Kevin O'Shea
About Kevin O’Shea
Kevin P. O’Shea, age 59, has served as AvalonBay Communities’ Chief Financial Officer since June 2014, after roles as EVP–Capital Markets and SVP–Investment Management; earlier he was an Executive Director at UBS Investment Bank and practiced commercial real estate and banking law. He holds an MBA from Harvard Business School, a J.D. from Southern Methodist University, and a B.A. from Boston College; he is also a Trustee of Urban Edge Properties . Under his finance leadership, AVB delivered 2024 Core FFO/share growth of 3.6%, same-store residential revenue growth of 3.4%, and same-store residential NOI growth of 2.7%; AVB’s three-year TSR outperformed the Nareit Apartment REIT and Nareit Equity REIT indices . On the Q4 2024 call, O’Shea guided to 2025 Core FFO/share of $11.39 (+3.5% YoY) and outlined a $2.1B capital plan with $1.85B of capital sourced and ~$450M expected free cash flow after dividends .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| AvalonBay Communities | Chief Financial Officer | Jun 2014–Present | Oversees Finance, Accounting, Risk; capital markets strategy and investor relations |
| AvalonBay Communities | EVP – Capital Markets | Jan 2013–May 2014 | Led capital markets activities |
| AvalonBay Communities | SVP – Investment Management | 2003–Jan 2013 | Managed investments; portfolio finance |
| UBS Investment Bank | Executive Director | Pre-2003 | Real estate investment banking |
| Law Practice | Attorney (Commercial Real Estate & Banking Law) | Pre-UBS | Legal structuring for real estate finance |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Urban Edge Properties (REIT) | Trustee | Since 2014 | Public company board service |
Fixed Compensation
| Component (Fiscal 2024 unless noted) | Value ($) | Notes |
|---|---|---|
| Base Salary | 628,000 | No base increase in 2024 |
| Target Cash Bonus | 942,000 | Threshold 471,000; Max 1,884,000 |
| Actual Cash Bonus Paid (Feb 2025 for 2024) | 1,087,445 | Based on corporate, business unit, individual metrics |
| Target Stock Bonus | 935,750 | Based on business unit performance |
| Actual Stock Bonus (granted Feb 2025 for 2024) | 1,026,518 | 109.7% achievement of business unit goals |
| Stock Options (annual program) | None granted in 2024 | CEO may elect options; O’Shea did not |
Performance Compensation
Annual Cash Incentive Program (Corporate Metrics)
| Metric | Weight (Corporate bucket) | Targeting Framework | 2024 Achievement | Corporate Payout % |
|---|---|---|---|---|
| Core FFO/share – Annual | 20% | Threshold $10.28; Target $10.68–$10.88; Max $11.28 | Actual $11.01 | 132.5% |
| Core FFO/share – 1H | 30% | Threshold $5.03; Target $5.23–$5.33; Max $5.53 | Actual $5.47 | 170.0% |
| Core FFO/share – 2H | 30% | Threshold $5.30; Target $5.50–$5.60; Max $5.80 | Actual $5.54 | 100.0% |
| Development Yield | 15% | Variance vs original budgeted yield | Above target | 127.3% |
| GRESB Standing Investment Score | 7.5% | Score-based | 80 (after -3 adjustment) | 100.0% |
| Mid-Lease NPS (1H/2H) | 1.125% / 2.625% | Semiannual targets | Weighted 30 (28/31) | 100.0% / 100.0% |
| Online Reputation Sentiment | 3.75% | Target 4.25 | Actual 4.39 | 128.0% |
| Strategic & Corporate Initiatives | 10% | Qualitative | Determined 108% | 108.0% |
| Effectiveness of Management | 10% | Qualitative | Determined 110% | 110.0% |
| Corporate Bucket Total | 100% | — | — | 123.9% |
CFO cash bonus weighting: Corporate 40%, Business Unit 40%, Individual 20% . O’Shea business unit achievement was 109.7% and individual 110.0% .
CFO Business Unit Performance Highlights (2024)
- Managed ~$400M unsecured notes at 5.05% and executed forward equity ($890M initial cost ~5.0%) .
- Supported Workday implementation across finance; renewed insurance programs; launched new customer support office; deployed RPA to cut back-office costs; advanced CR targets (new emissions goals, solar expansion, waste goal) .
