DEF 14A 1 udr-20210408xdef14a.htm DEF 14A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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

Graphic Filed by the Registrant

Filed by a Party other than the Registrant

Check the appropriate box:

Preliminary Proxy Statement

CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))

Graphic

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

UDR, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Graphic

No fee required.

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

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

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

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

(4) Proposed maximum aggregate value of transaction:

(5) Total fee paid:

Fee paid previously with preliminary materials.

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

(1) Amount Previously Paid:

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

(3) Filing Party:

(4) Date Filed:


Graphic

1745 SHEA CENTER DRIVE, SUITE 200

HIGHLANDS RANCH, CO 80129

__________________

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on May 27, 2021

__________________

You are cordially invited to attend the 2021 Annual Meeting of Shareholders (the “Meeting”) of UDR, INC. (“UDR” or the “Company”) to be held on Thursday, May 27, 2021, at 10:00 a.m. local time at Hotel Crescent Court, 400 Crescent Court, Dallas, Texas 75201, for the following purposes:

1.To elect nine directors, for a term of one year each, until the next Annual Meeting of Shareholders and until their successors are elected and qualified;
2.To ratify the appointment of Ernst & Young LLP, to serve as independent registered public accounting firm for the Company for the fiscal year ending December 31, 2021;
3.To conduct an advisory vote on executive compensation;
4.To approve the Amended and Restated 1999 Long-Term Incentive Plan; and
5.To transact such other business as may properly come before the Meeting or any adjournment(s) thereof.

Only shareholders of record at the close of business on March 29, 2021, will be entitled to notice of, and to vote at, the Meeting or any adjournment(s) thereof.  Each share of common stock is entitled to one vote for each director position and one vote for each of the other proposals.

On or about April 8, 2021, we intend to mail to our shareholders of record a notice containing instructions on how to access our 2021 proxy statement (“Proxy Statement”) and our Annual Report on Form 10-K for the year ended December 31, 2020, and how to vote online. The notice also provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in e-delivery. If you received your annual meeting materials via email, the email contains voting instructions and links to our annual report and proxy statement on the Internet.  If you would like to reduce the costs incurred by UDR in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet.  To sign up for electronic delivery, please follow the instructions on the Proxy Card to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.  We want to thank you for helping make UDR an environmentally friendly company and for your continued support of UDR.

We intend to hold our annual meeting in person; however, we are actively monitoring the coronavirus (COVID-19). We are sensitive to the public health and travel concerns that our shareholders may have and the protocols that federal, state, and local governments have imposed or may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting by means of remote communication. Please monitor our annual meeting website at https://www.udr.com/2021annualmeeting for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.  To the extent we hold our annual meeting virtually, our shareholders who register to attend will have the opportunity to participate through the virtual meeting portal both prior to and during the meeting.  Appropriate questions will be read and answered during the meeting.

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

By Order of the Board of Directors 

Graphic

WARREN L. TROUPE

Corporate Secretary

April 8, 2021


Graphic

NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS

How To Vote In Advance

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

Graphic

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

Graphic

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

Graphic

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

Important Notice Regarding the Availability of Proxy Materials for UDR, Inc.’s Annual Meeting of Shareholders to be held on May 27, 2021.

This Notice of Annual Meeting and Proxy Statement and UDR, Inc.’s Annual Report/Form 10-K for the year ended December 31, 2020 are available on the Internet at the following website: www.proxyvote.com.


Forward-Looking Statements

This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, without limitation, statements concerning property acquisitions and dispositions, development activity and capital expenditures, capital raising activities, rent growth, occupancy, rental expense growth and expected or potential impacts of the novel coronavirus disease (“COVID-19”) pandemic. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such factors include, among other things, the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning the availability of capital and the stability of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments and redevelopments, delays in completing lease-ups on schedule or at expected rent and occupancy levels, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels and rental rates, expectations concerning joint ventures and partnerships with third parties, expectations that automation will help grow net operating income, and expectations on annualized net operating income.

The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:

the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects;
general economic conditions;
unfavorable changes in apartment market and economic conditions that could adversely affect occupancy levels and rental rates, including as a result of COVID-19;
the failure of acquisitions to achieve anticipated results;
possible difficulty in selling apartment communities;
competitive factors that may limit our ability to lease apartment homes or increase or maintain rents;
insufficient cash flow that could affect our debt financing and create refinancing risk;
failure to generate sufficient revenue, which could impair our debt service payments and distributions to stockholders;
development and construction risks that may impact our profitability;
potential damage from natural disasters, including hurricanes and other weather-related events, which could result in substantial costs to us;
risks from climate change that impacts our properties or operations;
risks from extraordinary losses for which we may not have insurance or adequate reserves;
risks from cybersecurity breaches of our information technology systems and the information technology systems of our third party vendors and other third parties;
uninsured losses due to insurance deductibles, self-insurance retention, uninsured claims or casualties, or losses in excess of applicable coverage;
delays in completing developments and lease-ups on schedule;
our failure to succeed in new markets;
risks that third parties who have an interest in or are otherwise involved in projects in which we have an interest, including mezzanine borrowers, joint venture partners or other investors, do not perform as expected;
changing interest rates, which could increase interest costs and affect the market price of our securities;
potential liability for environmental contamination, which could result in substantial costs to us;
the imposition of federal taxes if we fail to qualify as a REIT under the Code in any taxable year;
our internal control over financial reporting may not be considered effective which could result in a loss of investor confidence in our financial reports, and in turn have an adverse effect on our stock price; and
changes in real estate laws, tax laws, rent control or stabilization laws or other laws affecting our business.

A discussion of these and other factors affecting our business and prospects is set forth in Part I, Item 1A. Risk Factors of our Annual Report/Form 10-K for the year ended December 31, 2020. We encourage investors to review these risk factors.


Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Proxy Statement may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Proxy Statement, and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.


TABLE OF CONTENTS

PAGE

2021 PROXY STATEMENT HIGHLIGHTS

TOP OF MIND ISSUES

PROXY SUMMARY

PROPOSAL NO. 1 ELECTION OF DIRECTORS

Vote Required and Board of Directors’ Recommendation

CORPORATE GOVERNANCE MATTERS

Corporate Governance Overview

Majority Voting Standard for Uncontested Elections

Our Commitment to Shareholder Engagement

Identification and Selection of Nominees for Director

Proxy Access

Shareholder Bylaws Amendments

Director Rotation and Retirement

Director Independence

Succession Planning

Director Responsibilities and Obligations

Board Leadership Structure and Committees

Role of Compensation Committee and Compensation Consultants

Board of Directors and Committee Meetings

The Role of the Board in Risk Oversight

Board Evaluation

Communicating with the Board

COMPENSATION OF DIRECTORS

Director Compensation Table

Director Compensation Table Discussion

2020 Director Compensation Program

2021 Director Compensation Program

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

HUMAN CAPITAL MANAGEMENT

SUSTAINABILITY

EXECUTIVE OFFICERS

EXECUTIVE COMPENSATION

48

Compensation Discussion and Analysis

Compensation Committee Report

Compensation of Executive Officers

Employment and Other Agreements

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

CEO Pay Ratio

Compensation Risks

Transactions with Related Persons

Equity Compensation Plan Information

AUDIT COMMITTEE REPORT

AUDIT MATTERS

Audit Fees

Pre-Approval Policies and Procedures

PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

Vote Required and Board of Directors’ Recommendation

89

PROPOSAL NO. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION

Vote Required and Board of Directors’ Recommendation

PROPOSAL NO. 4 APPROVAL OF AMENDED AND RESTATED 1999 LONG-TERM INCENTIVE PLAN

Purpose of the Plan

Background of the Plan

Questions and Answers About the Plan and the Proposal

New Plan Benefits

Stock Option Awards and Other Awards Under the Plan

Vote Required and Board of Directors’ Recommendation

FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

Why did you provide this proxy statement to me?

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

i | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


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

How do I vote?

How will my proxy be voted?

Will other matters be voted on at the annual meeting?

Can I revoke my proxy and change my vote?

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

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

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

Who will tabulate the votes?

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

Where do I find the voting results of the meeting?

