tm223531-1_def14a - none

DEF 14A 1 tm223531-1_def14a.htm DEF 14A tm223531-1_def14a - none - 9.7812741s

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:

☐

Preliminary Proxy Statement

☐

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒

Definitive Proxy Statement

☐

Definitive Additional Materials

☐

Soliciting Material under §240.14a-12

STAG Industrial, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

☒

No fee required.

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Fee paid previously with preliminary materials.

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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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One Federal Street, 23rd Floor
Boston, Massachusetts 02110

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 2, 2022

To our stockholders:

You are cordially invited to attend the 2022 annual meeting of the stockholders of STAG Industrial, Inc., a Maryland corporation, that will be held on May 2, 2022, at 1:00 p.m., Eastern Time, in a virtual-only meeting format. You will be able to attend the annual meeting by visiting www.virtualshareholdermeeting.com/STAG2022. Please follow the instructions in this proxy statement to join the virtual annual meeting.

At the meeting, stockholders will consider and vote on the following matters:

the election of nine directors to hold office until the 2023 annual meeting of stockholders and until their successors are duly elected and qualified;

the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2022; and

the approval, by non-binding vote, of our executive compensation.

In addition, stockholders will consider and vote on such other business as may properly come before the annual meeting, including any adjournments or postponements of the meeting.

If you owned shares of our common stock as of the close of business on March 10, 2022, you can vote those shares by proxy or at the virtual annual meeting. Pursuant to rules promulgated by the Securities and Exchange Commission (the “SEC”), we are providing access to our proxy materials over the internet. On or about March 23, 2022, we expect to mail our stockholders either (i) a copy of this proxy statement, the accompanying proxy card, our annual report and the notice of internet availability of proxy materials (the “Notice”) or (ii) the Notice only, each in connection with the solicitation of proxies by the board of directors for use at the annual meeting and any adjournments or postponements thereof. If you received only the Notice by mail, you will not receive a printed copy of the proxy materials other than as described herein. The Notice contains instructions for your use of this process, including how to access our proxy statement and annual report over the internet, how to authorize your proxy to vote online and how to request a paper copy of the proxy statement and annual report.

If you are unable to attend the meeting, it is very important that your shares be represented and voted at the annual meeting. You may authorize your proxy to vote your shares over the internet as described in the Notice. Alternatively, if you received a paper copy of the proxy card by mail, please complete, date, sign and promptly return the proxy card in the self-addressed stamped envelope provided. You also may vote by telephone as described in your proxy card. If you vote your shares over the internet, by mail or by telephone before the annual meeting, you may nevertheless revoke your proxy and cast your vote at the virtual annual meeting.

By order of the board of directors:

JEFFREY M. SULLIVAN
Executive Vice President, General Counsel and Secretary

Boston, Massachusetts
March 23, 2022

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	Page
PROXY SUMMARY		1
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING		8
PROPOSAL 1: ELECTION OF DIRECTORS		13
BOARD OF DIRECTORS AND ITS COMMITTEES		21
CORPORATE RESPONSIBILITY		32
EXECUTIVE OFFICER COMPENSATION DISCUSSION AND ANALYSIS		42
EXECUTIVE OFFICER COMPENSATION TABLES		58
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL		67
COMPENSATION COMMITTEE REPORT		72
AUDIT COMMITTEE REPORT		73
PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		74
PROPOSAL 3: ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION		76
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT		77
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS		79
OTHER MATTERS		79
APPENDIX A: DEFINITIONS AND NON-GAAP FINANCIAL MEASURES		A-1

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2022 ANNUAL MEETING OF STOCKHOLDERS

PROXY SUMMARY

2021 Business Highlights

We are a real estate investment trust (“REIT”) focused on the acquisition, ownership and operation of industrial properties throughout the United States. Our primary business objective is to own and operate a balanced and diversified industrial real estate portfolio that maximizes cash flows and enhances stockholder value over time. Our business strategy has resulted in a consistent track record of creating strong operational performance and long-term value for our stockholders.

		PROVEN AND STRATEGIC GROWTH PROFILE
		• Since our initial public offering in 2011, as of December 31, 2021, we have deployed approximately $6.9 billion of capital, representing the acquisition of 561 buildings totaling approximately 114.0 million rentable square feet. • During 2021, we acquired 74 buildings totaling approximately 12.9 million rentable square feet for a total purchase price of approximately $1.4 billion, including one building under development.
		5-Year Acquisition Volume

		• During 2021, we (i) raised equity capital of approximately $573.8 million through our “at-the-market” common stock offering program and follow-on common stock offerings (including net proceeds received upon physical settlement of certain forward sales agreements), (ii) sold 22 buildings for a total sales price of approximately $193.4 million, (iii) maintained two investment grade ratings from nationally recognized statistical rating agencies and (iv) paid a monthly dividend on shares of our common stock at an annualized rate of $1.449996 per share, which represents a dividend yield of approximately 3.0% based on the year-end closing stock price of $47.96.

