David Gladstone
About David Gladstone
David Gladstone, age 82, is the founder of Gladstone Land Corporation and has served as Chairman, Chief Executive Officer, and President since inception in 1997; he also controls and serves as CEO/Chairman of affiliated entities, including Gladstone Capital, Gladstone Investment, Gladstone Commercial, Gladstone Management (Adviser), and Gladstone Administration, and sits on the board of managers of Gladstone Securities . He holds an MBA from Harvard Business School, an MA from American University, and a BA from the University of Virginia, and has authored two books on venture capital; the Board classifies him as not independent given his executive roles, with the Board using a Lead Independent Director structure (Wilkinson) to mitigate combined CEO–Chairman concerns . Performance pay at LAND is structured through externally managed Advisory and Administration Agreements with fees tied to Gross Tangible Real Estate and quarterly FFO hurdles rather than executive-specific salary/bonus programs .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| American Capital Strategies (ACAS) | Chairman/Vice Chairman | 1997–2001 | Oversight of public LBO/mezzanine finance company |
| Allied Capital (ALD) and affiliates | Chairman/CEO and other roles | 1974–1997 | Led largest group of publicly-traded mezzanine funds; managed multiple investment entities |
| Allied Capital Commercial Corporation (public REIT) | Chairman/President | 1991–1997 | Grew assets to $385M prior to merger into Allied Capital Corporation |
| Business Mortgage Investors (private mortgage REIT) | Director/President/CEO | 1992–1997 | Invested in real estate loans to SMBs |
| The Riggs National Corporation | Director | 1993–1997 | Bank holding company governance |
| Riggs Bank | Director | 1991–1993 | Bank board service |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Gladstone Capital (GLAD); Gladstone Investment (GAIN); Gladstone Commercial (GOOD) | CEO/Chairman; Director | Ongoing | Founder and control person across Gladstone affiliates |
| Gladstone Management (Adviser); Gladstone Administration | CEO/Chairman | Ongoing | Indirect controlling stockholder of Adviser and Administrator |
| Gladstone Securities (broker-dealer) | Board of Managers | Ongoing | Affiliated entity engaged for offerings/financings |
Fixed Compensation
Executives receive no direct salary, bonus, or equity from LAND; the company has no employees and no equity incentive plans. Services are provided via the Adviser and Administrator; therefore, no Say‑On‑Pay is provided or required under SEC rules .
| Component | Amount/Status | Source |
|---|---|---|
| Base salary | Not applicable (externally managed) | |
| Target/Actual bonus | Not applicable (externally managed) | |
| Equity awards (RSUs/PSUs/Options) | None; LAND has no equity incentive plan | |
| Director fees (for Gladstone) | $0 (officer-directors not paid board fees) |
Performance Compensation
LAND’s management economics are delivered via the Advisory Agreement controlled by David Gladstone; fees are linked to asset base and quarterly FFO performance.
| Incentive Type | Metric | Threshold/Target | Payout Curve | Frequency/Vesting |
|---|---|---|---|---|
| Base Management Fee | Prior quarter Gross Tangible Real Estate | 0.60% annual (0.15% per quarter) | Linear on asset base | Quarterly fee under Advisory Agreement |
| Quarterly FFO Incentive Fee | Pre‑incentive fee FFO as % of total adjusted common equity | Hurdle: 1.75% per quarter (7% annualized) | 100% of amount above 1.75% up to 2.1875%; 20% of amount above 2.1875% | Quarterly, based on reported FFO |
| Capital Gains Incentive Fee | Realized capital gains net of losses (defined methodology) | Positive realized gains for period | 15% of the calculated amount | Annual; none recognized to date |
Additional disclosures:
- Adviser waivers: $109,023 in irrevocable fee waivers were granted for 2024, subject to Board approval .
- Administration Agreement: LAND reimburses allocated overhead and personnel costs of Administrator staff supporting CFO, Treasurer, CCO, GC/Secretary, etc. .
Equity Ownership & Alignment
| Holder | Shares Beneficially Owned | % of Outstanding | Ownership Detail |
|---|---|---|---|
| David Gladstone | 2,513,985 | 6.95% | Includes 215,400 shares owned by David & Lorna Gladstone Foundation; 929,585 by The Gladstone Companies, Ltd.; 248,000 by Gladstone Ancestry Trust; 700,000 by Gladstone American Trust; sole voting/dispositive power over 2,298,585 shares, shared over 215,400 |
Additional alignment/hedging details:
- Pledging: No pledging disclosed for David Gladstone; a separate director (M. English) disclosed 845 shares pledged in a margin account .
- Insider Trading Policy: Prohibits trading while in possession of MNPI and prohibits short sales, options/derivatives on Fund securities, and requires pre‑clearance for transactions; applies to officers/directors and household members .
Employment Terms
LAND does not disclose executive employment agreements because executives are employed by the Adviser/Administrator. Key economics and retention implications are embedded in advisory contracts:
- Advisory Agreement termination: If LAND terminates the Advisory Agreement (requires 120 days’ prior written notice and the vote of at least two‑thirds of independent directors), a termination fee equals three times the sum of the average annual base management fee and incentive fee earned during the prior 24 months .
- Administration Agreement: LAND reimburses allocated overhead and personnel expenses of Administrator; payments determined by time allocations across serviced companies .