OTHER MATTERS

Delivery of Voting Materials

Annual Report

Shareholder Proposals for the 2022 Annual Meeting of Shareholders

Advance Notice Procedures for the 2022 Annual Meeting of Shareholders

Proxy Access Procedures for the 2022 Annual Meeting of Shareholders

DEFINITIONS

APPENDIX A

ii | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


2021 PROXY STATEMENT HIGHLIGHTS

2020 Performance Highlights

1, 3, 5, 10 and 20-Year Total Shareholder Return as of December 31, 2020

1-Year

3-Year

5-Year

10-Year

20-Year

UDR

(14.6)%

10.3%

20.7%

130.0%

900.6%

NAREIT Apartment Index

(15.3)%

10.9%

18.3%

122.1%

557.7%

NAREIT Equity Index

(8.0)%

10.6%

26.2%

122.1%

517.5%

S&P 500 Index

18.4%

48.9%

103.0%

267.0%

322.3%

UDR’s Absolute Return in Dollars ($ millions)

Graphic


193rd Consecutive Dividend Paid

Our January 2021 dividend represented our 193rd consecutive quarterly dividend paid. We are committed to returning value to our shareholders, and for 2020 we increased our dividend by 5.1%, and we have increased our dividend 5.1% annually over the past 3 years, 5.3% annually over the past 5 years and 7.2% annually over the past 10 years. Our dividend has increased in each of the last 11 years.

1-Year

3-Year Average

5-Year Average

10-Year Average

Dividend per share growth

5.1%

5.1%

5.3%

7.2%

FFOA per
share growth
(a)

-1.9%

2.9%

4.2%

6.5%

(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 109).

1 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Our Five Strategic Objectives

Our 2020 results consisted of improvement across all five of our strategic objectives, which are: 1) operating excellence,

2) balance sheet strength,

3) portfolio composition,

4) accretive capital allocation, and

5) a strong, innovative culture with a focus on sustainability, leading to an investment for all cycles.

Below is a summary of our results categorized by objective:

1.Operating Excellence

A best-in-class operating platform that couples strong blocking and tackling with continued innovation is expected to drive operating margin expansion. Initiatives that better monetize our real estate, pricing our apartment homes more efficiently, and nurturing an operating culture that embraces accretive evolution are all repeatable competitive advantages that result in superior NOI growth over a full cycle.

Graphic

2.Balance Sheet Strength

Our balance sheet is safe, liquid, flexible, and capable of funding both internal and external growth opportunities. An investment-grade rating, well-laddered maturity profile, and access to liquidity from a wide variety of capital sources affords UDR efficient pricing of external capital, which serves as a competitive advantage.

Graphic

*We present reconciliations of certain non-GAAP financial measures to their most directly comparable US generally accepted accounting principles (GAAP) measures in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Apartment Community Operations” in our 2020 Annual Report, including reconciliations of net income/loss reported under GAAP to NOI, FFO, FFO as Adjusted and FFOA, as well as additional information about non-GAAP measures.

(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 109.

2 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


3.Portfolio Composition

Our diversified portfolio across markets, price points, and product types is a differentiating factor, appeals to a wide renter and investor audience, provides for more markets to invest in and overlay our operating platform onto, and lessens volatility in long-term same-store growth, cash flow growth, and total shareholder return to deliver a full-cycle investment that generates both growth and stability.

Graphic

4.Accretive Capital Allocation

UDR’s history of disciplined capital allocation has created significant value for stakeholders over time and is a function of our ability to consider cost of capital signals and leverage our well-rounded suite of available investment options. Our diversified portfolio allows us to seek returns where others cannot, and our willingness and ability to pivot toward the investment opportunity that generates the highest risk-adjusted IRR and the greatest earnings accretion is central to UDR’s capital allocation strategy.

Graphic

3 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


5.A Strong, Diverse, Innovative Culture

Our culture is achievement-based, goal-oriented, forward-thinking, and driven by innovation and technology. These principles support an empowered, merit-based structure that rewards strong financial results while also mandating accountability and respect for all. Our diversity, equity and inclusion initiative is designed to help assure continued high levels of associate engagement in the future. High associate engagement levels are one of the reasons it is possible for UDR to consistently deliver financial results, which in turn allow us to provide the tools our associates need to take advantage of career mobility, which helps generate long-term cash flow growth and total return to our shareholders, and deliver superior customer service to our residents. These accomplishments are achieved in concert with UDR being a responsible steward of the environment, a socially conscious corporate citizen, and a promoter of sound corporate governance.

Environmental

Graphic

Social and Community Engagement

Graphic

Governance

Graphic

4 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


TOP OF MIND ISSUES

As described further within this proxy statement we regularly interact with our shareholders and other stakeholders, having had 517 total interactions with shareholders (representing 84.1% of our outstanding common stock), including 50 representatives of the stewardship or governance functions of 29 of our shareholders (representing 44.3% of our outstanding common stock), in 2020 and early 2021.  Set forth below are issues that are most commonly topics of discussion in such engagements and brief descriptions of what we have done to address them.

COVID-19

As with other businesses across the globe, the COVID-19 pandemic negatively impacted our business as well as our residents, associates, and communities in a wide variety of ways during 2020.  Addressing these impacts required targeted responses including measured and intentional actions to assist our residents and our associates with a focus on protecting, to the extent we could, the health and well-being of our residents and our associates.  

With respect to our residents, we enhanced our cleaning protocols and improved air quality protocols. To help address our residents’ mental wellness and foster personal engagement amidst social distancing requirements, we coordinated virtual social and entertainment opportunities such as trivia contests and cooking classes.  In addition, to assist with financial impacts we offered payment plans, as well as payment options such as payment by credit card or installment payments, while waiving associated fees.  We also created processes to assist residents in applying for applicable rent assistance programs.  Our Next Generation Operating Platform allowed us to expand the number of activities residents and prospective residents could accomplish in a self-service, no-contact manner at the time of their choosing, including the ability to make amenity reservations and log maintenance requests, among others.  We substantially increased the availability of self-guided tours and added the capability for virtual community tours, allowing a UDR leasing associate to virtually “walk” prospective residents around a community through on-line interaction.  

With respect to our associates, we sourced and provided personal protective equipment and provided additional cleaning supplies.  In addition, we offered additional paid time off for COVID-19 reasons, one-time financial bonuses, flexible work schedules, work-from-home optionality, vacation time buy-out programs, mental wellness programs, and other benefits that assisted our associates and their families in addressing COVID-19 challenges.  Senior management also communicated frequently with our associates (initially weekly and then less frequently) through Company-wide telephonic calls and virtual meetings and webinars. The goal was to ensure that our associates understood how the Company was addressing the challenges presented by the pandemic, and to provide an open forum where they could express concerns to or ask questions directly of leadership.  We did not furlough or layoff any of our associates due to COVID-19.

Interaction between management and the board also increased.  Additional board meetings were held virtually during 2020 so that board members had a full understanding regarding what the Company was doing to address the impact of COVID-19 and could efficiently exercise their oversight responsibilities.  See page 45.  

Environmental, Social, and Governance (“ESG”)

ESG remains a cornerstone of how we operate our business and invest our capital, not only because strong corporate citizenry is important to our stakeholders, but because focusing on it makes solid economic and business sense.

Environmental - Sustainability/Climate Change

Sustainability issues and climate change directly impact the long-term viability of our assets and the markets in which they are located. However, in our view “sustainable” does not end with widely utilized metrics such as resource conservation (e.g., electricity, water, and renewable energy usage, emissions, recycling efforts, etc.) and their associated cost savings, but also encompasses topics such as how our buildings impact our residents and the communities in which they are located. For example, we account for the “walk,” “public transit,” and “bike” scores of a community when making investment decisions, both on new developments and when acquiring operating assets to better assess these impacts.  While we have measured and considered various sustainability metrics for many years, in 2019 we began an effort to explicitly disclose our sustainability metrics, goals, efforts, and accomplishments. We also undertook the task of more formally reporting and disclosing these items to our stakeholders to provide them with a deeper understanding of our efforts.  In 2020 we released our second Corporate Responsibility Report, available on our website under “Corporate Social Responsibility/Corporate Responsibility Report”, which included enhanced disclosure including (1) Sustainability Accounting Standards Board (“SASB”) real estate specific disclosures with respect to energy management, water management, management of tenant sustainability and climate change adaption, and (2) Task Force for Climate-related Financial Disclosure (“TCFD”) focal points such as climate-related management, along with the Global Reporting Initiative (“GRI”) disclosures included in our inaugural report.  Our efforts resulted in UDR receiving a GRESB Public Disclosure rating of “A”, a disclosure score of 97, which was the highest within our GRESB determined comparison group, and an overall survey score of 83, which resulted in a “4 Star” designation from GRESB and our being named a top ESG performer among global real estate firms.  

We believe climate change related risks are growing in importance and in recognition thereof, in 2020 we engaged two third-party consultants to provide climate change risk data for each of our assets and all the markets in which we operate.  

