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Name | Symbol | Market | Type |
---|---|---|---|
Franklin BSP Realty Trust Inc | NYSE:FBRT-E | NYSE | Preference Share |
Price Change | % Change | Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 21.27 | 21.27 | 21.14 | 21.16 | 570 | 17:33:40 |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant x | |
Filed by a Party other than the Registrant ¨ | |
Check the appropriate box: | |
¨ | Preliminary Proxy Statement |
¨ | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
¨ | Definitive Proxy Statement |
x | Definitive Additional Materials |
¨ | Soliciting Material under §240.14a-12 |
Franklin BSP Realty Trust, Inc. | |
(Name of Registrant as Specified In Its Charter) | |
(Name of Person(s) Filing Proxy Statement, if other than the Registrant) | |
Payment of Filing Fee (Check the appropriate box): | |
x | No fee required. |
¨ | Fee paid previously with preliminary materials. |
¨ | Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0-11 |
Explanatory Note: The following is a communication that Franklin BSP Realty Trust, Inc. sent to certain of its stockholders starting on May 22, 2023.
* * *
Good morning,
On May 17th, ISS issued its 2023 proxy research report on FBRT. ISS recommended in favor of all directors and proposals at FBRT’s upcoming 2023 annual meeting of stockholders except for our non-binding stockholder advisory vote on the compensation of our named executive officers (NEOs), also known as “say on pay”. For the reasons set forth below, we ask you to vote with the Board’s recommendation “FOR” this “say on pay” proposal.
As an externally managed REIT, FBRT does not have any employees. Our external manager performs our day-to-day management functions through its employees, including those employees that serve as our NEOs. As a result, our NEOs are compensated by the Advisor and not by FBRT. The only compensation FBRT issues to its NEOs and other employees of the external manager is in the form of discretionary equity grants approved by the Compensation Committee of our Board, which is comprised entirely of independent directors. The proxy statement includes all disclosure regarding this compensation required by the Securities and Exchange Commission (SEC) and it is this SEC-required disclosure about the compensation FBRT paid to its NEOs that is the focus of the “say on pay” proposal.
ISS did not object to the compensation FBRT paid to its NEOs in 2022, and in fact the ISS report notes that the amount is well below the compensation levels of the ISS-designated peer group for FBRT (e.g., CEO pay of 0.21x of ISS peer median). ISS did not object to FBRT’s disclosure about the compensation FBRT paid to its NEOs. ISS’s sole objection related to FBRT’s voluntary disclosures about the compensation practices of FBRT’s external manager.
The SEC does not require any disclosure regarding the external manager’s pay practices. However, ISS has developed its own requirements which are set forth in its “Compensation Policies—Frequently Asked Questions” document. Although we do not believe relevant to our “say on pay” proposal, to accommodate ISS we voluntarily disclosed in the proxy statement the information ISS requires about the external manager’s pay practices. The following table sets forth the ISS requirements set forth in this policy and the responsive disclosure FBRT voluntarily included in its 2023 proxy statement:
1 |
We understand that notwithstanding our response to the first requirement, ISS’s position is that we must still disclose the total amount of compensation the external manager paid to our NEOs (including for services unrelated to us) compared to our total management fee. We believe the information ISS is demanding (which the external manager is not required to provide to us) is irrelevant to our “say on pay” proposal. FBRT and the Board have no influence over the compensation the external manager pays to its NEOs, some of which relate to services unrelated to us, and FBRT’s Compensation Committee does not consider such amounts in determining annual equity awards. The ISS information may also be confusing to stockholders as it incorrectly suggests the “say on pay” proposal relates to approval of the external manager’s compensation program.
We believe we have provided stockholders all necessary information to make an informed advisory vote on the compensation FBRT pays its NEOs and we ask you and our other valued stockholders to vote with the Board’s recommendation “FOR” this proposal. Of course, we welcome your feedback and the opportunity to discuss our pay program in more detail. Please let me know if a discussion would be beneficial.
Thank you,
2 |
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