DEF 14A
CubeSmart (CUBE)
DEF 14A
2022-04-01
For: 2022-05-17
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Added on
June 12, 2026
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A Letter from our CEO<br>Dear Shareholder:<br>2021 was an unprecedented year for the self-storage industry and our Company. Elevated demand trends helped<br>to push industry occupancies to record highs and drive significant rental rate growth. Strong cash flows increased<br>interest in the sector which supported a robust transaction market and led to a record volume of self-storage<br>assets trading hands. These strong industry fundamentals provided a supportive backdrop as we executed across<br>all of our core strategic growth objectives.<br>Our operating platform efficiently executed on its objective of maximizing property cash flows, leading to record<br>same-store growth. Our sophisticated revenue management systems responded to exceptional demand levels<br>over the spring and summer with meaningful increases to rental rates to maximize long-term revenues. We<br>maintained focus on providing our industry-leading customer service in a rapidly changing environment through<br>enhancements to our online rental platform SmartRental, our mobile app, and other digital platforms.<br>In December, we closed on a key strategic transaction, acquiring the Storage West platform for $1.7 billion. This<br>transaction accretively increased our presence in high growth, top-40 MSAs throughout the southwestern United<br>States, further diversifying our market exposure while enhancing our portfolio demographics. Financing this<br>transaction showcased the strength of our balance sheet and liquidity position as we successfully executed an<br>attractively priced $1.8 billion capital raise comprised of a $765.6 million equity offering and a $1.05 billion dual-<br>tranche unsecured senior note offering.<br>We remained disciplined on the external growth front as we continued to look for opportunities to further enhance<br>our portfolio while maintaining our focus on transactions that generate attractive risk-adjusted returns. In addition<br>to the Storage West transaction, we acquired nine stores for $152.8 million and unconsolidated joint ventures in<br>which we hold a 20% ownership interest acquired 12 stores for $252.4 million. Given the healthy transaction<br>market, we chose to dispose of five non-core properties for $43.8 million. Our development pipeline continued to<br>deliver as we opened four new stores for a total cost of $95.9 million.<br>We remain committed to the flexibility and low cost of capital afforded by our investment-grade balance sheet as<br>we financed our growth in a manner consistent with our BBB/Baa2 rating. In addition to the Storage West<br>financing, we raised another $200.0 million through our at-the-market (“ATM”) equity program and repaid the<br>$300 million of 4.375% senior notes scheduled to mature in 2023. We continued to strategically share our cash<br>flow growth with our shareholders by announcing a 26.5% increase to our quarterly dividend payable in January<br>2022.<br>Corporate responsibility remains a key tenet of our sustainable growth strategy. In 2021, we released our<br>inaugural sustainability report that includes information on all of our major ESG (environmental, social, and<br>governance) initiatives. Included in our sustainability report was the establishment of sustainability targets and<br>disclosure on key environmental impact metrics.<br>In closing, 2021 was an exceptional year for CubeSmart as our platform responded to strong industry<br>fundamentals to generate record growth. We are excited heading into 2022 as our platform is well positioned to<br>continue to execute on all pillars of our growth strategy as we focus on creating long-term value for all of our<br>stakeholders.<br>Sincerely,<br><br><br>Christopher P. Marr<br>Trustee, President and Chief Executive Officer<br><br><br>1 |
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NOTICE OF THE 2022 ANNUAL MEETING OF SHAREHOLDERS<br>Notice is hereby given that the 2022 annual meeting of shareholders of CubeSmart will be held on Tuesday, May<br>17, 2022 at 8:00 a.m. Eastern Time, at the offices of CubeSmart, 5 Old Lancaster Road, Malvern, PA 19355.<br>Record Date<br>Shareholders of record at the close of business on March 15, 2022 are entitled to vote at the meeting.<br>Items of Business<br> • To elect as Trustees the eight individuals named in this proxy statement to serve until our 2023 annual meeting<br>of shareholders and until their successors are duly elected and qualified.<br> • To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year<br>ending December 31, 2022.<br> • To cast an advisory vote to approve our executive compensation.<br> • To transact such other business as may properly come before the meeting or any adjournment or<br>postponement of the meeting.<br>The proxy statement that follows describes each of these items in detail.<br>The health and well-being of our shareholders is a high priority. Should we conclude that concerns relating to the<br>impact of the COVID-19 pandemic make it advisable for us to hold the 2022 annual meeting at a different location<br>or solely by means of remote communication (i.e., a virtual-only meeting), we will announce the decision in<br>advance, and will provide information on such an alternative meeting on our website at www.cubesmart.com<br>under “Investor Relations.” Please check our website periodically prior to the meeting date.<br>Your vote is important. Whether or not you plan to attend the annual meeting, please vote your shares<br>electronically via the Internet, by telephone or, if you receive a paper copy of the proxy materials, by signing,<br>dating, and completing the accompanying proxy card in the enclosed postage-paid envelope. Voting electronically<br>via the Internet, by telephone, or by returning your proxy card in advance of the meeting does not deprive you of<br>your right to attend the meeting. If you attend the meeting, you may vote your shares in person, even if you have<br>previously submitted a proxy in writing, by telephone or via the Internet. This proxy statement includes additional<br>instructions on voting procedures for shareholders whose shares are held by a brokerage firm or other<br>custodian.<br>By Order of the Board of Trustees,<br><br><br><br><br>Jeffrey P. Foster<br>Chief Legal Officer and Secretary<br><br>Malvern, Pennsylvania<br>April 1, 2022<br>2 |
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TABLE OF CONTENTS
| Section | Page |
|---|---|
| Summary Meeting Information | 4 |
| About CubeSmart | 5 |
| 2021 Highlights | 6 |
| Executive Compensation Highlights | 7 |
| Environmental, Social & Governance | 8 |
| Overview | 8 |
| Oversight & Risk Management | 8 |
| Environmental | 8 |
| Social | 9 |
| Governance | 10 |
| Proposal 1: Election of Trustees | 11 |
| Trustee Nominees | 12 |
| Overview of Trustee Nominees | 12 |
| Details of Trustee Nominees | 12 |
| Summary of Trustee Qualifications | 15 |
| Trustee Compensation | 16 |
| Cash Compensation | 16 |
| Equity Awards | 16 |
| Trustee Deferred Compensation Plan | 16 |
| Trustee Compensation Table | 17 |
| Corporate Governance | 18 |
| Corporate Governance Documents | 18 |
| Trustee Independence | 18 |
| Risk Management | 19 |
| Trustee Share Ownership Guidelines | 20 |
| Communications with the Board | 20 |
| Board Committee Membership and Meetings | 21 |
| Board Meetings | 21 |
| Non-Executive Chair of the Board;<br><br>Executive Sessions | 21 |
| Board Committees Overview | 21 |
| 2021 Board Membership Summary | 22 |
| Audit Committee | 23 |
| Overview | 23 |
| Audit Committee Report | 23 |
| Section | Page |
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| Fees Paid to Independent Registered<br><br>Accounting Firm | 24 |
| Pre-Approval Policies and Procedures | 24 |
| Compensation Committee | 25 |
| Corporate Governance & Nominating Committee | 26 |
| Overview | 26 |
| Trustee Qualifications, Recruitment &<br><br>Nominations | 26 |
| Named Executive Officers | 28 |
| Named Executive Officer Compensation | 29 |
| Compensation Discussion & Analysis | 29 |
| CEO Pay Ratio | 40 |
| Summary Compensation Table | 41 |
| Grants of Plan-Based Awards | 43 |
| Outstanding Equity Awards | 44 |
| Shares Vested and Options Exercised | 45 |
| Nonqualified Deferred Compensation | 46 |
| Severance Plan and Potential Payments<br><br>Upon Termination or Change in Control | 47 |
| Ownership of Company Shares | 50 |
| Proposal 2 – Ratification of Independent Registered Accounting Firm | 52 |
| Proposal 3 – Advisory Vote on Executive Compensation | 53 |
| Policies Regarding Transactions with Related Persons | 54 |
| Information about Voting and Proxy Materials | 55 |
| Questions and Answers About Voting | 55 |
| Householding of Proxy Materials | 58 |
| Other Matters | 59 |
| Appendix – Reconciliation of Non-GAAP Measures | 61 |
| FFO and FFO, as adjusted | 61 |
| NOI | 63 |
| Same-Store Results | 64 |
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SUMMARY MEETING INFORMATION<br>Meeting Details<br>The annual meeting of shareholders will be held on May 17, 2022 at 8:00 a.m. Eastern Time at the offices of<br>CubeSmart, 5 Old Lancaster Road, Malvern, Pennsylvania 19355.<br>Voting Information<br>Voting by Internet and telephone is available 24 hours a day until 11:59 pm Eastern Time on the day before<br>the annual meeting.<br>We have provided to our shareholders a Notice of Internet Availability of Proxy Materials (the “Notice”),<br>which instructs you as to how you may access and review all of the proxy materials on the Internet. The<br>Notice also instructs you as to how you may submit your proxy on the Internet. If you would like to receive a<br>paper or email copy of our proxy materials, at no charge, you should follow the instructions for requesting<br>such materials in the Notice. This proxy statement and related materials are being first mailed or made<br>available to shareholders on or about April 1, 2022.<br>For further details on voting, see the details listed on the proxy card or reference “Information About Voting<br>and Proxy Materials” on page 55.<br>Proposals<br>The following proposals are scheduled to be voted upon at the annual meeting:<br>Proposal Board Recommendation Page for details<br>Election of Trustees For (each nominee) 11<br>To elect as Trustees the eight individuals named in this proxy statement to serve until our 2023 annual<br>meeting of shareholders and until their successors are duly elected and qualified.<br>Ratification of Independent Registered<br> Public Accounting Firm For 52<br>To ratify the appointment of KPMG LLP as our independent registered public accounting firm for the year<br>ending December 31, 2022.<br>Advisory Vote on Executive Compensation For 53<br>To cast an advisory vote on our named executive officer compensation as described in this proxy<br>statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the<br>opportunity to express their views on our named executive officers’ compensation. This vote is non-<br>binding.<br><br>4 |
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(1) FFO is a non-GAAP financial measure. See appendix to this proxy statement for a discussion of non-GAAP financial measures and<br>reconciliations to the most directly comparable GAAP financial measures.<br>ABOUT CUBESMART<br>5<br>Who We Are<br>We are a self-administered and self-managed real estate investment trust (“REIT”) focused primarily on the<br>ownership, operation, management, acquisition, and development of self-storage properties in the United<br>States.<br>Our Mission<br>To simplify the organizational and logistical challenges created by the many life events and business needs<br>of our Customers through innovative solutions, unparalleled service, and genuine care.<br> Snapshot at December 31, 2021<br>1,258<br>Properties<br>37<br>States with<br>operations<br>$16.0 Billion<br>Market cap<br>Long-Term Growth<br>Value Creation Strategy<br>Building an industry leading<br>platform to generate outsized<br>growth from our high-quality<br>portfolio while maximizing long-<br>term shareholder value |
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2021 HIGHLIGHTS<br>6<br>Overview<br>2021 was a remarkable year for our sector and our Company. Our sophisticated platform maximized performance<br>which led to robust growth given the supportive fundamental environment. Our innovative team continues to work<br>diligently to execute across our key strategic objectives of:<br> • Delivering robust operational and financial growth: we generated substantial growth in our same-store<br>portfolio through elevated occupancies and strong growth in rental rates which led to a significant increase in<br>FFO, as adjusted<br> • Growing our portfolio of high-quality, well-positioned storage assets: we acquired 66 stores, highlighted by<br>the $1.7 billion Storage West transaction which enhanced our portfolio and further diversified our geographic<br>exposure, adding high-quality assets in key growth markets<br> • Maintaining a conservative, unsecured balance sheet: we showcased our ability to access a wide array of<br>attractively priced capital while maintaining prudent leverage ratios consistent with our BBB/Baa2<br>investment-grade balance sheet<br>$1.8 B<br>Acquisitions<br>$95.9 M<br>Development<br>openings<br>$1.05 B<br>Unsecured senior<br>notes<br>22.7%<br>FFO, as adjusted<br>growth (1)<br>17.2%<br>Same-store NOI<br>growth (1)<br>13.1%<br>Same-store<br>revenue growth<br>138<br>New management<br>contracts<br>$766 M<br>Common share<br>offering<br>5.0 M<br>Shares issued<br>under the ATM<br>(1) FFO and NOI are non-GAAP financial measures. See appendix to this proxy statement for a discussion of non-GAAP financial measures and reconciliations<br>to the most directly comparable GAAP financial measures. |
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EXECUTIVE COMPENSATION HIGHLIGHTS<br>2021 Compensation Summary<br>Named Executive<br>Officer (“NEO”) Position Salary Long-Term<br>Equity Award<br>Annual Incentive<br>Award<br>All Other<br>Compensation Total<br> Christopher P. Marr President and Chief Executive Officer $ 800,000 $ 4,100,019 $ 2,191,200 $ 495,586 $ 7,586,805<br> Timothy M. Martin Chief Financial Officer and Treasurer $ 480,000 $ 1,039,997 $ 876,480 $ 200,235 $ 2,596,712<br> Joel D. Keaton Chief Operating Officer $ 425,000 $ 600,012 $ 698,445 $ 91,349 $ 1,814,806<br> Jeffrey P. Foster Chief Legal Officer and Secretary $ 415,000 $ 489,994 $ 682,011 $ 131,424 $ 1,718,429<br><br>Our executive compensation is designed to attract and retain the best<br>possible executive talent, aligning executive goals with short- and<br>long-term Company performance.<br>83% of our CEO pay and 72% of our other NEO pay was<br>incentive-based in 2021, tying our NEOs’ compensation to Company and<br>shareholder success.<br>2021 CEO Compensation 2021 other NEO Compensation<br>For further details on our executive compensation, please see the Named Executive Officer<br>Compensation section of this report on pages 29-49.<br>7 |
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Overview<br>We are committed to growing strategically and consciously in a sustainable manner that is beneficial to all of our<br>stakeholders while adhering to our core values. We view our Environmental, Social & Governance (“ESG”)<br>initiatives as fundamental to this effort. We continue to prioritize opportunities to reduce the environmental<br>impact of our stores, improve engagement with our teammates, investors, and the communities in which we<br>operate, and maintain sound corporate governance practices.<br>As part of our ESG program, we have established targeted improvements aligned with the United Nations’<br>Sustainable Development Goals. We will report our progress against these targets annually in our Sustainability<br>Report. In addition to the following discussion, please see our Sustainability Report, available on our investor<br>relations website at investors.cubesmart.com. The Sustainability Report is not incorporated by reference into this<br>proxy statement.<br>Oversight & Risk Management<br>Our ESG initiatives are broadly managed by an internal committee chaired by our CFO and includes senior team<br>members from across the organization. The Corporate Governance & Nominating Committee of our Board of<br>Trustees (the “Board”) oversees our ESG efforts. Our senior management team regularly reports to the Board on<br>the status of our ESG program, our performance against the goals we’ve set, and updates on the various<br>initiatives we’ve undertaken to improve our sustainability.<br>These ESG initiatives complement our broader program of risk management. We regularly evaluate our portfolio<br>for risks within our key markets and individual assets. Self-storage properties have low obsolescence, and we<br>invest in maintenance and capital projects to further extend the useful life of our stores. While we remain focused<br>on climate-related risks that could impact our portfolio, we believe the significant regional diversification and the<br>low emissions and energy consumption of our stores somewhat mitigates climate and environmental regulatory<br>risks to our portfolio.<br>Environmental<br>We are focused on our environmental impact and are committed to reducing our already low environmental<br>footprint. Self-storage is a low-impact business to the environment as it consumes less energy and water while<br>emitting fewer greenhouse gases than other real estate property types.<br>We leverage a streamlined communication process for our local property managers to notify us of any physical<br>issues with our properties that would have an adverse impact on energy or water usage. Additionally, we utilize a<br>centralized system to monitor usage data in real time to identify potentially hidden issues and find opportunities<br>for improvement. Our facilities team is empowered to address these issues quickly to ensure our portfolio<br>operates at peak performance.<br><br><br><br><br>ENVIRONMENTAL, SOCIAL & GOVERNANCE<br>8 |
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ENVIRONMENTAL, SOCIAL & GOVERNANCE<br>9<br>Social<br>We refer to our employees as “teammates” because our culture is built on relationships. In fact, we define our<br>culture through a teammate value proposition which includes promoting a sense of belonging to a team;<br>providing opportunities to make a meaningful difference at work and in the community; supporting our<br>teammates’ ongoing personal and professional development; and offering competitive pay and rewards.<br>Diversity, Equity and Inclusion<br>Our Policy on Equal Employment Opportunity prohibits discrimination on the basis of any and all legally protected<br>characteristics and applies to all aspects of employment, including recruiting, hiring, promotion, termination, and<br>compensation. Teammates are required to participate in diversity and unconscious bias training on an annual<br>basis. Our Women@CubeSmart initiative is focused on creating an environment that supports the development<br>and advancement of our female teammates to ultimately strengthen CubeSmart.<br>The following summarizes our gender and ethnic diversity as of December 31, 2021:<br>We also continue to invest in a variety of environmentally-focused initiatives to further reduce our impact:<br>HVAC Upgrades<br>In 2021, we completed our three-year capital plan to upgrade the HVAC<br>systems throughout our entire owned portfolio to equipment that<br>meets or exceeds Energy Star requirements.<br>Solar Program<br>Our solar program reduces our<br>carbon footprint through the<br>production of renewable energy<br>while also producing attractive<br>financial returns. In 2021, we<br>completed 15 solar installations,<br>bringing our total number of owned<br>properties with solar panels to 93.<br>Lighting Retrofit<br>We have upgraded our lighting<br>with energy efficient LED<br>fixtures at 293 stores since 2015,<br>reducing energy usage and<br>carbon emissions. Energy Management System Installations<br>At 88 high-usage stores, we have installed EMS to monitor and automate<br>interior temperatures and timing of energy use.<br>Paper Reduction<br>Our online rental platform,<br>SmartRental, has expanded on<br>our efforts to reduce paper usage<br>at our stores. |
