Anthony E. Malkin
About Anthony E. Malkin
Anthony E. Malkin is Chairman and Chief Executive Officer of Empire State Realty Trust (ESRT). Age 62, he has served as a director since ESRT’s 2013 IPO and previously led ESRT’s predecessor entities as president starting in 1989; he holds a B.A., cum laude, from Harvard College . Under his leadership in 2024, ESRT delivered net income of $80.4M, Core FFO/share of $0.95, +5.2% same-store cash NOI growth, and the Observatory generated $99.5M NOI (+6% YoY); ESRT posted a 3‑year cumulative TSR of +22%, outperforming NYC office REIT peers . Malkin is recognized for energy efficiency leadership, including the Empire State Building retrofit and industry roles in sustainability organizations .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| ESRT predecessor entities | President | 1989–2013 | Led platform that became ESRT; spearheaded Empire State Building retrofit and tenant energy optimization standards . |
| Empire State Realty Trust, Inc. | Chairman & CEO | 2013–Present | Public company leadership through multiple cycles; ESG and balance sheet strategy execution . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| APi Group Corporation (NYSE: APG) | Director | Since 2019 | Current public company directorship . |
| Real Estate Roundtable | Board Member; Chair, Sustainability Policy Advisory Committee | Current | Industry policy leadership . |
| NYC Dept. of Buildings | Climate Mobilization Advisory Board Member | Current | Municipal sustainability advisory role . |
| Real Estate Board of New York | Board of Governors | Current | NYC real estate industry leadership . |
| Urban Land Institute; Partnership for NYC Innovation Council | Member | Current | Industry and civic engagement . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 810,000 | 850,500 | 880,000 |
| Target Annual Bonus (% of Salary) | — | — | 150% |
Notes: 2024 base salary increased 3% YoY; target bonus threshold/target/max set at 75%/150%/300% of salary .
Performance Compensation
2024 Annual Incentive Structure and Outcome (CEO)
| Metric | Weight | Threshold | Target | Max | Actual/Outcome |
|---|---|---|---|---|---|
| Core FFO per Share | 20% | $0.87 | $0.90 | $0.93 | $0.94; 200% outcome |
| Same-Store Cash NOI Growth (ex-Observatory) | 15% | -4.0% | -1.0% | +2.0% | +5.2%; 200% outcome |
| Leasing (composite) | 10% | See components - | See components - | See components - | 188% outcome |
| Balance Sheet (subjective) | 10% | N/A | N/A | N/A | Determined “Maximum” (200%) based on 5.3x Net Debt/Adj. EBITDA, $0.9B liquidity, no floating-rate debt, refinancings, and 1031 transactions . |
| G&A as % of Revenues | 10% | 9.4% | 9.2% | 9.0% | 8.9%; 200% outcome |
| Sustainability Goals | 15% | 13/17 points (50%) - | 15/17 (100%) - | 17/17 (200%) - | 17/17; 200% outcome |
| Individual Goals | 20% | N/A | N/A | N/A | “Exceeded”; 200% outcome |
- Total payout: 198.8% of target; Face bonus $2,623,500 .
- Election: 100% taken as 3‑year time‑based LTIP units at 120% of face ($3,148,211 grant-date fair value) .
2024 Long-Term Equity Incentives (granted 3/13/2024)
| Component | Threshold ($) | Target ($) | Maximum ($) | Vesting | Design |
|---|---|---|---|---|---|
| Time‑based LTIP Units | — | 2,610,000 | — | 25% per year over 4 years (service-based) | Dividends as paid; two-year post-vest holding period . |
| Performance‑based LTIP Units | 1,595,000 | 3,190,000 | 6,380,000 | Earn over 2024–2026; then 50% at end of period, 50% at +1 year (continued service) | 50% Relative TSR vs Nareit Office; Ops metrics (Core FFO/share, leasing volume, Net Debt/Adj. EBITDA) with absolute TSR modifier; 20% sustainability . |
- Recent cycle results: 2022–2024 performance-based awards earned at 96.1% (prior cycles 78.7% for 2021–2023; 24.7% for 2020–2022) reflecting TSR outperformance and operational/sustainability achievements .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 60,369 Class A shares; 642,979 Class B shares; 35,612,089 OP units; total 36,315,436 shares/units (13.3% of combined shares+OP units) . |
| Voting interest | 14.9% of all common stock voting power (Class B = 50 votes per share linked to OP units) . |
| Vested LTIP units held | 2,983,769 time‑based; 1,122,273 performance‑based (part of OP unit total) . |
| Unvested awards (12/31/2024) | Time‑based: 1,259,384 units (market value $12,996,843 at $10.32); Performance‑based: 2,305,435 units (market value $23,792,089) . |
| Stock ownership policy | CEO must hold ≥10x base salary; 2‑year post‑vest holding period on 2024 grants; hedging prohibited; pledging only with Compensation Committee pre‑approval . |
| Clawback | NYSE/Rule 10D‑1 compliant clawback adopted Dec 1, 2023 . |
Employment Terms
| Term | Key Provision |
|---|---|
| Agreement | Third Amended and Restated Employment Agreement dated Sept 20, 2024; term to Oct 7, 2027 with automatic 1‑year renewals; failure to renew deemed termination without cause (severance eligible) . |
| Compensation | Base ≥$880,000; target bonus 150% of salary; LTIP participation no less favorable than peers; perquisites include car/driver (up to $193,230/yr as of 7/18/2024), business-related private air travel reimbursement (per policy), and security services with oversight thresholds . |
| Retention | $1,000,000 retention bonus payable at term end or upon termination by company without cause/for good reason (increased from $700,000 prior) . |
| Restrictive covenants | Confidentiality/mutual non-disparagement; non-compete (amended Dec 11, 2024 to 1 year after termination), non-solicit/no-hire; JAMS arbitration; company covers arbitration costs if prevailing party . |
| Board nomination right | While specified ownership thresholds persist and he is CEO, the Board must nominate him for re-election; failure triggers “Good Reason” . |
Severance and Change-in-Control (CIC) Economics (Illustrative at 12/31/2024)
| Scenario | Cash Severance | Pro‑rated/Earned Bonus | COBRA | Retention Bonus | Equity (Time‑based) | Equity (Performance‑based) | Total |
|---|---|---|---|---|---|---|---|
| Termination without cause / Good Reason (no CIC) | $5,768,090 | $2,623,500 | $44,014 | $1,000,000 | $13,022,562 | $13,607,021 | $36,065,187 |
| Termination without cause / Good Reason (within 2 years post‑CIC) | $8,652,135 | $2,623,500 | $44,014 | $1,000,000 | $13,022,562 | $13,607,021 | $38,949,232 |
Notes: Equity values assume ESRT share price $10.32; 280G “cut‑back” applies (no excise tax gross‑up) .
