Stock and Other Incentive Plans

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock Incentive Plan

The Company's Incentive Plan permits the grant of incentive awards to its employees and directors in any of the following forms: options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards, dividend equivalents, or other stock-based awards, including units in the OP. The Incentive Plan replaced the Legacy HR Incentive Plan as of the Merger date. Unvested awards under the Legacy HR Incentive Plan were assumed according to their existing terms by the Company in connection with the Merger. As of the Merger date, 9,647,839 share-based awards were available for grant under the Incentive Plan. As of December 31, 2024 and 2023, the Company had share-based awards available for grant under the Incentive Plan of 6,140,496 and 8,102,861 shares, respectively. Non-vested shares issued to employees under the Incentive Plan are generally subject to fixed vesting periods varying from three to eight years beginning on the date of issue. If a recipient voluntarily terminates his or her relationship with the Company or is terminated for cause before the end of the vesting period, the shares are forfeited, at no cost to the Company. Once the shares have been issued, the recipient has the right to receive dividends and the right to vote the shares through the vesting period. Compensation expense, included in general and administrative expense, recognized during the years ended December 31, 2024, 2023 and 2022 from the amortization of the value of shares over the vesting period issued to employees and directors was $31.8 million, $14.6 million and $13.9 million, respectively. In 2024, the Company accelerated the amortization of certain outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $17.8 million. The following table represents expected amortization of the Company's non-vested shares issued as of December 31, 2024:


Dollars in millions	FUTURE AMORTIZATION of non-vested shares
2025	$	8.4
2026	5.5
2027	3.2
2028	1.3
2029 and thereafter	0.4
Total	$	18.8

Executive Incentive Plan

The Compensation Committee has adopted an executive incentive plan pursuant to the Incentive Plan (the "Executive Incentive Plan") to provide specific award criteria with respect to incentive awards made under the Incentive Plan subject to the discretion of the Compensation Committee. Under the terms of the Executive Incentive Plan, the Company's named executive officers and certain other members of senior management may earn incentive awards in the form of cash, non-vested stock, restricted stock units ("RSUs"), and units in the OP ("OP Units"). For 2024, 2023 and 2022, compensation expense, included in general and administrative expense, resulting from the amortization of the Executive Incentive Plan non-vested share, RSU, and OP Unit grants to officers was approximately $16.8 million, $9.0 million, and $9.8 million, respectively. In 2024, the Company accelerated the amortization of certain outstanding non-vested stock and RSU awards, including in connection with the termination without cause of its CEO and CFO, totaling $8.5 million. Details of equity awards that have been issued under this plan are as follows:

•During the first quarter of 2024, the Company granted non-vested stock awards to its named executive officers and other members of senior management with an aggregate grant date fair value of $4.3 million, which consisted of an aggregate of 283,320 non-vested shares with a vesting period of five years.

•During the second quarter of 2024, the Company granted non-vested stock to other members of senior management with an aggregate grant date fair value of $0.1 million, which consisted of an aggregate of 9,350 non-vested shares with a vesting period of five years.

•On February 13, 2024, the Company granted an aggregate of 208,055 RSUs to members of senior management, with an aggregate grant date fair value of $3.5 million. These awards are subject to a three-year performance period and if the performance criteria is met, the awards are then subject to employment for two additional years with ratable vesting of 50% in year four and 50% in year five. The expense will be recognized on the straight-line basis over the five-year vesting period.

◦Approximately 36% of the RSUs vest based on relative total shareholder return ("TSR") and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $19.10 for the relative TSR component for the February grants using the following assumptions:



Volatility	28.0	%
Dividend assumption	Accrued
Expected term	3 years
Risk-free rate	4.44	%
Stock price (per share)	$15.22

▪The remaining 64% of the RSU awards are subject to certain operating performance conditions. With respect to the operating performance conditions of the February 2024 grants, the grant date fair value was $15.22 based on the Company's share price on the date of grant. The Company records amortization expense based on the probability of achieving certain operating performance conditions, which is evaluated throughout the performance period.

