Edgar Filing: EQUITY RESIDENTIAL

Definitive Proxy Statement

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EQUITY RESIDENTIAL

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LOGO

NOTICE OF 2010 ANNUAL MEETING OF SHAREHOLDERS

Dear Shareholder:

You are cordially invited to attend Equity Residential’s 2010 Annual Meeting of Shareholders. This year’s meeting will be held on Wednesday, June 16, 2010, at 1:00 p.m., at Two North Riverside Plaza, Suite 2400, Chicago, Illinois, at which time shareholders of record at the close of business on March 31, 2010, will be asked to:

(1)

elect trustees to a one-year term;

(2)

ratify our selection of Ernst & Young LLP as our independent auditor for 2010;

(3)

vote on a shareholder proposal relating to a change in the voting standard for trustee elections; and

(4)

consider any other business properly brought before the meeting.

Again this year, we are pleased to take advantage of the Securities and Exchange Commission rule allowing companies to furnish proxy materials to their shareholders on the Internet. This e-proxy process allows us to provide our shareholders with the information they need, while lowering the delivery costs and reducing the environmental impact of our Annual Meeting.

Your vote is very important. Whether or not you attend the meeting in person, I urge you to vote as soon as possible. Instructions on how to vote are contained in the Proxy Statement.

Thank you for your continued support of Equity Residential.

Sincerely,

LOGO

Yasmina Duwe

Senior Vice President, Associate General Counsel

and Secretary

Two North Riverside Plaza

Chicago, Illinois 60606

April 15, 2010

TABLE OF CONTENTS


		Page

About the Annual Meeting		1

Contacting the Board or Lead Trustee		4

Shareholder Proposals for the 2011 Annual Meeting		4

2009 Annual Report		4

Governance of the Company		5

Proposal 1 -	Election of Trustees	11

Proposal 2 -	Ratification of Selection of Independent Auditor	16

Proposal 3 -	Shareholder Proposal Relating to a Change in the Voting Standard for Trustee Elections	17

Common Share Ownership of Trustees and Executive Officers		21

Common Share Ownership of Principal Shareholders		22

Compensation Discussion and Analysis		23

Compensation Risks		30

Compensation Committee Report		30

Executive Compensation		31

Trustee Compensation		41

Audit Committee Report		43

Certain Relationships and Related Transactions		44

Other Matters		44

EQUITY RESIDENTIAL

Two North Riverside Plaza

Chicago, Illinois 60606

PROXY STATEMENT

This Proxy Statement contains information related to the Annual Meeting of Shareholders of Equity Residential (“Equity Residential” or the “Company”), which will be held on Wednesday, June 16, 2010, at 1:00 p.m., at Two North Riverside Plaza, Suite 2400, Chicago, Illinois.

ABOUT THE ANNUAL MEETING

What is the Purpose of the Annual Meeting?

At the Annual Meeting, shareholders will vote on the following proposals:

•

Proposal 1 – the election of trustees to a one-year term;

•

Proposal 2 – the ratification of the Company’s selection of Ernst & Young LLP (“Ernst & Young”) as its independent auditor for the fiscal year ending December 31, 2010; and

•

Proposal 3 – a shareholder proposal relating to a change in the voting standard for trustee elections.

You have received these proxy materials because our Board of Trustees (the “Board”) is soliciting your proxy to vote your common shares at the Annual Meeting. This Proxy Statement includes information that we are required to provide you under the rules of the Securities and Exchange Commission (“SEC”).

The Company has hired MacKenzie Partners, Inc. to assist in distributing and soliciting proxies and will pay approximately $9,500, plus expenses for these services. We will, upon request, reimburse brokers, banks and other nominees for their reasonable expenses in sending proxy materials to their principals and obtaining their proxies. We also expect that some of our employees may solicit our common shareholders personally and by telephone. None of these employees will receive any additional or special compensation for doing this.

Important Change: Unlike previous years, brokers, banks and other holders of record holding shares beneficially owned by their clients will no longer have the ability to cast votes with respect to the election of trustees unless they have received instructions from the beneficial owner of the shares. If your shares are held by a broker, bank or other holder of record, it is important that you provide instructions to them so your vote is counted.

Why did I receive a notice in the mail regarding Internet availability of proxy materials instead of a full set of proxy materials?

Pursuant to the SEC’s notice and access rules adopted in 2007, we have elected to provide access to our proxy materials over the Internet. Accordingly, on or about April 15, 2010, we began mailing to all shareholders of record at the close of business on March 31, 2010, a Notice of Internet Availability of Proxy Materials (the “Notice”). All shareholders will have the ability to access the proxy materials on the website referred to in the Notice or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request printed copies are included in the Notice. In addition, shareholders, at no charge, may request to receive proxy materials in printed form by mail or electronically by email.

How can I get electronic access to the proxy materials?

The Notice will provide you with instructions regarding how to:

•

View our proxy materials for the Annual Meeting on the Internet; and

•

Instruct us to send our future proxy materials to you electronically by email.

Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.

Who is entitled to vote?

You will be entitled to vote your shares on each proposal if you held your shares as of the close of business on March 31, 2010 (the “Record Date”). Each of the shares outstanding on that date is entitled to one vote on each proposal. As of the Record Date, a total of 282,404,498 common shares were outstanding and entitled to vote.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

If your shares are registered directly in your name with the Company’s transfer agent, Computershare, Inc., you are the “shareholder of record” of those shares. A Notice of Internet Availability of Proxy Materials with instructions on how to vote your shares has been provided directly to you by the Company.

If your shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner” of those shares. A Notice of Internet Availability of Proxy Materials with instructions on how to direct the vote of your shares has been forwarded to you by your broker, bank or other holder of record. As the beneficial owner, you have the right to direct your broker, bank or other holder of record how to vote your shares by using the voting instruction card or by following their instructions for voting by telephone or on the Internet.

What happens if I do not provide instructions to my broker, bank or other holder of record on how to vote the shares that I own beneficially?

Unlike previous years, brokers, banks and other holders of record holding shares beneficially owned by their clients will no longer have the ability to cast votes with respect to the election of trustees unless they have received instructions from the beneficial owner of the shares. Accordingly, if you do not

instruct your bank, broker or other holder of record on how to vote in the election of the trustees (Proposal 1), no votes will be cast on your behalf. Your bank, broker or other holder of record will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent auditor (Proposal 2). They will not have discretion to vote uninstructed shares on the shareholder proposal (Proposal 3).

For more information, see the SEC Investor Alert issued in February 2010, “New Shareholder Voting Rules for the 2010 Proxy Season” at http://www.sec.gov/investor/alerts/votingrules2010.htm.

What is required to hold the meeting?

The presence at the meeting in person or by proxy of the holders of a majority of the common shares outstanding on the Record Date will constitute a quorum permitting business to be conducted at the meeting. If you have returned valid proxy instructions (in writing, by phone or over the Internet) or attend the meeting and vote in person, your shares will be counted for purposes of determining whether there is a quorum, even if you abstain from voting on any or all matters introduced at the meeting.

How do I vote?

Shareholders may vote in person at the Annual Meeting or by proxy. Shareholders have a choice of voting over the Internet by following the instructions provided in the Notice, or if you request printed copies of the proxy materials, you can also vote by using a toll-free telephone number or completing a proxy card and mailing it in the postage-paid envelope provided. Please refer to your Notice or proxy card or the information forwarded by your bank, broker or other nominee to see which options are available to you. If you vote over the Internet or by telephone, you do NOT need to return your proxy card. If you vote by proxy, the individuals named on the proxy card as representatives will vote your shares in the manner you indicate. You may specify whether your shares should be voted for all, some or none of the nominees for trustee and whether your shares should be voted for or against the other proposals.

What are the Board’s recommendations?

If no instructions are indicated on your valid proxy, the representatives holding proxies will vote in accordance with the recommendations of the Board. The Board recommends a vote:

•

Proposal 1: FOR the election of each of the nominees for trustee;

•

Proposal 2: FOR the ratification of the selection of Ernst & Young as the Company’s independent auditor for 2010;

•

Proposal 3: AGAINST a shareholder proposal relating to a change in the voting standard for trustee elections.

With respect to any other matter that properly comes before the meeting or any adjournment or postponement thereof, the representatives holding proxies will vote as recommended by the Board, or if no recommendation is given, in their own discretion.

Can I revoke or change my proxy?

Yes, you may change or revoke your proxy at any time before the meeting by timely delivery of a properly executed, later-dated proxy (including an Internet or phone vote) or by voting in person at the Annual Meeting. The powers of the proxy holders with respect to your shares will be suspended if you attend the meeting in person and so request, but attendance at the meeting will not by itself revoke a previously granted proxy.

How can I manage the number of Annual Reports I receive?

The SEC’s rules permit us to deliver a single Notice or set of Annual Meeting materials to one address shared by two or more of our shareholders. This delivery method is referred to as “householding” and can result in significant cost savings. To take advantage of this opportunity, we have delivered only one Notice to multiple shareholders who share an address, unless we received contrary instructions from the impacted shareholders prior to the mailing date. We agree to deliver promptly, upon written or oral request, a separate copy of the Notice or Annual Meeting materials, as requested, to any shareholder at the shared address to which a single copy of those documents was delivered. If you prefer to receive separate copies of the proxy statement or annual report, contact Broadridge Financial Solutions, Inc. at 1-800-542-1061 or in writing at Broadridge, Householding Department, 51 Mercedes Way, Edgewood, New York 11717.

If you are currently a shareholder sharing an address with another shareholder and wish to receive only one copy of future Notices or Annual Meeting materials for your household, please contact Broadridge at the above phone number or address.

How do I learn the results of the vote?

Voting results of the Annual Meeting will be disclosed on a Form 8-K filed with the SEC within four business days after the Annual Meeting, which will be accessible on the Company’s website at www.equityresidential.com under Investor Information – SEC Filings.

CONTACTING THE BOARD OR LEAD TRUSTEE

The Board welcomes your questions and comments. If you would like to communicate with our Board or our Lead Trustee, or if you have a concern related to the Company’s business ethics or conduct, financial statements, accounting practices or internal controls, you may submit your correspondence to Equity Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: Secretary. All communications will be forwarded to our Lead Trustee.

SHAREHOLDER PROPOSALS FOR THE 2011 ANNUAL MEETING

To be considered for inclusion in next year’s proxy statement, shareholder proposals must be received at our principal executive offices no earlier than the close of business on November 16, 2010 and no later than the close of business on December 16, 2010. Proposals should be mailed to Equity Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: Secretary. Such proposals must also include the same information concerning proposals for shareholder nominees as required under Article II, Section 13 of the Bylaws of the Company. See “Shareholder Nominees” below.

2009 ANNUAL REPORT

Additional copies of our 2010 Proxy Statement, 2009 Annual Report and Form 10-K for the year ended December 31, 2009, as filed with the SEC, may be obtained without charge by contacting Equity Residential – Investor Relations, at Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606 (toll free number: 1-888-879-6356; e-mail: investorrelations@eqrworld.com).

GOVERNANCE OF THE COMPANY

Board of Trustees

Our business and affairs are managed under the direction of the Board of Trustees, which currently consists of eleven members. Members of the Board are kept informed of the Company’s business through discussions with the Chairman, the Chief Executive Officer and other officers, by reviewing materials provided to them and by participating in meetings of the Board and its committees. Board members have complete access to the Company’s management team and our independent auditor.

The Board and each of the key committees – Audit, Compensation and Corporate Governance – also have authority to retain, at the Company’s expense, outside counsel, consultants or other advisors in the performance of their duties. The Company’s Guidelines on Governance require that a majority of the trustees be independent within the meaning of the NYSE listing standards.

Current charters for the Audit, Compensation and Corporate Governance Committees and the Company’s Guidelines on Governance and Code of Ethics and Business Conduct may be viewed on the Company’s website at www.equityresidential.com under Investor Information – Corporate Governance. In addition, the Company will mail copies of the Committee charters, the Guidelines on Governance and the Code of Ethics and Business Conduct to shareholders upon written request to Equity Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: Secretary or by contacting Investor Relations by phone (1-888-879-6356) or e-mail (investorrelations@eqrworld.com).

Corporate Governance

The Company is dedicated to establishing and maintaining the highest standards of corporate governance. The Board has implemented many corporate governance measures over the years designed to serve the interests of our shareholders and further align the interests of trustees and management with those of our shareholders.

Board Leadership Structure. Since the formation of the Company in 1993, we have separated the roles of Chairman of the Board and Chief Executive Officer of Equity Residential. Our Chairman of the Board, Mr. Zell, founded the Company in the 1960s and has served as Chairman since our initial public offering in August 1993 and is uniquely qualified to serve in this role. Mr. Zell is recognized as one of the leading founders of today’s public real estate industry after creating three of the largest real estate investment trusts (“REITs”) in history in each of their respective sectors. As our Chairman, he presides over meetings of the full Board of Trustees, stewards the Company, counsels senior management regarding strategy and provides them with a network of resources across the industry. Mr. Neithercut, our CEO, sets the strategic direction for the Company under the direction of the Board, is responsible for the day-to-day leadership and performance of the Company and sets the agenda for Board meetings in consultation with the Chairman and our Lead Trustee.

We recognize that different board leadership structures may be appropriate for companies in different situations and believe that no one structure is suitable for all companies. We believe the Company is well-served by our current leadership structure.

Lead Trustee. Charles L. Atwood was appointed Lead Trustee in March 2009, replacing Sheli Z. Rosenberg who had served in this role since December 2002. In his capacity as Lead Trustee, Mr. Atwood, who is an independent trustee, coordinates with the other independent trustees, consults with the Chairman and CEO on Board agendas, presides over the executive sessions of the independent trustees and performs such other functions as the Board may direct.

Executive Sessions. Pursuant to the Company’s Guidelines on Governance, the non-management trustees of the Board meet in regularly scheduled executive sessions without management. The independent trustees also meet in executive session at least once a year. The Lead Trustee chairs these sessions. The non-management trustees held four executive sessions in 2009 and the independent trustees held one executive session in 2009.

The Board’s Role in Risk Oversight. The Board as a whole has responsibility for oversight of risk management. The Board delegates the review of certain areas of risk to committees of the Board based on their respective principal areas of focus as summarized below. Each of these committees reports on its deliberations to the full Board. The Board also regularly reviews information from senior management regarding areas of risk designed to provide visibility about the identification, assessment and management of critical risks and management’s risk mitigation strategies. These areas of focus include strategic, competitive, economic, operational, financial (accounting, credit, liquidity and tax), legal, regulatory, compliance and reputational risks and other current matters that may present material risk to the Company. The Company also performs an annual risk survey, led by the Company’s senior internal audit officer, who interviews each of the Company’s executive officers and surveys other officers of the Company and reports these results to the Audit Committee. This survey assesses risk throughout the business, focusing on the primary areas of operational, financial, legal and compliance risks.

The Company’s Compensation Committee is responsible for overseeing the management of risks relating to the Company’s leadership assessment, management succession planning and compensation philosophy, programs and arrangements, including incentive compensation plans. The Audit Committee oversees management of risks associated with financial matters, particularly financial reporting, counterparty risk, tax, accounting, disclosure, internal control over financial reporting, financial policies and cash investment guidelines and credit and liquidity matters, as well as potential conflicts of interest. As part of its charter, the Audit Committee discusses the Company’s policies with respect to risk assessment and risk management. The Audit Committee also meets in separate executive sessions with key management personnel, representatives of the Company’s independent auditor and the Company’s senior internal audit officer. The Corporate Governance Committee manages risks associated with corporate governance and compliance and trustee succession planning. While each committee is responsible for evaluating certain risks and direct oversight of the management of such risks, as mentioned above, the entire Board of Trustees is informed about and oversees such risks.

