UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

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KENNEDY-WILSON HOLDINGS, INC.

 

 

(Name of Registrant as Specified In Its Charter)

 

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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KENNEDY WILSON NOTICE OF 2021 ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT

April 29, 2021

Dear Fellow Stockholder,

I cordially invite you to attend the 2021 annual meeting of stockholders of Kennedy-Wilson Holdings, Inc., to be held on Thursday, June 10, 2021, at 9:00 a.m. Pacific Time (the “Annual Meeting”). Due to the ongoing public health impact of the COVID-19 pandemic, and to support the health and well-being of our stockholders and employees, this year’s Annual Meeting will again be a completely virtual meeting of stockholders, conducted via live webcast.

The proxy statement, with the accompanying formal notice of the meeting, describes the matters expected to be acted upon at the meeting and details of how you can attend the meeting virtually. We ask that you review these materials carefully.

We hope you will be able to attend the meeting. However, whether or not you are personally present, your vote is extremely important to us and our business. We are pleased to offer multiple options for voting your shares. You may vote via the Internet, by mail, or during the meeting as described in the accompanying proxy statement.

Thank you for your continued support of Kennedy Wilson.

All the very best,

 

William J. McMorrow

Chairman and Chief Executive Officer

 

Kennedy Wilson / Proxy Statement 2021 /   1

KENNEDY-WILSON HOLDINGS, INC.

151 S. El Camino Drive

Beverly Hills, California 90212

(310) 887-6400

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO THE STOCKHOLDERS OF KENNEDY-WILSON HOLDINGS, INC.:

The Annual Meeting of the Stockholders of Kennedy-Wilson Holdings, Inc., a Delaware corporation (the “Company”), will be held on June 10, 2021, at 9:00 a.m. Pacific Time (the “Annual Meeting”) and will be a completely virtual meeting of stockholders, conducted via live webcast at https://www.cstproxy.com/kennedywilson/2021, for the following purposes:

 

To elect four (4) directors to the Board of Directors of the Company to serve for a three-year term and until their successors are duly elected and qualified.

To vote on an advisory, nonbinding proposal to approve the compensation of the Company’s named executive officers.

To ratify the appointment of KPMG LLP as our independent registered accounting firm for the 2021 fiscal year.

To transact any other business as may properly be presented at the Annual Meeting or any adjournment or postponement thereof.

Stockholders of record of the Company’s common stock at the close of business on April 23, 2021 are entitled to notice of, and to vote at, the Annual Meeting or any adjournment or postponement thereof. To attend the Annual Meeting, stockholders of record will need to register to attend at https://www.cstproxy.com/kennedywilson/2021 beginning at 8:00 a.m. on June 7, 2021. Stockholders of record will need the 12-digit control number included on their proxy card or Notice of Internet Availability to register. Street name stockholders must first contact their broker or bank and receive a legal proxy and, after it is received, contact the Company’s transfer agent, Continental Stock Transfer, to obtain a meeting control number to register. Continental Stock Transfer can be reached via email at proxy@continentalstock.com or by phone at (917) 262-2373. Continental will require a copy of the legal proxy. To ensure receipt of a meeting control number in time, stockholders should contact Continental Stock Transfer no later than Monday, June 7, 2021. Stockholders that have obtained a legal proxy from their broker or bank without previously voting their shares will only be able to vote their shares through the link on the virtual meeting site. A list of the stockholders entitled to vote at the meeting may be examined at the Company’s office at 151 S. El Camino Drive, Beverly Hills, California during the 10-day period preceding the Annual Meeting.

 

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All stockholders are cordially invited to attend the meeting. Whether or not you expect to attend, you are respectfully requested by the Board of Directors to vote your shares online or sign, date and return the enclosed proxy promptly, or otherwise follow the instructions contained in this proxy statement. Stockholders who execute proxies retain the right to revoke them at any time prior to the voting thereof. If you received this proxy statement in the mail, a return envelope is enclosed for your convenience.

We are pleased to use the rules of the SEC that allow us to furnish our proxy materials over the Internet. As a result, we are mailing our stockholders a Notice of Internet Availability instead of paper copies of our Proxy Statement and 2020 Annual Report. The Notice of Internet Availability contains instructions on how to access these documents via the Internet. The Notice of Internet Availability also contains instructions on how you can receive a paper copy of our proxy materials, including this proxy statement, our 2020 Annual Report and a proxy card. Stockholders who request paper copies of proxy materials will receive them by mail. This process will conserve natural resources and reduce the costs of printing and distributing our proxy materials to our stockholders.

By Order of the Board of Directors,

 

In Ku Lee

Senior Vice President, Deputy General Counsel and Secretary

Dated: April 29, 2021

 

 

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 10, 2021.

Full copies of the proxy statement, the proxy card and the annual report are available on the Internet at ir.kennedywilson.com. If you wish to receive a printed copy of the proxy materials, please follow the instructions set forth in the Notice of Internet Availability. Additional copies may be requested by calling or sending a letter to the Secretary of the Company, c/o Kennedy-Wilson Holdings, Inc., at 151 S. El Camino Drive, Beverly Hills, California 90212 or (310) 887-6400.

 

Kennedy Wilson / Proxy Statement 2021 /   3

Table of Contents Questions and Answers About the Annual Meeting 8 1 Proposal 1 Election of Directors 5 Directors and Executive Officers 6 Director Compensation 12 Corporate Governance and Board Matters 13 ESG at Kennedy Wilson: A Commitment to Responsible Investing and Operations 18 Executive Compensation 22 Compensation Committee Report 49 Proposal 2 Advisory Vote on Executive Compensation (“Say-On-Pay Vote”) 63 Proposal 3 Ratification of the Appointment of KPMG LLP as Independent Registered Public Accounting Firm 65 Audit Committee Report 67 Security Ownership of Management and Certain Beneficial Owners 68 Certain Relationships and Related Transactions 71 Other Matters 72 Appendix A Certain Definitions and Reconciliation of Non-GAAP Financial Measures 74 4 Kennedy Wilson / Proxy Statement 2020

PROXY SUMMARY

Proposal Roadmap

The following proposals will be voted on at the Annual Meeting of the Stockholders:

 

		Board		For More
Proposal		Recommendation		Information
Proposal No. 1: Election of Directors		For each director		Page 12
To elect four (4) directors to the Board of Directors of the Company to serve for a three-year term and until their respective successors are duly elected and qualified
Proposal No. 2: Say-on-Pay Vote		For		Page 70
To approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers
Proposal No. 3: Ratification of Appointment of Independent Registered Public Accounting Firm		For		Page 72
To ratify the appointment of KPMG LLP as the Company’s independent registered accounting firm for the 2021 fiscal year

 

Kennedy Wilson / Proxy Statement 2021 /   5

PROXY SUMMARY

 

 

 

2020 Business Highlights

In 2020, Kennedy Wilson continued to deliver across key financial and operational metrics for another strong performance year under the leadership of our Board of Directors and management team during a year full of considerable challenges on a global scale stemming from the Covid-19 pandemic. Fee-bearing capital growth in 2020, as a result of new partnerships and the expansion of existing relationships and asset sales that generated significant gains for the Company were key to achieving meaningful financial results and positioning the Company for long-term success. The Company also managed an impressive level of rent collections while maintaining strong occupancy across our diverse global multifamily and office portfolio. 2020 business highlights include:

 

SIGNIFICANT PERFORMANCE AND PROVEN EXECUTION OF KENNEDY WILSON STRATEGY* Strong Property Performance 95.2% Multifamily Occupancy(1) 94.2% Office Occupancy(1) 96.% Rent Collections(2) New Real Estate Debt Platform $2 Billion Real Estate Debt Platform with Fairfax Financial New Urban Logistics Platform $1 Billion Joint Venture with GIC in the UK Fee-Bearing Capital Growth +$2.2B Pipeline of additional non-discretionary fee-bearing capital to be deployed Fee-Bearing Capital (in billions) 33% CAGR $2.2 $3.0 $3.9 2018 2019 2020 Significant Transactional Activity $2.3 Billion of Investment Transactions(3) Generating $326mm Gains on Sale and $794mm of Cash Generated to KW $500mm $1.31 5.0% 10 Share buyback program expanded from $250mm in November 2020 per share returned to stockholders through common dividends and share repurchases, equating to $185mm in total Dividend Growth in 2020 Consecutive Years of Dividend Growth (21% CAGR) * See “2020 Financial Performance Results” on page 32 for additional performance details. 1 Percentage occupancy based on weighted average for the quarter ended December 31, 2020 at our share. 2 Represents rent collection across our global investment portfolio for the year ended December 31, 2020 rents as of February 18, 2021 3 Includes acquisition of $1.1 billion of assets (our share of which was $242.0 million) and sale of $1.2 billion of assets (our share of which was $983.6 million) Sustained Long-Term Total Shareholder Return (“TSR”) Outperformance Relative to Peer Group and World Real Estate Index* KW TSR +18.3% +137.8% Three-Year Ten-Year Executive Compensation Peer Group Outperformed by +22.5% Outperformed by +54.8% MSCI World Real Estate Index Outperformed by +6.2% Outperformed by +41.3%

 

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PROXY SUMMARY

 

 

 

Executive Compensation Highlights

Kennedy Wilson is a dynamic real estate investment company with a unique and global business model that includes both a balance sheet portfolio and an investment management platform. Our executive compensation program is designed to attract and retain high caliber executives who are capable of managing our sophisticated business model and global operations. The Compensation Committee is committed to (i) evaluating and updating our executive compensation and corporate governance practices based on its continual review of current market practices and governance trends, and (ii) ensuring that the program drives and rewards operational and financial performance that leads to strategic growth while providing significant alignment with our stockholders.

We believe the current structure is strongly aligned with the long-term interests of the Company’s stockholders, demonstrates pay-for-performance alignment and reflects a program that is well-aligned with the best market practices, as highlighted below:

 

·

Each element of compensation is determined based on thoughtful consideration by the Compensation Committee and is designed so that the program in totality supports our strategic business plan and motivates management to drive long-term value creation for our stockholders. The effectiveness and alignment of our compensation program is demonstrated by our market leading TSR performance and exceptional stockholder support of our 2020 say-on- pay vote.

 

·

Approximately 82% of our named executive officers’ compensation is variable and directly tied to the achievement of operational, financial and/or stock price performance.

 

·

The majority of compensation is comprised of equity awards that are subject to the same stock price fluctuations as our stockholders. Additionally, all of our stock grants require our named executive officers to hold shares for an additional three years following the vesting date to reinforce our commitment to aligning our named executive officers’ interests with those of our stockholders.

 

·

We generally held total compensation opportunities flat in 2020.

 

·

We continually review and adjust our program to ensure best practices are maintained, which has recently included increasing the equity award allocation to 80% performance-based awards, enhancing disclosure to provide additional pay transparency and incorporating additional governance features (broadened the clawback policy and increased director ownership policy).

 

Strong Support for Our Executive Compensation Program   At our 2020 annual meeting, 98% of votes cast were voted in favor of our say-on-pay vote, which strongly affirms our stockholders’ support of our approach to executive compensation. During 2020, the Compensation Committee remained committed to maintaining a pay-for-performance compensation structure that promoted our stockholders’ best interests while continuing to make enhancements to further align our compensation program with best practices.

98% Support

 

Kennedy Wilson / Proxy Statement 2021 /   7

PROXY STATEMENT

This Proxy Statement is being made available to stockholders of Kennedy-Wilson Holdings, Inc. (“we,” “us,” “our,” “Kennedy Wilson” or the “Company”) on or about April 29, 2021, and is furnished in connection with the solicitation of proxies by the Board of Directors of Kennedy Wilson for use at the 2021 annual meeting of stockholders (the “Annual Meeting”) of Kennedy Wilson to be held on Thursday, June 10, 2021 at 9:00 a.m. Pacific Time. This year’s Annual Meeting will be a completely virtual meeting of stockholders, conducted via live webcast at https://www.cstproxy.com/ kennedywilson/2021 and at any adjournments or postponements thereof.

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

Who can vote?

You can vote your shares of common stock if our records show that you owned the shares as of the close of business on April 23, 2021 (the “Record Date”). Persons who are not stockholders of record as of the close of business on the Record Date will not be allowed to vote at the Annual Meeting. As of the close of business on the Record Date, a total of 140,826,089 shares of common stock were outstanding and are entitled to vote at the Annual Meeting.

Each share of common stock is entitled to one (1) vote on matters presented at the Annual Meeting. Holders of shares of Series A Preferred Stock are entitled to vote with the shares of common stock as a single class, and not as a separate class, on an as-converted basis. As of the close of business on the Record Date, the outstanding shares of Series A Preferred Stock were convertible into, and the holders thereof are entitled to vote in respect of, a total of 12,000,000 shares of common stock. Including the voting rights of the Series A Preferred Stock, as of the close of business on the Record Date, a total of 152,826,089 shares of common stock were outstanding, or underlying the Series A Preferred Stock, and entitled to vote at the Annual Meeting.

What am I voting on?

Proposal No. 1: To elect four (4) directors to the Board of Directors of the Company to serve for a three-year term and until their successors are duly elected and qualified.

Proposal No. 2: To vote on a non-binding advisory proposal to approve the compensation of the Company’s named executive officers.

Proposal No. 3: To ratify the appointment of KPMG LLP as the Company’s independent registered accounting firm for the 2021 fiscal year.

Why are you making these materials available over the Internet rather than mailing them?

Under the notice and access rules of the SEC, we are furnishing proxy materials to our stockholders on the Internet rather than mailing printed copies of those materials to each stockholder. This will help us conserve natural resources and save postage, printing and processing costs. If you received a Notice of Internet Availability of proxy materials by mail, you will not receive a printed copy of our proxy materials unless you specifically request one. Instead, the Notice of Internet Availability will instruct you on how to (1) access and review our proxy materials on the Internet and (2) access your proxy card to vote on the Internet. We anticipate that we will mail the Notice of Internet Availability to our stockholders on or about April 29, 2021.

Our proxy materials are available online at https://www.cstproxy.com/kennedywilson/2021.

 

8   / Kennedy Wilson / Proxy Statement 2021

How can I have printed copies of the proxy materials mailed to me?

Instructions for requesting a paper copy of the proxy materials are set forth on the Notice of Internet Availability of proxy materials. Alternatively, you may request a paper copy the by calling or sending a letter to the Secretary of the Company, c/o Kennedy-Wilson Holdings, Inc., at 151 S. El Camino Drive, Beverly Hills, California 90212 or (310) 887-6400.

How do I vote by proxy?

If you hold shares directly as a holder of record, you may direct how your shares are voted without attending the Annual Meeting:

 

·

electronically over the Internet by following the procedures described in the Notice of Internet Availability; or

 

·

by requesting, completing and submitting a properly signed paper proxy card, as described in the Notice of Internet Availability.

If you are a beneficial owner of shares held in street name, you may vote by proxy via the Internet by following the instructions provided by your brokerage firm, bank, broker-dealer or other similar organization that holds your shares.

What is the difference between a “Holder of Record” and a “Beneficial Owner of Shares Held in Street Name?”

Holder of Record. If your shares are registered directly in your name with the Company’s transfer agent, Continental Stock Transfer & Trust Co. (“Continental”), you are considered the holder (or stockholder) of record with respect to those shares. As a holder of record, you should have received this proxy statement, our Annual Report, and a proxy card from the Company via Continental.

Beneficial Owner of Shares in “Street Name.” If your shares are held in an account at a brokerage firm, bank, broker- dealer, or other similar organization acting as a nominee, then you are the beneficial owner of shares held in “street name.” The organization holding your account is considered the holder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the shares held in your account. Accordingly, you should have received the Notice of Internet Availability and a vote instruction form from that organization.

If I am a stockholder of record, how do I cast my vote during the Annual Meeting?

If you are a stockholder of record, you may vote in person at the Annual Meeting by following the instructions that will be available on the meeting website. If you do not wish to vote during the Annual Meeting, you may vote via the Internet or by proxy, as described above. As always, we encourage our stockholders to vote their shares prior to the Annual Meeting.

If I hold my shares in street name, how do I cast my vote during the meeting?

Many of our stockholders who hold their shares in street name through a nominee have the option to submit their proxies or voting instructions to their nominee electronically by telephone or the Internet. These stockholders should review and follow the voting instructions forwarded to them by their nominee.

You also may vote your shares during the Annual Meeting if you attend. If you hold your shares in street name and wish to vote during the Annual Meeting, you must obtain a legal proxy from your nominee.

Additionally, street name stockholders must first contact their broker or bank and receive a legal proxy and, after it is received, contact the Company’s transfer agent, Continental Stock Transfer, to obtain a meeting control number to register. Continental Stock Transfer can be reached via email at proxy@continentalstock.com or by phone at (917) 262-2373. Continental will require a copy of the legal proxy. To ensure receipt of a meeting control number in time, stockholders should contact Continental Stock Transfer no later than Monday, June 7, 2021. Stockholders that have obtained a legal proxy from their broker or bank without previously voting their shares will only be able to vote their shares by following instructions that will be available on the meeting website. As always, we encourage our stockholders to vote their shares prior to the Annual Meeting.

