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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934

 

Filed by the Registrant ☒

 

Filed by a Party other than the Registrant ☐

 

Check the appropriate box:

☐	Preliminary Proxy Statement
☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material Pursuant to Rule 14a-12

 

Mid-America Apartment Communities, Inc.

(Name of Registrant as Specified in Its Charter)

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

 

Payment of Filing Fee (Check the appropriate box):

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☐	Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
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PROXY STATEMENT

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

 

2019 ANNUAL MEETING OF SHAREHOLDERS

Tuesday, May 21, 2019

12:30 p.m. local time

 

MAA Corporate Headquarters

5^th Floor

 

6815 Poplar Avenue, Suite 500

Germantown, Tennessee 38138

 

MID-AMERICA APARTMENT COMMUNITIES, INC.

 

 

April 9, 2019

 

To my fellow shareholders:

 

I am pleased to invite you to attend the 2019 Annual Meeting of Shareholders of Mid-America Apartment Communities, Inc. The meeting will be held at 12:30 p.m., local time, on Tuesday, May 21, 2019, at our corporate headquarters located at 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138. The Notice of Annual Meeting of Shareholders and Proxy Statement, both of which accompany this letter, provide details regarding the business to be conducted at the meeting, as well as other important information about us.

 

Your vote is important. Whether or not you plan to attend the 2019 Annual Meeting of Shareholders, I encourage you to vote. Please complete, sign and return your proxy card or give your proxy authorization over the Internet or by phone prior to the meeting so that your shares will be represented and voted, regardless of whether you attend. You can find more information on how to vote your shares in the accompanying materials.

 

Along with the other members of the Board of Directors and management, I look forward to greeting you at the meeting if you are able to attend. Thank you for your support.

	Sincerely,
	H. Eric Bolton, Jr.
	Chairman of the Board of Directors and Chief Executive Officer

 

 

MID-AMERICA APARTMENT COMMUNITIES, INC. PROXY STATEMENT 2019 ANNUAL MEETING OF SHAREHOLDERS   TABLE OF CONTENTS

 

 

 

INTRODUCTION

 

SOLICITATION OF PROXIES

Mid-America Apartment Communities, Inc. is soliciting proxies, and your vote is very important. For this reason, our Board of Directors requests that you allow your shares to be represented at the 2019 Annual Meeting of Shareholders by the proxies named on the enclosed proxy card. In connection with our solicitation of proxies, we are mailing this Proxy Statement, the enclosed proxy card, and our Annual Report to Shareholders (including our Form 10-K) to shareholders eligible to vote at the 2019 Annual Meeting of Shareholders beginning on or about April 9, 2019.

 

We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by phone or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

 

MATERIALS PROVIDED

This Proxy Statement contains materials relevant to the matters to be voted upon at the 2019 Annual Meeting of Shareholders. It also contains information on how to vote your shares, how to obtain other materials which may be of interest to you and information on the ownership of Mid-America Apartment Communities, Inc. securities.

 

A Proxy Statement Highlights section has been included to provide a quick reference of the materials contained in this Proxy Statement. The Proxy Statement Highlights section is only a summary and does not provide all of the information or details which you should consider when determining your vote. You should read the entire Proxy Statement to ensure you have all of the relevant information before voting.

 

REFERENCES IN THE PROXY STATEMENT

In this Proxy Statement, the following references represent the terminology indicated:

 

Reference(s)	Represented Terminology
AIP	Annual Incentive Plan
Annual Meeting	2019 Annual Meeting of Shareholders of Mid-America Apartment Communities, Inc.
ASC	Accounting Standards Codification
Board	Board of Directors of Mid-America Apartment Communities, Inc.
CEO	Chief Executive Officer
CFO	Chief Financial Officer
COO	Chief Operating Officer
EVP	Executive Vice President
FASB	Financial Accounting Standards Board
FFO	Funds From Operations
GAAP	Generally Accepted Accounting Principles
GC	General Counsel
LTIP	Long-Term Incentive Program
MAA, we, us, our	Mid-America Apartment Communities, Inc.
NEO	Named Executive Officer
NYSE	New York Stock Exchange
REIT	Real Estate Investment Trust
SEC	Securities and Exchange Commission
TSR	Total Shareholder Return

 

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2019 PROXY STATEMENT

1

NOTICE OF ANNUAL MEETING

 

By Order of the Board of Directors

Leslie B.C. Wolfgang

Senior Vice President, Chief Ethics and Compliance Officer, and Corporate Secretary

April 9, 2019

2019 PROXY STATEMENT

2

 

PROXY STATEMENT HIGHLIGHTS

 

PROPOSAL   1

ELECT THE 12 DIRECTORS NAMED IN THE PROXY STATEMENT TO SERVE UNTIL THE 2020 ANNUAL MEETING OF SHAREHOLDERS.

BOARD RECOMMENDATION FOR ALL

 

NOMINEES

			COMMITTEES
	AGE	TENURE	AC	CC	NCGC	REIC	POSITION
H. Eric Bolton, Jr. Chairman	62	1997				⌂ CHAIR	CEO of MAA
Russell R. French INDEPENDENT SEC Financial Expert	73	2016	⌂				Special Limited Partner of Moseley & Co. VI, LLC
Alan B. Graf, Jr. Lead INDEPENDENT Director SEC Financial Expert	65	2002	⌂ CHAIR				EVP and CFO of FedEx Corporation
Toni Jennings INDEPENDENT	70	2016		⌂	⌂		Chairman of Jack Jennings & Sons, Inc.
James K. Lowder INDEPENDENT	69	2013				⌂	Chairman of The Colonial Company
Thomas H. Lowder INDEPENDENT	69	2013				⌂	Past Chairman and CEO of Colonial Properties Trust
Monica McGurk INDEPENDENT	49	2016		⌂	⌂		Chief Growth Officer of Kellogg Company
Claude B. Nielsen INDEPENDENT	68	2013		⌂	⌂ CHAIR		Chairman and Past CEO of Coca-Cola Bottling Company United, Inc.
Philip W. Norwood INDEPENDENT	71	2007		⌂ CHAIR	⌂	⌂	Past President and CEO of Faison Enterprises, Inc.
W. Reid Sanders INDEPENDENT	69	2010	⌂			⌂	President of Sanders Properties, LLC
Gary Shorb INDEPENDENT	68	2012	⌂				Past President and CEO of Methodist Le Bonheur Healthcare
David P. Stockert	57	2016				⌂	Past CEO of Post Properties, Inc.

 

AC = Audit Committee; CC = Compensation Committee;

NCGC = Nominating and Corporate Governance Committee, REIC = Real Estate Investment Committee

 

DIVERSITY

 

 

 

WomenInc. Magazine named Toni Jennings and Monica McGurk as two of 2018’s Most Influential Corporate Directors in their Winter 2018/2019 edition.

 

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2019 PROXY STATEMENT

3

 

KEY EXPERIENCE, QUALIFICATIONS AND SKILLS

The Board believes that experience or expertise in the following areas is particularly relevant to MAA’s business and structure and should be possessed by one or more members of the Board. These factors, along with others, were considered in selecting the nominees for election.

 

Real Estate Industry – Investment	6	Nominees	⌂⌂⌂⌂⌂⌂
Real Estate Industry – Development/Construction	6	Nominees	⌂⌂⌂⌂⌂⌂
Public Company Platforms	10	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Financial Literacy	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Capital Markets	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Strategic Planning and Oversight	12	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Risk Oversight	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Organization Leadership	12	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Corporate Governance	10	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂

 

CORPORATE GOVERNANCE

 

 

 

 

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2019 PROXY STATEMENT

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PROPOSAL   2

ADVISORY (NON-BINDING) VOTE TO APPROVE NAMED EXECUTIVE OFFICER COMPENSATION.

BOARD RECOMMENDATION FOR

 

EXECUTIVE COMPENSATION PHILOSOPHY

The Compensation Committee believes that the compensation programs for our executive officers should balance the following objectives.

 

 

SAY ON PAY

The Compensation Committee also considers the results of our shareholders’ input on executive compensation and is pleased that shareholders have supported their previous recommendations to provide that input on an annual basis.

 

93.6% APPROVAL FOR Say on Pay In 2018

Annual Say on Pay Shareholder Vote APPROVED EVERY YEAR Since Introduced in 2011

Say on Pay Average Approval Rate 96.3% since 2011

 

EXECUTIVE COMPENSATION PRACTICES

 

 

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2019 PROXY STATEMENT

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2018 MAA PERFORMANCE

In 2018, we:

 

 

TOTAL SHAREHOLDER RETURN

 

ANNUALIZED 2016 LTIP THREE YEAR TSR (1)

 

 

DIVIDENDS

 

In 2018, MAA returned nearly $420 MILLION in dividends to common shareholders

In 2018, MAA declared its 100th COMMON QUARTERLY DIVIDEND PAYMENT

NEVER SUSPENDED NOR REDUCED our common dividend

 

ANNUAL DIVIDENDS PAID PER COMMON SHARE

 

 

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2019 PROXY STATEMENT

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2018 EXECUTIVE TOTAL DIRECT COMPENSATION

The Compensation Committee strives to find the appropriate balance of compensation elements to provide a fixed base of cash compensation to attract talented executives (Salary), incent executives to achieve key business results and reward executives for their individual contributions to those results (AIP) and to tie executives’ interests to those of our shareholders (LTIP). The mix of these elements established for the 2018 compensation packages of our executive officers is indicated below.

 

TOTAL 2018 TARGET DIRECT COMPENSATION

CEO		AVERAGE OF ALL OTHER NEOs
$4.6 Million		$2.3 Million

 

2018 DIRECT COMPENSATION REALIZED

Compensation realized by NEOs during 2018 related to their respective 2018 compensation packages:

 

					2018 LTIP		Total 2018 Compensation Realized in 2018
						Remaining Target Realizable in Future Years (2)
					Shares of Restricted Stock Earned (1)
	2018 Salary Received	2018 AIP Awarded						Shares of Restricted Stock (1)
		Amount Earned	Percent of Target	Percent of Maximum
							Cash
H. Eric Bolton, Jr. CEO	$775,000	$1,603,088	123%	83%	16,336	11,929	$2,378,088	16,336
Thomas L. Grimes, Jr. COO	$496,100	$769,493	87%	78%	8,133	5,939	$1,263,685	8,133
Albert M. Campbell, III CFO	$484,000	$619,314	113%	85%	7,934	5,794	$1,103,316	7,934
Robert J. DelPriore GC	$471,900	$598,523	112%	85%	6,631	4,842	$1,070,422	6,631

(1)

Shares of restricted stock will vest over various time periods, remaining subject to forfeiture until vested, dependent upon continued employment in good standing with MAA.

(2)

Represents Target shares of restricted stock realizable under the three year total shareholder return metric for which the performance period does not end until December 31, 2020.

 

Other compensation realized by NEOs during 2018 included awards earned under long-term elements of previous performance-based equity compensation packages.

 

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2019 PROXY STATEMENT

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PROPOSAL 3

RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS MAA’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR 2019.

BOARD RECOMMENDATION FOR

 

POLICIES REGARDING INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

 

Annual Ratification by Shareholders of the Audit Committee’s Appointment of Ernst & Young LLP

AVERAGES OVER 99%

(over last 10 years)

 

AUDIT AND NON-AUDIT FEE

 

 

REPRESENTATION AT ANNUAL MEETING

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to make a statement if they so desire and to answer any appropriate questions.

 

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2019 PROXY STATEMENT

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ELECTION OF DIRECTORS

 

PROPOSAL 1: ELECTION OF DIRECTORS

 

	MATTER TO BE VOTED Election of the 12 director nominees named herein to serve until the 2020 Annual Meeting of Shareholders, and until their successors have been duly elected and qualified.   Our Board proposes that H. Eric Bolton, Jr., Russell R. French, Alan B. Graf, Jr., Toni Jennings, James K. Lowder, Thomas H. Lowder, Monica McGurk, Claude B. Nielsen, Philip W. Norwood, W. Reid Sanders, Gary Shorb and David P. Stockert, all of whom are currently serving as directors, be elected for a term of one year.
	VOTE REQUIRED Each director nominee will be elected if there is a quorum at the Annual Meeting, either in person or by proxy, and the votes cast “FOR” each director nominee exceeds the votes cast “AGAINST” each director nominee.   We have no reason to believe that any of the nominees for director will not agree or be available to serve as a director if elected. However, should any director nominee become unable or unwilling to serve, the proxies may be voted for a substitute director nominee or to allow the vacancy to remain open until filled by our Board.
	IMPACT OF ABSTENTIONS Abstentions will have no legal effect on whether each director nominee is approved.   IMPACT OF BROKER NON-VOTES Broker non-votes will have no legal effect on whether each director nominee is approved.
	BOARD RECOMMENDATION Our Board recommends a vote FOR each of the director nominees.

 

Our Board believes that it is necessary for our directors to possess a variety of backgrounds, skills and viewpoints in order to provide strong leadership to MAA. When searching for new candidates, the Nominating and Corporate Governance Committee considers the evolving needs of our Board and searches for candidates that fill any current or anticipated future gaps, considering each candidates credentials both independently and within the entirety of the Board.

 

When evaluating potential candidates, the Nominating and Corporate Governance Committee considers a variety of factors including expertise in areas relevant to the real estate industry, operating as a public company and navigating capital markets. They also consider experience in broader aptitudes such as strategic planning, risk oversight and human capital development. In addition to these key skills, the Nominating and Corporate Governance Committee also feels it is important for the Board to have a breadth of viewpoints and experiences by including diversity in attributes such as gender, race, age and tenure. The Nominating and Corporate Governance Committee also evaluates a candidate’s ability to provide quality service to the Board and considers any conflicts of interest, integrity and ethical character of the candidate and their commitment to the goal of maximizing long-term shareholder value. With respect to the nomination of continuing directors for re-election, the individual’s past contributions to our Board are also considered.

 

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2019 PROXY STATEMENT

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THE BOARD’S ROLE AND RESPONSIBILITIES

The Board is elected by shareholders and represents shareholder interests in the long-term success of MAA. Except for matters voted upon by shareholders, the Board acts as the ultimate decision maker of MAA. While the Board functions in an oversight capacity, management is responsible for the daily operations of MAA.

 

Key Board Responsibilities

 

STRATEGY

Strategic planning and oversight of management’s execution of MAA’s strategic vision is a primary responsibility of the Board. Annually, management and the Board review and discuss detailed strategic plans for the next several years, including changes from previous strategic positions, market and economic projections, peer performance benchmarking data, areas of focus for each functional area, expected financial statement and shareholder investment impacts, resource requirements, risks and stress test scenarios, among other topics.