Assessment of Board Performance and Board Processes. The trustees, through the Corporate Governance Committee, annually assess the performance of the full Board, individual Board members (including a self-assessment) and Board committees to determine whether the current board leadership structure continues to be optimal for the Company and takes the assessments into account in making its recommendations to the Board regarding trustee nominees.

Code of Ethics and Business Conduct. The Company has adopted a Code of Ethics and Business Conduct that applies to all trustees, the Company’s Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer and all other officers and employees. The purpose of the Code of Ethics and Business Conduct is to promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; to promote full, fair, accurate, timely and understandable disclosure in periodic reports required to be filed by the Company; and to promote compliance with all applicable rules and regulations that apply to the Company and its officers, employees and trustees. The Audit Committee has responsibility for reviewing the Company’s policies relating to the avoidance of conflicts of interests and reviewing any proposed related party transactions. For further discussion of related party transactions, see “Certain Relationships and Related Transactions.”

Succession Planning. In the event the Chairman of the Board or the CEO is unable to serve, (i) the Lead Trustee shall automatically be appointed to serve as the interim Chairman, (ii) the Chairman shall automatically be appointed to serve as the interim CEO and (iii) the Chair of the Compensation

Committee of the Board will promptly call a meeting of the Committee to initiate the process for the selection of a permanent replacement for either or both positions, as necessary.

Trustee Resignation Policy. The Board’s Guidelines on Governance include a resignation policy for any trustee nominee who receives a greater number of votes “withheld” from, than votes “for,” his or her election (a “majority withheld vote”). Although trustees will continue to be elected by a plurality vote standard, this resignation policy requires that in any uncontested election, any trustee nominee who receives a majority withheld vote must promptly tender his or her resignation to the Board. The Board would then decide within 90 days following certification of the shareholder vote, through a process managed by the Corporate Governance Committee and excluding the nominee in question, whether to accept or reject the tendered resignation, or whether other action is recommended. The Board would promptly disclose its decision and rationale in a Form 8-K furnished to the SEC.

Share Ownership Guidelines. In keeping with its belief that aligning the financial interests of senior officers and trustees of the Company with those of the shareholders will result in enhanced shareholder value, the Board has established ownership guidelines for the senior officers and trustees of the Company. These guidelines provide that within three years of joining the Company or a promotion, the following officers should own shares equal to the following respective multiple of their annual base salary: Chief Executive Officer – 5x; Executive Vice Presidents – 3x; and Senior Vice Presidents – 1x. All trustees are expected to own, within three years of joining the Board, at least $250,000 in Company shares or limited partnership interests (“OP Units”) in ERP Operating Limited Partnership (the “Operating Partnership”), of which the Company is the general partner. OP Units are exchangeable on a one-for-one basis into the Company’s common shares. We recognize, of course, that many officers and trustees will have much larger ownership stakes in the Company and view this as desirable.

Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a) of the Exchange Act requires our trustees, executive officers and beneficial owners of more than 10% of the Company’s outstanding common shares to file reports of ownership and changes in ownership with the SEC. We believe that no such person failed to file any such report or to report any transaction on a timely basis during 2009, other than an inadvertent late report reflecting the purchase of 50 shares by Ian Kaufman, the Chief Accounting Officer of the Company.

Meetings and Committees of the Board of Trustees

Meetings. During 2009, the Board held eight meetings, with an average attendance of 96%. No trustee has attended fewer than 75% of the total number of meetings held by the Board and all committees of the Board on which such trustee served. Eight trustees attended the 2009 Annual Meeting of Shareholders. Board members are expected to attend all meetings of the Board and committees of which they are members, as further described in the Company’s Guidelines on Governance. The Board has standing Audit, Compensation and Corporate Governance Committees, which are comprised entirely of trustees who are independent within the meaning of the NYSE listing standards. The Company also has an Executive Committee and a Pricing Committee.

Audit Committee. The current members of the Audit Committee are John E. Neal (Chair), Charles L. Atwood and Mark S. Shapiro (who was appointed to the Audit Committee in January 2010). B. Joseph White served on the Audit Committee until January 2010. The Audit Committee is comprised entirely of trustees who meet the independence and financial literacy requirements of the NYSE listing standards. In addition, the Board has determined that both Mr. Neal and Mr. Atwood qualify as “audit committee financial experts” as defined by SEC rules. During 2009, the Audit Committee was comprised of Mr. Neal (Chair since March 2009), Mr. Atwood (Chair from January 2009 through March 2009), Mr. White and Stephen O. Evans (who served on the Audit Committee until his departure from the Board in June 2009). The Audit Committee’s responsibilities include providing assistance to the Board in fulfilling its responsibilities with respect to oversight of the integrity of the Company’s financial statements, compliance with legal and regulatory requirements, the independent auditor’s qualifications,

performance and independence and the performance of the Company’s internal audit function. The Company’s senior internal audit officer reports to the Audit Committee. In accordance with its charter, the Audit Committee has sole authority to appoint and replace the independent auditor, which reports directly to the Committee; approve the engagement fees of the independent auditor; and pre-approve the audit services and any permitted non-audit services provided to the Company. In addition, the Audit Committee reviews the scope of audits as well as the annual audit plan, evaluates matters relating to the audit and internal controls of the Company and reviews and approves all material related party transactions. The Audit Committee holds separate executive sessions, outside the presence of senior management, with the Company’s independent auditor and the Company’s senior internal audit officer. During 2009, no member of the Audit Committee served on more than two other public company audit committees. The Audit Committee held thirteen meetings in 2009, with an average attendance of 90%.

Compensation Committee. The current members of the Compensation Committee are John W. Alexander (Chair), Linda Walker Bynoe, Boone A. Knox, Sheli Z. Rosenberg and B. Joseph White (who was appointed to the Compensation Committee in January 2010). During 2009, the Compensation Committee was comprised of Mr. Alexander (Chair), Ms. Bynoe (who was appointed to the Compensation Committee in December 2009), Mr. Knox, Ms. Rosenberg and Desiree Rogers (who served on the Compensation Committee until she resigned from the Board in January 2009). The Compensation Committee is comprised entirely of trustees who meet the independence requirements of the NYSE listing standards, and no member of the Committee is a past or present officer or employee of the Company. The Compensation Committee’s responsibilities include establishing the Company’s general compensation philosophy, overseeing the Company’s compensation programs and practices, including incentive and equity-based compensation plans, reviewing and approving executive compensation plans in light of corporate goals and objectives, evaluating the performance of the CEO in light of these criteria and recommending the CEO’s compensation level based on such evaluation, evaluating the performance of the other executive officers before approving their salaries, bonus and incentive and equity compensation, reviewing and making recommendations concerning proposals by management regarding compensation, bonuses, employment agreements, loans to non-executive employees and other benefits and policies regarding such matters for employees of the Company and overseeing the Company’s executive succession and management development plans. The Compensation Committee held five meetings in 2009, with 100% attendance.

Corporate Governance Committee. The current members of the Corporate Governance Committee are B. Joseph White (Chair), John W. Alexander, Charles L. Atwood and Sheli Z. Rosenberg. During 2009, the Corporate Governance Committee was comprised of Mr. White (Chair since June 2009), Mr. Alexander, Mr. Atwood (who was appointed to the Corporate Governance Committee in March 2009), Ms. Rosenberg, Stephen O. Evans (Chair from January 2009 until his departure from the Board in June 2009) and Desiree Rogers (who served on the Corporate Governance Committee until her resignation from the Board in January 2009). The Corporate Governance Committee’s duties include establishing criteria for recommending candidates for election or reelection to the Board and its committees, considering issues and making recommendations concerning the size, composition, organization and effectiveness of the Board, establishing and overseeing procedures for annual assessment of Board and trustee performance, evaluating issues of corporate governance and making recommendations to the Board regarding the Company’s governance policies and practices, including its Guidelines on Governance and Code of Ethics and Business Conduct. The Corporate Governance Committee identifies individuals qualified to become Board members and will also consider nominees for trustee suggested by shareholders in written submissions to the Company’s Secretary as further described in “Trustee Nomination Procedures” below. The Corporate Governance Committee held six meetings in 2009, with 100% attendance.

Executive Committee. The current members of the Executive Committee are Samuel Zell (Chair), David J. Neithercut, Charles L. Atwood (who was appointed to the Executive Committee in March 2010), Boone A. Knox and John E. Neal. During 2009, the Executive Committee was comprised of Mr. Zell (Chair), Mr. Neithercut, Mr. Knox, Mr. Neal (who was appointed to the Executive Committee in March

2009) and Stephen O. Evans (who served on the Executive Committee until his departure from the Board in June 2009). The Executive Committee has the authority within certain parameters to approve proposals to acquire, develop, dispose of and finance investments for the Company. The Executive Committee held four meetings in 2009, with 94% attendance.

Pricing Committee. The current members of the Pricing Committee are Samuel Zell and David J. Neithercut. The Pricing Committee has the authority within certain parameters to approve the offering, issuance, redemption and repurchase of the Company’s and the Operating Partnership’s securities. The Pricing Committee held five meetings in 2009, with 100% attendance.

Trustee Nomination Procedures

Trustee Qualifications and Diversity. The Company’s Guidelines on Governance set forth the Board’s policies for the desired attributes of trustees and the Board as a whole. The Board will seek to ensure that a substantial majority of its members are independent within the NYSE listing standards. Each member of the Board must possess the individual qualities of integrity and accountability, informed judgment, financial literacy, high performance standards and must be committed to representing the long-term interests of the Company and the shareholders. The Board values diversity, in its broadest sense, reflecting, but not limited to, profession, geography, gender, ethnicity, skills and experience, and believes that, as a group, the nominees bring a diverse range of perspectives to the Board’s deliberations. The Guidelines on Governance include a policy that trustees retire at the age of 72, to which the Board may make exceptions for trustees who continue to be qualified to serve on the Board. In connection with the nomination for election of trustees in Proposal 1, the Board approved an exception to the retirement age policy for Mr. Knox in view of his many years of commitment to outstanding service on the Board and its committees and his willingness to engage and challenge management and other board members.

Identifying and Evaluating Nominees. The Corporate Governance Committee regularly assesses the appropriate number of trustees comprising the Board, and whether any vacancies on the Board are expected due to retirement or otherwise. The Corporate Governance Committee may consider those factors it deems appropriate in evaluating trustee candidates including judgment, skill, diversity, strength of character, experience with businesses and organizations comparable in size or scope to the Company, experience and skill relative to other Board members, and specialized knowledge or experience. The Corporate Governance Committee considers suggestions of potential trustee candidates made by current Board members, shareholders, professional search firms or other persons.

The Corporate Governance Committee Chair and all other members of the Corporate Governance Committee (which Committee includes the Lead Trustee), and the Chief Executive Officer (on a non-voting basis), interview potential candidates that the Corporate Governance Committee has deemed qualified and appropriate. If the Committee determines that a potential candidate meets the needs of the Board, has the qualifications and meets the independence standards required by the NYSE as set forth in the Company’s Guidelines on Governance, it will recommend the nomination of the candidate to the Board.

Shareholder Nominees. The Corporate Governance Committee will consider properly submitted shareholder nominees for election to the Board and will apply the same evaluation criteria in considering such nominees as it would to persons nominated under any other circumstance. A shareholder of the Company who is a shareholder of record both at the time of giving notice (as described in this paragraph) and at the time of the annual meeting, and who is entitled to vote at such meeting, may nominate individuals for election to the Company’s Board of Trustees if the shareholder complies with the following requirements. First, the shareholder must give the Secretary of the Company timely written notice of nomination. Generally, notice will be timely if it is delivered not earlier than the close of business on the 150th day, nor later than the close of business on the 120th day, prior to the first anniversary of the date of the proxy statement for the preceding year’s annual meeting. Accordingly, for

the Company’s annual meeting in the year 2011, the Secretary must receive the notice after the close of business on November 16, 2010, and prior to the close of business on December 16, 2010. The notice must set forth as to each individual the shareholder proposes to nominate (i) the name, age, business address and residence address of the individual, (ii) the class, series and number of any shares of beneficial interest of the Company owned of record or beneficially by the individual, (iii) the date such shares were acquired and the investment intent of the acquisition and any short interest in the shares, including information related to hedging activities and investment strategies, (iv) all other information relating to the individual required to be disclosed as if it were a solicitation of proxies for a contested election of trustees or otherwise required by law and regulations, and (v) the individual’s written consent to be named in the proxy statement as a nominee and to serving as a trustee if elected. Moreover, the shareholder giving such notice must also include the class, series and number of all shares of the Company owned both of record and beneficially by such shareholder, distinguishing each, and, to the extent known by the shareholder giving notice, the name and address of any other shareholder supporting the nominee for election. The foregoing is a summary of Article II, Section 13 of the Bylaws of the Company and is qualified in its entirety by the text of that Section. A copy of such Section of the Bylaws may be obtained at no cost by writing to Equity Residential, Two North Riverside Plaza, Suite 400, Chicago, Illinois 60606, Attn: Secretary.

Biographical Information of Executive Officers

Set forth below are biographies of each of our executive officers as of April 1, 2010.

David J. Neithercut, 54, Chief Executive Officer, President and a Trustee of the Company. See biographical information of trustees in Proposal 1 below.

Alan W. George, 52, has been Executive Vice President and Chief Investment Officer of the Company since January 2002. Mr. George was Executive Vice President – Acquisitions/Dispositions from February 1997 to January 2002. Mr. George serves on the Executive Committee of the National Multifamily Housing Council and is also a member of the Urban Land Institute and the National Association of Home Builders.

Mark J. Parrell, 43, has been Executive Vice President and Chief Financial Officer of the Company since October 2007. Mr. Parrell was Senior Vice President and Treasurer of the Company from August 2005 to October 2007, and was First Vice President – Capital Markets of the Company from February 2003 to July 2005.

John Powers, 62, has been Executive Vice President – Human Resources since December 2005. Mr. Powers was Senior Vice President – Human Resources from October 2000 to December 2005.

David S. Santee, 51, has been Executive Vice President – Operations of the Company since January 2007. Mr. Santee served as the Company’s Executive Vice President – Eastern Division from November 1996 to December 2006.

Bruce C. Strohm, 55, has been Executive Vice President and General Counsel of the Company since March 1995 and was Secretary of the Company from November 1995 to December 2006.

Mark N. Tennison, 49, has been Executive Vice President – Development of the Company since March 2004. Mr. Tennison was Senior Vice President and Chief Operating Officer of Pritzker Residential, a private multifamily investment and operating company, from October 1997 through March 2003.

Frederick C. Tuomi, 55, has been President – Property Management of the Company since March 2005. Mr. Tuomi has been Executive Vice President of the Company since January 1994 and served as President – Western Division from April 1999 to March 2005.

PROPOSAL 1

ELECTION OF TRUSTEES

Introduction

At the Annual Meeting, shareholders will be asked to elect ten trustees to serve until the 2011 annual meeting and until their respective successors are duly elected and qualified. Following the recommendation of the Corporate Governance Committee, the Company’s Board of Trustees has nominated John W. Alexander, Charles L. Atwood, Linda Walker Bynoe, Boone A. Knox, John E. Neal, David J. Neithercut, Mark S. Shapiro, Gerald A. Spector, B. Joseph White and Samuel Zell for election. Sheli Z. Rosenberg, a current Trustee, is retiring from the Board at the end of her term and is not standing for re-election to the Board at the 2010 Annual Meeting of Shareholders. As a result of Ms. Rosenberg’s decision not to stand for re-election, the size of the Board will be reduced to ten members. The process undertaken by the Corporate Governance Committee in recommending qualified trustee candidates is described above under “Governance of the Company – Trustee Nomination Procedures.”

