DEF 14A
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

 

 

Filed by the Registrant  ☒                            Filed by a party other than the Registrant  ☐

Check the appropriate box:

 

Preliminary Proxy Statement

 

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

Definitive Proxy Statement

 

Definitive Additional Materials

 

Soliciting Material Pursuant to §240.14a-12

BOSTON PROPERTIES, INC.

(Name of Registrant as Specified in its Charter)

Not applicable.

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

Payment of Filing Fee (Check all boxes that apply):

  No fee required.
  Fee paid previously with preliminary materials.
  Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

 


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April 6, 2022

To My Fellow BXP Stockholders,

 

LOGO   

On behalf of the entire Board of Directors, I want to thank you for your continued support of Boston Properties, Inc. and invite you to attend our 2022 Annual Meeting of Stockholders on May 19, 2022, in Washington, DC. I am delighted to say that we intend to hold our annual meeting in person once again. This will be the first “in-person” annual meeting since 2019, and it will be the first time since becoming a public company in 1997 that we will hold the meeting in Washington, DC. We hope to see you there.

 

As I reflect on BXP’s performance over the past two years – years dominated by the COVID-19 pandemic – I am impressed and inspired by the Company’s leadership

and resilience. Like previous unforeseen events and downcycles, BXP’s strategy of operating in supply-constrained markets with high barriers-to-entry and signing long-term leases with financially strong tenants has proven durable yet again. In particular, 2021 was a year of economic volatility, including continued uncertainty regarding the duration and severity of COVID-19 and its variants, inflationary pressures and global supply chain disruptions that impacted most industries and many of our tenants. BXP’s executive team, led by Owen Thomas and Doug Linde, with the strategic oversight of a diverse and experienced Board, navigated these challenges, and we ended the year with positive momentum. We reported growth in diluted FFO per share of more than 4%(1) for 2021, our leasing volume rebounded to our historical quarterly average, we continued to execute on our sizeable development pipeline, and we established our Strategic Capital Program and used it to expand our footprint into Seattle, WA and the Midtown South submarket in New York City. The financial markets rewarded these successes as BXP’s total return to stockholders for 2021 was 26.2%.

BXP is stronger in many other ways because of the proper foundation that we laid for sustainable future growth. A critical element of that foundation is strong corporate governance, which begins with an independent Board of Directors with diverse backgrounds, skills and experiences and clearly defined committee roles and responsibilities. Properly constructed, the Board then actively engages with Company leadership and oversees strategy, risk and overall performance. As a Board, we remain committed to fulfilling these responsibilities and are keenly focused on BXP’s progress on environmental, social and governance (ESG) matters, including our strong commitments to diversity and sustainability.

With respect to sustainability, in particular, we reinforced our long-term focus on ESG issues by:

 

   

establishing a Sustainability Committee of the Board to enhance oversight of sustainability issues,

 

   

announcing our commitment to achieve carbon-neutral operations by 2025, including direct and indirect Scope 1 and Scope 2 emissions from our actively managed office portfolio, and

 

   

issuing a total of $1.7 billion of debt securities in our third and fourth green-bond offerings and committing to allocate the net proceeds to eligible “green” projects that support our sustainability goals.

 

 

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Numerous industry groups have recognized BXP’s commitment to sustainable development and operations.

 

   

BXP earned a tenth consecutive “Green Star” recognition in the 2021 GRESB® assessment and a GRESB 5-star rating.

 

   

BXP was named to Newsweek’s America’s Most Responsible Companies, ranking #1 in the real estate industry and #31 overall out of 500 companies in 2021.

 

   

BXP was named to the Dow Jones Sustainability Index (DJSI) North America. BXP was one of nine real estate companies that qualified and the only office REIT in the index, scoring in the 93rd percentile of the real estate companies assessed for inclusion.

 

   

BXP was also named to the inaugural Forbes Green Growth 50 list, ranking #4 among the top 50 companies reducing greenhouse gas emissions while growing profits.

The Board is proud of this recognition and is committed to maintaining BXP’s leadership role among participants in the real estate industry.

We also remain committed to the initiatives articulated by our Diversity & Inclusion Committee, including improvement in the recruiting, retention and advancement of ethnically diverse employees. More than half of all BXP employees promoted in early 2022 were women and more than 20% were non-white. The Board believes it is critical to set the tone at the top and lead by example in this area, so I’m delighted to add that, in December 2021, we appointed Mary E. Kipp to our Board. Mary lives and works in Seattle, Washington, a new market we entered for the first time in 2021. She is highly accomplished and has executive-level, public company experience as the current President and CEO of Puget Sound Energy, Inc., the largest electric and natural gas utility in the State of Washington. Prior to joining PSE, Mary served as CEO of El Paso Electric Company and as Deputy Chair of the Federal Reserve Bank of Dallas. Mary is a uniquely qualified leader who shares our commitment to clean energy. Under her leadership, PSE is in the process of transitioning to supply 100% clean energy. We are fortunate that she joined our Board and that she now serves on our Audit and Sustainability Committees.

The accompanying proxy statement contains a great deal of other important information about Boston Properties and its corporate governance and executive compensation. We hope you will take the time to read it and vote at the annual meeting. On behalf of BXP’s Board of Directors and management team, thank you for choosing to invest in BXP. Your trust, support and engagement are essential to us as we work to create long-term, sustainable value for all of you.

Sincerely,

 

 

LOGO

Joel I. Klein

Chairman of the Board

 

 

(1)

For disclosures required by Regulation G, refer to Appendix A to this proxy statement.

 

 

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NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

 

 

Location:

 

Metropolitan Square

655 15th Street, NW, 2nd Floor

Washington, DC 20005

 

Date:

 

Thursday, May 19, 2022

 

Time:

 

9:00 a.m., Eastern Time

 

   

 

Items of Business:

 

1. To elect the eleven (11) nominees for director named in the proxy statement, each to serve for a one-year term and until their respective successors are duly elected and qualified.

 

2. To hold a non-binding, advisory vote on named executive officer compensation.

 

3.  To approve the Boston Properties, Inc. Non-Employee Director Compensation Plan.

 

4.  To ratify the Audit Committee’s appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022.

 

5.  To consider and act upon any other matters that are properly brought by or at the direction of the Board of Directors before the annual meeting and at any adjournments or postponements thereof.

      

Record Date:

 

March 23, 2022. Only holders of record of BXP common stock at the close of business on the record date are entitled to receive notice of, and to vote at, the annual meeting.

      

We intend to follow applicable local health protocols relating to the COVID-19 pandemic as such protocols exist on the meeting date (e.g., mask wearing and social distancing). You should not attend the meeting if you feel sick, have been recently exposed to COVID-19 or are awaiting COVID-19 test results.

Proxy Voting

Whether or not you plan to attend the meeting and vote your shares of common stock in person, we urge you to vote your shares as instructed in the proxy statement. If you received a copy of the proxy card by mail, you may sign, date and mail the proxy card in the postage-paid envelope provided.

If your shares of common stock are held by a broker, bank or other nominee, please follow the instructions you receive from your broker, bank or other nominee to have your shares of common stock voted.

Any proxy may be revoked at any time prior to its exercise at the annual meeting.

By Order of the Board of Directors,

 

 

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FRANK D. BURT, ESQ.

Secretary

April 6, 2022

Important Notice Regarding the Availability of Proxy Materials for the Stockholders Meeting to be Held on May 19, 2022. The proxy statement and our 2021 annual report to stockholders are available at www.proxyvote.com.

 

 

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TABLE OF CONTENTS

 

 

     Proxy Summary           1  
  1            Proposal 1: Election of Directors           9  
    

Vote Required and Majority Voting Standard

          9  
     Nominees for Election         12  
     Director Independence         23  
     Consideration of Director Nominees         25  
  2            Corporate Governance         27  
     Board Leadership Structure         27  
     Board and Committee Meetings         29  
     Board Refreshment and Evaluations         30  
     Board Committees         32  
     Board’s Role in Risk Oversight         37  
     Other Governance Matters         39  
  3            Human Capital and Sustainability         41  
     Human Capital         41  
     Sustainability         43  
  4            Executive Officers         46  
  5            Principal and Management Stockholders         50  
  6            Compensation of Directors         54  
     Components of Director Compensation         54  
     Deferred Compensation Program         55  
     Director Stock Ownership Guidelines         56  
     Director Compensation Table         56  
  7            Compensation Discussion and Analysis         58  
    

Overview

        58  
     Executive Compensation Program & 2021 Results         64  
     Determining Executive Compensation         85  
     Other Compensation Policies         87  
                   Compensation Committee Report         92  
  8            Compensation of Executive Officers         93  
     Summary Compensation Table         93  
     Grants of Plan-Based Awards in 2021         95  
     Outstanding Equity Awards at 2021 Fiscal Year-End         96  
     2021 Option Exercises and Stock Vested         98  
     Nonqualified Deferred Compensation in 2021         98  
     Employment Agreements       100  
     Potential Payments Upon Termination or Change in Control       102  
     Pay Ratio Disclosure       109  
  9            Proposal 2: Advisory Vote on Named Executive Officer Compensation       111  
     Vote Required       111  
  10        Proposal 3: Approval of the Boston Properties, Inc. Non-Employee Director Compensation Plan     112
     Proposal     112
     Background     112
     Summary of the Director Compensation Plan     113
     New Plan Benefits     115
     Vote Required     115
     Equity Compensation Plan Information     116
  11        Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm     117
     Fees to Independent Registered Public Accounting Firm     118
     Audit and Non-Audit Services Pre-Approval Policy     118
     Vote Required     118
     Audit Committee Report     119
  12        Other Matters     120
     Certain Relationships and Related Person Transactions     120
     Stockholder Nominations for Director and Proposals for the 2023 Annual Meeting of Stockholders     121
  13        Information About the Annual Meeting     123
     Notice of Internet Availability of Proxy Materials     123
     Purpose of the Annual Meeting     123
     Presentation of Other Matters at the Annual Meeting     123
     Stockholders Entitled to Vote     123
     Attending the Annual Meeting     123
     Quorum for the Annual Meeting     124
     How to Vote     124
     Revoking Proxy Instructions     125
     Accessing Proxy Materials Electronically     126
     Householding     126
               Expenses of Solicitation     126
  A        Appendix A     A-1
    

Disclosures Relating to Non-GAAP Financial Measures

    A-1
  B        Appendix B     B-1
     Boston Properties, Inc. Non-Employee Director Compensation Plan     B-1
 

 

 

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   PROXY SUMMARY

 

PROXY SUMMARY

This summary highlights information contained elsewhere in the proxy statement. This summary does not contain all of the information that you should consider, and you should read the entire proxy statement carefully before voting. References to “we,” “us,” “our,” “BXP” and the “Company” in this proxy statement refer to Boston Properties, Inc. and references to “BPLP” and the “Operating Partnership” in this proxy statement refer to Boston Properties Limited Partnership, our operating partnership.

2022 ANNUAL MEETING INFORMATION

 

LOGO

 

Date and Time

  

LOGO

 

Location

  

LOGO

 

Record Date

Thursday, May 19, 2022

9:00 a.m., Eastern Time

  

Metropolitan Square

655 15th Street, NW, 2nd Floor

Washington, DC 20005

   March 23, 2022

VOTING MATTERS AND RECOMMENDATIONS

 

          Board voting
recommendation
     Where to find
more information

Proposal 1

  Election of Eleven (11) Directors   LOGO   FOR each nominee      Page 9

Proposal 2

  Non-binding, Advisory Vote on Named Executive Officer Compensation   LOGO  

 

FOR

     Page 111

Proposal 3

 

Approval of the Boston Properties, Inc.

Non-Employee Director Compensation Plan

  LOGO  

 

FOR

     Page 112

Proposal 4

  Ratification of Appointment of Independent Registered Public Accounting Firm  

 

LOGO

 

 

 

FOR

    

 

Page 117

 

 

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   PROXY SUMMARY

 

BOARD AND GOVERNANCE HIGHLIGHTS

DIRECTOR SUCCESSION

On December 20, 2021, our Board appointed Mary E. Kipp to fill the vacancy on the Board resulting from the resignation of Karen E. Dykstra. Since 2016, our Board (1) nominated, and our stockholders elected, five new directors, and (2) appointed one director to fill a vacancy on the Board. Of these six additions to our Board over the past six years, four are women.

APPOINTMENT OF CHAIRMAN AND LEAD INDEPENDENT DIRECTOR

Currently, Joel I. Klein serves as Chairman of the Board and Owen D. Thomas serves as our Chief Executive Officer. Our Board of Directors has determined that it is in the best interests of BXP and our stockholders to appoint Mr. Thomas as Chairman and CEO, effective immediately following the 2022 annual meeting. Our Board believes that having Mr. Thomas serve as Chairman and CEO promotes clear accountability and leadership with one person setting the tone for our employees, investors, tenants, vendors and other stakeholders and having primary responsibility for executing our strategy. The combined role also maintains transparency between management and the Board by serving as an effective bridge for communication between the Board and management on significant business developments and time-sensitive matters, and it provides unified leadership for carrying out our strategic initiatives and business plans. To ensure that an appropriate level of oversight continues between our independent directors and the CEO, the independent directors have selected Kelly A. Ayotte to serve as Lead Independent Director, effective immediately following the 2022 annual meeting. If re-elected at the 2022 annual meeting, Mr. Klein, who has served as independent, non-executive Chairman of the Board since May 2019 (and as Lead Independent Director from May 2016 to May 2019), will continue serving as a director of the Company. See “Corporate Governance — Board Leadership Structure” beginning on page 27 of this proxy statement.

NON-EMPLOYEE DIRECTOR COMPENSATION

At our 2019 annual meeting, our stockholders approved the Boston Properties, Inc. Non-Employee Director Compensation Plan (the “Director Compensation Plan”), which sets forth the cash and equity compensation that is paid to our non-employee directors in a specific, formulaic manner. Although we were not legally required to obtain stockholder approval for the Director Compensation Plan, our stockholders approved the plan at our 2019 annual meeting.

The Director Compensation Plan remained the same for calendar years 2019, 2020 and 2021. In late 2021, the Compensation Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”), an independent compensation consultant, to conduct a comprehensive review and assessment of the Director Compensation Plan and to help ensure that our non-employee director compensation program remains competitive and that its structure is generally consistent with “best” practices. As a result of this review, the Compensation Committee recommended, and our Board of Directors approved, (1) an increase of $25,000 to the annual cash retainer payable to the Chairman of the Board, if one is selected, from $100,000 to $125,000, (2) the establishment of an annual cash retainer payable to the Lead Independent Director, if one is selected, in the amount of $50,000 and (3) an increase of $15,000 in the value of the annual equity retainer that each non-employee director is entitled to receive, from $150,000 to $165,000. FW Cook did not recommend, and the Board did not make, any other changes to the Director Compensation Plan.

Because of the interests that our non-employee directors have in the establishment of the compensation they receive, our Board again determined to submit the new plan for stockholder approval at the 2022 annual meeting. If approved by our stockholders, the changes will be retroactive to January 1, 2022. See “Proposal 3: Approval of the Boston Properties, Inc. Non-Employee Director Compensation Plan” beginning on page 112 of this proxy statement for more detail.

 

 

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BOARD NOMINEES

Following the recommendation of the Nominating and Corporate Governance (“NCG”) Committee, our Board of Directors has nominated the following eleven (11) candidates for election as directors at the 2022 annual meeting of stockholders.

 

    

   Name

  Principal Occupation   Age(1)   Director
Since
  Independent   Current Committee
Memberships
LOGO  

Joel I. Klein(2)

Chairman of the Board

 

Chief Executive Officer of

Retromer Therapeutics Corp.

  75   2013   LOGO  

 ex officio(3)

LOGO  

Kelly A. Ayotte(2)

 

Former United States Senator

for the State of New

Hampshire

  53   2018   LOGO  

 Compensation - Chair

 NCG

LOGO  

Bruce W. Duncan(4)

 

Former President and Chief

Executive Officer of CyrusOne

Inc.

  70   2016   LOGO  

 Audit

 NCG

LOGO  

Carol B. Einiger

 

President of Post Rock

Advisors, LLC

  72   2004   LOGO  

 Compensation

 NCG

LOGO  

Diane J. Hoskins

 

Co-Chair and Co-Chief

Executive Officer of M. Arthur

Gensler Jr. & Associates, Inc.

  64   2019   LOGO  

 NCG

 Sustainability - Chair

LOGO  

Mary E. Kipp(4)

 

President & Chief Executive

Officer of Puget Sound Energy, Inc.

  54   2021   LOGO  

 Audit

 Sustainability

LOGO  

Douglas T. Linde

 

President of Boston

Properties, Inc.

  58   2010   LOGO  

 Sustainability

LOGO  

Matthew J. Lustig

 

Chairman of North America

Investment Banking and Head

of Real Estate & Lodging at

Lazard Frères & Co.

  61   2011   LOGO  

 NCG - Chair

 Sustainability

LOGO  

Owen D. Thomas(2)

 

Chief Executive Officer of

Boston Properties, Inc.

  60   2013   LOGO  

 Sustainability

LOGO  

David A. Twardock(4)

 

Former President of

Prudential Mortgage Capital

Company, LLC

  65   2003   LOGO  

 Audit - Chair

 Compensation

LOGO  

William H. Walton, III

 

Co-Founder and Managing

Member of Rockpoint Group,

LLC

  70   2019   LOGO  

 Compensation

 

(1)

Ages are as of May 19, 2022, the date of the 2022 annual meeting.

 

(2)

Assuming their re-election to our Board of Directors, immediately following the 2022 annual meeting Mr. Thomas will become our Chairman of the Board, Ms. Ayotte will become our Lead Independent Director and Mr. Klein will continue to serve as a director.

 

(3)

As independent Chairman, Mr. Klein serves ex officio as a member of each of the Board’s committees.

 

(4)

Our Board of Directors determined that each of Ms. Kipp and Messrs. Duncan and Twardock qualifies as an “audit committee financial expert” as that term is defined in the rules of the Securities and Exchange Commission (the “SEC”).

 

 

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   PROXY SUMMARY

 

SNAPSHOT OF 2022 BOARD NOMINEES

Presented below is a snapshot of the expected composition of our Board of Directors immediately following the 2022 annual meeting, assuming the election of the eleven (11) nominees named in proxy statement. Our Board of Directors believes that, collectively, the nominees exhibit an effective mix of qualifications, experience, diversity and tenure. For comparison purposes, we have also presented comparable metrics for the constituents of the S&P 500 Index, of which BXP is a member. Data for the S&P 500 Index is based on the Spencer Stuart Board Index 2021.

 

 

LOGO

The following summarizes the qualifications and experience of the eleven (11) nominees for election as directors. For additional information, see “Proposal 1: Election of Directors – Nominees for Election” beginning on page 12 of this proxy statement.

 

LOGO

 

 

 

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   PROXY SUMMARY

 

ENVIRONMENTAL, SOCIAL & GOVERNANCE

Environmental, social and governance (“ESG”) considerations continue to evolve and influence how we conduct our business. Our core business is the long-term ownership of commercial real estate; therefore, sustainable development and responsible growth are fundamental to our investment philosophy. As stakeholder interest in issues like healthy buildings, climate resilience, diversity and inclusion, health and wellness, social equity and community involvement continues to grow, it reinforces just how intertwined our work is with many important aspects of people’s lives. It also means BXP has a unique opportunity to provide leadership in crafting solutions, and we intend to continue making efforts to improve ESG performance and conduct our business in a manner that contributes to positive economic, social and environmental outcomes for our customers, stockholders, employees and the communities in which we operate. For additional information, see “Human Capital and Sustainability” beginning on page 41.

