Joe Margolis
About Joe Margolis
Joseph D. Margolis (age 64) is Chief Executive Officer of Extra Space Storage Inc. (EXR), serving as CEO since January 1, 2017 and as a director; he previously served as EXR’s EVP & Chief Investment Officer (2015–2016) and earlier was an EXR director (2005–2015; rejoined the board May 18, 2017). He holds a B.A. from Harvard College and a J.D. from Columbia Law School, with a career spanning real estate investment, capital markets, portfolio management, and legal roles at Prudential and private real estate firms . Under his leadership, EXR was the only publicly traded self‑storage REIT to deliver positive FFO growth in 2024, and management emphasizes Core FFO, relative TSR and disciplined capital deployment as primary performance levers . Company context: EXR highlights a 20‑year total shareholder return of 2,437% since IPO (industry-leading among storage peers) and continued positive revenue/NOI/FFO growth leadership in 2024 despite normalization and supply headwinds .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Extra Space Storage | EVP & Chief Investment Officer | Jul 2015 – Dec 2016 | Led investments/capital allocation prior to CEO role |
| Penzance Properties | Senior Managing Director & Partner | 2011 – Jul 2015 | Vertically integrated owner/operator; leadership in investments and development |
| Arsenal Real Estate Funds | Co‑founding Partner | 2004 – 2011 | Private real estate investment management; co‑founded and led platform |
| Prudential Real Estate Investors | Senior roles incl. Portfolio Mgmt, Capital Markets, General Counsel | 1992 – 2004 | Portfolio and capital markets leadership; legal oversight |
| The Prudential Insurance Co. of America | In‑house real estate counsel | 1988 – 1992 | Real estate legal support |
| Nutter, McClennen & Fish | Real estate associate | 1986 – 1988 | Legal practice (real estate) |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Invitation Homes (public REIT) | Director | Current | Public company board service |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $900,000 | $900,000 | $900,000 |
| Target Annual Incentive ($) | — | — | $1,575,000 (175% of base) |
| Actual Annual Incentive Paid ($) | $1,890,000 | $1,393,875 | $1,563,188 |
Notes:
- 2024 total annual incentive payout was 99% of target, reflecting 103.5% on the financial (Core FFO) component and 95% on the composite corporate goals component .
Performance Compensation
Annual Incentive Plan – 2024
| Metric Group | Weighting | Target | Actual | Payout | Vesting/Payment Timing |
|---|---|---|---|---|---|
| Core FFO per share | 50% | $8.09 | $8.14 (adjusted) | 103.5% of financial component | Paid in cash for 2024 performance |
| Corporate goals (Growth, LSI synergies, People, Balance Sheet, Discretion) | 50% | Composite goals set Feb 2024 | Composite achievement 95% (e.g., $2.1B gross investments vs $900M target; TPA +367 gross stores; $182M fees/insurance; $83.4M LSI synergies; engagement score 75; maintained S&P BBB+; Moody’s watch positive; 3 bond deals) | 95% of corporate component | Paid in cash for 2024 performance |
Details of corporate goal weights and outcomes:
- Growth (20%): Approved $2.1B gross investments; +367 gross TPM stores; $182M fees/insurance
- LSI Merger Synergies (30%): $83.4M actual synergies (vs $100M run‑rate target)
- People (15%): Engagement score 75; succession plans in place
- Balance Sheet (15%): Maintained S&P BBB+; Moody’s to credit watch positive; covenants in compliance; 3 bonds
- Committee Discretion (20%): Considered overall execution
Long-Term Incentives – 2024 Grants (CEO)
| Award Type | Grant Date | Target/Granted | Vesting | Performance Metrics | Grant Date Fair Value ($) |
|---|---|---|---|---|---|
| Restricted Stock | 3/1/2024 | 15,346 shares | 25% per year over 4 years | Time-based | $2,200,003 |
| PSUs (Target) | 3/1/2024 | 46,038 units | Cliff vest after 3-year period ending 12/31/2026 | 50% Relative TSR vs FTSE NAREIT Equity Index (0–200% payout); 50% 3‑yr Core FFO/share growth (0–200%) | Total PSU FV $7,449,639 (TSR portion valued via Monte Carlo; FFO portion at target) |
PSU metric scales:
- Relative TSR payout scale: 25th percentile = 50%; 50th = 100%; 75th+ = 200% .
