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Weingarten Realty Investors DEF 14A 2008 WEINGARTEN
REALTY INVESTORS
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
May
7, 2008
To
Our Shareholders:
You are
invited to attend our annual meeting of shareholders that will be held at our
corporate office located at 2600 Citadel Plaza Drive, Houston, Texas 77008, on
Wednesday, May 7, 2008, at 9:00 a.m., Houston time. The purpose of
the meeting is to vote on the following proposals:
Shareholders
of record at the close of business on March 14, 2008 are entitled to notice of,
and to vote at, the annual meeting. A proxy card and a copy of our
annual report to shareholders for the fiscal year ended December 31, 2007 are
enclosed with this notice of annual meeting and proxy statement.
Your
vote is important. Accordingly, you are asked
to vote, whether or not you plan to attend the annual meeting. You
may vote by: (i) mail by marking, signing, dating and returning the accompanying
proxy card in the postage-paid envelope we have provided, or returning it to
Weingarten Realty Investors, c/o Broadridge, 51 Mercedes Way, Edgewood, NY
11717, (ii) using the Internet at www.proxyvote.com, (iii) phone by calling
1-800-690-6903, or (iv) attending the annual meeting and voting in person.
If you plan to attend the annual meeting to vote in person and your
shares are registered with our transfer agent, BNY Mellon Shareowner Services,
or in the name of a broker or bank, you must secure a proxy from the broker or
bank assigning voting rights to you for your shares. You may revoke your proxy
by (i) executing and submitting a later dated proxy card, (ii) subsequently
authorizing a proxy through the Internet or by telephone, (iii) sending a
written revocation of proxy to our Secretary at our principal executive office,
or (iv) attending the annual meeting and voting in person.
By Order
of the Board of Trust Managers,
M.
Candace DuFour
Senior
Vice President and Secretary
March 26,
2008
Houston,
Texas
TABLE
OF CONTENTS
i
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
Wednesday,
May 7, 2008
Weingarten
Realty Investors
2600
Citadel Plaza Drive
Houston,
Texas 77008
The board
of trust managers is soliciting proxies to be used at the 2008 annual meeting of
shareholders to be held at our corporate office located at 2600 Citadel Plaza
Drive, Houston, Texas 77008, on Wednesday, May 7, 2008, at 9:00 a.m., Houston
time. This proxy statement, accompanying proxy card and annual report
to shareholders for the fiscal year ended December 31, 2007 are first being
mailed to shareholders on or about March 26, 2008. Although the
annual report is being mailed to shareholders with this proxy statement, it does
not constitute part of this proxy statement.
Who
May Vote
Only
shareholders of record at the close of business on March 14, 2008 are entitled
to notice of, and to vote at, the annual meeting. As of March 14,
2008, we had 83,925,461 common shares of beneficial interest issued and
outstanding. Each common shareholder of record on the record date is
entitled to one vote per share on each matter properly brought before the annual
meeting for each common share held.
In
accordance with our amended and restated bylaws, a list of shareholders entitled
to vote at the annual meeting will be available at the annual meeting and for 10
days prior to the annual meeting, between the hours of 9:00 a.m. and 4:00 p.m.
local time, at our principal executive offices listed above.
How
You May Vote
You may vote using
any of the following methods:
1
You may
revoke your proxy at any time before it is exercised by:
Voting by
proxy will in no way limit your right to vote at the annual meeting if you later
decide to attend in person. If you hold common shares through any of
our share purchase or savings plans, you will receive voting
instructions. Please sign and return those instructions promptly to
assure that your shares are represented at the annual meeting. If
your shares are held in the name of a bank, broker or other holder of record,
you must obtain a proxy, executed in your favor, to be able to vote at the
annual meeting. If no direction is given and the proxy is validly
executed, the shares represented by the proxy will be voted in favor of proposal
one and two. The persons authorized under the proxies will vote upon
any other business that may properly come before the annual meeting according to
their best judgment to the same extent as the person delivering the proxy would
be entitled to vote. We do not anticipate that any other matters will
be raised at the annual meeting.
Quorum
The
presence, in person or represented by proxy, of the holders of a majority
(41,962,731 shares) of the common shares entitled to vote at the annual meeting
is necessary to constitute a quorum at the annual meeting. However,
if a quorum is not present at the annual meeting, the shareholders present in
person or represented by proxy have the power to adjourn the annual meeting
until a quorum is present or represented. Pursuant to our amended and
restated bylaws, abstentions and broker “non-votes” are counted as present and
entitled to vote for purposes of determining a quorum at the annual
meeting. A broker “non-vote” occurs when a nominee holding common
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have discretionary voting power with respect to that item and
has not received instructions from the beneficial owner.
Required
Vote
The
affirmative vote of the holders of a majority (41,962,731 shares) of the common
shares present in person or represented by proxy is required to re-elect trust
managers. Any trust manager who is currently on the board shall
remain on the board, regardless of the number of votes he receives, unless he is
replaced by a nominee who receives the requisite vote to become a new trust
manager. All of the nominees currently serve as a trust
manager. Abstentions and broker non-votes are not counted for
purposes of the election of trust managers.
The
ratification of the appointment of Deloitte & Touche LLP requires the
affirmative vote of the holders of a majority (41,962,731 shares) of the common
shares represented in person or by proxy at the annual meeting and entitled to
vote thereon in order to be approved.
