Toggle SGML Header (+)


Section 1: DEF 14A (DEF 14A)

udr_current_Proxy - DEF 14A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.  )

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Check Box White.JPG Filed by the Registrant

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))

C:\Users\bmaas\Desktop\2018 Proxy Images\Check Box Grey.JPG

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

UDR, Inc.

(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 the appropriate box):

C:\Users\bmaas\Desktop\2018 Proxy Images\Check Box Grey.JPG

No fee required. 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. 

(1) Title of each class of securities to which transaction applies:

(2) Aggregate number of securities to which transaction applies:

(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

Fee paid previously with preliminary materials. 

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 

(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

Picture 25

 

1745 SHEA CENTER DRIVE, SUITE 200

HIGHLANDS RANCH, CO 80121

__________________

 

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on May 21, 2020

__________________

You are cordially invited to attend the 2020 Annual Meeting of Shareholders (the “Meeting”) of UDR, INC. (“UDR” or the “Company”) to be held on Thursday, May 21, 2020, at 10:00 a.m. local time at The Ritz-Carlton Denver, 1881 Curtis Street,  Denver, Colorado 80202, for the following purposes:

1.

To elect eight directors, for a term of one year each, until the next Annual Meeting of Shareholders and until their successors are elected and qualified;

2.

To ratify the appointment of Ernst & Young LLP, to serve as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2020;

3.

To conduct an advisory vote on executive compensation; and

4.

To transact such other business as may properly come before the Meeting or any adjournment(s) thereof.

Only shareholders of record at the close of business on March 23, 2020, will be entitled to notice of, and to vote at, the Meeting or any adjournment(s) thereof.  Each share of common stock is entitled to one vote for each director position and one vote for each of the other proposals.

On or about April 2, 2020, we intend to mail to our shareholders of record a notice containing instructions on how to access our 2020 proxy statement (“Proxy Statement”) and our Annual Report on Form 10-K for the year ended December 31, 2019, and how to vote online. The notice also provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in e-delivery. If you received your annual meeting materials via email, the email contains voting instructions and links to our annual report and proxy statement on the Internet.  If you would like to reduce the costs incurred by UDR in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet.  To sign up for electronic delivery, please follow the instructions on the Proxy Card to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.  We want to thank you for helping make UDR an environmentally friendly company and for your continued support of UDR.

We intend to hold our annual meeting in person; however, we are actively monitoring the coronavirus (COVID-19). We are sensitive to the public health and travel concerns that our shareholders may have and the protocols that federal, state, and local governments have imposed or may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting by means of remote communication. Please monitor our annual meeting website at https://www.udr.com/2020annualmeeting for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.

WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE VOTE AS SOON AS POSSIBLE TO ENSURE THAT YOUR SHARES ARE REPRESENTED. 

 

 

 

By Order of the Board of Directors 

 

Picture 26

 

 

 

WARREN L. TROUPE

 

Corporate Secretary

April 2, 2020

Important Notice Regarding the Availability of Proxy Materials for

UDR’s Annual Meeting of Shareholders to be held on May 21, 2020.

This Proxy Statement and UDR’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 are available free of charge at the following website: www.proxyvote.com.

 

Picture 28

 

NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS

 

How To Vote In Advance

Your vote is important. Whether or not you plan to attend the meeting, we urge you to vote your shares electronically through the Internet, by telephone or, if you have requested and received a paper copy of the proxy statement, by completing, signing and returning the paper proxy card enclosed with the proxy statement.

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Phone.JPG

By Telephone:    You can submit your vote by proxy over the telephone by following the instructions provided on the separate proxy card if you received a printed set of the proxy materials.

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Computer.JPG

By Internet:  You can go to www.proxyvote.com and vote through the Internet.

C:\Users\bmaas\Desktop\2018 Proxy Images\Mail.JPG

By Mail:  If you have requested and received a paper copy of the proxy statement, you can mark, sign, date and return the paper proxy card enclosed with the proxy statement in the postage-paid envelope that we have provided to you. Please note that if you vote through the Internet or by telephone, you do not need to return your proxy card.

 

 

Important Notice Regarding the Availability of Proxy Materials for UDR, Inc.’s Annual Meeting of Shareholders to be held on May 21, 2020.  

 

This Notice of Annual Meeting and Proxy Statement and UDR, Inc.’s Annual Report/Form 10-K for the year ended December 31, 2019 are available on the Internet at the following website: www.proxyvote.com.

 

 

 

 

 

2020 PROXY STATEMENT HIGHLIGHTS

 

 

 

 

 

 

2019 Performance Highlights 

 

 

1, 3, 5 and 10-Year Total Shareholder Return as of December 31, 2019

 

 

 

 

 

 

1-Year

3-Year

5-Year

10-Year

UDR

21.5%

41.0%

78.1%

300.6%

 

 

 

 

 

NAREIT Apartment Index

26.3%

35.9%

62.7%

285.7%

NAREIT Equity Index

26.0%

26.5%

41.6%

208.9%

S&P 500 Index

31.5%

53.2%

73.9%

256.7%

Picture 475 

189th Consecutive Dividend Paid

Our January 2020 dividend represented our 189th consecutive quarterly dividend paid. We are committed to returning value to our shareholders, and for 2019 we increased our dividend by 5.7%, and we have increased our dividend 5.1% annually over the past 3 years, 5.9% annually over the past 5 years and 7.3% annually over the past 10 years.

 

 

 

 

 

 

 

 

1-Year

3-Year Average

5-Year Average

10-Year Average

5.7%

Dividend per share growth

5.1%

Dividend per share growth

5.9%

Dividend per share growth

7.3%

Dividend per share growth

6.4%

AFFO per
share growth
(a)

5.6%

AFFO per share growth(a)

7.2%

AFFO per share growth(a)

6.9%

AFFO per share growth(a)

(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 80.

1     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

Our Five Strategic Objectives

·

Our 2019 results consisted of improvement across all five of our strategic objectives, which are: 1) operating excellence, 2) balance sheet strength, 3) portfolio composition, 4) accretive capital allocation and 5) a strong, innovative culture with a focus on sustainability.  

 

Below is a summary of our results categorized by objective:

 

1.

Operating Excellence 

Picture 9

 

2.

Balance Sheet Strength

 Picture 45

 

*We present reconciliations of certain non-GAAP financial measures to their most directly comparable US generally accepted accounting principles (GAAP) measures in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Apartment Community Operations” in our 2019 Annual Report, including reconciliations of net income/loss reported under GAAP to NOI, FFO, FFO as Adjusted and AFFO, as well as additional information about non-GAAP measures.  

(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 80.

3.

Portfolio Composition 

Picture 449

2     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

4.

Accretive Capital Allocation

Picture 11

 

5.

A Strong, Innovative Culture

 

This area involves a variety of matters within each of the environmental, social and governance areas.  Highlights during 2019 include:

 

Environmental

Picture 453

Social and Community Engagement

Picture 454

Governance

Picture 455

 

3     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

Executive Compensation Highlights

 

Say-on-pay approved every year since it was first introduced in 2011; over the last five years, shareholder support for the vote on executive compensation has averaged 88%.

Focus on Variable Pay Linked to both Short-Term and Long-Term Performance

Picture 456

Focus on Performance-Based Compensation

Our focus on equity-based compensation, together with our robust CEO and executive stock ownership guidelines of 110,000 shares for the CEO and the President, 50,000 shares for any Executive Vice President and 20,000 shares for any Senior Vice President, assist in creating long-term alignment with our shareholders.

 

 

 

 

 

Compensation Framework

 

Salary

Short Term Incentive Plan

Long Term Incentive Plan

Who Receives

All Named Executive Officers

All Named Executive Officers

All Named Executive Officers

When Received

Annually

Annually, generally in February of the year following the performance period

Annually, generally in February of the year following the end of the applicable performance period

Form

Cash

Cash or Equity (decision made by executive in prior year)

Equity

Performance Period

Continuous

1 Year

1 Year for 30% of Award; 3 Years for 70% of Award

How Payment Determined

Committee Judgment

Performance Metrics for 70%; Individual Performance for 30%

Performance Metrics

 

4     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

Corporate Governance Highlights

Shareholder Engagement

In 2019, we had 345 interactions with our investors through meetings and property tours, representing ownership of approximately 79% of our outstanding common stock.

Proxy Access

The Company’s Amended and Restated Bylaws (“bylaws”) include a proxy access provision, which permits a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director candidates constituting up to 20% of the board.

Majority Voting

The Company’s bylaws specify a majority voting standard in uncontested director elections, which incorporates a director resignation policy for any director who does not receive the requisite vote.

Bylaw Amendment

Prior to our 2018 annual meeting, we reached out to shareholders holding approximately 74% of our outstanding common stock regarding a proposed amendment to our bylaws.  Following such discussions, we amended our charter and our bylaws to provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, may propose binding amendments to our bylaws.  In order to implement the amendment to our bylaws we were required to amend our charter, which previously provided that our bylaws could only be amended by our board.  The amendment to our charter received the approval of 74% of the votes cast. 

Succession Planning

We remain focused on refreshing the membership of the board. Over the last several years, we have added new independent directors to the board, most recently including the addition of Clint D. McDonnough in 2016, Mary Ann King in 2015 and Robert A. McNamara and Mark R. Patterson in 2014.

We also focus on the development of our executive management team.  In 2019, the board appointed Jerry A. Davis to President – Chief Operating Officer and five Vice Presidents were appointed to Senior Vice President.  Further, over the three years ending December 31, 2019, 716 of our associates were promoted, building a deeper and more diverse associate pool.  Of associates that were promoted to the positions of community director or director, or a higher job classification, over such three year time period, 57% were female and 28% were of ethnic backgrounds other than Caucasian.

In addition, in early 2020 our board adopted modifications to our Statement on Corporate Governance and our Nominating Committee Charter to enhance such documents by specifically requiring that diverse candidates, based on gender and ethnicity, be included in the initial pool for any external search for director candidates and any external search for a Chief Executive Officer, and to further provide that any search firm used for conducting any such search is required to include such candidates in its initial pool of candidates.  While our board has always considered diverse candidates in such searches, these modifications reflect our commitment to diversity more specifically in our Nominating Committee Charter and Statement on Corporate Governance.

Lead Independent Director

In 2017, our board determined that it was appropriate to appoint our Chief Executive Officer and President, Thomas W. Toomey, as Chairman of the Board, and, in connection therewith, to appoint James D. Klingbeil as Lead Independent Director in accordance with our governance standards.  Such appointments were effective January 1, 2018.

Honored in 2018 and 2019 for Board Composition

The Company was honored at the biennial Breakfast for Corporate Champions for having at least 30% of its board seats held by women.

Corporate Responsibility

Corporate responsibility is part of our culture and our values.  Accordingly, during 2018 we formed a corporate responsibility committee made up of members of management and headed by our Chairman and Chief Executive Officer.  The committee was formed in order to formalize our efforts with respect to environmental, social and governance initiatives and allow us to better recognize and manage risks and opportunities.  During 2018 we also hired a consultant well known in the multifamily real estate industry to assist us in reporting our efforts to the Global Real Estate Sustainability Benchmark (“GRESB”) Survey. We began reporting to GRESB in 2019.  Based on GRESB’s report in 2019, we received a GRESB public disclosure score of “A”.  In addition, in July of 2019 we published our initial Corporate Responsibility Report covering our efforts and achievements in 2018 and we intend to continue to publish such reports annually.

