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. Please refer to "Compensation Discussion and Analysis" for a more complete discussion on how executive compensation relates to performance and how the Committee makes its decisions. Below are the tables and related footnotes for PVP:



	Julian E. Whitehurst(2)		Stephen A. Horn, Jr.(3)		Average SCT Total for	Average CAP to	Value of Initial Fixed $100 Investment Base On:
Year	SCT Total for CEO $	CAP to CEO $	SCT Total for CEO $	CAP to CEO $	Non-CEO NEOs $	Non-CEO NEOs $	Company TSR $	Peer Group TSR(1) $	Net Income $	Core FFO per Share $
2023	-	-	7,194,654	6,320,139	2,308,351	2,101,005	122.12	118.03	392,340,000	3.26

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, 2023 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 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
Total Adjustments	4,107,491	(58,466)	(3,485,992)

(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	2023 $	2022 $
Amounts reported in “Stock Awards” column of SCT	(4,385,780)	(3,958,062)
Fair value of outstanding and unvested equity awards granted in the current year	3,718,014	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	(395,561)	784,246
Change in fair value for equity awards vested in the current year that were granted in a prior year	(47,083)	(10,370)
Addition for the common stock dividends paid on unvested stock awards	235,895	123,293
Total Adjustments	(874,515)	2,092,102

(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.


Adjustments	2023 $	2022 $	2021 $	2020 $
Amounts reported in “Stock Awards” column of SCT	(1,112,801)	(1,100,638)	(1,140,025)	(1,178,281)
Fair value of outstanding and unvested equity awards granted in the current year	973,724	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	(195,207)	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	11,248	(10,217)	18,156	(31,578)
Addition for the common stock dividends paid on unvested stock awards	115,690	61,301	140,539	140,930
Total Adjustments	(207,346)	1,080,042	90,949	(1,177,599)

(5)

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


2023	Messrs. Habicht, Tessitore and Adamo and Ms. Miller
2022	Messrs. Habicht and Tessitore, and Ms. Miller
2021	Messrs. Horn, Habicht and Tessitore, and Ms. Miller
2020	Messrs. Horn, Habicht, Tessitore and Bayer

Named Executive Officers, Footnote

(5)

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


2023	Messrs. Habicht, Tessitore and Adamo and Ms. Miller
2022	Messrs. Habicht and Tessitore, and Ms. Miller
2021	Messrs. Horn, Habicht and Tessitore, and Ms. Miller
2020	Messrs. Horn, Habicht, Tessitore and Bayer

Adjustment To PEO Compensation, Footnote

(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 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
Total Adjustments	4,107,491	(58,466)	(3,485,992)

(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	2023 $	2022 $
Amounts reported in “Stock Awards” column of SCT	(4,385,780)	(3,958,062)
Fair value of outstanding and unvested equity awards granted in the current year	3,718,014	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	(395,561)	784,246
Change in fair value for equity awards vested in the current year that were granted in a prior year	(47,083)	(10,370)
Addition for the common stock dividends paid on unvested stock awards	235,895	123,293
Total Adjustments	(874,515)	2,092,102

Non-PEO NEO Average Compensation Actually Paid Amount

$ 2,101,005

3,624,286

2,682,871

1,166,529

Compensation Actually Paid vs. Total Shareholder Return

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’ calculated CAP, while Core FFO per share has a lesser degree of impact on and correlation to the compensation actually paid figures. While our three-year TSR lagged behind the above reported peer group for 2020 and 2021, our resilience in 2022 and 2023 resulted in a cumulative three-year TSR on par for 2022 and moderately above for 2023 as compared to the reported peer group.