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1100 Park Place, Suite 200

San Mateo, California 94403

March 28, 2024

Dear Stockholder:

Sincerely,

 

Angela L. Kleiman

Chief Executive Officer and President

 

Notice of Annual Meeting of Stockholders

To Be Held May 14, 2024

By Order of the Board of Directors and on behalf of the Secretary of the Company,

 

Angela L. Kleiman

Chief Executive Officer and President

San Mateo, California

March 28, 2024

This summary highlights certain information about Essex Property Trust, Inc., a Maryland corporation (the “Company”), and its 2024 Annual Meeting and summarizes information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and we strongly recommend you read the entire proxy statement before voting. For more complete information regarding the Company and its 2023 performance, we recommend that you review the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 23, 2024.

The Company will hold the Annual Meeting in a virtual-only meeting format again this year. At the Annual Meeting, we are asking our stockholders to consider and vote on the following matters:

For a discussion of the calculation of Core FFO, Core FFO per share-diluted, EBITDAre, net-debt-to-EBITDAre, NOI and same-property NOI and reconciliations to the most directly comparable measures under U.S. generally accepted accounting principles (U.S. GAAP), see Appendix A.

 

Source: SNL Financial and NAREIT

 

 

For a discussion of the calculation of Core FFO, Core FFO per share-diluted, EBITDAre, net-debt-to-EBITDAre, NOI and same-property NOI and reconciliations to the most directly comparable measures under U.S. GAAP, see Appendix A.

The Company believes in establishing and maintaining high standards of corporate governance, and it looks to improve and implement additional corporate governance measures designed to best serve the interests of the Company and stockholders and further align the interests of the Board and management with those of our stockholders. A summary of certain of our most important corporate governance policies and practices is detailed below:

Code of Business Conduct and Ethics - Our Board has adopted a Code of Business Conduct and Ethics (the “Code of Ethics”), which governs business decisions made and actions taken by our directors, officers and employees. All employees receive training on the Code of Ethics.

Corporate Governance Guidelines - Our Board has adopted Corporate Governance Guidelines to monitor policy and decision making at the Board and management levels and to provide the Company’s stockholders and other interested parties with insight into the Company’s corporate governance practices.

Policy on Political Contributions - Our Board has adopted a policy on Political Contributions, which governs Company and key employees’ contributions to political action committees, officeholders and candidates.

Policy on Hedging and Pledging Essex Equity Securities - Our Board has adopted a policy governing the hedging and pledging of Essex equity securities by our officers and directors, prohibiting the hedging of Essex equity securities and strictly limiting the pledging of Essex equity securities. The Company and all officers and directors are in compliance with this policy.

Insider Trading Policy - Our Board has adopted an Insider Trading Policy applicable to all directors, officers and employees of the Company, which governs the purchase, sale, and/or other dispositions of our securities by such persons and their affiliated entities, that we believe is reasonably designed to promote compliance with insider trading laws, rules and regulations, and the exchange listing standards applicable to us.

Policy for Recovery of Erroneously Awarded Compensation - Our Board has adopted a policy governing the recovery of incentive-based compensation from our executive officers requiring forfeiture or reimbursement of incentive compensation paid or awarded to any executive officer in the case of any restatement of the financial statements.

Stock Ownership Guidelines - Our Board has adopted Stock Ownership Guidelines to align the interests of the Board and key executives with the interests of stockholders.

Human Rights Statement - Our Board has adopted a Human Rights Statement that outlines our commitments to fundamental human rights principles and labor standards.

Vendor Code of Conduct - Our Board has adopted a Vendor Code of Conduct, which aligns our vendors, contractors, consultants and professional service providers with our internal Code of Ethics.

Climate Change and Environmental Policies - Our Board has adopted a Climate Change Policy and an Environmental Policy, which outline our commitments to reducing our greenhouse gas emissions and waste streams, while increasing our resource efficiency.

Copies of these documents are available on our website at http://www.essex.com under the heading “Investors” and subheading “Corporate Governance”, or have been filed as exhibits to our Annual Report on Form 10-K for the year ended December 31, 2023, and copies will be provided to any stockholder upon written request to Ms. Anne Morrison, Secretary, Essex Property Trust, Inc., 1100 Park Place, Suite 200, San Mateo, California 94403. The Company will post all amendments to, and with respect to the Code of Ethics, waivers from any provision of, these documents on its website. Please note that the information or separate reports contained on or posted to the website (including these or other referenced documents) is not incorporated by reference in, or considered part of, this proxy statement.

Essex remains committed and steadfast in its efforts to develop a best-in-class ESG program, an important and fundamental element of our ESG strategy. In 2023, we published our fifth annual ESG Report to summarize our significant accomplishments with respect to ESG matters as well as the status of ongoing initiatives and progress related to our goals. Further, we established a new set of ESG goals that focus our efforts on reducing our environmental impact, increasing the positive impact in our communities, and maintaining our commitment to equality. We believe these actions will benefit our Company and increase long-term stockholder value by improving the appeal of our communities to prospective and existing residents and making our Company a positive and attractive place to work.

In March 2024, we announced our commitment to setting science-based targets for our emissions reductions through the Science Based Targets initiative (“SBTi”) as we recognize the importance of reducing emissions and transparency in reporting. We hope that our commitment to SBTi will help contribute to sustainable growth for our Company and a low-carbon future for the planet.

We have a formal reporting and oversight structure for the Company’s long-term ESG strategy and goals. Our ESG Steering Committee (“ESG Committee”) is composed of key members from various departments and chaired by our Chief Administrative Officer. The ESG Committee meets approximately six times per year and is responsible for setting strategy and long-term ESG targets, and monitoring ESG performance across the Company. The ESG Committee’s targets and strategy are reported to the Nominating Committee, which formally oversees ESG strategy, goals and initiatives, including DEI efforts and ESG strategy. Our Audit Committee reviews the Company's ESG risks and mitigation strategies at least annually. Additionally, our management team regularly reports to the Nominating Committee and full Board on ESG matters.

 

The Company continues to improve its transparency with respect to target metrics by incorporating the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”) into our ongoing ESG strategy. This incorporation aligns our annual reporting with standards from the TCFD and also GRI, SASB and SDGs (each defined below). Additionally, the Company completed a climate risk assessment in 2022 to detect physical and transition risks to which Essex may be exposed. The findings from the assessment are used as a framework to inform scenario planning efforts and climate change action plans for risk mitigation strategies.

More information on our ESG goals and initiatives can be found in our 2022 ESG Report, which is available on our website at www.essex.com, and in our 2023 ESG Report which we expect to make available on our website in May 2024. ESG-related information provided in our ESG reporting, including such reporting in our proxy statement, may not be “material” under the federal securities laws for SEC reporting purposes, but is instead informed by various ESG standards and frameworks (including standards for the measurement of underlying data), and the interests of various stakeholders. Much of this information is subject to assumptions, estimates or third-party information that is still evolving and subject to change. For example, our disclosures based on any standards may change due to revisions in framework requirements, availability of information, changes in our business or applicable government policies, or other factors, some of which may be beyond our control.

In 2024, we committed to SBTi as we recognize the urgency of addressing climate change and acknowledge that reducing the greenhouse gas (“GHG”) emissions of the built environment will be critical to keeping temperature rise below the Paris Agreement threshold of 1.5C. Our newly developed energy reduction goal aims to be consistent with the Paris Agreement and set us on track for long-term GHG reduction across our portfolio.

