Brandywine Realty Trust (BDN) Earnings Call Transcript & Summary

Good morning. My name is Jerry Sweeney. I'm President and Chief Executive Officer of Brandywine Realty Trust, and I would like to welcome you to our Virtual 2021 Annual Shareholders Meeting. It is 10:00 a.m. and, in accordance with the notice of the meeting, we call this -- hereby call this meeting to order of our annual meeting. First, it gives me great pleasure to introduce the Chairman of our Board of Trustees, Michael Joyce. We're actually having some technical facilities looping our Chairman in so the Chair of our Governance Committee, Charles Pizzi, will do the next part of the meeting.

Thank you, Jerry. On behalf of the Board of Trustees and management team, we appreciate your continued interest in and support of our company. Before proceeding, I would like to introduce our trustees and offer our special thanks to Wyche Fowler, who is retiring from the Board today after 16 years of service. Our continuing trustees, all of whom are present, are: Jim Diggs, Rich Haverstick, Terri Herubin, myself and Jerry Sweeney. I would also like to welcome Reggie DesRoches, who has been nominated to join the Board of Trustees.

Thank you, Charlie. This is Jerry Sweeney once again. Allow me to introduce those of our officers who are present: Tom Wirth, Executive Vice President and Chief Financial Officer; George Johnstone, Executive Vice President of Operations; George Hasenecz, our Senior Vice President of Investments; Dan Palazzo, our Vice President and Chief Accounting Officer; and Shawn Neuman, Senior Vice President, General Counsel and our Corporate Secretary. I would also like to introduce Nicole Stroud from our accounting firm of PricewaterhouseCoopers; Jeff Fletcher from our tax accounting firm of KPMG; and Mike Friedman, our outside corporate counsel from Troutman Pepper. At this time, at the request of our Chairman, Mike Joyce, I hereby appoint Shawn Neuman as a secretary of the meeting and appoint Jim Raitt from Broadridge as our inspector of elections. His duty will be to count the votes taken on the business transacted during the meeting. He is not an officer, trustee or otherwise employed by Brandywine Realty Trust. Mr. Neuman will now report on matters relating to the delivery of notice for the meeting and the determination of a quorum for the meeting.

Thank you, Jerry. As secretary of the meeting, I hereby confirm the proper mailing of the notice of the meeting. As of the record date for the meeting, March 22, 2021, there were 170,663,251 common shares of the company outstanding, each share being entitled to cast one vote. Represented at this meeting via attendance by live webcast or by proxy are a total of approximately 161,536,490 common shares entitled to vote at this meeting. This represents a quorum for transacting business at this meeting. And I declare that this meeting is properly and legally convened. We will now proceed to the business of this meeting, which, as described in the proxy statement, is to consider and vote upon: one, the election of 7 trustees to serve as members of the Board of Trustees until the next Annual Meeting of Shareholders and until their successors are elected and qualified; two, the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our calendar year 2021; and three, providing an advisory nonbinding vote on our executive compensation. The voting is now closed. The trustees have unanimously recommended that the shareholders vote for each of the foregoing proposals. At this juncture, we will now commence the procedures necessary to transact our stated business.

It's Jerry Sweeney, once again. I ask George Johnstone, a shareholder of Brandywine Realty Trust, to present the proposals.

My name is George Johnstone, and I am a shareholder of Brandywine Realty Trust. I hereby move that shareholders vote for each of the above 3 proposals as set forth in the 2021 proxy statement and as described earlier by Mr. Neuman.

Is there a second to the motion?

I am George Hasenecz. I'm a shareholder of Brandywine Realty Trust, and I second the motion.

Thank you, George and George. If you have not yet voted your shares, you may do so now by following the instructions in the proxy materials prepared for the meeting. We'll allow a few moments for voting to occur. [Voting]

All right. Well, after the report of the inspector of election, we'll now address any shareholder questions. Has the inspector of elections submit the results of the voting on the proposals contained in the company's proxy statement?

Yes, the inspector of election has completed the count, and the results are that each of the 3 proposals has passed.

Thank you, Shawn. On behalf of our Chairman, Michael Joyce, I declare that each of the nominees for trustee has been elected, the appointment of PricewaterhouseCoopers has been ratified, and the advisory vote on the company's executive compensation plan has been approved. This concludes the official business of the meeting. At this point, I'd be pleased to address any questions. I ask Dan Palazzo, our Chief Accounting Officer, to moderate any questions.

We do have one question in. It's addressed to Mr. Chairman. The Carpenter's Fund holds a total of 488,200 shares of the common stock. We believe that the company's executive compensation plan should drive a successful execution of the Board's long-term strategic business plan. Today's public company executive compensation plans are largely formulaic, peer-related plans with simplistic annual say-on-pay, voting reinforcing, plan, homogeneity. Would you or the chair of the Compensation Committee speak to whether the Brandywine Realty might be better served by an executive compensation plan, tailored specifically to the company's circumstances and unique long-term strategic plan? Thank you.

Again, Jerry Sweeney. Let me take that question. The company actually does have an incentive compensation plan for our executive ranks and actually for every employee in the company that really focuses on 2 items -- 2 major categories. The first is company-specific business plan goals. The company's management team prepares an annual projected scorecard that identifies items that are both financial in nature, primarily relating to FFO and cash flow growth as well as capital ratios; also incorporates operational metrics, like leasing, speculative revenue, year-end lease percentage as well as a range of capital objectives, that while near-term in nature, tie very much into the company's long-term strategic plan. That scorecard is utilized by the Compensation Committee in their deliberations to determine what incentive compensation the management team receives on an annual basis based upon the execution of each component part of that scorecard. In addition to that, there's a long-term incentive plan that is tied very much to relative total shareholder return based upon the office peer group index, which Brandywine operates. So I think the company's compensation, clearly the Board's developed a very thoughtful approach to addressing both Brandywine's near-term tactical and strategic plan objectives through the incentive compensation plan on an annual basis and then benchmarking that relative performance against our peer group through the implementation of the long-term total shareholder return compensation program. Thank you. There being no further questions, I'd like to take the opportunity to thank each of you for attending our virtual annual meeting. And since there is no other business on behalf of our Chair, Michael Joyce, I declare this meeting concluded. Thank you very much.