to approve the compensation paid to our NEOs as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, including the disclosures in the Compensation
Discussion and Analysis and Executive Compensation Tables sections of this Proxy Statement.
|
|
|
|
|
|
|
|
|
|
VOTE REQUIRED
|
|
|
|
This proposal will be approved if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal.
|
|
|
|
|
|
|
|
|
The vote under this proposal is advisory, and therefore, not binding on us, our Board or the Compensation Committee. However, our Board, including the Compensation
Committee, values the opinions of our shareholders and, to the extent there is a significant vote against the NEO compensation as disclosed in this Proxy Statement, the Board will consider what actions may be appropriate.
|
|
|
|
|
|
|
|
|
|
IMPACT OF ABSTENTIONS
|
|
|
|
Abstentions will have no legal effect on whether this proposal is approved.
|
|
|
|
|
|
|
|
|
|
IMPACT OF BROKER NON-VOTES
|
|
|
|
Broker non-votes will have no legal effect on whether this proposal is approved.
|
|
|
|
|
|
|
|
|
|
BOARD RECOMMENDATION
|
|
|
|
Our Board recommends a vote FOR the compensation of our NEOs as disclosed in this Proxy Statement.
|
|
|
EXECUTIVE OFFICERS OF THE REGISTRANT
|
|
|
The following individuals served as our NEOs in 2019.
|
|
|
|
|
H. ERIC BOLTON, JR.
|
AGE 63
|
|
Mr. Bolton joined us in 1994, initially serving as Vice President of Development before being promoted to COO in February 1996 and subsequently
appointed as President in December 1996. Mr. Bolton was named CEO in October 2001 and became Chairman of the Board in September 2002. Prior to joining us, Mr. Bolton was with Trammell Crow Company for more than five years, and was EVP and CFO of
Trammell Crow Realty Advisors. Prior to that, Mr. Bolton worked in the commercial banking industry for seven years.
|
|
|
|
|
THOMAS L. GRIMES, JR.
|
AGE 51
|
|
Mr. Grimes joined us in 1994, initially working on site at one of our multifamily properties. Mr. Grimes held various operational positions,
including Director of Property Management and Director of Business Development where he worked with our joint venture partners, managed our new development efforts and directed our ancillary income business, before being promoted to COO in
December of 2011.
|
|
|
|
|
ALBERT M. CAMPBELL, III
|
AGE 53
|
|
Mr. Campbell joined us in 1998, initially responsible for our external reporting and forecasting efforts. Mr. Campbell held various financial
positions, including Treasurer and Director of Financial Planning where he was responsible for managing the funding requirements of the business to support corporate strategy, before being promoted to CFO in January 2010. Prior to joining us, Mr.
Campbell worked as a Certified Public Accountant with Arthur Andersen and served in various finance and accounting roles with Thomas & Betts Corporation.
|
|
|
|
|
ROBERT J. DELPRIORE
|
AGE 52
|
|
Mr. DelPriore joined us in August 2013 as our EVP and GC, initially responsible for the development of our internal Legal Department before
adding responsibility for Enterprise Risk Management and our Commercial Division. Prior to joining us, Mr. DelPriore was a partner in the securities department of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC from February 2008 through
August 2013 and in the corporate securities group of Bass, Berry & Sims PLC; during both of which he served as counsel to MAA.
|
As described in detail under the heading Compensation Discussion and Analysis in this Proxy Statement, we seek to closely align the interests of our NEOs with the interests of
our shareholders. Our compensation programs are designed to reward for the achievement of individual, functional unit and company strategic goals, as well as long-term shareholder value creation, while at the same time avoiding the encouragement of
unnecessary or excessive risk-taking.
The vote on this proposal is not a vote on our general compensation policies, compensation of the Board, or our compensation policies as they relate to risk
management. It is also not a vote intended to address any specific element of compensation. The vote relates to the compensation of our NEOs as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. While the
vote is an advisory, non-binding vote, our Board values shareholder input on executive compensation and the Compensation Committee will consider the results of this vote in determining future compensation. We conduct this vote on an annual basis, and
the next such vote will take place with our 2021 Annual Meeting of Shareholders.
|
|
2020 PROXY STATEMENT
|
32
|
|
COMPENSATION DISCUSSION AND ANALYSIS
|
This Compensation Discussion and Analysis section provides a detailed discussion of our executive compensation. It begins with our compensation philosophy
and objectives, then describes the process we undertake to set executive compensation including the factors we consider when making compensation decisions. We then discuss the structure and individual elements of our executive compensation program and
review the compensation awarded to our CEO and other NEOs in 2019.
Throughout this Compensation Discussion and Analysis section, we have included our rationale for our executive compensation decisions and how we believe the
compensation set for our executives helps MAA achieve the strategic vision of the Board and supports the long-term best interests of our shareholders.
To help you navigate the discussion, the following is a detailed outline of the topics covered in this Compensation Discussion and Analysis section.
TABLE OF CONTENTS
|
|
2020 PROXY STATEMENT
|
33
|
|
TOTAL DIRECT COMPENSATION APPROACH
|
|
PHILOSOPHY AND OBJECTIVES
|
The primary objective of our executive compensation program is to drive key business and strategic goals over various time frames in support of long-term shareholder
value creation. We also seek to provide fair and competitive pay opportunities that align with both overall MAA and individual performance, shareholder interests and sound corporate governance practices. The Compensation Committee, and the Board in
regards to the CEO, believes that, to implement this philosophy and create a balanced and reasonable compensation package in the best long-term interests of our shareholders, the below objectives must be considered and reflected in the program.
The Board does not apply a specific weight or otherwise necessarily value one individual concept over another as the concepts deemed to be of most relevance may
change over time reflecting changing compensation environments and MAA’s strategic initiatives. The numbers have been provided to assist in understanding how our compensation objectives are integrated in the structure and elements of our executive
compensation package as discussed throughout the remainder of the Total Direct Compensation Approach section of this Proxy Statement.
|
ATTRACT AND RETAIN
|
Total executive compensation should be sufficiently competitive against other REITs and well-managed companies within the real estate industry to attract and retain
highly qualified executive management with the appropriate expertise and leadership abilities.
|
NOT OVERPAY
|
Total Target direct compensation is generally positioned at or near 50th percentile market values for similar roles at industry peers and other comparable companies,
with a heavy emphasis on performance-based variable pay.
|
AVOID UNDUE RISK
|
Compensation elements and plans should not overly incentivize executive management to take undue risks.
|
FAIR AND EQUITABLE
|
Total compensation opportunities should be fair and equitable amongst the executive officers, across all MAA associates and within our industry, reflecting the
breadth, scope and complexity of the individual role.
|
REFLECT RESPONSIBILITIES AND QUALIFICATIONS
|
Total compensation opportunities should reflect each respective executive’s ability to impact overall MAA performance and experience, expertise and proven performance
within his or her role.
|
QUANTIFIABLE
|
Total compensation should be clearly defined and based on measurable objectives.
|
ALIGN WITH MAA’S CULTURE
|
Total compensation opportunities should encourage ethical leadership aligned with MAA’s culture statement and Code of Conduct.
|
ALIGN WITH OVERALL MAA PERFORMANCE (PAY FOR PERFORMANCE)
|
Total compensation opportunities should align executive management interests with overall MAA performance.
|
BALANCE ANNUAL AND LONG-TERM STRATEGIC GOALS
|
Total compensation opportunities should incentivize a balance between delivering annual results and ensuring long-term performance.
|
REWARD SUPERIOR PERFORMANCE
|
Total compensation should reward executives for achieving superior individual and overall MAA performance which exceeds Target goals.
|
ALIGN WITH SHAREHOLDERS
|
Total compensation should align the financial interests and goals of our executives with those of our shareholders.
|
REWARD FOR CREATING LONG-TERM SHAREHOLDER VALUE
|
Executive management should benefit from creating long-term shareholder value.
|
SUSTAINABLE
|
Total compensation packages should be sustainable to ensure consistency in our ability to retain qualified executive management and to continue to create long-term
value for our shareholders in the future.
|
SUPPORTED BY SHAREHOLDERS
|
Executive compensation packages should have the support of our shareholders.
The Compensation Committee is responsible for the compensation of executive management, both in terms of establishing the form and opportunities for each executive
and in overseeing the actual awards made to each executive under our compensation plans. In regards to the CEO, the Compensation Committee makes recommendations to our Board and the non-management directors vote to approve CEO compensation.
|
|
2020 PROXY STATEMENT
|
34
|
The Compensation Committee considers many factors and, from time-to-time, obtains input related to certain aspects of executive compensation from the non-management
directors as well as other non-Board sources, including external consultants. The committee does not have a pre-defined framework that determines which factors may be more or less important, and the emphasis placed on any given factor may vary both
among the respective executives and over time.
Ultimately, it is the Compensation Committee’s judgment of all factors it deems relevant at any given time that forms the basis for determining the executive
compensation set for our CEO and other NEOs.
|
SAY ON PAY
|
The Compensation Committee carefully considers the results of the vote by shareholders to approve executive compensation. Due to the long-term nature of some
compensation elements, the committee also feels it is important to obtain shareholder feedback on a routine, frequent basis. As such, the Board, on behalf of the Compensation Committee, has always recommended that the frequency of the vote to approve
executive compensation be done on an annual basis.
The Compensation Committee considers the results of the shareholder vote on executive compensation from prior meetings when establishing executive compensation
packages, and believes the historical Say on Pay vote outcomes are an endorsement by shareholders of their overall total compensation package and approach for our NEOs.
|
94.3%
APPROVAL FOR
Say on Pay
in 2019
|
Annual Say on Pay
Shareholder Vote
APPROVED EVERY YEAR
Since Introduced in 2011
|
Say on Pay
AVERAGE APPROVAL RATE
Since 2011
96%
|
|
ROLE OF COMPENSATION CONSULTANT
|
The Compensation Committee has the power and authority to hire outside advisors or consultants to assist the committee in fulfilling its responsibilities, at MAA’s
expense and upon terms established by the Compensation Committee. The Compensation Committee routinely hires external consultants to assist in reviewing our executive compensation program, establishing an appropriate benchmark comparator group,
benchmarking plan design, mix of compensation elements and level of compensation opportunities, and evaluating risks associated with our executive compensation program.
The Compensation Committee hired Pearl Meyer in 2018 to assist with the review and development of the executive and non-employee director compensation program for
2019.
|
Compensation Consultant Independence
|
Prior to the retention of a compensation consultant or any other external advisor, and from time-to-time as the Compensation Committee deems appropriate, the
Compensation Committee assesses the independence of such advisor from management, taking into consideration all factors relevant to such advisor’s independence, including the factors specified in NYSE listing standards.
The Compensation Committee assessed the independence of Pearl Meyer, taking into account the factors listed below.
|
|
■
|
The policies and procedures the consultant has in place to prevent conflicts of interest
|
|
|
■
|
Any business or personal relationships between the consultant and the members of the Compensation Committee
|
|
|
■
|
Any ownership of MAA common stock by the individuals whom perform consulting services for the Compensation Committee
|
|
|
■
|
Any business or personal relationship of the firm with any of our executive officers
|
Pearl Meyer provided the Compensation Committee with appropriate assurances and confirmation of its independent status pursuant to the factors indicated above. The
Compensation Committee believes that Pearl Meyer has been independent throughout their service to the committee and that there is no conflict of interest between the firm and the Compensation Committee.
|
|
2020 PROXY STATEMENT
|
35
|
|
MARKET BENCHMARKING CONSIDERATIONS
|
The Compensation Committee considers benchmark information when establishing and measuring the competitiveness of various aspects of our executive compensation
packages, including the items listed below.
|
|
■
|
Annual and long-term incentive award ranges
|
|
|
■
|
Mix of cash and equity award opportunities
|
|
|
■
|
Target performance opportunities
|
|
|
■
|
Total direct compensation
|
|
|
■
|
Validity of package design and performance measures
|
While we believe that the type and levels of compensation opportunities we provide should be competitively reasonable and appropriate for our business needs and
circumstances, the Compensation Committee’s approach is to consider competitive compensation practices amongst other relevant factors rather than establishing compensation at specific benchmark percentiles. This enables us to respond to changes in the
labor market and provides us with flexibility in maintaining and enhancing the engagement, focus and motivation of our executives.
Broadly, however, unless otherwise warranted by performance, the Compensation Committee believes it is generally appropriate to be relatively in line with 50th percentile Target pay levels for comparable organizations against which MAA competes for business and executive talent and does not believe it is reasonable or appropriate
for Target executive compensation to be materially outside of comparative benchmark ranges (either above the 75th percentile or below the 25th percentile) whether in terms of individual elements of the compensation program or overall total Target executive compensation.
|
Compensation Comparator Group
|
The Compensation Committee believes it is critical to select the appropriate comparator group for benchmarking purposes. In conjunction with consulting with our
Compensation Committee to set 2019 executive compensation, Pearl Meyer reviewed our then current peer group considering various factors representing enterprise size and value, governance rankings, TSR performance, credit ratings, business models,
markets and financial statistics, among other items. Pearl Meyer also reviewed REITs utilized by our multifamily peers for their peer groups as well as other REITs across various sectors in the industry. Any companies in extreme financial distress or
which had poor executive pay governance perceptions were eliminated from consideration.
The Compensation Committee considered the analysis provided by Pearl Meyer and determined to adjust the peer group for determining 2019 compensation by adding two
companies and removing three companies which had become incomparable to MAA’s enterprise value or were exhibiting significantly leveraged balance sheets or poor governance rankings.
The final comparator group adopted by the Compensation Committee for review of executive compensation for 2019 consisted of the companies listed below. At the time
of the Pearl Meyer study in 2018, MAA was between the peer group 50th and 75th percentile
in terms of size, as measured by revenues, assets and enterprise value.
Apartment Investment & Management Co.
AvalonBay Communities, Inc.
Boston Properties, Inc.
Brixmor Property Group, Inc.
Camden Property Trust
Duke Realty Corp.
Equity Residential
Essex Property Trust, Inc.
Extra Space Storage, Inc.
Federal Realty Investment Trust
Host Hotels & Resorts, Inc.
Kimco Realty Corp.
Public Storage
Regency Centers Corporation
UDR, Inc.
|
Findings of Compensation Consultant
|
Pearl Meyer performed a market pay analysis and provided the results of their benchmarking review, along with directional recommendations based on their market pay
analysis at the September 2018 Compensation Committee meeting and the Compensation Committee considered the results of their analysis (as summarized below) in establishing the executive compensation program for 2019.
|
|
■
|
MAA’s performance, based on various financial metrics over the last one, two and three-year time periods, ranked between the comparator group 50th and 75th percentiles
|
|
|
■
|
MAA’s three-year TSR performance ranked above the 75th percentile of the comparator group and above the 50th percentile of the SNL US REIT Multifamily Index
|
|
|
■
|
MAA’s total direct compensation ranked at the 40th percentile of the comparator peer group and the 33rd percentile when compared to only the multifamily peers
|
|
|
■
|
MAA’s target mix placed similar weighting on variable versus fixed compensation as the 50th percentile
|
|
|
■
|
MAA’s target long term incentive plan places a slightly greater emphasis on performance shares than restricted stock versus the peer group overall average
|
|
|
2020 PROXY STATEMENT
|
36
|
Overall, the Compensation Committee believed the results of the analysis indicated that total direct compensation in relation to performance and shareholder value
creation was directionally misaligned with the comparator peer group. The Compensation Committee also considered that the responsibilities for some of our NEOs are broader than market benchmarks. As a result, and after consideration of other factors,
the Compensation Committee felt it was appropriate to adopt moderate increases in base salaries and the opportunities under the AIP and LTIP plan for the NEOs for 2019.
|
ROLE OF EXECUTIVE MANAGEMENT
|
While our CEO does participate in general meetings of the Compensation Committee and provides input on compensation decisions related to the other NEOs, he does not
participate in executive sessions of the Compensation Committee nor does he participate in any discussions determining his own compensation. Annually, upon request from the Compensation Committee, our CEO provides the committee with data pertinent to
his and the other executive’s performance and compensation. Generally this information pertains to the achievement of individual functional goals.
At the end of any incentive plan measurement period, our CEO presents base results of the plan for the Compensation Committee’s review and, if necessary, further
evaluation and/or adjustment. The base results are calculated and prepared by our Chief Ethics and Compliance Officer and Corporate Secretary according to the underlying plan documents and then reviewed by the Director of Finance prior to presentation
to the Compensation Committee.
All incentive plans and any payments made thereunder are developed, adopted and awarded by the Compensation Committee. All compensation related to our CEO is
recommended by the Compensation Committee to our full Board, which ultimately has responsibility for approving CEO compensation.
The Compensation Committee annually evaluates the risks involved with all of our compensation programs, including risks specifically associated with our executive
compensation program, and strives to design total compensation programs that mitigate those risks without diminishing the incentive nature of the compensation. Following its 2019 evaluation, the Compensation Committee determined that our compensation
programs do not create risks that are reasonably likely to have a material adverse impact on MAA.
The following are specific design factors that the Compensation Committee believes help to discourage undue risk taking and are therefore considered in determining
the overall risk level of our executive and company-wide compensation programs.
Multiple Elements
|
All compensation programs include both fixed amounts (as in the case of base salary) and variable amounts dependent upon performance (as in the case of incentive
plans). This balanced, multi-component approach discourages undue risk taking in any one area as the greatest reward comes from balancing the results of all elements of compensation opportunities.
Shareholder Approved Caps On Incentive Awards
|
The Second Amended and Restated MAA 2013 Stock Incentive Plan, which was approved by shareholders at the 2018 Annual Meeting of Shareholders limits the amount of performance based awards
within a performance cycle granted to any one covered employee to 150,000 shares or $5 million for cash-based awards. The plan also limits the amount of stock option awards granted to any one associate within the calendar year to 100,000.
Individual Award Caps
|
In addition to the caps approved by shareholders for awards in general, each associate’s incentive program opportunity is capped. With respect to executive officers,
these caps are set by the Compensation Committee and, with respect to the CEO, the Board upon Compensation Committee recommendation, at levels below the limits approved by shareholders.
Senior And Executive Awards Include Separate Short And Long Term Opportunities
|
Incentive opportunities for senior and executive management contain both short and long term elements. This balanced approach discourages undue risk taking as the
greatest reward comes from balancing the results of both short and long term goals and ensures that executive management remains focused on both delivering results for today while also ensuring the ability to perform in the future.
|
|
2020 PROXY STATEMENT
|
37
|
Incentive Awards Are Tied To Performance (Pay For Performance)
|
Incentive opportunities are tied to individual and/or overall performance goals which are set in alignment with our annual and, in the case of senior and executive
management, long term strategic goals. This ensures that management remains focused on executing the strategic vision of MAA.
Target Levels Are Tied To MAA Guidance And Industry Return Performance
|
Target opportunities for senior and executive management are tied to our publicly disclosed guidance and our relative performance to the industry. While this
provides an opportunity to reward superior performance, it discourages undue risk taking because it does not require performance beyond that which is determined to be realistically achievable and set by MAA.
Performance Goals Are Tied To Measurable Metrics
|
Performance goals are tied to quantifiably measurable metrics and, in the case of senior and executive management, to financial information underlying our publicly
disclosed financial statements which are audited by our independent registered public accounting firm and reviewed by the Audit Committee. This reduces the risk that performance results can be manipulated.
Senior And Executive Awards Include Equity Elements
|
Part of the total compensation opportunity for senior and executive management includes awards of MAA equity. This helps to align senior and executive management
interests with those of our shareholders and discourages the risk of maximizing short term returns to the detriment of long-term goals, as associates will benefit from the increased value achieved for investors over time. In addition, equity elements
help to ensure we do not over compensate if shareholder value is not being created.
External Compensation Consultant Advises On Executive Compensation Plans
|
The Compensation Committee utilizes an external compensation consultant to advise on the structure and opportunities set for executive compensation. This helps to
ensure that MAA’s executive compensation plan opportunities both overall and on an individual NEO basis are in line with industry best practices and that we are neither over nor under paying our executive management team based on their role and
responsibilities.
Oversight Of Award Calculations
|
All incentive plan award calculations are reviewed by management and, in the case of executive awards, by the Compensation Committee with support from our Corporate
Secretary.
All Compensation Is Self-Funding
|
All elements of our compensation programs are self-funding in that performance measurements tied to performance based awards are calculated after the expense for the
awards is taken into account. This minimizes the risk that associates benefit at our shareholders’ expense as awards under our compensation plans will not have a subsequent negative impact on our financial statements.
We believe that any risks arising from our compensation policies and practices for our associates, including our NEOs, are not reasonably likely to have a material
adverse effect on the company. Furthermore, the Compensation Committee believes that the nature of the various elements of executive compensation does not encourage management to assume excessive risks.
|
COMPENSATION GOVERNANCE CONSIDERATIONS
|
In addition to the risk mitigating features and actions discussed under Risk Considerations, the Board has also established several corporate governance
practices which are specifically related to executive compensation and also help to mitigate potential risks.