 

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ENVIRONMENTAL

 

 

 

Sustainability Highlights

 

 

  Corporate member of the U.S. Green Building Council®

 

  Fitwel Champion through a partnership with Fitwel, a leading healthy building certification system, to support healthy building design and operational practices across our portfolio

 

  In 2017, shortly after the U.S. announced its withdrawal from the Paris Agreement, we proudly signed the We Are Still In declaration

 

  Between 2018-2021, BPLP issued an aggregate of $3.55 billion of green bonds in four separate offerings; use of net proceeds is restricted to “eligible green projects”

 

 

 

 

  The Science Based Targets initiative (SBTi) Target Validation Team classified BXP’s emissions reduction target as in line with a 1.5°C trajectory, currently the most ambitious designation available; BXP is one of 13 North American real estate companies with this distinction and the only office company in that group

 

  28.3 million square feet LEED certified, of which 98% is certified at the highest Gold and Platinum levels

 

  We publish an annual ESG report, which is available on our website at http://www.bxp.com under the heading “Commitment,” but is not incorporated by reference into this proxy statement or any other document we file with the SEC

 

 

2021 Awards and Recognitions

 

 

 

  Ranked among the top real estate companies in the GRESB assessment, earning a sixth consecutive 5-Star rating and a tenth consecutive “Green Star” designation

 

  Named to the inaugural Forbes Green Growth 50 list, ranking #4 among the top 50 companies reducing greenhouse gas emissions while growing profits

 

  Recognized by the U.S. Environmental Protection Agency as a 2021 ENERGY STAR Partner of the Year - Sustained Excellence

 

 

  Named one of America’s Most Responsible Companies by Newsweek magazine, ranking #1 in the real estate industry and #31 overall out of 500 companies

 

  Maintained Green Lease Leader distinction at the highest Gold level by the Institute for Market Transformation and the U.S. Department of Energy

 

 

 

 

 

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   PROXY SUMMARY

 

SOCIAL

 

 
Diversity & Inclusion Achievements in 2021

In 2021, we advanced the mission of the BXP Diversity & Inclusion (“D&I”) Committee to promote diversity, inclusion, equality and transparency as part of our culture, business activities and decision-making practices. Notable actions and achievements in 2021 included the following:

 

  Launched the formation of three Employee Resource Groups for Women, Ethnic Minorities, and LGBTQA+

 

  Made strategic hires in Human Resources dedicated to promoting D&I

 

  Revised our internal processes for our Property Management and Construction Departments to track and promote the inclusion of underrepresented business enterprises, including vendors, suppliers and subcontractors, as business partners

 

  Proactively procured a minority- and woman-owned bank to act as co-manager in two of our unsecured senior notes offerings in 2021

 

  Commenced a depository relationship with a Black-led bank

 

   

  Advanced diversity in the BXP workforce:

 

New Hires:(1)

 

 43% ethnically diverse

 

 53% women

 

Total Workforce:(1)(2)

 

 4% increase in ethnically diverse employees

 

 1% increase in women employees

 

Officer Level:(2)

 

 5% increase in ethnically diverse officers

 

 6% increase in women officers

The following is a snapshot of the diversity of our workforce as of December 31, 2021:

 

 

Total Workforce(1)(3)

 

   

 

Managers & Above(3)

 

 

 

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Employee Engagement & Development(4)

 

  We invest significant resources in our employees’ personal growth by providing a range of development opportunities including training, tuition reimbursement and seminars and conferences

 

  The success of our efforts is demonstrated by the satisfaction and long tenure of our employees:

 

  average tenure is 10.0 years for employees and 18.8 years for our executive leadership

 

  38% of our employees have worked at BXP for more than 10 years

 

     

 

Tenure of All Employees

 

LOGO

 

 

(1)

Excludes union employees for which the union controls the hiring decisions.

 
(2)

Represents year-over-year change compared to 2020.

 
(3)

We determine race and gender based on our employees’ self-identification. Ethnic minorities are defined as those included in the EEO Ethnicity and Race Categories: Asian, Black/African American, Hispanic/Latino, American Indian/Alaskan Native, Native Hawaiian or other Pacific Islander, or multiracial background.

 
(4)

Data as of December 31, 2021.

 

 

 

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   PROXY SUMMARY

 

GOVERNANCE

 

Board Leadership, Composition & Independence

 

   

Stockholder Rights

 

 

  Joel I. Klein currently serves as our independent, non-executive Chairman of the Board

 

  Conditioned on their elections as directors, Mr. Thomas will serve as Chairman and CEO and Ms. Ayotte will serve as Lead Independent Director, effective immediately following the 2022 annual meeting

 

   

 

  Incorporated in Delaware

 

 Maryland Unsolicited Takeovers Act does not apply to us

 

  Proxy Access By-law right

 

  Annual election of all directors

 

  Majority voting standard in uncontested director elections

 

  Stockholder right to amend By-laws

 

  No Stockholder Rights Plan (or “poison pill”)

 

  Disclosure of Policy on Company Political Spending

  Eleven (11) directors

 

  82% independent

 

  Four directors are women and one director is African American

 

  Two Board committees are chaired by women

 

  Four of the last six (67%) new directors since 2016 are women

 

 

Director Qualifications and Policies

 

   

Compensation

 

 

  Regular executive sessions of independent directors

 

  All directors, officers and employees are subject to a Code of Business Conduct and Ethics

 

  Each director attended more than 75% of the meetings of the Board and committees on which he or she served in 2021; in the aggregate, our directors attended more than 98% of the total number of meetings held in 2021

 

  Annual self-evaluations for the Board and each committee, and bi-annual interviews of individual directors by our Chairman (if independent) or Lead Independent Director, as applicable; process overseen by our NCG Committee

 

   

 

  90% of votes cast FOR our “Say-on-Pay” proposal at the 2021 annual meeting

 

  Stock ownership requirements for executives (for CEO, 6x base salary)

 

  Double-trigger vesting for time-based equity awards

 

  Compensation clawback policy

 

  Policy against tax gross-up provisions

 

  Non-employee directors are compensated under a stockholder-approved plan

 

  Stock ownership requirements for directors (5x annual retainer)

 

  Anti-hedging, anti-pledging and anti-short-sale policies

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

LOGO

PROXY STATEMENT

This proxy statement is being made available to stockholders of Boston Properties, Inc. (“we,” “us,” “our,” “BXP” or the “Company”) on or about April 6, 2022 via the Internet or by delivering printed copies by mail, and is furnished in connection with the solicitation of proxies by the Board of Directors of Boston Properties, Inc. (our “Board” or our “Board of Directors”) for use at our 2022 annual meeting of stockholders to be held on Thursday, May 19, 2022 at 9:00 a.m., Eastern Time, at Metropolitan Square, 655 15th Street, NW, 2nd Floor, Washington, DC 20005, and any adjournments or postponements thereof.

We intend to follow applicable local health protocols relating to the COVID-19 pandemic as such protocols exist on the meeting date (e.g., mask wearing and social distancing). You should not attend the meeting if you feel sick, have been recently exposed to COVID-19 or are awaiting COVID-19 test results.

PROPOSAL 1:

ELECTION OF DIRECTORS

BXP is currently governed by an eleven-member Board of Directors. The current members of our Board of Directors are:

 

Kelly A. Ayotte

 

Mary E. Kipp

 

Owen D. Thomas

  

Bruce W. Duncan

 

Joel I. Klein

 

David A. Twardock

  

Carol B. Einiger

 

Douglas T. Linde

 

William H. Walton, III

  

Diane J. Hoskins

 

Matthew J. Lustig

At the 2022 annual meeting of stockholders, directors will be elected to hold office for a one-year term expiring at the 2023 annual meeting of stockholders. Directors hold office until their successors are duly elected and qualified, or until their earlier resignation or removal. Any director appointed to our Board of Directors to fill a vacancy will hold office for a term expiring at the next annual meeting of stockholders following such appointment.

Following the recommendation of the NCG Committee, our Board of Directors nominated all incumbent directors for re-election. In making its recommendations, the NCG Committee considered a number of factors, including its criteria for Board membership, which include the minimum qualifications that must be possessed by a director candidate in order to be nominated for a position on our Board. Our Board of Directors anticipates that, if elected, the nominees will serve as directors. However, if any person nominated by our Board of Directors is unable to serve or for good cause will not serve, the proxies will be voted for the election of such other person as our Board of Directors may recommend.

VOTE REQUIRED AND MAJORITY VOTING STANDARD

Our By-laws provide for a majority voting standard. This means that, in an uncontested election, nominees for director are elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. The majority voting standard would not apply in contested elections, which, generally, will include any situation in which BXP receives a notice that a stockholder has nominated a person for election to our Board of Directors at a meeting of stockholders that is not withdrawn on or before the tenth day before we first mail the notice for such meeting to the stockholders.

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

The majority voting standard will apply to the election of directors at the 2022 annual meeting of stockholders. Accordingly, nominees for director will be elected if the votes cast for such nominee’s election exceed the votes cast against such nominee’s election. Broker non-votes, if any, and abstentions will not be treated as votes cast.

Our Corporate Governance Guidelines contain a related resignation policy, under which a director who fails to receive the required number of votes for re-election will tender his or her resignation to our Board of Directors for its consideration. The NCG Committee will then act on an expedited basis to determine whether it is advisable to accept the director’s resignation and will submit its recommendation for prompt consideration by our Board of Directors. Our Board of Directors will act on the tendered resignation within 90 days following certification of the stockholder vote and will promptly and publicly disclose its decision. Any director whose resignation is under consideration will abstain from participating in any decision regarding his or her resignation. If the resignation is not accepted, the director will continue to serve until the next annual meeting of stockholders and until the director’s successor is duly elected and qualified or until the director’s earlier resignation or removal. The NCG Committee and our Board of Directors may consider any factors they deem relevant in deciding whether to accept a director’s resignation.

 

LOGO  

Recommendation of the Board

 

 

The Board of Directors unanimously recommends a vote “FOR” each of its nominees: Kelly A. Ayotte,
Bruce W. Duncan, Carol B. Einiger, Diane J. Hoskins, Mary E. Kipp, Joel I. Klein, Douglas T. Linde,
Matthew J. Lustig, Owen D. Thomas, David A. Twardock and William H. Walton, III. Properly
authorized proxies solicited by the Board of Directors will be voted “FOR” each of the nominees
unless instructions to the contrary are given.

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

  SUMMARY OF BOARD NOMINEE QUALIFICATIONS AND EXPERIENCE

In addition to the minimum qualifications that our Board of Directors believes are necessary for all directors, the following chart highlights some of the key qualifications and experience that our Board believes are relevant to the effective oversight of BXP and the execution of our long-term strategy. A mark for an attribute indicates that the nominee gained the attribute through a current or prior position other than his or her service on the BXP Board of Directors. Our Board did not assign specific weights to any of these attributes or otherwise formally rate the level of a nominee’s attribute relative to the rating for any other potential nominee or any other person. The absence of a mark for an attribute does not necessarily mean that the nominee does not possess that attribute; it means only that when the Board considered that nominee in the overall context of the composition of our Board of Directors, that attribute was not a key factor in the determination to nominate that individual. Further information on each nominee’s qualifications and relevant experience is provided in the individual biographical descriptions below.

 

 

LOGO

 

(1)

As of May 19, 2022, the date of the 2022 annual meeting.

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

NOMINEES FOR ELECTION

The following biographical descriptions set forth certain information with respect to the nominees for election as directors at the 2022 annual meeting, based on information furnished to us by each nominee, as well as the specific experience, qualifications, attributes and skills that led to the conclusion by our Board of Directors that such person should serve as a director of BXP.

 

JOEL I. KLEIN

 

Chief Executive Officer of Retromer Therapeutics Corp.

  

Qualifications:

 

Mr. Klein has worked for more than 40 years in private industry and government during which time he has gained significant experience in senior policy making and executive roles, as well as a broad range of legal and financial matters.

 

Professional Background:

 

  Chief Executive Officer of Retromer Therapeutics Corp., a biotech start-up, since December 2020

 

  Senior Advisor to CEO, Oscar Health Corporation, a health insurance company (“Oscar”), since January 2022; Chief Policy and Strategy Officer at Oscar from January 2016 to January 2022

 

  Director of Juul Labs since March 2021

 

  Director of News Corporation from January 2011 to November 2020

 

  Executive Vice President, Office of the Chairman of News Corporation from June 2003 to December 2015 and Chief Executive Officer of Amplify, the education division of News Corporation, from January 2011 to December 2015

 

  Chancellor of the New York City Department of Education from 2002 through 2010, where Mr. Klein oversaw a system of over 1,600 schools with 1.1 million students, 136,000 employees and a $22 billion budget

   

  U.S. Chairman and Chief Executive Officer of Bertelsmann, Inc. and Chief U.S. Liaison Officer to Bertelsmann AG, a media company, from 2001 to 2002

 

  Various roles with the Clinton administration, including Assistant U.S. Attorney General in charge of the Antitrust Division of the U.S. Department of Justice from 1997 to 2000 and Deputy White House Counsel to President Clinton from 1993 to 1995. Mr. Klein entered the Clinton administration after 20 years of public and private legal work in Washington, DC

 

Other Leadership Experience, Community

Involvement and Education:

 

  Chair of the Board of StudentsFirstNY

 

  Member of the Board of The Foundation for Excellence in Education (ExcelinEd)

 

  Member of the Advisory Boards of the Zuckerman Mind Brain Behavior Institute and Columbia College

 

  Received a BA, magna cum laude, from Columbia University and a JD, magna cum laude, from Harvard Law School

 

  Received honorary degrees from ten colleges and universities

LOGO

 

Director since:

January 2013

 

Age: 75

 

Independent

 

Chairman of the Board

 

Current Board Committees:

  ex officio member of all committees

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): News Corporation

 

 

 

 

 

 

 

 

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

SENATOR

KELLY A. AYOTTE

 

Former United States Senator for the State of New Hampshire

 

  

Qualifications:

 

Former Senator Ayotte provides significant leadership experience and expertise in the areas of public policy, government and the law.

 

Professional Business Experience:

 

  Represented New Hampshire in the United States Senate from 2011 to 2016; chaired the Armed Services Subcommittee on Readiness and the Commerce Subcommittee on Aviation Operations; and served on the Budget, Homeland Security and Governmental Affairs, Small Business and Entrepreneurship, and Aging Committees

 

  New Hampshire’s first female Attorney General from 2004 to 2009 appointed by Republican Governor Craig Benson and reappointed twice by Democratic Governor John Lynch

 

  Various positions with the State of New Hampshire from 1998 to 2004, including, Deputy Attorney General, Chief of the Homicide Prosecution Unit and Legal Counsel to Governor Craig Benson

 

  Former associate at the McLane Middleton law firm and law clerk to the New Hampshire Supreme Court

 

  Director of The Blackstone Group, Inc. since May 2019, Caterpillar Inc. since August 2017 and News Corporation since April 2017

 

  Director of Blink Health LLC and BAE Systems, Inc., each a private company board

 

   

  Former director of Bloom Energy Corporation from 2017 to 2019

 

  Member of advisory boards of Microsoft Corporation, Chubb Insurance and Cirtronics Corporation

 

Other Leadership Experience, Community Involvement and Education:

 

  Senior Advisor for Citizens for Responsible Energy Solutions

 

  Member of the non-profit boards of the One Campaign, the International Republican Institute, the McCain Institute, Swim with a Mission, Winning for Women and Veterans Count of New Hampshire

 

  Member of the Board of Advisors for the Center on Military and Political Power at the Foundation for Defense of Democracies

 

  Graduated with honors from the Pennsylvania State University and received a JD from the Villanova University School of Law

 

LOGO

 

Director since: May 2018

 

Age: 53

 

Independent

 

Current Board Committees:

  Compensation (Chair)

  NCG

 

Other Public Company Boards:

  Current: The Blackstone Group, Inc., Caterpillar Inc. and News Corporation

  Former (past 5 years): Bloom Energy Corporation

 

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

BRUCE W.

DUNCAN

 

Former President and Chief Executive Officer of CyrusOne Inc.

  

Qualifications:

 

Mr. Duncan provides more than 30 years of diverse real estate management and investment experience, including as a chief executive officer and a director of other publicly traded companies.

 

Professional Business Experience:

 

  Former President, Chief Executive Officer and director of CyrusOne Inc., a real estate investment trust (“REIT”) that develops, owns, operates and invests in data centers, from July 2020 to July 2021

 

  Various positions at First Industrial Realty Trust, Inc., an industrial REIT, including Chairman of the Board from January 2016 and director from January 2009 until retiring from both positions in July 2020; President and Chief Executive Officer from January 2009 until he stepped down as President in September 2016 and retired as Chief Executive Officer in November 2016

 

  Former Chairman of the Board of Directors of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), a leading worldwide hotel and leisure company, from May 2005 until its acquisition by Marriott International, Inc. in September 2016; director of Starwood from 1999 to September 2016; interim Chief Executive Officer of Starwood from April 2007 to September 2007

 

  Trustee of Starwood Hotels & Resorts, a REIT and former subsidiary of Starwood, from 1995 to 2006

 

  Director of the mutual funds sponsored and managed by T. Rowe Price Associates, Inc. since September 2013

 

  Senior Advisor to Kohlberg Kravis Roberts & Co. (“KKR”), a global investment firm, since 2018; previously senior advisor to KKR from July 2008 to January 2009

   

  Director of Marriott International, Inc., the world’s largest hotel company, from September 2016 to July 2020

 

  Various positions at Equity Residential, one of the largest publicly traded apartment REITs in the United States, from March 2002 to December 2005, including:

 

  Chief Executive Officer and Trustee from May 2005 to December 2005,

 

  President, Chief Executive Officer and Trustee from January 2003 to May 2005, and

 

  President and Trustee from March 2002 to December 2002

 

  Chairman, President and Chief Executive Officer of Cadillac Fairview Corporation, one of North America’s largest owners and developers of retail and office properties, from December 1995 to March 2000

 

Other Leadership Experience, Community

Involvement and Education:

 

  Life Trustee of Rush University Medical Center in Chicago

 

  Former member of the Executive Committee of the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”)

 

  Former member of the Executive Committees of the Board of the Canadian Institute for Public Real Estate Companies (CIPREC) and the National Multi-Housing Council (NMHC)

 

  Former trustee of the International Council of Shopping Centers (ICSC)

 

  Received a BA in Economics from Kenyon College and an MBA in Finance from the University of Chicago

 

LOGO

 

Director since: May 2016

 

Age: 70

 

Independent

 

Current Board Committees:

  Audit

  NCG

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): CyrusOne Inc., First Industrial Realty Trust, Inc. and Marriott International, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

CAROL B.

EINIGER

 

President of Post Rock Advisors, LLC

 

  

Qualifications:

 

Ms. Einiger provides more than 40 years of experience as an investment banker and investment advisor, during which time she has gained significant expertise in the operation of public and private debt and equity capital markets and the evaluation of investment opportunities.

 

Professional Background:

 

  President of Post Rock Advisors, LLC, a private family investment office, since June 2018

 

  Senior Advisor at Roundtable Investment Partners LLC, a registered investment advisory firm, from January 2017 to June 2018

 

  Founder and President of Post Rock Advisors, LLC, a registered investment advisory firm, from 2005 to 2016

 

  Chief Investment Officer of The Rockefeller University, with responsibility for the management of the University’s endowment, from 1996 to 2005

 

  Chief Financial Officer and Acting President of the Edna McConnell Clark Foundation from 1992 to 1996

 

  Managing Director at Wasserstein Perella & Co. from 1989 to 1992

 

  Visiting Professor and Executive-in-Residence at Columbia Business School from 1988 to 1989

 

  Managing Director, Head of the Capital Markets Department and various positions at The First Boston Corporation from 1973 to 1988

 

  Previously at Goldman, Sachs & Co. from 1971 to 1972

   

Other Leadership Experience, Community

Involvement and Education:

 

  Trustee and member of the Investment Committee, Albert Einstein College of Medicine

 

  Chair of the Executive Council, Montefiore Einstein Cancer Center

 

  Member of the Investment Committee, JPB Foundation

 

  Former Director and Chair of the Investment Committee, UJA-Federation of New York

 

  Former Trustee and member of the Investment Committees of the University of Pennsylvania, the Lasker Foundation and Horace Mann School

 

  Former Vice Chair of the Investment Committee of The Museum of Modern Art

 

  Former member of the Board of Overseers, Columbia Business School

 

  Former member of the Advisory Board of Blackstone Alternative Asset Management

 

  Former Director, Credit Suisse First Boston (USA) and the New York Stem Cell Foundation

 

  Recipient of numerous awards, including the Alumni Award of Merit of the University of Pennsylvania, the Columbia Business School Distinguished Alumna Award, the AJC National Human Relations Award, the Anti-Defamation League Woman of Achievement Award and the Catalyst Award for Corporate Leadership

 

  Received a BA from the University of Pennsylvania and an MBA with honors from Columbia Business School

 

LOGO

 

Director since: May 2004

 

Age: 72

 

Independent

 

Current Board Committees:

  Compensation

  NCG

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): None

 

 

 

 

 

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DIANE J. HOSKINS

 

Co-Chair and Co-Chief Executive Officer of M. Arthur Gensler Jr. & Associates, Inc.

