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Ventas (VTR) Mails Letter to Shareholders Highlighting Highly Qualified Board Overseeing Superior Long-Term Shareholder Returns

April 11, 2022 8:37 AM EDT

Ventas, Inc. (NYSE: VTR) (“Ventas” or the “Company”) today announced that it has mailed a letter to shareholders in connection with its 2022 Annual Meeting of Stockholders, which is scheduled to be held virtually on April 27, 2022. The letter urges shareholders to vote the WHITE proxy card “FOR ALL” of Ventas’s highly qualified directors. Shareholders of record as of March 21, 2022, are entitled to vote.

The full text of the letter follows:

Dear Fellow Shareholder,

As Ventas’s 2022 Annual Meeting approaches, you have an important decision to make regarding the composition of your Board of Directors. We ask you to support Ventas’s highly qualified Board by voting today “FOR ALL” on the enclosed WHITE proxy card.

The Ventas Board has a long track record of acting in the best interest of all shareholders and driving sustainable value and has:

  • Overseen disciplined, forward-thinking capital allocation to enhance the Company’s portfolio and drive growth;
  • Taken decisive actions in response to the COVID-19 pandemic to prioritize the safety of our residents, employees, patients and healthcare workers, and position Ventas to capitalize on the senior housing industry recovery;
  • Undertaken thoughtful ongoing Board refreshment with the appointment of four new independent and highly accomplished directors in the last three years; and
  • Built on the Company’s industry leading position in ESG with best-in-class sustainability programs and target of reaching net zero by 2040.

As a result, we have excellent positive momentum at Ventas and the right Board to oversee our continued progress. The Ventas Board has overseen exceptional long-term annualized TSR of over 20% since December 31, 1999, significantly outperforming the FTSE Nareit Equity Health Care Index’s 14%, MSCI US REIT Index’s 11% and S&P 500’s 7%. Year-to-date through March 25, Ventas has delivered TSR of 23%, the highest of the 16 constituents in the FTSE Nareit Equity Health Care Index and well in excess of other key benchmarks.

However, Land & Buildings, a shareholder that owns approximately 0.2% of the Company’s outstanding shares, recently launched a proxy contest by nominating its founder and Chief Investment Officer, Jonathan Litt, to replace a Ventas director on your Board. Our Board evaluated Mr. Litt’s candidacy as part of our ongoing refreshment process and determined that he is not qualified to serve as a director on the Ventas Board. Land & Buildings’ solicitation materials contain many errors and disingenuous statements; the Company’s publicly available materials have addressed many of these.

THE VENTAS BOARD IS DIVERSE, REFRESHED, INDEPENDENT AND HIGHLY QUALIFIED

At Ventas, we work diligently to ensure your Board is strong, diverse and thoughtfully refreshed and has skill sets uniquely suited to oversee the Company’s business. The fresh perspectives we gain by adding highly qualified new Board members are complemented by the continuity of institutional knowledge provided by Ventas’s longer-tenured directors. We believe our thoughtful and balanced approach to Board refreshment has been instrumental in helping the Company navigate industry and business cycles, make thoughtful, forward-thinking capital allocation decisions and manage through risks and challenges.

Over the last three years, the Board has appointed four new independent directors, further increasing its diversity based on race, gender and experience.

Your Board has nominated 11 directors for election at the 2022 Annual Meeting that collectively bring the right backgrounds and skills to drive Ventas forward with significant leadership, institutional investment, financial and operating experience. Land & Buildings is attempting to remove your Independent Presiding Director, James D. Shelton, from the Board. Mr. Shelton has extensive experience as a public company CEO and business leader with a track record of value creation in the healthcare industry:

Relevant Healthcare Experience and Track Record of Value Creation

Omnicare – served as Non-executive Chairman of the Board from 2010-2015

  • Delivered TSR of 305% during tenure, far outpacing S&P 500’s 84%
  • Served as interim CEO in 2010

