DEF 14A of SL Green Realty Corp
Filed Apr 19, 2024 · FY20230001104659-24-049497
INFORMATION REGARDING THE DIRECTOR NOMINEES
INFORMATION REGARDING THE DIRECTOR NOMINEES The following table, matrix and biographical descriptions set forth certain information with respect to the nominees for election as directors at the 2024 Annual Meeting, based upon information furnished by each director.
INFORMATION REGARDING THE DIRECTOR NOMINEES
| | Name | Other Current Public Board Directorships | Age | Independent | Director Since | Committee Memberships(1) | | | | | | | | | | | AC | CC | NCGC | EC | | | John H. Alschuler | • Xenia Hotels and Resorts • The Macerich Company | 76 | | 1997 | | | M | M | | | Carol N. Brown | | 54 | | 2022 | | M | M | | | | Lauren B. Dillard | | 48 | | 2016 | M | C | | | | | Stephen L. Green | | 86 | | 1997 | | | | M | | | Craig M. Hatkoff | • Jaguar Global Growth Corporation I • Captivision Inc. | 70 | | 2011 | M | | C | | | | Marc Holliday | | 57 | | 2001 | | | | C | | | Andrew W. Mathias | | 50 | | 2014 | | | | M |
INFORMATION REGARDING THE DIRECTOR NOMINEES
| C = Chair | AC = Audit Committee | NCGC = Nominating and Corporate Governance Committee | | M = Member | CC = Compensation Committee | EC = Executive Committee |
INFORMATION REGARDING THE DIRECTOR NOMINEES
If our full slate of director nominees is elected at the Annual Meeting, then following the Annual Meeting, Board committee membership will be as follows: Audit Committee—Lauren B. Dillard (Chair), Carol N. Brown and Craig M. Hatkoff; Compensation Committee—Lauren B. Dillard (Interim Chair), John H. Alschuler and Carol N. Brown; Nominating and Corporate Governance Committee—Craig M. Hatkoff (Chair), John H. Alschuler and Carol N. Brown; and Executive Committee—Marc Holliday (Chair), John H. Alschuler, Steven L. Green and Andrew W. Mathias. Ms. Dillard will chair the Compensation Committee on an interim basis following the Annual Meeting, pending the appointment of a replacement chairperson.
INFORMATION REGARDING THE DIRECTOR NOMINEES
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 13 |
INFORMATION REGARDING THE DIRECTOR NOMINEES
The matrix below represents some of the key skills that our Board has identified as particularly valuable to the effective oversight of the Company and the execution of our strategy. This matrix highlights the depth and breadth of skills of our director nominees.
INFORMATION REGARDING THE DIRECTOR NOMINEES
| | Skills, Experiences and Attributes | Alschuler | Brown | Dillard | Green | Hatkoff | Holliday | Mathias | | | Executive Leadership | | | | | | | | | | Finance/Capital Markets | | | | | | | | | | Risk Management | | | | | | | | | | Public Company Board Service/ Corporate Governance | | | | | | | | | | REIT/Real Estate Industry | | | | | | | | | | Experience Over Several Business Cycles | | | | | | | | | | Talent Management | | | | | | | | | | Academia | | | | | | | | | | Accounting | | | | | | | | | | Government/Regulatory Experience | | | | | | | | | | Technology/Cybersecurity | | | | | | | | | | Diversity | | | | | | | |
INFORMATION REGARDING THE DIRECTOR NOMINEES
Following the Annual Meeting, our Board will include two female directors, including one racially/ethnically diverse director.
INFORMATION REGARDING THE DIRECTOR NOMINEES
| 14 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Director Nominees
Director Nominees
Director Nominees
| JOHN H. ALSCHULER Lead Independent Director Director Since: 1997 Age: 76 SL Green Board Service: • Nominating and Corporate Governance Committee • Executive Committee |
Director Nominees
Mr. Alschuler’s achievements in academia and business, as well as his extensive knowledge of commercial real estate, New York City’s economy, commercial and other markets in New York City and national and international markets for real estate, and his expertise in inter-governmental relations, provide the Board with the ability to assess the real estate market and the Company’s business from a knowledgeable and informed perspective, from which he provides valuable insights into the Company’s business.
Professional Experience
Professional Experience • Executive Chairman of Therme Group US, a privately-held company which designs, builds and operates large scale well-being facilities, since 2022 • Chair of HR&A Advisors Inc., an economic development, real-estate and public policy consulting organization, from 2008 to 2021 • Adjunct Associate Professor, Graduate School of Architecture, Planning & Preservation at Columbia University, teaching real estate development • Board of Directors of the Center for an Urban Future, Friends of the High Line Inc., and the Sag Harbor Cinema Arts Center, each a 501(c)(3) tax-exempt organization • B.A. degree from Wesleyan University and Ed.D. degree from the University of Massachusetts at Amherst
Other Public Board Directorships
Other Public Board Directorships • Xenia Hotels and Resorts, Inc. since 2015 • The Macerich Company since 2015
Other Public Board Directorships
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | Public Company Board Service/ Corporate Governance | | | REIT/Real Estate Industry | | Experience Over Several Business Cycles | | | Talent Management | | Academia | | | Government/Regulatory Experience | | |
Other Public Board Directorships
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 15 |
Other Public Board Directorships
| CAROL N. BROWN Independent Director Director Since: 2022 Age: 54 SL Green Board Service: • Compensation Committee • Nominating and Corporate Governance Committee |
Other Public Board Directorships
Ms. Brown’s extensive experience in academia, including teaching and writing in the areas of property, land use planning, real estate transactions, and housing law, contribute a unique and valuable perspective to the Board.
Professional Experience
Professional Experience • Professor at the University of Richmond School of Law since 2012, teaching Property Law Survey, Housing Law, Land Use Planning, and Real Estate Transactions • Former Professor at the University of North Carolina School of Law from 2008 to 2012 and Associate Professor from 2007 to 2008 • Former Associate Professor of Law at the University of Alabama School of Law, and Assistant Professor from 2001 to 2004 • Former Associate at Sirote & Permutt, P.C. in Birmingham, Alabama focusing on general business, real estate, and consumer finance • Former Associate at McGuire, Woods, Battle & Bootle, L.L.P. in Richmond, Virginia focusing on labor and employment discrimination • Former Judicial Law Clerk for the Honorable Sharon L. Blackburn, United States District Court, Northern District of Alabama • B.A. from Duke University and J.D./L.L.M. from Duke University School of Law
Professional Experience
| | Risk Management | | REIT/Real Estate Industry | | | Academia | | Government/Regulatory Experience | | | Technology/Cybersecurity | | Diversity |
Professional Experience
| 16 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Professional Experience
| LAUREN B. DILLARD Independent Director Director Since: 2016 Age: 48 SL Green Board Service: • Audit Committee • Compensation Committee, Chair |
Professional Experience
Ms. Dillard’s sophisticated understanding of tax, real estate, investment programs, finance, compensation and corporate governance, all viewed through the lens of over fifteen years of global private equity experience and together with her considerable operational expertise, provide the Board and the Company with deep and practical insight on a broad range of matters.
Professional Experience
Professional Experience • Senior Managing Director and Chief Financial Officer of Vista Equity Partners, a leading global investment firm focused exclusively on enterprise software, data and technology-enabled businesses, since April 2022 • Executive Vice President of Investment Intelligence of Nasdaq, Inc., a global technology firm serving the capital markets and other industries, from June 2019 to April 2022 • Managing Director for the Carlyle Group, a global alternative asset manager, from 2011 to May 2019, head of Carlyle’s Investment Solutions Group from December 2015 to May 2019, and member of Carlyle’s Management Committee; joined Carlyle in 2002 • Chief Operating Officer and Chief Financial Officer of Carlyle’s Investment Solutions Group from 2013 to December 2015; former head of Global Tax Department and head of Global Equity Programs; and member of Carlyle’s Transaction Team where she played a significant role in transactions, including Carlyle’s initial public offering • Served in the Real Estate and Financial Services Group of the Tax Practice of Arthur Andersen, LLP prior to 2002 • B.S. in business administration from the University of Richmond
Professional Experience
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | Public Company Board Service/ Corporate Governance | | | REIT/Real Estate Industry | | Experience Over Several Business Cycles | | | Talent Management | | Accounting | | | Technology/Cybersecurity | | Diversity |
Professional Experience
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 17 |
Professional Experience
| STEPHEN L. GREEN Director Director Since: 1997 Age: 86 SL Green Board Service: • Executive Committee |
Professional Experience
In addition to his industry-wide reputation, Mr. Green’s extensive skills and experience in real estate, including founding our predecessor company, provide the Board with invaluable knowledge of and expertise in our business and industry. This experience, particularly his experience having led our predecessor and the Company, contributes depth and context to the Board’s discussions of the Company’s business.
Professional Experience
Professional Experience • Chairman Emeritus at the Company since January 2019 • Chairman of the Board of the Company from 1997 through January 2019 • Former executive officer working in conjunction with our Chief Executive Officer and overseeing the Company’s long-term strategic direction; formerly served as our Chief Executive Officer • Founded our predecessor, S.L. Green Properties, Inc., in 1980; prior to our initial public offering in 1997, Mr. Green was involved in the acquisition of over 50 Manhattan office buildings containing in excess of 10.0 million square feet • Chairman of the Board of Gramercy Capital Corp. from August 2004 to June 2009 • At-large member of the Executive Committee of the Board of Governors of the Real Estate Board of New York • Member of the Board of Directors of Streetsquash, Inc., a Section 501(c)(3) tax-exempt organization • Previously member of the Board of Directors of Stemedica Cell Technologies, Inc., August 2007 to April 2009; Chairman of the Real Estate Board of New York’s Tax Committee • B.A. degree from Hartwick College and J.D. degree from Boston College Law School
Professional Experience
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | REIT/Real Estate Industry | | | Experience Over Several Business Cycles | | Talent Management | | | Government/Regulatory Experience | | |
Professional Experience
| 18 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Professional Experience
| CRAIG M. HATKOFF Independent Director Director Since: 2011 Age: 70 SL Green Board Service: • Audit Committee • Nominating and Corporate Governance Committee, Chair |
Professional Experience
Mr. Hatkoff has in-depth expertise and knowledge of real estate, capital markets, finance, private investing, entrepreneurship, and executive management through his work with Chemical Bank, Victor Capital Group, and Capital Trust. As a result of the foregoing, Mr. Hatkoff provides the Board with unique insight into the financial markets generally, valuation analysis, strategic planning, and unique financing structures and alternatives. He also possesses entrepreneurial, brand marketing, social media, technology and innovation, and senior leadership experience through his private investments and service on the Boards of numerous educational and charitable organizations. Mr. Hatkoff also has extensive Board and Board committee experience at other public companies, including his prior service at Taubman Centers, Inc. and his long-standing service to Capital Trust, Inc., which enables him to provide significant insight as to governance and compliance-related matters particular to real estate companies.
