Fernando Castro-Caratini
Executive Vice President, Chief Financial Officer, Treasurer and Secretary at SUN COMMUNITIES
Executive
About Fernando Castro-Caratini
Executive Vice President, CFO, Treasurer and Secretary of Sun Communities since May 2022; joined SUI in November 2016 as SVP, Finance & Capital Markets after prior service in Citigroup’s Real Estate & Lodging Investment Banking Group focused on strategic advisory, M&A and IPOs . 2024 delivery highlights: reduced total debt by $424.5M, refinanced $500M unsecured debt, lowered leverage from 6.1x to 6.0x and variable-rate exposure from 16.4% to 8.6%; cut non-recurring capex by 50% ($348M), and scaled investor outreach (200+ institutions, ~69% ownership) . Corporate incentive metrics for 2024 came in below thresholds on Core FFO ($6.81) and same-property NOI (4.3%), while G&A achieved 50% payout and sustainability “Excelled” (200%) . Beneficial ownership is 60,614 shares (<1%); he is in compliance with the 4x salary ownership guideline as of March 10, 2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Sun Communities, Inc. | SVP, Finance & Capital Markets | Nov 2016–May 2022 | Led financing, capital markets, M&A strategy; managed investor/bank relationships . |
| Citigroup (Real Estate & Lodging IB) | Vice President/IB roles | Pre-2016 | Executed advisory and capital markets transactions (M&A, IPOs) for real estate/lodging clients . |
| Sun Communities, Inc. | EVP, CFO, Treasurer & Secretary | May 2022–present | Oversees accounting, tax, finance, treasury, investor relations, external reporting . |
Fixed Compensation
| Component | 2024 | 2025 | Notes |
|---|---|---|---|
| Base Salary | $550,000 | $550,000 (no change) | Employment agreement effective May 2, 2022; term to May 2, 2027 with auto-renewal . |
| Annual Incentive Opportunity (% of salary) | Threshold 50%, Target 100%, Max 200% | Threshold 50%, Target 100%, Max 200% | Corporate metrics set annually by Compensation Committee . |
Multi-year summary compensation (as reported):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary | $474,868 | $550,000 | $550,000 |
| Non-Equity Incentive (earned prior year; paid following year) | $669,625 | $366,850 | $185,625 |
| Stock Awards (grant-date fair value) | $1,533,655 | $2,475,643 | $1,676,063 |
| All Other Compensation | $7,205 | $8,637 | $10,889 |
| Total | $2,685,353 | $3,401,130 | $2,422,577 |
Performance Compensation
Annual incentive structure and 2024 payout for Fernando Castro‑Caratini:
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout % | Weighted Payout % |
|---|---|---|---|---|---|---|---|
| Core FFO growth | 30.0% | ≥$7.10 to <$7.14 | ≥$7.14 to <$7.22 | ≥$7.22 | $6.81 | —% | —% |
| Same Property Combined NOI (NA & UK) | 20.0% | ≥4.6% to <5.2% | ≥5.2% to <5.8% | ≥5.8% | 4.3% | —% | —% |
| G&A growth, net of add-backs | 12.5% | ≤$258M to >$255.4M | ≤$255.4M to >$252.8M | ≤$252.8M | $257.5M | 50% | 6.25% |
| Net Debt / TTM Recurring EBITDA | 12.5% | ≤5.9x to >5.7x | ≤5.7x to >5.5x | ≤5.5x | 6.0x | —% | —% |
| Sustainability initiatives | 10.0% | Meet | Exceeded | Excelled | Excelled | 200% | 20.0% |
| Corporate subtotal | 85.0% | — | — | — | — | — | 26.25% |
| Individual goals / discretion | 15.0% | Meet | Exceeded | Excelled | Meet | 50% | 7.50% |
| Total payout vs. target | — | — | — | — | — | — | 33.75% (=$185,625) |
Long-term equity incentive design (granted based on prior-year performance):
- 60% performance/market-vesting restricted shares, 40% time-vesting restricted shares; TSR measured over three years versus MSCI U.S. REIT Index; payouts capped at target if absolute TSR is negative .
- Time-vesting schedule: 20% per year over five years; Market-vesting schedule: 3-year cliff at 100% if criteria met .
Outstanding equity awards (as of Dec 31, 2024):
| Grant Date | Type | Unvested Shares | Market Value |
|---|---|---|---|
| 3/3/2020 | Time (T1) | 400 | $49,188 |
| 3/3/2020 | Time (T1) | 400 | $49,188 |
| 3/5/2021 | Time (T1) | 800 | $98,376 |
| 3/5/2021 | Time (T1) | 1,600 | $196,752 |
| 2/24/2022 | Time (T1) | 5,100 | $627,147 |
| 2/24/2023 | Time (T1) | 6,400 | $787,008 |
| 2/24/2023 | Market (M1) | 12,000 | $528,279 |
| 3/4/2024 | Time (T1) | 6,000 | $737,820 |
| 3/4/2024 | Market (M1) | 9,000 | $616,089 |
| Total | — | 41,700 | $3,689,847 |
- 2021 cycle vesting outcome: market performance award relative TSR achieved 20th percentile vs FTSE NAREIT Equity Residential Index; zero shares vested .