5 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


In our property-level and market analyses, we assessed both long-term and event-driven climate change risk through variables such as heat stress, water stress, sea level rise, flooding risk, hurricane risk and earthquake risk.  We used these findings to segment our portfolio by relative “riskiness” to better focus our efforts on high-risk markets and communities that require further analysis.  Lastly, these risks are considered by our board as part of their oversight of enterprise risk management.  

The assessment results are also considered as we make decisions with respect to capital investments in our owned assets (for example, whether to “harden” an asset against sea level rise or xeriscape a property to conserve water) as well as market-level investment and divestment decisions (for example, markets or sub-markets in which to invest and markets that we may exit) within our portfolio strategy process.  We presented the results of such assessments, together with our strategy and plan surrounding climate change, to our board and engaged in extensive dialogue on the topic at board meetings throughout 2020. We intend to provide regular climate change risk updates to the board in the years ahead, so that they are fully informed of the risks we may face and can actively oversee such risks.  In 2020, the Company also engaged a third-party expert to present thoughts regarding climate change risks to management and the board.

Greenhouse gas emissions and carbon-footprint are important globally and are areas that we believe may be focal points for increased future regulation.  Accordingly, in 2020 we measured the Scope 1 and 2 greenhouse gas emissions at each asset in our portfolio.  Our aggregate Scope 1 and Scope 2 emissions are reported in our Corporate Responsibility Report.  These assessments, in addition to the planned incorporation of estimated Scope 3 emissions in 2021, will be updated annually to (1) enable evaluation of usage patterns over time, (2) allow us to monitor year-over-year emission reductions due to capital investments we have previously made, (3) allows us to measure progress against our GHG reduction goal set forth in the Corporate Responsibility Report, and (4) provide insight into how and where we can further lower our carbon footprint through additional energy conservation investments.  When evaluating existing properties for acquisition we also perform, as part of our due diligence process, site assessments and property condition assessments, the results of which, in part, are used to assess opportunities to improve building energy usage.   See pages 46 through 47.

Social - Human Capital

We have increased our disclosure of human capital related efforts in this proxy statement.  See pages 42 through 45.  Our associates and their collective engagement are a key driver of our success and ability to execute our strategic plan.  Accordingly, we emphasize hiring and retaining associates with necessary skills while also fostering a culture that encourages inclusion and innovation.  To ensure that we provide our associates the tools they need to succeed and drive our success, we have established a wide-ranging training program, which also fosters career mobility opportunities. In 2020, we enhanced the training available to our associates, both through a more robust set of mandatory learning modules as well as the expansion of our library of elective training courses.  Regarding UDR’s culture, in 2020, we updated our culture statement and launched an associate-facing website devoted to our cultural values to ensure our associates understand our values and have an opportunity to participate in their evolution.  Diversity, equity and inclusion (“DEI”) are also important in the hiring and retaining of associates and to our business generally.  Accordingly, beginning in 2020 and continuing into 2021, we are formalizing our DEI efforts and have created a committee dedicated to overseeing those efforts.  In addition, we have created a high-level DEI strategy and more focused implementation plan, both of which have been discussed with the board.  Pursuant to the plan, we retained a third-party consultant with the appropriate expertise to survey all UDR associates on DEI topics.  Our consultant then conducted focus groups with UDR associates at all levels of the Company to ensure we have the appropriate feedback and information to help guide our efforts.  Based on the results of the survey and focus groups, we are creating programs designed to specifically target and therefore strengthen our DEI efforts.  The results should also help us to create DEI-related goals against which we can measure our progress, which will be reported to the board at least annually.  Last, understanding that our associates’ mental well-being is important, in 2020 we created and distributed to all associates a brochure outlining mental health resources available to them under our benefit plans.  As further described below, we also include metrics in our short-term compensation program for the “Health of the Workforce” and for ESG/DEI.  In addition, we report to the board on human capital issues on a regular basis.

Governance

Similar to recent years, we made governance-related changes in 2020.  In October, Diane M. Morefield was appointed to the board, furthering our board refreshment efforts.  Thirty-three percent (33%) of our board is now comprised of female directors. In addition, in early 2020 our board formally adopted a “Rooney Rule” with respect to board refreshment and to enhance third-party led search efforts related to succession planning for the role of chief executive officer. While we have always considered board and senior officer candidates with a wide variety of backgrounds and traits, the explicit inclusion of this rule in our governance documents formalizes our efforts to increase diversity amongst our board and senior officer ranks.  

In addition, in early 2021 we adopted changes to certain of our governance documents including a change to the charter of the Governance Committee to provide that the Governance Committee will assess our disclosure of ESG matters, including reviewing any annual reports published with respect to such matters.  See pages 24 through 36.

6 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Compensation

Over time, we have enhanced the framework used to align short-term and long-term executive compensation with business results, including tying specific compensation metrics to our business plan. However, executive compensation remains a primary topic of conversation with our shareholders and other stakeholders each year.  In response to comments we have received, and in connection with the approval of the Amended and Restated 1999 Long-Term Incentive Plan (see Proposal No. 4), we are changing certain features of our incentive compensation plan in 2021.  These changes include replacing a “single-trigger” acceleration provision upon a change of control with a “double-trigger” provision and, generally, requiring all equity grants to have a minimum vesting period of 12 months.  Also, for 2021, we added an ESG/DEI metric to our short-term incentive program for senior officers, including our named executive officers, to tie a portion of their compensation to our results with respect to our ESG and DEI efforts.  The new ESG/DEI metric complements the Health of the Workforce metric added in 2019.  See discussion starting on page 48.

7 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Executive Compensation Highlights

Say-on-pay approved every year since it was first introduced in 2011; over the last five years, shareholder support for the vote on executive compensation has averaged 87%.

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

Graphic

Focus on Performance-Based Compensation

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

Compensation Framework

Salary

Short Term Incentive Plan

Long Term Incentive Plan

Who Receives

All Named Executive Officers

All Named Executive Officers

All Named Executive Officers

When Received

Annually

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

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

Form

Cash

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

Equity

Performance Period

Continuous

1 Year

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

How Payment Determined

Committee Judgment

Performance Metrics for 70%; Individual Performance for 30%

100% Performance Metrics

Due to the high percentage of the compensation of our named executive officers that is variable and based on the performance of the Company, the effects of the COVID-19 pandemic negatively impacted the compensation earned by our named executive officers in 2020 (see page 57).

8 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Corporate Governance Highlights

Shareholder Engagement

In 2020 and early 2021, we had 517 interactions with our investors through meetings and property tours, representing ownership of approximately 84.1% of our outstanding common stock.  In addition, we proactively contacted the governance or stewardship departments of 110 of our investors and received responses from and had engagement meetings with representatives of 29 of such departments, representing ownership of approximately 44.3% of our outstanding common stock.

Proxy Access

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

Majority Voting

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

Bylaw Amendment

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

Succession Planning

We remain focused on refreshing the membership of the board. Over the past seven years, we have added five new independent directors to the board, most recently including the addition of Diane M. Morefield in 2020, Clint D. McDonnough in 2016, and Mary Ann King in 2015.

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

We also focus on the development of our executive management team.  Effective January 1, 2021 two Vice Presidents were promoted to Senior Vice Presidents and the titles and roles of other members of management were changed.  In 2019, the board appointed Jerry A. Davis to President – Chief Operating Officer and five Vice Presidents were appointed to Senior Vice President.  Further, over the three years ending December 31, 2020, 740 of our associates were promoted, building a deeper and more diverse associate pool.  Of associates that were promoted to the positions of community director or director, or a higher job classification, over such three year time period, 60% were female and 15% were of ethnic backgrounds other than White.

We have also formalized our efforts with respect to diversity, equity, and inclusion for the Company.  Our efforts have been discussed with our board and include formation of a committee dedicated to overseeing our efforts in this area, engagement of a consultant with expertise in the area to help guide our efforts, and an all associate survey to help identify potential areas of focus.

Lead Independent Director

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

Corporate Responsibility

Because of its importance to our stakeholders including our associates, residents and investors, we have made corporate responsibility a part of our culture.  Building on our efforts in 2019 and previous years, we had many successes in this area in 2020.  In 2020 we again reported to GRESB and based upon our submission we received a survey score of 83 and, for

9 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


the second consecutive year, a GRESB Public Disclosure rating of “A”.  Our survey score of 83 resulted in our earning a “4 Star” designation from GRESB, and our disclosure score of 97 was the highest within the GRESB determined comparison group.  In addition, in October of 2020 we published our second annual Corporate Responsibility Report.  The 2020 report was significantly enhanced by the inclusion of SASB real estate specific disclosures with respect to energy management, water management, management of tenant sustainability, and climate change adaption as well as the addition of the TCFD framework enhancing our disclosure around climate-related management.  In addition, in 2020 we obtained, and published in our Corporate Responsibility Report, independent third party assurance that our processes for measuring, compiling, and reporting primary electric, gas, water, and GHG-based metrics are accurate and complete.

