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. )
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Gaming and Leisure Properties, Inc.
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Notice of Annual Meeting of Shareholders of Gaming and Leisure Properties, Inc.
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The 2018 Annual Meeting of Shareholders of Gaming and Leisure Properties, Inc. (the Company or GLPI) will be held:
June 14, 2018
10:00 a.m. Eastern Time
At the offices of Ballard Spahr LLP
1735 Market Street, 48th Floor
Philadelphia, Pennsylvania 19103
The items of business are:
1. | To elect David A. Handler, Joseph W. Marshall, III, James B. Perry, Barry F. Schwartz, Earl C. Shanks and E. Scott Urdang as directors to hold office until the 2019 Annual Meeting of Shareholders and until their respective successors have been duly elected and qualified. |
2. | To ratify the appointment of Deloitte & Touche LLP as the Companys independent registered public accounting firm for the current fiscal year. |
3. | To approve, on a non-binding advisory basis, the Companys executive compensation. |
4. | To approve an amendment and restatement of the Companys Articles of Incorporation to adopt a majority voting standard in uncontested director elections. |
5. | To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof. |
Shareholders of record of the Companys common stock (NASDAQ: GLPI) as of the close of business on April 12, 2018 are entitled to vote at the meeting and any postponements or adjournments of the meeting.
By order of the Board of Directors,
Peter M. Carlino
Chairman of the Board of Directors
Wyomissing, Pennsylvania
April 26, 2018
Your Vote is Important
Please vote as promptly as possible by using the Internet or telephone or by signing, dating and returning the Proxy Card mailed to those who receive paper copies of this Proxy Statement.
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be Held on June 14, 2018: The Notice of Annual Meeting, Proxy Statement, and Annual Report to Shareholders for the year ended December 31, 2017 are available at www.proxydocs.com/glpi.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 1 |
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider and you should read the entire Proxy Statement before voting. For more complete information regarding the Companys 2017 performance, please review the Companys Annual Report to Shareholders for the year ended December 31, 2017.
ANNUAL MEETING OF SHAREHOLDERS
Time and Date |
Record Date | |
10:00 a.m. Eastern Time June 14, 2018 |
April 12, 2018 | |
Place Ballard Spahr LLP 1735 Market Street, 48th Floor Philadelphia, PA 19103 |
Number of Common Shares Eligible to Vote at the Meeting as of the Record Date: 213,745,319 | |
VOTING MATTERS
Matter |
Board Recommendation | Page Reference (for more detail) | |||||
Election of Directors |
FOR each director nominee | 9 | |||||
Ratification of Appointment of Deloitte & Touche LLP |
FOR | 51 | |||||
Non-Binding Advisory Vote to Approve Executive Compensation |
FOR | 52 | |||||
Amendment and Restatement of the Companys Articles of Incorporation to Adopt Majority Voting in Uncontested Director Elections |
FOR | 53 |
BOARD NOMINEES
The following table provides summary information about the director nominees. Directors are elected by a plurality of votes cast.
Director Since
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Committee Memberships* |
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Name, Age |
Principal Occupation | AC | NG | C | Other Public Company Boards | |||||||||
David A. Handler, 53 |
2013 | Partner, Centerview Partners |
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Penn National Gaming, Inc. | |||||||||
Joseph W. Marshall, III, 65 |
2013 | Vice Chairman of Stevens & Lee, PC, and Vice Chairman of Griffin Holdings, LLC |
(F) |
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SIGA Technologies, Inc. | |||||||||
James B. Perry, 68 |
2017 | Retired. Former Chairman and Chief Executive Officer of Isle of Capri Casinos, Inc. |
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Barry F. Schwartz, 68 |
2017 | Vice Chairman of MacAndrews & Forbes Inc. |
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Revlon, Inc. Scientific Games Corporation | ||||||||||
Earl C. Shanks, 61 |
2017 | Retired, Former Chief Financial Officer of Essendant, Inc. |
(F) |
Verint Systems Inc. | ||||||||||
E. Scott Urdang, 68 |
2013 | Retired. Former Founder, Chairman, and Chief Executive Officer of Center Square Capital Management, Inc. |
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2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 3 |
2017 PERFORMANCE HIGHLIGHTS
Top Performance
Total Shareholder Return(1) vs. CEO Total Direct Compensation(2)
(1) | Total shareholder return (TSR) assumes $100 invested at the close of trading on December 31, 2014 and the reinvestment of dividends. |
(2) | Total direct compensation refers to total compensation disclosed in the Summary Compensation Table minus the amount displayed in all other compensation. We exclude this amount because it does not reflect Compensation Committee decisions based on Company or individual performance. |
4 | | | Gaming & Leisure Properties Inc. |
Consistent Results
The Company has produced consistent increases in dividends and adjusted funds from operations (AFFO) since the spin-off from Penn National Gaming, Inc. in 2013.
(1) | December 31, 2014 excludes one-time dividends paid to shareholders of $11.84 and $0.40 per share paid on February 18, 2014 and December 19, 2014, respectively. |
(2) | AFFO and AFFO per share are non-GAAP financial measures. AFFO per share is calculated using the Companys outstanding number of shares on a fully diluted basis. AFFO is FFO as defined by the National Association of Real Estate Investment Trusts (net income, excluding gains or losses from sales of property and real estate depreciation) excluding stock based compensation expense, debt issuance costs amortization, other depreciation, amortization of land rights, straight-line rent adjustments and direct financing lease adjustments, reduced by maintenance capital expenditures. For a complete discussion of our financial performance in 2017 and additional information on non-GAAP financial measures presented in this Proxy Statement, please see our Annual Report on Form 10-K for the year ended December 31, 2017, a copy of which is included in the Annual Report to Shareholders made available to shareholders in connection with this Proxy Statement. |
EXECUTIVE COMPENSATION
GLPI Created the Unique Gaming REIT Segment
On November 1, 2013, GLPI emerged as a publicly traded company through a tax-free spin-off from Penn National Gaming, Inc. GLPI was the first triple-net REIT focused entirely on the ownership and leasing of gaming properties, establishing a new category of gaming REITs. This innovative approach ignited a wave of conversions that included some of the largest gaming companies in the industry MGM Resorts International, Caesars Entertainment and Pinnacle Entertainment, Inc. Today, there are three publicly traded gaming REITs, including GLPI.
GLPI differs from more traditional REITs in several key aspects:
Long-Term, Stable Master Leases |
Our master leases are long-term leases (up to 35 years) with established, profitable gaming operators as our tenants. Our master leases are also unitary leases that do not provide our tenants the ability to pick and choose locations on renewals or remove properties during the term. The result is dependable cash flow, stable dividends and very high occupancy rates.
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Significant Regulatory Oversight |
As a gaming REIT, we are subject to the jurisdiction and licensing of gaming regulatory agencies in several states. This has two significant impacts on our business: (1) licensing of officers, directors and entities is an onerous and intrusive process; and (2) acquisitions require approval by gaming regulators, which can take up to a year.
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Complex Transactions |
Gaming companies are typically held in corporate structures that require separation of assets into OpCo/PropCo structures in a manner that minimizes tax leakage and maximizes value. To do so in a manner that is accretive to shareholders requires solving complex accounting, tax and legal issues, as well as a thorough understanding of the underlying gaming business to avoid overpaying for assets that may under-perform in the long-term and adversely impact rent.
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Tenants Lack Alternative Locations |
The strict gaming regulatory structure makes it is difficult in most states, and impossible in others, for our tenants to relocate to a different location. In states where gaming regulators would permit the relocation of an existing gaming facility, the construction of new gaming facilities and in many cases, horse racing facilities is a capital intensive and time-consuming process. More importantly, at lease termination, tenants are required to sell operating assets to a licensed operator entering into a new long-term lease for the facilities rather than simply moving assets to another location.
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Limited Development Opportunities |
Many states limit the number of casino licenses. As a result, our ability to develop new properties is very limited.
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Operation of Gaming Facilities |
We operate two gaming facilities in Baton Rouge, Louisiana and Perryville, Maryland with over 700 employees operating in a highly regulated industry.
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2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 5 |
Success in this segment of the REIT industry requires a unique blend of gaming experience and the ability to solve complex accounting, legal and tax issues. The Compensation Committee has determined that compensating management using a REIT Global Industry Classification Standard (GICS) code is not applicable given the unique nature of GLPIs operations and the talent required to support the complex and unique nature of our business. The Compensation Committee designed the executive compensation program to attract and retain executive talent with the necessary experience in, and understanding of, gaming assets while recognizing that performance metrics should reflect the Companys operation as a triple-net REIT.
Here is how we have implemented this two-pronged approach:
(1) | offer base salaries competitive with the Companys gaming peers to attract and retain the unique skill sets necessary to appropriately value properties with revenues primarily derived from gaming operations; and |
(2) | offer performance-based compensation designed to drive shareholder value in the competitive REIT market. |
By focusing on the Companys gaming peers in establishing base salary and the Companys REIT peers in structuring performance incentives, we believe the compensation program is successful in attracting and retaining executive talent and driving shareholder value.
2017 Named Executive Officer Compensation
In 2017, the total potential compensation opportunity of the Companys CEO and other named executive officers (NEOs) consisted of the following:
The base salary of the Companys Chief Executive Officer, Peter M. Carlino, is competitive with the Companys gaming peers and has not been increased since 2012, which is the same salary he received as the Chief Executive Officer of Penn National Gaming, Inc. It is the Compensation Committees intention to continue with the policy of not increasing Mr. Carlinos base salary for the foreseeable future.
(1) | Base salary for the Companys Gaming Peers is for 2016 based on public disclosures in 2017 and the Companys CEO base salary is for 2017. |
6 | | | Gaming & Leisure Properties Inc. |
RESPONSIVE TO SHAREHOLDER CONCERNS
We have a strong track-record of responding to shareholder concerns. Since 2015, the Companys Board of Directors and Committees have taken shareholder concerns seriously and responded promptly.
Shareholder Concern |
Our Response
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2015
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Classified Board Structure |
Company proposal in 2016 to declassify the Board of Directors
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2016
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Performance Goals Not Focused on Triple-Net REITs
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Performance-Based Restricted Stock Awards granted after January 1, 2017 bifurcated with 50% measured against US MSCI REIT Index and 50% against triple-net REITs | |
Peer Group Lacks Triple-Net
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Peer group revised in 2017 to include a focus on triple-net REIT peers and gaming peers | |
2017
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Plurality Voting Standard |
Company proposal in 2018 to implement majority voting with a resignation policy in uncontested director elections
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Single Trigger Change of Control
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Amended the Companys 2013 Long-Term Incentive Compensation Plan to provide for double trigger acceleration of future awards in the event of a change of control
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Potential to Earn Maximum Awards with Negative TSR
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Performance-Based Restricted Stock Awards issued in 2018 are capped at target in the event of negative TSR for the performance period | |
Relative TSR Target Vesting at the 40th Percentile |
Revised our performance-based restricted stock award program to provide for relative TSR target vesting at the 50th percentile TSR level with minimum vesting at the 25th percentile, maximum vesting at the 75th percentile and linear vesting
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No Stock Ownership Guidelines |
Implementation of stock ownership guidelines for named executive officers and non-employee directors
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Limited Role of Lead Independent Director
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Role of the Lead Independent Director expanded in 2018
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2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 7 |
PROXY STATEMENT
FOR 2018 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 14, 2018
This Proxy Statement is furnished to you in connection with the solicitation of proxies for the Annual Meeting of Shareholders of Gaming and Leisure Properties, Inc. to be held on June 14, 2018 (the Annual Meeting), and any postponement or adjournment of the meeting.
The Annual Meeting will be held at the offices of Ballard Spahr LLP, 1735 Market Street, 48th Floor, Philadelphia, Pennsylvania 19103 at 10:00 a.m. Eastern Time.
On or about April 26, 2018, we will mail to each of our shareholders (other than those who previously requested electronic delivery or to whom we are mailing a paper copy) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials via the Internet and how to submit a proxy electronically using the Internet.
8 | | | Gaming & Leisure Properties Inc. |
PROPOSAL 1 ELECTION OF DIRECTORS
At our Annual Meeting, shareholders will elect six (6) directors to hold office until our 2019 Annual Meeting of Shareholders. The nominees were recommended and approved for nomination by our Nominating and Corporate Governance Committee. The directors will serve until their successors have been duly elected and qualified or until such directors earlier resignation or removal. Proxies cannot be voted for a greater number of persons than the number of nominees named. If you sign and return the accompanying proxy, your shares will be voted for the election of the nominees recommended by our Board of Directors, unless you mark the proxy in such a manner as to withhold authority to vote. If any of the nominees for any reason are unable to serve or will not serve, the proxies may be voted for such substitute nominees as the proxy holder may determine. We are not aware of any reason that the nominees will be unable to serve as a director.
David A. Handler, Joseph W. Marshall, III, James B. Perry, Earl C. Shanks, Barry F. Schwartz and E. Scott Urdang are being nominated for election to our Board of Directors to serve for a term through the 2019 Annual Meeting of Shareholders. We did not pay a fee to any third party to identify or evaluate any potential nominees.
Required Vote
Under the plurality voting standard, once a quorum has been established, each of the nominees receiving the highest number of affirmative votes of the shares entitled to be voted for him or her will be elected as a director to serve until the 2019 Annual Meeting of Shareholders and until his or her successor is duly elected and qualified. Votes withheld shall have no legal effect. At the Annual Meeting, proxies cannot be voted for more than the six (6) nominees named in this Proxy Statement. As a Pennsylvania corporation, the Companys directors are currently elected under a plurality voting standard. If Proposal No. 4 is approved by shareholders, the plurality voting standard will be changed to a majority voting standard with a resignation policy for future uncontested elections.
Brokers are not permitted to vote your shares for the election of directors absent instruction from you. Therefore, we urge you to give voting instructions to your broker on the proposal so that your votes may be counted on this important matter.
Our Directors
Our directors serve subject to the requirements of our charter and bylaws, including the requirement that directors not be unsuitable persons. Gaming laws require our directors to obtain licenses from gaming authorities. Licenses typically require a determination that the applicant qualifies or is suitable to hold the license. If one of our directors were to be determined to be an unsuitable person within the meaning of our charter, he or she would be subject to removal for cause by the remaining members of the Board of Directors or by shareholders with a vote of 75% of the votes cast at a shareholders meeting.
There are no family relationships among any of our directors or executive officers.
The following biographical information is furnished as to the nominees for election as a director and each of the continuing directors.
Nominees for Election to the Board of Directors for a One-year Term Expiring at the 2019 Annual Meeting
David A. Handler
AGE: 53
DIRECTOR SINCE: 2013
OTHER CURRENT PUBLIC BOARDS: Penn National Gaming, Inc. |
David A. Handler has served as a member of our Board of Directors since October 2013. Mr. Handler has also served as a director of Penn since 1994. In August 2008, Mr. Handler joined Centerview Partners, an independent financial advisory and private equity firm, as a Partner. From April 2006 to August 2008, he was a Managing Director at UBS Investment Bank. Prior to becoming a Managing Director at UBS Investment Bank, he was a Senior Managing Director at Bear Stearns & Co., Inc.
