AINC Ashford Holding Company

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934 (Amendment No. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

 

March 28, 2023

Dear Stockholders:

On behalf of the Board of Directors of Ashford Inc., I cordially invite you to attend our 2023 Annual Meeting of Stockholders, which will be held at 9:00 a.m., Mountain Standard Time, on Wednesday, May 10, 2023, at the Four Seasons Resort Scottsdale at Troon North, 10600 East Crescent Moon Drive, Scottsdale, Arizona 85362-8342.

2022 was a defining year for Ashford as we continued to experience recovery in the hospitality industry and successfully executed on several of our growth strategies. Our advised REIT platforms as well as our operating businesses delivered strong results. Our company provides a unique investment opportunity in the hospitality industry given our vertical integration and our ability to accelerate growth and maximize shareholder value.

As we enter 2023, we feel well-positioned and poised for further growth as we focus on our two main growth strategies of growing our assets under management and growing our third-party business.

We encourage you to read this proxy statement carefully and to vote your proxy as soon as possible so that your shares will be represented at the meeting.

Sincerely,

 

 

You may vote at the 2023 Annual Meeting of Stockholders the shares of common stock and Series D Convertible Preferred Stock (which vote on an as-converted basis with our common stock, subject to certain limitations) of which you were the holder of record at the close of business on March 10, 2023.

By order of the Board of Directors,

 

Deric S. Eubanks,

14185 Dallas Parkway, Suite 1200

Dallas, Texas 75254

March 28, 2023

This summary highlights selected information contained in this proxy statement, but it does not contain all the information you should consider in determining how to vote your shares of our common stock or Series D Convertible Preferred Stock (which vote on an as-converted basis with our common stock, subject to certain limitations) at the 2023 annual meeting of stockholders of the Company. We urge you to read the entire proxy statement before you vote. This proxy statement or the Notice of Internet Availability of Proxy Materials was first made available to stockholders on or about March 28, 2023.

We are providing these proxy materials in connection with the solicitation by the Board of Directors of Ashford Inc. of proxies to be voted at our 2023 annual meeting of stockholders.

In this proxy statement, unless otherwise indicated or as the context otherwise requires:

We, together with Ashford LLC, serve as external advisor to each of Ashford Trust and Braemar. In this proxy statement, we refer to Ashford Inc. and Ashford LLC collectively as “advisor.”

The Board embodies a broad and diverse set of experiences, qualifications, attributes and skills. Below is a brief summary of some of the attributes, skills and experiences of our director nominees. For a more complete description of each director nominee’s qualifications, please see their biographies starting on page 5.

 

We are committed to the values of effective corporate governance and high ethical standards. Our Board believes that these values are conducive to the strong performance of the Company and creating long term stockholder value. Our governance framework gives our independent directors the structure necessary to provide oversight, direction, advice and counsel to the management of the Company. This framework is described in more detail in our Corporate Governance Guidelines and our Code of Business Conduct and Ethics, which can be found on our website at www.ashfordinc.com by clicking the “INVESTORS” tab, then the “CORPORATE GOVERNANCE” tab and then the “GOVERNANCE DOCUMENTS” link. The information contained on our website is expressly not incorporated by reference into this proxy statement.

Set forth below is a summary of our corporate governance framework.

 

 

 

 

 

 

 

 

 

Our Nominating and Corporate Governance Committee and the full Board believe a complementary mix of diverse qualifications, skills, attributes and experiences will best serve the Company and its stockholders. The summary of our director nominees’ qualifications, skills, attributes and experiences that appears below, and the related narrative for each director nominee appearing in the directors’ biographies above, note some of the specific experience, qualifications, attributes and skills for each director that the Board considers important in determining that each nominee should serve on the Board in light of the Company’s business, structure and strategic direction. The absence of a checkmark for a particular skill does not mean the director in question is unable to contribute to the decision-making process in that area.

 

The Board is committed to corporate governance practices that promote the long-term interest of our stockholders. The Board regularly reviews developments in corporate governance and updates the Company’s corporate governance framework, including its corporate governance policies and guidelines, as it deems necessary and appropriate. Our policies and practices reflect corporate governance initiatives that comply with the listing requirements of the NYSE American and the corporate governance requirements of the Sarbanes Oxley Act of 2002. We maintain a corporate governance section on our website, which includes key information about our corporate governance initiatives including our Corporate Governance Guidelines, charters for the committees of the Board, our Code of Business Conduct and Ethics and our Code of Ethics for the Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer. The corporate governance section can be found on our website at www.ashfordinc.com by clicking the “INVESTORS” tab, then the “CORPORATE GOVERNANCE” tab and then the “GOVERNANCE DOCUMENTS” link. The information contained on our website is expressly not incorporated by reference into this proxy statement.

Our Code of Business Conduct and Ethics applies to each of our directors and officers (including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and our Executive Vice President, General Counsel and Secretary (or their respective successors)) and our employees. Among other matters, our Code of Business Conduct and Ethics is designed to deter wrongdoing and to promote:

Any waiver of the Code of Business Conduct and Ethics for our executive officers or directors may be made only by the Board or one of the Board committees and will be promptly disclosed if and to the extent required by law or stock exchange regulations.