- Core FFO/share three‑year target set by Comp Committee; 0–200% payout range; linear interpolation .
2022 PSU Final Results (Performance Period 1/1/2022–12/31/2024)
| Metric | Weight | Threshold | Target | Max | Result | Achievement |
|---|---|---|---|---|---|---|
| Relative TSR vs MSCI US REIT Index | 50% | <25th pct | 50th pct | ≥75th pct | 32nd pct | 63.8% (31.9% weighted) |
| Cumulative Core FFO/share | 50% | ≤$23.01 | $25.57 | ≥$28.13 | $24.68 | 65.0% (32.5% weighted) |
| Total Payout | 64.4% of target |
CEO vesting outcome: 18,777 shares from 2022 PSUs vested (64.4% of 29,157 target); cash dividend equivalents paid: $356,012 .
Program design and risk:
- No stock options are granted as part of LTI; program uses restricted stock and PSUs only .
- Clawback policy adopted per SEC/NYSE to recoup erroneously awarded incentive‑based compensation upon a restatement (3‑year lookback) .
Equity Ownership & Alignment
| Item | Value |
|---|---|
| Beneficial Ownership (as of 3/24/2025) | 233,095 shares; includes direct/indirect holdings via trusts/LLCs (see footnote) |
| Restricted Stock held (as of 3/24/2025) | 36,910 shares |
| Unvested Restricted Stock (as of 12/31/2024) | 31,574 shares |
| PSU Units Outstanding at Target (12/31/2024) | 80,637 units (2023 + 2024 grants) |
| Ownership as % of Outstanding | Less than 1% |
| Stock Ownership Guideline (CEO) | 5x base salary; 5‑year compliance window |
| Guideline Compliance | Executives have met or have time remaining to comply per policy |
| Hedging / Pledging | Hedging prohibited; pledging allowed only above ownership requirements and with Compensation Committee approval |
Footnote: CEO’s beneficial holdings include 34,760 shares in J Margolis & K Margolis TTEE; 97,260 shares in Cove Hollow Lane I, LLC (Margolis Family Delaware Trust I); 16,690 shares in Cove Hollow Lane II, LLC (Margolis Family Delaware Trust II). Mr. Margolis controls investment decisions for Trust I; spouse for Trust II . No pledges disclosed for Mr. Margolis; company discloses pledged shares for the Chairman in footnote (4) (not Mr. Margolis) .
Vesting runway (supply watch):
- Restricted Stock vesting schedule at 12/31/2024: 2,720 vested 2/16/2025; 4,859 vest ratably on 2/14/2025 & 2/14/2026; 8,649 vest ratably on 3/1/2025, 3/1/2026, 3/1/2027; 15,346 vest ratably annually starting 3/1/2025 (4‑year schedule) .
- PSUs from 2023 and 2024 cycles cliff‑vest at 12/31/2025 and 12/31/2026 subject to performance; dividend equivalents paid in cash at settlement .
Employment Terms
| Term | Detail |
|---|---|
| Employment agreements | None for executive officers |
| Change‑in‑Control (CIC) plan (Cash/Benefits) | If terminated without cause or resigns for good reason within 12 months post‑CIC: 2x base salary + 2x greater of prior‑year bonus or 3‑yr average bonus (lump sum), 2 years of health benefits (lump sum value), 6 months outplacement, full vesting of time‑based equity and any non‑qualified pension/deferred comp |
| CIC treatment for PSUs | On CIC date, PSUs vest at greater of target or performance through CIC date (Core FFO measured against prorated objectives) |
| Death/Disability | Prorated target PSUs vest; RSAs fully vest on death; disability vesting per committee determination |
| Non‑compete / Non‑solicit / Garden leave | Not disclosed |
| Clawback | Policy to recover erroneously awarded incentive compensation upon restatement (SEC/NYSE compliant) |
| Tax gross‑ups | Company states “No tax gross ups” as a compensation feature; however, severance table footnote notes a potential tax gross‑up on health benefits amounts “as described in the plan” (flag for reconciliation) |
Illustrative amounts as of 12/31/2024 (CEO):
- Involuntary termination following CIC: Cash $5,031,375; RSA acceleration $4,723,470; PSU acceleration (at target) $12,063,295; Benefits $30,268 .
- On CIC (no termination): PSU acceleration (at target/actual) $12,063,295 .