 

Kennedy Wilson / Proxy Statement 2021 /   9

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 

 

 

What if other matters come up at the Annual Meeting?

The matters described in this proxy statement are the only matters we know of that will be voted on at the Annual Meeting. If other matters are properly presented at the meeting, the proxy holders will vote your shares as they see fit.

Can I change or revoke my vote after I return my proxy card?

Yes. You can revoke your proxy at any time before it is exercised at the Annual Meeting in any of three ways:

 

·

by submitting written notice revoking your proxy card to the Secretary of the Company;

 

·

by submitting another proxy that is later dated and, if by mail, that is properly signed; or

 

·

by voting during the Annual Meeting.

Is any special documentation required to vote during the Annual Meeting?

Although we encourage you to vote electronically over the Internet, or alternatively, by requesting, completing and submitting a properly signed paper proxy card, you can attend the Annual Meeting and, once you are admitted, you may vote your shares during the Annual Meeting by following instructions that will be available on the meeting website.

To attend the Annual Meeting, stockholders of record will need to register to attend at https://www.cstproxy.com/ kennedywilson/2021 beginning at 8:00 a.m. on June 7, 2020. Stockholders of record will need the 12-digit control number included on their proxy card or Notice to register. Street name stockholders must first contact their broker or bank and receive a legal proxy and, after it is received, contact the Company’s transfer agent, Continental Stock Transfer, to obtain a meeting control number to register to attend the Annual Meeting. If you hold your shares in street name and wish to vote during the Annual Meeting, you must obtain a legal proxy from your nominee. Please also see “If I hold my shares in street name, how do I cast my vote during the meeting?” above.

How are votes counted?

We will hold the Annual Meeting if holders representing a majority of the shares of common stock issued and outstanding and entitled to vote at the Annual Meeting either submit a proxy or attend the meeting. Shares are considered “in person” if voted by the holder of those shares during the virtual Annual Meeting. If you submit a proxy, your shares will be counted to determine whether we have a quorum even if you abstain or fail to vote on any of the proposals listed on the proxy card.

The election of directors under Proposal 1 will be by the affirmative vote of a majority of the votes cast at the Annual Meeting. Abstentions, broker non-votes and withheld votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.

Proposals 2 and 3 will be approved upon the affirmative vote of a majority of the votes cast at the Annual Meeting. Abstentions and broker non-votes will each be counted as present for purposes of determining the presence of a quorum but will not have any effect on the outcome of the proposal.

Broker non-votes occur when a beneficial owner of shares held in street name does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed “non-routine.” Brokers holding shares of common stock in street name who do not receive timely instructions from the beneficial owners of those shares are entitled to vote only on “routine” proposals. The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for 2021 (Proposal No. 3) is considered routine under applicable rules. A broker or other nominee may generally vote on routine matters, and therefore no broker non-votes are expected to exist in connection with Proposal No. 3. The election of directors (Proposal No. 1) and the advisory (non-binding) vote to approve the compensation of the Company’s named executive officers for 2020 (Proposal No. 2) are considered non- routine matters under applicable rules. A broker or other nominee cannot vote without instructions on non-routine matters, and therefore, there may be broker non-votes on Proposal Nos. 1 and 2.

 

10   / Kennedy Wilson / Proxy Statement 2021

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING

 

 

 

Who pays for this proxy solicitation?

We do. In addition to sending you these materials, some of our employees may contact you by telephone, by mail, by fax, by email or in person. None of these employees will receive any extra compensation for doing this. We may reimburse brokerage firms and other custodians for their reasonable out-of-pocket costs in forwarding these proxy materials to stockholders.

Who should I contact about technical difficulties?

If you have any technical difficulties or any questions regarding the virtual meeting website, please call the support team at the numbers listed on the log-in screen. If there are any technical issues in convening or hosting the meeting, we will promptly post information to our Investor Relations website, http://ir.kennedywilson.com/, including information on when the meeting will be reconvened.

 

Kennedy Wilson / Proxy Statement 2021 /   11

PROPOSAL 1

ELECTION OF DIRECTORS

 

 

Required Vote

The affirmative vote of a majority of shares cast and present in person or represented by proxy at the meeting is required to elect each of the directors standing for election at the Annual Meeting.

 

Recommendation

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE FOUR NOMINEES FOR DIRECTOR SET FORTH HEREIN.

The Company has a classified Board of Directors which is divided into three classes, with each class elected for a term of three years. Each class of the Board of Directors is set forth below:

 

·

Richard Boucher, Norman Creighton, William J. McMorrow and Kent Mouton in the class to stand for election in 2021;

 

·

Trevor Bowen, Cathy Hendrickson and Stanley R. Zax in the class to stand for election in 2022; and

 

·

Todd Boehly, David Minella, Mary Ricks and Sanaz Zaimi in the class to stand for election in 2023.

Following the recommendation of the Nominating Committee, our Board of Directors has nominated Richard Boucher, Norman Creighton, William J. McMorrow and Kent Mouton for election at the Annual Meeting. The enclosed proxy will be voted in favor of these individuals unless other instructions are given. If elected, the nominees will serve as directors until the Company’s Annual Meeting in the year 2024, and until their successors are elected and qualified. If any nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although management knows of no reason to anticipate that this will occur), the proxies may be voted for such substitute nominees as the Board of Directors may designate.

 

12   / Kennedy Wilson / Proxy Statement 2021

DIRECTORS AND EXECUTIVE OFFICERS

The quality and diversity of our Board of Directors is key to Kennedy Wilson’s success. The Company benefits from the different perspectives offered by the Board, which includes directors of varying ages, backgrounds and hail from geographies across the U.S. and Europe that align with our global portfolio. The majority of our Board is independent and includes three women (27%) directors.

 

Set forth below is the name, age (as of April 26, 2021) and title of each director, director nominee and executive officer of the Company followed by a summary of each director’s, director nominee’s and executive officer’s background and principal occupations. Unless specifically noted or the context provides otherwise, as used throughout this section, “we,” “our,” “us” or the “Company” refer to Kennedy-Wilson, Inc. prior to, and Kennedy-Wilson Holdings, Inc. subsequent to, the closing of the merger between Prospect Acquisition Corp. and Kennedy-Wilson, Inc., which was consummated on November 13, 2009.

 

Name		Age		Position
William J. McMorrow		74		Chairman and Chief Executive Officer
Justin Enbody		40		Chief Financial Officer
Mary Ricks		56		Director and President
Matt Windisch		41		Executive Vice President
Kent Mouton		67		Director and Executive VP, General Counsel
In Ku Lee		40		Senior Vice President, Deputy GC and Secretary
Todd Boehly		47		Director
Richard Boucher		62		Director
Trevor Bowen		72		Director
Norman Creighton		85		Director
Cathy Hendrickson		74		Director
David A. Minella		68		Director
Sanaz Zaimi		51		Director
Stanley R. Zax		83		Director

Independence 73% Independent Gender 27% Women

 

Kennedy Wilson / Proxy Statement 2021 /   13

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

William J. McMorrow

Chairman and Chief Executive Officer

Committees: Capital Markets

Mr. McMorrow is Chairman and Chief Executive Officer of the Company. He has held this position since 1988 when he joined the Company. Mr. McMorrow is the architect of the Company’s expansion into real estate related investments and services. In addition to his real estate experience, Mr. McMorrow has more than 17 years of banking experience. Prior to joining the Company, he was the Executive Vice President and Chairman of the Credit Policy Committee at Imperial Bancorp and also has held senior positions with a variety of financial services companies, including eight years as a Senior Vice President of Fidelity Bank. From 2014 to 2017, Mr. McMorrow also served on the board of directors of Kennedy Wilson Europe Real Estate plc (LSE: KWE), a company that was previously externally managed by a subsidiary of the Company. Mr. McMorrow received his Bachelor of Science degree in Business as well as his MBA from the University of Southern California, where he serves as a Trustee. He helped launch the Performance Science Institute at the USC Marshall School of Business and established the Military Veterans Initiative, “With Your Shield,” which helps student veterans earn a USC degree and find employment. Mr. McMorrow has also endowed student housing in the USC Village as well as the Neighborhood Academic Initiative to provide a pathway for thousands of students in east and south LA to earn a college degree. In 2018, Mr. McMorrow received USC’s highest alumni honor, the Asa V. Call Alumni Achievement Award. Mr. McMorrow’s other philanthropic interests include supporting Loyola High School, which honored him with the Cahalan Award for Distinguished Alumni and where he served on the Board of Regents. He is also involved with the Navy SEAL Foundation, where he served as a board member until January 2021, as well as City of Hope, which honored him in 2014 at its Spirit of Life Celebration. In 2015, he was honored by the Ireland Chamber of Commerce in the United States with the Sir Michael Smurfit Business Achievement Award for his years of leadership and his contributions to Ireland, and in 2017, he received the Ellis Island Medal of Honor. The Congressional Medal of Honor Foundation recognized Mr. McMorrow with the Circle of Honor award in 2019 for his contributions to our Nation, and for representing the Foundation’s principles of courage, sacrifice and patriotism. Mr. McMorrow was selected to serve as a member of our board of directors because of his significant achievements with, and intimate knowledge of, the Company and his extensive experience in real estate and banking.

 

 

Justin Enbody

Chief Financial Officer

Mr. Enbody is Chief Financial Officer of the Company. He has held this position since 2012. He is responsible for all aspects of finance and administration for the Company, including strategic planning, accounting, tax, information technology, financial reporting and elements of risk management. Mr. Enbody joined the Company in September 2009 and was the Company’s Controller before becoming Chief Financial Officer. Prior to joining the Company, Mr. Enbody was a vice president with RAFS Inc., an independent financial consulting company which he joined in 2004. Prior to RAFS Inc., Mr. Enbody was a senior associate with KPMG LLP. Mr. Enbody received a B.A. from the University of California at Santa Barbara.

 

14   / Kennedy Wilson / Proxy Statement 2021

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

Mary Ricks

Director and President

Committees: None

Ms. Ricks is President of the Company and also serves on our board of directors. Prior to her role as President of the Company she served as the President and CEO of Kennedy Wilson Europe, a business she helped establish in 2011. Ms. Ricks joined Kennedy Wilson in 1990 and from 2002 she headed the Company’s commercial investment group as well as ran its operations in Australia and Japan. From 2014 to 2017, Ms. Ricks served on the board of directors of Kennedy Wilson Europe Real Estate Plc, an LSE-listed real estate company that was previously externally managed by a subsidiary of Kennedy Wilson. In 2014 she was selected by PERE as Industry Figure of the Year for Europe and in 2018 she was named by Bisnow as one of the most influential women in real estate across the UK. Ms. Ricks has been named by the L.A. Business Journal as one of the top women in commercial real estate and was featured on the covers of Forum Magazine and Real Estate California recognizing women at the top of the field. Ms. Ricks is a founding board member of the Richard S. Ziman Centre for Real Estate at UCLA. She received a B.A. in Sociology from UCLA. Ms. Ricks was selected to serve as member of our board of directors because of her extensive experience in real estate in the United States and Europe.

 

 

Matt Windisch

Executive Vice President

Mr. Windisch is Executive Vice President of the Company. He has held this position since 2012. Mr. Windisch joined the Company in 2006 and spearheads the Company’s public capital market activities, debt investment platform, corporate and transaction capital raising, strategic planning and acquisitions analysis. He is also responsible for maintaining the company’s key investor and banking relationships. Prior to joining the Company, he was an associate at JP Morgan Chase, where he held positions in investment banking, strategy and risk management. Mr. Windisch received a B.B.A. in Finance and Accounting from Emory University and an M.B.A. from UCLA’s Anderson School of Management.

 

 

Kent Mouton

Director and Executive Vice President, General Counsel

Committees: None

Mr. Mouton is General Counsel of the Company and also serves on our board of directors. He has held the General Counsel position since 2011 when he joined the Company. As General Counsel, Mr. Mouton oversees all legal affairs of the Company and participates in corporate compliance and risk management oversight. Mr. Mouton also has served as a director of the Company since 1995. Prior to joining the Company, Mr. Mouton was a co-owner and managing partner of Kulik, Gottesman, Mouton & Siegel LLP, a real estate, business and entertainment law firm in Los Angeles. His practice included negotiating, structuring and documenting transactions in commercial real estate acquisitions and dispositions, financing, joint ventures and syndications, leasing and development and general corporate matters. Mr. Mouton is a member of the bar associations of the State of California and was an adjunct professor of real estate law at UCLA Extension for 27 years. In 2012, the Los Angeles Daily Journal named Mr. Mouton as one of the top 30 real estate lawyers in the State of California. Mr. Mouton graduated from the University of California, Los Angeles with a B.A. in Economics (Summa Cum Laude, Phi Beta Kappa and Dean’s List) and received his law degree from the University of California, Los Angeles. Mr. Mouton was selected to serve as a member of our board of directors because of his experience and knowledge relating to the legal and financial aspects of real estate investments and his significant experience in public and private company advisory and governance activities.

 

Kennedy Wilson / Proxy Statement 2021 /   15

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

In Ku Lee

Senior Vice President, Deputy General Counsel and Secretary

Mr. Lee is Senior Vice President, Deputy General Counsel and Secretary of the Company. He has held this position since 2013 when he joined the Company. Mr. Lee heads all of the Company’s public company regulatory and corporate governance matters and currently serves as the Chief Compliance Officer of KW Investment Adviser, LLC. Mr. Lee is also responsible for all legal aspects of the Company’s corporate and transaction capital raising, including public and private offerings of equity and debt. Prior to joining Kennedy Wilson, Mr. Lee served as global corporate counsel at SK Telecom / SK Planet from 2011 to 2013, where he was the lead counsel on multiple cross-border transactions. Prior to such position, Mr. Lee was a senior associate at Latham & Watkins LLP. Mr. Lee is a member of the bar associations of the State of California and Los Angeles County. Mr. Lee received his B.A. in Economics from Occidental College and his J.D. from Cornell Law School.

 

 

Todd Boehly

Director

Committees: Capital Markets

Mr. Boehly has served as a director of the Company since 2020. Mr. Boehly serves as the Co-Founder, Chairman, Chief Executive Officer and controlling member of Eldridge Industries, LLC (“Eldridge”). Eldridge and its affiliates invest in businesses across the Insurance, Credit, Technology, Real Estate, Sports, Media, and Consumer landscapes. Mr. Boehly also currently serves as Chairman of Security Benefit Corporation, and MRC, which owns dick clark productions, and has investments in A24, Fulwell 73, and Penske Media, which owns Billboard, Rolling Stone, Variety, and The Hollywood Reporter; and he serves on the board of directors of Horizon Acquisition Corporation (NYSE:HZAC), and Horizon Acquisition Corporation II (NYSE:HZON), both of which he founded. Mr. Boehly also serves on the board of Cain International. Mr. Boehly was appointed to the Board in connection with a stock purchase agreement with Quinton Heights, LLC and Security Benefit Life Insurance Company, both affiliates of Eldridge, whereby the Company issued shares of perpetual convertible preferred stock of the Company in exchange for approximately $300 million in proceeds. Mr. Boehly is also an owner of the Los Angeles Dodgers, the Los Angeles Sparks, Cloud9, and DraftKings. Prior to founding Eldridge, Mr. Boehly was the President of Guggenheim Partners and founded the credit business at Guggenheim. Mr. Boehly received his B.B.A. from the College of William & Mary, where he later founded the Boehly Center for Excellence in Finance, and studied at the London School of Economics. Mr. Boehly supports epilepsy research, Focused Ultrasound Foundation, Prostate Cancer Foundation, Brunswick School, and the College of William & Mary. Mr. Boehly was selected to serve as a member of our board of directors because of his significant experience in the financial industry, particularly relating to investment strategies and operating businesses and his deep understanding of global capital and financial markets.

