Andrew M. Sims
About Andrew M. Sims
Andrew M. Sims is Chairman of the Board of Sotherly Hotels Inc., serving since the company’s inception and IPO in 2004; he previously served as CEO through December 31, 2019 and as President through December 31, 2010, and holds a B.S. in Commerce from Washington & Lee University . He is 68 as of the 2025 Annual Meeting, with over forty years in hospitality operations, development, and ownership, including prior leadership at Chesapeake Hospitality, and is contractually required to be nominated to the Board, though he is not independent under NASDAQ rules . Company performance under the pay-versus-performance lens shows declining TSR over 2022–2024 and net income volatility, useful context for evaluating pay alignment .
Company TSR and Net Income (Pay vs Performance)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Value of $100 investment (TSR) | $86.60 | $71.29 | $44.56 |
| Net Income ($) | $32,536,521 | $3,941,421 | $1,302,369 |
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sotherly Hotels Inc. | Chairman of the Board | 2004–present | Board leadership, agenda-setting, strategic advisory on transactions, capital markets |
| Sotherly Hotels Inc. | Chief Executive Officer | 2004–2019 | Led portfolio development; managed franchise, banking, and service-provider relationships |
| Sotherly Hotels Inc. | President | 2004–2010 | Oversaw execution during initial IPO era and early portfolio expansion |
| Chesapeake Hospitality | President | 1995–Aug 2004 | Oversaw operations, accounting/finance, marketing, development, franchise relations |
| Chesapeake Hospitality | VP Finance & Development | Seven years prior to 1995 | Finance/development leadership supporting growth |
External Roles
| Organization | Role | Ownership/Status | Notes |
|---|---|---|---|
| Our Town Hospitality, LLC | Director; beneficial owner via affiliate | ~62.77% of interests (as of Sept 18, 2025) | Manager of SOHO’s hotels; related-party transactions governed by Audit Committee oversight |
Fixed Compensation
Base Salary
| Year | Base Salary ($) |
|---|---|
| 2024 | 559,316 |
| 2025 | 577,494 |
Summary Compensation (Multi-year)
| Year | Salary ($) | Bonus ($) | Stock Awards ($) | All Other ($) | Total ($) |
|---|---|---|---|---|---|
| 2022 | 507,789 | 165,000 | — | 68,341 | 741,129 |
| 2023 | 543,025 | 126,897 (incl. cash + stock-in-lieu) | 138,203 | 76,382 | 884,506 |
| 2024 | 559,316 | 147,000 (incl. $90,000 cash + 60,000 shares valued at $0.95) | — | 74,103 | 780,419 |
All Other Compensation (2024 detail)
- 401(k): $13,800; Health insurance: $27,439; Long-term disability: $12,686; ESOP allocation: $18,078; Executive health program reimbursement: $2,100; Life insurance premiums: ~$0 .
Performance Compensation
Cash Bonus
| Year | Cash Bonus ($) |
|---|---|
| 2022 | 165,000 |
| 2023 | 95,000 |
| 2024 | 90,000 |
- Bonus target range: 25%–35% of base salary per employment agreements; NCGC may award above/below range to retain/motivate executives and consider corporate/personal goals .
Stock Awards – Grants and Vesting
| Award Date | Shares | Vesting | Fair Value Basis |
|---|---|---|---|
| Jan 23, 2023 | 75,000 restricted shares | 15,000 vest each March 31 from 2023–2027 | Closing price $1.8427 on grant date (aggregate $138,203) |
| Dec 23, 2024 (granted; valued Jan 2, 2025) | 60,000 shares (non-cash bonus) | Not shown as unvested in outstanding awards; appears unrestricted | Closing price $0.95 on Jan 2, 2025 (aggregate $57,000) |
Restricted Stock Vesting Schedule and Realized Values
| Vest Date | Shares Vesting | Value Realized ($) |
|---|---|---|
| Mar 31, 2023 | 15,000 | $29,925 (at $1.995) |
| Mar 31, 2024 | 15,000 | $21,750 (at $1.45) |
| Mar 31, 2025 | 15,000 | Not disclosed |
| Mar 31, 2026 | 15,000 | Not disclosed |
| Mar 31, 2027 | 15,000 | Not disclosed |
- Options: None; company does not grant stock options .