- Shares vested in 2024: 6,450 shares; value realized $836,996 .
- No options outstanding for NEOs as of Dec 31, 2024 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Mar 10, 2025) | 60,614 shares; less than 1% . |
| Executive ownership guideline | 4x base salary for President and other executive officers; compliance deadline within 5 years of employment/promotion or Nov 2, 2021, whichever later . |
| Compliance status | All NEOs, including Mr. Castro‑Caratini, were in compliance as of Mar 10, 2025 . |
| Pledging | Pledging prohibited without NCG Committee approval; no pledges disclosed for Mr. Castro‑Caratini (pledges disclosed for CEO) . |
| Anti-hedging | Hedging prohibited for directors and executive officers . |
| Vested vs unvested | 2024 vesting: 6,450 shares; unvested balances shown above; performance awards vest on TSR-based criteria . |
Employment Terms
| Term | Provision |
|---|---|
| Agreement | Effective May 2, 2022; expires May 2, 2027; auto-renewal for successive one-year terms unless timely notice . |
| Base salary | $550,000 . |
| Annual incentive | Up to 200% of base salary; criteria set annually by Compensation Committee . |
| Severance (without cause / good reason) | Continued base salary payments for up to 18 months; amounts tabled at $825,000; equity acceleration per plan; subject to release and compliance with covenants . |
| Death/disability | Continuation of salary up to 24 months; amounts tabled at $1,100,000 . |
| Change-of-control economics | 2.99x base salary cash payment; health/insurance benefits up to one year; double-trigger within 24 months post-CoC or certain pre-CoC terminations; full acceleration of stock-based compensation upon triggering event . |
| Clawback | Policy to recover incentive-based compensation for three completed fiscal years preceding any restatement due to material noncompliance with securities laws . |
| Section 162(m) | Certain payments not deductible; amounts subject in 2024 included $907,132 for Mr. Castro‑Caratini . |
| Insider reporting | Company states timely compliance for 2024 (one late Form 4 by CEO) . |
Compensation Peer Group (Benchmarking)
| Peer | Property Focus | HQ |
|---|---|---|
| AvalonBay Communities, Inc. | Multifamily | Arlington, VA |
| Camden Property Trust | Multifamily | Houston, TX |
| CubeSmart | Self-Storage | Malvern, PA |
| Equity LifeStyle Properties, Inc. | Manufactured Home | Chicago, IL |
| Equity Residential | Multifamily | Chicago, IL |
| Essex Property Trust, Inc. | Multifamily | San Mateo, CA |
| Extra Space Storage Inc. | Self-Storage | Salt Lake City, UT |
| Federal Realty Investment Trust | Retail | North Bethesda, MD |
| Invitation Homes, Inc. | Single-Family | Dallas, TX |
| Mid-America Apartment Communities, Inc. | Multifamily | Germantown, TN |
| UDR, Inc. | Multifamily | Highlands Ranch, CO |
| Ventas, Inc. | Health Care | Chicago, IL |
- Peer total capitalization context includes SUI at $24,213M (as of 12/31/2024; S&P Capital IQ) .
- 2024 say-on-pay approval: ~92% .
Performance & Track Record
- 2024 operational finance delivery: debt reduced by $424.5M, $500M unsecured refinancing, leverage lowered to 6.0x, variable-rate debt cut to 8.6%; 50% reduction in non-recurring capex ($348M); enhanced disclosures and robust investor engagement .
- Annual incentive corporate metrics: below threshold on Core FFO ($6.81) and same-property combined NOI (4.3%), partial payout on G&A (50%), sustainability at 200%; total payout achieved 33.75% of target ($185,625) .
- Long-term TSR-linked awards: 2021 cycle relative TSR achieved 20th percentile vs FTSE NAREIT Equity Residential Index; no vesting; 2023/2024 market-vesting awards outstanding with 3-year TSR criteria and absolute TSR cap at target if negative .
Investment Implications
- Pay-for-performance alignment: High at-risk mix with 60% of LTI tied to 3-year relative TSR and an absolute TSR cap; 2021 market cycle forfeiture underscores an uncompromising design that limits windfalls in periods of underperformance .
- Retention risk vs selling pressure: Material unvested equity (41.7K shares; ~$3.69M) with multi-year vesting supports retention; 2024 vesting of 6,450 shares ($836,996) indicates manageable near-term supply; no options and no pledging disclosed for Mr. Castro‑Caratini mitigate forced-selling/overhang risk .
- Change-of-control economics: Double-trigger structure with 2.99x base salary and full equity acceleration could be costly in a transaction but provides standard market protection; severance without cause/good reason equals 18 months base salary, with no disclosed tax gross-ups (CoC benefits cut to avoid 4999 excise tax) .
- Execution signal: 2024 balance sheet optimization (debt reduction, leverage moderation, rate exposure reduction) and capex discipline are positive for cash flow resilience; however, corporate incentive outcomes (Core FFO/NOI below thresholds) indicate operating headwinds in the period .
- Governance and alignment: Ownership guideline (4x salary) met; anti-hedging and limited pledging permitted only by committee approval; robust clawback policy reduces compensation risk in restatement scenarios .