DEF 14A 1 tm219206-1_def14a.htm DEF 14A tm219206-1_def14a - none - 10.4063365s
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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PIEDMONT OFFICE REALTY TRUST, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
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March 19, 2021
Dear Stockholder:
Attached for your review is a notice of the 2021 Annual Meeting of Stockholders and Proxy Statement for Piedmont Office Realty Trust, Inc. YOUR VOTE IS VERY IMPORTANT. Please respond immediately to help us avoid potential delays and additional expense to solicit votes.
We are asking you to read the enclosed materials and to vote on the election of your board of directors, the ratification of the appointment of our independent registered public accounting firm for fiscal 2021, the approval, on an advisory basis, of the compensation of our named executive officers, and the approval of our Second Amended and Restated 2007 Omnibus Incentive Plan. You will find more detail about these proposals in the attached documents. We ask that you review these documents thoroughly and submit your vote as soon as possible in advance of the annual meeting, which will be held virtually via live webcast on May 11, 2021.
If you have any questions, please call your broker or financial advisor, or contact Piedmont Shareowner Services by calling 866-354-3485 or emailing investor.services@piedmontreit.com. To view our latest regulatory filings and updates, including Form 8-K filings, please visit our website at www.piedmontreit.com.
Thank you for your support and for your prompt vote.
Sincerely,
/s/ C. BRENT SMITH
C. Brent Smith
Chief Executive Officer
Piedmont Office Realty Trust, Inc.

PIEDMONT OFFICE REALTY TRUST, INC.
5565 Glenridge Connector, Suite 450
Atlanta, Georgia 30342

Notice of Annual Meeting of Stockholders
and Proxy Statement

To Be Held May 11, 2021
Dear Stockholder:
On Tuesday, May 11, 2021, Piedmont Office Realty Trust, Inc., a Maryland corporation, will hold its 2021 Annual Meeting of Stockholders (the “Annual Meeting”) virtually via live webcast. The meeting will begin at 11:00 a.m. Eastern daylight time. If you were a registered stockholder of the Company as of the record date you will be able to attend the Annual Meeting, ask a question, and vote online by visiting: www.meetingcenter.io/284334132 (password: PDM2021) and following the instructions on your Notice or proxy card. If you are a beneficial holder and hold your shares through an intermediary, such as a bank or broker, and want to attend the webcast with the ability to ask questions and/or vote, you must register in advance of the Annual Meeting by submitting proof of your proxy power from your broker or bank.
The purpose of this Annual Meeting is to:
(i)
elect eight directors identified in the 2021 proxy statement to hold office for terms expiring at our 2022 annual meeting and until their successors are duly elected and qualified;
(ii)
ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2021;
(iii)
approve, on an advisory basis, the compensation of our named executive officers;
(iv)
approve our Second Amended and Restated 2007 Omnibus Incentive Plan; and
(v)
transact any other business as may properly come before the meeting, or any postponement or adjournment thereof.
Your board of directors has selected March 5, 2021 as the record date for determining stockholders entitled to vote at the meeting.
On March 30, 2021, we will begin mailing our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our 2021 proxy statement and our Annual Report to Stockholders for fiscal 2020, and how to vote online.
Whether or not you plan to attend the Annual Meeting remotely, your vote is very important, and we encourage you to vote promptly. You may vote via a toll-free telephone number or over the Internet. If you received a paper copy of the proxy card by mail, you may sign, date, and mail the proxy card in the envelope provided. Instructions regarding all three methods offered for voting are contained in the proxy card or Notice of Internet Availability of Proxy Materials. If you execute a proxy but later decide, for any reason, to revoke your proxy, you may do so at any time before 11:59 p.m. Eastern daylight time on May 10, 2021. You may also revoke your proxy by voting online prior to the poll closing at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ THOMAS A. MCKEAN
Thomas A. McKean
Associate General Counsel and Corporate Secretary

Atlanta, Georgia
March 19, 2021
Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to Be Held on May 11, 2021: Our 2021 proxy statement and our Annual Report to Stockholders for fiscal 2020 are available at www.envisionreports.com/PDM.

PIEDMONT OFFICE REALTY TRUST, INC
PROXY STATEMENT
2021 ANNUAL MEETING OF STOCKHOLDERS
TABLE OF CONTENTS
Page No.
2021 Proxy Statement at a Glance 1
Proposal 1: Election of Directors 6
11
Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation 13
Proposal 4: Approval of our Second Amended and Restated 2007 Omnibus Incentive Plan 14
Certain Information about Management 24
Information Regarding the Board of Directors and Committees 26
26
26
28
29
29
30
30
30
31
Environmental and Social Management Committees 31
Corporate Social Responsibility 32
Corporate Environmental Responsibility 35
Stockholder Engagement and Outreach 38
Communications with Stockholders or Other Interested Parties 38
Executive Compensation 40
40
44
44
51
51
51
53
53
55
56
58
58
60
60
Director Compensation 61
Equity Compensation Plan Information 62
CEO Pay Ratio 62
Compensation Policies and Practices as they Relate to Risk Management 63
Certain Relationships and Related Transactions 63
Stock Ownership 64
Audit Committee Report 66
Stockholder Proposals 67
Householding 67
Attending the Annual Meeting 67
Other Matters 68
Questions and Answers 69
Appendix A 73

2021 PROXY STATEMENT AT A GLANCE
The summary below highlights information contained elsewhere in this proxy statement. It is only a summary and does not contain all information that you should consider and you should read the proxy statement in its entirety before casting your vote.
Annual Meeting Logistics
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To be held on: May 11, 2021
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At 11:00 a.m. Eastern daylight time
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Webcast address(1):
www.meetingcenter.io/284334132
(password: PDM2021).
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Eligibility to vote: Stockholders of record on March 5, 2021
(1)
If you were a stockholder as of the close of business on March 5, 2021 and hold your shares through an intermediary, such as a bank or broker, you must register in advance to attend the Annual Meeting. To register you must submit proof of your proxy power (legal proxy) reflecting your holdings of our stock, along with your name and email address to Computershare. Registration requests must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern daylight time, on May 3, 2021. You will receive a confirmation email from Computershare of your registration. If you do not have your control number, you may attend as a guest (non-stockholder) but will not have the option to ask questions or vote at the Annual Meeting. Registration requests should be directed to Computershare either: (i) by forwarding the email from your broker, or attaching an image of your legal proxy, to legalproxy@computershare.com; or (ii) by mail at Computershare, Piedmont Office Realty Trust, Inc. Legal Proxy, P.O. Box 43001, Providence, RI 02940-3001.
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Meeting Agenda and Voting Recommendations
Proposal
Board Vote
Recommendation
Page
1.
Elect eight directors nominated by the board of directors for one year terms
FOR ALL
6
2.
Ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2021
FOR
11
3.
Approve, on an advisory basis, executive compensation
FOR
13
4.
Approve our Second Amended and Restated 2007 Omnibus Incentive Plan
FOR
14
1

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Proposal 1: Election of Directors
The board of directors is asking you to elect the eight nominees listed below for terms that expire at the 2022 annual meeting of stockholders or until their successors are duly elected and qualified. Each director nominee will be elected if he or she receives a majority of the votes cast at the 2021 annual meeting (i.e., more votes cast “FOR” than cast “AGAINST”).
Name
Age
Occupation
Year First
Became a
Director
Independent
Board Committees
Kelly H. Barrett 56 Former Senior Vice President – Home
Services, The Home Depot
2016
Yes
Audit*;
Nominating and Governance
Wesley E. Cantrell 86 Former President, Chief Executive Officer and Chairman, Lanier Worldwide
2007
Yes
Nominating and
Governance*; Compensation
Glenn G. Cohen 57 Executive Vice President, Chief Financial Officer and Treasurer, Kimco Realty Corp.
2020
Yes
Audit; Capital
Barbara B. Lang 77 Managing Principal and Chief Executive Officer of Lang Strategies, LLC
2015
Yes
Compensation; Nominating and Governance**
Frank C. McDowell 72 Former President, Chief Executive Officer and Director of BRE Properties, Inc.
2008
Yes
Compensation*;
Nominating and Governance
C. Brent Smith 45 President and Chief Executive Officer,
Piedmont Office Realty Trust, Inc.
2019
No
Jeffrey L. Swope 70 Managing Partner and Chief
Executive Officer, Champion Partners
Ltd.
2008
Yes
Capital*;
Compensation
Dale H. Taysom 72 Former Global Chief Operating Officer, Prudential Real Estate Investors
2015
Yes
Audit; Capital
*
Denotes committee chair;
**
Denotes ESG Sub-Committee Chair
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Proposal 2: Ratify the appointment of Deloitte & Touche LLP as our
independent registered public accounting firm
The board of directors is asking you to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the year ending December 31, 2021. Deloitte & Touche LLP has served as the Company’s independent registered public accounting firm since 2018.
2

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Proposal 3: Approve, on an advisory basis, the compensation of our
named executive officers
The board of directors is asking you to approve, on an advisory basis, the compensation of the Named Executive Officers as disclosed in this proxy statement. We believe our compensation programs are designed to:

attract and retain candidates capable of performing at the highest levels of our industry;

create and maintain a performance-focused culture, by rewarding company and individual performance based upon objective predetermined metrics;

reflect the qualifications, skills, experience and responsibilities of each named executive officer;

link incentive compensation levels with the creation of stockholder value;

align the interests of our executives and stockholders by creating opportunities and incentives for executives to increase their equity ownership in us; and

motivate our executives to manage our business to meet and appropriately balance our short- and long-term objectives.
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Proposal 4: Approve our Second Amended and Restated 2007
Omnibus Incentive Plan
The board of directors is asking you to approve the amendment and restatement of the Piedmont Office Realty Trust, Inc. Amended and Restated 2007 Omnibus Incentive Plan (the “2007 Omnibus Incentive Plan” and, as proposed to be amended and restated, the “Piedmont Office Realty Trust, Inc. Second Amended and Restated 2007 Omnibus Incentive Plan,” or the “A&R Incentive Plan”) to (i) increase the number of shares of common stock available for issuance by 3,000,000 shares from 5,666,667 to 8,666,667, (ii) extend the term to March 17, 2031, and (iii) make certain other amendments to the 2007 Omnibus Incentive Plan. The board of directors approved the A&R Plan on March 18, 2021, subject to stockholder approval. For a full description of the A&R Incentive Plan, see Proposal 4.
3

Compensation and Governance Practices:
What We Do
What We Don’t Do

DO require stockholder approval in the event a staggered board is ever proposed
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NO staggered board

DO have a board comprised of a super-majority of independent directors. Seven of our eight directors currently serving are independent in accordance with New York Stock Exchange (“NYSE”) listing standards and our Corporate Governance Guidelines.
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NO compensation or incentives that encourage risks reasonably likely to have a material adverse effect on the Company
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NO tax gross ups for any executive officers

DO have a separate Board Chair and Chief Executive Officer.
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NO re-pricing or buyouts of underwater stock options

DO require a majority for election of directors in uncontested elections.
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NO reportable transactions with any of our directors or current executive officers

DO permit stockholders to amend the bylaws
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NO hedging or pledging transactions involving our securities

DO restrict board terms to 15 years
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NO guaranteed cash incentive compensation or equity grants with executive officers

DO require an annual performance evaluation of our board
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NO long-term employment contracts with executive officers

DO align pay and performance by linking a majority of total compensation to the achievement of a balanced mix of Company and individual performance criteria tied to operational and strategic objectives established at the beginning of the performance period by the Compensation Committee and the board
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NO supplemental executive benefits to our NEOs

DO deliver a substantial portion of the value of equity awards in multi-year performance shares. For 2020, 50% of our executive officers equity award opportunity was tied to our Company’s 3-year total stockholder return relative to our peer group

DO maintain stock ownership guidelines for directors and executive officers

DO include clawback provisions in agreements with our CEO, CFO and all other officers that are subject to employment agreements with us

DO conduct annual assessments of compensation at risk

DO have a Compensation Committee comprised solely of independent directors

DO retain an independent compensation consultant that reports directly to the Compensation Committee and performs no other services for management

DO cap incentive compensation. Incentive awards include minimum and maximum performance thresholds with funding that is based on actual results measured against the pre-approved goals that are clearly defined.

DO have a board sub-committee focused upon important Environmental, Social, and Governance (“ESG”) issues that meets quarterly with management and reports to the board
4

Focus on Performance-Based Pay

80% of our NEO’s opportunity under our 2020 short-term cash incentive compensation program is tied to specific quantitative performance metrics derived from critical components of our annual business plan.

100% of our NEO’s opportunity under the performance share component of our 2020 long-term equity incentive compensation program is tied to our total stockholder return over a three-year performance period relative to a pre-determined peer group.

75% of our NEO’s opportunity under the deferred stock unit component of our 2020 long-term equity incentive compensation program is tied to quantitative performance metrics derived from critical components of our annual business plan.

The majority of our chief executive officer and other named executive officers’ (“NEO’s”) compensation opportunities during 2020 was performance-based and at risk:
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5

PROPOSAL 1: ELECTION OF DIRECTORS
Our current eight member board of directors is comprised of seven independent members and our Chief Executive Officer.
At the Annual Meeting, you will vote on the election of eight directors. Each nominee elected will serve as a director until the next annual meeting of stockholders and until his or her successor is duly elected and qualified, or until his or her death, resignation or removal from office. Each of the following nominees has served as a director since our 2020 annual meeting of stockholders. Each nominee has been nominated for re-election at the Annual Meeting by our board of directors in accordance with our established nomination procedures discussed in this proxy statement.
Your board of directors unanimously recommends a vote “FOR” all eight nominees
listed for election as directors.
Nominee
Age
Director Since
Information About Nominee
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Frank C. McDowell,
Board Chair*
72
2008, Board Chair since 2017
Former President, Chief Executive Officer and Director of BRE Properties, Inc. (formerly NYSE: BRE), a self-administered equity REIT, from 1995 until his retirement in 2004. Prior to joining BRE, Mr. McDowell was Chair and Chief Executive Officer of Cardinal Realty Services, Inc., an owner/operator of multifamily housing. Before joining Cardinal Realty, Mr. McDowell had served as head of real estate at First Interstate Bank of Texas and Allied Bancshares. Additionally, Mr. McDowell was a licensed CPA in Texas for twenty years.
Mr. McDowell brings to the board extensive experience as a Chief Executive Officer of a public company within the real estate sector. He is very familiar with the public markets, including dealing with analysts and institutional investors as well as an in-depth working knowledge of various financial structures and the capital raising process. In addition he has expertise in strategic planning, establishing and managing compensation for senior real estate executives, and in other financial matters given his background as a CPA. These skills make him well suited to serve as Chair of the Board and Compensation Committee, as well as a member of the Nominating and Corporate Governance Committee.
6

Nominee
Age
Director Since
Information About Nominee
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Kelly H. Barrett,
Director*
56
2016
Prior to her retirement in December 2018, Ms. Barrett was employed by The Home Depot (NYSE:HD) for sixteen years, commencing in 2003, serving in various roles including Senior Vice President — Home Services, Vice President Corporate Controller, Senior Vice President of Enterprise Program Management, and Vice President of Internal Audit and Corporate Compliance. Prior to her employment by The Home Depot, Ms. Barrett was employed by Cousins Properties Incorporated for eleven years in various financial roles, ultimately including that of Chief Financial Officer. During that time, she was very active in the National Association of Real Estate Investment Trusts (NAREIT) as an Accounting Committee Co-Chairperson and member of the Best Financial Practices Council as well as the Real Estate Group of Atlanta. She has been a licensed CPA in Georgia for over thirty years. In addition, Ms. Barrett currently serves as a director and Audit Committee Chair of The Aaron’s Company, Inc. (NYSE:AAN), and Americold Realty Trust (NYSE:COLD) and served as a director of State Bank Financial Corporation (NASDAQ: STBZ) from August of 2011 to May of 2016.
Ms. Barrett brings over 30 years of leadership and financial management expertise to the board. As a former member of NAREIT’s Accounting Committee and Best Financial Practices Council and former chief financial officer of an office REIT, she is well qualified to provide oversight and guidance for Piedmont and serve as Chair of the Audit Committee and an audit committee financial expert.
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Wesley E. Cantrell,
Director*
86
2007
Former President, Chief Executive Officer and Chair of Lanier Worldwide, Inc. (formerly NYSE: LR), a global document management company from 1955 until his retirement in 2007. Formerly served as a director and Chair of the Nominating and Corporate Governance Committee for AnnTaylor Stores Corporation (NYSE: ANN), Oxford Industries, Inc. (NYSE: OXM), and First Union National Bank of Atlanta.
Mr. Cantrell brings to the board broad senior management expertise and experience with corporate governance practices for publicly-traded companies to his role as Chair of our Nominating and Corporate Governance Committee. As a member of the Horatio Alger Association of Distinguished Americans and an author of books on integrity and ethical decision-making in business, Mr. Cantrell offers unique insight into issues influencing our company culture and business practices.
7

Nominee
Age
Director Since
Information About Nominee
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Glenn G. Cohen*
57
2020
Executive Vice President, Chief Financial Officer & Treasurer of Kimco Realty Corp. (NYSE:KIM), one of North America’s largest publicly traded REIT owners and operators of open-air shopping centers. Prior to his appointment as Kimco’s Chief Financial Officer in 2010, Mr. Cohen served in various other positions at Kimco including Treasurer, as well as Director of Accounting and Taxation, since joining them in 1995. From 2016 to 2018, Mr. Cohen served as a director and member of the Audit Committee of Quality Care Properties, Inc. (formerly NYSE: QCP). He is a CPA and member of NAREIT and the International Council of Shopping Centers (ICSC).
Mr. Cohen brings approximately 25 years of leadership and financial management experience to the board. As a Chief Financial Officer, Mr. Cohen is responsible for Kimco’s financial and capital strategy and oversees the accounting, financial reporting and planning, tax, treasury and capital market activities for another large, publicly traded REIT, making him well qualified to provide oversight and guidance for Piedmont and to serve as an Audit Committee member and financial expert and member of the Capital Committee.
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Barbara B. Lang,
Director*
77
2015
Managing Principal & Chief Executive Officer of Lang Strategies, LLC, a business consulting firm, located in Washington, D.C. Ms. Lang served as president and Chief Executive Officer of the D.C. Chamber of Commerce from 2002 to 2014 and prior to joining the Chamber was the Vice President of Corporate Services and Chief Procurement Officer for Fannie Mae. Ms. Lang also had a long career with IBM where she served in several management positions in finance, administration and product forecasting. She has received numerous awards and accolades throughout her career, including being twice named one of Washingtonian Magazine’s 150 Most Powerful People in the Washington, D.C. region, Business Leader of the Year by the District of Columbia Building Industry Association and a Lifetime Legacy Award from Washington Business Journal. Ms. Lang also served on the board of Cardinal Financial Corporation (NASDAQ: CFNL) from 2014 to 2017 and currently serves on the board of the Sibley Hospital Foundation. Ms. Lang is the author of Madame President: Leadership Lessons from the Top of the Ladder, a book on leadership skills, particularly focused upon the challenges of race and gender facing African-Americans and women in corporate and governmental America.
Ms. Lang brings to the board a broad personal network of corporate and governmental contacts in one of the Company’s key operating markets. In addition, she has extensive senior management expertise with both private corporations and governmental agencies. Ms. Lang’s diverse business, financial, and governance expertise, as well as her life experience breaking leadership “glass ceilings” for women and minorities, make her highly qualified to serve on the Compensation and Nominating and Corporate Governance Committees and as Chair of the ESG Committee (a sub-committee of the Nominating and Corporate Governance Committee). The Company’s annual ESG report is available on the Company’s website, www.piedmontreit.com.
8

