Proxy Advisory Firm Glass Lewis Recommends Ventas Shareholders Vote “FOR ALL” of Ventas’s Highly Qualified Directors
Recommends that Shareholders Support the Company’s “Say on Pay” Proposal
Shareholders Urged to Vote “FOR ALL” of
Both leading proxy advisory firms, Glass Lewis and
In commenting on Ventas’s highly qualified Board, multiyear refreshment process and its determination that support for Land & Buildings is not warranted, Glass Lewis noted1:
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“When comparing the experience and qualifications of the two opposing director nominees, we believe
Mr. Shelton's executive and operational experience in the healthcare sector – including at hospitals and medical office buildings, which comprise a large portion of Ventas' portfolio – remains a critical asset for Ventas as it emerges from the pandemic and navigates ongoing challenges in the operational and macro environment. Therefore, we do not consider it to be in the best interests of Ventas shareholders to electMr. Litt at the cost of displacingMr. Shelton from the board.”
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“Since 2019, the board has appointed four new directors, including
Mr. Embler this year, and since 2018, two longer-tenured directors have retired, includingMr. Gellert this year. We note the Company's refreshment process has also resulted in enhanced diversity of directors not only in terms of race and gender but also thought and perspective.”
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“The board's appointment of
Mr. Embler , who has significant experience as an institutional investor, including in the REIT space, and who has served on several public company boards, including a REIT, should help to ensure that improving investor relations is a top priority in the boardroom. While L&B protestsMr. Embler's appointment as a defensive move to blockMr. Litt's candidacy, in our view,Mr. Embler is objectively the better candidate for the Ventas board at this time, given the Company's circumstances and the board's needs and stated criteria for new directors.”
- “The Ventas board has not been sitting on its hands and, in our view, appears to be taking appropriate action to address identified concerns. In addition to the board refreshment that began in 2018, Ventas appointed new leadership in its senior housing business at the start of 2020, just before the pandemic took hold. This led to strategic changes such as diversifying the operators that Ventas partners with to run its senior housing properties.”
In commenting on Ventas’s superior returns, forward-thinking capital allocation decisions and high-quality diversified portfolio of real estate, Glass Lewis noted:
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“We note Ventas' current year-to-date TSR figure, now 14 trading days later, stands at 19.5%, but that's still best among the index. Likely more encouraging for Ventas shareholders, we note the Company's trailing 1-year TSR of 15% is significantly better than the average negative return of -5% among the other NAREIT Health Care Index constituents. Further, Ventas has delivered a TSR of 97% over the last two years, since
April 14, 2020 , which was in the midst of the COVID-19 crisis and market volatility, exceeding all peers including Welltower's 94% over that period, which reflects the post-pandemic recovery in senior housing currently underway. Lastly, we would also note Ventas' trailing 3-year TSR has been marginally better than the peer average.”
- “In our view, L&B's stated concerns regarding stale leadership, capital allocation missteps, and senior housing business strategy and performance do not resonate. As the Company points out, L&B's statement that Ventas owns a superior and better positioned portfolio of assets would seem to directly contradict L&B's assertion that Ventas has deployed capital poorly.”
- “On the other hand, however, we believe the Dissident has failed to present compelling evidence that the Ventas board has overseen poor capital allocation decisions or that the Company's SHOP performance or actual FFO per share growth has been materially worse than Welltower in recent years. To the contrary, as discussed above, Ventas appears to have a superior, well-positioned portfolio as a result of forward-thinking capital allocation decisions, adjusted its SHOP operator strategy well before the Dissident's campaign and has generated broadly similar (if not better) performance as Welltower before, during and after the pandemic.”
In commenting on its recommendation that shareholders vote in favor of the Company’s executive compensation program and the changes the Board has made in response to shareholder feedback, Glass Lewis noted:
- “We note, however, that NEO retention awards were granted prior to the annual meeting in 2021, and following the meeting and shareholder feedback, the Company implemented a series of compensation quantum reductions for fiscal 2021 and 2022, including a reduction in 2022 target executive compensation, which we view as positive steps.”
- “This positive trajectory is reinforced in certain changes to incentives for 2022, namely: a return to a more formulaic short-term incentive plan, ESG metrics for short and long-term incentives (as initiated in fiscal 2021), and a heavier emphasis on TSR metrics under the long-term incentive plan, which may help re-align the executive and shareholder experience.”
Commenting on the Glass Lewis report, Ventas issued the following statement:
Ventas is pleased that the two leading proxy advisory firms have recommended that shareholders support the Company’s 11 director nominees, and that Glass Lewis recommends shareholders support the Company’s executive compensation program. Ventas appreciates the thoughtful feedback of its shareholders and believes it is taking the right steps to extend its track record of outperformance. With the strong oversight of its Board, Ventas has prudently managed through the challenges of the COVID-19 pandemic and driven solid growth and shareholder returns, while ensuring the safety of its operators and employees. The Company believes it is well-positioned to capture the upside of the ongoing COVID recovery in the senior housing space to deliver further value creation.
Ventas shareholders are reminded that their vote is extremely important, no matter how many or how few shares they own. The Company advises all shareholders to simply discard any Blue proxy card received from Land & Buildings. Instead, to follow the Board’s recommendation, shareholders should use the WHITE proxy card to vote “FOR ALL” of the Company’s highly qualified directors and vote “FOR” the approval, on an advisory basis, of the Company’s executive compensation program.
If you have questions about how to vote your shares or need additional copies of the proxy materials, please call the firm assisting us with the solicitation of proxies:
INNISFREE M&A INCORPORATED
Shareholders may call toll free: (877) 750-9496
Banks & Brokers may call collect: (212) 750-5833 |
About Ventas
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1 Permission to use quotations neither sought nor obtained
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