UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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UDR, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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1745 SHEA CENTER DRIVE, SUITE 200

HIGHLANDS RANCH, CO 80129

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To Be Held on May 27, 2021

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You are cordially invited to attend the 2021 Annual Meeting of Shareholders (the “Meeting”) of UDR, INC. (“UDR” or the “Company”) to be held on Thursday, May 27, 2021, at 10:00 a.m. local time at Hotel Crescent Court, 400 Crescent Court, Dallas, Texas 75201, for the following purposes:

Only shareholders of record at the close of business on March 29, 2021, will be entitled to notice of, and to vote at, the Meeting or any adjournment(s) thereof.  Each share of common stock is entitled to one vote for each director position and one vote for each of the other proposals.

On or about April 8, 2021, we intend to mail to our shareholders of record a notice containing instructions on how to access our 2021 proxy statement (“Proxy Statement”) and our Annual Report on Form 10-K for the year ended December 31, 2020, and how to vote online. The notice also provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in e-delivery. If you received your annual meeting materials via email, the email contains voting instructions and links to our annual report and proxy statement on the Internet.  If you would like to reduce the costs incurred by UDR in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet.  To sign up for electronic delivery, please follow the instructions on the Proxy Card to vote using the Internet and, when prompted, indicate that you agree to receive or access shareholder communications electronically in future years.  We want to thank you for helping make UDR an environmentally friendly company and for your continued support of UDR.

We intend to hold our annual meeting in person; however, we are actively monitoring the coronavirus (COVID-19). We are sensitive to the public health and travel concerns that our shareholders may have and the protocols that federal, state, and local governments have imposed or may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting by means of remote communication. Please monitor our annual meeting website at https://www.udr.com/2021annualmeeting for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date.  To the extent we hold our annual meeting virtually, our shareholders who register to attend will have the opportunity to participate through the virtual meeting portal both prior to and during the meeting.  Appropriate questions will be read and answered during the meeting.

WHETHER OR NOT YOU EXPECT TO BE AT THE MEETING, PLEASE VOTE AS SOON AS POSSIBLE TO ENSURE THAT YOUR SHARES ARE REPRESENTED.

April 8, 2021

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NOTICE OF 2021 ANNUAL MEETING OF SHAREHOLDERS

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Forward-Looking Statements

This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements include, without limitation, statements concerning property acquisitions and dispositions, development activity and capital expenditures, capital raising activities, rent growth, occupancy, rental expense growth and expected or potential impacts of the novel coronavirus disease (“COVID-19”) pandemic. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such factors include, among other things, the impact of the COVID-19 pandemic and measures intended to prevent its spread or address its effects, unfavorable changes in the apartment market, changing economic conditions, the impact of inflation/deflation on rental rates and property operating expenses, expectations concerning the availability of capital and the stability of the capital markets, the impact of competition and competitive pricing, acquisitions, developments and redevelopments not achieving anticipated results, delays in completing developments and redevelopments, delays in completing lease-ups on schedule or at expected rent and occupancy levels, expectations on job growth, home affordability and demand/supply ratio for multifamily housing, expectations concerning development and redevelopment activities, expectations on occupancy levels and rental rates, expectations concerning joint ventures and partnerships with third parties, expectations that automation will help grow net operating income, and expectations on annualized net operating income.

The following factors, among others, could cause our future results to differ materially from those expressed in the forward-looking statements:

A discussion of these and other factors affecting our business and prospects is set forth in Part I, Item 1A. Risk Factors of our Annual Report/Form 10-K for the year ended December 31, 2020. We encourage investors to review these risk factors.

Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Proxy Statement may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved.

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Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Proxy Statement, and we expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law.

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2021 PROXY STATEMENT HIGHLIGHTS

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1, 3, 5, 10 and 20-Year Total Shareholder Return as of December 31, 2020

UDR’s Absolute Return in Dollars ($ millions)

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193^rd Consecutive Dividend Paid

Our January 2021 dividend represented our 193^rd consecutive quarterly dividend paid. We are committed to returning value to our shareholders, and for 2020 we increased our dividend by 5.1%, and we have increased our dividend 5.1% annually over the past 3 years, 5.3% annually over the past 5 years and 7.2% annually over the past 10 years. Our dividend has increased in each of the last 11 years.

^(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 109).

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Our Five Strategic Objectives

2) balance sheet strength,

3) portfolio composition,

4) accretive capital allocation, and

5) a strong, innovative culture with a focus on sustainability, leading to an investment for all cycles.

Below is a summary of our results categorized by objective:

A best-in-class operating platform that couples strong blocking and tackling with continued innovation is expected to drive operating margin expansion. Initiatives that better monetize our real estate, pricing our apartment homes more efficiently, and nurturing an operating culture that embraces accretive evolution are all repeatable competitive advantages that result in superior NOI growth over a full cycle.

Our balance sheet is safe, liquid, flexible, and capable of funding both internal and external growth opportunities. An investment-grade rating, well-laddered maturity profile, and access to liquidity from a wide variety of capital sources affords UDR efficient pricing of external capital, which serves as a competitive advantage.