Nominee
Age
Director Since
Information About Nominee
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C. Brent Smith,
President, Chief Executive Officer, and Director
45
2019
President and Chief Executive Officer since July of 2019. For four years prior to his promotion to Chief Executive Officer, Mr. Smith served as our Chief Investment Officer. In addition until February of 2019, Mr. Smith served as EVP of Piedmont’s Northeast Region where he was responsible for all leasing, asset management, acquisition, disposition and development activity for the Company’s over three million square foot Boston and New York/New Jersey portfolio. Prior to joining Piedmont in 2012, Mr. Smith served as an Executive Director with Morgan Stanley in the Real Estate Investment Banking division advising a wide range of public and private real estate clients. He brings approximately 15 years of corporate- and property-level real estate transaction experience across both North America and Asia.
He brings to the board approximately 15 years of corporate- and property-level global real estate capital markets experience, has a detailed working knowledge of each of Piedmont’s operating markets, experience in handling some of Piedmont’ largest and most complex tenants and properties, as well as negotiating complex purchase and sale agreements and mergers and acquisitions transactions, in addition to working relationships with each of Piedmont’s investor analysts. Furthermore, his extensive network of private and public pension equity investors and top-tier investment bankers is invaluable to the Company.
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Jeffrey L. Swope,
Director*
70
2008
Founder, Managing Partner and Chief Executive Officer of Champion Partners Ltd., a nationwide developer and investor of office, industrial and retail properties, since 1991. Co-founded Centre Development Co., Inc, and Champion Private Equity, a private real estate capital and investment company. Founding Chair of The Real Estate Council and the Real Estate and Finance Center at the University of Texas. Trustee of the Urban Land Institute (“ULI”) and Director of the ULI Foundation. Recognized as a Hall of Fame Member of both the McCombs School of Business at the University of Texas and the Dallas Board of Commercial Developers. Serves as a member of the University of Texas at Austin Business School Advisory Board and as a Trustee of the Business School Foundation.
As a nationwide developer of real estate property, Mr. Swope has handled the acquisition, financing, leasing and management of over 50 million square feet of real estate during his over 40 year career in the commercial real estate industry and thus brings extensive experience in virtually all aspects of real estate and a wealth of knowledge regarding the individual geographic markets in which Piedmont currently owns or may own property. This experience makes him well suited to serve as Chair of the Capital Committee. He also has an extensive personal network of contacts throughout the real estate industry.
9

Nominee
Age
Director Since
Information About Nominee
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Dale H. Taysom,
Vice-Chair of the Board*
72
2015, Vice-Chair since 2017
Former Global Chief Operating Officer for Prudential Real Estate Investors (“PREI”). Prior to his retirement in 2013, during his 36-year career with PREI, Mr. Taysom held various positions including Head of United States Transactions and Global Head of Transactions, among others, prior to completing his tenure as Global Chief Operating Officer (“COO”). He was a member of PREI’s domestic and international investment committees and a member of the Global Management Committee and is currently a member of the ULI and a former member of both the National Multi-Housing Council and the National Association of Real Estate Investment Managers (“NAREIM”).
Mr. Taysom brings many years of experience dealing with almost every facet of owning and operating commercial real estate. He is familiar with many of the markets in which our properties are located and has an extensive personal network of contacts throughout the real estate industry. In addition to his financial and budgetary responsibilities as COO of PREI, Mr. Taysom also participated with the management committee in formulating the strategic vision of the company including the review, approval, and responsibility for financial performance. This financial and operational experience makes him well suited to serve as a member of the Audit and Capital Committees.
*
Indicates that such director has been determined by our board of directors to be independent under NYSE listing standards.
10

PROPOSAL 2:
RATIFICATION OF DELOITTE & TOUCHE LLP AS INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2021
Engagement of Deloitte & Touche LLP
On February 17, 2021, the Audit Committee approved the engagement of Deloitte & Touche LLP as our independent registered public accounting firm to audit our financial statements for the year ending December 31, 2021. This proposal asks you to ratify the selection of Deloitte & Touche LLP as our independent registered public accounting firm. Although we are not required to obtain such ratification from our stockholders, the board of directors believes it is good practice to do so. Notwithstanding the ratification, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that the change would be in the best
interests of Piedmont and our stockholders. In the event that the appointment of Deloitte & Touche LLP is not ratified, the Audit Committee will consider the appointment of another independent registered public accounting firm, but will not be required to appoint a different firm. Deloitte & Touche LLP has served as the Company’s independent registered public accounting firm since 2018.
A representative of Deloitte & Touche LLP will be available at the Annual Meeting, will have the opportunity to make a statement, and will be available to respond to appropriate questions from stockholders.
Your board of directors unanimously recommends a vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2021.
Pre-Approval Policies
The Audit Committee must pre-approve all auditing services performed for us by our independent registered public accounting firm, as well as all permitted non-audit services (including the fees and terms thereof), in order to ensure that the provision of such services does not impair the registered public accounting firm’s independence. Unless a type of service to be provided by our independent registered public accounting firm has received “general” pre-approval, it will require “specific” pre-approval by the Audit Committee.
All requests or applications for services to be provided by our independent registered public accounting firm that do not require specific pre-approval by the Audit Committee will be submitted to management and must include a detailed description of the services to be rendered. Management will determine whether such services are included within the list of services that have received the general pre-approval of the Audit Committee. The Audit Committee will be informed on a timely basis of any such services rendered by our independent registered public accounting firm.
Requests or applications to provide services that require specific pre-approval by the Audit Committee will be submitted to the Audit Committee by both our independent registered public accounting firm and our chief financial officer, treasurer, or chief accounting officer, and must include a joint statement as to whether, in their view, the request or application is consistent with the rules of the Securities and Exchange Commission (the “SEC”) on registered public accounting firm independence. The Chair of the Audit Committee has been delegated the authority to specifically pre-approve all services not covered by the general pre-approval guidelines, up to an amount not to exceed $75,000 per occurrence. Amounts requiring pre-approval in excess of $75,000 per occurrence require specific pre-approval by our Audit Committee prior to engagement of Deloitte & Touche LLP, our current independent registered public accounting firm. All amounts specifically pre-approved by the Chair of the Audit Committee in accordance with this policy must be disclosed to the full Audit Committee at its next regularly scheduled meeting.
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For the year ended December 31, 2020, all services rendered by Deloitte & Touche LLP were pre-approved by the Audit Committee in accordance with the policies and procedures described above.
Fees Paid to Independent Registered Public Accounting Firms
The Audit Committee reviewed the audit and non-audit services performed by Deloitte & Touche LLP and Deloitte Tax LLP (collectively, “Deloitte”) for fiscal 2020 and 2019, as well as the fees charged for such services. In its review of any non-audit service fees, the Audit Committee considered whether the provision of such services was compatible with maintaining the independence of our independent registered public accounting firms. The following table sets forth the aggregate fees paid to Deloitte during the years ended December 31, 2020 and 2019:
2020
2019
Audit Fees $ 1,070,000 $ 990,000
Audit-Related Fees
Tax Fees 28,321
All Other Fees
Total
$ 1,098,321 $ 990,000
For purposes of the preceding table, the professional fees are classified as follows:

Audit Fees — These are fees for professional services performed for the audit of our annual financial statements and the required review of quarterly financial statements and other procedures (including reviews of the purchase price allocation of acquisitions) to be performed by the independent registered public accounting firm to be able to form an opinion on our consolidated financial statements. These fees also cover services that are normally provided by independent registered public
accounting firms in connection with statutory and regulatory filings or engagements, and services that generally only the independent registered public accounting firm reasonably can provide, such as services associated with filing registration statements, periodic reports, and other filings with the SEC.

Audit-Related Fees — These are fees for assurance and related services that traditionally are performed by independent registered public accounting firms, such as due diligence related to acquisitions and dispositions, attestation services that are not required by statute or regulation, internal control reviews, non recurring agreed-upon procedures and other professional fees associated with transactional activity.

Tax Fees — These are fees for all professional services performed by professional staff in our independent registered public accounting firm’s tax division, except those services related to the audit of our financial statements. These include fees for tax compliance filings, tax planning, and tax advice, including federal, state, and local issues. Services may also include assistance with tax notices, audits and appeals before the Internal Revenue Service and similar state and local agencies.

All Other Fees — These are fees for other permissible work performed that do not meet the above-described categories, including assistance with internal audit plans and risk assessments.
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PROPOSAL 3:
ADVISORY VOTE TO APPROVE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS
Pay that reflects performance and alignment of pay with the long-term interests of our stockholders are key principles that underlie our compensation program. In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), stockholders have the opportunity to vote, on an advisory basis, on the compensation of our named executive officers. This is often referred to as a “say on pay” and provides you, as a stockholder, with the ability to cast a vote with respect to our 2020 executive compensation programs and policies and the compensation paid to the named executive officers as disclosed in this proxy statement through the following resolution:
“RESOLVED, that the stockholders approve the compensation of the named executive officers, as described in the Compensation Discussion and Analysis section and in the compensation tables and accompanying narrative disclosure in this proxy statement.”
As discussed in “Executive Compensation — Compensation Discussion and Analysis” below, the compensation paid to our named executive officers is designed to meet the following objectives:

to attract and retain candidates capable of performing at the highest levels of our industry;

to create and maintain a performance-focused culture, by rewarding outstanding company and individual performance based upon objective predetermined metrics;

to reflect the qualifications, skills, experience and responsibilities of each named executive officer;

to link incentive compensation levels with the creation of stockholder value;

to align the interests of our executives and stockholders by creating opportunities and incentives for executives to increase their equity ownership in us; and

to motivate our executives to manage our business to meet and appropriately balance our short- and long-term objectives.
This proposal is an advisory proposal, which means it is non-binding. Although the vote is non-binding, the Compensation Committee will review the voting results and consider the outcome in making decisions about future compensation arrangements for our named executive officers.
As required by the Dodd-Frank Act, this vote does not overrule any decisions by the board of directors, will not create or imply any change to or any additional fiduciary duties of the board of directors and will not restrict or limit the ability of stockholders generally to make proposals for inclusion in proxy materials related to executive compensation.
Your board of directors unanimously recommends a vote “FOR” the approval,
on an advisory basis, of the compensation of our named executive officers.
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PROPOSAL 4:
APPROVAL OF THE PIEDMONT OFFICE REALTY TRUST, INC. SECOND AMENDED AND RESTATED 2007 OMNIBUS INCENTIVE PLAN
General
We maintain the Piedmont Office Realty Trust, Inc. Amended and Restated 2007 Omnibus Incentive Plan (the “2007 Omnibus Incentive Plan”), which was approved by our stockholders and became effective on April 16, 2017. Management has determined that it is in our best interest to further amend and restate the 2007 Omnibus Incentive Plan (as so amended and restated, the “Piedmont Office Realty Trust, Inc. Second Amended and Restated 2007 Omnibus Incentive Plan,” or the “A&R Incentive Plan”) to (i) increase the number of shares of common stock available for issuance by 3,000,000 shares, from 5,666,667 to 8,666,667, (ii) extend the term to March 17, 2031; and (iii) make certain other amendments to the 2007 Omnibus Incentive Plan.
The Board believes the increase in the number of shares of our common stock reserved and available for awards, as well as the extension of the term of the 2007 Omnibus Incentive Plan and the other amendments reflected in the A&R Incentive Plan, which are summarized below, are in the best interest of the Company and our stockholders.
To ensure an adequate supply of shares for future awards, the Board has approved, and recommends that stockholders approve, the A&R Incentive Plan. The A&R Incentive Plan will authorize the issuance of up to 3,000,000 additional shares of our common stock pursuant to incentive awards, subject to adjustment as provided in the A&R Incentive Plan. In determining the number of additional shares of common stock requested for availability under the A&R Incentive Plan, we considered that no shares of our common stock are currently available for issuance, our historic and anticipated award grant practices, and the estimated number of shares needed for awards over the next four to five years. The Company believes that the additional shares authorized under the A&R Incentive Plan will provide it with a sufficient number of shares of common stock to ensure that equity-based long-term incentive awards remain a meaningful component of the overall compensation of our employees, officers and non-employee directors.
Effect of Proposal
Approval of the A&R Incentive Plan as requested by this Proposal 4 will (1) increase the number of shares available for issuance by 3,000,000 shares from 5,666,667 to
8,666,667, (2) extend the term to March 17, 2031, and (3) make certain other amendments to the 2007 Omnibus Incentive Plan as described below.
Summary of Changes to the A&R Incentive Plan
In addition to authorizing the issuance of up to 3,000,000 additional shares of our common stock pursuant to incentive awards and extending the term of the 2007 Omnibus Incentive Plan, the A&R Incentive Plan makes several changes which we believe are beneficial to stockholders, including:

Clarifying that common stock will not be available for issuance again under the A&R Incentive Plan if such common stock is withheld or tendered to satisfy tax withholding obligations associated with any award, including stock options, stock appreciation rights and “full-value” awards (such as restricted stock and deferred stock awards).

Specifying that, if the vesting of awards is accelerated in connection with a “change in control” (as defined in the A&R Incentive Plan), then (i) any service-vesting condition under an outstanding award will be treated as satisfied in full immediately prior to the consummation of the change in control and (ii) for any outstanding performance award for which the performance cycle is incomplete as of the date of the change in control, the performance cycle will be treated as ending on the date of such change in control and the Compensation Committee will determine the extent to which the performance goals with respect to such performance cycle have
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been met or, if not determinable, deem the applicable “target” levels of the performance goals to have been attained. The resulting performance award will be pro-rated to reflect the portion of the performance cycle that was completed prior to the change in control.

Clarifying that awards that are “underwater” ​(that is, an option or stock appreciation right where the exercise price exceeds the fair market value of the common stock underlying the award) may be cancelled without notice or consideration in connection with a “corporate event.”

Clarifying that dividends and dividend equivalent rights are not paid on unvested awards. Instead, dividends and dividend equivalent rights are subject to the same vesting conditions as the award with respect to which such dividends or dividend equivalent rights are paid (and will be forfeited if the award is forfeited).

Eliminating certain “performance-based compensation” provisions that are no longer applicable under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”).

Including a definition of “cause” to be used for all awards, unless otherwise defined in an award agreement.

