Pay versus Performance

The SEC adopted new disclosure on August 25, 2022 for proxy statements filed with respect to fiscal years ending on or after December 16, 2022 with a new Pay Versus Performance ("PVP") rule. The rule requires a new table and narrative disclosure comparing Compensation Actually Paid ("CAP") against company performance. The Company is required to provide additional disclosure regarding the relationship between NEO CAP and net earnings, cumulative TSR and Core FFO. In addition, the Company must provide at least three, but not more than seven, of the most important company measures used to determine NEO pay. At least three of these measures must be financial measures. Below are the tables and related footnotes for PVP:



	Julian Whitehurst(2)		Stephen Horn(3)		Average SCT Total for		Value of Initial Fixed $100 Investment Base On:
Year	SCT Total for CEO	CAP to CEO (2)	SCT Total for CEO	CAP to CEO (3)	Non-CEO NEOs	Average CAP to Non-CEO NEOs	The Company TSR	Peer Group TSR(1)	Net Income	Core FFO per Share
2022	$5,010,993	$9,118,484	$6,776,699	$8,868,801	$2,544,244	$3,624,286	$99.13	$100.62	$334,626,000	$3.14

2021	$7,785,586	$7,727,120	-	-	$2,591,922	$2,682,871	$99.22	$134.06	$264,217,000	$2.86

2020	$5,594,166	$2,108,174	-	-	$2,344,128	$1,166,529	$80.65	$94.88	$210,859,000	$2.59

(1)

NNN’s peer group TSR is based on FNER, which is the index used for purposes of the performance graphs in Part II, Item 5 of the Company's Annual Report on Form 10-K for the year ended December 31, 2022 and the Compensation Discussion and Analysis.

(2)

The following represents the adjustments made to the SCT totals to derive the compensation actually paid to Mr. Whitehurst in his role as CEO. Mr. Whitehurst served as the CEO through the entire reporting period until his retirement on April 28, 2022.


Adjustments	2022	2021	2020
Amounts reported in “Stock Awards” column of SCT	($3,413,088)	($4,306,835)	($3,704,914)
Fair value of outstanding and unvested equity awards that were granted in the current year:	$4,994,125	$4,529,787	$2,617,686
Change in fair value for equity awards outstanding and unvested at the end of the current year that were granted in a prior year:	$2,639,640	($814,466)	($2,769,278)
Change in fair value for equity awards vested in the current year that were granted in a prior year:	($188,929)	$72,371	($9,880)
Addition for the common stock dividends paid on unvested stock awards:	$75,743	$460,677	$380,394

(3)

The following represents the adjustments made to the SCT total to derive the compensation actually paid to Mr. Horn in his role as CEO. Mr. Horn has served as the CEO since April 29, 2022.


Adjustments		2022
Amounts reported in “Stock Awards” column of SCT		($3,958,062)
Fair value of outstanding and unvested equity awards that were granted in the current year:		$5,152,995
Change in fair value for equity awards outstanding and unvested at the end of the current year that were granted in a prior year:		$784,246
Change in fair value for equity awards vested in the current year that were granted in a prior year:		($10,370)
Addition for the common stock dividends paid on unvested stock awards:		$123,293

(4)

The following represents the adjustments made to the SCT totals for our non-CEO named executive officers to derive the average compensation actually paid for our non-CEO named executive officers.


	2022	2021	2020
Amounts reported in “Stock Awards” column of SCT	($1,100,638)	($1,140,025)	($1,178,281)
Fair value of outstanding and unvested equity awards that were granted in the current year:	$1,511,141	$1,199,019	$740,821
Change in fair value for equity awards outstanding and unvested at the end of the current year that were granted in a prior year:	$618,455	($126,740)	($879,404)
Fair value of stock awards granted and vested in the current year	-	-	$29,913
Change in fair value for equity awards vested in the current year that were granted in a prior year:	($10,217)	$18,156	($31,578)
Addition for the common stock dividends paid on unvested stock awards:	$61,301	$140,539	$140,930

(5)

The named executive officers included in the non-CEO named executive average for each year are as follows:


2022		Messrs. Habicht and Tessitore, and Ms. Miller.
2021		Messrs. Horn, Habicht, and Tessitore, and Ms. Miller.
2022		Messrs. Horn, Habicht, Tessitore, and Bayer

Named Executive Officers, Footnote [Text Block]

(5)

The named executive officers included in the non-CEO named executive average for each year are as follows:


2022		Messrs. Habicht and Tessitore, and Ms. Miller.
2021		Messrs. Horn, Habicht, and Tessitore, and Ms. Miller.
2022		Messrs. Horn, Habicht, Tessitore, and Bayer

Adjustment To PEO Compensation, Footnote [Text Block]

(2)

The following represents the adjustments made to the SCT totals to derive the compensation actually paid to Mr. Whitehurst in his role as CEO. Mr. Whitehurst served as the CEO through the entire reporting period until his retirement on April 28, 2022.


Adjustments	2022	2021	2020
Amounts reported in “Stock Awards” column of SCT	($3,413,088)	($4,306,835)	($3,704,914)
Fair value of outstanding and unvested equity awards that were granted in the current year:	$4,994,125	$4,529,787	$2,617,686
Change in fair value for equity awards outstanding and unvested at the end of the current year that were granted in a prior year:	$2,639,640	($814,466)	($2,769,278)
Change in fair value for equity awards vested in the current year that were granted in a prior year:	($188,929)	$72,371	($9,880)
Addition for the common stock dividends paid on unvested stock awards:	$75,743	$460,677	$380,394

(3)

The following represents the adjustments made to the SCT total to derive the compensation actually paid to Mr. Horn in his role as CEO. Mr. Horn has served as the CEO since April 29, 2022.


Adjustments		2022
Amounts reported in “Stock Awards” column of SCT		($3,958,062)
Fair value of outstanding and unvested equity awards that were granted in the current year:		$5,152,995
Change in fair value for equity awards outstanding and unvested at the end of the current year that were granted in a prior year:		$784,246
Change in fair value for equity awards vested in the current year that were granted in a prior year:		($10,370)
Addition for the common stock dividends paid on unvested stock awards:		$123,293

Non-PEO NEO Average Compensation Actually Paid Amount

$ 3,624,286

2,682,871

1,166,529

Compensation Actually Paid vs. Total Shareholder Return [Text Block]

The reported amount of compensation actually paid to our CEO, and the reported average amount of compensation actually paid to our non-CEO executive officers, is primarily driven by the value of our executives’ unvested equity. Further, as discussed in the Compensation Discussion and Analysis, our TSR is a component metric in our long-term incentive plan, and Core FFO per share is a component metric of our cash incentive bonus. As a result, the TSR figures reported above have a strong correlation to our executives’ compensation actually paid, while Core FFO per share has a lesser degree of impact on and correlation to the compensation actually paid figures. While our TSR lagged behind the above reported peer group TSR for 2020 and 2021, our resilience in 2022 resulted in a cumulative 2022 three-year TSR on par with the reported peer group.