DEF 14A 1 vtrdef14a2013.htm DEF 14A VTR DEF 14A 2013
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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the Securities Exchange Act of 1934 (Amendment No.          )

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VENTAS, INC.

NOTICE OF 2014 ANNUAL MEETING OF
STOCKHOLDERS
AND
PROXY STATEMENT













353 North Clark Street
Suite 3300
Chicago, Illinois 60654
(877) 483-6827
April 4, 2014
Dear Ventas Stockholder:
You are cordially invited to attend Ventas, Inc.’s 2014 Annual Meeting of Stockholders, which will be held at 8:00 a.m. local (Central) time on Thursday, May 15, 2014, at 353 North Clark Street in Chicago, Illinois.
Please refer to the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement for detailed information on the meeting and each of the proposals to be considered and acted upon at the meeting.
Your vote is very important to our Board of Directors. I urge you to vote your shares by proxy as soon as possible to ensure your vote is recorded at the Annual Meeting. You may vote by telephone, over the Internet or, if you have requested paper copies of our proxy materials by mail, by signing, dating and returning the proxy card in the envelope provided.
Our Board of Directors appreciates your continued support of Ventas, Inc.
Sincerely,
Debra A. Cafaro
Chairman of the Board and Chief Executive Officer

















353 North Clark Street
Suite 3300
Chicago, Illinois 60654
(877) 483-6827

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The 2014 Annual Meeting of Stockholders of Ventas, Inc. will be held at 8:00 a.m. local (Central) time on Thursday, May 15, 2014, at 353 North Clark Street, James C. Tyree Auditorium, Chicago, Illinois 60654. We are holding the Annual Meeting to consider and vote on the following matters:
1.
The election of ten directors nominated by our Board of Directors and named in the Proxy Statement to hold office until the next annual meeting of stockholders and until their respective successors have been duly elected and qualified;
2.
The ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2014;
3.
An advisory vote to approve our executive compensation; and
4.
Such other business as may properly come before the meeting or any adjournments thereof.
The Proxy Statement following this Notice describes these matters in detail. We have not received notice of any other proposals to be presented at the Annual Meeting.
You may vote at the Annual Meeting and any postponements or adjournments thereof if you were a holder of record of Ventas, Inc. common stock as of the close of business on March 17, 2014, the record date for the meeting. For ten days prior to the Annual Meeting, a list of stockholders entitled to vote will be available for inspection at our principal executive offices located at 353 North Clark Street, Suite 3300, Chicago, Illinois 60654.
Please vote your shares promptly by telephone, over the Internet or, if you have requested paper copies of our proxy materials by mail, by signing, dating and returning the proxy card in the envelope provided. Voting your shares prior to the Annual Meeting will not prevent you from changing your vote in person if you choose to attend the meeting.
By Order of the Board of Directors,
Kristen M. Benson
Senior Vice President, Associate General Counsel
    and Corporate Secretary
Chicago, Illinois
April 4, 2014




TABLE OF CONTENTS
 
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PROXY STATEMENT
OVERVIEW OF 2013 PERFORMANCE AND 2014 ANNUAL MEETING
We prepared the following overview to assist you in reviewing our 2013 performance and the matters to be considered at the 2014 Annual Meeting of Stockholders. For further information, please review our Annual Report on Form 10-K for the year ended December 31, 2013 and the other information contained in this Proxy Statement.
2013 Performance
In 2013, we achieved record profits, cash flows and normalized Funds From Operations (“FFO”) per share. We delivered our 11th consecutive year of growth in normalized FFO, which increased 9% to $1.2 billion, and our normalized FFO per diluted share also rose 9% to $4.14. Excluding non-cash items, normalized FFO per share growth was 11%.* Our cash flows from operations totaled $1.2 billion, an increase of more than 20% year over year.
We paid our common stockholders an annual cash dividend of $2.735 per share, which represents a 10% increase over 2012 and a compound annual growth rate of 10% over the past ten years. From January 1, 2000 through December 31, 2013, we delivered compound annual total shareholder return (“TSR”) of more than 28%, which is the highest among all real estate investment trusts (“REITs”) in our compensation peer group over this time period.
_______________________________________
* See Annex A for reconciliations of normalized FFO and normalized FFO, excluding non-cash items, to net income attributable to common stockholders computed in accordance with U.S generally accepted accounting principles (“GAAP”).



2013 Investment Highlights
Since December 2012, we have completed approximately $2.3 billion of acquisitions and expanded our balanced, diversified portfolio of high-quality assets to nearly 1,500 properties. Our 2013 acquisitions improved our private pay assets to 84% of our portfolio and included:
• senior living communities managed by Atria (43% of our 2013 acquisitions) that are 100% private pay;
• triple-net leased assets (47%), substantially all of which are private pay independent living communities; and
• medical office buildings (10%) primarily located on-campus and affiliated with A-rated or better hospital systems.
2013 Portfolio Highlights
Same-store cash net operating income (“NOI”) growth for our total portfolio (1,203 assets) was 5% in 2013*, and we generated over $300 million in cash flows from operations after capital expenditures and dividends.
We renewed, sold or transitioned to new operators all 89 licensed healthcare facilities leased by Kindred Healthcare, Inc. (NYSE: KND) (“Kindred”) whose lease terms expired during the second quarter of 2013, and we entered into favorable agreements with Kindred to extend the leases at a higher rental rate with respect to 48 of the 108 licensed healthcare assets whose lease terms were originally scheduled to expire on April 30, 2015.
2013 Balance Sheet and Liquidity Highlights
In 2013, we continued to improve our attractive cost of capital and further strengthened our liquidity, which enabled us to capitalize on strategic opportunities, including through the following:
• Issuance of $1.6 billion of unsecured debt with a weighted average interest rate of 3.3% and a weighted average initial maturity of 13.6 years;
• Entrance into new $3 billion unsecured credit facility, comprised of a $2 billion revolving credit facility and $1 billion in term loans, at improved pricing; and
• Repayment of $764 million principal amount of our senior notes and mortgage loans with a weighted average cash interest rate of 5.9%.
______________________________________
* See Annex A for a calculation of same-store cash NOI growth.

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We maintained a strong balance sheet throughout 2013, demonstrated by our fixed charge coverage ratio of 4.5x and our net debt to adjusted pro forma EBITDA** of 5.5x at December 31, 2013.
The strength of our balance sheet and our credit profile was recognized by Moody’s Investors Service, Inc. (“Moody’s”), which upgraded our corporate credit rating to Baa1 in August 2013, and Standard & Poor’s Rating Service (“S&P”), which upgraded our corporate credit rating to BBB+ in December 2013.
______________________________________
** EBITDA is defined as earnings before interest, income taxes, depreciation and amortization. See Annex A for a reconciliation of adjusted pro forma EBITDA to net income attributable to common stockholders computed in accordance with GAAP.
2013 Executive Compensation
Our executive compensation consists primarily of base salary, annual cash incentive compensation and long-term incentive compensation. We emphasize performance-based incentive compensation over fixed cash compensation to achieve greater alignment with stockholders, focus decision-makers on the creation of long-term value and encourage prudent evaluation of risks. See page 27 for a detailed discussion of the elements of our compensation program.
2013 Executive Compensation Decisions
We have a strong performance- and achievement-oriented compensation philosophy. Our 2013 executive compensation program supported this philosophy and provided the opportunity for our executive officers to earn market-competitive levels of compensation. The 2013 incentive awards earned by our Named Executive Officers, which constituted a significant percentage of their total compensation, reflect a well-designed compensation program intended to incentivize achievement of superior results on important performance metrics that drive stockholder value.
In determining our Named Executive Officers’ incentive compensation for 2013, our Executive Compensation Committee (the “Compensation Committee”) and the independent members of our Board of Directors (the “Board”) considered our strong financial and operational performance, including record profits, cash flows and normalized FFO per share, while also recognizing that our TSR for the one-year period ended December 31, 2013 was below the median of our peer group, our TSR for the three-year period then ended was substantially at the median of our peer group and our TSR for the ten-year period then ended was in the top quartile of our peer group. The Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board exercised negative discretion to reduce the earned value of our Named Executive Officers’ incentive awards, achieving stockholder alignment consistent with the design of our compensation program. As a result, the 2013 total direct compensation of each of our Named Executive Officers declined year over year, with the compensation of our Chief Executive Officer declining by more than 12%, to reflect attained performance and promote alignment with our stockholders.

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Annual Cash Incentive Awards
As explained in more detail under “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement, we achieved maximum performance with respect to the company financial performance metrics comprising 65% of our 2013 annual cash incentive awards:
COMPANY FINANCIAL PERFORMANCE (65% of 2013 annual cash incentive awards)
Normalized FFO per Share Growth (35%):  Our year-over-year normalized FFO per diluted share, excluding non-cash items, increased 11% from $3.60 to $3.99, exceeding the maximum performance goal.
Acquisitions (15%): We completed approximately $2.3 billion of acquisitions (excluding the value of anticipated sales of loan investments and shares of our common stock we acquired in connection with the acquisition of certain private investment funds) during the performance period, exceeding the maximum performance goal.
Fixed Charge Coverage Ratio (15%):  As of December 31, 2013, our fixed charge coverage ratio was 4.50x, exceeding the maximum performance goal.
With respect to the portion (35%) of the 2013 annual cash incentive awards based on individual performance, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board determined that each Named Executive Officer attained between target and maximum performance. To strengthen alignment between our Chief Executive Officer’s compensation and stockholder value, the independent members of the Board utilized their discretion to reduce the individual performance component of our Chief Executive Officer’s cash incentive award despite her strong leadership and performance.
As a result, our Named Executive Officers received cash incentive awards for 2013 performance ranging from 83% to 98% of their respective maximum award opportunities. Due to our Chief Executive Officer receiving a lower percentage of the individual performance component, her 2013 annual cash incentive award, as a percentage of her maximum award opportunity (83%), was the lowest of our Named Executive Officers, and reflected a decline of approximately 15% in dollar value compared to her 2012 annual cash incentive award.
Long-Term Incentive Awards
As explained in more detail under “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement, we achieved the following performance with respect to the quantitative performance metrics comprising 50% of our 2013 long-term incentive awards:
QUANTITATIVE PERFORMANCE METRICS (50% of 2013 long-term incentive awards)
One-Year Relative TSR (15%): For the year ended December 31, 2013, our TSR of -7.6% ranked us 13th out of 16 companies in our peer group, just below the threshold performance goal.
Three-Year Relative TSR (20%):  For the three-year period ended December 31, 2013, our compound annual TSR of +7.4% ranked us 10th out of 16 companies in our peer group, above the threshold performance goal and slightly below the target performance goal.
Net Debt to Adjusted Pro Forma EBITDA (15%):  As of December 31, 2013, our net debt to adjusted pro forma EBITDA was 5.54x, slightly below the maximum performance goal.
In evaluating the specific performance factors under the qualitative portion (50%) of the 2013 long-term incentive awards, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board determined that our Named Executive Officers had achieved near maximum performance overall based on our strong financial and operational performance, while also giving consideration to our relative TSR performance, which was below the median of our peer group for the one-year period ended December 31, 2013 and substantially at the median of our peer group for the three-year period then ended due, in part, to changes in monetary policy and interest rate expectations that disproportionately affected the trading prices of the large-cap healthcare REITs’ common stock in 2013. Based on this evaluation of the performance factors, including relative TSR, the Compensation Committee and the independent members of the Board determined to award less than maximum performance on the qualitative portion of the long-term incentive awards in 2013, emphasizing strong alignment with the plan’s objective of creating and maintaining stockholder value.
Based on the performance achieved on the metrics under the quantitative portion of the plan, the Compensation Committee’s and the independent members of the Board’s evaluation of the performance factors, including relative TSR, under the qualitative portion of the plan, and adjustments to reflect individual contributions to our performance, our Named Executive Officers earned 2013 long-term incentive awards that ranged from 63% to 71% of their respective maximum award opportunities and were lower

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in dollar value than their respective 2012 awards. Year over year, our Chief Executive Officer’s long-term incentive award declined in dollar value approximately 13%.
See page 28 for a detailed discussion of the compensation earned by our Named Executive Officers for their 2013 performance and the factors considered by our Compensation Committee and the independent members of our Board in determining this compensation.
2013 Compensation Practices at a Glance
ü    DO provide executive officers with the opportunity to earn market-competitive compensation through a mix of cash and equity compensation with a strong emphasis on performance-based incentive awards
ü    DO align pay and performance by linking a substantial portion of compensation to the achievement of pre-established performance metrics that drive stockholder value
ü    DO evaluate TSR when determining performance under incentive awards to enhance stockholder alignment
ü    DO cap payouts for awards under our annual and long-term incentive plans
ü    DO require executive officers and directors to own and retain shares of our common stock that have significant value to further align interests with our stockholders
ü    DO enhance executive officer retention with time-based vesting schedules for equity incentive awards earned for prior-year performance
ü    DO prohibit new tax gross-up arrangements under tax gross-up policy
ü    DO enable Board to “claw back” incentive compensation in the event of a financial restatement pursuant to recoupment policy
ü    DO maintain a Compensation Committee comprised solely of independent directors
ü    DO engage an independent compensation consultant to advise the Compensation Committee on executive compensation matters
 
DO NOT base incentive awards on a single performance metric, thereby discouraging unnecessary or excessive risk-taking
DO NOT provide guaranteed minimum payouts or uncapped award opportunities
DO NOT have employment agreements with executive officers that provide single-trigger change of control benefits
DO NOT provide our Chief Executive Officer with tax gross-ups with respect to payments made in connection with a change of control
DO NOT permit executive officers or directors to engage in derivative or other hedging transactions in our securities
DO NOT provide executive officers with excessive perquisites or other personal benefits
DO NOT permit executive officers or directors to hold our securities in margin accounts or pledge our securities to secure loans without preapproval by the Audit and Compliance Committee (no executive officer or director pledged or held our securities in margin accounts at any time during 2013)
DO NOT benchmark executive compensation to target above the median of our comparative group of peer companies
2014 Annual Meeting of Stockholders
Attending the Annual Meeting
Who:  Stockholders of record on March 17, 2014
When:  Thursday, May 15, 2014, 8:00 a.m. local (Central) time
Where:  353 North Clark Street, James C. Tyree Auditorium, Chicago, Illinois 60654
Voting at the Annual Meeting
Vote by Telephone:  Call (800) 690-6903, 24 hours a day, seven days a week through May 14, 2014
Vote on the Internet:  Visit www.proxyvote.com, 24 hours a day, seven days a week through May 14, 2014
Vote by Mail:  Request, complete and return a copy of the proxy card in the postage-paid envelope provided
Vote in Person:  Request, complete and deposit a copy of the proxy card or complete a ballot at the Annual Meeting

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Proposals Requiring Your Vote
Proposal 1 – Election of Directors (see page 58)
The following table provides summary information about our ten director-nominees, each of whom currently serves on our Board. Sheli Z. Rosenberg, a current director, has advised our Nominating and Corporate Governance Committee that she will retire and will not stand for reelection at the Annual Meeting. Directors are elected annually by a majority of votes cast in uncontested elections. The Board recommends that you vote “FOR” each of the named director-nominees.
Name
Age
Served
since
Independence
Status
Current
Committees
Areas of Expertise
Debra A. Cafaro
Chairman and CEO of Ventas
56
1999
Employed by Ventas
Executive
Investment
Real Estate Industry, Corporate Finance, Mergers and Acquisitions, Capital Markets, Strategic Planning
Douglas Crocker II*
Chairman and Chief Investment Officer of Pearlmark Multifamily Partners, L.L.C.
74
1998
Independent
Executive (Chair)
Investment (Chair)
Nominating
Real Estate Industry, Corporate Finance, Mergers and Acquisitions, Strategic Planning, Executive Compensation
Ronald G. Geary
President of Ellis Park Race Course, Inc.
66
1998
Independent
Executive
Investment
Nominating
Healthcare Industry, Corporate Finance, Mergers and Acquisitions, Strategic Planning, Government Relations, International Operations
Jay M. Gellert
President and CEO of Health Net, Inc.
60
2001
Independent
Compensation (Chair)
Healthcare Industry, Mergers and Acquisitions, Strategic Planning, Government Relations, Executive Compensation
Richard I. Gilchrist
Senior Advisor to The Irvine Company
68
2011
Independent
Compensation
Real Estate Industry, Mergers and Acquisitions, Strategic Planning, Executive Compensation
Matthew J. Lustig
Managing Partner of North America Investment Banking and Head of Real Estate, Gaming and Lodging at Lazard Frères & Co. LLC
53
2011
Affiliated with entities that did business with Ventas in 2012
Real Estate Industry, Corporate Finance, Mergers and Acquisitions, Capital Markets, Strategic Planning
Douglas M. Pasquale
Founder and CEO of Capstone Enterprises Corporation; former CEO of Nationwide Health Properties, Inc.
59
2011
Former employee of Ventas (2011)
Investment
Real Estate Industry, Healthcare Industry, Corporate Finance, Mergers and Acquisitions, Strategic Planning
Robert D. Reed
Senior Vice President and Chief Financial Officer of Sutter Health
61
2008
Independent
Audit (Chair)
Healthcare Industry, Corporate Finance, Strategic Planning, Capital Intensive Operations
Glenn J. Rufrano
Chairman and CEO of O’Connor Capital Partners
64
2010
Independent
Audit
Real Estate Industry, Corporate Finance, Strategic Planning, International Operations
James D. Shelton
Chairman of Omnicare, Inc.
60
2008
Independent
Compensation
Investment
Healthcare Industry, Mergers and Acquisitions, Strategic Planning, Capital Intensive Operations, Government Relations, Executive Compensation
*
Independent Presiding Director
Proposal 2 – Ratification of the Selection of Ernst & Young LLP
as Our Independent Registered Public Accounting Firm for Fiscal Year 2014 (see page 64)
Ernst & Young audited our financial statements for the year ended December 31, 2013 and has been our independent registered public accounting firm since May 1998. The Board recommends that you vote “FOR” the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2014.
Proposal 3 – Advisory Vote to Approve Our Executive Compensation (see page 65)
The Board has determined that an advisory vote to approve our executive compensation will be submitted to our stockholders on an annual basis. The incentives created by our executive compensation program drive outstanding performance and have contributed to a strong track record of sustained growth, diversification and stockholder value creation. Although the trading prices of the three large-cap healthcare REITs’ common stock often move in similar directions in response to changing market conditions, we have consistently outperformed our competitors. We were the best performing large-cap healthcare REIT based

