Piedmont Office (NYSE:PDM) Realty Trust, Inc. (NYSE:PDM), a real estate investment trust (REIT) specializing in the ownership and management of office properties, announced today the appointment of Sherry Rexroad as the company's new Chief Financial Officer (CFO), effective November 8, 2024. Ms. Rexroad will take over from Robert Bowers, the current Executive Vice President & Chief Financial & Administrative Officer.
Ms. Rexroad is set to join the company on Monday as Executive Vice President, Finance, before transitioning into the CFO role. Her extensive experience in the real estate sector includes her recent position as CFO of STORE Capital LLC and a decade-long tenure at BlackRock (NYSE:BLK) Global Real Asset Securities, where she served as Global Head of Business Development and Co-Global Chief Investment Officer.
As part of her compensation package, Ms. Rexroad will receive an annual base salary of $475,000 with the potential for a bonus of up to 150% of that amount. For the 2024 fiscal year, her bonus will be prorated. She will also receive a one-time equity award worth $600,000 in deferred stock units, vesting over four years, and annual equity awards starting in fiscal year 2025 with a value of $950,000. Additionally, a $50,000 relocation bonus will be provided to assist with her move to Atlanta.
The company's board of directors also adopted an Executive Severance Plan on September 30, 2024, which provides severance benefits to executive officers and certain other executives upon qualifying terminations. The plan includes cash severance based on a multiplier of the executive's salary and target bonus, a prorated bonus for the fiscal year of termination, and a lump sum payment for accrued compensation. Furthermore, time-based equity awards will vest upon termination, with performance-based awards converting to time-based awards in the event of a Change in Control.
Mr. Bowers will remain with Piedmont Office Realty Trust until December 31, 2024, to ensure a smooth transition. He will receive severance benefits as outlined in the company's proxy statement and governed by a Separation Agreement dated September 30, 2024.
In other recent news, Piedmont Office Realty Trust has been experiencing robust leasing growth, as indicated by the company's second quarter results in 2024. The real estate investment trust reported over one million square feet of leasing activity, the highest quarterly volume in over a decade. This increase was driven by more than 400,000 square feet of new tenant leasing and significant renewals, leading to a rise in portfolio occupancy.
Truist Securities recently updated its outlook on Piedmont Office Realty Trust, increasing the price target to $11.00 from the previous $10.00, while maintaining a Buy rating on the stock. The analyst from Truist Securities also revised the 2024 funds from operations (FFO) estimate for the company slightly upwards by one cent per share.
Despite a decrease in Core FFO per diluted share for Q2 2024, reported at $0.37 down from $0.45 in Q2 2023, Piedmont remains optimistic about future leasing trends. The company has a leasing pipeline over 250,000 square feet and over 2 million square feet in outstanding proposals.
InvestingPro Insights
As Piedmont Office Realty Trust (NYSE:PDM) welcomes Sherry Rexroad as its new CFO, investors may find additional context from recent financial data and expert insights valuable. According to InvestingPro, PDM's market capitalization stands at $1.25 billion, with a price-to-book ratio of 0.76 as of the last twelve months ending Q2 2024, suggesting the stock may be undervalued relative to its assets.
Despite the company's recent leadership changes, PDM has maintained dividend payments for 15 consecutive years, as noted by an InvestingPro Tip. This consistency in shareholder returns could be reassuring for investors during this transition period. Additionally, the company's dividend yield is currently at 5.03%, which may be attractive to income-focused investors.
Another InvestingPro Tip highlights that PDM has seen a strong return over the last three months, with data showing a 39% price total return over this period. This positive momentum, coupled with the fact that PDM is trading near its 52-week high (98.25% of the high), may indicate market confidence in the company's direction and the potential positive impact of the new CFO appointment.
For those interested in a more comprehensive analysis, InvestingPro offers 7 additional tips for PDM, providing a deeper understanding of the company's financial health and market position.
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