Adopting certain other minor clarifying amendments.
In addition, the Compensation Committee has determined that certain award agreements under the A&R Incentive Plan will provide that stock issued on exercise, vesting or settlement of an award must be held for 12 months (or termination of service due to death, disability, or retirement, if earlier) for employees of the Company with a title of Senior Vice President or higher.
As of March 18, 2021, the closing price of shares of our common stock, as reported on NYSE, was $18.27 per share.
As of March 5, 2021, 545,652 shares of common stock underlying deferred stock awards and 985,514 shares of common stock underlying performance-based awards were granted and remain outstanding under the 2007 Omnibus Incentive Plan.
Summary of the A&R Incentive Plan
A copy of the A&R Incentive Plan is attached hereto as Appendix A. This summary of the provisions of the A&R Incentive Plan is qualified in its entirety by reference to the full text of the A&R Incentive Plan. To the extent that there is a conflict between this summary and the A&R
Incentive Plan, the A&R Incentive Plan will govern. Capitalized terms used but not defined herein will have the meanings ascribed to them in the A&R Incentive Plan. The adoption of the A&R Incentive Plan is subject to stockholder approval.
Background and Purpose
The A&R Incentive Plan modifies our existing 2007 Omnibus Incentive Plan, which was approved by our stockholders and became effective on April 16, 2017. On March 18, 2021, our Board approved the A&R Incentive Plan, subject to approval by our stockholders, to (i) increase the number of shares of common stock available for issuance by 3,000,000 shares, from 5,666,667 to 8,666,667, (ii) extend the term to March 17, 2031, and (iii) make certain other amendments to the original 2007 Omnibus Incentive Plan.
The A&R Incentive Plan was established by the Board, which consulted with its legal advisors and an employment compensation consultant to survey and study the market compensation ranges of our competitors. The purpose of the A&R Incentive Plan is to provide us with the flexibility to offer performance-based compensation, including stock-based and incentive cash awards as part of an overall compensation package to attract and retain qualified personnel.
Certain officers, key employees, non-employee directors, or consultants of ours and our subsidiaries would be eligible to be granted cash awards, stock options, stock appreciation rights, restricted stock, deferred stock awards, other stock-based awards, dividend equivalent rights, and performance-based awards (collectively, “awards”) under the A&R Incentive Plan. We anticipate that providing such persons with interests and awards of this nature will result in a closer identification of their interests with our own interests and those of our stockholders, thereby stimulating their efforts on our behalf and strengthening their desire to remain with us.
In addition, we have entered certain employment agreements with our senior management which may provide, among other things, for incentive compensation awards and performance bonuses that will be paid pursuant to the A&R Incentive Plan. If the A&R Incentive Plan is not approved by our stockholders, it could materially adversely affect us because we could be
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deprived of the services of our senior management and the ability to provide the incentives necessary to attract qualified replacements and other personnel.
Administration
The A&R Incentive Plan will be administered by a compensation or other committee consisting of at least two individuals, each of whom shall be a “non-employee director” as defined under Rule 16b-3 under the Exchange Act, or, if no committee is designated by our Board to act for these purposes, our Board. The A&R Incentive Plan will be administered by the Compensation Committee of our Board. References below to our Compensation Committee include a reference to our Board for those periods in which our Board is administering the A&R Incentive Plan.
The Compensation Committee will have the power and authority to administer and interpret the A&R Incentive Plan, including the power and authority: (1) to authorize the granting of awards; (2) to determine the eligibility of officers, key employees, directors, or consultants of ours to receive an award; (3) to determine the number of shares of common stock to be covered by each stock-based award (subject to the individual participant limitations provided in the A&R Incentive Plan); (4) to determine the terms, conditions and restrictions of each award, including setting applicable performance criteria (which may not be inconsistent with the terms of the A&R Incentive Plan); (5) to accelerate the exercisability or vesting of the awards; (6) to extend the time period for
exercising stock options; (7) to correct any defect, omission or inconsistency in the A&R Incentive Plan or in any award agreement, in a manner and to the extent it shall deem necessary or expedient to make the A&R Incentive Plan fully effective; (8) to waive any restrictions, conditions or limitations imposed on an Award at the time the Award is granted or at any time thereafter including but not limited to forfeiture, vesting and treatment of Awards upon a Termination of Service; and (9) to take any other actions and make all other determinations that it deems necessary or appropriate in connection with the A&R Incentive Plan or the administration or interpretation thereof. In connection with this authority, the Compensation Committee may, among other things, establish performance goals that must be met in order for awards to be granted or to vest, or for the restrictions on any such awards to lapse. In addition, the Compensation Committee may, in its discretion, delegate to our Chief Executive Officer, or his or her delegate, all or part of the Committee’s authority and duties with respect to awards. The A&R Incentive Plan also has certain limitations of liability for Compensation Committee and Board members as long as such members are not acting in bad faith or committing fraud.
Eligibility and Types of Awards
Certain of our officers, employees, non-employee directors and consultants are eligible to be granted awards under the A&R Incentive Plan. Eligibility for awards under the A&R Incentive Plan will be determined by the Compensation Committee. No new award may be
granted under the A&R Incentive Plan after March 17, 2031. There are approximately ten officers, 127 employees, seven non-employee directors and no consultants eligible to be granted Awards under the A&R Incentive Plan
Available Shares
Subject to adjustment upon certain corporate transactions or events, the total number of shares of our common stock subject to past or future awards under the A&R Incentive Plan may not exceed 8,666,667. The 8,666,667 shares of common stock available for issuance under the A&R Incentive Plan shall be reduced by (i) the number of shares of common stock issuable pursuant to outstanding awards granted under the 2007 Omnibus Incentive Plan prior to the effective date of the A&R Incentive Plan; and (ii) the number of shares of common stock issued pursuant to awards granted under the 2007 Omnibus Incentive Plan prior to the effective date of the
A&R Incentive Plan that have been exercised, vested or settled and are no longer outstanding, and increased by the number of shares of common stock underlying awards that are outstanding under the 2007 Omnibus Incentive Plan as of the effective date of the A&R Incentive Plan and that again become available for grant under the A&R Incentive Plan. In determining the number of shares of common stock available for grant under the A&R Incentive Plan at any time: (1) any shares of stock subject to an award granted under the A&R Incentive Plan (including awards granted prior to the effective date of the A&R Incentive Plan) that terminate by expiration,
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forfeiture, cancellation or otherwise without the issuance of common stock, are settled in cash in lieu of common stock, or are exchanged with the Compensation Committee’s permission prior to the issuance of common stock for an award not involving common stock, shall become available again for grant under the A&R Incentive Plan; (2) any shares of common stock that are withheld by the Company or tendered (by either actual delivery or attestation) to pay the exercise price of a stock option shall not become available again for grant under the A&R ncetive Plan; (3) any shares of common stock that are withheld by the Company or tendered (by either actual delivery or attestions) to satisfy tax withholding obligations associated with an award, shall not become available again for grant under the A&R Incentive Plan; (4) any shares of stock that were subject to a stock-settled stock appreciation right under the plan that were not issued upon the exercise of such stock appreciation right shall not become available again for grant under the A&R Incentive Plan; (5) any shares of common stock that were purchased by the Company on the open market with the proceeds from the exercise of a stock option shall not become available again for grant under the A&R Incentive Plan;and (6) any shares of stock subject to “substitute awards” pursuant to Section 3(e) of the A&R Incentive Plan shall not be counted against the number of shares of common stock available for grant under the A&R
Incentive Plan, nor shall they reduce the shares of common stock authorized for grant to any person in any calendar year.
Subject to potential adjustments upon the occurrence of certain corporate transactions or events, award grants will be subject to the following limitations: (1) the maximum number of shares of common stock subject to stock options or stock appreciation rights that can be awarded under the A&R Incentive Plan to any person eligible for an award is 3,500,000 per calendar year; (2) the maximum number of shares of common stock that can be awarded in an award under the A&R Incentive Plan, other than pursuant to stock options or stock appreciation rights, to any person eligible for an award is 1,000,000 per calendar year; and (3) the maximum value that any grantee may receive with respect to any fiscal year included in the applicable performance period is $10 million. To conform to industry best practices, the board has established compensation caps so that the maximum aggregate fair value of awards granted to any non-employee director during any calendar year shall not exceed $250,000; provided that this annual award limit shall not apply to awards granted in lieu of all or any portion of such non-employee director’s cash-based director fees.
Awards Under the A&R Incentive Plan
Stock Options. The terms of stock options, including whether options will constitute “incentive stock options” for purposes of Section 422(b) of the Code, will be determined by the Compensation Committee. The exercise price of an option will be determined by the Compensation Committee and reflected in the applicable award agreement. Incentive stock options will only be granted to our key employees or a “subsidiary corporation” within the meaning of Section 424(f) of the Code. The exercise price with respect to incentive stock options may not be less than 100% (or 110% in the case of an incentive stock option granted to a 10% stockholder) of the fair market value of our shares of common stock on the date of grant. Each stock option will be exercisable after the period or periods specified in the award agreement, which will not exceed 10 years from the date of grant (or 5 years from the date of grant in the case of an incentive stock option granted to a 10% stockholder). Options will be exercisable at such times and subject to such terms as determined by the Compensation Committee. If the aggregate fair market value of all shares of common stock subject to a grantee’s “incentive stock option” which are exercisable for the first time during any
calendar year exceeds $100,000, the excess options shall be treated as nonqualified options. The Company has not awarded stock options since the inception of the 2007 Omnibus Incentive Plan.
Stock Appreciation Rights. Subject to the requirements of the A&R Incentive Plan, the Compensation Committee may grant stock appreciation rights in tandem with a stock option or alone and unrelated to a stock option. Stock appreciation rights may be exercised by the delivery to us of a written notice of exercise. The exercise of a stock appreciation right will entitle the grantee to receive shares of common stock having a value equal to the fair market value of a share of common stock on the date of exercise over the exercise price of the stock appreciation right. The exercise price of a stock appreciation right will be no less than the fair market value of the common stock on the date of grant. In its sole discretion, the Compensation Committee may settle the stock appreciation rights in a combination of shares of common stock and cash, or exclusively with cash. The Company has not awarded stock appreciation rights since the inception of the 2007 Omnibus Incentive Plan.
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Restricted Stock. A restricted stock award is an award of shares of common stock that is subject to restrictions on transferability and such other restrictions, if any, as the Compensation Committee may impose at the date of grant. Grants of restricted stock will be subject to vesting schedules as determined by the Compensation Committee. The restrictions may lapse separately or in combination at such times, under such circumstances, including, without limitation, a specified period of employment or the satisfaction of pre-established criteria, in such installments or otherwise, as the Compensation Committee may determine. Except to the extent restricted under the award agreement relating to the restricted stock, a participant granted restricted stock has all of the rights of a stockholder, including, without limitation, the right to vote and the right to receive cash dividends on the restricted stock. Although dividends are paid on all restricted stock, whether or not vested, at the same rate and on the same date as our shares of common stock, such dividends will be held by us and not distributed to participants until the applicable restrictions lapse. Holders of restricted stock are prohibited from selling such shares with certain limited exceptions as provided under the A&R Incentive Plan.
Deferred Stock Awards. A deferred stock award is an award of phantom stock units subject to restrictions and conditions as the Compensation Committee may determine at the time of the grant. The granting of deferred stock will be contingent on the execution of a deferred stock agreement by the grantee. The terms of such agreements will be determined by the Compensation Committee and may differ among awards and grantees. A phantom stock unit represents a right to receive the fair market value of a share of our common stock or, if provided by the Compensation Committee, the right to receive a share of our common stock. Phantom stock units will be settled with a single-sum distribution; however, the Compensation Committee may, in its discretion and under certain circumstances, permit a participant to receive as settlement of the phantom stock units, installments over a period not to exceed ten years. Unless otherwise provided in the applicable award agreement, or pursuant to a permissible election, the settlement date with respect to a phantom stock unit generally is the first day of the month to follow the date on which the phantom stock unit vests. During the deferral period, a grantee shall have no rights as a stockholder; however, the grantee may be granted dividend equivalent rights (as described below).
Other Stock-Based Awards. The A&R Incentive Plan authorizes the granting of other awards based upon (1) the shares of common stock (including the grant of securities convertible into shares of common stock and stock appreciation rights), and subject to terms and conditions established at the time of grant, (2) equity
interests in one of our subsidiaries, (3) awards valued by reference to book value, fair value or performance parameters relative to us or any subsidiary or group of subsidiaries, and (4) any class of profits interest or limited liability company interest created or issued that qualifies as a “profits interest” within the meaning of IRS Revenue Procedures 93-27 and 2001-43. Our Compensation Committee will determine the specific terms of such awards and the conditions, if any, which will need to be satisfied before the grant will be effective and the conditions, if any, under which the grantee’s interest in the other awards will be forfeited. Dividends may be payable with respect to such other stock-based awards and will be subject to the same vesting conditions as the award with respect to which such dividends were paid (and forfeited if the award is forfeited). The Compensation Committee may also award dividend equivalent rights under these awards as described below.
Dividend Equivalent Rights. A dividend equivalent right is an award entitling the grantee credits based on the amount of cash dividends declared on shares of common stock specified in the dividend equivalent right (or other award to which it relates) in the same manner as if such shares had been issued to and held by the grantee. The Compensation Committee may provide that amounts payable with respect to dividend equivalents will be converted into cash or additional shares of common stock. The Compensation Committee will establish all other limitations and conditions of awards of dividend equivalents as it deems appropriate. A dividend equivalent right granted as a component of another award will provide that the dividend equivalent right will be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other award, and that the dividend equivalent right will expire or be forfeited or annulled under the same conditions as such other award. Dividend equivalent rights are not payable to participants until the underlying award has vested.
Performance Awards. An award may be granted as a performance award that vests, becomes exercisable, is settled or payable or is granted contingent upon the attainment during one or more performance cycles of one or more performance goals, each as specified by the Compensation Committee. A performance award may, but need not, also require the completion of a specified period of employment or other service with the Company or our subsidiaries.
The performance goals may be based on the performance criteria selected by the Compensation Committee for purposes of establishing the performance goals for a performance award, which include, but are not limited to the following criteria, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer
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group and any of which may be measured on an aggregate or per share basis: earnings before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in our financial reports for the applicable period; net income either before or after interest, taxes, depreciation and/or amortization; changes (or the absence of changes) in the per share or aggregate market price of our common stock; economic value-added; FFO or similar measure; sales or revenues; acquisitions or strategic transactions; operating income; cash flow; return on capital, assets, equity or investment; total return to stockholders; various “non-GAAP” financial measures customarily used in evaluating the performance of REITs; return on sales; gross or net profit levels; productivity; expense levels or management; margins; operating efficiency; customer tenant satisfaction; working capital; earnings per share of
stock; revenue or earnings growth; number of securities sold; our ranking against selected peer groups; same store performance from period to period; leasing or occupancy rates; objectively determinable capital deployment; objectively determinable expense management; sales or market shares; number of customers; and establishment of a trading market for our stock. Performance goals are to be established at the beginning of any applicable performance cycle or at such other date as determined by the Compensation Committee. In the discretion of the Compensation Committee, settlement of performance awards shall be in cash, common stock, other awards, or property. Subject to potential adjustments upon the occurrence of certain corporate transactions or events, the maximum value that any grantee may receive with respect to any fiscal year included in the applicable performance period shall be $10 million.
Adjustments in General; Certain Change-in-Control Provisions
In the event of certain corporate reorganizations or other events, the Compensation Committee will generally make certain adjustments in its discretion to the manner in which the A&R Incentive Plan operates (including, for example, to the number of shares available under the Plan), and may otherwise take actions which, in its judgment, are necessary to preserve the rights of participants.
Adjustment upon Changes in Capitalization. In the event of any reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock split, spin-off, or similar change in the shares of our common stock or our other securities, as determined by the Compensation Committee, pursuant to which outstanding shares of common stock are increased, decreased or exchanged for a different kind or number of securities, the Compensation Committee shall make an appropriate or proportionate adjustment in (1) the maximum number of shares reserved for issuance under the A&R Incentive Plan, (2) the maximum number of stock options or stock appreciation rights or other awards that can be granted to any one individual grantee, (3) the number and kind of shares or other securities subject to any then outstanding awards under the A&R Incentive Plan, (4) the repurchase price, if any, per share subject to each outstanding restricted stock award, and (5) the price for each share subject to any then outstanding stock options and stock appreciation rights under the A&R Incentive Plan, without changing the aggregate exercise price as to which such stock options and stock appreciation rights remain exercisable. Our Compensation Committee may also adjust the number of shares subject to outstanding awards and the exercise price and the terms of outstanding awards to take into consideration extraordinary dividends, acquisitions or dispositions of
stock or property or any other similar corporate event to the extent necessary to avoid a material distortion in the value of the awards.
Change in Control or Merger. In the event of certain mergers, consolidations, the sale of substantially all of our assets, our reorganization or a liquidation, or change of control as defined in the A&R Incentive Plan, the Compensation Committee may, in lieu of making the adjustments described above, provide that all outstanding awards shall terminate as of consummation of such event, and (i) accelerate the exercisability of, or cause all vesting restrictions to lapse on, all outstanding awards to a date that is at least ten days but no earlier than 60 days prior to such date, and/or (ii) provide that holders of awards will receive a payment in respect of cancellation of their awards based on the amount of the per share consideration being paid for our common stock in connection with such event, subject to various restrictions and other determinations of value. Payment may be subject to any escrow, holdback, or other contingency applicable to Company stockholders. In the event an award has an exercise or purchase price per share equal to or greater than fair market value, the award may be canceled without notice or payment of consideration. In addition, the Compensation Committee may grant awards under the A&R Incentive Plan in substitution for stock and stock based awards held by employees, directors or other key persons of another corporation in connection with the merger or consolidation of the employing corporation with the Company or a subsidiary or the acquisition by the Company or a subsidiary of property or stock of the employing corporation. In the event of a change in control, (i) any service-vesting condition under an outstanding award shall be treated as satisfied in full as of immediately prior to the date of consummation of the
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change in control and (ii) with respect to any outstanding performance award for which the performance cycle is incomplete as of the date of the change in control, the performance cycle will be treated as ending on the date of such change in control and the Compensation Committee shall (x) determine the extent to which the performance goals with respect to such performance cycle have been met based upon such audited or unaudited financial information then available as it deems relevant; or (y) if not determinable, deem the applicable “target” levels of the performance goals to have been attained with respect to such performance cycle. The resulting performance award will be pro-rated to reflect the portion of the performance cycle that was completed prior to the change in control.
The A&R Incentive Plan provides a Section 280G “cutback” to avoid the imposition of any excise tax under Code Sections 280G and 4999. To the extent that a grantee is a “disqualified individual” ​(as defined in Section 280G of the Code) and is entitled to payments or benefits that would be “parachute payments” ​(as defined in Section 280G of the Code), such payments or benefits will be reduced or eliminated so as to avoid having the payments or benefits under the A&R Incentive Plan being deemed a “parachute payment” under Section 280G of the Code.
Trading and Other Policies
Option exercises and other awards are subject to the Company’s insider trading policy and procedures, stock ownership guidelines and other applicable policies and procedures governing the issuance or holding of stock, as in effect from time to time.
During a grantee’s lifetime, his or her awards are only exercisable by the grantee, or by the grantee’s legal representative or guardian in the event of the grantee’s incapacity. No awards may be sold, assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by the laws of descent and distribution.
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company, as a result of misconduct, with any financial reporting requirement under the securities laws, then any grantee who is one of the individuals subject to automatic forfeiture under Section 304 of the Sarbanes-Oxley Act of 2002 must reimburse the Company for the amount of any award received by such individual under the A&R Incentive Plan during the 12-month period following the first public issuance or filing with the SEC, as the case may be, of the financial document embodying such financial reporting requirement.
Amendment and Termination
Our Board may at any time amend or terminate the A&R Incentive Plan; however, we must obtain stockholder approval of any amendment to the A&R Incentive Plan (other than amendments that curtail the scope of the plan) that would materially amend the A&R Incentive Plan, including any amendment that would:

increase the maximum number of shares of common stock that may be issued under the A&R Incentive Plan;

expand the types of awards available under, materially expand the eligibility to participate in, or materially extend the term of the A&R Incentive Plan; or

