Company: CIO
Filing Date: 2025-03-12
Form Type: DEF 14A
Source: 0001193125-25-052437
Chunk: 43

Company: City Office REIT, Inc.
Filing Date: 2025-03-12
Form: DEF 14A
Chunk 43
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 of management and to achieve strong performance for our company. Our NEOs and independent directors are subject to the Stock Ownership Policy and our NEOs are subject to an additional requirement to hold an amount of our common stock having an aggregate value of at least a certain multiple of the NEO’s annual base salary. For more information on the Stock Ownership Policy, see the discussion elsewhere in this Proxy Statement under the heading “—Stock Ownership Policy.”

REIT regulations require us to pay at least 90% of our REIT taxable income to stockholders as dividends. As a result, we believe that our common stockholders are interested in receiving attractive risk-adjusted dividends and the growth of our market capitalization. Accordingly, we want to provide incentives to our NEOs that reward success in achieving these goals. We believe that equity-based awards serve to align the interests of our NEOs with the interests of our stockholders since the value our NEOs receive from these awards is largely dependent on the value of our common stock, the potential for appreciation of that value and our capability to pay dividends. We believe that this alignment of interests provides an incentive to our NEOs to implement strategies that will enhance our overall performance.

Long-Term Equity Incentive Compensation Objectives

The issuance of restricted stock units and performance restricted stock units are an important motivational and retention tool that serves to drive performance and deter our NEOs from seeking other employment opportunities. We also believe that it creates a good long-term alignment between our NEOs and stockholders. We utilize both time-based restricted stock units that generally vest ratably on an annual basis over a three-year term, as well as performance restricted stock units that generally cliff vest after three years with payouts ranging from 50% to 150%, depending on relative total shareholder return versus the individual company constituents in a peer group set, subject to the Compensation Committee’s discretion and as described further below. If an NEO leaves the employment of the Company, unvested restricted stock units and unvested performance restricted stock units are immediately forfeited, except in limited circumstances. Dividends received on the restricted stock units are accrued at the same rate and on the same date as our common stock and remain subject to forfeiture, and dividends on the performance restricted stock units are only accrued at the end of the applicable term based on the actual award vesting amount.

The Compensation Committee designed the long-term incentive awards to ensure that our NEOs have a continuing stake in our long-term success, that the total compensation realized by our NEOs reflects our multi-year performance