  

Qualifications:

 

Ms. Hoskins has more than 30 years of architecture, design, real estate and business experience, including as a chief executive officer of a global brand. During this time, she has gained extensive leadership, strategic planning, financial stewardship and organizational development experience, as well as a deep understanding of markets and clients, including their current and future space needs and insight into how companies envision their workspaces of the future.

 

Professional Background:

 

  Co-Chair since 2021 and Co-CEO since 2005 of M. Arthur Gensler Jr. & Associates, Inc. (“Gensler”), the world’s largest architecture, design, and planning firm where Ms. Hoskins has broad responsibility for overseeing the company’s global platform and managing its day-to-day operations, including more than 5,000 employees networked across 48 offices in the Americas, Europe, Asia, and the Middle East

 

  Chair of the Gensler Board of Directors from 2018 to 2021 and a director of Gensler since 2004

 

  Various positions at Gensler since 1995, including Southeast Regional Managing Principal and Managing Director of the Washington, DC office

 

  Founded the Gensler Research Institute in 2005 to generate new knowledge and develop a deeper understanding of the connection between design, business and the human experience

 

  Senior Vice President of A. Epstein & Sons Architecture and Engineering from 1990 to 1994

 

  Development Analyst at Olympia & York from 1987 to 1990

 

  Architect Designer at Gensler from 1983 to 1985

 

  Architect at Skidmore Owings & Merrill from 1980 to 1983

   

Other Leadership Experience, Community

Involvement and Education:

 

  Member of the World Economic Forum’s Global Future Council on Cities & Urbanization and the CEO Initiative by Fortune and Time

 

  Fellow of the American Institute of Architects, Global Board Member of the Urban Land Institute, Board Member of the Washington Board of Trade and member of several organizations, including the Economic Club of Washington, DC

 

  Serves on the Visiting Committee of the School of Architecture at the Massachusetts Institute of Technology (MIT) and the Board of Advisors of the University of California, Los Angeles (UCLA) Anderson School of Management

 

  Ms. Hoskins has been honored by several organizations for her work, including the Spirit of Life Award from City of Hope and the Outstanding Impact Award from the Council of Real Estate Women

 

  Inducted into the Washington Business Hall of Fame in 2016, and co-ranked on the Business Insider’s 100 “Creators” list, a who’s who of the world’s 100 top creative visionaries

 

  Ms. Hoskins is sought after by the media to share her expertise in many top tier media outlets, including The Wall Street Journal, The New York Times, Harvard Business Review, Fortune, Business Insider, Financial Times, Bloomberg TV, and global architecture and design trade publications

 

  Frequent speaker at premier conferences, including the Bloomberg Business/CEO Summit, the Economist Human Potential Conference, and the Wall Street Journal Future of Cities Conference; was a featured panelist at the UN Climate Summit in the fall of 2019

 

  Graduated from MIT and holds an MBA from the Anderson Graduate School of Management at UCLA

 

LOGO

 

Director since:

May 2019

 

Age: 64

 

Independent

 

Current Board Committees:

  Sustainability (Chair)

  NCG

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): None

 

 

 

 

 

 

 

 

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

MARY E. KIPP

 

President & Chief Executive Officer of Puget Sound Energy, Inc.

 

  

Qualifications:

 

Ms. Kipp has extensive executive and leadership experience with public companies in the energy services industry, particularly in implementing the transition to supplying 100% clean electricity. As a resident in the Company’s newest market of Seattle, she adds a geographically diverse perspective to the Board.

 

Professional Background:

 

  President, Chief Executive Officer and a director of both Puget Energy, Inc. (“PEI”), an energy services holding company, and its wholly owned subsidiary, Puget Sound Energy, Inc. (“PSE”), the largest electric and natural gas utility in the State of Washington, since January 2020

 

  Joined PEI and PSE as President in August 2019

 

  President and Chief Executive Officer of El Paso Electric Company (“EPE”) from May 2017 to August 2019

 

  Director of EPE from December 2015 to August 2019

 

  Various positions at EPE from 2007 to 2019, including Chief Executive Officer from December 2015 to May 2017 and President from September 2014 to December 2015, Senior Vice President, General Counsel and Chief Compliance Officer and Vice President, Legal and Chief Compliance Officer

   

  Former prosecuting attorney for the Federal Energy Regulatory Commission (FERC)

 

  Former attorney for El Paso Natural Gas Company and Greenberg Traurig, LLP

 

  Director of Landis+Gyr from June 2018 to June 2019

 

Other Leadership Experience, Community

Involvement and Education:

 

  Member of the Boards of Directors of Alliance to Save Energy and Energy Insurance Mutual

 

  Co-chair of Edison Electric Institute’s Institute for Electric Innovation

 

  Member of the Board of Trustees of Seattle University

 

  Former Chair of Smart Electric Power Alliance and Borderplex Alliance

 

  Former Deputy Chair of the Federal Reserve Bank of Dallas

 

  Former member of the executive committee of the Texas Business Leadership Council

 

  Received a BA from Williams College and a JD from The University of Texas School of Law, and is an alumnus of Exeter College, Oxford University

 

LOGO

 

Director since: December 2021

 

Age: 54

 

Independent

 

Current Board Committees:

  Audit

  Sustainability

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): El Paso Electric Company and Landis+Gyr

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

DOUGLAS T.

LINDE

 

President of Boston Properties, Inc.

 

  

Qualifications:

 

Mr. Linde has more than 37 years of experience in the real estate industry, including as our President and former Chief Financial Officer, during which time he gained extensive knowledge of the real estate industry, capital markets and real estate finance, as well as substantial experience in transactional, operational and accounting matters.

 

Professional Background:

 

  President of Boston Properties, Inc. since May 2007

 

  Mr. Linde joined BXP in January 1997 as Vice President of Acquisitions and New Business to help identify and execute acquisitions and to develop new business opportunities; served as Senior Vice President for Financial and Capital Markets from October 1998 to January 2005, Chief Financial Officer and Treasurer from September 2000 to November 2007, and Executive Vice President from January 2005 to May 2007

 

  President of Capstone Investments, a Boston real estate investment company, from 1993 to 1997

   

  Project Manager and Assistant to the Chief Financial Officer at Wright Runstad and Company, a private real estate developer in Seattle, WA, from 1989 to 1993

 

  Began his career in the real estate industry with Salomon Brothers’ Real Estate Finance Group

 

Other Leadership Experience, Community

Involvement and Education:

 

  Trustee of the Beth Israel Lahey Health Board of Trustees

 

  Director Emeritus of the Board of Directors of Beth Israel Deaconess Medical Center (“BIDMC”) and co-chair of the BIDMC capital campaign

 

  Member of the Real Estate Roundtable

 

  Former Director of the Boston Municipal Research Bureau and Jobs for Massachusetts

 

  Former Member of the Urban Studies and Planning Visiting Committee at MIT

 

  Trustee Emeritus of the Wesleyan University Board of Trustees

 

  Received a BA from Wesleyan University and an MBA from Harvard Business School

LOGO

 

Director since: January 2010

 

Age: 58

 

Current Board Committees:

  Sustainability

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): None

 

 

 

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

MATTHEW J.

LUSTIG

 

Chairman of North America Investment Banking and Head of Real Estate & Lodging at Lazard Frères & Co.

 

  

Qualifications:

 

Mr. Lustig has worked in the real estate industry for more than 35 years, during which time he has gained extensive experience providing strategic and financial advice and transaction execution to clients and their boards of directors, including leading real estate companies, and investing in real estate companies and assets as a principal.

 

Professional Background:

 

  Chairman of North America Investment Banking at Lazard Frères & Co. (“Lazard”), the investment bank, since 2019, and Head of North America Investment Banking from 2012 to 2019, with responsibility for the management of a range of Financial Advisory/Investment Banking businesses

 

  Head of Real Estate & Lodging at Lazard, a position he has held for more than 20 years. In recent years, Mr. Lustig has played an active role in more than $400 billion of advisory assignments and transactions involving leading real estate and lodging companies in the public and private markets

 

  Former Chief Executive Officer of the real estate investment business of Lazard and its successors, where he oversaw multiple funds with more than $2.5 billion of equity capital invested in REITs and real estate operating companies

   

  Director of Ventas, Inc., a REIT with a portfolio of senior housing, research and innovation, and healthcare properties, since May 2011

 

  Former Chairman of Atria Senior Living Group, Inc., until it was acquired by Ventas in May 2011

 

  Former director of several other public and private fund portfolio REITs and companies

 

Other Leadership Experience, Community

Involvement and Education:

 

  Member of the Real Estate Roundtable, the Urban Land Institute, the Pension Real Estate Association (former Board and Executive Committee member) and the Council on Foreign Relations

 

  Member of the Real Estate centers at the business schools of Wharton/UPenn (former Chairman of the Advisory Board) and Columbia University

 

  Member of the Board of Advisors at the School of Foreign Service at Georgetown University

 

  Received a BSFS from Georgetown University

LOGO

 

Director since: January 2011

 

Age: 61

 

Independent

 

Current Board Committees:

  NCG (Chair)

  Sustainability

 

Other Public Company Boards:

  Current: Ventas, Inc.

  Former (past 5 years): None

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

OWEN D. THOMAS

 

Chief Executive Officer of Boston Properties, Inc.

 

  

Qualifications:

 

Mr. Thomas is a recognized leader in the real estate industry with more than 33 years of executive leadership, strategic planning, management experience and international experience, as well as substantial experience in financial and capital markets.

 

Professional Background:

 

  Chief Executive Officer and a director of Boston Properties, Inc. since April 2013

 

  Member of the Board of Directors of Lehman Brothers Holdings Inc. (“LBHI”) since March 2012; Chairman of the Board of LBHI from March 2012 until March 2013

 

  Various positions at Morgan Stanley from 1987 to 2011, including Chief Executive Officer of Morgan Stanley Asia Ltd., President of Morgan Stanley Investment Management, Head of Morgan Stanley Real Estate and Managing Director

 

  Member of Morgan Stanley’s Management Committee from 2005 to 2011

 

  Director of Grosvenor Group Limited from 2011 to 2013

   

Other Leadership Experience, Community

Involvement and Education:

 

  Director and former Global Chairman of the Urban Land Institute

 

  Director of the Real Estate Roundtable

 

  Member of the Executive Board of Nareit

 

  Member, The Economic Club of New York

 

  Member and former Chairman of the Pension Real Estate Association

 

  Chair-elect and Trustee of Woodberry Forest School

 

  Former Director of the University of Virginia Investment Management Company

 

  Received a BS in Mechanical Engineering from the University of Virginia and an MBA from Harvard Business School

 

Our Board agreed to nominate Mr. Thomas for re-election to the Board of Directors for so long as he remains CEO, and he has agreed to resign from the Board upon termination of employment.

LOGO

 

Director since: April 2013

 

Age: 60

 

Current Board Committees:

  Sustainability

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): None

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

DAVID A.

TWARDOCK

 

Former President of Prudential Mortgage Capital Company, LLC

 

  

Qualifications:

 

Mr. Twardock has more than 35 years of experience in the real estate finance industry, during which time he has overseen the lending and asset management of billions of dollars of commercial mortgages and other real estate debt financing and the management and disposition of billions of dollars of real estate equity. As such, he provides keen insights with respect to important capital sources for us.

 

Professional Background:

 

  Former President of Prudential Mortgage Capital Company, LLC, the real estate finance affiliate of Prudential Financial, Inc., from December 1998 to March 2013, which had more than $70 billion in assets under management and administration as of December 31, 2012 and annually loaned billions of dollars in real estate debt financings

 

  Various positions with Prudential relating to real estate equity and debt from 1982 to December 1998, including as Senior Managing Director of Prudential Realty Group from 1996 to November 1998

   

  Member of the advisory board of LBA Realty

 

  Private investor in multiple real estate partnerships

 

  Director of Morgan Stanley Bank, N.A. from 2015 through 2018

 

  Member of the advisory board of Blue Vista Capital Management from 2015 to 2020

 

Other Leadership Experience, Community

Involvement and Education:

 

  Member of the Urban Land Institute and the Economics Club of Chicago

 

  Former director of the Real Estate Roundtable and former Chairman of the Real Estate Roundtable Capital Markets Committee

 

  Received a BS in Civil Engineering from the University of Illinois and an MBA in Finance and Behavioral Science from the University of Chicago

LOGO

 

Director since: May 2003

 

Age: 65

 

Independent

 

Current Board Committees:

  Audit (Chair)

  Compensation

 

Other Public Company Boards:

  Current: None

  Former (past 5 years): None

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

WILLIAM H.

WALTON, III

 

Co-Founder and Managing Member of Rockpoint Group, LLC

 

  

Qualifications:

 

Mr. Walton has more than 40 years of real estate investment, development and executive experience, as well as having served as a director of several public and private companies.

 

Professional Background:

 

  Co-Founder and Managing Member of Rockpoint Group, LLC (“Rockpoint”), a global real estate investment management firm, where Mr. Walton is responsible for the overall operations and management of Rockpoint, as well as overseeing the origination, structuring and asset management of all of Rockpoint’s investment activities; since 1994, the Rockpoint founding managing members have invested in approximately $70 billion of real estate

 

  Co-founder of Westbrook Real Estate Partners, LLC (“Westbrook”), a real estate investment management firm

 

  Managing director in the real estate group of Morgan Stanley & Co., Inc. prior to co-founding Westbrook

 

  Director of Dream Finders Homes, Inc., a publicly traded residential building company since, January 2021, and FRP Holdings, Inc., a publicly traded real estate investment and development company, since February 2015

 

  Director of Crow Holdings, a privately owned real estate and investment firm, since December 2007

 

  Former trustee of Corporate Office Properties Trust and former director of Florida Rock Industries and The St. Joe Company

   

Other Leadership Experience, Community

Involvement and Education:

 

  Involved with several real estate industry organizations

 

  Director, trustee or advisory board member of several non-profit organizations, with a particular interest in educational and policy entities, including the American Enterprise Institute, the Jacksonville University Public Policy Institute, the University of Florida Investment Corporation, as well as Princeton University’s Andlinger Center for Energy and the Environment, Griswold Center for Economic Policy Studies, Mpala Research Center and Art Museum

 

  Former member of the boards of Communities in Schools, the Episcopal School of Jacksonville, KIPP Jacksonville Schools, Princeton University and Princeton University Investment Company

 

  Received an AB from Princeton University and an MBA from Harvard Business School

LOGO

 

Director since: May 2019

 

Age: 70

 

Independent

 

Current Board Committees:

  Compensation

 

Other Public Company Boards:

  Current: Dream Finders Homes, Inc., FRP Holdings, Inc.

  Former (past 5 years): None

 

 

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

DIRECTOR INDEPENDENCE

Under the rules of the NYSE, a majority of the Board of Directors must qualify as “independent directors.” To qualify as an “independent director,” the Board must affirmatively determine that the director has no material relationship with us (either directly or as a partner, stockholder or officer of an organization that has a relationship with us). Our Board of Directors established categorical standards to assist it in making the required independence determinations.

Under these categorical standards, any relationship with us shall be deemed not material if:

 

1.

The relationship does not preclude a finding of independence under Sections 303A.02(b) of the NYSE Listed Company Manual (the “NYSE Disqualifying Rules”); and

 

2.

The relationship does not involve any of the following, whether currently existing or occurring since the end of the last fiscal year or during the past three fiscal years:

 

  (a)

a director being an executive officer of, or owning, or having owned, of record or beneficially in excess of ten percent (10%) equity interest in, any business or professional entity that has made during any of such fiscal years, or proposes to make during the Company’s current fiscal year, payments to the Company, an executive officer of the Company or an entity controlled by an executive officer of the Company for property or services in excess of five percent (5%) of: (i) the Company’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, its last fiscal year), or (ii) the other entity’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, its last fiscal year);

 

  (b)

a director being an executive officer of, or owning, or having owned, of record or beneficially in excess of ten percent (10%) equity interest in, any business or professional entity to which the Company, an executive officer of the Company or an entity controlled by an executive officer of the Company has made during any of such fiscal years, or proposes to make during the Company’s current fiscal year, payments for property or services in excess of five percent (5%) of: (i) the Company’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, its last fiscal year), or (ii) the other entity’s consolidated gross revenues for such fiscal year (or, in the case of proposed payments, its last fiscal year);

 

  (c)

a director or an immediate family member of the director being an officer, director or trustee of a charitable organization where the annual discretionary charitable contributions of the Company, an executive officer of the Company or an entity controlled by an executive officer of the Company in any single year to the charitable organization exceeded the greater of $1 million or two percent (2%) of that organization’s consolidated gross revenues for the fiscal year;

 

  (d)

a director or an immediate family member of a director being indebted to the Company, an executive officer of the Company or an entity controlled by an executive officer of the Company in an amount in excess of $120,000;

 

  (e)

a director being an executive officer, partner or greater than 10% equity owner of an entity, or being a trustee or a substantial beneficiary of a trust or estate, indebted to the Company, an executive officer of the Company or an entity controlled by an executive officer of the Company in an amount in excess of the greater of $120,000 or 5% of such entity’s total consolidated assets, or to whom the Company or an entity controlled by an executive officer of the Company is indebted (other than with respect to (i) any publicly traded debt securities of the Company or such entity or (ii) non-recourse loans secured by real estate where both the lender and the Company or such entity intend for the lender to transfer all right to, and control over, the loan within 12 months and the documentation includes customary provisions for loans targeted at the commercial mortgage backed securities (CMBS) or collateralized debt obligation (CDO) markets) in an amount in excess of 5% of the Company’s or such entity’s total consolidated assets;

 

  (f)

a transaction or currently proposed transaction (other than relating to the ownership of securities), which involved or involves the direct or indirect payment in a single year of in excess of $120,000 from the Company,

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

 

an executive officer of the Company or an entity controlled by an executive officer of the Company to a director or an immediate family member of a director;

 

  (g)

a director or an immediate family member of a director being an executive officer, general or managing partner or owner of more than 10% of the outstanding equity securities of an entity that has a co-investment or is a joint venture partner with the Company where the amount of the entity’s equity investment in any single year exceeds the greater of $1 million or 2% of the total consolidated assets of the entity; or

 

  (h)

a director or an immediate family member of a director being an executive officer, general or managing partner or owner of more than 10% of the outstanding equity securities of an entity (other than the Company) in which an executive officer of the Company or an entity controlled by an executive officer of the Company is an executive officer, general or managing partner or owner of more than 10% of the outstanding equity securities of the entity.

For purposes of these standards, “immediate family” member has the same meaning as in the NYSE Disqualifying Rules.

Relationships not specifically deemed not material by the above categorical standards may, in the Board’s judgment, be deemed not to be material.

  2022 INDEPENDENCE DETERMINATIONS

The Board of Directors concluded that the following directors qualify as independent directors under NYSE rules because (1) none of them has any relationships with the Company or any executive officer of the Company that would disqualify him or her from being considered independent under the minimum objective standards contained in the NYSE rules and (2) with one exception, none of them has any relationships other than those deemed to be immaterial under the categorical standards adopted by the Board of Directors.

 

         

9 of 11

 

BXP Directors

 

are Independent

 

 

 

 

Kelly A. Ayotte

 

Diane J. Hoskins

 

Matthew J. Lustig

  

Bruce W. Duncan

 

Mary E. Kipp

 

David A. Twardock

  

Carol B. Einiger

 

Joel I. Klein

 

William H. Walton, III

In determining that Mr. Klein qualifies as an independent director, our Board considered that (1) Mr. Klein is the Chief Executive Officer of a start-up company that signed a lease agreement with BXP in September 2021 for approximately 2,700 square feet in the ordinary course of business, (2) in the professional opinion of a third-party real estate professional, the fixed rent and other financial obligations under the lease represented the fair rental value for the space, and (3) Mr. Klein has no direct pecuniary interest in the transaction.

In determining that each of Ms. Ayotte and Mr. Twardock qualifies as an independent director for purposes of his or her service on the Compensation Committee, our Board considered that (1) each serves or previously served as a non-employee director (or advisory board member) for a company with which BXP has a commercial relationship and engaged in transactions in the ordinary course of business, (2) each transaction was on arms’-length terms and the director had no direct or indirect involvement in the transaction, and (3) the director had no pecuniary interest in the success of the transaction.

