SCHEDULE 14A

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Definitive Additional Materials

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2018 Performance Highlights 

1-Year

3-Year

5-Year

10-Year

UDR

6.41%

16.42%

101.16%

320.82%

NAREIT Apartment Index

3.70%

10.63%

79.88%

298.20%

NAREIT Equity Index

(4.62)%

8.91%

46.27%

213.82%

S&P 500 Index

(4.38)%

30.42%

50.33%

243.03%

1-Year

3-Year Average

5-Year Average

4.0%

Dividend per share growth

5.1%

Dividend per share growth

6.5%

Dividend per share growth

5.0%

AFFO per share growth

6.2%

AFFO per share growth

7.9%

AFFO per share growth(a)

·

Our 2018 results consisted of improvement across all five of our strategic objectives, which are: 1) operating excellence, 2) balance sheet strength, 3) portfolio diversification, 4) capital allocation and 5) advance an empowering culture and a great place to work and live.  

1.

Operating Excellence 

2.

Balance Sheet Strength

3.

Portfolio Diversification

4.

Capital Allocation

5.

Empowering Culture and a Great Place to Work and Live

·

Great Place to Work

·

Great Place to Live

Executive Compensation Highlights

2018 SHORT-TERM INCENTIVE

COMPENSATION:

PERFORMANCE METRICS

2018 LONG-TERM INCENTIVE COMPENSATION:

PERFORMANCE METRICS

FFO as Adjusted per share

Same-Store Revenues

 Percentage of markets where UDR is at or above the median relative to peer apartment REITs

30%

35%

1-Year FFO as Adjusted per share

3-Year Relative Cumulative TSR vs. Apartment Peers

Development/Redevelopment FFO

 Calculated as NOI plus capitalized interest for pre-determined projects

20%

3-Year Relative Cumulative TSR vs. NAREIT Equity REITs Total Return Index

Total Transactions

Acquisitions/Sales/Development/Redevelopment during the year

15%

3-Year Relative Cumulative FFO as Adjusted Growth Rate vs. Apartment Peers

Three-Year Liquidity

Calculated as projected 2020 year ending revolving loan and commercial paper borrowing capacity, assuming approved and likely to be approved sources and uses of capital

Transaction Yields

 FFO yield on transactions in prior years versus pre-established FFO yield expectations on such projects

Associate Engagement

Calculated by the “Overall Health of UDR Workforce” score

Corporate Governance Highlights

When:

Thursday, May 16, 2019, at 10:00 a.m. local time.

How To Vote In Advance

Where:

Hermitage Hotel Nashville

231 6th Avenue North, Nashville, Tennessee 37219

Your vote is important. Whether or not you plan to attend the meeting, we urge you to vote your shares electronically through the Internet, by telephone or, if you have requested and received a paper copy of the proxy statement, by completing, signing and returning the paper proxy card enclosed with the proxy statement.

Items of Business:

Proposal 1 - To elect eight directors to serve until the next annual meeting of shareholders or until their successors are elected and qualified.

Proposal 2 - To ratify the appointment of Ernst & Young LLP to serve as independent registered public accounting firm for the year ending December 31, 2019.

By Telephone:    You can submit your vote by proxy over the telephone by following the instructions provided on the separate proxy card if you received a printed set of the proxy materials.

Proposal 3 - To vote to approve, on an advisory basis, the compensation of our named executive officers disclosed in this proxy statement.

In addition, to transact such other business as may properly come before the meeting and any adjournment or postponement of the meeting.

By Internet:  You can go to www.proxyvote.com and vote through the Internet.

Who Can Vote:

Holders of UDR common stock at the close of business on Monday, March 18, 2019.  Each share of common stock is entitled to one vote for each director position and one vote for each of the other proposals.

Date of Mailing:

On or about March 27, 2019, we intend to mail to our shareholders of record a notice containing instructions on how to access our 2019 proxy statement and our annual report for the year ended December 31, 2018, and how to vote online. The notice also provides instructions on how you can request a paper copy of these documents if you desire, and how you can enroll in e-delivery. If you received your annual meeting materials via email, the email contains voting instructions and links to our annual report and proxy statement on the Internet.

By Mail:  If you have requested and received a paper copy of the proxy statement, you can mark, sign, date and return the paper proxy card enclosed with the proxy statement in the postage-paid envelope that we have provided to you. Please note that if you vote through the Internet or by telephone, you do not need to return your proxy card.

By Order of the Board of Directors

WARREN L. TROUPE

Senior Executive Vice President

and Corporate Secretary

Important Notice Regarding the Availability of Proxy Materials for UDR, Inc.’s Annual Meeting of Shareholders to be held on May 16, 2019.  