materially change the method of determining the fair market value of shares on the date of grant of an option or stock appreciation right.
In addition, to the extent determined by the Compensation Committee to be required by the Code to ensure that incentive stock options are qualified under Section 422 of the Code or the extent required by the
shareholder approval requirements of any national securities exchange, amendments to the A&R Incentive Plan will be subject to approval by stockholders.
The Compensation Committee may at any time amend or cancel any previously granted award under the A&R Incentive Plan for the purpose of satisfying changes in law or for any other lawful purpose, but no such action may adversely affect in any material way the rights under an previously granted award without the consent of the grantee. Notwithstanding the above, any amendment to an award or other action by the Compensation Committee that (i) decreases the exercise price or other similar price applicable thereto, (ii) cancels an award at a time when its exercise price or other similar price exceeds the fair market value of the underlying stock in exchange for another award or any cash payment or (iii) constitutes the repricing of the exercise price or base value of an option, stock appreciation right, or any other award granted under the A&R Incentive Plan, will be subject to the approval of our stockholders unless undertaken in connection with a merger or other transaction as set forth
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in Section 3(c) or Section 3(d) of the A&R Incentive Plan. If adopted by our stockholders, the A&R Incentive Plan shall terminate on March 17, 2031. Any awards outstanding under the A&R Incentive Plan at the time of its termination shall remain outstanding until they expire by their terms.
Certain U.S. Federal Income Tax Consequences
The following discussion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding U.S. federal income tax penalties, and was written to support the “promotion or marketing” ​(within the meaning of Internal Revenue Service Circular 230) of the A&R Incentive Plan.
Non-Qualified Stock Options. No income will be recognized by an option holder at the time a non-qualified stock option is granted. At the time a non-qualified stock option is exercised, however, ordinary income will generally be recognized by an option holder in an amount equal to the excess of the fair market value of the underlying shares of common stock on the exercise date over the exercise price of the option. We will generally be entitled to a deduction for U.S. federal income tax purposes in the same amount as the amount included in ordinary income by the option holder with respect to his or her non-qualified stock option. Gain or loss on a subsequent sale or other disposition of the shares acquired upon the exercise of a non-qualified stock option will be measured by the difference between the amount realized on the disposition and the tax basis of such shares, and will generally be long-term or short-term capital gain depending on the holding period involved. The tax basis of the shares acquired upon the exercise of any non-qualified stock option will be equal to the sum of the exercise price of the non-qualified stock option and the amount included in income with respect to the option. Notwithstanding the foregoing, in the event that exercise of the option is permitted other than pursuant to a cash payment of the exercise price, various special tax rules may apply.
Incentive Stock Options. In general, neither the grant nor the exercise of an incentive stock option will result in taxable income to an option holder or a deduction for us. To receive this tax treatment, however, shares acquired upon the exercise of an incentive stock option, must not be disposed of within two years after the incentive stock option is granted nor within one year after the transfer of the shares to the option holder pursuant to his or her exercise of the option. In addition, the option holder must be an employee of us or a qualified subsidiary at all times between the date of grant and the date which is three months (one year in the case of disability) before exercise of the option. (Special rules apply in the case of the death of the option holder.) Incentive stock option
treatment under the Code generally allows the sale of our shares of common stock received upon the exercise of an incentive stock option to result in any gain being treated as a capital gain to the option holder, and we will not be entitled to a tax deduction. The exercise of an incentive stock option (if the holding period rules described in this paragraph are satisfied), however, will give rise to income includable by the option holder in his or her alternative minimum taxable income for purposes of the alternative minimum tax in an amount equal to the excess of the fair market value of the stock acquired on the date of the exercise of the option over the exercise price.
If the holding period rules noted above are not satisfied, gain recognized on the disposition of the shares acquired upon the exercise of an incentive stock option will be characterized as ordinary income. This gain will be equal to the difference between the exercise price and the fair market value of the shares at the time of exercise. (Special rules may apply to disqualifying dispositions where the amount realized is less than the value at exercise.) We would generally then be entitled to a deduction equal to the amount of such gain included by an option holder as ordinary income. Any excess realized upon such a disposition over the fair market value at the date of exercise will generally be long-term or short-term capital gain depending on the holding period involved. Notwithstanding the foregoing, in the event that exercise of the option is permitted other than pursuant to a cash payment of the exercise price, various special tax rules may apply.
Restricted Stock. Unless a holder of restricted stock makes an “83(b) election” ​(as discussed below), there generally will be no tax consequences as a result of a grant of restricted stock until the restricted stock is either no longer subject to a substantial risk of forfeiture or is transferable (free of the risk). Generally, when the restrictions are lifted, the holder will recognize ordinary income, and we will be entitled to a deduction, equal to the difference between the fair market value of the stock at that time and the amount, if any, paid by the holder for the restricted stock. Subsequently realized changes in the value of the stock generally will be treated as long-term or short-term capital gain or loss, depending on the length of time the shares are held prior to disposition of the shares. In general terms, if a holder makes an 83(b) election (under Section 83(b) of the Code) upon the award of
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restricted stock, the holder will recognize ordinary income on the date of the award of restricted stock, and we will be entitled to a deduction, equal to (1) the fair market value of the restricted stock as though the stock were (A) not subject to a substantial risk of forfeiture or (B) not transferable, minus (2) the amount, if any, paid for the restricted stock. If an 83(b) election is made, there will generally be no tax consequences to the holder upon the lifting of restrictions, and all subsequent appreciation in the restricted stock generally would be eligible for capital gains treatment. In the event of a forfeiture after an 83(b) election is made, no deduction or loss will be available, other than with respect to amounts actually paid for the stock.
Dividend Equivalents. There generally will be no tax consequences as a result of the award of a dividend equivalent. When payment of the dividend equivalent is made, the holder of the dividend equivalent generally will recognize ordinary income, and we will be entitled to a deduction, equal to the amount received in respect of the dividend equivalent.
Stock Appreciation Rights. No income will be recognized at the time a stock appreciation right (“SAR”) is granted. At the time an SAR is exercised, however, the holder will recognize ordinary income equal to the amount of cash and the fair market value of any shares received as a result of the exercise (less the amount paid for such shares, if any). If the SAR was granted in connection with employment, this taxable income would also constitute “wages” subject to withholding and employment taxes. We will receive an income tax deduction in an amount equal to the ordinary income that the participant recognizes upon exercise of the SAR.
Deferred Stock Awards. No income will be recognized at the time a deferred stock award is granted. A participant
who receives a deferred stock award will recognize ordinary income equal to the amount of cash and the fair market value of any shares received upon settlement (generally, the vesting date). If the deferred stock award was granted in connection with employment, this taxable income would also constitute “wages” subject to withholding and employment taxes. We will receive an income tax deduction in an amount equal to the ordinary income that the participant recognizes.
Section 409A. Section 409A of the Code imposes restrictions on nonqualified deferred compensation. Failure to satisfy these rules results in accelerated taxation, an additional tax to the holder of the amount equal to 20% of the deferred amount, and a possible interest charge. While certain awards under the A&R Incentive Plan could be subject to Section 409A of the Code, deferred stock awards under the A&R Incentive Plan are intended to be exempt from, or to comply with, the requirements of Section 409A of the Code.
Other Tax Consequences. Section 162(m) of the Code prevents us from taking a federal income tax deduction for compensation paid in excess of $1 million to our “covered employees” which generally includes the CEO, CFO and the three other most highly compensated executive officers of the Company. Any award we grant pursuant to the A&R Incentive Plan to covered employees, whether performance-based or otherwise, will be subject to the $1 million annual deduction limitation.
The foregoing is only a summary of the effect of federal income taxation on the grantee and us with respect to the grant and exercise of awards made under the A&R Incentive Plan, does not purport to be complete, and does not discuss the tax consequences of the grantee’s death or the income tax laws of any municipality, state or foreign country in which a grantee may reside.
Plan Benefits
Benefits, if any, payable under the A&R Incentive Plan for 2021 and future years are dependent on the actions of the Compensation Committee and are therefore not determinable at this time. Our executive officers are eligible to receive awards under the 2007 Omnibus
Incentive Plan and will be eligible to receive awards under the A&R Incentive Plan and, accordingly, our executive officers have an interest in this Proposal. In 2020, the following grants were made under the 2007 Omnibus Incentive Plan to the persons and groups listed below:
Name and Position
Stock Awards(1)
Number of
Shares
Dollar Value
($)
C. Brent Smith, President and Chief Executive Officer 78,057 1,974,037
Robert E. Bowers, EVP and Chief Financial and Administrative Officer 48,621 1,229,412
Christopher A. Kollme, EVP — Capital and Strategy 17,838 451,447
George M. Wells — EVP — Real Estate Operations 15,437 391,466
Robert K. Wiberg — EVP — Northeast Region and Co-Head of Development 17,838 451,447
All Executive Officers as a group (10 persons)(2) 240,589 6,087,014
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Name and Position
Stock Awards(1)
Number of
Shares
Dollar Value
($)
All Non-Employee Directors, as a group 46,648 648,673
All Non-Executive Officer Employees, as a Group 121,694 2,992,524
(1)
In accordance with SEC rules, the stock awards presented in this table include the annual deferred stock grant and the estimated aggregate grant date fair value of the Performance Share Component of our 2020 Long-Term Incentive Compensation Program at target levels, even though there is no guarantee that any amounts will ultimately be earned by and paid to the executive. See “Stock Vested for 2020” tables for the value of actual stock awards which vested during the year ended December 31, 2020.
(2)
Includes all persons who served as executive officers during 2020.
No Appraisal Rights in Connection with the Approval of the A&R Incentive Plan
Under Maryland law, stockholders will not have appraisal rights in connection with the proposal to adopt the A&R Incentive Plan.
Vote Required
Approval of the A&R Incentive Plan requires the affirmative vote of the holders of a majority of the votes cast thereon to pass. Abstentions and broker non-votes will not have an effect on the vote, but they will count toward the establishment of a quorum.
Our Board has determined it to be advisable and in the best interests of us and our stockholders to approve the A&R Incentive Plan. Our Board unanimously approved the form of the A&R Incentive Plan and recommends that you vote FOR the approval of the A&R Incentive Plan.
Consequences of Failure to Approve the A&R Incentive Plan
If the A&R Incentive Plan is not approved by our stockholders, it could materially adversely affect us because we could be deprived of the services of our senior management and the ability to provide the incentives necessary to attract qualified replacements and other personnel.
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CERTAIN INFORMATION ABOUT MANAGEMENT
Executive Officers
Name
Age
Position(s)
C. Brent Smith 45 President, Chief Executive Officer and Director
Robert E. Bowers 64 Executive Vice President and Chief Financial and Administrative Officer
Edward H. Guilbert, III
45 Executive Vice President — Finance, Treasurer and Assistant Secretary
Christopher A. Kollme
50 Executive Vice President — Capital and Strategy
Laura P. Moon 50 Senior Vice President and Chief Accounting Officer
Joseph H. Pangburn 60 Executive Vice President — Southwest Region
Thomas R. Prescott 63
Executive Vice President — Midwest Region and Co-Head of Development
Alex Valente 36 Executive Vice President — Southeast Region
George M. Wells 58 Executive Vice President — Real Estate Operations
Robert K. Wiberg 64
Executive Vice President — Northeast Region and Co-Head of Development
The following is detailed information about each of our executive officers other than Mr. Smith whose biographical information is included under “Proposal 1: Election of Directors” above.
Robert E. Bowers has served as our Chief Financial and Administrative Officer since 2007. A veteran of the public financial services industry, including having served as Chief Financial Officer for three other public companies, Mr. Bowers’ experience includes investor relations, debt and capital offerings, mergers and acquisitions, asset allocation, financial management and strategic planning. Mr. Bowers is also responsible for management of our information technology, risk management and human resource functions. From 2004 until 2007, he served as Chief Financial Officer and Vice President of Wells Real Estate Funds, Inc. (“WREF”) and was a Senior Vice President of Wells Capital. Mr. Bowers was Chief Financial Officer and Director of NetBank, Inc. (formerly NASDAQ: NTBK) from 1997 to 2002. From 1984 to 1996, Mr. Bowers was Chief Financial Officer and Director of Stockholder Systems, Inc. (formerly NASDAQ: SSIAA), an Atlanta, Georgia-based financial applications company and its successor, CheckFree Corporation (formerly NASDAQ:CKFR). Mr. Bowers has provided strategic financial counsel to a range of organizations, including venture capital funds, public corporations and businesses considering listing on a national securities exchange. Mr. Bowers is a member of NAREIT, a board member of the Office Technology and Operations Council (“OTOC”), and a CPA who began his career in 1978 with Arthur Andersen & Company in Atlanta.
Edward H. Guilbert, III has served as Executive Vice President — Finance, Treasurer, and Assistant Secretary since 2019. In this role, as well as in his previous roles of Senior Vice President — Finance and Treasurer and Senior Vice President — Financial Planning and Analysis, which he held since 2014, he is responsible for treasury and finance matters, forecasting, operational reporting,
corporate financing, and investor relations. Mr. Guilbert joined Piedmont in 2007. He has approximately 20 years of real estate experience across a broad spectrum of roles, including acquisitions, asset management, loan asset management, dispositions, portfolio management, and structured finance, in addition to experience in several different asset types, including office, multi-family, retail and hotels. Mr. Guilbert’s experience includes previous tenures with WestWind Capital Partners, an advisor to a German open-end and closed-end real estate fund sponsor, and a real estate division of Goldman Sachs.
Christopher A. Kollme has served as Executive Vice President — Capital and Strategy since June 2017. In this role, he works with the Piedmont senior management team to further establish and advance the strategic initiatives of the company and supervises our national business development function. Additionally, he provides counsel on capital raising activities and banking and rating agency relationships. Prior to joining Piedmont in 2017, Mr. Kollme served as Managing Director & Head of Real Estate Investment Banking for SunTrust Robinson Humphrey where he managed the origination of advisory and capital raising transactions on behalf of the bank’s public and private real estate clients. Mr. Kollme’s approximately 20-year career has also included tenures with Morgan Keegan & Company, Inc.’s Real Estate Investment Banking group as Managing Director & Group Head and Duke Realty as Vice President of Acquisitions.
Laura P. Moon has served as our Senior Vice President and Chief Accounting Officer since 2007. She has approximately thirty years of experience with accounting and reporting for public companies and at Piedmont she is responsible for all general ledger accounting, SEC and tax reporting functions. Prior to joining us, Ms. Moon served as Vice President and Chief Accounting Officer at WREF where she had responsibility for all general ledger accounting, financial and tax reporting, and internal audit
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supervision for 19 public registrants as well as several private real estate partnerships. Ms. Moon is a CPA and began her career in 1991 with Deloitte & Touche LLP.
Joseph H. Pangburn has served as our Executive Vice President — Southwest Region since 2014. In this capacity, he is responsible for overseeing Piedmont’s Southwest Region operations, comprised of over four million square feet principally located in Dallas, including all development, leasing, asset management and transactional activity. Prior to his promotion to his current position in 2014, Mr. Pangburn had been responsible for the leasing and asset management activities for the Company’s Western Region portfolio since 2007. His previous tenures include WREF, Lend Lease Real Estate Investments, Inc., Prentiss Properties Limited, Inc., and Bank of America. Throughout his career, his activities and experience have been concentrated on properties located in the western United States, and specifically in Texas. Mr. Pangburn is a recognized real estate industry leader and a member of the Dallas County Utility and Reclamation District Board of Directors, National Association of Industrial & Office Properties (“NAIOP”), and the Urban Land Institute (“ULI”).
Thomas R. Prescott has served as our Executive Vice President — Midwest Region and Co-Head of Development since joining Piedmont in 2014 and is responsible for all leasing, asset management, acquisitions, dispositions and development and redevelopment projects for Piedmont’s Midwest Region, which is comprised of approximately 2.6 million square feet located primarily in Minneapolis. In addition, Mr. Prescott serves as Co-Head of Development and has responsibility for various development projects throughout the portfolio. His previous tenures include Metropolis Investment Holdings Inc., Forest City Enterprises, and Higgins Development Partners (formerly Walsh, Higgins & Company), and The Shaw Company. Mr. Prescott is a recognized real estate industry leader and a member of NAIOP and ULI.
Alex Valente has served as our Executive Vice President — Southeast Region since 2019. He is responsible for overseeing Piedmont’s Southeast Region operations, comprised of approximately five million square feet located in Atlanta and Orlando, including all development, leasing, asset management and transactional activity. During his 15-year tenure at Piedmont, he has worked on many complex transactions
including directly negotiating leases with some of our largest tenants. In addition to the Southeast, Mr. Valente has served several other of Piedmont’s markets including our Midwest and Northeast Regions. Mr. Valente is a member of NAIOP and a member of the board of both the Cobb County Chamber and SelectCobb.
George M. Wells has served as Executive Vice President  — Real Estate Operations since 2019. His responsibilities include leading our company’s asset and property management divisions and providing oversight to our construction management team with regard to developments, re-developments and tenant build outs. Prior to assuming this role, Mr. Wells served as Executive Vice-President of our Southeast Region for approximately four years. Mr. Wells has over 30 years of commercial real estate experience including approximately sixteen years of service with Piedmont and its former advisor, WREF. Prior to joining WREF, Mr. Wells experience included tenures with Lend Lease Real Estate Investments and Equitable Real Estate. Mr. Wells is a member of NAIOP.
Robert K. Wiberg has served as Executive Vice President — Northeast Region since 2019 and Co-Head of Development since 2012. Prior to being appointed Executive Vice President for the Northeast Region, Mr. Wiberg served as Executive Vice President of the Mid-Atlantic region which was consolidated into the Northeast Region during 2019. Mr. Wiberg is responsible for all leasing, property management, asset management, acquisitions and dispositions approximately 4.5 million square feet of office space located in metropolitan Washington, D.C., Boston, and New York, as well as for various development projects throughout the portfolio. Mr. Wiberg’s previous tenures include Brandywine Realty Trust, Prentiss Properties, Cadillac Fairview and Coldwell Banker (now CBRE). As a recognized industry leader, he has served on the board of directors of the Northern Virginia Chapter of NAIOP and the board of the Arlington Partnership for Affordable Housing and currently serves on the board of the Ballston Business Improvement District.
There are no family relationships among our directors or executive officers. Officers are elected annually by our board of directors, and each officer serves until his or her successor is duly elected and qualified, or until his or her death, resignation or removal from office. The board of directors retains the power to remove any officer at any time.
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INFORMATION REGARDING THE BOARD OF
DIRECTORS AND COMMITTEES
Independence and Leadership Structure
Each NYSE-listed company is required to have a majority of independent board members and a nominating/corporate governance committee, compensation committee and audit committee each comprised solely of independent directors. Our board of directors has adopted the NYSE independence standards as part of its Corporate Governance Guidelines and, in accordance with NYSE rules, the board of directors has affirmatively determined that each of the following current board members is independent within the meaning of the NYSE’s director independence standards:
Kelly H. Barrett
Wesley E. Cantrell
Glenn G. Cohen
Barbara B. Lang
Frank. C. McDowell
Jeffrey L. Swope
Dale H. Tysom
C. Brent Smith, who serves as our President and Chief Executive Officer, is not independent.
Each of our board members is subject to re-election on an annual basis.
The board of directors has determined to separate the roles of Board Chair and CEO, and Mr. McDowell currently serves as Chair of the Board. The Chair is elected by the board of directors on an annual basis and presides at regularly scheduled executive sessions of the independent directors. The board currently has no formal policy with respect to the separation of the positions of Chair of the Board and Chief Executive Officer; however, the board believes that the separation of the positions is in our best interests as it provides leadership for the independent board and the benefit of additional support, experience and oversight for the management team.
Board Committees
Our board of directors has established four standing committees: the Audit Committee, the Compensation Committee, the Nominating and Corporate Governance Committee, and the Capital Committee. In addition, the Nominating and Corporate Governance Committee has established a standing Environmental, Social and Governance “ESG” sub-committee. Each of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee complies with the listing requirements and other rules and regulations of the SEC and the NYSE, each as amended or modified from time to time and has adopted a written charter. You can access each of our committee charters on the Investor relations pages of our website at www.piedmontreit.com. The board of directors has also
determined that each of the current members of our Audit, Compensation, and Nominating and Corporate Governance Committees is independent within the meaning the NYSE’s director independence standards applicable to members of such committees. Additionally, our Audit Committee members satisfy the enhanced independence standards set forth in Rule 10A-3(b)(1)(i) and Ms. Barrett and Mr. Cohen meet the definition of an audit committee financial expert as defined under the Exchange Act and NYSE listing standards. Our Compensation Committee members satisfy the enhanced independence standards set forth in NYSE listing standards and Section 16 of the Securities Exchange Act of 1934.
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The table below shows the current chairs and membership of the board and each standing board committee, the independence status of each board member and the number of board and board committee meetings held during the year ended December 31, 2020.
Director
Board of
Directors
Audit
Committee
Nominating and
Corporate
Governance
Committee(1)
Compensation
Committee
Capital
Committee
Frank C. McDowell
C
C
Kelly H. Barrett**
C
Wesley E. Cantrell
C
Glenn G. Cohen**
Barbara B. Lang
SC
C. Brent Smith*
Jeffrey L. Swope
C
Dale H. Taysom
VC
Number of 2020 meetings
10
6
4
6
5
(1)
All of the members of the Nominating and Corporate Governance Committee are members of the ESG Sub-Committee
C Chair   SC ESG Sub-Committee Chair   VC Vice Chair   •Member   *Non-Independent Director   ** Financial Expert
Each member of the 2020 board of directors attended in excess of 75% of the board and committee meetings on which such director served during 2020.
We do not have a formal policy with regard to board member attendance at our annual stockholder meetings. All of individuals who were members of our board of directors at the time attended the 2020 annual meeting of stockholders virtually.
The Audit Committee
The Audit Committee assists the board of directors in the oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the system of internal controls which our management has established, risk assessment, the performance of our internal audit function, and oversight of our technology platform, including cyber risk assessment and management. The Audit Committee is also directly responsible for the appointment, independence, compensation, retention, and oversight of the work of our independent registered public accounting firm, which reports directly to the Audit Committee. The Audit Committee meets alone with our senior management, our internal audit personnel, and with our independent registered public accounting firm, which has free access to the Audit Committee.
The Compensation Committee
The Compensation Committee assists the board of directors in setting the overall compensation strategy and compensation policies for our executive officers and directors, overseeing the assessment of risk associated with the Company’s compensation policies and practices, reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and evaluating the Chief Executive Officer’s performance in light of those goals and objectives. In addition the Compensation Committee determines our
Chief Executive Officer’s compensation, reviews and approves the compensation of other named executive officers and non-employee directors and administers our 2007 Omnibus Incentive Plan.
The Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee assists the board of directors in identifying individuals qualified to serve on the board of directors consistent with criteria approved by the board of directors, recommending a slate of director nominees for election by our stockholders at the annual meeting of our stockholders, evaluating the independence of candidates for the board of directors, developing and implementing the process necessary to identify prospective members of our board of directors, determining the advisability of retaining any search firm or consultant to assist in the identification and evaluation of candidates for membership on the board of directors, overseeing an annual evaluation of the board of directors, each of the committees of the board and management, developing and recommending to our board of directors a set of corporate governance principles and policies, periodically reviewing our corporate governance structures and procedures and suggesting improvements thereto to our board of directors. The Nominating and Corporate Governance Committee is also responsible for reviewing stockholder communications and overseeing our governance practices, business ethics and corporate
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conduct, as well as reviewing and promoting the continuing education of our directors.
ESG Sub-Committee. The Nominating and Corporate Governance Committee is also charged with providing oversight and guidance to the board regarding environmental, social and corporate governance (“ESG”) trends and best practices (in conjunction with Compensation and Capital Committees, to the extent these committees address issues related to ESG). To ensure that such matters are given focused attention, the Nominating and Corporate Governance Committee
established a standing ESG Sub-Committee, comprised of all of the members of the Nominating and Corporate Governance Committee and chaired by Ms. Lang, that regularly reviews the Company’s ESG practices and recommends changes as necessary to comply with existing legal requirements or emerging trends and best practices. The ESG Sub-Committee and Nominating and Corporate Governance Committee also receive quarterly reports from management regarding the Company’s ESG strategy, initiatives and policies.
The Capital Committee
The Capital Committee assists the board of directors by reviewing and advising the board of directors on our overall financial performance, including issues related to capital structure, operating earnings, dividends and budgetary, forecasting, and reporting processes, and reviewing and advising the board of directors on investment criteria and acquisition and disposition
policies, general economic environment in various real estate markets, existing or prospective properties or tenants, and portfolio diversification goals. The Capital Committee also provides oversight and counsel related to sustainability and wellness practices at the Company’s portfolio of properties.
Selection of Directors
The board of directors is responsible for selecting its own nominees and recommending them for election by the stockholders. The board delegates the screening process necessary to identify qualified candidates to the Nominating and Corporate Governance Committee, in consultation with the Chief Executive Officer.
The Nominating and Corporate Governance Committee annually reviews director suitability and the continuing composition of the board of directors and recommends director nominees who are voted on by the full board of directors. All director nominees then stand for election by the stockholders annually.
In recommending director nominees to the board of directors, the Nominating and Corporate Governance Committee solicits candidate recommendations from its own members, other directors, outside legal counsel, the investment banking community, and members of our management. The Nominating and Corporate Governance Committee may engage the services of a search firm to
assist in identifying potential director nominees and will also consider recommendations for director candidates made by stockholders and other interested persons. Candidates for director must meet the established director criteria set forth above. In addition, under our Bylaws, stockholders may directly nominate candidates for election as directors. In order for a stockholder to make a nomination, the stockholder must satisfy the procedural requirements for such nomination as provided in Article II, Section 12 of our Bylaws. Any stockholder may request a copy of our Bylaws free of charge by writing to our Secretary at our corporate address.
In evaluating candidates for director, the Nominating and Corporate Governance Committee will consider each candidate without regard to the source of the recommendation and take into account those factors that the Nominating and Corporate Governance Committee determines are relevant, including the factors set forth below under “Board Membership Criteria.”
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Board Membership Criteria
The Nominating and Corporate Governance Committee annually reviews with the board of directors the appropriate experience, skills and characteristics required of directors, both in the context of the current membership of the board as well as in the context of potential turnover of the existing board. The table below summarizes the key characteristics that are considered and which of our current independent board members the board particularly relies on with regard to each characteristic.
Experience, Skill, or Characteristic
McDowell
Barrett
Cantrell
Cohen
Lang
Swope
Taysom
Audit committee financial expert
Financial experience
Chief executive or chief financial officer experience (with a preference for REIT-specific experience)
Public company experience
Industry specific knowledge
Strategic planning experience or expertise
Experience mentoring top level leaders
General management experience
Real estate development/ construction expertise
Investment banking experience
Racial diversity
Gender diversity
Risk management expertise
Marketing expertise
ESG Initiatives
International experience
The board considers all of these characteristics when assessing candidates for board membership. Other considerations included in both the annual assessment of existing members and the assessment of new candidates include the candidate or incumbent’s status and tenure as an independent director, the ability of the candidate or incumbent to attend board meetings regularly and to devote an appropriate amount of effort in preparation for those meetings, and whether the candidate’s knowledge and experience of a particular aspect of the real estate industry or particular skill set is additive to the existing experience or skill sets of incumbent members of the board. While we have not adopted a formal policy regarding diversity of our board, the board believes that a diverse membership having a variety of skills, styles, experiences and competencies is an important aspect of a well-functioning board. Accordingly, the board believes that diversity, inclusive of gender and race, should be a
central component in board searches, succession planning and recruiting. The board is committed to considering board slates that are as diverse as possible and that this is consistent with nominating only the most qualified candidates for the board who bring the required skills, competencies and fit to the boardroom.
Although a number of our directors are retired, it is also expected that independent directors nominated by the board of directors shall be individuals who possess a reputation and hold positions or affiliations befitting a director of a large publicly held company and are active in their occupation, profession, or community. Further, the board annually considers each directors’ tenure on the Board with regard to pre-established term limits, as further described below, and plans for refreshment as needed.
Board Self-Evaluation Process
Annually, the board of directors undertakes a robust self-evaluation process which is administered by the Nominating and Corporate Governance Committee with the assistance of outside counsel. Members of the board complete a detailed, confidential questionnaire which provides for ratings in key areas and also seeks subjective comments. Outside counsel collects and analyzes the data and reports the results and information compiled from the questionnaires to the Nominating and Corporate
Governance Committee. Comments pertaining to particular Board Committees are shared with each respective Committee chairperson, and comments regarding the full board are shared with the full board. Matters requiring follow up are addressed by the Chair of the Nominating and Corporate Governance Committee, the Chair of the Board, or Chair of the applicable Board Committee, as appropriate.
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Majority Voting Policy
Our By-laws provide for majority voting for the election of directors in uncontested elections. Therefore, each director nominee will be elected if he or she receives a majority of the votes cast. A majority of votes cast means that the number of shares voted FOR a director must exceed the number of shares voted AGAINST that director. In order to enhance the power of our stockholders to influence the composition of the board of directors, our Corporate Governance Guidelines provide that in an uncontested election of directors, any non-employee nominee who receives a greater number of votes AGAINST his or her election than votes FOR his or her election will promptly tender his or her resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will promptly consider the resignation offer and make a recommendation to the board of directors. The board will act on the Nominating
and Corporate Governance Committee’s recommendation within 90 days following the certification of the stockholder vote. We will publicly disclose, in a Form 8-K furnished to the SEC, the board’s decision regarding whether to accept the resignation offer. Any director who tenders his or her resignation shall not participate in the Nominating and Corporate Governance Committee’s recommendation or board of directors action regarding whether to accept such resignations. However, if each member of the Nominating and Corporate Governance Committee was not elected at the same election, then the independent directors who were elected shall appoint a committee among themselves to consider such resignations and recommend to the board of directors whether to accept them. However, if the only directors who were elected in the same election constitute three or fewer directors, all directors may participate in the action regarding whether to accept such resignations.
Term Limits
Our Corporate Governance Guidelines provide that the board of directors will not nominate for re-election any non-employee director who has served 15 years or more prior to the applicable election, subject to exceptions granted by the board of directors.
Risk Oversight
The board of directors has specifically delegated responsibility for oversight of the enterprise risk assessment to the Audit Committee. The board of directors is involved in risk oversight through direct decision-making authority on significant matters as well as through the oversight of management and appropriate advice and counsel from legal, financial, and compensation advisors. In particular, the board of directors manages risk by reviewing and discussing periodic reports with management including, but not limited to, reports detailing Piedmont’s risk related to its geographic, tenant, industry, and lease expiration concentrations as well as internal controls and cyber risk. Through its various committees, the board monitors acquisition, disposition, leasing, financing, and cyber activities and has delegated authority to the appropriate levels of management to carry out such activities with appropriate governance reporting at respective committee meetings.
The Audit Committee monitors major issues regarding accounting principles and financial statement presentation and disclosures, including any significant changes in the application of accounting principles, and
major issues regarding the adequacy of Piedmont’s internal controls and analyses prepared by management and/or the independent registered public accounting firm setting forth significant financial reporting issues and judgments made in connection with the preparation of the financial statements. In addition, the Audit Committee follows the effect of regulatory and accounting initiatives, as well as off-balance sheet structures, on Piedmont’s financial statements and the type and presentation of financial information to be included in earnings press releases, reports, and earnings guidance provided to analysts and rating agencies. The Audit Committee annually reviews and discusses with management Piedmont’s major financial and cyber risk exposures and the steps management has taken to monitor and control such exposures. The Audit Committee is also briefed annually on Piedmont’s processes and policies with respect to risk assessment and risk management and the Audit Committee Chair is interviewed in conjunction with Piedmont’s annual risk assessment process. The Audit Committee is briefed annually on insurance coverage limits and any significant change in Piedmont’s insurance policies. Finally, the Audit Committee is briefed quarterly
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on monitoring of Piedmont’s code of ethics, whistleblower policy, and insider trading policies, cyber activities, information security matters, as well as quarterly REIT test and debt covenant compliance calculations. Piedmont’s Insider Trading policy specifically prohibits trading in the Company’s stock when an employee is aware of material, nonpublic information including, among other things, information concerning data security breaches or other cyber security events
impacting the Company or any of its substantial tenants or business partners. The Company has an information security training and compliance program that all employees are required to participate in at least annually. In addition, the Company engages various third parties to conduct penetration testing and an annual information technology audit focusing on entity-level, application and information technology general controls.
Corporate Governance Guidelines and Code of Ethics
Our board of directors, upon the recommendation of the Nominating and Corporate Governance Committee, has adopted Corporate Governance Guidelines establishing a common set of expectations to assist the board of directors in performing their responsibilities. The Corporate Governance Guidelines, which meet the requirements of the NYSE’s listing standards, address a number of topics, including, among other things, director qualification standards, director responsibilities, the responsibilities and composition of the board committees, director access to management and independent advisers, director compensation, and evaluations of the performance of the board. Our board of directors has also
adopted a Code of Ethics, including a conflicts of interest policy, that applies to all of our directors and executive officers including our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. The Code of Ethics meets the requirements of the rules and regulations of the SEC. A copy of our Corporate Governance Guidelines and our Code of Ethics is available on our website at www.piedmontreit.com. Any amendments to, or waivers of, the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waivers.
ENVIRONMENTAL AND SOCIAL MANAGEMENT COMMITTEES
Environmental & Social Steering Committee
Management’s Environmental & Social Steering Committee (the “Steering Committee”) supports our on-going commitment to environmental, health and safety, corporate social responsibility, and other relevant public policy matters. The Steering Committee includes the Executive Vice President of Real Estate Operations(Chair), Chief Financial Officer, Senior Vice President of Property Management, Director of Sustainability, Vice President of Human Resources, Chief Accounting Officer, and consultants as needed, and regularly reports to the ESG Sub-Committee and the Nominating and Corporate Governance Committee. The cross-functional team meets quarterly and assists our executive leadership team in:

