David H. Lesser

About David H. Lesser

David H. Lesser is Chairman of the Board, Chief Executive Officer, Chief Financial Officer, Secretary, and Treasurer of Power REIT (PW). He has served as Chairman and CEO since December 2011 and as CFO/Secretary/Treasurer since February 2014 . He is 59 years old as of December 31, 2024 . Lesser holds an MBA and a BS in Applied Management and Economics from Cornell University . Under his leadership, PW pivoted toward controlled-environment agriculture (CEA) greenhouses, but the portfolio experienced severe headwinds; in 2024, PW reported revenue of $3.05 million (up from $2.22 million in 2023) and a net loss attributable to common shareholders of $25.36 million after impairments (Core FFO of -$3.88 million), reflecting continued distress and significant write-downs . Liquidity and solvency risks are elevated: the greenhouse loan (~$16.7 million at 12/31/24) is in default and subject to foreclosure, and management disclosed substantial doubt about going concern given liabilities far exceeding current assets .

Past Roles

External Roles

Fixed Compensation

Notes:

• Neither Lesser nor the CAO has an employment agreement; compensation approved by the Compensation Committee .
• Company emphasizes minimizing cash comp; executives are part-time .

Performance Compensation

Additional observations:

• No equity awards to Lesser in 2023 or 2024; last grants were in 2022 .
• Options appear far out-of-the-money versus stock price: $13.44 strike vs $1.33 on 12/31/24 .
• Company adopted a clawback policy (11/20/2023) for incentive-based compensation in restatement scenarios .

Equity Ownership & Alignment

Employment Terms

Board Governance

• Board composition: three independent trustees plus Lesser as Chairman; board is not staggered (annual elections) .
• Dual roles: Lesser is Chairman, CEO, CFO, Secretary, and Treasurer (concentration of power; not independent Chair) .
• Committees and activity:
  • Compensation Committee: Independent trustees (Chair: William S. Susman; member: Patrick R. Haynes III); no meetings during 2023 .
  • Nominating Committee: Independent trustees (Chair: Susman; members: D’Aguilar, Haynes); met once in 2023 .
  • Special Committee – Related Party Transactions: Independent trustees only (Chair: Susman; members: Haynes, D’Aguilar); did not meet in 2023 .
• Director compensation: Independent trustees received $0 in FY 2024; each had 10,000 stock options outstanding (July 15, 2022 grants) .
• Insider trading policy: prohibits hedging/pledging; applies to trustees and officers .

Performance & Track Record

Context:

• Strategy pivot to CEA greenhouses performed poorly; significant vacancy and defaults; assets marketed for sale; lender has initiated foreclosure on non-recourse greenhouse loan (~$16.7M) .
• Liquidity: $2.23M cash and restricted cash at 12/31/24; current liabilities ($17.4M) far exceed current assets; substantial doubt about going concern .
• Revenue concentration: Norfolk Southern Railway (32%), Regulus Solar (28%), Marengo Cannabis (28%) for 2024 .

Compensation Structure Analysis

• Cash vs equity mix: In 2023–2024 Lesser’s comp was entirely cash salary ($150k each year) with no bonus or new equity grants; in 2022 he received meaningful equity (20,000 RS and 150,000 options), suggesting a shift away from equity issuance amid distress and dilution concerns .
• Performance linkage: No disclosed quantitative performance metrics or target bonus plan; program relies on discretionary/occasional equity grants aimed at alignment with long-term value creation (FFO/dividends) but with no explicit weighting or annual targets .
• Clawback: Policy adopted (11/20/2023), enabling recoupment of incentive comp after restatements—important given identified control weaknesses and prior restatements .

Vesting Schedules and Insider Selling Pressure

• Options: 150,000 options vest monthly over 36 months from Aug 1, 2022 (exp. 7/15/2032; $13.44 strike); as of 12/31/24, 120,833 were exercisable and 29,167 unexercisable; with stock at $1.33 on 12/31/24, options were far out-of-the-money—reducing near-term exercise/sale pressure .
• Restricted stock: 3,889 unvested shares remained at 12/31/24 from the 2022 grant; vesting completes within the 36‑month schedule; market value $5,172 at $1.33 on 12/31/24—limited incremental supply impact .

Equity Ownership & Alignment Considerations

• Skin-in-the-game: Lesser’s 20.54% beneficial stake indicates material alignment; board previously granted an exemption to REIT ownership limits to Hudson Bay Partners and affiliates including Lesser (2014) .
• Hedging/pledging: Prohibited under policy, reducing misalignment risks tied to collateralized positions .
• Ownership guidelines: Not disclosed .

Related Party Transactions (Governance Red Flags)

• PW reported that four properties were leased to tenants controlled by MILC (where Lesser is Chairman & CEO), and a cogeneration vendor (IntelliGen) is owned by an affiliate of Lesser; $785,000 of rental income from affiliated tenants in 2024 reflected recognition of security deposits on defaulted leases; these leases are in default and tenants vacated .
• A Special Committee of independent trustees is tasked with vetting related-party transactions, but it did not meet in 2023 .

Risk Indicators & Red Flags

• Going concern risk and defaulted greenhouse loan with foreclosure proceedings; forbearance lapsed; liquidity shortfall .
• Material weaknesses in internal controls; misclassification of preferred equity historically; remediation ongoing .
• High key-person risk: PW explicitly cites dependence on Lesser; he is part-time and has other business interests that may create conflicts .
• Volatile stock and low trading volumes increase execution and capital-raising risks .
• Cannabis/CEA exposure with tenant defaults and vacancy; concentration risk .

Board Service History, Committees, and Dual-Role Implications

• Board tenure: Lesser has been Chairman since December 2011; also trustee/leader at PW’s rail subsidiary since 2009–2011 .
• Committees: Lesser does not serve on independent committees; Compensation and Nominating Committees are independent-led (Susman chair) .
• Dual roles: Combined Chairman/CEO/CFO/Secretary/Treasurer centralizes authority and impairs independence; independence mitigants include three independent trustees and a Special Committee for related-party matters, though 2023 committee activity was minimal .
• Director pay: Independent trustees received no cash/equity compensation in 2024; each retains prior option grants .

Say-on-Pay and Peer Benchmarking

• Not disclosed in recent proxies; no detail on compensation peer group, target percentile, or say‑on‑pay results .

Investment Implications

• Alignment: Lesser’s 20.5% ownership and prohibitions on hedging/pledging support alignment; however, concentrated insider control (dual Chairman/CEO/CFO) and related-party history raise governance risk premiums .
• Retention and incentives: No employment agreement or severance/CIC protections; cash pay is modest; 2022 equity is largely out-of-the-money; near-term selling pressure is limited, but lack of performance-tied incentives and minimal committee activity diminish pay-for-performance confidence .
• Trading signals: Governance and liquidity risks (going concern, defaulted loan, control weaknesses) overshadow insider alignment; equity awards being OTM reduces dilution from exercises but also weakens incentive value—investors may demand substantial discounts until balance sheet, tenant health, and internal control issues are credibly addressed .
• Watch items: Any Form 4s signaling accumulation/disposals; resolution of greenhouse loan/foreclosure; tenant re-leasing or asset sales; committee activity and governance enhancements (lead independent chair, separated CFO role); and progress on internal control remediation .

Sources: 2025 DEF 14A/embedded 10-K sections (including Items 10–12) and 2024–2023 DEF 14A filings for PW .