H. Michael Schwartz
About H. Michael Schwartz
H. Michael Schwartz (age 58) is Chairman and Chief Executive Officer of SmartStop Self Storage REIT, Inc. (SMA). He has served on the board since formation (January 2013), was CEO from 2013–2019, Executive Chairman 2019–Apr 2021, and resumed CEO in Apr 2021 . Education: B.S. in Business Administration (Finance), University of Southern California . Recent performance metrics disclosed in the proxy: cumulative value of a $100 investment reached $108.23 in 2024; peer group $117.56 . Same-store NOI growth was -1.7% (2024), “FFO, as adjusted” per share was $1.70, and G&A expense was $29.4 million . Company net income for 2024 was a loss of $5.887 million .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SmartStop Self Storage REIT, Inc. (SMA) | CEO; Executive Chairman; Director | CEO 2013–2019; Exec Chair 2019–Apr 2021; CEO since Apr 2021; Director since 2013 | Founder-operator; led self-administration and M&A integrations (SSGT, SST IV, SSGT II) |
| SmartStop Self Storage, Inc. (SST I) | CEO, President, Chairman | Aug 2007–Oct 2015 | Built platform; executed merger with Extra Space Storage (EXR) |
| Strategic Asset Management I, LLC (SAM) | CEO | Ongoing | Former sponsor; oversight of affiliated programs; related-party interactions with SMA |
| Strategic Storage Growth Trust I/II/III (SSGT/SSGT II/SSGT III) | CEO/President/Chairman | Various (pre-merger acquisition dates: 2019, 2022; III ongoing) | Sponsored growth REITs; SMA acquired I/II; continues to lead III |
| Strategic Storage Trust IV (SST IV) | CEO/President/Chairman | Until merger with SMA (Mar 2021) | Strategically grew non-traded self-storage REIT; merged into SMA subsidiary |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Strategic Storage Growth Trust III, Inc. (SSGT III) | CEO, President, Chairman | Current | Expansion platform; pipeline for SMA-managed programs |
| Strategic Storage Trust VI, Inc. (SST VI) | CEO, President | Current | Sponsor-funded offering; potential operating synergies; financing arrangements |
| Strategic Student & Senior Housing Trust, Inc. (SSSHT) | Chairman of the Board | Current | Diversification across student/senior housing |
Fixed Compensation
Multi-year compensation summary (CEO):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 625,000 | 625,000 | 625,000 |
| Discretionary Bonus ($) | — | — | 191,000 |
| Annual Incentive Paid ($) | 961,875 | 303,750 | 479,318 |
| Equity Awards Grant-Date FV ($) | 1,900,000 | 3,800,000 | 3,800,000 |
| All Other Compensation ($) | 12,997 | 13,997 | 14,597 |
| Total ($) | 3,499,872 | 4,742,747 | 5,109,915 |
Notes:
- 2024 discretionary bonus recognized for strategic projects (including pursuit of public listing) .
- CEO pay ratio 133:1 for 2024 (CEO total $5,109,915 vs median employee $38,471) .
Performance Compensation
Short-Term Incentive Program (2024) – CEO weighting and targets:
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|---|
| Same-Store NOI Growth | 30% | -1.2% | 1.0% | 3.2% | -1.7% | Overall cash bonus: 71% of target ($479,318 vs $675,000) | Cash (2024) |
| FFO, as adjusted (per share) | 30% | $1.64 | $1.88 | $2.12 | $1.70 | Overall cash bonus: 71% of target | Cash (2024) |
| G&A Expense (millions) | 10% | $32.6 | $31.1 | $29.5 | $29.4 | Overall cash bonus: 71% of target | Cash (2024) |
| Strategic/Individual Goals | 30% | 75% of target | 100% | 125% | Qualitative | Overall cash bonus: 71% of target | Cash (2024) |
Long-Term Incentive Program (LTIP) design and outcomes:
| Component | Weight | Metric/Peer Set | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|---|
| Performance-based LTIP | 33% | Relative 3-year avg same-store revenue growth vs PSA/EXR/CUBE/NSA | 3rd place (100%) | 3rd place | Target | Vested Mar 13, 2025: 9,010 LTIP units (CEO) |
| Time-based LTIP | 67% | Service vesting | — | Ongoing | Ratable | Pro-rata over 4 years; first tranche each Dec 31 of grant year |
Approved LTIP grant levels (2024–2026 cycle) – CEO:
| Award Type | Grant-Date FV ($) | Performance Payout Range (FV $) | Target Total ($) |
|---|---|---|---|
| Time-based | 2,546,000 | — | — |
| Performance-based | 1,254,000 | 0 (last place) to 2,508,000 (max) | 3,800,000 |
Equity Ownership & Alignment
| Item | Amount |
|---|---|
| Total beneficial ownership (shares + OP Units) | 2,832,480 (4.9% of outstanding) |
| Common stock (direct/indirect) | 168,121 (incl. 120,806 Class A via SmartStop OP Holdings LLC; 29,315 via family trust; 18,000 via LLC/trust) |
| OP Units (convertible into common) | 2,664,359 (incl. 2,494,220 via SmartStop OP Holdings LLC; 170,091 via family trust; 18 via SS Toronto REIT Advisors, Inc.) |
| Recent insider purchase | 18,000 shares at $30.00 in April 2025 public offering ($540,000) |
| Outstanding unvested time-based LTIP (CEO) | 35,231 units from 3/7/2024 grant (post first tranche vest) |
| Outstanding unvested performance LTIP (CEO) | 23,137 units from 3/7/2024 grant (target-level as of 12/31/2024) |
| Ownership guidelines | CEO must hold ≥5x base salary; compliance window 5 years from April 1, 2025 |
| Hedging/Pledging | No hedging policy in place; no pledging disclosure identified |
Vesting supply considerations:
- Time-based LTIP vests pro-rata over 4 years with first vest Dec 31 of grant year; scheduled vests through 2027 may create periodic supply .