Setting general strategy relating to environmental and social matters;

Developing, implementing, and monitoring initiatives and policies based on that strategy;

Overseeing communications with employees, investors and stakeholders with respect to environmental and social matters;

Monitoring and assessing developments relating to, and improving the Company’s understanding of environmental and social matters;

Efficient and timely disclosure of environmental and social matters to internal and external stakeholders; and

Identifying and creating processes to manage risks and opportunities associated with climate change.
The Human Resources department, along with the support of the Regional Management team, facilitates and implements our social programs.
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Energy & Sustainability Committee
The Energy & Sustainability Committee is responsible for our environmental programs and is comprised of the Senior Vice President of Property Management, Vice President of Property Management Operations, Director of Sustainability, all Regional Managers, and consultants as needed. The Energy & Sustainability Committee meets
bi-weekly to determine how to effectively achieve our corporate environmental management targets.
Metrics and information reported by the committees are reviewed and approved by our Internal Audit department for consistency and accuracy prior to publication.
CORPORATE SOCIAL RESPONSIBILITY
Human Rights
All individuals should be provided with equal opportunities and treated with dignity and respect. Piedmont intends to provide an environment that is pleasant; healthful; comfortable; and free from intimidation, hostilities, or other offenses that might interfere with work performance. Discriminatory conduct of any sort — verbal, physical, or visual — will not be tolerated, whether it is sexual or racial in nature or related to national origin, age, religion, citizenship status,
disability, genetic predisposition, or any other characteristic protected by law. Piedmont applies this policy to all of its employees, suppliers, and vendors, regardless of their geographic location. Further, the use of child or forced labor, either by the Company or, indirectly, by the Company’s vendors, is specifically prohibited. A copy of our Human Rights Policy is available on our website at www.piedmontreit.com under the ESG tab.
Social Justice
As the public discussion surrounding equality in our country continues, so do Piedmont’s efforts to oppose prejudice and discrimination. Piedmont is committed to demonstrating fairness, equality, and respect to all individuals that we interact with in our communities to bring about positive change. Our commitment includes regularly monitoring and making any necessary changes
to our own policies, conduct, and actions, as well as promoting anti-prejudice causes in our communities. In an effort to underscore and promote these values, Piedmont made 2020 financial contributions to the Anti-defamation League, the NAACP, The National Association of Criminal Defense Lawyers, and the Brennan Center for Justice.
Our Employees
As of December 31, 2020, we had 137 employees, with 49 of our employees working in our corporate office located in Atlanta, Georgia. Our remaining employees work in regional and/or local property management offices primarily located in our seven major markets. These employees are involved in acquiring, developing, redeveloping, leasing, and managing our portfolio of properties. We outsource various functions where cost efficiencies can be achieved, such as certain areas of information technology, construction, building engineering, and leasing. Approximately 66% of our workforce is salaried, with the remaining 34% compensated on an hourly basis.
Piedmont is an equal opportunity employer. It is the policy of the Company, from recruitment through employment and promotion, to provide equal opportunity at all times without regard to race, color, religion, sex, national origin, age, disability, veteran’s
status, genetic information, or any other characteristic protected by federal, state, or local anti-discrimination laws. Physical or mental disabilities will be considered only as they may relate to essential functions of each particular job, and only in accordance with applicable law. This policy of equal employment opportunity applies to all of Piedmont’s policies relating to recruitment and hiring, promotion, compensation, benefits, training, working conditions, termination and all other terms and conditions of employment.
We strive and are committed to hiring and supporting a diverse workforce that fosters skilled and motivated people working together to deliver results in support of our core business goals and values. We encourage all employees, tenants, and vendors to mutually respect one another’s diversity in order to maintain a cohesive work environment that values fairness and equal treatment. Piedmont uses diversity and inclusion initiatives for both
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compliance obligations and to increase the overall bottom line with a more diverse workforce. In an effort to further this commitment and encourage a broad applicant pool, Piedmont invests in the education and the career development of scholars from two Historically Black Colleges and Universities (HBCUs) including Morehouse College (Atlanta, GA) and Howard University (Washington, DC) through the need-based Piedmont Office Realty Trust Scholarship Program. The program provides scholastic support to rising sophomore students seeking a degree in economics, finance, accounting, engineering, or real estate with a renewable scholarship for three years (for the Piedmont Scholars’ Sophomore, Junior and Senior years). The scholarship also offers each student the opportunity to intern with Piedmont, acquire a firsthand
experience in commercial real estate, and participate in a board level mentoring program. We believe that developing a diverse, talented, and skilled pipeline of future candidates for Piedmont and the commercial real estate industry begins with supporting the education and career paths of students today. Our hope is that the Piedmont Office Realty Trust Scholarship Program provides career success and an expanded knowledge of commercial real estate for participating students.
Additional statistical information regarding our workforce and details regarding Piedmont’s Diversity and Inclusion Initiatives are available on our website at www.piedmontreit.com under the ESG tab.
Performance & Career Development
The results that the Company achieves are determined in large part by how we perform — as individuals, as teams, and as a company. The means by which we focus our efforts, use our talents, manage our time and work together will also impact the degree of our success. Performance management is the organized method of monitoring results of work activities, collecting and
evaluating performance results to determine achievement of goals, and using performance information to make decisions, allocate resources and communicate whether objectives are met. All employees receive an annual performance review. These evaluations are typically done in the same time frame as the review of annual incentive compensation.
Training & Education
In 2020, our employees, managers, and the majority of our contractors received professional training regarding workplace harassment and cyber security. In addition, our employees received diversity and inclusion, ethics, pandemic health and safety training and select managers
received individual management development. All employees receive information security training at least annually and cyber security updates, notices, and reminders are emailed to all employees at least monthly.
Health and Safety
The Company intends to maintain a safe and secure workplace for all of its employees. The Company does not tolerate fighting, threats or other acts of violence against employees, co-workers, job applicants, clients, or vendors. The Company’s Employee Handbook prohibits
workplace harassment and harassment of our employees by third parties, such as contractors, suppliers, vendors, and clients in conjunction with their work. Further, the Company provides medical, dental, vision, disability, and life insurance for each of its employees and their families.
COVID-19 Response
Our highest priority has been, and always will be, protecting the well-being of our tenants, contractors, and employees. We are committed to promoting a safe and healthy environment. We continue to follow all government guidelines and strictly adhere to all
recommended Centers for Disease Control health and wellness protocols in response to the COVID-19 pandemic. We have adjusted our operations in the following categories:
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Communication and Collaboration

Published a Returning to Work tenant guide, outlining building-specific information on operational changes such as elevator spacing, common area regulations, janitorial schedules and security protocols, among others

Facilitated tenant town halls across our markets

Implemented comprehensive signage program providing way finding assistance and emphasizing preventative measures as recommended by the Center for Disease Control (hand washing, distancing, no gathering, etc.)

Shared best practices for workplace modifications and common area protections such as staggered working hours, assigned seating and conference room attendance levels

Assisted tenants in programming staff rotation and staggered working hours to minimize occupancy peak times
Health and Wellness

All vendors and Piedmont personnel are required to wear masks throughout all common areas

Requested all tenants and guests wear masks throughout all common areas

Installed hand sanitizing dispensers throughout our properties, parking garages and amenity areas

Janitorial staffs apply EPA-registered disinfectants to avoid the spread of pathogens; increased cleaning for common areas and paths of travel to a level that is consistent with standards for a clinical waiting room/common area.

Substantially all Piedmont restrooms utilize touchless features/equipment; those that do not are in the process of replacement.

