Investor slams JLL over outgoing CEO’s compensation package

London-based asset management firm wonders if Colin Dyer wrote his own pay agreement on the way out

TRD New York /
May.May 10, 2017 11:00 AM

Colin Dyer and Alexander Marshall

One of JLL’s largest shareholders is threatening to oppose the company chairman’s reelection bid over the $11 million compensation package the brokerage gave to outgoing Chief Executive Colin Dyer amid weak returns for shareholders in the past few years.

“We believe this is a clear example of pay for failure,” Alexander Marshall, a partner with the London-based asset management firm Generation Investment Management, wrote in a letter in the letter to a proxy advisory firm, the Wall Street Journal reported.

Marshall’s letter went on to say that the agreement “makes one wonder whether [it] was written by Mr. Dyer himself rather than independent board members supposed acting in the interests of shareholders.”

Generation Investment owns a 7.5 percent stake in JLL. The company said it plans to vote against JLL Chairman Sheila Penrose’s reelection at the company’s upcoming shareholder meeting after the firm’s recently filed proxy statement showed that JLL paid Dyer a compensation package that included salary, pension and incentive plan compensation totaling $11.3 million in 2016.

Representatives for JLL and Dyer declined to comment.

Dyer unexpectedly announced his resignation in September as JLL’s shares continued to slide. At the end of the trading day on Monday, company shares on the New York Stock Exchange were down 23.3 percent from where they were at the beginning of 2016. Shares of CBRE, by comparison, were up 5.1 percent during the same period.

While revenues from brokerage commissions at both companies have declined due to the drop in sales in the U.S. and Europe, CBRE has moved quicker to replace commission revenue from recurring revenue streams such as property management, William Blair & Co. analyst Brandon Dobell told the Journal.

JLL’s investments in technology and employees “hurt margins in the near term more than people expected,” Dobell wrote in an email to the Journal.

Generation pointed out that JLL paid Dyer more than CBRE paid its CEO, despite the fact that the latter was “better run.”

Last year, The Real Deal took a look at compensation packages for some of the real estate industry’s highest-paid CEOs. [WSJ]Rich Bockmann

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