Heath R. Fear
About Heath R. Fear
Executive Vice President and Chief Financial Officer of Kite Realty Group (KRG) since November 2018; age 56; BA in Political Science and English from John Carroll University and JD from University of Illinois College of Law. Responsibilities span finance, accounting, tax, budgeting, IT, investments, legal, corporate communications, and administration . Company performance underpinning pay-for-performance in 2024: FFO per diluted share rose to $2.07, Same Property NOI grew 3.0%, Net Debt/Adjusted EBITDA improved to 4.7x with >$1.2B liquidity; three-year TSR +32.3% (88th percentile vs shopping center REITs), one-year TSR +15.5% (≈median) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Retail Properties of America, Inc. (RPAI) | Chief Financial Officer | 2015–2017 | Oversaw capital markets, accounting, IR, internal audit/reporting, treasury |
| GGP Inc. | Chief Financial Officer | 2017–2018 | Oversight of capital markets, accounting, IR, internal reporting, treasury, IT |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $550,000 | $550,000 | $600,000 |
| Target Annual Cash Incentive (% of salary) | Not disclosed | 100% | 100% |
| Threshold/Max Bonus Multipliers | Not disclosed | Threshold 60%; Max 200% | Threshold 60%; Max 200% |
| Actual Annual Cash Incentive ($) | $1,100,000 | $1,100,000 | $1,062,000 |
Summary Compensation
| Component ($) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $550,000 | $550,000 | $600,000 |
| Stock Awards (grant-date fair value) | $2,211,276 | $911,258 | $989,257 |
| Non-Equity Incentive (cash) | $1,100,000 | $1,100,000 | $1,062,000 |
| All Other Compensation | $101,640 | $60,433 | $15,718 |
| Total | $3,962,916 | $2,621,691 | $2,666,975 |
Performance Compensation
Short-Term Incentive Plan (STIP) – 2024
| Metric | Weight | Target | Actual Result |
|---|---|---|---|
| FFO per Share | 25% | $2.03 | $2.09 (adjusted) |
| Same Property NOI (YoY) | 20% | 1.5% | 3.0% |
| Retail Portfolio Leased Rate | 20% | 95.0% | 95.0% |
| ESG Items (scored 0–15) | 15% | 10 | 14 |
| Individual Performance | 20% | — | Max rating for Fear based on operational, TSR, leasing, margins, balance sheet |
| Payout (Heath R. Fear) | — | — | $1,062,000 (cash) |
Long-Term Incentive (LTI) – Structure and 2024/2025 Grants
| Award Type | Weight | Grant Date | Target/Max | Performance Metric | Performance Period | Vesting & Holding |
|---|---|---|---|---|---|---|
| Performance-Based LTIP Units | 60% | Feb 16, 2024 | Target $840,000; Max 87,989 units | Relative TSR vs FTSE Nareit Equity Shopping Center Index; Max at 80th percentile; Target at 55th; Threshold at 30th | 2/16/2024–2/15/2027 | Earned units vest after performance certification; 2-year post-vest hold; accrued distributions paid on earned units |
| Time-Based LTIP Units | 40% | Feb 18, 2025 (for 2024 performance) | 150% of target; $840,000→$1,260,000; 37,467 units at $22.42 | Time-based only | 3-year ratable vest from 2/18/2025 | 2-year post-vest holding period |
Status of Prior Performance Awards (as of 12/31/2024; outcomes certified 2/18/2025)
- 2/15/2022 performance LTIPs: earned ≈56.7% of target (58,865 units) .