Independence of Trustees

Pursuant to the Company’s Guidelines on Governance, which require that a majority of our trustees be independent within the meaning of the NYSE listing standards, the Board undertook a review of the independence of Trustees nominated for election at the upcoming annual meeting. The Board reviews the relationships and transactions, if any, during the past year between each trustee or any member of his or her immediate family as necessary to comply with the definition of independence established by the NYSE. During the period covered by this Proxy Statement, for each trustee identified as independent below, there were no transactions, relationships or arrangements not disclosed pursuant to Item 404(a) of Regulation S-K of the type that would need to be considered in connection with determining the independence of such trustees under the applicable NYSE definition of independence. As a result of this review, the Board affirmatively determined that all the Trustees nominated for election at the Annual Meeting are independent of the Company and its management within the meaning of the NYSE listing standards, with the exception of its Chairman, Mr. Zell; its Vice Chairman, Mr. Spector, the Company’s former Chief Operating Officer and Executive Vice President who retired in December 2007; and its Chief Executive Officer and President, Mr. Neithercut.

General Information about the Trustees and Nominees

Our Declaration of Trust currently provides for the annual election of all trustees. All the nominees are presently trustees, and each has consented to be named in this Proxy Statement and to serve if elected.

Biographical Information and Qualifications of Incumbent Trustees

Our trustees bring to the Company’s Board a wealth of leadership experience derived from their service as senior executives and, in some cases, leaders of complex organizations, and have the collective experience that meets the Company’s strategic objectives and contributes to the Board’s effectiveness as a whole. They also all bring extensive public board and committee experience and have an understanding of corporate governance practices and trends. The process undertaken by the Corporate Governance Committee in recommending qualified trustee candidates is described above under “Governance of the Company – Trustee Nomination Procedures.” In addition to the above, the Board also considered the specific experience, individual qualifications and skills described in the biographical details that follow in determining to nominate the individuals set forth below for election as trustees.

Set forth below are biographies of each of our trustees as of April 1, 2010.

Incumbent Trustee Retiring

Sheli Z. Rosenberg, 68, is retiring after serving as a Trustee of the Company since March 1993. Ms. Rosenberg is the co-founder and former President of Northwestern University’s Center for Executive Women at the Kellogg School of Management and has been an Adjunct Professor since 2003. Ms. Rosenberg is a director of Equity LifeStyle Properties, Inc., Ventas, Inc., CVS/Caremark Corporation, and Nanosphere, Inc. Ms. Rosenberg was previously a trustee of Equity Office Properties Trust until its sale in 2007, a director of Avis Budget until 2008 and of Cendant Corporation until 2006, when Cendant distributed its real estate and hospitality services business and changed its name to Avis Budget. Ms. Rosenberg holds a J.D. from Northwestern University School of Law and practiced law for over 30 years.

Ms. Rosenberg has leadership capability and extensive knowledge of complex financial and operational issues facing large organizations. Her depth and breadth of exposure to complex issues facing large organizations through her service as a board member of a variety of public companies in disparate businesses, as well as her legal background, have made her a skilled advisor and contributor to the Company’s Board.

Incumbent Trustees Nominated for Re-Election

John W. Alexander, 63, has been a Trustee of the Company since May 1993. He has been President of Mallard Creek Capital Partners, Inc., an investment company with interests in real estate, development entities and operating companies since 1994. He also has been a partner of Meringoff Equities, a real estate investment company, since 1987 and previously served as its Chief Financial Officer and as a managing director. He had earlier careers at Citibank and Toronto-based Cadillac Fairview, which was North America’s largest public real estate company at that time. He served on the board of directors of Jacor Communications, Inc., a media corporation and one of the largest owners of radio stations in the U.S., before it was acquired by Clear Channel Communications in May 1999.

Mr. Alexander’s qualifications to serve on our Board of Trustees include his many years of experience in the real estate industry, including extensive real estate development, operational and financial expertise and his prior board experience. He also has a great depth of knowledge of the Company’s business and strategy.

Charles L. Atwood, 61, has been a Trustee of the Company since July 2003 and Lead Trustee since March 2009. Mr. Atwood served as Vice Chairman of the Board of Directors of Harrah’s Entertainment, Inc., a private gaming and hospitality company, until retiring from Harrah’s in December 2008. Mr. Atwood had been Vice Chairman of Harrah’s public predecessor company until its sale in January 2008, a member of its Board since 2005, its Chief Financial Officer from 2001 to 2006, and had been with Harrah’s and its predecessors since 1979. Mr. Atwood received his M.B.A. in finance from Tulane University.

In these various positions, Mr. Atwood gained expertise in core management skills, such as strategic and financial planning, public company financial reporting and compliance and risk management, overseeing these matters at a large, global organization. Mr. Atwood’s positions also provided him a wealth of knowledge in dealing with complex financial and business issues, making him a skilled advisor. His board experience also gives him a deep understanding of the role of boards of directors and positions him well to serve as our Lead Trustee. His experience also qualifies him to serve on the Audit Committee as an “audit committee financial expert,” as defined by the SEC.

Linda Walker Bynoe, 57, has been a Trustee of the Company since December 2009. Ms. Bynoe has been President and Chief Executive Officer of Telemat Ltd., a management consulting firm, since 1995 and served as its Chief Operating Officer from 1989 through 1994. Ms. Bynoe served as a Vice President – Capital Markets for Morgan Stanley from 1985 to 1989, joining the firm in 1978. Ms.

Bynoe serves as a director of Anixter International, Inc., Northern Trust Corporation, Prudential Retail Mutual Funds and Simon Property Group, Inc. Ms. Bynoe received her M.B.A. from Harvard University.

Ms. Bynoe has diverse consulting and investment experience and expertise in accounting, corporate governance and strategic development. She also has many years of experience as a director of financial services and other complex companies, including REITs, which make her well-suited to serve on the Company’s Board.

Boone A. Knox, 73, has been a Trustee of the Company since the merger of Merry Land & Investment Company, Inc. (“Merry Land”), of which he served as Chairman, into the Company in October 1998. Mr. Knox is the Managing Partner of Knox, Ltd. and the Managing Trustee of the Knox Foundation. Mr. Knox had been a director of Merry Land Properties, Inc. from the time of its formation as part of the Merry Land merger until February 2001. He had been Chairman of the Board of Directors of Merry Land from December 1996 until the Merry Land merger. Mr. Knox also served as Chairman of the Board of Directors of Regions Bank of Central Georgia from January 1997 through 2006. Mr. Knox is currently a director of Cousins Properties, Incorporated. He also serves on a variety of private boards and has had tremendous success in various fundraising campaigns for charitable and other non-profit organizations.

Mr. Knox was the former Chairman of Merry Land, a multifamily REIT, prior to its merger with the Company as described above. He has extensive business and leadership experience in the role as a director of REITs, other real estate operating companies, and in the banking industry. His depth of real estate and banking experience and his unique insight offer the Company’s Board a keen perspective of the priorities and challenges facing our industry.

John E. Neal, 60, has been a Trustee of the Company since July 2006. Mr. Neal is a partner of Linden LLC, a private equity firm. Mr. Neal has over 30 years of experience in executive positions in the financial services and banking industries with a primary focus on real estate finance. He led Bank One Corporation’s real estate lending and corporate banking businesses until the company was merged with JP Morgan Chase & Co. in July 2004. Prior to joining Bank One, Mr. Neal led the real estate lending businesses at Kemper Financial Services and Continental Bank. He serves as a trustee of the Calamos Mutual Funds and also serves on the boards of private companies in a wide array of industries. He received an M.B.A. from Harvard University.

Mr. Neal’s extensive knowledge and experience in leading real estate lending businesses, as well as his board experience, make him qualified to serve on the Company’s Board. His experience also qualifies him to serve on the Audit Committee as an “audit committee financial expert.”

David J. Neithercut, 54, has been a Trustee and Chief Executive Officer of the Company since January 2006 and President of the Company since May 2005. He was Executive Vice President – Corporate Strategy of the Company from January 2004 to May 2005, and Executive Vice President and Chief Financial Officer of the Company from February 1995 to August 2004. Prior to joining Equity Residential, Mr. Neithercut served as Senior Vice President of Finance for the predecessor company to Equity Group Investments, L.L.C., an owner, manager and financier of real estate and corporations. He served as a director of Wellsford Real Properties Inc. from January 2004 until April 2005. He serves on the Board of Governors and Executive Committee of NAREIT, as well as the Executive Committee of the National Multifamily Housing Council. Mr. Neithercut is also a member of the Urban Land Institute. Mr. Neithercut holds an M.B.A. from the Columbia University Graduate School of Business.

As our CEO and in his prior roles at the Company, Mr. Neithercut is uniquely qualified to serve on the Company’s Board and brings a wealth of experience, including demonstrated management ability at a series of progressively more responsible positions at the Company, and a business understanding in running our large public company that provides him with critical insight into the Company’s operations and perspective in developing and overseeing the Company’s vision and strategic objectives.

Mark S. Shapiro, 40, has been a Trustee of the Board since January 2010. Mr. Shapiro has been the Chief Executive Officer and a director of Six Flags, Inc., the world’s largest regional theme park company, since December 2005. Six Flags, Inc. filed a voluntary petition to restructure its debt obligations under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11”) on June 13, 2009. Prior to joining Six Flags, Inc., Mr. Shapiro spent 12 years at ESPN, Inc., where he served as Executive Vice President, Programming and Production and in various other capacities. At ESPN, he had significant responsibility in building the strength of the network’s brand and garnered numerous Emmy and Peabody awards during his tenure. Mr. Shapiro also currently serves as a director of Live Nation, Inc. and the Tribune Company, a private media conglomerate. The Tribune Company filed a voluntary petition to restructure its debt obligations under Chapter 11 on December 8, 2008.

As CEO of a large complex organization where he has worked to refocus and re-energize the Six Flags brand and the company’s strategy, coupled with his board service, Mr. Shapiro brings not only business acumen and front-line exposure to many of the issues and challenges facing public companies, but also a drive for innovation and critical insight in the areas of marketing and branding, making him a unique and valuable contributor to the Company’s Board.

Gerald A. Spector, 63, has been a Trustee of the Board since March 1993 and Vice Chairman of the Board since January 2008. Mr. Spector currently serves as Executive Vice President and Chief Operating Officer of the Tribune Company since December 2009, and served as its Chief Administration Officer in 2008. Mr. Spector was Executive Vice President of the Company from March 1993 and Chief Operating Officer of the Company from February 1995 until his retirement in December 2007. He began his real estate career in the early 1970s and has extensive prior public and private board experience as well. Mr. Spector is a Certified Public Accountant.

As the Company’s former Chief Operating Officer and a senior leader of the Company since its inception, Mr. Spector had significant management, strategic and operational responsibilities during his tenure and during the growth of the Company. His knowledge of all aspects of the business and its history, combined with his drive for operational excellence, position him well to serve on the Company’s Board.

B. Joseph White, 62, has been a Trustee of the Company since May 1993. Mr. White is President Emeritus of the University of Illinois and James F. Towey Professor of Business and Leadership in the College of Business at the University’s Urbana-Champaign campus. Mr. White served as President of the University of Illinois, a $4.5 billion enterprise with multiple locations and 25,000 employees, from February 2005 to December 2009, and in January 2010 was appointed President Emeritus. Mr. White was a professor at the University of Michigan Business School from 1987 through 2004, served as the Dean of the Business School from 1991 to 2001 and as Interim President of the University of Michigan in 2002. His executive experience has included serving as vice president for management development, personnel and public affairs of Cummins, Inc., a global manufacturing company. Mr. White is a director of Kelly Services, Inc. He previously served as a director of Kaydon Corporation and has served as a director of numerous non-profit boards. Mr. White received his M.B.A., with distinction, from Harvard Business School and a doctorate in Business Administration from the University of Michigan.

Three domains of experience have prepared Mr. White to serve on the Company’s Board: academic, executive and governance. His academic specialties have included leadership and management, human resource management, organizational change and corporate governance, each germane to the business and board oversight of the Company. His executive experiences contribute to his understanding of the Company’s business, its multiple functions and the leadership and management challenges it faces. His governance experiences that included both public and private board service enable him to understand and perform the duties on the Compsany’s Board.

Samuel Zell, 68, has been Chairman of the Board of the Company since March 1993. Mr. Zell is chairman of Equity Group Investments, L.LC., the private entrepreneurial investment firm he founded more than 40 years ago. He is also co-founder and chairman of Equity International, a private investment firm focused on real estate-related companies outside the U.S., including three publicly-held portfolio companies listed on the NYSE: Gafisa in Brazil; Xinyuan in China; and Homex in Mexico; and a fourth, BR Malls, Brazil’s largest retail property owner and operator, listed on the Bovespa exchange. Currently, he also serves as chairman of Anixter International, Inc., Capital Trust, Covanta Holding Corporation and Equity LifeStyle Properties, Inc. Previously, Mr. Zell served as chairman of Equity Office Properties Trust, which was sold in February 2007 to The Blackstone Group for $39 billion in the largest ever private equity transaction at the time. Mr. Zell is also the chairman of the Tribune Company and was its Chief Executive Officer from December 2007 to December 2009.

Mr. Zell serves on the JPMorgan National Advisory Board, the President’s Advisory Board at the University of Michigan, the Visitor’s Committee at the University of Michigan Law School, and with the combined efforts of the University of Michigan Business School, established the Zell/Lurie Entrepreneurial Center. He was appointed a DeRoy Visiting Professor in Honors at the College of Literature, Science and the Arts at the University of Michigan. Mr. Zell holds a J.D. from the University of Michigan.

Mr. Zell oversees billions of dollars in investments under the philosophy of active ownership. His investments, as well as his leadership and governance experience, span continents and industries, including finance, energy, transportation, communications, and real estate. He has a strong track record of stewarding companies to maximize their potential. This experience, including Mr. Zell’s service as a director on public company boards for more than 30 years, and in the role of chairman for more than 25 years, makes him superbly qualified to serve on the Company’s Board.

Vote Required

A plurality of the votes cast in person or by proxy at the meeting is required for the election of trustees. This means that the ten nominees who receive the most votes will be elected. Abstentions will have no effect on the outcome of the election of trustees. Although we know of no reason why any nominee would not be able to serve, if any nominee should become unavailable for election, the persons named as proxies will vote your common shares to approve the election of any substitute nominee proposed by the Board. Although trustees are elected by a plurality of the votes cast, any nominee for trustee who receives a greater number of votes “withheld” from his or her election than votes “for” his or her election will be required under the terms of our Guidelines on Governance to tender his or her resignation for the consideration of the Board. See “Corporate Governance – Trustee Resignation Policy” above.

Board Recommendations

The Board recommends that you vote “FOR” each of the ten nominees for a one-year term.

PROPOSAL 2

RATIFICATION OF SELECTION OF INDEPENDENT AUDITOR

The Audit Committee has selected Ernst & Young as the independent auditor to perform the audit of our financial statements and our internal control over financial reporting for 2010. The Board recommends that the shareholders ratify the Company’s selection of Ernst & Young as our independent auditor. Although shareholder action on this matter is not required, the Board believes it is good corporate practice to seek shareholder ratification of its selection. If the selection is not ratified, the Audit Committee will consider whether it is appropriate (without obligation) to select another public accounting firm. Representatives of Ernst & Young are expected to be available at the Annual Meeting. These representatives will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions.