We work to systematically reduce our GHG emissions by (i) reducing our energy consumption where possible, (ii) sourcing our energy needs from on- and off-site renewable resources, and (iii) purchasing green grid power. We install photovoltaic (PV) panels on available roof space to source as much electricity as feasible from on-site solar generation.

Our measurement and verification processes demonstrate that these projects deliver significantly improved energy savings with an investment that decreases rent increases for tenants, and with a return on investment that we believe is in the best interests of the Company and stockholders. To reduce energy, water and waste usage, we have focused on the following capital improvement projects:

 

In 2023, the Company continued to expand its sustainability efforts, including the following highlights:

 

PROXY STATEMENT

2024 Annual Meeting of Stockholders

Tuesday, May 14, 2024

ESSEX PROPERTY TRUST, INC.

1100 Park Place, Suite 200

San Mateo, California 94403

This proxy statement is furnished to the holders of the outstanding shares of common stock, par value $.0001 per share (the “Common Stock”), of Essex Property Trust, Inc., a Maryland corporation (the “Company” or “Essex”), in connection with the solicitation by the Company’s Board of Directors (the “Board”) of proxies in the accompanying form for exercise at the virtual 2024 Annual Meeting to be held online on May 14, 2024 at 1:00 p.m., Pacific Time, at www.virtualshareholdermeeting.com/ESS2024, and any postponement or adjournment thereof.

This proxy statement and the accompanying notice of annual meeting, proxy card and 2023 Annual Report to Stockholders are first being made available to stockholders on or about March 28, 2024.

The proxy statement, notice of annual meeting, proxy card, and 2023 Annual Report to Stockholders are available electronically at http://materials.proxyvote.com/297178.

Pursuant to the rules of the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials over the Internet, instead of mailing paper copies to each stockholder. Accordingly, on or about March 28, 2024, we are mailing to many of our stockholders a Notice of Internet Availability of Proxy Materials (“Notice”), while brokers and other nominees who hold shares on behalf of beneficial owners will be sending their own similar notice, containing instructions on how to access our proxy materials and 2023 Annual Report to Stockholders and how to vote. The Notice is not itself a proxy and cannot itself be used to vote your shares. If you received only a Notice this year, you will not receive paper copies of the proxy materials unless you request the materials by following the instructions on the Notice or on the website referred to in the Notice. Some stockholders may, if they have so requested previously, receive these materials via email or receive paper copies by mail.

The Annual Meeting will again be a completely virtual meeting of stockholders, which will be conducted via live webcast. You are entitled to participate in the Annual Meeting only if you were a stockholder of the Company as of the close of business on March 1, 2024 (the “Record Date”) or if you hold a valid proxy for the Annual Meeting.

You will be able to participate in the Annual Meeting online and all verified stockholders will be able to submit questions during the meeting by visiting www.virtualshareholdermeeting.com/ESS2024. To participate in and/or ask questions at the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of the Proxy Materials, on your proxy card, or on the instructions from your broker that accompanied your proxy materials. Questions may be submitted throughout the Annual Meeting via the question box provided on the webpage and may be addressed by the Company prior to the conclusion of voting. The Company will answer stockholder questions directly related to the business conducted at the Annual Meeting, as determined by the Chairman of the Board.

You may access copies of the Company’s proxy statement and annual report by visiting www.proxyvote.com.

The meeting will begin promptly at 1:00 p.m., Pacific Time, on May 14, 2024. Online access will begin at 12:45 p.m., Pacific Time, and we encourage you to access the meeting prior to the start time. If you encounter any difficulties accessing the virtual meeting or during the meeting time, please call the VSM Shareholder Meeting Basic Support Line - TFN: 844-986-0822 / International: 303-562-9302.

You are entitled to vote if you were a holder of record of Common Stock as of the close of business on March 1, 2024 (the “Record Date”). Your shares may be voted at the Annual Meeting only if you are present during the virtual meeting or represented by a valid proxy. Even if you plan to attend the Annual Meeting online, we recommend that you also vote by proxy as described below so that your vote will be counted if you later decide not to attend the Annual Meeting.

Stockholders of record as of the Record Date are entitled to one vote for each share of Common Stock held on all matters to be voted upon at the Annual Meeting. If you choose not to attend the Annual Meeting virtually, you may still authorize your proxy via the Internet or by telephone until 11:59 p.m. Eastern Time, on May 13, 2024, or by completing, signing, dating and returning a proxy card. The instructions for how to authorize your proxy are located on your Notice of Internet Availability of the Proxy Materials, on your proxy card, or on the instructions from your broker that accompanied your proxy materials.

The presence at the Annual Meeting, virtually or by proxy, of stockholders holding a majority of the shares of Common Stock outstanding on the Record Date will constitute a quorum for purposes of the Annual Meeting. Each share of Common Stock outstanding on the Record Date entitles the holder thereof to one vote on each proposal. As of the Record Date, there were 64,206,278 shares of Common Stock outstanding.

If your shares are held in the name of a broker, you should receive a voting instruction form from your broker. Your broker will vote your shares in the manner you timely indicate pursuant to the voting instruction form. If you do not timely indicate your voting instructions to your broker, the broker will not be permitted to vote your shares at the Annual Meeting on Proposal No. 1 (election of directors), or Proposal No. 3 (advisory vote to approve the Company’s named executive officer compensation) because such proposals are not routine matters under the New York Stock Exchange (“NYSE”) rules. However, your broker may in its discretion vote your shares on Proposal No. 2 (ratification of KPMG LLP) if you do not timely indicate voting instructions on that proposal because the proposal is a routine matter under the NYSE rules.

Shares of Common Stock represented by proxies that reflect abstentions or “broker non-votes” (i.e., a vote that is not cast on a non-routine manner by a broker that is present (virtually or by proxy) at the Annual Meeting because the shares entitled to cast the vote are held in street name, the broker lacks discretionary authority to vote the shares and the broker has not received voting instructions from the beneficial owner) will be counted as shares that are present for purposes of determining the presence of a quorum.

With respect to Proposal No. 1 (election of directors), our Seventh Amended and Restated Bylaws (the “Bylaws”), include a majority voting standard for the election of directors in uncontested elections, which are generally defined as elections in which the number of nominees does not exceed the number of directors to be elected at the meeting. In the election of directors, you may either vote “FOR” or “AGAINST” each nominee. Cumulative voting is not permitted. Under the majority voting standard, in uncontested elections of directors such as this election, each director must be elected by the affirmative vote of a majority of the votes cast by the holders of shares present virtually or represented by proxy and entitled to vote, assuming a quorum is present at the Annual Meeting. A majority of the votes cast means that the number of votes cast “FOR” a candidate for director exceeds the number of votes “AGAINST” as to that candidate for director. Brokers do not have discretionary authority to vote for directors. Abstentions and broker non-votes, if any, will not count as votes cast as to a nominee’s election and thus will have no effect in determining whether a director nominee has received a majority of the votes cast.

In accordance with our Bylaws, in this election, an incumbent candidate for director who does not receive the required votes for re-election is expected to offer his or her resignation to the Board. The Nominating Committee will then make a determination as to whether to accept or reject the offer of resignation and will submit such recommendation for consideration by the Board. Generally within 90 days after certification of the election results of the stockholder vote, we will publicly disclose the decision regarding any offer of resignation in a filing of a Current Report on Form 8-K with the SEC or by other public announcement. If a director’s offer to resign is not accepted by the Board, such director will continue to serve until his or her successor is duly elected, or his or her earlier death, resignation, retirement or removal.