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on TSR for each of the one-, five- and ten-year periods ended December 31, 2013 and two of three for the three-year period ended December 31, 2013. Moreover, we ranked third among our peer group and outperformed both the S&P 500 index and the RMZ index in compound annual TSR for the ten-year period ended December 31, 2013. From January 1, 2000 through December 31, 2013, we delivered compound annual TSR of 28.4%, which is the highest among our peer group. Our flexibility, risk management, strategy and ability to execute and adapt quickly contributed to our historically excellent performance and enabled us to preserve significant value during the most recent global economic downturn.
In 2013, our compensation decisions once again reflected strong alignment between pay and performance. Despite our achievement of record financial results, the total direct compensation of our Chief Executive Officer declined more than 12% year over year as a result of the balance between formulaic and qualitative evaluations of performance under our long-term incentive plan and recognition of our one- and three-year TSR performance. The chart below illustrates our long-term pay-for-performance alignment by comparing our Chief Executive Officer’s total direct compensation to our TSR performance (indexed to a 2008 base year) for each of the past five years. This chart aligns the value of long-term equity incentive awards with the performance year for which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance are shown as 2013 compensation), consistent with the manner in which the Board evaluates compensation and pay-for-performance (as disclosed in further detail in the supplemental table on page 21). However, it differs from the Summary Compensation Table, which, due to Securities and Exchange Commission (“SEC”) rules that require the full grant date fair value of equity awards to be included as compensation in the year in which they were granted, disconnects the value of our long-term equity incentive awards from the performance year in which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance will not be shown in the Summary Compensation Table until our 2015 Proxy Statement as 2014 compensation).
Prior to and in the months following our 2012 Annual Meeting of Stockholders, we engaged in a broad outreach program to discuss our executive compensation practices with our stockholders. We learned from these discussions that our stockholders generally approve of the structure of our executive compensation program and support the pay-for-performance alignment we have consistently demonstrated. Nevertheless, reflecting the value our Board places on continuing and constructive feedback from our stockholders, we made certain enhancements to our executive compensation program in 2012 and the related disclosures in our 2013 proxy statement:
ü Changes to the comparative group of peer companies that the Compensation Committee and the independent members of the Board use for compensation purposes to position us closer to the median in terms of market capitalization, enterprise value and total assets;

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ü Changes to our benchmarking practices to target the median (previously 65th percentile) of our comparative group of peer companies; and
ü Expansion of our Compensation Discussion and Analysis disclosures regarding the performance metrics considered by the Compensation Committee and the independent members of the Board, including how those metrics support our pay-for-performance philosophy and contribute to the determination of our Named Executive Officers’ incentive awards.
The Board also reviewed the structure of our long-term incentive plan in the context of its ongoing consideration of market practices, our business needs and input from our stockholders and, based on that review, modified our long-term incentive plan for 2013 such that 50% of the value of our Named Executive Officers’ long-term equity incentive awards would be determined on the basis of performance with respect to pre-established quantitative performance metrics (primarily one- and three-year relative TSR) that were not subject to Compensation Committee or Board discretion. The other 50% of the value of the awards would be determined on the basis of a qualitative evaluation of performance with respect to pre-established financial, operational and strategic performance factors that enabled the Compensation Committee and the independent members of the Board to use their discretion to evaluate our success in preserving long-term stockholder value and avoiding excessive risk-taking.
At our 2013 Annual Meeting of Stockholders, holders of approximately 92% of the shares represented at the meeting voted to approve, on an advisory basis, our executive compensation, an increase of more than 25% from 2012. We believe the strong level of support for our compensation program in 2013 reflected (a) the strong alignment between our executive pay and performance both in 2012 and over longer time periods (see chart above), (b) the quantitative alignment between our executive pay and performance as measured by stockholder advisory groups and (c) the enhancements to our compensation program described above that we disclosed in our 2013 proxy statement following our broad stockholder outreach efforts.
The changes to our long-term incentive plan to harmonize quantitative and qualitative evaluations of performance contributed to the continued alignment of our pay with our performance in 2013. Although we performed well in relation to financial metrics over which our Named Executive Officers have significant direct influence, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board utilized their discretion in evaluating the specific performance factors under the qualitative portion of the 2013 long-term incentive plan to take into account performance in other areas, including our one- and three-year relative TSR, and reduced the Named Executive Officers’ long-term incentive awards to further emphasize stockholder alignment. This exercise of discretion contributed to a decline in each Named Executive Officer’s total direct compensation from 2012.
Based on our ongoing discussions with stockholders, the strong support of our stockholders at our 2013 Annual Meeting of Stockholders, and the continued success of our executive compensation program in 2013 at aligning pay with performance, we believe the changes described above addressed the constructive feedback we received in the course of our 2012 stockholder outreach. Moreover, the Compensation Committee and the independent members of the Board have carefully evaluated our overall executive compensation program and believe that it is well designed to achieve our objectives of retaining talented executives and rewarding superior performance in the context of our business risk environment.
For these reasons, the Board recommends that you vote “FOR” the approval, on an advisory basis, of our executive compensation.

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ABOUT THIS PROXY STATEMENT
This Proxy Statement is being furnished in connection with the solicitation of proxies by or on behalf of the Board of Directors of Ventas, Inc. (“Ventas,” “we” or “us”) for use at our Annual Meeting of Stockholders (the “Annual Meeting”) to be held at 8:00 a.m. local (Central) time on Thursday, May 15, 2014 at 353 North Clark Street, James C. Tyree Auditorium, Chicago, Illinois 60654, and at any adjournments thereof. This Proxy Statement is designed to assist you in voting your shares and includes information that we are required to provide to you under the rules of the SEC and the New York Stock Exchange (“NYSE”).
Notice of Electronic Availability of Proxy Statement and Annual Report
We are making this Proxy Statement and the materials accompanying it available to our stockholders electronically via the Internet, as permitted by the SEC’s rules. We will mail to stockholders a Notice of Internet Availability containing instructions on how to access our proxy materials and how to vote by proxy online. Starting on or about April 4, 2014, we will also mail this Proxy Statement and the materials accompanying it to stockholders who have requested paper copies. If you would like to receive a printed copy of our proxy materials by mail, you should follow the instructions for requesting those materials included in the Notice that we mail to you.
IMPORTANT NOTICE REGARDING INTERNET AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING TO BE HELD ON MAY 15, 2014:
This Proxy Statement, our 2013 Form 10-K and our 2013 Annual Report are available at
www.proxyvote.com.
Householding
To eliminate duplicate mailings, conserve natural resources and reduce our printing costs and postage fees, we engage in householding and will deliver a single set of proxy materials (other than proxy cards, which will remain separate) to Ventas stockholders who share the same address and who have the same last name or consent in writing. If your household receives multiple copies of our proxy materials, you may request to receive only one copy by contacting Broadridge Financial Solutions, Inc. at (800) 542-1061 or in writing at Householding Department, 51 Mercedes Way, Edgewood, NY 11717. Similarly, if your household receives only one copy of our proxy materials, you may request an additional copy by contacting Broadridge as indicated above. We will deliver the requested additional copy promptly following our receipt of your request.
Cost of Proxy Solicitation
Ventas will bear the cost of soliciting proxies by or on behalf of the Board. In addition to solicitation through the mail, proxies may be solicited in person or by telephone or electronic communication by our directors, officers and employees, none of whom will receive additional compensation for these services. We have engaged Georgeson Inc. to distribute and solicit proxies on our behalf and will pay Georgeson Inc. a fee of $9,500, plus reimbursement of reasonable out-of-pocket expenses, for these services. We will also reimburse brokers and other custodians for their reasonable out-of-pocket expenses incurred in connection with distributing forms of proxies and proxy materials to beneficial owners of our common stock.
THE ANNUAL MEETING AND VOTING
Quorum
The holders of a majority of the shares of our common stock outstanding as of the close of business on March 17, 2014 (the “record date”) must be present in person or represented by proxy to constitute a quorum to transact business at the Annual Meeting. Stockholders who abstain from voting and broker non-votes are counted for purposes of establishing a quorum. A broker non-vote occurs when a beneficial owner does not provide voting instructions to the beneficial owner’s broker or custodian with respect to a proposal on which the broker or custodian does not have discretionary authority to vote.
Who Can Vote
Only Ventas stockholders of record at the close of business on the record date, March 17, 2014, are entitled to vote at the Annual Meeting. As of the record date, 294,327,752 shares of our common stock, par value $0.25 per share, were outstanding.

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Each share of our common stock entitles the owner to one vote on each matter properly brought before the Annual Meeting. However, certain shares designated as “Excess Shares” (generally any shares owned in excess of 9.0% of our outstanding common stock) or as “Special Excess Shares” pursuant to our Amended and Restated Certificate of Incorporation, as amended (our “Charter”), may not be voted by the record owner thereof and will be voted in accordance with Article IX of our Charter.
A list of all Ventas stockholders entitled to vote at the Annual Meeting will be available for inspection by any stockholder for any purpose reasonably related to the Annual Meeting during ordinary business hours for the ten days preceding the meeting at our principal executive offices located at 353 North Clark Street, Suite 3300, Chicago, Illinois 60654.
How to Vote
You may vote your shares in one of several ways, depending on how you own your shares.
Stockholders of Record
If you own shares registered in your name (a “stockholder of record”), you may:
(
 
Vote your shares by proxy by calling (800) 690-6903, 24 hours a day, seven days a week until 11:59 p.m. Eastern time on May 14, 2014. Please have your proxy card in hand when you call. The telephone voting system has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
 
 
OR
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Vote your shares by proxy via the website www.proxyvote.com, 24 hours a day, seven days a week until 11:59 p.m. Eastern time on May 14, 2014. Please have your proxy card in hand when you access the website. The website has easy-to-follow instructions and provides confirmation that the system has properly recorded your vote.
 
 
OR
-
 
If you have requested or receive paper copies of our proxy materials by mail, vote your shares by proxy by signing, dating and returning the proxy card in the postage-paid envelope provided. If you vote by telephone or over the Internet, you do not need to return your proxy card by mail.
 
 
OR
I
 
Vote your shares by attending the Annual Meeting in person and depositing your proxy card at the registration desk (if you have requested paper copies of our proxy materials by mail) or completing a ballot that will be distributed at the Annual Meeting.
Beneficial Owners
If you own shares registered in the name of a broker or other custodian (a “beneficial owner”), follow the instructions provided by your broker or custodian to instruct it how to vote your shares. If you want to vote your shares in person at the Annual Meeting, contact your broker or custodian to obtain a legal proxy or broker’s proxy card that you should bring to the Annual Meeting to demonstrate your authority to vote.
If you do not instruct your broker or custodian how to vote, it will have discretionary authority, under current NYSE rules, to vote your shares in its discretion on the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2014 (Proposal 2). However, your broker or custodian will not have discretionary authority to vote on the election of directors (Proposal 1) or the advisory vote to approve our executive compensation (Proposal 3) without instructions from you. As a result, if you do not provide instructions to your broker or custodian, your shares will not be voted on Proposal 1 or Proposal 3.
Votes by Proxy
All shares that have been properly voted by proxy and not revoked will be voted at the Annual Meeting in accordance with the instructions contained in the proxy. Shares represented by proxy cards that are signed and returned but do not contain any voting instructions will be voted consistent with the Board’s recommendations:
ü FOR the election of all director-nominees named in this Proxy Statement (Proposal 1);
ü FOR the ratification of the selection of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2014 (Proposal 2);
ü FOR the approval, on an advisory basis, of our executive compensation (Proposal 3); and
In the discretion of the proxy holders, on such other business as may properly come before the Annual Meeting.

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How to Revoke Your Vote
If you are a stockholder of record, you can revoke your prior vote by proxy if you:
Execute and return a later-dated proxy card before your proxy is voted at the Annual Meeting;
Vote by telephone or over the Internet no later than 11:59 p.m. Eastern time on May 14, 2014;
Deliver a written notice of revocation to our Corporate Secretary at our principal executive offices located at 353 North Clark Street, Suite 3300, Chicago, Illinois 60654, before your proxy is voted at the Annual Meeting; or
Attend the Annual Meeting and vote in person (attendance by itself will not revoke your prior vote by proxy).
If you are a beneficial owner, follow the instructions provided by your broker or custodian to revoke your vote by proxy, if applicable.
Attending the Annual Meeting
You are entitled to attend the Annual Meeting only if you were a Ventas stockholder as of the close of business on the record date, March 17, 2014, or you hold a valid proxy for the meeting. In order to be admitted to the Annual Meeting, you must present photo identification (such as a driver’s license) and proof of ownership of shares of our common stock on the record date. Proof of ownership can be accomplished through the following:
A brokerage statement or letter from your broker or custodian with respect to your ownership of shares of our common stock on March 17, 2014;
The Notice of Internet Availability of Proxy Materials;
A printout of the proxy distribution email (if you receive your materials electronically);
A proxy card;
A voting instruction form; or
A legal proxy provided by your broker or custodian.
For the safety and security of our stockholders, we will be unable to admit you to the Annual Meeting if you do not present photo identification and proof of ownership of shares of our common stock or if you otherwise refuse to comply with our security procedures.
OUR BOARD OF DIRECTORS
Our Board provides guidance and oversight with respect to our financial and operating performance, strategic plans, key corporate policies and decisions, and enterprise risk management. Among other matters, our Board considers and approves significant acquisitions, dispositions and other transactions and advises and counsels senior management on key financial and business objectives. Members of the Board monitor our progress with respect to these matters on a regular basis, including through presentations made at Board and committee meetings by our Chief Executive Officer, President, Chief Financial Officer, Chief Investment Officer and other members of senior management.
Director Independence
Our Guidelines on Governance require that at least a majority of the members of our Board meet the criteria for independence under the rules and regulations of the NYSE. For a director to be considered independent under the NYSE’s listing standards, the director must satisfy certain bright-line tests and the Board must affirmatively determine that the director has no direct or indirect material relationship with us. Not less than annually, the Board evaluates the independence of each non-management director on a case-by-case basis by considering any matters that could affect his or her ability to exercise independent judgment in carrying out the responsibilities of a director, including all transactions and relationships between such director, members of his or her family and organizations with which such director or family members have an affiliation, on the one hand, and us, our subsidiaries and our management, on the other hand. Any such matters are evaluated from the standpoint of the director and the persons or organizations with which the director has an affiliation. Each director abstains from participating in the determination of his or her independence.