Share Ownership Guidelines
|
To align our NEOs’ long-term financial interests with those of shareholders, our CEO is required to own three times his base salary and other NEOs are required to
own two times their respective base salary, in shares of MAA stock or the equivalent, within three years of appointment to the position. All NEOs are in compliance with this requirement.
Clawback Policy
|
If we are required to prepare and file an accounting restatement with the SEC, the Compensation Committee may require our CEO and the other NEOs to repay to MAA any
portion of incentive compensation that was paid in the preceding three years that would not have been paid if such compensation had been determined based on the financial results reported in the restated financial statements.
|
Holding Period Requirement
|
To further strengthen the alignment of interests between our NEOs and that of our shareholders, NEOs are required to retain ownership of at least 50% of net shares,
after the payment of taxes, acquired through equity incentive plans. NEOs must continue to retain these shares until retirement or other termination of the NEO’s employment, or until the executive is no longer designated as a NEO. All of our NEOs are
in compliance with the holding period requirement.
|
|
2020 PROXY STATEMENT
|
38
|
Prohibition On Hedging And Pledging Shares
|
In relation to MAA’s securities, NEOs are prohibited from purchasing financial instruments, or otherwise engaging in transactions, that hedge or offset or are
designed to hedge or offset, any decrease in the market value of equity securities granted as compensation, or held directly or indirectly by NEOs. Specifically, our policy prohibits NEOs from: (i) selling a security which is not owned at the time of
sale (short sale); (ii) buying or selling puts, calls, other derivative securities or other derivative securities that provide the economic equivalent of MAA securities or any opportunity to profit from a change in the value of MAA securities or engage
in other hedging transactions; (iii) using securities as collateral in a margin account; and (iv) pledging securities as collateral for a loan. See page 19 for additional details on MAA’s hedging and pledging policies.
In addition to the governance policies listed above, the Compensation Committee has affirmatively determined NOT to implement the below compensation practices as
they are generally negatively viewed within industry best practices and the Board does not believe they are in the best interests of our shareholders at this time.
|
|
NO
|
Perquisites or personal benefits
|
|
|
NO
|
Dividends or dividend equivalents on unearned performance shares
|
|
|
NO
|
Repricing underwater stock options
|
|
|
NO
|
Exchanges of underwater stock options for cash
|
|
|
NO
|
Multi-year guaranteed bonuses
|
|
|
NO
|
Inclusion of the value of equity awards in severance calculations
|
|
|
NO
|
Evergreen provisions in equity plans
|
|
|
NO
|
Tax “gross ups” for excess parachute payments
|
|
|
NO
|
“Single trigger” employment or change in control agreements
|
|
|
NO
|
Overlapping performance metrics among annual and long-term incentive plans for NEOs
|
In addition to our compensation philosophy and objectives, shareholder feedback, input from the compensation consultant, benchmarking data and compensation risk
factors, the Compensation Committee also takes into account the following considerations when determining executive compensation packages.
|
Labor market conditions
|
|
|
|
|
Personal development
|
|
|
|
|
|
Quality of internal working and reporting relationships and engagement in collaboration and teamwork with other executive management
|
|
|
|
|
|
Quality of leadership and human capital development
|
|
|
|
|
|
Succession planning and potential to assume increased responsibilities
|
The Compensation Committee does not generally consider prior compensation in making compensation decisions, believing that compensation should reflect the current
environment of the factors being considered.
The weight of any one factor or consideration may change over time and may vary among NEOs. The Compensation Committee designs our executive compensation program to
reflect all factors and considerations within the objectives of our compensation philosophy.
|
TAX AND ACCOUNTING IMPLICATIONS OF COMPENSATION
|
Section 162(m) of the Code historically limited the tax deductibility of annual compensation paid by a publicly held corporation to its “covered employees,” being
its principal executive officer or any of its three other most highly compensated executive officers (other than its principal financial officer), to $1 million, unless the compensation qualified as performance-based compensation under Section 162(m).
Under the Tax Cuts and Jobs Act of 2017, this “performance-based” exception was eliminated, and the definition of “covered employees” generally was expanded to cover all named executive officers, including the principal financial officer. These new
rules generally apply to taxable years beginning after December 31, 2017, but do not apply to compensation provided pursuant to a written, binding contract in effect on November 2, 2017 that is not modified in any material respect after that date.
Since MAA qualifies as a REIT under the Code and is generally not subject to federal income taxes, we believe the payment of compensation that may exceed the
deduction limit under Section 162(m) would not have a material adverse consequence to us, provided we continue to distribute 100% of our taxable income. If we make compensation payments subject to Section 162(m) limitations on deductibility, we may be
required to make additional distributions to shareholders to comply with our REIT distribution requirements and eliminate our U.S.
|
|
2020 PROXY STATEMENT
|
39
|
federal income tax liability or, alternatively, a larger portion of shareholder distributions that would otherwise have been treated as a return of capital may be
subject to federal income tax expense as dividend income. Any such compensation allocated to MAA’s taxable REIT subsidiaries whose income is subject to federal income taxes would result in an increase in income taxes due to the inability to deduct such
compensation. Although we are mindful of the limits imposed by Section 162(m), even if it is determined that Section 162(m) applies or may apply to certain of our compensation packages, we have reserved, and will continue to reserve, the right to
structure our compensation packages and awards in a manner that may exceed the limitation on deduction imposed by Section 162(m).
|
PROGRAM STRUCTURE AND GOVERNANCE
|
|
TOTAL DIRECT COMPENSATION STRUCTURE
|
14 1The general elements and structure of our 2019 executive compensation program were unchanged from the 2018 executive compensation program that shareholders approved at the 2019 Annual Meeting of Shareholders.
An overview of the 2019 total direct compensation program for executive management is provided below. This chart should be read in conjunction with the following
discussion, which provides additional details of the three elements of our 2019 compensation program: Base Salary, AIP and LTIP.
|
|
2020 PROXY STATEMENT
|
40
|
|
|
The Compensation Committee pays base salaries to attract talented executives and to provide a fixed component of cash compensation. Because several other elements of compensation are driven by base salary, the
Compensation Committee is careful to set what it believes is the appropriate level of base salary and considers the level both in terms of the base salary on its own and the impact to each NEOs total compensation package.
|
|
|
|
See page 50 for actuals.
|
The AIP incentivizes executives to achieve our annual goals. It is a mix of both overall company performance, in the form of a MAA financial metric
, and individual functional goals which include quantifiable metrics associated with the respective executive’s functional area and leadership responsibilities.
Specific goals
are set at the beginning of the year by the Compensation Committee and vary both by executive and by year in order to meet our then current annual strategic goals.
|
Individual Functional Goals
|
The individual functional goals are capped at the Target opportunity level.
1Examples of topics for which individual functional goals related to management,
oversight or initiatives may be set for each NEO are represented by the summary of the 2019 individual functional goals listed below.
|
CEO
|
|
CFO
|
|
◾ Strategic leadership supporting execution of operational, transactional and financing
business plans
◾ Shareholder and capital market engagement
◾ Financial performance exceeding market expectations
◾ Enhance human capital programs
◾ Revision and enhancement of formal succession plans encompassing directors, executives and senior
management
◾ Pursue new technologies providing improved operating margins
◾ Continued development of formal ESG program including enhanced disclosures and long-term performance
goals
|
|
◾ Balance sheet and capital structure management in line with three-year strategic plan approved by Board
◾ Management of information technology platform including functionality, and security and cybersecurity
enhancements
◾ Fully develop enterprise project management office
◾ Shareholder, analyst and market engagement management
◾ Implementation of formal ESG efforts to include participation in the GRESB survey
◾ Management of production of accurate and quality publicly reported financial statements
◾ Expense management
|
COO
|
|
GC
|
|
◾ Multifamily same store GOI growth in line with guidance, encompassing independent revenue and expense
growth targets
◾ Redevelopment volume and associated return on investment targets
◾ Successful rollout and/or development and testing of identified new resident services and asset
management opportunities
◾ Management of capital spend and operational general and administrative expenses
|
|
◾ Complete reviews and collaborate with functional areas to develop recommendations on various strategic
initiatives and projects
◾ Strengthen external regulatory and industry relations
◾ Various Commercial performance criteria including NOI, and new and renewal lease execution
◾ Enhancement of crisis management preparedness
◾ Management of legal spend
◾ Shareholder engagement
|
Financial Metric
The applicable AIP financial metric, which for 2019 is FFO per Share, may be set in the plan to adjust for the impact of accounting regulations or one-time events that the
Compensation Committee feels do not reflect the true ongoing operations of MAA or believes may inadvertently divert executives from MAA’s strategic goals. For example, for the 2019 AIP, the FFO per Share metric excludes the non-cash mark-to-market
accounting impact of an embedded derivative in the preferred shares we were required to issue in
See page 50 for actuals.
|
|
2020 PROXY STATEMENT
|
41
|
AIP
conjunction with the Post Properties, Inc. merger. The Compensation Committee believed the volatility resulting from the required accounting treatment for
this item could inappropriately impact, either positively or negatively, the true operational results of MAA and therefore determined it should not be considered in awarding incentives for executive management.
1
1The scale for the MAA financial metric allows for a range of results and payouts
tied to our initial publicly-disclosed range of guidance to incentivize management to meet market expectations. The Target level is assigned to the mid-point of the range, with the Maximum and Threshold levels representing the top and bottom of the
range, respectively. Awards related to performance between levels are straightline interpolated. No award is earned below the Threshold level and awards are capped at the Maximum level.
Change From 2018: Historically, the Compensation Committee set a Maximum opportunity for the financial metric tied
to the top end of our guidance range and considered that the 100% award payout for the metric. As such, the Target opportunity tied to the midpoint of the range and the Threshold opportunity tied to the bottom of the range were represented as
percentages of the Maximum opportunity level, or less than 100%. To better align our disclosures with broader market compensation plan standards and better represent our performance expectations in line with the midpoint of our guidance range, the
Compensation Committee adjusted the approach used for setting opportunity levels in 2019 to consider the Target level as the 100% award payout with the Maximum and Threshold opportunities being represented as a percentage of Target.
The table to the right outlines the performance scale to be applied to the FFO per Share metric award opportunities set for the 2019 AIP.
|
|
|
MAA FFO per Share Guidance Range
|
|
|
|
$6.15
|
|
$6.27
|
|
$6.03
|
|
|
|
Midpoint
|
|
Top
|
|
Bottom
|
|
|
|
|
|
As a Percent of Target
|
|
|
|
TARGET
|
|
MAXIMUM
|
|
THRESHOLD
|
|
BOLTON CEO
|
|
100%
|
|
151%
|
|
25%
|
|
GRIMES COO
|
|
100%
|
|
225%
|
|
25%
|
|
CAMPBELL CFO
|
|
100%
|
|
159%
|
|
25%
|
|
DELPRIORE GC
|
|
100%
|
|
159%
|
|
25%
|
FFO per Share is a generally accepted measure of overall performance in the REIT industry because it excludes depreciation amortization expense of real
estate assets which is generally not correlated with changes in the value of those assets because such value does not diminish predictably over time, as historical cost depreciation implies. The Compensation Committee feels that FFO per Share is a
good measure of actual operating performance. Additional information on FFO per Share can be found in the Non-GAAP Financial Measures section on pages 74-75 of this Proxy Statement.
Optional Award Modifier
1To allow for consideration of other unusual events, the Compensation Committee
has the ability to modify an award, either for all or individual executives, up or down by 25% as long as the final award is not greater than the original cap set in the plan. This both discourages executives from maximizing their personal
incentive to MAA’s detriment and protects the executives if strategic directives change during the year requiring their focus to move away from the individual functional goals originally set by the Compensation Committee.
Optional Equity Option
1Executives can elect to receive all or any portion of their AIP award in shares of restricted stock
in lieu of cash. If this election is made, the executive receives shares of restricted stock equivalent to 125% of the value of the amount of the award the executive would have otherwise received in cash. The shares of restricted stock are issued
when the Compensation Committee approves awards under the AIP and vest equally over three years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date. If elected, the number of shares of
restricted stock issued is based on the closing stock price on the day the award is granted, allowing the executive to benefit from the increase in share value during the vesting period for the shares.
See page 50 for actuals.
|
|
2020 PROXY STATEMENT
|
42
|
1The LTIP incentivizes executives to balance annual performance with our long term goals. It is a mix of
both overall company performance, in the forms of a MAA financial metric and shareholder return, and a continued service in good standing requirement. All awards under the LTIP are made in shares of restricted stock based on MAA’s closing stock price
on the plan grant date, allowing the executive to benefit from increases in share value created during the respective performance and vesting periods.
Financial Metric
The applicable LTIP financial metric may be set in the plan to adjust for the impact of accounting regulations or one-time events that the Compensation
Committee feels do not reflect the true ongoing operations of MAA or believes may inadvertently divert executives from MAA’s strategic goals. For example, for the 2019 LTIP, the financial metric excludes the non-cash mark-to-market accounting impact
of an embedded derivative in the preferred shares we were required to issue in conjunction with the Post Properties, Inc. merger. The Compensation Committee believed the volatility resulting from the required accounting treatment for this item could
inappropriately impact, either positively or negatively, the true operational results of MAA and therefore determined it should not be considered in awarding incentives for executive management.
1
Change From 2018:
1In line with current best
governance practices, the Compensation Committee determined to utilize different financial metrics in the 2019 AIP and LTIP. As such, the MAA financial metric chosen for the 2019 LTIP was FAD. As an owner and operator of real estate, MAA considers
FAD to be an important measure of performance from core operations because it measures the ability to control revenues, expenses and total capital expenditures. Additional information on FAD can be found in the
Non-GAAP
Financial Measures section on pages 74-75 of this Proxy Statement.
1While the FFO per Share metric is classified as short term in the AIP because
executives can elect to receive a cash payment at the end of the one year performance period, the FAD metric under the LTIP is classified as part of the long-term compensation due to the combined length of time of the performance and vesting periods,
as any earned awards are required to be issued in shares of restricted stock that vest over a multi-year period.
1The scale for the MAA financial metric allows for a range of results and payouts
tied to our initial publicly-disclosed range of guidance to incentivize management to meet market expectations. The Target level is assigned to the mid-point of the range, with the Maximum and Threshold levels representing the top and bottom of the
range, respectively.
The performance period for the FAD metric in the 2019 LTIP is 2019. Any awards earned will be issued as shares of restricted stock on April 1, 2020 and will
vest equally over two years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date.
Shareholder Return Metric
The performance period for the Relative Three-Year TSR metric in the 2019 LTIP is 2019 - 2021. To eliminate the impact of the volatility generated by the price fluctuations of
any one market day, the calculations for the three year TSR returns utilize the average of the closing stock prices for December 2016 and December 2019 as the beginning and ending stock prices. Any awards earned will be issued as shares of restricted
stock on April 1, 2022 and will immediately vest upon issuance.
See page 50 for actuals.;
|
|
2020 PROXY STATEMENT
|
43
|
LTIP
Performance Scales
CHANGE FROM 2018: As was done for the FFO per Share metric in the 2019 AIP, the Compensation Committee adjusted the
approach to setting opportunity levels for both the financial and shareholder return performance metrics in the 2019 LTIP to consider the Target level as the 100% award payout with the Maximum and Threshold opportunities being represented as a
percentage of Target in order to better align our disclosures with broader market compensation plan standards and better represent our performance expectations.
The table to the right outlines the performance scale to be applied to the FAD and relative three-year TSR metric award opportunities set for the 2019 LTIP.
Awards related to performance between levels are straightline interpolated. No award is earned below the Threshold levels and awards are capped at the Maximum levels.
|
|
|
FAD
|
|
|
|
|
|
|
Relative Three-Year TSR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MAA
FAD Tied to Guidance Range
|
|
|
SNL
U.S. REIT Multifamily Index
|
|
|
|
$520.9M
|
|
$530.9M
|
|
$510.9M
|
|
|
|
|
Index
|
|
Index
|
|
|
|
Midpoint
|
|
Top
|
|
Bottom
|
|
|
Index
|
|
+300 bps
|
|
-300 bps
|
|
|
|
|
|
As a Percent of Target
|
|
|
|
|
As a Percent of Target
|
|
|
|
TARGET
|
|
MAXIMUM
|
|
THRESHOLD
|
|
|
TARGET
|
|
MAXIMUM
|
|
THRESHOLD
|
|
BOLTON CEO
|
|
100%
|
|
150%
|
|
25%
|
|
|
100%
|
|
150%
|
|
25%
|
|
GRIMES COO
|
|
100%
|
|
150%
|
|
25%
|
|
|
100%
|
|
150%
|
|
25%
|
|
CAMPBELL CFO
|
100%
|
|
150%
|
|
25%
|
|
|
100%
|
|
150%
|
|
25%
|
|
DELPRIORE GC
|
|
100%
|
|
150%
|
|
25%
|
|
|
100%
|
|
150%
|
|
25%
|
Service Based
1The Compensation Committee recognizes that for various reasons there are times when
the performance of any one or two metrics may not fully reflect the true performance of a company, particularly if it is going through a period of investing for the future. For this reason, the Compensation Committee believes it is appropriate to
utilize service-based restricted shares as a retention tool. The Compensation Committee also believes that these shares help ensure equity ownership by our NEOs, aligning them with the long-term interests of our shareholders. The shares of restricted
stock granted in 2019 vest equally over three years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date.
The Compensation Committee classifies these service shares as part of the long-term compensation for executive management due to the length of the vesting
period. While the Compensation Committee classifies these shares as fixed compensation as the number of shares of restricted stock is fixed, because the shares are issued at the beginning of the plan period, the shares contain a performance aspect as
well as the ultimate value the executive receives will be impacted by changes in MAA’s stock price in the market before vesting.
Overall, the Compensation Committee believes the above elements provide a mix of cash and equity opportunities, reward individual effort and overall company
performance, balance managing our needs for today while preparing for the future, align executive management’s interests with those of our shareholders and are financially sustainable.
See page 50 for actuals.
2019 TARGET COMPENSATION 1
As discussed in Findings of Compensation Consultant, target direct compensation for each NEO as compared to the
compensation comparator group was found to be lagging the 50th percentile. Given the performance results exceeding the 50th percentile over various time periods, the Compensation Committee felt that increases in the compensation packages for 2019 were warranted. The Compensation Committee considered the directional recommendations of the
external compensation consultant, the average company-wide planned increases and strategic expense expectations for 2019 along with various other factors. The Compensation Committee also reviewed the individual benchmark data specific to each
individual NEO and considered various variables including time and performance in position, scope of responsibilities and development plans for the future, ultimately concluding it would be appropriate to more closely align NEO total direct
compensation with the 50th percentile of the comparator peer group.
The Compensation Committee determined to award modest increases in base salaries and Target and Maximum award opportunities under the 2019 AIP and provide
slightly larger opportunity increases within the 2019 LTIP as the LTIP ties realized compensation to performance criteria, encompasses both short and long term goals and is awarded in shares of restricted stock which further aligns management with the
best interests of our shareholders.
|
|
2020 PROXY STATEMENT
|
44
|
The following table provides the opportunities at the Target levels for each NEO under the AIP and LTIP for 2019, expressed as a percentage of base salary.
|
|
|
|
2019 AIP TARGET
|
|
|
2019 LTIP TARGET
|
|
|
|
|
FFO per
|
|
Functional
|
|
Total
|
|
|
3-YR
|
|
|
|
|
|
Total
|
|
|
|
|
Share
|
|
Goals
|
|
Cash
|
|
Equity (1)
|
|
|
TSR
|
|
FAD
|
|
Service
|
|
Equity
|
|
BOLTON CEO
|
|
175.00%
|
|
N/A
|
|
175.00%
|
OR
|
218.75%
|
|
|
187.50%
|
|
112.50%
|
|
75.00%
|
|
375.00%
|
|
GRIMES COO
|
|
56.00%
|
|
84.00%
|
|
140.00%
|
OR
|
175.00%
|
|
|
137.50%
|
|
82.50%
|
|
55.00%
|
|
275.00%
|
|
CAMPBELL CFO
|
93.75%
|
|
31.25%
|
|
125.00%
|
OR
|
156.25%
|
|
|
137.50%
|
|
82.50%
|
|
55.00%
|
|
275.00%
|
|
DELPRIORE GC
|
|
93.75%
|
|
31.25%
|
|
125.00%
|
OR
|
156.25%
|
|
|
137.50%
|
|
82.50%
|
|
55.00%
|
|
275.00%
|
|
(1)
|
Reflects the 25% premium if the NEO elects to have the entire award issued as shares of restricted stock.
|
The Compensation Committee felt it is appropriate to tie 100% of our CEO’s opportunity under the 2019 AIP to the FFO per Share financial metric, as it is a key
financial result focused on by analysts and investors in the REIT industry. For other NEOs, the mix between FFO per Share and functional goals varies based on role, responsibilities and “line of sight” as relates to various performance metrics.
