REITs Eye Goal-Setting in Exec Incentives

“We’re seeing a much, much more measured approach as to what meaningful goals are,” says FTI’s Jarret Sues.

ROSELAND, NJ—When it comes to REIT management’s annual incentive plans, shareholder and proxy advisory firms have become more interested in the how than the what. That is to say, they’ve moved away from asking questions about the AIP’s design and toward inquiries about the methods used to determine performance goals.

FTI Consulting’s latest annual study on executive compensation at the 125 top publicly traded REITs, prepared by senior director Jarret Sues, finds investors and advisory firms focusing on questions such as these: “How often has the annual incentive plan paid out above target?” “What is the process for setting performance goals?” “What is the performance range?” “Does the plan allow for payouts above target for performance below the median of the peer group?”