Professional Experience
Professional Experience • Vice Chairman of Capital Trust, Inc., a real estate investment management company that was listed on the New York Stock Exchange, and one of the largest dedicated real estate mezzanine lenders, from 1997 to 2000, and served on its Board of Directors from 1997 to 2010 • Trustee of the New York City School Construction Authority, the agency responsible for the construction of all public schools in New York City, from 2002 to 2005 • Founder and a managing partner of Victor Capital Group, L.P. from 1989 until its acquisition by Capital Trust, Inc. in 1997 • Former co-head of the real estate investment banking unit at Chemical Bank, where he was a pioneer in commercial mortgage securitization • Co-founder of the Tribeca Film Festival; Chairman of Turtle Pond Publications LLC, which is active in children’s publishing and entertainment, and private investor in other entrepreneurial ventures • Adjunct Professor at Columbia Business School • Colgate University Entrepreneur of the Year (2024) • Other Current or Previous Non-Profit Directorships: Sesame Workshop; Rock & Roll Hall of Fame; Mandela Institute for Humanity; Desmond Tutu Peace Foundation, Wildlife Direct; Tribeca Film Institute • Former member of the Board of Directors of Taubman Centers, Inc., 2004 to January 2019 and Colony Capital, Inc. from February 2019 to February 2021
Other Public Board Directorships
Other Public Board Directorships • Jaguar Global Growth Corporation I since February 2022 • Captivision since November 2023
Other Public Board Directorships
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | Public Company Board Service/ Corporate Governance | | | REIT/Real Estate Industry | | Experience Over Several Business Cycles | | | Talent Management | | Academia | | | Accounting | | Technology/Cybersecurity |
Other Public Board Directorships
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 19 |
Other Public Board Directorships
| MARC HOLLIDAY Chairman of the Board, Chief Executive Officer & Interim President Director Since: 2001 Age: 57 SL Green Board Service: • Executive Committee, Chair |
Other Public Board Directorships
Mr. Holliday’s extensive experience and skills in real estate and finance, as well as his role as Chief Executive Officer and Interim President of the Company, provide the Board with valuable knowledge of and expertise in our business and industry. Furthermore, Mr. Holliday’s role as Chairman and Chief Executive Officer facilitates communication between the Board and the Company’s senior management.
Professional Experience
Professional Experience • Chief Executive Officer of the Company since January 2004; Chairman of the Board since January 2019; Interim President of the Company since January 2024 • Joined the Company as Chief Investment Officer in July 1998; stepped down as President in April 2007 following promotion of Andrew Mathias to that position • President and Chief Executive Officer of Gramercy Capital Corp., from August 2004 to October 2008 • Managing Director and Head of Direct Originations for New York-based Capital Trust Inc., a mezzanine finance company, where he was in charge of originating direct principal investments for the firm, consisting of mezzanine debt, preferred equity and first mortgages • Served in various management positions, including Senior Vice President at Capital Trust, Inc.’s predecessor, Victor Capital Group, L.P. from 1991 to 1997 • Chairman of the Board of Directors of NYRA, Executive Committee member of the Real Estate Board of New York Board of Governors, and a former member of the Board of Directors of Columbia University • B.S. degree in Business and Finance from Lehigh University in 1988 and M.S. degree in Real Estate Development from Columbia University in 1990
Professional Experience
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | REIT/Real Estate Industry | | | Experience Over Several Business Cycles | | Talent Management | | | Government/Regulatory Experience | | |
Professional Experience
| 20 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Professional Experience
| ANDREW W. MATHIAS Director Director Since: 2014 Age: 50 SL Green Board Service: • Executive Committee |
Professional Experience
Mr. Mathias’ extensive experience in real estate, including commercial real estate investment, and in-depth knowledge of the New York City real estate market, as well as his former role as President of the Company, provide the Board with valuable knowledge of our business and industry.
Professional Experience
Professional Experience • Founder of Edge Park Mgmt. LLC, a general investment and advisory services firm, since January 2024 • Advisor to the Company since January 2024 • President of the Company from April 2007 until December 2023 • Joined the Company in March 1999 as Vice President and was promoted to Director of Investments in 2002 • Chief Investment Officer of the Company from January 2004 until January 2011 • Chief Investment Officer of Gramercy Capital Corp. from August 2004 to October 2008 • Worked at Capital Trust, Inc. and its predecessor, Victor Capital Group, L.P. • Worked on the high yield and restructuring desk at Bear Stearns and Co. • Member of the Board of Directors for the Regional Plan Association, which works to improve the prosperity, infrastructure, sustainability and quality of life of the New York-New Jersey-Connecticut metropolitan region • B.S. degree in Economics from the Wharton School at the University of Pennsylvania
Professional Experience
| | Executive Leadership | | Finance/Capital Markets | | | Risk Management | | REIT/Real Estate Industry | | | Experience Over Several Business Cycles | | Talent Management | | | Government/Regulatory Experience | | |
Professional Experience
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 21 |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Process
Director Compensation Process We review our director compensation annually, including engagement of FTI Consulting to evaluate the structure and competitiveness of our non-employee director compensation and recommend changes as appropriate. Based on these reviews, since 2019, we have reduced the value of the annual stock grant to directors by $65,000, or 21.7%, from $300,000 to $235,000, and reduced the cash retainer paid for serving as our Lead Independent Director by $15,000, or 17.6%, from $85,000 to $70,000. Most recently, in December 2023, the Compensation Committee again conducted a full review of our director compensation in consultation with FTI Consulting. No changes were implemented as a result of that review.
Elements of Director Compensation
Elements of Director Compensation Only non-employee Directors are compensated for service on the Board. During the fiscal year ended December 31, 2023, the fees for non-employee Directors were:
Elements of Director Compensation
| Annual cash retainers | | | Cash retainer | $50,000 | | Additional cash retainer if serving as the Lead Independent Director | $70,000 | | Additional cash retainer if serving as a chair of the Audit Committee | $25,000 | | Additional cash retainer if serving as a chair of the Compensation Committee | $20,000 | | Additional cash retainer if serving as a chair of the Corporate Governance Committee | $5,000 | | Meeting fees | | | For each meeting of the Board or a committee of the Board | $1,500 | | For each special meeting of the Audit Committee held independently of Board meetings | $4,000 | | Stock grant | | | Valued at the grant date with shares fully vested on such grant date. | $235,000 |
Elements of Director Compensation
The annual fees and meeting fees generally are payable quarterly in cash. Each director may elect to receive some or all of these fees in stock and, as noted below, may elect to defer some or all of these fees. Under our Non-Employee Directors’ Deferral Program, our non-employee directors were entitled to elect to defer up to 100% of their annual fees, meeting fees and annual stock grant. At each director’s election, cash fees deferred under the program could be credited in the form of either phantom stock units, account credits that accrue earnings or losses based on a 30-day SOFR-based rate at the beginning of each month plus 2.10% (or based on such other rate or the performance of such investments as may be determined in advance by the Board) or measurement fund credits that track the performance of one or more open-ended mutual funds selected by the director. Stock grants deferred under the program are credited in the form of phantom stock units. Subject to limitations contained in the program, on a fixed date each quarter, a director may convert phantom stock units into account credits or measurement fund credits or vice versa or change the mutual funds that some or all of the director’s measurement fund credits track. All cash fees credited as, and conversions of or into, phantom stock units or measurement fund credits are based on the fair market value of our common stock or the applicable mutual fund on the date the cash fees otherwise would have been paid or the date of the conversion, as applicable. Unless otherwise elected by a director, a director’s phantom stock units, account credits and measurement fund credits are payable on the earlier of the January 1st coincident with or next following the director’s termination of service from the Board, or a change in control of the Company, as defined by the program. Phantom stock units are payable in an equal number of shares of our common stock; provided that we may elect to instead settle a director’s phantom stock units by paying the director cash in an amount equal to the value of such shares of common stock. Account credits and measurement fund credits are payable in cash. Under the program, each director is entitled to receive dividend equivalents that are paid currently on the director’s phantom stock units, unless the director elected to defer payment of such dividend equivalents and have them concurrently reinvested into additional phantom stock units.
Elements of Director Compensation
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | 39 |
2023 Director Compensation
2023 Director Compensation Directors of the Company who are also employees receive no additional compensation for their services as directors. The following table sets forth information regarding the compensation paid to our non-employee directors for their service during the fiscal year ended December 31, 2023.
2023 Director Compensation
| Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Option Awards(3) ($) | All Other Compensation ($) | Total ($) | | John H. Alschuler | $79,500 | $235,000 | — | — | $314,500 | | Betsy S. Atkins | $75,500 | $235,000 | — | — | $310,500 | | Carol N. Brown | $63,500 | $235,000 | — | — | $298,500 | | Edwin T. Burton, III | $100,500 | $235,000 | — | — | $335,500 | | Lauren B. Dillard | $131,500 | $235,000 | — | — | $366,500 | | Stephen L. Green | $59,000 | $235,000 | — | $216,672(4) | $510,672 | | Craig M. Hatkoff | $83,500 | $235,000 | — | — | $318,500 | | John S. Levy(5) | $28,000 | $235,000 | — | — | $263,000 |
2023 Director Compensation
(1) Mr. Levy deferred all of his 2023 cash compensation and Mr. Alschuler deferred $33,750 of his 2023 cash compensation pursuant to our Non-Employee Directors’ Deferral Program. Mr. Levy elected to receive his deferred 2023 cash compensation in the form of phantom stock units and Mr. Hatkoff elected to receive $6,250 of his 2023 cash compensation in the form of shares of our common stock. Accordingly, our non-employee directors received the following phantom stock units or shares of our common stock with respect to the portion of their 2023 cash compensation that they elected to defer or receive in stock, as applicable: Mr. Levy received 1,004 units and Mr. Hatkoff received 183 shares. (2) Amounts shown reflect the full grant date fair value on the date of grant of shares of our common stock or phantom stock units granted to the directors in 2023, excluding shares of our common stock and phantom stock units credited in lieu of annual fees and meeting fees. (3) There were no stock options granted to members of the Board in 2023. (4) Represents monthly retainer fees paid pursuant to the chairman emeritus agreement we entered into with Mr. Green in connection with his retirement as Chairman of the Company in January 2019, as amended by a letter agreement in March 2022. Under the letter agreement, Mr. Green received reduced monthly retainer fees for 2022 and 2023, and ceased to receive any retainer fee beginning January 1, 2024. Further information on the agreement can be found in the section entitled “Certain Relationships and Related Party Transactions—Chairman Emeritus Agreement” on page 88. Mr. Levy retired as a director in June 2023.
2023 Director Compensation
| Director compensation has been unchanged since 2019, when we reduced the value of the annual stock grant to directors by $65,000, or 21.7%, from $300,000 to $235,000 and reduced the cash retainer paid for serving as our Lead Independent Director by $15,000, or 17.6%, from $85,000 to $70,000. |
Majority of 2023 Compensation Paid in Equity
| | CEO | Other NEOs | | Equity Compensation • Performance-Based Equity Awards • Time-Based Equity Awards • Annual Bonus Received in Equity | 83% | 84% | | Cash Compensation • Base Salary • Annual Bonus Received in Cash | 17% | 16% |
TOTAL DIRECT COMPENSATION FOR 2023
| | 2023 Direct Compensation | | | | | | Name | Base Salary | Annual Bonus(1) | Performance- Based Equity Awards(2) | Time-Based Equity Awards(2) | Total(3) | | Marc Holliday | $1,250,000 | $2,908,333 | $7,500,000 | $4,500,000 | $16,194,797 | | Matthew J. DiLiberto | $600,000 | $1,700,000 | $555,556 | $1,400,000 | $4,268,756 | | Andrew S. Levine | $580,000 | $900,000 | $555,556 | $1,300,000 | $3,348,756 |
ANNUAL BONUS ELIGIBILITY
ANNUAL BONUS ELIGIBILITY Formulaic Annual Bonus—CEO and CFO. Our annual bonus program is 100% formulaic for our CEO and 60% formulaic for our CFO. The percentages of base salary that can be earned under the program are set forth in each executive’s employment agreement. For 2023, each of our CEO and CFO were eligible to earn the following percentages of their respective base salary (with linear interpolation used to determine the percentage earned for performance that falls between threshold, target and/or maximum):
ANNUAL BONUS ELIGIBILITY
| Executive | Threshold | Target | Maximum | | Marc Holliday | 50% | 200% | 300% | | Matthew J. DiLiberto | 50% | 175% | 250% |
ANNUAL BONUS ELIGIBILITY
| Based on our performance relative to the objective bonus criteria established in January 2023, Mr. Holliday earned approximately 116% of his 2023 target bonus and Mr. DiLiberto earned approximately 111% of the formulaic component of his 2023 target bonus. |
ANNUAL BONUS ELIGIBILITY
The specific performance criteria for our formulaic annual bonus program are determined in January of each year by the Committee and are set forth below under “2023 Performance Summary.”
