Mark E. Hagan
About Mark E. Hagan
Executive Vice President and Chief Investment Officer at Realty Income; age 58; CIO since May 2018 following senior real estate investment banking roles at RBC Capital Markets, Deutsche Bank, and Merrill Lynch . In 2024, the company delivered 4.8% AFFO/share growth to $4.19 and 2.5% dividend/share growth, while TSR was -2.1% versus +8.8% for the MSCI U.S. REIT Index, aligning incentives to internal cash flow and balance sheet strength rather than near-term stock performance . Hagan’s 2024 STIP payout was 216% of target ($1.455M), reflecting outperformance on AFFO/share, fixed charge coverage, and occupancy .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| RBC Capital Markets, LLC | Managing Director, Real Estate Investment Banking | 2010–2018 | Senior leadership in real estate IB |
| Deutsche Bank Securities, Inc. | Managing Director, Real Estate Investment Banking | 2005–2009 | Senior leadership in real estate IB |
| Merrill Lynch & Co., Inc. | Director, Real Estate Investment Banking | 1998–2005 | Director-level real estate IB |
External Roles
None disclosed in the proxy for Hagan (no public company board roles listed) .
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | $600,000 | $650,000 |
| Total Target Direct Compensation ($) | $3,250,000 | $3,700,000 |
Annual Incentive (STIP)
| Metric | 2023 | 2024 |
|---|---|---|
| Target STIP ($) | — | $675,000 |
| Maximum STIP ($) | — | $1,485,000 |
| Actual STIP Earned ($) | $921,747 | $1,454,625 |
| % of Target Earned | — | 216% |
Time-Based Restricted Share Grants
| Grant Date | Shares | Grant-Date Value ($) |
|---|---|---|
| Feb 12, 2024 (for 2023 program) | 9,806 | $516,500 |
| Feb 18, 2025 (for 2024 program) | 10,750 | $593,750 |
Performance Shares (LTIP 2024–2026)
| Metric | Target Dollar Value ($) | Target Shares (#) | Grant Date |
|---|---|---|---|
| LTIP PSU Grant | $1,781,250 | 37,156 | Feb 12, 2024 |
Performance Compensation
STIP Framework (Company objectives weighted 70%; Individual 30%)
| Metric | Weight | Target | Actual 2024 | Payout Factor |
|---|---|---|---|---|
| AFFO per Share | 40% | $4.14 | $4.19 | 250% for metric |
| Fixed Charge Coverage | 20% | 4.2x | 4.7x | 200% for metric |
| Portfolio Occupancy | 10% | 98.3% | 98.7% | 200% for metric |
| Individual Objectives | 30% | Pre-set | Exceeded (for Hagan) | Committee determination |
Hagan’s 2024 individual achievements included executing strategic acquisitions (e.g., $770M 7‑Eleven sale-leaseback), expanding data center relationships, and improving acquisitions underwriting/reporting efficiency .
LTIP Framework (PSUs; 3-year performance; 1-year post-vesting service)
| Metric | Weight | Threshold | Target | Maximum |
|---|---|---|---|---|
| Relative TSR vs MSCI US REIT Index | 50% | 30th pct (50%) | 55th pct (100%) | ≥80th pct (200%) |
| Net Debt/Pro Forma Adjusted EBITDAre | 25% | 6.1x (50%) | 5.75x (100%) | ≤5.5x (200%) |
| Dividend/Share Growth | 25% | 3.0% (50%) | 5.0% (100%) | 7.0% (200%) |
Recent LTIP outcome (Award Year 2022, performance 2022–2024): total weighted PSU payout 139.5%; Hagan earned 29,750 PSUs vs 21,326 target; 50% vested immediately, 50% time-vest through Jan 1, 2026 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership (Mar 3, 2025) | 67,699 shares; includes 23,147 unvested restricted stock and 44,552 directly owned (less than 0.1% of shares outstanding) |
| Options | None outstanding (no exercisable/unexercisable options) |
| Stock Ownership Guidelines | 3× base salary; minimum 23,343 shares; owned 66,450; status: exceeds requirement |
| Anti-Hedging/Pledging | Company prohibits hedging and pledging; margin accounts and collateral pledges not permitted |
| Clawback Policy | Mandatory recovery for restatements; discretionary recovery for miscalculated metrics and fraud/intentional misconduct |
| Deferred Compensation | Executives may defer up to 75% base and up to 100% bonus/equity/other comp; distributions lump sum or installments per plan |
| Perquisites | Company states no perqs for NEOs; no excise tax gross-ups; limited medical benefit gross-up for SVP+ |
Vesting Schedules (Hagan’s specific future/recent vesting)
| Date | Shares |
|---|---|
| Jan 1, 2025 (vested) | 14,508 |
| Feb 15, 2025 (vested) | 2,452 |
| Feb 18, 2025 (vested) | 14,875 |
| Jan 1, 2026 | 18,040 |
| Feb 15, 2026 | 2,452 |
| Jan 1, 2027 | 1,877 |
| Feb 15, 2027 | 2,451 |
| Feb 15, 2028 | 2,451 |
Stock vested during 2024: 27,928 shares; value realized $1,532,837 .
