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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Under § 240.14a-12
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check all boxes that apply):
[X] No fee required
[ ] Fee paid previously with preliminary materials.
[ ] Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14(a)-6(i)(1) and 0-11
April 22, 2024
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders which will be held on Wednesday, May 22, 2024 at 2:00 p.m. (EDT). In order to provide an opportunity for greater stockholder participation and reduce the environmental impact of our Annual Meeting, we have decided that our 2024 Annual Meeting will be virtual again this year. You will be able to attend the meeting, vote and submit your questions live via webcast by visiting www.virtualshareholdermeeting.com/CBL2024.
The Notice and Proxy Statement on the following pages contain details concerning the business to come before the meeting. Please sign and return your proxy card in the enclosed envelope, or vote your shares by telephone or via the Internet, to ensure that your shares will be represented and voted at the meeting even if you cannot attend via the live webcast. Even if you plan to attend the meeting via the live webcast, you are urged to sign and return the enclosed proxy card (or voting instruction form, as applicable), or to vote your shares by telephone or via the Internet in accordance with the instructions on the enclosed proxy card or voting instruction form.
Thank you for your support.
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Sincerely, |
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Chief Executive Officer |
CBL ASSOCIATES PROPERTIES, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 22, 2024
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CBL Associates Properties, Inc., a Delaware corporation (the “ Company ”), will be held on Wednesday, May 22, 2024 at 2:00 p.m. (EDT) via live webcast by visiting www.virtualshareholdermeeting.com/CBL2024. You will need the 16-digit control number included on your proxy card or voting instruction form. The meeting will be held for the following purposes:
1. To act on the re-election of the Board of Directors’ seven director nominees to serve for a term of one year and until their respective successors are elected and qualified (“ Proposal 1 ”);
2. To act upon a proposal to ratify the selection of Deloitte Touche LLP (“ Deloitte ”) as the independent registered public accountants for the Company’s fiscal year ending December 31, 2024 (“ Proposal 2 ”);
3. To act upon a proposal for the advisory approval of the compensation of our Named Executive Officers as set forth herein (“ Proposal 3 ”); and
4. To consider and act upon any other matters which may properly come before the meeting or any adjournment thereof.
In order to provide an opportunity for greater stockholder participation and reduce the environmental impact of our Annual Meeting, we have decided that our 2024 Annual Meeting will be virtual again this year. You are entitled to attend and participate in the Annual Meeting only if you were a shareholder of record as of the record date or hold a valid proxy for the meeting. Those shareholders will be able to attend the virtual Annual Meeting, vote their shares and submit questions during the meeting via live audio webcast by visiting: www.virtualshareholdermeeting.com/CBL2024. To participate, you will need the 16-digit control number included in your proxy materials or on your proxy card. Please note that there will be no in-person meeting for you to attend.
In accordance with the provisions of the Company’s Bylaws, the Board of Directors has fixed the close of business on Monday, April 8, 2024, as the record date for the determination of the shareholders entitled to notice of, and to vote at, the Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
Your vote is very important. Whether or not you plan to attend the meeting via live webcast, we urge you to submit your Proxy. To submit your Proxy by mail, please sign, date and promptly return the enclosed Proxy (or voting instruction form) in order to ensure representation of your shares. An addressed envelope for which no postage is required if mailed in the United States is enclosed for that purpose. Alternatively, you may use the toll-free telephone number indicated on the enclosed Proxy (or voting instruction form) to vote by telephone or visit the website indicated thereon to vote via the Internet. This will not prevent you from voting your shares during the meeting if you desire to do so.
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By Order of the Board of Directors |
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Chief Executive Officer |
Chattanooga, Tennessee
April 22, 2024
TABLE OF CONTENTS
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1 |
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4 |
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4 |
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4 |
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5 |
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5 |
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5 |
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6 |
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7 |
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7 |
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12 |
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Operation of the Company’s Business; Certain Aspects of the Company’s Capital Structure |
14 |
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15 |
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16 |
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17 |
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18 |
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18 |
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19 |
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19 |
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20 |
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20 |
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21 |
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23 |
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
26 |
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30 |
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31 |
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31 |
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49 |
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51 |
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52 |
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57 |
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58 |
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59 |
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65 |
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66 |
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71 |
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71 |
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72 |
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Equity Compensation Plan Information as of December 31, 2023 |
73 |
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74 |
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74 |
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75 |
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76 |
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PROPOSAL 2 – RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS |
82 |
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Independent Registered Public Accountants’ Fees and Services |
82 |
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PROPOSAL 3 – ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION |
84 |
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DATE FOR SUBMISSION OF SHAREHOLDER PROPOSALS AND RELATED MATTERS |
85 |
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85 |
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86 |
PROXY STATEM ENT SUMMARY
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 carefully before voting. Page references are supplied in this summary to help you find further information in this Proxy Statement.
Our 2024 Annual Meeting
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Time and Date |
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2:00 p.m. (EDT) on Wednesday, May 22, 2024 |
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Location |
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The Annual Meeting will be held virtually via live webcast. You can join the meeting by visiting www.virtualshareholdermeeting.com/CBL2024 and entering the 16-digit control number listed on your proxy card. |
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Record Date |
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April 8, 2024 |
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Voting |
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Each share is entitled to one vote on each matter to be voted upon at our Annual Meeting. You can vote by proxy utilizing any of the following methods: |
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•
Internet
: Go to the website shown on your Proxy or voting instruction form until 11:59 p.m. Eastern Time, the day before our Annual Meeting.
•
Telephone
: As shown on the Proxy or voting instruction form you received until 11:59 p.m. Eastern Time, the day before our Annual Meeting.
•
Mail
: Mark, sign, date and promptly return your Proxy or voting instruction form.
•
In Person at the Virtual Annual Meeting
: You may vote in person during the virtual Annual Meeting by visiting www.virtualshareholdermeeting.com/CBL2024 and entering the 16-digit control number found on your proxy card or on the voting instruction form you received from your broker.
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Internet Availability
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This Notice of Annual Meeting and Proxy Statement, as well as our Annual Report for the Company’s fiscal year ended December 31, 2023, are also available via the internet at: www.proxyvote.com. |
This Proxy Statement was first provided to shareholders on or about April 22, 2024.
Annual Meeting Proposals and Board Recommendations
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Board
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Page
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Proposal 1 – Election of Directors |
For all nominees |
7 |
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Proposal 2 – Ratification of the selection of Deloitte as our independent registered public accounting firm for 2024 |
For |
82 |
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Proposal 3 – Advisory Vote to Approve the Compensation of Our Named Executive Officers |
For |
84 |
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Transaction of any other business that properly comes before our Annual Meeting |
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1
Director Nominees (Page 7 )
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Board
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Other Public
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Stephen D. Lebovitz |
63 |
1993 |
Chief Executive Officer
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No |
None |
None |
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David J.
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65 |
2021 |
Non-Executive Chairman of the Board of the Company
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Yes |
Audit ($) |
Equity Lifestyle Properties, Inc.;
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Marjorie L. Bowen |
58 |
2021 |
Former Managing Director of the Fairness Opinion Practice at Houlihan Lokey, Inc. |
Yes |
Audit* ($), Nominating/
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Diebold Nixdorf, Incorporated;
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David M.
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66 |
2021 |
Executive Vice President,
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Yes |
Compensation, Nominating/ Corporate Governance* |
EastGroup Properties, Inc. |
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Robert G. Gifford |
67 |
2021 |
Former Chief Executive Officer,
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Yes |
Audit ($), Compensation* |
Lehman Brothers Holding, Inc.
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Jeffrey A.
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40 |
2022 |
Partner,
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Yes |
Compensation, Nominating/ Corporate Governance |
None |
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Michael A. Torres |
63 |
2023 |
Chief Executive Officer and portfolio manager of Adelante Capital Management |
Yes |
Audit ($), Compensation |
None |
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* Denotes Committee Chairman ($) Audit Committee Financial Expert |
||||||
2
Ratification of Auditors (Page 82 )
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We are asking our shareholders to ratify the appointment of Deloitte as the independent registered public accounting firm to serve as our auditors for the year ending December 31, 2024. |
Say-on-Pay (Page 84 )
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Consistent with our shareholders’ preference, our Board of Directors is providing shareholders with an annual vote to approve, on an advisory basis, the compensation of our named executive officers as disclosed in our Proxy Statement. Please review our Compensation Discussion and Analysis (beginning on page 31 ), which describes the principal components of our executive compensation program, the objectives and key features of each component and the compensation decisions made by our Compensation Committee for our named executive officers, and the accompanying executive compensation tables and related information (beginning on page 49 ) for additional details about our executive compensation programs, including information about our named executive officers’ fiscal year 2023 compensation. |
3
PROXY STATEMENT
CBL ASSOCIATES PROPERTIES, INC.
2030 Hamilton Place Blvd.
Suite 500
CBL Center
Chattanooga, Tennessee 37421
(423) 855-0001
ANNUAL MEETING OF SHAREHOLDERS
May 22, 2024
ANNUAL MEETIN G AND PROXIES
The enclosed proxy is solicited by and on behalf of the Board of Directors of CBL Associates Properties, Inc., a Delaware corporation (the “ Company ” or “ CBL ”), for use at the annual meeting of shareholders of the Company (the “ Annual Meeting ”) to be held on Wednesday, May 22, 2024, at 2:00 p.m. (EDT) and at any and all postponements or adjournments thereof. This year’s annual meeting will be an entirely “virtual meeting” of shareholders. You will be able to attend the meeting as well as vote and submit your questions via live webcast by visiting www.virtualshareholdermeeting.com/CBL2024 and entering the 16-digit control number included on your proxy card or on the voting instruction form you received from your broker. Any proxy given may be revoked at any time before it is voted by filing with the Secretary of the Company either an instrument revoking it or a duly executed proxy bearing a later date. All expenses of the solicitation of proxies for the Annual Meeting, including the cost of mailing, will be borne by the Company. In addition to solicitation by mail, Company officers and regular employees may solicit proxies from shareholders by telephone, telegram or personal interview but will not receive additional compensation for such services. The Company also intends to request persons holding stock in their name or custody, or in the name of nominees, to send proxy materials to their principals and request authority for the execution of the proxies. The Company will reimburse such persons for the associated expense.
In order to provide an opportunity for greater stockholder participation and reduce the environmental impact of our Annual Meeting, we have decided that our 2024 Annual Meeting will be virtual again this year. You are entitled to attend and participate in the Annual Meeting only if you were a shareholder of record as of the record date or hold a valid proxy for the meeting. Those shareholders will be able to attend the virtual Annual Meeting, vote their shares and submit questions during the meeting via live audio webcast by visiting: www.virtualshareholdermeeting.com/CBL2024. Please note that there will be no in-person meeting for you to attend.
Important Notice Regarding the Internet Availability of Proxy Materials for the Annual Meeting of Shareholders to Be Held on May 22, 2024:
The Company’s Notice of Annual Meeting and Proxy Statement for the Annual Meeting, as well as our Annual Report for the Company’s fiscal year ended December 31, 2023, are also available at www.proxyvote.com.
VOTING AT THE ANNUAL MEETING
Only shareholders of record at the close of business on April 8, 2024 are entitled to vote on the matters to be presented at the Annual Meeting. The number of shares of the Company’s common stock, par value $.001 per share (“ Common Stock ”), outstanding on such date and entitled to vote was 31,960,508 shares (excluding treasury shares).
4
Quorum Req uirements
The presence in person or by proxy of holders of record of a majority of the outstanding shares of Common Stock is required for a quorum to transact business at the Annual Meeting with respect to those matters requiring approval by the holders of Common Stock (our only outstanding class of capital stock), but if a quorum should not be present, the Annual Meeting may be adjourned from time to time until a quorum is obtained.
Votes Necessary to Ap prove the Proposals
The vote required to approve each of the proposals at the Annual Meeting is as follows:
Each share of Common Stock is entitled to one vote with respect to those matters upon which such share is to be voted. No cumulative voting rights are authorized and dissenters’ rights are not applicable to these matters.
While the Company’s directors will be elected by plurality vote at the Annual Meeting, as further described below under “Corporate Governance Matters – Additional Policy Statements,” the Board of Directors has implemented a majority voting policy under our Corporate Governance Guidelines, which provides that a director who is nominated in an uncontested election, and who receives a greater number of votes “withheld” from his or her election than votes “for” such election, is required to immediately tender his or her resignation to the Board of Directors for consideration.
Under New York Stock Exchange (“ NYSE ”) Rule 452, NYSE member organizations are prohibited from giving a proxy to vote with respect to certain matters, including matters involving (i) an election of directors, (ii) any proposal related to executive compensation (including any shareholder advisory votes on the approval of executive compensation or on the frequency of such shareholder advisory votes) or (iii) an authorization to implement an equity compensation plan, or any material revision to the terms of any existing equity compensation plan, without receiving voting instructions from a beneficial owner. Therefore, brokers will not be entitled to vote shares at the Annual Meeting with respect to Proposal 1 or Proposal 3 without instructions by the beneficial owner of the shares. Beneficial owners of shares held in broker accounts are advised that, if they do not timely provide instructions to their broker, their shares will not be voted in connection with the election of directors (Proposal 1), or with taking action on the advisory resolution approving the compensation of our named executive officers (Proposal 3).
5
Voting Pr ocedures
If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the shareholder of record with respect to those shares and you are receiving a proxy card for the virtual Annual Meeting. If your shares are held in an account at a broker, bank or other similar organization, you are the beneficial owner of shares held in “street name” and you are receiving a voting instruction form. Holders of our Common Stock on the April 8, 2024 record date have three ways to vote: by mail, by phone and via the Internet using a computer:
By Mail: you may complete, sign and return your proxy card (or the voting instruction form received from your broker or bank, as applicable) by pre-paid mail.
By Telephone: you also may use the toll-free telephone number indicated on the proxy card or voting instruction form to vote by telephone until 11:59 p.m. Eastern Time the day before our Annual Meeting.
Via the Internet: you also may visit the website indicated on the proxy card or voting instruction form to vote via the Internet, until 11:59 p.m. Eastern Time the day before our Annual Meeting, or vote online during the virtual Annual Meeting, as describe below.
You must enter the 16-digit control number found on your proxy card (or voting instruction form) in order to vote in advance of the Annual Meeting as described above, and to vote and/or to participate during the Annual Meeting by visiting: www.virtualshareholdermeeting.com/CBL2024. (If you are a “street name” holder and previously requested a legal proxy from your broker, bank or other similar organization, you may also use such legal proxy to vote at and/or participate in the Annual Meeting.) Whether or not you plan to attend the virtual Annual Meeting, we urge you to vote in advance of the Annual Meeting by one of the methods described above.
As noted above, under the rules of the NYSE, on certain routine matters brokers may, at their discretion, vote shares they hold in “street name” on behalf of beneficial owners who have not returned voting instructions to the brokers. Routine matters include the ratification of the selection of the independent registered public accountants (Proposal 2). In instances – such as voting on Proposals 1 and 3 at the Annual Meeting – where brokers are prohibited from exercising discretionary authority (so-called “broker non-votes”), the shares for which they have not received voting instructions are counted as present for the purpose of determining whether or not a quorum exists at the Annual Meeting, but are not included in the vote totals. Because broker non-votes are not included in the vote, they are not counted as votes cast “for” or “against” a proposal. Accordingly, assuming the presence of a quorum at the Annual Meeting, abstentions and broker non-votes will have no effect on the election of any nominee for director under Proposal 1, so long as such nominee receives any affirmative votes, and also will have no effect on the ratification of the selection of the independent registered public accountants under Proposal 2 or the advisory resolution approving compensation of our named executive officers under Proposal 3.
Unless contrary instructions are indicated on the accompanying form of proxy, the shares represented thereby will be voted by the persons named as proxies on such form FOR the election of the Board of Directors’ nominees for re-election as directors of the Company as described in Proposal 1; FOR ratification of the selection of Deloitte as the independent registered public accountants for the Company’s fiscal year ending December 31, 2024 as described in Proposal 2; and FOR the advisory resolution approving compensation of our Named Executive Officers as described in Proposal 3.
6
PROPO SAL 1
ELECTION OF DIRECTORS
General
Our Board of Directors, upon the recommendation of our Nominating/Corporate Governance Committee, has nominated the Company’s seven current directors for re-election by shareholders at this year’s Annual Meeting. A majority of our directors are unaffiliated (“ Independent Directors ”) with the Company and its predecessor entity, CBL Associates, Inc. and its affiliates (“ CBL’s Predecessor ”). Since the Company’s 2014 Annual Meeting, following the declassification of our Board of Directors as approved by our shareholders, all directors have been elected on an annual basis.
Our Board of Directors has delegated to the Nominating/Corporate Governance Committee, pursuant to the provisions of such Committee’s Charter and our Company’s Corporate Governance Guidelines, the responsibility for evaluating and recommending to the Board candidates to be considered as nominees for election as directors of our Company. In discharging these responsibilities, the Nominating/Corporate Governance Committee may solicit recommendations from any or all of the following sources: the Independent Directors, the Chairman of the Board, the Chief Executive Officer, other executive officers, third-party search firms or any other source it deems appropriate. The Nominating/Corporate Governance Committee’s criteria for the evaluation and selection of director candidates are described in more detail below under “Board of Directors’ Meetings and Committees – Nominating/Corporate Governance Committee.”
Director Nominees
Upon the recommendation of the Nominating/Corporate Governance Committee, our Board intends to present for action at the Annual Meeting the re-election of Stephen D. Lebovitz, Marjorie L. Bowen, David J. Contis, David M. Fields, Robert G. Gifford, Jeffrey A. Kivitz and Michael A. Torres, each to serve for a term of one year and until their successors are duly elected and shall qualify. Stephen D. Lebovitz serves as Chief Executive Officer of the Company, and David J. Contis serves as Non-Executive Chairman of the Board. Messrs. Contis, Fields, Gifford, Kivitz and Torres and Ms. Bowen are the Company’s six Independent Directors. Unless authority to vote for such nominees is withheld, the enclosed proxy will be voted for such nominees, except that the persons designated as proxies reserve discretion to cast their votes for other persons in the unanticipated event that any of such nominees is unable or declines to serve.
Mr. Torres was initially appointed to the Board effective June 15, 2023, and was recommended to the Nominating/Corporate Governance Committee and the Board for consideration by Non-Executive Chairman of the Board David Contis and by Chief Executive Officer Stephen Lebovitz, based on his expertise and experience in the commercial real estate and securities industries as well as his prior experience serving as a director on the boards of other companies similar to the Company.
Summary of Board Experience As a general matter, our Board believes that each of our directors has valuable individual qualifications, attributes and skills including significant leadership and strategic planning expertise gained through experience in one or more of the fields and capacities summarized below that, taken together, provide us with the variety and depth of knowledge, judgment and vision necessary to provide effective oversight of the management of a publicly traded real estate investment trust (“ REIT ”) in
7
the shopping center industry such as our Company. The following table highlights our directors’ experience, qualifications, attributes and skills:
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S.
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M.
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D.
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D.
|
R.
|
J.
|
M.
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Chief Executive Officer/President/Founder |
X |
|
X |
|
X |
|
X |
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Chief Operating Officer/Business Unit Chief Executive |
|
|
X |
X |
|
|
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Commercial Real Estate |
X |
|
X |
X |
X |
|
X |
|
Financial Services /
|
X |
X |
X |
|
X |
X |
X |
|
Investment Banking |
|
X |
|
|
|
|
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|
Legal Services |
|
|
X |
X |
|
|
|
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Corporate Restructuring |
|
X |
X |
|
X |
X |
|
|
Corporate Governance |
|
X |
X |
X |
|
|
X |
|
Retail Operations |
|
|
X |
X |
|
|
|
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International Business Experience |
|
|
X |
|
|
|
|
|
MA Transactional Experience /
|
X |
X |
X |
|
X |
X |
X |
|
Risk Oversight / Management |
X |
X |
X |
X |
X |
X |
X |
|
Financial Literacy |
X |
X |
X |
X |
X |
X |
X |
|
Accounting / Audit |
|
X |
X |
|
|
|
X |
|
Human Capital Management /
|
|
|
X |
X |
X |
|
X |
|
ESG Experience |
|
|
X |
X |
|
X |
|
|
Gender Diversity |
|
X |
|
|
|
|
|
|
Ethnic Diversity |
|
|
|
X |
|
|
X |
Additional details concerning the senior executive management, professional, public company and philanthropic leadership experiences that our Board, with the advice of the Nominating/Corporate Governance Committee, has determined qualify each director for service on our Company’s Board of Directors are set forth in each individual’s biography presented below. For each of these individuals, the position(s) shown in the left column represents the individual’s position(s) with the Company and with CBL Associates Management, Inc., a Delaware corporation (the “ Management Company ”), through which the Company’s property management and development activities are conducted.
8
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DIRECTOR NOMINEE |
|
BIOGRAPHICAL INFORMATION |
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Stephen D. Lebovitz Chief Executive Officer Director since 1993 Age – 63 |
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Stephen D. Lebovitz serves as Chief Executive Officer of the Company, and also served as President of the Company prior to Michael I. Lebovitz being promoted to serve as President in June 2018. He previously served as President and Secretary of the Company from February 1999 to January 1, 2010, when he became President and Chief Executive Officer, and has served as a director of the Company since the completion of its initial public offering in November 1993. Since joining CBL’s Predecessor in 1988, Mr. Lebovitz has also served as Executive Vice President – Development/Acquisitions, Executive Vice President – Development, Senior Vice President – New England Office, and as Senior Vice President – Community Center Development and Treasurer of the Company. Before joining CBL’s Predecessor, Mr. Lebovitz was affiliated with Goldman, Sachs Co. from 1984 to 1986.
Mr. Lebovitz is currently Chairman of the Chattanooga Chamber of Commerce CEO Roundtable. He served as Chairman of the International Council of Shopping Centers, Inc. (“ ICSC ”) from May 2015 through May 2016 and is a past Trustee and Divisional Vice President of the ICSC (2002-08), as well as a former member of the Advisory Board of Governors of the National Association of Real Estate Investment Trusts (“ NAREIT ”). Mr. Lebovitz holds a Bachelor’s degree in Political Science from Stanford University and a Master of Business Administration degree from Harvard University. Stephen D. Lebovitz is a son of Charles B. Lebovitz, Chairman Emeritus of the Company, and a brother of Michael I. Lebovitz and Alan L. Lebovitz. |
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David J. Contis Chairman of the Board Director since 2021 Age – 65 |
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David J. Contis joined the Board on November 1, 2021. Mr. Contis is the Non‑Executive Chairman of the Company’s Board of Directors and serves as a member of the Audit Committee of the Company’s Board of Directors. Mr. Contis is the founder and President, since May 2017, of AGORA Advisors, Inc., which provides consulting services to real estate and retail companies in North and South America. Mr. Contis was President - Mall Platform and Senior Executive Vice president of Simon Properties Group, Inc., a publicly traded retail REIT, from May 2011 to May 2017. He previously served as President of Real Estate for Sam Zell’s Equity Group Investments from November 2006 to May 2011, and was Executive Vice President and Chief Operating Officer of The Macerich Company, a publicly traded shopping center REIT, from May 1997 to October 2006. Mr. Contis was employed in various capacities by affiliates of Equity Group Investments from 1980 to 1997, including as Vice Chairman, Executive Vice President and Chief Operating Officer of Equity Properties Development L.P., from 1992 to 1997.
Mr. Contis has served on the boards of various companies, including his current service on the board of Equity Lifestyle Properties, Inc. a NYSE-listed REIT, where he chairs the Compensation, Nominating and Corporate Governance Committee and serves as a member of the Audit Committee. Mr. Contis also is a director and serves on the Investment Committee of Acosta Verde, which owns and operates shopping centers in Mexico and is listed on the Mexican Stock Exchange. He also serves as Senior Managing Director of the private Chai Trust Company. Mr. Contis is a graduate of DePaul University and DePaul University College of Law. |
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9
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DIRECTOR NOMINEE |
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BIOGRAPHICAL INFORMATION |
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Marjorie L. Bowen Director since 2021 Age – 58 |
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Marjorie L. Bowen joined the Board as of November 1, 2021. Ms. Bowen serves as Chair of the Audit Committee and as a member of the Nominating/Corporate Governance Committee of the Company’s Board of Directors. Ms. Bowen is a former Managing Director of the fairness opinion practice at Houlihan Lokey, having served in that capacity from 2000 through 2007 after having originally joined Houlihan Lokey in 1989. She has significant experience in the public REIT sector and has served as a Board member of numerous public and private companies in a variety of industries and has extensive Board experience with companies undergoing restructuring.
A qualified NYSE and NASDAQ financial expert, Ms. Bowen has chaired Special Committees, Audit Committees and Restructuring/Strategic Committees. In 2023, Ms. Bowen was appointed to the Board of Directors of Diebold Nixdorf, Incorporated, where she currently serves on the Audit Committee and as Chair of the Finance Committee. She has previously served on the boards of Bed Bath Beyond Inc. (2022-2023); Sequential Brands Group, Inc. (2021-2022); Centric Brands, Inc. (2020); Genesco, Inc. (2018-2019); Navient Corporation (2019-2020); and ShoreTel Inc. (2016-2017). Ms. Bowen graduated with an M.B.A. from the University of Chicago Booth School of Business and holds a B.A., cum laude from Colgate University. |
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David M. Fields Director since 2021 Age – 66 |
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David M. Fields joined the Board as of November 1, 2021. Mr. Fields serves as Chair of the Nominating/Corporate Governance Committee and as a member of the Compensation Committee of the Company’s Board of Directors. Mr. Fields has over 30 years of experience leading operations, administration and legal affairs for companies with large-scale branded real estate holdings. Since 2014, he has served as Executive Vice President, Chief Administrative Officer and General Counsel for Sunset Development Company, the developer of Northern California’s 585-acre Bishop Ranch. Prior to joining Sunset Development, Mr. Fields served as Executive Vice President, Chief Administrative Officer at Bayer Properties. Mr. Fields joined Bayer from the Irvine Company in Newport Beach, California, where he served as Vice President and General Counsel of Irvine’s retail properties division.