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Based on its most recent review, the Board affirmatively determined that each of the following directors has no direct or indirect material relationship with us and qualifies as independent under the NYSE’s listing standards: Douglas Crocker II, Ronald G. Geary, Jay M. Gellert, Richard I. Gilchrist, Robert D. Reed, Sheli Z. Rosenberg, Glenn J. Rufrano and James D. Shelton. Ms. Cafaro is not considered independent under the NYSE listing standards due to her employment as our Chief Executive Officer. Mr. Lustig is not considered independent under the NYSE listing standards due to his employment by Lazard Real Estate Partners LLC (“LREP”) and Lazard Alternative Investments LLC (“LAI”), whose affiliated entities received proceeds in connection with our December 2012 acquisition of certain private investment funds previously managed by Lazard Frères Real Estate Investors L.L.C. or its affiliates. Mr. Pasquale is not considered independent under the NYSE listing standards due to his employment with us following our acquisition of Nationwide Health Properties, Inc. (“NHP”) in July 2011. Prior to the acquisition, Mr. Pasquale was Chief Executive Officer of NHP, and he served as Senior Advisor to our Chief Executive Officer from July 1, 2011 through December 31, 2011 to facilitate the integration of NHP with our company.
In evaluating the independence of Mr. Reed, the Board considered our ownership of a newly developed MOB that is 100% leased by Sutter Health. Mr. Reed serves as Senior Vice President and Chief Financial Officer of Sutter Health, which reported more than $9.5 billion of gross revenues in 2012. The Board believes that this relationship will not affect the ability of Mr. Reed to exercise independent judgment in carrying out his responsibilities as a member of our Board. See also “Corporate Governance—Transactions with Related Persons.”
Leadership Structure and Independent Presiding Director
Our Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure so as to provide effective oversight of management. The Board understands that no single approach to Board leadership is universally accepted and that the appropriate leadership structure may differ depending on a company’s size, industry, operations, history and culture. Consistent with this understanding, our Board, led by the Nominating and Corporate Governance Committee (the “Nominating Committee”), conducts an annual evaluation to determine the optimal leadership structure for us and for our stockholders. At the current time, the Board believes that our existing leadership structure – under which our Chief Executive Officer also serves as Chairman of the Board and a Presiding Director assumes specific responsibilities on behalf of the independent directors – is effective, provides the appropriate balance of authority between those who oversee our company and those who manage it on a day-to-day basis and achieves the optimal governance model for us and for our stockholders.
Pursuant to our Fourth Amended and Restated By-Laws, as amended (our “By-Laws”), and our Guidelines on Governance, the Board has discretion to determine whether to separate or combine the roles of Chief Executive Officer and Chairman of the Board as part of its leadership structure evaluation. Debra A. Cafaro has served in both roles since 2003, and our Board continues to believe that her combined role is most advantageous to us and our stockholders. Ms. Cafaro possesses in-depth knowledge of the issues, opportunities and risks facing us, our business and our industry and is best positioned to fulfill the Chairman’s responsibility to develop meeting agendas that focus the Board’s time and attention on the most critical matters and to facilitate constructive dialogue among Board members on strategic issues. Moreover, the combined roles enable decisive leadership, clear accountability and consistent communication of our message and strategy to all of our stakeholders. These leadership attributes are uniquely important to our company given the value to our business of opportunistic capital markets execution, our history of rapid and significant growth, and our culture of proactive engagement and risk management.
In connection with Ms. Cafaro’s service as our Chief Executive Officer and Chairman of the Board, our Guidelines on Governance require that the independent members of our Board, after considering the recommendation of the Nominating Committee, annually select one independent director to serve as Presiding Director, whose specific responsibilities include, among other things, presiding at all meetings of our Board at which the Chairman is not present, including executive sessions and all other meetings of the independent directors. The Presiding Director also serves as liaison between the Chairman and the independent directors, approves information sent to the Board and approves Board meeting agendas and meeting schedules to assure that there is sufficient time for discussion of all agenda items. The Presiding Director has authority to call meetings of the independent directors and, if requested by major stockholders, ensures that he is available for consultation and direct communication with stockholders. In addition, the Presiding Director reviews with our General Counsel potential conflicts of interest and has such other duties as may be assigned from time to time by the independent directors or the Board. Although the Presiding Director is elected on an annual basis, the Board generally expects that he or she will serve for more than one year. Douglas Crocker II, a well-respected and recognized leader in the real estate industry, has served as our Presiding Director since 2003.
Board Committees
Our Board has five standing committees that perform certain delegated functions for the Board: the Audit and Compliance Committee (the “Audit Committee”); the Compensation Committee; the Executive Committee; the Investment

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Committee; and the Nominating Committee. Each of the Audit, Compensation and Nominating Committees operates pursuant to a written charter that is available in the Corporate Governance section of our website at www.ventasreit.com/investor-relations/corporate-governance. We also provide copies of the Audit, Compensation and Nominating Committee charters, without charge, upon request to our Corporate Secretary at Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654. Information on our website is not a part of this Proxy Statement.
Board and Committee Meetings
Our Board held a total of 11 meetings during 2013. Evidencing a strong commitment to our company, each director attended at least 75% of the total meetings of the Board and the committees on which he or she served that were held during 2013. The table below provides current membership and 2013 meeting information for each of our Board committees:
Name
Audit
Committee
Compensation
Committee
Executive
Committee
Investment
Committee
Nominating
Committee
Debra A. Cafaro
 
 
MEMBER
MEMBER
 
Douglas Crocker II*
 
 
CHAIR
CHAIR
MEMBER
Ronald G. Geary
 
 
MEMBER
MEMBER
MEMBER
Jay M. Gellert
 
CHAIR
 
 
 
Richard I. Gilchrist
 
MEMBER
 
 
 
Matthew J. Lustig
 
 
 
 
 
Douglas M. Pasquale
 
 
 
MEMBER
 
Robert D. Reed
CHAIR
 
 
 
 
Sheli Z. Rosenberg
MEMBER
 
MEMBER
 
CHAIR
Glenn J. Rufrano
MEMBER
 
 
 
 
James D. Shelton
 
MEMBER
 
MEMBER
 
    Total Meetings in 2013
4
8
0
1
5
* Independent Presiding Director
Our independent directors meet in executive session, outside the presence of management, at each regularly scheduled quarterly Board meeting and at other times as necessary or desirable. The Presiding Director chairs all regularly scheduled executive sessions of the Board and all other meetings of the independent directors. Members of our Audit, Compensation and Nominating Committees also meet in executive session, outside the presence of management, at each regularly scheduled committee meeting and at other times as necessary or desirable.
We strongly encourage, but do not require, directors to attend our annual meetings of stockholders. Ten of the eleven directors who were nominated for reelection at our 2013 Annual Meeting of Stockholders attended that meeting.
How to Communicate with Directors
Stockholders and other parties interested in communicating directly with our Board or any director on Board-related issues may do so by writing to Board of Directors, c/o Corporate Secretary, Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654, or by submitting an e-mail to bod@ventasreit.com. Additionally, stockholders and other parties interested in communicating directly with the Presiding Director of the Board or with the independent directors as a group may do so by writing to Presiding Director, Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654, or by sending an e-mail to independentbod@ventasreit.com. Communications addressed to the Board or individual members of the Board are screened by our Corporate Secretary for appropriateness before distributing to the Board, or to any individual director or directors, as applicable.
AUDIT AND COMPLIANCE COMMITTEE
The Audit Committee assists the Board in fulfilling its responsibilities relating to our accounting and financial reporting practices, including oversight of the quality and integrity of our financial statements, our compliance with legal and regulatory requirements, the independent registered public accounting firm’s qualifications, independence and performance, and the performance of our internal audit function.

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The Audit Committee maintains free and open communication with the Board, our independent registered public accounting firm, our internal auditor and our financial and accounting management. The Audit Committee meets separately in executive session, outside the presence of management, with each of our independent registered public accounting firm and our internal auditor at each regularly scheduled meeting and at other times as necessary or desirable.
The Board has determined that each member of the Audit Committee is independent and satisfies the independence standards of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and related rules and regulations of the SEC and the NYSE listing standards, including the additional independence requirements for audit committee members. The Board has also determined that each member of the Audit Committee is financially literate and qualifies as an “audit committee financial expert” for purposes of the SEC’s rules.
Audit Committee Report
Management has primary responsibility for our financial statements and the reporting process, including our system of internal controls, subject to oversight by the Audit Committee on behalf of the Board. In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed with management our audited financial statements for the year ended December 31, 2013, including the quality, not just the acceptability, of our accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The Audit Committee has reviewed and discussed with the independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, its judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee under generally accepted auditing standards, including Statement on Auditing Standards No. 16, Communications with Audit Committees, which superseded Statement on Auditing Standards No. 61, as amended and as adopted by the Public Company Accounting Oversight Board (the “PCAOB”) in Rule 3200T. The Audit Committee has also received the written disclosures and the letter from the independent registered public accounting firm required by applicable PCAOB rules regarding the independent registered public accounting firm’s communications with the Audit Committee concerning independence. In addition, the Audit Committee has discussed with the independent registered public accounting firm that firm’s independence from Ventas and its management, and the Audit Committee has considered the compatibility of non-audit services with the firm’s independence.
The Audit Committee has discussed with the independent registered public accounting firm the overall scope and plans for its audit. The Audit Committee meets regularly with the independent registered public accounting firm, with and without management present, to discuss the results of its examination of our financial statements, its evaluations of our internal controls, and the overall quality of our financial reporting.
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in our Annual Report on Form 10-K for the year ended December 31, 2013 for filing with the SEC. The Audit Committee also recommended, and the Board approved, the selection of our independent registered public accounting firm for fiscal year 2014.
AUDIT COMMITTEE
Robert D. Reed, Chair
Sheli Z. Rosenberg
Glenn J. Rufrano
EXECUTIVE COMMITTEE
The Board has delegated to the Executive Committee the power to direct the management of our business and affairs in emergency situations during intervals between meetings of the Board, except for matters specifically reserved for the Board and its other committees. The Executive Committee exercises its delegated authority only under extraordinary circumstances and has not held a meeting since 2002.
EXECUTIVE COMPENSATION COMMITTEE
The Compensation Committee has primary responsibility for the design, review, approval and administration of all aspects of our executive compensation program. The Compensation Committee reviews the performance of, and makes all

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compensation decisions for, each of our executive officers other than our Chief Executive Officer. The Compensation Committee also reviews the performance of, and makes compensation recommendations to the independent members of the Board for, our Chief Executive Officer.
The Compensation Committee meets throughout the year to review our compensation philosophy and its continued alignment with our business strategy and to consider and approve our executive compensation program for the subsequent year. The Compensation Committee, with the assistance of a nationally recognized, independent compensation consultant, discusses changes, if any, to the program structure, assesses the appropriate peer companies for benchmarking purposes, sets base salaries and annual and long-term incentive award opportunities, establishes the applicable performance metrics under our annual and long-term incentive plans, evaluates performance in relation to the established metrics, and determines annual and long-term incentive awards for our executive officers.
Our executive officers provide support to the Compensation Committee by coordinating meeting logistics, preparing and disseminating relevant financial and other information regarding us and the companies in our peer group as a supplement to the comparative market data prepared by the independent compensation consultant, and making recommendations with respect to performance metrics and related goals. Our Chief Executive Officer attends meetings at the Compensation Committee’s request and recommends to the Compensation Committee compensation changes affecting the other executive officers. However, our Chief Executive Officer plays no role in setting her own compensation. At various times, our General Counsel, our Corporate Secretary and our Chief Human Resources Officer may also attend meetings at the Compensation Committee’s request to act as secretary and record the minutes of the meetings, provide updates on legal developments and make presentations regarding certain organizational matters. The Compensation Committee meets separately in executive session, without management present, at each regularly scheduled meeting and at other times as necessary or desirable.
The Compensation Committee meets during the first quarter of each year, typically in January, to review the achievement of pre-established performance goals for the prior year, to determine the appropriate annual and long-term incentive awards for executive officers based on that prior-year performance and, as appropriate, to approve grants of equity awards to our executive officers and, upon management’s recommendation, other employees. Our executive officers provide support to the Compensation Committee in this process, and the Chief Executive Officer makes incentive award recommendations with respect to the other executive officers.
The Board has determined that each member of the Compensation Committee is independent and satisfies the independence standards of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the related NYSE listing standards, including the additional independence requirements for compensation committee members. The Board has also determined that each member of the Compensation Committee meets the additional requirements for “outside directors” set forth in Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”), and “non-employee directors” set forth in Rule 16b-3 under the Exchange Act.
Compensation Committee Interlocks and Insider Participation
During the year ended December 31, 2013, Messrs. Gellert, Gilchrist and Shelton served on the Compensation Committee. No member of the Compensation Committee is, or has been, employed by us or our subsidiaries or is an employee of any entity for which any of our executive officers serves on the board of directors.
Independent Compensation Consultant
Under its charter, the Compensation Committee has authority to retain, and approve the terms of engagement and fees paid to, compensation consultants, outside counsel and other advisors that the Compensation Committee deems appropriate, in its sole discretion, to assist it in discharging its duties. Any compensation consultant engaged by the Compensation Committee reports to the Compensation Committee and receives no fees from us that are unrelated to its role as advisor to our Board and its committees. The Compensation Committee meets regularly with the compensation consultant without management present. Although a compensation consultant may periodically interact with company employees to gather and review information related to our executive compensation program, this work is done at the direction and subject to the oversight of the Compensation Committee. Pursuant to the Compensation Committee charter, any compensation consultant retained by the Compensation Committee must be independent, as determined annually by the Compensation Committee in its reasonable business judgment, considering the specific independence factors set forth in Rule 10C-1 under the Exchange Act and all other relevant facts and circumstances.
Pearl Meyer & Partners (“PM&P”) has served as the Compensation Committee’s independent compensation consultant since 2006. In 2013, the Compensation Committee retained PM&P to advise it and the independent members of the Board, as applicable, on matters related to our executive compensation levels and program design for 2014. The Compensation

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Committee reviews the scope of work provided by PM&P on an annual basis and, in connection with PM&P’s engagement in 2013, determined that PM&P met the independence criteria under the Compensation Committee charter. In 2013, the Nominating Committee, after notifying the Compensation Committee, separately retained PM&P to advise it and the Board on certain non-employee director compensation matters. PM&P and its affiliates did not perform any other consulting services for us during the year ended December 31, 2013, and PM&P’s work for the Board and its committees has raised no conflict of interest.
INVESTMENT COMMITTEE
The function of the Investment Committee is to review and approve proposed acquisitions and dispositions of properties and other investments meeting applicable criteria, in accordance with our Amended and Restated Investment and Divestiture Approval Policy.
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
The Nominating Committee oversees our corporate policies and other corporate governance matters, as well as matters relating to the practices and procedures of the Board, including: identifying, selecting and recommending to the Board qualified director-nominees; making recommendations to the Board regarding its committee structure and composition; reviewing and making recommendations to the Board regarding non-employee director compensation; overseeing an annual evaluation of the Board and its committees; developing and recommending to the Board a set of corporate governance guidelines and the corporate code of ethics; and generally advising the Board on corporate governance and related matters.
The Board has determined that each member of the Nominating Committee is independent and satisfies the NYSE listing standards.
CORPORATE GOVERNANCE
Governance Policies
Our Guidelines on Governance reflect the fundamental corporate governance principles by which our Board and its committees operate. These guidelines set forth general practices the Board and its committees follow with respect to structure, function, organization, composition and conduct. These guidelines are reviewed at least annually by the Nominating Committee and are updated periodically in response to changing regulatory requirements, evolving corporate governance practices, input from our stockholders and otherwise as circumstances warrant. In 2013, consistent with our commitment to strong corporate governance and responsiveness to our stockholders, the Board amended our Guidelines on Governance to incorporate a policy against tax gross-up arrangements, formalizing our existing practice of not entering into new tax gross-up arrangements with our executive officers.
Each of our directors and employees, including our Chief Executive Officer, our Chief Financial Officer and our Chief Accounting Officer and Controller, as well as each director and officer of our subsidiaries, is required to comply with our Code of Ethics and Business Conduct, which establishes legal and ethical standards for conducting our business. Our Code of Ethics and Business Conduct covers all significant areas of professional conduct, including employment practices, conflicts of interest, unfair or unethical use of corporate opportunities, protection of confidential information and other company assets, compliance with applicable laws and regulations, political activities and other public policy matters, and proper and timely reporting of financial results. See also “—Public Policy Matters.”
Our Guidelines on Governance and our Code of Ethics and Business Conduct are available in the Corporate Governance section of our website at www.ventasreit.com/investor-relations/corporate-governance. We also provide a copy of our Guidelines on Governance or our Code of Ethics and Business Conduct, without charge, upon request to our Corporate Secretary at Ventas, Inc., 353 North Clark Street, Suite 3300, Chicago, Illinois 60654. Waivers from, and amendments to, our Code of Ethics and Business Conduct that apply to our Chief Executive Officer, Chief Financial Officer or persons performing similar functions will be timely posted on our website at www.ventasreit.com. The information on our website is not a part of this Proxy Statement.