Approval of each of Proposals No. 2 (ratification of KPMG LLP) and No. 3 (advisory vote to approve the Company’s named executive officer compensation) requires the affirmative vote of a majority of all the votes cast on the matter at the Annual Meeting, assuming a quorum is present at the Annual Meeting. For purposes of the votes on Proposals No. 2 and No. 3, abstentions and broker non-votes, if any, will not be counted as votes cast and will have no effect on the result of the vote on such proposals.

Stockholder votes will be tabulated by the persons appointed by the Board to act as inspectors of election for the Annual Meeting. The shares of Common Stock represented by properly executed proxy cards will be voted at the Annual Meeting as indicated or, if no instruction is given on a properly executed proxy card, in accordance with the recommendation of the Board, as set forth below.

The Board recommends that stockholders vote:

The Company does not presently know of any other business that may come before the Annual Meeting. If any other business is properly brought before the Annual Meeting, the persons named in the enclosed proxy will act thereon in their discretion.

No person is authorized to make any representation with respect to the matters described in this proxy statement other than those contained herein and, if given or made, such information or representation must not be relied upon as having been authorized by us or any other person.

Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is exercised by delivering to the Company, to the attention of Ms. Anne Morrison, Secretary, Essex Property Trust, Inc., 1100 Park Place, Suite 200, San Mateo, California 94403, a written notice of revocation or a properly executed proxy bearing a later date, or by attending the Annual Meeting and voting during the meeting. Attendance at the Annual Meeting will not by itself revoke a proxy.

The Company will bear all costs of soliciting proxies for the Annual Meeting. These costs include the expense of preparing and furnishing proxy materials for the Annual Meeting and reimbursements paid to brokerage firms and others for their expenses incurred in forwarding solicitation material regarding the Annual Meeting to stockholders. The Company may conduct solicitation of proxies personally, telephonically or by facsimile through its officers, directors and regular employees, none of whom will receive additional compensation for assisting with the solicitation.

Stockholders who previously elected to receive the proxy statement and the 2023 Annual Report to Stockholders over the Internet will be receiving an email on or about March 28, 2024, with information on how to access stockholder information and instructions for authorizing a proxy over the Internet. The Company encourages its stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of its annual meetings and reduce the cost to the Company associated with the printing and mailing of materials.

Stockholders of record wishing to receive future stockholder materials via email may elect this option by following the instructions provided when voting over the Internet at http://www.proxyvote.com. Upon electing to view future proxy statements and annual reports over the Internet, stockholders will receive an email notification next year with instructions containing the Internet address of those materials. The choice to view future proxy statements and annual reports over the Internet will remain in effect until the stockholder contacts their broker or the Company to rescind such instructions. Internet access does not have to be elected each year. Stockholders who elected to receive the proxy statement electronically over the Internet and who would now like to receive a paper copy of the proxy statement so that they may submit a paper proxy in lieu of an electronic proxy should contact either their broker or the Company.

Some brokers and other nominee record holders may be participating in the practice of “householding” Notices of Internet Availability of Proxy Materials or proxy statements and annual reports, as applicable. This means that only one copy of the Notice of Internet Availability of Proxy Materials or proxy statement and annual report may have been sent to multiple stockholders in a stockholder’s household. The Company will promptly deliver a separate copy of each applicable document to any stockholder who contacts the Company’s investor relations department by written request to the Company at Attn: Investor Relations, 1100 Park Place, Suite 200, San Mateo, California 94403 or by telephone at (650) 655-7800 requesting such copies. If a stockholder is receiving multiple copies at the stockholder’s household and would like to receive a single copy for a stockholder’s household in the future, stockholders should contact their broker, other nominee record holder, or the Company’s investor relations department to request mailing of a single copy of the applicable document.

The following table sets forth the beneficial ownership of shares of Common Stock as of the Record Date for (i) each person known by the Company to hold more than 5% of the outstanding shares of Common Stock, (ii) each director, each director nominee, and each of the named executive officers named in the Summary Compensation Table below, and (iii) all directors and executive officers as a group. As of the Record Date, there were 64,206,278 shares of Common Stock outstanding.

Beneficial ownership in the following table is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of Common Stock subject to options held by that person that are currently exercisable or exercisable within 60 days of the Record Date are deemed outstanding and shares underlying long term incentive plan units (“LTIP Units”), which are currently non-forfeitable or are non-forfeitable within 60 days of the Record Date, are also deemed outstanding. Such shares, however, are not deemed outstanding for the purposes of computing the percentage ownership of each other person. To the Company’s knowledge, except as set forth in the footnotes to this table and subject to applicable community property laws, each person named in the table below has sole voting and investment power with respect to the shares set forth opposite such person’s name. Unless otherwise stated, the address of all directors and executive officers is c/o Essex Property Trust, Inc., 1100 Park Place, Suite 200, San Mateo, California 94403.

At the Annual Meeting, the following individuals are each nominated for election as directors to serve until the annual meeting of stockholders in 2025 and until their successors are duly elected and qualified: John V. Arabia, Keith R. Guericke, Anne B. Gust, Maria R. Hawthorne, Amal M. Johnson, Mary Kasaris, Angela L. Kleiman, Irving F. Lyons, III, and George M. Marcus. Each of the nominees is currently a director of the Company. Each of the nominees has consented, if elected as a director of the Company, to serve until his or her term expires.

The Board believes that each such nominee will stand for election and will serve if elected as a director. However, in the event that any nominee is unable or unwilling to serve as a director at the time of the Annual Meeting, the discretionary authority provided in the proxy will be exercised by the proxy holders to vote for a substitute or substitutes nominated by the Board, or the Board, on the recommendation of the Nominating Committee, may reduce the size of the Board and the number of nominees.

The following table and charts set forth information as of the Record Date with respect to the incumbent directors who are standing for re-election at the Annual Meeting. Each of Thomas E. Robinson, Byron A. Scordelis and Michael J. Schall, current directors of the Company, are not standing for re-election at the Annual Meeting. Effective as of May 14, 2024, the composition of the committees will be as shown below. Mr. Robinson currently serves on the Audit Committee and Mr. Scordelis currently serves on the Nominating Committee, and each will no longer serve on such committees effective as of May 14, 2024.

 

The following Experience and Skills Matrix summarizes the qualifications and experience of our nine director nominees. Messrs. Robinson, Schall and Scordelis have been omitted, as they are not standing for re-election. For additional information on our nominees, see “Proposal 1: Election of Directors” beginning on page 17.

 

The charts presented below represent a snapshot of skills information regarding the proposed composition of the Board following the Annual Meeting, assuming the election of the nine director nominees.

 

Certain biographical information about the director nominees is furnished below, highlighting each director nominee’s specific experience, qualifications, attributes and skills that led the Board to the conclusion that each should serve as a director.

During 2023, the Board held four formal meetings. Each director attended (whether in person, virtually, or telephonically) at least 75% of the total number of the meetings of the Board and meetings of each committee of the Board on which he or she served. In 2023, the Board had three key standing committees: the Audit Committee, the Compensation Committee, and the Nominating Committee. From time to time, the Board also utilizes an Executive Committee.

The Company encourages, but does not require, its Board members to attend the annual meeting of stockholders. All of the Company’s incumbent directors who were serving on the Board at such time attended the 2023 annual meeting of stockholders.

