8-KLeadership ChangesCorporate ChangesExhibits & Filings

AVALONBAY COMMUNITIES INC 8-K Report, Executive Changes (Nov 10, 2022)

Filed November 10, 2022For Securities:AVB

Summary

AvalonBay Communities, Inc. (AVB) announced a significant leadership transition, effective January 1, 2023. Timothy J. Naughton, currently Executive Chairman, will move to a non-executive Chairman role. In this new capacity, Mr. Naughton will transition from being an employee and executive officer to a non-employee director, continuing to provide strategic oversight to the Board. This change marks the completion of a management leadership transition that commenced with the hiring of Benjamin W. Schall as President in December 2020, with Mr. Schall continuing to report directly to the Board. This move is intended to provide a clear separation between executive management and board oversight, with Mr. Naughton’s ongoing role focused on governance rather than day-to-day operations. Investors should note that Mr. Naughton's compensation structure will change, reflecting his new non-executive role. He will receive a standard director retainer plus an additional annual cash retainer of $250,000 for his service as non-executive Chairman. His existing equity awards will continue to vest as scheduled, and he will receive his 2022 bonus and performance awards based on his executive service during the year.

Key Highlights

  • 1Timothy J. Naughton to transition from Executive Chairman to Non-Executive Chairman of the Board, effective January 1, 2023.
  • 2Mr. Naughton will cease to be an employee and executive officer, serving solely as a non-employee director.
  • 3Benjamin W. Schall, CEO and President, will continue to report directly to the Board, completing a management transition.
  • 4Mr. Naughton will receive an additional annual cash retainer of $250,000 for his role as Non-Executive Chairman.
  • 5Existing outstanding equity awards for Mr. Naughton will continue to vest on their regular schedule.
  • 6The Company's Bylaws were amended to clarify that the Chairman of the Board may be a non-officer.
  • 7The transition signifies a completed management succession plan initiated in December 2020.

Frequently Asked Questions

This transition signifies a planned leadership succession, separating executive management from board oversight. Mr. Naughton will shift from an active executive role to a governance-focused role as a non-employee director, ensuring continued strategic guidance while allowing CEO Benjamin W. Schall to lead day-to-day operations.

Mr. Naughton's compensation will change to reflect his new non-executive role. He will receive the standard retainer for non-employee directors, plus an additional annual cash retainer of $250,000 specifically for his service as Non-Executive Chairman. His outstanding equity awards will continue to vest as per their original terms.

This transition reinforces Mr. Schall's position as CEO and President, who will continue to report directly to the Board. This move completes the management leadership transition that began with Mr. Schall's hiring as President in December 2020, indicating confidence in his leadership.

The Bylaws were amended to explicitly allow for a Chairman of the Board who is a non-officer. This amendment formalizes the possibility of a non-executive Chairman, aligning with Mr. Naughton's new role and providing flexibility for future board leadership.