The Board regularly considers the optimal leadership structure for the Company and its stockholders. In making decisions related to our leadership structure, specifically when determining whether to have a joint Chief Executive Officer and Chairman or to separate these offices, the Board considers many factors, including the specific needs of the Company in light of its current strategic initiatives and the best interest of our stockholders.

Upon the completion of our spin-off from Ashford Trust in November 2014, the Board determined that Mr. Monty J. Bennett was the best candidate to fill the role of Chairman of the Board as well as to serve as our Chief Executive Officer. In making this determination, the Board took into consideration the Company’s strategic initiatives, Mr. Monty J. Bennett’s expertise in the hospitality industry, which he has developed over the last 30 years, and his superior performance, as evidenced by the total stockholder return during Mr. Monty J. Bennett’s tenure as Chief Executive Officer of Ashford Trust. The Board continues to believe that combining the roles of Chairman and Chief Executive Officer at this time is in the best interest of our stockholders and that our current leadership structure provides a very well-functioning and effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.

The combined role of Chairman and Chief Executive Officer is both counterbalanced and enhanced by an independent director serving as the Lead Director. In 2022, the Board re-appointed Mr. Brian Wheeler to serve as the Lead Director for a one-year term. Pursuant to our Corporate Governance Guidelines, the Lead Director has the following duties and responsibilities:

In 2022, our independent directors held three meetings or executive sessions.

In addition, pursuant to our bylaws, the Board must maintain a majority of independent directors at all times, and pursuant our Corporate Governance Guidelines, if the Chairman of the Board is not an independent director, at least two-thirds of our directors must be independent. The Board must also comply with each of the conflict of interest policies discussed in “Certain Relationships and Related Person Transactions-Conflict of Interest Policies.” Our bylaws, Corporate Governance Guidelines and conflict of interest policies are designed to provide a strong and independent Board that provides balance to the Chief Executive Officer and Chairman positions and ensure independent director input and control over matters involving potential conflicts of interest.

The business and affairs of the Company are managed by or under the direction of the Board in accordance with Nevada law. The Board provides direction to, and oversight of, management of the Company. In addition, the Board establishes the strategic direction of the Company and oversees the performance of the Company’s business, management and the employees. The management of the Company is responsible for presenting business objectives, opportunities and/or strategic plans to our Board for review and approval and for implementing the Company’s strategic direction and the Board’s directives.

The Board recognizes the importance of ensuring that our overall business strategy is designed to create long term value for our stockholders and maintains an active oversight role in formulating, planning and implementing the Company’s strategy. The Board regularly considers the progress of and challenges to the Company’s strategy and related risks throughout the year. At each regularly scheduled board meeting, the management and the Board discuss strategic and other significant business developments since the last meeting and the Board considers, recommends and approves any changes, if any, in strategies for the Company.

Our full Board has ultimate responsibility for risk oversight, but the committees of our Board help oversee risk in areas over which they have responsibility. The Board does not view risk in isolation. Risks are considered in virtually every business decision and as part of the Company’s business strategy. Our Board and the Board committees receive regular updates related to various risks for both our Company and our industry. The Audit Committee regularly receives and discusses reports from members of management who are involved in the risk assessment and risk management functions of our Company. The Compensation Committee annually reviews the overall structure of our equity compensation programs to ensure that those programs do not encourage executives to take unnecessary or excessive risks.

The Board, acting through the Nominating and Corporate Governance Committee, has reviewed and concurred in a management succession plan, developed by our Chairman, to ensure continuity in senior management. This plan, on which our Chief Executive Officer is to report from time to time, addresses:

The plan also includes an assessment of senior management experience, performance, skills and planned career paths.

In addition to ensuring the Board reflects an appropriate mix of experiences, qualifications, attributes and skills, the Nominating and Corporate Governance Committee also focuses on director succession. Recently, based on consideration of best corporate governance practices and upon the recommendation of the Nominating and Corporate Governance Committee, the Board amended its Corporate Governance Guidelines to remove the requirement that a director, upon attaining the age of 70 and annually thereafter, or an individual who would be 70 years of age at the time of their election as a director, may not serve on the Board unless the Board waives such limitation.

The Nominating and Corporate Governance Committee recommends qualified candidates for Board membership based on the following criteria:

In connection with the merit-based selection of nominees for director, the Board has regard for the need to consider director candidates from different and diverse backgrounds, including sex, race, color, ethnicity, age and geography. Consideration will also be given to the Board’s desire for an overall balance of professional diversity, including background, experience, perspective, viewpoint, education and skills. The Board, taking into consideration the recommendations of the Nominating and Corporate Governance Committee, is responsible for selecting the director nominees for election by the stockholders and for appointing directors to the Board between annual meetings to fill vacancies, with primary emphasis on the criteria set forth above. The Board and the Nominating and Corporate Governance Committee assess the effectiveness of the Board’s diversity efforts as part of the annual Board evaluation process.

