SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

(Rule 14a-101)

 

INFORMATION REQUIRED IN PROXY STATEMENT

Schedule 14A Information

 

Proxy Statement Pursuant to Section 14(a) of the Securities

Exchange Act of 1934 (Amendment No.     )

 

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Filed by a Party other than the Registrant o

 

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o Preliminary Proxy Statement

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þ Definitive Proxy Statement

o Definitive Additional Materials

o Soliciting Material Pursuant to §240.14a-12

 

W. P. Carey & Co. LLC

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

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o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

 

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o Fee paid previously with preliminary materials.

 

 

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April 29, 2011

 

 

Notice of Annual Meeting of Shareholders
To Be Held Thursday, June 16, 2011

 

 

Dear W. P. Carey & Co. LLC Shareholder:

 

The 2011 Annual Meeting of Shareholders of W. P. Carey & Co. LLC will be held at The Times Center, 242 West 41st Street, New York, NY 10018 on Thursday, June 16, 2011 at 4:00 p.m. for the following purposes:

 

 

Only shareholders who owned stock at the close of business on April 19, 2011 are entitled to vote at the meeting. W. P. Carey & Co. LLC mailed the attached Proxy Statement, proxy card and its Annual Report to shareholders on or about May 6, 2011.

 

By Order of the Board of Directors

 

 

Susan C. Hyde

Managing Director and Secretary

 

Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. You may vote your shares by using the telephone or through the Internet. Instructions for using these services are set forth on the enclosed proxy card. You may also vote your shares by marking your votes on the enclosed proxy card, signing and dating it and mailing it in the business reply envelope provided. If you attend the Annual Meeting, you may withdraw your proxy and vote in person.

 

Important Notice Regarding Availability of Proxy Materials
For the 2011 Annual Meeting of Shareholders to Be Held on June 16, 2011

 

This Proxy Statement and the Annual Report to Shareholders
are available at www.proxyvote.com.

 

TABLE OF CONTENTS

 

W. P. CAREY & CO. LLC

 

 

 

PROXY STATEMENT
APRIL 29, 2011

 

 

 

 

 

The accompanying Proxy is solicited by the Board of Directors of W. P. Carey & Co. LLC, a Delaware limited liability company, for use at its annual meeting of shareholders (the “Annual Meeting”) to be held at The Times Center, 242 West 41st Street, New York, NY 10018 on Thursday, June 16, 2011 at 4:00 p.m., or any adjournment thereof. As used herein, “W. P. Carey & Co.,” the “Company,” “we,” and “us” refer to W. P. Carey & Co. LLC. References in this Proxy Statement to W. P. Carey & Co. LLC or the Company include W. P. Carey & Co. LLC’s affiliates and subsidiaries, except where the context otherwise indicates.

 

Who is soliciting my proxy?

 

The Directors of W. P. Carey & Co. LLC are sending you this Proxy Statement and enclosed proxy.

 

Why did I receive a Notice in the mail regarding the Internet availability of the proxy materials this year instead of a paper copy of the proxy materials?

 

We are using a rule of the Securities and Exchange Commission, known as the SEC, that allows companies to furnish their proxy materials over the Internet. As a result, we are mailing to many of our shareholders a Notice about the Internet availability of the proxy materials instead of a paper copy of the proxy materials. All shareholders receiving the Notice will have the ability to access the proxy materials over the Internet and request to receive a paper copy of the proxy materials by mail. Instructions on how to access the proxy materials over the Internet or to request a paper copy may be found on the Notice.

 

Why didn’t I receive a Notice about the Internet availability of the proxy materials?

 

We are providing some of our shareholders, including shareholders who have previously requested to receive paper copies of the proxy materials, with paper copies of the proxy materials instead of a Notice about the Internet availability of the proxy materials.

 

How can I access the proxy materials over the Internet?

 

Your Notice about the Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on how to view our proxy materials for the Annual Meeting on the Internet.

 

How may I obtain a paper copy of the proxy materials?

 

Shareholders receiving a Notice about the Internet availability of the proxy materials will find instructions about how to obtain a paper copy of the proxy materials on their Notice. All shareholders who do not receive the Notice will receive a paper copy of the proxy materials by mail.

 

Who is entitled to vote?

 

W. P. Carey & Co. LLC’s shareholders as of the close of business on April 19, 2011 (the “Record Date”) are entitled to vote at the Annual Meeting.

 

How do I vote?

 

You may vote your shares either by attending the Annual Meeting, by telephone, through the Internet, or by mail by following the instructions provided in the Notice or the printed copy of the proxy materials. If you hold your shares in “street name” through a broker or other nominee, you must follow the instructions provided by your broker or nominee to vote your shares. If you are a shareholder of record and received a printed copy of the proxy materials, to

vote by proxy, sign and date the enclosed proxy card and return it in the enclosed envelope. If you return your proxy card but fail to mark your voting preference, your shares will be voted FOR each of the nominees listed in Proposal One, FOR the ratification of the appointment of the independent registered public accounting firm in Proposal Two, FOR the advisory vote related to executive compensation in Proposal Three, FOR the “once every three years” option regarding the frequency of future advisory votes on executive compensation, and in the discretion of the proxy holders if any other matter properly comes before the meeting. We suggest that you return a proxy even if you plan to attend the Annual Meeting.

 

May I revoke my proxy?

 

Yes, if you are a shareholder of record, you may revoke your proxy at any time before the meeting by notifying W. P. Carey & Co. LLC’s Secretary or submitting a new proxy, or by voting in person at the Annual Meeting. You should mail any notice of revocation of proxy to Susan C. Hyde, Secretary, W. P. Carey & Co. LLC, 50 Rockefeller Plaza, New York, New York 10020.

 

How many shares may vote?

 

At the close of business on the Record Date, W. P. Carey & Co. LLC had 39,633,671 shares of its Common Stock outstanding and entitled to vote. Every shareholder is entitled to one vote for each share held.

 

What is a quorum?

 

A quorum is the presence, either in person or represented by proxy, of a majority of the shares entitled to vote at the meeting. There must be a quorum for the meeting to be held.

 

How many votes are required at the meeting for shareholder approval?

 

Assuming a quorum is present, with respect to the election of Directors, each share may be voted for as many individuals as there are Directors to be elected. A plurality of all the votes cast shall be sufficient to elect a Director. With respect to Proposal Two, the ratification of the appointment of our independent registered public accounting firm, the affirmative vote of a majority of the votes cast by the shareholders, in person or by proxy and entitled to vote, is necessary for approval. With respect to the advisory vote related to executive compensation in Proposal Three, the proposal is non-binding but the Board will review and consider the outcome of the vote when making future decisions on executive compensation. With respect to the frequency of future advisory votes related to executive compensation in Proposal Four, the proposal is also non-binding but the Board will consider the option that receives the greatest number of votes cast to be the preference of our shareholders. Abstentions and broker “non-votes,” which arise when a broker cannot vote on a particular matter because the matter is not routine and the beneficial owner of the shares has not given applicable instructions to the broker, are counted for quorum purposes but are not counted as votes for or against any matter. For these reasons, for any matter before the shareholders at the meeting, abstentions and broker “non-votes” have no effect on whether the votes cast at the meeting are enough for approval of the matter.

 

How will voting on shareholder proposals be conducted?

 

We do not know of any other matters that are likely to be brought before the meeting. However, if any other matters properly come before the Annual Meeting, your signed proxy gives authority to the persons named in the enclosed proxy to vote your shares on such matters in accordance with their best judgment to the extent permitted by applicable law.

 

Who will pay the cost for this proxy solicitation?

 

W. P. Carey & Co. LLC will pay the cost of preparing, assembling and mailing the Notice about Internet availability, this Proxy Statement, the Notice of Meeting and the enclosed proxy card. In addition to the solicitation of proxies by mail, we may utilize some of the officers and employees of our wholly-owned subsidiaries, Carey Asset Management Corp. and Carey Management Services, Inc. (who will receive no compensation in addition to their regular salaries), to solicit proxies personally and by telephone. Currently, we do not intend to retain a solicitation

firm to assist in the solicitation of proxies. We may request banks, brokers and other custodians, nominees and fiduciaries to forward copies of the proxy materials to their principals and to request authority for the execution of proxies and will reimburse such persons for their expenses in so doing.

 

At the Annual Meeting, you and the other shareholders will elect fourteen Directors, each to hold office until the next annual meeting of shareholders except in the event of death, resignation or removal. If a nominee is unavailable for election, the Board may reduce its size or designate a substitute. If a substitute is designated, proxies voting on the original nominee will be cast for the substituted nominee. Currently, the Board is unaware of any circumstances that would result in a nominee being unavailable. The Company’s Amended and Restated Limited Liability Company Agreement requires that the number of seats constituting the entire Board of Directors be at least five and no more than fifteen, with the exact number of seats to be determined from time to time by Board resolution. The current Board consists of twelve seats, with eleven directors and one vacancy as a result of the resignation of Gordon F. DuGan, the former Chief Executive Officer of the Company, in July 2010. At its March 2011 meeting, the Board increased the number of seats to fourteen effective as of the date of the Annual Meeting and nominated Axel K.A. Hansing, Dr. Richard C. Marston, and Nick J.M. van Ommen to fill the three open seats. Except for Messrs. Hansing, Marston and van Ommen, all of the nominees are now members of the Board of Directors.