▪The combined weighted average grant date fair value of the February 2024 RSUs was $16.61 per share.

◦On April 30, 2024, the Company granted an aggregate of 21,816 RSUs to members of senior management, with an aggregate grant date fair value of $0.3 million. These awards are subject to a three-year performance period and if the performance criteria is met, the awards are then subject to employment for two additional years with ratable vesting of 50% in year four and 50% in year five. The expense will be recognized on the straight-line basis over the five-year vesting period.

•Approximately 36% of the RSUs vest based on relative TSR and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $14.94 for the relative TSR component for the April grants using the following assumptions:



Volatility	29.0	%
Dividend assumption	Accrued
Expected term	3 years
Risk-free rate	4.85	%
Stock price (per share)	$14.23

◦The remaining 64% of the RSU awards are subject to certain operating performance conditions. With respect to the operating performance conditions of the April 2024 grants, the grant date fair value was $14.23 based on the Company's share price on the date of grant. The Company records amortization expense based on the probability of achieving certain operating performance conditions, which is evaluated throughout the performance period.

◦The combined weighted average grant date fair value of the April 2024 RSUs was $14.48 per share.

LTIP Series C Units

On February 13, 2024, the Company granted an aggregate of 906,044 LTIP Series C units ("LTIP-C units) in the OP to its named executive officers with an aggregate grant date fair value of $7.5 million. LTIP-C units are granted notionally at the maximum value of the award. These awards are subject to a three-year performance period and if the performance criteria is met, the awards are then subject to two additional years of employment with ratable vesting of 50% in year four and 50% in year five. The expense will be recognized on the straight-line basis over the five-year vesting period.

•Approximately 36% of the LTIP-C units vest based on relative TSR and were valued using independent specialists. The Company utilized a Monte Carlo simulation to calculate the weighted average grant date fair value of $9.62 for the relative TSR component for the February 2024 grant using the following assumptions:



Volatility	28.0	%
Dividend assumption	Accrued
Expected term	3 years
Risk-free rate	4.44	%
Stock price (per share)	$15.22

•The remaining 64% of the LTIP-C units vest based upon certain operating performance conditions. With respect to the operating performance conditions of the February 13, 2024 grant, the grant date fair value was $15.22 based on the Company's share price on the date of grant. The Company records amortization expense based on the probability of achieving certain operating performance conditions, which is evaluated throughout the performance period.

•The combined weighted average grant date fair value of the February 2024 LTIP-C units was $13.22 per share.

For 2024, compensation expense resulting from the amortization of LTIP-C units awarded to officers was approximately $8.8 million. The Company accelerated the amortization of certain outstanding LTIP-C awards, including in connection with the termination without cause of its CEO and CFO, totaling $7.2 million.

Officer Incentive Program

In 2024 the Company granted a performance-based award to certain non-executive officers totaling approximately $0.7 million, which was granted in the form of 48,490 non-vested shares. The shares have vesting periods ranging from three to eight years with a weighted average vesting period of approximately five years.

For 2024, 2023 and 2022, compensation expense resulting from the amortization of these non-vested share grants awarded to officers was approximately $0.5 million, $0.6 million, and $0.9 million, respectively. The Company accelerated the amortization of certain outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $0.1 million.

Salary Deferral Plan

The Company's salary deferral plan allows certain of its officers to elect to defer up to 50% of their base salary in the form of non-vested shares subject to long-term vesting. The number of shares will be increased through a Company match depending on the length of the vesting period selected by the officer. The officer's vesting period choices are: three years for a 30% match; five years for a 50% match; and eight years for a 100% match. During 2024, 2023 and 2022, the Company issued 29,902 shares, 31,792 shares and 17,381 shares, respectively, to its officers through the salary deferral plan. For 2024, 2023 and 2022, compensation expense resulting from the amortization of non-vested share grants to officers was approximately $1.1 million, $0.9 million, and $0.9 million, respectively.