5     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

We take an inclusive approach to corporate responsibility, addressing not only governance, see pages 8 to 21, but also the impact that our efforts have on the lives of our associates and our residents and the communities of which we are a part, as well as the impact of our apartment communities on the environment.  Some highlights with respect to our associates and residents are set forth elsewhere in this proxy statement, see page 36.  With respect to our communities, for a number of years we have considered environmental impacts when making decisions regarding acquisitions, development and re-development.  Highlights in recent years are set forth below:

Picture 13

 

6     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

TABLE OF CONTENTS

 

PAGE

PROXY SUMMARY

 

PROPOSAL NO. 1 ELECTION OF DIRECTORS

1

Vote Required and Board of Directors’ Recommendation

7

CORPORATE GOVERNANCE MATTERS

8

Corporate Governance Overview

8

Identification and Selection of Nominees for Director

11

Proxy Access

13

Shareholder Bylaws Amendments

13

Director Rotation and Retirement

13

Director Independence

14

Succession Planning

14

Director Responsibilities and Obligations

16

Board Leadership Structure and Committees

16

Role of Compensation Committee and Compensation Consultants

18

Board of Directors and Committee Meetings

18

The Role of the Board in Risk Oversight

20

Board Evaluation

20

Communicating with the Board

21

COMPENSATION OF DIRECTORS

22

Director Compensation Table

22

Director Compensation Table Discussion

22

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

25

HUMAN CAPITAL MANAGEMENT

27

SUSTAINABILITY

29

EXECUTIVE OFFICERS

30

EXECUTIVE COMPENSATION

31

Compensation Discussion and Analysis

31

Compensation Committee Report

59

Compensation of Executive Officers

60

Employment and Other Agreements

66

Post-Employment Compensation - Severance, Change of Control and Other Arrangements

66

CEO Pay Ratio

67

Compensation Risks

68

Transactions with Related Persons

68

Equity Compensation Plan Information

69

AUDIT COMMITTEE REPORT

70

AUDIT MATTERS

71

Audit Fees

71

Pre-Approval Policies and Procedures

71

PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

72

Vote Required and Board of Directors’ Recommendation

72

PROPOSAL NO. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION

73

Vote Required and Board of Directors’ Recommendation

73

FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

74

Why did you provide this proxy statement to me?

74

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

74

What constitutes a quorum in order to hold and transact business at the meeting?

75

How do I vote?

75

How will my proxy be voted?

76

Will other matters be voted on at the annual meeting?

76

Can I revoke my proxy and change my vote?

76

What vote is required for the proposals if a quorum is present?

76

What is an abstention, and how will it affect the vote on a proposal?

77

What are broker non-votes, and how will they affect the vote on a proposal?

77

Who will tabulate the votes?

77

Who is soliciting the proxy, and who will pay for the proxy solicitation?

77

Where do I find the voting results of the meeting?

77

 

 

 

OTHER MATTERS

78

Delivery of Voting Materials

78

Annual Report

78

Shareholder Proposals for the 2021 Annual Meeting of Shareholders

78

Advance Notice Procedures for the 2021 Annual Meeting of Shareholders

78

Proxy Access Procedures for the 2021 Annual Meeting of Shareholders

78

DEFINITIONS

80

 

 

 

 

 

PROXY SUMMARY

 

This summary highlights selected information about the items to be voted on at the annual meeting. This summary does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.

 

 

Meeting Agenda and Voting Recommendations

 

 

 

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Proposal 1.JPG

Election of 8 Directors

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Big Colored Check.JPG

The Board recommends a vote FOR each of the director nominees.

 

Diverse slate of directors with broad leadership experience.

 

 

All candidates are highly successful executives with relevant skills and expertise.

 

 

Average director tenure of 12.25 years with 7 of 8 directors to be voted upon independent of management.

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Green Right Arrow.JPG See pages 1-7 for further information

 

 

 

 

 

 

 

Our Existing Board

 

 

Years of Tenure

 

# of Other Public Company Boards

 

 

Committee Memberships (2)

Name

Principal Professional

Experience (1)

  

 

 

AC

CC

GC

NC

EC

Katherine A. Cattanach

General Partner of INVESCO Private Capital, Inc.

 

 

14

0

Picture 244

 

Picture 243

 

Picture 477

Jon A. Grove

Chairman, President and CEO of ASR Investments Corporation

 

 

22

0

 

Picture 69

 

 

 

Mary Ann King

Co-Chairman of Moran & Company

 

 

5

0

Picture 239

 

Picture 476

 

 

James D. Klingbeil(3)

Chairman and CEO of Klingbeil Capital Management and The Klingbeil Company

 

 

22

0

 

 

 

C

C

Clint D. McDonnough

Office Managing Partner for Ernst & Young LLP’s Dallas office

 

 

4

1

C

 

 

Picture 238

 

Robert A. McNamara

Group Chief Risk Officer of Lend Lease Corporation

 

 

6

1

 

Picture 236

C

Picture 2

 

Mark R. Patterson

President of MP Realty Advisors, LLC

 

 

6

3

 

C

 

Picture 235

 

Thomas W. Toomey(4)

Chairman and CEO of UDR, Inc.

 

 

19

0

 

 

 

 

Picture 230

 

 

 

 

(1)

The professional experiences listed for Dr. Cattanach and Messrs. Grove, McDonnough and McNamara are these nominees’ former principal occupations.

(2)

Committee assignments for the period from the 2020 annual meeting to the 2021 annual meeting will be made after the annual election of directors at the 2020 annual meeting.

(3)

Lead Independent Director.

(4)

Chairman and Chief Executive Officer.

KEY: AC = Audit and Risk Management Committee    CC = Compensation and Management Development Committee    GC = Governance Committee    
NC =  Nominating Committee    EC = Executive Committee    Picture 225 = Member    C = Chair

 

S-1     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Information About Our Board And Committees (Page 18)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of

Members

  

Independent

 

Number of

Meetings During

2019

  Full Board of Directors

  

8

 

87.5%

 

5

  Audit and Risk Management Committee

  

3

 

100.0%

 

8

  Compensation and Management Development Committee

  

3

 

100.0%

 

5

  Governance Committee

  

3

 

100.0%

 

4

  Nominating Committee

 

4

 

100.0%

 

0*

  Executive Committee

  

3

 

66.7%

 

0

___________

* During 2019, the board of directors as a whole discussed board succession and refreshment.

GOVERNANCE HIGHLIGHTS (Page 8)

UDR has a history of strong corporate governance guided by three primary principles – dialogue, transparency and responsiveness.  The board has adjusted our governance approach over time to align with evolving best practices, drive sustained shareholder value and best serve the interests of shareholders.

Shareholder

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Annual Election of All Directors

Rights

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Majority Voting in Uncontested Director Elections

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Proxy Access for Eligible Director Candidates Nominated by Eligible Shareholders

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

No Shareholder Rights Plan (Poison Pill)

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Confidential Voting

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

No material restrictions on Shareholders’ right to call a special meeting

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Shareholder engagement with holders of approximately 79% of outstanding shares in 2019

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Ability for Shareholders to propose binding bylaw amendments

 

Independent

Oversight

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Strong Lead Independent Director role with clearly articulated responsibilities

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Audit, Compensation, Governance and Nominating Committees consist entirely of Independent Directors

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

All directors are independent, except the Chairman and Chief Executive Officer

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Independent Directors Meet Regularly in Executive Session

Good

Governance

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Extensive board dialogue with formal processes for shareholder engagement and frequent cross-committee and board communications

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Annual board and committee Self-Evaluations

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Strong annual individual director evaluation process

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Periodic continuing education for directors

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

All Directors Attended at Least 75% of Meetings Held

Policies requiring the initial pools of candidates for the board of directors and external searches for a Chief Executive Officer to include diverse candidates

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Annual Advisory Approval of Named Executive Officer Compensation

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Robust Code of Business Conduct and Ethics, and Code of Ethics for Senior Financial Officers

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Stock Ownership Guidelines for Executive Officers and Directors

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Prohibition on Hedging Transactions

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Pledging Transactions Prohibited Without Prior Approval

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Rectangle Colored Check.JPG

Policy on Recoupment of Performance-Based Incentives

 

S-2     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Proposal 2.JPG

Independent Registered Public Accounting Firm

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Big Colored Check.JPG

The Board recommends a vote FOR ratification of Ernst & Young LLP for 2020.

 

Independent firm with few ancillary services and reasonable fees.

 

 

Significant industry and financial reporting expertise.

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Green Right Arrow.JPG See page 72 for further information

 

 

 

 

 

 

 

Ernst & Young LLP, independent registered public accounting firm, served as our auditors for fiscal 2019.  Our Audit Committee has selected Ernst & Young LLP to audit our financial statements for fiscal 2020. Although it is not required to do so, the board is submitting the Audit Committee’s selection of our independent registered public accounting firm for ratification by the shareholders at the annual meeting in order to ascertain the view of our shareholders regarding such selection. Below is summary information about Ernst & Young’s fees for services during fiscal years 2019 and 2018:

 

 

 

 

 

 

 

 

 

 

 Description of Services

  

2019

 

  

2018

 

 Audit Fees

  

$

1,813,186

  

  

$

1,325,590

  

 Audit-Related Fees

  

 

  

  

 

  

 Tax Fees

  

 

106,539

  

  

 

75,597

  

 All Other Fees

  

 

  

  

 

  

TOTAL

  

$

1,919,725

 

  

$

1,401,187

  

 

S-3     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Proposal 3.JPG

Say-on-Pay: Advisory Vote on the Compensation of the Named Executive Officers

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Big Colored Check.JPG

The Board recommends a vote FOR this proposal.

 

Independent oversight by our Compensation and Management Development Committee, with the assistance of an independent consultant.

 

 

Executive compensation comprised of a mix of base salary, short-term incentive compensation and
long-term incentive compensation, and is determined based on the consideration of a number of factors described in more detail in “Executive Compensation — Compensation Discussion and Analysis.”

 

 

Executive compensation that is competitive with our peers and that is structured to be aligned with total return to shareholders and our strategy.

 

 

 

Our total shareholder return compares favorably to the peer group.

 

 

 

 

 

 

 

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Green Right Arrow.JPG See page 73 for further information

 

 

 

 

 

 

Executive Compensation Matters (Page 31)

We are requesting your non-binding vote to approve the compensation of our named executive officers as described on pages 31 through 69 of this proxy statement. The goals for our executive compensation program are to (i) attract, retain and motivate effective executive officers, (ii) align the interests of our executive officers with the interests of the Company and our shareholders, (iii) incentivize our executive officers based on clearly defined performance goals and measures of successful achievement, and (iv) align market competitive compensation with our short-term and long-term performance.

 

Our shareholders have consistently supported our executive compensation program. At our 2019 Annual Meeting of Shareholders, 93% of the votes cast were voted in favor of our resolution seeking advisory approval of our executive compensation. Over the last five years, shareholder support for our advisory vote on executive compensation has averaged 88% (with no year below 84%). While we have consistently had strong shareholder support for our executive compensation program, we do continue to engage in a dialogue with shareholders on executive compensation issues. We will continue to consider the outcome of future advisory votes on executive compensation when establishing the Company’s compensation programs and policies and making compensation decisions regarding our named executive officers.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Our Use of Abbreviations: We use a number of abbreviations in this proxy statement. We refer to UDR, Inc. as “UDR,” “the Company,” “we,” “us” or “our” and to our board of directors as the “board.”  The term “proxy materials” includes this proxy statement, as well as the enclosed proxy card. References to “fiscal 2019” and “fiscal 2020” mean our 2019 fiscal year, which began on January 1, 2019 and ended on December 31, 2019, and our 2020 fiscal year, which began on January 1, 2020 and will end on December 31, 2020, respectively. We refer to the Audit and Risk Management Committee as the “Audit Committee.”  We refer to the U.S. Securities and Exchange Commission as the “SEC” and we refer to the New York Stock Exchange as the “NYSE.”  Our 2020 Annual Meeting of Shareholders to be held on May 21, 2020 is simply referred to as the “meeting” or the “annual meeting.”