This Notice of Annual Meeting and Proxy Statement and UDR, Inc.’s Annual Report/Form 10-K for the year ended December 31, 2018 are available on the Internet at the following website: www.proxyvote.com.

TABLE OF CONTENTS

PAGE

PROXY SUMMARY

PROPOSAL NO. 1 ELECTION OF DIRECTORS

1

Vote Required and Board of Directors’ Recommendation

7

CORPORATE GOVERNANCE MATTERS

8

Corporate Governance Overview

8

Identification and Selection of Nominees for Directors

10

Proxy Access

11

Shareholder Bylaw Amendments

11

Director Rotation and Retirement

12

Director Independence

12

Succession Planning

12

Director Responsibilities and Obligations

14

Board Leadership Structure and Committees

16

Role of Compensation Committee and Compensation Consultants

16

Board of Directors and Committee Meetings

16

The Role of the Board in Risk Oversight

18

Board Evaluation

18

Communicating with the Board

19

COMPENSATION OF DIRECTORS

20

Director Compensation Table

20

Director Compensation Table Discussion

20

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

23

EXECUTIVE OFFICERS

25

EXECUTIVE COMPENSATION

26

Compensation Discussion and Analysis

26

Compensation Committee Report

52

Compensation of Executive Officers

53

Employment and Other Agreements

58

Post-Employment Compensation - Severance, Change of Control and Other Arrangements

59

CEO Pay Ratio

60

Compensation Risks

61

Transactions with Related Persons

61

Equity Compensation Plan Information

61

AUDIT COMMITTEE REPORT

62

AUDIT MATTERS

63

Audit Fees

63

Pre-Approval Policies and Procedures

63

PROPOSAL NO. 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

64

Vote Required and Board of Directors’ Recommendation

64

PROPOSAL NO. 3 ADVISORY VOTE ON EXECUTIVE COMPENSATION

65

Vote Required and Board of Directors’ Recommendation

65

FREQUENTLY ASKED QUESTIONS ABOUT THE ANNUAL MEETING

66

Why did you provide this proxy statement to me?

66

Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials instead of a full set of proxy materials?

66

What constitutes a quorum in order to hold and transact business at the meeting?

66

How do I vote?

67

How will my proxy be voted?

67

Will other matters be voted on at the annual meeting?

68

Can I revoke my proxy and change my vote?

68

What vote is required for the proposals if a quorum is present?

68

What is an abstention, and how will it affect the vote on a proposal?

69

What are broker non-votes, and how will they affect the vote on a proposal?

69

Who will tabulate the votes?

69

Who is soliciting the proxy, and who will pay for the proxy solicitation?

69

Where do I find the voting results of the meeting?

69

OTHER MATTERS

70

Section 16(a) Beneficial Ownership Reporting Compliance

70

Delivery of Voting Materials

70

Annual Report

70

Shareholder Proposals for the 2020 Annual Meeting of Shareholders

70

Advance Notice Procedures for the 2020 Annual Meeting of Shareholders

70

Proxy Access Procedures for the 2020 Annual Meeting of Shareholders

71

DEFINITIONS

72

Election of 8 Directors

The Board recommends a vote FOR each of the director nominees.



Diverse slate of directors with broad leadership experience.



All candidates are highly successful executives with relevant skills and expertise.



Average director tenure of 11 years with 7 of 8 directors to be voted upon independent of management.

See pages 1 - 7 for further information

Years of Tenure

# of Other Public Company Boards

Committee Memberships (2)

Name

Principal Professional

Experience (1)

AC

CC

GC

NC

EC

Katherine A. Cattanach

General Partner of INVESCO Private Capital, Inc.

13

0

Robert P. Freeman(3)

Senior Managing Director and Principal of Greyfields Investors LLC

21

0

C

Jon A. Grove

Chairman, President and CEO of ASR Investments Corporation

21

0

Mary Ann King

Co-Chairman of Moran & Company

4

0

James D. Klingbeil(4)

Chairman and CEO of Klingbeil Capital Management and The Klingbeil Company

21

0

C

C

Clint D. McDonnough

Office Managing Partner for Ernst & Young LLP’s Dallas office

3

1

C

Robert A. McNamara

Group Chief Risk Officer of Lend Lease Corporation

5

1

Mark R. Patterson

President of MP Realty Advisors, LLC

5

3

C

Lynne B. Sagalyn(3)

Earle W. Kazis and Benjamin Schore Professor Emerita of Real Estate at Columbia Business School

23

1

Thomas W. Toomey(5)

Chairman and CEO of UDR, Inc.

18

0

(1)

The professional experiences listed for Dr. Cattanach and Messrs. Grove, McDonnough and McNamara are these nominees’ former principal occupations.

