Directorship: Key Issues for REIT Directors in an Uncertain Market
By Cheryl Soltis Martel
Influence of Say on Pay and Peer Groups
While the number of companies failing to pass say on pay has risen on a macro level, votes at only four REITs failed in 2012, noted Joseph Sorrentino, managing director of Steven Hall & Partners. Discussion at the board and compensation committee level has led to the modification and redesign of compensation programs to try to win the vote. “Winning by 51 percent is not considered a win,” said Sorrentino. “Most of our clients don’t feel comfortable until about 80 percent.” In terms of compensation design, he said, there is an increased focus on aligning incentives with company performance. “Now companies are struggling with how to define performance: Is it stock price, is it operational, is it a function of the two, and what is the time frame? What defines short and long term?” Sorrentino said.