 

Throughout the year the Board and its committees receive updates from management and actively engage in further discussions regarding execution of the strategy, variables impacting results and changes to the strategic plan.

 

Each year, the Board holds one of its quarterly meetings in a different MAA market. In addition to its regular Board and committee meetings, the Board visits several properties representing different aspects of MAA’s strategy in conjunction with these meetings. The Board believes this provides it with better insight into MAA’s markets, operations, resident base, human capital management, technology usage and allocation of capital investments.

 

RISK MANAGEMENT

While management is responsible for the day to day management of our risk exposures, both the Board as a whole and its respective committees serve an active role in overseeing management of our risks. Our Board or its committees regularly reviews, with members of our senior management and outside advisors, information regarding our strategy and key areas of the company including operations, finance, information technology, human capital, legal and regulatory, as well as the risks associated with each. Senior management as well as outside advisors also periodically meet with each committee and make representations associated with their respective risk oversight responsibilities as outlined below:

 

 

While each committee is responsible for evaluating certain risks and overseeing the management of such risks, our Board is regularly informed through committee reports about risks assigned to committees. In addition, the Board reviews the results of our enterprise risk management efforts and receives legal and operational updates from executive management at every meeting.

 

SUCCESSION PLANNING

The Board is responsible for appointing our CEO and for ensuring that adequate succession plans are in place to address both planned CEO succession as well as potential unexpected or emergency succession needs. The Nominating and Corporate Governance Committee oversees succession planning for both the Board and CEO, routinely obtaining input from and updating the full Board on succession plan reviews.

 

The Nominating and Corporate Governance Committee also oversees succession planning and associate development of executive and senior management positions to ensure adequate bench strength is available to meet the long-term needs of MAA. The CEO and other executive management periodically update the Nominating and Corporate Governance Committee on senior management succession plans including associate development plans and areas of risk.

 

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2019 PROXY STATEMENT

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The Board has exposure to succession candidates on an ongoing basis, meeting with executives both inside and outside of Board meetings at least four times a year and also periodically meeting with key senior managers.

 

The Compensation Committee considers succession planning input from the Board and the Nominating and Corporate Governance Committee when determining compensation packages for the Board and NEOs.

 

SUSTAINABILITY

Ensuring the long-term success of MAA for our shareholders requires a long-term approach in all that we do. The Board is directly responsible for setting MAA’s strategy, which includes long-term sustainability planning. Committees of the Board support sustainability within their respective purviews: the Nominating and Corporate Governance Committee directs the corporate governance aspects of MAA, the Audit Committee ensures that MAA’s accounting policies and procedures and auditing controls support the reporting of high quality financial statements and the Compensation Committee considers the need to attract and retain qualified associates to deliver on our strategic directives.

 

Sustainability also goes beyond our brick and mortar walls. Since MAA formed the Open Arms Foundation – our corporate charity that supplies fully-furnished apartments to families and individuals who have to travel away from their home to receive specialized longer-term medical treatment – our Board has authorized the annual donation of apartment homes from across our portfolio for exclusive use as Open Arms homes. Open Arms is managed and operated 100% by MAA associates who donate time both during and outside of work hours to support our guests from throughout the world. We currently have approximately 50 homes available to both help ease the financial burden associated with long-term medical care and to allow room for family and friends to stay with and support our guest during their treatment.

 

The very nature of multi-family housing – using limited land resources to house hundreds of families - is based in sustainability concepts. MAA is committed to ensuring that the impact we make on not only our associates, residents and investors, but also the surrounding communities is a positive one.

 

To support these efforts, the Compensation Committee and full Board have included in the CEO’s goals for 2019 responsibility for enhancing MAA’s sustainability efforts and ensuring that MAA is doing the work required to be in a position to produce its first annual sustainability report with quantitative performance data including absolute and normalized scope 1 and 2 greenhouse gas emissions, as well as our sustainability policies and improvement targets by the end of 2020.

 

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2019 PROXY STATEMENT

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BOARD STRUCTURE

We believe that our current board leadership model, when combined with the experience of our Board, the strong leadership of our independent directors and Lead Independent Director, the committees of the Board and the corporate governance policies in place, strikes an appropriate balance between informed, consistent leadership and independent oversight, allowing for efficiency and accountability, ultimately creating an environment for the effective execution of the Board’s duties and responsibilities.

 

COMBINED CEO AND CHAIRMAN Provides benefit of management’s perspectives on MAA to enhance the Board’s oversight functions		LEAD INDEPENDENT DIRECTOR Provides an appropriate contact for matters concerning the CEO and ensures agendas include all topics of interest to the Board
100% INDEPENDENT AUDIT, COMPENSATION AND NOMINATING AND CORPORATE GOVERNANCE COMMITTEES Provides for better control and oversight of respective areas of responsibilities		NON-MANAGEMENT AND INDEPENDENT DIRECTOR EXXECUTIVE SESSIONS Ensures candid discussions

 

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SEC FINANCIAL EXPERTS Two SEC financial experts ensure the Audit Committee has the unique skills and expertise required to perform the committee’s oversight responsibilities

EXTERNAL CONSULTANTS Ability to retain external consultants, experts and legal counsel provides the Board with appropriate resources to protect the interests of shareholders

 

DIRECT COMMUNICATION WITH BOARD Shareholders and other interested parties may communicate in writing with our Board, any of its committees, its non-management directors as a group or its independent directors as a group

 

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2019 PROXY STATEMENT

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CURRENT BOARD COMPOSITION

The below table reflects our current Board composition.

 

L	Lead Independent Director
INDEPENDENT	Indicates that our Board has affirmatively determined the 10 Directors indicated meet the independence standards of our Corporate Governance Guidelines, the listing standards of the NYSE and applicable SEC rules
NM	Non-Management Director
A	Audit Committee
C	Compensation Committee
NCG	Nominating and Corporate Governance Committee
REI	Real Estate Investment Committee
X	Committee Member
XC	Committee Chairman
SFE	SEC Financial Expert

 

					Committee Memberships				Other Public Company Boards
Name	Age (1)	Gender	Director Since	Primary Occupation	A	C	NCG	REI
H. Eric Bolton, Jr. Chairman	62	M	1997	CEO of MAA				XC	1
Russell R. French INDEPENDENT	73	M	2016	Special Limited Partner of Moseley & Co. VI, LLC and Class B Partner of Moseley & Co. VII, LLC and Moseley & Co. SBIC, LLC	X, SFE				-
Alan B. Graf, Jr. INDEPENDENT	65	M	2002	EVP and CFO of FedEx Corporation	L, XC, SFE				1
Toni Jennings INDEPENDENT	70	F	2016	Chairman of the Board of Jack Jennings & Sons, Inc. and Jennings & Jennings, Inc.		X	X		2
James K. Lowder INDEPENDENT	69	M	2013	Chairman of the Board of The Colonial Company				X	-
Thomas H. Lowder INDEPENDENT	69	M	2013	Past Chairman of the Board of Trustees and CEO of Colonial Properties Trust				X	-
Monica McGurk INDEPENDENT	49	F	2016	Chief Growth Officer of Kellogg Company		X	X		-
Claude B. Nielsen INDEPENDENT	68	M	2013	Chairman of the Board and Past CEO of Coca-Cola Bottling Company United, Inc.		X	XC		-
Philip W. Norwood INDEPENDENT	71	M	2007	Past President and CEO of Faison Enterprises, Inc.		XC	X	X	-
W. Reid Sanders INDEPENDENT	69	M	2010	President of Sanders Properties, LLC and Sanders Investments, LLC	X			X	2
Gary Shorb INDEPENDENT	68	M	2012	Past President and CEO of Methodist Le Bonheur Healthcare	X				-
David P. Stockert NM	57	M	2016	Past CEO of Post Properties, Inc.				X	1

(1)

Age is as of May 21, 2019, the meeting date for the Annual Meeting.

 

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2019 PROXY STATEMENT

13

Board And Committee Meetings

 

MEETINGS OF THE BOARD, COMMITTEES AND OTHER GROUPS

The below schedule provides the number of meetings that the Board, each committee and certain other groups of the Board held during 2018.

 

 

INDEPENDENT DIRECTORS

A director is considered independent if our Board affirmatively determines that the director has no direct or indirect material relationship with us. Consistent with the requirements of the SEC and the NYSE, our Board reviews all relevant transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent auditors. Our Board has adopted the following categorical standards.

 

 

Our Board consults with both internal and external counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent”, including those set forth in pertinent listing standards of the NYSE, as in effect from time-to-time.

 

REGULAR MEETINGS WITHOUT MANAGEMENT

Both our non-management directors and our independent directors regularly meet without management present. The Board has determined that Mr. Stockert is not an independent director because he was the CEO of Post Properties, Inc. which MAA acquired within the past five years. We consider Mr. Stockert to be a non-management director. As such, Mr. Stockert meets from time-to-time with the independent directors without the participation of management.

 

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2019 PROXY STATEMENT

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Standing Committees

Our Board has four standing committees: Audit; Compensation; Nominating and Corporate Governance; and Real Estate Investment. All of the members of the Audit, Compensation and Nominating and Corporate Governance committees are independent, pursuant to the standards set forth in our Corporate Governance Guidelines, the NYSE listing standards and applicable SEC rules. The Real Estate Investment Committee consists of four independent members and two non-independent members.

 

  AUDIT COMMITTEE

MEMBERS	INDEPENDENCE	MEETINGS IN 2018	SEC FINANCIAL EXPERTS
Alan B. Graf, Jr., CHAIRMAN Russell R. French W. Reid Sanders Gary Shorb	100% Independent	7	Alan B. Graf, Jr. Russell R. French

 

COMMITTEE RESPONSIBILITIES

 

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2019 PROXY STATEMENT

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MEMBERS	INDEPENDENCE	MEETINGS IN 2018
Philip W. Norwood, CHAIRMAN Toni Jennings Monica McGurk Claude B. Nielsen	100% Independent	4

 

COMMITTEE RESPONSIBILITIES

 

 

 

  NOMINATING AND CORPORATE GOVERNANCE COMMITTEE

 

MEMBERS	INDEPENDENCE	MEETINGS IN 2018
Claude B. Nielsen, CHAIRMAN Toni Jennings Monica McGurk Philip W. Norwood	100% Independent	4

 

COMMITTEE RESPONSIBILITIES

 

 

 

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  REAL ESTATE INVESTMENT COMMITTEE

 

MEMBERS	INDEPENDENCE	MEETINGS IN 2018
H. Eric Bolton, Jr., CHAIRMAN James K. Lowder Thomas H. Lowder Philip W. Norwood W. Reid Sanders David P. Stockert	2/3rds Independent	6

 

COMMITTEE RESPONSIBILTIES

 

 

 

Our Board may, from time-to-time, form other committees as circumstances warrant. Such committees will have authority and responsibility as delegated by our Board.

 

Committee Charters

Each standing committee of our Board has a charter. Copies of committee charters are available upon request at no charge.

 

 

Diversity

The Board believes that diversity provides a breadth of knowledge, viewpoints and experiences that contribute to a stronger board and cultivates better decisions. The Board also believes that a diverse company will attract highly qualified associates and be appealing to residents, which will ultimately produce the best results for our shareholders.

 

The current Board represents diversity in many areas, including those listed below.

 

 

The Board believes that diversity in personal attributes such as gender, race and age are important to ensure the broadest range of ideas and perspectives are contributed to Board discussions. In addition, to be in a position to best lead MAA, the Board believes it is important that they reflect the diversity of our associates and residents. To that end, the Board is dedicated to expanding diversity in all areas, including personal attributes, and is committed to actively pursuing qualified candidates that will add diversity in areas such as race and ethnicity to the Board.

 

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2019 PROXY STATEMENT

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KEY EXPERIENCE, QUALIFICATIONS AND SKILLS SPECIFIC TO MAA

The below chart indicates the number of director nominees that satisfy each of the factors our Board has identified as being a key experience, qualification or skill relevant to our business and structure.

 

Real Estate Industry – Investment	6	Nominees	⌂⌂⌂⌂⌂⌂
Real Estate Industry – Development/Construction	6	Nominees	⌂⌂⌂⌂⌂⌂
Public Company Platforms	10	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Financial Literacy	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Capital Markets	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Strategic Planning and Oversight	12	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Risk Oversight	9	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂
Organization Leadership	12	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂
Corporate Governance	10	Nominees	⌂⌂⌂⌂⌂⌂⌂⌂⌂⌂

Individual Director Nominee Details

Individual information including the qualifications of each of the nominees for director is set forth below. Directors’ ages are given as of the date of the Annual Meeting.