(2)

Committee assignments for the period from the 2019 annual meeting to the 2020 annual meeting will be made after the annual election of directors at the 2019 annual meeting.

(3)

Mr. Freeman and Dr. Sagalyn will not stand for re-election to the board and their terms on the board and their committee memberships will end immediately following the 2019 Annual Meeting.

(4)

Lead Independent Director.

(5)

Chairman and Chief Executive Officer.

KEY: AC = Audit and Risk Management Committee    CC = Compensation and Management Development Committee    GC = Governance Committee    
NC =  Nominating Committee    EC = Executive Committee     = Member    C = Chair

PROPOSAL NO. 1 ELECTION OF DIRECTORS

KATHERINE A.

CATTANACH, PH.D.

JON A. GROVE

Age:

74

Age:

74

UDR Board Service

UDR Board Service



Tenure:  13 years (2006)



Tenure:  21 years (1998)



Audit Committee



Compensation Committee



Governance Committee

Independent

Independent

Professional Experience

    Former General Partner of INVESCO Private Capital, Inc. (formerly Sovereign Financial Services, Inc.), a company specializing in private equity investments, from 1987 to 2005.

Relevant Skills

    Currently a member of the Institute of Chartered Financial Analysts.

    Has a strong background in both business and academia, and her expertise in investments and finance is recognized nationally and internationally.

    Has executive management experience, having served as Founder and Chief Executive Officer of Sovereign Financial Services, Inc. and as Executive Vice President of Captiva Corporation.

    Has a Ph.D. in Finance and has served on the faculty of the College of Business at the University of Denver and as an Associate Professor of Finance at the University of Denver’s Graduate School of Business.

Other

    Secretary and a member of the Board of Trustees of Great Outdoors Colorado. She is active in, and serves as a member of, numerous charitable organizations.

    Member of the board of directors and chair of the audit committee of Great West Trust Company.

    Extensive civic leadership, including the Colorado Commission on Higher Education, the Governing Board for the Colorado State University System, the Foundation for Metropolitan State College, the Board of Trustees for the Colorado Chapter of the Nature Conservancy and the Board of Trustees for the Yellowstone Association.

    From 2005 to March 2006, she served as a director and member of the audit and compensation committees of Collect America, Ltd.

    Has served as a member of several corporate boards and board committees and on several partnership advisory boards.

Professional Experience

    Former Chairman, President and Chief Executive Officer of ASR Investments Corporation from its organization in 1987 until our acquisition of ASR in 1998.

    Former Chairman and director of American Southwest Holdings, LLC and SecurNet Mortgage Securities LLC.

Relevant Skills

    From 1987 to 1998, served as the Chairman, President and Chief Executive Officer of a publicly traded real estate investment trust that owned and operated apartment communities.

MARY ANN KING

JAMES D. KLINGBEIL

Age:

66

Age:

83

UDR Board Service

UDR Board Service



Tenure:  4 years (2015)



Tenure:  21 years (1998)



Audit Committee



Lead Independent Director



Executive Committee Chair



Nominating Committee Chair

Independent

Independent

Professional Experience

    Co-Chair of Moran & Company, a real estate brokerage firm focusing exclusively on multifamily assets and mixed use assets with significant multifamily components.

    Partner in Charge of Moran & Company’s Irvine, California office.

Relevant Skills

    Ms. King has been in the apartment industry since 1983.

    Has served three terms as a ULI trustee.

    Is currently a member of the National Multifamily Housing Council’s Executive Committee.

    Previously served on the National Multifamily Housing Council’s Leadership Team from 2000 to 2008 and chaired that organization from 2006 to 2008.

Other

    Over the Rainbow Association – Member of the Board of Directors, Member of the Executive Committee and Development Committee and Member and Vice Chairman of the Association’s LIFE Fund.

    Member of the Advisory Board of Sack Properties.

    Full Member of ULI and Member of MFC-Blue Product Council; former Trustee from 2012-2015 and former Product Council Counselor for all four Multifamily Product Councils.

Professional Experience

    Lead Independent Director since January 2018.

    Chairman of the Board of Directors from March 2010 to December 2017 and Vice Chairman of the Board from October 2000 until March 2010.

    Chairman of Klingbeil Capital Management and The Klingbeil Company.

    Chairman and Chief Executive Officer of American Apartment Communities II from 1995 until its merger with the Company in December of 1998.

    He currently serves as a director of numerous private companies and on the Board of Trustees of The Ohio State University. He is also the past Chairman and a lifetime member of the Board of Trustees of the Urban Land Institute and a member of the ULI Foundation Board.