Members: Mary Kasaris (Chair), Maria R. Hawthorne and Thomas E. Robinson

Number of Meetings in 2023: 5

Independence under NYSE Rules: Yes, all members

Members: Amal M. Johnson (Chair), Irving F. Lyons, III and Mary Kasaris

Number of Meetings in 2023: 3

Independence under NYSE Rules: Yes, all members

Members: Irving F. Lyons, III (Chair), Amal M. Johnson and Byron A. Scordelis

Number of Meetings in 2023: 3

Independence under NYSE Rules: Yes, all members

Members: George M. Marcus (Chair), Keith R. Guericke, Irving F. Lyons, III and Angela L. Kleiman (as of September 2023)

Number of Meetings in 2023: 0

The Board has designated, in accordance with NYSE corporate governance listing standards, Irving F. Lyons, III as the lead independent director. The Company’s non-management directors meet at regularly scheduled executive sessions, without management, at which Mr. Lyons presides.

The Company has maintained a leadership structure of different individuals serving as Chairman and Chief Executive Officer since its initial public offering in 1994 in recognition of the differences between the two roles. The responsibility of the Chief Executive Officer is to oversee the day-to-day execution of the Company’s business strategy. The Chairman is responsible for effectively leading the Board in providing oversight and direction to the Company's management. This separation of the roles of Chairman and Chief Executive Officer allows for greater oversight of the Company by the Board. The Chairman is Mr. Marcus, who is a founder of the Company and has a significant ownership interest. Mr. Marcus has extensive knowledge of the Company and the real estate industry, and the Company believes that because of his background and experience, he is able to serve as an effective Chairman. Mr. Marcus is involved in many other business and philanthropic activities. Ms. Kleiman's responsibility as the Company's Chief Executive Officer is to oversee the day-to-day execution of the Company's business strategy. The Board has determined that the Company’s Board leadership structure is the most appropriate at this time, given the specific characteristics and circumstances of the Company, and the unique skills and experience of Mr. Marcus and Ms. Kleiman.

With respect to the Board’s role in the risk oversight of the Company, the Board conducts an annual review of enterprise level risks, including ESG and cyber risks, and mitigation strategies. Additionally, the Board has promulgated internal Company policies that set forth which transactions may require the prior approval of the Board or a committee of the Board and which transactions may proceed with management authorization and without any such prior Board approval. These Board policies cover transactions in the following areas: financings, acquisition, development, redevelopment, dispositions, other investments and general corporate activities. Generally, these policies set forth a specified dollar threshold and if a transaction exceeds that threshold, the prior approval of the Board or a committee of the Board is required. By requiring the prior approval of larger transactions, which generally may involve more risk to the Company simply due to the transaction size, the Board seeks to provide risk oversight of the Company. The Board has promulgated a corporate investment policy that establishes guidelines with respect to investment of the Company’s funds; such guidelines cover the required qualifications of outside investment managers and the types and concentration limits of investment securities that are authorized for investment. The Compensation Committee has determined that the pay policies and practices of the Company are not reasonably likely to have a material adverse effect on the Company. Also, related party transactions are generally reviewed by the Audit Committee. See “Certain Relationships and Related Person Transactions – Policies and Procedures with Respect to Related Person Transactions.”

Upon the recommendation of the Nominating Committee, the Board nominated the following incumbent directors for election at the Annual Meeting: Mr. Arabia, Mr. Guericke, Ms. Gust, Ms. Hawthorne, Ms. Johnson, Ms. Kasaris, Ms. Kleiman, Mr. Lyons, and Mr. Marcus. Each of Mr. Robinson, Mr. Schall, and Mr. Scordelis are not standing for re-election at the Annual Meeting.

Under independence standards established by the Board, which reflect the NYSE director independence standards as currently in effect, a director does not qualify as independent unless the Board affirmatively determines that the director has no material relationship with the Company, either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company. The Board considers such facts and circumstances as it deems relevant to the determination of director independence.

The Board has determined that the following directors have no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company), and each is independent within the meaning of independence as set forth in the rules of the NYSE: John V. Arabia, Anne B. Gust, Maria R. Hawthorne, Amal M. Johnson, Mary Kasaris, Irving F. Lyons, III, George M. Marcus, Thomas E. Robinson and Byron A. Scordelis. This represents nine of our twelve current directors and seven of our nine director nominees. Mr. Guericke, Ms. Kleiman (our President and Chief Executive Officer) and Mr. Schall (our former President and Chief Executive Officer who is not standing for re-election at the Annual Meeting) are the only current directors who are not independent.

In determining the independence of Mr. Marcus, the Board considered the matters that refer to Mr. Marcus set forth under “Certain Relationships and Related Person Transactions” below. The Board also considered the directors’ ownership of Essex equity securities and determined, in accordance with principles of the NYSE listing standards, that such ownership is not inconsistent with a determination of independence.

Led by our Nominating Committee, our Board seeks to maintain a board that, taken as a whole, has the objectivity, diversity and mix of skills, reputation and experience to provide comprehensive and effective oversight of the Company’s strategic, operational and compliance risks, as well as the knowledge, ability and independence to deliver the high standard of governance expected by our stockholders. The Nominating Committee believes that ongoing board refreshment is important to maintain an appropriate mix of skills and provide fresh perspectives while leveraging the institutional knowledge and historical perspective of the Board’s longer-tenured members. In 2017, the Nominating Committee initiated a plan focused on board refreshment, with a specific focus on expanding the diversity of the Board based on gender, experience and expertise. Since then, the Company has accomplished the following:

The Board is also mindful that director tenure can be relevant to the Board’s performance. In this regard, the Board consists of longer-serving directors with significant experience and institutional knowledge who bring critical skills to the boardroom. Such longer-serving directors have a deep understanding of the Company’s business and strategy, provide historical context in Board deliberations, and enhance Board dynamics and the Board’s relationship with management.

In particular, the Board believes that Messrs. Marcus and Guericke, who have held various positions of senior leadership in the Company since its initial public offering in 1994, are a significant strength of the Board. Under their combined leadership, the Company has generated one of the highest total stockholder returns in the REIT industry over that period. Accordingly, while director tenure is taken into consideration when making nomination decisions, the Board believes that imposing limits on director tenure would unnecessarily deprive it of the valuable contributions of its most experienced members.

The Board and each committee of the Board conduct an annual self-evaluation of their respective performance to assess whether it, its directors, and its standing committee are functioning effectively. Each director is also asked to provide, on an annual basis, individual assessments, feedback on the competencies and skills of other directors, and feedback on Board effectiveness. The focus of the assessments, which in 2023 included both written questionnaires and interviews, is on the contribution of the Board to the Company as a whole, each individual director’s competencies, skills, and contribution to the work of the Board and its committees, and areas in which the Board and/or management believes improvement may be desirable. The results of the self-evaluations, with an assessment of the Board’s performance, are summarized and discussed with the Nominating Committee and the full Board. Since 2022, the Nominating Committee, in consultation with the Lead Director, has periodically engaged a third party to participate in the evaluation process.

The Company’s stockholders possess the right to nominate candidates to the Board through proxy access provisions of the Bylaws. The Company’s Bylaws permit a stockholder, or a group of up to 20 stockholders, owning at least 3% of the outstanding shares of Common Stock continuously for at least the prior three years, to nominate for election to the Board, and include in the Company’s proxy materials for its annual meeting of stockholders, director nominees constituting up to the greater of two individuals or 20% of the Board (rounding down to the closest whole number), all subject to additional eligibility, procedural and disclosure requirements set forth in the Bylaws. The foregoing is a summary of Section 2.13 of the Bylaws and is qualified in its entirety by the text of that section. For additional information, see “Deadline for Receipt of Stockholder Proposals – Proxy Access Nominations.”