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ENVIRONMENTAL, SOCIAL & GOVERNANCE<br>Teammate Engagement<br>Since 2019, CubeSmart has been recognized as one of the 50 Most Engaged Workforces in North America by<br>Achievers. In 2021, 91% of our teammates participated in our annual engagement survey. We’ve also invested in a<br>Company-wide recognition platform to facilitate simple and meaningful appreciation. Through this platform, an<br>average of 88% of our teammates received recognition through the ~30,000 messages of appreciation sent<br>throughout the Company each quarter.<br>Teammate Development<br>During 2021, we provided an average of 17 hours of training per teammate. We also provide a tuition<br>reimbursement program for advancing formal education. We develop leaders by offering multiple programs that<br>help our teammates understand our culture and grow in their professional skillset. In 2021, over 390 teammates<br>were promoted into new roles and/or transitioned into new positions to further their career development.<br>Customers<br>Our customers are the foundation of our business and we are focused on providing the most positive customer<br>experience possible. We take customer feedback seriously and our cross-functional Customer Service Committee<br>is tasked with initiatives to improve the overall customer experience.<br>Supply Chain & Human Rights<br>We established the CubeSmart Code of Ethics, Conduct & Human Rights for Vendors and Suppliers to hold our<br>supply chain and others that we work with to our own standards, ensuring that we’re doing our part to protect<br>human rights and ensure ethical conduct. The policy states that companies we work with will not engage in child<br>labor, modern slavery, and other human rights violations. It also provides accountability for ethical business<br>conduct throughout our supply chain while encouraging health, safety, and environmental sustainability.<br>Governance<br>We remain committed to strong corporate governance practices and the highest ethical standards, ensuring<br>accountability while effectively managing risk. For further details on our corporate governance, see pages 18 to<br>27 of this proxy statement.<br><br><br>10 |
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PROPOSAL 1: ELECTION OF TRUSTEES<br>Our Board is currently comprised of eight Trustees. The term of each Trustee expires at the annual meeting.<br>Marianne M. Keler has advised the Board of her intention to retire and to not stand for re-election at the 2022<br>annual meeting. Our Board, upon the recommendation of its Corporate Governance & Nominating Committee,<br>has nominated the seven remaining current Trustees for re-election: Piero Bussani, Dorothy Dowling, John W.<br>Fain, Christopher P. Marr, John F. Remondi, Jeffrey F. Rogatz and Deborah R. Salzberg. In addition, the Board has<br>nominated Jair K. Lynch to fill the vacancy that will arise upon Ms. Keler’s retirement.<br>The Board affirmatively determined that seven of the eight nominees (Piero Bussani, Dorothy Dowling, John W.<br>Fain, Jair K. Lynch, John F. Remondi, Jeffrey F. Rogatz and Deborah R. Salzberg) are “independent” Trustees<br>under the rules of the New York Stock Exchange (the “NYSE”).<br>The Board knows of no reason why any nominee would be unable or unwilling to serve as a Trustee. If any<br>nominee is unable or unwilling to serve, the Board may designate a substitute nominee and the persons<br>designated as proxy holders will vote for the substitute nominee recommended by the Board, or the Board may<br>decrease the size of our Board, as permitted by the Bylaws of CubeSmart (the “Bylaws”). Each nominee has<br>consented to be named in this proxy statement and has agreed to serve if elected.<br>When considering whether nominees for Trustee are qualified to enable the Board to fulfill its oversight<br>responsibilities effectively in light of our business and structure, the Corporate Governance & Nominating<br>Committee and the Board focused primarily on the information summarized in each of the nominee’s individual<br>biographies set forth below.<br>The Board unanimously recommends that shareholders vote in favor of the election of each of the eight<br>nominees to serve as Trustees until the 2023 annual meeting of shareholders and until their successors are<br>duly elected and qualified.<br>11 |
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TRUSTEE NOMINEES<br>Overview of Trustee Nominees<br>Name Age Primary Occupation Trustee Since<br> Piero Bussani 57 Chief Legal Officer and Global Head – Legal and Risk<br>for ReVantage Corporate Services 2010<br> Dorothy Dowling 65 Chief Marketing Officer and Senior Vice President of Sales<br>for BWH Hotel Group 2017<br> John W. Fain 68 Retired Senior Vice President of Sales and Marketing<br>at UPS Freight 2012<br> Jair K. Lynch 50 Chief Executive Officer of Jair Lynch Real Estate Partners First-time<br>Nominee<br> Christopher P. Marr 57 President and Chief Executive Officer of CubeSmart 2014<br> John F. Remondi 60 President, Chief Executive Officer and Director of Navient 2009<br> Jeffrey F. Rogatz 60 Managing Director with Robert W. Baird and Co. 2011<br> Deborah R. Salzberg 68 Principal, Uplands Real Estate Partners 2013<br>Details of Trustee Nominees<br>Piero Bussani Age: 57 Trustee Since: 2010<br>Qualifications: Mr. Bussani has significant business and legal experience across various real estate classes. This<br>experience includes leasing, property management, customer retention, occupancy, and risk mitigation.<br>Current and Prior Experience:<br> • Chief Legal Officer and Global Head—Legal and Risk for Blackstone Group’s real estate operations platform,<br>ReVantage Corporate Services<br> • Managing Director and Chief Legal Officer for Digital Bridge Holdings, LLC<br> • Executive Vice President for Invitation Homes<br> • General Counsel and Executive Vice President of Development for Extended Stay Hotels<br> • Associate in litigation and real estate groups for Arent Fox Kintner Plotkin & Kahn<br>Dorothy Dowling Age: 65 Trustee Since: 2017<br>Qualifications: Ms. Dowling has significant experience as a senior executive in the hospitality and travel industries<br>with a focus on digital and information technologies, customer service, retention and marketing.<br>Current and Prior Experience:<br> • Chief Marketing Officer and Senior Vice President of Sales for BWH Hotel Group (formerly Best Western Hotels<br>and Resorts)<br> • Vice President of Operations for Parks and Attractions for ARAMARK<br> • President and COO of Travelodge Canada<br> • Various executive and leadership positions with Royal Host REIT and Forte Hotels<br> • Board member of the Global Business Travel Association and President of the GBTA Allied Leadership Council<br><br>12 |
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TRUSTEE NOMINEES<br>John W. Fain Age: 68 Trustee Since: 2012<br>Qualifications: Mr. Fain has knowledge and executive experience in the transportation and logistics arena as well<br>as experience in real estate law.<br>Current and Prior Experience:<br> • Various executive roles with Overnite Transportation Company, now part of UPS Freight<br> • Associate in real estate law for McGuire Woods<br> • Board member, Virginia Trucking Association<br> • Board member and Chairman Emeritus, Greater Richmond YMCA<br> • Director and member of the audit and compensation committees of Virginia Business Bank<br>Jair K. Lynch Age: 50 First-time Nominee<br>Qualifications: Mr. Lynch has considerable experience in the development and management of mixed-use real<br>estate properties.<br>Current and Prior Experience:<br> • Founder and CEO of Jair Lynch Real Estate Partners<br> • Board & committee memberships:<br> • United States Olympic Committee<br> • Initiative for a Competitive Inner City<br> • The Developer Roundtable<br> • Sidwell Friends School<br> • Federal City Council<br>Christopher P. Marr Age: 57 Trustee Since: 2014<br>Qualifications: Mr. Marr has experience with boards of directors and real estate investment trusts and, in<br>particular, knowledge and experience in the self-storage industry. Mr. Marr has gained extensive knowledge of our<br>business through his service to our Company since 2006 and his position with Storage USA, Inc.<br>Current and Prior Experience:<br> • President and CEO of CubeSmart (2014-present)<br> • President, Chief Operating Officer and Chief Investment Officer of CubeSmart (2012-2013)<br> • President and Chief Investment Officer of CubeSmart (2008-2012)<br> • Senior Vice President and Chief Financial Officer of Brandywine Realty Trust (2002-2006)<br> • Chief Financial Officer of Storage USA, Inc. (1998-2002)<br> • Board member for STAG Industrial, Inc., a publicly-traded industrial REIT<br><br>13 |
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TRUSTEE NOMINEES<br>John F. Remondi Age: 60 Trustee Since: 2009<br>Qualifications: Mr. Remondi has considerable financial management experience, including service as chief<br>executive officer and chief financial officer at a Fortune 100 financial services company.<br>Current and Prior Experience:<br> • President, Chief Executive Officer and member of the Board of Directors of Navient<br> • Various roles including President and Chief Executive Officer, Sallie Mae<br> • Portfolio Manager for PAR Capital Management Group<br> • Various financial positions, including Executive Vice President, Corporate Finance, SLM Corporation<br> • Various corporate finance positions with New England Education Loan Marketing Corporation and BayBank<br>Boston<br> • Chairman of the Board of Directors of Reading is Fundamental<br> • Board member for Nellie Mae Education Foundation<br>Jeffrey F. Rogatz Age: 60 Trustee Since: 2011<br>Qualifications: Mr. Rogatz has extensive experience working with real estate investment trusts and serving on<br>boards of directors.<br>Current and Prior Experience:<br> • Managing Director with Robert W. Baird & Co., an investment banking firm<br> • Co-founder of Palladian Realty Capital, which provides consulting and advisory services to real estate<br>companies<br> • Founder of Triangle Real Estate Advisors LLC, a real estate asset management company<br> • Founder and President of Ridgeway Capital LLC, a real estate investment and advisory firm<br> • Chief Financial Officer of Brandywine Realty Trust<br> • Managing Director and head of the REIT practice for Legg Mason Wood Walker<br> • Member of Board of Directors of CapLease, Inc., a publicly-traded diversified REIT<br> • Member of William and Mary Business School Foundation Board<br>14 |
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TRUSTEE NOMINEES<br>Deborah R. Salzberg Age: 68 Trustee Since: 2013<br>Qualifications: Ms. Salzberg has experience serving on boards of directors and has knowledge and experience in<br>the planning, development, construction and management of new construction, adaptive re-use and redeveloped<br>real estate projects.<br>Current and Prior Experience:<br> • Principal at Uplands Real Estate Partners, which specializes in real estate and financial investing<br> • 35 years experience in the real estate sector<br> • DC Region Chair of Brookfield Properties<br> • President of Forest City Washington, a division of Forest City Realty Trust<br> • Trial attorney in the Civil Division of the U.S. Department of Justice<br> • Board member, Capital Bank<br> • Member of Board of Trustees for Kenyon College, The Foundation for National Archives and Planet Word<br> • Member of Real Estate Advisory Committee for the New York State Common Retirement Fund<br> • Board Member, University of Pennsylvania Institute of Urban Research<br> • Chairman of Federal City Council<br>Summary of Trustee Qualifications<br>15 |
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TRUSTEE COMPENSATION<br>The Compensation Committee, with the input of Frederic W. Cook & Co. (“FW Cook”), an independent<br>compensation consultant, reviews our Trustee compensation program on an annual basis. Trustees are<br>compensated through an annual cash retainer and an annual equity award.<br>Cash Compensation<br>Independent Trustees were entitled to a $60,000 annual retainer for service in 2021, as well as additional<br>supplemental retainers for the following positions of service:<br>Position Annual Cash Retainer<br> Board – Chair $ 50,000<br> Audit Committee – Chair $ 30,000<br> Audit Committee – Member $ 10,000<br> Compensation Committee – Chair $ 30,000<br> Compensation Committee – Member $ 10,000<br> Corporate Governance & Nominating Committee – Chair $ 15,000<br> Corporate Governance & Nominating Committee – Member $ 7,500<br>Independent Trustees may also elect to receive all or a portion of their cash compensation in the form of<br>restricted shares.<br>Equity Awards<br>On May 11, 2021, we granted to each independent Trustee time-based restricted shares with an aggregate target<br>value of $100,000. The number of restricted shares granted was determined by dividing the target value of<br>$100,000 by the average of the trailing 30-day closing price for our common shares preceding the date of grant.<br>Each Trustee received 2,452 restricted shares with an aggregate value for each Trustee of $101,733 based on the<br>closing share price as of the grant date. These shares will vest on the earlier of the first anniversary of the grant<br>date or the Company’s annual meeting of shareholders in 2022.<br>Trustee Deferred Compensation Plan<br>Each plan year, independent Trustees may elect to defer all or a portion of their cash compensation and have such<br>amounts credited to accounts until distributed in accordance with the plan and the participants’ distribution<br>elections. Each distribution account is credited with the returns of the investment options selected by plan<br>participants, which include investment options that are available in our 401(k) plan, or such other investment<br>funds as the Board may designate from time to time.<br><br>16 |
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TRUSTEE COMPENSATION<br>Trustee Compensation Table<br>Our independent Trustees received the following compensation for the year ended December 31, 2021:<br>Trustee Fees Earned<br>or Paid in Cash Share Awards (1) All Other<br>Compensation (2) Total<br>Piero Bussani $ 77,500 $ 101,733 $ 4,319 $ 183,552<br>Dorothy Dowling $ 77,500 $ 101,733 $ 4,319 $ 183,552<br>John W. Fain $ 100,000 $ 101,733 $ 4,319 $ 206,052<br>Marianne M. Keler $ 110,000 $ 101,733 $ 4,319 $ 216,052<br>John F. Remondi $ 80,000 $ 101,733 $ 4,319 $ 186,052<br>Jeffrey F. Rogatz $ 85,000 $ 101,733 $ 8,346 $ 195,079<br>Deborah R. Salzberg $ 97,500 $ 101,733 $ 4,319 $ 203,552<br>(1) On May 11, 2021, each then serving independent Trustee was granted 2,452 restricted shares which vest on<br>the earlier of the first anniversary of the grant date or the Company’s annual meeting of shareholders in 2022.<br>The amounts listed in this column reflect the grant date fair value of the award in accordance with Financial<br>Accounting Standards Board Accounting Standards Codification Topic 718, Compensation— Stock<br>Compensation (“FASB ASC Topic 718”). Assumptions used in the calculation of these amounts are included in<br>Note 16, “Share-Based Compensation Plans,” in the Notes to Consolidated Financial Statements included in<br>our Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and<br>Exchange Commission (“SEC”) on February 25, 2022. As of December 31, 2021, each of the then non-<br>employee Trustees named above had 2,452 unvested restricted shares.<br>(2) Includes dividends paid on unvested restricted shares and deferred shares under the Trustees Deferred<br>Compensation Plan.<br><br><br>17 |
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CORPORATE GOVERNANCE<br>Corporate Governance Documents<br>Our Board maintains Corporate Governance Guidelines and a Code of Business Conduct and Ethics. To view<br>these documents, as well as the charters of each of the committees of the Board, please visit our website at<br>www.cubesmart.com. Each of these documents is also available in print, free of charge, to any shareholder who<br>requests them in writing to Secretary of CubeSmart, CubeSmart, 5 Old Lancaster Road, Malvern, Pennsylvania<br>19355.<br>Trustee Independence<br>NYSE listing standards require listed companies to have a majority of independent board members and to have<br>each of the nominating/corporate governance, compensation, and audit committees comprised solely of<br>independent Trustees. Under the listing standards and other independence requirements of the NYSE, for a<br>Trustee to qualify as “independent,” our Board must affirmatively determine that the Trustee has no material<br>relationship with us (either directly or as a partner, shareholder or officer of an organization that has a<br>relationship with us).<br>The Board evaluated the status of each Trustee who served on our Board during 2021. In its evaluation of<br>Trustee independence, our Board considers all commercial, charitable and other transactions and relationships<br>(including tenure of Board service) that any Trustee or member of his or her immediate family may have with us,<br>with any of our affiliates, or with any of our consultants or advisers. Our Board applies the same criteria for<br>assessing independence for purposes of each of the Audit Committee, Corporate Governance & Nominating<br>Committee and Compensation Committee. Furthermore, in its assessment of a Trustee’s independence for<br>service on the Compensation Committee, our Board considers all factors the Board believes specifically<br>relevant to determining whether the Trustee has a relationship which is material to such Trustee's ability to be<br>independent from management in connection with his or her duties as a member of the Compensation<br>Committee, including but not limited to any compensation payable to such Trustee. In addition, no member of<br>the Audit Committee or Compensation Committee may accept directly or indirectly any consulting, advisory or<br>other compensatory fee from us (other than fees for service as a Trustee and member of Board committees) or<br>be an affiliate of us.<br>After broadly considering all facts and circumstances, the Board affirmatively determined that each of our<br>Trustees (other than Mr. Marr) meets the independence requirements of the NYSE because each has no<br>material relationship with us. Our Board determined that Mr. Marr is not independent because of his current<br>position with us as an NEO.<br>18 |
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Risk Oversight<br>The Audit Committee oversees risks associated with financial and regulatory matters—<br>particularly financial reporting, tax, accounting, cyber security, disclosure, internal controls<br>over financial reporting, investment guidelines, material litigation, and credit and liquidity<br>matters.<br>The Compensation Committee oversees risks associated with executive compensation<br>programs and arrangements, including incentive plans.<br>The Corporate Governance & Nominating Committee oversees risks associated with<br>leadership and succession planning, as well as environmental, social, reputational, and<br>corporate governance matters.<br>CORPORATE GOVERNANCE<br>Risk Management<br>Our Board and the relevant Board Committees (defined below) have oversight of our risk management policies<br>and procedures. In addition, our President and Chief Executive Officer, Chief Financial Officer, Chief Operating<br>Officer, and Chief Legal Officer are directly responsible for our enterprise risk management function. These<br>officers report to the relevant Board Committees regarding these risks and develop programs and<br>recommendations to control the risks identified. The Board Committees then report their discussions with<br>these officers to the Board.<br>19<br>In fulfilling their risk management responsibilities, our NEOs have developed management reporting processes<br>that are designed to provide visibility to the Board about the identification, assessment, management, and<br>mitigation of critical risks. Not less than quarterly, our NEOs conduct a risk disclosure meeting with members<br>of senior management to discuss financial, legal, regulatory, technology, compliance, and reputational risks.<br>Our NEOs also report directly to the Board on at least an annual basis to apprise them directly of our risk<br>management efforts.<br>Members of our executive and officer teams also participate in the implementation of our risk management<br>policy by conducting regular reviews of all enterprise risk management policies and procedures and<br>recommending revisions to Company controls and policies. Finally, we retain outside consultants to review<br>relevant risks and to recommend policies and programs to minimize the impact of any risks identified in<br>connection with such review.<br>Information Security Risk<br>We face risks associated with security breaches through cyber-attacks, cyber intrusions, or otherwise, as well<br>as other significant disruptions of our information technology networks and related systems. The Audit<br>Committee is responsible for overseeing management’s risk assessment and risk management processes<br>designed to monitor and control information security risk. A cross-organizational cyber task force meets<br>regularly and management briefs the Audit Committee on information security matters at least once a year. |
