Theodore J. Klinck
About Theodore J. Klinck
Theodore J. (“Ted”) Klinck is President & Chief Executive Officer of Highwoods Properties, Inc. and has served as a director since September 2019; he also chairs the Board’s Investment Committee and serves ex-officio on the Executive Committee . HIW’s pay-versus-performance disclosure shows absolute total stockholder return of 43.0% in 2024, with net income of $104.3 million and core FFO per share of $3.57, underpinning a 2024 “compensation actually paid” uplift tied to equity value changes . He is not a director of any other publicly-traded company and holds external roles with First Tee – Triangle (Chair), the Raleigh Chamber Board, and NAREIT’s Executive Board . Say-on-pay support was strong at 93.8% in 2024, indicating investor alignment with HIW’s incentive design .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Highwoods Properties, Inc. | President & COO | Nov 2018–Sep 2019 | Led operations through late-cycle and post-pandemic period; elevated to CEO |
| Highwoods Properties, Inc. | EVP & Chief Operating & Investment Officer | Sep 2015–Nov 2018 | Oversaw operations and investment activity during portfolio optimization |
| Highwoods Properties, Inc. | SVP & Chief Investment Officer | Mar 2012–Aug 2015 | Led capital allocation, acquisitions/dispositions |
| Goddard Investment Group | Principal & Chief Investment Officer | Pre–Mar 2012 | Private real estate investing leadership |
| Morgan Stanley Real Estate Investments | Managing Director | Pre–Mar 2012 | Institutional real estate capital markets and investment management |
| Highwoods Properties, Inc. | CEO & Director | Since Sep 2019 | Executive leadership and Board stewardship |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| First Tee – Triangle | Chair | N/A | Community leadership |
| Raleigh Chamber Board | Member | N/A | Regional economic engagement |
| NAREIT Executive Board | Member | N/A | Industry policy and best practices |
| Public company boards | None | — | No other public company directorships |
Fixed Compensation
Multi-year disclosed compensation:
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 732,692 | 755,769 | 757,500 |
| Stock Awards ($) | 2,596,634 | 2,540,103 | 2,777,629 |
| Non-Equity Incentive ($) | 1,480,605 | 1,215,545 | 1,369,848 |
| All Other Compensation ($) | 145,429 | 191,462 | 242,390 |
| Total Compensation ($) | 4,955,360 | 4,702,879 | 5,147,367 |
2025 base salary in effect (as of Mar 23, 2025): $776,438, reflecting a 2.5% merit adjustment along with other officers .
2024 perquisites detail:
| Component | Amount ($) |
|---|---|
| 401(k) Match | 15,525 |
| Dividends on Time-Based RS | 212,821 |
| Financial Consulting Services | 6,244 |
| Vehicle Allowance | 7,800 |
| Total All Other Compensation | 242,390 |
Performance Compensation
Annual cash incentive program (equally weighted metrics):
| Metric | Threshold (50%) | Target (100%) | Max (200%) | Actual | Payout Factor |
|---|---|---|---|---|---|
| FFO per Share | $3.48 | $3.55 | $3.69 | $3.62 | 150% |
| Net Operating Income Growth | (2.50)% | (1.00)% | 2.50% | 0.67% | 148% |
| Average Occupancy | 86.00% | 88.50% | 91.00% | 87.99% | 90% |
| Average Performance Factor | — | — | — | — | 129% |
2024 target annual incentive percentage for CEO: 140% of base salary ; actual non-equity payout received: $1,369,848 . 2025 metric design:
| Metric | Threshold (50%) | Target (100%) | Max (200%) |
|---|---|---|---|
| FFO per Share | $3.28 | $3.35 | $3.55 |
| NOI Growth | (3.00)% | (1.50)% | 4.00% |
| Average Occupancy | 85.00% | 87.00% | 90.00% |
Long-term equity incentives:
- Target annual equity incentive percentage (CEO): 350% of salary; 2024 mix: 50% time-based RS, 50% total return-based RS .
- Total return-based RS calibration: | Grant Year | Starting Price | Minimum (50%) | Target (100%) | Max (150%) | |---|---:|---:|---:|---:| | 2024 | $24.45 | 12.5% TR | 25.0% TR | 37.5% TR | | 2025 | $29.13 | 12.5% TR | 25.0% TR | 37.5% TR |
2024 grants (CEO):
| Award Type | Threshold (#) | Target (#) | Max (#) | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Total Return-Based RS | 27,886 | 55,772 | 83,658 | 1,414,004 |
| Time-Based RS | — | 55,772 | — | 1,363,625 |
Stock vested in 2024:
| Shares Vested | Value Realized ($) |
|---|---|
| 55,622 | 1,359,958 |
Design note: If HIW’s three-year absolute total return ranks in the 50th percentile or greater vs FTSE NAREIT Equity Office Index, at least 100% of total return-based RS vests; dividends for CEO’s TR-based RS accumulate and are payable only if shares vest .
Equity Ownership & Alignment
- Beneficial ownership: 576,274 HIW shares (<1% of outstanding) .
- Exercisable options: 53,931 as of Mar 4, 2025 (tranches at $43.55 expiring 2/28/26 and $52.49 expiring 2/28/27) .
- Unvested time-based RS and target TR-based RS at year-end 2024: | Category | Shares | Value ($) | |---|---:|---:| | Time-Based RS (unvested) | 112,677 | 3,445,663 | | TR-Based RS (target unearned) | 133,476 | 4,081,696 |
Scheduled vesting (as disclosed):
| Year | Time-Based RS (shares) | TR-Based RS (shares) |
|---|---|---|
| 2026 | 33,369 | 47,296 (subject to performance) |
| 2027 | 25,767 | 55,772 (subject to performance) |
| 2028 | 13,943 | — |
Stock ownership and hedging/pledging policy:
- CEO ownership guideline: 6x base salary; compliance expected within five years; named executives generally may not sell shares or exercise in-the-money options unless in compliance .
