Michael D. McKee
About Michael D. McKee
Independent Non-Executive Chairman of the Board at Realty Income (O); age 79; director since 1994; Non-Executive Chairman since 2012; member of the Compensation & Talent and Nominating/Corporate Governance Committees; determined independent by the Board . Background includes Principal at The Contrarian Group (since 2018), former Executive Chairman of HCP/Healthpeak Properties, CEO of Bentall Kennedy (U.S.), multiple senior roles at The Irvine Company, and partner at Latham & Watkins; education: J.D. (UCLA), M.A. (USC), B.A. (Azusa Pacific) . The Board maintains a split Chair/CEO structure, with McKee presiding as lead independent director and liaison to management .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| The Contrarian Group | Principal | Mar 2018 – present | Real estate and governance advisory experience enhances board oversight |
| Healthpeak Properties (f/k/a HCP, Inc.; NYSE: DOC) | Executive Chairman; Director | Exec Chair: May 2016 – Mar 2018; Director: 1989 – Apr 2018 | Public REIT leadership, transactions, REIT compliance insights |
| Bentall Kennedy (U.S.) | Chief Executive Officer | Feb 2010 – Apr 2016 | Institutional real estate investment leadership |
| The Irvine Company (private) | EVP; CFO; COO; CEO; Vice Chairman | EVP 1994–1999; CFO 1997–2001; COO 2001–2007; CEO 2007–2008; Vice Chair 1999–2008 | Broad operating, finance, and strategic planning experience |
| Latham & Watkins | Partner | 1986 – 1994 | Legal, capital markets, M&A, and securities expertise |
External Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| First American Financial Corporation (NYSE: FAF) | Director | Since 2011 | Current public company directorship; network interlock with O director Reginald H. Gilyard who also serves on FAF’s board |
| Tiger Woods Foundation | Director | Since 2006 | Non-profit governance |
| Seattle Pacific University | Director | 2017 – 2022 | Higher ed governance |
| Bentall Kennedy (U.S.) | Director | 2008 – 2012 | Real estate investment oversight |
| The Irvine Company | Director | 1998 – 2008 | Private company board experience |
| Hoag Hospital Foundation | Director | 1999 – 2008 | Healthcare non-profit governance |
Board Governance
- Role: Non-Executive Independent Chairman since 2012; presides as lead independent director and liaison to management; Board has maintained separate Chair/CEO roles since 1997 .
- Independence: Board determined all directors except the CEO are independent .
- Committee assignments: Compensation & Talent Committee (member); Nominating/Corporate Governance Committee (member) .
- Board/Committee activity and attendance: Board met 8 times in 2024; all directors attended at least 75% of Board and relevant committee meetings; all directors attended the 2024 annual meeting; McKee presides over executive sessions of independent directors .
- Committee meeting cadence (2024): Audit (7); Compensation & Talent (6); Nominating/Corporate Governance (4) .
- Shareholder engagement: McKee and the Nominating/Corporate Governance Chair participated in specific investor calls as part of outreach (~75% of shares, ~250 firms) .
Fixed Compensation
| Component | Amount/Structure | Notes |
|---|---|---|
| Annual cash retainer (Board member) | $35,000 (2024); increases to $100,000 effective as of 2025 Annual Meeting | Increase based on consultant (FPC) recommendation |
| Non-Executive Chair retainer | $125,000 (2024); increases to $150,000 effective as of 2025 Annual Meeting | Paid in cash |
| Committee chair retainers | Audit: $35,000; Compensation & Talent: $25,000; Nominating/Corp Gov: $25,000 | Paid in cash |
| Committee member retainers | Audit: $17,500; Compensation & Talent: $15,000; Nominating/Corp Gov: $15,000 | Paid in cash |
| Equity retainer | 4,000 restricted shares in 2024; proposal to change to $200,000 value starting 2025 | Subject to stockholder approval; number of shares determined by grant-date price |
| Vesting (director equity) | Based on years of service: <6 yrs: 1/3 per year over 3 years; 6 yrs: 1/2 per year over 2 years; 7 yrs: 100% at 1 year; ≥8 yrs: immediate | Time-based only; service-contingent |
| Deferred compensation | Directors may defer up to 100% of retainers and equity (effective Dec 1, 2024) | Paid in lump sum or installments per election |
| 2024 Director Compensation – Michael D. McKee | Amount ($) |
|---|---|
| Fees earned or paid in cash | 190,000 |
| Stock awards (4,000 shares at $51.75 grant-date price) | 207,000 |
| All other compensation | — |
| Total | 397,000 |
Notes: 2024 equity grant vests immediately for ≥8 years of service; McKee held no unvested restricted stock as of 12/31/2024 . Directors are reimbursed for travel and continuing education expenses .
