David Smith
About David Smith
David Smith, age 44, is Chief Financial Officer and Treasurer of Innovative Industrial Properties (IIPR), appointed in March 2023. He holds a B.S. in Finance (honors) from the University of Wisconsin–La Crosse and brings two decades of REIT finance, capital markets, and investor relations experience spanning Fortress, Ventas, Aviv REIT, New Senior, and cannabis-focused private REITs (Treehouse, Aventine) . Under the current leadership team, IIPR reported 2024 revenue of $308.5M, net income attributable to common of $159.9M, and AFFO of $256.1M, with 96.6% portfolio occupancy and continued annual dividend growth; cumulative TSR since IPO through 12/31/24 is 389% .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Aventine Property Group (private REIT – cannabis) | EVP & CFO | Jan 2021–Mar 2023 | Led finance for cannabis-focused REIT after Treehouse spinoff; prior Treehouse CFO (Oct 2019–Dec 2020), bringing cannabis REIT domain expertise . |
| New Senior Investment Group (NYSE: SNR) | EVP & CFO | Jan 2019–Sep 2019 | CFO role following tenure at sponsor Fortress; focused on capital markets/IR, supporting REIT financial strategy . |
| Fortress Investment Group (Private Equity Group) | Managing Director; previously Vice President | Sep 2016–Mar 2019; Sep 2014–Sep 2016 | Led New Senior’s capital markets and investor relations activities while at sponsor level . |
| Aviv REIT (NYSE: AVIV) | Managing Director, Capital Markets & IR | Apr 2012–Aug 2014 | Capital markets and IR leadership in healthcare REIT segment . |
| Ventas (NYSE: VTR) | Finance/Capital Markets/IR roles | Nov 2006–Mar 2012 | Multiple finance and markets roles at a large-cap healthcare REIT . |
| A.G. Edwards (Real Estate Investment Banking) | Analyst/Associate (start of career) | Early career | Real estate IB foundation . |
External Roles
- No public company board service or external directorships disclosed for Mr. Smith in the proxy .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base salary ($) | $400,000 | $420,000 |
| Target annual bonus (% of salary) | Not disclosed | 140% |
| Actual annual incentive paid ($) | — (no non‑equity incentive reported) | $559,677 (paid Feb 2025) |
| Other cash bonus ($) | $600,000 (one-time bonus) | — |
Notes:
- 2024 annual cash incentive plan paid at 95% of target across NEOs based on weighted formulaic and qualitative outcomes .
Performance Compensation
2024 annual incentive design (CFO target = 140% of salary) with 50% formulaic company metrics and 50% individual/strategic assessment .
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout as % of Target |
|---|---|---|---|---|---|---|
| AFFO per diluted share | 12.5% | $8.35 | $8.79 | $9.23 | $8.98 | 122% (≈15% of total at weight) |
| New investments | 12.5% | $50M | $75M | $100M | $73.2M | 96% (≈12% at weight) |
| Line of credit capacity (12/31/24) | 12.5% | $30M | $45M | $60M | $87.5M | 150% (≈19% at weight) |
| Occupancy percentage (12/31/24) | 12.5% | 90% | 92% | 94% | 96.6% | 150% (≈19% at weight) |
| Individual/strategic goals | 50.0% | — | — | — | Below target due to late-2024 tenant default impact | ≈30% (weight) |
- Aggregate plan payout: 95% of target (CFO award reflected in SCT) .