The following table provides the Target values of all direct compensation plans in place for each NEO during 2019 as compared to 2018. The Target awards under
the AIP are represented as cash which is in line with the actual elections made by the NEOs.
|
|
|
2019 TARGET DIRECT COMPENSATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTIP SHARES OF
|
|
|
|
|
SHARES OF
|
|
|
|
BASE SALARY
|
|
|
AIP CASH
|
|
|
RESTRICTED STOCK
|
|
|
|
|
RESTRICTED
|
|
|
|
2018
|
|
2019
|
|
Change
|
|
|
2018
|
|
2019
|
|
Change (1)
|
|
|
2018
|
|
2019
|
|
Change
|
|
|
CASH
|
|
STOCK
|
|
BOLTON CEO
|
|
$ 775,000
|
|
$ 814,000
|
|
5%
|
|
|
$ 1,298,125
|
|
$ 1,424,500
|
|
10%
|
|
|
26,427
|
|
32,133
|
|
22%
|
|
|
$ 2,238,500
|
|
32,133
|
|
GRIMES COO
|
|
$ 496,100
|
|
$ 516,000
|
|
4%
|
|
|
$ 884,149
|
|
$ 722,400
|
|
-18%
|
|
|
13,157
|
|
14,937
|
|
14%
|
|
|
$ 1,238,400
|
|
14,937
|
|
CAMPBELL CFO
|
$ 484,000
|
|
$ 503,500
|
|
4%
|
|
|
$ 546,315
|
|
$ 629,375
|
|
15%
|
|
|
12,835
|
|
14,575
|
|
14%
|
|
|
$ 1,132,875
|
|
14,575
|
|
DELPRIORE GC
|
|
$ 471,900
|
|
$ 491,000
|
|
4%
|
|
|
$ 532,658
|
|
$ 613,750
|
|
15%
|
|
|
10,727
|
|
14,213
|
|
32%
|
|
|
$ 1,104,750
|
|
14,213
|
|
(1)
|
The reduction in Mr. Grimes’ Target AIP opportunity in 2019 from 2018 is a result of the Compensation Committee adjusting their approach to set award opportunities and metric splits at the Target level in 2019 as
opposed to at the Maximum level as was done in 2018. Due to his scope of responsibilities, Mr. Grimes’ split between the metrics more heavily favors his performance in relation to individual functional goals to which varying performance
levels do not apply effectively causing a reversal of weighting between the metrics at the Target level for Mr. Grimes and resulting in the Target levels between the 2018 AIP and the 2019 AIP to be somewhat incomparable. Mr. Grimes’ Maximum
AIP opportunity increased from $992,200 in 2018 to $1,083,600 under the AIP. While the change in approach to setting Target and Maximum values caused a one-time shift for Mr. Grimes within the scale, the Compensation Committee felt it was
appropriate to change to a Target-centered scale to better reflect our expected results and align with industry practices.
|
The Target values set by the Compensation Committee for 2019 provided the following mix of compensation elements for our NEOs, which the committee determined
was an appropriate balance of all factors considered.
|
|
2020 PROXY STATEMENT
|
45
|
2019 COMPENSATION CAPS
The following schedule provides the maximum direct compensation opportunities realizable, or caps, for over-performance from Target under the 2019 executive
compensation program set by the Compensation Committee for our CEO and other NEOs.
|
|
|
|
MAXIMUM OR CAPPED DIRECT OPPORTUNITIES - 2019 EXECUTIVE COMPENSATION PROGRAM
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
|
|
|
|
|
|
AIP
|
|
|
LTIP
|
|
|
|
SHARES OF
|
|
|
|
|
|
|
FFO per
|
|
FUNCTIONAL
|
|
PERCENT
|
|
|
|
|
|
|
|
|
|
|
PERCENT
|
|
|
|
RESTRICTED
|
|
|
|
|
SALARY
|
|
|
Share
|
|
GOALS
|
|
TOTAL
|
|
OF SALARY
|
|
|
SERVICE
|
|
FAD
|
|
3-YR TSR
|
|
TOTAL
|
|
OF SALARY
|
|
CASH (1)
|
|
STOCK (1)
|
|
BOLTON CEO
|
|
$ 814,000
|
|
|
$ 2,157,100
|
|
N/A
|
|
$ 2,157,100
|
|
265%
|
|
|
6,426
|
|
14,482
|
|
24,079
|
|
44,987
|
|
525%
|
|
$ 2,971,100
|
|
44,987
|
|
GRIMES COO
|
|
$ 516,000
|
|
|
$ 650,160
|
|
$ 433,440
|
|
$ 1,083,600
|
|
210%
|
|
|
2,987
|
|
6,735
|
|
11,190
|
|
20,912
|
|
385%
|
|
$ 1,599,600
|
|
20,912
|
|
CAMPBELL CFO
|
$ 503,500
|
|
|
$ 748,956
|
|
$ 157,344
|
|
$ 906,300
|
|
180%
|
|
|
2,915
|
|
6,572
|
|
10,919
|
|
20,406
|
|
385%
|
|
$ 1,409,800
|
|
20,406
|
|
DELPRIORE GC
|
$ 491,000
|
|
|
$ 730,363
|
|
$ 153,438
|
|
$ 883,800
|
|
180%
|
|
|
2,842
|
|
6,409
|
|
10,648
|
|
19,899
|
|
385%
|
|
$ 1,374,800
|
|
19,899
|
|
(1)
|
Assumes all NEOs elect to receive AIP award as cash in lieu of shares of restricted stock.
|
2019 DIRECT EXECUTIVE COMPENSATION
The Compensation Committee believes it is important that executive compensation reflect the overall performance and health of the company including both annual
financial measures and long-term shareholder return, and has therefore tied a substantial majority of our CEO’s and each of the other NEO’s compensation to performance measures. Below is a review of MAA’s performance during 2019. You can find more
details in our Annual Report on Form 10-K filed with the SEC on February 20, 2020.
OVERALL MAA FINANCIAL PERFORMANCE
Net Income, FFO And FAD
For the year ended December 31, 2019, net income available for MAA common shareholders was $350.1 million, or $3.07 per diluted common share, compared to $219.2
million, or $1.93 per diluted common share, for the year ended December 31, 2018. Results for the year ended December 31, 2019 included $17.9 million, or $0.16 per diluted common share, of non-cash income related to the fair value adjustment of the
embedded derivative in the MAA Series I preferred shares and $93.0 million, or $0.82 per diluted common share, of gains related to the sale of real estate assets. Results for the year ended December 31, 2018 included $2.6 million, or $0.02 per diluted
common share, of non-cash expense related to the embedded derivative in the preferred shares and $4.5 million, or $0.04 per diluted common share, of gains related to the sale of real estate assets.
For the year ended December 31, 2019, FFO was $773.2 million, or $6.55 per Share, compared to $712.7 million, or $6.04 per Share, for the year ended December
31, 2018. Results for the year ended December 31, 2019 included $17.9 million, or $0.15 per Share, of non-cash income related to the embedded derivative in the preferred shares and $12.0 million, or $0.10 per Share, of gains related to the sale of
non-depreciable real estate assets. Results for the year ended December 31, 2018 included $2.6 million, or $0.02 per Share, of non-cash expense related to the embedded derivative in the preferred shares and $4.5 million, or $0.04 per Share, of gains
related to the sale of non-depreciable real estate assets.
A reconciliation of FFO and FAD to net income available
for MAA common shareholders is set forth in the Non-GAAP Financial Measures section on pages 74-75 of this Proxy Statement.
|
|
2020 PROXY STATEMENT
|
46
|
AIP AND LTIP FINANCIAL METRIC PERFORMANCE
2019 AIP FFO Per Share
|
|
(1)
|
Our 2019 FFO per Share guidance did not include any impact related to the preferred shares we issued in our merger with Post Properties, Inc.
|
|
|
(2)
|
Adjusted to exclude the actual 2019 non-cash mark-to-market income ($0.15 per Share) related to the embedded derivative in the preferred shares we issued in our merger with Post Properties, Inc., as per the 2019 AIP to be comparable to our
guidance.
|
2019 LTIP FAD
In millions
|
|
(1)
|
Represents the level of FAD corresponding to our 2019 FFO per Share guidance range, which did not include any
impact related to the preferred shares we issued in our merger with Post Properties, Inc..
|
|
|
(2)
|
Adjusted to exclude the actual 2019 non-cash mark-to-market income ($17.9 million) related to
the embedded derivative in the preferred shares we issued in our merger with Post Properties, Inc., as per the 2019 LTIP to be comparable to our guidance.
|
OTHER HIGHLIGHTS
Additional performance achievements along with other highlights for 2019 are listed below.
|
|
■
|
Increased same store portfolio revenues by 3.4% over 2018 while holding same store expense growth to 2.9%,
|
|
|
■
|
Acquired one multifamily community consisting of 271 units and entered into two pre-purchase development deals for an additional 609 units expected to be delivered during
2021,
|
|
|
■
|
Redeveloped 8,329 units at an average cost of $5,876 per unit, achieving average rental rate increases of approximately 9.8% above non-renovated units,
|
|
|
■
|
Invested $113 million in our development pipeline, starting construction on three new projects and one expansion project to an existing multifamily community and completing
the development of two expansion projects to existing multifamily communities, ending the year with five developments under construction for a total of 1,499 units,
|
|
|
■
|
Issued $300 million of 3.950% senior unsecured notes due in 2029 at an issue price of 99.720% with an additional $250 million of 3.950% senior unsecured notes due in 2029 with
a reoffer yield of 2.985%, and $300 million of 2.750% senior unsecured notes due in 2030 through our primary operating partnership,
|
|
|
■
|
Ended the year with total debt to adjusted total assets (as defined in the covenants for the bonds issued by our primary operating partnership) of 31.4%, compared to 32.6% as
of December 31, 2018,
|
|
|
■
|
Ended the year with total debt outstanding of $4.5 billion at an average effective interest rate of 3.8%, with 98.4% fixed or hedged against rising interest rates for an
average of 7.6 years and 90.2% of our total NOI unencumbered, and
|
|
|
■
|
Completed our first GRESB assessment to help assess and benchmark our ESG performance and provide a baseline for our inaugural sustainability report to be issued in 2020.
|
|
|
2020 PROXY STATEMENT
|
47
|
RETURNS TO SHAREHOLDERS
Dividends
Highlights of MAA’s common dividend history include the items listed
below.
In 2019
|
|
■
|
Declared our 104th common dividend payment
|
|
|
■
|
Returned nearly $437 million to common shareholders in the form of cash dividends
|
Since April 1994
|
|
■
|
Have never failed to pay a quarterly cash dividend to common shareholders
|
|
|
■
|
Have never decreased the common dividend rate
|
|
|
■
|
Quarterly common dividend rate increased 269% from $0.26 in 1994 to $0.96 in 2019
|
Annual Dividend Paid Per Common Share
TSR
We have consistently returned significant value to shareholders over the long term. We measure that value based on absolute and relative TSR
results. TSR is a measure of the performance of shares of stock over time that combines share price appreciation and the reinvestment of dividends to represent the total return to shareholders as an annualized percentage. Following are 2019,
three-year and five-year TSR results.
2019 TSR
MAA
42.5%
|
SNL U.S. REIT Multifamily Index
26.80%
|
S&P 500 Total Return Index
31.49%
|
Annualized 2017 LTIP Relative Three Year TSR (1)
The chart to the right represents our annualized three-year TSR as compared to the SNL U.S. REIT Multifamily Index, as calculated under the terms
of our 2017 LTIP.
|
|
(1)
|
In order to eliminate the impact of the volatility generated by the price fluctuations of any one market day, the calculations for the three year TSR returns for MAA and the
SNL U.S. REIT Multifamily Index under the 2017 LTIP utilize the average of the closing stock prices in December 2016 and December 2019 as the beginning and ending stock prices.
|
Five Year Cumulative Total Returns
The following chart shows how a $100 investment in MAA common stock on December 31, 2014 would have grown to $211.48 on December 31, 2019, with
dividends reinvested quarterly. The chart also compares the total shareholder return on our common stock to the same investment in the S&P 500 Index and the FTSE NAREIT Equity REIT Index.
|
|
2020 PROXY STATEMENT
|
48
|
2019 DIRECT EXECUTIVE COMPENSATION REALIZED
In March 2020, the Compensation Committee reviewed the performance of relevant metrics related to outstanding incentive plans for our executive officers in order to
determine and make awards thereunder. The following discussion reviews the total compensation realized by our CEO and other NEOs for 2019.
2019 DIRECT COMPENSATION PLANS
As noted in the 2019 MAA Performance section of this Proxy Statement, the actual FFO per Share and FAD results for 2019 were above the top end of our
original guidance range for 2019, resulting in our executive officers earning their respective Maximum opportunity available for the FFO per Share metric in the 2019 AIP and the FAD metric in the 2019 LTIP (with earned awards subject to additional
continued service requirements).
The Compensation Committee reviewed the achievement of individual functional goals as previously set at the beginning of 2019 for each executive under the 2019 AIP,
discussing the performance of the NEOs with our CEO. While our CEO’s opportunity under the 2019 AIP is tied solely to the financial metric, the Compensation Committee also reviewed the achievement of his goals, discussing the results with the Board.
Following these reviews, the Compensation Committee made the following determinations.
H. Eric Bolton, Jr.
Mr. Bolton’s goals for 2019 encompassed various initiatives related to strategic leadership supporting execution of operational, transactional and financing business
plans, shareholder and capital market engagement, financial performance exceeding market expectations, enhancement of human capital programs, revision and enhancement of formal succession plans encompassing directors, executives and senior management,
pursuit of new technologies providing improved operating margins and continued development of our formal ESG program including enhanced disclosures and long-term performance goals.
Mr. Bolton’s individual functional goal achievements do not result in an award under the AIP but are set and reviewed by the Compensation Committee and Board
as a matter of good governance.
Thomas L. Grimes, Jr.
Mr. Grimes’ goals for 2019 included delivering multifamily same store GOI growth in line with guidance, encompassing independent revenue and expense growth targets,
completing predetermined redevelopment volume with associated return on investment targets, successfully rolling out and/or developing and testing certain new resident services and asset management opportunities, and managing capital spend and
operational general and administrative expenses within predetermined levels. The Compensation Committee reviewed Mr. Grimes’ performance during 2019, comparing actual results achieved to the performance levels previously set at the beginning of the
year and determined that Mr. Grimes had met or exceeded all of his individual functional goals.
|
100% of Individual Functional Goals
Achieved
|
Albert M. Campbell, III
Mr. Campbell’s goals for 2019 included balance sheet and capital structure management in line with long-term strategic plans, successful management of the
information technology platform including functionality, and certain security and cybersecurity enhancements, development of the enterprise project management office, execution of shareholder, analyst and market engagement initiatives, implementation
of certain ESG efforts to include participation in the GRESB survey, production of accurate and quality financial statements and expense management within predetermined levels. The Compensation Committee reviewed Mr. Campbell’s performance during 2019,
comparing actual results achieved to the performance levels and requirements previously set at the beginning of the year and determined that Mr. Campbell had materially completed, met or exceeded each of his individual functional goals. The
Compensation Committee considered the level of achievement for goals not fully met and their respective weights within the 2019 AIP.
|
96% of Individual Functional Goals
Achieved
|
Robert J. DelPriore
Mr. DelPriore’s goals for 2019 encompassed developing recommendations in collaboration with functional areas on various strategic initiatives and projects,
strengthening external regulatory and industry relations, meeting various predetermined performance criteria including NOI and new and renewal lease execution for our commercial assets, enhancing our crisis management preparedness, management of legal
spend within predetermined levels and shareholder engagement activities. The Compensation Committee reviewed Mr. DelPriore’s performance during 2019, comparing actual results achieved to the performance levels and requirements previously set at the
beginning of the year and determined that Mr. DelPriore had met or exceeded each of his individual functional goals.
|
100% of Individual Functional Goals
Achieved
|
The performance period for the Three Year Relative TSR metric under the 2019 LTIP does not end until December 31, 2021 so no award determination was made by the
Compensation Committee for 2019.
The Compensation Committee did not believe there were any circumstances that warranted the utilization of the modifier in the AIP to adjust any of the calculated
awards under the plan.
|
|
2020 PROXY STATEMENT
|
49
|
As a result of the above analysis, the compensation awarded to the CEO by the Board upon recommendation by the Compensation Committee, and the other NEOs by the
Compensation Committee, for work performed in 2019 under the 2019 executive compensation program is provided in the table below.
|
|
|
|
2019 DIRECT COMPENSATION REALIZED FROM 2019 EXECUTIVE COMPENSATION PROGRAM
|
|
REMAINING REALIZABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
AS AWARDED
|
|
TARGET LTIP 3-YR TSR (3)
|
|
|
|
|
|
AIP (1)
|
|
|
|
|
|
|
TOTAL
|
|
|
|
SHARES OF
|
|
|
|
SHARES OF
|
|
|
|
|
|
|
FFO PER
|
|
FUNCTIONAL
|
|
LTIP (non-cash) (2)
|
|
|
COMPENSATION
|
|
|
|
RESTRICTED
|
|
AWARDS
|
|
RESTRICTED
|
|
|
|
|
SALARY
|
|
SHARE
|
|
GOALS
|
|
SERVICE
|
|
FAD
|
|
|
(in Dollars)
|
|
CASH (1)
|
|
STOCK (2)
|
|
(in Dollars)
|
|
STOCK
|
|
BOLTON CEO
|
|
$ 814,000
|
|
$ 2,157,100
|
|
N/A
|
|
$ 610,500
|
|
$ 1,375,660
|
|
|
$ 4,957,260
|
|
$ 2,971,100
|
|
20,908
|
|
$ 1,526,250
|
|
16,067
|
|
GRIMES COO
|
|
$ 516,000
|
|
$ 650,160
|
|
$ 433,440
|
|
$ 283,800
|
|
$ 639,840
|
|
|
$ 2,523,240
|
|
$ 1,599,600
|
|
9,722
|
|
$ 709,500
|
|
7,469
|
|
CAMPBELL CFO
|
$ 503,500
|
|
$ 748,956
|
|
$ 151,050
|
|
$ 276,925
|
|
$ 624,340
|
|
|
$ 2,304,771
|
|
$ 1,403,506
|
|
9,487
|
|
$ 692,313
|
|
7,288
|
|
DELPRIORE GC
|
$ 491,000
|
|
$ 730,363
|
|
$ 153,438
|
|
$ 270,050
|
|
$ 608,840
|
|
|
$ 2,253,691
|
|
$ 1,374,801
|
|
9,251
|
|
$ 675,125
|
|
7,107
|
|
|
(1)
|
Awards earned under the 2019 AIP are shown in dollars to reflect each NEO’s election to receive 100% of the award in cash.
|
|
|
(2)
|
Awards earned under the 2019 LTIP were issued as shares of restricted stock which remain at risk of forfeiture until vested, dependent upon the NEO’s continued employment in
good standing with MAA through each vest date. Service shares were issued on January 9, 2019 and will vest in three equal annual installments on the anniversary of the issuance date. FAD shares were issued on April 1, 2020 and will vest in two
equal annual installments on the anniversary of the issuance date.
|
|
|
(3)
|
The performance period for the 2019 LTIP Relative Three Year TSR, which is 2019 – 2021, has not yet completed. Any awards earned will be issued in shares of restricted stock on
April 1, 2022 and will immediately vest upon issuance.
|
The above realized compensation represents the percent of Target and Maximum direct compensation opportunities as indicated in the table below.
|
|
|
|
COMPENSATION REALIZED
|
|
|
|
|
|
|
|
AIP
|
|
|
LTIP
|
|
|
|
|
|
|
AS PERCENT OF TARGET
|
|
AS PERCENT OF MAXIMUM
|
|
|
AS PERCENT OF TARGET
|
|
AS PERCENT OF MAXIMUM
|
|
|
|
|
|
|
|
FFO PER
|
|
FUNCTIONAL
|
|
|
|
FFO PER
|
|
FUNCTIONAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SALARY
|
|
|
SHARE
|
|
GOALS (1)
|
|
TOTAL
|
|
SHARE
|
|
GOALS (1)
|
|
TOTAL
|
|
|
SERVICE (2)
|
|
FAD (2)
|
|
TOTAL
|
|
SERVICE (2)
|
|
FAD (2)
|
|
TOTAL
|
|
BOLTON CEO
|
|
100%
|
|
|
151%
|
|
N/A
|
|
151%
|
|
100%
|
|
N/A
|
|
100%
|
|
|
100%
|
|
150%
|
|
130%
|
|
100%
|
|
100%
|
|
100%
|
|
GRIMES COO
|
|
100%
|
|
|
225%
|
|
100%
|
|
150%
|
|
100%
|
|
100%
|
|
100%
|
|
|
100%
|
|
150%
|
|
130%
|
|
100%
|
|
100%
|
|
100%
|
|
CAMPBELL CFO
|
100%
|
|
|
159%
|
|
96%
|
|
143%
|
|
100%
|
|
96%
|
|
99%
|
|
|
100%
|
|
150%
|
|
130%
|
|
100%
|
|
100%
|
|
100%
|
|
DELPRIORE GC
|
100%
|
|
|
159%
|
|
100%
|
|
144%
|
|
100%
|
|
100%
|
|
100%
|
|
|
100%
|
|
150%
|
|
130%
|
|
100%
|
|
100%
|
|
100%
|
|
|
(1)
|
Individual functional goals under the 2019 AIP are capped at the Target level.