ANNUAL BONUS ELIGIBILITY
| EXECUTIVE COMPENSATION | 49 |
ANNUAL BONUS ELIGIBILITY
Discretionary Annual Bonus—CFO and General Counsel. For 2023, the employment agreement in effect with our CFO provides for a discretionary annual bonus equal to 40% of his total bonus opportunity. After calculating the formulaic component described above, such formulaic amount is then divided by 0.6, less the amount of the as-calculated formulaic component, to establish a non-formulaic bonus opportunity. Our CFO may then earn between 0% and 100% of the non-formulaic component as determined in the discretion of the Committee. For 2023, the Committee awarded $533,000 as the discretionary bonus, which is less than the maximum value ($778,000) of that component. The employment agreement with our General Counsel does not currently provide for formulaic percentages of base salary that can be earned and is 100% discretionary. For 2023, our CFO and General Counsel received the discretionary portions of their respective bonuses based on the same performance criteria that were used for our CEO and CFO’s formulaic annual bonus program, as well as specific company goals and objectives for 2023 that were presented at our annual investor conference in December 2022 and summarized earlier in this proxy statement. The relevant performance, criteria, goals, and objectives included financial goals, achievement of leasing and occupancy targets, investing activities such as strategic acquisitions and dispositions and share repurchases, execution of our debt and preferred equity platform, asset and corporate level leverage, joint venture and development milestones and furtherance of our other corporate goals and initiatives, many of which are key drivers of stockholder value. Despite a challenging operating environment, we successfully executed many aspects of our strategic vision against the backdrop of a New York City commercial real estate market and office REIT sector that saw many peers struggle. Our investment thesis was validated in 2023 as we saw our stock price perform on both an absolute basis, where we delivered a total return of over 48%, and a relative basis, where we outperformed the Dow Jones U.S. Real Estate Office Index by nearly 5,000 basis points. In addition, we significantly exceeded our anticipated 2023 same store NOI growth, achieving growth of 5.8%, almost double our stated goal of 3.0%. However, the Committee also considered our longer-term performance and, in particular, our negative multi-year stock price performance over the last three years. In addition to our financial and operational successes, we also achieved many of the other business goals we set out to achieve for 2023, including achieving key milestones relating to our One Madison, 760 Madison and 15 Beekman projects and signing approximately 1.8M square feet of Manhattan office leases. When determining discretionary bonus amounts, the Committee also took into account a number of other strategic initiatives. In particular, the Committee noted that senior management remained agile and prioritized short-term and long-term stockholder return ahead of certain goals, such as share repurchases and achieving targeted liquidity and debt reduction, that became less attractive as conditions evolved over the course of the year. These steps were taken even where pursuing such other goals might have increased the payout of earned performance-based awards and annual bonuses.
ANNUAL BONUS ELIGIBILITY
| The Committee recognized the significant contributions of our CFO and General Counsel to the organizational successes that we achieved during the year, and, in particular, the impact of elevated inflation and interest rates on our balance sheet and operating environment. Nevertheless, the Committee chose to award a discretionary bonus to our CFO of only approximately 69% of his total non-formulaic maximum opportunity, and to our General Counsel that was slightly lower than the bonus he received for 2022. |
Aggregate Annual Bonus Amounts
Aggregate Annual Bonus Amounts The table below summarizes the aggregate bonus amounts received by our named executive officers for 2023 on a formulaic, discretionary and aggregate basis. Mr. Holliday elected to receive 50% of his bonus in the form of LTIP units and Messrs. DiLiberto and Levine received 100% of their bonuses in the form of LTIP units based upon the discretion of the Committee. In lieu of an annual bonus for 2023, Mr. Mathias received payments pursuant to his employment agreement in connection with the non-renewal of such agreement.
Aggregate Annual Bonus Amounts
| Executive | Formulaic | Discretionary | Total Bonus | | Marc Holliday | $2,908,333 | — | $2,908,333 | | Matthew J. DiLiberto | $1,167,000 | $533,000 | $1,700,000 | | Andrew S. Levine | — | $900,000 | $900,000 |
Aggregate Annual Bonus Amounts
| 50 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
ANNUAL EQUITY AWARDS
ANNUAL EQUITY AWARDS We grant our named executive officers performance-based LTIP units and time-based LTIP units annually in connection with their employment agreements and, in some cases, at the discretion of the Committee. For 2023, our annual long-term incentive equity award program consisted of grants of performance-based equity awards with multi-year performance criteria and time-based equity awards that vest based on continued service. We grant performance-based awards prospectively for each compensation year when we establish performance goals to incentivize our executives to deliver accretive value to stockholders. We grant time-based awards retrospectively based on each executive’s contributions to our achievements during the prior year. Target Amounts. The target amounts of performance-based equity awards and time-based equity awards for our named executive officers are set forth below:
ANNUAL EQUITY AWARDS
| | Target Equity Award Amounts | | | | Executive | Performance-Based | Time-Based | Total | | Marc Holliday | $7,500,000 | $4,500,000 | $12,000,000 | | Andrew Mathias | $6,000,000 | $3,500,000 | $9,500,000 | | Matthew J. DiLiberto | $555,556 | $1,400,000 | $1,955,556 | | Andrew S. Levine | $555,556 | $1,300,000 | $1,855,556 |
ANNUAL EQUITY AWARDS
Earned performance-based LTIP units granted based on the target amounts set forth above will vest 100% for Messrs. Holliday and Mathias on December 31, 2025. The time-based LTIP units granted to Messrs. Holliday, DiLiberto and Levine, respectively, pursuant to each executive’s employment agreement are subject to vesting over three years, two years and one year, with each award vesting ratably, if applicable, on January 1st of each year following the grant date, subject to continued employment. The shorter vesting periods for the time-based LTIP units grants to Messrs. DiLiberto and Levine align with the expiration of their respective employment agreements. Because the term of his employment concluded prior to January 2024 when the annual grants would have been made under his employment agreement, Mr. Mathias did not receive an annual time-based equity award for 2023.
ANNUAL EQUITY AWARDS
| For 2023, with the exception of the target annual time-based award for our former President, we granted equity awards in line with the target amounts set forth above. The Committee considered management’s overall performance in the context of our longer-term stock performance. In light of our disappointing multi-year stock price performance over the last three years, the Committee elected not to grant awards above target, notwithstanding our extraordinary, office sector-leading TSR in 2023. |
ANNUAL EQUITY AWARDS
Our employment agreements with Messrs. DiLiberto and Levine in effect for 2023 did not provide for target annual performance-based equity grants, but both participate, at the Committee’s discretion, in our annual long-term performance-based equity program. Earned performance-based LTIP units granted for 2023 will vest 50% on each of December 31, 2025 and December 31, 2026, for Messrs. DiLiberto and Levine.
ANNUAL EQUITY AWARDS
| EXECUTIVE COMPENSATION | 51 |
ANNUAL EQUITY AWARDS
For detailed 2023 pay outcomes for each of our named executive officers, excluding our former President, see the NEO scorecards below.
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
| Emphasis on At-Risk Pay Elements | In line with stockholder feedback, we have continued our commitment to rigorous performance-based incentives. For 2023: ✓ 92.3% of CEO compensation was performance-based and at-risk ✓ 84.5% of other NEO compensation was performance-based and at-risk (excluding our former President) This design allows the Committee to reward superior performance, while the substantial long-term equity incentive portions of our compensation programs serve to align the interests of our named executive officers with those of our stockholders. | | Performance Metrics Reflect Complexities of Our Business | The Committee has carefully selected performance criteria across not just a range of financial and corporate goals but also a range of performance periods. In aggregate, these criteria aim to account for the complexities of operating our business over both the short-term and the long-term. | | No One-Size-Fits-All Solution | While establishing performance goals, the Committee has designed incentives that incentivize our executive officers to strive for excellence no matter the time horizon. This is accomplished by rationally linking the sum of the component parts of our compensation structure not just to the way our executive officers think about our business but also to the way that our stockholders think about value. |
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
| | Annual Bonus | Annual Equity Awards (Operational Component) | Annual Equity Awards (Relative Component) | | Period | One year | One year with three-year modifier | Three years | | Objectives | • Normalized FFO per share • Annual same-store cash NOI growth • Dividend growth • G&A expense • One Madison TCO | • Normalized funds available for distribution • Combined Net Debt Reduction • Manhattan same store office leased occupancy • Manhattan office leasing volume • Liquidity • Absolute TSR (three-year modifier) | • TSR relative to the constituents of an office REIT index • TSR relative to a group of NYC peers • Subject, in each case, to a vesting cap at target if absolute TSR is negative over three-year period even if relative TSR outperforms peers |
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
| | Shorter Performance Period (performance metrics within management’s scope and visibility) | | Longer Performance Period (performance metrics that align with the creation of stockholder value) | |
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
| In the aggregate, our compensation program is heavily weighted towards at-risk and performance-based compensation with rigorous performance targets, most of which is in the form of equity and subject to vesting over a three-year period. We utilize a blend of performance periods in our compensation program that maintains this overall long-term focus while also accounting for the challenges we face in forecasting for periods greater than 12 months. The aggressive recycling and deployment of capital through opportunistic acquisitions and dispositions, together with our focus on transformational development projects like One Vanderbilt Avenue and One Madison Avenue, make it difficult to project and incentivize long-term financial and operating results. |
How We Establish Performance Goals—Formulaic Annual Bonus and Equity Awards
| 52 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS Each year, the Committee, in consultation with management and other advisors, takes the same four step approach to establishing our performance goals and administering our performance-based equity programs. The methodical process through which we establish performance goals is strong evidence of our focus on building a culture of alignment and accountability for our management team. This alignment is achieved year after year in the context of a rigorous process that connects internal budgeting, external guidance and compensation opportunities.
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS
| The Committee does not look to comparisons of forward-looking performance goals versus prior year goals or results as part of this process. |
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS
| | ASSESS | | PROJECT | | ESTABLISH | | MEASURE | | At the beginning of each year, we assess the current economic and competitive landscape we face to identify trends, challenges and opportunities that we anticipate will impact our performance during the coming year. | | Management establishes formal guidance and internal projections based on current conditions and without consideration of prior year forecasts, which may result in narrower or wider ranges depending on anticipated volatility. | | The Committee establishes rigorous performance goals based on management’s guidance and internal projections that are integrally related to our projections (i.e., to achieve maximum performance, we generally must exceed the projected range). | | Following the end of the year, we measure performance and payout formulaic bonuses (as applicable) and performance-based equity awards based on performance relative to the goals. We do not change our objective goals mid-year, even in extreme circumstances such as the COVID-19 pandemic. | |
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS
| Goals are established each year on a forward-looking basis as a snapshot of current economic and competitive conditions. Depending on anticipated economic volatility, our guidance may be narrower or wider at the time that goals are set, which, in turn, may result in corresponding adjustments to that year’s threshold, target and maximum performance hurdles that must be achieved. However, performance under our formulaic bonus program and annual performance-based equity awards generally must at least equal or exceed the top of our guidance range or internal projections to achieve maximum performance levels. |
RIGOROUS METHODOLOGY FOR SETTING PERFORMANCE GOALS
| EXECUTIVE COMPENSATION | 53 |
2023 Performance Summary
For all of our formulaic annual cash bonus awards and performance-based equity awards, linear interpolation is used to determine the percentage earned for performance that falls between threshold, target and/or maximum. The tables below set forth our 2023 performance relative to 2023 performance criteria.
