Mark J. Parrell
About Mark J. Parrell
Mark J. Parrell (age 58) is President & CEO of Equity Residential (EQR) and a trustee since 2019; he became CEO in January 2019 after serving as President since September 2018 and CFO from 2007–2018, having joined EQR’s finance group in 1999. He holds a B.B.A. from the University of Michigan and a J.D. from Georgetown University Law Center . EQR reports a 20.7% total shareholder return in 2024, driven by portfolio optimization, NOI growth, and balance sheet actions ; executive compensation outcomes reflect pay-for-performance via a 141.20% payout for the 2022–2024 LTI plan and 133.22% 2024 annual bonus/equity payout for Parrell, aligned to TSR, leverage, Normalized FFO, and operating KPIs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Equity Residential | President & Chief Executive Officer | Jan 2019–present | Led strategic capital allocation (acquisitions in expansion markets, dispositions of older assets), balance sheet optimization, technology/analytics talent upgrades; 2024 AIP metrics exceeded or met targets in NOI, Normalized FFO, ESG, though G&A/PM costs missed . |
| Equity Residential | President | Sep 2018–Jan 2019 | Transition to CEO role; continued strategic and operational oversight . |
| Equity Residential | EVP & Chief Financial Officer | 2007–2018 | Capital markets leadership; strengthened liquidity and financing profile . |
| Equity Residential | SVP & Treasurer | 2005–2007 | Treasury and financing responsibilities . |
| Equity Residential | Finance roles | 1999–2005 | Progressive finance leadership . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| T. Rowe Price Mutual Funds | Independent Director | Jul 2023–present | Public fund board experience . |
| Real Estate Roundtable | Board Member | Current | Policy/industry engagement . |
| Nareit | Second Vice Chair; Executive Board of Governors | Current | Industry leadership . |
| Weiser Center for Real Estate, Univ. of Michigan | Advisory Board | Current | Academic/industry linkage . |
| Greater Chicago Food Depository | Director; Chair of Finance Committee | Current | Community leadership . |
| Brookdale Senior Living (NYSE: BKD) | Director | 2015–2017 | Public board experience . |
| Aviv REIT (NYSE: AVIV) | Director | 2013–2015 | Merged into Omega Healthcare . |
Fixed Compensation
- Base salary (2024): $900,000; unchanged vs 2023 .
- Target pay mix (2024): CEO target total compensation $10,350,000 consisting of salary $900,000; annual incentive targets of $2,025,000 cash bonus and $2,250,000 performance equity; LTI target $5,175,000 .
- No executive employment agreements; compensation guided by objective pay-for-performance philosophy .
Performance Compensation
2024 Annual Incentive Plan (AIP) – CEO Weighting, Targets, Results, Payouts
| Metric | Weight | Target | 2024 Actual | Payout vs Target | Vesting |
|---|---|---|---|---|---|
| Same Store NOI Growth | 25% | 1.50%–2.00% | 3.10% | 200.00% | Performance Equity cliff vests at 3 years; options vest ratably over 3 years . |
| Normalized FFO/Share | 25% | $3.84–$3.86 | $3.89 | 142.86% | See above . |
| Corporate Responsibility | 15% | 14 points | 17 points | 150.00% | See above . |
| Normalized G&A & PM Costs | 10% | $184.0–$185.0M | $189.4M | 0.00% | See above . |
| Individual Goals | 25% | Pre-set | Board assessed | 100.00% | N/A |
- CEO overall AIP achievement: 133.22% of target; Performance Bonus paid $2,697,705 and Performance Equity Grant $2,997,450 (granted Jan/Feb 2025) .
- AIP equity grant mechanics: Share Awards cliff vest 3 years; Option Awards vest in ~3 equal annual tranches; subject to continuous employment/retirement provisions .
Long-Term Incentive Plan (LTI)
- 2024 Grant (performance period 2024–2026): Metrics and weights:
- Relative TSR vs FTSE Nareit Equity Apartments Index (35%): Threshold −400 bps; Target 0 bps; Max +400 bps .