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

CONSIDERATION OF DIRECTOR NOMINEES

  SECURITYHOLDER RECOMMENDATIONS

The NCG Committee’s current policy is to review and consider any director candidates recommended by securityholders in compliance with the procedures established from time to time by the NCG Committee. All securityholder recommendations for director candidates must be submitted to our Secretary at Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, Massachusetts 02199-8103, who will forward all recommendations to the NCG Committee. We did not receive any securityholder recommendations for director candidates for election at the 2022 annual meeting in compliance with the procedures set forth below. All securityholder recommendations for director candidates for election at the 2023 annual meeting of stockholders must be submitted to our Secretary on or before December 7, 2022 and must include the following information:

 

   

the name and address of record of the securityholder;

 

   

a representation that the securityholder is a record holder of our securities, or if the securityholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) under the Securities Exchange Act of 1934, as amended (the ”Exchange Act”);

 

   

the name, age, business and residential address, educational background, current principal occupation or employment, and principal occupation or employment for the preceding five (5) full fiscal years of the proposed director candidate;

 

   

a description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications and other criteria for Board membership as approved by the Board from time to time;

 

   

a description of all arrangements or understandings between the securityholder and the proposed director candidate;

 

   

the consent of the proposed director candidate (1) to be named in the proxy statement relating to our annual meeting of stockholders and (2) to serve as a director if elected at such annual meeting; and

 

   

any other information regarding the proposed director candidate that is required to be included in a proxy statement filed pursuant to the rules of the Securities and Exchange Commission (“SEC”).

  BOARD MEMBERSHIP CRITERIA

The NCG Committee has established criteria for NCG Committee-recommended director nominees. These criteria include the following specific, minimum qualifications that the NCG Committee believes must be met by an NCG Committee-recommended nominee for a position on the Board:

 

   

the candidate must have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing;

 

   

the candidate must be highly accomplished in his or her respective field, with superior credentials and recognition;

 

   

the candidate must be well regarded in the community and must have a long-term reputation for high ethical and moral standards;

 

   

the candidate must have sufficient time and availability to devote to our affairs, particularly in light of the number of boards on which the candidate may serve;

 

   

the candidate’s principal business or occupation must not be such as to place the candidate in competition with us or conflict with the discharge of a director’s responsibilities to us and our stockholders; and

 

   

to the extent the candidate serves or has previously served on other boards, the candidate must have a history of actively contributing at board meetings.

 

 

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1    PROPOSAL 1: ELECTION OF DIRECTORS

 

In addition to the minimum qualifications for each nominee set forth above, the NCG Committee will recommend director candidates to the full Board for nomination, or present director candidates to the full Board for consideration, to help ensure that:

 

   

a majority of the Board of Directors will be “independent” as defined by the NYSE rules;

 

   

each of its Audit, Compensation and NCG Committees will be comprised entirely of independent directors; and

 

   

at least one member of the Audit Committee will have such experience, education and other qualifications necessary to qualify as an “audit committee financial expert” as defined by the rules of the SEC.

Finally, in addition to any other standards the NCG Committee may deem appropriate from time to time for the overall structure and composition of the Board, the NCG Committee may consider the following factors when recommending director candidates to the full Board for nomination, or presenting director candidates to the full Board for consideration:

 

   

whether the candidate has direct experience in the real estate industry or in the markets in which we operate; and

 

   

whether the candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience.

  IDENTIFYING AND EVALUATING NOMINEES

The NCG Committee may solicit recommendations for director nominees from any or all of the following sources: non-management directors, the Chief Executive Officer, other executive officers, third-party search firms or any other source it deems appropriate.

The NCG Committee will review and evaluate the qualifications of any proposed director candidate that it is considering or has been recommended to it by a securityholder in compliance with the NCG Committee’s procedures for that purpose, and conduct inquiries it deems appropriate into the background of these proposed director candidates. In identifying and evaluating proposed director candidates, the NCG Committee may consider, in addition to the minimum qualifications for NCG Committee-recommended director nominees, all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the proposed director candidate, his or her depth and breadth of business experience, his or her independence, the needs of our Board, and whether the candidate, if elected, assists in achieving a mix of Board members that represents a diversity of background and experience. Other than circumstances in which we may be legally required by contract or otherwise to provide third parties with the ability to nominate directors, the NCG Committee will evaluate all proposed director candidates that it considers or who have been properly recommended to it by a securityholder based on the same criteria and in substantially the same manner, with no regard to the source of the initial recommendation of the proposed director candidate.

 

 

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2    CORPORATE GOVERNANCE

 

CORPORATE GOVERNANCE

BXP is committed to adopting and adhering to corporate governance policies and practices that foster effective leadership and independent oversight of management. Our Board of Directors oversees management performance on behalf of our stockholders to ensure that our stockholders’ long-term interests are being served, to monitor adherence to BXP’s standards and policies (including policies to manage risk), and to promote the exercise of responsible corporate citizenship.

BOARD LEADERSHIP STRUCTURE

  BXP’S POLICY ON BOARD LEADERSHIP STRUCTURE

The Board of Directors is responsible for broad corporate policy and overall performance of the Company through the oversight of management and stewardship of the Company. Among other duties, the Board is responsible for overseeing the strategy, ESG priorities and risk management for the Company. The Board appoints the Company’s officers, assigns responsibility for management of the Company’s operations to such officers, and reviews their performance.

Our Board of Directors believes it is important to maintain flexibility to determine its board leadership structure based on the best interests of the Company and its stockholders from time to time. Therefore, we do not have a firm policy with respect to whether or not the roles of Chairman of the Board and CEO should be separate or combined. Instead, our Board makes this determination on an annual basis and as appropriate.

As the following timeline shows, BXP has operated under both structures in the past.

HISTORY OF BOARD LEADERSHIP

 

 

LOGO

Regardless of the specific leadership structure in effect, the Company incorporates a strong defined leadership role for an independent director. Our Board has determined, and our Corporate Governance Guidelines reflect, that our Board leadership structure should include either an independent, non-executive Chairman of the Board or a Lead Independent Director.

 

 

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2    CORPORATE GOVERNANCE

 

Specifically, our Corporate Governance Guidelines provide that it is the Board’s policy that if:

 

  

   the positions of Chairman of the Board and CEO are held by the same person, or   LOGO   

the independent directors
shall select an independent
director to serve as

Lead Independent Director

  

   the position of Chairman of the Board is held by a non-independent director, or

  

   none of the directors has been elected to serve as Chairman of the Board,

Our Corporate Governance Guidelines further provide that an independent director selected to serve as Lead Independent Director will serve in that role until (1) he or she ceases to be an independent director or resigns from the position, (2) a successor is selected by a majority of the independent directors or (3) an independent director is serving as the Chairman of the Board. In addition, if the Chairman of the Board is an independent director, then he or she shall assume the responsibilities of the Lead Independent Director referenced below and there will not be a separate Lead Independent Director.

  BXP’S BOARD LEADERSHIP STRUCTURE

Our Board of Directors determined that it is in the best interests of BXP and our stockholders to combine the roles of Chairman and CEO and appoint Mr. Thomas as Chairman and CEO, effective immediately following the 2022 annual meeting. Our Board believes that having Mr. Thomas serve as Chairman and CEO will promote clear accountability and strong leadership with one person setting the tone for our employees, investors, tenants, vendors and other stakeholders and having primary responsibility for executing our strategy. The combined role also preserves transparency between management and the Board by serving as an effective bridge for communication between the Board and management on significant business developments and time-sensitive matters and provides unified leadership for carrying out our strategic initiatives and business plans.

To ensure an appropriate level of oversight continues between our independent directors and the CEO, the independent directors have selected Ms. Ayotte to serve as Lead Independent Director, effective immediately following the 2022 annual meeting. We first established the role of Lead Independent Director in 2014 to enhance and provide further assurances to our stockholders of the independent oversight exercised by our Board of Directors. If re-elected at the 2022 annual meeting, Mr. Klein, who has served as our independent Chairman of the Board since May 2019 (and as Lead Independent Director from May 2016 to May 2019), will continue serving as a director of the Company.

Our Board of Directors encourages strong communication among all of its independent directors and the Chairman and CEO, and the Board believes that it has been able to, and will continue to, effectively provide independent oversight of our business and affairs, including risks facing the Company, through the role of our Lead Independent Director, the independent committees of our Board of Directors, the overall composition of our Board of Directors and contributions from all of our independent directors and other corporate governance policies in effect.

 

 

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2    CORPORATE GOVERNANCE

 

  DUTIES AND RESPONSIBILITIES OF THE LEAD INDEPENDENT DIRECTOR

In addition to responsibilities that may be assigned from time to time by the independent directors of the Board, the duties and responsibilities of our Lead Independent Director include:

 

 

  Approving information sent to the Board

 

  Approving Board meeting agendas and schedules to assure sufficient time for all agenda items

 

  Coordinating the work of each committee with the activities of the full Board

 

  Calling meetings of the independent directors and special meetings of the Board, as necessary

 

  Presiding at all meetings of the Board at which the Chairman is not present, including executive sessions of independent directors

 

  Attending meetings of Board committees regularly

 

  Working with the CEO and the Chair of the NCG Committee to provide strategic direction on all Board and governance matters

 

  Serving as liaison between the CEO and the independent directors

 

  

 

  Working with the CEO on matters of strategic importance to the Board and the Company

 

  Ensuring that he/she is available, if requested by major investors, for direct consultation and communication

 

  Working with the Compensation Committee to establish and review annual and long-term goals for assessing performance and to evaluate the performance of the CEO

 

  Conducting bi-annual interviews with individual directors regarding individual contributions and overall Board composition and planning

 

  Independently reviewing with the CEO the Company’s succession plan for executive officers

 

  Encouraging and facilitating active participation of all directors

BOARD AND COMMITTEE MEETINGS

 

Number of Meetings and Attendance. Our Board of Directors met eight (8) times during 2021. Each incumbent director attended at least 75% of the aggregate of (x) the total number of meetings of our Board of Directors in 2021 held during the period for which he or she was a director and (y) the total number of meetings in 2021 of all committees of our Board of Directors on which the director served during the periods that he or she served.

 

Annual Meeting Attendance. Directors are expected to attend annual meetings of our stockholders in person unless doing so is impracticable due to unavoidable conflicts. All directors then serving attended the 2021 annual meeting of stockholders.

 

Meetings of Non-Management Directors. Directors who qualify as “non-management” within the meaning of the rules of the NYSE meet on a regular basis in executive sessions without management participation. The executive sessions occur after each regularly scheduled meeting of our entire Board and at such other times that the non-management directors deem appropriate, and they are chaired by our independent Chairman of the Board, if one is elected, or our Lead Independent Director. Each director has the right to call an executive session. Currently, all of our non-management directors are independent.

  

8

Board meetings in 2021

 

                                 

 

100%

attendance at the

2021 Annual Meeting

 

                                 

 

In the aggregate, during 2021, our directors attended more than 98% of the total number of Board meetings and meetings of committees on which they served.

 

 

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2    CORPORATE GOVERNANCE

 

BOARD REFRESHMENT AND EVALUATIONS

  DIRECTOR SUCCESSION PLANNING

Led by our NCG Committee, our Board of Directors remains focused on ensuring (1) a smooth transition when directors decide to retire or otherwise leave our Board and (2) that the composition of our Board is systematically refreshed so that, taken as a whole, it has the desired mix of skills, experience, continuity, reputation and diversity relevant to our strategic direction and operating environment, as well as the knowledge, ability and independence to continue to deliver the high standard of governance and oversight expected by investors. Among other aspects of the process, our Board of Directors:

 

   

identifies the collective mix of desired skills, experience, knowledge, diversity and independence for our Board of Directors, taken as a whole, and identifies potential opportunities for enhancement in one or more of those areas;

 

   

considers each current director’s experience, skills, principal occupation, reputation, independence, age, tenure, committee membership and diversity (including geography, gender and ethnicity); and

 

   

considers the results of our Board and committee self-evaluations, as well as feedback received from the bi-annual interviews of each director by our Chairman of the Board or Lead Independent Director, as applicable (see “— Board and Committee Evaluations” below).

Since 2016, our Board (1) nominated, and our stockholders elected, five new directors and (2) appointed one director to fill a vacancy on the Board. Of these six additions to our Board, four are women and one is African American. Ms. Kipp, who was appointed to the Board in December 2021, was initially recommended for consideration by Mr. Lustig.

 

 

LOGO

  BOARD COMMITTEE ROTATION

The NCG Committee also considers the periodic rotation of committee members and committee chairs to introduce fresh perspectives and to broaden and diversify the views and experience represented on committees.

 

 

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2    CORPORATE GOVERNANCE

 

  BOARD AND COMMITTEE EVALUATIONS

The feedback received from each director during the Board and committee evaluation processes plays a key role in ensuring that our Board and its committees function effectively, and in overall director succession planning. To this end, the NCG Committee is responsible for establishing the process used and the criteria for the evaluations.

 

LOGO

   

Topics considered during the Board and committee evaluations include:

 

   

Board and Committee Operations

 

     

 

  Board and committee membership, including independence, director skills, background, expertise and diversity

 

  Board rotation and succession

 

  Proper scope of each committee’s authority and responsibilities

 

     

  Process for director nominations

 

     

  Number and conduct of meetings, including time allocated for, and encouragement of, candid dialogue and executive sessions

 

     

  Materials and information, including quality, quantity and timeliness of information received from management, and suggestions for educational sessions

 

       

  Culture

 

   

 

Board Performance

 

 

 

 

 

 

 

 

 

 

 

 

 

  Strategic oversight

 

  Risk oversight

 

  Financial

 

  Cyber Attacks and Intrusions

 

  ESG

 

  Identification of topics that should receive more attention and discussion

 

  Management succession

 

 

   

Committee Performance

 

 

 

 

 

 

  Performance of committee duties under its charter

 

  Effectiveness of outside advisors

 

 

 

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2    CORPORATE GOVERNANCE

 

BOARD COMMITTEES

Our Board of Directors has an (1) Audit, (2) Compensation and (3) NCG Committee. Each of these committees operates pursuant to a charter that was approved by our Board of Directors and that is reviewed and reassessed at least annually. As required by the rules of the NYSE, a copy of each of these charters is available in the Investors section of our website at https://investors.bxp.com/ under the heading “Governance.” In addition, on March 18, 2021, our Board of Directors established a Sustainability Committee. Our Board of Directors may from time to time establish other special or standing committees to facilitate the management of BXP or to discharge specific duties delegated by the full Board of Directors.

The membership and the function of each of these committees, and the number of meetings each held during 2021, are described below.

 

     Current Committee Assignments
  Name    Audit    Compensation    NCG    Sustainability
       

Kelly A. Ayotte

    

 

   LOGO    LOGO     

 

       

Bruce W. Duncan

   LOGO     

 

   LOGO     

 

       

Carol B. Einiger

    

 

   LOGO    LOGO     

 

       

Diane H. Hoskins

    

 

    

 

   LOGO    LOGO
       

Mary E. Kipp

   LOGO     

 

    

 

   LOGO
       

Joel I. Klein(1)

   ex officio    ex officio    ex officio    ex officio
       

Douglas T. Linde

    

 

    

 

    

 

   LOGO
       

Matthew J. Lustig

    

 

    

 

   LOGO    LOGO
       

Owen D. Thomas

    

 

    

 

    

 

   LOGO
       

David A. Twardock

   LOGO    LOGO     

 

    

 

       

William H. Walton

    

 

   LOGO     

 

    

 

       

Number of Meetings in 2021

   8    8    4    2

 

           

 

       LOGO   

 

 

   Committee Chair

 

 

   LOGO   

 

 

  Committee Member

 

 

   LOGO   

 

 

 Audit Committee Financial Expert

 

(1)

As Chairman, Mr. Klein serves ex officio as a member of each of the Board’s committees.

 

 

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2    CORPORATE GOVERNANCE

 

  AUDIT COMMITTEE

 

   

LOGO

Members:

David A. Twardock (Chair)

Bruce W. Duncan

Mary E. Kipp*

 

Number of Meetings in

2021: 8

 

Financial Expertise: Our Board of Directors determined that each of Ms. Kipp and Messrs. Duncan and Twardock qualifies as an “audit committee financial expert” as that term is defined in the rules of the SEC.

 

*Ms. Kipp was appointed to the Audit Committee on December 20, 2021.

 

  

The Audit Committee’s responsibilities include:

 

  sole authority to appoint, retain, terminate and determine the compensation of our independent registered public accounting firm;

 

  reviewing with our independent registered public accounting firm the scope and results of the audit engagement;

 

  approving professional services provided by our independent registered public accounting firm;

 

  reviewing the independence of our independent registered public accounting firm;

 

  overseeing the planning and conduct of our annual risk assessment;

 

  overseeing our cyber security risk management;

 

  evaluating the Company’s internal audit function and reviewing the internal audit plan; and

 

  performing such other oversight functions as may be requested by our Board of Directors from time to time.

 

Each member of the Audit Committee is an independent director as that term is defined in the rules of the NYSE.

 

For additional disclosures regarding the Audit Committee, including the Audit Committee Report, see “Proposal 4: Ratification of Appointment of Independent Registered Public Accounting Firm” beginning on page 117.

 

 

 

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2    CORPORATE GOVERNANCE

 

  COMPENSATION COMMITTEE

 

   

LOGO

Members:

Kelly A. Ayotte (Chair)

Carol B. Einiger

David A. Twardock

William H. Walton, III

 

Number of Meetings in

2021: 8

  

The Compensation Committee’s responsibilities include:

 

  reviewing and approving the corporate goals and objectives relevant to the compensation of the CEO and certain designated senior executive officers;

 

  evaluating the performance of the CEO and designated senior executive officers in light of such goals and objectives and determining and approving compensation of these officers based on such evaluation;

 

  reviewing and approving the compensation of other executive officers;

 

  reviewing and approving grants and awards under all incentive-based compensation plans and equity-based plans;

 

  reviewing and making recommendations to the full Board of Directors regarding the compensation of non-employee directors; and

 

  performing other functions and duties deemed appropriate by our Board of Directors.

 

Each member of the Compensation Committee is an independent director as that term is defined in the rules of the NYSE.

 

The Compensation Committee makes all compensation decisions for all executive officers. The Compensation Committee reviews and approves all equity awards for all employees and has delegated limited authority to the CEO to make equity grants to employees who are not executive officers.

 

In 2021, the Compensation Committee engaged FW Cook to serve as its independent, third-party advisor with respect to our overall executive compensation program and to advise on the reasonableness of executive compensation levels in comparison with those of other similarly situated companies and consult on the structure of our executive compensation program to optimally support our business objectives. FW Cook also advised on executive compensation trends among REITs and the broader market. Information concerning the nature and scope of FW Cook’s assignments and related disclosures is included under “Compensation Discussion and Analysis” beginning on page 58.

 

The Compensation Committee Report is included in this proxy statement on page 92.

 

 

 

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2    CORPORATE GOVERNANCE

 

  NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

 

   

LOGO

Members:

Matthew J. Lustig (Chair)

Kelly A. Ayotte

Bruce W. Duncan

Carol B. Einiger

Diane J. Hoskins

 

Number of Meetings in

2021: 4

  

The NCG Committee’s responsibilities include:

 

  identifying individuals qualified to become Board members, consistent with criteria established by the NCG Committee, and recommending to the Board director nominees for election at each annual meeting of stockholders;

 

  recommending to the Board the directors for appointment to is committees;

 

  establishing a policy with regard to the consideration by the NCG Committee of director candidates recommended by securityholders;

 

  establishing procedures to be followed by securityholders submitting such recommendations and establishing a process for identifying and evaluating nominees for our Board of Directors, including nominees recommended by securityholders; and

 

  performing such other functions as may be requested by our Board of Directors from time to time.

 

The NCG Committee is also responsible for annually reviewing our Corporate Governance Guidelines and recommending any changes to our Board of Directors. These Corporate Governance Guidelines provide that the NCG Committee, together with our CEO, is responsible for coordinating succession planning by our Board of Directors. A copy of the Corporate Governance Guidelines is available on our website at http://investors.bxp.com/governance-guidelines.

 

Each member of the NCG Committee is an independent director as that term is defined in the rules of the NYSE.

 

 

 

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2    CORPORATE GOVERNANCE

 

  SUSTAINABILITY COMMITTEE

 

   

LOGO

Members:

Diane J. Hoskins (Chair)

Mary E. Kipp*

Douglas T. Linde

Matthew J. Lustig

Owen D. Thomas

 

Number of Meetings in

2021: 2

 

*Ms. Kipp was appointed to the Sustainability Committee on December 20, 2021.