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CORPORATE GOVERNANCE<br>We have adopted and implemented an approach to identify and mitigate information security risks that we<br>believe are commercially reasonable for real estate companies. We leverage the Center for Internet Security<br>Critical Security Control Framework as the core of our governance program and include additional best<br>practices from the Cloud Security Alliance, vendors, and other sources as necessary. We have not experienced<br>any information security breaches that resulted in significant financial loss. We have insurance coverage<br>designed to help us mitigate cyber risk exposure by offsetting costs involved with recovery and remediation after<br>an information security breach or similar event. We regularly engage independent third parties to test our<br>information security processes and systems as part of our overall enterprise risk management. We also<br>regularly conduct information security training to ensure all employees, including those who may come into<br>possession of confidential financial or personally identifiable information, are aware of information security risks<br>and to enable them to take steps to mitigate such risks.<br>Risk Management and COVID-19<br>The unprecedented challenges presented by the COVID-19 pandemic tested our risk management practices as<br>we faced impacts to our business, customers and, most importantly, our employees. Through the collaborative<br>efforts of our executive and officer teams, we maintained our store operations and continued to expand our<br>customer service platform. We also developed health and safety plans for our stores to protect our employees<br>and customers from exposure to COVID-19. Our executive and officer teams continue to meet to review updated<br>COVID-19 guidance and orders and continue to adapt our operating policies and processes to address applicable<br>COVID-19 requirements and to operate in our employees’ best interests. Through our risk management<br>processes we have been able to evaluate the impacts of COVID-19 and address the risks presented by our<br>continued operations during the pandemic. Throughout the pandemic, our NEOs have provided regular updates<br>to our Board on our health and safety efforts.<br>Trustee Share Ownership Guidelines<br>We maintain share ownership guidelines for our Board to ensure that each Trustee maintains a material<br>personal financial stake in the Company, aligning the interests of our Board with the interests of our<br>shareholders. We expect each Trustee to acquire, within five years of his or her appointment, and thereafter to<br>maintain ownership of, common shares having a market value equal to five times the Trustee’s annual base cash<br>retainer. All of our incumbent Trustee candidates are in compliance with these guidelines.<br>Communications with the Board<br>Shareholders and other interested parties may communicate with the Board or with the independent Trustees,<br>as a group or individually, by communicating directly with the Chair of the Board. Please send any<br>correspondence in writing to the “Chair of the Board” c/o Secretary of CubeSmart, 5 Old Lancaster Road,<br>Malvern, Pennsylvania 19355, who will then directly forward your correspondence to the Chair of the Board. The<br>Chair will decide what action should be taken with respect to the communication, including whether such<br>communication should be reported to the Board.<br>20 |
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BOARD COMMITTEE MEMBERSHIP AND MEETINGS<br>Board Meetings<br>Our Board holds regular and special meetings throughout the year. During 2021, the Board held seven meetings,<br>including telephonic meetings. Each Trustee is expected to attend, in person or by telephone, all Board meetings<br>and meetings of Board Committees on which he or she serves. During 2021, each Trustee attended at least 75%<br>of the Board and Board Committee meetings on which he or she served. Pursuant to our Corporate Governance<br>Guidelines, all of our Trustees are expected to attend our annual meetings of shareholders. All of our Trustees<br>then serving on our Board attended our 2021 annual meeting of shareholders.<br>Non-Executive Chair of the Board; Executive Sessions<br>Although our Corporate Governance Guidelines do not require the separation of the roles of Board Chair from<br>the Chief Executive Officer, our Board believes that independent Board leadership is an important corporate<br>governance practice. Since May 2018, Marianne M. Keler has served as our Non-Executive Chair of the Board.<br>Upon Ms. Keler’s retirement at the conclusion of the 2022 annual meeting and, upon her own re-election as<br>Trustee, Deborah R. Salzberg will serve in this role. Christopher P. Marr serves as our President, Chief<br>Executive Officer and as a Trustee. Separating the positions of Board Chair and Chief Executive Officer allows us<br>to achieve independent oversight and evaluation of our senior management and assures effective<br>communication between the Board and senior management on corporate strategy, while simultaneously<br>allowing our Chief Executive Officer to focus on growing our business and implementing our strategic business<br>plans. Our Non-Executive Chair of the Board is charged primarily with:<br> • presiding over meetings of our Board and shareholders, including executive sessions of the independent<br>Trustees;<br> • establishing an agenda and setting the timing and length for each Board meeting in collaboration with our<br>Chief Executive Officer and other Trustees and meeting with our Chief Executive Officer following each<br>meeting to discuss any open issues and follow-up items;<br> • facilitating and coordinating communication among the independent Trustees and our Chief Executive Officer<br>and an open flow of information between management and our Board;<br> • facilitating and coordinating communication among our shareholders and our Board;<br> • periodically meeting with each independent Trustee;<br> • assisting and consulting with our Chief Executive Officer, as necessary;<br> • coordinating the periodic review of management’s strategic plan; and<br> • performing such other duties and services as our Board may require.<br>Pursuant to our Corporate Governance Guidelines and the independence requirements of the NYSE, in order to<br>promote open discussion among independent Trustees, our Board devotes a portion of each regularly scheduled<br>Board meeting to sessions of independent Trustees without management participation. The Board Chair<br>presides over these sessions.<br>Board Committees Overview<br>The Board has a standing Audit Committee, Compensation Committee and Corporate Governance & Nominating<br>Committee (collectively, the “Board Committees”). All members of these committees are “independent” as that<br>term is defined in the listing standards and other independence requirements of the NYSE. The Board has<br>adopted a written charter for each of its Board Committees. The full text of each charter is available on our<br>website, www.cubesmart.com, under “Investor Relations.” In addition, each charter is also available in print, free<br>of charge, to any shareholder who requests a copy in writing to Secretary, CubeSmart, 5 Old Lancaster Road,<br>Malvern, Pennsylvania 19355.<br><br><br>21 |
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BOARD COMMITTEE MEMBERSHIP AND MEETINGS<br>2021 Board Membership Summary<br>The table below details membership information for each of the Board Committees and the number of meetings<br>held by each committee during 2021.<br>Member Chair<br>22<br>(1) Upon Ms. Keler’s retirement at the conclusion of the 2022 Annual Meeting and, upon her own re-election as<br>Trustee, Ms. Salzberg will serve as Board Chair. |
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Overview<br>The principal purposes of the Audit Committee are to assist the Board in the oversight of:<br> • the integrity of our consolidated financial statements;<br> • our compliance with legal and regulatory requirements;<br> • the qualification and independence of our independent registered public accounting firm;<br> • the performance of our internal audit function and independent registered public accounting firm; and<br> • the Company’s risk management policies that relate to the internal financial controls environment, financial<br>reporting and disclosure controls, and cybersecurity.<br>The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the<br>work of our independent registered public accounting firm and is also responsible for reviewing with our<br>independent registered public accounting firm any audit problems or difficulties they encounter during their<br>audit. The Audit Committee is also charged with reviewing our consolidated financial statements, any financial<br>reporting issues, and the adequacy of internal controls with management and our independent registered public<br>accounting firm.<br>The Board determined that Ms. Salzberg (Chair) and Messrs. Fain, Remondi and Rogatz are each an “audit<br>committee financial expert” as defined by the rules and regulations of the SEC.<br>Audit Committee Report<br>One of the principal purposes of the Audit Committee is to assist the Board in the oversight of the integrity of our<br>consolidated financial statements. Our management team has the primary responsibility for our consolidated<br>financial statements and the reporting process, including the system of internal controls and disclosure controls<br>and procedures. For fiscal year 2021, KPMG LLP, our independent registered public accounting firm, audited the<br>annual consolidated financial statements prepared by management in accordance with the standards of the<br>Public Company Accounting Oversight Board (“PCAOB”) and expressed an opinion on the conformity of those<br>consolidated financial statements with accounting principles generally accepted in the United States of America.<br>In carrying out its responsibilities, the Audit Committee has reviewed and has discussed our audited<br>consolidated financial statements for the year ended December 31, 2021 with management. Management<br>represented to the Audit Committee that our consolidated financial statements were prepared in accordance<br>with accounting principles generally accepted in the United States of America.<br>The Audit Committee is also responsible for assisting the Board in the oversight of the qualification,<br>independence, and performance of KPMG LLP. The Audit Committee discussed with KPMG LLP the matters<br>required to be discussed by PCAOB Auditing Standard No. 1301, Communications with Audit Committees. The<br>Audit Committee has received from KPMG LLP the written disclosures in accordance with the applicable<br>requirements of the PCAOB regarding KPMG LLP’s communications with the Audit Committee concerning<br>independence and has discussed with KPMG LLP its independence. In addition, the Audit Committee has<br>determined that KPMG LLP’s provision of non-audit services, and the fees charged for such non-audit services,<br>are compatible with maintaining KPMG LLP’s independence.<br>Based on the reviews and discussions described above, the Audit Committee recommended to the Board that<br>our audited consolidated financial statements for fiscal year 2021 be included in our Annual Report on Form 10-<br>K for the year ended December 31, 2021.<br>Respectfully submitted,<br>The Audit Committee of the Board of Trustees<br>Deborah R. Salzberg (Chair)<br>John F. Remondi (Vice Chair)<br>John W. Fain<br>Jeffrey F. Rogatz<br>AUDIT COMMITTEE<br>23 |
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Notwithstanding anything to the contrary set forth in any of our previous or future filings under the Securities Act<br>of 1933 (“Securities Act”) or the Securities Exchange Act of 1934 (“Exchange Act”) that might incorporate this<br>proxy statement or future filings with the SEC, in whole or in part, the above report shall not be deemed to be<br> “soliciting material” or “filed” with the SEC and shall not be deemed to be incorporated by reference into any<br>such filing.<br>Fees Paid to Independent Registered Public Accounting Firm<br>The following table summarizes the fees billed by KPMG LLP for services rendered during, or in connection<br>with, our 2021 and 2020 fiscal years.<br> 2021 2020<br> Audit fees $ 1,005,000 $ 855,000<br>Audit-related fees (1) $ 281,780 $ 201,780<br>Tax fees (2) $ 473,050 $ 382,350<br>Total $ 1,759,830 $ 1,439,130<br>(1) Audit-Related Fees include fees to review various registration statements and other agreements and for<br>the issuance of comfort letters.<br>(2) Tax fees relate to tax compliance and consulting services.<br>All audit and permissible non-audit services provided by KPMG LLP were approved by the Audit Committee,<br>either pursuant to the Audit Committee’s Audit and Non-Audit Services Pre-Approval Policy (the “Pre-Approval<br>Policy”) or through a separate pre-approval by the Audit Committee, which concluded that the services provided<br>were compatible with KPMG LLP’s independence.<br>Pre-Approval Policies and Procedures<br>The Audit Committee’s policy is to review and pre-approve, either pursuant to the Pre-Approval Policy or through<br>a separate pre-approval by the Audit Committee, any engagement of our independent registered public<br>accounting firm to provide any audit or permissible non-audit service to us. Pursuant to the Pre-Approval Policy,<br>which is reviewed and reassessed annually by the Audit Committee, a list of specific services including audit,<br>audit-related, tax and other services are specifically pre-approved for the upcoming or current fiscal year,<br>subject to an aggregate maximum annual fee payable by us for each category of pre-approved services. Any<br>service that is not included in the approved list of services must be separately pre-approved by the Audit<br>Committee. In addition, all audit and permissible non-audit services in excess of the pre-approved fee level,<br>whether or not included on the approved list of services, must be separately pre-approved by the Audit<br>Committee. The Audit Committee has delegated authority to its chair to specifically pre-approve engagements for<br>the performance of audit and permissible non-audit services, for which the estimated cost for each specified type<br>of service shall not exceed $200,000 (except that, with respect to tax-related services the costs shall not exceed<br>$475,000). The chair must report all pre-approval decisions to the Audit Committee at its next scheduled meeting<br>and provide a description of the terms of the engagement, including (a) the type of services covered by the<br>engagement, (b) the dates the engagement is scheduled to commence and terminate, (c) the estimated fees<br>payable by us pursuant to the engagement, (d) other material terms of the engagement, and (e) such other<br>information as the Audit Committee may request.<br><br><br><br><br><br>AUDIT COMMITTEE<br>24 |
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COMPENSATION COMMITTEE<br>The principal purposes of the Compensation Committee are to:<br> • review and approve our corporate goals and objectives with respect to the compensation of our Chief Executive<br>Officer, evaluate the Chief Executive Officer’s performance in light of those goals and objectives, and<br>determine and approve, either as a committee or with our other independent Trustees, the appropriate level<br>and structure of the Chief Executive Officer’s compensation;<br> • determine and approve, either as a committee or together with our other independent Trustees, the<br>compensation of the other NEOs;<br> • review, assess and recommend a succession plan for our Chief Executive Officer;<br> • make recommendations to the Board regarding compensation of Trustees; and<br> • recommend, implement, and administer our incentive and equity-based compensation plans.<br>The Compensation Committee’s primary responsibility is to determine and implement our compensation policies<br>and practices. In connection with its review of compensation levels and structure, the Compensation Committee<br>has authority, either as a committee or together with the other independent Trustees (as directed by the Board), to<br>approve grants of equity-based awards to our NEOs, including our Chief Executive Officer, and our employees.<br>With respect to compensation of our executives other than our Chief Executive Officer, the Compensation<br>Committee considers recommendations made by our Chief Executive Officer. In addition, the Board has delegated<br>to our Chief Executive Officer the authority to make one-time grants of equity-based awards to non-executive,<br>newly hired or promoted, non-officer level employees in an amount not to exceed the equivalent of $100,000. Our<br>Chief Executive Officer must regularly report to the Compensation Committee information concerning the grants<br>that are made pursuant to this authority. The Board has not delegated authority with respect to executive or<br>Trustee compensation to any other group or person.<br>In evaluating executive compensation, the Compensation Committee is authorized to retain and to authorize fees<br>and other terms of engagement for advisors such as, but not limited to, compensation consultants and legal<br>counsel. The Compensation Committee also has authority to delegate matters to one or more subcommittees as it<br>deems necessary and appropriate.<br>Since 2011, the Compensation Committee has retained FW Cook to review our compensation and benefits<br>program, analyze competitive market compensation practices and make recommendations relating to our<br>executive compensation programs. The Compensation Committee assessed the independence of FW Cook under<br>NYSE rules and concluded that the firm’s work for the Compensation Committee does not raise any conflict of<br>interest. Factors considered by the Compensation Committee include: (i) whether other services are provided to us<br>by FW Cook or its representatives; (ii) the amount of fees received by FW Cook from us as a percentage of its total<br>revenue; (iii) policies of FW Cook designed to prevent conflicts of interest; (iv) whether FW Cook or its<br>representatives have any business or personal relationship with any member of the Compensation Committee;<br>(v) whether FW Cook or its representatives own any of our securities; and (vi) whether FW Cook or its<br>representatives have any business or personal relationship with any of our NEOs.<br>The Compensation Committee has the authority to make recommendations to the Board regarding Trustee<br>compensation levels and structure. The Board, however, has the ultimate authority to approve Trustee<br>compensation levels and grants of equity-based awards to our Trustees.<br>The Compensation Committee currently consists of Messrs. Fain (Chair), Bussani, and Remondi and Ms. Dowling.<br>Each member of the Compensation Committee is independent within the meaning of the listing standards and<br>other independence requirements of the NYSE.<br>None of the members of the Compensation Committee, during 2021 or as of the date of this proxy statement, is or<br>has been an officer or employee of ours and no NEO of ours served on the Compensation Committee or board of<br>any company that employed any member of our Compensation Committee or Board.<br>25 |
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CORPORATE GOVERNANCE & NOMINATING COMMITTEE<br>Overview<br>The principal purposes of the Corporate Governance & Nominating Committee are to:<br> • identify individuals that are qualified to serve as Trustees;<br> • recommend such individuals to the Board, either to fill vacancies that occur on the Board from time to time<br>or in connection with the selection of Trustee nominees for each annual meeting of shareholders;<br> • periodically assess the size of the Board to ensure the Board can effectively carry out its obligations;<br> • develop, recommend, implement, and monitor the Corporate Governance Guidelines and the Code of<br>Business Conduct and Ethics adopted by the Board;<br> • review any related party transactions and procedures for evaluating and approving such transactions;<br> • oversee the evaluation of the Board and Board Committees;<br> • ensure that the Company is in compliance with all corporate governance requirements under the NYSE<br>listing requirements and applicable securities laws;<br> • review and assess risks and exposures associated with the Company’s corporate policies and practices<br>related to sustainability, corporate social responsibility, and corporate governance matters; and<br> • review and assess risks and exposures associated with the leadership of the Board and any Board<br>Committees.<br>Trustee Qualifications, Recruitment & Nominations<br>Our Board believes that its membership should consist of individuals with sufficiently diverse and independent<br>backgrounds and with the appropriate expertise required to serve as a director of the Company. The Corporate<br>Governance & Nominating Committee is responsible for ensuring that the Board meets this objective and is<br>responsible for reviewing the qualifications of potential trustee candidates and recommending trustee<br>candidates to be nominated for election to the Board.<br>In considering potential candidates for trustee, the Committee considers the entirety of each candidate’s<br>qualifications and credentials. Qualifications and credentials for consideration as a trustee nominee may vary<br>according to the particular areas of expertise being sought as a complement to the existing composition of the<br>Board. However, at a minimum, candidates for trustee must possess:<br> • the highest professional and personal ethics and values;<br> • a commitment to enhancing shareholder value;<br> • broad experience at the policy-making level in business, government, education, technology or public<br>interest;<br> • an ability to provide insights and practical wisdom based on their experience and expertise;<br> • a willingness and ability to devote adequate time and resources to diligently perform Board duties; service<br>on other boards of public companies (in addition to the Company) should be limited to a reasonable number<br>not to exceed three, provided that, in the case of the Chief Executive Officer, service on other boards (in<br>addition to the Company) should not exceed two;<br> • a reputation, both personal and professional, consistent with the image and reputation of the Company;<br> • an ability to exercise sound judgment and to make independent analytical inquiries; and<br> • an ability and commitment to comply with all policies of the Company applicable to trustees.<br>In addition to the minimum qualifications listed above, the Corporate Governance & Nominating Committee<br>believes that there are other qualities and skills that, while not a prerequisite for nomination, should be taken<br>into account when considering whether to recommend a particular person. These factors include:<br> • whether the person possesses specific expertise and familiarity with general issues affecting our business;<br>26 |