Equity Ownership & Alignment
Beneficial Ownership (Common)
| As of | Total Common Shares | % of Class | Notable Components |
|---|---|---|---|
| Mar 15, 2024 | 1,560,846 | 8.2% | Includes 793,937 via family limited partnership; 67,969 ESOP; 45,000 unvested restricted |
| Sept 18, 2025 | 1,708,177 | 8.3% | Includes 793,937 via family limited partnership; 87,331 ESOP; 30,000 unvested restricted |
Outstanding Unvested Restricted Shares
| Date | Unvested Shares | Reference |
|---|---|---|
| Dec 31, 2023 | 60,000 | 2023 awards outstanding |
| Dec 31, 2024 | 45,000 | 2023 awards remaining |
| Sept 18, 2025 | 30,000 | 2023 awards remaining |
Preferred Share Holdings
| Class | Shares Owned |
|---|---|
| Series B | 1,500 |
| Series C | 1,500 |
| Series D | 1,500 |
- Pledging: None of the Company’s directors or named executive officers have pledged common shares; hedging is prohibited by insider trading policy .
Employment Terms
| Term | Detail |
|---|---|
| Contract term | Extended to Dec 31, 2027 by Jan 23, 2023 amendment |
| Bonus target | 25%–35% of base salary (committee discretion) |
| Severance (CoC or termination without cause/good reason) | Lump-sum 3× prior-year salary+actual bonus; 5 years of life/health/disability premiums; accelerated vesting of equity; accrued pay/bonus and unreimbursed expenses |
| Trigger characterization | Benefits if change in control occurs (single-trigger), or if terminated without cause/resigns for good reason (including failure to nominate Sims) |
| Excise tax gross-up | None shown (dash in termination table) |
Termination Payments – Illustrative (Assuming termination on Dec 31)
| Scenario | 2023 Components ($) | 2024 Components ($) |
|---|---|---|
| By Company without cause or by Executive for good reason (incl. CoC) | Cash: 2,018,367 ; Acceleration: 89,400 ; Other Benefits: 181,434 ; Total: 2,289,201 | Cash: 2,009,765 ; Acceleration: 41,913 ; Other Benefits: 200,624 ; Total: 2,252,302 |
Board Governance
- Board service history: Chairman since 2004; nominated annually per employment agreement; not independent under NASDAQ standards .
- Leadership structure: Roles separated (Chairman Sims vs CEO Folsom); lead independent director Walter S. Robertson III designated in 2025; robust independent oversight via Audit and NCGC Committees .
- Committee roles: Sims is not listed as a member of Audit or NCGC; committees comprised of independent directors .
- Attendance: No incumbent director attended fewer than 75% of Board/committee meetings in 2024; at the 2024 annual meeting, all directors except Walker and Gibson attended; in 2023, all except Stein and Gibson attended .
- Dual-role implications: As an officer-Chairman who is not independent and contractually required to be nominated, risks include reduced independence perceptions and potential entrenchment; mitigated by separated CEO/Chair roles and a lead independent director .
Say‑on‑Pay & Shareholder Feedback
| Year | Votes For | Votes Against | Abstain | Broker Non‑Votes | Result/Notes |
|---|---|---|---|---|---|
| 2024 | 5,051,265 | 896,698 | 61,095 | 7,750,411 | Approved; committee noted strong support in 2023; 2024 approval 84.9% of votes cast referenced in proxy narrative |
| 2025 | 6,825,607 | 1,722,551 | 22,874 | 6,625,724 | Approved; “One year” frequency selected (6,353,023 for) |
Related‑Party Transactions (Governance Red Flags)
- Management company: Our Town Hospitality (affiliates of Sims ~62.77%, Folsom ~6.21%, Sims Jr. ~15.0% ownership; Sims and Folsom are directors). Master agreement expires March 31, 2035; base fee generally 2.50% of hotel gross revenues; incentive fee capped at 0.25% of gross revenues above budgeted GOP .
- Fees: Base fees ~$4.7M (2024) and ~$4.5M (2023); incentive fees ~$0.1M (2024) and ~$0.2M (2023); 1H25 base fees ~$2.5M; incentive fees ~$78,294 .