- 1/14/2022 Merger Award: earned at maximum (2/18/2025; post-table date) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 498,413 total (69,265 common shares; 429,148 OP/vested LTIP units); <1% of shares |
| Unvested Time-Based Units | 86,258 (market value $2,177,152 at $25.24 on 12/31/2024) |
| Unearned Performance-Based Units | 229,496 (aggregate modeled values by grant; see grant table) |
| 2024 Exercises/Vesting | Exercised AO LTIP Units: 66,849 units; value realized $1,729,962; Vested time-based LTIPs: 45,059 units; value realized $1,054,077 |
| Ownership Guidelines | 3x base salary ($1,800,000 based on 2024 salary); in compliance as of 12/31/2024 |
| Hedging/Pledging | Anti-hedging policy in place ; no pledging disclosed for Fear (pledging noted for other individuals) |
| Post-Vest Holding | Mandatory 2-year post-vest hold on time-based and performance-based equity |
Employment Terms
| Term | Provision |
|---|---|
| Role Start | EVP & CFO since November 2018 |
| Agreement Term | Effective 12/31/2020; initial term through 12/31/2025; auto-renews annually; extends to 2nd anniversary post-CIC with annual renewals unless notice 180 days prior |
| Base/Bonus Structure | 2024 base $600,000; Annual cash incentive target 100% of salary; thresholds and maximums per STIP |
| Non-Compete/Non-Solicit | Non-compete 12 months (18 months if termination without cause/for good reason within two years post-CIC); confidentiality and non-disparagement provisions |
| Clawback | Mandatory recovery of incentive-based compensation for 3 years preceding accounting restatement under SEC/NYSE rules |
| Insider Trading | Formal policy governing transactions in KRG securities; filed as exhibit to 2024 Form 10-K |
| Severance Multiples | Outside CIC: 2x (salary + average prior 3-year annual cash incentive) plus pro-rata target bonus if at target or above; During CIC Protection Period: 3x (salary + average prior 3-year annual cash incentive) plus pro-rata target bonus without performance condition; 18 months medical benefits; specified equity vesting per award types |
Quantification of Benefits (as of 12/31/2024)
| Scenario | Cash Severance ($) | Accelerated Equity ($) | Medical ($) | Total ($) |
|---|---|---|---|---|
| Without Cause / Good Reason (outside CIC period) | $4,384,222 | $6,493,225 | $0 | $10,877,447 |
| Without Cause / Good Reason (during CIC period) | $6,045,333 | $6,493,225 | $0 | $12,538,558 |
| For Cause / Without Good Reason | $1,062,000 (accrued comp incl. annual incentive due at year-end) | $0 | $0 | $1,062,000 |
| Death/Disability | $1,062,000 | $6,493,225 | $0 | $7,555,225 |
| Change in Control (no termination; awards not assumed) | — | $6,493,225 (per award agreements/EIP rules) | — | $6,493,225 |
Change-in-Control Mechanics
- No single-trigger severance; vesting of awards depends on assumption/continuation and performance test timing; definitions of Cause/Good Reason/CIC Protection Period per equity plan and agreements .
Compensation Structure Notes
- Majority of compensation is variable and equity-based; performance LTIPs tied to relative TSR require 80th percentile to earn max—tight linkage of upside to sector outperformance .
- Company discontinued option-like AO LTIP grants; current program emphasizes LTIP Units with multi-year performance and mandatory post-vest holding, reducing short-term selling pressure .
- Strong shareholder support: 97.7% say-on-pay approval at 2024 annual meeting for prior year NEO pay .
Investment Implications
- Alignment: High at-risk, multi-year TSR-based equity with two-year holding and 3x salary ownership guideline (in compliance) indicates strong shareholder alignment and moderated near-term selling pressure .
- Retention/Transition Risk: Robust severance and extended non-compete (18 months in CIC-related termination) reduce voluntary departure risk; auto-renewing contract through 12/31/2025 supports continuity .
- Trading Signals: 2024 AO LTIP exercises (value realized ~$1.73M) and scheduled vesting cadence may create event-driven flow; however, post-vest holding period curtails immediate disposals .
- Pay-for-Performance: STIP overachievement (FFO/share, NOI, ESG) and TSR percentile performance underpin incentive payouts; reliance on relative TSR for LTI introduces peer beta—positive if KRG sustains sector outperformance .
- Governance Red Flags: No tax gross-ups or single-trigger severance; anti-hedging in place; no pledging disclosed for Fear—low governance risk profile for the CFO .