 

Unless otherwise specified, proxies will be voted for the election of the named nominees, each of whom was recommended by the Nominating and Corporate Governance Committee and approved by the Board. Detailed biographical and other information on each nominee for election to the Board of Directors is provided below. Following each nominee’s biographical information, we have provided information concerning the particular attributes, experience, and/or skills that have led the Board to determine that each nominee should serve as a Director. The Board recommends a vote FOR each of the nominees set forth below. Assuming the presence of a quorum, the affirmative vote of a plurality of the votes cast by the shareholders is required to elect each nominee.

 

Wm. Polk Carey

AGE: 80

Director Since: 1996

 

Mr. Carey, Chairman of the Board of Directors of W. P. Carey & Co. LLC, has been active in lease financing since 1959 and a specialist in net leasing of corporate real estate property since 1964. Mr. Carey also serves as Chairman of the Board of Corporate Property Associates 14 (“CPA^®:14”), Corporate Property Associates 15 (“CPA^®:15”), Corporate Property Associates 16 — Global (“CPA^®:16 — Global”) and Corporate Property Associates 17 — Global (“CPA^®:17 — Global” and, together with CPA^®:14, CPA^®:15, and CPA^®:16 — Global, the “CPA^® REITs”), which are publicly owned, non-traded real estate investment trusts sponsored by the Company. He also served as the Co-Chief Executive Officer of W. P. Carey & Co. LLC, CPA^®:14, CPA^®:15 and CPA^®:16 — Global from 2002 until March 2005 and as Chairman of the Board of Corporate Property Associates 12 (“CPA^®:12”) from July 1993 to December 2006, when it merged into CPA^®:14. Before founding W. P. Carey & Co., Inc. in 1973, he served as Chairman of the Executive Committee of Hubbard, Westervelt & Mottelay (subsequently Merrill Lynch Hubbard), head of Real Estate and Equipment Financing at Loeb Rhoades & Co. and Vice Chairman of the Investment Banking Board and Director of Corporate Finance of duPont Glore Forgan Inc. A graduate of the University of Pennsylvania’s Wharton School, Mr. Carey also received his Sc.D. honoris causa from Arizona State University, D.C.S. honoris causa from The City University of New York and D.C.L. honoris causa from the University of the South. He is a Trustee of The Johns Hopkins University and of other educational and philanthropic institutions. He serves as Chairman and a Trustee of the W. P. Carey Foundation and has served as Chairman of the Penn Institute for Economic Research. In the fall of 1999, Mr. Carey was Executive-in-Residence at Harvard Business School. Mr. Carey is the brother of Francis J. Carey, a Director. As founder, Chairman and principal shareholder of the Company, and through a long and distinguished record of business success and philanthropic activities, Mr. Carey’s demonstrated leadership skills, business expertise, and commitment to

community service provides strong leadership for the Board and critical thinking with respect to the Company’s strategy and performance and helps ensure that shareholder interests are well represented during Board deliberations.

 

Trevor P. Bond

AGE: 49

Director Since: 2007

 

Mr. Bond has served as President and Chief Executive Officer of W. P. Carey & Co. LLC and Chief Executive Officer of each of the CPA^® REITs since September 2010, having served as Interim Chief Executive Officer since July 2010. Until his appointment as Interim Chief Executive Officer, Mr. Bond was a member of the Investment Committee, as described below. Mr. Bond served as an Independent Director and a member of the Audit Committees of CPA^®:14, CPA^®:15 and CPA^®:16 — Global from February 2005 to April 2007. Mr. Bond also serves as Chairman of the Board of Directors of Carey Watermark Investors Incorporated (“CWI”), a publicly owned, non-listed real estate investment trust sponsored by the Company. Mr. Bond has been the managing member of a private investment vehicle investing in real estate limited partnerships, Maidstone Investment Co., LLC, since 2002. Mr. Bond served in several management capacities for Credit Suisse First Boston (“CSFB”) from 1992 to 2002, including: co-founder of CSFB’s Real Estate Equity Group, which managed approximately $3 billion of real estate assets; founding team member of Praedium Recovery Fund, a $100 million fund managing distressed real estate and mortgage debt; and as a member of the Principal Transactions Group managing $100 million of distressed mortgage debt. Prior to CSFB, Mr. Bond served as an associate to the real estate and finance departments of Tishman Realty & Construction Co. and Goldman Sachs & Co. in New York. Mr. Bond also founded and managed an international trading company from 1985 to 1987 that sourced industrial products in China for U.S. manufacturers. Mr. Bond received an M.B.A. from Harvard University. Mr. Bond brings to the Board over 25 years of real estate experience in several sectors, including finance, development, investment and asset management, across a range of property types, as well as direct experience in Asia. As Chief Executive Officer, Mr. Bond makes information and insight about the Company’s business directly available to the Directors in their deliberations. Mr. Bond is the son of the second husband of the daughter of the half sister of Wm. Polk Carey, the Company’s Chairman.

 

Francis J. Carey

AGE: 85

Director Since: 1996

 

Mr. Carey was elected in 2000 as Vice Chairman of the Board of Directors and Chairman of the Executive Committee of the Board of Directors of W. P. Carey & Co. LLC. Mr. Carey retired from his position as Vice Chairman in March 2005; he continues to serve as Chairman of the Executive Committee and as Chief Ethics Officer of the Company. Mr. Carey served as Chairman, Chief Executive Officer and a Director of Carey Diversified LLC, the predecessor of W. P. Carey & Co. LLC, from 1997 to 2000. From 1987 to 1997, Mr. Carey held various positions with W. P. Carey & Co., Inc., a company wholly-owned by Wm. Polk Carey, and its affiliates, including as President and a Director of W. P. Carey & Co., Inc. and as President and Director of CPA^®:10, CIP^® and CPA^®:12, REITs organized by those entities. Mr. Carey also served as a Director of W. P. Carey & Co., Inc. from its founding in 1973 until 1997 and has been President and a Director of that company from 2000 to the present. He has also served since 1990 as President and a Trustee of the W. P. Carey Foundation. Prior to 1987, he was senior partner in Philadelphia, head of the real estate department nationally, and a member of the Executive Committee of Reed Smith LLP, a law firm. He also served as law secretary of the Supreme Court of Pennsylvania from 1950 to 1951 and as a member of the Executive Committee and Board of Managers of the Western Savings Bank of Philadelphia from 1972 until its takeover by another bank in 1982, and he is a former Chairman of the Real Property, Probate and Trust Section of the Pennsylvania Bar Association. He served as a member of the Board of Overseers of the School of Arts and Sciences at the University of Pennsylvania from 1983 to 1990. He has served as a Trustee of Germantown Academy in Fort Washington, Pennsylvania from 1961 to the present and as its President from 1966 to 1972. He has also served as a member of the Board of Trustees and Executive Committee of the Investment Program Association from 1990 to 2000, and as its Chairman from 1998 to 2000, and served on the Business Advisory Council of the Business Council for the United Nations from 1994 to 2002. He has served since 2002 on the Board

of Trustees of the Maryland Historical Society and from 2006 to 2010 as a Vice President and a member of its Executive Committee. Mr. Carey has also served from 2004 to 2007 as Chairman and Senior Warden of St. Martin’s in the Field Episcopal Church in Biddeford Pool, Maine, and currently serves as its Warden at Large. He attended Princeton University, holds A.B. and J.D. degrees from the University of Pennsylvania, and completed executive programs in corporate finance and accounting at Stanford University Graduate School of Business and the Wharton School of the University of Pennsylvania. Mr. Carey is the brother of Wm. Polk Carey, the Company’s Chairman. In addition to his 40 years of legal experience, Mr. Carey brings to the Board extensive executive experience derived from serving as the chief executive and/or as a member of the executive committee at the corporations and other organizations noted above.

 

Nathaniel S. Coolidge*

AGE: 72

Director Since: 2002

 

Mr. Coolidge currently serves as Chairman of the Investment Committee. He has previously served as Chairman of the Audit Committee and is currently a member of that Committee. Mr. Coolidge, former Senior Vice President of John Hancock Mutual Life Insurance Company (“John Hancock”), retired in 1996 after 23 years of service. From 1986 to 1996, Mr. Coolidge headed the John Hancock Bond and Corporate Finance Department, which was responsible for managing its entire fixed income investments portfolio. Prior to 1986, Mr. Coolidge served as Second Vice President and Senior Investment Officer of John Hancock. Mr. Coolidge is a graduate of Harvard University and served as a U.S. Naval officer. Mr. Coolidge brings to the Board over 30 years of experience analyzing corporate credits, including ten years as the head of a department managing more than $20 billion of private placements, public bonds, and private equity securities.

