Gary Shiffman
About Gary A. Shiffman
Gary A. Shiffman, age 70, is Chairman and Chief Executive Officer of Sun Communities, Inc. (SUI) and has served on the Board since 1993. He is not independent and currently serves on the Executive Committee. His credentials include more than 40 years of experience in management, acquisition, rezoning, expansion, marketing, construction, and development of manufactured housing (MH) and RV communities, and an extensive industry network developed over three decades. He has announced his intention to retire as CEO by no later than December 31, 2025; upon his retirement the Board intends to separate the Chair and CEO roles .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Sun Communities, Inc. | Chairman and Chief Executive Officer; Director | 1993–present | Executive Committee member (current slate: Shiffman, Baivier, Lewis) |
External Roles
- No other public company directorships disclosed; Sun Communities board service only .
Board Governance
- Structure and leadership
- Combined Chair/CEO with plan to separate roles upon Shiffman’s retirement by year-end 2025 .
- Lead Independent Director: Clunet R. Lewis .
- Independence: Board majority independent (89%); Shiffman is not independent .
- Committees
- Executive Committee member; not listed on Audit, Compensation, NCG, Capital Allocation, or CEO Succession committees .
- Attendance and engagement
- Board met 18 times in 2024; all directors attended at least 75% of Board and relevant committee meetings .
- Shareholder outreach: engaged 16 of top 25 holders, representing ~63% of outstanding shares, with broad governance/compensation dialogue .
- CEO succession
- CEO Succession Planning Committee formed in Nov 2024; Shiffman notified intent to retire by 2025; Board actively managing transition .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 900,000 | 900,000 | 900,000 |
Notes:
- CEO base salary unchanged for the past three years .
Performance Compensation
| Component | Plan Design (2024) | Target/Structure | Actual/Payout |
|---|---|---|---|
| Annual Incentive (Cash) | Metrics and weights: Core FFO growth (30%), Same Property Combined NOI growth MH/RV/Marina/UK (20%), G&A growth net (12.5%), Net Debt/TTM Recurring EBITDA (12.5%), Sustainability (10%), Individual goals (15%) | CEO opportunity: 100% threshold, 150% target, 200% max of salary | Payout: $495,000 (36.67% of target) comprising 32.5% corporate and 22.5% individual weighted outcomes |
| 2024 Annual Incentive – Metric Outcomes | Threshold/Target/Max vs Actual | Weight | Weighted Payout |
| Core FFO per share | ≥$7.10/≥$7.14/≥$7.22 vs Actual $6.81 → 0% | 30% | 0% |
| Same Property Combined NOI growth (NA + UK) | ≥4.6%/≥5.2%/≥5.8% vs Actual 4.3% → 0% | 20% | 0% |
| G&A growth, net | Threshold to Max bands vs Actual $257.5M → 100% payout | 12.5% | 12.5% |
| Net Debt / TTM Recurring EBITDA | ≤5.9x/≤5.7x/≤5.5x vs Actual 6.0x → 0% | 12.5% | 0% |
| Sustainability initiatives | Excelled → 200% payout | 10% | 20.0% |
| Individual goals | Exceeded → 150% payout | 15% | 22.5% |
| Long-Term Equity (granted 2024 for 2023 performance) | 60% market/performance RS; 40% time-vesting RS; market RS tied to 3-yr relative TSR vs MSCI US REIT (RMS) with absolute TSR cap at target | CEO grant: 2,000 time-vest RS ($264,260) + 3,000 market/perf RS ($294,428) on 3/4/2024 | Performance cycles 2021–2023 and 2022–2024 paid 0%; 2023–2025 and 2024–2026 tracking below threshold as of 12/31/2024 |
| Vesting Schedules | Time-based: annual pro rata over 5 years | Performance-based: 3-year period (1/1/2024–12/31/2026), vest 1/1/2027, payout 60%/80%/100% at 35th/55th/75th TSR percentiles; capped at target if absolute TSR negative | — |
Compensation mix signals:
- 2024 equity granted to Shiffman cut to 5,000 shares vs 81,667 average over prior three years; 2023 equity-heavy (91.8%), while 2024 mix shifted down given performance .
- Say-on-pay support remained strong at ~92% in 2024, and program design largely unchanged into 2025 .
Other Directorships & Interlocks
| Category | Detail |
|---|---|
| Current public company boards | None disclosed beyond SUI Director |
| Compensation Committee interlocks | None; no interlocking relationships noted |
Expertise & Qualifications
- 40+ years in MH/RV acquisition, development, operations; deep sector relationships .
- Significant direct holdings through family-related interests in diversified real estate asset classes (office, multi-family, industrial, residential, retail) .