Increased fresh air ventilation and the use of bi-polar ionized airflow where possible.
Vendor Code of Conduct
The Piedmont Office Realty Trust, Inc. Vendor Code of Conduct (the “Vendor Code of Conduct”) describes Piedmont’s expectations of how its vendors conduct business. All vendors engaged in providing products and services to Piedmont are expected to embrace this commitment to integrity by complying with the Vendor Code of Conduct and communicating and enforcing the Vendor Code of Conduct provisions throughout their organization and across their supply chain, including to
sub-vendors and subcontractors. We require that our vendors understand the requirements of the Vendor Code of Conduct, operate in accordance with the expectations outlined in the Vendor Code of Conduct and comply, at a minimum, with all applicable laws, rules, regulations and standards within the geographies in which they operate. A copy of the Vendor Code of Conduct is available on our website at www.piedmontreit.com under the ESG tab.
Political Advocacy
Piedmont does not contribute to or make expenditures on behalf of any federal, state or local candidates for election, referenda, or initiatives; contribute to or make expenditures on behalf of political parties; contribute to or make expenditures on behalf of political committees or other political entities organized and operating under 26 U.S.C. Sec. 527 of the Internal Revenue Code; contribute to any charity or non-profit organization at the request of
any federal, state or local governmental office holder or any candidate for such an office; donate Company time, resources, products or services to any of the foregoing; or pay for advertisements, printing or other campaign expenses. A copy of Piedmont’s Political Spending Policy is available on our website at www.piedmontreit.com under the ESG tab. During the year ended December 31, 2020 the company made no political contributions.
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Corporate Responsibility and Charitable Giving Program
The mission of Piedmont’s Corporate Responsibility and Charitable Giving Program is not only to provide the highest quality services to our tenants on a daily basis, but also to help meet the needs of each local community that we serve by volunteering and/or financially supporting programs related to medical or human needs and children’s programs that improve the overall quality of life, particularly through charities tied to the real estate industry or our tenants.
In 2015, Piedmont created the Piedmont W. Wayne Woody Foundation (“PWW Foundation”) in memory of W. Wayne Woody, a former Chair of the board of directors, through which charitable contributions are distributed to various nonprofit organizations. Recipient organizations are 501(c)(3) entities that fit our charitable giving categories, including being non-discriminatory and non-political, and demonstrate fiscal and administrative stability. In honor of our first responders, during the year ended December 31, 2020, the PWW Foundation made
donations to over 20 charitable organizations that are directly assisting in the battle against COVID-19 in each of our markets.
In addition to financial contributions through the PWW Foundation, Piedmont recognizes the value and benefit of employee volunteerism and fully appreciates its positive impact on the community, the employees, and ultimately, the Company by promoting team building, collaboration, and unity. To promote volunteerism among Piedmont employees, the Company provides a matching program whereby an employee may request time away from work to support a community service project or activity. Preference is given to those organizations that are tied to real estate industry programs or that have a major tenant sponsorship. Our employees have partnered with Piedmont to donate thousands of dollars and hours annually to numerous organizations in each of the markets that Piedmont serves.
CORPORATE ENVIRONMENTAL RESPONSIBILITY
Climate-Related Risk Management
At Piedmont, we consider sustainability to be a long-term commitment which we proudly undertake on behalf of all our stakeholders. Our shareholders and employees expect that their financial and human capital supports conserving our global environment and our tenants and local communities entrust us to reduce our dependence on finite resources and land-fill waste. The Task Force on Climate-related Financial Disclosure (TCFD) divides climate-related risks into two major categories: (1) risks related to the transition to a lower-carbon economy and (2) risks related to the physical impacts of climate change.
The Environmental & Social Steering Committee completed a risk assessment to identify the key physical and transitional risks that are most likely to impact our business. As our buildings are currently in low-risk areas for the physical effects of climate change, we see more risk in the transition to a lower-carbon economy. For a more detailed discussion of the physical and transitional risks that we have identified and our efforts to mitigate them, please refer to our latest ESG Report available on our website at www.piedmontreit.com under the ESG tab.
Environmental Management Programs
Piedmont is dedicated to environmentally sustainable practices that enhance our commitment to provide the highest quality office properties. We strive to own and manage workplaces that are environmentally conscious, productive, and healthy for our tenants and employees by:

Empowering our property teams with the data and tools to sustainably manage their buildings;

Leveraging industry partnerships with BOMA, ENERGY STAR, LEED, and U.S. Green Building Council, to verify and advance the environmental performance of our assets;

Implementing programs that continually improve our environmental performance and manage our climate change risk; and

Setting performance targets that demonstrate our commitment.
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Data and Tools
A key part of our environmental management strategy is to identify tools and empower our property teams to utilize those tools to make an impact.
Environmental Management System Software
We partner with Schneider Electric and utilize their Resource Advisor software to continually track and manage our environmental data, metrics, and targets. Each of our property, regional, and corporate management teams use Resource Advisor for ongoing energy and water project tracking and performance monitoring. We began benchmarking our properties
against one another in 2019 based on: ENERGY STAR score, site energy use intensity (kBtu/SF), and water use intensity (gallons/SF). During 2020, we deployed the GHG Emissions module in Resource Advisor, where we can now benchmark and track GHG emissions at the site, regional, and corporate levels.
Real-time Energy Monitoring
We have partnered with MACH Energy since 2012 to provide real-time energy monitoring at all of our managed buildings, as well as to receive quarterly training and sharing of best practices.
Technology Pilots
We have adopted a Technology Review process that helps us test new opportunities and leverage them when and where appropriate. We have deployed pilots with Schneider Electric’s Building Advisor platform and the InSite Intelligence Platform that go beyond the traditional
building control system and can be considered Fault Detection and Diagnostics software, which identify anomalies in the performance of critical equipment such as boilers, chillers, air handling units, pumps, exhaust fans, etc.
Industry Partnerships
We leverage industry partnerships including BOMA, ENERGY STAR, and U.S. Green Building Council, to confirm and advance the environmental performance of our assets. Additionally, we have recently partnered with International WELL Building Institute (IWBI). The WELL Health-Safety Rating is an evidence-based, third-party verified rating for all new and existing building and space types focusing on operational policies, maintenance protocols, stakeholder engagement and emergency plans to address a post-COVID-19 environment now and into the future. Our Atlanta Galleria properties were the first properties in our portfolio to be awarded the WELL Health-Safety rating and we are actively working to expand this program throughout our portfolio. Regarding our industry partnerships:

We certify all eligible properties to ENERGY STAR every year. Ineligible properties include those that are tenant-managed, have low occupancy, or have a score under 75. We continue to make our best effort to achieve the highest scores feasible for each of our assets.

We certify every eligible property to BOMA 360 every three years. Ineligible properties include those that are tenant-managed or have low occupancy.

Our LEED O&M assets are re-certified every five years.

We will continue to explore other 3rd party certification opportunities that further demonstrate our commitment to providing healthy, environmentally and socially conscious workplaces as they arise.
As of December 31, 2020, approximately 64%, 81%, and 43% of our portfolio was ENERGY STAR, BOMA 360, and LEED certified, respectively.
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Ongoing Initiatives
We continue to identify, plan, and implement initiatives that will enable us to achieve our performance targets. During 2020 we expanded our performance targets, which had been primarily focused on energy intensity, to include water, waste, and emissions targets.
Sustainability Action Plans and Best Practice Sharing
Each property team maintains Energy & Sustainability Action Plans. These action plans are used to track progress on identified action items and ultimately ensure progress towards our ESG goals. Our teams have made tremendous progress with their energy efficiency plans.
To spread those best practices across our other properties, we summarize the most impactful strategies into a list of Best Practices. This list includes recommended actions for improving the building envelope, lighting, and building control system.
Quarterly Energy Competition
We sponsor an energy-savings competition among our engineering teams. The criteria of the competition are based on energy-saving analysis from our real-time energy platform in combination with property engineering team engagement with our data tools. Every
quarter, our Director of Sustainability and consultant, in partnership with a representative from MACH Energy, hosts a meeting for all property managers and engineers to offer training, share best practices, and announce the winning team.
Tenant Engagement
Tenant activities can contribute to or hinder our success and it is our responsibility to engage with them to ensure they can help us be successful. Our property teams collect and analyze tenant feedback via our Kingsley Survey that is conducted every two years. Additionally, our teams share information with tenants via email communications and newsletters. Contents may include information about community events such as bike-to-work day, resources
provided by the local utility company with energy-saving recommendations, or on-site e-waste collection events. In accordance with the SASB disclosure IF-RE-410a.1, we track the portion of our tenants with green leases, and in accordance with SASB Disclosure IF-RE-410a.2, we track the portion of our tenants with separate electricity and water meters.
Retrocomissioning
We understand the value of periodic commissioning to ensure our buildings are operating within optimal designed parameters to meet the needs of our tenants. Every year, the Energy & Sustainability Committee reviews performance metrics of all buildings and takes
any operational changes into consideration, then identifies the properties that should undergo commissioning the following year. This process enables us to keep our buildings running efficiently.
LED Upgrade Program
Our property teams have proactively pursued LED lighting upgrades throughout common areas, back-of-house spaces, parking lots and garages, and anything under our control. In addition, we have begun working with tenants
to upgrade their spaces where possible. Lighting projects are reviewed by the Director of Sustainability and our consultant to ensure we are making quality choices with the best long-term results.
Bi-polar Ionization
As part of our COVID-19 response plan described above, we have partnered with certain of our tenants to install bi-polar ionization in approximately ten of our buildings thus far and plan to continue to expand this program over time as appropriate. Bi-polar ionization cleans indoor air by producing millions of positive and negative ions every
second. The ions attach to and destroy unhealthy particles in the air such as mold, allergens, pathogens, viruses, and volatile organic compounds. Bi-polar ionization devices consume very little energy, require minimal maintenance cost, and are expected to last for 20 years or more. Further, their positive impact on air
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quality in our buildings has been verified through our use
of WellStat IAQ monitoring devices.
Green Finance
Piedmont completed its inaugural issuance of $300 million of green bonds in August 2020. Green bonds proceeds must be allocated to Eligible Green Projects (“EGPs”) which are defined as investments: (a) in buildings, developments, redevelopments, existing building renovations, and tenant improvements, in each case, that have received, or are expected to receive, a LEED Certified, Silver, Gold or Platinum certification (or similar BREEAM standards); (b) that increase energy efficiency; (c) in sustainable water and wastewater management systems; and (d) in renewable energy. The
allocation of the net proceeds of the green bond offering must be to projects completed in the three years prior to the issuance of the notes or during the term of the notes. We fully allocated the net proceeds from our first green bond offering to the acquisition of the Galleria Office Towers in Dallas, TX, which has received LEED Existing Building Operations & Maintenance Certification, and which we believe is an EGP. For more information, please refer to our website, www.piedmontreit.com under the ESG tab.
Performance Metrics and Targets
We have committed to performance targets for energy, water, and GHG Emissions Intensity and Waste Diversion Rate as follows:

Energy Intensity (kBtu/SF): Achieve a 20% reduction in portfolio energy use intensity from 2016 by 2026;

Water Intensity (gallons/SF): Achieve a 20% reduction in portfolio water use intensity from 2018 by 2028;

GHG Emissions Intensity (Scope 1 and 2): Achieve a 20% reduction in portfolio GHG emissions (Scope 1 and 2) intensity from 2018 by 2028; and

Waste Diversion Rate (percentage of waste diverted from landfill): Divert at least 50% of our waste from landfill by 2030.
For further details on our Environmental Management Policy, initiatives and goals, and an update on our progress against these targets, please refer to our latest ESG Report available on our website at www.piedmontreit.com under the ESG tab.
STOCKHOLDER ENGAGEMENT AND OUTREACH
Our commitment to understanding the interests and perspectives of our stockholders is a key component of our corporate governance strategy and compensation philosophy. Throughout the year, we meet with our investors to share our perspective and to solicit their feedback on our strategy and performance. During 2020, our executive management team participated in several investor conferences and held over 300 individual meetings with our investors and analysts. Periodically, we also hold investor days where our management team meets with stockholders and industry research analysts to
discuss our strategy and performance and respond to questions, as well as to tour certain properties in our portfolio. Further, our board has periodically invited significant investors to meet with them directly and our management team has periodically engaged third parties to conduct perception surveys so that we can hear our stockholders’ perspectives and opinions about the Company as we believe the insights provided by our stockholders provide valuable information to be considered in our strategic decisions. Our Charter states that our stockholders have the right to amend the Bylaws.
COMMUNICATIONS WITH STOCKHOLDERS OR OTHER INTERESTED PARTIES
We have established several means for stockholders or other interested parties to communicate their concerns to the board of directors. If the concern relates to our financial statements, accounting practices or internal controls, the concerns should be submitted in writing to the Chair of our Audit Committee in care of our Secretary at our headquarters address. If the concern relates to our
governance practices, business ethics or corporate conduct, the concern may be submitted in writing to the Chair of our Nominating and Corporate Governance Committee in care of our Secretary at our headquarters address. If a stockholder is uncertain as to which category his or her concern relates, he or she may communicate it to any one of the independent directors in care of our
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Secretary at our headquarters address. Stockholders or other interested parties who wish to communicate with our Board Chair or with the non-management directors as a group may do so by writing to our Board Chair at our headquarters address.
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EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
The following Compensation Discussion and Analysis explains our compensation philosophy, objectives, policies and practices and the decisions made with respect to compensation for 2020 for our President and Chief Executive Officer (“CEO”), Chief Financial and Administrative Officer (“CFO”) and three other most highly compensated executive officers as of December 31, 2020 (our “NEOs”).
Executive Summary
Notwithstanding the disruption to the office sector in 2020, Piedmont continued its track record of delivering Core FFO growth for eight out of the last nine years, generating $0.10 of additional Core FFO per share, or approximately a 6% increase, for the year ended December 31, 2020, as compared with the year ended December 31, 2019. From an operational perspective, shelter-in-place orders during the second quarter of 2020 brought new tenant leasing activity to a virtual standstill. However, despite this challenging environment, we executed over 1.1 million square feet of leasing for the year, the majority of which related to renewals for existing tenants. 2020 was a successful year from a transactional perspective. We exited two non-core markets, Philadelphia and Northern New Jersey, and recycled proceeds into two Sunbelt markets on an accretive basis. These transactions allowed us to continue to realize the benefits of further concentrating our portfolio in unique, mixed use, amenity-rich submarkets that are in close proximity to major education centers and transportation nodes. Net income for the year ended December 31, 2020 was $232.7 million, reflecting significant gains as a result of the disposition activity noted above. Our Total Stockholder Return (“TSR”) for 2020 ranked in the upper half of our peer group (see Market Reference Data below). Despite these accomplishments, we fell short of our ambitious new leasing and transactional goals that were established by the board at the beginning of 2020, prior to the onset of the COVID-19 pandemic, resulting in 2020 STIC program payouts at levels 26% below target, or 35% lower than the previous year, for our Chief Executive Officer and most of our other NEOs.
During the year ended December 31, 2020, our Compensation Committee also made deferred stock awards pursuant to our 2019 Long Term Incentive Compensation (“LTIC Plan”). For the three-year performance period ended December 31, 2019, our TSR was 24.2% and ranked in the top-quartile compared to
our peers, resulting in a payout at maximum level for the performance share component of our LTIC plan. For the annual deferred stock component of our LTIC plan, we performed above target for two of the three quantitative metrics as set forth under “Long-term Incentive Compensation, Annual Deferred Stock Grant” below. The third quantitative target, general and administrative expense compared to budget, was not met due to increased accruals associated with the Company’s performance share plan as a result of the Company’s top quartile stock performance for the 2019 calendar year. Therefore, the Compensation Committee and board of directors approved achievement of the board discretion component of the 2019 Long Term Incentive Compensation (“LTIC”) Plan at above target level, resulting in awards ranging from 91-104% of target levels in February of 2020.
Consideration of “Say on Pay” Voting Results and Compensation Best Practices
At our 2020 annual meeting, we held a stockholder advisory vote on the compensation of our NEOs. Our stockholders overwhelmingly approved the compensation of our NEOs, with approximately 96% of stockholder votes cast in favor of our “say on pay” resolution. Based on these results, we believe our programs are effectively designed and working well in alignment with the interests of our stockholders. Further, we believe that our compensation programs include a number of best practices such as:

Our compensation of our Chief Executive Officer generally places a greater emphasis (79%) on variable, performance-based compensation than typical market practice;

52% of our Chief Executive Officer’s pay opportunity is in the form of long-term, equity based compensation;

50% of the target for our LTIC Plan is delivered in the form of performance shares, which are earned based on our multi-year TSR relative to our peers;

All of our short-term and long-term incentive programs contain caps on payouts and minimum thresholds for awards.

The quantitative metrics of our STIC program and the Annual Deferred Stock Unit portion of our LTIC programs are tied to operational, financial, or market performance measures derived from our annual
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business plan, and our Compensation Committee reserves the right to decrease payouts for these programs in their discretion;;

Our employment agreements with our Chief Executive Officer, Chief Financial and Administrative Officer and all other officers with employment agreements contain “clawback” provisions, which require them to reimburse us for incentive-based compensation they have received if we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws (see “Executive Clawback Provisions” below for further details);

Our NEOs and directors are required to meet stock ownership guidelines;

Our Insider Trading Policy prohibits hedging and pledging of our stock by our executive officers and directors;

We award minimal perquisites and no supplemental executive benefits to our NEOs; and

We do not provide tax gross ups to our NEOs.
As a result of the above considerations, our Compensation Committee decided to retain our general approach to executive compensation for 2020, which links the compensation of our NEOs to our operating objectives and emphasizes the enhancement of TSR.
Compensation Philosophy and Objectives
We seek to maintain a total compensation package that provides fair, reasonable and competitive compensation for our executives while also permitting us the flexibility to differentiate actual pay based on the level of individual and organizational performance. We place significant emphasis on annual and long-term performance-based incentive compensation, including cash and equity-based incentives, which are designed to reward our executives based on the achievement of predetermined individual and company goals, including, among others, TSR relative to a comparative peer group as further described below.
The objectives of our executive compensation programs are:

to attract and retain candidates capable of performing at the highest levels of our industry;

to create and maintain a performance-focused culture, by rewarding company and individual performance based upon objective predetermined metrics;

to reflect the qualifications, skills, experience and responsibilities of each NEO;

to link incentive compensation levels with the creation of stockholder value;

to align the interests of our executives and stockholders by creating opportunities and incentives for executives to increase their equity ownership; and

to motivate our executives to manage our business to meet and appropriately balance our short- and long-term objectives.
Compensation Committee Responsibilities
Our executive compensation program is administered by the Compensation Committee. The Compensation Committee sets the overall compensation strategy and compensation policies for our executive officers and directors. The Compensation Committee has the authority to determine the form and amount of compensation appropriate to achieve our strategic objectives, including salary, bonus, incentive or performance-based compensation, and equity awards. The Compensation Committee reviews its compensation strategy annually to confirm that it supports our objectives and stockholders’ interests and that executive officers are being rewarded in a manner that is consistent with our strategy.
With respect to the compensation of our Chief Executive Officer, the Compensation Committee is responsible for:

reviewing and approving our corporate goals and objectives with respect to the compensation of the Chief Executive Officer;

evaluating the Chief Executive Officer’s performance in light of those goals and objectives; and

determining the Chief Executive Officer’s compensation (including annual base salary level, annual cash bonus, long-term incentive compensation awards, perquisites and any special or supplemental benefits) based on such evaluation.
With respect to the compensation of NEOs other than the Chief Executive Officer, the Compensation Committee is responsible for:

