Regency Centers Corp (NASDAQ:REG) and Regency Centers, L.P. have announced an amendment to their severance and change of control agreement with President and CEO Lisa Palmer. The adjustment, effective on Monday (NASDAQ:MNDY), modifies the cash severance terms for certain termination scenarios.
Under the new terms, if Palmer is terminated without cause or resigns for good reason outside of a change of control period, she is entitled to a lump sum payment equal to two years of base salary, twice the average annual bonus from the preceding three years, and a two-year equivalent of medical benefits based on COBRA rates.
During a change of control period, if Palmer faces similar termination conditions, the severance increases to three years of base salary, three times the average annual bonus, plus three years of medical benefits, and a prorated target annual bonus for the termination year. The amendment also includes provisions to avoid excise tax on "excess parachute payments," offering Palmer the better after-tax benefit between paying the excise tax or capping the severance payments.
These changes to the agreement, initially made on January 5, 2022, have been filed with the SEC as part of a Form 8-K and are detailed in Exhibit 10.1. This amendment aims to provide a revised compensatory framework for the company's top executive in the event of her departure under specified conditions. The rest of the agreement remains unchanged. This news is based on a press release statement.
In other recent news, Regency Centers has reported strong third-quarter results for 2024, with significant same-property net operating income (NOI) growth and high occupancy rates. The company's Nareit Funds From Operations (FFO) were reported at $1.07 per share, and core operating earnings were $1.03 per share. These robust results have led to an increase in the company's full-year guidance, reflecting confidence in its operational performance and strategic investments.
KeyBanc Capital Markets maintained its positive outlook on Regency Centers and reiterated its Overweight rating and a price target of $80.00 for the company's shares. The firm expects Regency Centers' SPNOI growth to remain strong in the near term, with a significant portion of the company's SPNOI pipeline scheduled to commence in the fourth quarter of 2024.
Regency Centers has made noteworthy investments in its development pipeline, with project starts totaling between $200 million and $250 million. Looking forward into 2025, the company expects a similar growth trajectory, with Nareit FFO growth predicted to exceed 5%.
However, the company is aware of significant leases that could impact the projected NOI growth for 2025.
InvestingPro Insights
Regency Centers Corp's recent amendment to its CEO's severance agreement aligns with the company's strong financial position and market performance. According to InvestingPro data, Regency Centers boasts a market capitalization of $13.56 billion and has demonstrated solid revenue growth of 13.47% over the last twelve months as of Q3 2024. This growth trajectory supports the company's ability to offer competitive executive compensation packages.
InvestingPro Tips highlight that Regency Centers has raised its dividend for 11 consecutive years and has maintained dividend payments for 31 consecutive years. This consistent dividend policy reflects the company's financial stability and commitment to shareholder returns, which may be factors in structuring executive retention strategies like the amended severance agreement.
The company's stock is currently trading near its 52-week high, with a significant price uptick of 28.47% over the last six months. This positive market sentiment suggests investor confidence in the company's leadership and strategic direction under CEO Lisa Palmer.
For investors seeking a deeper understanding of Regency Centers' financial health and market position, InvestingPro offers 8 additional tips, providing a comprehensive analysis to inform investment decisions.
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