Michael J. Escalante
About Michael J. Escalante
Michael J. Escalante, age 64, is Chief Executive Officer, President, and a trustee of Peakstone Realty Trust, serving in these roles since 2019; he holds an MBA from UCLA and a BS in Commerce (finance and accounting) from Santa Clara University . Under his leadership, PKST is executing a multi‑year transformation into an industrial‑focused REIT, expanding IOS assets and reducing leverage; industrial ABR reached 60% after Q3 2025 and net debt/Adjusted EBITDAre improved to 5.4x in Q3 2025 from 6.4x in Q2 2025 . Pay-versus-performance shows CEO Compensation Actually Paid of $5.54M in 2024 alongside a cumulative TSR value of $106 per $100 initial investment (peer group $107), reflecting sensitivity of pay outcomes to shareholder experience .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Peakstone Realty Trust | CEO, President, Trustee | 2019–present | Leads industrial transformation, leverage reduction and IOS growth |
| Griffin Capital Essential Asset REIT, Inc. (PKST predecessor) | CEO; President; Trustee; CIO; Vice President | 2015–2019 (Trustee, President); 2018–2019 (CEO); 2008–2018 (CIO); 2008–2014 (VP) | Led capital allocation, portfolio management across net lease/office |
| Griffin Capital Company, LLC (former sponsor) | Chief Investment Officer | 2006–2018 | Institutional investment leadership |
| Escalante Property Ventures | Founder | 2005–2006 | Value-add/development-oriented investments in western US |
| Trizec Properties, Inc. | EVP – Capital Transactions & Portfolio Mgmt, Western U.S. | 1997–2005 | Portfolio optimization/capital transactions at large office REIT |
| The Yarmouth Group | Acquisitions, Asset & Portfolio Mgmt | 1987–1997 | Institutional real estate asset management |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| GIA Real Estate Fund & former Griffin American Healthcare REIT entities | Investment Committee Member | 2014–2020 | Investment oversight |
| Urban Land Institute | Full Member | Since 1998 | Industry engagement |
| Education | MBA (UCLA); BS Commerce (Santa Clara Univ.) | — | Finance and accounting emphasis |
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 925,000 | 925,000 | 925,000 |
| Annual Bonus ($) | 2,312,500 | — | — |
| All Other Compensation ($) | 752,711 | 412,631 | 425,431 |
| Total Compensation ($) | 7,490,209 | 7,843,857 | 7,162,931 |
2024 All Other Compensation detail:
| Item | Amount ($) |
|---|---|
| Employer contributions to Executive Deferred Compensation Plan | 161,875 |
| Employer contributions to 401(k) Plan | 66,450 |
| Distribution equivalent payments on RSUs | 181,796 |
| Health insurance premiums (spouse and dependents) | 12,970 |
| Life insurance premiums | 2,340 |
| Total | 425,431 |
Base salary has not increased since listing (April 13, 2023) as part of pay-for-performance alignment .
Performance Compensation
Annual Cash Incentive Program design and outcomes:
- Opportunity levels for CEO: Threshold 175% of salary, Target 250%, Maximum 325% .
- 2024 actual payout: $2,312,500 (250% of $925,000), reflecting committee’s negative discretion and alignment with shareholder experience; prior year payout was $3,006,250 .
- 2024 program comprised a Base Bonus tied to operating as a listed REIT and an Outperform Bonus tied to strategic goals (IOS portfolio acquisition, $317M non-core dispositions, credit facility amend/extend, leasing, investor engagement) .
Equity awards (time-vesting RSUs, granted for 2023 performance):
| Grant Date | Instrument | Grant Value ($) | Units (#) | Vesting Schedule |
|---|---|---|---|---|
| 4/1/2024 | RSUs | 3,500,000 | 216,987 | 1/3 on 12/31/2024; 1/3 on 12/31/2025; 1/3 on 12/31/2026, subject to service; includes distribution equivalent rights |
Vesting status and near-term supply indicators:
- Vested: 72,329 RSUs on 12/31/2024 (1/3 of 216,987) .
- Unvested: 144,658 RSUs scheduled for 12/31/2025 and 12/31/2026 in equal tranches, subject to continued service; cash settlement possible if share limits would be exceeded .
- 2025 design: 50% of the annual cash incentive tied to pre‑established financial and operational targets (remaining portion based on company and individual performance) .
Pay-versus-performance overview:
| Year | CEO SCT Total ($) | CEO Compensation Actually Paid (CAP) ($) | Company TSR (Value of $100) | Peer Group TSR (Value of $100) | Net Income (Loss) ($000s) | Net Debt/Normalized EBITDAre (x) |
|---|---|---|---|---|---|---|
| 2020 | 3,336,464 | 3,105,815 | N/A | N/A | (5,774) | 8.4x |
| 2021 | 8,834,455 | 8,992,544 | N/A | N/A | 11,570 | 7.4x |
| 2022 | 7,490,209 | 6,518,679 | N/A | N/A | (441,382) | 7.7x |
| 2023 | 7,843,857 | 3,192,694 | 171 | 107 | (605,102) | 6.2x |
| 2024 | 7,162,931 | 5,539,889 | 106 | 107 | (11,363) | 7.5x |
Equity Ownership & Alignment
| Holder | Beneficial Ownership (Common + OP Units) | % of Common Shares | % of Common + OP Units | Notes |
|---|---|---|---|---|
| Michael J. Escalante | 228,496 | <1% | <1% | Excludes spouse’s shares; RSU award from 3/25/2021 delivered 3/25/2025 included |
Alignment policies and practices:
- Stock ownership guidelines: CEO required to hold 5x base salary; assessed annually using the greater of highest closing price in prior year or first trading day of new year .
