Shareholders are revolting against real estate CEO salaries

Earnings are falling and dividend payouts are shrinking, investors point out

Shareholders Revolt Against CEO Salaries

From left: Vornado Realty Trust’s Steven Roth, SL Green’s Marc Holliday and Paramount Group’s Albert Behler (Getty, Vornado Realty Trust, SL Green, Paramount Group)

Shareholders are not happy with how much the executives of top real estate companies are being paid, but they may not be able to do much about it.

Several recent votes saw a healthy portion of shareholders vote against CEO pay packages, Crain’s reported. Votes are typically non-binding, but it’s rare for pay package votes to garner below 90 percent of the ballots, meaning some real estate executives (and their boards) could feel rattled by the results.

A slim majority — 50.3 percent — voted against a $20 million pay package for Paramount Group’s Albert Behler; Paramount share prices have dropped by two-thirds since before the pandemic. His pay doubled from 2022 to 2023.

A $20 million total compensation package for Vornado Realty Trust’s Steven Roth received 43 percent of votes against. Vornado share prices have fallen by roughly the same amount as Paramount’s. Last year, Roth’s pay also doubled from the previous year, plus he was given a $2.2 million bonus for the 350 Park Avenue redevelopment

The next executive facing a potentially damning vote is SL Green’s Marc Holliday, who will learn of the shareholders’ verdict on Monday. The company’s share price has been cut in half since pre-pandemic days and two boardroom election advisers have railed against Holliday’s $18.4 million pay package for last year. 

Last year, 36 percent of shareholders voted against Holliday’s pay package, which failed to sway SL Green’s board. A majority of shareholders voted against his compensation plan in 2016 and 2020. A spokesperson for the company told The Real Deal, “We are proud to have designed a pay program that enables a successful pay-for-performance culture at the company, as seen in the 48 percent total shareholder return that topped our office REIT peers in 2023.”

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The votes come as shareholders point to a dissonance between performance and executive pay. Earnings are falling and dividend payouts are shrinking, especially for office landlords, as high interest rates dog the commercial sector.

Still, company boards may choose to ignore the shareholders’ votes.

“We don’t think these results set precedents many would hope,” Piper Sandler analyst Alexander Goldfarb told Crain’s.

Holden Walter-Warner

This has been updated with a statement from SL Green.