Non-employee Directors Incentive Plan

The Company grants non-vested share-based awards to its non-employee directors under the Incentive Plan. The directors’ awards typically have a one-year vesting period and are subject to forfeiture prior to such date upon termination of the director’s service, at no cost to the Company. For each of the years 2024, 2023 and 2022, compensation expense resulting from the amortization of non-vested share-based grants to directors was approximately $2.4 million, $2.1 million, and $1.5 million, respectively.

•During the second quarter of 2024, the Company granted non-vested stock awards to certain of its independent directors, with a grant date fair value of $0.9 million, which consisted of an aggregate of 58,910 non-vested shares, with a one-year vesting period.

•During the second quarter of 2024, the Company also granted LTIP-D units in the OP to certain of its independent directors, with a grant fair value of $0.8 million, which consisted of an aggregate of 45,982 non-vested units, with a one-year vesting period.

Other Grants

The Company granted an aggregate of 51,884 non-vested shares to other members of senior management, with an aggregate grant date fair value of $0.9 million and a three-year vesting period.

In 2024, the Company granted 69,022 non-vested shares to its interim Chief Executive Officer with a grant date fair value of $1.2 million with vesting the earlier of the appointment of a permanent CEO or one-year.

The Company issued one-time non-vested share grants related to executive management transition in 2016. For 2024, 2023, and 2022, compensation expense resulting from the amortization of these non-vested share grants to officers was approximately $2.2 million, $0.8 million, and $0.8 million. The Company accelerated the amortization of these outstanding awards, including in connection with the termination without cause of its CEO and CFO, totaling $1.6 million.

The following table represents the summary of non-vested share-based awards (including restricted stock, RSUs, LTIP-C units and LTIP-D units) under the Incentive Plans and related information for the years ended December 31, 2024, 2023, and 2022:


	YEAR ENDED DECEMBER 31,
Dollars in thousands, except per share data	2024		2023		2022
Share-based awards, beginning of year	2,615,562		2,090,060		1,562,028
Granted 1	1,732,484		1,164,359		952,407
Vested	(2,284,767)		(403,266)		(418,949)
Change in awards based on performance assessment 2	(47,202)		(205,668)		—
Forfeited	(216,340)		(29,923)		(5,426)
Share-based awards, end of year	1,799,737		2,615,562		2,090,060

Weighted-average grant date fair value of
Share-based awards, beginning of year	$	25.56	$	30.35	$	31.10
Share-based awards granted during the year	$	15.49	$	18.70	$	29.64
Share-based awards vested during the year	$	21.43	$	28.38	$	31.52
Share-based awards change in performance assessment during the year	$	20.21	$	29.05	$	—
Stock-based awards forfeited during the year	$	16.87	$	31.16	$	31.48
Share-based awards, end of year	$	22.30	$	25.56	$	30.35

Grant date fair value of shares granted during the year	$	26,844	$	22,171	$	28,225

1LTIP-C units are issued at the maximum possible value of the award and are reflected as such in this table until the performance period has been satisfied and the exact number of awards are determinable.

2The Company's RSUs that are based on operating performance metrics are evaluated on the probability of those performance metrics being achieved. During 2023, the Company determined that the operating performance goals related to the RSUs issued in 2022 are not probable of being achieved and reversed all of the outstanding amortization expense for that grant. In addition, the Company lowered the probability of achieving the operating performance goals related to the RSUs issued in 2023.

The vesting periods for the non-vested shares granted during 2024 ranged from one to eight years with a weighted-average amortization period remaining as of December 31, 2024 of approximately 3.9 years.

During 2024, 2023 and 2022, the Company withheld 485,209 shares, 126,085 shares and 137,892 shares, respectively, of common stock from its officers to pay estimated withholding taxes related to the vesting of shares.

401(k) Plan

The Company maintains a 401(k) plan that allows eligible employees to defer salary, subject to certain limitations imposed by the Internal Revenue Code. The Company provides a matching contribution up to $2,800 per employee, subject to certain limitations. The Company’s matching contributions were approximately $1.4 million for 2024, $1.5 million for 2023 and $1.2 million for 2022.