Scott Schaeffer
About Scott Schaeffer
Scott F. Schaeffer, age 62, is Chairman of the Board (since January 2011) and Chief Executive Officer (since February 2013) of Independence Realty Trust (IRT). He holds a B.S. in Commerce from Rider University and previously served as CEO and Chair at RAIT Financial Trust and in senior roles at Resource America and Resource Properties . Under his leadership, IRT emphasized deleveraging and portfolio optimization in 2024, delivering CFFO per share of $1.16, same-store NOI growth of 3.2%, dividends of $0.64/share, and improved Net Debt-to-Adjusted EBITDA to 5.9x; IRT also achieved investment-grade ratings from Fitch and S&P in 2024 . For long-term alignment, 2022 PSUs paid at 117% of target based on relative TSR (3-year TSR of -16% at the 58th percentile of the NAREIT Apartment Index) and committee assessment, indicating incentive payout sensitivity to shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RAIT Financial Trust (public REIT) | Chief Executive Officer; Chair | CEO 2009–2016; Chair 2010–2016 | Led REIT through post-crisis period; experience in public REIT governance and capital markets . |
| RAIT Financial Trust | Various executive roles | 2000–2009 | Built multi-year executive experience before CEO role . |
| Resource America, Inc. | Vice Chair; Director; Senior management roles | Vice Chair 1998–2000; Director until 2002; Senior roles 1995–1998 | Specialty finance leadership; governance exposure and strategy . |
| Resource Properties, Inc. (Resource America subsidiary) | President | 1992–2000 | Operational leadership of real estate subsidiary . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| – | – | – | No current external public company directorships disclosed for Mr. Schaeffer in the 2025 proxy . |
Board Service and Governance
- Board roles: Chairman since 2011; non-independent director; dual role as Chair and CEO. Board maintains a Lead Independent Director (currently Dr. DeForest B. Soaries as of Feb 5, 2025) and holds regular executive sessions of independent directors to mitigate dual-role concerns .
- Committee memberships: Mr. Schaeffer is not listed as a member of audit, compensation, nominating, investment, or risk committees; those are fully independent (chairs and members noted) .
- Independence: 8 of 10 director nominees are independent under NYSE rules, excluding Mr. Schaeffer and the President/CFO; Board cites governance processes, Lead Independent Director, and committee structure as safeguards while combining Chair/CEO .
- Attendance: All then-serving directors attended at least 75% of Board and committee meetings in 2024 .
Fixed Compensation
| Year | Base Salary ($) | YoY Change | Notes |
|---|---|---|---|
| 2024 | 750,000 | 7% | CEO base set with reference to peer REITs and experience/tenure . |
| 2023 | 700,000 | – | |
| 2022 | 700,000 | – |
Performance Compensation
Annual Cash Bonus Design (2024)
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual |
|---|---|---|---|---|---|
| CFFO per share | 40% | $1.12 | $1.14 | $1.16 | $1.16 |
| Same-Store NOI Growth | 20% | 1.0% | 2.5% | 4.0% | 3.2% |
| Operating Margin | 15% | 61.8% | 62.3% | 62.8% | 63.1% |
| G&A % of Revenue | 15% | 3.0% | 2.9% | 2.8% | 2.9% |
| Net Debt-to-Adj. EBITDA | 10% | 6.15x | 6.00x | 5.85x | 5.95x |
- Target opportunity ranges: CEO threshold/target/max = 100%/179%/250% of base salary; 2024 bonus payout for CEO totaled $1,745,869 (130% of target), comprised of $1,277,119 objective payout plus $468,750 individual component at max (Board evaluation score 4.6/5) .
