W. Matthew Kelly
About W. Matthew Kelly
W. Matthew “Matt” Kelly, 52, is Chief Executive Officer and a trustee of JBG SMITH, roles he has held since the company’s 2017 formation. He previously was Managing Partner at The JBG Companies with executive committee and investment committee responsibilities, co‑founded ODAC Inc. (media software), and earlier worked in private equity (Thomas H. Lee Partners) and investment banking (Goldman Sachs). Kelly holds a BA from Dartmouth and an MBA from Harvard Business School . Under his leadership in 2024, Operating Portfolio NOI reached $287.2M vs. a $265.0M target, while the company executed $373.7M of asset sales/recaps, 324k SF of new office leasing, and leased 552 multifamily units at The Grace and Reva; the board applied negative discretion to the annual bonus pool given share price performance. Cumulative TSR from a $100 investment as of 12/31/19 stood at $47.23 for 2024, versus $76.95 for the FTSE Nareit Equity Office Index peer group .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| The JBG Companies | Managing Partner; member of Executive and Investment Committees | 2008–2017 (at JBG since Aug 2004 until formation) | Led day‑to‑day oversight of investment strategy and legacy funds’ investment/acquisition activity |
| ODAC Inc. | Co‑founder | March 2000–prior to Aug 2004 | Built media software company before joining JBG |
| Thomas H. Lee Partners | Analyst (private equity) | Not disclosed | Early-stage buyout/PE experience |
| Goldman Sachs & Co. | Analyst (investment banking) | Not disclosed | Transaction and capital markets experience |
External Roles
| Organization | Capacity | Years |
|---|---|---|
| Nareit Executive Board | Treasurer (current); Chair in 2024; Compensation Committee member | Current; 2024 (Chair) |
| Urban Institute | Trustee | Current |
| Smithsonian National Museum of Natural History | Board of Directors | Current |
| Greater Washington Partnership | Board of Directors | Current |
| MedStar Health, Washington Hospital Center | Board | Current |
| Real Estate Roundtable | Member | Current |
| Georgetown University, McDonough School (Steers Center) | Executive in Residence (academic post) | Not disclosed |
Fixed Compensation
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Base salary ($) | 750,000 | 750,000 | 750,000 |
| Target annual bonus (% of salary) | 100% | 100% | 100% |
| 2024 actual bonus awarded ($) | n/a | 922,500 (after 10% downward discretion) | n/a |
| 2024 bonus election | n/a | 100% taken in fully vested LTIP Units (redeemable after 2 years) | n/a |
Performance Compensation
2024 short‑term incentive plan (STIP) outcomes and weights (company-only metrics for executives):
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout |
|---|---|---|---|---|---|---|
| Operating Portfolio NOI ($M) | 30% | 255.0 | 265.0 | 275.0 | 287.2 | Maximum |
| Assets sold/recapitalized ($M) | 20% | 200.0 | 300.0 | 500.0 | 373.7 | Target+ |
| New office leases (000 SF) | 15% | 140 | 240 | 340 | 324 | Target+ |
| Lease-up: The Grace & Reva (units) | 5% | 375 | 425 | 475 | 552 | Maximum |
| Development objectives met (of 4) | 20% | 2 | 3 | 4 | 3 | Target |
| Sustainability scorecard (points) | 10% | 15 | 19 | 23 | 24 | Maximum |
| Total funding before discretion | 133% of target | Committee reduced to 123% of target |
2024 long‑term incentives (granted Jan 2, 2024):
| Award type | Units (#) | Grant-date fair value ($) | Key terms |
|---|---|---|---|
| Time‑Based LTIP Units | 217,797 | 3,499,998 | Vest 25% annually beginning Jan 2, 2025 (4‑year schedule) |
| AO LTIP Units (max at 125% target) | 923,482 (max) | 3,499,997 | 3‑yr performance; participation threshold = 110% of grant price ($18.93); vest 50% at certification then 50% on Jan 2, 2028; TSR modifier ±25% vs FTSE Nareit Office peers excl. ARE; 10‑yr term |
Additional 2024 equity actions:
- LTIP Unit “book‑up” modification (one‑time, May 30, 2024): reset income‑tax book‑up price to $13.84 for specified 2020–2023 LTIP Units held by NEOs; for Kelly, 338,621 units affected; accounting incremental fair value $495,580; added 2‑year holding requirement; company states no repricing and no change to participation thresholds or dilution .