 

16   / Kennedy Wilson / Proxy Statement 2021

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

Richard Boucher

Director

Committees: Capital Markets (Chair)

Mr. Boucher has served as a director of the Company since 2018. Mr. Boucher served as Group Chief Executive Officer and Executive Director of the Bank of Ireland Group from February 2009 until his retirement in October 2017. Mr. Boucher joined the Bank of Ireland Group in 2004 where he also served as the Chief Executive of Retail Financial Services Ireland and as the Chief Executive for Corporate Banking. Prior to joining the Bank of Ireland Group, Mr. Boucher served as Regional Managing Director for Corporate Banking, London and South East England for the Royal Bank of Scotland. From 2017 to May 2019, Mr. Boucher has also served as a member of the board of directors of Atlas Mara plc (LSE: ATMA), a financial services company that operates in Africa. During that time, Mr. Boucher also served as the chairman of Atlas Mara’s renumeration committee and as a member of the risk and audit committees. Since 2018, Mr. Boucher has also served as a member of the board of directors of CRH plc (LSE: CRH), an international building materials company and since January 2020, Mr. Boucher serves as the chairman of CRH plc’s board. In October 2020, Mr. Boucher also joined as a member of the board of directors of ClonBio Group Limited, an agribusiness. Mr. Boucher also currently serves as a member of CRH plc’s renumeration, risk and acquisition committees. Since 2017, Mr. Boucher has also served as a member of the board of directors of Eurobank Ergasia SA (Athens: EUROB), a Greek bank and has also served as the chairman of its risk committee and as a member of its audit committee. Mr. Boucher received his B.A. (Mod) in Economics from Trinity College. Mr. Boucher was selected to serve as a member of our board of directors because of his significant experience in business transactions in Europe and his deep understanding of the global capital and financial markets.

 

 

Trevor Bowen

Director

Committees: Capital Markets

Mr. Bowen has served as director of the Company since 2018. Mr. Bowen served as a director and part owner of Principle Management Limited, an entertainment management company, from 1996 to 2013. Prior to joining Principle Management Limited, Mr. Bowen served as a partner at KPMG Ireland for 11 years with responsibility for KPMG Ireland’s banking practice. From 2018, Mr. Bowen also served as a member of the board of directors of Ceiba Investments Ltd. (LSE: CBA), an investment company, and has also served as the chairman of its audit committee. In October 2020, Mr. Bowen was appointed Chairman of Round Hill Music Royalty Fund Limited, a private equity firm focused on investing in music copyrights. From 2004 to 2013, Mr. Bowen also served as a member of the board of directors of Ulster Bank and also served on its risk committee. From 2009 to 2011, Mr. Bowen served as a member of the board of directors of Readymix plc, a building materials company. Mr. Bowen received his B.B.S. in Business. Mr. Bowen was selected to serve as a member of our board of directors because of his significant experience in the public accounting profession and his extensive and diverse background in business transactions in Europe.

 

Kennedy Wilson / Proxy Statement 2021 /   17

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

Norman Creighton

Director

Committees: Audit, Compensation (Chair) and Nominating

Mr. Creighton has served as a director of the Company since 2004. From 1975 to 2001, Mr. Creighton was employed with Imperial Bank, serving as its President and Chief Executive Officer from 1983 to 2001. During Mr. Creighton’s tenure with Imperial Bank, its assets increased from approximately $200 million in 1975 to approximately $7 billion in 2001. Prior to Imperial Bank, Mr. Creighton served as Regional Vice President for Southern Arizona of Great Western Bank from 1971 to 1974. From 1958 to 1971, Mr. Creighton was employed with Arizona Bank, including as Manager of the Tucson Headquarters. Mr. Creighton also served as a member of the board of directors of Square 1 Bank from 2004 to 2015. Mr. Creighton holds a B.S. in banking and finance from the University of Montana. Mr. Creighton was selected to serve as a member of our board of directors because of his extensive experience and knowledge of business, accounting and the banking industry.

 

 

Cathy Hendrickson

Director

Committees: Compensation and Nominating (Chair)

Ms. Hendrickson has served as a director of the Company since 2004. Ms. Hendrickson has 44 years of experience in commercial banking. From 1993 to 2010, Ms. Hendrickson served as President and Chief Executive Officer of Bay Cities National Bank. Ms. Hendrickson concurrently served as President and Chief Executive Officer of Peninsula Banking Group, Inc. and sat on the boards of Bay Cities National Bank, Peninsula Banking Group, and Community First Financial Group, Inc. Ms. Hendrickson holds a B.S. in business administration with an emphasis in finance from the University of California, Berkeley. Ms. Hendrickson was selected to serve as a member of our board of directors because of her extensive experience as a high-level executive in the banking and financial industries.

 

 

David A. Minella

Director (Lead Independent)

Committees: Audit (Chair), Compensation, Nominating and Capital Markets

Mr. Minella has served as a director of the Company since 2009. Mr. Minella is currently the Managing Member of Minella Capital Management, a financial services holding company investing in and developing joint venture arrangements in the asset management industry. Mr. Minella also currently serves on the board of directors and as the audit committee chair of Horizon Acquisition Corporation, a blank check company with a focus on differentiated financial services and financial services-adjacent platforms, where he serves on the audit, compensation and nominating committees. From 2011 to 2014, Mr. Minella served as the Chief Executive Officer of Aligned Asset Managers, LLC, or Aligned, a financial services holding company. Aligned’s first acquisition was a majority interest in The Townsend Group, a real asset manager and consultant. Mr. Minella served as Prospect Acquisition Corp’s Chairman and Chief Executive Officer from its inception in July 2007 through November 2009 and has served as a director of the Company since November 2007. Between 1997 and March 2007, Mr. Minella served as the Chief Executive Officer and director of Value Asset Management LLC, or VAM, a strategic investment management holding company. At VAM, Mr. Minella was responsible for its overall business strategy, acquisitions and financial results, and under his leadership, VAM acquired a controlling interest in five separate investment management firms. From 1995 to 1997, Mr. Minella was the President and Chief Executive Officer of the asset management division of Liechtenstein Global Trust, or LGT, a wealth and asset management firm, where he was responsible for the overall business strategy and financial results. Mr. Minella originally joined LGT in 1987 as the head of its United States subsidiaries, GT Capital Management

 

18   / Kennedy Wilson / Proxy Statement 2021

DIRECTORS AND EXECUTIVE OFFICERS

 

 

 

and GT Global. Mr. Minella is a member of the Executive Council at Bunker Hill Capital Management, a private equity firm in Boston, Massachusetts, the former Chairman of the board of directors of MDT Advisers LLC and a former board member of the Investment Company Institute. Mr. Minella received a B.S. in accounting from Bentley College. Mr. Minella was selected to serve as a member of our board of directors because of his significant financial industry experience, particularly relating to investment strategies and asset management.

 

 

Sanaz Zaimi

Director

Committees: None

Ms. Zaimi has served as a director of the Company since 2018. Ms. Zaimi currently serves as the Head of Global Fixed Income, Currencies and Commodities (FICC) Sales, within Bank of America Merrill Lynch (“BofAML”). Based in Paris, Sanaz also serves as CEO of BofA Securities Europe S.A., BofAML’s EU broker-dealer, and Country Executive for France. She joined BofAML in 2010 from Goldman Sachs, where she was a partner and previously held positions at Deutsche Bank and Smith Barney. Ms. Zaimi has extensive industry knowledge, with over two decades of experience in financial markets. Ms. Zaimi served as an Executive Director on the Board of Merrill Lynch International (MLI). She also served as a founder member of the industry’s FICC Market Standards Board (FMSB) until May 2017. Ms. Zaimi currently sits on a number of BofAML’s senior executive committees globally, including the Operating Committee at Bank of America, the Global Banking and Markets (GBAM) Management Committee, the GBAM Global Reputation Risk Committee and the firm’s Global Environment, Social and Governance (ESG) Committee. She actively promotes BofAML’s commitment to diversity and inclusion and personally supports a number of philanthropic organizations focusing on women and children. Ms. Zaimi holds a degree in Economy and Finance and a Masters of Philosophy in Finance from Paris-Sorbonne University. Ms. Zaimi was selected to serve as a member of our board of directors because of her significant experience in business transactions in Europe and her deep understanding of the global capital and financial markets.

 

 

Stanley R. Zax

Director

Committees: Audit, Capital Markets and Compensation

Mr. Zax has served as a director of the Company since 2010. Mr. Zax was the Chairman and CEO of Zenith National Insurance Corp., or Zenith, a company engaged in insurance and reinsurance, from 1977 to 2012. Zenith was acquired by Fairfax Financial Holdings Limited in 2010. Mr. Zax also served as a director of 1st Century Bank, Los Angeles and the Prostate Cancer Foundation until 2016 and The Center for The Study of the Presidency and Congress in Washington, D.C until 2017. Mr. Zax started his career in 1961 as an associate and later a partner with the Chicago law firm Friedman, Mulligan, Dillon & Uris and subsequently joined Hilton Hotels, where he served as Vice President, General Counsel, Director and Secretary. His association with the insurance industry started in 1973, when he served as President and Chief Executive of Great American Insurance Company. Mr. Zax served as a director of Wynn Resorts Ltd., a holding company of Wynn Las Vegas, and Wynn Macao from October 2002 to May 8, 2007, and as chairman of its audit committee. He served as a Non-Executive Director of Advent Capital (Holdings) Plc, London, England from 1999 to November 10, 2005. Mr. Zax earned a JD in 1961 and a BBA in 1958 from the University of Michigan at Ann Arbor. Mr. Zax was selected to serve as a member of our Board of Directors because of his extensive experience relating to the management and operations of public companies.

 

Kennedy Wilson / Proxy Statement 2021 /   19

DIRECTOR COMPENSATION

The 2020 non-employee director compensation program remained unchanged from 2019. In 2020, each non-employee director received an annual retainer fee of $150,000. The chairpersons of the audit committee, compensation committee, nominating committee and capital markets committee received additional annual retainer fees of $20,000, $10,000, $10,000 and $10,000, respectively. During 2020, non-employee directors received annual equity awards in the form of 8,000 shares of restricted stock that vest over a three-year period, subject to continued service as a non-employee director through the applicable vesting date. Mr. Boehly, as a newly appointed non-employee director in 2020, also received an initial equity award in the form of 7,000 shares of restricted stock that vest over a three-year period.

The following table provides compensation information for the fiscal year ended December 31, 2020 for each non- employee member of our Board of Directors:

 

		Fees Earned or Paid in				Stock				Option				All Other
Name(1)		Cash				Awards(2)				Awards				Compensation(3)				Total
Todd Boehly		$	120,742			$	223,050			$	—			$	—			$	343,792
Richard Boucher			160,000				181,200				—				4,250				345,450
Trevor Bowen			150,000				181,200				—				4,250				335,450
Norman Creighton			150,000				181,200				—				24,828				356,028
Cathy Hendrickson			160,000				181,200				—				24,828				366,028
David Minella			160,000				181,200				—				24,828				366,028
Jerry Solomon (4)			29,670				181,200				—				32,688				243,558
John Taylor			170,000				181,200				—				11,167				362,367
Sanaz Zaimi			150,000				181,200				—				11,167				342,367
Stanley Zax			150,000				181,200				—				24,828				356,028

 

(1)	Ms. Ricks and Messrs. McMorrow and Mouton did not receive any director fees during 2020.

(2)

The amounts in this column reflect the aggregate grant date fair value of an award of 8,000 or 15,000 (as applicable) shares of restricted stock granted to our non-employee directors in 2020, computed in accordance with ASC Topic 718. Information regarding the valuation assumptions that are used to calculate these values is included in Note 13 of the Company’s financial statements for the fiscal year ended December 31, 2020 contained in the Company’s annual report on Form 10-K. The aggregate number of restricted stock units and shares of restricted stock outstanding at December 31, 2020 for each of our non-employee directors is set forth in the table below. Each award of restricted stock and each award of restricted stock units held by our non-employee directors will vest with respect to 33% of the restricted shares or restricted stock units on each of the first through third anniversaries of the date of grant, subject to accelerated vesting in the event of a “change in control” (as defined in the Second Amended and Restated 2009 Equity Participation Plan), or the director’s ceasing to serve on the Board by reason of death or disability. The Company also maintains a non-employee director retirement policy pursuant to which, upon a non-employee director’s retirement (as determined by the Board of Directors), his or her then-outstanding equity awards will vest in full (to the extent then-unvested).

 

 

(3)	Reflects payments of dividends on unvested shares of restricted stock to each non-employee director. Such dividends are paid to each non-employee director as the underlying restricted stock vests.

(4)	Mr. Solomon retired from the Board of Directors effective March 12, 2020.

 

20   / Kennedy Wilson / Proxy Statement 2021

CORPORATE GOVERNANCE AND BOARD MATTERS

We believe a company’s reputation for integrity and responsibly serving its stockholders is of critical importance. Kennedy Wilson’s corporate governance structure is designed to cohesively promote principled actions, support informed and effective decision-making and provide appropriate monitoring and oversight, thereby helping us to continue to build and maintain public trust in the Company. We are committed to managing the Company for the benefit of our stockholders and are focused on maintaining good corporate governance to assure that the long-term interests of stockholders are being served. In April 2021, the Board resolved to decrease the size of the Board from twelve members to eleven members after the passing of John Taylor, a member of our Board and the chairperson of the Audit Committee of the Board.

Director Independence

Our common stock is listed on the New York Stock Exchange (the “NYSE”). A majority of the members of our Board of Directors must be independent under Section 303A.01 of the listing standards of the NYSE. Section 303A.02 of the NYSE listing standards provides that no director can qualify as independent unless the Board of Directors affirmatively determines that the director has no material relationship with the listed company. Our Board of Directors has adopted the following standards in determining whether or not a director has a material relationship with the Company and these standards are contained in our Corporate Governance Guidelines which can be found on our website at www.kennedywilson.com and will be made available in print free of charge to any stockholder who requests it:

 

·

No director who is an employee or a former employee of the Company can be independent until three years after termination of such employment.

 

·

No director who is, or in the past three years has been, affiliated with or employed by the Company’s present or former independent auditor can be independent until three years after the end of the affiliation, employment or auditing relationship.

 

·

No director can be independent if he or she is, or in the past three years has been, part of an interlocking directorship in which an executive officer of the Company serves on the compensation committee of another company that employs the director.

 

·

No director can be independent if he or she is receiving, or in the last three years has received, more than $120,000 during any 12-month period in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).

 

·

Directors with immediate family members in the foregoing categories are subject to the same three-year restriction.

 

·

No director can be independent if he or she is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues.

Based on these independence standards and all of the relevant facts and circumstances, our Board of Directors determined that none of the following directors had any material relationship with the Company and, thus, are independent under Section 303A.02 of the listing standards of NYSE: Todd Boehly, Richard Boucher, Norman Creighton, Cathy Hendrickson, David Minella, Sanaz Zaimi and Stanley R. Zax. Mr. John Taylor was also an independent member of our Board of Directors prior to his passing in 2021. In accordance with NYSE rules, a majority of our Board of Directors is independent.

 

Kennedy Wilson / Proxy Statement 2021 /   21

CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

 

In recommending to our Board of Directors that each non-employee director be found independent, our Nominating Committee reviewed and considered the following relationship over the past three fiscal years:

 

·

Mr. Boehly is the Co-Founder, Chairman, Chief Executive Officer and controlling member of Eldridge Industries, LLC (“Eldridge”). The Company is party to a stock purchase agreement with Quinton Heights, LLC and Security Benefit Life Insurance Company (collectively, the “Purchasers”), both affiliates of Eldridge, whereby the Company issued shares of perpetual convertible preferred stock of the Company in exchange for approximately $300 million in proceeds. Also, Mr. Boehly, directly or indirectly has an excess of 10% equity interest in each of the Purchasers, Eldridge, Security Benefit Corporation and Cain International and their subsidiaries (together, the “Eldridge Entities”), some of which are involved in transactions with the Company or its subsidiaries (“KW Entities”). These transactions may involve various fees which the KW Entities may make to certain of the Eldridge Entities or certain of the Eldridge Entities may make to the KW Entities.

 

·

Ms. Zaimi is the Head of Global Fixed Income, Currencies and Commodities Sales at Bank of America Merrill Lynch (“BAML”), which provides credit and other commercial banking services to the Company. BAML also served as a financial adviser to the Company in connection with its acquisition of Kennedy Wilson Europe Real Estate plc in 2017.

All matters relating to the abovementioned relationships fall within the standards set forth in our Corporate Governance Guidelines, including the monetary thresholds set forth in the guidelines. This matter is more fully discussed below under “Certain Relationships and Related Transactions.”

Board Leadership Structure and Role in Risk Oversight

The Board of Directors is responsible for risk oversight of the Company. Risks facing the Company include competitive, economic, operational, financial, accounting, liquidity, tax, regulatory, foreign country, health and safety (including risks associated with contagious viruses and pandemics), employment, cybersecurity, political and other risks. Risks are reported to the Board of Directors through the Company’s executive officers, who are responsible for the identification, assessment and management of the Company’s risks. The Board of Directors regularly discusses the risks reported by the Company’s executive officers and reviews with management strategies and actions to mitigate the risks and the status and effectiveness of such strategies and actions.

Our Chief Executive Officer also serves as Chairman of our Board of Directors. Our Board of Directors believes that our Chief Executive Officer is best situated to serve as Chairman because he is the director that is most familiar with our business and industry, possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing us and is therefore best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most important matters. Our independent directors bring experience, oversight and expertise from outside the Company and industry, while our Chief Executive Officer brings Company-specific experience and expertise. Our Board of Directors believes that the combined role of Chairman and Chief Executive Officer facilitates information flow between management and the Board, which we believe is critical to effective governance. Our Board of Directors appointed David Minella as our lead independent director. As discussed below, Mr. Minella serves as the chair of all executive sessions of our non-management directors.