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*We present reconciliations of certain non-GAAP financial measures to their most directly comparable US generally accepted accounting principles (GAAP) measures in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Apartment Community Operations” in our 2020 Annual Report, including reconciliations of net income/loss reported under GAAP to NOI, FFO, FFO as Adjusted and FFOA, as well as additional information about non-GAAP measures.

^(a) We present reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures, as well as additional information, in “Definitions” on page 109.

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Our diversified portfolio across markets, price points, and product types is a differentiating factor, appeals to a wide renter and investor audience, provides for more markets to invest in and overlay our operating platform onto, and lessens volatility in long-term same-store growth, cash flow growth, and total shareholder return to deliver a full-cycle investment that generates both growth and stability.

UDR’s history of disciplined capital allocation has created significant value for stakeholders over time and is a function of our ability to consider cost of capital signals and leverage our well-rounded suite of available investment options. Our diversified portfolio allows us to seek returns where others cannot, and our willingness and ability to pivot toward the investment opportunity that generates the highest risk-adjusted IRR and the greatest earnings accretion is central to UDR’s capital allocation strategy.

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Our culture is achievement-based, goal-oriented, forward-thinking, and driven by innovation and technology. These principles support an empowered, merit-based structure that rewards strong financial results while also mandating accountability and respect for all. Our diversity, equity and inclusion initiative is designed to help assure continued high levels of associate engagement in the future. High associate engagement levels are one of the reasons it is possible for UDR to consistently deliver financial results, which in turn allow us to provide the tools our associates need to take advantage of career mobility, which helps generate long-term cash flow growth and total return to our shareholders, and deliver superior customer service to our residents. These accomplishments are achieved in concert with UDR being a responsible steward of the environment, a socially conscious corporate citizen, and a promoter of sound corporate governance.

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Environmental

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Social and Community Engagement

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Governance

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As described further within this proxy statement we regularly interact with our shareholders and other stakeholders, having had 517 total interactions with shareholders (representing 84.1% of our outstanding common stock), including 50 representatives of the stewardship or governance functions of 29 of our shareholders (representing 44.3% of our outstanding common stock), in 2020 and early 2021.  Set forth below are issues that are most commonly topics of discussion in such engagements and brief descriptions of what we have done to address them.

COVID-19

As with other businesses across the globe, the COVID-19 pandemic negatively impacted our business as well as our residents, associates, and communities in a wide variety of ways during 2020.  Addressing these impacts required targeted responses including measured and intentional actions to assist our residents and our associates with a focus on protecting, to the extent we could, the health and well-being of our residents and our associates.  

With respect to our residents, we enhanced our cleaning protocols and improved air quality protocols. To help address our residents’ mental wellness and foster personal engagement amidst social distancing requirements, we coordinated virtual social and entertainment opportunities such as trivia contests and cooking classes.  In addition, to assist with financial impacts we offered payment plans, as well as payment options such as payment by credit card or installment payments, while waiving associated fees.  We also created processes to assist residents in applying for applicable rent assistance programs.  Our Next Generation Operating Platform allowed us to expand the number of activities residents and prospective residents could accomplish in a self-service, no-contact manner at the time of their choosing, including the ability to make amenity reservations and log maintenance requests, among others.  We substantially increased the availability of self-guided tours and added the capability for virtual community tours, allowing a UDR leasing associate to virtually “walk” prospective residents around a community through on-line interaction.  

With respect to our associates, we sourced and provided personal protective equipment and provided additional cleaning supplies.  In addition, we offered additional paid time off for COVID-19 reasons, one-time financial bonuses, flexible work schedules, work-from-home optionality, vacation time buy-out programs, mental wellness programs, and other benefits that assisted our associates and their families in addressing COVID-19 challenges.  Senior management also communicated frequently with our associates (initially weekly and then less frequently) through Company-wide telephonic calls and virtual meetings and webinars. The goal was to ensure that our associates understood how the Company was addressing the challenges presented by the pandemic, and to provide an open forum where they could express concerns to or ask questions directly of leadership.  We did not furlough or layoff any of our associates due to COVID-19.

Interaction between management and the board also increased.  Additional board meetings were held virtually during 2020 so that board members had a full understanding regarding what the Company was doing to address the impact of COVID-19 and could efficiently exercise their oversight responsibilities.  See page 45.  

Environmental, Social, and Governance (“ESG”)

ESG remains a cornerstone of how we operate our business and invest our capital, not only because strong corporate citizenry is important to our stakeholders, but because focusing on it makes solid economic and business sense.

