Albert Behler
About Albert Behler
Albert Behler, age 73, serves as Paramount Group’s Chairman, Chief Executive Officer, and President (director since 2014). He studied law at the University of Cologne and holds an MBA from Georgia State University . 2024 “pay versus performance” shows five-year underperformance: an initial fixed $100 investment in PGRE equals $42 versus $75 for the MSCI US Office REIT peer group; 2024 NOI was $363.9 million and net loss was $46.3 million. Notably, actual CEO pay earned over 2020–2024 equated to only 49% of reported pay, reflecting stringent performance-based equity .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Thyssen (Germany, US, Saudi Arabia) | Various leadership roles; Managing Director Thyssen Saudia Co., President Thyssen Rheinstahl (Atlanta) | 1973–1991 | Led acquisition, financing, development and disposition of >10 million sq ft of commercial real estate across countries |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Real Estate Roundtable (Washington, D.C.) | Member | Current | Policy engagement and sector advocacy |
| Real Estate Board of New York | Board of Governors | Current | NYC market engagement and industry leadership |
| American Council on Germany | Business Advisory Committee Member | Current | Cross-border business relations |
| Citymeals-on-Wheels | Director | Current | Community leadership |
| ULI; Greenprint Foundation; ULI Greenprint Center | Former member/board roles; Exec Committee | Former | Sustainability and industry best practices |
| Association of Foreign Investors in Real Estate (AFIRE) | Former Chairman | Former | Global investor network leadership |
Fixed Compensation
| Metric | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | $1,100,000 | $1,134,000 | +3.1% (first post-IPO CEO base increase) |
| Target STIC (% of base) | 150% | 150% | Contractual minimum target for CEO |
| Actual STIC Paid ($) | $1,671,500 | $2,615,000 | 2024 payout reflects corporate and individual objectives |
| Total Target Compensation ($) | $9,000,000 | $8,335,000 | -7.4% YoY |
| Perquisites and Other ($) | $771,896 | $698,497 | Life/disability, limo/car, personal accounting, club memberships |
Performance Compensation
Short-Term Incentive Compensation (STIC) — 2024 CEO Detail
| Metric | Weighting | Target | Actual | Payout ($) | Notes |
|---|---|---|---|---|---|
| Core FFO per Share | 25% | $0.78 | Achieved; exceeded target range | $595,350 | Range: $0.76–$0.80 threshold/max |
| Square Footage of Signed Leases | 10% | 775,000 sf | Partial | $140,585 | Range: 650k–900k sf |
| Same Store Leased Occupancy | 10% | 87.1% | Below threshold | $0 | Range: 86.1%–88.1% |
| Corporate Overhead (G&A) | 15% | $61m | Achieved maximum | $357,210 | Range: $62m–$60m |
| Fundraising (JV/Fund Capital) | 25% | $200m | Partial | $178,595 | Range: $100m–$300m |
| Corporate Responsibility | 15% | 16 points | > Target | $323,722 | Range: 12–20 points |
| Corporate Objectives subtotal | 70% of STIC | — | — | $1,595,462 | — |
| Individual Objectives subtotal | 30% of STIC | — | — | $1,019,538 | Strategy, capital allocation, team leadership |
| Total STIC Paid | — | — | — | $2,615,000 | 154% of target |
Long-Term Incentive Compensation (LTIC) — Incentive & Retention Awards (front-loaded in 2023, in lieu of 2024–2025)
| Component | Weighting | Grant Date Fair Value | Vesting | Performance Hurdles | Status |
|---|---|---|---|---|---|
| P-AOLTIPs (Performance-based) | 60% | $6,600,000 | 20% vests 10/1/2026; 80% vests 10/1/2027 (with earned units) | 20-day avg price ≥ $6.40 (33%), $7.68 (67%), $8.96 (100%); linear in between | None earned as of 12/31/2024 |
| T-LTIPs (Time-based) | 40% | $4,400,000 | 50% vests 10/1/2026; 50% vests 10/1/2027; 1-year post-vesting transfer restriction for NEOs | Service-based only | Outstanding |
| 2024 LTIC accounting view (conceptual amortization of 2023 front-load) | — | $3,300,000 (Perf) + $2,200,000 (Time) | As above | As above | As above |