Mr. Handler brings to our Board of Directors experience in investment banking and capital markets that has included a focus on mergers and acquisitions and other significant transactions. The Board of Directors supports and approves Mr. Handlers nomination and continued service on our Board of Directors because his background is an invaluable asset to us, particularly in connection with evaluating potential acquisition and financing opportunities. | |||||
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 9 |
Joseph W. Marshall, III
AGE: 65
DIRECTOR SINCE: 2013
OTHER CURRENT PUBLIC BOARDS: SIGA Technologies, Inc. |
Joseph W. Marshall, III has served as a member of our Board of Directors since October 2013. Mr. Marshall has also served as the Vice Chairman of the law firm Stevens & Lee, PC and Vice Chairman of Griffin Holdings, LLC since February 2010. In addition to a number of other boards, including the Cancer Treatment Centers of American-Eastern Regional Medical Center and First Bank of Delaware, Mr. Marshall has served on the Board of Directors of SIGA Technologies, Inc. (NASDAQ) since 2009. From 2001 to 2008, Mr. Marshall served as the Chairman and CEO of Temple University Health System, one of the largest health care organizations in Pennsylvania. Mr. Marshall served as director of Health Partners, a provider-owned Medicaid/Medicare Health Maintenance Organization operating in Greater Philadelphia, from 2003 to 2008. Mr. Marshall also previously served on the Pennsylvania Gaming Control Board, Pennsylvania Ethics Commission and the Medicaid Commission created by Congress and established by the Honorable Michael O. Leavitt, Secretary of the U.S. Department of Health & Human Services. In addition, Mr. Marshall is a member of the Board of Trustees of Temple University and Salus University.
The Board of Directors supports and approves Mr. Marshalls nomination and continued service on our Board of Directors because of his extensive experience and knowledge of gaming regulation and his significant experience as a director and an executive in both the private and public sectors. | |||||
James B. Perry
AGE: 68
DIRECTOR SINCE: 2017
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James B. Perry was appointed to our Board of Directors in March 2017. Mr. Perry served on the Board of Directors of Isle of Capri Casinos, Inc. (Isle) from 2007 to 2014 and was named Chairman of the Board of Directors and Executive Chairman of the Board of Directors in 2009 and 2011, respectively. From March 2008 to April 2011, he served as Isles Chief Executive Officer. Prior to being named Chairman, Mr. Perry was Executive Vice Chairman from March 2008 to August 2009 and Vice Chairman from July 2007 to March 2008. Mr. Perry served as a Class III Director on the board of Trump Entertainment Resorts, Inc. from May 2005 until July 2007. From July 2005 to July 2007, Mr. Perry served as Chief Executive Officer and President of Trump Entertainment Resorts, Inc., which filed for Chapter 11 bankruptcy in February 2009. Mr. Perry was President of Argosy Gaming Company from April 1997 through July 2002 and Chief Executive Officer of Argosy Gaming Company from April 1997 through May 2003. Mr. Perry also served as a member of the Board of Directors of Argosy Gaming Company from 2000 to July 2005.
The Board of Directors supports and approves Mr. Perrys nomination because he brings more than 30 years of gaming industry experience to the Board of Directors. He also has extensive experience in executive management, corporate governance and strategic planning. | |||||
Earl C. Shanks
AGE: 61
DIRECTOR SINCE: 2017
OTHER CURRENT PUBLIC BOARDS: Verint Systems Inc. |
Earl C. Shanks was appointed to our Board of Directors in March 2017. Mr. Shanks served as Chief Financial Officer of Essendant Inc., a leading supplier of workplace essentials, from November 2015 through May 2017. Previously, Mr. Shanks served as the Chief Financial Officer at Convergys Corporation from 2003 until 2012. Prior to that, Mr. Shanks held various financial leadership roles with NCR Corporation, ultimately serving as the Chief Financial Officer, where he oversaw treasury, finance, real estate and tax. Additionally, Mr. Shanks has served as a director of Verint Systems Inc. since July 2012.
The Board of Directors supports and approves Mr. Shanks nomination because of his financial expertise and significant public company experience as both a Chief Financial Officer and director. |
10 | | | Gaming & Leisure Properties Inc. |
Barry F. Schwartz
AGE: 68
DIRECTOR SINCE: 2017
OTHER CURRENT PUBLIC BOARDS: Revlon, Inc. Scientific Games Corporation |
Barry F. Schwartz was appointed to our Board of Directors in May 2017. Mr. Schwartz has been Vice Chairman of MacAndrews & Forbes Incorporated and various affiliates since December 2015. Mr. Schwartz was Executive Vice Chairman of MacAndrews & Forbes Incorporated and various affiliates from October 2007 to December 2016. Prior to that, Mr. Schwartz was Executive Vice President and General Counsel of MacAndrews & Forbes Incorporated and various affiliates since 1993 and Senior Vice President of MacAndrews & Forbes Incorporated and various affiliates from 1989 to 1993. Mr. Schwartz is a director of Revlon, Inc., Revlon Consumer Products Corporation and Scientific Games Corporation. During the past five years, Mr. Schwartz also served as a director of Harland Clarke Holdings Corp. and M & F Worldwide Corp. Mr. Schwartz is a Trustee Emeritus and a former Chairman of the Board of Trustees at Kenyon College and formerly a member of the Georgetown University Law Center Board of Visitors. He also serves as the Vice Chairman of the Board of Trustees at the City University of New York (CUNY) and a trustee of the NYU Langone Medical Center, Jazz at Lincoln Center and the Perelman Performing Arts Center at The World Trade Center.
The Board of Directors supports and approves Mr. Schwartzs nomination and continued service on our Board of Directors because of his extensive experience in the areas of mergers and acquisitions, legal and compliance through his service as a senior executive in a large, diversified holding company. Additionally, in connection with his role at MacAndrews & Forbes, Mr. Schwartz serves as a director of several public and private portfolio companies, which offers valuable alternative perspectives. | |||||
E. Scott Urdang
AGE: 68
DIRECTOR SINCE: 2013
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E. Scott Urdang has served as a member of our Board of Directors since October 2013. Mr. Urdang, who retired in 2012, was the founder, Chief Executive Officer and Chairman of Urdang Capital Management (now Center Square Capital Management, Inc.), a wholly-owned subsidiary of BNY Mellon. Center Square Capital Management is an investment management company that manages and participates in public, private, global, and US-only real estate investment strategies. Mr. Urdang founded the company in 1987 and at the time of his retirement it had in excess of $5 billion under management. From 1984 to 1987, Mr. Urdang was a Partner at Laventhol and Horwath, a national consulting and accounting firm, where he served as regional partner in charge of real estate consulting with national responsibility for its pension consulting practice. Mr. Urdang also has experience as a Vice-President of Finance of a large regional development company that was involved in residential subdivisions, office buildings, apartments and shopping centers. Mr. Urdang has twenty (20) years of experience teaching both undergraduate and graduate courses in economics, corporate finance, and real estate finance and investment analysis at the Wharton School of the University of Pennsylvania.
The Board of Directors supports and approves Mr. Urdangs nomination and continued service on our Board of Directors because of his extensive experience, comprehensive knowledge and strong record of success in the real estate industry as an investor, developer, entrepreneur, and professor. |
The Board of Directors Recommends a Vote for the Election of the Nominated Directors.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 11 |
Member of the Board of Directors Continuing in Office for a Term Expiring at the 2019 Annual Meeting
Peter M. Carlino
AGE: 71
DIRECTOR SINCE: 2013
OTHER CURRENT PUBLIC BOARDS: Penn National Gaming, Inc. |
Peter M. Carlino has been the Chairman of our Board of Directors and our Chief Executive Officer since our inception in February 2013. Mr. Carlino has served as the Chairman of the Board of Directors of Penn since April 1994 and served as Chief Executive Officer of Penn from 1994 until October 2013. Since 1976, Mr. Carlino has served in an executive capacity for Carlino Capital Management Corp. and is currently the Chairman of the Board and Chief Executive Officer. Carlino Capital Management Corp. is a holding company that owns and operates various Carlino family businesses, and Mr. Carlino has been continuously active in its strategic planning and monitoring the operations. Mr. Carlino has served as the Chairman of Penns Board of Directors since 1994 and as Chief Executive Officer for Penn, and now the Company, collectively for over 20 years.
Mr. Carlino brings to our Board of Directors extensive management experience, critical knowledge of our properties and knowledge and understanding of the gaming industry in general. Moreover, as one of the largest beneficial owners of our common stock, his interests are significantly aligned with our efforts to enhance long-term shareholder value. |
12 | | | Gaming & Leisure Properties Inc. |
2017 Committee Membership
NAME |
AUDIT AND COMPLIANCE |
COMPENSATION AND GOVERNANCE | ||
Peter M. Carlino |
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David A. Handler |
● | Chair | ||
Joseph W. Marshall, III |
Chair | |||
E. Scott Urdang |
● | ● | ||
Earl C. Shanks |
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James B. Perry |
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Barry F. Schwartz |
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Number of Committee Meetings Held in 2017 |
8 | 4 |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 13 |
DIRECTOR COMPENSATION
The Company paid director compensation in 2017 to each director who is not an employee of the Company as shown in the table below.
Schedule of Director Compensation for 2017 | ||
Annual Cash Retainer
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$100,000
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Annual Restricted Stock Award
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Restricted Stock valued at $175,000
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Committee Chair Retainer
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$30,000 for the Audit and Compliance Committee
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$25,000 for the Compensation and Governance Committee
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Committee Member Retainer
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$15,000 for the Audit and Compliance Committee
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$12,500 for the Compensation and Governance Committee
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14 | | | Gaming & Leisure Properties Inc. |
The following table sets forth information on the compensation of all our non-employee directors for 2017:
2017 Compensation |
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Name | Fees Earned or Paid in Cash ($)(1) |
Stock Awards (#)(2) |
Stock Awards ($)(2) |
Total ($) |
Unvested Stock Awards (#)(3) |
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David A. Handler |
140,000 | 5,716 | 175,024 | 320,740 | 11,017 | |||||||||||||||
Joseph W. Marshall, III |
130,000 | 5,716 | 175,024 | 310,740 | 11,017 | |||||||||||||||
E. Scott Urdang |
127,500 | 5,716 | 175,024 | 308,240 | 11,017 | |||||||||||||||
Earl C. Shanks(4) |
83,333 | 5,647 | 175,001 | 258,334 | 5,647 | |||||||||||||||
James B. Perry(4) |
75,000 | 5,201 | 175,014 | 250,014 | 5,201 | |||||||||||||||
Barry F. Schwartz(4) |
58,333 | 4,804 | 175,010 | 233,343 | 4,804 |
(1) | Cash fees include annual directors retainer and, where applicable, committee fees. |
(2) | The amounts listed above are calculated based on the closing price on the day prior to grant date. |
(3) | Represents unvested restricted stock awards outstanding as of December 31, 2017 for grants 2017 and prior. |
(4) | Mr. Shanks, Mr. Perry and Mr. Schwartz were appointed to the Companys Board of Directors and received pro-rated compensation for 2017. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 15 |
16 | | | Gaming & Leisure Properties Inc. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 17 |
COMPENSATION DISCUSSION AND ANALYSIS
The Compensation and Governance Committee, which was reorganized as the Compensation Committee effective March 9, 2018, is responsible for the Companys executive compensation program. For purposes of the following Compensation Discussion and Analysis, the terms Committee or we or our refer to the Compensation and Governance Committee of the Board.
The following Compensation Discussion and Analysis (CD&A) describes our compensation philosophy, objectives and policies and how these are reflected in the compensation program for our named executive officers. Our named executive officers for 2017 were:
Name |
Title | |
Peter M. Carlino | Chairman, Chief Executive Officer and President | |
William J. Clifford | Senior Vice President, Chief Financial Officer and Treasurer | |
Steven T. Snyder | Senior Vice President, Corporate Development | |
Brandon J. Moore | Senior Vice President, General Counsel and Secretary | |
Desiree A. Burke | Senior Vice President and Chief Accounting Officer |
CD&A Quick Reference Guide
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24 | ||||
25 | ||||
25 | ||||
28 | ||||
31 | ||||
34 | ||||
34 | ||||
35 | ||||
36 | ||||
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43 |
18 | | | Gaming & Leisure Properties Inc. |
Unique Nature of Gaming REITs
On November 1, 2013, GLPI emerged as a publicly traded company through a tax-free spin-off from Penn National Gaming, Inc. (Penn). GLPI was the first triple-net REIT focused entirely on the ownership and leasing of gaming properties, establishing a new category of gaming REITs that now consists of three public companies. As gaming companies have recognized the tremendous value created by the concept of a gaming REIT, GLPI has grown from 21 properties at the time of our spin-off from Penn, to 38 properties in 14 states today.
The Companys high quality, geographically-diversified portfolio of gaming properties as well as stable and predictable cash flow from long-term triple-net master leases with significant fixed components, create a business model that is unique in comparison to other publicly-traded REITs.
Our Competitors and Our Talent Pool
GLPI is structured as a REIT focused on the acquisition and leasing of gaming properties. The management of our Company requires a specialized skill set with specific knowledge of the gaming industry. Due to the unique nature of our business among REITs, it is difficult to determine the Companys direct competitors. There is a disconnect between the companies with whom our stock trades REITs and the companies with whom we compete for talent and assets gaming companies. The Committee has determined that compensating management using a REIT Global Industry Classification Standard (GICS) code is not applicable given the unique nature of GLPIs operations and the talent required to support the complex and unique nature of our business. The Compensation Committee designed the executive compensation program to attract and retain executive talent with the necessary experience in, and understanding of, gaming assets while recognizing that performance metrics should reflect the Companys operation as a triple-net REIT.
As a result, using a more holistic view of our business, we define our competitors as the companies with whom we compete for talent and assets gaming operators and the companies with whom we compete for investors gaming REITs and triple-net lease REITs.
While Gaming REITs are considered our most direct competitor, there are only three gaming REITs: (1) GLPI; (2) MGM Growth Properties (created by MGM Resorts International); and (3) VICI Properties (emerged from the Caesars Entertainment bankruptcy). MGM Growth Properties and VICI Properties each have unique aspects that make comparison difficult:
GLPI | MGP | VICI | ||||
Independent Ownership from Tenant(s) |
✓
|
×
|
✓
| |||
No Reliance on Tenant for Services |
✓
|
×
|
✓
| |||
Manages Casino Operations |
✓
|
×
|
×
| |||
Multiple Tenants |
✓
|
×
|
×
| |||
Multiple Years of Operating History |
✓
|
✓
|
×
|
How Our Compensation Program is Aligned with Our Unique Business Model
We are focused on attracting and retaining executives with the knowledge and experience to grow shareholder value in our unique structure and operating environment and to lead the Company in an increasingly competitive business. With this as our goal, the Committee carefully designed the Companys compensation program with the assistance of our compensation consultant, FTI Consulting, Inc., to attract and retain the talent necessary to drive growth in a REIT structure through the acquisition of gaming assets.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 19 |
Focusing on the need to retain executives with experience in, and understanding of, gaming assets, the Committee has aligned the current named executive officers base pay with their peers in the gaming industry. The base compensation of our Chief Executive Officer is competitive among our gaming peers:
(1) | Base salary for the Companys gaming peers is for 2016 based on public disclosures in 2017 and the Companys CEO base salary is for 2017. |
Recognizing that the Companys stock performance is strongly correlated with REITs, the Committee established performance goals for our cash bonus program and performance-based restricted stock awards designed to drive shareholder value, including:
∎ | a cash bonus program primarily tied to the stability and growth of AFFO, dividends and acquisition goals; and |
∎ | performance-based restricted stock awards tied to the Companys performance measured against the broad US MSCI REIT index generally and triple-net REITs specifically. |
These two components of at risk compensation represent a significant portion of managements total compensation opportunity:
|
|
By focusing on the Companys gaming peers in establishing base salary and the Companys REIT peers in establishing performance goals, we believe the compensation program is successful in attracting and retaining a talented management team capable of driving shareholder value.