Mr. Fields also currently serves as a director and a member of the Board’s Compensation and Nominating and Corporate Governance Committees of EastGroup Properties, Inc., a NYSE-listed real estate investment trust focused on industrial properties. Mr. Fields is a graduate of Yale University and received his law degree from Harvard University. |
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DIRECTOR NOMINEE |
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BIOGRAPHICAL INFORMATION |
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Robert G. Gifford Director since 2021 Age – 67 |
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Robert G. Gifford joined the Board as of November 1, 2021. Mr. Gifford serves as Chair of the Compensation Committee and as a member of the Audit Committee of the Company’s Board of Directors. Mr. Gifford served as President and Chief Executive Officer of AIG Global Real Estate from 2009 through 2016. Previously he was a Principal with AEW Capital Management for 22 years, holding leadership positions in acquisitions, capital markets/capital raising, portfolio and asset management.
Mr. Gifford currently serves as a Director of Lehman Brothers Holding Inc., and previously served on the Boards of NYSE-listed real estate investment trusts Retail Properties of America (2016-2021) and Liberty Property Trust (2018-2020). He is also a member of the Advisory Boards of The Davis Companies, a private real estate investor, developer and operator based in Boston, Massachusetts, and Milhaus, a private multi-family developer based in Indianapolis, Indiana. Mr. Gifford received a B.A. from Dartmouth College and a master’s degree in Public and Private Management from the Yale School of Management. |
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Jeffrey A. Kivitz Director since 2022 Age – 40 |
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Jeffrey A. Kivitz joined the Board on August 10, 2022. Mr. Kivitz serves as a member of the Compensation and Nominating/Corporate Governance Committees of the Company’s Board of Directors. Mr. Kivitz is a Partner in Canyon Partners LLC (together with its affiliates, “ Canyon ”), where he focuses on investments in the technology, software, building product, financial and retail sectors. Prior to joining Canyon in August of 2008, Mr. Kivitz worked as a consultant in both the private equity and general consulting practices at Bain Company, where he acted as an advisor on buyout and corporate strategy. Mr. Kivitz received a B.A. in Economics, cum laude, from Williams College.
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Michael A. Torres Director since 2023 Age – 63 |
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Michael A. Torres joined the Board as of June 15, 2023. Mr. Torres serves as a member of the Audit and Compensation Committees of the Company’s Board of Directors. Mr. Torres is Chief Executive Officer and portfolio manager of Adelante Capital Management, having joined Adelante in February 1995. He has over 37 years of real estate and securities research experience. Prior to joining Adelante, Mr. Torres was the Director of Real Estate Research and a portfolio manager for Wilshire Asset Management. At Wilshire, he created the Wilshire Real Estate Securities Index, widely recognized as the industry’s performance benchmark.
Mr. Torres serves on the Board of Directors of Renova Therapeutics, and Colovore LLC. He is on the Cristo Rey De La Salle HS President’s Advisory Council, the BEE Partners LP Advisory Board, and Investment Committee for the Stern Grove Festival Foundation. He has also served as a UC Berkeley Foundation Trustee. Mr. Torres is currently an active member of the NorCal YPOG Chapter. Mr. Torres received a B.A. in Architecture and an M.B.A. from University of California, Berkeley. |
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE RE-ELECTION OF THE SEVEN DIRECTOR NOMINEES NAMED ABOVE |
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Additional Exec utive Officers
Set forth below is information with respect to those individuals serving as executive officers of the Company as of April 8, 2024 (other than Stephen D. Lebovitz):
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Name |
Age |
Current Position (1) |
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Andrew F. Cobb |
55 |
Executive Vice President – Accounting |
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Jennifer H. Cope |
44 |
Executive Vice President – Operations Services Risk Management |
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Jeffery V. Curry |
63 |
Chief Legal Officer and Secretary |
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Howard B. Grody |
63 |
Executive Vice President – Leasing |
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Benjamin W. Jaenicke |
40 |
Executive Vice President – Chief Financial Officer and Treasurer |
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Joseph H. Khalili |
44 |
Executive Vice President – Financial Operations |
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Alan L. Lebovitz |
56 |
Executive Vice President – Management |
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Michael I. Lebovitz |
60 |
President |
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Katie A. Reinsmidt |
45 |
Executive Vice President – Chief Operating Officer |
(1) The position shown represents the individual’s position with the Company and with the Management Company.
Andrew F. Cobb serves as Executive Vice President – Accounting, a position to which he was promoted in September 2021. He also serves as a member of the Company’s Benefits Committee. Mr. Cobb joined CBL in June 2002 as Vice President – Accounting, and previously served as Senior Vice President – Director of Accounting from February 2015 through his promotion in September 2021 and as Vice President – Director of Accounting from February 2007 to February 2015. Prior to joining the Company, Mr. Cobb was with Arthur Andersen LLP from 1991 to 2002, serving as an audit manager from 1996 to 2002. Mr. Cobb is a certified public accountant, licensed in the State of Tennessee and a member of the Tennessee Society of Certified Public Accountants. Mr. Cobb received a Bachelor of Science in Accounting from Tennessee Technological University.
Jennifer H. Cope serves as Executive Vice President – Operations Services Risk Management, a position to which she was promoted in May 2023. Ms. Cope joined CBL in 2001 as a junior financial services analyst and held various roles supporting financial services. In 2015, she transitioned to CBL’s business transformation team and was promoted to Vice President – Shared Services. In that role, Ms. Cope led the Company’s Shared Services and Operations Services divisions and, in 2021, she was promoted to Senior Vice President – Operations Services. Throughout her tenure with CBL, Ms. Cope has served various roles including supporting and participating in the Company’s insurance programs, risk management programs, technology initiatives, joint venture relations, loan closings and operations services. Ms. Cope received a Bachelor of Science in Finance and a Master of Business Administration degree from the University of Tennessee at Chattanooga.
Jeffery V. Curry serves as Chief Legal Officer and Secretary of the Company. Mr. Curry initially was appointed to serve as Interim Chief Legal Officer of the Company simultaneously with the creation of the Chief Legal Officer position by the Board in February 2012, which appointment was made permanent effective April 3, 2012. He was appointed Secretary of the Company effective September 10, 2012. Mr. Curry also serves as the Company’s Compliance Officer. He previously had served since 1986 as a legal advisor to the Company. Prior to joining the Company, Mr. Curry was a partner in the national law firm of
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Husch Blackwell LLP, counsel to the Company, a position he held since 2006 when he joined the local office of that firm along with a group of lawyers relocating from a firm that formerly provided legal services to the Company. Mr. Curry received his Doctor of Jurisprudence degree in 1985 from the University of Memphis Cecil C. Humphreys School of Law, where he was on the Editorial Board of the Law Review, and received a LL.M. in Taxation from New York University School of Law in 1986. Mr. Curry serves as a vice president and a member of the board of directors for Chattanooga Inner City Outreach, Inc., a local non-profit organization, and he is a member of the Chattanooga Bar Association and the Tennessee Bar Association.
Howard B. Grody serves as Executive Vice President – Leasing, a position to which he was promoted in September 2021. Mr. Grody previously served as Senior Vice President – Leasing of the Company from June 2008 through his promotion in September 2021 and as Vice President – Mall Leasing since 2000. Mr. Grody joined CBL in 1991 as a Leasing Manager for the Turtle Creek Mall development in Hattiesburg, Mississippi, and subsequently was promoted to the position of Senior Leasing Manager, where he had leasing responsibility for many of the Company’s properties throughout the country. Prior to joining CBL, Mr. Grody worked in the real estate industry with Sizeler Real Estate Properties. Mr. Grody was awarded the designation of Certified Leasing Specialist as recognized by ICSC in 1994, the program’s inaugural year, and was awarded the designation of Senior Certified Leasing Specialist in 2008. Mr. Grody has served two terms on the ICSC Certified Leasing Specialist Committee. Mr. Grody received his Bachelor of Science in Management degree from Tulane University.
Benjamin W. Jaenicke serves as Executive Vice President – Chief Financial Officer and Treasurer, a position he has held since January 2023. Mr. Jaenicke joined CBL in September 2022 as Executive Vice President – Finance. Prior to joining CBL, Mr. Jaenicke spent more than a decade with Wells Fargo (and predecessor firm Eastdil Secured) in real estate investment banking. In his role at Wells Fargo, he worked closely with executives across the real estate industry on strategic and capital planning including advising clients on MA transactions, recapitalizations, and capital markets executions. Prior to joining Wells Fargo/Eastdil, he worked at PricewaterhouseCoopers where he performed audits and other accounting services for public REIT clients. Mr. Jaenicke holds a Bachelor of Science in Business and a Master of Accounting from Miami University and received his MBA from the University of Virginia Darden School of Business. He is a CFA charterholder and former Certified Public Accountant.
Joseph H. Khalili serves as Executive Vice President – Financial Operations, a position to which he was promoted in May 2023. Mr. Khalili joined CBL in 2012 as a portfolio accountant focused on third-party managed properties and was promoted to Acquisitions Analyst in 2014. In 2016, he assumed the role of Director – Financial Planning and Analysis and, in 2019, was promoted to Vice President – Financial Operations and Administration. As Mr. Khalili assumed and continued his leadership of the Company’s financial planning and budgeting teams, he was promoted to Senior Vice President – Financial Operations and then to his current position. Prior to joining CBL, Mr. Khalili spent seven years with General Growth Properties. Mr. Khalili received his Bachelor of Science in Finance from the University of Tennessee at Chattanooga.
Alan L. Lebovitz serves as Executive Vice President – Management of the Company. Mr. Lebovitz served as Senior Vice President - Asset Management of the Company from February 2009 to February 2018, when he was promoted to his current position. He previously served as Vice President - Asset Management having held that position from 2002 through February 2009, and had served in various positions in management, leasing and development since joining the Company in 1995. Prior to joining CBL in 1995, Mr. Lebovitz received his B.A. from Northwestern University in 1990, was affiliated with Goldman, Sachs Co. from 1990 to 1992 and obtained an M.B.A. from Vanderbilt University. He has been an active community volunteer for organizations that include: Alzheimer Association’s Mid‑South Chapter, B’nai Zion Synagogue, Chattanooga Area Chamber of Commerce - Leadership Chattanooga and Workforce Development Task Force, Chattanooga Public Education Foundation, Jewish Federation of Greater Chattanooga, The McCallie School, Normal Park Museum Magnet School, and United Way of Greater Chattanooga. Alan L. Lebovitz is a son of Charles B. Lebovitz and a brother of Stephen D. Lebovitz and Michael I. Lebovitz.
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Michael I. Lebovitz serves as President of the Company. Mr. Lebovitz served as Executive Vice President – Development and Administration of the Company from January 2010 through June 2018, when he was promoted to his current position. Mr. Lebovitz also served as Senior Vice President – Chief Development Officer of the Company from June 2006 through January 1, 2010. Previously, he served the Company as Senior Vice President – Mall Projects, having held that position since January 1997. Prior to that time, Mr. Lebovitz served as Vice President - Development and as a project manager for the Company. Mr. Lebovitz was promoted to Vice President in 1993. Prior to joining CBL’s Predecessor, he was affiliated with Goldman, Sachs Co. from 1986 to 1988. He is past president of the Jewish Community Federation of Greater Chattanooga, a past member of the national board of Hillel and a past member of the national board of Jewish Federations of North America. He formerly served on the United States Holocaust Memorial Council and was National Campaign Chair for the Jewish Federations of North America from 2010 – 2011. He was also a member of the board of the United Way of Greater Chattanooga and formerly served on the board of The McCallie School in Chattanooga. Michael I. Lebovitz is a son of Charles B. Lebovitz and a brother of Stephen D. Lebovitz and Alan L. Lebovitz.
Katie A. Reinsmidt serves as Executive Vice President – Chief Operating Officer of the Company. She also serves as Chairperson of the Company’s Benefits Committee, heads CBL’s ESG Steering Committee and is the Executive Sponsor for the Company’s diversity, equity, inclusion and belonging (“ DEIB ”) council, CBL Community. Ms. Reinsmidt served as Executive Vice President – Chief Investment Officer from February 2017 through May 2023, when she was promoted to her current position. She served as Senior Vice President – Investor Relations/Corporate Investments of the Company from September 2012 through February 2017. Ms. Reinsmidt joined the Company as Director of Investor Relations in 2004 and previously was promoted to Director – Corporate Communications and Investor Relations in 2008 and to Vice President – Corporate Communications and Investor Relations of the Company in 2010. Prior to joining the Company, Ms. Reinsmidt served as an Associate Analyst at A.G. Edwards Sons in St. Louis, Missouri, where she provided research coverage for retail, healthcare and lodging REITs. Ms. Reinsmidt received her Bachelor of Science degree in Economics from the University of Missouri – St. Louis. She also serves as a Trustee and Vice Chairperson of the City of Chattanooga General Pension Board, and served as its Secretary from February 2017 through May 2023 and Vice Chairperson from March 2011 through February 2017.
Involvement in Certain Legal Proceedings
Our financial and operating results during 2020 were significantly impacted by the temporary closure of our portfolio for a significant period due to government mandates and operating restrictions related to the COVID-19 pandemic and, on November 1, 2020, the Company, along with CBL Associates Limited Partnership, a Delaware limited partnership (the Company’s “ Operating Partnership ”) and certain of its direct and indirect subsidiaries, filed voluntary petitions under chapter 11 of title 11 (“ Chapter 11 ”) of the United States Code, pursuant to which the Company subsequently obtained Bankruptcy Court confirmation of a plan (the “ Plan ”) and emerged from Chapter 11 reorganization on November 1, 2021. Certain of our above-referenced executive officers (Stephen D. Lebovitz, Jeffery V. Curry, Alan L. Lebovitz, Michael I. Lebovitz and Katie A. Reinsmidt) were executive officers of the Company at the time of such filing. The Board of Directors does not believe the filing of these Chapter 11 cases is material to an evaluation of the ability or integrity of any of the Company’s executive officers.
Operation of the Company’s Business; Certain Aspects of the Company’s Capital Structure
Our Company operates through its two wholly owned subsidiaries, CBL Holdings I, Inc., a Delaware corporation (“ CBL Holdings I ”), and CBL Holdings II, Inc., a Delaware corporation (“ CBL Holdings II ”). As of the April 8, 2024, record date for the Annual Meeting, through the referenced subsidiaries, our Company currently holds a 1.0% sole general partner interest and a 98.98% limited partner interest, for an aggregate total interest of 99.98% in our Operating Partnership.
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Pursuant to the Operating Partnership Agreement, the limited partners possess certain rights (the “ CBL Rights ”), consisting of the right to exchange all or a portion of their Common Units in the Operating Partnership for shares of Common Stock or their cash equivalent, at the Company’s election. The CBL Rights may be exercised at any time and from time to time to the extent that, upon exercise of the CBL Rights, the exercising party shall not beneficially or constructively own shares of Common Stock in excess of the applicable share ownership limits set forth in the Company’s Certificate of Incorporation. The Company, however, may not pay in shares of Common Stock to the extent that this would result in a limited partner beneficially or constructively owning in the aggregate more than its applicable ownership limit or otherwise jeopardize, in the opinion of counsel to the Company, the Company’s qualification as a REIT for tax purposes.
Our Company conducts substantially all of its business through the Operating Partnership. Our Company conducts its property management and development activities through the Management Company, which is a taxable REIT subsidiary, to comply with certain technical requirements of the Internal Revenue Code of 1986, as amended.
CORPORATE GOVER NANCE MATTERS
Governance Highlights
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6 out of 7 Director nominees are independent
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Independent compensation consultant
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Independent Chairperson
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Performance driven Executive Compensation, including specific ESG Goals
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Separate CEO and Board Chairperson
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Nominating/Corporate Governance Committee oversight of CBL’s ESG Program
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Fully independent Committees and Committee Chairpersons
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Prohibition against hedging, pledging and margin lending using Company shares
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All Directors elected annually
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Double-trigger Change of Control for Executive Compensation
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Director resignation policy
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Code of Conduct and Business Ethics for officers, employees and Directors certified annually
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Annual Board and Committee evaluations
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Robust minimum stock ownership requirements for executive officers and Non-employee Directors
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All Audit Committee Members
are Audit Committee Financial Experts |
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CBL does not make political contributions
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Our Board has adopted guidelines on corporate governance (including director independence criteria), committee charters, and a code of business conduct and ethics setting forth the Company’s corporate governance principles and practices. These documents can be accessed in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com. Effective as of November 1, 2021, our Company adopted the Second Amended and Restated Guidelines on Corporate Governance incorporating all previous guidelines on corporate governance, including all of the additional policy statements that had previously been added to such guidelines as described below, and also to eliminate the Executive Committee, add ESG oversight responsibilities to the Nominating/Corporate Governance Committee and revise the policy on Minimum Stock Ownership for Executive Officers with respect to the Chief Executive Officer, as described below. The Second Amended and Restated Corporate Governance Guidelines, as further amended by the Board of Directors effective November 10, 2022 to revise and clarify the minimum stock ownership guidelines for our Non-Employee Directors and Executive Officers, are referred to herein as the “ Corporate Governance Guidelines ”). See also “Corporate Governance Matters – Additional Policy Statements” below.
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Director In dependence
Our Board has adopted a set of director independence standards (“ Director Independence Standards ”) for evaluating the independence of each of the directors in accordance with the requirements of the SEC and of the NYSE corporate governance standards. The Director Independence Standards are included as an exhibit to our Company’s Corporate Governance Guidelines, which can be found in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com. Pursuant to NYSE Rule 303A.02(a) and the provisions of our Company’s Director Independence Standards (as set forth below), our Board has reviewed whether any director has any relationship with the Company’s independent auditors that would preclude independence under SEC and NYSE rules, or any material relationship with our Company (either directly or as a partner, member, shareholder or officer of an organization that has a relationship with the Company) which could (directly or indirectly) materially impact the ability of such director or nominee to exert his or her independent judgment and analysis as a member of our Board. As a result of this review, our Board affirmatively determined that six of our Company’s seven current directors were independent under the standards of the SEC and NYSE and as set forth in our Company’s Director Independence Standards. Stephen D. Lebovitz, who is the Chief Executive Officer of our Company and an employee of the Management Company, was deemed not independent.
In making the independence determinations with respect to the Company’s current Independent Directors, the Board of Directors considered the following factors:
In each case, the Board of Directors determined that the factors described above did not interfere with the independence of each of the above-referenced Independent Directors.
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Additional Poli cy Statements
As described above, the Company has included additional policy statements as part of the Corporate Governance Guidelines. A summary of these policy statements, as so amended and currently in effect, is as follows:
Director Resignation Policy – a policy statement that requires a director who is nominated in an uncontested election but does not receive a “majority vote” to immediately tender his or her resignation to the Board of Directors for consideration. A “majority vote” means that the number of shares voted “for” a director must exceed the number of votes “withheld” with respect to the election of that director. The policy provides that if a director does not receive a “majority vote” and tenders his or her resignation, the Nominating/Corporate Governance Committee will make a recommendation to our Board of Directors on whether to accept or reject the resignation. The Board will then consider the Nominating/Corporate Governance Committee’s recommendation and publicly disclose its decision to either accept or reject the resignation within 90 days from the date of certification of the election results. The director whose resignation is being considered will not participate in the recommendation of the Nominating/Corporate Governance Committee or the decision of the Board of Directors.
Limits on Other Board Participation – a policy statement that limits to four (4) the number of other public company boards (not counting the Company’s Board) upon which a director may serve at any given time.
Minimum Stock Ownership for Non-Employee Directors – as amended, a policy statement that provides that by five (5) years from the later of (i) the adoption of the revised policy (November 10, 2022) or (ii) becoming a member of the Company’s Board, a Non‑Employee Director (a director that is not an employee of the Company, currently, the Independent Directors) must accumulate and hold at least an amount of shares of the Company’s Common Stock having a value, determined as set forth in the policy statement, equal to not less than five (5) times the amount of the Annual Cash Retainer that such Non‑Employee director shall receive from the Company. This policy statement includes an exemption for any Non‑Employee director who is prohibited by law or by the regulations of his or her employer from having an ownership interest in the Company’s securities.
Minimum Stock Ownership for Executive Officers – a policy statement that provides that by five (5) years from the later of (i) the adoption of the revised policy (November 10, 2022) or (ii) becoming an executive officer, such officer must own an amount of the Company’s Common Stock, determined as set forth in the policy statement, having a value at least equal to the following formula amounts:
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Executive Officer |
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Level of Stock Ownership |
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Chief Executive Officer |
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6x prior calendar year’s annual base salary |
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President |
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3x prior calendar year’s annual base salary |
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Chief Financial Officer |
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3x prior calendar year’s annual base salary |
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Chief Operating Officer |
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3x prior calendar year’s annual base salary |
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Chief Legal Officer |
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3x prior calendar year’s annual base salary |
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Executive Vice Presidents |
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3x prior calendar year’s annual base salary |
Additional Policies Applicable to Minimum Stock Ownership Requirements for Non-Employee Directors and Executive Officers – For purposes of these requirements, the ownership of interests that are exchangeable for shares of Company stock (such as stock options, performance stock units (“ PSUs ”), restricted stock units (“ RSUs ”) or similar interests) will be deemed “owned” by an individual only after (A) as to stock options, the individual’s exercise of such stock options and the resulting acquisition of shares of stock; and (B) as to PSUs, RSUs and similar interests: (i) a determination that the performance goals or factors that must be satisfied to allow for the exchange of such PSUs, RSUs or similar interests for shares of stock have been met and (ii) such exchange is then implemented. A valuation formula for purposes of annual compliance testing under these requirements provides that shares of the Company’s Common Stock will be “valued” for such purpose at the greater of (A) their actual cost basis, for shares purchased by a Non-Employee Director or executive officer, (B) the tax basis for shares awarded to Non-Employee
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Directors and executive officers on a compensatory basis or (C) the average value of the Company’s Common Stock for the calendar year preceding the year in which such testing occurs, determined by using the average of the closing prices of the Company’s Common Stock on the NYSE on each trading day in the preceding calendar year. Further, any exceptions to the required minimum stock ownership levels for any Non-Employee Director or executive officer will be subject to review and discretionary approval by the Chairman of the Board’s Compensation Committee (or by the Chairman of the Nominating/Corporate Governance Committee, if such exception involves the Chairman of the Compensation Committee).
Changes in Director’s Principal Occupation or Business Association – a policy statement that provides that when the principal occupation or business association of a member of the Board of Directors changes substantially from the position he or she held at the time of their most recent election to the Board, such director shall promptly notify, in writing, the Chairperson of the Nominating/Corporate Governance Committee (or the other members of the Nominating/Corporate Governance Committee, if such affected director is the Chairperson). The Nominating/Corporate Governance Committee shall then review – with the affected director abstaining if he or she is a member – whether it is appropriate and in the best interests of the Company to allow the continued participation of such director as a member of the Board of Directors of the Company. If the Nominating/Corporate Governance Committee recommends that such director should no longer serve as a member of the Board of Directors of the Company as a result of such change, and the full Board of Directors (excluding the director at issue) ratifies such recommendation, then the Board of Directors shall request that the affected director submit a letter of resignation.
Initial Term of Director Appointed to Fill a Board Vacancy – a policy statement that provides that any director appointed by the Board of Directors of the Company to fill a vacancy created by the departure of another director shall serve only until the next regularly scheduled annual meeting of the Company’s shareholders. In order for such director to continue to serve thereafter, he or she must be nominated and duly elected for another full term.
Executive Sessions for Independent Directors
In accordance with the NYSE Rule 303A.03, the Independent Directors of the Company meet from time to time in scheduled executive sessions without management participation. Currently, these executive sessions are chaired by David J. Contis in his capacity as Non-Executive Chairman of the Board. The Independent Directors met in four executive sessions during 2023.
Board Leaders hip Structure
Our Board of Directors has no formal policy with respect to the separation of the offices of Chairman and Chief Executive Officer. Pursuant to the terms of the Plan and concurrently with the November 1, 2021 Effective Date, Jonathan M. Heller became Non-Executive Chairman of the Board of Directors. David J. Contis succeeded Mr. Heller as Non-Executive Chairman of the Board in conjunction with Mr. Heller’s resignation in January 2023.
In connection with each of these changes to the structure of Company’s Board leadership, our Board of Directors also has considered the strong, ongoing leadership and oversight role played by the Company’s Independent Directors, which may be summarized as follows:
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Board Diversity
The Board values diversity and believes that having a diverse Board is a competitive advantage that will make our Company stronger over time. We believe it is important to routinely assess the composition of the Board with a goal of striking a balance between the knowledge and understanding of the business that comes from longer-term service on the Board and the fresh ideas and perspective that can come from adding new members. We consider all dimensions of diversity in selecting directors (as summarized below for our current Director Nominees), including race, gender, sexual orientation, depth and breadth of professional and life experiences, and ethnic background and will continue to pursue opportunities to improve Board diversity.
