Simon Property Group Restores Executive Salaries
In March, the REIT cut its high-level salaries between 25% and 100%.
Simon Property Group has restored the cuts it has made to its executive and board members’ salaries in the Spring due to the COVID-19 pandemic.
Last week Simon’s compensation committee approved reinstating the annual base salaries of Chairman of the Board, CEO and President David Simon (restored to $1.25 million), General Counsel and Secretary Steven E. Fivel ($650,000), Chief Administrative Officer John Rulli ($650,000), Executive Vice President, CFO and Treasurer Brian J. McDade ($500,000) and Assistant General Counsel and Assistant Secretary Alexander L.W. Snyder ($445,000).
The reinstatement will take effect on Dec. 19. Also, Simon’s compensation committee unanimously approved paying each executive officer salary lost during the period when pay was reduced.
As the pandemic was shutting down the US, Simon Property Group’s executive officers elected to reduce their base salaries by between 25% and 100%. Around that time, Simon’s Board of Directors also temporarily suspended payment to the independent directors of their quarterly board service cash retainer fees.
Simon’s Board of Directors also reinstated these payments to the independent directors for the fourth quarter of 2020, as well as approved paying independent directors the amounts they would otherwise have been paid for the second and third quarters of 2020.
Simon wasn’t alone in implementing pay reductions. Among publicly traded REITs, 16% announced compensation cuts, with the top brass seeing the most significant reductions, according to a June report from professional services firm FPL Associates.
As of May 31, 27 such REITs had unveiled pay reductions. In addition to reducing executive and board pay, some REITs announced furloughs, layoffs and suspended dividends.
REIT boards need to retain top talent to navigate the pandemic effectively, the report noted. But earnings, cash flow and stock prices are down at many REITs and, “there is a growing expectation that good leadership means shared sacrifice.”