Executive Compensation Highlights
In structuring the Companys executive compensation program for 2017 and 2018, the Committees primary objective was to align pay with performance while taking into consideration the performance of the Company over the past two years, the complicated structuring and tax issues encountered in acquiring gaming assets, shareholder feedback, industry and general market trends in compensation practices, as well as the advice and recommendations of our independent compensation consultant.
20 | | | Gaming & Leisure Properties Inc. |
Highlights of our overall executive compensation program are outlined below, with details of the overall executive compensation program discussed more fully throughout the CD&A:
Meaningful Shareholder Outreach |
✓ Our shareholder outreach efforts have resulted in numerous changes to our compensation program and corporate governance structure in response to concerns, including:
∎ Amending the equity plan to provide for double trigger vesting acceleration upon change in control
∎ Capping performance-based stock awards if TSR is negative for the performance period
∎ Substituting linear vesting for vesting tranches and setting target payout at the 50th percentile for performance-based stock awards
∎ Adding stock ownership guidelines for named executive officers and non-employee directors | |
Use of Formulaic Incentive Compensation |
✓ 90% of annual performance cash bonus payments are tied to the achievement of pre-determined quantitative performance goals, including AFFO, dividends and acquisitions | |
✓ 80% of stock awards granted for equity compensation continue to be at-risk and are contingent upon the Company achieving rigorous total shareholder return hurdles over a three-year performance period | ||
Pay for Performance |
✓ Rigorous performance goals for cash bonus require exceptional results for maximum payment. Executives have not earned maximum payments in any year since the spin-off despite top quartile performance | |
✓ 90% of cash bonus and 80% of total equity awards are tied to performance goals | ||
✓ Maximum payout for performance-based equity awards requires top quartile performance over a three-year period | ||
Robust Governance Practices |
✓ Cash bonus subject to maximum cap based on percentage of base salary | |
✓ Share ownership guidelines for executive officers and non-employee directors | ||
✓ Clawback policy to recover incentive compensation under certain circumstances | ||
✓ Anti-hedging policy that prohibits trading in puts, calls, options or other derivative instruments derived from the value of the Companys stock |
Shareholder Outreach
The Companys shareholder base has changed dramatically since its spin-off from Penn in 2013 when shareholders were predominately gaming investors. Today, the Companys largest shareholders are REIT and index-oriented institutional investors. With the change in the composition of our shareholders, the concerns of shareholders have changed and the Company has listened and responded.
In 2016, the Company voluntarily changed the frequency of our say-on-pay advisory vote to be conducted annually. Accordingly, the Company presented a shareholder advisory vote on executive compensation at GLPIs 2017 Annual Meeting of Shareholders with 73.7% of the voted shares approving such advisory vote. We engage in periodic discussions with our shareholders throughout the year and during 2017 made meaningful changes to our corporate governance structure and compensation programs as a result. Our 2017 shareholder outreach efforts are summarized below:
∎ | Spring 2017 In connection with the distribution of the proxy materials for the 2017 Annual Meeting of Shareholders, we reached out to our top 20 shareholders to discuss questions and concerns related to specific proposals presented in the Companys proxy materials. Members of management and directors were offered as participants. |
∎ | Fall 2017 We broadened our outreach efforts to include not only the top 20 shareholders, but also significant shareholders that either withheld votes or voted against the recommendations of the Board. The Board believes that it is important to understand the reasons why shareholders choose not to support certain of the Boards recommendations and to discuss the Companys governance structure and initiatives that shareholders would like the Board to consider in the upcoming year. Members of management and directors were offered as participants. |
∎ | General 2017 Our Chief Executive Officer and Chief Financial Officer participated in both REIT and gaming investor conferences and meetings throughout 2017. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 21 |
Our Responses to Shareholder Feedback
As a result of discussions with shareholders, we made the following changes to our corporate governance and executive compensation programs for 2018:
Shareholder Concern |
Our Response | |
Corporate Governance | ||
Plurality Voting Standard |
Company proposal to implement majority voting with a resignation policy in uncontested director elections to be presented at 2018 Annual Meeting | |
Single Trigger Change of Control |
Amended the Companys 2013 Long-Term Incentive Compensation Plan to provide for double trigger acceleration of awards in the event of a change of control | |
No Stock Ownership Guidelines |
Implementation of stock ownership guidelines for named executive officers and non-employee directors, including requirement that CEO hold 5 times base salary, which is in excess of $9 million | |
Limited Role of Lead Independent Director |
Role of the Lead Independent Director expanded in 2018 | |
Compensation | ||
Potential to Earn Maximum Awards with Negative TSR |
Performance-Based Restricted Stock Awards issued in 2018 are capped at target in the event of negative TSR for the performance period | |
Relative TSR Target Vesting at 40% Percentile |
Revised our performance-based restricted stock award program to provide for relative TSR target vesting at the 50th percentile TSR with minimum vesting at 25th percentile, maximum vesting at 75th percentile | |
Vesting Tranches for Performance-Based Restricted Stock Awards |
Revised our performance-based restricted stock award program to calculate payout based on linear interpolation for performance in between each payout level |
2017 Highlights
GLPIs disciplined approach to acquisitions and careful capital management led to increased shareholder value and continued strong financial performance in 2017.
One-Year TSR |
Three-Year TSR |
|||||||
GLPI |
29.67 | % | 56.59 | % | ||||
MSCI US REIT (RMS) |
5.07 | % | 16.98 | % | ||||
Triple-Net Lease REITs |
5.95 | % | 31.88 | % |
22 | | | Gaming & Leisure Properties Inc. |
(1) | December 31, 2014 excludes one-time dividends paid to shareholders of $11.84 and $0.40 per share paid on February 18, 2014 and December 19, 2014, respectively. |
(2) | AFFO and AFFO per share are non-GAAP financial measures. AFFO per share is calculated using the Companys outstanding number of shares on a fully diluted basis. AFFO is FFO as defined by the National Association of Real Estate Investment Trusts (net income, excluding gains or losses from sales of property and real estate depreciation) excluding stock based compensation expense, debt issuance costs amortization, other depreciation, amortization of land rights, straight-line rent adjustments and direct financing lease adjustments, reduced by maintenance capital expenditures. For a complete discussion of our financial performance in 2017 and additional information on non-GAAP financial measures presented in this Proxy Statement, please see our Annual Report on Form 10-K for the year ended December 31, 2017, a copy of which is included in the Annual Report to Shareholders made available to shareholders in connection with this Proxy Statement. |
Executive Pay vs. Company Performance
Following the spin-off from Penn in 2013, the Companys named executive officers transitioned to the Company at the same base pay in effect at the time of the spin-off. The Committee recognized at the time that while base salaries were in line with gaming company peers, they were elevated compared to triple-net REIT peers. With the exception of the Companys Senior Vice President and Chief Accounting Officer and the Senior Vice President, General Counsel and Secretary, the named executive officers have not received an increase in base pay since the Companys inception. Additionally, legacy Penn compensation items that over-stated named executive officer compensation have ended and going forward the compensation rates will be more normalized. As a result, the total realizable pay for the Companys Chief Executive Officer has remained relatively flat over the last three years despite a significant increase in AFFO.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 23 |
Despite the Companys significant achievements described above, the executives have not earned their maximum potential bonus in any year since the spin-off. The following table reflects the CEOs cash bonus based on the maximum potential payout that could be earned under the program during the past four years. The Company uses rigorous performance hurdles that have resulted in a payout between 53% and 91% of his potential payout.
Potential Maximum Cash Bonus |
Actual Payout | |||||||||||
Performance Year |
Amount | % of Potential Maximum |
||||||||||
2017 |
$ | 3,616,936 | $ | 3,194,958 | 88 | % | ||||||
2016 |
$ | 3,616,936 | $ | 2,531,854 | 70 | % | ||||||
2015 |
$ | 3,616,936 | $ | 3,279,763 | 91 | % | ||||||
2014 |
$ | 3,616,936 | $ | 1,910,683 | 53 | % |
Performance awards are tied to multi-year performance goals in order to tie incentive compensation to long-term results. The performance goals established by the Committee require exceptional results to achieve maximum payout. The first three-year performance-based restricted stock award concluded at the end of 2016 with no value. The following table shows the status of the performance awards granted in each of 2014 through 2017.
Program |
Performance Period |
Performance Metric | Actual Performance | Status (as of 12/31/17) | ||||
2017 Performance Awards |
January 2017 - December 2019 |
Relative TSR vs. MSCI US REIT Index and Select Triple-Net Lease REITs |
Matures 12/31/2019 | Tracking to earn at least 100% of the target award | ||||
2016 Performance Awards |
January 2016 - December 2018 |
Relative TSR vs. MSCI US REIT Index |
Matures 12/31/2018 | Tracking to earn at least 100% of the target award | ||||
2015 Performance Awards |
January 2015 - December 2017 |
Relative TSR vs. MSCI US REIT Index |
Above 80th Percentile | 200% of the target award was earned | ||||
2014 Performance Awards |
January 2014 - December 2016 |
Relative TSR vs. MSCI US REIT Index |
Below 25th Percentile | 0% of the target award was earned |
Compensation Philosophy and Objectives
Objectives of Compensation Program
The overall objective of the Companys executive compensation program is to compensate members of management in a manner that most effectively incentivizes them to maximize shareholder value without taking undue financial risks. At the same time, the executive compensation program is intended to enable the Company to attract and retain the executive talent needed to grow and further its strategic initiatives. This cannot be understated. The acquisition of real property assets by a REIT from a taxable corporation presents unique and complex tax, accounting, legal and structural issues. Unfortunately, gaming assets are generally owned by corporations and a failure of the Companys management team to identify latent tax, accounting and legal issues can result in a transaction that appears to be accretive on the surface, potentially reducing AFFO and dividend distributions. It is imperative that the Companys management team have the experience and skills necessary to recognize and solve these problems. With these goals in mind, the Companys compensation objectives are to:
∎ | offer a competitive and balanced compensation program to compensate executives for the unique experience required of our management team, taking into consideration the total compensation opportunity offered by other REITs and gaming companies; |
∎ | utilize a mix of fixed and performance-based compensation designed to closely align the interests of management with those of the Companys shareholders; and |
∎ | attract and retain the best possible management team for the Company to increase shareholder value and maintain the Companys credibility in, and access to, the capital markets. |
24 | | | Gaming & Leisure Properties Inc. |
Compensation Philosophy
To support the Companys compensation program objectives, we have adopted and annually review and confirm a compensation philosophy that serves as the guide for all executive compensation decisions. Our compensation philosophy is as follows:
The Company intends to maintain an executive compensation program that will help it attract and retain the executive talent needed to grow and further the strategic interests of the business. To this end, the Company provides a compensation and benefits program that will be sufficiently attractive to provide talented executives with good reason to remain with the Company and continue in their efforts to improve shareholder value. The Companys program is designed to motivate and reward executives to achieve and exceed targeted results. Pay received by the executives will be commensurate with the performance of the Company and their own individual contributions.
We believe that it is in the long-term best interests of the Company to provide a significant portion of each executives compensation in the form of equity incentive awards. However, we also believe that it is important to provide base salaries that do not motivate or encourage executives to take excessive risks to ensure future financial security, particularly in light of the complex tax, accounting and legal issues inherent in the Companys transactions. To balance these goals, we believe that the appropriate compensation program includes (a) fixed and performance-based cash and (b) service and performance-based equity incentive awards. We focused on the appropriate balance of each of these components in developing our 2017 executive compensation program.
The Committee, in consultation with our independent compensation consultant and management team, continually evaluates and considers compensation practices identified as best practices by various market constituents. We incorporated into our compensation program the practices we believe will most effectively support the Companys continuing efforts to create shareholder value, including:
∎ | no agreements or arrangements containing tax gross-ups or other similar tax indemnification provisions; |
∎ | compensation largely based on multiple performance metrics, including dividends, adjusted funds from operations, relative total shareholder return and acquisition activity; |
∎ | compensation that includes a combination of variable and fixed incentive opportunities; |
∎ | double trigger acceleration of incentive awards in the event of a change of control; and |
∎ | established maximum bonus opportunities. |
We will continue to evaluate and consider input from our shareholders and emerging best practices to ensure that our compensation program contains the features necessary to properly align the interests of our executives with the interests of our shareholders without encouraging undue risk.
We have also taken steps to protect shareholder interests and promote shareholder value in both the design and in the administration of the Companys equity compensation program. Under the terms of our 2013 Long-Term Incentive Compensation Plan (the Plan), awards to employees are administered by the Committee and will generally include vesting schedules designed to encourage employees to focus on the long-term success of the Company by requiring employees to remain with the Company for a number of years before all of their awards may be settled. Further, the Plan neither permits the exercise price of outstanding stock options or stock appreciation rights to be reduced nor permits the grant of discounted stock options or stock appreciation rights.
Annual Review and Approval Process
Role of the Committee
Our Committee annually reviews and approves the executive compensation packages for the Chief Executive Officer and each of the other executive officers as well as confirms and approves performance-based awards earned for the most recently completed year. In establishing compensation packages, we consider numerous factors and data, including:
∎ | the experience necessary to identify and solve the significant tax, accounting, legal and structural complexities inherent in the types of transactions conducted by the Company; |
∎ | compensation packages of gaming peers with whom the Company competes for talent and assets; |
∎ | the dividend payout for the previous fiscal year and projected dividends for the current year; |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 25 |
∎ | the ability to enter into definitive acquisition agreements for properties that will be accretive to the Companys AFFO and dividend; |
∎ | the Companys performance relative to its REIT peers; |
∎ | the performance of the Companys properties in Perryville, Maryland and Baton Rouge, Louisiana; |
∎ | the individual performance of the executives and their total compensation relative to similarly situated gaming executives; |
∎ | a breakdown of the various components of each executive officers compensation package; |
∎ | compensation structure and performance goals of our REIT peers; |
∎ | perquisites and other benefits, if any, offered to each executive; and |
∎ | the performance of previous compensation awards. |
The Committee reviews this information with its compensation consultant and certain members of the executive management team to revise or confirm the compensation packages for each executive officer. One of our goals is to ensure that base salaries and total compensation packages are appropriate to attract and retain executives with the gaming and real estate experience necessary to create long-term shareholder value. We will also alter performance measures and/or the mix of cash and long-term equity incentive awards as necessary to ensure that management incentives continue to be aligned with shareholders.
