Stephen A. Horn, Jr.
About Stephen A. Horn, Jr.
Stephen A. Horn, Jr. (age 53) is President and Chief Executive Officer of NNN REIT, Inc., serving as CEO since April 2022; he joined the Board in February 2022 and previously served as COO (Aug 2020–Apr 2022), Chief Acquisition Officer (2014–2020), SVP Acquisitions (2008–2013), and VP Acquisitions (2003–2008), after earlier M&A work at A.G. Edwards & Sons . Under his leadership in 2024, NNN delivered Core FFO per share of $3.32, raised the dividend 2.7% to $2.29 (35th consecutive annual increase), executed $565.4M of acquisitions at a 7.7% initial cash yield, and ended with 98.5% portfolio occupancy and 40.5% leverage; NNN’s three‑year TSR ranked at the 68.7th percentile vs. all Equity REITs and its 25‑year annual TSR growth is 12.5% . He serves on the Nareit Advisory Board of Governors and is a member of ICSC .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| NNN REIT, Inc. | President & CEO | Apr 2022–present | Set strategic plan, led Board relations, expanded use of data analytics/AI, oversaw $565.4M acquisitions at 7.7% yield and $148.7M dispositions; sustained 98.5% occupancy and 40.5% leverage in 2024 . |
| NNN REIT, Inc. | EVP & COO | Aug 2020–Apr 2022 | Senior operating leadership prior to CEO role . |
| NNN REIT, Inc. | EVP & Chief Acquisition Officer | Jan 2014–Aug 2020 | Led acquisitions platform . |
| NNN REIT, Inc. | SVP, Acquisitions | Jun 2008–Dec 2013 | Acquisitions leadership . |
| NNN REIT, Inc. | VP, Acquisitions | 2003–2008 | Originations and underwriting . |
| A.G. Edwards & Sons | M&A Group | Pre‑2003 | Transaction experience prior to NNN . |
| NNN REIT, Inc. (Board) | Director (management) | Feb 2022–present | Management director; no committee assignments; Board has independent Chair . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Nareit | Advisory Board of Governors | Current | Industry leadership and policy engagement . |
| ICSC | Member | Current | Retail real estate industry body . |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 700,000 | 825,000 | 925,000 |
| Total Non‑Equity Incentive ($) | 2,100,000 | 1,964,531 | 1,665,000 |
| All Other Compensation ($) | 18,637 | 19,343 | 19,856 |
| Total Reported Compensation ($) | 6,776,699 | 7,194,654 | 8,418,498 |
Note: “Stock Awards” in the SCT reflect grant date fair value under ASC 718 assuming maximum performance is achieved (see LTI detail below) .
Performance Compensation
- Annual cash incentive structure (2024): 75% Core FFO/share (threshold $3.20; target $3.30; max $3.40), 25% strategic/individual; leverage cap reduces bonus if debt ratio exceeds approved levels .
- 2024 actual: Core FFO/share of $3.32 (ex‑impairments/CFO retirement costs) → pays 120% of target for the financial component; CEO component payouts shown below .
| Annual Incentive Component (CEO) | Weight | Threshold | Target | Maximum | 2024 Actual Payout |
|---|---|---|---|---|---|
| Core FFO/share | 75% | 56.250% of salary | 112.500% | 225.000% | 135.000% of salary |
| Strategic/Individual | 25% | 18.750% | 37.500% | 75.000% | 45.000% of salary |
| Total | 100% | 75.000% | 150.000% | 300.000% | 180.000% of salary |
Long-Term Incentives (LTI)
- Design: 70% performance‑based restricted stock (3‑yr relative TSR vs Nareit All Equity REITs; threshold 25th pct=25% payout; target 50th pct=100%; max 75th pct=200%); 30% service‑based restricted stock (25% per year over 4 years) .
- 2024 CEO target LTI opportunity: 500% of base salary (350% PBRSUs / 150% RSUs) .
| 2024 LTI Award (CEO) | Weight | Shares Granted | Vesting | Grant Date Fair Value ($) |
|---|---|---|---|---|
| Service‑based restricted stock | 30% | 34,478 | 25% per year over 4 years | 1,369,466 |
| Performance‑based restricted stock (target) | 70% | 80,449 target; 20,112 threshold; 160,898 max | Cliff; 3‑yr relative TSR; vests Jan 1, 2027 if earned | 4,439,176 |
Performance cycle results: The 2022–2024 TSR award earned at ~174.8% of target based on 3‑yr TSR at the 68.7th percentile; shares vested Jan 1, 2025 .
Equity Ownership & Alignment
| Ownership metric | Value |
|---|---|
| Beneficial ownership (shares) | 767,464 (includes 544,933 restricted shares; of these, 91,394 with sole voting power and 453,549 with no voting power) |
| Percent of shares outstanding | <1% |
| Hedging/Pledging | Hedging prohibited; pledging restricted; no directors or executive officers have pledged shares |
| Stock ownership guidelines | CEO 5x salary; Committee reviews to confirm Covered Persons meet/exceed guidelines |
| Clawback | NYSE‑compliant recoupment policy on incentive‑based compensation |
Vesting runway (service‑based RS as of 12/31/2024):
| Year | Shares scheduled to vest |
|---|---|
| 2025 | 103,713 |
| 2026 | 19,226 |
| 2027 | 18,547 |
| 2028 | 8,618 |
| Total unvested service‑based | 150,104 |
Outstanding performance awards (as of 12/31/2024; shown at maximum potential):
| Grant | Performance window | Unearned shares (max) | Notes |
|---|---|---|---|
| 2023 PBRSU | 3‑yr to 12/31/2025 | 110,637 | Earn-out based on relative TSR; final vest per plan . |
| 2024 PBRSU | 3‑yr to 12/31/2026 | 160,898 | Earn-out based on relative TSR; vests Jan 1, 2027 if earned . |
Insider supply considerations:
- 103,713 service‑based shares vesting in 2025 represent near‑term potential selling pressure if net share settlement or liquidity needs arise .