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CORPORATE GOVERNANCE & NOMINATING COMMITTEE<br> • whether the person’s nomination and election would enable the Board to have a member that qualifies as an<br> “audit committee financial expert” as such term is defined by the SEC;<br> • whether the person would qualify as an “independent” Trustee under the listing standards and other<br>independence requirements of the NYSE and our corporate governance guidelines;<br> • the importance of continuity of the existing composition of the Board; and<br> • the importance of a diversified Board membership, in terms of both the individuals involved and their<br>various experiences and areas of expertise.<br>The Corporate Governance & Nominating Committee will seek to identify Trustee candidates based on input<br>provided by a number of sources, including (a) Corporate Governance & Nominating Committee members, (b)<br>other members of the Board, (c) the internal search process of the corporate secretary, (d) our shareholders,<br>and (e) other interested parties. The Corporate Governance & Nominating Committee also has the authority to<br>consult with or retain advisors or search firms to assist in the identification of qualified Trustee candidates.<br>From time to time, the Corporate Governance & Nominating Committee retains the services of professional<br>search firms and other advisors to identify potentially qualified candidates for the Board.<br>As part of the identification process, the Corporate Governance & Nominating Committee determines the<br>optimal size of the Board, assessing the future needs based on anticipated Trustee vacancies, the value of<br>specific industry expertise and the willingness of existing Trustees to continue to serve as Trustees if re-<br>nominated. Once a Trustee candidate has been identified, the Corporate Governance & Nominating Committee<br>will evaluate the candidate in light of his or her qualifications and credentials, and any additional factors that it<br>deems necessary or appropriate, including without limitation the completion of a D&O Questionnaire and a<br>background check. Existing Trustees who are being considered for re-nomination are re-evaluated as part of<br>the Corporate Governance & Nominating Committee’s process of recommending Trustee candidates. The<br>Corporate Governance & Nominating Committee will consider all persons recommended by shareholders in the<br>same manner as all other Trustee candidates provided that such recommendations are submitted in<br>accordance with the procedures set forth in the Bylaws. For more information see the section entitled “Other<br>Matters — Shareholder Proposals and Nominations for the 2023 Annual Meeting” below.<br>After completing the identification and evaluation process described above, the Corporate Governance &<br>Nominating Committee recommends to the Board the nomination of a number of candidates equal to the<br>number of Trustees expected to be elected at the next annual meeting of shareholders. The Board selects the<br>Trustee nominees for shareholders to consider and vote upon at the annual meeting.<br>During 2021, the Corporate Governance & Nominating Committee consisted of Mr. Rogatz (Chair), Mr. Bussani,<br>Ms. Salzberg and Ms. Dowling. Each member of the Corporate Governance & Nominating Committee is<br>independent under the listing standards and other independence requirements of the NYSE.<br>27 |
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NAMED EXECUTIVE OFFICERS<br>Set forth below is background information on each of our NEOs other than Mr. Marr, whose background is<br>described above under “Details of Trustee Nominees.”<br>Timothy M. Martin Age: 51 Chief Financial Officer and Treasurer<br>Mr. Martin has served as our Chief Financial Officer and Treasurer since November 2008. Mr. Martin served as<br>our Senior Vice President and Chief Accounting Officer from December 2006 to November 2008. He previously was<br>employed by Brandywine Realty Trust from 1997 to 2006, serving in various roles including Principal Financial<br>Officer, Chief Accounting Officer and Director of Financial Analysis. Prior to joining Brandywine, Mr. Martin served<br>as a member of the audit staff of Arthur Andersen, LLP’s Philadelphia office, specializing in real estate.<br>Joel D. Keaton Age: 52 Chief Operating Officer<br>Mr. Keaton has served as our Chief Operating Officer since 2020. From 2014 to 2019, he served as our Senior Vice<br>President of Operations. Mr. Keaton joined the Company in 2010 as Director of Revenue Management and in 2011<br>was promoted to Vice President of Marketing. Prior to joining the Company, Mr. Keaton served as Vice President<br>of Operations at United Stor-All Management from 2006 to 2010. From 1993 to 2006, Mr. Keaton worked in various<br>operations-related roles at Storage USA and its successor, Extra Space Storage.<br>Jeffrey P. Foster Age: 52 Chief Legal Officer and Secretary<br>Mr. Foster has served as our Chief Legal Officer and Secretary since February 2009. From April 2003 to<br>February 2009, he served as Senior Vice President of Real Estate Transactions and Associate General Counsel of<br>Gramercy Property Trust. Prior to joining Gramercy Property Trust, Mr. Foster was an associate with Morgan,<br>Lewis & Bockius LLP from 1999 to 2003.<br>Average<br>NEO<br>Experience<br>14 Years<br>with<br>CubeSmart<br>20 Years<br>in<br>self storage<br>21 Years<br>at publicly<br>traded REITs<br>28 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Compensation Discussion & Analysis<br>This Compensation Discussion & Analysis describes our executive compensation programs, including the<br>oversight of such programs by our Compensation Committee and the rationale and processes used to determine<br>the compensation for the Company’s NEOs and provides a detailed description of those programs. This<br>Compensation Discussion & Analysis, which may include forward-looking statements, should be read together<br>with the compensation tables and related disclosures that follow this section.<br>Overview<br>The Compensation Committee sets corporate goals and objectives with respect to executive compensation,<br>evaluates performance against those goals and objectives, and determines the appropriate level and structure of<br>executive compensation based on its evaluation. In carrying out these duties during 2021, the Compensation<br>Committee considered analyses prepared by its independent compensation consultant FW Cook.<br>Philosophy and Objectives<br>We desire to build and maintain a superior executive management team to forge our business strategy and lead<br>us to profitable growth. We believe success in accomplishing these goals will, in part, depend on the<br>effectiveness of our executive compensation programs, which are designed to compensate and reward NEOs for<br>the achievement of corporate goals and desired business results and for their individual contributions in the<br>execution of our business strategy. We strive for excellence in corporate and individual performance by tying a<br>significant portion of overall executive compensation to the achievement of our corporate goals. The<br>Compensation Committee believes that the most effective executive compensation programs are designed to<br>reward the achievement of specific annual, long-term, and strategic goals that align executives’ interests with<br>those of the shareholders by rewarding performance above established goals, with the ultimate objective of<br>improving shareholder value.<br>Executive Compensation Goals<br>Attract and retain<br>the best possible executive talent<br>Link compensation to short<br>and long-term performance goals<br>Encourage superior performance<br>for all individual NEOs<br>29 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>2021 Executive Compensation Program<br>The Compensation Committee engaged FW Cook, an independent compensation consultant, to review our<br>existing compensation and benefits program, analyze competitive market compensation practices, and make<br>recommendations on our 2021 executive compensation program to achieve the objectives described above.<br>Representatives of FW Cook were present at several of the Compensation Committee’s meetings and met with<br>the Compensation Committee in executive session, where no members of management were present.<br>FW Cook provided the Compensation Committee with multiple market reference points, including compensation<br>data compiled from the proxy statements of a group of 17 REITs with a median equity market capitalization as of<br>May 11, 2021 of $6.04 billion.<br>As part of its process of designing our compensation programs, the Compensation Committee carefully<br>considered the appropriate market reference points for determining pay competitiveness and determined that<br>the comparative group for benchmarking purposes should represent the marketplace in which we are likely to<br>attract, retain, and compete for executive talent. The Compensation Committee faced challenges in determining<br>a comparative peer group, including the fact that market data specific to our self-storage peers is limited to four<br>other publicly-traded self-storage companies. The Compensation Committee reviewed and discussed the<br>compensation data compiled by FW Cook. The Compensation Committee considered this data, the desire to<br>retain a superior executive management team, and the tenure, caliber, and diverse backgrounds of our NEOs in<br>establishing executive compensation levels.<br>30 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>For our 2021 executive compensation program, the Compensation Committee, after considering the views of FW<br>Cook, used a peer group for compensation benchmarking to account for the Company’s growth and national<br>presence.<br>Listed below are the companies that comprised our 2021 peer group:<br>2021 Company Peers<br>American Campus Communities Highwoods Properties<br>AIR Communities Life Storage<br>Apple Hospitality REIT Mid-America Apartment Communities<br>Brandywine Realty Sun Communities<br>Brixmor Property Group Tanger Factory Outlet Centers<br>Choice Hotels International UDR<br>Corporate Office Properties Veris Residential<br>Extended Stay America WashREIT<br>Extra Space<br>The Compensation Committee uses data provided by FW Cook to assess industry practices overall and to provide<br>comparisons regarding individual positions. The Compensation Committee has generally focused on the median<br>of the peer group as an approximate target in setting overall compensation amounts for each NEO, though it also<br>applies its own judgment after consulting with FW Cook and considering the specific responsibilities, tenure, and<br>attributes of each of our NEOs. The decisions of the Compensation Committee are not mandated by any specific<br>correlation to the peer group, but also reflect the Compensation Committee’s views of competitive practice,<br>individual role and performance, our operating performance, and internal equity among our executive<br>management team.<br>In considering executive compensation decisions, the Compensation<br>Committee also reviews tally sheets prepared for each NEO. The tally sheets<br>present the dollar amounts of each component of compensation awarded to<br>the NEOs, including base salary, annual incentive, accumulated deferred<br>compensation balances, outstanding equity awards, defined contribution<br>retirement plan, potential payments under the CubeSmart Executive<br>Severance Plan (the “Severance Plan”), perquisites, and other benefits. The<br>overall purpose of the tally sheets is to bring together, in one place, all of the<br>elements of actual and potential future compensation in certain circumstances<br>so that the Compensation Committee may analyze both the individual<br>elements of compensation (including the compensation mix), as well as the<br>total amount of compensation.<br>The Compensation Committee also considered the 89% shareholder vote in support of the Company’s executive<br>compensation program, as reflected in the shareholders’ adoption of an advisory resolution approving<br>executive compensation contained in the 2021 proxy statement.<br>Considering all these factors, the Compensation Committee concluded that no changes were required to be<br>made to the overall structure of the Company’s 2021 executive compensation program.<br>31 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>After evaluating the foregoing factors and in consultation with FW Cook, the Compensation Committee<br>recommended the following compensation adjustments for our NEOs.<br>NEO Year Annual Salary Annual Incentive<br>Target<br>Long-Term<br>Incentive Target<br>Christopher P. Marr 2020 $ 775,000 140% $ 3,300,000<br> 2021 $ 800,000 150% $ 4,100,000<br>Timothy M. Martin 2020 $ 465,000 100% $ 830,000<br> 2021 $ 480,000 100% $ 1,040,000<br>Joel D. Keaton 2020 $ 400,000 90% $ 500,000<br> 2021 $ 425,000 90% $ 600,000<br>Jeffrey P. Foster 2020 $ 382,000 90% $ 475,000<br> 2021 $ 415,000 90% $ 490,000<br>Overview of Compensation Components<br>Our executive compensation program consists of three principal components: salary, annual incentive<br>compensation, and long-term incentive compensation. The design and objective of each component of our 2021<br>executive compensation is set forth below.<br>32 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Salary<br>Salary is the fixed component of pay and is intended to provide a base level of compensation for our NEOs. Factors<br>considered in determining base salaries include the NEO’s scope of responsibilities, a market competitive<br>assessment of similar roles at a peer group of real estate companies, and the performance of the individual NEO.<br>Any increases to the base salaries of our NEOs, other than our Chief Executive Officer, are set by the<br>Compensation Committee after discussions with, and recommendations by, our Chief Executive Officer regarding<br>each individual’s accomplishments, areas of strength, and opportunities for development. Any increase to the<br>base salary of our Chief Executive Officer is set after each Trustee completes a performance evaluation of the<br>Chief Executive Officer, the results of which are summarized and reviewed by the Chair of the Compensation<br>Committee with Compensation Committee members and with the Chief Executive Officer. In addition, the<br>Compensation Committee considers the linkage of base salaries to other elements of our compensation that are<br>tied to salaries such as severance, change in control benefits, and annual incentive targets.<br>After review and discussion, the Compensation Committee set the base salaries for 2021 of our NEOs as follows:<br>NEO 2021 Annual<br>Base Salary<br>Percentage Increase<br>over Prior Year<br>Christopher P. Marr $ 800,000 3.2%<br>Timothy M. Martin $ 480,000 3.2%<br>Joel D. Keaton $ 425,000 6.3%<br>Jeffrey P. Foster $ 415,000 8.6%<br><br><br><br>33 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Annual Incentive<br>Annual incentive compensation enables us to align the NEOs to common goals while recognizing individual<br>performance. In February 2021, the Compensation Committee approved a targeted cash annual incentive<br>opportunity for each NEO that correlated to specific performance objectives involving financial results, execution<br>of strategy and individual goals. The Compensation Committee also approved incentive payout percentages as<br>follows: threshold 50%; target 100%; and maximum 200%.<br>The following charts detail the performance objectives, weighting, and results of each component for the 2021<br>Annual Incentive Compensation:<br>34<br>(1) FFO and NOI are non-GAAP financial measures. See appendix to this proxy statement for a discussion of non-GAAP financial measures and reconciliations<br>to the most directly comparable GAAP financial measures. |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>35<br>In addition to the above goals, individual goals were weighted 10%. Individual goals were focused on technological<br>enhancements, operational efficiencies, communication improvements, people initiatives and workplace culture,<br>development and enhancement of revenue streams, expense management and other items. In 2021, certain<br>individual goals also addressed pandemic-specific challenges (including plans for returning to the office). The<br>Compensation Committee determined that each of our NEOs achieved the target level of their respective<br>individual goals, resulting in a 100% payout for this component of incentive compensation.<br>Pursuant to the objectives and results detailed above, the following table details each NEO’s annual incentive<br>opportunity and actual payout.<br>NEO 2021 Annual<br>Base Salary<br>Target Annual<br>Incentive<br>Opportunity as<br>% of Salary<br>Target Payout Actual Payout<br>Christopher P. Marr $ 800,000 150% $ 1,200,000 $ 2,191,200<br>Timothy M. Martin $ 480,000 100% $ 480,000 $ 876,480<br>Joel D. Keaton $ 425,000 90% $ 382,500 $ 698,445<br>Jeffrey P. Foster $ 415,000 90% $ 373,500 $ 682,011 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Long-Term Equity Incentive<br>We believe that long-term incentive compensation helps to emphasize retention, provide leverage opportunities,<br>and promote alignment with shareholder interests. The components of our long-term equity incentive<br>compensation are as follows (each representing 1/3 of the award):<br>Restricted Shares have a value equal to the closing<br>price of our common shares on the day of the grant.<br>The restricted shares vest ratably over three years<br>beginning on the first anniversary of the date of<br>grant. Dividends are paid on restricted shares prior<br>to vesting. Because we are a REIT, dividends are a<br>key component of our total shareholder return. The<br>compensation committee believes that allowing<br>dividends to be paid on outstanding restricted shares<br>further promotes the alignment of NEO goals with<br>shareholder interests.<br>Performance Units represent the right to earn<br>common shares. The measurement period for these<br>units is three years. The number of common shares,<br>if any, deliverable to award recipients depends on our<br>total shareholder return (measured by reference to<br>the change in our share price plus dividends) over the<br>measurement period compared to the total<br>shareholder return for a peer group (see above) over<br>the same measurement period.<br>At the end of the measurement period, the number of base units then represented by the performance units will<br>be converted into common shares, provided that our total shareholder return ranking among a peer group<br>consisting of all equity real estate investment trusts is at or above the 25th percentile. If our ranking is below the<br>25th percentile, then the conversion factor will be zero, no common shares will be awarded, and the performance<br>units will lapse. At any ranking at or above the 25th percentile and up to and including the 50th percentile, the<br>multiplier will be determined through a straight-line interpolation and the conversion factor would be between<br>50% and 100%. At any ranking above the 50th percentile and below the 75th percentile, the multiplier will be<br>determined through a straight-line interpolation and the conversion factor would be between 100% and 200%. At<br>any ranking at or above the 75th percentile, the multiplier is fixed at two. Thus, if our ranking places us at or above<br>the 75th percentile, the payment will be based on the product of the award recipient’s base units multiplied by<br>two.<br>Stock Options vest ratably over three years beginning on the first anniversary of the date of grant. The stock<br>options have a term of 10 years and an exercise price equal to the closing price of our common shares on the date<br>of the grant, which is typically January 1.