 

H. ERIC BOLTON, JR.		NOT INDEPENDENT
DIRECTOR SINCE February 1997   AGE 62	MAA BOARD SERVICE Chairman Real Estate Investment Committee, Chairman	CURRENT PUBLIC DIRECTORSHIPS EastGroup Properties, Inc.   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Mr. Bolton joined MAA in 1994 as Vice President of Development and was named Chief Operating Officer in February 1996 and later promoted to President in December 1996. Mr. Bolton has served as our Chief Executive Officer since October 2001, and he became our Chairman of the Board in September 2002. Immediately prior to joining us, Mr. Bolton served as Executive Vice President and Chief Financial Officer of Trammell Crow Realty Advisors, for which he worked for more than five years. Prior to that, Mr. Bolton worked in the commercial banking industry for seven years.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Multifamily operations
⌂	Real Estate Industry – Development/Construction	⌂	REIT structure
⌂	Public Company Platforms	⌂	Advisory Board of Governors of NAREIT
⌂	Financial Literacy	⌂	Previously on Executive Committee of National Multifamily Housing Council
⌂	Capital Markets
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

RUSSELL R. FRENCH		INDEPENDENT
DIRECTOR SINCE December 2016   AGE 73	MAA BOARD SERVICE Audit Committee	CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS Post Properties, Inc. (1993-2016)
Mr. French has been a special limited partner of Moseley & Co. VI, LLC since 2007 and a Class B Partner of both Moseley & Co. VII, LLC and Moseley & Co. SBIC, LLC since 2014. In addition, Mr. French has been a member of Moseley & Co. V, LLC, the general partner of a venture capital fund, since 2000. Mr. French is a retired venture capitalist and was previously a member of Moseley & Co. III and a partner of Moseley & Co. II, positions he held for more than five years. Prior to his career as a venture capitalist, Mr. French was a securities lawyer for King & Spalding LLP for 15 years. Mr. French is an Emeritus Trustee of Emory University.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Industry and business analysis
	Real Estate Industry – Development/Construction	⌂	Long-term company performance analysis
⌂	Public Company Platforms	⌂	Other board Audit Committee service
⌂	Financial Literacy	⌂	Securities Law
⌂	Capital Markets	⌂	SEC Financial Expert
⌂	Strategic Planning and Oversight	⌂	Historical knowledge and perspective of Post Properties Inc. portfolio
⌂	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

ALAN B. GRAF, JR.		INDEPENDENT
DIRECTOR SINCE June 2002   AGE 65	MAA BOARD SERVICE Lead Independent Director Audit Committee, Chairman	CURRENT PUBLIC DIRECTORSHIPS NIKE, Inc.   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None
Mr. Graf has been the Executive Vice President and Chief Financial Officer of FedEx Corporation since 1998 and is a member of FedEx Corporation’s Executive Committee. Mr. Graf served as Executive Vice President and Chief Financial Officer for FedEx Express, FedEx’s predecessor, from 1991 to 1998. Mr. Graf joined FedEx in 1980 as a senior financial analyst and held various management positions throughout the Finance Division prior to 1991. Mr. Graf also serves on the boards of Methodist Le Bonheur Healthcare, the Indiana University Foundation and the University of Memphis.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	SEC Financial Expert
	Real Estate Industry – Development/Construction	⌂	Public board Audit Committee Chairman service
⌂	Public Company Platforms	⌂	Technology and Cyber security
⌂	Financial Literacy
⌂	Capital Markets
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

TONI JENNINGS		INDEPENDENT
DIRECTOR SINCE December 2016   AGE 70	MAA BOARD SERVICE Compensation Committee Nominating and Corporate Governance Committee	CURRENT PUBLIC DIRECTORSHIPS Brown & Brown, Inc. Next Era Energy, Inc. FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS Post Properties, Inc. (2011-2016)
Ms. Jennings currently serves as the Chairman of the Board of Jack Jennings & Sons, Inc., a commercial construction firm, a position she has held for ten years. Ms. Jennings served as and was the first female Lieutenant Governor for the State of Florida from 2003 to 2007. Prior to that, Ms. Jennings served as President of Jack Jennings & Sons, Inc. from 1982 to 2003. During this time, Ms. Jennings also served in the Florida legislature, from 1976 to 2000, including 20 years in the Florida Senate where she served the last four years as Senate President.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	Legislative and political acumen
⌂	Real Estate Industry – Development/Construction	⌂	Public board Compensation Committee service
⌂	Public Company Platforms	⌂	Historical knowledge and perspective of Post Properties Inc. portfolio
	Financial Literacy
⌂	Capital Markets
⌂	Strategic Planning and Oversight
	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

JAMES K. LOWDER		INDEPENDENT
DIRECTOR SINCE October 2013   AGE 69	MAA BOARD SERVICE Real Estate Investment Committee	CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None
Mr. Lowder has served as Chairman of the Board of The Colonial Company and its subsidiaries since 1995. Mr. Lowder is a member of the Home Builders Association of Alabama, the Greater Montgomery Home Builders Association, and serves on the Board of Directors of Alabama Power Company. James K. Lowder is the brother of Thomas H. Lowder, another one of our directors.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	Commercial real estate industry
⌂	Real Estate Industry – Development/Construction	⌂	Historical knowledge and perspective of Colonial Properties Trust portfolio
⌂	Public Company Platforms
	Financial Literacy
	Capital Markets
⌂	Strategic Planning and Oversight
	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

THOMAS H. LOWDER

INDEPENDENT

DIRECTOR SINCE October 2013   AGE 69

MAA BOARD SERVICE Real Estate Investment Committee

CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Mr. Lowder served as the Chairman of the Board of Trustees for Colonial Properties Trust from 1993 to October 2013 and as its Chief Executive Officer from 1993 to 2006 and again from 2008 to 2013. Mr. Lowder became President and Chief Executive Officer of Colonial Properties, Inc., Colonial Properties Trust’s predecessor, in 1976. Mr. Lowder also serves on the boards of Children's Hospital of Alabama, and Crippled Children's Foundation. Thomas H. Lowder is the brother of James K. Lowder, another one of our directors.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Multifamily, office and retail operations
⌂	Real Estate Industry – Development/Construction	⌂	MAA market expertise
⌂	Public Company Platforms	⌂	Management and development of geographically dispersed human capital
⌂	Financial Literacy
⌂	Capital Markets	⌂	Business operations in Southeast U.S. markets
⌂	Strategic Planning and Oversight	⌂	Historical knowledge and perspective of Colonial Properties Trust portfolio
⌂	Risk Oversight
⌂	Organization Leadership	⌂	REIT structure
⌂	Corporate Governance

MONICA McGURK

INDEPENDENT

DIRECTOR SINCE March 2016   AGE 49

MAA BOARD SERVICE Compensation Committee Nominating and Corporate Governance Committee

CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Ms. McGurk has been the Chief Growth Officer of Kellogg Company since January 2019 after serving as Chief Revenue and eCommerce Officer upon joining the company in July 2018. Previously, Ms. McGurk served as the Chief Growth Officer for Tyson Foods, Inc. until September 2017, having joined the company in 2016 and serving as Executive Vice President of Strategy and New Ventures & President of Foodservice. Prior to joining Tyson Foods, Inc., Ms. McGurk worked for The Coca-Cola Company as Senior Vice President, Strategy, Decision Support and eCommerce, North America Group from 2014 to 2016, and as Vice President, Strategy & eCommerce from 2012 to 2014. Prior to her employment with The Coca-Cola Company, Ms. McGurk served for eight months as the Chief Executive Officer of The Alumni Factor, a digital media and information services start up. From 1992 to 2012, Ms. McGurk served in a variety of roles at McKinsey & Company, a global management consulting firm, including eight years as a partner.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	Advanced analytics and consumer insights
	Real Estate Industry – Development/Construction	⌂	Digital marketing
⌂	Public Company Platforms	⌂	eCommerce
⌂	Financial Literacy	⌂	Enhanced branding
	Capital Markets	⌂	Innovation in web-based services
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

CLAUDE B. NIELSEN

INDEPENDENT

DIRECTOR SINCE October 2013   AGE 68

MAA BOARD SERVICE Compensation Committee Nominating and Corporate Governance Committee, Chairman

CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Mr. Nielsen has served as Chairman of the Board of Directors for Coca-Cola Bottling Company United, Inc. since 2003. Mr. Nielsen served as Chief Executive Officer of Coca-Cola Bottling Company United, Inc. from 1991 to his planned retirement in 2016, having been previously appointed as President in 1990. Prior to 1990, Mr. Nielsen served as President of Birmingham Coca-Cola Bottling Company. Mr. Nielsen is currently a board member of the Birmingham Business Alliance.
MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	Management and development of geographically dispersed human capital
	Real Estate Industry – Development/Construction
⌂	Public Company Platforms	⌂	Business operations in Southeast U.S. markets
⌂	Financial Literacy	⌂	Historical knowledge and perspective of Colonial Properties Trust portfolio
⌂	Capital Markets
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

PHILIP W. NORWOOD

INDEPENDENT

DIRECTOR SINCE August 2007   AGE 71

MAA BOARD SERVICE Compensation Committee, Chairman Nominating and Corporate Governance Committee Real Estate Investment Committee

CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Mr. Norwood is Principal of Haviland Capital, LLC, an investment company. Mr. Norwood served as the President and Chief Executive Officer of Faison Enterprises, Inc., a real estate development and investment company, from 1994 until his retirement in March 2013. Prior to joining Faison Enterprises, Inc., Mr. Norwood held several positions for Trammell Crow Company. Mr. Norwood is a member of several real estate associations and serves as the Chairman of the Board of Directors for Pacolet Milliken Enterprises, Inc.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Participation in real estate associations
⌂	Real Estate Industry – Development/Construction	⌂	Business operations in Southeast U.S. markets
	Public Company Platforms
	Financial Literacy
⌂	Capital Markets
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
	Corporate Governance

W. REID SANDERS		INDEPENDENT
DIRECTOR SINCE March 2010   AGE 69	MAA BOARD SERVICE Audit Committee Real Estate Investment Committee	CURRENT PUBLIC DIRECTORSHIPS Granite Point Mortgage Two Harbors Investment Corp. FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS Silver Bay Realty Trust Corp. (2016-2017)

Mr. Sanders is the President of Sanders Properties, LLC and Sanders Investments, LLC. Mr. Sanders is the Co-Founder and served as the Executive Vice President of Southeastern Asset Management, and the President of Longleaf Partners Funds, from 1975 to 2000. Prior to 1975, Mr. Sanders served as an investment officer and worked in credit analysis and commercial lending in the banking industry from 1971 to 1975. Mr. Sanders currently serves on the Board of Directors, Compensation Committee and Executive Committee for Independent Bank, serves on the Investment Committee at Cypress Realty, a limited partnership involved in commercial real estate, and is on the Advisory Board of SSM Venture Partners III, L.P.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Commercial real estate
	Real Estate Industry – Development/Construction	⌂	Acquisition and divestiture transaction analysis
⌂	Public Company Platforms	⌂	REIT structure
⌂	Financial Literacy
⌂	Capital Markets
⌂	Strategic Planning and Oversight
	Risk Oversight
⌂	Organization Leadership
⌂	Corporate Governance

GARY SHORB

INDEPENDENT

DIRECTOR SINCE May 2012   AGE 68

MAA BOARD SERVICE Audit Committee

CURRENT PUBLIC DIRECTORSHIPS None   FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS None

Mr. Shorb served as the President and Chief Executive Officer of Methodist Le Bonheur Healthcare, an integrated healthcare system that comprises a seven-hospital operation with $2 billion in annual revenues, from 2001 to his planned retirement in 2016, continuing to serve as a Senior Advisor to the Chief Executive Officer through April 2017. Mr. Shorb joined Methodist Le Bonheur Healthcare in 1990 as Executive Vice President. Before joining Methodist Le Bonheur Healthcare, Mr. Shorb served as President of the Regional Medical Center in Memphis, Tennessee for four years. Prior to his work in the healthcare industry, Mr. Shorb worked as a project engineer with Exxon and served as a Lieutenant Commander in the U.S. Navy. Mr. Shorb serves on a number of civic and non-profit boards and is currently serving as the Executive Director of The Urban Child Institute.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
	Real Estate Industry – Investment	⌂	Critical service industry expertise
	Real Estate Industry – Development/Construction	⌂	Management and development of geographically dispersed human capital
	Public Company Platforms
⌂	Financial Literacy	⌂	Business operations in Southeast U.S. markets
	Capital Markets	⌂	Non-profit leadership and oversight
⌂	Strategic Planning and Oversight
⌂	Risk Oversight
⌂	Organization Leadership
	Corporate Governance

DAVID P. STOCKERT

NOT INDEPENDENT

DIRECTOR SINCE December 2016   AGE 57

MAA BOARD SERVICE Real Estate Investment Committee

CURRENT PUBLIC DIRECTORSHIPS Duke Realty Corporation FORMER PUBLIC DIRECTORSHIPS WITHIN PAST 5 YEARS Post Properties, Inc. (2002-2016)

Mr. Stockert served as Chief Executive Officer and President of Post Properties, Inc. from 2002 to 2016 and as its President and Chief Operating Officer from 2001 to 2002. Prior to joining Post, Mr. Stockert served as Executive Vice President of Duke Realty Corporation from 1999 to 2000, and as Senior Vice President and Chief Financial Officer of Weeks Corporation from 1995 to 1999. Prior to joining Weeks Corporation, Mr. Stockert was an investment banker and a certified public accountant. Mr. Stockert currently serves on multiple civic and charitable organizations in the Atlanta area.

MAA KEY EXPERIENCE, QUALIFICATIONS AND SKILLS		OTHER EXPERIENCE AND EXPERTISE
⌂	Real Estate Industry – Investment	⌂	Multifamily operations
⌂	Real Estate Industry – Development/Construction	⌂	MAA market expertise
⌂	Public Company Platforms	⌂	Management and development of geographically dispersed human capital
⌂	Financial Literacy
⌂	Capital Markets	⌂	Business operations in Southeast U.S. markets
⌂	Strategic Planning and Oversight	⌂	Historical knowledge and perspective of Post Properties Inc. portfolio REIT structure
⌂	Risk Oversight	⌂
⌂	Organization Leadership	⌂	Digital marketing
⌂	Corporate Governance

Material Relationships

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None of our non-management directors had relationships with us during 2018 that the Board determined were material.

 

Indebtedness Of Management

---

None of our NEOs or directors were indebted to us during 2018.

 

Compensation Committee Interlocks And Insider Participation

---

The Compensation Committee consists of Philip W. Norwood, as Chairman, Toni Jennings, Monica McGurk and Claude B. Nielsen. None of the members of the Compensation Committee is or was an officer or associate of the company. During 2018, none of our NEOs served as a director or member of the Compensation Committee of any other entity whose executive officers served on our Board or Compensation Committee.

 

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2019 PROXY STATEMENT

30

DIRECTOR COMPENSATION

Compensation Philosophy

---

Upon recommendations from the Compensation Committee, the Board sets compensation for our non-management directors. Directors who are associates of MAA are not compensated for serving on the Board.

 

The Board believes that the approach towards non-management director compensation should reflect the values used in setting executive compensation in that it should be generally in line with the median compensation offered at comparable peer companies and reflect a mix of both cash and equity compensation to ensure alignment with our shareholders. The consultant hired by the Compensation Committee to assist with setting executive compensation is also engaged to benchmark and recommend appropriate compensation for our non-management directors.

 

In considering their recommendation to the Board on non-management director compensation, the Compensation Committee also considers other factors such as the levels of responsibility and liability assumed by directors, time commitment involved, the level of expertise and skill the Board wishes to attract and retain, and the additional responsibilities associated with serving on committees, as a chairman of a committee or as the Lead Independent Director.

 

2018 Compensation Program

The compensation program in place for non-management directors in 2018 was unchanged from the program that was set in 2017 to bring the total compensation up to the then median level of MAA’s comparative peer group for compensation.

 

ANNUAL CASH FEES

---

The annual cash fees indicated below were paid in quarterly installments following our routine quarterly Board meetings. Committee chairmen do not receive their respective committee’s service fee in addition to their chairman fee.

