George D. Johnstone

About George D. Johnstone

George D. Johnstone (age 61) is Executive Vice President, Operations at Brandywine Realty Trust (BDN). He joined Brandywine in November 1998 and was appointed EVP, Operations in March 2014; he holds a B.S. in Accounting from Albright College . Company performance context for his tenure includes 2024 FFO per share of $0.85, GAAP same-store NOI decline of 1.0% with cash same-store NOI growth of 1.8%, and a cumulative TSR value of $56.87 for a $100 investment at year-end 2024; the company also reported meeting or exceeding several 2024 Business Plan operating goals (speculative revenue, tenant retention, year-end occupancy, and rent mark-to-market) .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Annual Incentive (2024)

• Individual payout: $400,000 (100% of target), with the Compensation Committee capping scorecard payout at target despite a 130% formulaic outcome .
• Scorecard design and outcomes:

• Johnstone 2024 AI payout: Target $400,000; Approved payout $400,000 (100%) .

Long-Term Incentives (structure and 2024 grants)

• Target LTI opportunity: 230% of base salary in 2024 (unchanged from 2023) .
• Mix: 50% PSUs; 50% RSUs with outperformance modifier .
• Grant date: February 26, 2024 .

• 2025 design: unchanged vs 2024; leasing target raised to 1.3 million sq ft (target) for 2025 tranche; RSU outperformance now 225% for EVPs with metrics expanded to include rating agency upgrades, Net Debt/EBITDA, cumulative FFO, and total capital markets activity (each 25%), 3-year ending 12/31/2027 .

Realization on prior cycles

Equity Ownership & Alignment

Vesting supply cadence and potential selling pressure:

• Scheduled RSU distributions within 60 days (57,709 for Johnstone) and annual RSU vesting on April 15 may create recurring tax-withholding related share sales; outperformance shares, if earned for 2024–2026, would settle 50% on Jan 1, 2027 and 50% on Jan 1, 2028 .

Deferred compensation

Employment Terms

• Change-in-control agreements (non-CEO NEOs): Double-trigger cash severance equal to 2× (base salary + greater of last bonus or target bonus) plus 730 days of medical and life insurance; equity acceleration governed by award agreements .
• Qualifying Retirement: All current NEOs, including Johnstone, met conditions (age ≥57 and ≥15 years of service) as of proxy date; equity treatment provides continued or pro‑rated vesting depending on award type .
• Clawback: Company maintains executive clawback agreements and a Dodd-Frank compliant policy effective Oct 2, 2023 for restatement-related recoupment regardless of misconduct .
• Potential payments as of 12/31/2024 (illustrative scenarios):

Notes: Company policy indicates no new excise tax gross‑ups; the CEO has a legacy agreement, but NEO CIC agreements are standard double trigger without gross‑ups .

Performance & Track Record

• 2024 operating achievements highlighted by BDN include completion of Solaris House (Austin), 3151 Market Street (Philadelphia), and 155 King of Prussia Road (Radnor), along with incremental B+Labs conversions and meeting/exceeding several operating plan goals (speculative revenue, tenant retention, occupancy, and rent mark-to-market) .
• Financial performance markers:
  • FFO per fully diluted share: $0.85 in 2024 .
  • GAAP same-store NOI change: -1.0% in 2024; Cash same-store NOI +1.8% .
  • TSR value of initial $100 investment: $56.87 at YE 2024; Peer group (FTSE NAREIT Equity Office Index) $76.95 .

Compensation Structure Analysis

• Mix and risk: For 2024, LTI mix shifted to 50/50 PSUs and RSUs (from heavier PSUs previously) to enhance retention while maintaining performance alignment via annual operating metrics and a 3‑year relative TSR modifier .
• Higher stretch on RSU outperformance: Max increased to 275% (CEO), 250% (CFO), and 225% (other NEOs) to emphasize balance sheet strength and growth; targets deemed ambitious and not probable at grant .
• Discretionary governance: Despite a 130% formulaic scorecard outcome, the Committee capped 2024 annual incentives at target in light of sector headwinds, with individual NEO payouts 90%–100% of target; Johnstone received 100% .
• Best-practice features: Robust ownership guidelines; prohibitions on hedging/pledging; clawback policy; use of independent compensation consultant (Pay Governance LLC); and no perquisites .

Say-on-Pay & Peer Group

• Say-on-Pay 2024: Approximately 90% of votes cast supported the executive compensation program .
• Peer group and positioning: Office REIT peers selected on business model and size; the Committee targets total compensation near mid‑range of peers with performance-based variation; 2024 peer group unchanged .

Investment Implications

• Alignment and retention: Johnstone’s pay is highly at-risk via annual operating scorecards and multi-year PSU/RSU structures, with elevated outperformance hurdles geared to deleveraging and capital markets activity—supportive of balance sheet quality targets in a challenged office cycle .
• Supply/vesting overhang: Significant performance-based units and multi-year outperformance features can create step-up share settlements in 2027–2028 if earned; ongoing RSU vesting and scheduled distributions (57,709 within 60 days) may lead to periodic tax-withholding sales but pledging/hedging remain prohibited, reducing adverse alignment risks .
• Retention and succession risk: All NEOs, including Johnstone, are retirement‑eligible, which eases equity forfeiture barriers and can increase transition optionality; however, 2025 pay levels remain flat and LTI maintains performance rigor, balancing retention with performance .
• Change-in-control economics: Double-trigger severance at 2× pay and continuation of benefits are standard; equity accelerates per plan terms—manageable from a shareholder perspective relative to REIT norms and without new excise tax gross‑ups .