Our bylaws permit stockholders to nominate candidates for election as directors of the Company at an annual meeting of stockholders. Stockholders wishing to nominate director candidates can do so by providing a written notice to the Corporate Secretary, Ashford Inc., 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. Stockholder nomination notices and the accompanying certificate, as described below, must be received by the Corporate Secretary not earlier than November 29, 2023 and not later than 5:00 p.m., Eastern time, on December 29, 2023 for the nominated individuals to be considered for candidacy at the 2024 annual meeting of stockholders. Such nomination notices must include all information regarding the proposed nominee that would be required to be disclosed in connection with the solicitation of proxies for the election of the proposed nominee as a director in an

election contest pursuant to the SEC’s proxy rules under the Exchange Act as well as certain other information regarding the proposed nominee, the stockholder nominating such proposed nominee and certain persons associated with such stockholder, and must be accompanied by a certificate of the nominating stockholder as to certain matters, all as prescribed in the Company’s bylaws. A detailed description of the information required to be included in such notice and the accompanying certificate is included in the Company’s bylaws. You may contact the Corporate Secretary at the address above to obtain a copy of the relevant bylaw provisions regarding the requirements for making stockholder nominations.

Failure of the notice and certificate to comply fully with the requirements of the Company’s bylaws in such regard will result in the stockholder nomination being invalid and the election of the proposed nominee as a director of the Company not being voted on at the pertinent annual meeting of stockholders.

On December 15, 2016, the Board adopted and approved an amendment to our bylaws that modified the advance notice procedures to require that only stockholders that have owned at least 1% of our outstanding common stock continuously for at least one year may nominate director candidates and propose other business to be considered at an annual meeting of stockholders. The amendment was previously approved by our stockholders at our annual meeting held on May 13, 2015.

Stockholders and other interested parties who wish to contact any of our directors either individually or as a group may do so by writing to them c/o the Corporate Secretary, Ashford Inc., 14185 Dallas Parkway, Suite 1200, Dallas, Texas 75254. Stockholders’ and other interested parties’ letters are reviewed by Company personnel based on criteria established and maintained by our Nominating and Corporate Governance Committee, which includes filtering out improper or irrelevant topics such as solicitations.

The Board and senior management conduct a comprehensive orientation process for new directors to become familiar with our vision, strategic direction, core values, including ethics, financial matters, corporate governance policies and practices and other key policies and practices through a review of background material and meetings with senior management. The Board also recognizes the importance of continuing education for directors and is committed to providing education opportunities in order to improve both the Board’s and its committees’ performance. Senior management will assist in identifying and advising our directors about opportunities for continuing education, including conferences provided by independent third parties.

Upon the time a director’s principal occupation or business association changes substantially from the position he or she held when originally invited to join the Board, a director is required to tender a letter of proposed resignation from the Board to the chairperson of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will review the director’s continuation on the Board, and recommend to the Board whether, in light of all the circumstances, the Board should accept such proposed resignation or request that the director continue to serve.

We maintain a policy that prohibits our directors and executive officers from holding Company securities in a margin account or pledging Company securities as collateral for a loan. Our policy also prohibits our directors and executive officers from engaging in speculation with respect to Company securities, and specifically prohibits our executives from engaging in any short-term, speculative securities transactions involving Company securities and engaging in hedging transactions.

Our business is managed through the oversight and direction of the Board. Members of the Board are kept informed of our business through discussions with the Chairman of the Board, Chief Executive Officer, Lead Director and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees.

During the year ended December 31, 2022, the Board held six regular meetings and three meetings or executive sessions of our non-employee directors, each of whom is an independent director. Our Board must hold at least two regularly scheduled meetings per year of the non-employee directors without management present. All of our incumbent directors standing for re-election attended, in person or by telephone, at least 75% of all meetings of the Board and committees on which such director served, held during the period for which such person was a director or was a member of such committees, as applicable.

Mr. Monty J. Bennett serves as Chairman of the Board of Directors as well as Chief Executive Officer of the Company. He also serves as the Chairman of the board of directors of each of Braemar and Ashford Trust. Because of the conflicts of interest created by the relationships among us, Ashford Trust, Braemar, and each of their affiliates, many of the responsibilities of the Board have been delegated to our independent directors, as discussed below and under “Certain Relationships and Related Person Transactions-Conflict of Interest Policies.”

The Board determines the independence of our directors in accordance with Section 803A of the NYSE American LLC Company Guide and in accordance with our Corporate Governance Guidelines. The NYSE American LLC Company Guide requires an affirmative determination by the Board that the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. Moreover, our Corporate Governance Guidelines provide that if any director receives, during any 12-month period within the last three years, more than $120,000 in compensation from the Company or any of its direct or indirect subsidiaries, exclusive of director and committee fees and pension or other forms of deferred compensation, he or she will not be considered independent. Our Corporate Governance Guidelines also provide that at all times that the Chairman of the Board is not an independent director, at least two-thirds of the members of the Board should consist of independent directors. The full text of Corporate Governance Guidelines can be found on our website at www.ashfordinc.com by clicking the “INVESTORS” tab, then the “CORPORATE GOVERNANCE” tab, then the “GOVERNANCE DOCUMENTS” tab and then the “Corporate Governance Guidelines” link. The information contained on our website is expressly not incorporated by reference into this proxy statement.

Following deliberations, the Board has affirmatively determined that, with the exception of Mr. Monty J. Bennett, our Chief Executive Officer and Chairman, each director of the Company is independent of the Company and its management under the standards set forth in our Corporate Governance Guidelines and the NYSE American LLC Company Guide.

