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COMPENSATION DISCUSSION AND ANALYSIS
Approach of this Compensation Discussion and Analysis Section This Compensation Discussion and Analysis, or "CD“CD&A,"” describes our executive compensation program for fiscal year 2015, certain elements of our 2016 program2023 and the executive paycompensation philosophy adhered toused by our Compensation Committee in making executive compensationto make decisions.
We use our executive compensation program to attract, retain and appropriately reward the members of our senior executive management team who lead our Company. In particular, thisteam. This CD&A explains how the Compensation Committee made 20152023 compensation decisions for our senior executive management team, including the following five named executive officers (the "Named“Named Executive Officers"Officers” or "NEOs"“NEOs”):n
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Steven Roth, Chairman and Chief Executive Officer (our "CEO"“CEO”)
nStephen W. Theriot, Chief Financial Officer
nDavid R. Greenbaum, President, New York Division
n;
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Michael J. Franco, Executive Vice President and Chief Investment Officer
nJoseph Macnow,Financial Officer;
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Haim Chera, Executive Vice President—FinanceHead of Retail;
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Barry S. Langer, Executive Vice President—Development and Administration, Chief Administrative OfficerBiographical information forCo-Head of Real Estate; and
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Glen J. Weiss, Executive Vice President—Office Leasing and Co-Head of Real Estate.
These five individuals comprise our Named Executive Officers is availablesenior management team and are referred to in Part III to our Form 10-K forthis Proxy Statement as the year ended 2015, as filed with the SEC.“Senior Executives”. Under theSEC rules and regulations, of the SEC, each year the "Summary“Summary Compensation Table"Table” must disclosereport the salary paid and cash bonus earned during that year. ThisThat table also requires disclosure of all equity-based awards to be reported in the year granted, even if that year is different than the year such compensation was earned. Because thefor which a grant applies. We have historically granted annual incentive equity we grant in any one year is awarded in recognition of performance in the prior year, the SEC's approach requires that we disclose our equity awards granted in respect of 2014 performance on the 2015 line in the Summary Compensation Table. Although we believe the most appropriate disclosure of our executive compensation would combine the annual cash compensation paid in 2015 (for instance) with the equity-based compensation granted in 2016 for 2015 performance, the rules and regulations do not permit that. In other words, we grant our annual incentives and equity-based compensation and make our compensation decisions retrospectively—in the first quarter of a fiscalnew year for the actual performance of an executive in the just-then-completed priormost recently completed year. To more accurately present our compensation information in line with how ourwe make decisions are actually madeabout compensation (as described in more detail below under "—“—Comparison of 2013-20152021-2023 Total Direct Compensation"Direct/
Realizable Compensation”), the following discussion of compensation is with respect todiscusses both the annual incentivesalary and bonus paid with respect tofor a stated year combined withand the equity being granted in the following year for that year (if applicable). We also present (under “—Total Realized Compensation Table”), the closeactual compensation received for 2023, 2022, and 2021. We believe Total Realized Compensation is helpful in evaluating the effectiveness of the pay-for-performance alignment of our compensation program. Shareholder Engagement and Board Responsiveness
At our 2023 Annual Meeting of Shareholders, our say-on-pay proposal received the support of the holders of over 77% of Shares that applicable year after performance has been assessed.Executive Summary
Performance
During 2015,voted on the proposal. Since our 2023 Annual Meeting, we recorded strong financial results while continuingreached out to shareholders representing more than 70% of our simplificationoutstanding Shares (as of December 31, 2023) and focusing strategy.
nWe achieved 10.5% growthspoke with shareholders representing more than 50% of our outstanding Shares. Our Lead Independent Trustee participated in comparable funds from operations per diluted share.
nWe made significant progress implementingconversations with several of our simplificationlargest shareholders.
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In addition to our ESG-focused engagements and focus strategy by spinning offdiscussions in the ordinary course of business, we engaged directly with our strip shopping centersinvestors in various forums including at the BofA 2023 Global Real Estate Conference and malls business into Urban Edge Properties (NYSE: UE) in January 2015 and by selling over $1 billion of non-core or non-strategic assets and by purchasing approximately $850 million of high-quality assets in New York City (including approximately $700 million in Manhattan).
the NAREIT REITweek NYC conference.
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OverviewTotal Direct/Realizable and Total Realized Compensation are calculated as described in this Compensation Discussion and Analysis section of
the Proxy Statement. 2023 Total Direct/Realizable Compensation
ApproachCertain key elementsincludes the June 2023 Awards discussed above.
2023 Business Highlights
During 2023 we made significant progress executing on our goals and positioning Vornado for future growth, accomplishing the following strategic initiatives:
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We continued the redevelopment of THE PENN DISTRICT, positioning Vornado to capitalize on the enormous opportunity we have on the West Side of Manhattan, including:
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Completion of the redevelopment of PENN 1 (2.6 million square feet).
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Nearing completion of PENN 2 (1.8 million square feet as expanded), on top of Penn Station, New York’s main transportation hub—the largest rail hub in North America.
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Continued leasing of retail space at the newly expanded Long Island Rail Road Concourse.
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Completed demolition of Hotel Pennsylvania, with plans to develop a premier office tower on the site.
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Opened restaurants or finalized leases with leading food and beverage operators including Blue Ribbon Sushi & Steak, The Avra Group, Noho Hospitality’s Bar Primi, Sunday Hospitality, Roberta’s Pizza, Anita Gelato and Los Tacos No. 1.
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Finalized lease with LifeTime Fitness and Pickleball.
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We and the Rudin family completed agreements with Citadel Enterprise Americas LLC (“Citadel”) and with an affiliate of Kenneth C. Griffin, Citadel’s Founder and CEO for a series of transactions relating to 350 Park Avenue and 40 East 52nd Street, including full building leases for both buildings and to potentially form a joint venture to build a new 1.7 million square foot office tower.
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We entered a joint venture with Blackstone Inc. and Hudson Pacific Properties to develop Sunset Pier 94 Studios, a 266,000 square foot purpose-built studio campus on our overall approach to compensation are designed to:nProvide for an annual incentive award that is performance-based with a formulaic thresholdPier 94 in New York City.
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We leased approximately 2.8 million square feet in 2023 (2.2 million square feet at share).
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Financed/Refinanced $800 million of mortgage loans in 2023.
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Entered into $1.2 billion of interest rate swap arrangements and a cap.
nSet a target$950 million 1% SOFR interest rate cap arrangement for our senior management team that 50%the 1290 Avenue of their equity compensation (other than grants subject to time-based vestingthe Americas mortgage loan.
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Completed over $200 million of dispositions in lieu of cash bonus) should be2023, including several non-core retail properties and The Armory Show located in New York.
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We (i) ranked #1 in the
form of performance-based equity awards.
nHave equity ownership guidelinesDiversified Office/Retail REITs in the USA in the Global Real Estate Sustainability Benchmark (“GRESB”), and received the “Green Star” distinction for senior managementthe eleventh consecutive year and our Trustees.
nProvideGRESB’s five star rating, (ii) received the Leader in the Light Award by the National Association for "double trigger" accelerationReal Estate Investment Trusts (“NAREIT”) for diversified REITs for the thirteenth time, and (iii) were recognized as an EPA ENERGY STAR Partner of the vestingYear with the distinction of any unvested equity awards in connection with a changehaving demonstrated nine years of control.As an indication of the positive response of our shareholders to our approach, at our 2015 Annual Meeting approximately 89% of the votes cast on our advisory vote on executive compensation were cast FOR our compensation program. Our Compensation Committee considered the results of the 2015 votes and has continued our compensation program design which it believes embodies shareholder-friendly practices.
sustained excellence.
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Shareholder-Friendly AspectsExecutive Compensation Philosophy
Our compensation program is based on a pay-for-performance philosophy and is designed to incentivize executives to achieve financial and strategic goals that are aligned with the Company’s long-term business strategy and the creation of sustained, long-term value for our shareholders.
The objectives of the Current Program| | | |
WHAT WE DO
| | WHAT WE DON'T DO
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| RETAIN a highly experienced, “best-in-class” team of executives who have worked together as a team for a long period of time and who make major contributions to our success. | |
üPay for Performance. We place a heavy emphasis on performance-based compensation. Our | ATTRACT other highly qualified executives to strengthen that team as needed. | |
| | MOTIVATE our executives to contribute to the achievement of company-wide and business-unit goals as well as to pursue individual goals. | |
| | EMPHASIZE equity-based incentives with long-term performance measurement periods and vesting conditions. | |
| | ALIGN the interests of executives with shareholders by linking payouts under annual bonus plan is formula-driven. Bothincentives to performance measures that promote the minimumcreation of long-term shareholder value. | |
| | ACHIEVE an appropriate balance between risk and maximum amountreward in our compensation programs that may be funded is derived directly from specified quantifications of our Comparable FFO (as defined below) performance. Our annual equity grants are significantly tied to rigorous absolute and relative TSR-performance goals. | | ØNo Golden Parachute for our CEO. Mr. Steven Roth, our CEO, does not have any contractual severance arrangement with the Company. |
üEquity Ownership Guidelines. We require our CEO, other Named Executive Officers and our Trustees to hold equity in the Company equal to 6x, 3x and 5x, respectively, their annual base salaryencourage excessive or retainer.inappropriate risk-taking. |
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ØNo Gross-Ups for Excess Parachute Payments. We have never had any arrangements requiring us to gross-up compensation to cover taxes owed by executives. |
üDouble Trigger Equity Acceleration Upon Change-of-Control. We require a "double trigger" for acceleration of vesting of outstanding grants following a change of control. |
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ØLimited Retirement Benefits. We do not maintain a pension plan. Executives participate in a 401(k) plan and also may participate in an elective deferral plan with no match. |
üIndependent Compensation Consultant. Our Compensation Committee uses the consulting firm of Towers Watson (now Willis Towers Watson) and has determined it is independent. |
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ØNo Excess Perquisites. We have no supplemental executive retirement plans, club memberships or other significant perquisites other than the use of a company car and driver. |
üCompensation Risk Assessment. We conduct an annual compensation risk assessment. |
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ØNo Repricing of Options. Our 2010 Omnibus Share Plan does not permit the repricing of options without shareholder approval. Vornado has never repriced options. |
üClawbacks. We can recover performance-based cash and equity incentive compensation paid to executives in various circumstances. |
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ØNo Hedging or Pledging. Our Trustees and senior executives are prohibited from hedging or engaging in any derivatives trading with respect to Company Shares and none of our Trustees or senior executives has any pledge of their Shares. |
ObjectivesThe following shows the 2023 pay mix for our CEO. 76% of Our Executivehis Total Direct/Realizable 2023 Compensation ProgramWe believe that the quality, skills and dedication of our Named Executive Officers are critical factors that affect the long-term value of the Company. Accordingly, one of the fundamental objectives of our Compensation Committee is to ensure we provide a comprehensive compensation program that aids us in our efforts to attract, retain and appropriately reward a "best-in-class" executive management team. Such a program is critical to our achieving continued success in the highly-competitive commercial real estate industry. To better align the interests of our executive officers with those of our shareholders in a pay-for-performance setting, a significant portion of each executive's total compensation is variable through a combination of performance-based, short- and long-term incentives, which are described in more detail below.
In sum, the objectives of our executive compensation program are to:
nRetain a highly-experienced, "best-in-class" team of executives who have worked together as a team for a long period of time and who make major contributionssubject to our success.
nAttract other highly-qualified executives to strengthen that team as needed.
Company performance.
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The following graphic summarizes the performance periods and outcomes for our recent performance-based equity grants. The performance hurdles for the OPP awards granted in each of 2015, 2016, 2017, 2018 and 2020 and the Performance AO LTIP awards granted in 2019 did not meet the applicable performance condition and accordingly each of those awards were forfeited in their entirety. The 2022 and 2023 performance program lines below show the performance of our regular 2022 LTPP and 2023 LTPP programs, respectively, and do not include the Performance AO LTIPs granted as part of the June 2023 Awards. For purposes of the table below, we measure the Company’s absolute and relative performance under the 2022 and 2023 LTPPs as of December 31, 2023, though the actual number of units that will be earned will depend on actual performance through the end of the applicable measurement period. The “required price to begin earning” set forth below represents the adjusted Share price after reflecting adjustments for the Company’s spin-offs of Urban Edge and JBG Smith.
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Our Performance AO LTIP Units granted in 2019 included a performance condition requiring that our Share price close 10% above the strike price of $62.62 for 20 consecutive trading days before January 14, 2023. The performance condition was not met and consequently the units were forfeited.
Our 2020 OPP Plan provided participants the opportunity to earn equity awards if Vornado achieved certain absolute total shareholder returns and/or outperformed a benchmark weighted index consisting of other office and retail real estate companies. As of March 30, 2023, the end of the 2020 OPP measurement period, Vornado’s total shareholder return over the measurement period was -52.08% compared to a -8.60% return for the benchmark weighted index during such period and accordingly all awards under the 2020 OPP Plan were forfeited in their entirety.
Our 2021 OPP Plan provides participants the opportunity to earn equity awards if Vornado achieves certain absolute total shareholder returns and/or outperforms a benchmark weighted index consisting of other office and retail real estate companies. As of March 31, 2024, Vornado’s total shareholder return over the measurement period was -7.53% compared to a -4.99% return for the weighted index during such period.
Compensation Components
Our Named Executive Officers’ compensation currently has four primary components:
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annual base salary, which includes cash payments and/or equity in lieu thereof;
•
annual incentive award, which includes cash payments and/or equity in lieu thereof;
•
long-term equity incentive, which includes restricted units and long-term incentive performance awards; and
•
development fee pool allocations.
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nMotivateThe overall compensation levels and allocation among these components, excluding any development fee pool allocations, are determined annually by our executives to contribute toCompensation Committee considering the achievementCompany’s performance during the year and a review of company-wide and business-unit goals as well as pursue individual goals.
nEmphasize equity-based incentives with long-term performance measurement periods and vesting conditions.
nAlignthe interestscompetitive market for executive talent. Historically, most of executives with shareholders by linking payouts under annual incentives to performance measures that promote the creation of long-term shareholder value.
nAchieve an appropriate balance between risk and reward in ourtotal compensation programs that does not encourage excessive or inappropriate risk-taking.Our executive compensation program is intended to reward the achievement of annual, long-term and strategic goals of both the Company and the individual executive. In order to achieve these intentions, our executive compensation program includes both fixed and variable components, as well as annual and long-term components, as described below. In particular, for our Chairman and CEO a majority of his compensation has been provided in long-term equity awards. These longer-term, equity-based awards reflect the form of equity compensation subjectCompensation Committee’s desire to multi-year TSR performance (OPP units) and/or time-based vesting provisions designed to ensure that the value of his compensation ultimately realized is based on our share price performance, further aligning his interests with those of the Company and its shareholders.
We believe the effectiveness of our compensation program in creating alignment ofdirectly align management and shareholder interests has contributedand to provide incentives to successfully implement our long-term performance, as evidenced bystrategic objectives.
The compensation program for our TSR forSenior Executives is described in the 10-year period through 2015 of 92.9%, which outperformedtable below.
| | PAY ELEMENT | | | | COMPENSATION TYPE | | | | OBJECTIVE AND KEY FEATURES | |
| | Base Salary | | | | Cash | | | | Objective: To provide appropriate fixed compensation that will promote executive retention and recruitment. Key Features/Actions: •
Fixed Compensation •
No more than $1,000,000 in salary •
No increases to NEO base salaries since 2018 and no increases to CEO base salary in over 20 years | |
| | Annual Incentive Awards | | | | Short-Term Variable Incentive Cash and/or Restricted Equity | | | | Objective: To reward the achievement of financial and operating objectives based on the Compensation Committee’s quantitative and qualitative assessment of the executive’s contributions. All or a portion of earned annual awards may be in restricted units to further align executive’s interests with shareholders. Key Features/Actions: •
Variable, short-term compensation awards •
Aggregate pool only funded upon the achievement of a threshold level of FFO, as adjusted, a key operating metric in the REIT industry •
Aggregate pool capped at 1.75% of FFO, as adjusted •
Allocated based on objective and subjective Company, business unit and individual performance •
Committee can decide to pay out less than the full amount of the funded pool and aggregate 2023 annual incentive awards to Senior Executives was only 1.36% of FFO, as adjusted | |
| | Annual Restricted Equity Grants | | | | Long-Term Variable Incentive Equity | | | | Objective: To align executive and shareholder interests, promote retention with multi-year vesting and provide stable long-term compensation. Key Features/Actions: •
Aligns executive and shareholder interests •
Vest ratably over four years •
Subject to a two-year holding period (regardless of vesting) and a “book-up” event (typically an increase in Share price) to have value | |
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| | Long-Term Performance Plan (Awarded in 2023 for 2022 performance) | | | | Long-Term Variable Incentive At-Risk Equity | | | | Objective: To enhance the pay-for-performance structure and shareholder alignment, while motivating and rewarding senior management for earnings growth and progress on ESG matters as well as for sustained TSR performance based on rigorous operational, absolute and relative hurdles. Key Features/Actions of LTPPs: •
Performance-based equity awards that can be earned based on (i) achievement of certain operational measures (50%) and (ii) relative TSR (50%), in each case with an applicable absolute modifier •
Only provides value to our executives upon the creation of meaningful shareholder value above specified hurdles over applicable performance periods •
Operational measures of FFO per share, as adjusted, and ESG metrics measuring greenhouse emissions reductions, GRESB score and LEED achievements •
50% of the earned payouts vest three years following grant and the remaining 50% vest four years following grant. Earned payouts are also subject to an additional one-year holding period following vesting, or in the case of our CEO, a three-year holding period | |
| | LTIPs (awarded in June 2023) | | | | Long-Term Variable Incentive Equity | | | | Objective: To align executive and shareholder interests and promote retention, with back-ended vesting. Key Features/Actions: •
Aligns executive and shareholder interests •
Vest in two equal installments on each of the 3rd and 4th anniversary of grant date •
Subject to a two-year holding period (regardless of vesting) and a “book-up” event (typically an increase in Share price) to have value | |
| | Performance AO LTIP Units (awarded in June 2023) | | | | Long-Term Variable Incentive At-Risk Equity | | | | Objective: Designed to (1) enhance our pay-for-performance structure by requiring a meaningful and sustained Share price increase before awards have value and (2) motivating and rewarding employees for superior Share price performance. Key Features/Actions: •
Enhances pay-for-performance structure and shareholder alignment •
Motivates and rewards only in instance of superior Share price performance •
Awards only have value if there has been a sustained increase in the Company’s Share price •
Vest 20% on 3rd anniversary of grant date and 80% on 4th anniversary of grant date | |
| | Development Fee Pool | | | | Cash pool based on 40% of actual net development fees received by the Company from third parties | | | | Objective: To incentivize and reward employees for seeking and finding new opportunities to create shareholder value by raising third-party capital for development projects to diversify risk and enhance the Company’s economics, and for retention purposes. Key Features/Actions: •
Development Fee Pool only applies to fees paid by joint venture partners or other third parties to the Company but does not apply to wholly-owned Vornado developments or to any amount attributable to Vornado’s share of a payment made by a joint venture •
Only provides value to our executives upon the creation of meaningful value to the Company through the receipt of development fees from third parties | |
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Pay Mix
We believe that the executive team’s compensation should be tied to Company goals. 76% of the FTSE NAREIT Office Index ("Office REIT") of 68.0% over the same time period. In addition, our TSR for 2015, was –3.9%Chief Executive Officer’s 2023 compensation and was 36.4% for 2014 while that71% of the Office REIT was 0.3% for 2015other NEOs’ average 2023 compensation is variable incentive pay. Approximately 45% of our Chief Executive Officer’s 2023 compensation and 25.9% for 2014. For 2015, we have kept flat our CEO's base compensation, cash incentive and the grant date value of restricted equity awards (as reflected in the "Total Direct Compensation Table" in this proxy statement). In addition, the total dollar value42% of the long-term incentive award potentially earnable ("Notional Amount") for our CEO (and our other Named Executed Officers) was also kept flat for 2015. When makingNEOs’ 2023 compensation decisions, we useis dependent on the Notional Amountachievement of OPP awards as oneobjective performance criteria. The charts below reflect the pay mix of the guideposts for year-over-year changes. We made changes to the terms of the 2016 OPP awards for 2015 performance to conform more closely to the standards for such plans adopted by other companies, including our peers. As a result of these changes, the accounting cost for a grant of the same Notional Amount of outperformance award increased by 26.3% from 2014 to 2015. Consequently, while the actual salaries, bonuses, value of restricted equity awards and the Notional Amounts of outperformance awards were unchanged between 2014 and 2015, the accounting cost for the aggregate compensation for our CEO and other Named Executive Officers increased by 10.7% and 6.0%, respectively, from 2014 to 2015. The larger increase in cost for our CEO as opposed to our other Named Executive Officers is due to the fact that a greater percentage of his compensation consists of OPP awards as opposed to other Named Executive Officers.NEOs, based on their 2023 Total Direct/Realizable Compensation.
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How Pay Aligns with Performance2015
2023 Performance Metrics Considered For 20152023 compensation, among the subjective and objective factors considered both objectively and subjectively, were the changes in the Company's and the applicable division's operating and performanceCompany’s results during the year (Comparable EBITDA, Comparable(NOI at share and FFO, and FFO)as adjusted, among other financial results), our TSR for the year,leasing volume, development progress, financing activities, progress on ESG goals, and the factors mentioned below. Increases “NOI” (or decreases in pay and allocations for 2015, 2014 and 2013Net Operating Income) means total revenues less operating expenses including our share of various compensation elements to our Named Executive Officers were based, in part, upon the results of our review of these factors. EBITDA means earnings before interest, taxes, depreciation and amortization, Comparable EBITDA means EBITDA as adjusted to exclude discontinued operations and exclude non-comparable gains and losses including impairments. FFOpartially owned entities. “FFO” means funds from operations as defined by the National Association of Real Estate Investment Trusts (NAREIT). Comparable FFO (or CFFO)NAREIT. “FFO, as adjusted,” means FFO as adjusted to exclude non-comparable gains and losses, impairments and non-real estate-related items.certain items that impact the comparability of period-to-period FFO. Each of these metrics is providedare presented in our regular annual and quarterly reports as well aswith reconciliations to the most comparable metric presented in accordance with GAAP. Although they
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are non-GAAP metrics, we use these metricsthem in making our compensation decisions because they facilitate meaningful comparisons in operating performance between periods and among our peers. TSR means our total shareholder return (including dividends) for a given period.
Key Year-Over-Year Comparisons
Our Comparable EBITDA, Comparable FFO, FFO and TSR for 2015, 20142023 was 39.2% while that of our NY REIT Peers (comprised of Empire State Realty Trust, Inc., Paramount Group, Inc. and 2013 are presented below.Metrics Considered
SL Green Realty Corp.) was 30.8% and that of the FTSE NAREIT Office Index was 2.0%. | | | | | | |
| | 2015
| | 2014
| | 2013
|
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Comparable EBITDA | | $1,533 million | | $1,447 million | | $1,387 million |
Comparable FFO | | $915 million | | $825 million | | $752 million |
FFO | | $1,039 million | | $911 million | | $641 million |
1-year TSR | | (3.9%) | | 36.4% | | 14.7% |
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In determining annual incentive and long-term equity compensation levels earned for 2015, our Compensation Committee sought to find a balance among (i) appropriately rewarding the significant operational achievements by the Company during the year, as highlighted above, (ii) ensuring annual incentive, long-term equity and total compensation levels were in line with the prevailing competitive market and adequate to address our recruitment and retention needs
We operate in a highly-competitivehighly competitive commercial real estate industry where we actively compete for business opportunities and executive talent. In determining compensation levels for 2023, our Compensation Committee did not attribute a numeric weight to any one factor, but sought to find a balance among (i) appropriately recognizing the significant operational and development achievements during the year, (ii) maintaining total compensation levels in line with the highly competitive market for executive talent and at a level adequate to address our recruitment and retention needs and (iii) maintaining a balanced compensation program designed to foster alignment of management and shareholder interests in a manner that reflectsconsistent with evolving market "best practices"“best practices” as well as views of our shareholders. No numerical weight is attributed to any one factor.Alignment of Pay with Performance
Our Compensation Committee made compensation decisions for 2015 in line with our pay-for-performance philosophy.
nBase salaries were maintained at 2014 levels to focus on the performance-oriented components of compensation.
nFor our CEO, approximately 57% of his equity grants were in the form of performance-based equity.
nFor our other NEOs, in the aggregate, approximately 57% of their equity grants (other than grants in lieu of cash bonus which are described in footnote (2) of the Summary Compensation Table) were in the form of performance-based equity.
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To demonstrate the alignment of our compensation philosophy with performance, the following chart illustrates how our CEO's Total Direct Compensation (as defined below under "—Comparison of 2013-2015 Total Direct Compensation") compares to our Comparable FFO for the applicable year.
(Comparable FFO in thousands)
To demonstrate how the mix of our executive pay is designed to align the executive's and shareholders' interests, the following charts show the mix of our CEO's and other NEOs' pay among cash, annual grants of time-vesting equity, equity in lieu of cash bonus and performance-based equity.
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CEO Pay Mix (2015) | | Other NEO Pay Mix (2015) |
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How We Determine Executive Compensation
Our Compensation Committee, comprised solely of independent Trustees, determines compensation for our Named Executive Officers and is comprised of three independent trustees, Michael Lynne (Chairman), Daniel R. Tisch and Dr. Richard R. West.other senior executives. Our Compensation Committee exercises independent judgment with respect toon executive compensation matters and administers our equity incentive programs, including reviewing and approving equity grants to our executives pursuant to our 2010under the 2023 Omnibus Share Plan.Plan (the “2023 Omnibus Plan”) and the 2019 Omnibus Share Plan (the “2019 Omnibus Plan” and, together with the 2023 Omnibus Plan, the “Omnibus Plans”). Our Compensation Committee operates under a written charter adopted by the Board, a copy of which is available on our website (www.vno.comwww.vno.com/governance/committee-charters).
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We generally make our compensation decisions generally in the first quarter of a fiscal year. These decisions cover the prior yearyear’s performance and are based on the prior year's performance by the Company and/or division or functional area and applicable executive.contributions. In addition, in the first quarter of a fiscal year, we establish that year'syear’s performance threshold for our formula-based, short-term annual incentive program.
Our decisions on compensationprogram and in the first quarter of 2023 we also established the metrics and applicable threshold, targets and maximum levels for our Named Executive Officers2023 LTPP.
Our compensation decisions are based primarily upon our assessment of each executive'sexecutive’s leadership, operational performance and potential to enhance long-term shareholder value. For our CEO, this assessment is made by the Compensation Committee. For our other Named Executive Officers, this assessment is initially made by our CEO subject to the review and approval of the Compensation Committee. Our annual, short-term incentive program provides for a minimum performance threshold for, and a cap on, a bonus pool comprising the aggregate dollar value offor annual incentive awards we can make to our senior executive management team. We believe that this method, as opposed to an entirely formulaic method of determining compensation, provides us with the ability to adjust compensation based on a number of performance factors affecting an individual executive within a formulaic cap. It also has the added benefit of reducing the risk to the Company that could potentially be associated with entirely formulaic compensation decisions.Senior Executives. Key factors we consider when making annual compensation decisions include: actual performance compared to the financial, operational and strategic goals established for the Company or the executive'sexecutive’s operating division at the beginning of the year;division; the nature, scope and level of responsibilities; the contribution to the Company'sCompany’s financial and operational results, particularly with respect to keyon metrics such as Comparable EBITDA,NOI at share, FFO, Comparable FFO, as adjusted, TSR and TSRleasing activity for the year; and the executive's contribution to the Company'sCompany’s ESG efforts, including progress on our Vision 2030 Plan and other ESG goals; contribution to our substantial ongoing development projects; financing and investment activities; capital allocation; and contribution to the Company’s commitment to corporate responsibility, including success in creating a culture of unyielding integrity and compliance with applicable laws and our ethics policies. These factors may be considered on an absolute and/or relative basis with respect to other companies or indices.
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In determining individual pay levels, and opportunities, we also consider each executive's current salary and prior-year bonus (or annual incentive award), the value of an executive's equity stake in the Company, andexecutive’s historical compensation, the appropriate balance between incentives for long-term and short-term performance and the compensation paid to the executive'sexecutive’s peers within the Company. WeAs discussed below, we also consider competitive market compensation paid by other companies that operate in our business or that compete for the same talent pool, such as other S&P 500 REITs, other real estate companies operating in our core markets and, in some cases, private equity firms, investment banking firms and hedge fund and private equity firms.funds. However, we do not formulaically tie our compensation decisions to any particular range or level of total compensation paid to executives at these companies. Furthermore, we consider the actual Total Realized Compensation historically received by our management in determining whether our compensation program meets our goals of alignment with shareholder interests.
In addition, we encourage alignment with shareholders' interestsshareholders through long-term, equity-based compensation. We apportion cash payments and equity incentive awards as we think best in order to provide the appropriate incentives to meet our compensation objectives both individually and in the aggregate for executives and other employees. The factors we consider in evaluating compensation for any particular year may not be applicable to determinations in other years. Typically, our Chairman and CEO receives a higher proportion of his compensation in the form of equity than other Named Executive Officers who, in turn, receive a higher proportion of their compensation in the form of equity than our other employees. This allocation is based on (1) the relative seniority of the applicable executives and (2) a determination that the applicable executives should have a greater proportion of their compensation in a form that further aligns their interests with those of shareholders. We regularly review our compensation program to determine whether we have given the proper incentives to our Named Executive Officers to deliver superior performance on a cost-effective basis and for them to continue their careers with us.
Role of the Corporate Governance and Nominating Committee, the Compensation Committee, the Chairman and CEO The Corporate Governance and Nominating Committee of our Board is responsible for evaluating potential candidates for Chairman and CEO, and for overseeing the development of executive succession plans. The Compensation Committee of our Board (1) reviews and approves the compensation of our executive officers and other employees whose total cash compensation exceeds $200,000 per year, (2) oversees the administration and implementation of our incentive compensation and other equity-based awards, and (3) regularly evaluates the effectiveness of our overall executive compensation program.
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As part of this responsibility, theThe Compensation Committee oversees the design, development and implementation of the compensation program for our Chairman and CEO and our other Named Executive Officers. The Compensation Committee evaluates theCEO performance of our Chairman and CEO and sets his compensation. Our Chairman and CEO and the Compensation Committee together assess the performance of our other senior executives and determineour Compensation Committee determines their compensation, based on the initial recommendations of our Chairman and CEO. The other Named Executive OfficersNEOs do not play a role in determining their own compensation, other than discussing individual performance objectives with our Chairman and CEO.
