Adam Forste
About Adam Forste
Adam Forste (age 47) is Co-Founder and Co-Executive Chairman of Lineage, Inc. and a Managing Partner of Bay Grove since 2007; previously he worked at KKR and began his career in Morgan Stanley’s investment banking group. He is a Fulbright Fellow and a graduate of Dartmouth College . Company performance through 2024 included $5.3B in total revenue, 78% same warehouse occupancy, improved margins, and progress toward investment-grade ratings; since the IPO (Jul 26, 2024) the proxy’s “pay-versus-performance” shows a $100 initial investment ended 2024 at $72 versus $101 for the MSCI US REIT Index (company TSR benchmark used in 10-K) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Bay Grove | Managing Partner | 2007–present | Built owner-operator platform backing Lineage; sponsor governance/strategy |
| KKR | Investment professional | Not disclosed | Private equity experience; capital markets and transactions |
| Morgan Stanley (NY & SF) | Investment banking | Not disclosed | Corporate finance and M&A foundation |
External Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Global Cold Chain Foundation | Director | Not disclosed | Industry network; standards and advocacy in cold chain |
| Emergent Cold LatAm Holdings LLC | Director; Chairman of the Board | Chairman role noted as of 2024 | Strategic adjacency; Lineage holds 8.8% interest and purchase option through Jun 23, 2027 |
| Turvo LLC | Director | Not disclosed | Technology/logistics connectivity |
Fixed Compensation
- Not disclosed for Mr. Forste (not a Named Executive Officer). Directors designated by sponsors did not receive director retainers; Forste received no board fees in 2024 .
Performance Compensation
- As Compensation Committee Chair, Forste oversees NEO incentive design. 2024 annual bonuses weighted 70% to Company Management Adjusted EBITDA and 30% to individual objectives; CEO and NEO payout curves differ. Actual 2024 Management Adjusted EBITDA was $1,342.3M (95.9% of target) .
| Metric | Weighting | Threshold | Target | Max | Actual | CEO payout (% of target) | Non-CEO payout (% of target) |
|---|---|---|---|---|---|---|---|
| Management Adjusted EBITDA ($MM) | 70% | 1,309.0 | 1,400.0 | 1,491.0 | 1,342.3 | 36.9% | 49.5% |
- The 2024 long-term performance LTIP units for NEOs are tied to AFFO per share (60%), same warehouse NOI growth (40%), modified by relative TSR (S&P 500, 80/100/120% at 25th/50th/75th percentiles); performance periods end Dec 31, 2026 .
Equity Ownership & Alignment
| Holder | Shares owned | Rights to acquire (OP/OPEU/RSU/LTIP) | Total beneficial | % of Common |
|---|---|---|---|---|
| Adam Forste | 157,430,737 (incl. BGLH holdings) | 22,730,768 (incl. OPEUs/OP units) | 180,161,505 | 71.7% |
| Direct holdings | 24,317 shares | — | 24,317 | * |
| Estate-planning entities | 190,114 shares; 21,015 OP units | — | 211,129 | * |
- Stock ownership policy: CEO 6x base salary; CFO/COO 4x; other execs 3x; non-employee directors 5x annual cash retainer; compliance due no later than July 24, 2029 or within five years of appointment/designation .
- Hedging, short sales, options trading, margin purchases, and pledging are prohibited; no shares beneficially owned by directors/executives are pledged .
- Exchangeability/settlement dynamics:
- OPEUs held by BG Maverick (managed by BG Capital) are exchangeable one-for-one into OP units beginning two years after IPO (post Jul 26, 2026) .
- OP units are redeemable for cash or exchangeable into common stock beginning 14 months after issuance (Legacy OP Units require reclassification and are being settled over up to three years post-IPO) .
- BGLH plans in-kind distributions and has rights to demand offerings facilitating cash settlements over up to three years (potential supply overhang) .
Employment Terms
- Restrictive covenants agreement: Forste agreed not to compete with Lineage’s business until the earlier of Jul 26, 2027 or when he ceases to own any equity interest in Lineage, Inc. .
- Insider Trading Policy: formal policy filed; prohibits speculative and hedging transactions; requires compliance windows .
- Clawback: Dodd-Frank/Nasdaq-compliant compensation recovery policy adopted in connection with IPO (applies to Section 16 officers) .
Board Governance
- Board service history: Director since 2008 (includes predecessor boards) .
- Current roles: Co-Executive Chairman; Chair, Compensation Committee; Member, Nominating & Corporate Governance Committee .
- Committee structure:
- Compensation Committee: Forste (Chair), Carrafiell, Turner, Wentworth, Wyper; independent status for four members; Forste is non-independent .
- Nominating & Corporate Governance: Marchetti (Chair), Forste, Archambeau .
- Audit Committee: Falotico (Chair), Wentworth, Turner; fully independent; all are “financial experts” .