- Performance LTIP for 2023–2025 and 2024–2026 cycles expected to settle by Mar 2026 and Mar 2027 subject to peer-based outcomes .
Employment Terms
| Provision | Details |
|---|---|
| Severance multiples | CEO: 2.0x salary + average bonus (last 3 years) for without cause/Good Reason; 3.0x in 12 months post-Change of Control (CoC), lump sum |
| Healthcare continuation | Paid for the same duration as severance multiple |
| Equity treatment (no CoC termination) | Unvested time-based equity that would vest in next 12 months accelerates; performance awards remain outstanding and may vest pro rata based on performance/outcome |
| Equity treatment (CoC) | Time-based awards vest immediately prior to CoC; performance awards vest based on actual achievement if not assumed; if assumed and termination within 12 months, pro rata vesting on outcome |
| Excise tax gross-up | Provided pre-listing; removed upon listing event; table scenarios include gross-up |
| CEO illustrative payouts (Dec 31, 2024) | Without cause/Good Reason total $6,567,515; CoC total $13,751,661; Death/Disability total $6,763,699 |
| Definitions | “Cause,” “Good Reason,” “Change of Control” defined (material diminution, relocation >30 miles, etc.) |
| Restrictive covenants | Confidentiality (indefinite), non-compete during employment, non-solicit post-termination: 18 months for CEO/President; 12 months CIO/CAO; 9 months others; non-disparagement |
Board Governance
- Board service: Schwartz is Chairman and CEO; director since 2013 . Board held 11 meetings in 2024; all directors attended ≥75% of meetings/committees .
- Committees: Audit (Chair: David J. Mueller; members Mueller, Morris, Perry; Mueller is “financial expert”) ; Compensation (Chair: Timothy S. Morris; members Morris, Mueller, Perry) ; Nominating & Corporate Governance (Chair: Harold “Skip” Perry; members Perry, Mueller, Morris) .
- Independence: Four independent directors; majority independent per NYSE/SEC rules .
- Dual-role implications: Company combines CEO and Chairman roles; mitigated by Lead Independent Director role (Harold “Skip” Perry) with responsibilities including executive sessions, agenda setting, CEO evaluation, shareholder communications . Notably, company lacks a hedging policy for officers/directors at this time .
- Director compensation (Schwartz as employee director): no cash/equity director fees; $245 for life insurance premiums .
Related Party Transactions and Interlocks
- SAM (former sponsor/affiliates): Schwartz is CEO of SAM; Administrative Services Agreement with mutual reimbursements (Company incurred ~$0.8M; received ~$0.2M in 2024; receivable ~$12k at year-end) . Former transfer agent affiliated with SAM received $150,000 transition fee upon termination (Apr 29, 2024) .
- Managed REIT platform: Sponsor Funding Agreement with SST VI; SmartStop REIT Advisors funded front-end loads/stock dividend reimbursement; ~1.0M Series C units issued through 12/31/2024; max remaining commitment ~$61.2M .
- Property management: SMA manages a property with SAM minority interest; ~$143,000 fees in 2024 .
- April 2025 offering: Schwartz purchased 18,000 shares at $30.00 via issuer-directed allocation; CAO purchased 6,000 shares via Directed Share Program .
Compensation Committee Analysis
- Pay mix: ~88% of CEO’s total target compensation “at risk” (variable/long-term) .
- Peer groups: Size-Based Peer Group (13 REITs) and Direct Competitor Peer Group (PSA, EXR, CUBE, NSA) used for benchmarking/performance measurement; compensation referenced to medians with qualitative adjustments .
- Long-term metrics: Relative 3-year average same-store revenue growth vs self-storage peers; payouts from 0–200% of target based on rank .
- Risk safeguards: No guaranteed increases; capped bonus schedules; multi-metric evaluation; multi-year performance; independent consultant (Ferguson Partners Consulting) .
Investment Implications
- Alignment positives: Significant beneficial ownership (4.9%); recent insider purchase in 2025 offering; stringent ownership guidelines (5x salary for CEO); high proportion of at-risk/long-dated equity tied to relative performance .
- Supply overhang: Regular LTIP vesting (time-based annually through 2027) and performance cycles (2026/2027) may create periodic selling pressure; however, 2025 vesting of performance LTIP at target suggests execution against peer-relative goals .
- Red flags/governance risks: Combined CEO/Chair role (mitigated by Lead Independent Director); absence of hedging policy; related-party transactions with SAM and sponsor funding arrangements; presence of excise tax gross-up for CoC until listing (now removed post-listing) .
- Pay-for-performance: 2024 STI paid at 71% of target with mixed operating outcomes (NOI decline; FFO below target; G&A beat), indicating discipline in payouts; LTIP performance vested at target (3rd place) reinforcing relative execution focus .