We take an inclusive approach to corporate responsibility, addressing not only governance, see pages 24 through 36, but also the impact that our efforts have on the lives of our associates and our residents and the communities of which we are a part, as well as the impact of our apartment communities on the environment.  Some highlights with respect to our associates and residents are set forth elsewhere in this proxy statement, see pages 42 and 46.  In particular, in 2020 we formalized our approach to diversity, equity and inclusion and revised our culture statement and associate communication with respect to our culture and we include metrics in our short-term compensation program for senior management that are based on our success in these areas.  With respect to our communities, for a number of years we have considered environmental impacts when making decisions regarding acquisitions, development and re-development:

COVID-19 Pandemic

The COVID-19 pandemic negatively impacted not only our business, but also our residents and associates, and required targeted and intentional responses.  With respect to our residents, we worked with those residents who experienced financial hardship by, among other things, providing payment plans, allowing for payment by credit card without an additional fee, providing installment payment options without an additional fee, and, in certain markets, waiving late fees and foregoing rent increases.  We also have created processes to assist residents who qualify in seeking governmental rent assistance funds.  In addition, we enhanced our cleaning protocols, provided residents with opportunities to participate in virtual activities, and, using technologies incorporated into our Next Generation Operating Platform, expanded services available to residents and potential residents in a non-contact manner, for example by expanding the activities available to be completed on our app and by increasing the use of self-guided tours and adding virtual tours.  With respect to our associates, we offered additional time-off, one-time bonuses, flexible work schedules, work-from-home options, vacation buy-out programs, mental wellness programs and other benefits to assist with addressing the impacts of COVID-19 on associates and their families.  We also utilized our governmental affairs group, which was formed in early 2020, to track and report on a daily basis legislation and regulation on federal, state and local levels to help ensure we were aware of the rapidly changing regulatory landscape

10 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


PROXY SUMMARY

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

Meeting Agenda and Voting Recommendations

Graphic

Election of 9 Directors

Graphic

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

Diverse slate of directors with broad leadership experience.

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

Average director tenure of 11.8 years with 8 of 9 directors to be voted upon independent of management.

Graphic See pages 16-23 for further information

Our Existing Board

Years of Tenure

# of Other Public Company Boards

Committee Memberships (2)

Name

Principal Professional

Experience (1)

  

 

AC

CC

GC

NC

EC

Katherine A. Cattanach

General Partner of INVESCO Private Capital, Inc.

15

0

Graphic

Graphic

Graphic

Jon A. Grove

Chairman, President and CEO of ASR Investments Corporation

23

0

Graphic

Mary Ann King

Co-Head of Financial Services and Head of Institutional Sales of Berkadia

6

0

Graphic

Graphic

James D. Klingbeil(3)

Chairman and CEO of Klingbeil Capital Management and The Klingbeil Company

23

0

C

C

Clint D. McDonnough

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

5

1

C

Graphic

Robert A. McNamara

Group Chief Risk Officer of Lend Lease Corporation

7

1

Graphic

C

Graphic

Diane M. Morefield(4)

Executive Vice President, Chief Financial Officer of CyrusOne

0

1

Graphic

Graphic

Mark R. Patterson

President of MRP Holdings LLC

7

3

C

Graphic

Thomas W. Toomey(5)

Chairman and CEO of UDR, Inc.

20

0

Graphic

(1)

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

(2)

Committee assignments for the period from the 2021 annual meeting to the 2022 annual meeting will be made after the annual election of directors at the 2021 annual meeting.

(3)

Lead Independent Director.

(4)

Ms. Morefield was appointed to the Board of Directors in October 2020.

(5)

Chairman and Chief Executive Officer.

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

11 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Information About Our Board And Committees (Page 34)

Number of

Members

  

Independent

Number of

Meetings During

2020

Full Board of Directors

  

9

88.9%

8*

Audit and Risk Management Committee

  

4

100.0%

8

Compensation and Management Development Committee

  

3

100.0%

6

Governance Committee

  

4

100.0%

4

Nominating Committee

4

100.0%

1*

Executive Committee

  

3

66.7%

0

___________

* Also acted by unanimous written consent during the year.

The number of meetings of the board as well as communication to the board increased in 2020 as a direct result of COVID-19.

GOVERNANCE HIGHLIGHTS (Page 24)

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

Shareholder

Graphic

Annual election of all directors

Rights

Graphic

Majority voting in uncontested director elections

Graphic

Proxy access for eligible director candidates nominated by eligible shareholders

Graphic

No shareholder rights plan (poison pill)

Graphic

Confidential voting

Graphic

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

Graphic

Active shareholder engagement with holders of approximately 84.1% of outstanding shares in 2020 and early 2021

Graphic

Ability for shareholders to propose binding bylaw amendments

Independent

Oversight

Graphic

Strong Lead Independent Director role with clearly articulated responsibilities

Graphic

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

Graphic

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

Graphic

Independent directors meet regularly in executive session

Good

Governance

Graphic

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

Graphic

Annual board and committee self-evaluations

Graphic

Annual individual director evaluation process

Graphic

Periodic continuing education for directors

Graphic

Graphic

All directors attended at least 75% of meetings held

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

Graphic

Annual advisory approval of named executive officer compensation

Graphic

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

Graphic

Stock ownership guidelines for executive officers and directors

Graphic

Prohibition on hedging transactions

Graphic

Pledging transactions prohibited without prior approval

Graphic

Graphic

Graphic

Graphic

Graphic

Graphic

Policy on recoupment of performance-based incentives

No employment agreements with executives

Annual ESG reporting

Double-trigger acceleration of vesting in the event of a change in control

Twelve month minimum vesting on awards generally

Board and committee oversight of material risks, ESG and human capital management

12 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

Independent Registered Public Accounting Firm

Graphic

The Board recommends a vote FOR ratification of Ernst & Young LLP for 2021.

Independent firm with few ancillary services and reasonable fees.

Significant industry and financial reporting expertise.

Graphic See page 89 for further information

Ernst & Young LLP, independent registered public accounting firm, served as our auditors for fiscal 2020.  Our Audit Committee has selected Ernst & Young LLP to audit our financial statements for fiscal 2021. Although it is not required to do so, the board is submitting the Audit Committee’s selection of our independent registered public accounting firm for ratification by the shareholders at the annual meeting in order to ascertain the view of our shareholders regarding such selection. Below is summary information about Ernst & Young’s fees for services during fiscal years 2020 and 2019:

Description of Services

  

2020

 

  

2019

 

Audit Fees

  

$

1,512,986

  

  

$

1,813,186

  

Audit-Related Fees

  

 

  

  

 

  

Tax Fees

  

 

36,928

  

  

 

106,539

  

All Other Fees

  

 

  

  

 

  

TOTAL

  

$

1,549,914

 

  

$

1,919,725

  

13 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

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

Graphic

The Board recommends a vote FOR this proposal.

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

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

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

Our total shareholder return compares favorably to the peer group.

Graphic See page 90 for further information

Executive Compensation Matters (Page 48)

We are requesting your non-binding vote to approve the compensation of our named executive officers as described on pages 48 through 86 of this proxy statement. The goals for our executive compensation program are to (i) attract, retain and motivate effective executive officers, (ii) align the interests of our executive officers with the interests of the Company, our shareholders, our associates and our residents, (iii) incentivize our executive officers based on clearly defined performance goals and measures of successful achievement, and (iv) align market competitive compensation with our long-term and short-term performance.

Our shareholders have consistently supported our executive compensation program. At our 2020 Annual Meeting of Shareholders, 83% of the votes cast were voted in favor of our resolution seeking advisory approval of our executive compensation. Over the last five years, shareholder support for our advisory vote on executive compensation has averaged 87% (with no year below 83%). While we have consistently had strong shareholder support for our executive compensation program, we do continue to engage in a dialogue with shareholders on executive compensation issues. We will continue to consider the outcome of future advisory votes on executive compensation when establishing the Company’s compensation programs and policies and making compensation decisions regarding our named executive officers.  With respect to awards made in 2021 and thereafter, subject to shareholder approval (see Proposal No. 4), we have made changes to our compensation programs in part due to feedback we have received from shareholders.  These changes include adding a “double-trigger”” acceleration provision in connection with a change of control and adding a minimum 12 month vesting provision, subject to specific exclusions.

14 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

Approval of Amended and Restated 1999 Long-Term Incentive Plan

Graphic

The Board recommends a vote FOR this proposal.