2
Cost
of Proxy Solicitation
The cost
of soliciting proxies will be borne by us. Proxies may be solicited
on our behalf by our trust managers, officers, employees or soliciting service
in person, by telephone, facsimile or by other electronic means. In
accordance with SEC regulations and the rules of the New York Stock Exchange
(NYSE), we will reimburse brokerage firms and other custodians, nominees and
fiduciaries for their expenses incurred in mailing proxies and proxy materials
and soliciting proxies from the beneficial owners of our common
shares.
PROPOSAL
ONE
ELECTION
OF TRUST MANAGERS
Pursuant
to the Texas Real Estate Investment Trust Act, our amended and restated
declaration of trust, and our amended and restated bylaws, our business,
property and affairs are managed under the direction of the board of trust
managers. At the annual meeting, nine trust managers will be elected
by the shareholders, each to serve until his successor has been duly elected and
qualified, or until the earliest of his death, resignation or retirement.
Regardless of the number of votes each nominee receives, pursuant to the Texas
Real Estate Investment Trust Act, each trust manager will continue to serve
unless another nominee receives the affirmative vote of the holders of 66 2/3%
of our outstanding common shares.
The
persons named in the enclosed proxy will vote your shares as you specify on the
enclosed proxy. If you return your properly executed proxy but fail
to specify how you want your shares voted, the shares will be voted in favor of
the nominees listed below. The board of trust managers has proposed
the following nominees for election as trust managers at the annual
meeting. Each of the nominees was nominated by the governance
committee and each nominee is currently a member of the board of trust managers.
The governance committee did not receive any nominations for trust manager from
any person.
Nominees
Stanford
Alexander>, Chairman of the Board of Trust Managers since
2001. Chief Executive Officer from 1993 to December
2000. President and Chief Executive Officer from 1962 to
1993. Trust manager since 1956 and our employee since
1955. Age: 79
3
Marc J.
Shapiro>, trust manager since 1985. Since 2003, Mr. Shapiro has
served as a consultant to J. P. Morgan Chase & Co. as a non-executive
Chairman of its Texas operations. Former Vice Chairman of J. P.
Morgan Chase & Co. from 1997 through 2003. He served as Chairman
and Chief Executive Officer of Chase Bank of Texas from January 1989 to
1997. He currently serves as a director of Kimberly-Clark Corporation
(compensation committee chairman), Burlington Northern Santa Fe Corporation
(audit committee member) and The Mexico Fund (audit committee member)
. Age: 60
Andrew M.
Alexander is the son of Stanford Alexander. Douglas W. Schnitzer is
the first cousin of Stephen A. Lasher.
The
governance committee will consider trust manager candidates nominated by
shareholders. Recommendations, including the nominee’s name and an
explanation of the nominee’s qualifications should be sent to M. Candace DuFour,
Senior Vice President and Secretary, at P.O. Box 924133, Houston, Texas
77292-4133. The procedure for nominating a person for election as a
trust manager is described under “Shareholder Proposals” on page
30.
The
board of trust managers unanimously recommends that you vote FOR the election of
trust managers as set forth in Proposal One.
4
Board
Meetings and Committees
During
2007, the board of trust managers held six meetings. No trust manager
attended less than 75% of the total number of board and committee meetings on
which the trust manager served that were held while the trust manager was a
member of the board or committee, as applicable. All of our trust
managers are strongly encouraged to attend our annual meeting of shareholders.
Seven of our trust managers attended our 2007 annual meeting of
shareholders. The board’s current standing committees are as
follows:
___________
Governance
Committee
The
governance committee which operates pursuant to a written charter, has the
responsibility to (1) oversee the nomination of individuals to the board,
including the identification of individuals qualified to become board members
and the recommendation of such nominees; (2) develop and recommend to the board
a set of governance principles; and (3) oversee matters of governance to insure
that the board is appropriately constituted and operated to meet its fiduciary
obligations, including advising the board on matters of board organization,
membership and function and committee structure and membership. The
committee also recommends trust manager compensation and
benefits. The governance committee will consider nominees made by
shareholders. Shareholders should send nominations to the company’s
Senior Vice President and Secretary, M. Candace DuFour. Any
shareholder nominations proposed for consideration by the governance committee
should include the nominee’s name and qualifications for board
membership. The governance committee
recommends to the board the slate of individuals to be presented for election as
trust managers. The governance committee shall establish criteria for the
selection of potential trust managers, taking into account the following desired
attributes: ethics, leadership, independence, interpersonal skills, financial
acumen, business experiences, industry knowledge, and diversity of
viewpoints. The same criterion is applied to candidates recommended
by any source. See “Shareholder Proposals” on page 30. The governance
committee met four times in 2007.
5
Audit
Committee
The audit
committee which acts pursuant to a written charter, assists the board in
fulfilling its responsibilities for general oversight of (1) our financial
reporting processes and the audit of our financial statements, including the
integrity of our financial statements; (2) our compliance with ethical policies
contained in our code of conduct and ethics; (3) legal and regulatory
requirements; (4) the independence, qualification and performance of our
independent registered public accounting firm; (5) the performance of our
internal audit function; and (6) risk assessment and risk
management. The committee has the responsibility for selecting our
independent registered public accounting firm and pre-approving audit and
non-audit services. Among other things, the audit committee prepares
the audit committee report for inclusion in the annual proxy statement; reviews
the audit committee charter and the audit committee’s performance; and reviews
our disclosure controls and procedures, information security policies and
corporate policies with respect to financial information and earnings
guidance. The audit committee also oversees investigations into
complaints concerning financial matters. The audit committee has the
authority to obtain advice and assistance from outside legal, accounting or
other advisors as the audit committee deems necessary to carry out its
duties. The audit committee met five times in 2007.
