ARES COMMERCIAL REAL ESTATE REIT C (ACRE)
Sector: Financials
2026 Annual Meeting Analysis
ARES COMMERCIAL REAL ESTATE REIT C · Meeting: May 27, 2026
Directors FOR
0
Directors AGAINST
2
Say on Pay
FOR
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Mr. Benjamin has served as Chairman since February 2018, giving him full tenure overlap with ACRE's severe underperformance — the stock has lost about 19% over three years while the mortgage REIT benchmark (REM — iShares Mortgage Real Estate ETF) gained 31%, a gap of nearly 50 percentage points that far exceeds the 30-point threshold required to trigger a vote against; the 5-year record is equally poor (ACRE -35% while REM held up), so there is no long-term track record to offset the recent shortfall.
Ms. Blakely has been a director since February 2014 and Lead Independent Director, meaning she has been on the board throughout the entire period of underperformance; ACRE's stock has fallen roughly 19% over the past three years while the mortgage REIT benchmark (REM — iShares Mortgage Real Estate ETF) rose 31%, a nearly 50-percentage-point shortfall that triggers a vote against, and the 5-year picture is even worse, leaving no mitigating long-term track record to support re-election.
For Analysis
Both Class II director nominees — William S. Benjamin (Chairman) and Caroline E. Blakely (Lead Independent Director) — receive AGAINST votes due to ACRE's significant stock underperformance relative to the mortgage REIT sector benchmark (REM — iShares Mortgage Real Estate ETF). The company's 3-year price return of -18.8% trails REM's +31.0% by approximately 49.8 percentage points, far exceeding the 30-point trigger threshold applicable when absolute TSR is negative. The 5-year check confirms sustained underperformance, removing any mitigating factor. Both directors have served long enough to bear full accountability for this record.
Say on Pay
✓ FORCEO
Bryan P. Donohoe
Total Comp
$263,340
Prior Support
91%%
ACRE is externally managed, meaning the CEO and other named executives are employees of the manager (Ares Management) and receive no direct cash salary or bonus from the company itself; the only compensation ACRE directly provides is equity awards, and the CEO's total reported compensation for 2025 was just $263,340 — a very modest figure for a company of this size that is well within benchmark expectations for an externally managed mortgage REIT of ACRE's market cap. The prior year say-on-pay vote received approximately 91% shareholder support, indicating broad satisfaction with the compensation structure, and the company has adopted a NYSE-compliant clawback policy. While the company's stock performance has been poor, the externally managed structure means the pay-for-performance link operates primarily through the management fee and incentive fee framework rather than through direct executive pay, making the pay level question the dominant factor here, and on that basis the compensation is reasonable.
Auditor Ratification
✓ FORAuditor
Ernst & Young LLP
Tenure
14 yrs
Audit Fees
$962,100
Non-Audit Fees
$0
Ernst & Young LLP has audited ACRE since its inception in September 2011 (approximately 14 years), well below the 25-year tenure threshold that would trigger concern; all fees paid in 2025 were pure audit fees with zero non-audit, tax, or other fees, so the non-audit fee ratio is 0% — far below the 50% threshold — and there are no reported restatements or independence issues.
Overall Assessment
The 2026 ACRE annual meeting presents three proposals: both director nominees receive AGAINST votes due to the company's severe and sustained underperformance versus the mortgage REIT benchmark (REM — iShares Mortgage Real Estate ETF), with a nearly 50-percentage-point shortfall over three years; the auditor ratification and say-on-pay proposals both receive FOR votes as Ernst & Young's fees are clean and the externally managed CEO compensation is modest and well-supported by shareholders.