Relevant Skills

    Mr. Klingbeil has been active in nearly every aspect of real estate investment, development and management for over 50 years, with a special focus on building, acquiring, managing and/or selling multifamily communities.

    Chairman and Chief Executive Officer of American Apartment Communities II, which had a value of $800 million when we acquired it in December 1998, and he has demonstrated exceptional leadership abilities as a member of our board since that acquisition.

CLINT D. MCDONNOUGH

ROBERT A. MCNAMARA

Age:

63

Age:

65

UDR Board Service

UDR Board Service



Tenure:  3 years (2016)



Tenure:  5 years (2014)



Audit Committee Chair



Compensation Committee



Nominating Committee

Independent

Independent

Professional Experience

    Managing Partner of McDonnough Consulting LLC, a consulting firm, since May 2016. 

    Served 38 years for Ernst & Young LLP before retiring in June, 2015.

    In his role as Office Managing Partner for Dallas, Texas, he was responsible for day-to-day practice operations.

    Prior to serving as the Office Managing Partner, Mr. McDonnough was the firm’s Managing Partner of Assurance & Advisory Business Services for the Southwest Area practice. He also served as Ernst & Young’s National Director of Real Estate Advisory Services.

Relevant Skills

    Served as Ernst & Young’s National Director of Real Estate Advisory Services, creating a unified national real estate consulting practice.

Other

    Has an extensive background in accounting, auditing and advisory services, having worked for 38 years with Ernst & Young LLP, including as the firm’s Office Managing Partner for Dallas, Texas, as Managing Partner of Assurance & Advisory Business Services for the Southwest Practice Area and as Director of Real Estate Advisory Services.

    Mr. McDonnough serves on the board of directors and is chair of the audit committee of Forterra (Nasdaq), a manufacturer of water and drainage pipe and products, and serves on the board of directors and chair of the audit committee of Orix USA, a diversified financial services company.

    Active in, and serves on the boards of, several charitable, civic and educational organizations.

Professional Experience

    Former Group Chief Risk Officer of the Lend Lease Corporation (ASX), an international property and infrastructure firm from 2014 to 2017.

    Former Chief Executive Officer Americas of Lend Lease Corporation (ASX) from 2010 to 2014.

    Former Chairman and Chief Executive Officer of Penhall/LVI International, an environmental remediation, concrete services and infrastructure repair firm, from 2006 to 2010.

    Mr. McNamara held various positions at Fluor Corporation, a global engineering and construction company, from 1996 to 2006, including Senior Executive and Group President.

    Mr. McNamara began his career at Marshall Contractors, Inc., a general contractor, where he held various positions from 1978 to 1996, including President and Chief Operating Officer.

Relevant Skills

    Was responsible for ensuring Lend Lease achieves world’s best practice in risk management and operational excellence. He also oversaw Lend Lease’s Building, Engineering and Services business in Australia.

    Mr. McNamara is an accomplished senior executive with significant expertise in construction, development and real estate investment.

    He brings to the board over 35 years of experience managing global businesses in the development, design and delivery of projects in the government, institutional, infrastructure and industrial sectors in senior management positions.

Other

    Member of the Board of Directors and a member of the audit committee of Jacobs Engineering Group, Inc. (NYSE), a provider of technical, professional and construction services.

    Former Board member of several privately-held firms.

    Mr. McNamara has also served on the board of the US China Business Council and as Chairman for the Construction Industry Institute’s Technology Implementation Task Force.

MARK R. PATTERSON

THOMAS W. TOOMEY

Age:

58

Age:

58

UDR Board Service

UDR Board Service



Tenure:  5 years (2014)



Tenure:  18 years (2001)



Compensation Committee Chair



Chairman of the Board



Nominating Committee



Executive Committee

Independent

Professional Experience

    Currently a real estate consultant and financial advisor and is a director and President of MP Realty Advisors, LLC.

    From September 2010 until March 2016, Mr. Patterson was Chairman, and until January 2015, Chairman and Chief Executive Officer, of Boomerang Systems, Inc., a manufacturer of fully automated, robotic parking systems.  In August 2015, Boomerang Systems, Inc. filed for bankruptcy under Chapter 11 of the US Bankruptcy Code.

    Until January 2009, Mr. Patterson was a Managing Director and the Head of Real Estate Global Principal Investments at Merrill Lynch, where he oversaw the real estate principal investing activities of Merrill Lynch. Mr. Patterson joined Merrill Lynch in April 2005 as the Global Head of Real Estate Investment Banking and in 2006 he also became the Co-Head of Global Commercial Real Estate, which encompassed real estate investment banking, principal investing and mortgage debt.

    Prior to joining Merrill Lynch, Mr. Patterson spent 16 years at Citigroup, where he was the Global Head of Real Estate Investment Banking since 1996.