In making the independence determinations with respect to our current directors, the Board examined all relationships between each of our directors or their affiliates and the Company or its affiliates, including those reported below under the heading “Certain Relationships and Related Person Transactions” in this proxy statement and one additional relationship that did not rise to the level of a reportable related person transaction but were taken into consideration by the Board in making independence determinations. Mr. Wheeler’s wife owns a commercial printing company that is occasionally utilized by the Company, Ashford Trust and Braemar for printing needs. Total fees paid to this company by the Company, Ashford Trust and Braemar were, in the aggregate, $94,311, $27,013 and $17,692 in 2022, 2021 and 2020, respectively. The Board determined that these transactions did not impair the independence of the director involved. As a result of such analysis and independence determinations, the Board is comprised of a majority of independent directors, as required by Section 803A of the NYSE American LLC Company Guide. Any reference to an independent director herein means such director satisfies the independence criteria set forth in our Corporate Governance Guidelines and the NYSE American LLC Company Guide.

Historically, the standing committees of the Board have been the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Each of these committees is composed exclusively of independent directors. The independence of the members of the Audit Committee and the Compensation Committee

is determined in accordance with the heightened independence standards for membership on such committees of the rules of the NYSE American and applicable rules of the SEC. Each of the committees is governed by a written charter that has been approved by the Board. A copy of each charter can be found in the Investor section of our website at www.ashfordinc.com by clicking the “INVESTORS” tab, then the “CORPORATE GOVERNANCE” tab and then the “GOVERNANCE DOCUMENTS” link. The information contained on our website is expressly not incorporated by reference into this proxy statement. The committee members who currently serve on each active committee and a description of the principal responsibilities of each such committee follows:

The Board has determined that Dinesh P. Chandiramani qualifies as an “Audit Committee financial expert,” as defined by the applicable rules and regulations of the Exchange Act. All of the members of our Audit Committee on and after January 1, 2022 are “financially sophisticated” under the rules of the NYSE American LLC Company Guide.

The Compensation Committee has the authority to retain and terminate any compensation consultant to assist it in the evaluation of officer compensation, or to delegate its duties and responsibilities to one or more subcommittees as it deems appropriate. In 2022, the Compensation Committee retained Gressle & McGinley LLC (“Gressle & McGinley”) as its independent compensation consultant. Gressle & McGinley provided competitive market data to support the Compensation Committee’s decisions on the value of cash bonuses and equity to be awarded to our named executive officers. Gressle & McGinley has not performed any other services for the Company and performed its services only on behalf of, and at the direction of, the Compensation Committee. Our Compensation Committee reviewed the independence of Gressle & McGinley in light of SEC rules and the NYSE American LLC Company Guide regarding compensation consultant independence and has affirmatively concluded that Gressle & McGinley is independent from management of the Company and has no conflicts of interest relating to its engagement by our Compensation Committee. Messrs. Darrell T. Hail, W. Michael Murphy and Brian Wheeler served as members of the Compensation Committee during 2022.

The Nominating and Corporate Governance Committee has the authority to retain and terminate any search firm to be used to identify director candidates.

The following table summarizes the compensation paid by us to our non-employee directors for their services as directors for the fiscal year ended December 31, 2022:

We provide advisory services, asset management services, hotel management services, project management services, event technology and creative communications solutions, mobile room keys and keyless entry solutions, watersports activities and other travel services, hypoallergenic premium room products and services, debt placement services, real estate advisory and brokerage services, and wholesaler, dealer-manager, and other broker-dealer services. We seek to grow through the implementation of two primary strategies: (i) increasing our assets under management; and (ii) pursuing third-party business to grow our other products and services businesses. A brief description of our key services is provided below.

We are currently the advisor for Ashford Trust and Braemar. In such capacity, we are responsible for implementing the investment strategies and managing the day-to-day operations of Ashford Trust and Braemar from an ownership perspective, in each case subject to the advisory agreements and the supervision and oversight of the respective board of directors of Ashford Trust and Braemar. Ashford Trust is focused on investing in full service hotels in the upscale and upper-upscale segments in the United States that have revenue per available room (“RevPAR”) generally less than twice the national average. Braemar invests primarily in luxury hotels and resorts with RevPAR of at least twice the U.S. national average.

We provide the personnel and services that we believe are necessary for each of Ashford Trust and Braemar to conduct their respective businesses. We may also perform similar functions for new or additional platforms. Ashford Trust and Braemar have no employees and all of their respective executive officers are our employees (or employees of our subsidiaries). We receive fees and reimbursement of certain expenses from each of Ashford Trust and Braemar for providing such services, the proceeds of which are used in part to pay compensation to our personnel, but Ashford Trust and Braemar do not specifically reimburse us for any executive employee compensation or benefits costs and the amount of our fees does not vary based on the amount of such executive compensation and benefits costs. In our capacity as an advisor, we are not responsible for managing the day-to-day operations of the individual hotel properties owned by either Ashford Trust or Braemar, which duties are, and will continue to be, the responsibility of the hotel management companies that operate the hotel properties owned by Ashford Trust and Braemar. However, as described further below, Remington, one of our subsidiaries which we acquired on November 6, 2019, operates certain of the hotel properties owned by Ashford Trust and Braemar.