Employment Terms
| Provision | Hagan (NEO other than CEO) |
|---|---|
| Employment Contract | None; company states no NEO employment contracts |
| Severance (Qualifying Termination) | 12 months base; average of last 3 cash bonuses; 12 months medical; immediate vesting of time-based equity; PSUs pro-rated to performance through termination |
| Change-in-Control + Qualifying Termination (Double Trigger) | 24 months base; 2× average of last 3 cash bonuses; 18 months medical; immediate vesting of time-based equity; PSUs pro-rated to performance through change-in-control |
| Change-in-Control (No Termination) | PSUs accelerate pro-rated to performance through change-in-control |
| Retirement Policy (≥60 years, ≥10 years service) | Full vesting of time-based awards; PSUs remain outstanding and vest pro-rata at actual performance; requires 6 months’ notice and release |
| Restrictive Covenants | Severance requires release and compliance with confidentiality/restrictive covenants; non-compete terms not disclosed |
Estimated payout scenarios for Hagan (as of 12/31/2024; stock $53.41):
- Qualifying Termination: $8,713,403 total
- Change in Control Termination: $10,558,430 total
- Change in Control (no termination): $5,836,227 (equity acceleration value)
- Death: $5,697,660 (incl. life insurance)
- Disability: $5,097,660
Performance & Track Record
- 2024 achievements: $3.9B investments at 7.4% initial cash yield; occupancy 98.7%; fixed charge coverage 4.7x; net debt/annualized pro forma Adjusted EBITDAre 5.4x; dividend/share +2.5%; AFFO/share $4.19 (record) .
- Hagan-specific highlights: led $770M 7‑Eleven sale-leaseback; expanded data center portfolio; improved acquisitions processes—supporting outsized STIP payout (216% of target) .
Compensation Committee, Peer Group & Say-on-Pay
- Independent consultant: Ferguson Partners Consulting L.P.; annual risk assessment; program emphasizes at-risk pay linked to financial and TSR metrics .
- Peer group (2024): 15 large REITs (e.g., Prologis, Digital Realty, Welltower); size-calibrated around O’s market cap; used to set target direct compensation .
- Say-on-Pay approval: 93.3% at 2024 annual meeting; consistently ≥90% since 2011 .
Compensation Structure Analysis
- Year-over-year increases: Hagan base salary rose to $650,000 (from $600,000); total target direct compensation to $3.7M (from $3.25M) to reflect increased platform scale and responsibilities .
- Mix and risk: Significant equity and performance-based components (PSUs with relative TSR, leverage and dividend growth) reinforce long-term alignment; no options granted in 2024 .
- Clawback/anti-pledging: Mandatory clawbacks and prohibition on hedging/pledging strengthen alignment and reduce governance risk .
Related Party Transactions
None in 2024 (policy requires Audit Committee review/approval) .
Equity Ownership & Alignment (Detail)
| Category | Shares |
|---|---|
| Directly Owned | 44,552 |
| Unvested Restricted Stock | 23,147 |
| Total Beneficial Ownership | 67,699 (less than 0.1% of outstanding) |
| Guideline Requirement | 23,343 shares (3× base salary) |
| Ownership vs Guideline | 66,450 shares; meets/exceeds |
Investment Implications
- Alignment: High at-risk pay, PSU design tied to TSR/leverage/dividend growth, ownership > guideline, and anti‑pledging/clawback policies indicate strong shareholder alignment and low governance risk .
- Retention and supply: Multi-year vesting through 2028 and retirement-friendly vesting could moderate near-term insider selling pressure; 2024 vesting was 27,928 shares, with upcoming scheduled vests totaling 25,792 shares across 2026–2028 .
- Performance signal: 2024 STIP at 216% and 2022–2024 PSU payout at 139.5% reflect execution on core financial metrics and balance sheet discipline (AFFO/share, coverage/leverage), supportive of long-term value creation in a net-lease REIT context .