Mark Lammas
About Mark Lammas
Mark T. Lammas is President and Treasurer of Hudson Pacific Properties (HPP), previously serving as Chief Operating Officer and Chief Financial Officer. He joined HPP’s predecessor in September 2009 and prior roles include Executive Vice President at Maguire Properties and attorney at Cox, Castle & Nicholson. He holds a J.D. from UC Berkeley School of Law and a B.A. from UC Berkeley, and serves on UC Berkeley’s Political Economy Advisory Board; age 57 per HPP’s latest proxy. Recent pay‑for‑performance outcomes reflect negative multi‑year TSR modifiers reducing or zeroing relative‑TSR components of performance units (2021 program reduced operational payouts by 40% with 0% TSR; 2022 program similarly reduced operational payouts by 40% with 0% TSR), indicating alignment but headwinds for shareholder returns.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Maguire Properties, Inc. | General Counsel; later SVP (1998–2005) and EVP (2006–2009) | 1998–2009 | Directed major capital markets transactions (equity offerings, financings), institutional partner liaison, covenant compliance, accurate public disclosures |
| Cox, Castle & Nicholson LLP | Attorney | Pre‑1998 | Represented developers, institutional investors and pension funds in acquisitions, financing, investing, structuring/restructuring |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| UC Berkeley Political Economy Advisory Board | Member | Not disclosed | Academic advisory engagement; network visibility |
Fixed Compensation
- 2024 base salary: $762,000; bonus opportunity percentages unchanged vs 2023 (threshold 78%, target 130%, max 195%) .
- No formulaic base salary increases for NEOs in 2024; Compensation Committee reviewed market and internal equity .
Summary Compensation (Mark T. Lammas)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 762,000 | 762,000 | 762,000 |
| Bonus ($) | 93,169 | 108,966 | 198,120 |
| Stock Awards ($) | 2,215,837 | 2,829,428 | 9,435,745 |
| Non‑Equity Incentive Plan ($) | 372,674 | 421,005 | 1,040,131 |
| All Other Compensation ($) | 8,804 | 9,646 | 11,579 |
| Total ($) | 3,452,484 | 4,131,045 | 11,447,575 |
Note: Committee disclosure separately shows 2023 annual cash bonus paid of $1,059,943 (partly elected in fully vested LTIP Units), which differs from SCT line‑items due to program structure and elections.
Performance Compensation
2024 Plan‑Based Awards (granted 1/1/2024)
| Award | Grant Date | Shares/Units | Fair Value ($) | Vesting |
|---|---|---|---|---|
| Annual LTIP Units (time‑based) | Jan 1, 2024 | 445,292 | 3,299,614 | 5 equal annual installments on Jan 1, 2025–2029; plus 3‑year post‑vest holding |
| Performance Units (market/price‑based) | Jan 1, 2024 | Threshold 222,646; Target 445,293; Max 890,585 | 6,136,131 (Monte Carlo) | Earnable beginning 1/1/2026 through 12/31/2030; vest 60% on 1/1/2027, 20% on 1/1/2028, 20% on 1/1/2029; 2‑year post‑vest holding |
2023 Performance Units (Operational metrics with TSR modifier)
| Metric | Weight | Threshold | Target | Maximum | Actual (12/31/2023) | % Earned (of max) |
|---|---|---|---|---|---|---|
| Leasing Volume | 40% | 1,395,000 sf | 1,550,000 sf | 1,705,000 sf | 1,698,447 sf | 39.2% |
| Net Debt / Annual Gross Asset Value | 30% | 38% | 37% | 36% | 37.9% | 8.2% |
| G&A / Consolidated Gross Assets | 30% | 0.66% | 0.61% | 0.56% | 0.59% | 20.7% |
| Total Operational Earned | 100% | — | — | — | — | 68.0% (pre‑TSR modifier) |
| Relative TSR Modifier | — | — | — | — | FTSE NAREIT Equity Office Index vs HPP | Reduced by up to 40% |
| Status | — | — | — | — | As of 12/31/2023, total payout 49.8% of max including 27% reduction from TSR; final determination at 12/31/2025 | 49.8% |
Design notes:
- NEOs voluntarily eliminated 2023 relative‑TSR units; Operational units subject to relative‑TSR modifier (up to −40%) and include a debt metric to reflect macro headwinds.
2022 and 2021 Performance Unit Outcomes (TSR alignment)
- 2022 program: Operational component “earned” at 193.1% for 2022; 3‑year relative TSR component earned 0%, and operational payouts reduced by 40% due to absolute TSR of −76.3% over three years.
