Top CBL officials’ 2008 compensation dropped up to 40 percent as the shopping center company failed to meet its earnings target even though it posted a gain for the year.
Chairman and CEO Charles Lebovitz’ base salary was $445,451. His total compensation was $959,313, down 39.8 percent from 2007. His son Stephen, CBL’s president, made a base salary of $315,200. CFO John Foy made a base salary of $310,711.
Neither Charles Lebovitz nor Mr. Foy received bonuses last year, while Stephen Lebovitz received a bonus of $337,500, which was down from $625,000 in 2007.
However, while funds from operations were down in 2008 along with CBL’s stock price, it set company records for development, Stephen Lebovitz said.
“Last year was actually a very good year for the company,” Stephen Lebovitz said. “We had record years for our development division in terms of the amount of projects, square footage and dollars that came on line.”
CBL’s new developments in 2008 included Pearland Town Center, a 1.2 million-square-foot open-air center near Houston.
While many retailers have cut back on expansion plans, CBL doesn’t feel it has overbuilt retail space, Stephen Lebovitz said. The company has been successful in filling space left vacant by such companies as Circuit City and Goody’s Family Store, he said. Earth Fare recently announced it would occupy the vacant Goody’s on Gunbarrel Road, for example.
Although funds from operations grew 3.9 percent in 2008, it did not meet the company’s target, according to the proxy statement. FFO is the company’s primary earnings gauge. CBL had negative FFO growth in 2007. The company’s stock declined last year as well. So, the compensation committee acted on managers’ recommendation to adjust executive compensation, the proxy states.
Stock awards for each executive were: $508,112 for Charles Lebovitz; $544,211 for Mr. Foy; and $538,402 for Stephen Lebovitz. Stock awards reflect CBL’s expense in providing the awards and not the value of the stocks that the executives will realize, according to the proxy.
CBL executive compensation is determined by a combination of factors, including prior year performance, outlook for the current year and compensation at similar companies, Stephen Lebovitz said. CBL compensation is on the low-end for similar companies.
The company’s pay plan seems to be standard for most public companies, said Richard Casavant, dean of the College of Business at the University of Tennessee at Chattanooga.
“It sounds like they’ve adjusted their executive compensation to be in line with their results,” Dr. Casavant said. “They have an excellent executive team, and they will work their way through this.”
Starting last summer, CBL officials determined they were facing “significant headwinds” with economic conditions that will last all year, Stephen Lebovitz said.
CBL cut overhead in 2008 including laying off an unidentified number of workers. The proxy states that two of those laid off were Ronald L. Fullam and R. Stephen Tingle, both of whom were senior vice presidents of development. They received severance packages which included lump-sum payments equivalent to a year’s base salary, plus the vesting of all outstanding, unvested shares of restricted common stock.
Eric P. Snyder, senior vice president-director of corporate leasing, retired on March 31, 2008. He received $1 million in cash and $75,000 as a pro-rata share of his 2008 bonus, among other types of compensation, the proxy shows.