Average Director Age: 60.3 years Average Tenure: 6.1 years Independence: 86%
Gender Diversity: 14% Racial/Ethnic Diversity: 29%
Board and Management R ole in Risk Oversight
Assessing and managing risk is the responsibility of the management of our Company. Our Board is responsible for overseeing our risk management. The Board administers its risk oversight function through (1) the review and discussion of regular periodic reports to the Board and its committees on topics relating to the risks that the Company faces, including, among others, market conditions, tenant concentrations and credit worthiness, leasing activity, the status of current and anticipated development projects, compliance with debt covenants, management of debt maturities, access to debt and equity capital markets, environmental and social matters, cybersecurity risks and threat mitigation related to our technology and information systems, existing and potential legal claims against the Company and various other matters relating to the Company’s business; (2) the required approval by the Board of Directors of significant transactions that entail the expenditure of funds or incurrence of debt or liability in amounts in excess of certain threshold dollar amounts; (3) the review and discussion of regular periodic reports to the Board and its committees from the Company’s independent registered public accountants regarding various areas of potential risk, including, among others, those relating to the qualification of the Company as a REIT for tax purposes; and (4) the direct oversight of specific areas of the Company’s business by the Compensation, Audit and Nominating/Corporate Governance Committees.
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In addition, under its charter, the Audit Committee is specifically responsible for reviewing and discussing management’s policies with respect to risk assessment and risk management. The Company’s Director of Internal Audit meets regularly in executive sessions with the Audit Committee (at least quarterly and more frequently if necessary), for discussions of the Company’s oversight of risk through the internal audit function, including an annual review of the Company’s internal audit plan, which is focused on significant areas of financial, operating, and compliance risk, and periodic updates on the results of completed internal audits of these significant areas of risk. The Audit Committee also monitors the Company’s SEC disclosure compliance, and any related reporting risks, and receives regular reports from the Company’s Compliance Committee which assists the Audit Committee in exercising certain oversight responsibilities concerning the Company’s use of interest rate hedging instruments to manage our exposure to interest rate risk (including but not limited to entering swaps for such purpose and the exemption of any such swaps from applicable execution and clearing requirements).
Cybersecurity Risk Oversight and Mitigation
As part of its regular oversight of risk management, the Audit Committee also is responsible for the oversight of cybersecurity risk and threat mitigation related to our information technology and information systems, including protection and security of employee and customer data. Our Vice President – Technology Solutions is responsible for the day-to-day management of our cybersecurity program and reports directly to our President. The Audit Committee is responsible for overseeing cybersecurity risks, and Management reports to the Audit Committee on the Company’s cybersecurity program, current cybersecurity projects and industry trends and efforts to mitigate cybersecurity risk on at least a semi-annual basis. Additional information concerning the Company’s cybersecurity risk management and mitigation programs is set forth in Item 1C – Cybersecurity, contained in our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement.
Communicating With the Board of Directors
The Company provides a process for shareholders and other interested parties to send communications to the Board or any of our directors. Such persons may send written communications to the Board or any of the directors c/o CBL Investor Relations, CBL Properties, 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee, 37421-6000. All communications will be compiled by the Company’s Executive Vice President – Chief Operating Officer and submitted to the Board or to the individual director(s) to whom such communication is addressed. It is the Company’s policy that all directors attend the Annual Meeting unless they are prevented from attending due to scheduling conflicts or important personal or business reasons; provided, however, it is the Company’s policy that a majority of the directors (including a majority of the Company’s Independent Directors) attend each Annual Meeting. Except for Robert G. Gifford, who was traveling internationally at the time, all of the other then-current directors of the Company attended the virtual 2023 Annual Meeting of Shareholders.
Code of Business C onduct and Ethics
Our Board has adopted a Fourth Amended and Restated Code of Business Conduct and Ethics (the “ Code of Business Conduct ”) that applies to all directors, officers and employees, including the Company’s principal executive officer, principal financial officer and principal accounting officer. The Code of Business Conduct is available in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com, or at no charge by directing a written request for a copy to the Company at CBL Properties, CBL Center, Suite 500, 2030 Hamilton Place Blvd., Chattanooga, Tennessee 37421-6000, Attention: CBL Investor Relations. The purpose of the Code of Business Conduct is to provide a codification of standards that is reasonably designed to deter wrongdoing and to promote accountability for and adherence to the standards of the Code, including honest and ethical conduct, as well as the prompt internal reporting to an appropriate person or persons of violations of the Code; the ethical handling of actual or apparent conflicts of interest between personal and professional
20
relationships; full, fair, accurate, timely and understandable disclosure in the Company’s filings with the SEC and in other public communications by the Company; and compliance with all applicable rules and regulations that apply to the Company and to its directors, officers and employees. On at least an annual basis, all employees and Directors of the Company are required to reaffirm their understanding of and willingness to comply with this Code by acknowledging such in writing or in a secure electronic form.
CBL’s ESG Team was established in 2021 to advance and sharpen the Company’s focus on sustainability, social and corporate governance, as well as on ESG reporting. In 2023, with the addition of a dedicated ESG officer to our leadership team, we updated our approach to ESG governance. We have changed our ESG Team to an ESG Executive Steering Committee. The Executive Steering Committee is sponsored by our Chief Operating Officer and chaired by the Vice President – ESG. The Committee members represent key departments such as Operations, Management, Communications, Accounting, People and Culture and Technology Solutions. The Committee meets quarterly and provides direction, feedback, guidance, and resourcing for the company’s ESG strategy. Oversight of CBL’s ESG initiatives is the responsibility of the Nominating/Corporate Governance Committee of CBL’s Board of Directors, which receives reports on at least a bi-annual basis.
CBL believes that we should embrace corporate responsibility, promoting a culture of accountability, fairness, and transparency in how we manage our relationships with investors, team members, tenants, and partners. We have a comprehensive set of policies and procedures that govern the activities of the group, including:
SOCIAL POLICIES: CBL sets standards on diversity and equal opportunity employment, worker rights, discrimination, stakeholder engagement, employee performance and career development, human rights and workplace accountability, freedom of association, and labor practices.
GOVERNANCE POLICIES: CBL maintains standards and policies on bribery and corruption, data protection privacy, cybersecurity, executive compensation, fiduciary duty, fraud, political contributions, whistleblower protection, internal audit, and risk management.
SUSTAINABILITY POLICIES: CBL maintains policies outlining CBL’s commitment and programs related to sustainable building practices, sustainable property management, and is implementing green lease language in new lease contracts.
Environmental Programs
The Company is committed to reducing waste through the use of environmentally friendly materials, domestic products, and the implementation of green building practices in our new development projects, redevelopments and renovations.
As part of our ongoing commitment to reducing our overall environmental impact, in 2023 we published our first ESG Update report, which highlighted our activities and achievements in 2022 and for a portion of 2023. We also published a Sustainable Development Policy, which helps guide the way we approach development and redevelopment. Additionally, after initially working with a third-party consultant, in 2023 we made the decision to bring the tracking of our consumption data in-house. In 2024, we are working to implement an ESG data management program, which will help us utilize this data to better measure and report portfolio consumption. During 2023, we completed seven new energy efficient lighting projects, which resulted in an estimated additional 4.05 million KwH savings annually. Additionally, we expanded existing partnerships and formed new partnerships with electric vehicle charging providers and increased the number of available charging stations to 129 across 18 properties. We are continuing to actively evaluate solar power pilot programs.
21
Social Programs
We believe that we are stronger as a team and that collectively we can make an even bigger positive impact on our communities. CBL Cares, a team-member-led program that launched in 2012, gives our team the opportunity to do just that by contributing financially to a CBL Cares fund and contributing significant additional support through volunteer efforts, as discussed below. The CBL Cares committee reviews applications from non-profit organizations as well as recommendations from other team members and provides financial support to a wide array of organizations that work to meet the diverse needs of our communities. Through CBL Cares, each team member is provided 16 hours per year of volunteer time, making it easy for them to give of their time and expertise to an organization that means the most to them.
In 2023, CBL team members volunteered 947 hours with non-profit organizations through our CBL Cares volunteer program, an increase over 2022. In total, through volunteer hours, corporate donations and CBL Cares funds, we provided support valued at nearly $200,000 to organizations across our portfolio that work to meet the diverse needs of our communities. Lastly, through our annual United Way workplace campaign, our team contributed more than $117,500 to United Way.
Diversity, Equity, Inclusion and Belonging
CBL has long valued an inclusive and welcoming environment for our team members and the communities we serve. We are committed to a workplace free from discrimination and harassment, and we value the diverse perspectives, backgrounds, and experiences that we derive from our team, our tenants and our customers.
Over the last few years, CBL has taken steps to enhance its efforts around creating a culture of inclusion and belonging and in 2023 we made significant progress in several areas. Internally, CBL Community, which we launched in 2021, organized eight in-person or hybrid trainings and Fireside Chats to help educate and inform CBL team members on various aspects of diversity. These events allow the CBL team to hear directly from their fellow team members as well as subject matter experts on topics such as racial bias, anxiety, grief, LGBTQ+ issues, and the intergenerational workplace. We introduced the Fireside Chat Forum, which gives team members an opportunity to participate in small-group conversations about the topics covered during Fireside Chats. We also published four educational resource guides for our team members and hosted an MLK day speaker and service project. In the first quarter of 2023, the entire CBL team participated in unconscious bias training.
Externally, our efforts over the past year have been focused on diversifying our tenant mix. In 2023, we hosted seven small business expos including black-owned, women-owned and veteran-owned business expos, and continued our work with Open to All, an organization focused on eliminating racial bias in the retail industry. In an effort to expand our recruiting outreach, we continued our partnership with Transition Overwatch, which targets Veterans. We also partnered with Project Destined, which targets underrepresented groups in our industry to host an intern in our Marketing Department and participated in Chattanooga-based STEP-UP internship program to offer two internship roles to underrepresented area high school students. As we further execute on our diversity and inclusion strategic plan, in 2024, we will continue to provide training opportunities for our entire team. We will continue and work to expand our small business expos program. We will host additional Fireside Chat events on a regular basis and work to introduce new education opportunities and programs.
Our People
We believe our people are critical to the success of our company, and we are committed to providing a work environment that attracts, develops, and retains high-performing team members. In addition to competitive compensation and benefits, we believe investing in the ongoing development of our team is critical to the success of the organization and the overall wellbeing of our team members. In 2023, we held our CBL U Leadership Conference, which provided our team with several learning opportunities as well as a chance to network with teammates and external vendors.
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Other training opportunities provided throughout the year included participation in various leadership programs as well as ad hoc training programs on topics such as career development and skills training; health, well-being, and safety; DEIB; cybersecurity, and more. Team members may also utilize our tool for self-guided learning and on-demand educational content across a variety of topics. Our team members dedicated a total of 6,885 hours to training and development over the course of 2023, which included company-wide annual required ethics and cybersecurity training.
In 2023, we completed our annual employee engagement assessment. The survey netted a 77% response rate and secured CBL Great Place to Work Certification™, with 95% of employees saying it is a great place to work. We are proud of the culture we have created at CBL and are very gratified to have our hard work recognized with this prestigious designation.
More information on our sustainability, diversity and inclusion, social responsibility, community involvement and employee engagement initiatives is available on dedicated web pages at www.cblproperties.com/esg-commitment/overview. The information on our web site is not, and should not be considered to be, a part of this Proxy Statement.
Board of Directors’ Me etings and Committees
The Company’s Board of Directors met five times during 2023. Each director attended more than 75% of the aggregate of (i) the total number of Board meetings and (ii) the total number of meetings of Board committees on which the director served at the time during 2023.
Our Board of Directors has established standing Audit, Compensation and Nominating/ Corporate Governance Committees, as described in more detail below. Copies of each of the three committee charter documents referenced below are available and can be accessed in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com, or at no charge by written request to CBL Investor Relations at the address provided above.
23
Additional information with respect to the three standing committees of the Company’s Board of Directors is as follows:
|
The Audit Committee |
||
|
Current Members: Marjorie L. Bowen (Chair) David J. Contis Robert G. Gifford Michael A. Torres
2023 Committee
5 meetings
Governing Document: Second Amended and Restated Charter adopted August 14, 2013
|
|
The Audit Committee is responsible for the engagement of the independent auditors and the plans and results of the audit engagement. The Audit Committee approves audit and non-audit services provided by the independent auditors and the fees for such services and reviews the adequacy of the Company’s internal accounting controls as well as the Company’s accounting policies and results and management’s policies with respect to risk assessment and risk management, including oversight of cybersecurity risk and threat mitigation related to our information technology and information systems. The Audit Committee also exercises certain oversight responsibilities concerning the Company’s use of interest rate hedging instruments to manage our exposure to interest rate risk (including but not limited to entering swaps for such purpose and the exemption of any such swaps from applicable execution and clearing requirements). The Board of Directors has determined that each member of the Audit Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 and 303A.07(b) of the listing standards of the NYSE as currently applicable, and also has determined that each of Marjorie L. Bowen, David J. Contis, Robert G. Gifford and Michael A. Torres qualify as an “audit committee financial expert” as such term is defined by the SEC. |
|
The Compensation Committee |
||
|
Current Members: Robert G. Gifford (Chair) David M. Fields Jeffrey A. Kivitz Michael A. Torres
2023 Committee
3 meetings
Governing Document:
Second Amended and Restated Charter adopted
|
|
The Compensation Committee generally reviews and approves compensation programs and, specifically, reviews and approves salaries, bonuses, stock awards and stock options for officers of the Company of the level of executive president or higher. The Compensation Committee administers the CBL Associates Properties, Inc. 2021 Equity Incentive Plan (the “ 2021 Equity Incentive Plan ”), but typically has delegated the responsibility for routine, ministerial functions related to such plan and its predecessor plans, such as the documentation and record-keeping functions concerning awards issued under such plans, to employees in the Company’s accounting and finance departments, with assistance from Company counsel. The Compensation Committee also approves and oversees the Annual Incentive Plan and Long-Term Incentive Program components of the Company’s incentive programs for its Named Executive Officers. The Compensation Committee engages the independent compensation consulting firm Ferguson Partners Consulting, L.P. (“ Ferguson ”) to provide assistance and advice on the composition and components of the Company’s executive compensation. The discussion herein under the section entitled “Executive Compensation – Compensation Discussion and Analysis,” together with the section entitled “Director Compensation,” provides additional information concerning the Compensation Committee’s processes and procedures for setting director and executive officer compensation. The Board of Directors has determined that each member of the Compensation Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 and 303A.05(a) of the listing standards of the NYSE as currently applicable. |
24
|
The Nominating/Corporate Governance Committee |
||
|
Current Members: David M. Fields (Chair) Marjorie L. Bowen Jeffrey A. Kivitz
2023 Committee
5 meetings
Governing Document:
Second Amended and Restated Charter adopted
|
|
The Nominating/Corporate Governance Committee reviews and makes recommendations to the Board of Directors regarding various aspects of the Board of Directors’ and the Company’s governance processes and procedures. The Nominating/Corporate Governance Committee also evaluates and recommends candidates for election to fill vacancies on the Board, including consideration of the renominations of members whose terms are due to expire. As an additional element of its primary responsibilities, the Nominating/Corporate Governance Committee provides assistance and oversight concerning the Company’s responsibilities, initiatives and programs involving ESG matters. The Nominating/Corporate Governance Committee requires a majority of the Company’s directors to be “independent” in accordance with applicable requirements of the rules of the SEC and NYSE (including certain additional independence requirements for Audit Committee and Compensation Committee members). A set of uniform Director Independence Standards, which was used in making all such Independent Director determinations, is included in the Company’s Corporate Governance Guidelines, a copy of which is available in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com. In addition, and as part of the evaluation of potential candidates, the Nominating/Corporate Governance Committee considers the breadth of a candidate’s business and professional skills and experiences, reputation for personal integrity, and ability to devote sufficient time to Board service, as well as the Company’s needs for particular skills, insight and/or talents on the Board of Directors. While the Company has no related, formal policy, both the Nominating/Corporate Governance Committee and the Board consider diversity in identifying director nominees, to assist in achieving a mix of Board members that represents a diversity of perspective, background, gender, ethnicity and experience. For incumbent directors, the Nominating/Corporate Governance Committee reviews such directors’ overall service during their term, including the number of meetings attended, level of participation and quality of performance. The Nominating/Corporate Governance Committee will consider candidates for Board of Directors’ seats proposed by shareholders. Any such proposals should be made in writing to CBL Properties, 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee, 37421-6000, Attention: Corporate Secretary, and must be received no later than December 23, 2024, in order to be considered for inclusion in the Company’s proxy statement for the 2025 Annual Meeting. In order to be considered by the Nominating/Corporate Governance Committee, any candidate proposed by shareholders will be required to submit appropriate biographical and other information equivalent to that required of all other director candidates, including consent to an initial background check. The Nominating/Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates on the criteria set forth above regardless of whether the candidate was recommended by a shareholder or by the Company. As noted above, during 2023 Mr. Torres was recommended to the Nominating/Corporate Governance Committee and Board for consideration by the Company’s Non-Executive Chairman of the Board and by the Chief Executive Officer. The Board of Directors has determined that each member of the Nominating/Corporate Governance Committee is an Independent Director pursuant to the independence requirements of Sections 303A.02 of the listing standards of the NYSE as currently applicable. |
25
SECURITY OWNERSHIP O F CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information available to the Company as of April 8, 2024, with respect to the ownership of Common Stock by (i) each person known to the Company to be the beneficial owner of more than 5% of the outstanding Common Stock, (ii) each director of the Company, (iii) each Named Executive Officer of the Company, as defined below, and (iv) all directors and executive officers as a group. Except as otherwise indicated, each person named below has sole investment and voting power with respect to the securities shown. Except as otherwise indicated, the address of each beneficial owner of more than 5% of the outstanding Common Stock is the Company’s address.
|
|
Number of Shares(1) |
Rule 13d-3 Percentage(1) |
Fully Diluted Percentage(2) |
|
Canyon Capital Advisors LLC (3) 2728 North Harwood Street, 2nd Floor Dallas, TX 75201 |
8,466,294 |
26.5% |
26.5% |
|
Oaktree Capital Management (4)
333 S. Grand Avenue, 28th Floor
|
3,983,967 |
12.5% |
12.5% |
|
Strategic Value Partners, LLC and related entities (5)
100 West Putnam Avenue
|
3,260,400 |
10.2% |
10.2% |
|
Howard Amster and related entities (6)
7681 Olympia Drive
|
2,327,601 |
7.3% |
7.3% |
|
BlackRock, Inc. (7)
50 Hudson Yards
|
1,993,143 |
6.2% |
6.2% |
|
The Vanguard Group, Inc. (8)
100 Vanguard Blvd.
|
1,802,911 |
5.6% |
5.6% |
|
Cetus Capital VI, L.P. and related entities (9)
8 Sound Shore Drive, Suite 303
|
1,744,602 |
5.5% |
5.5% |
|
Stephen D. Lebovitz (10) |
352,397 |
1.1% |
1.1% |
|
Benjamin W. Jaenicke (11) |
54,423 |
* |
* |
|
Michael I. Lebovitz (12) |
87,367 |
* |
* |
|
Jeffery V. Curry (13) |
91,620 |
* |
* |
|
Katie A. Reinsmidt (14) |
89,698 |
* |
* |
|
Marjorie L. Bowen (15) |
26,077 |
* |
* |
|
David J. Contis (16) |
70,522 |
* |
* |
|
David M. Fields (17) |
18,577 |
* |
* |
|
Robert M. Gifford (18) |
18,577 |
* |
* |
|
Jeffrey A. Kivitz (19) |
10,243 |
* |
* |
|
Michael A. Torres (20) |
5,215 |
* |
* |
|
All executive officers and directors and director nominees
|
986,506 |
3.1% |
3.1% |
* Less than 1%
26
(1) The Company conducts all of its business activities through the Operating Partnership. Pursuant to the Fifth Amended and Restated Agreement of Limited Partnership of CBL Associates Limited Partnership (the “ Operating Partnership Agreement ”), each of the partners of the Operating Partnership has the right, pursuant to the exercise of CBL Rights as described above, to exchange all or a portion of such partner’s Common Units or Special Common Units (as applicable) in the Operating Partnership for shares of Common Stock or their cash equivalent, at the Company’s election. Under the terms of Rule 13d-3 promulgated under the Exchange Act, shares of Common Stock that may be acquired within 60 days are deemed outstanding for purposes of computing the percentage of Common Stock owned by a shareholder. Therefore, for purposes of Rule 13d-3 of the Exchange Act, percentage ownership of the Common Stock is computed based on the sum of (i) 31,960,508 shares of Common Stock actually outstanding as of April 8, 2024 (excluding treasury shares) and (ii) as described in the accompanying footnotes, each individual’s or entity’s share (if applicable) of 5,298 shares of Common Stock that may be acquired upon exercise of CBL Rights by the individual or entity whose percentage of share ownership is being computed (but not taking account of the exercise of CBL Rights by any other person or entity). Amounts shown were determined without regard to applicable ownership limits contained in the Company’s Second Amended and Restated Certificate of Incorporation (the “ Certificate of Incorporation ”).
(2) The Fully-Diluted Percentage calculation is based on (i) 31,960,508 shares of Common Stock outstanding (excluding treasury shares) and (ii) assumes the full exercise of all CBL Rights for shares of Common Stock by all holders of Common Units and Special Common Units of the Operating Partnership (in each case, without regard to applicable ownership limits), for an aggregate of 31,965,806 shares of Common Stock.
(3) In a Schedule 13D/A filed on August 10, 2022 (the “ Canyon 13D ”) by Canyon Capital Advisors LLC (“ CCA ”), Mitchell R. Julis and Joshua S. Friedman, as supplemented by additional information reported in a SEC Form 4 filed September 22, 2023 (collectively, the “ Canyon Reports ”): (i) CCA reported that it beneficially owns, and has sole voting power and sole dispositive power with respect to, 8,466,294 shares of Common Stock; (ii) Mr. Julis and Mr. Friedman each may be deemed to beneficially own and have shared voting power and shared dispositive power over all of the shares reported in the Canyon Reports, by virtue of the fact that they manage CCA and control entities which own 100% of CCA; and (iii) CCA is an investment advisor, direct or indirect, to various managed accounts, including those listed in the Canyon Reports, with the right to receive, or the power to direct receipt of, dividends from, or the proceeds from the sale of the securities held by, such managed accounts.
(4) In a Schedule 13D/A filed on April 22, 2022 (the “ Oaktree 13D ”), Oaktree Capital Management and several of its related parties reported ownership of an aggregate of 3,983,967 shares of Common Stock held directly by OCM Xb CBL-E Holdings, LLC (“ Xb CBL-E ”). Xb CBL-E reported having sole voting power and sole dispositive power over all of such shares. The Oaktree 13D further disclosed that the following additional parties joined in the filing in the following capacities: (a) Oaktree Fund GP, LLC (“ Fund GP ”) as the general partner of Xb CBL‑E; (b) Oaktree Fund GP I, L.P. (“ GP I ”) as the managing member of Fund GP; (c) Oaktree Capital I, L.P. (“ Capital I ”) as the general partner of GP I; (d) OCM Holdings I, LLC (“ Holdings I ”) is the general partner and a limited partner of Capital I; (e) Oaktree Holdings, LLC (“ Holdings ”) as the managing member of Holdings I; (f) Oaktree Capital Group, LLC (“ OCG ”) as the managing member of Holdings; (g) Oaktree Capital Group Holdings GP, LLC (“ OCGH GP ”) as the indirect owner of the class B units of OCG; (h) Brookfield Asset Management Inc. (“ BAM ”) as the indirect owner of the class A units of OCG; and (i) BAM Partners Trust (“ BAM Partnership ”) as the sole owner of Class B Limited Voting Shares of BAM. Each of Fund GP, GP I, Capital I, Holdings I, Holdings, OCG, OCGH GP, BAM and BAM Partnership also reported having sole voting power and sole dispositive power over the shares held directly by Xb CBL-E.