In support of these responsibilities, members of our senior executive management team, in conjunctionalong with other senior executives, have the initial responsibility of reviewing the performance of the employees reporting to him or herthem and recommending compensation actions for suchthose employees.This process involves multiple meetings among our Chairman and CEO, our
Role of Compensation Consultants/ Peer Group Benchmarking
The Compensation Committee has engaged the services of FTI Consulting, Inc. (“FTI Consulting”), as a compensation consultant, including for 2023 compensation. The Compensation Committee assessed the independence of FTI Consulting in accordance with the NYSE listing standards and our Compensation Committee's compensation consultants. Typically, in the third and fourth quartersconcluded that no conflict of each year, these parties meet to discuss and establish an overall level of compensation for the year and the base compensation for the following year. For 2015, as has been our historical practice, our Chairman and CEO obtained individual recommendationsinterest existed that would prevent FTI Consulting from division heads as to compensation levels for those persons reporting to the division heads. These recommendations are discussed among our Chairman and CEO and the division heads prior to a recommendation being presented toindependently advising the Compensation Committee. For our senior executive management team, other than our Chairman and CEO, recommendations are prepared based upon discussions among the Compensation Committee and our Chairman and CEO. These recommendations are based upon our objectives described above and may include factors such as information obtained from compensation consultants. Our Chairman and CEO discuss these recommendations with our other senior executives in one-on-one meetings. After these discussions, certain allocations or other aspects of compensation may be revised to some degree and the revised recommendations are presented to the Compensation Committee for discussion and review and, ultimately, through a continued process, approval. The compensation of our Chairman and CEO is determined in accordance with a similar process involving direct discussions among the Compensation Committee, our Chairman and CEO and the Compensation Committee's compensation consultants.Role of Compensation Consultants
Our Compensation Committee has retained Towers Watson & Co. ("Towers Watson") as its independent compensation consulting firm to provideis authorized by the Compensation Committee with relevant data concerning the marketplace and our peer group as well as its own independent analysis and recommendations concerning executive compensation. Towers Watson regularly participates in Compensation Committee meetings. Our Compensation Committee has the authorityBoard to set Towers Watson'sFTI Consulting’s compensation and to replace Towers WatsonFTI Consulting as its independent outside compensation consultant or hire additional consultants at any time. Towers Watson regularly participates in Compensation Committee meetings. In 2015, we paid Towers Watson approximately $139,000 in compensation-related fees. In addition, in 2016 Towers Watson merged with Willis Group and is now Willis Towers Watson Public Limited Company ("Willis Towers Watson"). Historically, the Willis Group has provided us with insurance-related services including services to our captive insurance company. In 2015, we paid the Willis Group (now Willis Towers Watson) approximately $923,000 in fees. In light of the acquisition of the Willis Group,
For 2023 compensation decisions, the Compensation Committee reviewed peer compensation information, prepared by FTI Consulting, in connection with its compensation decisions. This peer information was not used to target a particular percentile for our CEO’s 2023 compensation but rather to set an appropriate range of compensation, considering relative size, performance and competitive factors. FTI Consulting reviewed the Company’s 2022 peer group and assessed the independenceindustries, geographies, market capitalization, revenues, among other factors, of Willis Towers Watson pursuantthe peer group relative to SEC rules (including Item 407(e)(3)(iv)the Company and recommended removing two of Regulation S-K)the largest companies, by market capitalization, that were in the 2022 peer group and replacing them with two companies that are more similar in size to the NYSE listing standards and concluded that no conflict of interest exists that would prevent Willis Towers Watson from independently advising the Compensation Committee. In particular,Company.
Following FTI Consulting’s recommendation, the Compensation Committee considered a presentation it received from Willis Towers Watson that described Willis Towers Watson's policies and procedures to prevent or mitigate conflicts of interest. The Compensation Committee also reviewed and was satisfied that there was no business or personal relationships between members ofadopted the Compensation Committee and the individuals at Willis Towers Watson supporting the Compensation Committee. The Compensation Committee considered that Willis Towers Watson reports directly to the Chair of the Compensation Committee and that the Compensation Committee has the authority to set Willis Towers Watson's compensation and to replace Willis Towers Watson as its independent outside compensation consultant or hire additional consultants at any time. Finally, the Compensation Committee considered other
following peer group for 2023.
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factors relevant to Willis Towers Watson's independence from management, including all
Vornado’s Total Capitalization as of October 31, 2023 was slightly above the median of the factors set forthpeer group and close to the 75th percentile in the NYSE listing standards.For 2015 compensation decisions, Willis Towers Watson prepared, among other reports, an analysis of compensation levels and performance using the metrics described below at the following companies that it identified as peer companies within the context of the executive pay philosophy of the Compensation Committee: American Tower Corporation; Boston Properties, Inc.; CB Richard Ellis Group, Inc.; Equity Residential; General Growth Properties, Inc.; HCP, Inc.; Health Care REIT, Inc.; Host Hotels & Resorts, Inc.; Kimco Realty Corporation; ProLogis; Public Storage; Simon Property Group, Inc.; SL Green Realty Corp.; and Ventas, Inc. revenue.
Our Compensation Committee has elected to use the foregoing executive compensation peer group, asbecause the competitive landscape in which we compete for investment capital and executive talent is comprised of other publicly-traded REITs as well as real estate operating companies. Additionally, as many of our competitors in the markets in which we operate, particularly with respect to our New York division, are asset managersprivate equity and investment management firms not structured as REITs and private entities such as real estate opportunity funds, sovereign wealth funds and pension funds, among others, our Compensation Committee, from time to time, has also considered compensation levels and trends amongstamong our non-public competitors as obtained from surveys and other proprietary data sources. Consistent with prior years, the Compensation Committee reviewed and discussed the analyses prepared by Willis Towers Watson,FTI Consulting and determined that the analyses were useful in indicating that the compensation opportunities awarded to executive officers are in line with the prevailing competitive market. Furthermore, realized awards duly reflectTotal Realized Compensation metrics align with the performance of the Company and the shareholder value created.From time to time, the Company also engages the services of FTI Consulting, Inc., as a compensation consultant, to provide assistance with gathering and presenting third-party data used in determining industry-or market-specific results.
Analysis of Risk Associated with Our Executive Compensation Program Our Compensation Committee has discussed the concept of risk as it relates to our executive compensation program and the Compensation Committee does not believe our executive compensation program encourages excessive or inappropriate risk-taking for the reasons stated below. We structure our pay to consist of both fixed and variable compensation. The fixed portion (base salary) of compensation is designed to provide a base level of income regardless of our financial or shareShare price performance. The variable portionselements of compensation (cash incentive and equity) are designed to encourage and reward both short- and long-term corporate performance. For short-term performance, cashannual incentives are awarded based on the formulaic fundingthresholds of our annual incentive pool and assessments of performance during the prior year. For long-term performance, our options, restricted shares, restricted units, awards under our outperformance plans ("OPP") and other equity awards generally vest over three, four or five years and onlyyears. Awards of LTPP Units, OPP Units, Performance AO LTIP Units, appreciation-only OP units (“AO LTIP Units”) or options have value (inonly if our Share price increases over time (and, in the case of awards such as options,LTPP Units, if we meet specified operational goals). Awards of restricted units or OPP awards) orcan be redeemed for Shares only increase in value (in the case of awards such as restricted shares) if our Share price increases over time. Furthermore, with regard to grantsAwards of restricted units require a two-year holding period (regardless of vesting). For LTPP and OPP awards, made since 2013, we require members of senior managementour Named Executive Officers to hold the equity received with respect toon earned and vested awards for one additional year after they have vested. We believe that these variable elementsvested (or three years, in the case of compensation are a sufficient percentage of total compensation to provide incentives to executives to produce superior short- and long-term corporate results, whileour CEO for the fixed element is also sufficiently high that the executives are not encouraged to take unnecessary or excessive risks in doing so.LTPP). We and our Compensation Committee also believe that the mix of formulaic criteria and a non-formulaic evaluation of historic performance provides an incentive for our executives to produce superior performance without the distorting effects of providing a pre-determinable compensation award based on the performance of only one division or business unit or upon other results that may not reflect the long- or short-term results of the Company as a whole.
result in long-term value creation. | | | | | | | | | | |
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As demonstrated above, our executive compensation program is structured to achieve its objectives by (i) providing incentives to our Named Executive Officers to manage the Company for the creation of long-term, shareholder value, (ii) avoiding the type of disproportionately large, short-term incentives that could encourage our Named Executive Officers to takethe taking of excessive risks that may not be in the Company'sor sacrificing long-term interests,value, (iii) requiring our Named Executive Officersexecutives to maintain a significant investment in the Company and (iv) evaluating annually an array of performance criteria in determining executive compensation rather than focusing on a singular metric that may encourage unnecessary risk-taking. We believe thisThis combination of factors encourages our Named Executive Officersexecutives to manage the Company prudently.
Elements of Our Compensation Program
Our Named Executive Officers' compensation currently has three primary components:
nannual base salary;
nannual incentive awards, which include cash payments and/or awards of equity; and
nlong-term equity incentives, which may include restricted units, stock options and long-term incentive performance unit awards such as those awarded under our OPP.
The overall levels of compensation and the allocation among these components are determined annually by our Compensation Committee based upon an analysis of the Company's performance during the year and a review of the prevailing competitive market for executive talent in which we operate. Historically, a substantial majority of the total compensation for our CEO has been in the form of long-term equity awards, including performance-based awards subject to relative performance thresholds such as those awarded under our OPP. These longer-term awards further the Compensation Committee's desire to directly align management and shareholder interests and to provide incentives for each executive to successfully implement our long-term strategic goals.
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The components of our compensation program for our senior management can be described as shown in the chart below. As noted below,each component of compensation has been capped.
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| | Objectives | | Key Features |
| | | | |
Base Salary | | n
Provide an appropriate level of fixed compensation that will promote executive retention and recruitment.
| | n
Fixed compensation.
n
No executive receives in excess of $1,000,000 of salary.
|
| | | | |
Annual Incentive Awards | | n
Reward achievement of financial and operating goals for a year based on the Compensation Committee's quantitative and qualitative assessment of the executive's contributions to that performance.
n
Typically provide that a portion of such award be in the form of restricted equity to further align an executive's interests with that of shareholders.
| | n
Variable, short-term cash compensation and time-based equity awards.
n
Funded upon the achievement of a threshold CFFO level.
n
Aggregate pool capped at 1.25% of CFFO.
n
Allocated based on objective and subjective Company, business unit and individual performance.
n
Committee can decide to pay out less than the full amount of the funded pool
|
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Annual Restricted Equity Grants | | n
Align the interests of our executives with those of our shareholders.
n
Promote the retention of executives with multi-year vesting.
n
Provide stable long-term compensation as a balance to a risk-taking approach.
| | n
Equity awards that vest ratably over four years.
n
Awards are capped by the awards available to be issued under our Omnibus Share Plan.
n
Members of senior management receive Restricted Units which require a two-year holding period (regardless of vesting) and a "book-up" event (typically an increase in Share price) to have value.
|
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Performance-Based, Long-Term Incentive Program | | n
Promote the creation of long-term shareholder value as the awards will only have value if an appropriate TSR is achieved.
n
Align the interests of our executives with those of our shareholders.
n
Promote the retention of executives with awards that are subject to multi-year vesting after they are earned.
| | n
Variable, performance-based long-term equity compensation.
n
Amount is earned based on a three-year period of absolute and relative TSR performance.
n
Vests over three years once (and if) they are earned.
n
Award capped on value of a fixed number of units and availability under our Omnibus Share Plan.
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Elements of Our Compensation Program
Base salaries for our Named Executive Officers are established based on the scope of their responsibilities, taking into account the competitive market compensation paid by other companies for similar positions as well as salaries paid to the executives'of peers within the Company and any applicable employment agreement. In
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accordanceCompany. Consistent with our pay-for-performance philosophy, we structure an executive's annual base salary to beis a relatively low percentage of total compensation. ThereExcluding temporary salary reductions implemented during 2020 due to the impact of the COVID-19 pandemic on our business, there were no increases in our Named Executive Officers'Officers’ base salary levels for 2015 over those of 2014, nor2023 and there have therenot been any increases in our NamedChief Executive Officers'Officer’s base salary levels for the past severalin over 20 years.
Our Compensation Committee has established an annuala short-term incentive program for the senior executive management team that formulaically ties a maximum award pool to achieving a Comparablelevel of FFO, performance threshold.as adjusted, of at least 65% of the prior year, and set a cap for the aggregate pool of bonuses to the Senior Executives at 1.75% of FFO, as adjusted. The Company views and, we believe our shareholders view, Comparablebelieves FFO, as adjusted, is one of the key operating metrics within the REIT industry and we believe, a primary driver of long-term TSR performance. We use FFO, as adjusted, as the primary metric for our annual incentive awards rather than total FFO. FFO, as adjusted, excludes certain items that impact the comparability of period-to-period FFO, and thus the Compensation Committee believes it provides a better metric than total FFO for assessing management’s performance. Under our annual compensation program, members of our senior executive management team, including all of our Named Executive Officers, will have the ability toparticipants may earn annual cash incentive payments and/or equity awards if and only if the Company achieves Comparable FFO, ofas adjusted, is at least 80%65% or more of the prior year's Comparable FFO. In the event that the Company fails to achieve Comparableyear’s comparable FFO, of 80% or more of the prior year's Comparable FFO, no incentive payments would be earned or paid under the program.as adjusted. Moreover, even if the Company does achieve the stipulated Comparable FFO, as adjusted, performance requirement, under the annual incentive program, the Compensation Committee always retains the right, consistent with best practices, to elect to reduce or make no payments under the program. Our
For 2023, the maximum pool available for annual incentive bonuses to Senior Executives was $9.5 million (1.75% of FFO, as adjusted) but nevertheless, due to our relative performance, our Compensation Committee has electedgranted a reduced aggregate amount of $7.5 million in annual bonuses to use ComparableSenior Executives, equal to 1.36% of FFO, as the primary metric for our annual incentive award rather than total FFO. Comparable FFO excludes the impact of certain non-recurring items such as income or loss from discontinued operations, the sale or mark-to-market of marketable securities or derivatives and early extinguishment of debt, restructuring costs and non-cash impairment losses, among others, and thus theadjusted.
As described in more detail below under “—Current Year Compensation Committee believes it provides a better metric than total FFO for assessing management's performance for the year.Aggregate incentive awards earned under the annual short-term incentive program by our senior executive management team are subject to a cap of 1.25% of Comparable FFO earned by the Company for the year, withDecisions”, individual award allocations under the programare determined by the Compensation Committee based on an assessment of individual and overallCompany performance. Performance criteria evaluated by the Compensation Committeeused when determining individual incentive awards under the annual incentive program, assuming the Company has achieved the required Comparable FFO performance threshold necessary for our senior executive management team to be eligible to earn incentive awards under the program, will include, among others, the following:
nTSR, both on an absolute basis and relative to the performance of the peer group and the REIT industry;
n
•
Leasing performance and occupancy levels;
n
•
Execution of our development and redevelopment projects;
•
Capital markets performance and maintenance of a strong balance sheet;
n
•
Acquisitions, dispositions and financing activity;
•
Same store EBITDA;
nNOI at share;
•
FFO and FFO, as adjusted;
•
Implementation and achievement of goals, including expense control and adherence to budget;budget, and
n ESG initiatives, including sustainability goals; and
•
Achievement of business unit and/or departmental objectives.
Any awards
earned under the annual incentive program are payable in cash and/or equity awards, generally in the first quarter of each year for the prior
year'syear’s performance.
Long-Term Equity Incentives
Compensation is typically awarded to our Named Executive Officers in the form of long-term equity incentives issued under our 2010 Omnibus Share Plan (as may be amended, the "2010 Plan") through performance-based equity awards such as those that may be earned under our OPP and future out-performance plans, grants of stock options and restricted units. The granting of equity awards links a Named Executive Officer's
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Long-Term Equity Incentives
Long-term equity compensation is typically issued under our Omnibus Plans through performance-based awards, such as our LTPP Units (awarded in 2023 for 2022 performance), or Performance AO LTIP Units (awarded in June 2023), and grants of time-based restricted units. Equity awards link compensation directly to the performance of our Share price. We believe this encourages our NEOs to make business decisions with an ownership mentality.OPP Awards. Our OPP has beenNEOs were awarded LTPP Units and time-based restricted LTIP units in January 2023 on an approximately 50/50 basis for 2022 performance. Other employees received awards of time-based restricted units for 2022 performance. Our NEOs and a broad group of employees also received Performance AO LTIP Units and time-based restricted units in June 2023. Our LTPP program and June 2023 grants were developed with the guidance and input of FTI Consulting Inc. (a(the Compensation Committee’s independent compensation consultant retained by the Company) and Willis Towers Watson. Changes made in 2016consultant).
Description of Awards
2023 LTPP
In January 2023 we granted LTPP Units to our OPP wereSenior Executives with respect to 2022 performance. 50% of the LTPP Units may be earned based on advice of FTI Consulting, Inc. with the concurrence of Willis Towers Watson. These performance-based awards are earnedour relative TSR performance over a three-year period whichending in January 2026 and 50% may be earned based on the achievement of specified operating/ESG performance measures over a one-year period ending December 31, 2023, in each case with further modifiers based on the Company’s absolute TSR over a three-year period.
The relative TSR portion of the LTPP is then followed by back-end vesting requirements (during years three, fourequally bifurcated based on our performance relative to (1) the Dow Jones U.S. Real Estate Office Index (“DJ Office Index”) and five)(2) a custom Northeast Peer Group index comprised of six other companies with office real estate portfolios concentrated in the Northeast United States. We included this Northeast Peer Group index in order to act asmore closely link a retention deviceportion of the LTPP to our TSR performance relative to companies that are most comparable to us and provide a strong incentivethat operate in similar markets.
Vesting of the LTPP units is generally subject to continued employment with us, and satisfaction of the performance hurdles.
The following tables describe the structure of the 2023 LTPP granted to our Senior Executives for 2022 performance, with payouts between performance levels subject to straight-line interpolation. As of December 31, 2023, based on our one-year TSR relative to the executives to increase shareholder value long after they performedDJ Office Index and the services for whichNortheast Peer Group index, our performance would have placed us in the 93rd Percentile and 64th Percentile, respectively.
Dow Jones U.S. Real Estate Office Index Relative TSR Component (25% of Total Award)
| | | Level | | | | Percentage of Target
Amount Earned | | | | Relative TSR (Three Years) | | |
| | | Threshold | | | | | | 50% | | | | | 25th percentile of DJ Office Index companies | | |
| | | Target | | | | | | 100% | | | | | 50th percentile of DJ Office Index companies | | |
| | | Maximum | | | | | | 200% | | | | | 75th percentile or greater of DJ Office Index companies | | |
Northeast Peer Group Relative TSR Component (25% of Total Award)(1)
| | | Level | | | | Percentage of Target
Amount Earned | | | | Relative TSR (Three Years) | | |
| | | Threshold | | | | | | 50% | | | | | 33rd percentile of Northeast Peer Group companies | | |
| | | Target | | | | | | 100% | | | | | 50th percentile of Northeast Peer Group companies | | |
| | | Maximum | | | | | | 200% | | | | | 66th percentile or greater of Northeast Peer Group companies | | |
(1)
The Northeast Peer Group index is comprised of the following companies: Boston Properties, Inc., Brandywine Realty Trust, Empire State Realty Trust, Inc., JBG Smith Properies, Paramount Group, Inc. and SL Green Realty Corp.
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Operational Performance Component (50% of Total Award)
The operational component of our annual performance-based equity awards were initially granted. In particular, the awards provide for immediate cancellation if the executive voluntarily leaves or is terminated with cause (and, in either case, such person is no longer providing servicesmeasures our performance against four objective criteria over a one-year performance period, which remain subject to the Company or any of its affiliates as an employee, trustee or otherwise), excluding certain outstanding awards held by retirement eligible executives and employees above the age of 65 (or above the age of 60 with at least 20 years of service to the Company). Furthermore, we requireabsolute TSR modifier based on our executive officers (as defined in accordance with SEC rules, "Executives") to hold the equity received with respect to earned and vested awards for one additional year after they have vested.Our OPP is designed to provide compensation in a "pay for performance" structure. Awards under the OPP are a class of units (collectively referred to as "OPP Units") of the Company's operating partnership, Vornado Realty L.P., issued under our 2010 Plan. If the specificabsolute TSR performance objectives of the OPP are achieved, the earned OPP Units become convertible into Class A common units of the operating partnership (and ultimately into Shares) following vesting, and their value fluctuates with changes in the value of our Shares. If the performance objectives are not met, the OPP Units are cancelled. Generally, unvested OPP Units are forfeited if the executive leaves the Company, except that OPP Units vest automatically on death. OPP Units are intended to also provide recipients with better income tax attributes than grants of options. With regard to awards under our OPP, participants have the opportunity to earn compensation payable in the form of equity if and only if we outperform a predetermined TSR and/or outperform the market with respect to relative TSR over a three-year performance period, as determined at the end of the third year. Specifically, awards under our OPP may potentially be earned if the Company (i) achieves a TSR above that of the SNL US REIT Index (the "Index") over a three-year performance period (the "Relative Component"), and/or (ii) achieves a TSR level greater than 21% (over the three-year performance period) (the "Absolute Component"). To the extent awards would be earned under the Absolute Component but the Company underperforms the Index by more than a specified margin, such awards earned under the Absolute Component would be reduced (and potentially fully negated)described below. The FFO per Share, as adjusted, target was set in January 2023 based on our internal budget forecast for 2023 performance and the degree to whichESG targets were set in consultation with our senior management and sustainability team. The following table lists the Company underperformsfour performance criteria, the Index. In certain circumstances, if the Company outperforms the Index, but awards would not otherwise be earned under the applicable weightings and targets and actual 2023 performance in each of these categories.
![[MISSING IMAGE: tbl_award-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-045234/tbl_award-pn.jpg)
Absolute Component, awards may still be earnedModifiers
Awards under the Relative Component. Moreover,TSR Component of the 2023 LTPP are subject to reduction (but not increase) if the extent awardsCompany’s aggregate three-year TSR is less than 12%, with a maximum reduction of 30% of units that would otherwise be earned under the Relative TSR Component butif the Company fails to achieve at least a 3% per annumCompany’s TSR is negative over the three-year measurement period. As of December 31, 2023, our one-year absolute TSR level (6% for years priorperformance would have resulted in no downward reduction.
Awards under the Operational Performance Component of the 2023 LTPP are subject to 2016)reduction (but not increase) if the Company’s aggregate three-year TSR is less than 21%, such awardswith a maximum reduction of 30% of LTPP Units that would otherwise be earned under the RelativeOperational Performance Component would be reduced based onif the Company'sCompany’s TSR is negative over the three-year measurement period. As of December 31, 2023, our one-year absolute TSR performance withwould have resulted in no awards being earned in the event the Company's TSR during the applicable measurement period is 0% or negative, irrespective of the degree to which we may outperform the Index. downward reduction.
Post-Vesting Holding Period
If the designated performance objectives are achieved, OPP Unitsawards earned under the 2022 and 2023 LTPPs will vest 50% on the third anniversary of the grant date and 50% on the fourth anniversary of the grant date. The Chief Executive Officer is required to hold any earned and vested awards for three years following each such vesting date and all other award recipients are also subjectrequired to time-basedhold such awards for one year following each such vesting requirements. This creates, indate. Dividends on awards granted under the aggregate, up to a five-year retention period (plus the additional one-year hold period for Executives) with respect to participants in the OPP. Even after achieving the performance thresholds,LTPPs accrue during the remaining two years until full vesting (plus the additional one-year hold period for Executives), holders will continue to bear the same Share price and total return risk as our shareholders and be subject to the same "book-up" requirements as apply to Restricted Units and which are described below. Share dividend payments on awards issued accrue during theapplicable performance period and are paid to participants if and only ifto the extent that awards are ultimately earned based on the achievement of the designated performance objectives. Furthermore, for
In designing our LTPPs, we carefully selected performance criteria across important financial and TSR goals and we also incorporated ESG goals, demonstrating the
2016 OPP, ifemphasis that the
maximum award is earned (through any combination of the RelativeCompany places on ESG matters and
Absolute Components), the number of units actually awarded will be based on the Share price which cause the award to be fully earned. In prior years, the number of units actually earned was based on the highest 30-day average of the Share price achieved during a 120-day measurement period preceding the end of the three-year performance period.
| | | | | | | | | | |
| | | 42 | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 31 | | |
The following charts show some of the key components of our awards of OPP Units and, for illustration purposes only (and not as a projection of actual performance), present our most recent awards (made in 2016) as if they had been fully earned at January 10, 2019.
Earning and Vesting of OPP Awards
In addition, senior executive officers, including all NEOs, are required to hold their earned and vested OPP Units for one year following vesting.
Allocation of Wealth Created
On an absolute total shareholder return basis, our 2016 OPP is designed to award management with equity at the rate of 2% for every dollar of shareholder value created after returning the first 21% of value created to shareholders over a three-year performance period subject to a $50 million cap (if the full amount of the authorized OPP pool is actually awarded). While the earning of OPP awards not only requires performance under the Absolute Component, but also the Relative Component, for presentation purposes the table below is simplified to present only the results derived under the Absolute Component. Using this simplified format, the table below illustrates the rate at which OPP unitholders will share in the increases in shareholder value above the OPP initial share price along with shareholders and other unitholders.
Growth in TSR
| | | | | | | | | | |
Participation Percentage
in Shareholder Value
Creation under Terms of
the 2016 OPP for:
| | 0% to 21%
| | 21% to 35%
| | Above 35%
| |
|---|
| | | | | | | | | | | |
Shareholders and unit holders | | | 100 | % | | 98 | % | | 100 | % |
OPP Unitholders | | | 0 | % | | 2 | % | | 0 | % |
| | | | | | | | | | | |
Stock Options. None of our Named Executive Officers (or any other participant in our OPP) was awarded stock options for 2015, 2014 or 2013 performance. The most recent option award to such executives was in 2011 for 2010 performance. Executives who do not receive OPP awards may receive awards of stock options. Stock option awards issued under our 2010 Plan provide our executives the opportunity to purchase Shares at an exercise price determined on the date of grant. Historically, our stock option awards have either been in the form of at-the-money stock options, whereby the option exercise price is equal to the market price of Shares on the date of grant, or in the form of premium stock options, whereby the option exercise price is established at a level above the market price of Shares on the date of grant. In both instances, the market price of Shares must increase to a level above the option exercise price in order for the executives to achieve any value from their stock option awards. Generally, the stock options vest and become exercisable in equal annual installments over a four- or five-year period beginning one year after the date of grant, and remain exercisable for a period of ten years from the date of grant. Our 2010 Plan (i) prohibits the granting of in-the-money stock options and (ii) prohibits, without shareholder approval, the repricing of outstanding stock options that have fallen out of the money. Recipients of stock options do not receive any dividends paid on Shares on their outstanding option awards.
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| | 32 | | | | VORNADO REALTY TRUST | | | | 20162024 PROXY STATEMENT |
| | | | | | | | | | |
aligning Senior Executives’ compensation with such priorities. We also included a range of performance periods that, taken together, aim to account for the complexities of operating our business over both the short-term and the long-term.
Restricted Shares and Units. "Restricted shares"
“Restricted units” (which we also refer to as “LTIPs”) are grants of Shares issuedlimited partnership interests in the Operating Partnership under our 2010 Plan thatOmnibus Plans. These units generally vest in three or four equal annual installments beginning approximately one year after the grant date. "Restricted units" are grants of limited partnership interestsand include a two-year holding requirement. The restricted units granted in Vornado Realty L.P., our operating partnership through which we conduct substantially all of our business. These units also generallyJune 2023, however, vest in three or fourtwo equal annual installments beginning approximately one year afteron the 3rd and 4th anniversaries of the grant date, andrespectively, subject to the recipient’s continued employment with the Company as of such date, with each vesting tranche subject to an additional one-year post vesting transfer restriction.
Vested restricted units are exchangeable on a one-for-one basis into Vornado Realty L.P.'s Class A common units inthe Operating Partnership’s Units under certain circumstances. These circumstances, which principally include the requirement that Vornado Realty L.P. must have gone through certain tax "book-up"“book-up” events for the Operating Partnership have occurred whereby sufficient profits havebook gain has been specially allocated to the restricted units so that they have the same per unit capital account (and value)value as Class A common units.Units. In addition there is a two-year holding requirement. Vornado Realty L.P.'sto the limitation on exchangeability, the ability to receive the same liquidation value as Class A common units canUnits also is dependent on sufficient amounts of book gain being specially allocated to the restricted units. Book gain is only eligible to be redeemed for Sharesspecially allocated to the capital account of a restricted unit on a one-for-one basis (or forbook-up event to the equivalentextent aggregate book gain exceeds aggregate book loss since the issuance of the restricted unit, which generally corresponds to appreciation in the value in cash atof the Company's option) with only limited restrictions,assets of the Operating Partnership during such as a 60-day waiting period between the time that a redemption notice is given and the date that Shares may be delivered. Restricted units are intended to also provide recipients with better income tax attributes than restricted shares and unlike option grants, grants of restricted units do not have a term at which they expire.period. During the restricted period, each restricted share or restricted unit entitles the recipient to receive payments from the Company equal to the dividends on one Share. Restricted equity awards further contribute in aligning management and shareholder interests, and the multi-year vesting requirements ranging from three to five years aid in our efforts to retain our executives and key employees over the long term. Further, our
Our Compensation Committee believes that restricted equity awardsunits are a key component of our long-term incentive program because they offer recipients a balancedlong-term incentive that is similar to restricted shares with more favorable U.S. federal income tax treatment under current law. We believe that the use of restricted units has (i) enhanced our equity-based compensation package overall, (ii) advanced the goal of promoting long-term equity ownership by our management, (iii) not adversely impacted dilution as compared to restricted shares, and (iv) further aligned the interests of our management with the interests of our shareholders.
| | | VORNADO REALTY TRUST | | | | 43 | | |
June 2023 Awards
Background Factors
Recent changes to our compensation program because incorporatingreflect macro factors that have had a direct impact on our business:
•
Since the onset of the COVID-19 pandemic in early 2020, office REITs, including Vornado, have faced major challenges due to the dramatic increase in remote and hybrid work policies. In addition, over the past couple of years, we have faced a significant increase in interest rates coupled with high inflation. As a result of these and other factors, the capital markets for office properties have been adversely impacted and our stock price decreased substantially from 2019 to early 2023.
•
These factors resulted in several years of our performance equity awards failing to meet the specified performance hurdles and being forfeited. In addition, any time-based equity awards held by employees were worth substantially less than at the applicable grant date.
•
Due to these operational challenges, equity forfeitures/decreases and the very tight job market, a number of key employees, including at the Executive Vice President and Senior Vice President levels, left the Company from 2021 through early 2023 and we faced the very real prospect of additional departures.
•
Moreover, as described in more detail in this proxy statement, beginning in 2019 we initiated an important management succession process and promoted a new generation of Company leaders.
Given the challenging operating environment over the past few years and the substantial decrease in the value of equity awards received by the new senior management team, the Compensation Committee believed it was necessary to consider making significant grants to the senior management team and a broad group of other employees to promote retention and further align the award recipients with shareholder returns over the next few years. Additionally, given the long timelines associated with the real estate business and several of our projects, such as the PENN District and 350 Park Avenue developments, the Compensation Committee believed it was critical that we take steps to ensure employee continuity, especially at the senior management level.
In order to obtain sufficient share capacity to make equity grants that would accomplish these retention goals and incentivize shareholder returns, the Company sought and obtained shareholder approval at the 2023 Annual Meeting of Shareholders for the 2023 Omnibus Plan. In conversations with major shareholders leading up to the 2023 Annual Meeting of Shareholders and thereafter, the shareholders were supportive of the Compensation Committee’s contemplated equity grants and provided general feedback on the structure of the grants which was incorporated in the actual award grants made by the Compensation Committee on June 29, 2023 (the “June 2023 Awards”).
