Scott H. Carter
About Scott H. Carter
Executive Vice President, General Counsel and Secretary of Franklin Street Properties (FSP), age 53, serving as General Counsel since February 2008; joined FSP in October 2005 after practicing at Nixon Peabody LLP (real estate syndication, acquisitions and finance). Education: B.B.A. in Finance and Marketing and J.D., University of Miami; admitted to practice law in Massachusetts . FSP’s recent performance context: revenues fell from $165.6M (2022) to $145.7M (2023) to $120.1M (2024) while net loss was $(52.7)M in 2024; cumulative value of a $100 investment in FSP was $40.20 (2022), $38.59 (2023), and $28.18 (2024); net debt declined to $207.6M in 2024 from $277.1M in 2023 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| FSP | Executive Vice President, General Counsel and Secretary | Feb 2008–present | Leads all legal affairs for FSP and affiliates, supporting asset sales, financings, governance, and risk oversight . |
| FSP | Senior Vice President and In‑house Counsel | Oct 2005–Feb 2008 | Built internal legal function as company expanded; supported transactions and compliance . |
| Nixon Peabody LLP | Associate Attorney (Real Estate) | 1999–2005 | Focused on real estate syndication, acquisitions, and finance—skills directly applicable to REIT transactional execution . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $254,368 | $264,486 | $272,558 |
| Cash Bonus ($) | $404,454 | $399,500 | $319,600 |
| 401(k) Match ($) | $6,000 | $6,000 | $6,000 |
| Total ($) | $664,822 | $669,986 | $598,158 |
Key design details:
- Executives receive base salary, discretionary cash bonus, and 401(k) match; FSP does not offer stock options, restricted stock, deferred compensation, non‑equity incentive plan compensation, or perquisites .
- Base salaries for executives other than the CEO increased ~3% effective Jan 15, 2024; CEO did not receive a raise; cash bonuses for 2024 were cut ~20% versus 2023 to reflect stock performance and macro conditions and reduce G&A .
Performance Compensation
Executive bonuses are discretionary with no preset formula or weights; the Compensation Committee considers corporate and individual performance using subjective criteria. For 2024, the seven most important measures were net debt, debt repaid, gross proceeds from property dispositions, leasing, FFO, TSR, and estimated NAV; no weights or targets were assigned .
| Metric (2024) | Weighting | Target | Actual | Payout impact | Vesting |
|---|---|---|---|---|---|
| Net debt | Subjective | Not disclosed | $207.6M at 12/31/24 | Supported lower bonus vs 2023 | N/A (cash) |
| Debt repaid | Subjective | Not disclosed | ~$155M repaid in 2024 | Supported lower but positive bonus | N/A |
| Gross proceeds from dispositions | Subjective | Not disclosed | ~$100M in 2024 | Considered in bonus cut | N/A |
| Leasing activity | Subjective | Not disclosed | ~616K sq ft leased; avg term 6.3 years | Considered | N/A |
| FFO | Subjective | Not disclosed | $13.3M (2024) | Considered | N/A |
| Total Shareholder Return (TSR) | Subjective | Not disclosed | $28.18 value of $100 (2024) | Contributed to bonus reduction | N/A |
| Estimated NAV | Subjective | Not disclosed | Not disclosed | Considered | N/A |
Scott H. Carter’s cash bonus payouts: $404,454 (2022), $399,500 (2023), $319,600 (2024) reflecting discretionary assessment and 2024 reduction versus 2023 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 3,550 shares (includes 550 jointly with spouse) . |
| Ownership as % of shares outstanding | <1% (103,566,715 shares outstanding as of 3/4/2025) . |
| Vested vs unvested shares | Not applicable; no executive stock awards since 2005 . |
| Stock options | None outstanding; no exercisable or unexercisable options company‑wide . |
| Pledging | No pledging disclosed for Scott; anti‑hedging policy prohibits short sales and puts/calls on company securities . |
| Ownership guidelines | CEO must hold 6x salary; no stock ownership requirement for other executives . |
Security ownership table shows multiple significant investors; Scott’s holding is de minimis versus float, indicating limited “skin‑in‑the‑game” alignment relative to equity incentives seen at peers .