|
|
|
(2)
|
The compensation in these columns was awarded in shares of restricted stock that remain at risk of forfeiture until vested, dependent upon the NEO’s continued employment in
good standing with MAA through each vest date.
|
OTHER DIRECT COMPENSATION REALIZED IN 2019
2017 LTIP Three Year TSR
The performance period for the 2017 LTIP Relative Three Year TSR metric concluded on
December 31, 2019. The Compensation Committee reviewed the results of MAA’s performance as compared to the SNL US REIT Multifamily Index at their March 2020 meeting and determined MAA’s three-year TSR as calculated under the 2017 LTIP of 15.54%
outperformed the three-year SNL US REIT Multifamily Index of 12.77% (calculated in the same manner) by 276 basis points, resulting in a performance between the Target and Maximum levels under the plan.
|
2017 LTIP
|
|
Percent
|
|
Relative Three-Year TSR
|
|
of Metric
|
|
Performance Range
|
|
Earned
|
|
|
|
|
|
|
|
+ 400 bps
|
|
Maximum
|
|
100%
|
|
+ 276 basis points
|
|
ACTUAL
|
|
89.19%
|
|
Index
|
|
Target
|
|
65%
|
|
- 300 bps
|
|
Threshold
|
|
25%
|
As a result of this performance, the Compensation Committee approved the below awards in compliance with the 2017 LTIP representing the percent of
Target and Maximum opportunities as indicated below.
|
|
Shares of
|
|
Percent of
|
|
|
Restricted
|
|
Opportunity Earned
|
|
|
Stock Issued (1)
|
|
Target
|
|
Maximum
|
|
BOLTON CEO
|
14,504
|
|
137%
|
|
89%
|
|
GRIMES COO
|
7,227
|
|
137%
|
|
89%
|
|
CAMPBELL CFO
|
7,050
|
|
137%
|
|
89%
|
|
DELPRIORE GC
|
5,892
|
|
137%
|
|
89%
|
|
|
(1)
|
Earned performance-based shares of restricted stock immediately vested upon issuance on April 1, 2020.
|
No further awards are eligible to be made under the 2017 LTIP.
|
|
2020 PROXY STATEMENT
|
50
|
OTHER COMPENSATION ELEMENTS
|
|
In addition to their direct compensation, our executives also participate in other programs, which are generally available to all of our associates,
depending on specific eligibility requirements related to each.
|
BENEFITS
In general, benefits are designed to provide a safety net of protection against the financial catastrophes that can result from illness,
disability or death, and to provide a reasonable level of retirement income based on years of service with us.
EMPLOYMENT AGREEMENT
Mr. Bolton is our only NEO with an employment agreement. The material terms of his employment
agreement and amounts payable under that agreement are described in Employment Agreements and Potential Payments Upon Termination or Change in Control in the Executive Compensation Tables section of this Proxy Statement.
CHANGE IN CONTROL AGREEMENTS
Messrs. Grimes, Campbell and DelPriore have change in control agreements. These change in control agreements are described in Employment
Agreements and Potential Payments Upon Termination or Change in Control in the Executive Compensation Tables section of this Proxy Statement.
401(K) PLAN
During 2019, our CEO and other NEOs were eligible to participate in our MAA 401(K) Savings
Plan, or 401(K) Plan. The 401(K) Plan is a qualified retirement plan made available to all of our eligible associates that allows participants to make pre-tax elective deferral contributions as a percentage of their compensation as well as catch-up
contributions in any year in which the participant will be at least 50 by the end of the year. For 2019, MAA made matching contributions under the 401(K) Plan of 100% of a participant’s contribution on the first 3% of their compensation and 50% of
a participant’s contribution on the next 2% of their compensation. Participants may defer up to 75% of their compensation under the 401(K) Plan until they reach the limitation imposed by Section 401(a) of the Internal Revenue Code of 1986, as
amended, or the Code, for the given year.
Under the terms of the 401(K) Plan, benefits generally start on or after the date the
participant reaches the age of 65. Under the law, participants must begin receiving benefits by April 1st following the later of the calendar year in which a
participant reaches the age of 70 ½, or stops working for MAA.
See page 57 for more information.
EXECUTIVE DEFERRED COMPENSATION PLAN
During 2019, our CEO and other NEOs were eligible to participate in the Executive Deferred
Compensation Plan, which is a supplemental nonqualified deferred compensation plan made available to all executives to enable them to accumulate additional retirement benefits beyond the limitations on participant contributions placed on the 401(K)
Plan. MAA, at its discretion, may make matching contributions in accordance with the matching contribution formula in the 401(K) Plan. As such, in 2019, MAA made matching contributions under the Executive Deferred Compensation Plan of 100% of a
participant’s contribution on the first 3% of their compensation and 50% of a participant’s contribution on the next 2% of their compensation. The matching contributions were made only on compensation that was in excess of the limitation imposed by
Section 401(a) of the Code on the 401(K) Plan that would have been eligible for the match. Participants may defer up to 50% of their compensation and 90% of their annual bonus.
In accordance with the Executive Deferred Compensation Plan, distributions for balances prior
to 2016 are made in five equal annual installments beginning on the first day following the sixth full month occurring after the earliest of death, disability, or separation from service. Balances from 2016 and forward will be distributed in
compliance with the participant’s previous elections for the specific contributions in the form of either a lump-sum payment or substantially equal annual installments amortized over a period not to exceed ten years beginning on the later of
January 1st or six months and a day after the participant’s separation from service. Notwithstanding the foregoing, in the case of a participant who becomes entitled
to receive benefits on account of disability, the balances from 2016 and forward will be paid in a lump sum on or after the 15th of the first month following
determination of disability.
Unlike contributions made in the 401(K) Plan, the deferred compensation amounts contributed
by Messrs. Bolton, Grimes, Campbell and DelPriore, and any resultant matches by MAA, are considered general assets of the company and are subject to claims of MAA’s creditors. In 2016, MAA transferred the assets of the Executive Deferred
Compensation Plan to an irrevocable rabbi trust to offer additional security to the participants. While assets in the rabbi trust are still subject to creditors’ claims in a corporate bankruptcy, they cannot be accessed by MAA for any purpose other
than to pay participant benefits under the Executive Deferred Compensation Plan.
See page 58 for more information.
|
|
2020 PROXY STATEMENT
|
51
|
CONCLUSION
The Compensation Committee believes that our executive leadership is a key element to our success and that the compensation package offered to the NEOs is a key
element in attracting, retaining and motivating the appropriate personnel.
The Compensation Committee believes it has historically maintained compensation for our executive officers at levels that are reflective of the talent and success of
the individuals being compensated, and with the inclusion of compensation directly tied to performance, the Compensation Committee believes executive compensation is sufficiently comparable to our industry peers to allow us to retain our key personnel
at levels which are appropriate and sustainable for MAA.
The Compensation Committee will continue to develop, analyze and review its methods for aligning executive management’s long-term compensation with the benefits
generated for shareholders. The Compensation Committee believes the idea of creating ownership in MAA helps align management’s interests with the interests of shareholders. The Compensation Committee has no pre-determined timeline for implementing new
or ongoing long-term incentive plans. New plans are reviewed, discussed and implemented as the Compensation Committee feels it is necessary or appropriate as a measure to incent, retain and reward our executive management.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of MAA reviewed and discussed with management the information contained in the Compensation Discussion and Analysis
section of this Proxy Statement and recommended to the Board that the Compensation Discussion and Analysis section be included in this Proxy Statement and our Annual Report on Form 10-K.
|
|
COMPENSATION COMMITTEE:
Philip W. Norwood, CHAIRMAN
Toni Jennings
Monica McGurk
Thomas H. Lowder
Claude B. Nielsen
|
|
|
2020 PROXY STATEMENT
|
52
|
EXECUTIVE COMPENSATION TABLES
SUMMARY COMPENSATION TABLE
The following table sets forth information regarding compensation earned by our NEOs. As required by Item 402 of Regulation S-K under the Exchange Act, the values for
stock awards represent full grant date fair value in accordance with FASB ASC Topic 718 and appear in aggregate in the year of the grant. These amounts represent the total expense that we expected to recognize over time related to the award as of the
day of grant; however, due to performance and continued employment requirements, as well as the length of certain performance periods and vesting schedules, the amounts may or may not represent the value of stock realized, or the timing of stock
acquired by the NEOs. For information on actual shares issued to NEOs related to the fair value amounts provided in the below table, please see the footnotes to this table and the Outstanding Equity Awards table found later in this Proxy
Statement.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Plan
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
Bonus
|
|
|
Awards
|
|
|
Compensation
|
|
|
Compensation
|
|
|
|
|
|
Name and
|
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Total
|
|
|
Principal Position
|
|
Year
|
|
|
(1)
|
|
|
(2)
|
|
|
(3)
|
|
|
(4)
|
|
|
(5)
|
|
|
($)
|
|
|
H. Eric Bolton, Jr.
|
|
2019
|
|
|
$
|
812,500
|
|
|
$
|
500
|
|
|
$
|
2,661,372
|
|
|
$
|
2,157,100
|
|
|
$
|
104,426
|
|
|
$
|
5,735,898
|
|
|
CEO
|
|
2018
|
|
|
$
|
775,000
|
|
|
$
|
500
|
|
|
$
|
2,182,245
|
|
|
$
|
1,603,088
|
|
|
$
|
99,319
|
|
|
$
|
4,660,152
|
|
|
|
|
2017
|
|
|
$
|
704,000
|
|
|
$
|
500
|
|
|
$
|
4,196,966
|
|
|
$
|
1,536,480
|
|
|
$
|
88,584
|
|
|
$
|
6,526,530
|
|
|
Thomas L. Grimes, Jr.
|
|
2019
|
|
|
$
|
515,234
|
|
|
$
|
500
|
|
|
$
|
1,237,007
|
|
|
$
|
1,083,600
|
|
|
$
|
54,860
|
|
|
$
|
2,891,201
|
|
|
EVP and COO
|
|
2018
|
|
|
$
|
496,100
|
|
|
$
|
500
|
|
|
$
|
1,086,509
|
|
|
$
|
769,493
|
|
|
$
|
48,497
|
|
|
$
|
2,401,099
|
|
|
|
|
2017
|
|
|
$
|
451,000
|
|
|
$
|
500
|
|
|
$
|
1,715,333
|
|
|
$
|
640,591
|
|
|
$
|
53,815
|
|
|
$
|
2,861,239
|
|
|
Albert M. Campbell, III
|
|
2019
|
|
|
$
|
502,750
|
|
|
$
|
500
|
|
|
$
|
1,207,041
|
|
|
$
|
900,006
|
|
|
$
|
48,514
|
|
|
$
|
2,658,811
|
|
|
EVP and CFO
|
|
2018
|
|
|
$
|
484,000
|
|
|
$
|
1,871
|
|
|
$
|
1,060,008
|
|
|
$
|
619,314
|
|
|
$
|
45,751
|
|
|
$
|
2,210,944
|
|
|
|
|
2017
|
|
|
$
|
440,000
|
|
|
$
|
500
|
|
|
$
|
1,893,496
|
|
|
$
|
580,635
|
|
|
$
|
44,765
|
|
|
$
|
2,959,396
|
|
|
Robert J. DelPriore
|
|
2019
|
|
|
$
|
490,265
|
|
|
$
|
400
|
|
|
$
|
1,177,075
|
|
|
$
|
883,801
|
|
|
$
|
46,573
|
|
|
$
|
2,598,114
|
|
|
EVP and GC
|
|
2018
|
|
|
$
|
471,900
|
|
|
$
|
400
|
|
|
$
|
885,851
|
|
|
$
|
598,523
|
|
|
$
|
44,125
|
|
|
$
|
2,000,799
|
|
|
|
|
2017
|
|
|
$
|
429,000
|
|
|
$
|
500
|
|
|
$
|
1,705,018
|
|
|
$
|
574,163
|
|
|
$
|
42,700
|
|
|
$
|
2,751,381
|
|
|
|
(1)
|
Represents base salary paid during the calendar year indicated. These values may differ slightly from the base salary amounts set by the Compensation Committee of the Board as a
result of the actual number of pay periods which fall in any given calendar year.
|
|
|
(2)
|
Reflects an annual holiday bonus paid to all associates based on length of service. Mr. Campbell’s 2018 value also reflects a $1,371 special length of service bonus which is
awarded to all associates upon twenty years of service to MAA.
|
|
|
(3)
|
Represents the aggregate grant date fair value based upon probable outcome in accordance with FASB ASC Topic 718 in the year of the grant. For a complete description of the
assumptions made in determining the FASB ASC Topic 718 valuation, please refer to Stock Based Compensation in our audited financial statements in our Annual Report on Form 10-K for the indicated fiscal year. Additional details for each
grant can be found in the table to the right. For purposes of the table, shares issued in 2020 are classified as Shares Earned as of December 31, 2019 as long as the performance period for the resultant share issuance was completed by December
31, 2019. In addition, the Maximum Opportunity Value to Participant amounts provided in the table represent the total cap amount set in the plan by the Compensation Committee and will not necessarily tie to the FASB ASC Topic 718 amount reflected
in the Summary Compensation Table.
|
|
Year
|
|
|
|
|
|
|
|
Shares
|
|
Maximum
|
|
|
|
|
Maximum Opportunity
|
|
Earned
|
|
Future
|
|
Plan
|
|
|
|
Number of
|
|
as of
|
|
Share
|
|
|
Name
|
|
In Dollars
|
|
Shares
|
|
12/31/2019
|
|
Opportunity
|
|
2019
|
2019 LTIP
|
|
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 4,273,500
|
|
44,987
|
|
20,908
|
|
24,079
|
|
|
Grimes
|
|
$ 1,986,600
|
|
20,912
|
|
9,722
|
|
11,190
|
|
|
Campbell
|
$ 1,938,475
|
|
20,406
|
|
9,487
|
|
10,919
|
|
|
DelPriore
|
$ 1,890,350
|
|
19,899
|
|
9,251
|
|
10,648
|
|
2018
|
2018 LTIP
|
|
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 3,487,500
|
|
36,705
|
|
16,336
|
|
18,353
|
|
|
Grimes
|
|
$ 1,736,350
|
|
18,274
|
|
8,133
|
|
9,137
|
|
|
Campbell
|
$ 1,694,000
|
|
17,827
|
|
7,934
|
|
8,914
|
|
|
DelPriore
|
$ 1,415,700
|
|
14,900
|
|
6,631
|
|
7,450
|
|
2017
|
2017 LTIP
|
|
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 3,168,000
|
|
32,524
|
|
30,766
|
|
-
|
|
|
Grimes
|
|
$ 1,578,500
|
|
16,205
|
|
15,329
|
|
-
|
|
|
Campbell
|
$ 1,540,000
|
|
15,810
|
|
14,955
|
|
-
|
|
|
DelPriore
|
$ 1,287,000
|
|
13,212
|
|
12,498
|
|
-
|
|
Merger Plan
|
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 2,112,000
|
|
20,593
|
|
18,019
|
|
-
|
|
|
Grimes
|
|
$ 676,500
|
|
6,594
|
|
5,770
|
|
-
|
|
|
Campbell
|
$ 880,000
|
|
8,578
|
|
7,506
|
|
-
|
|
|
DelPriore
|
$ 858,000
|
|
8,363
|
|
7,318
|
|
-
|
|
|
2020 PROXY STATEMENT
|
53
|
|
|
(4)
|
Represents cash bonuses paid under the AIPs.
|
|
|
(5)
|
Represents matching contributions made by MAA to the Executive Deferred Compensation Plan and 401(K) Plan for calendar year 2019, regardless to which plan year the match was
actually credited by the respective administrator, as indicated in the table to the right.
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
Comp Plan
|
|
401(K) Plan
|
|
Total
|
|
2019
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 93,226
|
|
$ 11,200
|
|
$ 104,426
|
|
|
Grimes
|
|
$ 43,660
|
|
$ 11,200
|
|
$ 54,860
|
|
|
Campbell
|
$ 37,314
|
|
$ 11,200
|
|
$ 48,514
|
|
|
DelPriore
|
$ 35,373
|
|
$ 11,200
|
|
$ 46,573
|
|
2018
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 88,319
|
|
$ 11,000
|
|
$ 99,319
|
|
|
Grimes
|
|
$ 37,497
|
|
$ 11,000
|
|
$ 48,497
|
|
|
Campbell
|
$ 34,751
|
|
$ 11,000
|
|
$ 45,751
|
|
|
DelPriore
|
$ 33,125
|
|
$ 11,000
|
|
$ 44,125
|
|
2017
|
|
|
|
|
|
|
|
|
Bolton
|
|
$ 77,784
|
|
$ 10,800
|
|
$ 88,584
|
|
|
Grimes
|
|
$ 43,015
|
|
$ 10,800
|
|
$ 53,815
|
|
|
Campbell
|
$ 33,965
|
|
$ 10,800
|
|
$ 44,765
|
|
|
DelPriore
|
$ 31,900
|
|
$ 10,800
|
|
$ 42,700
|
GRANTS OF PLAN BASED AWARDS
The following table summarizes grants of plan-based awards made to our NEOs during 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
Estimated Future Payouts
|
|
Grant Date
|
|
|
|
|
|
|
|
Under Non-Equity Incentive
|
|
Under Equity Incentive
|
|
Fair Value of
|
|
|
|
|
|
|
|
Plan Awards (1)
|
|
Plan Awards (2)
|
|
Stock Awards
|
|
|
|
Grant
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
(3)
|
|
Name
|
|
Type
|
|
Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
($)
|
|
Bolton
|
|
AIP
|
|
12/4/2018
|
|
$356,125
|
|
$ 1,424,500
|
|
$ 2,157,100
|
|
|
|
|
|
|
|
|
|
CEO
|
|
LTIP
|
|
01/9/2019
|
|
|
|
|
|
|
|
4,019
|
|
16,067
|
|
24,079
|
|
$ 2,661,372
|
|
Grimes
|
|
AIP
|
|
12/4/2018
|
|
$505,680
|
|
$ 722,400
|
|
$ 1,083,600
|
|
|
|
|
|
|
|
|
|
COO
|
|
LTIP
|
|
01/9/2019
|
|
|
|
|
|
|
|
1,868
|
|
7,469
|
|
11,190
|
|
$ 1,237,007
|
|
Campbell
|
AIP
|
|
12/4/2018
|
|
$275,364
|
|
$ 629,375
|
|
$ 906,300
|
|
|
|
|
|
|
|
|
|
CFO
|
|
LTIP
|
|
01/9/2019
|
|
|
|
|
|
|
|
1,823
|
|
7,288
|
|
10,919
|
|
$ 1,207,041
|
|
DelPriore
|
AIP
|
|
12/4/2018
|
|
$268,528
|
|
$ 613,750
|
|
$ 883,800
|
|
|
|
|
|
|
|
|
|
GC
|
|
LTIP
|
|
01/9/2019
|
|
|
|
|
|
|
|
1,778
|
|
7,107
|
|
10,648
|
|
$ 1,177,075
|
|
|
(1)
|
On December 4, 2018, the Compensation Committee, and in regards to Mr. Bolton’s participation, the Board, approved the 2019 AIP for executive management. The actual awards
earned under the 2019 AIP by Messrs. Bolton, Grimes, Campbell and DelPriore were $2,157,100, $1,083,600, $900,006 and $883,801, respectively.
|
|
|
(2)
|
The Compensation Committee, and in regards to Mr. Bolton’s participation, the Board, approved the 2019 LTIP with a grant date of January 9, 2019. The 2019 LTIP consists of three
award opportunities as outlined below.
|
|
|
(i)
|
Shares of restricted stock issued on the grant date (6,426, 2,987, 2,915 and 2,842 for Messrs. Bolton, Grimes, Campbell and DelPriore, respectively) remain at risk of forfeiture
until vested and will vest equally over three years on the anniversary of the issuance date dependent upon continued employment in good standing through each vest date. The shares of restricted stock will receive dividend payments equivalent to
dividend payments made to our common stock holders until they vest or are forfeited.
|
|
|
(ii)
|
Shares of restricted stock (14,482, 6,735, 6,572 and 6,409 for Messrs. Bolton, Grimes, Campbell and DelPriore, respectively) representing earned performance shares based on our
FAD performance during 2019 were issued on April 1, 2020 and remain at risk of forfeiture until vested and will vest equally over two years on the anniversary of the issue date dependent upon continued employment in good standing through each
vest date. The shares of restricted stock will receive dividend payments equivalent to dividend payments made to our common stock holders until they vest or are forfeited. The performance shares did not receive dividend payments or dividend
equivalents during the performance period.
|
|
|
(iii)
|
Shares of restricted stock representing performance shares based on our three year TSR performance from 2019 through 2021 as compared to the performance of the SNL US REIT
Multifamily Index over the same period, will be issued, to the extent earned, on April 1, 2022. Any shares of restricted stock issued will immediately vest upon issuance. The performance shares will not receive dividend payments or dividend
equivalents during the performance period.
|
|
|
(3)
|
These amounts are also reflected in the Summary Compensation Table under “Stock Awards”.
|
|
|
2020 PROXY STATEMENT
|
54
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
The following table summarizes the number of unvested outstanding equity awards held by each of our NEOs as of December 31, 2019, including awards earned as of
December 31, 2019 but not issued until 2020, and the market value of these awards as of December 31, 2019, based on the closing stock price of $131.86 on December 31, 2019, the last market day of the year. These awards are often related to long-term
incentive plans with performance periods in prior years. Frequently, the shares were also issued in prior years and are subject to various vesting periods through which the shares remain forfeitable, contingent upon continued employment in good
standing through each respective vest date. Please refer to the footnotes of the table for further details. None of our NEOs hold any stock options.