  

The Board of Directors established the Sustainability Committee on March 18, 2021. Under its charter the Sustainability Committee’s responsibilities include:

 

  reviewing and sharing real estate industry sustainability best practices;

 

  working with our Board and management to establish environmental performance goals (energy, emissions, water and waste), and initiatives related to climate action and resilience;

 

  monitoring and evaluating the Company’s progress in achieving its sustainability goals and commitments, as well as relevant independent environmental, sustainability and governance ratings and rankings;

 

  reporting to and advising our Board as appropriate on the Company’s sustainability objectives and its strategy;

 

  periodically reviewing legal, regulatory and compliance matters that may have a material impact on the implementation of the Company’s sustainability objectives, and making recommendations to our Board and management, as appropriate, with respect to the Company’s response to such matters;

 

  assisting our Board in fulfilling its oversight responsibility by identifying, evaluating and monitoring the environmental and climate trends, issues, risks and concerns that affect or could affect the Company’s business activities and performance;

 

  advising our Board on significant stakeholder concerns related to sustainability; and

 

  performing such other functions as may be requested by our Board of Directors from time to time.

 

 

 

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2    CORPORATE GOVERNANCE

 

BOARD’S ROLE IN RISK OVERSIGHT

Our Board of Directors has overall responsibility for our risk oversight. The Board discharges this responsibility either directly or indirectly through its committees. While the full Board of Directors is primarily responsible for risk oversight, its committees monitor and address risks that are within the scope of a particular committee’s expertise, the committee’s charter or the resolution(s) appointing the committee. Our Board and its committees exercise their oversight responsibilities in a variety of ways, but in all cases, our directors are informed by regular reports from management and third-party advisors and consultants that are intended to identify key risks and help ensure that we employ appropriate strategies to mitigate them.

 

 

BOARD OF DIRECTORS

 

  Our Board of Directors administers its risk oversight function through:

 

›  Regular periodic reports from management on material risks that we face, including, among others:

 

›  Required approval by our Board of Directors (or a committee thereof) of significant transactions and other matters, including, among others:

›  market conditions

 

›  tenant concentrations, credit worthiness and possible tenant bankruptcies

 

›  leasing activity and expected expirations

 

›  the status of development projects

 

›  compliance with debt covenants and credit ratings

 

›  management of debt maturities and interest-rate risk

 

›  access to debt and equity capital markets

 

›  existing and potential legal claims

 

›  environmental, social and governance risks

 

›  potential cyber-attacks and intrusions

 

›  public health crises, pandemics and epidemics

 

›  succession planning

 

 

›  acquisitions and dispositions of properties

 

›  development and redevelopment projects

 

›  new borrowings, refinancings and guarantees of debt, and the use of hedging instruments to manage interest-rate risk

 

›  the appointment of all officers

 

›  the compensation of executive officers

 

›  transactions with related persons and conflicts of interest

 

›  Reports from the Audit, Compensation, NCG and Sustainability Committees, and other committees that may be established from time to time, on matters delegated to them

 

 

›  Reports from outside advisors and consultants, including ESG, climate-risk, legal, accounting and tax professionals, regarding various areas of potential risk

 

 

 

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2    CORPORATE GOVERNANCE

 

 

BOARD COMMITTEES

 

Our Board of Directors uses its committees to assist in risk oversight as follows:

 

Audit Committee       Compensation
Committee
      NCG Committee       Sustainability Committee
       

The Audit Committee oversees risks related to:

 

  the integrity of our financial statements and internal control over financial reporting;

 

  compliance with GAAP and the use of estimates and judgments;

 

  our use of non-GAAP financial measures;

 

  cyber security;

 

  REIT compliance;

 

  pending and threatened litigation, legal and regulatory requirements, and insurance;

 

  the performance of our internal audit function;

 

  the independence and performance of our independent auditors; and

 

  our anti-fraud program.

 

   

The Compensation Committee oversees risks related to:

 

  our ability to attract, retain and motivate our executive officers;

 

  the use of compensation practices and plans to align the interests of our executives with our stockholders; and

 

  the influence of incentive compensation on excessive risk-taking.

 

For more information, see “Compensation Discussion and Analysis — IV. Other Compensation Policies — Assessment of Compensation-Related Risks” on page 91.

   

The NCG Committee oversees risks related to:

 

  the composition, leadership and independence of the Board and its committees;

 

  the general operations of the Board;

 

  the process of conducting the annual Board and committee self-evaluations and bi-annual interviews;

 

  our compliance with our Corporate Governance Guidelines and applicable laws and regulations, including applicable rules of the NYSE; and

 

  policies with respect to the consideration of director candidates recommended by stockholders.

   

The Sustainability Committee oversees risks related to:

 

  environmental and climate action and resilience trends and issues;

 

  our progress in achieving our sustainability goals and initiatives; and

 

  regulatory compliance matters that may impact our sustainability objectives.

 

                 LOGO

 

Audit Committee Role in Risk Assessment. The Audit Committee oversees an annual risk assessment designed to identify and analyze risks to achieving BXP’s business objectives. The results of the risk assessment are used to develop BXP’s annual internal audit plan.

Because of the role of our Board of Directors in risk oversight, our Board believes that any leadership structure that it adopts must allow it to effectively oversee the management of the risks relating to our operations. Our Board of Directors recognizes that there are different leadership structures that could allow it to effectively oversee the management of these risks, and while our Board believes its current and anticipated leadership structures enable it to effectively manage such risks, it is not the primary reason our Board of Directors selected its leadership structure over other potential alternatives. See the discussion under the heading “— Board Leadership Structure” beginning on page 27 for a discussion of why our Board of Directors has determined that its current leadership structure is appropriate.

 

 

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2    CORPORATE GOVERNANCE

 

OTHER GOVERNANCE MATTERS

  CODE OF BUSINESS CONDUCT AND ETHICS AND OTHER POLICIES    

Our Board of Directors adopted the following policies, copies of which are available on our website:

 

   

Code of Business Conduct and Ethics (the “Code of Ethics”) — available on our website at http://investors.bxp.com/code-conduct-and-ethics

The Code of Ethics governs business decisions made and actions taken by our directors, officers and employees. We intend to disclose on this website any amendment to, or waiver of, any provision of this Code of Ethics applicable to our directors and executive officers that would otherwise be required to be disclosed under the rules of the SEC or the NYSE rules.

 

   

Corporate Governance Guidelines — available on our website at http://investors.bxp.com/governance-guidelines

 

   

Policy on Company Political Spending — available on our website at http://investors.bxp.com/policy-political-spend

  COMMUNICATIONS WITH THE BOARD

Stockholders and other interested parties who wish to communicate with our Board, any director, our non-management directors as a group, or our Audit Committee may do so as shown below. We recommend that all correspondence be sent via certified U.S. mail, return receipt requested. All correspondence received by the Compliance Officer will be forwarded by the Compliance Officer promptly to the addressee(s).

 

Communicate with any of our directors or the Board of Directors as a group:

    Communicate with our non-management directors as a group:
       

Name(s) of Director(s)/Board of Directors of Boston Properties, Inc.

c/o Compliance Officer

Boston Properties, Inc.

800 Boylston Street, Suite 1900

Boston, Massachusetts 02199-8103

   

Non-Management Directors of Boston Properties, Inc.

c/o Compliance Officer

Boston Properties, Inc.

800 Boylston Street, Suite 1900

Boston, Massachusetts 02199-8103

Communicate with our Audit Committee to report complaints or concerns regarding accounting, internal accounting controls or auditing matters:

 

Follow any of the “Procedures for Submission of Complaints under the Audit Committee Complaint Procedures” that are attached as Exhibit 1 to our Code of Ethics (see “— Code of Business Conduct and Ethics and Other Policies” above)

   

Chair of the Audit Committee of Boston Properties, Inc.

c/o Compliance Officer

Boston Properties, Inc.

800 Boylston Street, Suite 1900

Boston, Massachusetts 02199-8103

You are welcome to make any such reports anonymously, but we prefer that you identify yourself so that we may contact you for additional information if necessary or appropriate.

 

 

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2    CORPORATE GOVERNANCE

 

  COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION    

Mses. Ayotte and Einiger and Messrs. Twardock and Walton each served on the Compensation Committee during 2021. None of these persons has served as an officer or employee of BXP. None of these persons had any relationships with BXP requiring disclosure under Item 404 of Regulation S-K. None of BXP’s executive officers served as a director or a member of a compensation committee (or other committee serving a similar function) of any other entity, an executive officer of which served as a director of BXP or a member of the Compensation Committee during 2021.

  PROXY ACCESS BY-LAW PROVISIONS    

Our By-laws include a proxy access right for stockholders, pursuant to which a stockholder, or group of no more than five stockholders, meeting specified eligibility requirements, may include director nominees in our proxy materials for annual meetings of our stockholders. In order to be eligible to utilize these proxy access provisions, a stockholder, or group of stockholders, must:

 

   

have owned shares of common stock equal to at least 3% of the aggregate of the issued and outstanding shares of common stock continuously for at least the prior three years;

 

   

represent that such shares were acquired in the ordinary course of business and not with the intent to change or influence control and that such stockholder or group does not presently have such intent; and

 

   

provide a notice requesting the inclusion of director nominees in our proxy materials and provide other required information to us not less than 120 days prior to the anniversary of the date of the proxy statement for the prior year’s annual meeting of stockholders (with adjustments if the date for the upcoming annual meeting of stockholders is more than 30 days before or more than 60 days after the anniversary date of the prior year’s annual meeting).

For purposes of the foregoing requirements, issued and outstanding common units, other than those owned by us, our Operating Partnership or any of their directly or indirectly wholly owned subsidiaries and excluding issued and outstanding long term incentive units, will be treated as issued and outstanding shares of common stock.

Additionally, all director nominees submitted through these provisions must be independent and meet specified additional criteria, and stockholders will not be entitled to utilize this proxy access right at an annual meeting if we receive notice through our traditional advanced notice by-law provisions that a stockholder intends to nominate a director at such meeting. The maximum number of director nominees that may be submitted pursuant to these provisions may not exceed 25% of the number of directors then in office.

The foregoing proxy access right is subject to additional eligibility, procedural and disclosure requirements set forth in our By-laws.

 

 

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3    HUMAN CAPITAL AND SUSTAINABILITY

 

HUMAN CAPITAL AND SUSTAINABILITY

HUMAN CAPITAL

Our success depends on human capital. We are focused on social performance and positive externalities, including diversity and inclusion in our workforce, the well-being of our employees, their training and professional development, and making positive contributions to the communities we serve.

  DIVERSITY & INCLUSION

Our policy is to recruit, hire, assign, promote and train in all job titles without regard to race, national origin, religion, age, color, sex, sexual orientation, gender identity, disability, or protected veteran status, or any other characteristic protected by applicable law.

In 2020, we launched the BXP Diversity & Inclusion (“D&I”) Committee and, in 2021, we advanced our mission to promote diversity, inclusion, equality and transparency as part of our culture, business activities and decision-making practices. We identified actionable diversity goals and proposed initiatives in the areas of recruitment and development, company policies and community outreach.

 

 

Diversity & Inclusion

Goals and Initiatives

 

       

 

Notable 2021

Actions & Achievements

 

   

Establish a charter, structure and overall construct for the formation of impactful Employee Resource Groups

    

Launched the formation of three Employee Resource Groups for Women, Ethnic Minorities, and LGBTQA+

 

   

Hire Diversity- & Inclusion-focused Human Resources professionals

    

Made strategic hires in Human Resources dedicated to promoting D&I

 

   

Advance diversity in the BXP workforce

    

New Hires:(1)

 

43% ethnically diverse

 

53% women

 

Total Workforce:(1)(2)

 

4% increase of ethnically diverse employees

 

1% increase of women employees

 

Officer Level:(2)

 

5% increase of ethnically diverse officers

 

6% increase of women officers

 

   

Determine baselines and set appropriate goals to increase the diversity of our supplier, vendor and contractor network

    

Revised our internal processes for our Property Management and Construction Departments to track and promote the inclusion of underrepresented business enterprises, including vendors, suppliers and subcontractors, as business partners

 

   

Develop relationships with minority-owned or minority-led banks

    

Proactively procured a minority- and woman-owned bank to act as co-manager in two of our unsecured senior notes offerings in 2021

 

Commenced a depository relationship with a Black-led bank

 

 

  (1)

Excludes union employees for which the union controls the hiring decisions.

  (2)

Represents year-over-year change compared to 2020.

 

 

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3    HUMAN CAPITAL AND SUSTAINABILITY

 

The following is a snapshot of the diversity of our workforce as of December 31, 2021:

 

Total Workforce(1)    Managers & Above(1)

 

LOGO

   LOGO

 

(1)   We determine race and gender based on our employees’ self-identification. Ethnic minorities are defined as those included in the EEO Ethnicity and Race Categories: Asian, Black or African American, Hispanic or Latino, American Indian or Alaskan Native, Native Hawaiian or other Pacific Islander, or multiracial background. Total workforce includes all of our employees except union employees for which the union controls the hiring process.

  CULTURE & EMPLOYEE ENGAGEMENT

The success of our business is tied to the quality of our workforce, and we strive to maintain a corporate environment without losing the entrepreneurial spirit with which we were founded more than 50 years ago.

 

   

We conduct employee engagement surveys to monitor satisfaction in all aspects of their employment

 

   

The success of our efforts in the workplace is demonstrated by the satisfaction and long tenure of our employees:

 

   

38% worked at BXP for ten or more years

 

   

average tenure is 10.0 years for all employees and 18.8 years for our executive leadership.

  HEALTH, SAFETY & WELLNESS

We are keenly aware of the influence of buildings on human health and its importance to our tenants and employees. In light of the COVID-19 pandemic, our focus on healthy buildings has become even more important.

 

   

In early 2020, we established a Health Security Task Force of internal and external subject matter experts.

 

   

Task force developed the BXP Health Security Plan, which we published in May 2020 and updated in March 2021. The BXP Health Security Plan is a comprehensive set of building operational measures, including cleaning and disinfection, air and water quality, physical distancing, screening and personal protective equipment and health security communication.

 

   

We conduct health and security quality audits to ensure implementation and effectiveness of the plan at our properties.

 

   

In 2021, we commenced an initiative focused on indoor air quality and, in early 2022, installed real-time indoor air quality monitoring sensors in select buildings throughout our portfolio.

We also believe the success of our employees depends upon their physical health, mental health, work-life balance and financial well-being. To support this, our employee benefits program includes:

 

   

an Employee Wellness Program to encourage employees to improve their health and well-being, and

 

   

an Employee Assistance Program that includes services for childcare, eldercare, personal relationship information, financial planning assistance, stress management, mental illness and general wellness and self-help.

 

 

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3    HUMAN CAPITAL AND SUSTAINABILITY

 

  CAREER DEVELOPMENT & TRAINING

We invest significant resources in our employees’ personal and professional growth and development and provide a range of development opportunities that build and strengthen employees’ leadership and professional skills. These development opportunities include in-person and virtual training sessions, in-house learning opportunities, various management trainings, departmental conferences, executive “town hall” meetings and external programs.

SUSTAINABILITY

We actively work to promote our growth and operations sustainably and responsibly across our six regions. Our sustainability strategy is to conduct our business, the development and operation of new and existing buildings, in a manner that contributes to positive economic, social and environmental outcomes for our investors, customers, employees and the communities we serve. Our investment philosophy is shaped by our core strategy of long-term ownership and our commitment to our communities and the centers of commerce and civic life that make them thrive. We are focused on developing and maintaining healthy, high-performance buildings, while simultaneously mitigating operational costs and the potential external impacts of energy, water, waste, greenhouse gas emissions and climate change. To that end, we have publicly adopted long-term energy, emissions, water and waste goals that establish aggressive reduction targets and have been aligned with the United Nations Sustainable Development Goals. BXP is a corporate member of the U.S. Green Building Council® (“USGBC”) and has a long history of owning, developing and operating properties that are certified under USGBC’s Leadership in Energy and Environmental Design (LEED®) rating system. In 2018, we announced a partnership with a leading healthy building certification system, Fitwel, to support healthy building design and operational practices across our portfolio, becoming a Fitwel Champion.

In addition, since 2018 we have been an active participant in the green bond market, which provides access to sustainability-focused investors interested in the positive environmental externalities of our business activities. We also make a social impact through charitable giving, volunteerism, public realm investments and diversity and inclusion. Through these efforts, we demonstrate that operating and developing commercial real estate can be conducted with a conscious regard for the environment and wider society while mutually benefiting our stakeholders.

  INDUSTRY LEADERSHIP

We continue to be recognized as an industry leader in sustainability. In 2021, BXP ranked among the top real estate companies in the GRESB assessment, earning a sixth consecutive 5-Star rating, the highest rating and recognition for being an industry leader. It was the tenth consecutive year that BXP earned the GRESB “Green Star” designation, achieving the highest scores in several categories, including Data Monitoring & Review, Targets, Policies, Reporting and Leadership. BXP was also named one of America’s Most Responsible Companies by Newsweek magazine in 2022. Overall, BXP ranked #31 out of 500 companies and was the highest ranking office REIT. In addition, 2021 was the first year in which BXP was named to the Dow Jones Sustainability Index (DJSI North America). BXP was one of nine real estate companies that qualified and the only office REIT in the index, scoring in the 93rd percentile of the industry universe of companies assessed for inclusion. Further, BXP was named to the inaugural Forbes Green Growth 50 list, ranking #4 among the top 50 companies reducing greenhouse gas emissions while growing profits.

 

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BXP has adopted sustainable development and operational practices across its portfolio. In 2017, shortly after the U.S. withdrawal from the Paris Agreement, BXP became a proud signatory of the We Are Still In declaration and aligned emissions reduction targets with climate science. The Science Based Targets initiative Target Validation Team has classified BXP’s emissions reduction target ambition as being in line with a 1.5°C trajectory, currently the most ambitious designation available. As of the end of 2021, BXP is one of only thirteen North American Real Estate companies with this distinction and the only North American office company in that group. We have LEED-certified 28.3 million square feet of our portfolio, of which 98% is certified at the highest Gold and Platinum levels. BXP’s master lease form includes green lease clauses that support a more sustainable tenant-landlord relationship. In 2021, BXP continued as a Green Lease Leader at the highest Gold level by the Institute for Market Transformation and the U.S. Department of Energy for exhibiting a strong commitment to high performance and sustainability in buildings and best practices in leasing. Through active asset management and tenant engagement, BXP has been a leader in energy efficiency and healthy building practices. In 2021, BXP was recognized by the Environmental Performance Agency as a 2021 ENERGY STAR Partner of the Year with the Sustained Excellence distinction. BXP was named a Best in Building Health award winner in 2020 and continued its Fitwel partnership in 2021. BXP has 10 Fitwel Ambassadors among our Sustainability, Development and Property Management teams and has certified 16.7 million square feet of our portfolio under the Fitwel rating system.

  GREEN FINANCE

From 2018 to 2021, BPLP issued an aggregate of $3.55 billion of green bonds in four separate offerings. The terms of the green bonds have restrictions that limit our allocation of the net proceeds to “eligible green projects.” We published our June 30, 2019 Green Bond Allocation Report in 2019, disclosing the full allocation of approximately $988 million in net proceeds from BPLP’s inaugural green bond offering in 2018 to the eligible green project at our Salesforce Tower property in San Francisco, California. Our September 30, 2020 Green Bond Allocation Report disclosed the full allocation of approximately $841 million in net proceeds from BPLP’s green bond offering in June 2019. These Green Bond Allocation Reports are available on our website at http://www.bxp.com under the heading “Commitment,” but they are not incorporated by reference into this proxy statement, our Annual Report on Form 10-K, or any other document we file with the SEC.

   CLIMATE RESILIENCE

As a long-term owner and active manager of real estate assets in operation and under development, we take a long-term view of potential risks, including climate change. We are focused on understanding how climate change may impact our portfolio and the steps we can take to increase climate resilience. We are in the process of evaluating physical and transition risks associated with climate change, and we view this as an opportunity to protect asset value by (1) proactively assessing climate risk, (2) implementing practical, cost-effective resilience measures and (3) integrating climate resilience in our planning and decision-making processes to protect our investments by improving resilience. As part of our climate resilience strategy, we are considering climate change scenarios and will continue to assess climate change vulnerabilities resulting from potential future climate scenarios and rising sea-levels. We engaged Moody’s ESG Solutions (formerly branded as Four Twenty Seven), an independent provider of science-driven insights and analytics on climate risk, for its climate risk scoring to evaluate the forward-looking physical climate risk exposure of our entire portfolio. Event-driven (acute) and longer-term (chronic) physical risks that may result from climate change could have a material adverse effect on our properties, operations and business. We continue to evaluate the potential risks associated with climate change that could impact our portfolio and are taking proactive steps to plan for and/or mitigate such risks. Management’s role in assessing and managing these climate-related risks and initiatives spans multiple teams across our organization, including our executive leadership and our Sustainability, Risk Management, Development, Construction and Property Management departments. Our climate resilience strategy also includes training and implementation of emergency response plans and the engagement of our executives on climate change and other ESG aspects. All of these risk mitigation efforts are ultimately overseen by our Board’s Sustainability Committee.