    Previously, Mr. Patterson was with Chemical Realty Trust in New York from 1987 to 1989, as an Associate in the Real Estate Investment Banking group and in the Real Estate Group at Arthur Andersen in Houston, Texas from 1982 to 1985.

Relevant Skills

    Mr. Patterson has a strong background in real estate finance. During his tenure as Managing Director and Head of Real Estate Global Principal Investments at Merrill Lynch, Mr. Patterson oversaw investment banking, private equity and real estate debt.

Other

    Mr. Patterson is Chair of the board of directors, Chair of the governance committee and a member of the compensation committee and the investment committee of Americold Realty Trust (NYSE), a REIT focused on temperature-controlled warehouses, serves on the board of directors and is a member of the audit committee and compensation committee of Digital Realty Trust (NYSE), a REIT focused on data centers, and serves on the board of directors and is a member of the compensation committee and governance committee of Paramount Group, Inc. (NYSE), a REIT focused on Class A office properties.

    Between 2011 and 2017, Mr. Patterson served on the board of directors and was a member of the audit, compensation and governance committees of General Growth Properties, a REIT focused on shopping malls, which was listed on the NYSE until its acquisition in 2018.

    Mr. Patterson is an Advisory Director for Investcorp International, Inc., a global private equity manager, and a senior advisor to Rockefeller Capital Management, a private wealth management firm.

Professional Experience

    Chairman and Chief Executive Officer of UDR, Inc., an $18 billion, S&P 500 company, having served as Chief Executive Officer and a member of the board since joining the Company in 2001.  Mr. Toomey also served as President of the Company from 2001 to 2019.

    Over his tenure, Mr. Toomey has been instrumental in repositioning UDR’s portfolio, including the acquisition and disposition of over $17 billion in multifamily communities and development of $4 billion in multifamily communities, which has led to above average return of 13% for UDR’s shareholders. As of December 2018, UDR owned or had an ownership interest in approximately 48,860 apartment homes in select markets across the U.S.

Relevant Skills

    Chief Executive Officer of UDR.

    Prior to heading UDR, Mr. Toomey held various senior positions, including Chief Operating Officer and Chief Financial Officer, with AIMCO (NYSE), a multifamily REIT peer. At AIMCO, Mr. Toomey was instrumental in transforming the company into the largest apartment owner in the U.S., growing its portfolio ten-fold over his tenure.

    Prior to AIMCO, Mr. Toomey served as a Senior Vice President with Lincoln Property Company, a multifaceted, national real estate firm, for five years.

Other

    As a leader in the real estate industry, Mr. Toomey is Global Chair, a Trustee, Governor and Board member of the Urban Land Institute (ULI), a member of the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), on the Executive Committee of the National Multi Housing Council (NMHC), a member of The Real Estate Roundtable and is Chair and a Trustee of the Oregon State University Foundation.

    Mr. Toomey served on the board of directors and was a member of the audit committee of The Ryland Group, Inc. (NYSE), a home builder, from December 2013 until its merger with Standard Pacific in October 2015.

•

Statement on Corporate Governance;

•

Code of Business Conduct and Ethics;

•

Code of Ethics for Senior Financial Officers;

•

Related Person Transactions Policy;

•

Amended and Restated Insider Trading Policy;

•

Recoupment of Performance-Based Incentives Policy;

•

Executive Stock Ownership Guidelines;

•

Charter of the Audit Committee;

•

Charter of the Compensation Committee;

•

Charter of the Governance Committee; and

•

Charter of the Nominating Committee.

•

The board has adopted clear corporate governance policies;

•

Nine of our ten current board members (and seven of the eight to be voted on at the 2019 annual meeting) are independent directors as defined by the NYSE;

•

The independent directors meet regularly without the presence of management;

•

All members of the Audit Committee, Compensation Committee, Governance Committee and Nominating Committee are independent directors;

•

While the Chairman and Chief Executive Officer role is combined, the board has appointed a Lead Independent Director in accordance with our Statement on Corporate Governance;

•

The charters of the board committees clearly establish their respective roles and responsibilities and are reviewed annually;

•

The board has adopted a Code of Business Conduct and Ethics that applies to all of our directors, officers and employees;

•

We have a Code of Ethics for Senior Financial Officers that applies to our senior financial officers; and

•

We have a hotline with a 1-800 number and a third-party anonymous reporting system at www.mysafeworkplace.com available to all employees, and our Audit Committee has procedures in place for the anonymous submission of any employee complaint, including those relating to accounting, internal controls or auditing matters. Instructions for making a report are published in the Corporate Governance subsection of the Investor Relations page of the Company’s website at ir.udr.com.