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		TOTAL STOCKHOLDER RETURN AND FINANCIAL PERFORMANCE
		• We believe that the value creation produced from an investment in real estate should be assessed over a long-term period, and our strategy has focused on long-term value creation.
		Cumulative Total Stockholder Return (12/31/2018 through 12/31/2021)

		• We continue to execute on our operational goals and maintained strong occupancy during the year. As of December 31, 2021, we achieved an occupancy rate of 96.9% on the total portfolio and 97.4% on the operating portfolio. • As of and for the year ended December 31, 2021: ◦ Net income was approximately $196.4 million as compared to net income of approximately $206.8 million in 2020, a decrease of approximately 5.0%. These amounts included approximately $98.0 million and $135.7 million, respectively, of gain from sales of properties in 2021 and 2020. Excluding gain from sales of properties, our net income increased approximately 38.4% from 2020 to 2021. ◦ Funds from operations (“FFO”) was approximately $336.9 million as compared to FFO of approximately $291.1 million in 2020, an increase of approximately 15.7%.* ◦ Net operating income (“NOI”) was approximately $454.2 million as compared to NOI of approximately $394.1 million in 2020, an increase of approximately 15.2%.* • During 2021, we continued to increase our annual revenue by, among other matters, actively managing our portfolio, completing acquisitions in our robust investment pipeline and executing build-to-suit transactions.
		5-Year Annual Revenue & Year-Over-Year Revenue Growth

		* FFO and NOI meet the definition of “non-GAAP financial measures” as set forth in Item 10(e) of Regulation S-K promulgated by the Securities and Exchange Commission (“SEC”). Please refer to Appendix A attached hereto for an explanation of why our management considers these measures, the historical amounts of these two measures and a reconciliation of the measures to the nearest measure under generally accepted accounting principles (“GAAP”).

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Executive Compensation Highlights

We are proud of the way our employees continued to perform during the ongoing public health crisis of the novel coronavirus disease (“COVID-19”) pandemic. We succeeded due in large part to the stewardship and leadership of our executive management team, who executed successful strategies to drive strong operational performance, grow our portfolio, strengthen our balance sheet and increase stockholder value. Below are certain features of our executive compensation program, which reflect our commitment to a pay-for-performance compensation structure:

		✔ We pay for performance
		• Approximately 85% of our chief executive officer’s 2021 compensation was “at risk” compensation and strongly aligned with the interests of stockholders
		• Annual base salaries are intended to be less than 25% of total compensation
		• We do not guarantee annual base salary increases, but consider increases when merited

		✔ Our 2021 annual cash incentive bonuses encouraged executives to achieve short-term performance goals
		• Bonuses are based on company performance goals (80%) and individual performance goals (20%)
		• Our 2021 company performance goal components were Core FFO per Share (50%), Acquisition Volume (10%), Net Debt to Run Rate EBITDAre (10%) and Same Store Cash NOI Growth (10%)
		• We do not guarantee bonuses of a minimum amount (bonuses can be zero) and do not provide uncapped bonuses

		✔ Our 2021 equity awards encourage executives to achieve long-term performance goals
		• Performance units are based on our total stockholder return, defined as common stock price appreciation plus dividends, assuming reinvestment of dividends into additional shares of common stock (“TSR”), over a three-year period compared to both relative returns (TSR vs. three benchmarks) and an absolute return (we must achieve a cumulative 25% TSR for payouts above target on 50% of the performance units)
		• Performance units will have zero value (no payout) for performance below the 30th percentile
		• We target outperformance; target payouts under the performance units are archived at the 55th percentile

		✔ Stockholders have expressed support for our executive compensation practices
		• At the 2021 annual meeting of stockholders, approximately 96.8% of the votes cast in the say-on-pay vote were in favor

For more information, see “Executive Officer Compensation Discussion and Analysis” below.

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Snapshot of Corporate Governance Practices

The table below presents a snapshot of our corporate governance policies.

	Annual election of directors to the board of directors (the “board”)			✔
	Majority voting standard for the election of directors (with a director resignation policy)			✔
	Regular executive sessions of independent director

SEC Form DEF 14A filed by Stag Industrial Inc.