 

$	65,000	Board service fee
$	17,500	Audit Committee Chairman fee
$	7,500	Audit Committee service fee
$	15,000	Compensation Committee Chairman fee
$	6,250	Compensation Committee service fee
$	10,000	Nominating and Corporate Governance Chairman fee
$	3,750	Nominating and Corporate Governance service fee
$	6,250	Real Estate Investment Committee service fee
$	20,000	Lead Independent Director fee

 

GRANTS OF SHARES OF RESTRICTED STOCK

---

Shares of restricted stock are granted following election to the Board and vest at the end of the director’s then-current term. Directors who choose to leave the Board before their term is completed for reasons other than retirement, disability or death forfeit their granted shares of restricted stock.

 

$

125,000

Value of annual grant

Number of shares issued was based on the closing stock price on May 22, 2018, the day the director was elected to the Board by shareholders.

DEFERRED COMPENSATION

---

In accordance with our Non-Qualified Deferred Compensation Plan For Outside Company Directors, directors have the option of having the comparable value of phantom stock issued into a deferred compensation account in lieu of receiving their annual cash fees and/or their grant of shares of restricted stock. If directors choose to defer their compensation in this manner, the compensation is paid out in two annual installments either in shares of our common stock or in the cash equivalent, at the director’s election, beginning in the year following the year in which the director retires from the Board.

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CAPS ON DIRECTOR COMPENSATION

---

Under the Second Amended and Restated MAA 2013 Stock Incentive Plan approved by shareholders at the 2018 Annual Meeting of Shareholders, the total value of cash paid to a director in one calendar year cannot exceed $250,000. In addition, the total value of the equity awards granted to a director in one calendar year cannot exceed $400,000.

 

Director Compensation Table

---

The table below represents the compensation earned by each non-employee director during 2018.

 

		Fees Earned				Stock				All Other
		or Paid in Cash				Awards				Compensation				Total
Name		($) (1)				($) (2)				($) (3)				($)
Russell R. French (4)		$	72,500			$	124,954			$	4,777			$	202,231
Alan B. Graf, Jr. (4)		$	102,500			$	124,954			$	4,777			$	232,231
Toni Jennings		$	75,000			$	124,954			$	4,777			$	204,731
James K. Lowder		$	72,188			$	124,954			$	4,777			$	201,919
Thomas H. Lowder (4)		$	71,250			$	124,954			$	4,777			$	200,981
Monica McGurk (4)		$	75,000			$	124,954			$	4,777			$	204,731
Claude B. Nielsen		$	81,250			$	124,954			$	4,777			$	210,981
Philip W. Norwood (4)		$	90,000			$	124,954			$	4,777			$	219,731
W. Reid Sanders (4)		$	78,750			$	124,954			$	4,777			$	208,481
Gary Shorb (4)		$	72,500			$	124,954			$	4,777			$	202,231
David P. Stockert (4)		$	71,250			$	124,954			$	4,777			$	200,981

PROPOSAL 2: ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

 

	MATTER TO BE VOTED Advisory (non-binding) vote to approve NEO compensation as disclosed in this Proxy Statement.   Section 14A of the Exchange Act requires that we provide our shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our NEOs. As such, shareholders are asked to approve the compensation paid to our NEOs as disclosed in this Proxy Statement pursuant to the SEC’s compensation disclosure rules, including the disclosures in the Compensation Discussion and Analysis and Executive Compensation Tables sections of this Proxy Statement.
	VOTE REQUIRED This proposal will be approved if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal.   The vote under this proposal is advisory, and therefore, not binding on us, our Board or the Compensation Committee. However, our Board, including the Compensation Committee, values the opinions of our shareholders and, to the extent there is a significant vote against the NEO compensation as disclosed in this Proxy Statement, the Board will consider what actions may be appropriate.
	IMPACT OF ABSTENTIONS Abstentions will have no legal effect on whether this proposal is approved.   IMPACT OF BROKER NON-VOTES Broker non-votes will have no legal effect on whether this proposal is approved.
	BOARD RECOMMENDATION Our Board recommends a vote FOR the compensation of our NEOs as disclosed in this Proxy Statement.

 

As described in detail under the heading Compensation Discussion and Analysis in this Proxy Statement, we seek to closely align the interests of our NEOs with the interests of our shareholders. Our compensation programs are designed to reward for the achievement of individual, functional unit and company strategic goals, as well as long-term shareholder value creation, while at the same time avoiding the encouragement of unnecessary or excessive risk-taking.

 

The vote on this proposal is not a vote on our general compensation policies, compensation of the Board, or our compensation policies as they relate to risk management. It is also not a vote intended to address any specific element of compensation. The vote relates to the compensation of our NEOs as described in this Proxy Statement in accordance with the compensation disclosure rules of the SEC. While the vote is an advisory, non-binding vote, our Board values shareholder input on executive compensation and the Compensation Committee will consider the results of this vote in determining future compensation. We conduct this vote on an annual basis, and the next such vote will take place with our 2020 Annual Meeting of Shareholders.

 

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2019 PROXY STATEMENT

33

            

 

      

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis section provides a detailed discussion of our executive compensation. It begins with our compensation philosophy and objectives, then describes the process we undertake to set executive compensation including the factors we consider when making compensation decisions. We then discuss the structure and individual elements of our executive compensation program and review the compensation awarded to our CEO and other NEOs in 2018.

 

Throughout this Compensation Discussion and Analysis section, we have included our rationale for our executive compensation decisions and how we believe the compensation set for our executives helps MAA achieve the strategic vision of the Board and supports the long-term best interests of our shareholders.

 

To help you navigate the discussion, following is a detailed outline of the topics covered in this Compensation Discussion and Analysis section.

 

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Compensation Discussion And Analysis

Table Of Contents

TOTAL DIRECT COMPENSATION APPROACH

Philosophy And Objectives

The primary objective of our executive compensation program is to drive key business and strategic goals over various time frames in support of long-term shareholder value creation. We also seek to provide fair and competitive pay opportunities that align with both overall MAA and individual performance, shareholder interests and sound corporate governance practices. The Compensation Committee, and the Board in regards to the CEO, believes that to implement this philosophy and create a balanced and reasonable compensation package in the best long-term interests of our shareholders, the below objectives must be considered and reflected in the program.

 

 

 

 

 

 

 

 

 

The Board does not apply a specific weight or otherwise necessarily value one individual concept over another as the concepts deemed to be of most relevance may change over time reflecting changing compensation environments and MAA’s strategic initiatives. The numbers have been provided to assist in understanding how our compensation objectives are integrated in the structure and elements of our executive compensation package as discussed throughout the remainder of the Total Direct Compensation Approach section of this Proxy Statement.

 

Decision Making Process

The Compensation Committee is responsible for the compensation of executive management, both in terms of establishing the form and opportunities for each executive and in overseeing the actual awards made to each executive under our compensation plans. In regards to the CEO, the Compensation Committee makes recommendations to our Board and the non-management directors vote to approve CEO compensation.

2019 PROXY STATEMENT

36

The Compensation Committee considers many factors and, from time-to-time, obtains input related to certain aspects of executive compensation from the non-management directors as well as other non-Board sources, including external consultants. The committee does not have a pre-defined framework that determines which factors may be more or less important, and the emphasis placed on any given factor may vary both among the respective executives and over time.

 

Ultimately, it is the Compensation Committee’s judgment of all factors it deems relevant at any given time that forms the basis for determining the executive compensation set for our CEO and other NEOs.

 

SAY ON PAY

The Compensation Committee carefully considers the results of the vote by shareholders to approve executive compensation. Due to the long-term nature of some compensation elements, the committee also feels it is important to obtain shareholder feedback on a routine, frequent basis. As such, the Board, on behalf of the Compensation Committee, has always recommended that the frequency of the vote to approve executive compensation be done on an annual basis.

 

The Compensation Committee considered the 94.9% favorable result of the shareholder vote on executive compensation from the 2017 Annual Meeting of Shareholders when establishing the 2018 executive compensation packages, and the Compensation Committee believes the Say on Pay vote at the 2018 Annual Meeting of Shareholders was an endorsement by shareholders of our overall total compensation package and approach for our NEOs.

 

93.6% APPROVAL FOR Say on Pay in 2018

Annual Say on Pay Shareholder Vote APPROVED EVERY YEAR Since Introduced in 2011

Say on Pay AVERAGE APPROVAL RATE 96.3% since 2011

ROLE OF COMPENSATION CONSULTANT

The Compensation Committee has the power and authority to hire outside advisors or consultants to assist the committee in fulfilling its responsibilities, at our expense and upon terms established by the Compensation Committee. The Compensation Committee routinely hires external consultants to assist in reviewing our executive compensation program, establishing an appropriate benchmark comparator group, benchmarking plan design, mix of compensation elements and level of compensation opportunities, and evaluating risks associated with our executive compensation program.

 

After our merger with Post Properties, Inc. in 2016, the Compensation Committee engaged Semler Brossy to consult on executive compensation for 2017. Based on Semler Brossy’s review, among other considerations, the Compensation Committee established a two-year plan to address the then determined gap between our executive compensation packages and the median of our comparator peer group. As such, a compensation consultant was not hired in 2017 to advise on the executive compensation package for 2018; however, the Compensation Committee did consider whether other factors warranted revisions to the two-year plan in establishing our 2018 executive compensation package.

 

The Compensation Committee subsequently hired Pearl Meyer & Partners, LLC in 2018 to assist with the review and development of the executive compensation program for 2019.

 

Compensation Consultant Independence

Prior to the retention of a compensation consultant or any other external advisor, and from time-to-time as the Compensation Committee deems appropriate, the Compensation Committee assesses the independence of such advisor from management, taking into consideration all factors relevant to such advisor’s independence, including the factors specified in NYSE listing standards.

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The Compensation Committee assessed the independence of both Semler Brossy and Pearl Meyer & Partners, LLC, taking into account the factors listed below.

 

Both Semler Brossy and Pearl Meyer & Partners, LLC provided the Compensation Committee with appropriate assurances and confirmation of their independent status pursuant to the factors indicated above. The Compensation Committee believes that Semler Brossy and Pearl Meyer & Partners, LLC were independent throughout their service to the committee and that there was no conflict of interest between either firm and the Compensation Committee.

 

MARKET BENCHMARKING CONSIDERATIONS

The Compensation Committee considers benchmark information when establishing and measuring the competitiveness of various aspects of our executive compensation packages, including the items listed below.

 

While we believe that the type and levels of compensation opportunities we provide should be competitively reasonable and appropriate for our business needs and circumstances, the Compensation Committee’s approach is to consider competitive compensation practices amongst other relevant factors rather than establishing compensation at specific benchmark percentiles. This enables us to respond to changes in the labor market and provides us with flexibility in maintaining and enhancing the engagement, focus and motivation of our executives.

 

Broadly, however, unless otherwise warranted by performance, the Compensation Committee does not believe it is reasonable or appropriate for Target executive compensation to be materially outside of comparative benchmark ranges (either above the 75^th percentile or below the 25^th percentile) whether in terms of individual elements of the compensation program or overall total Target executive compensation.

 

Compensation Comparator Group

The Compensation Committee believes it is critical to select the appropriate comparator group for benchmarking purposes. In conjunction with consulting with our Compensation Committee to set 2017 executive compensation after our merger with Post Properties, Inc., Semler Brossy performed a peer screen, reviewing various metrics such as enterprise value, annual revenue, number of employees, number of properties and number of units of all publicly traded REITs (excluding highly focused sub-industries such as forest and casino management, companies that exhibited significant, sustained financial distress, and companies with clear pay-related governance fouls). The resultant peer group consisted of six multifamily REITs, representing MAA’s sub-industry and comparable to MAA in operational structure and human capital needs, and 12 additional REITs of similar size and metric statistics to MAA.

 

Upon review by the Compensation Committee, two companies were removed from the proposed peer group; one which was identified as having pay governance issues related to being a consistently high payer which the Compensation Committee did not feel was in line with its philosophy on executive compensation, and one with a unique operating model unaligned with MAA’s structure.

2019 PROXY STATEMENT

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The final comparator group adopted by the Compensation Committee for review of executive compensation for 2017, which remained in place as part of the two-year plan put in place encompassing executive compensation for 2018, consisted of the companies listed below.

Semler Brossy provided the final results of their review at the December 2016 Compensation Committee meeting and the Compensation Committee considered Semler Brossy’s review in setting the executive compensation programs for 2017 and 2018.

 

Semler Brossy assessed Target total pay levels against the final peer group, as well as other available market data, specifically reviewing salary, Target annual cash compensation (salary plus Target short-term incentives) and Target total direct compensation (salary plus Target short-term and long-term incentives). Semler Brossy reported that salary, Target annual cash and Target total compensation opportunities for our CEO and each of our other NEOs fell well below the median of the peer group, with Target total compensation falling 23% or more below the median, well outside the competitive range identified by Semler Brossy (+-15% to median) to attract and retain talent and well below targeted pay positioning per MAA’s compensation philosophy. Furthermore, Semler Brossy noted that while shortfalls were present in both the cash and equity components of compensation for our CEO and each of our other NEOs, most of the shortfall was the equity component.

 

Overall, given the change in size and complexity of MAA and the expanded scope of responsibility of our CEO and each of our other NEOs following the merger with Post Properties, Inc., the Compensation Committee believed these results indicated that compensation was generally lagging, in relation to both cash and equity incentives. As a result, and after consideration of other factors, the Compensation Committee felt it was appropriate to adopt increases in base salaries and to increase the total award opportunity as a percent of salary available under the LTIP in 2017; however, given the size of the base salary increase believed warranted by the Compensation Committee, the committee determined to split the increase across 2017 and 2018.

 

ROLE OF EXECUTIVE MANAGEMENT

While our CEO does participate in general meetings of the Compensation Committee and provides input on compensation decisions related to the other NEOs, he does not participate in executive sessions of the Compensation Committee nor does he participate in any discussions determining his own compensation. Annually, upon request from the Compensation Committee, our CEO provides the committee with data pertinent to his and the other executive’s performance and compensation. Generally this information pertains to the achievement of individual functional goals.

 

At the end of any incentive plan measurement period, our CEO presents base results of the plan for the Compensation Committee’s review and, if necessary, further evaluation and/or adjustment. The base results are calculated and prepared by our Chief Ethics and Compliance Officer and Corporate Secretary according to the underlying plan documents and then reviewed by the Director of Finance prior to presentation to the Compensation Committee.

 

All incentive plans and any payments made thereunder are developed, adopted and awarded by the Compensation Committee. All compensation related to our CEO is recommended by the Compensation Committee to our full Board, which ultimately has responsibility for approving CEO compensation.