| Change-in-Control treatment | — | — | Double-trigger; service/performance conditions continue; qualified terminations accelerate service vesting per schedule | — | CIC vesting rules apply |
Equity Ownership & Alignment
| Metric | Value | Notes |
|---|---|---|
| Total beneficial ownership (common stock) | 1,493,627 shares | Includes 845,315 options exercisable within 60 days; 6,500 shares held by spouse |
| Total beneficial ownership (shares + units) | 14,458,061 (5.9% of shares and units) | Includes 6,560,775 common OP units; 1,817,052 LTIP units (1,274,075 T-LTIP unvested); 4,586,607 common units underlying convertible T-AOLTIP units |
| Stock ownership guidelines | CEO minimum = 6x base salary | Executives in place in Feb 2016 achieved by Feb 23, 2021 |
| Hedging/Pledging | Prohibited without NCGC approval; no current hedging or pledging by executives | Anti-hedging and anti-pledging policies |
| 2024 Vested equity and realized value | 381,710 units vested; $1,891,138 realized | CEO options exercises: none |
Insider selling pressure view: Major vesting cliffs in late 2026/2027 for T-LTIP and potential P-AOLTIP if price hurdles are met, implying concentrated potential selling/transfer events then; P-AOLTIPs are not yet earned and require ≥25% stock appreciation from $5.12 grant price .
Employment Terms
| Term | Detail | Implication |
|---|---|---|
| Contract term | Current agreement ends 12/31/2025; auto-renews for one-year terms unless 180-day notice | Stability with annual renewal window |
| Target bonus minimum | ≥150% of base salary | Embedded incentive floor |
| Severance (no CIC) | 2x (base + average of last 3 annual cash bonuses; min bonus floor $1.25m) + prorated target-year bonus; 2x health/dental premiums; time-based equity vests; performance equity per award terms | Meaningful cash/equity acceleration without CIC |
| Severance (with CIC) | 3x (base + average cash bonus) + prorated target-year bonus; 2x benefits; time-based equity vests; performance equity per award terms; rabbi trust funding on CIC | Higher multiple; trust funding enhances payment certainty |
| Non-compete / Non-solicit | Non-compete 8 months post-termination (CEO); other executives have 6–18 months varying covenants | Moderate garden-leave effect |
| Clawback | Mandatory recovery of incentive comp after restatement, excess over restated amounts, covering 3 prior fiscal years; no fault requirement | Strong clawback alignment |
| Tax gross-ups | None; 280G cutback if beneficial | Shareholder-friendly |
Board Governance
- Roles: Chairman, CEO, President; Chair of Investment and Finance Committee .
- Independence safeguards: Lead Independent Director (currently Martin Bussmann) with defined authorities (agenda, information, session leadership, shareholder access) .
- Board structure and attendance: Board held six meetings in 2024; all directors attended ≥75% of meetings and committees served .
- Committees: Audit, Compensation, Nominating & Corporate Governance are fully independent; Behler chairs Investment & Finance only .
- Dual-role implications: Unified leadership cited by Board; mitigated via lead independent director and executive sessions of independent directors .
Director Compensation Context
Non-employee director compensation includes $75,000 annual retainer plus committee/lead independent fees; annual equity grants of $120,000 in restricted stock or T-LTIP units. Executives receive no additional compensation for serving as directors .
Compensation Committee Analysis
- Committee: Greg Wright (Chair), Martin Bussmann, Paula Sutter — all independent .
- Consultant: FW Cook engaged; independence assessed; no conflicts .
- Peer group: 11 office REIT peers including Boston Properties, SL Green, Vornado; committee benchmarks and targets design with NYC talent market considerations .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay was not approved, with just under 50% support versus 2020–2023 average of 86%. In response, extensive outreach and commitment not to issue long-term equity awards in 2024–2025 (front-loaded 2023 awards), resuming annual grants in 2026 with balanced size and transparency .
