Jon Bortz
About Jon Bortz
Jon E. Bortz (age 68) is Chief Executive Officer and Chairman of Pebblebrook Hotel Trust (PEB) and has served as a trustee since December 2009. He is a Wharton-trained economist and an inactive CPA, with prior experience founding and leading LaSalle Hotel Properties and the hotel investment group at JLL, bringing deep REIT leadership and hotel asset management expertise to PEB . In 2024, PEB delivered Adjusted FFO per diluted share of $1.68 (+5% y/y), Same-Property Total Revenues +2.4% y/y, and Same-Property Hotel EBITDA of $350.4M (+0.9% y/y), while executing $1.6B in refinancing and extensions to strengthen liquidity and extend maturities . Pay-for-performance alignment features include 60% of long-term equity tied to 3-year TSR metrics (70% relative TSR vs a 10-REIT peer group, 30% absolute TSR; target at the 55th percentile; capped at 100% if TSR is negative) and annual cash incentives driven 90% by quantitative goals .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| LaSalle Hotel Properties (public lodging REIT) | Founder, President, CEO, Trustee; Chairman (from Jan 2001) | Apr 1998–Sep 2009 | Built and led a public lodging REIT through cycles; governance experience as Chairman |
| JLL (Jones Lang LaSalle) | Founder & President, Hotel Investment Group (from Jan 1994); MD, Investment Advisory (1995–1998); SVP, Investment (1990–1995) | 1981–Apr 1998 | Led hotel investment/development; overseer of investment projects and workouts |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Federal Realty Investment Trust (NYSE: FRT) | Trustee; Audit and Nominating/Governance Committees | Jun 2005–May 2021 | Public REIT board/committee experience |
| Nareit | Advisory Board of Governors; former Executive Committee and Governance/Nominating Committee | N/A | Policy influence and industry leadership |
| American Hotel & Lodging Association (AHLA) | Officer; Executive Committee; Chair of HotelPAC; former Chair of Board | 2018–present | Senior industry leadership; sets sector priorities |
Fixed Compensation
| Year | Base Salary ($) | Notes |
|---|---|---|
| 2022 | 750,000 | |
| 2023 | 789,750 | |
| 2024 | 817,000 | +3.5% vs 2023; base was 14% of target total |
Performance Compensation
2024 Annual Cash Incentive – Metrics, Targets, Results, Payout
| Metric (Weight) | Target | Actual | Payout contribution (% of target total) |
|---|---|---|---|
| Adjusted FFO/share (25%) | $1.40 | $1.68 | 62.5% |
| Gross proceeds from dispositions (20%) | $75M | $0M | 0.0% |
| Relative Hotel EBITDA per Key (10%) | 4th of 8 peers | 2nd of 8 | 25.0% |
| Portfolio RevPAR Penetration improvement (15%) | +50 bps | +10 bps | 0.0% |
| Corporate Sustainability & Responsibility (10%) | 10 of 14 objectives | 14 of 14 | 25.0% |
| Capital Markets & Balance Sheet (15%) | Address 2025 term loan plan; covenants | >250% of debt maturities addressed | 37.5% |
| Accounting & Compliance (5%) | No material weaknesses | No MWs | 5.0% |
| Total (formula) | 155.0% | ||
| Discretionary adjustment | (5.0%) | ||
| Final bonus as % of target | 150.0% | ||
| Final bonus ($) | Target $1,345,000 | Paid $2,017,500 | |
| All quantitative criteria set thresholds; total payout capped at 200% (or 100% if a material weakness); committee reduced payout to 150% given 2024 TSR . |
Long-Term Equity (2024 grants; 62% of CEO target total)
- Design: 60% performance-based (3-year cliff vest) and 40% time-based (1/3 on Jan 1, 2025/2026/2027) .
