First Industrial Realty Trust, Inc. (NYSE:FR) and its operating partnership, First Industrial L.P., announced today that they have entered into a new employment agreement with President and Chief Executive Officer Peter E. Baccile. The agreement, effective January 1, 2025, will supersede Mr. Baccile's current contract set to expire at the end of 2024.
Under the terms of the new agreement, Baccile will receive an annual base salary of $935,000. Additionally, he is eligible for a target annual bonus of 150% of his base salary and a target annual long-term incentive of $4,440,000. This incentive is divided into 35% time-based awards and 65% performance-based awards, with the possibility of adjustment by the Compensation Committee.
The contract, spanning five years until December 31, 2029, includes provisions for severance payments in the event of termination without cause or for good reason. These payments would amount to double, or triple during a change in control period, the sum of Baccile's annual base salary and average annual bonus from the two preceding years. Baccile would also receive a prorated annual bonus for the year of termination, continued vesting of unvested equity awards, and extended medical and dental benefits.
Should Baccile's employment end due to death, disability, retirement, or at the expiration of the agreement's term, he would still be entitled to a prorated bonus for the termination year, vesting of unvested equity awards, and health care benefits, contingent upon the fulfillment of certain conditions, including a release agreement and adherence to restrictive covenants concerning confidentiality and non-competition.
In other recent news, First Industrial Realty Trust has been making significant strides in its operational and financial performance. The company reported a strong Q3, with NAREIT funds from operations increasing to $0.68 per share, up from $0.62 in the same period the previous year, and a cash same-store NOI growth of 7.6%. In response to these positive results, First Industrial Realty Trust has raised its 2024 guidance range for NAREIT FFO to $2.61 to $2.65 per share.
Baird, an independent investment firm, has maintained an Outperform rating on First Industrial Realty Trust, indicating a positive outlook for the company. The firm's analysis suggests that First Industrial Realty Trust's core portfolio will deliver a stable 6% annual growth, with potential for further gains from its development leasing aspect.
In addition, First Industrial Realty Trust has announced significant leasing achievements, including a 150% cash rental rate increase on a major lease renewal in Southern California and a 51% increase in cash rental rates across 2024 expirations. Despite a slightly softening industrial real estate market, these developments underscore the company's strong position and potential for future growth.
InvestingPro Insights
As First Industrial Realty Trust, Inc. (NYSE:FR) secures its leadership for the next five years, investors might find additional context from recent financial data and expert insights valuable. According to InvestingPro, FR boasts a market capitalization of $6.94 billion, reflecting its significant presence in the industrial real estate sector. The company's revenue for the last twelve months as of Q3 2024 stood at $655.53 million, with a healthy growth rate of 8.51%.
Two key InvestingPro Tips stand out in light of the recent executive agreement. Firstly, FR "has raised its dividend for 12 consecutive years," which aligns with the company's commitment to shareholder value and may reflect confidence in future cash flows under Baccile's continued leadership. Secondly, the company's "liquid assets exceed short-term obligations," suggesting a strong financial position to support the new compensation package and ongoing operations.
For investors seeking a deeper understanding of FR's potential, InvestingPro offers 5 additional tips that could provide further insights into the company's financial health and market position.
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