June 2023 Awards Structure
•
Over 40% of the June 2023 Awards were granted to employees who are not NEOs
•
Mix of 2.4 million time-based restricted units (“LTIPs”) of Vornado Realty L.P. (the “Operating Partnership”) and 14.4 million performance-conditioned appreciation-only Operating Partnership units (“Performance AO LTIP Units”) (which are economically similar to performance-based options)
◦
Based on the 2023 Omnibus Plan’s weighting of each full award that delivers the full value of one Share or Operating Partnership Unit counting as one Share equivalent, and each award of an option to acquire our Shares (or other securities that require the payment of an exercise price or deduction of a strike price) counting as one-half of a Share equivalent, the award was comprised of 25% time-based LTIPs and 75% Performance AO LTIP Units
•
Back-ended vesting provisions to promote retention
◦
LTIPs vest in two equal installments on the 3rd and 4th anniversaries of the grant date (except in the event of a qualifying termination), with each tranche subject to an additional one-year post-vesting lockup
◦
20% of the Performance AO LTIP Units vest on the 3rd anniversary of the grant date and the remaining 80% vest on the 4th anniversary of the grant date (except in the event of a qualifying termination)
•
In order for the Performance AO LTIP Units to be fully exercisable (subject to time-based vesting), the Share price must increase 75% above $16.87, the grant date Share price
| | | 44 | | | | VORNADO REALTY TRUST | | |
•
Performance AO LTIP Units require sustained Share performance until the actual conversion date for the units to maintain value
Importantly, in consideration of the June 2023 Award grants, the Compensation Committee did not grant any equity awards in January 2024 and does not intend to make equity award grants to NEOs in January 2025.
The LTIPs are a class of units of the Operating Partnership that, following the occurrence of certain events and upon vesting, are convertible by the holder into an equivalent number of Class A units of the equity compensation mix,Operating Partnership (“Class A Units”). Class A Units of the Operating Partnership are redeemable by the holder for cash or, at the Company’s election, Shares of the Company on a one-for-one basis. The LTIPs will vest in two equal installments on the 3rd and 4th anniversaries of the grant date, respectively, subject to the recipient’s continued employment with the Company as opposedof such date (except in the event of a qualifying termination), with each vesting tranche subject to an equity compensation program comprised solelyadditional one-year post-vesting transfer restriction. The LTIPs are entitled to receive the same distributions as paid on the Company’s Shares.
The Performance AO LTIP Units are a class of awardsOperating Partnership units and each Performance AO LTIP Unit is potentially convertible into a number of Class A Units until the tenth anniversary of the grant date, subject to performance-basedsatisfaction of the vesting requirements, ensuresand performance conditions described below, determined by reference to the excess of the closing price per Share on the date of conversion over $16.87, the closing Share price on the grant date.
The Performance AO LTIP Units will vest with respect to 20% on the 3rd anniversary of the grant date, and the remaining 80% will vest on the 4th anniversary of the grant date, subject to the recipient’s continued employment with the Company (except in the event of a qualifying termination). Conversion of the Performance AO LTIP Units is subject to the following performance conditions:
•
No Performance AO LTIP Units are earned if the Applicable Price (defined below) is less than $21.0875 per Share (a 25% increase above the grant date Share price).
•
At an Applicable Price of $21.0875 per Share, 33% of the Performance AO LTIP Units are earned.
•
At an Applicable Price of $25.3050 per Share (a 50% increase above the grant date Share price), 67% of the Performance AO LTIP Units are earned.
•
At an Applicable Price of $29.5225 per Share (a 75% increase above the Grant Date Share price), 100% of the Performance AO LTIP Units are earned.
•
Linear interpolation applies for Applicable Prices between $21.0875 and $25.3050 and between $25.3050 and $29.5225.
•
“Applicable Price” means the highest average consecutive 20-trading day closing Share price during the period commencing on the grant date and ending on the earlier of (i) the date on which the Performance AO LTIP Units are converted or (ii) the ten-year anniversary of the grant date.
| | | VORNADO REALTY TRUST | | | | 45 | | |
Development Fee Pool
Background Factors
Our team continues to pursue major projects that will enhance the long-term value of our portfolio. They are also evolving our business model to enable us to compete and succeed better in today’s environment by spreading risk and partnering with like-minded entities on development projects. These projects require a portionparticular set of each executive's equityexpertise and skills, and the Compensation Committee sought to design a component of compensation retains value evenspecifically to retain and incentivize our team.
In doing so, the Compensation Committee considered several factors:
•
Large development projects in New York City are extraordinarily complex and require a depressed marketlong, intensive period of time to complete, often taking 7-10 years from conception to stabilization (e.g., 220 Central Park South), and require highly specialized knowledge of the NYC zoning process, building regulations and construction expertise, as well as financing and leasing expertise.
•
These development projects, while potentially very profitable, are also extraordinarily capital intensive and generally entail significant risk. In order for us to undertake large development projects that may last close to a decade, the Company must maintain a best-in-class development team and be confident that it will be able to retain that strong team throughout the development process.
•
Maintaining a world-class development team in-house, rather than outsourcing development projects to third parties, provides key advantages including allowing for seamless communication among our development, leasing, financing and senior management teams, and provides executivesus with greater control. This results in higher quality projects at better yields and significantly lower costs and risk to shareholders.
•
It often may be beneficial to the Company to enter into joint ventures with third-party investors that can provide capital for developments and enable the Company to leverage its skills, enhance its economics and diversify its risk.
The Compensation Committee believes that it is important for the Company to have a baselinecompensation tool it can use to reward employees for these large, long-term development projects where the potential reward is clear to employees and is not dependent on our Share price, which is generally outside of valueour control, and certainly outside the control of the development team. In addition, we are often competing for talent with private developers that lessenscan offer profit-sharing opportunities and the likelihoodability for employees to participate in fees. Thus, in order to incentivize joint ventures with third-parties, reward employees’ dedication to these large development projects, and encourage retention of our team members, in December 2023, the Compensation Committee established a new compensation pool (the “Development Fee Pool”).
Development Fee Pool Structure
•
Comprised of not more than forty percent (40%) of all net development fees received by the Company and its affiliates from third parties with respect to the 350 Park Avenue development (the “350 Park Avenue Project”) and from future development projects.
◦
The Development Fee Pool only applies to fees paid by joint-venture partners or other third parties but does not apply to wholly-owned Company developments. “Net development fees” excludes any amounts attributable to the Company’s share of a payment made by a joint venture.
•
Upon the closing of the 350 Park Avenue transaction in the first quarter of 2023, the Company received an initial $25 million installment of development fees for the 350 Park Avenue Project. Based on the Company’s anticipated 36% interest in the 350 Park Avenue Project joint venture which, if formed, will bear the cost of the development fee, $16 million of such development fee is attributable to third parties. Accordingly, $6.4 million (representing 40% of $16 million) was available in the Development Fee Pool and, on December 15, 2023, the Compensation Committee approved cash payments to Messrs. Roth, Franco, Langer and Weiss of $2.2 million, $1.4 million, $1.4 million and $1.4 million, respectively, from the Development Fee Pool in connection with their extraordinary efforts in sourcing and completing the complex 350 Park Avenue transaction.
•
The Compensation Committee expects that executivesfuture distributions from the Development Fee Pool may also be allocated to non-NEOs that work on and support our new developments.
| | | 46 | | | | VORNADO REALTY TRUST | | |
•
Because of the large scale and duration of development projects, the Compensation Committee expects that Development Fee Pool allocations will take unreasonable risks to keep their market-based performance equity award vehicles "inonly be made on an episodic basis and that they will not be an annual occurrence.
•
All Development Fee Pool allocations must be approved by the money."Compensation Committee and, consistent with historical practice, the material terms of all joint venture transactions, including any development fee arrangements, must be approved by our Board of Trustees.
Nonqualified Deferred Compensation Plans We maintain two nonqualified deferred compensation plans, the Vornado Realty Trust Nonqualified Deferred Compensation Plan ("(“Plan I"I”) and the Vornado Realty Trust Nonqualified Deferred Compensation Plan II ("(“Plan II"II”). Plan I and Plan II are substantially similar, except that Plan II, which applies to deferrals on and after January 1, 2005, is designed to comply with the deferred compensation restrictions of Section 409A of the Internal Revenue Code, of 1986, as amended. Employees having annual compensation of at least $200,000 are eligible tocan participate in Plan II, provided that they qualify as "accredited investors"are “accredited investors” under securities laws. Members of our Board of Trustees are also eligible to participate. To participate, an eligible individual must make an irrevocable election to defer at least $20,000 of his or her compensation (whether cash or equity) per year. Participant deferrals are always fully vested. The Company is permitted tomay make discretionary credits to the Plans on behalf of participants but as yet has not done so.so to date. Deferrals are credited with earnings based on the rate of return of specific security investments or various "benchmark funds" selected by the individual,“benchmark funds”, some of which are based on the performance of the Company'sCompany’s securities.Participants may elect to have their deferrals credited toin a "Retirement Account"“Retirement Account” or a "Fixed“Fixed Date Account."” Retirement Accounts are generally payable following retirement or termination of employment. Fixed Date Accounts are generally payable at a time selected by the participant, whichdate that is at least two full calendar years after the year for which deferrals are made. Participants may elect to receive distributions as a lump sum or in the form of annual installments over no more than 10 years. In the event of a change of control of the Company, all accounts become immediately payable in a lump sum. Plan I also permits a participant to withdraw all or a portion of his or her accountstheir account at any time, subject to a 10% withdrawal penalty.
| | | | | | | | | | |
| | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 33 | | |
| | | | | | | | | | |
Retirement and 401(k) Plans
We offer a 401(k) Retirement Plan to all of our employees in which we provide matching contributions (up to 75% of the statutory maximum but not more than 7.5% of cash compensation) that fully vest after five years of employment. We do not havesponsor any other retirement plan. Retirement plans are not a factor in our current compensation determinations.
Perquisites and Other Compensation We provide our Named Executive Officers with certainselect perquisites that we believe are reasonable and in line with the prevailing competitive market. These perquisites include supplemental life insurance and an allowance for financial counseling and tax preparation services for certain Named Executive Officers.executives. Additionally, due to the location of our corporate offices in New York City and the extensive business-related travel requirements, we provide some of our Named Executive Officers, we provide certain of our Named Executive OfficersSenior Executives with the use of a car and/or driver. Providing a car and driver allows these executive officers to use their travel time efficiently and productively for business purposes, including (i) telephonic meetings and (ii) visiting our properties and meeting with our tenants. Accordingly, we believe providing these benefits serves the best interests of our shareholders as it allows our executives to continue to focus on Company matters while traveling. While providing a car and driver does provide incidental personal benefit to the executive, the cost of this personal benefit constitutes only a small percentage of the executive's total compensation. Nevertheless, thepurposes. The amounts disclosed in this proxy statement for car and driver costs include the entire value of the benefit, both business purpose and personal.personal use.
Equity Ownership GuidelinesIn order to
To further foster the strong ownership culture among our senior executive management team and ensure the continued direct alignment of management and shareholder interests, and consistent with emerging corporate governance trends, we have adopted executive equity ownership guidelines requiring that our NEOs and other members of our senior executive management team maintain a minimum ownership level of Shares or related Company equity.level. The equity ownership requirements (comprised of common Shares(Shares and certain securities convertible or redeemable for Shares) for our executives are as follows:| | | |
| Chairman and CEO | | | 6 times his annual base salary | |
| | All Other Executive Officers | | | 3 times their annual base salarysalaries | |
Executive officers have five years from the date of becoming an executive officer to satisfy the ownership requirement. All of our Named Executive Officers satisfy these guidelines.
| | | VORNADO REALTY TRUST | | | | 47 | | |
We have also adopted equity ownership guidelines for members of our Board of Trustees.Board. Under the equity ownership guidelines, adopted for our Board of Trustees, all non-employee Trustees are required to maintain a minimum ownership level of Shares equal tohaving a value at least five times their annual cash retainer.retainers. Non-employee Trustees have five years from the time of initial election to satisfy the guidelines. All non-employee Trustees currently satisfy these guidelines or are expected to satisfy these guidelines. Comparison of 2013-20152021-2023 Total DirectDirect/Realizable CompensationUnder the rules and regulations of the SEC, each
Each year the "Summary“Summary Compensation Table"Table” must disclosereport the salary paid during that year, the annual incentive earned for that year and the equity-based, long-term incentive granted during that year, which for us representsis the equity-based, long-term incentive award earned for theprior year. As discussed above, because year’s performance. Because the equity-based payregular, annual equity we award in the first quarter of each year (similar to the cash bonus paid in the first quarter of each year) was earnedis determined based on performance in the prior year, the SEC'sSEC’s approach prevents usdiffers from showing together all the way we think about pay—salary, annual cash incentive and the Fair Value of equity-based pay—earned for any one year. In order to provide our shareholders with the aggregate amount of compensationearned by each Named Executive Officerpotentially earnable for a given calendar year, we are including below a supplemental Total DirectDirect/Realizable Compensation Table. We believe the Total Direct Compensation Table enables a more meaningful year-over-year compensation comparison than the Summary Compensation Table presented
| | | | | | | | | | |
| | | | | | | | | | |
| | 34 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
| ��� | | | | | | | | | |
later in this proxy statement. The Total DirectDirect/Realizable Compensation Table consists of (i) the actual salary paid for the year, (ii) the annual incentives awarded for the year and (iii) the annual grant date fair valueFair Value of equity grants awarded for service and performance for the year, irrespective of when such amounts ultimately were granted, paid and/or vested. Thisgranted. For 2023, the Total Direct/Realizable Compensation table illustrates onealso includes the June 2023 awards. The table excludes the value of certain perquisites, which are disclosed in the analyses undertaken by ourSummary Compensation Committee in determining each element of our Named Executive Officers' compensation for the particular year in light of such executive's performance during the year.Table. We also believe itthis table demonstrates further the ongoing correlation between the executive'sexecutive’s pay and overall Company performance.
“Fair Value” is determined in accordance with securities and accounting rules (excluding the impact of estimated forfeitures related to service-based vesting conditions).
The principal difference between the Total
DirectDirect/Realizable Compensation Table and the Summary Compensation Table is that the Total
DirectDirect/Realizable Compensation Table achieves
"applesan “apples to
apples"apples” presentation
of both cash and equity-based incentives by showing the value of equity awards in the
performance year to which such grants relate, rather than
in the year in which such grants were
made, as reflected in the Summary Compensation Table.made. Other companies may calculate Total
DirectDirect/Realizable Compensation differently than we do.
Direct The table presented below is not a substitute for, and should be read in conjunction with, the Summary Compensation Table.
| | | 48 | | | | VORNADO REALTY TRUST | | |
Total Direct/Realizable Compensation Table The Total DirectDirect/Realizable Compensation earned by our Named Executive Officers for the 2013-20152021-2023 period was as follows:
| | Name | | | Year | | | Salary
($)(1) | | | Cash
Bonus
($)(2) | | | Grant Date
Fair Value of
Restricted
Unit Awards
in Lieu of
Cash Bonus
($)(3) | | | Grant Date
Fair Value of
Restricted
Unit Awards
as Long-Term
Equity
Compensation
($)(4) | | | Grant
Date Fair
Value of
At-Risk
Multi-Year
Performance-
Based
Awards
($)(5) | | | Other
Compensation
($) | | | | Total
Direct/
Realizable
Compensation
($)(6) | | |
| | Steven Roth | | | 2023 | | | 1,000,000 | | | 3,700,000 | | | — | | | 6,120,625 | | | 8,898,750 | | | — | | | | 19,719,375 | | |
| | 2022 | | | 822,419 | | | 1,500,000 | | | — | | | 3,390,004 | | | 3,390,183 | | | — | | | | 9,102,606 | | |
| | 2021 | | | 824,821 | | | — | | | 753,014 | | | 3,253,265 | | | 4,033,114 | | | — | | | | 8,864,214 | | |
| | Michael J. Franco | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 4,546,750 | | | 6,610,500 | | | — | | | | 15,057,250 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 1,057,502 | | | 1,057,574 | | | — | | | | 4,615,076 | | |
| | 2021 | | | 1,000,000 | | | 1,200,000 | | | 240,912 | | | 964,609 | | | 1,152,534 | | | — | | | | 4,558,055 | | |
| | Haim Chera | | | 2023 | | | 1,000,000 | | | 1,500,000 | | | — | | | 2,331,671 | | | 3,390,000 | | | — | | | | 8,221,671 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 337,518 | | | 337,546 | | | — | | | | 3,175,064 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 309,259 | | | 368,344 | | | — | | | | 3,177,603 | | |
| | Barry S. Langer | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 3,497,500 | | | 5,085,000 | | | — | | | | 12,482,500 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 850,001 | | | 850,082 | | | — | | | | 4,200,083 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 772,479 | | | 926,777 | | | — | | | | 4,199,256 | | |
| | Glen J. Weiss | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 3,497,500 | | | 5,085,000 | | | — | | | | 12,482,500 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 980,018 | | | 980,092 | | | — | | | | 4,460,110 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 889,609 | | | 1,069,365 | | | — | | | | 4,458,974 | | |
| | | | | | | | | | | | | | | | | | | | | | |
Name
| | Year
| | Salary
| | Cash
Incentive
| | Grant Date
Fair Value of
Restricted
Unit Awards
in Lieu of
Cash Bonus
| | Grant Date
Fair Value of
Restricted Unit
Awards as
Long-Term
Equity
Compensation
| | Grant Date
Fair Value of
At-Risk,
Multi-Year
Performance-
Based
OPP Awards(1)
| | Total Direct
Compensation(2)
| |
|---|
| | | | | | | | | | | | | | | | | | | | | | | |
Steven Roth | | | 2015 | | $ | 1,000,000 | | $ | 1,000,000 | | | — | | $ | 3,800,033 | | $ | 5,050,847 | | $ | 10,850,880 | |
| | | 2014 | | $ | 1,000,000 | | $ | 1,001,900 | | | — | | $ | 3,800,051 | | $ | 4,000,000 | | $ | 9,801,951 | |
(CEO from 4/15/13) | | | 2013 | | $ | 1,000,000 | | $ | 20,900 | | $ | 950,086 | | $ | 2,612,563 | | $ | 2,750,000 | | $ | 7,333,549 | |
Stephen W. Theriot | | |
2015 | |
$ |
1,000,000 | |
$ |
250,000 | |
$ |
237,585 | |
$ |
285,013 | |
$ |
378,814 | |
$ |
2,151,412 | |
| | | 2014 | | $ | 1,000,000 | | $ | 251,900 | | $ | 237,555 | | $ | 285,019 | | $ | 300,000 | | $ | 2,074,474 | |
(CFO from 06/01/13) | | | 2013 | | $ | 538,462 | | $ | 359,500 | | $ | 138,627 | | $ | 138,627 | | $ | 145,833 | | $ | 1,321,049 | |
David R. Greenbaum | | |
2015 | |
$ |
1,000,000 | |
$ |
800,000 | |
$ |
950,074 | |
$ |
1,282,517 | |
$ |
1,704,661 | |
$ |
5,737,252 | |
| | | 2014 | | $ | 1,000,000 | | $ | 801,900 | | $ | 950,101 | | $ | 1,282,583 | | $ | 1,350,000 | | $ | 5,384,584 | |
| | | 2013 | | $ | 1,000,000 | | $ | 820,900 | | $ | 950,086 | | $ | 807,556 | | $ | 850,000 | | $ | 4,428,542 | |
Michael J. Franco | | |
2015 | |
$ |
1,000,000 | |
$ |
811,043 | |
$ |
712,578 | |
$ |
1,187,571 | |
$ |
1,578,390 | |
$ |
5,289,582 | |
| | | 2014 | | $ | 1,000,000 | | $ | 815,857 | | $ | 712,546 | | $ | 1,187,538 | | $ | 1,250,000 | | $ | 4,965,941 | |
Joseph Macnow | | |
2015 | |
$ |
1,000,000 | |
$ |
500,000 | |
$ |
712,578 | |
$ |
831,282 | |
$ |
1,104,873 | |
$ |
4,148,733 | |
| | | 2014 | | $ | 1,000,000 | | $ | 501,900 | | $ | 712,546 | | $ | 831,265 | | $ | 875,000 | | $ | 3,920,711 | |
| | | 2013 | | $ | 1,000,000 | | $ | 520,900 | | $ | 712,565 | | $ | 593,804 | | $ | 625,000 | | $ | 3,452,269 | |
| | | | | | | | | | | | | | | | | | | | | | | |
(1)- The information provided includes the value of grants of restricted units in lieu of cash salary for services that are rendered in the year indicated and are awarded in the first quarter. Mr. Roth elected to receive 80% of his cash salary for 2022 and 2021 in the form of restricted units with Grant Date Fair Values of $622,419 and $624,821 respectively, which are reflected in this column.
(2)
For 2023, includes Development Fee Pool allocations of $2.2 million for Mr. Roth and $1.4 million for each of Messrs. Franco, Langer and Weiss. Mr. Roth elected to receive restricted units in lieu of his cash bonus for 2021 and Mr. Franco elected to receive 20% of his 2021 cash bonus in the form of restricted units. These units were awarded in the first quarter of the next year.
(3)
Represents the grant date fair valueGrant Date Fair Value of restricted units granted in lieu of cash bonuses for services that are rendered in the year indicated and are awarded in the first quarter of the next year.
(4)
For 2023, represents the Grant Date Fair Value of restricted units awarded in June 2023. For 2022 and 2021, represents the Grant Date Fair Value of restricted units awarded in the first quarter of the next year.
(5)
For 2023, represents the Grant Date Fair Value of each Named Executive Officer's allocationOfficer’s Performance AO LTIPs awarded in 2016, 2015June 2023. For 2022, represents the Grant Date Fair Value of each Named Executive Officer’s award of LTPP Units in 2023 for 2022 performance. For 2021, represents the Grant Date Fair Value of each Named Executive Officer’s award of LTPP Units in 2022 for 2021 performance.
(6)
Does not include the value of certain perquisites such as supplemental life insurance or automobile benefits provided to certain of our Named Executive Officers.
| | | VORNADO REALTY TRUST | | | | 49 | | |
Comparison of Total Realized Compensation with Total Direct/Realizable Compensation
The following table illustrates compensation awarded to and 2014,earned by each of the Named Executive Officers for service and performance from 2021 through 2023. This table is prepared on the same basis as the “Total Direct/Realizable Compensation Table” except that the value actually realized from the respective performance-based compensation earned each applicable year is shown instead of the accounting cost of what was awarded. Our Compensation Committee believes that “Total Realized Compensation” is an important metric to consider when determining whether our compensation program achieves its goals of alignment with our actual Share performance.
The amounts reported below meaningfully differ from the amounts determined under SEC rules and reported in the “Summary Compensation Table.” This table is not a substitute for, and should be read in conjunction with, the “Summary Compensation Table.”
Total Realized Compensation Table
The Total Realized Compensation and Total Direct/Realizable Compensation earned by our Named Executive Officers for the 2021-2023 period were as follows:
| | Name | | | Year | | | Salary
($)(1) | | | Cash
Bonus
($)(2) | | | Grant Date
Fair Value of
Restricted
Unit Awards
in Lieu of
Cash Bonus
($)(3) | | | Grant Date
Fair Value of
Restricted
Unit Awards
as Long-Term
Equity
Compensation
($)(4) | | | Performance
Awards
(Value
Realized)
($)(5) | | | Total
Realized
Compensation
($)(6) | | | | Total
Direct/
Realizable
Compensation
($)(6) | | |
| | Steven Roth | | | 2023 | | | 1,000,000 | | | 3,700,000 | | | — | | | 6,120,625 | | | 1,528,721 | | | 12,349,346 | | | | 19,719,375 | | |
| | 2022 | | | 822,419 | | | 1,500,000 | | | — | | | 3,390,004 | | | — | | | 5,712,423 | | | | 9,102,606 | | |
| | 2021 | | | 824,821 | | | — | | | 753,014 | | | 3,253,265 | | | — | | | 4,831,100 | | | | 8,864,214 | | |
| | Michael J. Franco | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 4,546,750 | | | 411,913 | | | 8,858,663 | | | | 15,057,250 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 1,057,502 | | | — | | | 3,557,502 | | | | 4,615,076 | | |
| | 2021 | | | 1,000,000 | | | 1,200,000 | | | 240,912 | | | 964,609 | | | — | | | 3,405,521 | | | | 4,558,055 | | |
| | Haim Chera | | | 2023 | | | 1,000,000 | | | 1,500,000 | | | — | | | 2,331,671 | | | 131,645 | | | 4,963,316 | | | | 8,221,671 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 337,518 | | | — | | | 2,837,518 | | | | 3,175,064 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 309,259 | | | — | | | 2,809,259 | | | | 3,177,603 | | |
| | Barry S. Langer | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 3,497,500 | | | 331,231 | | | 7,728,731 | | | | 12,482,500 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 850,001 | | | — | | | 3,350,001 | | | | 4,200,083 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 772,479 | | | — | | | 3,272,479 | | | | 4,199,256 | | |
| | Glen J. Weiss | | | 2023 | | | 1,000,000 | | | 2,900,000 | | | — | | | 3,497,500 | | | 382,194 | | | 7,779,694 | | | | 12,482,500 | | |
| | 2022 | | | 1,000,000 | | | 1,500,000 | | | — | | | 980,018 | | | — | | | 3,480,018 | | | | 4,460,110 | | |
| | 2021 | | | 1,000,000 | | | 1,500,000 | | | — | | | 889,609 | | | — | | | 3,389,609 | | | | 4,458,974 | | |
(1)
The information provided includes the value of grants of restricted units in lieu of cash salary for services that are rendered in the year indicated and are awarded in the first quarter. Mr. Roth elected to receive 80% of his cash salary for 2022 and 2021 in the form of restricted units with Grant Date Fair Values of $622,419 and $624,821 respectively, underwhich are reflected in this column.
(2)
For 2023, includes Development Fee Pool allocations of $2.2 million for Mr. Roth and $1.4 million for each of Messrs. Franco, Langer and Weiss. Mr. Roth elected to receive restricted units in lieu of his cash bonus in 2021 and Mr. Franco elected to receive 20% of his 2021 cash bonus in the form of restricted units. These units were awarded in the first quarter of the next year.
(3)
Represents the Grant Date Fair Value of restricted units granted in lieu of cash bonuses for services that are rendered in the year indicated and are awarded in the first quarter of the next year.
(4)
For 2023, represents the Grant Date Fair Value of restricted units awarded in June 2023. For 2022 and 2021, represents the Grant Date Fair Value of restricted units awarded in the first quarter of the next year.
(5)
For 2023, represents the earned operational performance component of the 2022 LTPP award realized in 2023, valued based on the closing Share price on December 29, 2023. The 2019 Performance AO LTIP performance period ended on January 14, 2023, the 2020 OPP which is a performance-based program under which participants may earn equity compensationPlan performance period ended March 30, 2023 and the 2018 OPP performance period ended in 2021. For each of these awards, if and only if certain absolute and/or relative TSR objectives are achieved over a three-yearthe applicable performance requirements were not satisfied during the performance period.
(2)
(6)
The 2023 amounts in the Total Realized Compensation column excludes earned portions of the Performance AO LTIP Units granted in June 2023, the majority of which do not vest until June 2027. Does not include the value of certain perquisites such as financial counseling and tax services, supplemental life insurance or automobile benefits provided to certain of our Named Executive Officers. The value of the perquisites represents a de minimis component of total compensation.
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2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 35 | | |
| | | 2024 PROXY STATEMENT | | | | | | | | |
Current Year Compensation DecisionsAs explained above, we
We generally make our incentive compensation decisions generally in the first quarter of a fiscal year with respect to performance during the prior year. In addition, in the first quarter of 2016,2023, we established the 20162023 performance thresholds and caps for our formula-based short-term annual incentive program. The compensation levels discussed in this Compensation Discussion and Analysis section are not directly comparable to the amounts presented in the Summary“Summary Compensation Table later in this proxy statement for the reasons discussed above under "How We Determine Executive Compensation" and "Comparison of 2013-2015 Total Direct Compensation."Table.”
In addition, in the discussion below, when we discuss the "Fair Value"“Fair Value” of equity awards, we refer to the "fair value" for such awards“fair value” is determined in accordance with applicable securities and accounting rules (excluding the impact of estimated forfeitures related to service-based vesting conditions). Fair Value is the method used for presenting values for equity awards in our "Summary“Summary Compensation Table"Table” and elsewhere under "Executive“Executive Compensation."” When we discuss the "Market Value"“Market Value” of equity awards, we refer to values based on the market price of our Shares at the date of grant (the values considered by our Compensation Committee in making compensation decisions).
Total Compensation of Our CEOOverall, for 2015, Mr. Roth's total compensation (with equity determinedEquity Determined at Fair Value)
For 2023, Mr. Roth’s Total Direct/Realizable compensation was $10,850,880,$19,719,375 compared to $9,801,951$9,102,606 in the prior year, (a 10.7% increase). However, as discussed earlier, the aggregate value for all ofa 116.6% increase. For 2023, Mr. Roth's compensation other than OPP awards did not increase from 2014 to 2015 and the total dollar value of the long-term incentive award potentially earnable (the "Notional Amount") of the OPP awards made to Mr. Roth for 2015Roth’s Total Realized Compensation was unchanged from 2014. Accordingly, the increase in compensation for Mr. Roth from 2014 to 2015 was due solely to an increase in the accounting cost for OPP awards with the same notional value. For 2014, Mr. Roth's total compensation (with equity determined at Fair Value) was $9,801,951,$12,349,346 compared to $7,333,549$5,712,423 in the prior year, (a 33.7% increase). Our one-year TSR for 2015a 116.2% increase.
For 2022, Mr. Roth’s Total Direct/Realizable compensation was -3.9% and for 2014 was 36.4%. In the aggregate over the two years of 2014 and 2015, our TSR was 31.1%$9,102,606 compared to an increase$8,864,214 in the compensation of our CEO of 48.0% (33.6%, if you exclude the effect of the increaseprior year, a 2.7% increase. For 2022, Mr. Roth’s Total Realized Compensation was $5,712,423 compared to $4,831,100 in the accounting cost forprior year, an 18.2% increase.
For 2021, Mr. Roth’s Total Direct/Realizable compensation was $8,864,214 compared to $9,294,192 in the OPP award made for 2015 despite it havingprior year, a 4.6% decrease. For 2021, Mr. Roth’s Total Realized Compensation was $4,831,100 compared to $5,174,937 in the same Notional Amount as the award for 2014).prior year, a 6.6% decrease.
Mr. Roth'sRoth’s salary, incentives and equity awards were based on an evaluation of those factors previously described and were approved by the Compensation Committee. Among the factors considered, both objective and subjective, were the strategic position of the Company, the changes in the Company'sCompany’s operating and performance metrics over the applicable period (Comparable EBITDA and Comparable(NOI at share, FFO, as adjusted, and FFO per Share), our TSR over the applicable period and the other factors previously described.described, including the Company’s progress on ESG matters, and executing on the redevelopment of THE PENN DISTRICT and the 350 Park Avenue project. With respect to the June 2023 Awards and the Development Fee Pool allocations, the Compensation Committee also took into account the factors described under “June 2023 Awards” and Development Fee Pool” above. These factors were considered as a whole, and no numerical weight was attributed to any particular factor. The substantial majority of Mr. Roth'sRoth’s compensation is in the form of equity to further align his interests with those of our shareholders.
Cash Compensation of Our CEO Mr. Roth has served as our CEO fromsince April 15, 2013. Mr. Roth'sRoth’s base salary of $1,000,000 was established in March 2001 and has remained unchanged since then. In 2023, Mr. Roth's short-term annual incentive (also referred to as his "bonus") for 2015 (awarded in 2016) and for 2014 (awarded in 2015) was paid in cash while in 2013 (awarded in 2014),Roth also received a $2,200,000 allocation from the incentive was principally in the form of equity. His total cash compensation for 2015, 2014 and 2013 was $2,000,000, $2,001,900 and $1,020,900, respectively.Development Fee Pool.