- Relative TSR vs FTSE Nareit Equity REIT Index (20%): Threshold −500 bps; Target 0 bps; Max +500 bps .
- Net Debt to Normalized EBITDAre (22.5%): Threshold 6.00x; Target 5.00x–4.00x; Max 3.00x .
- Normalized FFO/Share (22.5%): 2024 Target set at midpoint of guidance; annual scoring averaged across 3 years .
- CEO 2024 LTI target/structure: Target 86,683 LTI units (threshold 43,342; max 173,366) reflecting $5,174,975 grant-date fair value; also Feb 1, 2024 Performance Equity Grants of 33,480 shares and 58,335 options at $60.96 strike .
- 2022–2024 LTI final results (settled): Overall 141.20% of target; component achievements: Nareit Apt Index +135.96 bps (133.99% of target); Nareit Equity Index −255.76 bps (74.42%); Net Debt/EBITDAre 4.41x (200%); 3-year Normalized FFO average 152.98%; CEO received 68,655 Share Awards vs 48,623 target .
Equity Ownership & Alignment
- Beneficial ownership (as of Mar 31, 2025): 500,535 common share equivalents; options exercisable in 60 days: 285,411; <1% of shares outstanding .
- Ownership guidelines: CEO required to hold 6x base salary; executives and trustees met requirements or within compliance window in 2024 .
- Prohibitions: Hedging, short sales, pledging/margin prohibited for trustees and executives; pledged shares by insiders = zero .
- Outstanding awards (12/31/2024): Unvested Share Awards 87,260 (market value $6,261,778); unearned/unvested LTI Awards 283,335 (illustrative value $20,332,120 based on period-end methodology); options include grants with strikes $60.76 (exp. 2/2/27), $60.33 (2/1/28), $67.48 (2/12/31), $66.59 (2/15/33), $60.96 (2/1/34), with specified exercisable/unexercisable balances .
- 2024 realized equity activity: Shares vested 70,031 for the CEO; no option exercises disclosed for the CEO in 2024 .
Employment Terms
- No employment agreement; company uses plan-based severance and CIC agreements .
- Executive Severance Plan (non-CIC): If involuntary termination without Cause or resignation for Good Reason:
- CEO receives lump-sum pro-rata AIP (bonus and performance equity) for year of termination; cash severance equal to 2.0x (base salary + target bonus) paid over 24 months; health benefits continuation for 24 months; immediate vesting of unvested equity awards (LTI handled via pro-rata cash valuation methodology); 24-month non-compete/non-solicitation; release required .
- Change in Control agreements (double-trigger):
- CEO cash severance: 2.25x (base salary + average cash Performance Bonus over last 3 years); pro-rata bonus and LTI through termination date; 2.25 years of benefits continuation; accelerated vesting of unvested equity upon qualifying termination at/within 24 months post-CIC; Parrell has a Section 280G excise tax gross-up (company will not enter new agreements with gross-ups) .
- Retirement/Death/Disability: Accelerated or continued vesting provisions for Share/Option/LTI awards subject to age/service and “Rule of 70” criteria; none of the NEOs are “age 62 eligible employees” for LTI acceleration by retirement .
Board Governance (Trustee Service, Committees, Independence)
- Trustee since 2019; serves on the Executive Committee (members: Chairman Neithercut (Chair), Parrell, Neal (retiring at 2025 meeting), Sterrett) .
- Board leadership: Separate Chairman (David J. Neithercut) and CEO roles; Lead Independent Trustee (Stephen E. Sterrett) with defined duties; 80% of 2025 nominees are independent .
- Meetings/attendance: 6 Board meetings in 2024 with 98% average attendance; no nominee attended <93%; executive sessions held regularly (five non-employee sessions and one independent-only session in 2024) .
- Committee structure entirely independent (Audit, Compensation, Corporate Governance); chair and member rosters disclosed .
- Trustee compensation (Parrell excluded as CEO): Effective June 2024, non-employee trustees receive $90,000 cash retainer and $210,000 equity (share/option mix), with additional chair/member fees; annual equity vests in one year .
- Ownership guidelines for trustees: 5x cash retainer .
