CHICAGO-Compensation for top executives in the top real estate companies in 2010 was higher than the past nine years, even surpassing 2006 levels, according to a study by locally based FPL Associates. In the firm’s Top 100 Public Real Estate Compensation Analysis, pulled together by combing through 2011 public filings, leaders at these companies made 20% gains over 2009 mostly in cash and long-term pay, while base salaries stayed relatively unchanged.
The advisory’s firm research According to the report, overall compensation for the top four positions – CEO, COO, CFO and general counsel – was $7.7 million in 2010, about 21% higher than $6.3 million in 2009. Since FPL started the annual study nine years ago, 2006 had been the top year at $6.8 million.
Most of the increases came from cash bonuses and incentives, reflecting performance-based rewards, says FPL Senior Managing Director Jeremy Banoff. “People hit higher than their targets,” he tells GlobeSt.com. “Some companies are trading at all-time high stock prices, especially REITs, and there’s been record equity capital raising.”
Shareholder return had dropped to negative 30% in the depths of the recession in 2008, which had also decreased pay to executives. Compensation for CEOs decreased by double digits for two consecutive years during the downturn, Banoff says.
However, there have been straight quarters of strong increases in shareholder performance, as well as companies showing an ability to clean up balance sheets and
gain access to capital.
Executives only saw a 2% gain in base salary from 2009, with most of the reward coming through the incentives, Banoff says. “These trends accurately reflect a pay-for-performance rationale across the sector,” he says.
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