 

 

 

S-4     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

PROPOSAL NO. 1 ELECTION OF DIRECTORS

 

The eight individuals listed below, each of whom is currently a member of the board, have been nominated for election to the board at the 2020 annual meeting of shareholders.  If any of the nominees is unable or declines to serve as a director at the time of the meeting, the proxies will be voted for any nominee who is designated by the present board to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. The directors elected will hold their respective offices until the next annual meeting of shareholders or until their successors are elected and qualified.

Each nominee brings a strong and unique background and set of skills to our board, giving the board as a whole competence and experience in a wide variety of areas of value to the Company, including corporate governance and board service, executive management, corporate finance and financial markets, real estate investment and the real estate industry and civic leadership. For each of our director nominees, set forth below are the specific experience, qualifications, attributes or skills that led the board to conclude that the person should serve as a director for the Company. There is no family relationship between any of our directors or executive officers.

1     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Board Expertise

At UDR, we believe that diversity of background and perspective is an important attribute of a well-functioning board. Collectively, the members of our board standing for election embody a range of viewpoints, backgrounds and expertise:

Picture 478

Picture 5

 

2     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Picture 481

KATHERINE A.

CATTANACH, PH.D.

 

Picture 482

JON A. GROVE

Age:

75

 

Age:

75

UDR Board Service

 

UDR Board Service

Tenure:  14 years (2006)

 

Tenure:  22 years (1998)

Audit Committee

 

Compensation Committee

Executive Committee

 

 

 

Governance Committee

 

 

 

 

 

 

 

 

 

Independent

 

 

Independent

 

 

 

 

 

 

 

 

 

Professional Experience

   Former General Partner of INVESCO Private Capital, Inc. (formerly Sovereign Financial Services, Inc.), a company specializing in private equity investments, from 1987 to 2005.

Relevant Skills

   Currently a member of the Institute of Chartered Financial Analysts.

   Has a strong background in both business and academia, and her expertise in investments and finance is recognized nationally and internationally.

   Has executive management experience, having served as Founder and Chief Executive Officer of Sovereign Financial Services, Inc. and as Executive Vice President of Captiva Corporation.

   Has a Ph.D. in Finance and has served on the faculty of the College of Business at the University of Denver and as an Associate Professor of Finance at the University of Denver’s Graduate School of Business.

Other

   Former Secretary and a member of the Board of Trustees of Great Outdoors Colorado. She is active in, and serves as a member of, numerous charitable organizations.

   Member of the board of directors and chair of the audit committee of Great West Trust Company.

   Extensive civic leadership, including the Colorado Commission on Higher Education, the Governing Board for the Colorado State University System, the Foundation for Metropolitan State College, the Board of Trustees for the Colorado Chapter of the Nature Conservancy and the Board of Trustees for the Yellowstone Association.

   From 2005 to March 2006, she served as a director and member of the audit and compensation committees of Collect America, Ltd.

   Has served as a member of several corporate boards and board committees and on several partnership advisory boards.

 

 

Professional Experience

   Former Chairman, President and Chief Executive Officer of ASR Investments Corporation from its organization in 1987 until our acquisition of ASR in 1998.

   Former Chairman and director of American Southwest Holdings, LLC and SecurNet Mortgage Securities LLC.

Relevant Skills

   From 1987 to 1998, served as the Chairman, President and Chief Executive Officer of a publicly traded real estate investment trust that owned and operated apartment communities.

 

 

3     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Picture 483

MARY ANN KING

 

Picture 484

JAMES D. KLINGBEIL

Age:

67

 

Age:

84

UDR Board Service

 

UDR Board Service

Tenure:  5 years (2015)

 

Tenure:  22 years (1998)

Audit Committee

 

Lead Independent Director

Governance Committee

 

Executive Committee Chair

 

 

 

Nominating Committee Chair

 

 

 

 

 

 

Independent

 

 

Independent

 

 

 

 

 

 

 

 

 

Professional Experience

   Co-Chair of Moran & Company, a real estate brokerage firm focusing exclusively on multifamily assets and mixed use assets with significant multifamily components.

   Partner in Charge of Moran & Company’s Irvine, California office.

Relevant Skills

   Ms. King has been in the apartment industry since 1983.

   Has served three terms as a ULI trustee.

   Is currently a member of the National Multifamily Housing Council’s Executive Committee.

   Previously served on the National Multifamily Housing Council’s Leadership Team from 2000 to 2008 and chaired that organization from 2006 to 2008.

Other

   Over the Rainbow Association – Member of the Board of Directors, Member of the Executive Committee and Development Committee and Member and Chairman of the Association’s LIFE Fund.

   Member of the Advisory Board of Sack Properties.

   Full Member of ULI and Member of MFC-Blue Product Council; former Trustee from 2012-2015 and former Product Council Counselor for all four Multifamily Product Councils.

 

 

Professional Experience

   Lead Independent Director since January 2018.

   Chairman of the Board of Directors from March 2010 to December 2017 and Vice Chairman of the Board from October 2000 until March 2010.

   Chairman of Klingbeil Capital Management and The Klingbeil Company.

   Chairman and Chief Executive Officer of American Apartment Communities II from 1995 until its merger with the Company in December of 1998.

   He currently serves as a director of numerous private companies and on the Board of Trustees of The Ohio State University. He is also the past Chairman and a lifetime member of the Board of Trustees of the Urban Land Institute and a member of the ULI Foundation Board.

Relevant Skills

   Mr. Klingbeil has been active in nearly every aspect of real estate investment, development and management for over 60 years, with a special focus on building, acquiring, managing and/or selling multifamily communities.

   Chairman and Chief Executive Officer of American Apartment Communities II, which had a value of $800 million when we acquired it in December 1998, and he has demonstrated exceptional leadership abilities as a member of our board since that acquisition.

 

4     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Picture 485

CLINT D. MCDONNOUGH

 

Picture 486

ROBERT A. MCNAMARA

Age:

64

 

Age:

66

UDR Board Service

 

UDR Board Service

Tenure:  4 years (2016)

 

Tenure:  6 years (2014)

Audit Committee Chair

 

Compensation Committee

Nominating Committee

 

Governance Committee Chair

 

 

 

Nominating Committee

 

 

 

 

 

 

Independent

 

 

Independent

 

 

 

 

 

 

 

 

 

Professional Experience

   Managing Partner of McDonnough Consulting LLC, a consulting firm, since May 2016. 

   Served 38 years for Ernst & Young LLP before retiring in June, 2015.

   In his role as Office Managing Partner for Dallas, Texas, he was responsible for day-to-day practice operations.

   Prior to serving as the Office Managing Partner, Mr. McDonnough was the firm’s Managing Partner of Assurance & Advisory Business Services for the Southwest Area practice. He also served as Ernst & Young’s National Director of Real Estate Advisory Services.

Relevant Skills

   Served as Ernst & Young’s National Director of Real Estate Advisory Services, creating a unified national real estate consulting practice.

Other

   Has an extensive background in accounting, auditing and advisory services, having worked for 38 years with Ernst & Young LLP, including as the firm’s Office Managing Partner for Dallas, Texas, as Managing Partner of Assurance & Advisory Business Services for the Southwest Practice Area and as Director of Real Estate Advisory Services.

   Mr. McDonnough serves on the board of directors and is chair of the audit committee of Forterra (Nasdaq), a manufacturer of water and drainage pipe and products, and previously served on the board of directors and as chair of the audit committee of Orix USA, a diversified financial services company.

   Active in, and previously served on the boards of, several charitable, civic and educational organizations.

 

Professional Experience

   Former Group Chief Risk Officer of the Lend Lease Corporation (ASX), an international property and infrastructure firm from 2014 to 2017.

   Former Chief Executive Officer Americas of Lend Lease Corporation (ASX) from 2010 to 2014.

   Former Chairman and Chief Executive Officer of Penhall/LVI International, an environmental remediation, concrete services and infrastructure repair firm, from 2006 to 2010.

   Mr. McNamara held various positions at Fluor Corporation, a global engineering and construction company, from 1996 to 2006, including Senior Executive and Group President.

   Mr. McNamara began his career at Marshall Contractors, Inc., a general contractor, where he held various positions from 1978 to 1996, including President and Chief Operating Officer.

Relevant Skills

   Was responsible for ensuring Lend Lease achieves world’s best practice in risk management and operational excellence. He also oversaw Lend Lease’s Building, Engineering and Services business in Australia.

   Mr. McNamara is an accomplished senior executive with significant expertise in construction, development and real estate investment.

   He brings to the board over 35 years of experience managing global businesses in the development, design and delivery of projects in the government, institutional, infrastructure and industrial sectors in senior management positions.

Other

   Member of the Board of Directors and a member of the audit committee of Jacobs Engineering Group, Inc. (NYSE), a provider of technical, professional and construction services.

   Former Board member of several privately-held firms.

   Mr. McNamara has also served on the board of the US China Business Council and as Chairman for the Construction Industry Institute’s Technology Implementation Task Force.

 

5     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Picture 487

MARK R. PATTERSON

 

Picture 488

THOMAS W. TOOMEY

Age:

59

 

Age:

59

UDR Board Service

 

UDR Board Service

Tenure:  6 years (2014)

 

Tenure:  19 years (2001)

Compensation Committee Chair

 

Chairman of the Board

Nominating Committee

 

Executive Committee

 

 

 

 

 

 

 

 

 

 

 

Independent

 

 

 

 

Professional Experience

   Currently a real estate consultant and financial advisor and is a director and President of MP Realty Advisors, LLC.

   From September 2010 until March 2016, Mr. Patterson was Chairman, and until January 2015, Chairman and Chief Executive Officer, of Boomerang Systems, Inc., a manufacturer of fully automated, robotic parking systems.  In August 2015, Boomerang Systems, Inc. filed for bankruptcy under Chapter 11 of the US Bankruptcy Code.

   Until January 2009, Mr. Patterson was a Managing Director and the Head of Real Estate Global Principal Investments at Merrill Lynch, where he oversaw the real estate principal investing activities of Merrill Lynch. Mr. Patterson joined Merrill Lynch in April 2005 as the Global Head of Real Estate Investment Banking and in 2006 he also became the Co-Head of Global Commercial Real Estate, which encompassed real estate investment banking, principal investing and mortgage debt.

   Prior to joining Merrill Lynch, Mr. Patterson spent 16 years at Citigroup, where he was the Global Head of Real Estate Investment Banking since 1996.

   Previously, Mr. Patterson was with Chemical Realty Trust in New York from 1987 to 1989, as an Associate in the Real Estate Investment Banking group and in the Real Estate Group at Arthur Andersen in Houston, Texas from 1982 to 1985.

Relevant Skills

   Mr. Patterson has a strong background in real estate finance. During his tenure as Managing Director and Head of Real Estate Global Principal Investments at Merrill Lynch, Mr. Patterson oversaw investment banking, private equity and real estate debt.

Other

   Mr. Patterson is Chair of the board of directors, Chair of the governance committee and was previously a member of the compensation committee and the investment committee of Americold Realty Trust (NYSE), a REIT focused on temperature-controlled warehouses, serves on the board of directors and is a member of the audit committee and compensation committee of Digital Realty Trust (NYSE), a REIT focused on data centers, and serves on the board of directors and is a member of the compensation committee and governance committee of Paramount Group, Inc. (NYSE), a REIT focused on Class A office properties.