- Performance equity metrics: 70% Relative TSR vs 10 lodging REITs; 30% Absolute TSR; target at 55th percentile; max 200% but capped at 100% if TSR is negative .
| Grant type (Grant date 2/15/2024) | Threshold | Target | Maximum | Vesting | Grant-date fair value ($) |
|---|---|---|---|---|---|
| Performance Units | 71,810 | 143,620 | 287,240 | 3-year (to 12/31/2026) | 2,919,795 |
| Time-based LTIP units | — | 95,747 | — | 1/3 on 1/1/25, 1/1/26, 1/1/27 | 1,544,399 |
- 2022 PSU cycle: 32.0% of target earned in Feb 2025 (68% forfeited) .
Multi-year CEO Compensation (reported)
| Year | Salary ($) | Share/Unit Awards ($) | Actual Cash Incentive ($) | All Other Comp ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 750,000 | 3,359,507 | 1,552,838 | 61,785 | 5,724,130 |
| 2023 | 789,750 | 4,016,336 | 2,112,500 (incl. $65k discretionary) | 71,238 | 6,989,824 |
| 2024 | 817,000 | 4,464,194 | 2,017,500 | 78,320 (benefits, parking, charitable match) | 7,377,014 |
Perquisites 2024 detail: health $28,210; dental/life/LTD $17,564; 401(k) match $20,700; parking $1,800; charitable match $10,046 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 2,183,241 shares/LTIP units; 1.8% of shares outstanding; Bortz disclaims beneficial ownership of 200,000 shares |
| Vested vs unvested (LTIP units) | 255,397 vested; 260,734 unvested (subset of the above) |
| Outstanding awards at 12/31/2024 (examples) | Time-based (2/15/2024): 95,747 unvested; Maximum PSUs outstanding (2/15/2024): 287,240 |
| Ownership guidelines | CEO 5x salary; requirement ~$3.9M; Bortz value ~$26.2M; in compliance/exceeds |
| Hedging/Pledging | Hedging and pledging prohibited by policy (grandfather exceptions noted for a trustee, not for Bortz) |
| Upcoming vest events | Time-based tranches vest Jan 1, 2026 and Jan 1, 2027 (sell-to-cover potential) |
| 2024 shares/units vested | 172,131; realized value $2,758,573 (likely includes net share withholding) |
Employment Terms
| Provision | Key terms |
|---|---|
| Change-in-control (CIC) cash severance | 3x (salary + greater of last bonus or 3-year average); plus 3x benefits premiums (CEO); double-trigger for resignation for good reason or termination without cause |
| Non-CIC termination without cause | 1x (salary + greater of last bonus or 3-year average); plus 1x benefits premiums (CEO) |
| Equity acceleration | Time-based awards vest upon CIC, death/disability, good reason (with CIC), termination without cause, qualified retirement; PSUs vest at greater of target or formula outcome in those cases |
| Tax gross-up | Excise tax gross-up available under certain conditions (shareholder-unfriendly) |
| Non-solicit | 1-year non-solicitation following termination for cause or resignation without good reason |
| Auto-renewal | CIC agreements auto-extend annually unless notice given 6 months prior to term end |
| Clawback | Policy compliant with Rule 10D-1/NYSE; applies to incentive compensation |
| “Stay bonus” (post-CIC retention) | If still employed 1-year post-CIC: lump-sum equal to base salary + greater of last or 3-year average bonus (CEO estimated $2,834,500 if CIC 12/31/2024) |
Estimated payout sensitivities (as of 12/31/2024):
- CIC + termination w/o cause or good reason: Cash $10,749,475; equity acceleration $8,653,762; excise gross-up $7,186,413; total $26,589,650 (CEO) .
- Non-CIC termination without cause: Cash $4,798,928; equity acceleration $8,653,762; total $13,452,690 (CEO) .
Board Governance (Director Service and Dual-Role Implications)
- Current role: Chairman and CEO; not independent; serves on no board committees .
- Governance mitigants to combined Chair/CEO: Lead Independent Trustee (Bonny W. Simi) sets agendas for executive sessions; independent trustees meet at least quarterly without management .