Management
Development and Compensation Committee
The
management development and compensation committee (1) discharges the board’s
responsibilities to establish the compensation of our executives; (2) produces
an annual report on executive compensation for inclusion in our annual proxy
statement; (3) provides general oversight for our compensation structure,
including our equity compensation plans and benefits programs; and (4) retains
and approves the terms of the retention of any compensation consultant or other
compensation experts. Other specific duties and responsibilities of
the committee include reviewing the leadership development process; reviewing
and approving objectives relative to executive officer compensation; approving
employment agreements for executive officers; approving and amending our
incentive compensation and share option programs (subject to shareholder
approval if required); and annually evaluating its performance and its written
charter. The committee held only two telephonic meetings during
2007 due to a policy change as described in the "Compensation Discussion
and Analysis-Overview of Compensation Program" on page 12.
Executive
Committee
The
executive committee has the authority to enter into transactions to acquire and
dispose of real property, execute certain contracts and agreements, including,
but not limited to, borrowing money and entering into financial derivative
contracts, leases (as landlord or tenant) and construction contracts valued from
$30 million up to $100 million. In February 2007, the board amended
the range from $30 million up to $100 million to $50 million up to $100
million. The committee was established by the board to approve these
significant transactions. We have a detailed process that is followed
for all of these transactions and the execution of unanimous consents for such
transactions is the final documentation of such process. The
executive committee did not meet in person during 2007, but conducted business
by the execution of four unanimous written consents during that
year.
Pricing
Committee
The
pricing committee is authorized to exercise all the powers of the board of trust
managers in connection with the offering, issuance and sale of our
securities. The pricing committee did not meet in person during 2007,
but conducted business by having one telephonic meeting during the
year.
Corporate
Governance
Independence of Trust Managers and
Committee Members. Our board has determined that each of the
following trust managers standing for re-election has no material relationship
with us (either directly or as a partner, shareholder or officer of an
organization that has a relationship with us) and is independent within the
meaning of our trust manager independence standards, which reflect exactly NYSE
Director Independence Standards, as
6
currently
in effect: Messrs. Crownover, Cruikshank, Lasher, Schnitzer, Shaper
and Shapiro. The board has determined that Messrs. S. Alexander and
A. Alexander are not independent trust managers within the meaning of the NYSE
Director Independence Standards. Mr. Dow is considered independent
under the NYSE Director Independence Standards, however due to the amount of
legal work that Mr. Dow personally performs for his firm on our account, the
board of trust managers has elected to not consider him an independent
director. Furthermore, the board has determined that each of the
members of each of the governance, audit and management development and
compensation committees has no material relationship with us (either directly as
a partner, shareholder or officer of an organization that has a relationship
with us) and is independent within the meaning established by the
NYSE.
Audit Committee Financial
Expert. The
board of trust managers has determined that Messrs. Cruikshank and Shaper meet
the definition of audit committee financial expert promulgated by the Securities
and Exchange Commission and are independent, as defined in the NYSE Listing
Standards.
Committee Charters and other
Governance Materials. Our board has adopted (1) a governance
committee charter, a management development and compensation committee charter
and an audit committee charter; (2) standards of independence for our trust
managers; (3) a code of conduct and ethics for all trust managers, officers and
employees; and (4) corporate governance guidelines. Our governance
committee charter, management development and compensation committee charter,
audit committee charter, corporate governance guidelines and code of conduct and
ethics are available on our web site at www.weingarten.com. These
materials are also available in print to any shareholder who requests them by
submitting a request to Richard Summers, Vice President and Director of Investor
Relations, 2600 Citadel Plaza Drive, Suite 300, Houston, Texas
77008.
Communications with the
Board. Individuals may communicate with the board by sending a
letter to:
M.
Candace DuFour
Senior
Vice President and Secretary to the Board of Trust Managers
2600
Citadel Plaza Drive, Suite 300
Houston,
Texas 77008
All trust
managers have access to this correspondence. Communications that are
intended specifically for non-management trust managers should be sent to the
street address noted above, to the attention of the chairman of the Governance
Committee. In accordance with instructions from the board, the
secretary to the board reviews all correspondence, organizes the communications
for review by the board, and posts communications to the full board or
individual trust managers as appropriate.
Executive
Sessions. Generally, executive sessions of non-employee trust
managers are held at the end of each board meeting. In accordance
with our Governance Policies, our independent trust managers will meet at least
once per year in executive session. The chairman of the governance
committee, currently Marc J. Shapiro, serves as chairman during the executive
session. During 2007, our non-employee trust managers met three times
in executive session.
7
TRUST
MANAGER COMPENSATION TABLE
The
following table provides compensation information for the one year period ended
December 31, 2007 for each non-officer member of our board of trust
managers.
Trust
Manager Compensation at Fiscal Year-End
__________________________
Compensation
Committee Interlocks and Insider Participation
During
fiscal 2007, three of our independent trust managers served on the management
development and compensation committee. The committee members for
2007 were Messrs. Cruikshank, Lasher and Shapiro. No member of the
management development and compensation committee has any interlocking
relationship with any other company that requires disclosure under this
heading.
Certain
Transactions
Mr. Dow
is a shareholder of Winstead P.C. (formerly Winstead, Secrest & Minick
P.C.), a law firm that had a relationship with Weingarten during the 2007 fiscal
year. Winstead P.C. performs a significant amount of work for us.
Payments made by us to Winstead P.C. for work performed constituted less than 2%
of the firm’s total revenue for 2007.