Environmental - Sustainability/Climate Change

Sustainability issues and climate change directly impact the long-term viability of our assets and the markets in which they are located. However, in our view “sustainable” does not end with widely utilized metrics such as resource conservation (e.g., electricity, water, and renewable energy usage, emissions, recycling efforts, etc.) and their associated cost savings, but also encompasses topics such as how our buildings impact our residents and the communities in which they are located. For example, we account for the “walk,” “public transit,” and “bike” scores of a community when making investment decisions, both on new developments and when acquiring operating assets to better assess these impacts.  While we have measured and considered various sustainability metrics for many years, in 2019 we began an effort to explicitly disclose our sustainability metrics, goals, efforts, and accomplishments. We also undertook the task of more formally reporting and disclosing these items to our stakeholders to provide them with a deeper understanding of our efforts.  In 2020 we released our second Corporate Responsibility Report, available on our website under “Corporate Social Responsibility/Corporate Responsibility Report”, which included enhanced disclosure including (1) Sustainability Accounting Standards Board (“SASB”) real estate specific disclosures with respect to energy management, water management, management of tenant sustainability and climate change adaption, and (2) Task Force for Climate-related Financial Disclosure (“TCFD”) focal points such as climate-related management, along with the Global Reporting Initiative (“GRI”) disclosures included in our inaugural report.  Our efforts resulted in UDR receiving a GRESB Public Disclosure rating of “A”, a disclosure score of 97, which was the highest within our GRESB determined comparison group, and an overall survey score of 83, which resulted in a “4 Star” designation from GRESB and our being named a top ESG performer among global real estate firms.  

We believe climate change related risks are growing in importance and in recognition thereof, in 2020 we engaged two third-party consultants to provide climate change risk data for each of our assets and all the markets in which we operate.  

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In our property-level and market analyses, we assessed both long-term and event-driven climate change risk through variables such as heat stress, water stress, sea level rise, flooding risk, hurricane risk and earthquake risk.  We used these findings to segment our portfolio by relative “riskiness” to better focus our efforts on high-risk markets and communities that require further analysis.  Lastly, these risks are considered by our board as part of their oversight of enterprise risk management.  

The assessment results are also considered as we make decisions with respect to capital investments in our owned assets (for example, whether to “harden” an asset against sea level rise or xeriscape a property to conserve water) as well as market-level investment and divestment decisions (for example, markets or sub-markets in which to invest and markets that we may exit) within our portfolio strategy process.  We presented the results of such assessments, together with our strategy and plan surrounding climate change, to our board and engaged in extensive dialogue on the topic at board meetings throughout 2020. We intend to provide regular climate change risk updates to the board in the years ahead, so that they are fully informed of the risks we may face and can actively oversee such risks.  In 2020, the Company also engaged a third-party expert to present thoughts regarding climate change risks to management and the board.

Greenhouse gas emissions and carbon-footprint are important globally and are areas that we believe may be focal points for increased future regulation.  Accordingly, in 2020 we measured the Scope 1 and 2 greenhouse gas emissions at each asset in our portfolio.  Our aggregate Scope 1 and Scope 2 emissions are reported in our Corporate Responsibility Report.  These assessments, in addition to the planned incorporation of estimated Scope 3 emissions in 2021, will be updated annually to (1) enable evaluation of usage patterns over time, (2) allow us to monitor year-over-year emission reductions due to capital investments we have previously made, (3) allows us to measure progress against our GHG reduction goal set forth in the Corporate Responsibility Report, and (4) provide insight into how and where we can further lower our carbon footprint through additional energy conservation investments.  When evaluating existing properties for acquisition we also perform, as part of our due diligence process, site assessments and property condition assessments, the results of which, in part, are used to assess opportunities to improve building energy usage.   See pages 46 through 47.

Social - Human Capital

We have increased our disclosure of human capital related efforts in this proxy statement.  See pages 42 through 45.  Our associates and their collective engagement are a key driver of our success and ability to execute our strategic plan.  Accordingly, we emphasize hiring and retaining associates with necessary skills while also fostering a culture that encourages inclusion and innovation.  To ensure that we provide our associates the tools they need to succeed and drive our success, we have established a wide-ranging training program, which also fosters career mobility opportunities. In 2020, we enhanced the training available to our associates, both through a more robust set of mandatory learning modules as well as the expansion of our library of elective training courses.  Regarding UDR’s culture, in 2020, we updated our culture statement and launched an associate-facing website devoted to our cultural values to ensure our associates understand our values and have an opportunity to participate in their evolution.  Diversity, equity and inclusion (“DEI”) are also important in the hiring and retaining of associates and to our business generally.  Accordingly, beginning in 2020 and continuing into 2021, we are formalizing our DEI efforts and have created a committee dedicated to overseeing those efforts.  In addition, we have created a high-level DEI strategy and more focused implementation plan, both of which have been discussed with the board.  Pursuant to the plan, we retained a third-party consultant with the appropriate expertise to survey all UDR associates on DEI topics.  Our consultant then conducted focus groups with UDR associates at all levels of the Company to ensure we have the appropriate feedback and information to help guide our efforts.  Based on the results of the survey and focus groups, we are creating programs designed to specifically target and therefore strengthen our DEI efforts.  The results should also help us to create DEI-related goals against which we can measure our progress, which will be reported to the board at least annually.  Last, understanding that our associates’ mental well-being is important, in 2020 we created and distributed to all associates a brochure outlining mental health resources available to them under our benefit plans.  As further described below, we also include metrics in our short-term compensation program for the “Health of the Workforce” and for ESG/DEI.  In addition, we report to the board on human capital issues on a regular basis.