- Long-term equity: In Jan 2024, Mr. Smith received time-vested RSUs vesting ratably over three years; no options; 2022 PSUs were fully forfeited at 12/31/24 (TSR underperformance vs comparators) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| 2024 equity grant | 10,893 RSUs granted Jan 17, 2024; grant-date FV $1,000,086; vesting on Jan 1 of 2025/2026/2027 in equal tranches . |
| Unvested equity at 12/31/24 | 19,613 RSUs unvested; market value $1,307,010 at $66.64/share . |
| Scheduled vesting | 7,991 RSUs on 1/1/2025; 7,991 on 1/1/2026; 3,631 on 1/1/2027 (continued service) . |
| Options outstanding | None; no options were outstanding or exercised in 2024 . |
| Dividends/DERs | Dividend equivalents paid on RSUs; included in compensation accounting . |
| Deferred compensation | Elected to defer settlement of RSUs; 2024 contribution (vested RSUs) $439,575; aggregate NQDC balance $290,550 at 12/31/24 . |
| Hedging/pledging | Company policy prohibits hedging and pledging; margin accounts also prohibited (alignment positive) . |
Employment Terms
| Component | Key terms |
|---|---|
| Role start date | Appointed CFO & Treasurer March 29, 2023 . |
| Agreements | Change-of-control agreement effective Mar 29, 2023; term through Dec 31, 2025 with automatic 3‑year renewals unless notice given . |
| Severance multiples | Qualifying Termination (no CoC): 2× (salary + average bonus, past 3 years) + 18 months health premiums; time-based equity pro‑rated; PSUs pro‑rated for achievement . Double-trigger within 2 years post‑CoC: same cash/benefits + full acceleration of time-based awards; PSUs at greater of target or actual . |
| Restrictive covenants | 1‑year non‑solicit of employees/prospects; confidentiality; post‑termination consulting up to 20 hours/month for 6 months . |
| Clawback | Formal NYSE/SEC-compliant clawback for incentive-based compensation tied to restated results . |
| No gross‑ups | No excise tax gross‑ups on change‑in‑control payments . |
Termination economics (as if terminated 12/31/2024):
| Scenario | Severance cash | Medical (18 mo) | Equity vest value | Total |
|---|---|---|---|---|
| Qualifying Termination (no CoC) | $1,999,677 | $57,005 | $912,836 (pro‑rata) | $2,969,518 |
| Qualifying Termination (within 2 yrs post‑CoC) | $1,999,677 | $57,005 | $1,307,010 (full) | $3,363,692 |
| Qualifying Retirement/Death/Disability | — | — | $1,307,010 (time-based full) | $1,307,010 |
Compensation Structure Analysis
- Pay mix/at-risk: For 2024, a large share of NEO total target direct compensation was variable; time-vested equity continues to be the primary LTI; 2022 PSUs did not vest, reducing realized pay (performance-sensitive) .
- Program changes: In response to 2024 say‑on‑pay (73% support), IIPR introduced a formulaic annual cash plan (50% company metrics/50% individual), improving pay‑for‑performance alignment; committee evaluating re‑introducing multi‑year PSUs for 2025+ .
- Benchmarking: No formal peer group due to unique cannabis REIT niche; target incentives reflect elevated regulatory/operational risks in the sector .
Investment Implications
- Alignment and supply overhang: Mr. Smith’s equity is predominantly time‑vested RSUs, with clear vesting dates through 2027; his election to defer RSU settlement lowers near‑term selling pressure despite annual vesting events (less immediate Form 4 sales signal) .
- Retention and CoC risk: Cash severance of 2× salary+bonus plus full equity acceleration on double‑trigger CoC ($3.36M modeled at 12/31/24) offers strong retention while keeping shareholder‑friendly features (no tax gross‑ups, clawback, no hedging/pledging) .
- Performance tie‑ins: Annual bonus emphasizes REIT fundamentals (AFFO/share, occupancy, liquidity, investment activity); 2024 payout at 95% demonstrates partial offset to industry headwinds, but qualitative downtick due to late-2024 tenant default shows downside sensitivity—a balanced incentive signal .
- Governance feedback loop: Management adjusted incentives after lower 2024 SOP vote and fully forfeited 2022 PSUs indicate genuine pay-for-performance characteristics; a shift to PSUs would further strengthen alignment with long-term TSR/AFFO outcomes .