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
|
|
|
Number of
|
|
|
Market Value
|
|
|
|
|
|
Shares or Units
|
|
|
of Shares or
|
|
|
|
|
|
Shares or Units
|
|
|
of Shares or
|
|
|
|
|
|
of Stock That
|
|
|
Units of Stock
|
|
|
|
|
|
of Stock That
|
|
|
Units of Stock
|
|
|
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
|
|
Have Not
|
|
|
That Have
|
|
|
|
Grant
|
|
Vested
|
|
|
Not Vested
|
|
|
|
Grant
|
|
Vested
|
|
|
Not Vested
|
|
Name
|
|
Date
|
|
(#)
|
|
|
($)
|
|
Name
|
|
Date
|
|
(#)
|
|
|
($)
|
|
Bolton
|
|
1/9/2015
|
|
1,407
|
(1)
|
|
$ 185,527
|
|
Campbell
|
|
1/9/2015
|
|
547
|
(1)
|
|
$ 72,127
|
|
CEO
|
|
3/24/2015
|
|
2,044
|
(2)
|
|
$ 269,522
|
|
CFO
|
|
3/24/2015
|
|
1,406
|
(2)
|
|
$ 185,395
|
|
|
|
1/8/2016
|
|
2,270
|
(3)
|
|
$ 299,322
|
|
|
|
1/8/2016
|
|
1,064
|
(3)
|
|
$ 140,299
|
|
|
|
1/9/2017
|
|
3,903
|
(4)
|
|
$ 514,650
|
|
|
|
1/9/2017
|
|
1,898
|
(4)
|
|
$ 250,270
|
|
|
|
1/9/2017
|
|
4,879
|
(5)
|
|
$ 643,345
|
|
|
|
1/9/2017
|
|
2,372
|
(5)
|
|
$ 312,772
|
|
|
|
1/9/2017
|
|
14,504
|
(6)
|
|
$ 1,912,497
|
|
|
|
1/9/2017
|
|
7,050
|
(6)
|
|
$ 929,613
|
|
|
|
4/4/2017
|
|
18,019
|
(7)
|
|
$ 2,375,985
|
|
|
|
4/4/2017
|
|
7,506
|
(7)
|
|
$ 989,741
|
|
|
|
1/9/2018
|
|
5,873
|
(8)
|
|
$ 774,414
|
|
|
|
1/9/2018
|
|
2,852
|
(8)
|
|
$ 376,065
|
|
|
|
1/9/2018
|
|
8,995
|
(9)
|
|
$ 1,186,081
|
|
|
|
1/9/2018
|
|
4,369
|
(9)
|
|
$ 576,096
|
|
|
|
1/9/2019
|
|
6,426
|
(10)
|
|
$ 847,332
|
|
|
|
1/9/2019
|
|
2,915
|
(10)
|
|
$ 384,372
|
|
|
|
1/9/2019
|
|
14,482
|
(11)
|
|
$ 1,909,597
|
|
|
|
1/9/2019
|
|
6,572
|
(11)
|
|
$ 866,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grimes
|
1/9/2015
|
|
563
|
(1)
|
|
$ 74,237
|
|
DelPriore
|
|
1/9/2015
|
|
521
|
(1)
|
|
$ 68,699
|
|
COO
|
|
3/24/2015
|
|
1,406
|
(2)
|
|
$ 185,395
|
|
GC
|
|
1/8/2016
|
|
865
|
(3)
|
|
$ 114,059
|
|
|
|
1/8/2016
|
|
1,091
|
(3)
|
|
$ 143,859
|
|
|
|
1/9/2017
|
|
1,586
|
(4)
|
|
$ 209,130
|
|
|
|
1/9/2017
|
|
1,945
|
(4)
|
|
$ 256,468
|
|
|
|
1/9/2017
|
|
1,982
|
(5)
|
|
$ 261,347
|
|
|
|
1/9/2017
|
|
2,431
|
(5)
|
|
$ 320,552
|
|
|
|
1/9/2017
|
|
5,892
|
(6)
|
|
$ 776,919
|
|
|
|
1/9/2017
|
|
7,227
|
(6)
|
|
$ 952,952
|
|
|
|
4/4/2017
|
|
7,318
|
(7)
|
|
$ 964,951
|
|
|
|
4/4/2017
|
|
5,770
|
(7)
|
|
$ 760,832
|
|
|
|
1/9/2018
|
|
2,384
|
(8)
|
|
$ 314,354
|
|
|
|
1/9/2018
|
|
2,924
|
(8)
|
|
$ 385,559
|
|
|
|
1/9/2018
|
|
3,651
|
(9)
|
|
$ 481,421
|
|
|
|
1/9/2018
|
|
4,478
|
(9)
|
|
$ 590,469
|
|
|
|
1/9/2019
|
|
2,842
|
(10)
|
|
$ 374,746
|
|
|
|
1/9/2019
|
|
2,987
|
(10)
|
|
$ 393,866
|
|
|
|
1/9/2019
|
|
6,409
|
(11)
|
|
$ 845,091
|
|
|
|
1/9/2019
|
|
6,735
|
(11)
|
|
$ 888,077
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the remaining unvested restricted service shares issued on January 9, 2015 under the 2015 LTIP, which vest equally over five years on the
anniversary of the issuance date.
|
|
|
(2)
|
Represents the unvested restricted shares issued on March 24, 2015 in consideration for the removal of tax gross-up provisions for excess parachute payments
and in Mr. Bolton’s case, to remove the modified, single-trigger termination right in his legacy employment agreement, which vested 100% on March 24, 2020.
|
|
|
(3)
|
Represents the remaining unvested restricted service shares issued on January 8, 2016 under the 2016 LTIP, which vest equally over five years on the
anniversary of the issuance date.
|
|
|
(4)
|
Represents the remaining unvested restricted service shares issued on January 9, 2017 under the 2017 LTIP, which vest equally over five years on the
anniversary of the issuance date.
|
|
|
(5)
|
Represents the remaining unvested restricted shares issued on April 2, 2018 under the 2017 LTIP related to the performance of the MAA financial metric, which
vested equally over two years on the anniversary of the issuance date.
|
|
|
(6)
|
Represents restricted shares which were issued on April 1, 2020 under the 2017 LTIP related to the performance under the TSR metric, which immediately vested
upon issuance.
|
|
|
(7)
|
Represents the remaining unvested restricted shares which were issued on April 1, 2019 under the Merger Plan related to the performance metrics, which vest
equally over two years on the anniversary of the issuance date.
|
|
|
(8)
|
Represents the remaining unvested restricted service shares issued on January 9, 2018 under the 2018 LTIP, which vest equally over five years on the
anniversary of the issuance date.
|
|
|
(9)
|
Represents the remaining unvested restricted shares which were issued on April 2, 2019 under the 2018 LTIP related to the performance of the MAA financial
metric, which vest equally over two years on the anniversary of the issuance date.
|
|
|
(10)
|
Represents the remaining unvested restricted service shares issued on January 9, 2019 under the 2019 LTIP, which vest equally over three years on the
anniversary of the issuance date.
|
|
|
(11)
|
Represents the restricted shares issued on April 1, 2020 under the 2019 LTIP related to the performance of the MAA financial metric, which vest equally over
two years on the anniversary of the issuance date.
|
|
|
2020 PROXY STATEMENT
|
55
|
OPTION EXERCISE AND STOCK VESTED
The following table summarizes the number of shares acquired upon the vesting of stock awards and the value realized by our NEOs as a result of such vesting during
2019. None of our NEOs hold any stock options. Accordingly, no options were exercised in 2019 by our NEOs.
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
Acquired on
|
|
Value Realized
|
|
Name
|
|
Vesting (#) (1)
|
|
on Vesting ($) (2)
|
|
Bolton CEO
|
|
34,295
|
|
$ 3,598,384
|
|
Grimes COO
|
|
14,677
|
|
$ 1,544,696
|
|
Campbell CFO
|
15,126
|
|
$ 1,590,503
|
|
DelPriore GC
|
|
11,893
|
|
$ 1,250,510
|
|
|
(1)
|
The shares represented in this column vested from various plans as indicated in the below table.
|
|
|
|
|
|
ASC 718
|
|
Stock
|
|
Total
|
|
Shares
|
|
Remaining
|
|
|
|
|
|
|
|
Grant
|
|
Issue
|
|
Shares
|
|
Vested
|
|
Unvested
|
|
|
|
Name
|
|
Plan
|
|
Date
|
|
Date
|
|
Granted
|
|
in 2019
|
|
Shares
|
|
Vesting Schedule
|
|
Bolton
|
|
Colonial Merger Plan
|
1/13/2014
|
|
1/13/2014
|
|
8,550
|
|
1,710
|
|
-
|
|
20% annually from 1/13/2015
|
|
Grimes
|
|
Colonial Merger Plan
|
1/13/2014
|
|
1/13/2014
|
|
2,052
|
|
410
|
|
-
|
|
20% annually from 1/13/2015
|
|
Campbell
|
Colonial Merger Plan
|
1/13/2014
|
|
1/13/2014
|
|
2,993
|
|
598
|
|
-
|
|
20% annually from 1/13/2015
|
|
DelPriore
|
Colonial Merger Plan
|
1/13/2014
|
|
1/13/2014
|
|
1,710
|
|
342
|
|
-
|
|
20% annually from 1/13/2015
|
|
Bolton
|
|
Colonial Merger Plan
|
1/13/2014
|
|
3/10/2016
|
|
15,878
|
|
5,295
|
|
-
|
|
33% annually from 3/10/2017
|
|
Grimes
|
|
Colonial Merger Plan
|
1/13/2014
|
|
3/10/2016
|
|
3,813
|
|
1,273
|
|
-
|
|
33% annually from 3/10/2017
|
|
Campbell
|
Colonial Merger Plan
|
1/13/2014
|
|
3/10/2016
|
|
5,558
|
|
1,855
|
|
-
|
|
33% annually from 3/10/2017
|
|
DelPriore
|
Colonial Merger Plan
|
1/13/2014
|
|
3/10/2016
|
|
3,178
|
|
1,061
|
|
-
|
|
33% annually from 3/10/2017
|
|
Bolton
|
|
2014 LTIP
|
|
1/13/2014
|
|
1/13/2014
|
|
8,794
|
|
1,758
|
|
-
|
|
20% annually from 1/13/2015
|
|
Grimes
|
|
2014 LTIP
|
|
1/13/2014
|
|
1/13/2014
|
|
3,518
|
|
703
|
|
-
|
|
20% annually from 1/13/2015
|
|
Campbell
|
2014 LTIP
|
|
1/13/2014
|
|
1/13/2014
|
|
3,420
|
|
684
|
|
-
|
|
20% annually from 1/13/2015
|
|
DelPriore
|
2014 LTIP
|
|
1/13/2014
|
|
1/13/2014
|
|
2,932
|
|
586
|
|
-
|
|
20% annually from 1/13/2015
|
|
Bolton
|
|
2015 LTIP
|
|
1/9/2015
|
|
1/9/2015
|
|
7,031
|
|
1,406
|
|
1,407
|
|
20% annually from 1/9/2016
|
|
Grimes
|
|
2015 LTIP
|
|
1/9/2015
|
|
1/9/2015
|
|
2,813
|
|
563
|
|
563
|
|
20% annually from 1/9/2016
|
|
Campbell
|
2015 LTIP
|
|
1/9/2015
|
|
1/9/2015
|
|
2,735
|
|
547
|
|
547
|
|
20% annually from 1/9/2016
|
|
DelPriore
|
2015 LTIP
|
|
1/9/2015
|
|
1/9/2015
|
|
2,605
|
|
521
|
|
521
|
|
20% annually from 1/9/2016
|
|
Bolton
|
|
2016 LTIP
|
|
1/8/2016
|
|
1/8/2016
|
|
5,673
|
|
1,134
|
|
2,270
|
|
20% annually from 1/8/2017
|
|
Grimes
|
|
2016 LTIP
|
|
1/8/2016
|
|
1/8/2016
|
|
2,726
|
|
545
|
|
1,091
|
|
20% annually from 1/8/2017
|
|
Campbell
|
2016 LTIP
|
|
1/8/2016
|
|
1/8/2016
|
|
2,659
|
|
532
|
|
1,064
|
|
20% annually from 1/8/2017
|
|
DelPriore
|
2016 LTIP
|
|
1/8/2016
|
|
1/8/2016
|
|
2,161
|
|
432
|
|
865
|
|
20% annually from 1/8/2017
|
|
Bolton
|
|
2016 LTIP
|
|
1/8/2016
|
|
3/24/2017
|
|
8,509
|
|
4,255
|
|
-
|
|
50% annually from 3/24/2018
|
|
Grimes
|
|
2016 LTIP
|
|
1/8/2016
|
|
3/24/2017
|
|
4,089
|
|
2,045
|
|
-
|
|
50% annually from 3/24/2018
|
|
Campbell
|
2016 LTIP
|
|
1/8/2016
|
|
3/24/2017
|
|
3,989
|
|
1,995
|
|
-
|
|
50% annually from 3/24/2018
|
|
DelPriore
|
2016 LTIP
|
|
1/8/2016
|
|
3/24/2017
|
|
3,241
|
|
1,621
|
|
-
|
|
50% annually from 3/24/2018
|
|
Bolton
|
|
2016 LTIP
|
|
1/8/2016
|
|
3/25/2019
|
|
11,090
|
|
11,090
|
|
-
|
|
100% upon issuance
|
|
Grimes
|
|
2016 LTIP
|
|
1/8/2016
|
|
3/25/2019
|
|
5,329
|
|
5,329
|
|
-
|
|
100% upon issuance
|
|
Campbell
|
2016 LTIP
|
|
1/8/2016
|
|
3/25/2019
|
|
5,199
|
|
5,199
|
|
-
|
|
100% upon issuance
|
|
DelPriore
|
2016 LTIP
|
|
1/8/2016
|
|
3/25/2019
|
|
4,224
|
|
4,224
|
|
-
|
|
100% upon issuance
|
|
Bolton
|
|
2017 LTIP
|
|
1/9/2017
|
|
1/9/2017
|
|
6,505
|
|
1,301
|
|
3,903
|
|
20% annually from 1/9/2018
|
|
Grimes
|
|
2017 LTIP
|
|
1/9/2017
|
|
1/9/2017
|
|
3,241
|
|
648
|
|
1,945
|
|
20% annually from 1/9/2018
|
|
Campbell
|
2017 LTIP
|
|
1/9/2017
|
|
1/9/2017
|
|
3,162
|
|
632
|
|
1,898
|
|
20% annually from 1/9/2018
|
|
DelPriore
|
2017 LTIP
|
|
1/9/2017
|
|
1/9/2017
|
|
2,642
|
|
528
|
|
1,586
|
|
20% annually from 1/9/2018
|
|
Bolton
|
|
2017 LTIP
|
|
1/9/2017
|
|
4/2/2018
|
|
9,757
|
|
4,878
|
|
4,879
|
|
50% annually from 4/2/2019
|
|
Grimes
|
|
2017 LTIP
|
|
1/9/2017
|
|
4/2/2018
|
|
4,861
|
|
2,430
|
|
2,431
|
|
50% annually from 4/2/2019
|
|
Campbell
|
2017 LTIP
|
|
1/9/2017
|
|
4/2/2018
|
|
4,743
|
|
2,371
|
|
2,372
|
|
50% annually from 4/2/2019
|
|
DelPriore
|
2017 LTIP
|
|
1/9/2017
|
|
4/2/2018
|
|
3,964
|
|
1,982
|
|
1,982
|
|
50% annually from 4/2/2019
|
|
Bolton
|
|
2018 LTIP
|
|
1/9/2018
|
|
1/9/2018
|
|
7,341
|
|
1,468
|
|
5,873
|
|
20% annually from 1/9/2019
|
|
Grimes
|
|
2018 LTIP
|
|
1/9/2018
|
|
1/9/2018
|
|
3,655
|
|
731
|
|
2,924
|
|
20% annually from 1/9/2019
|
|
Campbell
|
2018 LTIP
|
|
1/9/2018
|
|
1/9/2018
|
|
3,565
|
|
713
|
|
2,852
|
|
20% annually from 1/9/2019
|
|
DelPriore
|
2018 LTIP
|
|
1/9/2018
|
|
1/9/2018
|
|
2,980
|
|
596
|
|
2,384
|
|
20% annually from 1/9/2019
|
|
|
(2)
|
Represents the number of shares vesting multiplied by the respective closing stock price on the vesting date.
|
|
|
2020 PROXY STATEMENT
|
56
|
401(K) SAVINGS PLAN
We adopted a 401(K) Plan under the terms of which participants may elect to defer a percentage of their compensation and we may match a portion of their deferral.
Under the terms of the 401(K) Plan, benefits generally start on or after the date the participant reaches the age of 65. Under applicable law, participants must begin receiving benefits by April 1st following the later of the calendar year in which a participant reaches the age of 70 ½, or stops working for MAA.