The 1999 Amended and Restated 1999 Long-Term Incentive Plan has not been submitted to
stockholders for approval since 2014.

Increase the number of shares available for issuance from 19,000,000 to 35,000,000.

Provide for double-trigger acceleration of vesting in connection with a change of control with respect to grants made in 2021 and thereafter.

Provide for a minimum vesting period of one year, subject to certain exceptions described below, with respect to grants made in 2021 and thereafter.

Graphic See page 91 for further information

Our Use of Abbreviations: We use a number of abbreviations in this proxy statement. We refer to UDR, Inc. as “UDR,” “the Company,” “we,” “us” or “our” and to our board of directors as the “board.”  The term “proxy materials” includes this proxy statement, as well as the enclosed proxy card. References to “fiscal 2020” and “fiscal 2021” mean our 2020 fiscal year, which began on January 1, 2020 and ended on December 31, 2020, and our 2021 fiscal year, which began on January 1, 2021 and will end on December 31, 2021, respectively. We refer to the Audit and Risk Management Committee as the “Audit Committee.”  We refer to the Compensation and Management Development Committee as the “Compensation Committee.”  We refer to the U.S. Securities and Exchange Commission as the “SEC” and we refer to the New York Stock Exchange as the “NYSE.”  Our 2021 Annual Meeting of Shareholders to be held on May 27, 2021 is simply referred to as the “meeting” or the “annual meeting.”

15 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


PROPOSAL NO. 1 ELECTION OF DIRECTORS

The nine individuals listed below, each of whom is currently a member of the board, have been nominated for election to the board at the 2021 annual meeting of shareholders.  If any of the nominees is unable or declines to serve as a director at the time of the meeting, the proxies will be voted for any nominee who is designated by the present board to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. The directors elected will hold their respective offices until the next annual meeting of shareholders or until their successors are elected and qualified.

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

16 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Board Expertise

At UDR, we believe that diversity of background and perspective is an important attribute of a well-functioning board. Collectively, the members of our board standing for election embody a range of viewpoints, backgrounds and expertise.  Currently, 33% of the members of our board are women and, while our board does not currently have members who represent underrepresented populations, all recent searches have included ethnically diverse candidates (utilizing search firms with specific expertise with underrepresented populations) and we have adopted a “Rooney Rule” for all board searches.  The diversity of our board will continue to be a point of focus in connection with our board refreshment efforts:

Graphic

Graphic

17 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

KATHERINE A.

CATTANACH, PH.D.

Graphic

JON A. GROVE

Age:

76

Age:

76

UDR Board Service

UDR Board Service

Tenure: 15 years (2006)

Tenure: 23 years (1998)

Audit Committee

Compensation Committee

Executive Committee

Governance Committee

Independent

Independent

Professional Experience

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

Relevant Skills

Currently a member of the Institute of Chartered Financial Analysts.

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

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

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

Other

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

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

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

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

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

Professional Experience

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

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

Relevant Skills

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

18 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

MARY ANN KING

Graphic

JAMES D. KLINGBEIL

Age:

68

Age:

85

UDR Board Service

UDR Board Service

Tenure: 6 years (2015)

Tenure: 23 years (1998)

Audit Committee

Lead Independent Director

Governance Committee

Executive Committee Chair

Nominating Committee Chair

Independent

Independent

Professional Experience

Co-Head of Investment Sales and the Head of Institutional Sales for Berkadia, a privately-held commercial real estate firm that provides multifamily and commercial clients with a suite of services that include investment sales, mortgage banking and servicing.

Formerly, Ms. King was the Co-Chairman of Moran & Company, a real estate brokerage firm focusing exclusively on multifamily assets and mixed-use assets with significant multifamily components, whose investment sales operations were purchased by Berkadia in January of 2021.

Relevant Skills

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

Has served three terms as a Urban Land Institute (ULI) Trustee.

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

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

Other

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

Member of the Advisory Board of Sack Properties.

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

Professional Experience

Lead Independent Director since January 2018.

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

Chairman of Klingbeil Capital Management and The Klingbeil Company.

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

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

Relevant Skills

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

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

19 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

CLINT D. MCDONNOUGH

Graphic

ROBERT A. MCNAMARA

Age:

66

Age:

67

UDR Board Service

UDR Board Service

Tenure: 5 years (2016)

Tenure: 7 years (2014)

Audit Committee Chair

Compensation Committee

Nominating Committee

Governance Committee Chair

Nominating Committee

Independent

Independent

Professional Experience

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

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

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

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

Relevant Skills

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

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

Other

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

Currently a board member of the Dallas City Council.

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

Professional Experience

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

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

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

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

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

Relevant Skills

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

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

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

Other

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

Former Board member of several privately-held firms.

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

20 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

DIANE M. MOREFIELD

Graphic

MARK R. PATTERSON

Age:

62

Age:

60

UDR Board Service

UDR Board Service

Tenure: <1 years (2020)

Tenure: 7 years (2014)

Audit Committee

Compensation Committee Chair

Governance Committee

Nominating Committee

Independent

Independent

Professional Experience

Retired EVP and Chief Financial Officer of CyrusOne, a publicly-traded global data center REIT with revenue over $1 billion and a total enterprise value in excess of $12 billion, from 2016 through 2020.

Former EVP and Chief Financial Officer of Strategic Hotels & Resorts, a publicly-traded hotel REIT, from 2010 to 2015.

Prior to Strategic Hotels, Ms. Morefield was the SVP Operations of Equity Office and Chief Financial Officer of Equity International for 12 years.

Relevant Skills

Was responsible for CyrusOne’s accounting, finance, capital markets, tax, procurement and investor relations. During her tenure, she raised in excess of $13 billion of capital in numerous equity and debt transactions. She served on the executive leadership team that set strategy and oversaw the global expansion.

Ms. Morefield is a financial and operating executive with over 35 years of experience in CFO and corporate executive roles, primarily of publicly-traded real estate companies (REITs). She has successfully led all aspects of finance organizations and has extensive experience in M&A, having been involved with multiple acquisitions and divestitures over the course of her career. Ms. Morefield’s career also includes public accounting, consulting and real estate commercial banking.

Other

Ms. Morefield currently serves on the Board of Directors of Copart Inc. (Nasdaq) where she is Chair of the Governance and Nominating Committee and a member of the Audit Committee.

She also currently serves on the board, and is the Audit Committee Chair, of Link Logistics Real Estate, a logistics real estate portfolio owned by the Blackstone funds.

She served six years on the Board of Directors of Spirit Realty Capital, Inc. (NYSE) and as their Audit Committee Chair.

She has served on several other advisory and non-public boards.

Ms. Morefield earned her BS in Accountancy from the University of Illinois and is a CPA. She has her MBA from the University of Chicago Booth School of Business.

Professional Experience

Currently a real estate consultant and financial advisor and is a director and President of MRP Holdings LLC.

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

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

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

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

Relevant Skills

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

Other

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

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

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

21 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Graphic

THOMAS W. TOOMEY

Age:

60

UDR Board Service

Tenure: 20 years (2001)

Chairman of the Board

Executive Committee

Professional Experience

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

Over his tenure, Mr. Toomey has been instrumental in repositioning UDR’s portfolio, including the acquisition and disposition of approximately $20 billion in multifamily communities and development of $4 billion in multifamily communities, which has led to above average return of 12% for UDR’s shareholders. As of December 2020, UDR owned or had an ownership interest in approximately 52,589 apartment homes in select markets across the U.S.

Relevant Skills

Chairman and Chief Executive Officer of UDR.

Prior to heading UDR, Mr. Toomey held various senior positions, including Chief Operating Officer and Chief Financial Officer, with AIMCO (NYSE), a multifamily REIT peer, which in 2020 underwent a separation and became two public companies, Apartment Income REIT Corp. and AIMCO. At AIMCO, Mr. Toomey was instrumental in transforming the company into the largest apartment owner in the U.S., growing its portfolio ten-fold over his tenure.

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

Other

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

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

22 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Vote Required and Board of Directors’ Recommendation

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

 

Graphic Our board recommends that the

shareholders vote “FOR” the director nominees listed above.

 

23 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


CORPORATE GOVERNANCE MATTERS

Corporate Governance Overview

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

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

 

 

Statement on Corporate Governance;

  

 

Code of Business Conduct and Ethics;

  

 

Code of Ethics for Senior Financial Officers;

  

 

Related Person Transactions Policy;

  

 

Amended and Restated Insider Trading Policy;

  

 

Recoupment of Performance-Based Incentives Policy;

  

 

Executive Stock Ownership Guidelines;

 

 

Charter of the Audit Committee;

  

 

Charter of the Compensation Committee;

  

 

Charter of the Governance Committee; and

 

 

Charter of the Nominating Committee.

