US REIT sector (15 underperforming large-cap REITs)
15 large-cap REITs persistently underperformed their proxy peers over 1-, 3- and 5-year periods yet kept paying CEOs the same — shareholders should vote against comp committees and say-on-pay.
Thesis
Land & Buildings' June 2025 white paper argues that 15 REITs above $4bn market cap consistently underperformed their proxy peers on total shareholder return over trailing 1-, 3- and 5-year periods ending March 31, 2025, yet executive compensation was rarely adjusted — often exceeding $10M at names like Healthpeak, Host Hotels, Crown Castle, Rexford and WP Carey. The firm contends that benchmarking CEO pay against similarly sized companies is fundamentally flawed, incentivizing empire-building over returns, with compensation consultants serving as a smokescreen and boards selecting unrelated-sector proxy peers with notoriously high pay. With 2025 annual meetings approaching, Land & Buildings names the compensation committee members at each of the 15 REITs and urges shareholders to vote against them and against say-on-pay at Healthpeak, Realty Income, Alexandria, Crown Castle, AvalonBay, Equity Residential and the others.
SCQA
REIT compensation committees benchmark CEO pay against similarly sized or cross-sector peers and rarely adjust for shareholder returns, leaving packages of $4-28M in place regardless of performance.
Analysis of 59 REITs over $4bn market cap found 15 — including Healthpeak, Crown Castle, Alexandria, Host Hotels and Rexford — underperformed proxy peers on 1-, 3- and 5-year TSR while comp was held flat or raised.
Vote against the named compensation committee members and against say-on-pay at the 2025 annual meetings, and hold executives to the same accountability standards — including termination without severance — as other employees.
Alignment of CEO pay with shareholder returns, elimination of structural overpayment at chronically underperforming REITs, and a credible threat of termination-without-severance that restores fiduciary discipline to boards.
The three reasons
- 1
15 large-cap REITs underperformed proxy peers over trailing 1-, 3- and 5-year periods while CEO pay was rarely adjusted
- 2
Benchmarking CEO pay against similarly sized companies is flawed — it rewards growth over shareholder returns
- 3
Comp consultants and cross-sector proxy peer groups serve as a smokescreen to rationalize inflated packages
Primary demands
- Vote against compensation committee members at the 15 underperforming REITs
- Vote against the advisory say-on-pay proposals at those REITs
- Solicit and integrate shareholder perspectives into executive compensation design
- Benchmark compensation against truly comparable companies (e.g. apartment REITs vs. apartment REITs), not cross-sector proxies
- Implement accountability measures escalating to termination without severance for underperforming executives
KPIs cited
Pattern membership
Where this document fits across the library's 12 rhetorical / structural patterns.
Notable slides (3)
Notes
Sector-wide governance/comp white paper rather than a single-target activist campaign. Written in first person (references author's 1990s sell-side background) — almost certainly by Jonathan Litt, L&B founder, but no explicit signature on the visible pages, so author_name left null. Filename carries '2025-05' but cover, header and page-3 publication line all read 'June 2025'; date set to 2025-06-01. Names 52+ individual comp committee members by last name across 15 REIT boards — unusually direct villain-naming for a thought piece. Page 1 uses a distinctive blue 'KEY POINTS' sidebar that doubles as the SCQA compression. No valuation framework, no stake disclosed — this is a proxy-season voting call, not a single-name thesis.