Douglas Emmett Inc

This advisory proposal asks shareholders to approve the Company’s disclosed 2025 NEO compensation (say-on-pay). Management seeks approval to confirm that its executive pay approach — heavily weighted to performance-based restricted equity (LTIP Units) with multi-year vesting, transfer restrictions, stock-price hurdles, and substantial ownership requirements — is aligned with long-term shareholder interests and effective for recruitment and retention. The Compensation Committee emphasizes a balanced pay-for-performance framework using five weighted categories (FFO, TSR, Environmental, Operating Goals, and External Business Activities) and retains discretion to adjust awards for qualitative factors; the Board presents this vote as annual and non-binding but will consider results in future compensation decisions. Key contextual data: CEO and COO pay is overwhelmingly equity-based (around 91% in 2025) and the Company requires long holding periods and performance hurdles, but the Company’s TSR performance has been weak in recent periods (notably negative 1-year and multi-year TSRs), which could raise shareholder concern despite demonstrated operating and environmental achievements. If shareholders vote against, the vote is advisory but could prompt the Compensation Committee to re-evaluate plan design, metrics, or disclosure; a vote FOR would validate current practices and continuation of the LTIP-heavy approach. The Board’s rationale stresses alignment of management and shareholder interests, long-term retention, and the flexibility to assess qualitative outcomes; critics might argue that heavy reliance on equity with long hold periods reduces immediate transparency on realized pay and that poor TSR over recent years merits reconsideration of metrics or pay magnitude. The Company’s stated governance safeguards (clawback policy, no single-trigger CIC vesting, no repricing without shareholder approval, independent compensation consultant) are intended to mitigate governance and dilution concerns but will be judged by shareholders in the context of realized returns and pay outcomes.

Proposal 4 requests shareholder approval of a new 2026 Omnibus Stock Incentive Plan to replace the expiring 2016 Plan and authorize up to 15 million shares (plus certain forfeited Prior Plan awards) for equity and equity-linked awards. Management argues the plan is necessary to continue granting LTIP Units and other equity to attract, retain and motivate employees, directors and consultants, and to align management incentives with long-term shareholder value; approval will allow the Company to continue its long-standing practice of paying a large portion of senior executive compensation in restricted equity subject to multi-year vesting and stock-price hurdles. The 2026 Plan includes governance protections management highlights to mitigate shareholder concerns: no single-trigger change-in-control vesting, no liberal share recycling, no repricing without shareholder approval, a three-year average burn-rate disclosure, an annual $500,000 non-employee director grant limit, clawback provisions, limits on transferability, and a ten-year plan term (not evergreen). Company disclosure projects a modestly elevated projected burn rate (1.9% vs. historical 1.3%) driven primarily by a lower stock price, and management estimates the reserve should cover roughly three performance cycles; this creates a potential tradeoff between providing competitive equity to retain talent and incremental shareholder dilution. From a shareholder governance perspective, the plan’s protective features (no repricing without approval, no single-trigger CIC acceleration, clawbacks) are constructive, but some investors may still scrutinize the absolute size of the share reserve and the projected burn rate given recent TSR weakness, and may seek tighter limits or additional disclosure on award-sizing and long-term dilution. If approved, the plan preserves management’s flexible administration authority (through the Compensation Committee) to set award terms and performance criteria, so ongoing stockholder oversight of actual grant practices, realized pay outcomes and disclosure quality will be key to assessing long-term alignment.