2024 Equity Awards
| Component | Weight | Design | Vesting |
|---|---|---|---|
| PSUs | 75% | 70% relative 3-year TSR vs FTSE NAREIT Apartment Index (30th/50th/75th percentile = 50%/100%/150% of target); 30% individual performance (committee discretion) . | 50% at certification after 3-year period ending 12/31/2026; 50% on 12/31/2027, subject to service; accelerated in specified terminations per award terms . |
| RSUs | 25% | Time-based alignment/retention . | 25% per year, typically on March 1 anniversaries (see outstanding awards schedule) . |
2024 CEO Grant Sizing and Counts
| Grant | Target Value ($) | Calculation Basis | Instruments | Counts |
|---|---|---|---|---|
| Total Target Equity | 2,732,598 | 20-day VWAP $14.99; grant date 2/26/2024 | RSUs | 45,573 |
| PSUs (target) | 136,721 |
Realization/Outcomes Checkpoint
- 2022 PSUs earned at 117% of target; TSR component at 117% (3-year TSR -16% at 58th percentile) and subjective portion set at 117% given performance context .
Equity Ownership & Alignment
Beneficial Ownership and Guidelines
- Shares beneficially owned: 733,976 as of March 17, 2025; shares outstanding 231,116,976 (approx. 0.3% ownership) .
- Ownership guidelines: CEO must hold 5x base salary in common shares; all executive officers are in compliance or within the six-year compliance window .
- Hedging/pledging: Hedging and pledging of company stock prohibited by Insider Trading Policy; no derivatives, collars, or margin permitted .
- 10b5-1 plans: Permitted with strict cooling-off and window/timing controls; adoption/amendment only in open windows, 90-day cooling-off for directors/executives (max 120 days), with disclosures as required .
Unvested/Outstanding Awards (12/31/2024)
| Type | Unvested Units | Key Vesting Notes |
|---|---|---|
| RSUs | 10,240; 14,213; 28,090; 45,573 | 10,240 vested 3/1/2025; 14,213 half vested 3/1/2025 and half 3/1/2026; 28,090 vests in equal thirds on 3/1/2025, 3/1/2026, 3/1/2027; 45,573 vests in equal fourths on 3/1/2025–3/1/2028 . |
| PSUs (2023 grant) | 112,360 (target) | Performance period through 12/31/2025; 50% service-vest 12/31/2026 if earned; 0–150% payout range . |
| PSUs (2024 grant) | 136,721 (target) | Performance period through 12/31/2026; 50% service-vest 12/31/2027 if earned; 0–150% payout range . |
| PSUs (2022 earned) | 49,742 (50% tranche) | Earned at 117%; remaining 50% service-vests 12/31/2025 . |
Note: Mr. Schaeffer is retirement eligible (Rule of 70). Upon qualifying retirement (notice and non-compete), RSUs are not forfeited and PSUs remain outstanding to vest based on actual full-period performance; time-vesting on earned PSUs is waived, with shares delivered on scheduled time-vesting dates .
Employment Terms
Severance and Change-in-Control Economics (as of 12/31/2024)
| Scenario | Estimated Value ($) |
|---|---|
| Termination without cause / good reason / non-renewal (with release) | 13,289,819 |
| Voluntary termination (retirement treatment reflected) | 7,875,270 |
| Disability | 9,217,770 |
| Death | 9,217,770 |
| For cause | — |
| Termination without cause / good reason / non-renewal after Change in Control (with release) | 15,083,293 |
Key terms:
- Cash severance multiple: CEO 2.25x (base salary + 3-year average annual cash bonus); pro-rata current-year bonus; 18 months COBRA-subsidized coverage; time-based equity vests; PSUs vest pro-rata based on performance through quarter-end, except retirement-eligible treatment for CEO (no pro-ration for open PSUs) .
- Double-trigger equity vesting on change in control maintained; no excise tax gross-ups (executives bear any Section 4999 excise tax) .
- Clawback policy effective Oct 2, 2023: mandatory recovery of erroneously awarded incentive compensation in the 3-year lookback after a restatement .
- Non-compete / non-solicit: Required for certain accelerated vesting and “retirement” treatment; non-compete duration up to three years for award treatment .
Compensation Structure Analysis
- Pay-for-performance alignment: 75% of equity in PSUs with 70% relative TSR and 30% committee discretion creates material alignment with shareholder returns; 2022 PSU payout at 117% with TSR at the 58th percentile supports sensitivity to relative performance .
- Annual bonus rigor: 75% formulaic with diversified metrics (CFFO/share, same-store NOI growth, operating margin, G&A efficiency, and leverage), limiting single-metric gaming and aligning with FFO/NOI-focused REIT investors .
