Company: IIPR
Filing Date: 2025-04-29
Form Type: DEF 14A
Source: 0001104659-25-041241
Chunk: 39

Company: INNOVATIVE INDUSTRIAL PROPERTIES INC
Filing Date: 2025-04-29
Form: DEF 14A
Chunk 39
---
 was expected to reduce our rental revenues and increase our operating expenses for 2024 until the properties could be leased to new tenants. We made assumptions about the amount of time each of these properties would be vacant, while factoring in the possibility that unexpected events could impact AFFO per share, resulting in the committee setting the AFFO per diluted share target at $8.79. Our actual AFFO per diluted share for 2024 was $8.98, which resulted in a payout of 122% of target for this component of the annual cash incentive plan, or approximately 15% of the total target cash incentive after application of the 12.5% weighting, driven by faster than expected releasing of several of our vacant properties. A complete reconciliation containing adjustments from GAAP net income attributable to common stockholders to AFFO is included in Appendix A of the proxy statement. 2) New Investments (Weighted 12.5%) The committee established the following new investment goals for 2024:

| ​ | Threshold Achievement | ​ | ​ | $50 million  | ​ |
| ​ | Target Achievement    | ​ | ​ | $75 million  | ​ |
| ​ | Maximum Achievement   | ​ | ​ | $100 million | ​ |

26

TABLE OF CONTENTS

For purposes of these guidelines, “investments” includes (a) acquisitions (purchase prices, excluding transaction costs) with the dollar amounts determined at the time of closings; (b) lease amendments or other commitments to provide additional funding for construction at projects that results in an increase in contractual rent due; and (c) loan investments, with the dollar amount for those transactions in sections (b) and (c) determined at the time of commitment. We believe that expending capital for new investments is important to our business strategy because it typically increases our overall earnings per share and assists in growing and diversifying our portfolio of investments. Our new investments for 2024 were $73.2 million, which resulted in a payout of 96% of target for this component of the annual cash incentive plan, or approximately 12% of the total target cash incentive after application of the 12.5% weighting. 3) Line of Credit Capacity (Weighted 12.5%) The committee established the following line of credit capacity goal for December 31, 2024:

| ​ | Threshold Achievement | ​ | ​ | $30 million | ​ |
| ​ | Target Achievement    | ​ | ​ | $45 million | ​