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Transactions with Related Persons
Our Board has a written policy requiring that any transaction between us and any of our officers, directors or their affiliates be approved by the Audit Committee or the disinterested members of the Board. Our Code of Ethics and Business Conduct requires our officers and directors to disclose in writing to our General Counsel any existing or proposed transaction in which he or she has a personal interest, or in which there is or might appear to be a conflict of interest by reason of his or her connection to another business organization. Our General Counsel reviews these matters with the Presiding Director to determine whether the transaction raises a conflict of interest that warrants review and approval by the Audit Committee or the disinterested members of the Board.
Transactions with Mr. Pasquale
From July 2011 through December 2011, Mr. Pasquale served as Senior Advisor to our Chief Executive Officer to facilitate the integration of NHP with our company. Our agreement with Mr. Pasquale entitled him to receive substantially the same severance benefits that he would have received if he had resigned for “Good Reason” under his prior employment agreement with NHP. Pursuant to the terms of this agreement, in 2013, Mr. Pasquale received approximately $2.0 million representing certain severance benefits and deferred compensation, as well as continued medical and life insurance coverage and payment of certain dividend equivalent rights. The disinterested members of the Board approved the terms of Mr. Pasquale’s agreement in connection with its approval of the NHP acquisition.
Transactions with Sutter Health
We own a newly developed MOB located on the Sutter Medical Center—Castro Valley campus that is 100% leased by Sutter Health pursuant to long-term triple-net leases. In 2013, Sutter Health paid us aggregate annual rent of approximately $2.1 million, which is less than one-tenth of one percent (0.1%) of Sutter Health’s 2013 consolidated gross revenues. Mr. Reed, Senior Vice President and Chief Financial Officer of Sutter Health, has served as a member of our Board since March 2008. We believe the terms of the leases with Sutter Health are no less favorable to us than those available from an unaffiliated party.
Risk Management
While management has primary responsibility for identifying and managing our exposure to risk, our Board plays an active role in overseeing the processes we establish to assess, monitor and mitigate that exposure. The Board, directly and indirectly through its committees, routinely discusses with management our significant enterprise risks and reviews the guidelines, policies and procedures we have in place to address those risks, such as our approval process for acquisitions, dispositions and other investments. At Board and committee meetings, directors receive information and in-depth presentations from management and third-party experts and engage in comprehensive analyses and dialogue regarding specific areas of risk. This process enables the Board to focus on the strategic, financial, operational, legal, regulatory and other risks that are most significant to us and our business in terms of likelihood and potential impact and ensures that our enterprise risks are well understood, mitigated to the extent reasonable and consistent with the Board’s view of our risk profile and risk tolerance.
In addition to the overall risk oversight function administered directly by the Board, each of the Audit, Compensation, Nominating and Investment Committees exercises its own oversight related to the risks associated with the particular responsibilities of that committee:
the Audit Committee reviews financial, accounting and internal control risks and the mechanisms through which we assess and manage risk, in accordance with NYSE requirements, and has certain responsibilities with respect to our compliance programs, such as our Code of Ethics and Business Conduct and Whistleblower Policy and Procedures;
the Compensation Committee, as discussed in greater detail below, evaluates whether our compensation policies and practices, as they relate to both executive officers and employees generally, encourage excessive risk-taking;
the Nominating Committee focuses on risks related to corporate governance, board effectiveness and succession planning; and
the Investment Committee is responsible for overseeing certain transaction-related risks, including the review of transactions in excess of certain thresholds, with existing tenants, operators, borrowers or managers, or that involve investments in non-core assets.
The chairs of these committees report on such matters to the full Board at each regularly scheduled Board meeting and other times as appropriate. We believe that this division of responsibilities is the most effective approach for identifying and addressing the risks facing the company. Through Ms. Cafaro’s service as Chief Executive Officer and Chairman, our Board

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leadership structure appropriately supports the Board’s role in risk oversight by facilitating prompt attention by the Board and its committees to the significant enterprise risks identified by management in our day-to-day operations.
Compensation Risk Assessment
As part of its risk oversight role, the Compensation Committee annually considers whether our compensation policies and practices for all employees, including our executive officers, create risks that are reasonably likely to have a material adverse effect on our company. In conducting its risk assessment in 2014, the Compensation Committee reviewed a report prepared by management regarding our existing compensation plans and programs, including our severance and change-in-control arrangements, in the context of our business risk environment. In its review, the Compensation Committee noted several design features of our compensation programs that reduce the likelihood of excessive risk-taking, including, without limitation:
A balanced mix of cash and equity compensation with a strong emphasis on performance-based annual and long-term incentive awards;
Multiple performance metrics selected in the context of our business strategy and often in tension with each other;
Regular review of comparative compensation data to maintain competitive compensation levels in light of our industry, size and performance;
Annual and long-term incentive award opportunities that do not provide minimum guaranteed payouts, are based on a range of performance outcomes and plotted along a continuum, and have capped payouts, subject in all cases to the Compensation Committee’s and the independent Board members’ overall assessment of performance;
Equity compensation weighted more heavily towards restricted stock than stock options to provide greater incentive to create and preserve long-term stockholder value;
Equity incentive awards granted for prior-year performance with multi-year vesting schedules to enhance retention;
Minimum stock ownership guidelines that align executive officers with long-term stockholder interests; and
Restrictions on engaging in derivative and other hedging transactions in our securities and on holding our securities in margin accounts or otherwise pledging our securities to secure loans.
Based on its evaluation, the Compensation Committee determined, in its reasonable business judgment, that our compensation practices and policies for all employees do not create risks that are reasonably likely to have a material adverse effect on our company and instead promote behaviors that support long-term sustainability and stockholder value creation.
Public Policy Matters
We are committed to ethical business conduct and expect our directors, officers and employees to act with integrity and to conduct themselves and our business in a way that protects our reputation for fairness and honesty. Consistent with these principles and our Code of Ethics and Business Conduct, we have established the policies and practices described below with respect to political contributions and other public policy matters.
Political Contributions and Expenditures
We do not use corporate funds or resources for direct contributions to political candidates, parties or campaigns. Corporate resources include non-financial donations, such as the use of our property in a political campaign or our employees’ use of work time and telephones to solicit for a political cause or candidate.
Public Policy Advocacy
We do not have a political action committee. However, we may advocate a position, express a view or take other appropriate action with respect to legislative or political matters affecting our company or our interests. We may also ask our employees to make personal contact with governmental officials or to write letters to present our position on specific issues. Any such advocacy is done in compliance with applicable laws and regulations.
Individual Political Activity
We believe that our directors, officers and employees have rights and responsibilities to participate in political activities as citizens, including voting in elections, keeping informed on political matters, serving on civic bodies and contributing financially to, and participating in the campaigns of, the political candidates of their choice. Accordingly, our directors, officers and employees are not constrained from engaging in political activities, making political contributions, expressing political

18


views or taking action on any political or legislative matter, so long as they are acting in their individual capacity, on their own time and at their own expense. Directors, officers and employees acting in their individual capacity must not give the impression that they are speaking on our behalf or representing Ventas in such activities.
Relationships with Government Officials
Our directors, officers and employees may not maintain any relationship or take any action with respect to public officials that could impugn our integrity or reputation. In particular, our directors, officers and employees may not offer, promise or give anything of value, including payments, entertainment and gifts, to any government official, employee, agent or other intermediary of the United States government or any domestic or foreign government.
OUR EXECUTIVE OFFICERS
Set forth below is certain biographical information concerning each of our executive officers. Ages shown for all executive officers are as of the date of the Annual Meeting.
Name, Age and Position
Business Experience
Debra A. Cafaro, 56
Chairman and Chief Executive Officer
Ms. Cafaro’s biographical information is set forth in this Proxy Statement under “Proposals Requiring Your Vote—Proposal 1: Election of Directors.”
Raymond J. Lewis, 49
President
Mr. Lewis has been our President since November 2010. He previously served as our Executive Vice President and Chief Investment Officer from 2006 to November 2010 and as our Senior Vice President and Chief Investment Officer from 2002 to 2006. Prior to joining us in 2002, he was managing director of business development for GE Capital Healthcare Financial Services, a division of General Electric Capital Corporation (“GECC”), which is a subsidiary of General Electric Corporation, where he led a team focused on mergers and portfolio acquisitions of healthcare assets. Before that, Mr. Lewis was Executive Vice President of Healthcare Finance for Heller Financial, Inc. (which was acquired by GECC in 2001), where he had primary responsibility for healthcare lending. Mr. Lewis is Chairman Emeritus of the National Investment Center for the Seniors Housing & Care Industry (“NIC”). He is also currently a member of the Executive Board of the American Seniors Housing Association where he serves as Secretary and Treasurer on the Executive Committee.
John D. Cobb, 42
Executive Vice President and Chief Investment Officer
Mr. Cobb was named Executive Vice President and Chief Investment Officer in March 2013, after serving as our Senior Vice President and Chief Investment Officer since November 2010. From 2008 to 2010, he was President and Chief Executive Officer of Senior Lifestyle Corporation, where he led the strategic direction of a 9,000+ unit retirement company with over 3,400 employees. Prior to that, he held various positions with GE Healthcare Financial Services, with the last being Senior Managing Director, where he led a team focused on debt and equity investments of healthcare real estate totaling over $9 billion. Mr. Cobb has served as a director of NIC, and he is currently a member of the Executive Board of the American Seniors Housing Association.
Todd W. Lillibridge, 58
Executive Vice President, Medical Property Operations; President and Chief Executive Officer, Lillibridge Healthcare Services, Inc.
Mr. Lillibridge joined us as Executive Vice President, Medical Property Operations in July 2010. Mr. Lillibridge also serves as President and Chief Executive Officer of our subsidiary, Lillibridge Healthcare Services, Inc. (“Lillibridge”), where he is responsible for the strategic focus, vision and overall leadership of our MOB operations. Prior to joining Lillibridge’s predecessor in 1982, and subsequently establishing Lillibridge & Company, Mr. Lillibridge was employed by Baird & Warner, Inc. of Chicago, Illinois, serving in the real estate finance group and the development division. He is a member of the Economic Club of Chicago, the World Presidents’ Organization of Chicago and the Board of Directors of the Joffrey Ballet.


19


Name, Age and Position
Business Experience
T. Richard Riney, 56
Executive Vice President, Chief Administrative Officer and General Counsel
Mr. Riney has been our Executive Vice President and General Counsel since 1998, was named our Chief Administrative Officer in 2007 and also served as our Corporate Secretary from 1998 to 2012. From 1996 to 1998, he served as Transactions Counsel for our predecessor, Vencor, Inc. Prior to that, Mr. Riney practiced law with the law firm of Hirn, Reed & Harper, where his areas of concentration were real estate and corporate finance. Mr. Riney serves on the Centre College President’s Advisory Council. He is admitted to the Bar in Kentucky and is a member of the National Association of Real Estate Investment Trusts (“NAREIT”).
Richard A. Schweinhart, 64
Executive Vice President and Chief Financial Officer
Mr. Schweinhart has been our Executive Vice President and Chief Financial Officer since 2006, prior to which he served as our Senior Vice President and Chief Financial Officer from 2002 to 2006, after briefly serving as a full-time consultant to Ventas. From 1998 to 2002, he served as Senior Vice President and Chief Financial Officer for Kindred Healthcare, Inc. (NYSE: KND), where he was responsible for all financial aspects of the company, including accounting, finance, purchasing, insurance, tax, reimbursement and internal control. Prior to that, Mr. Schweinhart was Senior Vice President of Finance for HCA Inc. (“HCA”), Chief Financial Officer at Galen Health Care, Inc. (a spin-off of Humana Inc. (“Humana”)) prior to its acquisition by HCA and Senior Vice President of Finance at Humana. He is a Certified Public Accountant.

EXECUTIVE COMPENSATION
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the following Compensation Discussion and Analysis and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE
Jay M. Gellert, Chair
Richard I. Gilchrist
James D. Shelton
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”) describes our 2013 compensation program for our principal executive officer (Ms. Cafaro), our principal financial officer (Mr. Schweinhart) and our three other most highly compensated executive officers during 2013 (Messrs. Lewis, Lillibridge and Riney) (collectively, our “Named Executive Officers”). In particular, this CD&A explains the overall objectives of our executive compensation program, how each element of our executive compensation program is designed to satisfy those objectives, the policies underlying our 2013 compensation program and the compensation awarded to our Named Executive Officers for 2013. This discussion contains forward-looking statements that are based on our current plans, considerations, expectations and determinations regarding future compensation programs; however, future compensation programs that we adopt may differ materially from currently planned programs.
Executive Summary
Through our executive compensation program, we seek to attract, retain and motivate talented executives and link the compensation realized by our executive officers to the achievement of financial and strategic company goals, as well as individual goals. Our executive compensation philosophy emphasizes variable pay over fixed pay, and a significant portion of total direct compensation is in the form of equity awards granted to reward historical performance that vest over time to promote retention and alignment with stockholder value. We believe this approach to performance-based compensation provides balanced incentives for our executive officers that align their interests with the long-term interests of our stockholders and discourage excessive risk-taking.

20


2013 Compensation
In determining our Named Executive Officers’ incentive compensation for 2013, the Compensation Committee and the independent members of the Board considered our strong financial and operational performance, including record profits, cash flows and normalized FFO per share, while also recognizing that our TSR for the one-year period ended December 31, 2013 was below the median of our peer group, our TSR for the three-year period then ended was substantially at the median of our peer group and our TSR for the ten-year period then ended was in the top quartile of our peer group. The Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board exercised negative discretion on the individual performance component of our Chief Executive Officer’s 2013 cash incentive award and the qualitative performance component of our Named Executive Officers’ 2013 long-term incentive awards to reduce the earned value of these awards, achieving stockholder alignment consistent with the design of our compensation program. As a result, the 2013 total direct compensation for each of our Named Executive Officers declined year over year, with the compensation of our Chief Executive Officer declining by more than 12%, to reflect attained performance and promote alignment with our stockholders.
The year-over-year changes in our Named Executive Officers’ compensation are shown in the table below, which sets forth the individual components of our Named Executive Officers’ total direct compensation for 2013, 2012 and 2011, consistent with the manner in which the Board evaluates executive compensation and pay-for-performance. Ms. Cafaro’s and Mr. Lewis’s total direct compensation declined more significantly than that of our other Named Executive Officers to reflect the view of the Compensation Committee and the independent members of the Board that Ms. Cafaro’s and Mr. Lewis’s compensation should have the greatest alignment with our stockholders.
The table below aligns the value of our Named Executive Officers’ long-term equity incentive awards with the performance year for which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance are shown as 2013 compensation). This presentation differs from the Summary Compensation Table, which, due to SEC disclosure rules, disconnects the value of our Named Executive Officers’ long-term equity incentive awards from the performance year for which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance will not be shown in the Summary Compensation Table until our 2015 Proxy Statement as 2014 compensation). The table below supplements, and does not replace, the Summary Compensation Table.
 
 
 
Annual Cash
Incentive Award
Long-Term Equity Incentive Award
 
 
 
Performance
Year
 
Restricted Stock
Stock Options
Total Direct
Compensation(2)
Year-Over-Year Change
Name
Salary
# of Shares
Value(1)
# of Shares
Value(1)
D. Cafaro(3)
2013
$
1,000,000

$
2,974,001

58,812

$
3,622,850

354,972

$
1,552,650

$
9,149,501

(12
)%
 
2012
1,000,000

3,480,000

63,066

4,158,000

175,739

1,782,000

10,420,000

 
 
2011
915,000

3,019,500

82,808

4,611,600

182,560

1,976,400

10,522,500

 
R. Lewis
2013
618,000

1,293,165

21,811

1,343,612

131,649

575,834

3,830,611

(17
)%
 
2012
600,000

1,320,000

28,348

1,869,000

78,994

801,000

4,590,000

 
 
2011
498,000

1,064,475

30,985

1,725,570

68,310

739,530

4,027,575

 
T. Lillibridge
2013
412,000

844,600

9,930

611,696

59,935

262,156

2,130,452

(1
)%
 
2012
400,000

832,821

9,682

638,400

26,982

273,600

2,144,821

 
 
2011
375,000

599,574

11,312

630,000

24,939

270,000

1,874,574

 
T.R. Riney
2013
463,500

957,128

11,171

688,158

67,426

294,925

2,403,711

(7
)%
 
2012
450,000

924,000

12,900

850,500

35,946

364,500

2,589,000

 
 
2011
381,000

760,095

14,367

800,100

31,673

342,900

2,284,095

 
R. Schweinhart
2013
463,500

924,683

10,513

647,602

63,453

277,544

2,313,329

(4
)%
 
2012
450,000

868,875

11,466

756,000

31,952

324,000

2,398,875

 
 
2011
407,000

782,051

15,347

854,700

33,835

366,300

2,410,051

 
(1)
Amounts shown represent the full grant date fair value, calculated pursuant to Financial Accounting Standards Board (“FASB”) guidance relating to fair value provisions for share-based payments, of the restricted stock and stock option portions of each Named Executive Officer’s long-term equity incentive award.
(2)
Total direct compensation consists of base salary, plus annual cash incentive awards and long-term equity incentive awards, and therefore excludes amounts shown in the “All Other Compensation” column of the 2013 Summary Compensation Table.
(3)
Ms. Cafaro’s 2011 total direct compensation excludes the $8 million special equity incentive award granted to her in March 2011 that vests over five years because this award was not related solely to performance in a single year. The special equity incentive award was granted to support her continued retention and in recognition of her superior long-term performance and contributions to our success. The Board does not view this award as a continuing feature of our executive compensation program.