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

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

Principle 1:

Boards are accountable to shareholders.

All directors stand for election annually

Proxy access for eligible director candidates nominated by eligible shareholders

Shareholder ability to propose binding bylaw amendments

Principle 2:

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

Each shareholder gets one vote per share

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

Principle 3:

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

Management met with investors owning approximately 84% of shares outstanding in 2020 and early 2021

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

24 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Principle 4:

Boards should have a strong, independent leadership structure.

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

Board considers appropriateness of its leadership structure at least annually

Independent Committee Chairs

Proxy Statement discloses why board believes current leadership structure is appropriate

Principle 5:

Boards should adopt structures and practices that enhance their effectiveness.

As of March 31, 2021, 88.9% of board members are independent

Annual board evaluation

Active board refreshment plan; five new board members in last seven years

Principle 6:

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

Our vote on our executive compensation program has received shareholder support averaging 87% over the last five years

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

Annual and long-term incentive programs are designed to reward financial and operational performance that furthers short- and long-term strategic objectives and include metrics assessing our performance relative to that of our peers

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

 

 

The board has adopted clear corporate governance policies;

  

 

Eight of our nine current board members (and eight of the nine to be voted on at the 2021 annual meeting) are independent directors as defined by the NYSE;

  

 

The independent directors meet without the presence of management at each regularly scheduled meeting;

  

 

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

  

 

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

  

 

The charters of the board committees clearly establish their respective roles and responsibilities, including their responsibilities for oversight of risks, and are reviewed annually;

The entire board oversees and receives reports with respect to our ESG, culture and DEI efforts;

 

 

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

  

 

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

25 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


  

 

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

Majority Voting Standard for Uncontested Director Elections

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

Our Commitment to Shareholder Engagement

The Company has an ongoing proactive practice of meeting with and discussing corporate governance issues with significant shareholders throughout the year.  We value the insights of and feedback from our shareholders and remain committed to ongoing engagement with investors.  To this end, we engage in regular outreach to enable meaningful discussion and deliver feedback to our board to help drive strategic results.  In 2020 and early 2021, we engaged in direct outreach and discussions with 517 shareholders representing 84.1% of our outstanding shares including representatives of governance and stewardship functions representing 44.1% of our outstanding shares, although certain opportunities to engage with investors were curtailed due to the pandemic.  Key topics of focus during such interactions included company strategy and results, technological operating and capital allocation initiatives and environmental, social and governance (ESG) matters.

Ongoing Shareholder Outreach: Our Chairman and Chief Executive Officer, President, Chief Financial Officer, and Investor Relations team frequently meet and interact with shareholders and the investment community throughout the year.  In addition, in 2020 and early 2021, we affirmatively contacted key governance / stewardship contacts at our investors to ask for engagement opportunities specific to environmental, social and governance (ESG) matters.  As a result of these efforts, members of management, including our Chairman and Chief Executive Officer, Senior Advisor to the Office of the Chairman, General Counsel, Chief Financial Officer, and Investor Relations team, were able to meet and interact with key governance contacts at a number of our shareholders representing 44.1% of our outstanding shares and have in depth discussions regarding a variety of ESG matters.

26 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Purposeful Engagement: We seek transparent and collaborative discussions with shareholders, and our engagement with investors includes the appropriate level of senior management for the topics being discussed to ensure actionable outcomes, where appropriate.
Regular Board Meetings: The Governance Committee, Compensation Committee, Audit Committee, and the board request and receive reports regarding shareholder engagement several times each year from UDR management.  In addition to reviewing the content of such reports, our board will consider shareholders’ feedback and insights.
We also attend a variety of investor conferences annually at which we interact with shareholders throughout the year. While the schedule may vary year-to-year and in 2020 many conferences were cancelled, the conferences we attended in 2020 are as follows:
oMarch 2020
Citi Global Property CEO Conference
oJune 2020
NAREIT 2020 Investor Conference (Virtual)
European Non-Deal Roadshow hosted by JP Morgan (Virtual)
oSeptember 2020
US Non-Deal Roadshow hosted by Citi (Virtual)
Evercore ISI Annual Real Estate Conference (Virtual)
Bank of America Global Real Estate Conference (Virtual)
oNovember 2020
NAREIT REITWorld 2020 Annual Conference (Virtual)

Identification and Selection of Nominees for Directors

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

The board believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of our business as well as diversity with respect to gender and ethnicity.  In our Code of Business Conduct and Ethics we describe diversity as embracing the following characteristics with respect to the Company as a whole, including our board: age, race, gender, nationality, physical ability, culture, religion, marital status, sexual orientation, experience and perspective.  In 2020, consistent with its overall views with respect to diversity and in order to formalize our practice, the board enhanced our Statement on Corporate Governance and the Charter of our Nominating Committee by amending such documents to adopt a “Rooney Rule” specifically requiring that diverse candidates, based on gender and ethnicity, be included in the initial pool for any external search for director candidates or for any external search for a Chief Executive Officer.  In addition, any search firm used for conducting any such searches is required to include such candidates in its initial pool of candidates.  Since 2019 we have hired search firms with specific experience in identifying candidates from underrepresented populations in connection with searches for board candidates.  While our board does not currently include any members that self-identify as an

27 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


underrepresented minority, all recent searches for potential board members have included, and future searches will continue to include, diverse candidates. The diversity of our board will remain a focus in connection with our board refreshment efforts.  The board, through the Nominating Committee and in consultation with our CEO, will regularly review the changing needs of the business and the skills and experience of its board members, with the intention that the board will be periodically “renewed” as certain directors rotate off and new directors are recruited. The board’s commitment to diversity and renewal will be tempered by the need to balance change with continuity and experience. The board believes that its commitment in this regard has been effective in establishing a board that consists of members with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of the business, and the board will continue to monitor the effectiveness of these efforts as part of its periodic self-assessment process.

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

Graphic

In addition to any other applicable requirements, Section 2.11 of the bylaws sets forth the procedures and requirements relating to nominations of directors by shareholders. Any shareholder who wishes to recommend a prospective nominee for consideration at our 2022 annual meeting of shareholders must submit specified information, no sooner than November 9, 2021 and no later than December 9, 2021.

Each proposed candidate also must submit a written questionnaire, representation and agreement specifically addressing agreements, arrangements or understandings that the candidate has with certain other persons, including with respect to voting commitments and compensation, as well as a representation and agreement to comply with our applicable policies, codes and guidelines. Such information should be sent to the attention of our Corporate Secretary at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129-1540.

Proxy Access

28 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


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

Shareholder Bylaws Amendments

In 2018, following the approval by our shareholders of a charter amendment, the board amended our bylaws to provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years could propose a binding amendment to our bylaws.  A shareholder proposal submitted under our amended bylaws may not alter, modify or repeal Article VII of the bylaws (which addresses indemnification) or Section 8.5 (which addresses procedures for amending the bylaws) without the approval of any indemnitees adversely affected or our board, respectively.  Prior to the 2018 annual meeting we had engaged with shareholders holding approximately 74% of our outstanding common stock regarding the amendment and, while there was no consensus as to the appropriate ownership limits, some of our shareholders did indicate our ownership limits were acceptable.  Further, our research confirmed and continues to confirm that a number of companies require a supermajority of shareholders to amend the bylaws and that a number of companies incorporated in Maryland continue to provide their boards of directors the exclusive ability to amend their bylaws.

Director Rotation and Retirement

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

Director Independence

The board’s policy is that a significant majority of its members should be independent directors (see our Statement on Corporate Governance, which is available on our website at ir.udr.com). Each year, the board affirmatively determines whether each director has any material relationship with the Company (directly, or as a partner, shareholder or officer of an organization that has such a relationship with the Company), as defined under the NYSE listing standards and the Company’s director independence standards. The board has determined that all directors who served in 2020, and the directors who are standing for election at the annual meeting, are independent under both sets of standards, except Mr. Toomey, who is not independent because, in addition to serving as Chairman, he is the Company’s CEO. Additional information about each of the directors standing for election is set forth under Proposal No. 1 in this proxy statement. In making these independence determinations, the board considered information submitted by the directors in response to directors’ questionnaires and information obtained from the Company’s internal records.