- Sublease: Our Town subleases 2,245 sq ft from SOHO; rent income $135,511 (2024), $24,755 (2023); renewal exercised March 28, 2024 .
- Employee medical benefits: SOHO pays employer portion under Our Town-sponsored plan; $3.9M (2024), $2.7M (2023), with surplus rebate policy .
- Family employment: Sims Jr. resigns Sept 1, 2025; his unvested 5,000 shares vested upon release; related family employment arrangements disclosed .
Director Compensation (for context; Sims as officer does not receive director fees)
- Independent non-employee directors receive annual cash retainers, meeting fees, and annual restricted stock grants; directors who are officers (e.g., Sims) do not receive separate director compensation .
- Fee reduction: 10% reduction in cash fees effective July 1, 2025 .
Compensation Structure Analysis
- Mix and trend: Sims’ cash bonus trended down 2023→2024 ($95k→$90k), with additional stock issued as non-cash bonus in late 2024/valued Jan 2, 2025; multi-year restricted stock continues vesting through 2027, reinforcing equity-heavy incentives .
- Option shift: No options are granted, favoring RSUs/restricted stock—lower risk convexity vs options; potential for retention via time-based vesting .
- Guaranteed vs at-risk: Base salary increased modestly (2024→2025), while bonuses remain at committee discretion with 25%–35% target guideline, tying pay to corporate/personal goals .
- Clawback: Policy exists; no restatements requiring recovery in recent periods .
- Tax gross‑ups: None indicated in termination tables .
Equity Ownership & Alignment Signals
- Significant insider ownership (~8.3% as of 2025), including family partnership holdings and ESOP allocations, suggests strong alignment; no pledging and hedging prohibition reduce misalignment risks .
- Vested vs unvested: Clear vesting cadence on March 31 each year; outstanding unvested restricted shares declined over time (60k→45k→30k), signaling increasing realizable ownership .
- Immediate stock awards: The 60,000-share non-cash bonus for 2024 service appears unrestricted (not in unvested table), potentially increasing near-term float and providing a window for liquidity events .
Performance & Track Record
- Board cites Sims’ decades of experience in hospitality operations, development, franchising/branding, banking, and service-provider relations, including leading portfolio expansion as CEO .
- Pay-versus-performance data shows TSR compression from 2022→2024 and net income trending lower, underscoring sensitivity of equity-linked incentives to market/operational conditions .
Compensation Committee Analysis
- Composition: Independent directors (Robertson, Walker, Zinni in 2025; Stein, Walker, Zinni in 2024); no compensation consultant retained .
- Mandate: Oversees executive compensation, evaluates performance vs goals, administers 2022 LTIP, and sets corporate governance policies; independent directors conduct annual performance reviews of Chairman and CEO .
- Peer benchmarking: Uses publicly available peer data and sector surveys; specific peer group constituents not disclosed .
Employment Contracts, Severance & Change‑of‑Control Economics
- Single-trigger CoC benefits and severance protections (including nomination/entrenchment clause for Sims) raise shareholder-friendliness concerns; however, accelerated vesting and insurance coverage provide retention certainty .
- Clear multiple (3×) and rapid payment timelines (within 5 days), with benefits estimated from recent cost baselines .
Investment Implications
- Alignment: High insider ownership (8.3%) and continued ESOP allocations support long-term alignment; absence of pledging/hedging is positive .
- Retention risk: Strong contractual protections (3× severance; single-trigger CoC; nomination right) reduce near-term departure risk but raise entrenchment/governance risk for investors focused on independence and pay discipline .
- Trading signals: Vesting occurs annually on March 31 and recent unrestricted award of 60,000 shares valued Jan 2, 2025 suggests potential insider liquidity windows around vesting and grant dates; monitoring Form 4 activity near these dates may be prudent .
- Governance overhang: Related-party management fees to Our Town (controlled by affiliates, with multimillion-dollar fees) and family employment relationships add perceived conflict risks; strong committee oversight mitigates but does not eliminate concerns .
- Shareholder sentiment: Say‑on‑pay approvals have been strong (2024, 2025) and frequency vote reaffirmed annual cadence, indicating investor tolerance for the current design amidst ongoing performance normalization .