 

Eberhard Faber, IV*

AGE: 74

Director Since: 1998

 

Mr. Faber currently serves as Chairman of the Nominating and Corporate Governance Committee. Mr. Faber held various posts with Eberhard Faber Inc., the worldwide manufacturer of writing products and art supplies, serving as Chairman and Chief Executive Officer from 1973 until 1987, when the company merged into Faber-Castell Corporation. He served as a Director of the Federal Reserve Bank of Philadelphia from 1980 to 1986, chairing its Budget and Operations Committee, and was Chairman of the Board of Citizen’s Voice Newspaper from 1992 to 2002. Currently, he is an emeritus director of PNC Bank, N.A., where he served as a member of the Northeast Pennsylvania Advisory Board of PNC Bank, N.A. from 1998 to 2011 and as a Director from 1994 to 1998, and a Trustee of the Geisinger Wyoming Valley Hospital and the Eberhard L. Faber Foundation. He was a Borough Councilman of Bear Creek Village from 1994 to 2005. In addition to graduating from Princeton University magna cum laude, he was a member of Phi Beta Kappa while serving as Chairman of The Daily Princetonian, and was a Fulbright Scholar and teaching fellow at the University of Caen in France. Mr. Faber also served as a Director of First Eastern Bank from 1986 to 1992 and as the Chairman of the Board from 1992 to 1994, when the bank was sold to PNC Bank, N.A. He also served as Chairman of the Board of King’s College in Wilkes-Barre, Pennsylvania from 1996 through 2011. Mr. Faber brings to the Board extensive business, corporate governance and financial expertise and experience.

 

Benjamin H. Griswold, IV*

AGE: 70

Director Since: 2006

 

Mr. Griswold currently serves as Lead Director and Chairman of the Compensation Committee. Mr. Griswold is a partner and chairman of Brown Advisory, a Baltimore-based firm providing asset management and strategic advisory services in the U.S. and abroad. Prior to joining Brown Advisory as senior partner in March 2005, Mr. Griswold had served as Senior Chairman of Deutsche Bank Securities Inc. He had served as Senior Chairman of Deutsche Banc Alex. Brown, the predecessor of Deutsche Bank Securities Inc., since the acquisition of Bankers Trust by Deutsche Bank in 1999. Mr. Griswold began his career at Alex. Brown & Sons in 1967, and became a partner of the firm in 1972. He headed the company’s research department, equity trading and equity division prior

to being elected Vice Chairman of the Board and Director in 1984, and Chairman of the Board in 1987. Upon the acquisition of Alex. Brown by Bankers Trust New York Corporation in 1997, he became Senior Chairman of BT Alex. Brown. Mr. Griswold is a member of the boards of Stanley Black & Decker, Baltimore Life Insurance, and Flowers Foods. A former Director of the New York Stock Exchange, he is active in civic affairs in the Baltimore area and serves on the board of Johns Hopkins University and heads the endowment board of the Baltimore Symphony Orchestra. Mr. Griswold received his B.A. from Princeton University, his M.B.A. from Harvard University and served as a U.S. Army officer. Mr. Griswold brings to the Board 44 years of experience in the investment business, first as an investment banker (38 years) and then as an investment advisor (6 years). He has extensive experience with and understanding of capital markets as well as security analysis and valuation. His board experience and his past experience as a director of the New York Stock Exchange give him a detailed understanding of corporate governance in general and audit, compensation, governance, and finance committee functions in particular.

 

Dr. Lawrence R. Klein*

AGE: 90

Director Since: 1998

 

Dr. Klein currently serves as Chairman of the Economic Policy Committee. He is Benjamin Franklin Professor Emeritus of Economics and Finance at the University of Pennsylvania and its Wharton School, having joined the faculty of the University in 1958. Dr. Klein is a holder of earned degrees from the University of California at Berkeley and the Massachusetts Institute of Technology, and he has been awarded the Alfred Nobel Memorial Prize in Economic Sciences as well as a number of honorary degrees. Founder of Wharton Econometric Forecasting Associates, Inc., Dr. Klein has been counselor to various corporations, governments and government agencies, including WealthEffect.com, the Federal Reserve Board and the President’s Council of Economic Advisors. Dr. Klein joined W. P. Carey & Co., Inc. in 1984 as Chairman of the Economic Policy Committee and as a Director. He also serves as a Trustee of the W. P. Carey Foundation. Dr. Klein serves as a Director of a software company, Prognoz, in Washington, D.C. Dr. Klein is one of the world’s foremost economists and brings to the Board extensive knowledge of a variety of economic issues.

 

Robert E. Mittelstaedt, Jr.*

AGE: 67

Director Since: 2007

 

Mr. Mittelstaedt currently serves as the Chairman of the Strategic Planning Committee. Mr. Mittelstaedt has served as dean of the W. P. Carey School of Business at Arizona State University since June 2004. He also serves on the Boards of Directors of Innovative Solutions & Support, Inc. and Laboratory Corporation of America Inc. Between 1973 and 2004, Mr. Mittelstaedt served in numerous positions at The Wharton School, most recently as Vice Dean, Executive Education, and Director of the Aresty Institute of Executive Education. From 1985-1990 he co-founded, developed and sold Intellego, Inc., a company engaged in practice management, systems development and service bureau billing operations in the medical industry. He formerly served as a member of the corporate Boards of Directors of: A.G. Simpson Automotive, Inc., Dresser Insurance, Inc., HIP Foundation, Inc. and Intelligent Electronics, Inc. Mr. Mittelstaedt received his B.S. (Mechanical Engineering) from Tulane University and his MBA from the Wharton School at the University of Pennsylvania. Mr. Mittelstaedt brings to the Board over 30 years of strategic planning experience covering a range of businesses. He also brings extensive corporate governance expertise, having developed and taught courses on corporate governance matters for over 18 years.

 

Charles E. Parente*

AGE: 70

Director Since: 2006

 

Mr. Parente currently serves as Chairman of the Audit Committee. Mr. Parente also serves as Chief Executive Officer of Pagnotti Enterprises, Inc., a diversified holding company whose primary business includes workers’ compensation insurance, real estate, anthracite coal mining preparation and sales, and as Chairman and CEO of CP Media, LLC, a holding company that owns broadcast television stations. From 1988 through 1993, he served as President and CEO of C-TEC Corporation, a telecommunications and high-technology company. From 1970 through 1987, Mr. Parente was CEO and Managing Partner of Parente Randolph, LLC, the leading independent

accounting and consulting firm in Pennsylvania and among the top 30 in the country. Before this, from 1962 through 1970, he was a Principal at Deloitte, Haskins & Sells, a public accounting firm. Mr. Parente is a member of the Board of Directors of: Sordoni Construction Services, Inc., a commercial construction and real estate development company; Circle Bolt & Nut Co., a distributor of industrial products; and Frank Martz Coach Co. & Subsidiaries, a diversified transportation company. Mr. Parente also served as a Director of Community Bank System, Inc., a bank holding company, and its affiliated bank, Community Bank, N.A., from May 2004 through December 2010. He is active with various civic and community organizations, is past Chairman of the Board of Directors of the Wyoming Valley Health Care System, Inc. and is a board member of The Luzerne Foundation and King’s College, where he also served as Chairman from 1989 through 1998. He is a Certified Public Accountant and is a member of the American Institute of Certified Public Accountants. He graduated cum laude from King’s College in Wilkes-Barre, PA. Mr. Parente served as a director of CPA^®:12, CPA^®:14 and CPA^®:15 from 2003 until 2006 and was a member of the Board of Directors of Bertels Can Company, a private manufacturer of metal cans for the gift industry, from 1993 to 2006. Mr. Parente brings to the Board extensive knowledge of accounting matters as well as executive experience.

 

Dr. Karsten von Köller*

AGE: 71

Director Since: 2003

 

Dr. von Köller is currently Chairman of Lone Star Germany GmbH. He also serves as Chairman of the Supervisory Boards of Düsseldorfer Hypothekenbank AG and MHB Bank AG. He is also Vice Chairman of the Supervisory Boards of IKB Deutsche Industriebank AG, where he is a member of the Audit Committee, and Corealcredit Bank AG. Dr. von Köller was Chief Executive Officer of Eurohypo AG until 2003. He was also Chairman and a Member of the Board of Managing Directors of Allgemeine HypothekenBank Rheinboden AG from December 2005 until December 2006 and a director of FranconoWest AG, a residential real estate trust in Germany, from August 2007 until May 2008. Dr. von Köller brings to the Board Europe-wide experience in financing commercial real estate transactions as well as international bond market experience.

 

Reginald Winssinger*

AGE: 68

Director Since: 1998

 

Mr. Winssinger is founder and Chairman of National Portfolio, Inc., an Arizona-based firm involved in acquisition, financing, management and construction of commercial, multi-family, industrial and land development real estate projects. He spent ten years at the Winssinger family real estate company, a third-generation Belgian real estate enterprise, before coming to the United States in 1979 to expand their investment activity. Over a 20-year period he created and managed a $500 million portfolio of U.S. real estate investment for U.S. and European investors. He later formed Horizon Real Estate Group, Inc., doing business as NAI Horizon in Phoenix, Arizona, a full service real estate firm providing brokerage, property management, construction management and real estate consulting services. He also serves as a Director of Carey Storage Asset Management, LLC, a subsidiary of the Company. Mr. Winssinger currently manages multiple companies with real estate investments primarily in Arizona, California and Texas. He also serves as a Director of Pierce-Eislen, Inc., and is the Honorary Consul of Belgium to Arizona. He attended the Sorbonne and is an alumnus of the University of California at Berkeley. Mr. Winssinger brings extensive experience in real estate, having worked in the industry for over 45 years. During his career, he has developed or managed several million square feet in residential and commercial real estate.