Fees

Fees billed to the Company by Ernst & Young for the years ended December 31, 2009 and 2008 were as follows:


Type of Fees:	2009		2008		% Change
Audit fees ⁽¹⁾	$	1,486,933	$	1,491,400	(0.3%)
Audit-related fees ⁽²⁾		23,995		22,500	6.6%

Subtotal:		1,510,928		1,513,900	(0.2%)

Tax compliance/preparation fees ⁽³⁾		172,400		369,550	(53.3%)
Tax consulting fees ⁽⁴⁾		25,000		217,476	(88.5%)

Subtotal:		197,400		587,026	(66.4%)

All other fees		—		—	—

Total Fees:	$	1,708,328	$	2,100,926	(18.7%)

(1)

Audit fees are primarily incurred for the review and audit of the Company’s and the Operating Partnership’s annual financial statements and internal control over financial reporting included in their respective Annual Reports on Form 10-K, the review of the Company’s and the Operating Partnership’s interim financial statements included in their respective Quarterly Reports on Form 10-Q, and for consents related to SEC registration statements, comfort letters related to public offerings of registered securities and assistance in responding to SEC comment letters. Audit fees include $510,000 in both 2009 and 2008 related to the Company’s and the Operating Partnership’s Sarbanes-Oxley audits of internal control over financial reporting.

(2)	Fees for audit-related services primarily include services associated with legally required employee benefit plan audits and subscriptions to online accounting and tax information services.

(3)	Tax compliance and preparation fees are primarily incurred for the review or preparation of tax returns for the Company, the Operating Partnership and numerous subsidiaries, claims for refunds and tax payment compliance.

(4)	Tax consulting fees relate primarily to tax planning advice incident to acquisitions, dispositions, developments, financings, depreciable basis on real estate and taxable REIT subsidiaries.

Pre-Approval Policy

The Company’s Audit Committee has reviewed and approved the Company’s engagement of Ernst & Young as its independent auditor, and the incurrence of all of the fees described above, for 2009 and 2008 and has selected Ernst & Young as independent auditor for 2010, subject to review and approval of the final terms of its engagement as such and its audit fees. The Audit Committee has also adopted a Pre-Approval Policy for Audit and Non-Audit Services (the “Pre-Approval Policy”) for all other services Ernst & Young may perform for the Company in 2010. The Pre-Approval Policy details with specificity the audit and permitted non-audit services that are authorized within each of the above-described categories of services and provides for aggregate maximum dollar amounts for such pre-approved services. Any additional services not described or otherwise exceeding the maximum dollar amounts prescribed by the Pre-Approval Policy for 2010 will require the further advance review and approval of the Audit Committee. The Audit Committee has delegated the authority to grant any such additional required approval to its Chair between meetings of the Committee, provided that the Chair reports the details of the exercise of any such delegated authority at the next meeting of the Committee.

Vote Required

The affirmative vote of holders of a majority of the votes cast in person or by proxy at the meeting is required to ratify the selection of Ernst & Young. Abstentions will have no effect on the outcome of the vote. If Proposal 2 does not pass, the selection of the independent auditor will be reconsidered by the Audit Committee and the Board. Because it is difficult and not cost effective to make any change in the independent auditor so far into the year, the appointment of Ernst & Young would probably be continued for 2010 unless the Audit Committee or the Board finds additional good reasons for making an immediate change.

Board Recommendation

The Board recommends that you vote “FOR” the ratification of the selection of Ernst & Young as the Company’s independent auditor for 2010.

PROPOSAL 3

SHAREHOLDER PROPOSAL RELATING TO A CHANGE IN THE

VOTING STANDARD FOR TRUSTEE ELECTIONS

We have set forth below a shareholder proposal submitted on behalf of the United Brotherhood of Carpenters Pension Fund, 101 Constitution Avenue, N.W., Washington, D.C. 20001 (the “shareholder proponent”), beneficial owner of 4,193 of the Company’s common shares, along with the supporting statement of the shareholder proponent. The shareholder proposal is required to be voted upon at the annual meeting only if properly presented at the annual meeting by or on behalf of the shareholder proponent. As explained below, the Board recommends that you vote “AGAINST” the shareholder proposal.

Director Election Majority Vote Standard Proposal

Resolved: That the shareholders of Equity Residential (“Company”) hereby request that the Board of Directors initiate the appropriate process to amend the Company’s governance documents (charter or bylaws) to provide that director nominees shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders, with a plurality vote standard retained for contested director elections, that is, when the number of director nominees exceeds the number of board seats.

Supporting Statement: In order to provide shareholders a meaningful role in director elections, Equity Residential’s director election vote standard should be changed to a majority vote standard. A majority vote standard would require that a nominee receive a majority of the votes cast in order to be elected. The standard is particularly well-suited for the vast majority of director elections in which only board nominated candidates are on the ballot. We believe that a majority vote standard in board elections would establish a challenging vote standard for board nominees and improve the performance of individual directors and entire boards. The Company presently uses a plurality vote standard in all director elections. Under the plurality vote standard, a nominee for the board can be elected with as little as a single affirmative vote, even if a substantial majority of the votes cast are “withheld” from the nominee.

In response to strong shareholder support for a majority vote standard in director elections, a strong majority of the nation’s leading companies, including Intel, General Electric, Motorola, Hewlett-Packard, Morgan Stanley, Wal-Mart, Home Depot, Gannett, Marathon Oil, and Safeway have adopted a majority vote standard in company bylaws or articles of incorporation. Additionally, these companies have adopted director resignation policies in their bylaws or corporate governance policies to address post-election issues related to the status of director nominees that fail to win election. However, the Company has responded only partially to the call for change, simply adopting a post-election director resignation policy that sets procedures for addressing the status of director nominees that receive more “withhold” votes than “for” votes. The plurality vote standard remains in place despite a strong shareholder vote in support of majority voting at last year’s annual meeting.

We believe that a post-election director resignation policy without a majority vote standard in Company bylaws or articles is an inadequate reform. The critical first step in establishing a meaningful majority vote policy is the adoption of a majority vote standard. A majority vote standard combined with a post-election director resignation policy would establish a meaningful right for shareholders to elect directors, and reserve for the Board an important post-election role in determining the continued status of an unelected director. We feel that this combination of the majority vote standard with a post-election policy represents a true majority vote standard.

BOARD STATEMENT OPPOSING SHAREHOLDER PROPOSAL

After careful consideration, your Board and its Corporate Governance Committee, consisting entirely of independent trustees, believe that the above-described shareholder proposal to change the voting standard for our trustees is not in the best interests of the Company and its shareholders. Accordingly, the Board recommends a vote “AGAINST” adoption of this shareholder proposal for the following reasons.

Opposing Statement: Currently, our trustees are elected by a plurality standard in accordance with Maryland law and our Bylaws, meaning the nominees who receive the most affirmative votes are elected. Although the shareholder proponent states that under the plurality standard, a nominee can be elected with as little as a single affirmative vote, as a practical matter, the Company’s trustees have consistently received broad shareholder support, on average well over ninety percent of the votes cast. In other words, the proposal would have had no effect whatsoever on the outcome of any Board election to date. In no instance has plurality voting prevented our shareholders from either electing the trustees they wanted to elect or otherwise expressing their dissatisfaction with any particular trustee or the Board as a whole.

The Board is cognizant of recent developments with respect to majority voting in the election of directors generally and believes that adherence to sound corporate governance policies and practices is important to ensure the Company is governed and managed to high standards of responsibility, ethics and integrity. The Company also believes that shareholders should have a meaningful role in the trustee election process. In response to these developments, the Board adopted a policy in 2007 (the “Trustee

Resignation Policy”) that gives real meaning to a majority “withheld” vote, while avoiding the unintended consequences inherent in majority voting under current Maryland law.

The Trustee Resignation Policy provides that in an uncontested election, any Trustee nominee who receives a greater number of votes “withheld” from than votes “for” his or her election must promptly tender his or her resignation to the Board. The Board would then decide within 90 days following certification of the shareholder vote, through a process managed by the Corporate Governance Committee and excluding the nominee in question, whether to accept or reject the tendered resignation, or whether other action is recommended. The Board would promptly disclose its decision and rationale in a Form 8-K furnished to the SEC. The full Trustee Resignation Policy is set forth in the Company’s Guidelines on Governance, available in the Investor Information section of our website at www.equityresidential.com.

Not only does the Board believe that the Trustee Resignation Policy gives the shareholders a meaningful voice in the trustee election process, it also is concerned that the majority vote standard suggested by the proponent, while simple in concept, raises complications in practice that could result in unintended consequences.

First, the Board is concerned that the majority vote requirement sought by the proposal could result in undue influence of certain activist shareholders whose interests and agenda may differ from those of our shareholders generally and who may use their votes to forward their own particular agenda. In the current challenging times, the trustees may need to take actions that are in the best interests of the Company, but which may be unpopular with special interests or activist groups with short-term agendas, and which could lead to “withhold” vote campaigns against qualified trustees, as well as potential distractions to the Board’s oversight of the Company’s business and affairs. Such “withhold” campaigns could result in board vacancies jeopardizing the Company’s ability to comply with the trustee independence requirements of the SEC and the New York Stock Exchange, or a destabilization of the Board through the loss of seasoned individuals or those with the expertise necessary to satisfy other SEC requirements and NYSE listing standards (for example, our Chairman, CEO, or audit committee financial expert).

Second, plurality voting, which the shareholder proposal seeks to replace, was developed many years ago as a reform to eliminate the possibility of “failed elections,” where no nominee or slate of nominees was able to achieve a majority vote. Plurality voting is currently the default standard under Maryland law. Under a majority vote standard, in the event some but not all nominees receive a majority vote, Maryland law is not clear whether the nominees who did not receive the requisite vote would “hold over,” which could result in a “failed election” and the board vacancies discussed above.

Finally, the Board has demonstrated that it is committed to strong corporate governance and is accountable to the shareholders, as evidenced by its prior actions, including the declassification of the Board to provide for the annual election of trustees, eliminating a potential anti-takeover defense in its Declaration of Trust and, most recently, adopting guidelines that give shareholders a more meaningful role in electing trustees. Our shareholders have been highly successful in electing responsible, well regarded trustees who have protected the best interests of the Company’s shareholders.

The Board will continue to monitor the majority vote issue, but believes that, at this time, the Trustee Resignation Policy is the most appropriate way to address the primary concerns raised by the proposal, without the many drawbacks of majority voting. For all these reasons, the Board believes it would not be in the best interests of our shareholders to change the method by which trustees are elected at this time.

Vote Required

The affirmative vote of a majority of all the votes cast in person or by proxy at the meeting is necessary to approve this proposal. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of the vote, although they will count towards the presence of a quorum. Shareholder approval of this proposal would not result in a change to our Bylaws because this is only a recommendation to the Board.

Board Recommendation

The Board recommends that you vote “AGAINST” the adoption of this shareholder proposal.

COMMON SHARE OWNERSHIP OF TRUSTEES AND EXECUTIVE OFFICERS

The following table sets forth information, as of March 15, 2010, with respect to the beneficial ownership of the Company’s common shares by each trustee, its named executive officers, and the trustees and all executive officers as a group. Unless otherwise indicated, each person has sole voting and investment power over the common shares listed. On March 15, 2010, a total of 296,175,829 common share equivalents were outstanding (comprised of common shares, OP Units and LTIP Units). OP Units are exchangeable on a one-for-one basis into the Company’s common shares. LTIP Units are convertible on a one-for-one basis into OP Units subject to certain vesting and other tax requirements, as discussed in “Compensation Discussion and Analysis” below.


	Common Shares/ OP and LTIP Units (1)		Options Exercisable in 60 Days		Percent of Common Shares (1)		Percent of Common Shares/ OP and LTIP Units (1)
Named Executive Officers
David J. Neithercut	463,636		914,126		*		*
Alan W. George	186,820		468,305		*		*
Frederick C. Tuomi	198,809		404,943		*		*
Mark J. Parrell	38,955		25,132		*		*
David S. Santee	63,662		93,214		*		*

Trustees
Samuel Zell	9,139,658	⁽²⁾	2,195,577		3.92	%	3.80	%
David J. Neithercut (see above)	—		—		—		—
John W. Alexander	94,321		63,775		*		*
Charles L. Atwood	29,563		31,443		*		*
Linda Walker Bynoe	1,715		—		*		*
Boone A. Knox	3,461,266		36,937		1.24	%	1.18	%
John E. Neal	21,481		15,288		*		*
Sheli Z. Rosenberg	332,296		56,937		*		*
Mark S. Shapiro	1,576		—		*		*
Gerald A. Spector	380,082	⁽³⁾	898,527	⁽³⁾	*		*
B. Joseph White	60,299		41,937		*		*

Trustees and Executive Officers as a Group (18 persons)	14,746,109		5,637,092		6.96	%	6.75	%

*	Less than 1%.

(1)

Includes the following number of common shares and OP Units over which the executive officer or trustee disclaims beneficial interest (except to the extent of any pecuniary interest therein): Mr. Neithercut (42,518 common shares), Mr. Knox (3,405,290 common shares), Ms. Rosenberg (66,023 common shares) and Mr. Spector (74,540 common shares).

(2)

Includes 29,094 common shares beneficially owned by a trust of which Mr. Zell is the sole trustee and beneficiary and, as such, may be deemed the beneficial owner. Also includes 600 common shares beneficially owned by a trust of which Mr. Zell’s spouse is the trustee and of which Mr. Zell disclaims beneficial ownership, except to the extent of his pecuniary interest therein. Also includes 1,206,968 common shares beneficially owned by an entity managed or controlled by Mr. Zell and of which Mr. Zell does not have voting or dispositive power over and disclaims beneficial ownership, except to the extent of his pecuniary interest therein. Also includes 3,738 common shares beneficially owned by trusts for the benefit of Mr. Zell and his family, all of which Mr. Zell does not have voting or dispositive power over, but of which he may be deemed the beneficial owner. Also includes 136,747 common shares beneficially owned by a family foundation of which Mr. Zell is a director and in which Mr. Zell does not have a pecuniary interest therein. Also includes 4,863,502 OP Units, 4,462,828 of which Mr. Zell does not have voting or dispositive power over and disclaims beneficial ownership, except to the extent of his pecuniary interest therein. Of the common shares and OP Units shown, 6,448,166 were pledged as security for a loan.

(3)	Includes 25,015 common shares and 276,697 options beneficially owned by a family trust, of which Mr. Spector is the sole trustee and, as such, may be deemed the beneficial owner thereof. Of the common shares shown, 160,454 were pledged as security for a loan.

COMMON SHARE OWNERSHIP OF PRINCIPAL SHAREHOLDERS

This table sets forth information with respect to persons who are known to beneficially own more than 5% of the Company’s 279,959,048 outstanding common shares as of December 31, 2009.


Name and Address of Owner	Common Shares	Percent of Common Shares

The Vanguard Group, Inc. ⁽¹⁾ 100 Vanguard Blvd. Malvern, PA 19355	23,190,754	8.3	%

BlackRock, Inc. ⁽²⁾ 40 East 52nd Street New York, NY 10022	22,307,052	8.0	%

Morgan Stanley ⁽³⁾ 1585 Broadway New York, NY 10036	18,296,569	6.5	%

(1)	The Schedule 13-G/A filed by The Vanguard Group, Inc. on February 3, 2010, states that as of December 31, 2009, it has sole power to vote 439,148 shares, sole power to dispose of 22,797,906 shares and shared power to dispose of 392,848 shares.

