REIT Executive Compensation Rose 7% in 2017

DC’s K street

WASHINGTON, DC–REIT executive compensation increased 7% in 2017 compared to 5% in 2016, according to a FTI Consulting report that focuses on the pay practices at publicly traded REITs.

2018 marked the first proxy season for CEO pay-ratio disclosure and the results from the REIT industry show a significant variance, with ratios ranging from 4:1 to 567:1. “We’re seeing large variances in pay ratios at REITs, which suggests that we should proceed with caution in comparing pay ratios among REITs,” according to a prepared statement by Katie Gaynor, co-lead of the Executive Compensation & Corporate Governance practice. “There are large discrepancies in the types of employees included in the median employee calculation, and in REIT sectors where there are a meaningful number of part-time employees, we are bound to see very high ratios.”

Compensation Transparency Important Trend

That said, she also noted that compensation transparency has become an important trend that has gained traction over the past several years. “Stakeholders ranging from employees to investors and the media are just as interested in how and why compensation decisions are made as they are in the absolute dollar amounts that were paid,” she said.