We review
all relationships and transactions in which we and our significant shareholders,
trust managers and executive officers or their respective immediate family
members are participants to determine whether such persons have a direct or
indirect material interest in a transaction. As required under SEC rules,
transactions that are determined to be directly or indirectly material to us or
a related party are disclosed. We also disclose transactions or
categories of transactions we consider in determining that a trust manager is
independent. In addition, our audit committee and/or governance
committee reviews and, if appropriate, approves or ratifies any related party
transaction that is required to be disclosed.
8
SHARE
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth certain information regarding the beneficial
ownership of our common shares as of February 4, 2008 by (1) each person known
by us to own beneficially more than 5% of our outstanding common shares, (2)
each current trust manager, (3) each named executive officer, and (4) all
current trust managers and executive officers as a group. The number
of shares beneficially owned by each entity, person, trust manager or executive
officer is determined under the rules of the SEC, and the information is not
necessarily indicative of beneficial ownership for any other
purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has the sole or shared voting power or investment
power and also any shares that the individual has a right to acquire as of April
4, 2008 (60 days after February 4, 2008) through the exercise of any share
option or other right. Unless otherwise indicated, each person has
sole voting and investment power (or shares such powers with his spouse) with
respect to the shares set forth in the following table. Unless
otherwise noted in a footnote, the address of each person listed below is c/o
Weingarten Realty Investors, 2600 Citadel Plaza Drive, Houston, Texas
77008.
Certain
of the shares listed below are deemed to be owned beneficially by more than one
shareholder under SEC rules.
___________
*Beneficial
ownership of less than 1% of the class is omitted.
9
We are
pleased to report that management, employees, trust managers and their extended
families own, in the aggregate, approximately 15.3% of our outstanding common
shares as of February 4, 2008, including any share options that will be
exercisable on or before April 4, 2008.
10
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 requires our trust managers and
executive officers, and persons who own more than 10% of a registered class of
our equity securities, to file reports of holdings and transactions in our
securities with the SEC and the NYSE. Executive officers, trust
managers and greater than 10% beneficial owners are required by applicable
regulations to furnish us with copies of all Section 16(a) forms they file with
the SEC.
Based
solely upon a review of the reports furnished to us with respect to fiscal 2007,
we believe that all SEC filing requirements applicable to our trust managers,
executive officers and 10% beneficial owners were satisfied, except Mr. Lasher,
who had one late filing.
EXECUTIVE
OFFICERS
No trust
manager or executive officer was selected as a result of any arrangement or
understanding between the trust manager or executive officer and any other
person. All executive officers are elected annually by, and serve at
the discretion of, the board of trust managers.
Our
executive officers are as follows:
11
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
of Compensation Program
The
management development and compensation committee (for purposes of this
analysis, the “Committee”) of the board has responsibility for establishing,
implementing and continually monitoring adherence with our compensation
philosophy. The Committee ensures that the total compensation paid to
our executive leadership team is fair, reasonable and
competitive. Generally, the types of compensation and benefits
provided to members of the executive leadership team, including the named
executive officers, are similar to those provided to other executive officers at
other Real Estate Investment Trusts (“REITs”). Throughout this proxy
statement, the individuals who served as President and Chief Executive Officer,
Chairman, Vice Chairman, Executive Vice President and Chief Financial Officer
and Executive Vice President/Asset Management during fiscal 2007, are referred
to as the “named executive officers.” When we use the term "our top three
executives", we mean our President and Chief Executive Officer, our Chairman and
our Vice Chairman. It should be noted that in 2007, we changed our policy
of meeting in December to award cash and equity incentive compensation for
performance in such year. In February 2008, we met to determine awards
based on 2007 performance. As a result, the Summary Compensation Table on
page 18 does not reflect equity incentive awards. They are, however,
reflected in this discussion.
Compensation
Objectives and Philosophy
The
Committee believes that the most effective executive compensation program is one
that is designed to reward the achievement of specific annual, long-term and
strategic goals, and one that is designed to align executives’ interests with
those of the shareholders by rewarding performance above established goals, with
the ultimate objective of improving shareholder value. The Committee
evaluates both performance and compensation to ensure that we maintain our
ability to attract and retain superior employees in key positions and that
compensation provided to key employees remains competitive relative to the
compensation paid to similarly situated executives of our peer
companies. To that end, the Committee believes executive compensation
packages provided by us to our executives, including the named executive
officers, should include both cash and share-based compensation that reward
performance as measured against established goals.
Role
of Executive Officers in Compensation Decisions
The
Committee makes all compensation decisions for our top three executive officers.
Our Chief Executive Officer annually reviews the performance of our Chief
Financial Officer and our Executive Vice President/Asset
Management. The conclusions reached and recommendations based on
these reviews, including with respect to salary adjustments, annual bonus and
equity award amounts, are presented to the Committee. The Committee
can exercise its discretion in modifying any recommended adjustment or
award. Mr. A. Alexander also reviews the performance of our Chairman
and our Vice Chairman with the Committee. The Committee establishes,
in conjunction with Mr. A. Alexander, salary adjustments, annual bonus and
equity award amounts for these two executive officers. The Committee reviews the
performance of our Chief Executive Officer.
Peer
Groups for Executive Compensation Purposes
In July
2007, the Committee retained FPL Associates, an outside executive compensation
consulting firm, to assist it in considering compensation for its top three
executive officers. The Company has not engaged FPL to perform any
other consulting services. In November 2007, FPL provided the
Committee with relevant market data to consider when making compensation
decisions for our top three executive officers.