(2)	The Schedule 13-G filed by BlackRock, Inc. on January 29, 2010, states that as of December 31, 2009, it has sole power to vote 22,307,052 shares and has the sole power to dispose of 22,307,052 shares.

(3)

The Schedule 13-G filed by Morgan Stanley on February 12, 2010, states that as of December 31, 2009, it has sole power to vote 15,226,506 shares and sole power to dispose of 18,296,569 shares. Such schedule shows that Morgan Stanley’s wholly-owned subsidiary, Morgan Stanley Investment Management Inc., an investment adviser, has sole power to vote 12,980,567 shares and sole power to dispose of 16,043,417 shares.

COMPENSATION DISCUSSION AND ANALYSIS

Compensation Philosophy

The goal of the Company’s executive compensation program is to retain and reward executives who create long-term value for our shareholders. Our compensation program rewards financial and operating performance and leadership excellence, aligns the executives’ long-term interests with those of our shareholders and motivates executives to remain at the Company for years.

Elements of Total Compensation

The Company takes a “total compensation” approach to executive compensation, meaning that each element of direct compensation is considered both separately and in terms of the total amount paid to an executive. An executive’s direct compensation consists of three elements: a fixed annual salary; short-term incentives in the form of a discretionary annual cash bonus; and discretionary annual long-term incentive compensation, which consists of Share Awards and Option Awards (see definitions under “Long-Term Compensation Awards”) that vest over time. Other forms of compensation, including change in control/post-employment payments, if any, are discussed in the Compensation Tables.

Annual Salary

Annual salaries of executive officers are set at levels competitive with other companies engaged in the real estate industry and with other businesses of comparable size and scope with which we compete for executive talent. The Compensation Committee sets the compensation philosophy and reviews base salaries for the executive officers annually and makes adjustments, if any, to reflect market conditions, changes in responsibilities and potential merit increases consistent with compensation practices throughout our organization. As in 2009, none of the named executive officers received a salary increase for 2010.

Cash Bonus

The second element of direct compensation is an annual cash bonus which is meant to reward achievement of current-year objectives, as well as the long-term success of the Company and encourage the retention of key executives by providing competitive current cash compensation and opportunities for superior pay for superior performance. The target cash bonus, as a percentage of annual salary, is 150% for Mr. Neithercut and 100% for the other named executives. The cash bonus an executive officer actually receives may be greater or less than the target.

Long-Term Incentive Compensation

The third element of direct compensation is long-term incentive compensation consisting of Share Awards and Option Awards. The Company believes that equity ownership by our executive officers is the best and most direct way to align their interests with those of our shareholders. As a result, each executive officer’s total annual compensation package includes a significant portion of Share Awards and Option Awards. Vesting requirements also encourage the retention of the executive officers. The larger the executive’s total compensation, the larger the percentage long-term incentive compensation will represent of his or her total annual compensation. The target long-term compensation award as a percentage of target cash compensation (annual salary plus target cash bonus) is 150% for Mr. Neithercut and 100% for the other named executives. The long-term incentive compensation award an executive officer actually receives may be greater or less than the target.

Assessment of Company and Individual Performance

A series of performance measures form the basis of annual performance assessments of the Company, Mr. Neithercut and each of the executive officers. At the beginning of each year, Mr. Neithercut and the other named executive officers develop corporate and business unit goals, as well as individual goals for that year. Once approved by Mr. Neithercut, the goals are presented to the Compensation Committee for consideration and acceptance, along with a series of metrics to assess Company and executive performance towards the goals. Certain performance goals and objectives are meant to deliver current-year results, while others move the Company forward over a longer period. Some of these goals and objectives are measured quantitatively, while others are assessed subjectively.

For 2009, the following categories of performance goals and relative weightings were approved:


Name	Weight of Each Component
Name	Corporate	Business Unit	Individual
Mr. Neithercut	50%	25%	25%
Mr. George	25%	65%	10%
Mr. Tuomi	25%	65%	10%
Mr. Parrell	25%	65%	10%
Mr. Santee	25%	65%	10%

At regular meetings during 2009, Mr. Neithercut updated the Compensation Committee on the progress on the corporate, business unit and individual goals. At the end of the year, Mr. Neithercut presented the Compensation Committee with an assessment of the performance on corporate, business unit goals and objectives, with both objective metrics and subjective reviews.

Individual performance reviews of Mr. Neithercut’s direct reports were conducted by Mr. Neithercut in consultation with the Compensation Committee by assessing the shared corporate, relevant business unit and individual goals. The Compensation Committee approved Mr. Neithercut’s recommendations for bonus and long-term compensation awards for the other executive officers, and then submitted them to the Board for ratification by the independent trustees.

The Compensation Committee made its own assessment of Mr. Neithercut’s performance, in consultation with independent members of the Board, considering Company and executive achievement of the 2009 corporate, business unit and individual goals. Based on its assessment, the Compensation Committee submitted its recommendation regarding Mr. Neithercut’s bonus and long-term compensation award to the independent trustees of the Board for their approval.

A detailed description of the performance against the Company’s goals is included in “Evaluation of Company Performance in 2009” and performance against the individual goals is included in “Compensation for the Chief Executive Officer in 2009” and “Compensation for the Other Named Executives in 2009”.

Evaluation of Company Performance in 2009

The primary factors considered by the Compensation Committee and the Board in determining 2009 compensation for the named executive officers were:

•

Total Shareholder Return. The Company’s stated goal is to achieve a Total Shareholder Return that would place it as No. 1 or No. 2 among an agreed upon peer group of five other large public multi-family REITs. While the Company’s Total Shareholder Return for 2009 (obtained from Bloomberg) was a positive 20.8%, it placed No. 6 among the peer group. However, the Company placed No. 2 with its annualized 24-month return of 2.0% and No. 1 with its annualized 36-month return of -7.9%. The peer group consisted of Apartment Investment & Management Company, AvalonBay

Communities, Inc., BRE Properties, Inc., Camden Property Trust and UDR, Inc. These are the Company’s largest competitors with diversified apartment portfolios located in many of the Company’s core markets.

•

Funds from Operations (“FFO”) and Dividend Growth. The Company provided original guidance for 2009 FFO of $2.00–$2.30 per share, reflecting an expected decline over 2008 actual results of 6.1% at the low end of the range and expected growth of 8.0% at the high end of the range. Guidance was later revised to $2.18-$2.22 per share. In the fourth quarter of 2009, the Company took advantage of cash on hand to repurchase and retire $344.3 million in notes (referred to in “Balance Sheet and Liquidity Management” below). The resulting one-time charge of $0.09 per share reduced 2009 FFO from $2.21 per share before the one-time charge to $2.12 per share. In 2009, dividends totaled $1.64 per share, compared to $1.93 in 2008 and $1.87 in 2007. The Company reduced its quarterly common share dividend, beginning with the dividend for the third quarter of 2009, as a result of reductions in cash flow from ongoing operations and to position the Company to take advantage of future investment opportunities.

•

Balance Sheet and Liquidity Management. As in 2008, the Company’s balance sheet and liquidity management was a significant accomplishment in 2009. The Company began 2009 with nearly $1 billion of unrestricted cash. In the first quarter of 2009, the Company completed the retirement (through tender or open market transactions) of $307.8 million of notes maturing/putable in 2009-2011. In the second quarter of 2009, the Company arranged to borrow $500 million from Freddie Mac, holding the proceeds on the balance sheet to repay maturing debt. During the fourth quarter of 2009, the Company issued approximately $3.5 million common shares under its At-The-Market (ATM) share offering program for total consideration of $123.7 million and completed the retirement (through tender transactions) of $344.3 million of notes maturing/putable in 2011—2012. With these loan and ATM proceeds, and by maintaining an aggressive disposition pace with a conservative acquisition and development appetite, the Company successfully navigated an extremely daunting credit and liquidity crisis.

•

Capital Allocation. As in the previous year, the Company responded to market conditions in 2009 by limiting property acquisitions while continuing to dispose of assets. In 2009, the Company realized strong returns on disposition assets, which generated an aggregate unlevered internal rate of return of 9.9%. These sales also improved the Company’s liquidity position, contributing significantly to its ability to weather the credit crisis. The Company sold 54 consolidated properties, consisting of 11,055 units, for an aggregate sales price of $905.2 million. The Company acquired two properties in 2009, with 566 apartment units, for $145.0 million, as well as a long-term leasehold interest in a land parcel located in Manhattan for a purchase price of $11.5 million.

•

Same Store Results. The Company’s 2009 revenue goal was to deliver market leading same store results in the submarkets in which we operate. An analysis of head-to-head market comparisons with seven large competitors showed that the Company’s results equaled or were better than competitors 59.4% of the time. The assessment was based on analysis of publicly available industry research and the Company’s revenue data by market and submarket. The Company’s same store expense goal was to deliver controllable expense growth within budget. Original guidance for annual same store expense growth with a midpoint of 3.0% was later reduced to a 0.5% increase. The Company reported full-year actual results of a 0.1% decrease after the prior year’s modest 2.2% growth. This tight expense control was achieved while customer satisfaction scores improved year over year.

•

Leadership. Employee engagement and retention are the key metrics for assessing leadership performance. The Company improved its score to 83% on the 2009 employee engagement survey, from 82% in 2008. The Company’s employee retention reached an all-time high of 80.0% in 2009, an improvement of 3.5 percentage points over the previous year’s rate.

•

General and Administrative Costs (“G&A”) and Property Management Costs. The Company recognizes its obligation to manage overhead, particularly in light of the significant reduction in apartment units under ownership/management that has occurred in recent years. For 2009, the Company reported G&A costs totaling $39.0 million versus $45.0 million in 2008, a 13.2% decrease. Property management costs decreased by $15.8 million from 2007 to 2009 as the number of units decreased by approximately 28,700 since the beginning of 2007.

Reduction of 2009 Compensation

Based on the Compensation Committee’s review of the metrics used to determine performance of the Company’s financial and other goals, as well as the performance of each executive officer’s business unit and individual goals, each of the executives would have achieved a cash bonus and long-term incentive compensation award substantially in excess of the amounts actually awarded. Notwithstanding this performance, however, as a result of the reductions in both cash flow and dividends discussed above, as well as expectations that weak economic conditions may continue into 2010, the Compensation Committee, in consultation with the Chief Executive Officer, reduced the cash bonus awards by an average of 32%, and reduced the long-term compensation awards by an average of 4%, for the named executive officers.

Compensation for the Chief Executive Officer in 2009

As Chief Executive Officer and President, Mr. Neithercut is responsible for achievement of corporate, business unit and individual goals and was ultimately accountable for the results detailed in “Evaluation of Company Performance in 2009.” Under his stewardship, the Company achieved significant results in 2009, maintaining its position as a leader in the multifamily space and remaining in solid financial condition despite economic turbulence and extraordinary pressures on the real estate industry. The Company was also positioned to profit from future acquisitions of high-quality assets in core markets. In light of the Committee’s assessment of Mr. Neithercut’s performance during 2009 and the reduction in compensation referenced above, Mr. Neithercut received a cash bonus of $719,063 (76.7% of target) and a long-term compensation award of $2,489,060 (106.2% of target).

In order to provide our shareholders with a more complete picture of our CEO’s compensation, we are providing additional compensation information not required by the SEC. Below is a table showing Mr. Neithercut’s total compensation for services performed in the listed years. In accordance with the SEC rules, the Summary Compensation Table discloses the grant date value of equity awards awarded in the listed years, even though such awards were for service in prior years. In contrast, this table shows the grant date value of such awards for the actual year in which services were performed.


Year	Salary		Cash Bonus		Equity Awards	All Other Compensation	Total Compensation
2009 Compensation	$	625,000	$	719,063	$2,489,060	$8,689	$3,841,812
2008 Compensation		625,000		875,000	2,299,997	10,767	3,810,764
2007 Compensation		625,000		500,000	2,044,997	17,178	3,187,175

Compensation for the Other Named Executives in 2009

Alan W. George. As Executive Vice President and Chief Investment Officer, Mr. George is responsible for contributing to the overall results of the Company, achievement of corporate goals, performance on goals and objectives of the Investment Group, which includes acquisitions and dispositions, portfolio management and construction services, and achievement of individual goals.

Specifically, Mr. George’s performance was assessed on the shared corporate financial and leadership goals, same store revenue growth, property management costs, lease-up performance for development and acquisition assets and capital allocation, as well as his individual goals for the year. In his leadership role on the Company’s Investment Committee, Mr. George was directly involved in capital decisions to make the Company a net seller of property assets by reducing acquisition activity while continuing dispositions, and execution of those decisions. He led the Investment Group in acquisitions that totaled $156.5 million and consolidated dispositions totaling $905.2 million, achieving sales prices greater than 90% of prior calculations of asset value. Mr. George was recognized for strong performance for his leadership on capital allocation results, his contribution to same store revenue growth and his role in achieving property management cost results, detailed in “Evaluation of Company Performance in 2009,” as well as his contribution to lease-up performance for development and acquisition assets. In light of the Committee’s assessment of Mr. George’s performance during 2009, Mr. George received a cash bonus of $318,325 (74.9% of target) and a long-term compensation award of $909,496 (107.0% of target).

Frederick C. Tuomi. As Executive Vice President and President – Property Management, Mr. Tuomi is responsible for contributing to the overall results of the Company, achievement of corporate goals, performance on goals and objectives of Property Management, which comprises the Company’s entire portfolio of apartment assets, and achievement of individual goals. During 2009, he oversaw the operations of approximately 500 properties with 140,000 apartment units located in 23 states, and more than 3,400 employees, among the largest portfolios in the multifamily sector. He also served on the Company’s Investment Committee, which makes decisions about capital allocation. Specifically, Mr. Tuomi’s performance was assessed on the shared corporate financial and leadership goals, same store revenue growth, same store expense control, property management costs, and lease-up performance for development and acquisition assets, as well as his individual goals for the year. Mr. Tuomi was recognized for strong performance for his leadership on the same store revenue growth, same store expense control and property management cost results detailed in “Evaluation of Company Performance in 2009,” as well as his leadership on lease-up performance for development and acquisition assets. In light of the Committee’s assessment of Mr. Tuomi’s performance during 2009, Mr. Tuomi received a cash bonus of $346,587 (81.5% of target) and a long-term compensation award of $990,245 (116.5% of target).

Mark J. Parrell. As Executive Vice President and Chief Financial Officer, Mr. Parrell is responsible for contributing to the overall results of the Company, achievement of corporate goals, performance on business unit goals and objectives in the areas of accounting, budgeting, investor relations, tax and treasury, as well as administrative responsibility for internal audit, and achievement of individual goals. He also served on the Company’s Investment Committee, which makes decisions about capital allocation. Specifically, Mr. Parrell’s performance was assessed on the shared corporate financial and leadership goals, property management cost results detailed in “Evaluation of Company Performance in 2009,” his business unit’s goals and objectives, and his individual goals for the year. Mr. Parrell was directly responsible for outstanding performance on the balance sheet/liquidity management goal, playing a leading role in the Company’s navigation through the economy’s and the industry’s credit and liquidity crises. Mr. Parrell led the debt tender offers and Freddie Mac secured loan transaction detailed in “Evaluation of Company Performance in 2009.” Achievement of his business unit goals resulted in increased emphasis on the use of technology for internal audit work product and reduced staffing levels and better alignment of regional support staff with the operations structure. In light of the Committee’s assessment of Mr. Parrell’s performance during 2009, Mr. Parrell received a cash bonus of $374,900 (115.4% of target) and a long-term compensation award of $713,999 (109.8% of target).

