Compensation provided to Ventas's executive officers generally consists of base salary, annual cash incentive compensation, long-term incentive compensation and certain perquisites and benefits.
See 2011 Proxy Statement.

Annual Cash Incentive Compensation

Annual cash incentive awards are intended to compensate executives for achieving annual corporate financial and non-financial goals and individual goals. At the beginning of each year, an earnings opportunity range, expressed as multiples of base salary and corresponding to three levels of performance (threshold, target and maximum), is established for each executive officer. Based on each executive officer's performance with respect to the corporate and individual goals, annual cash incentive awards are then determined and paid in the first quarter of the year following the performance year. 

The specific performance measures and their weightings under the annual cash incentive plan for 2010, as set by the Compensation Committee, were as follows: 

• One-year relative total shareholder return. Our total shareholder return for 2010 compared to the total shareholder return of the reference group approved by the Compensation Committee for the same period accounted for 25% of the value of the annual cash incentive award.

• Company Performance Based upon Specified Criteria: Our performance based upon certain qualitative criteria as determined by the Compensation Committee accounted for 40% of the value of the annual cash incentive award. For 2010, the specified criteria under this performance measure consisted of normalized FFO per share outcome balanced with credit profile considerations, value enhancing investments that grow our company without excessive risk, prudent balance sheet and liquidity balanced with normalized FFO growth, optimizing capital markets execution, solid management of our senior living operating portfolio, and management of tenant/borrower defaults (if any), in each case at the discretion of the Compensation Committee. While there was no specific weighting or target level attributed to any of these factors, the Compensation Committee carefully analyzed these factors in determining the value of the 2010 annual cash incentive awards.

• Individual performance. The remaining 35% of the value of the annual cash incentive award was to be determined in the discretion of the Compensation Committee taking into account the individual's performance under his or her specified management objectives established for 2010.

In January 2011, the Compensation Committee determined that each of the executive officers had achieved a high level of performance between the target and maximum levels overall under the annual cash incentive plan for 2010. Accordingly, the annual cash incentive awards granted to the executive officers were between their respective target and maximum levels.¹

Long-Term Incentive Compensation

The Compensation Committee believes that a substantial portion of each executive officer's compensation should be in the form of long-term incentive compensation. Long-term incentive awards are based on certain criteria as determined by the Compensation Committee, including the achievement of pre-established corporate and individual goals for the performance year. At the beginning of each year, an earnings opportunity range, expressed as multiples of base salary and corresponding to three levels of performance (threshold, target and maximum), is established for each executive officer. Long-term incentive awards are determined and granted in the first quarter of the year following the performance year.

For 2010, the value of the long-term incentive award was based on the following factors: expansion and growth to the extent then current market conditions are appropriate; identification and mitigation of risks; management of exposure to government-reimbursed assets; reduction of tenant/operator concentrations; pursuit of strategic consolidation opportunities; maintenance of a strong executive-level relationship with Sunrise Senior Living, Inc.; asset class diversification, opportunistic debt investments and/or international investments; continued development of our medical office building (“MOB”) business; strong credit characteristics and ratings, balance sheet and liquidity management; optimal capital markets execution; infrastructure investments; effective management of our triple-net leased properties and our senior living operating and MOB portfolios; management of the HCP, Inc. litigation appeals process; consideration of environmental/green initiatives; business ethics, reputation and industry leadership; individual performance; and other appropriate factors; in each case at the discretion of the Compensation Committee. While there was no specific weighting or target level attributed to any of these factors, the Compensation Committee carefully analyzed these factors in determining the 2010 long-term incentive awards for the executive officers.

In January 2011, the Compensation Committee determined that each of the executive officers had performed well against the performance objectives under the long-term incentive plan for 2010. Accordingly, the long-term incentive awards granted to the executive officers were equal to 100% of their respective maximum levels.¹

For 2010, long-term incentive compensation consisted of equity awards in the form of stock options (30%) and shares of restricted stock (70%) granted pursuant to our 2006 Incentive Plan. The Compensation Committee recognizes that while the annual cash incentive plan rewards management actions that impact short- and mid-term performance, the interests of our stockholders are also served by giving key employees the opportunity to participate in the long-term appreciation of our common stock through grants of stock options and restricted stock awards. Equity awards encourage management to create stockholder value over the long term because the value of the equity awards is dependent on the appreciation of our common stock over time. In addition, equity awards are an effective tool for management retention because full vesting of the awards generally requires continued employment over a number of years.

These disclosures are consistent with our philosophy and record of open communication with our stakeholders. Management, subject to careful oversight of our Board of Directors, will continue to ensure that our interests remain aligned with those of our shareholders.

¹The 2010 annual cash incentive award and 2010 long-term incentive award for Todd W. Lillibridge, the Company’s Executive Vice President, Medical Property Operations, and President and Chief Executive Officer of Lillibridge Healthcare Services, Inc., were predetermined in connection with the negotiation and execution of his employment agreement in July 2010.

Debra A. Cafaro Employment Agreement

In March 2011, we entered into an amended and restated employment agreement with Debra A. Cafaro, our Chairman of the Board and Chief Executive Officer, to eliminate certain provisions from Ms. Cafaro’s prior employment agreement to reflect compensation practices more favorable to us and our stockholders. In particular, the amended employment agreement eliminated (1) a provision that provided for payment of severance benefits if Ms. Cafaro were to terminate employment with us without Good Reason (as defined in her employment agreement) within the 30-day period commencing one year after a change of control (a so-called “modified single trigger”) and (2) certain tax gross-up payments with respect to severance and certain other benefits in connection with a change of control.

