SL Green Realty’s shareholders voted down the company’s proposed compensation package for 2016, which awarded CEO Marc Holliday – already the top paid executive for a real estate investment trust in the country – a 29 percent increase in base salary and a total compensation of $17.3 million.
Investors rejected the compensation package in a nonbinding say-on-pay vote in June, saying it didn’t go far enough to fall in line with investors’ interests. The move comes at the end of a proxy season when an unusually high number of REITs had their executive packages rebuked.
But executives at SL Green said the amount is warranted considering Holliday’s past performance and the fact that the compensation plan had been modified in the past to address investors’ concerns.
John Alschuler, chair of SL Green’s compensation committee, said the group made changes to the 2016 compensation plan that made it more performance-based that previous plans had been. Holliday’s total compensation fell roughly 25 percent in 2016, partly because of the REIT’s poor stock performance.
Some shareholders expressed concern that Holliday and company president Andrew Mathias may be motivated to favor One Vanderbilt over other SL Green buildings because they own stakes in the high-profile development.
But Alschuler said the two executives own a “very significant amount” of SL Green stock, and it’s unlikely that One Vanderbilt will be competing with other company buildings for tenants.
“There are no car buyers out there saying, should I buy a Bentley or a Chevy,” he said. “There are different products designed for different price points.” [WSJ] – Rich Bockmann