 

 

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3    HUMAN CAPITAL AND SUSTAINABILITY

 

  PUBLIC SUSTAINABILITY GOALS AND PROGRESS

Our sustainability goals include reduction targets for energy, greenhouse gas emissions, water consumption and waste. In 2016, we achieved our first round of energy, emissions and water targets three years early. By resetting company-wide goals, we raise stakeholder awareness and make best efforts to drive continuous year-over-year, like-for-like key performance indicator improvement. We have adopted goals with the following specific time frames, metrics and targets below a 2008 baseline:(1)

 

LOGO

 

(1)

2020 is the most recent year for which complete and third-party assured energy and water data is available. 2020 data reflects the combined impacts of efficiency measures, renewable energy and reduced physical occupancy due to the COVID-19 pandemic.

(2)

This goal is “in progress” until Scope 3 calculations are complete.

  ESG REPORTING

A notable part of our commitment to sustainable development and operations is our commitment to transparent reporting of ESG performance indicators, as we recognize the importance of this information to investors, lenders and others in understanding how BXP assesses sustainability information and evaluates risks and opportunities. We publish an annual ESG report that is aligned with the Global Reporting Initiative reporting framework, United Nations Sustainable Development Goals and the SASB framework that includes our strategy, key performance indicators, annual like-for-like comparisons, achievements and historical sustainability data. This report is available on our website at http://www.bxp.com under the heading “Commitment,” but it is not incorporated by reference in this proxy statement or any other document we file with the SEC. In addition, we continue to work to further align our reporting with the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures, or TCFD, to disclose climate-related financial risks and opportunities.

 

 

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4    EXECUTIVE OFFICERS

 

EXECUTIVE OFFICERS

Biographies of our executive officers, other than Messrs. Thomas and Linde, are presented below, based on information furnished to us by each executive officer. Each executive officer holds office until the regular meeting of the Board of Directors following the next annual meeting of stockholders and until his or her successor is duly elected and qualified, or until his or her earlier resignation or removal. Information for Messrs. Thomas and Linde is included above under “Proposal I: Election of Directors – Nominees for Election” beginning on page 12.

 

  Name

   Age(1)    Position    Joined BXP

Raymond A. Ritchey

   71    Senior Executive Vice President    1980

Michael E. LaBelle

   58    Executive Vice President, Chief Financial Officer and Treasurer    2000

Bryan J. Koop

   63    Executive Vice President, Boston Region    1999

Peter V. Otteni

   48    Executive Vice President, Co-Head of the Washington, DC Region    2000

Robert E. Pester

   65    Executive Vice President, San Francisco, Region    1998

Hilary J. Spann

   46    Executive Vice President, New York Region    2021

John J. Stroman

   43    Executive Vice President, Co-Head of the Washington, DC Region    2005

Frank D. Burt

   63    Senior Vice President, Chief Legal Officer and Secretary    1986

Michael R. Walsh

   55    Senior Vice President, Chief Accounting Officer    1986

 

(1)

Ages are as of May 19, 2022, the date of the 2022 annual meeting.

 

   

 

 

LOGO

Raymond A. Ritchey

 

Senior Executive

Vice President

  

 

  Senior Executive Vice President of BXP since January 2016, with responsibility for all business development, leasing and marketing, as well as new opportunity origination in the Washington, DC area and directly oversees similar activities on a national basis

 

  Various positions at BXP since 1980, including Executive Vice President, Head of our Washington, DC Office and National Director of Acquisitions and Development and Senior Vice President and Co-Manager of our Washington, DC office

 

  Joined BXP in 1980, leading our expansion to become one of the dominant real estate firms in the Washington, DC metropolitan area

 

  A leading commercial real estate broker in the Washington, DC area with Coldwell Banker from 1977 to 1980

 

  President of the Board of Spanish Education Development (SED) Center

 

  Member of the Federal City Council and The Economic Club of Washington

 

  Founding member of the National Association of Industrial and Office Properties (NAIOP), Northern Virginia

 

  Professional honors include: ULI Lifetime Achievement Award; Man of the Year, CREW; Brendan McCarthy Award, GWCAR; Good Scout of the Year, Boy Scouts; Trendsetter of the Year, Transwestern; Developer of the Year (numerous organizations); and Junior Achievement Man of the Year

 

  Graduate of the U.S. Naval Academy and U.S. Naval Post Graduate School in Monterey, California

 

 

 

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4    EXECUTIVE OFFICERS

 

   

 

LOGO

 

Michael E. LaBelle

 

Executive Vice President, Chief Financial Officer and Treasurer

  

 

  Executive Vice President, Chief Financial Officer and Treasurer of BXP since January 2016, with responsibility for overseeing the finance, accounting, tax, internal audit and investor relations departments, as well as capital raising, treasury management, credit underwriting, financial strategy and planning

 

  Various positions at BXP since March 2000, including Senior Vice President, Chief Financial Officer and Treasurer from November 2007 to January 2016 and Senior Vice President, Finance from February 2005 to November 2007

 

  Former Vice President & Relationship Manager with Fleet National Bank from 1991 to 2000, with responsibility for financing large-scale commercial real estate developments

 

  Former Associate National Bank Examiner with the Office of the Comptroller of the Currency in New York City specializing in commercial real estate debt portfolio analysis and valuation in commercial banks located throughout the Mid-Atlantic and Northeastern United States

 

  Member of the National Advisory Board for the University of Colorado Real Estate Center

 

  Member of the Board of the Legacy Fund of the Medfield Foundation

 

  Received a BS in Economics from the University of Colorado

 

 

LOGO

 

Bryan J. Koop

 

Executive Vice President, Boston Region

  

 

  Executive Vice President, Boston Region of BXP since January 2016, with responsibility for overseeing the operation of our existing regional portfolio in the Boston area, which includes the Boston CBD, Cambridge and Waltham/Lexington submarkets and developing new business opportunities in the area

 

  Senior Vice President and Regional Manager of our Boston office from 1999 to 2016

 

  Various positions at Trammell Crow Company from 1982 to 1999, where his career covered high-rise office building leasing and the development of commercial office buildings and shopping centers, including Managing Director and Regional Leader for Trammell Crow Company’s New England region, with responsibility for all commercial office and shopping center operations

 

  Director of the Massachusetts Chapter of NAIOP, the Boston Green Ribbon Commission and the Kendall Square Association

 

  Former chairman of the Back Bay Association

 

 

  Received a BBA and an MBA from Texas Christian University

 

 

LOGO

 

Peter V. Otteni

 

Executive Vice President, Co-Head of the Washington, DC Region

 

 

  

 

  Executive Vice President, Co-Head of the Washington, DC Region of BXP since January 2022, with joint responsibility for business activities and direct responsibility for overseeing project development, construction and marketing activities for our Washington, DC region

 

  Various positions at BXP since 2000, including Vice President, Development from 2006 to 2016, Senior Vice President and Head of Development from 2017 to 2021 and Senior Vice President, Co-Head of the Washington, DC Region from April 2021 to December 2021

 

  Member of the Board of Directors of National Capital Area Region for the March of Dimes

 

  Received a BS in Commerce from the University of Virginia and an MBA from the University of North Carolina, Kenan-Flagler Business School

 

 

 

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4    EXECUTIVE OFFICERS

 

 

 

 

LOGO

Robert E. Pester

 

Executive Vice President, San Francisco Region

  

 

  Executive Vice President, San Francisco Region of BXP since January 2016, with responsibility for overseeing existing operations in San Francisco and our other Bay Area properties on the Peninsula and in Silicon Valley, and developing new business opportunities in the area

 

  Senior Vice President and Regional Manager of our San Francisco office from 1998 to 2016

 

  Executive Vice President and Chief Investment Officer of Bedford Property Investors, a REIT in Lafayette, California, for which he led the acquisitions and development program from 1994 to 1998

 

  President of Bedford Property Development, a private West Coast development concern that held more than $2 billion in real estate assets from 1989 to 1998

 

  A leading commercial real estate broker with Cushman & Wakefield in northern California, from 1980 to 1989, where he last served as Vice President

 

  Licensed California officer and real estate broker

 

  Received a BA in Economics and Political Science from the University of California at Santa Barbara

 

 

 

 

 

LOGO

Hilary J. Spann

 

Executive Vice President, New York Region

  

 

  Executive Vice President, New York Region of BXP since September 2021 and Head of the New York Region since January 2022 with responsibility for overseeing all aspects of our New York and Princeton, New Jersey activities, including development, acquisitions, leasing and building operations

 

  Various positions at CPP Investments from March 2016 to July 2021, including (1) Managing Director, Head of Real Estate Investments from July 2017 to July 2021, with responsibility for leading all aspects of the real estate business, including investment strategy, talent acquisition and management, and portfolio management, and (2) Managing Director, Head of United States Real Estate Investments from March 2016 to July 2017

 

  Various positions at the Global Real Assets Group at J.P. Morgan Asset Management, including Managing Director, Head of Northeast Acquisitions, from May 2001 to February 2016

 

  Governing trustee of the Urban Land Institute (“ULI”)

 

  Member of ULI’s Americas Executive Committee

 

  Director of the ULI Foundation

 

  Received a BS in Architecture and an MA of City Planning both from the College of Architecture at the Georgia Institute of Technology

 

  Studied architecture at the Ecole d’Architecture de Paris – La Villette

 

 

 

 

 

LOGO

John J. Stroman

 

Executive Vice President, Co-Head of the Washington, DC Region

 

  

 

  Executive Vice President, Co-Head of the Washington, DC Region of BXP since January 2022, with joint responsibility for business activities and direct responsibility for overseeing the leasing, legal and property management activities for our Washington, DC region

 

  Various positions at BXP since 2005, including Vice President, Development from 2011 to 2019, Vice President, Leasing from 2019 to 2020, Senior Vice President Leasing from 2020 to April 2021 and Senior Vice President, Co-Head of the Washington, DC Region of BXP from April 2021 to December 2021

 

  Received a BS in Civil Engineering from Johns Hopkins University and an MBA, Real Estate Development from the University of North Carolina, Kenan-Flagler Business School

 

 

 

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4    EXECUTIVE OFFICERS

 

   

 

 

 

LOGO

Frank D. Burt

 

Senior Vice President, Chief Legal Officer and Secretary

  

 

  Senior Vice President, Chief Legal Officer and Secretary of BXP since 2019 and Senior Vice President, General Counsel and Secretary of BXP from 2003 until 2019, with responsibility for overseeing the legal and risk management departments

 

  Various positions at BXP since 1986; represented BXP in the acquisition of the Prudential Center in Boston and the Embarcadero Center in San Francisco, as well as in the development activities at the Prudential Center and at Salesforce Tower in San Francisco

 

  Former attorney in the real estate department at Nutter, McClennen & Fish in Boston

 

  Member of the Board of Governors of American College of Real Estate Lawyers and the Boston Bar Association

 

  Speaker for the American College of Real Estate Lawyers, the Association of Corporate Counsel, Massachusetts Continuing Legal Education, NAIOP and Nareit

 

  Received a BA, magna cum laude, from Brown University and a JD, cum laude, from the University of Pennsylvania Law School

 

 

 

 

LOGO

Michael R. Walsh

 

Senior Vice President, Chief Accounting Officer

  

 

  Senior Vice President, Chief Accounting Officer of BXP since May 2016, with responsibility for overseeing financial reporting, property accounting and tax compliance and providing transactional support on capital markets activity

 

  Executive Vice President, Chief Financial Officer and Treasurer of Paramount Group, Inc., a REIT focused on Class A office properties in New York City, Washington, DC and San Francisco, from March 2015 to March 2016

 

  Various positions at BXP from 1986 to 2015, including Senior Vice President, Finance and Capital Markets with responsibility for overseeing its accounting, financial reporting, financial analysis and tax functions and participated extensively in investor relations matters

 

  Co-chair of Nareit’s Accounting Committee

 

  Member of Nareit’s Best Financial Practices Council

 

  Received a BS, magna cum laude, from Eastern Nazarene College

 

 

 

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Table of Contents
5    PRINCIPAL AND MANAGEMENT STOCKHOLDERS

 

PRINCIPAL AND MANAGEMENT STOCKHOLDERS

The table below shows the amount of BXP common stock and units of partnership interest in our Operating Partnership beneficially owned as of February 4, 2022 by:

 

   

each director;

 

   

each of our named executive officers (“NEOs”);

 

   

all directors and executive officers of BXP as a group; and

 

   

each person known by us to be the beneficial owner of more than 5% of our outstanding common stock.

On February 4, 2022, there were:

 

   

156,679,794 shares of our common stock outstanding;

 

   

16,554,998 common units of partnership interest in our Operating Partnership (“common units”) outstanding (other than the common units held by Boston Properties, Inc.), each of which is redeemable for one share of BXP common stock (if BXP elects to issue common stock rather than pay cash upon such redemption);

 

   

1,711,635 long term incentive units of partnership interest in our Operating Partnership (“LTIP units”) outstanding that were issued as part of our long-term incentive (“LTI”) program, excluding LTIP units issued pursuant to 2020 Multi-Year Long-Term Incentive Program (“MYLTIP”) awards, 2021 MYLTIP awards and 2022 MYLTIP awards, each of which, upon the satisfaction of certain performance and service conditions, is convertible into one common unit; and

 

   

83,792 deferred stock units outstanding.

All references in this proxy statement to LTIP units exclude LTIP units issued pursuant to 2020 MYLTIP awards, 2021 MYLTIP awards and 2022 MYLTIP awards because the three-year performance periods of these awards had not ended by February 4, 2022. LTIP units issued pursuant to 2020 MYLTIP awards, 2021 MYLTIP awards and 2022 MYLTIP awards are collectively referred to herein as “Unearned Performance Awards.” None of our directors or NEOs beneficially owned any preferred units or shares of our preferred stock.

 

 

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5    PRINCIPAL AND MANAGEMENT STOCKHOLDERS

 

    Common Stock     Common
Stock and Units
 

Name and Address of Beneficial Owner*

  Number of
Shares
Beneficially
Owned(1)
   

Percent of

Common

Stock (2)

   

Number of

Shares

and Units

Beneficially

Owned (1)

   

Percent of

Common

Stock and

Units (3)

 

Directors and Named Executive Officers(4)

 

Kelly A. Ayotte

    333       **       5,514       **  

Bruce W. Duncan(5)

    21,000       **       28,244       **  

Carol B. Einiger(6)

    30,882       **       41,136       **  

Diane J. Hoskins

    5,434       **       5,434       **  

Mary E. Kipp

    542       **       542       **  

Joel I. Klein

    11,123       **       20,467       **  

Douglas T. Linde(7)

    224,655       **       562,325       **  

Matthew J. Lustig

    10,130       **       22,332       **  

Owen D. Thomas

    63,836       **       464,700       **  

David A. Twardock

    9,564       **       9,564       **  

William H. Walton, III

    2,550       **       6,684       **  

Raymond A. Ritchey(8)

          **       302,328       **  

Michael E. LaBelle

    11,007       **       149,153       **  

Bryan J. Koop

    18,019       **       97,488       **  

All directors and executive officers as a group (20 persons)(4)

    468,751       **       1,914,620       1.09%  

5% Holders

                               

The Vanguard Group(9)

    22,978,972       14.67%       22,978,972       13.13%  

BlackRock, Inc.(10)

    17,343,626       11.07%       17,343,626       9.91%  

Norges Bank (The Central Bank of Norway)(11)

    13,037,554       8.32%       13,037,554       7.45%  

TCI Fund Management Limited

and Christopher Hohn(12)

    12,458,851       7.95%       12,458,851       7.12%  

State Street Corporation(13)

    10,427,686       6.66%       10,427,686       5.96%  

 

*

Unless otherwise indicated, the address is c/o Boston Properties, Inc., 800 Boylston Street, Suite 1900, Boston, Massachusetts 02199-8103.

 

**

Less than 1%.

 

(1)

The number of shares of BXP common stock “beneficially owned” by each beneficial owner is determined under rules issued by the SEC. This information is not necessarily indicative of beneficial ownership for any other purpose. “Number of Shares Beneficially Owned” includes (a) shares of BXP common stock that may be acquired upon the exercise of options that are exercisable on or within 60 days after February 4, 2022 and (b) the number of shares of BXP common stock issuable to directors upon settlement of deferred stock units on or within 60 days after February 4, 2022. The “Number of Shares and Units Beneficially Owned” includes all shares included in the “Number of Shares Beneficially Owned” column plus the number of shares of BXP common stock for which common units and LTIP units may be redeemed (assuming, in the case of LTIP units, that they have first been converted into common units). Under the limited partnership agreement of the Operating Partnership, the holders of the common units and LTIP units (assuming conversion in full into common units, as applicable) have the right to redeem the units for cash or, at BXP’s option, shares of BXP common stock, subject to certain conditions. Except as otherwise noted, each beneficial owner has sole voting and investment power over the shares and units. Holders of common units, LTIP units and deferred stock units are not entitled to vote such units on any of the matters presented at the 2022 annual meeting.

 

(2)

The total number of shares outstanding used in calculating this percentage assumes (a) the exercise of all options to acquire shares of BXP common stock that are exercisable on or within 60 days after February 4, 2022 held by the beneficial owner and that no options held by other beneficial owners are exercised and (b) the conversion into shares of BXP common stock of all deferred stock units held by the beneficial owner and that no deferred stock units held by other beneficial owners are converted.

 

 

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5    PRINCIPAL AND MANAGEMENT STOCKHOLDERS

 

(3)

The total number of shares outstanding used in calculating this percentage assumes (a) that all common units and LTIP units are presented (assuming conversion in full into common units, if applicable) to the Operating Partnership for redemption and are acquired by BXP for shares of BXP common stock, (b) does not separately include outstanding common units held by BXP, as these common units are already reflected in the denominator by the inclusion of all outstanding shares of common stock, (c) the exercise of all options to acquire shares of BXP common stock that are exercisable on or within 60 days after February 4, 2022 held by the beneficial owner and that no options held by other beneficial owners are exercised and (d) the conversion into shares of BXP common stock of all deferred stock units the receipt of which has not been deferred to a date later than 60 days after February 4, 2022.

 

(4)

Includes the number of shares of common stock, shares of common stock underlying exercisable stock options and deferred stock units shown in the table below. Also includes, only under the “Number of Shares and Units Beneficially Owned” column, the number of common units and LTIP units shown in the table below. Excludes Unearned Performance Awards.

 

  Name   Common Stock(a)     Stock Options     Deferred Stock
Units(b)
    Common Units     LTIP Units(a)  
   

Kelly A. Ayotte

                333             5,181  

Bruce W. Duncan

    21,000                         7,244  

Carol B. Einiger

    8,000             22,882             10,254  

Diane J. Hoskins

    5,434                          

Mary E. Kipp

    542                          

Joel I. Klein

                11,123             9,344  

Douglas T. Linde

    183,563       41,092                   337,670  

Matthew J. Lustig

                10,130             12,202  

Owen D. Thomas

    9,554       54,282                   400,864  

David A. Twardock

    8,895             669              

William H. Walton, III

                2,550             4,134  

Raymond A. Ritchey

                      130,570       171,758  

Michael E. LaBelle

    11,007                         138,146  

Bryan J. Koop

    9,752       8,267                   79,469  

All directors and executive officers as a group (20 persons)

    317,423       103,641       47,687       136,360       1,309,509  

 

  (a)

Includes the following unvested shares of common stock and unvested LTIP units: Ms. Ayotte — 1,285 LTIP units; Mr. Duncan — 1,285 LTIP Units; Ms. Einiger — 1,285 LTIP units; Ms. Hoskins — 1,285 shares of common stock; Ms. Kipp — 542 shares of common stock; Mr. Klein — 1,285 LTIP units; Mr. Linde — 78,065 LTIP units; Mr. Lustig — 1,285 LTIP units; Mr. Thomas — 114,287 LTIP units; Mr. Twardock — 1,285 shares of common stock; Mr. Walton — 1,285 LTIP units; Mr. Ritchey — 9,992 LTIP units; Mr. LaBelle — 26,615 LTIP units and 929 shares of common stock; and Mr. Koop — 20,468 LTIP units.

