CBRE senior bonuses drop

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Top directors’ pay much lower than 2010, despite 19% net profit rise to $239.2m in 2011

CBRE’s senior management bonus pool for 2011 will be significantly lower than it was in 2010, despite the firm’s net profit increasing 19% to $239.2m last year.

CEO Brett White, who received $11.5m in remuneration in 2010, which included stock awards of $7.5m and a cash bonus of $3.2m, told analysts in the wake of the firm’s 2011 annual results on Tuesday there would be “a material decrease” in the bonus pool for top directors.

White said the bonuses were not paid on a profit-share basis: “We believe that we need to raise the performance target objectively for management every year in a recovery.


CBRE executive director compensation in 2010 ($)
DirectorSalaryStock awardsCash bonusOther paymentsTotal
Brett White, CEO809,1357.5m3.23m-11.54m
Bob Sulentic, president671,991-1.9m124,3962.7m
Gil Borok, CFO434,615-570,0004401.0m
Calvin Frese, president global services577,404-1.71m4402.29m
Michael Lafitte, president Americas520,288-1.33m4401.85m
Mike Strong, president EMEA472,115-1.35m*-1.82m
Source: CBRE

“So the net impact of that is we have to do much, much better in 2011 over 2010 to get the bonuses we earned in 2010. While we did much better, it was not enough to get us back to that level.”

He added: “It is a real good bonus programme. I think it is dead on aligned with shareholders who want to see improved performance every year.”

In 2010 CBRE’s top six directors, White, president Bob Sulentic, chief financial officer Gil Borok, president of global services Calvin Frese, Americas president Michael Lafitte and Europe, Middle East and Africa president Mike Strong shared $21m in remuneration. CBRE also increased its net profit sixfold and its EBITDA (earnings before interest, taxes, depreciation and amortisation) by 74%.

CBRE Revenue Breakdown 4th Quarter 2011

Borok said the total bonus pool would be “north of $200m”. He said the cash on CBRE’s balance sheet before the bonus payments was “a little bit over $800m” and “will be held for now to assess opportunities in the market”.

CBRE’s results for 2011 showed a 15% increase in revenue to $5.9bn and a 7% rise in EBITDA to $693.3m.

Revenue in EMEA rose 15% to $1.08bn in 2011, but net profit and EBITDA dropped 31% and 2% respectively to $37.2m and $87.5m after weaker fourth-quarter figures. The fourth-quarter figures were hit by $11.1m of “cost containment expenses”.


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