   Between 2011 and 2017, Mr. Patterson served on the board of directors and was a member of the audit, compensation and governance committees of General Growth Properties, a REIT focused on shopping malls, which was listed on the NYSE until its acquisition in 2018.

   Mr. Patterson is an Advisory Director for Investcorp International, Inc., a global private equity manager, and a senior advisor to Rockefeller Capital Management, a private wealth management firm.

 

Professional Experience

   Chairman and Chief Executive Officer of UDR, Inc., an $20 billion, S&P 500 company, having served as Chief Executive Officer and a member of the board since joining the Company in 2001.  Mr. Toomey also served as President of the Company from 2001 to 2019.

   Over his tenure, Mr. Toomey has been instrumental in repositioning UDR’s portfolio, including the acquisition and disposition of over $19 billion in multifamily communities and development of $4 billion in multifamily communities, which has led to above average return of 14% for UDR’s shareholders. As of December 2019, UDR owned or had an ownership interest in approximately 51,294 apartment homes in select markets across the U.S.

Relevant Skills

   Chief Executive Officer of UDR.

   Prior to heading UDR, Mr. Toomey held various senior positions, including Chief Operating Officer and Chief Financial Officer, with AIMCO (NYSE), a multifamily REIT peer. At AIMCO, Mr. Toomey was instrumental in transforming the company into the largest apartment owner in the U.S., growing its portfolio ten-fold over his tenure.

   Prior to AIMCO, Mr. Toomey served as a Senior Vice President with Lincoln Property Company, a multifaceted, national real estate firm, for five years.

Other

   As a leader in the real estate industry, Mr. Toomey is a Trustee, Governor and the immediate past Global Chair of the Urban Land Institute (ULI), a Board member of the ULI Foundation, a past member of the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), on the Executive Committee of the National Multi Housing Council (NMHC), a member of The Real Estate Roundtable and is past Chair and a Trustee of the Oregon State University Foundation.

   Mr. Toomey served on the board of directors and was a member of the audit committee of The Ryland Group, Inc. (NYSE), a home builder, from December 2013 until its merger with Standard Pacific in October 2015.

6     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Vote Required and Board of Directors’ Recommendation

 

The affirmative vote of a majority of the votes cast is required for the election of a director in an uncontested election. A majority of the votes cast means that the number of shares voted “for” a director’s election exceeds fifty percent of the total number of votes cast with respect to that director’s election. If an incumbent director does not receive a majority of the votes cast for his or her election, the director is required to tender his or her resignation for the consideration of the board. See “Corporate Governance Matters – Majority Voting Standard for Uncontested Director Elections.”

 

 

C:\Users\bmaas\Desktop\2018 Proxy Images\Green Check Grey back.JPG  Our board recommends that the

shareholders vote “FOR” the director nominees listed above.

 

 

 

7     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

CORPORATE GOVERNANCE MATTERS

 

Corporate Governance Overview

We believe that effective and transparent corporate governance is critical to our long-term success and our ability to create value for our shareholders. We frequently review our corporate governance policies, monitor emerging developments in corporate governance and enhance our policies and procedures when our board determines that it would benefit our Company and our shareholders to do so.

We maintain a corporate governance page on our website that includes key information about UDR’s corporate governance, including our:

 

 

 

 

 

 

Statement on Corporate Governance;

  

 

Code of Business Conduct and Ethics;

  

 

Code of Ethics for Senior Financial Officers;

  

 

Related Person Transactions Policy;

  

 

Amended and Restated Insider Trading Policy;

  

 

Recoupment of Performance-Based Incentives Policy;

  

 

Executive Stock Ownership Guidelines;

 

 

Charter of the Audit Committee;

  

 

Charter of the Compensation Committee;

  

 

Charter of the Governance Committee; and

 

 

Charter of the Nominating Committee.

All of these documents can be found by accessing the “Investor Relations” page at ir.udr.com and then clicking on “Corporate Governance” and “Governance Documents.” The documents noted above will also be provided without charge to any shareholder who requests them. Any changes to these documents, and any waivers granted by us with respect to our Code of Business Conduct and Ethics and our Code of Ethics for Senior Financial Officers, will be posted on our website.

We believe in and follow certain principles with respect to governance as follows:

 

 

·

 

·

 

 

Principle 1:

Boards are accountable to shareholders.

 All directors stand for election annually

Proxy access with market terms

Shareholder ability to propose binding bylaw amendments

Principle 2:

Shareholders should be entitled to voting rights in proportion to their economic interest.

Each shareholder gets one vote per share

Majority voting in uncontested director elections, and directors not receiving majority support must tender their resignation for consideration by the board

Principle 3:

Boards should be responsive to shareholders and be proactive in order to understand their perspectives.

Management met with investors owning approximately 79% of shares outstanding in 2019

Engagement topics included corporate strategy, sustainability and social strategy, enterprise risk management, board composition, leadership and refreshment, succession planning, ESG, culture, and executive compensation program

 

8     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

·

 

·

 

·

 

 

Principle 4:

Boards should have a strong, independent leadership structure.

 Strong Lead Independent Director with clearly defined duties that are disclosed to shareholders

Board considers appropriateness of its leadership structure at least annually

Strong Independent Committee Chairs

Proxy Statement discloses why board believes current leadership structure is appropriate

Principle 5:

Boards should adopt structures and practices that enhance their effectiveness.

As of March 23, 2020, 87.5% of board members are independent

Annual board evaluation

Active board refreshment plan; four new board members in last six years

Principle 6:

Boards should develop management incentive structures that are aligned with the long-term strategy of the company.

Our vote on our executive compensation program received approximately 93% shareholder support in 2019

Compensation Committee annually reviews and approves incentive program design, goals and objectives for alignment with compensation and business strategies

Annual and long-term incentive programs are designed to reward financial and operational performance that furthers short- and long-term strategic objectives

 

We also monitor our corporate governance policies and practices to maintain compliance with the provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the rules of the SEC and the corporate governance rules of the NYSE. Our policies and practices meet, and in many cases exceed, the listing requirements of the NYSE, applicable SEC rules and the corporate governance requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, including: 

 

 

The board has adopted clear corporate governance policies;

  

 

Seven of our eight current board members (and seven of the eight to be voted on at the 2020 annual meeting) are independent directors as defined by the NYSE;

  

 

The independent directors meet regularly without the presence of management;

  

 

All members of the Audit Committee, Compensation Committee, Governance Committee and Nominating Committee are independent directors;

  

 

While the Chairman and Chief Executive Officer role is combined, the board has appointed a Lead Independent Director in accordance with our Statement on Corporate Governance;

  

 

The charters of the board committees clearly establish their respective roles and responsibilities and are reviewed annually;

 

 

The board has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers, and employees and that is required to be provided to agents and consultants that, among other things, prohibits bribery and other forms of corruption;

  

 

We have a Code of Ethics for Senior Financial Officers that applies to our senior financial officers; and

  

 

We have a hotline with a 1-800 number and a third-party anonymous reporting system at www.mysafeworkplace.com available to all employees, and our Audit Committee has procedures in place for the anonymous submission of any employee complaint, including those relating to accounting, internal controls or auditing matters. Instructions for making a report are published in the Corporate Governance subsection of the Investor Relations page of the Company’s website at ir.udr.com.

9     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Majority Voting Standard for Uncontested Director Elections

The Company’s bylaws specify a majority voting standard in uncontested director elections, which incorporates a director resignation policy for any director who does not receive the requisite vote. Under this majority voting standard, the affirmative vote of a majority of the votes cast is required for the election of a director in an uncontested election. A majority of the votes cast means that the number of shares voted “for” a director’s election exceeds fifty percent of the total number of votes cast with respect to that director’s election. If an incumbent director does not receive a majority of the votes cast for his or her election, the director is required to tender his or her resignation to the board. The board would then decide within 90 days following certification of the shareholder vote, through a process managed by the Governance Committee and excluding the nominee in question, whether to accept or reject the tendered resignation, or whether other action is recommended. The board would promptly publicly disclose its decision and rationale. If an incumbent director’s resignation is accepted by the board, then the board may fill the resulting vacancy or decrease the size of the board in accordance with the bylaws. If a director's resignation is not accepted by the board, such director will continue to serve until his or her successor is duly elected and qualified, or his or her earlier death, resignation, retirement or removal. For the purposes of applying this majority voting standard, an election is considered “uncontested” if no shareholder provides notice of intention to nominate one or more candidates to compete with the boards’ nominees in the manner required by the bylaws, or if any such shareholder or shareholders have withdrawn all such nominations at least ten (10) days prior to the filing our definitive proxy statement with the SEC. In any contested election, each director shall be elected by a plurality of votes cast, in which case each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted.

Our Commitment to Shareholder Engagement

The Company has an ongoing proactive practice of meeting with and discussing corporate governance issues with significant shareholders throughout the year.  We value the insights of and feedback from our shareholders and remain committed to ongoing engagement with investors.  To this end, we engage in regular outreach to enable meaningful discussion and deliver feedback to our board to help drive strategic results.  In 2019, we engaged in direct outreach and discussions with 345 shareholders representing 79% of our outstanding shares.  Key topics of focus during such interactions included company strategy and results, technological operating and capital allocation initiatives and environmental, social and governance (ESG) matters.

·

Ongoing Shareholder Outreach: Our Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer, and Investor Relations team frequently meet/interact with shareholders, including the investment community, throughout the year.  In addition, members of management, including our Senior Executive Vice President, General Counsel, Chief Financial Officer, and Investor Relations team, meet and interact with key governance contacts at our larger shareholders and other such as proxy advisors over the course of the year.

·

Purposeful Engagement: We seek transparent and collaborative discussions with shareholders, and our engagement with investors includes the appropriate level of senior management for the topics being discussed to ensure actionable outcomes, where appropriate.

·

Regular Board Meetings: The Governance Committee, Compensation Committee, Audit Committee, and the board request and receive reports regarding shareholder engagement several times each year from UDR management.  In addition to reviewing the content of such reports, our board will consider shareholders’ feedback and insights.

10     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

·

We also attend a variety of investor conferences annually at which we interact with shareholders throughout the year.  While the schedule may vary year-to-year, the conferences we attended in 2019 are as follows:

o

January 2019

§

Evercore ISI Annual Denver Investor Meeting

o

March 2019

§

Citi Global Property CEO Conference

§

BofA/ML Seattle/San Francisco Investor Tour and Sit Down

§

Citi New York City Investor Tour and Sit Down

o

May 2019

§

BofA/ML New York City Deep Dive

§

Evercore ISI Boston Investor Tour and Sit Down

§

Evercore ISI Seattle/San Francisco Investor Tour and Sit Down

o

June 2019

§

NAREIT 2020 Investor Conference

o

August 2019

§

Mizuho Securities Denver Investor Meeting

o

September 2019

§

Evercore ISI Annual Real Estate Conference

§

BofA/ML Global Real Estate Conference

§

Citi Seattle Investor Tour and Sit Down

§

Boston Non-Deal Roadshow Hosted by Citi

§

Jefferies Denver Investor Meeting

o

October 2019

§

U.S. Bank Boston Fixed Income Investor Tour and Sit Down

o

November 2019

§

NYC Sell-Side Analyst Non-Deal Roadshow

§

NAREIT REITworld 2020 Annual Conference

§

Citi NAREIT LA Investor Tour

o

December 2019

§

Citi Philadelphia Investor Tour and Sit Down

§

Toronto Non-Deal Roadshow Hosted by Morgan Stanley

§

Chicago Non-Deal Roadshow Hosted by JP Morgan

Identification and Selection of Nominees for Directors

Our Nominating Committee works closely with our Chairman and Chief Executive Officer (“CEO”) and Lead Independent Director (who currently serves as Chairman of the Nominating Committee) in recommending to the board criteria for open board positions, taking into account such factors as the Nominating Committee deems important, including, among others, the current composition of the board, the range of talents, experiences, expertise and skills that would complement those already represented on the board and those that would help achieve the Company’s goals. In evaluating a nominee, the board, acting through our Nominating Committee, will consider, among other things, whether a potential director nominee has the time available, in light of other business and personal commitments, to perform the responsibilities required for effective service on the board. The Nominating Committee considers candidates that are suggested by members of the board, as well as management, our shareholders and any director search firm retained by the board or the Nominating Committee, using the same criteria to evaluate all candidates.

