Justin Smart
About Justin Smart
Justin Smart, age 65, is President of Kilroy Realty Corporation (KRC) and has been an executive officer since 2000; he became President in March 2023 after leading Development & Construction for decades . Smart’s background spans >30 years of real estate development across office, industrial, residential, and resort properties, including prior roles at Intrawest and Kilroy Industries . KRC’s 2024 performance—1.78M SF of leases (highest since 2019), +8.2% GAAP rent change, and ~$1.3B liquidity—underpins variable pay outcomes; executive incentives are explicitly linked to FFO per share, relative TSR, and net debt/EBITDA, aligning pay with shareholder returns and balance-sheet discipline .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Kilroy Realty Corporation | President | Mar 2023–present | Executive leadership over platform execution; continued emphasis on leasing, capital allocation, and performance culture |
| KRC | President, Development & Construction | 2022–2023 | Oversaw development pipeline and delivery; integrated sustainability targets (LEED, carbon-neutral ops) into projects |
| KRC | EVP, Development & Construction Services | 2013–2022 | Led large-scale office/life science developments across West Coast markets |
| KRC | SVP, Development & Construction Services | 2000–2012 | Built internal capabilities in construction management and project delivery |
| Intrawest Corporation | VP, Development | 1996–2000 | Led resort and resort real estate development nationally |
| Kilroy Industries | VP, Construction | Prior to 1996 | Managed construction functions prior to KRC executive tenure |
External Roles
- No current external public company directorships or committee roles disclosed for Justin Smart in the proxy .
Fixed Compensation
Multi-year NEO compensation (Summary Compensation Table):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $550,000 | $600,000 | $600,000 |
| Stock Awards ($) | $1,951,721 | $2,761,749 | $2,773,472 |
| Non-Equity Incentive ($) | $687,500 | $1,125,000 | $1,113,750 |
| All Other Compensation ($) | $112,420 | $121,906 | $124,816 |
| Total ($) | $3,301,640 | $4,608,655 | $4,612,038 |
All Other Compensation (2024) detail:
| Item | Amount ($) |
|---|---|
| Employee healthcare premiums | $3,435 |
| Medical allowance | $25,000 |
| Company contributions to Deferred Compensation Plan | $60,000 |
| Company contributions to 401(k) Plan | $15,250 |
| Travel and automobile-related expenses | $21,131 |
| Total | $124,816 |
Performance Compensation
2024 Annual Cash Incentive framework and outcomes:
| Category | Metric | Weight | Threshold (50%) | Target (100%) | Max (150%) | 2024 Actual | Payout Factor |
|---|---|---|---|---|---|---|---|
| Financial & Operational | FFO per Share | 35% | $4.10 | $4.175 | $4.25 | $4.59 (Max) | 150% |
| Financial & Operational | Leasing SF – Operating Portfolio | 17.5% | 750K | 850K | 1,100K | 1,417K (Max) | 150% |
| Financial & Operational | Leasing SF – Development Portfolio | 7.5% | 50K | 100K | 200K | 0 (Below threshold) | 0% |
| Balance Sheet | Net Debt/EBITDA | 10% | 6.9x | 6.7x | 6.5x | 6.4x (Max) | 150% |
| Corporate Responsibility | ESG/CSR program milestones | 10% | — | — | — | At Target | 100% |
| Individual Performance (Smart) | Committee assessment | 20% | — | — | — | 100% for Smart | 100% |
- Category results: Operations 131% of target (composite of 35%+17.5%+7.5% metrics), Balance Sheet 150%, Corporate Responsibility 100%, Individual 100% for Smart .
- 2024 actual bonus paid (Smart): $1,113,750, equal to 123.8% of a $900,000 target .
2024 Annual Equity Awards (granted Feb 1, 2024):
| Instrument | Grant Date | Units | Grant-Date Fair Value ($) | Vesting |
|---|---|---|---|---|
| Time-based RSUs | 2/1/2024 | 19,532 | $687,526 | 1/3 each on Jan 5, 2025/2026/2027 |
| Performance-based RSUs (Target) | 2/1/2024 | 58,594 (Target) | $2,085,946 | Banked on 2024 FFO (150% achieved), then modified by 2024–2026 relative TSR and Avg Net Debt/EBITDA; cliff vest after performance period |
Performance RSU mechanics:
- FFO (As Adjusted) Per Share modifier for 2024: Banked Shares = 150% of target (given $4.59 result) .
- Relative TSR modifier (50% weight) and Average Net Debt/EBITDA modifier (50% weight) apply over 2024–2026 (modifiers range 50–150%) .