(5) In a Schedule 13D filed on September 1, 2022 (the “ Strategic Value Partners 13D ”), as supplemented by additional information reported in a SEC Form 4 filed November 13, 2023 (collectively, the “ Strategic Value Partners Reports ”), Strategic Value Partners, LLC and several of its affiliates reported ownership of an aggregate of 3,243,989 shares of Common Stock, consisting of shares held directly by the following entities, each of which reported having shared voting power and shared dispositive power over all of such entity’s reported shares:
|
Entity Identified as Holding Shares Directly |
No. of Shares |
|
Strategic Value Capital Solutions Offshore Fund, L.P. (“Capital Solutions Offshore Fund”) |
409,305 |
|
Strategic Value Capital Solutions Offshore Fund, L.P. (“Capital Solutions Fund”) |
138,796 |
|
Strategic Value Sullivan Offshore Fund, L.P. (“Sullivan Offshore Fund”) |
48,615 |
|
Strategic Value Opportunities Fund, L.P. (“Opportunities Fund”) |
129,428 |
|
Strategic Value Special Situations Offshore Fund IV, L.P. (“Special Situations Offshore Fund IV”) |
753,111 |
|
Strategic Value Special Situations Fund IV, L.P. (“Special Situations Fund IV”) |
296,095 |
|
Strategic Value Special Situations Offshore Fund V, L.P. (“Special Situations Offshore Fund V”) |
848,997 |
|
Strategic Value Special Situations Fund V, L.P. (“Special Situations Fund V”) |
490,906 |
|
Strategic Value Excelsior Fund, L.P. (“Excelsior Fund”) |
129,394 |
27
|
Entity Identified as Holding Shares Directly |
No. of Shares |
|
Strategic Value Capital Solutions Master Fund L.P. |
4,052 |
|
Strategic Value Special Situations Master Fund IV, L.P. |
2,589 |
|
Strategic Value Special Situations Master Fund V, L.P. |
9,112 |
|
TOTAL REPORTED HOLDINGS |
3,260,400 |
The Strategic Value Partners 13D further disclosed that the following additional parties joined in the filing in the following capacities: (a) SVP Capital Solutions LLC (“ SVP Capital Solutions ”) as the investment manager of Capital Solutions Offshore Fund, Capital Solutions Fund and Sullivan Offshore Fund (Series 1); (b) SVP Special Situations III-A LLC (“ SVP Special Situations III-A ”) as the investment manager of Opportunities Fund; (c) SVP Special Situations IV LLC (“ SVP Special Situations IV ”) as the investment manager of Special Situations Offshore Fund IV and Special Situations Fund IV; (d) SVP Special Situations V LLC (“ SVP Special Situations V ”) as the investment manager of Special Situations Offshore Fund V, Special Situations Fund V and Sullivan Offshore Fund (Series 2); (e) SVP Excelsior Management LLC (“ SVP Excelsior ”) as the investment manager of Excelsior Fund; (f) Strategic Value Partners LLC (“ Strategic Value Partners ”) as the managing member of SVP Capital Solutions, SVP Special Situations III-A, SVP Special Situations IV, SVP Special Situations V and SVP Excelsior; and (g) Victor Khosla (“ Mr. Khosla ”) as an individual who holds indirect majority ownership and control with respect to Strategic Value Partners and also serves as the Chief Investment Officer of Strategic Value Partners. Each of SVP Capital Solutions, SVP Special Situations III-A, SVP Special Situations IV, SVP Special Situations V and SVP Excelsior reported having shared voting power and shared dispositive power over the shares held by the respective entities for which each such entity serves as investment manager as described above. Pursuant to the Strategic Value Partners Reports, each of Strategic Value Partners (as managing member of each of the entities indicated above) and Mr. Khosla reported having shared voting power and shared dispositive power over the aggregate of 3,260,400 shares held directly by the twelve funds listed in the table above.
(6) In a Schedule 13D filed on March 14, 2023 (the “ Amster 13D ”), Howard Amster and eighteen other related entities reported ownership of an aggregate of 2,327,601 shares of Common Stock, consisting of shares held directly as follows:
|
Entity Identified as Holding Shares Directly |
No. of Shares |
|
Howard Amster (individually) |
1,485,909 |
|
Ramat Securities Ltd. LLC |
108,153 |
|
Pleasant Lake Apartments Corp. |
506 |
|
Pleasant Lake Apts. Limited Partnership |
350,318 |
|
Pleasant Lake Skoien Investments LLC |
75,567 |
|
Laughlin Holdings LLC |
101,935 |
|
Amster Limited Partnership (“Amster LP”) |
8,257 |
|
Howard M. Amster Foundation (“Amster Foundation”) |
2,348 |
|
Samuel J. Heller Trust U/A dated 8/7/2002 (the “Heller Trust) |
2,430 |
|
Howard Amster 2005 Charitable Remainder Unitrust U/A dated 1/11/2005
|
439 |
|
Howard Amster 2019 Charitable Remainder Unitrust Nos. 1, 2, 3, 4, 5 and 7, each U/A dated 5/20/2019 (aggregate holdings) (collectively, the “Amster 2019 Charitable Trusts”) |
3,511 |
|
Howard Amster 2021 Charitable Remainder Unitrust #1 U/A dated 8/10/2021
|
177 |
|
Howard Amster 2005 Charitable Remainder Unitrust #3 U/A dated 11/23/2021
|
165,836 |
|
Howard Amster 2022 Charitable Remainder Unitrust #1 U/A dated 3/9/2022
|
22,215 |
|
TOTAL REPORTED HOLDINGS |
2,327,601 |
The Amster 13D reported that Mr. Amster has shared voting power and shared dispositive power with respect to 2,430 reported shares held by the Heller Trust, in his capacity as one of three trustees, and that he may be deemed, in the aggregate, to have sole voting and sole dispositive power with respect to 2,325,171 of the reported shares. The Amster 13D reported that this total includes the following shares as to which Mr. Amster has sole voting power and sole investment power: shares held by Mr. Amster individually and shares held by Ramat Securities Ltd., in his capacity as authorized representative and majority member. The Amster 13D also reported that such total includes the following shares as to which Mr. Amster may be deemed to have sole or shared voting power and sole or shared dispositive power: (i) shares held by Pleasant Lake Apartments Corp., Pleasant Lake Apts. Limited Partnership, Laughlin Holdings, LLC and Pleasant Lake Skoien Investments LLC, in his capacity as President of Pleasant Lake Apartments Corp. which serves as the General Partner of Pleasant Lake Apts. Limited Partnership
28
and as the Manager of Laughlin Holdings, LLC and Pleasant Lake Skoien Investments LLC; (ii) shares held by Amster LP (in his capacity as General Partner); (iii) shares held by Amster Foundation (in his capacity as President); and (iv) in his capacity as sole trustee, shares held by the Amster 2005 Charitable Trust, the Amster 2019 Charitable Trusts, the Amster 2021 Charitable Trust #1, the Amster 2021 Charitable Trust #3 and the Amster 2022 Charitable Trust #1.
(7) In a Schedule 13G/A filed on February 6, 2024, Cetus Capital VI, L.P. and three other related entities reported ownership, as of December 31, 2023, of an aggregate of 1,744,602 shares of Common Stock, consisting of: (i) 543,773 shares held by Cetus Capital VI, L.P. with sole voting power and sole dispositive power; (ii) 133,916 shares held by Littlejohn Opportunities Master Fund LP with sole voting power and sole dispositive power; (iii) 1,042,378 shares held by OFM II, L.P. with sole voting power and sole dispositive power; and (iv) 24,535 shares held by VSS Fund, LP with sole voting power and sole dispositive power.
(8) In a Schedule 13G filed on January 29, 2024 by BlackRock, Inc. (“ BlackRock ”), BlackRock reported that as of December 31, 2023, it beneficially owned 1,993,143 shares of Common Stock in its capacity as a parent holding company or control person with respect to the entities listed in Exhibit A thereto. BlackRock reported that it possessed sole dispositive power with respect to all of such shares of Common Stock, and sole voting power with respect to 1,953,986 of such shares of Common Stock.
(9) In a Schedule 13G/A filed on February 13, 2024 by The Vanguard Group, Inc. (“ Vanguard ”), Vanguard reported that as of December 29, 2023, it beneficially owned 1,802,911 shares of Common Stock, in its capacity as investment adviser to various investment companies registered under the Investment Company Act of 1940, as amended, and other managed accounts that have the right to receive or the power to direct the receipt of dividends from, or proceeds from the sale of, such shares. Vanguard reported it possesses shared voting power with respect to 40,132 of such shares, sole dispositive power with respect to 1,748,229 of such shares and shared dispositive power with respect to 54,682 of such shares.
(10) Includes (i) 163,660 shares of unrestricted Common Stock owned directly; (ii) 188,441 shares of restricted Common Stock that Stephen D. Lebovitz received under the 2021 Equity Incentive Plan; and (iii) 296 shares of Common Stock owned by a trust, as to which Mr. Lebovitz serves as trustee, for the benefit of the children of one of his brothers (of which Mr. Lebovitz disclaims beneficial ownership).
(11) Includes 54,423 shares of restricted Common Stock that Mr. Jaenicke received under the 2021 Equity Incentive Plan.
(12) Includes (i) 42,579 shares of unrestricted Common Stock owned directly; (ii) 44,220 shares of restricted Common Stock that Michael I. Lebovitz received under the 2021 Equity Incentive Plan; (iii) 10 shares owned by Mr. Lebovitz’ wife; and (iv) 558 shares owned by trusts, as to which Mr. Lebovitz serves as trustee, for the benefit of the children of two of his brothers (of which Mr. Lebovitz disclaims beneficial ownership).
(13) Includes (i) 47,400 shares of unrestricted Common Stock owned directly (including 21,094 shares which Mr. Curry holds in a joint account with his wife, as to which Mr. Curry has shared voting and dispositive power) and (ii) 44,220 shares of restricted Common Stock that Mr. Curry received under the 2021 Equity Incentive Plan.
(14) Includes (i) 45,478 shares of unrestricted Common Stock owned directly and (ii) 44,220 shares of restricted Common Stock that Ms. Reinsmidt received under the 2021 Equity Incentive Plan.
(15) Includes (i) 20,862 shares of unrestricted Common Stock owned directly and (ii) 5,215 shares of restricted Common Stock granted to Ms. Bowen under the 2021 Equity Incentive Plan.
(16) Includes (i) 40,307 shares of unrestricted Common Stock owned directly and (ii) 30,215 shares of restricted Common Stock granted to Mr. Contis under the 2021 Equity Incentive Plan.
(17) Includes (i) 13,362 shares of unrestricted Common Stock owned directly and (ii) 5,215 shares of restricted Common Stock granted to Mr. Fields under the 2021 Equity Incentive Plan.
(18) Includes (i) 13,362 shares of unrestricted Common Stock owned directly and (ii) 5,215 shares of restricted Common Stock granted to Mr. Gifford under the 2021 Equity Incentive Plan.
(19) Includes (i) 5,028 shares of unrestricted Common Stock owned directly and (ii) 5,215 shares of restricted Common Stock granted to Mr. Kivitz under the 2021 Equity Incentive Plan.
(20) Includes 5,215 shares of restricted Common Stock granted to Mr. Torres under the 2021 Equity Incentive Plan.
29
(21) Includes an aggregate of (i) 467,257 shares of unrestricted Common Stock beneficially owned directly or indirectly by members of such group and (ii) 519,249 shares of restricted Common Stock that members of such group received under the 2021 Equity Incentive Plan.
Delinquent Sectio n 16(a) Reports
Section 16(a) of the Exchange Act requires the Company’s directors, executive officers and persons who own more than ten percent of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in beneficial ownership of Common Stock and other equity securities of the Company. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) reports they file.
Based solely upon the Company’s review of copies of such reports furnished to it through the date hereof, or written representations that no other reports were required to be filed, the Company believes that during the fiscal year ended December 31, 2023 all officers, directors and ten percent shareholders complied with the filing requirements applicable to them, except for one Form 4 report covering one transaction filed late by Benjamin W. Jaenicke.
30
EXECUTIVE C OMPENSATION
Compensation Discus sion and Analysis
Introduction
This Compensation Discussion and Analysis reviews the factors, objectives and policies underlying each element of compensation paid for fiscal year 2023, and certain elements of our 2024 compensation program, for the following five individuals who are “named executive officers” as determined under SEC rules (the “ Named Executive Officers ” or “ NEOs ”):
|
Named Executive Officer |
Title |
|
Stephen D. Lebovitz |
Chief Executive Officer |
|
Benjamin W. Jaenicke |
Executive Vice President – Chief Financial Officer and Treasurer |
|
Michael I. Lebovitz |
President |
|
Katie A. Reinsmidt |
Executive Vice President – Chief Operating Officer |
|
Jeffery V. Curry |
Chief Legal Officer and Secretary |
2023 Performance Highlights
In 2023, CBL made substantial progress in executing our short-term and long-term strategies. Below is a summary of our 2023 financial and performance highlights:
31
Executive Compensation Design and Annual “Say-on-Pay” Advisory Vote
We provide shareholders with an annual “say-on-pay” advisory vote on the Company’s compensation program for our Named Executive Officers. In 2023, shareholder support for our compensation programs continued to be strong with over 98% of votes cast in approval for the second straight year. Our Compensation Committee believes that our shareholders’ substantial approval over the past five years indicates strong support for our approach to executive compensation.
|
Say-on-Pay Shareholder Approval Rating |
|
|
2023 |
98% |
|
2022 |
98% |
|
2021 |
93% |
|
2020 |
92% |
|
2019 |
91% |
Benchmarking and Use of Executive Compensation Peer Groups
To help ensure that CBL’s executive compensation programs are fair, competitive and support retention, we annually review compensation programs of a peer group. Generally, peers are selected based on similar size (defined as 0.5x to 2.5x CBL in terms of total capitalization), industry (regional malls and shopping centers) and companies with which we may compete for executive talent. While the Compensation Committee does not set specific competitive pay targets or objectives in conducting these reviews, it has utilized these reviews to generally compare the compensation of the Company’s NEOs with similarly situated executive officers at peer companies.
The Compensation Committee, with input from Ferguson, reviews the peer group annually to add or eliminate companies based on changes to their size or industry focus. The chart below lists the companies included in the peer group the Compensation Committee has utilized in conducting reviews for 2023 and 2024, including three REIT peers added for 2023 as a result of the annual review process with Ferguson:
|
2023 2024 Executive Compensation Peer Group for CBL |
|
|
•
Acadia Realty Trust (NYSE – AKR)
|
•
RPT Realty (NYSE – RPT)
(1)(2)
|
|
•
InvenTrust Properties Corp. (NYSE – IVT)
(1)
|
•
SITE Centers Corp. (NYSE – SITC)
(1)
|
|
•
Kite Realty Group Trust (NYSE – KRG)
|
•
Tanger Factory Outlet Centers, Inc. (NYSE – SKT)
|
|
•
Phillips Edison Company (NASDAQ – PECO)
|
•
The Macerich Company (NYSE – MAC)
|
|
•
Retail Opportunity Investments Corp. (NASDAQ – ROIC)
|
•
Urban Edge Properties (NYSE – UE)
|
|
|
|
Subject to the adjustments noted above for transactional activity involving the peer companies, the Compensation Committee continued to utilize this same peer group for 2024 as a result of the annual review with Ferguson.
32
Summary of Our Executive Compensation Program:
The elements of our senior executive compensation program are summarized in the table below, followed by additional details concerning the Compensation Committee’s actions on base salaries and incentive compensation awards for the Company’s NEOs during 2023 and early 2024.
|
Element |
Objectives |
Key Features |
Summary of Recent
|
|
Base Salary |
▪
Attract and retain high performing executives
▪
Provide competitive fixed pay that takes into consideration each individual’s level of responsibility, experience, and tenure with the Company
|
▪
Fixed element of compensation
|
▪
2023
: During Q-4 2022, determined to maintain 2023 NEO Base Salaries at 2022 levels
▪
2024
: During Q-4 2023, again determined to maintain 2024 NEO Base Salaries at 2023 levels, apart from raise for new COO and increase for CFO per the terms of his initial Employment Agreement
|
|
Annual Incentive Plan (AIP) |
▪
On an annual basis, motivates the achievement of company and individual strategic objectives
▪
Balances objectivity with subjectivity to support the Company’s annual business plan and operating goals
▪
Drives annual performance that ultimately creates shareholder value
|
▪
Objective measures under the AIP program include Corporate Goals related to (1) Operational Goals and (2) Financial Goals,
each as set by the Compensation Committee and described further below
▪
Subjective goals vary per individual based on responsibilities
|
▪
2023:
AIP Target compensation values increased by 5% over 2022 and the objective Corporate Goals consolidated into two categories (operational and financial goals)
▪
2024
: AIP Target values again increased by 5% over 2023, with further reallocation of certain amounts from 2024 LTIP Targets to 2024 AIP Targets, as endorsed by Ferguson, to better align the Company’s cash versus equity compensation pay mix with its peers
|
33
|
Element |
Objectives |
Key Features |
Summary of Recent
|
|
Long-Term Incentive
|
▪
Encourages executives to create shareholder value, aligning the interests of executives and shareholders over a longer-term
▪
Incentivizes executives to achieve longer-term corporate goals
▪
Provides a retention mechanism
|
▪
LTIP utilizes a traditional structure with a portion allocated to time-based awards that vest ratably over 3-years, and a portion allocated to Performance Stock Unit awards that may be earned at the end of three-years based on absolute and relative TSR performance
▪
Shares issued at the conclusion of the 3-year performance period for the Performance Stock Units are issued as restricted stock, subject to a one-year cliff vesting
|
▪
2023
: The Compensation Committee approved a traditional LTIP at amounts equal to approximately 10% and 25% of the aggregate value of the 2021 and 2022 emergence awards for the CEO and other NEOs, respectively. Awards to the Company’s new CFO were in accordance with his initial Employment Agreement
▪
2024
: Compensation Committee modifications to second year of awards under the new LTIP, as supported by Ferguson, included:
– reallocating certain amounts from 2024 LTIP Targets to 2024 AIP Targets to better align CBL’s cash versus equity compensation pay mix with its peers;
|
34
Components of Our 2023 Executive Compensation Program:
Base Salaries
Historically, in reviewing and establishing base salaries for NEOs, the Compensation Committee has considered each Named Executive Officer’s level of responsibility, experience and tenure with the Company, as well as such officer’s performance in carrying out his or her responsibilities and overseeing those under his or her supervision.
The Compensation Committee decided to keep 2023 and 2024 base salaries for the NEOs at 2022 levels, except for (i) Mr. Jaenicke’s base salary for 2023 and 2024, which was set pursuant to the terms of his initial employment agreement and (ii) an increase in Ms. Reinsmidt’s base salary (effective January 1, 2024) pursuant to her May 2023 promotion to Executive Vice President – Chief Operating Officer.
|
Named Executive Officer |
|
2022 Base Salary |
|
|
2023
|
|
2024
|
|
Stephen D. Lebovitz |
|
$719,442 |
|
|
$719,442 |
|
$719,442 |
|
Benjamin W. Jaenicke (1) |
|
$350,000 |
|
|
$350,000 |
|
$400,000 |
|
Michael I. Lebovitz |
|
$428,691 |
|
|
$428,691 |
|
$428,691 |
|
Katie A. Reinsmidt |
|
$309,000 |
|
|
$309,000 |
|
$350,000 |
|
Jeffery V. Curry |
|
$406,443 |
|
|
$406,443 |
|
$406,443 |
The base salaries reflected above took effect as of January 1 for each year.
Incentive Compensation Elements: What We Pay and Why
The Compensation Committee established the overall compensation program for our Named Executive Officers, including our NEO incentive program, to appropriately balance compensation based on (i) short-term vs. long-term performance and (ii) operational goals vs. stock price performance. The Compensation Committee further aims to provide an appropriate level of objectivity while retaining some subjectivity and flexibility to support the Company’s business plans and strategy consistent with changing market conditions.
Our Named Executive Officers are compensated separately for short-term performance through cash awards under an Annual Incentive Plan (“ AIP ”), and rewarded for value creation over a multi-year period through a Long-Term Incentive Plan (“ LTIP ”) that maintains accountability for the achievement of longer-term, sustained performance.
35
Annual Incentive Compensation
2023 Annual Incentive Program
In February 2023, the Compensation Committee approved a 2023 AIP for the Named Executive Officers. The 2023 AIP, similar to the Annual Incentive Plans adopted for prior years, is designed to reward the Named Executive Officers for the achievement of two categories of annual Corporate Goals and the achievement of Individual Performance Goals, as assessed by the Compensation Committee. As in 2022 and prior years, for the Chief Executive Officer 70% of the total AIP opportunity was based on the Corporate Goals, which are generally quantitative, and the remaining 30% was based on qualitative Individual Performance Goals. For the other NEOs, 60% of the total award was based on Corporate Goals and the remaining 40% was based on Individual Performance Goals.
The 2023 AIP established Corporate Goals allocated between the following two categories of performance measures: (i) Financial Goals, weighted 42% for the Chief Executive Officer and 36% for the other NEOs and (ii) Operational Goals, weighted 28% for the Chief Executive Officer and 24% for the other NEOs. The remaining portion of the 2023 AIP award was based on specific Individual Goals under the qualitative portion.
A visual overview of the structure of the AIP for the CEO and the other named executive officers is provided below:
|
CEO |
|
Other NEOs |
|
Performance Goals |
|
|
|
|
|
|
|
|
|
|
|
|
|
42% |
|
36% |
|
Financial Goals |
|
|
|
|
|
|
|
|
|
|
|
Corporate Goals |
|
28% |
|
24% |
|
Operational Goals |
|
|
|
|
|
|
|
|
|
|
|
|
|
30% |
|
40% |
|
Individual Goals |
|
|
Qualitative Goals |
For cash bonus awards based on performance in relation to the corporate goals under the AIP:
36
Pursuant to this structure, the actual Corporate Goals established by the Compensation Committee for the 2023 AIP were as follows:
Financial Goals:
Weighting: 42% for CEO/ 36% for Others
|
Goal (1) |
Threshold
|
Target
|
Stretch
|
Actual Results |
|
FFO, as adjusted (“ AFFO ”), as reported in CBL’s Forms 10-K and 10-Q filed with the SEC (the “ Periodic Reports ”) |
$167 million |
$188 million |
$208 million |
AFFO of $213.2 million |
|
Gross Net Operating Income (“ NOI ”), as reported in CBL’s Periodic Reports |
$397 million |
$418 million |
$439 million
|
Gross NOI of $440.6 million |
|
Level of Discretionary Cash Flow achieved (Defined based on CBL’s internal cash projections as cash NOI less general administrative expenses, interest, amortization, capital expenditures and tenant allowances, but before development expenditures and dividends. Excludes cash flows from asset sales, and financing proceeds.) |
$47 million |
$50 million |
$53 million |
Achieved Discretionary Cash Flow (as defined by the Compensation Committee for this purpose)
|
|
Address 2023 property level mortgage maturities through completed or in-process refinancing, extension/ modification, working with lender to convey the property or other satisfactory solution. |
|
Compensation Committee evaluated as 100% achieved, with a total of eleven 2023 property level mortgage maturities having been addressed during the year. |
||
|
Overall Financial Goals Payout |
137.5% |
|||
Operational Goals
Weighting: 28% for CEO/ 24% for Others
|
Goal (1) |
Threshold
|
Target
|
Stretch
|
Actual Results |
|
Achieve new and renewal leasing square footage |
3.6 million square feet |
3.8 million square feet |
4.0 million square feet |
4.38 million square feet of new and renewal leasing executed in 2023 |
|
Number of new/ redevelopment project openings completed at or near pro forma returns |
2 |
4 |
6 |
5 new or redevelopment projects completed at or near targeted pro forma returns |
|
New sale, purchase or lease transactions completed for anchor/junior anchor spaces |
1 |
2 |
4 |
5 new anchor/junior anchor transactions completed |
|
Number of designated ESG Goals completed for 2023 |
3 |
4 |
5 |
All 5 designated ESG Goals completed for 2023 |
|
Overall Operational Goals Payout |
143.8% |
|||
37
The qualitative component of the 2023 AIP bonus opportunity for each Named Executive Officer was based on the Compensation Committee’s subjective evaluation of each Named Executive Officer’s performance in relation to the 2023 qualitative performance objectives established by the Compensation Committee and outlined below for each such officer:
|
Named
|
2023 Individual Performance Objectives |
|
Stephen D. Lebovitz |
(1) Refine, enhance and execute the Company’s strategic and business plans (2) Progress senior staffing and capabilities (3) Coordinate closely with the Board Chairman and regularly communicate with other members of the Board (4) Maintain and enhance key retailer, financial and other important relationships |
|
Benjamin W. Jaenicke |
(1) Successfully executing the Company’s Capital Plan including managing future debt maturities and expanding the Company’s lending relationships (2) Progressing staffing and capabilities in finance (3) Effectively manage the accounting function including relationship with outside auditors (4) Maintain and improve key financial stakeholder and joint venture partner relationships (5) Effectively oversee cash management, insurance, real estate taxes and other key responsibilities of the CFO |
|
Michael I. Lebovitz |
(1) Supervise redevelopment projects with a focus on managing capital investment as well as achieving approved pro forma returns and scheduled openings (2) Manage and enhance anchor/department store and joint venture partner relationships (3) Effectively oversee the Company’s Technology Solutions (IT) and People Culture (HR) functions including the implementation of technology and organizational initiatives (4) Ongoing involvement with the leasing, marketing and management divisions of the Company |
|
Katie A. Reinsmidt |
(1) Successfully execute the Company’s capital markets and disposition programs as well as coordinate development of certain required disclosures and public filings (2) Progress senior staffing and capabilities in finance, operations and ESG (3) Effectively manage and oversee corporate communications and investor relations programs as well as the Company’s ESG program (4) Continuing involvement in Board material preparation and Board support |
|
Jeffery V. Curry |
(1) Oversee and pursue favorable resolution of litigation (2) Effectively manage and oversee the legal department and manage spend on outside counsel (3) Continued involvement in Board material preparation and Board support as necessary (4) Coordinate and support other members of the senior executive team |
38
The following table illustrates the actual 2023 AIP cash bonus payouts approved by the Compensation Committee for each Named Executive Officer, in relation to their original AIP bonus targets:
|
Named Executive Officer |
Actual
|
Actual
|
Total Award |
Target Award |
Overall Percent of
|
|
Stephen D. Lebovitz |
$1,029,669 |
$346,726 |
$1,376,395 |
$1,050,683 |
131% |
|
Benjamin W. Jaenicke |
$ 283,920 |
$169,000 |
$ 452,920 |
$ 338,000 |
134% |
|
Michael I. Lebovitz |
$ 289,870 |
$144,935 |
$ 434,805 |
$ 345,083 |
126% |
|
Katie A. Reinsmidt |
$ 277,830 |
$165,375 |
$ 443,205 |
$ 330,750 |
134% |
|
Jeffery V. Curry |
$ 186,146 |
$ 93,073 |
$ 279,219 |
$ 221,603 |
126% |
Long-Term Incentive Compensation
2023 Long Term Incentive Compensation Program
Effective February 17, 2023, the Compensation Committee approved 2023 Long-Term Incentive Program (“ LTIP ”) awards under the 2021 Equity Incentive Plan for our current Named Executive Officers, consisting of the following elements:
39
Named Executive Officer Grants under 2023 LTIP
The following table illustrates the LTIP Awards approved by the Compensation Committee for the Company’s 2023 year and the 2023 – 2025 performance cycle with respect to the Performance Stock Units:
|
Plan Participants –
|
Target Value of Long-Term Incentive Award |
Target Value of PSU Award
|
Target Number of Performance Stock Units
|
Value of Annual Restricted Stock Award
|
Number of Shares of Annual Restricted Stock Awarded (3) |
|
Stephen D. Lebovitz,
|
$1,856,250 |
$1,113,750 |
41,542 |
$742,500 |
27,695 |
|
Benjamin W. Jaenicke,
|
$1,537,800 |
$838,800 |
31,287 |
$699,000 |
26,072 |
|
Michael I. Lebovitz,
|
$773,500 |
$464,100 |
17,311 |
$309,400 |
11,540 |
|
Katie A. Reinsmidt,
|
$773,500 |
$464,100 |
17,311 |
$309,400 |
11,540 |
|
Jeffery V. Curry,
|
$773,500 |
$464,100 |
17,311 |
$309,400 |
11,540 |
Performance Stock Unit Awards Component of 2023 LTIP Awards
As noted above, the PSU awards may be earned based on pre-established absolute and relative TSR goals as follows:
|
Metric |
Weighting |
Below Threshold
|
Threshold
|
Target
|
Maximum
|
|
Relative TSR vs. the Designated Index |
40% |
Below the 30 th percentile |
30 th percentile |
50 th percentile |
75 th percentile or higher |
|
Absolute Annualized Company TSR |
60% |
Less than 5.5% |
5.5% |
9.0% |
15.0% |
If the calculated comparison is between Threshold and Maximum for any performance period, then the number of Performance Stock Units earned will be correspondingly prorated between the values indicated in the preceding table.
