Drew Gordon
About Drew Gordon
Drew Gordon (age 58) is Chief Investment Officer at Hudson Pacific Properties, Inc. (HPP). He joined HPP in February 2011 after senior investment and development roles across West Coast office real estate; he holds a Bachelor of Social Science (Urban Development) from the University of Western Ontario and has directed acquisitions, entitlements, construction and portfolio repositioning for leading firms . Company performance context for pay alignment: 2024 net income was -$381.4 million, FFO per share was $0.53, and HPP’s cumulative TSR translated to $10.16 value for a $100 initial investment (peer group $68.44), underscoring a challenging backdrop for incentive outcomes . HPP’s 2024 compensation program retained strong pay-for-performance features with clawbacks, anti-hedging/anti-pledging, post-vest holding requirements, and stock ownership guidelines .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Hines Interests (San Francisco) | Project/Construction Manager | Prior to 1998 | Managed 2.4M sq ft of tenant improvements; involved in ~$1B base building development |
| SKS Investments (San Francisco) | Senior VP & Development Manager | 1998–2004 | Directed ~1M sq ft class-A office/residential redevelopment and ground-up development |
| ATC Partners (San Francisco) | Partner & Director of Acquisitions | 2004–2008 | Led >$110M of office acquisitions across major West Coast markets |
| Gordon Realty Investments | Founder | 2009 | Formed real estate advisory firm focused on acquisitions/advisory in SF Bay Area |
| Venture Corporation | EVP & Chief Investment Officer | ~2010 | Focused on acquiring distressed commercial loans and properties |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| City of Hope Real Estate Council | Board of Directors | Current | Industry network and philanthropic engagement |
| NAIOP SF Bay Area Chapter | Board; later Advisory Council | Recent; current Advisory Council | Regional real estate advocacy and market insight |
Fixed Compensation (2024)
| Component | Value | Notes |
|---|---|---|
| Base Salary | $552,500 | 2024 base; unchanged since 2022 |
| Target Bonus % of Salary | 115% | Threshold 69%, Max 172.5% |
| Discretionary Bonus Paid | $127,075 | “Bonus ($)” in SCT reflects discretionary portion |
| Formulaic Non‑Equity Incentive (Cash) | $667,145 | Corporate scorecard payout |
| Total Cash Bonus Paid | $794,220 | Sum of discretionary and formulaic amounts |
Performance Compensation (2024)
| Metric | Weighting | Target | Actual | Payout / Notes |
|---|---|---|---|---|
| Quarterly FFO per share (Q1) | 6.25% | $0.17 | $0.17 | Earnable above/below target; overall FFO piece capped at target if FY FFO/share < $1.05 |
| Quarterly FFO per share (Q2) | 6.25% | $0.17 | $0.17 | Same cap rule applies |
| Quarterly FFO per share (Q3) | 6.25% | $0.10 | $0.10 | Same cap rule applies |
| Quarterly FFO per share (Q4) | 6.25% | $0.11 | $0.11 | Same cap rule applies |
| Leasing Volume (000s sq ft) | 25% | 1,665.0 | 2,029.3 | Above target |
| Avg Annual Net Debt / Avg Annual Consolidated Gross Assets | 20% | 38% | 36.5% | Below target ratio (improved leverage) |
| Corporate Responsibility Priorities (points) | 10% | 8 of 10 | 9 of 10 | Above target; detailed third-party recognition and SBT progress |
| Other Key Corporate Performance Factors & Individual Performance | 20% | Committee assessment | Committee determination | Paid at 100% of target for discretionary component |
Additional alignment: Mandatory holding periods of 3 years post-vest for time-based equity and 2 years for any earned Performance Units; clawback policy adopted Oct 2023; anti‑hedging and anti‑pledging policies in force .