<br>36 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>In January 2021, the Compensation Committee awarded a target grant level for long-term incentive compensation<br>for each NEO as follows:<br>NEO Grant Restricted Shares Performance Units<br>(at target) Stock Options<br>Christopher P. Marr $ 4,100,000 40,663 28,502 297,101<br>Timothy M. Martin $ 1,040,000 10,314 7,230 75,362<br>Joel D. Keaton $ 600,000 5,951 4,171 43,478<br>Jeffrey P. Foster $ 490,000 4,860 3,406 35,507<br>Final Results of 2019 Performance Units<br>We granted performance units in 2019 that are earned based on our relative total shareholder return on<br>substantially the same terms as described above for the 2021 performance units. The measurement period for<br>the performance units awarded to our NEOs on January 1, 2019 ended on December 31, 2021. Over this<br>measurement period, our total shareholder return was in the 78th percentile for the relevant peer group<br>described above (i.e., above the maximum goal). Therefore, the multiplier for these performance units was fixed<br>at two. The following table details the target award and actual achieved results for the 2019 performance units:<br>NEO Target Award of<br>Performance Units<br>Actual Achieved Award of<br>Performance Units (1)<br>Christopher P. Marr 26,781 53,562<br>Timothy M. Martin 7,142 14,284<br>Joel D. Keaton 4,106 8,212<br>Jeffrey P. Foster 4,106 8,212<br>(1) Each NEO also received shares representing the value of the dividends that would have been earned over<br>the measurement period for the awarded performance units as follows: Mr. Marr, 6,211 shares; Mr.<br>Martin, 1,655 shares; Messrs. Keaton and Foster, 953 shares.<br>2022 Compensation Actions<br>The Compensation Committee, taking into consideration the views of FW Cook, maintained the same peer group<br>used in 2021. FW Cook prepared compensation data from this peer group. After reviewing this data, the<br>Compensation Committee determined that competitive adjustments should be made to our NEO compensation.<br>These adjustments are designed to reflect the market for executive talent, the growth of the Company, and the<br>performance and responsibilities of each NEO.<br><br><br><br><br><br>37 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>The table below sets forth the base and target compensation levels for 2021 and 2022 for each component of the<br>Company’s NEO compensation program.<br>NEO Year Salary Annual Incentive<br>Target<br>Long-Term<br>Incentive Target<br>Christopher P. Marr 2021 $ 800,000 150% $ 4,100,000<br> 2022 $ 850,000 150% $ 4,100,000<br>Timothy M. Martin 2021 $ 480,000 100% $ 1,040,000<br> 2022 $ 500,000 100% $ 1,200,000<br>Joel D. Keaton 2021 $ 425,000 90% $ 600,000<br> 2022 $ 440,000 95% $ 720,000<br>Jeffrey P. Foster 2021 $ 415,000 90% $ 490,000<br> 2022 $ 440,000 90% $ 550,000<br><br>Other Compensation Elements<br>Deferred Compensation Benefits: The CubeSmart Executive Deferred Compensation Plan (the “Deferred<br>Compensation Plan”) permits employees with the title of Senior Divisional Vice President and Vice President or<br>above, including our NEOs, to defer receipt of all or a portion of their salary and annual incentive and have that<br>deferred compensation credited to accounts until distributed in accordance with qualified employee elections.<br>Under the Deferred Compensation Plan, we credit to each participant’s account a matching deferred<br>compensation amount that is equal to the difference between the total matching contribution we would have<br>made under our 401(k) plan without regard to the limits imposed by the Internal Revenue Code of 1986, as<br>amended (the “Code”) and the actual matching contribution that we make under the 401(k) plan. See page 46 for<br>details.<br>Perquisites and Personal Benefits: We do not provide any significant perquisites to our NEOs. During 2021 and<br>consistent with Company benefit plans applicable to all employees, we provided the use of a company car, life<br>insurance equal to the lesser of the NEO’s base salary or $500,000, and executive medical coverage to each of our<br>NEOs. In addition, the Company arranged for long-term disability insurance coverage, the premium for which is<br>paid by each of our NEOs and then reimbursed by the Company. While these benefits were not tied to any formal<br>performance criteria, they were intended to serve as part of a competitive total compensation program.<br>Additional Compensation Principles<br>Risk Guidelines: The structure of our compensation policies and practices is designed to direct our NEOs towards<br>key long-term goals in the areas of strategy, operations, financial performance, and individual development. By<br>focusing on the long-term achievement of corporate and personal goals, we discourage our NEOs from engaging<br>in unnecessary and excessive risk taking. We maintain strong internal financial controls and use effective<br>management processes for developing strategic and annual operating plans and employee development<br>programs. As a result of our compensation policies and practices, we have concluded that we are not encouraging<br>or creating risks that are reasonably likely to have a material adverse effect on the Company.<br>Policy on the Grant of Equity Awards: The Board adopted a Policy Statement on the Grant of Equity Awards (the<br> “Equity Grant Policy”) to ensure compliance with relevant rules and regulations and adherence to current<br>corporate governance practices. The Equity Grant Policy provides that the Board has sole authority to approve<br>equity awards to our Trustees and our NEOs. The Equity Grant Policy further provides that the grant date shall be<br>38 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>no earlier than the date of the meeting at which the award is approved by the Board or the Compensation<br>Committee, as the case may be. With respect to new hires, the date of the award shall be the later of the first date<br>of employment or the date that any required approval for the grant is obtained from the Board or Compensation<br>Committee. Under no circumstances will the grant date for any equity award be earlier than the date that the<br>award is approved. The exercise price of option awards shall be the closing price for our common shares on the<br>date of grant.<br>Share Ownership Guidelines: We maintain share ownership guidelines for all of our officers to ensure that each<br>Company officer maintains a material personal financial stake in the Company, aligning the interests of<br>management with the interests of our shareholders. We expect each Company officer to acquire, within five years<br>of his or her appointment, and thereafter to maintain ownership of, common shares having a market value equal<br>to: five times annual base salary for the President and Chief Executive Officer; three times annual base salary for<br>the Chief Financial Officer, Chief Operating Officer, and Chief Legal Officer; 1.75 times annual base salary for all<br>Senior Vice Presidents and other executive officers; and 0.75 times annual base salary for all other officers. All<br>shares directly owned and all vested restricted shares are considered for the share ownership guidelines.<br>Unvested restricted shares and performance units, as well as unexercised options, are not considered for the<br>guidelines. The Board annually reviews progress toward achieving these ownership levels for the NEOs. In<br>February 2021, the Board reviewed achievement levels and determined that each of our NEOs met or exceeded<br>the applicable ownership levels.<br>Compensation Recovery: We have not adopted a policy that provides for recovery of a cash compensatory award if<br>a performance measure used to calculate a cash award is subsequently adjusted in a manner that would have<br>reduced the size of the award. If we were to experience such an adjustment, our Compensation Committee would<br>assess the circumstances relating to the adjustment and take such action as it believes to be appropriate,<br>including, potentially, an action to recover the excess portion of the award. The Compensation Committee intends<br>to adopt a cash compensatory award recovery policy promptly following the adoption of regulations by the SEC<br>governing such recovery policies. The Compensation Committee has adopted the following policy to recover any<br>equity-based compensatory award:<br>If it is determined by our Board that [Recipient’s] gross negligence, intentional misconduct or fraud<br>caused or partially caused the Company to have to restate all or a portion of its financial statements, the<br>Board, in its sole discretion, may, to the extent permitted by law and to the extent it determines in its sole<br>judgment that it is in the best interests of the Company to do so, require repayment of any shares<br>delivered to [Recipient] pursuant to this agreement or to effect the cancellation of unvested shares.<br>Hedging and Pledging Limitations: Our NEOs and Trustees, as well as all employees with the title of Director or<br>above (inclusive of Divisional and Senior Divisional Vice Presidents) are prohibited from hedging their ownership<br>or offsetting any decline in the market value of our shares, including by trading in publicly-traded options, puts,<br>calls and other derivative instruments related to our shares. They are also prohibited from pledging Company<br>securities.<br><br><br><br><br><br><br><br>39 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Compensation Committee Report<br>The Compensation Committee reviewed and discussed with management the Compensation Discussion &<br>Analysis contained in this proxy statement. Based on this review and discussion, the Compensation<br>Committee recommended to the Board that the Compensation Discussion & Analysis be included in this<br>proxy statement for filing with the SEC.<br><br>Respectfully submitted,<br>The Compensation Committee of the Board of Trustees<br>John W. Fain (Chair)<br>Dorothy Dowling (Vice Chair)<br>Piero Bussani<br>John F. Remondi<br><br>Notwithstanding anything to the contrary set forth in any of our previous or future filings under the<br>Securities Act or the Exchange Act that might incorporate this proxy statement or future filings with the SEC,<br>in whole or in part, the above report shall not be deemed to be “soliciting material” or “filed” with the SEC<br>and shall not be deemed to be incorporated by reference into any such filing.<br>CEO Pay Ratio<br>As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the<br> “Dodd-Frank Act”), and Item 402(u) of Regulation S-K, we are providing the following information for the year<br>ended December 31, 2021:<br> • The median of the annual total compensation of all employees of our company (other than our CEO), was<br>$32,895; and the annual total compensation of Mr. Marr, our Chief Executive Officer was $7,586,805.<br> • Based on this information for 2021, the ratio of the annual total compensation of our Chief Executive Officer to<br>the median of the annual total compensation of all employees was 231 to 1.<br>We completed the following steps to identify the median of the annual total compensation of all our employees<br>and to determine the annual total compensation of our median employee and Chief Executive Officer:<br> • We determined our employee population as of December 31, 2021, which was 2,892, including all full-time,<br>part-time, temporary or seasonal employees employed on that date.<br> • To find the median of the annual total compensation of our employees (other than our Chief Executive Officer),<br>we used wages from our payroll records as reported to the Internal Revenue Service on Form W-2 for fiscal<br>2021. In making this determination, we annualized compensation for full-time and part-time permanent<br>employees who were employed on December 31, 2021 but did not work for us the entire year. No full-time<br>equivalent adjustments were made for part-time employees.<br> • We identified our median employee using this compensation measure and methodology, which was<br>consistently applied to all our employees included in the calculation.<br> • After identifying the median employee, we added together all of the elements of such employee’s<br>compensation for 2021 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in<br>annual total compensation of $32,895. With respect to the annual total compensation of our Chief Executive<br>Officer, we used the amount reported in the “Total” column of our 2021 Summary Compensation Table<br>appearing in this proxy statement, which is also in accordance with the requirements of Item 402(c)(2)(x).<br><br>40 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>41<br>Summary Compensation Table<br>The following table sets forth the summary compensation of the NEOs of the Company for the years ended<br>December 31, 2021, 2020, and 2019:<br>NEO Year Salary Share<br>Awards (1)<br>Option Awards<br>(1)<br>Non-Equity<br>Incentive Plan<br>Compensation<br>All Other<br>Compensation(2) Total<br>Christopher P. Marr 2021 $ 800,000 $ 2,733,354 $ 1,366,665 $ 2,191,200 $ 495,586 $ 7,586,805<br>President and Chief<br>Executive Officer<br><br>2020 $ 775,000 $ 2,200,008 $ 1,099,998 $ 1,524,497 $ 369,472 $ 5,968,975<br>2019 $ 750,000 $ 1,999,993 $ 999,998 $ 1,349,231 $ 258,377 $ 5,357,599<br>Timothy M. Martin 2021 $ 480,000 $ 693,332 $ 346,665 $ 876,480 $ 200,235 $ 2,596,712<br>Chief Financial Officer and<br>Treasurer<br><br>2020 $ 465,000 $ 553,325 $ 276,667 $ 653,356 $ 160,777 $ 2,109,125<br>2019 $ 455,000 $ 533,356 $ 266,668 $ 629,641 $ 122,267 $ 2,006,932<br>Joel D. Keaton (3) 2021 $ 425,000 $ 400,013 $ 199,999 $ 698,445 $ 91,349 $ 1,814,806<br>Chief Operating Officer<br><br>2020 $ 400,000 $ 333,306 $ 166,665 $ 505,824 $ 83,859 $ 1,489,654<br>2019 $ 350,000 $ 306,637 $ 153,333 $ 391,978 $ 62,033 $ 1,263,981<br>Jeffrey P. Foster 2021 $ 415,000 $ 326,662 $ 163,332 $ 682,011 $ 131,424 $ 1,718,429<br>Chief Legal Officer and<br>Secretary<br><br>2020 $ 382,000 $ 316,671 $ 158,332 $ 483,062 $ 106,737 $ 1,446,802<br>2019 $ 365,000 $ 306,637 $ 153,333 $ 429,332 $ 99,896 $ 1,354,198<br>(1) The amounts reported in the Share Awards and Option Awards columns represent the grant date fair value of<br>restricted shares, performance units and option awards granted to the NEOs under our equity incentive plans.<br>Such amounts were calculated in accordance with the provisions of FASB ASC Topic 718. Pursuant to SEC<br>rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting<br>conditions. Please refer to Note 16, “Share-Based Compensation Plans,” in the Notes to Consolidated<br>Financial Statements included in our most recent Annual Report on Form 10-K for the year ended<br>December 31, 2021 filed with the SEC on February 25, 2022 for the relevant assumptions used to determine<br>the grant date fair value of our share and option awards. The value of each of the awards granted to the NEOs<br>in 2021 is listed in the table captioned “Grants of Plan-Based Awards.”<br>(2) The amounts reported in the All Other Compensation column represent, for each NEO, the sum of (a) the<br>aggregate incremental cost to us of all perquisites and other personal benefits, including personal use of a<br>company car and executive medical insurance; (b) the amounts contributed by us to the CubeSmart, L.P.<br>401(k) Retirement Savings Plan; (c) the amounts contributed by us to the CubeSmart Executive Deferred<br>Compensation Plan; and (d) the dollar value of dividends on unvested restricted shares. The aggregate<br>incremental cost to us to provide a company car is based on the actual lease cost incurred for the automobile<br>provided to each of the NEOs plus expenses for fuel, maintenance, and insurance. In calculating the reported<br>amounts, we disregarded business usage and assumed 100 percent personal usage. The aggregate<br>incremental cost of executive medical insurance is based on the difference between the actual premiums we<br>paid for executive medical insurance for the NEOs and the actual average cost we incurred in providing family<br>medical coverage for our general employee population. Listed in the table below are the dollar values of the<br>amounts reported in this column for 2021.<br><br>` |
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NEO Company Car<br>Executive<br>Medical<br>Insurance<br>Company<br>Contributions<br>to Deferred<br>Compensation<br>Plan<br>Company<br>Match in<br>401(k) Plan<br>Dividends on<br>Unvested/<br>Deferred<br>Restricted<br>Shares/Units<br>Long-Term<br>Disability<br>Insurance<br>Christopher P. Marr $ 19,252 $ 29,385 $ 63,989 $ 7,800 $ 374,650 $ 510<br>Timothy M. Martin $ 17,280 $ 29,385 $ 30,900 $ 7,800 $ 114,360 $ 510<br>Joel D. Keaton $ 16,379 $ 29,385 $ 16,546 $ 7,800 $ 20,729 $ 510<br>Jeffrey P. Foster $ 12,096 $ 29,385 $ 18,071 $ 7,800 $ 63,562 $ 510<br>(3) Mr. Keaton was appointed our principal operating officer on November 5, 2019, at which point he became an<br>NEO.<br><br><br>NAMED EXECUTIVE OFFICER COMPENSATION<br>42 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Grants of Plan-Based Awards<br>The following table and narrative provide information about plan-based awards granted during 2021 to the NEOs.<br>These awards consist of annual cash incentives, restricted shares, performance units, and options.<br><br>Estimated Future Payouts Under<br>Non-Equity Incentive Plan Awards<br>($) (1)<br>Estimated Future Payouts Under<br>Non-Equity Incentive Plan<br>Awards (#) (1) All<br>Other<br>Share<br>Awards<br>(#)<br>All Other<br>Option<br>Awards:<br>Number of<br>Securities<br>Underlying<br>Options (#)<br>Exercise or<br>Base Price<br>of Option<br>Awards ($)<br>Grant Date<br>Fair Value<br>of Share<br>and Option<br>Awards ($)<br>(2) NEO/Award Grant<br>Date Threshold Target Max Threshold Target Max<br>Christopher P. Marr<br> Cash Incentive 600,000 1,200,000 2,400,000<br> Restricted Shares 1/1/2021 40,663 1,366,683<br> Performance Units 1/1/2021 14,251 28,502 57,004 1,366,671<br> Stock Options 1/1/2021 297,101 33.61 1,366,665<br><br>Timothy M. Martin<br> Cash Incentive 240,000 480,000 960,000<br> Restricted Shares 1/1/2021 10,314 346,653<br> Performance Units 1/1/2021 3,615 7,230 14,460 346,679<br> Stock Options 1/1/2021 75,362 33.61 346,665<br><br>Joel D. Keaton<br> Cash Incentive 191,250 382,500 765,000<br> Restricted Shares 1/1/2021 5,951 200,014<br> Performance Units 1/1/2021 2,086 4,171 8,342 199,999<br> Stock Options 1/1/2021 43,478 33.61 199,999<br><br>Jeffrey P. Foster<br> Cash Incentive 186,750 373,500 747,000<br> Restricted Shares 1/1/2021 4,860 163,344<br> Performance Units 1/1/2021 1,703 3,406 6,812 163,318<br> Stock Options 1/1/2021 35,507 33.61 163,332<br>(1) Listed in these columns are the potential awards at each stated level of performance for the annual incentive<br>compensation under our executive compensation program. For a detailed description of the annual incentive<br>awards see “Annual Incentive” in the section of this proxy statement entitled “Compensation Discussion &<br>Analysis.” The “Threshold” column represents the minimum amount payable when threshold performance is<br>met. The “Target” column represents the amount payable if the specified performance targets are reached.<br>The “Max” column represents the maximum payment possible. See the “Summary Compensation Table” for<br>the actual amounts paid to each NEO for the 2021 annual cash incentive compensation.<br>(2) This column reflects the grant date fair value of the equity awards in accordance with FASB ASC Topic 718 but<br>excludes forfeiture assumptions related to service-based vesting conditions in accordance with SEC rules.<br><br>43 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br>Outstanding Equity Awards<br>The following table sets forth outstanding equity awards held by NEOs at December 31, 2021.<br>NEO/Grant Date<br>Option Awards Share Awards<br>Number of<br>Securities<br>Underling<br>Options<br>Exercisable<br>(#)<br>Number of<br>Securities<br>Underlying<br>Options<br>Unexercisable<br>(#)<br>Option<br>Exercise<br>Price ($)<br>Option<br>Expiration<br>Date<br>Number of<br>Shares That<br>Have Not<br>Vested (#) (1)<br>Market value<br>of Shares That<br>Have Not<br>Vested ($) (2)<br>Equity<br>Incentive Plan<br>Awards:<br>Number of<br>Unearned<br>Shares That<br>Have Not<br>Vested (#) (3)<br>Equity<br>Incentive Plan<br>Awards:<br>Market or<br>Payout Value<br>of Unearned<br>Shares That<br>Have Not<br>Vested ($) (2)<br>Christopher P. Marr<br>1/1/2021 — 297,101 33.61 12/31/2030 40,663 2,314,131 57,004 3,244,098<br>1/1/2020 100,182 200,364 31.48 12/31/2029 23,295 1,325,718 54,442 3,098,294<br>1/1/2019 104,987 52,493 28.69 12/31/2028 11,618 661,180 53,562 3,048,214<br>1/23/2018 107,181 — 27.78 1/22/2028<br>1/23/2017 108,932 — 26.30 1/22/2027<br>1/22/2016 87,604 — 30.32 1/21/2026<br>1/23/2015 74,906 — 25.00 1/22/2025<br>1/24/2014 58,005 — 15.67 1/23/2024<br><br>Timothy M. Martin<br>1/1/2021 — 75,362 33.61 12/31/2030 10,314 586,970 14,460 822,918<br>1/1/2020 25,197 50,395 31.48 12/31/2029 5,859 333,436 13,692 779,212<br>1/1/2019 27,997 13,998 28.69 12/31/2028 3,098 176,307 14,284 812,902<br>1/23/2018 36,174 — 27.78 1/22/2028<br>1/23/2017 36,765 — 26.30 1/22/2027<br>1/22/2016 29,566 — 30.32 1/21/2026<br>1/23/2015 30,765 — 25.00 1/22/2025<br>1/24/2014 42,537 — 15.67 1/23/2024<br><br><br><br>44 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br><br>NEO/Grant Date<br>Option Awards Share Awards<br>Number of<br>Securities<br>Underling<br>Options<br>Exercisable<br>(#)<br>Number of<br>Securities<br>Underlying<br>Options<br>Unexercisable<br>(#)<br>Option<br>Exercise<br>Price ($)<br>Option<br>Expiration<br>Date<br>Number of<br>Shares That<br>Have Not<br>Vested (#) (1)<br>Market value<br>of Shares That<br>Have Not<br>Vested ($) (2)<br>Equity<br>Incentive Plan<br>Awards:<br>Number of<br>Unearned<br>Shares That<br>Have Not<br>Vested (#) (3)<br>Equity<br>Incentive Plan<br>Awards:<br>Market or<br>Payout Value<br>of Unearned<br>Shares That<br>Have Not<br>Vested ($) (2)<br>Joel D. Keaton<br>1/1/2021 — 43,478 33.61 12/31/2030 5,951 338,671 8,342 474,744<br>1/1/2020 15,179 30,358 31.48 12/31/2029 3,529 200,835 8,248 469,394<br>1/1/2019 16,098 8,049 28.69 12/31/2028 1,780 101,300 8,212 467,344<br>1/23/2018 23,312 — 27.78 1/22/2028<br>1/23/2017 20,969 — 26.30 1/22/2027<br>1/22/2016 13,141 — 30.32 1/21/2026<br>1/23/2015 8,026 — 25.00 1/22/2025<br><br>Jeffrey P. Foster<br>1/1/2021 — 35,507 33.61 12/31/2030 4,860 276,583 6,812 387,670<br>1/1/2020 14,420 28,840 31.48 12/31/2029 3,353 190,819 7,836 445,946<br>1/1/2019 16,098 8,049 28.69 12/31/2028 1,781 101,357 8,212 467,344<br>1/23/2018 22,776 — 27.78 1/22/2028<br>1/23/2017 23,148 — 26.30 1/22/2027<br>1/22/2016 18,616 — 30.32 1/21/2026<br>1/23/2015 22,739 — 25.00 1/22/2025<br>(1) Unvested time-based restricted shares.