The Bylaws also permit the stockholders of the Company to amend the Bylaws by the affirmative vote of the holders of a majority of the outstanding shares of Common Stock, pursuant to a binding proposal submitted by any stockholder or group of up to five stockholders holding at least one percent of the outstanding shares of Common Stock for at least one year, all subject to certain notice, procedural and disclosure requirements and other limitations set forth in the Bylaws. Before this amendment was adopted, the Bylaws provided that the Board had the exclusive right to amend the Bylaws, as permitted by Maryland law.

The Company has proactive ongoing dialogue with its stockholders with respect to important corporate governance matters. We consider our relationship with our stockholders to be an important part of the Company’s success and we value the perspectives of our investors. During 2023, our management team reached out to stockholders who collectively held approximately 67% of the Company’s outstanding shares of Common Stock for the purpose of discussing the Company’s practices and policies with respect to governance, compensation practices and ESG matters. These discussions addressed governance matters including, among others, board composition and refreshment, executive compensation, and ESG issues, such as sustainability initiatives and workforce well-being and diversity. The feedback from stockholders was conveyed to and discussed with the Nominating Committee and the full Board. The goal of these discussions was to ensure that management and the Board understood and considered the issues that matter most to our stockholders and to enable the Company to address them effectively. In addition to conversations with our stockholders, the Company receives correspondence throughout the year from stockholders and stockholder advocacy groups and, if appropriate, responds and/or shares such correspondence with the Nominating Committee and the full Board whenever requested or otherwise appropriate. The Company plans to take a similar approach in 2024 by maintaining a dialogue with its stockholders with respect to such matters.

The Company endeavors to ensure that the views of stockholders and other interested parties are heard by the Board or individual directors, as applicable. Our corporate governance guidelines (which may be accessed at http://www.essex.com) provide that the identity of the lead independent director will be set forth in the annual meeting proxy statement, together with a method for interested parties to communicate directly with the lead independent director or with the non-management directors as a group. Stockholders or any other interested parties wishing to formally communicate with the Board, the lead independent director, non-management directors, or any individual directors may send communications directly to the lead independent director of the Board: Irving F. Lyons, III, Lead Independent Director, c/o Essex Property Trust, Inc., 1100 Park Place, Suite 200, San Mateo, California 94403.

During the year ended December 31, 2023, Mr. Lyons, Ms. Johnson and Ms. Kasaris served as members of our Compensation Committee. None of the members of our Compensation Committee is currently, or has been, an officer or employee of the Company. There were no insider participations or compensation committee interlocks among the members of our Compensation Committee during fiscal year 2023. Certain transactions and relationships between the Company and certain of its officers and directors are set forth below in the section titled “Certain Relationships and Related Person Transactions.”

There are no family relationships among any of the directors or executive officers of the Company.

The Company encourages its non-employee directors to own shares of the Company’s stock. In furtherance of this policy, the Company adopted guidelines setting a goal for each non-employee director to own a number of shares of the Company’s stock equal in value to five times such director’s annual cash retainer, in each case, as in effect as of, and based on the Company’s stock price as of, January 1, 2010, or such later date that a director joined the Board. Directors are expected to achieve this goal within four years of joining the Board. The Board or the Nominating Committee may waive this requirement or modify this guideline under certain circumstances. As of December 31, 2023, all non-employee directors were in compliance with the stock ownership guidelines or had additional time within which to come into compliance with such guidelines.

The Company encourages its executive officers to own shares of the Company’s stock. In furtherance of this policy, the Company has set goals for executive officers to own a number of shares of the Company’s stock equal in value to, with respect to the Chief Executive Officer, five times such individual’s annual base salary, and, with respect to the Company’s other executive officers, four times such individual’s annual base salary, in each case, as in effect as of, and based on the Company’s stock price as of, February 10, 2011, or such later date that an individual becomes an executive officer. Executive officers are expected to achieve this stock ownership goal no later than five years after becoming an executive officer. The Board or the Nominating Committee may waive this requirement or modify this guideline under certain circumstances. As of December 31, 2023, all executive officers were in compliance with the stock ownership guidelines or had additional time within which to come into compliance with such guidelines.

Stock ownership for purposes of compliance with our director and executive officer ownership guidelines includes all shares of our common stock held directly or indirectly, LTIP Units (to the extent fully earned) and time-based restricted stock units (“RSUs”) (for the avoidance of doubt, any shares underlying performance-based awards will only be considered to the extent fully earned).

Under the Company’s director compensation program as in effect after our 2023 Annual Meeting, each non-employee director of Essex was entitled to receive the following compensation under the Company’s director compensation program:

The Compensation Committee and the Board periodically review the total compensation for non-employee directors by assessing the compensation at similarly-sized real estate investment trusts, and the Board chose to make the following changes to director compensation effective as of the date of the 2024 Annual Meeting:

Director Compensation Table. The table below summarizes the compensation the Company paid to directors for the year ended December 31, 2023. Mr. Schall, who served a portion of 2023 as the Company’s Chief Executive Officer, and Ms. Kleiman, who served a portion of 2023 as the Company’s Chief Operating Officer and the remainder of 2023 as the Company's Chief Executive Officer, are not included in the table below because they did not receive any additional compensation for services provided as a director in 2023.

The Compensation Committee, with the assistance of Company management, regularly considers the Company’s compensation policies and practices to assess whether they encourage unnecessary or excessive risk taking. In 2023, the Compensation Committee considered, among other factors, the following risk-mitigating features of the Company’s compensation programs: (i) a balanced mix of short- and long-term compensation (including salary, cash bonus, and time and performance based equity-based compensation); (ii) defined performance goals, including corporate and individual goals, and objectives that avoid excessive weight on a single performance measure; (iii) minimum stock ownership guidelines, which ensure that executive officers have a meaningful direct ownership stake in the Company and align executive officers with long-term stockholder interests; and (iv) restrictions on engaging in hedging transactions in the Company’s securities.

Based on this assessment, the Company believes that its compensation policies and practices do not present risks that are reasonably likely to have a material adverse effect on the Company.

As of the Record Date, the executive officers of the Company were as follows:

Biographical information concerning the executive officers of the Company is set forth below, other than Ms. Kleiman, whose biographical information appears above under “Proposal No. 1: Election of Directors.”

This Compensation Discussion and Analysis evaluates the compensation policies and programs for our named executive officers as determined under the SEC’s executive compensation disclosure rules for 2023. The following table identifies our named executive officers for purposes of this Compensation Discussion and Analysis.

The primary objectives of the Company’s executive officer compensation program are to (i) attract, motivate and retain experienced, effective executives, (ii) direct the performance of those executives with clearly defined goals and measures of achievement, and (iii) align the interests of management with the interests of the Company’s stockholders. With regard to absolute levels of executive compensation and the Company’s executive officer compensation program, the Compensation Committee periodically reviews relevant information about competitive pay levels and structures but also considers a number of other factors, as described in further detail in this Compensation Discussion and Analysis.

The Compensation Committee views pay for performance as an important component of the Company’s executive officer compensation philosophy. The Compensation Committee considered the Company’s performance in 2023 in determining levels of executive officer compensation, including short-term and long-term incentive compensation. In furtherance of the Company’s pay for performance philosophy, each year, the Board sets annual corporate goals that are generally designed to promote stockholder value creation. These corporate goals are used as the basis for measuring management performance, a key consideration in granting both annual bonuses and long-term equity-linked or equity-based incentive awards.