- Hedging and pledging prohibited; since adoption in 2009, no named executives/directors have engaged in hedging; legacy pledge noted for retiring director G. Anderson (not the CEO) .
Potential selling pressure assessment:
- Significant multi-year RS vesting cadence (time-based annually, TR-based contingent) could create supply upon vesting, though disposition is constrained by ownership guideline compliance and anti-hedging/pledging policies .
Employment Terms
Employment agreements:
- None of the named executives, including the CEO, have employment contracts .
Change-in-control (CIC) equity and severance:
- Equity: RS vests upon a CIC unless awards are assumed or replaced with comparable awards; TR-based RS may vest pro rata upon death/disability/retirement per plan terms .
- Severance: Double-trigger agreements; if terminated without cause or resigns with “good reason” within 3 years post-CIC, immediate RS vesting plus cash equal to 2.99x a base amount (12x highest monthly salary in prior 12 months plus the greater of average cash bonus over prior 3 years or prior year bonus), plus a “stay bonus” equal to the same base amount; no excise tax gross-ups; automatic annual renewals unless notice given .
- CEO agreement term currently expires Sep 1, 2027 (auto-renewable) .
Estimated CIC benefits (as of Dec 31, 2024):
| Scenario | Cash Payment ($) | Benefits ($) | Vesting of Time-Based RS ($) | Vesting of TR-Based RS ($) |
|---|---|---|---|---|
| Termination in connection with CIC | 9,857,966 | 129,083 | 3,445,663 | 6,198,641 |
| CIC without termination | 2,127,348 | — | 3,445,663 | 6,198,641 |
Clawback:
- Company has an incentive compensation recoupment policy for restatements covering cash/equity incentives over the prior 3 years; amount for stock price/TSR-based awards determined via reasonable estimation; 2025 plan expressly subjects awards to recoupment .
Retirement plan:
- For eligible retirees (>=30 years’ service or >=55 years old with >=10 years): pro rata annual incentive for year of retirement; stock options/time-based RS continue vesting; TR-based RS continues vesting if performance satisfied; subject to advance notice and non-compete agreement; CEO currently eligible .
Board Governance
- Board leadership: Independent Chair (Carlos E. Evans); the Board believes Chair and CEO roles should remain separate .
- Committee roles (CEO): Investment Committee Chair; Executive Committee ex-officio .
- Independence: Majority of directors are independent; CEO is non-independent by role .
- Board activity and attendance: Seven Board meetings in 2024; each director attended at least 75% of Board and committee meetings; executive sessions held at each regular meeting .
- Compensation & Governance Committee: Independent (Chair T. Anderson; members Evans, Lloyd); engaged Pearl Meyer for executive pay reviews (2019, 2022, 2024); no interlocks .
Director Compensation (for context)
Non-employee director retainer/cash and equity framework (CEO is an employee director and not eligible for these director fees):
- 2024 cash retainer: $60,000; Chair premium $40,000; committee retainers with higher amounts for committee chairs; annual time-based RS grant of ~$90,000, vesting in one year .
Compensation Peer Group (benchmarking)
Peer group (public office REITs) and 2024 metrics:
| Company | TEV ($mm) | 2024 TSR |
|---|---|---|
| Highwoods Properties, Inc. | 6,619 | 43.0% |
| Brandywine Realty Trust | 3,225 | 17.2% |
| City Office REIT, Inc. | 970 | -2.7% |
| COPT Defense Properties | 5,937 | 26.1% |
| Cousins Properties Inc. | 7,795 | 32.6% |
| Hudson Pacific Properties, Inc. | 5,654 | -66.9% |
| Kilroy Realty Corp. | 9,508 | 7.7% |
| Piedmont Office Realty Trust, Inc. | 3,225 | 37.2% |
Compensation philosophy targets approximately the 50th percentile of the peer group for total cash compensation, adjusted for performance .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval: 93.8% of votes cast; 86.4 million shares voted FOR .
Risk Indicators & Red Flags
- Hedging/pledging: Prohibited by policy; none since 2009 among named executives/directors; legacy pledge by retiring director G. Anderson (not CEO) pre-policy remains; reduced to 400,000 shares .
- Option practices: No stock options granted since Q1 2017; outstanding options are already exercisable .
- Governance safeguards: Separation of Chair/CEO; annual Board self-evaluation; robust committee oversight .
Investment Implications
- Strong alignment features: High equity mix (350% target for CEO), multi-year RS vesting, TR-based performance calibration with percentile safeguard, ownership guidelines at 6x salary, and clawback policy reduce agency risk and encourage long-term TSR and FFO discipline .
- Near-term supply dynamics: Meaningful scheduled vesting through 2026–2028 and potential TR-based payouts could add share supply, but selling is curtailed by ownership guideline compliance and anti-hedging/pledging rules; monitor Form 4 activity around annual vesting windows .
- CIC economics: Double-trigger severance with 2.99x multiple and accelerated vesting create retention during strategic events; absence of tax gross-ups is shareholder-friendly; investors should price potential dilutive vesting under CIC scenarios in M&A models .
- Execution track: 2024 TSR of 43% with incentive payouts linked to FFO/NOI/occupancy demonstrates pay-for-performance mechanics; sustained performance vs peer group should drive vesting outcomes and realized pay levels .