BLUEROCK RESIDENTIAL GROWTH REIT, INC. ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.
Payment of Annual Incentive Bonus Awards for Fiscal Year 2020
The information set forth under Item 5.02 of this Current Report on Form 8-K is incorporated herein by reference.
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
(f) Determination and Payment of Annual Incentive Bonus Awards for Fiscal Year 2020
As described in the Annual Report on Form 10-K filed with theSecurities and Exchange Commission (the "SEC") onFebruary 23, 2021 (the "Form 10-K") byBluerock Residential Growth REIT, Inc. (the "Company," "we," "us," or "our"), pursuant to the respective employment or services agreement of each of the Company's executive officers (collectively, the "Executive Agreements"), each such executive officer is entitled to payment of an annual incentive bonus for the fiscal year endedDecember 31, 2020 (each, a "2020 Annual Bonus," and collectively, the "2020 Annual Bonuses"). As further described in the Form 10-K, the Compensation Committee uses the following criteria in determining the amount of the 2020 Annual Bonus for which each executive officer is eligible: (a) 75% is based upon the Company's achievement, during the fiscal year endedDecember 31, 2020 , of certain objective Company performance criteria and targets; and (b) the remaining 25% is based upon the Compensation Committee's subjective evaluation of the performance of each such executive officer during such time period. As also described in the Form 10-K, inDecember 2019 , each of the Company's executive officers, other thanChristopher J. Vohs ("Mr. Vohs") andMichael DiFranco ("Mr. DiFranco"), executed a Fourth Side Letter to their Executive Agreement to reflect their prospective election to receive any 2020 Annual Bonus in the form of long-term incentive plan units ("LTIP Units") of the Company's operating partnership,Bluerock Residential Holdings, L.P. (the "Operating Partnership"), rather than in cash. (See "Compensation Discussion and Analysis-2020 Compensation Decisions-2020 Annual Cash Bonuses" on page 103
of the Form 10-K). OnMarch 25, 2021 , the Compensation Committee approved payment of 2020 Annual Bonuses, based on the evaluation of the previously-established objective criteria and targets along with the subjective evaluation, to each of the Company's executive officers in amounts equal to (A) 137.4% of the annual incentive bonus target amount as previously established by the Compensation Committee for each of the following executive officers of the Company: (i)R. Ramin Kamfar ("Mr. Kamfar"), (ii)Ryan S. MacDonald ("Mr. MacDonald"), (iii)Jordan B. Ruddy ("Mr. Ruddy"), and (iv)Mr. DiFranco ; (B) 124.9% of the annual incentive bonus target amount as previously established by theCompensation Committee for Mr . Vohs andMichael L. Konig ("Mr. Konig"), through his wholly-owned law firm,Konig & Associates, LLC , aNew Jersey limited liability company ("K&A"); and (C) 118.65% of the annual incentive bonus target amount as previously established by theCompensation Committee for James G. Babb , III ("Mr. Babb"). All references toMr. Konig herein refer toMr. Konig acting through K&A. OnMarch 25, 2021 (the "2020 Annual Bonus LTIP Date of Grant"), the Company granted 2020 Annual Bonuses, in each case, as a grant of equity incentive compensation (i) to each of Messrs. Kamfar, Babb, Ruddy and MacDonald under the Fourth Amended and Restated 2014 Equity Incentive Plan for Individuals (the "Individuals Plan"), and (ii) toMr. Konig under the Company's Fourth Amended and Restated 2014 Equity Incentive Plan for Entities (the "Entities Plan," and together with the Individuals Plan, the "Plans"), in the form of LTIP Units, rather than in cash, in the following amounts: 48,939 LTIP Units toMr. Kamfar ; 34,339 LTIP Units toMr. Babb ; 36,705 LTIP Units toMr. Ruddy ; 39,763 LTIP Units toMr. MacDonald ; and 33,366 LTIP Units toMr. Konig . The LTIP Units issued in payment of the 2020 Annual Bonus (i) toMr. Kamfar will vest and become nonforfeitable on the first anniversary of the 2020 Annual Bonus LTIP Date of Grant, and (ii) to each of Messrs. Babb, Ruddy, MacDonald and Konig were fully-vested and nonforfeitable on the 2020 Annual Bonus LTIP Date of Grant, in each case subject to certain clawback and termination provisions. Such grant toMr. Kamfar was evidenced by an LTIP Unit Vesting Agreement, and each such grant to each of Messrs. Babb, Ruddy, MacDonald and Konig was evidenced by an LTIP Unit Award Agreement. By mutual agreement of the Company and each of Messrs. Vohs and DiFranco, the 2020 Annual Bonuses payable to each of Messrs. Vohs and DiFranco will be paid on or beforeApril 15, 2021 , in each case in cash. The LTIP Units granted as 2020 Annual Bonuses to each of Messrs. Kamfar, Babb, Ruddy, MacDonald and Konig were issued in reliance upon exemptions from registration provided by Section 4(a)(2) of the Securities Act of 1933 and Regulation D thereunder for transactions not involving any public offering. No general solicitation or advertising occurred in connection with the issuance and sale of such securities. Such LTIP Units may convert to units of limited partnership interest in theOperating Partnership ("OP Units") upon reaching capital account equivalency with the OP Units held by the Company, and may then be redeemed for cash or, at the option of the Company and after a one year holding period (including any period during which the LTIP Units were held), settled in shares of our Class A Common Stock on a one-for-one basis. From the date of grant, holders of such LTIP Units will be entitled to receive "distribution equivalents" at the time distributions are paid to the holders of the Company's Class A Common Stock.