Performance Compensation
| Item | Detail |
|---|---|
| Performance-based elements for non-employee directors | None; director equity is time-based only; vesting per tenure schedule, not performance metrics |
| Clawback applicability | Company maintains a mandatory clawback policy (SEC/NYSE compliant). Plan documents subject awards to any Company clawback policy; policy primarily covers executive officers and other covered employees |
For context (executive incentive metrics used by the Compensation & Talent Committee; not applicable to director pay):
| Plan | Metric | Weight |
|---|---|---|
| STIP (annual) | AFFO per Share | 40% |
| STIP (annual) | Fixed Charge Coverage Ratio | 20% |
| STIP (annual) | Portfolio Occupancy | 10% |
| STIP (annual) | Individual Objectives | 30% |
| LTIP (3-year) | TSR ranking vs MSCI US REIT Index | 50% |
| LTIP (3-year) | Dividend per Share Growth Rate | 25% |
| LTIP (3-year) | Net Debt-to-Pro Forma Adjusted EBITDAre | 25% |
Other Directorships & Interlocks
| Company | Type | Role | Interlock/Comments |
|---|---|---|---|
| First American Financial (NYSE: FAF) | Public | Director (since 2011) | Network interlock: O director Reginald H. Gilyard also serves on FAF’s board |
| Tiger Woods Foundation | Non-profit | Director (since 2006) | — |
Board service limits: O’s Corporate Governance Guidelines cap public boards at ≤5 (≤4 if serving as a chair/lead independent elsewhere) .
Expertise & Qualifications
- Real estate operations, REIT governance/compliance, acquisitions, and public and private capital markets; legal expertise from prior partner role at Latham & Watkins .
- Education: J.D. (UCLA School of Law), M.A. (USC), B.A. in Psychology (Azusa Pacific) .
- Board skills matrix highlights the Board’s real estate, governance, and financial expertise; McKee’s Board tenure 31 years; age 79 (as of Mar 26, 2025) .
Equity Ownership
| Holder | Shares Beneficially Owned | % of Class | Ownership Breakdown |
|---|---|---|---|
| Michael D. McKee | 169,500 | <0.1% | 137,200 shares (McKee Family Trust); 6,400 (MCR Holdings, LLC); 6,400 (MCC Ventures, LLC); 19,500 (IRA) |
Additional alignment/policy details:
- Director stock ownership guidelines: 5x annual cash retainer; as of 12/31/2024, target = $175,000 (5×$35,000) = 3,277 shares at $53.41; all directors met requirements as of that date .
- Effective at the 2025 Annual Meeting, cash retainers increase (member $100,000; Chair $150,000), which implies a higher guideline dollar target going forward under the same formula .
- Anti-hedging/anti-pledging: Directors are prohibited from hedging, shorting, derivative transactions, margin purchases, and pledging company stock .
- Section 16 compliance: No delinquent filings in 2024 .
- Related-party transactions: None in 2024; Audit Committee oversees policy .
Governance Assessment
-
Strengths
- Independent Non-Executive Chairman with deep REIT and capital markets expertise; clear separation of Chair/CEO roles; McKee presides over independent executive sessions .
- Active shareholder engagement (Board-level participation), strong say-on-pay support (93.3% in 2024), and independent compensation consultant oversight (FPC) .
- Robust alignment mechanisms: substantial equity component of director pay, stock ownership guidelines met, and prohibitions on hedging/pledging; clawback framework in place (awards subject to policy) .
- Board/committee independence and activity levels (Audit 7; Comp & Talent 6; Nominating 4; Board 8) support effective oversight .
- No related-party transactions disclosed for 2024; clean Section 16 record .
-
Watch items / RED FLAGS
- Long tenure (31 years) can raise refresh/independence-perception considerations; the Board reports ongoing refresh initiatives (four new directors since 2021) .
- 2024 director election support was solid but not unanimous for McKee (586.36M For; 32.58M Against; 0.96M Abstentions), suggesting some investor scrutiny of board leadership/tenure .
- Director compensation structure is being increased in cash and reset to a fixed $200,000 equity value (if approved), which enhances predictability but modestly increases fixed cash relative to equity; Board cites alignment with peer practice .
-
Interlocks/Conflicts
- Interlock: McKee and O director Reginald H. Gilyard both serve on First American Financial’s board; not an identified conflict at O, but relevant for information flow/network analysis .
- Audit Committee reviews related-party transactions; none in 2024 .
Net investor-confidence signal: Independent chair structure, strong engagement, high say-on-pay support, and no related-party/Section 16 issues are positives; tenure and incremental cash retainer increase warrant monitoring, but equity ownership and policy guardrails (anti-hedging/pledging, clawback) support alignment .