Role of Management
The Companys Chief Executive Officer and Chief Financial Officer work closely with the Committee to analyze relevant peer data and to determine the appropriate base salary, cash bonus and incentive award levels for each member of the executive management team. However, while the Committee values the judgment and input from the CEO and CFO, and considers their recommendations, the Committee ultimately retains sole discretion to approve the compensation packages for each named executive officer.
Role of Compensation Consultant
We retained FTI Consulting, Inc. (FTI), an independent compensation consultant, to advise the Committee on compensation-related matters. The Committee selected FTI because of its experience in assisting other REITs in determining the optimal type and balance of cash and incentive award components in a manner intended to align the interests of management and shareholders while being competitive. In addition to other tasks, FTI worked with management and the Committee to develop a peer group for use in structuring the Companys executive compensation program. FTI and the Company review the peer group annually to ensure that it provides an accurate representation of the Companys structure and operations. A description of the process and rationale utilized for selecting our peer group is described below.
The Committee has determined that no conflict of interest exists between FTI and the Company (including the Companys Board of Directors and the Companys management) pursuant to Item 407(e)(3)(iv) of SEC Regulation S-K. Neither FTI nor any affiliate provided additional services to the Company or its affiliates in excess of $120,000 during 2017.
FTI reviews the current compensation of each executive officer on several levels, including consideration of (a) cash versus equity-based incentive awards; (b) fixed versus variable compensation, (c) service-based vesting versus performance-based vesting and (d) short-term awards versus long-term incentive awards. In addition, FTI provides the Committee with information regarding the compensation levels of executive officers in our selected peer group, as well as, current compensation best practices and trends in the REIT and gaming industries. Based on all of the available information and discussions with the Chief Executive Officer and Chief Financial Officer, FTI provides its recommendation to the Committee as to the appropriate compensation of each executive officer or confirms for the Committee that the suggested compensation packages are reasonable.
Peer Group
In selecting and reviewing the Companys peer group, FTI and the Company utilize a set of criteria that they believe captures the key areas of the Companys business and the experience necessary for its executives. FTI and the Company revisited the peer group at the end of 2017 to ensure that it reflects the realities of the environment in which the Company generates its revenue and competes for talent and assets. As a result, the criteria used to select the peer group were refined and the peer group was revised for 2018. The criteria are as follows:
∎ | gaming companies comparable to the Company in terms of its asset portfolio and the knowledge and skills necessary by the executive team to effectively evaluate opportunities and to manage the Companys operating properties; |
∎ | gaming companies with whom the Company competes for talent; and |
∎ | triple-net REITs with revenues primarily derived from triple-net leases. |
26 | | | Gaming & Leisure Properties Inc. |
Applying these criteria, FTI recommended, and the Committee approved, the following peer group for 2017:
Gaming Companies | Triple-Net REITs | |
Boyd Gaming Corporation |
Alexandria Real Estate Equities, Inc. | |
Caesars Entertainment Corporation |
EPR Properties | |
MGM Resorts International |
Gramercy Property Trust, Inc. | |
Penn National Gaming, Inc. |
MGM Growth Properties LLC | |
Pinnacle Entertainment, Inc. |
National Retail Properties, Inc. | |
Wynn Resorts, Limited |
Omega Healthcare Investors, Inc. | |
Realty Income Corporation | ||
Spirit Realty Capital, Inc. | ||
STORE Capital Corporation | ||
Uniti Group, Inc. | ||
VEREIT, Inc. |
Risk Assessment
In establishing and reviewing our executive compensation program, we consider, among other things, whether the program properly motivates executives to focus on the creation of shareholder value without encouraging unnecessary or excessive risk taking. To this end, the Committee carefully reviews the principal components of executive compensation. Base salaries are reviewed annually and are fixed in amount. Annual incentive pay is focused on achievement of certain specific overall financial goals and is determined using multiple performance criteria with established maximum payouts. The other major component of our executive officers compensation is long-term incentives through restricted stock, which we believe is important to help further align executives interests with those of our shareholders. We believe that these cash and incentive awards, especially when combined with the compensation clawback policy, described in this Proxy Statement under the heading Other Compensation Policies, appropriately balance risk, payment for performance and align executive compensation with the interests of shareholders without encouraging unnecessary or excessive risk taking.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 27 |
Elements of Compensation
The compensation program is weighted towards performance-based compensation utilizing several different performance metrics. The mix of cash versus equity-based incentive awards, fixed versus variable compensation, and service-based vesting versus performance-based vesting of equity incentive awards is designed to ensure that management is, and remains, appropriately incentivized across a number of different business and economic environments. In addition, our program includes both internal performance measures as well as external performance metrics to ensure that our executives are focused both on the Companys goals as well as its position in the market. The following is a summary of the key elements (a more detailed description of each element is provided below):
Component |
Description | Objective | Strategic Rationale | |||
Base Salary |
Fixed cash compensation |
Provide competitive fixed compensation considering the job responsibilities, individual performance, skills and experience
|
Designed to attract and retain executives with the experience to implement the Companys growth strategy | |||
Annual Performance Cash Awards |
Cash compensation with 90% tied to achievement of pre-determined quantitative performance goals and 10% tied to qualitative performance
|
Provide incentives for executives to enter into accretive transactions that result in growing dividend distributions and AFFO |
Aligns executive and shareholder interests | |||
Long-Term Fixed Equity Awards |
Annual equity awards with time-based vesting equally over a three-year period |
Supplement fixed compensation with long-term compensation to enhance retention and encourage long-term growth
|
Aligns executive and shareholder interests and rewards long-term stock performance | |||
Long-Term Performance-Based Equity Awards |
Annual equity award with three-year cliff vesting based on total shareholder return measured against the US MSCI Index and, for awards granted after January 1, 2017, triple-net REIT peers
|
Provide a significant portion of total potential compensation tied to long-term stock performance |
Aligns executive and shareholder interests and rewards long-term stock performance with no payout for under-performance |
In 2017, the total potential compensation opportunity of the Companys named executive officers consisted of approximately 75% of performance-based and/or at risk compensation and approximately 25% of fixed compensation (of which approximately 13% was base salary and 12% service-based restricted stock awards).
Base Salary
The base salaries of our executives are designed to compensate them for services rendered during the fiscal year and, consistent with our pay for performance philosophy, executives receive a significant portion of their overall targeted compensation in a form other than a fixed base salary. Although the Company does not generally benchmark against any particular percentile of base salaries of comparable executives within the Companys peer group, we set salaries that are competitive in the gaming industry, recognizing that our Company seeks to attract and retain executives with experience in the gaming industry. In addition, we recognize that it is critical that executives have the experience necessary to identify and resolve the complex tax, accounting and legal issues inherent in the type of transactions engaged in by the Company. Base salaries are then further adjusted for certain qualitative factors, including: specific position duties and responsibilities; tenure with the Company; individual contributions; value to the Company; and the overall reasonableness of an executives compensation.
28 | | | Gaming & Leisure Properties Inc. |
Set forth below are the 2017 base salaries for each of the named executive officers.
Executive |
2017 Salary |
Change | ||||
Chairman, Chief Executive Officer and President |
$ |
1,808,468 |
|
No Change Since 2012 | ||
Senior Vice President, Chief Financial Officer and Treasurer |
$ |
1,166,990 |
|
No Change Since 2012 | ||
Senior Vice President, Corporate Development |
$ |
519,841 |
|
No Change Since 2012 | ||
Senior Vice President, General Counsel and Secretary |
$ |
425,000 |
|
No Change Since 2015 | ||
Senior Vice President and Chief Accounting Officer |
$ |
400,000 |
|
No Change Since 2015 |
Annual Performance Cash Awards
For 2017, the Committee continued the performance-based annual cash incentive bonus program designed to motivate the executive officers and other members of the management team to achieve certain Company growth objectives that we believe were most likely to increase shareholder value. The program was based on the achievement of a number of specific performance criteria focused on the Companys annual strategic goals and business plan. For 2017, the annual cash bonus for each named executive officer was comprised of four components:
∎ | 40% based on the Companys achievement of established AFFO per share targets; |
∎ | 20% based on the Companys achievement of established dividend targets; |
∎ | 30% based on the achievement of established additional AFFO targets resulting from acquisitions; and |
∎ | 10% discretionary based on the qualitative factors indicated above. |
With respect to the AFFO and dividend components, a cash bonus could have been earned at three different achievement levels: Threshold; Target; and Maximum. The acquisition goal was measured on a scale of 0-100% with annual target being the maximum and zero being the minimum. The achievement levels established by the Committee for 2017 are set forth below.
Component |
Threshold | Target | Maximum | |||
AFFO Growth |
Annual AFFO per share of $2.98
|
Annual AFFO per share of $3.09
|
Annual AFFO per share of $3.18
| |||
Dividend Growth |
Fourth quarter dividend per share of $0.60
|
Fourth quarter dividend per share of $0.62
|
Fourth quarter dividend per share of $0.64
| |||
Acquisition Growth |
Payout determined based on the percentage of maximum target achieved
|
Annual effect on AFFO per share $0.13
|
In 2017, the Company achieved annual AFFO of $3.15 per share and paid $0.63 per share in fourth quarter dividends. The named executive officers were also awarded the maximum discretionary bonus primarily as a result of successfully (i) closing the acquisition of the real estate assets of Ballys Casino Tunica and Resorts Casino Tunica and (ii) negotiating transactions to permit the transfer of certain assets to a new lease with Boyd Gaming Corporation in connection with Penns intent to acquire Pinnacle Entertainment, Inc. (the Tenant Merger). The agreements to accommodate the proposed Tenant Merger also resulted in maximum bonus payment earned for the acquisition growth component. As a result, the cash bonus paid to the named executive officers for 2017 was 88% of the maximum.
We set the ranges of bonuses payable pursuant to the cash bonus measure for each executive as a percentage of annual base salary, as set forth below. In order to help manage total potential compensation payouts, annual cash bonus opportunities are capped at a maximum bonus level, regardless of the extent to which performance exceeds targeted levels.
Executive
|
Threshold
|
Target
|
Maximum
| ||||||||||||
Chairman, Chief Executive Officer and President |
|
50 |
% |
|
100 |
% |
|
200 |
% | ||||||
Senior Vice President, Chief Financial Officer and Treasurer |
|
50 |
% |
|
100 |
% |
200 | % | |||||||
Senior Vice President, Corporate Development |
|
50 |
% |
|
100 |
% |
|
200 |
% | ||||||
Senior Vice President, General Counsel and Secretary |
|
25 |
% |
|
50 |
% |
|
100 |
% | ||||||
Senior Vice President and Chief Accounting Officer |
|
25 |
% |
|
50 |
% |
|
100 |
% |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 29 |
The following table indicates the actual amount paid to each named executive officer as a percentage of annual base salary for 2017 for the annual performance cash awards described above:
Executive
|
Actual Bonus Percent of
|
Actual Payment ($)
| ||||||||
Chairman, Chief Executive Officer and President |
|
177 |
% |
|
3,194,958 |
| ||||
Senior Vice President, Chief Financial Officer and Treasurer |
|
177 |
% |
|
2,061,682 |
| ||||
Senior Vice President, Corporate Development |
|
177 |
% |
|
918,386 |
| ||||
Senior Vice President, General Counsel and Secretary |
|
88 |
% |
|
375,417 |
| ||||
Senior Vice President and Chief Accounting Officer |
|
88 |
% |
|
353,333 |
|
Long-Term Performance-Based Equity Awards
While the annual cash bonus program was designed to incentivize the Companys management team to achieve specific near-term internal Company growth goals, the long-term performance equity award program was designed to focus management on the Companys long-term performance in relation to the broader REIT indices. We believe that a high degree of equity compensation motivates executives to increase the long-term value of the Company by aligning a significant portion of their total compensation with the interests of the Companys shareholders. We also believe that equity compensation is a critical tool in attracting and retaining executives with the type of entrepreneurial spirit that we believe is integral to the Companys success.
The Committee believes that the long-term performance-based equity award program has been effective in focusing management on the Companys long-term performance in relation to its peer group and provides an effective balance against the short-term Company growth goals reflected in the cash bonus program. Awards have three-year cliff vesting with the amount of restricted shares vested at the end of the three-year period determined based on the Companys performance during such period measured against its peers. More specifically, for awards issued after January 1, 2017, the percentage of shares vesting at the end of the measurement period are based on the Companys three-year total shareholder return ranking among the three-year return of the companies included in the MSCI US REIT index and in the triple-net REIT group set forth above, in equal amounts (see Overview of Compensation Program for 2018 of the Compensation Discussion and Analysis for certain changes in the performance-based restricted stock award program for 2018). The number of shares vesting at each performance achievement level for each named executive officer are set forth below.
Executive |
Below 25th Percentile |
25th to less than 40th Percentile |
40th to less than 60th Percentile |
60th to less than 80th Percentile |
Above 80th Percentile | ||||||||||||||||||||
Chairman, Chief Executive Officer |
|
0 |
|
|
55,000 |
|
|
110,000 |
|
|
165,000 |
|
|
220,000 |
| ||||||||||
Senior Vice President, Chief |
|
0 |
|
|
27,500 |
|
|
55,000 |
|
|
82,500 |
|
|
110,000 |
| ||||||||||
Senior Vice President, Corporate |
|
0 |
|
|
17,500 |
|
|
35,000 |
|
|
52,500 |
|
|
70,000 |
| ||||||||||
Senior Vice President, General |
|
0 |
|
|
12,500 |
|
|
25,000 |
|
|
37,500 |
|
|
50,000 |
| ||||||||||
Senior Vice
President and Chief |
|
0 |
|
|
12,500 |
|
|
25,000 |
|
|
37,500 |
|
|
50,000 |
|
The performance awards granted in January 2015 were earned as of December 31, 2017 above the 80th percentile as a result of the Companys relative TSR ranking compared to the MSCI US REIT index for the measurement period.
We believe that this long-term performance-based equity incentive program compliments the annual cash incentive program by providing the appropriate balance between performance-based cash and performance-based equity awards.
Long-Term Fixed Equity Awards
In addition to the long-term performance-based equity awards, we established a service-based retention equity award program for 2017. A significant amount of each named executive officers compensation is tied to performance and we recognize that there is also a need for an additional retention component of our compensation structure. Therefore, we believe that service-based awards serve as a critical retention tool, recognizing that while the vesting of such awards is unrelated to performance, the value is directly correlated with the Companys share price. Awards vest at a rate of 33.33% per year and are generally subject to continued employment.