Governance

Similar to recent years, we made governance-related changes in 2020.  In October, Diane M. Morefield was appointed to the board, furthering our board refreshment efforts.  Thirty-three percent (33%) of our board is now comprised of female directors. In addition, in early 2020 our board formally adopted a “Rooney Rule” with respect to board refreshment and to enhance third-party led search efforts related to succession planning for the role of chief executive officer. While we have always considered board and senior officer candidates with a wide variety of backgrounds and traits, the explicit inclusion of this rule in our governance documents formalizes our efforts to increase diversity amongst our board and senior officer ranks.  

In addition, in early 2021 we adopted changes to certain of our governance documents including a change to the charter of the Governance Committee to provide that the Governance Committee will assess our disclosure of ESG matters, including reviewing any annual reports published with respect to such matters.  See pages 24 through 36.

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Compensation

Over time, we have enhanced the framework used to align short-term and long-term executive compensation with business results, including tying specific compensation metrics to our business plan. However, executive compensation remains a primary topic of conversation with our shareholders and other stakeholders each year.  In response to comments we have received, and in connection with the approval of the Amended and Restated 1999 Long-Term Incentive Plan (see Proposal No. 4), we are changing certain features of our incentive compensation plan in 2021.  These changes include replacing a “single-trigger” acceleration provision upon a change of control with a “double-trigger” provision and, generally, requiring all equity grants to have a minimum vesting period of 12 months.  Also, for 2021, we added an ESG/DEI metric to our short-term incentive program for senior officers, including our named executive officers, to tie a portion of their compensation to our results with respect to our ESG and DEI efforts.  The new ESG/DEI metric complements the Health of the Workforce metric added in 2019.  See discussion starting on page 48.

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Say-on-pay approved every year since it was first introduced in 2011; over the last five years, shareholder support for the vote on executive compensation has averaged 87%.

Focus on Variable Pay Linked to both Short-Term and Long-Term Performance

Focus on Performance-Based Compensation

Our focus on equity-based compensation, together with our robust CEO and executive stock ownership guidelines of 110,000 shares for the CEO and the President, 50,000 shares for any Executive Vice President and 20,000 shares for any Senior Vice President, assist in creating long-term alignment with our shareholders.

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Due to the high percentage of the compensation of our named executive officers that is variable and based on the performance of the Company, the effects of the COVID-19 pandemic negatively impacted the compensation earned by our named executive officers in 2020 (see page 57).

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Shareholder Engagement

In 2020 and early 2021, we had 517 interactions with our investors through meetings and property tours, representing ownership of approximately 84.1% of our outstanding common stock.  In addition, we proactively contacted the governance or stewardship departments of 110 of our investors and received responses from and had engagement meetings with representatives of 29 of such departments, representing ownership of approximately 44.3% of our outstanding common stock.

Proxy Access

The Company’s Amended and Restated Bylaws (“bylaws”) include a proxy access provision, which permits a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director candidates constituting up to 20% of the board.

Majority Voting

The Company’s bylaws specify a majority voting standard in uncontested director elections, which incorporates a director resignation policy for any director who does not receive the requisite vote.

Bylaw Amendment

Prior to our 2018 annual meeting, we reached out to shareholders holding approximately 74% of our outstanding common stock regarding a proposed amendment to our bylaws.  Following such discussions, we amended our charter and our bylaws to provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, may propose binding amendments to our bylaws.  In order to implement the amendment to our bylaws we were required to amend our charter, which previously provided that our bylaws could only be amended by our board.  The amendment to our charter received the approval of 74% of the votes cast.  

Succession Planning

We remain focused on refreshing the membership of the board. Over the past seven years, we have added five new independent directors to the board, most recently including the addition of Diane M. Morefield in 2020, Clint D. McDonnough in 2016, and Mary Ann King in 2015.

To formalize our commitment to seeking diverse candidates for open board positions, in early 2020 our board adopted modifications to our Statement on Corporate Governance and our Nominating Committee Charter to enhance such documents by adopting a “Rooney Rule” specifically requiring that diverse candidates, based on gender and ethnicity, be included in the initial pool for any external search for director candidates and any external search for a Chief Executive Officer, and to further provide that any search firm used for conducting any such search is required to include such candidates in its initial pool of candidates.  While our board has always considered diverse candidates in such searches, these modifications formalize our continued commitment to diversity.

We also focus on the development of our executive management team.  Effective January 1, 2021 two Vice Presidents were promoted to Senior Vice Presidents and the titles and roles of other members of management were changed.  In 2019, the board appointed Jerry A. Davis to President – Chief Operating Officer and five Vice Presidents were appointed to Senior Vice President.  Further, over the three years ending December 31, 2020, 740 of our associates were promoted, building a deeper and more diverse associate pool.  Of associates that were promoted to the positions of community director or director, or a higher job classification, over such three year time period, 60% were female and 15% were of ethnic backgrounds other than White.

We have also formalized our efforts with respect to diversity, equity, and inclusion for the Company.  Our efforts have been discussed with our board and include formation of a committee dedicated to overseeing our efforts in this area, engagement of a consultant with expertise in the area to help guide our efforts, and an all associate survey to help identify potential areas of focus.