2023 Formulaic Annual Bonus Goals
2023 Formulaic Annual Bonus Goals
2023 Formulaic Annual Bonus Goals
| Performance Criteria / Reason Selected | Weighting | Guidance/ Goal | Threshold | Target | Maximum | | Normalized FFO per Share • Widely-used non-GAAP measure of earnings performance for REITs, used both by investors and our management, and a key financial measure for which we provide guidance | 20% | $5.45 | | | | | Annual Same Store Cash NOI Growth(2) • A key metric used in commercial real estate to evaluate the operating performance of properties. Same-store cash NOI compares the operating performance of the properties owned by us in a similar manner in both reporting periods (year over year) | 20% | 3.0% | | | | | Dividend Growth • A key measure of the income we return to stockholders each year | 20% | N/A | | | | | G&A Expense (in millions) • Corporate overhead is a key efficiency metric impacting the overall profitability and value of the Company | 20% | $92.20 | | | | | Obtain One Madison Avenue Temporary Certificate of Occupancy • A vital strategic goal for 2023, the achievement of which would accelerate the execution of our 2023 capital strategy | 20% | (3) | Achieved September 2023(3) | | |
2023 Formulaic Annual Bonus Goals
(1) Determined in December 2023 based on a combination of actual results and estimates of full year results. (2) Excluding lease termination income. Threshold, target and maximum performance were established based on a series of date ranges, with threshold performance being a Temporary Certificate of Occupy (“TCO”) obtained between December 1, 2023 and January 15, 2024; target performance being a TCO obtained between October 16, 2023 and November 30, 2023; and maximum performance being a TCO obtained between September 1, 2023 and October 15, 2023. Our initial goal at the outset of the project was to obtain the TCO for One Madison Avenue in December 2023.
2023 Formulaic Annual Bonus Goals
| 54 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
2023 Formulaic Annual Bonus Goals
Based on our performance relative to these formulaic goals, our CEO and CFO earned the following amounts of annual bonus, representing 100% of Mr. Holliday’s 2023 bonus and 60% of Mr. DiLiberto’s total bonus opportunity for 2023:
2023 Formulaic Annual Bonus Goals
| Executive | Target 2023 Formulaic Annual Bonus ($) | Actual 2023 Formulaic Annual Bonus (% of Target) | Actual 2023 Formulaic Annual Bonus ($) | | Marc Holliday | $2,500,000 | 116.33% | $2,908,333 | | Matthew J. DiLiberto(1) | $1,050,000 | 111.14% | $1,167,000 |
2023 Formulaic Annual Bonus Goals
For the remaining 40% of Mr. DiLiberto’s 2023 bonus opportunity, a discretionary bonus potential of $778,000 was calculated pursuant to his employment agreement, as amended, based on the amount of formulaic bonus that was earned, of which Mr. DiLiberto was awarded $533,000 by the Committee.
2023 Formulaic Annual Bonus Goals
| EXECUTIVE COMPENSATION | 55 |
2023 Operational Component Performance Goals (50% of Annual Equity Award)
2023 Operational Component Performance Goals (50% of Annual Equity Award) The operational component of our annual performance-based equity awards measures our performance against five objective criteria over a one-year performance period, which remain subject to an absolute TSR modifier (either up or down 12.5%) based on our absolute TSR performance over a three-year performance period.
2023 Operational Component Performance Goals (50% of Annual Equity Award)
| The objective criteria used for 2023 were the same as for 2022, except that we replaced the Debt/EBITDA Ratio metric with the Combined Net Debt Reduction metric to better align with our strategic business goals for 2023. |
2023 Relative Component Performance Goals (50% of Annual Equity Award)
2023 Relative Component Performance Goals (50% of Annual Equity Award) The relative component of our annual performance-based equity awards measures our performance against two peer sets over a three-year performance period. The relative component is weighted equally between our performance relative to Office REIT Peers and NYC REIT Peers. As of December 31, 2023, based on our one-year TSR relative to the Office REIT Peers and the NYC REIT Peers, our performance would have placed us at maximum performance for both portions of the relative component.
2023 Relative Component Performance Goals (50% of Annual Equity Award)
| Performance Criteria / Reason Selected | Weighting | Threshold (50%) | Target (100%) | Maximum (200%) | | Relative TSR vs. Office REIT Peers(1) • A comparison of the returns of a hypothetical investor seeking exposure to office REITs as an asset class and reflects how we performed versus other companies in our sector | 50% | | | | | Relative TSR vs. NYC REIT Peers(2) • A comparison of our performance against companies with office and/or retail commercial real estate portfolios concentrated in the New York City market, which we believe are most directly comparable to the Company due to the market dynamics of New York City that uniquely impact owners and operators of commercial real estate | 50% | | | |
2023 Relative Component Performance Goals (50% of Annual Equity Award)
(1) The Office REIT Peer Group is comprised of the constituents of the Dow Jones US Real Estate Office Index. (2) The NYC Peer Group is comprised of the following companies: Acadia Realty Trust, Empire State Realty Trust, Inc., Veris Residential, Inc. (formerly Mack-Cali Realty Corporation), Paramount Group, Inc. and Vornado Realty Trust.
FINAL RESULTS—2021-2023 PERFORMANCE-BASED AWARDS
| The final payout for our 2021 annual performance-based equity award highlights the rigor of the program, our pay-for-performance philosophy and the alignment between our executives and our stockholders. Despite achieving maximum performance (200%) initially for the operational component, which represents 50% of the total opportunity and is the portion of the award most within the control of management, the realized value of the award was only 123.7% of the initial target value of the award due to below target performance for TSR components of the award. |
2023 NEO Scorecards
2023 NEO Scorecards The following scorecards summarize each element of compensation received by our NEOs (other than our former President) for 2023 as of December 31, 2023.
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| TDC | SCT | Element of Compensation | | 8% $1,250,000 | 7% $1,250,000 | Annual Base Salary Mr. Holliday’s base salary was equal to the minimum set forth in his employment agreement. There has been no change to his base salary since it was retroactively reduced in 2018. | | 18% $2,908,333 | 15% $2,747,106 | 100% Formulaic Annual Bonus Determined formulaically based on performance relative to preset objective bonus criteria established by the Committee in January 2023. The TDC amount reflects the earning of 116% of the target bonus amount. The SCT amount reflects the cash portion of the bonus ($1,454,167), plus the grant date value of the portion of the bonus ($1,142,926) paid in equity at Mr. Holliday’s election, plus the grant date value of LTIP units issued in 2023 as a true-up for his 2022 annual bonus based on actual 2022 performance ($150,013). Mr. Holliday elected to receive 50% of the bonus in the form of equity. The corresponding 34,467 LTIP units granted in December 2023 were fully vested upon grant, but remain subject to a three-year no-sell restriction. | | 46% $7,500,000 | 53% $9,920,005 | Performance-Based Equity Awards The TDC amount reflects the target notional value of $7,500,000, consistent with the target amount set forth in Mr. Holliday’s employment agreement. The SCT amount reflects the grant date value of the awards. The award relates to the following number of LTIP units: |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| 2023 Performance-Based Award— Number of LTIP Units Granted | | | | | Threshold | Target | Maximum | Projected Earned as of 12/31/2023 | | 104,809 | 223,593 | 503,085 | 362,221 |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| | | The actual number of LTIP units earned will be determined based on Company performance measured after the end of the full performance period ending December 31, 2025, based on our absolute and relative TSR, with earned LTIP units vesting in full as of December 31, 2025. | | 28% $4,500,000 | 25% $4,554,596 | Time-Based Equity Awards The Committee granted time-based awards in January 2024 based on the Company’s 2023 performance. The awards had a target value of $4,500,000, equal to the minimum target amount in Mr. Holliday’s employment agreement. The corresponding 97,096 LTIP units will vest in three equal installments on January 1, 2025, January 1, 2026 and January 1, 2027, subject to continued employment. The SCT amount reflects the grant date value of the awards. | | 100% $16,194,797 | 100% $18,508,171 | Both totals include $36,464 of “Other Compensation,” as reflected in the Summary Compensation Table. |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| TDC | SCT | Element of Compensation | | 14% $600,000 | 19% $600,000 | Annual Base Salary Mr. DiLiberto’s base salary was equal to the minimum amount set forth in the employment agreement he entered into in March 2023, which reflected a $25,000 market-based increase over his 2022 base salary. | | 40% $1,700,000 | 19% $622,393 | Annual Bonus Determined 60% formulaically, with the remaining 40% of his total bonus opportunity determined on a discretionary basis after calculation of the formulaic component. For 2023, Mr. DiLiberto earned $1,167,000 on a formulaic basis, resulting in a discretionary bonus potential of $778,000, of which he was then awarded $533,000, resulting in an aggregate annual bonus of $1,700,000. Mr. DiLiberto received 100% of the bonus in the form of equity. The corresponding 40,534 LTIP units granted in January 2024 were fully vested upon grant, but remain subject to a three-year no-sell restriction. Because these LTIP units were granted in 2024, the value of the awards will be reported in next year’s Summary Compensation table. The SCT amount reflects the grant date value of equity granted in January 2023 representing only a portion of his 2022 annual bonus. | | 13% $555,556 | 24% $778,011 | Performance-Based Equity Awards The TDC amount reflects the target notional value of $555,556 approved by the Committee in January 2023. The SCT amount represents the grant date value of the awards. The award relates to the following LTIP units: |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| 2023 Performance-Based Award— Number of LTIP Units Granted | | | | | Threshold | Target | Maximum | Projected Earned as of 12/31/2023 | | 7,764 | 16,563 | 37,265 | 26,831 |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| | | The actual number of LTIP units earned will be determined based on Company performance measured after the end of the full performance period ending December 31, 2025, based on our absolute and relative TSR, with earned LTIP units vesting 50% as of December 31, 2025 and 50% as of December 31, 2026. | | 33% $1,400,000 | 38% $1,252,297 | Time-Based Equity Awards The Committee granted time-based awards in January 2024 based on the Company’s 2023 performance. The awards had a target value of $1,400,000, equal to the minimum target amount set forth in Mr. DiLiberto’s employment agreement. The corresponding 30,208 LTIP units vest in two equal installments on January 1, 2025 and 2026 subject to continued employment. The SCT amount represents the grant date value of equity awards granted in March 2023 in connection with entering into Mr. DiLiberto’s employment agreement. | | 100% $4,268,756 | 100% $3,265,901 | Both totals include $13,200 of “Other Compensation,” as reflected in the Summary Compensation Table. |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| TDC | SCT | Element of Compensation | | 17% $580,000 | 17% $580,000 | Annual Base Salary Mr. Levine’s base salary was equal to the minimum set forth in his employment agreement. There has been no change to base salary since 2019. | | 27% $900,000 | 24% $815,556 | Annual Bonus Bonus, while not formulaic, was determined on the basis of the objective criteria used for our formulaic annual bonus program, the achievements of the Company during 2023 and an assessment of Mr. Levine’s performance in areas under his responsibilities. Mr. Levine received 100% of the bonus in the form of equity. The corresponding 21,459 LTIP units granted in January 2024 were fully vested upon grant, but remain subject to a three-year no-sell restriction. Because these LTIP units were granted in 2024, the value of the awards will be reported in next year’s Summary Compensation table. The SCT amount reflects the grant date value of equity granted in January 2023 for 2022 annual bonus. | | 17% $555,556 | 23% $778,011 | Performance-Based Equity Awards The TDC amount reflects the target notional value of $555,556 approved by the Committee in January 2023. The SCT amount represents the grant date value of the awards. The award relates to the following LTIP units: |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| 2023 Performance-Based Award— Number of LTIP Units Granted | | | | | Threshold | Target | Maximum | Projected Earned as of 12/31/2023 | | 7,764 | 16,563 | 37,265 | 26,831 |
2023 Performance and Compensation— Total Direct Compensation vs. Summary Compensation Table