To efficiently oversee the Company’s risks, the committees of the Board of Directors are tasked with oversight responsibility for particular areas of risk. For example, the Audit Committee oversees management of risks related to accounting, auditing, financial reporting, IT matters (including cybersecurity and related matters) and maintaining effective internal controls for financial reporting. The Compensation Committee oversees risks related to the Company’s executive compensation policies and practices. The Nominating Committee oversees risks related to the effectiveness of the Board of Directors. The Capital Markets Committee oversees risks related to the Company’s capital market activities, foreign currency exposure and debt.

 

22   / Kennedy Wilson / Proxy Statement 2021

CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

 

Meetings of the Board of Directors

In 2020, the Board of Directors held eleven meetings and no director that held such position during 2020 attended fewer than 75% of the aggregate of: (i) the total number of meetings of the board of directors and (ii) the total number of meetings held by all committees of the board on which a director served on. The Board of Directors also hold regular executive sessions of the non-employee members of the board as discussed in further detail below. It is our policy to invite our directors and director nominees to attend our Annual Meetings. Twelve members of our Board of Directors attended our 2020 Annual Meeting.

Board Committees

Our Board of Directors has an Audit Committee, a Compensation Committee, a Nominating Committee and a Capital Markets Committee.

Audit Committee

The Audit Committee operates under a written charter. The Audit Committee charter can be found on our website at www.kennedywilson.com and will be made available in print free of charge to any stockholder who requests it.

The Audit Committee charter states that the responsibilities of the Audit Committee shall include, among other things, to assist the Board of Directors in monitoring (i) the integrity of the annual, quarterly and other financial statements of the Company, (ii) the independent auditor’s qualifications and independence, (iii) the performance of the Company’s internal audit function and independent auditor and (iv) the compliance by the Company with legal and regulatory requirements. The Audit Committee also reviews and approves all related-party transactions (defined as transactions with an executive officer, director, beneficial owner of more than 5% of our outstanding common stock, or any of such persons’ immediate family members in which the amount involved exceeds $120,000, and in which any such persons had or will have a direct or indirect material interest) and prepares the report required by the rules of the Securities and Exchange Commission, or the SEC, to be included in the Company’s annual proxy statement.

Pursuant to its charter, the Audit Committee meets at least quarterly. The Audit Committee met five times during 2020. The Company does not limit the number of audit committees of other companies on which its Audit Committee members can serve.

The members of the Audit Committee during 2020 were John Taylor (chairperson), Norman Creighton, David Minella and Jerry Solomon. As of March 2020, after the retirement of Mr. Solomon from the Company’s Board of Directors, the members of the Audit Committee were John Taylor (chairperson), Norman Creighton and David Minella. As of April 2021, after the passing of Mr. Taylor, the members of the Audit Committee are Norman Creighton, David Minella and Stanley Zax and Mr. Minella was appointed chairperson of the Audit Committee. Each of the above-listed Audit Committee members is considered “independent” under Section 303A.02 of the listing standards of the NYSE, as determined by our Board of Directors.

Our Board of Directors has determined that both Stanley Zax and Norman Creighton are “audit committee financial experts”, as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and John Taylor was an “audit committee financial expert”.

Compensation Committee

The members of the Compensation Committee during 2020 were David Minella (chairperson), Norman Creighton, Cathy Hendrickson and Stanley Zax. Effective April 2021, Mr. Creighton was appointed chairperson of the Compensation Committee after Mr. Minella’s appointment as chairperson of the Audit Committee. The Compensation Committee met five times during 2020. Each of the current members of the Compensation Committee is considered “independent” under Section 303A.02 of the listing standards of the NYSE, as determined by our Board of Directors. The Compensation Committee operates under a written charter. The Compensation Committee charter can be found on our website at www. kennedywilson.com and will be made available in print free of charge to any stockholder who requests it.

 

Kennedy Wilson / Proxy Statement 2021 /   23

CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

 

The Compensation Committee has overall responsibility for evaluating and approving the Company’s compensation plans, policies and programs. The Compensation Committee evaluates the performance of the Chief Executive Officer and other executive officers and, based on such evaluation, reviews and approves the compensation of the Chief Executive Officer and other executive officers. The Compensation Committee may consult with the Chief Executive Officer regarding the amount or form of the compensation for the other executive officers. The Compensation Committee may also form and delegate certain responsibilities to subcommittees. The Compensation Committee also reviews and recommends to the full Board of Directors compensation of directors. The Compensation Committee administers our Second Amended and Restated 2009 Equity Participation Plan.

Nominating Committee

The members of the Nominating Committee during 2020 were Cathy Hendrickson (chairperson), Norman Creighton and David Minella. Each of the current members of the Nominating Committee is considered “independent” under Section 303A.02 of the listing standards of the NYSE, as determined by our Board of Directors. The Nominating Committee met two times during 2020. The Nominating Committee operates under a written charter. The Nominating Committee charter can be found on our website at www.kennedywilson.com and will be made available in print free of charge to any stockholder who requests it.

The purpose of the Nominating Committee is to, among other things, discharge the responsibilities of our Board of Directors relating to the appropriate size, functioning and needs of our Board of Directors, including, but not limited to, recruitment and retention of high-quality board members and the composition and structure of committees of the Board of Directors.

The Nominating Committee will consider director candidates recommended by security holders based upon the policies set forth in the Nominating Committee charter. Stockholders who wish to recommend to the Nominating Committee a candidate for election should send a letter to Kennedy-Wilson Holdings, Inc., 151 S. El Camino Blvd., Beverly Hills, CA 90212, ATTN: Nominating Committee. The letter must set forth certain biographical information regarding the nominees as specified in the Nominating Committee charter. Recommendations by security holders must be received no later than thirty (30) days after the end of the Company’s fiscal year.

Candidates will be reviewed in the context of the current composition of the Board of Directors, the operating requirements of the Company and the long-term interests of the Company’s stockholders. Although there are no specific minimum qualifications or any specific qualities or skills that the Nominating Committee believes that the potential nominees must have, the Nominating Committee considers and evaluates each candidate based upon an assessment of certain criteria as set forth in the Nominating Committee charter. Although diversity may be a consideration in the nomination process, the Nominating Committee does not have a formal policy with regard to the consideration of diversity in identifying director nominees.

The Nominating Committee does not have a formal procedure for identifying or evaluating director nominees except as set forth in the Nominating Committee charter. A potential director nominee recommended by a security holder will not be evaluated any differently than any other potential nominee. Although it has not done so in the past, the Nominating Committee may retain search firms to assist in identifying suitable director candidates.

Capital Markets Committee

The Board of Directors formed the Capital Markets Committee in January 2019. The members of the Capital Markets Committee during 2020 were Richard Boucher (chairperson), Trevor Bowen, William McMorrow, David Minella and Stanley Zax. As of March 2020, the members of the Capital Markets Committee are Todd Boehly, Richard Boucher (chairperson), Trevor Bowen, William McMorrow, David Minella, and Stanley Zax. A majority of the members of the Capital Markets Committee are independent members of the Board of Directors. The Capital Markets Committee met six times during 2020. The Capital Markets Committee operates under a written charter. The Capital Markets Committee charter can be found on our website at www.kennedywilson.com and will be made available in print free of charge to any stockholder who requests it.

 

24   / Kennedy Wilson / Proxy Statement 2021

CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

 

The purpose of the Capital Markets Committee is to provide assistance to the Board of Directors of the Company in monitoring and overseeing the policies and activities of the Company and its subsidiaries relating to the Company’s capital markets activities, including equity and debt offerings. As set forth in the Capital Markets Committee charter, in discharging its responsibilities and duties, among other things, the Capital Markets Committee: (i) reviews management’s plans and recommendations with respect to public equity and debt offerings and recommends any actions to be taken by the Board of Directors that it deems advisable and in the best interests of the Company, (ii) reviews management’s plans and recommendations with respect to corporate mergers and acquisitions and recommends any actions to be taken by the Board of Directors that it deems advisable and in the best interests of the Company; and (iii) unless otherwise specified by the Board of Directors, acts as the pricing or special committee for all public equity and debt offerings to be undertaken by the Company or acts as the transaction committee for all corporate mergers and acquisition transactions to be taken by the Company.

Executive Sessions

Under the NYSE listing company manual, our non-management directors are required to hold regular executive sessions. The chairperson of the executive sessions is David Minella. Interested parties may communicate directly with the presiding director of the executive session or with the non-management directors as a group, by directing such written communication to the Secretary of the Company, c/o Kennedy-Wilson Holdings, Inc., 151 S. El Camino Blvd., Beverly Hills, CA 90212.

Process for Sending Communications to the Board of Directors

The Board of Directors maintains a process for stockholders to communicate with the Board of Directors. Stockholders wishing to communicate with the Board of Directors or any individual director must mail a communication addressed to the Secretary of the Company, c/o Kennedy-Wilson Holdings, Inc., 151 S. El Camino Blvd., Beverly Hills, CA 90212. Any such communication must state the number of shares of common stock beneficially owned by the stockholder making the communication. All of such communications will be forwarded to the full Board of Directors or to any individual director or directors to whom communication is directed unless the communication is clearly of a marketing nature or is inappropriate, in which case we have the authority to discard the communication or take appropriate legal action regarding the communication.

Code of Ethics

Our Board of Directors has adopted a code of ethics that applies to our directors, officers and employees. A copy of the code of ethics can be found on our website at www.kennedywilson.com and will be made available in print free of charge to any stockholder who requests it.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our officers, directors and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. Based solely upon our review of the Forms 3 and 4 and amendments thereto furnished to us during the fiscal year ended December 31, 2020, and Forms 5 and amendments thereto furnished to us with respect to the fiscal year ended December 31, 2019, we believe that, during the fiscal year ended December 31, 2020, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were met in a timely manner.

 

Kennedy Wilson / Proxy Statement 2021 /   25

ESG AT KENNEDY WILSON: A COMMITMENT TO RESPONSIBLE INVESTING AND OPERATIONS

Kennedy Wilson’s ESG program reflects our collective commitment to managing sustainability opportunities, minimizing our environmental impact and doing our part to enhance the communities where we operate across our global business. This delivers long-term social, environmental and economic value across our portfolio and to our key stakeholders. Kennedy Wilson’s ESG program and the way the Company reports ESG activities continues to evolve and as a result of our increased efforts, Kennedy Wilson earned recognition as one of the Most Responsible Companies in America by Newsweek in 2020.

 

We believe that strong governance is the foundation for delivering on our social and environmental agendas. The Corporate Environmental, Social and Governance (ESG) Committee of Kennedy-Wilson is a cross-functional management-level committee formed to support the Company’s ESG responsibilities and commitments to our stakeholder groups, including investors, employees, our tenants and communities. The committee, chaired by President and Board of Directors member Mary Ricks, sets appropriate global ESG priorities, monitors progress and results against targets, and supports communications, including external corporate memberships and benchmarks.

Our ESG program focuses on four pillars: Creating Great Places – for people to live, work and thrive; Building Communities – for a prosperous society; Optimizing Resources – for a healthy environment and a productive business; Operating Responsibly – for a healthy work environment built on transparency and accountability.

 

		We create great places for people to live, work and thrive, focusing on enriching our tenants’ experiences by bridging the gap between home, workplace and community, and being at the forefront of heritage preservation, where relevant. We build apartment communities across the Western U.S., Ireland and the UK that people love to live in, with spaces and amenities designed to promote health and wellness, celebrate local cultural and enhance the lives of residents living in our communities. We also incorporate spaces for rest and socialization across our global multifamily portfolio, including clubhouses, fitness centers, business suites, outdoor play areas, pools and dog parks.   Within Kennedy Wilson’s commercial portfolio, we target certifications that highlight our commitment to supporting employee well-being at our properties, including the international WELL and fitwel standards that recognize well-being features including materials with low-volatile organic compound emissions, improved daylight, air and water quality monitoring and internal mobility.
		We build communities within and around our assets and in the major cities where we operate to support communities to prosper and grow. We do this through resident interaction, community development, charitable giving and collaborating with partners. Our philanthropic efforts are directed through the Kennedy Wilson Charitable Foundation, a 501(c)(3) non-profit corporation, which awarded nearly $1.7 million in grants and gifts to qualifying nonprofit, civic or educational public charities in 2020. The committee that approves distributions from the Foundation includes an independent member of the Board of Directors.   Recognizing the considerable need for affordable, high-quality housing across the West Coast, Kennedy Wilson’s joint venture with Vintage Housing provides affordable housing for residents that make 50% to 60% of the area’s median income. The joint venture, launched in 2015 with a portfolio of 5,500 units, provides long-term living solutions for qualified working families and active senior citizens, coupled with community services and modern amenities. The Vintage Housing platform is expected to grow

AMERICA’S MOST RESPONSIBLE COMPANIES 2021 Newsweek statista Creating Great Places for people to live, work and thrive Building Communities for a prosperous society

 

26   / Kennedy Wilson / Proxy Statement 2021

ESG AT KENNEDY WILSON: A COMMITMENT TO RESPONSIBLE INVESTING AND OPERATIONS

 

 

 

to 10,000 units in the next several years. Kennedy Wilson has also invested in Langdon Park Capital, a newly launched platform focused on addressing the unmet demand for high-quality housing and well-operated business facilities in historically underserved Black and Latino communities across the United States. A series of funds through Langdon Park Capital will focus on commercial and multifamily real estate investment to enhance communities.
		We optimize resources with a focus on environmental stewardship, ensuring that a healthy environment contributes to a productive business. Through the efficient use of resources, we look to reduce operating costs, reduce carbon emissions and future-proof our assets. In 2020, we continued expanding our global utility monitoring program to cover our directly managed portfolio in Europe and the United States. We take a building-by-building approach to optimizing resources, first through measuring usage, identifying cost-efficient initiatives, and then upgrading systems within our broader asset management programs.   Kennedy Wilson is a Gold Member of the U.S. Green Building Council and we target certifications under LEED (Leadership in Energy and Environmental Design) for our major remodel and ground-up commercial development projects across our global portfolio. In 2020, our Irish headquarters at 94 St Stephen’s Green was granted LEED Platinum status as a result of Kennedy Wilson’s refurbishment of the building, the highest accreditation under LEED certification. In our European development portfolio, we target certifications across LEED and/or BREEAM (Building
Research Establishment Environmental Assessment Method) for our mixed-use and commercial properties, as well as NZEB (net-zero energy building), fitwel and WELL Building Standard certifications at our large-scale mixed-use projects in Ireland and the UK. We also aim to have projects in Europe target a Wired Score rating. Across our U.S. portfolio, we target Energy Star certification at select commercial and multifamily assets and are pursuing Green Globe certifications at many of our West Coast multifamily properties.
		We operate responsibly to ensure business-wide transparency and accountability, with a clear focus on empowering people and providing a healthy work environment for our employees. In addition to providing significant employee benefits and training opportunities, we strive to maintain a diverse corporate culture, promoting equality across gender, socio-economic backgrounds, education and ethnicity. This allows for better representation of viewpoints, historical perspective and can bring new, fresh ideas to all levels of the Company.   The quality and diversity of our Board of Directors is key to Kennedy Wilson’s success. Our Board brings valuable market knowledge, representing significant expertise in real estate, banking, financial services, accounting and auditing, insurance and law. The Company benefits from the different perspectives offered by the Board, which includes directors of varying ages and ethnicities, who hail from geographies across the U.S. and Europe that align with our global portfolio. The Board has oversight of managing the Company’s risks, and committees are tasked with oversight responsibility for particular areas of risk.

Optimizing Resources for a healthy environment and a productive business Operating Responsibly for a healthy work environment built on transparency and accountability

 

Kennedy Wilson / Proxy Statement 2021 /   27

ESG AT KENNEDY WILSON: A COMMITMENT TO RESPONSIBLE INVESTING AND OPERATIONS

 

 

 

KENNEDY WILSON ESG REPORT 2019 Delivering long-term social, environmental and economic value See how our ESG program and our four pillars align with our business strategy by maximizing the inherent value of our assets. CEO MESSAGE DOWNLOAD REPORT We look to create great places for people to live, work and thrive We build communities around our assets and in the major cities where we operate We optimize resources with a focus on environmental stewardship We operate responsibly to ensure transparency and Our approach to corporate responsibility and key environmental, social and governance are described in detail on our ESG microsite: esg.kennedywilson.com.