Lead Independent Director

In 2017, our board determined that it was appropriate to appoint our Chief Executive Officer and President, Thomas W. Toomey, as Chairman of the Board, and, in connection therewith, to appoint James D. Klingbeil as Lead Independent Director in accordance with our governance standards.  Such appointments were effective January 1, 2018.

Corporate Responsibility

Because of its importance to our stakeholders including our associates, residents and investors, we have made corporate responsibility a part of our culture.  Building on our efforts in 2019 and previous years, we had many successes in this area in 2020.  In 2020 we again reported to GRESB and based upon our submission we received a survey score of 83 and, for

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the second consecutive year, a GRESB Public Disclosure rating of “A”.  Our survey score of 83 resulted in our earning a “4 Star” designation from GRESB, and our disclosure score of 97 was the highest within the GRESB determined comparison group.  In addition, in October of 2020 we published our second annual Corporate Responsibility Report.  The 2020 report was significantly enhanced by the inclusion of SASB real estate specific disclosures with respect to energy management, water management, management of tenant sustainability, and climate change adaption as well as the addition of the TCFD framework enhancing our disclosure around climate-related management.  In addition, in 2020 we obtained, and published in our Corporate Responsibility Report, independent third party assurance that our processes for measuring, compiling, and reporting primary electric, gas, water, and GHG-based metrics are accurate and complete.

We take an inclusive approach to corporate responsibility, addressing not only governance, see pages 24 through 36, but also the impact that our efforts have on the lives of our associates and our residents and the communities of which we are a part, as well as the impact of our apartment communities on the environment.  Some highlights with respect to our associates and residents are set forth elsewhere in this proxy statement, see pages 42 and 46.  In particular, in 2020 we formalized our approach to diversity, equity and inclusion and revised our culture statement and associate communication with respect to our culture and we include metrics in our short-term compensation program for senior management that are based on our success in these areas.  With respect to our communities, for a number of years we have considered environmental impacts when making decisions regarding acquisitions, development and re-development:

COVID-19 Pandemic

The COVID-19 pandemic negatively impacted not only our business, but also our residents and associates, and required targeted and intentional responses.  With respect to our residents, we worked with those residents who experienced financial hardship by, among other things, providing payment plans, allowing for payment by credit card without an additional fee, providing installment payment options without an additional fee, and, in certain markets, waiving late fees and foregoing rent increases.  We also have created processes to assist residents who qualify in seeking governmental rent assistance funds.  In addition, we enhanced our cleaning protocols, provided residents with opportunities to participate in virtual activities, and, using technologies incorporated into our Next Generation Operating Platform, expanded services available to residents and potential residents in a non-contact manner, for example by expanding the activities available to be completed on our app and by increasing the use of self-guided tours and adding virtual tours.  With respect to our associates, we offered additional time-off, one-time bonuses, flexible work schedules, work-from-home options, vacation buy-out programs, mental wellness programs and other benefits to assist with addressing the impacts of COVID-19 on associates and their families.  We also utilized our governmental affairs group, which was formed in early 2020, to track and report on a daily basis legislation and regulation on federal, state and local levels to help ensure we were aware of the rapidly changing regulatory landscape

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PROXY SUMMARY

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This summary highlights selected information about the items to be voted on at the annual meeting. This summary does not contain all of the information that you should consider in deciding how to vote. You should read the entire proxy statement carefully before voting.

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Meeting Agenda and Voting Recommendations

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Our Existing Board

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Information About Our Board And Committees (Page 34)

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* Also acted by unanimous written consent during the year.

The number of meetings of the board as well as communication to the board increased in 2020 as a direct result of COVID-19.

GOVERNANCE HIGHLIGHTS (Page 24)

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Ernst & Young LLP, independent registered public accounting firm, served as our auditors for fiscal 2020.  Our Audit Committee has selected Ernst & Young LLP to audit our financial statements for fiscal 2021. Although it is not required to do so, the board is submitting the Audit Committee’s selection of our independent registered public accounting firm for ratification by the shareholders at the annual meeting in order to ascertain the view of our shareholders regarding such selection. Below is summary information about Ernst & Young’s fees for services during fiscal years 2020 and 2019:

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Executive Compensation Matters (Page 48)

We are requesting your non-binding vote to approve the compensation of our named executive officers as described on pages 48 through 86 of this proxy statement. The goals for our executive compensation program are to (i) attract, retain and motivate effective executive officers, (ii) align the interests of our executive officers with the interests of the Company, our shareholders, our associates and our residents, (iii) incentivize our executive officers based on clearly defined performance goals and measures of successful achievement, and (iv) align market competitive compensation with our long-term and short-term performance.

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Our shareholders have consistently supported our executive compensation program. At our 2020 Annual Meeting of Shareholders, 83% of the votes cast were voted in favor of our resolution seeking advisory approval of our executive compensation. Over the last five years, shareholder support for our advisory vote on executive compensation has averaged 87% (with no year below 83%). While we have consistently had strong shareholder support for our executive compensation program, we do continue to engage in a dialogue with shareholders on executive compensation issues. We will continue to consider the outcome of future advisory votes on executive compensation when establishing the Company’s compensation programs and policies and making compensation decisions regarding our named executive officers.  With respect to awards made in 2021 and thereafter, subject to shareholder approval (see Proposal No. 4), we have made changes to our compensation programs in part due to feedback we have received from shareholders.  These changes include adding a “double-trigger”” acceleration provision in connection with a change of control and adding a minimum 12 month vesting provision, subject to specific exclusions.