12
For
executive compensation purposes, we compare our compensation programs to the
compensation programs of our retail REIT peer group and our size-based REIT peer
group. As of November 19, 2007, the date of FPL’s report to the
Committee, the following REITs comprised our retail REIT peer
group. The information provided from the various REITs was based on
2006 compensation data.
The
retail REIT peer group had total capitalization ranging from approximately $1.4
billion to $16.0 billion, with a median of $7.2 billion. Our total
capitalization at that time was $7.1 billion.
As of
September 30, 2007, the following REITs comprised our size-based REIT peer
group:
The
size-based REIT peer group had total capitalization ranging from $4.0 billion to
$12.0 billion, with a median of $6.8 billion. Our total
capitalization at that time was $7.1 billion.
The two
most prevalent performance metrics applied to public real estate companies are
total shareholder return (TSR) and funds from operations (FFO). We
compared our TSR and FFO per share growth to those of the REITs in both of the
peer groups. The median TSR for our REIT peer group and size-based
REIT peer group (from January 1, 2007 to September 30, 2007) was 2.24% and
-10.93%, respectively. Our TSR for the same period
was -7.02%. The median FFO per share growth
for our retail peer group and size-based REIT peer group was 7.09% and 7.74%
(estimates for the full year 2007), respectively. Our FFO per share
growth was 8.1%.
Total
Compensation
In
setting compensation for our executive officers, including our Chief Executive
Officer, the Committee focuses on total annual compensation. For this
purpose, total annual compensation consists of base salary, cash bonus at target
levels of performance and long-term equity incentive compensation. In
setting the total annual compensation of our executive officers, the Committee
evaluates both market data provided by the compensation consultants and
information on the performance of each executive officer for the prior
year. In order to remain competitive in the marketplace for executive
talent, the target levels for the total annual compensation of our executive
officers, including our Chief Executive Officer, are set above the median of the
peer group comparisons described above. In order to reinforce a “pay
for performance” culture, targets for individual executive officers may be set
above or below the median depending on the individual’s performance in prior
years. The Committee believes that setting target levels above the
median for our peer groups, permitting adjustments to targets based on past
performance, and providing incentive compensation if they perform well, is
consistent with the objectives of our compensation policies described
above. In particular, the Committee believes that this approach
enables us to
13
attract and
retain skilled and talented executives to guide and lead our businesses and
supports a “pay for performance” culture.
Annual Cash Compensation In order
to remain competitive with REITs in our peer groups, we pay our named executive
officers commensurate with their experience and
responsibilities. Cash compensation is divided between base salary
and annual bonus.
Annual
Bonus>. The Committee’s practice is to provide a significant
portion of each named executive officer’s compensation in the form of an annual
cash bonus. These annual bonuses are, for our top three executives,
based 100% upon company performance objectives. This practice is
consistent with our compensation objective of supporting a performance-based
environment. Each year, the Committee sets for the named executive
officers, the target bonus that may be awarded to those officers if the goals
are achieved, which is based on a percentage of base salary. For
2007, the Committee established the following corporate level
goals:
For our
top three executives, 2007 performance was measured against our
company-wide objectives. For all other named executive officers, 2007
performance was measured based 50% on company-wide performance and 50% on the
achievement of goals for which the executive was responsible. The
Committee makes an annual determination as to the appropriate weighting between
company-wide and executive specific goals based on its assessment of the
appropriate balance.
In 2008,
the Committee approved annual bonus payments for 2007 performance to the named
executive officers of 97% of the corporate level goals. Based on this
bonus award, our Chief Executive Officer received total bonus cash compensation
of $509,900, bringing his total cash compensation to $1,209,900. The
median total cash compensation for a CEO of our retail REIT peer group was
$1,275,000 and $1,442,305 for a CEO of our size-based REIT peer
group. Based on the assessment of the Chief Executive Officer of the
performance of our Executive
14
Vice
President and Chief Financial Officer and Executive Vice President/Asset
Management against their executive specific personal goals, the Committee
approved payments to such officers at 115% of the individual
targets. The annual bonuses paid to each of the named executive
officers are set forth in the Summary Compensation Table. For the
purposes of disclosure in the Summary Compensation Table on page 18, the
annual bonus is classified as non-equity incentive compensation because the
payments are intended as an incentive for performance to occur during the year,
in which the described performance targets that must be met for the bonus to be
paid are communicated to the executive in advance and the outcome is
substantially uncertain when the target is set.
Restricted Stock
Awards. The Committee determines the number of restricted
shares and the period and conditions for vesting. Based on 2007
performance, in 2008, the Committee awarded an aggregate of 49,843 restricted
stock awards to our named executive officers, including 21,726 shares to our
Chief Executive Officer. Restricted stock awards vest at a rate of
20% per year, beginning on the first anniversary of the stock
grant. For purposes of the Summary Compensation Table, restricted
stock awards are classified as stock awards. Information regarding
restricted shares granted to our named executive officers in 2007 can be found
below under Grants of Plan-Based Awards Table on page 19.
The named
executive officers also receive dividends on restricted stock awards held by
them at the same rate and on the same dates as dividends we pay to our
shareholders. Because we factor the value of the right to receive
dividends into the grant date fair value of the restricted stock awards, the
dividends received by our named executive officers are not included in the
Summary Compensation Table on page 18.