- Board independence and attendance: 6 of 7 trustees are independent (86%); each trustee attended 100% of 2024 board meetings; executive sessions were held at each of 4 regular meetings .
- Committees (all independent): Audit; Compensation; Nominating/Governance (members and chairs disclosed) .
- Say-on-Pay support: >90% approval in 2024; long-term average ~90% .
- Anti-pledging and anti-hedging policies in place; proxy access and strong shareholder rights (3/3/20/20) .
Performance & Track Record
- 2024 operating/financial results: Adjusted FFO/share $1.68 (+5% y/y); Same-Property Total Revenues +2.4%; Same-Property Hotel EBITDA $350.4M (+0.9% y/y) .
- Balance sheet execution: $1.6B in 2024 debt financings/extensions (incl. $400M 6.375% unsecured notes), with ~$217.6M cash and ~$642.6M revolver availability at year-end; reduced maturities until Dec 2026 .
- Strategic capital allocation: Completed ~$91M of 2024 capex and a multi-year ~$525M reinvestment cycle; reduced go-forward capex to $65–$75M in 2025 .
- 2025 macro/portfolio outlook: Company projects Adjusted FFO/share $1.50–$1.62; LA wildfire impact estimated to reduce full-year Same-Property RevPAR by ~115 bps and EBITDA by ~$9M .
Compensation Structure Analysis
- Mix and risk: CEO target comp mix emphasizes at-risk pay and equity: base 14%, cash bonus 24%, long-term equity 62%; 60% of LTI is performance-based with a single 3-year measurement period—no one-year tranches (higher alignment, less short-term gaming) .
- Stringent metrics and caps: Annual bonus metrics are objective/quantitative (90% of bonus); each has thresholds; payout capped at 200% and to 100% if a material weakness; committee used negative discretion (reduced payout due to TSR) .
- Governance positives: Robust clawback, anti-hedging/pledging, ownership guidelines (CEO 5x salary; CEO exceeds) .
- Red flags: Excise tax gross-up eligibility in CIC is shareholder-unfriendly; single-trigger equity vesting on CIC for time-based awards (though PSU vesting references target/formula) can be viewed as generous relative to best practices .
Risk Indicators & Red Flags
- CIC economics: High total potential payout with gross-up; accelerations on CIC increase perceived golden parachute risk .
- Concentration exposure: LA fires expected to impact 2025 RevPAR/EBITDA; ongoing San Francisco softness; portfolio concentration-related volatility persists .
- No options repricing history and explicit anti-repricing in plan (positive) .
Compensation Peer Group (for incentives)
- TSR peer group (10 lodging REITs): APLE, CLDT, DRH, HST, PK, RLJ, RHP, INN, SHO, XHR; relative TSR target at 55th percentile; absolute TSR also used (30% weight) with negative-TSR cap .
- Annual cash metric “Relative Hotel EBITDA per Key” benchmarked vs eight full-service peers listed in the proxy (used for 10% weighting) .
SAY-ON-PAY & Shareholder Feedback
- 2024 say-on-pay approval >90%; average since 2011 ~90%; 2023 design changes adopted based on outreach and maintained in 2024 (e.g., no special retention awards; all objective metrics; 3-year PSUs without single-year tranches) .
Investment Implications
- Alignment: Strong performance linkage (3-year TSR-heavy PSUs, objective annual metrics, negative discretion used) and significant personal ownership (1.8% of shares; exceeds 5x salary guideline) support alignment with shareholders .
- Event risk: CIC protections (3x multiple, full time-based equity acceleration, excise gross-up) raise potential change-of-control costs; monitor shareholder sentiment on gross-ups and any proxy advisor feedback .
- Trading/flow considerations: Time-based tranches vest on Jan 1 of 2026 and 2027 and may drive sell-to-cover flows; 2024 saw 172,131 shares/units vest for the CEO .
- Execution track record: 2024 debt actions, capex completion, and cost control underpin 2025 outlook; main external risk is demand drag in Los Angeles and lingering urban softness (San Francisco) .