 

28   / Kennedy Wilson / Proxy Statement 2021

ESG AT KENNEDY WILSON: A COMMITMENT TO RESPONSIBLE INVESTING AND OPERATIONS

 

 

 

ESG AT A GLANCE

 

Environment
Advancing toward a global commitment focused on targets aimed to reduce our environmental footprint by expanding our utility data monitoring to 100% of our directly managed global portfolio		Gold member U.S Green Building Council		39%1   Carbon Emissions2 Reduction in Europe Portfolio vs. Baseline3		Targeting LEED certifications for mixed-use and commercial properties across our global development portfolio
Social
$1.7 Million   Kennedy Wilson Foundation Donations in 2020		$19 Million   2020 Investment in Historically Significant Properties		41%   Women at Kennedy Wilson		46%   Women in Senior Management
10,000 Affordable housing units completed and under construction in the Western U.S.
Governance
5   new directors since 2018		Lead independent director with well- defined role and responsibilities		Regular executive sessions of independent directors		Diverse Board of Directors including 27%   women directors
Active and responsive shareholder engagement		Creation of formal Corporate ESG Committee		Board of Directors and Senior Management stock ownership policy		Annual “Say on Pay” vote
Strict anti-hedging and anti-pledging policies				Broad compensation clawback policy (cash and equity)
1  Like-for-like carbon emissions reduction, excluding improvements in carbon intensity of grid electricity 2  Carbon dioxide equivalent 3  The baseline for targets reflects the carbon emissions of the directly managed assets by Kennedy Wilson Europe Real Estate and stabilized by June 30, 2016. The energy consumption data used for the baseline is the first full year of normalized data since acquisition and/or stabilization

USGBC MEMBER

 

Kennedy Wilson / Proxy Statement 2021 /   29

EXECUTIVE COMPENSATION

The following discussion sets forth certain information regarding our executive compensation. Unless specifically noted or the context provides otherwise, as used throughout this section, “we,” “our,” “us” or the “Company” and the disclosures relating to executive compensation refer to Kennedy-Wilson Holdings, Inc. and its subsidiaries.

Compensation Discussion and Analysis

The Compensation Discussion and Analysis section of this proxy statement describes the objectives and features of our executive compensation program with respect to those executive officers who constitute our named executive officers (“NEOs”) for fiscal year 2020, as determined under applicable SEC rules. For the fiscal year ended December 31, 2020, our NEOs and their titles were as follows:

 

Named Executive Officer		Title
William J. McMorrow		Chairman and Chief Executive Officer
Mary Ricks		President
Justin Enbody		Chief Financial Officer
Kent Mouton		Executive Vice President, General Counsel
Matt Windisch		Executive Vice President

 

 

The Compensation Discussion and Analysis includes the following sections:

 

 

 

		Executive Summary Summarizes our 2020 compensation program, our unique business model and the evolution of our compensation structure over the past four years
		Executive Compensation Objectives and Review Process Outlines our compensation philosophy and the objectives and roles of each of the Compensation Committee and Chief Executive Officer (“CEO”) in determining the compensation for our executives
		Fiscal Year 2020 Compensation Discusses the performance factors and specific compensation decisions for fiscal year 2020 and the impact of the COVID-19 pandemic on our business and compensation
		Elements of Compensation Provides a more detailed description of each element of our executive compensation program and the considerations reviewed in assessing each element
		Tax, Accounting and Other Considerations Outlines the various tax, accounting and other factors that are considered by the Compensation Committee with respect to our executive compensation program

 

30   / Kennedy Wilson / Proxy Statement 2021

 

 

		Executive Summary

The Compensation Committee is committed to evaluating and updating our executive compensation and corporate governance practices based on its continual review of current market practices and governance trends, amongst other factors. We place significant value on tying our executives’ compensation to the long-term value creation for our stockholders, and balancing both short-term performance and retention, which we achieve by incorporating a fixed base salary while significantly weighting the NEO pay mix towards long-term incentive compensation and short-term bonuses tied to performance. We believe the current structure is strongly aligned with the long-term interests of the Company’s stockholders, demonstrates pay-for-performance alignment and reflects a program that is well-aligned with the best market practices. In 2019 and 2020, we expanded our compensation-related governance policies to enhance the protocols that guide how executive compensation decisions are made and safeguard stockholder interests.

Our Distinctive Global Public Company Real Estate Business Model

Kennedy Wilson is a global real estate investment company with a unique and global business model that is not directly comparable to most other publicly-traded real estate companies. Unlike traditional public real estate, we not only own, operate and invest in multi-family and commercial real estate properties, we also engage in more complex real estate activities through our investment management platform and invest in debt opportunities across the globe.

TWO KEY INVESTMENT SEGMENTS

 

Consolidated Portfolio				Co-Investment Portfolio
·   Permanent capital vehicle focused on maximizing property cash flow				·   Complementary platform generating recurring asset management fees and promotes
·   Targeting wholly owned investments with accretive asset management opportunities				·   Includes real estate and loan investments with strategic partners and commingled fund business
·   Longer-term hold period				·   Primary investors include:
				·  insurance companies
				·  public and private pension plans
				·  family office and private equity clients

We are a global company that owns and develops multifamily and commercial properties primarily located in the Western U.S., the U.K. and Ireland. As of December 31, 2020, we have an ownership interest in approximately 43 million square feet of property globally, including 29,841 multifamily rental units and 21.9 million square feet of commercial property.

 

Kennedy Wilson / Proxy Statement 2021 /   31

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Portfolio Overview* By Property Type1 81% Multifamily and Office Sectors Multifamily 47% Office 34% Retail 13% Hotels and Industrial 6% $394m Estimated Annual NOI** $18bn Real Estate AUM By Country1 55% Portfolio in Western U.S. Geography Western U.S. 55% UK 21% Ireland 20% Italy & Spain 4% $3.9bn Fee-Bearing Capital** +$2.2bn Pipeline of Capital from Announced Platforms 202 Total Employees 1 Based on Estimated Annual NOI. * As of December 31, 2020. **See Appendix A for a definition of Estimated Annual NOI and Fee-bearing Capital.

 

32   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Our Competitors

Our Company is not directly comparable to most publicly-traded real estate companies, which generally operate less complex business models, and is more comparable to private equity companies, investment banks and sophisticated family offices with large real estate portfolios.

 

		Kennedy-Wilson Holdings, Inc.		Traditional Publicly-Traded Real Estate Company Business Model		Private Equity Real Estate Firms
Source and use strategic third-party capital to operate a fund and separate account business to invest in opportunistic and value-add investments
Operate on a global scale
Invest in a diverse array of property types
Engage in significant development and redevelopment activity
Local operating teams

Legend:             Fully Engage             Partially Engage             Minimally Engage

In this respect, our true and closest competitors are not traditional real estate operating companies and REITs. Instead, we directly compete with a combination of private equity real estate companies, investment banks and sophisticated family offices, among others, in terms of deal sourcing, accessing third-party capital and the recruitment of talent. Many of these companies operate as privately-held companies or have a real estate platform that is one operating segment where compensation information is not publicly disclosed and not available to directly compare the compensation of our NEOs to that of our closest competitors.

 

Kennedy Wilson / Proxy Statement 2021 /   33

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Strong Stockholder Support of 2020 Say-on-Pay Vote   At our 2020 annual meeting, 98% of votes cast were voted in favor of our say-on-pay vote, which strongly affirms our stockholders’ support of our approach to executive compensation. During 2020, the Compensation Committee remained committed to maintaining a pay-for-performance compensation structure that promoted our stockholders’ best interests while continuing to make enhancements to further align our compensation program with best practices.   Our say-on-pay vote is currently held on an annual basis, consistent with the preference expressed by a majority of our shareholders.

Evolution of Our Compensation Program and Responsiveness to Stockholders

Our Compensation Committee, in consultation with its independent compensation consultant, has sought to create a compensation program that (i) provides long-term incentives that are strongly aligned with the long-term interests of our stockholders; (ii) provides our executive officers with short- and long-term incentives that directly support our strategic business plan; (iii) emphasizes the importance of pay transparency; and (iv) provides competitive compensation levels to retain and motivate a high caliber executive team capable of managing our sophisticated business model and global operations.

In our efforts to accomplish these objectives, we have considered the following key factors:

 

●	The executive officers and our independent directors own approximately 22% (as of April 23, 2021) of the Company’s stock, ensuring alignment with the Company’s stockholders;

 

●	We directly compete with a combination of private equity companies, investment banks and sophisticated family offices with large real estate portfolios, among others, where the compensation structures provide for a more levered risk-reward model than typically used by public companies; and

 

●	We are committed to providing pay transparency to our stockholders and maintaining strong governance practices that support our pay-for-performance compensation philosophy.

98% Support

 

34   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

In 2020, the feedback on our executive compensation program was overwhelmingly positive, as reflected in our market-leading say-on-pay support. We are committed to evaluating and making changes to our compensation and corporate governance practices based on our continual review of the factors above. Based on discussions with stockholders, along with our ongoing evaluation of best practices, we have made a number of compensation and governance enhancements in recent years, including:

 

2020 - 2021		· Achieved market-leading 98% say-on-pay support in 2020
		· Increased the percentage of performance-based awards compared to total equity awards from 67.67% to 80%
		· Provided enhanced disclosure on each element of our compensation program
2019 - 2020		· Broadened the clawback policy to all NEOs (cash and equity compensation)
		· Increased director ownership guidelines to 4x the annual cash retainer
		· Expanded our insider trading policy to explicitly prohibit all pledging of Company securities
		· Amended the Company’s Second Amended and Restated 2009 Equity Participation Plan to include numerous stockholder-friendly provisions, including, the prohibition of the discretionary accelerated vesting of awards and a minimum one-year vesting requirement on all equity grants
		· Created the Capital Markets Committee of the Board to assist the Board in monitoring and overseeing the policies and activities of the Company relating to the Company’s capital market activities, foreign currency exchange exposure and debt program
2018 & Prior		· Eliminated the cash bonus pool based on Adjusted EBITDA and adopted a cash bonus program tied to multiple operating and financial metrics
		· Rebalanced the pay mix to be significantly weighted towards long-term incentive compensation
		· Modified performance-based equity awards to be based on more rigorous and challenging hurdles, including a new relative TSR metric
		· Added a mandatory three-year post-vesting holding period on NEO restricted stock awards
		· Changed to an annual say-on-pay vote proposal beginning in 2017
		· Eliminated dividends on unearned restricted stock awards and “retesting” or “catch- up” features from all restricted stock awards
		· Adopted robust stock ownership guidelines including 10 times base salary for the CEO
		· Appointed three additional independent directors and lead independent director

 

Kennedy Wilson / Proxy Statement 2021 /   35

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

		Executive Compensation Objectives and Review Process

Our Company’s compensation program objectives are as follows:

 

Pay Competitively				Pay-for-Performance				Alignment with Stockholders
Pay our executive officers a competitive level of compensation that best reflects individual performance, overall role and responsibility, and our performance and the performance of our business units				Provide our executive officers with long-term incentive compensation and annual bonuses that are subject to the attainment of rigorous Company performance objectives				Provide long-term incentive compensation that is strongly aligned with the long-term interests of our stockholders and encourages retention by paying a significant portion of compensation to our executive officers in equity

A significant portion of our NEOs’ compensation is at-risk subject to the Company’s achievement of performance goals. Consistent with this focus, our compensation program provides our executive officers with long-term incentive compensation and annual bonuses that are based on Company performance. We encourage our executives to take a long-term approach by compensating them in restricted equity that vests over a period of three years if the Company meets or exceeds return on equity (“ROE”) and TSR goals, subject to an additional three-year post-vesting holding period.

Role of the Compensation Committee

Our Compensation Committee determines the compensation for all of the NEOs employing the following process.

 

·

It receives input as necessary and appropriate from Company management, including the Chief Executive Officer, other than with respect to his own compensation, and the Compensation Committee’s compensation consultant, as discussed below

 

·

Our Chief Executive Officer makes recommendations to the Compensation Committee on the compensation of executive officers who report to him based on his assessment of the achievement of the Company’s strategic plans, the executive’s individual performance and a variety of other factors (such as compensation history, tenure, responsibilities, market data and retention concerns)

 

·

The Compensation Committee considers these recommendations, the input of its independent compensation consultant, as well as its own research to make all final decisions affecting NEO compensation, executive compensation philosophy, policies and plan design

Role of the Compensation Consultant

The Compensation Committee has retained an independent compensation consultant to advise it in connection with its responsibilities. During 2020, the Compensation Committee retained FPL Associates L.P. (“FPL Associates”) to provide peer group compensation data and market practices and advice with respect to the compensation, annual bonus program and restricted stock awards applicable to executive officers and employment agreements. The Compensation Committee has determined that FPL Associates is independent and that there was no conflict of interest between the Company and FPL Associates. In reaching these conclusions, the Compensation Committee considered the factors set forth in Rule 10C-1(b) of the Securities Exchange Act of 1934, as amended, and the NYSE listing standards.

 

36   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Use of Peer Group Data

Each year, the Compensation Committee reviews the Company’s peer group to ensure the appropriateness of each peer company, as well as the peer group in totality. The Compensation Committee, with the assistance of FPL Associates, reviewed the Company’s peer group in 2020, specifically to identify a replacement for Oaktree Capital Group, LLC, a peer which was acquired by Brookfield Asset Management, Inc. in 2019. The Compensation Committee sought to ensure that the peer group continued to reflect our Company’s current dynamics, which combined with our size, global reach, and development and strategic capital platforms, puts us in a unique category, making peer group selection that much more challenging. In selecting the Company’s peer group, the Compensation Committee sought to create a blend of diverse companies that would reflect the Company’s complex business model and global scope when viewed in totality.

In assessing potential peers and developing the most appropriate blend of companies, the Compensation Committee maintained the methodology previously established and took into consideration: (i) publicly-traded real estate companies in the United States and Europe with whom the Company competes for investment opportunities and talent, (ii) peer groups identified for the Company by independent third-parties (including those used by financial service providers and proxy advisory groups) and (iii) the recent say-on-pay results of any potential peer.

The companies that make up the Company’s peer group were selected using the following criteria:

 

·

companies with appropriate size comparison in terms of assets under management and total enterprise value

 

·

asset managers with real estate portfolios and real estate companies with strategic capital platforms that invest in real estate through funds

 

·

real estate companies with similarly-skilled executive management teams and a multi-faceted business model

 

·

real estate companies that participate in real estate development

 

·

companies that operate in multiple domestic and international markets and invest in multiple asset types

 

·

at least one European real estate company, as the Company has significant operations and investments in Europe

The Compensation Committee reviewed real estate operating companies, REITs and publicly-traded private equity and asset management firms compared to the criteria listed above. The Compensation Committee selected the following 10 publicly traded companies for the Company’s peer group (in alphabetical order) that met at least three of these criteria. The majority of these peer companies share some, but not all, aspects of our business model, further demonstrating our uniqueness. While no singular company is entirely comparable to Kennedy Wilson, we believe that, on a blended basis, our current peer group generally provides an accurate representation of the Company’s operations.

 

Kennedy Wilson / Proxy Statement 2021 /   37

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Company		Size(1)		Real Estate		Developer		Global		Strategic     Capital(2)
Kennedy-Wilson Holdings, Inc.
Apollo Global Management, LLC
Ares Management Corporation
Essex Property Trust, Inc.
Kilroy Realty Corporation
Land Securities Group plc
Prologis, Inc.
Sculptor Capital Management, Inc.
SL Green Realty Corp.
UDR, Inc.
Vornado Realty Trust

 

(1)	Size is based on assets under management, when available, or total enterprise value as of December 31, 2020

 

(2)	Strategic capital is based on if the company has a significant fund management and separate account business in which it invests in real estate assets

The Compensation Committee, in consultation with FPL Associates, conducted a thorough analysis and identified Sculptor Capital Management, Inc. as the best replacement for Oaktree Capital Group, LLC (a peer which was acquired by Brookfield Asset Management, Inc. in 2019). In our review, the Company determined that a public asset manager with significant real estate assets and global exposure would be most appropriate and consistent with the profile of the peer being replaced. The Compensation Committee concluded that Sculptor Capital Management, Inc. was the most relevant comparison based on (i) their comparative size as compared to Kennedy Wilson; (ii) their significant real estate holdings and global presence; and (iii) the fact that they have been identified as a peer for the Company by independent third-parties.

The above peer group is subject to annual adjustments based on changes at peer companies, including for material changes in business operations.

During 2020, the Compensation Committee utilized peer group compensation data in order to understand the reasonableness of the Company’s pay levels and structure as compared to the market. Reflecting the Compensation Committee’s view that the Company is not readily comparable to other companies of a similar size in the real estate industry (due, in part, to the Company’s diverse line of businesses, revenue streams and investment type), in determining the overall amounts of compensation to be awarded to the NEOs and the relative portion of compensation to be divided among base pay, bonus, and long-term incentives, the Compensation Committee does not adhere to a specific formula or aim to set compensation at a specified level as compared to specific benchmarking or survey data. Please see the discussion in “Elements of Compensation” below.