Compensation Structure Analysis
- Strong at-risk pay: ~91% of CEO target compensation is performance-based; significant portion in 3-year LTI with relative TSR, leverage, and Normalized FFO metrics; includes corporate responsibility goals in AIP .
- 2024 outcomes: AIP paid above target (133.22%) on NOI, FFO, and ESG over-delivery, but with zero payout on normalized G&A/PM costs due to unanticipated litigation expenses; demonstrates both upside/downside sensitivity .
- LTI variability: 2018–2020, 2019–2021, 2020–2022, 2021–2023 LTI payouts varied widely (61.23%, 85.74%, 25.83%, 95.56%), evidencing rigorous performance design; 2022–2024 paid 141.20% reflecting superior leverage and Normalized FFO achievements .
- Governance protections: Clawback policy aligned to NYSE/SEC rules; double-trigger CIC vesting; no repricing of options; hedging/pledging prohibited .
- Benchmarking: Independent consultant (Ferguson Partners); CEO/NEO target pay aligned with market median REIT peer group .
Say-on-Pay & Shareholder Feedback
- Advisory vote support: ~90% approval at 2024 meeting for 2023 program; since 2015, average ~93% with no year below 90% .
- Ongoing investor engagement: Management and, at times, trustees engaged with holders representing nearly 40% of shares over the last twelve months (to early 2025); Investor Day Feb 2025 hosted ~80 in-person and 115 webcast participants .
Equity Ownership & Operating Performance (Context for Pay-for-Performance)
| Metric | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|---|---|---|
| Revenues ($) | 2,700,691,000* | 2,571,705,000* | 2,463,997,000* | 2,735,180,000* | 2,873,964,000* | 2,980,108,000* |
| EBITDA ($) | 1,739,535,000* | 1,606,944,000* | 1,458,545,000* | 1,695,280,000* | 1,768,536,000* | 1,825,835,000* |
| Values retrieved from S&P Global.* |
Risk Indicators & Red Flags
- Excise tax gross-up: CEO retains a 280G excise tax gross-up under the CIC agreement (legacy provision; company will not enter new agreements with gross-ups) .
- No hedging/pledging, no option repricing, no employment agreement; clawback in place .
- Related-party transactions: Audit Committee oversees policy; prior related-party HQ lease with former Chairman’s entity was reviewed for arm’s-length terms; not specific to Parrell .
Compensation Committee Analysis
- Members (2024/2025): Mary Kay Haben (Chair), Tahsinul Zia Huque, Mark S. Shapiro, Stephen E. Sterrett; fully independent .
- Independent consultant: Ferguson Partners; 2024/2025 analysis concluded CEO and team target pay aligned to market median; no conflicts of interest .
Investment Implications
- Alignment: High portion of CEO pay is at-risk and tied to TSR, deleveraging (Net Debt/EBITDAre), Normalized FFO, and operating/ESG metrics, with demonstrated variability (including zero payout on cost control in 2024) — supportive of pay-performance integrity .
- Supply/vesting dynamics: 3-year cliff vesting on performance equity and LTI can create periodic settlement-related supply; CEO had 70,031 shares vest in 2024 and meaningful unvested awards outstanding — monitor Form 4s around vest dates for selling pressure .
- Retention and change risk: Robust severance and CIC protections (double-trigger; 2.0x/2.25x multiples; non-compete 24 months) reduce flight risk but elevate potential change-in-control cash costs; legacy 280G gross-up is a governance overhang specific to CEO .
- Governance quality: Separate Chair/CEO, strong independent board/committees, prohibitions on hedging/pledging, clawback, and consistently strong say-on-pay support suggest low governance friction risk .
Board Service History, Committee Roles, and Dual-Role Implications
- Parrell serves as CEO and trustee (not Chair); Board maintains separate Chair and CEO with a Lead Independent Trustee, mitigating dual-role/independence concerns .
- Committee role: Member, Executive Committee .
- Board operations: 98% average attendance in 2024; regular executive sessions support independent oversight .
- Director compensation: CEO/trustee is excluded from director fee program; non-employee trustee retainer structure disclosed .