 

  (b)

Excludes deferred stock units, the settlement of which has been deferred to a date later than 60 days after February 4, 2022 and will be paid out in a lump sum on a specified date or in ten annual installments following the date of the director’s retirement pursuant to deferral elections as follows: Ms. Ayotte — 2,993, Mr. Duncan — 3,625, Ms. Kipp — 29, Mr. Twardock — 29,458 and all directors and executive officers as a group — 36,105 (see “Compensation of Directors — Deferred Compensation Program” on page 55).

 

(5)

Includes 21,000 shares of common stock held indirectly through a trust of which Mr. Duncan is the beneficiary and trustee.

 

(6)

Includes 8,000 shares of common stock held indirectly through a trust of which Ms. Einiger is the beneficiary and trustee.

 

(7)

Includes (x) 700 shares of common stock held by Mr. Linde’s spouse for which Mr. Linde has shared voting and dispositive power and (y) 2,100 shares of common stock held by Mr. Linde’s children.

 

(8)

Includes, only under the “Number of Shares and Units Beneficially Owned” column, (x) 31,265 common units held by a trust of which Mr. Ritchey is a beneficiary and Mr. Ritchey’s spouse is the sole trustee and (y) 10,500 common units held by a grantor retained annuity trust of which Mr. Ritchey is the beneficiary and trustee.

 

(9)

Information regarding The Vanguard Group (“Vanguard”) is based solely on a Schedule 13G/A filed by Vanguard with the SEC on February 9, 2022. Vanguard’s address is 100 Vanguard Blvd., Malvern, PA 19355. The Schedule 13G/A indicates that Vanguard does not have sole voting power with respect to any shares of common stock and has shared voting power with respect to 384,471 shares of common stock, sole dispositive power with respect to 22,234,178 shares of common stock and shared dispositive power with respect to 744,794 shares of common stock.

 

 

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5    PRINCIPAL AND MANAGEMENT STOCKHOLDERS

 

(10)

Information regarding BlackRock, Inc. (“BlackRock”) is based solely on a Schedule 13G/A filed by BlackRock with the SEC on January 27, 2022. BlackRock’s address is 55 East 52nd Street, New York, NY 10055. The Schedule 13G/A indicates that BlackRock has sole voting power with respect to 14,959,458 shares of common stock and sole dispositive power with respect to all of the shares of common stock.

 

(11)

Information regarding Norges Bank (The Central Bank of Norway) (“Norges Bank”) is based solely on a Schedule 13G/A filed by Norges Bank with the SEC on February 1, 2021. Norges Bank’s address is Bankplassen 2, PO Box 1179 Sentrum, NO 0107 Oslo, Norway. The Schedule 13G/A indicates that Norges Bank has sole voting and dispositive power with respect to all of the shares of common stock.

 

(12)

Information regarding TCI Fund Management Limited and Christopher Hohn is based solely on a Schedule 13G/A filed jointly by TCI Fund Management Limited and Christopher Hohn with the SEC on February 14, 2022. The address for each of TCI Fund Management Limited and Christopher Hohn is 7 Clifford Street, London, W1S 2FT, United Kingdom. The Schedule 13G/A indicates that each of TCI Fund Management Limited and Christopher Hohn has shared voting and dispositive power with respect to all of the shares of common stock.

 

(13)

Information regarding State Street Corporation (“State Street”) is based solely on a Schedule 13G/A filed by State Street with the SEC on February 10, 2022. State Street’s address is State Street Financial Center, One Lincoln Street, Boston, MA 02111. The Schedule 13G/A indicates that State Street does not have sole voting or dispositive power with respect to any shares of common stock and has shared voting with respect to 8,362,648 shares of common stock and shared dispositive power with respect to 10,388,227 shares of common stock.

 

 

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Table of Contents
6    COMPENSATION OF DIRECTORS

 

COMPENSATION OF DIRECTORS

At our 2019 annual meeting of stockholders, our stockholders approved the Director Compensation Plan, effective January 1, 2019. The Director Compensation Plan sets forth the cash and equity compensation that is paid to our non-employee directors in a specific, formulaic manner.

Directors who are also employees of BXP or any of its subsidiaries receive no additional compensation for their services as directors.

Historically, our Board of Directors has not chosen to review the compensation payable to our non-employee directors on an annual basis; instead, it reviews the compensation every two or three years and when circumstances otherwise dictate. As a result, the current program has remained the same for calendar years 2019, 2020 and 2021.

In 2022, our Board approved updates to the compensation payable pursuant to the Director Compensation Plan. These changes implement recommendations that our Compensation Committee made to the full Board based on a comprehensive review of the structure and amount of our existing compensation for non-employee directors. For this review, our Compensation Committee engaged FW Cook.

Our Board of Directors believes that the structure and amounts of the new compensation program are fair and in the best interests of all stockholders of the Company. Nevertheless, because of the interests that our non-employee directors have in the establishment of the compensation they receive, our Board determined to seek stockholder approval for the new Director Compensation Plan. Therefore, please see “Proposal 3: Approval of the Boston Properties, Inc. Non-Employee Director Compensation Plan” beginning on page 112 of this proxy statement for more detail on the terms and conditions of the Director Compensation Plan. If our stockholders approve the new plan, it will be effective retroactively to January 1, 2022.

COMPONENTS OF DIRECTOR COMPENSATION

Non-employee directors do not receive meeting attendance fees for any meeting of our Board of Directors or a committee thereof that he or she attends.

  CASH RETAINERS

During 2021, we paid our non-employee directors the following cash retainers for Board and committee service under the Director Compensation Plan:

 

Role

   Annual Cash
Retainer(1)
     Committee Chair
Retainer(1)(2)
     Committee Member
Retainer(1)
 

All Non-Employee Directors for Board Services

     $85,000                    

Chairman of the Board(2)

     $100,000                    

Audit Committee

              $20,000        $15,000  

Other Standing Committees(3)

              $15,000        $10,000  

 

(1)

The sum of all cash retainers are payable in quarterly installments in arrears, subject to proration for periods of service less than a full quarter in length.

 

(2)

The retainer payable to the Chairman is in addition to all other retainers to which the Chairman may be entitled and the retainer to each committee chair is in addition to the retainer payable to all members of the committee.

 

(3)

The term “Other Standing Committees” includes the Compensation and NCG Committees.

 

 

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6    COMPENSATION OF DIRECTORS

 

Non-employee directors also are reimbursed for reasonable expenses incurred to attend Board of Directors and committee meetings.

  EQUITY COMPENSATION

The Director Compensation Plan provided for grants of equity to non-employee directors in 2021 as follows:

 

   

Annual Grant. Each continuing non-employee director received, on the fifth business day after the annual meeting of stockholders, an annual equity award with an aggregate value of $150,000.

 

   

Initial Grant. Any new non-employee director that was appointed to our Board of Directors other than at an annual meeting of stockholders received, on the fifth business day after the appointment, an initial equity award with an aggregate value of $150,000 (prorated based on the number of months from the date of appointment to the first anniversary of the Company’s most recently held annual meeting of stockholders).

 

   

Annual and initial equity awards were made in the form of shares of restricted common stock or, if elected by the director, LTIP units (or a combination of both).

 

   

The actual number of shares of restricted common stock or LTIP units that we granted was determined by dividing the fixed value of the grant by the closing market price of our common stock on the NYSE on the grant date.

 

   

Annual and initial grants of LTIP units and restricted common stock vest 100% on the earlier of (1) the first anniversary of the grant date and (2) the date of the next annual meeting of stockholders.

Accordingly, on May 27, 2021, the last reported sale price of a share of our common stock on the NYSE was $116.65, and we granted each of Mses. Ayotte, Einiger, Dykstra and Hoskins and Messrs. Duncan, Klein, Lustig, Twardock and Walton 1,285 LTIP units or shares of restricted common stock. Additionally, on December 28, 2021, the last reported sale price of a share of our common stock on the NYSE was $115.31 and we granted Ms. Kipp 542 shares of restricted common stock.

DEFERRED COMPENSATION PROGRAM

In accordance with our Amended and Restated Rules and Conditions for Directors’ Deferred Compensation Program (the “Directors’ Deferred Compensation Program”), non-employee directors may elect to defer all cash retainers otherwise payable to them and to receive the deferred cash compensation in the form of our common stock or in cash following their retirement from our Board of Directors. Each electing director is credited with the number of deferred stock units determined by dividing the amount of the cash compensation deferred during each calendar quarter by the closing market price of our common stock on the NYSE on the last trading day of the quarter. Hypothetical dividends on the deferred stock units are “reinvested” in additional deferred stock units based on the closing market price of the common stock on the cash dividend payment date.    

Directors may elect to receive payment of amounts in their accounts either in (x) a lump sum of shares of our common stock equal to the number of deferred stock units in a director’s account or (y) ten annual installments following the director’s retirement from our Board of Directors. In addition, non-employee directors who elect a deferred payout following their retirement from the Board may elect to change their notional investment from BXP common stock to a deemed investment in one or more measurement funds. This election to convert may only be made after the director’s service on the Board ends, the conversion date must be at least 180 days after the latest issuance date of deferred stock units credited to the director’s account, the election is irrevocable and the director must convert 100% of his or her deferred stock account if any is converted. Payment of a director’s account that has been converted to measurement funds will be in cash instead of shares of our common stock. The measurement funds available to directors are the same as those available to our executives under our Nonqualified Deferred Compensation Plan. See “Compensation of Executive Officers – Nonqualified Deferred Compensation in 2021” on page 98.

 

 

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6    COMPENSATION OF DIRECTORS

 

DIRECTOR STOCK OWNERSHIP GUIDELINES

 

Our Board believes it is important to align the interests of the directors with those of the stockholders and for directors to hold equity ownership positions in BXP. Accordingly, each non-employee director is expected to retain an aggregate number of shares of our common stock, deferred stock units (and related dividend equivalent rights) in the Company, and LTIP units and common units in the Operating Partnership, whether vested or not, equal to at least five (5) times the value of the then current annual cash retainer paid to non-employee directors for their service on the Board, without respect to service on committees of the Board or as lead independent director or Chairman, as applicable. Until such director complies with the ownership guidelines set forth above, each non-employee director is expected to retain all equity awards granted by the Company or the Operating Partnership (less amounts sufficient to fund any taxes owed relating to such equity awards). The deferred stock units (and related dividend equivalent rights) in the Company and LTIP units and common units in the Operating Partnership shall be valued by reference to the market price of the number of shares of our common stock issuable upon the settlement or exchange  

 

Director Stock Ownership Requirement

 

5x

annual cash retainer

 

 

As of December 31, 2021, on average, our non-employee directors held common stock, deferred stock units and LTIP units with a market value of

 

26x

the annual cash retainer

 

of such units assuming that all conditions necessary for settlement or exchange have been met. For shares of our common stock or equity valued by reference to our common stock for purposes of these ownership guidelines, the market price of our common stock used to value such equity shall be the greater of (1) the market price on the date of purchase or grant of such equity or (2) the market price as of the date compliance with these ownership guidelines is measured.

DIRECTOR COMPENSATION TABLE    

The following table summarizes the compensation earned by our non-employee directors during the year ended December 31, 2021.

 

Name

  

Fees Earned

or Paid in

Cash(1)

    

Stock

Awards(2)

     Total  

Kelly A. Ayotte

   $ 120,000      $ 135,000      $ 255,000  

Bruce W. Duncan

   $ 110,000      $ 135,000      $ 245,000  

Karen E. Dykstra(3)

   $ 97,011      $ 150,000      $ 247,011  

Carol B. Einiger

   $ 102,899      $ 135,000      $ 237,899  

Diane J. Hoskins

   $ 95,000      $ 150,000      $ 245,000  

Mary E. Kipp(3)

   $ 3,261      $ 62,500      $ 65,761  

Joel I. Klein

   $ 185,000      $ 135,000      $ 320,000  

Matthew J. Lustig

   $ 110,000      $ 135,000      $ 245,000  

David A. Twardock

   $ 130,000      $ 150,000      $ 280,000  

William H. Walton, III

   $ 95,000      $ 135,000      $ 230,000  

 

(1)

Mses. Ayotte, Einiger and Kipp and Messrs. Duncan, Klein, Lustig, Twardock and Walton deferred the cash fees they earned during 2021 and received deferred stock units in lieu thereof. The following table summarizes the deferred stock units credited to the director accounts during 2021.

 

 

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6    COMPENSATION OF DIRECTORS

 

Name

  

Deferred Stock

Units Earned

During 2021(#)

 

Kelly A. Ayotte

     1,092.61  

Bruce W. Duncan

     1,001.33  

Carol B. Einiger

     934.83  

Mary E. Kipp

     28.26  

Joel I. Klein

     1,685.97  

Matthew J. Lustig

     1,001.33  

David A. Twardock

     1,186.59  

William H. Walton, III

     864.40  

 

(2)

Represents the total fair value of common stock and LTIP unit awards granted to non-employee directors in 2021, determined in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 718 “Compensation—Stock Compensation” (“ASC Topic 718”), disregarding for this purpose the estimate of forfeitures related to service-based vesting conditions. A discussion of the assumptions used in calculating these values can be found in Note 16 to our 2021 audited financial statements beginning on page 173 of our Annual Report on Form 10-K for the year ended December 31, 2021 included in the annual report that accompanied this proxy statement. Our non-employee directors had the following unvested equity awards outstanding as of December 31, 2021:

 

Name

   LTIP Units(#)      Common
Stock (#)
 

Kelly A. Ayotte

     1,285         

Bruce W. Duncan

     1,285         

Karen E. Dykstra

             

Carol B. Einiger

     1,285         

Diane J. Hoskins

            1,285  

Mary E. Kipp

            542  

Joel I. Klein

     1,285         

Matthew J. Lustig

     1,285         

David A. Twardock

            1,285  

William H. Walton, III

     1,285         

 

(3)

On December 16, 2021, Ms. Dykstra resigned from the Board of Directors, effective December 20, 2021. On December 20, 2021, the Board appointed Ms. Kipp as a director of the Company to fill the vacancy created by the resignation of Ms. Dykstra. Accordingly, each of Ms. Dykstra’s and Ms. Kipp’s 2021 compensation was prorated for her respective partial year of Board and committee service.

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

COMPENSATION DISCUSSION AND ANALYSIS

This “Compensation Discussion and Analysis,” or “CD&A,” sets forth our philosophy and objectives regarding the compensation of our named executive officers (“NEOs”), including how we determine the elements and amounts of executive compensation. When we use the term “Committee” in this CD&A, we mean the Compensation Committee of the Board of Directors. Our NEOs for 2021 were:

 

 

 NAME

 

  

 

TITLE

 

 

 Owen D. Thomas

  

 

Chief Executive Officer

 

 Douglas T. Linde

  

 

President

 

 Raymond A. Ritchey

  

 

Senior Executive Vice President

 

 Michael E. LaBelle

  

 

Executive Vice President, Chief Financial Officer & Treasurer

 

 Bryan J. Koop

  

 

Executive Vice President, Boston Region

I. OVERVIEW

Our NEOs have demonstrated exceptional leadership since the beginning of the pandemic as they navigated the evolving economic and business challenges caused by the COVID-19 pandemic, including global supply-chain disruptions and inflationary pressures. Despite these challenges and the resulting economic volatility that dominated the year, our executive team, led by our NEOs, continued to successfully execute BXP’s strategies in 2021. Our NEOs deftly guided BXP through the recovery and led the safe return to the office for our employees and tenants. They also produced strong leasing results and growth in diluted Funds from Operations (“FFO”), and strengthened our commitments to our ESG priorities, entered new markets and executed on the development pipeline. The Committee remains proud of the extraordinary leadership demonstrated by our NEOs.

  2021 PERFORMANCE HIGHLIGHTS

The following highlights our strong performance in 2021:(1)

 

Diluted FFO per Share(2)(3)

Growth of

4.3%

 

LOGO

   

  

 

Leased

5.1 Million

Square Feet

 

LOGO

 

  

 

  

 

26.2%

Total Stockholder

Return

 

LOGO

                    
                

Delivered

1.7 Million

Square Feet of Developments

that are 98% leased

 

LOGO

     

Same-Property NOI(3)

Growth of

5.9%

 

LOGO

       

Same-Property NOI – Cash(3)

Growth of

5.1%

 

LOGO

                    
                

Newsweek’s America’s Most Responsible Company List

(#1 in real estate industry;

#31 overall out of 500 companies)

 

LOGO

 

  

 

  

 

Actively Developing

0.9 Million

Square Feet of Life Sciences

Developments

 

LOGO

 

  

 

  

 

Issued

$1.7 Billion

in Green Bonds

 

LOGO

 

(1)

Data as of December 31, 2021.

(2)

Represents year-over-year growth in diluted FFO per share.

(3)

For disclosures required by Regulation G, refer to Appendix A to this proxy statement.

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

  EXECUTIVE COMPENSATION PROGRAM

Compensation Philosophy

Our executive compensation program covering our NEOs is designed to:

 

  Ø

attract and retain talented and experienced executives in the commercial real estate markets in which we operate,

 

  Ø

set total compensation opportunities to be competitive with companies in our benchmarking peer group (see “III. Determining Executive Compensation – Compensation Advisor’s Role & Benchmarking Peer Group – Benchmarking Peer Group”), considering the skill sets required to implement our strategy and the market for such talent,

 

  Ø

align our NEOs’ compensation with the Company’s strategy, business objectives and the creation of long-term value for our stockholders without encouraging unnecessary or excessive risk-taking,

 

  Ø

provide NEOs incentives to achieve key corporate and regional goals by linking formulaically annual cash incentive awards to the achievement of those goals, as well as goals set for each individual, and

 

  Ø

provide a majority of target total direct compensation opportunity for the NEOs in the form of long-term incentive (“LTI”) equity awards, a majority of which are performance-based (55% for our CEO) and the value of which is dependent on BXP’s total stockholder return (“TSR”) over a three-year period, both on a relative basis compared to the Company’s most directly comparable peers and on an absolute basis.

Given the competitive nature of the market for labor talent and the fact that many of BXP’s competitors are private enterprises, the Committee reviews and evaluates the competitiveness of our executive compensation program annually to ensure it is designed to achieve the Committee’s objectives.

 

 

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  COMPONENTS OF EXECUTIVE COMPENSATION

 

  COMPONENT    WHY WE PAY IT

Base Salary

  

Provide a fixed, competitive level of cash compensation that reflects the NEO’s leadership role and the market rate for the executive’s experience and responsibilities

 

Annual Cash Incentive

  

Reward NEOs for achievement of annual financial, operational and strategic goals that drive stockholder value, thereby aligning our NEOs’ interests with those of our stockholders

 

  Annual cash bonuses for each NEO are linked to performance against goals in three, weighted categories and, each NEO has target and maximum bonus opportunities

 

Performance-Based Equity (MYLTIP)

  

Align the interests of our NEOs with those of our stockholders

 

Motivate, retain and reward NEOs to achieve multi-year strategic business objectives that drive both relative and absolute TSR outperformance

 

  Create a direct link between executive pay and relative and absolute TSR performance

 

  Enhance executive officer retention with 100% vesting after completion of three-year performance period (i.e., “cliff vesting”), with one additional year of post-vesting transfer restrictions

 

Time-Based Equity

  

Align the interests of our NEOs with those of our stockholders

 

Motivate, retain and reward NEOs to achieve multi-year strategic business objectives that drive absolute TSR outperformance

 

  Create a direct link between executive pay and absolute TSR performance

 

  Enhance executive officer retention with time-based, multi-year vesting schedules for equity incentive awards

 

 

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

  COMPENSATION GOVERNANCE PRACTICES

The following table highlights key features of our executive compensation program that demonstrate the Company’s ongoing commitment to promoting stockholder interests through sound compensation governance practices.

 

WHAT WE DO   WHAT WE DON’T DO

 

LOGO

  93% of CEO’s total target compensation at risk. The vast majority of total compensation is variable (i.e., not guaranteed); salaries comprise a small portion of each NEO’s total compensation opportunity.  

 

LOGO

  No tax gross-ups. We do not provide any new executive with tax gross-ups with respect to payments made in connection with a change of control.

 

LOGO

  Bonus pay linked to pre-established goals. Annual cash bonuses for our NEOs are linked to performance against goals in three categories, and each NEO has target and maximum bonus opportunities.  