- Anti‑hedging/anti‑pledging policy: Prohibits options, short sales, hedging/monetization, margin accounts, and pledging, except grandfathered/approved pledges; no executive/trustee pledges known .
- Clawback: NYSE‑compliant Policy for Recovery of Erroneously Awarded Compensation adopted Oct 2, 2023; plan documents explicitly subject awards to recovery policies .
Employment Terms
Key terms of Amended and Restated Employment Agreement (effective at listing):
- Initial term: 5 years from April 13, 2023; auto‑renews annually thereafter unless notice .
- Base salary: $925,000, subject to annual review for increases (no decreases) .
- Annual incentive opportunity: 175%/250%/325% of base at threshold/target/max; committee sets opportunities for 2024+ .
- Equity: Eligible for committee‑determined awards .
- Restrictive covenants: Customary non‑compete, non‑disparagement, and other covenants .
Severance and change‑in‑control economics (as of 12/31/2024 assumptions):
| Scenario | Pro‑Rated Incentive Bonus ($) | Base Severance ($) | Accelerated RSU Vesting ($) | Other (Healthcare etc.) ($) | Total ($) |
|---|---|---|---|---|---|
| Death/Disability | 2,312,500 | — | 1,848,484 | 61,067 | 4,222,051 |
| Without Cause / Good Reason (no CIC) | 3,006,250 | 9,712,500 | 1,848,484 | 61,067 | 14,628,301 |
| Without Cause / Good Reason in connection with CIC or Liquidation Event termination | 3,006,250 | 9,712,500 | 1,848,484 | 91,601 | 14,658,835 |
| CIC without termination | — | — | 1,848,484 | — | 1,848,484 |
Additional CIC provisions:
- Without termination: automatic vesting of outstanding equity at greater of target or actual performance for incomplete periods .
- With termination (double trigger): pro‑rated bonus based on greater of actual or target company performance and 36 months of healthcare; base severance equals 3x salary plus average of prior two years’ target incentive .
- Liquidation Event: triggers CIC‑equivalent benefits and requires reserving sufficient assets to promptly pay amounts due .
Board Governance
- Role: Trustee since 2019; serves on no board committees; as CEO/trustee, he is not independent under NYSE definitions .
- Oversight: Board committees (Audit, Compensation, Nominating & Corporate Governance) are fully independent; independent Chairperson is Casey Wold; Compensation and Audit Committees chaired by independent trustee Samuel Tang .
- Committee activity: Audit met 6 times in 2024; Compensation met 8 times; Nominating met 3 times .
- Director compensation policy applies to non‑employee trustees; executive trustee compensation is covered under executive program .
Compensation Peer Group and Governance
- Independent consultant: Ferguson Partners advises the Compensation Committee; independence assessed with no conflicts .
- Peer group methodology: Balanced by size, strategy (industrial/office/net lease), and geography; no targeted percentile for any element .
- Peer group changes (2025 vs 2024): Removed larger/non‑comparable REITs (e.g., TRNO, ESRT, CTRE, EQC, JBGS); added comparably sized growth REITs (SILA, AIV) .
Say‑on‑Pay & Shareholder Feedback
- 2024 Say‑on‑Pay approval: 83% of votes cast supported NEO compensation .
- Engagement: Management and the Audit/Compensation Chair met with holders representing ~20% of outstanding shares to discuss governance, compensation, portfolio transition, capital allocation; actions included enhanced disclosure, reduced payouts/grants, and 50% of 2025 annual incentive tied to pre‑set metrics .
Equity Ownership & Vesting Calendar (Insider Supply Watch)
- Upcoming vesting cliffs: RSUs vest on 12/31/2025 and 12/31/2026 in equal tranches from the 4/1/2024 grant; remaining unvested 144,658 units as of 12/31/2024, subject to continued employment .
- Anti‑pledging/hedging policy materially reduces hedging/monetization risk; no reported pledges by executives/trustees .
Employment Terms – Additional Benefits
- Group welfare: CEO receives full cost coverage for spouse and dependents under company medical plan per agreement .
- Deferred compensation: CEO fully vested in Executive Deferred Compensation Plan account as of 12/31/2024 .
Investment Implications
- Pay-for-performance alignment has tightened: target cash payout in 2024 with explicit negative discretion and reduced year-end equity award values vs prior year; 2025 design increases formulaic weighting, raising transparency of KPIs and potential for performance‑linked volatility in payouts .
- Retention vs shareholder-friendly severance: A sizable double‑trigger CIC package (3x salary+average target bonus, 36 months healthcare, equity acceleration) indicates strong retention economics but creates potential transaction‑related dilution/expense; the Liquidation Event clause requiring asset reservation for severance is a notable governance sensitivity for downside scenarios .
- Insider supply considerations: Two remaining RSU tranches vest on 12/31/2025 and 12/31/2026; combined with distribution equivalents, these dates may correlate with Form 4 activity and near‑date trading signals; policy prohibits hedging/pledging, mitigating alignment concerns .
- Alignment and skin-in-the-game: Beneficial ownership is <1% of shares; ownership guidelines require 5x salary for CEO, but compliance status isn’t disclosed—investors should monitor future proxies for guideline compliance and any changes in ownership posture .
- Strategy execution still a primary lever: Industrial transformation milestones (industrial ABR 60% post‑Q3, IOS leasing growth) and leverage reduction to 5.4x Adjusted EBITDAre support medium-term value creation; watch continued IOS acquisitions/dispositions, Core FFO/AFFO trends, and ND/Adjusted EBITDAre trajectory for compensation‑linked KPIs and performance outcomes .