Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 22, 2021, AvalonBay Communities, Inc. (the "Company" or "AvalonBay") announced that its Board of Directors (the "Board") had appointed Benjamin W. Schall, the Company's current President and a director, to the additional role of Chief Executive Officer effective January 3, 2022, reporting directly to the Board. Also effective January 3, 2022, Timothy J. Naughton, the Company's current Chairman of the Board and Chief Executive Officer, will retire as the Company's Chief Executive Officer and assume the role of Executive Chairman of the Board. These appointments are consistent with the expectations previously announced by the Company in a Current Report on Form 8-K filed with the Securities and Exchange Commission on December 10, 2020.

Mr. Naughton's role as Executive Chairman in 2022 will be a half time role and will include serving as a member of the Company's Management Investment Committee, assisting the Company with the identification and evaluation of strategic initiatives and technology opportunities, and assisting with business development opportunities, particularly in the Company's expansion markets. Commensurate with the reduction in Mr. Naughton's time commitment, the Compensation Committee of the Board determined that the following compensation for Mr. Naughton will apply for 2022: a base salary of $800,000; a cash bonus with a target value of $1,200,000, with target, threshold and maximum performance levels and performance metrics of a type similar to the levels and metrics applied to cash bonuses awarded in the past to Mr. Naughton in his role as Chief Executive Officer; and a performance award for the 2022-2024 performance period with a target value of $3,000,000. The performance award will use metrics and terms that are of a type similar to the metrics and terms used in recent performance awards awarded to officers and will be the same as apply generally to performance awards awarded to other officers for the 2022-2024 performance period, except that upon a termination of employment or other business relationship after the first year of the performance period by reason of "Retirement" (as defined in the Company's form of performance award agreement, a copy of which is filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020), Mr. Naughton shall vest in 100% (rather than a pro rata portion) of the award, with the ultimate amount earned for such award determined after the end of the performance period in the ordinary course.

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