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The nine individuals listed below, each of whom is currently a member of the board, have been nominated for election to the board at the 2021 annual meeting of shareholders.  If any of the nominees is unable or declines to serve as a director at the time of the meeting, the proxies will be voted for any nominee who is designated by the present board to fill the vacancy. It is not expected that any nominee will be unable or will decline to serve as a director. The directors elected will hold their respective offices until the next annual meeting of shareholders or until their successors are elected and qualified.

Each nominee brings a strong and unique background and set of skills to our board, giving the board as a whole competence and experience in a wide variety of areas of value to the Company, including corporate governance and board service, executive management, corporate finance and financial markets, real estate investment and the real estate industry and civic leadership. For each of our director nominees, set forth below are the specific experience, qualifications, attributes or skills that led the board to conclude that the person should serve as a director for the Company. There is no family relationship between any of our directors or executive officers.

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Board Expertise

At UDR, we believe that diversity of background and perspective is an important attribute of a well-functioning board. Collectively, the members of our board standing for election embody a range of viewpoints, backgrounds and expertise.  Currently, 33% of the members of our board are women and, while our board does not currently have members who represent underrepresented populations, all recent searches have included ethnically diverse candidates (utilizing search firms with specific expertise with underrepresented populations) and we have adopted a “Rooney Rule” for all board searches.  The diversity of our board will continue to be a point of focus in connection with our board refreshment efforts:

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Vote Required and Board of Directors’ Recommendation

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The affirmative vote of a majority of the votes cast is required for the election of a director in an uncontested election. A majority of the votes cast means that the number of shares voted “for” a director’s election exceeds fifty percent of the total number of votes cast with respect to that director’s election. If an incumbent director does not receive a majority of the votes cast for his or her election, the director is required to tender his or her resignation for the consideration of the board. See “Corporate Governance Matters – Majority Voting Standard for Uncontested Director Elections.”

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Our board recommends that the

shareholders vote “FOR” the director nominees listed above.

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CORPORATE GOVERNANCE MATTERS

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Corporate Governance Overview

We believe that effective and transparent corporate governance is critical to our long-term success and our ability to create value for our shareholders. We frequently review our corporate governance policies, monitor emerging developments in corporate governance and enhance our policies and procedures when our board determines that it would benefit our Company and our shareholders to do so.

We maintain a corporate governance page on our website that includes key information about UDR’s corporate governance, including our:

All of these documents can be found by accessing the “Investor Relations” page at ir.udr.com and then clicking on “Corporate Governance” and “Governance Documents.” The documents noted above will also be provided without charge to any shareholder who requests them. Any changes to these documents, and any waivers granted by us with respect to our Code of Business Conduct and Ethics and our Code of Ethics for Senior Financial Officers, will be posted on our website.

We believe in and follow certain principles with respect to governance as follows:

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We also monitor our corporate governance policies and practices to maintain compliance with the provisions of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), the rules of the SEC and the corporate governance rules of the NYSE. Our policies and practices meet, and in many cases exceed, the listing requirements of the NYSE, applicable SEC rules and the corporate governance requirements of the Sarbanes-Oxley Act and the Dodd-Frank Act, including: 

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Majority Voting Standard for Uncontested Director Elections

The Company’s bylaws specify a majority voting standard in uncontested director elections, which incorporates a director resignation policy for any director who does not receive the requisite vote. Under this majority voting standard, the affirmative vote of a majority of the votes cast is required for the election of a director in an uncontested election. A majority of the votes cast means that the number of shares voted “for” a director’s election exceeds fifty percent of the total number of votes cast with respect to that director’s election. If an incumbent director does not receive a majority of the votes cast for his or her election, the director is required to tender his or her resignation to the board. The board would then decide within 90 days following certification of the shareholder vote, through a process managed by the Governance Committee and excluding the nominee in question, whether to accept or reject the tendered resignation, or whether other action is recommended. The board would promptly publicly disclose its decision and rationale. If an incumbent director’s resignation is accepted by the board, then the board may fill the resulting vacancy or decrease the size of the board in accordance with the bylaws. If a director's resignation is not accepted by the board, such director will continue to serve until his or her successor is duly elected and qualified, or his or her earlier death, resignation, retirement or removal. For the purposes of applying this majority voting standard, an election is considered “uncontested” if no shareholder provides notice of intention to nominate one or more candidates to compete with the boards’ nominees in the manner required by the bylaws, or if any such shareholder or shareholders have withdrawn all such nominations at least ten (10) days prior to the filing our definitive proxy statement with the SEC. In any contested election, each director shall be elected by a plurality of votes cast, in which case each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted.

