Steven Roth, CEO of Vornado Realty Trust, quietly received nearly $2 million worth of dividends last year on shares he didn’t own, tripling his cash compensation.
Companies often provide executives with shares that don’t vest for several years, though they vary on when they pay out dividends. While some companies wait for executives’ restricted shares to vest before paying out dividends, others pay executives as if they owned the unvested shares, Crain’s reported.
Vornado isn’t alone: At least nine other New York companies pay executives such dividends, including SL Green Realty, JPMorgan Chase and Philip Morris International. Such payouts are potentially more valuable under the new tax law, which maintains a lower tax rate on dividends than earned income.