Management Succession



The Company maintains an executive talent pipeline for every executive officer position, including the CEO position.



The executive talent pipeline includes “interim,” “ready now,” and “under development” candidates for each position.  The Company has an intentional focus on those formally under development for executive roles.  Management is also focused on attracting, developing and retaining strong talent across the organization.



The executive talent pipeline is formally updated annually and is the main topic of at least two of the Compensation Committee’s meetings each year.  The Compensation Committee also reviews the pipeline in connection with year-end performance and compensation reviews for every executive officer position.  The pipeline is discussed regularly at the executive management level as well.



Talent development and succession planning is a coordinated effort among the CEO, the Compensation Committee, and the Company’s Human Resources team, as well as each succession candidate.



The board is provided exposure to succession candidates for executive officer positions, including by attendance of potential candidates at board meetings from time-to-time.



All executive succession candidates have formal development plans.



All CEO succession candidates receive one-on-one development from a professional executive coach.



The CEO provides formal updates to the Compensation Committee and the Board annually on CEO succession candidates’ development plan progress.



The Company maintains a forward-looking approach to succession. Positions are filled considering the business strategy and needs at the time of a vacancy and the candidate’s skills, experience, expertise, leadership and fit.

Responsibilities of the

Board of Directors:

In addition to each director’s basic duties of care and loyalty, the board has separate and specific obligations under our Statement on Corporate Governance. Among other things, these obligations require directors to effectively monitor management’s capabilities, compensation, risk oversight, leadership and performance, without undermining management’s ability to successfully operate the business. In addition, the board and the board’s committees have the authority to retain outside legal, accounting or other advisors, as necessary, to carry out their responsibilities.

Director Education:

All directors are expected to be knowledgeable about the Company and its industry and to understand their duties and responsibilities as directors. The Company recognizes the importance of continuing education for directors and is committed to supporting continuing director education in order to enhance board and committee performance. We conduct periodic continuing education for directors and, at a director’s request, we will arrange for the director’s participation in cost-effective continuing education programs offered by third parties that are relevant to the director’s role as a board and committee member. All of our independent directors are expected to participate in orientation programs. In addition, orientation sessions are conducted by senior management to familiarize directors with the Company’s strategic plans, significant financial, accounting and risk management issues, our compliance programs, our Code of Business Conduct and Ethics, and our principal officers, as well as our internal and external auditors.  Finally, certain board meetings are held in locations where we own properties so that directors can observe our properties and operations.

Director Evaluations:

The board, acting through the Governance Committee, annually evaluates the effectiveness of the board collectively and of board members individually, and the performance of each standing board committee. The Governance Committee determines the appropriate means for this evaluation.

Committee Evaluations:

Each committee of the board annually evaluates the effectiveness and performance of each respective committee collectively and of the members of each respective committee individually.

Directors’ Share

Ownership Guidelines:

Our Statement on Corporate Governance provides that each director is expected to develop a meaningful equity stake in our Company over time and that after the fifth anniversary of election to the board, each director is required to own shares of the Company’s common stock and/or LTIP Units (as described below) equivalent to not less than 5 times their respective annual cash retainer. Each of our directors is in compliance with our share ownership guidelines.

Board Attendance at

Annual Meeting:

The board has adopted the following policy on director attendance at meetings: Absent extenuating circumstances, directors are expected to attend in person our annual meeting of shareholders, all regularly scheduled board and committee meetings and to participate telephonically in regularly scheduled board and committee meetings when they are unable to attend in person. All of our directors attended our 2018 annual meeting of shareholders.

Board Leadership Structure:

The board periodically evaluates our board leadership structure. As stated in our Statement on Corporate Governance, the board will exercise its discretion in combining or separating the offices of Chairman of the Board and Chief Executive Officer. The determination is based on the board’s judgment of the best interests of the Company and its shareholders from time to time.

We currently combine the roles of the Chairman of the Board and Chief Executive Officer.  Effective January 1, 2018, the board appointed Mr. Toomey Chairman of the Board, in addition to his roles at that time of Chief Executive Officer and President. The appointment of Mr. Toomey to the role of Chairman of the Board, Chief Executive Officer and President in 2018 reflected his strong knowledge of the multifamily real estate industry and the complex operations of UDR. Effective January 1, 2019, Mr. Toomey resigned as President and Mr. Davis was appointed President – Chief Operating Officer. The board believes that while serving as Chairman and Chief Executive Officer, Mr. Toomey is best equipped to lead the board in the discussion of key business and strategic matters, and to focus the board on the most critical issues facing UDR. The board further believes that, in serving as the Chairman and Chief Executive Officer, Mr. Toomey offers the Company-specific expertise and extensive industry knowledge that is necessary as we pursue our five strategic objectives, which are operating excellence, balance sheet strength, portfolio diversification, capital allocation and creating an empowering culture and a great place to work and live, while at the same time leading the board’s efforts in oversight of the Company and its management.

