Mark Patten
Chief Financial Officer at ESSENTIAL PROPERTIES REALTY TRUST
Executive
About Mark Patten
Mark E. Patten, age 61, is Executive Vice President, Chief Financial Officer, Treasurer and Corporate Secretary of Essential Properties Realty Trust, Inc. (EPRT). He has served as CFO and Treasurer since August 10, 2020 and was elected Corporate Secretary on March 30, 2022; he holds a B.S. in Accounting from the University of Florida and was previously a partner at KPMG . Company performance tied to his finance remit includes 2024 AFFO per share of $1.74, net income of $203.6 million, and strong TSR outcomes (value of $100 investment reached $156.77 in 2024, with leading relative TSR vs the peer group since IPO) . EPRT delivered record $1.2 billion gross investments at 8.0% initial cash yields, maintained net debt-to-annualized adjusted EBITDAre of 4.6x, and raised substantial equity and debt capital in 2024, all areas directly influenced by CFO oversight of capital markets, liquidity, and reporting .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| CTO Realty Growth, Inc. | SVP & CFO | 2012–2021 | Led finance for publicly traded diversified real estate operating company |
| Alpine Income Property Trust, Inc. | SVP, CFO & Treasurer | 2019–2021 | CFO for net-lease REIT; resigned upon election as EPRT CFO |
| CNL Hotels & Resorts, Inc. | SVP & Chief Accounting Officer | 2004–2007 | Oversaw accounting for lodging REIT with ~$7.7B total assets |
| KPMG | Partner (earlier: staff through manager) | 1986–1997 (partner from 1997) | Audit/accounting leadership; foundational SEC reporting expertise |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No public company board service disclosed for Patten in the proxy |
Fixed Compensation
Multi-year compensation for the CFO (USD thousands):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $425 | $475 | $520 |
| Stock Awards (grant-date fair value) | $645 | $822 | $1,249 |
| Non-Equity Incentive Plan Compensation (Annual Bonus) | $736 | $814 | $970 |
| All Other Compensation (primarily 401k match) | $26 | $26 | $31 |
| Total | $1,832 | $2,137 | $2,770 |
Additional fixed pay design:
- 2024 base salary increased to $520,000 (+9.5% YoY), approximating the peer median for CFO roles .
- Target, threshold, and maximum annual cash bonus opportunities (as % of base) for 2024: 125% target; 50% threshold; 200% maximum (max increased from 175% in 2023) .
Performance Compensation
Annual Bonus Structure and Results (2024)
| Metric | Weighting (CFO) | Target | Actual | Comments |
|---|---|---|---|---|
| AFFO per Share | 25% | $1.73 | $1.74 | Achieved between Target and High; core operational KPI |
| Gross Investments | 20% | $1.05B | $1.20B | Achieved High; record investment year |
| Net Debt / Annualized Adjusted EBITDAre | 25% | 4.8x | 4.6x | Achieved High; leverage discipline |
| ESG Score (Qualitative) | 5% | 3.00 | 4.50 | Achieved between Target and High; ESG initiatives advanced |
| Individual Performance (Qualitative) | 25% | — | — | Capital markets execution and risk management contributions |
- 2024 actual CFO bonus payout: $970K, equal to 149% of target opportunity .