Such shares, if and when issued at the conclusion of the 3-year performance period, will then vest in full on the first anniversary date following the date of issuance of such shares. Additionally, upon vesting, the Named Executive Officer is required to retain ownership of shares representing the after-tax
40
value of the shares for a period of two years following the vesting date except upon the NEO’s termination of employment with the Company.
Additional terms and conditions of the PSU component of the 2023 LTIP Awards to the Designated Executive Officers may be summarized as follows:
Annual Restricted Stock Awards Component of LTIP
As referenced above, each LTIP Award includes a target value amount (40% and 45% in the case of the CFO) that a Designated Executive Officer will receive in the form of an Annual Restricted Stock Award. The terms and conditions of the Annual Restricted Stock Awards to the Designated Executive Officers may be summarized as follows:
41
Outcome of Year 2 Performance Period Under 2022 PSU Awards
As described in greater detail in the Compensation Discussion and Analysis section of the Company’s proxy statement for our 2022 Annual Meeting of Shareholders (the “ 2022 CDA ”), following the Company’s emergence from Chapter 11 reorganization the Compensation Committee and senior management worked with Ferguson to develop a new equity incentive program for senior management.
As a result, the Compensation Committee made an initial grant of new Performance Stock Units (“ PSUs ”) in February 2022 based on a challenging set of four-year total market return goals, coupled with meaningful stated corporate goals intended to further stabilize and grow the business of the restructured Company moving forward. These initial equity incentives were based on performance over a four‑year period aligned with fiscal years 2022 through 2025, with one-quarter of the PSUs assigned to each fiscal year within the four-year performance period (each, an “ Annual Performance Period ” and all four, collectively, the “ Full Performance Period ”). The number of PSUs earned for each fiscal year within the four-year performance period is determined based on the achievement of both (i) a quantitative total market return goal (the “ TMR Goal ”), and (ii) a Company-specific stated goal (the “ Stated Goal ”), for such fiscal year, as detailed in the 2022 CDA in last year’s proxy statement.
During February 2024, the Compensation Committee reviewed and certified the fact that the Company had achieved both the TMR Goal, as adjusted to account for share repurchase activity through December 31, 2023 under the Company’s stock repurchase program announced in August 2023 (based on a peak TMR value of $814.4 million achieved during the measurement period) and the annual stated goals (achievement by the Company of an MSCI ESG Rating of B or higher, with actual 2023 rating of BBB) for the Year 2 Performance Period under these PSUs. Accordingly, the four current NEOs who participated in the initial February 2022 PSU awards earned the full 25% of their PSUs allocated to Year 2 performance, adjusted for cash dividends declared on the Company’s Common Stock during the Year 1 and Year 2 performance periods, as illustrated in the following table:
|
Named Executive Officer |
Unearned PSUs
|
Additional Dividend Equivalency PSUs
|
Adjusted
|
Total PSUs
|
Value of
|
Unearned
|
|
Stephen D. Lebovitz |
306,116 |
20,447 |
326,563 |
108,854 |
$2,658,215 |
217,709 |
|
Michael I. Lebovitz |
51,019 |
3,408 |
54,427 |
18,142 |
$ 443,028 |
36,285 |
|
Katie A. Reinsmidt |
51,019 |
3,408 |
54,427 |
18,142 |
$ 443,028 |
36,285 |
|
Jeffery V. Curry |
51,019 |
3,408 |
54,427 |
18,142 |
$ 443,028 |
36,285 |
42
Incentive Components of Our 2024 Executive Compensation Program:
2024 Annual Incentive Program
In February 2024, the Compensation Committee approved a 2024 AIP for the Named Executive Officers. The 2024 AIP, similar to the 2023 AIP described above, is designed to reward the participating Executive Officers for the achievement of annual Corporate Goals and Individual Performance Goals, as assessed by the Compensation Committee. As in prior years, for the Chief Executive Officer 70% of the total AIP opportunity will be based on the Corporate Goals, which are generally quantitative, and the remaining 30% will be based on qualitative Individual Performance Goals. For the other participating Executive Officers, 60% of the total award will be based on Corporate Goals and the remaining 40% will be based on Individual Performance Goals.
The Corporate Goals portion of the 2024 AIP awards is again allocated between two categories of performance measures as described below, with (A) the Financial Goals weighted 42% for the CEO and 36% for the other participating Executive Officers and (B) the Operational Goals weighted 28% for the CEO and 24% for the other participating Executive Officers:
As with the 2023 AIP, the remaining portion of the award will be based on specific Individual Goals set under the qualitative portion, and the actual payout ultimately received by each participating Executive Officer based on the Corporate Goal metrics set under the 2024 AIP will be determined in relation to the threshold , target and maximum performance levels established for such metric by the Compensation Committee in the same manner as described above for the 2023 AIP.
Based on consideration by the Compensation Committee of management recommendations supported by Ferguson, the target cash bonus award levels set for the 2024 AIP reflect (i) a 5% increase from the target bonus levels set under the Company’s 2023 AIP and (ii) a reallocation of certain amounts from the 2024 Long Term Incentive Program discussed below, in order to better align the Company’s cash versus equity compensation pay mix for its Named Executive Officers with the pay mix of similarly situated officers at companies included in the executive compensation peer group discussed above. The resulting portion of incentive compensation value reallocated from the LTIP to the 2024 AIP for each Named Executive Officer – as reflected in the 2024 AIP Target Cash Bonus Awards set forth in the table below – was as follows: Stephen D. Lebovitz - $300,000; Benjamin W. Jaenicke - $250,000; Michael I. Lebovitz - $100,000; Katie A. Reinsmidt - $100,000; and Jeffery V. Curry - $100,000.
43
|
|
Total 2024
|
|
Qualitative/
|
|
Stephen D. Lebovitz, Chief Executive Officer |
1,403,216 |
70% |
30% |
|
Benjamin W. Jaenicke, Executive Vice President – Chief Financial Officer and Treasurer |
604,900 |
60% |
40% |
|
Michael I. Lebovitz, President |
462,337 |
60% |
40% |
|
Katie A. Reinsmidt, Executive Vice President – Chief Operating Officer |
447,288 |
60% |
40% |
|
Jeffery V. Curry, Chief Legal Officer and Secretary |
332,683 |
60% |
40% |
As in the case of the 2023 AIP, payouts for cash bonus awards based on performance in relation to the corporate goal metrics under the AIP may range from 50% (threshold) to 150% (stretch). Performance achieved between threshold and stretch level for either metric results in a prorated bonus payout. There is no payout for the portion of any award that is based on a performance metric for which less than the threshold level of performance is achieved.
2024 Long Term Incentive Compensation Program
Effective February 7, 2024, the Compensation Committee approved 2024 LTIP awards for the Named Executive Officers, again consisting of both a PSU component and an Annual Restricted Stock Award component. The structure of these awards is similar to those included in the 2023 LTIP described above, with some slight changes to amounts and the weighting of different factors as described in the following summary:
Based on consideration by the Compensation Committee of management recommendations supported by Ferguson, the 2024 LTIP shifts an additional 10% of the weighting of the PSU component from the relative TSR measure to the Company absolute TSR measure, coupled with an increase in the Absolute Return Hurdles Rates for this portion of the PSUs (as reflected below) to further increase direct alignment with returns to the Company’s shareholders.
44
Named Executive Officer Grants under 2024 LTIP
As noted above in the discussion of the 2024 Annual Incentive Program, based on consideration by the Compensation Committee of management recommendations supported by Ferguson, the Compensation Committee elected to reallocate certain amounts from the 2024 LTIP award targets to the 2024 AIP award targets, to better align the Company’s cash versus equity compensation pay mix for its Named Executive Officers with the pay mix of similarly situated officers at companies included in the executive compensation peer group discussed above. Following these adjustments (which totaled $300,000 for Stephen D. Lebovitz, $250,000 for Benjamin W. Jaenicke, and $100,000 for each of Michael I. Lebovitz, Katie A. Reinsmidt and Jeffery V. Curry), LTIP Awards approved by the Compensation Committee for the Company’s 2024 year and the 2024 – 2026 performance cycle with respect to the Performance Stock Units were as follows:
|
Plan Participants –
|
Target Value of Long-Term Incentive Award |
Target Value of PSU Award
|
Target Number of Performance Stock Units
|
Value of Annual Restricted Stock Award
|
Number of Shares of Annual Restricted Stock Awarded (3) |
|
Stephen D. Lebovitz,
|
$1,556,500 |
$1,089,550 |
46,612 |
$466,950 |
19,977 |
|
Benjamin W. Jaenicke,
|
$1,288,000 |
$772,800 |
33,061 |
$515,200 |
22,041 |
|
Michael I. Lebovitz,
|
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
|
Katie A. Reinsmidt,
|
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
|
Jeffery V. Curry,
|
$673,500 |
$404,100 |
17,288 |
$269,400 |
11,526 |
45
Performance Stock Unit Awards Component of 2024 LTIP Awards
As noted above, the PSU awards may be earned based on pre-established absolute and relative TSR goals as follows:
|
Metric |
Weighting |
Below Threshold
|
Threshold
|
Target
|
Maximum
|
|
Relative TSR vs. the Designated Index |
30% |
Below the 30 th percentile |
30 th percentile |
50 th percentile |
75 th percentile or higher |
|
Absolute Annualized Company TSR |
70% |
Less than 6.0%
|
6.0%
|
12.0%
|
20.0%
|
If the calculated comparison is between Threshold and Maximum for any performance period, then the number of Performance Stock Units earned will be correspondingly prorated between the values indicated in the preceding table.
Such shares, if and when issued at the conclusion of the 3-year performance period, will then vest in full on the first anniversary date following the date of issuance of such shares. Additional terms and conditions of the PSU component of the 2024 LTIP Awards to the Named Executive Officers are the same as those described above for the 2023 LTIP Awards, except for the elimination of the requirement to retain ownership of shares representing the after-tax value of the shares for a period of two years following the vesting date.
Annual Restricted Stock Awards Component of LTIP
As referenced above, each LTIP Award includes a target value amount (40% and 30% in the case of the CEO) that a Named Executive Officer will receive in the form of an Annual Restricted Stock Award. The terms and conditions of the Annual Restricted Stock Awards to the Named Executive Officers are the same as those described above for the 2023 LTIP Awards.
Additional Compensation Policies and Practices
Role of Senior Management in Compensation Decisions
The Compensation Committee receives recommendations from the Company’s senior management as to all elements of NEO compensation and considers such recommendations in establishing base salary levels, as well as both the targeted award levels and the performance criteria utilized in determining AIP and performance-based LTIP equity awards under the incentive compensation programs. Stephen D. Lebovitz has the primary responsibility for presenting management’s recommendations as well as evaluating performance of the other executive officers (other than evaluation of his own performance), and regularly participates in the Compensation Committee meetings to provide this information. In making compensation decisions for the Named Executive Officers, the Compensation Committee gives significant weight to the recommendations made by the Company’s senior management, but the Compensation Committee is not bound by management’s recommendations and makes its own determinations as to these matters. The Compensation Committee also considers management’s recommendations in light of such issues as historical compensation levels for each officer, the relationship of each officer’s compensation to the overall compensation of the Company’s officers and the performance of the Company’s business for the year in question.
C lawback Policy
The Company has maintained an executive compensation clawback policy applicable to its Named Executive Officers since 2015. In compliance with recent updates to SEC and NYSE requirements, the Company has implemented an updated executive compensation clawback policy, effective October 2,
46
2023, regarding the adjustment or recovery of certain incentive awards or payments made to current or former officers of the Company subject to Section 16 of the Exchange Act (which includes the Named Executive Officers), if we are required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement under the U.S. securities laws. In general, the policy provides that, unless an exception applies, we will seek to recover compensation that is awarded to a Section 16 officer based on the Company’s attainment of a financial metric during the three-year period prior to the fiscal year in which the restatement occurs, to the extent such compensation exceeds the amount that would have been awarded based on the restated financial results.
Stock Ownership Requirements and Anti-Hedging Policy
As discussed above under “Corporate Governance Matters – Additional Policy Statements,” we maintain minimum stock ownership requirements for the Company’s Non-Employee Directors and executive officers. CBL also maintains a policy prohibiting officers and directors from engaging in “hedging” transactions involving any stock or securities of the Company. Specifically, except for indirect transactions not effectively under the control of a covered officer or director (such as transactions carried out by a mutual fund or similar vehicle in which an officer or director may invest, pursuant to investment decisions made by an independent third party manager), the policy prohibits the Company’s directors and officers of the Company or any of its subsidiaries of the level of vice president or above from engaging in hedging or monetization activities through transactions in Company securities or through the use of financial instruments designed for such purposes (including without limitation short-sales, options, puts, calls, and sales against the box, as well as derivative transactions including swaps, forwards, futures, collars and exchange funds). Under the policy, such individuals are generally prohibited from (i) owning financial instruments or participating in investment strategies that represent a direct or indirect hedge of the economic risk of owning Company securities or (ii) owning or participating in any other securities, instruments, contracts, arrangements or understandings that give the holder any rights to acquire any such Company securities.
Corporate Aircraft Usage
Pursuant to a policy adopted by the Company’s Board of Directors, upon approval by the Independent Directors (including the members of the Compensation Committee), and subject to the requirements and limitations of the Federal Aviation Regulations as currently interpreted by the Federal Aviation Administration’s Chief Counsel, Company executives who utilize a private aircraft owned and/or leased by the Management Company for personal transportation (as specified in such policy) reimburse the Company in connection with such usage. Such reimbursement is in an amount equal to the estimated aggregate incremental cost to the Company of such flights (including the variable direct costs of each flight, such as fuel, airport and landing fees, supplies and catering, direct crew costs, and a proportionate share of operating costs for airframe and engines and the cost of repositioning or “deadhead” flights, but excluding costs that do not vary with each flight, such as pilots’ salaries and training, insurance, hangar expense at home base and depreciation, capital and leasing costs associated with the aircraft). As such, the Company was reimbursed for the cost of all trips that were of a personal nature taken by a Named Executive Officer. This policy, however, does not require such reimbursement in certain instances, including but not limited to travel to and from Company offices, where the trip is primarily for a business purpose that benefits the Company. In these instances, allowing the use of aircraft owned or leased by the Company for executive travel serves the Company’s business purposes by enhancing the executive’s security and ability to attend to business matters while in transit, notwithstanding the fact that current SEC rules may require disclosure of the aggregate incremental cost attributable to such trips as additional “perquisite” compensation for the Named Executive Officers. As detailed in the Summary Compensation Table below, for 2023 Stephen D. Lebovitz received $326,152 of compensation attributable to such aircraft usage.
Retiree Insurance Programs
The Company has three programs in place for providing limited post-retirement coverage under the Company’s group medical insurance plan for certain eligible employees – (1) the Tier I Legacy Retiree Program, which applies to Company employees who retire with 30 or more years of service with the
47
Company and/or its affiliates or predecessors; (2) the Tier II Legacy Retiree Program, which applies to Company employees who retire at age 60, but less than age 65, with a total of 20 or more (but less than 30) years of service; and (3) the Tier III Post-65 Retiree Program, which applies to Company officers at the level of senior vice president and above who retire at age 65 or above with 40 or more years of service to the Company and/or its affiliates or predecessors. Details of the Tier I program, which is the only level applicable to at least one of the Company’s NEOs for purposes of the disclosures herein under the heading “Executive Compensation – Potential Payments Upon Termination or Change in Control,” are further described in that section of this Proxy Statement.
Effect of Regulatory Requirements on Executive Compensation
Accounting Treatment and Tax Deductibility of Executive Compensation . The Committee generally considers the accounting treatment and tax implications of the compensation awarded or paid to our executives. Grants of equity compensation awards under our long-term incentive program are accounted for under Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718. Section 162(m) of the Internal Revenue Code of 1986, as amended (the “ Code ”) imposes a $1,000,000 ceiling on a publicly traded corporation’s federal income tax deduction for compensation paid in a taxable year to the corporation’s chief executive officer and certain other executive officers. Prior to passage of the Tax Cuts and Jobs Act in December 2017 (the “ 2017 Tax Act ”), this limitation did not apply to any compensation that satisfies certain requirements to be treated as “performance-based compensation” under Section 162(m) and the related regulations. Following the 2017 Tax Act, this “performance-based” exclusion only applies to certain contracts in effect on November 2, 2017 and not materially modified thereafter.
Because substantially all services performed by the Company’s executive officers are rendered on behalf of our Operating Partnership and/or the Management Company, our executive officers receive all of their compensation as employees of the Management Company. We believe the compensation paid to our executive officers is not subject to Section 162(m) of the Code to the extent such compensation is attributable to services rendered for the Operating Partnership and/or the Management Company. Further, since we have elected to qualify as a REIT under the Code, we generally will not be subject to federal income tax. Thus, the deduction limit contained in Section 162(m) of the Code for compensation paid to CEOs and certain other public company executive officers is not material to the design and structure of our executive compensation program.
Section 409A . Section 409A of the Code generally affects the federal income tax treatment of most forms of deferred compensation (subject to limited grandfathering for certain deferred compensation arrangements in place on or prior to October 3, 2004) by accelerating the timing of the inclusion of the deferred compensation to the recipient for federal income tax purposes and imposing an additional federal income tax on the recipient equal to 20% of the amount of the accelerated income. Management and the Compensation Committee consider the potential adverse federal income tax impact of Section 409A of the Code in determining the form and timing of compensation paid to the Company’s executive officers and other employees.
48
Summary Compe nsation Table
The following table sets forth information regarding the compensation of the Company’s Named Executive Officers (as determined pursuant to SEC rules) for the Company’s fiscal years ended December 31, 2021, 2022 and 2023:
|
Summary Compensation Table (1)
|
|||||||
|
Name and Principal Position(2) |
Year |
Salary($) (3) |
Bonus($) (4) |
Stock Award(s) ($) (5) |
Non-equity Incentive Plan Compensation ($) (6) |
All Other Compensation ($) (7) |
Total Compensation ($) |
|
Stephen D. Lebovitz,
Director,
|
2023 |
719,442 |
346,726 |
2,353,752 |
1,029,669 |
334,402 |
4,783,991 |
|
2022 |
719,442 |
318,957 |
9,046,372 |
812,598 |
315,725 |
11,213,094 |
|
|
2021 |
672,315 |
257,310 |
8,271,000 |
852,209 |
307,151 |
10,359,985 |
|
|
Benjamin A. Jaenicke,
Executive Vice
|
2023 |
350,000 |
169,000 |
1,912,489 |
283,920 |
8,250 |
2,723,659 |
|
Michael I. Lebovitz, President |
2023 |
428,691 |
144,935 |
980,811 |
289,870 |
8,250 |
1,852,557 |
|
2022 |
428,691 |
139,676 |
1,507,724 |
228,760 |
7,625 |
2,312,478 |
|
|
2021 |
404,973 |
112,680 |
1,378,500 |
239,911 |
13,569 |
2,149,633 |
|
|
Katie A. Reinsmidt,
Executive Vice
|
2023 |
309,000 |
165,375 |
980,811 |
277,830 |
8,250 |
1,741,266 |
|
2022 |
309,000 |
138,600 |
1,507,724 |
219,259 |
7,625 |
2,182,208 |
|
|
2021 |
300,000 |
108,000 |
1,378,500 |
229,947 |
4,500 |
2,020,947 |
|
|
Jeffery V. Curry,
Chief Legal Officer and
|
2023 |
406,443 |
93,073 |
980,811 |
186,146 |
8,250 |
1,674,723 |
|
2022 |
406,443 |
89,696 |
1,507,724 |
146,904 |
7,625 |
2,158,393 |
|
|
2021 |
394,605 |
72,360 |
1,378,500 |
154,064 |
7,250 |
2,006,779 |
|
(1) All compensation cost resulting from amounts paid to the Named Executive Officers as shown in this table is recognized by the Management Company, which is a taxable REIT subsidiary.
(2) The position shown represents the individual’s position with the Company and the Management Company.
(3) Each of the Named Executive Officers also elected to contribute a portion of his or her salary to the CBL Associates Management, Inc. 401(k) Profit Sharing Plan (the “ 401(k) Plan ”) during each period presented.
(4) Represents the qualitative component of each Named Executive Officer’s cash bonus paid under each relevant year’s Annual Incentive Plan, respectively, for Named Executive Officers (as described above in the “Compensation Discussion and Analysis” section).
(5) We report all equity awards at their full grant date fair value in accordance with Financial Accounting Standards Board Accounting Standards Codification (ASC) Topic 718. For the Emergence restricted stock awards granted pursuant to the MIP in 2021 (which vest over four years as discussed in the Compensation Discussion and Analysis section above), as well as the time-vested restricted Common Stock component of awards under the Company’s LTIP for NEOs in 2022 and 2023, such value is calculated based on the NYSE market price, determined as the average of the high and low trading prices reported on the NYSE for shares of our Common Stock subject to the
49
award on the grant date for the award. For PSUs awarded to NEOs under the Company’s LTIP in 2022, the fair value was estimated on the date of grant using a Monte Carlo Simulation model. Such valuation consisted of computing the fair value using the Company’s simulated stock price as well as Total Market Return (“ TMR ”) during each Annual Performance Period from November 1, 2021 through December 31, 2025, which resulted in a grant-date fair value of $24.67 per PSU for each Named Executive Officer. For the PSUs granted on February 15, 2023, a similar Monte Carlo Simulation valuation was performed, which resulted in a grant-date fair value of $38.79 per PSU for each Named Executive Officer. For the PSUs granted in February 2022, the aggregate grant date fair value represents the amount the Company expects to expense in its financial statements if the Stated Goals component is achieved. For the PSUs granted in February 2023, the aggregate grant date fair value represents the amount the Company expects to expense in its financial statements. For additional information, refer to Note 16 – Share-Based Compensation in the Company’s audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement.
(6) Represents annual incentive compensation paid to the Named Executive Officers pursuant to the Corporate Goals portion of their 2023 Annual Incentive Plan award, their 2022 Annual Incentive Plan award and their 2021 Annual Incentive Plan award, respectively (as described above in the “Compensation Discussion and Analysis” section).
(7) For 2023, amounts shown include matching contributions by the Management Company under the 401(k) Plan for each of the Named Executive Officers. For Stephen D. Lebovitz, also includes $326,152 reflecting the incremental cost to the Company of his personal use (including use by family members accompanying the executive) of a private aircraft owned by the Management Company for certain travel including, but not limited to, travel to and from Company offices, where the trip is primarily for a business purpose that benefits the Company and such usage may be deemed a “perquisite” under current SEC rules. For the Management Company owned aircraft, the incremental cost is determined by estimating the variable portion of the Company’s per hour cost of owning, operating and maintaining such aircraft, less any portion reimbursed by the executives. Since the Management Company owned aircraft is used primarily for business travel, our Company does not include the fixed costs that do not change based on usage, such as management fees and acquisition costs. Depending on availability, family members of executive officers also are permitted to ride along on the corporate aircraft when it is already going to a specific destination for a business purpose. We consider this use to have no incremental cost to the Company, since the business flight would have occurred regardless of the additional passengers.
(8) Benjamin W. Jaenicke assumed the duties of Executive Vice President – Chief Financial Officer and Treasurer of the Company effective January 1, 2023.