 

RISK CONSIDERATIONS

The Compensation Committee annually evaluates the risks involved with all of our compensation programs company-wide, including risks specifically associated with our executive compensation program, and strives to design total compensation to mitigate those risks without diminishing the incentive nature of the compensation. Following its 2018 evaluation, the Compensation Committee determined that our compensation programs do not create risks that are reasonably likely to have a material adverse impact on us.

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Below are specific design factors which the Compensation Committee believes help to discourage undue risk taking and therefore considers in determining the overall risk level of our executive and company-wide compensation programs.

2019 PROXY STATEMENT

40

We believe that any risks arising from our compensation policies and practices for our associates, including our NEOs, are not reasonably likely to have a material adverse effect on the company. Furthermore, the Compensation Committee believes that the nature of the various elements of executive compensation does not encourage management to assume excessive risks.

 

COMPENSATION GOVERNANCE CONSIDERATIONS

In addition to the risk mitigating features and actions discussed under Risk Considerations, the Board has also established several corporate governance practices which are specifically related to executive compensation and also help to mitigate potential risks.

 

 

 

 

In addition to the Board governance policies listed above, the Compensation Committee has affirmatively determined NOT to implement the below compensation practices as they are generally negatively viewed within industry best practices and the Board does not believe they are in the best interest of our shareholdes at this time.

In addition to our compensation philosophy and objectives, shareholder feedback, input from the compensation consultant, benchmarking data and compensation risk factors, the Compensation Committee also takes into account the following considerations when determining executive compensation packages.

The Compensation Committee does not generally consider prior compensation in making compensation decisions, believing that compensation should reflect the current environment of the factors being considered.

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The weight of any one factor or consideration may vary among executives and may change over time. The Compensation Committee designs our executive compensation program to reflect all factors and considerations within the objectives of our compensation philosophy.

 

TAX AND ACCOUNTING IMPLICATIONS OF COMPENSATION

Section 162(m) of the Code historically limited the tax deductibility of annual compensation paid by a publicly held corporation to its “covered employees,” being its principal executive officer or any of its three other most highly compensated executive officers (other than its principal financial officer), to $1 million, unless the compensation qualified as performance-based compensation under Section 162(m). Under the Tax Cuts and Jobs Act of 2017, this “performance-based” exception was eliminated, and the definition of “covered employees” generally was expanded to cover all named executive officers, including the principal financial officer. These new rules generally apply to taxable years beginning after December 31, 2017, but do not apply to compensation provided pursuant to a written binding contract in effect on November 2, 2017 that is not modified in any material respect after that date.

 

Since MAA qualifies as a REIT under the Code and is generally not subject to Federal income taxes, we believe the payment of compensation that may exceed the deduction limit under Section 162(m) would not have a material adverse consequence to us, provided we continue to distribute 100% of our taxable income. If we make compensation payments subject to Section 162(m) limitations on deductibility, we may be required to make additional distributions to shareholders to comply with our REIT distribution requirements and eliminate our U.S. federal income tax liability or, alternatively, a larger portion of shareholder distributions that would otherwise have been treated as a return of capital may be subject to federal income tax expense as dividend income. Any such compensation allocated to MAA’s taxable REIT subsidiaries whose income is subject to federal income taxes would result in an increase in income taxes due to the inability to deduct such compensation. Although we are mindful of the limits imposed by Section 162(m), even if it is determined that Section 162(m) applies or may apply to certain of our compensation packages, we have reserved, and will continue to reserve, the right to structure our compensation packages and awards in a manner that may exceed the limitation on deduction imposed by Section 162(m).

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Program Structure And Governance

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2018 TOTAL DIRECT COMPENSATION STRUCTURE

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 The general elements and structure of our 2018 executive compensation program were unchanged from the 2017 executive compensation program shareholders approved at the 2018 Annual Meeting of Shareholders.

 

An overview of the 2018 total direct compensation program for executive management is provided below. This chart should be read in conjunction with the following discussion, which provides additional details of the three elements of our 2018 compensation program: base salary, AIP and LTIP.

 

 

Base Salary

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The Compensation Committee pays base salaries to attract talented executives and to provide a fixed component of cash compensation. Because several other elements of compensation are driven by base salary, the Compensation Committee is careful to set what it believes is the appropriate level of base salary.

 

 

AIP

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The AIP incentivizes executives to achieve our annual goals. It is a mix of both overall company performance, in the form of a MAA financial metric , and individual functional goals which include quantifiable metrics associated with the respective executive’s functional area and leadership responsibilities.

 

Specific goals are set at the beginning of the year by the Compensation Committee, and vary both by executive and by year in order to meet our then current annual strategic goals. Unlike the MAA financial metric, the individual functional goals are capped at Target. Examples of topics for which individual functional goals related to management, oversight or initiatives may be set for each NEO are listed below.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The applicable AIP financial metric, which for 2018 is FFO per diluted common share and unit, or per Share, may be set in the plan to adjust for the impact of accounting regulations or one-time events that the Compensation Committee feels do not reflect the true ongoing operations of MAA or believes may inadvertently divert executives from MAA’s overall goals. For example, for the 2018 AIP, the FFO per Share metric excludes both the non-cash mark-to-market accounting impact of an embedded derivative in the preferred shares we were required to issue in the Post Properties, Inc. merger, as well as the merger and integration expenses associated with the Post Properties, Inc. merger. The Compensation Committee felt these items were related to positioning for long-term growth and should not impact the performance incentives for executive management.

 

 The scale for the MAA financial metric allows for a range of results and payouts tied to our publically-disclosed range of guidance (taking into account the adjustments described above) to incentivize management to meet market expectations. The Target level is assigned to the mid-point of the range, with the Maximum and Threshold levels representing the top and bottom of the range, respectively. Performance between levels is straightline interpolated. No award is earned below the Threshold level and awards are capped at the Maximum level.

 

	Percent of Opportunity Earned
MAXIMUM	100%	Top of MAA guidance range
TARGET	67%	Midpoint of MAA guidance
THRESHOLD	25%	Bottom of MAA guidance range

 

FFO per Share is a generally accepted measure of overall performance in the REIT industry because it excludes depreciation expense of real estate assets which is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. The Compensation Committee feels that FFO per Share is a good measure of actual operating performance.

 

 To allow for consideration of other unusual events, the Compensation Committee has the ability to modify an award, either for all or individual executives, up or down by 25% as long as the final award is not greater than the original cap set in the plan. This both discourages executives from maximizing their personal incentive to MAA’s detriment and protects the executives if strategic directives change during the year requiring their focus to move away from the individual functional goals originally set by the Compensation Committee.

 

 

 Executives can elect to receive all or any portion of their AIP award in shares of restricted stock in lieu of cash. If this election is made, the executive receives shares of restricted stock equivalent to 125% of the value of the amount of the award the executive would have otherwise received in cash. The shares of restricted stock are issued when the Compensation Committee approves awards under the AIP and vest equally over three years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date. If elected, the number of shares of restricted stock issued is based on the closing stock price on the day the award is granted, allowing the executive to benefit from the increase in share value during the vesting period for the shares.

 

LTIP

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 The LTIP incentivizes executives to balance annual performance with our long term goals. It is a mix of both overall company performance, in the forms of a MAA financial metric and three-year shareholder return, and a continued service in good standing requirement. All awards under the LTIP are made in shares of restricted stock based on MAA’s closing stock price on the grant date of the plan, allowing the executive to benefit from the increase in share value during the respective performance and vesting periods for the shares.

 

 The LTIP MAA financial metric for 2018 is the same financial metric used in our 2018 AIP, FFO per Share adjusted to exclude both the non-cash accounting impact of the embedded derivative in the preferred shares we were required to issue in the Post Properties, Inc. merger, as well as the merger and integration expenses associated with the Post Properties, Inc. merger. However, as compared to the AIP, the LTIP used a slightly adjusted Target payout level as indicated below. Performance between levels is straightline interpolated. No award is earned below the Threshold level and awards are capped at the Maximum level.

 

	Percent of Opportunity Earned		PERFORMANCE PERIOD: 2018   VESTING PERIOD: Any earned awards vest equally over two years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date.
MAXIMUM	100%	Top of MAA guidance range
TARGET	65%	Midpoint of MAA guidance
THRESHOLD	25%	Bottom of MAA guidance range

 

2019 UPDATE: The Compensation Committee determined to remove the duplicative nature of utilizing the same metric in both the AIP and LTIP and has established a different MAA financial metric for the 2019 LTIP.

 

 While the MAA financial metric is classified as short term in the AIP because executives can elect to receive a cash payment at the end of the one year performance period, the Compensation Committee classifies this metric as part of the long-term compensation under the LTIP due to the combined length of time of the performance and vesting periods, as awards are required to be issued in shares of restricted stock.

 

 In order to appropriately judge market performance within our own industry, relative three-year TSR is measured related to the SNL U.S. REIT Multifamily index. Target level is set to match the performance of the index. The Compensation Committee believes it is appropriate to allow for a level of payout below the Target level to address factors outside of executive management’s control and above the Target level to reward superior performance. Performance between levels is straightline interpolated. No award is earned below the Threshold level and awards are capped at the Maximum level.

 

	Percent of Opportunity Earned		PERFORMANCE PERIOD: 2018 - 2020   VESTING PERIOD: Any earned awards vest immediately upon issuance (after performance period).
MAXIMUM	100%	400 basis points above index
TARGET	65%	SNL US REIT Multifamily Index
THRESHOLD	25%	300 basis points below index

 

 

To eliminate the impact that the volatility of any one individual market day may have on the results, closing stock price and index averages for the respective months of December are used as the beginning and end values for the TSR calculations.

 

 The Compensation Committee recognizes that for various reasons there are times when the performance of any one or two metrics may not fully reflect the true performance of a company, particularly if it is going through a period of investing for the future. For this reason, the Compensation Committee also believes it is appropriate to utilize service-based restricted shares as a retention tool. The Compensation Committee also believes that these shares help ensure equity ownership by our NEOs, aligning them with the long-term interests of our shareholders. The restricted shares granted in 2018 vest equally over five years on the anniversary of issuance, dependent upon continued employment in good standing through each vest date.

 

The Compensation Committee classifies these service shares as part of the long-term fixed compensation for executive management due to the length of the vesting period. However, because the shares are issued at the beginning of the plan period, the shares also contain a performance aspect as the ultimate value the executive receives will be impacted by changes in MAA’s stock price in the market before vesting.

 

Overall, the Compensation Committee believes the above elements provide a mix of cash and equity opportunities, reward individual effort and overall company performance, balance managing our needs for today while preparing for the future, align executive management’s interests with those of our shareholders and are financially sustainable.

 

2018 Target Compensation

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As discussed in Findings of Compensation Consultant, Target total pay for each NEO as compared to the compensation comparator group was found to be at least 23% below median following our merger with Post Properties, Inc. in 2016. Given the gap to market pay and considering the expanded scope of responsibilities of our CEO and each of the other NEOs following the merger, the Compensation Committee determined to increase executive salaries by 20% over a two year period. The Compensation Committee also took note that while shortfalls were present in both the cash and equity components of compensation for all of the NEOs, a majority of the shortfall was associated with the equity component. To fuel increased share ownership and further strengthen alignment with the financial interests of our shareholders, the Compensation Committee also raised the total opportunity under the LTIP in 2017. The mix of opportunities assigned to each metric in both the AIP and LTIP were unchanged in 2017 and no increase to the total opportunity in the AIP was made.

 

With respect to 2018 executive compensation, the Compensation Committee considered whether any factors had occurred since setting the two-year plan in place which would influence 2018 compensation. The Compensation Committee determined it was appropriate to move forward with the second planned increase to executive base salaries. No changes to opportunities under the AIP or LTIP were made as, by the nature of the plans, the salary increase also increases the value of the Target opportunity without increasing the percent of salary opportunity.

 

The below table provides the opportunities at the Target levels for each NEO under the AIP and LTIP in 2018, expressed as percentages of base salary.

 

			AIP TARGET									LTIP TARGET
					Functional		Total											Total
			FFO		Goals		Cash		Equity (1)			3-Yr TSR		FFO		Service		Equity
BOLTON CEO			168%		N/A		168%	OR	209%			146%		88%		90%		324%
GRIMES COO			44%		134%		178%	OR	223%			114%		68%		70%		252%
CAMPBELL CFO			75%		38%		113%	OR	141%			114%		68%		70%		252%
DELPRIORE GC			75%		38%		113%	OR	141%			98%		59%		60%		216%

(1)

Reflects the 25% premium if the entire award is paid in shares of restricted stock.

 

The Compensation Committee felt it is appropriate to tie 100% of our CEO’s opportunity under the 2018 AIP to the FFO per Share financial metric, as it is a key financial result focused on by analysts and investors in the REIT industry.

 

 

The below table provides the Target values of all direct compensation plans in place for each NEO during 2018. As noted above, increases in the value of 2018 Target compensation under the AIP and LTIP from 2017 Target compensation are driven solely by the increase to base salary. The Target awards under the AIP are represented as cash which is in line with the actual elections made by the NEOs.

 

		2018 TARGET DIRECT COMPENSATION
																																						TOTAL
																										LTIP SHARES OF																SHARES OF
		BASE SALARY												AIP CASH												RESTRICTED STOCK																RESTRICTED
		2017				2018				Change				2017				2018				Change				2017				2018				Change				CASH				STOCK
BOLTON CEO		$	704,000			$	775,000				10	%		$	1,179,200			$	1,298,125				10	%			23,938				26,427				10	%		$	2,073,125				26,427
GRIMES COO		$	451,000			$	496,100				10	%		$	803,772			$	884,149				10	%			11,927				13,157				10	%		$	1,380,249				13,157
CAMPBELL CFO		$	440,000			$	484,000				10	%		$	496,650			$	546,315				10	%			11,636				12,835				10	%		$	1,030,315				12,835
DELPRIORE GC		$	429,000			$	471,900				10	%		$	484,234			$	532,658				10	%			9,723				10,727				10	%		$	1,004,558				10,727

 

The Target values set by the Compensation Committee for 2018 provided the following mix of compensation elements for our NEOs, which the Compensation Committee determined was an appropriate balance of all factors considered.

 

 

 

2018 Compensation Caps

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The following schedule provides the maximum direct compensation opportunities realizable, or caps, for over-performance to Target under the 2018 executive compensation program set by the Compensation Committee for our CEO and other NEOs.