 

Axel K.A. Hansing*

AGE: 68

Nominee

 

Mr. Hansing is a Partner at Coller Capital, Ltd., a global leader in the private equity secondary market, and is responsible for the origination, execution and monitoring of investments. Prior to joining Coller Capital in 2000, Mr. Hansing was Chief Executive Officer of Hansing Associates, a corporate finance boutique, which he founded in 1994. He was previously Managing Director of Equitable Capital Management (New York and London), head of the International Division of Bayerische Hypotheken und Wechsel-Bank in Munich and New York, and spent four years

with Merrill Lynch International Banking in London and Hong Kong. Mr. Hansing attended the Advanced Management Program at Harvard Business School. Mr. Hansing has served as a member of the Investment Committee since September 2008 and a member of the board of directors of W. P. Carey International LLC (“WPCI”, as described below) since December 2008. Mr. Hansing brings to the Board over 35 years of experience in international corporate real estate and investment banking, including private equity investment both as a General Partner and a Limited Partner.

 

Dr. Richard C. Marston*

AGE: 68

Nominee

 

Dr. Marston is the James R.F. Guy Professor of Finance and Economics at the Wharton School of the University of Pennsylvania, having joined the faculty of the University in 1972. Dr. Marston holds degrees from Yale College (summa cum laude), Oxford University (where he was a Rhodes Scholar), and Massachusetts Institute of Technology (PhD), and has been awarded numerous honors, fellowships and grants throughout the United States, Europe and Asia. Dr. Marston has been a consultant on foreign exchange and international finance to government agencies like the U.S. Treasury and the Federal Reserve and the International Monetary Fund and has advised firms such as Citigroup, JP Morgan, and Morgan Stanley on investment policy. He currently serves as an advisor to Morgan Stanley’s Portfolio Advisory Services and is also an advisor to several family offices. Dr. Marston has served as a member of the Investment Committee since September 2010 and a member of the board of directors of WPCI since June 2009. Dr. Marston brings to the Board close to four decades of financial and economic industry experience.

 

Nick J.M. van Ommen*

AGE: 64

Nominee

 

Mr. van Ommen served as Chief Executive Officer of the European Public Real Estate Association (EPRA) from 2000 to 2008, promoting, developing and representing the European public real estate sector. He has over three decades of financial industry experience, serving in various roles in the banking, venture capital and asset management sectors. Mr. van Ommen currently serves on the supervisory boards of several companies, including Babis Vovos International Construction SA, a listed real estate company in Greece, Intervest Retail and Intervest Offices, listed real estate companies in Belgium, BUWOG / ESG, a residential leasing and development company in Austria, and IMMOFINANZ, a listed real estate company in Austria. Mr. van Ommen has served as a member of the Investment Committee since September 2008 and a member of the board of directors of WPCI since December 2008. Mr. van Ommen brings to the Board over 30 years of financial and real estate experience, particularly in Europe.

 

* Independent Director/Nominee

 

Members of the Board of Directors have been appointed to serve on various committees of the Board of Directors. The Board of Directors has currently established a Compensation Committee, an Audit Committee, and a Nominating and Corporate Governance Committee, the functions of which are summarized below. The Board of Directors has also established an Executive Committee, which has the authority, subject to certain limitations, to exercise the powers of the Board of Directors during intervals between meetings of the full Board of Directors, an Economic Policy Committee, which is available to render advice on economic policy matters affecting the Company, and a Strategic Planning Committee, which reviews and oversees the Company’s strategic planning processes.

 

 

 

The Board has adopted written charters for each of the Compensation, Audit, and Nominating and Corporate Governance Committees, each of which can be viewed on our website, www.wpcarey.com, under the heading “Investor Relations.”

 

Certain members of the Board are also members of the Investment Committee of Carey Asset Management, a subsidiary of the Company that provides advisory services to the CPA^® REITs and may also provide services to the Company. Before a property is acquired by a CPA^® REIT, the transaction is reviewed by the Investment Committee to ensure that it satisfies the relevant CPA^® REIT’s investment criteria. The Investment Committee is not directly involved in originating or negotiating potential investments but instead functions as a separate and final step in the investment process. In addition, the Investment Committee, at the request of our Board of Directors or Executive Committee, may also review any initial investment in which W. P. Carey & Co. LLC proposes to engage directly. Current Directors of W. P. Carey & Co. LLC who also serve on the Investment Committee are Messrs. Coolidge (Chairman), Klein and von Köller. Messrs. Hansing, Marston, and van Ommen, nominees for election as Directors at the Annual Meeting, are also current directors of Carey Asset Management and its Investment Committee.

 

 

 

The Board of Directors has determined that none of the Directors who currently serve on the Compensation, Audit, or Nominating and Corporate Governance Committees has a relationship to W. P. Carey & Co. LLC that may interfere with his independence from W. P. Carey & Co. LLC and its management, and therefore all such Directors are “independent” as defined in the Listing Standards of the New York Stock Exchange, which we also refer to in this Proxy Statement as the Exchange. Directors who serve on the Audit Committee also satisfy the SEC’s standards for audit committee membership.

 

There were four regular and five special Board meetings held in 2010, and each Director attended at least seventy-five percent of the aggregate of such meetings and of the meetings held during the year by the Committees of which he was a member. Under our Corporate Governance Guidelines, each Director is required to make every effort to attend each Board meeting and applicable Committee meetings, except in unavoidable circumstances. Although there is no specific policy regarding Director attendance at meetings of shareholders, Directors are invited and encouraged to attend. All Directors attended the annual meeting of shareholders held on June 10, 2010.

 

In July 2010, the Board of Directors elected Benjamin H. Griswold, IV as Lead Director, replacing Eberhard Faber, IV, who had served as Lead Director since December 2006. The primary responsibility of the Lead Director is to preside over periodic executive sessions of the Board in which management Directors and other members of management do not participate.

 

The Board of Directors has adopted a structure whereby the founder and principal shareholder of the Company, Mr. Wm. Polk Carey, is the Chairman of the Board. The Board believes that having Mr. Carey as Chairman provides strong leadership for the Board and critical thinking with respect to the Company’s strategy and performance and helps ensure that shareholder interests are well represented during Board deliberations. The Company’s Chief Executive Officer, Trevor P. Bond, is also a member of the Board of Directors. The Board considers the Chief Executive Officer’s participation to be important to make information and insight about the Company’s business and its operations directly available to the Directors in their deliberations. Finally, the Board feels that, as a former

Chairman of the Board, Mr. Griswold is well-suited to lead independent sessions of the Board in his capacity as Lead Director.

 

The Board believes that risk oversight is the responsibility of the Board as a whole and not of any one of its committees. The Board periodically reviews the processes established by management to identify and manage risks, communicates with management about these processes and receives regular reports from each of its committees concerning, among other things, risks arising within its areas of responsibility.

 

W. P. Carey & Co. LLC pays its Directors who are not its officers or employees or retired officers or employees fees for their services as Directors. We refer to these individuals in this proxy statement as Independent Directors or Non-Employee Directors. For 2010, Independent Director annual compensation included: a cash annual retainer of $50,000; meeting attendance fees of $1,500 per regular quarterly meeting (including telephonic meetings); meeting attendance fees of $1,500 per committee meeting for members of the Audit, Compensation, and Nominating and Corporate Governance Committees (including telephonic meetings); and an automatic annual grant of restricted stock units, or RSUs, with a grant date fair value of $50,000, which are immediately vested but are required to be deferred until the Director completes his or her service on the Board. The RSUs granted to the Directors are also referred to in this Proxy Statement as Director RSUs. During 2010, the Compensation Committee requested that its independent compensation consultants, Towers Watson and Company, conduct a review of the compensation of the Board and Committee members as part of its periodic review of such practices. Based on the results of that review and the advice of Towers Watson and Company (“Towers Watson”), in January 2011 the Compensation Committee recommended, and the Board approved, that, in order to realign total compensation levels with the median of the Company’s peer group, the grant date fair value of the annual grant of Director RSUs awarded to each Director should be increased to $70,000 effective as of July 1, 2011, which is the next scheduled grant date for such RSUs after the Annual Meeting. This adjustment was also intended to recognize the increased work and greater responsibilities assumed by the Board in 2010 and 2011. No other changes were made to the director compensation structure for 2011.