50
2023 Grants of P lan-Based Awards
|
Name |
Grant Date |
Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) |
Estimated Future Payouts
|
All Other Stock Awards: Number of Shares of
Stock
|
Grant Date Fair Value of Stock and Option Awards ($) (4) |
||||
|
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold
|
Target
|
Maximum
|
||||
|
Stephen D. Lebovitz |
2/15/2023 |
367,739 |
735,478 |
1,103,217 |
— |
— |
— |
— |
— |
|
2/17/2023 |
— |
— |
— |
20,772 |
41,542 |
83,084 |
— |
— |
|
|
2/17/2023 |
— |
— |
— |
— |
— |
— |
27,695 |
742,503 |
|
|
Benjamin W. Jaenicke |
2/15/2023 |
101,400 |
202,800 |
304,200 |
— |
— |
— |
— |
— |
|
2/17/2023 |
— |
— |
— |
15,644 |
31,287 |
62,574 |
— |
— |
|
|
2/17/2023 |
— |
— |
— |
— |
— |
— |
26,072 |
698,990 |
|
|
Michael I. Lebovitz |
2/15/2023 |
103,525 |
207,050 |
310,575 |
— |
— |
— |
— |
— |
|
2/17/2023 |
— |
— |
— |
8,655 |
17,311 |
34,622 |
— |
— |
|
|
2/17/2023 |
— |
— |
— |
— |
— |
— |
11,540 |
309,387 |
|
|
Katie A. Reinsmidt |
2/15/2023 |
99,225 |
198,450 |
297,675 |
— |
— |
— |
— |
— |
|
2/17/2023 |
— |
— |
— |
8,655 |
17,311 |
34,622 |
— |
— |
|
|
2/17/2023 |
— |
— |
— |
— |
— |
— |
11,540 |
309,387 |
|
|
Jeffery V. Curry |
2/15/2023 |
66,481 |
132,962 |
199,443 |
— |
— |
— |
|
|
|
2/17/2023 |
— |
— |
— |
8,655 |
17,311 |
34,622 |
|
|
|
|
2/17/2023 |
— |
— |
— |
— |
— |
— |
11,540 |
309,387 |
|
(1) These columns represent the potential value of the payout for each Named Executive Officer if the Threshold, Target or Maximum (Stretch) goals were satisfied under the Corporate Goal Measures components of the 2023 Annual Incentive Plan, as described above in the “Compensation Discussion and Analysis” section. The amounts actually earned by each NEO with respect to 2023 performance under the AIP are reported in the Bonus (for the Qualitative Measures component) and Non-Equity Incentive Plan Compensation (for the Corporate Goal Measures component) columns in the 2023 Summary Compensation Table above.
(2) As described in greater detail above in the “Compensation Discussion and Analysis” section under “Performance Stock Unit Awards Component of 2023 LTIP Awards,” these columns represent the potential number of shares to be earned by each Named Executive Officer with respect to the PSUs granted in 2023 under the LTIP, as follows:
The actual number of shares of Common Stock issued pursuant to these PSUs will be determined as of December 31, 2025 based on the Company’s TSR performance over the 2023-2025 performance period pursuant to the
51
metrics referenced above, and will then vest in full on the first anniversary date following the date of issuance of such shares, all as described above in the “Compensation Discussion and Analysis” section.
The aggregate number of shares that potentially could be earned pursuant to these PSUs by each of the NEOs as of December 31, 2023, reflecting applicable increases to the initial number of PSUs granted to each NEO due to the payment of cash dividends on outstanding shares of Common Stock following their date of grant (as described above in the “Compensation Discussion and Analysis” section) is reported under “Equity Incentive Plan Awards” in the Stock Awards column of the 2023 Outstanding Equity Awards at Fiscal Year-End Table.
(3) Represents the number of shares of restricted stock awarded to each Named Executive Officer under the 2021 Equity Incentive Plan in February 2023 under the Annual Restricted Stock Awards component of the LTIP award for each NEO. Such awards have the additional terms and conditions described under the heading “ Annual Restricted Stock Awards Component of LTIP” in the “Compensation Discussion and Analysis” section above.
(4) Represents the grant date fair value of the February 2023 Annual Restricted Stock Awards, calculated as described in footnote (5) to the Summary Compensation Table above.
Additional Information Concer ning Executive Compensation
The following discussion presents additional information relevant to the compensation reported above for each of the Named Executive Officers in the Summary Compensation Table and the 2023 Grants of Plan-Based Awards Table.
Executive Employment Agreements
As further amended and restated in November 2023, to clarify certain provisions and eliminate obsolete references to the terms of certain compensation arrangements related to the Company’s Chapter 11 restructuring, the material terms of (i) the Second Amended and Restated Executive Employment Agreements with the Company’s NEOs other than Mr. Jaenicke (which were approved in their original form by the Company’s then-current Compensation Committee following extensive consultation and review by Ferguson and the Company’s legal advisors as described in the “Compensation Discussion and Analysis” section of our proxy statement for the Company’s 2022 Annual Meeting) and (ii) a similar Amended and Restated Employment Agreement with Mr. Jaenicke, may be summarized as follows:
|
Term: |
Initial term runs from August 18, 2020 through April 1, 2024 (or, in the case of Mr. Jaenicke, from September 1, 2022 through April 1, 2024), with automatic renewals for successive 1-year terms if not terminated (including any such renewals, the “ Term ”). |
|
Base Salary: |
For NEOs other than Mr. Jaenicke, initially equivalent to originally approved 2020 base salaries, and for Mr. Jaenicke an initial annual base salary of $350,000 increasing to $400,000 on January 1, 2024 – in both cases with future increases or decreases at discretion of the Compensation Committee (provided that base salary shall not be decreased by more than 5% during the Term). |
|
Annual Bonus: |
Executives to be provided with annual bonus opportunities, structured as determined by the Compensation Committee, for future years (in the case of Mr. Jaenicke, subject to initial prescribed amounts that resulted in a target annual bonus of $338,000 under the 2023 AIP, with his future bonus targets to be determined by the Compensation Committee in the same manner as for the other NEOs). |
|
Other Incentives: |
Participation and amounts applicable to future equity incentives under the 2021 Equity Incentive Plan to be as determined by the Company’s Compensation Committee (subject, in the case of Mr. Jaenicke, to an initial commitment that he would receive a restricted stock grant of not less than 25,000 shares and not less than 30,000 PSUs in connection with his 2023 LTIP grant). |
|
Insurance/Benefits: |
Continuation of health insurance benefits for 18 months following termination (24 months for CEO), subject to longer continuation, if applicable, under the terms of the Company’s Tier I, Tier II and Tier III Legacy Retiree Programs as described herein |
52
|
|
under “Additional Compensation Policies and Practices – Retiree Insurance Programs,” subject to the executive not having been terminated for Cause (as described below). |
|
Severance: |
If employment is terminated either (A) by the Company without Cause or (B) by the executive for Good Reason (each as defined in the Agreement and described below) following a Change in Control (as defined in the 2021 Equity Incentive Plan), severance is twice (2x) the sum of (i) then-current annual base salary plus (ii) a specified target bonus amount for each NEO (which amounts are $953,000 for Stephen D. Lebovitz; $338,000 for Benjamin W. Jaenicke; $313,000 for Michael I. Lebovitz; $300,000 for Katie A. Reinsmidt; and $201,000 for Jeffery V. Curry). |
|
Death/Disability: |
If employment is terminated due to death or disability (other than for the CEO), severance is twice (2x) then-current annual base salary. In the case of CEO Stephen D. Lebovitz, such severance would equal 1x then-current annual base salary plus $953,000. |
|
Non-Solicitation/
|
Non-Competition Period is six months following termination, while Non-Solicitation Period is one year following termination. |
For purposes of the provisions described above:
“ Cause ” means:
“ Good Reason ” means:
53
“ Disability ” means the employee’s complete and permanent disability as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time consistent with applicable law.
“ Change in Control ” as defined in the 2021 Equity Incentive Plan means the first to occur of any of the following events:
54
The 2021 Equity Incentive Plan also provides that, notwithstanding the foregoing, for purposes of an award that provides for a deferral of compensation under Section 409A of the Code, to the extent the impact of a Change in Control on such award would subject a plan participant to additional taxes under Section 409A of the Code, a Change in Control described in subsection (i), (ii), (iii) or (iv) above with respect to such award must also constitute a “change in the ownership of a corporation,” “change in the effective control of a corporation,” or a “change in the ownership of a substantial portion of a corporation’s assets” within the meaning of Section 409A of the Code, as applied to the Company.
Annual Bonus Arrangements for Named Executive Officers
The terms of both the quantitative and qualitative components of the bonus arrangements for the Named Executive Officers under the 2023 Annual Incentive Plan are described above in the “Compensation Discussion and Analysis” section. If a Named Executive Officer’s employment is terminated prior the conclusion of the AIP performance period, he or she would not receive any cash payout with respect to the 2023 AIP, and instead may be entitled to severance payments pursuant to the terms of the NEOs’ employment agreements as described above.
Performance Stock Unit Grants to the Named Executive Officers Under the 2021 Equity Incentive Plan
The terms of the PSUs granted to the Named Executive Officers in February 2023 under the 2021 Equity Incentive Plan are detailed above in the “Compensation Discussion and Analysis” section.
Risks Arising From Design of Compensation Programs
Both senior management and the Compensation Committee believe that the design of the Company’s compensation programs, including our executive compensation program, does not encourage our executives or employees to take unnecessary and excessive risks, and that the risks arising from these programs are not reasonably likely to have a material adverse effect on the Company. Factors supporting these conclusions include, among others, the following:
55
Application of Executive Compensation Clawback Policy
As discussed on page 46 above in the Compensation Discussion and Analysis, the Company has maintained an executive compensation clawback policy applicable to its Named Executive Officers since 2015. Effective October 2, 2023, this policy was updated pursuant to revised requirements of SEC and NYSE rules to apply to all current or former officers of the Company subject to Section 16 of the Exchange Act (including the Named Executive Officers). During the effectiveness of this policy, the Company has not been required to prepare an accounting restatement that resulted in the recovery of erroneously awarded compensation from any covered officers, and there are no unrecovered balances currently outstanding from any prior application of the clawback policy.
56
2023 Outstanding Equity A wards at Fiscal Year-End
|
Name |
Stock Awards |
|||
|
Number of
|
Market Value of Shares or Units of Stock That Have Not Vested
|
Equity Incentive Plan Awards: Number of
|
Equity Incentive Plan Awards: Market or
|
|
|
Stephen D. Lebovitz |
177,695 (3) |
4,339,312 |
252,224 |
6,159,310 |
|
Benjamin W. Jaenicke |
41,072 (4) |
1,002,978 |
25,994 |
634,773 |
|
Michael I. Lebovitz |
36,540 (5) |
892,307 |
50,667 |
1,237,288 |
|
Katie A. Reinsmidt |
36,540 (5) |
892,307 |
50,667 |
1,237,288 |
|
Jeffery V. Curry |
36,540 (5) |
892,307 |
50,667 |
1,237,288 |
(1) These shares were issued under the 2021 Equity Incentive Plan. In the case of all NEOs except Mr. Jaenicke, these grants occurred (i) in December 2021 as part of the Company’s Emergence Restricted Stock Awards to officers and other key employees under the 2021 Equity Incentive Plan, as described in more detail in the “Compensation Discussion and Analysis” section of our proxy statement for the Company’s 2022 Annual Meeting, and (ii) in connection with the Annual Restricted Stock Awards component of the LTIP in February 2023. 15,000 of the shares listed for Mr. Jaenicke were granted in connection with his initial employment in September 2022, with the remaining shares granted in connection with the Annual Restricted Stock Awards component of the LTIP in February 2023. The December 2021 restricted stock awards, as well as Mr. Jaenicke’s September 2022 initial employment award, vest in 25% increments on each of the first through fourth anniversaries of their date of grant. All subsequent grants vest in 1/3 increments on each of the first through the third anniversaries of their date of grant. Market value shown for all unvested shares of restricted stock is calculated based on the closing price for the Company’s Common Stock on the NYSE on the last trading day of fiscal year 2023 (December 29) of $24.42 per share.
(2) Represents (i) the number of shares of Common Stock that could be earned during the remaining Year 3 and Year 4 Performance Periods pursuant to the PSUs granted to each of the NEOs (other than Mr. Jaenicke) in February 2022 under the Company’s LTIP and (ii) the number of shares of Common Stock that could be earned during the three-year Performance Period pursuant to the PSUs granted to each of the NEOs in February 2023 under the LTIP. Amounts shown in the table assume (A) in the case of the February 2022 PSU awards, performance at threshold and (B) in the case of the February 2023 PSU awards, performance at Threshold for the Absolute Company TSR component and performance at 120% of Target for the Relative TSR vs. Designated Index component (based on interim metrics as of December 31, 2023). In each case, such amounts also reflect applicable increases to the initial number of PSUs granted to each NEO due to the payment of cash dividends on outstanding shares of Common Stock, as described in more detail above under “Long-Term Incentive Compensation” in the “Compensation Discussion and Analysis” section). Market value shown for the unearned shares of Common Stock underlying such PSUs is calculated based on the closing price for the Company’s Common Stock on the NYSE on the last trading day of fiscal year 2023 (December 29) of $24.42 per share.
(3) Such shares are scheduled to vest as follows: (i) 75,000 shares will vest on December 15 in each of the years 2024 and 2025 and (ii) 9,232 shares will vest on February 15 in each of the years 2024 and 2025, with a remaining 9,231 shares vesting on February 15, 2026.
(4) Such shares are scheduled to vest as follows: (i) 5,000 shares will vest on September 1 in each of the years 2024, 2025 and 2026 and (ii) 8,691 shares will vest on February 15 in each of the years 2024 and 2025, with a remaining 8,690 shares vesting on February 15, 2026.
(5) Such shares are scheduled to vest as follows: (i) 12,500 shares will vest on December 15 in each of the years 2024 and 2025 and (ii) 3,847 shares will vest on February 15 in each of the years 2024 and 2025, with a remaining 3,846 shares vesting on February 15, 2026.
57
2023 Option Exercise s and Stock Vested
|
|
Stock Awards |
|
|
Name |
Number of Shares Acquired on Vesting (#)(1) |
Value Realized on Vesting ($)(2) |
|
Stephen D. Lebovitz |
183,854 |
4,444,715 |
|
Benjamin W. Jaenicke |
5,000 |
107,750 |
|
Michael I. Lebovitz |
30,642 |
740,778 |
|
Katie A. Reinsmidt |
30,642 |
740,778 |
|
Jeffery V. Curry |
30,642 |
740,778 |
|
Shares of Common Stock Received Pursuant to Restricted Stock and PSUs that
|
||||
|
Name |
Award Type/
|
Number of Shares of Common Stock Acquired Upon Vesting/PSU Payout |
Number of Shares
|
Net Number of
|
|
Stephen D. Lebovitz |
Restricted Stock/
|
75,000 |
29,513 |
45,487 |
|
PSUs/
|
108,854 |
— |
108,854 |
|
|
Benjamin W. Jaenicke |
Restricted Stock/
|
5,000 |
1,218 |
3,782 |
|
Michael I. Lebovitz |
Restricted Stock/
|
12,500 |
4,919 |
7,581 |
|
PSUs/
|
18,142 |
7,139 |
11,003 |
|
|
Katie A. Reinsmidt |
Restricted Stock/
|
12,500 |
3,044 |
9,456 |
|
PSUs/
|
18,142 |
7,078 |
11,064 |
|
|
Jeffery V. Curry |
Restricted Stock/
|
12,500 |
3,044 |
9,456 |
|
PSUs/
|
18,142 |
4,418 |
13,724 |
|
58
Potential Payments Upon Term ination or Change in Control
The Company’s current agreements with its Named Executive Officers involving employment, severance or change in control provisions that could have resulted in additional compensation as of December 31, 2023 include the following, each as further described below:
Apart from the terms of these arrangements, the Named Executive Officers will not receive compensation in connection with any termination of employment due to a change in control of the Company, death, disability, retirement or any other reason, except for such benefits as are available generally to all employees under the Company’s 401(k) Plan, insurance and other benefits programs.
As of December 31, 2023, the end of the Company’s most recently completed fiscal year, the Named Executive Officers who are not eligible for the Tier I Legacy Retiree Program also did not meet the age and service requirements for continuation of medical benefits under the Company’s Tier II Legacy Retiree Program, which is generally available to all employees who retire at age 60, but less than age 65, and have been employed by the Company and/or its affiliates or predecessors for a total of 20 or more (but less than 30) years of service, or the Tier III Post-65 Retiree program, which applies to Company officers at the level of senior vice president and above who retire at age 65 or above with 40 or more years of service to the Company and/or its affiliates or predecessors.
Payments Under Executive Employment Agreements
As discussed above in the Compensation Discussion and Analysis section under the heading “Executive Employment Agreements,” potential severance payments and continuation of insurance benefits to the NEOs in the event of a termination or a change in control of the Company may be summarized as follows:
|
Continuation of Insurance/Benefits: |
Continuation of health insurance benefits for 18 months following termination
|
|
Severance Upon Termination Without Cause or in Connection With a Change in Control: |
If employment is terminated either (A) by the Company without Cause or (B) by the NEO for Good Reason following a Change in Control, each NEO will receive severance equal to twice (2x) the sum of (i) then-current annual base salary plus (ii) a specified target bonus amount for each NEO (which amounts are $953,000 for Stephen D. Lebovitz; $338,000 for Benjamin W. Jaenicke; $313,000 for Michael I. Lebovitz; $300,000 for Katie A. Reinsmidt; and $201,000 for Jeffery V. Curry). |
|
Death/Disability: |
If employment is terminated due to death or disability (other than for the CEO), severance is twice (2x) then-current annual base salary. In the case of CEO Stephen D. Lebovitz, such severance would equal 1x then-current annual base salary plus $953,000. |
59
|
Non-Solicitation/
|
Each NEO has agreed not to (i) engage in any competing solicitation of employees, customers, clients or suppliers of the Company for a period of one (1) year following termination or (ii) otherwise, directly or indirectly, engage in business in competition with the Company for a period of six (6) months following termination. |
For purposes of the above-described provisions, the terms “Cause” and “Good Reason” have the definitions described above under the heading “Additional Information Concerning Executive Compensation –Executive Employment Agreements.” “Disability” is defined to mean the NEO’s complete and permanent disability as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time consistent with applicable law.
Vesting of Restricted Stock Upon Termination Without Cause, Death, Disability or Change in Control
The terms of the initial Emergence restricted stock awards granted to the NEOs under the 2021 Equity Incentive Plan (and to Mr. Jaenicke in connection with his initial employment in September 2022) provide that:
The terms of the subsequent restricted stock awards granted to the NEOs under the 2021 Equity Incentive Plan pursuant to the 2023 LTIP provide that:
For purposes of these provisions:
“ Cause ” has the same meaning as described above for purposes of the Amended and Restated Executive Employment Agreements under the heading “Additional Information Concerning Executive Compensation – Executive Employment Agreements.”
“ Disability ” means the employee’s complete and permanent disability as defined by the Company’s health insurance plans or as otherwise defined by the Company from time to time consistent with applicable law.
“ Change in Control ” has the meaning described above under the heading “Additional Information Concerning Executive Compensation – Executive Employment Agreements.”
60
Payout of PSU Awards in the Event of Death, Disability or Termination Without Cause
For the initial post-Chapter 11 PSU awards referenced above in the Compensation Discussion and Analysis section under the heading “Outcome of Year 2 Performance Period Under 2022 PSU Awards,” if a NEO’s employment is terminated prior to the end of one of the four Annual Performance Periods applicable to such awards due to death, disability or a termination by the Company without Cause, the NEO would be entitled to receive a pro rata portion of any PSUs earned for the then-current Annual Performance Period (determined by dividing the number of days from January 1 of the applicable Annual Performance Period through the date of such termination by 365), and any remaining PSUs for such Annual Performance Period, and any subsequent Annual Performance Period, would be forfeited.
In the case of the subsequent PSU awards granted in February 2023 and February 2024 as described above in the Compensation Discussion and Analysis section, if a participating officer’s employment terminates prior to conclusion of the 3-year performance period (i) due to death or disability (as defined in the PSU award agreements) or (ii) due to a termination by the Company without “cause” (as defined in the PSU award agreements), then, in either case, the NEO (or his/her estate, as applicable) would be entitled to receive immediately vested shares of Common Stock equal to a pro rata portion of the PSUs applicable to the award, based on the achievement of the relevant performance criteria for the portion of the 3-year performance cycle completed through the date of such termination, and any remaining PSUs will be forfeited.
For purposes of these provisions, the terms “Cause” and “Disability” have the same meanings as referenced above for purposes of determining the vesting of any shares of restricted stock granted to the NEOs under the 2021 Equity Incentive Plan.
Tier I Legacy Retiree Program
The Company’s Tier I Legacy Retiree Program provides certain benefits concerning the continuation of health insurance coverage to certain employees who meet its requirements. The “Tier I Retirees” covered by the Tier I Retiree Legacy Program include any Company employee who retires after the program’s effective date and:
Program benefits for each eligible Tier I Retiree (and his or her spouse who is insured by CBL’s health insurance plan on the date of the retirement of the Tier I Retiree) are as follows:
61
Any tax obligations imposed on a Tier I Retiree as a result of the benefit under this program will be the sole responsibility of such retiree (and his or her spouse, if applicable). The Company may elect to discontinue the Tier I Legacy Retiree benefit on a prospective basis on each annual renewal of the Company’s overall group health insurance plan.
Currently, should they retire from the Company, both Stephen D. Lebovitz and Michael I. Lebovitz would meet the criteria to be covered under the Tier I Legacy Retiree Program. The projected benefit to any covered Tier I Retiree under that program will depend on the then-current costs of participation in CBL’s group medical insurance plan on the date of his or her retirement from CBL.
Potential Payments Upon Termination or Change in Control for Named Executive Officers
Based on the foregoing, the table below summarizes the following potential payments to each Named Executive Officer pursuant to the Amended and Restated Executive Employment Agreements as described above, assuming in each case that the applicable triggering event occurred as of December 31, 2023:
|
Named
|
Termination of Employment Without Cause, or by NEO for Good Reason Upon a
|
Termination of Employment
|
Termination of
|
|||
|
Value of
|
Value of
|
Value of
|
Value of
|
Value of
|
Value of
|
|
|
Stephen D. Lebovitz |
46,861 |
3,344,884 |
46,861 |
— |
46,861 |
1,672,442 |
|
Benjamin W. Jaenicke |
35,146 |
1,376,000 |
35,146 |
— |
35,146 |
700,000 |
|
Michael I. Lebovitz |
43,628 |
1,483,382 |
43,628 |
— |
43,628 |
857,382 |
|
Katie A. Reinsmidt |
25,448 |
1,218,000 |
25,448 |
— |
25,448 |
618,000 |
|
Jeffery V. Curry |
25,448 |
1,214,886 |
25,448 |
— |
25,448 |
812,886 |
(1) Under the terms of the Executive Employment Agreements, the continuation of health insurance benefits for 18 months (24 months in the case of CEO Stephen D. Lebovitz) is subject to the NEO not having been terminated for Cause. Estimated values are based on current premiums payable under CBL’s group medical insurance plan as
62
of December 31, 2023. For Michael I Lebovitz, the amount shown also includes the value of the additional 6 months of continued health insurance coverage he would receive for himself and his spouse under the Tier I Legacy Retiree Program, following the expiration of the 18-month continuation of his current family health insurance coverage that he would have received under the terms of the Amended and Restated Employment Agreements discussed above, if he had retired as of December 31, 2023. Stephen D. Lebovitz would not receive any additional benefit under the Tier I Legacy Retiree Program, since he is already entitled to receive continuation of health insurance benefits for 24 months under his Executive Employment Agreement. Currently, Benjamin W. Jaenicke, Katie A. Reinsmidt and Jeffery V. Curry are not eligible for benefits under the Tier I Legacy Retiree Program.
(2) Retirement due to disability by any Named Executive Officer who otherwise satisfies the requirements of the Tier I Legacy Retiree Program would result in the same benefits as retirement for any other reason; however, there would be no benefits under such program in the event of the death of a Named Executive Officer.
The table below summarizes the following additional compensation to each Named Executive Officer, assuming in each case that the applicable triggering event occurred as of December 31, 2023:
|
Named
|
Termination by
|
Termination Without
|
Termination
|
Termination
|
|
Vesting of
|
Vesting of
|
Vesting of
|
Vesting of
|
|
|
Stephen D. Lebovitz |
4,857,993 |
3,026,493 |
— |
4,857,993 |
|
Benjamin W. Jaenicke |
1,393,625 |
1,210,451 |
— |
1,393,625 |
|
Michael I. Lebovitz |
1,108,424 |
803,174 |
— |
1,108,424 |
|
Katie A. Reinsmidt |
1,108,424 |
803,174 |
— |
1,108,424 |
|
Jeffery V. Curry |
1,108,424 |
803,174 |
— |
1,108,424 |
(1) The Tier I Legacy Retiree Program does not provide for any benefits upon the occurrence of a Change in Control, or a termination of the NEO’s employment without Cause, in the absence of an eligible employee retiring and otherwise satisfying its requirements (as described above). Accordingly, for purposes of the foregoing table, the only consequences of either of these events would be the immediate vesting of the applicable number of shares of restricted stock each NEO would retain pursuant to the Emergence restricted stock awards granted under the MIP, as shown in note (2) below.