| | | The actual number of LTIP units earned will be determined based on Company performance measured after the end of the full performance period ending December 31, 2025, based on our absolute and relative TSR, with earned LTIP units vesting 50% as of December 31, 2025 and 50% as of December 31, 2026. | | 39% $1,300,000 | 36% $1,245,618 | Time-Based Equity Awards The Committee granted time-based awards in January 2024 based on the Company’s 2023 performance. The awards had a target value of $1,300,000, equal to the minimum target amount set forth in Mr. Levine’s employment agreement. The corresponding 28,050 LTIP units will vest on January 1, 2025, subject to continued employment. The SCT amount represents the grant date value of equity award granted in 2023 for 2022 performance. | | 100% $3,348,756 | 100% $3,432,385 | Both totals include $13,200 of “Other Compensation,” as reflected in the Summary Compensation Table. |
How We Determine Executive Compensation
| Results | The Committee considers and analyzes the data and information provided by its independent compensation advisor, our CEO and FTI Consulting, as well as input from members of the Board of Directors and stockholders, and then makes final compensation decisions for our named executive officers in its sole discretion | | Stockholder Engagement | • The Committee Chair engages with a significant number of stockholders holding a substantial percentage of outstanding shares and considers all feedback it receives on current and prior compensation practices | | Full Board | • The Committee regularly reports to the full Board to ensure management accountability with business objectives and alignment with stockholders | | Committee and Chief Executive Officer | • The Committee reviews named executive officer’s annual performance targets and criteria, the Company’s absolute and relative TSR, the individual NEO’s execution of the Company’s long-term strategy, peer benchmarking and other market data provided by independent compensation consultants in formulating compensation recommendations • At the request of the Committee, our CEO also receives and reviews this market data and provides recommendations for the Committee’s consideration regarding the compensation of other named executive officers | | Consultants | Gressle & McGinley LLC – Retained as the Committee’s independent outside compensation adviser and regularly participates in compensation committee meetings – Provides updates and relevant data throughout the year on market conditions in light of our goals and objectives, including current market and peer group pay practices and then-existing policies of certain of our institutional investors, ISS, Glass Lewis and other governance groups – Offers the Committee independent analysis and recommendations concerning executive compensation – Does not provide any additional services to the Company FTI Consulting – Retained by management as a general business advisor, including for compensation matters, and in connection with the preparation of the Pay Versus Performance disclosure in this proxy statement (FTI Consulting had relationships with certain officers of the Company during 2023) |
Compensation Practices
| WHAT WE DO | WHAT WE DON’T DO | | Pay for performance and create alignment with stockholders Include robust hurdles in our incentive plans Pay a vast majority of total compensation for our CEO and other named executive officers in equity Follow robust equity ownership guidelines for our directors and named executive officers Impose a clawback policy with respect to incentive payments Require a double trigger for cash severance and accelerated vesting in connection with a change in control | No dividends or distributions paid on unearned equity awards subject to performance-based vesting No signing bonuses for NEOs upon entering into employment agreements No excise tax gross-up provisions No repricing of stock options No single trigger cash severance or accelerated vesting in connection with a change in control Don’t allow directors or officers to hedge our securities |
Peer Group Benchmarking
Peer Group Benchmarking In 2023 as in prior years, the Committee reviewed various peer compensation information in connection with its compensation decisions, primarily focused on the chief executive officer’s compensation. This peer information was not used to target a particular percentile for our Chief Executive Officer’s total compensation for 2023, but rather to confirm that our Chief Executive Officer’s total compensation for 2023 was within an appropriate range of the total compensation, considering relative size and performance. The Committee reviewed total compensation information for the chief executive officers of a peer group, with an emphasis on the REIT industry. The peer group included a number of New York City-based peer companies. That decision is based on the unique characteristics of the New York City real estate marketplace, which is where we conduct substantially all of our business, and which is one of the most competitive in the world, from both a business and compensation perspective. However, among the top 15 New York City real estate companies—in terms of Manhattan office-space ownership—only a handful of those companies, including SL Green, are public.
Peer Group Benchmarking
| EXECUTIVE COMPENSATION | 63 |
Peer Group Benchmarking
With respect to size, we ranked at or above the median of our selected peers with respect to total enterprise value and total revenue as of December 31, 2023. The following companies were included in the peer group that the Committee reviewed:
Peer Group
Peer Group Source: S&P Capital IQ. Data as of December 31, 2023. In the market for talent and compensation, the Committee views SLG as most comparable to real estate companies and companies in complex financial services-related industries such as top performing hedge funds, international investors, large private firms and others that may have equal or greater financial resources, including access to cost-efficient capital. Many of these most direct competitors are private companies, however, and are not required to publicly disclose their compensation arrangements, though the Committee believes that the top real estate principals of these non-REIT companies typically receive substantially higher compensation than their counterparts at public REITs. Nonetheless, to ensure the rigor of our compensation program benchmarking, we have limited our peer group to companies for which there is sufficient publicly available information to thoroughly and completely evaluate the comparability of any given peer company.
Peer Group
| Given limited publicly available information on the private companies with which we most directly compete for real estate talent, we have elected to include only public REITs in our compensation peer group. |
Analysis of Risk Associated with Our Executive Compensation Plans
Analysis of Risk Associated with Our Executive Compensation Plans In setting compensation, we consider the risks to our stockholders and to achievement of our goals that may be inherent in the executive compensation program. We concluded that it is not reasonably likely that our compensation policies and practices will have a material adverse effect on us. In reaching our conclusion, we considered the following aspects of our executive compensation plans and policies among others: • We evaluate performance based upon the achievement of a variety of business objectives and goals. • We use a balanced equity compensation mix comprised of performance-based and time-based full value equity awards. This approach lessens the likelihood that executives will take unreasonable risks to keep their equity awards “in-the-money,” as may be the case with equity compensation programs that rely solely on leveraged market-based equity compensation vehicles such as stock options. • We provide a significant portion of incentive compensation in the form of long-term incentive awards. The amounts that ultimately may be earned are tied to how we perform over a multi-year period, which focuses management on sustaining our long-term performance. • We structure payouts under our performance-based awards based on achieving a minimum level of performance, so that some compensation is awarded at levels below full target achievement rather than an “all-or-nothing” approach. We provide a significant portion of each executive’s annual compensation in the form of equity-based compensation. In addition, executives are required to maintain sizable holdings of equity in the Company under the terms of our equity ownership guidelines. This practice aligns an appropriate portion of our executives’ personal wealth to our long-term performance.
Outstanding Annual Equity Award Performance Summary (2021-2023)
Outstanding Annual Equity Award Performance Summary (2021-2023)
Outstanding Annual Equity Award Performance Summary (2021-2023)
| Operational Awards | Actual Percentage Earned as of 12/31/2023 | Actual / Projected Absolute TSR Modifier as of 12/31/2023 | | 2023 Operational Component | 88.00% (Actual) | +12.5% (Projected) | | 2022 Operational Component | 141.29% (Actual) | -12.5% (Projected) | | 2021 Operational Component | 200.00% (Actual) | -12.5% (Actual) |
Outstanding Annual Equity Award Performance Summary (2021-2023)
| Relative Awards | Actual / Projected Percentile Rank as of 12/31/2023 | Actual / Projected Percentage Earned as of 12/31/2023 | | 2023 Relative TSR vs. Office REIT Peers | 97th Percentile (Projected) | 225.00% (Projected) | | 2023 Relative TSR vs. NYC REIT Peers | 92nd Percentile (Projected) | 225.00% (Projected) | | 2022 Relative TSR vs. Office REIT Peers | 81st Percentile (Projected) | 225.00% (Projected) | | 2022 Relative TSR vs. NYC REIT Peers | 25th Percentile (Projected) | 0.00% (Projected) | | 2021 Relative TSR vs. Office REIT Peers | 83rd Percentile (Actual) | 225.00% (Actual) | | 2021 Relative TSR vs. NYC REIT Peers | 42nd Percentile (Actual) | 75.49% (Actual) |
Outstanding Annual Equity Award Performance Summary (2021-2023)
Our 2022 and 2021 annual performance-based equity awards generally have the same structure as the 2023 performance-based equity awards described above in “— Compensation Discussion and Analysis—Our 2023 Executive Compensation Program.” The 2022 and 2021 awards are described in full in our proxy statements relating to our 2022 and 2021 fiscal years. For additional information regarding the number of LTIP units relating to each of our outstanding annual performance-based equity awards held by each of our named executive officers, see “—Executive Compensation Tables—Outstanding Equity Awards at Fiscal Year End 2023.”
Outstanding Annual Equity Award Performance Summary (2021-2023)
| EXECUTIVE COMPENSATION | 65 |
Employment Agreements
Employment Agreements As noted above, we have employment agreements with each of our named executive officers. Each of the employment agreements with our named executive officers provide for, among other things, severance payments and benefits and acceleration of equity awards in connection with certain qualified terminations. In return, each of our named executive officers has agreed to non-compete, non-solicitation, non-interference and confidentiality provisions. For each of our executives, we believe that, because the severance level is negotiated up front, it makes it easier for us to terminate these executives without the need for protracted negotiations over severance. We also believe that providing pre-negotiated severance benefits for all of our executives in the event they are terminated without cause or terminate their employment for good reason following a change in control helps to further align the interests of our executives and our stockholders in the event of a potentially attractive proposed change-in-control transaction following which one or more of our executives may be expected to be terminated. See “—Executive Compensation Tables—Potential Payments Upon Termination or Change in Control” for a summary of the employment agreements with our named executive officers.
Other Matters—LTIP units and Class O LTIP units
Other Matters—LTIP units and Class O LTIP units We issued a separate class of units of limited partnership interest in our operating partnership, which we refer to as LTIP units, for the equity bonuses that we granted to our named executive officers for 2023 and as equity awards granted in connection with new or extended employment agreements or the provisions of such agreements. LTIP units are similar to common units in our operating partnership, which generally are economically equivalent to shares of our common stock, except that the LTIP units are structured as “profits interests” for U.S. federal income tax purposes under current federal income tax law. As profits interests, LTIP units generally only have value, other than with respect to the right to receive distributions, if the value of the assets of our operating partnership increases between the issuance of LTIP units and the date of a book-up event for partnership tax purposes. If the value of the assets of our operating partnership increases sufficiently, the LTIP units can achieve full parity with common units in our operating partnership. If such parity is achieved, LTIP units may be converted, subject to the satisfaction of applicable vesting conditions, on a one-for-one basis into common units, which in turn are redeemable by the holder for cash or, at our election, on a one-for-one basis into shares of our common stock. LTIP units are not entitled to distributions prior to being earned based on achievement against the performance-based hurdles contained in these plans. Once earned, these LTIP units, whether vested or unvested, entitle the holder to receive distributions per unit from our operating partnership that are equivalent to the dividends paid per share on our common stock.