Equity Compensation of Our CEO In June 2023, Mr. Roth's long-term equity incentive compensation award for 2015 performance (granted in 2016) was 165,626 OPP UnitsRoth received a grant of 437,500 LTIPs and 43,025 restricted units (collectively having a Market Value of $9,050,881).2,625,000 Performance AO LTIP Units. The aggregate Fair Value at the date of grant of these OPP and restricted units was $8,850,880 and represents a
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| | 36 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
| | | | | | | | | | |
13.5% increase in the aggregate value of long-term equity grants of restricted and OPP units compared to the prior year. For 2014 performance, Mr. Roth was granted (in 2015)Roth’s long-term equity incentive compensation of 112,920 OPPaward for 2022 performance (granted in 2023) was 319,973 LTPP Units (granted based on the maximum performance level but subject to performance conditions described above) and 32,265181,393 restricted units (collectively having a Market Value of $8,000,053).units. The aggregate Fair Value at the date of grant of these OPPLTPP Units and restricted units was $7,800,051$6,780,187 and represents a 45.5% increase7% decrease in the aggregate valueFair Value of long-term equity grants of restricted and OPP units(excluding the June 2023 Awards) compared to the prior year. For 2013 performance, Mr. Roth was granted (in 2014) long-term equity incentive compensation of 86,314 OPP units and 30,166 restricted units (collectively having a Market Value of $5,500,043). The aggregate Fair Value at the date of grant of these OPP and restricted units was $5,362,563 and represented a 0.001% increase in the aggregate value of long-term equity grants of OPP units and restricted units granted as compared to the prior year. In addition, Mr. Roth's bonus paid for 2013 (awarded in 2014) was paid in restricted units having a Fair Value of approximately $950,000. The number of restricted units awarded to Mr. Roth in lieu of cash bonus for 2013 was 10,952.
Basis for Compensation of Other Named Executive Officers For our other Named Executive Officers (Messrs. Theriot, Greenbaum, Franco, Chera, Langer and Macnow)Weiss), such executive's salary, annual incentive and long-term equity awards were based on an evaluation of those factors previously described and were approved by the
| | | VORNADO REALTY TRUST | | | | 51 | | |
Compensation Committee. Among the factors considered, both objectively and subjectively, were the strategic position of the Company, the changes in the Company's operating and performance metrics over the applicable period (Comparable EBITDA and Comparable(NOI at share, FFO, as adjusted, and FFO per Share), our TSR over the applicable period and the other factors, previously mentioned.including the Company’s ESG progress and the Company’s 350 Park Avenue transaction with affiliates of Citadel Enterprise Americas LLC and an affiliate of Kenneth C. Griffin. With regard to Messrs. Theriot and Macnow,Mr. Franco, we considered these factors as they apply to our Company as a whole as their responsibilities are company-wide.and also considered the Company’s G&A expense management, capital markets and financing activities, acquisitions and dispositions. For Messrs. GreenbaumLanger and Franco,Weiss, we also considered the performance of our overall Real Estate operations, including our leasing activity (in the case of Mr. Weiss) and extensive development activities in THE PENN DISTRICT (in the case of Mr. Langer). For Mr. Chera, we also considered the performance of the Company’s retail assets, for which he is primarily responsible. We also considered these factors as they pertainexecutives’ contributions to the division which such executive heads. Mr. Greenbaum is President—New York DivisionCompany’s overall strategic direction. With respect to the June 2023 Awards and Mr. Franco is Executive Vice President—Chief Investment Officer.the Development Fee Pool allocations, the Compensation Committee also took into account the factors described under “June 2023 Awards” and Development Fee Pool” above. In all cases, these factors were considered as a whole and no numerical weight was attributed to any particular factor. In the aggregate, total compensation (with equity determined at Fair Value) awarded to these Named Executive Officers for 2015 increased by 6% as compared to the prior year. Other Compensation Policies and Practices
All of our equity-based compensation awards are made under our shareholder-approved 2010 Plan.Omnibus Plans. The 20102023 Omnibus Share Plan provided that we were able to issue(our current plan, as amended, the “Omnibus Plan”) provides up to 6,000,00010,800,000 Share equivalents with (a) each award that delivers the full value of a Share (or other securities that have the value equivalent toone OP Unit or one Share when earned or vested) counting as one Share equivalent, and (b) each award of an option, to acquire our Shares (orstock appreciation right or other securitiesaward that by their terms requirerequires the payment of an exercise price or deduction of a strike price)price counting as one-half of a Share equivalent. Following shareholder approval of the 2023 Omnibus Plan, no additional awards can be granted under the 2019 Omnibus Plan, but the terms and conditions of awards previously granted under the 2019 Omnibus Plan remain unchanged. Under the 2010 Plan,Omnibus Plans, the exercise price of each stock option awarded must be (or must have been) no less than the average of the high and low price of our Shares on the New York Stock Exchange ondate that the date granted byaward was granted. Typically, the Compensation Committee. The vast majority of our equity awards are determined and granted in the first quarter of each year at the same time as management and the Compensation Committee conclude their annual evaluation of the performance of our senior executive management team as a group and each executive individually.year. In addition, and from time to time, additional equity awards may be granted in connection with new hires or promotions. We have never repriced options and our 2010 Plan doesOmnibus Plans do not permit repricing of options without shareholder approval.
Employment, Severance and Change of Control AgreementsWe do, from time to time, enter into employment agreements with some members of our senior executive management team. Otherwise, our senior executive management team and other employees serve "at will." Except as may be provided in these employment agreements or pursuant to our compensation plans generally, we have not entered into any separate severance or change of control agreements.
For those of our senior executive management team who have employment agreements, these agreements generally provide for a severance payment (for termination by us without cause or by the executive with good reason (each as
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2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 37 | | |
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defined in the applicable employment agreement and further described below under "Employment Contracts"“Employment Contracts”)) and change of control payment (if employment is terminated following a change of control) in the range of one to threetwo times the applicable executive'sexecutive’s annual salary and incentive. Since 2012, the agreements evidencing awards under the 2010 Plan have provided for the satisfaction of a "double trigger" as a condition to the acceleration of the vesting of any unvested equity awards. These change of control arrangements are designed to compensate management in the event of a termination following a fundamental change in the Company, their employer, and to provide an incentive to these executives to continue with the Company at least through such time. Severance and change of control arrangements do not generally affect other compensation arrangements for a particular period. A more complete description of employment agreements, severance and change of control arrangements pertaining to the Named Executive Officers is set forth under "Employment Contracts"“Employment Contracts” and "Severance“Severance and Change of Control Arrangements."
”
Tax Deductibility of Compensation The tax efficiency of compensation is one of many factors that
enter intothe Compensation Committee considers in the design of our compensation programs. We look at a combination of the rates at which our executives will be taxed and the value of any deduction that we may be entitled to when developing our approach to compensation. We believe that the
limitationlimitations of Section 162(m) of the Internal Revenue Code,
as amended, (which limits the corporate tax deduction for certain executive officer compensation that exceeds $1 million a year) does not apply to most of the compensation we paid to our Named Executive Officers for
20142023 and only a small portion of their compensation may not be deductible due to that limitation.
| | | 52 | | | | VORNADO REALTY TRUST | | |
COMPENSATION COMMITTEE REPORT The Compensation Committee of the Board of Trustees of Vornado Realty Trust, a Maryland real estate investment trust (the "Company"“Company”), has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K of the Securities and Exchange Commission with management and, based on such review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in the proxy statement and incorporated by reference instatement.
The Compensation Committee of the Company's Annual Report on Form 10-K for the year ended December 31, 2015.Board of Trustees:
BEATRICE HAMZA BASSEY
WILLIAM W. HELMAN IV
RAYMOND J. MCGUIRE
DANIEL R. TISCH
| | |
|
|
The Compensation Committee of the Board
of Trustees: |
|
|
MICHAEL LYNNE
DANIEL R. TISCH
DR. RICHARD R. WEST |
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| | 38 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
| | | | | | | | 53 | | |
The following table sets forth (in accordance with the reporting requirements of the SEC) the compensation of each of the Company'sCompany’s Chief Executive Officer, President and Chief Financial Officer and the three other most highly-compensated executive officersNEOs for 2015, 20142023, 2022 and 2013 (the "Named Executive Officers").2021.
Summary Compensation Table
Name and Principal
Position | | | Year | | | Salary
($)(1) | | | Cash and/or
Equity
Bonus
($)(2) | | | Restricted
Share/Unit
Awards
($)(3) | | | Option
Awards
($)(4) | | | Non-
Equity
Incentive
Plan
Compensation
($) | | | Changes in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings ($) | | | All Other
Compensation
($)(5) | | | | Total
($) | | |
Steven Roth Chairman and Chief Executive Officer (Principal Executive Officer) | | | | | 2023 | | | | | | 1,000,000 | | | | | | 3,700,000 | | | | | | 12,900,812 | | | | | | 8,898,750 | | | | | | — | | | | | | — | | | | | | 343,952 | | | | | | | 26,843,514 | | | |
| | | | 2022 | | | | | | 822,419 | | | | | | 1,500,000 | | | | | | 7,286,379 | | | | | | — | | | | | | — | | | | | | — | | | | | | 320,909 | | | | | | | 9,929,707 | | | |
| | | | 2021 | | | | | | 824,821 | | | | | | 753,014 | | | | | | 7,873,225 | | | | | | — | | | | | | — | | | | | | — | | | | | | 312,291 | | | | | | | 9,763,351 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Michael J. Franco
President and Chief
Financial Officer
(Principal Financial
Officer) | | | | | 2023 | | | | | | 1,000,000 | | | | | | 2,900,000 | | | | | | 6,661,826 | | | | | | 6,610,500 | | | | | | — | | | | | | — | | | | | | 67,885 | | | | | | | 17,240,211 | | | |
| | | | 2022 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 2,117,143 | | | | | | — | | | | | | — | | | | | | — | | | | | | 71,790 | | | | | | | 4,688,933 | | | |
| | | | 2021 | | | | | | 1,000,000 | | | | | | 1,440,912 | | | | | | 1,929,213 | | | | | | — | | | | | | — | | | | | | — | | | | | | 71,120 | | | | | | | 4,441,245 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Haim Chera Executive Vice President—
Head of Retail Leasing | | | | | 2023 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 3,006,736 | | | | | | 3,390,000 | | | | | | — | | | | | | — | | | | | | 540,401 | | | | | | | 9,437,137 | | | |
| | | | 2022 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 677,603 | | | | | | — | | | | | | — | | | | | | — | | | | | | 315,780 | | | | | | | 3,493,383 | | | |
| | | | 2021 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 618,515 | | | | | | — | | | | | | — | | | | | | — | | | | | | 188,619 | | | | | | | 3,307,134 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Barry S. Langer Executive Vice President—
Development, Co-Head of Real Estate | | | | | 2023 | | | | | | 1,000,000 | | | | | | 2,900,000 | | | | | | 5,197,582 | | | | | | 5,085,000 | | | | | | — | | | | | | — | | | | | | 25,144 | | | | | | | 14,207,726 | | | |
| | | | 2022 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 1,699,256 | | | | | | — | | | | | | — | | | | | | — | | | | | | 21,254 | | | | | | | 4,220,510 | | | |
| | | | 2021 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 1,044,934 | | | | | | — | | | | | | — | | | | | | — | | | | | | 20,504 | | | | | | | 3,565,438 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Glen J. Weiss
Executive Vice
President—Office
Leasing, Co-Head
of Real Estate | | | | | 2023 | | | | | | 1,000,000 | | | | | | 2,900,000 | | | | | | 5,457,610 | | | | | | 5,085,000 | | | | | | — | | | | | | — | | | | | | 366,295 | | | | | | | 14,808,905 | | | |
| | | | 2022 | | | | | | 1,000,000 | | | | | | 1,506,129 | | | | | | 1,958,974 | | | | | | — | | | | | | — | | | | | | — | | | | | | 332,402 | | | | | | | 4,797,505 | | | |
| | | | 2021 | | | | | | 1,000,000 | | | | | | 1,500,000 | | | | | | 1,279,194 | | | | | | — | | | | | | — | | | | | | — | | | | | | 319,044 | | | | | | | 4,098,238 | | | |
| | | | | | | | | | | | | | | | | | |
Name and
Principal
Position
| | Year
| | Salary
($)
| | Cash
Bonus
($)(1)
| | Restricted
Share/Unit
Awards
($)(2)
| | Option
Awards
($)(2)
| | Non-Equity
Incentive
Plan
Compen-
sation
($)(3)
| | Changes in
Pension Value
and
Non-qualified
Deferred
Compensation
Earnings
($)
| | All Other
Compen-
sation
($)(4)
| | Total ($)
|
|---|
| | | | | | | | | | | | | | | | | | | |
Steven Roth | | 2015 | | 1,000,000 | | 1,000,000 | | 7,800,051 | | — | | 4,626 | | — | | 326,530 | | 10,131,207 |
Chairman and Chief | | 2014 | | 1,000,000 | | 1,001,900 | | 6,312,649 | | — | | — | | — | | 329,912 | | 8,644,461 |
Executive Officer since 04/15/13 (Current Principal Executive Officer) | | 2013 | | 1,000,000 | | 20,900 | | 6,312,540 | | — | | — | | — | | 329,308 | | 7,662,748 |
Stephen W. Theriot | |
2015 | |
1,000,000 | |
250,000 | |
822,573 | |
— | |
— | |
— | |
23,873 | |
2,096,446 |
Chief Financial Officer since | | 2014 | | 1,000,000 | | 251,900 | | 423,086 | | — | | — | | — | | 23,123 | | 1,698,109 |
06/01/13 (Current Principal Financial Officer) | | 2013 | | 538,462 | | 359,500 | | — | | — | | — | | — | | 7,552 | | 905,514 |
David R. Greenbaum | |
2015 | |
1,000,000 | |
800,000 | |
3,582,684 | |
— | |
— | |
— | |
268,508 | |
5,651,192 |
President—New York Division | | 2014 | | 1,000,000 | | 801,900 | | 2,607,642 | | — | | — | | — | | 245,903 | | 4,655,445 |
| | 2013 | | 1,000,000 | | 820,900 | | 2,120,024 | | — | | — | | — | | 247,235 | | 4,188,159 |
Michael J. Franco | |
2015 | |
1,000,000 | |
811,043 | |
3,150,084 | |
— | |
— | |
— | |
32,884 | |
4,994,011 |
Executive Vice President—Chief Investment Officer since 05/21/15) | | 2014 | | 1,000,000 | | 815,857 | | 5,268,974 | | — | | — | | — | | 32,509 | | 7,117,340 |
Joseph Macnow | |
2015 | |
1,000,000 | |
500,000 | |
2,418,811 | |
— | |
— | |
— | |
358,570 | |
4,277,381 |
Executive Vice President— | | 2014 | | 1,000,000 | | 501,900 | | 1,931,368 | | — | | — | | — | | 352,269 | | 3,785,537 |
Finance, Chief Administrative Officer | | 2013 | | 1,000,000 | | 520,900 | | 1,687,566 | | — | | — | | — | | 328,226 | | 3,536,692 |
| | | | | | | | | | | | | | | | | | | |
(1)- The information provided also includes the value of grants of restricted units in lieu of cash salary for services that are rendered in the year indicated and are awarded in the first quarter. For 2022 and 2021, Mr. Roth elected to receive 80% of his cash salary in the form of restricted units with Grant Date Fair Values of $622,419 and $624,821 respectively.
(2)
The information provided includes cash bonuses and the value of grants of restricted units in lieu of cash bonuses for services that are rendered in the year indicated and are awarded in the first quarter of the next succeeding year. PerMr. Roth (at his employment agreement,election) did not receive a cash bonus for 2021. On January 12, 2022, Mr. Roth received restricted units with a Grant Date Fair Value of $753,014 in lieu of his 2021 cash bonus. On January 12, 2022 Mr. Franco isalso received restricted units with a Grant Date Fair Value of $240,912 in lieu of a portion of his 2021 cash bonus. The 2022 amount for Mr. Weiss includes a payment for long-term service with the Company of $6,129 that are paid to receive an additional bonuseach Vornado employee on the five-year anniversary of the employee’s employment commencement date with Vornado, and every fifth year thereafter, in amounts equal to the dividend equivalent with respect to an additional equity awarda net payment of $2,000,000 he is to receive in 2017. This amount was $61,043 in 2015$100 per year of service. For 2023, amounts include Development Fee Pool allocations of $2.2 million for Mr. Roth and $63,957 in 2014.
(2)$1.4 million for each of Messrs. Franco, Langer and Weiss.
(3)
Information presented in this tablecolumn includes the value of grants of Restricted Units in lieu of cash bonuses, Restrictedrestricted units, LTPP Units and OPP Units madeUnit awards granted during the applicable period. Information presented in these columns reflects the aggregate grant date fair valueGrant Date Fair Value of equity awards granted in the applicable fiscal year computed in accordance with FASB ASC Topic 718. Assumptions used in the calculation of these amounts are included in footnote 1412 to our consolidated financial statements included in our Annual Report on Form 10-K (the "Form 10-K") for the applicable fiscal year ended December 31, 2023 as filed with the SEC. Pursuant to the rules and regulations of the SEC, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. Dividends or dividend equivalents are paid on both the vested and unvested portion of restricted share and restricted unit awards. In accordance with applicable SEC rules, amounts shown include the impact of bonuses paid in equity in the year actually granted. For the Named Executive Officers, the Restricted Share/Unit Awards set forth above reflect the grant of equity-based bonusesexclude restricted units that were granted in lieu of cash, where applicable in 2015, 2014 and 2013, respectively,salary or bonuses, which are reflected in the following amounts: Mr. Roth—$0, $950,086“Salary” and $950,005; Mr. Theriot—$237,555 (2015)“Bonus” columns, respectively. Furthermore, as required by SEC rules, the amounts presented in these columns also include the Grant Date Fair Value of both restricted unit awards and $138,627(2014);of performance awards (such as our LTPP and OPP awards). Assuming that maximum performance would have been achieved under our 2023 performance-based equity awards, the value at the grant date of
| | | | | | | | | | |
| | | 54 | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 39 | | |
| | 2024 PROXY STATEMENT | | | | | | | | | |
the awards would each have been as follows: Mr.
Greenbaum—Roth—$
950,101, $950,086 and $950,005;7,218,600; Mr. Franco—$
712,546 (2015) and $712,565 (2014);2,187,500; Mr. Chera—$698,200; Mr. Langer—$1,758,300; and Mr.
Macnow—Weiss—$
712,546, $712,5652,027,200. For 2023, 2022, and
$712,524.(3)- 2021, the Grant Date Fair Value of time-based restricted unit, and LTPP or OPP awards were as follows:
| | | | | Year | | | Restricted Unit Awards
Other than Awards
in Lieu of Salary/Cash Bonus ($) | | | LTPP/OPP
Awards ($) | |
| | Steven Roth | | | 2023 | | | 9,510,629 | | | 3,390,183 | |
| | 2022 | | | 3,253,265 | | | 4,033,114 | |
| | 2021 | | | 3,753,970 | | | 4,119,255 | |
| | Michael J. Franco | | | 2023 | | | 5,604,252 | | | 1,057,574 | |
| | 2022 | | | 964,609 | | | 1,152,534 | |
| | 2021 | | | 907,517 | | | 1,021,696 | |
| | Haim Chera | | | 2023 | | | 2,669,190 | | | 337,546 | |
| | 2022 | | | 309,259 | | | 368,344 | |
| | 2021 | | | 318,515 | | | 300,000 | |
| | Barry S. Langer | | | 2023 | | | 4,347,500 | | | 850,082 | |
| | 2022 | | | 772,479 | | | 926,777 | |
| | 2021 | | | 131,134 | | | 913,800 | |
| | Glen J. Weiss | | | 2023 | | | 4,477,518 | | | 980,092 | |
| | 2022 | | | 889,609 | | | 1,069,365 | |
| | 2021 | | | 365,394 | | | 913,800 | |
(4)
Represents awards for long-term service with the Company.
(4)- Performance AO LTIP units awarded in June 2023.
(5)
See the All Other Compensation table for additional information.
| | | VORNADO REALTY TRUST | | | | 55 | | |
All Other Compensation Table The following table describes each component of the All Other Compensation column in the Summary Compensation Table.
| Name | | | Year | | | Transportation
($)(1) | | | Supplemental
Life Insurance
Premiums ($) | | | Matching 401(k)
Contribution ($) | | | | Total
($) | | |
| Steven Roth | | | | | 2023 | | | | 280,441 | | | | | 41,011 | | | | | | 22,500 | | | | | | | 343,952 | | | |
| | | | 2022 | | | | 258,123 | | | | | 42,911 | | | | | | 19,875 | | | | | | | 320,909 | | | |
| | | | 2021 | | | | 249,880 | | | | | 42,911 | | | | | | 19,500 | | | | | | | 312,291 | | | |
| Michael J. Franco | | | | | 2023 | | | | 36,502 | | | | | 8,883 | | | | | | 22,500 | | | | | | | 67,885 | | | |
| | | | 2022 | | | | 42,657 | | | | | 8,883 | | | | | | 20,250 | | | | | | | 71,790 | | | |
| | | | 2021 | | | | 42,737 | | | | | 8,883 | | | | | | 19,500 | | | | | | | 71,120 | | | |
| Haim Chera | | | | | 2023 | | | | 517,901 | | | | | — | | | | | | 22,500 | | | | | | | 540,401 | | | |
| | | | 2022 | | | | 295,530 | | | | | — | | | | | | 20,250 | | | | | | | 315,780 | | | |
| | | | 2021 | | | | 169,119 | | | | | — | | | | | | 19,500 | | | | | | | 188,619 | | | |
| Barry S. Langer | | | | | 2023 | | | | — | | | | | 8,269 | | | | | | 16,875 | | | | | | | 25,144 | | | |
| | | | 2022 | | | | — | | | | | 5,879 | | | | | | 15,375 | | | | | | | 21,254 | | | |
| | | | 2021 | | | | — | | | | | 5,879 | | | | | | 14,625 | | | | | | | 20,504 | | | |
| Glen J. Weiss | | | | | 2023 | | | | 332,818 | | | | | 10,977 | | | | | | 22,500 | | | | | | | 366,295 | | | |
| | | | 2022 | | | | 301,175 | | | | | 10,977 | | | | | | 20,250 | | | | | | | 332,402 | | | |
| | | | 2021 | | | | 288,567 | | | | | 10,977 | | | | | | 19,500 | | | | | | | 319,044 | | | |
| | | | | | | | | | | | | | | | |
Name
| | Year
| | Use of Car
and Driver
($)(1)
| | Supplemental
Life
Insurance
Premiums
($)
| | Reimbursement
For Medical/
Dental Not
Covered
($)
| | Severance
($)
| | Tax and
Financial Planning
Assistance Per
Employment
Contract
($)
| | Matching
401(k)
Contribution
($)
| | Total ($)
|
|---|
| | | | | | | | | | | | | | | | | |
Steven Roth | | 2015 | | 261,724 | | 46,806 | | — | | — | | — | | 18,000 | | 326,530 |
| | 2014 | | 261,671 | | 50,991 | | — | | — | | — | | 17,250 | | 329,912 |
| | 2013 | | 260,562 | | 51,496 | | — | | — | | — | | 17,250 | | 329,308 |
Stephen W. Theriot | |
2015 | |
— | |
5,873 | |
— | |
— | |
— | |
18,000 | |
23,873 |
| | 2014 | | — | | 5,873 | | — | | — | | — | | 17,250 | | 23,123 |
| | 2013 | | — | | 4,525 | | — | | — | | — | | 3,027 | | 7,552 |
David R. Greenbaum | |
2015 | |
191,481 | |
34,027 | |
10,000 | |
— | |
15,000 | |
18,000 | |
268,508 |
| | 2014 | | 167,454 | | 36,199 | | 10,000 | | — | | 15,000 | | 17,250 | | 245,903 |
| | 2013 | | 169,077 | | 35,908 | | 10,000 | | — | | 15,000 | | 17,250 | | 247,235 |
Michael J. Franco | |
2015 | |
12,000 | |
7,384 | |
— | |
— | |
— | |
13,500 | |
32,884 |
| | 2014 | | 12,000 | | 7,384 | | — | | — | | — | | 13,125 | | 32,509 |
Joseph Macnow | |
2015 | |
187,805 | |
137,765 | |
— | |
— | |
15,000 | |
18,000 | |
358,570 |
| | 2014 | | 182,254 | | 137,765 | | — | | — | | 15,000 | | 17,250 | | 352,269 |
| | 2013 | | 170,116 | | 125,860 | | — | | — | | 15,000 | | 17,250 | | 328,226 |
| | | | | | | | | | | | | | | | | |
(1)- For each applicable fiscal year, each of
the Named Executive Officers wasMessrs. Roth, Chera and Weiss were provided with a car (orand driver and Mr. Franco received a car allowance) and (for Messrs. Roth, Greenbaum and Macnow) a driver.allowance. Each such Named Executive Officer has used the car and driver for both business and personal purposes and the amounts shown for such executive reflect the aggregate incremental cost to the Company for the car, driver and related expenses without allocating costs between business and personal uses. SeeMr. Chera’s 2023 and 2022 amounts also "Certain Other Transactions or Relationships"include $339,492 and $147,008, respectively, for additionalthe aggregate incremental cost to us for Mr. Chera’s personal use of an airplane for transportation to receive medical treatments, and represents the actual amount we paid a company owned by Mr. Roth for Mr. Chera’s use of an airplane owned by such company. For further information regarding certain of our Named Executive Officers.
this arrangement see “Certain Relationships and Related Transactions”.
| | | | | | | | | | |
| | | | 56 | | | | | | |
| | 40 | | | | VORNADO REALTY TRUST | | |
| | 20162024 PROXY STATEMENT |
| | | | | | | | | | |
Grants of Plan-Based Awards in 20152023
The following table lists all grants of plan-based awards to the Named Executive Officers made in 20152023 and their grantGrant Date Fair Value.
| | | | | | | Estimated Future Payouts Under Equity
Incentive Plan Awards(1) | | | Performance AO LTIP Unite Awards(2) | |
| Name | | | Grant Date | | | Threshold
(#) | | | Target
(#) | | | Maximum
(#) | | | All Other
Stock
Awards:
Number of
Units (#)(2) | | | All Other
Option
Awards:
Number of
Securities
Underlying
Options(3) | | | Exercise
or Base
Price of
Option
Award | | | Grant Date
Fair Value
of All Other
Stock
Awards ($)(4) | |
| Steven Roth | | | 1/11/2023 | | | | | 79,993 | | | | | | 159,987 | | | | | | 319,973 | | | | | | 181,393 | | | | | | | | | | | | | | | | | | 3,390,004 | | |
| | 6/29/2023 | | | | | | | | | | | | | | | | | | | | | | | 437,500 | | | | | | 2,625,000 | | | | | $ | 16.87 | | | | | | 6,120,625 | | |
| Michael J. Franco | | | 1/11/2023 | | | | | 24,241 | | | | | | 48,483 | | | | | | 96,964 | | | | | | 56,585 | | | | | | | | | | | | | | | | | | 1,057,502 | | |
| | 6/29/2023 | | | | | | | | | | | | | | | | | | | | | | | 325,000 | | | | | | 1,950,000 | | | | | $ | 16.87 | | | | | | 4,546,750 | | |
| Haim Chera | | | 1/11/2023 | | | | | 7,737 | | | | | | 15,475 | | | | | | 30,949 | | | | | | 18,060 | | | | | | | | | | | | | | | | | | 337,518 | | |
| | 6/29/2023 | | | | | | | | | | | | | | | | | | | | | | | 166,667 | | | | | | 1,000,000 | | | | | $ | 16.87 | | | | | | 2,331,671 | | |
| Barry S. Langer | | | 1/11/2023 | | | | | 19,484 | | | | | | 38,969 | | | | | | 77,940 | | | | | | 45,482 | | | | | | | | | | | | | | | | | | 850,001 | | |
| | 6/29/2023 | | | | | | | | | | | | | | | | | | | | | | | 250,000 | | | | | | 1,500,000 | | | | | $ | 16.87 | | | | | | 3,497,500 | | |
| Glen J. Weiss | | | 1/11/2023 | | | | | 22,464 | | | | | | 44,929 | | | | | | 89,859 | | | | | | 52,439 | | | | | | | | | | | | | | | | | | 980,018 | | |
| | 6/29/2023 | | | | | | | | | | | | | | | | | | | | | | | 250,000 | | | | | | 1,500,000 | | | | | $ | 16.87 | | | | | | 3,497,500 | | |
(1)
Amounts reflect 2023 LTPP awards granted under the 2019 Omnibus Plan. The awards of LTPP Units, if earned, vest 50% in the third year and 50% in the fourth year from the date
fair value. | | | | | | | | | | |
Name
| | Grant
Date
| | All Other Share/Unit
Awards: Number of
Shares of Stock or
Units (#)(1)
| | All Other
Option
Awards:
Number of
Securities
Underlying
Options (#)
| | Exercise
or Base
Price of
Option
Awards
($/Sh)(2)
| | Grant Date
Fair Value of
Awards ($)(3)
|
|---|
| | | | | | | | | | | |
Steven Roth | | 1/14/15 | | 145,185 | | — | | — | | 7,800,051 |
Stephen W. Theriot | | 1/14/15 | | 12,906 | | — | | — | | 585,019 |
David R. Greenbaum | | 1/14/15 | | 57,067 | | — | | — | | 2,632,583 |
Michael J. Franco | | 1/14/15 | | 51,420 | | — | | — | | 2,437,538 |
Joseph Macnow | | 1/14/15 | | 37,809 | | — | | — | | 1,706,265 |
| | | | | | | | | | | |
(1)The information presented in this column represents the number of(2)
Amounts reflect restricted units and OPP units that were granted under the 2019 Omnibus Plan, with respect to awards granted in January 2023, and the Named Executive Officers.2023 Omnibus Plan, with respect to awards granted in June 2023. Restricted units are a separate class of units in Vornado Realty L.P. which will be convertible into Class A common units of Vornado Realty L.P. and will be ultimately redeemable by the Named Executive Officers for, at our option, cash or our Shares on a one-for-one basis. On January 14, 2016, the Named Executive Officers were granted the following numbers ofThe restricted units and OPP Units (which have not been earned), respectively (for services renderedgranted in 2015): Steven Roth, 43,025 and 165,626; Stephen W. Theriot, 5,917 and 12,422; David R. Greenbaum, 25,278 and 55,899; Michael J. Franco, 21,514 and 51,758; and Joseph Macnow, 17,480 and 36,231. A portion of these grants (other than for Mr. Roth) represents the grant of restricted units in lieu of cash bonus. The restricted unitsJanuary 2023 vest ratably over four years.years, unless the recipient is eligible for retirement, in which case the units vest upon retirement. The restricted units granted in June 2023 vest in two equal installments on the 3rd and 4th anniversaries of the date of grant.
(3)
Amounts reflect Performance AO LTIP Units granted under the 2023 Omnibus Plan. The awards of OPPPerformance AO LTIP Units if earned, vest ratably in20% on the third anniversary and 80% on the fourth anniversary of the grant date subject to the following performance conditions. No Performance AO LTIP Units are earned if the Applicable Price (defined below) is less than $21.0875 per share (a 25% increase above the Grant Date Share price). At an Applicable Price of $21.0875 per share, 33% of the Performance AO LTIP Units are earned. At an Applicable Price of $25.3050 per share (a 50% increase above the Grant Date Share price), 67% of the Performance AO LTIP Units are earned. At an Applicable Price of $29.5225 per share (a 75% increase above the Grant Date share price), 100% of the Performance AO LTIP Units are earned. Linear interpolation applies for Applicable Prices between $21.0875 and fifth year from$25,3050 and between $25.3050 and $29.5225. “Applicable Price” means the highest average consecutive 20-trading day closing Share price during the period commencing on the draft date and ending on the earlier of (i) the date on which the Performance AO LTIP Units are converted or (ii) the ten-year anniversary of grant.
