Glade M. Knight
About Glade M. Knight
Executive Chairman and founder of Apple Hospitality REIT, Inc. (APLE); Director since 2007; age 81. He has served as Executive Chairman since May 2014 (previously Chairman and CEO) and founded multiple predecessor Apple REIT entities; prior roles include Chairman/CEO of Cornerstone Realty Income Trust and trustee of Colonial Properties Trust after its merger with Cornerstone. Under APLE’s current incentive framework for executive officers, performance is measured 50% on shareholder return metrics (absolute and relative TSR over 1/2/3 years) and 50% on operating metrics, with 75% of target incentives in stock, supporting alignment with shareholders. APLE delivered 2024 RevPAR of $118.54 (+2.5% YoY) and outperformed its TSR peer set by 21.4 percentage points over the three years ended 12/31/2024. Say‑on‑pay support was ~97% in 2024.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Apple Hospitality REIT, Inc. | Executive Chairman; Director | 2014–present; Director since 2007 | Founder; leads Board; chairs Executive Committee; separation of Chair/CEO roles enhances governance structure. |
| Cornerstone Realty Income Trust, Inc. | Chairman & CEO | 1993–2005 | Led public REIT through merger into Colonial Properties Trust; continued as trustee through 2011. |
| Colonial Properties Trust | Trustee | 2005–2011 | Post‑merger board role providing continuity of oversight. |
| Apple Suites, Apple Two, Apple Five, Apple Six, Apple Seven, Apple Eight, Apple Nine (predecessor), Apple Ten | Founder; Chairman & CEO | 1999–2016 (various) | Built and exited multiple rooms‑focused hotel REITs via sales/mergers; Apple Seven/Eight merged into APLE (2014); Apple Ten merged into APLE (2016). |
External Roles
| Organization | Role | Years | Relevance |
|---|---|---|---|
| Energy 11 GP, LLC; Energy Resources 12 GP, LLC | Partner & CEO | Ongoing | Capital allocation/operator experience in energy partnerships. |
| Southern Virginia University | Founding Chairman | Ongoing | Governance and institutional leadership experience. |
| BYU Graduate School of Business Management | Founding member, Entrepreneurial Dept. | Ongoing | Entrepreneurship and network benefits. |
Fixed Compensation
| Year | Total Compensation ($) | Notes |
|---|---|---|
| 2024 | 1,451,238 | Total annual compensation disclosed in related party section. |
| 2023 | 1,645,121 | |
| 2022 | 1,588,476 |
- Employee directors (including the Executive Chairman) receive no additional director fees.
Performance Compensation
- Executive officer program design (applies to executive officers of APLE):
- Mix: ~78% of target executive pay is incentive‑based; ~75% of target incentive delivered in APLE shares (two‑thirds vested at grant, one‑third restricted).
- Performance split: 50% shareholder return metrics (absolute and relative TSR over 1/2/3 years) and 50% operating metrics.
- 2024 operating metrics: Comparable Hotels RevPAR growth, Comparable Hotels Adjusted Hotel EBITDA margin, Adjusted EBITDAre, MFFO per share, and capital expenditures (each 15% of operating bucket), plus discretionary goals for balance sheet/capital allocation and building proprietary market forecasting (25% of operating bucket).
- Vesting cadence: For earned equity tied to TSR metrics, half is in restricted shares that vest on the second Friday of December of the grant year (e.g., Dec 12, 2025 for 2025 awards); for 2023 awards, vest date was Dec 13, 2024.
- Shareholder alignment: For 2024, APLE achieved strong results on long‑term relative TSR (86th percentile for 3‑year) supporting above‑target payouts on that component, with mixed absolute TSR results year‑to‑date.
Equity Ownership & Alignment
| Holder | Beneficial Ownership (Shares) | % of Class | Key Details |
|---|---|---|---|
| Glade M. Knight | 10,796,233 | 4.5% | Includes 9,837,031 shares held via an LLC 99% owned by an irrevocable trust for his descendants over which he retains sole voting/transfer power; plus 268,858 shares held by spouse. |
- Ownership guidelines: Directors must hold ≥4x cash retainer; executive officers must hold ≥5x (CEO) or ≥3x (others) base salary; all current directors and executive officers have met or are within transition windows.
- Hedging/pledging policy: Hedging prohibited; holding shares in margin accounts prohibited; pledging limited to no more than 50% of individually held shares. No specific pledging by Mr. Knight is disclosed.
- Trading/vesting considerations: One‑third of annual equity typically vests each December; monitor potential seasonal supply from vesting and any Form 4 activity around March (grant/issuance) and December (vesting).
Employment Terms
- No individual employment contracts for executive officers; limited perquisites; dividends on restricted stock paid only upon vesting; no stock option grants.
- Clawback policy: Mandatory recovery of incentive‑based compensation for current/former executives for three years preceding a required restatement.
- Executive Severance/Change‑in‑Control framework (participants): Double‑trigger; lump sum of 3.0x (base salary + annual bonus), pro‑rated bonus, COBRA/life insurance support, outplacement; full vesting/settlement of equity if not assumed in a change‑in‑control. Individual participation for the Executive Chairman is not specifically disclosed in the proxy.