David S. Santee. As Executive Vice President – Property Operations, Mr. Santee has responsibility for contributing to the overall results of the Company, achievement of corporate goals, performance on goals and business unit objectives of Property Operations, and achievement of individual goals. In 2009, he oversaw the areas of property operations (including facilities services, real estate tax, pricing and product procurement for the Company’s entire portfolio of property assets), information technology, marketing and branding, and sales and revenue strategy. He also served on the Company’s

Investment Committee, which makes decisions about capital allocation. Specifically, Mr. Santee’s performance was assessed on the shared corporate financial and leadership goals, same store revenue growth, same store expense control, property management costs, and lease-up performance for development and acquisition assets, as well as his individual goals for the year. Mr. Santee was recognized for strong performance for his leadership on the same store revenue growth, same store expense control, and property management cost results detailed in “Evaluation of Company Performance in 2009,” as well as his leadership on lease-up performance for development and acquisition assets. In light of the Committee’s assessment of Mr. Santee’s performance during 2009, Mr. Santee received a cash bonus of $297,675 (85.1% of target) and a long-term compensation award of $850,499 (121.5% of target).

Benchmarking

To measure the Company’s executive compensation for competitiveness in the industry, the Compensation Committee engaged an outside consultant, FPL Associates L.P. (“FPL”), to provide a competitive compensation benchmarking analysis. This analysis utilizes data from a peer group of public real estate companies across a variety of asset classes (i.e., multifamily, office, industrial, hotel, retail and health care). The Compensation Committee and the Company used this information as context for decisions about compensation practices and about pay levels for individual executive officers.

In 2009, the peer group consisted of 19 public REITs and one public real estate operating company that were of the largest size (by total market capitalization) within the public real estate industry. Total market capitalization of this peer group ranged from approximately $4.5 billion to $43.1 billion, with a median of approximately $9.6 billion (as of October 31, 2009). The Company’s total capitalization at that time ranked it 4^th largest of this 20 entity peer group.

The peer group members included: AMB Property Corporation, Apartment Investment and Management Company, AvalonBay Communities, Inc., Boston Properties, Inc., Brookfield Properties Corporation, Camden Property Trust, Douglas Emmett, Inc., Duke Realty Corporation, Essex Property Trust, Inc., Forest City Enterprises, Inc., HCP, Inc., Host Hotels & Resorts, Inc., Kimco Realty Corporation, Liberty Property Trust, Macerich Company, ProLogis, Simon Property Group, Inc., UDR, Inc., Ventas, Inc., and Vornado Realty Trust.

FPL compared the individual components and total compensation of the Company’s top executives to the compensation of executives in comparable positions within the peer group. The tables provided to the Company’s Compensation Committee highlighted the 25th percentile, median, average, 75th percentile and 90th percentile market practices, and then displayed each of the Company’s listed executive’s compensation as a percentage of the variance from the market median and 75th percentile. Finally, FPL examined the level of compensation provided to the Company’s top five highest paid executive officers on a single year basis as it related to total capitalization (at December 31, 2008) and over the past three years as it related to “shareholder value,” as defined by FPL, created over such period for both the Company and its peer group.

Based upon FPL’s analysis and the overall performance assessment process described above, the Compensation Committee believes the total compensation of the named executive officers is fair and reasonable.

Long-Term Compensation Awards

Option Awards. For 2009, all executive officers were issued 50% of long-term compensation as Option Awards. The Company believes that Option Awards are particularly well-suited to aligning executives’ interests with those of shareholders and for motivating future performance because Option Awards have no current exercise value unless the share price appreciates. The number of options is determined by dividing the dollar value of the Option Award by the option value per share. Option

Awards vest over three years of continuous employment at a rate of one-third of such award each year, providing further encouragement for the retention of key executives.

Share Awards. The remaining 50% of long-term compensation is issued as Restricted Shares or, at the choice of the employee as a one-for-one alternative to Restricted Shares, LTIP Units. The number of Share Awards is determined by dividing the dollar value of the award by the grant price. To encourage retention of key executives, Share Awards do not vest until completion of three years of continuous employment from the grant date, at which time they vest in full. Dividends are paid on Share Awards at the same rate as on unrestricted common shares/OP Units. An LTIP Unit is a class of partnership interest in the Operating Partnership, which is not economically equivalent in value to a common share, but over time can potentially increase in value to one-for-one parity with common shares by operation of special tax rules. Once LTIP Units are vested and converted to OP Units, the holder may exchange the OP Units for the Company’s common shares in the same manner as any other limited partner in the Operating Partnership. Unlike restricted shares, which are taxed as ordinary income on the vesting date, the recipient of an LTIP Unit may be able to defer tax until the ultimate conversion of the LTIP Unit into a Company common share.

Pricing and Dates of Share Awards and Option Awards

The Company has a detailed procedure for establishing the grant date and valuation for its annual issuance of Share Awards and Option Awards. The Company’s Chief Financial Officer and/or Chief Accounting Officer provide the Compensation Committee with management’s recommendation for the valuation methodology of each option to be used in the Option Award. The Company generally uses the same valuation methodology for the value of each option as it uses to determine the accounting expense for Option Awards in accordance with the applicable accounting guidance. The Board, after reviewing the Compensation Committee’s recommendation, then approves the grant date (which must be on or after the approval date and typically follows the Company’s release of its fourth quarter earnings), the option valuation methodology, the allocation between Share Awards and Option Awards and the dollar amount of Share Awards and Option Awards for all employees. The Share Award value (for purposes of determining the number of Share Awards granted) and the exercise price of the Option Awards are equal to the price of the Company’s common shares at the close of business on the grant date. Any grant date for out-of-cycle grants (i.e., an initial award to a new hire or an award to an existing employee in the case of a mid-year promotion) to the Company’s executive officers requires the approval of the Compensation Committee. In 2009, there were no out-of-cycle grants to any executive officers. This year, due to the continued volatility in the stock market, the Board delegated authority to set the grant date to the Company’s Chief Executive Officer, within certain parameters: the grant date would be a business day during the period of February 5, 2010 – February 11, 2010 (five business days after the February 4, 2010 fourth quarter earnings call), and the Chief Executive Officer was required to send notice of the selection of the grant date to the Chair of the Compensation Committee after the stock market closes on such date. Mr. Neithercut sent the requisite notice on February 5, 2010, one business day after the fourth quarter earnings call, consistent with the Company’s past practice.

Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (“IRC”), limits the deductibility on the Company’s tax return of compensation over $1 million to any “covered employee” unless, in general, the compensation is paid pursuant to a plan which is performance-based, non-discretionary and has been approved by the Company’s shareholders. The Company believes that because it qualifies as a real estate investment trust under the IRC and pays dividends sufficient to minimize federal income taxes, the payment of compensation that may not satisfy the requirements of Section 162(m) will generally not materially affect the Company’s net income. For these reasons, the Compensation Committee’s compensation policy and practices are not directly guided by considerations relating to Section 162(m).

COMPENSATION RISKS

The Compensation Committee extensively reviewed the elements of compensation to determine whether they encourage excessive risk taking and concluded that any risks arising from the Company’s compensation policies and practices for its employees are not reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes that the mix and design of the elements of executive compensation do not encourage management to assume excessive risks. Although objective factors, such as Company performance and competitive market data, are factors used by the Compensation Committee when it sets compensation levels, compensation decisions also include subjective considerations, which restrain the influence of objective factors on excessive risk taking. The Company’s long-term compensation is designed to cultivate a level of risk taking behavior consistent with our business strategies and the vesting periods for long-term compensation awards encourage focus on sustained share price appreciation, as do the Company’s share ownership guidelines for senior management (as well as trustees).

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis shown above. Based on such review and discussion, we recommended to the Board that the analysis be included in this Proxy Statement.

Compensation Committee:

John W. Alexander, Chair

Linda Walker Bynoe

Boone A. Knox

Sheli Z. Rosenberg

B. Joseph White

EXECUTIVE COMPENSATION

The following table shows the compensation paid to or earned by our named executive officers during the year shown.

SUMMARY COMPENSATION TABLE


Name and Principal Position	Year	Salary	Restricted Shares/ LTIP Units (1)	Option Awards (1)	Non-Equity Incentive Plan Compensation (2)	All Other Compensation (3)	Total Compensation (4)
David J. Neithercut Chief Executive Officer & President	2009 2008 2007	$625,000 625,000 625,000	$1,149,993 2,066,051 2,182,609	$1,150,004 511,261 568,777	$719,063 875,000 500,000	$8,689 10,767 17,178	$3,652,749 4,088,079 3,893,564

Alan W. George Executive Vice President & Chief Investment Officer	2009 2008 2007	425,000 425,000 425,000	496,120 1,035,403 1,150,678	496,133 243,747 262,532	318,325 435,200 350,000	13,281 15,756 20,044	1,748,859 2,155,106 2,208,254

Frederick C. Tuomi Executive Vice President & President-Property Management	2009 2008 2007	425,000 425,000 425,000	489,199 975,425 1,109,005	489,208 230,096 262,534	346,587 440,725 269,332	9,360 15,931 19,043	1,759,354 2,087,177 2,084,914

Mark J. Parrell Executive Vice President & Chief Financial Officer	2009 2008 2007	325,000 325,000 252,292	332,600 187,489 85,814	332,626 62,510 28,602	374,900 412,750 200,000	12,410 13,060 10,050	1,377,536 1,000,809 576,758

David S. Santee (5) Executive Vice President-Operations	2009	350,000	331,770	331,788	297,675	10,212	1,321,445

(1)

The dollar amount shown equals the number of restricted shares/LTIP Units and options granted during the listed years for services performed in the prior year. Accordingly, the amounts listed for 2009, 2008 and 2007 are for services performed in 2008, 2007 and 2006, respectively. The dollar value of the restricted shares/LTIP Units, which vest in full on the third anniversary of the grant date, is determined by multiplying the closing price of the common shares on the grant date by the number of restricted shares/LTIP Units granted. For Mr. Neithercut, Mr. Tuomi and Mr. George, the dollar value of the restricted shares listed for the years 2007 and 2008 also includes the grant date value of the restricted shares issued under the Company’s former performance share plan, fifty percent of which vested upon issuance with the balance vesting equally over two years from the grant date. The options were granted at an exercise price equal to the closing price of the common shares on the date of grant and vest in equal installments over three years. Distributions are paid on restricted shares/LTIP Units at the same rate as on unrestricted common shares. See the Grants of Plan-Based Awards table below for the 2010 grants made for services performed in 2009. Assumptions used in the calculation of all amounts are included in footnotes 2 and 14 of the audited financial statements included in the Company’s Annual Reports on Form 10-K.

(2)	Represents discretionary cash bonuses paid by the Company for the year in which the services were performed, even though paid in February of the following year. Accordingly, the amounts listed for 2009, 2008 and 2007 consist of cash bonuses paid in February 2010, 2009 and 2008, respectively.

(3)	Represents other benefits provided the named executive officers, including Company matching and profit sharing contributions (if any) to the Company’s 401(k) plan, the payment of life insurance premiums and the cost of executive physicals.

(4)	The named executives do not have pension benefits and are not entitled to above-market or preferential earnings on nonqualified deferred compensation.

(5)	As Mr. Santee was not a named executive officer in the compensation tables in the Company’s 2009, 2008 or 2007 Proxy Statements, his compensation for prior years is not included herein.

GRANTS OF PLAN-BASED AWARDS

The following table shows the number of shares/LTIP Units and options granted the named executive officers in the calendar years 2009 and 2010. Pursuant to SEC rules, this table requires the disclosure of such grants made in 2009 for services performed in 2008. Although not required by SEC rules, in order to more fully disclose the compensation for the named executive officers, this table also includes such grants made in February 2010 for services performed in 2009.


Name	Grant Date (1)(2)	Number of Shares/ LTIP Units Granted	Number of Options Granted	Exercise Price Per Option	Closing Price on Grant Date	Grant Date Fair Value of Shares/LTIP Units and Option Awards (1)(2)
David J. Neithercut	2/6/2009	49,848	—	—	$23.07	$1,149,993
	2/6/2009	—	340,238	23.07	23.07	1,150,004
	2/5/2010	37,747	—	—	32.97	1,244,519
	2/5/2010	—	201,382	32.97	32.97	1,244,541
Alan W. George	2/6/2009	21,505	—	—	23.07	496,120
	2/6/2009	—	146,785	23.07	23.07	496,133
	2/5/2010	13,792	—	—	32.97	454,722
	2/5/2010	—	73,588	32.97	32.97	454,774
Frederick C. Tuomi	2/6/2009	21,205	—	—	23.07	489,199
	2/6/2009	—	144,736	23.07	23.07	489,208
	2/5/2010	15,017	—	—	32.97	495,110
	2/5/2010	—	80,119	32.97	32.97	495,135
Mark J. Parrell	2/6/2009	14,417	—	—	23.07	332,600
	2/6/2009	—	98,410	23.07	23.07	332,626
	2/5/2010	10,828	—	—	32.97	356,999
	2/5/2010	—	57,767	32.97	32.97	357,000
David S. Santee	2/6/2009	14,381	—	—	23.07	331,770
	2/6/2009	—	98,162	23.07	23.07	331,788
	2/5/2010	12,898	—	—	32.97	425,247
	2/5/2010	—	68,811	32.97	32.97	425,252

(1)

2/6/09 Grant. This grant of restricted shares/LTIP Units and options for services performed in 2008 was approved by the Board on January 26, 2009. The dollar value of the restricted shares, which vest in full on the third anniversary of the grant date, is determined by multiplying the closing price of the common shares on the grant date by the number of restricted shares granted. The number of LTIP Units were calculated using the price of the Company’s common shares at the close of business on February 6, 2009. Given certain administrative requirements, including required amendments to the Partnership Agreement of the Operating Partnership, LTIP Units were not granted until March 12, 2009. In February 2010, the LTIP Units from this grant converted to restricted OP Units subject to vesting on February 6, 2012. The options were granted at an exercise price equal to the closing price of the common shares on the date of grant and vest in equal installments over three years. The grant date fair value of $3.38 per option was calculated using the modified Black-Scholes option pricing model based on the following assumptions: an estimated time until exercise of 5 years, a volatility of 26.81%, a risk-free interest rate of 1.89%, and a dividend yield of 4.68%.

(2)

2/5/10 Grant. This grant of restricted shares/LTIP Units and options for services performed in 2009 was approved by the Board on January 26, 2010. The dollar value of the restricted shares/LTIP Units, which vest in full on the third anniversary of the grant date, is determined by multiplying the closing price of the common shares on the grant date by the number of restricted shares granted. The options were granted at an exercise price equal to the closing price of the common shares on the date of grant and vest in equal installments over three years. The grant date fair value of $6.18 per option was

calculated using the modified Black-Scholes option pricing model based on the following assumptions: an estimated time until exercise of 5 years, a volatility of 32.45%, a risk-free interest rate of 2.29%, and a dividend yield of 4.85%.

The following table shows the value realized by the named executive officers upon exercise of options and the vesting of shares during 2009. These option and share awards were granted to the named executives in previous years and were not part of their 2009 compensation package.