- Shifts in mix/guarantees: No guarantees of minimum cash/equity payouts; prohibition on hedging/pledging; strong ownership guidelines (5x salary) enhance alignment .
- Vesting/retention dynamics: CEO’s retirement eligibility means awards are not forfeited at retirement (subject to non-compete and release), lowering near-term forfeiture risk but maintaining performance testing for PSUs; this reduces forced-retention pressure while preserving performance alignment .
Performance & Track Record
- 2024 strategic/financial execution: CFFO/share $1.16; same-store NOI +3.2%; operating margin 63.1%; Net Debt/Adj. EBITDA 5.95x vs 6.00x target; dividend $0.64/share; achieved investment-grade ratings (Fitch ‘BBB’ in March 2024; S&P ‘BBB’ in Oct 2024) .
- Portfolio actions: Completed a 10-property portfolio optimization and deleveraging plan (gross sales $525.3M; $517.1M debt repaid) and executed capital recycling including a Tampa acquisition via 1031 exchange; 1,671 renovations in 2024 with historical ROI of 16.8% on total renovation costs .
- Capital markets: Raised ~$418M via equity and unsecured notes, including ATM forward settlements and an underwritten offering to fund acquisitions and deleveraging .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval exceeded 97% of votes cast; prior frequency vote (2020) favored annual (98.2%) .
- Ongoing investor engagement: 222 meetings with investors/analysts in 2024, with active conference participation and property tours .
Compensation Committee and Peer Benchmarking
- Compensation Committee entirely independent; chair Ned W. Brines (since Feb 2024); advisor Semler Brossy engaged as independent consultant (no conflicts) .
- Peer group (2024): American Assets Trust, American Homes 4 Rent, Camden Property Trust, Easterly Government Properties, Elme Communities, Equity Lifestyle, Rexford Industrial, STAG Industrial, Terreno, UDR; AIRC removed after 2024 acquisition .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; no excise tax gross-ups; clawback in place; double trigger for CIC vesting; Board elected out of MUTA and has no poison pill—generally shareholder-friendly .
- Related-party transactions: Company maintains Audit Committee oversight and ethics hotline; review of related-party transactions is part of Audit Committee function .
- Insider selling pressure: RSU tranches vest annually on March 1 and 50% of earned PSUs settle at performance certification; trading is subject to policy controls and 10b5-1 plans with cooling-off, reducing opportunistic timing risk .
Employment Terms (Detailed Table)
| Term | Provision |
|---|---|
| Severance multiple | CEO: 2.25x (base + average bonus); plus pro-rata current-year bonus and 18 months COBRA subsidy . |
| Equity on severance | RSUs vest; PSUs vest pro-rata based on performance to quarter-end (except retirement-eligible treatment for CEO where PSUs are not pro-rated) . |
| CIC vesting | Double trigger for equity vesting upon change in control . |
| Restrictive covenants | Non-compete and non-solicit required for certain accelerated vesting and retirement treatment; non-compete up to 3 years . |
| Clawback | Mandatory recovery policy (3-year lookback) effective Oct 2, 2023 . |
| Hedging/pledging | Prohibited . |
Investment Implications
- Alignment: High proportion of at-risk pay (PSUs 75% of equity; TSR-heavy) and robust ownership/anti-hedging/anti-pledging policies align CEO incentives with shareholders; strong say-on-pay support reduces governance overhang .
- Retention vs turnover risk: CEO is retirement eligible with favorable post-retirement equity treatment (subject to non-compete), modestly elevating transition risk but preserving PSU performance conditioning and deferring share delivery—watch for succession planning signals and 8-Ks under Item 5.02 .
- Potential selling pressure: Scheduled annual RSU vesting (March 1) and PSU settlements post-certification could create periodic supply, but policy-driven 10b5-1 usage and cooling-off periods mitigate timing risk; monitor Form 4 filings around March/first quarter .
- Performance orientation: Annual bonus metrics emphasize FFO/NOI, operating margin efficiency, and leverage, consistent with REIT value drivers; 2024 over-target payouts reflect meeting/ exceeding key thresholds (CFFO/share at max, leverage below target), supporting pay-for-performance narrative .