Long-Term Incentives (RSUs)
| Award Type | Grant Date | Target Size | Metric | Payout Curve | Vesting |
|---|---|---|---|---|---|
| Performance-Based RSUs (2024) | 2/16/2024 | 20,587 target shares | 3-year relative Compounded TSR vs 2024 TSR Peer Group | 50% (Threshold, 30th pctile) / 100% (Target, 50th pctile) / 250% (Max, 75th pctile), linear in-between; negative absolute TSR reduces award by 25% at target | 50% on 12/31/2026; 50% on 12/31/2027, subject to continued employment |
| Time-Based RSUs (2024) | 2/16/2024 | 13,724 shares | Service-based | — | 25% tranches annually over 4 years on each anniversary of Jan 18, 2024 |
| Performance-Based RSUs (2023, expected) | 2/17/2023 | 16,881 target shares | Relative TSR vs peer set | Same curve as design in effect | 50% on 12/31/2025; 50% on 12/31/2026, subject to continued employment |
| Performance-Based RSUs (2022) – Results | 2/15/2022 | 14,539 target shares | 75% TSR vs 2022 peer group; 25% strategic objectives | Earned at 250% of target based on above-75th percentile TSR and committee evaluation | 50% vested on 12/31/2024; 50% scheduled to vest on 12/31/2025 |
Grant-date fair value detail (2024 CFO):
- Time-based RSUs: $337K; Performance RSUs (TSR, expected at target): $771K; Maximum TSR scenario (if achieved): $1,927K; 2021 subjective vesting component recognized in 2024: $141K .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Total beneficial ownership (shares and OP Units), as of 3/21/2025 | 147,392; less than 1% of outstanding (based on 187,780,310 shares and OP Units) |
| Unvested RSUs at 12/31/2024 | 49,301; fair value ~$1.542 million (at $31.28/share) |
| Unearned performance RSUs at 12/31/2024 (expected level) | 93,670; fair value ~$2.930 million (at $31.28/share) |
| 2024 shares acquired on vesting | 40,695; value realized $1,231K |
| Stock ownership guidelines | 3x base salary for non-PEO NEOs; 6x for CEO; 5-year compliance window |
| Guideline compliance | All NEOs satisfy minimum ownership requirements |
| Anti-hedging/pledging | Hedging prohibited; pledging prohibited for directors/executives; no short sales; no shares pledged, except margin accounts may utilize borrowing secured by held securities |
| Clawback | Dodd-Frank/NYSE-compliant incentive compensation recovery policy for material restatements |
Upcoming vesting supply (potentially relevant to trading windows and selling pressure):
- Time-based RSUs: annual tranches on each anniversary of Jan 18 for 2022, 2023, 2024 grants while outstanding .
- Performance RSUs: half of 2022 award scheduled 12/31/2025; half of 2023 expected 12/31/2025 and 12/31/2026; 2024 expected 12/31/2026 and 12/31/2027, subject to performance and continued employment .
Employment Terms
| Term | Detail |
|---|---|
| Current roles | EVP, CFO & Treasurer since 8/10/2020; Corporate Secretary since 3/30/2022 |
| Employment agreement | Amended and restated on 10/3/2024; initial 4-year term; auto one-year renewals unless notice given |
| Restrictive covenants | Non-compete and non-solicit generally end one year post-termination |
| Severance (without cause / good reason) | 1x base salary + average prior 3-year bonus; pro-rata bonus; 12 months COBRA reimbursement; vesting of awards granted after 10/3/2024; installments over 12 months |
| Change-in-control treatment | Double trigger only; if termination in CIC period: 2x base salary + target bonus; installments over 24 months; pro-rata bonus; 12 months COBRA; vesting of awards granted after 10/3/2024 |
| Equity awards CIC | No single-trigger acceleration; continued on substantially equivalent terms; otherwise “double trigger” acceleration applies |
Potential payments as of 12/31/2024 (USD thousands):
| Scenario | Cash Severance | Accelerated Vesting of RSUs | Health Benefits | Total |
|---|---|---|---|---|
| Death or Disability | $970 | $5,447 | $22 | $6,439 |
| Termination without Cause or Resignation for Good Reason | $2,207 | $5,447 | $22 | $7,676 |
| Termination in Connection with a Change in Control | $2,340 | $3,887 | $22 | $6,249 |
Compensation Structure Analysis
- Mix shift and alignment: CFO’s total equity award increased to $830K in 2024 (from $700K in 2023), with 60% performance-based, reflecting retention and alignment; 2024 design moved to 100% objective TSR for PBRSUs, eliminating prior subjective component in LTIP, strengthening pay-for-performance rigor .
- Cash incentive leverage: CFO maximum bonus opportunity raised to 200% of base (from 175%), maintaining competitiveness with peers and retention while preserving strong metric-based structure .