Employment Terms
| Term | Detail |
|---|---|
| Employment start date | Joined FSP Oct 2005; General Counsel since Feb 2008 . |
| Employment agreements | None; executives are at‑will (no employment agreements) . |
| Severance | No severance absent change‑in‑control . |
| Change‑in‑control (CIC) program | Single‑trigger retention payment upon closing of CIC equal to 3 years’ base salary plus a “bonus opportunity” equal to 3 years’ base salary; paid within 30 days of closing; subject to potential tax‑related reduction . |
| Scott’s CIC payout | $1,635,348 if CIC closed on 12/31/2024 (3× salary + 3× bonus opportunity based on salary at closing) . |
| CIC discretionary pool | Up to 1% of market cap minus retention payments; at 12/31/2024, retention exceeded 1%, leaving $0 for discretionary awards . |
| Clawback | Policy compliant with NYSE American; Compensation Committee oversees recovery policies . |
| Non‑compete / Non‑solicit | Not disclosed in proxy/10‑K; no employment contracts . |
Performance & Track Record (Company context during his tenure)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenues ($000) | $165,615 | $145,707 | $120,112 |
| Net Income (Loss) ($000) | $1,094 | $(48,110) | $(52,723) |
| Funds From Operations (FFO) ($000) | $41,343 | $29,964 | $13,286 |
| Net Debt ($000) | $406,368 | $277,120 | $207,649 |
| TSR – $100 investment value | $40.20 | $38.59 | $28.18 |
Additional 2024 operating notes: ~616K sq ft leased (weighted average term 6.3 years; average GAAP base rents $30.06/sf; TIs $26.06/sf; commissions $9.72/sf; four months free rent); owned/consolidated portfolio 67.5% leased at year‑end; dispositions generated ~$100M gross proceeds; debt repaid ~$155M .
Governance, Related Parties, and Committees (context)
- Family relationships: Scott is son of CEO/Chairman George J. Carter and brother of President & CIO Jeffrey B. Carter; compensation for both sons disclosed in NEO table .
- Compensation Committee chaired by Milton P. Wilkins Jr.; compensation decisions are discretionary and benchmarked with NAREIT surveys and prior consultant review (FPL Associates, 2019) .
- Anti‑hedging policy prohibits short sales and derivatives on FSP securities .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay approvals exceeded 93% in 2021–2023; Board highlights strong support; annual say‑on‑pay votes continue .
Expertise & Qualifications
- Legal credentials: B.B.A. and J.D. (University of Miami); Massachusetts bar admission .
- Functional expertise: REIT legal management, real estate transactions, corporate governance, disclosure and risk oversight .
- Industry experience: Over 19 years at FSP’s legal function; prior large‑firm real estate practice .
Investment Implications
- Pay‑for‑performance: Cash‑only incentives with subjective metrics align to deleveraging and dispositions but lack explicit performance curves or equity linkages; 2024 bonus reduced ~20% versus 2023 amid weak TSR and revenue declines .
- Retention and sale bias: Single‑trigger CIC payout ($1.64M for Scott at 12/31/24) could create incentives favorable to consummating change‑in‑control transactions irrespective of post‑deal employment; CIC discretionary pool was effectively zero at 2024 year‑end due to retention amounts exceeding 1% of market cap .
- Alignment risk: Minimal personal shareholding (3,550 shares; <1% of outstanding) and absence of equity awards reduce long‑term alignment and can limit insider selling pressure from vesting events; anti‑hedging policy mitigates some alignment risks .
- Governance red flags: Family relationships at top executive ranks (CEO, President/CIO, and General Counsel) elevate related‑party optics; however, related‑party transactions are subject to audit committee policy review; compensation remains broadly supported in say‑on‑pay (>93%) .
- Operational backdrop: Ongoing revenue pressure, portfolio vacancies, and debt covenants (including dividend limitations and rate step‑ups if aggregate debt >$200M as of 3/31/2025) are key performance constraints that influence incentive decisions and potential trading signals around disposals and deleveraging pace .