 

						MAXIMUM OR CAPPED DIRECT OPPORTUNITIES - 2018 EXECUTIVE COMPENSATION PROGRAM
																																														TOTAL
										AIP																LTIP																								SHARES OF
														FUNCTIONAL								PERCENT																				PERCENT								RESTRICTED
						SALARY				FFO				GOALS				TOTAL				OF SALARY				SERVICE				FFO				3-YR TSR				TOTAL				OF SALARY				CASH (1)				STOCK (1)
BOLTON CEO						$	775,000			$	1,937,500				N/A			$	1,937,500				250	%			7,341				11,011				18,353				36,705				450	%		$	2,712,500			36,705
GRIMES COO						$	496,100			$	327,426			$	664,774			$	992,200				200	%			3,655				5,482				9,137				18,274				350	%		$	1,488,300			18,274
CAMPBELL CFO						$	484,000			$	544,500			$	181,500			$	726,000				150	%			3,565				5,348				8,914				17,827				350	%		$	1,210,000			17,827
DELPRIORE GC						$	471,900			$	530,888			$	176,962			$	707,850				150	%			2,980				4,470				7,450				14,900				300	%		$	1,179,750			14,900

(1)

Assumes all NEOs elect to receive AIP award as cash in lieu of shares of restricted stock.

 

 

2018 DIRECT EXECUTIVE COMPENSATION

2018 MAA Performance

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The Compensation Committee believes it is important that executive compensation reflect the overall performance and health of the company including both annual financial measures and long term shareholder return, and has therefore tied a majority of our CEO’s and each of the other NEO’s compensation to performance measures. Below is a review of MAA’s performance during 2018. You can find more details in our Annual Report on Form 10-K filed with the SEC on February 21, 2019.

 

NET INCOME AND FFO

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For the year ended December 31, 2018, net income available for MAA common shareholders was $219.2 million, or $1.93 per diluted common share, compared to $324.7 million, or $2.86 per diluted common share, for the year ended December 31, 2017. Results for the year ended December 31, 2018 included $2.6 million, or $0.02 per diluted common share, of non-cash mark-to-market expense related to the embedded derivative in the preferred shares and $4.5 million, or $0.04 per diluted common share, of gains related to the sale of real estate assets. Results for the year ended December 31, 2017 included $8.8 million, or $0.08 per diluted common share, of non-cash mark-to-market income related to the embedded derivative in the preferred shares and $127.4 million, or $1.12 per diluted common share, of gains related to the sale of real estate assets.

 

For the year ended December 31, 2018, FFO was $712.7 million, or $6.04 per Share, compared to $699.6 million, or $5.94 per Share, for the year ended December 31, 2017. Results for the year ended December 31, 2018 included $2.6 million, or $0.02 per Share, of non-cash mark-to-market expense related to the embedded derivative in the preferred shares. Results for the year ended December 31, 2017 included $8.8 million, or $0.07 per Share, of non-cash mark-to-market income related to the embedded derivative in the preferred shares.

 

FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with GAAP) excluding extraordinary items, asset impairment and gains or losses on disposition of operating properties, plus net income attributable to noncontrolling interest, depreciation and amortization of real estate assets, and adjustments for joint ventures to reflect FFO on the same basis. Because noncontrolling interest is added back, FFO, when used in this document, represents FFO attributable to MAA.

 

While MAA's definition of FFO is in accordance with National Association of Real Estate Investment Trust's definition, it may differ from the methodology for calculating FFO utilized by other companies and, accordingly, may not be comparable to such other companies. FFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. MAA believes that FFO is helpful in understanding operating performance in that FFO excludes depreciation and amortization of real estate assets. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies. A reconciliation of FFO to net income available for MAA common shareholders is set forth in the NON-GAAP Financial Measures section of this Proxy Statement.

 

2018 LTIP And 2018 AIP FFO

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OTHER HIGHLIGHTS

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Additional performance achievements along with other highlights for 2018 are listed below.

 

 

RETURNS TO SHAREHOLDERS

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Dividends

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Highlights of MAA’s common dividend history include the items listed below.

 

 

Annual Dividend Paid per Common Share

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TSR

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We have consistently returned significant value to shareholders over the long term. We measure that value based on absolute and relative TSR results. TSR is a measure of the performance of shares of stock over time. It combines share price appreciation and the reinvestment of dividends paid to show the total return to shareholders expressed as an annualized percentage. The below chart represents our annualized three-year TSR as compared to the SNL U.S. REIT Multifamily Index, as calculated under the terms of our 2016 LTIP.

 

Annualized 2016 LTIP Three Year TSR (1)

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The following chart shows how a $100 investment in MAA common stock on December 31, 2013 would have grown to $190.58 on December 31, 2018, with dividends reinvested quarterly. The chart also compares the total shareholder return on our common stock to the same investment in the S&P 500 Index and the FTSE NAREIT Equity REIT Index.

 

Five Year Cumulative Total Returns

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2018 Direct Executive Compensation Realized

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In March 2019, the Compensation Committee reviewed the performance of relevant metrics related to outstanding incentive plans for our executive officers in order to determine and make awards thereunder. The following discussion reviews the total compensation realized by our CEO and other NEOs for 2018.

 

2018 DIRECT COMPENSATION PLANS 

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As noted in the 2018 MAA Performance section of this Proxy Statement, our FFO per Share as adjusted under the 2018 AIP and 2018 LTIP (to exclude the non-cash mark-to-market impact of the embedded derivative in preferred shares we were required to issue in the Post Properties, Inc. merger, as well as merger and integration expenses related to the Post Properties, Inc. merger), was $0.07 above the midpoint of our 2018 FFO per Share guidance, as adjusted to exclude these same items.

 

 

 

 

The Compensation Committee reviewed the achievement of the individual functional goals set for each executive under the AIP for 2018, discussing the results of the NEOs with our CEO. While our CEO’s opportunity under the 2018 AIP is tied solely to the MAA financial metric, the Compensation Committee also reviewed the achievement of his goals, discussing the results with the Board. Following these reviews, the Compensation Committee made the following determinations.

 

 

 

The Compensation Committee did not believe there were any circumstances that warranted the utilization of the modifier in the AIP to adjust any of the calculated awards under the plan.

 

As a result of the above analysis, the compensation awarded to the CEO by the Board upon recommendation by the Compensation Committee, and the other NEOs by the Compensation Committee, for work performed in 2018 under the 2018 executive compensation program is provided in the table below.

 

		2018 DIRECT COMPENSATION REALIZED FROM 2018 EXECUTIVE COMPENSATION PROGRAM																																REMAINING REALIZABLE
																										TOTAL AS AWARDED								TARGET LTIP 3-YR TSR (3)
						AIP																TOTAL								SHARES OF								SHARES OF
										FUNCTIONAL				LTIP (non-cash)								COMPENSATION								RESTRICTED				AWARDS				RESTRICTED
		SALARY				FFO				GOALS				SERVICE (2)				FFO (2)				(in Dollars)				CASH (1)				STOCK (2)				(in Dollars)				STOCK
BOLTON CEO		$	775,000			$	1,603,088				N/A			$	697,500			$	854,682			$	3,930,270			$	2,378,088				16,336			$	1,133,438			11,929
GRIMES COO		$	496,100			$	270,912			$	498,581			$	347,270			$	425,527			$	2,038,390			$	1,265,593				8,133			$	564,314			5,939
CAMPBELL CFO		$	484,000			$	450,519			$	168,795			$	338,800			$	415,149			$	1,857,263			$	1,103,314				7,934			$	550,550			5,794
DELPRIORE GC		$	471,900			$	439,257			$	159,266			$	283,140			$	346,946			$	1,700,509			$	1,070,423				6,631			$	460,103			4,842

(1)

Awards earned under the 2018 AIP are shown in dollars to reflect each NEO’s election to receive 100% of the award in cash.

 

(2)

Awards earned under the 2018 LTIP were issued as shares of restricted stock which remain at risk of forfeiture until vested, dependent upon the NEO’s continued employment in good standing with MAA through each vest date. Service shares were issued on January 9, 2018 and will vest in five equal annual installments on the anniversary of the issuance date. FFO shares were issued on April 2, 2019 and will vest in two equal annual installments on the anniversary of the issuance date.

 

(3)

The performance period for the 2018 LTIP Three Year TSR, which is 2018 – 2020, is not yet completed. Any awards earned will be issued in shares of restricted stock, which will immediately vest, in 2021.

 

The above realized compensation represents the percent of Target and Maximum direct compensation opportunities as indicated in the table below.

 

			COMPENSATION REALIZED
						AIP													LTIP
						AS PERCENT OF TARGET						AS PERCENT OF MAXIMUM							AS PERCENT OF TARGET						AS PERCENT OF MAXIMUM
								FUNCTIONAL						FUNCTIONAL
			SALARY			FFO		GOALS (1)		TOTAL		FFO		GOALS (1)		TOTAL			SERVICE (2)		FFO (2)		TOTAL		SERVICE (2)		FFO (2)		TOTAL
BOLTON CEO			100%			123%		N/A		123%		83%		N/A		83%			100%		126%		113%		100%		82%		89%
GRIMES COO			100%			123%		75%		87%		83%		75%		78%			100%		126%		113%		100%		82%		89%
CAMPBELL CFO			100%			123%		93%		113%		83%		93%		85%			100%		126%		113%		100%		82%		89%
DELPRIORE GC			100%			123%		90%		112%		83%		90%		85%			100%		126%		113%		100%		82%		89%

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(1)

Individual functional goals under the 2018 AIP are capped at the Target level.

 

(2)

The compensation in these columns was awarded in shares of restricted stock that remain at risk of forfeiture until vested, dependent upon the NEO’s continued employment in good standing with MAA through each vest date.

 

OTHER DIRECT COMPENSATION REALIZED IN 2018

 

 

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PROPOSAL 3: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

	MATTER TO BE VOTED Ratification of the appointment of Ernst & Young LLP to serve as MAA’s independent registered public accounting firm for 2019.   The Audit Committee is solely responsible for selecting our independent registered public accounting firm and has selected Ernst & Young LLP to audit our financial statements for the 2019 fiscal year. Although shareholder approval is not required to appoint Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019, our Board believes that submitting the appointment of Ernst & Young LLP to the shareholders for ratification is a matter of good corporate governance.
	VOTE REQUIRED This proposal will be approved if the votes cast “FOR” the proposal exceed the votes cast “AGAINST” the proposal.   Shareholder approval for the appointment of our independent registered public accounting firm is not required, but the Board is submitting the selection of Ernst & Young LLP for ratification in order to obtain the views of our shareholders. The Audit Committee will consider a vote against the firm by the shareholders in selecting our independent registered public accounting firm in the future.
	IMPACT OF ABSTENTIONS Abstentions will have no legal effect on whether this proposal is approved.   IMPACT OF BROKER NON-VOTES Broker non-votes will have no legal effect on whether this proposal is approved.
	BOARD RECOMMENDATION On behalf of the Audit Committee, our Board recommends a vote FOR the ratification of the appointment of Ernst & Young LLP as our independent registered public accounting firm for fiscal year 2019.

 

Ernst & Young LLP audited MAA’s annual financial statements for the fiscal year ended December 31, 2018, and MAA’s internal control over financial reporting as of December 31, 2018. On February 19, 2019, following a review of the qualifications, performance and independence of Ernst & Young LLP, among other considerations, the Audit Committee appointed Ernst & Young LLP to be MAA’s independent registered public accounting firm for the fiscal year ending December 31, 2019.

 

Ernst & Young LLP has performed as MAA’s external auditors continuously since October 2005. The Audit Committee believes that the appointment of Ernst & Young LLP as MAA’s independent registered public accounting firm for 2019 is in the best long-term interest of MAA’s shareholders.

 

A representative of Ernst & Young LLP is expected to be present at the Annual Meeting to make a statement if they so desire and to answer any appropriate questions.

AUDIT AND NON-AUDIT FEES

The following table shows the fees paid or accrued by us for audit and other services provided by Ernst & Young LLP, our independent registered public accounting firm effective October 31, 2005, for the years ended December 31, 2018 and 2017.

 

(1)

Audit Fees consists of fees billed for professional services rendered and expenses incurred relating to the audit of our financial statements and internal control over financial reporting, the review of our interim financial statements and for work on securities offerings and other filings with the SEC, including comfort letters, consents and comment letters.

 

(2)

Audit-Related Fees consists of fees billed for professional services rendered and expenses incurred for assurance and other services related to the audit of our financial statements. In 2017, Audit-Related Fees included fees billed specifically pertaining to our merger with Post Properties, Inc.

 

(3)

Tax Fees consists of fees billed for professional services rendered and expenses incurred related to tax return preparation and compliance, and general tax consulting. For 2018, Tax Fees included fees billed specifically pertaining to tax return compliance, final analysis of a taxable REIT subsidiary tax basis, joint venture structuring, taxable gain/loss calculations related to dispositions, accounting method change review related to cost segregation, real estate transfer tax analysis related to debt financing and state income tax planning. For 2017, Tax Fees included fees billed specifically pertaining to tax return compliance, analysis of a taxable REIT subsidiary tax basis and an update to a cost segregation study.

 

(4)

All Other Fees consists of a fee billed for a subscription to an online accounting and tax information service.

 

The Audit Committee has determined that the nature and level of non-audit related services that Ernst & Young LLP provides to MAA is compatible with maintaining the independence of Ernst & Young LLP.

 

AUDIT COMMITTEE POLICIES

 

Practices Related To The Independent Registered Public Accounting Firm

 

SOLE AUTHORITY TO APPOINT OR REPLACE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee has the sole authority to appoint or replace the independent registered public accounting firm and is responsible for the compensation and oversight of the work of the independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work, or performing other audit, review or attestation services for MAA. As such, the independent registered public accounting firm reports directly to the Audit Committee.

 

ANNUAL EVALUATION AND SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee annually evaluates the performance of MAA’s independent registered public accounting firm and audit engagement team and determines whether to reengage the then current firm. Among other items, the Audit Committee takes into account the following factors when making this determination:

 

⌂

The Audit Committee’s determination of prior performance of the independent registered public accounting firm including the quality and efficiency of work performed, and familiarity of MAA’s operations, accounting policies and procedures and internal controls over financial reporting,

 

⌂

Independence considerations including independence controls of the independent registered public accounting firm and the type and quantity of non-audit services provided to MAA, any member of the Board and any NEOs,

 

⌂

Recent Public Company Accounting Oversight Board reports related generally to the independent registered public accounting firm and specifically to audits by members of MAA’s engagement team,

⌂

Depth of financial, accounting and industry experience, technical expertise and resources of the independent registered public accounting firm in general and of the members of the audit engagement team specifically,

 

⌂

The quality and candor of the independent registered public accounting firm’s communications with the Audit Committee,

 

⌂

The appropriateness of fees charged by the independent registered public accounting firm, and

 

⌂

The results of the most recent shareholder vote to ratify the appointment of the independent registered public accounting firm.