The mutual funds available for investment in the 401(K) Plan for 2019, as well as those fund’s respective rates of return for 2019, are listed in the table to the
right.
|
|
|
|
|
2019
|
|
|
|
|
|
Rate of
|
|
Name of Fund
|
|
Ticker
|
|
Return
|
|
American Funds 2010 Target Date Retirement Fund Class R6
|
|
RFTTX
|
|
13.88%
|
|
American Funds 2015 Target Date Retirement Fund Class R6
|
|
RFJTX
|
|
14.94%
|
|
American Funds 2020 Target Date Retirement Fund Class R6
|
|
RRCTX
|
|
15.59%
|
|
American Funds 2025 Target Date Retirement Fund Class R6
|
|
RFDTX
|
|
17.85%
|
|
American Funds 2030 Target Date Retirement Fund Class R6
|
|
RFETX
|
|
20.06%
|
|
American Funds 2035 Target Date Retirement Fund Class R6
|
|
RFFTX
|
|
23.29%
|
|
American Funds 2040 Target Date Retirement Fund Class R6
|
|
RFGTX
|
|
24.40%
|
|
American Funds 2045 Target Date Retirement Fund Class R6
|
|
RFHTX
|
|
24.68%
|
|
American Funds 2050 Target Date Retirement Fund Class R6
|
|
RFITX
|
|
25.04%
|
|
American Funds 2055 Target Date Retirement Fund Class R6
|
|
RFKTX
|
|
25.09%
|
|
American Funds 2060 Target Date Retirement Fund Class R6
|
|
RFUTX
|
|
25.01%
|
|
American Funds EuroPacific Growth Fund Class R6
|
|
RERGX
|
|
27.40%
|
|
Carillon Eagle Mid Cap Growth Fund Class R6
|
|
HRAUX
|
|
35.02%
|
|
ClearBridge Small Cap Growth Fund Class IS
|
|
LMOIX
|
|
25.78%
|
|
Cohen & Steers Real Estate Securities Fund, Inc. Class Z
|
|
CSZIX
|
|
31.64%
|
|
Fidelity 500 Index Fund
|
|
FXAIX
|
|
31.47%
|
|
Fidelity Global ex US Index Fund
|
|
FSGGX
|
|
21.34%
|
|
Fidelity Mid Cap Index Fund
|
|
FSMDX
|
|
30.51%
|
|
Fidelity Small Cap Index Fund
|
|
FSSNX
|
|
25.71%
|
|
Fidelity US Bond Index Fund
|
|
FXNAX
|
|
8.48%
|
|
Goldman Sachs Small Cap Value Insights Fund Class R6
|
|
GTTUX
|
|
23.54%
|
|
JPMorgan Equity Income Fund Class R6
|
|
OIEJX
|
|
26.60%
|
|
PGIM Total Return Bond Fund Class R6
|
|
PTRQX
|
|
11.13%
|
|
T. Rowe Price Blue Chip Growth Fund I Class
|
|
TBCIX
|
|
30.13%
|
|
Vanguard Treasury Money Market Fund
|
|
VUSXX
|
|
2.14%
|
|
Victory Sycamore Established Value Fund Class R6
|
|
VEVRX
|
|
28.82%
|
|
Wells Fargo Stable Return Fund C
|
|
N/A
|
|
2.25%
|
The table below provides the balance as of December 31, 2019, of our NEOs’ 401(K) Plan accounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Balance
|
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings (Loss)
|
|
|
Withdrawals/
|
|
|
at Last
|
|
|
|
|
Last FY
|
|
|
Last FY
|
|
|
in Last FY (1)
|
|
|
Distributions
|
|
|
FYE
|
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Bolton CEO
|
|
$
|
25,000
|
|
|
$
|
11,200
|
|
|
$
|
20,895
|
|
|
$
|
-
|
|
|
$
|
165,927
|
|
|
Grimes COO
|
|
$
|
25,000
|
|
|
$
|
11,200
|
|
|
$
|
96,602
|
|
|
$
|
-
|
|
|
$
|
606,402
|
|
|
Campbell CFO
|
|
$
|
25,000
|
|
|
$
|
11,200
|
|
|
$
|
109,100
|
|
|
$
|
-
|
|
|
$
|
617,467
|
|
|
DelPriore GC
|
|
$
|
25,000
|
|
|
$
|
11,200
|
|
|
$
|
23,888
|
|
|
$
|
-
|
|
|
$
|
150,754
|
|
|
|
(1)
|
Values represent aggregate deemed investment earnings or losses from voluntary deferrals and our contributions, as applicable, as well as minimal investment
fund fees. The 401(K) Plan does not guarantee a return on deferred amounts.
|
|
|
2020 PROXY STATEMENT
|
57
|
NON-QUALIFIED DEFERRED COMPENSATION
The Executive Deferred Compensation Plan is available to all executive management. Under the terms of the Executive Deferred Compensation Plan, participants may elect
to defer a percentage of their compensation and we may match a portion of their deferral. Distributions from the Executive Deferred Compensation Plan for balances prior to 2016 are made in five equal annual installments beginning on the first day
following the sixth full month occurring after the earliest of death, disability, or separation from service. Balances from 2016 and forward will be distributed in compliance with the participant’s previous elections for the specific contributions in
the form of either a lump-sum payment or substantially equal annual installments amortized over a period not to exceed ten years beginning on the later of January 1st or
six months and a day after the participant’s separation from service. Notwithstanding the foregoing, in the case of a participant who becomes entitled to receive benefits on account of disability, the balances from 2016 and forward will be paid in a
lump sum on or after the 15th of the first month following determination of disability.
The mutual funds available for investment in the Executive Deferred Compensation Plan for 2019, as well as those fund’s respective rates of return for 2019, are
listed in the table to the right.
|
|
|
|
|
2019
|
|
|
|
|
|
Rate of
|
|
Name of Fund
|
|
Ticker
|
|
Return
|
|
American Funds 2010 Target Date Retirement Fund Class R6
|
|
RFTTX
|
|
13.88%
|
|
American Funds 2015 Target Date Retirement Fund Class R6
|
|
RFJTX
|
|
14.94%
|
|
American Funds 2020 Target Date Retirement Fund Class R6
|
|
RRCTX
|
|
15.59%
|
|
American Funds 2025 Target Date Retirement Fund Class R6
|
|
RFDTX
|
|
17.85%
|
|
American Funds 2030 Target Date Retirement Fund Class R6
|
|
RFETX
|
|
20.06%
|
|
American Funds 2035 Target Date Retirement Fund Class R6
|
|
RFFTX
|
|
23.29%
|
|
American Funds 2040 Target Date Retirement Fund Class R6
|
|
RFGTX
|
|
24.40%
|
|
American Funds 2045 Target Date Retirement Fund Class R6
|
|
RFHTX
|
|
24.68%
|
|
American Funds 2050 Target Date Retirement Fund Class R6
|
|
RFITX
|
|
25.04%
|
|
American Funds 2055 Target Date Retirement Fund Class R6
|
|
RFKTX
|
|
25.09%
|
|
American Funds 2060 Target Date Retirement Fund Class R6
|
|
RFUTX
|
|
25.01%
|
|
American Funds EuroPacific Growth Fund Class R6
|
|
RERGX
|
|
27.40%
|
|
Carillon Eagle Mid Cap Growth Fund Class R6
|
|
HRAUX
|
|
35.02%
|
|
ClearBridge Small Cap Growth Fund Class IS
|
|
LMOIX
|
|
25.78%
|
|
Cohen & Steers Real Estate Securities Fund, Inc. Class Z
|
|
CSZIX
|
|
31.64%
|
|
Fidelity 500 Index Fund
|
|
FXAIX
|
|
31.47%
|
|
Fidelity Global ex US Index Fund
|
|
FSGGX
|
|
21.34%
|
|
Fidelity Mid Cap Index Fund
|
|
FSMDX
|
|
30.51%
|
|
Fidelity Small Cap Index Fund
|
|
FSSNX
|
|
25.71%
|
|
Fidelity US Bond Index Fund
|
|
FXNAX
|
|
8.48%
|
|
Goldman Sachs Small Cap Value Insights Fund Class R6
|
|
GTTUX
|
|
23.54%
|
|
JPMorgan Equity Income Fund Class R6
|
|
OIEJX
|
|
26.60%
|
|
PGIM Total Return Bond Fund Class R6
|
|
PTRQX
|
|
11.13%
|
|
T. Rowe Price Blue Chip Growth Fund I Class
|
|
TBCIX
|
|
30.13%
|
|
Vanguard Treasury Money Market Fund
|
|
VUSXX
|
|
2.14%
|
|
Victory Sycamore Established Value Fund Class R6
|
|
VEVRX
|
|
28.82%
|
|
Wells Fargo Stable Return Fund C
|
|
N/A
|
|
2.25%
|
The table below provides the balance as of December 31, 2019, of our NEOs’ Executive Deferred Compensation Plan accounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
|
Executive
|
|
|
Registrant
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
Balance
|
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings (Loss)
|
|
|
Withdrawals/
|
|
|
at Last
|
|
|
|
|
Last FY
|
|
|
Last FY
|
|
|
in Last FY (1)
|
|
|
Distributions
|
|
|
FYE
|
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Bolton CEO
|
|
$
|
151,136
|
|
|
$
|
93,226
|
|
|
$
|
586,473
|
|
|
$
|
-
|
|
|
$
|
3,642,823
|
|
|
Grimes COO
|
|
$
|
161,232
|
|
|
$
|
43,661
|
|
|
$
|
169,298
|
|
|
$
|
-
|
|
|
$
|
1,133,446
|
|
|
Campbell CFO
|
|
$
|
180,641
|
|
|
$
|
37,315
|
|
|
$
|
213,607
|
|
|
$
|
-
|
|
|
$
|
1,385,975
|
|
|
DelPriore GC
|
|
$
|
58,218
|
|
|
$
|
35,374
|
|
|
$
|
115,529
|
|
|
$
|
-
|
|
|
$
|
658,749
|
|
|
|
(1)
|
Values represent deemed combined investment earnings or losses from voluntary deferrals and our contributions, as applicable. The Executive Deferred Compensation Plan does not guarantee a return on deferred amounts.
|
|
|
2020 PROXY STATEMENT
|
58
|
|
EMPLOYMENT AGREEMENTS AND POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL
|
EMPLOYMENT AGREEMENTS
|
Mr. Bolton entered into an employment agreement with us on March 24, 2015, that replaced his previous agreement which had been entered into in 2008. The
employment agreement outlines the compensation he will receive and (i) has a term of one year that renews automatically on the first day of each month for an additional one-month period, so that on the first day of each month, unless sooner
terminated in accordance with the terms of the agreement, the remaining term is one year; (ii) provides for an annual base salary for Mr. Bolton, subject to change at the discretion of the Compensation Committee; and (iii) allows for annual
incentive/bonus compensation.
Upon Mr. Bolton’s termination due to death or permanent disability or in the event he is terminated without cause or resigns for good reason, we will pay Mr.
Bolton (or his personal representative) all amounts due to him as of the date of termination under the terms of all incentive and bonus plans, and will also continue to pay him his base salary as then in effect for one year after the
termination. In addition, all stock options or shares of restricted stock issued to Mr. Bolton will become fully vested and exercisable in accordance with the terms of the underlying equity incentive plan on the termination date. Alternatively,
Mr. Bolton may elect to receive an amount in cash equal to the in-the-money value of the shares covered by all such options. In compliance with the 2018 LTIP and 2019 LTIP, Mr. Bolton will also receive a pro-rata award (based on number of days
from grant to termination date) of any Performance Share Awards which would have been earned and issued under the plans except for the fact that the termination date preceded the end of the performance period. Shares of restricted stock will be
issued in line with the underlying plan timing and will be immediately fully vested. Finally, we will pay to Mr. Bolton all legal fees incurred by him in connection with his termination without cause or resignation for good reason.
If Mr. Bolton is terminated without cause in anticipation of, on, or within three years after a change in control or resigns for good reason within three
years after a change in control, he is entitled to receive a payment equal to the sum of 2.99 times his annual base salary in effect on the date of termination plus 2.99 times his average annual cash bonus paid during the two immediately
preceding fiscal years. However, if the change in control transaction occurs within three years of Mr. Bolton’s planned retirement date, the maximum change in control payment would be the base salary and bonus payable to Mr. Bolton through the
anticipated date of retirement. In addition, all stock options and shares of restricted stock issued to Mr. Bolton shall become fully vested and exercisable in accordance with the terms of the underlying equity incentive plan on the
termination date. Alternatively, Mr. Bolton may elect to receive an amount in cash equal to the greater of (i) the in-the-money value of the shares covered by all such options or (ii) the difference between the highest per share price for our
shares paid in connection with the change in control and the per share exercise price of the options held by him, multiplied by the number of shares covered by all such options. In compliance with the 2018 LTIP and 2019 LTIP, if Mr. Bolton is
terminated without cause after negotiations for a sale event have begun and the sale event closes within 90 days of Mr. Bolton’s termination date, the maximum Performance Share Awards for which the performance period had not yet completed prior
to his termination date, shall be considered to be earned in full. The maximum amount of restricted shares would be issued to Mr. Bolton and be fully vested immediately prior to the consummation of the sale event. Finally, we will pay Mr.
Bolton all legal fees incurred by him in connection with the change in control termination.
The employment agreement also contains certain confidentiality and non-competition provisions, as well as the agreement of Mr. Bolton, for a period of two
years following a change in control termination, not to have an interest in a competitor or engage in a competitive business, in any capacity, within five miles of a property we own at the time of termination of employment.
|
|
|
2020 PROXY STATEMENT
|
59
|
CHANGE IN CONTROL AGREEMENTS
|
Messrs. Grimes, Campbell and DelPriore have change in control agreements that were entered into on March 24, 2015. The agreements outline the compensation
they will receive under certain change in control scenarios. For Messrs. Campbell and Grimes, these agreements replaced change in control agreements originally entered into in December 1999 which were subsequently amended and restated in 2008.
Each change in control agreement provides that in the event of a change in control termination, each of Messrs. Grimes, Campbell and/or DelPriore is entitled
to receive a payment equal to the sum of 2.99 times his annual base salary in effect on the date of termination plus 2.99 times his average annual cash bonus paid during the two immediately preceding fiscal years. In addition, all stock
options and shares of restricted stock issued to Messrs. Grimes, Campbell and/or DelPriore shall become fully vested and exercisable in accordance with the terms of the underlying equity incentive plan on the termination date. Alternatively,
Messrs. Grimes, Campbell and/or DelPriore may elect to receive an amount in cash equal to the greater of (i) the in-the-money value of the shares covered by all such options or (ii) the difference between the highest per share price for our
shares paid in connection with the change in control and the per share exercise price of the options held by him, multiplied by the number of shares covered by all such options. In compliance with the 2018 LTIP and 2019 LTIP, if Messrs. Grimes,
Campbell and/or DelPriore are terminated without cause after negotiations for a sale event have begun and the sale event closes within 90 days of the termination date, the maximum Performance Share Awards for which the performance period had
not yet completed prior to the termination date, shall be considered to be earned in full. The maximum amount of restricted shares would be issued and be fully vested immediately prior to the consummation of the sale event. Finally, we will pay
Messrs. Grimes, Campbell and/or DelPriore all legal fees incurred by them in connection with the change in control. The change in control agreements also require that Messrs. Grimes, Campbell and/or DelPriore, for a period of two years
following a change in control termination, not have an interest in a competitor or engage in a competitive business, in any capacity, within five miles of a property we own at the time of termination of employment.
|
The following tables include an estimate of the potential payments we would be required to make upon termination of employment of the NEOs in each of the
circumstances described below. In providing the estimated potential payments, we have made the following general assumptions in all circumstances where applicable.
|
|
■
|
The date of termination is December 31, 2019
|
|
|
■
|
The annual salary at the time of termination equals the 2019 base salary as established by the Compensation Committee, and in regards to Mr. Bolton, by the
Board, for each NEO
|
|
|
■
|
There is no accrued and unpaid salary
|
|
|
■
|
There is no unpaid reimbursement for expenses incurred prior to the date of termination
|
|
TERMINATION DUE TO DEATH OR DISABILITY OR BY MAA WITHOUT CAUSE OR BY THE NEO FOR GOOD REASON IN THE ABSENCE OF A CHANGE IN CONTROL
|
|
Severance Benefit Component
|
|
BOLTON CEO
|
|
GRIMES COO (4)
|
|
CAMPBELL CFO (4)
|
|
DELPRIORE GC (4)
|
|
12 months base salary (1)
|
|
$
|
814,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Pro-rated bonus
|
|
$
|
1,424,500
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Equity awards (2)
|
|
$
|
11,650,463
|
|
|
$
|
5,281,649
|
|
|
$
|
5,404,850
|
|
|
$
|
4,744,960
|
|
|
Perquisites (3)
|
|
$
|
10,183
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
Total
|
|
$
|
13,899,146
|
|
|
$
|
5,281,649
|
|
|
$
|
5,404,850
|
|
|
$
|
4,744,960
|
|
|
|
(1)
|
Semi-monthly payments of base salary for one year following the termination date, subject to the six-month delayed payment rule under Section 409A of the
Internal Revenue Code.
|
|
|
(2)
|
Aggregate number of (i) issued but unvested restricted shares as of December 31, 2019, (ii) the number of shares issuable under a former merger incentive
plan based on actual performance through December 31, 2019, and (iii) performance share awards under the 2019 LTIP that are issuable based on actual performance (pro-rated for service during the performance period as applicable), multiplied by
$131.86, the closing price for MAA’s common stock on the NYSE on December 31, 2019.
|
|
|
(3)
|
Upon a termination, other than death, lump sum payment for 12 months of insurance coverage for health, dental, life and disability substantially equivalent
to the costs under MAA’s benefit plans.
|
|
|
(4)
|
NEO is not entitled to receive any severance benefits except certain equity awards in accordance with the terms and conditions of the applicable plan
document.
|
|
|
2020 PROXY STATEMENT
|
60
|
|
TERMINATION BY MAA WITHOUT CAUSE (OR BY THE NEO FOR GOOD REASON) IN ANTICIPATION OF, ON, OR WITHIN A SPECIFIED PERIOD AFTER A CHANGE
IN CONTROL
|
|
Severance Benefit Component
|
|
BOLTON CEO
|
|
GRIMES COO
|
|
CAMPBELL CFO
|
|
DELPRIORE GC
|
|
2.99 x base salary
|
|
$
|
2,433,860
|
|
|
$
|
1,542,840
|
|
|
$
|
1,505,465
|
|
|
$
|
1,468,090
|
|
|
2.99 x bonus (1)
|
|
$
|
4,693,654
|
|
|
$
|
2,108,076
|
|
|
$
|
1,793,924
|
|
|
$
|
1,753,166
|
|
|
Pro-rated bonus
|
|
$
|
1,424,500
|
|
|
$
|
722,400
|
|
|
$
|
629,375
|
|
|
$
|
613,750
|
|
|
Equity awards (2)
|
|
$
|
16,513,091
|
|
|
$
|
7,632,584
|
|
|
$
|
7,698,514
|
|
|
$
|
6,796,856
|
|
|
Perquisites (3)
|
|
$
|
20,367
|
|
|
$
|
28,068
|
|
|
$
|
29,268
|
|
|
$
|
18,719
|
|
|
Total
|
|
$
|
25,085,472
|
|
|
$
|
12,033,968
|
|
|
$
|
11,656,546
|
|
|
$
|
10,650,581
|
|
|
|
(1)
|
Bonus is the average annual cash bonus paid for the two immediately preceding fiscal years.
|
|
|
(2)
|
Aggregate number of (i) issued but unvested restricted shares as of December 31, 2019, (ii) the maximum number of shares issuable under a former merger
incentive plan, and (iii) the maximum number of performance share awards under the 2016 LTIP, the 2017 LTIP, the 2018 LTIP and the 2019 LTIP, multiplied by $131.86, the closing price for MAA’s common stock on the NYSE on December 31, 2019.
|
|
|
(3)
|
For Mr. Bolton, lump sum payment for 24 months of insurance coverage for health, dental, vision, life, and disability substantially equivalent to the costs
under MAA’s benefit plans. For Messrs. Grimes, Campbell, and DelPriore, lump sum payment for 24 months insurance coverage for health, dental and vision.
|
As directed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, on August 5, 2015, the SEC adopted final rules regarding disclosure of (i) the median
of the annual total compensation of all employees of a company, other than its principal executive officer, (ii) the annual total compensation of the company’s principal executive officer, and (iii) the ratio of those two amounts, or pay ratio. The
purpose of this new disclosure requirement is to provide a measure of the equitability of pay within the organization and to assist shareholders in better understanding and assessing a company’s executive compensation practices. We encourage you to
consider this information in conjunction with the information provided in the Compensation Discussion and Analysis section of this Proxy Statement, which includes discussions on our compensation philosophy, percentage of executive pay tied to
our performance results and long term total shareholder return, peer comparisons and other information you may find useful in evaluating the appropriateness of our executive compensation packages.
Our pay ratio is provided to assist you in evaluating our compensation practices and may not be meaningful when compared against other companies as impacts of
varying organizational structures on employment bases and their respective compensation practices, as well as the methodology, assumptions and estimates any one company uses in determining their median employee, may impact the pay ratios between and
within industries.
|
IDENTIFICATION OF MEDIAN EMPLOYEE
|
Calculations to identify the median employee are only required to be done every three years by the SEC. In analyzing the need to identify a median employee for 2019,
we took into account that no meaningful changes had occurred in our employee population or in our compensation arrangements that would result in a significant change in our CEO pay ratio disclosure. However, our median employee from 2017 did not remain
employed by MAA during 2019. As a result, as is allowed by the SEC, we determined to utilize the next closest employee to the originally identified median employee from our 2017 CEO pay ratio analysis for our 2019 CEO pay ratio analysis. We feel this
is appropriate as the new median employee has not had a significant change in their compensation, such as a major promotion since the 2017 analysis outlined below.
|
|
2020 PROXY STATEMENT
|
61
|
2017 MEDIAN EMPLOYEE IDENTIFICATION PROCESS
|
|
POPULATION OF EMPLOYEES ANALYZED
|
|
The below outlines the full population of employees included in our 2017 analysis to identify our median employee.
|
|
|
We Included Employees
|
|
We Excluded
|
|
|
|
§ Employed by MAA or any of its subsidiaries
§ Employed on December 31, 2017
§ Classified as full-time, part-time or temporary, except as set forth in the “We
Excluded” column
|
|
§ Our CEO
§ Contract workers
§ Temporary workers employed by, and whose compensation was determined by, an unaffiliated third party
§ MAA does not have seasonal employees
§ MAA does not have international employees
|
|
|
|
DATA USED TO IDENTIFY MEDIAN EMPLOYEE
|
|
|
|
To identify our median employee, we reviewed the 2017 income reported in Box 1 of Form W-2 for employees of MAA and its subsidiaries.