30 | | | Gaming & Leisure Properties Inc. |
The number of shares of restricted stock awarded to each named executive officer for 2017 was as follows:
Executive
|
Number of
|
|||
Chairman, Chief Executive Officer and President
|
|
55,000
|
| |
Senior Vice President, Chief Financial Officer and Treasurer
|
|
27,500
|
| |
Senior Vice President, Corporate Development
|
|
17,500
|
| |
Senior Vice President, General Counsel and Secretary
|
|
12,500
|
| |
Senior Vice President and Chief Accounting Officer
|
|
12,500
|
|
Overview of Compensation Program for 2018
In establishing the compensation program for 2018, we began with a review of compensation earned by executives in 2017 measured against the Companys achievements in 2017. We believe that the compensation program for the Companys named executive officers in 2017 continued to provide the right balance between performance-based and fixed compensation to properly align the interests of management with shareholders without encouraging undue financial risks. More specifically:
∎ | base salaries were competitive with gaming industry peers, the companies with whom the Company competes for talent and assets; |
∎ | under the performance-based cash bonus program, named executive officers were rewarded in 2017 for their ability to grow the Companys dividend, AFFO, and acquisition growth; and |
∎ | at the end of 2017, the first three-year performance-based restricted share awards were earned at 100% of value as a result of the Companys stock performance ranking among the US MSCI REIT Index above the 80th percentile. |
With the first two performance-based restricted share awards maturing at the end of 2016 and 2017, we re-examined the program to ensure that it is achieving our goals and providing the proper incentives. We also considered feedback from certain of our institutional shareholders, including certain REIT investors, and advice from our compensation consultant. As a result of this review, the Committee decided to extend the program for 2018 with the following changes: (1) the vesting schedule is revised to provide for target vesting at the 50th percentile, threshold at the 25th percentile and maximum at the 75th percentile, with linear vesting in between achievement levels, and (2) vesting is capped at target in the event of negative TSR for the measurement period. We also retained the change made for 2017 to measure 50% of the award by the Companys TSR performance ranking among the US MSCI REIT Index and the remaining 50% by the Companys TSR performance ranking among a group of triple-net REIT peer companies. The triple-net measurement group includes publicly traded REITs deriving at least 75% of revenues from triple-net leases:
Triple-Net REITs | ||
Agree Realty Corporation
|
STORE Capital Corporation
| |
EPR Properties
|
VEREIT
| |
Four Corners Property Trust
|
Uniti Group, Inc.
| |
Getty Realty
|
Omega Healthcare Investors
| |
Global Net Lease
|
Alexandria Real Estate Equities
| |
Gramercy Property Trust
|
Gladstone Commercial Corporation
| |
Lexington Realty Trust
|
LTC Properties
| |
MGM Growth Properties
|
One Liberty Properties
| |
National Retail Properties
|
Seritage Growth Properties
| |
Realty Income Corporation
|
STAG Industrial Group
| |
Select Income REIT
|
Spirit Realty Capital
|
We will continue to look closely at the efficacy of this program as additional awards mature and more information is available.
With respect to the other components of the compensation program, comparing managements achievements and the Companys share performance to the impact on compensation, the Committee decided to continue the overall compensation program for 2018.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 31 |
Base Salary
Set forth below are the 2018 base salaries for each of the named executive officers.
Executive
|
2018 Salary
|
Change
| ||||
Chairman, Chief Executive Officer and President
|
$
|
1,808,468
|
|
No Change Since 2012
| ||
Senior Vice President, Chief Financial Officer and Treasurer
|
$
|
1,166,990
|
|
No Change Since 2012
| ||
Senior Vice President, Corporate Development
|
$
|
519,841
|
|
No Change Since 2012
| ||
Senior Vice President, General Counsel and Secretary
|
$
|
425,000
|
|
No Change Since 2015
| ||
Senior Vice President and Chief Accounting Officer
|
$
|
400,000
|
|
No Change Since 2015 |
Annual Performance Cash Awards
The Companys annual cash incentive bonus program is a performance-based measure designed to motivate the executive officers and other members of the management team to achieve certain Company growth objectives that we believe are most likely to increase shareholder value. The program is based on the achievement of a number of specific Company performance criteria that we believe are critical for the achievement of the Companys annual strategic goals and business plan. For 2018, the annual cash bonus for each named executive officer will be comprised of four components:
∎ | 40% based on the Companys achievement of established AFFO per share targets; |
∎ | 20% based on the Companys achievement of established dividend targets; |
∎ | 30% based on the achievement of established additional AFFO targets resulting from acquisitions; and |
∎ | 10% discretionary based on the qualitative factors indicated above. |
With respect to the AFFO Growth, a cash bonus can be earned at three different achievement levels: Threshold; Target; and Maximum. With respect to Dividend Growth, cash bonus is limited to Target and Maximum with no cash bonus paid below Target. The achievement levels established by the Committee for 2018 are set forth below. With respect to the Acquisition Growth component, to determine the achievement level, if any, the Committee will evaluate the impact of acquisitions assuming each is financed at 5.5x leverage.
Component
|
Threshold
|
Target
|
Maximum
| |||
AFFO Growth |
Annual AFFO per share of $3.10
|
Annual AFFO per share of $3.13
|
Annual AFFO per share of $3.20
| |||
Dividend Growth |
No Payout Below Target |
Fourth quarter dividend per share of $0.63 |
Fourth quarter dividend per share of $0.65 | |||
Acquisition Growth |
Payout determined based on the percentage of maximum target achieved
|
Annual effect on AFFO per share $0.13
|
We set the ranges of bonuses payable pursuant to the cash bonus measure for each executive as a percentage of annual base salary, as set forth below. In order to help manage total potential compensation payouts, annual cash bonus opportunities are capped at a maximum bonus level, regardless of the extent to which performance exceeds targeted levels.
Executive
|
Threshold
|
Target
|
Maximum
|
|||||||||
Chairman, Chief Executive Officer and President
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
| |||
Senior Vice President, Chief Financial Officer and Treasurer
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
| |||
Senior Vice President, Corporate Development
|
|
50
|
%
|
|
100
|
%
|
|
200
|
%
| |||
Senior Vice President, General Counsel and Secretary
|
|
25
|
%
|
|
50
|
%
|
|
100
|
%
| |||
Senior Vice President and Chief Accounting Officer
|
|
25
|
%
|
|
50
|
%
|
|
100
|
%
|
Long-Term Performance-Based Equity Awards
The Committee believes that the long-term performance-based equity award program continues to be effective in focusing management on the Companys long-term performance in relation to its peer group and provides an effective balance against the short-term Company growth goals reflected in the cash bonus program. Awards have three-year cliff vesting with the number of restricted shares vested at the end of the three-year period determined based on the Companys TSR performance during such period measured against its peers. More specifically, for 2018, the percentage of shares vesting at the end of the measurement
32 | | | Gaming & Leisure Properties Inc. |
period will be based on the Companys three-year total shareholder return ranking among the three-year return of the companies included in the MSCI US REIT index and in the triple-net REIT group set forth above, in equal amounts. In response to shareholder concerns, we made the following changes for 2018: (1) the vesting schedule is revised to provide for target vesting at the 50th percentile, threshold at the 25th percentile and maximum at the 75th percentile, with linear vesting in between achievement levels; and (2) vesting is capped at target if TSR for the measurement period is negative.
The performance hurdles and levels of opportunity for performance-based restricted stock awards granted in 2018 are set forth below.
Level
|
Relative TSR Hurdles (Percentile)
|
Payout
|
||||
Below Threshold
|
< 25th percentile
|
|
0
|
%
| ||
Threshold
|
25th percentile
|
|
50
|
%
| ||
Target
|
50th percentile
|
|
100
|
%
| ||
Maximum
|
75th percentile
|
|
200
|
%
|
The following table sets forth the target number of performance-based awards granted to each named executive officer in 2018.
Executive
|
Target Performance- Based Equity Award
|
|||
Chairman, Chief Executive Officer and President
|
|
110,000
|
| |
Senior Vice President, Chief Financial Officer and Treasurer
|
|
55,000
|
| |
Senior Vice President, Corporate Development
|
|
35,000
|
| |
Senior Vice President, General Counsel and Secretary
|
|
25,000
|
| |
Senior Vice President and Chief Accounting Officer
|
|
25,000
|
|
Long-Term Fixed Equity Awards
In addition to the long-term performance-based equity awards, we have established a service-based vesting award for 2018 in the same amounts granted in 2017. Awards will vest at a rate of 33.33% per year, generally subject to the continued employment of the applicable executive. The number of shares awarded to each named executive officer is set forth below.
Executive
|
Number of Shares
|
|||
Chairman, Chief Executive Officer and President
|
|
55,000
|
| |
Senior Vice President, Chief Financial Officer and Treasurer
|
|
27,500
|
| |
Senior Vice President, Corporate Development
|
|
17,500
|
| |
Senior Vice President, General Counsel and Secretary
|
|
12,500
|
| |
Senior Vice President and Chief Accounting Officer
|
|
12,500
|
|
Deferred Compensation
The Company does not maintain any defined benefit pension programs for its executives. The Company maintains an elective non-qualified deferred compensation plan for executives. Pursuant to the plan, the Companys contributions under the plan are equal to 50% of the participants deferral for the first 10% of the salary and/or bonus deferred, subject to a maximum annual Company contribution equal to 5% of the participants salary and/or bonus. All amounts credited to an executives account are notionally invested, as directed by the executive, in commonly available mutual funds, and the Company does not guarantee any minimum returns. The plan is unfunded and benefits are paid from the Companys general assets. However, the Company currently contributes funds into a grantor trust on a monthly basis in respect of these deferred compensation obligations. The Company generally sets aside separately the amounts deferred by the executives and the matching contributions thereon and, to protect against excess liabilities, invests such amounts in the mutual funds notionally selected by each executive. The deferred compensation program is described in more detail under the heading 2017 Nonqualified Deferred Compensation of this Proxy Statement.
Benefits and Perquisites
We believe that executives should be offered customary benefits and perquisites that are reasonable relative to the benefits provided to all employees, are consistent with competitive practices among the Companys peer group and, in certain circumstances, may address a particular reasonable issue or concern of an executive. The standard benefits offered
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 33 |
to all of the Companys employees include medical, dental and vision insurance, group life insurance, short and long-term disability and a 401(k) with certain contributions matched by the Company (50% of employee contributions, subject to applicable contribution limits). Consistent with the objectives described above, the Company also provides certain executive officers with additional supplemental benefits and perquisites, including in limited instances, use of the Companys private aircraft where individual circumstances merit. The description and value of such supplemental benefits and perquisites in 2017 can be found on the All Other Compensation Table of this Proxy Statement.
None of the named executive officers has an employment agreement with the Company.
Other Compensation-Related Policies
Stock Ownership Guidelines
The Compensation Committee believes that it is important for executive officers and non-employee directors to have a financial stake in the Company such that their interests are more closely aligned with those of the Companys shareholders. Accordingly, the Committee has established stock ownership guidelines for our executive officers and non-employee directors. Each executive and non-employee director is expected to acquire, and continue to hold during the term of his or her employment, equity with a value equal to the multiple of his or her annual base salary/cash retainer as indicated below. These guidelines must be satisfied within five years of the date of adoption of these guidelines, or the fifth anniversary of the executive officers or non-employee directors appointment, whichever is later.
Title |
Multiple | |
Non-Employee Directors |
5x Annual Cash Retainer | |
Chairman, Chief Executive Officer and President |
5x Base Salary | |
Senior Vice President, Chief Financial Officer and Treasurer |
3x Base Salary | |
Senior Vice President, Corporate Development |
2x Base Salary | |
Senior Vice President and Chief Accounting Officer |
2x Base Salary | |
Senior Vice President, General Counsel and Secretary |
2x Base Salary |
As of December 31, 2017, all of executive officers and four of six non-employee directors were in compliance with the ownership guidelines set forth above, other than certain directors added to the Board in 2017 yet to gain compliance.
Hedging and Pledging Policy. We believe that equity ownership fosters an atmosphere where directors and officers think like owners and are motivated to increase the long-term value of the Company by aligning their interests with those of the Companys shareholders. Accordingly, we have adopted policies generally restricting each of the Companys directors and executive officers from engaging in hedging transactions or pledging Company shares.
Compensation Clawback Policy. The Company has a commitment to ensure that its executive officers adhere to the highest professional and personal standards. Accordingly, the Companys policy is that misconduct by any executive officer that leads to a restatement of the Companys financial results could subject executive officers to disgorge prior compensation to the extent such compensation would not have been earned based on the restated financial statements. In light of the highly regulated nature of the Companys business, the Committee would likely pursue such remedy, among others, where appropriate based on the facts and circumstances surrounding the restatement and existing laws.
Statutory and Regulatory Considerations. In designing the Companys compensatory programs, we consider the various tax, accounting and disclosure rules associated with various forms of compensation. We also review and consider the deductibility of executive compensation under Section 162(m) (Section 162(m)) of the Internal Revenue Code of 1986, as amended (the Code), which generally provides that the Company may not deduct certain compensation of more than $1 million that is paid to certain individuals, subject to certain exemptions, including an exemption applicable during 2017 for performance-based compensation within the meaning of Section 162(m). The Tax Cuts and Jobs Act, enacted in December 2017, amended certain aspects of Section 162(m) specifically affecting the exclusion of performance-based compensation from the $1 million limit in future years. For 2017, we considered the implications and exemptions to such limitation. We seek to preserve the Companys tax deductions for executive compensation to the extent consistent with the Companys executive compensation objectives. However, we may also from time to time consider and grant compensation that may not be tax deductible if we believe such compensation is warranted to achieve the Companys objectives.
34 | | | Gaming & Leisure Properties Inc. |
We have reviewed and discussed the Compensation Discussion and Analysis with management. Based on our review and discussion with management, the Compensation Committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and, by reference, in the Companys Annual Report on Form 10-K for the fiscal year ended December 31, 2017.