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2013 Base Salary. Following a review of compensation data for peers with substantially similar roles and responsibilities (as described below under “—Compensation Consultant and Benchmarking”), each of Messrs. Lewis, Lillibridge, Riney and Schweinhart received an increase in base salary for 2013 to more closely align with market competitive levels. Ms. Cafaro’s base salary was determined to be at the market median and remained unchanged from 2012 to 2013.
2013 Cash Incentive Awards. As described below under “Elements of Our Compensation Program,” our Named Executive Officers received cash incentive awards ranging from 83% to 98% of their respective maximum award opportunities for 2013 due primarily to our strong performance relative to pre-established company financial goals (normalized FFO per share, acquisitions and fixed charge coverage ratio), which accounted for 65% of the 2013 cash incentive awards (35% in the case of Mr. Lillibridge; an additional 40% of Mr. Lillibridge’s 2013 cash incentive award was based on the strong performance of our MOB operations). With respect to the remaining 35% of the 2013 cash incentive awards based on individual performance (25% in the case of Mr. Lillibridge), the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board determined that each Named Executive Officer attained between target and maximum performance.
2013 Long-Term Incentive Awards. Based on the Compensation Committee’s ongoing consideration of market practices, our business needs and feedback from our stockholders, we modified our long-term incentive plan for 2013 such that 50% of the value of the long-term incentive awards was determined based on performance with respect to pre-established quantitative performance metrics (primarily one- and three-year relative TSR) that were not subject to discretion. The remaining 50% (previously 100%) of the value of the awards was determined based on qualitative evaluation of pre-established financial, operational and strategic performance factors that enabled the Compensation Committee and the independent members of the Board to use their discretion to evaluate our success in preserving long-term stockholder value and avoiding excessive risk-taking. The Compensation Committee and the independent members of the Board believe that this 50/50 split between a formulaic evaluation of performance and a more qualitative evaluation provided the appropriate incentive structure and balance to align interests and drive long-term stockholder value in 2013.
As described below under “Elements of Our Compensation Program,” our Named Executive Officers received long-term incentive awards ranging from 63% to 71% of their respective maximum award opportunities for 2013. Overall performance on the performance goals (one-year relative TSR, three-year relative TSR and net debt to adjusted pro forma EBITDA) under the quantitative portion (50%) of the 2013 long-term incentive plan approximated 50% of the maximum performance opportunity. With respect to the portion (50%) of the 2013 long-term incentive plan based on a qualitative evaluation of specific performance factors, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board balanced our strong financial and operational performance in 2013 with consideration of our relative TSR performance and determined that the Named Executive Officers had achieved between target and maximum performance.
Compensation Policies and Practices. In 2013, consistent with our commitment to strong corporate governance and responsiveness to our stockholders, our Board adopted a policy against tax gross-up arrangements, which formalized our existing practice of not entering into new tax gross-up arrangements with our executive officers, and maintained the following responsible compensation and corporate governance practices:
ü The structure of our executive compensation program includes a balanced mix of cash and equity compensation with a strong emphasis on performance-based incentive awards;
ü Our Named Executive Officers’ incentive award opportunities are capped, and the value of their awards is determined by the Compensation Committee’s or the independent Board members’ assessment of performance with respect to multiple performance metrics, including TSR, that promote stockholder value;
ü The long-term equity incentive awards earned by our Named Executive Officers for prior-year performance have time-based vesting schedules to enhance retention and alignment with long-term stockholder value;
ü The competitiveness of our executive compensation program is assessed by comparison to the median of a group of peer companies that are comparable to us in terms of enterprise value, market capitalization and total assets;
ü Our Compensation Committee is comprised solely of independent directors and annually engages an independent compensation consultant to advise on matters related to our executive compensation program;
ü We maintain meaningful share ownership guidelines for our executive officers and non-employee directors that promote a long-term stockholder perspective;
ü Our Compensation Committee annually reviews and discusses an assessment of the potential risks of our compensation policies and practices for all employees;

22


ü Our executive officers receive limited perquisites and other personal benefits that are not otherwise generally available to all of our employees; and
ü Our Securities Trading Policy and Procedures prohibits our executive officers and directors from engaging in derivative and other hedging transactions in our securities, and it restricts our executive officers and directors from holding our securities in margin accounts or otherwise pledging our securities to secure loans without the prior approval of the Audit Committee (no executive officer or director pledged or held our securities in margin accounts at any time during 2013).
Highlights of 2013 Performance
Ventas had an excellent year of financial performance in 2013, as we achieved record profits, cash flows and normalized FFO per share by executing on our business strategy and building upon our three core strengths: making accretive investments; raising capital; and managing our assets. We grew internally from exceptional performance in our same-store portfolio and externally by successfully completing approximately $2.3 billion of diversifying investments since December 2012. At the same time, we retained our significant financial strength and flexibility and improved our attractive cost of capital. Our 2013 compensation decisions reflected our Named Executive Officers’ contributions to our strong financial and operational performance during the year, while acknowledging that our one-year TSR was below the median of our peer group and our three-year TSR was substantially at the median of our peer group. Due to the role of relative TSR performance in the determination of our Named Executive Officers’ long-term incentive awards, the 2013 total direct compensation of each of our Named Executive Officers declined from 2012, supporting our pay-for-performance compensation philosophy and creating alignment with stockholders.
The highlights of our 2013 accomplishments include the following:
Financial Results
ü We delivered our 11th consecutive year of growth in normalized FFO, which increased 9% to $1.2 billion, and our normalized FFO per diluted share also rose 9% to $4.14. Excluding non-cash items, our normalized FFO per share growth was 11%.
ü Our cash flows from operations increased more than 20% to $1.2 billion, and same-store cash NOI for our total portfolio increased 5% year over year. We generated over $300 million in free cash flow after capital expenditures and dividends.
Investments and Portfolio
ü Our approximately $2.3 billion of diversifying investments since December 2012 improved our private pay assets to 84% of our portfolio.
ü We entered into lease renewals, new leases or sale contracts for all 89 licensed healthcare facilities leased by Kindred whose lease terms were up for renewal May 1, 2013, and we entered into favorable agreements with Kindred to extend the leases at a higher rental rate with respect to 48 of the 108 licensed healthcare assets whose lease terms were originally scheduled to expire on April 30, 2015.
Liquidity, Capital Raising, Ratings and Balance Sheet
ü
We ended the year with a strong balance sheet, demonstrated by our fixed charge coverage ratio of 4.5x and net debt to adjusted pro forma EBITDA of 5.5x at December 31, 2013. The strength of our balance sheet and our credit profile was recognized by Moody’s, which upgraded our corporate credit rating to Baa1 (stable) in August 2013, and S&P, which upgraded our corporate credit rating to BBB+ (stable) in December 2013.
ü Our cash interest rate improved 30 basis points, as we raised $1.6 billion of new capital through the issuance of senior unsecured notes with a weighted average interest rate of 3.3% and a weighted average initial maturity of 13.6 years. We also issued and sold approximately 2.1 million shares of our common stock under our “at-the-market” equity offering program at an average price of $69.42 per share for aggregate net proceeds (after sales agent commissions) of approximately $141.5 million.
ü We enhanced our liquidity, extended our debt maturities and improved our pricing compared to previously existing bank debt by entering into a new $3.0 billion unsecured credit facility, comprised of a $2.0 billion revolving credit facility and $1.0 billion in term loans.

23


Returns and Dividends
ü Although our TSR for the one-year period ended December 31, 2013 was below the median of our peer group and our TSR for the three-year period then ended was substantially at the median of our peer group due, in part, to changes in monetary policy and interest rate expectations that disproportionately affected the trading prices of the three large-cap healthcare REITs’ common stock in 2013, we ranked first in compound annual TSR among the large-cap healthcare REITs for each of the one-, five- and ten-year periods ended December 31, 2013 (-7.6%, +16.6% and +15.4%, respectively) and two of three for the three-year period then ended (+7.4%).
ü We ranked third among our peer group and outperformed the S&P 500 index and the RMZ index in compound annual TSR for the ten-year period ended December 31, 2013. From January 1, 2000 to December 31, 2013, we delivered compound annual TSR of 28.4%, which is highest among our peer group.
ü We paid our common stockholders an annual cash dividend of $2.735 per share, which represents a 10% increase over 2012. For the last ten years, our cash dividend has increased at a compound annual growth rate of 10%.
External Recognition
ü
We were honored to be named one of the World’s Most Admired Real Estate Companies by Fortune magazine.
2013 Advisory Vote on Executive Compensation and Stockholder Outreach
The Board has determined that an advisory vote to approve our executive compensation will be submitted to our stockholders on an annual basis. At our 2013 Annual Meeting of Stockholders, holders of approximately 92% of the shares represented at the meeting voted to approve, on an advisory basis, our executive compensation, an increase of more than 25% from 2012. We believe the strong level of support for our compensation program in 2013 reflects (a) the strong alignment between our executive pay and performance both in 2012 and over longer time periods (see chart below), (b) the quantitative alignment between our executive pay and performance as measured by stockholder advisory groups and (c) the enhancements to our compensation program that we disclosed in our 2013 proxy statement following our broad stockholder outreach efforts.
In 2013, our compensation decisions once again reflected strong alignment between pay and performance. Despite our achievement of record financial results, the total direct compensation of our Chief Executive Officer declined more than 12% year over year as a result of the balance between formulaic and qualitative evaluations of performance under our long-term

24


incentive plan and recognition of our one- and three-year TSR performance. The chart above illustrates our long-term pay-for-performance alignment by comparing our Chief Executive Officer’s total direct compensation to our TSR performance (indexed to a 2008 base year) for each of the past five years. This chart aligns the value of long-term equity incentive awards with the performance year for which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance are shown as 2013 compensation), consistent with the manner in which the Board evaluates compensation and pay-for-performance (as disclosed in further detail in the supplemental table on page 21). However, it differs from the Summary Compensation Table, which, due to SEC rules that require the full grant date fair value of equity awards to be included as compensation in the year in which they were granted, disconnects the value of our long-term equity incentive awards from the performance year in which they were earned (e.g., long-term equity incentive awards granted in January 2014 for 2013 performance will not be shown in the Summary Compensation Table until our 2015 Proxy Statement as 2014 compensation).
Prior to and in the months following our 2012 Annual Meeting of Stockholders, we engaged in a broad outreach program to discuss our executive compensation practices with our stockholders. We learned from these discussions that our stockholders generally approve of the structure of our executive compensation program and support the pay-for-performance alignment we have consistently demonstrated. Nevertheless, reflecting the value our Board places on continuing and constructive feedback from our stockholders, we made certain enhancements to our executive compensation program in 2012 and the related disclosures in our 2013 proxy statement, including:
ü Changes to the comparative group of peer companies that the Compensation Committee and the independent members of the Board use for compensation purposes to position us closer to the median in terms of market capitalization, enterprise value and total assets in light of our significant growth (see “Compensation Consultant and Benchmarking” below);
ü Changes to our benchmarking practices to target the median (previously 65th percentile) of our comparative group of peer companies (see “Compensation Consultant and Benchmarking” below); and
ü Expansion of the disclosures in our CD&A regarding the performance metrics considered by the Compensation Committee and the independent members of the Board, including how those metrics support our pay-for-performance philosophy and contribute to the determination of our Named Executive Officers’ incentive awards (see “Elements of Our Compensation Program—Annual Cash Incentive Compensation” and “—Long-Term Equity Incentive Compensation” below).
The Board also reviewed the structure of our long-term incentive plan in the context of its ongoing consideration of market practices, our business needs and input from our stockholders. Notwithstanding the fact that our long-term equity incentive awards historically have been 100% performance-based, certain stockholders favored a more formula-driven approach to determining awards for our Named Executive Officers. In response to this feedback, we modified our long-term incentive plan for 2013 such that 50% of the value of our Named Executive Officers’ long-term equity incentive awards would be determined on the basis of performance with respect to pre-established quantitative performance metrics (primarily one- and three-year relative TSR) that were not subject to Compensation Committee or Board discretion. The other 50% of the value of the awards would be determined on the basis of a qualitative evaluation of performance with respect to pre-established financial, operational and strategic performance factors that enabled the Compensation Committee and the independent members of the Board to use their discretion to evaluate our success in preserving long-term stockholder value and avoiding excessive risk-taking.
The changes to our long-term incentive plan to harmonize quantitative and qualitative evaluations of performance contributed to the continued alignment of our pay with our performance in 2013. Although we performed well in relation to financial metrics over which our Named Executive Officers have significant direct influence, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board utilized their discretion in evaluating the specific performance factors under the qualitative portion of the 2013 long-term incentive plan to take into account performance in other areas, including our one- and three-year relative TSR, and reduced the Named Executive Officers’ long-term incentive awards to further emphasize stockholder alignment. This exercise of discretion contributed to a decline in each Named Executive Officer’s total direct compensation from 2012.
In connection with our 2013 Annual Meeting of Stockholders, we engaged in another broad outreach program and discussed our executive compensation program with, or solicited feedback from, institutional investors that held more than 65% of the outstanding shares of our common stock. We invited our 30 largest stockholders to provide their views about our executive compensation program, as well as our corporate governance practices. Based on these discussions and the strong support of our stockholders at our 2013 Annual Meeting of Stockholders, we believe that the changes described above addressed the constructive feedback we received in the course of our 2012 stockholder outreach. Moreover, the Compensation Committee and the independent members of the Board have carefully evaluated our overall executive compensation program

25


and believe that it is well designed to achieve our objectives of retaining talented executives and rewarding superior performance in the context of our business risk environment.
Objectives of Our Compensation Program
We recognize that effective compensation strategies are critical to recruiting, incentivizing and retaining key employees who contribute to our long-term success and thereby create value for our stockholders. Accordingly, our compensation program is designed to achieve the following primary objectives:
ü Attract, retain and motivate talented executives;
ü Link realized compensation to the achievement of pre-established financial and strategic company goals, as well as individual goals;
ü Provide balanced incentives that do not promote excessive risk-taking;
ü Retain sufficient flexibility to permit our executive officers to manage risk and adjust appropriately to meet rapidly changing market and business conditions;
ü Reward performance that meets or exceeds pre-established goals while maintaining alignment with stockholders;
ü Evaluate performance by balancing consideration of metrics over which management has significant direct influence with market forces (e.g., monetary policy and interest rate expectations) that management cannot control, but that impact stockholder value;
ü Encourage executives to become and remain long-term stockholders of Ventas; and
ü Maintain compensation and corporate governance practices that support our goal of delivering consistent, superior total returns to stockholders.
We align the interests of our executive officers and stockholders by maintaining a performance- and achievement-oriented environment that provides executives with the opportunity to earn market-competitive levels of cash and equity compensation for strong performance measured against key financial and strategic goals that create long-term stockholder value.
Compensation Consultant and Benchmarking
The Compensation Committee retained PM&P as its independent compensation consultant to advise it and the independent members of the Board on matters related to our Named Executive Officers’ compensation levels and program design for 2013. At the time of engagement in 2013, the Compensation Committee reviewed PM&P’s independence, determined that PM&P met the independence criteria under the Compensation Committee charter and determined that PM&P’s engagement raised no conflict of interest.
In 2013, PM&P provided the Compensation Committee and the independent members of our Board with comparative market data on compensation practices and programs based on its analysis of a group of peer companies (the “Comparable Companies”) and provided guidance on compensation trends and best practices. Using this market data, PM&P advised the Compensation Committee and the independent members of our Board and made recommendations with respect to program design and setting base salaries and incentive award opportunity levels for our executive officers.
In determining 2013 compensation targets for our Named Executive Officers, the Compensation Committee, in consultation with PM&P, considered the competitive positioning of our executive compensation levels relative to compensation data for the Comparable Companies with respect to the following components of pay: base salary; total annual compensation (base salary plus annual incentive awards); long-term incentives (annualized expected value of long-term incentive awards); and total direct compensation (base salary plus annual incentive awards and annualized expected value of long-term incentive awards). In 2013, consistent with our compensation philosophy, we targeted the median of the Comparable Companies for each of these components. Our 2013 executive compensation program was designed to deliver compensation levels above or below these targets if performance exceeded or failed to achieve the goals established for the annual and long-term incentive awards. We believe this methodology is appropriate for our operating style and reflects the need to attract, retain and stretch top executive talent.
The group of Comparable Companies consists of REITs similar to us in terms of operations and FFO and generally falling within a range of 50% to 200% of our enterprise value, market capitalization and total assets. The Compensation Committee annually reviews the Comparable Companies to ensure that their size and operations remain comparable to ours and may change the composition of the group from time to time as appropriate. In August 2012, the Compensation Committee approved

26


the 15 companies identified below as the appropriate Comparable Companies for 2013 compensation purposes. These companies are the same companies used by the Compensation Committee for 2012 compensation purposes. The Comparable Companies reported compensation data for executive positions with responsibilities similar in breadth and scope to those of our executive officers, and we believe these companies generally competed with us for executive talent and stockholder investment in 2013.
Elements of Our Compensation Program
For 2013, the compensation provided to our executive officers consisted of the same elements generally available to our non-executive officers, namely base salary, annual cash incentive compensation, long-term equity incentive compensation, and other perquisites and benefits, each of which is described in more detail below. Except as described under “—2013 Advisory Vote on Executive Compensation” above, the structure of our executive compensation program has remained consistent for several years, and the Compensation Committee carefully considered the feedback we received during our 2012 and 2013 stockholder outreach programs in continuing this structure with limited changes.
Our executive compensation philosophy promotes a compensation mix that emphasizes variable pay and long-term stockholder value. We believe that an emphasis on incentive compensation creates greater alignment with the interests of our stockholders, ensures that our business strategy is executed by decision-makers in a manner that focuses on the creation of long-term value rather than only short-term results, and encourages prudent evaluation of risks. Accordingly, our compensation structure is designed such that a significant portion of Named Executive Officers’ total direct compensation is in the form of equity awards granted based on historical performance that vest over time to promote retention and alignment with stockholder value.
The following charts illustrate each Named Executive Officer’s base salary, target annual cash incentive compensation and target long-term incentive compensation as a percentage of his or her target total direct compensation for 2013. Ms. Cafaro’s and Mr. Lewis’s target total direct compensation reflect a heavier weight on long-term incentive compensation because the Compensation Committee believes that, due to their leadership roles as our Chief Executive Officer and President, respectively, their compensation structures should reflect even greater alignment with our stockholders.