Annual Stock Bonus (CFO)
| Basis | Target ($) | Achievement (%) | Payout ($) |
|---|---|---|---|
| Business Unit performance | 935,750 | 109.7% | 1,026,518 |
Multi-Year Performance Awards
| Performance Period | Target Value ($) | TSR Metrics (weights) | Operating Metrics (weights) | Structure |
|---|---|---|---|---|
| 2024–2026 | 1,387,800 | FTSE Nareit Equity Apartments (35.75%); FTSE Nareit Equity REITs (19.25%) | Core FFO/share growth vs peers (24.75%); 3-yr Net Debt/Core EBITDA vs peers (20.25%) | 3-year; units settled in stock plus cash for accrued dividends |
| 2022–2024 (settled Feb 26, 2025) | — | Overall achievement 149.1% | — | O’Shea earned 7,636 shares plus $150,887 cash dividends; total value $1,842,872 (at $221.58/share) |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 42,661 shares; less than 1% of class |
| Options | 13,966 exercisable (2021 grant); no unvested options as of 12/31/24 |
| Unvested Restricted Stock | 1,299 (2022 award); 3,551 (2023 award); 5,936 (2024 award) |
| Performance Awards – Earned | 7,636 units for 2022–2024 settled 2/26/25 |
| Performance Awards – Outstanding (Unearned) | 2023–2025: 15,872 units; 2024–2026: 15,146 units (payout values shown at 12/31/24) |
| Ownership Guidelines | CFO required to hold stock equal to 3× base salary; officers with ≥5 years are in compliance |
| Hedging/Pledging | Anti-hedging/anti-speculation policy; no pledging permitted |
| Insider Trading | Preclearance required; trades generally only in established windows; Rule 10b5-1 permitted |
Vesting and settlement mechanics:
- Restricted stock vests ratably over three years (dividends paid at common rate) .
- Performance units settle in stock plus cash dividends at end of the 3-year period; pro rata vesting for death, disability, retirement, or termination without cause after one year of service .
Employment Terms
| Provision | Terms |
|---|---|
| Employment Agreements | AVB does not have employment agreements with officers; CEO’s prior agreement expired Jan 2024 |
| Severance Guidelines (without cause, no sale event) | Suggest 1.5× base + target cash bonus for non-PEO NEOs; CFO illustrative guideline $2,355,000 (as of 12/31/24) plus 6 months COBRA and up to $5,000 outplacement |
| Change-in-Control (Sale Event) – Cash | CFO receives 2× “Covered Compensation” (base + current-year target cash bonus): $3,140,000 |
| Change-in-Control – Equity & Benefits | Accelerated vesting of restricted stock; performance awards vest at target; COBRA up to 18 months ($43,237 shown); prorated target cash and stock bonus ($1,877,750) |
| Triggers | Double-trigger equity vesting: termination without cause or for Good Reason within 24 months of Sale Event |
| Retirement Conditions | Six months’ notice; release; two-year non-solicitation and one-year non-compete |
| Clawback | NYSE-compliant compensation recovery policy adopted Sept 29, 2023; mandatory recovery on restatement; no recoveries outstanding for 2024 |
| Tax Gross-Ups | No excise tax gross-ups on change in control; no perquisite tax gross-ups (limited exceptions for relocation) |
Performance & Track Record
- 2024 Company results: Core FFO/share +3.6%; same store residential revenue +3.4%; same store residential NOI +2.7%; development completions at 5.6% initial stabilized yield (> plan by 0.2%) .
- Capital markets execution: ~$2B capital raised in 2024 (including ~$726M asset sales, $400M unsecured notes); forward equity expected to generate ~$890M in 2025; year-end Net Debt/Core EBITDAre 4.2×; 95% unencumbered NOI .
- 2025 outlook (O’Shea): Core FFO/share guided to $11.39 (+3.5% YoY), ~$1.6B development starts, sources include $960M unsecured debt and $890M forward equity, with ~$450M free cash flow .
Governance, Pay Practices & Shareholder Feedback
- Best practices: pay-for-performance; rigorous goals; no single-trigger equity vesting; no option repricing; independent consultant (Ferguson Partners) .
- Stock ownership guidelines for senior officers; anti-hedging and no-pledging policies .
- Say-on-pay: 95.5% approval at 2024 Annual Meeting .
Compensation Structure Analysis
- Mix and at-risk pay: CFO’s compensation includes meaningful performance-linked cash and equity (annual cash tied to corporate/business/individual metrics; annual stock bonus tied to business unit outcomes; multi-year PSUs tied to relative TSR and operating metrics) .
- Metric rigor: Corporate goals blend absolute and relative performance (Core FFO, development yield, GRESB, NPS, qualitative initiatives) with capped payouts .
- Policies mitigate misalignment: clawback, no pledging/hedging, and no tax gross-ups .
Investment Implications
- Alignment strong: Ownership guidelines, anti-hedging/pledging, and multi-year relative PSUs support long-term shareholder alignment and reduce hedging/pledging risk .
- Event risk: Double-trigger CIC terms and 2× cash multiple for the CFO create moderate change-of-control costs; equity accelerates at target on a Sale Event .
- Supply and selling windows: RSAs vest ratably and PSUs settle at cycle-end (e.g., Mar 1, 2026/2027), potentially adding periodic share deliveries; trading is restricted to cleared windows or 10b5-1 plans .
- Execution credibility: O’Shea’s capital markets discipline (debt issuance, forward equity, liquidity planning) and operational systems transition (Workday) bolster confidence in guidance and funding of growth .
- Shareholder support: High say-on-pay approval (95.5%) indicates investor endorsement of pay design and rigor .