Our Commitment to Shareholder Engagement

The Company has an ongoing proactive practice of meeting with and discussing corporate governance issues with significant shareholders throughout the year.  We value the insights of and feedback from our shareholders and remain committed to ongoing engagement with investors.  To this end, we engage in regular outreach to enable meaningful discussion and deliver feedback to our board to help drive strategic results.  In 2020 and early 2021, we engaged in direct outreach and discussions with 517 shareholders representing 84.1% of our outstanding shares including representatives of governance and stewardship functions representing 44.1% of our outstanding shares, although certain opportunities to engage with investors were curtailed due to the pandemic.  Key topics of focus during such interactions included company strategy and results, technological operating and capital allocation initiatives and environmental, social and governance (ESG) matters.

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Identification and Selection of Nominees for Directors

Our Nominating Committee works closely with our Chairman and Chief Executive Officer (“CEO”) and Lead Independent Director (who currently serves as Chairman of the Nominating Committee) in recommending to the board criteria for open board positions, taking into account such factors as the Nominating Committee deems important, including, among others, the current composition of the board, the range of talents, experiences, expertise and skills that would complement those already represented on the board and those that would help achieve the Company’s current and future goals as set forth in our strategic plan.  The recommendations are then discussed by the board. In evaluating a nominee, the board, acting through our Nominating Committee, will consider, among other things, whether a potential director nominee has the time available, in light of other business and personal commitments, to perform the responsibilities required for effective service on the board. The Nominating Committee considers candidates that are suggested by members of the board, as well as management, our shareholders and any director search firm retained by the board or the Nominating Committee, using the same criteria to evaluate all candidates.

The board believes its effectiveness is enhanced by being comprised of individuals with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of our business as well as diversity with respect to gender and ethnicity.  In our Code of Business Conduct and Ethics we describe diversity as embracing the following characteristics with respect to the Company as a whole, including our board: age, race, gender, nationality, physical ability, culture, religion, marital status, sexual orientation, experience and perspective.  In 2020, consistent with its overall views with respect to diversity and in order to formalize our practice, the board enhanced our Statement on Corporate Governance and the Charter of our Nominating Committee by amending such documents to adopt a “Rooney Rule” specifically requiring that diverse candidates, based on gender and ethnicity, be included in the initial pool for any external search for director candidates or for any external search for a Chief Executive Officer.  In addition, any search firm used for conducting any such searches is required to include such candidates in its initial pool of candidates.  Since 2019 we have hired search firms with specific experience in identifying candidates from underrepresented populations in connection with searches for board candidates.  While our board does not currently include any members that self-identify as an

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underrepresented minority, all recent searches for potential board members have included, and future searches will continue to include, diverse candidates. The diversity of our board will remain a focus in connection with our board refreshment efforts.  The board, through the Nominating Committee and in consultation with our CEO, will regularly review the changing needs of the business and the skills and experience of its board members, with the intention that the board will be periodically “renewed” as certain directors rotate off and new directors are recruited. The board’s commitment to diversity and renewal will be tempered by the need to balance change with continuity and experience. The board believes that its commitment in this regard has been effective in establishing a board that consists of members with diverse backgrounds, skills and experience that are relevant to the role of the board and the needs of the business, and the board will continue to monitor the effectiveness of these efforts as part of its periodic self-assessment process.

Once a potential director nominee has been identified, the Nominating Committee, in consultation with the Chairman and CEO and Lead Independent Director, will evaluate the prospective nominee against the specific criteria that have been established, as well as the standards and qualifications contained in our Statement on Corporate Governance. If it is determined based upon a preliminary review that a candidate warrants further consideration, members of the board, as appropriate, will interview the prospective nominee. After completing this evaluation and interview process, the board makes the final determination as to whether to nominate or appoint the new director.

In addition to any other applicable requirements, Section 2.11 of the bylaws sets forth the procedures and requirements relating to nominations of directors by shareholders. Any shareholder who wishes to recommend a prospective nominee for consideration at our 2022 annual meeting of shareholders must submit specified information, no sooner than November 9, 2021 and no later than December 9, 2021.

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Each proposed candidate also must submit a written questionnaire, representation and agreement specifically addressing agreements, arrangements or understandings that the candidate has with certain other persons, including with respect to voting commitments and compensation, as well as a representation and agreement to comply with our applicable policies, codes and guidelines. Such information should be sent to the attention of our Corporate Secretary at 1745 Shea Center Drive, Suite 200, Highlands Ranch, Colorado 80129-1540.

Proxy Access

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The Company’s bylaws include a proxy access provision which permits a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director candidates constituting up to 20% of the board, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the bylaws.

Shareholder Bylaws Amendments

In 2018, following the approval by our shareholders of a charter amendment, the board amended our bylaws to provide that a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years could propose a binding amendment to our bylaws.  A shareholder proposal submitted under our amended bylaws may not alter, modify or repeal Article VII of the bylaws (which addresses indemnification) or Section 8.5 (which addresses procedures for amending the bylaws) without the approval of any indemnitees adversely affected or our board, respectively.  Prior to the 2018 annual meeting we had engaged with shareholders holding approximately 74% of our outstanding common stock regarding the amendment and, while there was no consensus as to the appropriate ownership limits, some of our shareholders did indicate our ownership limits were acceptable.  Further, our research confirmed and continues to confirm that a number of companies require a supermajority of shareholders to amend the bylaws and that a number of companies incorporated in Maryland continue to provide their boards of directors the exclusive ability to amend their bylaws.