Share
Options. The Committee administers our equity
plans. Our policies and option plans require options to be granted at
an exercise price calculated as the average of the high and low stock price for
the third business day after our release of earnings that next follows the
meeting of the Committee. Based on 2007 performance, in 2008, the
Committee awarded share options for an aggregate of 498,743 common shares to our
named executive officers, including 217,391 common shares awarded to our Chief
Executive Officer. Share option awards vest at a rate of 20% per
year, beginning on the first anniversary of the option
grant. Information regarding share options granted to our named
executive officers in 2007 can be found below under Grants of Plan-Based Awards
Table on page 19.
15
plans, and the
present value of the accumulated benefits of our named executive officers, see
Pension Benefits Table on page 22.
The
Committee believes that these pension plans are important parts of our
compensation program. These plans assist us in retaining our senior
executives. Additionally, these plans encourage retention because an
executive’s retirement benefits increase each year his employment
continues.
The named
executive officers receive vehicle allowances and related reimbursements and
reimbursement of certain medical expenses. Messrs. Debrovner, Richter
and Hendrix are also provided tax planning services. We also maintain
other executive benefits that we consider necessary in order to offer fully
competitive opportunities to our executive officers. These include
401(k) retirement savings plans and employee stock purchase
programs. Executive officers are also eligible to participate in all
of our employee benefit plans, such as medical, dental, group life, disability
and accidental death and dismemberment insurance, in each case on the same basis
as other employees.
We have
entered into severance and change in control agreements with two of our named
executive officers, Messrs. Hendrix and Richter, which provide severance
payments under specified conditions following a change in
control. These agreements are described below under Severance and
Change in Control Arrangements on page 25. We believe these
agreements help us to retain executives who are essential to our long-term
success.
Tax
and Accounting Implications
Accounting for
Stock-Based Compensation>. Beginning on January 1, 2006, we
began accounting for share-based payments to employees in accordance with the
requirements of FASB Statement 123(R).
16
COMPENSATION
COMMITTEE REPORT
The
Committee has reviewed and discussed the Compensation Discussion and Analysis
required by Item 402(b) of Regulation S-K with management and, based on such
review and discussions, the Committee recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy Statement and
incorporated by reference in our Annual Report on Form 10-K for the year ended
December 31, 1007.
Respectfully
Submitted,
Management
Development and Compensation Committee
Robert J.
Cruikshank, 2007 Chairman
Stephen
A. Lasher
Marc J.
Shapiro
The
following tables provide information about compensation for our senior executive
team which includes the required disclosures for our named executive
officers.
17
SUMMARY
COMPENSATION TABLE
The
following table includes information concerning compensation for the three-year
period ended December 31, 2007.
Summary
Compensation
________________________
18
The
change in pension value and non-qualified deferred compensation earnings column
reflects the aggregate increase in actuarial present value of the named
executive officer’s accumulated benefit under all defined benefit plans
including supplemental plans and any above-market or preferential earnings on
non-qualified deferred compensation. The aggregate increase in
actuarial present value of the defined benefit plans is calculated based on the
pension plan measurement dates used in the company’s audited financial
statements. The aggregate increase in pension value for each named
executive is due to actuarial changes in years of service, compensation and plan
changes; and interest earned on the account balance. For a more
detailed explanation of our pension plans, and the present value of the
accumulated benefits of our named executive officers, see Pension Benefits Table
on page 22.
The named
executive officers’ non-qualified deferred compensation balances are maintained
in investment accounts similar to those available to our associates through the
401(k) plan, and therefore do not earn above-market or preferential
rates.
GRANTS
OF PLAN-BASED AWARDS TABLE
The
following table includes information concerning grants of plan-based awards for
the one year period ended December 31, 2007.
Grants
of Plan-Based Awards at Fiscal Year-End
________________________
The
Grants of Plan-Based Awards table sets forth information concerning grants of
non-equity incentive plan awards, equity incentive plan awards and all other
stock and option awards during 2007. Estimated payouts under
non-equity incentive plan awards include the target payout of the annual
bonus. The payouts were established by the board for the named
executive officers on February 22, 2007. When the targets were
established and communicated to the named executive officers, no maximum payout
was specified; however, amounts above the target payout may be paid if
performance goals are exceeded. Specific criteria used to determine
the target was set forth above in the “Compensation Discussion and Analysis –
Annual Bonus” on page 14. During 2007, the distribution of annual
bonuses was changed whereby annual bonuses would be paid in the year after the
bonus was earned. Therefore, 2007 annual bonuses paid in February 2008 are
included in the Summary Compensation Table on page 18.
No stock
or option awards were granted during 2007. Stock and option awards
granted on February 29, 2008 to the named executives for 2007 performance have
been disclosed in the “Compensation Discussion and Analysis – Long-Term Equity
Incentive Compensation” on page 15 and are not included in the above
table. Specific criteria used to determine performance targets and
stock and option awards is set forth above in the
19
“Compensation
Discussion and Analysis – Long-Term Equity Incentive Compensation” on page
15. The plans governing option awards provide that the option price
per share shall not be less than 100% of the market value per common share at
the grant date. The term for any option is no more than 10 years from
the date of grant. Option awards become exercisable after one year in
five equal annual installments of 20%. Stock awards are based on the
average of the high and low stock price for the third business day after
our release of earnings that next follows the meeting of the management
development and compensation committee. Stock awards vest after one
year in five equal annual installments of 20%.
20
OUTSTANDING
EQUITY AWARDS TABLE
The
following table sets forth certain information with respect to the value of all
unexercised options previously awarded to the named executive officers as of
December 31, 2007.
Outstanding
Equity Awards at Fiscal Year-End
_______________________
21
OPTION
EXERCISES AND STOCK VESTED TABLE
The
following table sets forth certain information with respect to the options
exercised by the named executive officers during the year ended December 31,
2007.
