After a year that saw SL Green’s stock fall by as much as 54 percent, shareholders of New York’s biggest office landlord say the chief executive’s performance doesn’t warrant a bonus.
Nearly two-thirds of SL Green investors during the company’s annual meeting Tuesday opposed a compensation package that would have padded CEO Marc Holliday’s pockets with an added $14.8 million for 2020, Crain’s reported.
The bonus would have been 9 percent lower than what Holliday was awarded in 2019. Still, the executive would have earned a noncash bonus — a long-term incentive — twice as high as last year’s.
The company wrote in a filing that the approximately 10 percent reduction took into consideration the company’s achievements while recognizing its stock price declines, the publication noted.
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The real estate investment trust’s annual revenue fell by 16 percent last year and shares are down 14 percent from their pre-pandemic price.
“Significant concerns are raised regarding the [long-term incentive] program,” corporate governance advisory firm Institutional Shareholder Services said in a report cited by Crain’s. The report added that the company’s annual performance didn’t merit the proposed award and vastly exceeded the firm’s own target of $4.5 million.
This isn’t the first CEO package shareholders have shot down. Last month, Sterling Bancorp investors said no to a bonus for CEO Jack Kopnisky, who earned a higher salary and cash award last year as the bank’s earnings fell by half.
Stockholders have turned down 3.1 percent of executive pay plans in 2021 — a third because of pandemic concerns, consulting firm Semler Brossy told the news outlet. About 5 percent of real estate compensation packages were rejected.
SL Green just secured $3 billion in refinancing for its new skyscraper, One Vanderbilt. Funds will go toward refinancing a $1.4 billion construction loan, returning $1 billion in equity to the sponsor and boosting reserves for outstanding construction costs by $70.9 million, according to Fitch Ratings. Some $151 million will go towards tenants’ free rent and $107.2 million toward unit improvements.
The loan is one of the largest commercial mortgage-backed secured deals recorded, Crain’s wrote.