In our advisory services business, we earn advisory fees from each company that we advise. The fees earned from each company that we advise include a base fee, payable in cash, on a monthly basis, for managing the respective day-to-day operations of the companies that we advise and the day-to-day operations of their respective subsidiaries from an ownership perspective, in each case in conformity with the respective investment guidelines of such client.

We provide asset management services to Ashford Trust and Braemar. Our strategic approach of designating at least one asset manager to each property allows us to leverage our extensive portfolio of subject matter experts, including asset management, revenue optimization, capital management, legal and risk management, data analysis, and property tax. Our fees for asset management services are included in advisory fees as noted above.

As of December 31, 2022, we provide hotel management services to 69 properties for Ashford Trust, four properties for Braemar and 45 properties for third parties through our subsidiary, Remington. Hotel management services consist of hotel operations, sales and marketing, revenue management, budget oversight, guest service, asset maintenance (not involving capital expenditures), and related services.

We provide comprehensive solutions for renovations and construction to substantially all of the hotels owned by Ashford Trust and Braemar and also to third-party clients through our subsidiary, Premier. Services provided by Premier consist of construction management, interior design, architecture, and the purchasing, expediting, warehousing, freight management, installation and supervision of property and equipment, and related services.

We provide an integrated suite of audio-visual services, including event, hospitality and creative services to third-party clients and, as of December 31, 2022, we have contracts in place as the exclusive in-house provider of event technology and audio visual services at 27 hotels owned by Ashford Trust and eight hotels owned by Braemar. We provide these services through Inspire Event Technologies Holdings, LLC, our subsidiary doing business as INSPIRE (“INSPIRE”).

We provide mobile room keys and keyless entry solutions to Ashford Trust and Braemar, as well as to third-party clients, through our subsidiary, OpenKey, Inc.

We provide watersports, travel, concierge, and transportation services to Ashford Trust and Braemar, as well as to third-party clients, thought our subsidiary, RED Hospitality and Leisure LLC.

We provide hypoallergenic premium room products and services to Ashford Trust, Braemar, and third-party clients through our subsidiary, PRE Opco, LLC.

We provide debt placement and other related services to Ashford Trust and Braemar through our subsidiary, Lismore Capital II LLC.

We provide real estate advisory and brokerage services to Ashford Trust, Braemar, and third-party clients through our subsidiary, in which we hold a noncontrolling interest, Real Estate Advisory Holdings LLC.

We provide wholesaler, dealer-manager and other broker-dealer services to Braemar, Ashford Trust and certain of our subsidiaries through our subsidiary, Ashford Securities LLC.

Our compensation program balances three important objectives:

Our program has three components:

All three components are designed to allow us to compete for and retain the services of the persons needed for the growth and success of the Company.

The Compensation Committee oversees the compensation of our named executive officers, and retains an outside compensation consultant, Gressle & McGinley, to advise the Compensation Committee periodically on executive compensation matters. Our Compensation Committee has reviewed the independence of Gressle & McGinley in light of SEC rules and NYSE American listing standards regarding compensation consultant independence and has affirmatively concluded that Gressle & McGinley is independent from the Company and has no conflicts of interest relating to its engagement by our Compensation Committee (note that Gressle & McGinley is also the independent compensation consultant to the compensation committees of the boards of directors of Ashford Trust and Braemar).

The Compensation Committee sets salaries for our executives taking into account the market for asset management talent, as well as comparative analysis of salaries paid to other investment executives at companies with whom we compete for talent.

After evaluating the foregoing achievements, the Compensation Committee determined that it was appropriate to award each named executive officer (other than Mr. Welter, whose employment terminated during 2022) a cash bonus in respect of fiscal 2022 performance as set forth below in the Summary Compensation Table, under the “Bonus” column.

Our long-term equity incentive program historically had been composed of two principal components: time-based awards of restricted stock and stock options granted under our 2014 Incentive Plan. From our initial public offering and continuing through fiscal 2019 equity award grants, we granted stock options, which are designed to reward growth in the value of the Company over time. Commencing with equity award grants made in fiscal 2020, the Compensation Committee began to make equity grants in the form of time-based restricted stock, which provide a retention benefit as well as an opportunity to share in the increase in the value of the Company. The Compensation Committee believes that our long-term equity incentive program provides both a strong incentive to grow the value of the Company as well as a retention incentive through the opportunity to vest in restricted stock over time.

The Compensation Committee and Board determine the size of potential awards by officer based on a review of market pay levels, taking into consideration the size of our Company against our peers, as well as multiple other factors including, but not limited to, the Company’s and each named executive officer’s individual performance, competitive award opportunities provided to similarly situated executives, and our named executive officers’ roles and responsibilities.

On March 15, 2022, the Compensation Committee granted each named executive officer an award of restricted stock under the 2014 Incentive Plan. The restricted stock generally vests in three substantially equal installments on each of the first three anniversaries of the grant date, subject to accelerated vesting as discussed below under “Potential Payments Upon Termination of Employment or Change of Control.” Messrs. Eubanks and Hays each received an award of 17,206 shares of restricted stock, and Mr. Bennett received an award of 38,853 LTIP Units and 48,170 Class 2 LTIP Units. No equity grant was made to Mr. Welter, whose employment terminated during 2022.

