DEFA14A: Alpine Income Property Trust Faces Diversity Concerns: ISS and Glass Lewis Recommend Against Re-election of Director

Institutional Shareholder Services (ISS) and Glass Lewis (GL) are recommending against the re-election of Carson Good to Alpine Income Property Trust's (PINE) board due to concerns about board diversity.

Summary

• ISS and Glass Lewis are advising against re-electing Carson Good to Alpine Income Property Trust's board.
• ISS cites the lack of racial or ethnic diversity on the board and the absence of a firm commitment to appoint a diverse member within a year.
• Glass Lewis points to insufficient gender diversity on the board.
• The board acknowledges the value of diversity but emphasizes merit and suitability as overriding principles for nominations.
• The board has been searching for diverse candidates.
• All current board members own over $150,000 in PINE stock, aligning their interests with stockholders.
• PINE has only five independent directors due to its relatively small size and the need for capital efficiency.
• Expanding the board would increase director compensation expenses.
• As PINE grows, the board may consider expanding and including diverse candidates.
• PINE is externally managed by CTO Realty Growth (CTO), which has some diversity on its board and within its workforce.
• Carson Good's previous role as chair of the Greater Orlando Airport Authority (GOAA) involved awarding significant contracts to womenand minority-owned businesses.
• The CEO is asking stockholders to vote for all board candidates, including Carson Good.

Sentiment

Score: 4

Explanation: The sentiment is slightly negative due to the concerns raised by ISS and Glass Lewis regarding board diversity, which could impact investor confidence. However, the company is taking steps to address these concerns.

Positives

• All current board members have significant equity stakes in PINE, aligning their interests with stockholders.
• The board is actively searching for diverse candidates to nominate for election.
• CTO Realty Growth (CTO), PINE's external manager, demonstrates some diversity within its board and workforce.
• Carson Good has a track record of promoting diversity through his work with the Greater Orlando Airport Authority (GOAA).

Negatives

• ISS and Glass Lewis are recommending against the re-election of Carson Good due to concerns about board diversity.
• The board currently lacks racial and ethnic diversity.
• Glass Lewis has concerns about the lack of gender diversity on the board.
• Expanding the board to increase diversity would increase director compensation expenses.

Risks

• Negative recommendations from ISS and Glass Lewis could influence stockholder votes.
• Failure to address board diversity concerns could damage the company's reputation.
• Increased director compensation expenses could negatively impact stockholder returns if the board is expanded.

Future Outlook

The board may elect to expand the size of the board as PINE grows, and would expect to consider diverse candidates to fill those new board seats.

Management Comments

• The Board endeavors to ensure that the members of the Board represent a broad range of experience, qualifications, skills and attributes and, as a whole, reflects an appropriate diversity of background, experience and perspectives.
• An overriding principle is that all nominations to the Board should be based upon merit and suitability of the candidate.
• We believe that these meaningful equity stakes help to align the interests of the Board with our stockholders, and the Board believes that any candidate for election to the Board must truly understand PINEs business, have unique abilities to contribute to the Board, and should deeply care about PINE and its stockholders.
• As a triple net lease REIT, the decisions that PINEs Board makes are critical to stockholder value.

Industry Context

Board diversity is an increasingly important issue for investors and proxy advisory firms like ISS and Glass Lewis, particularly for publicly traded companies. Companies are facing pressure to improve diversity metrics and demonstrate a commitment to inclusive governance practices.

Comparison to Industry Standards

• Many REITs are facing similar scrutiny regarding board diversity.
• Companies like Simon Property Group (SPG) and Prologis (PLD) have made efforts to increase board diversity in recent years.
• The average board diversity among S&P 500 companies is increasing, setting a benchmark for other publicly traded companies.

Stakeholder Impact

• Stockholders may be influenced by the recommendations of ISS and Glass Lewis.
• Employees may be affected by the company's efforts to improve diversity.
• The company's reputation could be impacted by its handling of board diversity issues.

Next Steps

• Stockholders will vote on the election of board members.
• The board will continue its search for diverse candidates to nominate for election.
• The board may consider expanding the size of the board as PINE grows.

Key Dates

Keywords

board diversity, proxy statement, ISS, Glass Lewis, Carson Good, Alpine Income Property Trust, PINE, CTO Realty Growth, corporate governance, director election