NEXPOINT RESIDENTIAL TRUST INC (NXRT)
Sector: Real Estate
2026 Annual Meeting Analysis
NEXPOINT RESIDENTIAL TRUST INC · Meeting: June 2, 2026
Directors FOR
0
Directors AGAINST
7
Say on Pay
AGAINST
Auditor
FOR
Director Elections
Election of Directors
Against Analysis
Mr. Dondero has served as President and Chairman since May 2015, meaning his tenure fully overlaps with the underperformance period; NXRT's 3-year price return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, well above the 30-percentage-point trigger threshold for negative absolute TSR, and the 5-year return of -32.4% provides no mitigating offset since long-term performance is similarly poor relative to ^FNER.
Mr. Mitts has served on the board since September 2014 and as an executive officer through December 2024, meaning his tenure fully covers the underperformance period; NXRT's 3-year return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, exceeding the 30-percentage-point trigger, and the 5-year record does not provide a mitigating recovery since performance is also negative over that horizon.
Mr. Constantino has served on the board since March 2015, giving him full overlap with the underperformance period; NXRT's 3-year return of -29.6% lags the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, well above the 30-percentage-point trigger, and the 5-year return of -32.4% similarly underperforms, so the 5-year mitigant that could downgrade the vote from AGAINST to FOR does not apply.
Mr. Kavanaugh has served on the board since March 2015, fully overlapping the underperformance period; NXRT's 3-year return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, exceeding the 30-percentage-point trigger for negative absolute TSR, and the 5-year return does not provide a recovery that would activate the mitigating downgrade to FOR.
Dr. Laffer has served on the board since May 2015, fully overlapping the underperformance period; NXRT's 3-year return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, exceeding the 30-percentage-point trigger, and the negative 5-year return equally confirms sustained underperformance rather than a transient trough.
Dr. Swain joined the board in August 2022, which is more than 24 months before this meeting and means her tenure covers the bulk of the 3-year measurement window; NXRT's 3-year return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, triggering the underperformance threshold, and while it is noted that some underperformance predated her arrival, her tenure substantially overlaps the period so the trigger applies; the 5-year mitigant does not offset this given the equally poor long-term returns.
Ms. Wood has served on the board since July 2020, more than covering the full 3-year underperformance measurement period; NXRT's 3-year return of -29.6% trails the ^FNER (FTSE NAREIT All Equity REITs Index) by 43.1 percentage points, well above the 30-percentage-point trigger, and the 5-year return of -32.4% equally confirms sustained underperformance so the 5-year mitigant does not apply.
For Analysis
All seven director nominees trigger the TSR underperformance policy. NXRT's 3-year stock return of -29.6% falls 43.1 percentage points below the ^FNER (FTSE NAREIT All Equity REITs Index) return of +13.5%, far exceeding the 30-percentage-point threshold that applies when absolute 3-year TSR is negative. The 5-year return of -32.4% confirms sustained underperformance and does not provide the mitigating offset that would downgrade votes from AGAINST to FOR. Accordingly, the policy calls for AGAINST votes on all seven nominees.
Say on Pay
✗ AGAINSTCEO
James Dondero
Total Comp
N/A
Prior Support
94%%
The company's equity compensation program consists entirely of time-vesting stock awards with no performance conditions — meaning executives receive these awards regardless of whether shareholders make or lose money, which our policy treats as fixed pay dressed up as variable pay. NXRT's stock has lost nearly 30% over the past three years while the ^FNER (FTSE NAREIT All Equity REITs Index) gained 13.5%, yet the CEO received stock award grants valued at over $3.3 million in 2025 with no link to this underperformance. The compensation committee explicitly states it does not benchmark award levels, removing the normal external check on pay scale, and the absence of any performance conditions in the incentive plan means there is no mechanism to reduce executive pay when shareholders suffer losses.
Auditor Ratification
✓ FORAuditor
KPMG LLP
Tenure
N/A
Audit Fees
$1,195,000
Non-Audit Fees
$279,295
Non-audit fees (tax compliance and advisory services totaling $279,295) represent approximately 23.4% of audit fees ($1,195,000), well below the 50% threshold that would raise independence concerns; KPMG is a Big 4 firm appropriate for a $1.3 billion market-cap company; auditor tenure is not disclosed in the filing so the tenure trigger cannot fire per policy, and no material financial restatements are noted.
Overall Assessment
The 2026 NXRT annual meeting presents a challenging ballot for shareholders: the company's stock has lost nearly 30% over three years while the broad equity REIT benchmark (^FNER — FTSE NAREIT All Equity REITs Index) gained 13.5%, triggering AGAINST votes on all seven director nominees and on the say-on-pay proposal due to the absence of any performance-based conditions in the executive equity program. The auditor ratification of KPMG is the sole proposal that passes all policy screens and warrants a FOR vote.