While the value in Box 1 of Form W-2 is not calculated in the same manner as the total compensation in the Summary Compensation Table (the value on which the pay ratio is based), we felt it provided a consistent reporting value which
could be applied across all associates and it includes values for the largest categories of compensation represented in the Summary Compensation Table, which are salary, cash bonuses and stock awards. In regards to MAA’s compensation
packages, the largest difference between the compensation reported in the Summary Compensation Table and Box 1 of Form W-2 is the value associated with stock awards, as the Summary Compensation Table reflects the full grant date
fair value in accordance with FASB ASC Topic 718 in the year of grant while Box 1 of Form W-2 reflects the actual compensation realized in the year of vesting of stock awards actually earned. While these values can be materially different,
including the timing thereof, given the nature and number of the participants in our equity incentive plans, we believe the differences in value would not move a participant from above the median to below the median and, therefore, would not
have an impact on the identification of our median employee.
The below outlines the adjustments we made to the Box 1 of Form W-2 values for the included employees before identifying the median
employee.
|
|
|
|
■ Annualized income of full-time and part-time employees hired after
January 1, 2017
■ Annualized
income of employees who were on leave for a portion of the year for active military duty, under the Family and Medical Leave Act or as a result of an unpaid leave of absence
|
|
|
|
We did not make any cost-of-living adjustments.
|
|
TOTAL MEDIAN EMPLOYEE COMPENSATION CALCULATION
After identifying the median employee using the above methodology, we calculated that employee’s compensation to match the required disclosures in
the Summary Compensation Table, to provide a comparable value to the amount of total compensation disclosed for Mr. Bolton, our CEO, and in compliance with SEC requirements. The total annual compensation for our median employee in 2019 was
$46,088.
Mr. Bolton, our CEO, is our principal executive officer. When considering Mr. Bolton’s total annual compensation of $5,735,898 for 2019, the ratio
of our median employee’s total annual compensation to our principal executive officer’s total annual compensation was approximately 1:124.
In accordance with FASB ASC Topic 718, Mr. Bolton’s total annual compensation includes the full grant date fair value of stock awards granted in
2019. A significant portion of Mr. Bolton’s compensation is performance based, only realizable by Mr. Bolton if certain overall company and long term shareholder return performance levels are achieved, and is therefore not guaranteed of being realized
by Mr. Bolton. Excluding the grant date fair value of the performance-based compensation for which the performance period had not ended as of December 31, 2019 and as such remains at risk of not being earned, his total annual compensation for 2019 is
$4,600,776, resulting in an approximate 1:100 ratio to the total annual compensation of our median employee.
|
|
2020 PROXY STATEMENT
|
62
|
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PROPOSAL 3: RATIFICATION OF APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
MATTER TO BE VOTED
Ratification of the appointment of Ernst & Young LLP to serve as MAA’s independent registered public accounting firm for 2020.
The Audit Committee is solely responsible for selecting our independent registered public accounting firm and has selected Ernst & Young LLP
to audit our financial statements for the 2020 fiscal year. Although shareholder approval is not required to appoint Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2020, our Board believes that
submitting the appointment of Ernst & Young LLP to the shareholders for ratification is a matter of good corporate governance.
VOTE REQUIRED
This proposal will be approved if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal.
Shareholder approval for the appointment of our independent registered public accounting firm is not required, but the Board is submitting the
selection of Ernst & Young LLP for ratification in order to obtain the views of our shareholders. The Audit Committee will consider a vote against the firm by the shareholders in selecting our independent registered public accounting firm
in the future.
IMPACT OF ABSTENTIONS
Abstentions will have no legal effect on whether this proposal is approved.
IMPACT OF BROKER NON-VOTES
Broker non-votes will have no legal effect on whether this proposal is approved.
BOARD RECOMMENDATION
On behalf of the Audit Committee, our Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as our
independent registered public accounting firm for fiscal year 2020.
|
Ernst & Young LLP audited MAA’s annual financial statements for the fiscal year ended December 31, 2019, and MAA’s internal control
over financial reporting as of December 31, 2019. On February 18, 2020, following a review of the qualifications, performance and independence of Ernst & Young LLP, among other considerations, the Audit Committee appointed Ernst & Young LLP
to be MAA’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
Ernst & Young LLP has performed as MAA’s external auditors continuously since October 2005. The Audit Committee believes that the
appointment of Ernst & Young LLP as MAA’s independent registered public accounting firm for 2020 is in the best long-term interest of MAA’s shareholders.
A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to make a statement if they so desire and to
answer any appropriate questions.
AUDIT AND NON-AUDIT FEES
The following table shows the fees paid or accrued by us for audit and other services provided by Ernst & Young LLP, our independent
registered public accounting firm effective October 31, 2005, for the years ended December 31, 2019 and 2018.
SEC rules under Section 202 of the Sarbanes-Oxley Act of 2002 require the Audit Committee to pre-approve audit and non-audit services provided by
our independent registered public accounting firm. In 2002, our Audit Committee
|
|
2020 PROXY STATEMENT
|
63
|
began pre-approving all services provided by our independent registered public accounting firm and has pre-approved all new services since that time.
|
|
|
|
2019
|
|
|
|
2018
|
|
|
Audit Fees (1)
|
|
$
|
2,416,184
|
|
|
$
|
2,570,737
|
|
|
Audit-Related Fees (2)
|
|
|
-
|
|
|
|
-
|
|
|
Tax Fees (3)
|
|
|
365,770
|
|
|
|
476,035
|
|
|
All Other Fees (4)
|
|
|
2,000
|
|
|
|
2,000
|
|
|
Total Fees
|
|
$
|
2,783,954
|
|
|
$
|
3,048,772
|
|
|
(1)
|
Audit Fees consists of fees billed for professional services rendered and expenses incurred relating to the
audit of our financial statements and internal control over financial reporting, the review of our interim financial statements and the work performed on securities offerings and other filings with the SEC, including comfort letters, consents
and comment letters.
|
|
(2)
|
Audit-Related Fees consists of fees billed for professional services rendered and expenses incurred for
assurance and other services related to the audit of our financial statements.
|
|
(3)
|
Tax Fees consists of fees billed for professional services rendered and expenses incurred related to tax return
preparation and compliance and general tax consulting. For 2019, Tax Fees included fees billed specifically pertaining to tax return compliance, 162(m) executive compensation consulting, sales and use tax planning, Section 1031 “Like-Kind”
consulting, debt financing tax consulting and state income tax notices. For 2018, Tax Fees included fees billed specifically pertaining to tax return compliance, final analysis of a taxable REIT subsidiary tax basis, joint venture structuring,
taxable gain/loss calculations related to dispositions, accounting method change review related to cost segregation, real estate transfer tax analysis related to debt financing and state income tax planning.
|
|
(4)
|
All Other Fees consists of a fee billed for a subscription to an online accounting and tax information service.
|
The Audit Committee has determined that the nature and level of non-audit related services that Ernst & Young LLP provides to MAA is compatible with maintaining the
independence of Ernst & Young LLP.
PRACTICES RELATED TO THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
SOLE AUTHORITY TO APPOINT OR REPLACE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee has the sole authority to appoint or replace the independent registered public accounting firm and is responsible for the
compensation and oversight of the work of the independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work, or performing other audit, review or attestation services for MAA. As such, the
independent registered public accounting firm reports directly to the Audit Committee.
ANNUAL EVALUATION AND SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee annually evaluates the performance of MAA’s independent registered public accounting firm and audit engagement team and
determines whether to reengage the then current firm. Among other items, the Audit Committee takes into account the following factors when making this determination:
|
|
§
|
The Audit Committee’s determination of prior performance of the independent registered public accounting firm
including the quality and efficiency of work performed, and familiarity of MAA’s operations, accounting policies and procedures and internal controls over financial reporting,
|
|
|
§
|
Independence considerations including independence controls of the independent registered public accounting firm
and the type and quantity of non-audit services provided to MAA, any member of the Board and any NEOs,
|
|
|
§
|
Recent Public Company Accounting Oversight Board reports related generally to the independent registered public
accounting firm and specifically to audits by members of MAA’s engagement team,
|
|
|
§
|
Depth of financial, accounting and industry experience, technical expertise and resources of the independent
registered public accounting firm in general and of the members of the audit engagement team specifically,
|
|
|
§
|
The quality and candor of the independent registered public accounting firm’s communications with the Audit
Committee,
|
|
|
§
|
The appropriateness of fees charged by the independent registered public accounting firm, and
|
|
|
§
|
The results of the most recent shareholder vote to ratify the appointment of the independent registered public
accounting firm.
|
|
|
2020 PROXY STATEMENT
|
64
|
OVERSIGHT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
In addition to quarterly written materials submitted to the Audit Committee, representatives of the independent registered public accounting firm
meet with the committee, management and the Director of Internal Audit on a quarterly basis. The Audit Committee routinely meets with representatives of the independent registered public accounting firm as well as management and the Director of
Internal Audit in separate executive sessions throughout the year. The Chairman of the Audit Committee may also receive or request periodic or ad hoc updates from the independent registered public accounting firm and/or management and the Director of
Internal Audit between scheduled meetings, as desired.
PRE-APPROVAL OF ALL AUDITING AND NON-AUDITING SERVICES
The Audit Committee pre-approves all auditing services and permitted non-audit services to be performed by the independent registered public
accounting firm. The Audit Committee has delegated the authority to pre-approve such services and fees to the Chairman of the Audit Committee when scheduling a full committee meeting to timely consider a proposed service or fee is not feasible. Any
decisions to pre-approve services or fees made solely by the Chairman of the Audit Committee are presented to the full Audit Committee for ratification at its next scheduled meeting. Authority to pre-approve services and fees of the independent
registered public accounting firm may not be delegated to any member of management.
ROTATION OF AUDIT ENGAGEMENT TEAM MEMBERS
The Audit Committee ensures that the rotation of the lead audit partner and audit engagement team partners of MAA’s independent registered public
accounting firm is done in compliance with NYSE and SEC regulations.
HIRING OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EMPLOYEES
RESTRICTIONS ON HIRING OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EMPLOYEES
MAA will not hire an individual who is concurrently an employee of its independent registered public accounting firm, nor will MAA hire an
individual in an accounting role or financial reporting oversight role if they remain in a position to influence MAA’s independent registered public accounting firm’s operations or policies.
REQUIRED APPROVAL FOR HIRING PREVIOUS MEMBERS OF AUDIT ENGAGEMENT TEAM
MAA’s Principal Accounting Officer or Chief Financial Officer must approve the hiring of any candidate who served on the independent registered
public accounting firm’s audit engagement team for MAA.
COOLING OFF PERIOD BEFORE HIRING PREVIOUS MEMBERS OF AUDIT ENGAGEMENT TEAM
MAA will not hire a former member of the independent registered public accounting firm’s audit engagement team for MAA in an accounting or
financial reporting oversight role before a required “cooling-off” period has elapsed.
REPORTING OF HIRING PREVIOUS MEMBERS OF AUDIT ENGAGEMENT TEAM TO AUDIT COMMITTEE
Management discloses all hires of former members of the independent registered public accounting firm’s audit engagement team for accounting or
financial reporting oversight roles to the Audit Committee at least quarterly.
AUDIT COMMITTEE COMPRISED SOLELY OF INDEPENDENT MEMBERS OF THE BOARD
The Audit Committee is comprised solely of independent members of the Board.
Both Alan B. Graf, Jr. and Russell R. French serve on the Audit Committee and have been determined by the Audit Committee and the Board to meet
the definition of an audit committee financial expert under the applicable SEC rules.
ANONYMOUS WHISTLEBLOWER PLATFORM
The Audit Committee has established a formal Whistleblower Policy with related Procedures which allows for the anonymous submission and addressing
of concerns related to accounting, internal accounting controls and auditing matters. The policy and procedures are reviewed annually by the Audit Committee and are publicly provided with other corporate governance materials on MAA’s investor relations
website at http://ir.maac.com/Corporate-Governance.
|
|
2020 PROXY STATEMENT
|
65
|
AUDIT COMMITTEE REPORT
The Audit Committee has the responsibilities and powers set forth in its charter which include the responsibility to assist our Board of Directors in its oversight of our accounting and
financial reporting principles and policies and internal audit controls and procedures, the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, the
performance of the independent auditor and our internal audit function, and our endeavors to address cybersecurity risks. The Audit Committee is also required to prepare this report to be included in our annual Proxy Statement pursuant to the proxy
rules of the SEC.
Management is responsible for the indemnification, assessment and management of cybersecurity risks, the preparation, presentation and integrity of our financial statements and for
maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures to provide for compliance with accounting standards and applicable laws and regulations. The internal auditor is responsible for
testing such internal controls and procedures. Our independent registered public accounting firm is responsible for planning and carrying out a proper audit of our annual financial statements, reviews of our quarterly financial statements prior to
the filing of each quarterly report on Form 10-Q, as well as other procedures.
The Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 2019 with management. In addition,
the Audit Committee has discussed with Ernst & Young LLP, our independent registered public accounting firm, the matters required by the applicable requirements of the Public Company Accounting Oversight Board and the Commission, and other matters
required by the charter of this committee.
The Audit Committee also has received the written disclosures and the letter from Ernst & Young LLP required by the Public Company Accounting
Oversight Board Rule 3526, and has discussed with Ernst & Young LLP their independence from the company and its management.
The Audit Committee has received both management’s and the independent registered public accounting firm’s reports on internal control over
financial reporting and has discussed those reports.
The Audit Committee has discussed with management and representatives of the independent registered public accounting firm such other matters and
received such assurances from them as they deemed appropriate.
As a result of their review and discussions, the Audit Committee has recommended to the Board of Directors the inclusion of our audited financial
statements in the Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the SEC.
|
|
AUDIT COMMITTEE:
Alan B. Graf, Jr., CHAIRMAN
Russell R. French
W. Reid Sanders
Gary Shorb
|
|
|
2020 PROXY STATEMENT
|
66
|
SECURITIES OWNERSHIP
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The number of shares owned and percentage ownership in the following table is based on 114,271,487 shares of common stock outstanding on February 29, 2020. The
following table sets forth information as of December 31, 2019, regarding each person known to us to be the beneficial owner of more than five percent of our common stock. The information in the following table is based solely on Schedule 13G filings
with the SEC by the respective identified beneficial owners.
|
|
|
Amount and
|
|
|
|
|
Notes on Amounts from Schedule 13G Disclosures
|
|
|
|
Nature of
|
|
|
|
|
Power to Vote or
|
|
Power to Dispose or
|
|
Name and Address
|
|
Beneficial
|
|
Percent
|
|
|
Direct the Vote
|
|
Direct the Disposition
|
|
of Beneficial Owner
|
|
Ownership
|
|
of Class
|
|
|
Sole
|
|
Shared
|
|
Sole
|
|
Shared
|
|
The Vanguard Group
|
|
19,449,048
|
|
17.0%
|
|
|
287,998
|
|
155,415
|
|
19,136,841
|
|
312,207
|
|
100 Vanguard Blvd.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malvern, PA 19355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BlackRock, Inc.
|
|
12,158,993
|
|
10.6%
|
|
|
11,027,940
|
|
-
|
|
12,158,993
|
|
-
|
|
55 East 52nd Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New York, NY 10055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
State Street Corporation
|
|
7,705,127
|
|
6.7%
|
|
|
-
|
|
6,447,516
|
|
-
|
|
7,688,823
|
|
State Street Financial Center
|
|
|
|
|
|
|
|
|
|
|
|
|
|
One Lincoln Street
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Boston, MA 02111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SECURITY OWNERSHIP OF MANAGEMENT
The number of shares owned and percentage ownership in the following table is based on 114,271,487 shares of common stock
outstanding on February 29, 2020. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power
with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options that are either immediately exercisable or exercisable within 60 days of February 29, 2020. These shares are
deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of
any other person.
|
|
2020 PROXY STATEMENT
|
67
|
The following table sets forth the beneficial ownership of our common stock as of February 29, 2020 by (i) each director,
(ii) each director nominee, (iii) each executive officer named in the Summary Compensation Table, and (iv) all directors, nominees and executive officers as a group. Unless otherwise indicated, voting power and investment power are exercisable solely
by the named person. The address of each officer, director and/or director nominee listed below is 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138.
|
Name of
Beneficial Owner
|
|
Aggregate
Number of
Shares
Beneficially
Owned
|
|
Percent
of Class
|
|
Notes
|
|
H. Eric Bolton, Jr. (1)
|
|
378,487
|
|
(2)
|
|
Includes 110,000 shares that Mr. Bolton has the current right to acquire upon redemption of limited partnership units; 8,528 shares attributed to Mr. Bolton in
our Employee Stock Ownership Plan; and 5,753 shares owned in a joint account with his wife for which Mr. Bolton has shared voting and investment power.
|
|
Albert M. Campbell, III
|
|
73,307
|
|
(2)
|
|
Includes 3,041 shares attributed to Mr. Campbell in our Employee Stock Ownership Plan; 100 shares held by Mr. Campbell through an individual retirement
account; and 11,523 shares owned in a joint account with his wife for which Mr. Campbell has shared voting and investment power.
|
|
Robert J. DelPriore
|
|
43,612
|
|
(2)
|
|
|
|
Russell R. French (1)
|
|
24,965
|
|
(2)
|
|
Includes 7,355 shares held in a deferred compensation account.
|
|
Alan B. Graf, Jr. (1)
|
|
43,558
|
|
(2)
|
|
Includes 30,699 shares held in a deferred compensation account.
|
|
Thomas L. Grimes, Jr.
|
|
72,461
|
|
(2)
|
|
Includes 3,839 shares attributed to Mr. Grimes in our Employee Stock Ownership Plan; 1,408 shares owned by Mr. Grimes’ spouse in our Employee Stock Ownership
Plan; and 2 shares owned by his children for which Mr. Grimes has shared voting and investment power.
|
|
Toni Jennings (1)
|
|
7,268
|
|
(2)
|
|
|
|
James K. Lowder (1)
|
|
241,417
|
|
(2)
|
|
Includes 233,716 shares that Mr. Lowder has the current right to acquire upon redemption of limited partnership units, as to 4,990 of which Mr. Lowder would
have shared voting and investment power (4,990 owned by JKL Investments, LLC); 208,726 of the limited partnership units owned by Mr. Lowder are pledged as collateral on various loans. See page 19.
|
|
Thomas H. Lowder (1)
|
|
285,463
|
|
(2)
|
|
Includes 248,654 shares that Mr. Lowder has the current right to acquire upon redemption of limited partnership units, 19,928 of which Mr. Lowder would have
shared voting and investment power (19,928 owned by THL Investments, LLC); 2,960 shares held in a deferred compensation account; 25,791 shares held by Mr. Lowder through an individual retirement account; and 357 shares indirectly owned for
which Mr. Lowder has shared voting and investment power (357 shares owned by THL Investments, LLC).
|
|
Monica McGurk (1)
|
|
8,261
|
|
(2)
|
|
Includes 5,730 shares held in a deferred compensation account.
|
|
Claude B. Nielsen (1)
|
|
25,042
|
|
(2)
|
|
Includes 2,111 shares that Mr. Nielsen has the current right to acquire upon redemption of limited partnership units; and 10,813 shares held in a deferred
compensation account.
|
|
Philip W. Norwood (1)
|
|
30,150
|
|
(2)
|
|
Includes 18,917 shares held in a deferred compensation account.
|
|
W. Reid Sanders (1)
|
|
147,488
|
|
(2)
|
|
Includes 107,000 shares that Mr. Sanders has the current right to acquire upon redemption of limited partnership units; 8,448 shares held in a deferred
compensation account; 6,000 shares held by Mr. Sanders through an individual retirement account; and 8,400 shares Mr. Sanders holds indirectly and for which he has shared voting and investment power, of which 4,100 shares Mr. Sanders has
authority to vote as trustee or through a power-of-attorney and 1,300 shares owned by Mr. Sanders’ spouse.
|
|
Gary Shorb (1)
|
|
21,635
|
|
(2)
|
|
Includes 16,839 shares held in a deferred compensation account.
|
|
David P. Stockert (1)
|
|
127,674
|
|
(2)
|
|
Includes 6,184 shares held in a deferred compensation account; and 52,712 shares owned by Mr. Stockert’s spouse.
|
|
All Directors, Director Nominees and Executive Officers as a group (15 persons)
|
|
1,530,788
|
|
1.34%
|
|
Includes 701,481 shares that may be acquired upon redemption of limited partnership units; 107,945 shares held in deferred compensation accounts; and 16,816
shares held in our Employee Stock Ownership Plan.
|
|
|
2020 PROXY STATEMENT
|
68
|
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
The following table provides information regarding shares of MAA common stock which could be issued with respect to compensation plans as of
December 31, 2019.
|
|
|
Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights
|
|
Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights
|
|
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities
Reflected in Column (a))
|
|
|
|
(a)(1)
|
|
|
(b)(1)
|
|
(c)(2)
|
|
Equity compensation plans approved by security holders
|
|
20,763
|
|
$
|
77.82
|
|
1,284,915
|
|
Equity compensation plans not approved by security holders
|
|
None
|
|
|
None
|
|
None
|
|
Total
|
|
20,763
|
$
|
77.82
|
|
1,284,915
|
|
(1)
|
The outstanding options were issued in exchange for options outstanding with Post Properties, Inc. at the time of our
merger.
|
|
(2)
|
Represents shares available to be issued under our Second and Amended MAA 2013 Stock Incentive Plan.
|
|
DATE
|
TIME
|
PLACE
|
|
|
|
|
Tuesday, May 19, 2020
|
12:30 p.m. local time
|
REQUIREMENTS TO ATTEND THE ANNUAL MEETING IN PERSON
To attend the Annual Meeting in person, you must:
|
1
|
BE AN ELIGIBLE SHAREHOLDER
|
2
|
REGISTER FOR AN ADMISSION TICKET BY MAY 14, 2020
|
3
|
BRING THE REQUIRED DOCUMENTATION
|
|
Only shareholders (or their proxies or qualified representatives) who are eligible to vote will be allowed to attend the Annual Meeting in person.