(2)No options were granted to the Named Executive Officers in 2015.
(3)grant date.
(4)
The amounts presented in this column represent the full grant date fair value of equity awards (calculated pursuant to FASB ASC Topic 718) granted to the Named Executive Officers in 2015.2023. Pursuant to the rules and regulations of the SEC, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. The grant date fair value,Grant Date Fair Value, including the impact of estimated forfeitures related to service-based vesting conditions, is the amount we would expense in our consolidated financial statements over the award'saward’s vesting schedule. For additional information on our value assumptions, refer to footnote 1412 of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2015,2023, as filed with the SEC.
| | | | | | | | | | |
| | | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 41 | | |
| | | 57 | | |
| | 2024 PROXY STATEMENT | | | | |
Outstanding Equity Awards at Year-End The following tables summarize the number and value of equity awards held at December 31, 20152023 and the aggregate option exercises in 20152023 by, and sharesrestricted unit awards that vested in 20152023 for, the Named Executive Officers. Pursuant to the terms of our omnibus share plans,Omnibus Plans, the exercise price and number of sharesShares underlying options originally made at any date of grant may be adjusted to compensate the holder for special or extraordinary dividends that may be subsequently declared. The following table reflectstables reflect such adjustments.
Name and
Applicable Grant Date | | | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | | Option
Exercise
Price ($) | | | Option
Expiration
Date | | | Number of
Shares or
Units That
Have Not
Vested (#) | | | Market
Value of
Shares or
Units That
Have Not
Vested ($) | | | Equity Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other Rights
That Have Not
Vested (#) | | | Equity Incentive
Plan Awards:
Market or
Payout Value of
Unearned Shares,
Units or Other
Rights That Have
Not Vested ($) | |
| Steven Roth | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6/29/23(1) | | | | | | | | 2,625,000 | | | | | | 16.87 | | | | | | 6/29/2033 | | | | | | 437,500 | | | | | | 12,359,375 | | | | | | | | | | | | | | |
| 1/11/23(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 181,393 | | | | | | 5,124,352 | | | | | | 319,973(3) | | | | | | 9,039,237 | | |
| 1/12/22(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 58,494 | | | | | | 1,652,456 | | | | | | 199,557(4) | | | | | | 5,637,485 | | |
| 1/12/21(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 57,096 | | | | | | 1,612,962 | | | | | | 507,588(5) | | | | | | 14,339,361 | | |
| 3/30/20(2) | | | | | | | | | | | | | | | | | | | | | | | | | | 32,726 | | | | | | 924,510 | | | | | | | | | | | | | | |
| Michael J. Franco | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6/29/23(1) | | | | | | | | 1,950,000 | | | | | | 16.87 | | | | | | 6/29/2033 | | | | | | 325,000 | | | | | | 9,181,250 | | | | | | | | | | | | | | |
| 1/11/23(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 56,585 | | | | | | 1,598,526 | | | | | | 96,964(3) | | | | | | 2,739,233 | | |
| 1/12/22(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 17,344 | | | | | | 489,968 | | | | | | 53,769(4) | | | | | | 1,518,974 | | |
| 1/12/21(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 13,803 | | | | | | 389,935 | | | | | | 125,897(5) | | | | | | 3,556,590 | | |
| 3/30/20(2) | | | | | | | | | | | | | | | | | | | | | | | | | | 10,227 | | | | | | 288,913 | | | | | | | | | | | | | | |
| Haim Chera | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6/29/23(1) | | | | | | | | 1,000,000 | | | | | | 16.87 | | | | | | 6/29/2033 | | | | | | 166,667 | | | | | | 4,708,343 | | | | | | | | | | | | | | |
| 1/11/23(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 18,060 | | | | | | 510,195 | | | | | | 30,949(3) | | | | | | 874,309 | | |
| 1/12/22(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 5,561 | | | | | | 157,098 | | | | | | 17,184(4) | | | | | | 485,448 | | |
| 1/12/21(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 4,845 | | | | | | 136,871 | | | | | | 36,967(5) | | | | | | 1,044,318 | | |
| 3/30/20(2) | | | | | | | | | | | | | | | | | | | | | | | | | | 3,405 | | | | | | 96,191 | | | | | | | | | | | | | | |
| Barry S. Langer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6/29/23(1) | | | | | | | | 1,500,000 | | | | | | 16.87 | | | | | | 6/29/2033 | | | | | | 250,000 | | | | | | 7,062,500 | | | | | | | | | | | | | | |
| 1/11/23(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 45,482 | | | | | | 1,284,867 | | | | | | 77,939(3) | | | | | | 2,201,777 | | |
| 1/12/22(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 13,890 | | | | | | 392,393 | | | | | | 43,237(4) | | | | | | 1,221,445 | | |
| 1/12/21(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 1,995 | | | | | | 56,359 | | | | | | 112,601(5) | | | | | | 3,180,978 | | |
| 3/30/20(2) | | | | | | | | | | | | | | | | | | | | | | | | | | 2,043 | | | | | | 57,715 | | | | | | | | | | | | | | |
| Glen J. Weiss | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 6/29/23(1) | | | | | | | | 1,500,000 | | | | | | 16.87 | | | | | | 6/29/2033 | | | | | | 250,000 | | | | | | 7,062,500 | | | | | | | | | | | | | | |
| 1/11/23(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 52,439 | | | | | | 1,481,402 | | | | | | 89,858(3) | | | | | | 2,538,489 | | |
| 1/12/22(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 15,996 | | | | | | 451,887 | | | | | | 49,889(4) | | | | | | 1,409,364 | | |
| 1/12/21(1) | | | | | | | | | | | | | | | | | | | | | | | | | | 5,557 | | | | | | 156,985 | | | | | | 112,601(5) | | | | | | 3,180,978 | | |
| 3/30/20(2) | | | | | | | | | | | | | | | | | | | | | | | | | | 3,745 | | | | | | 105,796 | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Share and Unit Awards | |
|---|
Name and
Applicable
Grant Date
| | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
| | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
| | Option
Exercise
Price ($)
| | Option
Expiration
Date
| | Number of
Shares or
Units That
Have Not
Vested (#)
| | Market Value
of Shares
or Units That
Have Not
Vested ($)
| | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)
| | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested ($)
| |
|---|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Steven Roth | | | | | | | | | | | | | | | | | | | | | | | | | |
1/14/15 | (1) | | | | | | | | | | | | | | 35,683 | | | 3,566,873 | | | 112,920 | | | 11,287,483 | |
1/10/14 | (1) | | | | | | | | | | | | | | 34,065 | | | 3,405,137 | | | 114,501 | | | 11,445,520 | |
3/15/13 | (1) | | | | | | | | | | | | | | 55,958 | | | 5,593,562 | | | 67,038 | | | 6,701,118 | |
3/30/12 | (1) | | | | | | | | | | | | | | 74,557 | | | 7,452,718 | | | | | | | |
2/28/11 | (2) | | 152,673 | | | | | | 81.82 | | | 2/27/21 | | | | | | | | | | | | | |
3/11/10 | (2) | | 231,976 | | | | | | 64.78 | | | 3/11/20 | | | | | | | | | | | | | |
2/27/09 | (3) | | 336,197 | | | | | | 30.17 | | | 2/27/19 | | | | | | | | | | | | | |
Stephen W. Theriot | | | | | | | | | | | | | | | | | | | | | | | | | |
1/14/15 | (1) | | | | | | | | | | | | | | 4,907 | | | 490,504 | | | 8,469 | | | 846,561 | |
1/10/14 | (1) | | | | | | | | | | | | | | 2,652 | | | 265,094 | | | 6,072 | | | 606,957 | |
David R. Greenbaum | | | | | | | | | | | | | | | | | | | | | | | | | |
1/14/15 | (1) | | | | | | | | | | | | | | 20,965 | | | 2,095,661 | | | 38,110 | | | 3,809,476 | |
1/10/14 | (1) | | | | | | | | | | | | | | 16,807 | | | 1,680,028 | | | 35,391 | | | 3,537,684 | |
3/15/13 | (1) | | | | | | | | | | | | | | 17,413 | | | 1,740,603 | | | 14,627 | | | 1,462,115 | |
3/30/12 | (1) | | | | | | | | | | | | | | 16,723 | | | 1,671,631 | | | | | | | |
2/28/11 | (2) | | 25,444 | | | | | | 81.82 | | | 2/27/21 | | | | | | | | | | | | | |
3/11/10 | (2) | | 132,572 | | | | | | 64.78 | | | 3/11/20 | | | | | | | | | | | | | |
2/27/09 | (3) | | 44,825 | | | | | | 30.17 | | | 2/27/19 | | | | | | | | | | | | | |
Michael J. Franco | | | | | | | | | | | | | | | | | | | | | | | | | |
1/14/15 | (1) | | | | | | | | | | | | | | 17,842 | | | 1,783,486 | | | 35,287 | | | 3,527,289 | |
1/10/14 | (1) | | | | | | | | | | | | | | 38,986 | | | 3,897,041 | | | 36,432 | | | 3,641,743 | |
3/15/13 | (1) | | | | | | | | | | | | | | 13,955 | | | 1,394,942 | | | 12,189 | | | 1,218,412 | |
3/30/12 | (1) | | | | | | | | | | | | | | 14,604 | | | 1,459,816 | | | | | | | |
2/28/11 | (2) | | 6,361 | | | | | | 81.82 | | | 2/27/21 | | | | | | | | | | | | | |
12/10/10 | (2) | | 59,389 | | | | | | 72.96 | | | 12/10/20 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(table continued on following page)
| | | | | | | | | | |
| | | | | | | | | | |
| | 42 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Option Awards | | Share and Unit Awards | |
|---|
Name and
Applicable
Grant Date
| | Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
| | Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
| | Option
Exercise
Price ($)
| | Option
Expiration
Date
| | Number of
Shares or
Units That
Have Not
Vested (#)
| | Market Value
of Shares
or Units That
Have Not
Vested ($)
| | Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested (#)
| | Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested ($)
| |
|---|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Joseph Macnow | | | | | | | | | | | | | | | | | | | | | | | | | |
1/14/15 | (1) | | | | | | | | | | | | | | 14,497 | | | 1,449,120 | | | 24,701 | | | 2,469,112 | |
1/10/14 | (1) | | | | | | | | | | | | | | 12,492 | | | 1,248,700 | | | 26,023 | | | 2,601,259 | |
3/15/13 | (1) | | | | | | | | | | | | | | 13,955 | | | 1,394,942 | | | 12,189 | | | 1,218,412 | |
3/30/12 | (1) | | | | | | | | | | | | | | 14,604 | | | 1,459,816 | | | | | | | |
2/28/11 | (2) | | 25,444 | | | | | | 81.82 | | | 2/27/21 | | | | | | | | | | | | | |
3/11/10 | (2) | | 94,884 | | | | | | 64.78 | | | 3/11/20 | | | | | | | | | | | | | |
2/27/09 | (3) | | 41,509 | | | | | | 30.17 | | | 2/27/19 | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
(1)- The awards under the column entitled
"Number“Number of Securities Underlying Unexercised Options Exercisable” represent the Performance AO LTIP Units granted in June 2023 which vest 20% on the third anniversary of the grant date and 80% on the fourth anniversary of the grant date, and are also subject to performance conditions. The awards under the column entitled “Number of Shares or Units That Have Not Vested"Vested” vest ratably over four years fromexcept for the awards granted on June 29, 2023 under this column which vest 50% on the third anniversary and 50% on the fourth anniversary of the date of grant. The awards under the column entitled "Equity“Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested"Vested” are awards of OPP and LTPP Units. LTPP and OPP Units awarded in 2015, 20142023, 2022 and 20132021, respectively, do not have any value unless specified performance criteria are met and specified criteria for converting and/or redeeming units for Shares are also met. As of December 31, 2015, these criteria had2023, the applicable performance periods have not yet been met other than for our awards of OPP Units made in 2013 (which as of March 15, 2016 have been fully earned).completed. In accordance with applicable SEC rules, the values presented in the table for these OPP and LTPP Units are calculated based on our year-end Share price as if the performance, converting and redemption conditions for these units had been met as of that date.
(2)
These awards
This award vested in full on March 30, 2024.
| | | 58 | | | | VORNADO REALTY TRUST | | |
(3)
Comprised of the following LTPP Units:
| Name | | | 2023 Earned
Operational
Performance
Based LTPP
Units(a) | | | 2023 Operational
Performance
Based LTPP
Units(b) | | | 2023 Forfeited
Operational
Performance
Based LTPP
Units(c) | | | 2023 Relative
Dow Jones
Index LTPP
Units(d) | | | 2023 Relative
Northeast Peer
Index LTPP
Units(e) | |
| Steven Roth | | | 107,908 | | | 46,246 | | | 5,833 | | | 79,993 | | | 79,993 | |
| Michael J. Franco | | | 32,700 | | | 14,014 | | | 1,768 | | | 24,241 | | | 24,241 | |
| Haim Chera | | | 10,438 | | | 4,473 | | | 564 | | | 7,737 | | | 7,737 | |
| Barry S. Langer | | | 26,284 | | | 11,264 | | | 1,421 | | | 19,485 | | | 19,485 | |
| Glen J. Weiss | | | 30,303 | | | 12,987 | | | 1,638 | | | 22,465 | | | 22,465 | |
(a)
Represents the number of LTPP units that were earned in 2024 for 2023 operational performance that are not subject to forfeiture regardless of our absolute TSR performance over the three-year period ending December 31, 2025. The units will vest ratably50% on each of January 11, 2026 and January 11, 2027.
(b)
Represents the number of LTPP units that are outstanding for 2023 operational performance and are subject to forfeiture based on our absolute TSR performance over four years from the datethree-year period ending December 31, 2025. If earned, the units will vest 50% on each of grant.
(3)These awardsJanuary 11, 2026 and January 11, 2027.
(c)
Represents the number of LTPP units that were forfeited in 2024 based on our actual 2023 operational performance.
(d)
Represents the number of LTPP units that are outstanding and may be earned based on our TSR performance relative to the constituents of the Dow Jones U.S. Real Estate Office Index, as modified by our absolute TSR performance, over the three-year period ending December 31, 2025.
(e)
Represents the number of LTPP units that are outstanding and may be earned based on our TSR performance relative to the constituents of the Northeast Peer Group Index, as modified by our absolute TSR performance, over the three-year period ending December 31, 2025.
(4)
Comprised of the following LTPP Units:
| Name | | | 2022 Earned
Operational
Performance
Based LTPP
Units(f) | | | 2022 Operational
Performance
Based LTPP
Units(g) | | | 2022 Forfeited
Operational
Performance
Based LTPP
Units(h) | | | 2022 Relative
Dow Jones
Index LTPP
Units(i) | | | 2022 Relative
Northeast Peer
Index LTPP
Units(j) | |
| Steven Roth | | | 37,880 | | | 16,234 | | | 45,665 | | | 49,889 | | | 49,889 | |
| Michael J. Franco | | | 10,207 | | | 4,374 | | | 12,304 | | | 13,442 | | | 13,442 | |
| Haim Chera | | | 3,262 | | | 1,398 | | | 3,932 | | | 4,296 | | | 4,296 | |
| Barry S. Langer | | | 8,207 | | | 3,517 | | | 9,894 | | | 10,809 | | | 10,809 | |
| Glen J. Weiss | | | 9,470 | | | 4,059 | | | 11,416 | | | 12,472 | | | 12,472 | |
(f)
Represents the number of LTPP units that were earned in 2023 for 2022 operational performance that are not subject to forfeiture regardless of our absolute TSR performance over the three-year period ending December 31, 2024. The units will vest ratably50% on each of January 12, 2025 and January 12, 2026.
(g)
Represents the number of LTPP units that are outstanding for 2022 operational performance and are subject to forfeiture based on our absolute TSR performance over five years from the datethree-year period ending December 31, 2024. If earned, the units will vest 50% on each of grant.January 12, 2025 and January 12, 2026.
Aggregated
(h)
Represents the number of LTPP units that were forfeited in 2023 based on our actual 2022 operational performance.
(i)
Represents the number of LTPP units that are outstanding and may be earned based on our TSR performance relative to the constituents of the Dow Jones U.S. Real Estate Office Index, as modified by our absolute TSR performance, over the three-year period ending December 31, 2024.
(j)
Represents the number of LTPP units that are outstanding and may be earned based on our TSR performance relative to the constituents of the Northeast Peer Group Index, as modified by our absolute TSR performance, over the three-year period ending December 31, 2024.
(5)
Comprised of OPP Units that are earned over a four-year period based on TSR performance on both an absolute and relative basis. If earned, the units will vest 50% on each of January 12, 2025 and January 12, 2026.
| | | VORNADO REALTY TRUST | | | | 59 | | |
Aggregate Option Exercises in 20152023 and Units Vested
| | | | Option Awards | | | Unit Awards | |
| Name | | | Shares Acquired
on Exercise (#) | | | Value Realized on
Exercise
($) | | | Number of Units
Acquired on
Vesting (#)(1) | | | Value Realized
on Vesting
($)(1)(2) | |
| Steven Roth | | | — | | | — | | | 99,409 | | | 1,931,459 | |
| Michael J. Franco | | | — | | | — | | | 109,000 | | | 1,863,201 | |
| Haim Chera | | | — | | | — | | | 157,922 | | | 2,507,736 | |
| Barry S. Langer | | | — | | | — | | | 82,190 | | | 1,329,678 | |
| Glen J. Weiss | | | — | | | — | | | 86,958 | | | 1,421,472 | |
| | | | | | | | | | | | | |
| | Option Awards | | Unit Awards | |
|---|
Name
| | Shares
Acquired on
Exercise (#)
| | Value Realized
on Exercise ($)(1)
| | Number of Units
Acquired on
Vesting (#)(2)
| | Value Realized
on Vesting
($)(1)(2)
| |
|---|
| | | | | | | | | | | | | | |
Steven Roth | | | — | | | — | | | 94,043 | | | 10,534,841 | |
Stephen W. Theriot | | | — | | | — | | | 883 | | | 109,214 | |
David R. Greenbaum | | | — | | | — | | | 28,220 | | | 3,185,846 | |
Michael J. Franco | | | — | | | — | | | 33,188 | | | 3,889,781 | |
Joseph Macnow | | | 11,747 | | | 578,185 | | | 22,957 | | | 2,587,546 | |
| | | | | | | | | | | | | | |
(1)- Unit Awards consist of awards of restricted units.
(2)
Values realized on exercise/vesting are based on: (1) for Option Awards, the difference between the exercise price and the average of the high and low price of our Shares on the applicable date if the resulting Shares were held or, if the resulting Shares were sold on the date of exercise, the actual sale price for such Shares; and (2) for Unit Awards, the average of the high and low price of our Shares on the date of vesting.
(2)Unit Awards consists of awards of restricted units and OPP units.
| | | | | | | | | | |
| | | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 43 | | |
| | | | | | | | | | |
The Company does not maintain a retirement plan other than a 401(k) plan. The following table summarizes the contributions, earnings, withdrawals and balance for the Named Executive Officers for and at year-end 2015.2023.
Non-Qualified Deferred Compensation
| Name | | | Type of Deferred
Compensation
Plan | | | Executive
Contributions
in Last Fiscal
Year ($) | | | Company
Contributions
in Last Fiscal
Year ($) | | | Aggregate
Earnings (Loss) in
Last Fiscal Year ($) | | | Aggregate
Withdrawals/
Distributions ($) | | | Aggregate
Balance at
12/31/23
($) | |
| Steven Roth | | | Deferred
Compensation
Plans | | | — | | | — | | | — | | | — | | | — | |
| Michael J. Franco | | | Deferred
Compensation
Plans | | | — | | | — | | | — | | | — | | | — | |
| Haim Chera | | | Deferred
Compensation
Plans | | | — | | | — | | | — | | | — | | | — | |
| Barry S. Langer | | | Deferred
Compensation
Plans | | | — | | | — | | | — | | | — | | | — | |
| Glen J. Weiss | | | Deferred
Compensation
Plans | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | | |
Name
| | Type of Deferred
Compensation
Plan
| | Executive
Contributions
in Last Fiscal
Year ($)(1)
| | Company
Contributions
in Last Fiscal
Year ($)
| | Aggregate
Earnings (Loss)
in Last Fiscal
Year ($)(2)
| | Aggregate
Withdrawals/
Distributions ($)
| | Aggregate
Balance at
12/31/15 ($)(3)
| |
|---|
| | | | | | | | | | | | | | | | | | | |
Steven Roth | | Deferred Compensation Plans | | | — | | | — | | | (247,199 | ) | | 18,888 | | | 23,217,052 | |
Stephen W. Theriot | |
Deferred Compensation Plans | | |
125,000 | | |
— | | |
(17,595 |
) | |
— | | |
276,335 | |
David R. Greenbaum | |
Deferred Compensation Plans | | |
1,720,990 | | |
— | | |
(70,962 |
) | |
— | | |
29,777,268 | |
Michael J. Franco | |
Deferred Compensation Plans | | |
— | | |
— | | |
— | | |
— | | |
— | |
Joseph Macnow | |
Deferred Compensation Plans | | |
— | | |
— | | |
337,608 | | |
— | | |
6,062,267 | |
| | | | | | | | | | | | | | | | | | | |
(1)Reflects the following amounts for each of the Named Executive Officers which are reported as compensation to such Named Executive Officer in the Summary Compensation Table for 2015: Mr. Roth, $0; Mr. Theriot, $125,000; Mr. Greenbaum, $1,720,990; Mr. Franco, $0; and Mr. Macnow, $0. These amounts represent the deferred portion for each of such Named Executive Officer's annual salary and/or applicable bonus.
(2)Contributions to the Vornado Realty Trust Non-Qualified Deferred Compensation Plans are credited with earnings based on the rate of return of various "benchmark funds" selected by the individual, some of which are based on the performance of the Company's securities. A description of these plans is provided under "Compensation Discussion and Analysis—Nonqualified Deferred Compensation Plans."
(3)All amounts contributed by a Named Executive Officer in prior years have been reported in the Summary Compensation Tables in our previously filed proxy statements in the year earned to the extent he was a Named Executive Officer in such year for the purposes of the SEC's executive compensation disclosure rules.
| | | | | | | | | | |
| | | 60 | | | | | | | | |
| | 44 | | | | VORNADO REALTY TRUST | | |
| | 20162024 PROXY STATEMENT |
| | | | | | | | | | |
EMPLOYMENT CONTRACTS
Stephen W. Theriot
Employment Contracts
Mr. Theriot entered intoRoth, our Chairman and CEO, does not have an employment agreement. The employment agreements of each of our other Named Executive Officers is described below.
Michael J. Franco
Mr. Franco has been employed by the Company pursuant to an employment agreement with us, dated as of June 1, 2013, pursuant tosince September 24, 2010, which he serves as our Chief Financial Officer. His employment agreement provides that the term of his employment is "at will"was amended and can be terminated by either party on 60 days' notice. Mr. Theriot's employment agreement provides that his base salary will be not less than $1,000,000 per year and, if increased, will not be reduced. Mr. Theriot's employment agreement provides that he will be entitled to participate at a level commensurate with his position in any short- and long-term compensation payable to other senior executives of the Company.The agreement also provides that, if Mr. Theriot's employment is terminated by the Company without cause or by him for good reason (as defined in the agreement to include, among other things, a change in his responsibilities, relocation of the Company's principal executive offices or the failure of the Company to comply with the terms of the agreement), he will receive a lump-sum payment of the sum of (i) his annual base compensation plus (ii) the average of the annual bonuses earned by him in the two fiscal years ending immediately prior to his termination. The agreement further provides that, if Mr. Theriot's employment is terminated by him without good reason or by the Company for cause (as defined in the agreement to include conviction of, or plea of guilty or nolo contendere to, a felony, failure to perform his duties or willful misconduct), payment of Mr. Theriot's salary will cease.
David R. Greenbaum
Mr. Greenbaum has an employment agreement that commenced on April 15, 1997 pursuant to which he serves as President—New York Division. The employment agreement provides that, commencing on April 30, 2000, and on each April 30 thereafter, the employment term shall automatically be extended for one additional year unless either the Company or Mr. Greenbaum gives written notice not to extend the agreement, at least 90 days before such date. The employment agreement provides that Mr. Greenbaum's base salary shall not be reduced during the term of the agreement. Mr. Greenbaum's current annual base salary is $1,000,000. Mr. Greenbaum's employment agreement provides that he will be entitled to participate at a level commensurate with his position in any equity and/or incentive compensation payable to senior executives of the Company. In accordance with the terms of his employment agreement, he has also been given the use of a Company car and driver.
The agreement also provides that if Mr. Greenbaum's employment is terminated by the Company without cause or by him for good reason (as defined in the agreement to include, among other things, a change in his responsibilities, change in control of the Company, relocation of the New York Division's principal executive offices, the failure of the Company to comply with the terms of the agreement or the failure of the Company to renew the agreement upon expiration), Mr. Greenbaum will receive (a) a lump-sum payment of three times the sum of (i) his annual base compensation and (ii) the average of the annual bonuses earned by him in the two fiscal years ending immediately prior to his termination and (b) continued provision of benefits to him and his family for three years. The agreement further provides that if his employment is terminated by him without good reason or by the Company for cause (as defined in the agreement to include conviction of, or plea of guilty or nolo contendere to, a felony, failure to perform his duties or willful misconduct), payment of his salary will cease.
Michael J. Franco
Mr. Franco renewed his employment agreement with the Companyrestated as of January 10, 2014 pursuant to which he currently serves as Executive Vice President—Chief Investment Officer. Mr. Franco's employment agreement provides for an initial four-year term with automatic renewals unless either party gives written notice not to extend the agreement 120 days prior to its scheduled termination date. Under this agreement, Mr. Franco'sFranco serves as President and, effective December 31, 2020, also as Chief Financial Officer. Mr. Franco’s employment agreement provides that his base salary will not be reduced during the term of the agreement and is currently $1,000,000. During his employment, Mr. Franco will be entitled to receive an annual bonus, determined at the discretion of
| | | | | | | | | | |
| | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 45 | | |
| | | | | | | | | | |
the Company with an annual target of $1,500,000. Upon entering into the employment agreement, Mr. Franco received an initial equity grant of $3,000,000 of restricted units. These units vest ratably over three years from the date of grant. At the end of such three-year period, the Company agreed to request that the Compensation Committee grant to Mr. Franco an additional $2,000,000 of restricted units which will vest on January 9, 2018. If such additional grant is not made, or if the initial grant is accelerated for any reason, the Company will pay to Mr. Franco $2,000,000 in cash in lieu of such additional grant. Upon any termination of Mr. Franco'sFranco’s employment for good reason or by the Company without cause, Mr. Franco will be entitled to (a) a severance payment equal to one times his annual salary and average bonus over the last two years; and (b) accelerated vesting of all then-unvested equity awards (other than unearned OPP Units)Units and the June 2023 Awards, which will be governed by their terms) made by the Company to Mr. Franco. Mr. Franco is also entitled to a car allowance of $1,000 per month. The agreement further provides that if his employment is terminated for cause (as defined in the agreement to include conviction of, or pleas of guilty or nolo contendere to, a felony, failure to perform his duties or willful misconduct), payment of his salary will cease.
Joseph Macnow
Haim Chera
Mr. Macnow has hadChera entered into an employment agreement with us, dated as of April 19, 2019, pursuant to which he joined the Company since November 21, 1980. Mr. Macnow currently serves as Executive Vice President—Finance and Chief Administrative Officer pursuant to his Amended and Restated Employment Agreement, dated asHead of July 27, 2006. ThisRetail. Mr. Chera’s employment agreement provides that on each December 31 the employmentfor an initial four-year term shall automatically be extended for one additional yearwith automatic renewals unless either the Company or Mr. Macnowparty gives written notice not to extend the agreement 90120 days before suchprior to its scheduled termination date. Mr. Macnow'sChera’s employment agreement provides that his base salary will not be reduced during the term of the agreement and is currently $1,000,000. During his employment, Mr. Macnow's employment agreement provides that heChera will be entitled to participatereceive an annual bonus, determined at a level commensurate with his position in any equity compensation payable to senior executivesthe discretion of the Company. In accordanceCompany with the termsan annual target of his$1,500,000. Upon any termination of Mr. Chera’s employment agreement, Mr. Macnow has also been provided with a car and driver.The agreement also provides that, if Mr. Macnow's employment is terminated by the Company without cause, or by himMr. Chera for good reason, (as defined in(in the agreementcase of Clause (b) below only) due to include, among other things,death or disability, or (in the case of clause (b) below only) by Mr. Chera (with or without good reason) following a change in control, Mr. Chera will be entitled to (a) a severance payment equal to two times his responsibilities,annual salary and average bonus over the last two years; (b) accelerated vesting of all then-unvested equity awards (other than the June 2023 Awards which will be governed by their terms); (c) up to 18 months of COBRA coverage; and (d) 24 months of Company-provided life insurance. Mr. Chera is also entitled to a car and driver.
Barry S. Langer
Mr. Langer entered into an employment agreement with us, dated as of June 4, 2018, pursuant to which he currently serves as Executive Vice President—Development, Co-Head of Real Estate. Mr. Langer’s employment agreement provided for an initial term ending December 31, 2018, with automatic one-year renewals unless either party gives written notice not to extend the agreement 60 days prior to its scheduled termination date. Mr. Langer’s employment agreement provides that his base salary will not be less than $1,000,000. During his employment, Mr. Langer will be entitled to receive (i) an annual bonus, determined at the discretion of the Company and the Compensation Committee, in an amount of not less than $300,000, and (ii) an annual equity grant with a total notional value of not less than $450,000. Upon any termination of Mr. Langer’s employment by the Company without cause, by Mr. Langer for good reason, (in the case of clause (b) below only) due to death or disability, or (in the case of clause (b) below only) by Mr. Langer (with or without good reason) following a change in control,
Mr. Langer will be entitled to (a) a severance payment equal to two times his annual salary and average bonus over the last two years, (b) accelerated vesting of
the Company, relocation of the Company's principal executive offices, the failure ofall then-unvested equity awards made by the Company to
comply withMr. Langer (other than the
termsJune 2023 Awards which will be governed by their terms), (c) up to 18 months of
the agreement or the failureCOBRA coverage, and (d) 24 months of
the Company to renew the agreement upon expiration), he will receive: (a) a lump-sum payment of three times the sum (not to exceed $3.3 million, in the aggregate) of (i) his annual base compensation plus (ii) the average of the annual bonuses earned by him in the two fiscal years ending immediately prior to his termination; (b) immediate vesting in any equity awards granted to him by the Board; and (c) continued provision of benefits to him and his family for three years. The agreement further provides that, if Mr. Macnow's employment is terminated by him without good reason or by the Company for cause (as defined in the agreement to include conviction of, or plea of guilty or nolo contendere to, a felony, failure to perform his duties or willful misconduct), payment of his salary will cease.Other Named Executive Officers
Mr. Roth (our Chairman and CEO) does not have an employment agreement.
