SL Green’s board was re-elected and its CEO pay approved at the annual shareholders meeting Monday, a harmonious outcome that contrasts to the discord recently experienced by rival Manhattan office owners.
All seven SL Green directors were reseated in spite of opposition from Institutional Shareholder Services. The boardroom-election adviser recommended investors vote against two members for their role in awarding $18 million in pay to CEO Marc Holliday, a sum deemed excessive in light of SL Green shares losing nearly half their value since early 2020. The directors opposed by ISS, University of Richmond law professor Carol Brown and private-equity executive Lauren Dillard, each received more than 75% of shareholder votes.
The vote wasn’t quite as decisive for Holliday’s pay package. But it was approved by 66% of shareholders even though ISS and another boardroom adviser, Glass Lewis, recommended voting against it.
Yesterday’s results represent a strong vote of confidence in SL Green, New York’s largest commercial landlord with more than 30 million square feet of space, 90% of it in Midtown and much of it in the strong Grand Central Terminal and Park Avenue office markets. SL Green’s stock price has performed better than peers over the last six months and the firm acquired two Manhattan office buildings this year from partners at ultra-low prices. It bought 245 Park Ave. out of bankruptcy two years and is commanding steep rents.
“SL Green is achieving $140 per square foot gross [rent] on 245 Park Avenue, which has not even been renovated yet,” said Piper Sandler analyst Alexander Goldfarb in a recent client note.
Last month, 50.3% of shareholders voted against the $20 million pay package awarded last year to Paramount Group CEO Albert Behler. Another 56% voted to remove director Katharina Otto-Bernstein after she missed 40% of board meetings last year, but Paramount reappointed her.
At Vornado Realty Trust, 43% of shareholders voted last month against the $20 million pay package awarded last year to CEO Steven Roth. Typically investors approve CEO pay with more than 90% of the vote and directors receive similar support.
In a statement, SL Green said: “Shareholders continue to recognize the leadership, effort and skill that resulted in our incredible outperformance last year…We are proud to have designed a pay program that enables a successful pay-for-performance culture at the company.”
Aaron Elstein , 2024-06-04 18:54:22
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