Triad Hospitals – served as Chairman and CEO from 1999 until its sale in 2007

  • Delivered TSR of 321% during tenure, far outpacing the S&P 500’s 28%
  • Oversaw 53 hospitals and 42,000 employees

Significant Contributions to Ventas

  • Brings a wealth of expertise on hospitals, medical office buildings and other care settings, which collectively comprise 41% of our NOI
  • Served as Presiding Director since May 2016
  • As Presiding Director, he has driven a strong board and committee refreshment program, established other best-in-class corporate governance practices and focused on diversity and ESG leadership
  • Member of Compensation Committee and Nominating and Corporate Governance (NCG) Committee; Former Chair of NCG Committee
  • Leveraging his significant industry and leadership experience, served as a central contributor to our response to COVID-19 pandemic and successful investments including in healthcare real estate

Ventas continues to benefit from Mr. Shelton’s leadership, institutional knowledge of the Company and healthcare expertise, which are essential to our continued success and are all skills or experiences that Mr. Litt lacks.

THE VENTAS BOARD AND MANAGEMENT HAVE A STRONG TRACK RECORD OF SHAREHOLDER ENGAGEMENT AND INCORPORATING FEEDBACK

Robust, Multi-Year Board-Led Shareholder Engagement Program:

  • Compensation Committee Chair leads proactive outreach to top 50 shareholders, representing ~70% of outstanding shares at least biannually
  • Executive officers, investor relations and other members of senior management also speak with hundreds of investors annually in variety of settings and formats
  • Board and management seek to better understand shareholder perspectives and gather feedback, while providing visibility and transparency into business, performance and priorities

Recent Enhancements Implemented Following Shareholder Feedback:

  • Additional disclosure on earnings measures, including on normalized FFO and other unique items
  • Tactical IR enhancements improving earnings communications
  • Reduced FY22 target compensation for the CEO by 14% and for the CFO and CIO by 8% in response to shareholder feedback
  • Enhanced disclosures in FY22 Proxy Statement regarding assessment of individual executive performance and process for establishing performance metrics for incentive compensation plans
  • Adopted performance metrics in long-term incentive compensation plan for several years related to diversity, equity & inclusion, a practice that continues to be rare among the S&P 500

THE VENTAS BOARD CONTINUED ITS CONSISTENT SKILL-BASED REFRESHMENT PROCESS WITH THE RECENT APPOINTMENT OF MICHAEL EMBLER

Our most recent Board refreshment process, driven by a clear set of criteria based on Ventas’s current and future needs and conducted with the assistance of Korn Ferry, featured consideration of more than 20 candidates, with six candidates reaching the Board-managed interview stage. Land & Buildings’ candidate, Mr. Litt, was interviewed by the Board as part of this process. Ultimately, the Ventas Board appointed Mr. Embler to the Board. Mr. Embler is the former Chief Investment Officer of Franklin Mutual Advisers, current director of American Airlines, and former director of Kindred Healthcare (one of Ventas’s largest tenants that specializes in long term acute care hospitals and other healthcare facilities, now known as Scion Health).

Land & Buildings has not proposed any substantive ideas for Ventas, and all of its criticisms are being addressed by Ventas’s proactive and engaged Board and management team. Land & Buildings has also contradicted itself in its materials and criticism of Ventas’s capital allocation, commending the Company’s “superior, better positioned portfolio”, which can only be the result of Ventas’s long track record of successfully deploying capital. Indeed, Land & Buildings’ self-interested proxy contest is singularly focused on Mr. Litt’s personal agenda.

Your Board’s nominees are best qualified with the expertise and leadership to execute the Company’s strategy, capture meaningful upside in the senior housing recovery and drive growth and sustainable value creation.

We look forward to continuing to engage with you and appreciate your support.

Sincerely,

The Ventas Board of Directors

Advisors

Centerview Partners LLC is serving as financial advisor, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel, to the Company.



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