Our Statement on Corporate Governance provides that if the offices of Chairman of the Board and Chief Executive Officer are combined, or if the Chairman does not qualify as an independent director, the board will designate a Lead Independent Director, who will chair the executive sessions of the board and have such other duties as the board deems appropriate. The name of the Lead Independent Director will be disclosed in our annual proxy statement.  

Effective January 1, 2018, the board appointed Mr. Klingbeil as Lead Independent Director.  Mr. Klingbeil has extensive experience leading the board, having served as Chairman of the Board since 2010, and having served as Vice Chairman of the Board from 2000 to 2010.  Mr. Klingbeil has served on the board since 1998. As Lead Independent Director, Mr. Klingbeil’s duties include:

•   presiding at all meetings of the board at which the Chairman is not present;

•   calling meetings of the independent directors;

•   chairing meetings of the independent directors;

•   serving as a liaison between the Chairman and the independent directors;

•   approving agendas for the meetings of the board;

•   approving meeting schedules to assure that there is sufficient time for discussion of all agenda items;

•   developing and managing (with oversight from the Governance Committee) a process for the annual evaluation of the effectiveness of directors and the board;  

•   serving as an informal advisor to the Chairman on matters pertaining to board practices; and

•   performing such other duties as the board may from time to time delegate.

The board’s administration of its risk oversight function has not affected the board’s leadership structure.

Independence of the Audit,

Compensation, Governance and Nominating Committees:

The Audit, Compensation, Governance and Nominating Committees consist entirely of independent directors, as defined in the NYSE listing standards and the Company’s director independence standards. Each member of the Audit Committee and the Compensation Committee also satisfies the additional independence requirements set forth in rules under the Securities Exchange Act of 1934 and the NYSE listing standards.

Audit Committee

Financial Expert:

Each member of the Audit Committee is financially literate, and the board has determined that each member of the Audit Committee is an “audit committee financial expert” within the meaning of the SEC’s regulations.

Executive Sessions of

Independent Directors:

Our independent directors hold regularly scheduled executive sessions at which our independent directors meet without the presence of management. These executive sessions generally occur around regularly scheduled meetings of the board. The Lead Independent Director presides as chairman of these executive sessions. The Lead Independent Director is an independent director.

Compensation Committee

Interlocks and Insider

Participation:

The members of the Compensation Committee in fiscal 2018 included Jon A. Grove, Robert A. McNamara, Mark A. Patterson (Chairman) and Lynne B. Sagalyn. None of the members of the Compensation Committee during fiscal 2018, or as of the date of this proxy statement, is a former or current officer or employee of the Company or has any interlocking relationships as set forth in applicable SEC rules. In addition, during 2018 and through the date of this proxy statement, none of our executive officers has served as a member of the board or compensation committee of any other entity that has one or more executive officers serving as a member of our board or Compensation Committee.

Committee

Members on 

     12/31/2018    

Key Functions

Number of

Meetings

 in 2018  

Audit

Clint D. McDonnough(1)

Katherine A. Cattanach

Robert P. Freeman

Mary Ann King

• Assists the board in its general oversight of our accounting financial reporting process, audits of our financial statements, internal controls and internal audit functions

• Appointment, compensation and oversight of our independent auditors

• Represents and assists the board in its oversight of:

• the quality or integrity of our financial statements;

• our compliance with legal and regulatory requirements; and

• the performance of our internal audit department and independent auditors

• Discusses the adequacy and effectiveness of our internal controls over financial reporting

• Oversees our compliance with procedures and processes pertaining to corporate ethics and standards of business conduct

• Establishes procedures for the receipt, retention and treatment of complaints received concerning accounting, auditing, internal controls and financial reporting matters

• Oversees risk management policies and risk assessment

• Pre-approves all non-audit services to be provided to the Company by the independent auditors

9

Compensation

Mark R. Patterson(1)

Jon A. Grove

Robert A. McNamara

Lynne B. Sagalyn

• Administers and approves general compensation policies applicable to our key executive officers

• Reviews and approves compensation for the board and its committees

• Reviews and ensures the appropriate administration of our compensation and benefit plans, programs and policies

• Determines and approves the compensation of our CEO

• Sets annual objectives for, and evaluates the performance of, our CEO, with input from the board

• Reviews and recommends to the board short- and long-term compensation for the principal officers of the Company who report directly to our CEO

• Approves all employment and severance agreements for senior vice presidents and above

