Urban Edge Properties (NYSE:UE) has entered into a new employment agreement with its Chairman and CEO, Jeffrey S. Olson, as reported in a recent 8-K filing. The agreement, effective as of June 28, 2024, replaces the prior contract set to potentially renew on September 1, 2024. Olson's new term extends to September 1, 2027, with automatic one-year renewals unless either party opts out with a 90-day notice.
Under the new terms, Olson will maintain his current compensation structure, including an annual base salary of at least $1,100,000 and a target bonus of 110% of his salary. Additionally, he will receive annual long-term incentive plan (LTIP) unit grants with a grant date value of no less than $4,450,000, half of which are time-based and half performance-based.
The agreement outlines severance terms consistent with the previous contract. Upon termination without cause or for good reason, Olson is entitled to a severance amount, a pro-rata bonus, medical benefits, and vesting of certain equity awards. The severance amount is twice his base salary and target bonus, increasing to three times in the event of a qualifying change in control of the company.
The filing details "cause" for termination and defines "good reason" for Olson to resign, including material reductions in compensation, changes in position, relocation, or the company's failure to uphold the agreement's provisions.
In other recent news, Urban Edge Properties started the fiscal year 2024 on a positive note, with strong leasing and growth. The company reported a 4.4% year-over-year increase in funds from operations (FFO) as adjusted to $0.33 per share. This growth was primarily driven by recent acquisitions and robust leasing activity, which led to an uptick in same-property occupancy and a promising redevelopment pipeline. Urban Edge Properties also increased its full-year FFO guidance, indicating a confident outlook on its financial performance.
The company made two significant acquisitions of shopping centers in New Jersey, with a total investment of $117 million. These acquisitions were financed through a combination of mortgage debt, asset sales, and equity. Furthermore, Urban Edge Properties adjusted its 2024 FFO guidance upwards by $0.03 to $1.30 per share, suggesting a 4% growth for the year.
In terms of financial stability, Urban Edge boasts a robust balance sheet with a $1.5 billion unencumbered asset pool and predictable interest expenses. The company's net debt-to-annualized EBITDA stands at 6.6x, with expectations for further decline. These recent developments underscore Urban Edge Properties' strong position and growth potential in the retail real estate market.
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