{"id":1004030632,"date":"2011-06-30T11:29:34","date_gmt":"2011-06-30T19:29:34","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004030632"},"modified":"2022-12-07T03:14:42","modified_gmt":"2022-12-07T11:14:42","slug":"reit-executive-compensation-up-in-2010-led-by-office-industrial-sectors","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/reit-executive-compensation-up-in-2010-led-by-office-industrial-sectors\/","title":{"rendered":"REIT Executive Compensation Up in 2010, Led by Office, Industrial Sectors"},"content":{"rendered":"<p>June 30, 2011<br \/>\nBy Nicholas A. Ziegler, News Editor<\/p>\n<div id=\"attachment_1004030634\" style=\"width: 310px\" class=\"wp-caption alignright\"><a class=\"highslide\" href=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1004030634\" data-attachment-id=\"1004030634\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/reit-executive-compensation-up-in-2010-led-by-office-industrial-sectors\/morrissey-37\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg\" data-orig-size=\"500,375\" data-comments-opened=\"1\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;}\" data-image-title=\"morrissey\" data-image-description=\"\" data-image-caption=\"&lt;p&gt;Courtesy Flickr Creative Commons user morrissey&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg?w=500\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg\" alt=\"\" title=\"morrissey\" width=\"300\" height=\"225\" class=\"size-medium wp-image-1004030634\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg 500w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/06\/morrissey3.jpg?resize=300,225 300w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><p id=\"caption-attachment-1004030634\" class=\"wp-caption-text\">Courtesy Flickr Creative Commons user morrissey<\/p><\/div>\n<p>Closely mirroring trends in the economy at large, median compensation for C-level executives at the country\u2019s largest REITs saw a gradual push upward during 2010. The average REIT executive saw a pay increase of 14 percent from 2009 levels, Anthony Saitta, managing director &amp; co-head of the real estate solutions group\u2019s executive compensation team at FTI Consulting, explained during a webinar the company hosted yesterday.<\/p>\n<p>\u201cDuring 2010, executive compensation continued to attract significant shareholder and media scrutiny, particularly in light of the new say-on-pay rules,\u201d Saitta said. \u201cAdditionally, REIT boards and compensation committees had to balance perception concerns with other critical industry factors, such as personnel changes within executive management teams and a number of recent REIT initial public offerings, in determining the most appropriate executive compensation program to attract and retain talent.\u201d<\/p>\n<p>And that compensation program at most REITs often included non-cash items. While 36 percent of the trusts chose to keep base salaries flat, cash bonuses, for example, increased in 2010 by more than 21 percent from the previous year. Additionally, a full 30 percent use stock options as equity compensation. Saitta said the use of these non-cash awards helped incentivize a firm\u2019s long-term health, ensuring that shareholders see the first benefits of increased performance.<\/p>\n<p>Certain sectors also performed better than others, with both the office and industrial areas outperforming other REITs. These two industries have been leading some of the economic recovery, according to Saitta, and already saw pay increases in the 2009 term. The hospitality industry, however, is still working on making its comeback \u2013 both occupancy levels and average daily rates have not yet returned to their pre-2007 levels.<\/p>\n<p>While the 2011 proxy season was the first term when shareholders had a non-binding advisory vote on compensation, the next year may spell changes. Those shareholders were, as a group, pleased with performance: Ninety percent voted in favor of a particular REIT\u2019s compensation package, but four disclosure items built into the so-called Dodd-Frank Act will go into effect for the 2012 proxy season. Boards will now be required to disclose pay ratios (CEO pay versus median firm compensation), pay-for-performance policies (the relationship between non-cash compensation and company performance), clawback policies (a requirement to recoup compensation in the event of noncompliance) and hedging policies (disclosure on whether executives use hedging to guard against a decrease in equity compensation).<\/p>\n<p>\u201cReal estate is driven by population growth, job growth and consumer spending,\u201d Saitta told <em>Commercial Property Executive<\/em>. \u201cAs those fundamentals have improved, the market has recognized that. Returns to shareholders have been solid, and that\u2019s filtered down to the executives.\u201d<\/p>\n<p>But the future, he said, is far from certain.<\/p>\n<p>\u201cBoards are going to be looking at the future and will use all factors in their decision making,\u201d he explained. \u201cIf the right decision is to pay executives a certain amount, the new disclosure rules won\u2019t change that. The boards will have to do what\u2019s right for the business.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Closely mirroring trends in the economy at large, median compensation for C-level executives at the country\u2019s largest REITs saw a gradual push upward during 2010.<\/p>\n","protected":false},"author":936,"featured_media":1004030634,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37774,21808,37775,21751,21748,21742,21747,37776,37777,37778],"tags":[],"class_list":["post-1004030632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rc-dividend-yield","category-featured","category-rc-forward-affo-payout-ratios","category-hotel","category-industrial","category-latest","category-office","category-rc-premium-discount-to-nav","category-rc-price-ltm-ffo","category-rc-total-return"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v24.6) - 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