Other Matters—LTIP units and Class O LTIP units
| 66 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Other Matters—LTIP units and Class O LTIP units
In addition to the LTIP units described above that we issued in lieu of shares of restricted stock, we also have issued another class of units of limited partnership interest in our operating partnership that are intended to be similar to stock options from an economic perspective, which we refer to as Class O LTIP units. Class O LTIP units are also intended to qualify as “profits interests” for U.S. federal income tax purposes. During 2023, we did not grant any Class O LTIP units. Like stock options, Class O LTIP units operate in a manner that generally permits holders to realize the benefit of any increase in the per share value of our common stock above the value at the time the Class O LTIP units are granted. At the time of the grant of Class O LTIP units, the operating partnership establishes a conversion threshold, the vesting terms and the mandatory conversion date, if any, for the Class O LTIP units. The conversion threshold corresponds to the exercise price of a stock option while the mandatory conversion date corresponds to the expiration date of a stock option. Similar to the exercise price for stock options, the conversion threshold will equal the per unit value of the common units of our operating partnership on the grant date. Class O LTIP units will receive 10% distributions relating to periods between grant and vesting upon vesting, and will receive 10% distributions from vesting to their conversion as opposed to holders of non-qualified stock options who will not receive any distributions relating to periods between grant and exercise. Once Class O LTIP units have vested, they may be converted into common units of our operating partnership by the holder at any time prior to their mandatory conversion date in a manner that is similar to a net exercise of stock options. Upon exercise of this conversion right, the Class O LTIP units will convert into a number of common units of the operating partnership that have an aggregate value equal to the aggregate spread of the Class O LTIP units that are converted. The “spread” for each Class O LTIP unit will equal the excess, if any, of the value of our operating partnership’s assets per common unit on the conversion date above the per unit value at the time the Class O LTIP unit was granted (i.e., the conversion threshold). Any Class O LTIP units that have not been voluntarily converted prior to the mandatory conversion date established at the time the Class O LTIP units were granted will automatically convert into common units on such mandatory conversion date, or be forfeited if the value of our operating partnership’s assets per common unit is less than the conversion threshold for the Class O LTIP units. LTIP units and Class O LTIP units are intended to offer executives substantially the same long-term incentive as shares of restricted stock and stock options, respectively, with more favorable U.S. federal income tax treatment available for “profits interests” under current federal income tax law. More specifically, one key disadvantage of restricted stock is that executives are generally taxed on the full market value of a grant at the time of vesting, even if they choose to hold the stock. Similarly, holders of non-qualified stock options are taxed upon exercise. Conversely, under current federal income tax law, an executive would generally not be subject to tax at the time of issuance or vesting of an LTIP unit or Class O LTIP unit or conversion into common units but only when he or she chooses to liquidate the common units into which his or her LTIP units or Class O LTIP units convert. Therefore, an executive who wishes to hold his or her equity awards for the long term can generally do so in a more tax-efficient manner with LTIP units or Class O LTIP units. In light of the increased tax efficiency, we have chosen to use LTIP units and Class O LTIP units for grants to our executives. We believe that the use of LTIP units and Class O LTIP units has (i) enhanced our equity-based compensation package overall, (ii) advanced the goal of promoting long-term equity ownership by executives, (iii) not adversely impacted dilution as compared to restricted stock, and (iv) further aligned the interests of our executives with the interests of our stockholders.
Summary Compensation Table
Summary Compensation Table The following table sets forth information regarding the compensation paid to the individuals who served as our Chief Executive Officer and Chief Financial Officer during our 2023 fiscal year and two of our most highly compensated executive officers, other than our Chief Executive Officer and Chief Financial Officer, whose total compensation exceeded $100,000 during the fiscal year ended December 31, 2023, or collectively, the “named executive officers.”
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards(1) ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation(2) ($) | Total ($) | | Marc Holliday Chief Executive Officer, Chairman of the Board and Interim President | 2023 | $1,250,000 | — | $15,767,540 | — | $1,454,167 | $36,464 | $18,508,171 | | | 2022 | $1,250,000 | — | $14,284,701 | — | $1,051,094 | $75,060 | $16,660,855 | | | 2021 | $1,250,000 | — | $18,099,677 | — | $1,681,250 | $57,130 | $21,088,057 | | Andrew Mathias Former President(3) | 2023 | $950,000 | — | $11,657,025 | — | — | $13,200 | $12,620,225 | | | 2022 | $950,000 | — | $11,685,931 | — | — | $55,570 | $12,691,501 | | | 2021 | $950,000 | — | $14,929,026 | — | — | $50,522 | $15,929,548 | | Matthew J. DiLiberto Chief Financial Officer | 2023 | $600,000 | — | $2,652,701 | — | — | $13,200 | $3,265,901 | | | 2022 | $575,000 | $725,000 | $2,488,387 | — | — | $12,200 | $3,800,587 | | | 2021 | $550,000 | $925,000 | $2,318,872 | — | — | $11,600 | $3,830,472 | | Andrew S. Levine Chief Legal Officer and General Counsel | 2023 | $580,000 | — | $2,839,185 | — | — | $13,200 | $3,432,385 | | | 2022 | $580,000 | — | $3,935,842 | — | — | $12,200 | $4,528,042 | | | 2021 | $580,000 | — | $2,783,700 | — | — | $11,600 | $3,375,300 |
Summary Compensation Table
(1) Amounts shown do not reflect compensation actually received by the named executive officer. Instead, the amounts shown are the full grant date fair value of stock awards and option awards issued to the executives in 2023, 2022 and 2021, respectively. In accordance with SEC disclosure requirements, the amounts for 2023 include the full grant date fair value of our 2023 annual performance-based equity awards, which were as follows: Mr. Holliday—$9,920,005; Mr. Mathias—$7,935,992; Mr. DiLiberto—$778,011; and Mr. Levine— $778,011, respectively. The grant date fair value of such awards is computed in accordance with ASC 718, “Compensation-Stock Compensation,” or “ASC 718,” by the use of Monte Carlo simulation models that consider the probable outcomes of the market-based performance conditions governing such awards. The Monte Carlo simulation model for the awards granted during 2023 used an assumed stock price volatility level of 55% on our common stock and a risk-free interest rate of 3.97%. Assuming that maximum performance is achieved under our 2023 annual performance-based equity awards, the value at the grant date of the awards would each have been as follows: Mr. Holliday—$19,766,210; Mr. Mathias—$15,812,968; Mr. DiLiberto—$1,464,142; and Mr. Levine—$1,464,142, respectively. See “— Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” for a description of the terms of these performance-based awards. (2) The table and footnotes below show the components of this column for 2023, which include certain perquisites such as Company 401(k) matching contributions.
Summary Compensation Table
| Name | All Other Compensation ($) | | Marc Holliday | $36,464(a) | | Andrew Mathias | $13,200(b) | | Matthew J. DiLiberto | $13,200(b) | | Andrew S. Levine | $13,200(b) |
Summary Compensation Table
(a) Represents (i) the Company’s matching contributions with respect to amounts earned by the named executive officer under our 401(k) plan ($13,200) and (ii) life insurance premiums ($23,264). The Company’s 401(k) matching contributions are credited in the year subsequent to which employees make their contributions. (b) Represents the Company’s matching contributions with respect to amounts earned by the named executive officer under our 401(k) plan ($13,200). The Company’s 401(k) matching contributions are credited in the year subsequent to which employees make their contributions. Does not include amounts that became payable in 2024 pursuant to the terms of employment agreement. See “—Potential Payments Upon Termination or Change in Control.”
Summary Compensation Table
| 68 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
2023 Grants of Plan-Based Awards
2023 Grants of Plan-Based Awards The following table sets forth certain information with respect to each grant of an award made to a named executive officer in the fiscal year ended December 31, 2023.
2023 Grants of Plan-Based Awards
| | | | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) | | Name | Grant Date | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Marc Holliday | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 134,156(1) | $4,554,596 | | | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 4,888(2) | $150,013 | | | 01/30/2023 | 01/30/2023 | — | — | — | 104,809(3) | 223,593(3) | 503,085(3) | — | $9,920,005 | | | 12/11/2023 | 12/11/2023 | — | — | — | — | — | — | 34,467(4) | $1,142,926 | | | N/A | N/A | $625,000(5) | $2,500,000(5) | $3,750,000(5) | — | — | — | — | — | | Andrew Mathias | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 104,344(1) | $3,542,479 | | | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 5,818(2) | $178,554 | | | 01/30/2023 | 01/30/2023 | — | — | — | 83,848(3) | 178,875(3) | 402,467(3) | — | $7,935,992 | | | N/A | N/A | $475,000(5) | $1,662,500(5) | $2,375,000(5) | — | — | — | — | — | | Matthew J. DiLiberto | 03/02/2023 | 03/02/2023 | — | — | — | — | — | — | 42,422(1) | $1,252,297 | | | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 20,280(4) | $622,393 | | | 01/30/2023 | 01/30/2023 | — | — | — | 7,764(3) | 15,563(3) | 37,265(3) | — | $778,011 | | | N/A | N/A | $300,000(5) | $1,050,000(5) | $1,500,000(5) | — | — | — | — | — | | Andrew S. Levine | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 38,756(1) | $1,245,618 | | | 01/30/2023 | 01/30/2023 | — | — | — | — | — | — | 26,574(4) | $815,556 | | | 01/30/2023 | 01/30/2023 | — | — | — | 7,764(3) | 15,563(3) | 37,265(3) | — | $778,011 |
2023 Grants of Plan-Based Awards
(1) Represents grants of LTIP units awarded in connection with our respective employment agreements with Messrs. Holliday, Mathias, DiLiberto and Levine. For Messrs. Holliday, Mathias and DiLiberto, the LTIP units vest in three equal installments vesting on each of January 1, 2024, January 1, 2025 and January 1, 2026, and, for Mr. Levine, the LTIP units vest in two equal installments on each of January 1, 2024 and January 1, 2025, subject in each case to continued employment. (2) Represents LTIP units granted as a true-up adjustment pursuant to the formulaic component of our annual bonus program on account of actual 2022 performance. (3) Represents LTIP units granted as 2023 annual performance-based equity awards that were subject to performance-based vesting hurdles. The amount shown in the “Threshold” column of the table reflects the total number of LTIP units that would be earned at threshold performance with respect to both the operating performance metrics and the relative TSR metrics, after giving effect to the maximum downward modifier. The amount shown in the “Maximum” column reflects the total number of LTIP units that would be earned at maximum performance with respect to both the operating performance metrics and the relative TSR metrics, after giving effect to the maximum upward modifier. See “—Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” for a description of the terms of these performance-based awards and the Company’s estimated performance as of December 31, 2023. (4) This grant of LTIP units vested immediately upon grant, but remains subject to a three-year restriction on transfer from the date of grant. (5) Represents cash payouts that were possible pursuant to the formulaic component of our annual bonus program for 2023. See “—Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” for a description of these awards. Grants of all equity awards were made pursuant to the Fifth Amended and Restated 2005 Stock Option and Incentive Plan. LTIP units that are only subject to time-based vesting based on continued employment through a specified date (and have not been forfeited) generally entitle executives to receive cash dividends, dividend equivalents or distributions whether or not then vested. LTIP units that are subject to performance-based vesting hurdles do not entitle the holder to receive distributions prior to the achievement of these hurdles. If and when performance-based vesting occurs, the holders are entitled to receive a combination of cash payments and distributions with respect to all LTIP units that are earned equal to the amounts that would have been received if the earned LTIP units had been entitled to receive full distributions from the beginning of the applicable performance period. See “Potential Payments Upon Termination or Change in Control” below, for a discussion regarding potential acceleration of the equity awards and a description of the material terms of each named executive officer’s employment agreement.