Company-provided life insurance.
| | | | | | | | | | |
| | | | | | | | | | | |
| | 46 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
61 | | |
Glen J. Weiss
Mr. Weiss entered into an employment agreement with us, dated as of May 25, 2018, pursuant to which he currently serves as Executive Vice President—Office Leasing, Co-Head of Real Estate. Mr. Weiss’s employment agreement provided for an initial term ending December 31, 2018, with automatic one-year renewals unless either party gives written notice not to extend the agreement 60 days prior to its scheduled termination date. Mr. Weiss’s employment agreement provides that his base salary will not be less than $950,000. During his employment, Mr. Weiss will be entitled to receive (i) an annual bonus, determined at the discretion of the Company and the Compensation Committee, in an amount of not less than $800,000, and (ii) an annual equity grant with a total notional value of not less than $750,000. Upon any termination of Mr. Weiss’s employment by the Company without cause, by Mr. Weiss for good reason, (in the case of clause (b) below only) due to death or disability, or (in the case of clause (b) below only) by Mr. Weiss (with or without good reason) following a change in control, Mr. Weiss will be entitled to (a) a severance payment equal to two times his annual salary and average bonus over the last two years, (b) accelerated vesting of all then-unvested equity awards made by the Company to Mr. Weiss (other than the June 2023 Awards which will be governed by their terms), (c) up to 18 months of COBRA coverage, and (d) 24 months of Company-provided life insurance.
| | | 62 | | | | | | VORNADO REALTY TRUST | | |
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
Severance and Change of Control Arrangements
Of our Named Executive Officers, each of Messrs. Theriot, Greenbaum, Franco, Chera, Langer and Macnow haveWeiss has an employment agreements that provideagreement, each of which is negotiated on a case-by-case basis and provides for certain payments in the event of a termination of employment, including one followingas discussed above. We believe that our current severance provisions appropriately achieve the benefits of ensuring the dedication of employees in connection with a change of control. Neither Mr. Roth nor any of our Trustees has an employment agreement or other individual severance arrangement.arrangement, however Mr. Roth is eligible for severance under the Company’s broad-based severance program with severance calculated as two weeks of salary and average bonus for each year of service. Our omnibus share plans,Omnibus Plans, which govern all of our equity-based awards and the related forms of equity award agreements, provide that annual equity awards do not vest automatically upon a change of control. In addition, our deferred compensation plans provide that all applicable deferred compensation is paid out to an executive or Trustee upon his or her departure from the Company. The Company does not maintain a retirement plan other than a 401(k) plan. In addition, upon the death or disability of an executive, that executive, or his or her estate, may be entitled to insurance benefits under policies with third parties maintained by us.Our employment agreements are negotiated on a case-by-case basis. As discussed under "Compensation Discussion and Analysis," we believe that in certain circumstances such agreements are in the best interests of the Company and our shareholders to ensure the continued dedication of such employees, notwithstanding the possibility, threat or occurrence of a change of control. Generally, our agreements govern severance payments under the following circumstances: (1) termination of the employee for "cause"; (2) termination by the employee for "good reason" (such as breach of the employment agreement by the Company or, in certain cases, if a change of control occurs and the employee then decides to terminate his employment) or by the Company without "cause"; (3) termination following a disability; (4) termination due to death; and (5) in certain cases, termination upon retirement after the employee reaches the age of 65. Reference should be made to the actual employment agreements for the specific terms. Generally, however, on any termination, the applicable executive officer will receive his accrued and unpaid salary and other benefits until the date of termination. For "cause" terminations by the Company, the employee will not receive any additional payment. If the employee terminates his employment for "good reason" or the Company terminates the employment without "cause," the employee typically receives an additional payment (or payments over a specified period) that may vary from one year of salary and bonus to up to three years of salary and bonus. Generally, cash payments are in a lump sum other than in the case of termination on disability or death when the costs of benefits may be paid for a period of one to three years (depending upon the applicable executive's agreement). For terminations due to disability or death, an executive who has this provision in the applicable agreement typically receives between one year of salary or bonus and three years of salary. In certain cases, the employment agreements also provide for continued benefits for specified periods. None of our Named Executive Officers who has an employment agreement is currently eligible for retirement as provided in that agreement. Historically, severance payments following a change of control under employment agreements for our Named Executive Officers were generally "single trigger," meaning that the change of control must occur and be followed by any termination of employment (for whatever reason) in order for there to be a payment. We believe that our current severance provisions appropriately achieve the benefits of ensuring the dedication of employees in connection with a change of control without providing for an automatic payment under the employment agreement for a change of control.
Our equity-based compensation awards are governed by the individual award agreements issued under our omnibus share plans. Generally, upon terminations of employment, no unvested awards are accelerated but employees are entitled to keep awards that have already vested if they exercise options or similar awards within specified periods after termination. In Mr. Franco's case, however, hisOmnibus Plans and the employee’s employment agreement, provides that on a termination by the Company without cause or by Mr. Franco with good reason, his unvested equity awards (other than unearned OPP Units) then vest.as applicable. Our forms of award agreements for annual equity awards provide that unvested equity awards vest following a change of control only if the applicable employee'semployee’s employment is terminated by the Company without "cause"“cause” or by such employee with "good“good reason."” We believe these vesting provisions for equity awards following a change of control are appropriate due to the change in the nature of the form of award caused by a change of control. In the case of retirement after the age of 65, options (but no other equity-based award) automatically vest.vest and OPP Units and LTPP Units continue to vest on their original schedule subject to the applicable performance conditions. Beginning with awards granted in 2019, in the case of retirement (as defined above), Performance Conditioned AO LTIP Units (excluding those granted in June 2023), restricted shares and restricted units (excluding those granted in June 2023) continue to vest on their original schedule (subject to performance conditions, as applicable). In the case of a termination due to disability, options, andPerformance Conditioned AO LTIP Units (excluding those granted in June 2023), OPP Units vestand LTPP Units remain outstanding subject to actual performance, and in the case of death, allcertain equity awards vest.
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| | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 47 | | |
| | | | | | | | | | |
Our June 2023 restricted unit and Performance AO LTIP Unit award agreements provide that upon retirement, death, disability, resignation for good reason or termination without cause, the following vesting provisions apply:•
If such event occurs at any time after the grant date, 50% of each of the LTIPs and Performance AO LTIP Unit awards will vest;
•
If such event occurs more than one year after the grant date, an additional 25% of each of the LTIPs and Performance AO LTIP Units will vest;
•
If such event occurs more than two years after the grant date, the remaining 25% of each of the LTIPs and Performance AO LTIP Units will vest.
•
Interpolated vesting applies if such event occurs between the grant date and the second anniversary of the grant date, in each case subject to a minimum of 50% of each award vesting.
•
The performance conditions will continue to apply to the vested Performance AO LTIP Units following any such event.
Upon a termination for cause or resignation by an employee without good reason, all unvested LTIPs and Performance AO LTIP Units are forfeited.
The information presented below reflects the estimated payments that each of our Named Executive Officers would have received under the employment termination scenarios set forth below (including following a change of control) if employment termination were to have occurred on December 31, 2015.2023. In calculating the value of equity-based awards, the presentation uses a price per Share of $99.96,$28.25, the closing price of our Shares on the New York Stock ExchangeNYSE on the last trading day in 2015.2023. In addition, in estimating bonuses payable for the calculation of severance payments, we have used the actual annual bonuses paid in 20162024 for 2015 performance (including, for these presentation purposes only, the value of all restricted units granted as a bonus in the first quarter of 2016).2023 performance. The actual amounts that would be paid on any termination of employment can only be determined at the time of any actual separation from the Company.Steven Roth
(amounts in dollars)
| | | | | | | | | | | | |
Payments on
Termination
| | Voluntary
Termination on
Retirement(1)
| | Involuntary
For Cause
Termination
| | Involuntary Not
For Cause
Termination
/Good
Reason
Termination
| | Voluntary
Termination
Following a
Change of
Control(2)
| | Death
| | Disability
|
|---|
| | | | | | | | | | | | | |
Bonus | | — | | — | | — | | — | | — | | — |
Severance | | — | | — | | — | | — | | — | | — |
Unvested Options | | — | | — | | — | | — | | — | | — |
Unvested Restricted Units | | — | | — | | — | | — | | 10,700,818 | | — |
Unvested OPP Units | | 9,317,472 | | — | | 9,317,472 | | 9,317,472 | | 9,317,472 | | 9,317,472 |
Benefits Continuation | | — | | — | | — | | — | | — | | — |
| | | | | | | | | | | | | |
Total | | 9,317,472 | | — | | 9,317,472 | | 9,317,472 | | 20,018,290 | | 9,317,472 |
| | | | | | | | | | | | | |
Stephen W. Theriot
(amounts in dollars)
| | | | | | | | | | | | |
Payments on
Termination
| | Voluntary
Termination on
Retirement(1)
| | Involuntary
For Cause
Termination
| | Involuntary Not
For Cause
Termination
/Good
Reason
Termination
| | Voluntary
Termination
Following a
Change of
Control(2)
| | Death
| | Disability
|
|---|
| | | | | | | | | | | | | |
Bonus | | — | | — | | — | | — | | — | | — |
Severance | | — | | — | | 1,500,000 | | — | | — | | — |
Unvested Options | | — | | — | | — | | — | | — | | — |
Unvested Restricted Units | | — | | — | | — | | — | | 755,598 | | — |
Unvested OPP Units | | | | | | | | | | | | |
Benefits Continuation | | — | | — | | — | | — | | — | | — |
| | | | | | | | | | | | | |
Total | | — | | — | | 1,500,000 | | — | | 755,598 | | — |
| | | | | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | | |
| | 48 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
| | | | | | | | 63 | | |
Michael J. Franco
(amounts in dollars)
| | | | | | | | | | | | |
Payments on
Termination
| | Voluntary
Termination on
Retirement(1)
| | Involuntary
For Cause
Termination
| | Involuntary Not
For Cause
Termination
/Good
Reason
Termination
| | Voluntary
Termination
Following a
Change of
Control(2)
| | Death
| | Disability
|
|---|
| | | | | | | | | | | | | |
Bonus | | — | | — | | — | | — | | — | | — |
Severance | | — | | — | | 2,500,000 | | — | | — | | — |
Unvested Options | | — | | — | | — | | — | | — | | — |
Unvested Restricted Units | | — | | — | | 6,841,262 | | 6,841,262 | | 6,841,262 | | — |
Unvested OPP Units | | — | | — | | 1,694,022 | | 1,694,022 | | 1,694,022 | | 1,694,022 |
Benefits Continuation | | — | | — | | — | | — | | — | | — |
| | | | | | | | | | | | | |
Total | | — | | — | | 11,035,284 | | 8,535,284 | | 8,535,284 | | 1,694,022 |
| | | | | | | | | | | | | |
David R. Greenbaum
(amounts in dollars)
| | | | | | | | | | | | |
Payments on
Termination
| | Voluntary
Termination on
Retirement(1)
| | Involuntary
For Cause
Termination
| | Involuntary Not
For Cause
Termination
/Good
Reason
Termination
| | Voluntary
Termination
Following a
Change of
Control(2)
| | Death
| | Disability
|
|---|
| | | | | | | | | | | | | |
Bonus | | — | | — | | 1,800,000 | | 1,800,000 | | 1,800,000 | | 1,800,000 |
Severance | | — | | — | | 8,400,000 | | 8,400,000 | | 1,000,000 | | — |
Unvested Options | | — | | — | | — | | — | | — | | — |
Unvested Restricted Units | | — | | — | | — | | — | | 5,267,992 | | — |
Unvested OPP Units | | 1,919,932 | | — | | 1,919,932 | | 1,919,932 | | 1,919,932 | | 1,919,932 |
Benefits Continuation(3) | | — | | — | | 173,481 | | 173,481 | | 23,800 | | 173,481 |
| | | | | | | | | | | | | |
Total | | 1,919,932 | | — | | 12,293,413 | | 12,293,413 | | 10,011,724 | | 3,893,413 |
| | | | | | | | | | | | | |
Steven Roth (amounts in dollars) | |
Payments on
Termination | | | Voluntary
Termination on
Retirement(1) | | | Involuntary
For-Cause
Termination | | | Involuntary
Not-For Cause
Termination /
Good Reason
Termination | | | Voluntary
Termination
Following a
Change of
Control(2) | | | Death | | | Disability | |
| Bonus | | | — | | | — | | | — | | | — | | | — | | | — | |
| Severance(3) | | | — | | | — | | | 4,206,731 | | | — | | | — | | | — | |
| Unvested Options(4) | | | 17,718,467 | | | — | | | 17,718,467 | | | 17,718,467 | | | 17,718,467 | | | 17,718,467 | |
| Unvested Restricted Units | | | 13,932,160 | | | — | | | 13,932,160 | | | 13,932,160 | | | 13,932,160 | | | 13,932,160 | |
| Unvested OPP Units(5) | | | — | | | — | | | — | | | — | | | — | | | — | |
| Unvested LTPP Units(6) | | | 12,079,389 | | | — | | | 12,079,389 | | | 12,079,389 | | | 12,079,389 | | | 12,079,389 | |
| Benefits Continuation | | | — | | | — | | | — | | | — | | | — | | | — | |
| Accrued Vacation | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total | | | 43,730,016 | | | — | | | 47,936,747 | | | 43,730,016 | | | 43,730,016 | | | 43,730,016 | |
Michael J. Franco (amounts in dollars) | |
Payments on
Termination | | | Voluntary
Termination on
Retirement(1) | | | Involuntary
For-Cause
Termination | | | Involuntary
Not-For Cause
Termination /
Good Reason
Termination | | | Voluntary
Termination
Following a
Change of
Control(2) | | | Death | | | Disability | |
| Bonus | | | — | | | — | | | — | | | — | | | — | | | — | |
| Severance | | | — | | | — | | | 2,500,000 | | | — | | | — | | | — | |
| Unvested Options(4) | | | — | | | — | | | 13,162,290 | | | 13,162,290 | | | 13,162,290 | | | 13,162,290 | |
| Unvested Restricted Units | | | — | | | — | | | 6,197,768 | | | 6,197,768 | | | 6,197,768 | | | 6,197,768 | |
| Unvested OPP Units(5) | | | — | | | — | | | — | | | — | | | — | | | — | |
| Unvested LTPP Units(6) | | | — | | | — | | | 3,552,186 | | | 3,552,186 | | | 3,552,186 | | | 3,552,186 | |
| Benefits Continuation | | | — | | | — | | | — | | | — | | | — | | | — | |
| Accrued Vacation | | | 161,538 | | | 161,538 | | | 161,538 | | | 161,538 | | | 161,538 | | | 161,538 | |
| Total | | | 161,538 | | | 161,538 | | | 25,573,781 | | | 23,073,781 | | | 23,073,781 | | | 23,073,781 | |
| | | 64 | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | |
| | 2024 PROXY STATEMENT | | 49 | | |
Haim Chera (amounts in dollars) | |
Payments on
Termination | | | Voluntary
Termination on
Retirement(1) | | | Involuntary
For-Cause
Termination | | | Involuntary
Not-For Cause
Termination /
Good Reason
Termination | | | Voluntary
Termination
Following a
Change of
Control(2) | | | Death | | | Disability | |
| Bonus | | | — | | | — | | | — | | | — | | | — | | | — | |
| Severance | | | — | | | — | | | 5,000,000 | | | — | | | — | | | — | |
| Unvested Options(4) | | | — | | | — | | | 6,749,892 | | | 6,749,892 | | | 6,749,892 | | | 6,749,892 | |
| Unvested Restricted Units | | | — | | | — | | | 2,659,552 | | | 2,659,552 | | | 2,659,552 | | | 2,659,552 | |
| Unvested OPP Units(5) | | | — | | | — | | | — | | | — | | | — | | | — | |
| Unvested LTPP Units(6) | | | — | | | — | | | 1,134,287 | | | 1,134,287 | | | 1,134,287 | | | 1,134,287 | |
| Benefits Continuation(7) | | | — | | | — | | | 1,867 | | | 1,867 | | | — | | | — | |
| Accrued Vacation | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total | | | — | | | — | | | 15,545,599 | | | 10,545,599 | | | 10,543,731 | | | 10,543,731 | |
Barry S. Langer (amounts in dollars) | |
Payments on
Termination | | | Voluntary
Termination on
Retirement(1) | | | Involuntary
For-Cause
Termination | | | Involuntary
Not-For Cause
Termination /
Good Reason
Termination | | | Voluntary
Termination
Following a
Change of
Control(2) | | | Death | | | Disability | |
| Bonus | | | — | | | — | | | — | | | — | | | — | | | — | |
| Severance | | | — | | | — | | | 5,000,000 | | | — | | | — | | | — | |
| Unvested Options(4) | | | — | | | — | | | 10,124,838 | | | 10,124,838 | | | 10,124,838 | | | 10,124,838 | |
| Unvested Restricted Units | | | — | | | — | | | 4,430,122 | | | 4,430,122 | | | 4,430,122 | | | 4,430,122 | |
| Unvested OPP Units(5) | | | — | | | — | | | — | | | — | | | — | | | — | |
| Unvested LTPP Units(6) | | | — | | | — | | | 2,855,283 | | | 2,855,283 | | | 2,855,283 | | | 2,855,283 | |
| Benefits Continuation(7) | | | — | | | — | | | 27,393 | | | 27,393 | | | — | | | — | |
| Accrued Vacation | | | 130,769 | | | 130,769 | | | 130,769 | | | 130,769 | | | 130,769 | | | 130,769 | |
| Total | | | 130,769 | | | 130,769 | | | 22,568,405 | | | 17,568,405 | | | 17,541,012 | | | 17,541,012 | |
| | | VORNADO REALTY TRUST | | | | 65 | | |
Joseph Macnow
(amounts in dollars)
Glen J. Weiss (amounts in dollars) | |
Payments on
Termination | | | Voluntary
Termination on
Retirement(1) | | | Involuntary
For-Cause
Termination | | | Involuntary
Not-For Cause
Termination /
Good Reason
Termination | | | Voluntary
Termination
Following a
Change of
Control(2) | | | Death | | | Disability | |
| Bonus | | | — | | | — | | | — | | | — | | | — | | | — | |
| Severance | | | — | | | — | | | 5,000,000 | | | — | | | — | | | — | |
| Unvested Options(4) | | | — | | | — | | | 10,124,838 | | | 10,124,838 | | | 10,124,838 | | | 10,124,838 | |
| Unvested Restricted Units | | | — | | | — | | | 4,834,860 | | | 4,834,860 | | | 4,834,860 | | | 4,834,860 | |
| Unvested OPP Units(5) | | | — | | | — | | | — | | | — | | | — | | | — | |
| Unvested LTPP Units(6) | | | — | | | — | | | 3,292,639 | | | 3,292,639 | | | 3,292,639 | | | 3,292,639 | |
| Benefits Continuation(7) | | | — | | | — | | | 25,095 | | | 25,095 | | | — | | | — | |
| Accrued Vacation | | | 30,769 | | | 30,769 | | | 30,769 | | | 30,769 | | | 30,769 | | | 30,769 | |
| Total | | | 30,769 | | | 30,769 | | | 23,308,200 | | | 18,308,200 | | | 18,283,105 | | | 18,283,105 | |
| | | | | | | | | | | | |
Payments on
Termination
| | Voluntary
Termination on
Retirement(1)
| | Involuntary
For Cause
Termination
| | Involuntary Not
For Cause
Termination
/Good
Reason
Termination
| | Voluntary
Termination
Following a
Change of
Control(2)
| | Death
| | Disability
|
|---|
| | | | | | | | | | | | | |
Bonus | | 1,500,000 | | — | | 1,500,000 | | 1,500,000 | | 1,500,000 | | 1,500,000 |
Severance | | — | | — | | 3,300,000 | | 3,300,000 | | — | | — |
Unvested Options | | — | | — | | — | | — | | — | | — |
Unvested Restricted Units | | — | | — | | 4,965,714 | | 4,965,714 | | 4,965,714 | | 4,965,714 |
Unvested OPP Units | | 1,694,022 | | | | 1,694,022 | | 1,694,022 | | 1,694,022 | | 1,694,022 |
Benefits Continuation(3) | | — | | — | | 454,695 | | 454,695 | | 13,800 | | 454,695 |
| | | | | | | | | | | | | |
Total | | 3,194,022 | | — | | 11,914,431 | | 11,914,431 | | 8,173,536 | | 8,614,431 |
| | | | | | | | | | | | | |
(1)- Payments upon retirement from the Company are available to those Named Executive Officers who retire after reaching the age of 65
or are over 60 and have 20 years of service withfor all equity awards other than those granted in June 2023 for which the Company. Each of Messrs.retirement age is 75. Mr. Roth Greenbaum and Macnow would have qualified for retirement at December 31, 2015.2023. Except as otherwise provided in these tables, no payments are due upon any other voluntary termination prior to retirement.
(2)
Our annual award agreements provide that unvested grants of options and restricted units vest following a change of control only upon specified terminations of employment. These amounts do not include the value of equity that vests for those persons due to their retirement after the age of 65 (75 for the awards granted in June 2023) as opposed to amounts payable solely due to a change of control.
(3)
Severance amount is based on 43.75 years of service through December 31, 2023 with two weeks of salary and average bonus compensation payable for each year of service.
(4)
Represents Performance AO LTIP Units granted in June 2023 based on the pro-rata vested amount as of December 31, 2023.
(5)
Only the 2021 OPP Plan remains outstanding and is tracking to be forfeited. The final measurement date is January 12, 2025.
(6)
Represents both earned and un-earned LTPP units based on then current projections as of December 31, 2023.
(7)
Information presented as to the costs of benefits is based on an estimated total annual cost of benefits for such Named Executive Officer. In certain cases, continued benefits made available following a termination will be less than the total benefits currently payable.
| | | | | | | | | | |
| | | 66 | | | | | | | | |
| | 50 | | | | VORNADO REALTY TRUST | | |
Pay Versus Performance Table
The Company’s compensation philosophy is to pay for performance over the long- and short-term taking into consideration a range of factors, including both financial and non-financial performance measures. We align executive and shareholder interests through a compensation program providing a mix of salary, annual cash bonus incentives, and equity compensation, as further described in the “Compensation Discussion and Analysis” section above.
As required by SEC rules, the table below shows the following information for the past four fiscal years: (i) “total” compensation for our NEOs for purposes of the “Summary Compensation Table”; (ii) the “Compensation Actually Paid” to named executive officers (calculated using rules required by the SEC); (iii) our total shareholder return (“TSR”); (iv) the TSR of the NAREIT All Equity Index; (v) our net income; and (vi) our FFO as adjusted per share. “Compensation Actually Paid” does not represent the value of cash and equity compensation received by named executive officers during the year, but rather is an amount calculated under SEC rules and includes, among other things, year-over-year changes in the value of unvested equity-based awards. As a result of the calculation methodology required by SEC rules, “Compensation Actually Paid” amounts below differ from compensation actually received by the individuals above and the compensation decisions described in the “Compensation Discussion and Analysis” section above.
| | Year
(a) | | | Summary
Compensation
Table Total
for PEO
($)
(b) | | | Compensation
Actually Paid
to PEO
($)
(c) | | | Average
Summary
Compensation
Table Total
for Non-PEO
NEOs
($)
(d) | | | Average
Compensation
Actually Paid
to Non-PEO
NEOs
($)
(e) | | | Value of Initial Fixed
$100 Investment
Based on: | | | Net
Income
(loss)
($ Millions)
(h) | | | FFO, as
adjusted,
per Share
(i) | |
| | Total
Shareholder
Return
(VNO TSR)
($)
(f) | | | Peer
group TSR
(NAREIT
ALL Equity
Index TSR)
($)
(g) | |
| | 2023 | | | | | 26,843,514 | | | | | | 62,897,417 | | | | | | 13,923,495 | | | | | | 30,208,873 | | | | | | 52 | | | | | | 112 | | | | | | 33 | | | | | | 2.61 | | |
| | 2022 | | | | | 9,929,707 | | | | | | (4,862,908) | | | | | | 4,300,083 | | | | | | (829,591) | | | | | | 37 | | | | | | 101 | | | | | | (383) | | | | | | 3.15 | | |
| | 2021 | | | | | 9,763,351 | | | | | | 13,365,756 | | | | | | 3,853,014 | | | | | | 5,479,626 | | | | | | 70 | | | | | | 134 | | | | | | 208 | | | | | | 2.86 | | |
| | 2020 | | | | | 11,047,233 | | | | | | 2,225,040 | | | | | | 7,898,162 | | | | | | 4,063,450 | | | | | | 60 | | | | | | 95 | | | | | | (462) | | | | | | 2.62 | | |
Column (b). Reflects compensation amounts reported in the “Summary Compensation Table” for our CEO, Steven Roth, who is also our principal executive officer, or “PEO”, for the respective years shown.
Column (c). “Compensation actually paid” to our CEO in each of 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in column (b) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (c) of the table above do not reflect the actual amount of compensation earned by or paid to our CEO during the applicable year. For information regarding the decisions made by our Compensation Committee in regard to the CEO’s compensation for each fiscal year, please see the Compensation Discussion and Analysis sections of the proxy statements reporting pay for the fiscal years covered in the table above.
| | | 2016 PROXY STATEMENT |
| | VORNADO REALTY TRUST | | | | 67 | | |
| Year | | | 2020 | | | 2021 | | | 2022 | | | 2023 | |
| CEO | | | S. Roth | | | S. Roth | | | S. Roth | | | S. Roth | |
| SCT Total Compensation ($) | | | | | 11,047,233 | | | | | | 9,763,351 | | | | | | 9,929,707 | | | | | | 26,843,514 | | |
| Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | | | | | (10,669,189) | | | | | | (9,251,060) | | | | | | (7,908,798) | | | | | | (21,799,562) | | |
| Plus: Fair Value for Stock and Option Awards Granted in the Covered Year ($) | | | | | 9,242,062 | | | | | | 10,661,601 | | | | | | 3,339,202 | | | | | | 50,073,881 | | |
| Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | | | | (7,815,409) | | | | | | 1,140,656 | | | | | | (11,209,625) | | | | | | 7,461,253 | | |
| Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | | | | | (400,780) | | | | | | 484,990 | | | | | | 413,928 | | | | | | (116,897) | | |
| Less: Fair Value of Stock and Option Awards Forfeited during the Covered Year ($) | | | | | — | | | | | | (54,741) | | | | | | — | | | | | | (36,722) | | |
| Less: Aggregate Change in Actuarial Present Value of Accumulated Benefit Under Pension Plans ($) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans ($) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | | | | | 821,123 | | | | | | 620,959 | | | | | | 572,678 | | | | | | 471,950 | | |
| Compensation Actually Paid ($) | | | | | 2,225,040 | | | | | | 13,365,756 | | | | | | (4,862,908) | | | | | | 62,897,417 | | |
In making the adjustments in the table above, the “value” of a stock award is the fair value of the award on the applicable date determined in accordance with FASB ASC Topic 718 using the valuation assumptions we then used to calculate the fair value of our equity awards. For more information on the valuation of our equity awards, please see the notes to our financial statements that appear in our Annual Report on Form 10-K for each fiscal year and the footnotes to the Summary Compensation Table that appears in the proxy statements reporting pay for the fiscal years covered in the table above.
Column (d). The following non-CEO named executive officers are included in the average figures shown:
2020: Joseph Macnow, David R. Greenbaum, Michael J. Franco and Glen J. Weiss
2021: Michael J. Franco, Haim Chera, Barry S. Langer and Glen J. Weiss
2022: Michael J. Franco, Haim Chera, Barry S. Langer and Glen J. Weiss
2023: Michael J. Franco, Haim Chera, Barry S. Langer and Glen J. Weiss
Column (e). Average “Compensation Actually Paid” to our non-CEO NEOs in each of 2023, 2022, 2021 and 2020 reflects the respective amounts set forth in column (d) of the table above, adjusted as set forth in the table below, as determined in accordance with SEC rules. The dollar amounts reflected in column (d) of the table above do not reflect the actual amount of compensation earned by or paid to our non-CEO NEOs during the applicable year. For information regarding the decisions made by our Compensation Committee in regards to the non-CEO NEOs’ compensation for each fiscal year, please the Compensation Discussion and Analysis sections of the proxy statements reporting pay for the fiscal years covered in the table above.
| | | 68 | | | | VORNADO REALTY TRUST | | |
| Year | | | 2020
Average | | | 2021
Average | | | 2022
Average | | | 2023
Average | |
| SCT Total Compensation ($) | | | | | 7,898,162 | | | | | | 3,853,014 | | | | | | 4,300,083 | | | | | | 13,923,495 | | |
| Less: Stock and Option Award Values Reported in SCT for the Covered Year ($) | | | | | (3,599,693) | | | | | | (1,278,192) | | | | | | (1,613,244) | | | | | | (10,123,564) | | |
Plus: Fair Value for Stock and Option Awards Granted
in the Covered Year ($) | | | | | 2,968,413 | | | | | | 1,569,816 | | | | | | 494,457 | | | | | | 25,282,730 | | |
| Change in Fair Value of Outstanding Unvested Stock and Option Awards from Prior Years ($) | | | | | (2,607,245) | | | | | | 936,521 | | | | | | (3,981,631) | | | | | | 1,435,782 | | |
| Change in Fair Value of Stock and Option Awards from Prior Years that Vested in the Covered Year ($) | | | | | (931,594) | | | | | | 36,766 | | | | | | (355,524) | | | | | | (480,325) | | |
Less: Fair Value of Stock and Option Awards Forfeited
during the Covered Year ($) | | | | | — | | | | | | (6,486) | | | | | | — | | | | | | (7,729) | | |
Less: Aggregate Change in Actuarial Present Value of
Accumulated Benefit Under Pension Plans ($) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Plus: Aggregate Service Cost and Prior Service Cost for Pension Plans ($) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
| Dividends or other earnings paid on stock or options awards in the covered fiscal year prior to the vesting date that are not otherwise included in the total compensation for the covered fiscal year | | | | | 335,407 | | | | | | 368,187 | | | | | | 326,268 | | | | | | 178,484 | | |
| Compensation Actually Paid ($) | | | | | 4,063,450 | | | | | | 5,479,626 | | | | | | (829,591) | | | | | | 30,208,873 | | |
In making the adjustments in the table above, the “value” of a stock award is the fair value of the award on the applicable date determined in accordance with FASB ASC Topic 718 using the valuation assumptions we then used to calculate the fair value of our equity awards. For more information on the valuation of our equity awards, please see the notes to our financial statements that appear in our Annual Report on Form 10-K for each fiscal year and the footnotes to the Summary Compensation Table that appears in the proxy statements reporting pay for the fiscal years covered in the table above.
Column (f). For the relevant fiscal year, represents the cumulative TSR of Vornado Realty Trust based on the value of an initial fixed investment of $100 on December 31, 2019 and the reinvestment of all dividends.
Column (g). For the relevant fiscal year, represents the cumulative TSR of the NAREIT All Equity Index (“Peer Group TSR”) based on the value of an initial fixed investment of $100 on December 31, 2019 and the reinvestment of all dividends.
Column (h). Reflects “Net Income” in the Company’s Consolidated Income Statements included in the Company’s Annual Reports on Form 10-K for each fiscal year.
Column (i). Company-selected Measure is FFO attributable to common shareholders plus assumed conversions, as adjusted per Share.
Relationship between Pay and Performance. In accordance with the requirements of SEC rules, below are graphs showing the relationship of “compensation actually paid” to our Chief Executive Officer and other named executive officers in 2020, 2021, 2022 and 2023 to (1) TSR of both Vornado and the NAREIT All Equity Index, (2) Vornado’s net income and (3) Vornado’s FFO, as adjusted per share.
| | | VORNADO REALTY TRUST | | | | 69 | | |
| | | 70 | | | | VORNADO REALTY TRUST | | |
(1)
“Compensation actually paid” is determined in accordance with SEC rules. These dollar amounts do not reflect the actual amount of compensation earned by or paid to our CEO during the applicable year. For information regarding the decisions made by our Compensation Committee in regard to the NEOs’ compensation for each fiscal year, please see the Compensation Discussion and Analysis sections of the proxy statements reporting pay for the fiscal years covered in the table above.
