8-KLeadership Changes

EQUITY RESIDENTIAL 8-K Report, Executive Changes (Sep 27, 2011)

Filed September 27, 2011For Securities:EQR

Summary

This Form 8-K filing by Equity Residential (EQR) on September 27, 2011, primarily details a significant retention award granted to CEO and President David J. Neithercut. The award, valued at $6,500,000, is designed to ensure Mr. Neithercut remains in his leadership roles until at least February 2016, aligning his interests with shareholder value creation through a mix of stock options and restricted LTIP Units. The Board of Trustees approved this award after extensive deliberation, citing Mr. Neithercut's successful leadership since 2006, evidenced by strong total shareholder returns significantly outperforming market indices like the S&P 500 and relevant REIT indexes. The company also highlighted its successful navigation of the recent financial crisis under his guidance as key factors in justifying the retention award.

Key Highlights

  • 1Equity Residential granted a $6.5 million retention award to CEO and President David J. Neithercut.
  • 2The award aims to retain Mr. Neithercut until at least February 2016.
  • 3The award consists of 50% stock options and 50% restricted LTIP Units.
  • 4The stock options are for 435,078 common shares at an exercise price of $53.13.
  • 5The restricted LTIP Units are 61,170 units, exchangeable for common shares on a 1:1 basis.
  • 6The Board cited Mr. Neithercut's leadership and the company's strong shareholder returns (73.8% total return since Jan 2006) as justification.
  • 7The award vests fully on February 1, 2016, with provisions for pro-rata vesting upon termination other than for cause, death, disability, or change in control.

Frequently Asked Questions

The main purpose of this filing is to disclose a significant retention award granted to Equity Residential's CEO and President, David J. Neithercut. This award is intended to incentivize him to remain with the company in his leadership roles.

The retention award is valued at $6,500,000 and is split equally. Fifty percent is in the form of stock options to purchase 435,078 common shares at $53.13 per share, and the other fifty percent is in 61,170 restricted LTIP Units, which are exchangeable for common shares.

The Board approved the award to ensure Mr. Neithercut's continued leadership until at least February 2016. They cited his successful track record since 2006, including strong shareholder returns that outperformed major indices, and his effective navigation of the financial crisis as key reasons.

The award vests fully on February 1, 2016, provided Mr. Neithercut remains employed and is not terminated for cause. Earlier vesting can occur upon his death, disability, or a change in control of the company. If his employment is terminated by the company for reasons other than cause, the award vests on a pro-rata basis.