Option
Exercises and Stock Vested at Fiscal Year-End
PENSION
BENEFITS TABLE
The
following table sets forth information with respect to retirement and deferred
compensation benefits of named executive officers.
Pension
Benefits at Fiscal Year-End
22
The
Weingarten Realty Retirement Plan is a non-contributory defined benefit pension
plan providing annual retirement benefits to eligible grandfathered employees in
specified compensation and years of service categories, assuming retirement
occurs at age 65 and that benefits are payable only during the employee’s
lifetime. Benefits are not actuarially reduced where survivorship
benefits are provided unless the participant’s spouse is more than five years
younger than the plan participant. In this case, the benefit payable is
reduced to cover the costs of providing survivor benefits to the spouse.
The reduction is based on actuarial tables which consider, among other things,
the participant’s age and the age of their spouse.
The
non-contributory defined benefit pension plan converted to a cash balance
retirement plan on April 1, 2002. A grandfathered participant will remain
covered by the provisions of the plan prior to the conversion to the cash
balance plan. A grandfathered participant is any participant born
prior to January 1, 1952, who was hired prior to January 1, 1997, and was an
active employee on April 1, 2002. The retirement plan pays benefits
to grandfathered participants in the event of death, disability, retirement or
other termination of employment after the employee meets certain vesting
requirements (all grandfathered participants are 100% vested). The
amount of the monthly retirement benefit payable beginning at age 65, the normal
retirement age, is equal to (i) 1.5% of average monthly compensation during five
consecutive years, within the last ten years, which would yield the highest
average monthly compensation multiplied by years of service rendered after age
21, minus (ii) 1.5% of the monthly social security benefits in effect on the
date of retirement multiplied by years of service rendered after age 21 and
after July 1, 1976. Compensation for purposes of this plan is defined as wages
reported for federal income tax purposes and includes contributions made under
salary deferral arrangements.
The Qualified Employee
Retirement Plan is a non-contributory cash balance defined benefit retirement
plan that covers all employees with no age or service minimum
requirement. The cash balance plan pays benefits in the event of
death (if married), retirement or termination of employment after the
participant meets certain vesting requirements (generally 100% vested after five
years of service). The amount of the monthly retirement
benefit payable beginning at age 65, the normal retirement age, is equal to the
greater of (1) the monthly benefit that is actuarial equivalent of the cash
balance account, or (2) the accrued monthly benefit under the prior plan as of
January 1, 2002. The opening balance of a cash balance
participant, who was an active participant in the plan on January 2, 2002 and
was an active employee on April 1, 2002, is the actuarial equivalent present
value of his frozen accrued benefit on January 1, 2002. Annual
additions to each participant’s account include a service credit ranging from
3-5% of compensation, depending on years of service and an interest credits
based on the ten-year US Treasury Bill rate.
The plan
also provides for early retirement benefits upon attaining the age of 55 and
completion of at least 15 years of service. Early retirement benefit
payments may begin on the first day of the month coinciding with or following
the month employment ceases. However, the payments must begin no later
than the normal retirement age. The early retirement benefit
calculation is consistent with the above normal retirement benefit calculation
with the exception that the benefit is adjusted by an early commencement
factor. The accrued benefit will be reduced by 1/15th for each of the
first 60 months, by 1/30th for each of the next 60 months, and by actuarial
factors (assumed interest and mortality factors) for each additional month by
which the annuity starting date precedes the normal retirement age.
The
Non-Qualified Supplemental Executive Retirement Plan was established on
September 1, 2002 as a separate and independent non-qualified supplemental
retirement plan for executive officers. This unfunded plan provides
benefits in excess of the statutory limits of our non-contributory retirement
plans.
The
assumptions used to develop the actuarial present value of the accumulated
benefit obligation to each named executive officer were determined in accordance
with SFAS No. 87 ("SFAS 87"), “Employers’ Accounting for Pensions” and SFAS No. 158 (“SFAS 158”),
“Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans – An Amendment of FASB Statements No. 87, 88, 106, and 132R” as of
the pension plan measurement date utilized in our audited financial statements
for the year ended December 31, 2007. See Note 19 to
the consolidated financial statements included in our Annual Report on Form 10-K
for the year ended December
23
31, 2007,
for a discussion of the relevant assumptions used in calculating the accumulated
benefit obligation pursuant to SFAS 87 and SFAS 158.
Non-Qualified
Deferred Compensation
We also have a deferred compensation
plan for eligible employees allowing them to defer portions of their current
cash or shared-based compensation. Employees may elect to defer up to
90% of base salary and annual bonus compensation, and up to 100% of restricted
stock awards. Amounts deferred are reported as compensation expense
in the year service is rendered and are deposited in a grantor
trust. Cash deferrals are invested based on the employee’s investment
selections from a mix of assets similar to the non-contributory cash balance
retirement plan. Share-based deferrals cannot be diversified and distributions
from this plan are made in the same form as the original deferral.
There are
no above market or preferential earnings associated with the deferred
compensation plan.
NON-QUALIFIED
DEFERRED COMPENSATION TABLE
The
following table sets forth information with respect to non-qualified deferred
compensation benefits of the named executive officers.
Non-Qualified
Deferred Compensation at Fiscal Year-End
____________________________
24
Severance
and Change In Control Arrangements
Messrs.