27


Base Salary
The base salary payable to each Named Executive Officer provides a fixed component of compensation that reflects the executive’s position and responsibilities. Base salary is generally targeted to approximate the competitive market median of the Comparable Companies, but may deviate from this target based on an individual’s sustained performance, contributions, leadership, experience, expertise and specific roles within our company as compared to the benchmark data. The Compensation Committee reviews base salaries annually and may make adjustments to better match competitive market levels or to recognize an executive’s professional growth and development or increased responsibilities. The Compensation Committee also considers the success of the Named Executive Officer in developing and executing our strategic plans, exercising leadership and creating stockholder value.
In determining 2013 base salaries for our Named Executive Officers, the Compensation Committee analyzed base salary information of the Comparable Companies contained in a report prepared by PM&P. Although the Compensation Committee periodically considers information from REIT industry and other compensation surveys, it places primary emphasis on publicly available data from the Comparable Companies’ proxy statements and other SEC filings, which is more detailed by individual executive officer position than the data typically provided in compensation surveys.
For 2013, the Compensation Committee and, in the case of the Chief Executive Officer, the independent members of the Board approved the following base salary increases for our Named Executive Officers:
 
Base Salary
Year-Over-Year
% Change
 
2013
2012
D. Cafaro
$
1,000,000

$
1,000,000

%
R. Lewis
618,000

600,000

3.0
%
T. Lillibridge
412,000

400,000

3.0
%
T.R. Riney
463,500

450,000

3.0
%
R. Schweinhart
463,500

450,000

3.0
%
With these increases, each Named Executive Officer’s 2013 base salary was positioned at or below the market median for the Comparable Companies.
Annual Cash Incentive Compensation
We provide our Named Executive Officers with an annual opportunity to earn cash incentive awards for achievement of pre-established company and individual goals. At or prior to the beginning of each performance year, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board approve specific performance metrics, goals and weightings and an award opportunity range (expressed as multiples of base salary and corresponding to threshold, target and maximum levels of performance) for each Named Executive Officer.

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In 2013, our Named Executive Officers earned cash incentive awards (as shown below) ranging from 83% to 98% of their respective maximum award opportunities. We exceeded maximum performance with respect to the company financial goals described below that accounted for 65% of the cash incentive awards (75% in the case of Mr. Lillibridge), and the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board determined that performance with respect to the remaining 35% based on individual goals (25% in the case of Mr. Lillibridge) was between target and maximum for each Named Executive Officer. To strengthen alignment between our Chief Executive Officer’s compensation and stockholder value, the independent members of the Board utilized their discretion to reduce the individual performance component of Ms. Cafaro’s cash incentive award despite her strong leadership and performance. As a result, Ms. Cafaro’s 2013 cash incentive award, as a percentage of her maximum award opportunity, was the lowest of our Named Executive Officers and reflected a decline in dollar value of approximately 15% compared to her 2012 cash incentive award.
Award Opportunities.  In December 2012, the Compensation Committee and, in the case of the Chief Executive Officer, the independent members of the Board approved the 2013 annual cash incentive award opportunities for our Named Executive Officers that are shown in the chart above. The threshold, target and maximum levels, expressed as multiples of base salary, for each Named Executive Officer did not change from 2012. At these levels, each Named Executive Officer’s 2013 target total annual compensation was positioned at or below the market median of the Comparable Companies. However, Ms. Cafaro’s annual cash incentive opportunity was structured with greater leverage and a wider range of outcomes than the annual cash incentive opportunities of our other Named Executive Officers, supporting the Compensation Committee’s view that the Chief Executive Officer’s compensation should be more closely aligned with stockholders than our other executive officers.
Performance Metrics.    Below is a summary of the annual cash incentive performance metrics and goals approved by the Compensation Committee and the independent members of the Board in December 2012 for 2013 performance, the relative weighting for each performance metric and the rationale as to why each performance metric is an important component of our pay-for-performance philosophy. As a result of the modifications to our long-term incentive plan for 2013, the Compensation Committee determined that the quantitative goals under our 2013 annual cash incentive plan should focus on company financial goals and moved relative TSR performance to the quantitative portion of the long-term incentive plan while also retaining it as a specific performance factor under the qualitative portion of the long-term incentive plan. In addition, fixed charge coverage ratio replaced net debt to pro forma adjusted EBITDA, which also moved to the quantitative portion of our 2013 long-term incentive plan.

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Consistent with our compensation philosophy, the 2013 goals were determined taking into consideration our strategic plan and designed to be challenging but discourage excessive risk-taking and permit our Named Executive Officers to adjust appropriately to meet rapidly changing market and business conditions.
Metric:
Percentage increase in our normalized FFO per share, excluding non-cash items, for the year ended December 31, 2013 compared to the year ended December 31, 2012
Goals:
Threshold – 2%
Target – 4%
Maximum – 6%
Rationale:
FFO is a common measure of operating performance for REITs because it excludes, among other items, the effect of gains and losses from real estate sales and real estate depreciation and amortization to allow investors, analysts and management to compare operating performance among companies and across time periods on a consistent basis. A REIT’s FFO can have a significant impact on the trading price of its common stock and, therefore, its TSR. Normalized FFO is FFO excluding certain items, such as asset impairment expenses, non-cash income tax items, deal costs and expenses, and gains and losses from marking the value of derivative instruments to market.
Metric:
Acquisitions for the 13-month period ended December 31, 2013 (new metric for 2013)
Goals:
Threshold – $1.0 billion
Target – $1.5 billion
Maximum – $2.0 billion
Rationale:
A key component of our business strategy is to grow and diversify our portfolio and drive long-term stockholder value through improved earnings and accretive acquisitions. Acquisition activity demonstrates our ability to identify and execute transactions that help us achieve this strategy and deliver value to our stockholders.
Our Board determined that the 13-month period ended December 31, 2013 was the appropriate measurement period for this metric to align with the timing of the Board’s 2012 review of our strategic plan and to mitigate risk by promoting the completion of potential acquisitions as promptly as possible.
Metric:
Fixed charge coverage ratio as of December 31, 2013 (new metric for 2013)
Goals:
Threshold – 3.25x
Target – 3.50x
Maximum – 3.75x
Rationale:
Fixed charge coverage ratio reflects the strength of our balance sheet and our ability to generate sufficient earnings to meet our debt obligations. A strong balance sheet — one element of our comprehensive risk management program — is especially important for REITs, which are required to distribute to stockholders a substantial portion of their annual income. By maintaining financial strength, we are able to preserve stockholder value, particularly during periods of economic decline, and create additional value for stockholders by continuing to execute on our acquisition strategy.

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Metric:
Individual performance under management objectives established for each Named Executive Officer
Goals:
Individual objectives relate to areas of special emphasis within the executive’s particular responsibilities and duties, such as achieving certain cost, NOI or revenue targets, completing certain IT systems conversions or installations, or achieving other extraordinary or unusual accomplishments or contributions, in light of our business risk environment.
Rationale:
A review of each Named Executive Officer’s annual accomplishments enables the Compensation Committee and the independent members of the Board to evaluate the specific contributions of the Named Executive Officer to our annual performance metrics and more closely link pay to performance.
*
Due to Mr. Lillibridge’s responsibility for the strategic focus, vision and overall leadership of our MOB operations, 40% of his 2013 cash incentive award was based on the 2013 financial performance of our MOB operations segment, 35% of his award was based on the company financial goals (normalized FFO per share, acquisitions and fixed charge coverage ratio in the same proportions discussed above), and 25% of his award was based on his 2013 individual performance goals.
Actual Performance.   In the first quarter of the year following the performance year, each Named Executive Officer’s performance is evaluated with respect to the applicable company and individual performance metrics and goals to determine the earned value of the individual’s annual cash incentive award, if any, within the established award opportunity range.
For 2013, we exceeded maximum performance on each of the company financial goals, as summarized below.
COMPANY FINANCIAL PERFORMANCE
Normalized FFO per Share Growth (35%):  Our year-over-year normalized FFO per diluted share, excluding non-cash items, increased 11% from $3.60 to $3.99, exceeding the maximum performance goal.
Acquisitions (15%): We completed approximately $2.3 billion of acquisitions (excluding the value of anticipated sales of loan investments and shares of our common stock we acquired in connection with the acquisition of certain private investment funds) during the 13-month period ended December 31, 2013, exceeding the maximum performance goal.
Fixed Charge Coverage Ratio (15%):  As of December 31, 2013, our fixed charge coverage ratio was 4.50x, exceeding the maximum performance goal.
Our MOB operations segment also exceeded maximum performance with respect to the 40% of Mr. Lillibridge’s 2013 cash incentive award based on segment performance.
In addition, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board evaluated the individual performance of each Named Executive Officer with respect to his or her specified individual objectives and determined that each of our Named Executive Officers had achieved between target and maximum performance. The significant accomplishments considered by the Compensation Committee and the independent members of the Board in evaluating our Named Executive Officers’ 2013 performance and determining the individual performance component of their 2013 annual cash incentive awards are summarized below.

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INDIVIDUAL PERFORMANCE (35%)
D. Cafaro
ü
Led successful execution of our strategy, driving record financial results through internal growth and approximately $2.3 billion of acquisitions since December 2012 while maintaining sound risk management and a strong balance sheet, and improving our cost of capital
 
 
ü
Worked with our investment team to prioritize and negotiate potential investments and our asset management team on Kindred renewals and other significant tenant, operator and manager transactions
 
 
ü
Maintained and developed strong CEO-to-CEO relationships with important customers, tenants and operators and represented Ventas in significant industry groups
 
 
ü
Consistently delivered our message and represented the company externally with investors, analysts, media and government officials, which efforts contributed to Ventas being named one of the World’s Most Admired Real Estate Companies by Fortune magazine and Ms. Cafaro being named to All-American Executive Team by Institutional Investor for three out of the last four years
 
 
ü
Sustained highly skilled and productive leadership team and promoted culture of interdisciplinary teamwork, analytic rigor, integrity, excellence, continuous improvement, and communication
 
 
ü
Optimized capital markets timing and execution
R. Lewis
ü
Drove internal cash flow growth, including same-store NOI growth of 5.6% in our seniors housing operating portfolio
 
 
ü
Oversaw completion of 2013 Kindred renewals, in which all 89 licensed healthcare assets leased by Kindred whose lease terms were scheduled to expire during the second quarter of 2013 were renewed, sold or transitioned to new operators
 
 
ü
Managed successful negotiation of favorable agreements with Kindred to extend the leases at a higher rental rate with respect to 48 properties whose lease terms were originally scheduled to expire in April 2015
 
 
ü
Implemented Asset Management department reorganization and process improvements
T. Lillibridge
ü
Propelled strong financial performance of our MOB segment, including same-store cash NOI growth of 3.7%
 
 
ü
Oversaw nearly $200 million of MOB acquisitions during 2013
 
 
ü
Focused on expense control and rate increases to improve margins in our same-store stabilized portfolio to 67% in the fourth quarter of 2013, compared with 64% in the fourth quarter of 2012
 
 
ü
Spearheaded transition of 1.2 million square feet of MOBs to Lillibridge property management business to leverage scale, consistency and performance of internal business
 
 

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R. Riney
ü
Managed legal negotiations, documentation and due diligence in connection with closing approximately $2.3 billion of acquisitions since December 2012
 
 
ü
Responsible for legal aspects of 2013 Kindred renewals, in which all 89 licensed healthcare assets leased by Kindred whose lease terms were scheduled to expire during the second quarter of 2013 were renewed, sold or transitioned to new operators, as well as legal negotiation and documentation of favorable agreements with Kindred to extend the leases at a higher rental rate with respect to 48 properties whose lease terms were originally scheduled to expire in April 2015
 
 
ü
Supervised all aspects of 2013 proxy statement and successful annual meeting process, including extensive stockholder outreach on multiple stockholder proposals
 
 
ü
Created and implemented comprehensive healthcare regulatory compliance policy for our tenants, operators and managers
 
 
ü
Supervised execution of approximately $1.6 billion in senior notes offerings, negotiation and closing of new $3.0 billion unsecured credit facility and establishment of $750 million “at-the-market” equity offering program
R. Schweinhart
ü
Managed our liquidity and strengthened our balance sheet through leadership role on financing transactions, including issuance of $1.6 billion of senior notes with a weighted average interest rate of 3.3% and a weighted average initial maturity of 13.6 years, entrance into new $3.0 billion unsecured credit facility and establishment of $750 million “at-the-market” equity offering program
 
 
ü
Drove 30 basis point improvement in cash interest rate through 2013 financing activities and repayment of $764 million principal amount of our senior notes and mortgage loans with a weighted average cash interest rate of 5.9%
 
 
ü
Initiated credit and balance sheet actions that contributed to credit ratings upgrades from Moody’s and S&P
 
 
ü
Led exceptional accounting team that facilitated prompt and reliable reporting of financial results
 
 
ü
Completed expansion and realignment of IT department with high quality team and implemented IT Project Management Office that completed more than 40 Ventas projects in 2013
Earned Awards.    Based on our performance with respect to the company financial metrics and our Named Executive Officers’ individual performance summarized above, in January 2014, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board approved 2013 cash incentive awards ranging from 83% to 98% of the Named Executive Officers’ respective maximum award opportunities. The dollar value of each Named Executive Officer’s award is set forth in the “Non-Equity Incentive Plan Compensation” column of the 2013 Summary Compensation Table.
Long-Term Equity Incentive Compensation
The Compensation Committee believes that a substantial portion of each Named Executive Officer’s compensation should be in the form of long-term equity incentive compensation. While the annual cash incentive plan rewards management actions that impact short-and mid-term performance, the Compensation Committee recognizes that long-term equity incentive awards also serve the interests of our stockholders by giving key employees the opportunity to participate in the long-term appreciation of our common stock. Equity incentive awards encourage management to create and sustain stockholder value over longer periods because their value is directly attributable to changes in the price of our common stock over time. In addition, equity awards promote management retention because their full value cannot be realized until vesting occurs, which generally requires continued employment for multiple years. At or prior to the beginning of each performance year, the Compensation Committee and, in the case of the Chief Executive Officer, the independent members of the Board approve specific performance metrics, goals and weightings and a long-term incentive award opportunity range (expressed as multiples of base salary and corresponding to threshold, target and maximum levels of performance) for each Named Executive Officer.
In 2013, our Named Executive Officers earned long-term incentive awards (as shown below) ranging from 63% to 71% of their respective maximum award opportunities. Strengthening alignment with stockholders and reflecting our emphasis on pay-for-performance, TSR was the most important factor in determining the amount of our Named Executive Officers’ 2013 long-term incentive awards as it (a) constituted 35% of the 50% quantitative portion of the awards and (b) was an important consideration under the remaining 50% qualitative portion of the awards. Specifically, in evaluating the performance factors under the qualitative portion of the 2013 long-term incentive plan, the Compensation Committee and, in