• Reviews and approves the contributions and awards, if any, under the management incentive programs and other management compensation, if any, including the long-term incentive plan

• Appoints and provides oversight of independent compensation consultants

5

Governance

Robert P. Freeman(1)

Katherine A. Cattanach

Lynne B. Sagalyn

• Exercises general oversight of board governance matters

• Reviews the size, role, composition and structure of our board and its committees

• Reviews and evaluates the board and its members

• Reviews and updates our Corporate Governance Policies

• Considers, develops and makes recommendations to the board regarding matters related to corporate governance

• Ensures that each committee conducts an annual assessment

4

Nominating

James D. Klingbeil(1)

Robert P. Freeman

Clint D. McDonnough

Mark R. Patterson

•  Identifies, evaluates and recommends to the board individuals

 qualified to serve as directors of the Company

• Establishes criteria for the selection of new directors

• Reviews the suitability for continued service as a director of board members

• Establishes procedures for the submission or recommendations by shareholders

0*

Committee

Members on 

     12/31/2018    

Key Functions

Number of

Meetings

 in 2018  

Executive

James D. Klingbeil(1)

Lynne B. Sagalyn

Thomas W. Toomey

• Performs the duties and exercises the powers delegated to it by the board

• Meets only when board action on a significant matter is required and it is impractical or not feasible to convene a full meeting of the board

0

(1)

Committee Chair.

*

During 2018, the board as a whole discussed board succession and refreshment.

•

reviewing with management the Company’s major financial exposures, including risk exposure to floating rate debt and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment process and risk management policies and net financial funding requirements, including financial flexibility, balance sheet maturities and financial ratios;

•

reviewing and discussing with management, the internal auditors and the independent auditors, the Company’s policies with respect to risk assessment and risk management, including operational risks such as cybersecurity risk;  

•

establishing procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters;

•

at each meeting reviews and discusses our cybersecurity risk matrix that identifies cybersecurity risks and measures our efficiency with respect to initiatives (including training initiatives) related to cybersecurity; and

•

at each meeting reviews and discusses our enterprise risk management and key risks, controls and mitigants.

STEPS TO ACHIEVE BOARD EFFECTIVENESS – EVALUATION PROCESSES

UDR, Inc. 

Attn: Board of Directors

1745 Shea Center Drive,

Suite 200

Highlands Ranch, Colorado 80129-1540

•

forward the communication to the director or directors to whom it is addressed;

•

attempt to handle the inquiry directly where the communication does not appear to require direct attention by the board, or an individual member of the board, e.g., the communication is a request for information about the Company or is a stock-related matter; or

•

not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

Name

(a)

        Fees Earned         

or Paid

in Cash ($)

(b)

Stock

Awards  ($)

(c)(1)(2)

Option

Awards ($)

(d)

Non-Equity

Incentive Plan

  Compensation ($)  

(e)

Change in

Pension

Value and

Nonqualified

Deferred

Compensation

Earnings

(f)

All Other

Compensation ($)

(g)(3)

Total ($)

(h)

  Katherine A. Cattanach(4)

$

80,000

$

-0-

        -0-

      -0-

$

$

  Robert P. Freeman(4)

80,000

-0-

        -0-

      -0-

  Jon A. Grove(4)

80,000

-0-

        -0-

      -0-

  Mary Ann King(4)

80,000

-0-

        -0-

      -0-

  James D. Klingbeil(4)

120,000

-0-

        -0-

      -0-

  Clint D. McDonnough(4)

80,000

-0-

        -0-

      -0-

  Robert A. McNamara

80,000

-0-

        -0-

      -0-

  Mark R. Patterson

80,000

-0-

        -0-

      -0-

  Lynne B. Sagalyn(4)

80,000

-0-

        -0-

      -0-

-

  Thomas W. Toomey(5)

-0-  

-0-  

-0-

        -0-

      -0-

-0-  

-0-    

(1)

The dollar amount reflected in the “Stock Awards” column reflects the aggregate grant date fair value, computed in accordance with FASB ASC Topic 718, of a grant of shares of restricted stock or Class 1 LTIP Units, which vested on the first anniversary date of the grant, as discussed below under “Director Compensation Table Discussion.” For those independent directors who elected to receive restricted stock, the amount of restricted stock was 3,547 shares (6,043 shares for an independent Chairman of the Board), which was priced at $38.06 per share, which was the closing sales price of our common stock on January 2, 2018, the date of grant. For those independent directors who elected to receive Class 1 LTIP Units, the amount was 3,547 units (6,043 units for an independent Chairman of the Board), and the Class 1 LTIP Units were priced at $38.06 per unit, which was the closing sales price of our common stock on January 2, 2018, the date of grant.