 

38   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Risk Mitigation

Our executive compensation program is designed to achieve an appropriate balance between risk and reward that does not incentivize unnecessary or excessive risk-taking. We believe that our annual cash bonus program and our equity-based compensation program contain appropriate risk mitigation factors, as summarized below:

RISK MITIGATION FACTORS

 

Multiple Performance Factors Range of Awards (not all-or-nothing) Clawback Policy for all incentives paid to all NEOs Annual Bonus Mandatory post-vesting holding period of 3 years Anti-Hedging and Anti-Pledging Policy Executive and Non-Employee Director Stock Ownership Guidelines Long-Term Incentives

 

Kennedy Wilson / Proxy Statement 2021 /   39

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

		Fiscal Year 2020 Compensation

2020 Financial Performance Results

2020 was another strong performance year for Kennedy Wilson despite turbulent global economic conditions stemming from the global pandemic. We were able to not only successfully execute on strategic transactions, but we were also able to quickly and strategically respond to changing market conditions to create new opportunities and grow our fee-bearing capital by 30%. Through our investment platforms, operating in the United States and the United Kingdom, we have further strengthened relationships with existing partners and forged relationships with new partners to significantly increase our access to institutional capital. We believe our ability to seek out and execute on new opportunities, both on our own and with our partners, while continuing to execute on strategic transactions, will continue to facilitate broad access to attractive investments, thus positioning the Company for long-term success. Additionally, at the same time, the Company worked closely with tenants to maintain high occupancy rates with continued strong rent collections across our global portfolio and achieved record financial results in 4Q as we headed into 2021. Each of these accomplishments were significant and challenging, especially to execute on an international platform during a global health crisis and unpredictable market conditions.

Significant Transactional and Development Activity:

Completed $2.3 billion in investment transactions and completed the development and/or lease-up of 1,100 multifamily units and 0.5 million commercial square feet:

 

·

Completed $1.2 billion of total dispositions ($984 million at KW share), which generated $326 million of gains on sale and $794 million of cash to the Company.

 

·

Completed $1.1 billion ($241 million at KW share) of new acquisitions.

 

·

Completed global lease-up initiatives across 264,000 commercial square feet and 714 multifamily units, which added $5.1 million in Estimated Annual NOI.

 

·

Completed the development of 317,000 commercial square feet and 556 multifamily units which is expected to add approximately $10 million in Estimated Annual NOI when stabilized.

Investment Management Growth:

Fee-bearing capital grew by 30% to $3.9 billion in 2020 (added $1 billion in gross fee-bearing capital) with a strong pipeline of over $2.2 billion in additional fee-bearing capital to be deployed. The significant growth of our investment management platform was driven by the launch of two new investment platforms in 2020:

 

·

Successful Launch of Urban Logistics Platform: Launched a $1 billion EU urban logistics platform through a joint venture with GIC, Singapore’s sovereign wealth fund, to acquire and manage urban logistics properties in the UK, with the potential to expand into Ireland and Spain. The platform was seeded with $220 million of assets that the Company previously wholly-owned. Kennedy Wilson has a 20% ownership in the joint venture. As of March 31, 2021, the platform has already grown to hold $444 million of assets.

 

·

Successful Launch of New Debt Platform: Launched a new $2 billion debt platform in May 2020 and completed $662 million of loan investments during 2020, growing the aggregate debt platform to $788 million at year-end. In 1Q-2021, the new debt platform surpassed $1 billion in real estate debt commitments. Kennedy Wilson has a weighted average ownership of 9% in its real estate debt investments.

 

40   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Maintained High Level of Rent Collections and Occupancy:

 

·

In 4Q, 98% of rents were collected for Multifamily and Office, which resulted in 96% of rents collected for 2020.

 

·

Our multifamily portfolio weighted-average occupancy was 95.2% at year-end, completing 7,658 leases across the global market-rate portfolio. Our office portfolio weighted-average occupancy was 94.2% at year-end, completing 1.0 million square feet of office leasing activity.

Record 4Q Earnings:

We were able to end the year with record quarterly results, with Adjusted EBITDA of $346.9 million (vs. $278.1 million in 4Q 2019) and Adjusted Net Income of $222.8 million (vs. $209.7 million in 4Q 2019) as we entered 2021. We achieved an Adjusted EBITDA of $608.0 million and adjusted Net Income of $306.9 million for the year ended December 31, 2020.

Expansion of Share Repurchase Program:

We expanded our $250 million buyback to $500 million in November 2020. We repurchased and retired 3.4 million shares for $57 million at a weighted-average price of $16.88 per share during 2020 and returned $185 million to shareholders in the form of dividends and share repurchases, equating to approximately $1.31 per share.

Strong Balance Sheet with Record Cash Levels:

At year-end, we had $1.3 billion in cash and available lines of credit and reduced our floating risk rate with 88% fixed or hedged debt (KW Share). In addition, we ended the year with limited near-term maturities (2.0% debt maturing by year end 2021), $1.5 billion in unencumbered assets and a 3.7% weighted average cost of debt.

Corporate Financing Activity:

Kennedy Wilson Europe Real Estate Limited (“KWE”), a wholly-owned subsidiary of the Company, purchased approximately £130 million, or 26%, of its 3.95% sterling denominated bonds due in 2022. In early 2021, we also refinanced our senior notes, due in 2024, with new 8-year and 10-year bonds that produced approximately $10 million in interest cost savings while extending the term significantly. In addition, we also entered into a new corporate credit

facility in early 2020 which effectively extended the term by an additional three years and lowered our cost of borrowing.

Reduced Costs and Simplified KW:

The sale of our third-party property services and brokerage division, Kennedy-Wilson Properties, Ltd. (“KWP”) during 2020, reduced annual costs by $12 million. Including the sale of this business, the sale of our property research business in 2018 and other significant changes to streamline the business, we were able reduce base payroll and G&A expenses by $30 million (approximately 30%) over the last two years.

See Appendix A for certain definitions and reconciliations of non-GAAP financial information.

 

Kennedy Wilson / Proxy Statement 2021 /   41

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

2020 Non-Financial Achievements

The long-term success of our business is not only contingent on our financial results but also our ability to execute on key human capital, environmental and other strategic initiatives. This fact was amplified by the onset of the COVID-19 pandemic in March 2020 that resulted in sudden disruptions to the U.S. and global economies and the health crisis that ensued. Kennedy Wilson prioritized the health and safety of our employees and tenants and successfully executed on our human capital and ESG strategic priorities:

Immediate Response to the COVID-19 Pandemic

 

·

Created a COVID-19 task force to support our employees, tenants and business. The task force continuously tracks local, regional and national restrictions across the globe to ensure compliance, has implemented new policies and procedures for safe returns to our offices, and provide resources to support employee family and well-being resources for physical, mental and financial health, among other things.

 

·

Successfully transitioned entire workforce to temporarily work from home without disruption to services or system availability and enhanced cyber security for new working environment

 

·

Launched global relationship tracker and held first fully virtual annual shareholder meeting

 

·

Rolled out virtual leasing across global multifamily portfolio

Executed on Human Capital and ESG Strategic Priorities

 

·

Recognized as one of “America’s Most Responsible Companies” by Newsweek

 

·

Launched first global ESG microsite and enhanced ESG disclosures

 

·

Expanded greenhouse gas and water measurement program in 2020 to include our U.S. commercial and multifamily portfolio

 

·

Pivoted 2020 internship program to 100% virtual for six weeks, three days/week

 

·

Launched Headspace for Work and Maven maternity care benefits globally

 

·

Donated $1.7 million to organizations focused on children’s health, education and veterans’ initiatives.

 

·

Created a formal internal ESG committee for management and oversight

See page 26 for additional details about our ESG initiatives

 

42   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

In addition to strong financial and operational performance, we achieved long-term TSR that outperformed both our peer group and the MSCI World Real Estate Index (“World Index”) over the three-year and ten-year periods ended December 31, 2020. Our short-term performance in 2020 was impacted by the pandemic, which was consistent with negative results across the sector; however, we continue to rebound in 2021 and perform at or above the indices year-to-date.

CUMULATIVE TOTAL RETURN OVER 10 YEARS

 

 

Total Stockholder Returns										KW: Kennedy Wilson Holdings, Inc.   World: MSCI World Real Estate Index   Peers: Executive Compensation Peer Group Median**
10 - Year 12/31/2020		3 - Year 12/31/2020		1 - Year 12/31/2020*		Year-to-Date 3/31/2021*
KW 138%		KW 18%		World (4%)		Peers 15%
World 97%		World 12%		KW (15%)		KW 14%
Peers 83%		Peers (4%)		Peers (23%)		World 6%

 

Source: S&P Global Market Intelligence

For definitions of terms used throughout this section of the proxy statement and reconciliations of certain non-GAAP measures to their most directly comparable GAAP measures, see Appendix A.

*The Company’s 1-Year and Year-to-Date total stockholder returns were impacted by the COVID-19 pandemic and should be viewed accordingly.

**See “Use of Peer Group Data” below for additional details on our peer group.

The foregoing section is not soliciting material, is not deemed filed with the SEC and is not incorporated by reference in any filing of the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, whether made before or after the date of this proxy statement and irrespective of any general incorporation language in such filing.

$300 $250 $200 $150 $100 $50 $0 12/31/2 010 12/32/2 011 12/31/2 012 12/31/2 013 12/31/2 014 12/31/2 015 12/31/2 016 12/31/2 017 12/31/2 018 12/31/2 019 12/31/2 020 Kennedy-Wilson Holdings Inc. MSCI World RE Index Peer Group Median

 

Kennedy Wilson / Proxy Statement 2021 /   43

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

2020 Compensation Snapshot

The Compensation Committee remains committed to maintaining a pay-for-performance philosophy that ensures management remains focused on executing our proven long-term business strategy and continues to provide significant alignment with our stockholders. Key year-end 2020 compensation decisions and actions included:

Increased Allocation to Performance-Based Equity Awards

Beginning with our 2021 annual equity awards, the allocation of performance-based equity awards contingent upon ROE and relative TSR performance increased to 80% (up from 67.67%) and the allocation of retentive equity awards was reduced to only 20% (down from 33.33%)

Meaningful Decreases To 2020 Cash Bonuses

Despite our strong overall results and successfully executing key strategic priorities, the Compensation Committee determined it was appropriate to reduce cash bonus payouts by 20% to recognize the impact of the COVID-19 health crisis to our 2020 results.

Stockholder support of commitment to say-on-pay for performance and strategic alignment of our compensation program is demonstrated by the extraordinary level of stockholder support (98%) of our 2020 say-on-pay vote

 

·

Approximately 82% of our NEOs’ compensation is variable and directly tied to the achievement of operational, financial and/or stock price performance.

 

·

The majority of compensation is comprised of equity awards that are subject to the same stock price fluctuations as our stockholders. Additionally, all our stock grants (including performance stock awards and retentive stock awards) require our NEOs to hold shares for an additional three years following the vesting date to reinforce our commitment to aligning our NEOs’ interests with those of our stockholders.

 

·

We generated 18% three-year total shareholder return in 2020 outperforming the MSCI World Real Estate Index by 600 bps. The graph below compares our average NEO compensation, our three-year TSR performance and our annual TSR performance relative to the MSCI World Real Estate Index from 2018-2020 and demonstrates the alignment of our NEO compensation with our long-term TSR performance:

 

				Year		Total     Compensation
		Mr. McMorrow Chairman and CEO		2020   2019   2018			$16,444,951   $16,312,481   $13,426,907
		Ms. Ricks President		2020   2019   2018			$12,248,197   $12,748,197   $9,825,290
		Mr. Enbody Chief Financial Officer		2020   2019   2018			$5,153,531   $5,493,322   $4,246,968
		Mr. Mouton General Counsel		2020   2019   2018			$4,663,780   $5,627,721   $4,702,300
		Mr. Windisch Executive Vice President		2020   2019   2018			$7,943,211   $6,801,374   $5,082,100
		Please see “Compensation Discussion and Analysis-Compensation Tables” and “Compensation Discussion and Analysis-Elements of Compensation” for further details.

Average NEO Total Compensation 3- Year TSR -16% 23% 18% $7,457 2018 $9,397 2019 $9,291 2020

 

44   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

		Elements of Compensation

With respect to the Company’s NEOs, the three primary elements of compensation are base salary, annual bonus and long-term incentives. Each element of compensation is determined based on thoughtful consideration by the Compensation Committee and is designed so that the program in totality supports our strategic business plan and motivates management to drive long-term value creation for our stockholders. We believe that the effectiveness and alignment of our compensation program is demonstrated by our market leading TSR performance and strong stockholder support of our 2020 say-on-pay vote.

Base Salary

Base salary is set to attract and retain executive talent taking into consideration competitive market conditions with respect to comparable companies. Base salary is determined by level of the position within the Company and the individual’s current and sustained performance results. Base salaries for all NEOs are set by the Compensation Committee, taking into account input as appropriate from the Chief Executive Officer, other than with respect to his own base salary.

The base salaries of our NEOs were generally established by our Compensation Committee in 2018 in connection with the renewal of employment agreements and amendments to employment agreements that we entered into with our NEOs at that time after considering competitive levels of base pay and a desire to set levels of base pay that are internally equitable and may be adjusted periodically to align with changes in each individual’s role, responsibilities and performance.

In early 2020, the Compensation Committee reviewed base salaries for each NEO. Some of the most important factors that were considered included: the number of employees supervised by the officer; the effort expended by the officer in soliciting and bringing new business or capital investments to his or her business unit; the extent to which the officer’s business unit generated new business or new capital; the travel demands placed upon the officer; and the extent to which the officer is engaged in investor relations activities. While these factors are critical to our success, many of them cannot be evaluated quantitatively, so a portion of the evaluations by the Compensation Committee is subjective.

Based on this review, 2020 base salaries for the NEOs were not increased, except for Mr. Windisch. The Compensation Committee determined that a $50,000 increase was appropriate for Mr. Windisch given his significant contributions to Kennedy Wilson’s success during 2019, his significant responsibilities in executing the Company’s strategic plan and to ensure internal pay equity as compared to other NEOs.

The base salaries for each of the NEOs in 2020 were as set forth below.

 

Named Executive Officer		2020 Base Salary
William J. McMorrow			$1,500,000
Mary Ricks			1,250,000
Justin Enbody			700,000
Kent Mouton			800,000
Matt Windisch(1)			800,000

 

(1)	Base salary increase for Mr. Windisch was effective as of January 15, 2020.

 

Kennedy Wilson / Proxy Statement 2021 /   45

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Annual Bonus

Our Compensation Committee believes that annual bonuses should play a significant role in motivating executives to accomplish near-term priorities that ultimately provide increases in stockholder value and that NEOs should be eligible for bonuses that are a significant percentage of base pay (defined as a multiple of base pay). The Compensation Committee believes that individual contributions and the financial performance of an NEO’s business unit should be a critical component of his or her bonus calculation and overall Company performance should be factored into the bonus methodology for all NEOs.

2020 Annual Bonus Opportunities

2020 bonus opportunities were set at a level that would provide NEOs with appropriate total cash compensation dependent on Company and individual performance in a manner that reflected their relative levels of contribution as determined by the Compensation Committee in its sole discretion. 2020 bonus opportunities for each NEO remained unchanged from 2019 levels (as a multiple of base pay).

Each NEO’s incentive cash bonus opportunity for 2020 is based upon a threshold, target and maximum amount (each denominated as a percentage of base salary) as shown in the following table. Whether any of the threshold, target or maximum bonus levels were attained was determined by the Compensation Committee based on the achievement of corporate performance metrics and the Compensation Committee’s assessment of each executive’s individual performance.