 

Mr. Griswold receives an additional $10,000 per year for serving as the Chairman of the Compensation Committee and $10,000 per year for serving as a member of the Executive Committee. He will also receive $10,000 per year for serving as Lead Director, of which he received $2,500 in 2010. Mr. Parente receives an additional $10,000 per year for serving as Chairman of the Audit Committee. Mr. Faber receives an additional $10,000 per year for serving as Chairman of the Nominating and Corporate Governance Committee, and $10,000 per year for serving as a member of the Executive Committee, and he received $7,500 in 2010 for serving as Lead Director through July. Mr. Mittelstaedt receives an additional $10,000 per year for serving as Chairman of the Strategic Planning Committee. All of such fees are payable in cash quarterly. Directors Coolidge, Klein, and von Köller, as well as Director Nominees Hansing, Marston, and van Ommen, are also members of the Investment Committee of Carey Asset Management, and each receives a fee of $1,500 per Investment Committee meeting attended. Mr. Coolidge receives an additional $20,000 per year for serving as Chairman of the Investment Committee and $10,000 per year for serving as a member of the Executive Committee. Effective as of March 2011, the Compensation Committee recommended, and the Board approved, that Mr. Coolidge receive an additional $1,500 fee for each transaction approved by him as Chairman of the Investment Committee pursuant to authority previously delegated to him by such committee, within specified parameters, to approve transactions valued at less than $10 million and a fee of $1,500 per quarter to approve transactions under an ongoing build-to-suit program that is being funded by CPA^®:17 — Global. In addition, Directors Klein, von Köller, and Winssinger, as well as Director Nominees Hansing, Marston, and van Ommen, are members of the Board of Directors of WPCI, a subsidiary of the Company that structures net lease transactions on behalf of the CPA^® REITs outside of the United States, for which service they receive $10,000 in annual fees. Each of Mr. von Köller and Mr. Van Ommen receive an additional $20,000 in fees per year for serving on the Board of Directors of W. P. Carey & Co. BV, a Netherlands subsidiary of the Company that manages international assets for the Company as well as the CPA^® REITs. Mr. Winssinger is a member of the Board of Directors of Carey Storage Asset Management, a subsidiary of the Company, and he receives an additional $25,000 per year for such Board service. Messrs. Wm. Polk Carey, Francis J. Carey, and Bond, who are officers or employees of W. P. Carey & Co. LLC and/or its subsidiaries, are also

Directors and are not paid any Director fees, although Mr. Bond received fees as a Director during 2010 until his appointment as Interim Chief Executive Officer in July, which are reflected in the table below. The compensation received by Messrs. Wm. Polk Carey and Bond as officers of the Company is discussed in the compensation tables for Executive Officers below. Mr. Francis J. Carey, who serves as the Company’s Chief Ethics Officer in addition to serving as the Chairman of the Executive Committee, receives an annual salary of $200,000 from the Company.

 

The following table sets forth information concerning the compensation of the individuals who served as Independent Directors during 2010:

 

 

 

The following table reflects Independent Director restricted stock awards, or RSAs, options, and Director RSUs outstanding and held by the individuals listed in the previous table as of December 31, 2010:

 

 

 

 

The following table sets forth certain information regarding the beneficial ownership of Common Stock as of the Record Date by each of W. P. Carey & Co. LLC’s nominees for election as Director, each of the named executive officers listed in the Summary Compensation Table below (“NEOs”), all Directors and Executive Officers as a group, and each person known to the Company to own beneficially more than 5% of the Common Stock. Fractional shares are rounded to the nearest full share. The business address of each of the Directors listed is c/o W. P. Carey & Co. LLC, 50 Rockefeller Plaza, New York, NY 10020. Except as noted below, none of the shares has been pledged as collateral.

 

 

 

The following table presents information regarding the Company’s equity compensation plans as of December 31, 2010:

 

 

 

 

Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) requires that Directors, Executive Officers and persons who are the beneficial owners of more than 10% of our shares file reports of their ownership and changes in ownership of our shares with the SEC and to furnish us with copies of all such Section 16 reports that they file. Based upon a review of the copies of such reports furnished to us as filed with the SEC and other written representations that no other reports were required to be filed during the year, W. P. Carey & Co. LLC believes that our Directors, Executive Officers and beneficial owners of 10% or more of our shares were in compliance with the reporting requirements of Section 16(a) of the Exchange Act during 2010, except that Trevor P. Bond, our Chief Executive Officer, filed a report one day late regarding an open market purchase of 5,000 shares in December 2010.

 

From the Company’s inception, it has engaged the firm of PricewaterhouseCoopers LLP as its Independent Registered Public Accounting Firm. For 2011, the Audit Committee has again engaged PricewaterhouseCoopers LLP as the Company’s independent auditors. A representative of PricewaterhouseCoopers LLP will be present at the Annual Meeting to make a statement, if he or she desires to do so, and to respond to appropriate questions from shareholders.

 

Although shareholder ratification of PricewaterhouseCoopers LLP’s appointment is not required by the Company’s bylaws or otherwise, the Company’s Board of Directors is submitting the ratification of PricewaterhouseCoopers LLP’s appointment for the year 2011 to the Company’s shareholders. If the shareholders do not ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee will reconsider whether or not to retain PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the year 2011 but will not be obligated to terminate the appointment. Even if the shareholders ratify the appointment of PricewaterhouseCoopers LLP, the Audit Committee in its discretion may direct the appointment of a different Independent Registered Public Accounting Firm at any time during the year if the Committee determines that such a change would be in the Company’s interests.

 

Vote Required

 

The ratification of PricewaterhouseCoopers LLP’s appointment requires the affirmative vote of a majority of the votes actually cast by shares present in person or represented by proxy at the Annual Meeting, a quorum being present. An abstention from voting on a matter will not be considered a vote cast on the matter, will not be counted in determining the number of affirmative votes required for approval and, accordingly, will not have the effect of a vote for or against the proposal. If a broker or similar nominee limits on a proxy card the number of shares voted on this proposal or indicates that the shares represented by a proxy card are not voted on this proposal, such broker non-

votes will not be considered a vote cast, will not be counted in determining the number of affirmative votes required for approval and, accordingly, will not have the effect of a vote for or against the proposal.

 

With respect to Proposal Two, the Board of Directors recommends a vote FOR ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s Independent Registered Public Accounting Firm for the year 2011.

 

ADVISORY VOTE ON EXECUTIVE COMPENSATION

 

Section 14A of the Exchange Act, which was added by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that, not less frequently than once every three years, we provide stockholders with an advisory vote to approve the compensation of our NEOs as disclosed herein. Accordingly, in this Proposal Three, shareholders are being asked to vote on the following advisory resolution:

 

RESOLVED, that the shareholders of the Company approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis and the related compensation tables and narrative discussion in the Proxy Statement for the Annual Meeting.

 

The Company’s goal is to maintain an executive compensation program that fosters the short and long-term goals of the Company and its shareholders. The Company seeks to accomplish this goal by motivating the Company’s senior leadership group to achieve a high level of financial performance. The Company believes that its executive compensation program is designed to align executive pay with the Company’s performance and to motivate management to make sound financial decisions that increase the value of the Company.

 

The vote on this “say-on-pay” resolution is not intended to address any specific element of our compensation program. Instead, the vote relates to the overall compensation of our NEOs as described in this Proxy Statement. Therefore, shareholders are encouraged to read the Compensation Discussion and Analysis, compensation tables, and narrative discussion in this Proxy Statement, which discuss in detail how our compensation policies and procedures implement our compensation philosophy.

 

As an advisory vote, Proposal Three is not binding upon the Board or the Company. Whether a majority of the votes cast by our shareholders with regard to the resolution are cast in favor or against it, our Board and its Compensation Committee will not be required to change our compensation programs as a result. However, the Board and the Compensation Committee, which is responsible for designing and administering the Company’s executive compensation program, value the opinions expressed by shareholders in their vote on this proposal and will review and consider the outcome of the vote when making future decisions on executive compensation

 

With respect to Proposal Three, the Board of Directors recommends a vote “FOR” the approval, on an advisory basis, of the foregoing resolution approving executive compensation as disclosed in the Compensation Discussion and Analysis below and the related compensation tables and narrative discussion contained in this Proxy Statement.

 

ADVISORY VOTE ON FREQUENCY OF
EXECUTIVE COMPENSATION VOTE

 

The Company is presenting the following proposal, which gives shareholders the opportunity to vote on a nonbinding, advisory basis, for their preference as to how frequently we should seek future advisory votes on the compensation of our NEOs, as set forth in Proposal Three above. By voting with respect to this Proposal Four, shareholders may indicate whether they would prefer that we conduct future advisory votes on executive compensation every one, two, or three years. Shareholders also may, if they wish, abstain from casting a vote on this proposal. However, this proposal is non-binding, which means that the Board is not required by law to

implement the time period receiving the most votes and can choose to hold future “say-on-pay” votes on a different schedule. Nevertheless, the Board values our shareholders’ opinions and will take into account the results of this vote in determining how often the Company should hold advisory votes on executive compensation in the future. In that regard, the Board will consider the option that receives the greatest number of votes to be the preference of our shareholders.

 

The Board of Directors has determined that an advisory vote on executive compensation that occurs once every three years is the most appropriate alternative, and the Board recommends that you vote for the three-year interval for the advisory vote on executive compensation. The Board believes that taking a long-term approach to Company performance and executive compensation is in the best interests of the Company and its shareholders, as opposed to over-emphasizing short-term variations in compensation and business results, which may result from an annual vote. We include long-term incentives in the mix of compensation because by doing so our compensation structure is more closely aligned with the long-term strategic plan for the Company and the interests of our long-term shareholders. Because we have designed our compensation programs to promote a long-term perspective and performance over a multi-year period, we believe that a vote that occurs once every three years will allow our shareholders to better evaluate our executive compensation programs. We are recommending an advisory vote every three years because we think that both compensation decisions and Company performance should be evaluated over a longer-term horizon rather than just on a year-to-year basis.

 

With respect to Proposal Four, the Board of Directors recommends that an advisory vote on the compensation of our Named Executive Officers be held every three years.

 

The Company’s Executive Officers are elected annually by the Board of Directors. Detailed information regarding the Executive Officers who are not directors as of the date of this Proxy Statement is set forth below.

