CBRE GROUP, INC. Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
2022 CEO Compensation
On February 18, 2022 , the Compensation Committee (the "Committee") of the
Company's Board of Directors (the "Board") established the 2022 target
compensation described below and issued a one-time Strategic Equity Award to
Robert E. Sulentic , the Company's President and Chief Executive Officer ("CEO").
Since 2012, the year Mr. Sulentic became our CEO, through 2021, the Company has
significantly exceeded the S&P 500 aggregate in total shareholder return1 (445%
for CBRE and 299% for the S&P 500). The Company has also significantly outpaced
the S&P 500 in earnings growth from 2012 through 2020 (129%2 for CBRE vs. 32%3
for the S&P 500) and has grown GAAP EPS 144% from 2020 to 2021. Under
Mr. Sulentic's leadership, the Company successfully navigated the global
pandemic, as reflected in its key financial metrics reaching new record highs in
2021, and begins 2022 with an enhanced management team, focused strategy, strong
balance sheet with significant liquidity, while being well-positioned for future
profitable growth through its diversification across asset types, business
lines, clients and geographies. In addition, the Company is a sector leader on
ESG, as evidenced by its inclusion in the Dow Jones Sustainability World Index
and the Bloomberg Gender-Equality Index, among others.
As a result of Mr. Sulentic's long track record of superior performance, the
Committee determined that it is in the best interests of the Company and its
stockholders to ensure his continued leadership over the next five years. The
Committee has therefore increased Mr. Sulentic's target total direct
compensation opportunity for 2022 to $18,500,000 . This includes his base salary
of $1,250,000 , target annual performance award opportunity of $2,500,000 , and
target annual long-term incentive award grant value of $14,750,000 . In addition,
the Committee has awarded Mr. Sulentic a one-time strategic equity grant with
target grant value of $7.5 million and a five-year cliff vesting period. This
grant, in combination with his ongoing target total direct compensation, is
intended to motivate and reward Mr. Sulentic to continue leading the Company to
achieve superior performance over the next five years. The structure of
Mr. Sulentic's compensation package, with its emphasis on performance-based and
equity elements, is aligned with continued long-term shareholder value creation.
2022 Target Total Direct Compensation
Annual Long-Term Equity Incentives
Annual Performance Adjusted EPS Award Time Vest Award Target Total Direct
Base Salary Award Target Target Target Compensation
$1,250,000 $ 2,500,000 $ 9,833,333 $ 4,916,667 $ 18,500,000
One-time Strategic Equity Award
The one-time Strategic Equity Award is designed to motivate and reward sustained financial and share-price performance over a five-year cliff vesting period. In exchange for the Strategic Equity Award,Mr. Sulentic has agreed to execute an amended and restated Restrictive Covenants Agreement, which extends his existing non-competition and non-solicitation restrictive covenants throughDecember 31, 2026 . The total target grant value of Restricted Stock Units ("RSUs") associated with the Strategic Equity Award is$7.5 million . This consists of (i) Time Vesting RSUs (33.3% of the total target RSUs), (ii) Relative Total Shareholder Return (rTSR) Performance RSUs (33.3% of the total target RSUs) and (iii) Relative Earnings per share (rEPS) Performance RSUs (33.3% of the total target RSUs). The payout on two-thirds of the Strategic Equity Award is performance-based and subject to rigorous cumulative Adjusted EPS and total shareholder return hurdles relative to the companies that comprised the S&P 500 onJanuary 1, 2022 (the "Comparison Group "). For each measure, none of the performance-based awards will be earned unless the Company's performance is above the 50th percentile.
1 S&P 500 total shareholder return from
as published in Factset.
2 Calculated based upon the Company's reported GAAP EPS from 2012 - 2020.
3 S&P 500 earnings performance from 2012 - 2020 as published in Factset. Note
that Factset reports earnings data based upon a mix of GAAP and
non-GAAP metrics.
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The Strategic Equity Award has been made under terms that are materially
consistent with grants previously given to certain senior executives and
described in the Company's Current Report on Form 8-K filed with the
• The vesting term of each type of RSU subject to the Strategic Equity
Award is five years, which is much longer than typical market practice
and longer than the three-year vesting period associated with our
annual performance-based RSUs and the four-year vestingschedule
associated with our annual time-based RSUs.