 

LOGO

  No hedging, pledging or short-sales. We do not allow hedging, pledging or short-sales of Company securities.

 

LOGO

  Two-thirds of target compensation paid in equity. We align our NEOs with our long-term investors by awarding 2/3 of our NEOs’ total target compensation in the form of equity; for our CEO, 55% of the equity is in the form of performance-based MYLTIP awards (for all other NEOs, 50% is performance-based).  

 

LOGO

  Risk mitigation factors in compensation policies and procedures. Our compensation policies do not encourage unnecessary or excessive risk taking by our NEOs; incentive compensation is not based on a single performance metric, and we do not have guaranteed minimum payouts.

 

LOGO

  Capped bonus and LTI awards. We have caps on annual and long-term incentives.  

 

LOGO

  No stock option repricing. We do not allow for repricing of stock options.

 

LOGO

  Clawback policy. We have a clawback policy that allows for the recovery of previously paid incentive compensation in the event of a financial restatement.  

 

LOGO

  No full dividends on unearned performance-based LTI awards. Recipients of performance-based LTI equity awards receive only 10% of full dividends unless and until earned.

 

LOGO

  Stock ownership guidelines for all executives. We have robust stock ownership guidelines for our executives (for our CEO, 6.0x base salary).        

 

LOGO

  Independent compensation consultant. We engage an independent compensation consultant to advise the Committee.    

  2021 COMPENSATION DECISIONS AND HIGHLIGHTS

Despite the continued pandemic-related challenges and volatility in 2021, the Committee used the same approach to managing the pandemic’s impact on our 2021 Annual Incentive Plan (“AIP”) as it did for the 2020 AIP (when final bonus payouts ranged from 50% to 75% of target)—i.e., the Committee did not change any of the three categories (diluted FFO per share, leasing and business & individual goals) or the specific targets within each category after they were established. Instead, the Committee prioritized maintaining alignment between our NEOs’ compensation and our investors’ experiences during the pandemic. Our NEOs met those challenges and exceeded the 2021 targets set for the diluted FFO per share and leasing categories, and each NEO met or exceeded a substantial majority of the Business & Individual goals established for him (see “– II. Executive Compensation Program & 2021 Results – Cash Compensation – 2021 Annual Incentive Plan – 2021 NEO Scorecards & Results”). Because each of the NEOs exceeded the targets set for each of the three categories of the 2021 AIP, the cash bonuses paid to our NEOs for 2021 ranged between 129.5%—137.5% of their target bonus amounts.

 

 

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The Committee also noted that BXP’s TSR for the one-year, three-year and five-year periods ending December 31, 2021 placed it at the 98th, 97th and 100th percentile, respectively, among its most directly comparable office REIT peers. (For a list of these peers and the reasons they were selected, see “– II. Executive Compensation Program & 2021 Results – LTI Equity Compensation – Performance-Based Equity Awards – Multi-Year Long-Term Incentive Program (MYLTIP) – 2021 MYLTIP” below.) Although the Committee does not determine target opportunities or actual compensation awards based directly on BXP’s absolute or relative TSR, the Committee believes they validate the appropriateness of the targets set for each component and the amounts paid to our NEOs for 2021.

One-, Three- & Five-Year Annualized Total Stockholder Returns

 

         Annualized Total Stockholder Returns    
(TSR) as of December 31, 2021
  Company    1-Year    3-Year    5-Year

Douglas Emmett, Inc.

       18.8%        2.7%          1.3%

Empire State Realty Trust

       -3.5%        -12.6%          -13.2%

Hudson Pacific Properties, Inc.

       6.8%        -1.8%          -3.4%

JBG Smith Properties

       -5.4%        -3.6%          n/a   

Kilroy Realty Corporation

       19.3%        4.9%          0.8%

Paramount Group, Inc.

       -4.9%        -9.6%          -9.4%

SL Green Realty Corp.

       27.2%        2.9%          -3.1%

Vornado Realty Trust

       17.8%        -6.9%          -8.7%

75th Percentile

       18.9%        2.8%          -1.1%

Median

       12.3%        -2.7%          -3.4%

25th Percentile

       -3.9%        -7.6%          -9.1%

Boston Properties, Inc.

       26.2%        4.5%          1.5%

Relative Percentile Rank

       98%-ile        97%-ile          100%-ile

Source: S&P Capital IQ

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

 

2021 COMPENSATION DECISION AND HIGHLIGHTS

 

Ø No change in base salary for any of the NEOs

 

  Ø  No modification to any outstanding equity plans or awards, including MYLTIP awards granted in 2021

 

Ø Maintained the design and structure of performance-based MYLTIP

 

Ø Maintained LTI equity allocation for our CEO of 55% performance-based and 45% time-based equity

 

  Ø  Awarded cash bonuses for 2021 to our NEOs ranging between 129.5%—137.5% of their target bonus amounts

 

  Ø   Below-target payout of 69% of target under the 2019 MYLTIP (covering February 4, 2019—February 4, 2022); CEO realized 63% of the aggregate amount reported and expensed for that award

 

  Ø  CEO has realized 64% of the reported pay under the five most recently completed MYLTIPs (2015-2019)

 

 

    

 

       
LOGO  

 

% Variable Pay(1)

 

 

 

% Paid in Equity(1)

 

 

 

Cash Bonus
as % of Target

 

 

 

2019 MYLTIP Payout   
as % of
Target(2)

 

 

93%

 

75%

 

 

137.5%

 

 

69%

 

 

    

LOGO  

% Variable Pay(1)

 

 

% Paid in Equity(1)

 

 

 

Cash Bonus

as % of Target

 

 

 

2019 MYLTIP Payout   
  as % of Target(2)

 

 

91%

 

67%

 

 

 

129.5% - 137.5%

 

 

69%

 

 

  (1)

Percentages based on 2021 target total direct compensation.

  (2)

On February 4, 2022, the three-year performance period for the Company’s 2019 MYLTIP awards ended.

  2021 SAY-ON-PAY VOTE & INVESTOR OUTREACH

Say-on-Pay Vote

At our 2021 annual meeting of stockholders, approximately 90% of the votes cast supported our “Say-on-Pay” advisory vote. We believe this outcome reflects continued investor support for our executive compensation program, including the changes our Committee made in 2019, based on investor feedback, to implement a more objective, formulaic annual bonus plan starting in 2020. The 2021 compensation year was the second year in which the changes were effective. We believe the continued support of our stockholders is a direct result of our commitment to actively engage with our investors on all matters, including executive compensation, and our responsiveness to feedback received.

Investor Outreach & Feedback

We are firmly committed to learning investors’ perspectives and believe that proactive engagement is an effective means to solicit and receive valuable feedback. This feedback is important as we shape our policies and practices. We conduct outreach throughout the year to ensure that management and the Board understand the issues of importance to our investors and address them appropriately. The Board regularly reviews stockholder feedback,

 

 

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which informs Board discussions on a wide range of topics, including our approaches to corporate governance, risk oversight, ESG initiatives, human capital management, diversity and inclusion, and executive compensation.

In 2021, we engaged directly with our investors in various forums and through different media (including in-person and virtual meetings) as part of our outreach program. In addition to discussions in the ordinary course of business, we participated in numerous conferences throughout the year, including the UBS Global Real Estate CEO/CFO Conference 2021, Nareit Conference, Bank of America 2021 Global Real Estate Conference, Barclays Global Financial Conference, Evercore ISI Conference and the 2021 Citi Conference. We held one-on-one meetings with various investors and potential investors at these conferences and had meaningful dialogue from which we gained helpful insight as to the matters that were at the forefront of our investors’ agendas.

In the aggregate, in 2021 we engaged directly with representatives of more than 200 firms, including approximately 110 U.S. and international institutional investors who own, in the aggregate, approximately 62% of the total number of outstanding shares of BXP common stock and approximately 70% of the total number of outstanding shares held by actively managed funds. Through these engagement efforts and discussions with our investors, we received positive overall feedback regarding our executive compensation program and governance practices. This feedback is consistent with the support we received in 2021 on our advisory Say-on-Pay proposal.

We believe our engagement efforts have been successful and are pleased that in 2021 Institutional Investor Magazine ranked us #1 among Office REITs and #3 among all REITs in six categories: Best CEO, Best CFO, Best ESG, Best IR program, Best IR Professional and Crisis Management – COVID-19.

II. EXECUTIVE COMPENSATION PROGRAM & 2021 RESULTS

  2021 ANNUAL TARGET COMPENSATION

In January of each year, the Committee establishes a target amount for total compensation for each NEO by considering competitive benchmarking data, position, level of responsibility and experience, and, for executives other than our CEO, our CEO’s recommendation. Targets are reviewed annually and adjusted if the Committee determines that it is appropriate to do so. The Committee may also adjust target compensation to reflect changes in or new responsibilities for a particular executive. In considering the appropriate annual target amounts for each component for 2021, the Committee considered the challenges BXP faced in 2020 as a result of the COVID-19 pandemic and management’s responses thereto and the Committee’s decision not to change any of the three categories of the 2020 AIP or the specific targets for the goals within each category after they were established in 2020. In addition, the Committee considered, in particular, our CEO’s and President’s stellar performance against the supplemental pandemic-related goals that the Committee incorporated into the Business & Individual category of the 2020 AIP mid-year. As a result, the Committee approved modest increases in the target LTI equity opportunities for 2021 for Messrs. Thomas and Linde of 2% and 3%, respectively. The targets for all other components of compensation for 2021 remained unchanged for the CEO and President. The Committee did not change the targets for any component of 2021 compensation for any of the other NEOs.

The total target direct compensation for 2021 for each NEO was as follows:

 

  Name    Salary      Target Bonus     

Target

LTI Equity

     Total Target
Compensation
 

Owen D. Thomas

     $  900,000        $  2,350,000        $  9,450,000        $  12,700,000  

Douglas T. Linde

     $  750,000        $  1,900,000        $  6,045,000        $    8,695,000  

Raymond A. Ritchey

     $  740,000        $  1,650,000        $  4,410,000        $    6,800,000  

Michael E. LaBelle

     $  510,000        $  1,250,000        $  1,990,000        $    3,750,000  

Bryan J. Koop

     $  410,000        $  1,250,000        $  1,490,000        $    3,150,000  

 

 

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Variable or “at-risk” pay, consisting of annual cash bonuses and LTI equity awards, constitutes the vast majority of our executive compensation. We believe that having a significant portion of our executives’ compensation at risk more closely aligns their interests with our long-term interests and those of our stockholders. For our CEO and all NEOs as a group, variable pay for 2021 was 93% and 91%, respectively, of target total compensation. This emphasis on variable pay allows the Committee to reward good performance and penalize poor performance. The following graphics illustrate the mix between fixed pay (base salary) and variable pay incentives (short-term incentives in the form of cash bonuses and long-term incentives in the form of both time-based and performance-based LTI equity awards) for our CEO and the NEOs as a group, in each case, based on 2021 target compensation levels.

Compensation Mix

 

CEO   NEOs (as a group)
LOGO   LOGO

  CASH COMPENSATION

Base Salary

The base salary for each NEO is determined by the Committee and is intended to provide a fixed level of compensation that reflects the NEO’s leadership role and the relative market rate for similarly situated executives in the NEO’s position. The Committee determines whether to adjust base salaries based on a range of factors, including benchmark versus peers and changes in individual duties and responsibilities. Any increases to base salaries are generally determined in January of the compensation year and become effective in February of the compensation year. For 2021, base salaries remained unchanged. For 2022, the Committee modestly increased the base salaries of the NEOs for the first time in three years.

 

 

  Name

 

  

 

2020 Salary

 

  

 

2021 Salary

 

  

 

% Change  

 

    

 

2022 Salary  

 

 

Owen D. Thomas

   $900,000    $900,000             $925,000    

Douglas T. Linde

   $750,000    $750,000             $775,000    

Raymond A. Ritchey

   $740,000    $740,000             $750,000    

Michael E. LaBelle

   $510,000    $510,000             $525,000    

Bryan J. Koop

   $410,000    $410,000             $425,000    

Total

   $3,310,000    $3,310,000             $3,400,000    

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

2021 Annual Incentive Plan

Program Design and Structure

In January 2020, based largely on feedback received from our investors in 2019, the Committee established the 2020 AIP under which annual cash bonuses payable to our executive officers are directly linked to the achievement of specific, pre-established goals. The structure of our 2021 AIP remained generally the same except for small shifts in weighting between categories, as described in more detail below.

Under the 2021 AIP, each NEO had a target bonus opportunity expressed in a fixed dollar amount. Actual earned amounts under the plan may range from zero (0) to 150% of target, depending on performance versus the annual goals in each category, with payout interpolated for performance between levels.

 

Performance Level for Each Category   Payout (% of Target)
>= Maximum   150%
Target   100%
Threshold   50%
<Threshold   0

We use a “scorecard” approach for our bonus determinations. This approach is intended to reflect a comprehensive analysis by the Committee of corporate, regional and individual performance based on performance in three categories: (1) diluted FFO per Share, (2) Leasing and (3) Business & Individual goals.

 

   

Diluted FFO per Share. The Committee selected diluted FFO per share as a key financial metric for the 2021 AIP because it is the earnings metric most commonly used by investors and analysts to evaluate our performance on an absolute basis and relative to other REITs. As such, the Committee considers this to be an important, company-wide performance metric that is objective and drives near-term business strategies. The diluted FFO per share goal is subject to adjustment for acquisitions, dispositions, early debt redemption charges, and similar transactions and circumstances.

 

   

Leasing. The Committee established specific leasing goals, starting at the property level, rolling up by region and then aggregating to corporate leasing goals, as the second component. The leasing goals were then categorized as short-term leasing and total leasing goals to encourage the executives to focus on current addressable vacancies and near-term roll-over, and to avoid scenarios in which leasing goals are met solely due to unexpected early renewals. The Committee selected this category because it is an objective measure that is fundamental to the Company’s short-term and long-term success and links corporate, regional and individual performance by formula to the amounts paid. The leasing goals are measured at the regional level for regional EVPs and the Company level for corporate executives.

 

   

Business & Individual Goals. Business goals include milestone-oriented objectives related to acquisitions, dispositions, delivering development and construction projects on time and budget, achieving the desired returns on investments, securing entitlements for future development projects, launching new developments, the opportunistic use of joint ventures, and the management of capital expenditures and G&A expense. Business goals are based on regional priorities for the regional EVPs. For the CEO and President, business goals include a relevant subset of those regional goals, as well as goals related to overall corporate strategy and executive management of the Company. For the CFO, business goals relate to balance sheet management, capital raising, and other Finance Department priorities.

Individual goals include leadership and professional development goals, diversity initiatives, succession planning and ESG priorities for each executive. The Committee considers performance outcomes against Business & Individual goals and objectives, as well as the context in which they were achieved (including, e.g., degree of difficulty, importance to BXP, headwinds and tailwinds during the year and other similar factors).

 

 

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One of the Committee’s primary objectives when establishing Business & Individual goals each year, including in 2021, is to set annual goals that meaningfully advance the Company’s strategy for sustainable, long-term growth and value creation despite the short-term window for assessing performance against these goals. In some cases, actual performance against these Business & Individual goals may not be assessed quantitatively. In addition, the relative importance of some goals may be greater in one year than in another depending on the circumstances at the time the Committee establishes the goals.

For the 2021 AIP, the performance measurement categories and weighting of each category were as follows:

 

     Weightings  
  Annual Incentive Performance Measures    Thomas      Linde     LaBelle     Ritchey     Koop  
  FFO per Share      30      30     30     30     30
  Leasing (Short-Term and Total)            

Overall BXP

     30      30     30    

DC Region(1)

            20  

LA Region(1)

            10  

Boston Region

                                      30
  Business & Individual Goals            

Overall BXP

     40      40      

Finance

          40    

DC Region + LA Region

            40  

Boston Region

                                      40
  Total      100.0      100.0     100.0     100.0     100.0

 

(1) 

Mr. Ritchey’s leasing goal (weighted 30% in total) is evenly split between short-term and total leasing (15% each), consistent with all other NEOs, but is further bifurcated between the Washington, DC and Los Angeles regions based on square footage as follows: short-term: 10% Washington, DC / 5% Los Angeles; total: 10% Washington, DC / 5% Los Angeles.

As part of the Committee’s annual executive compensation process, in January 2021, the Committee reviewed and reassessed the AIP, including its categories and weightings. As part of this review, the Committee considered the structure and design of annual bonus plans of its benchmarking peers, and noted that, of the thirteen peers that disclosed the details of their bonus plans, a substantial majority (approximately 70%) provided for maximum payout percentages of 200% of target, compared to the maximum opportunity for our NEOs under the AIP of 150% of target.

Based on its review of the AIP, the Committee concluded that the categories were appropriate, but that more weight should be given to the Business & Individual Goals (from 33.3% to 40%) because they are broader, more strategic in nature and important to our sustainable, long-term growth and value creation. Therefore, for the 2021 AIP, the Committee determined that it was advisable to modestly adjust the weight allocated to the Business & Individual goals for 2021 for Messrs. Thomas, Linde, Ritchey and Koop (from 33.3% to 40%) and to correspondingly adjust the allocations to the other two categories (from 33.3% to 30%). The Committee also adjusted the category weightings for Mr. LaBelle, our CFO, to align with the other NEOs. These changes were disclosed prospectively in our 2020 proxy statement.

2021 NEO Scorecards & Results

Set forth in the following tables is a summary of each NEO’s performance measures and weightings, with specific threshold, target and maximum goals for each of the diluted FFO per share and leasing performance measures, and the principal Business & Individual goals, along with each NEO’s performance results for 2021.

In setting the target for diluted FFO per share goal for 2021, the Committee considered the ongoing pandemic that was still materially and adversely impacting businesses across the U.S., including that of our tenants, which could directly impact our financial results, including FFO. With that in mind, the Committee set a diluted FFO per share

 

 

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Table of Contents
7    COMPENSATION DISCUSSION AND ANALYSIS

 

target of $6.53 per share, which, if achieved, would have represented growth of approximately 4% compared to 2020. The Committee believed the target was rigorous yet achievable despite the economic conditions and continued uncertainties due to the pandemic.

For the leasing goal, the Committee considered the challenged leasing environment in 2020 and early 2021 across the real estate sector and for office REITs, in particular. The Committee could not predict with any certainty the duration and severity the pandemic would have on leasing activities through 2021. As a result, the Committee determined that using historical leasing levels would not be appropriate or reasonable for determining targets for the leasing goal. Therefore, the Committee focused primarily on vacant and near-term rollover space when setting the target of 3.2 million square feet of leasing to challenge executives to achieve leasing results despite the difficult environment. While the target for the 2021 leasing goal represented a decrease from the amount actually leased in 2020, the Committee took into account that (1) actual 2020 leasing results included less than one quarter of pre-pandemic leasing activity and more than three quarters of significantly muted leasing activity, and (2) the outlook for leasing activity for 2021 suggested continued deterioration of market conditions (e.g., more supply from developed properties, more space available for sublet and less overall demand).

Based on the foregoing, the Committee believes the performance targets for the 2021 AIP were rigorous and challenging, but achievable.

 

 

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7    COMPENSATION DISCUSSION AND ANALYSIS

 

 

Owen D. Thomas

  Performance

  Category

   Weighting           Threshold    Target    Maximum    2021
Results
  Category
Payout %

FFO per Share

  

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     $6.20    $6.53    $6.86    $6.76(1)   135%

Leasing

(in million square feet)

  

 

 

 

LOGO

 

    Short-term      2.45    3.06    3.68    3.72   150%
   

 

Total

 

 

 

   2.56

 

   3.20

 

   3.84

 

   4.94

 

Business &

Individual Goals

  

 

 

LOGO

 

        130%

 

Key 2021 Business & Individual Goals

 

  +

Provide leadership to management team to complete 2021 operational, capital and ESG goals

  +

Lead full review of BXP strategy and present to the Board of Directors

  +

Form Strategic Capital Program as an additional source of private equity funding

  +

Complete new investments through Strategic Capital Program

  +

Collaborate with BXP’s President to hire a new leader for the New York Region

 

Finalize and meet specified diversity and inclusion goals and initiatives

 

Enter the Seattle market with a new acquisition

  X

Expand LA Region footprint

 

Establish the BXP Life Sciences Advisory Board (“LSAB”)

  +

Grow BXP’s life sciences business

  X

Execute specified asset sales of more than $500 million

 

Facilitate company-wide professional development and employee engagement initiatives, including leadership programs and town halls