Daniel Palazzo
About Daniel Palazzo
Daniel Palazzo (age 55) is Senior Vice President, Chief Accounting Officer and Treasurer at Brandywine Realty Trust (BDN). He joined BDN in 1999, became Vice President & Chief Accounting Officer effective January 15, 2015, and was promoted to Senior Vice President in 2023. He is a CPA (Pennsylvania), holds a B.A. in Accounting from the University of Delaware, and previously worked in Arthur Andersen’s commercial audit division focused on real estate, construction and financial services . Company performance context for 2024 included a corporate scorecard that achieved 130% formulaically but was discretionarily paid at 90–100% of target, and 2022–2024 PSU payouts at 74% of target on relative TSR—key backdrop for senior executive pay alignment .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Brandywine Realty Trust | Senior Vice President, Chief Accounting Officer & Treasurer | 2023–Present | Oversees accounting, reporting, treasury across the REIT platform |
| Brandywine Realty Trust | Vice President & Chief Accounting Officer | 2015–2023 | Elevated corporate accounting leadership; effective date Jan 15, 2015 |
| Brandywine Realty Trust | Vice President, Asset Management (PA Region) | 2006–2015 | Regional asset optimization and operating performance |
| Brandywine Realty Trust | Director of Operations (NJ Region) | 2004–2006 | Regional operations leadership |
| Brandywine Realty Trust | Corporate Controller | 1999–2004 | Corporate controllership and financial controls |
| Arthur Andersen LLP | Commercial Audit (Real estate, construction, financial services) | Pre-1999 | External audit and accounting advisory in real estate sectors |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| World Affairs Council of Philadelphia | Board of Directors | Not disclosed | Community and civic engagement; external leadership exposure |
| NAREIT | Member | Not disclosed | Industry connectivity and policy engagement |
Fixed Compensation
| Component | 2024 | Notes |
|---|---|---|
| Base Salary | Not disclosed | Palazzo is not a named executive officer (NEO); proxies disclose cash comp for NEOs only |
| Target Annual Bonus (%) | Not disclosed | NEO targets disclosed (CEO 200%; others 100%), but not for non-NEOs |
| Actual Annual Bonus | Not disclosed | 2024 NEO payouts were 90–100% of target after discretion; non-NEO payouts not disclosed |
Performance Compensation
| Element | Metric/Design | Weighting/Targets | Actual/Payout | Vesting/Notes |
|---|---|---|---|---|
| Annual Incentive (Corporate Scorecard – 2024 context) | FFO ($/sh) | Min $0.80; Target $0.90; Max $1.00 | Actual $0.84; 91% of target; Weighted 9.10% | Applies to corporate plan framing senior exec incentives |
| CAD ($/sh, adj.) | Min $0.55; Target $0.63; Max $0.75 | Actual $0.58; 91%; Weighted 9.10% | ||
| Speculative Revenue ($mm) | Min $23.5; Target $24.0; Max $25.0 | Actual $26.4; 175%; Weighted 17.50% | ||
| Year-End Leased (%) | Min 87.0; Target 88.0; Max 89.0 | Actual 89.3; 175%; Weighted 17.50% | ||
| Revenue-Maintaining Capex (% lease rev.) | Min 14.0; Target 12.0; Max 10.0 | Actual 12.10; 99%; Weighted 9.90% | ||
| Aggregate Investment/Financing ($mm) | Min $350; Target $400; Max $450 | Actual $711.2; 175%; Weighted 21.88% | ||
| Volume of Assets Sold ($mm) | Min $50; Target $80; Max $110 | Actual $298.2; 175%; Weighted 21.88% | ||
| Net Debt/EBITDA (core) | Min 7.3x; Target 6.8x; Max 6.2x | Actual 7.2x; 88%; Weighted 11.00% | ||
| Interest Coverage (x) | Min 2.0; Target 2.1; Max 2.2 | Actual 2.1; 100%; Weighted 12.50% | Formulaic outcome: 130%; payouts set at 90–100% of target | |
| Long-Term Incentive – RSUs (2024+) | Time-vested RSUs, 3 equal installments | 50% of LTI value (for NEOs) | N/A (individual not disclosed) | RSUs vest over 3 years; dividend equivalents paid; includes outperformance modifier |