 

Mark J. DeCesaris

AGE: 52

 

Mr. DeCesaris has served as Chief Financial Officer of the Company and each of the CPA^® REITs since July 2010, having previously served as Acting Chief Financial Officer since November 2005 (and, in the case of CPA^®:17 — Global, since October 2007). He has also served as Chief Administrative Officer and Managing Director of the Company and each of the CPA^® REITs since November 2005 (and, in the case of CPA^®:17 — Global, since October 2007). Mr. DeCesaris has also served as Chief Financial Officer of CWI since March 2008 and as its Chief Administrative Officer since September 2010. Mr. DeCesaris had previously been a consultant to W. P. Carey & Co. LLC’s finance department since May 2005. Prior to joining W. P. Carey & Co. LLC, from 2003 to 2004 Mr. DeCesaris was Executive Vice President for Southern Union Company, a natural gas energy company publicly traded on the New York Stock Exchange, where his responsibilities included overseeing the integration of acquisitions and developing and implementing a shared service organization to reduce annual operating costs. From 1999 to 2003, he was Senior Vice President for Penn Millers Insurance Company, a property and casualty insurance company, where he served as President and Chief Operating Officer of Penn Software, a subsidiary of Penn Millers Insurance. From 1994 to 1999, he was President and Chief Executive Officer of System One Solutions, a business consulting firm that he founded. Mr. DeCesaris is a licensed Certified Public Accountant and started his career with Coopers & Lybrand in Philadelphia. Mr. DeCesaris graduated from King’s College with a B.S. in Accounting and a B.S. in Information Technology. He currently serves as Vice Chairman of the Board of Trustees of King’s College and as a member of the Board of Trustees of the Chilton Memorial Hospital Foundation, and he is a member of the American Institute of Certified Public Accountants.

 

John D. Miller

AGE: 66

 

Mr. Miller joined W. P. Carey & Co. LLC in 2004 as Vice Chairman of Carey Asset Management and has served as Chief Investment Officer of W. P. Carey & Co. LLC and each of the CPA^® REITs since 2005 (and, in the case of CPA^®:17 — Global, since October 2007). Mr. Miller was a Co-founder of StarVest Partners, L.P., a

technology oriented venture capital fund. Mr. Miller continues to retain a Non-Managing Member interest in StarVest. From 1995 to 1998, he served as President of Rothschild Ventures Inc., the private investment unit of Rothschild North America. Prior to joining Rothschild in 1995, he held positions at two private equity firms, Credit Suisse First Boston’s Clipper group and Starplough Inc., an affiliate of Rosecliff. Mr. Miller previously served in investment positions at the Equitable, including serving as President and Chief Executive Officer of Equitable Capital Management Corporation, and as head of its corporate finance department. He currently serves on the Board of Circle Entertainment Inc. and Function (X), Inc. He received his B.S. from the University of Utah and an M.B.A. from the University of Santa Clara.

 

Thomas E. Zacharias

AGE: 57

 

Mr. Zacharias joined W. P. Carey & Co. LLC in April 2002 and is head of the Asset Management Department. He currently serves as Chief Operating Officer and Managing Director of W. P. Carey & Co. LLC, CPA^®:14, and CPA^®:15 since 2005 and of CPA^®:17 — Global since 2007, and as President of CPA^®:16 — Global since 2003. Effective after the closing of the proposed merger of CPA^®:14 with and into one of CPA^®:16 — Global’s subsidiaries, as described below, Mr. Zacharias will no longer serve as President of CPA^®:16 — Global, but will serve as Chief Operating Officer and Managing Director. Mr. Zacharias previously served as an Independent Director of CPA^®:14 from 1997 to 2001 and CPA^®:15 in 2001. Mr. Zacharias has also served as Chief Operating Officer of CWI since September 2010. Prior to joining W. P. Carey & Co. LLC, Mr. Zacharias was a Senior Vice President of MetroNexus North America, a Morgan Stanley Real Estate Funds Enterprise. Prior to joining MetroNexus in 2000, Mr. Zacharias was a Principal at Lend Lease Development U.S., a subsidiary of Lend Lease Corporation, a global real estate investment management company. Between 1981 and 1998 Mr. Zacharias was a senior officer at Corporate Property Investors, which at the time of its merger into Simon Property Group in 1998 was one of the largest private equity REITs in the United States. Mr. Zacharias received his undergraduate degree, magna cum laude, from Princeton University in 1976 and a Masters in Business Administration from Yale School of Management in 1979. He is a member of the Urban Land Institute, International Council of Shopping Centers and NAREIT, and served as a Trustee of Groton School in Groton, Massachusetts between 2003 and 2007.

 

Executive Summary.  The Company’s executive compensation programs are structured in accordance with the following principles, first established by the Company’s founder, Mr. Wm. Polk Carey:

 

 

In addition to the framework set by these principles, the Compensation Committee also considered a number of factors in determining 2010 compensation levels for the Named Executive Officers or NEOs. Among these factors were the Company’s financial and market performance compared to prior years, the 2010 business plan, the performance of a peer group of companies, the broader economic environment, and the strategic goals and challenges faced by the Company in 2010. The Committee determined that 2010 market and financial performance exceeded the performance of our peer group, was strong by historical standards, and surpassed the expectations set forth in the 2010 business plan.

 

Given these corporate performance considerations, the Committee decided that 2010 incentive pay should be greater than 2009 incentive pay. Bonus payouts for the 2010 performance year were increased by 20 to 30% over the prior year, although actual bonus payouts varied within that range due to individual performance considerations. The grant date fair values of long-term incentive plan grants in 2011 were also increased by approximately 8% over 2010 grant values, an increase attributable to year-over-year stock price gains as opposed to additional share grants, although these values may or may not be actually realized by the executive, depending on, among other factors, the performance of the Company’s common stock underlying the grant over the term of the grants. These actions fully

restore the bonus and long-term incentive reductions implemented in 2008 when the Company’s performance was not as strong compared to the prior year, substantially due to the economic crisis that began at that time.

 

Introduction

 

The Company’s compensation philosophy and its processes for compensating Executive Officers are supervised by the Compensation Committee of the Board of Directors. This Committee currently consists of four Directors, each of whom is independent within the meaning of the New York Stock Exchange Listing Standards. The Compensation Committee’s responsibilities include setting the Company’s executive compensation principles and objectives, setting and approving the compensation of Executive Officers, and monitoring and approving the Company’s general compensation programs.

 

Its functions include the following:

 

 

The Compensation Committee relies on input both from management and from its independent compensation consultant, Towers Watson, to assist the Committee in making its determinations. The Committee also considers the perspective of the Chairman of the Company, who is the Company’s largest shareholder. Although the Compensation Committee receives information and recommendations regarding the design of the compensation program and level of compensation for Executive Officers from these sources, the Compensation Committee retains the sole authority to make final decisions both as to the types of compensation and compensation levels for these executives.

 

Compensation Philosophy:  The Company’s compensation program is designed to align executive pay with Company performance and to motivate management to make sound financial decisions that increase the value of the Company. The Committee believes that a blend of incentive programs based on both quantitative and qualitative performance objectives is the most appropriate way to encourage not only the achievement of outstanding financial performance, but maintenance of consistent standards of teamwork, creativity, good judgment, and integrity. The Compensation Committee relies on a balance of formulaic and qualitative incentive programs, exercising its best judgment and taking into account the many aspects of performance that make up an individual’s contribution to the Company’s success.

 

Thus, in determining 2010 compensation, the Committee examined a broad range of information on financial performance, as described below. The Committee also reviewed information on the performance of and contributions made by individual Executive Officers and, in doing so, placed substantial reliance on information received from, and the judgment of, both the Chairman and the Chief Executive Officer. While the Compensation Committee does take into account independent survey data and public peer group data as market reference points, it does not explicitly target compensation levels at any particular quartile or other reference level. Nevertheless, according to market studies conducted annually by Towers Watson since 2007, and in keeping with the principle that executive compensation levels should be conservative and prudent, total compensation opportunities for the NEOs are generally positioned between the 35th and 50th percentiles of the peer group.

 

Outside Compensation Consultant:  In 2010, Towers Watson analyzed the Company’s executive and director compensation practices and award levels against market and peer group practices generally. That review was intended, among other things, to assist the Compensation Committee in determining appropriate compensation levels for NEOs given 2010 performance. Towers Watson also presented the Committee with historical peer group

performance data that the Committee considered in determining 2010 bonus payouts and in setting the 2011-2013 Performance Share Unit metrics and goals, as described below.

 

2010 Performance Summary

 

The Compensation Committee considers a number of key financial, market and operational measures in making compensation decisions, including revenue, Earnings Before Interest, Taxes, Depreciation, and Amortization, or EBITDA, Net Income, Operating Margin, Earnings per Share, Adjusted Cash Flow from Operations, Funds From Operations, as Adjusted, or AFFO, assets under management, investment volume, fundraising objectives, market capitalization, stock price appreciation, dividend yield, and total shareholder return, as discussed below. In making compensation decisions for 2010, the Committee considered the Company’s performance relative to prior year performance, the performance of its peers, the Company’s long-term strategy and the broader economic environment. The Committee did not put emphasis on any single metric but rather reviewed the overall results to arrive at a viewpoint on how financial performance compared with prior years and the peer companies and what effect this should have on annual compensation levels.