29 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Succession Planning

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

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

Mr. Lacy, our Senior Vice President – Property Operations, and other members of management took on enhanced duties with respect to our operations in connection with the resignation of Mr. Davis as Chief Operating Officer at the beginning of 2021;
Mr. Davis remains as President focusing on our Next Generation Operating Platform;
Two Vice Presidents were promoted to Senior Vice President in 2021;
Five Vice Presidents were promoted to Senior Vice Presidents in 2019;
We had successful CFO and Chief Accounting Officer transitions in 2017;
Over the three-year period ending on December 31, 2020 we have deepened our management pool and have also made it more diverse:
60% of associates who were promoted to the positions of community director or director or higher job classifications were female; and
15% of associates who were promoted to the positions of community director or director or higher job classifications were of ethnic backgrounds other than White;
Over the three-year period ending on December 31, 2020, 740 of our associates were promoted of which, at the level of director or community director and higher job classifications, 60% were female;
In 2020, our associates took 25,350 hours of training including training designed to help them increase their skills to allow career advancement; and
Our workforce is diverse – 61% male, 39% female; 55% white, 45% other ethnicity.

30 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


The following outlines certain highlights of our succession planning:

Management Succession

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

We have a formal plan in place addressing an emergency vacancy in the CEO position.

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

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

Talent development and succession planning is a coordinated effort among the CEO, the Compensation Committee, the Senior Vice President – Organizational Development and Engagement and the Company’s Human Resources team, as well as each succession candidate.

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

All executive succession candidates have development plans, which include the use of outside consultants for assessment and coaching.

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

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

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

Director Responsibilities and Obligations

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

Responsibilities of the

Board of Directors:

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

Director Education:

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

Director Evaluations:

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

Committee Evaluations:

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

Directors’ Share

Ownership Guidelines:

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

31 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Board Attendance at

Annual Meeting:

The board has adopted the following policy on director attendance at meetings: Absent extenuating circumstances, such as the COVID-19 pandemic which forced the 2020 annual meeting and certain board and committee meetings to be held virtually, directors are expected to attend in person our annual meeting of shareholders, all regularly scheduled board and committee meetings and to participate telephonically or via web based application in regularly scheduled board and committee meetings when they are unable to attend in person. All of our nine serving directors who were directors at such time attended our 2020 annual meeting of shareholders virtually.

Board Leadership Structure and Committees

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

Board Leadership Structure:

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

We currently combine the roles of the Chairman of the Board and Chief Executive Officer.  Effective January 1, 2018, the board appointed Mr. Toomey Chairman of the Board, in addition to his roles at that time of Chief Executive Officer and President. The appointment of Mr. Toomey to the role of Chairman of the Board, Chief Executive Officer and President in 2018 reflected his strong knowledge of the multifamily real estate industry and the complex operations of UDR. Effective January 1, 2019, Mr. Toomey resigned as President and Mr. Davis was appointed President – Chief Operating Officer.  Mr. Davis resigned as Chief Operating Officer effective December 31, 2020, but remains President. The board believes that while serving as Chairman and Chief Executive Officer, Mr. Toomey is best equipped to lead the board in the discussion of key business and strategic matters, and to focus the board on the most critical issues facing UDR. The board further believes that, in serving as the Chairman and Chief Executive Officer, Mr. Toomey offers the Company-specific expertise and extensive industry knowledge that is necessary as we pursue our five strategic objectives, which are operating excellence, balance sheet strength, portfolio diversification, capital allocation and creating an empowering culture and a great place to work and live, while at the same time leading the board’s efforts in oversight of the Company and its management.

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

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

presiding at all meetings of the board at which the Chairman is not present;
calling meetings of the independent directors;
chairing meetings of the independent directors;
serving as a liaison between the Chairman and the independent directors;
approving agendas for the meetings of the board;
approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;
developing and managing (with oversight from the Governance Committee) a process for the annual evaluation of the effectiveness of directors and the board;

32 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


serving as an informal advisor to the Chairman on matters pertaining to board practices; and
performing such other duties as the board may from time to time delegate.

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

Independence of the Audit,

Compensation, Governance and Nominating Committees:

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

Audit Committee

Financial Expert:

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

Executive Sessions of

Independent Directors:

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

Compensation Committee

Interlocks and Insider

Participation:

The members of the Compensation Committee in fiscal 2020 included Jon A. Grove, Robert A. McNamara, and Mark A. Patterson (Chairman). None of the members of the Compensation Committee during fiscal 2020, or as of the date of this proxy statement, is a former or current officer or employee of the Company or has any interlocking relationships as set forth in applicable SEC rules. In addition, during 2020 and through the date of this proxy statement, none of our executive officers has served as a member of the board or compensation committee of any other entity that has one or more executive officers serving as a member of our board or Compensation Committee.

 Role of Compensation Committee and Compensation Consultants

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

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

The Compensation Committee has the sole authority to retain and terminate any compensation consultants to be used to assist in establishing compensation for our executive officers and to approve such consultants’ fees and other retention terms. The Compensation Committee engaged FPL Advisory Group as its independent compensation consultant for 2020.

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

33 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Board of Directors and Committee Meetings

The board held eight meetings during fiscal 2020, including five meetings that were held by teleconference or by web-based application. No director attended fewer than 75% of the aggregate of (1) the total number of meetings of the board, and (2) the total number of meetings held by all committees of the board on which he or she served during fiscal 2020, held during the time such director was a member of the board or the applicable committee. The board has standing Audit, Compensation, Governance, Nominating and Executive Committees to assist it in discharging its duties. Information regarding each committee is set forth below:

Committee

 

Members on 

12/31/2020    

 

Key Functions

 

Number of

Meetings

 in 2020  

Audit

 

Clint D. McDonnough(1)

Katherine A. Cattanach

Mary Ann King

Diane M. Morefield

 

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

Appointment, compensation and oversight of our independent auditors

• Represents and assists the board in its oversight of:

• the quality or integrity of our financial statements;

• our compliance with legal and regulatory requirements; and

• the performance of our internal audit department and independent auditors

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

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

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

Oversees risk management policies and risk assessment

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

 

8

Compensation

 

Mark R. Patterson(1)

Jon A. Grove

Robert A. McNamara

 

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

Reviews and approves compensation for the board and its committees

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

Determines and approves the compensation of our CEO

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

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

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

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

Appoints and provides oversight of independent compensation consultants

Oversees our efforts with respect to our culture, DEI and our workforce

 

6

Governance

 

Robert A. McNamara (1)

Katherine A. Cattanach

Mary Ann King

Diane M. Morefield

 

Exercises general oversight of board governance matters

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

Reviews and evaluates the board and its members

Reviews and updates our Corporate Governance Policies

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

Ensures that each committee conducts an annual assessment

Oversees disclosure of environmental, social and governance matters

 

4

34 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Nominating

James D. Klingbeil(1)

Clint D. McDonnough

Robert A. McNamara

Mark R. Patterson

Identifies, evaluates and recommends to the board individuals qualified to serve as directors of the Company

Establishes criteria for the selection of new directors

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

Establishes procedures for the submission or recommendations by shareholders

1

Executive

 

James D. Klingbeil(1)

Katherine A. Cattanach

Thomas W. Toomey

 

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

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

 

0

  

(1)

Committee Chair.

The Role of the Board in Risk Oversight

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

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

with the following principles:

The Audit Committee is responsible for:

The Compensation Committee is responsible for:

The Governance Committee is responsible for:

Oversight of risks related to integrity of financial statements, including oversight of financial reporting principles and policies and internal controls.
Risks related to regulatory and compliance matters generally.
Oversight responsibility of the Company’s efforts with respect to cybersecurity risks.
Oversight responsibility generally for our Enterprise Risk Management activities.

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

Oversight of risks related to corporate governance matters, including succession planning, director independence and related person transactions.
Oversight of the Company’s workforce diversity, equity and inclusion efforts.
Oversight of the Company’s disclosure regarding environmental, social and governance matters.

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

35 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Board Evaluation

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

STEPS TO ACHIEVE BOARD EFFECTIVENESS – EVALUATION PROCESSES

How We Evaluate the Board’s Effectiveness

Annual Evaluation Process

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

Evaluation Questionnaires

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

Discussion of Results

Based upon the written questionnaires, the lead independent director may conduct one-on-one interviews with members of the board. The lead independent director reviews the questionnaire and interview responses, as applicable, with the full board.  

Use of Feedback

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

Communicating with the Board

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

 

 

UDR, Inc.

Attn: Board of Directors

1745 Shea Center Drive,

Suite 200

Highlands Ranch, Colorado 80129-1540

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

 

 

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

 

 

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

 

 

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

Shareholders and all other interested parties may submit concerns regarding accounting matters via the Company’s third-party anonymous reporting system at http://udr.ethicspoint.com or by calling 1-844-989-2850. Instructions for making a report are published in the Corporate Governance section of the Investor Relations page of the Company’s website at ir.udr.com. 