- Equity Award Committee: Wentworth (Chair), Turner; independent .
- Controlled company exception: Bay Grove affiliates >50% voting power; Lineage uses Nasdaq controlled company exemptions (comp and nominating/governance committees not entirely independent) .
- Lead Independent Director: Lynn Wentworth .
- Attendance: Board held 2 meetings in 2024; all directors attended ≥75% of Board and committee meetings; independent directors hold executive sessions at least twice per year .
Director Compensation
- Forste received no director compensation in 2024; sponsor-designated directors (including Forste) did not receive fees .
- Non-employee director program (for eligible directors) post-IPO: $120,000 annual retainer; committee chair/member stipends; annual RSU grants (~$200,000 value) vesting at next annual meeting/1-year anniversary .
Compensation & Incentives—Structure Analysis
- Strong use of performance-based incentives for NEOs: 70% of annual bonus linked to Management Adjusted EBITDA; long-term LTIP units tied to AFFO/NOI and TSR modifier; clawback policy in place .
- Compensation peer group updated in 2024 to emphasize global REITs/infrastructure REITs (e.g., Equinix, Prologis, Public Storage, Digital Realty) .
- Pay Governance LLC serves as independent compensation consultant; services include program design, peer benchmarking, severance arrangements; no conflicts found .
Vesting Schedules and Insider Selling Pressure
| Instrument | Key vesting/settlement terms | Dates/Triggers |
|---|---|---|
| OPEUs (BG Maverick) | Exchangeable one-for-one into OP units; then OP redeemable/exchangeable | Exchange eligibility begins two years after IPO (≥Jul 26, 2026) |
| OP units | After issuance, redeemable for cash at market value or exchangeable for stock | Rights begin 14 months post-issuance; Legacy OP Units must be reclassified first |
| BGLH distributions | In-kind distributions over up to three years; can force offerings for cash settlement | Post-IPO window through Jul 26, 2027 |
Potential pressure: Coordinated settlements of Legacy OP Units and BGLH equity, and OPEU exchange windows, may create periodic supply as elections for cash settlements are facilitated via registration rights .
Related Party Transactions (2024)
| Transaction | Amount | Notes |
|---|---|---|
| Pre-IPO dividends to BGLH | $88.5M; Forste personal/vehicles ≈$0.6M | Distributed before IPO; pro-rata after IPO |
| OP/Legacy Class B OP distributions | $8.9M total; Forste personal/vehicles ≈$3.2M | Operating partnership distributions |
| BG Maverick OPEU repurchase | $75.0M cash to BG Maverick; Forste received $35.0M | One-time settlement tied to service internalization |
| Bay Grove Operating Services fees | $8.6M to Bay Grove; Forste benefited ≈$3.7M | Agreement terminated at IPO; services internalized |
| Transition Services Agreement fees | $3.5M fees + $0.8M expenses; Forste benefited ≈$1.9M | Through Jul 26, 2027; supports capital deployment/M&A |
| Founders Equity Share distributions | ≈$0.3M to BG Cold; Forste ≈$0.1M | Linked to special redemptions/top-ups |
| Executive loans | Forste’s $6.7M principal repaid prior to IPO | Historical loans; modest interest paid |
- Registration rights: BGLH has demand/piggyback rights and can require offerings to fund redemptions/top-ups for guarantee rights; additional holders (including Forste) have resale rights .
Risk Indicators & Red Flags
- Controlled company status; Compensation & Nominating committees not fully independent; Forste chairs Compensation Committee (potential independence concern) .
- Significant related party transactions and fee flows to Bay Grove affiliates; continuing Transition Services Agreement through 2027 .
- Coordinated equity settlements and registration rights may increase float/supply over 2024–2027 (trading overhang risk) .
- Internal control material weakness (2023) remediated by end-2024 (process credibility improved) .
Equity Ownership & Alignment Details
- No pledging; insider trading policy bans hedging and margin; stock ownership policy mandates significant multiples with compliance by 2029 .
- Lead Independent Director structure and independent Audit Committee mitigate controlled company risks; independent executive sessions at least twice per year .
Investment Implications
- Alignment: Forste’s substantial beneficial ownership (≈71.7%) strongly aligns incentives with long-term value creation, but controlled company status concentrates governance power and introduces independence concerns, particularly with Forste chairing the Compensation Committee .
- Overhang/flow: The three-year settlement process for BGLH/Legacy OP Units and two-year OPEU exchange window could create episodic selling pressure as cash settlement elections are facilitated; monitor 8-Ks and offerings linked to registration rights .
- Pay-for-performance: NEO incentives are tied to EBITDA, AFFO, NOI and relative TSR—consistent with REIT value drivers; oversight by Forste as Comp Chair suggests continued emphasis on these levers .
- Governance mitigants exist (Lead Independent Director, independent Audit Committee), but investors should watch related party fee run-off and transition services milestones through 2027 for execution risk and cost normalization .