63
(2) As further detailed in the table below, this value is calculated based on:
|
Named
|
Number of Shares of Restricted Stock Retained Upon Termination
|
Number of Shares of Restricted Stock Retained Upon Death/Disability or Termination by the Company Upon a Change in Control |
Number of Shares Earned for
|
|
Stephen D. Lebovitz |
102,695 |
177,695 |
21,240 |
|
Benjamin W. Jaenicke |
33,572 |
41,072 |
15,996 |
|
Michael I. Lebovitz |
24,040 |
36,540 |
8,850 |
|
Katie A. Reinsmidt |
24,040 |
36,540 |
8,850 |
|
Jeffery V. Curry |
24,040 |
36,540 |
8,850 |
In the event of a NEO’s retirement prior to the vesting of any shares of restricted stock or payout of PSU awards granted under the 2021 Equity Incentive Plan, all such unvested shares of restricted stock or unearned PSUs would be forfeited. In the event of a NEO’s termination due to a Change in Control of the Company prior to the end of any applicable Annual Performance Period pursuant to the February 2022 PSU awards received under the LTIP, all remaining PSUs would be forfeited.
64
Pay Ratio Disclosure
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following reasonable estimate of the ratio of the annual total compensation of our Chief Executive Officer (our “ CEO ”) to the median of the annual total compensation of our other employees.
For 2023, our last completed fiscal year:
Based on this information, for 2023 the ratio of annual total compensation of our CEO to the median of the annual total compensation of all employees was 62 to 1.
To identify the median employee, as well as to determine the annual total compensation of our median employee and our CEO, we took the following steps:
1. We identified the median employee using our employee population as of December 31, 2023, which consisted of approximately 456 individuals, all located in the United States.
2. To identify the “median employee” from our employee population, we examined the amount of total compensation (annual salary/wages as of December 31, 2023, plus bonus compensation in 2023) of each employee (other than the CEO) as reflected in payroll records. Salaries/wages were annualized for all permanent employees who were employees for less than the full year. We did not make any cost-of-living adjustments in identifying the “median employee”.
3. We identified our median employee using this compensation measure, which was consistently applied to all our employees included in the calculation.
4. Once we identified our median employee, we calculated annual total compensation for this employee of $77,741 using the same methodology we use for our CEO in the Summary Compensation Table as set forth in this Proxy Statement.
5. With respect to the annual total compensation of our CEO, we used the amount reported in the “Total” column of our 2023 Summary Compensation Table included in this Proxy Statement.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
65
Pay Versus Performance Disclosure
As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of SEC Regulation S-K (the “ PvP Rules ”), we are providing the following information regarding the relationship between executive compensation and our financial performance for each of the last three completed calendar years. In determining the “compensation actually paid” (“ CAP ”) to our NEOs, we are required to make various adjustments, as summarized below, to amounts that have been previously reported in the Summary Compensation Table (“ SCT ”), as the SEC’s valuation methods for stock compensation in this section differ from the methods required to be utilized in the SCT. The table below summarizes compensation values both previously reported in our SCT, as well as the adjusted values required in this section for the 2023, 2022, 2021, and 2020 calendar years, together with information concerning total shareholder return (“ TSR ”) and the Company’s reported Net Income (Loss), as well as our Gross Net Operating Income (“ NOI ”), which the Company believes represents its most important financial performance measure in evaluating pay-for-performance, other than TSR and Net Income (Loss), for the most recently completed fiscal year.
The Compensation Committee did not consider the pay versus performance data presented below in making its compensation decisions for any of the years shown. For a detailed discussion concerning the design of our executive compensation programs, CBL’s pay-for-performance philosophy and how we align executive compensation with the Company’s performance, please refer to the “Compensation Discussion and Analysis” section above.
PAY VERSUS PERFORMANCE TABLE
|
Year |
SCT Total Comp.
|
Compensation Actually Paid to PEO (2)
|
Average SCT Total Comp. for Non-PEO NEOs (3)
|
Average Compensation Actually Paid to Non-PEO NEOs (2)(3)
|
Value of Initial Fixed $100 Investment Based On: |
Net Income (Loss) (5)
|
|
|
|
Total Share-holder Return (4)
|
Peer Group Total Share-holder Return (4)
|
|||||||
|
(a) |
(b) |
(c) |
(d) |
(e) |
(f) |
(g) |
(h) |
(i) |
|
2023 |
|
|
|
|
|
|
|
|
|
2022 |
|
|
|
|
|
|
(
|
|
|
2021 |
|
|
|
|
|
|
(
|
|
|
(
|
|
|||||||
|
2020 |
|
|
|
|
N/A |
N/A |
(
|
|
* Results for Successor Period, November 1 – December 31, 2021. See Footnote (5) below for additional information.
** Results for Predecessor Period, January 1 – October 31, 2021. See Footnote (5) below for additional information.
(1)
(2) The dollar amounts reported in column (c) and (e) reflect CAP as computed in accordance with SEC rules. Stock compensation in the SCT is reflective of the grant date fair value of awards granted in the respective years. See tables below for the detail of the adjustments made to the SCT in the calculation of CAP. The CAP reflected below does not reflect the actual amount of compensation paid out to our NEOs during the applicable year as it includes changes in the value of stock compensation for awards which remained unvested at the end of the applicable year.
66
|
|
PEO Reconciliation of SCT Total Compensation to CAP |
||||
|
|
2023 |
2022 |
2021 |
2020 |
|
|
SCT Total Compensation for PEO |
$
|
$
|
$
|
$
|
|
|
Adjustments: |
|
|
|
|
|
|
Remove stock compensation included in
|
(
|
(
|
(
|
(
|
|
|
Add fair value as of vesting date of awards granted
|
— |
|
— |
|
|
|
Add fair value of awards granted during the year
|
|
|
|
|
|
|
Add (subtract) changes in fair value from
|
(
|
(
|
— |
(
|
|
|
Add (subtract) changes in fair value from prior
|
|
(
|
|
(
|
|
|
Subtract fair value as of prior year-end for
|
— |
— |
— |
(
|
|
|
Add dividends paid on unvested awards (C) |
|
|
— |
— |
|
|
Total Adjustments |
|
(
|
|
(
|
|
|
CAP for PEO |
$
|
$
|
$
|
$
|
|
|
|
Non-PEO Reconciliation of Average SCT Total Compensation to Average CAP |
||||
|
|
2023 |
2022 |
2021 |
2020 |
|
|
Average SCT Total Compensation for Non-PEO NEOs |
$
|
$
|
$
|
$
|
|
|
Adjustments: |
|
|
|
|
|
|
Remove stock compensation included in
|
(
|
(
|
(
|
(
|
|
|
Add fair value as of vesting date of awards granted
|
— |
|
— |
|
|
|
Add fair value of awards granted during the year
|
|
|
|
|
|
|
Add (subtract) changes in fair value from
|
(
|
(
|
— |
(
|
|
|
Add (subtract) changes in fair value from prior
|
|
(
|
|
(
|
|
|
Subtract fair value as of prior year-end for
|
— |
(
|
— |
(
|
|
|
Add dividends paid on unvested awards (C) |
|
|
— |
— |
|
|
Total Adjustments |
|
(
|
|
(
|
|
|
Average CAP for Non-PEO NEOs |
$
|
$
|
$
|
$
|
|
67
(3) The dollar amounts reported in column (d) represent the average of the total compensation amounts reported for the Company’s NEOs as a group (excluding the PEO) in the “Total Compensation” column of the Summary Compensation Table in each applicable year. The non-PEO NEOs for 2023 are Benjamin W. Jaenicke, Michael I. Lebovitz, Katie A. Reinsmidt and Jeffery V. Curry. The non-PEO NEOs for 2021 and 2022 are Farzana Khaleel, Michael I. Lebovitz, Katie A. Reinsmidt and Jeffery V. Curry. The non-PEO NEOs for 2020 are Farzana Khaleel, Charles B. Lebovitz, Michael I. Lebovitz and Jeffery V. Curry.
(4)
(5) Amounts shown in column (h) represent Net Income (Loss) (dollars in thousands) as reported in the Company’s Consolidated Statements of Operations in the 2023 Form 10-K: (i) for the Successor periods comprised of fiscal years ended December 31, 2023 and 2022 and the two months ended December 31, 2021 and (ii) for the Predecessor period comprised of the ten months ended October 31, 2021. Amounts shown for the Predecessor period comprised of the fiscal year ended December 31, 2020 represent the amounts as reported for such period in the Company’s Consolidated Statements of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as previously filed with the SEC (the “ 2022 Form 10-K ”).
Amounts shown in column (i) represent the Operating Partnership’s Share of Total NOI (“
Gross NOI
”) as reported in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the 2023 Form 10-K: (i) for the Successor periods comprised of the fiscal years ended December 31, 2023 and 2022 and the two months ended December 31, 2021 and (ii) for the Predecessor period comprised of the ten months ended October 31, 2021. The Gross NOI for the Predecessor period comprised of the fiscal year ended December 31, 2020 represents the amount reported in the Company’s Management’s Discussion and Analysis of Financial Condition and Results of Operations section in the 2022 Form 10-K.
As
discussed in Note 1 – Organization and in Note 19 – Fresh Start Accounting in the Company’s audited financial statements contained in the 2023 Form 10-K, upon the Company’s emergence from Chapter 11 reorganization pursuant to the Chapter 11 Cases, the Company adopted fresh start accounting, which resulted in a new basis of accounting and the Company becoming a new entity for financial reporting purposes. As a result of the application of fresh start accounting and the effects of the implementation of the Plan, the consolidated financial statements after the Effective Date (November 1, 2021) are not comparable with the consolidated financial statements on or before that date. The lack of comparability is emphasized in the Company’s Consolidated Statements of Operations included in the 2023 Form 10-K and the 2022 Form 10-K by the use of a “black line” to separate the Predecessor (defined below) and Successor (defined below) Periods in the consolidated financial statements and footnote tables. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the Company after the Effective Date. References to "Predecessor" or "Predecessor Company" refer to the financial position and
68
results of operations of the Company on or before the Effective Date. See Note 1 – Organization and in Note 19 – Fresh Start Accounting in the Company’s audited financial statements contained in the 2023 Form 10-K, filed with the SEC (which accompanies this proxy statement), for additional information.
Relationship Between Financial Performance Measures
The graphs below compare the compensation actually paid to our PEO and the average of the compensation actually paid to our Non-PEO NEOs, with (i) our cumulative TSR and our Peer Group TSR, (ii) our Net Income (Loss), and (iii) our Gross NOI, in each case as calculated in accordance with (and subject to the limitations described in) the footnotes to the Pay Versus Performance Table above, for the fiscal years ended December 31, 2020, 2021, 2022 and 2023:
69
Tabular List of Financial Performance Measures
The most important financial performance measures used by the Company in setting pay-for-performance compensation for the most recently completed fiscal year are described in the table below. The manner in which these measures, together with certain non-financial performance measures, determine the amounts of incentive compensation paid to our named executive officers is described above in the Compensation Discussion and Analysis section of this proxy statement.
|
Significant Financial Performance Measures |
|
|
|
|
|
|
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DIRECTOR CO MPENSATION
The following table sets forth information regarding the compensation of each Non‑Employee Director for the Company’s fiscal year ended December 31, 2023. Directors who are employees of the Company do not receive any separate compensation for service in their capacity as a director.
2023 Director Com pensation Table
|
Name |
Fees Earned or Paid in Cash ($)(1) |
Stock Awards ($)(2) |
Total ($) |
|
Marjorie L. Bowen |
115,000 |
125,017 |
240,017 |
|
David J. Contis |
141,250 |
125,017 |
266,267 |
|
David M. Fields |
110,000 |
125,017 |
235,017 |
|
Robert G. Gifford |
117,500 |
125,017 |
242,517 |
|
Jeffrey A. Kivitz |
105,000 |
125,017 |
230,017 |
|
Michael A. Torres (3) |
48,750 |
125,017 |
173,767 |
|
Jonathan M. Heller (4) |
38,750 |
— |
38,750 |
|
Kaj Vazales (5) |
26,250 |
— |
26,250 |
(1) This column reports the aggregate amount of all cash compensation earned by each Non-Employee Director during 2023 for Board and committee service, determined as described below under “Additional Information Concerning Director Compensation.”
(2) This column represents the grant date fair value of restricted stock awards granted to the Non-Employee Directors during 2023 under the 2021 Equity Incentive Plan, calculated in accordance with Financial Accounting Standards Board ASC Topic 718. Effective December 15, 2023, each then current Non-Employee Director was granted 5,215 shares of restricted Common Stock under the 2021 Equity Incentive Plan. Such shares had a grant date fair value of $23.9725 per share, based on the average of the high and low price of the Company’s Common Stock as reported on the NYSE on the grant date. Additional terms of these awards are described below under “Post-Emergence Director Compensation – Non-Employee Director Annual Awards.” For more information, refer to Note 16 – Share-Based Compensation in the Company’s audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement. The grant date fair value represents the amount that the Company expects to expense in its financial statements over the vesting schedule for these awards and does not correspond to the actual value that will be realized by each Non-Employee Director. The aggregate number of outstanding shares of restricted Common Stock held by each Non-Employee Director as of December 31, 2023, was as follows: Marjorie L. Bowen – 10,243 shares; David J. Contis – 47,743 shares; David M. Fields – 10,243 shares; Robert G. Gifford – 10,243 shares; Jeffrey A. Kivitz – 10,243 shares; and Michael A. Torres – 5,215 shares.
(3) Mr. Torres was appointed to the Board of Directors effective June 15, 2023.
(4) Amount shown in table represents additional cash meeting fees paid during 2023 prior to Mr. Heller’s resignation. In connection with Mr. Heller’s resignation from the Board of Directors effective January 25, 2023 due to a change in his principal business association, the Board of Directors determined that 5,655 of the shares of restricted common stock he held would be fully vested as of such date and the remaining 3,394 shares would be forfeited.
(5) Amount shown in table represents additional cash meeting fees paid during 2023 prior to Mr. Vazales’ resignation. At the time of his original appointment to the Board of Directors, Kaj Vazales was Managing Director and Co‑Head of North America for Oaktree’s Global Opportunities strategy. The Non-Employee Director fees payable to Mr. Vazales for his service on our Board prior to his resignation from that position effective January 3, 2023 were paid to OCM FIE, LLC, an affiliate of Oaktree, and Mr. Vazales did not participate in equity awards made to Non-Employee Directors. In lieu of a restricted stock grant in December 2021, Mr. Vazales was granted deferred cash compensation of $229,768 that was to be earned only if he remained a director until January 1, 2023 and, upon being earned, was paid to OCM FIE, LLC. Oaktree had previously agreed that Mr. Vazales could be included in the Company’s December 2022 annual restricted stock grant to Non-Employee Directors. In connection with Mr. Vazales’ resignation from the Board of Directors effective January 26, 2023 due to a change in his principal business association, the Board of Directors determined that 3,143 of the shares of restricted common stock he held would be fully vested as of such date and the remaining 1,885 shares would be forfeited.
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Additional Information Conce rning Director Compensation
Both the Company’s management and the Compensation Committee intend for the compensation of the Company’s Non-Employee Directors to be competitive and reasonable in relation to the directors’ responsibilities for supervising the overall management and policies of the Company, and in relation to the compensation of Non-Employee Directors at the same group of peer companies reviewed by the Compensation Committee in setting base salaries for the Named Executive Officers (taking into account differences in size and scope of operations between the Company and certain of its peers).
During the fourth quarter of 2022, following a review of peer director compensation compiled by Ferguson, the Board of Directors approved the Non-Employee Director Compensation to be effective as of January 1, 2023 and going forward, as reflected in the table below:
Non-Employee Director Fees Paid in Cash
|
Description |
Non-Employee Director Fees
|
|
Annual Cash Retainer for each Non-Employee Director |
$75,000 |
|
Additional Annual Committee Member Fee
|
$15,000 |
|
Additional Annual Committee Chairperson Fee (Compensation Committee; Nominating/Corporate Governance Committee)* |
$20,000 |
|
Additional Annual Committee Chairperson Fee (Audit Committee)* |
$25,000 |
|
Additional Annual Fee – Non-Employee Chairman of the Board** |
$50,000 |
* Committee Chairperson receives these fees in lieu of the applicable Committee Member fee.
** While eliminating a separate Lead Independent Director fee and maintaining the cash portion of the Additional Annual Fee for the Non-Employee Chairman at $50,000 for 2023, the Board, in November 2022 and to be effective for the 2023 year, added another $100,000 in the form of an additional grant of restricted shares of Common Stock to be granted to the Non-Employee Chairman on December 15 preceding the beginning of the year to which such fee was applicable, vesting as of January 1 of the following year. In connection with the resignation of Jonathan M. Heller in January 2023, the Board of Directors appointed the Company’s then-current Lead Independent Director, David J. Contis, as Chairman of the Board and eliminated the separate position of Lead Independent Director. Pursuant to Mr. Contis’ request, he did not receive the incremental $100,000 equity grant as the Non-Employee Chairman of the Board for 2023 and, in February 2024, the Board eliminated the incremental $100,000 equity award for 2024 and going forward.
All cash fees are paid to the Non-Employee Directors on a quarterly basis. Each Non-Employee Director also receives reimbursement of expenses incurred in attending meetings.
Non-Employee Director Annual Equity Awards
The Non-Employee Director Compensation schedule approved by the Board in the fourth quarter of 2022 also provided that on December 15 th of each year of service (the “ Grant Date ”), each Non-Employee Director of the Company serving on such Grant Date would receive a grant of shares of restricted Common Stock of the Company pursuant to the 2021 Equity Incentive Plan, as amended (the “ Non-Employee Director Annual Award ”), having a value of $125,000, for their prospective service in the upcoming calendar year (the “ Annual Service Period ”).
The number of shares to be granted pursuant to each Non-Employee Director Annual Award will be based on the average of the high and low trading prices for the Company’s Common Stock on the Grant Date, but if the Grant Date shall not be a date upon which the shares trade, then the number of shares will be based on the average of the high and low trading prices for the Company’s Common Stock on the last preceding trading date prior to the Grant Date. The shares granted under the Non-Employee Director Annual Award will vest on January 1 of the calendar year following the conclusion of the Annual Service Period.
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Generally, unless the Board of Directors should determine otherwise (as occurred in January 2023 in connection with the resignations of both Jonathan Heller and Kaj Vazales due to a change in each such director’s principal business association), a Non-Employee Director who ceases to be a member of the Board prior to the conclusion of the Annual Service Period will forfeit any unvested shares except in the event such Non-Employee Director ceased to be a member of the Board due to such Non-Employee Director’s death or disability or on a Change in Control of the Company (as defined in the 2021 Equity Incentive Plan). As in the case of the Restricted Stock Awards to Company officers described above, the Non-Employee director generally will have all of the rights of a stockholder during the vesting/restricted period, including the right to receive dividends on the same basis and at the same rate as all other outstanding shares of Common Stock and the right to vote such shares on any matter on which holders of the Company’s Common Stock are entitled to vote, and the shares generally will not be transferable during the restricted period, except for any transfers which may be required by law (such as pursuant to a domestic relations order).
Equity Compensation Plan Infor mation as of December 31, 2023
The following table sets forth information as to the Company’s equity compensation plans as of the end of the Company’s 2023 fiscal year:
|
Plan Category |
(a)
Number of securities to be issued upon exercise of the outstanding options, warrants and rights |
(b)
Weighted-average exercise price of outstanding options, warrants and rights |
(c)
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) |
|
Equity compensation plans approved by security holders |
None |
N/A |
N/A |
|
Equity compensation plans not approved by security holders (1) |
None |
N/A |
3,006,326 |
|
TOTAL |
None |
N/A |
3,006,326 |
(1) Represents securities available under the 2021 Equity Incentive Plan, which was not required to receive separate shareholder approval because it was approved by the Bankruptcy Court pursuant to the Plan. Totals shown as of December 31, 2023, include 953,403 additional shares of Common Stock that became issuable pursuant to the operation of the “evergreen” provision contained in Section 4.1 of the 2021 Equity Incentive Plan as of January 1, 2023.
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Compensation Committee Interlo cks and Insider Participation
The Compensation Committee of the Board of Directors currently consists of Robert G. Gifford (Chairman), David M. Fields, Jeffrey A. Kivitz and Michael A. Torres. David J. Contis also served as a member of the Compensation Committee until the rebalancing of the Company’s Board committees in May 2023 and Kaj Vazales served as a member of the Compensation Committee prior to his resignation from the Board in January 2023. None of such current or former members of the Compensation Committee are or have been officers or employees of the Company or any of its subsidiaries and each member of the Compensation Committee (both current and former) is or was an Independent Director during the time of his or her service.
No executive officer of the Company served on any board of directors or compensation committee of any entity (other than the Company or its subsidiaries) with which any current or former member of the Compensation Committee, or any other director of the Company, is affiliated.
REPORT OF THE COMPENSATION COMMI TTEE OF THE BOARD OF DIRECTORS
The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information or report be deemed incorporated by reference into any future filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The Compensation Committee of the Board of Directors of the Company currently is composed of four Independent Directors, Robert G. Gifford (Chairperson), David M. Fields, Jeffrey A. Kivitz and Michael A. Torres. The Compensation Committee operates under a second amended and restated written charter adopted by the Board of Directors on November 10, 2022. A copy of the second amended and restated charter is available and can be accessed in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com. The Company’s Board of Directors has determined that each of the members of the Compensation Committee is “independent” pursuant to the listing standards of the NYSE as currently applicable.
The Compensation Committee has reviewed and discussed with Management of the Company the Compensation Discussion and Analysis required by Item 402(b) of SEC Regulation S-K and presented elsewhere in this Proxy Statement.
Based on the Compensation Committee’s review and discussions referred to above, the Compensation Committee recommended that the Board of Directors include the Compensation Discussion and Analysis in the Company’s Proxy Statement for its 2024 Annual Meeting and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC.
COMPENSATION COMMITTEE
Robert G. Gifford (Chairperson)
David M. Fields
Jeffrey A. Kivitz
Michael A. Torres
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REPORT OF THE AUDIT COMMITTE E OF THE BOARD OF DIRECTORS
The information contained in this report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall such information or report be deemed incorporated by reference into any future filing by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference in such filing.
The Audit Committee of the Board of Directors of the Company currently is composed of four Independent Directors, Marjorie L. Bowen (Chairperson), David J. Contis, Robert G. Gifford and Michael A. Torres. The Audit Committee operates under the second amended and restated written charter adopted by the Board of Directors on August 14, 2013. A copy of the second amended and restated charter is available and can be accessed in the “Investor Relations – Governance – Governance Documents” section of the Company’s website at www.cblproperties.com. The Company’s Board of Directors has determined that each of the members of the Audit Committee is “independent” pursuant to the listing standards of the NYSE as currently applicable.
Management is responsible for the Company’s internal controls and financial reporting process. The Company’s independent auditors are responsible for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States and for issuing a report thereon, as well as expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. The Audit Committee’s responsibility is to monitor and oversee these processes.
In this context, the Audit Committee has met and held discussions with Management and the Company’s independent auditors. Management reported to the Audit Committee that the Company’s consolidated financial statements for the Company’s 2023 fiscal year were prepared in accordance with accounting principles generally accepted in the United States, and the Audit Committee has reviewed and discussed these consolidated financial statements with Management and the Company’s independent auditors. The Audit Committee discussed with the independent auditors the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (PCAOB) and the SEC.
The Company’s independent auditors also provided to the Audit Committee the written disclosures and the letter required by applicable requirements of the PCAOB regarding the independent auditors’ communications with the Audit Committee concerning independence, and the Audit Committee discussed with the independent auditors their firm’s independence. The Audit Committee considered whether the provision of services by the independent auditors (other than audit services) is compatible with maintaining the independent auditors’ independence.
Pursuant to the mandates of the Sarbanes-Oxley Act of 2002, the Company’s Board of Directors has determined that Marjorie L. Bowen, an Independent Director and Chair of the Audit Committee, as well as David J. Contis, Robert G. Gifford and Michael A. Torres, also Independent Directors and members of the Audit Committee, each qualify as an “audit committee financial expert” as such term is defined by the SEC.
Based on the Audit Committee’s review and discussions referred to above, the Audit Committee recommended that the Board of Directors include the Company’s audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC and provide in such Annual Report on Form 10-K the disclosure of Marjorie L. Bowen, David J. Contis, Robert G. Gifford and Michael A. Torres as “audit committee financial experts.”
AUDIT COMMITTEE
Marjorie L. Bowen (Chairperson)
David J. Contis
Robert G. Gifford
Michael A. Torres
75
Transactions Involving Securities Issued Pursuant to the Chapter 11 Cases and the Plan
Beginning on November 1, 2020, the Company and the Operating Partnership, together with certain of its direct and indirect subsidiaries (collectively, the “ Debtors ”) filed voluntary petitions (the “ Chapter 11 Cases ”) under chapter 11 of title 11 (“ Chapter 11 ”) of the United States Code (the “ Bankruptcy Code ”) in the United States Bankruptcy Court for the Southern District of Texas (the “ Bankruptcy Court ”). On November 1, 2021 (the “ Effective Date ”), by operation of the Debtors’ Third Amended Joint Chapter 11 Plan of CBL Associates Properties, Inc. and its Affiliated Debtors (With Technical Modifications) (the “ Plan ”), the conditions to effectiveness of the Plan were satisfied and the Debtors emerged from the Chapter 11 Cases. Additional information concerning the terms of the Plan and the Chapter 11 Cases, as well as the new securities issued pursuant to the Plan, is contained in Note 18 – Emergence From Voluntary Reorganization Under Chapter 11, in the Company’s audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement.