 

Named Executive Officer		Threshold				Target				Maximum
William J. McMorrow			100%				200%				300%
Mary Ricks			100%				200%				300%
Justin Enbody			82.5%				165%				250%
Kent Mouton			57.5%				115%				175%
Matt Windisch			100%				200%				300%

2020 Performance Assessment

The Company originally planned to establish an annual cash bonus program for 2020 using a formula tied to financial metrics consistent with the 2019 program. Prior to the finalization of our 2020 cash bonus program, however, the COVID-19 health crisis had materialized and had an immediate and significant impact on the operations of Kennedy Wilson’s multifamily, office and retail assets and our 2020 strategic priorities. The historical formula used to evaluate performance goals would not have reflected the actual business priorities for the year and a new formula was difficult to define as the effects of the pandemic were still unknown. To ensure effective alignment between NEO bonuses and our 2020 objectives that included near-term pandemic-related priorities, the Company used a more comprehensive performance framework. The Compensation Committee assessed 2020 performance under the bonus framework using a combination of (i) the continued execution of our long-term strategic priorities, (ii) financial and operational performance metrics, and (iii) effective management of new COVID-19 factors. The Compensation Committee evaluated the Company’s performance results and determined that:

 

46   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Successful Execution of Our Long-Term Strategy

The Company had no significant slowdown in development projects or the execution of strategic initiatives, despite the challenges presented by the COVID-19 pandemic. In the midst of a turbulent year, the Company was able to strengthen existing relationship with partners and forge new and meaningful relationship with institutions providing the Company with even greater access to institutional capital to capitalize on opportunities in the future. Additionally, the Company continues to prioritize and execute on a number of corporate responsibility and ESG strategic initiatives*. Key accomplishments included:

 

·

Fee-bearing capital growth of over 30% in 2020, adding $1 billion in gross fee-bearing capital in 2020; strong pipeline of over $2 billion in additional fee-bearing capital to be deployed

 

·

Launched $1 billion EU urban logistics platform with GIC

 

·

Launched $2 billion real estate debt platform with Fairfax Financial (debt investments added $0.6 million in fee- bearing capital in 2020)

 

·

Completed $2.3 billion in investment transactions, including $1.1 billion in new acquisitions (Kennedy Wilson’s share of which was $241 million) and $1.2 billion in dispositions (Kennedy Wilson’s share of which was $984 million), resulting in $326 million of gains and $794 million of cash to Kennedy Wilson

 

·

No significant slowdown across approximately $2.5 billion of development projects, as well as completion of $800 million in new construction financing; completed significant development projects, comprising of 633 multifamily units and 61,000 square feet of commercial office space. We currently expect these projects to add $11 million in Estimated Annual NOI once completely stabilized

Achieved Strong Financial and Operational Results and Effectively Managed Through COVID

The Company outperformed the overall real estate industry in terms of occupancy rates, rent collections, controlling annual expenses and ended the year with record quarterly earnings. Given that full year 2019 was a record setting financial year for Kennedy Wilson, overall 2020 financial results in terms of Adjusted EBITDA and Adjusted Net Income were down from the prior year but still exceeded historical results and outperformed in 4Q demonstrating our portfolio’s resiliency and continued long-term growth trajectory in the midst of the global health pandemic. The Company worked diligently with tenants across the globe to closely monitor governmental regulations and programs to assist tenants in paying rent. In addition, the Company was able to preserve a strong financial position and balance sheet to take advantage of future opportunities to further its long-term goals.

 

·

Adjusted EBITDA of $608 million for 2020 and Adjusted Net Income of $307 million. We were able to end the year with record fourth quarter results, with Adjusted EBITDA of $346.9 million (vs. $278.1 million in 4Q 2019) and adjusted NOI of $222.8 million (vs. $209.7 million in 4Q 2019) as the Company enters 2021

 

·

Rent collections of 96% across our global investment portfolio for the year ended December 31, 2020 rents as of February 18, 2021

 

·

Weighted-average occupancy at our multifamily properties as of year-end was 95.2% and 94.2% at our office properties1

 

·

Managed record liquidity levels with more than $900 million in cash as of 4Q plus $300 million available under credit facility; Increased share repurchase program to $500 million from $250 million

*See page 40 for additional performance details and page 26 for additional details about our ESG initiatives.

1 At the Company’s share. Occupancy stats on stabilized portfolio and excludes assets undergoing lease-up or development

Based on the Company’s performance as compared to the bonus framework detailed above, the Compensation Committee determined that overall the Company significantly exceeded expectations on key financial, operating and strategic priorities. Each of these accomplishments were significant and challenging, especially to execute on an international platform during a global health crisis. Notwithstanding management’s overall success in 2020, the Compensation Committee was sensitive to the pressure on our full year financial results and concluded that meaningful reductions of 20% from 2019 payouts were appropriate. For comparative purposes only and to ensure that 2020 payouts were reasonable, the Compensation Committee also reviewed payouts using the 2019 bonus methodology for adjusted cash flow per share, recurring recourse debt service coverage ratio and cash generated from asset sales and

 

Kennedy Wilson / Proxy Statement 2021 /   47

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

determined that payout between target and maximum would have been achieved, which the Compensation Committee believes is an indication that 2020 payouts were reasonable. The Company will return to a version of its historical formula-based NEO cash bonus program for the year ended December 31, 2021.

The 2020 annual cash bonuses paid to our NEOs based on the performance results discussed above are as follows:

 

Named Executive Officer		2019 Cash Bonus				2020 Cash Bonus(1)				YOY Change
William J. McMorrow		$	4,500,000			$	3,600,000				(20%)
Mary Ricks		$	3,750,000			$	3,000,000				(20%)
Justin Enbody		$	1,750,000			$	1,400,000				(20%)
Kent Mouton		$	1,400,000			$	1,120,000				(20%)
Matt Windisch		$	2,250,000			$	1,920,000				(15%)	(2)

 

(1)	Represents 2020 cash bonuses equal to 80% of the maximum bonus opportunity.

(2)	Mr. Windisch’s bonus opportunity was higher in 2020 as a result of his base salary increase and accordingly, his bonus was reduced by 15% from his 2019 bonus.

Long-Term Incentives

Long-term incentives in the form of equity awards are a crucial part of our overall executive compensation program. We believe that this component of the compensation program strongly aligns our NEOs’ interests with the long-term interests of our stockholders and also encourages retention of our highly-skilled employees. In 2020, long-term incentives were granted to our NEOs in the form of restricted stock units awards.

For the NEOs and other key employees, our long-term incentives program is designed to (i) provide for a range of vesting performance levels instead of all-or-nothing, (ii) ensure rigorous performance hurdles, (iii) provide further alignment with stockholder interests by using a relative TSR measure, and (iv) ensure the retention of management in all market cycles. The program balances each of these objectives by incorporating the following equity vehicles:

 

Relative TSR Performance   Stock Award				ROE Stock Award				Retentive Restricted Stock Award
At-risk equity incentive designed to enhance the pay-for-performance structure and stockholder alignment, while motivating and rewarding senior management for superior relative TSR performance				At-risk equity incentive designed to enhance the pay-for-performance structure, while motivating and rewarding senior management for the achievement of rigorous ROE goals				Structured to retain executives while subjecting recipients to the same market fluctuations as stockholders, thereby motivating management to create long-term value through long-term vesting and holding requirements

 

48   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

The key terms of each of these equity vehicles are as follows:

 

		33.3% of Award (40% beginning with 2021 grants)		3-year Relative TSR Stock Award		Cliff vesting 3 years after grant date if relative TSR performance hurdles are achieved vs. the MSCI World Real Estate Index and subject to the NEO’s continued employment. Awards will be forfeited for below threshold performance. Earned awards are required to be held for 3 years following the vesting date.
						RESULT                                         HURDLES Maximum                                        +1,200bps (100% vested) Target                                             +0bps (66.7% vested) Threshold                                        -1,200bps (33.3% vested)
		33.3% of Award (40% beginning with 2021 grants)		ROE Performance Stock Award		3-year annual vesting after grant date, subject to the achievement of ROE hurdles and subject to the NEO’s continued employment. Awards will be forfeited for below threshold performance. Earned awards are required to be held for 3 years following the vesting date.
						RESULT                                         HURDLES Maximum                                        +12.5% (100% vested) Target                                             +10.0% (66.7% vested) Threshold                                       +7.5% (33.3% vested)
		33.3% of Award (20% beginning with 2021)		Retentive Restricted Stock Award		3-year annual pro-rata vesting after grant date, subject to the NEO’s continued employment. Vested awards are required to be held for 3 years following the vesting date.

Annual equity awards are determined and granted in the first quarter each year along with cash bonus payments and are intended to reward the previous year’s performance. In 2020, annual equity awards were granted on January 16, 2020, prior to the onset of the COVID-19 pandemic. The Compensation Committee maintained target levels for annual 2020 equity awards consistent with those applicable to its 2019 annual equity awards and granted our NEOs the following restricted stock awards:

 

Named Executive   Officer		Total Equity Award (# of shares at Target)				Relative TSR Stock Award     (# of shares at Target)				ROE     Performance Stock Award (# of shares at Target)				Retentive Restricted Stock Award (# of shares at Target)				Total Grant Date Fair Value(1)
William J. McMorrow			287,738				95,913				95,912				95,913				$5,516,896
Mary Ricks			239,043				79,681				79,681				79,681				$4,583,251
Justin Enbody			97,388				32,463				32,462				32,463				$1,867,252
Kent Mouton			101,815				33,939				33,938				33,938				$1,952,132
Matt Windisch			121,734				40,578				40,578				40,578				$2,334,047

 

(1)	Based on the grant date fair value as calculated by an independent third-party appraiser in accordance with FASB ASC Topic 718.

100% of 2020 Annual Restricted Stock Award

 

Kennedy Wilson / Proxy Statement 2021 /   49

CORPORATE GOVERNANCE AND BOARD MATTERS

 

 

 

Key Terms of the Relative TSR Stock Awards

Under the terms of the 2020 restricted stock awards granted to our NEOs, the relative TSR restricted shares are scheduled to cliff vest upon the conclusion of the three-year period ending on December 31, 2023 if our TSR equals or exceeds the hurdles set forth below relative to the MSCI World Real Estate Index for such period, subject to the NEO’s continued employment through the vesting date (except as otherwise described below).

 

Performance Level		3-Year Relative TSR Hurdle				Payout Percentage
Maximum			+1,200bps				100%
Target			+0bps				67%
Threshold			-1,200bps				33%

Payouts at performance levels in between the hurdles will be calculated by straight-line interpolation. Any shares not earned at the end of the performance period will be forfeited to the extent that the threshold performance level is not achieved. Any earned shares will be subject to an additional post-vesting holding period through the third anniversary of the date on which the shares vest.

Key Terms of the ROE-Based Performance Stock Award

Under the terms of the 2020 restricted stock awards granted to our NEOs, the ROE restricted shares are scheduled to vest one-third (1/3) at the conclusion of each of the fiscal years ending December 31st of 2020, 2021 and 2022 if our ROE equals or exceeds the hurdles set forth below for such fiscal year, subject to the NEO’s continued employment through the vesting date (except as otherwise described below).

 

Performance Level		ROE Annual Hurdle				Payout Percentage
Maximum			12.5%				100%
Target			10.0%				67%
Threshold			7.5%				33%

Payouts at performance levels in between the hurdles will be calculated by straight-line interpolation. Any shares eligible to vest at the conclusion of any fiscal year that are not earned at the end of such year will be forfeited to the extent that the threshold performance level is not achieved. Any earned shares will be subject to an additional post- vesting holding period through the third anniversary of the date on which the shares vest.

As reflected in the payout percentages specified in the tables above for the TSR and ROE restricted shares, we intend for the TSR and ROE restricted shares to vest at maximum level only if we significantly outperform our target goals.

Key Terms of the Retentive Restricted Stock Awards

Under the terms of the 2020 restricted stock awards granted to our NEOs, the retentive restricted shares vested one- third (1/3) on January 16th of 2021 and are scheduled to vest one-third on January 16th of each of 2022 and 2023, subject to the NEO’s continued employment through the vesting date (except as otherwise described below). Any vested shares will be subject to an additional post-vesting holding period through the third anniversary of the date on which the shares vest.

 

50   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

ROE Performance-Based Awards for Extraordinary 2019 Accomplishments

The following awards were based on an evaluation of 2019 performance and granted in early 2020, prior to the onset of the COVID-19 pandemic, in order to reward our NEOs for their 2019 performance during a record-breaking year for the Company. In January 2020, the Compensation Committee reviewed the Company’s performance as of the recently completed fiscal year ended December 31, 2019 and noted the following significant accomplishments:

 

·

The Company delivered record growth in 2019 and significant stabilized portfolio net operating income and fee- bearing capital growth:

 

·

Record performance for GAAP Earnings per share (52% increase for a record $1.58 per share), Adjusted EBITDA ($728 million, up from previous record of $713 million set in 2018) and Adjusted Net Income (up 11% to record level of $443 million) in 2019

 

·

Declared a 5% increase in the common dividend per share at the end of 2019 to $0.88 per share (9th consecutive year of increasing our common dividend)

 

·

Fee-bearing capital grew by 39% to $3.0 billion in 2019 (raised $1.2 billion in new fee-bearing capital offset by a decrease of $0.3 billion due to asset dispositions). Completed the $775 million fundraise for Fund VI, a value- add fund focused on properties in the Western U.S., which had an initial target of $750 million. Fund VI is 55% larger than its predecessor fund, which closed in 2016.

 

·

In-place Estimated Annual NOI from the Company’s stabilized portfolio grew by $14 million to $421 million, despite being a net seller of assets and re-investing in our development pipeline.

 

·

We returned a total of $142 million, equating to approximately $1.00 per share, of capital back to stockholders through dividends and share repurchases. Our common stock produced a 28% total return to stockholders (strongest year since 2013) resulting in the outperformance of its benchmark, the MSCI World Real Estate Index, by 400 bps.

 

·

We and our equity partners completed $3.3 billion of investment transactions and we continued our execution of significant capital recycling efforts investing $503 million of cash with 58% into new investments, 38% into capex, and 4% into its share repurchase program. We generated in excess of $536 million of cash from the asset dispositions that we executed and our share of total gains from the sale of real estate in 2019 was $371 million, an increase of $45 million from 2018.

The Compensation Committee also noted that our CEO’s compensation approximated the 35th percentile of the peer group and average NEO compensation approximated the 45th percentile of the peer group notwithstanding our strong financial results, including above average TSR performance over the longer-term three-year and ten-year periods ending December 31, 2019. To recognize management for the extraordinary accomplishments in 2019, the Compensation Committee granted special ROE-based performance stock awards in January 2020. Following these grants, our CEO’s compensation and average NEO compensation compared to our peer group was closer to the 60th percentile and was deemed appropriate by the Compensation Committee in light of the Company’s outperformance on an absolute and relative basis.

To motivate continued outperformance, the ROE-based performance stock awards granted to our NEOs require significant, industry-leading ROE performance of 12.5% in each of the next three years to earn 100% of the awards. The awards are also designed to promote the long-term alignment of the NEOs with the stockholders by restricting the grants such that they may not be fully sold until the end of three years after vesting. Please see “Key Terms of the ROE- Based Performance Stock Award” for additional vesting terms and conditions.

 

Kennedy Wilson / Proxy Statement 2021 /   51

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

The following chart provides the ROE performance awards that were approved by our Compensation Committee in January 2020 for each named executive officer based upon their performance during the Company’s exceptional year for the year ended December 31, 2019, as well as the grant date fair value of such awards.

 

Named Executive Officer		ROE Stock Awards (# of shares at Target)(1)				Total Grant  Date Fair Value(2)
William J. McMorrow			201,417				$3,992,085
Mary Ricks			132,802				$2,632,136
Justin Enbody			53,121				$1,052,858
Kent Mouton			15,493				$307,071
Matt Windisch			137,229				$2,719,879

 

(1)	Please see “Key Terms of the ROE-Based Performance Stock Award” for additional vesting terms and conditions.

(2)	Based on the grant date fair value as calculated by an independent third-party appraiser in accordance with FASB ASC Topic 718. Off-cycle awards were granted on January 16, 2020 at a grant date stock price of $22.65 and include a 12.5% discount in connection with the “no-sell” feature.

Other Material Terms of 2020 Restricted Stock Awards

Termination of Service. If an NEO’s employment is terminated by the Company or its subsidiaries without “Cause” or by the NEO for “Good Reason” (each as defined in the award agreement) (a “Qualifying Termination”), then with respect to the retentive restricted shares, the Compensation Committee may, in its sole discretion, provide that such restricted shares shall become fully vested upon such Qualifying Termination; provided, however, that such accelerated vesting shall apply automatically to the retentive restricted shares upon a termination by reason of the NEO’s death or disability. In addition, if an NEO’s employment terminates due to his or her death or disability, then any then-unvested relative TSR restricted shares and ROE restricted shares (including the ROE-based performance restricted shares for the record-breaking achievements during the year ended December 31, 2019) will remain outstanding and eligible to vest on each subsequent vesting date (without regard to the requirement that such NEO continue in employment through such vesting date) based on the level of attainment of the applicable performance goal(s) following such NEO’s death or disability.

Change of Control. In the event of a Change of Control of the Company (as defined in the Second Amended and Restated 2009 Equity Participation Plan), all then-unvested restricted shares will vest in full as of the date of the Change of Control, subject to the executive’s continued employment until immediately prior to the Change of Control.

No-Sale Period; Transferability. The restricted shares generally will not be transferable unless and until such shares vest. In addition, a grantee may not, without the consent of the Compensation Committee, transfer, sell or otherwise dispose of any vested shares prior to the earlier to occur of (i) the third anniversary of the date on which such RSUs vest, or (ii) the occurrence of a Change of Control of the Company. The transfer restrictions described in the preceding sentence will not apply to any transfer of shares to the Company, any transfer of shares in satisfaction of applicable withholding obligations with respect to the restricted shares, or any transfer following the termination of a grantee’s employment or engagement with the Company or its subsidiaries (including by will or pursuant to the laws of descent and distribution).

Distribution Equivalent Rights. Any dividends declared on the Company’s common stock with respect to unvested restricted shares will not be paid to the grantee on a current basis, but will instead accumulate and be paid to the grantee in a lump sum on the date (if any), and only to the extent, that the underlying restricted shares vest.

