Brett White among directors affected by ‘adverse economic conditions’
CB Richard Ellis’s four board directors were feeling significantly less well off this week, after they agreed to forego last year’s bonuses and have this year’s salaries and bonus targets cut.
In a filing to the US Securities and Exchange Commission, CBRE said the directors ‘had elected to forego any performance award for 2008 in light of the adverse economic conditions impacting the company, its employees and stockholders’.
Performance awards for the four directors, CEO Brett White, chief operating officer Calvin Frese, chief financial officer Bob Sulentic and Asia Pacific president Rob Blain were based 80% on EBITDA (earnings before interest, taxes, depreciation and amortisation) targets and 20% on ‘the satisfaction of strategic measures’.
CBRE said it did not achieve the requisite EBITDA thresholds in 2008 – its EBITDA dropped 45% from $834m in 2007 to $457m – and, as a result, none of the EBITDA-based performance awards were earned.
Although the board then decided that bonuses would be based on ‘the satisfaction of strategic measures’, the four directors decided to forego them before the board had determined the amount.
For this year’s bonuses, the target amounts for the four have been cut by around 50%. White could pick up a maximum $850,000 bonus, Frese and Sulentic $450,000 each, and Blain $260,000.
Their salaries this year have been cut at their request by 6.7%-11.8%. White’s salary is now $765,000, Frese’s $553,000, Sulentic’s $529,000 and Blain’s $481,000.
Last year CBRE made a net profit of $83.9m (£57.9m), or $0.39 a share, which was 79% lower than the $496.8m (£342.9m), or $2.11 a share profit in 2007.
However, it also made a $1.2bn writedown of goodwill and other intangible assets, causing it to make a consolidated net loss of $1bn for 2008.
CBRE’s operating, administrative and other expenses decreased by $241.6m – or 12.1% – last year, driven by reduced incentive compensation payments, including bonuses and carried interest payments at CBRE Investors, resulting from lower business performance and cost reduction measures.
CBRE is not the only property services firm to cut bonuses. Savills revealed this week that the 2008 bonus pool for all staff had been cut by 47% to £59m. NB Real Estate has cancelled its 2008 bonus payout, and partners at King Sturge have agreed to defer 30% of their bonuses for reinvestment in the running of the firm.