All other compensation paid or earned by each of the Company's named executive officers for the fiscal year endedDecember 31, 2020 was previously reported by the Company in the Summary Compensation Table beginning on page 110 of the Form 10-K. As of the filing of the Form 10-K, the 2020 Annual Bonuses had not been determined, and thus were not included in the Summary Compensation Table. In accordance with Item 5.02(f) of Form 8-K, the Company is providing a revised Summary Compensation Table, which includes the 2020 Annual Bonuses paid to each of our named executive officers and revised total compensation figures for
2020:
Summary Compensation Table
The table below summarizes the total compensation paid or earned by our named executive officers in 2020, 2019, and 2018.
Non-Equity
Stock Incentive Plan All Other
Name and Principal Salary Bonus Awards Compensation Compensation Total
Position Year ($) ($)(1 ) ($)(2 )(3) ($)(4 ) ($) ($)
R. Ramin Kamfar 2020 400,000 (5) 549,750 (2) 2,410,455 (6) - - 3,360,205
Chairman and CEO 2019 400,000 500,400 (2) 1,375,592 (7) - - 2,275,992
2018 400,000 385,200 3,685,054 (8) - - 4,470,254
Jordan B. Ruddy 2020 300,000 (5) 412,313 (2) 723,135 (6) - - 1,435,448
President and COO 2019 300,000 375,300 (2) 502,805 (7) - - 1,178,105
2018 300,000 288,900 1,634,251 (8) - - 2,223,151
James G. Babb, III 2020 325,000 385,735 (2) 511,018 (6) - - 1,221,753
Chief Investment 2019 325,000 406,575 (2) 502,805 (7) - - 1,234,380
Officer 2018 325,000 312,975 1,634,251 (8) - - 2,272,226
Ryan S. MacDonald 2020 325,000 446,672 (2) 964,178 (6) - - 1,735,850
Chief Acquisitions 2019 300,000 375,300 (2) 502,805 (7) - - 1,178,105
Officer 2018 250,000 240,750 1,582,179 (8) - - 2,072,929
Christopher J. Vohs 2020 262,500 163,980 160,051 (6) - - 586,531
Chief Financial Officer 2019 250,000 156,375 149,422 (7) - - 555,797
& Treasurer 2018 250,000 120,375 591,219 (8) - - 961,594
Michael L. Konig* 2020 300,000 374,813 (2) 723,135 (6) - - 1,397,948
Chief Legal Officer & 2019 300,000 375,300 (2) 502,805 (7) - - 1,178,105
Secretary 2018 300,000 288,900 1,634,251 (8) - - 2,223,151
* Pursuant to a Services Agreement with his wholly-owned law firm, K&A. (1) Amounts shown for 2019 and 2020 for each of Messrs. Kamfar, Babb, Ruddy,
MacDonald and Konig reflect payment of the 2019 Annual Bonuses and the
2020 Annual Bonuses in LTIP Units, rather than in cash, by mutual
agreement of each such executive officer and the Company. Amounts shown
for 2019 and 2020 for
and the 2020 Annual Bonuses in cash. (2) Amounts shown do not reflect compensation actually received by the named
executive officer. Instead, the amounts shown are the full grant date fair
value of LTIP Unit awards issued to the executives in each applicable
year. In accordance with
such year include the full grant date fair value of awards issued under
the Incentive Plans. The grant date fair value is computed in accordance
with FASB ASC 718, "Compensation-Stock Compensation," or "ASC 718."
