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Indianapolis-based shopping mall giant Simon Property Group will reinstate the pay of executives and board members who had been working under pandemic-related pay cuts since spring, the company announced Monday.
President, CEO and Chairman David Simon, who had agreed effective March 28 to work without pay, will have his $1.25 million annual base salary reinstated on Saturday. Also, on Friday, Simon will receive back pay equal to the amount he missed during the previous nine months.
Similar reinstatements will also take effect for General Counsel and Secretary Steven Fivel and Chief Administrative Officer John Rulli, both of whom had agreed to reduce their $650,000 base salaries by 30%; CFO Brian McDade, who had agreed to reduce his $500,000 base salary by 25%; and Assistant General Counsel and Assistant Secretary Alexander Snyder, who had agreed to reduce his $445,000 base salary by 25%.
Independent members of the board of directors, who had agreed to work without pay effective April 1, had their quarterly cash retainer fees reinstated on Wednesday. The directors will also receive payment for the second- and third-quarter payments they had missed.
The board and executive pay cuts were part of a larger cost-cutting effort by Simon, which was forced to close its malls nationwide this spring because of the pandemic. As part of those cuts, Simon also eliminated more than 100 jobs between its downtown Indianapolis headquarters and its smaller New York City office.
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So, with the back pay payouts to the Executives and Board Members, none of them will miss out on any pay, it was essentially just delayed. How about the 100 people whose jobs were cut, will they be receiving any back pay? I get it, this is just the standard way of large or publicly traded companies and their executive pay, but does anyone else think this looks bad? Especially in these times of the pandemic?
Yes.
So, when is working without pay, not really working without pay? When it is reimbursed, that’s when.
Sounds like there might be a story here, IBJ. Doesn’t say who brought the issue to the board. David Simon? Who?
With all due respect, I am betting that executives have worked long and hard during this pandemic to ensure the future of SPG along with the jobs and livelihoods of the 5000-10,000 other workers that retained their positions in 2020. I am sorry for the 100 permanent loses, but management should be compensated for the work and stress they have endured and congratulated for their creativity, persistence, and strategic vision for the changes they have surely implemented to sustain the company for years, decades, and hopefully more to come.
Did critics read of Simon’s purchase of retailers like JCP and Brooks Brothers, saving those brands (and jobs) from certain demise?
Sometimes executives make too much, that is true. Sometimes management pay is warranted and needed to ensure everyone else continues as well.