OPTION EXERCISES AND SHARES VESTED DURING 2009


	Option Awards		Share Awards (1)
Name	Number of Shares Acquired on Exercise	Value Realized on Exercise	Number of Shares Acquired on Vesting	Value Realized on Vesting
David J. Neithercut	65,282	$561,432	42,970	$991,318
Alan W. George	0	0	21,572	497,666
Frederick C. Tuomi	0	0	17,119	394,935
Mark J. Parrell	0	0	1,190	27,453
David S. Santee	0	0	5,257	121,279

(1)	Reflects the vesting of restricted shares granted in 2006 for services performed in 2005, as well as the vesting of restricted shares issued under the Company’s 2004 and 2005 performance share grants.

PENSION BENEFITS

The Company does not have a pension plan. Accordingly, there are no pension benefits to disclose for the named executive officers.

OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2009


	Option Awards				Share Awards
	Number of Unexercised Options		Option Exercise	Option Expiration	Number of Unvested Restricted	Market Value of Unvested Restricted
Name	Exercisable	Unexercisable	Price	Date (1)	Shares/LTIP Units	Shares/LTIP Units (2)
David J. Neithercut	—	—	—	—	125,158	$4,227,837
	67,704	0	25.84	1/18/2011	—	—
	65,000	0	27.60	7/11/2011	—	—
	79,965	0	27.20	1/16/2012	—	—
	100,987	0	23.55	2/7/2013	—	—
	116,151	0	29.25	1/27/2014	—	—
	139,210	0	31.76	2/3/2015	—	—
	125,003	0	42.80	2/3/2016	—	—
	60,572	30,287	53.50	2/8/2017	—	—
	41,769	83,540	38.57	2/7/2018	—	—
	0	340,238	23.07	2/6/2019	—	—

Total:	796,361	454,065			125,158	4,227,837

Alan W. George	—	—	—	—	57,270	1,934,581
	46,176	0	27.20	1/16/2012	—	—
	71,711	0	23.55	2/7/2013	—	—
	82,696	0	29.25	1/27/2014	—	—
	77,188	0	31.76	2/3/2015	—	—
	59,840	0	42.80	2/3/2016	—	—
	27,958	13,980	53.50	2/8/2017	—	—
	19,914	39,828	38.57	2/7/2018	—	—
	0	146,785	23.07	2/6/2019	—	—

Total:	385,483	200,593			57,270	1,934,581

Frederick C. Tuomi	—	—	—	—	55,778	1,884,181
	22,536	0	25.84	1/18/2011	—	—
	65,000	0	27.60	7/11/2011	—	—
	54,687	0	27.20	1/16/2012	—	—
	65,268	0	29.25	1/27/2014	—	—
	66,290	0	31.76	2/3/2015	—	—
	45,918	0	42.80	2/3/2016	—	—
	27,958	13,980	53.50	2/8/2017	—	—
	18,798	37,598	38.57	2/7/2018	—	—
	0	144,736	23.07	2/6/2019	—	—

Total:	366,455	196,314			55,778	1,884,181

Mark J. Parrell	—	—	—	—	20,882	705,394
	2,215	0	29.25	1/27/2014	—	—
	4,111	0	31.76	2/3/2015	—	—
	4,023	0	42.80	2/3/2016	—	—
	3,046	1,523	53.50	2/8/2017	—	—
	5,107	10,214	38.57	2/7/2018	—	—
	0	98,410	23.07	2/6/2019	—	—

Total:	18,502	110,147			20,882	705,394

David S. Santee	—	—	—	—	29,205	986,545
	6,381	0	31.76	2/3/2015	—	—
	17,772	0	42.80	2/3/2016	—	—
	13,180	6,590	53.50	2/8/2017	—	—
	8,285	16,572	38.57	2/7/2018	—	—
	0	98,162	23.07	2/6/2019	—	—

Total:	45,618	121,324			29,205	986,545

(1)	All options, which are granted ten years prior to the stated expiration date, vest in equal installments over three years.

(2)

The dollar amount shown equals the number of outstanding restricted shares/LTIP Units at December 31, 2009 multiplied by $33.78, the fair market value of the common shares at December 31, 2009. Restricted shares/LTIP Units vest in full on the third anniversary of the grant date, except for the restricted shares awarded under the Company’s Performance Share Plan at the end of the three-year

valuation period, for which fifty percent vest upon issuance and the remaining fifty percent vest equally over two years. Effective January 1, 2007, the Company discontinued awarding new performance share awards under the Performance Share Plan and there are no outstanding grants under the plan.

NONQUALIFIED DEFERRED COMPENSATION

The following table shows the current value of the compensation previously earned and deferred by the named executive officers to the Company’s employee funded Deferred Compensation Plan. As the Company has not made any contributions to the Plan since its inception in 1995 and does not guaranty any investment return, the balances shown are comprised entirely of contributions made by the executive officers from their salary, bonus or vested restricted share awards for prior years and the earnings on those amounts. A substantial portion of the balances shown is invested in the Company’s common shares.


Name	Executive Contributions in 2009 (1)	Company Contributions in 2009	Earnings/ (Losses) in 2009		Withdrawals/ Distributions in 2009		Balance at December 31, 2009
David J. Neithercut	$0	$0	$	2,019,032	($93,909	)	$	9,462,933
Alan W. George	106,250	0		1,983,207	0			9,184,587
Frederick C. Tuomi	156,645	0		724,342	0			6,110,527
Mark J. Parrell	43,703	0		106,790	0			573,860
David S. Santee	121,279	0		165,522	(2,045,972	)		879,974

(1)	Portions of the amounts in this column are also included in the compensation reported in the Summary Compensation Table.

The Plan allows all Company employees with an annual salary of $110,000 or above to defer receipt of up to 25% of their base salary and up to 100% of their annual cash bonus and restricted shares upon vesting. Any deferred compensation is deposited by the Company directly with the independent trustee of the Plan, and invested, at the option of the participant, in Company common shares or in a limited number of independent mutual funds. Deferral elections are made by eligible employees during an open enrollment period each year for amounts to be earned or granted in the following year. Benefits under the Plan will be paid out, in either a lump sum or in annual installments, upon certain events such as termination of employment, disability, death or change in control.

POTENTIAL PAYMENTS UPON TERMINATION OF

EMPLOYMENT OR CHANGE IN CONTROL

The following table discloses the potential payments that would be provided each named executive officer under the Company’s compensation and benefit plans and arrangements in the event of a termination of employment or Change in Control (as defined below) of the Company on December 31, 2009.


Event	David J. Neithercut		Alan W. George		Frederick C. Tuomi		Mark J. Parrell		David S. Santee

*Change in Control without termination:*
• Cash Severance		—		—		—		—		—
• Accrued Bonus and LTC		—		—		—		—		—
• Unvested Equity Awards (1)		$7,871,786	$	3,506,648	$	3,434,304	$	1,759,365	$	2,037,860
• Health Care Benefits		—		—		—		—		—
• Excise Tax Gross-Up (2)		—		—		—		—		—

Total:		$7,871,786	$	3,506,648	$	3,434,304	$	1,759,365	$	2,037,860

*Change in Control with termination without Cause:*
• Cash Severance (3)		$3,112,499	$	1,920,150	$	1,826,293	$	1,276,627	$	1,266,970
• Accrued Bonus and LTC (4)		3,281,250		1,275,000		1,275,000		975,000		1,050,000
• Unvested Equity Awards (1)		7,871,786		3,506,648		3,434,304		1,759,365		2,037,860
• Health Care Benefits		25,014		35,160		31,573		34,128		32,804
• Excise Tax Gross-Up (2)		0		0		0		1,079,176		908,733

Total:	$	14,290,549	$	6,736,958	$	6,567,170	$	5,124,296	$	5,296,367

*Termination by Company for Cause; Resignation by Employee without Good Reason prior to retirement:*
• Cash Severance		—		—		—		—		—
• Accrued Bonus and LTC		—		—		—		—		—
• Unvested Equity Awards		—		—		—		—		—
• Health Care Benefits		—		—		—		—		—

Total:		$0		$0		$0		$0		$0

*Termination due to Death or Disability:*
• Cash Severance		—		—		—		—		—
• Accrued Bonus and LTC		—		—		—		—		—
• Unvested Equity Awards (1)		$7,871,786	$	3,506,648	$	3,434,304	$	1,759,365	$	2,037,860
• Health Care Benefits		—		—		—		—		—

Total:		$7,871,786	$	3,506,648	$	3,434,304	$	1,759,365	$	2,037,860

(1)

Pursuant to the Company’s Share Incentive Plans, upon a Change in Control of the Company, or upon the employee’s death or disability, all the Company’s employees receive accelerated vesting of unvested share options and outstanding restricted shares/LTIP Units. The dollar amount shown equals: (i) the number of outstanding unvested restricted shares/LTIP Units at December 31, 2009 multiplied by $33.78, the fair market value of the common shares as of that date; and (ii) representing the in-the-money value of unvested share options at December 31, 2009 (the $33.78 fair market value price of a common share less the option exercise price of in-the-money options).

(2)

Upon a change in control of the Company, the executive may be subject to certain excise taxes under Section 280G of the Internal Revenue Code to the extent that the present value of certain change in control payments received by the executive pursuant to the change in control of the Company equals or exceeds an amount equal to the prior five year average of the executive’s form W-2 compensation. The Company has agreed to reimburse the executives pursuant to the Change in Control/Severance

Agreements described below for those excise taxes as well as any income and excise taxes payable by the executives as a result of any reimbursements for such taxes. No such excise taxes are due in the event of the termination of an executive’s employment for reasons other than a change in control of the Company.

(3)

The cash severance due each named executive is 2.25 times the multiple of base salary and average bonus paid in the last three calendar years with the exception of Mr. Santee for which the cash severance due is 2.0 times the multiple of his base salary and average bonus paid in the last three calendar years.

(4)	Represents the target cash bonus and the target long-term incentive compensation grant of restricted shares and options for the year of termination.

Amounts Not Shown in Table

The amounts shown in the table do not include the following:

•

Distributions of plan balances under the Company’s deferred compensation plan as shown in the Nonqualified Deferred Compensation table; and

•

Payments and benefits to the extent they are provided on a non-discriminatory basis to all employees generally upon termination of employment including: (i) accrued salary and vacation pay; (ii) distributions of plan balances under the Company’s 401(k) plan; and (iii) life insurance proceeds in the event of death.

Change in Control/Severance Agreements

The Company has Change in Control/Severance agreements (the “CIC Agreements”) with the named executive officers that become effective upon a “Change in Control.” A Change in Control will generally be deemed to have occurred upon a third party’s acquisition of 30% or more of the Company’s common shares or assets, whether through purchase, merger or consolidation.

In 1999, an independent consultant gave a presentation to the Board recommending that the Company adopt change-in-control agreements to ensure that the Company’s executives maintain neutrality in their decision-making process and act in the best interests of shareholders in the event of a potential merger or acquisition. The consultant indicated that its recommendations were consistent with competitive practice in the general industry. The Board approved the consultant’s recommendations and thereafter entered into change-in-control agreements with each of its top executive officers (except Mr. Parrell who was not an executive officer at that time) which entitled them to severance payments in the event of their termination following a Change in Control. In 2001, in connection with the announced future retirement of the Company’s then Chief Executive Officer, the Board approved amending these change-in-control agreements to also provide for the payment of benefits in the event such executives were terminated within three (3) years following the appointment of a new Chief Executive Officer. The Board did this to ensure a smooth transition of the senior management team to the new Chief Executive Officer. In March 2009, all the executives voluntarily eliminated the additional benefits provided by the 2001 amendments. The Company entered into a Change in Control Agreement with Mr. Parrell on March 13, 2009. In connection with a review of its executive compensation practices, the Company determined that, effective as of May 2009, it will not enter into any new or materially amended agreements with its executive officers that include any excise tax gross-up provisions with respect to payments contingent upon a change in control.

In the event that an executive is dismissed without Cause or resigns for Good Reason during the three-year period following the effective date of the Change in Control, he will be entitled to all accrued but unpaid compensation, a prorated bonus and long-term incentive compensation grant through the date of termination, and a lump sum cash severance payment equal to a multiple (2.25 for Mr. Neithercut, Mr. George, Mr. Tuomi and Mr. Parrell and 2.0 for Mr. Santee) of the executive’s annual base salary plus the average of the executive’s annual bonus for the last three calendar years. In addition, all options and restricted shares would immediately vest. The executive is also entitled to continued medical, dental, life and disability benefits for the remainder of the applicable time period. If any payments made to an executive would result in an excise tax imposed by Section 4999 of the IRC, the executive would become entitled to receive a tax reimbursement that would put the executive in the same financial position after-tax that he or she would have been in if the excise tax did not apply to such amounts.

The Company’s termination of an executive is for Cause if: (i) the executive has been convicted of a felony or dishonesty; or (ii) the termination is evidenced by a resolution adopted in good faith by at least two-thirds of the Board that the executive either intentionally and continually failed substantially to perform his reasonable assigned duties for more than thirty days after written notice, or the executive intentionally engaged in conduct which is demonstrably and materially injurious to the Company. A termination by an executive is for Good Reason, and is thus treated the same as the termination by the Company without Cause, if it results from: (i) a material diminution in the executive’s status, position or responsibilities; (ii) any reduction in the executive’s base salary or overall compensation and benefits; (iii) the relocation of the executive’s home office by more than 30 miles; or (iv) a material breach by the Company of the CIC Agreement, the Company’s insolvency, or any purported termination of the executive’s employment for Cause which does not comply with the CIC Agreement.

Retirement/Rule of 70

The Company’s Share Incentive Plans provide for certain benefits upon retirement at or after age 62 or upon meeting certain age/length of service requirements. For employees hired prior to January 1, 2009, retirement generally will mean the termination of employment (other than for cause): (i) on or after age 62; or (ii) prior to age 62 after meeting the requirements of the Rule of 70. For employees hired after January 1, 2009, retirement generally will mean the termination of employment (other than for cause) after meeting the requirements of the Rule of 70.

The Rule of 70 is met when an employee’s years of service with the Company (which must be at least 15 years) plus his or her age (which must be at least 55 years) on the date of termination equals or exceeds 70 years. In addition, the employee must give the Company at least 6 months’ advance written notice of his or her intention to retire and sign a release upon termination of employment, releasing the Company from customary claims and agreeing to ongoing non-competition and employee non-solicitation provisions. Mr. Tuomi is currently eligible for retirement under the Rule of 70 and Mr. Neithercut will become eligible in 2011.

For employees hired prior to January 1, 2009, who retire at or after age 62, such employee’s unvested restricted shares and share options would immediately vest, and share options would continue to be exercisable for the balance of the ten-year option period. For all other employees (those hired after January 1, 2009 and those hired before such date who choose to retire prior to age 62), upon such retirement, such employee’s unvested restricted shares and share options would continue to vest per the original vesting schedule (subject to immediate vesting upon the occurrence of a subsequent Change in Control of the Company or the employee’s death or disability), and options would continue to be exercisable for the balance of the applicable ten-year option period, subject to the employee’s compliance with the non-competition and employee non-solicitation provisions. If an employee violates these provisions after such retirement, all unvested restricted shares and unvested and vested share options at the time of the violation would be void, unless otherwise approved by the Compensation Committee.

Split Dollar Life Insurance Agreements

Mr. Neithercut, Mr. George and Mr. Tuomi each entered into Split Dollar Life Insurance Agreements with the Company in December 1997, pursuant to which the Company purchased split dollar life insurance policies for the executives with death benefits of approximately $2 million each. The Company has not paid any insurance premiums relating to these policies in the past five years. Upon the executive’s termination of employment before retirement, the executive must borrow against the policy or partially surrender the policy in an amount to repay the insurance premiums to the Company. In the event of the death of an insured before retirement, the Company will be paid insurance proceeds equal to the cumulative insurance premiums paid on the policy by the Company, plus 10% interest per annum for up to ten years, with excess insurance proceeds being paid to the insured’s beneficiary. Upon the executive’s retirement after meeting the requirement of the Rule of 70, the executive will be fully vested in the policy and the Company will release its collateral assignment of the split dollar life insurance policies referenced therein, thereby releasing its right to receive any portion of the life insurance benefits and the premiums previously paid by it.