 

OVERSIGHT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

In addition to quarterly written materials submitted to the Audit Committee, representatives of the independent registered public accounting firm meet with the committee, management and the Director of Internal Audit on a quarterly basis. The Audit Committee routinely meets with representatives of the independent registered public accounting firm as well as management and the Director of Internal Audit in separate executive sessions throughout the year. The Chairman of the Audit Committee may also receive or request periodic or ad hoc updates from the independent registered public accounting firm and/or management and the Director of Internal Audit between scheduled meetings, as deemed appropriate.

 

PRE-APPROVAL OF ALL AUDITING AND NON-AUDITING SERVICES

The Audit Committee pre-approves all auditing services and permitted non-audit services to be performed by the independent registered public accounting firm. The Audit Committee has delegated the authority to pre-approve such services and fees to the Chairman of the Audit Committee when scheduling a full committee meeting to timely consider a proposed service or fee is not feasible. Any decisions to pre-approve services or fees made solely by the Chairman of the Audit Committee are presented to the full Audit Committee for ratification at its next scheduled meeting. Authority to pre-approve services and fees of the independent registered public accounting firm may not be delegated to any member of management.

 

ROTATION OF AUDIT ENGAGEMENT TEAM MEMBERS

The Audit Committee ensures that the rotation of the lead audit partner and audit engagement team partners of MAA’s independent registered public accounting firm is done in compliance with NYSE and SEC regulations.

 

Hiring Of Independent Registered Public Accounting Firm Employees

Other Practices

 

 

AUDIT COMMITTEE REPORT

The Audit Committee has the responsibilities and powers set forth in its charter which include the responsibility to assist our Board of Directors in its oversight of our accounting and financial reporting principles and policies and internal audit controls and procedures, the integrity of our financial statements, our compliance with legal and regulatory requirements, the independent auditor’s qualifications and independence, and the performance of the independent auditor and our internal audit function. The Audit Committee is also required to prepare this report to be included in our annual Proxy Statement pursuant to the proxy rules of the SEC.

 

Management is responsible for the preparation, presentation and integrity of our financial statements and for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures to provide for compliance with accounting standards and applicable laws and regulations. The internal auditor is responsible for testing such internal controls and procedures. Our independent registered public accounting firm is responsible for planning and carrying out a proper audit of our annual financial statements, reviews of our quarterly financial statements prior to the filing of each quarterly report on Form 10-Q, as well as other procedures.

 

The Audit Committee has reviewed and discussed our audited financial statements for the year ended December 31, 2018 with management. In addition, the Audit Committee has discussed with Ernst & Young LLP, our independent registered public accounting firm, the matters required to be discussed by Auditing Standard No. 1301, Communications with Audit Committees, as adopted by the Public Company Accounting Oversight Board, and other matters required by the charter of this committee.

 

The Audit Committee also has received the written disclosures and the letter from Ernst & Young LLP required by the Public Company Accounting Oversight Board Rule 3526, and has discussed with Ernst & Young LLP their independence from the company and its management.

 

The Audit Committee has received both management’s and the independent registered public accounting firm’s reports on internal control over financial reporting and has discussed those reports.

 

The Audit Committee has discussed with management and representatives of the independent registered public accounting firm such other matters and received such assurances from them as they deemed appropriate.

 

As a result of their review and discussions, the Audit Committee has recommended to the Board of Directors the inclusion of our audited financial statements in the Annual Report on Form 10-K for the year ended December 31, 2018, for filing with the SEC.

 

	AUDIT COMMITTEE:
	Alan B. Graf, Jr., CHAIRMAN
	Russell R. French
	W. Reid Sanders
	Gary Shorb

SECURITIES OWNERSHIP

 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The number of shares owned and percentage ownership in the following table is based on 113,844,266 shares of common stock outstanding on December 31, 2018. The following table sets forth information as of December 31, 2018, regarding each person known to us to be the beneficial owner of more than five percent of our common stock. The information in the following table is based solely on Schedule 13G filings with the SEC by the respective identified beneficial owners.

 

				Amount and
				Nature of
Name and Address				Beneficial		Percent
of Beneficial Owner				Ownership		of Class		Notes
The Vanguard Group				18,213,530		16.0%		The Schedule 13G indicates the entity has sole power to vote or to direct the vote for 240,678 shares, shared power to vote or to direct the vote for 155,087 shares, sole power to dispose or to direct the disposition of 17,931,713 shares, and shared power to dispose or to direct the disposition of 281,817 shares. The shares indicated include the 5,411,222 shares beneficially owned by Vanguard Specialized Funds – Vanguard Real Estate Index Fund, an affiliate of Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
Vanguard Specialized Funds				5,411,222		4.8%		The Schedule 13G indicates the entity has sole power to vote or to direct the vote for 5,411,222 shares. The shares indicated are included in the 18,213,530 shares beneficially owned by The Vanguard Group, Inc. and should not be added to those shares to indicate total beneficial ownership by The Vanguard Group, Inc.
	- Vanguard Real Estate Index Fund
100 Vanguard Blvd.
Malvern, PA 19355
BlackRock, Inc.				11,359,757		10.0%		The Schedule 13G indicates the entity has sole power to vote or to direct the vote for 10,404,560 shares and sole power to dispose or to direct the disposition of 11,359,757 shares.
55 East 52nd Street
New York, NY 10055
State Street Corporation				6,767,597		5.9%		The Schedule 13G indicates the entity has shared power to vote or to direct the vote for 6,153,212 shares, and shared power to dispose or to direct the disposition of 6,766,455 shares.
State Street Financial Center
One Lincoln Street
Boston, MA 02111

 

SECURITY OWNERSHIP OF MANAGEMENT

The number of shares owned and percentage ownership in the following table is based on 113,888,380 shares of common stock outstanding on February 28, 2019. We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. In addition, the rules include shares of common stock issuable pursuant to the exercise of stock options that are either immediately exercisable or exercisable within 60 days of February 28, 2019. These shares are deemed to be outstanding and beneficially owned by the person holding those options for the purpose of computing the percentage ownership of that person, but they are not treated as outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, we believe that the persons identified in this table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

The following table sets forth the beneficial ownership of our common stock as of February 28, 2019 by (i) each director, (ii) each director nominee, (iii) each executive officer named in the Summary Compensation Table, and (iv) all directors, nominees and executive officers as a group. Unless otherwise indicated, voting power and investment power are exercisable solely by the named person. The address of each officer, director and/or director nominee listed below is 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138.

 

Name of Beneficial Owner		Aggregate Number of Shares Beneficially Owned		Percent of Class		Notes
H. Eric Bolton, Jr. (2)		352,738		(1)		Includes 110,000 shares that Mr. Bolton has the current right to acquire upon redemption of limited partnership units; 8,251 shares attributed to Mr. Bolton in our Employee Stock Ownership Plan; and 10,269 shares owned in a joint account with his wife for which Mr. Bolton has shared voting and investment power.
Albert M. Campbell, III		60,100		(1)		Includes 2,942 shares attributed to Mr. Campbell in our Employee Stock Ownership Plan; 100 shares held by Mr. Campbell through an individual retirement account; and 12,023 shares owned in a joint account with his wife for which Mr. Campbell has shared voting and investment power.
Robert J. DelPriore		31,163		(1)
Russell R. French (2)		22,993		(1)		Includes 5,303 shares held in a deferred compensation account.
Alan B. Graf, Jr. (2)		40,497		(1)		Includes 28,778 shares held in a deferred compensation account.
Thomas L. Grimes, Jr.		60,540		(1)		Includes 3,713 shares attributed to Mr. Grimes in our Employee Stock Ownership Plan; 1,362 shares owned by Mr. Grimes’ spouse in our Employee Stock Ownership Plan; and 2 shares owned by his children for which Mr. Grimes has shared voting and investment power.
Toni Jennings (2)		6,128		(1)
James K. Lowder (2)		240,277		(1)		Includes 233,716 shares that Mr. Lowder has the current right to acquire upon redemption of limited partnership units, 4,990 of which Mr. Lowder would have shared voting and investment power (4,990 owned by JKL Investments, LLC), and 208,726 of which are pledged as collateral on various loans.
Thomas H. Lowder (2)		283,523		(1)		Includes 248,654 shares that Mr. Lowder has the current right to acquire upon redemption of limited partnership units, 19,928 of which Mr. Lowder would have shared voting and investment power (19,928 owned by THL Investments, LLC); 2,160 shares held in a deferred compensation account; 25,791 shares held by Mr. Lowder through an individual retirement account; and 357 shares indirectly owned for which Mr. Lowder has shared voting and investment power (357 shares owned by THL Investments, LLC).
Monica McGurk (2)		6,207		(1)		Includes 4,816 shares held in a deferred compensation account.
Claude B. Nielsen (2)		33,504		(1)		Includes 2,111 shares that Mr. Nielsen has the current right to acquire upon redemption of limited partnership units; 9,353 shares held in a deferred compensation account; and 3,423 shares that Mr. Nielsen has the right to acquire upon the exercise of options.
Philip W. Norwood (2)		27,282		(1)		Includes 17,491 shares held in a deferred compensation account.
W. Reid Sanders (2)		145,359		(1)		Includes 107,000 shares that Mr. Sanders has the current right to acquire upon redemption of limited partnership units; 7,459 shares held in a deferred compensation account; 6,000 shares held by Mr. Sanders through an individual retirement account; and 8,400 shares Mr. Sanders holds indirectly and for which he has shared voting and investment power, of which 4,100 shares Mr. Sanders has authority to vote as trustee or through a power-of-attorney and 1,300 shares owned by Mr. Sanders’ spouse.
Gary Shorb (2)		19,224		(1)		Includes 14,474 shares held in a deferred compensation account.
David P. Stockert (2)		156,394		(1)		Includes 4,188 shares held in a deferred compensation account; 60,412 shares owned by Mr. Stockert’s spouse and 27,008 shares that Mr. Stockert has the right to acquire upon the exercise of options.
All Directors, Director Nominees and Executive Officers as a group (15 persons)		1,485,929		1.3%		Includes 701,481 shares that may be acquired upon redemption of limited partnership units; 94,022 shares held in deferred compensation accounts; 16,268 shares held in our Employee Stock Ownership Plan; and 30,431 shares that may be acquired upon the exercise of options.

 

(1)

Represents less than 1% of the total.

 

(2)

Director nominee.

 

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, or the Exchange Act, requires our directors, executive officers and certain beneficial owners of more than 10% of our common stock, to file with the SEC initial reports of ownership and reports of changes in ownership of our common stock and furnish us with copies of all forms filed.

 

To our knowledge, based solely on review of the copies of such reports furnished us and representations that no other reports were required, during the past fiscal year all Section 16(a) filing requirements applicable to our directors and executive officers were completed on a timely basis, except for the: (i) Form 4 filed on August 21, 2018 for Russell R. French for a sale transaction on August 13, 2018 which was due to be filed on August 15, 2018 as confirmation for the sale, which had been properly pre-cleared under our Insider Trading Policy by Mr. French, failed to reach MAA, (ii) Amended Form 4s filed on April 2, 2018 for transactions on March 26, 2018 reporting the grant of an award under an equity incentive plan to H. Eric Bolton, Jr., Albert M. Campbell, III, Robert J. DelPriore and Thomas L. Grimes, Jr., as MAA inadvertently failed to include the grant on the original Form 4 filed on March 28, 2018 reporting other equity incentive plan activity, and (iii) Form 4s filed on March 14, 2018 which were due to be filed on March 13, 2018 reporting the withholding of shares to cover taxes on March 10, 2018 related to a vesting pursuant to shares earned and issued under a prior year restricted stock plan for H. Eric Bolton, Jr., Albert M. Campbell, III, Robert J. DelPriore and Thomas L. Grimes, Jr. as MAA inadvertently originally assigned a deemed execution date of March 12, 2018 to the withholding.

 

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

The following table provides information regarding shares of MAA common stock which could be issued with respect to compensation plans as of December 31, 2018.

 

		Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))
		(a)(1)				(b)(1)				(c)(2)
Equity compensation plans approved by security holders			90,615			$	77.16				1,456,397
Equity compensation plans not approved by security holders			None				None				None
Total			90,615			$	77.16				1,456,397

 

(1)

The outstanding options were issued in exchange for options outstanding with Colonial Properties Trust and Post Properties, Inc. at the respective time of our merger with each.

 

(2)

Represents shares available to be issued under our Second and Amended MAA 2013 Stock Incentive Plan.

 

MEETING AND VOTING INFORMATION

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MEETING INFORMATION

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DATE:	Tuesday, May 21, 2019	PLACE:	MAA Corporate Headquarters
TIME:	12:30 p.m., local time		6815 Poplar Avenue, Suite 500
			Germantown, Tennessee 38138

Requirements To Attend The Annual Meeting In Person

To attend the Annual Meeting in person, you will need to register in advance to obtain an admission ticket to gain access to the Annual Meeting.

 

Only shareholders (or their proxies or qualified representatives) who are eligible to vote and provide the required documentation will be allowed to attend the Annual Meeting in person. Guests, media and other individuals will not be allowed to attend.

 

REGISTER FOR ADMISSION TICKET BY MAY 15, 2019

To obtain an admission ticket to attend the Annual Meeting in person you will need to register by May 15, 2019. To do so, you will need to have the 16-digit control number provided on your proxy card or voter instruction card.

 

GO TO:	www.proxyvote.com
LOOK FOR:	“Register for Meeting” and follow the instructions
PRINT:	Print your admission ticket and bring it with you to the Annual Meeting

If you would like to attend the Annual Meeting in person but do not have access to a computer or printer, you can call the Corporate Secretary’s office at MAA at 901-682-6600 and we will assist you in obtaining an admission ticket.

 

REQUIRED DOCUMENTATION TO GAIN ACCESS TO THE ANNUAL MEETING

To gain access to the Annual Meeting you will need to have the below documentation with you (as applicable):

 

All Attendees			Proxies And Qualified Representatives
⌂	Admission ticket obtained when you registered in advance (by May 15, 2019) to attend the Annual Meeting in person		⌂	Legal written proxy or authorization letter
⌂	Valid picture identification

Quorum

A quorum of shareholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares of common stock are represented by shareholders present at the Annual Meeting either in person or by proxy. On March 15, 2019, the record date for the Annual Meeting, there were 113,892,167 shares of common stock outstanding and entitled to vote. Thus, 56,946,084 shares of common stock must be represented by shareholders present either in person or by proxy at the Annual Meeting to have a quorum.