reviewing and approving the compensation; and

reviewing and approving grants and awards under all incentive-based compensation plans and equity-based plans.
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Role of the Compensation Consultant
To assist in establishing our 2020 compensation plans and analyzing competitive executive compensation levels for 2020, the Compensation Committee utilized the services of FPL Associates L.P. (“FPL”), a nationally recognized compensation consulting firm. FPL was not engaged by management to perform any work on its behalf during 2020 and the Compensation Committee considered FPL to be independent with regard to services performed on its behalf during 2020.
During 2020, FPL provided advice and recommendations regarding our short and long term incentive compensation plans for our employees, including our NEOs. In addition, FPL provided our Compensation Committee input on our director compensation program, competitive market compensation data and recommendations for target pay levels for each component of our 2020 executive compensation program.
The FPL compensation consultant periodically attended Compensation Committee meetings as requested by the Compensation Committee and consulted with our Compensation Committee Chair, our Director of Human Resources, our Chief Executive Officer, and our Chief Financial Officer as directed by the Compensation Committee on compensation related issues.
Compensation Consultant Independence Assessment
During 2020, the Company requested and received information from FPL addressing its independence and potential conflicts of interest, including the following factors: (1) other services provided to us by the consultant; (2) fees paid by us as a percentage of the
consulting firm’s total revenue; (3) policies or procedures maintained by the consulting firm that are designed to prevent a conflict of interest; (4) any business or personal relationships between the individual consultants involved in the engagement and a member of the Compensation Committee; (5) any company stock owned by the individual consultants involved in the engagement; and (6) any business or personal relationships between our executive officers and the consulting firm or the individual consultants involved in the engagement. Based on an assessment of these factors, including information gathered from directors and executive officers addressing business or personal relationships with the consulting firm or the individual consultants, the Compensation Committee concluded that FPL is independent and that the work of FPL did not raise any conflict of interest.
Role of Executive Officers in Compensation Decisions
Our Chief Executive Officer reviews the performance of each of the other NEOs and considers the recommendations of our independent compensation consultant with regard to each of the other NEOs. Based on this review and input, he makes compensation recommendations to the Compensation Committee for all of the NEOs other than himself, including recommendations for performance targets, base salary adjustments, the discretionary components of our short-term cash incentive compensation, and long-term equity-based incentive awards. The Compensation Committee considers these recommendations along with data and input provided by our independent compensation consultant. The Compensation Committee retains full discretion to set all compensation for the executive officers.
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Market Reference and Benchmark Compensation Data
In October 2020, FPL provided our Compensation Committee with a competitive market analysis of four of our 2020 NEOs’ pay level relative to the practices of a peer group of 11 public REITs. The peer group includes companies that either primarily invest in office properties or are diversified REITs whose portfolio includes significant office assets. In addition, companies that were recommended were generally no less than half the size and no more than two and a half times as large as Piedmont. The following table provides the names and estimated financial information for each peer company at the time the Compensation Committee reviewed the market data in October 2020 ($ in millions):
Company
Implied Equity
Market
Capitalization
($)
Total
Capitalization
($)
Sector
Brandywine Realty Trust 1,773.9 3,999.4
Office
Columbia Property Trust, Inc. 1,248.8 2,960.7
Office
Corporate Office Properties Trust 2,690.3 4,767.6
Office
Cousins Properties Incorporated 4,247.6 6,271.2
Office
Easterly Government Properties, Inc. 2,020.3 2,921.4
Office
Equity Commonwealth 3,242.6 3,390.8
Office
Highwoods Properties, Inc. 3,583.2 5,971.5
Office
Lexington Realty Trust 2,924.7 4,414.8
Industrial
Mack-Cali Realty Corporation 1,265.5 4,378.5
Office
Paramount Group, Inc. 1,717.2 6,223.1
Office
Washington Real Estate Investment Trust
1,657.9 2,740.1
Diversified
Median 2,020.3 4,378.5
Piedmont Office Realty Trust, Inc. 1,710.2 3,333.4
Office
The above companies are consistent with the peer group used for market comparison in 2019. The overall composite of the peer group is constructed so that Piedmont is at the approximate median in terms of implied market capitalization.
We apply our compensation policies to all of our NEOs on the same basis, with differences in compensation opportunities between each of our executive officers reflecting each of the officers’ roles, responsibilities and personal performance within our Company, as well as market pay practices. In October 2020, FPL provided our Compensation Committee with an analysis of four of our NEO’s 2020 target pay opportunity and 2019 reported pay relative to the compensation paid to executives employed by the peer group above in comparable positions. Mr. Wells was not included in the analysis as he became an NEO after the analysis was prepared. The analysis utilized the most recently filed proxy for each company in the peer group and FPL’s proprietary compensation database. The pay opportunity of our CEO and CFO was benchmarked to the peer group based on other CEOs and CFOs as disclosed in 2020 proxy statements. Both proxy data and supplemental peer group data for applicable benchmark peers based on FPL’s proprietary compensation database were utilized for Mr. Kollme and Mr. Wiberg’s pay analysis. Benchmark peer data used to compare each of our NEOs’ compensation was as follows:
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Total 2020 Benchmark Compensation(1)
(in thousands)
25th
Percentile
50th
Percentile
75th
Percentile
Average
President and Chief Executive Officer
Proxy Data of Peer Group $ 4,055 $ 4,912 $ 5,162 $ 5,017
EVP, Chief Financial and Administrative Officer
Proxy Data of Peer Group $ 1,747 $ 2,076 $ 2,210 $ 2,059
EVP — Capital and Strategy
Proxy and Supplemental Data of Peer Group
$ 854 $ 1,173 $ 1,646 $ 1,289
EVP — Northeast Region and Co-Head of Development
Proxy Data and Supplemental Data of Peer Group
$ 963 $ 1,216 $ 1,596 $ 1,402
(1)
Total 2020 Benchmark Compensation includes base salary, annual short-term cash incentive, eligible long-term equity incentives and other miscellaneous income and is based on actual 2019 compensation reported by peer companies.
In addition to considering market reference data set forth above in making decisions about our NEOs’ compensation opportunities and actual compensation to be paid, the Compensation Committee considers other factors such as each executive officer’s experience, scope of
responsibilities, performance and prospects; internal equity in relation to other executive officers with similar levels of experience, scope of responsibilities; and individual performance of each NEO during their tenure with Piedmont.
Employment and Other Agreements with our Named Executive Officers
Employment Agreements
We are currently party to employment agreements with Messrs. Smith, Bowers, and Kollme. Mr. Bowers’ agreement was originally entered into in 2007 and Messrs. Smith and Kollme’s agreements were entered into during 2019. Each of these agreements renew annually unless either party gives 90 days written notice prior to the end of the renewal term or his employment otherwise terminates in accordance with the terms of the agreement. Significant terms include executive clawback provisions and severance in the event of certain circumstances as further described below.
Executive Clawback Provisions
All of our NEOs that are subject to employment agreements have clawback provisions. If we are required to prepare an accounting restatement due to our material noncompliance, as a result of misconduct, with any financial reporting requirement under the securities laws, Messrs. Smith, Bowers, and Kollme’s agreements contain provisions that provide for the executive to reimburse us, to the extent required by Section 304 of the Sarbanes-
Oxley Act of 2002, for any incentive-based (whether cash or equity-based) compensation received by the executives from us during the 12-month period following the first public issuance or filing with the SEC (whichever occurs first) of the financial document embodying such financial reporting requirement. In addition, each executive will reimburse us for any profits realized from the sale of our securities during that 12-month period.
Severance
Messrs. Smith, Bowers, and Kollme’s employment agreements entitle them to receive severance payments under certain circumstances in the event that their employment is terminated. These circumstances and payments are described below under “Potential Payments Upon Termination or Change of Control.” Our Compensation Committee believes that these severance payments were an important factor in attracting these individuals to join our Company and/or are an important factor in their retention. The agreements with these individuals do not provide for tax “gross ups” in the event such payments are made.
Elements of 2020 Executive Compensation
Base Salary
Our Compensation Committee believes that payment of a competitive base salary is a necessary element of any compensation program that is designed to attract and retain talented and qualified executives. The goal of our
base salary program is to provide salaries at a level that allows us to attract and retain qualified executives while preserving significant flexibility to recognize and reward individual performance with other elements of the overall compensation program. Base salary levels also affect
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short-term cash incentive compensation because each NEO’s target opportunity is expressed as a percentage of base salary. The following items are generally considered by the Compensation Committee when determining base salary annual increases; however no particular weight is assigned to an individual item:

market data provided by the compensation consultant;

comparability to compensation practices of other office REITs of similar size;

our financial resources;

the executive officer’s experience, scope of responsibilities, performance and prospects;

internal equity in relation to other executive officers with similar levels of experience, scope of responsibilities, performance, and prospects; and