- 2021 program: Relative TSR earned 0%, operational payouts reduced by 40% due to 3‑year absolute TSR of −55.5%.
Annual Cash Bonus Program
- 2024: 80% tied to pre‑established corporate goals; FFO per share metric reinstated with quarterly and annual calibration and cap at target if full‑year target not met; increased weighting on operational/financial goals; 20% discretionary factors.
- 2023: Excluded FFO due to studio strikes; 80% corporate goals; relative same‑store office NOI growth and occupied percentage; ESG rigor increased.
Equity Ownership & Alignment
Beneficial Ownership
| As of | Shares/Units Beneficially Owned | % of Outstanding Common Stock | Notes |
|---|---|---|---|
| Mar 22, 2023 | 462,130 | * (below 1%) | Includes common units exchangeable; total common shares outstanding 140,897,681 |
| Mar 22, 2024 | 689,294 | * (below 1%) | Common shares outstanding 141,144,592 |
| 2025 proxy (date as filed) | 917,188 | * (below 1%) | Beneficial ownership list for directors/NEOs |
- Stock ownership guidelines: NEOs required to hold ≥3× base salary; as of Jan 1, 2025, all NEOs except CFO met requirements (Lammas in compliance).
- Anti‑hedging/anti‑pledging policy prohibits hedging and pledging; all executives in compliance (no pledges).
Vested vs. Unvested (Year‑End 2024 and 2024 Vesting Activity)
| Category | Detail |
|---|---|
| 2024 vesting realized | 204,460 shares acquired on vesting; $1,392,821 value realized (LTIP Units). No options outstanding/exercised. |
| Unvested as of 12/31/2024 | LTIP Units: 119,904 (2023 grant) and 445,292 (2024 grant); market values $363,309 and $1,349,235 (at $3.03/share). Performance Units: 291,666 (2023 grant, target) and 222,646 (2024 grant, target); market/payout values $883,748 and $674,617. |
| Vesting schedules | 2023 LTIPs vest in 3 equal installments on Jan 1, 2024/2025/2026; 2024 LTIPs vest in 5 equal installments on Jan 1, 2025–2029; Performance Units (2023) three‑year performance period ending 12/31/2025; Performance Units (2024) earnable 2026–2030, with time‑based vesting 60%/20%/20% in 2027–2029 and 2‑year post‑vest hold. |
| Options | None held in 2023 or 2024. |
| Post‑vest holding | Mandatory three‑year holding for time‑based LTIP awards; two‑year holding for earned Performance Units. |
Deferred Compensation Elections
- Elected to receive 50% of annual cash bonus in fully vested LTIP Units for 2022 and 2023 (reduces immediate cash, increases equity exposure).
Employment Terms
- New employment agreements effective January 1, 2025; initial term five years, automatic one‑year renewal unless terminated; customary confidentiality and non‑solicitation provisions.
- Reporting lines: Lammas reports to CEO (Mr. Coleman).
- Annual discretionary cash performance bonus eligibility; participation in typical benefit plans.
Severance and Change‑in‑Control Economics (Lammas)
| Scenario | Cash Severance | Health Benefits | Equity Treatment | Other | Total (as disclosed) |
|---|---|---|---|---|---|
| Termination without Cause / Good Reason (no CIC) | 2× (base salary + average bonus) | Up to 18 months | Accelerated vesting of time‑based awards | — | $6,262,748 |
| Termination without Cause / Good Reason within 2 years after CIC | 3× (base salary + average bonus) | Up to 18 months | Same as above; plus pro‑rated time‑based equity value (if termination by 12/31/2025, equity value equals half of 2024 LTIP award) | — | $8,020,562 |
| Death/Disability | 1× (base + average bonus) | — | Equity acceleration | Life insurance $500,000 | $3,207,125 (death) / $2,707,125 (disability) |
| CIC with no termination | Awards vest in full if not assumed/substituted by successor | — | Equity acceleration as applicable | — | $994,581 (market/payout value for Lammas) |
- Change‑in‑control window lengthened to two years for Lammas (was one year), effective Jan 1, 2025.
- Clawback policy covering Section 16 officers; recovery of erroneously paid incentive compensation, applicable to time‑vesting and performance‑vesting equity (adopted Oct 2023; updated per NYSE listing standards).
- Anti‑hedging/anti‑pledging: strict prohibition; all executives compliant.
Compensation Structure Analysis
- Equity‑heavy mix and extended vesting/holding periods indicate strong alignment and discourage short‑term selling; no options (thus no strike‑price driven exercise pressure).