The actual value of awards with respect to these awards are contingent on
continued employment and assumes achievement of target performance under
any long term performance awards. The amounts for 2018 and 2019 were
previously reported assuming maximum performance and have been restated to
reflect target performance.
(3) 2018 amounts include a one-time grant of an Initial Commitment Award to
each such executive officer pursuant to their respective Executive
Agreements. The Initial Commitment Awards were issued to each such
executive officer on January 1, 2018 , in a number of LTIP Units with a
full grant date fair value equal (in each case) to the following:
$2,435,418 for Mr. Kamfar ; $1,217,709 for each of Messrs. Ruddy, Babb,
MacDonald, and Konig (through K&A); and $487,080 for Mr. Vohs . Each suchInitial Commitment Award vested or will vest and become nonforfeitable in
five equal annual installments: the first, on
thereafter, on
including October 31, 2022 .
(4) The executive officers did not receive any non-equity incentive plan
compensation in 2018, 2019 or 2020.
(5) On March 31, 2020 , the Compensation Committee approved, and each of Mr.
Kamfar and Mr. Ruddy formally elected and agreed to receive, and the
Company agreed to pay, (a) 97.0% of the base salary of
fiscal year ending
of
the base salary of
such fiscal year, in Company equity rather than in cash, as more
specifically set forth therein. The number of shares of our Class A Common
Stock or LTIP Units granted to each of
grant dates were determined by dividing the dollar value of each such
grant by the volume weighted average closing price of a share of our Class
A Common Stock as reported on the NYSE American for the twenty (20)
trading days immediately preceding the grant dates.
(6) Reflects the issuance, on
of
Class A Common Stock as reported on the NYSE American for the trading day
immediately preceding the date of grant.
(7) Reflects the issuance, on January 1, 2019 , of LTIP Units based on a price
of $9.02 per LTIP Unit, which was the closing price of a share of ourClass A Common Stock as reported on the NYSE American for the trading day
immediately preceding the date of grant.
(8) Reflects the issuance (a) on January 1, 2018 , of LTIP Units based on a
price of $10.11 per LTIP Unit, and (b) on October 4, 2018 , of LTIP Units
based on a price of $9.37 per LTIP Unit, which were the respective
closing prices of a share of our Class A Common Stock as reported on theNYSE American for the trading day immediately preceding the applicable
date of grant.
CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer
Protection Act, and Item 402(u) of Regulation S-K, we are providing the
following information about the relationship of the annual total compensation of
our employees and the annual total compensation of Mr. Ramin Kamfar , Chief
Executive Officer (the "CEO"):
The amount earned in 2020 by Mr. Ramin Kamfar , our Chief Executive Officer (the
"CEO") with respect to the 2020 Annual Bonus granted to him for the 2020
performance period was not calculable as of the date of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2020 (the "Form
10-K") because the final performance data for the 2020 performance period that
determines the amount of the 2020 Annual Bonus earned was not available at that
time. As permitted by Instruction 6 to Item 402(u) of Regulation S-K, we thus
omitted the CEO pay ratio disclosure required by Item 402(u) of Regulation S-K
from the Form 10-K, and have included the required CEO pay ratio disclosure in
this Current Report on Form 8-K.
For 2020, our last completed fiscal year:
• the annual total compensation of the employee identified at median of our
Company (other than our CEO) was $153,300 ; and
• the annual total compensation of the CEO for purposes of determining the
CEO pay ratio was $3,360,205 .
The annual total compensation is based on compensation earned from
Based on this information, for 2020, the ratio of the annual total compensation ofMr. Kamfar , our Chief Executive Officer, to the median of the annual total compensation of all employees was estimated to be 21.92 to 1. This pay ratio is a reasonable estimate calculated in a manner consistent withSEC rules based on our payroll and employment records and the methodology described below. TheSEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee's annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. As such, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the "median employee," the methodology and the material assumptions, adjustments, and estimates that we used were as follows: (a) we determined that, as ofDecember 31, 2020 , our employee population consisted of approximately 55 individuals, and (b) to identify the "median employee" from our employee population, we collected actual base salary and bonus earned (including, when applicable, any such amounts paid in Company equity), as well as any overtime paid during the period fromJanuary 1, 2020 throughDecember 31, 2020 .
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