individual performance of each NEO during the preceding calendar year.
In February of 2020, FPL recommended that, in light of strong 2019 performance, Mr. Smith’s 2020 salary be increased to $600,000 to better align his compensation with higher peer group levels. In addition, FPL recommended that Mr. Bowers’ salary remain flat as his compensation was already generally aligned with the top quartile of the peer group and that all other NEOs should receive modest increases following several years of generally remaining flat. After considering the recommendations made by FPL, as well as the Chief Executive Officer’s feedback regarding individual performance on all NEOs other than himself, our Compensation Committee approved 2020 base salaries for our NEOs in accordance with FPL’s recommendations.
Short-Term Cash Incentive Compensation Plan
We provide an annual STIC Plan for our NEOs that sets forth target cash incentive payments as a percentage of each NEO’s base salary as follows:
Annual Short-Term Cash
Incentive Compensation as a %
of Base Salary
Name and Position
Threshold
Target
Maximum
C. Brent Smith President and Chief Executive Officer 67.5% 135% 202.5%
Robert E. Bowers EVP — Chief Financial Officer and Administrative Officer 50% 100% 150%
Christopher A. Kollme EVP — Capital and Strategy 50% 100% 150%
George M. Wells EVP — Real Estate Operations 35% 70% 105%
Robert K. Wiberg EVP — Northeast Region and Co -Head of Development 35% 70% 105%
The actual amounts earned under the STIC Plan may be greater or less than the NEO’s respective target based on actual performance against the performance goals established by the Compensation Committee at the beginning of each year, as well as assessment of each NEO’s personal contributions and performance for the year. The following table sets forth the relative weighting of each of the performance goals established by the Compensation Committee for the 2020 STIC Plan:
NEO 2020 Short Term Incentive Plan
[MISSING IMAGE: tm219206d1-pc_neoshort4c.jpg]
All of the performance measures established by the Compensation Committee for 2020 were based on specific corporate metrics measured on a quantitative basis, with the exception of the Board Discretion/ Individual Performance measure
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which the Compensation Committee considered on a qualitative basis. Those qualitative considerations included, but were not limited to, the Chief Executive Officer’s assessment of each NEO’s performance other than his own, as well as the board’s assessment of certain overall corporate goals, such as relative ESG performance as compared to our peers. The performance goals that the Compensation Committee established for each of the quantitative metrics were derived from critical components of our annual business plan and were considered achievable, but not without above average performance. 2020 target and actual performance for each of the STIC performance goals were as follows:
Performance Measure
Threshold
Performance
Goal
Target
Performance
Goal
Maximum
Performance
Goal
Actual
Performance
Over(Under)
Performance
Core FFO per share
$1.8640
$1.9617
2.06
$1.8947
(3.4)%
Balance Sheet Management:
Maintain year end debt-to- EBITDA ratio below 6x
Achieve or not
Maximum if all 3 balance sheet management goals are achieved
5.8x
Achieved(1)
Maximum debt % (Debt/ Gross Asset Value)
less than or equal to 40% at end of year
34.4%
Achieved(1)
Ladder maturities (excludes line of credit)
less than or equal to 30% per annum
less than or equal to 30% per annum
Achieved(1)
Weighted Average Committed Capital Per Square Foot Leased Relative to Budget
New
$10.70
$9.73
$8.76
$8.48
Max
Renewal
$5.69
$5.17
$4.65
$3.77
Max
Leasing Targets: (in square feet)
New SF Leasing(2)
698,250
931,000
1,163,750
242,934
Below Threshold
Renewal SF Leasing(2)
844,500
1,126,000
1,407,500
1,196,236
6.2%
Capital Allocations/ Markets (in millions)
Acquisitions
$303.0
$404.0
$505.0
$50.6(3)
Below Threshold
Dispositions
$588.1
$784.1
$980.1
$490.0
Below Threshold
Board Discretion/ Individual Performance
Qualitative
Qualitative
Target
(1)
Maximum Achievement is attained if all three balance sheet components are met.
(2)
Excludes executed leases for less than a one-year term.
(3)
For purposes of the analysis, the acquisition of The Galleria Office Towers that closed on February 12, 2020 was considered a 2019 transaction.
Core FFO performance is a non-GAAP financial measure that is considered important because our ability to meet consensus estimates of Core FFO is a key factor for equity analysts and when present or potential stockholders make investment decisions about our securities. See the definition of Core FFO and the reconciliation of GAAP net income applicable to common stock to Core FFO on pages 41 and 42 of our Annual Report on Form 10-K for the year ended December 31, 2020. Every 1% variance in performance increases or decreases the targeted award by 10%, based on relative weighting. Core FFO per share
for the year ended December 31, 2020 was negatively impacted by delayed leasing and charges related to collectibility issues, both of which were a direct result of the COVID-19 pandemic.
Balance Sheet Management is important because maintaining the appropriate capital structure, including the magnitude of total debt, mix of unsecured vs secured debt, impact upon Net Debt to EBITDA ratio, compliance with debt covenants, debt to gross assets ratio, and laddering of maturities is critical to the overall financial
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strength of the Company. Additionally, as a Real Estate Investment Trust (“REIT”), we are required to pay out 90% of our taxable income each year in the form of dividends to our stockholders. Therefore, we must constantly manage credit ratios and proactively seek new sources of capital for our Company which requires careful management of the magnitude, timing, and cost of our borrowings. Individual metrics are measured as “Achieved” resulting in full target payout or “Not Achieved” resulting in no payout; however, if all metrics are achieved, then the maximum award is deemed earned, based on relative weighting.
Weighted Average Committed Capital Per Square Foot measures the future capital outlays that our management team has committed to in order to execute leases during the current year. This metric serves as a cross-check to ensure that management does not trade long-term capital expenditures to achieve leasing goals. The target performance level for this metric is based on goals for commitments that are market specific and the weighted average performance goal is a function of the level of actual leasing activity in our respective markets. Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting.
Leasing Targets are important as managing lease renewals, leasing up vacant space, and keeping our portfolio as fully leased as possible directly impacts our cash flow, financial results, and long-term growth of our FFO and value of our equity securities. Targets are directly tied to our annual business plan. Every 1% variance in performance increases or decreases the targeted award by 2%, based on relative weighting. As mentioned above, new leasing for the year ended December 31, 2020 was negatively impacted by the COVID-19 pandemic as tours of office space came to a virtual standstill for several months. As a result, we did not achieve threshold performance compared to our new leasing target that was established at the beginning of 2020.
Capital Allocations/Markets refers to how we allocate our capital resources, whether it be to acquire new properties or to repurchase shares of our common stock, and is important because it impacts our strategic goals, including the overall composition and quality of our portfolio of assets, as well as our competitiveness within each of our markets. The quality of our portfolio and our management team’s ability to allocate capital resources effectively are two factors that equity analysts and present or potential stockholders consider when they assess our overall enterprise value. Any shortfall in our capital acquisitions target may be offset on a dollar for dollar basis by share repurchases pursuant to our board approved stock repurchase program. Every 1% variance in performance increases or decreases the targeted award by 2%, based on relative weighting. Transactional activity
was unusually low during the year ended December 31, 2020 as a result of the COVID-19 pandemic and as a result, we did not achieve threshold performance in either the acquisition or disposition category.
The Board Discretion component is considered important as it allows the Compensation Committee to appropriately reward aspects of the management team’s or individual’s performance that may not be captured through the use of the quantitative metrics, including progress regarding environmental and social goals and diversity and inclusion initiatives. For 2020, our Compensation Committee and the board of directors considered management’s well timed strategic decision to increase portfolio investments in Sunbelt markets and dispositions in gateway markets; management’s efforts to protect the health and safety of the Company’s tenants, employees, and vendors during the COVID-19 pandemic; the Company’s achievement of rental collection rates among the highest in its peer group during the COVID-19 pandemic; and advances in the Company’s ESG and diversity and inclusion initiatives. As a result of these considerations, our Compensation Committee and the board of directors determined to assess the achievement of the board discretion component within our NEOs STIC Plan at target level, resulting in an overall calculated STIC payout at 74.42% of target for the year. Individual awards are subject to further adjustment based on the CEO’s assessment of each officer’s individual performance, including attainment of department-specific goals and performance above expected goals, as well as response to challenges caused by the pandemic.
Actual awards are calculated based on performance against the above metrics with performance below threshold for an individual component resulting in no payout for that particular component and out performance for each component being capped at 150%. In February 2021, after (i) reviewing the results of the quantitative performance measures as set forth in the table above; (ii) considering the Chief Executive Officer’s assessment of each of the other NEO’s performance; and (iii) assessing the Chief Executive Officer’s performance, the Compensation Committee determined actual awards for the 2020 performance period for each individual NEO as follows:
Name
2020
Target
Annual
Incentive
($)
2020
Actual
Annual
Incentive
($)
2020
Actual
Annual
Incentive as a
% of Target
Mr. Smith 810,000 600,000 74%
Mr. Bowers 450,000 335,000 74%
Mr. Kollme 358,750 235,000 66%
Mr. Wells 220,500 235,000 107%
Mr. Wiberg 243,950 185,000 76%
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Long-Term Incentive Compensation Plan
The objective of our LTIC Plan is to attract and retain qualified personnel by offering an equity-based program that is competitive with our peer companies and that is designed to encourage each of our NEOs, as well as our broader employee base, to balance long-term company performance with short-term company goals and to foster
employee retention. Each NEO’s annual LTIC target opportunity is divided equally between a Performance Share Program and an Annual Deferred Stock Unit Opportunity. The following table sets forth the relative weighting of each of the performance goals established by the Compensation Committee for the LTIC Plan:
NEO Long-Term Incentive Compensation Plan:
50% Performance Share Program/50% Deferred Stock Unit Opportunity
[MISSING IMAGE: tm219206d1-pc_neolong4c.jpg]
Performance Share Program. Approximately half of our NEOs’ LTIC opportunity relates to a multi-year performance share compensation program (the “Performance Share Program”). The purpose of the Performance Share Program is to motivate and reward long term performance. Participants are provided with the opportunity to earn shares of Piedmont stock based on our TSR performance relative to a broad, pre-determined peer group over a three-year performance period. Performance cycles overlap, with a new three-year performance cycle beginning each year. The TSR Percentile Rank for each active plan will continue to change throughout the respective performance period. After the end of each three-year performance period, any earned awards will be paid by the Company based upon actual relative performance against the board-determined peer group. A grant date for each Performance Share Program is established when the Compensation Committee and the board of directors approve the multi-year plan. In accordance with SEC rules, the grant date fair value of the Performance Share Program, assuming target performance over the applicable three-year period, is included in the Summary Compensation Table in the year of grant. As such, the following discussion pertains to the 2020-22 Performance Share Program.
The peer group for the 2020-22 Performance Period was established at the beginning of the 2020 calendar year and included the same companies that were used for the 2019-21 plan other than the removal of TIER REIT due to its acquisition by Cousins Properties and the addition of JBG Smith, an office peer in one of the Company’s major markets. The peer group used for the performance share plan includes most of the same companies that our compensation consultant used for market reference and benchmarking purposes in October of 2020 (See “Market Reference and Benchmark Compensation Data” above) with the exception of Easterly Government Properties, Inc. and Lexington Realty Trust, which were not included in the 2020-22 Performance Share peer group because Easterly focuses primarily on governmental tenants and Lexington’s portfolio consists of industrial properties. Douglas Emmett, Inc., Empire State Realty Trust, Inc., Franklin Street Properties Corp., Hudson Pacific Properties, Inc., JBG Smith, and Kilroy Realty Corporation were not included in the “Market Reference Data” analysis compiled by our compensation consultant because either they did not fit the desired size profile or the compensation consultant felt that the cost of living was too disparate with Atlanta, where most of our executives reside, and would unfairly skew the market compensation data used for comparison purposes.
Due to the COVID-19 pandemic’s negative impact on Piedmont’s absolute TSR, as well as our peers’, during 2020, our Compensation Committee, acting upon advice from our independent compensation consultant, determined that all performance plans beginning in or after 2021 will include an absolute TSR modifier that will cap or reduce calculated payouts when TSR for the respective performance period is negative.
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Participants in the Performance Share Program have a defined target award expressed as a number of shares. The target number of shares established for each participant may be earned if Piedmont’s TSR is at the median of the peer group, up to 200% of target may be earned if Piedmont’s TSR is at or above the 75th percentile of the peer group, and 50% of target may be earned if Piedmont’s TSR at the 25th percentile of the peer group. No shares are earned if Piedmont’s TSR is below the 25th percentile. If our return is between the 25th and 75th percentile, the payout will be determined by linear interpolation. The following table sets forth the status of each active Performance Share Plan as of December 31, 2020:
TSR Percentile Rank as of
December 31, 2020
Actual or Estimated Payout Percentage of
Target Based on Percentile Rank
as of December 31, 2020
2018 – 20 Performance Share Plan 75.0% 200% (Actual)
2019 – 21 Performance Share Plan 60.0% 140% (Estimated)
2020 – 22 Performance Share Plan 56.0% 125% (Estimated)
For the range of shares that could be earned by each NEO for the 2020 – 22 performance period, see the Grants of Plan Based Awards Table under 2020 Executive Compensation Tables below.
Annual Deferred Stock Unit Opportunity. The other half of our NEOs’ LTIC opportunity is based upon an annual targeted dollar value of deferred stock units, as determined by the Compensation Committee, that considers four performance measures. While such measures establish a framework for the Compensation Committee to evaluate performance, the actual award is ultimately established by the Compensation Committee in its sole discretion irrespective of actual performance. As such, a grant date for accounting purposes is not established until the Compensation Committee has
reviewed the Company’s actual performance against the metrics, determined the value of stock to be awarded, noted the current market value of stock, and exercised its discretion to determine the pool of shares to be awarded. This process normally occurs during the calendar year following the performance period after year-end audit results are available. In accordance with SEC rules, therefore, the deferred stock units awarded pursuant to this component of our LTIC plan are included in the Summary Compensation Table in the calendar year of the award, which is subsequent to the performance period. As such, the following discussion pertains to the annual deferred stock unit award made in calendar 2020 based on the 2019 performance period.
The performance targets that the Compensation Committee established for the quantitative metrics for the 2019 performance period directly correlate to the Company’s annual business plan and were considered achievable, but not without above average performance. The following table sets forth the target goals for each of the quantitative measures as well as the actual results for each performance measure (dollars in millions except for per share amounts):
2019 Goal
Measure
Threshold
Target
Maximum
Actual
Core FFO (per share) $ 1.65 $ 1.74 $ 1.83 $ 1.79
Actual Adjusted Funds From Operations Before Capital Expenditures
Relative to Budget (in millions)
$ 176.8 $ 196.4 $ 216.0 $ 215.4
Actual General and Administrative Expense Relative to Budget (in millions) $ 36.7 $ 33.4 $ 30.1 $ 37.9
Board Discretion/Individual Performance
Qualitative
Qualitative
Qualitative
Above
Target
Core FFO performance is a non-GAAP financial measure that is considered important because our ability to meet consensus estimates of Core FFO is a key factor for equity analysts and when present or potential stockholders make investment decisions about our securities. See the definition of Core FFO and the reconciliation of GAAP net income applicable to common stock to Core FFO on pages 32 – 34 of our Annual Report on Form 10-K for the year ended December 31, 2019.
Actual Adjusted Funds from Operations (“AFFO”) Before Capital Expenditures vs Budget is a non-GAAP financial
measure that more closely mirrors the actual cash flow generated by the company in that it removes certain non-cash revenue and expense items such as the effect of straight-line rents which are not adjusted when computing FFO in accordance with the definition established by NAREIT. AFFO is considered important because it measures the Company’s ability to fund dividends and debt repayments, as well as acquisitions and other capital expenditures.
Actual General and Administrative Expense Relative to Budget is a non-GAAP financial measure that is
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considered important because it measures how efficiently we manage our controllable overhead expenses such as corporate labor, professional services, and stockholder communication expenses, among others.
The Board Discretion component allows the Compensation Committee to appropriately recognize aspects of the management team’s or individual’s performance that may not be captured through the use of the quantitative metrics, including progress regarding environmental and social goals and diversity and inclusion initiatives. For the 2019 deferred stock grant opportunity, the Compensation Committee and the board of directors
considered the quantitative measures that were approved at the beginning of the performance period, recognizing that the management team exceeded two of the three metrics. The third quantitative target, general and administrative expense compared to budget was not met due to increased accruals associated with the Company’s performance share plan as a result of the Company’s top quartile stock performance for the 2019 calendar year. Therefore, the Compensation Committee and board of directors unanimously approved a 5% increase to the Board Discretion component, thereby increasing award payouts by 5% of target.
Each individual NEO’s targeted number of shares was established by the Compensation Committee based on recommendations from our compensation consultant and our former Chief Executive Officer for each NEO, other than himself, regarding comparability with awards to officers of our peer group of office REITs as well as taking into consideration each officer’s salary and experience level. The actual number of shares that each individual NEO was eligible to earn was determined by the Compensation Committee after considering performance against the above metrics according to the following scale:
Measure
Adjustment Factor
Incentive Available to be
Earned Based on
Actual Performance
(as a Percentage of Target)
Relative
Weighting
Threshold
Maximum
Core FFO per share to Budget
Every 1% variance in performance increases or decreases the targeted award by 10%, based on relative weighting
50% 150% 25%
Actual Adjusted Funds From Operations Before Capital Expenditures Relative to Budget
Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting
50% 150% 25%
Actual General and Administrative Expense Relative to Budget
Every 1% variance in performance increases or decreases the targeted award by 5%, based on relative weighting
50% 150% 25%
Board Discretion/ Individual Performance Qualitative 25%
After considering the metrics above, as well as our CEO’s evaluation of the performance of each NEO other than himself, on February 19, 2020 the Compensation Committee determined the number of deferred stock units to be granted to each of our NEOs pursuant to the 2019 Deferred Stock Unit Opportunity. See “Grants of Plan Based Awards for 2020” table below for information on the number of deferred stock units granted to each of the NEOs during 2020. For the awards granted, 25% vested immediately, while the remaining 75% vests in 25% increments over the next three years on the grant anniversary date. Any dividend equivalent rights are paid out upon vesting of the underlying shares.
To date, LTIC awards have only been granted in the form of performance shares or deferred stock units pursuant to the Amended and Restated 2007 Omnibus Incentive Plan approved by our stockholders. The Compensation
Committee has determined that, as a REIT, the grant of such awards is appropriate because our high dividend distribution requirements lead to a significant portion of our total stockholder return being delivered through our dividends. Although our Amended and Restated 2007 Omnibus Incentive Plan permits the issuance of other types of equity awards, including stock options, we have never issued stock options to any of our employees, including our NEOs, and anticipate that any future equity awards granted will continue to be similar in form to our previous awards. Further, our Compensation Committee has prohibited the cash buyout of underwater options, should any options ever be issued. Although we have not attached specific holding periods for our equity-based awards, in general our equity-based awards vest or are earned over a three year period. In addition, each of our executive officers, including our NEOs, is subject to stock
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ownership requirements (see Stock Ownership Guidelines below). We feel that appropriately designed equity-based awards, particularly those with future vesting provisions, promote a performance-focused culture and align our employees’ interests with those of our stockholders, thereby motivating their efforts on our behalf and strengthening their desire to remain with us for an extended period of time.
Benefits
All of our NEOs currently participate in the health and welfare benefit programs, including medical, dental and vision care coverage, disability, long-term care and life insurance, and our 401(k) plan that are generally available to the rest of our employees. We do not have any special benefits or retirement plans for our NEOs.
Stock Ownership Guidelines
Our board of directors has established stock ownership guidelines whereby our NEOs are required to own stock equal to the lesser of shares with a value equal to a specified multiple of their base salary or a specific number of shares as follows:
Lesser Of:
Multiple of
Salary
Shares of
Stock
President and Chief Executive Officer 5x 195,000
EVP — Chief Financial Officer and Chief Administrative Officer 3x 75,000
EVP — Capital and Strategy 2x 30,000
EVP — Real Estate Operations 2x 30,000
EVP — Northeast Region and Co-Head of Development 2x 30,000
Each of our NEOs, other than Mr. Smith who was promoted to Chief Executive Officer in July of 2019, has met his respective ownership requirement. Mr. Smith has until July 2025 to meet his ownership requirement and he is required to hold 60% of the net shares he is granted by us as compensation until his ownership requirement is met. All of our NEOs are required to hold any shares they receive pursuant to our 2007 Omnibus Incentive Plan for a minimum of one year after vesting.
In addition, each member of our board of directors is required to own the lesser of 15,000 shares or $250,000. All of our directors currently meet this requirement, with the exception of Mr. Cohen who recently joined our board and will have until March 2026 to meet the requirement.
Hedging, Pledging and Insider Trading Policy
Our insider trading policy prohibits our employees, officers and directors from hedging their ownership of our stock, including a prohibition on short sales and buying or selling of puts and calls. Our insider trading policy also prohibits our employees, officers and directors from purchasing or selling our securities while in possession of material non-public information including, among other things, information concerning data securities breaches or
other cyber security events impacting the Company or any of its substantial tenants or business partners.
Our insider trading policy also prohibits our executive officers and directors from pledging our securities or otherwise using our securities as collateral. None of our executive officers or directors holds any of our stock subject to pledge.
Impact of Regulatory Requirements on Compensation
The Compensation Committee’s policy is to consider the tax treatment of compensation paid to our executive officers while simultaneously seeking to provide our executives with appropriate rewards for their performance. Section 162(m) of the Code limits to $1.0 million a publicly held company’s tax deduction each year for compensation to any “covered employee.” As a REIT, to the extent that any part of our compensation expense does not qualify for deduction under Section 162(m), a larger portion of stockholder distributions may be subject to federal income tax as
ordinary income rather than return of capital, and any such compensation allocated to our taxable REIT subsidiary, whose income is subject to federal income tax, would result in an increase in income taxes due to the inability to deduct such compensation.
Substantially all of the services rendered by our NEOs were performed on behalf of our operating partnership or its subsidiaries. The Internal Revenue Service has issued a series of private letter rulings which indicate that compensation paid by an operating partnership to
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executive officers of a REIT that serves as its general partner is not subject to limitation under Section 162(m) to the extent such compensation is attributable to services rendered to the operating partnership. We have not obtained a ruling on this issue, but we have no reason to believe that the same conclusion would not apply to us. To the extent that compensation paid to our executive officers is subject to and does not qualify for deduction under Section 162(m), our Compensation Committee is prepared to exceed the limit on deductibility under Section 162(m) to the extent necessary to establish compensation programs that we believe provide appropriate incentives and reward our executives related to their performance.
Because we qualify as a REIT under the Code, we generally distribute at least 90% of our net taxable
income (excluding any net capital gain) each year and, therefore, do not pay federal income tax. As a result, and based on the level of cash compensation paid to our executive officers as a result of their services performed on behalf of our operating partnership, the recently enacted amendment to Section 162(m) that eliminates the exception to the limitation on the federal tax deduction does not have a material impact on us.
Although we and the Compensation Committee are mindful of the limits imposed by Section 162(m), even if Section 162(m) applies to certain compensation packages, we nevertheless reserve the right to structure compensation packages and awards in a manner that may exceed the limitation on deduction imposed by Section 162(m).
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2020 EXECUTIVE COMPENSATION TABLES
The following tables set forth information concerning the compensation of our NEOs for the three years ended December 31, 2020, reported in accordance with SEC rules.
Summary Compensation Table
Name and Principal Position
Year
Salary
($)
Stock
Awards
($)(1)
Non-Equity
Incentive Plan
Compensation
($)
All Other
Compensation
($)
Total
($)
C. Brent Smith
President and Chief Executive Officer
2020 600,000 1,974,037(2) 600,000 19,686(5) 3,193,723
2019 499,007 3,781,716(3)(6) 895,000 19,156 5,194,879
2018 350,000 630,716(4) 494,000 18,750 1,493,466
Robert E. Bowers
Executive Vice President and Chief
Financial and Administrative Officer
2020 450,000 1,229,412(2) 335,000 26,186(5) 2,040,598
2019 457,500 1,168,437(3) 540,000 25,156 2,191,093
2018 465,000 1,149,366(4) 541,000 24,750 2,180,116
Christopher A. Kollme
Executive Vice President — 
Capital & Strategy
2020 358,750 451,447(2) 235,000 13,186(5) 1,058,383
2019 350,000 439,726(3) 375,000 4,906 1,169,632
2018 350,000 434,137(4) 365,000 4,875 1,154,012
George M. Wells
Executive Vice President — 
Real Estate Operations
2020 315,000 391,466(2) 235,000 26,186(5) 967,652
Robert K. Wiberg
Executive Vice President — Northeast
Region and Co-Head of Development
2020 348,500 451,447(2) 185,000 26,186(5) 1,011,133
2019 340,000 439,726(3) 275,000 25,156 1,079,882
2018 330,000 434,137(4) 250,000 24,750 1,038,887
(1)
In accordance with SEC rules, the stock award column includes the annual deferred stock grant and the estimated aggregate grant date fair value of the Performance Share Component of our LTIC program at target levels, even though there is no guarantee that any amounts will ultimately be earned by and paid to the executive. See “Stock Vested” table below for the value of actual stock awards that vested during the year ended December 31, 2020.
(2)
Represents the aggregate grant date fair value of potential awards under the 2020-22 Performance Share Program at target levels and the deferred stock awards granted in 2020 for 2019 performance, both under our LTIC program. Values are estimated as the total expense associated with each grant to be recognized for financial statement reporting purposes over the respective service period associated with each grant calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Share-Based Payments. Pursuant to SEC rules the values are not reduced by an estimate for the probability of forfeiture. The aggregate grant date fair value of the 2019 annual deferred stock award granted in 2020 was based on the closing price of our common stock on the February 19, 2020 grant date of $24.41 per share. The aggregate grant date fair value of the 2020 Performance Share Program was based on an estimated fair value per share as of the March 19, 2020 grant date of $25.83 per share utilizing a Monte Carlo valuation model that models the plan’s potential payoff depending on Piedmont’s and its peer group’s future stock price movements. The potential value of the 2020 – 22 Performance Share Program award at the grant date assuming the highest level of performance conditions were achieved would have been (in 000’s): Smith — $2,498; Bowers — $1,549; Kollme -$583, Wells — $533, and Wiberg — $583.
(3)
Represents the aggregate grant date fair value of potential awards under the 2019-21 Performance Share Program at target levels and the deferred stock awards granted in 2019 for 2018 performance, both under our LTIC program. Values are estimated as the total expense associated with each grant to be recognized for financial statement reporting purposes over the respective service period associated with each grant calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718, Share-Based Payments. Pursuant to SEC rules the values are not reduced by an estimate for the probability of forfeiture. The aggregate grant date fair value of the 2018 annual deferred stock award granted in 2019 was based on the closing price of our common stock on the May 3, 2019 grant date of $21.04 per share. The aggregate grant date fair value of the 2019 Performance Share Program was based on an estimated fair value per share as of the May 3, 2019 grant date of $29.43 per share utilizing a Monte Carlo valuation model that models the plan’s potential payoff depending on Piedmont’s and its peer group’s future stock price movements. The potential value of the 2019-21 Performance Share Program award at the grant date assuming the highest level of performance conditions were achieved would have been (in 000’s): Smith — $4,756; Bowers — $1,301; Kollme — $490 , and Wiberg — $490.
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(4)
Represents the aggregate grant date fair value of potential awards under the 2018-20 Performance Share Program at target levels and the deferred stock awards granted in 2018 for 2017 performance, both under our LTIC program. Values are estimated as the total expense associated with each grant to be recognized for financial statement reporting purposes over the respective service period associated with each grant calculated in accordance with FASB ASC Topic 718, Share-Based Payments. Pursuant to SEC rules the values are not reduced by an estimate for the probability of forfeiture. The aggregate grant date fair value of the 2017 annual deferred stock award granted in 2018 was based on the closing price of our common stock on the May 17, 2018 grant date of $17.84 per share. The aggregate grant date fair value of the 2018 Performance Share Program was based on an estimated fair value per share as of the May 17, 2018 grant date of $23.52 per share utilizing a Monte Carlo valuation model that models the plan’s potential payoff depending on Piedmont’s and its peer group’s future stock price movements. The potential value of the 2018 – 20 Performance Share Program award at the grant date assuming the highest level of performance conditions were achieved would have been (in 000’s): Smith — $461; Bowers — $1,252; Kollme — $461, and Wiberg — $461.
(5)
All other compensation for 2020 was comprised of the following:
Name
Matching
Contributions
to 401(k)
($)
Premium
for
Company
Paid Life
Insurance
($)
Total Other
Compensation
($)
C. Brent Smith 19,500 186 19,686
Robert E. Bowers 26,000 186 26,186
Christopher A. Kollme 13,000 186 13,186
George M. Wells 26,000 186 26,186
Robert K. Wiberg 26,000 186 26,186
Matching contributions for 401(k) and Premium for Company Paid Life Insurance were paid pursuant to the same benefit plans offered to all of our employees.
(6)
Includes $ 2,398,788 related to a special one-time award in conjunction with Mr. Smith’s appointment as Chief Executive Officer on July 1, 2019.
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Grants of Plan-Based Awards
The table below sets forth: (1) the threshold, target, and maximum of our 2020 STIC plan and of the Performance Share Component of our 2020-22 LTIC plan, and (2) the actual shares that were granted in 2020 pursuant to the Deferred Stock Component of our 2019 LTIC Plan.
Grant Date
Estimated Potential Payouts
Under Non-Equity
Incentive Plan Awards(1)
Estimated Future Payouts
Under Equity
Incentive Plan Awards(2)
All Other
Stock Awards:
Grant Date
Fair Value of
Stock Awards
Threshold
Target
Maximum
Threshold
(Number
of Shares)
Target
(Number
of Shares)
Maximum
(Number
of Shares)
Number of
Shares
of Stock
C. Brent Smith
2020 STIC Plan
$ 405,000 $ 810,000 $ 1,215,000
2020 LTIC Plan — 
2020-22 Performance Share Component
March 19, 2020
24,178 48,356 96,712 $ 1,249,035(4)
2019 LTIC Plan — 
Deferred Stock
Component
February 19, 2020
29,701(3) $ 725,001
Robert E. Bowers
2020 STIC Plan
$ 225,000 $ 450,000 $ 675,000
2020 LTIC Plan — 
2020-22 Performance
Share Component
March 19, 2020
14,991 29,981 59,962 $ 774,409(4)
2019 LTIC Plan — 
Deferred Stock
Component
February 19, 2020
18,640(3) $ 455,002
Christopher A. Kollme
2020 STIC Plan
$ 179,375 $ 358,750 $ 538,125
2020 LTIC Plan — 
2020-22 Performance
Share Component
March 19, 2020
5,642 11,283 22,566 $ 291,440(4)
2019 LTIC Plan — 
Deferred Stock
Component
February 19, 2020
6,555(3) $ 160,008
George M. Wells
2020 STIC Plan
$ 110,250 $ 220,500 $ 330,750
2020 LTIC Plan — 
2020-22 Performance
Share Component
March 19, 2020
5,158 10,316 20,632 $ 266,462(4)
2019 LTIC Plan — 
Deferred Stock
Component
February 19, 2020
5,121(3)