33


the case of our Chief Executive Officer, the independent members of the Board balanced our strong financial and operational performance in 2013 with consideration of our relative TSR performance, which was below the median of our peer group for the one-year period ended December 31, 2013 and substantially at the median of our peer group for the three-year period then ended. The role of relative TSR in the determination of our Named Executive Officers’ 2013 long-term incentive awards contributed to awards that were lower in value than the 2012 awards. Year over year, Ms. Cafaro’s long-term incentive award declined in dollar value approximately 13%. Her 2013 long-term incentive award represented 69% of her maximum award opportunity, compared to her long-term incentive awards for the prior five years, which averaged 88% of her maximum award opportunity.
Award Opportunities.  In December 2012, the Compensation Committee and, in the case of the Chief Executive Officer, the independent members of the Board approved the 2013 long-term equity incentive award opportunities shown in the chart above for our Named Executive Officers. Ms. Cafaro’s and Mr. Lillibridge’s threshold, target and maximum long-term incentive award opportunities, as multiples of their respective base salaries, were adjusted in 2013 (from 1.75x, 3.50x and 7.20x, respectively, for Ms. Cafaro and from 0.80x, 1.60x and 2.40x, respectively, for Mr. Lillibridge) to position their target total direct compensation closer to the market median for the Comparable Companies. The 2013 threshold, target and maximum long-term incentive award opportunities, as multiples of base salary, for Messrs. Lewis, Riney and Schweinhart did not change.
At the target levels shown above, each Named Executive Officer’s 2013 target total direct compensation was positioned at or below the market median of the Comparable Companies. Ms. Cafaro’s and Mr. Lewis’s long-term incentive structures have greater leverage and a wider range of outcomes than the long-term incentive structures of our other Named Executive Officers to reflect the view of the Compensation Committee and the independent members of the Board that our Chief Executive Officer’s and President’s compensation structures should have even greater alignment with our stockholders.
Performance Metrics.  Prior to the 2013 performance period, the long-term incentive award performance metrics approved by the Compensation Committee and the independent members of the Board related entirely to specific focus areas that aligned with our business strategy and then current market conditions. While performance with respect to some of the metrics could be measured objectively, the absence of rigid goals and formulaic determinations of performance allowed management to adjust to meet rapidly changing market and business conditions and to act in the best interests of our company to create, and preserve, long-term value for our stakeholders. This flexibility has been uniquely important to us because of the volatility caused by increasing consolidation in the healthcare real estate industry in recent years, unpredictable changes in business models and government reimbursement policies, our historically high volume of

34


acquisition activity, and the value to our business of timely and effective capital markets execution in a rapidly changing and volatile environment. The Compensation Committee and the independent members of the Board believe that rigid goals and formulaic determinations of performance may increase compensation risk by encouraging a narrow focus that may be inappropriate in light of these industry and strategic considerations and, for that reason, retained discretion within a pre-approved framework of financial, operational and strategic performance metrics under the long-term incentive plan to evaluate performance qualitatively in the event that actual performance and its effect on stockholder value were higher or lower than a strict quantitative approach might suggest. The Compensation Committee and the independent members of the Board believe that this approach was instrumental in driving consistent, superior total returns to our stockholders and limiting risk in our executive compensation program.
In 2012, the Compensation Committee and the independent members of the Board reviewed a market study focused on long-term incentive plan design and, in that context, assessed the level of discretion permitted in evaluating long-term performance achieved by our Named Executive Officers. Based on this assessment and feedback from our stockholders during our 2012 stockholder outreach program, the Board modified our 2013 long-term incentive plan such that 50% of the value of our Named Executive Officers’ long-term equity incentive awards was determined based on achievement of pre-established quantitative performance metrics (primarily one- and three-year relative TSR) that were not subject to Board discretion. However, due to the importance of maintaining flexibility in the evaluation of long-term performance, as discussed above, the Compensation Committee and the independent members of the Board retained discretion with respect to specific financial, operational and strategic performance factors that determined the other 50% of the 2013 long-term equity incentive awards. Although the Compensation Committee and the independent members of the Board retained discretion to determine overall performance under this portion of the long-term incentive plan, many of the specific performance factors were evaluated based on objective, quantifiable measures.
The Compensation Committee and the independent members of the Board believe that this 50/50 split between a formulaic evaluation of performance and a more qualitative evaluation provided the appropriate incentive structure and balance to drive long-term stockholder value and discourage excessive risk-taking for the 2013 performance period. For future performance periods, they will continue to evaluate our long-term incentive plan in the context of our overall executive compensation program, our business needs and feedback from our stockholders.
Below is a summary of the 2013 long-term incentive award performance metrics and goals approved by the Compensation Committee and the independent members of the Board in December 2012, the relative weighting for each performance metric and the rationale as to why each performance metric is an important component of our pay-for-performance philosophy.
Metric:
Our TSR for the one-year period ended December 31, 2013 relative to the TSR of the Comparable Companies for the same period
Goals:
Threshold – 25th percentile
Target – 50th percentile
Maximum – 80th percentile
Rationale:
TSR is the most direct measure of our creation and preservation of stockholder value. By relying on a relative measure of our TSR performance, our Board mitigates the impact of broader market or industry trends that do not directly reflect our actual performance.
Metric:
Our TSR for the three-year period ended December 31, 2013 relative to the TSR of the Comparable Companies for the same period
Goals:
Threshold – 25th percentile
Target – 50th percentile
Maximum – 80th percentile
Rationale:
Same as for one-year TSR, but we place greater weight on three-year TSR performance to reflect our focus on long-term stockholder value and mitigate the impact of temporary fluctuations in our stock price that are not present over longer time periods.

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Metric:
Net debt to adjusted pro forma EBITDA as of December 31, 2013
Goals:
Threshold – 6.00x
Target – 5.75x
Maximum – 5.50x
Rationale:
Net debt to adjusted pro forma EBITDA reflects the strength of our balance sheet and our ability to generate sufficient earnings to meet our debt obligations. A strong balance sheet — one element of our comprehensive risk management program — is especially important for REITs, which are required to distribute to stockholders a substantial portion of their annual income. By maintaining financial strength, we are able to preserve stockholder value, particularly during periods of economic decline, and create additional value for stockholders by continuing to execute on our acquisition strategy.
Metric:
Qualitative evaluation of specific performance factors subject to Compensation Committee and Board discretion. Focus areas are selected to drive long-term stockholder value and discourage excessive risk-taking with the ability to recognize individual contributions.
Focus Areas:
Relative TSR (most important factor for 2013)
High Importance
for 2013
Capital Markets Efficiency
Enterprise Risk Management
External Growth
Maintaining a High-Performance Team
Optimize Same-Store Cash Flow Growth
Results Driven Culture of Excellence & Collaboration
 
 
Medium Importance
for 2013
Effective Communication & Sound Decision Making
Effective External Stakeholder Relationships
 
Dispositions, Loan Repayments & Capital Recycling
 
Management of Special Situations
 
Succession Planning & Personnel Development
 
Values, Reputation & Industry Leadership
 
 
 
 
Lower Importance
for 2013
Effective Integration of Acquired Organizations
 
IT/Systems
 
Process Effectiveness & Continuous Improvement
 
Actual Performance.    In the first quarter of 2014, the Compensation Committee and the independent members of the Board carefully evaluated each Named Executive Officer’s performance with respect to the pre-established performance metrics under the 2013 long-term incentive plan in the context of the macroeconomic environment and conditions in the healthcare REIT industry to determine the earned value of each Named Executive Officer’s award, if any, within the applicable award opportunity range.

36


Our performance with respect to the quantitative performance metrics (50%) is summarized below:
QUANTITATIVE PERFORMANCE METRICS (50%)
One-Year Relative TSR (15%): For the year ended December 31, 2013, our TSR of -7.6% ranked us 13th out of the 16 Comparable Companies, just below the threshold performance goal. This performance level resulted in no award for this metric.
Three-Year Relative TSR (20%):  For the three-year period ended December 31, 2013, our compound annual TSR of +7.4% ranked us 10th out of the 16 Comparable Companies, above the threshold performance goal and slightly below the target performance goal. This performance level resulted in a below target award for this metric.
Net Debt to Adjusted Pro Forma EBITDA (15%):  As of December 31, 2013, our net debt to adjusted pro forma EBITDA was 5.54x, slightly below the maximum performance goal and well above the target performance goal. This performance level resulted in a below maximum award for this metric.
In evaluating the specific performance factors under the qualitative portion (50%) of the 2013 long-term incentive plan, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board determined that our Named Executive Officers had achieved near maximum performance overall based on our strong financial and operational performance, while also giving consideration to our relative TSR performance, which was below the median of our peer group for the one-year period ended December 31, 2013 and substantially at the median of our peer group for the three-year period then ended due, in part, to changes in monetary policy and interest rate expectations that disproportionately affected the trading prices of the large-cap healthcare REITs’ common stock in 2013. Based on this evaluation of the performance factors, including TSR for medium- and long-term periods, the Compensation Committee and the independent members of the Board determined to award less than maximum performance on the qualitative portion of the long-term incentive awards in 2013, emphasizing strong alignment with the plan’s objective of creating and maintaining stockholder value. Accordingly, after adjustments to reflect individual contributions to our performance, the Compensation Committee and the independent members of the Board determined that the Named Executive Officers had earned between 76% and 92% of their respective maximum opportunities on the qualitative portion of the 2013 long-term incentive awards.
In determining that we had achieved near maximum performance overall with respect to the specific performance factors under the qualitative portion of the long-term incentive plan, the Compensation Committee and the independent members of the Board did not assign a specific weight to any single factor, but grouped the performance factors together based on relative importance and carefully considered our performance and accomplishments with respect to each factor, which are summarized below. The Compensation Committee and the independent members of the Board evaluated many of these factors by reference to objective measures of our performance.
HIGH IMPORTANCE PERFORMANCE FACTORS FOR 2013
Relative TSR; Capital Markets Efficiency; Enterprise Risk Management; External Growth; Maintaining a High-Performance Team; Optimize Same-Store Cash Flow Growth; Results Driven Culture of Excellence & Collaboration
Accomplishments:
ü    Our TSR for the one-year period ended December 31, 2013 was below the median of our peer group and our TSR for the three-year period then ended was substantially at the median of our peer group; however, we ranked first in compound annual TSR among the large-cap healthcare REITs for each of the one-, five- and ten-year periods ended December 31, 2013 (-7.6%, +16.6% and +15.4%, respectively) and two of three for the three-year period ended December 31, 2013 (+7.4%)
ü Issuance of $1.6 billion aggregate principal amount of senior notes at weighted average interest rate of 3.3% and weighted average initial maturity of 13.6 years; Entrance into new $3.0 billion unsecured credit facility, which extended maturities and reduced spreads; Ratings upgrades from Moody’s and S&P
ü Strong same-store cash flow growth; Growth in seniors housing operating portfolio same-store NOI of 5.6%; Favorable agreements with Kindred to extend the leases at a higher rental rate with respect to 48 of the 108 licensed healthcare assets whose lease terms were originally scheduled to expire on April 30, 2015
ü    Total acquisitions of approximately $2.3 billion during 13-month period ended December 31, 2013; improved our private pay assets to 84% of our portfolio
ü    Implementation of business impact analysis of critical business processes; Enhanced processes and procedures for regular risk assessment and mitigation; Increased enterprise training opportunities and improved systems
ü    Targeted project assignments for high-performing employees; Establishment of new development processes and training opportunities
ü    Established inter-department initiatives and deal teams to optimize outcomes; Promoted consistent recruiting and hiring through interview training; Successful continuation of employee on-boarding and training processes

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MEDIUM IMPORTANCE PERFORMANCE FACTORS FOR 2013
Effective Communication & Sound Decision Making; Effective External Stakeholder Relationships; Dispositions, Loan Repayments & Capital Recycling; Management of Special Situations; Succession Planning & Personnel Development; Values, Reputation & Industry Leadership
Accomplishments:
ü Opportunistic capital raises and debt repayments that strengthened liquidity, reduced secured debt and lowered aggregate interest burden
ü    Improvement in content and style of all-employee communications; Build out, restructuring and consolidation of certain IT, Asset Management and Accounting functions to support enterprise growth
ü    Broad outreach to institutional investors in connection with annual meeting; Organized property tours with investors in Arizona and California
ü    Asset sales and loan repayments of $358 million and various lease renewals and modifications
ü Named one of the World’s Most Admired Real Estate Companies by Fortune magazine and one of Healthcare’s Hottest 40 of the Industry’s Fastest Growing Firms by Modern Healthcare; Recognition of Ms. Cafaro by being voted to the Institutional Investor All-American Executive Team for the third time in four years
LOWER IMPORTANCE PERFORMANCE FACTORS FOR 2013
Effective Integration of Acquired Organizations; IT/Systems; Process Effectiveness & Continuous Improvement
Accomplishments:
ü    Finalized integration with Cogdell Spencer (acquired in 2012); 16 acquired seniors housing communities successfully transitioned and integrated into Atria platform
ü    Completed expansion of IT department with recruitment and on-boarding of new team members; Improved system availability, data security and scalability of IT infrastructure
ü    Hired Director of Process Improvements; Identified and refined process improvements to Human Resources processes; Enhanced Asset Management centralized data tracking system
Earned Awards.    Based on the foregoing, in January 2014, the Compensation Committee and, in the case of our Chief Executive Officer, the independent members of the Board approved 2013 long-term incentive awards ranging from 63% to 71% of the Named Executive Officers’ respective maximum award opportunities. For 2013, long-term incentive awards consisted of equity awards in the form of stock options and shares of restricted stock granted pursuant to our 2012 Incentive Plan. The Compensation Committee determined that 70% of the value of the earned 2013 long-term equity incentive awards should be granted in the form of shares of restricted stock and 30% should be granted in the form of stock options. The Compensation Committee believes that restricted stock, which is the most prevalent form of long-term incentive compensation among the Comparable Companies, provides a stronger incentive to create and preserve long-term stockholder value and, therefore, weighted the 2013 long-term incentive awards more heavily toward restricted stock.
The long-term incentive awards granted to our Named Executive Officers in January 2014 for 2013 performance vest in three equal annual installments, beginning on the date of grant, except that Mr. Schweinhart’s long-term equity incentive award will vest in a single installment on the third anniversary of the grant date. The stock options granted to our Named Executive Officers in January 2014 for 2013 performance are subject to a ten-year term, and the stock option exercise price is the closing price of our common stock on the date of grant.
Shares of restricted stock and stock options are granted to our Named Executive Officers, other than the Chief Executive Officer, on the date that the Compensation Committee meets to review our performance and determine the value of the long-term equity incentive awards. Shares of restricted stock and stock options are granted to our Chief Executive Officer on the date that the independent members of the Board meet to review and approve the Compensation Committee’s recommendations with respect to the value of the Chief Executive Officer’s long-term equity incentive award. Typically, these meetings of the Compensation Committee and the independent members of the Board are held on the same day.
Unlike other companies that grant equity awards on a prospective basis prior to performance, our long-term incentive plan is backward-looking such that equity awards are granted following the satisfaction of specified performance goals. Similar to our annual cash incentive awards, the grant and value of our long-term equity incentive awards are approved at the beginning of each fiscal year and determined solely by performance achieved through the preceding fiscal year. If threshold performance has not been achieved with respect to a performance goal for a particular performance period, the portion of the long-term incentive awards based on that performance goal is not granted for that period. Therefore, at the time of their grant, our long-term equity incentive awards have been fully earned and are not subject to additional performance-based vesting requirements. While these awards do vest over multiple years to promote retention and