During the year ended December 31, 2023, the following persons or entities that are considered to be “related persons” of the Company under applicable SEC rules, received the following additional distributions of shares of the Company’s Common Stock pursuant to the Plan. Pursuant to the confirmed Plan, the Consenting Noteholders (as defined in the Plan) were entitled to the residual (if any) of the pre-funded Unsecured Claims Recovery Pool (the “ GUC Pool ”) funds following final distribution to all Class 7 Allowed Claim holders. Following disbursement or escrow of all Allowed Class 7 Claims in 2023, certain funds remained in the GUC Pool, comprised of cash and common stock. (Any outstanding 10% Senior Secured Notes were redeemed in May 2022.) As such, Consenting Noteholders received their pro rata distribution from the residual common stock in the GUC Pool pursuant to the terms of the Plan and Final Decree. This included distributions to the following beneficial owners of 5% or more of the Company’s outstanding Common Stock:
Interest of a Five Percent Beneficial Owner of CBL in Certain Additional Transactions
As further detailed above in the section titled “Security Ownership of Certain Beneficial Owners and Management,” in a Schedule 13D filed with the SEC on March 14, 2023, Howard Amster disclosed that he and eighteen other related entities collectively owned shares representing approximately 7.2% of the Company’s currently outstanding Common Stock. Based on information provided to the Company by management of Horizon Group Properties (“ HGPI ”), our joint venture partner in the Company’s outlet center developments, the Company understands that Mr. Amster, either directly or through certain of his affiliated entities, owns approximately 68.6% of the equity of HGPI and approximately 68.5% of the equity of Horizon Group Properties, LP, the affiliated property management company of HGPI (“ Horizon Management ”). As a result of these interests in HGPI and Horizon Management, Mr. Amster may be deemed to hold indirect ownership interests in the joint venture entities that own the following outlet centers in which the Company holds a 50% unconsolidated joint venture interest (except as otherwise indicated below):
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|
|
Amster Indirect
|
|
The Outlet Shoppes at Atlanta, Woodstock, GA |
32.90% |
|
The Outlet Shoppes at El Paso, El Paso, TX |
39.55% |
|
The Outlet Shoppes at Gettysburg, Gettysburg, PA* |
33.56% |
|
The Outlet Shoppes at Laredo, Laredo, TX* |
22.82% |
|
The Outlet Shoppes of the Bluegrass, Simpsonville, KY* |
22.49% |
|
*CBL’s ownership interest in the joint ventures that own The Outlet Shoppes at Laredo and The Outlet Shoppes of the Bluegrass is 65%. CBL consolidates the results of the joint venture entities that own The Outlet Shoppes at Gettysburg and The Outlet Shoppes at Laredo for financial reporting purposes. Each of the other joint venture entities is unconsolidated. For additional information, refer to Note 1 – Organization, Note 2 – Summary of Significant Accounting Policies and Note 7 – Unconsolidated Affiliates in the audited financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement. |
|
During the year ended December 31, 2023, the Company and its joint venture partner HGPI engaged in the following ordinary course financing transactions involving certain of these outlet center properties, each of which was fully reviewed and approved by the Company’s Board of Directors, including all of the members of the Company’s Audit Committee and Nominating/Corporate Governance Committee:
For additional information concerning these financing transactions, refer to Note 7 – Unconsolidated Affiliates and Note 8 – Mortgage and Other Indebtedness, Net in the audited financial statements
77
contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC, that accompanies this Proxy Statement.
Each of the above-referenced joint ventures also pays management fees to both Horizon Management and CBL (based on a percentage of rental income collected) and additional leasing fees to Horizon Management (based on a percentage of the total rental income to be received over the term of a new or renewal lease) pursuant to the terms of Property Management Agreements that were entered into prior to the time when Mr. Amster became a greater than five percent beneficial owner of the Company’s Common Stock. Amounts paid pursuant to these agreements during 2023 were as follows:
|
|
|
2023 Fees Paid to Horizon Management |
Expiration of Current Management Agreement |
|
The Outlet Shoppes at Atlanta,
|
$142,479 |
$909,872 |
12/31/2043 |
|
The Outlet Shoppes at El Paso,
|
$165,945 |
$1,309,083 |
12/31/2028 |
|
The Outlet Shoppes at Gettysburg,
|
— |
$137,441 |
12/31/2025 |
|
The Outlet Shoppes at Laredo,
|
$63,124 |
$299,630 |
5/10/2026 |
|
The Outlet Shoppes of the Bluegrass,
|
$126,451 |
$448,742 |
4/30/2024 |
|
*A replacement Property Management Agreement was entered into with the new CMBS entity created in connection with the October 2023 refinancing transaction described above, on identical terms that effectively continued the Property Management Agreement in place for The Outlet Shoppes at Atlanta prior to the refinancing. |
|||
The terms of each these Property Management Agreements, other than the Gettysburg agreement, also provide they will be automatically extended upon the same terms and conditions for additional 10-year terms at the expiration of their current term, provided that (i) the Horizon Manager retains a direct or indirect ownership interest in the joint venture entity that owns the related outlet center and (ii) CBL has not exercised certain buy-out or removal rights it holds under these agreements. The operation of these agreements, as well as any future material amendments, replacements or similar actions, will continue to be subject to oversight by the Company’s Board of Directors, as well as the Nominating/Corporate Governance Committee pursuant to applicable requirements of the Company’s governing documents and NYSE rules.
Review and Approval of Other Related Person Transactions
The Company’s Code of Business Conduct contains provisions concerning conflicts of interest and related party transactions which may be summarized as follows:
Company employees (and their immediate family members, as defined in the Code of Business Conduct) may not engage in any of the following activities unless and until the material facts as to the activity and the employee’s relationship or interest therein are fully disclosed to the Company's Compliance Officer – currently the Chief Legal Officer – and written approval is obtained as set forth below:
(i) Except for employment agreements, severance agreements, stock restriction agreements, performance stock unit agreements, indemnity agreements or similar types of agreements related to the employee’s employment or position with the Company, the entering into by an employee of any contract or arrangement with the Company; and
78
(ii) Except for the ownership of non-controlling interests in publicly traded entities, the ownership by an employee of any interest in or serving as a director, officer, consultant or attorney in or for (A) any entity which has entered into or enters into any contract or arrangement with the Company, or (B) any entity in which the Company may own a partnership interest or membership interest or other similar interest, but subject to exceptions in those situations specifically approved by the Company's Board of Directors pursuant to previously-adopted polices of the Company on those matters.
Such activities must be disclosed in writing to the Company’s Compliance Officer, who then has the responsibility to (i) approve or disapprove any such matters (giving due considerations to the provisions of the Code of Business Conduct and to whether the proposed activity or investment could or will have an adverse impact on the Company, the Company’s assets and/or business plans), subject to the exceptions described below and (ii) provide written notification of such approval or disapproval to the employee who submitted the required disclosure as promptly as practicable.
The Code of Business Conduct also provides, however, that the Compliance Officer shall not be authorized to approve the following transactions:
The Code of Business Conduct also provides that Company employees should refrain and are prohibited from (i) taking for themselves or for their personal benefit opportunities that could advance the interests of the Company or that could benefit the Company when such opportunities are discovered
79
through the use of Company property, information or position; (ii) using Company property, information or position for personal gain; or (iii) competing with the Company in other businesses or matters other than Commercial Real Estate Projects (which are covered by the review and approval process described above).
However, the Company’s Certificate of Incorporation – in recognition and anticipation that (i) certain directors, principals, officers and employees and/or other representatives of stockholders of the Company and their respective Affiliates (as defined in the Certificate of Incorporation) may serve as directors or officers of the Company, (ii) stockholders of the Company and their respective Affiliates and/or Related Funds (as defined in the Certificate of Incorporation) may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Company, directly or indirectly, may engage and/or other business activities that overlap with or compete with those of the Company, and (iii) Non-Employee Directors (including, for the avoidance of doubt, the Chairman of the Board if he or she is not otherwise an employee, consultant or officer of the Company), and their respective Affiliates may now engage and may continue to engage in the same or similar activities or related lines of business as the Company and/or that overlap with or compete with those of the Company – also includes a provision to the effect that:
The Certificate of Incorporation also provides that neither the Company’s stockholders nor any of their Affiliates or Related Funds, nor any Non-Employee Director or his or her Affiliates (all as defined in the Certificate of Incorporation), shall have any duty to refrain from (x) engaging in a corporate opportunity in the same or similar business activities or lines of business as the Company or any of its Affiliates is engaged or proposes to engage, (y) making investments in any kind of property in which the Company makes or may make investments or (z) otherwise competing with the Company or any of its Affiliates, and provides that, to the fullest extent permitted by the DGCL, no such person shall (A) be deemed to have acted in bad faith or in a manner inconsistent with the best interests of the Company or its stockholders or to have acted in a manner inconsistent with or opposed to any fiduciary duty to the Company or its stockholders or (B) be liable to the Company or its stockholders for breach of any fiduciary duty, in each case, by reason of any such activities. The Certificate of Incorporation further states that, to the fullest extent permitted by law, any person purchasing or otherwise acquiring any interest in shares of the Company shall be deemed to have notice of and to have consented to these provisions.
The application of these provisions to the review and approval of those transactions and relationships reported for fiscal 2023 is described in pertinent detail below.
Management Company and Management Agreement
The Company is party to a management agreement with the Management Company pursuant to which the Management Company renders management and administrative services with respect to the Company’s properties. The Management Company also provides management services for certain properties owned by CBL’s Predecessor and certain other third parties for which the Management Company is paid a management fee. See “Retained Property Interests.” The following individuals, collectively, own 100% of the equity interests in CBL’s Predecessor: Stephen D. Lebovitz (25.3137%), Michael I. Lebovitz (25.3%), Alan L. Lebovitz (21.1%), Beth Lebovitz-Backer (the sister of Stephen D. Lebovitz, Michael I. Lebovitz and Alan L. Lebovitz) (21.1%)); and Charles B. Lebovitz Grantor Trust
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(7.2%). The Operating Partnership owns 100% of Holdco II, which owns 100% of the Management Company’s outstanding preferred stock and common stock.
Retained Property Interests and Management Services
CBL’s Predecessor owns interests in outparcels at certain of the Company’s malls and a 21.25% minority interest in Jacksonville Avenues Limited Partnership (“ the Avenues ”), the majority interest of which is owned by third parties. While the Avenues is managed by a third party, the Avenues paid the Management Company approximately $143,696 in management consulting fees during 2023. CBL’s Predecessor also paid the Management Company $90,000 during 2023 as reimbursement for the cost of certain management and administrative services provided to CBL’s Predecessor by employees of the Management Company. All of the agreements related to such payments were reviewed by the Company’s Audit Committee in accordance with the Company’s Related Party Transactions Approval Policy in effect prior to its Chapter 11 reorganization.
Certain Employment Relationships
Alan L. Lebovitz, a brother of Stephen D. Lebovitz and Michael I. Lebovitz, serves as the Company’s Executive Vice President – Management. He receives compensation from the Company commensurate with his level of experience and seniority as an officer of the Company, and based upon an annual review of his individual performance conducted in the same manner as for all Company executive officers. During 2023, the aggregate compensation paid to Alan L. Lebovitz was $1,152,960, which consisted of cash compensation paid to Mr. Lebovitz during 2023, including base salary, a cash bonus paid for his service as an executive officer in 2023 and matching contributions by the Management Company under the 401(k) Plan, equity awards consisting of restricted stock awards and PSUs and perquisites.
Alan L. Lebovitz also is eligible for the Company’s insurance and other employee benefit programs on the same basis as other similarly situated executive officers. The compensation of Alan L. Lebovitz is subject to approval by the Compensation Committee in connection with that Committee’s approval of the compensation of all executive officers of the Company.
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PROPO SAL 2
RATIFICATION OF THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
The Audit Committee evaluates the selection of the Company’s independent auditor each year, and has determined to recommend the appointment of Deloitte Touche LLP (“ Deloitte ”) to serve as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2024. Deloitte has served as the independent auditor for the Company since May 7, 2002. In determining whether to recommend the re-appointment of Deloitte as the Company’s independent auditor, the Audit Committee considered various factors, including:
Considered together, these factors enable the Audit Committee to evaluate whether the selection of Deloitte as the Company’s independent auditor, and the retention of Deloitte to perform other services, will contribute to and enhance audit quality. Based on its evaluation, the Audit Committee believes that the continued retention of Deloitte to serve as the Company’s independent registered public accounting firm is in the best interest of our shareholders. Accordingly, the Audit Committee has recommended, subject to ratification by the shareholders, that Deloitte serve as the Company’s independent auditor for the fiscal year ending December 31, 2024. A representative of Deloitte will attend the Annual Meeting and will have an opportunity to make a statement and to respond to appropriate questions.
Independent Registered Public Accountants’ Fees and Services
The Company was billed for professional services provided during fiscal years 2022 and 2023 by Deloitte in the amounts set forth in the following table.
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2022 |
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2023 |
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Audit Fees (1) |
$1,492,725 |
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$1,430,000 |
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Audit-Related Fees (2) |
221,450 |
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221,450 |
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Tax Fees – Compliance (3) |
250,000 |
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260,000 |
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Tax Fees – Consulting (4) |
591,789 |
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296,816 |
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All Other Fees (5) |
3,790 |
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3,790 |
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Total |
$2,559,754 |
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$2,212,056 |
(1) Consists of fees billed for professional services in connection with the audit of the Company’s annual financial statements for the fiscal years ended December 31, 2022 and 2023, reviews of the financial statements included in the Company’s quarterly reports on Form 10-Q during the 2022 and 2023 fiscal years, and other services normally provided by the independent auditor in connection with statutory and regulatory filings or engagements.
(2) Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees”. These services include audits of the Company’s subsidiaries pursuant to requirements of certain loan agreements and joint venture agreements and other consultations.
(3) Consists of fees billed for professional services for assistance regarding federal and state tax compliance.
(4) Consists of fees billed for professional services for tax advice and tax planning, which consists of tax services related to joint ventures and tax planning.
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(5) Consists of subscription fees for an online accounting research tool.
The Audit Committee of the Board of Directors has considered the services rendered by Deloitte for services other than the audit of the Company’s financial statements and has determined that the provision of these services is compatible with maintaining the independence of Deloitte.
Neither the Company’s Certificate of Incorporation nor the Company’s Bylaws require that shareholders ratify the selection of the Company’s independent registered public accounting firm. However, we are requesting ratification because we believe it is a matter of good corporate practice. If the Company’s shareholders do not ratify the selection, the Audit Committee will consider whether or not to retain Deloitte Touche LLP, but may, nonetheless, retain Deloitte Touche LLP as the Company’s independent registered public accountants. Even if the selection is ratified, the Audit Committee in its discretion may change the appointment at any time if it determines that the change would be in the best interests of the Company and its shareholders.
The Audit Committee has adopted a policy that it is required to approve all services (audit and/or non-audit) to be performed by the independent auditor to assure that the provision of such services does not impair such auditor’s independence. All services, engagement terms, conditions and fees, as well as changes in such terms, conditions and fees, must be approved by the Audit Committee in advance. The Audit Committee will annually review and approve services that may be provided by the independent auditor during the next year and will revise the list of approved services from time to time based on subsequent determinations. The Audit Committee believes that the independent auditor can provide tax services to the Company such as tax compliance, tax planning and tax advice without impairing such auditor’s independence and that such tax services do not constitute prohibited services pursuant to SEC and/or NYSE rules. The authority to approve services may be delegated by the Audit Committee to one or more of its members including the Chairman of the Audit Committee, but may not be delegated to management. If authority to approve services has been delegated to an Audit Committee member, any such approval of services must be reported to the Audit Committee at its next scheduled meeting. The Audit Committee has not relied on the de minimis exception under applicable SEC rules in approving any of the non-audit fees described above.
Recommendation and Vote Necessary to Approve the Proposal
The Board of Directors, in concurrence with the Audit Committee, proposes and recommends that the shareholders ratify the selection of Deloitte to serve as the independent auditors for the Company’s fiscal year ending December 31, 2024. Unless otherwise directed by the shareholder submitting such proxy, proxies received in response to this solicitation by the Board of Directors will be voted for approval of the selection of Deloitte to serve as the Company’s independent auditors for the 2023 fiscal year.
The ratification of the selection of Deloitte as the Company’s independent auditors for the 2024 fiscal year must be approved by a majority of the votes cast by shares of Common Stock present or represented at the Annual Meeting.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR”
THE RATIFICATION OF THE SELECTION OF
DELOITTE TOUCHE LLP AS THE COMPANY’S
INDEPENDENT AUDITORS FOR 2024
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PROPO SAL 3
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION
Description of Advisory Vote
In accordance with the advisory recommendation of our shareholders at the 2023 Annual Meeting, our Board of Directors has determined that we will hold a nonbinding, advisory vote (a “say-on-pay vote”) to approve the compensation paid to our Named Executive Officers pursuant to Section 14A of the Exchange Act once every year. Accordingly, we are including a proposal for our shareholders to vote to approve, on a nonbinding, advisory basis, the compensation of our Named Executive Officers as described in the “Executive Compensation” section comprising pages 31 through 70 of this Proxy Statement (including the Compensation Discussion and Analysis as well as the related compensation tables and narrative discussions set forth in the “Executive Compensation” section).
The Company has statutory officers, but no employees. Our officers, including the Named Executive Officers, receive all of their compensation in their capacity as employees of the Management Company, which also employs all of the other personnel engaged in the operation of our business. Apart from the terms of the agreements with each of our Named Executive Officers summarized in the Executive Compensation section above under the heading “Additional Information Concerning Executive Compensation – Executive Employment Agreements,” none of our Named Executive Officers is compensated pursuant to any other employment agreement with the Company and the Company does not pay them salaries or bonuses or provide them other compensation or benefits, except for the grants of equity awards under our 2021 Equity Incentive Plan as described in the “Executive Compensation” section of this Proxy Statement.
As described in greater detail in the Compensation Discussion and Analysis above, our Compensation Committee has approved incentive compensation programs for the Company’s Named Executive Officers designed to balance short-term and long-term performance and operational goals as well as stock price performance and to provide the appropriate level of objectivity with subjectivity in an effort to support our Company’s business plan and strategy. The Compensation Committee’s objectives in administering our executive compensation programs are to ensure that pay levels and incentive compensation are effective in attracting and retaining highly qualified personnel, while also linking overall compensation to the Compensation Committee’s evaluation of both executive and Company performance and serving our objective of linking management’s long-term economic interests with those of CBL’s shareholders. This advisory vote is not intended to address any specific item of compensation, but rather the overall compensation of our Named Executive Officers and the compensation philosophy, policies, and practices described in this Proxy Statement.
Shareholder Resolution
Under this Proposal 3, shareholders have the opportunity to vote for, against, or abstain from voting with respect to the following resolution:
RESOLVED , that the compensation paid to the Named Executive Officers of CBL Associates Properties, Inc. (the “ Company ”), as disclosed pursuant to Item 402 of SEC Regulation S-K in the “Executive Compensation” section of the Company’s Proxy Statement for its 2024 Annual Meeting of Shareholders, including the Compensation Discussion and Analysis as well as the related compensation tables and narrative discussions set forth therein, is hereby approved by the Company’s shareholders on a nonbinding, advisory basis.
Recommendation and Vote Necessary to Approve the Advisory Proposal; Advisory Nature
Approval of the “say-on-pay” shareholder resolution that is the subject of this Proposal 3 will require the affirmative vote of a majority of the votes cast by shares of our Common Stock present or represented at the Annual Meeting. Unless otherwise directed by the shareholder submitting such proxy, proxies received in response to this solicitation by the Board of Directors will be voted for approval of such resolution. The shareholder vote on this proposal is advisory and nonbinding in nature, serves only as a recommendation to our Compensation Committee and Board of Directors, and will not overrule any decisions previously made by the Company, the Compensation Committee or the Board of Directors with respect to executive compensation, nor will it create any duty for the Company, the
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Compensation Committee or the Board of Directors to take any action in response to the outcome of the vote. Director compensation disclosed in this Proxy Statement is not subject to or covered by this advisory vote.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE
APPROVAL OF THE FOREGOING ADVISORY RESOLUTION RELATING TO
THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
In accordance with requirements established by the SEC pursuant to Rule 14a-8(e)(2) under the Exchange Act, shareholder proposals to be included in the Company’s Proxy Statement with respect to the 2024 Annual Meeting of Shareholders must be received by the Company at its executive offices located at 2030 Hamilton Place Blvd., Suite 500, CBL Center, Chattanooga, Tennessee 37421-6000, Attention: Corporate Secretary no later than December 23, 2024, which is 120 days before the anniversary of the date this proxy statement is being released to shareholders in connection with the 2024 Annual Meeting, and must comply with other applicable SEC rules.
In addition, the Company’s Bylaws provide that any shareholder of record desiring to nominate a director, or to have a shareholder proposal considered at an annual meeting outside the processes of SEC Rule 14a-8, must provide written notice of such nomination or proposal and prescribed supporting documentation, as set forth in the Bylaws, to the Company at its principal executive offices not less than 90 days (e.g., January 22, 2025) nor more than 120 days (e.g., December 23, 2024) prior to the anniversary date of the date on which the Company first mailed its proxy materials for the prior year’s annual meeting; provided, however, that in the event the annual meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of the date on which the Company held the prior year’s annual meeting, such notice and prescribed supporting documentation must be provided not earlier than 120 days prior to such annual meeting and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. The Bylaws also provide that the public announcement of a postponement or adjournment of an annual meeting does not commence a new time period for the giving of any such notice.
In addition to complying with the procedures described above, shareholders who intend to solicit proxies in support of a director candidate other than the Company’s director nominees for consideration by shareholders at the 2024 Annual Meeting pursuant to the requirements of the SEC’s “universal proxy” Rule 14a-19 under the Exchange Act must comply with the related requirements of the Company’s Bylaws, including providing the Corporate Secretary of the Company with a notice setting forth all of the related information and disclosures required by Rule 14a-19 no later than January 22, 2025, in accordance with the timetable described in the preceding paragraph.
HOUSEHOLDING OF PROXY MATERIALS
If you and other residents at your mailing address own common stock in street name, your broker or bank may have sent you a notice that your household will receive only one annual report and proxy statement (together, the “proxy materials”). This practice is known as “householding.” If you did not respond that you did not want to participate in householding, you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker has sent one copy of our proxy materials to your address. If you wish to revoke your consent to householding, or to request householding if you are receiving multiple copies of our proxy materials, you must contact your broker, bank or other nominee.
If you did not receive proxy materials, you can obtain a copy by contacting your bank or broker or other nominee. Or, you can request a copy by contacting CBL Investor Relations, either by mail or telephone at our corporate office, as listed on the first page of this Proxy Statement, or by e‑mail to Investor.Relations@cblproperties.com.
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OTHER BUSINESS OF THE MEETING
Management is not aware of any matters to come before the Annual Meeting other than those stated in this Proxy Statement. However, if any matters of which management is not now aware should come before the meeting or any adjournment, the proxies confer discretionary authority with respect to acting thereon, and the persons named in such proxies intend to vote, act and consent in accordance with their best judgment with respect thereto. Upon receipt of such proxies (in the form enclosed and properly signed) in time for voting, the shares represented thereby will be voted as indicated thereon and in this Proxy Statement.
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By Order of the Board of Directors |
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|
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STEPHEN D. LEBOVITZ |
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Chief Executive Officer |
Chattanooga, Tennessee
April 22, 2024
COPIES OF THE COMPANY’S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2023, MAY BE OBTAINED WITHOUT CHARGE BY ANY SHAREHOLDER TO WHOM THIS PROXY STATEMENT IS SENT UPON WRITTEN REQUEST TO CBL INVESTOR RELATIONS, CBL PROPERTIES, 2030 HAMILTON PLACE BLVD., SUITE 500, CBL CENTER, CHATTANOOGA, TENNESSEE 37421-6000.
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CBL ASSOCIATES PROPERTIES, INC. 2030 HAMILTON PLACE BLVD, SUITE 500 CHATTANOOGA, TN 37421-6000 SCAN TO VIEW MATERIALS VOTE VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time, on May 21, 2024 the day before the meeting date. Follow the instructions to obtain your records and to create an electronic voting instruction form. During The Meeting - Go to www.virtualshareholdermeeting.com/CBL2024 You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time, on May 21, 2024 the day before the meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. The Board of Directors recommends you vote FOR the following: For Withhold For All All All Except To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. 1. To re-elect seven directors to serve for one year and until their respective successors have been duly elected and qualified. Nominees 01) Marjorie L. Bowen 02) David J. Contis 03) David M. Fields 04) Robert G. Gifford 05) Jeffrey Kivitz 06) Stephen D. Lebovitz 07) Michael A. Torres The Board of Directors recommends you vote FOR proposals 2 and 3. For Against Abstain 2. To ratify the selection of Deloitte Touche, LLP as the independent registered public accountants for the Company's fiscal year ending December 31, 2024. 3. An advisory vote on the approval of executive compensation. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com CBL ASSOCIATES PROPERTIES, INC. ANNUAL MEETING OF STOCKHOLDERS ON MAY 22, 2024 This proxy is solicited on behalf of the Board of Directors The undersigned hereby appoints STEPHEN D. LEBOVITZ and JEFFERY V. CURRY, and each or any of them proxies, with power of substitution, to vote all shares of the undersigned at the Annual Meeting of Stockholders to be held on Wednesday, May 22, 2024 at 2:00 p.m., EDT, at www.virtualshareholdermeeting.com/CBL2024 or at any adjournment thereof, upon the matters set forth in the Proxy Statement for such meeting, and in their discretion, on such other business as may properly come before the meeting. IF NO CONTRARY SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, AND 3. (PLEASE MARK, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.) Continued and to be signed on reverse side 0000639102_2 R1.0.0.6