Summary
AvalonBay Communities, Inc. (AVB) has filed an 8-K report detailing amendments to the compensation structure for its non-employee directors, effective in 2006 and 2007. The primary change involves an increase in quarterly cash compensation from $7,500 to $10,000, commencing after the 2006 Annual Meeting of Stockholders. Additionally, the method for calculating annual restricted stock awards will be adjusted starting with the 2007 Annual Meeting. This modification aims to smooth compensation volatility by using the stock price on the award date rather than the prior year's award date for determining the number of shares granted.
Key Highlights
- 1Quarterly cash compensation for non-employee directors will increase from $7,500 to $10,000, effective after the 2006 Annual Meeting.
- 2The quarterly payment can still be received in cash or as deferred stock units, at the director's election.
- 3The calculation for annual restricted stock awards will change starting after the 2007 Annual Meeting.
- 4The adjustment in stock award calculation will use the closing stock price on the day of the award for determining the number of shares granted.
- 5The company states these changes are intended to attract, retain, and reward directors for their services.
- 6No additional fees will be paid for meeting attendance or committee chair positions.
Frequently Asked Questions
The primary change is an increase in the quarterly cash compensation for non-employee directors from $7,500 to $10,000, effective after the 2006 Annual Meeting of Stockholders.
Starting after the 2007 Annual Meeting of Stockholders, the number of restricted shares or deferred stock units granted annually will be based on the closing stock price on the day the award is granted, rather than the closing price on the fifth business day after the prior year's Annual Meeting.
No, the company explicitly states that directors receive no additional fees for meeting attendance or for chairing committees; their compensation consists of the quarterly payments and the annual stock awards.
AvalonBay Communities states that the adjustments are intended to smooth volatility in director compensation and are deemed appropriate to help assure sufficient compensation to attract, retain, and reward directors for their services.