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For years, REITs and their operating partners have sought “alignment” in just about all they do together. Now, a REIT is actually doling out monetary incentives for not only its operators, but the actual workers in their communities.
The REIT, Welltower (NYSE: WELL), last October announced the Welltower Fellowship Grant. Through the grant – which is in the name of the late businessperson Charlie Munger, “a man who meant so much” to Welltower CEO Shankh Mitra and the company’s management team – the REIT will award frontline employees at the top-10 performing communities in its portfolio with shares from a pool worth $10 million.
Although REITs have long incentivized their operating partners with bonuses or higher management payouts for good performance, this is the first time I’ve seen a REIT attempt to bridge the gap between the incentives of ownership and the work of the people actually undertaking the work of senior living.
“It shows an appreciation for those who are carrying the baton every day to deliver the care and the services to that resident,” Welltower Executive Vice President and Head of Corporate Development John Olympitis told me. “Our operating partners do a phenomenal job at incentivizing their workforce … but to add this carrot on top of it, we think provides a greater incentive to work at a Welltower community.”
Among Welltower’s operating partners is StoryPoint, an operator that manages dozens of communities for the REIT. StoryPoint CEO Dan Hughes told me that the new incentive program is the first of its kind that he’s seen in senior living and said a stock award of that nature could be significant to employees. As such, he’s “laser-focused” on improving operational results at the company’s communities so that more employees can be eligible for the award.
“We want to make sure we put all of our people in the best position to take advantage of this opportunity, and that’s what we’re focused on right now,” Hughes told me.
Zooming out the lens, I think Welltower’s effort to reward frontline employees is notable given how often its executives talk about the need to incentivize better performance in their communities, and how hard that is to achieve that from a corporate office with limited reach into operations.
While a REIT is essentially just a tax structure on paper, senior living is an operational business that extends far beyond real estate. REITs and operators have sometimes struggled to find alignment on senior living operations, and I believe that is due to a lack of common incentives. By directly linking operational outcomes like resident and employee satisfaction with the REIT’s stock, Welltower is starting to bridge that gap.
In this members-only SHN+ Update, I analyze my recent interviews with Welltower and Storypoint executives and share the following takeaways:
- How the new grant program seeks to align ownership with frontline workers
- Inside Welltower’s Costco inspiration
- More on the future of owner-operator alignment
New grant directly aligns REIT, workers
At the heart of the new Welltower grant is a desire to better align a REIT with the people actually providing care in its communities. Publicly traded REITs like Welltower must at the end of the day be stewards to a share price, while operators must be stewards of their residents. But good resident care doesn’t always show up in a company’s stock price; and a high share value does not always signal good care.
For many years, the relationship between a REIT and an operator was largely transactional. REITs cannot directly operate their communities by law – without flexibilities from the federal government, anyway – and thus are somewhat limited in what they can do to directly affect community performance.
But that began to change with the rise of the RIDEA structure in the mid-2000s. REITs used the structure to take a more prominent role in community operations, and it became standard in the years that followed. Fast-forward to 2026, and the RIDEA structure is embraced not only by Welltower but substantially every senior housing REIT in the country as they seek to grow senior housing operating portfolios with partners that have “skin in the game.”
Welltower has continually tweaked its RIDEA structure – now on its sixth iteration – to align operations with its ownership goals in the last decade. The Fellowship Grant is yet another way to do that.
With the grant, Welltower is aiming to more closely align what it cares about with the cares of its operators. The REIT has set aside $10 million annually in stock to compensate front-line staff at the REIT’s top-10 performing communities. Welltower is grading its operating partners on two main KPIs: resident and employee satisfaction.
An employee who gets the grant must hold it for a year before selling it, therefore creating “a great incentive to not only work in a Welltower community, but stay,” Olympitis said.
Under the grant, an employee could get an award that doubles their compensation for the year. That’s a “life-changing” amount for a senior living worker, Hughes said. And the grant is the first of its kind for the industry, he added.
I recently caught up with Olympitis and Amanda Sweitzer, senior vice president of capital markets for Welltower. They told me the company has taken inspiration from the likes of Costco when thinking about ways to incentivize better performance in their communities, from better break rooms to now, the Fellowship Grant.
“A lot of it comes down to how Costco incentivizes and creates a culture for their frontline staff,” Sweitzer told me. “We very much look to leaders like Costco that have historically compounded financial results over time as a result of their employee satisfaction.”
Welltower is spinning up the grant against a backdrop of high demand but tight labor conditions. If the company and its partners hope to care for the millions of boomers aging into senior housing in the years to come, they will need the workers to do so.
“This industry is rife with employee turnover, and one of the best ways to improve resident satisfaction and patient care is to lower the turnover of employees to make sure that that resident is getting cared for by the same employee over a long period of time,” Sweitzer said. “It all ties together with how we’re thinking about improving the overall experience within our communities.”
With the grant, Welltower also is thinking about the industry’s next 5 to 10 years ahead.
“We have two end constituents, the residents and the employees. And there is an element of sales and retention and length of stay and length of service that is parallel to both,” Olympitis added.
Grant hints at future of senior living owner-operator alignment
I believe the new grant is significant in that, for the first time ever, it is bringing REITs and operators together under a shared incentive. By giving frontline employees shares, they are literally invested in the REIT’s financial performance. And by offering a grant payable to frontline workers, the REIT has a new tool to directly incentivize better operations.
In 2026, as the SHOP-ping spree continues among REITs, I believe more of them will look for more creative ways to incentivize performance among their partners. While REITs have a multitude of carrots (and sticks) to motivate their operating partners, I believe they have struggled to use those tools with the people actually providing care in senior living communities.
Welltower’s new grant could provide a roadmap for other REITs to similarly find ways to share success with people providing care on the front lines. Doing so could potentially aid the industry’s dire staffing forecast ahead as operators must hire scores of new workers in the years ahead.
Of course, all of this is dependent on a stock price that does not significantly fall. I can see a scenario where an employee gets a reward only to find it has depreciated somewhat since when they got it. With a share price of more than $183 as of the time of writing this article, Welltower’s stock is nearly at an all-time high. Still, I think that applies for any employee stock award. And at the end of the day I think the purpose of the grant itself eclipses any potential roadblocks ahead.