Below is an unranked list of the measures we consider most important in linking the compensation actually paid to our NEOs for 2023 with our performance.
| Measure | | | Nature | |
| Absolute TSR (used in LTPP) | | | Financial measure | |
| Relative TSR (used in LTPP) | | | Financial measure | |
| FFO, as adjusted, per Share (used in 2023 Annual Incentive Plan and LTPP) | | | Financial measure | |
| Environmental, Social and Governance progress (used in LTPP) | | | Non-financial measure | |
| | | VORNADO REALTY TRUST | | | | 71 | | |
Pay Ratio Disclosure Rule
In August 2015, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the median employee’s annual total compensation to the total annual compensation of the principal executive officer (“PEO”). The Company’s PEO is Mr. Roth. Pursuant to the SEC rules, we determined a “Median Employee” and compared such employee’s total annual compensation to that of Mr. Roth. For purposes of this ratio, we calculated the annual total compensation of each of the Median Employee and Mr. Roth in accordance with the methodology that we use to calculate total compensation for purposes of the Summary Compensation Table. As of December 31, 2023, the Company employed 2,935 persons of which 2,437 persons are employed by BMS, our cleaning and maintenance services business (“BMS Employees”). The applicable information is set forth below:
| | Median Employee total annual compensation | | | | $ | 81,469 | | |
| | Median Employee (excluding BMS Employees) total annual compensation | | | | $ | 205,547 | | |
| | Mr. Roth (“PEO”) total annual compensation | | | | $ | 26,843,514 | | |
| | Ratio of PEO to Median Employee Compensation | | | | | 330:1 | | |
| | Ratio of PEO to Median Employee Compensation (excluding BMS Employees) | | | | | 131:1 | | |
In determining the median employee, we prepared a listing of all employees as of December 31, 2023. Employees on leave of absence or persons on furlough as of December 31, 2023 were excluded from the list and wages and salaries were annualized for those permanent employees who were not employed for the full year of 2023. The median employee was selected from the annualized list.
| | | 72 | | | | VORNADO REALTY TRUST | | |
Trustees who are not officers of the Company receive an annual retainer. During 2015,2023, Mr. Roth received no compensation for his service as a Trustee. Non-management members of the Board of Trustees are compensated as follows: (1) each such member receives an annual cash retainer equal to $75,000; (2) each such member receives an annual grant of restricted shares or restricted units with a value equal to $125,000$175,000 (not to be sold while such member is a Trustee, except in certain circumstances); (3) the Lead Independent Trustee receives an additional annual cash retainer of $75,000; (4) the Audit Committee ChairmanChair receives an additional annual cash retainer of $50,000 and other Audit Committee members each receive an annual cash retainer of $25,000; and (4)(5) the ChairmanChair and members of all other committees (other than the Executive Committee) each receive an additional annual cash retainer of $10,000$30,000 and $5,000, respectively. The following table sets forth the compensation that was earned or paid in 20152023 for the non-management members of our Board.
| Name | | | Fees Earned or
Paid in Cash ($) | | | Share/Unit
Awards ($)(1) | | | Other
Compensation($) | | | Total ($) | |
| Candace K. Beinecke | | | 180,000 | | | 137,553 | | | — | | | 317,553 | |
| Michael D. Fascitelli | | | 75,000 | | | 137,553 | | | 209,151(2) | | | 421,704 | |
| Beatrice Hamza Bassey | | | 105,000 | | | 137,553 | | | — | | | 242,553 | |
| William W. Helman IV | | | 85,000 | | | 137,553 | | | — | | | 222,553 | |
| David M. Mandelbaum | | | 75,000 | | | 137,553 | | | — | | | 212,553 | |
| Mandakini Puri | | | 130,000 | | | 137,553 | | | — | | | 267,553 | |
| Daniel R. Tisch | | | 130,000 | | | 137,553 | | | — | | | 267,553 | |
| Raymond J. McGuire | | | 79,465 | | | 137,553 | | | — | | | 217,018 | |
| Russell B. Wight, Jr. | | | 75,000 | | | 137,553 | | | — | | | 212,553 | |
| | | | | | |
Name
| | Fees Earned or
Paid in Cash ($)
| | Share/Unit
Awards ($)(1)
| | Total ($)
|
|---|
| | | | | | | |
Candace K. Beinecke | | 105,000 | | 97,502 | | 202,502 |
Michael D. Fascitelli | | 75,000 | | 95,001 | | 170,001 |
Robert P. Kogod | | 100,000 | | 97,502 | | 197,502 |
Michael Lynne | | 105,000 | | 96,258 | | 201,258 |
David Mandelbaum | | 80,000 | | 96,258 | | 176,258 |
Daniel R. Tisch | | 105,000 | | 96,258 | | 201,258 |
Richard R. West | | 130,000 | | 97,502 | | 227,502 |
Russell B. Wight, Jr. | | 80,000 | | 95,001 | | 175,001 |
| | | | | | | |
(1)- The amounts presented in this column reflect the grant date fair value of equity awards (calculated pursuant to FASB ASC Topic 718) granted in
2015.2023. The grant date fair value is the amount we would expense in our consolidated financial statements over the award'saward’s anticipated vesting schedule. These amounts differ from that set forth in the first introductory paragraph above as that amount is based on the market price for our Shares on the date of grant. For additional information on our value assumptions, refer to footnote 1412 of our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 20152023 as filed with the SEC. Dividends are paid on both the vested and unvested portion of Restricted Sharerestricted share and Restricted Unitrestricted unit awards. For information concerning the aggregate equity awarded to non-management Trustees under our omnibus share plans,Omnibus Plans, see Note 87 to the Principal Security Holders table.
(2)
Represents the incremental cost of secretarial services and office space provided to Mr. Fascitelli at one of our properties.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Compensation Committee
consisting of Dr. West and Messrs. Lynne and Tisch, grants awards under the
Company's omnibus share plansCompany’s Omnibus Plans and makes all other executive compensation determinations. Mr. Roth is the only officer or employee of the Company who is also a member of the Board. There are no interlocking relationships involving the Board which require disclosure under the executive compensation rules of the SEC.
| | | | | | | | | | |
| | | | | | | | | | | |
2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 51 | | |
| | | 73 | | |
| | 2024 PROXY STATEMENT | | | | |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Review and Approval of Related Person Transactions We review all relationships and transactions in which we and our significant shareholders, Trustees and our executive officers or their respective immediate family members are participants (including transactions required to be disclosed under Item 404 of Regulation S-K) to determine whether such persons have a direct or indirect material interest in the transaction. Our policy (as set forth in our Code of Business Conduct and Ethics) is to determine whether such an interest exists, applying the standards set forth in Item 404 of Regulation S-K and our Corporate Governance Guidelines. Our legal and financial staff is primarily responsible for the development and implementation of processes and controls to obtain information from our significant shareholders, Trustees and our executive officers with respect to related person transactions and for then determining, based on the facts and circumstances, whether we or a related person has a direct or indirect material interest in the transaction. As required under SEC rules, transactions that are determined to be directly or indirectly material to the Company or a related person are disclosed in this proxy statement. We also disclose transactions or categories of transactions we consider in determining that a Trustee is independent. In addition, our Audit Committee and/or our Corporate Governance and Nominating Committee reviews and, if appropriate, approves or ratifies any related person transaction that is required to be disclosed. These committees, in the course of their review of a disclosable related-party transaction, consider: (1) the nature of the related
person'sperson’s interest in the transaction; (2) the material terms of the transaction; (3) the importance of the transaction to the related person; (4) the importance of the transaction to the Company; (5) whether the transaction would impair the judgment of a Trustee or executive officer to act in the best interest of the Company; and (6) any other matters these committees deem appropriate.
Transactions Involving Interstate Properties As of March 21, 2016,25, 2024, Interstate and its partners collectively beneficially owned approximately 7% of our outstanding Shares and approximately 26% of Alexander'sAlexander’s outstanding common stock. Interstate is a general partnership in which Steven Roth, David M. Mandelbaum and Russell B. Wight, Jr. are the partners. Mr. Roth is Chairman of the Board and CEOChief Executive Officer of the Company, the Managing General Partner of Interstate, and the Chairman of the Board of Directors and Chief Executive Officer of Alexander's.Alexander’s. Messrs. Mandelbaum and Wight are Trustees of the Company and also directors of Alexander's.Alexander’s.
We manage and lease the real estate assets of Interstate pursuant to a management agreement for which we receive an annual fee equal to 4% of annual base rent and percentage rent. The management agreement has a term of one year and automatically renews unless terminated by either of the parties on 60
days'days’ notice at the end of the term. We believe, based upon comparable fees charged by other real estate companies, that the terms are fair to us. We earned
$541,000$206,000 in management fees under the agreement for the year ended December 31,
2015.2023.
Transactions Involving Alexander'sAlexander’s
As of March 21, 2016,25, 2024, Interstate and its three general partners—Steven Roth (Chairman of the Board and CEOChief Executive Officer of the Company and Chairman of the Board of Directors and Chief Executive Officer of Alexander's)Alexander’s), David M. Mandelbaum (a Trustee of the Company and director of Alexander's)Alexander’s) and Russell B. Wight, Jr. (a Trustee of the Company and director of Alexander's)Alexander’s)—beneficially owned approximately 7% of our outstanding Shares and approximately 26% of Alexander'sAlexander’s outstanding common stock. The Company beneficially owns approximately 32% of the outstanding common stock of Alexander's. Stephen W. Theriot,Alexander’s. Ms. Puri, our Chief Financial Officer, is the Assistant Treasurertrustee, also serves as a director of Alexander's.Alexander’s.
We manage, develop and lease and develop Alexander'sAlexander’s properties pursuant to the agreements described below, which expire in March of each year and renew automatically.
| | | | | | | | | | |
| | | | | | | | | | |
| | 52 | | | | VORNADO REALTY TRUST | | | | 2016 PROXY STATEMENT |
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Management and Development Agreements.
Pursuant to our management and development agreement with Alexander's,Alexander’s, we receive an annual fee for managing Alexander'sAlexander’s and all of its properties equal to the sum of (i) $2,800,000, (ii) 2% of the gross revenue from the Rego Park II Shopping Center, (iii) $0.50 per square foot of the tenant-occupied office and retail space at 731 Lexington Avenue, and (iv) $289,000,$365,000, escalating at 3% per annum, for managing the common area of 731 Lexington Avenue. In addition, we are entitled to a development fee of 6% of development costs, as defined.
Leasing and Other Agreements. We provide Alexander'sAlexander’s with leasing services for a fee of 3% of rent for the first ten years of a lease term, 2% of rent for the eleventh through the twentieth year of a lease term, and 1% of rent
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for the twenty-first through thirtieth year of a lease term, subject to the payment of rents by Alexander'sAlexander’s tenants. In the event that third-party real estate brokers are used, our leasing fee increases by 1% and we are responsible for the fees to the third-party real estate brokers. We are also entitled to a commission upon the sale of any of Alexander'sAlexander’s assets of 3% of gross proceeds, as defined, for asset sales of less than $50,000,000, or 1% of gross proceeds, as defined, for asset sales of $50,000,000 or more. In connection with Alexander’s sale of the Rego Park III land parcel in May 2023, we received a $711,000 sales commission from Alexander’s, of which $250,000 was paid to a third-party broker.
Other Agreements. Building Maintenance Services ("BMS"), BMS, our wholly-owned subsidiary, supervises (i) the cleaning, engineering and security services at Alexander'sAlexander’s 731 Lexington Avenue property and (ii) security services at Alexander'sAlexander’s Rego Park I, Rego Park II properties and The Alexander apartment tower. In addition, our subsidiary manages the parking garages at Alexander’s Rego Park I and Rego Park II properties. During the year ended December 31, 2015, Alexander's2023, Alexander’s incurred $2,800,000 in management fees, $2,435,000 in development fees, $2,950,000$1,213,000 in leasing fees and $3,641,000$6,005,000 for property management and other fees under its agreements with the Company and/or BMS. At December 31, 2015, Alexander's2023, Alexander’s owed the Company (i) $5,795,000 for development fees, (ii) $283,000$646,000 for management, property management, and cleaning, engineering and security fees, and (iii) $2,473,000(ii) $69,000 for leasing fees.
Certain Other Transactions or Relationships With respect to our building at 888 Seventh Avenue, we are the lessee under a ground lease that expires in 2067.2067, assuming all renewal options are exercised. The lessor under the ground lease is a limited liability company that is owned by several members, some of which include trusts for the benefit of the family of Mr. David M. Mandelbaum (one of our Trustees), his children, his brother, his sister and his sister'ssister’s family. Mr. Mandelbaum has no voting or pecuniary interest in these trusts or in the ground lease. The underlying fee property was purchased by the parents of Mr. Mandelbaum in 1961 and placed into trusts at that time for the benefit of their children and grandchildren. Since 1961, this property has been owned 20% by these trusts and, when the trusts expired, descendants of Mr. Mandelbaum'sMandelbaum’s parents. The remaining 80% of the limited liability company is owned by two unrelated families. One family owns 55% of the limited liability company and is its managing member. Mr. Mandelbaum'sMandelbaum’s personal interest in the property is an indirect 2.66% interest. We acquired the building at 888 Seventh Avenue (and the tenant'stenant’s interest under the ground lease) from an unrelated party in 1998. The limited liability company owning the ground receives under the ground lease an aggregate payment of $3,350,000 aper year in rent.On December 28, 2010, the Company acquired
In 2023, Mr. Mandelbaum’s spouse and his brother collectively paid approximately $211,884 in condominium fees with respect to their apartments at 220 Central Park South, a Vornado development.
Our property, Wayne Town Center, is subject to a ground lease owned by members of David Mandelbaum'sM. Mandelbaum’s family or trusts for their benefit. The rent on the ground lease in 20152023 was $3,370,607$5,345,640 and increases atby the greater of CPI or 6% per year. DavidMr. Mandelbaum has no direct voting or pecuniary interest in these trusts or in the ground lease.On February 11, 2016, Mr. Mandelbaum and his brother each entered into a contract to purchase an apartment at our project at 220 Central Park South. The price agreed to be paid by Mr. Mandelbaum was $23,571,000 (and he made a deposit of $3,535,650) and by his brother was $16,247,500 (with a deposit of $2,437,125). These purchase terms are no more or less favorable to the Company or Mr. Mandelbaum than those entered into by other purchasers at 220 Central Park South.
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2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 53 | | |
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Charles E. Smith Management LLC, which is owned by Mr. Kogod, one of our Trustees, and his family members, leases space in our Crystal City location. During 2015, this company paid to us rent of $645,012. This entity is not affiliated with the Company. Mr. Kogod and his spouse each own a 25% interest in this entity.
MDF Capital LLC, which is owned by Mr. Fascitelli, one of our Trustees, leases space at our building at 888 Seventh Avenue in New York City. During 2015, MDF Capital paid $239,445 of rent to the Company for this space.
Michael D. Fascitelli, a Trustee, serves as a member of the Board of Commissioners of The Port Authority of New York and New Jersey. Mr. Fascitelli receives no compensation for his service as a member of the Board of Commissioners. The Company does business with the Port Authority of New York and New Jersey from time to time.
Steven Roth, our Chairman and Chief Executive Officer, also servesserved as a member of the Board of Trustees of Urban Edge Properties, a former affiliate of the Company until its 2023 annual meeting, and, until May 2021, Mr. Roth also served as Chairman of the Board of Directors of JBG Smith Properties, a former affiliate of the Company.
Daryl Roth Productions Ltd., owned by Mr. Roth’s family, is also a tenant at our building at 888 Seventh Avenue in New York City pursuant to a lease at market terms. Pursuant to the lease, during 2023, Daryl Roth Productions paid rent of $520,608. In addition, Daryl Roth Productions paid $26,925 to Vornado in 2023 for information technology services.
During 2015,2023, the Company reimbursed a company owned by Mr. Roth $232,305$280,175 for the use, for Company-business purposes, of an airplane owned by such company.During 2015, In 2023, the Company made an additional payment of $339,492 to the company owned by Mr. Roth in respect of use of such airplane by Mr. Chera during 2023 for Mr. Chera’s personal use to provide transportation to receive medical treatments.
We provide various services to the Manhattan High Street and Times Square Joint Venture in accordance with management, development, leasing and other agreements. Haim Chera, Executive Vice President—Head of Retail, has an investment in Crown Acquisitions Inc. and Crown Retail Services LLC (collectively, “Crown”), companies
affiliatedcontrolled by Mr. Chera’s family. Crown has a nominal minority interest in our Manhattan High Street and Times Square JV. Crown also has an approximately 10% interest in our 697-703 Fifth Avenue property. Additionally, we have other investments with
Mr. Roth's wife, Daryl Roth Productions, paid to us $416,000 in connection with fair market leases of signage space from us.In addition, in 2015 Daryl Roth Productions entered into a lease for space at our building at 888 Seventh Avenue. The lease commenced on January 1, 2016 and provides for rent at market terms.
Other Transactions or Relationships Considered in Determining Trustee Independence
Daniel R. Tisch, a Trustee, is also a member of the Board of New York University. New York University (or an affiliate thereof) is a tenant at our property at One Park Avenue in New York City. Mr. Tisch was in no way affiliated with such relationship nor does he receive any compensation in connection with such relationship.
Crown.
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REPORT OF THE AUDIT COMMITTEE The Audit Committee'sCommittee’s purposes are toto: (i) assist the Board of Trustees (the "Board“Board of Trustees"Trustees” or the "Board"“Board”) of Vornado Realty Trust, a Maryland real estate investment trust (the "Company"“Company”), in its oversight of (a) the integrity of the Company'sCompany’s financial statements, (b) the Company'sCompany’s compliance with legal and regulatory requirements, (c) the qualifications and independence of the Company'sCompany’s independent registered public accounting firm, and (d) the performance of the Company'sCompany’s independent registered public accounting firm and the Company'sCompany’s internal audit function; and (ii) prepare an Audit Committee report as required by the Securities and Exchange Commission (the "SEC"“SEC”) for inclusion in the Company'sCompany’s annual proxy statement. The function of the Audit Committee is oversight. The Board of Trustees, in its business judgment and upon the recommendation of the Corporate Governance and Nominating Committee of the Board, has determined that all members of the Audit Committee are "independent,"“independent,” as required by applicable listing standards of the New York Stock Exchange (the "NYSE"“NYSE”), as currently in effect, and in accordance with the rules and regulations promulgated by the SEC. The Board of Trustees has also determined that each member of the Audit Committee is financially literate and has accounting or related financial management expertise, as such qualifications are defined under the rules of the NYSE and that each of Dr. WestMs. Puri and Mr. Tisch is an "audit“audit committee financial expert"expert” within the meaning of the rules of the SEC. The Audit Committee operates pursuant to an Audit Committee Charter. Management is responsible for the preparation, presentation and integrity of the Company'sCompany’s financial statements and for the establishment and effectiveness of internal control over financial reporting, and for maintaining appropriate accounting and financial reporting principles and policies and internal controls and procedures that provide for compliance with accounting standards and applicable laws and regulations. The independent registered public accounting firm, Deloitte & Touche LLP, is responsible for planning and carrying out a proper audit of the Company'sCompany’s annual financial statements in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"(“PCAOB”), expressing an opinion as to the conformity of such financial statements with generally accepted accounting principles and auditing the effectiveness of internal control over financial reporting. In performing its oversight role, the Audit Committee has considered and discussed the audited consolidated financial statements with management and Deloitte & Touche LLP. The Audit Committee has also discussed with Deloitte & Touche LLP the matters required to be discussed by PCAOB Auditing Standard No. 16,Communications with Audit Committees. The Audit Committee has received the written disclosures and the letter from the independent registered public accounting firm required by PCAOB Ethics and Independence RulesRule 3526,Communication with Audit Committees Concerning Independence. The.The Audit Committee has also discussed with the independent registered public accounting firm its independence. The independent registered public accounting firm has free access to the Audit Committee to discuss any matters the firm deems appropriate. Based on the reports and discussions described in the preceding paragraph and subject to the limitations on the role and responsibilities of the Audit Committee referred to below and in the Audit Committee Charter in effect during 2015,2023, the Audit Committee recommended to the Board of Trustees that the audited consolidated financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2023.
Members of the Audit Committee rely without independent verification on the information provided to them and on the representations made by management and the independent registered public accounting firm. Accordingly, the Audit Committee'sCommittee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee'sCommittee’s considerations and discussions referred to above do not assure that the audit of the Company'sCompany’s consolidated financial statements has been carried out in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States),PCAOB, that the consolidated financial statements are presented in accordance with accounting principles generally accepted in the United States of America or that Deloitte & Touche LLP is in fact "independent"“independent” or the effectiveness of the Company'sCompany’s internal controls.
The Audit Committee of the Board of Trustees BEATRICE HAMZA BASSEY
MANDAKINI PURI
DANIEL R. TISCH
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| | DR. RICHARD R. WEST
ROBERT P. KOGOD
DANIEL R. TISCH
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2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 55 | | |
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PROPOSAL 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu and their respective affiliates (collectively, the "Deloitte Entities"“Deloitte Entities”) have been the Company'sCompany’s independent registered public accounting firm since 1976. The Audit Committee selected Deloitte & Touche LLP as the Company'sCompany’s independent registered public accounting firm for the fiscal year ending December 31, 2015 as a result of a process by which the Audit Committee and management solicited and received proposals from and met with and interviewed several other independent registered public accounting firms. The Audit Committee initiated this process after consultation with management because it determined that there were possible benefits to be considered with regard to cost, audit firm independence and obtaining a fresh look at the Company's financial accounting and internal controls processes. This process was not related to the quality of services provided by the Deloitte Entities. After consideration of each of the proposals, the Audit Committee retained the Deloitte Entities as the Company's independent registered public accounting firm and has determined to continue that retention for 2015.2024. Among other matters, the Audit Committee concluded that current requirements for audit partner rotation, limitation of services and other regulations affecting the audit engagement process substantially assist in supporting auditor independence. As a matter of good corporate governance, the Audit Committee has determined to submit its selection to shareholders for ratification. In the event that this selection of an independent registered public accounting firm is not ratified by the affirmative vote of a majority of the votes cast on the proposal, the Audit Committee will review its future selection of an independent registered public accounting firm but will retain all rights of selection. Even if the selection of the Deloitte Entities is ratified at the Annual Meeting, the Audit Committee, in its discretion, may change the appointment at any time during the year. We expect that representatives of the Deloitte Entities will be present at the Annual Meeting. They will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. The aggregate fees billed by the Deloitte Entities for the years ended December 31, 20152023 and 2014,2022, for professional services rendered for the audits of the Company'sCompany’s annual consolidated financial statements included in the Company'sCompany’s Annual Reports on Form 10-K, for the reviews of the consolidated interim financial statements included in the Company'sCompany’s Quarterly Reports on Form 10-Q and reviews of other filings or registration statements under the Securities Act of 1933, as amended, and Securities Exchange Act of 1934 during those fiscal years were $3,998,000$2,854,000 and $4,386,000,$2,779,000, respectively. The aggregate fees billed by the Deloitte Entities for the years ended December 31, 20152023 and 20142022 for professional services rendered that are related to the performance of the audits or reviews of the Company'sCompany’s consolidated financial statements which are not reported above under "Audit Fees"“Audit Fees” were $2,991,000$1,322,000 and $4,386,000 (including $1,565,000 for work performed in connection with the spin-off of Urban Edge Properties),$1,578,000, respectively. "Audit-Related Fees"“Audit-Related Fees” generally includeincludes fees for stand-alone audits of subsidiaries and due diligence associated with mergers/acquisitions.subsidiaries.
The aggregate fees billed by the Deloitte Entities for the years ended December 31,
20152023 and
20142022 for professional services rendered for tax compliance, tax advice and tax planning were
$1,798,000$1,168,000 and
$1,045,000,$1,284,000, respectively.
"Tax Fees"“Tax Fees” generally include fees for tax consultations regarding return preparation and REIT tax law compliance.
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All Other Fees
Other than those described above under "Audit“Audit Fees," "Audit-Related Fees"” “Audit-Related Fees” and "Tax“Tax Fees,"” there were no other fees billed by the Deloitte Entities for the years ended December 31, 20152023 and 2014.Pre-approval2022.
Pre-Approval Policies and Procedures In May 2003, the Audit Committee established a policy of reviewing and approving engagement letters with the Deloitte Entities for the services described above under "Audit Fees"“Audit Fees” before the provision of those services commences. For all other services, the Audit Committee has detailed policies and procedures pursuant to which it has pre-approved the use of the Deloitte Entities for specific services for which the Audit Committee has set an aggregate quarterly limit of $250,000 on the amount of other services that the Deloitte Entities can provide the Company. Any services not specified that exceed the quarterly limit, or which would cause the amount of total other services provided by the Deloitte Entities to exceed the quarterly limit, must be approved by the Audit Committee Chairman before the provision of such services commences. The Audit Committee also requires
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management to provide it with regular quarterly reports of the amount of services provided by the Deloitte Entities. Since the adoption of such policies and procedures, all of such fees were approved by the Audit Committee in accordance therewith. The Board of Trustees recommends that you vote "FOR"“FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company'sCompany’s independent registered public accounting firm for 2016.the fiscal year ending December 31, 2024.
The affirmative vote of holders of a majority of the votes cast on this proposal at the Annual Meeting, assuming a quorum is present, is required for its approval.
Because banks, brokers and other nominees are entitled to vote on this matter in their discretion if they do not receive instructions from the applicable beneficial owner of Shares, we do not expect there to be any broker non-votes on this proposal. Abstentions
will not be counted as votes cast and will have no effect on the result of this vote.
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2016 PROXY STATEMENT | | | | VORNADO REALTY TRUST | | | | 57 | | |
PROPOSAL 3: APPROVAL OF AN AMENDMENT TO THE COMPANY'S DECLARATION OF TRUST TO ELIMINATE THE CLASSIFICATION OF THE COMPANY'S BOARD OF TRUSTEES
Section 2.2 of the Company's Declaration of Trust (the "Declaration") provides for the classification of the Company's Board into three classes, with the Trustees of one class being elected every year to serve until the third succeeding annual meeting and until their successors are duly elected and qualify. In March 2016, the Board deemed advisable and approved an amendment to the Declaration that would eliminate the classification of the Board over a three-year period (the "Amendment") and directed that the Amendment be submitted for consideration and to be voted upon by the Company's shareholders at this annual meeting. The text of the Amendment is attached as Annex B to this Proxy Statement.
In advance of this annual meeting, the Corporate Governance and Nominating Committee of the Board (comprised entirely of independent Trustees) as well as the full Board reviewed and reconsidered the arguments both for and against a classified board of trustees, many of which have been set forth in previous proxy statements in connection with non-binding shareholder declassification proposals, as well as other factors, including the results of the votes upon such shareholder proposals. In addition, we engaged in an extensive shareholder outreach effort to discuss governance matters, including our Board classification. Arguments for eliminating the classification of a board of trustees include that it could have the effect of increasing trustee accountability, it would give shareholders the opportunity to express their views on the performance of each trustee annually, it is responsive to our shareholders and the annual election of directors has become the norm for S&P 500 companies. Arguments against eliminating the classification of a board of trustees include that classified three-year terms for trustees can be consistent with and supportive of a company's long-term business and investment strategy and that a classified board structure can help to safeguard against coercive attempts to acquire control over a company. After careful consideration, the Corporate Governance and Nominating Committee recommended to the Board that, although there continue to be strong arguments in favor of continuing a classified board, it was advisable to amend the Declaration to eliminate the classification of the Board. The Board considered carefully the recommendation of the Corporate Governance and Nominating Committee as well as the reasons for that recommendation and determined that it was advisable to amend the Declaration to eliminate the classification of the Board.
If the Amendment is approved by the Company's shareholders, then the Company will file Articles of Amendment to the Declaration containing the amendment text set forth in Annex B to this Proxy Statement with the State Department of Assessments and Taxation of Maryland. The Amendment provides that the Trustees elected at this annual meeting will serve until the 2019 annual meeting of shareholders, the Trustees elected at the 2017 annual meeting of shareholders will serve until the 2018 annual meeting of shareholders, the Trustees elected at the 2018 annual meeting of shareholders will serve until the 2019 annual meeting of shareholders and beginning with the 2019 annual meeting of shareholders, all trustees will be elected to serve until the next annual meeting of shareholders and until their respective successors are duly elected and qualify. Accordingly, if the Amendment is approved by the Company's shareholders, then at the Company's 2019 annual meeting of shareholders, the transition to a declassified Board would be complete and, at the annual meeting of shareholders held in 2019, the entire Board would be elected to serve until the next annual meeting of shareholders and until their respective successors are duly elected and qualify.
The Board of Trustees recommends that you vote "FOR" the approval of the amendment to the Company's Declaration to eliminate the classification of the Board of Trustees.
Vote Required
The affirmative vote of shareholders of not less than a majority of the Shares outstanding and entitled to vote on this proposal, assuming a quorum is present, is required to approve the Amendment. Abstentions and broker non-votes will not be counted as votes cast and will have the effect of a vote against the Amendment.
If the Amendment is approved by the shareholders, it will become effective upon the acceptance for recording of the Articles of Amendment by the State Department of Assessments and Taxation of Maryland, which we would expect to occur promptly after the Annual Meeting. If the Amendment is not approved by the shareholders, Section 2.2 of the Declaration will remain as currently in effect and the classification of the Board will not be eliminated.
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PROPOSAL 4:3: NON-BINDING, ADVISORY RESOLUTION ON EXECUTIVE COMPENSATION The Compensation Discussion and Analysis section appearing earlier in this proxy statement describes our executive compensation program and the compensation decisions made by the Compensation Committee in or for 20152023 with respect to our Chief Executive Officer and other officers named in the Summary Compensation Table (whom we refer to as the "Named“Named Executive Officers"Officers”). In accordance with the rules and regulations of the SEC, the Board of Trustees is asking shareholders to cast avote for the following non-binding, advisory vote on the following resolution:
Advisory Resolution on Executive Compensation
Resolved:
Proposal: That the shareholders of Vornado Realty Trust (the "Company"“Company”) approve, by a non-binding, advisory resolution, the compensation of the Company'sCompany’s executive officers named in the Summary Compensation Table, as disclosed in the proxy statement for this Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis, the tables and the related footnotes and narrative accompanying the tables contained in our "Executive Compensation"“Executive Compensation” section). Supporting Statement: In accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, our shareholders have the opportunity to vote to approve, on an advisory and non-binding basis, the compensation of our named executive officers.Named Executive Officers. At our 20112023 Annual Meeting of Shareholders, our shareholders elected, via an affirmative vote of a majority of all votes cast on the matter, to hold such non-binding, advisory votes on executive compensation on an annual basis, and, accordingly, we have elected to continue to annually hold an advisory vote on the compensation of our named executive officers.Named Executive Officers.
Our executive compensation programs are described in detail in this proxy statement in the section titled "Compensation“Compensation Discussion and Analysis"Analysis,” the accompanying tables and the accompanying tables.related narrative disclosure in this Proxy Statement. These programs are designed to attract and retain talented individuals who possess the skills and expertise necessary to lead Vornado.The Compensation Committee regularly assesses all elements of the compensation paidVornado and to our Named Executive Officers. In 2012, the Compensation Committee implemented a series of modifications to our compensation programs to address input received from our shareholders. A summary of our current compensation programs, inclusive of the aforementioned modifications, is presented in the Compensation Discussion and Analysis section and the accompanying tables and related narrative disclosure in this proxy statement. The Compensation Committee believes that the Company's present compensation programs promote in the best manner possible our business objectives while aligning the interests of the Named Executive Officers with our shareholders to enhance continued positive financial results. During 2015, the Company recorded strong financial results while continuing our simplification and focusing strategy, producing 10.5% growth in comparable funds from operations (per diluted share), and spinning off our strip shopping centers and malls business into Urban Edge Properties (NYSE: UE) in January 2015 and selling over $1 billionThe Compensation Committee regularly assesses all elements of non-core or non-strategic assets and purchasing approximately $850 million of high-quality assets in New York City (including approximately $700 million in Manhattan). We believe the compensation programs forpaid to our Named Executive Officers are a key ingredient in motivating our executives to continue to deliver such results.