Board Governance
- Roles: David Gladstone serves as Chairman of the Board and CEO/President; he chairs the Executive Committee and Offering Committee .
- Independence: Board determined five directors are independent; Gladstone and Novara are not independent by virtue of officer roles .
- Lead Independent Director: Walter H. Wilkinson, Jr. serves as Lead Independent Director, presiding over executive sessions and liaising with management .
- Attendance: The Board met five times in 2024; each then‑current director attended at least 75% of Board and committee meetings; independent directors met in four executive sessions .
Committee memberships (2024 composition):
| Committee | Members | Chair | David Gladstone’s Role |
|---|---|---|---|
| Audit | Parker, Outland, English; Wilkinson (alternate) | Parker | Not a member |
| Compensation | Outland, Wilkinson; Gorka (appointed Jan 8, 2025); Parker, English (alternates) | Outland | Not a member |
| Ethics/Nominating/Governance | Adelgren (resigned Dec 15, 2024), Outland, Wilkinson, Gorka (chair as of Dec 15, 2024); Parker, English (alternates) | Gorka | Not a member |
| Executive | Gladstone, Parker | Gladstone | Chair |
| Offering | Gladstone, Parker (independents as alternates) | Gladstone | Chair |
| Valuation | Outland, Parker, Wilkinson (chair); other independents as alternates | Wilkinson | Not a member |
Related Party Transactions and Conflicts
- Advisory/Administration Fees: Accrued net fees of approximately $8.4 million (Adviser) and $2.5 million (Administrator) for FY2024; Gladstone is indirect controlling stockholder of the Adviser and Administrator .
- Mortgage Financing Arrangement: Gladstone Securities acts as non‑exclusive agent to arrange property mortgage financing; fee typically 0.5%–1.0% of mortgage amount; no financing fees paid in 2024 or 2023 .
- Dealer‑Manager Agreement (Series E Preferred): Gladstone Securities as exclusive dealer‑manager earns up to 7.0% selling commissions and 3.0% dealer‑manager fee; LAND paid approximately $41,000 in 2024 (and ~$0.6 million in 2023) under this arrangement .
- Conflict of Interest Policy and indemnification protections described in charter/bylaws and Maryland law; independent director approvals required for related transactions .
Performance Compensation Analysis
- Cash vs. equity mix: No executive cash/equity compensation at the issuer level; economics flow via fees to affiliated Adviser/Administrator; no executive-specific equity grants or options; no Say‑On‑Pay .
- Metric rigor: Quarterly FFO hurdle (1.75%) and step‑function payout introduce strong incentive to maintain/improve FFO; base fee tied to asset base may incentivize asset growth (Gross Tangible Real Estate) .
- Modifications/Repricings: None disclosed for executive equity awards (no plan in place); Adviser waivers in 2024 reduced fees by $109,023, approved by the Board .
Equity Ownership & Alignment Details
| Category | Detail |
|---|---|
| Beneficial ownership (Gladstone) | 2,513,985 shares; 6.95% of outstanding |
| Direct vs. indirect | Foundation: 215,400; The Gladstone Companies, Ltd.: 929,585; Gladstone Ancestry Trust: 248,000; Gladstone American Trust: 700,000; sole voting/dispositive power over 2,298,585; shared over 215,400 |
| Options/RSUs/PSUs | None; LAND has no equity plan |
| Pledging | None disclosed for David Gladstone (contrast: M. English pledged 845 shares) |
| Hedging/derivatives | Prohibited by Insider Trading Policy; pre‑clearance required |
| Ownership guidelines | Not disclosed |
Employment Terms (Severance/CoC)
| Provision | Terms |
|---|---|
| Advisory Agreement termination fee | Three times the sum of average annual base management fee and incentive fee earned over prior 24 months, payable upon termination (requires 120 days’ notice and ≥2/3 independent director vote) |
| Change‑of‑control triggers | Not specifically disclosed; termination mechanics governed by Advisory Agreement |
| Non‑compete / Non‑solicit / Garden leave | Not disclosed in proxy for executives (externally managed structure) |
Investment Implications
- Alignment: A 6.95% equity stake suggests meaningful personal alignment; prohibitions on hedging enhance exposure to shareholder outcomes; no pledging disclosed for Gladstone, mitigating a key red flag .
- External management economics: Base fees tied to asset base and incentive fees tied to FFO hurdles can encourage asset growth and FFO stability; the step‑function payout around 1.75%–2.1875% quarterly FFO incentivizes crossing thresholds, potentially affecting capital allocation and financing decisions .
- Retention/transition risk: The Advisory termination fee (3× average fees) and required supermajority of independent directors create friction against abrupt changes, lowering near‑term management departure risk but increasing costs for governance resets or external manager changes .
- Governance: Combined CEO–Chairman role is partially mitigated by a Lead Independent Director and independent committee structure; however, related‑party arrangements (Gladstone Securities dealer‑manager and financing agreements) require continued vigilant oversight by independent directors .
- Pay‑for‑performance transparency: Absence of issuer‑level executive compensation disclosures and Say‑On‑Pay reduces visibility into CEO pay alignment; investors should instead monitor Advisory/Administration fee levels, FFO performance versus hurdles, and any fee waivers for signals of management confidence and discipline .