11     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

The board believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of our business. In 2020, consistent with its overall views with respect to diversity and in order to formalize our practice, the board enhanced our Statement on Corporate Governance and the Charter of our Nominating Committee by amending such documents to specifically require that diverse candidates, based on gender and ethnicity, be included in the initial pool for any external search for director candidates or for any external search for a Chief Executive Officer.  In addition, any search firm used for conducting any such searches is required to include such candidates in its initial pool of candidates.  The board, through the Nominating Committee and in consultation with our CEO, will regularly review the changing needs of the business and the skills and experience of its board members, with the intention that the board will be periodically “renewed” as certain directors rotate off and new directors are recruited. The board’s commitment to diversity and renewal will be tempered by the need to balance change with continuity and experience. The board believes that its commitment in this regard has been effective in establishing a board that consists of members with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of the business, and the board will continue to monitor the effectiveness of these efforts as part of its periodic self-assessment process.

Once a potential director nominee has been identified, the Nominating Committee, in consultation with the Chairman and CEO and Lead Independent Director, will evaluate the prospective nominee against the specific criteria that have been established, as well as the standards and qualifications contained in our Statement on Corporate Governance. If it is determined based upon a preliminary review that a candidate warrants further consideration, members of the board, as appropriate, will interview the prospective nominee. After completing this evaluation and interview process, the board makes the final determination as to whether to nominate or appoint the new director.

Picture 7

In addition to any other applicable requirements, Section 2.11 of the bylaws sets forth the procedures and requirements relating to nominations of directors by shareholders. Any shareholder who wishes to recommend a prospective nominee for consideration at our 2021 annual meeting of shareholders must submit specified information, no sooner than November 3, 2020 and no later than December 3, 2020.

 

Each proposed candidate also must submit a written questionnaire, representation and agreement specifically addressing agreements, arrangements or understandings that the candidate has with certain other persons, including with respect to voting commitments and compensation, as well as a representation and agreement to

12     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

comply with our applicable policies, codes and guidelines. Such information should be sent to the attention of our Corporate Secretary at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129-1540.

Proxy Access

The Company’s bylaws include a proxy access provision which permits a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director candidates constituting up to 20% of the board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the bylaws.

Shareholder Bylaws Amendments

At our 2018 annual meeting, the Company sought shareholder approval to amend our charter to remove the exclusive ability of the board, as is permitted by Maryland law, to amend our bylaws. The amendment to our charter received the approval of 74% of the votes cast. 

Prior to our 2018 annual meeting, we reached out to shareholders holding approximately 74% (including 24 of our largest shareholders) of our outstanding common stock regarding our proposed amendment to our bylaws.  Based on such discussions, the vast majority of such shareholders’ view was that an ownership limit in excess of that provided by Rule 14a‑8 promulgated by the Securities and Exchange Commission would be appropriate in order to ensure that the shareholder proposing an amendment to our bylaws was committed to the long-term success of the Company as evidenced by being a long-term investor with a substantial ownership interest in the Company.  While there were shareholders who informed us that our proposed ownership limit was acceptable, there was not a consensus as to what is the appropriate ownership limit, with some shareholders indicating that they consider it on a case-by-case basis.  In addition, our own research confirmed and continues to confirm that a number of public companies require a supermajority vote of shareholders to amend the bylaws and that a number of companies incorporated in Maryland provided and continue to provide their board of directors with the exclusive ability to amend the bylaws, as permitted by Maryland law.

Following the approval by our shareholders of the charter amendment, the board amended our bylaws to provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years could propose a binding amendment to our bylaws.  A shareholder proposal submitted under our amended bylaws may not alter, modify or repeal Article VII of the bylaws (which addresses indemnification) or Section 8.5 (which addresses procedures for amending the bylaws) without the approval of any indemnitees adversely affected or our board, respectively. 

While the board believes that the bylaw amendment was appropriate, the board routinely considers governance matters, including the views of our shareholders, and may in the future determine that it is appropriate to take further action with respect to our shareholders’ ability to propose binding amendments to our bylaws.

Director Rotation and Retirement

Directors are elected annually to serve for a term until the next annual meeting of shareholders or until their successors are elected and qualified. The board does not impose arbitrary limits on the number of terms a director may serve. However, the Nominating Committee will consider various criteria, including a director’s contribution to the board, in determining whether or not to recommend a director for re-election. Employee directors are required to resign as a director after ceasing to be an employee, unless the board asks them to continue to serve. The Chairman will refer the resignation to the Governance Committee for review. The board will decide, in light of the circumstances and the recommendation of the Governance Committee, the date at which the resignation will become effective. A vacancy created by a director’s retirement may be filled by a majority of the remaining directors in accordance with our bylaws. A director so appointed to fill the vacancy will

13     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

stand for re-election at the first annual meeting of shareholders following that director’s appointment to the board if recommended for re-election by the Nominating Committee. In addition, the Company requires that directors tender their resignation when they change employment or other significant organizational affiliations. The board then decides, in light of the circumstances and the recommendation of the Governance Committee, whether to accept such resignation.

Director Independence

The board’s policy is that a significant majority of its members should be independent directors (see our Statement on Corporate Governance, which is available on our website at ir.udr.com). Each year, the board affirmatively determines whether each director has any material relationship with the Company (directly, or as a partner, shareholder or officer of an organization that has such a relationship with the Company), as defined under the NYSE listing standards and the Company’s director independence standards. The board has determined that all directors who served in 2019, and the directors who are standing for election at the annual meeting, are independent under both sets of standards, except Mr. Toomey, who is not independent because, in addition to serving as Chairman, he is the Company’s CEO. Additional information about each of the directors standing for election is set forth under Proposal No. 1 in this proxy statement. In making these independence determinations, the board considered information submitted by the directors in response to directors’ questionnaires and information obtained from the Company’s internal records.

Succession Planning

One of the primary responsibilities of the board is to ensure that the Company has the necessary senior management talent to pursue our strategies and to be successful. The Company’s Statement on Corporate Governance states that the board is responsible for appointing the CEO, and planning for his succession, as well as the succession for other executive officers of the Company. The Compensation Committee is responsible for annually reviewing the development and retention plans for the Company’s key executive officers, including the CEO, reviewing and approving a succession plan for the CEO, and ensuring succession plans are in place for the Company’s key executive officers reporting to the CEO. Consistent with its responsibilities, the Compensation Committee regularly reviews succession plans for the CEO and the key executive officers, and reports to the board regarding those plans. Under the direction of the Compensation Committee, the CEO and the SVP – Organizational Development and Engagement have undertaken and continue to undertake a concerted effort to develop and implement a strategy to identify, assess and develop successors for the key executive officers. This effort involves potential candidates working with third party consultants and completing a series of leadership assessment programs with the goal of determining skill sets and executive potential as potential successors for key executive officers.

 

14     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

The graphic below illustrates the activities taken in connection with succession planning.

 

C:\Users\bmaas\Desktop\Proxy 2019 Images\19 - Board Review of Succession.JPG

 

The Company has a proven track record on talent development and succession:

·

Mr. Davis was promoted to President-Chief Operating Officer in 2019;

·

Five Vice Presidents were promoted to Senior Vice Presidents in 2019;

·

We had successful CFO and Chief Accounting Officer transitions in 2017;

·

Over the three-year period ending on December 31, 2019 we have deepened our management pool and have also made it more diverse:

·

57% of associates who were promoted to the positions of community director or director or higher job classifications were female; and

·

28% were of ethnic backgrounds other than Caucasian.

15     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

The following outlines certain highlights of our succession planning:

 

 

Management Succession

The Company maintains an executive talent pipeline for every executive officer position, including the CEO position.

The executive talent pipeline includes “interim,” “ready now,” and “under development” candidates for each position.  The Company has an intentional focus on those formally under development for executive roles.  Management is also focused on attracting, developing and retaining strong talent across the organization.

The executive talent pipeline is formally updated annually and is the main topic of at least two of the Compensation Committee’s meetings each year.  The Compensation Committee also reviews the pipeline in connection with year-end performance and compensation reviews for every executive officer position.  The pipeline is discussed regularly at the executive management level as well.

Talent development and succession planning is a coordinated effort among the CEO, the Compensation Committee, and the Company’s Human Resources team, as well as each succession candidate.

The board is provided exposure to succession candidates for executive officer positions, including by attendance of potential candidates at board meetings from time-to-time.

All executive succession candidates have development plans.

All CEO succession candidates receive one-on-one development from a professional executive coach.

The CEO provides formal updates to the Compensation Committee and the board annually on CEO succession candidates’ development plan progress.

The Company maintains a forward-looking approach to succession. Positions are filled considering the business strategy and needs at the time of a vacancy and the candidate’s skills, experience, expertise, leadership and fit.

 

Director Responsibilities and Obligations

Our directors have specific responsibilities and obligations arising from their service on the board and the Committees of the board, as described in the table below:

 

 

 

Responsibilities of the

Board of Directors:

In addition to each director’s basic duties of care and loyalty, the board has separate and specific obligations under our Statement on Corporate Governance. Among other things, these obligations require directors to effectively monitor management’s capabilities, compensation, risk oversight, leadership and performance, without undermining management’s ability to successfully operate the business. In addition, the board and the board’s committees have the authority to retain outside legal, accounting or other advisors, as necessary, to carry out their responsibilities.

Director Education:

All directors are expected to be knowledgeable about the Company and its industry and to understand their duties and responsibilities as directors. The Company recognizes the importance of continuing education for directors and is committed to supporting continuing director education in order to enhance board and committee performance. We conduct periodic continuing education for directors and, at a director’s request, we will arrange for the director’s participation in cost-effective continuing education programs offered by third parties that are relevant to the director’s role as a board and committee member. All of our independent directors are expected to participate in orientation programs. In addition, orientation sessions are conducted by senior management to familiarize directors with the Company’s strategic plans, significant financial, accounting and risk management issues, our compliance programs, our Code of Business Conduct and Ethics, and our principal officers, as well as our internal and external auditors.  Finally, certain board meetings are held in locations where we own properties so that directors can observe our properties and operations.

Director Evaluations:

The board, acting through the Governance Committee, annually evaluates the effectiveness of the board collectively and of board members individually, and the performance of each standing board committee. The Governance Committee determines the appropriate means for this evaluation.

Committee Evaluations:

Each committee of the board annually evaluates the effectiveness and performance of each respective committee collectively and of the members of each respective committee individually.

Directors’ Share

Ownership Guidelines:

Our Statement on Corporate Governance provides that each director is expected to develop a meaningful equity stake in our Company over time and that after the fifth anniversary of election to the board, each director is required to own shares of the Company’s common stock and/or LTIP Units (as described below) equivalent to not less than 5 times their respective annual cash retainer. Each of our directors is in compliance with our share ownership guidelines.

