Jeremy Banoff, vice chairman at Ferguson Partners Consulting, participated in a video interview in conjunction with Nareit’s REITworks: 2022 Conference in La Quinta, California, on Sept. 12-13.
Banoff discussed the 2022 Nareit Compensation Survey, which Ferguson Partners helped produce, noting that salaries and turnover are the two hottest topics this year.
“For the first time since the financial crisis…the average and median [salaries were] 5% and 5.8% [respectively],” Banoff said. “In terms of turnover…it’s occurring mostly at the junior levels…[and] on the on-site level as well.”
Banoff added that five years ago, compensation and HR discussions were more narrowly focused, with compensation committees, for example, only discussing executives.
“Now it’s all about the entire company,” he said, including diversity at the board level and throughout the company, employee engagement, and internal pay equity.
Banoff also discussed the SEC’s new disclosure rule on pay and performance, which was released in late August but will be effective beginning in 2023. He said companies will need to disclose the pay for their CEOs and executive officers, both what has been reported and what has been realized, against different performance metrics.
“One is total shareholder return, one is total return to a set of peers, and then net income…and then a company-selected metric,” he said. “Truthfully, I’m a fan of pay for performance.”
Banoff added that Nareit argued, “rightfully so,” that FFO should be the main metric for REITs, but that unfortunately that did not make its way into the final rule.