Board Governance
- Roles and independence: Malkin is Chairman and CEO; the Board is majority independent (all directors except Malkin) and all committees (Audit, Compensation, Finance, Nominating & Corporate Governance) are composed entirely of independent directors .
- Lead Independent Director: Steven J. Gilbert (elected annually) presides over executive sessions and has defined authorities; structure adopted to mitigate combined Chair/CEO concerns .
- Committee memberships: Malkin is not listed as a member of Board committees; all committees are independent -.
- Board attendance: 2024 meetings – Board (4), Audit (12), Compensation (5), Finance (4), Nominating & Governance (4); aggregate attendance 95–100% across committees; each director attended ≥75% .
- Director compensation: Non‑independent directors (including CEO) receive no additional director fees; independent director program summarized separately .
Compensation Structure Analysis
- Mix and rigor: CEO pay is heavily at‑risk via annual bonus and multi‑year performance LTIPs tied to relative TSR, Core FFO/share, leverage, leasing, and sustainability, with explicit thresholds/targets/maximums and a two‑year post‑vest hold introduced on 2024 grants .
- 2024 outcomes: Near‑max annual bonus (198.8% of target) driven by above‑max Core FFO/share, same‑store NOI growth, G&A efficiency, strong leasing composite, and “maximum” balance sheet score; sustainability achieved maximum -.
- LTIP trajectory: After several years of 0% vesting in older cycles, recent cycles earned 24.7% (2020–2022), 78.7% (2021–2023), and 96.1% (2022–2024), aligned with TSR and operating improvements .
- 2024 equity sizing: CEO’s 2024 LTIP target increased 59% vs 2023 (still only ~6% above pre‑pandemic level after prior reductions); he declined a separate $5M special grant .
- Shareholder responsiveness: Average say‑on‑pay support ~96% over four years; extensive investor outreach on governance and pay practices .
Related Party Transactions and Alignment Controls
- Policies: Independent Nominating & Corporate Governance Committee reviews and approves related party transactions; ongoing oversight and disclosure mandated .
- Notable transaction: 2023 sale of Westport, CT retail assets ($40.0M) to an entity affiliated with Malkin followed a brokered process; independent committee approval with separate counsel/appraisals; a short‑term buyer loan (up to $1.0M) was fully repaid; ESRT now provides supervisory/management services on arm’s‑length terms .
- Excluded properties/businesses: ESRT provides limited services to Malkin‑affiliated “excluded” assets; fees are immaterial to ESRT’s business .
- Hedging/pledging: Hedging prohibited; pledging requires Compensation Committee approval .
- Clawback and no tax gross‑ups: Dodd‑Frank/NYSE‑compliant clawback in place; no 280G excise tax gross‑ups; cut‑back to avoid excise taxes .
Director/Officer Ownership and Say‑on‑Pay
| Item | Detail |
|---|---|
| CEO ownership as % | 13.3% of combined shares and OP units; 14.9% voting interest in common stock . |
| Say‑on‑pay | ~96% average approval across four years . |
Risk Indicators & Retention Considerations
- Retention: Contract through Oct 2027 with $1M retention bonus; double‑trigger CIC protection at 3x salary+bonus; robust equity overhang with significant unvested/earned equity supports retention - .
- Potential selling pressure: CEO elected 100% of 2024 bonus in 3‑year time‑based LTIPs at a 20% premium, creating scheduled vesting, but a two‑year post‑vest holding requirement mitigates near‑term sale risk .
- Governance mitigants: Lead Independent Director, fully independent committees, clawback, anti‑hedging, pledging oversight, and strong shareholder engagement - .
Investment Implications
- Alignment and execution: Large insider ownership, multi‑year performance‑linked LTIPs (relative TSR, Core FFO/share, leverage, leasing, sustainability), and above‑target vesting on recent cycles indicate improved alignment between realized pay and shareholder outcomes as TSR and operations strengthen .
- Balance sheet and operating levers: 2024 pay outcomes hinged on deleveraging (5.3x Net Debt/Adj. EBITDA), robust liquidity ($0.9B), and leasing/NOI momentum; continued delivery on these metrics supports further vesting and pay realization .
- Governance/dual‑role risk: Combined Chair/CEO structure is counter‑balanced by a strong Lead Independent Director, fully independent committees, and high say‑on‑pay support; nonetheless, investors should monitor related‑party interactions and capital allocation given concentrated ownership - .