Board Attendance at

Annual Meeting:

The board has adopted the following policy on director attendance at meetings: Absent extenuating circumstances, directors are expected to attend in person our annual meeting of shareholders, all regularly scheduled board and committee meetings and to participate telephonically in regularly scheduled board and committee meetings when they are unable to attend in person. All of our ten serving directors attended our 2019 annual meeting of shareholders.

16     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Board Leadership Structure and Committees

The leadership structure of the board and information regarding the Audit, Compensation, Governance and Nominating Committees is provided in the following table:

 

 

Board Leadership Structure:

The board periodically evaluates our board leadership structure. As stated in our Statement on Corporate Governance, the board will exercise its discretion in combining or separating the offices of Chairman of the Board and Chief Executive Officer. The determination is based on the board’s judgment of the best interests of the Company and its shareholders from time to time.

 

We currently combine the roles of the Chairman of the Board and Chief Executive Officer.  Effective January 1, 2018, the board appointed Mr. Toomey Chairman of the Board, in addition to his roles at that time of Chief Executive Officer and President. The appointment of Mr. Toomey to the role of Chairman of the Board, Chief Executive Officer and President in 2018 reflected his strong knowledge of the multifamily real estate industry and the complex operations of UDR. Effective January 1, 2019, Mr. Toomey resigned as President and Mr. Davis was appointed President – Chief Operating Officer. The board believes that while serving as Chairman and Chief Executive Officer, Mr. Toomey is best equipped to lead the board in the discussion of key business and strategic matters, and to focus the board on the most critical issues facing UDR. The board further believes that, in serving as the Chairman and Chief Executive Officer, Mr. Toomey offers the Company-specific expertise and extensive industry knowledge that is necessary as we pursue our five strategic objectives, which are operating excellence, balance sheet strength, portfolio diversification, capital allocation and creating an empowering culture and a great place to work and live, while at the same time leading the board’s efforts in oversight of the Company and its management.

Our Statement on Corporate Governance provides that if the offices of Chairman of the Board and Chief Executive Officer are combined, or if the Chairman does not qualify as an independent director, the board will designate a Lead Independent Director, who will chair the executive sessions of the board and have such other duties as the board deems appropriate. The name of the Lead Independent Director will be disclosed in our annual proxy statement.

 

Effective January 1, 2018, the board appointed Mr. Klingbeil as Lead Independent Director.  Mr. Klingbeil has extensive experience leading the board, having served as Chairman of the Board from 2010 to 2017, and having served as Vice Chairman of the Board from 2000 to 2010.  Mr. Klingbeil has served on the board since 1998. As Lead Independent Director, Mr. Klingbeil’s duties include:

  presiding at all meetings of the board at which the Chairman is not present;

  calling meetings of the independent directors;

  chairing meetings of the independent directors;

  serving as a liaison between the Chairman and the independent directors;

  approving agendas for the meetings of the board;

  approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;

  developing and managing (with oversight from the Governance Committee) a process for the annual evaluation of the effectiveness of directors and the board;

  serving as an informal advisor to the Chairman on matters pertaining to board practices; and

  performing such other duties as the board may from time to time delegate.

The board’s administration of its risk oversight function has not affected the board’s leadership structure.

Independence of the Audit,

Compensation, Governance and Nominating Committees:

 

The Audit, Compensation, Governance and Nominating Committees consist entirely of independent directors, as defined in the NYSE listing standards and the Company’s director independence standards. Each member of the Audit Committee and the Compensation Committee also satisfies the additional independence requirements set forth in rules under the Securities Exchange Act of 1934 and the NYSE listing standards.

 

17     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Audit Committee

Financial Expert:

Each member of the Audit Committee is financially literate, and the board has determined that each member of the Audit Committee is an “audit committee financial expert” within the meaning of the SEC’s regulations.

Executive Sessions of

Independent Directors:

Our independent directors hold regularly scheduled executive sessions at which our independent directors meet without the presence of management. These executive sessions generally occur around regularly scheduled meetings of the board. The Lead Independent Director presides as chairman of these executive sessions.

Compensation Committee

Interlocks and Insider

Participation:

The members of the Compensation Committee in fiscal 2019 included Jon A. Grove, Robert A. McNamara, and Mark A. Patterson (Chairman). None of the members of the Compensation Committee during fiscal 2019, or as of the date of this proxy statement, is a former or current officer or employee of the Company or has any interlocking relationships as set forth in applicable SEC rules. In addition, during 2019 and through the date of this proxy statement, none of our executive officers has served as a member of the board or compensation committee of any other entity that has one or more executive officers serving as a member of our board or Compensation Committee.

 

 Role of Compensation Committee and Compensation Consultants

Our Compensation Committee is responsible for developing and administering compensation programs for (1) our directors, (2) our executive officers, including base salaries and short-term and long-term incentive compensation plans, and (3) long-term incentive compensation plans for all of our associates. Annually, the entire board submits an evaluation of the CEO’s performance to the Chairman of the Compensation Committee and then the board meets in executive session to discuss and evaluate the performance of our CEO.  After that, the members of the Compensation Committee meet in executive session, without the CEO present, to further discuss and evaluate the performance of our CEO.

 

Our CEO makes recommendations to, and consults with, the Compensation Committee with respect to the compensation for the executive officers who report directly to our CEO.

 

The Compensation Committee has the sole authority to retain and terminate any compensation consultants to be used to assist in establishing compensation for our executive officers and to approve such consultants’ fees and other retention terms. The Compensation Committee engaged FPL Advisory Group as its independent compensation consultant.

 

FPL reports directly to the Compensation Committee, and the Compensation Committee is free to replace FPL or to hire additional consultants from time to time. FPL does not have any conflict of interest with the Company, the members of the Compensation Committee or our executive officers. For more information regarding the Compensation Committee’s compensation consultants, see Executive Compensation — Compensation Discussion and Analysis — Compensation Consultants.”

Board of Directors and Committee Meetings

The board held five meetings during fiscal 2019, including one meeting that was held by teleconference. No director attended fewer than 75% of the aggregate of (1) the total number of meetings of the board, and (2) the total number of meetings held by all committees of the board on which he or she served during fiscal 2019. The board has standing Audit, Compensation, Governance, Nominating and Executive Committees to assist it in discharging its duties. Information regarding each committee is set forth below: 

18     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Committee

 

Members on 

     12/31/2019    

 

Key Functions

 

Number of

Meetings

 in 2019  

Audit

 

Clint D. McDonnough(1)

Katherine A. Cattanach

Mary Ann King

 

 

• Assists the board in its general oversight of our accounting financial reporting process, audits of our financial statements, internal controls and internal audit functions

• Appointment, compensation and oversight of our independent auditors

• Represents and assists the board in its oversight of:

• the quality or integrity of our financial statements;

• our compliance with legal and regulatory requirements; and

• the performance of our internal audit department and independent auditors

• Discusses the adequacy and effectiveness of our internal controls over financial reporting

• Oversees our compliance with procedures and processes pertaining to corporate ethics and standards of business conduct

• Establishes procedures for the receipt, retention and treatment of complaints received concerning accounting, auditing, internal controls and financial reporting matters

• Oversees risk management policies and risk assessment

• Pre-approves all non-audit services to be provided to the Company by the independent auditors

 

9

Compensation

 

Mark R. Patterson(1)

Jon A. Grove

Robert A. McNamara

 

 

• Administers and approves general compensation policies applicable to our key executive officers

• Reviews and approves compensation for the board and its committees

• Reviews and ensures the appropriate administration of our compensation and benefit plans, programs and policies

• Determines and approves the compensation of our CEO

• Sets annual objectives for, and evaluates the performance of, our CEO, with input from the board

• Reviews and recommends to the board short- and long-term compensation for the principal officers of the Company who report directly to our CEO

• Approves all employment and severance agreements for senior vice presidents and above

• Reviews and approves the contributions and awards, if any, under the management incentive programs and other management compensation, if any, including the long-term incentive plan

• Appoints and provides oversight of independent compensation consultants

 

5

Governance

 

Robert A. McNamara (1)

Katherine A. Cattanach

Mary Ann King

 

 

• Exercises general oversight of board governance matters

• Reviews the size, role, composition and structure of our board and its committees

• Reviews and evaluates the board and its members

• Reviews and updates our Corporate Governance Policies

• Considers, develops and makes recommendations to the board regarding matters related to corporate governance

• Ensures that each committee conducts an annual assessment

 

4

Nominating

 

James D. Klingbeil(1)

Clint D. McDonnough

Robert A. McNamara

Mark R. Patterson

 

• Identifies, evaluates and recommends to the board individuals

 qualified to serve as directors of the Company

• Establishes criteria for the selection of new directors

• Reviews the suitability for continued service as a director of board members

• Establishes procedures for the submission or recommendations by shareholders

 

0*

19     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Committee

 

Members on 

     12/31/2019    

 

Key Functions

 

Number of

Meetings

 in 2019  

Executive

 

James D. Klingbeil(1)

Katherine A. Cattanach

Thomas W. Toomey

 

• Performs the duties and exercises the powers delegated to it by the board

• Meets only when board action on a significant matter is required and it is impractical or not feasible to convene a full meeting of the board

 

0

  

(1)

Committee Chair.

 

*

During 2019, the board as a whole discussed board succession and refreshment.

The Role of the Board in Risk Oversight

The board has oversight responsibility with respect to risk management and is not responsible for day-to-day management of risk, which is the responsibility of senior management. The board’s role in the Company’s risk oversight process includes receiving regular reports from members of senior management on areas of material risk to the Company, including operational, financial, legal, strategic, cybersecurity and reputational risks and other risks such as climate change. The Audit Committee, established in accordance with the applicable provisions of the Securities Exchange Act of 1934, and other board committees assist the board in fulfilling its oversight responsibility.  The board has allocated and delegated risk oversight to committees as follows:

 

 

 

The board has allocated and delegated risk oversight responsibility to various committees of the board in accordance

with the following principles:

The Audit Committee is responsible for:

The Compensation Committee is responsible for:

The Governance Committee is responsible for:

  Oversight of risks related to integrity of financial statements, including oversight of financial reporting principles and policies and internal controls.

  Risks related to regulatory and compliance matters generally.

  Oversight responsibility generally for our Enterprise Risk Management activities.

  Oversight of risks related to compensation programs, including formulation, administration and regulatory compliance with respect to compensation matters.

  Oversight of risks related to corporate governance matters, including succession planning, director independence and related person transactions.

  Oversight of the Company’s workforce diversity and inclusion efforts.

Each committee is also responsible for monitoring reputational risk to the extent arising out of its area of responsibility

 

Board Evaluation

The board, through the Governance Committee, annually evaluates the board and its members as follows:

 

STEPS TO ACHIEVE BOARD EFFECTIVENESS – EVALUATION PROCESSES

How We Evaluate the Board’s Effectiveness

Annual Evaluation Process

The Governance Committee oversees and approves the annual formal board evaluation process and determines whether it is appropriate for the evaluations to be conducted by the lead independent director.

20     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

Evaluation Questionnaires 

Directors completed written questionnaires focusing on the performance of the board and each of its committees.

Individual Interviews

The lead independent director conducted a one-on-one interview with each member of the board focused on:

·

Reviewing the board’s and its committees’ performance over the prior year; and

·

Identifying areas for potential enhancements of the board’s and its committees’ processes going forward.

Discussion of Results

The lead independent director reviews the questionnaire and interview responses with the full board.