36 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


COMPENSATION OF DIRECTORS

The following table provides information concerning the compensation of our directors for fiscal 2020.

Director Compensation Table

Name

(a)

  

        Fees Earned         

or Paid

in Cash ($)

(b)

 

  

Stock

Awards  ($)

(c)(1)(2)(5)

 

  

Option

Awards ($)

(d)

 

  

Non-Equity

Incentive Plan

  Compensation ($)  

(e)

 

  

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

(f)

 

  

All Other

Compensation ($)

(g)(3)

 

  

Total ($)

(h)

 

  Katherine A. Cattanach(4)

  

$

80,000

 

  

$

160,008

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

$

7,403

 

  

$

247,411

 

  Jon A. Grove(4)

  

 

80,000

 

  

 

132,167

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

7,403

 

  

 

219,570

  

Mary Ann King(4)

80,000

132,167

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

7,403

219,570

  James D. Klingbeil(4)

  

 

120,000

 

  

 

230,005

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

10,795

 

  

 

360,800

  

Clint D. McDonnough(4)

95,000

130,417

-0-

        -0-

      -0-

7,865

233,282

Robert A. McNamara

95,000

141,431

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

4,935

 

  

 

241,366

Diane M. Morefield(4)(5)

18,400

36,791

-0-

        -0-

      -0-

560

55,751

Mark R. Patterson

95,000

 

  

 

141,431

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

4,935

 

  

 

241,366

  Thomas W. Toomey(6)

  

 

-0-  

 

  

 

-0-  

 

  

 

-0-

  

  

 

        -0-

  

  

 

      -0-

  

  

 

-0-  

 

  

 

-0-    

 

(1)

The dollar amount reflected in the “Stock Awards” column reflects the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of a grant of shares of restricted stock, or Class 1 LTIP Units, which vested on the first anniversary date of the grant, as discussed below under “Director Compensation Table Discussion.” For those independent directors who elected to receive restricted stock, the amount of restricted stock was 3,469 shares (4,987 shares for an independent Chairman of the Board), which was priced at $46.12 per share, which was the closing sales price of our common stock on January 2, 2020, the date of grant. For those independent directors who elected to receive Class 1 LTIP Units, the amount was 3,469 units (4,987 units for an independent Chairman of the Board), and the Class 1 LTIP Units were priced at $46.12 per unit, which was the closing sales price of our common stock on January 2, 2020, the date of grant.

(2)

The following table sets forth the restricted stock awards and Class 1 LTIP Unit awards outstanding as of December 31, 2020 for each of our independent directors. Mr. Toomey’s holdings are set forth under the heading “Executive Compensation” in this proxy statement. The restrictions relating to these awards are described in more detail below under the heading “Director Compensation Table Discussion — 2020 Director Compensation Program.”

  

 

 

 

 

 

 

 

 

Director

  

Restricted Stock

Awards Outstanding*

 

LTIP Unit

Awards Outstanding*

Non-Qualified Stock

Option Awards

Outstanding

 

 

 

 

Katherine A. Cattanach

  

 

5,204

  

-0-

 

-0-

  

Jon A. Grove

  

 

-0-

  

5,204

 

-0-

  

Mary Ann King

-0-

5,204

-0-

James D. Klingbeil

  

 

7,589

  

-0-

 

-0-

  

Clint D. McDonnough

-0-

5,529

-0-

Robert A. McNamara

-0-

3,469

-0-

Diane M. Morefield

1,556

-0-

-0-

Mark R. Patterson

-0-

3,469

-0-

 *

Restricted stock or LTIP Unit awards that were granted on January 4, 2021 pursuant to our 2021 independent director compensation program are not included in this table, but are discussed below under “Director Compensation Table Discussion — 2021 Director Compensation Program.”

(3)

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

(4)

These directors elected to receive their cash portion of the fees in restricted stock and/or Class 1 LTIP Units, as follows: Dr. Cattanach received 1,735 shares of restricted stock, Mr. Grove and Ms. King each received 1,735 Class 1 LTIP Units, Mr. McDonnough received 2,060 Class 1 LTIP Units, Ms. Morefield received 519 shares of restricted stock and Mr. Klingbeil received 2,602 shares of restricted stock.

(5)

Ms. Morefield joined the board in October 2020 and her compensation was prorated and was priced at $35.47, which was the closing sale price on October 9, 2020, the date of grant.

(6)

Mr. Toomey is our Chairman and Chief Executive Officer. Because he is an employee of the Company, he receives no additional compensation for service as a director of the Company. His total compensation for 2020 is set forth below under the heading “Executive Compensation.”

Director Compensation Table Discussion

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

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

37 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


2020 Director Compensation Program

Retainer. For 2020 there was no change from 2019 to the independent director compensation program, each independent director receives an annual retainer fee of $80,000 ($120,000 for the Lead Independent Director).  The chairpersons of each of the Audit and Compensation Committees also receive an annual retainer fee of $15,000. These fees were paid in January 2020.

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

Equity Grant. Each independent director also receives a grant of $160,000 in value of shares of restricted stock and/or Class 1 LTIP Units ($230,000 for the Lead Independent Director).  For those independent directors who elected to receive restricted stock, the restricted stock was priced at $46.12 per share, which was the closing sales price of our common stock on January 2, 2020, the date of grant. The shares of restricted stock vested on January 2, 2021. The independent directors receiving restricted stock are entitled to receive dividends during the vesting period; however, any unvested shares at the end of the one-year vesting period will be returned to us and cancelled.

For those independent directors who elected to receive Class 1 LTIP Units, the Class 1 LTIP Units were priced at $46.12 per unit, the closing sales price of our common stock on January 2, 2020, the date of grant. The Class 1 LTIP Units vested on January 2, 2021.  The independent directors who received Class 1 LTIP Units were entitled to receive distributions during the vesting period; however, any unvested Class 1 LTIP Units at the end of the one-year vesting period would be returned to us and cancelled.

2021 Director Compensation Program

For 2021 there was no change to the independent director compensation program from 2020 except that independent directors can elect restricted stock, Class 1 LTIP Units or Class 1 Performance LTIP Units for portions of their compensation paid in equity.  Portions of the compensation paid in equity will vest on the one year anniversary of the grant date.

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

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

38 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


Strategy – Updated 2-Year Strategic Plan

ACTIVE AND ENGAGED BOARD – SELECT ACTIONS OVER LAST SIX YEARS

Graphic

39 | UDR

PROXY STATEMENT and notice of annual meeting of SHAREHOLDERS

2021


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT

The following table sets forth the shares of our common stock beneficially owned by (1) each of our directors, (2) the named executive officers, (3) all of our directors and executive officers as a group, and (4) all persons known by us to beneficially own more than 5% of our outstanding voting stock. We have determined the beneficial ownership shown on this table in accordance with the rules of the SEC. Under those rules, shares are considered beneficially owned if held by the person indicated, or if such person, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise has or shares the power to vote, to direct the voting of and/or to dispose of or to direct the disposition of such security. Except as otherwise indicated in the accompanying footnotes, beneficial ownership is shown as of March 29, 2021.

Amount and Nature of Beneficial Ownership  

 

 

 

 

 

Shares for  Which
Beneficial
Ownership can
be Acquired
Within 60
Days

 

 

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

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

Shares
Beneficially
Owned(1)

 

 

 

 

Total Beneficial Ownership

 

Name of Beneficial Owner

 

 

 

 

Number of
Shares(3)

 

  

Percent of
Class
(3)(4)

 

  Thomas W. Toomey

 

 

1,203,726

(5)

 

 

  

 

 

3,219,209

  

 

4,422,935

  

 

1.47

%

  James D. Klingbeil

 

 

146,093

(6)

 

 

  

 

 

2,315,086

(6) 

 

2,461,179

  

 

    

  Warren L. Troupe

 

 

320,761

  

 

 

  

 

 

269,387

  

 

590,148

  

 

    

  Jerry A. Davis

 

 

169,887

 

 

  

 

 

429,893

  

 

599,780

  

 

    

  Harry G. Alcock

 

 

67,667

  

 

 

  

 

 

861,883

  

 

929,550

  

 

    

  Jon A. Grove

 

 

450,058

  

 

 

  

 

 

75,012

  

 

525,070

  

 

    

Joseph D. Fisher

35,486

1,121,516

1,157,002

*

  Katherine A. Cattanach

 

 

76,633

  

 

 

  

 

 

18,418

  

 

95,051

  

 

    

  Robert A. McNamara

21,993

18,610

40,603

    

Clint D. McDonnough

11,496

70,466

81,962

*

Diane M. Morefield

1,556

29,907

<