38


alignment with stockholder value, the Compensation Committee and the independent members of the Board believe that the imposition of additional vesting requirements based on future performance would be inequitable and would hinder the competitiveness of our executive compensation program. Due to the retrospective nature of our long-term incentive plan and the SEC’s disclosure rules, the Named Executive Officers’ 2013 long-term incentive awards do not appear in the 2013 Summary Compensation Table, but will be reflected in next year’s Summary Compensation Table as restricted stock and stock option awards granted in 2014.
Other Benefits and Perquisites
Our Named Executive Officers are generally eligible to participate in the same benefit programs that we offer to other employees. In 2013, we provided the following significant benefits to our employees, including our Named Executive Officers:
Health, dental and vision insurance (of which we paid 90% of the premium in 2013);
Short-term disability, long-term disability and life insurance coverage (at no cost to the employee); and
Participation in a 401(k) plan (to which we made matching contributions up to 3.5% of the employee’s base salary, up to the federal limit, in 2013).
We believe these benefits are competitive with overall market practices. In addition, we provide certain limited perquisites and other benefits to attract and retain superior employees for key positions. The only perquisites and benefits provided to our Named Executive Officers in 2013 that were not otherwise available to all employees consisted of: supplemental disability and life insurance coverage for Ms. Cafaro; and reimbursement for the cost of parking and membership in certain professional and social organizations for Mr. Lillibridge. The Compensation Committee periodically reviews the perquisites and other personal benefits provided to each Named Executive Officer and has determined that they are consistent with current market practice. Except for the eligibility to participate in, and our matching contributions to, the 401(k) plan, as described above, we do not provide our Named Executive Officers with any retirement benefits.
Severance Benefits
Our Named Executive Officers are entitled to receive severance benefits under existing agreements upon certain qualifying terminations of employment (subject to any required payment delay pursuant to Section 409A of the Code). Generally, these severance arrangements support executive retention and continuity of management and provide replacement income if an executive is terminated involuntarily other than for cause.
None of our executive officers is entitled to severance benefits solely upon a change of control of our company. Moreover, our Chief Executive Officer is not entitled to any tax gross-ups with respect to payments made in connection with a change of control. Although longstanding legacy arrangements with Messrs. Lewis, Riney and Schweinhart, which have not been amended for several years (other than the amendment of Mr. Riney’s change-in-control severance agreement in 2011 to eliminate a “modified single trigger” change of control provision), do provide certain tax gross-ups with respect to payments made in connection with a change of control, no such gross-up payment would have been payable to any of our Named Executive Officers under the scenarios and assumptions presented under “—Potential Payments Upon Termination or Change of Control” in this Proxy Statement. At the time we entered into each such arrangement, the Compensation Committee considered the potential severance benefits, including any potential tax gross-up, to be necessary to attract and retain top executives and, based on the market compensation analyses of the Compensation Committee’s independent compensation consultant, to be consistent with then current competitive market practices. Our employment agreement with Mr. Lillibridge, entered into in 2010, does not provide for any tax gross-up payments in connection with a change of control.
In 2013, consistent with our commitment to strong corporate governance and responsiveness to our stockholders, the Board adopted a policy against tax gross-up arrangements, which formalized our existing practice of not entering into new tax gross-up arrangements with our executive officers.
Tax Considerations
Section 162(m) of the Code places a limit of $1 million on the amount of compensation that we may deduct in any year with respect to each Named Executive Officer other than our Chief Financial Officer, unless the compensation is performance-based compensation and meets certain other requirements, as described in Section 162(m) and the related regulations. We may consider qualification for deductibility under Section 162(m) for compensation paid to our Named Executive Officers. The Compensation Committee believes, however, that our executive compensation program should be flexible, maximize our ability to recruit, retain and reward high-performing executives and promote varying corporate goals. Accordingly, the

39


Compensation Committee may approve compensation that exceeds the $1 million limit or does not otherwise meet the requirements of Section 162(m).
Minimum Share Ownership Guidelines for Executive Officers
Our minimum share ownership guidelines require each executive officer to maintain a minimum equity investment in our company based upon a multiple (five times, in the case of the Chief Executive Officer, and three times, in the case of all other executive officers) of his or her base salary at the time his or her compliance with the guidelines is evaluated. Each executive officer must achieve the minimum equity investment within five years from the date he or she first becomes subject to the guidelines and, until such time, must retain at least 60% of the shares of our common stock granted to the executive officer or purchased by the executive officer through the exercise of stock options. The independent members of the Board annually review each executive officer’s compliance with the guidelines as of July 1. All of our executive officers are currently in compliance with the minimum share ownership guidelines. Except as described above, our minimum share ownership guidelines and our 2012 Incentive Plan do not require a minimum holding period for stock options, restricted stock or other equity grants.
Recoupment Policy
In 2014, the Board adopted a Policy for Recoupment of Incentive Compensation that applies to our executive officers. Pursuant to this policy, if we are required to prepare an accounting restatement due to our material noncompliance with any financial reporting requirement, then the Compensation Committee may require any executive officer to repay to Ventas all or any portion of any incentive compensation received by the executive officer during the preceding three-year period that exceeds the amount he or she would have received if the incentive compensation had been calculated based on the restated financial results.
Following the SEC’s adoption of final rules regarding executive compensation recoupment policies pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we will consider and adopt amendments to our recoupment policy, as needed to comply with the final rules.


40


Compensation Tables
2013 Summary Compensation Table
The following table sets forth the compensation awarded or paid to, or earned by, each of our Named Executive Officers during 2013, 2012 and 2011, which includes equity incentive awards granted in each such year that were earned for performance in the prior year (for supplemental information regarding the total direct compensation earned by the Named Executive Officers for 2013 performance, see “Compensation Discussion and Analysis” above):
Name and Principal Position
Year
Salary
($)
Bonus
($)
Stock
Awards(1)
($)
Option
Awards(1)
($)
Non-Equity
Incentive Plan
Compensation(2)
($)
All Other
Compensation(3)
($)
Total
($)
D. Cafaro
Chairman of the Board and
Chief Executive Officer
2013
$
1,000,000

$

$
4,158,000

$
1,782,000

$
2,974,001

$
46,040

$
9,960,041

2012
1,000,000


4,611,600

1,976,400

3,480,000

71,319

11,139,319

2011
915,000


12,567,500

1,957,500

3,019,500

39,331

18,498,831

R. Lewis
President
2013
618,000


1,869,000

801,000

1,293,165

9,497

4,590,662

2012
600,000


1,725,570

739,530

1,320,000

39,537

4,424,637

2011
498,000


1,617,675

693,280

1,064,475

7,391

3,880,821

T. Lillibridge
Executive Vice President,
Medical Property Operations; President and Chief Executive Officer, Lillibridge Healthcare 
Services, Inc.
2013
412,000


638,400

273,600

844,600

31,495

2,200,095

2012
400,000


630,000

270,000

832,821

39,434

2,172,255

2011
375,000


211,726

90,740

599,574

30,549

1,307,589

T.R. Riney
Executive Vice President,
Chief Administrative Officer
and General Counsel
2013
463,500


850,500

364,500

957,128

9,497

2,645,125

2012
450,000


800,100

342,900

924,000

9,238

2,526,238

2011
381,000


777,000

333,000

760,095

7,391

2,258,486

R. Schweinhart
Executive Vice President
and Chief Financial Officer
2013
463,500


756,000

324,000

924,683

9,497

2,477,680

2012
450,000


854,700

366,300

868,875

9,238

2,549,113

2011
407,000


829,500

355,500

782,051

7,391

2,381,442

(1)
The amounts shown in the Stock Awards and Option Awards columns reflect the full grant date fair value of the restricted stock and stock options granted to our Named Executive Officers in 2013, 2012 and 2011 for prior-year performance, calculated pursuant to FASB guidance relating to fair value provisions for share-based payments. The amount shown in the Stock Awards column for Ms. Cafaro in 2011 includes the $8 million special equity incentive award granted to her in March 2011 that vests over five years to support her continued retention and in recognition of her superior long-term performance and contributions to our success. See Note 12 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of the relevant assumptions used in calculating grant date fair value. For further information on these awards, see the 2013 Grants of Plan-Based Awards Table and 2013 Outstanding Equity Awards at Fiscal Year-End Table included in this Proxy Statement. In accordance with SEC rules, restricted stock and stock options granted in 2014 to our Named Executive Officers for 2013 performance are not shown in the 2013 Summary Compensation Table.
(2)
The amounts shown in the Non-Equity Incentive Plan Compensation column reflect annual cash incentive awards earned by our Named Executive Officers for performance in 2013, 2012 and 2011.
(3)
The amounts shown in the All Other Compensation column for 2013 include: supplemental disability insurance premiums (in the amount of $32,546) and supplemental life insurance premiums paid on behalf of Ms. Cafaro; group term life insurance premiums paid on behalf of our Named Executive Officers; reimbursement for the payment of taxes relating to such group term life insurance for Ms. Cafaro; our matching contributions to the Named Executive Officers’ 401(k) plan accounts; and reimbursement for the cost of parking and membership in certain professional and social organizations for Mr. Lillibridge.



41


2013 Grants of Plan-Based Awards Table
The following table provides additional information relating to grants of plan-based awards made to our Named Executive Officers during 2013:
 
 
Estimated Possible Payouts Under
 Non-Equity Incentive Plan Awards
Estimated Future Payouts Under
Equity Incentive Plan Awards
All
Other
Stock
Awards:
Number of
Shares of
Stock or
Units(1)
(#)
All Other
Option
Awards:
Number of
Securities
Underlying
Options(2)
(#)
Exercise
or Base
Price of
Option
Awards(3)
($/Sh)
Grant Date
Fair Value
of Stock
and
Option
Awards(4)
($)
Name
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
($)
Target
($)
Maximum
($)
D. Cafaro

(5)
$
800,000

$
1,600,000

$
3,600,000

$

$

$



$

$

 

(6)



2,250,000

4,500,000

7,500,000





 
1/23/2013

(7)






63,066



4,158,000

 
1/23/2013

(7)







175,739

65.93

1,782,000

R. Lewis

(5)
463,500

927,000

1,390,500








 

(6)



1,019,700

2,039,400

3,059,100





 
1/23/2013

(7)






28,348



1,869,000

 
1/23/2013

(7)







78,994

65.93

801,000

T. Lillibridge

(5)
288,400

576,800

865,200








 

(6)



412,000

824,000

1,236,000





 
1/23/2013

(7)






9,682



638,400

 
1/23/2013

(7)







26,982

65.93

273,600

T.R. Riney

(5)
324,450

648,900

973,350








 

(6)



463,500

927,000

1,390,500





 
1/23/2013

(7)






12,900



850,500

 
1/23/2013

(7)







35,946

65.93

364,500

R. Schweinhart

(5)
324,450

648,900

973,350








 

(6)



463,500

927,000

1,390,500





 
1/23/2013

(7)






11,466



756,000

 
1/23/2013

(7)







31,952

65.93

324,000

(1)
The amounts shown reflect shares of restricted stock granted to our Named Executive Officers. These shares vest in three equal annual installments beginning on the date of grant.
(2)
The stock options vest in three equal annual installments beginning on the date of grant.
(3)
The stock option exercise price equals the closing price of our common stock on the date of grant.
(4)
The amounts shown reflect the full grant date fair value of the awards calculated pursuant to FASB guidance regarding fair value provisions for share-based payments. See Note 12 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of the relevant assumptions used in calculating grant date fair value.
(5)
The amounts shown represent each Named Executive Officer’s threshold, target and maximum annual cash incentive opportunities for performance in 2013. These opportunities were approved by the Compensation Committee and, in the case of the Chief Executive Officer, by the independent members of the Board in December 2012. The actual amount of each Named Executive Officer’s award is based on the achievement of certain performance metrics as discussed in our CD&A. The annual cash incentive awards earned by our Named Executive Officers for performance in 2013 were granted in January 2014 and paid during the first quarter of 2014. Such earned awards are shown in the “Non-Equity Incentive Plan Compensation” column of the 2013 Summary Compensation Table.
(6)
The amounts shown represent each Named Executive Officer’s threshold, target and maximum long-term incentive opportunities for performance in 2013. These opportunities were approved by the Compensation Committee and, in the case of the Chief Executive Officer, by the independent members of our Board in December 2012. The actual amount of each Named Executive Officer’s award is based on the achievement of certain performance metrics as discussed in our CD&A. The long-term incentive awards earned by our Named Executive Officers for performance in 2013 were granted in January 2014 in the form of restricted stock (70%) and stock options (30%). Such earned awards will be reported as restricted stock and stock option grants made during 2014 and are not included in the 2013 Grants of Plan-Based Awards Table above; however, such awards are shown in the table under “Earned Compensation of Our Named Executive Officers for 2013, 2012 and 2011 Performance” in the CD&A.
(7)
The amounts shown reflect the long-term incentive awards granted as restricted stock and stock options to our Named Executive Officers in January 2013 for 2012 performance.


42


2013 Outstanding Equity Awards at Fiscal Year-End Table
The following table sets forth information regarding equity-based awards granted to our Named Executive Officers that were outstanding at December 31, 2013:
 
Option Awards  
 
Stock Awards  
 
Number of Securities Underlying Unexercised Options Exercisable(#)
Number of Securities Underlying Unexercised Options Unexercisable(1)
(#)
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options
(#)
 
Option Exercise
Price
($)
 
Option Expiration Date
 
Number of Shares or Units That Have Not Vested (1)
(#)
Market Value of Shares or Units That Have Not Vested(2) ($)
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)
 
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (S)
 
D. Cafaro
89,246



 
$
43.26

 
1/17/2017

 

$


 
$

 
 
428,560



 
41.54

 
1/22/2018

 



 

 
 
17,767



 
28.96

 
1/21/2019

 



 

 
 
171,350



 
44.56

 
1/20/2020

 



 

 
 
171,906



 
53.46

 
1/24/2021

 



 

 
 
121,707

60,853


 
55.69

 
1/18/2022

 



 

 
 
58,580

117,159


 
65.93

 
1/23/2023

 



 

 
 



 

 

 
161,406

9,245,336


 

 
 



 

 

 


58,812

(3)
3,622,850

(3)
 


354,972

(3)
61.60

(3)
1/29/2024

(3)



 
1,552,650

(3)
R. Lewis
45,540

22,770


 
55.69

 
1/18/2022

 



 

 
 
26,332

52,662


 
65.93

 
1/23/2023

 



 

 
 



 

 

 
29,226

1,674,065


 

 
 



 

 

 


21,811

(3)
1,343,612

(3)
 


131,649

(3)
61.60

(3)
1/29/2024

(3)



 
575,834

(3)
T. Lillibridge
7,962



 
53.50

 
1/20/2021

 



 

 
 
16,626

8,313


 
55.69

 
1/18/2022

 



 

 
 
8,994

17,988


 
65.93

 
1/23/2023

 



 

 
 



 

 

 
65,785

3,768,165


 

 
 



 

 

 


9,930

(3)
611,696

(3)
 


59,935

(3)
61.60

(3)
1/29/2024

(3)



 
262,156

(3)
T.R. Riney
10,161



 
44.56

 
1/20/2020

 



 

 
 
29,220



 
53.50

 
1/20/2021

 



 

 
 
21,116

10,557


 
55.69

 
1/18/2022

 



 

 
 
11,982

23,964


 
65.93

 
1/23/2023

 



 

 
 



 

 

 
13,389

766,922


 

 
 



 

 

 


11,171

(3)
688,158

(3)
 


67,426

(3)
61.60

(3)
1/29/2024

(3)



 
294,925

(3)
R. Schweinhart
82,140



 
41.54

 
1/22/2018

 



 

 
 
39,823



 
28.96

 
1/21/2019

 



 

 
 
28,816



 
44.56

 
1/20/2020

 



 

 
 
31,195



 
53.50

 
1/20/2021

 



 

 
 
22,557

11,278


 
55.69

 
1/18/2022

 



 

 
 
10,651

21,301


 
65.93

 
1/23/2023

 



 

 
 



 

 

 
12,759

730,836


 

 
 



 

 

 


10,513

(3)
647,602

(3)
 


63,453

(3)
61.60

(3)
1/29/2024

(3)



 
277,544

(3)

43


(1)
Outstanding option and restricted stock awards vest in three equal annual installments beginning on the date of grant and outstanding options expire on the tenth anniversary of the date of grant, except for: 152,934 shares of restricted stock granted to Ms. Cafaro on March 22, 2011, which vest in five equal annual installments beginning on March 22, 2012; 10,208 stock options granted to Mr. Lewis on March 16, 2011, which expire on January 20, 2021; and 111,122 shares of restricted stock granted to Mr. Lillibridge on July 1, 2010, which vest 15%, 15%, 20%, 25% and 25% on the first, second, third, fourth and fifth anniversaries, respectively, of the date of grant. Accordingly, the options and shares of restricted stock shown in these columns vest (or have vested) as follows:
 
 
Ms. Cafaro
Mr. Lewis
Mr. Lillibridge
Mr. Riney
Mr. Schweinhart
 
 
Options
Shares
Options
Shares
Options
Shares
Options
Shares
Options
Shares
2014
January 18
60,853

27,602

22,770

10,328

8,313

3,770

10,557

4,789

11,278

5,115

January 23
58,580

21,022

26,331

9,449