<br>(2) The market value is based on the closing price of our common shares of $56.91 on December 31, 2021.<br>(3) Unvested performance units at maximum payout, which corresponds to the level of achievement through<br>December 31, 2021.<br>Shares Vested and Options Exercised<br>The following table sets forth the value realized upon vesting of share awards and option exercises for each NEO<br>for the year ended December 31, 2021.<br>NEO<br>Share Awards Option Awards<br>Number of Shares<br>Acquired on Vesting<br>Value Realized on<br>Vesting<br>Number of Shares<br>Acquired on Exercise<br>Value Realized on<br>Exercise<br>Christopher P. Marr 73,089 $ 2,467,400 97,392 $ 3,095,780<br>Timothy M. Martin 22,840 $ 771,323 67,114 $ 2,115,034<br>Joel D. Keaton 14,383 $ 485,779 15,132 $ 395,146<br>Jeffrey P. Foster 14,045 $ 474,364 56,233 $ 1,492,036<br><br><br>45 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br> Nonqualified Deferred Compensation<br>Our NEOs are eligible to participate in the Deferred Compensation Plan. Under the plan, the NEOs can defer all or<br>a portion of salary and/or bonus (including annual incentives) and have such amounts credited to a retirement<br>distribution account and/or separate in-service distribution accounts. We will provide a matching deferred<br>compensation amount that is equal to the difference between the total matching contribution the NEO would have<br>received under our 401(k) plan without regard to the limitations imposed pursuant to Sections 402(g), 415 and 417<br>of the Code and the actual matching contribution the NEO receives under the 401(k) plan, provided the NEO has<br>made the maximum elective deferrals to the 401(k) plan. The Compensation Committee may, in its discretion,<br>approve an additional credit to a participant’s account as non-elective deferred compensation.<br>Each distribution account is credited with the returns of the investment options selected by the NEOs, which<br>include investment options that are available in our 401(k) plan, or such other investment funds as the<br>Compensation Committee may designate from time to time.<br>Elections to defer compensation must be made no later than the close of the preceding taxable year and are<br>irrevocable as of the first day of the plan year to which it relates, except that (i) in the case of a hardship<br>distribution, the election may be cancelled for the remainder of the plan year, and (ii) a participant who has<br>elected a lump sum distribution from the retirement distribution account may make a subsequent election to<br>delay commencement of payment of such amount for a period of five years from the date such payment would<br>otherwise have been made. In the case of any performance-based compensation for services performed over a<br>period of 12 months, an election to defer must be made no later than six months before the end of the<br>performance period.<br>Upon retirement, balances in the retirement distribution account will be made in a lump sum or in annual<br>installments over 5, 10, or 15 years. Upon termination of employment other than retirement or death, benefits in<br>the retirement distribution account will be distributed in a lump sum 60 days following separation from service.<br>Distributions from the in-service account will be made in one lump sum or in annual installments over two, three,<br>four, or five years, except that participants may not elect distribution of compensation earned in a plan year that is<br>less than two years prior to the plan year elected for distribution. In the event of death prior to commencement of<br>distribution from either the retirement distribution account or the in-service distribution account, benefits under<br>the plan shall be payable to a participant’s beneficiary either in a lump sum or in the manner elected by the<br>participant at the time the deferral election was made.<br><br><br>46 |
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NAMED EXECUTIVE OFFICER COMPENSATION<br> The following table details the activity related to the Deferred Compensation Plan for the year ended December<br>31, 2021:<br>NEO<br>Executive<br>Contributions<br>(Salary) (1)<br>Executive<br>Contributions<br>(Bonus) (2)<br>Company<br>Contributions<br>(3)<br>Aggregate<br>Earnings<br>Aggregate<br>Withdrawals/<br>Distributions<br>Aggregate<br>Balance at<br>December 31,<br>2021<br> Christopher P. Marr - $ 304,899 $ 63,989 $ 1,411,529 — $ 8,037,006<br> Timothy M. Martin $ 178,308 $ 196,007 $ 30,900 $ 1,292,221 — $ 5,357,948<br> Joel D. Keaton $ 129,670 $ 151,747 $ 16,546 $ 61,405 — $ 783,254<br> Jeffrey P. Foster $ 31,926 $ 38,645 $ 18,071 $ 298,097 ($ 123,301) $ 1,762,900<br>(1) Included in the “Salary” column for 2021 of the table captioned “Summary Compensation Table” on page 41.<br>(2) Included in the “Non-Equity Incentive Plan Compensation” column for 2021 of the table captioned “Summary<br>Compensation Table” on page 41.<br>(3) Included in the “All Other Compensation” column for 2021 of the table captioned “Summary Compensation<br>Table” on page 41.<br>Severance Plan and Potential Payments Upon Termination or Change in Control<br>The Severance Plan provides for certain severance benefits to our NEOs on account of an involuntary termination,<br>including if we terminate the employee without “cause” (as defined in the Severance Plan) or on account of the<br>employee’s disability, a termination by the employee for “good reason” (as defined in the Severance Plan), or a<br>termination on account of the employee’s death.<br>If we terminate the employee without cause, or the employee terminates for good reason, prior to the date that is<br>three months prior to a “change of control” (as defined in our Amended and Restated 2007 Equity Incentive Plan)<br>or later than the date that is two years following a change of control, the terminated employee is entitled to:<br> • Accrued but unpaid compensation and benefits through the termination date including (i) accrued but unpaid<br>base salary, (ii) any earned but unpaid annual incentive compensation for the preceding year, (iii) accrued but<br>unused paid time off and (iv) reimbursement of business expenses incurred in accordance with our policy;<br> • For Mr. Marr, installment payments in accordance with our normal payroll practices over two years equal to<br>two times the sum of (i) base salary and (ii) average annual incentive earned over a period of up to two years<br>preceding the termination of employment, and, for all other participants, installment payments in accordance<br>with our normal payroll practices over 18 months equal to 1.5 times the sum of (i) base salary and (ii) average<br>annual incentive earned by the employee over a period up to two years preceding the termination of<br>employment;<br> • Subject to eligibility for, and the employee’s timely election of, continued coverage under our group health<br>plan pursuant to COBRA, reimbursement for premiums paid by the employee (less the portion the employee<br>would have paid for the same coverage had the employee remained an active employee) for up to 18 months,<br>provided that such reimbursements will cease to the extent the employee becomes eligible for benefits under<br>the group health plan of a subsequent employer or eligible for Medicare during the 18-month period;<br> • A lump sum pro-rata annual incentive compensation for the year of termination based on actual performance<br>and the number of days that the employee was employed during that year; and<br> • Continued vesting of time-based equity awards in accordance with the terms of the applicable awards and<br>pro-rata vesting of performance-based awards based on actual performance and the number of days that the<br>employee was employed during the performance period.<br>47 |
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If we terminate the employee without cause, or the employee terminates for good reason, during the period<br>commencing on the date that is three months prior to a change of control and ending on the date that is two years<br>following a change of control, the terminated employee is entitled to receive the payments and benefits described<br>above, except that (i) Mr. Marr is entitled to three times the sum of (x) base salary and (y) average annual incentive<br>compensation earned over a period of up to two years preceding termination of employment, which amount will<br>be paid in a lump sum (rather than installments), (ii) Mr. Martin and all other eligible employees designated as<br>Tier II employees are entitled to two and a half times the sum of the employee’s (x) base salary and (y) average<br>annual incentive compensation earned by the employee over a period of up to two years preceding termination of<br>employment, which will be paid in a lump sum (rather than installments), (iii) Mr. Foster and Mr. Keaton and all<br>other eligible employees designated as Tier III employees are entitled to two times the sum of the employee’s (x)<br>base salary and (y) average annual incentive compensation earned by the employee over a period of up to two<br>years preceding termination of employment, which will be paid in a lump sum (rather than installments), (iv) the<br>healthcare reimbursements described above will continue for up to two years (rather than 18 months), (v) the<br>employee is entitled to an automobile allowance or use of an automobile for 18 months, and (vi) if we are not the<br>surviving company in the change in control, the employee’s outstanding time-based equity awards that are<br>assumed or replaced by the surviving corporation will fully accelerate as of the later of the change in control or<br>the date of termination and the employee’s outstanding performance-based equity awards that are assumed or<br>replaced by the surviving corporation will vest as of the later of the change in control or the date of termination<br>based on target performance.<br>If the employee’s involuntary termination is on account of death or disability, the employee will be entitled to (i) a<br>lump sum pro-rata annual incentive compensation for the year of termination based on actual performance and<br>the number of days that the employee was employed during that year and (ii) full acceleration and vesting of the<br>employee’s time-based and performance-based awards (based on target performance).<br>In general, our obligation to provide benefits under the Severance Plan in the event of an involuntary termination<br>by the Company without cause or by the employee for good reason is conditioned upon the employee providing a<br>release of claims and complying with applicable non-competition and other post-employment restrictive<br>covenants.<br>If the payments and benefits otherwise payable to an employee under the Severance Plan would constitute excess<br>parachute payments within the meaning of section 280G of the Code, then we will reduce such payments and<br>benefits to an amount that would avoid any excise taxes under section 4999 of the Code, provided that such<br>reduction would provide the employee with a greater net after-tax benefit than would no reduction. In no event<br>shall any payment under the Severance Plan be grossed up for any excise taxes under Section 4999 of the Code.<br>The following table includes an estimate of the potential payments and benefits to which Messrs. Marr, Martin,<br>Keaton and Foster would be entitled under the Severance Plan upon termination of employment in each of the<br>circumstances described above. Except as otherwise set forth above, these payments would be made in a lump<br>sum following termination. In estimating the potential payments, we have made the following general<br>assumptions in all circumstances where applicable:<br> • The date of termination is December 31, 2021 and the closing price of our common shares on that date is<br>$56.91;<br> • The annual salary at the time of termination is equal to the base salaries that were in effect as of<br>December 31, 2021 for each executive as follows: Mr. Marr, $800,000; Mr. Martin, $480,000; Mr. Keaton,<br>$425,000; and Mr. Foster, $415,000;<br> • The bonus is equal to the average of the last two years’ annual incentive compensation paid to each executive<br>as follows: Mr. Marr, $1,436,864; Mr. Martin, $641,499; Mr. Keaton, $448,901; and Mr. Foster, $456,197;<br> • The value of restricted shares and performance units that vest upon termination is based on the closing price<br>NAMED EXECUTIVE OFFICER COMPENSATION<br><br>48 |
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of our common shares at $56.91 on December 31, 2021;<br> • The stock options that vest upon termination are valued at the difference between the strike price of the stock<br>option and the market value of our common shares on December 31, 2021, $56.91;<br> • For purposes of determining the pro-rata annual incentive compensation for the year of termination, it shall<br>equal the target-level annual incentive compensation paid to each executive;<br> • Four weeks of vacation are unused, accrued and unpaid;<br> • There is no unpaid bonus for the prior year;<br> • There is no accrued and unpaid salary;<br> • There is no unpaid reimbursement for expenses incurred prior to the date of termination;<br> • Our cost for continued medical, prescription, and dental benefits is constant over the benefit period and is<br>provided for 18 months at a cost of $3,841 per month for each executive; and<br> • Our cost for the continued use of an automobile for 18 months is constant over the benefit period and is<br>provided at a cost of $1,500 per month.<br>NEO<br>Termination between 3<br>months prior to, and 2<br>years after, a Change<br>in Control (1)<br>Termination before 3<br>months prior to, or<br>more than 2 years<br>after, a Change in<br>Control<br>Death or Disability For Cause; Without<br>Good Reason<br> Christopher P. Marr $ 19,537,155 $ 15,675,543 $ 12,730,424 $ 61,538<br> Timothy M. Martin $ 6,512,540 $ 4,959,867 $ 3,612,656 $ 36,923<br> Joel D. Keaton $ 4,138,809 $ 3,434,322 $ 2,294,868 $ 32,692<br> Jeffrey P. Foster $ 3,998,849 $ 3,332,702 $ 2,160,317 $ 31,923<br>(1) Represents the amount payable upon the termination of employment on December 31, 2021, if such<br>termination were due to a change in control as set forth in the Severance Plan.<br><br><br><br><br><br>NAMED EXECUTIVE OFFICER COMPENSATION<br>49 |
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OWNERSHIP OF COMPANY SHARES<br>The following table lists the number of common shares beneficially owned and the percentage of ownership by<br>each of our Trustees, each of our NEOs, our Trustees and NEOs as a group, and each person or group known to<br>us to be holding more than 5% of our common shares. The number of shares and percentage of ownership is<br>based on 225,133,387 common shares outstanding on March 15, 2022. In general, “beneficial ownership” includes<br>those common shares that a shareholder has the power to vote or transfer, and options that are exercisable<br>currently or that become exercisable within 60 days. Except as otherwise noted, the persons named in the table<br>below have sole voting and investment power with respect to all the common shares listed opposite his or her<br>name. The address of each Trustee and NEO listed below is c/o CubeSmart, 5 Old Lancaster Road, Malvern,<br>Pennsylvania 19355.<br>Beneficial Owner Common Shares (1)<br>Options Currently<br>Exercisable or<br>Exercisable within<br>60 Days<br>Percent of Class (2)<br>Trustees<br>Piero Bussani 54,611 *<br>Dorothy Dowling 19,055 *<br>John W. Fain 30,218 *<br>Marianne M. Keler 49,854 *<br>John F. Remondi 63,614 *<br>Jeffrey F. Rogatz 43,649 *<br>Deborah R. Salzberg 26,892 *<br>NEOs<br>Christopher P. Marr 640,102 893,506 *<br>Timothy M. Martin 256,005 293,318 *<br>Jeffrey P. Foster 154,997 152,102 *<br>Joel D. Keaton 59,127 134,446 *<br>Trustees and NEOs as a group (11 persons) 1,398,124 1,473,372 1.28%<br><br>The Vanguard Group, Inc. (3) 30,663,122 13.62%<br>BlackRock, Inc. (4) 20,598,563 9.15%<br>FMR LLC (5) 20,538,127 9.12%<br>PGGM Vermogensbeheer B.V. (6) 10,071,337 4.47%<br>* Less than one percent (1%)<br>(1) Does not include phantom shares held by Mr. Marr (4,899) and Mr. Martin (18,876) in deferred compensation<br>plans of the Company, which are payable in cash after the NEO ceases service with the Company.<br>(2) Shares issuable pursuant to the CubeSmart Deferred Trustees Plan and shares issuable pursuant to the<br>exercise of stock options that are either immediately exercisable or exercisable within 60 days of March 15,<br>2022 are deemed to be outstanding and beneficially owned by the person to whom such shares are issuable<br>for the purpose of computing the percentage ownership of that person, but they are not treated as<br>outstanding for the purpose of computing the percentage ownership of any other person.<br>50 |
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OWNERSHIP OF COMPANY SHARES<br>(3) Based on information provided by The Vanguard Group- 23-1945930 (“Vanguard”) in a Schedule 13G/A filed<br>with the SEC on February 9, 2022. Vanguard has shared voting power with respect to 313,826 of these shares,<br>sole dispositive power with respect to 30,165,510 of these shares and shared dispositive power with respect to<br>497,612 of these shares. The address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355.<br>(4) Based on information provided by BlackRock, Inc. (“BlackRock”) in a Schedule 13G/A filed with the SEC on<br>February 1, 2022. BlackRock has sole voting power with respect to 17,648,886 of these shares, and sole<br>dispositive power with respect to all of these shares. The address of BlackRock is 55 East 52nd Street, New<br>York, NY 10055.<br>(5) Based on information provided by FMR LLC (“FMR”) in a Schedule 13G filed with the SEC on February 9, 2022.<br>FMR has sole voting power with respect to 6,557,864 of these shares, and sole dispositive power with respect<br>to all of these shares. The address of FMR is 245 Summer Street, Boston, Massachusetts 02210.<br>(6) Based on information provided by PGGM Vermogensbeheer B.V., acting in its capacity as legal representative<br>of Stichting PGGM Depositary and Bedrijfstakpensioenfonds voor het Schilders-, Afwerkings- en<br>Glaszetbedrijf (“PGGM”) in a Schedule 13G filed with the SEC on October 12, 2021. PGGM has sole voting<br>power with respect to all of these shares. The address of PGGM is Noordweg Noord 150, 3704 JG Zeist, The<br>Netherlands.<br><br><br><br>51 |
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PROPOSAL 2 – RATIFICATION OF INDEPENDENT REGISTERED ACCOUNTING FIRM<br>The Audit Committee of the Board appointed KPMG LLP to serve as our independent registered public accounting<br>firm for the year ending December 31, 2022.<br>The Board asks shareholders to ratify the appointment of KPMG LLP as our independent registered public<br>accounting firm. Although ratification is not required by the Bylaws or otherwise, the Board believes ratification by<br>shareholders is a matter of good corporate governance. If the appointment is not ratified, the Audit Committee<br>will consider whether it is appropriate to select another independent registered public accounting firm. Even if the<br>selection is ratified, the Audit Committee in its discretion may select a different independent registered public<br>accounting firm at any time during the year if it determines that such a change would be in our best interests and<br>in the best interests of our shareholders. We expect a representative of KPMG LLP to be present at the annual<br>meeting. The representative will have the opportunity to make a statement and will be available to respond to<br>appropriate questions.<br>Vote Required and Recommendation of the Board<br>Ratification of the appointment of KPMG LLP requires the affirmative vote of a majority of the votes cast on the<br>proposal (which means the votes cast “for” the proposal must exceed the votes cast “against” the proposal).<br>Abstentions on this proposal are not counted as votes cast and will therefore have no effect on the outcome of the<br>vote on this proposal, and uninstructed shares on this proposal held by a bank or broker may be voted in the<br>discretion of the bank or broker and treated as votes cast.<br>The Board unanimously recommends that shareholders vote in favor of the ratification of the Audit<br>Committee’s appointment of KPMG LLP as our independent registered public accounting firm for the year<br>ended December 31, 2022.<br><br><br>52 |
