Pocket Dividends for Real Estate CEOs on Non-Owned Shares

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Vornado Chairman Stephen Roth and SL Green CEO Mark Holliday (Getty, iStock)

Vornado Chairman Stephen Roth and SL Green CEO Mark Holliday (Getty, iStock)

The city’s largest commercial landlords may have cut wages last year, but that doesn’t mean they’re bringing home less bacon.

While their companies were laying off employees as commercial real estate was hit by the pandemic, CEOs Vornado Realty Trust as well as SL Green Realty attracted large dividend payments on shares they did not own, Crain’s said.

Vornado CEO Stephen Roth agreed to cut his salary in half after laying off more than a quarter of its employees last year; The chief executive still received more than $ 1 million in dividends, Crain’s said.

Mark Holliday, CEO of SL Green, raised $ 175,000 from the same funds. Earlier this year, nearly two-thirds of the company’s shareholders opposed a compensation package that would give Holliday a $ 14.8 million premium after a commercial landlord’s revenues fell 16 percent in a year.

According to a study by Bucknell University finance professor Zi Jia, about 10% of public companies pay executives dividends on shares they do not own. Crane discovered that a dozen New York City executives, primarily in real estate and finance, received dividends in this way.

Seth Bernstein, CEO of AllianceBernstein, raised $ 989,000, while JPMorgan co-chairman Gordon Smith and CEO of wealth and wealth management Mary Callahan Erdos earned more than $ 450,000 in dividends on non-stocks he does not own.

“This is a terrible practice,” said Crain’s Terry Adamson, managing director of Technical Compensation Advisors. “The idea of ​​paying dividends to those who don’t own stocks when people lose their jobs is crazy.”

[Crain’s] – Suzanne Cavanaugh

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