| RSU Outperformance Modifier (2024–2026) | Avg FFO growth (25%); Total capital market activity (75%) | Up to 275% of original award for CEO; 225% for other NEOs; goals intentionally ambitious | Additional shares (if any) vest 50% on Jan 1, 2027 and 50% on Jan 1, 2028 | Performance measured through 12/31/2026; death/disability/qualifying retirement pro-rata rules apply |
| Long-Term Incentive – PSUs (2024+) | Operating metrics: Leasing activity (75%); SSNOI growth (25%); TSR +/-20% modifier | 0–200% on operating metrics; TSR modifier +/-20% | N/A (individual not disclosed) | Payout after 12/31/2026; for 2024 PSUs, disability/retirement keep period open; death accelerates per policy |
| Prior PSU Outcomes (2022–2024) | Relative TSR vs FTSE NAREIT Equity Office Index | Payout scale 0–200% | -41.4% TSR at 37th percentile → 74% of target; NEO PSU units earned disclosed (context) | Illustrates pay-for-performance calibration on multi-year relative TSR |
Notes:
- Palazzo’s individual grant sizes and payouts are not disclosed because he is not an NEO; tables above reflect company program design and outcomes that frame senior executive incentives .
Equity Ownership & Alignment
| Topic | Company Policy / Status | Implications |
|---|---|---|
| Beneficial ownership (Palazzo) | Not disclosed (beneficial ownership table covers Trustees and NEOs; Palazzo not listed) | Cannot compute ownership % or vested/unvested breakdown for Palazzo from proxy |
| Executive ownership guidelines | Tiered: CEO = 6x salary or 75% of no-cost awards; CFO/EVP-SMD/GC/CAO = 4x salary or 75% of no-cost awards; Other EVPs/SVPs/VPs = 1.5x salary or 50% of no-cost awards, within 5 years; all execs reported in compliance | As an SVP CAO (not CAO=Chief Administrative Officer), Palazzo likely falls into the “other EVPs/SVPs” 1.5x/50% tier |
| Hedging / pledging | Executives and Trustees are prohibited from hedging or pledging company shares | Reduces alignment risks from hedging and leverage-related selling pressure |
| Rule 10b5‑1 plans | Adoption/amendment only during open windows; cooling-off period (later of 90 days or two business days after next 10-Q/10-K; max 120 days) for execs; disclosure via SEC where required | Encourages orderly, pre-programmed trading; mitigates MNPI risk |
Employment Terms
| Provision | Terms |
|---|---|
| Change-in-control (CIC) severance | For executive officers other than CEO: Double-trigger; if a CIC and qualifying termination within 730 days, severance equals 2x (base salary + greater of last bonus or target bonus) plus 730 days of medical and group life benefits |
| CEO severance (context) | CEO has separate agreement with 2.99x multiple and excise tax gross-up (CEO-only) |
| Clawback | Dodd-Frank compliant clawback adopted Oct 2, 2023; recovery of erroneously awarded incentive comp on required restatement regardless of misconduct; existing clawback agreements also in place |
| Qualifying retirement | Voluntary termination after age 57 and ≥15 years of service |
| Equity vesting on termination | RSUs generally vest on death, disability or qualifying retirement; PSUs have special rules (for 2024+ PSUs, disability/retirement keep performance period open; death vests based on completed-year actuals and target for remaining; CIC truncates 2024+ PSUs to relative TSR) |
| Non-compete / non-solicit | Not specifically disclosed in proxy for executive officers beyond plan/award terms |
| Perquisites | Company states it does not provide perquisites to executive officers |
Performance & Track Record (Context)
- 2024 corporate operating results used for incentives included strong leasing/investment execution (e.g., Spec Revenue $26.4mm vs $24.0mm target; assets sold $298.2mm vs $80mm target), offset by balance sheet metrics (Net Debt/EBITDA 7.2x vs 6.8x target) . Formulaic annual incentive was 130%, but payouts were capped at 90–100% of target to reflect sector conditions .