Shareholders are eligible to vote if they were a shareholder of record at the close of business on Friday, March 13, 2020.
Guests, media and other individuals will not be allowed to attend.
|
To attend the Annual Meeting in person, you will need to register in advance to obtain an admission ticket.
|
To gain access to the Annual Meeting you will need to have the below documentation with you.
|
|
HAVE YOUR
|
16-digit Control Number
(from your Notice of Internet Availability, Proxy Card or Voter Instruction Form)
|
|
ALL ATTENDEES
|
|
§ Admission ticket
|
|
§ Valid picture identification
|
|
GO TO
|
www.ProxyVote.com
|
|
|
|
PROXIES AND QUALIFIED REPRESENTATIVES
|
|
LOOK FOR
|
Register for Meeting
(and follow the instructions)
|
§ Legal written proxy or authorization letter
|
|
|
|
|
PRINT
|
Print your admission ticket
|
|
|
|
|
|
|
|
If you would like to attend the Annual Meeting in person but do not have access to a computer or printer, you can call the Corporate Secretary’s
office at MAA at 901-682-6600 and we will assist you in obtaining an admission ticket.
|
|
2020 PROXY STATEMENT
|
69
|
QUORUM
A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares of common stock are
represented by shareholders present at the Annual Meeting either in person or by proxy. On March 13, 2020, the record date for the Annual Meeting, there were 114,279,659 shares of common stock outstanding and entitled to vote. Thus, 57,139,830 shares
of common stock must be represented by shareholders present either in person or by proxy at the Annual Meeting to have a quorum.
Your shares will be counted towards the quorum only if you submit a valid proxy to vote in advance or vote in person at the Annual Meeting. Abstentions and
broker non-votes will be counted towards the quorum requirement. If there is no quorum, the Chairman of the meeting or a majority of the votes present at the Annual Meeting may adjourn the meeting to another date.
ATTENDANCE OF DIRECTORS
We encourage, but do not require our directors to attend our annual meetings of shareholders. Last year, all of our directors attended.
MATERIALS RELATED TO THE ANNUAL MEETING
The proxy materials for our 2020 annual meeting of shareholders, including the Annual Meeting Notice, Proxy Statement and
Annual Report, are being made available at http://materials.ProxyVote.com/59522J or mailed to shareholders on or about April 7, 2020.
ADOPTION OF NOTICE AND ACCESS
In alignment with our ESG initiatives, we adopted the Notice and Access delivery format allowed under the SEC rules. As a result, on or about April 7, 2020, unless
directed otherwise by a shareholder, we mailed a Notice of Internet Availability to shareholders entitled to receive notice of the Annual Meeting, which contained instructions on how to access the proxy materials on the Internet. Shareholders who had
affirmatively requested electronic delivery of our proxy materials received their Notice of Internet Availability via electronic delivery and shareholders who previously made an election to permanently receive printed copies were mailed a full printed
set of materials.
If you received a Notice of Internet Availability by mail or electronic delivery, you will not automatically receive a printed copy of the proxy materials. We believe
that using the Notice and Access method of proxy delivery helps us to reduce the printing and postage expenses associated with our annual meetings, provides shareholders with more time to review materials by making them available sooner and reduces our
environmental impact by minimizing our paper and ink usage as well as the energy and fuel required to print and deliver bulk materials. We encourage all of our shareholders to not only review the materials online but also sign up for electronic
delivery of future notices to further reduce our collective impact on the environment.
Shareholders who prefer to receive a printed copy of materials may request they be mailed to them at no charge by scanning the QR barcode on their Notice of Internet
Availability or using any of the methods as outlined below.
REQUEST A PRINTED COPY OF THE PROXY MATERIALS
To request a printed copy of the proxy materials you will need the 16-digit Control Number from your Notice of Internet Availability. Some Beneficial Owners may not
be issued a 16-digit Control Number. Those owners should follow the instructions provided on their Voter Instruction Form from their bank or broker.
|
ONLINE
www.ProxyVote.com
|
|
|
BY PHONE
800-579-1639
|
|
|
BY E-MAIL
sendmaterial@proxyvote.com
To request materials by e-mail, send a blank e-mail with your 16-digit Control Number in the subject line.
|
ELECTRONIC DELIVERY
We encourage our shareholders to sign up for electronic delivery of proxy materials. Shareholders of record can sign up for electronic delivery of materials while
casting their vote online or by accessing their shareholder account with our transfer agent, Broadridge Corporate Issuer Solutions, Inc. Beneficial owners should check with their broker or bank for availability of electronic delivery.
2020 PROXY STATEMENT
|
70
|
ANNUAL REPORT ON FORM 10-K
Our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC, including the financial statements, financial statement schedules and all exhibits may be
obtained from our website by visiting http://ir.maac.com/SEC-Filings. Information from our website is not incorporated by reference into this Proxy Statement. You can also obtain a copy, free of charge, by writing our Investor Relations Department at
MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138 or by calling (866) 576-9689.
HOUSEHOLDING
The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials with respect to two or more shareholders sharing
the same address by delivering a single Notice of Internet Availability addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for
companies.
We and some brokers household proxy materials, delivering one copy of proxy materials to multiple shareholders sharing an address, unless contrary instructions have
been received from the affected shareholders, and we undertake to deliver promptly upon written or oral request a separate copy of proxy materials to shareholders sharing an address to which a single copy of proxy materials was delivered. Once you have
received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If you did not respond that you did not want to
participate in householding, you were deemed to have consented to householding. If at any time you no longer wish to participate in householding and would prefer to receive separate proxy materials, or if you are receiving multiple copies of proxy
materials and wish to receive only one, please do one of the following: (i) mark the appropriate box on your proxy card if you hold registered shares or notify your broker if your shares are held in a brokerage account; or (ii) notify us in writing at
MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138, Attention: Corporate Secretary.
We can only household registered shares. If you own registered shares as well as hold shares in a brokerage account, you will continue to receive multiple
copies of proxy materials. Similarly, if you own shares in more than one brokerage firm, you can only household the proxy materials you receive within each individual brokerage house.
If you receive more than one Notice of Internet Availability you must follow the instructions on each to ensure that all of your shares are represented and
voted.
MATTERS RELATED TO THE 2021 ANNUAL MEETING OF SHAREHOLDERS
SHAREHOLDER PROPOSAL REQUIREMENTS FOR THE 2021 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who wish to submit proposals for inclusion in our proxy materials to be furnished to shareholders in connection with our 2021 Annual Meeting of
Shareholders (other than proxy access director nominations) must comply with our bylaws and all applicable requirements of Rule 14a-8 promulgated under the Securities and Exchange Act of 1934, as amended, or the Exchange Act. To be considered timely
for inclusion in our proxy materials furnished by us to shareholders, such proposals must be sent to the Nominating and Corporate Governance Committee, Attention: Corporate Secretary, MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138 and
be received no later than the close of business on December 8, 2020.
Shareholders may also directly submit proposals at our 2021 Annual Meeting of Shareholders, including proposals to nominate their own persons for election
as directors by our shareholders. Our bylaws provide requirements for ownership and certain procedures that a shareholder must follow to make their own nominations of persons for election as directors, or to submit other business, at an annual meeting
of shareholders that is not included in our proxy materials. Pursuant to our bylaws, shareholders wishing to submit proposals or director nominations that are not to be included in our proxy materials must give timely notice thereof in writing to our
Corporate Secretary that contains all of the information required by our bylaws and prepare their own proxy materials for our shareholders. To be timely for the 2021 Annual Meeting of Shareholders, you must submit such proposals or nominations to our
Corporate Secretary, in writing, no later than the close of business on February 18, 2021 and no earlier than the close of business on January 19, 2021.
|
2020 PROXY STATEMENT
|
71
|
We also advise you to review our bylaws, which contain additional requirements about advance notice of shareholder proposals and director nominations,
including different notice submission date requirements in the event we do not hold our 2021 Annual Meeting of Shareholders between April 19, 2021 and July 18, 2021. The Chairman of the 2021 Annual Meeting of Shareholders may determine, if the facts
warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting. In addition, the proxy solicited by the Board for the 2021 Annual Meeting of Shareholders will confer discretionary voting
authority with respect to any matter presented by a shareholder at that meeting for which we have not been provided with timely notice. Shareholder proposals must be sent to Attention: Corporate Secretary, MAA, 6815 Poplar Avenue, Suite 500,
Germantown, Tennessee 38138.
PROXY ACCESS NOTICE REQUIREMENTS FOR THE 2021 ANNUAL MEETING OF SHAREHOLDERS
Our bylaws require eligible shareholders to give advance notice of any proxy access director nomination. The required notice, which must include the information and
documents set forth in our bylaws, must be given no less than 120 days prior to the anniversary of the date of the proxy statement for the prior year’s annual meeting of shareholders. Accordingly, to be timely for the 2021 Annual Meeting of
Shareholders, our Corporate Secretary must receive the required notice no later than December 8, 2020. Notice must be sent to Attention: Corporate Secretary, MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138.
We advise you to review our bylaws, which contain additional requirements regarding advance notice of proxy access director nominations, including different notice
submission date requirements in the event we do not hold our 2021 Annual Meeting of Shareholders between April 19, 2021 and July 18, 2021. A copy of our bylaws can be found on the SEC website (https://www.sec.gov) as Exhibit 3.2(i) to the Form 8-K
which was filed on March 14, 2018.
VOTING INFORMATION
SHAREHOLDERS ENTITLED TO VOTE
Only shareholders of record at the close of business on the record date, March 13, 2020, are entitled to receive notice of the Annual Meeting and to vote
the shares that they held on the record date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. The only class of stock that can be voted at the Annual Meeting is our common stock. Each share of common stock is entitled to
one vote on all matters that come before the Annual Meeting. As of the close of business on March 13, 2020, we had 114,279,659 shares of common stock outstanding.
BENEFICIAL OWNERS: SHARES REGISTERED IN THE NAME OF A BROKER OR BANK
If on March 13, 2020 your shares were held in an account at a brokerage firm, bank, dealer or similar organization, then you are the beneficial owner of
shares held in “street name” and proxy materials are provided to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the
right to direct your broker or other agent on how to vote the shares in your account.
MAA EMPLOYEE STOCK OWNERSHIP PLAN
If you had shares in an account under our Employee Stock Ownership Plan on March 13, 2020, you have the right to vote the shares in your account.
SOLICITATION OF PROXIES
MAA is soliciting proxies, and your vote is very important. For this reason, our Board requests that you allow your shares to be represented at the Annual Meeting by
the proxies named on your Proxy Card or Voter Instruction Form.
We will bear the entire cost of soliciting proxies. In addition to soliciting proxies through the Notice of Internet Availability, our directors and employees may
also solicit proxies in person, by phone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of
providing proxy materials to beneficial owners.
|
2020 PROXY STATEMENT
|
72
|
HOW TO VOTE
You may vote by proxy in advance of the Annual Meeting or vote in person at the Annual Meeting by following the below instructions. We encourage you to vote in advance of the Annual
Meeting even if you plan to attend.
|
VOTE IN ADVANCE
Vote by proxy in advance of the Annual Meeting by utilizing one of the below methods.
|
|
ONLINE
www.ProxyVote.com
|
You
will need your 16-digit Control Number which can be found on the Notice of Internet Availability, Proxy Card or Voter Instruction Form. Some Beneficial Owners may not be issued a 16-digit Control Number. Those owners should follow the
instructions provided on their Voter Instruction Form from their bank or broker.
|
|
|
BY PHONE
800-690-6903
|
|
|
BY MAIL
Properly complete, sign, date and return your Proxy Card or Voter Instruction Form in the postage-paid envelope provided.
|
|
|
|
VOTE AT THE ANNUAL MEETING
Vote in person at the Annual Meeting by meeting the following requirements.
|
|
|
IN PERSON
You may vote in person with a valid photo identification and ticket obtained from registering in advance to attend the Annual Meeting.
|
SPECIAL NOTE FOR BENEFICIAL OWNERS: The Voter Instruction Form you received is not sufficient to vote beneficial shares in person at the Annual Meeting. You must contact your
broker or bank and let them know you wish to vote in person at the Annual Meeting. They will provide you with appropriate documentation.
|
CHANGING YOUR VOTE
If you vote by proxy in advance of the Annual Meeting, you can revoke your proxy at any time before the final vote at the Annual Meeting. Follow the voting
instructions to change your vote.
CASTING OF VOTES
If you submit a valid proxy through one of the avenues listed in the How to Vote section of this Proxy Statement, your votes will be cast as you indicate. If
you submit a properly executed Proxy Card without marking your voting selections, your shares will be voted per our Board recommendations FOR all director nominees and proposals contained within this Proxy Statement.
If any additional matters are properly presented at the Annual Meeting, your proxy (one of the individuals named on your proxy card) will vote your shares
as recommended by the Board or, if no recommendation is given, in accordance with his or her best judgment. Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For”, “Against” and “Abstain”
votes.
In the event that a broker, bank, custodian, nominee or other record holder of our common stock indicates on a proxy that it does not have discretionary
authority to vote certain shares on a particular matter, then those shares will be treated as broker non-votes.
VOTES REQUIRED TO APPROVE PROPOSALS
For each proposal, votes cast FOR the director nominee or proposal must exceed the votes cast AGAINST the director nominee or proposal for the director nominee to be
elected or the proposal to be approved.
Neither abstentions nor broker non-votes will have any legal effect on whether the director nominee is elected or the proposal is approved.
|
2020 PROXY STATEMENT
|
73
|
If a director nominee is an incumbent director and fails to receive more FOR votes than AGAINST votes, the director is required to tender his or her resignation to
the Nominating and Corporate Governance Committee of the Board for consideration, and the Nominating and Corporate Governance Committee will determine whether it is advisable to accept or reject the resignation and will submit a recommendation to the
Board for consideration.
The vote to approve executive compensation is an advisory, non-binding vote, and the Compensation Committee will consider the results of the vote for any immediate
action it deems necessary as well as in setting future executive compensation.
Shareholder approval for the appointment of our independent registered public accounting firm is not required. The Board is submitting the selection of Ernst &
Young LLP for ratification in order to obtain the views of our shareholders. The Audit Committee will consider a vote against the firm by the shareholders in selecting our independent registered public accounting firm in the future.
VOTING RESULTS
Preliminary voting results will be announced at the Annual Meeting. We will file the final results of the vote on a Current Report on Form 8-K with the SEC within
four business days of the Annual Meeting. Once filed, you will be able to access the Current Report on Form 8-K on our website by visiting http://ir.maac.com/SEC-Filings. Information from our website is not incorporated by reference into this Proxy
Statement.
QUESTIONS
If you have any questions about the Annual Meeting, these proxy materials or your ownership of our common stock, please contact our Legal Department at 6815
Poplar Avenue, Suite 500, Germantown, Tennessee 38138, or email investor.relations@maac.com or call (901) 682-6600.
NON-GAAP FINANCIAL MEASURES
FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with GAAP) excluding extraordinary items, asset
impairment and gains or losses on disposition of operating properties, plus net income attributable to noncontrolling interest, depreciation and amortization of real estate assets, and adjustments for joint ventures to reflect FFO on the same basis.
Because noncontrolling interest is added back, FFO, when used in this Proxy Statement, represents FFO attributable to MAA.
MAA believes that FFO is helpful in understanding operating performance in that FFO excludes depreciation and amortization of real estate assets. MAA believes that
GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.
While MAA's definition of FFO is in accordance with National Association of Real Estate Investment Trust's definition, it may differ from the methodology for
calculating FFO utilized by other companies and, accordingly, may not be comparable to such other companies.
FAD is composed of FFO less total capital expenditures, excluding development spending and property acquisitions. As an owner and operator of real estate, MAA
considers FAD to be an important measure of performance from core operations because FAD measures the ability to control revenues, expenses and total capital expenditures.
Neither FFO nor FAD should be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance.
|
2020 PROXY STATEMENT
|
74
|
A reconciliation of FFO and FAD to net income available for MAA common shareholders is set forth in the below table.
|
|
|
|
Year
|
|
Ended
|
|
December 31,
|
|
|
2018
|
|
2019
|
|
|
Dollars
|
|
Dollars
|
|
|
|
|
|
|
and Shares
|
|
and Shares
|
|
|
|
|
|
|
in Thousands
|
|
Thousands
|
|
Dollars per common shares and units as indicated
|
|
Net income available for MAA common shareholders
|
$
|
219,211
|
|
$
|
350,123
|
|
|
3.07
|
|
Per weighted average common shares - diluted
|
|
Depreciation and amortization of real estate assets
|
|
484,722
|
|
|
490,632
|
|
|
|
|
|
|
(Gain) loss on sale of depreciable real estate assets
|
|
39
|
|
|
(80,988
|
)
|
|
|
|
|
|
Depreciation and amortization of real estate assets of real estate joint venture
|
|
595
|
|
|
618
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
8,123
|
|
|
12,807
|
|
|
|
|
|
|
Funds from operations attributable to MAA, or FFO
|
|
712,690
|
|
|
773,192
|
|
$
|
6.55
|
|
Per FFO weighted average common shares and units - diluted
|
|
Embedded derivative - Series I Preferred Stock
|
|
2,576
|
|
|
(17,886
|
)
|
$
|
(0.15
|
)
|
Per FFO weighted average common shares and units - diluted
|
|
2019 AIP plan defined FFO
|
|
715,266
|
|
|
755,306
|
|
$
|
6.40
|
|
2019 AIP plan defined FFO per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - diluted
|
|
113,836
|
|
|
114,113
|
|
|
|
|
|
|
FFO weighted average common shares and units - diluted
|
|
117,948
|
|
|
118,127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available for MAA common shareholders
|
$
|
219,211
|
|
$
|
350,123
|
|
|
|
|
|
|
Depreciation and amortization of real estate assets
|
|
484,722
|
|
|
490,632
|
|
|
|
|
|
|
(Gain) loss on sale of depreciable real estate assets
|
|
39
|
|
|
(80,988
|
)
|
|
|
|
|
|
Depreciation and amortization of real estate assets of real estate joint venture
|
|
595
|
|
|
618
|
|
|
|
|
|
|
Net income attributable to noncontrolling interests
|
|
8,123
|
|
|
12,807
|
|
|
|
|
|
|
Funds from operations attributable to MAA, or FFO
|
|
712,690
|
|
|
773,192
|
|
|
|
|
|
|
Recurring capital expenditures
|
|
(71,960
|
)
|
|
(72,781
|
)
|
|
|
|
|
|
Redevelopment capital expenditures
|
|
(55,148
|
)
|
|
(58,199
|
)
|
|
|
|
|
|
Revenue enhancing capital expenditures
|
|
(30,910
|
)
|
|
(32,871
|
)
|
|
|
|
|
|
Commercial capital expenditures
|
|
(8,150
|
)
|
|
(7,075
|
)
|
|
|
|
|
|
Other capital expenditures
|
|
(31,417
|
)
|
|
(19,280
|
)
|
|
|
|
|
|
Funds available for distribution
|
|
515,105
|
|
|
582,986
|
|
|
|
|
|
|
Embedded derivative - Series I Preferred Stock
|
|
2,576
|
|
|
(17,886
|
)
|
|
|
|
|
|
2019 LTIP plan defined FAD
|
$
|
517,681
|
|
$
|
565,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER MATTERS
Our Board of Directors, at the time of the preparation of this Proxy Statement, knows of no business to come before the meeting other than that referred to herein. If
any other business should come before the meeting, the person(s) named on the proxy card will have discretionary authority to vote all proxies as recommended by the Board of Directors or, if no recommendation is given, in accordance with their best
judgment.
|
|
BY ORDER OF THE BOARD OF DIRECTORS
|
|
|
|
|
|
Leslie B.C. Wolfgang
|
|
|
Senior Vice President, Chief Ethics and Compliance Officer, and Corporate Secretary
|
|
|
|
April 7, 2020
|
2020 PROXY STATEMENT
|
75
|
|
Mid-America Apartment Communities, Inc.
MAA
6815 Poplar Avenue
Suite 500
Germantown, Tennessee 38138
www.maac.com
|
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