S. Alexander, A. Alexander and M. Debrovner have not entered into change in
control arrangements with us. We have,
however, entered into a severance and change in control agreement with each of
Messrs. Hendrix and Richter which becomes operative only upon a change in
control. All other Vice Presidents have also entered into the same
change in control agreement with us. A change in control is deemed to
occur upon any one of five events: (1) we merge, consolidate or reorganize into
or with another corporation or legal entity and we are not the surviving entity;
(2) we sell or otherwise transfer 50% or more of our assets to one entity or in
a series of related transactions; (3) any person or group acquires more than 25%
of our then outstanding voting shares; (4) we file a report or proxy statement
with the SEC disclosing that a change in control has occurred or will occur and
such transaction is consummated; or (5) if, during any 12-month period, trust
managers at the beginning of the 12-month period cease to constitute a majority
of the trust managers.
If Mr.
Hendrix, Mr. Richter or any other Vice President is terminated involuntarily
without cause, or terminates his employment for a good reason within one year
following a change in control, he will be entitled to a lump sum severance
benefit in an amount equal to (1) 2.99 times his annualized base salary as of
the first date constituting a change in control or, if greater, (2) 2.99 times
his highest base salary in the five fiscal years preceding the first event
constituting a change in control, plus, in either case, 2.99 times his targeted
bonus for the fiscal year in which the first event constituting a change in
control occurs. In addition, Mr. Hendrix, Mr. Richter or any other
Vice President, as applicable, is entitled to receive an additional payment or
payments to compensate him for any excise tax imposed by Section 4999 of the
Code or any similar state or local taxes or any penalties or interest with
respect to the tax. Mr. Hendrix and Mr. Richter will also receive one
year of employee benefits coverage substantially similar to what he received or
was entitled to receive prior to the change in control.
Each executive has the right to
terminate his employment for good reason upon the occurrence of the following
events:
(a) failure
to be elected or reelected or otherwise maintained in the office or the
position, or a substantially equivalent office or position, of or with us which
the executive held immediately prior to a change in control, or the removal of
executive as our trust manager (or any successor thereto) if the executive had
been a trust manager immediately prior to the change in control;
(b) a
significant change in the nature or scope of the authorities, powers, functions,
responsibilities or duties attached to the position which the executive held
immediately prior to the change in control, a reduction in the aggregate of the
executive's base pay and incentive pay, or the termination or denial of the
executive's rights to employee benefits or a reduction in the scope or value
thereof, except for any such termination or denial, or reduction in the scope of
value, of any employee benefits applicable generally to all recipients of or
participants in such employee benefits;
(c) the
determination by the executive that a change in circumstances has occurred
following a change in control, including without limitation, a change in the
scope of the business or other activities for which the executive was
responsible immediately prior to the change in control, which has rendered the
executive substantially unable to carry out, has substantially hindered the
executive's performance of, or has caused the executive to suffer a substantial
reduction in, any of the authorities, powers, functions, responsibilities, or
duties attached to the position held by the executive immediately prior to the
change in control, which situation is not remedied within five calendar days
after written notice to us from the executive of such
determination;
(d) the
liquidation, dissolution, merger, consolidation or reorganization of us or
transfer of all or substantially all of its business and/or assets, unless the
successor or successors to which all or substantially all of our business and/or
assets have been transferred assumes all of our duties and
obligations;
25
(e) we
relocate our principal executive offices, or require the executive’s principal
location of work changed, to any location which is in excess of 25 miles from
the location thereof immediately prior to the change in control, or require the
executive to travel away from the executive's office in the course of
discharging the executive's responsibilities or duties hereunder at least 20%
more (in terms of aggregate days in any calendar year or in any calendar
quarter when annualized for purposes of comparison to any prior year) than was
required of the executive in any of the three full years immediately prior to
the change in control without, in either case, the executive's prior written
consent; and/or
(f) any
material breach of the change in control agreement by us or any successor
thereto.
Under our equity incentive plan, in the
event of death or following a change in control, all outstanding stock and
option awards become fully vested. However in the event of disability or
retirement, the unvested portion of outstanding stock awards shall continue
uninterrupted to vest as if the employee remained in our employ, provided that
(A) if the employee dies following termination of employment but prior to the
full vesting of the outstanding stock awards hereunder then those awards, to the
extent not already vested, shall be vested in full as of the date of death, and
(B) if the employee accepts employment with a competitor of ours, as determined
by the Compensation Committee pursuant to our then existing non-competition
policies, the employee shall forfeit those awards which had not already vested
on the date the employee accepted employment with such competitor.
Termination of the employee's employment with us for any other reason shall
result in forfeiture of the outstanding awards on the date of termination to the
extent not already vested. If a death or change in control event occurred as of
December 31, 2007, compensation based on the closing share price of $31.44 in
the following amounts would have been due for Messrs. S. Alexander, A. Alexander
and M. Debrovner: $522,125, $749,416 and $366,914, respectively. For Messrs.
Hendrix and Richter, please see the Severance and Change in Control Compensation
Table below on page 27 for distributable amounts.
As part
of “All Other Compensation,” we are required to report any payments that were
made to named executives due to a change in control and any amounts accrued by
us for the benefit of the named executives relating to a change in
control. There have been no payments, nor have there been any amounts
accrued for the years presented in Summary of Compensation Table on page
18.
26
SEVERANCE
AND CHANGE IN CONTROL COMPENSATION TABLE
The following table quantifies
compensation that would become payable under severance and change in control
agreements and other arrangements if the named executive’s employment had
terminated on December 31, 2007, based on our closing stock price on that date,
where applicable. Due to the factors that affect the amount of any
benefits provided upon the events discussed below, actual amounts paid or
distributed may be different.
Severance
and Change in Control Compensation
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