Transactions with Related Persons
JWM Family Enterprises, L.P. (“Family Enterprises”) is a Delaware limited partnership that is beneficially owned and controlled by Mr. J.W. Marriott, Jr., the Company’s Chairman Emeritus and former Executive Chairman and Chairman of the Board, and members of his family, including Mrs. Deborah M. Harrison (daughter of J.W. Marriott, Jr.), a member of the Company’s Board; and Mr. David S. Marriott (son of J.W. Marriott, Jr.), the Chairman of the Company’s Board. Family Enterprises indirectly holds ownership interests in 17 hotels that we operate pursuant to management agreements with entities controlled by Family Enterprises. We also provide procurement, renovation and/or technical services for some of these properties pursuant to contracts entered into with the ownership entities. We expect such arrangements to continue in 2024. In 2023, we earned management fees of approximately $13.1 million plus reimbursement of certain expenses, and procurement, renovation and/or technical services fees of approximately $174,000 from our operation of and provision of services for these hotels. We have no financial involvement in Family Enterprises or in any of these hotels, other than as described in this paragraph.
Mr. Christopher Harrison (grandson of J.W. Marriott, Jr. and son of Mrs. Harrison) and Mr. Craig Ballard (son-in-law of Mrs. Harrison) hold an aggregate two-thirds interest in Dauntless Capital Partners, LLC (“Dauntless”), a private investment firm that manages long-term investments in hospitality real estate. Entities affiliated with Dauntless, and in which Dauntless and other Marriott family members hold interests, hold (or held in 2023) varying interests in 10 Marriott-branded hotels: seven hotels that are currently subject to franchise agreements; two hotels that we operate pursuant to management agreements with the hotel owner; and one franchised hotel that was sold to an unrelated third party in 2023. We expect management and franchise arrangements for hotels owned by entities affiliated with Dauntless to continue in 2024. It is possible Dauntless or entities affiliated with it will acquire interests in additional hotels operated or franchised by us. In 2023 (or, for interests acquired or sold in 2023, between the time when the interests in the hotels were acquired and December 31, 2023 or between January 1, 2023 and the time the interests were sold), we earned approximately $4.4 million of management, franchise and other fees related to such properties, plus reimbursement of certain expenses. Mr. Harrison and Mr. Ballard also hold an aggregate two-thirds interest in Twin Bridges Hospitality LLC, which has advised us that it acts (or expects to act) as asset manager for 12 Marriott-branded hotels under agreements with the hotel owners, including most of the Marriott-branded hotels referred to in this paragraph. We are not a party to any of those asset management agreements. Other than the management or franchise arrangements described in this paragraph, we have no financial involvement in the hotels or investment entities described in this paragraph.
Our Company was founded by Mr. J.W. Marriott, Jr.’s parents, and the Board believes that the involvement of Marriott family members in responsible positions of the Company makes a significant long-term contribution to the value of our corporate name and identity and to the maintenance of our reputation for providing quality products and services, reinforces the culture and core values that are the bedrock of our success, and promotes associate engagement and retention. In addition to Mr. David S. Marriott’s membership on the Board and role as Chairman of the Board and Mrs. Harrison’s membership on the Board and role as Global Cultural Ambassador Emeritus, the Company employs (or employed in 2023) other members of the Marriott family, including Mr. J.W. Marriott, Jr.’s son-in-law (and Mrs. Harrison’s husband) Mr. Ronald T. Harrison until his retirement in January 2023; and his grandson (and Mrs. Harrison’s son) Mr. Matthew Harrison. From time to time, the Company may also employ family members of other directors or executive officers. The compensation levels of such family members are set based on reference to external market practice for similar positions and/or internal pay equity when compared to the compensation paid to non-family members in similar positions. For 2023, Mr. Matthew Harrison’s total compensation, which includes, to the extent applicable, base salary, bonus, the value of stock-based awards, and all other compensation, for his service as a hotel general manager was $202,518. No other employed family members total compensation for 2023 exceeded $120,000.
The Company provides Mr. J.W. Marriott, Jr., the Company’s Chairman Emeritus and former Executive Chairman and Chairman of the Board, with various non-business-related services. He reimbursed the Company for the cost of these services provided by Company associates in the amount of $371,233 for 2023.
J.W. Marriott, Jr. and an affiliate of the Company entered into a non-exclusive aircraft time sharing agreement, dated September 20, 2018, which was amended and restated effective May 3, 2022 and effective September 14, 2023. The agreement permits him to compensate the Company for personal use of the Company’s aircraft, when not already committed for Company use. For flights under the time sharing agreement, J.W. Marriott, Jr. compensates the Company based on a cost reimbursement methodology compliant with Federal Aviation Administration regulations. In 2023, these reimbursements totaled approximately $201,000. An affiliate of the Company has also entered into non-exclusive aircraft time sharing agreements with Mr. Capuano (effective May 3, 2022, amended and restated effective September 14, 2023) and Mr. David S. Marriott (effective February 9, 2023), respectively, which permit them to compensate the Company for personal use of the Company’s aircraft based on a cost reimbursement methodology compliant with Federal Aviation Administration regulations. There were no reimbursements under Mr. Capuano’s time sharing agreement in 2023, and reimbursements under Mr. David Marriott’s time sharing agreement were less than $120,000. Additional information about Mr. Capuano’s use of the Company’s aircraft is included in the Executive Compensation section of this proxy statement.
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