 

Use of Feedback

The board and each of its committees develops plans to take actions based on the results, as appropriate.

 

Communicating with the Board

Our board provides a process for shareholders and all other interested parties to send communications to the board. Any shareholder and all other interested parties who wish to communicate with the board or any specific director, including the Chairman or the Lead Independent Director, may write to:

 

 

 

UDR, Inc. 

Attn: Board of Directors

1745 Shea Center Drive,

Suite 200

Highlands Ranch, Colorado 80129-1540

 

 

Depending on the subject matter of the communication, management will:

 

 

 

 

 

 

forward the communication to the director or directors to whom it is addressed;

 

 

attempt to handle the inquiry directly where the communication does not appear to require direct attention by the board, or an individual member of the board, e.g., the communication is a request for information about the Company or is a stock-related matter; or

 

 

not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

 

Shareholders and all other interested parties may submit concerns regarding accounting matters via the Company’s third-party anonymous reporting system at www.mysafeworkplace.com or by calling 1-800-461-9330. Instructions for making a report are published in the Corporate Governance section of the Investor Relations page of the Company’s website at ir.udr.com. 

21     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

COMPENSATION OF DIRECTORS

The following table provides information concerning the compensation of our directors for fiscal 2019.

Director Compensation Table

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

(a)

  

        Fees Earned         

or Paid

in Cash ($)

(b)

 

  

Stock

Awards  ($)

(c)(1)(2)

 

  

Option

Awards ($)

(d)

 

  

Non-Equity

Incentive Plan

  Compensation ($)  

(e)

 

  

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

(f)

 

  

All Other

Compensation ($)

(g)(3)

 

  

Total ($)

(h)

 

  Katherine A. Cattanach(4)

  

$

80,000

 

  

$

139,216

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

$

8,440

 

  

$

227,656

 

  Jon A. Grove(4)

  

 

80,000

 

  

 

128,817

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

8,440

 

  

 

217,257

  

 Mary Ann King(4)

 

 

80,000

 

 

 

128,817

 

 

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

 

 

8,440

 

 

 

217,257

 

  James D. Klingbeil(4)

  

 

120,000

 

  

 

230,002

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

12,308

 

  

 

362,310

  

 Clint D. McDonnough(4)

 

 

80,000

 

 

 

141,843

 

 

 

-0-

 

 

 

        -0-

 

 

 

      -0-

 

 

 

8,967

 

 

 

230,810

 

 Robert A. McNamara

 

 

80,000

 

 

 

139,211

 

 

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

5,627

 

  

 

224,838

 

 Mark R. Patterson

 

 

80,000

 

  

 

152,237

 

 

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

6,153

 

  

 

238,390

 

  Thomas W. Toomey(5)

  

 

-0-  

 

  

 

-0-  

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

-0-  

 

  

 

-0-    

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The dollar amount reflected in the “Stock Awards” column reflects the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of a grant of shares of restricted stock or Class 1 LTIP Units, which vested on the first anniversary date of the grant, as discussed below under “Director Compensation Table Discussion.” For those independent directors who elected to receive restricted stock, the amount of restricted stock was 4,168 shares (4,558 shares for the Chair of each committee and 5,991 shares for an independent Chairman of the Board), which was priced at $38.39 per share, which was the closing sales price of our common stock on January 2, 2019, the date of grant. For those independent directors who elected to receive Class 1 LTIP Units, the amount was 4,168 units (4,558 units for the Chair of each committee and 5,991 units for an independent Chairman of the Board), and the Class 1 LTIP Units were priced at $38.39 per unit, which was the closing sales price of our common stock on January 2, 2019, the date of grant.

 

 

(2)

The following table sets forth the restricted stock awards and Class 1 LTIP Unit awards outstanding as of December 31, 2019 for each of our independent directors. Mr. Toomey’s holdings are set forth under the heading “Executive Compensation” in this proxy statement. The restrictions relating to these awards are described in more detail below under the heading “Director Compensation Table Discussion — 2019 Director Compensation Program.”

  

 

 

 

 

 

 

 

 

Director

  

Restricted Stock

Awards Outstanding*

 

LTIP Unit

Awards Outstanding*

Non-Qualified Stock

Option Awards

Outstanding

 

Katherine A. Cattanach

  

 

2,084

 

  

4,168

 

-0-

  

Jon A. Grove

  

 

-0-

 

  

6,252

 

-0-

  

Mary Ann King

 

 

-0-

 

 

6,252

 

-0-

 

James D. Klingbeil

  

 

9,117

 

  

-0-

 

-0-

  

Clint D. McDonnough

 

 

-0-

 

 

6,642

 

-0-

 

Robert A. McNamara

 

 

-0-

 

 

4,168

 

-0-

 

Mark R. Patterson

 

 

-0-

 

 

4,558

 

-0-

 

 

 

 

 *

Restricted stock or LTIP Unit awards that were granted on January 2, 2020 pursuant to our 2020 independent director compensation program are not included in this table, but are discussed below under “Director Compensation Table Discussion — 2020 Director Compensation Program.”

 

 

(3)

The dollar amount in this column includes dividends on all outstanding stock awards.

 

 

(4)

These directors elected to receive their cash portion of the fees in restricted stock and/or Class 1 LTIP Units, as follows: Dr. Cattanach received 2,084 shares of restricted stock, Messrs. Grove and McDonnough and Ms. King each received 2,084 Class 1 LTIP Units and Mr. Klingbeil received 3,126 shares of restricted stock.

 

 

(5)

Mr. Toomey is our Chairman and Chief Executive Officer.  Because he is an employee of the Company, he receives no additional compensation for service as a director of the Company. His total compensation for 2019 is set forth below under the heading “Executive Compensation.”

 

Director Compensation Table Discussion

Our compensation program for independent directors is designed to attract and retain highly qualified board members who can work with senior management to establish key strategic goals in support of long-term shareholder value creation. The program consists of a combination of a cash retainer fee and a grant of equity awards. Total compensation was targeted at the median level of a diversified group of public REITs. The compensation program was set at competitive levels in recognition of the time commitments and responsibility levels associated with serving on public company boards within the current environment.

 

The Compensation Committee reviews our independent director compensation annually to ensure that we are competitive and to allow us to recruit and retain qualified candidates to serve as directors of the Company.  The Compensation Committee utilizes FPL to assist the Compensation Committee in reviewing and assessing our independent director compensation program and both a benchmarking study prepared by FPL and other industry data in determining director compensation.

22     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

2019 Director Compensation Program
Retainer. For 2019 there was no change from 2018 to the independent director compensation program, each independent director receives an annual retainer fee of $80,000 ($120,000 for the Lead Independent Director).  The chairpersons of each of the Audit and Compensation Committees also receive an annual retainer fee of $15,000. These fees were paid in January 2019.

 

The independent directors can elect to receive their 2019 annual retainer in cash, in stock or Class 1 LTIP Units, or in a combination of cash, stock or Class 1 LTIP Units.

 

Equity Grant. Each independent director also receives a grant of $160,000 in value of shares of restricted stock and/or Class 1 LTIP Units ($230,000 for the Lead Independent Director).  For those independent directors who elected to receive restricted stock, the restricted stock was priced at $38.39 per share, which was the closing sales price of our common stock on January 2, 2019, the date of grant. The shares of restricted stock vested on December 31, 2019. The independent directors receiving restricted stock are entitled to receive dividends during the vesting period; however, any unvested shares at the end of the one-year vesting period will be returned to us and cancelled.

 

For those independent directors who elected to receive Class 1 LTIP Units, the Class 1 LTIP Units were priced at $38.39 per unit, the closing sales price of our common stock on January 2, 2019, the date of grant. The Class 1 LTIP Units vested on December 31, 2019.  The independent directors who received Class 1 LTIP Units were entitled to receive distributions during the vesting period; however, any unvested Class 1 LTIP Units at the end of the one-year vesting period would be returned to us and cancelled.

 

Directors who are also employees of the Company receive no additional compensation for service as a director. All independent directors are reimbursed for expenses incurred in connection with attending a board meeting or committee meeting in accordance with our Director Expense Reimbursement Policy.

 

2020 Director Compensation Program
For 2020 there was no change to the independent director compensation program, each independent director receives an annual retainer fee of $80,000 ($120,000 for the Lead Independent Director).  The chairpersons of each of the Audit, Compensation and Governance Committees also receive an annual retainer fee of $15,000.

 

The independent directors can elect to receive their 2020 annual retainer in cash, in stock or Class 1 LTIP Units, or in a combination of cash, stock or Class 1 LTIP Units.

 

Equity Grant. Each independent director also receives a grant of $160,000 ($230,000 for the Lead Independent Director) in value of shares of restricted stock and/or Class 1 LTIP Units.         

 

For those independent directors who elected to receive restricted stock, the restricted stock was priced at $46.12 per share, which was the closing sales price of our common stock on January 2, 2020, the date of grant. The shares of restricted stock vest on December 31, 2020. The independent directors receiving restricted stock are entitled to receive dividends during the vesting period; however, any unvested shares at the end of the one-year vesting period will be returned to us and cancelled.

 

For those independent directors who elected to receive Class 1 LTIP Units, the Class 1 LTIP Units were priced at $46.12 per unit, the closing sales price of our common stock on January 2, 2020, the date of grant. The Class 1 LTIP Units vest on December 31, 2020.  The independent directors who received Class 1 LTIP Units are entitled to receive distributions during the vesting period; however, any unvested Class 1 LTIP Units at the end of the one-year vesting period would be returned to us and cancelled. 

 

All independent directors are reimbursed for expenses incurred in connection with attending a board meeting or committee meeting in accordance with our Director Expense Reimbursement Policy.

23     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Strategy – Updated 2-Year Strategic Plan

 

ACTIVE AND ENGAGED BOARD – SELECT ACTIONS OVER LAST FIVE YEARS

Picture 492

 

24     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth the shares of our common stock beneficially owned by (1) each of our directors, (2) the named executive officers, (3) all of our directors and executive officers as a group, and (4) all persons known by us to beneficially own more than 5% of our outstanding voting stock. We have determined the beneficial ownership shown on this table in accordance with the rules of the SEC. Under those rules, shares are considered beneficially owned if held by the person indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of March 23, 2020.