Compensation Committee |
David A. Handler, Chair E. Scott Urdang James B. Perry |
The foregoing report of the Compensation Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 35 |
The following table sets forth information concerning the compensation earned during the fiscal years ended December 31, 2017, 2016 and 2015 by the Companys Chief Executive Officer, Chief Financial Officer and the three other most highly compensated executive officers as of December 31, 2017 (collectively, the Named Executive Officers):
Name and Principal Position |
Year |
Salary ($) |
Stock Awards Time-Based ($)(1) |
Stock Awards ($)(2) |
Non-Equity Incentive Plan Compensation ($)(3) |
All Other Compensation ($)(4) |
Total ($) | |||||||||||||||||||||
Peter M. Carlino Chairman, Chief Executive Officer and President
|
|
2017 |
|
|
1,808,468 |
|
|
1,684,100 |
|
|
3,947,900 |
|
|
3,194,958 |
|
|
416,764 |
|
|
11,052,190 |
| |||||||
2016 | 1,808,468 | 1,529,000 | 3,788,400 | 2,531,854 | 2,353,353 | 12,011,075 | ||||||||||||||||||||||
|
2015
|
|
|
1,878,024
|
|
|
1,613,700
|
|
|
3,803,800
|
|
|
3,279,763
|
|
|
6,189,919
|
|
|
16,765,206
|
| ||||||||
William J. Clifford Senior Vice President, Chief Financial Officer and Treasurer
|
|
2017 |
|
|
1,166,990 |
|
|
842,050 |
|
|
1,973,950 |
|
|
2,061,682 |
|
|
157,630 |
|
|
6,202,302 |
| |||||||
2016 | 1,166,990 | 764,500 | 1,894,200 | 1,633,786 | 594,436 | 6,053,912 | ||||||||||||||||||||||
|
2015
|
|
|
1,211,874
|
|
|
806,850
|
|
|
1,901,900
|
|
|
2,117,427
|
|
|
2,142,572
|
|
|
8,180,623
|
| ||||||||
Steven T. Snyder Senior Vice President, Corporate Development
|
|
2017 |
|
|
519,841 |
|
|
535,850 |
|
|
1,256,150 |
|
|
918,386 |
|
|
74,036 |
|
|
3,304,263 |
| |||||||
2016 | 519,841 | 486,500 | 1,205,400 | 727,777 | 628,628 | 3,568,146 | ||||||||||||||||||||||
|
2015
|
|
|
539,835
|
|
|
513,450
|
|
|
1,210,300
|
|
|
944,996
|
|
|
1,086,847
|
|
|
4,295,428
|
| ||||||||
Brandon J. Moore Senior Vice President, General Counsel and Secretary
|
|
2017 |
|
|
425,000 |
|
|
382,750 |
|
|
897,250 |
|
|
375,417 |
|
|
23,462 |
|
|
2,103,879 |
| |||||||
2016 | 425,000 | 347,500 | 861,000 | 297,500 | 29,812 | 1,960,812 | ||||||||||||||||||||||
|
2015
|
|
|
311,538
|
|
|
293,400
|
|
|
691,600
|
|
|
272,240
|
|
|
31,272
|
|
|
1,600,050
|
| ||||||||
Desiree A. Burke Senior Vice President and Chief Accounting Officer
|
|
2017 |
|
|
400,000 |
|
|
382,750 |
|
|
897,250 |
|
|
353,333 |
|
|
39,400 |
|
|
2,072,733 |
| |||||||
2016 | 400,000 | 347,500 | 861,000 | 280,000 | 153,167 | 2,041,667 | ||||||||||||||||||||||
|
2015
|
|
|
385,817
|
|
|
366,750
|
|
|
864,500
|
|
|
337,149
|
|
|
263,864
|
|
|
2,218,080
|
|
(1) | The amounts reflect the full grant date fair value calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation Stock Compensation (ASC 718). The assumptions used in calculating these amounts are described in footnote 3 to the Companys Annual Report on Form 10-K for the year ended December 31, 2017. Included in stock awards reported each year are restricted stock awards granted each year, relating to the Companys long-term fixed equity award grant. For more information on the Companys long-term fixed equity awards, see the Overview of 2017 Compensation section of the Compensation Discussion and Analysis included in this Proxy Statement. |
(2) | The amounts reflect the full grant date fair value calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation Stock Compensation (ASC 718). The assumptions used in calculating these amounts are described in footnote 3 to the Companys Annual Report on Form 10-K for the year ended December 31, 2017. Included in stock awards reported each year are performance-based restricted stock awards granted each year, relating to the Companys long-term performance-based equity award grant. For more information on the Companys long-term performance-based equity awards, see the Overview of 2017 Compensation section of the Compensation Discussion and Analysis included in this Proxy Statement. The following table discloses the aggregate grant date fair value of the award, assuming maximum level of achievement, but does not estimate dividends: |
Year |
Peter M. Carlino | William J. Clifford | Steven T. Snyder | Brandon J. Moore | Desiree A. Burke | ||||||||||||||||||||
2017 |
$ |
6,736,400 |
|
$ |
3,368,200 |
|
$ |
2,143,400 |
|
$ |
1,531,000 |
|
$ |
1,531,000 |
| ||||||||||
2016 |
$ |
6,116,000 |
|
$ |
3,058,000 |
|
$ |
1,946,000 |
|
$ |
1,390,000 |
|
$ |
1,390,000 |
| ||||||||||
2015 |
$ |
6,454,800 |
|
$ |
3,227,400 |
|
$ |
2,053,800 |
|
$ |
1,173,600 |
|
$ |
1,467,000 |
|
(3) | The amounts reported each year reflect annual performance cash awards earned for each period. For more information on the Companys annual performance cash awards, see the Compensation Discussion and Analysis included in this Proxy Statement. |
(4) | See All Other Compensation Table included in this Proxy Statement for more information. |
36 | | | Gaming & Leisure Properties Inc. |
The following table describes each component of the All Other Compensation column of the Summary Compensation Table:
Company
|
Company
|
Company
|
Company
|
Perquisites |
||||||||||||||||||||||||||||||||
Name
|
Year
|
Personal
|
Personal
|
Other
|
Total ($)
|
|||||||||||||||||||||||||||||||
Peter M. Carlino |
2017 | 217,016 | 5,400 | | | 3,692 | 186,966 | 3,690 | 416,764 | |||||||||||||||||||||||||||
2016 | 254,411 | 5,300 | 1,894,119 | | 4,439 | 190,854 | 4,230 | 2,353,353 | ||||||||||||||||||||||||||||
|
2015
|
|
|
189,435
|
|
|
5,300
|
|
|
5,791,097
|
|
|
|
|
|
2,000
|
|
|
197,512
|
|
|
4,575
|
|
|
6,189,919
|
| ||||||||||
William J. Clifford |
2017 | 140,039 | 5,400 | | | | 7,214 | 4,977 | 157,630 | |||||||||||||||||||||||||||
2016 | 164,221 | 5,300 | 403,077 | | | 21,838 | | 594,436 | ||||||||||||||||||||||||||||
|
2015
|
|
|
122,426
|
|
|
5,300
|
|
|
2,006,215
|
|
|
|
|
|
|
|
|
8,631
|
|
|
|
|
|
2,142,572
|
| ||||||||||
Steven T. Snyder |
2017 | 62,381 | 5,400 | | 6,255 | | | | 74,036 | |||||||||||||||||||||||||||
2016 | 73,242 | 5,300 | 543,831 | 6,255 | | | | 628,628 | ||||||||||||||||||||||||||||
|
2015
|
|
|
54,856
|
|
|
5,300
|
|
|
1,020,436
|
|
|
6,255
|
|
|
|
|
|
|
|
|
|
|
|
1,086,847
|
| ||||||||||
Brandon J. Moore |
2017 | 18,062 | 5,400 | | | | | | 23,462 | |||||||||||||||||||||||||||
2016 | 17,210 | 5,300 | 7,302 | | | | | 29,812 | ||||||||||||||||||||||||||||
|
2015
|
|
|
6,231
|
|
|
5,300
|
|
|
19,741
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,272
|
| ||||||||||
Desiree A. Burke |
2017 | 34,000 | 5,400 | | | | | | 39,400 | |||||||||||||||||||||||||||
2016 | 36,857 | 5,300 | 111,010 | | | | | 153,167 | ||||||||||||||||||||||||||||
|
2015
|
|
|
29,150
|
|
|
5,300
|
|
|
229,414
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
263,864
|
|
(1) | This column reports the Companys matching contributions under the Companys Deferred Compensation Plan. |
(2) | This column reports the Companys contributions to the Named Executive Officers 401(k) savings accounts. |
(3) | In connection with the spin-off transaction, this column reports dividends paid to the Named Executive Officers on vested stock options converted from Penn stock options as of the time of the spin-off and the incremental fair value charge taken in 2015 by the Company relating to dividends accrued on unvested stock options as of the time of spin-off, which was not factored into the grant date value of the awards at the time they were granted. The final dividend payment was made on September 23, 2016. |
(4) | This column reports life insurance policy premiums paid by the Company on behalf of Mr. Snyder. |
(5) | The amount allocated for personal use of a company vehicle is calculated based upon the lease value of the vehicle and an estimate of personal usage provided by the executive. |
(6) | The amount allocated for personal aircraft usage is calculated based on the incremental cost to the Company for fuel, landing fees and other variable costs of operating the airplane. Since the Companys aircrafts are used for business travel, the Company does not include fixed costs that do not change based on usage, such as pilots salaries, depreciation of the purchase cost of the aircraft and the cost of general maintenance. |
(7) | This column reports the Companys payment of a country club membership for Mr. Carlino and the Companys payment of commuting costs for Mr. Clifford. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 37 |
2017 Grants of Plan-Based Awards
The following table sets forth certain information regarding grants of plan-based awards to the Named Executive Officers in 2017:
Estimated future
payouts
|
All Other Stock Awards
|
|||||||||||||||||||||||||||||||
Name |
Grant Date |
Grant Board Approval Date |
Threshold (#)(1) |
Target (#)(1) |
Maximum (#)(1) |
Number of Securities Underlying Stock (#)(2) |
Grant Date Fair Value of Stock ($)(3) |
|||||||||||||||||||||||||
Peter M. Carlino |
||||||||||||||||||||||||||||||||
Long-Term Fixed Equity Awards |
1/3/2017 | 12/13/2016 | 55,000 | 1,684,100 | ||||||||||||||||||||||||||||
Long-Term Performance Based Equity |
1/3/2017 | 12/13/2016 | 0 | 55,000 | 110,000 | 1,986,600 | ||||||||||||||||||||||||||
Long-Term Performance Based
Equity
|
|
1/3/2017 |
|
|
12/13/2016 |
|
|
0 |
|
|
55,000 |
|
|
110,000 |
|
|
1,961,300 |
| ||||||||||||||
William J. Clifford |
||||||||||||||||||||||||||||||||
Long-Term Fixed Equity Awards |
1/3/2017 | 12/13/2016 | 27,500 | 842,050 | ||||||||||||||||||||||||||||
Long-Term Performance Based Equity |
1/3/2017 | 12/13/2016 | 0 | 27,500 | 55,000 | 993,300 | ||||||||||||||||||||||||||
Long-Term Performance Based Equity
|
|
1/3/2017 |
|
|
12/13/2016 |
|
|
0 |
|
|
27,500 |
|
|
55,000 |
|
|
980,650 |
| ||||||||||||||
Steven T. Snyder |
||||||||||||||||||||||||||||||||
Long-Term Fixed Equity Awards |
1/3/2017 | 12/13/2016 | 17,500 | 535,850 | ||||||||||||||||||||||||||||
Long-Term Performance Based Equity |
1/3/2017 | 12/13/2016 | 0 | 17,500 | 35,000 | 632,100 | ||||||||||||||||||||||||||
Long-Term Performance Based
Equity
|
|
1/3/2017 |
|
|
12/13/2016 |
|
|
0 |
|
|
17,500 |
|
|
35,000 |
|
|
624,050 |
| ||||||||||||||
Brandon J. Moore |
||||||||||||||||||||||||||||||||
Long-Term Fixed Equity Awards |
1/3/2017 | 12/13/2016 | 12,500 | 382,750 | ||||||||||||||||||||||||||||
Long-Term Performance Based Equity |
1/3/2017 | 12/13/2016 | 0 | 12,500 | 25,000 | 451,500 | ||||||||||||||||||||||||||
Long-Term Performance Based Equity
|
|
1/3/2017 |
|
|
12/13/2016 |
|
|
0 |
|
|
12,500 |
|
|
25,000 |
|
|
445,750 |
| ||||||||||||||
Desiree A. Burke |
||||||||||||||||||||||||||||||||
Long-Term Fixed Equity Awards |
1/3/2017 | 12/13/2016 | 12,500 | 382,750 | ||||||||||||||||||||||||||||
Long-Term Performance Based Equity |
1/3/2017 | 12/13/2016 | 0 | 12,500 | 25,000 | 451,500 | ||||||||||||||||||||||||||
Long-Term Performance Based Equity
|
|
1/3/2017 |
|
|
12/13/2016 |
|
|
0 |
|
|
12,500 |
|
|
25,000 |
|
|
445,750 |
|
(1) | Awards represent performance-based restricted stock with cliff vesting at the end of the performance period beginning on January 3, 2017 and ending on December 31, 2019. The amount of restricted shares vested at the end of the performance period can range from zero to a maximum of 200% of target, depending on the level of achievement of the performance goals measured against the return of the companies included in the MSCI US REIT Index or in the triple-net REIT group set forth by the Company over the measurement period. In the event of a change in control, awards vest immediately at target level or, if greater, the actual level of achievement as of the date of the change of control. For more information on the Companys performance-based equity awards, see the Overview of 2017 Compensation section of the Compensation Discussion and Analysis included in this Proxy Statement. |
(2) | Awards represent restricted stock awards granted to the Named Executive Officers as part of their annual compensation. All grants have vesting over three years, 33.33% on the first anniversary of the date of grant and 33.33% on each succeeding anniversary. In the event of a change in control, awards vest immediately. |
(3) | Represents the full grant date fair value of awards under ASC 718. Generally, the full grant date fair value is the amount the Company would expense in its financial statements over the awards vesting period. The Company utilized a third party valuation firm to measure the fair value of the performance-based restricted stock awards at grant date using the Monte Carlo model. Additional information regarding the calculation of the grant date fair value is included in footnote 3 to the Companys audited financial statements in the Companys Annual Report on Form 10-K for the year ended December 31, 2017. |
38 | | | Gaming & Leisure Properties Inc. |
Outstanding 2017 Equity Awards at Fiscal Year-End
The following table sets forth information concerning equity awards outstanding as of December 31, 2017 and have been reported in the appropriate period in the Summary Compensation Table when granted:
Option Awards
|
Stock Awards
|
Performance Awards
|
||||||||||||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#)(1) |
Option Exercise Price ($) |
Option Expiration Date |
Stock Award Grant Date |
Number of Shares or Units Held that Have Not Vested (#)(2) |
Market Value of Shares or Units Held that Have Not Vested ($)(3) |
Number of Unearned Shares or Units Held that Have Not Vested (#)(4) |
Market Value of Unearned Shares or Units Held that Have Not Vested ($)(5) |
||||||||||||||||||||||||||||||||
Peter M. Carlino |
84,123 | 6.96 | 7/8/2018 | 1/2/2015 | 18,333 | 678,321 | 220,000 | 9,680,000 | ||||||||||||||||||||||||||||||||
84,123 | 8.19 | 1/3/2018 | 1/4/2016 | 36,666 | 1,356,642 | 220,000 | 9,200,400 | |||||||||||||||||||||||||||||||||
|
84,123
|
|
|
8.88
|
|
|
1/3/2019
|
|
|
1/3/2017
|
|
|
55,000
|
|
|
2,035,000
|
|
|
220,000
|
|
|
8,690,000
|
|
|||||||||||||||||
William J. Clifford |
150,000 | 8.88 | 1/3/2019 | 1/2/2015 | 9,166 | 339,142 | 110,000 | 4,840,000 | ||||||||||||||||||||||||||||||||
1/4/2016 | 18,333 | 678,321 | 110,000 | 4,600,200 | ||||||||||||||||||||||||||||||||||||
|
1/3/2017
|
|
|
27,500
|
|
|
1,017,500
|
|
|
110,000
|
|
|
4,345,000
|
|
||||||||||||||||||||||||||
Steven T. Snyder |
50,000 | 8.88 | 1/3/2019 | 1/2/2015 | 5,833 | 215,821 | 70,000 | 3,080,000 | ||||||||||||||||||||||||||||||||
1/4/2016 | 11,666 | 431,642 | 70,000 | 2,927,400 | ||||||||||||||||||||||||||||||||||||
|
1/3/2017
|
|
|
17,500
|
|
|
647,500
|
|
|
70,000
|
|
|
2,765,000
|
|
||||||||||||||||||||||||||
Brandon J. Moore |
1/2/2015 | 3,333 | 123,321 | 40,000 | 1,760,000 | |||||||||||||||||||||||||||||||||||
1/4/2016 | 8,333 | 308,321 | 50,000 | 2,091,000 | ||||||||||||||||||||||||||||||||||||
|
1/3/2017
|
|
|
12,500
|
|
|
462,500
|
|
|
50,000
|
|
|
1,975,000
|
|
||||||||||||||||||||||||||
Desiree A. Burke |
1/2/2015 | 4,166 | 154,142 | 50,000 | 2,200,000 | |||||||||||||||||||||||||||||||||||
1/4/2016 | 8,333 | 308,321 | 50,000 | 2,091,000 | ||||||||||||||||||||||||||||||||||||