Officers.
The results of this advisory vote are not binding on the Compensation Committee, the Company or our Board of Trustees. Nevertheless, theour Board of Trustees values input from our shareholders and will consider carefully the results of this vote when making future decisions concerning executive compensation. The Board of Trustees unanimously recommends a vote "FOR"“FOR” the non-binding, advisory resolution on executive compensation. The affirmative vote of a majority of
all the votes cast on this proposal at the Annual Meeting, assuming a quorum is present, is necessary to approve, on an advisory basis, the compensation of our Named Executive Officers. Abstentions and broker non-votes will not be counted as votes cast and will have no effect on the result of
thethis vote.
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INCORPORATION BY REFERENCE To the extent this proxy statement is incorporated by reference into any other filing by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act, of 1934, the sections entitled "Compensation“Compensation Committee Report on Executive Compensation"Compensation” and "Report“Report of the Audit Committee" (toCommittee” (to the extent permitted by the rules of the SEC) will not be deemed incorporated unless provided otherwise in such filing. ADDITIONAL MATTERS TO COME BEFORE THE MEETING The Board does not intend to present any other matter, nor does it have any information that any other matter will be brought before the Annual Meeting. However, if any other matter properly comes before the Annual Meeting, it is the intention of each of the individuals named in the accompanying proxy to vote said proxy in accordance with theirhis or her discretion on such matters. PROXY AUTHORIZATION VIA THE INTERNET OR BY TELEPHONE We have established procedures by which shareholders may authorize their proxies via the Internet or by telephone. You may also authorize your proxy by mail. Please see the proxy card or voting instruction form accompanying this proxy statement for specific instructions on how to authorize your proxy by any of these methods. Proxies authorized via the Internet or by telephone must be received by 11:59 P.M., New York City time, on Wednesday, May 18, 2016.22, 2024. Authorizing your proxy via the Internet or by telephone will not affect your right to revoke your proxy should you decide to do so. The Internet and telephone proxy authorization procedures are designed to authenticate shareholders'shareholders’ identities, to allow shareholders to give their voting instructions and to confirm that shareholders'shareholders’ instructions have been recorded properly. The Company has been advised that the Internet and telephone proxy authorization procedures that have been made available are consistent with the requirements of applicable law. Shareholders authorizing their proxies via the Internet or by telephone should understand that there may be costs associated with voting in these manners, such as charges forfrom Internet access providers and telephone companies, that must be borne by the shareholder. HOUSEHOLDING OF ANNUAL MEETING MATERIALS
Some banks, brokers, broker-dealers and other similar organizations acting as nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of this proxy statement may have been sent to multiple shareholders in your household. If you would prefer to receive separate copies of a proxy statement or annual report for other shareholders in your household, either now or in the future, please contact your bank, broker, broker-dealer or other similar organization serving as your nominee. Upon written or oral request by a shareholder of record to the Company at 888 Seventh Avenue, New York, New York 10019, or via telephone at 212-894-7000, the Company will provide separate copies of the annual report and/or this proxy statement to such shareholder. If a shareholder of record receives multiple copies of the annual report and/or this proxy statement, he or she may request householding in the future by contacting the Company at 888 Seventh Avenue, New York, New York 10019 or calling 212-894-7000.
ADVANCE NOTICE FOR SHAREHOLDER NOMINATIONS AND SHAREHOLDER PROPOSALS The Bylaws of the Company currently provide that in order for a shareholder to nominate a candidate for election as a Trustee at an Annual Meeting of Shareholders outside of the proxy access provision in the Bylaws described below or propose business for consideration at such meeting (other than a proposal for inclusion in the proxy statement for the Company’s Annual Meeting of Shareholders in 2025 pursuant to Rule 14a-8 under the Securities
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Exchange Act), notice must be givendelivered to the Secretary of the Company at our principal executive office no moreearlier than 120 daysthe 150th day, nor lesslater than 90 days5:00 p.m. Eastern time, on the 120th day, prior to the first anniversary of the date of the proxy statement of the preceding year'syear’s Annual Meeting and must include certain information specified in the Bylaws. As a result, any notice given by or on behalf of a shareholder pursuant to the provisions of our current Bylaws (other than the proxy access provision) must comply with the requirements of the Bylaws and must be delivered to the Secretary of the Company at the principal executive office of the Company, 888 Seventh Avenue, New York, New York 10019, betweennot earlier than November 10, 2024, and not later than 5:00 p.m. Eastern time on December 10, 2024.
Shareholders providing notice to the Company under the SEC’s rule 14a-19 who intend to solicit proxies in support of nominees other than the Company’s nominees for the 2025 Annual Meeting must comply with the above deadlines, the requirements of our current Bylaws and any additional requirements of Rule 14a-19(b), including January 19, 2017providing a statement that such shareholder intends to solicit the holders of common shares of beneficial interest representing at least 67% of the voting power of the common shares entitled to vote on the election of trustees in support of trustee nominees other than the Company’s nominees.
Shareholders who wish to submit a “proxy access” nomination for inclusion in our proxy statement in connection with our 2025 Annual Meeting of Shareholders must submit a written notice in compliance with the procedures and February 18, 2017. along with the other information required by our current Bylaws to the Secretary of the Company at the principal executive office of the Company, 888 Seventh Avenue, New York, New York 10019, not earlier than November 10, 2024, and not later than 5:00 p.m. Eastern time on December 10, 2024.
The Board of Trustees may amend the Bylaws from time to time. Shareholders interested in presenting a proposal for inclusion in the proxy statement for the Company'sCompany’s Annual Meeting of Shareholders in 20172025 may do so by following the procedures in Rule 14a-8 under the Securities Exchange Act of 1934.Act. To be eligible for inclusion, shareholder proposals must be received at the
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principal executive office of the Company, 888 Seventh Avenue, New York, New York 10019, Attention: Secretary, not later than December 10, 2024.
By Order of the Board of Trustees,
Steven J. Borenstein
Secretary
New York, New York
April 9, 2016. | | |
| | By Order of the Board of Trustees, |
| | Alan J. Rice
Secretary
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| | New York, New York
April 8, 2016
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It is important that proxies be returned promptly. Please authorize your proxy over the Internet, by telephone or by requesting, executing and returning a proxy card or voting instruction form.
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ANNEX A
CORPORATE GOVERNANCE GUIDELINES
I. Introduction
The Board of Trustees (the "Board") of Vornado Realty Trust (the "Trust"), acting on the recommendation of its Corporate Governance and Nominating Committee, has developed and adopted a set of corporate governance principles (the "Guidelines") to promote the functioning of the Board and its committees and to set forth a common set of expectations as to how the Board should perform its functions. These Guidelines are in addition to the Trust's Amended and Restated Declaration of Trust and Amended and Restated Bylaws, in each case as amended. References to the masculine, feminine or neuter gender herein shall be deemed to include the others whenever the context so indicates or requires.
II. Board Composition
The composition of the Board should balance the following goals:
nThe size of the Board should facilitate substantive discussions of the whole Board in which each Trustee can participate meaningfully;
nThe composition of the Board should encompass a broad range of skills, expertise, industry knowledge, diversity of opinion and contacts relevant to the Trust's business; and
nA majority of the Board shall consist of Trustees who the Board has determined are "independent" under the Corporate Governance Rules (the "NYSE Rules") of The New York Stock Exchange, Inc. (the "NYSE").
III. Selection of Chairman of the Board and Chief Executive Officer
The Board is free to select its Chairman and the Trust's Chief Executive Officer in the manner it considers in the best interests of the Trust at any given point in time. These positions may be filled by one individual or by two different individuals.
IV. Selection of Trustees
Nominations. The Board is responsible for selecting the nominees for election to the Board. The Corporate Governance and Nominating Committee is responsible for recommending to the Board a slate of Trustees or one or more nominees to fill vacancies occurring between annual meetings of shareholders. The Corporate Governance and Nominating Committee may, in its discretion, work or otherwise consult with members of management of the Trust in preparing the Corporate Governance and Nominating Committee's recommendations.
Criteria. The Board should, based on the recommendation of the Corporate Governance and Nominating Committee, consider new nominees for the position of independent Trustee on the basis of the following criteria:
nPersonal qualities and characteristics, accomplishments and reputation in the business community;
nCurrent knowledge and contacts in the communities in which the Trust does business and in the Trust's industry or other industries relevant to the Trust's business;
nAbility and willingness to commit adequate time to Board and committee matters;
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nThe fit of the individual's skills and personality with those of other Trustees and potential Trustees in maintaining a Board that is effective, collegial and responsive to the interests of the Trust; and
nDiversity of viewpoints, experience and other demographics (including race, age and gender). The Trust is committed to including persons of diverse backgrounds in candidate pools when seeking new members of the Board. However, nomination of a candidate should not be based solely on these factors.
Independence Standards. To qualify as independent under the NYSE Rules, the Board must affirmatively determine that a Trustee has no material relationship with the Trust and/or its consolidated subsidiaries. The Board has adopted the following categorical standards to assist it in making determinations of independence. For purposes of these standards, references to the "Trust" mean Vornado Realty Trust and its consolidated subsidiaries.
The following relationships have been determined not to be material relationships that would categorically impair a Trustee's ability to qualify as independent:
1.Payments to and from other organizations. A Trustee's or his immediate family member's status as executive officer or employee of an organization that has made payments to the Trust, or that has received payments from the Trust, not in excess of the greater of:
(i)$1 million; or
(ii)2% of the other organization's consolidated gross revenues for the fiscal year in which the payments were made.
In the case where an organization has received payments that ultimately represent amounts due to the Trust and such amounts are not due in respect of property or services from the Trust, these payments will not be considered amounts paid to the Trust for purposes of determining (i) and (ii) above so long as the organization does not retain any remuneration based upon such payments.
2.Beneficial ownership of the Trust's equity securities. Beneficial ownership by a Trustee or his immediate family member of not more than 10% of the Trust's equity securities. A Trustee or his immediate family member's position as an equity owner, director, executive officer or similar position with an organization that beneficially owns not more than 10% of the Trust's equity securities.
3.Common ownership with the Trust. Beneficial ownership by, directly or indirectly, a Trustee, either individually or with other Trustees, of equity interests in an organization in which the Trust also has an equity interest.
4.Directorships with, or beneficial ownership of, other organizations. A Trustee's or his immediate family member's interest in a relationship or transaction where the interest arises from either or both of:
(i)his or his family member's position as a director with an organization doing business with the Trust; or
(ii)his or his family member's beneficial ownership in an organization doing business with the Trust so long as the level of beneficial ownership in the organization is 25% or less, or less than the Trust's beneficial ownership in such organization, whichever is greater.
5.Affiliations with charitable organizations. The affiliation of a Trustee or his immediate family member with a charitable organization that receives contributions from the Trust, or an affiliate of the Trust, so long as such contributions do not exceed for a particular fiscal year the greater of:
(i)$1 million; or
(ii)2% of the organization's consolidated gross revenues for that fiscal year.
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6.Relationships with organizations to which the Trust owes money. A Trustee's or his immediate family member's status as an executive officer or employee of an organization to which the Trust was indebted at the end of the Trust's most recent fiscal year so long as that total amount of indebtedness is not in excess of 5% of the Trust's total consolidated assets.
7.Relationships with organizations that owe money to the Trust. A Trustee's or his immediate family member's status as an executive officer or employee of an organization which is indebted to the Trust at the end of the Trust's most recent fiscal year so long as that total amount of indebtedness is not in excess of 15% of the organization's total consolidated assets.
8.Personal indebtedness to the Trust. A Trustee's or his immediate family member's being indebted to the Trust at any time since the beginning of the Trust's most recently completed fiscal year so long as such amount does not exceed the greater of:
(i)$1 million; or
(ii)2% of the individual's net worth.
9.Leasing or retaining space from the Trust. The leasing or retaining of space from the Trust by:
(i)a Trustee;
(ii)a Trustee's immediate family member; or
(iii)an affiliate of a Trustee or an affiliate of a Trustee's immediate family member;
so long as in each case the rental rate and other lease terms are at market rates and terms in the aggregate at the time the lease is entered into or, in the case of a non-contractual renewal, at the time of the renewal.
10.Other relationships that do not involve more than $100,000. Any other relationship or transaction that is not covered by any of the categorical standards listed above and that does not involve payment of more than $100,000 in the most recently completed fiscal year of the Trust.
11.Personal relationships with management. A personal relationship between a Trustee or a Trustee's immediate family member and a member of the Trust's management.
12.Partnership and co-investment relationships between or among Trustees. A partnership or co-investment relationship between or among a Trustee or a Trustee's immediate family member and other members of the Trust's Board of Trustees, including management Trustees, so long as the existence of the relationship has been previously disclosed in the Trust's reports and/or proxy statements filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.
The fact that a particular transaction or relationship falls within one or more of the above categorical standards does not eliminate a Trustee's obligation to disclose the transaction or relationship to the Trust, the Board of Trustees or management as and when requested for public disclosure and other relevant purposes. For relationships that are either not covered by or do not satisfy the categorical standards above, the determination of whether the relationship is material and therefore whether the Trustee qualifies as independent may be made by the Corporate Governance and Nominating Committee or the Board. The Trust shall explain in the annual meeting proxy statement immediately following any such determination the basis for any determination that a relationship was immaterial despite the fact that it did not meet the foregoing categorical standards.
Invitation. The invitation to join the Board should be extended by the Board itself via the Chairman of the Board and CEO of the Trust, together with an independent Trustee, when deemed appropriate.
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Orientation and Continuing Education. Management, working with the Board, will provide an orientation process for new Trustees, including background material on the Trust, its business plan and its risk profile, and meetings with senior management. Members of the Board are required to undergo continuing education as recommended by the NYSE. In connection therewith, the Trust will reimburse Trustees for all reasonable costs associated with the attendance at or the completion of any continuing education program supported, offered or approved by the NYSE or approved by the Trust.
V. Term Limits
The Board does not believe it should establish term limits.
VI. Retirement of Trustees
The Board believes it should not establish a mandatory retirement age.
VII. Board Meetings
The Board currently plans at least four meetings each year, with further meetings to occur (or action to be taken by unanimous written consent) at the discretion of the Board. The meetings will usually consist of committee meetings and the Board meeting.
The agenda for each Board meeting will be established by the Chairman and CEO, with assistance of the Lead Trustee, the Trust's Secretary and internal Corporation Counsel. Any Trustee may suggest the inclusion of additional subjects on the agenda. Management will seek to provide to all Trustees an agenda and appropriate materials in advance of meetings, although the Board recognizes that this will not always be consistent with the timing of transactions and the operations of the business and that in certain cases it may not be possible.
Materials presented to the Board or its committees should be as concise as possible, while still providing adequate information for the Trustees to make an informed judgment.
VIII. Executive Sessions
To ensure free and open discussion and communication among the non-management Trustees, the non-management Trustees will meet in executive sessions periodically, with no members of management present. Non-management Trustees who are not independent under the NYSE Rules may participate in these executive sessions, but the independent Trustees should meet separately in executive session at least once per year.
At any time that the independent Trustees have not appointed a Lead Trustee or the Lead Trustee is not present, the participants in any executive sessions will select by majority vote of those attending a presiding Trustee for such sessions or any such session.
In order that interested parties may be able to make their concerns known to the non-management Trustees, the Trust shall disclose a method for such parties to communicate directly with the Lead Trustee or the non-management Trustees as a group. For the purposes hereof, communication through a third party such as an external lawyer or a third-party vendor who relays information to non-management members of the Board will be considered direct.
IX. The Committees of the Board
The Trust shall have at least the committees required by the NYSE Rules. Currently, these are the Audit Committee, the Compensation Committee and a nominating/corporate governance committee, which in our Trust is called the Corporate Governance and Nominating Committee. Each of these three committees must have a written charter satisfying the rules of the NYSE.
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All Trustees, whether members of a committee or not, are invited to make suggestions to a committee chair for additions to the agenda of his or her committee or to request that an item from a committee agenda be considered by the Board. Each committee chair will give a periodic report of his or her committee's activities to the Board.
Each of the Corporate Governance and Nominating Committee, the Audit Committee and the Compensation Committee shall be composed of at least such number of Trustees as may be required by the NYSE Rules who the Board has determined are "independent" under the NYSE Rules. Any additional qualifications for the members of each committee shall be set out in the respective committee's charter. A Trustee may serve on more than one committee for which he or she qualifies.
Each committee may take any action in a meeting of the full Board, and actions of the Board, including the approval of such actions by a majority of the members of the Committee, will be deemed to be actions of that committee. In such circumstance only the votes cast by members of the committee shall be counted in determining the outcome of the vote on matters upon which the committee acts.
X. Management Succession
At least annually, the Board shall review and concur in a succession plan, developed by management, addressing the policies and principles for selecting a successor to the CEO, both in an emergency situation and in the ordinary course of business. The succession plan should include an assessment of the experience, performance, skills and planned career paths for possible successors to the CEO.
XI. Lead Trustee
The independent Trustees will annually elect an independent Trustee to serve as Lead Trustee. The Lead Trustee will serve as a resource to the Chairman and to the other independent Trustees, coordinating the activities of the independent Trustees. The Lead Trustee will perform such other duties and responsibilities as the Board may determine.
The Board has determined that the Lead Trustee should have the following specific duties and responsibilities:
(i)Preside at all meetings of the Board at which the Chairman is not present, including executive sessions of the independent Trustees;
(ii)Serve as liaison between the Chairman and the independent Trustees;
(iii)Consult with the Chairman regarding and approving:
(a)an appropriate schedule of Board meetings;
(b)agenda items; and
(c)materials sent in advance of Board meetings, provided that all Trustees may suggest items for inclusion on the agenda; and
(iv)Call meetings of the independent Trustees when necessary or appropriate.
In addition, if requested by major shareholders, the Lead Trustee will ensure that he or she is available for consultation and direct communication.
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XII. Executive Compensation
Evaluating and Approving Compensation for the CEO. The Board, acting through the Compensation Committee, annually evaluates the performance of the CEO and the Trust against the Trust's goals and objectives and approves the compensation level of the CEO.
Evaluating and Approving Compensation of Management. The Board, acting through the Compensation Committee, evaluates and approves the proposals for overall compensation policies applicable to executive officers.
XIII. Board Compensation
The Board should conduct a review at least once every three years of the components and amount of Trustee compensation in relation to other similarly situated companies. Trustee compensation should be consistent with market practices but should not be set at a level that would call into question the Board's objectivity.
XIV. Prohibition on Short Sales
In accordance with Federal securities laws, the Trust should prohibit short sales by its executive officers of its equity securities.
XV. Expectations of Trustees
The business and affairs of the Trust are managed under the direction of the Board in accordance with Maryland law. In performing his or her duties, the primary responsibility of each Trustee is to exercise his or her business judgment in a manner he or she reasonably believes to be in the best interests of the Trust. The Board has developed the following specific expectations of Trustees to promote the discharge of this responsibility and the efficient conduct of the Board's business.
Commitment and Attendance. All independent and management Trustees should make every reasonable effort to attend meetings of the Board and meetings of committees of which they are members. Members may attend by telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. The Board may act by unanimous written consent in lieu of a meeting.
Participation in Meetings. Each Trustee should be sufficiently familiar with the business of the Trust, including its financial statements and capital structure, and the risks and competition it faces, to facilitate active and effective participation in the deliberations of the Board and of each committee on which he or she serves. Upon request, management will make appropriate personnel available to answer any questions a Trustee may have about any aspect of the Trust's business. Trustees should also review the materials provided by management and advisors in advance of the meetings of the Board and its committees and should arrive prepared to discuss the issues presented.
Loyalty and Ethics. Each Trustee should act in good faith. This duty mandates that the best interests of the Trust take precedence over any interests of a Trustee.
The Trust has adopted a Code of Business Conduct and Ethics (the "Code"), including a compliance program to enforce the Code. Certain portions of the Code deal with activities of Trustees, particularly with respect to transactions in securities of the Trust, potential conflicts of interest, the taking of corporate opportunities for personal use, and competing with the Trust. Each Trustee should be familiar with the Code's provisions in these areas and should consult with any member of the Trust's Corporate Governance and Nominating Committee or the Trust's internal Corporation Counsel in the event of any concerns. The Corporate Governance and Nominating Committee is ultimately responsible for applying the Code to specific situations and has the authority to interpret the Code in any particular situation.
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Other Directorships. The Board values the experience Trustees bring from other boards on which they serve, but recognizes that those boards may also present demands on a Trustee's time and availability and may present conflicts or legal issues. A Trustee should advise the Chairman of the Corporate Governance and Nominating Committee and the CEO before accepting membership on other boards of directors or other significant commitments involving affiliation with other businesses or governmental units.
Contact with Management. Trustees have complete access to senior management and management information. Management will be responsive to requests for information from Trustees. The Board encourages the Chief Executive Officer, from time to time, to bring to Board meetings managers who can provide additional insight into the items being discussed. Any other meetings or contacts with officers or employees that a Trustee wishes to initiate may be arranged through the Chief Executive Officer or the Corporate Secretary or directly by the Trustee. The Trustees will use their judgment to ensure that any such contact is not disruptive to the business operations of the Trust, and will, to the extent not inappropriate, copy the Chief Executive Officer on any written communications between a Trustee and an officer or employee of the Trust.
Contact with Other Constituencies. It is important that the Trust speaks to employees and outside constituencies with a single voice, and that management serve as the primary spokesperson.
Confidentiality. The proceedings and deliberations of the Board and its committees are confidential. Each Trustee shall maintain the confidentiality of information received in connection with his or her service as a Trustee.
XVI. Evaluating Board Performance
The Board, acting through the Corporate Governance and Nominating Committee, should conduct a self-evaluation at least annually to determine whether it is functioning effectively. The Corporate Governance and Nominating Committee should periodically consider the mix of skills and experience that Trustees bring to the Board to assess whether the Board has the necessary tools to perform its oversight function effectively.
Each committee of the Board should conduct a self-evaluation at least annually and report the results to the Board, acting through the Corporate Governance and Nominating Committee. Each committee's evaluation must compare the performance of the committee with the requirements of its written charter, if any.
XVII. Reliance on Management and Outside Advice
In performing its functions, the Board is entitled to rely on the advice, reports and opinions of management, counsel, accountants, auditors and other expert advisors. The Board has the authority to retain and approve the fees and retention terms of its outside advisors.
XVIII. Trustee Resignation Policy
The Bylaws of the Trust provide that a nominee for election as a Trustee is elected by a plurality of votes cast. Notwithstanding such vote requirement, any nominee in an uncontested election who does not receive a greater number of "for" votes than votes "withhold" shall be elected as a Trustee but shall promptly tender to the Board his or her offer of resignation from the Board following certification of the vote. A contested election is one in which (i) the Secretary of the Trust receives a notice pursuant to these Bylaws that a shareholder intends to nominate a person or persons for election and (ii) such proposed nomination has not been withdrawn by such shareholder on or prior to the tenth day preceding the date on which the Trust first mails its notice of meeting for such meeting to the shareholders. The Corporate Governance and Nominating Committee shall consider the offer to resign and shall recommend to the Board the action to be taken in response to the offer. In determining its recommendation to the Board, the Corporate Governance and Nominating Committee may consider all factors deemed relevant by the members of the Corporate Governance and Nominating Committee, which may include, without limitation, (i) the stated reason or reasons, if any, why shareholders withheld votes for such Trustee's election, (ii) the qualifications of the Trustee (including, for example, whether the Trustee serves on the Audit Committee of the Board as an "audit
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committee financial expert" and whether there are one or more other Trustees qualified, eligible and available to serve on the Audit Committee in such capacity), (iii) whether the resignation would cause the Trust to be in violation of any of its constituent documents, any legal or regulatory requirements, agreements, or the rules of any national securities exchange on which its securities are then listed, and (iv) whether the Trustee's resignation from the Board would be in the best interests of the Trust. The Corporate Governance and Nominating Committee also may consider a range of possible alternatives concerning the Trustee's offer to resign as the members of the Corporate Governance and Nominating Committee deem appropriate. In considering the Committee's recommendation, the Board may consider the information, factors and alternatives considered by the Committee and such additional information, factors and alternatives as the Board deems relevant. Each Trustee, whether acting as a member of the Corporate Governance and Nominating Committee or as a member of the Board, may give such weight to any of the foregoing factors as he or she deems appropriate.
The Board shall take action no later than the next regularly scheduled Board meeting to be held no earlier than ten days after the date of the election, unless such action would cause the Trust to fail to comply with any requirement of the New York Stock Exchange or any rule or regulation promulgated under the Securities Exchange Act of 1934, in which event the Board shall take action as promptly as is practicable while continuing to meet such requirements. The Board will promptly disclose its decision and the reasons therefor in a Form 8-K furnished to the Securities and Exchange Commission.
No Trustee whose offer to resign, in accordance with this policy, is required to be considered by the Board shall participate in the Corporate Governance and Nominating Committee's deliberations or recommendation, or in the Board's deliberations or determination, with respect to accepting or rejecting his or her offer to resign as a Trustee.
If each member of the Corporate Governance and Nominating Committee is required to offer to resign pursuant to this policy, the Board may appoint a special committee composed of Trustees who are not so required to offer to resign to consider the offers to resign and recommend to the Board whether to accept any or all of them. In the event that every Trustee is required to offer to resign pursuant to this policy, the Board shall make a final determination whether to accept any or all offers to resign.
If the offer to resign is not accepted, the Trustee will continue to serve until the expiration of his or her term and his or her successor is duly elected and qualifies or until the Trustee's earlier resignation or removal.
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ANNEX B
VORNADO REALTY TRUST
ARTICLES OF AMENDMENT
Vornado Realty Trust, a Maryland real estate investment trust (the "Company"), hereby certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: The Declaration of Trust of the Company (the "Declaration") is hereby amended by deleting Section 2.2 in its entirety and inserting the following in lieu thereof:
The Trustees elected at the 2016 annual meeting of Shareholders shall serve until the 2019 annual meeting of Shareholders and until their respective successors are duly elected and qualify. At the 2017 annual meeting of Shareholders, each of the successors to the Trustees whose terms expire at the 2017 annual meeting of Shareholders shall be elected to serve until the 2018 annual meeting of Shareholders and until their respective successors are duly elected and qualify. At the 2018 annual meeting of Shareholders, each of the successors to the Trustees whose terms expire at the 2018 annual meeting of Shareholders shall be elected to serve until the 2019 annual meeting of Shareholders and until their respective successors are duly elected and qualify. Beginning with the 2019 annual meeting of Shareholders, all Trustees shall be elected to serve until the next annual meeting of Shareholders and until their respective successors are duly elected and qualify.
SECOND: The amendment to the Declaration as set forth above has been duly advised by the Board of Trustees of the Company and approved by the shareholders of the Company as required by law.
THIRD: The undersigned officer acknowledges these Articles of Amendment to be the trust act of the Company and, as to all matters of facts required to be verified under oath, the undersigned officer acknowledges that, to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Company has caused these Articles of Amendment to be signed in its name and on its behalf by its and attested to by its Secretary on this day of , 2016.
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888 Seventh Avenue, New York, New York 10019
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SCAN TO VIEW MATERIALS & VOTE w SCAN TO VORNADO REALTY TRUST 888 SEVENTH AVENUE NEW YORK, NY 10019 VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.on May 22, 2024. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would likeDuring The Meeting - Go to reducewww.virtualshareholdermeeting.com/VNO2024 You may attend the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years.the box marked by the arrow available and follow the instructions. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date.on May 22, 2024. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge,Broadrid ge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E02049-P72571V34583-P05709 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY VORNADO REALTY TRUST The Boar d of Trustees r ecommends you vote FOR the following: For Withhold AllAll For All Except To withhold authority to vote for any individual The Board of Trustees recommends you vote FOR the following: All All Except nominee(s), mark “For"For All Except”Except" and write the number(s) of the nominee(s) on the line below. ! ! ! 1. Election of Trustees Nominees: 01) Steven Roth 02) 03) Candace K. Beinecke Robert P. Kogod Richard03) Michael D. Fascitelli 04) Beatrice Hamza Bassey 05) William W. Helman IV ! ! ! 06) David M. Mandelbaum 07) Raymond J. McGuire 08) Mandakini Puri 09) Daniel R. WestTisch 10) Russell B. Wight, Jr. The Board of Trustees recommends you vote FOR proposals 2 3 and 4.3. For Against Abstain ! ! ! ! ! ! ! ! ! 2. RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR ! ! ! THE CURRENT FISCAL YEAR. APPROVAL OF AN AMENDMENT TO THE DECLARATION OF TRUST TO ELIMINATE THE CLASSIFICATION OF THE BOARD OF TRUSTEES. 3. 4. NON-BINDING, ADVISORY VOTE TO APPROVERESOLUTION ON EXECUTIVE COMPENSATION. ! ! ! NOTE: SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY POSTPONEMENT OR ADJOURNMENT THEREOF. ! For address changes and/or comments, please check this box and write them on the back where indicated. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
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Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-KAnnual Report are available at www.proxyvote.com. E02050-P72571V34584-P05709 VORNADO REALTY TRUST This proxyProxy is solicited on behalf of the Board of Trustees for the 20162024 Annual Meeting of Shareholders May 19, 201623, 2024 11:30 A.M. The undersigned shareholder, revoking all prior proxies, hereby appoints Steven Roth and Michael D. Fascitelli,J. Franco, or either of them, as proxies for the undersigned, each with full power of substitution, to attend and participate in the Annual Meeting of Shareholders of Vornado Realty Trust, a Maryland real estate investment trust (the "Company"), to be held at the Saddle Brook Marriott, Interstate 80 and the Garden State Parkway, Saddle Brook, New Jersey 07663 on Thursday, May 19, 201623, 2024 at 11:30 A.M., local time,New York Time, and any postponements or adjournments thereof, to cast on behalf of the undersigned all votes that the undersigned is entitled to cast at such meeting and otherwise represent the undersigned at the meeting with all powers possessed by the undersigned if personally present at the meeting. Each proxy is authorized to vote as directed on the reverse side hereof upon the proposals which are more fully set forth in the Proxy Statement and otherwise in his discretion upon such other business as may properly come before the meeting and all postponements or adjournments thereof, all as more fully set forth in the Notice of Annual Meeting of Shareholders and Proxy Statement.Statement, which are incorporated by reference. Receipt of the Notice of Annual Meeting of Shareholders, the Proxy Statement in connection with such meeting and the 20152023 Annual Report to Shareholders is hereby acknowledged. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF THIS PROXY IS EXECUTED BUT NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED (1) "FOR" THE ELECTION OF EACH NOMINEE FOR TRUSTEE, (2) "FOR" THE RATIFICATION OF THE SELECTION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, (3) "FOR" THE APPROVAL OF AN AMENDMENT TO THE DECLARATION OF TRUST TO ELIMINATE THE CLASSIFICATION OF THE BOARD OF TRUSTEES AND (4)(3) "FOR" THE NON-BINDING, ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION. THE VOTES ENTITLED TO BE CAST BY THE UNDERSIGNED WILL BE CAST IN THE DISCRETION OF THE PROXY HOLDER ON ANY OTHER MATTERS THAT MAY COME BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side Address Changes/Comments:
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2016 PROXY STATEMENT SUMMARYGrowth in TSRAdvisory Resolution on Executive CompensationCORPORATE GOVERNANCE GUIDELINESVORNADO REALTY TRUST ARTICLES OF AMENDMENTDEF 14A false 0000899689 iso4217:USD xbrli:shares
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