Definitions. For purposes of the award agreements:

“Cause” has the meaning set forth in the grantee’s employment agreement or similar agreement with the Company or its subsidiaries, or if no such agreement exists, then “Cause” means the occurrence of any of the following events: (A)

 

52   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

intentional failure to perform reasonably assigned duties, (B) dishonesty or willful misconduct in the performance of the grantee’s duties, (C) involvement in a transaction which is materially adverse to the Company or its subsidiaries, (D) breach of fiduciary duty involving personal profit, (E) willful violation of any law, rule, regulation or court order (other than misdemeanor traffic violations and misdemeanors not involving misuse or misappropriation of money or property), (F) commission of an act of fraud or intentional misappropriation or conversion of any asset or opportunity of the Company or its subsidiaries, or (G) material breach of any provision of the Second Amended and Restated 2009 Equity Participation Plan or the restricted stock award agreement or any other written agreement between the grantee and the Company or its subsidiaries, in each case as determined in good faith by the Board, the determination of which shall be final, conclusive and binding on all parties.

“Good Reason” means the voluntary termination of the engagement of the grantee with the Company or its subsidiaries within 6 months of the Company or the Company’s subsidiaries: (1) instructing the grantee to provide services full-time or substantially full-time at any location not acceptable to the grantee (other than the Company’s main headquarters) that is more than 50 miles from the grantee’s principal place of work and more than 50 miles from the grantee’s principal residence; (2) eliminating or materially reducing the grantee’s duties with the Company or the Company’s subsidiaries or (3) materially reducing the grantee’s base pay (or base compensation).

“ROE” means the ratio of (i) for any year, net income before depreciation and amortization, the Company’s share of depreciation and amortization included in income, unconsolidated investments, share-based compensation, merger related expenses, loss on early extinguishment of corporate debt and after net income attributable to noncontrolling interests before depreciation and amortization, to (ii) tangible book equity (calculated as stockholders’ equity less goodwill in accordance with generally accepted accounting principles) for the applicable year.

Other Executive Benefits

NEOs are entitled to employee benefits generally available to all full-time employees (subject to fulfilling any minimum service period). These employee benefits include, among other things, vacation and health and welfare benefits generally available to all employees. We believe these benefits are generally competitive with those offered by similar companies in the markets in which we operate.

The Company’s employees, including the NEOs, participate in a tax-qualified 401(k) plan, pursuant to which the Company may match a certain portion of employee contributions. The Company may annually match 50% of employee contributions to the plan, limited to employee contributions equal to 4% of compensation, but not to exceed $3,000 for any participant.

In 2020, the Company maintained life insurance policies for each of Messrs. McMorrow and Mouton and Ms. Ricks. As described further below under the subheading “Termination and Change in Control Benefits,” the employment agreements between the Company and each of the NEOs provide that in the event an NEO is terminated due to his or her death, such NEO is entitled to receive a certain amount in cash. The employment agreements with each of the NEOs also provide that the Company may discharge its obligations to make such cash payments by paying such amount from proceeds of an insurance policy, the beneficiary of which will be the applicable NEO. Securing such life insurance policies for each of the NEOs, relieved the Company of its cash payment obligations to the NEOs upon their respective deaths, as described under the subheading “Termination and Change in Control Benefits.” The premiums paid by the Company for each of the NEOs’ life insurance policies in 2020 were as follows: Mr. McMorrow: $1.1 million; Ms. Ricks: $274,595; and Mr. Mouton: $350,000. The Company’s obligations to pay the premiums for the life insurance policies for Messrs. Enbody and Windisch expired at the end of 2019.

Pursuant to our Corporate Security and Aircraft Policy, the Board of Directors requires that the Company’s Chief Executive Officer and the Company’s President use private air travel for both business and personal use for purposes of security, rapid availability and efficiency and communications connectivity. Company-paid private air travel for personal use under such policy is capped at 125 flight hours per year per executive. The Company’s Chief Executive Officer and President recognize imputed taxable income for income tax purposes on their personal use of private aircraft

 

Kennedy Wilson / Proxy Statement 2021 /   53

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

using Standard Industry Fare Level rates pursuant to Internal Revenue Service Regulations and are not provided a tax reimbursement for any personal use of private aircraft.

Further details regarding certain benefits are contained in the Summary Compensation Table and accompanying footnotes. These benefits are provided because the Compensation Committee has concluded that they are generally competitive with those provided to comparable executives or provide benefits to the Company which are appropriate in light of their cost.

Employment Agreements

During 2020, the Company was a party to employment agreements with all of the NEOs. Additional information regarding the employment agreements of the NEOs may be found under the subheading below “Termination and Change in Control Benefits.”

Mr. McMorrow. The employment agreement between the Company and Mr. McMorrow expires on August 6, 2025 and provides for an annual base salary of $1,500,000. Under the agreement, Mr. McMorrow is entitled to receive an annual performance bonus and equity compensation in amounts approved by the Compensation Committee, and insurance coverage and other benefits generally available to all other officers.

Mr. Enbody. The employment agreement between the Company and Mr. Enbody expires on December 29, 2023 and provides for an annual base salary of $700,000 (effective January 2019). Under the agreement, Mr. Enbody is entitled to receive an annual performance bonus and equity compensation in amounts approved by the Compensation Committee, and insurance coverage and other benefits generally available to all other officers.

Ms. Ricks. The employment agreement between the Company and Ms. Ricks expires on August 6, 2025 and provides for an annual base salary of $1,250,000. Under the agreement, Ms. Ricks is entitled to receive an annual performance bonus and equity compensation in amounts approved by the Compensation Committee, and insurance coverage and other benefits generally available to all other officers.

Mr. Windisch. The employment agreement between the Company and Mr. Windisch expires on December 29, 2023 and provides for an annual base salary of $800,000 (effective January 2020). Under the agreement, Mr. Windisch is entitled to receive an annual performance bonus and equity compensation in amounts approved by the Compensation Committee, and insurance coverage and other benefits generally available to all other officers.

Mr. Mouton. The employment agreement between the Company and Mr. Mouton expires on December 29, 2023 and provides for an annual base salary of $800,000. Under the agreement, Mr. Mouton is entitled to receive an annual performance bonus and equity compensation in amounts approved by the Compensation Committee, and insurance coverage and other benefits generally available to all other officers.

 

54   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

Minimum Ownership Guidelines

The Company’s Board of Directors expects executive officers and non-employee directors to own a meaningful equity interest in the Company to more closely align the interests of directors and executive officers with those of stockholders. Accordingly, since 2018, executive officers have been required to hold all restricted stock awards and all shares paid in respect of vested restricted stock units for a three-year period post-vesting. In addition, the Board has established equity ownership guidelines for our executive officers and non-employee directors. The executives and directors are required to hold equity with a value equivalent to a multiple of their salary/annual cash retainer as listed in the table below:

 

Title		Multiple		Ownership Requirement     Met (as of 12/31/2020)
Chairman and Chief Executive Officer		10x Base Salary		Yes
President		4x Base Salary		Yes
Chief Financial Officer		3x Base Salary		Yes
General Counsel		3x Base Salary		Yes
Executive Vice President (NEO)		3x Base Salary		Yes
Other Executive Officers		1.5x Base Salary		Yes
Non-employee Director		4x Annual Cash Retainer		Yes

The executive officers and non-employee directors have a grace period for compliance with the minimum ownership guidelines which ends on the later of December 31, 2021 or December 31 of the year in which the fifth anniversary of the executive officer or non-employee director’s appointment or first election to the Board occurs. At the end of the grace period and on each December 31 thereafter, if the executive officer or non-employee director does not hold shares with the requisite minimum equity ownership value, the person will be required to hold all vested equity grants on an after-tax basis until the required ownership level has been satisfied.

As of December 31, 2020, each of the executive officers and non-employee directors were in compliance with the minimum ownership guidelines set forth above.

Anti-Hedging and Anti-Pledging Policies

The Company maintains anti-hedging and anti-pledging policies that prohibit our officers, directors and employees from consummating the following transactions, (i) trading in puts, calls, options or other derivative security in the Company and (ii) pledging the Company’s securities as collateral for margin loans or other similar transactions.

The anti-hedging policy prohibits our officers, directors and employees from hedging against the value of the Company while continuing to own the covered securities without the full risks and rewards of ownership. Such behavior may cause the owner to no longer have the same objectives as the Company and its other stockholders. The anti-pledging policy was implemented because pledging securities of the Company as collateral for margin loans or other transactions raises potential risks to stockholder value, particularly if the pledge is significant. Under this policy, officers, directors and employees of the Company may not margin, or agree or offer to margin, the Company’s securities as collateral for a loan obligation. As of December 31, 2020, there were no existing pledges of the Company’s stock by its executives. Mr. Minella’s existing pledging arrangements at the time of adoption of this policy were grandfathered in, with the understanding that no future pledges of Company securities will be permitted.

 

Kennedy Wilson / Proxy Statement 2021 /   55

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		Tax, Accounting and Other Considerations

Section 162(m) of the Tax Code; Tax Deductibility

Section 162(m) of the Internal Revenue Code (the “Tax Code”) disallows a tax deduction for any publicly held corporation for individual compensation exceeding $1.0 million in any taxable year for “covered employees.” Prior to the effectiveness of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), compensation that qualified as “performance based” under Section 162(m) was exempt from this deduction limitation. The Tax Act eliminated this exception for performance-based compensation for tax years beginning after December 31, 2017.

The Tax Act includes a limited grandfather provision, pursuant to which remuneration that is provided pursuant to a written binding contract in effect on November 2, 2017, and which has not been modified in any material respect on or after that date, may remain eligible for the exception for performance-based compensation under Section 162(m) (as in effect prior to the Tax Act).

The Compensation Committee has historically taken into account Section 162(m) in establishing compensation of our executive officers to preserve deductibility to the greatest extent possible and, to the extent available, intends to continue to treat qualified “performance-based” compensation that is grandfathered under the Tax Act as deductible compensation. However, the Compensation Committee retains the discretion and flexibility to award compensation that is not deductible under Section 162(m).

ASC Topic 718

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

 

56   / Kennedy Wilson / Proxy Statement 2021

COMPENSATION DISCUSSION AND ANALYSIS

 

 

 

COMPENSATION COMMITTEE REPORT

The Compensation Committee reviewed and discussed the foregoing Compensation Discussion and Analysis with the Company’s management. Based on this review and discussion with management, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

 

		Submitted by:		David Minella, Chairperson
				Norman Creighton   Cathy Hendrickson   Stanley Zax   Members of the   Compensation   Committee

Notwithstanding anything to the contrary set forth in any Company filings under the Securities Act or the Exchange Act that incorporate other filings, including this proxy statement, in whole or in part, the foregoing Compensation Committee Report shall not be incorporated by reference into any such filings.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee was established on November 13, 2009 and consists of David Minella (chairperson), Norman Creighton, Cathy Hendrickson and Stanley Zax. David Minella served as chairperson for the year ended December 31, 2020. Effective April 2021, Norman Creighton was appointed chairperson. No member of the Compensation Committee is (or was during 2020) an officer or employee of the Company or any of its subsidiaries. There are no Compensation Committee interlocks as defined by applicable SEC rules.

Compensation Policies and Practices As They Relate to the Company’s Risk Management

In connection with the implementation of its compensation philosophy, the Compensation Committee periodically evaluates the Company’s compensation practices in order to determine if the risks arising from such practices are reasonably likely to have a material adverse impact on the Company. The Compensation Committee conducted such an evaluation in 2020 and concluded that the practices were not reasonably likely to have such an impact. In reaching this conclusion, the Compensation Committee considered the structure of the Company’s short and long-term incentive compensation plans (both of which are described above) and noted, among other factors, the fact that restricted stock grants to senior executives tie a significant portion of compensation to the long-term success of the Company, and that the formulaic annual bonus plan includes individual caps and performance metrics that are largely based on the operating performance of the Company. The Company believes that its compensation policies and practices for all employees, including executive officers, do not create risks that are reasonably likely to have a material adverse effect on the Company.

 

Kennedy Wilson / Proxy Statement 2021 /   57

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Compensation Tables

2020 SUMMARY COMPENSATION TABLE

The following table summarizes the total compensation paid to or earned by each of our NEOs for the years ended December 31, 2020, 2019 and 2018.

 

Name and   Principal Position		Year				Salary				Bonus				Stocks Awards(1)				Non-Equity Incentive Plan Compensation				All Other Compensation				Total
William J. McMorrow Chairman and Chief Executive Officer			2020			$	1,500,000				—				9,508,981				3,600,000				1,835,970	(2)		$	16,444,951
			2019				1,500,000				—				8,388,784				4,500,000				1,923,696				16,312,481
			2018				1,500,000				—				5,708,664				4,500,000				1,718,243				13,426,907
Justin Enbody Chief Financial Officer			2020				700,000				—				2,920,110				1,400,000				133,421	(3)			5,153,531
			2019				694,446				—				2,839,196				1,750,000				204,126				5,487,768
			2018				600,000				500,000				1,932,034				1,500,000				214,934				4,246,968
Mary Ricks President			2020				1,250,000				—				7,215,387				3,000,000				782,810	(4)			12,248,197
			2019				1,250,000				—				6,969,049				3,750,000				779,148				12,748,197
			2018				1,093,750				—				4,742,400				3,000,000				989,140				9,825,290
Kent Mouton General Counsel and Director			2020				800,000				—				2,259,203				1,120,000				484,577	(5)			4,663,780
			2019				800,000				—				2,968,321				1,400,000				459,400				5,627,721
			2018				800,000				—				2,019,966				1,400,000				482,334				4,702,300
Matt Windisch Executive Vice President			2020				797,917				—				5,053,925				1,920,000				169,286	(6)			7,941,128
			2019				741,667				—				3,549,063				2,250,000				252,311				6,793,041
			2018				600,000				500,000				2,415,166				1,800,000				266,934				5,082,100

 

 

(1)

The values in this column reflect the aggregate grant date fair value of the restricted shares awards granted in 2020 computed in accordance with ASC Topic 718. The restricted shares award values for the shares subject to return on equity financial performance conditions (the “ROE restricted shares”) are based on the probable outcome at the time of grant which was at the target payout level. The maximum values for the annual and extraordinary performance ROE restricted shares assuming the highest level of performance is achieved are $8,839,582, $2,544,392, $6,317,109, $1,469,594, and $5,286,192 for Mr. McMorrow, Mr. Enbody, Ms. Ricks, Mr. Mouton and Mr. Windisch, respectively. The fair value of the TSR RSUs is estimated using a Monte Carlo simulation based on the probable outcome at the time of grant. Information regarding the valuation assumptions used in the calculations is included in Note 13 to the Company’s financial statements for the fiscal year ended December 31, 2020 contained in the Company’s Annual Report on Form 10-K. The maximum values for the TSR restricted shares assuming the highest level of performance is achieved are $1,714,924, $580,438, $1,424,696, $606,829, and $725,535for Mr. McMorrow, Mr. Enbody, Ms. Ricks, Mr. Mouton and Mr. Windisch, respectively.

(2)

Includes $3,000 in Company contributions to Mr. McMorrow’s account in the Company’s tax qualified 401(k) savings plan; dividend payments on unvested shares of restricted stock of $558,049; life-insurance premium payments of $1,092,279; and personal air travel expenses in the amount of $182,642, which represents the aggregate incremental cost to the Company for Mr. McMorrow’s personal use of private aircraft based on hourly flight charges and other variable costs incurred by the Company for such use, including variable fuel charges, departure fees, and landing fees. As discussed above, for security and efficiency reasons, Mr. McMorrow is required to use private aircraft for all business and personal travel. On occasion, Mr. McMorrow’s guests accompanied him when traveling on the private aircraft. Such travel by guests did not result in any incremental cost to the Company. Please see “Other Executive Benefits” above for additional details.

(3)	Includes $3,000 in Company contributions to Mr. Enbody’s account in the Company’s tax qualified 401(k) savings plan; and dividend payments on unvested shares of restricted stock of $130,421.

(4)

Includes $3,000 in Company contributions to Ms. Ricks’ account in the Company’s tax qualified 401(k) savings plan; dividend payments on unvested shares of restricted stock of $410,251; life-insurance premium payments of $274,595; and personal air travel expenses in the amount of $94,964, which represents the aggregate incremental cost to the Company for Ms. Ricks’ personal use of private aircraft based on hourly flight charges and other variable costs incurred by the Company for such use, including variable fuel charges, departure fees, and landing fees. As discussed above, for security and efficiency reasons, Ms. Ricks is required to use private aircraft for all business and personal travel. On occasion, Ms. Ricks’ guests accompanied her when traveling on the private aircraft. Such travel by guests did not result in any incremental cost to the Company. Please see “Other Executive Benefits” above for additional details.

 

58   / Kennedy Wilson / Proxy Statement 2021