Equity Awards and Vesting
| Award Type | Grant Date | Units/Shares | Fair Value | Vesting / Performance Conditions |
|---|---|---|---|---|
| LTIP Units (time‑based) | Jan 1, 2024 | 100,966 | $746,139 | Vests in 3 equal annual tranches on Jan 1, 2025/2026/2027; 3‑year post‑vest holding applies per company policy |
| LTIP Units (time‑based) | Jan 1, 2023 | 30,147 | N/A | Vests in 3 equal annual tranches on Jan 1, 2024/2025/2026; 3‑year post‑vest holding applies per policy |
| Performance Units (target) | May 4, 2023 | 83,333 | N/A | Performance period ends Dec 31, 2025; two‑year post‑vest holding period applies |
| Stock Vested in 2024 | Various | 56,961 | $386,021 | Value realized on vesting; none of the NEOs held options in 2024 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (common and common units) | 199,775; less than 1% of outstanding common stock |
| Stock Ownership Guidelines | NEOs required ≥3x base salary; Mr. Gordon in compliance as of Jan 1, 2025 |
| Anti‑Pledging / Anti‑Hedging | Executives prohibited from pledging or hedging company securities |
| Options Held | None in 2024 |
Employment Terms
| Term | Detail |
|---|---|
| Role & Reporting | CIO; reports to CEO under 2025 agreements |
| Agreement Effective Date | January 1, 2025; initial term 5 years, auto‑renewal for 1 year unless notice given |
| Severance (no CIC) | Illustrative as if 2025 agreement applied: Cash severance $1,139,926; Continued health benefits $39,881; Equity acceleration $635,093; Total $1,814,900 (hypothetical termination on Dec 31, 2024) |
| Severance (double‑trigger CIC) | Illustrative: Cash severance $2,279,852; Continued health benefits $39,881; Equity acceleration $635,093; Total $2,954,826 (hypothetical termination on Dec 31, 2024) |
| Change in Control (no termination) | Equity acceleration $237,821 (hypothetical CIC Dec 31, 2024) |
| Tax Gross‑Ups | None; potential 280G excise reductions (“best net” cutback) |
| Equity Treatment & Bonus Pro‑ration | Time‑based awards accelerate on qualifying termination; pro‑rated cash bonus; double‑trigger CIC severance; updated agreements provide pro‑rated time‑based stock bonus and extend CIC window for certain NEOs (framework described) |
| Clawback / Restrictions | Clawback policy applies to Section 16 officers (Oct 2023); REIT ownership limits; awards subject to non‑transferability prior to vesting |
Compensation Peer Group and Governance Context
| Item | Detail |
|---|---|
| 2024 Peer Group (examples) | DEI, KRC, VNO, SLG, ESRT, HIW, CUZ, PGRE, PDM, JBGS; median EV $6.6B vs HPP $5.7B (as of Dec 31, 2024) |
| Say‑On‑Pay Outcome (2024) | 91.3% approval of executive compensation |
| Governance Features | Double‑trigger CIC; no repricing/cash buyouts without shareholder approval; majority independent Board; clawback; anti‑hedging/pledging; stock ownership guidelines |
Investment Implications
- Alignment and retention: Multi‑year vesting (2023/2024 LTIP tranches through 2027) and mandatory post‑vest holding periods temper near‑term selling pressure and support retention; new 5‑year employment agreement with double‑trigger CIC protections further stabilizes tenure .
- Incentive risk/reward: 2024 scorecard emphasized FFO/share, leasing and leverage improvement; discretionary bonus paid at target signals recognition of execution despite sector headwinds, while 2022–2024 TSR outcomes constrained PSU value creation—a caution for equity‑linked upside pace .
- Ownership alignment: Beneficial ownership and compliance with 3x salary guideline, plus anti‑pledging/hedging and clawbacks, reduce misalignment risks; no options outstanding minimizes repricing risk flags .
- Change‑in‑control economics: Double‑trigger multiples and equity acceleration are moderate versus CEO/CFO structures; no excise tax gross‑ups—a shareholder‑friendly feature; monitor CIC window provisions and pro‑rated equity mechanics adopted in 2025 agreements .