Urban Edge Properties (NYSE:UE) announced today that Chairman and CEO Jeffrey S. Olson has entered into a new employment agreement effective June 28, 2024. The new contract supersedes Olson's previous agreement from 2019 and extends his tenure until September 1, 2027, with provisions for automatic annual renewals unless a 90-day prior notice of nonrenewal is provided by either party.
The terms of Olson's compensation remain unchanged in the new agreement. He will continue to receive an annual base salary of at least $1.1 million and is eligible for an annual bonus with a target of no less than 110% of his base salary. Additionally, Olson will receive annual grants of Long-Term Incentive Plan (LTIP) Units in the Operating Partnership, with a grant-date fair value of no less than $4.45 million. These units are split evenly between time-based and performance-based awards, with specific vesting schedules and criteria set by the Compensation Committee.
In terms of severance, the agreement outlines that if Olson's employment is terminated without cause or if he resigns for good reason, he will be entitled to various benefits including a severance payment, a pro-rata bonus, medical benefits, and vesting of certain equity awards. The severance amount is calculated as two times the sum of Olson's base salary and target annual bonus, or three times in the event of a termination related to a change in control of the company.
In other recent news, Urban Edge Properties has seen significant developments. The company secured a new employment agreement with its Chairman and CEO, Jeffrey S. Olson, extending his term to September 1, 2027. His compensation structure remains unchanged, with an annual base salary of at least $1,100,000 and long-term incentive plan (LTIP) unit grants valued at no less than $4,450,000.
Urban Edge Properties started the fiscal year 2024 positively with robust leasing and growth. A 4.4% year-over-year increase in funds from operations (FFO) as adjusted to $0.33 per share was reported, largely driven by acquisitions and strong leasing activity. The company also increased its full-year FFO guidance, indicating a positive financial performance outlook.
Two significant shopping center acquisitions in New Jersey were made, with a total investment of $117 million. These acquisitions were financed through mortgage debt, asset sales, and equity. Urban Edge Properties adjusted its 2024 FFO guidance upwards by $0.03 to $1.30 per share, suggesting a 4% growth for the year. The company's net debt-to-annualized EBITDA stands at 6.6x, with expectations for further decline. These are among the recent developments highlighting Urban Edge Properties' strong position in the retail real estate market.
InvestingPro Insights
As Urban Edge Properties (NYSE:UE) solidifies its leadership structure with CEO Jeffrey S. Olson at the helm for an extended period, investors may find interest in the latest financial metrics and market performance of the company. Urban Edge Properties is trading at a low earnings multiple with a P/E ratio of 8.01, indicating the stock may be undervalued relative to its earnings. Moreover, the company's liquid assets surpass its short-term obligations, which speaks to its financial stability.
However, it's worth noting that analysts are cautious about the company's profitability in the near term, as net income is expected to drop this year. Additionally, the stock price has been quite volatile, which could suggest higher risk for investors. Nevertheless, Urban Edge Properties has been profitable over the last twelve months, and with a dividend yield of 3.74%, it could be an attractive option for income-focused investors.
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