On September 10, 2021, the independent members of the Board approved an amendment to the Amended and Restated Limited Liability Company Agreement of Ashford Hospitality Holdings LLC, a subsidiary operating partnership of the Company (“AHH”), that created a new class of Class 2 Long-Term Incentive Partnership Units in AHH (“Class 2 LTIP Units”). The Class 2 LTIP Units replicate the economics of a stock option granted by the Company by converting (prior to the applicable final conversion date) into a number of long-term incentive partnership units (“LTIP Units”) in AHH based on the appreciation in a share of the Company’s common stock over the issue price of the applicable Class 2 LTIP Unit. LTIP Units are in turn convertible into common limited partnership units of AHH, which are themselves redeemable for cash or, at the option of the Company, convertible into shares of the Company’s common stock on a 1-for-1 basis. The amendment was approved in order to provide certain executives of the Company, including the named executive officers, the opportunity to substitute Class 2 LTIP Units for stock options previously granted under the 2014 Incentive Plan, with such Class 2 LTIP Units having an issue price equal to the exercise price of the applicable substituted option and a final conversion date that is the same as the expiration date of the applicable substituted option. Mr. Bennett made such an election with respect to certain of his options and Mr. Hays made such an election with respect to all of his options, as reflected below in the “Outstanding Equity Awards at Fiscal Year End Table.”

We have employment agreements with each of our named executive officers. The current terms of our employment agreements with our named executive officers expire on December 31, 2023, but each agreement is subject to automatic one-year renewals, unless either party to the applicable employment agreement provides at least 120 days’ notice of non-renewal of such employment agreement.

The employment agreements for each of our named executive officers provided for in 2022:

Additionally, the named executive officers of the Company have the following benefits:

The cumulative cost of the medical exam and the additional disability and life insurance is not expected to exceed $10,000 annually for any individual executive.

Mr. Bennett’s targeted annual cash bonus range is 100% to 250% of his base salary, Mr. Hays’ targeted annual cash bonus range is 75% to 175% of his base salary and Mr. Eubanks’ targeted annual cash bonus range is 60% to 175% of his base salary.

Our 2014 Incentive Plan provides for both equity- and cash-based incentive compensation and for the grant of incentive awards to employees, consultants, and non-employee directors of our Company and its affiliates. The 2014 Incentive Plan is administered by the Compensation Committee.

Our 2014 Incentive Plan authorizes (i) a plan participant to purchase common stock of the Company for cash at a purchase price to be decided by the Compensation Committee, but not more than the fair market value per share of such common stock purchased on the date of such purchase, and (ii) the grant of:

Shares Subject to Our 2014 Incentive Plan. We initially reserved 420,000 shares of common stock for issuance under our 2014 Incentive Plan, which is equivalent to approximately 15% of the sum of (i) the issued and outstanding shares of our common stock immediately following our spin-off from Ashford Trust in November 2014 and (ii) the shares of our common stock reserved for issuance pursuant to the deferred compensation obligations we assumed in connection with the spin-off. In the event the outstanding shares of common stock are changed into or exchanged for a different number or kind of shares or other securities of the company by reason of a merger, consolidation, recapitalization, reclassification, stock split, stock dividend, combination of shares or the like, the aggregate number and class of securities available under our 2014 Incentive Plan will be ratably adjusted. In the event the number of

shares to be delivered upon the exercise or payment of any award granted under the 2014 Incentive Plan is reduced for any reason whatsoever, including any optional forfeitures for the payment of taxes, or in the event any award granted under our 2014 Incentive Plan can no longer under any circumstances be exercised or paid, the number of shares no longer subject to such award will be released from such award and be available under the 2014 Incentive Plan for the grant of additional awards.

The 2014 Incentive Plan contains a provision pursuant to which there is an automatic increase of authorized shares on January 1 of each year equal to 15% of the sum of: (i) the fully diluted share count as of January 1 of such year; and (ii) the shares of common stock reserved for issuance under the company’s deferred compensation plan, less shares available under the 2014 Incentive Plan as of December 31 of the previous year. After application of this provision, as of January 1, 2023, we had 724,987 shares of our common stock available for issuance under our 2014 Incentive Plan.

Eligibility. Under the 2014 Incentive Plan, we may grant awards to the employees, consultants, and non-management directors of our company and its affiliates. While we may grant incentive stock options only to employees of the Company or its subsidiaries, we may grant nonqualified stock options, bonus stock, stock appreciation rights, stock awards, and performance awards to any eligible participant.

Administration. Our 2014 Incentive Plan is administered by the Compensation Committee.

The 2014 Incentive Plan will terminate on November 12, 2024, and no new awards may be granted after the termination date. Awards made before the termination of our 2014 Incentive Plan will continue in accordance with their terms.

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally precludes a publicly held corporation from a federal income tax deduction for a taxable year for compensation in excess of $1 million paid to its “covered employees,” which generally include its chief executive officer, chief financial officer, its next three most highly compensated executive officers, and any individual who is (or was) a “covered employee” for any taxable year beginning after December 31, 2016.