|
1/3/2017
|
|
|
12,500
|
|
|
462,500
|
|
|
50,000
|
|
|
1,975,000
|
|
(1) | All options are fully vested and exercisable PENN options. |
(2) | Represents restricted stock awards with forfeiture provisions that lapse 33.33% on each of the first, second, and third anniversary of the date of grant. In the event of a change in control, the forfeiture restrictions on restricted stock lapse immediately. |
(3) | Calculated based on the Companys common stock closing price of $37.00 on December 29, 2017, which was the last trading day of 2017. |
(4) | Represents maximum achievement of the performance-based restricted stock awards as the performance shares which vested on December 31, 2017 achieved the maximum level. The amount of restricted stock to actually vest at the end of the performance period can range from zero to the maximum as described in the long-term performance-based equity awards section of the Overview of 2017 Compensation section of the Compensation Discussion and Analysis included in this Proxy Statement. The forfeiture provisions on the performance-based restricted stock awards granted lapse at the end of their three-year measurement period. In the event of a change in control, awards vest immediately at target level or, if greater, the actual level of achievement as of the date of the change of control, annualized for the entire performance period. |
(5) | Calculated based on the Companys common stock closing price of $37.00 on December 29, 2017, which was the last trading day of 2017, plus dividends paid during the applicable performance period as of December 29, 2017. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 39 |
2017 Option Exercises and Stock Vested
The following table sets forth information concerning options exercised, restricted stock awards vested, and phantom stock unit awards vested during fiscal 2017:
Option Awards | Stock Awards | Phantom Stock Unit Awards |
||||||||||||||||||||||||||||||||||||||||||
Name
|
Stock Ticker
|
Number of Shares Acquired on (#)
|
Value Realized on Exercise
|
Number of Shares Acquired on (#)
|
Value Realized on Vesting ($)(1)
|
Number of Shares Acquired on Vesting
|
Value Realized on Vesting ($)(1)
|
|||||||||||||||||||||||||||||||||||||
Peter M. Carlino(2) |
GLPI | | | 91,546 | 2,922,354 | 16,911 | 528,976 | |||||||||||||||||||||||||||||||||||||
|
PENN
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,451
|
|
|
188,045
|
|
||||||||||||||||||||||||
William J. Clifford |
GLPI | | | 41,775 | 1,333,632 | 8,184 | 255,996 | |||||||||||||||||||||||||||||||||||||
|
PENN
|
|
|
300,000
|
|
|
3,240,555
|
|
|
7,500
|
|
|
118,650
|
|
|
6,510
|
|
|
91,010
|
|
||||||||||||||||||||||||
Steven T. Snyder |
GLPI | 273,103 | 3,295,153 | 23,340 | 747,758 | 2,431 | 76,042 | |||||||||||||||||||||||||||||||||||||
|
PENN
|
|
|
35,000
|
|
|
492,250
|
|
|
3,500
|
|
|
55,370
|
|
|
1,933
|
|
|
27,023
|
|
||||||||||||||||||||||||
Brandon J. Moore |
GLPI | | | 13,461 | 428,255 | | | |||||||||||||||||||||||||||||||||||||
|
PENN
|
|
|
|
|
|
|
|
|
250
|
|
|
3,955
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Desiree A. Burke |
GLPI | | | 16,885 | 537,902 | 842 | 26,338 | |||||||||||||||||||||||||||||||||||||
|
PENN
|
|
|
|
|
|
|
|
|
1,250
|
|
|
19,775
|
|
|
670
|
|
|
9,367
|
|
(1) | Value realized reflects the difference between the per-share closing price of the Companys common stock on the date of exercise and the options exercise price for options and the closing price of the Companys common stock on the day prior to vesting for awards, not the grant date fair value disclosed elsewhere in this Proxy Statement. |
(2) | As part of the spin-off, Mr. Carlino exchanged stock awards to acquire Penn common stock for awards to acquire GLPI common stock; therefore there are no Penn stock award vestings reported for Mr. Carlino. |
40 | | | Gaming & Leisure Properties Inc. |
Potential Payments Upon Termination or Change-in-Control
The Named Executive Officers are entitled to accelerated vesting of equity-based incentive awards under the Plan upon a change in control and, under certain circumstances, in the event of termination. The Company recently amended the Plan to eliminate single trigger vesting of equity awards following a change in control for awards granted after April 1, 2018. The information below describes and quantifies compensation that would become payable and that which is accelerated assuming that such termination was effective December 31, 2017.
Executive Payments | Termination without Cause by Company ($)(3) |
Termination Upon Death ($)(4) |
Termination ($)(4) |
Change in ($)(5) |
Change in ($)(5) |
|||||||||||||||
Peter M. Carlino |
||||||||||||||||||||
Cash Severance Benefit(1) |
2,712,702 | 2,712,702 | 2,712,702 | | 2,712,702 | |||||||||||||||
Restricted Shares(2) |
| 4,069,963 | 4,069,963 | 4,069,963 | 4,069,963 | |||||||||||||||
Performance-Based Restricted Shares(6) |
18,710,267 | 27,570,400 | 27,570,400 | 27,570,400 | 27,570,400 | |||||||||||||||
Total |
$ | 21,422,969 | $ | 34,353,065 | $ | 34,353,065 | $ | 31,640,363 | $ | 34,353,065 | ||||||||||
William J. Clifford |
||||||||||||||||||||
Cash Severance Benefit(1) |
1,750,485 | 1,750,485 | 1,750,485 | | 1,750,485 | |||||||||||||||
Restricted Shares(2) |
| 2,034,963 | 2,034,963 | 2,034,963 | 2,034,963 | |||||||||||||||
Performance-Based Restricted Shares(6) |
9,355,133 | 13,785,200 | 13,785,200 | 13,785,200 | 13,785,200 | |||||||||||||||
Total |
$ | 11,105,618 | $ | 17,570,648 | $ | 17,570,648 | $ | 15,820,163 | $ | 17,570,648 | ||||||||||
Steven T. Snyder |
||||||||||||||||||||
Cash Severance Benefit(1) |
779,762 | 779,762 | 779,762 | | 779,762 | |||||||||||||||
Restricted Shares(2) |
| 1,294,963 | 1,294,963 | 1,294,963 | 1,294,963 | |||||||||||||||
Performance-Based Restricted Shares(6) |
5,953,267 | 8,772,400 | 8,772,400 | 8,772,400 | 8,772,400 | |||||||||||||||
Total |
$ | 6,733,029 | $ | 10,847,125 | $ | 10,847,125 | $ | 10,067,363 | $ | 10,847,125 | ||||||||||
Brandon J. Moore |
||||||||||||||||||||
Cash Severance Benefit(1) |
425,000 | 425,000 | 425,000 | | 425,000 | |||||||||||||||
Restricted Shares(2) |
| 894,142 | 894,142 | 894,142 | 894,142 | |||||||||||||||
Performance-Based Restricted Shares(6) |
3,812,333 | 5,826,000 | 5,826,000 | 5,826,000 | 5,826,000 | |||||||||||||||
Total |
$ | 4,237,333 | $ | 7,145,142 | $ | 7,145,142 | $ | 6,720,142 | $ | 7,145,142 | ||||||||||
Desiree A. Burke |
||||||||||||||||||||
Cash Severance Benefit(1) |
561,538 | 561,538 | 561,538 | | 561,538 | |||||||||||||||
Restricted Shares(2) |
| 924,963 | 924,963 | 924,963 | 924,963 | |||||||||||||||
Performance-Based Restricted Shares(6) |
4,252,333 | 6,266,000 | 6,266,000 | 6,266,000 | 6,266,000 | |||||||||||||||
Total |
$ | 4,813,871 | $ | 7,752,501 | $ | 7,752,501 | $ | 7,190,963 | $ | 7,752,501 | ||||||||||
(1) | Basis for cash severance benefit is 2017 salary and assumes an eligible termination as defined under the Companys Severance Plan. |
(2) | Restricted stock award values were computed based on the Companys common stock closing price of $37.00, on December 29, 2017, which was the last trading day of 2017. Restrictions on awards will immediately lapse in the event of termination as a result of death, disability or change in control. |
(3) | Performance-based restricted stock values, in the event of termination without cause by the Company, were computed based on the Companys total shareholder return as compared to the MSCI US REIT Index and in the triple-net REIT group (for 50% of grants awarded on January 3, 2017 only) achieved as of December 31, 2017, which was the maximum for awards granted January 2, 2015, January 4, 2016, and January 3, 2017, and then multiplied by a fraction, the numerator of which equals the number of days during such performance period that such Award Holder was actively employed by the Company, and the denominator of which equals the total days in the applicable performance period if terminated at December 31, 2017. |
(4) | Performance-based restricted stock values, in the event of termination as a result of death or disability, were computed based on the Companys total shareholder return as compared to the MSCI US REIT Index and in the triple-net REIT group (for 50% of grants awarded on January 3, 2017 only) achieved as of December 31, 2017, which was 100% for awards granted January 2, 2015, January 4, 2016, and January 3, 2017. The award determined at the end of the applicable performance period is as if such award holder were still employed at the time of the applicable performance period. |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 41 |
(5) | Performance-based restricted stock values, in the event of change of control, were computed based on the Companys total shareholder return as compared to the MSCI US REIT Index and in the triple-net REIT group (for 50% of grants awarded on January 3, 2017 only) achieved as of December 31, 2017, which was the maximum for awards granted January 2, 2015, January 4, 2016 and January 3, 2017, as performance shall be deemed to have been achieved at target level or, if greater, the actual level of achievement as of the date of the change of control. |
(6) | All performance-based restricted stock values were computed based on the Companys common stock closing price of $37.00 on December 29, 2017, which was the last trading day of 2017, plus applicable dividends. |
2017 Nonqualified Deferred Compensation
The following table sets forth information concerning nonqualified deferred compensation of the Named Executive Officers:
Name
|
Amount Previously Reported ($)
|
Executive Contributions in Last Fiscal Year ($)(1)
|
Company Contributions in Last Fiscal Year ($)(2)
|
Aggregate Earnings in Last Fiscal Year ($)(3)
|
Aggregate Withdrawals/ Distributions ($)
|
Aggregate Balance at Last Fiscal Year End ($)
|
||||||||||||||||||
Peter M. Carlino
|
|
10,438,731
|
|
|
434,032
|
|
|
217,016
|
|
|
2,353,542
|
|
|
(5,100
|
)
|
|
13,438,221
|
| ||||||
William J. Clifford
|
|
3,177,195
|
|
|
280,077
|
|
|
140,039
|
|
|
479,357
|
|
|
(190,627
|
)
|
|
3,886,041
|
| ||||||
Steven T. Snyder
|
|
1,685,883
|
|
|
124,762
|
|
|
62,381
|
|
|
326,946
|
|
|
(88,892
|
)
|
|
2,111,080
|
| ||||||
Brandon J. Moore
|
|
73,116
|
|
|
36,125
|
|
|
18,062
|
|
|
17,017
|
|
|
(424
|
)
|
|
143,896
|
| ||||||
Desiree A. Burke
|
|
242,516
|
|
|
68,000
|
|
|
34,000
|
|
|
60,999
|
|
|
(799
|
)
|
|
404,716
|
|
(1) | For each Named Executive Officer, the executives contribution is included in the Named Executive Officers salary and/or non-equity executive compensation for 2017, as reported in the Summary Compensation Table. |
(2) | For each Named Executive Officer, the Companys contribution is included in the Named Executive Officers other compensation for 2017, as reported in the Summary Compensation Table. |
(3) | Amounts reflect the change in account value during 2017. No amounts are reported in the Summary Compensation Table because earnings were not above market or preferential. |
Gaming and Leisure Properties, Inc. Deferred Compensation Plan
Pursuant to the Companys Deferred Compensation Plan, as amended, most management and certain other highly compensated employees selected by the committee administering the plan (the Committee) may elect to defer, on a pre-tax basis, a percentage of his or her salary and/or bonus. The minimum amount deferrable is $3,000 and the maximum is 90% of his or her base annual salary and/or bonus. Generally, deferral elections must be made before the beginning of the year in which compensation will be earned. The Companys contributions under the plan are equal to 50% of the participants deferral for the first 10% of the salary and/or bonus deferred, subject to a maximum annual Company contribution equal to 5% of the participants salary and/or bonus. With the approval of the Board of Directors, the Company is also permitted to make discretionary contributions. Participants are always 100% vested in their own contributions, but Company contributions vest 20% per year of service with the Company. Therefore, employees with five or more years of service are fully vested in Company contributions under the plan. However, for employees with less than five years of service, all Company contributions become immediately and fully vested upon death, retirement (on or after age 65) or a change in control of the Company, as defined in the Deferred Compensation Plan. The Committee may accelerate vesting of the Companys contributions if a participant terminates his or her employment because of disability. The Committee may also accelerate vesting in the event of an involuntary termination of employment pursuant to the same section of the plan.
Subject to the exceptions discussed below, participants in the Deferred Compensation Plan, or their beneficiaries, receive distributions upon retirement, death or termination. Participants can elect to receive distributions following retirement or death in the form of a lump sum payment or payment in five or ten annual installments. Distributions following retirement can be deferred for at least five years.
For purposes of the Deferred Compensation Plan, termination of employment as a result of a disability will be considered retirement. Distributions following termination of employment other than as a result of retirement or death will be in the form of a lump sum payment. Participants can also elect to receive a scheduled distribution with respect to an annual deferral amount, which is payable in a lump sum at the beginning of a designated subsequent calendar year, subject to certain limitations. In the event of an unforeseeable financial emergency and with the approval of the Committee, a participant can suspend deferrals or receive a partial and/or full payout under the plan. Certain specified employees have a six-month delay imposed upon distributions pursuant to a separation from service, as required by the final Code section 409A regulations. In the event of a change in control, the Company will accelerate installment payments that are in pay status by paying the account balance in lump sum and will distribute the account balances of all active participants in a lump sum; provided, however, that no distributions (or accelerations of installments) will occur unless the transaction qualifies as a change in control event under Code section 409A.
42 | | | Gaming & Leisure Properties Inc. |
Participants in the Deferred Compensation Plan may notionally invest deferred amounts, including Company contributions, in mutual funds selected by the Committee. Participants may change their investment elections at any time.
In 2017, the compensation of Mr. Carlino, our Chairman, Chief Executive Officer and President, was approximately 413 times the median pay of our employees resulting in a 413:1 pay ratio. Our operations include our corporate office as well as our subsidiaries operating casinos in Perryville, Maryland and Baton Rouge, Louisiana.