Amount and Nature of Beneficial Ownership

 

 

 

 

 

Shares for  Which
Beneficial
Ownership can
be Acquired
Within 60
Days

 

 

Shares for  Which
Beneficial
Ownership can
be Acquired
upon
Redemption of
Partnership
Interests(2)

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

Shares
Beneficially 
Owned(1)

 

 

 

 

Total Beneficial Ownership

 

Name of Beneficial Owner

 

 

 

 

Number of
Shares(3)

 

  

Percent of
Class
(3)(4) 

 

  Thomas W. Toomey

 

 

1,531,226

(5)

 

 

  

 

 

1,239,295

  

 

 

2,770,521

 

  

 

 

*

  James D. Klingbeil

 

 

167,509

(6)

 

 

  

 

 

2,249,665

(6) 

 

 

2,417,174

 

  

 

    

  Warren L. Troupe

 

 

400,761

  

 

 

  

 

 

269,479

  

 

 

670,240

 

  

 

    

  Jerry A. Davis

 

 

180,497

 

 

 

  

 

 

488,668

  

 

 

669,165

 

  

 

    

  Harry G. Alcock

 

 

87,261

  

 

 

  

 

 

422,497

  

 

 

509,758

 

  

 

    

  Jon A. Grove

 

 

450,058

  

 

 

  

 

 

30,152

  

 

 

480,210

 

  

 

    

 Joseph D. Fisher

 

 

38,280

 

 

 

 

 

 

288,654

 

 

 

326,934

 

 

 

 

*

  Katherine A. Cattanach

 

 

69,686

  

 

 

  

 

 

18,418

  

 

 

88,104

 

  

 

    

  Robert A. McNamara

 

 

17,651

 

 

 

 

 

 

18,610

 

 

 

36,261

 

 

 

    

 Clint D. McDonnough

 

 

11,496

 

 

 

 

 

 

22,802

 

 

 

34,298

 

 

 

 

*

 Mary Ann King

 

 

2,549

 

 

 

 

 

 

28,933

 

 

 

31,482

 

 

 

 

*

  Mark R. Patterson

 

 

8,983

 

 

 

 

 

 

19,000

 

 

 

27,983

 

 

 

    

  All directors and
executive officers as a group (12 persons)

 

 

2,965,957

  

 

 

  

 

 

5,096,173

  

 

 

8,062,130

 

  

 

2.69

  The Vanguard Group (7) 

 

 

49,371,257

  

 

 

  

 

 

  

 

 

49,371,257

 

  

 

16.74

  Cohen & Steers, Inc. (8)

 

 

41,849,764

  

 

 

  

 

 

  

 

 

41,849,764

 

  

 

14.19

%

  BlackRock, Inc.(9)

 

 

34,494,362

  

 

 

  

 

 

  

 

 

34,494,362

 

  

 

11.70

%

 State Street       Corporation(10)

 

 

19,574,393

 

 

 

 

 

 

 

 

 

19,574,393

 

 

 

6.64

%

  FMR LLC(11)

 

 

16,166,021

  

 

 

  

 

 

  

 

 

16,166,021

 

  

 

5.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 *

Represents beneficial ownership of less than 1%, based on 294,881,038 shares of common stock outstanding as of March 23, 2020. On March 23, 2020, there were 2,780,994 shares of our Series E preferred stock and 14,543,281 shares of our Series F preferred stock outstanding.

 

 (1)

In addition to the shares of common stock beneficially owned, Mr. Klingbeil is deemed to beneficially own indirectly 2,221,214 shares of our Series F preferred stock held by certain trusts, limited partnerships, limited liability companies and other entities, or 15.27% of our outstanding Series F preferred stock.

  

 (2)

Includes the number of shares of common stock into which OP Units and granted LTIP Units of the Operating Partnership, beneficially owned by the person, are redeemable if the Company elects to issue shares of common stock rather than pay cash on such redemption. The holder of the OP Units has the right to require the Operating Partnership to redeem all or a portion of the OP Units held by the holder in exchange for a cash payment based on the market value of our common stock at the time of redemption. However, the Operating Partnership’s obligation to pay the cash amount is subject to the prior right of the Company to acquire such OP Units in exchange for either the cash amount or shares of our common stock. Granted LTIP Units vest over periods between one and four years and may be converted into OP Units provided that such LTIP Units have been outstanding for at least two years from the date of grant. However, Class 2 LTIP Units are granted at the maximum potential payout and will vest only to the extent that pre-established performance metrics are met for the applicable performance period, subject to continued employment.

 

 

 (3)

Such beneficial ownership calculations assume that all OP Units beneficially owned by the person indicated and outstanding as of March 23, 2020, are redeemed in exchange for shares of common stock (notwithstanding any holding period requirements or exchange rights). See Notes (2) and (6).

25     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

  

 (4)

Based on 294,881,038 shares of common stock outstanding at the close of business on March 23, 2020. Shares issuable upon redemption of the OP Units are deemed outstanding for computing the percentage of the person holding such shares, but are not deemed outstanding for computing the percentage of any other person.

  

 (5)

Includes 178,324 shares of common stock subject to a pledge by Mr. Toomey. Includes 110,000 shares of common stock indirectly held in a trust for Mr. Toomey’s children.

  

 (6)

Mr. Klingbeil is deemed to indirectly beneficially own 909,236 shares of common stock into which OP Units directly owned by certain trusts, limited partnerships, limited liability companies and other entities are redeemable if the Company elects to issue shares of common stock rather than pay cash on such redemption. Includes 592,663 OP Units owned directly by Mr. Klingbeil that were pledged as security for a line of credit, as well as 676,216 OP Units that were pledged as security for a line of credit by companies wholly-owned by Mr. Klingbeil.  In connection with the OP Units, Mr. Klingbeil and certain of such trusts, limited partnerships, limited liability companies and other entities have entered into certain reimbursement agreements with us pursuant to which such entities may be required to reimburse us if certain debt owed to us by the Operating Partnership is not paid.

 

(7)

Beneficial ownership is as of December 31, 2019, as reflected in a statement on Schedule 13G filed by The Vanguard Group (“Vanguard”) with the SEC on February 11, 2020. Vanguard has its principal business office at 100 Vanguard Blvd., Malvern, Pennsylvania 19355. Vanguard has the sole power to dispose of 48,572,620 shares owned and the sole power to vote or direct the voting of 734,019 shares owned. Vanguard has shared power to dispose of 798,637 shares of common stock owned, and the shared power to vote or direct the voting of 399,234 shares owned. Vanguard Fiduciary Trust Company, a wholly owned subsidiary of Vanguard, is the beneficial owner of 331,894 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd., a wholly owned subsidiary of Vanguard, is the beneficial owner of 868,868 shares as a result of serving as investment manager or Australian investment offerings.

  

(8)

Beneficial ownership is as of December 31, 2019, as reflected in a statement on Schedule 13G filed by Cohen & Steers, Inc. (“C&S”) with the SEC on February 14, 2020. According to such Schedule 13G, C&S, a parent holding company, reported that it has sole power to vote or direct the voting of 25,705,645 shares of common stock and sole dispositive power with respect to 41,849,764 shares of common stock. Cohen & Steers Capital Management, Inc. (“CSCA”), a wholly-owned subsidiary of C&S and an investment adviser registered under Section 203 of the Investment Advisers Act of 1940, reported that it has sole voting power with respect to 25,563,335 shares and sole dispositive power with respect to 40,923,329 shares. Cohen & Steers UK Limited reported that it has sole voting power with respect to 142,310 shares and sole dispositive power with respect to 926,435 shares. The address for each of C&S and CSCA is 280 Park Avenue, 10th Floor, New York, New York 10017. The address for Cohen & Steers UK Limited is 50 Pall Mall, 7th Floor, London, United Kingdom SW1Y 5JH.

 

(9)

Beneficial ownership is as of December 31, 2019, as reflected in a statement on Schedule 13G filed by BlackRock, Inc. (“BlackRock”) with the SEC on February 4, 2020. BlackRock has its principal business office at 55 East 52nd Street, New York, New York 10055. BlackRock has the sole power to dispose of 34,494,362 shares of common stock owned and the sole power to vote or direct the voting of 31,516,781 shares owned. BlackRock is the beneficial owner as a result of being a parent company or control person of the following subsidiaries, each of which holds less than 5% of the outstanding shares of common stock: BlackRock (Luxembourg) S.A.; BlackRock (Netherlands) B.V.; BlackRock (Singapore) Limited; BlackRock Advisors (UK) Limited; BlackRock Advisors, LLC; BlackRock Asset Management Canada Limited;  BlackRock Asset Management Ireland Limited; BlackRock Asset Management North Asia Limited; BlackRock Asset Management Schweiz AG; BlackRock Financial Management, Inc.; BlackRock Fund Advisors; BlackRock Fund Managers Ltd; BlackRock Institutional Trust Company, National Association; BlackRock International Limited; BlackRock Investment Management (Australia) Limited; BlackRock Investment Management (UK) Ltd; BlackRock Investment Management, LLC; BlackRock Japan Co., Ltd; and BlackRock Life Limited.

 

(10)

Beneficial ownership is as of December 31, 2019, as reflected in a statement on Schedule 13G filed by State Street Corporation (“State Street”) with the SEC on February 13, 2020. State Street has its principal business office at State Street Financial Center, One Lincoln Street, Boston, MA 02111. State Street has shared power to dispose of 19,553,243 shares owned and the shared power to vote or direct the voting of 16,486,434 shares owned. State Street is the beneficial owner as a result of being a parent company or control person of the following subsidiaries, each of which holds less than 5% of the outstanding shares of common stock: SSGA Funds Management, Inc.; State Street Global Advisors Trust Company; State Street Global Advisors, Australia Limited; State Street Global Advisors (Asia) Ltd; State Street Global Advisors (Japan) Co., Ltd; State Street Global Advisors Ireland Limited; State Street Global Advisors Singapore Ltd.; State Street Global Advisors Limited (UK); State Street Global Advisors Ltd (Canada); and State Street Global Advisors GmbH.

 

(11)

Beneficial ownership is as of December 31, 2019, as reflected in a statement on Schedule 13G filed by FMR LLC with the SEC on February 7, 2020. FMR LLC has its principal business office at 245 Summer Street, Boston, Massachusetts 02210. FMR LLC has sole power to dispose of 16,166,021 shares owned and the sole power to vote or direct the voting of 8,888,668 shares owned. According to the Schedule 13G, FMR LLC is the beneficial owner as a result of being a parent company or control person of the following subsidiaries, each of which holds less than 5% of the outstanding shares of common stock: FIAM LLC; Fidelity Institutional Asset Management Trust Company; Fidelity Management & Research Company; Fidelity Personal Trust Company, FSB; FMR Co., Inc.; and Strategic Advisers LLC. The Schedule 13G indicates that Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR LLC. Members of the family of Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders' voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR LLC, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds' Boards of Trustees.

 

26     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

HUMAN CAPITAL MANAGEMENT

The board believes that it is critical to our success that we continue to attract, develop and retain high quality associates in all functions of our business.  Through its oversight function, the board sets the “tone at the top,” and the board holds senior management accountable for creating a culture that embodies our values and that allows us to attract and retain the high quality associates that we need.  In 2018, in connection with our belief as to the importance of our associates to our success, an “associate engagement” performance metric was added to our 2018 short term incentive compensation plan, which metric was retained for 2019 and 2020.

We believe that training is important to our associates’ satisfaction and accordingly we offer a variety of training opportunities to our associates.  In addition to training designed to address regulatory matters, we offer training in management development through our Certified Manager Program and our Career Mobility Program, which is designed to enable our associates to acquire skills that will be useful to them as they progress in their career.  In total, there are over 5,000 courses available to our associates.

In addition, we are committed to creating and maintaining a diverse and inclusive workplace environment that supports the development and advancement of all associates.  In connection therewith, we measure the diversity of our workforce and set forth highlights below: 

Picture 496

27     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

 

Picture 497

 

We conduct an associate engagement survey every two years, which surveys all associates on a variety of issues.  In our 2019 survey, the results showed that 97% of associates are proud to work at the Company, 87% of associates feel that people from diverse backgrounds can succeed at the Company, and 84% of associates feel that the Company is innovative.

28     |    UDR

 

 

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2020

 

 

SUSTAINABILITY

In 2019, we published our inaugural corporate responsibility report covering 2018, which is available at udr.com/green-living.  Our inaugural report was prepared using the GRI standards as a guide.  We intend to publish our next report covering 2019 in the summer of 2020.

We understand the impact our business can have on the environment and our stakeholders and when appropriate we undertake initiatives designed to improve our operational quality, improve quality for associates and residents an improve their retention and reduce our impact on the environment.  Examples of recent efforts include conducting environmental assessments of each asset that we acquire and our recent addition of “green lease” addendums to our leases to assist out residents in their efforts to be environmentally conscious.