The city’s biggest commercial landlords may have taken pay cuts last year, but that doesn’t mean they brought home less bacon.
While their companies shed staffers as commercial properties suffered through the pandemic, the chief executive officers of Vornado Realty Trust and SL Green Realty pulled in large payouts from dividends on shares they didn’t own, Crain’s reported.
Vornado CEO Steven Roth agreed to cut his salary in half after letting more than a quarter of his staff go last year; the executive still raked in over $1 million in cash dividends, Crain’s reported.
Marc Holliday, Chief Executive at SL Green earned $175,000 through the same means. Earlier this year, nearly two-thirds of the company’s shareholders opposed a compensation package that would have awarded Holliday a $14.8 million bonus — after a year that saw the commercial landlord’s revenues tumble 16 percent.
Nearly 10 percent of public companies pay executives dividends on shares they don’t own, according to research by Bucknell University finance professor Zi Jia. Crain’s found that a dozen New York CEOs, primarily those in real estate and finance, collected dividends this way.
Seth Bernstein, CEO of AllianceBernstein, raked in $989,000 and JPMorgan’s co-president Gordon Smith and CEO of asset and wealth management Mary Callahan Erdoes each earned over $450,000 through dividends on unowned stock.
“It’s a terrible practice,” Terry Adamson, managing director at Technical Compensation Advisors, told Crain’s. “The idea of paying dividends to those who don’t own the stock when people are losing their jobs, it’s insane.”
[Crain’s] — Suzannah Cavanaugh