We identified our median employee by examining 2017 total compensation for all employees, excluding Mr. Carlino, who were employed by the Company as of December 31, 2017, the last day of our payroll year. We included all of our employees in this process, whether employed on a full-time or part-time basis. We did not make any assumptions or estimates with respect to total compensation. We defined total compensation as the aggregate of base salary (plus overtime, as applicable), cash bonus, and long-term incentive compensation awards.
After identifying the median employee based on total compensation, we calculated total compensation in 2017 for such employee using the same methodology we use for our named executive officers as set forth below in the Summary Compensation Table for 2017.
Peter M. Carlino | Median Employee | |||||||||
Total compensation |
$ | 11,052,190 | $ | 26,769 | ||||||
Pay Ratio |
413:1 |
We believe that the ratio of the CEO compensation to that of the median employee is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies.
The Companys primary business is that of a triple-net REIT. If we exclude our two operating casinos in Perryville, Maryland and Baton Rouge, Louisiana, the change in median pay of our employees results in a 60:1 pay ratio.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 43 |
AUDIT AND COMPLIANCE COMMITTEE REPORT
The Audit and Compliance Committee of the Board of Directors assists the Board of Directors in performing its oversight responsibilities for our financial reporting process and audit process as more fully described in the Audit and Compliance Committees charter. Management has the primary responsibility for the financial statements and the reporting process. Our independent registered public accounting firm is responsible for performing an independent audit of our consolidated financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) and to issue a report thereon.
In the performance of its oversight function, the Audit and Compliance Committee reviewed and discussed our audited financial statements for the fiscal year ended December 31, 2017 with management and with our independent registered public accounting firm. In addition, the Audit and Compliance Committee discussed with our independent registered public accounting firm the matters required to be discussed by the PCAOB Accounting Standard No. 1301, Communications with Audit Committees, which includes, among other items, matters related to the conduct of the audit of our financial statements. The Audit and Compliance Committee has also received and reviewed the written disclosures and the letter from our independent registered public accounting firm required by the applicable requirements of the Public Company Accounting Oversight Board regarding the accounting firms communications with the Audit and Compliance Committee concerning independence and has discussed with our independent registered public accounting firm that firms independence and considered whether the non-audit services provided by the independent registered public accounting firm are compatible with maintaining its independence.
Based on the review and discussions with management and our independent registered public accounting firm described above, the Audit and Compliance Committee recommended to the Board of Directors that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC.
Audit and Compliance Committee
Joseph W. Marshall, III, Chair
David A. Handler
E. Scott Urdang
The foregoing report of the Audit and Compliance Committee does not constitute soliciting material and shall not be deemed filed, incorporated by reference into or a part of any other filing by the Company (including any future filings) under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporates such report by reference therein.
44 | | | Gaming & Leisure Properties Inc. |
CHANGES IN REGISTRANTS CERTIFYING ACCOUNTANT
Dismissal of Independent Accountant
On September 19, 2016, the Audit and Compliance Committee of the Companys Board of Directors (the Audit and Compliance Committee) dismissed Ernst & Young LLP (EY) as the Companys independent registered public accounting firm. The decision to change the Companys independent registered public accounting firm was the result of a request for proposal process during which the Audit and Compliance Committee conducted a comprehensive, competitive process to select the independent registered public accounting firm.
The audit reports of EY on the Companys consolidated financial statements for each of the two fiscal years ended December 31, 2015 and December 31, 2014 did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.
In connection with the audits of the Companys consolidated financial statements for each of the two fiscal years ended December 31, 2015 and 2014, and in the subsequent interim period from January 1, 2016 to September 19, 2016, there were no disagreements with EY on any matter of accounting principles or practices, financial statement disclosure, or auditing scope and procedures that, if not resolved to the satisfaction of EY would have caused EY to make reference to the matter in their report.
As disclosed in the Companys Quarterly Report on Form 10-Q for the period ended September 30, 2015 (the 2015 Form 10-Q), management concluded that the Company did not maintain effective internal control over financial reporting as of September 30, 2015 as a result of the material weakness described in Item 4 of the Companys 2015 Form 10-Q, which description is incorporated herein by reference. Concurrent with the filing of the 2015 Form 10-Q, the Company filed an amended Annual Report on Form 10-K/A for the year ended December 31, 2014 (the 2014 Form 10-K/A), related to the same material weakness, a description of which is included in Item 9A of the Companys Form 10-K/A and incorporated herein by reference. The material weakness related to the Companys failure to maintain effective controls and procedures over the evaluation of a complex leasing arrangement and the accurate measurement and recording of revenue earned under such lease. The Company further advises that as of December 31, 2015, the material weakness discussed in this paragraph was remediated and EYs report on the effectiveness of the Companys internal control over financial reporting as of December 31, 2015 expressed an unqualified opinion. The Audit and Compliance Committee has discussed the matter described in this paragraph with EY and has authorized EY to respond fully to the inquiries of a successor accountant concerning such matter.
Engagement of Independent Accountant
On September 19, 2016, the Audit and Compliance Committee approved the engagement of Deloitte & Touche LLP (Deloitte) as the Companys independent registered public accounting firm for the year ended December 31, 2016.
During the fiscal years ended December 31, 2015 and 2014 and in the subsequent interim period through September 19, 2016, the Company did not consult with Deloitte regarding any of the matters or events set forth in Item 304(a)(2) of Regulation S-K.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 45 |
BENEFICIAL OWNERS AND MANAGEMENT
The following table contains information about the beneficial ownership of our common stock as of February 20, 2018 by:
∎ | each person, or group of persons, who beneficially owns more than 5% of our capital stock; |
∎ | each executive officer named in the summary compensation table; |
∎ | each of our directors; and |
∎ | all directors and executive officers as a group. |
Beneficial ownership and percentage ownership are determined in accordance with the rules and regulations of the SEC and include voting or investment power with respect to shares of stock. This information does not necessarily indicate beneficial ownership for any other purpose. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to restrictions, options or warrants held by that person that are currently exercisable or exercisable within 60 days of February 20, 2018 are deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as indicated in the footnotes to the following table or pursuant to applicable community property laws, each shareholder named in the table has sole voting and investment power with respect to the shares set forth opposite such shareholders name. Our calculation of the percentage of beneficial ownership is based on 213,348,235 shares of common stock outstanding on February 20, 2018.
Unless otherwise indicated in the footnotes, the address of each of the beneficial owners named below is: c/o Gaming and Leisure Properties, Inc., 845 Berkshire Blvd., Suite 200, Wyomissing, Pennsylvania 19610.
GLPI Common Stock |
||||||||||||
Name and Address of Beneficial Owner
|
Shares
|
%
|
||||||||||
Peter M. Carlino(1)(2)
|
|
11,209,993
|
|
|
5.254%
|
|
||||||
David A. Handler(3)
|
|
312,461
|
|
|
*
|
|
||||||
Joseph W. Marshall, III(3)
|
|
26,081
|
|
|
*
|
|
||||||
James B. Perry(4)
|
|
9,931
|
|
|
*
|
|
||||||
Earl C. Shanks(5)
|
|
38,377
|
|
|
*
|
|
||||||
Barry F. Schwartz(6)
|
|
19,534
|
|
|||||||||
E. Scott Urdang(3)
|
|
59,971
|
|
|
*
|
|
||||||
William J. Clifford(7)
|
|
351,068
|
|
|
*
|
|
||||||
Steven T. Snyder(8)
|
|
378,409
|
|
|
*
|
|
||||||
Desiree Burke(9)
|
|
76,587
|
|
|
*
|
|
||||||
Brandon J. Moore(10)
|
|
70,487
|
|
|
*
|
|
||||||
All executive officers and directors as a group (11 persons)
|
|
12,552,899
|
|
|
5.884%
|
|
||||||
5% Shareholders Not Listed Above
|
||||||||||||
The Vanguard Group Inc.(11)
|
|
30,977,307
|
|
|
14.520%
|
|
||||||
BlackRock, Inc.(12)
|
|
14,337,616
|
|
|
6.720%
|
|
* | Less than 1% |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 47 |
Notes to Security Ownership of Beneficial Owners and Management Table
(1) | The number of shares in the table includes: (a) 6,821,904 shares owned by the Carlino Family Trust and the Residuary Trust, each described in footnote 2 below, as to which Peter M. Carlino has sole voting power for the election directors and certain other matters and shared investment power and shared voting power with respect to certain matters; (b) 4,278,090 shares jointly-owned with his wife Marshia W. Carlino; and (c) 109,999 shares of restricted stock under which Mr. Carlino has voting rights but his disposition rights are currently restricted. |
(2) | 6,385,203 shares of our common stock are owned by an irrevocable trust, which we refer to as the Carlino Family Trust, among Peter D. Carlino (who passed away in November 2013), his eight children and the former spouse of one of his children, as settlors, and certain trustees, as to which Peter M. Carlino has sole voting power for the election of directors and certain other matters. 436,701 shares are owned by a residuary trust (the Residuary Trust) for the benefit of Peter D. Carlino and his children. Peter M. Carlino, David E. Carlino and Richard J. Carlino have shared investment power and shared voting power with respect to certain matters for the Carlino Family Trust and for the Residuary Trust. The Carlino Family Trust has pledged an aggregate of 1,195,741 shares as security for loans to the trust and for the benefit of trust beneficiaries. |
(3) | Includes 10,338 shares of restricted stock under which each of Messrs. Handler, Urdang and Marshall has voting rights but his disposition rights are currently restricted. |
(4) | Includes 8,197 shares of restricted stock under which Mr. Perry has voting rights but his disposition rights are currently restricted. |
(5) | Includes 8,494 shares of restricted stock under which Mr. Shanks has voting rights but his disposition rights are currently restricted. |
(6) | Includes 9,534 shares of restricted stock under which Mr. Schwartz has voting rights but his disposition rights are currently restricted. |
(7) | Includes 54,999 shares of restricted stock under which Mr. Clifford has voting rights but his disposition rights are currently restricted. |
(8) | Includes 34,999 shares of restricted stock under which Mr. Snyder has voting rights but his disposition rights are currently restricted. Mr. Snyder has pledged an aggregate of 325,086 shares as security for loans. |
(9) | Includes 24,999 shares of restricted stock under which Ms. Burke has voting rights but her disposition rights are currently restricted. |
(10) | Includes 24,999 shares of restricted stock under which Mr. Moore has voting rights but his disposition rights are currently restricted. |
(11) | According to its Schedule 13G/A filed with the SEC on February 7, 2018, consists of shares beneficially owned as of December 31, 2017 by The Vanguard Group Inc. or its subsidiaries, Vanguard Fiduciary Trust Company and Vanguard Investments Australia, Ltd. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355. Vanguard Specialized Funds Vanguard REIT Index Fund reported on a Schedule 13G/A filed on February 1, 2018, that it has the sole power to vote 12,060,685 shares of the our common stock beneficially held by The Vanguard Group, Inc. Vanguard Specialized Funds Vanguard REIT Index Fund is an investment firm located at 100 Vanguard Blvd., Malvern, PA 19355. |
(12) | According to its Schedule 13G filed with the SEC on January 24, 2018, consists of shares beneficially owned as of December 31, 2017 by BlackRock, Inc. and its affiliates. The address of BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
48 | | | Gaming & Leisure Properties Inc. |
EQUITY COMPENSATION PLAN INFORMATION
Equity Compensation Plan Information Table (as of December 31, 2017)
(a) |
(b) |
(c) |
||||||||||||||||||
Plan Category |
Number of securities options, warrants and rights |
Weighted-average exercise price of outstanding options, warrants |
Number
of remaining under equity compensation reflected in (a)) |
|||||||||||||||||
Equity compensation plans approved by shareholders |
1,176,143 | 20.11 | 3,010,999 |
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 49 |
SECTION 16(a) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Companys officers and directors and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership of our common stock and any other equity securities of the Company with the SEC. Such officers, directors and shareholders are required by SEC regulations to furnish us with copies of all such reports that they file. Based solely on a review of copies of reports filed with the SEC and of written representations by officers, directors, and greater than 10% shareholders, we believe that during 2017 all officers, directors, and greater than 10% shareholders subject to the reporting requirements of Section 16(a) filed the required reports on a timely basis.
50 | | | Gaming & Leisure Properties Inc. |
PROPOSAL 2 RATIFICATION OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
A description of aggregate fees for professional services performed in relation to fiscal 2017 and fiscal 2016 is as follows:
Fiscal 2017
|
Fiscal 2016
|
|||||||
Audit Fees Deloitte & Touche LLP(1)
|
$
|
863,600
|
|
$
|
777,500
|
| ||
Audit Fees Predecessor Auditor(1)(2)
|
|
33,500
|
|
|
1,107,229
|
| ||
Audit-Related Fees(3)
|
|
30,500
|
|
|
41,230
|
| ||
Tax Fees
|
|
|
|
|
|
| ||
Total Fees
|
$
|
927,600
|
|
$
|
1,925,959
|
|
(1) | Audit fees include fees associated with the annual audit, reviews of the Companys quarterly reports on Form 10-Q, annual audits required by law for certain jurisdictions, comfort letters, consents and other audit and attestation services related to statutory or regulatory filings. |
(2) | Audit fees for the predecessor auditor in 2016 primarily related to the review of the accounting and debt and equity offering filings related to the Pinnacle acquisition and consent fees in 2017. |
(3) | The fees disclosed under this category consist of fees for an employee benefit plan audit. In 2016 the employee benefit plan audit was completed by our predecessor auditor. |
Our Board of Directors recommends that you vote FOR ratification of the selection of Deloitte & Touche LLP as the Companys independent registered public accounting firm for the fiscal year ending December 31, 2018.
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 51 |
PROPOSAL 3 ADVISORY (NON-BINDING) VOTE TO
APPROVE THE COMPANYS EXECUTIVE COMPENSATION
The Board of Directors unanimously recommends a vote FOR the approval of the compensation of the named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K under the Exchange Act, including the Compensation Discussion and Analysis, the compensation tables and narrative discussion that accompanies the compensation tables.
52 | | | Gaming & Leisure Properties Inc. |
Our Board of Directors recommends that you vote FOR the approval of the Amended Articles as described in this Proposal 4.
54 | | | Gaming & Leisure Properties Inc. |
56 | | | Gaming & Leisure Properties Inc. |
What vote is required to approve each proposal at the Annual Meeting?
Proposal
|
Vote Required
|
Broker Discretionary Voting Allowed
| ||||
Proposal No. 1
|
Election of Directors
|
Plurality of Votes Cast
|
No
| |||
Proposal No. 2
|
Ratification of Appointment of Independent
|
Majority of Votes Cast
|
Yes
| |||
Proposal No. 3
|
Non-Binding Advisory Vote to Approve
|
Majority of Votes Cast
|
No
| |||
Proposal No. 4
|
Amendment and Restatement of the Companys Articles of Incorporation to Adopt Majority Voting in Uncontested Director Elections
|
Majority of Votes Cast
|
No
|
2018 Notice of Annual Meeting of Shareholders and Proxy Statement | | | 57 |