Our company is structured such that compensation is not paid and deducted by the corporation, but at the lower-level operating partnership, which also serves as the employer of our employees. Section 162(m)’s deduction limitation applies to our distributive share of our operating partnership’s deduction for compensation paid to covered employees. The deductibility of compensation is only one of a multitude of factors that we consider in establishing compensation, and we and our Compensation Committee believe that it is important to retain flexibility to award compensation to our employees that appropriately incentivizes their retention, encourages performance, and aligns with our stockholders’ interests, even if the deductibility of that compensation is limited (whether under Section 162(m) or otherwise).

Our named executive officers are subject to stock ownership guidelines. Under our guidelines, our Chief Executive Officer is expected to hold an amount of our common stock with a value in excess of three times his or her base salary, and other executive officers are expected to hold an amount of our common stock with a value in excess of one-and-one-half times their annual base salary. Officers are expected to achieve compliance with these guidelines within four years of being appointed. Once an executive officer has met his or her guideline, he or she will not be considered to be out of compliance with the guideline as a result of stock price volatility. The Company calculates the minimum number of shares necessary to meet compliance with the guidelines, and that number of shares will be the number required to be held through the remaining term of an executive officer’s tenure. Although an executive officer may not sell any common stock granted to them in connection with their service to the Company until the executive officer is in compliance with the guidelines, no executive officer is required to acquire shares on the open market (or is prohibited from selling shares acquired on the open market) in order to meet compliance with the guidelines. For purposes of determining compliance, all units in our operating partnership, vested and unvested shares of restricted stock, and any shares we may be obligated to issue under a deferred compensation plan are counted on a one-to-one basis with shares of our common stock. As of December 31, 2022, each of our named executive officers had stock ownership that met the guidelines.

Our executive officers are prohibited from hedging or pledging any shares of our common stock.

Under the Company’s clawback policy, if the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirements, then the Compensation Committee, or, in the discretion of the Board, any other committee or body of the Board consisting only of independent directors, may require any Section 16 reporting officer, as well as any other officer holding the title of senior vice president or a more senior title whose job description includes the function of accounting or financial reporting (each, a “covered officer”), during the three-year period preceding the publication of the restated financial statement to reimburse the Company for any annual cash bonus and long-term equity incentive compensation earned during the prior three-year period in such amounts that the independent director committee determines to be in excess of the amount that such covered officer would have received had such compensation been calculated based on the financial results reported in the restated financial statement.

The independent director committee may take into account any factors it deems reasonable, necessary, and in the best interests of the Company to remedy any misconduct and prevent its recurrence. In determining whether to seek recoupment of any previously paid excess compensation and how much to recoup from each covered officer, the independent director committee must consider the accountability of the applicable covered officer, any conclusion by the independent director committee whether a covered officer engaged in wrongdoing, committed grossly negligent acts, omissions or engaged in willful misconduct, as well as any failure of the covered officer to report another person’s grossly negligent acts, omissions, or willful misconduct. In addition, if a covered officer engaged in intentional misconduct or violation of Company policy that contributed to the award or payment of any annual cash bonus or long-term equity incentive compensation to him or her that is greater than would have been paid or awarded in the absence of the misconduct or violation, the independent director committee may take other remedial and recovery action permitted by applicable law, as determined by such committee.

Under the Dodd-Frank Act, the SEC issued a rule in October 2022 directing the NYSE to adopt listing standards regarding the clawback of equity awards in certain circumstances. The NYSE released its proposed listing standards in response to the SEC rule on February 22, 2023, and those listing standards must become effective no later than November 28, 2023. Before those standards become effective, the Company will consider what changes to its recoupment policies are appropriate in light of those new standards and it will otherwise modify its recoupment policies if and as needed to comply with those standards.

In 2007, Ashford Trust implemented a deferred compensation plan which allowed its executives and directors, at their election, to defer portions of their compensation. We assumed the plan in connection with our spin-off from Ashford Trust. Mr. Bennett is the only named executive officer that has participated in this plan. On the spin-off date, we assumed a liability of $16,956,712 in connection with Mr. Bennett’s portion of the deferred compensation plan. No additional compensation has been deferred under the amended and restated plan following the spin-off.

Pursuant to the terms of the amended and restated plan, Mr. Bennett elected to invest his deferred compensation amounts in our common stock. As a result of this election, we have agreed to issue Mr. Bennett 195,579 shares of our common stock to satisfy the assumed deferred compensation obligation, and such shares will be issued beginning when the applicable deferral periods expire. We are currently obligated to begin payment of the deferred compensation obligations (and issuance of shares of our common stock) to Mr. Bennett over a five-year period that will begin in 2025. Such shares will be issued in equal quarterly installments of 9,779 shares per installment beginning in the first quarter of 2025, absent a subsequent deferral election by Mr. Bennett.

Prior to our assumption and amendment of the deferred compensation plan in November 2014, Ashford Trust paid deferred compensation plan participants who elected the company stock investment option dividend equivalents, which accrued as additional shares, if and to the extent Ashford Trust paid dividends on its common stock. Thereby, each executive who participated in the deferred compensation plan and elected the company stock investment option received his investment shares plus any related dividend equivalent shares at the time that distributions were made from the plan subject to applicable rules and limitations. After our assumption and amendment of the deferred compensation plan in November 2014, deferred compensation plan participants may elect our common stock as an investment option, and we will continue to make such dividend equivalent payments in shares of our common stock to the extent we pay dividends and deferred compensation plan participants elect common stock as the investment option.