- No shareholder-unfriendly features: No tax gross-ups; no single-trigger CIC vesting; limited perquisites; hedging/pledging prohibited; clawback policy in place .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay received approximately 98% approval; the compensation committee made no changes in response, citing alignment and strong support .
Performance & Track Record
- Company execution under Patten’s finance leadership: record gross investments ($1.2B at 8.0% cash yields), conservative leverage (4.6x net debt/annualized EBITDAre), $837.9M equity raised (follow-on and ATM) and $450M term loan maturing 2030; broad investor engagement (180+ meetings, 9 conferences) .
- TSR since IPO: EPRT’s TSR has been the highest vs its compensation peer group through 12/31/2024; 2024 value of $100 investment reached $156.77 vs peer group $98.85 .
- Annual bonus outcome reflects these achievements: CFO earned 149% of target .
Equity Ownership & Alignment
| Ownership Element | Detail |
|---|---|
| Beneficial ownership | 147,392 shares/OP Units; <1% of outstanding |
| Ownership policy | 3x base salary requirement for NEOs; all NEOs comply; 50% of granted stock retained until guidelines met |
| Anti-hedging/pledging | Prohibitions in place; no pledging by executives; margin accounts may use borrowing secured by held securities |
Employment Contracts, Severance, and Change-of-Control Economics
- Double-trigger CIC protection only; severance multiples 1x (normal) and 2x (CIC) salary+bonus for CFO; equity vesting treatment tied to grant dates and performance periods; health benefits via COBRA reimbursement .
- Term length and auto-renewal provide stability; 1-year non-compete/non-solicit post-termination mitigates immediate transition risk .
Risk Indicators & Red Flags
- No related-party transactions in 2024; no perquisites; no tax gross-ups; hedging/pledging prohibited; compensation risk assessment concluded programs not reasonably likely to cause material adverse effect .
- Stock ownership and clawback policies reinforce alignment and governance .
Compensation Peer Group (2024)
- Peer set refined for size, business model, and geography; used to inform pay levels and design (not targeted to a specific percentile); CFO base approximates peer median .
- TSR peer group (distinct) used for PBRSU performance evaluation includes net-lease and comparable REITs (ADC, BNL, EPR, FCPT, GET, GNL, NNN, NTST, O, SAFE, STAG, WPC) .
Performance Compensation Details (Metric Table)
| Metric | Weight (CFO) | 2024 Threshold | 2024 Target | 2024 High | 2024 Actual |
|---|---|---|---|---|---|
| AFFO per Share | 25% | $1.71 | $1.73 | $1.75 | $1.74 |
| Gross Investments | 20% | $900M | $1.05B | $1.20B | $1.20B |
| Net Debt / Annualized Adjusted EBITDAre | 25% | 5.0x | 4.8x | 4.6x | 4.6x |
| ESG Score | 5% | 1.00 | 3.00 | 5.00 | 4.50 |
| Individual (Qualitative) | 25% | — | — | — | Capital markets, liquidity, investor engagement |
Investment Implications
- Alignment and retention: Structure emphasizes at-risk pay (149% of target bonus) and multi-year PBRSUs entirely tied to relative TSR, signaling strong performance linkage and investor alignment; ownership policy compliance and anti-hedging/pledging reduce misalignment risk .
- Near-term supply/pressure: Multiple upcoming RSU vests (annual time-based tranches and PBRSU halves at 12/31/2025–2027) may introduce episodic selling pressure around trading windows; governance policies and ownership guidelines temper excessive sales .
- Change-of-control economics: Double-trigger only and measured severance multiples (1x/2x) limit windfalls, preserving discipline and lowering event risk to shareholders compared to single-trigger designs .
- Pay governance quality: 98% say-on-pay approval, clawback, no tax gross-ups, and independent peer benchmarking support compensation credibility; continued strong TSR and operational execution under Patten’s finance leadership are positives for capital discipline and growth .
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