 

The Committee concluded that that the Company’s 2010 financial performance significantly exceeded the expectations set forth in the Company’s annual operating plan. The Company improved on most of the financial measures considered by the Committee, including revenue, profitability and AFFO. With year-over-year increases of approximately 10%, the Company’s EBITDA and net income improvement were of particular note. Additionally, the Company’s financial results were generally stronger, more stable, and growing faster than the Company’s peers. The Company’s total investment volume more than doubled in 2010, assets under management increased by 10% and total capital raised increased by more than 30%.

 

The Committee also concluded that 2010 market performance was strong. The Company’s total shareholder return over the three years ended December 31, 2010 was approximately 6%, which represents the 68th percentile of peer group returns. This strong market performance was driven by a share price increase of approximately 13% in 2010 and 18% in 2009 and continued growth of the Company’s dividend. The Company also accomplished a number of strategic goals in 2010, including growing assets under management, successfully managing assets in a challenging environment, refinancing maturing debt, securing financing for new deals, and achieving fundraising goals, as well as hiring a new Chief Executive Officer and managing the resulting transition, which had not been anticipated when the year began.

 

The Committee’s 2010 and 2011 compensation decisions reflect these performance considerations. Overall, the Committee determined that the Company had a very successful year, particularly given the challenging environment for raising capital and the unplanned departure of our former Chief Executive Officer. Actions such as salary adjustments, bonus payout determinations and grants of long-term incentive opportunities were intended to recognize and reward our NEOs for their contributions to the Company’s success and to provide an ongoing incentive to sustain and improve upon these achievements. In light of these performance considerations, the Committee decided to increase 2010 bonus payouts and the values of long-term incentive grants in 2011 by approximately 20-30% and 8%, respectively, fully restoring the 20% bonus reduction and 36% reduction in long-term incentive grant values implemented in 2008

 

Some of the specific financial results the Committee evaluated were:

 

The Committee also considered the following supplemental metrics:

 

 

 

2010 Peer Comparison Group

 

When determining compensation levels for the NEOs, the Committee considers a number of external market reference points, including published survey data and the competitive pay levels of an established group of publicly traded peer companies. This peer comparison group consists of companies with whom the Company competes for executive talent. The 2010 peer comparison group was comprised of 13 companies operating in the asset management and real estate asset management industries. The Committee annually reviews the peer group to determine what changes, if any, are appropriate. The Committee did not make any changes to the peer comparison group in 2010.

 

Companies included in the Company’s peer group generally have the following characteristics:

 

 

The peer group for 2010 consisted of the following companies:

 

 

In January 2011, the Compensation Committee assessed the composition of the Company’s peer group with the assistance of Towers Watson and Company and determined that Affiliated Managers Group, Alliance Bernstein Holdings, Eaton Vance Corp and Waddell & Reed Financial Inc. were no longer optimal comparison points for the Company. The Committee removed these companies from the peer group and added supplemental companies that

more closely matched the established criteria for inclusion in the peer group. The new peer group will be used for compensation and performance comparisons in 2011 and consists of the following companies:

 

 

Elements of Compensation

 

The Company uses base salary, annual bonuses, and stock-based awards, as well as a range of benefit plans, as tools to help achieve its compensation objectives. The Company’s approach to the mix of compensation among these elements emphasizes variable compensation, including bonuses and long-term incentives in the form of stock-based awards, over fixed compensation. The emphasis on stock-based awards helps to promote a long-term perspective and align management’s interest with that of shareholders of the Company. For 2010, the target mix for total compensation was:

 

 

Base Salary:  Base salary is intended to reflect job responsibilities and set a minimum baseline for compensation. In most cases, base salaries for Executive Officers are viewed as a significantly less important component of their overall compensation than variable elements of compensation. When setting salary levels, the Committee considered the following factors:

 

 

Salary levels for Executive Officers joining the Company are typically set initially by negotiation between the prospective employee and management. Base salaries are subject to annual review by the Committee, which considers competitive market data provided by the Committee’s independent consultants. When considering changes to base salaries for Executive Officers, the Committee also takes into consideration the impact on total compensation. In 2010, the Committee decided to increase certain NEO’s base salaries in order to recognize the significant contributions made by these individuals and to better align their compensation levels with typical market practices. This was the first base salary adjustment awarded to any of the Company’s NEOs since 2006. Salaries were adjusted as follows:

 

Annual Cash Incentives:  Annual cash bonuses are intended to motivate Executive Officers to achieve Company goals, align executive pay with shareholder interests, and reward performance, both by the Company as a whole and by the individual Executive Officers. Annual cash incentive payments to NEOs are not based on rigid formulae and are at the discretion of the Compensation Committee. In awarding bonuses to Executive Officers, the Compensation Committee reviews the Company’s performance compared to prior years and against the public peer group. In addition to the performance metrics described above, the Committee takes into account other non-recurring factors that may have affected year-to-year comparisons, such as liquidity events for the CPA^® REITs and receipt of deferred performance revenue from a CPA^® REIT upon attainment of performance targets, which only occur every few years. The Compensation Committee also considers such additional factors as progress toward achieving financial and non-financial goals and long-term objectives, performance against the pre-set business plan, performance compared to the peer group, and unforeseen changes in the Company’s operating environment during the year.

 

In light of these performance considerations, the Committee increased the Company-wide bonus pool by 20% from 2009 levels. The Committee’s intention was to fully restore the bonus pool reduction that occurred in 2008 from 2007 and to provide additional funding above the 2007 level to recognize the significant contributions of the Company’s employees toward a very strong annual performance.

 

In determining individual bonus payouts to the NEOs for 2010 performance, the Committee started with the assumption that all officers would be eligible for the 20% increase. They then adjusted bonuses by as much as an additional 10% to reflect individual accomplishments and annual performance objectives. These adjustments were based on performance assessments presented to the Committee by Mr. Bond, and in the case of Mr. Bond’s bonus, by the independent deliberations of the Compensation Committee. The NEOs received bonus payouts for 2010 performance in the following amounts: Wm. Polk Carey — $1,000,000; Trevor P. Bond — $750,000; Mark J. DeCesaris — $780,000; Thomas E. Zacharias — $1,040,000; and John D. Miller — $264,000. Gordon F. DuGan, the former Chief Executive Officer, resigned in July 2010 and as a result did not receive any bonus for 2010.

 

In addition to the annual cash bonus plan, the Company also maintains a short-term incentive, cash commission program exclusively for its investment officers. Commission income under this plan is accrued as a percentage of revenues earned from structuring new investments for the Company’s managed funds. These commission payments are a significant component of overall compensation for the Company’s investment officers and are directly linked to the achievement of quantitative objectives in the CPA^® REITs. A portion of the total commission payouts are allocated among the investment officers at the time of transaction and may be adjusted up or down, at the discretion of the Chairman and the Chief Executive Officer and with the recommendation of the department head. The remaining portion of the commissions is set aside into a bonus pool and divided among the investment officers at the end of the year. In 2010, none of the Company’s NEOs were eligible to participate in this commission program.

 

Long-Term Incentive Awards:  In 2008, the Company approved, as a subset of its 1997 Share Incentive Plan, the Long-Term Incentive Plan (“LTIP”), which is designed to reward key managers for high performance and to drive shareholder value and increase assets under management. Under the LTIP, which is now also a subset of the Company’s 2009 Share Incentive Plan, participants are awarded 50% of their annual long-term incentive opportunity in the form of time-vested RSUs and 50% in the form of PSUs. RSUs granted in 2010 vest ratably over three years, with one-third vesting each year starting February 15, 2011. The PSUs are earned at the end of a three year performance cycle. The ultimate number of PSUs that will be earned under the 2010-2012 performance cycle depends on achievement of the following four equally weighted goals:

 

 

PSUs are tied to specific performance goals determined at the beginning of the performance cycle. The Committee approves final goals for each performance cycle after evaluating and modifying goals proposed by Management. Management’s proposals are based on the Company’s long-term financial plan, historical results and expected results. The Committee considers these recommendations in conjunction with the established long-term

business plan of the Company to determine the final goals. From time to time, the committee’s independent consultant assists the Committee with the goal-setting process by providing analyses of historical peer group performance and expected trends.

 

At the end of each performance cycle, the Committee evaluates the Company’s actual performance compared to the pre-set goals and determines the payout level achieved. There are five potential payout levels for each of the four goals reflecting actual Company performance: Miss, which corresponds to no payout; Threshold, which corresponds to a payout equal to one half of Target; Target, which results in the targeted payout level; Stretch, which corresponds to a payout equal to two times Target, and Maximum, which corresponds to a payout of three times Target.

 

The Committee annually reviews the Company’s progress towards achieving each of the PSU goals, and at the end of each performance cycle reviews and certifies the actual achievement and corresponding payout. To date, there has been one payout under the PSU program for the three-year performance cycle that culminated on the last day of the 2010 fiscal year. For this 2008-2010 performance period, the Company achieved the Target performance level with respect to the adjusted cash flow and total shareholder return measures, and below Threshold on the EBITDA and assets under management measures. This resulted in a cumulative payout equal to 50% of the Target payout amount. As of December 31, 2010, PSUs granted under the 2009-2011 and 2010-2012 performance cycles are on track for achievement equal to 75% and of 87.5% of the Target amount, respectively.