2023 Grants of Plan-Based Awards
| EXECUTIVE COMPENSATION | 69 |
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023 The following table sets forth certain information with respect to outstanding equity awards held by each named executive officer at the fiscal year ended December 31, 2023.
Outstanding Equity Awards at Fiscal Year-End 2023
| | Option Awards | | | | Stock Awards | | | | | Name | 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 of Stock That Have Not Vested(#)(1) | Market Value of Shares or Units of Stock That Have Not Vested(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units or Other Rights that Have Not Vested(2) | | Marc Holliday | 52,500(4) | — | $99.86 | 06/17/2026 | 371,220 | $16,768,007 | 346,010 | $15,629,272 | | | 52,500(4) | — | $105.73 | 06/17/2027 | — | — | — | — | | Andrew Mathias | — | — | — | — | 291,972 | $13,188,375 | 276,809 | $12,503,463 | | Matthew J. DiLiberto | 15,000(4) | — | $106.05 | 01/11/2027 | 65,639 | $2,964,914 | 25,630 | $1,157,707 | | Andrew S. Levine | 15,000(4) | — | $106.05 | 01/11/2027 | 73,769 | $3,332,146 | 25,630 | $1,157,707 |
Outstanding Equity Awards at Fiscal Year-End 2023
(1) For each of our named executive officers, includes the following:
Outstanding Equity Awards at Fiscal Year-End 2023
| Executive | 2023 Operational Performance- Based LTIP Units(a) | 2022 Operational Performance- Based LTIP Units(b) | 2021 Performance- Based LTIP Units(c) | 2023 Time-Based Employment Agreement LTIP Units | 2022 Time-Based Employment Agreement LTIP Units | 2021 Time-Based Employment Agreement LTIP Units | 2022 One Madison LTIP Units | | Marc Holliday | 86,083 | 62,822 | — | 134,156(d) | 40,831(e) | 47,328(f) | — | | Andrew Mathias | 68,867 | 50,258 | — | 104,344(d) | 31,758(e) | 36,745(f) | — | | Matthew J. DiLiberto | 6,377 | 4,653 | 7,607 | 42,422(d) | — | — | 4,580(g) | | Andrew S. Levine | 6,377 | 4,653 | 7,607 | 38,756(h) | 11,796(i) | — | 4,580(g) |
Outstanding Equity Awards at Fiscal Year-End 2023
(a) Represents the number of LTIP units that were earned 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 LTIP units will vest 100% for Messrs. Holliday and Mathias on December 31, 2025, and 50% on each of December 31, 2025 and December 31, 2026 for Messrs. DiLiberto and Levine, subject, in each case, to continued employment. (b) Represents the number of LTIP units that were earned 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 LTIP units will vest 100% for Messrs. Holliday and Mathias on December 31, 2024, and 50% on each of December 31, 2024 and December 31, 2025 for Messrs. DiLiberto and Levine, subject, in each case, to continued employment. (c) Represents the sum of (i) the number of LTIP units that were earned for 2021 operational performance, as modified by our absolute TSR performance over the three-year period ending December 31, 2022 and (ii) the number of LTIP units that were earned based on our TSR performance relative to our NYC Peer Group over the three-year period ending December 31, 2022. The LTIP units vested 100% for Messrs. Holliday and Mathias on December 31, 2023, and 50% for Messrs. DiLiberto and Levine, with the remaining 50% scheduled to vest on December 31, 2024 subject, in each case, to continued employment. LTIP units that vested on December 31, 2023 are reflected in the “2023 Options Exercised and Stock Vested” table, below. See “—Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” and “—Compensation Discussion and Analysis—Other Compensation Policies and Information—Outstanding Annual Equity Award Performance Summary (2021-2023)” for a description of the terms of these performance-based awards and the Company’s performance as of December 31, 2023. (d) For Messrs. Holliday and DiLiberto, represents LTIP units that vested one-third on January 1, 2024 and LTIP units that are scheduled to vest one-third on January 1, 2025 and one-third on January 1, 2026, subject to continued employment. For Mr. Mathias, all of the LTIP units vested on January 30, 2024 in connection with the non-renewal of his employment agreement. (e) For Mr. Holliday, represents LTIP units that vested one-third on January 1, 2023 and one-third on January 1, 2024 and LTIP units that are scheduled to vest one-third on January 1, 2025, subject to continued employment. For Mr. Mathias, all of the LTIP units vested on January 30, 2024 in connection with the non-renewal of his employment agreement. (f) For Mr. Holliday, represents LTIP units that vested on January 1, 2024. For Mr. Mathias, the LTIP units vested on January 30, 2024 in connection with the non-renewal of his employment agreement. (g) Represents LTIP units that were awarded as one-time, long-term incentive grants in connection with our One Madison
Outstanding Equity Awards at Fiscal Year-End 2023
| 70 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Outstanding Equity Awards at Fiscal Year-End 2023
development project that vested one-third on December 31, 2022 and one-third on December 31, 2023, and LTIP units that are scheduled to vest one-third on December 31, 2024, subject to continued employment. (h) Represents LTIP units that vested one-half on January 1, 2024 and LTIP units that are scheduled to vest one-half on January 1, 2025, subject to continued employment. (i) Represents LTIP units that vested one-third on January 1, 2023 and one-third on January 1, 2024 and LTIP units that are scheduled to vest one-third on January 1, 2025, subject to continued employment. (2) Based on a price of $45.17 per share/unit, which was the closing price on the NYSE of one share of our common stock on December 29, 2023. Assumes that the value of LTIP units on a per unit basis is equal to the per share value of our common stock. (3) For each of our named executive officers includes the following:
Outstanding Equity Awards at Fiscal Year-End 2023
| Executive | 2023 Performance- Based LTIP Units(a) | 2022 Performance- Based LTIP Units(b) | | Marc Holliday | 276,137 | 69,873 | | Andrew Mathias | 220,910 | 55,899 | | Matthew J. DiLiberto | 20,454 | 5,176 | | Andrew S. Levine | 20,454 | 5,176 |
Outstanding Equity Awards at Fiscal Year-End 2023
(a) Represents the sum of the LTIP units that would be earned if (i) the “maximum” performance goal were achieved with respect to the portion of the LTIP units eligible to be earned based on absolute TSR, (ii) the “maximum” performance goal were achieved with respect to the portion of the LTIP units eligible to be earned based on TSR relative to the constituents of the Dow Jones US Real Estate Office Index and (iii) the “maximum” performance goal was achieved with respect to the portion of the LTIP units eligible to be earned based on TSR relative to NYC peers. Earned LTIP units will vest 100% for Messrs. Holliday and Mathias on December 31, 2025, and 50% on each of December 31, 2025 and December 31, 2026 for Messrs. DiLiberto and Levine, subject, in each case, to continued employment. See “—Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” and “—Compensation Discussion and Analysis—Other Compensation Policies and Information—Outstanding Annual Equity Award Performance Summary (2021-2023)” for a description of the terms of these performance-based awards and the Company’s projected performance as of December 31, 2023. (b) Represents the sum of the LTIP units that would be earned if (i) the “threshold” performance goal was achieved with respect to the portion of the LTIP units eligible to be earned based on absolute TSR, (ii) the “maximum” performance goal was achieved with respect to the portion of the LTIP units eligible to be earned based on TSR relative to the constituents of the SNL office index at the time the award was granted and (iii) the “threshold” performance goal was achieved with respect to the portion of the LTIP units eligible to be earned based on TSR relative to NYC peers. Earned LTIP units will vest 100% for Messrs. Holliday and Mathias on December 31, 2024, and 50% on each of December 31, 2024 and December 31, 2025 for Messrs. DiLiberto and Levine, subject, in each case, to continued employment. See “—Compensation Discussion and Analysis—Our 2023 Executive Compensation Program” and “—Compensation Discussion and Analysis—Other Compensation Policies and Information— Outstanding Annual Equity Award Performance Summary (2021-2023)” for a description of the terms of these performance-based awards and the Company’s projected performance as of December 31, 2023. (4) Reflects awards of Class O LTIP units. The conversion threshold for the Class O LTIP units, which is equivalent to the exercise price for a stock option, was determined by reference to the fair market value under our Fifth Amended and Restated 2005 Stock Option and Incentive Plan of one share of our common stock on each applicable grant date. See “—Other Compensation Policies and Information— Other Matters—LTIP units and Class O LTIP units” for a description of Class O LTIP units.
2023 Option Exercises and Stock Vested
2023 Option Exercises and Stock Vested The following table sets forth certain information with respect to the exercise of stock options and the vesting of stock, including restricted stock, restricted stock units, LTIP units and similar instruments for each named executive officer during the fiscal year ended December 31, 2023.
2023 Option Exercises and Stock Vested
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Vesting ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Marc Holliday | — | — | 328,885 | $13,760,479 | | Andrew Mathias | — | — | 235,505 | $9,854,698 | | Matthew J. DiLiberto | — | — | 49,896 | $1,956,966 | | Andrew S. Levine | — | — | 46,578 | $1,880,141 |
2023 Option Exercises and Stock Vested
Amounts reflect the market value of the stock on the day the stock vested.
2023 Option Exercises and Stock Vested
| EXECUTIVE COMPENSATION | 71 |
2023 Nonqualified Deferred Compensation
2023 Nonqualified Deferred Compensation The following table sets forth certain information regarding non-tax qualified compensation deferred during the year ended December 31, 2023. All of the information below relates to notional stock units that we granted to certain of our named executive officers pursuant to employment agreements we had entered into with them. Pursuant to these employment agreements, we agreed to grant notional stock units with a specified value to certain of our named executive officers each year, which are subject to vesting based on continued employment for the following year. Once vested, these notional stock units represent a contingent right to receive the value of one share of our common stock. Under the terms of the deferred compensation agreements, each participant is also entitled to dividend equivalent rights, to be paid in cash on a current basis, equal to the amount per share of any cash dividend we declare, multiplied by the total number of notional units held by such participant as of the record date for such dividend. Vested notional stock units are settled in cash no later than 30 days following the earliest of (i) the executive’s death, (ii) the date of the executive’s separation from service with us and (iii) the effective date of a change in control. Under the employment agreements with our Named Executive Officers that were in effect during 2023, we have eliminated nonqualified deferred compensation.
2023 Nonqualified Deferred Compensation
| Executive | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(1)(2) | Aggregate Withdrawals/ Distributions ($)(3) | Aggregate Balance at Last FYE ($)(1)(4) | | Marc Holliday | — | — | $902,761 | $199,571 | $2,774,070 | | Andrew Mathias | — | — | $562,598 | $124,372 | $1,728,791 | | Matthew J. DiLiberto | — | — | — | — | — | | Andrew S. Levine | — | — | — | — | — |
2023 Nonqualified Deferred Compensation
(1) Awards of notional units constitute “Stock Awards” for purposes of the Summary Compensation Table, and, as a result, the full grant date fair value of these awards computed in accordance with ASC 718, as of the grant date of such awards, are included in the “Stock Awards” column of the Summary Compensation Table for the year in which they were granted. The right to receive dividend equivalents was factored into the determination of the grant date fair value, which means that the value of the dividend equivalents included in “Aggregate Earnings in Last FY” was effectively already included in the Summary Compensation Table. (2) The amounts in this column represent the increase or decrease in value of vested notional units from December 31, 2022 through December 31, 2023, as calculated based on the closing stock price on the NYSE of one share of our common stock on December 31, 2022 compared to the closing stock price on the NYSE of one share of our common stock on December 31, 2023, plus the aggregate value of dividend equivalent rights paid with respect to all vested and unvested notional units held by each executive during 2023. (3) Represents the aggregate value of dividend equivalent rights paid with respect to all vested and unvested notional units held by each executive during 2023. (4) Based on a per share price of $45.17, which was the closing stock price on the NYSE of one share of our common stock on December 29, 2023.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control We have contractual arrangements with our named executive officers that provide for payments, acceleration of vesting or other benefits to our named executive officers upon a termination of employment in certain circumstances or upon a change in control. These include our employment agreements with our named executive officers, our performance-based equity awards and our stock options and Class O LTIP Units. The discussion below describes these contractual arrangements in greater detail.