- Long-term relative performance calibration produced 74% of target payout for 2022–2024 PSUs on -41.4% TSR at the 37th percentile, evidencing below-median returns over that window but with proportional payout reduction .
- 2024 initiatives included major development completions in Austin (Solaris House), Philadelphia (3151 Market life science), and a fully leased suburban office project (155 King of Prussia Rd), plus significant capital markets activity (e.g., $400mm 5-year unsecured issuance; mortgage refinancing) that inform the capital activity metrics emphasized in incentives .
Compensation Structure Analysis
- Year-over-year mix: Program shifted in 2024 to 50/50 PSUs/RSUs (from 2/3 PSUs, 1/3 RSUs), enhancing retention while retaining operating performance focus; RSU outperformance maximum increased (225%→275% for CEO; lower caps for other NEOs), emphasizing balance sheet and FFO amid office sector stress .
- Metric rigor: Annual scorecard shows multi-metric design across operations, leasing, and capital (weights 20/30/50); PSUs reoriented to operating drivers with a TSR modifier, balancing controllability and market alignment .
- Governance safeguards: Robust clawback, anti-hedging/pledging, and ownership guidelines mitigate risk-taking and strengthen alignment; say-on-pay support ~90% in 2024 indicates shareholder endorsement of program design .
Related Party Transactions & Red Flags
- The proxy reports no related party transactions since January 1, 2024 apart from compensation arrangements disclosed, and reiterates anti-hedging/pledging prohibitions and no perquisites for executives .
- A material cybersecurity incident was disclosed in May 2024; board oversight and remediation processes are described, with no material financial impact expected as of the filing date .
Equity Ownership & Insider Activity (Palazzo-specific)
- Palazzo’s total beneficial ownership is not disclosed (table includes Trustees and NEOs only), and the proxy does not provide vested/unvested or option/RSU details for him individually .
- Executive officers’ ownership guideline compliance is reported at the company level; Palazzo is covered by the general policy and trading restrictions (including Rule 10b5‑1 framework) .
Investment Implications
- Retention risk: Palazzo has over 25 years at BDN and is age 55; he has the service threshold but is not yet age-eligible for “qualifying retirement” (requires age 57 and 15 years), suggesting a nearer-term incentive to remain through upcoming performance/vesting cycles before retirement eligibility fully de-risks awards .
- Selling pressure: Anti-hedging/pledging and 10b5‑1 cooling-off rules reduce opportunistic selling and leverage risk; RSU outperformance shares, if earned, vest post-performance in two annual tranches (Jan 1, 2027 and 2028 for 2024–2026 cycle), moderating supply overhang if performance goals are met .
- Pay-for-performance: The operating-metric PSU design with a TSR modifier should reward execution on leasing/SSNOI while keeping market-relative discipline; prior cycle PSU payout at 74% of target indicates downside sensitivity when TSR underperforms peers .
- CIC economics: Double-trigger CIC terms for executive officers (2x salary+bonus and two years benefits) imply manageable, market-standard parachute risk for non-CEO executives; CEO’s 2.99x and excise gross-up are CEO-specific and do not apply to Palazzo .
Note: Palazzo’s individual salary, bonus, equity grant sizes, ownership amounts and Form 4 trading history are not disclosed in the proxy and were not available in this analysis. The program design, policies, and corporate performance outcomes above frame his likely incentive structure and alignment within BDN’s executive cohort.