Longer‑dated performance equity:
- 2022 AO LTIP Units: 3‑year period ended Jan 3, 2025; earned at 80% of maximum based on relative TSR; however, value realization depends on exceeding participation thresholds ($32.30 for 2022) .
- 2025 program changes (in response to 2024 say‑on‑pay): increased performance‑based portion to 60%; added 3‑year NOI‑based Performance LTIP Units (50% of total equity in 2025) with vesting in 2027 based on 2025–2027 results; reduced AO LTIP term to 5 years; 3‑year holding on time‑based units .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (common + OP + convertible LTIPs within 60 days) | 1,442,683 (≈1.7% of common shares; 1.5% of common+OP units) |
| Vested positions within 60 days (components) | 8,421 common; 382,004 OP Units; 1,052,258 vested LTIP Units (includes 274,009 LTIPs from prior bonus elections) |
| Unvested time‑based LTIP Units outstanding (select grants) | Jan 1, 2021: 25,676; Jul 29, 2021: 128,000; Jan 3, 2022: 54,824; Jan 3, 2023: 127,044; Jan 2, 2024: 217,797 |
| AO LTIP Units outstanding (target/max basis per grant) | 2022: 540,540 target (110% threshold $32.30; term to 2032) ; 2023: 643,431 target (threshold $20.83; term to 2033) ; 2024: 738,786 target (threshold $18.93; term to 2034) |
| Formation Units outstanding | 199,460 (participation threshold $37.10; fully vested) |
| Insider policy: hedging/pledging | Hedging and pledging prohibited for executive officers (including NEOs); hedging also prohibited for trustees |
| Ownership guidelines | CEO required to hold ≥6× base salary; 5‑year compliance window; status not individually disclosed |
| Liquidity constraints | LTIP Units received in lieu of cash bonus are fully vested but not redeemable for common shares until 2 years after grant |
Employment Terms
| Provision | Outside Change in Control | Within 2 years post‑Change in Control |
|---|---|---|
| Cash severance | 1× (base salary + target bonus) | 3× (base salary + target bonus) |
| Bonus for year of termination | Pro‑rata, based on actual performance | Pro‑rata, at target |
| Healthcare continuation | 18 months | 24 months |
| Equity | Time‑based awards vest; performance‑based vest pro‑rata for cycle in progress (if earned) | All outstanding unvested equity fully vests |
| Triggers | Termination without cause/for good reason (double trigger for CoC) | Termination without cause/for good reason (double trigger) |
| Non‑compete / Non‑solicit | 1 year non‑compete; 2 years non‑solicit | |
| Term / renewal | Auto‑renews annually unless 180‑day notice of non‑renewal; no notices outstanding | |
| Excise tax | No gross‑ups; “net‑better” cutback if applicable | |
| Clawback | Dodd‑Frank compliant incentive recovery policy |
Quantified scenario for Kelly (as of Dec 31, 2024):
| Component | Without Cause/Good Reason (no CoC) | Without Cause/Good Reason (within 2 yrs after CoC) |
|---|---|---|
| Cash severance ($) | 1,500,000 | 4,500,000 |
| Pro‑rata bonus ($) | 922,500 (actual for 2024 assumption) | 750,000 (target assumption) |
| Healthcare ($) | 31,558 | 42,077 |
| Accelerated time‑based LTIP value ($) | 8,504,851 | 8,504,851 |
| Accelerated performance‑based LTIP value ($) | 405,030 | 405,030 |
| Accelerated AO LTIP value ($) | — (below thresholds) | — (below thresholds) |
| If CoC with no termination (cash‑out per plan discretion) | — | 11,676,481 (settlement of awards) |
Board Governance
- Board service and independence: Kelly has served as trustee since 2017 and is not independent; he holds no committee memberships . The board has an Independent Chair (Robert A. Stewart) and nine of ten trustees are independent .