 

Your shares will be counted towards the quorum only if you submit a valid proxy to vote in advance or vote in person at the Annual Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the Chairman of the meeting or a majority of the votes present at the Annual Meeting may adjourn the meeting to another date.

 

Attendance Of Directors

We encourage, but do not require our directors to attend our annual meetings of shareholders. Generally, all of our directors do attend. All of our directors attended the 2018 Annual Meeting of Shareholders.

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2019 PROXY STATEMENT

74

Materials Related To The Annual Meeting

 

ELECTRONIC DELIVERY

We encourage our shareholders to sign up for electronic delivery of proxy materials. Shareholders of record can sign up for electronic delivery of materials while casting their vote on line or by accessing their shareholder account with our transfer agent, Broadridge Corporate Issuer Solutions, Inc. Beneficial owners should check with their broker or bank for availability of electronic delivery.

 

ANNUAL REPORT ON FORM 10-K

Our Annual Report on Form 10-K for the year ended December 31, 2018, as filed with the SEC, including the financial statements, and financial statement schedules is being mailed along with this Proxy Statement. Our Annual Report on Form 10-K for the year ended December 31, 2018, including all exhibits may be obtained from the SEC Filings and Reports section of the Investor Relations page of our website. Visit http://ir.maac.com. Information from our website is not incorporated by reference into this Proxy Statement. You can also obtain a copy, free of charge, by writing our Investor Relations Department at MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138 or by calling (866) 576-9689.

 

The SEC has adopted rules that permit companies and intermediaries such as brokers to satisfy delivery requirements for proxy materials with respect to two or more shareholders sharing the same address by delivering a single Proxy Statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies.

 

We and some brokers household proxy materials, delivering one copy of proxy materials to multiple shareholders sharing an address, unless contrary instructions have been received from the affected shareholders, and we undertake to deliver promptly upon written or oral request a separate copy of proxy materials to shareholders sharing an address to which a single copy of proxy materials was delivered. Once you have received notice from your broker or us that they or we will be householding materials to your address, householding will continue until you are notified otherwise or until you revoke your consent. If you did not respond that you did not want to participate in householding, you were deemed to have consented to householding. If at any time you no longer wish to participate in householding and would prefer to receive separate proxy materials, or if you are receiving multiple copies of the Proxy Statement and wish to receive only one, please do one of the following: (a) mark the appropriate box on your proxy card if you hold registered shares or notify your broker if your shares are held in a brokerage account; or (b) notify us in writing at MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138, Attention:  Corporate Secretary.

 

We can only household registered shares. If you own registered shares as well as hold shares in a brokerage account, you will continue to receive multiple copies of the Proxy Statement. Similarly, if you own shares in more than one brokerage firm, you can only household the Proxy Statements you receive within each individual brokerage house.

 

If you receive more than one set of proxy materials and proxy cards, you must complete, sign and return each proxy card that you receive or give your proxy authorization over the Internet or by phone to ensure that all of your shares are represented and voted.

 

Matters Related To The 2020 Annual Meeting Of Shareholders

 

SHAREHOLDER PROPOSAL REQUIREMENTS FOR THE 2020 ANNUAL MEETING OF SHAREHOLDERS

Shareholders who wish to submit proposals for inclusion in our proxy materials to be furnished to shareholders in connection with our 2020 Annual Meeting of Shareholders (other than proxy access director nominations) must comply with our bylaws and all applicable requirements of Rule 14a-8 promulgated under the Securities and Exchange Act of 1934, as amended, or the Exchange Act. To be considered timely for inclusion in our proxy materials furnished by us to shareholders, such proposals must be sent to the Nominating and Corporate Governance Committee, Attention: Corporate Secretary, MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138 and be received no later than the close of business on December 11, 2019.

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2019 PROXY STATEMENT

75

Shareholders may also directly submit proposals at our 2020 Annual Meeting of Shareholders, including proposals to nominate their own persons for election as directors by our shareholders. Our bylaws provide requirements for ownership and certain procedures that a shareholder must follow to make their own nominations of persons for election as directors, or to submit other business, at an annual meeting of shareholders that is not included in our proxy materials. Pursuant to our bylaws, shareholders wishing to submit proposals or director nominations that are not to be included in our proxy materials must give timely notice thereof in writing to our Corporate Secretary that contains all of the information required by our bylaws and prepare their own proxy materials for our shareholders. To be timely for the 2020 Annual Meeting of Shareholders, you must submit such proposals or nominations to our Corporate Secretary, in writing, no later than the close of business on February 21, 2020 and no earlier than the close of business on January 22, 2020.

 

We also advise you to review our bylaws, which contain additional requirements about advance notice of shareholder proposals and director nominations, including different notice submission date requirements in the event we do not hold our 2020 Annual Meeting of Shareholders between April 21, 2020 and July 20, 2020. The Chairman of the 2020 Annual Meeting of Shareholders may determine, if the facts warrant, that a matter has not been properly brought before the meeting and, therefore, may not be considered at the meeting. In addition, the proxy solicited by the Board for the 2020 Annual Meeting of Shareholders will confer discretionary voting authority with respect to any matter presented by a shareholder at that meeting for which we have not been provided with timely notice. Shareholder proposals must be sent to Attention: Corporate Secretary, MAA, 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138.

 

 

We advise you to review our bylaws, which contain additional requirements regarding advance notice of proxy access director nominations, including different notice submission date requirements in the event we do not hold our 2020 Annual Meeting of Shareholders between April 21, 2020 and July 20, 2020. A copy of our bylaws can be found on the SEC website (https://www.sec.gov) as an Exhibit to the Form 8-K which was filed on March 14, 2018.

 

VOTING INFORMATION

Shareholders Entitled To Vote

Only shareholders of record at the close of business on the record date, March 15, 2019, are entitled to receive notice of the Annual Meeting and to vote the shares that they held on the record date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. The only class of stock that can be voted at the Annual Meeting is our common stock. As of the close of business on March 15, 2019, we had 113,892,167 shares of common stock outstanding.

 

BENEFICIAL OWNER: SHARES REGISTERED IN THE NAME OF A BROKER OR BANK

If on March 15, 2019 your shares were held in an account at a brokerage firm, bank, dealer or similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the shareholder of record for purposes of voting at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the Annual Meeting.

 

MAA EMPLOYEE STOCK OWNERSHIP PLAN

If you had shares in an account under our Employee Stock Ownership Plan on March 15, 2019, you have the right to vote the shares in your account.

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2019 PROXY STATEMENT

76

 

Voting procedures vary depending on whether you are a shareholder of record (your shares are registered directly in your name in an account at our transfer agent, Broadridge Corporate Issuer Solutions, Inc.) or a beneficial owner (your shares are held in an account at a brokerage firm, bank, dealer or similar organization). Additional procedures may be required for beneficial owners so be sure to review the appropriate information below.

 

VOTE IN ADVANCE
SHAREHOLDERS OF RECORD		BENEFICIAL OWNERS
Shareholders of record may vote by proxy in advance of the Annual Meeting by utilizing one of the below methods. You will want to have your proxy card handy for reference.		Beneficial owners may direct the vote of their broker or bank in advance of the Annual Meeting by utilizing one of the below methods.
	Internet:  www.proxyvote.com		Mail: Properly complete, sign, date and mail the enclosed proxy card as indicated by your broker or bank.
	Phone:  800-690-6903		Follow any alternative instructions provided by your broker or bank to provide them with your voting instructions.
	Mail: Properly complete, sign, date and mail the enclosed proxy card in the postage-paid envelope provided.

VOTE AT THE ANNUAL MEETING
In addition to the below requirements to vote at the Annual Meeting, anyone wishing to attend the Annual Meeting must follow the instructions to register in advance (by May 15, 2019) to attend the Annual Meeting in person and bring the admission ticket and other required documentation to gain entrance to the Annual Meeting.
SHAREHOLDERS OF RECORD		BENEFICIAL OWNERS
	Shareholders of Record may vote at the Annual Meeting by bringing your completed proxy card with you or filling out your card when votes are called for during the meeting.		Beneficial Owners must have a valid proxy from their broker or bank in order to vote at the Annual Meeting.
Blank proxy cards will also be available for your use.		The proxy card you received with your materials is not sufficient to vote beneficial shares in person at the Annual Meeting. You must contact your broker or bank and let them know you wish to vote in person at the Annual Meeting. They will provide you with appropriate documentation.

CHANGING YOUR VOTE

If you vote by proxy in advance of the Annual Meeting, you can revoke your proxy at any time before the final vote at the Annual Meeting. To change your vote follow the appropriate instructions indicated below.

 

SHAREHOLDERS OF RECORD		BENEFICIAL OWNERS
Shareholders of record may change their vote by utilizing one of the below methods.		Beneficial owners will need to follow the instructions provided by their respective broker or bank to change their vote.
	Internet: www.proxyvote.com
	Phone:  800-690-6903
	Mail: Submit another properly completed proxy card bearing a later date.
	In Person: You may vote in person at the Annual Meeting.

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2019 PROXY STATEMENT

77

CASTING OF VOTES

If you submit a valid proxy through one of the avenues listed in the How to Vote section of this Proxy Statement, your votes will be cast as you indicate. If you submit a properly executed proxy card without marking your voting selections, your shares will be voted per our Board recommendations FOR all director nominees and proposals contained within this Proxy Statement.

 

If any additional matters are properly presented at the Annual Meeting, your proxy (one of the individuals named on your proxy card) will vote your shares as recommended by the Board or, if no recommendation is given, in accordance with his or her best judgment. Votes will be counted by the inspector of election appointed for the Annual Meeting, who will separately count “For”, “Against” and “Abstain” votes.

 

If you are a beneficial owner and your shares are held by your broker or bank, you will need to obtain a proxy form from the institution that holds your shares and follow the instructions included on that form regarding how to instruct your broker to vote your shares. In the event that a broker, bank, custodian, nominee or other record holder of our common stock indicates on a proxy that it does not have discretionary authority to vote certain shares on a particular matter, then those shares will be treated as broker non-votes.

 

Votes Required To Approve Proposals

For each proposal, votes cast FOR the director nominee or proposal must exceed the votes cast AGAINST the director nominee or proposal for the director nominee to be elected or the proposal to be approved.

 

Neither abstentions nor broker non-votes will have any legal effect on whether the director nominee is elected or the proposal is approved.

 

If a director nominee is an incumbent director and fails to receive more FOR votes than AGAINST votes, the director nominee is required to tender his or her resignation to the Nominating and Corporate Governance Committee of the Board for consideration, and the Nominating and Corporate Governance Committee will determine whether it is advisable to accept or reject the resignation and will submit a recommendation to the Board for consideration.

 

The vote to approve executive compensation is an advisory, non-binding vote, and the Compensation Committee will consider the results of the vote for any immediate action it deems necessary as well as in setting future executive compensation.

 

Shareholder approval for the appointment of our independent registered public accounting firm is not required. The Board is submitting the selection of Ernst & Young LLP for ratification in order to obtain the views of our shareholders. The Audit Committee will consider a vote against the firm by the shareholders in selecting our independent registered public accounting firm in the future.

 

Voting Results

Preliminary voting results will be announced at the Annual Meeting. We will file the final results of the vote on a Current Report on Form 8-K with the SEC within four business days of the Annual Meeting. Once filed, you will be able to access the Current Report on Form 8-K in the SEC Filings and Reports section of the Investor Relations page of our website. Visit http://ir.maac.com. Information from our website is not incorporated by reference into this Proxy Statement.

 

QUESTIONS

If you have any questions about the Annual Meeting, these proxy materials or your ownership of our common stock, please contact our Legal Department at 6815 Poplar Avenue, Suite 500, Germantown, Tennessee 38138, or email investor.relations@maac.com or call (901) 682-6600.

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2019 PROXY STATEMENT

78

OTHER MATTERS 

Our Board of Directors, at the time of the preparation of this Proxy Statement, knows of no business to come before the meeting other than that referred to herein. If any other business should come before the meeting, the person named on the enclosed proxy card will have discretionary authority to vote all proxies as recommended by the Board of Directors or, if no recommendation is given, in accordance with their best judgment.

 

	BY ORDER OF THE BOARD OF DIRECTORS
	Leslie B.C. Wolfgang
	Senior Vice President, Chief Ethics and Compliance Officer, and Corporate Secretary

 

April 9, 2019

 

NON-GAAP FINANCIAL MEASURES

FFO, a non-GAAP financial measure, represents net income available for MAA common shareholders (computed in accordance with GAAP) excluding extraordinary items, asset impairment and gains or losses on disposition of operating properties, plus net income attributable to noncontrolling interest, depreciation and amortization of real estate assets, and adjustments for joint ventures to reflect FFO on the same basis. Because noncontrolling interest is added back, FFO, when used in this Proxy Statement, represents FFO attributable to MAA.

 

While MAA's definition of FFO is in accordance with National Association of Real Estate Investment Trust's definition, it may differ from the methodology for calculating FFO utilized by other companies and, accordingly, may not be comparable to such other companies. FFO should not be considered as an alternative to Net income available for MAA common shareholders as an indicator of operating performance. MAA believes that FFO is helpful in understanding operating performance in that FFO excludes depreciation and amortization of real estate assets. MAA believes that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, whose value does not diminish predictably over time, as historical cost depreciation implies.

 

A reconciliation of FFO to net income available for MAA common shareholders is set forth in the below table.

	Year Ended December 31, 2018
	Dollars in Thousands			Dollars per common shares and units as indicated
Net income available for MAA common shareholders	$  219,211			$ 1.93		Per weighted average common shares - diluted
Depreciation and amortization of real estate assets	484,722
Loss on sale of depreciable real estate assets	39
Depreciation and amortization of real estate assets of real estate joint venture	595
Net income attributable to noncontrolling interests	8,123
Funds from operations attributable to MAA, or FFO	712,690			$ 6.04		Per FFO weighted average common shares and units - diluted
Merger and integration related expenses	9,112			$  0.08		Per FFO weighted average common shares and units - diluted
Embedded derivative - Series I Preferred Stock	2,577			$  0.02		Per FFO weighted average common shares and units - diluted
2018 AIP and 2018 LTIP plan defined FFO	$  724,379			$  6.14		2018 AIP and 2018 LTIP plan defined FFO per Share
Weighted average common shares - diluted	113,836
FFO weighted average common shares and units - diluted	117,948

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2019 PROXY STATEMENT

79

	Mid-America Apartment Communities, Inc.
	MAA  6815 Poplar Avenue  Suite 500  Germantown, Tennessee 38138  www.maac.com

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