Related Party Transactions (Red Flags to monitor)
- HT Consulting GmbH (100% owned by Behler) broker services for German fundraising: $462,000 fees/expenses in 2024 .
- Aircraft services: $1,667,000 in 2024 for chartered business travel; personal usage reimbursed to avoid incremental cost to Company .
- Weingut Karthauserhof KG (Behler-owned winery): $12,000 purchases for gifts/events (2024) .
- Kramer Design Services (owned by Behler’s spouse): $42,000 paid by PGRE; $36,000 via consultant; new 2025 agreements for $220,000 .
- Management agreements with Otto family entities (including Commercial National Bank Building): $695,000 fees in 2024 .
- Mannheim lease (benefit to director Bussmann’s family trust JV): PGRE share of rental income $119,000 (2024) .
Equity Ownership & Alignment Table (Expanded)
| Category | Amount | Vesting/Terms |
|---|---|---|
| Common stock (direct; incl. spouse) | 1,493,627 shares | Includes 845,315 options exercisable within 60 days |
| Common OP units | 6,560,775 units | Convertible into common stock |
| LTIP units | 1,817,052 units (1,274,075 unvested T-LTIP) | Service-based vesting through Feb 2025–2027; plus 2023 front-loaded T-LTIP vests Oct 2026/2027 |
| T-AOLTIP units underlying common units | 4,586,607 units | Convertible; 10% dividend-equivalent distributions pre-conversion |
| Total beneficial (shares + units) | 14,458,061 (5.9%) | — |
Employment & Contracts Summary Table
| Item | Detail |
|---|---|
| CEO employment agreement | Term to 12/31/2025; auto-renew; target bonus ≥150% base |
| Severance (without CIC) | 2x base + avg bonus; prorated target bonus; 2x benefits; time-based equity acceleration; performance equity per terms |
| Severance (with CIC) | 3x base + avg bonus; prorated target bonus; 2x benefits; time-based equity acceleration; performance equity per terms; rabbi trust |
| Non-compete | 8 months post-termination (CEO) |
| Clawback | Mandatory post-restatement recovery, excess over restated results |
| Anti-hedging/pledging | Prohibited without approval; none currently |
| Ownership guideline | CEO ≥6x base salary; met by 2021 |
| Double-trigger CIC for Incentive & Retention | Yes; service/performance conditions continue post-CIC; qualified terminations accelerate service condition (50% pre-2/1/2026; 100% on/after) |
Investment Implications
- Alignment vs. performance: Large equity alignment (5.9% of shares/units) and strict anti-hedging/pledging policies are positives, but five-year TSR underperformance (Company $42 vs peer $75) and 2024 say-on-pay failure flag shareholder skepticism; the committee’s 2026 return to annual LTIC and outreach may improve sentiment .
- Vesting/selling pressure: Material vesting cliffs in Oct 2026 and Oct 2027 for T-LTIP (and potentially P-AOLTIPs if price hurdles are met); concentrated events may create supply overhang risk around those dates .
- Retention and CIC economics: Severance multiples of 2x/3x base+bonus and double-trigger CIC provisions imply non-trivial change-of-control costs; rabbi trust funding improves payout certainty (potential M&A considerations) .
- Governance checks on dual role: The combined Chairman/CEO role is mitigated by a strong Lead Independent Director and fully independent key committees; continued monitoring of board refresh and committee workloads is warranted .
- Related party transactions: Ongoing RPTs (HT Consulting, aircraft, spouse-owned vendor, winery) are approved by disinterested independent directors but remain perception risks; magnitude ($2.2m+ aggregate direct items in 2024/early 2025) merits continued oversight, particularly through compensation and NCG committees .
Overall, executive pay remains heavily at-risk with meaningful performance equity hurdles; equity ownership and ownership guidelines support alignment, while underperformance, front-loaded awards, and RPTs are the primary governance and trading signal watch items over the next 12–24 months.