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PROPOSAL 3 – ADVISORY VOTE ON EXECUTIVE COMPENSATION<br>The Dodd-Frank Act enables our shareholders to vote to approve, on an advisory (non-binding) basis, the<br>compensation of our NEOs as disclosed in this proxy statement in accordance with the SEC’s rules, as well as to<br>vote to recommend, also on an advisory basis, the frequency of such votes on executive compensation. Our<br>shareholders voted at the 2017 annual meeting of shareholders to adopt resolutions recommending that such<br>votes on executive compensation be held on an annual basis. Our Board adopted the recommendation of our<br>shareholders to hold annual advisory votes to approve our executive compensation. Accordingly, we are providing<br>this vote as recommended by our shareholders and approved by our Board.<br>As described in detail under the heading “Compensation Discussion & Analysis” our executive compensation<br>programs are designed to attract, retain, and motivate our NEOs, who are critical to our success. The<br>Compensation Committee continually reviews the compensation programs for our NEOs to ensure they achieve<br>the Board’s commitment to provide executive compensation programs that conform with generally accepted best<br>pay practices and align our executive compensation structure with our shareholders’ interests. Under these<br>programs, our NEOs are rewarded for the achievement of specific strategic and corporate goals and the<br>realization of increased shareholder value. Please read the “Compensation Discussion & Analysis” for additional<br>details about our executive compensation programs, including information about the fiscal year 2021<br>compensation of our NEOs.<br>We are asking our shareholders to indicate their support for our NEO compensation as described in this proxy<br>statement. This proposal, commonly known as a “say-on-pay” proposal, gives our shareholders the opportunity to<br>express their views on our NEO compensation. This vote is not intended to address any specific item of<br>compensation. Instead, it addresses the overall compensation of our NEOs and the philosophy, policies, and<br>practices described in this proxy statement. Accordingly, we will ask our shareholders to vote “FOR” the following<br>resolution at the annual meeting:<br> “RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s<br>NEOs as disclosed in the Company’s proxy statement for the 2022 annual meeting of shareholders pursuant to the<br>compensation disclosure rules of the SEC, including the Compensation Discussion & Analysis, the 2021 Summary<br>Compensation Table and the other related tables and disclosures.”<br>Approval, by an advisory (non-binding) vote, of our executive compensation requires the affirmative vote of a<br>majority of all votes cast on this proposal. Abstentions and broker non-votes, which are not treated as votes cast,<br>will therefore have no effect on the outcome of the vote on this proposal. Because the say-on-pay vote is advisory,<br>however, it is not binding on the Company, the Compensation Committee or our Board. Our Board and our<br>Compensation Committee value the opinions of our shareholders and to the extent there is any significant vote<br>against the NEO compensation as disclosed in this proxy statement, we will consider our shareholders’ concerns<br>and the Compensation Committee will evaluate whether any actions are necessary to address those concerns.<br>The Board unanimously recommends that shareholders vote in favor of the approval of our executive<br>compensation, as disclosed in this proxy statement pursuant to the compensation disclosure rules of the SEC.<br><br><br><br>53 |
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POLICIES REGARDING TRANSACTIONS WITH RELATED PERSONS<br>Under our Declaration of Trust, we may enter into any contract or transaction with a Trustee, officer, employee or<br>agent, or any person affiliated with any of them, in which such person has a material financial interest, provided<br>that (i) the Board is made aware of the interest and a majority of the disinterested Trustees approve or ratify the<br>contract or transaction; (ii) our shareholders are made aware of the interest and holders of a majority of our<br>outstanding shares entitled to vote (excluding shares owned by the interested party) approve or ratify the contract<br>or transaction; or (iii) the contract or transaction is fair and reasonable to us. During 2021 and as of the date of<br>this proxy statement, the Company has not entered into any transactions with a related person.<br>As set forth in our Corporate Governance Guidelines, the Board adopted a policy providing that transactions with a<br>Trustee who has a personal or financial interest (direct or indirect) should be scrutinized to ensure that the<br>transaction is in our best interests and will not otherwise create a conflict of interest. Without the approval of a<br>majority of the disinterested Trustees, we will not enter into a transaction or arrangement (including utilizing the<br>services of any Trustee to provide legal, accounting, financial, consulting or other similar services) in which a<br>Trustee has a material personal or financial interest (direct or indirect). Whether an interest is a material<br>personal or financial interest in a transaction or arrangement will be determined by the Board on a case-by-case<br>basis, but at a minimum a Trustee will be considered to have a material personal or financial interest in a<br>transaction or arrangement if we would be required to disclose such transaction or arrangement in our proxy<br>statement or in our Annual Report on Form 10-K. The interested Trustee will not participate in any Board<br>discussion regarding the matter in which he or she has such an interest. For purposes of this policy, the<br>disinterested Trustees will consider the interests of any entity with which a Trustee is affiliated, any immediate<br>family member of a Trustee, and any entity in which a Trustee’s immediate family member has a material<br>interest.<br>Pursuant to its charter, our Corporate Governance & Nominating Committee is responsible for reviewing<br>transactions and arrangements with our Trustees and making a recommendation to the Board concerning such<br>transactions and arrangements. The Corporate Governance & Nominating Committee maintains written<br>procedures regarding general related party transactions and office lease agreements between the Company and<br>related parties. Below is a description of the material features of these procedures, including types of<br>transactions that are covered by them and the standards applied in evaluating transactions and arrangements<br>with Trustees and NEOs.<br>General Related Party Transaction Procedures<br>The General Related Party Transaction Procedures govern the review of transactions and arrangements in which<br>Trustees or NEOs may have a direct or indirect interest that, while not technically required to be approved by the<br>disinterested Trustees under our Declaration of Trust or our Corporate Governance Guidelines, may nonetheless<br>be advisable to be reviewed and approved by the Corporate Governance & Nominating Committee to ensure that<br>related party transactions are properly reviewed and, if necessary, approved first by the Corporate Governance &<br>Nominating Committee, and, if appropriate, by a majority of disinterested Trustees. The procedures outline:<br>(i) requirements and procedures for Trustees and NEOs to report any potential related party transaction to our<br>compliance officer (currently, our Chief Legal Officer); (ii) the procedures our compliance officer follows in<br>collecting and submitting to the Chair of the Corporate Governance & Nominating Committee information<br>regarding potential related party transactions; (iii) the Corporate Governance & Nominating Committee’s process<br>for reviewing and evaluating potential related party transactions; and (iv) the process used by the disinterested<br>Trustees in reviewing and evaluating a potential related party transaction once approved by the Corporate<br>Governance & Nominating Committee. The Corporate Governance & Nominating Committee may consult with<br>legal counsel as it considers all of the information compiled by our compliance officer and evaluates material<br>issues raised and factors relating to the transaction. The Corporate Governance & Nominating Committee<br>determines whether it is appropriate and advisable for us to engage in the transaction based on whether the<br>transaction is fair, reasonable, and in our best interests, and, if so, whether the proposed transaction requires<br>approval by the disinterested members of the Board.<br><br>54 |
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INFORMATION ABOUT VOTING AND PROXY MATERIALS<br>Questions and Answers About Voting<br>Who is entitled to vote at the annual meeting?<br>Only holders of record of our common shares at the close of business on March 15, 2022, the record date for the<br>annual meeting, are entitled to notice of and to vote at the meeting or any adjournment or postponement of the<br>meeting. Our common shares are the only class of securities entitled to vote at the meeting. As of the record date,<br>there were 225,133,387 common shares outstanding.<br>Who can attend the annual meeting?<br>All holders of our common shares at the close of business on March 15, 2022, the record date for the annual<br>meeting, or their duly appointed proxies, are authorized to attend the annual meeting. If you attend the meeting,<br>you may be asked to present valid picture identification, such as a driver’s license or passport, before being<br>admitted. Cameras, recording devices, and other electronic devices will not be permitted at the meeting. If you<br>hold your shares in “street name” (that is, through a broker or other nominee), you will need to bring a copy of the<br>brokerage statement reflecting your share ownership as of March 15, 2022, or a legal proxy from your broker.<br>What will constitute a quorum at the annual meeting?<br>A quorum is required to hold a valid meeting of our shareholders. The presence at the meeting, in person or by<br>proxy, of the holders of a majority of the common shares outstanding at the close of business on March 15, 2022<br>will constitute a quorum, permitting the shareholders to conduct business at the meeting. The shares of a<br>shareholder whose ballot on any or all proposals is marked as “abstain” will be included in the number of shares<br>present at the meeting for the purpose of determining the presence of a quorum. If a broker indicates on the<br>proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, those shares<br>will be considered as present for purposes of determining a quorum but will not be voted with respect to that<br>matter.<br>How do I vote my shares that are held by my bank or broker?<br>If your shares are held by a bank or broker, you should follow the voting instructions provided to you by the bank<br>or broker. Although most banks and brokers offer voting by mail, telephone, and on the Internet, availability and<br>specific procedures will depend on their voting arrangements. If you do not provide voting instructions to your<br>bank or broker, your shares are referred to as “uninstructed shares.” Whether your bank or broker has the<br>discretion to vote these shares on your behalf depends on the ballot item. Under the rules of the NYSE, your bank<br>or broker does not have discretion to vote uninstructed shares on non-routine matters, such as Proposals 1 and<br>3. However, your bank or broker has discretion to vote your shares on routine matters, such as Proposal 2.<br>What is a broker non-vote?<br>A “broker non-vote” occurs when a broker or other nominee holding shares for a beneficial owner<br>returns a properly executed proxy but does not cast a vote on a particular proposal because the broker or<br>nominee does not have discretionary voting power with respect to that item and has not received instructions<br>from the beneficial owner. Brokers that are member firms of the NYSE, and who hold common shares in street<br>name for customers generally may vote their customers’ shares on proposals considered to be “routine” matters<br>under the NYSE rules and may not vote their customers’ shares on proposals that are not considered to be<br> “routine” matters under the NYSE rules if the customers have not furnished voting instructions within a specified<br>period of time prior to the annual meeting. Proposal One, the election of trustees, is not considered to be a<br> “routine” matter under the NYSE rules. Proposal Two, ratification of the appointment of our independent<br>registered public accounting firm, is considered a “routine” matter under the NYSE rules. Proposal Three, an<br>advisory non-binding resolution on our executive compensation, is not considered to be a “routine” matter under<br>the NYSE rules.<br>What vote is required to approve each proposal?<br>Voting Rights Generally. Each common share outstanding on the record date entitles its holder to cast one vote on<br>each matter to be voted upon at the annual meeting. Shareholders have no cumulative voting rights. Although the<br>55 |
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INFORMATION ABOUT VOTING AND PROXY MATERIALS<br>advisory vote on Proposal 3 is non-binding, as provided by law, our Board will review the results of the vote and,<br>consistent with our record of shareowner engagement, will take the results into account in determining executive<br>compensation.<br>Proposal 1: Election of Trustees. Trustees are elected by a plurality of the votes cast at the annual meeting. Any<br>shares not voted (whether by abstention, broker non-vote, or otherwise) will have no impact on the vote. Shares<br>represented by proxies marked “For” will be counted in favor of all nominees, except to the extent the proxy<br>withholds authority to vote for a specified nominee. Shares represented by proxies marked “Abstain” or<br>withholding authority to vote for a specified nominee will not be counted in favor of any such nominee.<br>Proposal 2: Ratification of Independent Registered Public Accounting Firm. Ratification of the appointment of<br>KPMG LLP as our independent registered public accounting firm for 2022 requires the affirmative vote of a<br>majority of all votes cast on this proposal (which means the votes cast “for” the proposal must exceed the votes<br>cast “against” the proposal). Accordingly, abstentions will have no effect on the outcome of the vote on this<br>proposal.<br>Proposal 3: Advisory Vote on Executive Compensation. Approval, on an advisory basis, of our executive<br>compensation requires the affirmative vote of a majority of all votes cast on this proposal. Abstentions and broker<br>non-votes will therefore have no effect on the outcome of the vote on this proposal.<br>Who counts the votes?<br>We have engaged Broadridge Financial Solutions, Inc. as our independent agent to receive and tabulate votes.<br>Broadridge will separately tabulate “for” and “against” votes, abstentions and broker non-votes. We have also<br>appointed an inspector of elections to certify the results, report on the existence of a quorum and the validity of<br>proxies and ballots.<br>How do I vote if I am the record holder of my shares?<br>If you are a shareholder of record, there are several ways for you to vote your common shares at the annual<br>meeting:<br>Voting by Internet. You may vote your shares through the Internet by signing on to the website identified on the<br>proxy card and following the procedures described on the website. Internet voting is available 24 hours a day until<br>11:59 p.m. Eastern Time on the day before the annual meeting, and the procedures are designed to authenticate<br>votes cast by using a personal identification number located on the proxy card. The procedures allow you to<br>appoint a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote<br>through the Internet, you should not return your proxy card.<br>Voting by Mail. If you choose to vote by mail, simply complete the accompanying proxy card, date and sign it, and<br>return it in the postage-paid envelope provided not later than the annual meeting date.<br>Voting by Telephone. You may vote your shares by telephone by calling toll-free 1-800-PROXIES (1-800-776-9437)<br>in the United States or 1-718-921-8500 from foreign countries. Telephone voting is available 24 hours a day until<br>11:59 p.m. Eastern Time on the day before the annual meeting, and the procedures are designed to authenticate<br>votes cast by using a personal identification number located on the proxy card. The procedures allow you to<br>appoint a proxy to vote your shares and to confirm that your instructions have been properly recorded. If you vote<br>by telephone, you should not return your proxy card.<br>In Person Attendance. You may vote your shares in person at the annual meeting. Even if you plan to attend the<br>annual meeting in person, we recommend that you submit the accompanying proxy card or voting instructions, or<br>vote by telephone or via the Internet, by the applicable deadline so that your vote will be counted if you later<br>decide not to attend the annual meeting.<br>56 |
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INFORMATION ABOUT VOTING AND PROXY MATERIALS<br>May I change my vote after I return my proxy?<br>Yes. You may revoke a previously granted proxy at any time before it is exercised by submitting to the Secretary,<br>CubeSmart, 5 Old Lancaster Road, Malvern, Pennsylvania 19355, a notice of revocation or a duly executed proxy<br>bearing a later date, or by attending the meeting and voting in person.<br>How are proxy votes counted?<br>If you vote your common shares by completing the accompanying proxy card, or by voting on the Internet or by<br>phone, and you do not revoke such proxy, your shares will be voted as directed by you. Unless contrary<br>instructions are given, the persons designated as proxy holders on the proxy card will vote “FOR” the election of<br>all nominees for our Board named in this proxy statement, “FOR” the ratification of KPMG LLP as our independent<br>registered public accounting firm, “FOR” the approval on an advisory basis of our executive compensation, and as<br>recommended by our Board with regard to any other matters which may properly come before the annual<br>meeting, or, if no such recommendation is given, the persons designated as proxy holders on the proxy card will<br>vote in accordance with their best judgment on such matter.<br>What does it mean if I receive more than one proxy card?<br>If you receive more than one proxy card, it means that you hold shares registered in more than one account. To<br>ensure that all of your shares are voted, you should vote each of your accounts by Internet, phone or mail. If you<br>mail proxy cards, please sign, date, and return each proxy card to assure that all of your shares are voted.<br>Who pays the costs of soliciting proxies?<br>We will pay the costs of soliciting proxies. We hired Georgeson Inc. to serve as our proxy solicitors at a cost of<br>$8,500. In addition to soliciting proxies by mail, our officers, Trustees, and other employees, without additional<br>compensation, may solicit proxies personally or by other appropriate means. We anticipate that banks, brokers,<br>fiduciaries, custodians, and nominees will forward proxy soliciting materials to their principals and that we will<br>reimburse such persons’ out-of-pocket expenses.<br>How can I find out the results of the voting at the annual meeting?<br>Preliminary voting results will be announced at the annual meeting. Final voting results for Proposals 1 through 3<br>will be reported in a Current Report on Form 8-K filed with the SEC within four business days following the annual<br>meeting.<br>How can I obtain the Company’s Annual Report on Form 10-K?<br>A copy of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 is available electronically<br>on our website at http://investors.cubesmart.com/sec-filings/documents/default.aspx. Our 2021 Annual Report on<br>Form 10-K is not incorporated into this proxy statement and shall not be considered proxy solicitation material.<br>If you wish to have printed copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021,<br>as well as a copy of any exhibit specifically requested, or printed copies of this proxy statement, we will mail these<br>documents to you without charge. Requests should be sent to: Secretary, CubeSmart, 5 Old Lancaster Road,<br>Malvern, Pennsylvania 19355. Our 2021 Annual Report on Form 10-K has been filed with the SEC and may be<br>accessed from the SEC’s homepage at www.sec.gov.<br>Will the coronavirus outbreak (COVID-19) affect the meeting or cause it to be cancelled or postponed?<br>The health and well-being of our shareholders is a high priority. Should we conclude that concerns relating to the<br>impact of the coronavirus outbreak (COVID-19) make it advisable for us to hold the 2022 annual meeting at a<br>different location or solely by means of remote communication (i.e., a virtual-only meeting), we will announce the<br>decision in advance, and will provide information on such an alternative meeting on our website at<br>www.cubesmart.com under “Investor Relations.” Please check our website periodically prior to the meeting date.<br>Whom should I contact if I have any questions?<br>If you have any questions about the annual meeting, these proxy materials or your ownership of our common<br>57 |