Equity Ownership
| Item | Detail |
|---|---|
| Total beneficial ownership | 1,741,530 shares (includes 733,097 shares issuable upon conversion of OP units) |
| Ownership as % of shares outstanding | 1.36% |
| Pledged shares (RED FLAG) | 230,400 outstanding shares and OP units convertible into 534,428 shares pledged as collateral as of Mar 10, 2025 |
| Outstanding unvested equity (12/31/2024) | Time-vest RS: 2/13/2020 5,200; 3/17/2021 13,600; 2/23/2022 20,400; 2/24/2023 24,000; 3/4/2024 2,000. Market RS: 2/23/2022 51,000 (valued $0 as forfeited 1/1/2025); 2/24/2023 45,000; 3/4/2024 3,000. Total unvested: 164,200 . |
| Vested in 2024 | 35,017 shares; value realized $4,556,534 . |
| Ownership guidelines | CEO 6x salary; all NEOs in compliance as of Mar 10, 2025 . |
| Hedging / Pledging policies | Hedging prohibited; pledging prohibited unless NCG Committee approves . |
Fixed Compensation (Director)
- As CEO, Shiffman receives no additional compensation for his service as a director; director compensation discussed in proxy pertains to non-employee directors only .
Related-Party Transactions (Conflict Review)
- Headquarters lease: SUI leases ~60,261 sq ft from American Center LLC; Shiffman and family indirectly own ~28.1% of the landlord entity; rent expense was ~$2.2 million in 2024 (avg $21.45/sq ft) .
- Aircraft use: Company paid ~$0.2 million in 2024 for business use of an airplane beneficially owned by Shiffman .
- Family employment: Son Adam Shiffman (VP Resort Development through Nov 8, 2024) received ~$142,550; son Alex Shiffman (VP Corporate Strategy) received ~$250,000 in 2024 .
- Additional party: Former director Arthur A. Weiss is partner at Taft Stettinius & Hollister LLP, SUI’s general counsel; SUI incurred ~$11.6 million 2024 fees (Weiss retired 12/31/2024) .
RED FLAGS:
- Share pledging by CEO (230,400 shares and OP units convertible into 534,428 shares) exposes potential forced-sale risk under adverse conditions .
- Related-party HQ lease and private aircraft arrangements raise perceived conflicts; NCG policy requires review/approval and terms deemed fair to the Company .
- Family member employment requires continued oversight to prevent nepotism concerns .
Employment & Contracts (CEO)
| Term | Key Provisions |
|---|---|
| Employment agreement | Effective March 29, 2021 (amended Mar/Dec 2022); term to Mar 29, 2026 with auto-renewal . |
| Base salary | $900,000 . |
| Annual incentive | Discretionary by Compensation Committee; plan goals set annually . |
| Non-compete | Generally up to 24 months post-employment (12 months if terminated without cause) . |
| Clawback | Executive Compensation Recovery Policy aligned with SEC/NYSE; restatement-triggered recovery for prior 3 fiscal years . |
| Change-of-control (double trigger) | 2.99x current base salary plus up to 1 year benefits; full vesting of equity upon qualifying termination; termination/death/disability provisions also disclosed . |
| Potential payouts (illustrative, 12/31/2024) | Without cause: $1.35M cash + $20.19M equity acceleration = $21.54M; Death/Disability: $1.80M cash + $20.19M equity = $21.99M; CoC + qualifying termination: $2.691M cash + $20.19M equity + $18,240 benefits = $22.90M . |
Performance & Track Record
- Company performance during tenure: 10-year TSR of 168.9% as of Dec 31, 2024; outperformed MSCI U.S. REIT and other benchmarks over certain horizons; Core FFO/share 2024 was $6.81 .
- 2024 strategic execution: $476.8M dispositions; reduced total debt by ~$424.5M; reduced floating rate exposure to 8.6%; internal restructuring and identified $15–$20M run-rate savings; 3,210 RPS gains; MH/RV blended occupancy 98.2% (adjusted 99.0%) .
Compensation Structure Analysis
- Year-over-year mix: CEO equity sharply reduced in 2024 (5,000 shares vs ~81,667 average prior 3 years), signaling pay-for-performance restraint amid sub-target outcomes .
- Incentive calibration: 2024 annual bonuses among lowest in a decade (overall average ~41% of target for NEOs); CEO payout 36.67% of target .
- Performance equity rigor: Relative TSR at 55th percentile to earn target; absolute TSR cap at target if negative returns; two recent cycles (2021–2023, 2022–2024) paid 0% .
Say-on-Pay & Shareholder Feedback
- Say-on-Pay approval ~92% in 2024; program maintained into 2025; ongoing shareholder engagement on governance and compensation .
Governance Assessment
- Positives
- Active CEO succession process with stated timeline and plan to separate Chair/CEO roles post-retirement, improving governance optics .
- Strong shareholder engagement and stable, rigorous pay-for-performance design with clawback, ownership guidelines, hedging ban .
- Board independence high; committee refresh and expansion of capital allocation oversight .
- Concerns / Watch items
- Related-party arrangements (HQ lease; aircraft) and family employment require vigilant NCG oversight to ensure arm’s-length terms (policy in place) .
- Pledged shares by CEO introduce potential misalignment/forced-sale risk (though pledging requires NCG approval) .
- Combined Chair/CEO until retirement; continued monitoring of transition execution essential .
- Overall: Governance trajectory is improving with succession, board refresh, and compensation alignment; related-party and pledging items are notable red flags that investors should monitor for mitigation and disclosure quality .