 

The table below shows the goals, actual achievement, and corresponding payouts for each of the 2008-2010 PSU measures:

 

 

For the 2009-2011 performance cycle relevant to PSUs awarded in 2009, the Committee approved the three-year goals listed in the table below. The Committee reevaluated these goals in 2010, determined that they continued to represent appropriate and challenging performance standards at that time, and therefore decided to maintain the same goals for the 2010-2012 performance cycle. This decision was based on the fact that business conditions, as well as the Company’s financial plan and long-term expectations, had not changed significantly from the prior year.

 

 

In 2010, the Committee determined that the number of RSUs and PSUs (at Target) awarded to NEOs should be the same as awarded in 2009. Given the change in the price of the underlying Common Stock between the two grant periods, this approach resulted in the grant date fair values of 2010 equity awards granted to the NEOs being approximately 19% more than the values of the awards at the time of grant in 2009. In 2011, the Committee decided to continue its established practice of granting the same number of RSUs and PSUs regardless of fluctuations in the underlying stock price, although certain individuals can receive higher or lower amounts in order to recognize changes in job responsibility, labor market norms or other retention issues or to reflect individual performance. The Committee

believes that this practice creates strong alignment with shareholder interests because the NEOs participate directly in shareholder value creation (or decline). Given the increases in the underlying stock price over the period, the grant date fair values of 2011 awards were approximately 8% higher than the grant date fair values of the 2010 awards.

 

In January 2010, the Committee modified the Normalized EBITDA metric for the 2010-2012 PSUs to more accurately measure the Company’s long-term performance. Prior to 2010, Normalized EBITDA was calculated with an adjustment for items that were not non-recurring on a regular basis. In 2010, the Committee determined that this metric should also be adjusted to reflect the Company’s economic interest in various joint ventures, including the Company’s ownership in the CPA^® REIT funds as well as the special general partner interest in CPA^®:17 — Global. For example, the Company receives cash dividends on its investment in the CPA^® REIT funds and deems those dividends to be the economic interest, rather than its share of the net income of these funds, which includes substantial non-cash expenditures such as depreciation expense and impairment charges. As a result, the Normalized EBITDA metric for 2010 was modified to reflect the dividends received and renamed “Adjusted EBITDA.”

 

 

Changes for 2011:  In February 2011, the Committee redesigned the PSU component of the LTIP in order to clarify and simplify the program and better align it with the Company’s strategic direction. Effective beginning with the 2011-2013 performance cycle, PSU awards will be based on two metrics: adjusted funds from operations (“AFFO”) and total shareholder return relative to the Russell 2000 Small Cap Index (“TSR”). The 2011-2013 performance goals for these measures are as follows:

 

 

Additionally, the Committee decided to modify the payout scale associated with the various PSU achievement levels. The Threshold, Target, Stretch and Maximum achievement levels will still correspond to the same respective payouts of 50%, 100%, 200% and 300% of Target, but payment levels will now be determined on a linear scale between performance levels. This will allow the Committee to recognize, reward and incentivize incremental performance gains between the absolute performance levels.

 

CEO Compensation

 

Our former CEO, Gordon F. DuGan, resigned on July 6, 2010. He did not receive any severance payments in connection with his departure and his unvested RSUs and PSUs were forfeited.

 

Trevor P. Bond was appointed as the Company’s Interim Chief Executive Officer in July 2010 and was then appointed Chief Executive Officer in September. His target compensation was determined by the Compensation Committee and approved in December 2010. The Committee considered a number of factors, including the compensation of the Company’s former CEO, typical compensation practices for peer group CEOs, supplemental market data for general industry and financial services companies, and Mr. Bond’s experience and qualifications. Upon consideration of these factors, the Committee decided to set Mr. Bond’s target compensation at a similar level to that of his predecessor. Mr. Bond’s annual base salary was set at $700,000. For 2011, he is eligible for a target bonus opportunity of $1,000,000, although the actual payout may be more or less than this amount based on individual and corporate performance results. Mr. Bond will also participate in the Company’s LTIP and in January

2011 received an annual equity award in the amount of 18,400 RSUs and 18,400 PSUs. The total value of Mr. Bond’s target compensation package is positioned between the 25th and 50th percentiles of the peer group CEOs.

 

For the six months that he served as the Company’s CEO in 2010, Mr. Bond’s pro-rated bonus target was approximately $500,000. In February 2011, the Committee decided to award Mr. Bond a 2010 bonus of $750,000 in order to reward his smooth transition into the CEO role and his exceptional and immediate progress related to many of the Company’s key strategic endeavors.

 

Other Compensation and Benefits

 

Deferred Compensation Plans.  In light of its adoption of the LTIP effective in 2008, the Committee terminated further contributions by executives to the 2005 Partnership Equity Unit Plan, or 2005 PEP. For NEOs, all prior deferrals under the 2005 PEP and its predecessor, the Partnership Equity Unit Plan, which are collectively referred to in this proxy statement as the PEP Plans, are now maintained in the Company’s Deferred Compensation Plan, pursuant to elections offered in 2008 through which participants chose specified payment dates for deferral amounts.

 

The purpose of the PEP Plans was to align the interests of the Company’s highly-compensated officers with the interests of investors in the CPA^® REITs, in a tax-advantaged manner, through the use of phantom equity in those funds. In the Committee’s view, the LTIP provides a strong alignment with the interests of the Company shareholders. In 2008, PEP Plan participants who were then current employees were given the opportunity to convert their deemed interests in the PEP Plans, or PEP Units, for a deemed equity investment in the Company in the form of RSUs. This conversion took place on June 15, 2009, providing participants with a number of RSUs equal to the equivalent value of the Common Stock as previously held in interests through the PEP Plans. These “Rollover RSUs,” like the underlying PEP Units, were fully vested but receipt of the underlying shares of Common Stock was required to be deferred by the participants for a minimum of two years.

 

Awards under the LTIP may be deferred if approved by the Committee and are subject to the requirements of Section 409A of the Internal Revenue Code. For awards of RSUs to NEOs in 2010, only John D. Miller elected to defer receipt of the underlying shares in accordance with the terms of the Company’s Deferred Compensation Plan.

 

Benefits and Perquisites.  The Company does not maintain any defined-benefit pension plans. The Company does maintain a profit-sharing plan, a 401(k) plan, and the ESPP, under which eligible employees may purchase Company stock at a discount of 15% of the market price of the Common Stock on the first or last day of the semi-annual purchase period, whichever is lower. These plans are generally available to all employees. Certain perquisites, as described in the Summary Compensation Table below, are available to a more limited group of officers that includes the NEOs. These perquisites are not deemed by the Company to constitute a material element of compensation.

 

Employment Agreements

 

The Company may from time to time enter into employment contracts when it deems it to be advantageous in order to attract or retain certain individuals. Currently, none of the NEOs has such an agreement. The Company from time to time also enters into agreements with its officers and other employees in connection with their separation from the Company.

 

Other Considerations

 

The Company does not have any equity or other security ownership requirements or guidelines. The Company has been advised by counsel that it is not subject to Section 162(m) of the Internal Revenue Code.

 

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussions, the Committee recommended to the Board of Directors, and

the Board approved, that the Compensation Discussion and Analysis be included in this Proxy Statement, and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

 

COMPENSATION COMMITTEE

 

Benjamin H. Griswold, IV, Chairman

Eberhard Faber, IV

Charles E. Parente

Reginald Winssinger

 

Each of the Compensation Committee members whose names appear under the heading “Report of the Compensation Committee” above were Compensation Committee members during all of 2010, except for Mr. Faber, who joined the Committee in September 2010, and Mr. Bond served on the Compensation Committee until July 6, 2010, when he was appointed as Interim Chief Executive Officer by the Board of Directors. No member of the Compensation Committee during 2010, other than Mr. Bond following his appointment as Interim Chief Executive Officer, is or has been an executive officer of the Company, and no member of the Compensation Committee had any relationships requiring disclosure by the Company under the SEC’s rules requiring disclosure of certain relationships and related-party transactions. None of the Company’s executive officers served as a director or a member of a compensation committee (or other committee serving an equivalent function) of any other entity, the executive officers of which served as a director of the Company or member of the Compensation Committee during 2010.

 

All management functions of W. P. Carey & Co. LLC are provided by employees of its wholly-owned subsidiaries, Carey Asset Management and Carey Management Services. All policy-making functions are carried out by Executive Officers of Carey Asset Management or Carey Management Services, who generally hold the same titles as officers of W. P. Carey & Co. LLC. The following table summarizes the compensation of our NEOs for each of the fiscal years ended December 31, 2010, 2009 and 2008. Our NEOs are our Chief Executive Officer, Chief Financial Officer and the three other most highly compensated Executive Officers at December 31, 2010 as determined by their total compensation in the table below, which is calculated in accordance with SEC Rules, as well as our former Chief Executive Officer.

 

 

 

 

The following table provides information on PSUs and RSUs granted to our NEOs in 2010.

 

 

 

The following table sets forth certain information with regard to all unexercised options and all unvested awards of restricted stock, RSUs and PSUs held by our NEOs on December 31, 2010.