 

For 2024, the percentage of executive target total compensation tied to long-term performance- and service-based incentive awards will continue to be well-over 50% for all executive officers, consistent with past practice and pay mix. With respect to the equity awards granted to our executive officers in 2024, 85% of the long-term incentive awards are tied to performance metrics

with the following two criteria: (1) 45% are tied to the achievement of the Company’s total stockholder return (“TSR”) relative to the FTSE NAREIT Equity Apartments Index (“NAREIT Apartment Index”) during a three-year performance period (the “TSR Goals”) and (2) 40% are tied to the Company's achievement of Core FFO per diluted share growth, which is the Company’s primary earnings metric, over a three-year period. The Compensation Committee will set Core FFO per diluted share goals each year with the final determination occurring after the three-year period ends (“Core FFO Goals”). In addition, 15% of the total awards granted to the executive officers were granted in the form of time-based RSUs that will vest over a period of three years from the grant date. The long-term incentive grants awarded on February 8, 2024 will appear in the Summary Compensation Table of the proxy statement for fiscal year 2024. The award structure is described in more detail in the “Description of Individual Elements of Named Executive Officer Compensation” section below.

In addition, historically, the executive officers have been awarded stock option awards and “DIP RSUs”. DIP RSUs were subject to performance vesting based on both (i) the three-year TSR Goals and (ii) the gain or purchase price for the disposition of certain assets of the Company’s real estate portfolio during the calendar year following the year in which the RSUs are granted. DIP RSUs were also subject to a one-year service-based vesting condition. In order to simplify the compensation structure for our executive officers and to more closely align executive compensation with the Company's goals and objectives, the Compensation Committee eliminated stock option awards and “DIP RSU” awards for the February 2024 long-term incentive grants.

The Compensation Committee believes that a meaningful portion of executive pay should be based on the Company’s performance relative to its peers. Our target pay mix evidences this pay-for-performance philosophy and emphasizes the alignment of our executive officers’ interests with those of our stockholders. The executive compensation reported in the Summary Compensation Table for 2023 does not include the long-term incentive grants awarded to the executive officers in February 2024. As previously described, in 2023, the Compensation Committee decided that it was in the best interests of the Company and stockholders to move the grant date for the long-term incentive awards from December to February. As a result, the target pay mix for 2024 for our executive officers will reflect the long-term incentive awards, salary and performance-based annual bonus similar to the Company's historical practice.

In 2023, approximately 67% of the total direct compensation for the CEO, and approximately 55% of the total direct compensation for the other NEO’s, was performance-based and not guaranteed. The named executive officer's target pay mix for 2023 is weighted more heavily towards short-term compensation than in the past due to the fact that they were not granted any performance and service based RSUs in 2023 due to the change in the granting schedule from December to February. The graphs below illustrate the compensation breakdown and the chart on page 40 explains how each element of compensation fits into the Company’s overall program.

 

Consistent with our commitment to strong corporate governance and responsiveness to our stockholders, we maintain the following compensation policies and practices to drive performance and serve our stockholders’ long-term interests:

We currently submit an advisory vote to approve our named executive officer compensation to our stockholders on an annual basis. At our 2023 annual meeting, holders of approximately 94% of the votes cast voted “for” the advisory proposal. As illustrated by the graph below, over the past five years, on average, holders of approximately 95% of the votes cast voted “for” this advisory proposal. We believe the strong, continued support for our compensation program in 2023 and in past years reflects the strong alignment between our named executive officer compensation and performance.

 

In addition to considering the results of the stockholder vote, the Compensation Committee also considered the positive views on our compensation structure expressed by our stockholders during our investor relations outreach throughout the year, as discussed in our Stockholder Engagement section on page 29, in continuing to apply the same principles in determining the amounts and types of executive compensation, the Compensation Committee did not implement substantial changes, other than the introduction of performance stock units tied to Core FFO performance goals, the elimination of options and DIP RSUs to simplify the compensation structure and moving the grant date of the long-term incentive awards from December to February as previously described.

The objectives of our compensation program for executive officers are to:

Role and Procedures of the Compensation Committee. The Compensation Committee, composed of independent, non-employee directors, determines and approves the compensation arrangements for the executive officers. The Committee has the authority to select, retain and terminate special counsel and other experts (including compensation consultants) as the Committee deems appropriate.

In fiscal year 2023, the Compensation Committee retained Mercer as its independent compensation consultant to advise the Compensation Committee on the Company's executive compensation. In compliance with SEC promulgated rules under the

Dodd-Frank Act and the requirements of the NYSE listing standards, the Compensation Committee determined, and Mercer affirmed in its representations to the Compensation Committee, that Mercer meets the requirements to be considered independent. The Compensation Committee reassesses the independence of its advisers at least annually.

In addition to the information and analysis provided by Mercer, the Compensation Committee also considered the publicly filed information of our peers (among other factors) in making 2023 compensation decisions with respect to the named executive officers. Mercer concluded that the total target compensation of the named executive officers, including target long-term incentive opportunities, is well-below the median compensation of the Company’s peers.

While the Compensation Committee determines the Company’s overall compensation philosophy and sets the compensation for the Company’s CEO and other executive officers, it looks to the CEO to make recommendations with respect to both overall compensation policies and specific compensation decisions. For each fiscal year, the Company’s CEO recommends to the Compensation Committee the levels of base salary, targeted annual bonus and long-term equity for the executive officers other than herself, within the elements of compensation otherwise established by the Compensation Committee. The Compensation Committee also annually reviews and approves goals for each fiscal year for specific executive officers. Such goals may include company-wide, business unit and individual goals.

Following the conclusion of each fiscal year, the Compensation Committee reviews actual performance against goals and, in consultation with the CEO and as discussed further below, sets the actual bonuses to be paid to the executive officers. The CEO also provides the Compensation Committee with her perspective on the performance of the Company’s executive officers as well as a self-assessment of her own performance. The Compensation Committee establishes the compensation package for the CEO. The Company’s Chief Financial Officer also attends the Compensation Committee’s meetings to provide perspective on the competitive landscape and the needs of the business and to discuss potential new elements for the executive officer’s compensation packages.

Peer Group. In consultation with Mercer, for the 2023 peer group, the Company chose to make two adjustments to the peer group from 2022. American Homes 4 Rent and Regency Centers Corporation were added to the peer group, and Public Storage and Realty Income Corporation were removed from the peer group. These changes were made to better align the peer group with the Company’s asset size, property type, and geographic footprint. The peer group for 2023 included the following 14 equity REITs.

 

In fiscal year 2023, the Compensation Committee considered the peer group information prepared by Mercer pursuant to a 2023 benchmarking analysis (the “2023 Mercer Analysis”) in determining overall compensation levels. The 2023 Mercer Analysis concluded that the overall target compensation for all of the named executive officers were well below the median of the peer group. The CEO target compensation was in the bottom 20% of the peer group but the Compensation Committee chose not to make any adjustments to her base salary or target annual bonus for 2023, other than the increase in connection with her promotion to the position of CEO upon Mr. Schall’s retirement from that role. The Compensation Committee also did not increase the base salaries or target annual bonuses for the named executive officers for 2023 as compared to 2022, other than for the CAO, who took on increased management responsibility in 2023 and whose total target compensation was in the bottom third of the peer group based on the 2023 Mercer Analysis.