Hypothetical Illustration of Payments upon Termination or Change in Control
Hypothetical Illustration of Payments upon Termination or Change in Control The following tables show the potential payments and estimated value of the benefits that our named executive officers, other than our former President, would have been entitled to receive upon a termination of their employment by us without cause or by them for good reason or upon the death or disability as of December 31, 2023. Our named executive officers would not have been entitled to any payments or benefits other than those already accrued in the event of a termination of their employment by us for cause or by them without good reason (including upon retirement). The types of events constituting cause, good reason, disability and a change in control may differ in some respects among the different arrangements providing for benefits to the named executive officers; however, for consistency in presentation, the payments and estimated value of benefits have been grouped together based on these concepts without regard for any such differences. The potential payments and estimated values set forth below are based on the terms of the employment agreements in effect as of December 31, 2023.
Pay Ratio Disclosure Rule
Pay Ratio Disclosure Rule Pursuant to a mandate of 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, or PEO. The PEO of our Company is Mr. Holliday. For 2023, the annual total compensation of Mr. Holliday, our PEO, of $18,508,171 as shown in the Summary Compensation Table above, was approximately 313 times the annual total compensation of $59,083 of a median employee calculated in the same manner. We identified the median employee using the annual base salary and target annual cash incentive compensation, as of December 31, 2023, plus any long-term equity incentive awards granted in 2023 for all individuals (excluding our PEO) who were employed by us on December 31, 2023, the last day of our payroll year, whether employed on a full-time or part-time basis. As of December 31, 2023, 880 of our 1,188 employees were hourly-paid employees involved in building operations, most of whom are subject to collective bargaining agreements. If these employees were not included for purposes of identifying our median employee, the annual total compensation of a median employee would be $163,151 and the annual total compensation of our PEO would be approximately 113 times such amount.
Pay Ratio Disclosure Rule
| EXECUTIVE COMPENSATION | 77 |
Pay Versus Performance
Pay Versus Performance The information below presents the relationship between the compensation of our named executive officer and certain performance measures in accordance with Item 402(v) of Regulation S-K. For a discussion of our compensation programs and pay for performance philosophy, please refer to the section captioned “Compensation Discussion and Analysis,” above.
Pay Versus Performance Table
Pay Versus Performance Table
Pay Versus Performance Table
| | Summary Compensation Table Total for PEO ($) | Compensation Actually Paid to PEO ($)(1) | Average Summary Compensation Table Total for Non-PEO NEOs ($) | Average Compensation Actually Paid to Non-PEO NEOs ($)(2) | Value of Initial Fixed $100 Investment Based On: | | Net (Loss) Income, in thousands ($) | Normalized FFO per Share ($)(5) | | Year | | | | | Total Stockholder Return ($)(3) | Peer Group Total Stockholder Return ($)(4) | | | | 2023 | 18,508,171 | 30,796,068 | 6,439,504(6) | 10,630,597(6) | 66 | 71 | (599,337) | 5.48 | | 2022 | 16,660,855 | (11,758,654) | 7,006,710(6) | (2,389,306)(6) | 44 | 68 | (76,303) | 6.76 | | 2021 | 21,088,057 | 32,642,206 | 7,711,773(6) | 11,565,039(6) | 90 | 103 | 480,632 | 6.58 | | 2020 | 15,194,726 | 9,617,334 | 6,741,540(6) | 4,723,677(6) | 71 | 78 | 414,758 | 6.85 |
Pay Versus Performance Table
(1) Represents amounts of “compensation actually paid” as computed in accordance with Item 402(v) of Regulation S-K, not the actual amount of compensation earned by or paid to Mr. Holliday during each year. The table below reflects the adjustments made from the amounts reported in the “Total” column of the Summary Compensation Table for each year to calculate the amounts set forth in “Compensation Actually Paid to PEO” column in the table above.
Pay Versus Performance Table
| Year | Summary Compensation Table Total for PEO ($) | Less Summary Compensation Table Value of Equity Awards ($)(a) | Fair Value of Equity Award Adjustments ($)(b) | Compensation Actually Paid to PEO ($) | | 2023 | 18,508,171 | (15,767,540) | 28,055,437 | 30,796,068 | | 2022 | 16,660,855 | (14,284,701) | (14,134,808) | (11,758,654) | | 2021 | 21,088,057 | (18,099,677) | 29,653,826 | 32,642,206 | | 2020 | 15,194,726 | (12,643,310) | 7,065,918 | 9,617,334 |
Pay Versus Performance Table
(a) Represents the sum of the amounts reported in the “Stock Awards” column of the Summary Compensation Table for the applicable fiscal year. The equity award adjustments for each fiscal year include the following: (i) the addition of the year-end fair value of any equity awards granted in the year that are outstanding and unvested as of the end of the year; (ii) for any awards granted in prior years that are outstanding and unvested as of the end of the fiscal year, the addition (or subtraction, if applicable) of the change in fair value of between the end of the prior fiscal year the end of the applicable fiscal year; (iii) for awards that are granted and vest in the same fiscal year, the addition of the fair value of such awards as of the vesting date; (iv) for awards granted in prior years that vest during the fiscal year, the addition (or subtraction, if applicable) of the change in fair value between the end of the prior fiscal year and the vesting date of such awards; (v) for awards granted in prior years that fail to meet the applicable vesting conditions during the fiscal year, the subtraction of the fair value of such awards at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on such awards in the applicable year prior to the vesting date. The amounts deducted or added in calculating the equity award adjustments are as follows:
Pay Versus Performance Table
| Year | Year End Fair Value of Equity Awards Granted in the Year and Unvested ($) | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Value of Dividends or other Earnings Paid on Awards ($) | Total Equity Award Adjustments ($)(i) | | 2023 | 18,575,794 | 4,556,883 | 1,292,938 | 2,027,376 | — | 1,602,445 | 28,055,437 | | 2022 | 4,807,388 | (14,493,069) | 683,334 | (2,002,870) | (4,842,970) | 1,713,380 | (14,134,808) | | 2021 | 25,933,302 | 2,631,512 | 1,318,015 | (1,636,532) | — | 1,407,529 | 29,653,826 | | 2020 | 8,918,153 | (3,385,784) | 982,595 | — | — | 550,954 | 7,065,918 |
Pay Versus Performance Table
| 78 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
Pay Versus Performance Table
The fair values of time-based equity awards are based on the closing price of our shares of common stock as reported on the NYSE on the relevant valuation date. Performance-based restricted share units were valued on the relevant valuation date using a Monte Carlo simulation model in accordance with the provisions of ASC Topic 718. (2) Represents amounts of average “compensation actually paid” as computed in accordance with Item 402(v) of Regulation S-K, not the actual average amount of compensation earned by or paid to our named executive officers other than Mr. Holliday as a group. The table below reflects the adjustments made from the amounts reported in the “Total” column of the Summary Compensation Table for the named executive officers as a group (excluding Mr. Holliday) each year to calculate the amounts set forth in “Compensation Actually Paid to non-PEO NEOs” column in the table above, using the same methodology as set forth in footnote 1(b), above.
Pay Versus Performance Table
| Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs ($) | Less Average Summary Compensation Table Value of Equity Awards ($)(a) | Average Fair Value of Equity Award Adjustments ($)(b) | Average Compensation Actually Paid to Non-PEO NEOs ($) | | 2023 | 6,439,504 | (5,716,304) | 9,907,397 | 10,630,597 | | 2022 | 7,006,710 | (6,036,720) | (3,359,296) | (2,389,306) | | 2021 | 7,711,773 | (6,677,199) | 10,530,465 | 11,565,039 | | 2020 | 6,741,540 | (4,872,895) | 2,855,032 | 4,723,677 |
Pay Versus Performance Table
(a) Represents the sum of the amounts reported in the “Stock Awards” column of the Summary Compensation Table for the applicable fiscal year. (b) The equity award adjustments for each fiscal year reflect the same methodology set forth in footnote 1, above. The amounts deducted or added in calculating the equity award adjustments are as follows:
Pay Versus Performance Table
| Year(i) | Average Year End Fair Value of Equity Awards Granted in the Year and Unvested ($) | Year over Year Average Change in Fair Value of Outstanding and Unvested Equity Awards ($) | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year ($) | Year over Year Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year ($) | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year ($) | Average Value of Dividends or other Earnings Paid on Awards ($) | Total Equity Award Adjustments ($) | | 2023 | 6,660,330 | 1,494,511 | 538,835 | 635,195 | — | 578,527 | 9,907,397 | | 2022 | 1,882,454 | (4,551,556) | 905,033 | (638,835) | (1,544,649) | 588,257 | (3,359,296) | | 2021 | 8,850,588 | 884,588 | 853,696 | (543,494) | — | 485,088 | 10,530,465 | | 2020 | 2,947,962 | (1,311,858) | 1,018,117 | — | — | 200,812 | 2,855,032 |
Pay Versus Performance Table
(i) The fair values of time-based equity awards are based on the closing price of our shares of common stock as reported on the NYSE on the relevant valuation date. Performance-based restricted share units were valued on the relevant valuation date using a Monte Carlo simulation model in accordance with the provisions of ASC Topic 718. (3) TSR is calculated assuming a $100 investment in the Company and the peer group on December 31, 2019, and assuming the reinvestment of any dividends during the applicable measurement period, calculated through the end of the year shown based on share prices. (4) Represents the TSR for the benchmarking peer group described in “Compensation Discussion and Analysis,” which includes the following peer companies: Alexandria Real Estate Equities, Inc., Boston Properties, Inc., Douglas Emmett, Inc., Empire State Realty Trust, Inc., Hudson Pacific Properties, Inc., Kennedy-Wilson Holdings, Inc., Kilroy Realty Corporation, Ladder Capital Corp, Paramount Group, Inc. and Vornado Realty Trust. (5) Normalized FFO per share represents reported FFO per share as adjusted for non-cash fair value adjustments, gains or losses on the early extinguishment of debt and other adjustments for comparability between periods. Non-PEO named executive officers for 2023, 2022, 2021 and 2020 includes Messrs. Mathias, DiLiberto and Levine.
Pay Versus Performance Table
| EXECUTIVE COMPENSATION | 79 |
Relationship Between Compensation Actually Paid and Financial Performance
Relationship Between Compensation Actually Paid and Financial Performance The following graphs illustrate the relationship across our last three completed fiscal years between the amounts disclosed in the Pay Versus Performance Table, above, as “Compensation Actually Paid” to our PEO and the “Average Compensation Actually Paid” to our non-PEO named executive officers and TSR, Peer Group TSR, Net Income and Normalized FFO per share.
COMPENSATION ACTUALLY PAID VS. TSR
COMPENSATION ACTUALLY PAID VS. TSR
COMPENSATION ACTUALLY PAID VS. NET (LOSS) INCOME
COMPENSATION ACTUALLY PAID VS. NET (LOSS) INCOME
COMPENSATION ACTUALLY PAID VS. NET (LOSS) INCOME
| 80 | SL GREEN REALTY CORP. 2024 PROXY STATEMENT |
COMPENSATION ACTUALLY PAID VS. NORMALIZED FFO PER SHARE
COMPENSATION ACTUALLY PAID VS. NORMALIZED FFO PER SHARE