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INFORMATION ABOUT VOTING AND PROXY MATERIALS<br>shares, please contact our Secretary by telephone at (610) 535-5000 or by fax at (610) 956-1755.<br>Householding of Proxy Materials<br>If you and other residents at your mailing address own common shares in street name, your broker or bank may<br>have sent you a notice that your household will receive only one annual report and proxy statement for each<br>company in which you hold shares through that broker or bank. This practice of sending only one copy of proxy<br>materials is known as “householding.” If you did not respond that you did not want to participate in householding,<br>you were deemed to have consented to the process. If the foregoing procedures apply to you, your broker or bank<br>has sent one copy of our Annual Report and proxy statement to your address. You may revoke your consent to<br>householding at any time by sending your name, the name of your brokerage firm or bank and your account<br>number to Householding Department, 51 Mercedes Way, Edgewood, NY 11717 (telephone number: 1-800-542-<br>1061). The revocation of your consent to householding will be effective 30 days following its receipt. In any event, if<br>you did not receive an individual copy of this proxy statement or our Annual Report, we will send a copy to you if<br>you address your written request to or call CubeSmart, 5 Old Lancaster Road, Malvern, Pennsylvania 19355,<br>Attention: Secretary (telephone number: 610-535-5000). If you are receiving multiple copies of our Annual Report<br>and proxy statement, you can request householding by contacting our Secretary in the same manner.<br><br><br><br><br><br><br><br><br>58 |
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OTHER MATTERS<br>Other Matters to Come Before the 2022 Annual Meeting<br>No matters are to be presented for action at the annual meeting other than as set forth in this proxy statement. If<br>other matters properly come before the meeting or any adjournment or postponement thereof, however, the<br>persons named in this proxy statement will vote all proxies solicited by this proxy statement as recommended by<br>the Board, or, if no recommendation is given, in their own discretion.<br>Shareholder Proposals and Nominations for the 2023 Annual Meeting<br>Any shareholder proposal pursuant to Rule 14a-8 of the rules promulgated under the Exchange Act to be<br>considered for inclusion in our proxy materials for the next annual meeting of shareholders must be received at<br>our principal executive offices no later than December 2, 2022.<br>In addition, any shareholder who wishes to propose a nominee to the Board or propose any other business to be<br>considered by the shareholders (other than a shareholder proposal for inclusion in our proxy materials pursuant<br>to Rule 14a-8) must comply with the advance notice provisions and other requirements of Article II, Section 12 of<br>the Bylaws, which are on file with the SEC and may be obtained from the Secretary of CubeSmart upon request.<br>These notice provisions require that nominations of persons for election to the Board and the proposal of<br>business to be considered by the shareholders for the 2023 annual meeting must be received no earlier than the<br>close of business on December 2, 2022, and no later than the close of business on January 1, 2023.<br>In addition, such shareholder’s notice must set forth, as to each person whom the shareholder proposes to<br>nominate for election or reelection as a Trustee:<br>(1) the name, age, business address, and residence address of such person,<br>(2) the class and number of shares of beneficial interest of CubeSmart that are beneficially owned or owned of<br>record by such person, the date(s) on which each such security was acquired, and any short interest in any<br>such security (including any opportunity to profit or share in any benefit from any decrease in the price of any<br>such security) held by such person,<br>(3) a description of all direct and indirect compensation and other material relationships during the past three<br>years between or among such shareholder or any person associated with such shareholder, on the one hand,<br>and each proposed nominee, and his or her associates, on the other hand, and<br>(4) all other information relating to such person that is required to be disclosed in solicitations of proxies for<br>election of Trustees in an election contest (even if an election contest is not involved), or is otherwise<br>required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act<br>(including such person’s written consent to being named in the proxy statement as a nominee and to serving<br>as a Trustee if elected);<br> • as to any other business that the shareholder proposes to bring before the meeting, a description in<br>reasonable detail of the business desired to be brought before the meeting, the reasons for conducting<br>such business at the meeting and any material interest in such business of such shareholder (including<br>any anticipated benefit to the shareholder therefrom) and of each beneficial owner, if any, on whose behalf<br>the proposal is made; and<br> • as to the shareholder giving the notice and each beneficial owner, if any, on whose behalf the nomination<br>or proposal is made.<br>(5) the name and address of such shareholder, as they appear on our share ledger and current name and<br>address, if different, of such beneficial owner,<br>(6) the class and number of shares of each class of beneficial interest of CubeSmart that are owned beneficially<br>and of record by such shareholder and owned beneficially by such beneficial owner, the date(s) on which each<br>such security was acquired, and any short interest in any such security (including any opportunity to profit or<br>share in any benefit from any decrease in the price of any such security) held by such shareholder or any<br>beneficial owner, if any, on whose behalf the proposal is made, (3) a description of any economic interest in or<br>59 |
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OTHER MATTERS<br>any other right with respect to (including from a third party), any of our shares (or any rights, options or other<br>securities convertible into or exercisable or exchangeable for such securities or any obligations measured by<br>the price or value of any such securities, including, without limitation, any swaps or other derivative<br>arrangements) held by such shareholder or any beneficial owner on whose behalf the proposal is made,<br>(7) a description of any agreements, arrangements or understandings between or among such shareholder or<br>beneficial owner, on the one hand, and any other persons, on the other hand, in connection with the<br>nomination of any person for election as a Trustee,<br>(8) a representation that such shareholder intends to appear in person or by proxy at the annual meeting to<br>nominate any person(s) named in its notice or to bring such proper business included in its notice before the<br>annual meeting and whether or not such shareholder intends to deliver a proxy statement and/or form of<br>proxy to holders of at least the percentage of the Company’s outstanding shares of beneficial interest<br>required to elect the proposed nominee(s) or approve the proposal(s) included in its notice and/or otherwise<br>to solicit proxies from shareholders in support of the election of the proposed nominee(s) or the proposal, and<br>(9) all other information relating to such shareholder that is required to be disclosed in solicitations of proxies for<br>election of Trustees in an election contest (even if an election contest is not involved), or is otherwise<br>required, in each case pursuant to Regulation 14A (or any successor provision) under the Exchange Act.<br><br><br>By Order of the Board of Trustees,<br><br><br><br><br>Jeffrey P. Foster<br>Chief Legal Officer and Secretary<br><br>Malvern, Pennsylvania<br>April 1, 2022<br><br>60 |
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APPENDIX – RECONCILIATION OF NON-GAAP MEASURES<br>FFO and FFO, as adjusted<br>Funds from operations (“FFO”) is a widely used performance measure for real estate companies and is provided<br>here as a supplemental measure of operating performance. The April 2002 National Policy Bulletin of the National<br>Association of Real Estate Investment Trusts, as amended and restated, defines FFO as net income (computed in<br>accordance with GAAP), excluding gains (or losses) from sales of real estate and related impairment charges, plus<br>real estate depreciation and amortization and after adjustments for unconsolidated partnerships and joint<br>ventures.<br>Management uses FFO as a key performance indicator in evaluating the operations of our stores. Given the nature<br>of our business as a real estate owner and operator, we consider FFO a key measure of our operating<br>performance that is not specifically defined by accounting principles generally accepted in the United States. We<br>believe that FFO is useful to management and investors as a starting point in measuring our operational<br>performance because FFO excludes various items included in net income that do not relate to or are not indicative<br>of our operating performance such as gains (or losses) from sales of real estate, gains from remeasurement of<br>investments in real estate ventures, impairments of depreciable assets and depreciation, which can make periodic<br>and peer analyses of operating performance more difficult. Our computation of FFO may not be comparable to FFO<br>reported by other REITs or real estate companies.<br>FFO should not be considered as an alternative to net income (determined in accordance with GAAP) as an<br>indication of our performance. FFO does not represent cash generated from operating activities determined in<br>accordance with GAAP and is not a measure of liquidity or an indicator of our ability to make cash distributions. We<br>believe that to further understand our performance, FFO should be compared with our reported net income and<br>considered in addition to cash flows computed in accordance with GAAP, as presented in our consolidated financial<br>statements.<br>FFO, as adjusted represents FFO as defined above, excluding the effects of acquisition related costs, gains or<br>losses from early extinguishment of debt, and non-recurring items, which we believe are not indicative of the<br>Company’s operating results. We present FFO, as adjusted because we believe it is a helpful measure in<br>understanding our results of operations insofar as we believe that the items noted above that are included in FFO,<br>but excluded from FFO, as adjusted are not indicative of our ongoing operating results. We also believe that the<br>analyst community considers our FFO, as adjusted (or similar measures using different terminology) when<br>evaluating us. Because other REITs or real estate companies may not compute FFO, as adjusted in the same<br>manner as we do, and may use different terminology, our computation of FFO, as adjusted may not be comparable<br>to FFO, as adjusted reported by other REITs or real estate companies.<br>61 |
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APPENDIX – RECONCILIATION OF NON-GAAP MEASURES<br>The following table reconciles net income available to common shareholders to FFO and FFO, as adjusted.<br><br>(1) The year ended December 31, 2021 includes $23.5 million of gains from sale of real estate, net that are included in the<br>Company’s share of equity in earnings of real estate ventures.<br><br>(2) For the year ended December 31, 2021, loss on early repayment of debt relates to a $20.0 million prepayment premium and a<br>$0.3 million write-off of unamortized loan procurement costs associated with the Operating Partnership’s redemption, in full,<br>of its 2023 Notes on December 23, 2021, as well as $0.5 million of costs that are included in the Company’s share of equity in<br>earnings of real estate ventures. For the year ended December 31, 2020, loss on early repayment of debt relates to a $17.6<br>million prepayment premium and a $0.4 million write-off of unamortized loan procurement costs associated with the<br>Operating Partnership’s redemption, in full, of its 2022 Notes on October 30, 2020.<br><br>(3) Transaction-related expenses include severance expenses ($14.8 million) and other transaction expenses ($0.2 million). The<br>predecessor company, LAACO, Ltd. (“LAACO”), entered into severance agreements with certain employees, including<br>members of their executive team, prior to our acquisition of LAACO on December 9, 2021. These costs were known to us and<br>the assumption of the obligation to make these payments post-closing was contemplated in our net consideration paid in the<br>transaction. In accordance with GAAP, and based on the specific details of the arrangements with the employees prior to<br>closing, these costs are considered post-combination compensation expenses. We expect that an additional $10.3 million in<br>severance costs will be expensed during the six months ended June 30, 2022. Transaction-related expenses are included in the<br>component of other income (expense) designated as other.<br><br>(4) The Company assumed a Paycheck Protection Program loan in conjunction with the LAACO transaction. This loan was<br>subsequently forgiven by the Small Business Administration and the associated income is included in the component of other<br>income (expense) designated as other.<br><br>(5) Relates to a nonrefundable commitment fee to obtain bridge financing in the event that the Company's November 2021 senior<br>note offerings were delayed, or could not be executed, in advance of the LAACO transaction. Upon issuance of the senior notes,<br>the bridge financing commitment expired and the fee was fully amortized. The amortization of this fee is included in loan<br>procurement amortization expense.<br><br>2021 2020<br>Net income attributable to the Company’s common shareholders $ 223,482 $ 165,621<br>Add (deduct):<br> Real estate depreciation and amortization:<br> Real property 226,599 152,897<br> Company’s share of unconsolidated real estate ventures 8,510 7,430<br> Gains from sale of real estate, net (1) (56,181) (6,710)<br> Noncontrolling interests in the Operating Partnership 7,873 1,825<br>FFO attributable to common shareholders and OP unitholders $ 410,283 $ 321,063<br>Add (deduct):<br> Loss on early repayment of debt (2) 20,884 18,020<br> Transaction-related expenses (3) 14,986 -<br> Loan forgiveness income (4) (1,546) -<br> Bridge loan fee (5) 4,000 -<br>FFO, as adjusted, attributable to common shareholders and OP unitholders $ 448,607 $ 339,083<br> Weighted average diluted shares outstanding 205,009 194,943<br> Weighted average diluted units outstanding 7,117 2,137<br> Weighted average diluted shares and units outstanding 212,126 197,080<br>For the year ended December 31,<br>62 |
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APPENDIX – RECONCILIATION OF NON-GAAP MEASURES<br><br>NOI<br>We define net operating income, which we refer to as “NOI”, as total continuing revenues less continuing property<br>operating expenses. NOI also can be calculated by adding back to net income (loss): interest expense on loans,<br>loan procurement amortization expense, loss on early extinguishment of debt, acquisition related costs, equity in<br>losses of real estate ventures, other expense, depreciation and amortization expense, general and administrative<br>expense, and deducting from net income (loss): equity in earnings of real estate ventures, gains from sales of real<br>estate, net, other income and interest income. NOI is not a measure of performance calculated in accordance with<br>GAAP.<br>We use NOI as a measure of operating performance at each of our stores, and for all of our stores in the<br>aggregate. NOI should not be considered as a substitute for operating income, net income, cash flows provided by<br>operating, investing and financing activities, or other income statement or cash flow statement data prepared in<br>accordance with GAAP.<br>We believe NOI is useful to investors in evaluating our operating performance because:<br> • it is one of the primary measures used by our management and our store managers to evaluate the<br>economic productivity of our stores, including our ability to lease our stores, increase pricing and<br>occupancy and control our property operating expenses;<br> • it is widely used in the real estate industry and the self-storage industry to measure the performance and<br>value of real estate assets without regard to various items included in net income that do not relate to or<br>are not indicative of operating performance, such as depreciation and amortization, which can vary<br>depending upon accounting methods and the book value of assets; and<br> • it helps our investors to meaningfully compare the results of our operating performance from period to<br>period by removing the impact of our capital structure (primarily interest expense on our outstanding<br>indebtedness) and depreciation of our basis in our assets from our operating results.<br>There are material limitations to using a measure such as NOI, including the difficulty associated with comparing<br>results among more than one company and the inability to analyze certain significant items, including depreciation<br>and interest expense, that directly affect our net income. We compensate for these limitations by considering the<br>economic effect of the excluded expense items independently as well as in connection with our analysis of net<br>income. NOI should be considered in addition to, but not as a substitute for, other measures of financial<br>performance reported in accordance with GAAP, such as total revenues, operating income and net income. See<br>below under “Same-Store Results” for a reconciliation of NOI to net income attributable to the Company’s<br>common shareholders.<br><br><br><br><br><br>63 |
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APPENDIX – RECONCILIATION OF NON-GAAP MEASURES<br><br>Same-Store Results<br>We consider our same-store portfolio to consist of only those stores owned (or partially owned and consolidated)<br>and operated on a stabilized basis at the beginning and at the end of the applicable years presented. We consider a<br>store to be stabilized once it has achieved an occupancy rate that we believe, based on our assessment of market-<br>specific data, is representative of similar self-storage assets in the applicable market for a full year measured as<br>of the most recent January 1 and has not been significantly damaged by natural disaster or undergone significant<br>renovation. We believe that same-store results are useful to investors in evaluating our performance because they<br>provide information relating to changes in store-level operating performance without considering the effects of<br>acquisitions, developments or dispositions. As of December 31, 2021, we owned 506 same-store properties and<br>101 non-same-store properties. All of the non-same-store properties were 2020 and 2021 acquisitions,<br>dispositions, developed stores, stores with a significant portion of net rentable square footage taken out of service<br>or stores that have not yet reached stabilization as defined above.<br>The following table compares our same-store and other results for the years ended December 31, 2021 and 2020<br>and reconciles our same-store results to net income attributable to the Company’s common shareholders.<br><br><br><br>2021 2020 2021 2020 2021 2020 2021 2020<br>Revenues:<br>Rental income 631,410 $ 557,201 $ 76,341 $ 23,808 $ - $ - $ 707,751 $ 581,009 $<br>Other property related income 26,399 24,673 2,906 1,280 54,300 44,770 83,605 70,723<br>Property management fee income - - - - 31,208 27,445 31,208 27,445<br> Total revenues 657,809 581,874 79,247 25,088 85,508 72,215 822,564 679,177<br>Operating Expenses:<br>Property operating expenses 192,650 184,939 23,457 9,601 35,997 29,094 252,104 223,634<br>Net Operating Income (NOI) 465,159 396,935 55,790 15,487 49,511 43,121 570,460 455,543<br>Depreciation and amortization 232,049 156,573<br>General and administrative 47,809 41,423<br> Subtotal 279,858 197,996<br>Other (expense) income<br>Interest:<br> Interest expense on loans (78,448) (75,890)<br>(8,168) (2,674)<br>(20,328) (18,020)<br>Equity in earnings of real estate ventures 25,275 178<br>Gains from sales of real estate, net 32,698 6,710<br>Other (10,818) (240)<br> Total other expense (59,789) (89,936)<br>Net income 230,813 167,611<br>(7,873) (1,825)<br>542 (165)<br>223,482 $ 165,621 $<br>Non Same-Store<br>Properties Other/ Eliminations Total Portfolio<br>Net income attributable to the Company's common shareholders<br>Net (income) loss attributable to noncontrolling interests<br> Noncontrolling interests in the Operating Partnership<br> Noncontrolling interests in subsidiaries<br>Same-Store Property<br>Portfolio<br> Loan procurement amortization expense<br> Loss on early extinguishment of debt<br>64 |
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