- 2023 LTI structure reduced relative‑TSR grants and added debt metric and TSR modifier to operational units; payout tracking at 49.8% of maximum at 12/31/2023, reflecting sector headwinds and disciplined design.
- 2024 performance units feature rigorous stock‑price hurdles and back‑ended, multi‑year vesting (earnable 2026–2030; vest in 2027–2029), tightening alignment with longer‑term value creation.
- Base pay held flat; bonus scorecards emphasize FFO per share and operational metrics in 2024, reinstating per‑share earnings discipline after strike disruptions.
Risk Indicators & Red Flags
- Multi‑year negative TSR outcomes leading to 0% relative‑TSR earnouts and 40% reductions on operational components (2021 and 2022 programs) signal continued performance headwinds.
- CIC economics are meaningful (up to ~$8.0M total), but double‑trigger structure and pro‑rated equity treatment mitigate windfall risk and preserve alignment.
- Hedging/pledging prohibited; ownership guidelines met (Lammas in compliance), reducing alignment concerns.
Equity Ownership & Alignment Table (Unvested Detail at FY‑end 2024)
| Type | Units | Market/Payout Value ($) | Vesting/Notes |
|---|---|---|---|
| LTIP Units (2023 grant) | 119,904 | 363,309 (at $3.03) | Vest Jan 1, 2024–2026; 3‑yr post‑vest hold |
| LTIP Units (2024 grant) | 445,292 | 1,349,235 (at $3.03) | Vest Jan 1, 2025–2029; 3‑yr post‑vest hold |
| Performance Units (2023) | 291,666 (target) | 883,748 | Earned at end of 3‑yr period (12/31/2025) after TSR modifier |
| Performance Units (2024) | 222,646 (target) | 674,617 | Earnable 2026–2030; vest 2027–2029; 2‑yr post‑vest hold |
Employment & Contract Snapshot
| Term | Provision | Details |
|---|---|---|
| Agreement Effective Date | Jan 1, 2025 | New employment agreement |
| Initial Term & Renewal | 5 years; auto one‑year renewal | Unless timely notice given |
| Severance (no CIC) | 2× salary+avg bonus; health benefits 18 months | Accelerated vesting of time‑based awards |
| Severance (CIC double‑trigger) | 3× salary+avg bonus; health benefits 18 months | Pro‑rated time‑based equity (if terminate by 12/31/2025, equity value = half of 2024 LTIP award); accelerated vesting |
| Clawback | Dodd‑Frank/NYSE‑compliant | Applies to cash and equity incentives, recovery of erroneous pay |
| Hedging/Pledging | Prohibited | All executives compliant |
| Non‑Compete | Not disclosed | Agreements include confidentiality and non‑solicit |
Performance & Track Record
- Executive mix and design emphasize long‑term equity; 2021–2023 program outcomes show disciplined link to TSR and operational performance, with relative‑TSR components earning 0% and operational modifiers reducing payouts amid sector headwinds.
- 2024 scorecard reintroduces FFO per share; signals management priority on per‑share earnings and operational rigor despite lingering strike impacts.
Compensation Committee & Governance Notes
- Strong governance practices: majority at‑risk pay, mandatory post‑vest holding, anti‑hedging/pledging, robust clawback, and significant ownership requirements (3× salary for NEOs).
- Historical say‑on‑pay: ~89% approval in 2022.
Investment Implications
- Alignment: Extended vesting and mandatory holding periods, prohibition on hedging/pledging, and ownership guideline compliance suggest high alignment and low near‑term selling pressure despite substantial vesting in 2025–2029 (time‑based LTIP) and 2027–2029 (earned PUs).
- Pay‑for‑performance: Relative‑TSR zero payouts and operational reductions (−40%) in recent cycles highlight disciplined design; 2024 price‑hurdle PUs create convex exposure to share price recovery but only earn beginning 2026, pointing to long‑dated incentives rather than short‑term triggers.
- Retention/CIC: Double‑trigger CIC with 3× cash and pro‑rated equity is meaningful but structured to avoid single‑trigger windfalls; new 2025 agreements extend retention runway (5‑year term with auto renewal), reducing transition risk.
- Trading signals: 2024 realized vesting ($1.39M) and 2025–2029 scheduled LTIP vesting are subject to 3‑year post‑vest holds; absence of options eliminates strike‑driven exercise/sale pressure. Monitor relative‑TSR outcome at 12/31/2025 for 2023 PU vesting and any CIC developments that could accelerate awards.