2024 Stock Vested (value realized):
| Shares Acquired on Vesting (#) | Value Realized ($) |
|---|---|
| 74,871 | $2,698,325 |
Equity Ownership & Alignment
Beneficial ownership (as of March 1, 2025):
| Holder | Shares Beneficially Owned | % of Outstanding | Notes |
|---|---|---|---|
| Justin Smart | 321,184 | <1% | Includes 135,983 shares held directly; 185,201 RSUs vested or vesting within 60 days; excludes 281,119 unvested RSUs |
Outstanding equity awards at FY-end 2024 (Smart):
| Award | Units Unvested | Market Value ($) at $40.45/sh |
|---|---|---|
| 2024 Performance-based RSUs (Banked Shares) | 92,119 | $3,726,231 |
| 2024 Time-based RSUs | 20,472 | $828,080 |
| 2023 Performance-based RSUs (Banked Shares) | 87,210 | $3,527,652 |
| 2023 Time-based RSUs | 18,918 | $765,227 |
| 2022 Performance-based RSUs (Banked Shares) | 39,594 | $1,601,570 |
| 2022 Time-based RSUs (remaining) | 8,374 | $338,719 |
Stock ownership policies:
- Ownership guideline: 300% of base salary; Smart is in compliance as of Dec 31, 2024 .
- Holding requirement: if below guideline, must hold at least 50% of net shares from awards .
- Anti-hedging and anti-pledging policies; pledging exceptions limited (≤10% of beneficial ownership, not needed for guideline, no hedging strategy), and no other exceptions have been made .
- Stock Award Deferral Program allows RSU deferrals to align long-term incentives and tax efficiency .
Employment Terms
Contract and severance economics:
| Term/Provision | Detail |
|---|---|
| Employment agreement | Dated Jan 28, 2016; auto-renews annually; current term through Mar 1, 2026 |
| Base salary | $600,000 (effective Mar 1, 2023) |
| Target annual cash incentive | ≥100% of base salary; set at $900,000 for 2024 |
| Annual equity award (target) | ≥100% of base salary (target grant date value), subject to committee discretion |
| Tax gross-ups | None (including 280G/4999), consistent with governance practices |
Severance triggers (summary from agreement):
- If terminated without cause or for good reason: accrued compensation; partial-year bonus based on actual performance; full vesting of time-based awards; performance awards vesting measured at greater of target or actual performance-to-date and reasonably anticipated for remainder of year; COBRA premiums for two years; cash severance equal to 2x base salary plus 2x average of his two highest target annual incentives over prior 3 years; release required .
- Death: similar treatment but cash severance multiplier is 1x and COBRA for one year .
- Disability: similar treatment; COBRA for one year .
Estimated severance/change-in-control values (as of Dec 31, 2024, scenario-based):
| Scenario | Cash Severance ($) | Medical ($) | Accelerated Vesting ($) | Total ($) |
|---|---|---|---|---|
| Termination without cause/for good reason (no CIC) | $4,638,750 | $122,915 | $7,012,790 | $11,774,455 |
| Termination without cause/for good reason (with CIC) | $4,638,750 | $122,915 | $11,915,504 | $16,677,169 |
| Death | $2,319,375 | $61,457 | $7,012,790 | $9,393,622 |
| Disability | $4,638,750 | $61,457 | $7,012,790 | $11,712,997 |
Other items:
- No “single-trigger” CIC severance; acceleration generally requires qualifying termination or award non-continuation .
- Aircraft time-sharing agreement existed historically; no personal use in 2024 and aircraft sold on Nov 22, 2024 .
Investment Implications
- Pay-performance alignment: Smart’s variable pay is strongly tied to FFO per share, leasing outcomes, leverage management, and relative TSR—key drivers of REIT value creation—supporting alignment with shareholders; 2024 bonus at 123.8% of target reflects above-plan execution .
- Retention vs. exit optionality: Material severance and vesting protections (especially with CIC) provide retention incentives but also imply defined exit economics; investors should monitor succession dynamics and CIC scenarios given ~$16.7M total exposure under CIC termination .
- Vesting calendar and possible selling pressure: Significant banked performance RSUs (2022, 2023, 2024 cohorts) vest over cliff schedules through determination dates (2024–2026 cycles) and time-based tranches on Jan 5 annually; routine tax-related sales may occur around vest dates, though anti-pledging/hedging policies reduce risk of misalignment .
- Ownership and governance quality: Smart meets ownership guidelines (300% of salary), and KRC maintains robust governance practices—stock ownership requirements, clawbacks, no excise tax gross-ups, and no single-trigger CIC—reducing red-flag risk on compensation structures .
- Performance context: KRC’s 2024 operational momentum (1.78M SF leasing, +8.2% GAAP rent change) and liquidity (~$1.3B) underpin the strong incentive outcomes; forward RSU performance will depend on 2024–2026 TSR relative to office REIT peers and leverage trajectory .
Compensation peer group and design: KRC benchmarks against 14 REIT peers (e.g., Alexandria, Boston Properties, Vornado); long-term incentives are majority performance-based (TSR and net debt/EBITDA), with short-term incentives simplified and reweighted per shareholder feedback, lowering ESG weight and adding objectivity—supportive of disciplined, investor-aligned compensation .
Notes
- All figures and terms sourced from KRC’s 2025 DEF 14A proxy statement .