• Time Vesting RSUs (33.3% of the target RSUs). 100% of the Time Vesting
RSUs will vest on February 25, 2027 , subject to Mr. Sulentic's
continued employment with the Company on such date.
• rTSR Performance RSUs (33.3% of the target RSUs). The actual number of
rTSR Performance RSUs that will vest ranges from 0 to 175% of the
target number of rTSR Performance RSUs and will be based on the
Company's cumulative TSR relative to the cumulative TSR of the
companies in the "Comparison Group " over a five-yearmeasurement
period commencing on January 1, 2022 and ending on December 31, 2026 .
• rEPS Performance RSUs (33.3% of the target RSUs). The actual number of
rEPS Performance RSUs that will vest ranges from 0 to 175% of the
target number of rEPS Performance RSUs and will be based on the
Company's cumulative Adjusted EPS growth relative to thecumulative
EPS growth, as reported under GAAP ("GAAP EPS"), of thecompanies in
the Comparison Group over a five-year measurement period commencing on
January 1, 2022 and ending onDecember 31, 2026 . "Adjusted EPS" is defined as the Company's earnings per share, as adjusted for certain changes in accordance with the terms of theCBRE Group, Inc. 2019 Equity Incentive Plan and the applicable award agreement, and publicly reported by the Company as "EPS, as adjusted" for each applicable period within the performance period. EPS growth will be calculated by determining the compound annual growth rate in EPS for the Base Year that would generate the cumulative EPS for the five years in the performance period. "Base Year" means the four quarters ending most recently prior toJanuary 1, 2022 .
The performance and payout schedule for the rTSR and rEPS Performance RSUs is intentionally challenging and no shares will vest unless the Company's performance on the relevant metric exceeds 50th percentile performance. The payout schedule for the rTSR and rEPS Performance RSUs is as follows:
CBRE's rTSR % of Target rTSR CBRE's rEPS % of Target rEPS
Performance (Percentile Performance RSUs that Performance (Percentile Performance RSUs that
Rank) Vest Rank) Vest
<=50th Percentile 0% <=50th Percentile 0%
>= 75th Percentile 175% >= 75th Percentile 175%
If the Company's performance percentile ranking is less than or equal to the
50th percentile, then none of the relevant performance awards will be earned. If
the Company's performance percentile ranking is greater than or equal to the
75th percentile, then 175% of the relevant performance awards will be earned.
There is linear interpolation if the Company's performance percentile ranking
falls between the 50th percentile and 75th percentile. The rTSR Performance RSUs
and rEPS Performance RSUs will vest on the date on which the Committee certifies
the performance percentile ranking achieved. The certification will occur as
soon as practicable but not later than 90 days following the end of the
performance period for the rTSR Performance RSUs and 90 days for the rEPS
Performance RSUs.
2022 Compensation for Other Named Executive Officers
In addition to settingMr. Sulentic's compensation, the Committee also established base salaries, annual performance award targets and long-term equity incentive award targets forMs. Giamartino and the other named executive officers whose compensation was disclosed in the Proxy Statement for our 2021 Annual Meeting of Stockholders. Long-Term Equity Incentive Annual Time Vest Total Equity Base Performance Adjusted EPS Award Award Name Salary Award Target Award Target Target TargetEmma E. Giamartino ,Global Group President, Chief Financial Officer and Chief Investment Officer$ 680,000 $ 1,000,000 $ 910,000 $ 910,000 $ 1,820,000
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John E. Durburg , Global Chief Executive Officer-Global Workplace Solutions$ 775,000 $ 1,160,000 $ 2,032,500 $ 2,032,500 $ 4,065,000 Michael J. Lafitte , Global ChiefExecutive Officer-Real Estate Investments$ 775,000 $ 1,160,000 $ 2,032,500 $ 2,032,500 $ 4,065,000 Daniel G. Queenan , Global Chief Executive Officer-Advisory Services$ 775,000 $ 1,160,000 $ 2,032,500 $ 2,032,500 $ 4,065,000
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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