Key Elements of Executive Officer Compensation. The key elements of Essex’s current compensation program for the executive officers are summarized in the table below:

None of the Company’s executive officers has an employment agreement. Base salaries are viewed as a customary element necessary to hire and retain executive officers. Base salary and any changes in base salary are based on views of individual retention and/or performance factors and market data at peer companies, without benchmarking. For 2023, the Compensation Committee established base salaries in light of these considerations as well as subjective assessments of individual performance, scope of responsibilities, expertise and experience, and the Company’s financial performance and condition. Other than for the CAO, who took on increased management responsibility in 2023 and whose total target compensation was in the bottom third of the peer group based on the 2023 Mercer Analysis, the Compensation Committee did not make any changes to base salaries for the named executive officer positions for 2023 as it believes that the base salaries are aligned with the Company’s peer group and are sufficient to attract and retain top talent.

Each executive officer is eligible to earn an annual cash bonus based on the achievement of the annual business plan approved by our Board and the meeting of performance goals during the year. The performance goals used for determining an officer’s annual bonus include qualitative individual and business unit goals and quantitative corporate performance goals as determined by the Compensation Committee and by the CEO in her recommendations to the Compensation Committee.

Each year, a target bonus amount is established for each executive officer and is reviewed by the Compensation Committee. 50% of the Company's executive officers' annual bonus is tied to achieving the corporate performance goals and 50% is tied to achieving the individual and business unit goals. Each year, a target bonus amount is established for each executive officer and is reviewed by the Compensation Committee. 50% of the Company's executive officers' annual bonus is tied to achieving the corporate performance goals and 50% is tied to achieving the individual and business unit goals. Each named executive officer had a maximum opportunity to earn 200% of target with respect to the portion of the annual bonus tied to corporate performance goals if specific performance levels exceed the corporate performance goals per the annual business plan. If specific performance levels fell below the threshold set for each goal then the named executive officers would receive 0% of their bonus with respect to that particular goal. If the Company did not exceed thresholds for any goals then the named executive officers would receive no annual bonus. The portion of each named executive officer’s annual bonus that is tied to their individual and business unit goals is capped at 100% of the target bonus.

In 2023, annual bonus targets were set based on the results of the 2023 Mercer Analysis to align named executive officer short-term incentives with those at peer companies for purposes of attracting and retaining talent. Specifically, following the Compensation Committee’s review of appropriate, market-based compensation levels, the Compensation Committee did not increase the 2023 target individual or corporate bonuses for the named executive officers from the bonuses set in 2022, other than for the CAO. The 2023 Mercer Analysis concluded that the CAO's target total compensation was in the bottom third of the peer group and the Compensation Committee determined, based on her experience and performance, to raise the CAO's individual and business unit target bonus in order to bring her total cash compensation closer in line with peer practices.

The table below reflects the target bonus opportunity tied to achievement of the corporate performance objectives for each of our named executive officers for 2023, as well as the actual bonus paid with respect to the corporate component of the annual bonus.

2023 Corporate Goals The Company’s primary performance measures for purposes of the corporate component of the annual bonuses are Core FFO per diluted share and the growth in same-property NOI. The Board reviews the operating plans that include annual Core FFO per diluted share targets and expected NOI results. The target levels for the increase in Core FFO per diluted share from year to year are dependent on a number of factors, including expectations surrounding internal and external growth opportunities, general economic conditions, real estate fundamentals and other specific circumstances facing the Company in the coming year. The Compensation Committee also establishes Core FFO goals that are consistent with the annual business plan. For 2023, the specific corporate goals were as follows:

 

All of the corporate goals were within or exceeded the established range with the exception of the goal related to achieving the underwritten yields from acquisitions and stabilized developments for 2021 and 2022. The threshold performance for this goal was tied to achieving 95% of the proforma underwritten NOI yields, which was not achieved due to higher delinquency and slower recovery of rent growth as a result of the continued impacts of COVID-19 related regulations. As a result, the Compensation Committee awarded the named executive officers an above-target annual bonus tied to corporate goals which equated to an average of 150% of the corporate portion of the target bonus.

A portion of each named executive officer’s bonus for 2023 also related to achievement of both individual goals, including the evaluation of the officer’s handling of his or her day-to-day responsibilities, and individual performance goals and, in some cases, business unit goals. These goals include objective measures of performance as well as performance relative to peers. For 2023, the primary individual and/or business unit-based bonus criteria for our named executive officers were as follows:

Each named executive officer met their individual goals for 2023 (other than Mr. Berry, whose employment terminated in August 2023). As a result, the Compensation Committee awarded the named executive officers 100% of the target annual bonus tied to individual goals.

The Compensation Committee believes that short-term incentive pay should appropriately reward management under the pay-for-performance philosophy and awarded the named executive officers, other than Mr. Berry, above-target annual bonuses which equated to an average of 125% of target.

Payments for bonuses compared to targets in 2023 were as follows:

As described above, in fiscal year 2023, the Company did not grant any equity compensation to its named executive officers. Commencing with the annual awards that would have historically been granted to the named executive officers in December 2023, the timing of the annual equity awards to the executive officers was moved to the first quarter of each fiscal year in order to align with industry best practices.

The Compensation Committee utilizes long-term incentive compensation to accomplish the following objectives:

2024 Performance-Vesting RSU Awards. The equity compensation packages granted in February 2024 consisted of three different types of awards: 45% of the awards were RSUs subject to both service-based vesting and performance-based vesting based on the achievement of the TSR Goals (the “TSR RSUs”), 40% of the awards were RSUs subject to both service-based vesting and performance-based vesting based on the achievement of the Core FFO Goals (the “Core FFO RSUs”), and 15% of the awards were RSUs subject to service-based vesting, in each case, granted under the Company’s stockholder-approved Incentive Award Plan. RSUs are settled in shares of our Common Stock.

The TSR RSUs granted to the executive officers in 2024 are subject to performance-based vesting based on achievement of the Company’s TSR Goals. The TSR RSUs are also subject to time-based vesting, at the rate of one-third of the TSR RSUs on each of the first through third anniversaries of the date of grant. The number of TSR RSUs actually earned will be determined by the Compensation Committee following the completion of the three-year performance period. The TSR RSUs will continue to be benchmarked to the NAREIT Apartment Index, which is representative of REITs in the multifamily housing industry across the United States. The Compensation Committee believes that the peer group in the NAREIT Apartment Index appropriately represents the Company’s operating performance and shareholder return against its direct competitors in the multifamily space.

Performance against the TSR Goals for the TSR RSUs granted during 2024 will be determined by the Compensation Committee following the completion of the three-year performance period, using the following matrix:

In the event the Company’s relative total stockholder return is between two achievement levels, the percentage of TSR RSUs that is earned will be based on linear interpolation between the amounts set forth above. In the event the Company’s relative total return underperforms the NAREIT Apartment Index by more than 5.0%, no TSR RSUs will be earned.

The Core FFO Goals applicable to the Core FFO RSUs will be set annually at the start of each fiscal year and are subject to a three-year service-based vesting requirement. Each year the Compensation Committee will determine the Company's achievement percentage for the Core FFO Goal for the applicable year and at the end of the three-year vesting period the Compensation Committee will average the achievement percentage for each of the three years. Threshold, target and maximum achievement levels for Core FFO will be set by the Compensation Committee for each year in the three-year performance period, and no Core FFO RSUs will be eligible to vest for any annual performance period if Core FFO performance is below the established threshold level. The resulting three-year average performance achievement will be used to determine the total number of Core FFO RSUs earned.

In the event the Company’s Core FFO Goal achievement is between two achievement levels, the percentage of Core FFO RSUs that is earned will be based on linear interpolation between the various achievement levels. The RSUs earned based on achievement of the Core FFO Goals will vest at the end of the three-year period, subject to the executive’s continued employment through the last day of the three year service-vesting period.