We have employment agreements with each of our named executive officers who remain employed with us. Under the terms of the employment agreements, each of our named executive officers is entitled to receive certain severance benefits after termination of employment. The amount and nature of these benefits vary depending on the circumstances under which employment terminates. The employment agreements provide for certain specified benefits during the entire term of the employment agreement.

Each of the employment agreements of our named executive officers provides that, if the executive’s employment is terminated as a result of death or disability of the executive; by us without “cause” (including non-renewal of the agreement by us); by the executive for “good reason”; or a termination by us without “cause” or by the executive for good reason (or, for Mr. Bennett, for any reason) within one year following a “change of control” (each as defined in the applicable employment agreement), the executive will be entitled to accrued and unpaid salary to the date of such termination, pay for unused vacation, and any unpaid incentive bonus from the prior year plus the following severance payments and benefits, subject to his execution and non-revocation of a general release of claims:

Mr. Eubanks is also entitled to receive the pro-rated incentive bonus and benefit continuation described above upon a resignation for any reason within one year following a “change of control.”

The lump sum severance payment payable upon termination of an executive’s employment agreement in any of the circumstances described above is calculated as the sum of such executive’s then-current annual base salary plus his average bonus over the prior three years, multiplied by a severance multiplier. The severance multiplier is:

Additionally, the employment agreements for each of the named executive officers includes non-compete provisions as described below, and in the event the executive elects to end his employment with us without “good reason,” in exchange for the executive honoring his non-compete provisions, he will be entitled to the following additional payments:

If any named executive officer’s employment agreement is terminated by the Company for “cause” (as defined in the applicable employment agreement) the executive will be entitled solely to any accrued and unpaid salary to the date of such termination and any unpaid incentive bonus from the prior year.

Each of the employment agreements contain standard confidentiality, non-compete, non-solicitation, and noninterference provisions. The confidentiality provisions apply during the term of the employment agreement and at all times thereafter. The non-interference provisions apply during the term of the employment agreement. The non-solicitation and non-competition provisions apply during the term of the agreement, and for a period of one year following the termination of the executive.

As previously disclosed, Mr. Welter terminated employment with the Company and its affiliates effective July 15, 2022. In connection with such termination, Mr. Welter and Ashford Hospitality Services LLC, a subsidiary of the Company, entered into an agreement pursuant to which, in consideration of and subject to a release of claims by Mr. Welter and his continuing compliance with certain post-employment obligations, the parties agreed among other things that, (i) Mr. Welter would receive a lump-sum payment of $750,000 and, commencing in August 2022, payment of $6,397,067 in 24 equal monthly installments; (ii) Mr. Welter and his eligible dependents would generally be eligible thereafter for up to 12 months of COBRA cost reimbursement, if applicable; and (iii) all outstanding equity incentive awards granted to Mr. Welter would vest as contemplated by the underlying award agreements upon an involuntary termination.

The undersigned members of the Audit Committee have submitted this Report to the Board of Directors.

“Audit Fees” include fees and related expenses for professional services rendered in connection with audits of our annual financial statements and the financial statements of our subsidiaries, reviews of our unaudited quarterly financial information, reporting on the effectiveness of our internal controls over financial reporting and reviews and consultation regarding financial accounting and reporting matters. This category also includes fees for services that generally only the auditor responsibly can provide, such as statutory audits, comfort letters, consents, and assistance with review of our filings with the SEC.

“Audit Related Fees” include fees and related expenses for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements that are not Audit Fees. Audit Related Fees for the year ended December 31, 2022 include the standalone audit of the combined carve-out financial statements of Chesapeake’s predecessor entities related to the Company’s acquisition of Chesapeake in 2022.

“Tax Fees” include fees and related expenses billed for tax compliance services and federal and state tax advice and planning.

“All Other Fees” include fees and related expenses for products and services that are not Audit Fees, Audit Related Fees or Tax Fees.

Our Audit Committee has considered all fees provided by the independent auditor to us and concluded this involvement is compatible with maintaining the auditor’s independence.

Representatives of BDO USA, LLP will be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so, and will be available to respond to appropriate questions.

Ratification of the appointment of BDO USA, LLP as our independent auditor requires the affirmative “FOR” vote of a majority of the votes cast on such proposal. You may vote “FOR,” “AGAINST” or “ABSTAIN” from voting. Abstentions and broker non-votes, if any, will not be considered as votes cast under the Company’s bylaws, and accordingly will have no effect on the outcome of this Proposal Three. If you provide your proxy with no further instructions, your shares will be voted in accordance with the recommendations of the Board. In addition, this proposal is considered a routine item, and as such, banks, brokers and other nominees that do not receive voting instructions from beneficial owners may vote on this proposal in their discretion.

The Board of Directors unanimously recommends a vote FOR approval of Proposal Three, the ratification of the appointment of BDO USA, LLP as our independent auditor for the year ending December 31, 2023.