Board Governance
- Role and structure: Executive Chairman (Mr. Knight) presides over Board/shareholder meetings and chairs the Executive Committee; CEO role held by Justin G. Knight; Lead Independent Director (Jon A. Fosheim) facilitates independent oversight.
- Independence: Seven of nine directors are independent; Mr. Knight (Executive Chairman) and CEO Justin G. Knight are not independent.
- Family relationships: Mr. Knight is the father of CEO Justin G. Knight and of President, Real Estate & Investments Nelson G. Knight.
- Attendance: In 2024, each director attended at least 75% of Board/committee meetings.
- Employee director pay: Employee directors (including Mr. Knight) receive no additional director compensation.
Director Compensation (for context)
- Non‑employee directors (cash/equity/retainers) structure and retainers are disclosed; employee directors receive none.
Compensation Peer Group (benchmarking)
- 2024/2025 peer set used by the Compensation Committee and FPC: DRH, HST, PK, PEB, RLJ, RHP (added in 2024), INN, SHO, XHR; median market cap ~$2.0B–$1.9B at YE 2023/2024 (APLE ~$3.8–$3.7B).
- TSR peers used in 2024: CHSP, DRH, HST, PK, PEB, RLJ, RHP, INN, SHO, XHR.
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approval: ~97% support in 2024 (for 2023 compensation); ~98% support in 2023 (for 2022 compensation).
- Ongoing engagement with investors via conferences, roadshows, and meetings.
Related Party Transactions (governance risk review)
- Apple Realty Group (ARG): Mr. Knight owns ARG, which received support services from APLE; APLE was reimbursed ~$1.5M in 2024; due from ARG ~$0.5M at 12/31/2024 under a quarterly settlement process (up to $1M advances permitted each way).
- Aircraft use: APLE’s Learjet used primarily for corporate purposes; APLE also occasionally reimburses a Knight‑affiliated aircraft entity at third‑party rates; 2024 costs for affiliated aircraft were < $0.1M.
Equity Vesting and Potential Selling Pressure (calendar)
| Item | Timing | Detail |
|---|---|---|
| Equity grants issuance/settlement | March (typical) | Cash payout and equity issuance for prior‑year performance occur in March (e.g., March 2025 for 2024 awards). |
| Restricted equity vest | Second Friday of December | One‑third of annual equity (for TSR components) vests in December of grant year (e.g., Dec 12, 2025); 2023 awards vested Dec 13, 2024. |
Investment Implications
- Alignment: High insider ownership (Mr. Knight ~4.5% of shares outstanding) and equity‑heavy incentives across executive officers support pay‑for‑performance and long‑term alignment; anti‑hedging/margin restrictions and ownership guidelines further reinforce alignment.
- Performance rigour: Relative TSR requires outperformance at ≥55th percentile to achieve target; APLE’s three‑year TSR outperformance (86th percentile; +21.4 pts vs peers) indicates the plan has paid for tangible shareholder value creation.
- Governance watchpoints: Family relationships at the top (Executive Chairman is father of CEO and of President, Real Estate & Investments) and related‑party cost‑sharing/aircraft arrangements warrant ongoing oversight, though the Board maintains a Lead Independent Director, majority independence, and separated Chair/CEO roles.
- Trading signals: December vesting can introduce year‑end supply; monitor Form 4 filings around March (grant/issuance) and December (vesting) for potential selling pressure or retention signals.
- Downside protections and discipline: Double‑trigger CIC terms (3.0x multiple for participants), robust clawback, and no employment contracts indicate investor‑friendly guardrails; however, individual CIC participation for the Executive Chairman is not disclosed and should be clarified with IR for precise economics.
Appendix: Executive Incentive Framework (2024) – Key Metrics and Weightings
| Metric (2024) | Weight | Target | 2024 Actual | Payout |
|---|---|---|---|---|
| Comparable Hotels RevPAR change | 7.5% | 3.0% | 1.4% | 0.0% |
| Comparable Hotels Adjusted Hotel EBITDA margin % | 7.5% | 35.1% | 36.0% | 15.0% |
| Adjusted EBITDAre ($000s) | 7.5% | 463,000 | 467,216 | 10.4% |
| MFFO per share | 7.5% | 1.61 | 1.61 | 7.5% |
| Capital Expenditures ($000s) | 7.5% | 80,000 | 78,262 | 10.1% |
| Balance sheet/capital allocation (discretionary) | 6.25% | Target | Above Target | 9.38% |
| Build proprietary forecasting (discretionary) | 6.25% | Target | Target | 6.25% |
| 1‑yr TSR (absolute) | 4.2% | 7.0% | -1.3% | 0.0% |
| 2‑yr TSR (absolute) | 4.2% | 13.0% | 10.8% | 3.4% |
| 3‑yr TSR (absolute) | 4.2% | 18.0% | 13.4% | 2.8% |
| 1‑yr TSR (relative to peers) | 12.5% | 55th pct | 44th pct | 10.2% |
| 2‑yr TSR (relative to peers) | 12.5% | 55th pct | 39th pct | 9.2% |
| 3‑yr TSR (relative to peers) | 12.5% | 55th pct | 86th pct | 25.0% |