- Leadership structure: CEO and Chair roles are separated; independent trustees meet in executive session at each board meeting .
- Attendance: The board met four times in 2024; each trustee attended ≥75% of board/committee meetings; all ten trustees attended the 2024 annual meeting .
- Policy framework: Majority voting with resignation policy; proxy access; robust share ownership guidelines; clawback; no poison pill; opted out of certain Maryland anti‑takeover statutes .
Say‑on‑Pay & Shareholder Feedback
- 2024 advisory vote support was ~67% (a decline); the Compensation Committee responded by: reducing AO LTIP performance period from 10 to 5 years starting 2025; adding 3‑year NOI‑based performance LTIP; increasing performance‑based equity to 60% of annual award; adding 3‑year post‑vest holding on time‑based equity; and applying 10% negative discretion to 2024 STIP funding .
Compensation Committee & Peer Benchmarking
- Compensation Committee: Independent trustees Alan S. Forman (Chair), Alisa M. Mall, D. Ellen Shuman; met six times in 2024; retained independent consultant Ferguson Partners (approx. $167,500 fees; independence affirmed) .
- Peer group: 14 REITs selected on property type/size/market relevance; total capitalization median ~$5.5B; JBGS ~ $4.1B (13th percentile of peer set) .
Performance & Track Record (selected 2024 levers under Kelly)
- National Landing progress: Delivered The Grace and Reva (808 units) with 68%+ leased at year‑end; increased multifamily occupancy to 94.8%; executed 614k SF of office leases (share) with 6.5‑year WALT; majority to defense/tech tenants; robust prospect pipeline .
- Capital allocation: Repurchased 10.9M shares at ~$15.60 average in 2024; cumulative 56.8M shares (38%) repurchased since 2020 for $1.1B at ~$19.87 average; completed $373.7M of dispositions at 5.4% cap rate .
- Balance sheet: Addressed >$620M of debt; refinanced Grace/Reva; weighted average debt maturity 3.7 years (with by‑right extensions) at year‑end .
Risk Indicators & Red Flags
- Underwater performance options: 2022–2024 AO LTIPs had participation thresholds ($32.30; $20.83; $18.93) above 12/31/24 share price—limiting near‑term realizable gains and potentially pressuring future equity motivation until prices recover .
- LTIP “book‑up” modification: While disclosed as not a repricing and economics unchanged, the May 2024 tax book‑up reset (with added holding period) can be perceived as accommodative; investors should monitor future equity modifications .
- Hedging/pledging/related parties: Hedging and pledging prohibited for NEOs; related‑party management subcontract fees ($13.0M) disclosed for legacy funds and WHI Impact Pool .
Investment Implications
- Alignment: High equity mix (CEO elected 100% of 2024 bonus in equity; base salary unchanged since formation) and strict ownership/hedging policies support shareholder alignment; large unvested/underwater AO LTIPs reduce windfalls without performance .
- Retention and selling pressure: Multi‑year time‑based vesting ladders (2021–2024 grants) and 2‑year redemption delay on bonus LTIPs temper near‑term selling activity; AO LTIPs require price recovery to convert to value; ownership guidelines further constrain selling .
- Governance and pay risk: 2024 say‑on‑pay at ~67% is a caution; the 2025 redesign adds a three‑year NOI metric and increases performance‑linked equity, which should improve perceived pay‑for‑performance rigor if executed; monitor 2025–2027 NOI targets and vesting outcomes .
- Change‑in‑control economics: Double‑trigger 3× cash plus full equity acceleration is standard for REIT CEOs; scenario values are material if CoC occurs; however, AO LTIPs currently out‑of‑the‑money limit incremental value without price recovery .
Key data sources: 2025 DEF 14A (Mar 12, 2025) throughout: executive biography and governance **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:12]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:14]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:21]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:26]**; compensation structure, STIP metrics/results, LTI terms, and grants **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:43]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:48]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:49]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:50]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:52]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:53]**; ownership/awards and severance mechanics/values **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:64]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:67]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:68]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:73]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:74]**; say‑on‑pay and program changes **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:41]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:42]** **[1689796_0001558370-25-002812_jbgs-20250424xdef14a.htm:56]**.