Director Rotation and Retirement

Directors are elected annually to serve for a term until the next annual meeting of shareholders or until their successors are elected and qualified. The board does not impose arbitrary limits on the number of terms a director may serve. However, the Nominating Committee will consider various criteria, including a director’s contribution to the board, in determining whether or not to recommend a director for re-election. Employee directors are required to resign as a director after ceasing to be an employee, unless the board asks them to continue to serve. The Chairman will refer the resignation to the Governance Committee for review. The board will decide, in light of the circumstances and the recommendation of the Governance Committee, the date at which the resignation will become effective. A vacancy created by a director’s retirement may be filled by a majority of the remaining directors in accordance with our bylaws. A director so appointed to fill the vacancy will stand for re-election at the first annual meeting of shareholders following that director’s appointment to the board if recommended for re-election by the Nominating Committee. In addition, the Company requires that directors tender their resignation when they change employment or other significant organizational affiliations. The board then decides, in light of the circumstances and the recommendation of the Governance Committee, whether to accept such resignation.

Director Independence

The board’s policy is that a significant majority of its members should be independent directors (see our Statement on Corporate Governance, which is available on our website at ir.udr.com). Each year, the board affirmatively determines whether each director has any material relationship with the Company (directly, or as a partner, shareholder or officer of an organization that has such a relationship with the Company), as defined under the NYSE listing standards and the Company’s director independence standards. The board has determined that all directors who served in 2020, and the directors who are standing for election at the annual meeting, are independent under both sets of standards, except Mr. Toomey, who is not independent because, in addition to serving as Chairman, he is the Company’s CEO. Additional information about each of the directors standing for election is set forth under Proposal No. 1 in this proxy statement. In making these independence determinations, the board considered information submitted by the directors in response to directors’ questionnaires and information obtained from the Company’s internal records.

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Succession Planning

One of the primary responsibilities of the board is to ensure that the Company has the necessary senior management talent to pursue our strategies and to be successful. The Company’s Statement on Corporate Governance states that the board is responsible for appointing the CEO, and planning for his succession, as well as the succession for other executive officers of the Company. The Compensation Committee is responsible for annually reviewing the development and retention plans for the Company’s key executive officers, including the CEO, reviewing and approving a succession plan for the CEO, and ensuring development and succession plans are in place for the Company’s key executive officers reporting to the CEO. Consistent with its responsibilities, the Compensation Committee regularly reviews succession plans for the CEO and the key executive officers, and reports to the board regarding those plans. Under the direction of the Compensation Committee, the CEO and the SVP – Organizational Development and Engagement have undertaken and continue to undertake a concerted effort to develop and implement a strategy to identify, assess and develop successors for the key executive officers. This effort involves potential candidates working with third party consultants and completing a series of leadership assessment programs with the goal of determining skill sets and executive potential as potential successors for key executive officers.

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The Company has a proven track record on talent development and succession:

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The following outlines certain highlights of our succession planning:

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Director Responsibilities and Obligations

Our directors have specific responsibilities and obligations arising from their service on the board and the Committees of the board, as described in the table below:

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Board Leadership Structure and Committees

The leadership structure of the board and information regarding the Audit, Compensation, Governance and Nominating Committees is provided in the following table:

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 Role of Compensation Committee and Compensation Consultants

Our Compensation Committee is responsible for developing and administering compensation programs for (1) our directors, (2) our executive officers, including base salaries and short-term and long-term incentive compensation plans, and (3) long-term incentive compensation plans for all of our associates. Annually, the entire board submits an evaluation of the CEO’s performance to the Chairman of the Compensation Committee and then the board meets in executive session to discuss and evaluate the performance of our CEO.  After that, the members of the Compensation Committee meet in executive session, without the CEO present, to further discuss and evaluate the performance of our CEO.

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Our CEO makes recommendations to, and consults with, the Compensation Committee with respect to the compensation for the executive officers who report directly to our CEO.

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The Compensation Committee has the sole authority to retain and terminate any compensation consultants to be used to assist in establishing compensation for our executive officers and to approve such consultants’ fees and other retention terms. The Compensation Committee engaged FPL Advisory Group as its independent compensation consultant for 2020.

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FPL reports directly to the Compensation Committee, and the Compensation Committee is free to replace FPL or to hire additional consultants from time to time. FPL does not have any conflict of interest with the Company, the members of the Compensation Committee or our executive officers. For more information regarding the Compensation Committee’s compensation consultants, see “Executive Compensation — Compensation Discussion and Analysis — Compensation Consultants.”

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Board of Directors and Committee Meetings

The board held eight meetings during fiscal 2020, including five meetings that were held by teleconference or by web-based application. No director attended fewer than 75% of the aggregate of (1) the total number of meetings of the board, and (2) the total number of meetings held by all committees of the board on which he or she served during fiscal 2020, held during the time such director was a member of the board or the applicable committee. The board has standing Audit, Compensation, Governance, Nominating and Executive Committees to assist it in discharging its duties. Information regarding each committee is set forth below: