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| | | Stockholder Outreach following Annual Meeting | | |||||||||||||||||||||||||||
| | | 2023 | | | 2022 | | | 2021 | | | 2020 | | | 2019 | | |||||||||||||||
Offered Engagement to stockholders representing approx. | | | | | 75% | | | | | | 66% | | | | | | 65% | | | | | | 65% | | | | | | 65% | | |
Had one-on-one discussions with stockholders representing approx. | | | | | 69% | | | | | | 30% | | | | | | 50% | | | | | | 41% | | | | | | 11% | | |
Directors participated in calls with stockholders representing approx. | | | | | 38% | | | | | | 29% | | | | | | 36% | | | | | | 41% | | | | | | 11% | | |
| | | | Stockholder Feedback (“What We Heard”) | | | Actions (“What We Did”) | | | Impact of Actions (“Why It’s Important”) | | | 2023 / 2024 Features | |
Fixed Pay | | 2018: Base salary and deferred compensation provide overlapping fixed pay elements | | | ✓ Retroactively reduced CEO base salary ✓ Eliminated deferred compensation | | | ✓ Reduces fixed pay ✓ Reduces threshold, target and maximum formulaic bonus ✓ Eliminates multiple fixed pay elements | | | ✓ CEO base salary unchanged since 2018 and is the only fixed pay element | | ||
Annual Incentives | | 2018: Annual incentive should focus on 2018: Discretionary annual equity bonus process not clear 2022: Reduce discretion in annual incentives for NEOs | | | ✓ Replaced TSR with operating metrics ✓ In 2023, implemented 60% performance-based annual incentive for CFO | | | ✓ Strengthens link to operational metrics ✓ Reduces discretion ✓ Improves transparency | | | ✓ 100% of CEO annual incentive has formulaic outcome; 60% of CFO annual incentive has formulaic outcome ✓ Up to 100% of annual incentive may be in equity that remains subject to a three-year no-sell restriction | | ||
| Long-Term Incentives | | 2018: Retesting feature allows for multiple vesting opportunities 2018: Contracts guarantee equity grants on multi-year basis 2018: Performance period should be longer than one year 2022: Ensure long-term incentives payout in line with stockholder value creation | | | ✓ Eliminated retesting from all long-term incentives ✓ Eliminated guaranteed equity grants ✓ LTIP: annual operating goals with 3-year absolute TSR modifier (50%), and 3-year relative TSR (50%) ✓ In 2023, implemented a vesting cap for relative TSR-based equity | | | ✓ Strengthens rigor of ✓ Eliminates contractual guarantees ✓ Strengthens pay-for-performance link ✓ Improves long-term alignment of ✓ Limits payout at target level when 3-year absolute TSR is negative even if relative TSR outperforms peers | | | ✓ Greater than 60% of CEO’s target equity incentives are in the form of performance-based equity incentives | | |
| Other | | 2018: Compensation program is complicated | | | ✓ Reduced pay elements from 7 to | | | ✓ Improves transparency and pay for performance | | | ✓ Simple, transparent compensation structure | | |
| 2018: Director compensation is high relative to peers | | ✓ Reduced director compensation by $65,000 since 2019 | | | ✓ Improves alignment of | | | ✓ Reduced director pay since 2019 | | ||||
| 2023: Reduce NEO perquisites cost | | ✓ Eliminated auto- mobile benefits for NEOs | | | ✓ Aligns perquisites with industry best practices | | | ✓ No excessive benefits for NEOs | | ||||
| ✓ 92.3% of Mr. Holliday’s Total Direct Compensation for 2023 was at risk and approximately 12.5% lower than the total compensation amount set forth in the Summary Compensation Table. | |
| | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | | Board Composition & Corporate Governance | | | Environmental & Social | |
2018 | | ✓ Amended bylaws to permit stockholders to amend bylaws by a majority vote | | | ✓ Committed to reduce GHG emissions intensity 30% by 2025 ✓ Achieved CDP score of “B” as first time responder | | ||
2019 | | ✓ Transition of | | | ✓ Committed to >$2M in annual donations to NYC charities ✓ #1 scoring REIT for ESG Disclosures on Bloomberg World Index ✓ Achieved GRESB Green Star designation as | | ||
| 2020 | | ||||||
2016
Proxy
Statement
April 22, 2016
2016 PROXY STATEMENT HIGHLIGHTS
During2015, our CEO and other executive officers led us to achieve strong operational and financial results, including the following:
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2016 Proxy Statement 1
2016 PROXY STATEMENT HIGHLIGHTS
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2 SL Green Realty Corp.
2016 PROXY STATEMENT HIGHLIGHTS
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| | | ✓ Launched not-for-profit Food1st to serve first responders and food-insecure New Yorkers, while revitalizing NYC’s restaurants ✓ Released first formal SASB disclosures | | |||
| 2021 | | | ✓ Committed to enhancing Board diversity by 2022 annual meeting | | | ✓ Published first formal TCFD report ✓ Donated $6M to more than 70 not-for-profit organizations | | |
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| ✓ Appointed Carol Brown, enhancing Board diversity | | | ✓ Expanded Scope 3 disclosures and committed to emissions reduction through SBTi ✓ Increased racial diversity of all newly hired employees in 2022 to 76% | | |
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| ✓ Continued board succession plan: retirement of ✓ Termination of Chairman Emeritus’ retainer ✓ Anticipate appointing a new Board member in | | | ✓ Validated Scope 1 and | ||
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2016 Proxy Statement 3
| 2024 PROXY STATEMENT HIGHLIGHTS | | | 3 | |
Stockholders are being asked to approve the adoption of our Fourth Amended and Restated 2005 Stock Option and Incentive Plan, which the Board approved and unanimously recommends that stockholders approve. We believe that having an equity plan in place with a sufficient number of shares is critical to our ability to attract, retain and motivate employees in a highly competitive marketplace and ensure that our executive compensation is structured in a manner that aligns our executives’ interest with our success. The following highlights reasons why we believe stockholders should vote in favor of our Fourth Amended and Restated 2005 Stock Option and Incentive Plan.
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| | Election of • The Board, upon the recommendation of the Nominating and | ||||||||||
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4 SL Green Realty Corp.
SL GREEN REALTY CORP.420 Lexington AvenueNew York, New York10170-1881
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Dear Stockholder:
You are invited to attend the20162025 annual meeting of stockholders of SL Green Realty Corp., a Maryland corporation, which will be held on Thursday, June2, 2016 at10:00 a.m., local time, at The Grand Hyatt New York,109 East42nd Street, New York, New York,10017. The annual meeting will be held for the following purposes:
| | | The Board recommends a vote FOR each Nominee. SEE PAGE 11 | | ||||||||||
| John H. Alschuler Carol N. Brown Lauren B. Dillard | | | Stephen L. Green Craig M. Hatkoff | | | Marc Holliday Andrew W. Mathias | | ||||||
• Our nominees represent a Board that has a diversity of knowledge, skills, experience and perspectives, as well as diversity of age and gender. • Each nominee has key skills that we believe are valuable to the effective oversight of the Company and the execution of our strategy. | | |||||||||||||
| | | Advisory Approval of Executive Compensation • At the heart of our executive compensation philosophy is a commitment to variable, incentive-based pay that strives to align stockholder value with the economic interests of our management team. • We believe that our executive compensation programs provide appropriate performance-based incentives to attract and retain leadership talent in the highly competitive New York City real estate market, to align management and stockholder interests and to continue to drive our long-term track record of superior return to stockholders. | | | The Board recommends a vote FOR this proposal. SEE PAGE 41 | | |||||||
| | Ratification of Independent Registered Public Accounting Firm • The Audit Committee of the • The Audit Committee and | ||||||||||||
| | The Board recommends a vote FOR this proposal. SEE PAGE 83 | |
In addition, stockholders may be asked
| 4 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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Any action may be takenis a very active transaction-oriented company
The Board of Directors has fixed the close of business on March 31, 2016Manhattan market, where we have significant experience and valuable insights
New York, New YorkApril22, 2016
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Whether or not you plan to attend the annual meeting, please carefully read the proxy statement and other proxy materials and complete a proxy for your shares as soon as possible. You may authorize your proxy via the Internet or by telephone by following the instructions on the website indicated in the Notice of Internet Availability of Proxy Materials that you received in the mail. You also may request a paper or an e-mail copy of our proxy materials and a paper proxy card at any time. If you attend the annual meeting, you may vote in person if you wish, even if you previously have submitted your proxy. However, please note that if your shares are held of record by a bank, broker or other nominee and you wish to vote in person at the annual meeting, you must obtain a proxy issued in your name from such bank, broker or other nominee.
2016 Proxy Statement 5
References in this proxy statement to “we,” “us,” “our,” “ours,” and the “Company” refer to SL Green Realty Corp., unless the context otherwise requires. This proxy statement and a form of proxy have been made available to our stockholders on the Internet and the Notice of Internet Availability of Proxy Materials has been mailed to stockholders on or about April22, 2016.
6 SL Green Realty Corp.
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
We are committed to operatingmaintaining our ESG industry leadership while reducing our environmental impact
| 97% | | | 23M | |
| Of Reporting Properties(1) Hold a Green Building Certification (LEED, ENERGY STAR, and/or BOMA 360) | | | Square Feet Earned the WELL Health- Safety Rating | |
| 2024 PROXY STATEMENT HIGHLIGHTS | | | 5 | |
| | | Diversity Our Board nominees have a diversity of knowledge, skills, experience and perspectives, as well as diversity of age and gender | | |
| | | 50% of our independent Board nominees are diverse, including gender and racial/ethnic diversity | | |
| | | Experience Our Board nominees have broad experience serving on public boards in industries relevant to the Company | | |
| | | 43% of our Board nominees currently serve or have served on the Boards of other publicly traded companies | | |
| | | Leadership Our Board nominees have strong corporate leadership backgrounds such as being CEO, CFO or holding other executive positions | | |
| | | 86% of our Board nominees currently serve or have served as CEO or in senior leadership positions | |
| | Annual Director Elections Our directors are elected for one-year terms. | | |||
| | Majority Vote Standard with Director Resignation Policy In an uncontested election (as is the case for this Annual Meeting), our bylaws provide that a majority of all the votes cast with respect to a nominee’s election is required for such nominee to be elected to serve on the Board. Further, we have adopted a director resignation policy for directors who fail to receive majority support. | | |||
| | | | Stockholder Amendments to Bylaws We provide stockholders the right to amend our bylaws by a majority vote without any ownership or holding period limitations. | | |
| | | | Proxy Access A stockholder (or a group of up to 20 stockholders) owning 3% or more of outstanding common stock continuously for at least 3 years may nominate, and include in our proxy materials, director candidates constituting up to the greater of two individuals or 20% of the Board, if the nominating stockholder(s) and the nominee(s) satisfy the requirements specified in our bylaws. | | |
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| 6 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | | Pay Element | | | Key Characteristics | |
| FIXED | | | Annual Base Salary | | | Represents the only fixed pay element | |
| No change in CEO base salary since 2018 | | ||||||
| AT-RISK | | | Annual Bonus | | | Determined 100% formulaically for our CEO based on metrics that directly correspond to our strategy Up to 100% of annual incentive can be received in equity that remains subject to a three-year no-sell restriction | |
| For 2023, CFO annual bonus determined 60% formulaically based on same metrics used to determine CEO annual bonus | | ||||||
| Performance-Based Equity Awards | | | Awards are based (i) 50% on performance against annual operating goals, subject to an absolute TSR modifier over a three-year performance period, and (ii) 50% on relative TSR over a three-year performance period, subject to a vesting cap if absolute TSR is negative | | |||
| Greater than 60% of CEO’s target equity incentives are in the form of performance-based equity incentives | | ||||||
| Time-Based Equity Awards | | | Multi-year time-based equity awards that vest based on continued service, and are subject to a no-sell restriction for three years after grant date | |
| 92.3% of Mr. Holliday’s Total Direct Compensation was at risk and approximately 12.5% lower than the total compensation amount set forth in the Summary Compensation Table. | |
| 2024 PROXY STATEMENT HIGHLIGHTS | | | 7 | |
| 8 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
ESG Leadership | | | Industry Leadership | | | Building Certifications | | | Awards & Accolades | | ||||||||||||
Highest Scoring U.S. Office REIT | | | | | Validated Science-Based Targets with SBTi | | | | | 12 Buildings Certified — 11.4M SF | | | | | Partner of the Year Sustained Excellence 2018-2023 | | | | ||||
Top 20% of all GRESB Participants | | | | | Early Adopter for TCFD Global Risk Disclosure | | | | | 22 Buildings Certified — 20M SF | | | | | Green Lease Leader Platinum 2023-2026 | | | | ||||
R-FactorTM Score Leader (Top 10%) | | | | | Mayor’s Carbon Challenge Participant — Goal Achieved | | | | | 29 Buildings Certified — 26M SF | | | | | Newsweek America’s Most Responsible Companies 2023 | | | | ||||
95th Percentile Ranking of Global Peer Set | | | | | Net Zero by 2050 Goal − Aligned | | | | | 25 LEED Certified Buildings — 25M SF | | | | | S&P Global Sustainability Yearbook Member 2022-2024 | | | | ||||
Top 10 ESG Disclosure Score Among REITs Listed on Russell 1000 Index | | | | | NYSERDA Partnership for Workforce Training | | | | | 8 Buildings Certified — 10M SF | | | | | Great Place to Work Certified 2019, 2022-2023 | | | |
| | | SL GREEN REALTY CORP.One Vanderbilt AvenueNew York, New York 10017-3852 | | | 9 | |
| | | Date & Time June 3, 2024 10:00 AM, Eastern Time | | | | | Location The auditorium at One Vanderbilt Avenue, New York, New York | | | | | Record Date March 28, 2024 | |
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| To elect the seven director nominees named in the proxy statement to serve on the Board of Directors for a one-year term and until their successors are duly elected and qualify PAGE 11 | | | | To hold an advisory vote on executive compensation PAGE 41 | | | | To ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024 PAGE 83 | | ||||||||||||
| | VoteFOR | | | | | | | VoteFOR | | | | | | | VoteFOR | |
| In addition, stockholders may be asked to consider and vote upon any other matters that may properly be brought before the Annual Meeting and at any adjournments or postponements thereof. Any action may be taken on the foregoing matters at the Annual Meeting on the date specified above, or on any date or dates to which the annual meeting may be adjourned, or to which the annual meeting may be postponed. The Board of Directors has fixed the close of business on March 28, 2024 as the record date for determining the stockholders entitled to notice of, and to vote at, the Annual Meeting and at any adjournments or postponements thereof. By Order of the Board of Directors, | | | | Voting Your vote is very important to us. Please vote as soon as possible by one of the methods shown below: | | ||||||||||||||||
| | | | By Internet Visit www.proxyvote.com | | | | | | | By Telephone Call 1-800-454-8683 | | ||||||||||
| | | | By Tablet or Smartphone Scan this QR code to vote with your mobile device | | |||||||||||||||||
| Whether or not you plan to attend the Annual Meeting, please carefully read the proxy statement and other proxy materials and complete a proxy for your shares as soon as possible. You may authorize your proxy via the Internet or by telephone by following the instructions on the website indicated in the Notice of Internet Availability of Proxy Materials that you received in the mail. You also may request a paper or an e-mail copy of our proxy materials and a paper proxy card at any time. If you attend the Annual Meeting, you may vote during the Annual Meeting if you wish, even if you previously have signed and returned your proxy card. You may be asked to present valid picture identification, such as a driver’s license or passport, before being admitted to the Annual Meeting. To be admitted to the Annual Meeting, you will be required to present a recent brokerage statement or other evidence of your ownership of our stock as of the record date of the Annual Meeting. Please note that if your shares are held of record by a bank, broker or other nominee, please follow the instructions you receive from your bank, broker or other nominee to have your shares voted. | | ||||||||||||||||||||
| Andrew S. Levine Secretary New York, New York April 19, 2024 | | | | Important Notice Regarding the Availability of Proxy Materials for the Annual Stockholder Meeting to be Held on June 3, 2024. This proxy statement and our 2023 Annual Report to Stockholders are available at http://www.proxyvote.com | | |
| 10 | | | | |
| LETTER TO STOCKHOLDERS | | | | | | | | |||
| 2024 PROXY STATEMENT HIGHLIGHTS | | | | | 3 | | | |||
| NOTICE OF ANNUAL MEETING OF STOCKHOLDERS | | | | | 9 | | | |||
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | | | | | ||||
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| Information Regarding the Director Nominees | | | | | 12 | | | |||
| Board Structure and Independence | | | | | 23 | | | |||
| Board Committees | | | | | 25 | | | |||
| Corporate Governance | | | | | 29 | | | |||
| Director Compensation | | | | | 38 | | | |||
| EXECUTIVE OFFICERS | | | | | 40 | | | |||
| EXECUTIVE COMPENSATION | | | | | 41 | | | |||
| | | | | | | 41 | | | ||
| Compensation Discussion and Analysis | | | | | 42 | | | |||
| Compensation Committee Report | | | | | 66 | | | |||
| Executive Compensation Tables | | | | | 67 | | |
At the annual meeting, three directors will be elected to serve until the 2019annual meeting and until their successors are duly elected and qualify. The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated Edwin Thomas Burton, III, Craig M. Hatkoff, and Andrew W. Mathias for election to serve as its Class I directors. Messrs. Burton, Hatkoff, and Mathias currently are serving as Class I directors. Each of Messrs. Burton, Hatkoff, and Mathias has consented to being named in this proxy statement and to serve as a director if elected. However, if any of Messrs. Burton, Hatkoff, or Mathias is unable to accept election, proxies voted in favor of such nominee will be voted for the election of such other person as the Board nominates.
Majority Voting Standard
A majority of all the votes cast with respect to a nominee’s election is required for such nominee to be elected to serve on the Board. This means that the number of votes cast “for” a nominee must exceed the number of votes cast “against” such nominee, with abstentions and broker non-votes not counted as a vote cast either “for” or “against” a nominee. For more information on the operation of our majority voting standard in director elections, see the section entitled “Our Board of Directors and Corporate Governance—Corporate Governance—Majority Voting Standard and Director Resignation Policy.”
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| PROPOSAL 1 | | | | | | ||
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| ELECTION OF DIRECTORS | | ||||||
| The Board, upon the recommendation of the Nominating and Corporate Governance Committee, has nominated seven directors for election to serve until the 2025 annual meeting of stockholders and until their successors are duly elected and qualify. | | ||||||
| • John H. Alschuler • Carol N. Brown • Lauren B. Dillard | | | • Stephen L. Green • Craig M. Hatkoff | | | • Marc Holliday • Andrew W. Mathias | |
| Each of the nominees is currently serving as a director, and has consented to being named in this proxy statement and to serve as a director if elected. However, if any of the nominees is unable to accept election, proxies voted in favor of such nominee will be voted for the election of such other person as the Board nominates or the Board may reduce the size of the Board. Majority Voting Standard A majority of all the votes cast with respect to a nominee’s election is required for such nominee to be elected to serve on the Board. This means that the number of votes cast “for” a nominee must exceed the number of votes cast “against” such nominee, with abstentions and broker non-votes not counted as a vote cast either “for” or “against” a nominee. For more information on the operation of our majority voting standard in director elections, see the section entitled “Our Board of Directors and Corporate Governance—Corporate Governance—Majority Voting Standard and Director Resignation Policy.” | |
| | The Board unanimously recommends a vote “FOR” the election of Messrs. | | | | |
Information Regarding the Nominees and the Continuing Directors
| 12 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Name | Age | Director Since | ||
Class I Nominees (terms will expire in2019) | ||||
Edwin Thomas Burton, III* | 73 | 1997 | ||
Craig M. Hatkoff* | 62 | 2011 | ||
Andrew W. Mathias | 42 | 2014 | ||
Class II Continuing Directors (terms will expire in2017) | ||||
Marc Holliday | 49 | 2001 | ||
John S. Levy* | 80 | 1997 | ||
Betsy Atkins* | 62 | 2015 | ||
Class III Continuing Directors (terms will expire in2018) | ||||
John H. Alschuler* | 68 | 1997 | ||
Stephen L. Green | 78 | 1997 |
* Independent Director
2016 Proxy Statement 7
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Class I Nominees—Terms Will Expire in 2019
| | | 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 | |
C = Chair | | AC = Audit Committee | | | NCGC = Nominating and Corporate Governance Committee | | ||
M = Member | | CC = Compensation Committee | | | EC = Executive Committee | |
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 13 | |
| | | Skills, Experiences and | | | | | | | | Alschuler | | | | Brown | | | | Dillard | | | | Green | | | | Hatkoff | | | | Holliday | | | | Mathias | |
| | Executive Leadership | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| Finance/Capital Markets | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
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8 SL Green Realty Corp.
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Risk Management | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
| Public Company | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
| | REIT/Real Estate Industry | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
| Experience Over Several Business Cycles | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||
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| Talent Management | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||
| | Academia | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| | Accounting | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||
| | Government/Regulatory Experience | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||
| | Technology/Cybersecurity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
| | Diversity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 14 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | JOHN H. ALSCHULER Lead Independent Director Director Since: 1997 Age: 76 SL Green Board Service: • Nominating and Corporate Governance Committee • Executive | | |
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| | | 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 | | | | | | | |
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 15 | |
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| | CAROL N. BROWN Independent Director Director Since: 2022 Age: 54 SL Green Board Service: • Compensation Committee • Nominating and | | |
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| | | Risk Management | | | | | REIT/Real Estate Industry | | ||
| | | Academia | | | | | Government/Regulatory Experience | | ||
| | | Technology/Cybersecurity | | | | | Diversity | |
| 16 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | LAUREN B. DILLARD Independent Director Director Since: 2016 Age: 48 SL Green Board Service: • Audit Committee • Compensation Committee, Chair | | |
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| | | 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 | |
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 17 | |
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| | STEPHEN L. GREEN Director Director Since: 1997 Age: 86 SL Green Board Service: • Executive Committee | | |
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| | | Executive Leadership | | | | | Finance/Capital Markets | | ||
| | | Risk Management | | | | | REIT/Real Estate Industry | | ||
| | | Experience Over Several Business Cycles | | | | | Talent Management | | ||
| | | Government/Regulatory Experience | | | | | | | |
| 18 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | CRAIG M. HATKOFF Independent Director Director Since: 2011 Age: 70 SL Green Board Service: • Audit Committee • Nominating and Corporate Governance Committee, Chair | | |
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| | | 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 | |
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 19 | |
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| | MARC HOLLIDAY Chairman of the Board, Director Since: 2001 Age: 57 SL Green Board • Executive | | |
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| | | Executive Leadership | | | | | Finance/Capital Markets | | ||
| | | Risk Management | | | | | REIT/Real Estate Industry | | ||
| Experience Over Several Business Cycles | | | | | Talent Management | | ||||
| Government/Regulatory Experience | | | | | | | |
| 20 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | ANDREW W. MATHIAS Director Director Since: 2014 Age: 50 SL Green Board Service: • Executive | | |
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| | | Executive Leadership | | | | | Finance/Capital Markets | | ||
| | | Risk Management | | | | | REIT/Real Estate |
2016Proxy Statement 9
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| Experience Over Several Business Cycles | | | | | Talent Management | | ||||
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Government/Regulatory Experience | | ||||||||||
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10SL Green Realty Corp.
OUR BOARDTABLE OF DIRECTORS AND CORPORATE GOVERNANCE
Director Succession Planning
CONTENTS
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 21 | |
member during 2024.
| | | | Diversity Our Board nominees have a diversity of knowledge, skills, experience and perspectives, as well as diversity of age and gender | | | | | | | Experience Our Board nominees have broad experience serving on public boards in industries relevant to the Company | | | | | | | Leadership Our Board nominees have strong corporate leadership backgrounds such as being CEO, CFO or holding other Executive positions | | |||
| | | | 50% of our independent Board nominees are diverse, including gender and racial/ethnic diversity | | | | | | | 43% of our Board nominees currently serve or have served on the Boards of other publicly traded companies | | | | | | | 86% of our Board nominees currently serve or have served as CEO or in senior leadership positions | |
| | | Identify Potential Candidates | | | Our Nominating and Corporate Governance Committee solicits and considers suggestions from our directors and management regarding possible nominees. Our Nominating and Corporate Governance Committee also may procure the services of outside sources or third parties to assist in the identification of director candidates. Candidates may also be identified by stockholders. | | |
| | | In-Depth Committee Review | | | The Nominating and Corporate Governance Committee: • Considers experience, qualifications, and diversity, including with respect to gender, race, ethnicity, nationality, country of origin or cultural background and perspectives • Meets with candidates and conducts interviews – In considering a potential nominee, each member of the Nominating and Corporate Governance Committee has the opportunity to interview potential nominees in person or by telephone and to submit questions to such potential candidate. • Review independence and potential conflicts | | |
| | | Recommend Candidates to Full Board | | | The Nominating and Corporate Governance Committee presents potential candidates to full Board for open discussion. | | |
| | | Review by Full Board | | | The full Board is responsible for approving potential candidates. | |
| 22 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Each director candidate must have (1) have:
In making recommendations to the Board, our Nominating and Corporate Governance Committee considers such factors as it deems appropriate. These factors may include judgment, skill, diversity (including diversity of knowledge, skills, professional experience, education, expertise and representation in industries relevant to the Company), ability to bring new perspectives and add to Board discussion and consideration, experience with businesses and other organizations comparable to the Company (including experience managing public companies, marketing experience or experience determining compensation of officers of public companies), the interplay of the candidate’s experience with the experience of other Board members, the candidate’s industry knowledge and experience, the ability of a nominee to devote sufficient time to the affairs of the Company, any actual or potential conflicts of interest and whether the candidate meets the NYSE independence criteria, the extent to which the candidate generally would be a desirable addition to the Board and any committees of the Board, qualifications to serve on appropriate Board committees (including financial acumen), technological literacy, strategic insight, familiarity with desired markets or regions, ability to make independent and analytical judgments, ability to introduce the Company to business or other opportunities, reputation in the corporate governance community, personal rapport with senior officers of the Company, risk management skills and effective communication skills. Such matters are considered in light of the skills, qualifications and diversity of the other members of the Board.
Prior to a vote as to whether a potential nominee is recommended
Our Nominating and Corporate Governance Committee may solicit and consider suggestions of our directors or management regarding possible nominees. Our Nominating and Corporate Governance Committee also may procure the services of outside sources or third parties to assist in the identification of director candidates.
Director Candidates
2016 Proxy Statement 11
Board Leadership Structure;Interim President, John Alschuler, who serves as our Lead Independent Director,
As noted above, and the independent directors who serve as Chairs for the Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee of the Board. With 20 years of experience leading the Company, Mr. Holliday is uniquely qualified to serve as the Chairman of the Board, currently is comprised of five independent and three employee directors.the Board believes that Mr. Green has servedHolliday’s combined role as Chairman of the Board since1997 and serves as an executive officer. Chief Executive Officer, together with the participation of other members of management and independent directors in its leadership structure, helps promote unified leadership and direction for the Company and the Board while also ensuring appropriate independent oversight of management by the Board.
We recognizehas a number of responsibilities that different board leadership structures may be appropriate for companies in different situations,help facilitate communication among our independent directors and that no one structure is suitable for all companies. Our current Board leadership structure is optimal for us because it demonstrates tobetween our employeesindependent directors and other stakeholders that the Company is under strong leadership, coordinated closely between a separateour Chief Executive Officer and Chairman, and ensure appropriate independent oversight of management by the Board.
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| | JOHN H. ALSCHULER Lead Independent Director since 2010 | | |
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To facilitate the role of the independent directors, the Board determined that it is appropriate for the independent directors to appoint one independent director to serve as Lead Independent Director. Director
Throughout the
| 24 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Evaluation Process
| | | | | | | | |||
| Initiate Process | | | | Conduct Evaluation | | | | Implement Conclusions | |
| NCGC establishes Board and committee self-evaluation process, including incorporation of process improvements from previous review cycles | | | | Directors meet to formally discuss the functioning of the Board and any committees on which they serve to identify areas for improvement. Independent directors meet separately with outside counsel | | | | The Board and each committee implement proposed governance improvements with assistance of management and third party advisors, as needed | |
12 SL Green Realty Corp.
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Executive Sessions of Non-Management Directors
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 25 | |
served during fiscal year 2023. In addition to participating in formal meetings, our Board members regularly communicate with each other, members of management and advisors and take action by written consent.
5, 2023.
Audit Committee
Our Audit Committee consists The information found on our website is not incorporated into, and does not form a part of, Betsy Atkins, Edwin Thomas Burton, III (Chairman), Craig M. Hatkoff and John S. Levy, each of whom is “independent” withinthis proxy statement or any other report or document we file with, or furnish to, the meaning of the rules of the NYSE and the SEC and each of whom meets the financial literacy standard required by the rules of the NYSE. SEC.
| 26 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | AUDIT COMMITTEE Members Edwin T. Burton, III (Chair) Betsy S. Atkins Lauren B. Dillard Craig M. Hatkoff Meetings in 2023: 12 | | |
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2016 Proxy Statement 13
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
on Form 10-K, reviewing our quarterly financial statements prior to the filing of each Quarterly Report on Form 10-Q and annually auditing the effectiveness of our internal control over financial reporting and other procedures. Our Audit Committee held 12 meetings during fiscal year 2015. Additional information regarding the functions performed by our Audit Committee is set forth in the “Audit Committee Report” included in this annual proxy statement.
Audit Committee Financial Expert
The Board determined that Edwin T. Burton, III qualifies as an “audit committee financial expert,” as defined in Item 401(h) of SEC Regulation S-K.
Compensation Committee
Our Compensation Committee consists of John H. Alschuler (Chairman), Edwin Thomas Burton, III and John S. Levy, each of whom is “independent” within the meaning of the rules of the NYSE.
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 27 | |
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| | COMPENSATION COMMITTEE Members Lauren B. Dillard (Chair) Carol N. Brown Edwin T. Burton III Meetings in 2023: 2 In addition to participating in formal meetings, our Compensation Committee members regularly communicate with each other, members of management and advisors and take action by written consent. | | |
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Nominating and Corporate Governance Committee
Our Nominating and Corporate Governance Committee consists of John H. Alschuler, Edwin Thomas Burton, III, Craig M. Hatkoff and John S. Levy (Chairman), each of whom is “independent” within the meaning of the rules of the NYSE.
| 28 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | NOMINATING AND CORPORATE GOVERNANCE COMMITTEE Members Craig M. Hatkoff (Chair) John H. Alschuler Betsy S. Atkins Carol N. Brown Meetings in 2023: 2 In addition to participating in formal meetings, our Nominating and Corporate Governance Committee members regularly communicate with each other, members of management and advisors and take action by written consent. | | |
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Executive Committee
is independent within the meaning of the rules of the NYSE.
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| | EXECUTIVE COMMITTEE Members Marc Holiday (Chair) John H. Alschuler Stephen L. Green Andrew W. Mathias Meetings in 2023: 0 Our Executive Committee was not required to take any actions by written consent during fiscal year 2023, as all matters within its authority were approved by the Board. | | |
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| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 29 | |
| Board Independence and Composition • Majority independent Board and 100% independent Nominating and Corporate Governance, Audit and Compensation Committees • Lead Independent Director role with robust responsibilities | | | | Board and Board Committee Practices • Board and committee self-evaluations • Risk oversight by full Board and Audit Committee • ESG oversight • Robust stockholder engagement | | | | Stockholder Rights • Annual election of all directors • Majority voting standard for director elections • Stockholder ability to amend bylaws by majority vote • Proxy access bylaw provision | |
14 SL Green Realty Corp.
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Stockholder Outreach
the Board; and
| 30 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | Board The Board is responsible for overseeing the Company’s risk management process. Both directly and through its committees, the Board focuses on the Company’s general risk management strategy and the most significant risks facing the Company and ensures that appropriate risk mitigation strategies are implemented by management. The Board is routinely apprised of particular risk management matters in connection with its general oversight and approval of corporate matters. In particular, the Board focuses on overseeing risks relating to the financial health of the Company, including the structure, composition and amount of our debt, broad market and portfolio conditions, status of development projects, ESG issues, succession planning and other material risks facing the Company. | | |
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| | Audit Committee • Oversees the Company’s risk management process • Reviews with management (a) Company policies with respect to risk assessment and management of risks that may be material to the Company, (b) disclosure controls and internal controls over financial reporting and (c) the Company’s compliance with legal and regulatory requirements • Reviews major legislative and regulatory developments that could have a material impact on the Company’s contingent liabilities and risks | | | | Compensation Committee • Considers potential risks to the Company in its determinations of the overall structure of our executive compensation program, our ability to attract, retain and motivate our management team, the specific goals it establishes for our executives and the influence of incentive compensation on risk-taking | | | | Nominating and Corporate Governance Committee • Considers potential risks to the Company related to the composition of the Board, including succession planning and diversity, ESG matters, compliance with corporate governance guidelines and adoption of new policies and governance guidelines | | |
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| | Management The Company’s management is responsible for day-to-day risk management, including the primary monitoring and testing function for company-wide policies and procedures, and day-to-day oversight of the risk management strategy for the ongoing business of the Company. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels. | | |
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| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 31 | |
| OVERSIGHT OF CYBERSECURITY Included in our Board’s oversight and approach to risk management is a focus on cybersecurity. Our cybersecurity program, which is applied across all levels of the Company, is designed to protect our information assets and operations from external and internal cyber threats by seeking to mitigate and manage risks while helping to ensure business resiliency. Cybersecurity Oversight The Board oversees our risk management process directly and through its committees. Pursuant to the Audit Committee charter, the Audit Committee provides compliance oversight to our risk assessment and risk management policies and the steps management has taken to monitor and mitigate such exposures and risks. Our Senior Director, Information Security & Network Systems, in coordination with the Senior Vice President, Information Technology, is responsible for leading the assessment and management of cybersecurity risks, and regularly reviewing and assessing cybersecurity initiatives. They are informed about and monitor the prevention, detection, mitigation, and remediation of cybersecurity incidents. The Senior Vice President, Information Technology reports to the Board, the Audit Committee and management on cybersecurity risk assessment, policies, incident prevention, detection, mitigation, and remediation of cybersecurity incidents on an as needed basis. Risk and Vulnerability Management We take a risk-based approach to cybersecurity and have implemented policies that are designed to address cybersecurity threats and incidents, including those related to third-party service providers. We assess risks from cybersecurity threats, monitor our information systems for potential vulnerabilities and test those systems pursuant to our cybersecurity standards, processes and practices, as part of our overall risk management system. External Assurance We leverage external resources and advisors as needed to reinforce our cybersecurity capacity. External consultants perform testing exercises to further assess our cybersecurity program on an annual basis, or more frequently if circumstances warrant such testing. Risk Mitigation and Strategy With growing risks associated with cybersecurity, we mitigate our exposure by offsetting the potential costs involved with recovery after a cyber-related security breach or similar event by purchasing cyber liability insurance coverage. Our cybersecurity strategy is guided by prioritized risk, the National Institute for Standards and Technology (NIST) Cybersecurity Framework, and emerging business needs. We maintain a cybersecurity incident response plan, as well as a monitoring program, to support senior leadership and the Board. Security Assessments We periodically employ internal software tools as well as external agencies to test the efficacy of our security protocols. Any weaknesses found are addressed through corrective action plans and systematic changes. Cybersecurity Awareness To ensure our employees are equipped with strategies to combat cybersecurity threats, our employees are provided cybersecurity awareness training, which includes topics on our policies and procedures for reporting potential incidents. All employees also receive security awareness tips to help identify phishing, deceptive emails, and corrupt links. | |
| 32 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| Who We Engage | | | | Offered Engagement with Approximately | | | | How We Engage | |
| Over the past several years, the chairs of the Compensation and Nominating and Governance Committees and members of our senior management team have engaged with many of our largest institutional investors. | | | | | | | We held in-person and virtual meetings, conducted calls and otherwise engaged with investors on topics including our business strategy and executive compensation as well as governance and ESG matters. | |
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| | Offered Engagement with approximately | | | | Had Direct one-on- one discussions with approximately | | | | Directors participated in calls with stockholders representing approximately | | |
| | 75% of Outstanding Shares | | | | 69% of Outstanding Shares | | | | 38% of Outstanding Shares | | |
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| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 33 | |
| Our Track Record of Responsiveness Our Board has always valued stockholder feedback and has embarked on a robust stockholder outreach program for many years. That feedback has served as a key input to Board composition, corporate governance, and executive compensation, as well as environmental and social discussions and decisions at the Board and committee levels. The Board is proud of our track record of responsiveness to stockholder feedback as outlined below, and as further discussed under Executive Compensation, below. | |
| | | | Board Composition & Corporate Governance | | | Environmental & Social | |
| 2018 | | | ✓ Amended bylaws to permit stockholders to amend bylaws by a majority vote | | | ✓ Committed to reduce GHG emissions intensity 30% by 2025 ✓ Achieved CDP score of “B” as first time responder | |
| 2019 | | | ✓ Transition of Stephen L. Green from Chairman to “Chairman Emeritus” | | | ✓ Committed to >$2M in annual donations to NYC charities ✓ #1 scoring REIT for ESG Disclosures on Bloomberg World Index ✓ Achieved GRESB Green Star designation as a first-time responder and an “A” rating on GRESB’s Public Disclosure Report | |
| 2020 | | | ✓ Completed declassification of the Board with all directors elected for one-year terms | | | ✓ Launched not-for-profit Food1st to serve first responders and food-insecure New Yorkers, while revitalizing NYC’s restaurants ✓ Released first formal SASB disclosures | |
| 2021 | | | ✓ Committed to enhancing Board diversity by 2022 annual meeting | | | ✓ Published first formal TCFD report ✓ Donated $6M to more than 70 not-for-profit organizations | |
| 2022 | | | ✓ Appointed Carol Brown, enhancing Board diversity | | | ✓ Expanded Scope 3 disclosures and committed to emissions reduction through SBTi ✓ Increased racial diversity of all newly hired employees in 2022 to 76% | |
| 2023/2024 | | | ✓ Continued Board succession plan: retirement of John Levy, Ed Burton and Betsy Atkins ✓ Termination of Chairman Emeritus’ retainer ✓ Anticipate appointing a new Board member in 2024 | | | ✓ Validated Scope 1 and 2 emissions reduction targets in line with 1.5°C pathway through SBTi ✓ Published updated TCFD Report ✓ Recognized by Newsweek as one of “America’s Most Responsible Companies 2023” ✓ Conducted “ESG Materiality Assessments” to identify highly valued environmental, social, and governance topics important to our business and key stakeholders | |
| 34 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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meeting.
As a result of our stockholder engagement efforts and our commitment to corporate governance, in March 2016 we
As a result of our stockholder engagement efforts and our commitment to corporate governance, in March 2016 the Board implemented
2016 Proxy Statement 15
OUR BOARDTABLE OF DIRECTORS AND CORPORATE GOVERNANCE
Sustainability
The Board shares our commitmentCONTENTS
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 35 | |
Our commitment toward efficiency is evidenced by portfolio-wide investments. By implementing cutting edge technologies and modernizing obsolete building systems, we continue to optimize building performance, reduce maintenance costs and provide tenants with a Class A experience. We have installed more than 35,000 LED bulbs, monitor energy consumption through a real-time energy platform and track our portfolio’s sustainability performance through a web based environmental management system. Currently, we are exploring the deployment of cogeneration, photovoltaic “solar” panels, fuel cells and steam reduction technologies to provide healthier and more reliable forms of energy throughout our portfolio.
Key to our program is active tenant engagement. We partner with tenant sustainability teams to elevate the synergies and capabilitiesleadership of our companies for the benefit of the community. This collaboration takes the form of LEED-CI certifications, Earth Day events, annual community service days, quarterly tenant educational webinars on sustainability topics, Urban Green Council award nominations and participation in the NYC Mayor’s Zero Waste Challenge.
Our industry leadership has been widely recognized. During 2015 and 2016, we were recognized by the United States Environmental Protection Agency as an ENERGY STAR Partner of the Year for our efforts to strategically manage and improve energy efficiency across our Manhattan and suburban portfolios. In addition to releasing a compliant GRI report for the past 3 consecutive years, we have been recognized by Newsweek as one of the greenest companies in the United States. Additionally, we have been included in the MSCI Sustainability Index since 2015. Our sustainability strategy, achievements and reports are availableexecutive management team. We depend on our website at http://www.slgreen.com/sustainability.
Risk Oversight
The Board is responsiblebest-in-class team to fully integrate and apply the organization’s ESG principles into day-to-day operations.
The Board delegated to the Audit Committee oversight of the Company’s risk management process. Among its duties, the Audit Committee reviews with management (a) the Company policies with respect to risk assessment and management of risks that may be material to the Company, (b) the Company’s system of disclosure controls and system of internal controls over financial reporting and (c) the Company’s compliance with legal and regulatory requirements. The Audit Committee also is responsible for reviewing major legislative and regulatory developments that could have a material impact on the Company’s contingent liabilities and risks.All Our other Board committees also consider and address risk as they perform their respective committee responsibilities. All committees report to the full Board as appropriate, including when a matter rises to the level of a material or enterprise level risk.
In addition, our Compensation Committee considers the risks to the Company’s stockholders and to the achievement of our goals that may be inherent in the Company’s executive compensation program.
The Company’s management is responsible for day-to-day risk management, including the primary monitoring and testing function for company-wide policies and procedures, and management of the day-to-day oversight of the risk management strategy for the ongoing business of the Company. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, and compliance and reporting levels.
We believe the division of risk management responsibilities described above is an effective approach for addressing the risks facing the Company and that the Board leadership structure supports this approach.
16 SL Green Realty Corp.
| Employees | | | | Tenants | | | | Community | | | | Stockholders | |
| We feel that an equitable and inclusive workplace is positively linked to performance. We are committed to fostering a corporate culture that enables our employees to meet their full potential. | | | | Our long-standing relationships and continued collaboration with our tenants are essential to long-term improvement of our portfolio’s ESG performance, while providing our tenants with unique offerings to track and foster sustainability. | | | | SL Green’s success is linked to a thriving New York City. We support a variety of causes that address the physical, mental, and emotional needs of our community. We also create thousands of jobs and positive community impact. | | | | Our ongoing ESG efforts help attract and retain diverse, high-performing talent, maximize our portfolio and give back to our NYC community, elements which are essential to delivering long-term stockholder value. | |
| | | ESG Oversight • Reflecting its importance to our long-term strategic plan, the Board has designated the oversight of ESG matters, including related strategy and risk, to the Nominating and Corporate Governance Committee. • At the management level, ESG and DEI initiatives are overseen by Edward V. Piccinich, SL Green’s Chief Operating Officer. • Annual ESG reporting is conducted in accordance with GRI, CDP, GRESB, SASB, and TCFD frameworks. • Environmental performance data is assured by a third party. • Physical environmental risk factors and transition risks related to environmental legislation are mitigated by energy management, long-term capital investments in energy efficiency, and tenant programs focused on sustainability. More information can be found in the 2023 TCFD Report. | | |
| | | Climate Strategy and Goals Our climate strategy ensures that our goals are outcome-driven and transparent. We deploy tactics that reduce our climate impact. 1. Emissions Avoidance & Capital Improvements 2. Operationalizing Energy Efficiency 3. Workforce Training & Development 4. Energy Demand Management & Curtailment 5. Embodied Carbon Reduction 6. Renewable Energy Credits & Carbon Offsets | |
| | SCOPE 1, 2, AND 3—CAPITAL GOODS TARGETS: Validated by SBTi | | |
| | 2023: SLG emissions reduction targets were validated by SBTi. SLG is committed to reduce absolute Scope 1 and Scope 2 emissions 50.4% and Scope 3 (Capital Goods) emissions 30% by 2031 from a 2019 base year. | | |
| 36 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | Human Capital Management • Certified as a Great Place to Work with 92% of SL Green employees indicating they are proud to work for SL Green in a 2023 employee engagement survey • 40% of employees have worked at SL Green for >7 years, and 62% of open corporate management positions were filled by internal promotions • Market-leading benefits program spanning healthcare, 401(k) match, employee stock purchase plan, disability and advanced fertility coverage, wellness and life insurance • Investments in human capital development through training programs, tuition reimbursement and ongoing education • Zero tolerance, anti-discrimination and anti-harassment policies and training • Racial minorities represent 59% and women represent 41% of all SL Green employees in 2023 • Implemented a diversity focused recruitment platform in 2023; 69% of all 2023 new hires identify as racially diverse | | |
| | | Corporate Philanthropy • Over $23M in financial support contributed to over 500 charitable organizations in New York City and beyond over the past 11 years • Co-founded FOOD1st to address NYC food insecurity; delivered over 1,000,000 meals since April 2020 • Under the Governor’s Committee on Scholastic Achievement, a non-for-profit that connects high school students from underperforming New York communities with corporate mentors, SL Green employees volunteer as mentors, intended to provide local high school students with the knowledge of what is required to succeed in the “real world.” • Ongoing donation of one percent of gross ticket sales at SUMMIT, One Vanderbilt’s immersive observatory experience, to New York focused charities through the SUMMIT Foundation | |
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 37 | |
Although there is no one-size-fits all approach to corporate governance, we believe that our Governance Principles are aligned with the expectations of our stockholders, including the Investor Stewardship Group (ISG) and the ISG Corporate Governance Principles.
Our
Directors
| 38 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Name | Fees Earned or Paid in Cash(1) ($) | Stock Awards(2) ($) | Option Awards(3) ($) | Total ($) | |||||||
Edwin T. Burton, III | $ | 89,500 | $ | 300,000 | — | $ | 389,500 | ||||
John H. Alschuler | $ | 193,500 | $ | 300,000 | — | $ | 493,500 | ||||
John S. Levy | $ | 80,500 | $ | 300,000 | — | $ | 380,500 | ||||
Craig M. Hatkoff | $ | 66,000 | $ | 300,000 | — | $ | 366,000 | ||||
Betsy Atkins | $ | 52,000 | $ | 225,000 | — | $ | 277,000 |
2016 Proxy Statement 17
Table2023, the Compensation Committee again conducted a full review of Contents
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
our director compensation in consultation with FTI Consulting. No changes were implemented as a result of that review.
Annual cash retainers | |||
Cash retainer | $ | 50,000 | |
Additional cash retainer if serving as the Lead Independent Director | $ | 85,000 | |
Additional cash retainer if serving as a chair of the Audit Committee | $ | 10,000 | |
Additional cash retainer if serving as a chair of the Compensation Committee | $ | 7,500 | |
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. | $ | 300,000 |
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 | | |
For
| OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE | | | 39 | |
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 | | |
18 SL Green Realty Corp.
OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
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| | MATTHEW J. DILIBERTO Chief Financial Officer Executive Officer Since: 2015 Age: 49 | | |
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| | ANDREW S. LEVINE General Counsel Executive Officer Since: 2007 Age: 65 | | |
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| PROPOSAL 2 | | | | | | ||
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| ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS | |
| In accordance with the requirements of Section 14A(a)(1) of the Securities Exchange Act of 1934, as amended, and related SEC rules, we are asking our stockholders to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers, as disclosed in this proxy statement. This is commonly known as, and is referred to herein as, a “say-on-pay” proposal or resolution. | |
| At our 2023 annual stockholder meeting, our stockholders voted, on a non-binding, advisory basis, by an affirmative vote of a majority of all votes cast, that the Company should continue to hold future non-binding advisory votes on executive compensation on an annual basis. On June 5, 2023, the Board determined that it will include future advisory votes on the compensation of our named executive officers in | |
| Accordingly, the Company is providing stockholders with the opportunity to approve the following non-binding, advisory resolution: | |
| “RESOLVED, that the compensation paid to the Company’s | |
| The affirmative vote of a majority of all the votes cast with respect to this proposal will be required to approve this proposal. | |
|
2016 Proxy Statement 19
Section 14A(a)(1) of the Exchange Act generally requires each public company to include in its proxy statement a separate resolution subject to a non-binding stockholder vote to approve the compensation of the company’s named executive officers, as disclosed in its proxy statement pursuant to Item 402 of Regulation S-K, not less frequently than once every three years. This is commonly known as, and is referred to herein as, a “say-on-pay” proposal or resolution.
At our 2011 annual stockholder meeting, our stockholders advised on a non-binding basis, by an affirmative vote of a majority of all votes cast, that the Company should hold non-binding advisory votes on executive compensation on an annual basis. On July 14, 2011, the Board determined that it will include future advisory votes on the compensation of our named executive officers in the Company’s annual meeting proxy materials every year until the next advisory vote on the frequency of stockholder votes on executive compensation, which will occur no later than the Company’s annual meeting of stockholders in 2017.
Accordingly, pursuant to Section 14A(a)(1) of the Exchange Act, the Company is providing stockholders with the opportunity to approve the following non-binding, advisory resolution:
“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed in this proxy statement pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”
| | The Board unanimously recommends a vote“FOR” the above resolution regarding the compensation of our named executive officers, as disclosed in the Compensation Discussion and Analysis section and the accompanying compensation tables and narrative discussion in this Proxy Statement. | | | | |
The affirmative vote of a majority of all the votes cast with respect to this proposal will be required to approve this proposal.
The results of this advisory vote are not binding on the Compensation Committee, the Company or the Board. Nevertheless, we value input from our stockholders and will consider carefully the results of this vote when making future decisions concerning executive compensation.
42 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
The Compensation Committee of the Board of Directors of SL Green Realty Corp. has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, our Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this annual proxy statement and incorporated by reference in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.
Submitted by our Compensation CommitteeJohn H. Alschuler (Chairman)Edwin Thomas Burton, IIIJohn S. Levy
| | | | | | | | | | | ||||
| Marc Holliday Chief Executive Officer, Chairman of the Board and Interim President | | | | Andrew Mathias Former President | | | | Matthew J. DiLiberto Chief Financial Officer | | | | Andrew S. Levine Chief Legal Officer and General Counsel | |
| ALIGNMENT Provide performance-based incentives that create a strong alignment of management and stockholder interests | | | | TALENT Attract and retain top talent in a market that is highly competitive for New York City commercial real estate management | | | | MOTIVATION Motivate our executives to achieve superior performance | | | | BALANCE Achieve an appropriate balance between risk and reward in our compensation programs that does not create incentives for unnecessary or excessive risk taking | | | | EFFICIENCY Foster the dedication required to succeed against our competitors, while maintaining low overall general and administrative expense | |
| EXECUTIVE COMPENSATION | | | 43 | |
| 48.41% One-Year TSR Best One-Year TSR of all Office and NYC Peers(1) | | | | +4,902 basis points One-Year Outperformance vs. US Office REIT Index | |
| $5.48 Normalized FFO Per Share(2) | | | | 5.8% Same Store Cash NOI(2) Growth | |
| 1.8M square feet Manhattan Office Leasing Volume | | | | $248M Normalized Funds Available for Distribution(2) | |
Goals for 2023 | | | | | | | How We Did | | |
Sign 1.7M Square Feet of Manhattan Office Leases | | | | | | Signed 1.8M Square Feet of Manhattan Office Leases | | | |
Manhattan Same Store Occupancy 92.4% | | | X | | | | Achieved 90.0% Occupancy at Year End | | |
Manhattan Office Mark-To-Market (2.5%)—+2.5% | | | | | | 0.8% Mark-to-Market on Signed Leases | | | |
Complete $3.5B Share Repurchase Program ($122M) | | | X | | | | No Share Repurchases in 2023 | | |
Acquisitions >$200M | | | | | | $400 Million of Strategic Acquisitions | | | |
Dispositions >$2.0B | | | X | | | | $1.1 Billion of Strategic Dispositions | | |
Debt and Preferred Equity Originations >$200M | | | X | | | | No Originations | | |
Debt and Preferred Equity Originations at 12% Return | | | X | | | | Estimated Return of 0% | | |
One Madison: Sign Leases >265,000 Square Feet | | | X | | | | Signed 53,000 Square Feet of Leases | | |
One Madison: Temporary Certificate of Occupancy by Oct. | | | | | | Achieved in September 2023 | | | |
760 Madison: Turnover Retail Space to Armani by Q4 | | | | | | Achieved in Q4 of 2023 | | | |
760 Madison: Sign 50% of Condominium Sale Contracts | | | | | | Signed 50% of Condominium Sale Contracts | | | |
245 Park: Sell Joint Venture Interest of 75% | | | — | | | | 25% of Sale Deferred | | |
15 Beekman: Turnover Dormitory Space to Pace by Q3 | | | | | | Achieved in Q3 of 2023 | | | |
Same Store Cash NOI(1) Growth >3.0% | | | | | | Achieved Growth of 5.8% | | | |
Reduce Debt by $2.5B | | | X | | | | Reduced Debt by approximately $0.9B | | |
One-Year TSR Performance >10% | | | | | | TSR Performance of 48.41% | | | |
Exceed DJ U.S. Real Estate Office Index by 250 basis points | | | | | | Outperformed Index by 4,902 Basis Points | | | |
GRESB Score of 90 | | | X | | | | GRESB Score of 88 | | |
Obtain Downstate Casino License | | | — | | | | Delayed to 2024 | | |
Summit Attendance of 1.8M Visitors | | | | | | Achieved 2.1M Visitors | | | |
Identify Second Summit Location | | | X | | | | Delayed | | |
| For 2023, the goals established as part of our performance-based compensation programs in January 2023 and at our December 2022 Institutional Investor Conference established a roadmap for the year ahead. However, as in prior years, the Company 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 reductions, 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. | |
| 44 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | 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% | |
| EXECUTIVE COMPENSATION | | | 45 | |
| | | Stockholder Outreach following Annual Meeting | | |||||||||||||||||||||||||||
| | | 2023 | | | 2022 | | | 2021 | | | 2020 | | | 2019 | | |||||||||||||||
Offered Engagement to stockholders representing approx. | | | | | 75% | | | | | | 66% | | | | | | 65% | | | | | | 65% | | | | | | 65% | | |
Had one-on-one discussions with stockholders representing approx. | | | | | 69% | | | | | | 30% | | | | | | 50% | | | | | | 41% | | | | | | 11% | | |
Directors participated in calls with stockholders representing approx. | | | | | 38% | | | | | | 29% | | | | | | 36% | | | | | | 41% | | | | | | 11% | | |
| | | | Stockholder Feedback (“What We Heard”) | | | Actions (“What We Did”) | | | Impact of Actions (“Why It’s Important”) | | | 2023 / 2024 Features | |
| Fixed Pay | | | 2018: Base salary and deferred compensation provide overlapping fixed pay elements | | | ✓ Retroactively reduced CEO base salary ✓ Eliminated deferred compensation | | | ✓ Reduces fixed pay ✓ Reduces threshold, target and maximum formulaic bonus ✓ Eliminates multiple fixed pay elements | | | ✓ CEO base salary unchanged since 2018 and is the only fixed pay element | |
| Annual Incentives | | | 2018: Annual incentive should focus on metrics within executives’ control 2018: Discretionary annual equity bonus process not clear 2022: Reduce discretion in annual incentives for NEOs | | | ✓ Replaced TSR with operating metrics ✓ In 2023, implemented 60% performance-based annual incentive for CFO | | | ✓ Strengthens link to operational metrics ✓ Reduces discretion ✓ Improves transparency | | | ✓ 100% of CEO annual incentive has formulaic outcome; 60% of CFO annual incentive has formulaic outcome ✓ Up to 100% of annual incentive may be in equity that remains subject to a three-year no-sell restriction | |
| Long-Term Incentives | | | 2018: Retesting feature allows for multiple vesting opportunities 2018: Contracts guarantee equity grants on multi-year basis 2018: Performance period should be longer than one year 2022: Ensure long-term incentives payout in line with stockholder value creation | | | ✓ Eliminated retesting from all long-term incentives ✓ Eliminated guaranteed equity grants ✓ LTIP: annual operating goals with 3-year absolute TSR modifier (50%), and 3-year relative TSR (50%) ✓ In 2023, implemented a vesting cap for relative TSR-based equity | | | ✓ Strengthens rigor of performance-based equity ✓ Eliminates contractual guarantees ✓ Strengthens pay-for-performance link ✓ Improves long-term alignment of executives’ interests ✓ Limits payout at target level when 3-year absolute TSR is negative even if relative TSR outperforms peers | | | ✓ Greater than 60% of CEO’s target equity incentives are in the form of performance-based equity incentives | |
| Other | | | 2018: Compensation program is complicated | | | ✓ Reduced pay elements from 7 to 4 | | | ✓ Improves transparency and pay for performance | | | ✓ Simple, transparent compensation structure | |
| 2018: Director compensation is high relative to peers | | | ✓ Reduced director compensation by $65,000 since 2019 | | | ✓ Improves alignment of pay relative to peers | | | ✓ Reduced director pay since 2019 | | |||
| 2023: Reduce NEO perquisites cost | | | ✓ Eliminated auto- mobile benefits for NEOs | | | ✓ Aligns perquisites with industry best practices | | | ✓ No excessive benefits for NEOs | | |||
| ✓ 92.3% of Mr. Holliday’s Total Direct Compensation for 2023 was at risk and approximately 12.5% lower than the total compensation amount set forth in the Summary Compensation Table. | |
| 46 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | | Percentage (all NEOs) | | | Pay Element | | | Purpose and Key Characteristics | |
| FIXED | | | | | Annual Base Salary | | | Competitive annual base salaries encourage the retention and attraction of talented leadership, and reflect the scope of each executive officer’s duties and responsibilities | | |
| Other than our CFO, we have not increased any of our NEO’s base salaries since 2019. In 2018, we reduced our CEO’s base salary by $100,000 to its current level | | |||||||||
| AT-RISK | | | | | Annual Bonus | | | Annual bonuses incentivize our named executive officers based on the achievement of annual financial and strategic goals Our executives may receive all or a portion of annual bonuses in the form of fully vested equity that is subject to a three-year no-sell provision Our CEO’s annual bonus is 100% formulaic and performance-based Our General Counsel’s annual bonus, while discretionary, was based on the same performance criteria that were used for our 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 | | |
| Starting in 2023, our CFO’s annual bonus is 60% formulaic and performance-based using the same criteria as our CEO, with the remaining 40% limited based on the calculation of the formulaic component Our General Counsel is expected to begin participating in a formulaic bonus program in connection with the extension of his next employment agreement | | |||||||||
| | | Performance-Based Equity Awards | | | Performance-based equity awards provide long-term incentives based on Company performance with the value derived directly linked to stockholder value creation 50% of the awards are currently based on performance against annual operating goals subject to a three-year absolute TSR performance modifier 50% of the awards are based on three-year relative TSR performance, subject to a vesting cap when three-year absolute TSR is negative even if relative TSR outperforms peers | | ||||
| Greater than 60% of CEO’s target equity incentives are in the form of performance-based equity incentives | | |||||||||
| | | Time-Based Equity Awards | | | Time-based equity awards that are granted annually based on an assessment of each executive’s performance during the most recent fiscal year and other factors provide a retention tool and ensure the alignment of the interests of our executives with those of long-term stockholders The value of equity awards is based on the market value of our common stock | |
| EXECUTIVE COMPENSATION | | | 47 | |
| The methodology used to make compensation decisions and the amounts of compensation awarded for 2023 were generally consistent with the methodology and amounts used for 2022. Due to the timing of time-based equity award grants and bonus determinations, certain amounts reported in the Summary Compensation Table for 2023 do not match the compensation actually approved by the Committee. | |
| | | 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 | | |
| 48 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| The Total Direct Compensation approved by the Committee for Mr. Holliday for 2023 was approximately 12.5% lower than the total compensation amount set forth in the Summary Compensation Table. In addition, despite our sector leading performance for 2023, our CEO’s Total Direct Compensation remained substantially consistent relative to 2022 compensation, with the modest 5% year-over-year increase driven entirely by amounts earned under our formulaic annual bonus program. | |
2022/2023 CEO Direct Compensation vs. 2023 Summary Compensation Table | | ||||||||||||||||||
Element of Compensation | | | 2022 Total Direct Compensation | | | 2023 Total Direct Compensation | | | 2023 Summary Compensation Table | | |||||||||
Base Salary | | | | $ | 1,250,000 | | | | | $ | 1,250,000 | | | | | $ | 1,250,000 | | |
Annual Bonus(1) | | | | $ | 2,102,187 | | | | | $ | 2,908,333 | | | | | $ | 2,747,106 | | |
Annual Performance-Based Award(2) | | | | $ | 7,500,000 | | | | | $ | 7,500,000 | | | | | $ | 9,920,005 | | |
Annual Time-Based Award(2) | | | | $ | 4,500,000 | | | | | $ | 4,500,000 | | | | | $ | 4,554,596 | | |
Other Compensation | | | | $ | 75,060 | | | | | $ | 36,464 | | | | | $ | 36,464 | | |
Total | | | | $ | 15,427,247 | | | | | $ | 16,194,797 | | | | | $ | 18,508,171 | | |
20 SL Green Realty Corp.
Table column reflects the actual value of Contents
EXECUTIVE COMPENSATION
Executive Summary
Why You Should Votethe cash portion of the bonus and, for Our2016Say-On-Pay Proposal
Stockholder Engagement
We have | |
|
Strong Operational Performance
Executive | | | Threshold | | | Target | | | Maximum | | |||||||||
Marc Holliday | | | | | 50% | | | | | | 200% | | | | | | 300% | | |
Matthew J. DiLiberto | | | | | 50% | | | | | | 175% | | | | | | 250% | | |
Based on our |
Superior Long-Term TRS Performance
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Variable Pay Linked to Performance
|
Low G&A Expense
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Executive Compensation Changes
| |
| EXECUTIVE COMPENSATION | | | 49 | |
| 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. | |
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 | | |
| 50 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | 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 | | |
| 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. | |
| EXECUTIVE COMPENSATION | | | 51 | |
| 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. | |
| | | | 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 | |
| | | Shorter Performance Period (performance metrics within management’s scope and visibility) | | | | | Longer Performance Period (performance metrics that align with the creation of stockholder value) | | | |
| 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. | |
| 52 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| The Committee does not look to comparisons of forward-looking performance goals versus prior year goals or results as part of this process. | |
| | | | 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. | |
| 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 | |
| EXECUTIVE COMPENSATION | | | 53 | |
Compensation Philosophy
As described below under “Our Executive Compensation Philosophy,” our executive compensation programs are designed
| Threshold, target and maximum levels were set on the basis of our rigorous and consistent pay-for-performance compensation philosophy. | |
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% | | | $92.20 | | | | |||||||
Obtain One Madison Avenue Temporary Certificate of Occupancy • A vital strategic goal for 2023, the achievement of which would accelerate the execution of our 2023 capital strategy | | | 20% | | | (3) | | | Achieved September 2023(3) | |
| 54 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Executive | | | Target 2023 Formulaic Annual Bonus ($) | | | 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 | | |
| EXECUTIVE COMPENSATION | | | 55 | |
| 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. | |
Performance Criteria / Reason Selected | | | Weighting | | | Guidance/ Goal | | | Threshold (50%) | | | Target (100%) | | | Maximum (200%) | |
Normalized Funds Available for Distribution • A key measurement of our ability to fund our dividends that is driven by the effective management of our portfolio and our business | | | 20% | | | $221.3M | | | | |||||||
Combined Net Debt Reduction • A measure that reflects the health of our balance sheet and the execution of a key strategic business objective | | | 20% | | | $2.5B | | | | |||||||
Manhattan Same Store Office Leased Occupancy • A measure of how effectively we manage properties owned by us in a similar manner in both reporting periods (year over year) | | | 20% | | | 92.40% | | | | |||||||
Manhattan Office Leasing Volume • A measure of our ability to execute our leasing platform in the highly competitive New York City real estate market | | | 20% | | | 1.7M SF | | | | |||||||
Liquidity • A measurement of our ability to meet our financial obligations and effectively operate our business | | | 20% | | | $1.57B | | | |
Performance Criteria / Reason Selected | | | Weighting | | | Guidance/ Goal | | | Threshold | | | Target | | | Maximum | |
Absolute TSR per Year(1) • Absolute TSR is a pure measurement of value delivered to stockholders who were invested in our stock for the three-year performance period | | | +/- 12.5% | | | N/A | | | |
| 56 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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% | | | |
Executive | | | Target Value of Grant | | | Number of Units Earned at Target | | | Earned Units as of December 31, 2023 | | | Realized Value as of December 31, 2023(1) | | | Realized Value as a Percentage of Target Value as of December 31, 2023 | | |||||||||||||||
Marc Holliday | | | | $ | 7,500,000 | | | | | | 126,277 | | | | | | 205,355 | | | | | $ | 9,275,885 | | | | | | 123.7% | | |
Andrew Mathias | | | | $ | 6,000,000 | | | | | | 101,023 | | | | | | 164,285 | | | | | $ | 7,420,753 | | | | | | 123.7% | | |
Matthew J. DiLiberto | | | | $ | 555,556 | | | | | | 9,356 | | | | | | 15,213 | | | | | $ | 687,171 | | | | | | 123.7% | | |
Andrew S. Levine | | | | $ | 555,556 | | | | | | 9,356 | | | | | | 15,213 | | | | | $ | 687,171 | | | | | | 123.7% | | |
| EXECUTIVE COMPENSATION | | | 57 | |
| 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. | |
| We did not include our former President in this discussion because Mr. Mathias received amounts that became payable in 2024 pursuant to the terms of his employment agreement in lieu of 2023 compensation approved by the Committee following our non-renewal of such employment agreement. See “—Potential Payments Upon Termination or Change in Control” below for a summary of the employment agreement as well as a summary of the non-renewal and advisory agreement that we entered into with Mr. Mathias to ensure a smooth transition. | |
2016Proxy Statement 21
EXECUTIVE COMPENSATION
2015 Performance and Executive Compensation
The information below summarizes our strong long-term TRS, our2015achievements and our2015CEO compensation.
Due to the timing and required reporting of certain elements of our compensation program, the 2023 Total Direct Compensation of our NEOs, which reflects the amounts actually approved by the Committee, is lower than the compensation reported in |
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Superior Long-Term TRS Performance | ||||||||
Company/Index | One-Year TRS (1/1/15 - 12/31/15) | Five Year TRS (1/1/11 - 12/31/15) | Ten Year TRS (1/1/06 - 12/31/15) | Fifteen Year TRS (1/1/01 - 12/31/15) | ||||
Morgan Stanley | ||||||||
REIT Index (MSCI) | 2.52% | 75.32% | 103.17% | 379.03% | ||||
Russell2000 | -4.41% | 55.18% | 93.14% | 186.74% | ||||
S&P500Index | 1.38% | 80.75% | 102.42% | 107.99% | ||||
SNL US REIT | ||||||||
Office Index | 0.88% | 53.87% | 66.24% | 206.90% | ||||
SL Green | ||||||||
Realty Corp. | -2.97% | 81.29% | 83.87% | 534.85% |
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| | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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Low G&A Expense | ||||||
Lowest G&A/Total Assets Among Peers | ||||||
Percentage of Total Assets(2) | ||||||
2013 | 2014 | 2015 | ||||
Average | 0.84% | 0.81% | 0.80% | |||
Median | 0.73% | 0.74% | 0.82% | |||
SLG | 0.58% | 0.54% | 0.48% | |||
SLG Rank: | 4thLowest | 4thLowest | Lowest | |||
Percentage of Total Revenues(2) | ||||||
2013 | 2014 | 2015 | ||||
Average | 7.13% | 7.03% | 6.42% | |||
Median | 7.25% | 6.60% | 6.26% | |||
SLG | 6.29% | 6.08% | 5.71% | |||
SLG Rank: | 6thLowest | 6thLowest | 4thLowest |
22 SL Green Realty Corp.
EXECUTIVE COMPENSATION
Stockholder Engagement; Executive Compensation Changes
Over the last several years, we engaged in a formal stockholder outreach program focused on our executive compensation. Throughout each year, we are in contact with our large institutional stockholders, representing the owners of more than a majority of our outstanding common stock, to discuss our executive compensation programs, our business and our overall performance. These discussions are led by the chairman of our Compensation Committee, or the Committee, and Lead Independent Director or, in certain instances, members of senior management. We provide these stockholders with additional information regarding our executive compensation programs, our performance and the manner in which we believe our executive compensation programs contributed to our superior long-term performance. We also engage in discussions with these stockholders where we are able to clarify aspects of our executive compensation programs that they may not fully understand and receive direct feedback regarding specific aspects of our executive compensation programs.
Since our2015annual meeting, we contacted institutional stockholders owning more than 65% of our outstanding common stock. Below are some common themes we discussed during our this stockholder outreach and our responses:
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Mr. Holliday’s 2023 compensation exemplifies our pay-for-performance philosophy and recognizes the key role played by our CEO in the extraordinary year we had. Our achievements under Mr. Holliday’s leadership included the successful execution of a number of our strategic goals despite a challenging operating environment, as well as the delivery of strong returns on an absolute TSR basis and also on a relative basis against both the Office REIT Index and our closest NYC peers. Nevertheless, Total Direct Compensation remained substantially consistent year-over-year due to the Committee’s measured, multi-year approach to executive compensation, which aligns with the long-term nature of our business. The Total Direct Compensation for Mr. Holliday in 2023 is approximately 12.5% lower than the Summary Compensation Table amount, with the difference driven primarily by the accounting value of annual performance-based equity awards when compared to the notional value approved by the Committee. | | |
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| 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 | |
| 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 The award relates to the following number of LTIP units: | |
| | | | | | 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 | |
| | | | | | | 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 | |
| 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. | |
| EXECUTIVE COMPENSATION | | | 59 | |
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| | MATTHEW J. DILIBERTO Chief Financial Officer Mr. DiLiberto’s 2023 compensation recognizes the Company’s strong financial and operating year as well as Mr. DiLiberto’s pivotal role in managing our balance sheet and liquidity position to succeed in a dynamic, competitive and unpredictable NYC real estate market. In a year that saw continued disruptions of lending markets and an environment of unprecedented inflation and interest rate volatility, Mr. DiLiberto was a vital part of our outstanding TSR performance, The Total Direct Compensation amount for Mr. DiLiberto in | | |
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| TDC | | | SCT | | | Element of
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| 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 | |
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 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-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 | |
| | | | | | | 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 | |
| 33% $1,400,000 | | | 38% $1,252,297 | | | Time-Based Equity Awards The Committee granted time-based awards in January 2024 based on the
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. | |
| 60 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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| | ANDREW S. LEVINE Chief Legal Officer and General Counsel Mr. Levine’s 2023 compensation reflects the value delivered by the Company’s sophisticated in-house legal team, led by our General Counsel, which supports the complex and diverse business and corporate initiatives that we undertook during 2023, and which are expected to position the Company for future success in the coming years. In particular, Mr. Levine continued to provide key insight into all aspects of the Company’s strategic decision-making throughout the year. The General Counsel position is a critical member of a senior management team that executed on the Company’s ambitious strategy for 2023 and guided the Company through a challenging operating environment to deliver extraordinary returns to stockholders. The Total Direct Compensation approved by the Committee for Mr. Levine for 2023 is substantially consistent with the Summary Compensation Table amounts, with minor differences relating to grant date valuation of equity awards compared to the amounts approved by the Committee. | | |
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| 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-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 | |
| | | | | | | 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. | |
| EXECUTIVE COMPENSATION | | | 61 | |
| 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 | |
| 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 | |
| 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 • 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 – Provides updates and relevant data throughout the – 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) | |
2016Proxy Statement 23
| 62 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
WHAT WE DO | | | | WHAT WE DON’T DO | |
Pay for performance and create alignment with | |||||
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stockholders Include robust hurdles in Pay a vast majority of | |||||
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equity Follow robust | |||||
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 |
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| | | 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 | ||||
No repricing of stock | ||||
No single trigger cash severance or accelerated vesting in connection with a change in | ||||
control Don’t allow directors or officers to hedge our | |
24 SL Green Realty Corp.
EXECUTIVE COMPENSATION
2015 Total Direct Annual Compensation
The following charts categorize the total direct annual compensation for our Chief Executive Officer and other named executives by the form of such compensation:
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The following table sets forth the amounts of base salary paid, annual cash and equity bonuses awarded, annual employment agreement equity awards granted, and annual deferred compensation contributions made to our named executive officers for2015:
Name | Base Salary | Cash Bonus(1) | Equity Bonus(2) | Employment Agreement Equity Awards(3) | Annual Deferred Compensation Contribution | 2015 Total Direct Annual Compensation(4) | ||||||||||||
Marc Holliday | $ | 1,050,000 | $ | 2,795,625 | $ | 4,204,375 | $ | 8,978,205 | $ | 600,000 | $ | 17,628,205 | ||||||
Stephen L. Green | $ | 750,000 | $ | 1,671,093 | $ | 2,228,907 | — | $ | 150,000 | $ | 4,800,000 | |||||||
Andrew Mathias | $ | 800,000 | $ | 1,782,500 | $ | 3,217,500 | $ | 6,181,683 | $ | 450,000 | $ | 12,431,683 | ||||||
Matthew DiLiberto | $ | 400,000 | $ | 1,400,000 | — | — | — | $ | 1,800,000 | |||||||||
Andrew S. Levine | $ | 500,000 | — | $ | 1,100,000 | — | — | $ | 1,600,000 |
Comparison of our Chief Executive Officer’s 2014 and 2015 Total Direct Annual Compensation
Our Chief Executive Officer’s annual bonus for 2015 was $1,000,000, or 12.5%, less than his annual bonus for 2014 primarily as a result of our disappointing short-term TRS performance balanced against our continued superior long-term TRS performance and strong operational performance during 2015. The overall increase in our Chief Executive Officer’s total direct annual compensation from 2014 to 2015 is solely attributable to (i) an increase in our stock price from January 2014 to January 2015, which resulted in the grant date fair value of the employment agreement equity awards that we made to our Chief Executive Officer (87,870 LTIP units were granted in both years) being higher in 2015 and (ii) a $50,000 contractual increase in annual deferred compensation contribution.
2016 Proxy Statement 25
EXECUTIVE COMPENSATION
The table below compares the total direct annual compensation paid to our Chief Executive Officer in 2014 against compensation paid in 2015.
Compensation Component | 2014(1) | 2015(1) | % Change | |||||
Base Salary | $ | 1,050 | $ | 1,050 | — | |||
Cash Bonus | $ | 3,150 | $ | 2,796 | -11.2% | |||
Equity Bonus | $ | 4,850 | $ | 4,204 | -13.3% | |||
Employment Agreement Equity Awards(2) | $ | 6,524 | $ | 8,978 | 37.6% | |||
Annual Deferred Compensation Contribution | $ | 550 | $ | 600 | 9.1% | |||
Total Direct Compensation | $ | 16,124 | $ | 17,628 | 9.33% |
Our Executive Compensation Philosophy
We adopted an executive compensation philosophy that rewards the achievement of annual and long-term goals of both the Company and individual executives. Our executive compensation programs are designed to achieve the following objectives:
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In order to reach these goals, the Committee, in consultation with our Chief Executive Officer and the Committee’s independent compensation consultant, adopted executive compensation practices that follow a pay-for-performance philosophy. Our primary business objective, of maximizing TRS through growth in FFO while seeking appreciation in the value of our investment properties, demands a long-term focus. Therefore, on both a current and historical basis, our executive compensation programs are based heavily on the achievement of both annual and multi-year performance measures.
Consideration of 2015 Say-on-Pay Vote
Our say-on-pay proposal was approved at our2015 annual meeting, as it has been every year since it was first introduced in2011, with approximately66.4% of the votes cast voting in favor of the proposal. The Committee viewed this favorable vote by more than a majority of our stockholders as an indication that our stockholdersare generally supportive of the structure of our executive compensation programs. Nevertheless, we continued to engage in stockholder outreach and implemented the additional changes described above based on the feedback we received.
Our Executive Compensation Programs
Our named executive officers’ compensation currently has three primary components, which are discussed in more detail below:
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Variable pay constitutes the vast majority of our executives’ compensation, which allows the Committee to reward superior performance and penalize poor performance, while the substantial long-term equity incentive portions of our compensation programs serve to align the interests of our named executive officers with our stockholders.
Annual Base Salary and Deferred Compensation
Base salaries are established at levels intended to reflect the scope of each executive’s duties and responsibilities and further take into account the competitive market compensation paid by other companies for similar positions. However, they do not serve our objective of paying for performance, and therefore are intentionally structured to be a relatively low percentage of total compensation.
26 SL Green Realty Corp.
EXECUTIVE COMPENSATION
The following sets forth the annual base salaries for our named executive officers for2014and2015, which reflect amounts agreed to in each executive’s employment agreement:
Executive | 2014 Base Salary | 2015 Base Salary | % Change | |||||
Marc Holliday | $ | 1,050,000 | $ | 1,050,000 | — | |||
Stephen Green | $ | 750,000 | $ | 750,000 | — | |||
Andrew Mathias | $ | 800,000 | $ | 800,000 | — | |||
Matthew DiLiberto | N/A | $ | 400,000 | N/A | ||||
Andrew Levine | $ | 490,000 | $ | 500,000 | 2.0% |
In addition to base salary, each of Messrs. Holliday, Green and Mathias also received a contribution of deferred notional stock units that are subject to vesting based on continued employment during a one-year period following the contribution and are only paid upon termination of employment or a change in control. The amounts of deferred compensation that each of Messrs. Holliday, Green and Mathias received for2015 was equal to the minimum amount that we had previously agreed to provide under the executive’s employment agreement and associated deferred compensation agreement that was in effect for2015. This deferred compensation is viewed similarly to annual base salary, in that fixed amounts are granted each year regardless of performance. However, because the value of this deferred compensation is tied to the value of our common stock and these executives will not receive this deferred compensation until the termination of their employment or a change in control, this deferred compensation program further establishes alignment of management and stockholder interests and helps ensure that the executives remain focused on long-term stockholder value creation. The following table sets forth the deferred compensation grants made to our executives in2015:
Executive | Deferred Compensation Amount | Notional Stock Units(1) | |||
Marc Holliday | $ | 600,000 | 4,791 | ||
Stephen Green | $ | 150,000 | 1,233 | ||
Andrew Mathias | $ | 450,000 | 3,699 |
Annual Incentive Awards
We pay annual incentive awards in the form of annual cash and equity bonuses to focus and reward our named executive officers on achieving key corporate financial and operational objectives and individual goals. Based in part on the feedback we received in connection with our outreach efforts relating to executive compensation, the Committee decided to revise the structure of our annual incentive award program for2014. For2015, we maintained the same overall structure of our annual incentive award program. Based in part on the feedback we received in connection with our continuing outreach efforts relating to executive compensation, we increased the formulaic component of our annual cash bonus program from60% to75% of the target opportunity and we reduced the number of performance criteria. For2015, the entire amount of the annual cash bonuses paid to our top three named executive officers was determined pursuant to this annual cash bonus program, which is described in more detail below.
We also maintained an annual equity bonus program for these named executive officers pursuant to which these executives were eligible to receive an annual bonus paid in the form of equity in amounts determined at theCommittee’s discretion. In determining the amounts of these equity bonuses for2015, the Committee considered our short-term and long-term performance, including the achievement of the financial and operational goals that we established and communicated to investors at our investor day conference in December2014, as well as the Committee’s view of the appropriate overall annual incentive award for each of these executives in light of the their historical compensation, skill, experience and position and competitive market factors.
Consistent with our historical practice, our other named executive officers’ annual incentive awards were determined in the Committee’s discretion in substantially the same manner as the equity bonuses for our top three named executive officers. These bonuses were then paid in cash, equity or a combination as determined by the Committee.
Annual Cash Bonus Program (Top Three Named Executive Officers)
As noted above, the annual cash bonuses paid to our top three named executive officers for2015 were determined pursuant to our annual cash bonus program. Pursuant to this program, the Committee established specific threshold, target and maximum cash bonus amounts that each of
2016 Proxy Statement 27
our top three named executive officers could earn for 2015 and established specific performance criteria that were to be used in a formulaic manner to determine 75% of each of these executives’ cash bonuses. For 2015, each of Messrs. Holliday, Green and Mathias were eligible to earn the following percentages of his base salary (with linear interpolation used to determine the percentage earned for performance that falls between threshold, target and/or maximum):
Executive | Threshold | Target | Maximum | |||
Marc Holliday | 100% | 200% | 300% | |||
Stephen Green | 100% | 175% | 250% | |||
Andrew Mathias | 100% | 175% | 250% |
Seventy-five percent of each executive’s annual cash bonus was determined in a formulaic manner based on the level of our achievement of a number of performance criteria as compared to the level established in advance by the Committee. The following set forth the specific performance criteria selected for2015, the relative weighting of each, the threshold, target and maximum performance levels established by the Committee in advance for each, and our actual 2015 results for each:
Performance criteria | 2015 Weighting Levels | Threshold | Target | Maximum | 2015 Actual Performance | |||||||||
FFO per share | 12.5% | $ | 6.13 | $ | 6.22 | $ | 6.30 | $ | 6.38 | |||||
Annual square footage of Manhattan leases signed | 12.5% | 1,500,000 | 1,650,000 | 1,800,000 | 2,255,733 | |||||||||
Mark-to-market on signed Manhattan leases | 12.5% | 6.0% | 9.0% | 12.0% | 15.3% | |||||||||
Same-store cash NOI growth | 12.5% | 2.1% | 2.6% | 3.1% | 4.6% | |||||||||
Dividend growth | 10.0% | 5.0% | 7.5% | 10% | 20.0% | |||||||||
Relative TRS for 2015(1) | 7.5% | 40th | 60th | 80th | 39th | |||||||||
Absolute TRS for 2015 | 7.5% | 5.0% | 7.0% | 9.0% | -2.97% |
The remaining 25% of each executive’s annual cash bonus was determined in the Committee’s discretion based on our overall performance and each executive’s performance for 2015. In determining this component of each executive’s annual cash bonus, the Committee primarily based its decisions on our performance as compared to our initial FFO per share guidance for 2015 and the other specific company goals and objectives for 2015 that were presented at the 2014 investor day conference, which are repeated below:
28 SL Green Realty Corp.
Based on our operational performance, as reflected in the level of our achievement of these goals and objectives, the Committee awarded each of our executives the maximum amount with respect to the discretionary component of our cash bonus program, which was then added to the formulaic component of our cash bonus program.
The following table reflects the 2015 cash bonuses awarded to Messrs. Holliday, Green and Mathias pursuant to our annual cash bonus program, presented based on the maximum percentages of each executive’s base salary that can be earned under both the formulaic and discretionary components, as well as the aggregate amounts of the total bonus opportunity earned:
Executive | Max Formulaic (%) | Actual Formulaic (%)(1) | Max Discretionary (%) | Actual Discretionary (%) | Max Cash Bonus (%) | Actual Cash Bonus (%) | Total ($) | ||||||||
Marc Holliday | 225.00% | 191.25% | 75.00% | 75.00% | 300.00% | 266.25% | $ | 2,795,625 | |||||||
Stephen Green | 187.50% | 160.31% | 62.50% | 62.50% | 250.00% | 222.81% | $ | 1,671,093 | |||||||
Andrew Mathias | 187.50% | 160.31% | 62.50% | 62.50% | 250.00% | 222.81% | $ | 1,782,500 |
Annual Equity Bonuses (Top Three Named Executive Officers)
We also maintain an equity bonus program for our top three named executive officers, which provides annual bonuses that are determined by the Committee, in its discretion, based on the short-term and long-term performance of our Company and the executive, the Committee’s view of appropriate annual incentive awards in light of the executive’s historical compensation, skill, experience and position, competitive market factors and such other factors as are determined appropriate by the Committee. In making these awards for 2015, the Committee sought to find a balance between (i) acknowledging the significant operational achievements attained during the year, as highlighted above, (ii) ensuring that annual incentive award and total compensation amounts were in line with the prevailing market and adequate to address recruitment and retention needs in the competitive New York City commercial real estate markets where we actively compete for business opportunities and executive talent with other publicly-traded REITs, private real estate operating companies, opportunity funds and sovereign wealth funds, among others, (iii) continuing to ensure our compensation programs create shoulder-to-shoulder alignment of management and stockholder interests by appropriately rewarding our named executive officers for the attainment of performance achievements that drive long-term value creation and (iv) rewarding our continued superior long-term TRS performance as balanced against our disappointing short-term TRS performance. The differences in compensation awarded to our named executive officers are generally a function of the executive’s position and authority, as well as the competitive landscape for executives in similar positions. The table below sets forth the annual equity bonus awards that were granted to each of Messrs. Holliday, Green and Mathias for 2014 and 2015, as approved by the Committee:
Executive | 2014 Equity Bonus | 2015 Equity Bonus | % Change | |||||
Marc Holliday | $ | 4,850,000 | $ | 4,204,375 | -13.3% | |||
Stephen Green | $ | 2,625,000 | $ | 2,228,907 | -15.1% | |||
Andrew Mathias | $ | 3,700,000 | $ | 3,217,500 | -13.0% |
The reduction in the amounts of the equity bonus awards for our executives in 2015as compared to 2014 primarily resulted from our disappointing TRS performance in 2015. The 2015 equity bonuses paid to each of our top three named executive officers listed above were paid in early 2016 in the form of LTIP units that vested upon grant, but remain subject to a no-sell restriction until two years after their grant date. Our named executive officers received the following number of LTIP units for these equity bonuses: Mr. Holliday—40,153; Mr. Green—21,286; and Mr. Mathias—30,728.
Bonuses to Other Executives
Consistent with our historical practice, annual bonuses for Messrs. DiLiberto and Levine were determined by the Committee in its discretion in substantially the same manner as the equity bonuses for our top three named executive officers. The table below sets forth the annual bonus awards that were granted to Mr. DiLiberto for 2015 and Mr. Levine for 2014 and 2015, as approved by the Committee:
Executive | 2014Bonus | 2015Bonus | % Change | |||||
Matthew J. DiLiberto | N/A | $ | 1,400,000 | N/A | ||||
Andrew S. Levine | $ | 1,200,000 | $ | 1,100,000 | -8.3% |
Similar to the annual equity bonus awards that were granted to our top three named executive officers, annual bonuses for Messrs. DiLiberto and Levine reflected our significant operational achievements for 2015 and our continued superior long-term TRS performance as balanced against our disappointing short-term TRS performance for 2015. The Committee decided to pay Mr. DiLiberto’s bonus in cash and Mr. Levine’s bonus in the form of LTIP units granted in January 2016 that were vested upon grant, but are subject to a no-sell restriction until two years after the date they were granted. Mr. Levine received 10,505 LTIP units for this bonus.
Long-Term Equity Incentive Awards
Long-term equity incentives have been provided to our named executive officers through the grant of stock options, restricted stock, restricted stock units and/or LTIP units pursuant to our outperformance plans and in connection with new or extended employment agreements. The majority of these awards included performance-based vesting hurdles that must be met in order for recipients to earn them. The grant of equity awards links a named executive officer’s compensation and net worth directly to the performance of our stock price as well as the achievement of other performance-based vesting hurdles in some cases, which we believe encourages our named executive officers to make decisions with an ownership mentality and provides alignment of interest with our stockholders. The Committee has made long-term equity incentive awards a central part of our executive compensation program due to these features.
Outperformance Plans
A main component of our long-term equity incentive award program is our outperformance plans. Our outperformance plans provide equity awards to our named executive officers and other employees that are subject to performance-based vesting hurdles based on TRS or stock price appreciation over a multi-year period, eligible for potential acceleration in specific circumstances. In addition to the performance-based vesting hurdles, all of these equity awards have additional time-based vesting provisions of four to five years in the aggregate with principally back-end vesting, based on continued employment, which act as a retention device and provide a strong incentive to the executives to increase stockholder value during the vesting period.
Our outperformance plans are designed to provide strong and direct alignment of our executive’s interests with long-term stockholder interests. As a result, historically, we provided a meaningful percentage of our executives’ total compensation in the form of equity awards under our outperformance plans. We anticipate continuing to utilize these types of plans as a significant component of our executive compensation program.
To guarantee that our long-term equity incentive awards reward only exceptional returns, our outperformance plans incorporate challenging performance hurdles. During prior periods where stockholders did not realize superior returns, such as during 2008 and 2009, our outperformance plans did not provide payouts. Due to the variable, at-risk nature of our outperformance plans, our executives must truly drive our overall performance and TRS to earn awards. This feature is illustrated by the table below showing our strong TRS during the performance periods of our two previous outperformance plans and the awards earned by our executives pursuant to those plans, as compared to our performance through December 31, 2015 relative to the robust performance hurdles contained in our 2014 Outperformance Plan:
2010Notional Unit Long-Term Compensation Plan | 2011Outperformance Plan | 2014Outperformance Plan | ||||
Performance Period | Dec. 2009 – Nov. 2012 | Sept. 2011 – Aug. 2014 | Sept. 2014 – Aug. 2017 | |||
Initial Stock Price | $42.37 | $73.38 | $109.36 | |||
Maximum Plan Award | $75.0 million | $85.0 million | 610,000 LTIP units | |||
Cumulative Absolute | 25% - 50% | 25% - 38% | 25% - 50% | |||
Hurdle Range | ||||||
Absolute Hurdle Achieved? | YES – 85% TRS | YES – 54% TRS | NOT YET – 6.6% TRS for the | |||
($76.42 + $1.80 | ($109.36 + $3.92 | 16 months ended 12/31/15 | ||||
dividends) | dividends) | ($112.98 + $3.62 dividends) | ||||
Cumulative Relative Hurdle Range | N/A | N/A | 50th percentile – 75th percentile | |||
Relative Hurdle Achieved? | N/A | N/A | NOT YET – 48th percentile for | |||
the 16 months ended 12/31/15 |
30 SL Green Realty Corp.
2014 Outperformance Plan
In August 2014, the Committee approved the general terms of our 2014 Outperformance Plan. Under our 2014Outperformance Plan, participants may earn awards based on our TRS on an absolute basis as well as on a relative basis compared to the constituents of the MSCI US REIT Index, or Index Companies, over a three-year performance period beginning on September 1, 2014 and continuing through August 31, 2017. Awards earned based on absolute TRS will be determined independently of awards earned based on relative TRS.
Our 2014 Outperformance Plan was designed to be complementary to the SL Green Realty Corp. 2011 Long-Term Outperformance Plan, or our 2011 Outperformance Plan, as the baseline stock price for measuring performance under our 2014 Outperformance Plan exceeds the stock price at which maximum stock price appreciation would be achieved under our 2011 Outperformance Plan.
Awards that are earned under our 2014 Outperformance Plan will also be subject to vesting based on continued employment through August 31, 2018, with 50% of the awards earned vesting on August 31, 2017 and the remaining 50% vesting on August 31, 2018. The maximum number of LTIP units that may be earned under our 2014 Outperformance Plan will be 610,000 LTIP units; however, as of the date hereof, the Committee has only granted awards for 426,671 LTIP units and will retain discretion as to whether, or when, it will award the remainder of the total LTIP units.
For each individual award, two-thirds of the LTIP units may be earned based on our absolute TRS and one-third of the LTIP units may be earned based on our relative TRS compared to Index Companies. The table below reflects the minimum and maximum thresholds for both the absolute TRS and relative TRS components:
Absolute TRS | Percentage of Absolute TRS LTIP Units Earned (two-thirds of total) | Relative TRS | Percentage of Relative TRS LTIP Units Earned (one-third of total) | ||||
Less than 25% | 0% | Below 50th percentile | 0% | ||||
25% | 37.5% | 50th percentile | 37.5% | ||||
50% or higher | 100% | 75th percentile or greater | 100% |
The number of LTIP units that are earned if performance is above the minimum thresholds, but below the maximum hurdles, will be determined based on linear interpolation between the percentages earned at the minimum and maximum thresholds.
In the event our performance reaches the maximum absolute TRS or relative TRS hurdle before the end of the three-year performance period, a pro-rata portion of the maximum award may be earned. For each component, if our performance reaches the maximum threshold during the second half of the performance period, participants will earn one-third of the maximum award. If our performance reaches the maximum threshold during the third year of the performance period for a component, participants will earn up to two-thirds of the maximum award that may be earned for that component. Except in the event of a change in control, no awards may be earned during the first half of the performance period and, with respect to the last one-third of the maximum award, no awards may be earned prior to the end of the performance period.
Awards may be earned upon a change in control as follows, but any such awards remain subject to vesting based on continued employment, as set forth above, with acceleration only occurring for a named executive officer in the event of a termination of the executive’s employment by us without cause or by the executive for good reason. In the event of a change in control during the first year of the performance period, participants will earn, for each component, the greater of (i) a prorated award based on the attainment of prorated performance hurdles or (ii) a non-prorated award based on attainment of the full, non-prorated performance hurdles, in each case, using the change in control as the end of the performance period. In the event a change in control occurs after the first year of the performance period, awards will be earned for each component based upon the attainment of prorated performance hurdles using the change in control as the end of the performance period.
2016 Proxy Statement 31
The awards made to our named executive officers under our 2014 Outperformance Plan also provide that if that executive’s employment is terminated by us without cause or by the executive officer for good reason, then the executive officer is treated under our 2014 Outperformance Plan as if he had remained employed by us for 12 months after the date of his termination. If the executive officer’s employment terminates due to death or disability, then such termination will be treated in the same manner, for that award recipient, as if a change in control occurred on the date of such termination; provided that any LTIP units earned in connection with death or disability will vest in full as of the date on which they are earned.
Distributions are not payable unless and until awards are earned. If awards are earned under our 2014 Outperformance Plan, each participant will then be entitled to the distributions that would have been paid had the number of earned LTIP units been earned at the beginning of the performance period. Those distributions will be paid in cash or additional LTIP units as determined by the Committee. Thereafter, distributions will be paid currently with respect to all earned LTIP units, whether vested or unvested.
Initial awards under our 2014 Outperformance Plan have been made pursuant to which our named executive officers have the opportunity to earn the following LTIP units:
Award Opportunity (# of LTIP Units) | ||||||
Executive | Threshold | Maximum | Hypothetical Earning Based on Annualized Results through 12/31/2015(1) | |||
Marc Holliday | 25,925 | 69,133 | 0 | |||
Stephen L. Green | 8,427 | 22,473 | 0 | |||
Andrew Mathias | 18,300 | 48,800 | 0 | |||
Matthew DiLiberto | 6,621 | 17,657 | 0 | |||
Andrew S. Levine | 4,635 | 12,360 | 0 |
Pursuant to our employment agreements with Messrs. Holliday and Mathias, we agreed to allocate at least 22.67% and 16.00%, respectively, of the total awards under our 2014 Outperformance Plan to these executives.
Employment Agreement Awards
The second main component of our long-term equity incentive award program is equity awards granted for retention purposes or in connection with new or extended employment agreements. We typically enter into employment agreements with each of our named executive officers, other than Mr. Green, that have terms of three or four years. In connection with these agreements, we typically grant one or more types of equity awards to our named executive officers that have vesting periods aligned with the terms of these agreements. Vesting of these awards has been based on continued employment and, for a majority of these awards, the achievement of performance hurdles.
In connection with our employment agreements with our named executive officers, we granted equity awards to Messrs. Mathias, DiLiberto and Levine on the effective date of each such agreement. In addition, our employment agreements with Messrs. Holliday and Mathias provided for the granting of the stock options and LTIP units noted in the table below, which, collectively for each of Mr. Holliday and Mr. Mathias, are scheduled to vest over the three-year term of the agreement. These long-term equity incentive awards were not granted at the time these agreements were entered into; instead, these agreements provided that the executives would be entitled to terminate their employment with us and receive severance payments and benefits if we did not make these grants on or before their scheduled vesting dates. These provisions were included instead of making long-term grants at the time the agreement was entered into, in part, to avoid the distortion in measuring annual compensation that otherwise might have occurred if these grants were all made in the year in which we entered into the agreements. Regardless of the ultimate grant dates, for purposes of evaluating our executive compensation, we believe these awards should be viewed collectively as long-term equity awards vesting over the three-year terms of these agreements (as opposed to three separate awards subject to short-term vesting), which is consistent with how the Committee viewed, and approved of, these awards.
The table below indicates the terms of the employments agreements with Messrs. Holliday, Mathias, DiLiberto and Levine that were in effect during 2015 and summarizes the terms and grant dates of the long-term equity incentive awards made, or to be made, to our named executive officers pursuant to these employment agreements.
32 SL Green Realty Corp.
Messrs. Holliday and Mathias amended their employment agreements in 2014 such that 100% of the future LTIP unit awards granted under these employment agreements were subject to performance-based vesting hurdles, with restructured hurdles that are more difficult to achieve than those originally established, as set forth in the table below.
MARC HOLLIDAY (JANUARY18,2013– JANUARY17,2016) | |||||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | ||||||
Stock options | 200,000 | 2013 | One-third vesting on 1/17/14, 1/17/15 and 1/17/16; 50% expires 5 years after grant;50% expires 10 years after grant | ||||||
Three- Year vesting | Performance-based and time-based LTIP units | 87,870 | 2014 | Vesting 1/17/14; 60% subject to performance-based vesting contingent upon achievement of either7% increase in FFO, 7% TRS or TRS in the top40% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2013); two-year post-vesting no-sale | |||||
Performance-based LTIP units | 87,870 | 2015 | Vesting 1/17/15 and 1/17/16, respectively; vesting contingent upon achievement of either8% increase in FFO, 8% TRS or TRS in the top35% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2013); two-year post-vesting no-sale | ||||||
Performance-based LTIP units | 87,870 | 2016 | |||||||
ANDREW MATHIAS (JANUARY1,2014– DECEMBER31,2016)(2) | |||||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | ||||||
Stock options | 130,000 | 2013 | One-third vesting on 12/31/14, 12/31/15 and 12/31/16; 50% expires 5years after grant; 50% expires 10 years after grant | ||||||
Three- Year vesting | Performance-based and time-based LTIP units | 58,666 | 2014 | Vesting 12/31/14; 60% subject to performance-based vesting contingent upon achievement of either7% increase in FFO, 7% TRS or TRS in the top40% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2014); two-year post-vesting no-sale | |||||
Performance-based LTIP units | 58,667 | 2015 | Vesting 12/31/15 and 12/31/16, respectively; vesting contingent upon achievement of either8% increase in FFO, 8% TRS or TRS in the top35% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2014); two-year post-vesting no-sale | ||||||
Performance-based LTIP units | 58,667 | 2016 | |||||||
MATTHEW DILIBERTO (JANUARY1,2015– JANUARY1,2018) | |||||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | ||||||
Time-based LTIP units | 13,000 | 2014 | 6,000 LTIP units vesting 1/1/16 and 3,500 LTIP units vesting on each of1/1/17 and 1/1/18 | ||||||
Performance-based LTIP units | 7,000 | 2014 | One-half vesting on each of 1/1/17 and 1/1/18; vesting contingent upon achievement of either8% increase in FFO, 8% TRS or TRS in the top35% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2015) | ||||||
ANDREW S. LEVINE (JANUARY1,2013– JANUARY1,2016) | |||||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | ||||||
Time-based LTIP units | 21,000 | 2013 | One-third vesting on 1/1/14, 1/1/15 and 1/1/16 | ||||||
Performance-based LTIP units | 21,000 | 2013 | One-third vesting on 1/1/14, 1/1/15 and 1/1/16; vesting contingent upon achievement of either7% increase in FFO, 7% TRS or TRS in the top40% of the MSCI US REIT Index, for the prior year (or on a cumulative basis from2013) |
2016 Proxy Statement 33
In 2016, we entered into new employment agreements with each of Messrs. Holliday and Levine following the expiration of their prior employment agreements. The structure of Mr. Holliday’s new employment agreement was similar to his prior employment agreement in that the long-term equity incentive awards to be made to Mr. Holliday were not granted at the time this agreement was entered into and, instead, these agreements provided that Mr. Holliday would be entitled to terminate his employment with us and receive severance payments and benefits if we did not make these grants on or before their scheduled vesting dates. However, unlike Mr. Holliday’s prior agreement, he is no longer entitled to receive ungranted performance-based LTIP units upon a termination for good reason or without cause, except where such termination also occurs in connection with a change-in-control. The table below indicates the terms of these employment agreements and summarizes the terms and grant dates of the long-term equity incentive awards made, or to be made, to Messrs. Holliday and Levine pursuant to these employment agreements.
MARC HOLLIDAY (JANUARY18,2016– JANUARY17,2019) | ||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | |||
Stock options | 105,000 | 2016 | Vesting one-year after grant date, which grant is to occur on or before 7/1/16; 50% expires5 years after grant; 50% expires 10 years after grant | |||
Stock options | 105,000 | 2017 | Vesting one-year after grant date, which grant is to occur one year after the 2016 grant; 50% expires 5 years after grant; 50% expires 10years after grant | |||
Performance-based LTIP units | 76,980 | 2017 | Vesting 1/17/17, 1/17/18 and 1/17/19, respectively, contingent on achievement of performance hurdle; from 50-100% vestingbased on achievement of either annual FFO growth or TRS of 5-8% per year or TRS in the top 35-50% of the MSCI US REIT Index, respectively, for the prior year (or on a cumulative basis from 2016 through such year or a subsequent quarter during the term); no vesting unless the 50% threshold performance criteria described above is met; two-year post-vesting no-sale | |||
Performance-based LTIP units | 61,584 | 2018 | ||||
Performance-based LTIP units | 61,584 | 2019 | ||||
ANDREW S. LEVINE (JANUARY 1, 2016 – JANUARY 1, 2019) | ||||||
Equity Award | # of Shares/Units | Grant Date | Description(1) | |||
Time-based LTIP units | 18,000 | 2016 | One-third vesting on 1/1/17, 1/1/18 and 1/1/19 | |||
Performance-based LTIP units | 18,000 | 2016 | One-third vesting on 1/1/17, 1/1/18 and 1/1/19 contingent on achievement of performance hurdle; from 50-100% vesting based on achievement of either annual FFO growth or TRS of 5-8% per year or TRS in the top35-50% of the MSCI US REIT Index, respectively, for the prior year (or on a cumulative basis from2016 through such year or a subsequent quarter during the term); no vesting unless the50% threshold performance criteria described above is met |
Other Compensation Policies and Information
How We Determine Executive Compensation
The Committee determines compensation for our named executive officers and is comprised of three of our independent directors, John H. Alschuler (Chairman), Edwin Thomas Burton, III and John S. Levy.
Independent Compensation Consultant/Compensation Process
The Committee retained Gressle & McGinley LLC as its independent outside compensation consulting firm and engaged Gressle & McGinley LLC to provide the Committee with relevant data concerning the marketplace, our peer group and its own independent analysis and recommendations concerning executive compensation. Gressle & McGinley LLC regularly participates in Compensation Committee meetings. Gressle & McGinley LLC does not provide any additional services to the Committee and does not provide any services to the Company other than to the Committee. Their sole role is as an independent consulting firm to advise the Committee with respect to the compensation of our named executive officers. The ultimate determination of total compensation and the elements that comprise that total compensation is made solely by the Committee.
With respect to our named executive officers, the Committee solicits recommendations from our Chief Executive Officer regarding total compensation, the allocation of this compensation among base salary, annual bonus amounts and other long-term incentive compensation, as well as the portion of overall compensation to be provided in cash or equity. Our Chairman also advises the Committee on these matters as they pertain to the compensation of our Chief Executive Officer. FTI Consulting, Inc., or FTI Consulting, is retained by our management as a general business advisor
34 SL Green Realty Corp.
EXECUTIVE COMPENSATION
and provides services to the Company in a number of areas, including compensation. FTI Consulting, which has relationships with certain officers of the Company, provides market data to our Chief Executive Officer and Chairman, which they review when considering their compensation recommendations. The recommendations with respect to compensation are formulated by our Chief Executive Officer and Chairman and are communicated to the Committee by them. The Committee is also provided with the market data compiled by FTI Consulting and its recommendations with respect to the compensation of our named executive officers. The other named executive officers do not play a role in determining their own compensation, other than discussing their performance with our Chief Executive Officer.
All final determinations of compensation for our named executive officers are made solely by the Committee.
The Committee meets during the year to evaluate executive performance, to monitor market conditions in light of our goals and objectives, to solicit input from our independent compensation consultant on market practices, including peer group pay practices and new developments, and to review our executive compensation practices. As part of these meetings, in formulation of its executive compensation policies and practices for 2015, the Committee reviewed then-existing policies of certain of our institutional investors, Institutional Shareholder Services, Inc., or ISS, Glass Lewis & Co LLC and other governance groups, as well as feedback provided by such groups in prior year proxy research reports. The Committee is currently engaged with stockholders, as discussed above, and annually reviews our executive compensation policies and practices to ensure that such policies are in line with current market practices and stockholders’ best interests. The Committee makes regular reports to the Board.
Peer Group Benchmarking
| EXECUTIVE COMPENSATION | | | 63 | |
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Our direct New York City competitors, both in terms
Due to the limited number of REITs with an executive chairman who does not also serve as the chief executive officer, the Committee also reviewed information from the following REITs that have an executive serving in this role in order to assist the Committee with its compensation determinations for our Executive Chairman: Boston Properties, Inc.; CBL & Associates Properties, Inc.; Colony Financial, Inc.; Hyatt Hotels Corporation; Kimco Realty Corporation; Marriott International, Inc.; Pennsylvania Real Estate Investment Trust; and RLJ Lodging Trust.
company.
| 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. | |
Although
| 64 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Named Executive Officers and Non-Employee Directors | | | Multiple of Base Salary or Annual Cash Retainer | | |||
Chief Executive Officer | | | | | 8x | | |
Other Named Executive Officers | | | | | 6x | | |
Non-Employee Directors | | | | | 5x | | |
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2016Proxy Statement35
EXECUTIVE COMPENSATION
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In conclusion, our executive compensation program is structured so that (i) we avoid the type of disproportionately large short-term incentives that could encourage executives to take risks that may not be in our long-term interests, (ii) we provide incentives to manage the Company for long-term performance, (iii) we have adopted a policy for recoupment of incentive payments under certain circumstances and (iv)officers hold a significant amount of equity in our Company and are highly incentivized to create sustainable, long-term stockholder value.
Named Executive Officers | | | Actual Equity Ownership— Multiple of Base Salary(1) | | |||
Marc Holliday | | | | | 54x | | |
Matthew J. DiLiberto | | | | | 20x | | |
Andrew S. Levine | | | | | 22x | | |
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) | |
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) | |
named executive officers, see “—Executive Compensation Tables—Outstanding Equity Awards at Fiscal Year End 2023.”
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Clawback
The
36SL Green Realty Corp.
EXECUTIVE COMPENSATION
Anti-hedging Policy
Other Matters
Tax Treatment. The Committee reviews and considersCompany does not have any practices or policies regarding the tax efficiencyability of executive compensation as part of its decision-making process. Section 162(m)any other employees to purchase financial instruments or otherwise engage in transactions that hedge or offset, or are designed to hedge or offset, any decrease in the market value of the IRC generally limits the deductibility of compensation over $1million to a corporation’s named executive officers. We are a real estate investment trustCompany’s equity securities.
Class O LTIP units. Under our 2014 Outperformance Plan, in lieu of issuing shares of restricted stock, we
| 66 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
2016Proxy Statement37
| Lauren B. Dillard (Chair) | | | Carol N. Brown | | | Edwin T. Burton, III | |
| EXECUTIVE COMPENSATION | | | 67 | |
Name And Principal Position | Year | Salary ($) | Bonus ($) | Non-Equity Incentive Plan Compensation ($) | Stock Awards(1)(2) ($) | Option Awards ($) | All Other Compensation(3) ($) | Total ($) | |||||||||||||||
Marc Holliday | 2015 | $ | 1,050,000 | $ | 787,500 | $ | 2,008,125 | $ | 19,159,050 | — | $ | 43,074 | $ | 23,047,749 | |||||||||
Chief Executive | 2014 | $ | 1,050,000 | — | $ | 1,102,500 | $ | 14,160,346 | — | $ | 41,215 | $ | 16,354,061 | ||||||||||
Officer | 2013 | $ | 1,050,000 | $ | 1,100,000 | — | $ | 6,632,200 | $ | 3,849,590 | $ | 38,938 | $ | 12,670,728 | |||||||||
Stephen L. Green | 2015 | $ | 750,000 | $ | 468,750 | $ | 1,202,343 | $ | 3,962,493 | — | $ | 170,490 | $ | 6,554,076 | |||||||||
Chairman of the | 2014 | $ | 750,000 | — | — | $ | 4,468,371 | — | $ | 173,992 | $ | 5,392,363 | |||||||||||
Board | 2013 | $ | 750,000 | — | — | $ | 4,543,356 | — | $ | 148,389 | $ | 5,441,745 | |||||||||||
Andrew Mathias | 2015 | $ | 800,000 | $ | 500,000 | $ | 1,282,500 | $ | 13,436,852 | — | $ | 26,790 | $ | 16,046,132 | |||||||||
President | 2014 | $ | 800,000 | — | — | $ | 10,188,264 | — | $ | 7,800 | $ | 10,996,064 | |||||||||||
2013 | $ | 750,000 | — | — | $ | 5,370,869 | $ | 3,136,874 | $ | 28,863 | $ | 9,286,606 | |||||||||||
Matthew | 2015 | $ | 400,000 | $ | 1,400,000 | — | — | — | $ | 7,950 | $ | 1,807,950 | |||||||||||
DiLiberto | |||||||||||||||||||||||
Chief Financial | |||||||||||||||||||||||
Officer | |||||||||||||||||||||||
Andrew S. Levine | 2015 | $ | 500,000 | — | — | $ | 873,342 | — | $ | 7,950 | $ | 1,381,292 | |||||||||||
Chief Legal Officer | 2014 | $ | 490,000 | — | — | $ | 2,033,308 | — | $ | 7,800 | $ | 2,531,108 | |||||||||||
and General | 2013 | $ | 475,000 | $ | 100,000 | — | $ | 3,264,228 | $ | 592,749 | $ | 7,650 | $ | 4,439,627 | |||||||||
Counsel |
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 | | |
All Other Compensation ($) | | |||||||
Marc Holliday | | | $ | | | |||
Andrew Mathias | | | $ | | | |||
Matthew J. DiLiberto | | | $ | | | |||
Andrew S. Levine | | | $ | 13,200(b) | | |
| | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
38SL Green Realty Corp.
EXECUTIVE COMPENSATION
2015December31,2015.All Other
Stock
Awards:
Number
of Shares
of Stock
or Units Grant Date
Fair Value
of Stock
and Option
Awards
($)
Estimated Possible Payouts Under Non-
Equity Incentive Plan Award (#)Estimated Future Payouts Under
Equity Incentive Plan Award (#)Name Grant Date Approval
Date Threshold
($/#) Target
($/#) Maximum
($/#) Threshold
($/#) Target
($/#) Maximum
($/#) Marc Holliday 01/12/2015 01/12/2015 — — — — — — 45,832(1) $ 4,682,930 01/12/2015 01/12/2015 — — — — — — 87,870(2) $ 8,978,205 01/12/2015 01/12/2015 — — — 25,925(3) 25,925(3) 69,133(3) — $ 4,884,667 01/18/2015 09/10/2013 — — — — — — 4,791(4) $ 613,248 N/A N/A $ 787,500(7) $ 1,575,000(7) $ 2,362,500(7) — — — — — Stephen L.
Green01/01/2015 12/09/2009 — — — — — — 1,233(5) $ 146,752 01/12/2015 01/12/2015 — — — — — — 21,804(1) $ 2,227,846 01/12/2015 01/12/2015 — — — 8,427(3) 8,427(3) 22,473(3) — $ 1,587,895 N/A N/A $ 562,500(7) $ 984,375(7) $ 1,406,250(7) — — — — — Andrew
Mathias01/01/2015 11/08/2013 — — — — — — 3,699(5) $ 440,255 01/12/2015 01/12/2015 — — — — — — 32,952(1) $ 3,366,904 01/12/2015 01/12/2015 — — — 58,667(6) 58,667(6) — — $ 6,181,683 01/12/2015 01/12/2015 — — — 18,300(3) 18,300(3) 48,800(3) — $ 3,448,000 N/A N/A $ 600,000(7) $ 1,050,000(7) $ 1,500,000(7) — — — — — Matthew
DiLiberto— — — — — — — — — — Andrew S.
Levine01/12/2015 01/12/2015 — — — 4,635(3) 4,635(3) 12,360(3) — $ 873,342 (1)This grant of LTIP units vested immediately upon grant, but remains subject to a two-year restriction on transfer from the date of grant.(2)This grant of LTIP units was awarded in connection with Mr. Holliday’s employment agreement and was to be subject to vesting based on the achievement of any of the following financial performance goals during 2014 (or on a cumulative basis beginning with 2013 through the end of 2014 or 2015) and continued employment through January 17th of the year following the year as of which the financial performance goals are achieved: (i) 8% or greater increase in FFO on a per-share basis, (ii) 8% or greater TRS or (iii) TRS or percentage increase in FFO per share in the top 35% of a peer group of companies determined each year by our Compensation Committee. This grant is presented in the “All Other Stock Awards: Number of Shares of Stock or Units” column instead of the “Estimated Future Payouts Under Equity Incentive Plan Award” column, because the grant occurred after performance-based vesting was achieved. Once vested, these LTIP units remain subject to a restriction on transfer until the earlier of two years after vesting, termination of employment or a change in control.(3)Represents awards made under the 2014 Outperformance Plan. See “Executive Compensation—Compensation Discussion and Analysis—SL Green Realty Corp. 2014 Outperformance Plan” for a description of the terms of the 2014 Outperformance Plan. The “Maximum ($/#)” column represents the maximum number of LTIP Units that could be earned under the 2014 Outperformance Plan with respect to the portion of the awards that were granted in 2015 to the named executive officers, which would be earned if we achieved (i) absolute TSR return of 50% or greater and (ii) relative TSR in the 75th percentile or greater of a selected peer group, in each case during the performance period under the 2014 Outperformance Plan. The “Threshold ($/#)” column and the “Target ($/#)” column represent the number of LTIP units that would be earned if we achieved (i) absolute TSR of 25% and (ii) relative TSR in the 50th percentile of a selected peer group during the performance period under the 2014 Outperformance Plan, representing the minimum performance that would entitle recipients to awards under the 2014 Outperformance Plan, which our Compensation Committee viewed as the target performance goal when approving the 2014 Outperformance Plan awards. If our absolute and relative2016Proxy Statement39
December 31, 2023. Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards Estimated Future Payouts Under
Equity Incentive Plan Awards All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#) Grant
Date Fair
Value of
Stock and
Option
Awards
($) 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
| EXECUTIVE COMPENSATION | | | 69 | |
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 (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units or Other Rights that Have Not Vested(2) | |||||||||||
Marc Holliday | 66,666(5) | 33,334(5) | $ | 76.65 | 01/02/2018 | 9,778 | $ | 1,104,718 | — | — | |||||||||
66,666(5) | 33,334(5) | $ | 76.65 | 01/02/2023 | — | — | 30,913(3)(4) | $ | 3,492,551 | ||||||||||
Stephen L. Green | — | — | — | — | 2,201 | $ | 248,669 | 10,628(3)(4) | $ | 1,200,751 | |||||||||
Andrew Mathias | 43,333(6) | 21,667(6) | $ | 91.43 | 11/08/2018 | 3,779 | $ | 426,951 | — | — | |||||||||
43,333(6) | 21,667(6) | $ | 91.43 | 11/08/2023 | — | — | 22,081(3)(4) | $ | 2,494,711 | ||||||||||
Matthew DiLiberto | 10,000 | 20,000 | $ | 90.15 | 12/12/2018 | 13,646 | $ | 1,541,725 | — | — | |||||||||
— | — | — | — | — | — | 14,269(3)(4) | $ | 1,612,112 | |||||||||||
Andrew S. Levine | 4,166(7) | 8,334(7) | $ | 90.15 | 12/12/2018 | 14,925 | $ | 1,686,227 | — | — | |||||||||
4,166(7) | 8,334(7) | $ | 90.15 | 12/12/2023 | — | — | 5,561(3)(4) | $ | 628,282 |
40SL Green Realty Corp.
| | | 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 | | |
EXECUTIVE COMPENSATION
Executive | Notional Stock Units(a) | LTIP Units(b) | Performance- Based Employment Agreement LTIP Units(c) | Time-Based Employment Agreement LTIP Units(d) | ||||
Marc Holliday | 4,791 | 4,987 | — | — | ||||
Stephen L. Green | — | 2,201 | — | — | ||||
Andrew Mathias | — | 3,779 | — | — | ||||
Matthew DiLiberto | — | 646 | — | 13,000 | ||||
Andrew S. Levine | — | 925 | 7,000 | 7,000 |
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) | | |
| ||
| ||
SL GREEN REALTY CORP. 2024 PROXY STATEMENT | ||
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 | |
2016Proxy Statement 41
EXECUTIVE COMPENSATION
2015$45.17 per share/unit, which was the closing price on the NYSE of one share of our common stock on December 29, 2023. Assumes that the value of LTIP units on a per unit basis is equal to the per share value of our common stock.
Executive | | | 2023 Performance- Based LTIP Units(a) | | | 2022 Performance- Based LTIP Units(b) | | ||||||
Marc Holliday | | | | | 276,137 | | | | | | 69,873 | | |
Andrew Mathias | | | | | 220,910 | | | | | | 55,899 | | |
Matthew J. DiLiberto | | | | | 20,454 | | | | | | 5,176 | | |
Andrew S. Levine | | | | | 20,454 | | | | | | 5,176 | | |
None of our named executive officers exercised any stock options during 2015.
Stock Awards | |||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1)($) | |||
Marc Holliday | 302,112 | $ | 35,672,524 | ||
Stephen L. Green | 100,193 | $ | 11,434,062 | ||
Andrew Mathias | 228,021 | $ | 25,892,788 | ||
Matthew DiLiberto | 27,443 | $ | 3,051,153 | ||
Andrew S. Levine | 45,006 | $ | 5,073,496 |
| | | 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 | | |
| | | 71 | |
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 | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Change in Control
| |
| |
| |
|
options and Class O LTIP Units. The discussion below describes these contractual arrangements in greater detail.
We have
| 72 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| | | Marc Holliday | | Andrew Mathias | | | Matthew J. DiLiberto | | | Andrew S. Levine | | ||
Term | | | 1/18/ | | | 1/1/ | | | 1/1/ | | | 1/1/ | ||
Annual Salary | | $1.25M | | $ | | $600K | | | $ | | ||||
Formulaic Annual | | | 50-300% base salary | | | 50-250% base salary | | | 50-250% base salary | | | None | | |
| $7.5M (Target)(3) | | $ | | None | | | None | | |||||
| $4.5M (Target)(4) | | | $1.4M (Target)(4) | | $1.3M (Target)(4) | | |||||||
Other Benefits | | | $10M of life insurance | | None | | | None | | | None | | ||
42SL Green Realty Corp.
EXECUTIVE COMPENSATION
Severance Benefits withoutChange-in-Control (“CiC”) and (in connection with a CiC)(5) | | | If the executive’s employment is terminated by us without Cause or by the executive for Good Reason during the term, the executive will be entitled to the following payments or benefits, subject |
| 2.0x / 1.5x the sum of base salary, maximum formulaic bonus and target value of annual time-based equity award (if CiC: 3.0x / 2.5x the sum of base salary, average annual • Pro-rata bonus and pro-rata portion of target value of annual time-based award for partial year • Acceleration of all unvested time-based equity awards Class O LTIP unit/option exercise period extended to second January • 24 (36 if CiC) / 18 (30 if CiC) months of benefit | | | 1x (2x if CiC) the sum of base salary and average annual • The target value of the annual time-based equity awards to be granted in each January remaining in the term, to the extent not yet granted • Pro-rata bonus for partial year • Acceleration of all unvested time-based equity awards Class O LTIP unit/option exercise period extended to second January • 12 (24 if CiC)months of benefit | |
Death / (Disability)(5) | | | If the executive’s employment is terminated by us upon death or disability during the term, the executive will be entitled to all of the following payments or benefits, |
| (If Disability: 1x the sum of base salary, maximum formulaic bonus and target value of annual time-based equity award) • Pro-rata bonus for partial year • Acceleration of all unvested equity awards (other than Class O LTIP unit/option exercise period extended to second January 1st following termination • Payments/benefits to • (If Disability: 36 months of benefit continuation/payments) | | | (If Disability: 1x the sum of base salary and average annual • Pro-rata bonus for partial year • Pro-rated target value of the annual time-based equity awards (upon termination prior to final annual time-based grant) • Acceleration of all unvested equity awards (other than Class O LTIP unit/ option exercise period extended to second January 1st following termination • (If Disability: 36 months of benefit continuation/ | |
EXECUTIVE COMPENSATION |
| | 73 | |
| | | Marc Holliday | | | Andrew Mathias | | | Matthew J. DiLiberto | | | Andrew S. Levine | |
Post-Change-in-Control Compensation | | | Upon a Change-in-Control, for pro-rata payments, and while employed for periods following a Change-in-Control, in lieu of the base salary, annual bonus, | | |||||||||
| • Pro-rata bonus based on average annual bonus for prior two years and pro-rata portion of target value of annual time-based award for partial year prior to Change-in-Control • Annual cash salary | | | • Pro-rata bonus for partial year prior to • Annual cash salary equal to the sum of prior base salary, prior year cash bonus (or average of three prior fiscal year cash bonuses, for DiLiberto) and, beginning in the | | ||||||||
Restrictive Covenants | | | The executive agreed to the | | |||||||||
| Noncompetition with us for | | | Noncompetition with us for | | | Noncompetition with us for 6 months after termination unless employment is terminated upon non-renewal of the |
2016 Proxy Statement 43
EXECUTIVE COMPENSATION
Outperformance Plan
| 74 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Annual Performance-Based Awards | | |||||||||
| | | Change-in-Control (“CiC”) | | | Change-in-Control & Termination Without Cause or For Good Reason(1) | | | Death/Disability & Termination Without Cause or For Good Reason(1) | |
Holliday / Mathias Awards | | | • If one-year performance period ends early, Operational Component deemed achieved at target, subject to Absolute TSR modifier • Relative Component determined as of date of CiC • Earned awards remain subject to time-based vesting | | | • If one-year performance period ends early, Operational Component deemed achieved at maximum (200%), subject to Absolute TSR modifier • Relative Component determined as of date of CiC • Earned awards vest in full | | | • Performance calculated as of end of performance period • Earned awards fully vested | |
DiLiberto / Levine Awards | | | • If one-year performance period ends early, Operational Component deemed achieved at target, subject to Absolute TSR modifier • Relative Component determined as of date of CiC • Earned awards remain subject to time-based vesting | | | • If one-year performance period ends early, Operational Component deemed achieved at target, subject to Absolute TSR modifier • Relative Component determined as of date of CiC • Earned awards vest in full | | | • Performance calculated as of end of performance period • Earned awards fully vest, subject to proration such that no units vest if termination occurs during the first year, one-third vest if the termination occurs during the second year and two-thirds will vest if the termination occurs during the third year | |
Annual Performance-Based Equity Awards
Upon a change-in-control, the performance-based vesting criteria for the performance-based LTIP unit awards that we granted to our named executive officers pursuant to their employment agreements or that we granted in 2014 in recognition of our strong stock price performance during the three-year performance period under our 2011 Outperformance Plan will be determined based on performance through the date of the change-in-control (except for the portion of the performance-based LTIP unit awards that were to be granted as time-based LTIP unit awards to Messrs. Holliday and Mathias prior is generally subject to the amendments to their then current employment agreements in 2014, for which the performance-based vesting criteria will be deemed to have been met in the eventeffectiveness of a change-in-control). Regardless of the satisfaction of the performance-based vesting criteria, these awards will remain subject to vesting based on continued employment through the originally established vesting dates. In the event ofmutual release, except upon a termination by us without Causeas a result of death or by an executive for Good Reason (as defined in each executive’s employment agreement) in connection with or within 18 months after a change-in-control, allchange in control.
Stock Options
Under the general terms of the2005Plan, the vesting of stock options granted thereunder, including those granted to our named executive officers, will fully accelerate in the event of a terminationan officer of the recipient’s employment upon death or disability. Vested stock options generally may be exercised untilCompany. This summary is qualified in its entirety by reference to the earlier of (i) their stated expiration date or (ii) subject to extensioncopy of the exercise period pursuant to our named executive officers’ employment agreements, a specified period of time after termination of employment (i.e., upon termination innon-renewal and advisory agreement, which has been previously filed by us with the event of termination for cause, one year after termination in the event of termination due to death or disabilitySEC, and three months after termination in all other cases).
44SL Green Realty Corp.
| EXECUTIVE COMPENSATION | | | 75 | |
Change in Control
Marc Holliday | ||||||||||||
Payment/Benefit | Termination without Cause or for Good Reason | Termination w/Change-in-Control | Disability | Death(1) | ||||||||
Pro-Rata Bonus | $ | 8,615,000 | $ | 8,615,000 | $ | 8,615,000 | $ | 8,615,000 | ||||
Cash Severance | $ | 10,240,000 | $ | 30,720,000 | $ | 10,240,000 | — | |||||
Stock Option Vesting(2) | $ | 2,422,048 | $ | 2,422,048 | $ | 2,422,048 | $ | 2,422,048 | ||||
LTIP Unit/Stock Unit Vesting(3) | $ | 11,595,778 | $ | 11,595,778 | $ | 11,595,778 | $ | 11,595,778 | ||||
2014 OPP(4) | — | — | — | — | ||||||||
Benefits Continuation(5) | $ | 31,965 | $ | 63,930 | $ | 95,895 | — | |||||
Stephen L. Green | ||||||||||||
Payment/Benefit | Termination without Cause or for Good Reason | Termination w/Change-in-Control | Disability | Death(1) | ||||||||
Pro-Rata Bonus | $ | 4,750,000 | $ | 4,750,000 | $ | 4,750,000 | $ | 4,750,000 | ||||
Cash Severance | $ | 5,650,000 | $ | 16,950,000 | $ | 5,650,000 | — | |||||
Stock Option Vesting(2) | — | — | — | — | ||||||||
LTIP Unit/Stock Unit Vesting(3) | $ | 497,338 | $ | 497,338 | $ | 497,338 | $ | 497,338 | ||||
2014 OPP(4) | — | — | — | — | ||||||||
Benefits Continuation(5) | $ | 31,302 | $ | 62,604 | $ | 93,906 | — | |||||
Andrew Mathias | ||||||||||||
Payment/Benefit | Termination without Cause or for Good Reason | Termination w/Change-in-Control | Disability | Death(1) | ||||||||
Pro-Rata Bonus | $ | 6,225,000 | $ | 6,225,000 | $ | 6,225,000 | $ | 6,225,000 | ||||
Cash Severance | $ | 7,450,000 | $ | 18,625,000 | $ | 7,450,000 | — | |||||
Stock Option Vesting(2) | $ | 933,848 | $ | 933,848 | $ | 933,848 | $ | 933,848 | ||||
LTIP Unit/Stock Unit Vesting(3) | $ | 7,482,364 | $ | 7,482,364 | $ | 7,482,364 | $ | 7,482,364 | ||||
2014 OPP(4) | — | — | — | — | ||||||||
Benefits Continuation(5) | $ | 31,965 | 63,930 | 95,895 | — | |||||||
Matthew DiLiberto | ||||||||||||
Payment/Benefit | Termination without Cause or for Good Reason | Termination w/Change-in-Control | Disability | Death(1) | ||||||||
Pro-Rata Bonus | $ | 1,337,500 | $ | 1,337,500 | $ | 1,337,500 | $ | 1,337,500 | ||||
Cash Severance | $ | 1,707,500 | $ | 3,415,000 | $ | 1,707,500 | — | |||||
Stock Option Vesting(2) | $ | 456,600 | $ | 456,600 | $ | 228,300 | $ | 228,300 | ||||
LTIP Unit/Stock Unit Vesting(3) | $ | 2,405,796 | $ | 2,405,796 | $ | 750,865 | $ | 750,865 | ||||
2014 OPP(4) | — | — | — | — | ||||||||
Benefits Continuation(5) | $ | 31,173 | $ | 63,346 | $ | 93,519 | — | |||||
Andrew S. Levine | ||||||||||||
Payment/Benefit | Termination without Cause or for Good Reason | Termination w/Change-in-Control | Disability | Death(1) | ||||||||
Pro-Rata Bonus | $ | 1,137,500 | $ | 1,137,500 | $ | 1,137,500 | $ | 1,137,500 | ||||
Cash Severance | $ | 1,632,500 | $ | 3,265,000 | $ | 1,632,500 | — | |||||
Stock Option Vesting(2) | $ | 380,530 | $ | 380,530 | $ | 190,265 | $ | 190,265 | ||||
LTIP Unit/Stock Unit Vesting(3) | $ | 1,790,846 | $ | 1,790,846 | $ | 1,686,227 | $ | 1,686,227 | ||||
2014 OPP(4) | — | — | — | — | ||||||||
Benefits Continuation(5) | $ | 31,965 | $ | 63,930 | $ | 95,895 | — |
2016Proxy Statement 45
Payment/Benefit | | | Termination without Cause or for Good Reason | | | Termination w/ Change in Control | | | Disability | | | Death(1) | | ||||||||||||
Pro-Rata Bonus | | | | $ | 7,232,344 | | | | | $ | 7,232,344 | | | | | $ | 7,232,344 | | | | | $ | 7,232,344 | | |
Cash Severance | | | | $ | 19,000,000 | | | | | $ | 28,500,000 | | | | | $ | 9,500,000 | | | | | | — | | |
Stock Option / Class O LTIP Unit Vesting(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
LTIP Unit / Stock Unit Vesting(3) | | | | $ | 16,768,007 | | | | | $ | 33,110,597 | | | | | $ | 16,768,007 | | | | | $ | 16,768,007 | | |
Benefits Continuation(4) | | | | $ | 133,024 | | | | | $ | 199,535 | | | | | $ | 199,535 | | | | | | — | | |
Payment/Benefit | | | Termination without Cause or for Good Reason | | | Termination w/ Change in Control | | | Disability | | | Death | | ||||||||||||
Pro-Rata Bonus | | | | $ | 1,670,000 | | | | | $ | 1,670,000 | | | | | $ | 1,670,000 | | | | | $ | 1,670,000 | | |
Cash Severance | | | | $ | 5,070,000 | | | | | $ | 7,340,000 | | | | | $ | 3,670,000 | | | | | | 1,400,000 | | |
Stock Option / Class O LTIP Unit Vesting(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
LTIP Unit / Stock Unit Vesting(3) | | | | $ | 2,536,747 | | | | | $ | 4,385,633 | | | | | $ | 2,536,747 | | | | | $ | 2,536,747 | | |
Benefits Continuation(4) | | | | $ | 47,227 | | | | | $ | 94,454 | | | | | $ | 141,681 | | | | | | — | | |
Payment/Benefit | | | Termination without Cause or for Good Reason | | | Termination w/ Change in Control | | | Disability | | | Death | | ||||||||||||
Pro-Rata Bonus | | | | $ | 1,062,500 | | | | | $ | 1,062,500 | | | | | $ | 1,062,500 | | | | | $ | 1,062,500 | | |
Cash Severance | | | | $ | 2,942,500 | | | | | $ | 4,585,000 | | | | | $ | 2,942,500 | | | | | $ | 1,300,000 | | |
Stock Option / Class O LTIP Unit Vesting(2) | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
LTIP Unit / Stock Unit Vesting(3) | | | | $ | 2,903,979 | | | | | $ | 4,542,689 | | | | | $ | 2,903,973 | | | | | $ | 2,903,973 | | |
Benefits Continuation(4) | | | | $ | 47,474 | | | | | $ | 94,948 | | | | | $ | 142,421 | | | | | | — | | |
EXECUTIVE COMPENSATION
Our Compensation Committee is comprised of John H. Alschuler,
46SL Green
| EXECUTIVE COMPENSATION | | | 77 | |
| | | 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 ($)(4) | | ||||||||||||||||||||||||||||||||||||||||||
2023 | | | | | 18,508,171 | | | | | | 30,796,068 | | | | | | 6,439,504(6) | | | | | | 10,630,597(6) | | | | | | 66 | | | | | | 71 | | | | | | (599,337) | | | | | | 5.48 | | |
2022 | | | | | 16,660,855 | | | | | | (11,758,654) | | | | | | 7,006,710(6) | | | | | | (2,389,306)(6) | | | | | | 44 | | | | | | 68 | | | | | | (76,303) | | | | | | 6.76 | | |
2021 | | | | | 21,088,057 | | | | | | 32,642,206 | | | | | | 7,711,773(6) | | | | | | 11,565,039(6) | | | | | | 90 | | | | | | 103 | | | | | | 480,632 | | | | | | 6.58 | | |
2020 | | | | | 15,194,726 | | | | | | 9,617,334 | | | | | | 6,741,540(6) | | | | | | 4,723,677(6) | | | | | | 71 | | | | | | 78 | | | | | | 414,758 | | | | | | 6.85 | | |
Year | | | Summary Compensation Table Total for PEO ($) | | | Less Summary Compensation Table Value of Equity Awards ($)(a) | | | Fair Value of Equity Award Adjustments ($)(b) | | | Compensation Actually Paid to PEO ($) | | ||||||||||||
2023 | | | | | 18,508,171 | | | | | | (15,767,540) | | | | | | 28,055,437 | | | | | | 30,796,068 | | |
2022 | | | | | 16,660,855 | | | | | | (14,284,701) | | | | | | (14,134,808) | | | | | | (11,758,654) | | |
2021 | | | | | 21,088,057 | | | | | | (18,099,677) | | | | | | 29,653,826 | | | | | | 32,642,206 | | |
2020 | | | | | 15,194,726 | | | | | | (12,643,310) | | | | | | 7,065,918 | | | | | | 9,617,334 | | |
Year | | | Year End Fair Value of Equity Awards Granted in the Year and Unvested ($) | | | 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 | | |
| 78 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
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 | | |
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 | | |
| EXECUTIVE COMPENSATION | | | 79 | |
| 80 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
EXECUTIVE COMPENSATION
Equity Compensation Plan Table
Performance Measures
Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | ||||||||
Plan category | (a) | (b) | (c) | |||||||
Equity compensation plans approved by security holders(1) | 4,236,030 | (2) | $ | 89.85 | (3) | 535,534 | (4) | |||
Equity compensation plans not approved by security holders | — | — | — | |||||||
Total | 4,236,030 | $ | 89.85 | 535,534 |
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2016Proxy Statement47
The members of our Audit Committee are not engaged professionally in the practice of auditing or accounting. Committee members rely, without independent investigation or verification, on the information provided to them and on the representations made by management and our independent registered public accounting firm. Accordingly, our AuditProposal 3: Ratification of Appointment of Independent Registered Public Accounting FirmTheChange in Independent Registered Public Accounting FirmBoard has appointed the accounting firm of Ernst & Young LLP to serve as ourCompany’s independent registered public accounting firm for the fiscal year ending December 31, 2016. Stockholder ratification of the appointment of2024. The Audit Committee invited several firms to participate in this process, including Ernst & Young LLP is not required by law, the NYSE or(“EY”), the Company’s organizational documents. However, asindependent registered accounting firm since 1997. As a matterresult of good corporate governance, the Board has elected to submit the appointment of Ernst & Young LLP to the stockholders for ratification at the 2016 annual meeting. Even if the appointment is ratified,this process and following careful deliberation, on November 27, 2023, the Audit Committee in its discretion, may select a different independent registered public accounting firm at any time ifapproved the Audit Committee believes that such a change would be inengagement of Deloitte & Touche LLP (“Deloitte”) as the best interests of the Company and its stockholders. If our stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will take that fact into consideration, together with such other factors it deems relevant, in determining its next selection of an independent registered public accounting firm. Ernst & Young LLP has served as our independent registered public accounting firm since our formation in June 1997 and is considered by our management to be well-qualified. Ernst & Young LLP has advised us that neither it nor any member thereof has any financial interest, direct or indirect, in the Company or any of our subsidiaries in any capacity.A representative of Ernst & Young LLP will be present at the annual meeting, will be given the opportunity to make a statement at the annual meeting if he or she so desires and will be available to respond to appropriate questions.A majority of all of the votes cast with respect to this proposal is required for the ratification of the appointment of Ernst & Young LLP as ourCompany’s independent registered public accounting firm for the year ending December 31, 2024, commencing January 1, 2024, and dismissed EY from that role following the completion of EY’s audits of the financial statements for each of the Company and SL Green Operating Partnership, L.P. (“SLGOP”) for the fiscal year ending December 31, 2016. Abstentions do2023.constitutecontain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.vote “for” or “against”copy of the above disclosures to EY and willDeloitte, and has not be counted as “votes cast”. Therefore, abstentions will have no effect on this proposal.
received a statement from either accounting firm indicating that such firm does not agree with the above statements.The Board unanimously recommends a vote“FOR” the ratification of the appointment ofErnst & Young LLP as our independent registered public accounting firm.20152023 filed by the Company with management.under Auditing Standard No.16, “Communications with Audit Committees,” as adopted by the applicable requirements of the Public Company Accounting Oversight Board.Board and the SEC. Our Audit Committee received from Ernst & Young LLP the written disclosures and the letter required by the applicable requirements of the Public Company Accounting Oversight Board regarding communications with the Audit Committee concerning independence, and has discussed with Ernst & Young LLP their independence.20152023 filed by the Company.48SL Green Realty Corp.AUDIT COMMITTEE MATTERS
| 82 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
independent. The audit committee also appointed Deloitte to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024 and is seeking ratification of such appointment by the stockholders.
| Edwin T. Burton, III (Chair) | | | Betsy S. Atkins | | | Lauren B. Dillard | | | Craig M. Hatkoff | |
Audit Fees
Fees, including out-of-pocket expenses, for audit services totaled approximately $4,031,963 in fiscal year 2015 and $3,441,222 in fiscal year 2014. Audit fees include fees associated with our annual audits and related reviews of our annual reports on Form 10-K and quarterly reports on Form 10-Q. In addition, audit fees include Sarbanes-Oxley Section 404 planning and testing, fees for public filings in connection with various property acquisitions, joint venture audits, and services relating to public filings in connection with our preferred and common stock and debt offerings and certain other transactions. Our joint venture partners paid their pro rata share of any joint venture audit fees. Audit fees also include fees for accounting research and consultations.
Audit-Related Fees
Fees for audit-related services totaled approximately $54,255 in 2015 and $77,500 in 2014. The audit-related services principally include fees for operating expense audits and agreed-upon procedures projects.
Tax Fees
No fees were incurred for tax services, including tax compliance, tax advice and tax planning in either2015or2014.
All Other Fees
There were no fees for other services not included above in either2015or2014.
Our Audit Committee considers whether the provision by Ernst & Young LLP of any services that would be required to be described under “All Other Fees” would be compatible with maintaining Ernst & Young LLP’s independence from both management and the Company.
| PROPOSAL 3 | | | | | | ||
| | | |
| RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | |
| The Audit Committee of the Board has appointed the accounting firm of Deloitte & Touche LLP to serve as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Stockholder ratification of the appointment of Deloitte & Touche LLP is not required by law, the NYSE or the Company’s organizational documents. However, as a matter of good corporate governance, the Board has elected to submit the appointment of Deloitte & Touche LLP to the stockholders for ratification at the 2024 Annual Meeting. Even if the appointment is ratified, the Audit Committee, in its discretion, may select a different independent registered public accounting firm at any time if the Audit Committee believes that such a change would be in the best interests of the Company and | |
| A representative of Deloitte & Touche LLP will attend the Annual Meeting, will be given the opportunity to make a statement at the Annual Meeting if he or she so desires and will be available to respond to appropriate questions. A representative of Ernst & Young is not expected to attend the Annual Meeting. | |
| A majority of all of the votes cast with respect to this proposal is required for the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024. Abstentions do not constitute a vote “for” or “against” and will not be counted as “votes cast”. Therefore, abstentions will have no effect on this proposal. | |
| | The Board unanimously recommends a vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm. | | | | |
| 84 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
2016Proxy Statement49
APPROVAL OF OUR FOURTH AMENDED ANDRESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
| | | 2023 ($) | | | 2022 ($) | | ||||||
Audit Fees | | | | | 3,576,000 | | | | | | 3,547,000 | | |
Audit-Related Fees | | | | | 221,000 | | | | | | 87,000 | | |
Tax Fees | | | | | — | | | | | | — | | |
All Other Fees | | | | | — | | | | | | — | | |
TOTAL | | | | | 3,797,000 | | | | | | 3,634,000 | | |
On April 20, 2016, the Board voted to amendAudit Fees
The Fourth Amended 2005 Plan increases the reserved Fungible Units under the plan by 9,900,000 Fungible Units. As of March 31, 2016, there were no fungible units (the “Fungible Units”) available under our Third Amended 2005 Plan.quarterly reports on Form 10-Q. In addition, as of the same date, if all of the LTIP units that we granted pursuantaudit fees include Sarbanes-Oxley Section 404 planning and testing, fees for joint venture audits, and services relating to our 2014 Outperformance Plan were earned, we would not have reserved shares of stock under our Third Amended 2005 Plan with respect to 205,165 of those LTIP units. The Fungible Units represent the baseline for the number of shares of common stock available for issuance under our Third Amended 2005 Plan from which, as described in more detail below, different types of awards are counted differently against the Fungible Unit limit. By increasing the reserved Fungible Units, we will be able to continue to use equity awards to attract, retain and motivate employees and we will have sufficient Fungible Units to reserve shares with respect to all of the LTIP units that could be earned under our 2014 Outperformance Plan. We believe that having an equity plan in place with a sufficient number of shares is critical to our ability to attract, retain and motivate employees in a highly competitive marketplace and ensure that our executive compensation is structured in a manner that aligns the executives’ interests with our success. If our stockholders approve this increase in the Fungible Units for grants under the Fourth Amended 2005 Plan, we anticipate we will have sufficient shares to provide equity awards to attract, retain and motivate employees for approximately the next three to four years.
50SL Green Realty Corp.
APPROVAL OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
As of the record date for the annual meeting, March 31, 2016, there were 100,079,573 shares of common stock outstanding and 1,757,316 operating partnership units outstanding. As of March 31, 2016, the number of securities to be issued upon the exercise of outstanding options, warrants and rights for which we have reserved shares under our Third Amended 2005 Plan is equal to 4,257,931, which includes (i) 1,561,957 shares of common stock issuable upon the exercise of outstanding options (921,240 of which are vested and exercisable), (ii) 25,250 restricted stock units and 87,087 phantom stock units that may be settled in shares of common stock (87,087 of which are vested), (iii) 2,362,131 LTIP units that, upon the satisfaction of certain conditions, are convertible into common units, which may be presented to us for redemption and acquired by us for shares of our common stock (2,183,169 of which are vested) and (iv) 221,506 shares of common stock reservedpublic filings in connection with LTIP units that could be earned pursuant to our 2014 Outperformance Plan, all of which remain subject to performance-based vesting. The weighted average exercise pricepreferred and term of these outstanding options is $88.23 and 3.1 years, respectively. In addition, an aggregate of 212,759 unvested shares of restricted common stock and debt offerings and certain other transactions. Our joint venture partners paid their pro rata share of any joint venture audit fees. Audit fees also include fees for accounting research and consultations.
The following table sets forth information regarding historical awards granted and earned for the 2013 through 2015 period, and the corresponding burn rate, which is defined as the number of shares subject to stock awards granted (or, for awards subject to performance based vesting, earned) in a fiscal year divided by the weighted average common shares outstanding forany services that fiscal year, for each of the last three fiscal years:
2015 | 2014 | 2013 | ||||
Stock Options Granted | 389,836 | 102,050 | 828,100 | |||
Time-based full-value shares and units granted(1) | 258,922 | 289,739 | 538,761 | |||
Performance-based full-value shares and units earned during the year(2) | 155,879 | 907,239 | 50,001 | |||
Total time-based full-value awards granted and performance-based | ||||||
full-value awards earned | 414,801 | 1,196,978 | 588,762 | |||
Adjusted Full-Value Awards Granted/Earned(3) | 1,244,403 | 3,590,934 | 1,766,286 | |||
Total Awards Granted/Earned(4) | 1,634,239 | 3,692,984 | 2,594,386 | |||
Weighted average common shares/units outstanding during the fiscal year(5) | 103,244,000 | 99,288,000 | 95,004,000 | |||
Annual Burn Rate | 1.58% | 3.72% | 2.73% |
The following is a brief summary of the material amendments that are included in the Fourth Amended 2005 Plan:
2016 Proxy Statement 51
APPROVAL OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
The following summary of our Fourth Amended and Restated 2005 Stock Option and Incentive Plan, or the Fourth Amended 2005 Plan, is qualified in its entirety by the specific language of the plan, a copy of which is attached hereto as Appendix A.
Administration
Our Compensation Committee has the authority to administer and interpret the Fourth Amended 2005 Plan, to authorize the granting of awards, to determine the eligibility of a person to receive an award, to determine the number of shares of common stock to be covered by each award, to determine the terms, provisions and conditions of each award, to prescribe the form of instruments evidencing awards and to take any other actions and make all other determinations that it deems necessary or appropriate. Our Compensation Committee may, among other things, establish performance goals that must be met in order for awards to be granted or to vest, or for the restrictions on any such awards to lapse. Nevertheless, grants to members of our Compensation Committee will be made and administered by the Board rather than our Compensation Committee. References below to our Compensation Committee include a reference to the Board for those awards with respect to which the Board acts as administrator. Our Compensation Committee, in its discretion, may delegate to our Chief Executive Officer all or part of our Compensation Committee’s authority and duties with respect to awards to be granted to our employees, subject to certain limitations and guidelines as provided by the Compensation Committee; however, our Compensation Committee may not delegate its authority and duties with respect to awards that have been, or will be, granted to certain of our officers.
Available Shares
Subject to adjustments upon certain corporate transactions or events, awards with respect to up to a maximum of 27,030,000 Fungible Units (the “Fungible Pool Limit”) may be granted under the Fourth Amended 2005 Plan, 9,132,682 of which will remain available for new awards after reserving 767,318 Fungible Units with respect to 205,165 LTIP units that could be earned under our 2014 Outperformance Plan. A Full-Value Award granted after the effective date of the Fourth Amended 2005 Plan will be counted as 3.74 Fungible Units per share subject to such award as opposed to 2.76 Fungible Units per share subject to such award for a Full-Value Award granted after the effective date of the Third Amended 2005 Plan and prior to the effective date of the Fourth Amended 2005 Plan and 1.65 Fungible Units per share subject to such award for a Full-Value Award granted after the effective date of the Second Amended and Restated 2005 Stock Option and Incentive Plan (the “Second Amended 2005 Plan”) and prior to the effective date of the Third Amended 2005 Plan. A Full-Value Award granted prior to the effective date of the Second Amended 2005 Plan that vested or was granted based on the achievement of certain performance goals will be counted as 2.0 Fungible Units per share subject to such award and all other Full-Value Awards granted prior to the effective date of the Second Amended 2005 Plan will be counted as 3.0 Fungible Units per share. Stock options, stock appreciation rights and other awards granted after the effective date of the Fourth Amended 2005 Plan that do not deliver the full-value of the underlying shares and expire five years from the date of grant will be counted as 0.73 Fungible Units per share. Such awards granted after the effective date of the Third Amended 2005 Plan and prior to the effective date of the Fourth Amended 2005 Plan will be counted as 0.77 Fungible Units per share, such
52 SL Green Realty Corp.
APPROVAL OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
awards granted after the effective date of the Second Amended 2005 Plan and prior to the effective date of the Third Amended 2005 Plan will be counted as 0.79 Fungible Units per share and such awards granted prior to the effective date of the Second Amended 2005 Plan will be counted as 0.70 Fungible Units per share. All other awards will be counted as 1.0 Fungible Unit per share.
No award may be granted to any person who, assuming exercise of all options and payment of all awards held by such person, would own or be deemed to own more than 9.8% of the outstanding shares of our common stock. In addition, in any one year, no person may receive awards with respect to more than 700,000 shares of common stock, provided that this limit only applies to awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the IRC and the regulations promulgated thereunder. In addition, notwithstanding anything to the contrary in the Fourth Amended 2005 Plan, the value of all awards awarded under the Fourth Amended 2005 Plan and all other cash compensation paid by the Company as regular compensation to any non-employee director other than the Chairman or Lead Independent Director in any calendar year shall not exceed $500,000, as determined in accordance with FASB ASC 718 (or any successor provision) but excluding the impact of estimated forfeitures related to service-based vesting provisions.
If an option or other award granted under the Fourth Amended 2005 Plan expires or terminates, the common stock subject to any portion of the award that expires or terminates without having been exercised or paid, as the case may be, will again become available for the issuance of additional awards by adding back Fungible Units to the Fourth Amended 2005 Plan using the same ratio that was in effect when the original awards were granted, except that the ratios for awards forfeited after the effective date of the Fourth Amended 2005 Plan shall not be less than the ratios in effect for such Awards as of the date of forfeiture. The following shares will not be added to the Fungible Units authorized for grant under the Fourth Amended 2005 Plan: (i) shares tendered or held back upon exercise of an option or settlement or vesting of an award to cover the exercise price or tax withholding, and (ii) shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof.
Awards Under the Plan
Our key employees, directors, officers, advisors, consultants or other personnel or other persons expected to provide significant services (of a type expressly approved by our Compensation Committee as covered services for these purposes) to us or our subsidiaries are eligible to be granted Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights and other equity-based awards under the Fourth Amended 2005 Plan. Eligibility for awards under the Fourth Amended 2005 Plan generally is determined by our Compensation Committee. As of April 22, 2016, approximately 330 individuals are eligible to participate in the Fourth Amended 2005 Plan.
Stock Options and Stock Appreciation Rights.The terms of specific options, including whether options shall constitute “incentive stock options” for purposes of Section 422(b) of the Internal Revenue Code, will be determined by our Compensation Committee of the Board. The exercise price of an option will be determined by our Compensation Committee and reflected in the applicable award agreement. The exercise price may not be lower than 100% (110% in the case of an incentive stock option granted to a 10% stockholder, if permitted under the Fourth Amended 2005 Plan) of the fair market value of our common stock on the date of grant. Each option will be exercisable after the period or periods specified in the award agreement, which will not exceed ten years from the date of grant. Options will be exercisable at such times and subject to such terms as determined by our Compensation Committee; provided that, unless otherwise specified in an award agreement, options, whether or not otherwise exercisable, may be exercised if the grantee’s service relationship is terminated on account of death or disability. Our Compensation Committee may also grant stock appreciation rights, which are options that permit the recipient to exercise the option without the payment of the exercise price and to receive shares of common stock with a fair market value equal to the excess of the fair market value of the shares with respect to which the option is being exercised over the exercise price of the option with respect to those shares. Any stock appreciation rights granted are subject to the same limitations as other options, including a maximum term of 10 years and an exercise price no lower than 100% of the fair market value of our common stock on the date of grant.
Restricted Stock.A restricted stock award is an award of shares of common stock that is subject to restrictions on transferability and such other restrictions, if any, as the Board or Compensation Committee may impose at the date of grant. Grants of restricted stock may be subject to vesting schedules as determined by our Compensation Committee. The restrictions may lapse separately or in combination at such times, under such circumstances, including, without limitation, (i) a specified period of employment or the satisfaction of one or a combination of the performance goals set forth in Section 11 of the Fourth Amended 2005 Plan (which is attached hereto as Appendix A), or (ii) based on other goals established by our Compensation Committee. Unless otherwise provided in the applicable award agreement, upon a termination of employment or other service for cause or by the grantee for any reason, all shares of restricted stock still subject to restrictions will be forfeited. In addition, unless otherwise provided in an applicable award agreement, a participant granted restricted stock will have all the rights of a stockholder of our company, including the right to vote the shares and the right to receive any cash dividends
2016 Proxy Statement 53
APPROVAL OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
currently. Dividends paid on all restricted stock will be at the same rate and on the same date as on shares of our common stock; provided that award recipients will be required to repay any cash dividends received on awards that are subject to performance-based vesting conditions unless and until such conditions have been met. Holders of restricted stock are prohibitedbe described under “All Other Fees” would be compatible with maintaining Deloitte & Touche LLP’s independence from selling such shares until they vest.
Phantom Shares.Phantom shares will vest as provided in the applicable award agreement. A phantom share represents a right to receive the fair market value of a share of our common stock, or, if provided by our Compensation Committee, the right to receive the fair market value of a share of our common stock in excess of a base value established by our Compensation Committee at the time of grant. Phantom shares generally may be settled in cash or by transfer of shares of common stock (as may be elected by the participant or our Compensation Committee, as may be provided by our Compensation Committee at grant). Unless otherwise provided in the applicable award agreement, subject to elections by the grantee in accordance with the plan, the settlement date with respect to a phantom share is the first day of the month to follow the date on which the phantom share vests. Our Compensation Committee, under certain circumstances, may permit a participant to receive as settlement of the phantom shares installments over a period not to exceed ten years. In addition, our Compensation Committee may establish a program under which distributions with respect to phantom shares may be deferred for additional periods as set forth in the preceding sentence.
Dividend Equivalents.A dividend equivalent is a right to receive (or have credited) the equivalent value (in cash or shares of common stock) of cash distributions made on shares of common stock otherwise subject to an award (e.g., an award of phantom shares); provided, however, that a dividend equivalent right may not be granted in connection with an award of options or stock appreciation rights. Our Compensation Committee may provide that amounts payable in the ordinary course with respect to dividend equivalents will be converted into cash or additional shares of common stock. Our Compensation Committee will establish all other limitations and conditions of awards of dividend equivalents as it deems appropriate. A dividend equivalent granted with respect to an award subject to performance-based vesting conditions may not be payable unless and until such conditions have been met.
Cash-Based Awards. The Fourth Amended 2005 Plan will authorize the granting of awards payable in cash. Each cash-based award will specify a cash-denominated payment amount, formula or payment ranges as determined by our Compensation Committee.
Other Stock-Based Awards.The Fourth Amended 2005 Plan will authorize the granting of (i) other awards based upon the common stock, including shares based upon certain conditions, convertible preferred shares, convertible debentures and other exchangeable or redeemable securities or equity interests, and stock appreciation rights, (ii) limited-partnership or any other membership or ownership interests (which may be expressed as units, such as LTIP units, or otherwise) in a subsidiary or operating or other partnership (or other affiliate of the company), with any shares issued in connection with the conversion of (or other distribution on account of) such interest subject to the Fungible Pool Limitboth management and the other provisions of the Fourth Amended 2005 Plan, and (iii) awards valued by reference to book value, fair value or performance parameters relative to the company or any subsidiary or group of subsidiaries. Any awards subject to performance-based vesting conditions will not give the participant any right to receive cash dividends or dividend equivalent rights unless and until such conditions have been met.
Adjustments in General; Certain Change in Control Provisions
In the event of certain corporate reorganizations or other events, our Compensation Committee generally may make certain adjustments in its discretion to the manner in which the Fourth Amended 2005 Plan operates (including, for example, to the number of Fungible Units and shares of common stock available under the Fourth Amended 2005 Plan), and may otherwise take actions which, in its judgment, are necessary to preserve the rights of plan participants. Upon a change in control (as defined in the Fourth Amended 2005 Plan), our Compensation Committee generally may make such adjustments as it, in its discretion, determines are necessary or appropriate in light of the change in control, if our Compensation Committee determines that the adjustments do not have an adverse economic impact on the participants, and certain other special provisions may apply.
54 SL Green Realty Corp.
APPROVALTABLE OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
Tax Withholding
Participants under the Fourth Amended 2005 Plan are responsible for the payment of any federal, state or local taxes, including those that we are required by law to withhold upon any option exercise or vesting of other awards. Subject to approval by the Compensation Committee, participants may elect to have the tax withholding obligations satisfied either by authorizing the Company to withhold shares of common stock to be issued pursuant to an option exercise or other award, or by transferring to the Company shares of common stock having a value up to the amount of such taxes. Alternatively, the Compensation Committee may provide in an award agreement that a participant is required to satisfy the tax withholding obligation by having shares of common stock withheld by the Company from the shares of common stock otherwise to be received, or require a participant to do so, subject to the participant’s ability to elect to satisfy such liability in cash. Tax withholding may be in excess of the statutory withholding rate if doing so will not result in liability accounting under FASB ASC 718.
Amendment and Termination
We may grant awards under the Fourth Amended 2005 Plan until June 2, 2026, the 10th anniversary of the approval of the Fourth Amended 2005 Plan at the annual meeting. The Board generally may amend our plan as it deems advisable, except that no amendment may adversely affect a participant with respect to an award previously granted unless such amendment is required in order to comply with applicable laws. The Board, in its discretion, may determine to make any plan amendments subject to approval by our stockholders for purposes of complying with applicable stock exchange requirements, ensuring that compensation earned under awards qualifies as performance-based compensation under Section 162(m) of the Internal Revenue Code or ensuring that incentive stock options granted under the Fourth Amended 2005 Plan are qualified under Section 422 of the Internal Revenue Code. The Third Amended 2005 Plan provides that, to the extent required under the rules of any securities exchange or market system on which our common stock was listed, amendments would be subject to stockholder approval.
Repricing
Except in certain circumstances regarding corporate transactions, without prior stockholder approval, neither the Board nor the Compensation Committee may reduce the option price of outstanding options or stock appreciation rights or cancel, exchange, substitute, buyout or surrender outstanding options or stock appreciation rights in exchange for cash, other awards or options or stock appreciation rights with an exercise price that is less than the exercise price of the original options or stock appreciation rights.
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Incentive Stock Options
In general, neither the grant nor the exercise of an incentive stock option will result in taxable income to an option holder or a deduction for us. To receive special tax treatment as an incentive stock option under the Internal Revenue Code as to shares acquired upon exercise of an incentive stock option, an option holder must not dispose of the shares either within two years after the incentive stock option is granted or within one year after the transfer of the shares to the option holder pursuant to exercise of the option. In addition, the option holder must be an employee of ours or of a qualified subsidiary at all times between the date of grant and the date three months (one year in the case of disability) before exercise of the option. (Special rules apply in the case of the death of the option holder.) Incentive stock option treatment under the Internal Revenue Code generally allows any gain resulting from the sale of common stock received upon the exercise of an incentive stock option to be treated as a capital gain to the option holder, but we will not be entitled to a tax deduction. The exercise of an incentive stock option (if the holding period rules described in this paragraph are satisfied), however, will give rise to income includable by the option holder in his or her alternative minimum taxable income for purposes of the alternative minimum tax in an amount equal to the excess of the fair market value of the stock acquired on the date of the exercise of the option over the exercise price.
If the holding period rules noted above are not satisfied, certain gain recognized on the disposition of the shares acquired upon the exercise of an incentive stock option will be characterized as ordinary income. This gain will be equal to the difference between the exercise price and the fair market value of the shares at the time of exercise. (Special rules may apply to disqualifying dispositions where the amount realized is less than the value at exercise.) We generally will be entitled to a deduction for federal income tax purposes equal to the amount of such gain included by an option holder as ordinary income. Any excess of the amount realized upon such disposition over the fair market value at exercise generally will be long-term or short-term capital gain depending on the holding period involved. Notwithstanding the foregoing, if exercise of the option is permitted other than by cash payment of the exercise price, various special tax rules may apply.
2016 Proxy Statement 55
APPROVAL OF OUR FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
Non-Qualified Stock Options
No income will be recognized by an option holder at the time a non-qualified stock option is granted. Ordinary income generally will be recognized by an option holder, however, at the time a non-qualified stock option is exercised in an amount equal to the excess of the fair market value of the underlying common stock on the exercise date over the exercise price. We generally will be entitled to a deduction for federal income tax purposes in the same amount as the amount included in ordinary income by the option holder with respect to his or her non-qualified stock option. Gain or loss on a subsequent sale or other disposition of the shares acquired upon the exercise of a non-qualified stock option will be measured by the difference between the amount realized on the disposition and the tax basis of such shares, and generally will be long-term or short-term capital gain depending on the holding period involved. The tax basis of the shares acquired upon the exercise of any non-qualified stock option will be equalto the sum of the exercise price of the non-qualified stock option and the amount included in income with respect to the option. Notwithstanding the foregoing, in the event that exercise of the option is permitted other than by cash payment of the exercise price, various special tax rules may apply.
The number of shares that may be granted to our executive officers, non-employee directors and other employees is indeterminable at this time, as such grants are subject to the discretion of the Compensation Committee. Of the additional shares to be reserved under the Fourth Amended 2005 Plan, we expect to reserve an aggregate of 205,165 shares in connection with LTIP units that could be earned under our 2014 Outperformance Plan based on the achievement of cumulative performance goals for the three-year period ending August 31, 2017. These LTIP units are convertible into common units, which may be presented to us for redemption and acquired by us for shares of our common stock. To the extent shares are not available to be issued in exchange for common units presented for redemption, we would redeem such common units for cash. If our absolute and relative performance for the three-year performance period applicable to these awards continues to be the same as we experienced from the beginning of the performance period through December 31, 2015, no LTIP units would be earned under our 2014 Outperformance Plan. Information regarding the LTIP units that could be earned by each of our executive officers is set forth above under "Executive Compensation–Compensation Discussion and Analysis–Our Executive Compensation Programs–Long-Term Equity Incentive Awards–Outperformance Plans–2014 Outperformance Plan."
56 SL Green Realty Corp.
In furtherance of the Committee’s ongoing efforts to foster an ownership culture among our senior leadership team, we adopted stock ownership guidelines for our named executive officers and non-employee directors. We have subsequently revised these guidelines to increase the amount of equity in the Company or its operating partnership that our named executive officers are required to own in order to satisfy the guidelines, as set forth below:
New named executive officers and non-employee directors have three years from the commencement of their employment or election to the Board to attain compliance with the stock ownership requirements.
| | | Common Stock | | | Common Stock and Units | | ||||||||||||||||||
Name** | | | Number of Shares Beneficially Owned(1) | | | Percent of Common Stock(2) | | | Number of Shares and Units Beneficially Owned(1) | | | Percent of Common Stock and Units(2) | | ||||||||||||
5% HOLDERS | | | | | | | | | | | | | | | | | | | | | | | | | |
BlackRock, Inc.(3) | | | | | 12,405,640 | | | | | | 18.84% | | | | | | 12,405,640 | | | | | | 17.65% | | |
The Vanguard Group(4) | | | | | 10,324,945 | | | | | | 15.68% | | | | | | 10,324,945 | | | | | | 14.69% | | |
State Street Corporation(5) | | | | | 4,423,621 | | | | | | 6.72% | | | | | | 4,423,621 | | | | | | 6.29% | | |
Directors, Nominees for Director and Named Executive Officers | | | | | | | | | | | | | | | | | | | | | | | | | |
John H. Alschuler(6) | | | | | 585 | | | | | | * | | | | | | 20,371 | | | | | | * | | |
Betsy S. Atkins(7) | | | | | 6,779 | | | | | | * | | | | | | 8,532 | | | | | | * | | |
Carol N. Brown(8) | | | | | — | | | | | | * | | | | | | 9,784 | | | | | | * | | |
Edwin T. Burton, III(9) | | | | | 5,207 | | | | | | * | | | | | | 40,641 | | | | | | * | | |
Matthew J. DiLiberto(10) | | | | | 3,871 | | | | | | * | | | | | | 206,203 | | | | | | * | | |
Lauren B. Dillard(11) | | | | | 12,007 | | | | | | * | | | | | | 46,013 | | | | | | * | | |
Stephen L. Green(12) | | | | | — | | | | | | * | | | | | | 850,723 | | | | | | 1.21% | | |
Craig M. Hatkoff | | | | | 2,070 | | | | | | * | | | | | | 2,070 | | | | | | * | | |
Marc Holliday(13) | | | | | 10,301 | | | | | | * | | | | | | 1,241,834 | | | | | | 1.77% | | |
Andrew S. Levine(14) | | | | | 8,832 | | | | | | * | | | | | | 245,198 | | | | | | * | | |
Andrew Mathias(15) | | | | | 6,189 | | | | | | * | | | | | | 908,501 | | | | | | 1.29% | | |
All Directors and Executive Officers as a Group (11 Persons)(16) | | | | | 55,842 | | | | | | * | | | | | | 3,579,870 | | | | | | 5.08% | | |
| 86 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
| STOCK OWNERSHIP INFORMATION | | | 87 | |
Name** | Amount and Nature of Beneficial Ownership of Common Stock | Percent of Total | ||
The Vanguard Group(1) | 15,989,869 | 15.96% | ||
Cohen & Steers, Inc.(2) | 10,857,734 | 10.84% | ||
BlackRock, Inc.(3) | 8,828,084 | 8.81% | ||
State Street Corporation(4) | 5,647,935 | 5.64% | ||
John H. Alschuler(5) | 35,711 | * | ||
Betsy S. Atkins(6) | 4,478 | * | ||
Edwin Thomas Burton, III(7) | 46,065 | * | ||
Matthew J. DiLiberto(8) | 68,709 | * | ||
Stephen L. Green(9) | 976,755 | * | ||
Craig M. Hatkoff(10) | 21,839 | * | ||
Marc Holliday(11) | 861,929 | * | ||
Andrew S. Levine(12) | 144,893 | * | ||
John S. Levy(13) | 93,190 | * | ||
Andrew Mathias(14) | 836,979 | * | ||
All Directors and Executive Officers as a Group (10 Persons) | 3,090,548 | 3.09% |
2016 Proxy Statement 57
STOCK OWNERSHIP INFORMATION
58 SL Green Realty Corp.
| | | Series I Cumulative Redeemable Preferred Stock | | |||||||||
Name** | | | Number of Shares Beneficially Owned | | | Percent of Outstanding | | ||||||
Matthew J. DiLiberto | | | | | 13,000 | | | | | | * | | |
Marc Holliday | | | | | 111,473 | | | | | | 1.21% | | |
Andrew S. Levine | | | | | 15,000 | | | | | | * | | |
All Directors and Executive Officers as a Group (12 Persons) | | | | | 139,473 | | | | | | 1.52% | | |
STOCK OWNERSHIP INFORMATION
Messrs. Alschuler, Burton, Hatkoff and Levy(i) Mr. Levine who each inadvertently failed to file timely file a Form 4 during fiscal year 2015 relating to the awardgift of shares of phantom stock units and, in the case of Mr. Hatkoff, common stock in connection with their service as directors. Also during fiscal year 2015,on November 17, 2023, which transaction was subsequently reflected on a Form 4 filed on February 7, 2024 and (ii) Mr. Alschuler inadvertentlywho failed to timely file a Form 4 relating to the conversion of phantom stock units into other securities held in an alternative investment account pursuant to the Company’s deferred compensation plan Mr. Hatkoff inadvertently failed to timely fileon March 1, 2024, which transaction was subsequently reflected on a Form 4 relating to the disposition of shares of the Company’s common stock and Messrs. Green and DiLiberto each inadvertently failed to timely file a Form 4 relating to the conversion of LTIP units into shares of the Company’s common stock.2016 Proxy Statement 59
filed on March 12, 2024.
Certain Relationships and Related Party Transactions
Policies and Procedures With Respect to Related Party Transactions
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Committee and the independent directors.
Cleaning/Security/Messenger
Through Alliance Building Services, or Alliance, First Quality Maintenance, L.P., or First Quality, provides cleaning, extermination and related services, Classic Security LLC provides security services, Bright Star Couriers LLC provides messenger services, and Onyx Restoration Works provides restoration services with respect to certain properties owned by us. Alliance is partially owned by Gary Green, a son of Stephen L. Green, the chairmanformer Chairman of the Board.Company, entered into a chairman emeritus agreement in connection with Mr. Green’s retirement as Chairman of the Company and transition into the role of Chairman Emeritus.
| CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | | | 89 | |
Management Fees
S.L. Green Management Corp.,2023, we recorded $38.9 million of rent expense under the lease, including percentage rent, of which $26.2 million was recognized as income as a component of equity in net loss from unconsolidated joint ventures in our consolidated entity, receives property management fees from an entity in which Stephen L. Green owns an interest. We received management fees from such entitystatements of approximately $480,600, $444,300, and $441,100 foroperations. For the yearsyear ended December 31, 2015, 20142022, we recorded $33.0 million of rent expense under the lease, including percentage rent, of which $22.8 million was recognized as income as a component of equity in net loss from unconsolidated joint ventures in our consolidated statements of operations.
60 SL Green Realty Corp.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Marketing Services
A-List Marketing, LLC, or A-List, provided marketing servicesnon-core assets. The property is encumbered by a mortgage of $50.0 million, which matures in December 2024, and is being conveyed for $30.5 million, plus certain fees payable to us. Deena Wolff, a sister of Marc Holliday, our Chief Executive Officer, is the founder of A-List. We recorded approximately $286,900, $221,100, and $293,600 forCompany. The lender has agreed to accept less than the years ended December 31, 2015, 2014 and 2013, respectively.
Other
Amounts due from related parties at December 31, 2015 and 2014 consistedfull principal amount of the following (in thousands):
2015 | 2014 | |||||
Due from joint ventures | $ | 1,334 | $ | 1,254 | ||
Other | 9,316 | 10,481 | ||||
Related party receivables | $ | 10,650 | $ | 11,735 |
2016 Proxy Statement 61
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report to stockholders, by providing access to these documents on the Internet instead of mailing a printed copy of our proxy materials to our stockholders. On or about April 19, 2024, we began mailing a Notice of Internet Availability of Proxy Materials, or the Notice, containing instructions on how to access this proxy statement and our 2023 annual report online, as well as instructions on how to vote.
Annual Meeting?
Annual Meeting?
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| OTHER INFORMATION | | | 91 | |
Annual Meeting.
Annual Meeting.
3. In respect of Proposals 2 and 3, abstentions and broker non-votes are not counted as votes cast, and therefore will have no effect on the votes for these proposals. In
62 SL Green Realty Corp.
OTHER INFORMATION
have the same effect as votes against the proposal. Broker non-votes will not be treated as votes cast and will have no effect on the result of the vote.
| 92 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
have voted?
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during the meeting. See
“HowVote?—
VotingVoting by Proxy. You should submit your proxy or voting instructions as soon as possible. You can vote by valid proxy received by telephone, electronically via the Internet or by mail. The deadline for voting by telephone or electronically via the Internet is 11:59 p.m., Eastern Daylight Time, on June 1, 2016. If voting by mail, you must:
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If your shares are held in “street name” such as in a stock brokerage account, by a bank or other nominee, please follow the instructions you received from your broker or with respect to the voting of your shares.
If you have any questions regarding how to authorize your proxy by telephone or via the Internet, please call MacKenzie Partners, Inc., toll-free at (800) 322-2885 or collect at (212) 929-5500.
Even if you plan to attend the annual meeting, we recommend that you submit a proxy to vote your shares in advance so that your vote will be counted if you later are unable to attend the annual meeting.
Meeting”
above. | | | | | Board Recommendation | | |
Proposal 1: Election of Directors | | | | | FOR | | |
Proposal 2: Approval of an Advisory Resolution Approving the Compensation of Our Named Executive Officers | | | | | FOR | | |
Proposal 3: The Ratification of the Appointment of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm | | | | | FOR | ||
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2016 Proxy Statement 63
| OTHER INFORMATION | | | 93 | |
Who is soliciting my proxy?
This solicitation of proxies is made by and on behalf of the Board. We will pay the cost of the solicitation of proxies. We have retained MacKenzie Partners, Inc. at an aggregate estimated cost of $10,000, plus out-of-pocket expenses, to assist in the solicitation of proxies. In addition to the solicitation of proxies by mail, our directors, officers and employees may solicit proxies personally or by telephone.
64 SL Green Realty Corp.
OTHER INFORMATION
Director Nominations for Inclusion inUnder our 2017 Proxy Materials (Proxy Access)
Access Bylaws
20, 2024.
3, 2025.
| OTHER INFORMATION | | | 95 | |
New York, New YorkApril 22, 2016
2016 Proxy Statement 65
| | | | A-1 | |
2016Proxy Statement A-1
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
SL GREEN REALTY CORP.
FOURTH AMENDED AND RESTATED2005 STOCK OPTION AND INCENTIVE PLAN
SL Green Realty Corp., a Maryland corporation, wishes to attract and retain qualified key employees, Directors, officers, advisors, consultants and other personnel and encourage them to increase their efforts to make the Company’s business more successful whether directly or through its Subsidiaries or other affiliates. In furtherance thereof, the SL Green Realty Corp. Fourth Amended and Restated 2005 Stock Option and Incentive Plan, as amended as of June 2, 2016, is designed to provide equity-based incentives to certain Eligible Persons. Awards under the Plan may be made to Eligible Persons in the form of Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights, Cash-Based Awards or other forms of equity-based compensation.
Whenever used herein, the following terms shall have the meanings set forth below:
“Award,” except where referring to a particular category of grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock Options, Restricted Stock, Phantom Shares, Dividend Equivalent Rights, Cash-Based Awards and other equity-based Awards as contemplated herein.
“Award Agreement” means a written agreement in a form approved by the Committee to be entered into between the Company and the Participant as provided in Section 3. An Award Agreement may be, without limitation, an employment or other similar agreement containing provisions governing grants hereunder, if approved by the Committee for use under the Plan.
“Board” means the Board of Directors of the Company.
“Cause” means, unless otherwise provided in the Participant’s Award Agreement, (i) engaging in (A) willful or gross misconduct or (B) willful or gross neglect; (ii) repeatedly failing to adhere to the directions of superiors or the Board or the written policies and practices of the Company or its Subsidiaries or its affiliates; (iii) the commission of a felony or a crime of moral turpitude, dishonesty, breach of trust or unethical business conduct, or any crime involving the Company or its Subsidiaries, or any affiliate thereof; (iv) fraud, misappropriation or embezzlement; (v) any illegal act detrimental to the Company its Subsidiaries or any affiliate thereof; (vi) repeated failure to devote substantially all of the Participant’s business time and efforts to the Company or its Subsidiaries, or any affiliate thereof, if required by the Participant’s employment agreement; or (vii) the Participant’s failure adequately and competently to perform his duties after receiving notice from the Company or its Subsidiaries, or any affiliate thereof specifically identifying the manner in which the Participant has failed to perform; provided, however, that, if at any particular time the Participant is subject to an effective employment agreement or consulting agreement with the Company, then, in lieu of the foregoing definition, “Cause” shall at that time have such meaning as may be specified in such employment agreement.
“Cash-Based Awards” means an Award under Section 10 of the Plan that is payable in cash.
“Change in Control” means:
(i) any “person,” including a “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, together with all “affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Exchange Act) of such person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of either (A) the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Board (“Voting Securities”) or (B) the then outstanding shares of all classes of stock of the Company (in either such case other than as a result of the acquisition of securities directly from the Company);
(ii) the members of the Board at the beginning of any consecutive 24-calendar-month period commencing on or after the initial effective date of the Plan (the “Incumbent Directors”) cease for any reason other than death including without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the members of the Board; provided that any person becoming a director of the Company whose election or nomination was approved by a vote of at least a majority of the Incumbent Directors shall, for purposes hereof, be considered an Incumbent Director;
(iii) the consummation of (A) any consolidation or merger of the Company or any subsidiary that would result in the Voting Securities outstanding immediately prior to such merger or consolidation representing (either by remaining outstanding or by being converted into voting securities of the surviving entity) less
A-2 SL Green Realty Corp.
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
than 50% of the total voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation or ceasing to have the power to elect at least a majority of the board of directors or other governing body of such surviving entity or (2) any sale, lease, exchange or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company, if the stockholders of the Company and unitholders of SL Green Operating Partnership, L.P. taken as a whole and considered as one class immediately before such transaction own, immediately after consummation of such transaction, equity securities and partnership units possessing less than 50% of the surviving or acquiring company and partnership taken as a whole; or
(iv) the stockholders of the Company shall approve any plan or proposal for the liquidation or dissolution of the Company.
Notwithstanding the foregoing clause (i), an event described in clause (i) shall not be a Change in Control if such event occurs solely as the result of an acquisition of securities by the Company which, by reducing the number of shares of stock or other Voting Securities outstanding, increases (x) the proportionate number of shares of stock of the Company beneficially owned by any “person” (as defined above) to 25% or more of the shares of stock then outstanding or (y) the proportionate voting power represented by the Voting Securities beneficially owned by any “person” (as defined above) to 25% or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any “person” referred to in clause (x) or (y) of this sentence shall thereafter become the beneficial owner of any additional stock of the Company or other Voting Securities (other than pursuant to a share split, stock dividend, or similar transaction), then a Change in Control shall be deemed to have occurred for purposes of the foregoing clause (i).
Notwithstanding the foregoing, no event or condition shall constitute a Change in Control to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Change in Control to the maximum extent possible (e.g., if applicable, in regard of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Compensation Committee of the Board.
“Common Stock” means the shares of common stock of the Company as constituted on the effective date of the Plan, and any other shares into which such common stock shall thereafter be changed by reason of a recapitalization, merger, consolidation, split-up, combination, exchange of shares or the like.
“Company” means SL Green Realty Corp., a Maryland corporation.
“Director” means a non-employee director of the Company or its Subsidiaries.
“Disability” means, unless otherwise provided by the Committee in the Participant’s Award Agreement, a disability which renders the Participant incapable of performing all of his or her material duties for a period of at least 150 consecutive or non-consecutive days during any consecutive twelve-month period. Notwithstanding the foregoing, no circumstances or condition shall constitute a Disability to the extent that, if it were, a 20% tax would be imposed under Section 409A of the Code; provided that, in such a case, the event or condition shall continue to constitute a Disability to the maximum extent possible (e.g., if applicable, in regard of vesting without an acceleration of distribution) without causing the imposition of such 20% tax.
“Dividend Equivalent Right” means a right awarded under Section 8 of the Plan to receive (or have credited) the equivalent value of dividends paid on Common Stock.
“Eligible Person” means a key employee, Director, officer, advisor, consultant or other personnel of the Company and its Subsidiaries or other person expected to provide significant services (of a type expressly approved by the Committee as covered services for these purposes) to the Company or its Subsidiaries.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” per Share as of a particular date means (i) if Shares are then listed on a national stock exchange, the closing sales price per Share on the exchange for the last preceding date on which there was a sale of Shares on such exchange, as determined by the Committee, (ii) if Shares are not then listed on a national stock exchange but are then traded on an over-the-counter market, the average of the closing bid and asked prices for the Shares in such over-the-counter market for the last preceding date on which there was a sale of such Shares in such market, as determined by the
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
Committee, or (iii) if Shares are not then listed on a national stock exchange or traded on an over-the-counter market, such value as the Committee in its discretion may in good faith determine; provided that, where the Shares are so listed or traded, the Committee may make such discretionary determinations where the Shares have not been traded for 10 trading days.
“Full-Value Award” means an Award other than an Option, Stock Appreciation Right or other Award that does not deliver the full value at grant thereof of the underlying shares.
“Fungible Pool Unit” shall be the measuring unit used for purposes of the Plan, as specified in Section 4, to determine the number of Shares which may be subject to Awards hereunder, which shall consist of Shares in the proportions (a) with respect to Awards granted prior to June 15, 2010 (ranging from 0.7 to 3.0), (b) with respect to Awards granted on or after June 15, 2010 but before June 13, 2013 (ranging from 0.79 to 1.65), (c) with respect to Awards granted on or after June 13, 2013 but before June 2, 2016 (ranging from 0.77 to 2.76) and (d) with respect to Awards granted on or after June 2, 2016 (ranging from 0.73 to 3.74, as set forth in Section 4(a).
“Grantee” means an Eligible Person granted Restricted Stock, Phantom Shares, Dividend Equivalent Rights or such other equity-based Awards as may be granted pursuant to Section 9.
“Incentive Stock Option” means an “incentive stock option” within the meaning of Section 422(b) of the Code.
“Non-Qualified Stock Option” means an Option which is not an Incentive Stock Option.
“Option” means the right to purchase, at a price and for the term fixed by the Committee in accordance with the Plan, and subject to such other limitations and restrictions in the Plan and the applicable Award Agreement, a number of Shares determined by the Committee.
“Optionee” means an Eligible Person to whom an Option is granted, or the Successors of the Optionee, as the context so requires.
“Option Price” means the price per Share, determined by the Board or the Committee, at which an Option may be exercised.
“Participant” means a Grantee or Optionee.
“Performance Criteria” means the following business criteria (or any combination thereof) with respect to one or more of the Company, any Subsidiary or any division or operating unit thereof: (i) pre-tax income, (ii) after-tax income, (iii) net income (meaning net income as reflected in the Company’s financial reports for the applicable period, on an aggregate, diluted and/or per share basis), (iv) operating income, (iv) cash flow, (v) earnings per share, (vi) return on equity, (vii) return on invested capital or assets, (viii) cash and/or funds available for distribution, (ix) appreciation in the fair market value of the Common Stock, (x) return on investment, (xi) total return to shareholders, (xii) net earnings growth, (xiii) stock appreciation (meaning an increase in the price or value of the Common Stock after the date of grant of an award and during the applicable period), (xiv) related return ratios, (xv) increase in revenues, (xvi) net earnings, (xvii) changes (or the absence of changes) in the per share or aggregate market price of the Company’s Common Stock, (xviii) number of securities sold, (xix) earnings before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in the Company’s financial reports for the applicable period, (xx) total revenue growth (meaning the increase in total revenues after the date of grant of an award and during the applicable period, as reflected in the Company’s financial reports for the applicable period), (xxi) the Company’s published ranking against its peer group of real estate investment trusts based on total shareholder return, and (xxii) FFO.
“Performance Goals” means (i) 7% FFO growth, (ii) 10% total return to shareholders and (iii) Total return to shareholders in the top one-third of the “peer group”. For purposes of this definition, “peer group” shall be Alexandria Real Estate Equities, Inc., American Financial Realty Trust, Boston Properties, Inc., Brandywine Realty Trust, Corporate Office Properties Trust, Crescent Real Estate Equities Company, Douglas Emmett, Duke Realty Corporation, Highwoods Properties, Inc., HRPT Properties, Kilroy Realty Corporation, Liberty Property Trust, Mack-Cali Realty Corporation, Maguire Properties, Parkway Properties, SL Green Realty Corp., and Washington REIT. Such “peer group” may not change with respect to any particular Award.
“Phantom Share” means a right, pursuant to the Plan, of the Grantee to payment of the Phantom Share Value.
“Phantom Share Value,” per Phantom Share, means the Fair Market Value of a Share of Common Stock, or, if so provided by the Committee, such Fair Market Value to the extent in excess of a base value established by the Committee at the time of grant.
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
“Plan” means the Company’s Fourth Amended and Restated 2005 Stock Option and Incentive Plan, as amended and restated on June 2, 2016, as set forth herein and as the same may from time to time be amended.
“Restricted Stock” means an award of Shares that are subject to restrictions hereunder.
“Retirement” means, unless otherwise provided by the Committee in the Participant’s Award Agreement, the Termination of Service (other than for Cause) of a Participant on or after the Participant’s attainment of age 65 or on or after the Participant’s attainment of age 55 with five consecutive years of service with the Company and or its Subsidiaries or its affiliates.
“Securities Act” means the Securities Act of 1933, as amended.
“Settlement Date” means the date determined under Section 7.4(c).
“Shares” means shares of Common Stock of the Company.
“Stock Appreciation Right” means the right to settle an Option as provided for in Section 5.7.
“Subsidiary” means any corporation (other than the Company) that is a “subsidiary corporation” with respect to the Company under Section 424(f) of the Code. In the event the Company becomes a subsidiary of another company, the provisions hereof applicable to subsidiaries shall, unless otherwise determined by the Committee, also be applicable to any company that is a “parent corporation” with respect to the Company under Section 424(e) of the Code.
“Successor of the Optionee” means the legal representative of the estate of a deceased Optionee or the person or persons who shall acquire the right to exercise an Option by bequest or inheritance or by reason of the death of the Optionee.
“Termination of Service” means a Participant’s termination of employment or other service, as applicable, with the Company and its Subsidiaries.
2.EFFECTIVE DATE AND TERMINATION OF PLAN.
The effective date of the Plan is June 2, 2016. The amendments reflected in this Fourth Amended and Restated 2005 Stock Option and Incentive Plan shall not become effective unless and until it is approved by the requisite percentage of the holders of the Common Stock of the Company. The Plan shall terminate on, and no Award shall be granted hereunder on or after, the 10-year anniversary of the approval of this Fourth Amended and Restated 2005 Stock Option and Incentive Plan by the shareholders of the Company; provided, that no Incentive Stock Options shall be granted hereunder on or after the 10-year anniversary of the approval of this Fourth Amended and Restated 2005 Stock Option and Incentive Plan by the Board; provided further that the Board may at any time prior to that date terminate the Plan; and provided, further, that all Awards made under the Plan prior to a Plan termination shall remain in effect until such Awards have been satisfied or terminated in accordance with the terms and provisions of the Plan and the applicable Award Agreement.
(a) The Plan shall be administered by the Committee appointed by the Board. Unless otherwise determined by the Board, the Committee, upon and after such time as it is covered in Section 16 of the Exchange Act, shall consist of at least two individuals each of whom shall be a “nonemployee director” as defined in Rule 16b-3 as promulgated by the Securities and Exchange Commission (“Rule 16b-3”) under the Exchange Act and shall, at such times as the Company is subject to Section 162(m) of the Code (to the extent relief from the limitation of Section 162(m) of the Code is sought with respect to Awards), qualify as “outside directors” for purposes of Section 162(m) of the Code; provided that no action taken by the Committee (including without limitation grants) shall be invalidated because any or all of the members of the Committee fails to satisfy the foregoing requirements of this sentence. If and to the extent applicable, no member of the Committee may act as to matters under the Plan specifically relating to such member. Notwithstanding the other foregoing provisions of this Section 3(a), any Award under the Plan to a person who is a member of the Committee shall be made and administered by the Board. If no Committee is designated by the Board to act for these purposes, the Board shall have the rights and responsibilities of the Committee hereunder and under the Award Agreements.
(b) Subject to the provisions of the Plan, the Committee shall in its discretion (i) authorize the granting of Awards to Eligible Persons; and (ii) determine the eligibility of Eligible Persons to receive an Award, as well as determine the number of Shares to be covered under any Award Agreement, considering the position and responsibilities of the Eligible Persons, the nature and value to the Company of the Eligible Person’s present and potential contribution to the success of the Company whether directly or through its Subsidiaries and such other factors as the Committee may deem relevant.
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
(c) The Award Agreement shall contain such other terms, provisions and conditions not inconsistent herewith as shall be determined by the Committee. In the event that any Award Agreement or other agreement hereunder provides (without regard to this sentence) for the obligation of the Company or any affiliate thereof to purchase or repurchase Shares from a Participant or any other person, then, notwithstanding the provisions of the Award Agreement or such other agreement, such obligation shall not apply to the extent that the purchase or repurchase would not be permitted under governing state law. The Participant shall take whatever additional actions and execute whatever additional documents the Committee may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Participant pursuant to the express provisions of the Plan and the Award Agreement.
(d) The Committee may provide, in its discretion, that (i) all stock issued hereunder be initially maintained in separate brokerage account for the Participant at a brokerage firm selected by, and pursuant to an arrangement with, the Company; and (ii) in the case of vested Shares, the Participant may move such Shares to another brokerage account of the Participant’s choosing or request that a stock certificate be issued and delivered to him or her.
(e) The Committee, in its discretion, may delegate to the Chief Executive Officer of the Company all or part of the Committee’s authority and duties with respect to awards, including, without limitation, the granting of awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Act and who are not and are not expected to be “covered employees” within the meaning of Section 162(m) of the Code. Any such delegation by the Committee may, in the sole discretion of the Committee, include a limitation as to the amount of awards that may be awarded during the period of the delegation and may contain guidelines as to the determination of the option exercise price, or price of other awards and the vesting criteria. The Committee may revoke or amend the terms of a delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate that were consistent with the terms of the Plan.
4.SHARES AND UNITS SUBJECT TO THE PLAN.
(a) Subject to adjustments as provided in Section 15, the total number of Shares subject to Awards granted under the Plan, in the aggregate, may not exceed 27,030,000 (the “Fungible Pool Limit”). Each Share issued or to be issued in connection with Full-Value Awards that vest or are granted based on the achievement of the Performance Goals granted prior to June 15, 2010 but before June 13, 2013 shall be counted against the Fungible Pool Limit as 2.0 Fungible Pool Units. Each Share issued or to be issued in connection with any other Full-Value Awards granted prior to June 15, 2010 but before June 13, 2013 shall be counted against the Fungible Pool Limit as 3.0 Fungible Pool Units. Each Share issued or to be issued in connection with any Full-Value Awards granted on or after June 15, 2010 but before June 13, 2013 shall be counted against the Fungible Pool Limit as 1.65 Fungible Pool Units. Each Share issued or to be issued in connection with any Full-Value Awards granted on or after June 13, 2013 but before June 2, 2016 shall be counted against the Fungible Pool Limit as 2.76 Fungible Pool Units. Each Share issued or to be issued in connection with any Full-Value Awards granted on or after June 2, 2016 shall be counted against the Fungible Pool Limit as 3.74 Fungible Pool Units. Options, Stock Appreciation Rights and other Awards that do not deliver the full value at grant thereof of the underlying Shares and that expire 10 years from the date of grant shall be counted against the Fungible Pool Limit as 1 Fungible Pool Unit. Options, Stock Appreciation Rights and other Awards that do not deliver the full value at grant thereof of the underlying Shares and that expire five years from the date of grant (i) granted prior to June 15, 2010 shall be counted against the Fungible Pool Limit as 0.7 of a Fungible Pool Unit, (ii) granted on or after June 15, 2010 but before June 13, 2013 shall be counted against the Fungible Pool Limit as 0.79 of a Fungible Pool Unit, (iii) granted on or after June 13, 2013 but before June 2, 2016 shall be counted against the Fungible Pool Limit as 0.77 of a Fungible Pool Unit and (iv) granted on or after June 2, 2016 shall be counted against the Fungible Pool Limit as 0.73 of a Fungible Pool Unit. (For these purposes, the number of Shares taken into account with respect to a Stock Appreciation Right shall be the number of Shares underlying the Stock Appreciation Rights at grant (i.e., not the final number of Shares delivered upon exercise of the Stock Appreciation Rights).) Shares that have been granted as Restricted Stock or that have been reserved for distribution in payment for Options, Phantom Shares or other equity-based Awards but are later forfeited or for any other reason are not payable under the Plan may again be made the subject of Awards under the Plan. Such Shares shall be added back to the Plan using the same ratio as in effect when such Awards were granted, except that the ratios for Awards forfeited after June 2, 2016 shall not be less than the ratios in effect for such Awards as of the date of forfeiture. The following Shares shall not be added to the Shares authorized for grant under the Plan: (i) Shares tendered or held back upon exercise of an Option or settlement or vesting of an Award to cover the exercise price or tax withholding, and (ii) shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right upon exercise thereof.
(b) Shares subject to Dividend Equivalent Rights, other than Dividend Equivalent Rights based directly on the dividends payable with respect to Shares subject to Options or the dividends payable on a number of Shares corresponding to the number of Phantom Shares awarded, shall be subject to the limitation of Section 4(a). If any Phantom Shares, Dividend Equivalent Rights or other equity-based Awards under Section 9 are paid out in cash, then, notwithstanding the first sentence of Section 4(a) above (but subject to the second sentence thereof) the underlying Shares may again be made the subject of Awards under the Plan.
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
(c) The certificates for Shares issued hereunder may include any legend which the Committee deems appropriate to reflect any rights of first refusal or other restrictions on transfer hereunder or under the Award Agreement, or as the Committee may otherwise deem appropriate.
(d) No award may be granted under the Plan to any person who, assuming exercise of all options and payment of all awards held by such person, would own or be deemed to own more than 9.8% of the outstanding shares of Common Stock. Subject to adjustments as provided in Section 15, no Eligible Person shall be granted Awards in any one year covering more than 700,000 Shares (with each Share subject to an Award being counted as one Share, notwithstanding the type of Award or the fact that it may count as more or less than one Fungible Pool Unit for purposes of Section 4(a)), it being expressly contemplated that Awards in exclusively one category (e.g., Options) can (but need not) be used in the discretion of the Committee to reach the limitation set forth in this sentence; provided that this limit shall only apply to Awards that are intended to qualify as “performance-based compensation” under Section 162(m) of the Code and the regulations promulgated thereunder.
(e) Notwithstanding anything to the contrary in this Plan, the value of all Awards awarded under this Plan and all other cash compensation paid by the Company as regular compensation to any Director other than the Chairman or the Lead Director in any calendar year shall not exceed $500,000. For the purpose of this limitation, the value of any Award shall be its grant date fair value, as determined in accordance with FASB ASC 718 (or any successor provision) but excluding the impact of estimated forfeitures related to service-based vesting provisions.
5.PROVISIONS APPLICABLE TO STOCK OPTIONS.
5.1Grant of Option.
Subject to the other terms of the Plan, the Committee (or, as expressly permitted by Section 3, the Chief Executive Officer) shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) determine and designate from time to time those Eligible Persons to whom Options are to be granted and the number of Shares to be optioned to each Eligible Person; (ii) determine whether to grant Incentive Stock Options or to grant Non-Qualified Stock Options, or both (to the extent that any Option does not qualify as an Incentive Stock Option, it shall constitute a separate Non-Qualified Stock Option); provided that Incentive Stock Options may only be granted to employees; (iii) determine the time or times when and the manner and condition in which each Option shall be exercisable and the duration of the exercise period; (iv) designate each Option as one intended to be an Incentive Stock Option or as a Non-Qualified Stock Option; and (v) determine or impose other conditions to the grant or exercise of Options under the Plan as it may deem appropriate.
5.2Option Price.
The Option Price shall be determined by the Committee on the date the Option is granted and reflected in the Award Agreement, as the same may be amended from time to time. The Option Price shall not be less than 100% of the Fair Market Value of a Share on the day the Option is granted. Any particular Award Agreement may provide for different exercise prices for specified amounts of Shares subject to the Option.
5.3Period of Option and Vesting.
(a) Unless earlier expired, forfeited or otherwise terminated, each Option shall expire in its entirety upon the 10th anniversary of the date of grant or shall have such other term (which may be shorter, but not longer) as is set forth in the applicable Award Agreement (except that, in the case of an individual described in Section 422(b)(6) of the Code (relating to certain 10% owners) who is granted an Incentive Stock Option, the term of such Option shall be no more than five years from the date of grant). The Option shall also expire, be forfeited and terminate at such times and in such circumstances as otherwise provided hereunder or under the Award Agreement.
(b) Each Option, to the extent that the Optionee has not had a Termination of Service and the Option has not otherwise lapsed, expired, terminated or been forfeited, shall first become exercisable according to the terms and conditions set forth in the Award Agreement, as determined by the Committee at the time of grant. Unless otherwise provided in the Award Agreement, no Option (or portion thereof) shall ever be exercisable if the Optionee has a Termination of Service before the time at which such Option (or portion thereof) would otherwise have become exercisable, and any Option that would otherwise become exercisable after such Termination of Service shall not become exercisable and shall be forfeited upon such termination. Upon and after the death of an Optionee, such Optionee’s Options, if and to the extent otherwise exercisable hereunder or under the applicable Award Agreement after the Optionee’s death, may be exercised by the Successors of the Optionee.
2016Proxy Statement A-7
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
5.4Exercisability Upon and After Termination of Optionee.
(a) Subject to provisions of the Award Agreement, in the event the Optionee has a Termination of Service other than by the Company or its Subsidiaries for Cause, or other than by reason of death or Disability, no exercise of an Option may occur after the expiration of the three-month period to follow the termination, or if earlier, the expiration of the term of the Option as provided under Section 5.3(a); provided that, if the Optionee should die after the Termination of Service, such termination being for a reason other than Cause or Disability, but while the Option is still in effect, the Option (if and to the extent otherwise exercisable by the Optionee at the time of death) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the date on which the term of the Option expires in accordance with Section 5.3(a).
(b) Subject to provisions of the Award Agreement, in the event the Optionee has a Termination of Service on account of death or Disability, the Option (whether or not otherwise exercisable) may be exercised until the earlier of (i) one year from the date of the Termination of Service of the Optionee, or (ii) the date on which the term of the Option expires in accordance with Section5.3.
(c) Notwithstanding any other provision hereof, unless otherwise provided in the Award Agreement, if the Optionee has a Termination of Service by the Company for Cause, the Optionee’s Options, to the extent then unexercised, shall thereupon cease to be exercisable and shall be forfeited forthwith.
5.5Exercise of Options.
(a) Subject to vesting, restrictions on exercisability and other restrictions provided for hereunder or otherwise imposed in accordance herewith, an Option may be exercised, and payment in full of the aggregate Option Price made, by an Optionee only by written notice (in the form prescribed by the Committee) to the Company specifying the number of Shares to be purchased.
(b) Without limiting the scope of the Committee’s discretion hereunder, the Committee may impose such other restrictions on the exercise of Incentive Stock Options (whether or not in the nature of the foregoing restrictions) as it may deem necessary or appropriate.
5.6Payment.
(a) The aggregate Option Price shall be paid in full upon the exercise of the Option. Payment must be made by one of the following methods:
(i) a certified or bank cashier’s check or wire transfer;
(ii) subject to Section 13(e), the proceeds of a Company loan program or third-party sale program or a notice acceptable to the Committee given as consideration under such a program, in each case if permitted by the Committee in its discretion, if such a program has been established and the Optionee is eligible to participate therein;
(iii) if approved by the Committee in its discretion, Shares of previously owned Common Stock, which have been previously owned for more than six months, having an aggregate Fair Market Value on the date of exercise equal to the aggregate Option Price; or
(iv) by any combination of such methods of payment or any other method acceptable to the Committee in its discretion.
(b) Except in the case of Options exercised by certified or bank cashier’s check, the Committee may impose limitations and prohibitions on the exercise of Options as it deems appropriate, including, without limitation, any limitation or prohibition designed to avoid accounting consequences which may result from the use of Common Stock as payment upon exercise of an Option.
(c) The Committee may provide that no Option may be exercised with respect to any fractional Share. Any fractional Shares resulting from an Optionee’s exercise that is accepted by the Company shall in the discretion of the Committee be paid in cash.
5.7Stock Appreciation Rights.
The Committee, in its discretion, may also permit (taking into account, without limitation, the application of Section 409A of the Code, as the Committee may deem appropriate) the Optionee to elect to exercise an Option by receiving a combination of Shares and cash, or, in the discretion of the Committee, either Shares or solely in cash, with an aggregate Fair
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
Market Value (or, to the extent of payment in cash, in an amount) equal to the excess of the Fair Market Value of the Shares with respect to which the Option is being exercised over the aggregate Option Price, as determined as of the day the Option is exercised. Such tandem Stock Appreciation Right shall expire at the same time as the Option to which it pertains expires.
5.8Exercise by Successors.
An Option may be exercised, and payment in full of the aggregate Option Price made, by the Successors of the Optionee only by written notice (in the form prescribed by the Committee) to the Company specifying the number of Shares to be purchased. Such notice shall state that the aggregate Option Price will be paid in full, or that the Option will be exercised as otherwise provided hereunder, in the discretion of the Company or the Committee, if and as applicable.
5.9Nontransferability of Option.
Each Option granted under the Plan shall be nontransferable by the Optionee except by will or the laws of descent and distribution of the state wherein the Optionee is domiciled at the time of his death; provided, however, that the Committee may (but need not) permit other transfers, where the Committee concludes that such transferability (i) does not result in accelerated U.S. federal income taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Section 422(b) of the Code, and (iii) is otherwise appropriate and desirable; and provided, further, that in no event may an Option be transferred by the Optionee for consideration without shareholder approval.
5.10Certain Incentive Stock Option Provisions.
(a) The aggregate Fair Market Value, determined as of the date an Option is granted, of the Common Stock for which any Optionee may be awarded Incentive Stock Options which are first exercisable by the Optionee during any calendar year under the Plan (or any other stock option plan required to be taken into account under Section 422(d) of the Code) shall not exceed $100,000.
(b) If Shares acquired upon exercise of an Incentive Stock Option are disposed of in a disqualifying disposition within the meaning of Section 422 of the Code by an Optionee prior to the expiration of either two years from the date of grant of such Option or one year from the transfer of Shares to the Optionee pursuant to the exercise of such Option, or in any other disqualifying disposition within the meaning of Section 422 of the Code, such Optionee shall notify the Company in writing as soon as practicable thereafter of the date and terms of such disposition and, if the Company (or any affiliate thereof) thereupon has a tax-withholding obligation, shall pay to the Company (or such affiliate) an amount equal to any withholding tax the Company (or affiliate) is required to pay as a result of the disqualifying disposition.
(c) The Option Price with respect to each Incentive Stock Option shall not be less than 100%, or 110% in the case of an individual described in Section 422(b)(6) of the Code (relating to certain 10% owners), of the Fair Market Value of a Share on the day the Option is granted.
6.PROVISIONS APPLICABLE TO RESTRICTED STOCK.
6.1Grant of Restricted Stock.
(a) In connection with the grant of Restricted Stock, whether or not performance goals (as provided for under Section 11) apply thereto, the Committee shall establish one or more vesting periods with respect to the shares of Restricted Stock granted, the length of which shall be determined in the discretion of the Committee. Subject to the provisions of this Section 6, the applicable Award Agreement and the other provisions of the Plan, restrictions on Restricted Stock shall lapse if the Grantee satisfies all applicable employment or other service requirements through the end of the applicable vesting period. Nothing in this Section 6 shall limit the Committee’s authority, and the Committee is expressly authorized, to grant Shares which are fully vested upon grant (and for which there is no period of forfeiture), and which are subject to the rules of this Section 6.
(b) Subject to the other terms of the Plan, the Committee may, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the granting of Restricted Stock to Eligible Persons; (ii) provide a specified purchase price for the Restricted Stock (whether or not the payment of a purchase price is required by any state law applicable to the Company); (iii) determine the restrictions applicable to Restricted Stock and (iv) determine or impose other conditions, including any applicable performance goals, to the grant of Restricted Stock under the Plan as it may deem appropriate.
6.2Certificates.
(a) Unless otherwise provided by the Committee, each Grantee of Restricted Stock shall be issued a stock certificate in respect of Shares of Restricted Stock awarded under the Plan. Each such certificate shall be registered in the name of the Grantee. Without limiting the generality of Section 4(c), the certificates for Shares of Restricted Stock issued hereunder may include any legend which the Committee deems appropriate to reflect any restrictions on transfer hereunder
2016 Proxy Statement A-9
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
or under the Award Agreement, or as the Committee may otherwise deem appropriate, and, without limiting the generality of the foregoing, shall bear a legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the SL Green Realty Corp. Fourth Amended and Restated 2005 Stock Option and Incentive Plan and an Award Agreement entered into between the registered owner and SL Green Realty Corp. Copies of such Plan and Award Agreement are on file in the offices of SL Green Realty Corp., at 420 Lexington Avenue, New York, New York 10170.
(b) The Committee may require that any stock certificates evidencing such Shares be held in custody by the Company until the restrictions hereunder shall have lapsed, and that, as a condition of any Award of Restricted Stock, the Grantee shall have delivered to the Company a stock power, endorsed in blank, relating to the stock covered by such Award. If and when such restrictions so lapse, the stock certificates shall be delivered by the Company to the Grantee or his or her designee as provided in Section 6.3 (and the stock power shall be so delivered or shall be discarded).
6.3Restrictions and Conditions.
Unless otherwise provided by the Committee, the Shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:
(i) Subject to the provisions of the Plan and the Award Agreements, during a period commencing with the date of such Award and ending on the date the period of forfeiture with respect to such Shares lapses, the Grantee shall not be permitted voluntarily or involuntarily to sell, transfer, pledge, anticipate, alienate, encumber or assign Shares of Restricted Stock awarded under the Plan (or have such Shares attached or garnished). Subject to the provisions of the Award Agreements and clause (iii) below, the period of forfeiture with respect to Shares granted hereunder shall lapse as provided in the applicable Award Agreement. Notwithstanding the foregoing, unless otherwise expressly provided by the Committee, the period of forfeiture with respect to such Shares shall only lapse as to whole Shares.
(ii) Except as provided in the foregoing clause (i), below in this clause (ii), in Section 15, or as otherwise provided in the applicable Award Agreement, the Grantee shall have, in respect of the Shares of Restricted Stock, all of the rights of a shareholder of the Company, including the right to vote the Shares and the right to receive any cash dividends currently; provided, however that, if provided in an Award Agreement, cash dividends on such Shares shall (A) be held by the Company (unsegregated as a part of its general assets) until the period of forfeiture lapses (and forfeited if the underlying Shares are forfeited), and paid over to the Grantee (without interest) as soon as practicable after such period lapses (if not forfeited), or (B) treated as may otherwise be provided in an Award Agreement. Certificates for Shares (not subject to restrictions) shall be delivered to the Grantee or his or her designee, at the request thereof, promptly after, and only after, the period of forfeiture shall lapse without forfeiture in respect of such Shares of Restricted Stock.
(iii) Except as otherwise provided in the applicable Award Agreement, if the Grantee has a Termination of Service by the Company and its Subsidiaries for Cause, or by the Grantee for any reason, during the applicable period of forfeiture, then (A) all Shares still subject to restriction shall thereupon, and with no further action, be forfeited by the Grantee, and (B) in the event the Grantee has paid a cash purchase price for the forfeited Shares, the Company shall pay to the Grantee as soon as practicable (and in no event more than 30 days) after such termination an amount equal to the lesser of (x) the amount paid by the Grantee (if any) for such forfeited Restricted Stock as contemplated by Section 6.1, and (y) the Fair Market Value on the date of termination of the forfeited Restricted Stock.
Notwithstanding the foregoing, cash dividends on Shares of Restricted Stock that remain subject to potential forfeiture due to failure to meet performance-based conditions (i.e., conditions other than the continued service or employment of the Grantee through a certain date) must be retained by, or repaid by the Grantee to, the Company; provided that, to the extent provided for in the applicable Award Agreement or by the Committee, an amount equal to such cash dividends retained or repaid by the Grantee may be paid to the Grantee upon the lapsing of such performance-based conditions with respect to such shares.
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
7.PROVISIONS APPLICABLE TO PHANTOM SHARES.
7.1Grant of Phantom Shares.
Subject to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the applicable Award Agreement: (i) authorize the granting of Phantom Shares to Eligible Persons and (ii) determine or impose other conditions to the grant of Phantom Shares under the Plan as it may deem appropriate.
7.2Term.
The Committee may provide in an Award Agreement that any particular Phantom Share shall expire at the end of a specified term.
7.3Vesting.
Phantom Shares shall vest as provided in the applicable Award Agreement.
7.4Settlement of Phantom Shares.
(a) Each vested and outstanding Phantom Share shall be settled by the transfer to the Grantee of one Share; provided that the Committee at the time of grant may provide that a Phantom Share may be settled (i) in cash at the applicable Phantom Share Value or (ii) in cash or by transfer of Shares as elected by the Grantee in accordance with procedures established by the Committee (taking into account, without limitation, Section 409A of the Code, as the Committee may deem appropriate).
(b) Phantom Shares shall be settled with a single-sum payment by the Company; provided that, with respect to Phantom Shares of a Grantee which have a common Settlement Date, the Committee may permit the Grantee to elect in accordance with procedures established by the Committee (taking into account, without limitation, Section 409A of the Code, as the Committee may deem appropriate) to receive installment payments over a period not to exceed 10 years.
(c) (i) Unless otherwise provided in the applicable Award Agreement, the “Settlement Date” with respect to a Phantom Share is as soon as practicable after (but not later than the first day of the month to follow) the date on which the Phantom Share vests; provided that a Grantee may elect, in accordance with procedures to be established by the Committee, that such Settlement Date will be deferred as elected by the Grantee to as soon as practicable after (but not later than the first day of the month to follow) the Grantee’s Termination of Service, or such other time as may be permitted by the Committee. Unless otherwise determined by the Committee, elections under this Section 7.4(c)(i) must, except as may otherwise be permitted under the rules applicable under Section 409A of the Code, (A) be effective at least one year after they are made, or, in the case of payments to commence at a specific time, be made at least one year before the first scheduled payment and (B) defer the commencement of distributions for at least five years.
(ii) Notwithstanding Section 7.4(c)(i), the Committee may provide that distributions of Phantom Shares can be elected at any time in those cases in which the Phantom Share Value is determined by reference to Fair Market Value to the extent in excess of a base value, rather than by reference to unreduced Fair Market Value.
(iii) Notwithstanding the foregoing, the Settlement Date, if not earlier pursuant to this Section 7.4(c), is the date of the Grantee’s death.
(d) Notwithstanding the other provisions of this Section 7, in the event of a Change in Control, the Settlement Date shall be the date of such Change in Control and all amounts due with respect to Phantom Shares to a Grantee hereunder shall be paid as soon as practicable (but in no event more than 30 days) after such Change in Control, unless such Grantee elects otherwise in accordance with procedures established by the Committee.
(e) Notwithstanding any other provision of the Plan, a Grantee may receive any amounts to be paid in installments as provided in Section 7.4(b) or deferred by the Grantee as provided in Section 7.4(c) in the event of an “Unforeseeable Emergency.” For these purposes, an “Unforeseeable Emergency,” as determined by the Committee in its sole discretion, is a severe financial hardship to the Grantee resulting from a sudden and unexpected illness or accident of the Grantee or “dependent,” as defined in Section 152(a) of the Code, of the Grantee, loss of the Grantee’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Grantee. The circumstances that will constitute an Unforeseeable Emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved:
2016 Proxy Statement A-11
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
(i) through reimbursement or compensation by insurance or otherwise,
(ii) by liquidation of the Grantee’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
(iii) by future cessation of the making of additional deferrals under Section7.4 (b) and (c).
Without limitation, the need to send a Grantee’s child to college or the desire to purchase a home shall not constitute an Unforeseeable Emergency. Distributions of amounts because of an Unforeseeable Emergency shall be permitted to the extent reasonably needed to satisfy the emergency need.
7.5Other Phantom Share Provisions.
(a) Rights to payments with respect to Phantom Shares granted under the Plan shall not be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, garnishment, levy, execution, or other legal or equitable process, either voluntary or involuntary; and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, attach or garnish, or levy or execute on any right to payments or other benefits payable hereunder, shall be void.
(b) A Grantee may designate in writing, on forms to be prescribed by the Committee, a beneficiary or beneficiaries to receive any payments payable after his or her death and may amend or revoke such designation at any time. If no beneficiary designation is in effect at the time of a Grantee’s death, payments hereunder shall be made to the Grantee’s estate. If a Grantee with a vested Phantom Share dies, such Phantom Share shall be settled and the Phantom Share Value in respect of such Phantom Shares paid, and any payments deferred pursuant to an election under Section 7.4(c) shall be accelerated and paid, as soon as practicable (but no later than 60 days) after the date of death to such Grantee’s beneficiary or estate, as applicable.
(c) The Committee may establish a program under which distributions with respect to Phantom Shares may be deferred for periods in addition to those otherwise contemplated by foregoing provisions of this Section 7. Such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants may select from among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee.
(d) Notwithstanding any other provision of this Section 7, any fractional Phantom Share will be paid out in cash at the Phantom Share Value as of the Settlement Date.
(e) No Phantom Share shall be construed to give any Grantee any rights with respect to Shares or any ownership interest in the Company. Except as may be provided in accordance with Section 8, no provision of the Plan shall be interpreted to confer upon any Grantee any voting, dividend or derivative or other similar rights with respect to any Phantom Share.
7.6Claims Procedures.
(a) To the extent that the Plan is determined by the Committee to be subject to the Employee Retirement Income Security Act of 1974, as amended, the Grantee, or his beneficiary hereunder or authorized representative, may file a claim for payments with respect to Phantom Shares under the Plan by written communication to the Committee or its designee. A claim is not considered filed until such communication is actually received. Within 90 days (or, if special circumstances require an extension of time for processing, 180 days, in which case notice of such special circumstances should be provided within the initial 90-day period) after the filing of the claim, the Committee will either:
(i) approve the claim and take appropriate steps for satisfaction of the claim; or
(ii) if the claim is wholly or partially denied, advise the claimant of such denial by furnishing to him a written notice of such denial setting forth (A) the specific reason or reasons for the denial; (B) specific reference to pertinent provisions of the Plan on which the denial is based and, if the denial is based in whole or in part on any rule of construction or interpretation adopted by the Committee, a reference to such rule, a copy of which shall be provided to the claimant; (C) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of the reasons why such material or information is necessary; and (D) a reference to this Section 7.6 as the provision setting forth the claims procedure under the Plan.
(b) The claimant may request a review of any denial of his claim by written application to the Committee within 60 days after receipt of the notice of denial of such claim. Within 60 days (or, if special circumstances require an extension of time for processing, 120 days, in which case notice of such special circumstances should be provided within the
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initial 60-day period) after receipt of written application for review, the Committee will provide the claimant with its decision in writing, including, if the claimant’s claim is not approved, specific reasons for the decision and specific references to the Plan provisions on which the decision is based.
8.PROVISIONS APPLICABLE TO DIVIDEND EQUIVALENT RIGHTS.
8.1Grant of Dividend Equivalent Rights.
Subject to the other terms of the Plan, the Committee shall, in its discretion as reflected by the terms of the Award Agreements, authorize the granting of Dividend Equivalent Rights to Eligible Persons based on the regular cash dividends declared on Common Stock, to be credited as of the dividend payment dates, during the period between the date an Award is granted, and the date such Award is exercised, vests or expires, as determined by the Committee; provided, however, that in no event may a Dividend Equivalent Right be granted in connection with an Option or a Stock Appreciation Right. Such Dividend Equivalent Rights shall be converted to cash or additional Shares by such formula and at such time and subject to such limitation as may be determined by the Committee. If a Dividend Equivalent Right is granted in respect of an Award hereunder (other than an Option or Stock Appreciation Right), then, unless otherwise stated in the Award Agreement, in no event shall the Dividend Equivalent Right be in effect for a period beyond the time during which the applicable portion of the underlying Award is in effect.
8.2Certain Terms.
(a) The term of a Dividend Equivalent Right shall be set by the Committee in its discretion.
(b) Unless otherwise determined by the Committee, except as contemplated by Section 8.4, a Dividend Equivalent Right is exercisable or payable only while the Participant is an Eligible Person.
(c) Payment of the amount determined in accordance with Section 8.1 shall be in cash, in Common Stock or a combination of the both, as determined by the Committee.
(d) The Committee may impose such employment-related conditions on the grant of a Dividend Equivalent Right as it deems appropriate in its discretion.
(e) A Dividend Equivalent Right granted with respect to an Award subject to performance-based vesting, or forfeiture based on the failure to meet performance-based conditions (i.e., conditions other than the continued service or employment of the Grantee through a certain date), may not be exercisable or payable unless and until the performance-based conditions have been met.
8.3Other Types of Dividend Equivalent Rights.
The Committee may establish a program under which Dividend Equivalent Rights of a type whether or not described in the foregoing provisions of this Section 8 may be granted to Participants. For example, and without limitation, the Committee may grant a dividend equivalent right with respect to a Phantom Share, which right would consist of the right (subject to Section 8.4) to receive a cash payment in an amount equal to the dividend distributions paid on a Share from time to time.
8.4Deferral.
The Committee may establish a program (taking into account, without limitation, the possible application of Section 409A of the Code, as the Committee may deem appropriate) under which Participants (i) will have Phantom Shares credited, subject to the terms of Sections 7.4 and 7.5 as though directly applicable with respect thereto, upon the granting of Dividend Equivalent Rights, or (ii) will have payments with respect to Dividend Equivalent Rights deferred. In the case of the foregoing clause (ii), such program may include, without limitation, provisions for the crediting of earnings and losses on unpaid amounts, and, if permitted by the Committee, provisions under which Participants may select from among hypothetical investment alternatives for such deferred amounts in accordance with procedures established by the Committee.
The Committee shall have the right (i) to grant other Awards based upon the Common Stock having such terms and conditions as the Committee may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of convertible preferred shares, convertible debentures and other exchangeable or redeemable securities or equity interests, and the grant of stock appreciation rights, (ii) to grant limited-partnership or any other membership or ownership interests (which may be expressed as units or otherwise) in a Subsidiary or operating or other partnership (or other affiliate of the Company), with any Shares being issued in connection with the conversion of (or other distribution on
2016 Proxy Statement A-13
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
account of) an interest granted under the authority of this clause (ii) to be subject, for the avoidance of doubt, to Section 4 and the other provisions of the Plan, and (iii) to grant Awards valued by reference to book value, fair value or performance parameters relative to the Company or any Subsidiary or group of Subsidiaries. Notwithstanding the foregoing, any cash dividends or distributions otherwise payable pursuant to an Award granted pursuant to this Section 9 that remains subject to performance-based vesting, or forfeiture based on the failure to meet performance-based conditions (i.e., conditions other than the continued service or employment of the Grantee through a certain date), must be retained by, or repaid by the Grantee to, the Company or the applicable entity granting the Award; provided that, to the extent provided for in the applicable Award Agreement or by the Committee, an amount equal to such cash dividends or distributions retained or repaid by the Grantee may be paid to the Grantee upon the satisfaction or lapsing of such performance-based conditions with respect to such Award.
Grant of Cash-Based Awards. The Committee shall have the right to grant Cash-Based Awards under the Plan. A Cash-Based Award is an Award that entitles the Grantee to a payment in cash. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Committee. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and shall be made in cash.
The Committee, in its discretion, (i) may establish one or more performance goals as a precondition to the issuance or vesting of Awards, and (ii) may provide, in connection with the establishment of the performance goals, for predetermined Awards to those Participants (who continue to meet all applicable eligibility requirements) with respect to whom the applicable performance goals are satisfied. In the case of any grant intended to qualify as performance based compensation under Section 162(m) of the Code (including, for these purposes, grants constituting performance based compensation, as determined without regard to certain shareholder approval and disclosure requirements by virtue of an applicable transition rule), the Committee (i) may use one or a combination of the performance goals set forth in this Section 11; and (ii) may establish other goals (with shareholder approval of other types of goals) intended to be performance goals as contemplated by Section 162(m) of the Code and the regulations thereunder. Performance-Based Awards intended to qualify as “performance based” compensation under Section 162(m) of the Code, may be payable upon the attainment of objective performance goals that are established by the Committee and relate to one or more Performance Criteria, in each case on specified date or over any period, up to 10 years, as determined by the Committee. Performance Criteria may (but need not) be based on the achievement of the specified levels of performance under one or more of the measures set out below relative to the performance of one or more other corporations or indices. Performance goals may be absolute amounts or percentages of amounts or may be relative to the performance of other companies or of indexes. Except as otherwise expressly provided, all financial terms are used as defined under Generally Accepted Accounting Principles (“GAAP”) and all determinations shall be made in accordance with GAAP, as applied by the Company in the preparation of its periodic reports to shareholders. To the extent permitted by Section 162(m) of the Code, unless the Committee provides otherwise at the time of establishing the performance goals, for each fiscal year of the Company, the Committee may provide for objectively determinable adjustments, as determined in accordance with GAAP, to any of the Performance Criteria described above for one or more of the items of gain, loss, profit or expense: (A) determined to be extraordinary or unusual in nature or infrequent in occurrence, (B) related to the disposal of a segment of a business, (C) related to a change in accounting principle under GAAP, (D) related to discontinued operations that do not qualify as a segment of a business under GAAP, and (E) attributable to the business operations of any entity acquired by the Company during the fiscal year.
12.1In General.
The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding determined by the Committee to be required by law. Without limiting the generality of the foregoing, the Committee may, in its discretion, require the Participant to pay to the Company at such time as the Committee determines the amount that the Committee deems necessary to satisfy the Company’s obligation to withhold federal, state or local income or other taxes incurred by reason of (i) the exercise of any Option, (ii) the lapsing of any restrictions applicable to any Restricted Stock, (iii) the receipt of a distribution in respect of Phantom Shares or Dividend Equivalent Rights or receipt of cash or (iv) any other applicable income-recognition event (for example, an election under Section 83(b) of the Code).
12.2Share Withholding.
(a) Upon exercise of an Option, the Optionee may, if approved by the Committee in its discretion, make a written election to have Shares then issued withheld by the Company from the Shares otherwise to be received, or to deliver previously owned Shares, in order to satisfy the liability for the minimum withholding taxes due. Alternatively, if so provided in an Award Agreement, the Committee may require the Optionee to satisfy such liability by having Shares then
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
issued withheld by the Company from the Shares otherwise to be received, or require the Optionee to do so, subject to the Optionee’s ability to elect to satisfy such liability in cash. In the event that the Optionee is to satisfy such liability in Shares, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of exercise sufficient to satisfy the applicable minimum withholding taxes. Where the exercise of an Option does not give rise to an obligation by the Company to withhold federal, state or local income or other taxes on the date of exercise, but may give rise to such an obligation in the future, the Committee may, in its discretion, make such arrangements and impose such requirements as it deems necessary or appropriate.
(b) Upon lapsing of restrictions on Restricted Stock (or other income-recognition event), the Grantee may, if approved by the Committee in its discretion, make a written election to have Shares withheld by the Company from the Shares otherwise to be released from restriction, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to satisfy the liability for the minimum withholding taxes due. Alternatively, if so provided in an Award Agreement, the Committee may require the Grantee to satisfy such liability by having Shares withheld by the Company from the Shares otherwise to be released from restriction, or require the Grantee to do so, subject to the Grantee’s ability to elect to satisfy such liability in cash. In the event that the Grantee is to satisfy such liability in Shares, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of the lapsing of restrictions (or other income-recognition event) sufficient to satisfy the applicable minimum withholding taxes.
(c) Upon the making of a distribution in respect of Phantom Shares or Dividend Equivalent Rights, the Grantee may, if approved by the Committee in its discretion, make a written election to have amounts (which may include Shares) withheld by the Company from the distribution otherwise to be made, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to satisfy the liability for the minimum withholding taxes due. Alternatively, if so provided in an Award Agreement, the Committee may require the Grantee to satisfy such liability by having Shares withheld by the Company from the distribution otherwise to be made, or require the Grantee to do so, subject to the Grantee’s ability to elect to satisfy such liability in cash. In the event that the Grantee is to satisfy such liability in Shares, any Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of distribution sufficient to satisfy the applicable minimum withholding taxes.
(d) Upon the occurrence of any other income-recognition event with respect to an Award granted under the Plan that occurs upon or concurrently with the issuance or vesting of, or lapsing of restrictions on, Common Stock, the Grantee may, if approved by the Committee in its discretion, make a written election to have Shares withheld by the Company from the Shares otherwise to be issued, vested or released from restriction, or to deliver previously owned Shares (not subject to restrictions hereunder), in order to satisfy the liability for the minimum withholding taxes due. Alternatively, if so provided in an Award Agreement, the Committee may require the Grantee to satisfy such liability by having Shares withheld by the Company from the Shares otherwise to be issued, vested or released from restriction, or require the Grantee to do so, subject to the Grantee’s ability to elect to satisfy such liability in cash. In the event that the Grantee is to satisfy such liability in Shares, the number of Shares so withheld or delivered shall have an aggregate Fair Market Value on the date of such income-recognition event sufficient to satisfy the applicable minimum withholding taxes.
(e) For purposes of determining the number of Shares to be withheld or delivered to satisfy the applicable minimum withholding taxes pursuant to Section 12.2 of the Plan, the Fair Market Value of the Shares shall be calculated in the same manner as the Shares are valued for purposes of determining the amount of withholding taxes due.
(f) Notwithstanding anything to the contrary in the foregoing, the Company may withhold shares in excess of the applicable minimum withholding taxes if doing so would not cause the Plan to be subject to liability accounting under FASB ASC 718 (or any successor rule).
12.3Withholding Required.
Notwithstanding anything contained in the Plan or the Award Agreement to the contrary, the Participant’s satisfaction of any tax-withholding requirements imposed by the Committee shall be a condition precedent to the Company’s obligation as may otherwise be provided hereunder to provide Shares to the Participant and to the release of any restrictions as may otherwise be provided hereunder, as applicable; and the applicable Option, Restricted Stock, Phantom Shares, Dividend Equivalent Rights or other Award shall be forfeited upon the failure of the Participant to satisfy such requirements with respect to, as applicable, (i) the exercise of the Option, (ii) the lapsing of restrictions on the Restricted Stock (or other income-recognition event), (iii) distributions in respect of any Phantom Share or Dividend Equivalent Right or receipt of cash or (iv) any other income-recognition event with respect an Award granted under the Plan.
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APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
(a) The obligation of the Company to sell Shares with respect to an Award granted under the Plan shall be subject to all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee.
(b) The Committee may make such changes to the Plan as may be necessary or appropriate to comply with the rules and regulations of any government authority or to obtain tax benefits applicable to an Award.
(c) Each grant of Options, Restricted Stock, Phantom Shares (or issuance of Shares in respect thereof) or Dividend Equivalent Rights (or issuance of Shares in respect thereof), or other Award under Section 9 (or issuance of Shares in respect thereof), is subject to the requirement that, if at any time the Committee determines, in its discretion, that the listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the issuance of Options, Shares of Restricted Stock, Phantom Shares, Dividend Equivalent Rights, other Awards or other Shares, no payment shall be made, or Phantom Shares or Shares issued or grant of Restricted Stock or other Award made, in whole or in part, unless listing, registration, qualification, consent or approval has been effected or obtained free of any conditions in a manner acceptable to the Committee.
(d) In the event that the disposition of stock acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act, and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required under the Securities Act, and the Committee may require any individual receiving Shares pursuant to the Plan, as a condition precedent to receipt of such Shares, to represent to the Company in writing that such Shares are acquired for investment only and not with a view to distribution and that such Shares will be disposed of only if registered for sale under the Securities Act or if there is an available exemption for such disposition.
(e) Notwithstanding any other provision of the Plan, the Company shall not be required to take or permit any action under the Plan or any Award Agreement which, in the good-faith determination of the Company, would result in a material risk of a violation by the Company of Section 13(k) of the Exchange Act.
14.INTERPRETATION AND AMENDMENTS; OTHER RULES.
The Committee may make such rules and regulations and establish such procedures for the administration of the Plan as it deems appropriate. Without limiting the generality of the foregoing, the Committee may (i) determine the extent, if any, to which Options, Phantom Shares or Shares (whether or not Shares of Restricted Stock) or Dividend Equivalent Rights shall be forfeited (whether or not such forfeiture is expressly contemplated hereunder); (ii) interpret the Plan and the Award Agreements hereunder, with such interpretations to be conclusive and binding on all persons and otherwise accorded the maximum deference permitted by law, provided that the Committee’s interpretation shall not be entitled to deference on and after a Change in Control except to the extent that such interpretations are made exclusively by members of the Committee who are individuals who served as Committee members before the Change in Control; and (iii) take any other actions and make any other determinations or decisions that it deems necessary or appropriate in connection with the Plan or the administration or interpretation thereof. In the event of any dispute or disagreement as to the interpretation of the Plan or of any rule, regulation or procedure, or as to any question, right or obligation arising from or related to the Plan, the decision of the Committee, except as provided in clause (ii) of the foregoing sentence, shall be final and binding upon all persons. The Committee may, in its discretion, delegate the authority and responsibility to act pursuant to the Plan with respect to ministerial administrative matters, which actions shall at all times be subject to the supervision of the Committee, and the actions of such a delegee in accordance with the foregoing shall be considered the actions of the Committee hereunder. Unless otherwise expressly provided hereunder, the Committee, with respect to any grant, may exercise its discretion hereunder at the time of the Award or thereafter. The Board may amend the Plan as it shall deem advisable, except that no amendment may adversely affect a Participant with respect to an Award previously granted unless such amendments are required in order to comply with applicable laws. The Board, in its discretion, may determine to make any Plan amendments subject to approval by the Company’s stockholders for purposes of complying with applicable stock exchange requirements, ensuring that compensation earned under Awards qualifies as performance-based compensation under Section 162(m) of the Code or ensuring that Incentive Stock Options granted under the Plan are qualified under Section 422 of the Code. Except as provided in Section 15(a) or (f), without prior stockholder approval, in no event may the Board exercise its discretion to reduce the Option Price of outstanding Options or Stock Appreciation Rights or cancel, exchange, substitute, buyout or surrender outstanding Options or Stock Appreciation Rights in exchange for cash, other awards or Options or Stock Appreciation Rights with an Option Price that is less than the Option Price of the original Options or Stock Appreciation Rights.
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15.CHANGES IN CAPITAL STRUCTURE.
(a) If (i) the Company or its Subsidiaries shall at any time be involved in a merger, consolidation, dissolution, liquidation, reorganization, exchange of shares, sale of all or substantially all of the assets or stock of the Company or its Subsidiaries or a transaction similar thereto, (ii) any stock dividend, stock split, reverse stock split, stock combination, reclassification, recapitalization or other similar change in the capital structure of the Company or its Subsidiaries, or any distribution to holders of Common Stock other than cash dividends, shall occur or (iii) any other event shall occur which in the judgment of the Committee necessitates action by way of adjusting the terms of the outstanding Awards, then:
(x) the maximum aggregate number of Shares which may be made subject to Options and Dividend Equivalent Rights under the Plan, the maximum aggregate number and kind of Shares of Restricted Stock that may be granted under the Plan, the maximum aggregate number of Phantom Shares and other Awards which may be granted under the Plan, shall be appropriately adjusted by the Committee; and
(y) with respect to Awards issued under the Plan, the Committee shall take any such action as shall be necessary to maintain each Participants’ rights hereunder (including under their Award Agreements) with respect to Options, Phantom Shares and Dividend Equivalent Rights (and, as appropriate, other Awards under Section 9), so that they are substantially proportionate to the rights existing in such Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9) prior to such event, including, without limitation, adjustments in (A) the number of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9) granted, (B) the number and kind of shares or other property to be distributed in respect of Options, Phantom Shares and Dividend Equivalent Rights (and other Awards under Section 9 as applicable), (C) the Option Price and Phantom Share Value, and (D) performance-based criteria established in connection with Awards; provided that, the foregoing clause (D) shall also be applied in the case of any event relating to a Subsidiary if the event would have been covered under this Section 15(a) had the event related to the Company. For purposes of clause (x) and this clause (y), the manner in which any of the above described adjustments are made shall in all events be subject to approval of the Committee.
To the extent that such action shall include an increase or decrease in the number of Shares (or units of other property then available) subject to all outstanding Awards, the number of Shares (or units) available under Section 4 shall be increased or decreased, as the case may be, proportionately, as may be determined by the Committee.
(b) Any Shares or other securities distributed to a Grantee with respect to Restricted Stock or otherwise issued in substitution of Restricted Stock shall be subject to the restrictions and requirements imposed by Section 6, including depositing the certificates therefor with the Company together with a stock power and bearing a legend as provided in Section 6.2(a).
(c) If the Company shall be consolidated or merged with another corporation or other entity, each Grantee who has received Restricted Stock that is then subject to restrictions imposed by Section 6.3(a) may be required to deposit with the successor corporation the certificates, if any, for the stock or securities or the other property that the Grantee is entitled to receive by reason of ownership of Restricted Stock in a manner consistent with Section 6.2(b), and such stock, securities or other property shall become subject to the restrictions and requirements imposed by Section 6.3(a), and the certificates therefor or other evidence thereof shall bear a legend similar in form and substance to the legend set forth in Section 6.2(a).
(d) If a Change in Control shall occur, then the Committee, as constituted immediately before the Change in Control, may make such adjustments as it, in its discretion, determines are necessary or appropriate in light of the Change in Control, provided that the Committee determines that such adjustments do not have an adverse economic impact on the Participant as determined at the time of the adjustments.
(e) The judgment of the Committee with respect to any matter referred to in this Section 15 shall be conclusive and binding upon each Participant without the need for any amendment to the Plan.
(f) Upon the effective time of a Sale Event, with respect to Awards granted on or after December 9, 2009, at the election of the Committee, either (i) (A) such Options and Stock Appreciation Rights that are not exercisable immediately prior to the effective time of the Sale Event shall become fully exercisable as of the effective time of the Sale Event, (B) all such other Awards with time-based vesting, conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of the Sale Event, (C) all such Awards with conditions and restrictions relating to the attainment of performance goals may become vested and nonforfeitable in connection with a Sale Event in the Committee’s discretion (to the extent not provided for in the Award) and (D) all such outstanding Awards shall terminate or (ii) such Awards shall be assumed by the successor entity and continue with appropriate adjustment pursuant to Section 15(a) above. In the event of the termination of Awards pursuant to clause (i) of the prior sentence, (i) the Company shall have the option (in its sole discretion) to make or provide for a cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the cancellation
2016 Proxy Statement A-17
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
thereof, in an amount equal to the difference between (A) the Sale Price multiplied by the number of shares of Common Stock subject to outstanding Options and Stock Appreciation Rights (to the extent then exercisable (after taking into account any acceleration hereunder) at prices not in excess of the Sale Price) and (B) the aggregate exercise price of all such outstanding Options and Stock Appreciation Rights; or (ii) each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Committee, to exercise all outstanding Options and Stock Appreciation Rights held by such grantee effective as of the effective time of such Sale Event. For purposes of the Plan, (i) “Sale Event” shall mean (A) the sale of all or substantially all of the assets of the Company on a consolidated basis to an unrelated person or entity, (B) a merger, reorganization or consolidation in which the outstanding shares of Common Stock are converted into or exchanged for securities of the successor entity and the voting securities of the Company outstanding immediately prior to such merger, reorganization or consolidation would represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) less than 50% of the total voting power of the voting securities of the surviving entity outstanding immediately after such merger, reorganization or consolidation or cease to have the power to elect at least a majority of the board of directors or other governing body of such surviving entity, or (C) the sale of all of the Common Stock of the Company to an unrelated person or entity and (ii) “Sale Price” shall mean the value as determined by the Committee of the consideration payable, or otherwise to be received by stockholders, per share of Common Stock pursuant to a Sale Event.
16.1No Rights to Employment or Other Service.
Nothing in the Plan or in any grant made pursuant to the Plan shall confer on any individual any right to continue in the employ or other service of the Company or its Subsidiaries or interfere in any way with the right of the Company or its Subsidiaries and its shareholders to terminate the individual’s employment or other service at any time.
16.2Right of First Refusal; Right of Repurchase.
At the time of grant, the Committee may provide in connection with any grant made under the Plan that Shares received hereunder shall be subject to a right of first refusal pursuant to which the Company shall be entitled to purchase such Shares in the event of a prospective sale of the Shares, subject to such terms and conditions as the Committee may specify at the time of grant or (if permitted by the Award Agreement) thereafter, and to a right of repurchase, pursuant to which the Company shall be entitled to purchase such Shares at a price determined by, or under a formula set by, the Committee at the time of grant or (if permitted by the Award Agreement) thereafter.
16.3No Fiduciary Relationship.
Nothing contained in the Plan (including without limitation Sections 7.5(c) and 8.4), and no action taken pursuant to the provisions of the Plan, shall create or shall be construed to create a trust of any kind, or a fiduciary relationship between the Company or its Subsidiaries, or their officers or the Committee, on the one hand, and the Participant, the Company, its Subsidiaries or any other person or entity, on the other.
16.4No Fund Created.
Any and all payments hereunder to any Participant under the Plan shall be made from the general funds of the Company (or, if applicable, a Participating Company), no special or separate fund shall be established or other segregation of assets made to assure such payments, and the Phantom Shares (including for purposes of this Section 16.4 any accounts established to facilitate the implementation of Section 7.4(c)) and any other similar devices issued hereunder to account for Plan obligations do not constitute Common Stock and shall not be treated as (or as giving rise to) property or as a trust fund of any kind; provided, however, that the Company may establish a mere bookkeeping reserve to meet its obligations hereunder or a trust or other funding vehicle that would not cause the Plan to be deemed to be funded for tax purposes or for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended. The obligations of the Company under the Plan are unsecured and constitute a mere promise by the Company to make benefit payments in the future and, to the extent that any person acquires a right to receive payments under the Plan from the Company, such right shall be no greater than the right of a general unsecured creditor of the Company. (If any affiliate of the Company is or is made responsible with respect to any Awards, the foregoing sentence shall apply with respect to such affiliate.) Without limiting the foregoing, Phantom Shares and any other similar devices issued hereunder to account for Plan obligations are solely a device for the measurement and determination of the amounts to be paid to a Grantee under the Plan, and each Grantee’s right in the Phantom Shares and any such other devices is limited to the right to receive payment, if any, as may herein be provided.
A-18 SL Green Realty Corp.
APPENDIX A: SL GREEN REALTY CORP. FOURTH AMENDED AND RESTATED 2005 STOCK OPTION AND INCENTIVE PLAN
16.5Notices.
All notices under the Plan shall be in writing, and if to the Company, shall be delivered to the Board or mailed to its principal office, addressed to the attention of the Board; and if to the Participant, shall be delivered personally, sent by facsimile transmission or mailed to the Participant at the address appearing in the records of the Company. Such addresses may be changed at any time by written notice to the other party given in accordance with this Section 16.5.
16.6Exculpation and Indemnification.
The Company shall indemnify and hold harmless the members of the Board and the members of the Committee from and against any and all liabilities, costs and expenses incurred by such persons as a result of any act or omission to act in connection with the performance of such person’s duties, responsibilities and obligations under the Plan, to the maximum extent permitted by law.
16.7Captions.
The use of captions in this Plan is for convenience. The captions are not intended to provide substantive rights.
16.8Governing Law.
THE PLAN SHALL BE GOVERNED BY THE LAWS OF MARYLAND WITHOUT REFERENCE TO PRINCIPLES OF CONFLICT OF LAWS.
16.9Clawback Policy.
Awards under this Plan shall be subject to the Company’s clawback policy, as in effect from time to time.
2016 Proxy Statement A-19
Reconciliation
| | | Twelve months ended December 31, 2023 | | |||
Normalized FFO Reconciliation: | | | | | | | |
Net loss attributable to SL Green common stockholders | | | | $ | (579,509) | | |
Add: | | | | | | | |
Depreciation and amortization | | | | | 247,810 | | |
Joint venture depreciation and noncontrolling interest adjustments | | | | | 284,284 | | |
Net loss attributable to noncontrolling interests | | | | | (42,033) | | |
Less: | | | | | | | |
Equity in net loss on sale of interest in unconsolidated joint venture/real estate | | | | | (13,368) | | |
Purchase price and other fair value adjustments | | | | | (6,813) | | |
Loss on sale of real estate, net | | | | | (32,370) | | |
Depreciable real estate reserves and impairments | | | | | (382,374) | | |
Depreciation on non-rental real estate assets | | | | | 4,136 | | |
FFO attributable to SL Green common stockholders and unit holders | | | | $ | 341,341 | | |
Add: | | | | | | | |
Non-cash fair value adjustments on mark-to-market derivatives | | | | | 10,447 | | |
Loan loss and other investment reserves, net of recoveries | | | | | 6,890 | | |
Loss on early extinguishment of debt | | | | | 870 | | |
Non-recurring general and administrative charges related to the non-renewal of the Company’s former president | | | | | 18,700 | | |
Normalized FFO attributable to SL Green common stockholders and unit holders | | | | $ | 378,248 | | |
Basic ownership interest: | | | | | | | |
Weighted average REIT common share and common share equivalents | | | | | 63,809 | | |
Weighted average partnership units held by noncontrolling interests | | | | | 4,163 | | |
Basic weighted average shares and units outstanding | | | | | 67,972 | | |
Diluted ownership interest: | | | | | | | |
Weighted average REIT common share and common share equivalents | | | | | 64,869 | | |
Weighted average partnership units held by noncontrolling interests | | | | | 4,163 | | |
Diluted weighted average shares and units outstanding | | | | | 69,032 | | |
FFO per share: | | | | | | | |
Basic | | | | $ | 4.98 | | |
Diluted | | | | | 4.94 | | |
Normalized FFO per share: | | | | | | | |
Basic | | | | | 5.52 | | |
Diluted | | | | | 5.48 | | |
| A-2 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
Consolidated Properties | SL Green’s share of Unconsolidated Joint Ventures | Combined | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2015 | 2014 | 2015 | 2014 | 2015 | 2014 | |||||||||||||||||||
Income from continuing operations | ||||||||||||||||||||||||
before equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures, | ||||||||||||||||||||||||
equity in net gain on sale of | ||||||||||||||||||||||||
interest in unconsolidated joint | ||||||||||||||||||||||||
venture/real estate, gain (loss) on | ||||||||||||||||||||||||
sale of investment in marketable | ||||||||||||||||||||||||
securities, purchase price fair value | ||||||||||||||||||||||||
adjustment and loss on early | ||||||||||||||||||||||||
extinguishment of debt | $ | 77,261 | $ | 174,963 | — | — | ||||||||||||||||||
Equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures | 13,028 | 26,537 | 13,028 | 26,537 | ||||||||||||||||||||
Depreciation and amortization | 560,887 | 371,610 | 62,766 | 60,692 | ||||||||||||||||||||
Interest expense, | ||||||||||||||||||||||||
net of interest income | 323,870 | 317,400 | 70,018 | 61,556 | ||||||||||||||||||||
Amortization of deferred | ||||||||||||||||||||||||
financing costs | 27,348 | 22,377 | 5,770 | 6,008 | ||||||||||||||||||||
Loss on early extinguishment of debt | (49 | ) | (32,365 | ) | — | — | ||||||||||||||||||
Operating income | $ | 1,002,345 | $ | 880,522 | $ | 151,582 | $ | 154,793 | ||||||||||||||||
Marketing, general & | ||||||||||||||||||||||||
administrative expense | 94,873 | 92,488 | — | — | ||||||||||||||||||||
Net operating income from | ||||||||||||||||||||||||
discontinued operations | 488 | 37,790 | — | — | ||||||||||||||||||||
Transaction related costs, | ||||||||||||||||||||||||
net of recoveries | 11,430 | 8,707 | 37 | 372 | ||||||||||||||||||||
Non-building revenue | (195,944 | ) | (217,857 | ) | (25,690 | ) | (17,467 | ) | ||||||||||||||||
Equity in income from | ||||||||||||||||||||||||
unconsolidated joint ventures | (13,028 | ) | (26,537 | ) | — | — | ||||||||||||||||||
Loss on early extinguishment of debt | 49 | 32,365 | 497 | 3,382 | ||||||||||||||||||||
Net operating income (NOI) | 900,213 | 807,478 | 126,426 | 141,080 | $ | 1,026,639 | $ | 948,558 | ||||||||||||||||
NOI from discontinued operations | (488 | ) | (37,790 | ) | — | — | (488 | ) | (37,790 | ) | ||||||||||||||
NOI from other properties/affiliates | (210,584 | ) | (114,361 | ) | (44,943 | ) | (62,229 | ) | (255,527 | ) | (176,590 | ) | ||||||||||||
Same-Store NOI | $ | 689,141 | $ | 655,327 | $ | 81,483 | $ | 78,851 | $ | 770,624 | $ | 734,178 | ||||||||||||
Ground lease straight-line | ||||||||||||||||||||||||
adjustment | 1,595 | 1,602 | — | — | 1,595 | 1,602 | ||||||||||||||||||
Straight-line and free rent | (57,615 | ) | (46,210 | ) | (5,829 | ) | (7,471 | ) | (63,444 | ) | (53,681 | ) | ||||||||||||
Rental income—FAS141 | (12,296 | ) | (16,377 | ) | (1,512 | ) | (1,607 | ) | (13,808 | ) | (17,984 | ) | ||||||||||||
Same-store cash NOI | $ | 620,825 | $ | 594,342 | $ | 74,142 | $ | 69,773 | $ | 694,967 | $ | 664,115 |
B-1 SL Green Realty Corp.
| | | Twelve months ended December 31, 2023 | | |||
Normalized Funds Available for Distribution Reconciliation: | | | | | | | |
Net loss attributable to SL Green common stockholders | | | | $ | (579,509) | | |
Add: | | | | | | | |
Depreciation and amortization | | | | | 247,810 | | |
Joint venture depreciation and noncontrolling interest adjustments | | | | | 284,284 | | |
Net loss attributable to noncontrolling interests | | | | | (42,033) | | |
Less: | | | | | | | |
Equity in net loss on sale of interest in unconsolidated joint venture/real estate | | | | | (13,368) | | |
Purchase price and other fair value adjustments | | | | | (6,813) | | |
Loss on sale of real estate, net | | | | | (32,370) | | |
Depreciable real estate reserves and impairments | | | | | (382,374) | | |
Depreciation on non-rental real estate assets | | | | | 4,136 | | |
FFO attributable to SL Green common stockholders and unit holders | | | | $ | 341,341 | | |
Add: | | | | | | | |
Non real estate depreciation and amortization | | | | | 4,136 | | |
Amortization of deferred financing costs | | | | | 7,837 | | |
Non-cash deferred compensation | | | | | 62,352 | | |
FAD adjustment for joint ventures | | | | | (81,112) | | |
Straight-line rental income and other non-cash adjustments | | | | | (20,188) | | |
Second cycle tenant improvements | | | | | (52,300) | | |
Second cycle leasing commissions | | | | | (9,335) | | |
Revenue enhancing recurring CAPEX | | | | | (1,458) | | |
Non-revenue enhancing recurring CAPEX | | | | | (21,530) | | |
Funds Available for Distribution | | | | $ | 229,743 | | |
Add: | | | | | | | |
Non-recurring general and administrative charges related to the non-renewal of the Company’s former president | | | | | 18,700 | | |
Normalized Funds Available for Distribution | | | | $ | 248,443 | | |
TableBelow are reconciliations of Contents
APPENDIX B: INFORMATION REGARDING CERTAIN FINANCIAL MEASURES
Reconciliation of 2014 and 2013
Consolidated Properties | SL Green’s share of Unconsolidated Joint Ventures | Combined | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | 2014 | 2013 | |||||||||||||||||||
Income from continuing operations | ||||||||||||||||||||||||
before equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures, equity | ||||||||||||||||||||||||
in net gain on sale of interest in | ||||||||||||||||||||||||
unconsolidated joint venture/real | ||||||||||||||||||||||||
estate, gain (loss) on sale of investment | ||||||||||||||||||||||||
in marketable securities, purchase price | ||||||||||||||||||||||||
fair value adjustment and loss on early | ||||||||||||||||||||||||
extinguishment of debt | $ | 174,963 | $ | 118,062 | $ | — | $ | — | ||||||||||||||||
Equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures | 26,537 | 9,921 | 26,537 | 9,921 | ||||||||||||||||||||
Depreciation and amortization | 371,610 | 324,461 | 60,691 | 84,403 | ||||||||||||||||||||
Interest expense, net of interest income | 317,400 | 310,894 | 61,556 | 79,896 | ||||||||||||||||||||
Amortization of deferred | ||||||||||||||||||||||||
financing costs | 22,377 | 15,855 | 6,008 | 9,637 | ||||||||||||||||||||
Loss on early extinguishment of debt | (32,365 | ) | (18,518 | ) | ||||||||||||||||||||
Operating income | $ | 880,522 | $ | 760,675 | $ | 154,792 | $ | 183,857 | ||||||||||||||||
Marketing, general & | ||||||||||||||||||||||||
administrative expense | 92,488 | 86,192 | — | — | ||||||||||||||||||||
Net operating income from | ||||||||||||||||||||||||
discontinued operations | 37,790 | 64,906 | — | — | ||||||||||||||||||||
Loan loss and other investment | ||||||||||||||||||||||||
reserves, net of recoveries | — | — | — | — | ||||||||||||||||||||
Transaction related costs, | ||||||||||||||||||||||||
net of recoveries | 8,707 | 3,985 | 372 | 356 | ||||||||||||||||||||
Non-building revenue | (217,856 | ) | (201,416 | ) | (17,467 | ) | (18,451 | ) | ||||||||||||||||
Equity in income from | ||||||||||||||||||||||||
unconsolidated joint ventures | (26,537 | ) | (9,921 | ) | — | — | ||||||||||||||||||
Loss on early extinguishment of debt | 32,365 | 18,518 | 3,382 | — | ||||||||||||||||||||
Net operating income (NOI) | 807,479 | 722,939 | 141,079 | 165,762 | $ | 948,558 | $ | 888,701 | ||||||||||||||||
NOI from discontinued operations | (37,790 | ) | (64,906 | ) | — | — | (37,790 | ) | (64,906 | ) | ||||||||||||||
NOI from other properties/affiliates | (111,992 | ) | (22,437 | ) | (54,941 | ) | (87,906 | ) | (166,933 | ) | (110,343 | ) | ||||||||||||
Same-Store NOI | $ | 657,697 | $ | 635,596 | $ | 86,138 | $ | 77,856 | $ | 743,835 | $ | 713,452 | ||||||||||||
Ground lease straight-line adjustment | 1,602 | 1,143 | — | — | 1,602 | 1,143 | ||||||||||||||||||
Straight-line and free rent | (47,886 | ) | (40,357 | ) | (8,404 | ) | (9,645 | ) | (56,290 | ) | (50,002 | ) | ||||||||||||
Rental income—FAS141 | (21,578 | ) | (18,956 | ) | (1,990 | ) | (2,257 | ) | (23,568 | ) | (21,213 | ) | ||||||||||||
Same-store cash NOI | $ | 589,835 | $ | 577,426 | $ | 75,744 | $ | 65,954 | $ | 665,579 | $ | 643,380 |
2016Proxy Statement B-2
APPENDIX B: INFORMATION REGARDING CERTAIN FINANCIAL MEASURES
Reconciliation of 2013 and 2012
Consolidated Properties | SL Green’s share of Unconsolidated Joint Ventures | Combined | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | 2013 | 2012 | |||||||||||||||||||
Income from continuing operations | ||||||||||||||||||||||||
before equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures, equity | ||||||||||||||||||||||||
in net gain on sale of interest in | ||||||||||||||||||||||||
unconsolidated joint venture/real | ||||||||||||||||||||||||
estate, gain (loss) on sale of investment | ||||||||||||||||||||||||
in marketable securities, purchase price | ||||||||||||||||||||||||
fair value adjustment and loss (gain) | ||||||||||||||||||||||||
on early extinguishment of debt | $ | 142,024 | $ | 79,021 | $ | — | $ | — | ||||||||||||||||
Equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures | 9,921 | 76,418 | 9,921 | 76,418 | ||||||||||||||||||||
Depreciation and amortization | 337,692 | 325,737 | 84,403 | 69,108 | ||||||||||||||||||||
Interest expense, | ||||||||||||||||||||||||
net of interest income | 330,215 | 329,897 | 79,896 | 86,268 | ||||||||||||||||||||
Amortization of deferred | ||||||||||||||||||||||||
financing costs | 16,695 | 19,450 | 9,637 | 3,859 | ||||||||||||||||||||
Gain (loss) on early | ||||||||||||||||||||||||
extinguishment of debt | (18,518 | ) | (6,978 | ) | — | 10,711 | ||||||||||||||||||
Operating income | $ | 818,029 | $ | 823,545 | $ | 183,857 | $ | 246,364 | ||||||||||||||||
Marketing, general & | ||||||||||||||||||||||||
administrative expense | 86,192 | 82,840 | — | — | ||||||||||||||||||||
Net operating income from | ||||||||||||||||||||||||
discontinued operations | 7,548 | 11,849 | — | — | ||||||||||||||||||||
Loan loss and other investment | ||||||||||||||||||||||||
reserves, net of recoveries | — | 564 | — | — | ||||||||||||||||||||
Transaction related costs, | ||||||||||||||||||||||||
net of recoveries | 3,987 | 5,625 | 356 | 960 | ||||||||||||||||||||
Non-building revenue | (201,416 | ) | (134,391 | ) | (18,451 | ) | (83,242 | ) | ||||||||||||||||
Equity in net income from | ||||||||||||||||||||||||
unconsolidated joint ventures | (9,921 | ) | (76,418 | ) | — | — | ||||||||||||||||||
Loss (gain) on early | ||||||||||||||||||||||||
extinguishment of debt | 18,518 | 6,978 | — | (10,711 | ) | |||||||||||||||||||
Net operating income (NOI) | 722,937 | 720,592 | 165,762 | 153,371 | $ | 888,699 | $ | 873,963 | ||||||||||||||||
NOI from discontinued operations | (7,548 | ) | (11,849 | ) | — | — | (7,548 | ) | (11,849 | ) | ||||||||||||||
NOI from other properties/affiliates | (59,448 | ) | (54,403 | ) | (64,861 | ) | (56,296 | ) | (124,309 | ) | (110,699 | ) | ||||||||||||
Same-Store NOI | $ | 655,941 | $ | 654,340 | $ | 100,901 | $ | 97,075 | $ | 756,842 | $ | 751,415 | ||||||||||||
Ground lease straight-line adjustment | 5,645 | 2,702 | — | — | 5,645 | 2,702 | ||||||||||||||||||
Straight-line and free rent | (47,963 | ) | (56,249 | ) | (3,186 | ) | (2,842 | ) | (51,149 | ) | (59,091 | ) | ||||||||||||
Rental income— FAS141 | (5,154 | ) | (10,317 | ) | (2,525 | ) | (1,411 | ) | (7,679 | ) | (11,728 | ) | ||||||||||||
Same-store cash NOI | $ | 608,469 | $ | 590,476 | $ | 95,190 | $ | 92,822 | $ | 703,659 | $ | 683,298 |
B-3 SL Green Realty Corp.
APPENDIX B: INFORMATION REGARDING CERTAIN FINANCIAL MEASURES
Notes:
The Company presentsnet income to operating income, net operating income, same-store cash net operating income and same-store cash net operating income excluding lease termination income for the twelve months ended December 31, 2023 and 2022 (amounts in thousands).
| | | Year Ended December 31, | | |||||||||
| | | 2023 | | | 2022 | | ||||||
Operating Income and Same-store cash NOI Reconciliation | | | | | | | | | | | | | |
Net loss | | | | $ | (599,337) | | | | | | (76,303) | | |
Depreciable real estate reserves and impairments | | | | | 382,374 | | | | | | 6,313 | | |
Loss on sale of real estate, net | | | | | 32,370 | | | | | | 84,485 | | |
Purchase price and other fair value adjustments | | | | | 17,260 | | | | | | 8,118 | | |
Equity in net loss on sale of interest in unconsolidated joint venture/real estate | | | | | 13,368 | | | | | | 131 | | |
Depreciation and amortization | | | | | 247,810 | | | | | | 216,167 | | |
SUMMIT Operator Tax Expense | | | | | 9,201 | | | | | | 2,647 | | |
Amortization of deferred financing costs | | | | | 7,837 | | | | | | 7,817 | | |
Interest expense, net of interest income | | | | | 137,114 | | | | | | 89,473 | | |
Operating income | | | | $ | 247,997 | | | | | | 338,848 | | |
Equity in net loss from unconsolidated joint ventures | | | | | 76,509 | | | | | | 57,958 | | |
| APPENDIX A | | | A-3 | |
| | | Year Ended December 31, | | | |||||||||||
| | | 2023 | | | 2022 | | | ||||||||
Marketing, general and administrative expense | | | | | 111,389 | | | | | | 93,798 | | | | ||
Transaction related costs | | | | | 1,099 | | | | | | 409 | | | | ||
Loan loss and other investment reserves, net of recoveries | | | | | 6,890 | | | | | | — | | | | ||
SUMMIT operator expenses | | | | | 101,211 | | | | | | 89,207 | | | | ||
Loss on early extinguishment of debt | | | | | 870 | | | | | | — | | | | ||
Investment income | | | | | (34,705) | | | | | | (81,113) | | | | ||
SUMMIT operator revenue | | | | | (118,260) | | | | | | (89,048) | | | | ||
Non-building revenue | | | | | (44,568) | | | | | | (47,161) | | | | ||
Net operating income (NOI) | | | | $ | 348,432 | | | | | | 362,898 | | | | ||
Equity in net loss from unconsolidated joint venture | | | | | (76,509) | | | | | | (57,958) | | | | ||
SLG share of unconsolidated JV depreciation and amortization | | | | | 266,340 | | | | | | 241,127 | | | | ||
SLG share of unconsolidated JV amortization of deferred financing costs | | | | | 12,005 | | | | | | 12,031 | | | | ||
SLG share of unconsolidated JV interest expense, net of interest income | | | | | 272,217 | | | | | | 209,182 | | | | ||
SLG share of unconsolidated JV loss on early extinguishment of debt | | | | | — | | | | | | 325 | | | | ||
SLG share of unconsolidated JV investment income | | | | | (1,271) | | | | | | (1,420) | | | | ||
SLG share of unconsolidated JV non-building revenue | | | | | (14,336) | | | | | | (7,232) | | | | ||
NOI including SLG share of unconsolidated JVs | | | | $ | 806,878 | | | | | | 758,953 | | | | ||
NOI from other properties/affiliates | | | | | (110,012) | | | | | | (69,939) | | | | ||
Same-Store NOI | | | | $ | 696,866 | | | | | | 689,014 | | | | ||
Straight-line and free rent | | | | | (10,049) | | | | | | (5,933) | | | | ||
Amortization of acquired above and below-market leases, net | | | | | 53 | | | | | | (22) | | | | | |
Operating lease straight-line adjustment | | | | | 815 | | | | | | 815 | | | | ||
SLG share of unconsolidated JV straight-line and free rent | | | | | (20,087) | | | | | | (48,207) | | | | ||
SLG share of unconsolidated JV amortization of acquired above and below-market leases, net | | | | | (17,938) | | | | | | (17,598) | | | | ||
SLG share of unconsolidated JV ground lease straight-line adjustment | | | | | 678 | | | | | | 770 | | | | ||
Same-store cash NOI | | | | $ | 650,338 | | | | | | 618,839 | | | | ||
Lease termination income | | | | | (3,622) | | | | | | (1,199) | | | | ||
SLG share of unconsolidated JV lease termination income | | | | | (2,265) | | | | | | (8,515) | | | | ||
Same-store cash NOI excluding lease termination income | | | | $ | 644,451 | | | | | | 609,125 | | | | ||
|
| A-4 | | | SL GREEN REALTY CORP. 2024 PROXY STATEMENT | |
2016Proxy Statement B-4
SLCORP.420 LEXINGTON AVE.NEWCORP.ONE VANDERBILT AVENUENEW YORK, NY 10170AUTHORIZE100171. Election of DirectorsNominees:The Board of Directors recommends you vote FOR thefollowing:1b. Carol N. Brown1a. John H. Alschuler1c. Lauren B. Dillard1d. Stephen L. Green1e. Craig M. Hatkoff1g. Andrew W. Mathias1f. Marc Holliday2. To approve, on a non-binding advisory basis, our executivecompensation.The Board of Directors recommends you vote FOR thefollowing proposals:NOTE: The proxies are authorized to vote in their discretionupon such other business as may properly come before theAnnual Meeting, including any adjournments or postponementsthereof.The undersigned hereby acknowledge(s) receipt of the Noticeof the Annual Meeting of Stockholders, the terms of which areincorporated herein by reference, and revoke(s) any proxy orproxies heretofore given with respect to the Annual Meeting.This proxy may be revoked at any time prior to the timevoting is declared closed by giving the corporate secretary ofSL Green Realty Corp. written notice of revocation or by asubsequently dated proxy, or by casting a ballot at the AnnualMeeting.This solicitation of proxies is made by and on behalf of theBoard. The validity of this proxy is governed by the MarylandGeneral Corporation Law and applicable federal securities laws.This proxy does not revoke any prior powers of attorney exceptfor prior proxies given in connection with the Annual Meeting.3. To ratify the appointment of Deloitte & Touche LLP asour independent registered public accounting firm forthe fiscal year ending December 31, 2024.SL GREEN REALTY CORP.SCAN TOVIEW MATERIALS & VOTE wAUTHORIZE YOUR PROXY BY INTERNET -www.proxyvote.comUse www.proxyvote.comUse the Internet to transmit your voting instructions and for electronic delivery of information up untilofinformation. Vote by 11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date.on June 2, 2024. Have your proxy cardproxycard in hand when you access the web site and follow the instructions to obtain yourobtainyour records and to create an electronic voting instruction form.AUTHORIZEform.AUTHORIZE YOUR PROXY BY PHONE - 1-800-690-6903Use1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until 11:instructions. Vote by11:59 P.M.p.m. Eastern Time the day before the cut-off date or meeting date.on June 2, 2024. Have your proxy card in hand when youwhenyou call and then follow the instructions.AUTHORIZEinstructions.AUTHORIZE YOUR PROXY BY MAILMark,MAILMark, sign and date your proxy card and return it in the postage-paid envelope we havewehave provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way,Edgewood, NY 11717.TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:E07962-P73856 KEEP THIS PORTION FOR YOUR RECORDSDETACH AND RETURN THIS PORTION ONLYTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.SL GREEN REALTY CORP.The Board of Directors recommends you vote FORthe following:1. Election of DirectorsNominees:ForAgainstAbstain1a. Edwin Thomas Burton, III☐☐☐1b.Craig M. Hatkoff☐☐☐1c.Andrew W. Mathias☐☐☐The Board of Directors recommends you vote FOR the following proposals:ForAgainstAbstain2. To approve, on a non-binding advisory basis, our executive compensation.☐☐☐3.To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2016.☐☐☐4.To approve our Fourth Amended and Restated 2005 Stock Option and Incentive Plan.☐☐☐5.To consider and act upon any other matters that may properly be brought before the Annual Meeting and at any adjournments or postponements thereof.The undersigned hereby acknowledge(s) receipt of the Notice of the Annual Meeting of Stockholders, the terms of which are incorporated herein by reference, and revoke(s) any proxy or proxies heretofore given with respect to the Annual Meeting. This proxy may be revoked at any time prior to the time voting is declared closed by giving the corporate secretary of SL Green Realty Corp. written notice of revocation or by a subsequently dated proxy, or by casting a ballot at the Annual Meeting.This solicitation of proxies is made by and on behalf of the Board. The validity of this proxy is governed by the Maryland General Corporation Law and applicable federal securities laws. This proxy does not revoke any prior powers of attorney except for prior proxies given in connection with the Annual Meeting.Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.Signature [PLEASE SIGN WITHIN BOX]DateSignature (Joint Owners)Date
Meeting:
Meetingto be Held on June 3, 2024: The Notice and Proxy Statement and 2023 Annual Report are available at www.proxyvote.com.E07963-P73856SLatwww.proxyvote.com. V39706-P07048SL GREEN REALTY CORP.THISCORP.THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSTheDIRECTORSThe undersigned stockholder(s) hereby appoint(s) Stephen L. GreenMarc Holliday and Andrew S. Levine, or either of them, as proxies, each with the power to appoint his substitute and hereby authorize(s) them to represent and to vote as designated on the reverse side of this ballot all of the shares of Common Stock of SL GREEN REALTY CORPCORP. that the stockholder(s) is/are entitled to vote at the AnnualtheAnnual Meeting of Stockholders to be held at The Grand Hyattthe Auditorium at One Vanderbilt, One Vanderbilt Avenue, New York, 109 East 42nd Street, New York, New YorkNY 10017 at 10:00 A.M., local timeEastern Time on Thursday,Monday, June 2, 20163, 2024 and any adjournment or postponement thereof.THISthereof.THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER(S) AND IN THE DISCRETION OF THE PROXYHOLDER ON ANY OTHER MATTER PROPERLY BROUGHT BEFORE THE MEETING OR ANY ADJOURNMENT OR POSTPONEMENT THEREOF. IF NO SUCH DIRECTIONS ARE MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE BOARD OF DIRECTORS' NOMINEES LISTED ON THE REVERSE SIDE HEREOF, AND FOR PROPOSALS 2 3 AND 4.PLEASE3.PLEASE MARK, SIGN AND DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.ContinuedENVELOPE.Continued and to be signed on reverse side