The Real Deal Chicago

Sandeep Mathrani’s golden parachute from Brookfield-GGP deal could be worth as much as $189M

The golden parachute includes cash and stocks when the $15B deal closes
May 03, 2018 03:00PM

Sandeep Mathrani and a GGP property

GGP chief executive Sandeep Mathrani stands to get a payday of up to $189 million when Brookfield Property Partners closes on its $15 billion buyout of the Chicago shopping mall owner.

Mathrani would receive $42.1 million in restricted stock and equity through GGP’s incentive plan when the deal closes, and $7.1 million in cash if he’s terminated within the next two years, according to a filing with the Securities & Exchange Commission reported by Crain’s.

Mathrani also owns 5.9 million shares of GGP stock, so Brookfield’s cash-and-stock offer at $23.50 a share values that stake at $139.4 million. He has another roughly 400,000 unvested restricted shares that compensation consultant Mark Reilly, managing director at the Overture Alliance, told Crain’s should also be part of the package.

Mathrani, 55, received $11.3 million in total compensation from GGP last year, down from $12.7 million in 2016, according to SEC filings. He’s led GGP since 2011, just after it emerged from bankruptcy.

In 2016, investors rejected proposed compensation for Mathrani, calling out “several problematic features” in his employment agreement that led to an oversized 2015 pay package of $39.2 million compared to his peers.

Mathrani, then the highest paid real estate investment trust executive, got an incentive of at least $2 million in 2015 and 2016 and a $25 million five-year equity retention grant. He also had an excise tax provision that gives executives extra incentive to do merger deals by increasing termination agreements.

GGP, which did not comment on Mathrani’s golden parachute, said elsewhere in its SEC filings it did not receive any competing bids that could have led Brookfield to sweeten its offer.

“No third party had demonstrated to GGP or its advisors a willingness or ability to acquire all of GGP or a substantial portion of its assets,” GGP said in the filing. [Crain’s] — John O’Brien