2024 Service-Vesting RSU Awards. The executives were also granted service-vesting RSU awards that vest in three equal installments on each of the first three anniversaries of the grant date, subject to the executive’s continued service through each applicable vesting date.

2020 Performance- and Service-Vesting RSU and DIP RSU Award Payout. The Performance and Service RSU awards and the DIP RSU awards granted in 2020 were subject to performance vesting based on three-year TSR goals based on our TSR relative to the SNL Index for the three-year performance period ending December 1, 2023. The Company’s total return was between the 25% and 50% percentile of the peers in the SNL Index. Under these awards, performance between the 5^th and 25^th percentile of the SNL Index resulted in a 40% payout and performance between the 25^th and 50^th percentile of the SNL Index resulted in a 70% - 100% payout,

with the resulting percentage determined by linear interpolation. Based on the relative performance of our TSR compared to the SNL Index for this three-year performance period, this resulted in a payout at 79%.

For a discussion of the accelerated vesting terms applicable to the long-term incentive awards granted to our executive officers, see “--Potential Payments Upon Termination or Change in Control” below.

Nonqualified Deferred Compensation. Named executive officers are currently permitted to make elections to defer up to 25% of their base salaries and 50% of their annual cash bonuses under the Company’s Deferred Compensation Plan. The Company believes that providing the named executive officers and other eligible employees with nonqualified deferred compensation opportunities is a cost-effective supplemental benefit that enables named executive officers to defer income tax on deferred salary and bonus payments, even though the Company also defers the related tax deduction. The Company makes no matching or other employer contributions to the plan. Additional information concerning this deferred compensation plan is set forth in the Nonqualified Deferred Compensation table and related text below.

Retirement Benefits. Named executive officers are eligible to participate in the Essex tax-qualified 401(k) plan. The Company does not maintain any defined benefit, pension, or supplemental or “excess” retirement plans for the named executive officers.

Severance and Other Benefits Upon Termination of Employment or Change of Control. Our named executive officers are eligible for severance benefits upon certain qualifying terminations, including in connection with a change in control, under the Essex Property Trust, Inc. Executive Severance Plan (the “Severance Plan”). We discuss the severance benefits for our named executive officers and the related quantitative disclosure based on assumed triggering events under the heading “Potential Payments upon Termination or Change of Control” on page 55.

The Compensation Committee believes that the Severance Plan and the terms of the equity-based awards described above provide a reasonable level of continued economic benefit to the named executive officers if a change of control and/or qualifying termination event were to occur, are a reasonable balance to the at-will nature (and lack of fixed terms) of employment for the executive officers, and provide a reasonable level of incentive for the covered individuals to remain with the Company prior to any proposal or contemplation of, and during any negotiations for, a change of control. Generally, the existence of the Severance Plan, and the potential benefits to executive officers under it, does not affect the annual determination of an executive officer’s base salary, cash bonus or long-term incentive award grants.

Life Insurance and Perquisites. Named executive officers receive automobile allowances or leased automobiles, automobile insurance, annual DMV renewals, health and dental insurance, and payment of life insurance premiums and are eligible to receive discounts on rental housing at Company properties and reimbursable education-related benefits on the same terms as other Company employees. The Compensation Committee believes that the perquisites are comparable to those provided by comparable companies. Commencing in 2024, the named executive officers are also eligible for medical concierge services.

Section 162(m). Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) generally disallows a tax deduction for annual compensation paid to specified executive officers in excess of $1 million.

We believe that we qualify as a REIT under the Code and generally are not subject to federal income taxes. As a result, we do not expect that the payment of compensation that is subject to the prohibition of Section 162(m) of the Code on deduction of annual compensation over $1 million will have a material adverse federal income tax consequence to us, provided we continue to distribute at least 90% of our taxable income each year. Consequently, the Compensation Committee reserves the right to design programs that incorporate a full range of both performance and service-based criteria important to the Company’s success, even where compensation payable under such programs may not be deductible.

ASC Topic 718. Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”) requires us to recognize an expense for the fair value of equity-based compensation awards. Grants of stock-based compensation are accounted for under ASC Topic 718. The Compensation Committee regularly consider the accounting implications of significant compensation decisions, especially in connection with decisions that relate to equity-based compensation awards. As accounting standards change, we may revise certain programs to appropriately align the cost of our equity-based compensation awards with our overall executive compensation philosophy and objectives.

Stock Ownership and Retention Guidelines. The Company has stock ownership guidelines that require executives to acquire and hold a certain amount of Company shares, as described in more detail above under the heading “Board and Corporate Governance Matters—Executive Officer Ownership Guidelines.” All named executive officers were in compliance with the guidelines as of December 31, 2023 or had additional time within which to come into compliance with such guidelines.

The table below sets forth the minimum amount of stock that each current executive officer is required to own pursuant to the Executive Stock Ownership guidelines. Executive officers are expected to achieve this goal within five years of its effective date or, with respect to new executive officers, within five years of attaining their position. The full text of the Stock Ownership Guidelines is posted on our website at http://www.essex.com under the heading “Investors” and subheading “Corporate Governance.”

At any time during which a named executive officer is not in compliance with the ownership guidelines, he or she will be required to retain at least 75% of any “net shares” received through our equity compensation plans, including shares or units underlying vested and full-value equity awards (LTIP Units and RSUs) and options, assuming net settlement.

Directors and executive officers are not permitted to own financial instruments or participate in investment strategies that represent a direct hedge of the economic risk of owning our Common Stock or voting preferred stock, equity interests issued by our operating partnership, or securities that give the holder any rights to acquire any such stock or equity interests (collectively, “Essex equity securities”).

Directors and executive officers are not permitted to pledge or otherwise use any Essex equity securities as collateral to secure any loan (collectively, a “pledge”) unless: (1) that transaction is first approved by the Board (not counting the vote of any director with a personal interest in the transaction) based on the committee’s determination that the pledge is not significant from a corporate governance standpoint, or (2) that transaction involves a pledge of Essex equity securities that results in such individual having pledged (counting pledged securities that are not Common Stock on an as exercised or converted basis, as the case may be) an amount of Essex equity securities not exceeding the greater of (x) 0.002 times the number of the issued and outstanding shares of Common Stock, or (y) 20% of such individual’s ownership of Essex equity securities.

As more fully set forth in the policy, directors and executive officers are not permitted to pledge any equity compensation awards prior to the awards’ respective exercise, delivery or conversion into equity securities free of restriction under the applicable equity compensation plan.

Compensation Recovery Policy. In accordance with Rule 10D-1 under the Exchange Act and the corresponding NYSE listing standards, we have adopted a policy that provides for the mandatory recovery from current and former executive officers of incentive-based compensation that was erroneously awarded during the three years preceding the date the Company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. The amount required to be recovered is the excess of the amount of incentive-based compensation received over the amount that otherwise would have been received had it been determined based on the restated financial measure. The policy was adopted effective as of October 2, 2023 and is administered and overseen by the Compensation Committee.

This report is not deemed to be soliciting material, filed with the SEC, or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that Essex specifically incorporates it by reference into a document filed with the SEC. The Compensation Committee reviewed and discussed the above Compensation Discussion and Analysis (“CD&A”) with the Company’s management. Based on the review and discussions, the Compensation Committee recommended to the Board that the CD&A be included in this proxy statement.

Amal M. Johnson, Chairperson

Mary Kasaris

Irving M. Lyons, III

The following table summarizes compensation information for our named executive officers for our year ended December 31, 2023, which we refer to as “2023”, our year ended December 31, 2022, which we refer to as “2022”, and our year ended December 31, 2021, which we refer to as “2021”.