Board Governance and Roles
- Role: CEO and director; not Chairman (Chairman is Kenneth M. Woolley). EXR separates Chairman and CEO; board determined this structure allows CEO to focus on operations while Chairman leads independent oversight .
- Independence: 9 of 10 directors are independent; Audit, Compensation, and Nominating/Governance/CSR committees are fully independent per NYSE/SEC rules .
- Committees: CEO is not listed as a member of Audit, Compensation, or Nominating/Governance/CSR committees; those are independent and chaired by independent directors .
- Lead Independent Director: Active role and responsibilities defined (agendas, executive sessions, advisor retention, assessments) .
- Attendance: In 2024, the board held five meetings; each director attended ≥90% of board and applicable committee meetings .
- Director compensation: As an employee, Margolis received no additional director compensation in 2024 .
Director Compensation (Board context)
- Standard non‑employee director compensation effective May 23, 2024: $90,000 cash retainer; $200,000 annual equity grant (1‑year vest); committee chair and lead independent director supplements; Chairman cash retainer $340,000 .
- Margolis (CEO) received $0 incremental director fees (employee) .
Compensation Peer Group (Benchmarking)
The Compensation Committee benchmarks against a 18‑company comparator group spanning REITs and select large‑cap operators (e.g., AvalonBay, Equity Residential, Public Storage, CubeSmart, Digital Realty, Equinix, Realty Income, Invitation Homes, Simon, Welltower, Crown Castle, SBA Communications, Boston Properties, Essex, Sun Communities, Mid‑America Apartment Communities, Hilton, Chipotle). As of 12/31/2024, EXR’s enterprise value positioned near the median (48th percentile) of the group .
Say‑on‑Pay & Shareholder Feedback
At the 2024 Annual Meeting, say‑on‑pay received 97% approval; the committee viewed this as affirmation of the program and maintained its approach, while continuing regular investor engagement .
Performance & Track Record
| Metric | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Value of $100 Investment (TSR) | $113.57 | $228.23 | $153.35 | $174.45 | $177.32 |
| Core FFO per Share | $5.28 | $6.91 | $8.44 | $8.10 | $8.12 |
| Net Income ($000s) | $517,582 | $877,758 | $921,156 | $850,453 | $900,232 |
2024 operating and strategic highlights (company context): Only storage REIT with positive FFO growth; $900M+ capital deployed (own/JVs), 238 net TPM additions (largest non‑merger year), cumulative $2.4B bridge loans originated; brand unification of Life Storage to Extra Space .
Risk Indicators & Red Flags
- Hedging banned; pledging only above ownership requirements with committee approval; no pledges disclosed for Margolis (Chairman has pledged shares) .
- Clawback policy in place per SEC/NYSE .
- No employment agreements (reduces entrenchment risk) .
- Potential tax gross‑up on health benefit severance amounts noted in footnote despite “no tax gross ups” program feature—warrants monitoring in future plan updates .
- Compensation Committee interlocks: none in 2024 .
Additional Policies Relevant to Trading Signals
- Insider trading policy includes 90‑day cooling‑off periods for Rule 10b5‑1 plans and prohibition on overlapping/single‑trade plans .
- Executive and director stock ownership guidelines (CEO 5x salary) enhance alignment; directors also subject to ownership guidelines (5x cash retainer) .
Investment Implications
- Alignment strong: 93% of CEO compensation is variable and equity‑heavy, tied to Core FFO and relative TSR, with robust ownership guidelines and clawback—constructive for long‑term value alignment .
- Supply watch: Material equity vesting cadence (annual RSA tranches and PSU settlements in early 2026–2027) could create periodic selling pressure; 2022 PSU payout at 64.4% underscores performance hurdles are meaningful, not lax .
- Retention/change‑of‑control: No employment agreement reduces entrenchment; double‑trigger cash severance mitigates flight risk in a CIC, while single‑trigger PSU vesting on CIC could increase deal‑related dilution—monitor in M&A scenarios .
- Governance quality: Separate Chair/CEO, independent committees, lead independent director, and high say‑on‑pay support (97%) reduce governance risk; hedging prohibited and pledging tightly controlled (no pledges disclosed for CEO) .
- Compensation trend: No options; shift toward RSAs/PSUs persists, lowering risk versus options; continued use of Core FFO and relative TSR aligns with REIT cash flow/market performance drivers .