- 2022–2024 PBRSU vested Jan 1, 2025 at ~174.8% of target, increasing share delivery to the CEO cohort for 2025 .
Employment Terms
| Feature | Terms for S.A. Horn, Jr. |
|---|---|
| Plan / Agreement | Executive Severance Plan; participation letter effective Apr 29, 2022 |
| Termination multiple (without cause / for good reason) | 2.5x base salary + 2.5x average bonus (paid over 12 months); 1 year company‑paid health coverage; time‑based equity vests; performance‑based equity vests pro‑rata based on actual performance |
| Change‑of‑control (CoC) multiple | 3.0x base salary + 3.0x average bonus if terminated without cause/for good reason in CoC protection window; plus pro‑rated target bonus for year of termination; 1 year health coverage; time‑based equity vests; performance‑based equity vests pro‑rata based on actual performance |
| CoC equity treatment (single‑trigger) | Upon a CoC, unvested time‑based equity vests and unvested performance‑based equity vests at target (single‑trigger acceleration) |
| Death/Disability | Pro‑rated target bonus; for death: 2 months’ salary and one year dependent health coverage; time‑based equity pro‑rata; performance‑based equity at target |
| Covenants & conditions | Non‑competition, non‑solicitation, non‑disclosure, non‑disparagement; release of claims required (except death/disability); 280G excise‑tax cutback (no gross‑up) |
| Legacy options | Company has no outstanding executive stock options; uses restricted stock only |
Board Governance
- Board service: Management director since Feb 2022; not independent; no committee roles. Seven of eight nominees are independent; the Board is led by an independent, non‑executive Chair (Steven D. Cosler), separating CEO and Chair roles and mitigating dual‑role concerns .
- Attendance and process: All eligible directors attended at least 86% of Board meetings and 92.3% of committee meetings in 2024; non‑management directors met in executive session four times, led by the independent Chair .
- Policies: Anti‑hedging; pledging limitations; Equity Retention Policy; Clawback Policy; majority voting; proxy access .
Director Compensation (context)
Non‑employee directors are paid retainers and stock; employee directors (e.g., CEO) do not receive non‑employee director fees. Current non‑employee director program includes $225,000 Board retainer (up to $80,000 cash), Chair premium $120,000, and committee retainers; ownership guideline is 3x total annual Board compensation .
Compensation Structure Analysis
- Pay mix: 2024 target CEO pay tilted heavily to performance equity (70% PBRSU / 30% RSU within LTI; target total LTI 500% of salary), reinforcing pay‑for‑performance vs. TSR peers .
- No options; full shift to RSUs (service + performance) aligns with REIT dividend model and reduces windfall risk; dividends on service‑based RSUs are paid currently; PBRSU dividends accrue and pay only if earned .
- Annual incentive tied primarily to per‑share Core FFO with clear hurdles ($3.20/$3.30/$3.40) and leverage guardrail; 2024 paid at 180% of salary for CEO, reflecting above‑target results and strategic execution .
- Peer benchmarking targets median (50th percentile) total pay vs. a 13‑company REIT peer set; say‑on‑pay support in 2024 was ~96.8% .
Related Party Transactions
The Audit Committee oversees a formal related‑party transaction policy; no specific related‑party transactions are disclosed in the 2025 proxy .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval: ~96.8%, which the Committee considered an endorsement of program design .
- Ongoing engagement with stockholders on strategy, governance, and sustainability is disclosed .
Performance & Track Record (selected 2024 outcomes)
| Metric | 2024 Result |
|---|---|
| Core FFO/share | $3.32 (ex‑impairments and CFO retirement costs) |
| Dividend/share | $2.29; +2.7% YoY; 35th consecutive annual increase |
| Acquisitions | $565.4M at 7.7% initial cash yield |
| Dispositions | 41 properties; $148.7M net proceeds; $42.3M gains |
| Occupancy | 98.5% at 12/31/2024 |
| Leverage | 40.5% (total liabilities/gross book assets) |
| 3‑yr TSR rank | 68.7th percentile vs. Equity REITs (2022–2024) |
| 25‑yr annual TSR | 12.5% |
Investment Implications
- Alignment and retention: Heavy performance equity (70% PBRSU) with relative TSR focus, strong ownership/anti‑hedging/anti‑pledging policies, and a robust clawback indicate high alignment with shareholders while the 4‑year RSU schedule supports retention .
- Potential selling pressure: The CEO has 150,104 unvested service‑based RSUs with 103,713 vesting in 2025 and recent PBRSU over‑achievement (174.8% for 2022–2024) delivered additional shares in 2025; monitor Form 4s for liquidity events around these dates .
- Change‑of‑control economics: Cash severance multiples (2.5x; 3.0x on CoC) are within market norms, but equity accelerates at target upon a CoC (single‑trigger), which can be shareholder‑sensitive in M&A scenarios; nevertheless, there are no excise tax gross‑ups .
- Execution record and KPI delivery: Above‑target Core FFO, disciplined leverage, high occupancy, and sustained dividend growth support pay outcomes and reduce execution risk; high say‑on‑pay support (~96.8%) lowers governance overhang .