In addition, to support Ms. Cafaro’s continued retention, in recognition of her superior performance and contributions to our success, and in consideration for the elimination of the change of control “modified single trigger” and change of control tax gross-up payments from her prior employment agreement, Ms. Cafaro received a special equity incentive award in the form of 152,934 shares of restricted stock. These shares vest in five equal annual installments beginning on the first anniversary of the date of grant. The shares are subject to accelerated vesting in the event of death, disability, termination of employment by us without Cause (as defined in Ms. Cafaro’s employment agreement) or termination of employment by Ms. Cafaro with Good Reason but are not subject to accelerated vesting solely upon a change of control.

Share Withholding Program to Satisfy Minimum Tax Withholding Obligations

We have a Share Withholding Program under our 2006 Incentive Plan. The Share Withholding Program permits employees who receive restricted share awards to satisfy their minimum tax withholding obligations from the restricted shares as they vest. If an employee elects to participate in the Share Withholding Program with respect to any vesting of restricted shares, we will deduct from the restricted shares due to the employee that number of shares equal in value to the employee's minimum tax withholding obligation. If an executive employee participates in the Share Withholding Program, the employee will be obligated to file a Form 4 for the withheld shares.

Sales of Shares Pursuant to Commission Rule 10b5-1

Certain of our executive officers from time to time may adopt non-discretionary, written trading plans that comply with Commission Rule 10b5-1, or otherwise monetize their equity-based compensation. Commission Rule 10b5-1 provides executives with a method to monetize their equity-based compensation in an automatic and non-discretionary manner over time. All such activities will be subject to compliance with our Minimum Stock Ownership Plan, policies, and applicable laws and regulations.

Debra A. Cafaro 10b5-1 Plans and May 2011 Sale 

As of November 25, 2011, Debra A. Cafaro, our Chairman and Chief Executive Officer, and the Cafaro Trust (as defined below) beneficially owned 1.7 million shares of our common stock (including options). See Minimum Stock Ownership Plan for Executives.

On May 25, 2011, Ms. Cafaro adopted a written, non-discretionary sales plan respecting her Ventas shares previously awarded to her that complies with the requirements of Rule 10b5-1(c) promulgated under the Securities Exchange Act of 1934, as amended (the "Cafaro Plan"). On the date the Cafaro Plan was adopted, the closing price of our common stock on the New York Stock Exchange was $54.75 per share. Separately, on May 24, 2011, Ms. Cafaro sold an aggregate of 74,070 shares owned by her at an average price of $55.01 per share (“May 2011 Sale”). The shares sold represented all the net shares that vested in December 2010 and the first quarter of 2011 from previously awarded compensation. The net proceeds (before tax) of this May 2011 Sale were approximately $4.1 million.

The Cafaro Plan covers the sale of up to (1) 210,000 shares of our common stock (including those to be acquired through the exercise of options) at an average minimum sale price of $67/share; and (2) 93,631 shares of our common stock to be vested in December 2011 and the first quarter of 2012 at a minimum sale price of $55/share, in each case subject to certain conditions.

On May 25, 2011, a trust (the "Cafaro Trust") of which Ms. Cafaro's spouse is the trustee also adopted a written, non-discretionary sales plan that complies with Commission Rule 10b5-1 (the "Trust Plan"). The Cafaro Trust is the owner of options to acquire 422,720 shares of our common stock.

The Trust Plan covers the sale, at an average minimum sale price of $67 per share, of up to 30,000 shares of our common stock expected to be acquired by the Cafaro Trust through the exercise of options, subject to certain conditions.

Both the Cafaro Plan and the Trust Plan are designed for estate, tax and financial planning purposes. Both plans are expected to be in effect until June 2012 and provide that any shares not sold on a given sale date due to an inability to execute the sale at or above the minimum sale price are carried forward to the next succeeding trading day(s) until such condition is met. In every year since 2002, Ms. Cafaro has sold shares of our common stock through similar divestitures and 10b5-1 plans.

T. Richard Riney 10b5-1 Plan 

As of November 25, 2011, T. Richard Riney, our Executive Vice President, Chief Administrative Officer, General Counsel and Corporate Secretary, beneficially owned 0.4 million shares of our common stock (including options). See Minimum Stock Ownership Plan for Executives.

On November 17, 2011, Mr. Riney adopted a written non-discretionary sales plan respecting his Ventas shares previously awarded to him that complies with the requirements of Rule 10b5-1(c) promulgated under the Securities Exchange Act of 1934, as amended (the “Riney Plan”). On the date the Riney Plan was adopted, the closing price of our common stock on the New York Stock Exchange was $51.46 per share.

The Riney Plan covers the sale, at an average minimum sale price of $51/share, of up to 146,704 shares of our common stock expected to be acquired by Mr. Riney through the exercise of options, subject to certain conditions. The Riney Plan is designed for estate, tax and financial planning purposes. The Riney Plan is expected to be in effect until January 2013 and provides that any shares not sold on a given sale date due to an inability to execute the sale at or above the minimum sale price are carried forward to the next succeeding trading day(s) until such condition is met.

Updated: November 25, 2011