Retirement Benefits Agreements

The Company has entered into Executive Retirement Benefits Agreements with Mr. Neithercut, Mr. George and Mr. Tuomi. These agreements provide that, if either the named executive retires from the Company after reaching age 62 or meeting the requirements of the Rule of 70, or is terminated as a result of a Change in Control after reaching age 62 or meeting the requirements of the Rule of 70, the executive will be eligible to receive health and life insurance benefits for the remainder of his life in the same amounts as any regular active employee. These benefits will be offered at the same rates as would be paid by an active employee for like coverage and subject to increase as for any other active employee. Mr. Tuomi is eligible for retirement under the Rule of 70.

TRUSTEE COMPENSATION

The following table shows the compensation paid to or earned by our current and former non-employee trustees for their service on the Board during 2009.


Name	Annual Cash Fee		Annual Committee Fees		Restricted Share Awards		Option Awards		Total
	(1)		(1)		(2)(3)		(2)(3)		(4)
Samuel Zell,		$0		$0	$	1,279,993	$	1,280,006	$	2,559,999
Chairman (5)
Gerald A. Spector		50,000		0		37,489		37,511		125,000
Vice Chairman (2)
Charles L. Atwood (1)		65,000		13,375		37,489		37,511		153,375
Lead Trustee
John W. Alexander		50,000		18,500		37,489		37,511		143,500
Linda Walker Bynoe		2,151		172		18,750		18,750		39,823
Stephen O. Evans		22,220		6,125		37,489		37,511		103,345
Former Trustee
Boone A. Knox		50,000		8,000		37,489		37,511		133,000
John E. Neal		50,000		22,125		37,489		37,511		147,125
Desiree G. Rogers		2,565		418		0		0		2,983
Former Trustee
Sheli Z. Rosenberg		55,000		8,000		37,489		37,511		138,000
Mark S. Shapiro (6)		0		0		0		0		0
B. Joseph White		50,000		17,875		37,489		37,511		142,875

Total:	$	396,936	$	94,590	$	1,598,655	$	1,598,844	$	3,689,025

(1)

Our non-employee trustees (other than our Chairman, Mr. Zell), receive an annual cash retainer of $50,000 and an annual retainer of $75,000 of options and restricted shares, as further described in footnote 3 below. Mr. Zell received a grant of $2,560,000 of options and restricted shares for his services as the Company’s Chairman of the Board during 2009, as further described in footnote 3 below. Our employee trustee, Mr. Neithercut received no additional compensation for his service as a Trustee during 2009. The Lead Trustee of the Board is entitled to additional annual cash fees in the amount of $20,000. Accordingly, Ms. Rosenberg received an additional prorated cash fee of $5,000 for serving as the Company’s Lead Trustee for the first quarter of 2009 and Mr. Atwood received an additional prorated cash fee of $15,000 for serving as the Company’s Lead Trustee for the remainder of 2009. Trustees who served on the Audit Committee received an additional $6,000 in cash per year for their service. Trustees who served on the Compensation, Corporate Governance or Executive Committee received an additional $4,000 in cash per year for each committee on which they served. The chair of the Audit Committee received an additional $17,500 in cash per year and the chairs of the Compensation and Corporate Governance Committees each received an additional $10,500 in cash per year. Mr. Zell does not receive a fee for acting as Chair of the Executive Committee. Mr. Zell and Mr. Neithercut do not receive a fee for their service on the Pricing Committee.

(2)	In connection with his retirement from the Company in December 2007, Mr. Spector is also entitled to the payments under his Deferred Compensation Agreement described below.

(3)

For service on the Board in 2009 (from the June 2009 Annual Meeting of Shareholders to the June 2010 Annual Meeting of Shareholders), each non-employee trustee (with the exception of Ms. Rogers who resigned from the Board in January 2009 and Mr. Zell) received an annual long-term incentive grant of $75,000 on February 6, 2009, which was allocated 50% to options and 50% to restricted shares, utilizing the same valuation criteria and the same ratio of options and restricted shares as approved by the Board for the annual long-term incentive grants to the Company’s executive officers. Accordingly, each non-employee trustee received 1,625 restricted shares valued at $37,489 ($23.07 per share) and 11,098 share options valued at $37,511 ($3.38 per option). For his services performed in 2008 as Chairman of the Board, Mr. Zell received an annual long-term incentive grant on February 10, 2009 of $2,560,000 of options and restricted shares. Accordingly, Mr. Zell received 55,483 restricted shares valued at $1,279,993 ($23.07 per share) and 378,700 share options valued at $1,280,006 ($3.38 per option). The number of restricted shares and options Mr. Zell received were determined consistent with all other trustees and employees using a February 6, 2009 share price and option valuation. Due to the timing of approval of Mr.

Zell’s grant by the Board, compensation expense was determined using the closing market price and an option valuation on the date of grant, February 10, 2009. The restricted shares, including those granted to Mr. Zell, were granted at a share price equal to the closing price of the common shares on February 6th and vest in full on the third anniversary of the grant. Dividends are paid on restricted shares at the same rate as on unrestricted common shares. The options, including those options granted to Mr. Zell, were granted at an exercise price equal to the closing price of the common shares on February 6th and vest in equal installments over a three-year period. For his services performed in 2009 as Chairman of the Board, Mr. Zell received an annual long-term incentive grant on February 5, 2010 of $2,560,000 of options and restricted shares. Accordingly, Mr. Zell received 38,823 restricted shares valued at $1,279,994 ($32.97 per share) and 207,120 share options valued at $1,280,002 ($6.18 per option). The number of restricted shares and options Mr. Zell received were determined consistent with all other trustees and employees using a February 5, 2010 share price and option valuation. The restricted shares were granted at a share price equal to the closing price of the common shares on February 5th and vest in full on the third anniversary of the grant. The options were granted at an exercise price equal to the closing price of the common shares on February 5th and vest in equal installments over a three-year period. Assumptions used in the calculation of all amounts are included in footnotes 2 and 14 of the audited financial statements included in the Company’s Annual Reports on Form 10-K.

Trustees who are first appointed or elected to the Board after the beginning of a fiscal year receive prorated cash fees and long-term incentive grants for their first year of service. For non-employee trustees retiring from the Board or completing a scheduled term on the Board without re-nomination, vesting of all outstanding options and restricted shares granted as compensation for serving as a trustee is accelerated, and options may be exercised through the balance of the ten-year option period. The Company also reimburses the trustees for travel expenses incurred in connection with their activities on behalf of the Company, with the exception of Mr. Zell who is responsible for his own business related expenses

(4)

The Trustees do not have pension benefits and are not entitled to any above-market or preferential earnings on nonqualified deferred compensation. The Company has an optional deferred compensation plan in which trustees may participate. The trustees may defer receipt of any percentage of their annual cash compensation, which amount is then deposited into the Company’s deferred compensation plan on a tax-deferred basis. These deferred funds (as well as any cash trustee fees that are not deferred) may be used to purchase Company common shares under the Company’s Employee Share Purchase Plan (the “ESPP”) at the applicable discounted purchase price under the plan not to exceed $100,000 per year. Each trustee is immediately 100% vested in his or her acquired ESPP shares held in the deferred compensation plan, subject to a one-year hold requirement, and is allowed to begin withdrawals over a one-to-ten-year period following termination of his or her trusteeship. The trustees may also elect to defer receipt of their restricted shares to the deferred compensation plan prior to the vesting of the shares. Non-employee trustees do not participate in the Company’s profit sharing or 401(k) Plan and do not receive any matching contributions on any trustee compensation.

(5)

The Company entered into a Retirement Benefits Agreement with Mr. Zell in October 2001 which provides him with a cash retirement benefit after the termination of his service as Chairman of the Board. If Mr. Zell’s employment as Chairman is terminated for any reason, other than by the Company for cause, he (or his estate in the event of his death) will be entitled to an annual retirement benefit of $500,000 (as increased by a CPI index from January 2002 through the termination date) over a ten-year period commencing on the termination date. The present value of these payments, assuming the termination of Mr. Zell’s employment as of December 31, 2009, is $4,191,116. Should Mr. Zell be terminated for cause, he would not be entitled to any retirement benefit.

(6)	As Mr. Shapiro was not appointed to the Board until January 26, 2010, he did not earn any fees in 2009.

The following table shows the aggregate number of outstanding restricted shares and options of each non-employee trustee at December 31, 2009.


Name (1)	Restricted Shares	Unvested Options	Vested Options
Samuel Zell	151,600	528,177	1,972,973
Gerald A. Spector	3,083	12,631	1,158,739
Charles L. Atwood	4,134	12,631	26,211
John W. Alexander	4,134	12,631	58,543
Linda Walker Bynoe	578	3,029	0
Boone A. Knox	4,134	12,631	31,705
John E. Neal	4,134	12,631	10,056
Sheli Z. Rosenberg	4,134	12,631	51,705
B. Joseph White	4,134	12,631	41,705

Total:	180,065	619,623	3,351,637

(1)	Mr. Shapiro is not reflected in this table as he was not appointed to the Board until January 26, 2010.

Deferred Compensation Agreement with Mr. Spector

The Company entered into a Deferred Compensation Agreement with Mr. Spector in January 2002 which provides him with a ten-year cash retirement benefit after the termination of his employment with the Company. Mr. Spector’s ten annual installments commenced on January 1, 2009 with an annual payment of $643,887. The present value estimate of these payments as of December 31, 2009 is $3,715,905.

AUDIT COMMITTEE REPORT

The Audit Committee reviews the Company’s financial reporting process on behalf of the Board. The Company’s management has the primary responsibility for establishing and maintaining adequate internal financial controls, for preparing the financial statements and for the public reporting process. Ernst & Young, the Company’s independent auditor for 2009, was responsible for expressing opinions on the conformity of the Company’s audited financial statements with generally accepted accounting principles and on the effectiveness of the Company’s internal control over financial reporting.

In this context, the Audit Committee has reviewed and discussed with management and Ernst & Young the audited financial statements for the year ended December 31, 2009, and Ernst & Young’s evaluation of the Company’s internal control over financial reporting. The Audit Committee has discussed with Ernst & Young the matters that are required to be discussed by applicable auditing standards. Ernst & Young has provided to the Audit Committee the written disclosures and the letter required by applicable independence standards, and the Audit Committee has discussed with Ernst & Young the firm’s independence. The Audit Committee has concluded that Ernst & Young’s provision of audit and non-audit services to the Company and its affiliates is compatible with Ernst & Young’s independence.

In reliance on the review and discussions referred to above, the members of the Audit Committee recommended to the Board the inclusion of the Company’s audited consolidated financial statements in its Annual Report on Form 10-K for the fiscal year ended December 31, 2009, for filing with the SEC.

Audit Committee:

John E. Neal, Chair

Charles L. Atwood

Mark S. Shapiro

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Company’s Code of Ethics and Business Conduct (the “Code”) provides that employees (including executive officers) and trustees of the Company should avoid conflicts of interest with regard to their own or the Company’s interest. Under the Code, a conflict of interest exists whenever an individual’s private interests interfere or are at odds with the interests of the Company. Such a conflict can arise when (i) an employee takes actions or has interests that may make it difficult to perform his or her Company work objectively and effectively, or (ii) an employee or member of his or her family receives improper personal benefits as a result of his or her position in the Company, whether received from the Company or a third party. For purposes of the Code, the “interests” of each employee include any interests of his or her “immediate family,” defined as spouse, same-sex domestic partner, children, parents, siblings, mothers and fathers-in-law, sons and daughters-in-law, and brothers and sisters-in-law. Any waiver of the provisions of the Code for executive officers or trustees may only be made by the Board of Trustees or the Audit Committee, and any such waiver will be disclosed as required by law or regulation and the rules of the New York Stock Exchange. The Audit Committee has responsibility for reviewing the Company’s written policies relating to the avoidance of conflicts of interest and reviewing any proposed related party transactions. No trustees or executive officers are indebted to the Company under any Company loans. The following describes the Company’s related party transactions:

•

The Operating Partnership leases its corporate headquarters from an entity controlled by Mr. Zell on terms the Company believes to be equivalent to a third party transaction pursuant to a lease that expires on July 31, 2011. Amounts incurred for such office space and related office facility services in 2009 were $3,020,155.

OTHER MATTERS

The Board knows of no other matters to be presented for shareholder action at the Annual Meeting. If any other matters are properly presented at the meeting for action, it is intended that the persons named in the proxies will vote upon such matters in accordance with their discretion.


		By Order of the Board of Trustees


		Yasmina Duwe
		Senior Vice President, Associate General Counsel and Secretary

Chicago, Illinois

April 15, 2010

LOGO


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		M23225-P94264		KEEP THIS PORTION FOR YOUR RECORDS


		DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

EQUITY RESIDENTIAL

For

Withhold

For All

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.

The Board of Trustees recommends a vote “FOR” Proposals 1 and 2:

All

Except

Election of Trustees

Nominees:

01)

John W. Alexander

06)

David J. Neithercut

02)

Charles L. Atwood

07)

Mark S. Shapiro

03)

Linda Walker Bynoe

08)

Gerald A. Spector

04)

Boone A Knox

09)

B. Joseph White

05)

John E. Neal

10)

Samuel Zell

For

Against

Abstain

Ratification of the selection of Ernst & Young LLP as the Company’s independent auditor for the year ending December 31, 2010.

The Board of Trustees recommends a vote “AGAINST” Proposal 3:

Shareholder proposal relating to a change in the voting standard for trustee elections.

In their discretion, the Representatives are authorized to vote upon such other matters as may properly come before the meeting.

For address change and/or comments, please check this box and write them on the back where indicated.

Please indicate if you plan to attend this meeting.

Yes

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer.

Signature [PLEASE SIGN WITHIN BOX]

Date

Signature (Joint Owners)

Date

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

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M23226-P94264


EQUITY RESIDENTIAL Annual Meeting of Shareholders - June 16, 2010 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES The undersigned shareholder(s) of Equity Residential, a Maryland real estate investment trust (the “Company”), hereby appoint(s) DAVID J. NEITHERCUT and YASMINA DUWE, or either of them (the “Representatives”), with full power of substitution, as proxies for the undersigned to attend the Annual Meeting of Shareholders of the Company, to vote all common shares of the Company which the undersigned is entitled to vote at the Annual Meeting and otherwise represent the undersigned with all powers possessed by the undersigned if personally present at the Annual Meeting, to be held at 1:00 p.m., local time, on June 16, 2010, at Two North Riverside Plaza, Suite 2400, Chicago, Illinois, and any adjournment or postponement thereof. The undersigned hereby acknowledges receipt of the Notice of the Annual Meeting of Shareholders and of the accompanying Proxy Statement and revokes any proxy heretofore given with respect to such common shares. If this card is properly executed and returned, the shares represented thereby will be voted. If a choice is specified by the shareholder, the shares will be voted accordingly. If not otherwise specified, the shares represented by this card will be voted “FOR” Proposals 1 and 2, and “AGAINST” Proposal 3, and in the discretion of the Representatives in any other matter that may properly come before the meeting or any adjournment or postponement thereof.

		Address Changes/Comments:


		(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)

		Continued and to be signed on reverse side