Regency Centers modifies CEO severance terms

Regency Centers Corp (NASDAQ:REG) has amended its severance and change of control agreement with CEO Lisa Palmer, according to a recent SEC filing. The modification, effective as of Wednesday, adjusts the cash severance payable if Palmer is terminated without Cause or resigns for Good Reason. The severance sum now includes 24 months of base salary, 200% of the average annual cash bonus from the prior three years, and the equivalent of 24 months of medical benefits.

In the event of a termination during a Change of Control Period, the severance would increase to include 36 months of base salary, 300% of the average annual cash bonus from the prior three years, a pro-rated target annual bonus, and 36 months of medical benefits coverage. Additionally, the amendment addresses potential excise tax implications, offering Palmer the option to either pay the excise tax or receive a reduced payment to avoid the tax, based on the most beneficial after-tax outcome for her.

This change in the severance agreement, detailed in an 8-K form filed today, follows the original agreement dated January 1, 2022. The amendment ensures Palmer receives a substantial severance package reflective of her executive compensation, should specific termination conditions be met. The rest of the original agreement remains unchanged.

In other recent news, Regency Centers has reported strong third-quarter results for 2024, with significant same-property net operating income (NOI) growth and high occupancy rates. The company's Nareit Funds From Operations (FFO) were reported at $1.07 per share, and core operating earnings were $1.03 per share. These robust results have led to an increase in the company's full-year guidance, reflecting confidence in its operational performance and strategic investments.

Regency Centers has amended the severance and change of control agreement with President and CEO Lisa Palmer. The adjustment modifies the cash severance terms for certain termination scenarios, providing a revised compensatory framework for the company's top executive in the event of her departure under specified conditions.

Analyst firm KeyBanc Capital Markets maintained its positive outlook on Regency Centers, reiterating its Overweight rating. The firm expects Regency Centers' SPNOI growth to remain strong in the near term. Furthermore, Regency Centers has made noteworthy investments in its development pipeline, with project starts totaling between $200 million and $250 million. Looking forward into 2025, the company expects a similar growth trajectory, with Nareit FFO growth predicted to exceed 5%.

InvestingPro Insights

Regency Centers Corp's recent amendment to CEO Lisa Palmer's severance agreement aligns with the company's strong financial position and market performance. According to InvestingPro data, Regency Centers has a market capitalization of $13.56 billion and has demonstrated solid revenue growth of 13.47% over the last twelve months as of Q3 2024. This growth trajectory supports the company's ability to offer competitive executive compensation packages.

InvestingPro Tips reveal that Regency Centers has raised its dividend for 11 consecutive years and has maintained dividend payments for 31 consecutive years. This consistent dividend history, coupled with a current dividend yield of 3.63%, underscores the company's commitment to shareholder returns and financial stability. These factors likely contribute to the board's confidence in offering robust severance terms to key executives like Palmer.

The stock's performance has been noteworthy, with a 28.47% price total return over the past six months. This aligns with another InvestingPro Tip indicating that the stock is trading near its 52-week high, currently at 98.71% of that peak. Such strong market performance may justify the enhanced severance provisions, as the company seeks to retain top talent in a competitive real estate market.

For investors interested in a deeper analysis of Regency Centers, InvestingPro offers 8 additional tips that could provide valuable insights into the company's prospects and valuation.

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